Jun 05, 2017 City Council on 2017-06-05 11:30 AM

It's about 1032. We do have a quorum. It's our regular called work session. We're going to go through our work session report. Actually this is a Monday lunch. I don't even know where I am. So yeah 1132. What'd I say? 1032. I tell you what I'm just gonna leave it. Mayor Pro Tem, you can run the meeting. Work session reports 1A. Receive report, hold discussion, give staff direction regarding the preliminary FY 2017 through 18 budget. Thank you Mayor. I'm Chuck Springer, the Director of Finance. And I do want to stress, I'll go to my first slide, but stress this is the preliminary look at the budget. We're still getting numbers in. In terms of the objective today is just to present a general overview of the budget structure and budget process. I'll try to go through that quickly but answer any questions that council members may have to present some preliminary estimates for the upcoming year 17-18. Today we're going to focus or I'm going to focus on the general fund and then water, wastewater, and solid waste funds. There's some presentations regarding those funds that are the second item and I'll highlight some additional funds to be presented during departmental budget presentations which are going on through June and July. And another very important point is to receive direction from City Council on budget priorities as we go into developing the budget. In terms of an overview, our fiscal year starts October 1. We're required to adopt a budget and set a property tax rate by September 30th. Just a little few details, the tax rate under state law requires a vote of 60% or more of the City Council so it takes five members to set a tax rate. The budget is a simple majority, it just takes four members. And the City adopts a budget that covers all operating and capital expenditures. I'm not going to go through these but in terms of what the budget adopts, there's the major operating funds, the general fund, debt service, the utilities, street improvement, our tourist and convention fund. There's internal service funds which support all the other functions or all the functions of the city. Technology services is the largest one, materials management that's purchasing and warehouse, fleet, risk, health and engineering services. And then we have the capital funds mainly for the general government functions and then each of the utilities plus the airport has separate capital funds and then special revenue funds. And I'm not going to list all of these but for special revenue funds either under city ordinance or under state law these funds have to be segregated because they have to be used for specific purposes. The only one's a little bit different than that is the donation funds you can see at the bottom but those are donations given to those specific departments so we want to use those for those functions. In terms of just to give you an idea of the composition of the city, this is in the current year. You can see about half of the adopted budget of 1.185 billion is for capital projects . You can see up in the dark blue is the general fund at about 10%. The electric fund is over in the green at about 14.6%. So it just kind of gives you an idea between the general fund, the capital projects and the utility funds are the significant portion of the city's budget. In terms of themes for this year and these are some changes from the prior year so I'll go over these. I wanted to highlight the first focus is on cost containment and organizational efficiency. The proposed budgets that you'll see are set at no rate increase so zero rate increase for the utility funds and for the general fund the effective tax rate which really is a tax rate. It's a calculation under state law but really you get new revenue from new construction but it's trying to set a rate so that the existing value will have the same tax as it did in the prior year. Now it's same tax in total so for different properties it can go up and down but that's really the philosophy behind the effective tax rate and I think under state law they're changing the name of it from effective to I forget no new tax or no new tax rate but luckily that's not till next year that we have to implement that. There's continued street maintenance expansion. Last year we started on a program to take all the remaining franchise fees in the general fund about 6.2 million over 10 years and move those over to street maintenance. We've continued to do that when I get to the general fund assumption I'll go over that . Expanded public safety response capabilities in terms of the utility fund maintaining the utility infrastructure some of that is replacement some of that is expansion maintain simply a competitive compensation plan and to continue the conservative budgeting practices that are preferred by the rating agencies. In terms of the general fund I'm listed here the different departments and functions that are contained within the general fund. You can see neighborhood services, public safety, transportation and then kind of administrative services the general services there. In terms of the general fund projections I'm going to give a look at the general fund on a five-year basis but I wanted to kind of highlight these projections and again I stress the word very preliminary about all I know about these is they will change when we get the numbers in July. I'm estimating an assessed value increase somewhere between 9 and 11 percent the highest we've had in the last several years was about 11.5 percent about three years ago. In terms of preliminary values they're running about at that level that we did a few years ago so that's what we're doing and in 18 -19 and when I get to 17-18 I'm projecting that kind of increase but I'm lowering the rate to what I estimate to be an effective rate. 18-19 and beyond we're just showing growth of about 2 percent that's about what we've been running in terms of new value added to the roles so that's kind of an estimate going forward about the additional revenues we would get under an effective tax rate. The tax rate roughly for 17-18 based on these revenues is set at about 66 cents that's about 2.3 cents below our current rate of 68.3. Again when we get the final roles the higher the final role is the lower that number will be in terms of the effective tax rate the more growth we have. Did you calculate that on either the 9 or the 11 percent? It's about the 9. You did it on the 9? Okay. Yeah roughly the 9 a little bit over the 9 so if we're at 11 or above that would probably be a lower number in terms of the effective tax rate. Sales tax estimated at 3 percent above the revised estimate for 16-17 and I'll show you that on a few slides and that's kind of net after some one-time sales tax grants for the Convention Center and for the Wynn Code development we entered into 380 agreements and rebated back the one cent sales tax or one and a half cent paid to the city of Denton so that's kind of one-time revenue that's come in and gone out so I've tried to net that out in future projections since it won't continue. And beyond 17-18 it's just a 3% growth rate in sales tax. The franchise fees I mentioned we're transferring an additional 622,000 every year. We transferred 622,000 in 16-17 so that's an accumulative additional 622,000 every year so at the end of five years it'll be a little over three million dollars and the franchise fees the general fund would be about half of that 6.2 million we'd be down to a little over three and an additional three in the Street Improvement Fund. A couple other major revenues return on investment and these are payments from the electric water and wastewater utilities to the general fund set it currently by policy three and a half percent of revenues that's about eight million in revenue for 17-18 based on those preliminary budgets. The last major revenue source I want to stress On the ROI so council conceivably could have a discussion on if we wanted to lower or increase the percentage of the ROI this year. Yes I think historically that's been the percentage for several years I think it was a recommendation that came out of the PUB but that's set by council. There's a limitation in the charter that it can't be more than 6% of the net assets so there's a limitation. Right now that three and a half percent of revenues is well below that 6% of net assets. Would it be possible to get a comparison of other cities with their own utilities to compare their ROIs to our percentage because I know Garland is at eight and a half percent ROI so I'd like to just kind of get an idea of what cities are using in that in that regard. Thank you. We will put that together. The last one is a cost of service indirect cost transfer and I bring this one up in some of the slides you 'll see on like the utilities you'll see an account that's called cost of service or transfer. A major portion of that is general fund costs that are allocated out to all of the funds for items like the city manager's office, human resources, finance, facility, legal, public communications. They really serve all those functions of the city. They're all contained in the general fund and we go through a pretty detailed allocation of those costs out to the utilities and the other funds so that that shows up as a transfer and a revenue to the general fund. Councilmember Gregory. Well in addition to that from the various funds that also includes our utilities doesn't it? Don't they do a cost of service indirect cost transfer too? They make a payment to the general fund but they also do some cost of service a few charges to the general fund. For human resources, the legal department, things like that. Yeah in other words they they this cost of service is a charge from the general fund to the other funds so that revenue comes back to the general fund. So as a follow-up to Mayor Pro Tem Begari's question when you're looking at other cities that own utilities not only do we need to know what their ROI is that they're that they're receiving from the utilities but do they use the same accounting system that we do or do they include the cost of services for HR, legal, and other things as part of their what they receive from their ROI? We'll have to look into that. Yeah because otherwise we're not going to be comparing apples to apples. We will we will gather that information also. In terms of in the preliminary look what we're looking at we've based it on a 3% average merit increase and increases for civil service based on the meet and confer agreements what's required in those agreements for civil service. The future years I've just estimated a 3% inflationary increase. Health insurance assumes a 3% increase in city contributions. This is down from prior years. We've lowered it down and the employee contribution rates we're going to still working on that for the current year. In terms of the retirement rates the TMRS rate beginning in 2018 will decrease to 17.31%. It's at 17.48 for the current calendar year and we've estimated the fire pension rate for these estimates at a flat 18.5% going across. Thank you Mayor. On health insurance you're assuming a 3% increase for the city contribution. Are you assuming that that health insurance rates are not going to be going up as much or are we going to be making up the difference of a lower increase by the city by increasing the cost to the employees? In terms of what we're seeing at least in the current year we've had a good year in terms of health increases so going for next year we 're assuming the 3%. I think it's a combination of that and potential plan changes. In terms of future years there may be plan changes necessary to keep it within that 3%. It really depends on what health cost does in terms of inflation in future years. As we move on down during our discussions I want to be sure to come back and be very very clear about that issue. If it's just we're able to we've contained it we have had a good year and therefore neither the city's portion or the employees portion needs to increase significantly but what I would hate to see is an effort to hit a certain mark on our on our bottom line by causing employees to have to pay significantly more for their portion of health insurance. Chuck on the fire pension rate how does that compare with last year? I know there was a presentation to council before I came on that the fire department's a little behind. Yeah in terms of it historically what we've been doing is paying the fire pension at the same rate as TMRS but as our TMRS rate continues to decline we really looked at their actuarial study to see what would be necessary to get them to full funding in the same time period that TMRS comes to full funding and it's a little bit higher rate. I think this is the conservative end of the rate that we've projected for them but that's what we're using right now. So question on that because I know that's in the meet and confer is the term of it follows the TMRS so this is just a rate this hasn't been agreed upon by anybody this hasn't been vetted through any type of negotiations or anything like that I know there's some discussion about that but so this is just your for budgetary purposes this is correct for conservative budget purposes. Conservative budgetary purposes. All right thank you. Before I get in the general fund I want to talk about cost containment efforts that have already gone on in terms of reductions in FTEs from vacant positions. These are the positions in which we're reducing FTEs in the current fiscal year and the associated dollars with those in the general fund currently it's a little over 10 positions. You can see that one foot note that one we're really replacing FTE count with contractual services but about a million one in reductions in the current fiscal year that will carry forward and these are reflected in the estimates. We've also got some FTE reductions in other funds beyond the general fund that are listed here and again these are built into the budgets for for these funds and the total is about 20. Could you go back one page? Well we have I know that it seemed like it was just last year or the year before that we added a couple of building inspectors and plans examiners in order to increase efficiency and effectiveness and responding to our developers so I'm assuming that when we hear the individual department budgets they're going to explain how we're going to continue to hit our targets with fewer staff. Yes Council member Barrier we're currently working through this in a couple different ways. All the departments right now are collecting metrics so we can examine workloads and make more objective decisions and as I shared with you about three weeks ago or so the building inspections are sorry that we've got a numerous recommendations that we're currently implementing to improve processes and that has a direct bearing on the staff. We're also spending some time right now studying our development review process and our engineering processes and again preliminary concerns is that we've built staffing around inefficient processes versus putting efficient processes in and training our employees properly and that's what we're expecting to conclude here sometime in July but we're able to handle the workload but we're also improving the quality of our data right now and so we feel very comfortable moving forward that by adjusting processes this is the right staffing mix. We have still left a few positions in development services in particular anticipating that we're going to have to restructure duties a little bit more as well depending on the outcome of the study so there's another three or four there that are unf illed and we like to reserve the right to adjust their duties based upon the efficiencies that we learn of. If I may follow up I have no problem with the direction that you're going in that regard with with a caution however because the very budgetary themes we heard are cost containment and efficiency and those are both very good things but I don't want to see cost containment and efficiency at the expense of quality of services and the the effectiveness of our services for example we were told that we needed more building inspect ors because our building inspectors were rushing through inspections and if we reduce the number of building inspectors and maybe that's just because they 're being inefficient maybe they're spending too much time during doing unnecessary things but what I would hate to see is creating an efficiency of we're getting more inspections out of each building inspector but the quality goes down right because if the quality goes down then that could create some serious significant issues for the health and safety of the people that are using those buildings so I would like to see metrics also about how we're going to be able to either keep the quality at the level it is or increase the quality because I don't have too many people complaining that the quality is too high right totally agree with you and I think we're in the in lockstep there we in one of the one of the metrics that's been put in place is a number of re-inspections errors that sort of thing so there is quality control being built in quite frankly it it took three or four days to put together our own data so we could talk objectively and make staffing recommendations but I think we're headed exactly the same place you are we don't want to see an impact on effectiveness or safety either okay thank you with that with these reductions there's a recommendation to add some FTEs in another area within the budget in the current year and this is within the police department this was one of the items that was brought forth as a supplemental package a portion of a supplemental package so we're recommending adding five patrol officers in the current fiscal year and one crime analyst for six positions kind of replacing some of those ten that were eliminated in those dollars you can see the cost there one of the reasons to do this is to meet the next scheduled police academy class which is at the end of July so if we do this now versus waiting for the budget process we can start start those officers through the process a little bit quicker and I do want to highlight one of the three vehicles is proposed to be purchased from police seizure funds the other two from the general fund yeah I support this a hundred percent what's the timeline that the chief has given for these funds to be approved by council well in terms of the timeline I think you're going through testing now or just finished testing for officers so once selected they could start these additional officers if they have enough in the end of July class that would start really what this is is just a reallocation of resources within the general fund in the current fiscal year so it says proposed does council need to vote on this proposal I don't think they need to vote but it would be nice if they kind of gave a nod or in agreement with that before we implemented it in terms of within the current year with the FTE count and the dollars it's available but I think we want councils approval on this before we move forward well I'm a little approval not not not a passage of an ordinance or I'm certainly giving my nod so okay thanks so is this in addition to the seven officers that were added for this this 16 17 year it'd be additional officers yes okay and then the vehicles that number represents three vehicles or two vehicles three vehicles okay so then where's are the seizure funds included in there or that's something separate well that's the total amount of the package the seizure funds would pay for one of the vehicles so about 60,000 so our but our total budget amendment is 810,000 well it's not really an amendment per se when I go back here here's the savings from the right it's here so we're really taking out of these ten positions we've eliminated we would kind of repurpose six of them into this package in terms of the dollars there'll be very little impact in the current fiscal year because you know the earliest the Academy would start would be the end of July okay well I'm in favor of this I would like a better understanding of you know why we're adding 12 officers in a year so if I could just get a better holistic view of kind of what's going on there I'll ask chief how to prepare something for you I think I think one thing the reason that we're moving this up as well is when we add these police officers given how Denton operates with new officers I've been in other communities where we've allowed laterals it's not something that's been a practice here so typically but when you approve the position chief how will do the hiring off the list it's about a year before these folks get on the street through the Academy get properly trained that sort of thing so you will see most likely the those officers that were approved last year if we can get them through the Academy get them on the streets about a year if there's also ongoing transition that it's occurring in the department so chief I'll just finish building his list to move this forward and the one of the ways that he's also accounts for that is through unstructured time of the officers you typically want to see them with about a quarter of their time maybe more unstructured and that means you know directive patrols directive workloads that sort of thing and right now we're pushing 15 to 18% so I think there's some strong metrics behind this decision but we're happy to maybe through an informal staff report something kind of explain exactly where he is right now in the hiring process and eventually what the goal would be appreciate that like I said I'm in favor of this I just would like to understand it a little bit better okay thank you so I I am in favor just wanted to go in record and also when we get that update from chief however I remember last year we had some questions about how many officers were on duty at a time and I think it was significantly a low number when you when you look at that like during certain hours so just kind of a every refresher of that as well thank you so absolutely agreement with that approach I heard much the same during the campaign process so I'd like to see this more regular when we have losses in the department due to the great work they're doing and they're getting promoted we can then fill that in during the year versus waiting so we can step on top of those things but in addition to that I'd like to understand our recruiting technique because I was inspired by San Antonio that understood there was blood and water in Dallas so they set up shop in in Dallas and started hiring officers ready to hit the street I'd like to see city of Denton do something similar I think we have a lot to offer and I think if we go north to two different areas states this that or the other I think we can pull from those pools and so I'd like to understand our recruiting process as an aside to as we're trying to feel kind of incrementally or as the need arises or however we do that I'd like to understand that recruitment process better or what our strategy approach is to that thank you and if I could answer councilmember that's this question briefly I had the same questions when I saw when we learned that they were setting up shop in Dallas they we do not currently have the ability in our meet confer agreement to accept lateral transfers in which is the difference you know that's not that's not to say that could never change I know it's something that Chief Howell is at least improving a little bit right now but that would have to be a change to the meet confer agreement in order to take advantage of that. When the chief makes his presentation regarding the numbers by the way I'm in favor of this direction I'm going to be curious to see what he has to say about our how this will impact our goal of having all of our response for emergency dispatch in less than six minutes. Right now as of our second quarterly report at the end of half of the year we are at six minutes and 48 seconds our goal is less than six minutes but you compare that to a year ago halfway through our budget a year ago we were we were at seven minutes and 11 seconds so we're reducing the time and I suspect that that might have something to do with the number of police officers it may have to do with with where we're positioning them. Three years ago it was seven minutes and 35 seconds was now I think that that's it three years ago it doesn't show a breakout between emergency calls and non-emergency calls I think that this must be emergency calls so I like the direction that we're moving in. The other question that I have on response to emergency calls is what the national standard is because I don't know we see a national standard in our performance report for what the national standard is for fire department response time but we don't for police department so in his report I'd like to see that and it may be that that we have some unique circumstances because of our population density and the fact that we have 98 square miles opposed to a lot of other cities that are much more compact so so you know take that into consideration. I also in support of this like to say I don't have to be part of the budget process or just a separate work session as far as police substations as we as we spraw l and our centers get heavier in other areas is that something that the police department sees as beneficial or or not necessary just because the police are constantly everywhere? We will certainly report back to you I know Chief Howell is definitely looking for remote offices that the employees can go in and file reports and work from that sort of thing but we'll have all that ready for you we'll schedule a follow-up with you sometime in July so make sure you've got all your answers. So Chuck I mean obviously I'm good with this but in this coming this upcoming budget 17-18 17-18 this is already built into that I mean in the sense or as far as the base number of the general fund it might not be split out as far as each specific budget item or department but we're not looking at increasing there's still a net decrease at least based upon the personnel savings and then using this there's still a net decrease from this current year budget is that correct? That's correct. Okay. Okay all right. In terms of the five-year forecast and just real briefly we really just try to look at the long term impacts of decisions under conservative scenarios and we hope that these estimates are conservative and will do better in future years. We usually do when the economy is growing Mayor. The reason I have a smile on my face is because you know I don't know if anyone has ever stood before a budget presentation and said we are basing this on liberal numbers. It's just funny it's just I mean anyway I just sorry one of those days. So here are the figures in terms of a preliminary projection for 17-18 and I've tried to break it down here between property tax sales tax and other revenues which is all the others again going forward on the property tax I've just projected that with the effective rate increases so you can see you know it's about a million dollars or a little bit less each year going forward from 17-18 and the sales tax projections and the others. So I show total revenues at about a hundred and nineteen million and the base expenditures which does include the reductions plus that police package about a hundred and seventeen point three that also includes the compensation packages increases and so what that leaves remaining at the effective rate would be about a million six sixty. So just to show the impact of that and I'll go over some of the other request in terms of supplemental packages. I've just built in that a million three of that would recur and go forward and about three hundred and sixty. Four thousand would be one time and not recur. Quick question on the sales tax. So this budget we budgeted thirty two point nine basically almost thirty three million . Current estimates are at about thirty five. Correct. But we're budgeting the three percent increase off of the original budgeted amount. Now I'm budgeting it off that thirty five point two but I'm back backing out those one time revenues from the two which is somewhere close to about a million dollars between the two of those one time revenues from the wind Co and then from projecting and what we've received so far from the convention and center expansion. What they've done is they 've they've under state law you can set up a sales tax account. So the sales tax for construction process is sour ced where that construction takes place and they've both done that. So all of their sales tax is being sourced in Denton and then they 're getting a rebate off of that. But that's kind of one time revenue. If you look at you know from the prior year we're up over four million what the estimate is for sixteen seventeen. So I've tried to back that out and then show the three percent growth. And I will point out I mentioned when you look at that other revenue account where you can see it seems to be staying pretty steady or flat throughout that period. We're transferring an additional six hundred and twenty two thousand each year of franchise fees. So reducing the franchise fee revenues in the general fund and increasing them in the street improvement fund. I know you see some change in fund balances and some deficits in future years. A majority of that deficit is that transfer. Yes. Councilmember Husserlund. Thank you Mayor. I'm not sure if everyone else already knows but what is the in a perfect world or Denton's perfect world if you will. What is the mixed property tax the sales tax. And if you had to if it was just up to you and you could just write it out it would be what. I don't know if there's a perfect mix kind of different communities have higher or lower levels of sales tax in terms of revenue stability. Denton's got a pretty good mix in terms of sales tax tends to be more cyclical when the economy goes down you can see drops in sales tax. So having sales tax of about you know a quarter of revenues helps reduce that. But I don't think there's a magic percentage. Some of the communities in the Metroplex are higher than us. Some are lower than us. It really just determines you know your retail activity amount of business activity in the community. I think most communities try to recruit sales tax payers and it's something that's positive in terms of bringing in additional revenue. That's not property tax which tends to be a little bit more sensitive. Sure. I mean I can give you historical in the Metroplex what percent of different communities they have in terms of their sales tax versus property tax. Well I guess more if I want to try to understand it for our community you know just kind of narrow it to that shutting everyone else out and understanding. Basically are we are we achieving potential or what what are or do we have goals to obtain. Right. So do we should we have you know just around. No it should it be 50 50 just so it matches our. I just don't know what to shoot for based on those numbers. So if I look at the past and kind of projected forward that's that's kind of one analysis. But I'd also like to understand if you were to give us a letter grade on this what would it be. I want to understand you know and I understand that conservatively that gives you pause. But I need I need to understand where we are and I need someone to tell us if we're on on part of it. Past fail you know I'm in class now and I know exactly what my grade is at all times before all tests especially you know so I need to understand that dynamic from someone. Chuck I can try to help by making a finance director very nervous. The roughly third third third this is pretty pretty solid balance for a city and it's actually I would I would add that the question that Councilman McGarry brought up earlier the return on investment from utilities even further stabilizes the property tax because that number is just not going to fluctuate that much. So typically the rating agencies will take a look at our budget from the amount of stability that's in the budget where they get a little concern is the elasticity of the sales tax for instance you know in a down economy that number starts going down it has the ability to either drive up property taxes or cut services. And so you would like to see kind of a mix ideally a mix like this no finance directors ever going to say that there 's enough property tax there because that's more stability. But right now when you're basically about a third of third of third that's that's as good as going to get for most places in fact that's that's pretty solid balance at this point and again those other revenues you've got some revenues in there that are very stable they don't move much . So it's not like private business where you know that could be highly elastic elasticity in government services is really not viewed as a positive thing by our rating agencies. So kind of coming up with a mix like this is what you're going to see a best practices is what you're going to see the bond rating companies looking at as well. Excellent. Thank you. Ready for the next slide. In terms of supplemental request that we've preliminarily received during the budget process and I'll highlight those first two the police patrol staff and the crime analyst or what we're proposing to fund now the third highlighted one is one that we believe is a is a priority of the council and that's a medic unit for station four. And you can see the cost of that the recurring cost is I think starting in beginning of January and the one time cost is mainly for an ambulance unit and then you can see there's some additional request from the police department some additional requests from the fire department traffic signal replacements and parking lot maintenance from prior years requested staff auditor and some other priorities. So you can see we don't have a shortage of request in terms of additional packages but just wanted to give you an idea of that. Casper. So glancing over the parks capital maintenance can you kind of give a better idea of what that includes and with the hot funds bill approved with that free up some of parks budget to to do this or or no it potentially could free up some really what they're looking at. Is the large items are lighting at ball fields. Some of their ponds and the required dredging over a long term of their ponds some of their fields which could be handled by that just kind of some of the large capital items even like parking lots and those type of things over time that they feel like they need to start looking at kind of annual capital funds. Funding really replacement funding no different than taking care of your streets or those kind of things over the long term and our park system is starting to get to the point I know like their lighting systems a lot of them were put in in the 1980s and those type of things so they're starting to get to the point where they think they need to bring up this ability to have some funding on an annual basis just to maintain the park system at their at the current status. Kind of over a 7 to 10 year period and I would add just to clarify a little bit other than those top 3 that are bolded there's there's really no prioritization of the rest we're just listing those and we're continuing to identify potential funding strategies for instance the traffic signal replacements we very well could be back into talk to the council about utilizing red light camera funds or something like that so we're investigating other ways of funding some of these through the various funds that we have. But there are no prioritization after those top 3. I hope that I misunderstood. What was just said a minute ago and it really wasn't said. It was just my misunderstanding because. It was clear to me that when we were talking with our community. About hot funds to go to enhance some of our athletic fields. For a tournament play that that would not. I want to emphasize that that it would not replace any of the current funding out of our budget for maintaining our athletic fields. Otherwise the hot funds were not eligible for them. I didn't mean it was maintaining she was asking about the capital funding and I was saying for those fields it could give a little higher level in terms of maintenance and capital replacement of those fields. But it doesn't because the hot funds are not supposed to supplant. Any of our local funding yeah, we're not doing any of this capital maintenance in the parks currently. This is kind of a new program that they're looking at apologize if there was some confusion. I think I misunderstood well and the bill that just passed and we'll get an update on it. I guess in an upcoming work session is for the enhancement upgrades to ball fields and there's some specific criteria. Right financial criteria that you have to track such as what additional revenues are you bringing in. So there's a whole paradigm of those funds. So my hunch is those funds aren't going to be used for you know unless it's an upgrade to a field that we are attracting more tournaments to Denton based upon that because we have to prove that up. And if we don't then we've got to refund the hot funds from the general fund that those monies that don't prove up. So yeah I understood I can share your same concern when I heard it but I knew that once we got down to the nuts and bolts of the legislation we wouldn't be able to. Now some of those capital improvements are upgrades and attract the formula may work out but it's pretty rigid formula. So I wouldn't I wouldn't count on those I guess is what I'm saying. Yeah. Yes. Mary protein. Is that next up. Yeah I guess so. Yeah. Thank you. The parking lot replacement and maintenance which parking lot are we referring to is that the police training facility parking lot. The one time that specifically in there is a part of it is that police training to make it. We had funds budgeted for one acre to make it larger and expand it to a two acre lot. There's also some additional replacements in terms of parking lots across the community really that we did and when we did the OCI study for streets they looked at parking lots and looked at what was necessary in terms of annual maintenance to keep up the parking lots. And there were some that needed replacement. So we're really looking at replacement. I know one of them is the parking lot by City Hall East that's being considered one of them's the denier recreation center parking lot and really just the parking lots across the city and they've tried to prioritize those in terms of what needs replacement and what can we do some preventive maintenance on. We did fifty thousand in preventive maintenance funds last year so this would increase it to a hundred thousand a year . I guess my question is really about that police training facility parking lot improvement because I thought that that was allocated already in a prior year's budget and I don't think it's actually been completed yet. That's correct. We had budgeted about four hundred thousand to replace the parking area that's there now but there's the potential to do a larger parking area beyond replacing what's just there now to go to the full two acres and have additional spot additional spaces capacity. So would that involve land acquisition or it's just something I think it's the two acres they would have now. The prior plan included green space if you remember it was involved with the community market and included green space . This would kind of remove that green space and turn it into parking. Okay thank you. One real quick question on this slide as it's compared to the slide where you showed the effective rate and then the new construction value. So if I'm not right on this just let me know. It seems like if you kept the effective rate the way it is new construction value was about one point four one point three one point four with some one time costs and expenses. So these top three that are bolded are those the ones that if we had the scenario if you go back to the slide that shows the whatever I'm talking about where is that. Is it this one. Yeah are you talking about this kind of what's available after the baseline about one point six. Because we've got some additional revenue that's not tied in with the effective rate which is the new construction which I believe you said was the revenue of about I forgot or did you say maybe you didn't say. Yeah it's it's it's built into this number here. This is about one point about one point eight one point seven. Now let me caveat a little bit of that is part of a three eighty rebate agreement for WENCO if you remember they received some money from the TURS and money from the general fund. So part of that is new revenue from WENCO. But when you look in the expenditures we've got a three eighty agreement payment to WENCO that offsets that. Sure. So some of that large increase is going to have a increased expenditure on the other side. So it's not kind of a net new revenue. So for this preliminary budget 2017 18 to play out as it looks there if we'll go back to that slide of the supplemental. Basically what I'm hearing is you've got those top three that you're able to do and maintain that scenario in the budget and anything else below would require something different. Am I wrong on that? The top two are included in the numbers that Chuck is showing you. The medic company would come out at one point three million dollars where you see the one point four recurring recurring. So that's where we are at this point in time is that would reduce that one point three million down to well six hundred fifty thousand. So it's built in there but it's still in that budget in that summary right here in that preliminary budget 2017 18 that medic unit is in that new recurring expenses. It could be. It's not yet. But if we included it in the base budget that number would become six fifty. Got you. OK. All right. That makes sense. OK. That's helpful. Yes. Go ahead. Are we talking about slide 14? You just went on to 15. Yeah I went on to 15. You want me to go back to 14. Please. I think that this is always a very important slide because we have to not only be thinking about the impact of our decisions on this year but we're still thinking when we 're thinking five years out we're thinking short term. And there's something that really jumps out at me in this projection. And that is fund balance because you see in year four and year five we drop below our 20 percent goal by year five we drop significantly below our 20 percent goal. And that seems to have some impacts I'm told in terms of actual cost to our taxpayers because generally when that fund starts going down that means that there's a potential for our bond rating to go down and our interest to go up which means that we get less bang for the buck on any of the capital funds that have been authorized by our citizens or citizens are paying more money for less. Thank you. Do we have I can't remember back to past budget presentations. I know that some of them have some dire scenarios in the out years that because things we tend to perform well we tend to over collect and underspend. Or by over collect I mean collect more than we anticipated to collect and we spend less than we anticipated spending. But should I why should I not be concerned that that you're you're proposing a budget and projections that take us fund balance down that low. Can I comment on that. Sure. If we look at and let's just look at this slide when you look at the amended budget of 2016 17 which is what we're in now we had we budgeted for ending fund balance of twenty seven six ninety five the projected if I'm correct is 30 million one forty nine. So inevitably this discussion comes up almost every year when we look at the out years if we were to go back let's take five years ago and we go back and look at the budget for 2000 what would that be eleven twelve and we forecasted out to five years for 2016 17 and see what we projected and see what the actuality was. And I'm not saying we should ignore it I'm just saying I don't I certainly want to look at that but I also want to look at in a historical context of because we have a lot of historical context with those. So it might be interesting to go back and see what was projected in the five year forecast for this year back then and see how close we were how often we were in that. And that's what I was suggesting that we might want to do but but it gives me pause in and if we continue the pattern of under projecting revenue and over projecting expenses it may correct that fund balance in the out years. That's what's happened in the past. But we ought to be aware of that and keep our eye closely on that because that's a pretty significant number in terms of the overall cost of doing business in the city. Sure. And if I if I could add to your I understand your concern. One of the things that I've stated since you brought me on board was that I was going to put together a budget that basically assumes no tax increase I did not want to put your back to the wall rather gate on that. And you know I wanted you to see what the cut you know because we're really we're really focusing as well on the more on the expense side putting ourselves for a very high level of scrutiny and justification for backfill and particularly management type positions. But you know so it really changed the look of today is it is I look move forward should account you know and I think the other thing to keep in mind is this is very preliminary projection of where we're going to be there's going to continue to be refinement of the revenues refinement of the expenses over the next 60 to 90 days which will change this picture most likely to the better. But I think the thing to keep in mind is should the council ultimately decide that there's things that you want funded there's recommendations for that need to be funded and you want to have a conversation on moving the you know putting another percent or two on the on the tax levy that basically eliminates your deficit near five the way that our budgets compound. My main point was not to start that and drive to a test I wanted to see what we could do within the existing base budget and let you have the policy discussion on what you want to do want one 2 or 3%. Change on the budget completely gives you a different look into in year 5 you probably have a that 3.4 number would probably turn into 1.8 or 2 million just with one small increase so. I just want to I want the budget to be a 0% flat line is so we'll continue to refine it in their like the council very much to have the policy discussion on where do you want to set it not that you've been forced to debate it from where I said it sure so it's just a different way of looking at it if I may follow up. I appreciate that I do think I think I heard you say that this current budget projection does not include medic unit for. That's correct it would it right with the mayor was asking me is is it included in the base and only the police five police officer positions where if I were to have included it in the base that new recurring expense number would be taken down to 650,000. Well I would ask that that the next time that we have a presentation that we include medic unit for okay as far as part of the base operation because the comment that it was our number one priority for next year I think. That was established last year okay and it may not be we have several new faces in council but but it's certainly my number one priority and it's definitely ours as well and the only reason that we move the police up is that I was asked. I just wanted to get moving on reality and resources right now but if the council's agreement we will make that change immediately we just have if you look at response time our response time for for the fire department is. In much more serious problem than our response time for the police department is this will help. The medic unit will help with that. Okay so question on the preliminary budget the base budget we're looking at we had 1.1 million dollars in sort of personnel savings of staffing we've reallocated or there's there's the direction to reallocate that 850,000 of it. For new police officers and vehicles and things such as that so it's about 300,000 is that 300,000 in this figure or it or was that taken out when you started your preliminary budget. It's not it's in that figure in other words I've I've reduced the expenditures and 1718 for those position elimin ations and just added police back in. Okay so that's that savings is reflected in the base expenditures for 1718. Okay all right so we've got 300 it's reflected in there does that means it's only allocated for or or it's I'll just have to look at my question was that 650,000 for medic for. Could half of that been part of that you know but I get it never mind so moving forward in the out years what are we projecting as far as on the property tax increase was it 4% 3% no it's about 2% it's really just the new growth which is running roughly about 2% a year. A couple of years it's under two and a couple of so you just project keeping it an effective rate throughout that in other words the base value assessments stay at zero or the effective rate of correct thank you thank you. I'm going to go over utility funds real quickly Dr. Banks is going to go over these a little bit more in detail but just to highlight there's no rate increase proposed for the upcoming year. Some of the ways that they've gotten there in terms of reducing the O&M budget from the prior year and leveled out their revenue funded capital in terms of that and let me give you a forecast here and this is what has gone to the pub they're scheduled to make recommendations on the budgets for the utilities by the 26th. So I'll come back to council in July and give a more detailed presentation but this is for the water utility that's going and you can see in terms of no rate increase here this is kind of the recommended scenario that may have some rate increases further out again these are conservative assumptions. And you can see the ROI and franchise fee there's their payments there to the general fund and to the street improvement fund for that and the other thing this revenue funded capital has kind of been leveled out to take away that variability there is some drawdowns estimated in use of reserves. And that's where we transferred from that one time savings from that revenue bond refunding and transferred that over to revenue funded capital. Okay I see another thing in the projection that gives me a concern which is 2020, 2021, 2022 those net income with the red numbers. And that's just a little bit if you look on that just kind of a small drawdown if you look here what we kind of look at is number of working days capital you can see because of that one time money we're almost to 200 above it we're looking at drawing that down but stabilizing it and that's really why we've projected potentially these rate increases to stabilize that in terms of keeping it within that target . Well a couple of questions that go along with that, because I know that that our water utility folks get. They're the only ones that seem to be unhappy when we have a rainy summer, because they're not selling water. And when they're not selling water. They're not selling a lot of fixed costs. So is 135 days sufficient reserve for if we have a couple of more wet summers, we, we've had a wet weekend. In terms of in terms of the target it's 120 to 180. Again, these projections going forward, tend to be a little conservative and overall if you look at our working capital it stayed pretty strong and the utilities and really, once we get past, you know, the second year projections are a little bit more difficult, I will say they've been conservative in terms of their revenue projections. If you remember with the water utility they've been kind of having decreases in per capita water usage. And so going forward in the out years they've started to lower those projections of per capita usage down so that's reflected within here. And then in the main mirror if I may on the previous slide. There were two terms. One I think I understand the other I 'm pretty sure I don't understand. And the second bullet point, Dr banks I'm sure will explain it when he does his presentation, but balancing CIP projects and cash flow schedules I think I've got that but I'd like for him to talk about that a little more when he does his presentation. I do not understand the fourth bullet point about reduced revenue funded capital variability by leveling over five years. I don't know what that means. So hopefully somebody can explain. Yeah, and really what I did there was we looked at the revenue funded capital that we were going to need over the five year period. Historically they've looked each year at which projects they think they'll do and take the proportional amount of revenue funded capital so it went up and down somewhat significantly sometimes so what we did was we just took the five year program and leveled out the amount of revenue funded capital so if you can see this number here, it stays level versus going up and down in terms of significantly up and down. So, in some years you're just accruing some of that money. Okay, thanks. In terms of the wastewater utility fund. There's no increase proposed for 1718. I did want to highlight one thing they've continued to meet their EPA administrative order requirements. A few years back, the EPA rescinded what could have been a consent decree which really would have required an enormous amount of capital expenditures to reduce potential flows from the wastewater system, and they're estimating that that probably reduced our capital program over the long term by about $100 million so it's, it's very important they continue to meet those order requirements through their maintenance program. They've had a couple FTE eliminations and reduced some funding from their own in budget and done the same thing in terms of revenue funded capital. So here is their projection in terms of revenues and expenses. And I do want to highlight one thing in terms of the drawdown in 18. They received about 4.4 million from that utility revenue refunding, and they're only projecting to transfer about 3. 3 this year so we're really kind of transferring the rest of that over the next couple of years to revenue funded capital. So they're proposing no increase the first couple of years, and then increases in the out years again to kind of maintain their working capital within their reserve targets . In terms of solid waste and recycling, they have proposed no rate increase for the upcoming year. You can see kind of some of the major projects that they've been working on. One of the things they did was reduce the amount of debt issuance in the current year in order to balance the budget over the long term. They also transitioned the current construction crew to mining operations in order to not add more FTEs. In terms of their revenues and expenses, here's their five year look. And in terms of future rate increases, you can see they're really zero all the way out and potentially a small rate increase here. Their working capital target is 52 to 66. You can see they were well above that at the beginning of this fiscal year. So they're projecting to stay within that. Just so the Council's aware, we do have a dedicated budget page on our website under open government and transparency. There's an idea submission form. We post all the presentations, proposed budget, budgetary agenda items, and there was a social media push to get that out at the beginning of putting that page up. Just wanted to let you know what's coming in terms of beginning today with Dr. Banks through July at each scheduled Council meeting, we're proposing to go over different departments and funds. And the areas kind of to be covered within those presentations, just kind of structure and staffing goals and accomplishments, performance measures, cost containment and process improvements. And budgetary dates, what's coming, I mentioned the PUB is scheduled to consider recommending budgets on June 26th. I mentioned the departmental presentations, we get the final certified value from the appraisal district end of July. Excuse me. We've scheduled August 3rd for kind of the budget workshop. That's a only topic on that day, a special called meeting. Public hearings in order to meet necessary state requirements and budget adoption is planned for September 19th. We will be every meeting from the 3rd through September 19 th have a work session item to discuss the budget. We'll be sick of talking about the budget by the end of September. Good. Any questions on this portion of this presentation? Yes, Councilmember Waskne. I just want to say thank you to our new city manager for this beginning of a different mindset in how to approach the budget than we've seen in the past. And in a nutshell for our citizens who are listening, property taxes up, sales taxes up, I'm so happy to see no utility rate increases this year for our citizens. And happy to see that if we're saving in one area because I read that our population is growing, 133,000 people now, city of Denton. And when that happens, you do have an increased need for fire and police. And those two departments have to add people and services because our population is growing. But again, a shout out to staff and a shout out to Mr. Heil man. Appreciate you. Thank you. Yes, Councilmember Pro Tem. Going back to the ROI policy discussion, I know we need some informal reports before we can really get into that. But I noticed that PUB is having their budget presentation on the 26th. So if we can kind of be cognizant of their schedule, because I would hate to have the ROI discussion fall so close to their meeting that they can't have an effective meeting. Yeah, and I want to echo those sentiments from Council member Waskne. You know, last year at our retreat and also during budget meetings, we wanted a different process. We wanted a process that was a little bit more -- I'm going to say transparent. That might not be the right word. But started earlier and sort of really allowed Council to provide a little bit more input from a policy perspective in that. And so I think we're doing that. And I really do appreciate that. However, this budget ends up at the end of the day, I think will be largely in part because of the new process that we 've implemented. And I don't think any of us will feel like that we've not had the opportunity, nor the citizens had an opportunity to weigh in on what the budget looks like and how we expend our money. Albeit there may be differences of opinion. But I do appreciate the new process that allows us some time to really have a better and more clear understanding of what is happening with the budget. And also to provide us the opportunity to create priorities and to fund those things above the base budget and those new revenues. And that will take -- be accountable for -- this Council will be accountable for if there's any additional revenues needing to be raised through taxes based upon the priorities set by the Council on some of the expenditures. So thank you so much for that new process. And so we've got, I guess, another -- it's Dr. Banks, is that right? Yes, sir. Anybody need to take a break? Just take a break if you need to. We're going to learn all about mosquitoes today? No, no, no mosquitoes. Great. Not a word. From mosquito presentation to budget presentations, I would ask you which one seems to be the easier, but you don't have to answer that question. Mosquitoes are much easier. Much easier. Well, good afternoon, everyone. Appreciate the opportunity to be here. We've got four budget presentations to give today. So I'll try to get through these as quickly as I can. Some of -- there's going to be a little bit of overlap with some of the presentation that Chuck gave earlier. So I'll try to kind of hit the high points on those. I know it's a little bit of a tough sell right after lunch to go through four individual departmental budget presentations. So I'll try to do my best. So starting out with the water fund, and just want to give a breakdown of the FTEs by functional area. You can kind of see how those are divided out between administration, production, distribution, metering, the laboratory, utility administration, and customer service. A couple of nuances about this slide. Customer service is actually housed within the water department, but it's a fund that receives transfers from all of the other utilities and some from general fund for the use of that particular service. So in somewhat of the same vein, the laboratory is actually a part of environmental services. And you'll see environmental services is our last presentation. And basically it is a division that is within funds. It's spread over a multitude of funds, and I'll try to walk through that as we go through that presentation. So Chuck has already talked about the FTE reductions, and you can see those show up in the 17-18 proposed budget on the far right column. Just a general idea of what the water department looks like from an organizational standpoint. So there is a director of water, Tim Fisher. There is a production superintendent, Randy Markham. Randy is over basically all the aspects of the plant production. I'm sorry, Dr. Michael, I have a real quick question. Just a clarification for our citizens who were watching. FTE stands for full-time employee. Right, thank you. You know, it was a phrase when I was new on council, I didn 't know what that meant. I soon learned what it cost. Right. So just for our people at home, full-time employee. Thank you. Thank you. Water production manager, Randy Markham, basically over the water plants. Water distribution manager, Kent Conkle, who is over the distribution network. We've got water metering manager, Dan Kerkel, who is over the actual metering section of the system. And then customer service, as I mentioned, is a separate division. It's housed underneath water in terms of funding, but it has a different reporting structure. And so Galen Gillum is over the customer services component . So real quickly, goals and accomplishment. In 1617, we completed our condition assessment for the 30- inch raw water transmission pipeline from Lake Louisville to the treatment plant. This line conveys water. There's two systems, a 30-inch and a 27. They convey water from the intake structure on Lake Louis ville that's near the I-35 bridge all the way to the Spencer Water Plant on Spencer Road. We flow tested the Louisville plant. We've recently undergone some plant upgrades to verify performance after that rehabilitation and process upgrade. And rehabilitated the ozone generators at Ray Roberts' plant just to basically improve the reliability of those systems and their overall performance. Our upcoming goals from '17 and '18 are to complete the design for the phase two of the Louisville plant upgrades. To go ahead and improve our zebra muscle control for Louis ville and Ray Roberts' raw water transmission systems. We've already undergone an assessment and a design, and now we're in the implementation phase for some of those control strategies. Want to install our communication systems to improve our security for unmanned plant facilities. Basically creating some redundancies there in our SCADA system. So if we have one system go down, we'll have another system in place that is tied in somewhat to item four as well. The SCADA system is basically the way in which the plant operators can communicate two ways with all the plant operations in the field and make changes. Let's see here. Supply line improvements for the southwest booster pump station. That area of the city is growing rapidly and water demands are high in that area. And so we need to get the supply lines increased for that particular section of the system. And then, of course, complete all our water line repl acements ahead of the Hickory Creek -- I'm sorry, Hickory Street reconstruction project that's going on right now. As with many of these projects, if we have water and wastewater infrastructure within the streets that are close to their design lives, we try to go in there and replace those systems to ensure that that street is torn up one time and that we don't have to go in and do anything to a newly revised street. Question on that. Yes. On that last goal number six. So this is a goal. So maybe this is just me reading this too literally. They're not going to do the Hickory Street reconstruction of the pavement until you guys get finished. Is that my understanding? Yes, generally that's correct. Yes. Yes, Councilmember Huzbeth. What is the process in that regard to manage -- what is that communication -- just leave it at that. What is that communication process to meet those checks and balances to see if we're all on the same page? There is a constant communication between the streets department, water, wastewater departments, and we also have a number of outside entities that have infrastructure in that area as well that we coordinate with . We have routine meetings. We have schedule assessments. We have a group that works together to basically make sure that everybody is on the same page and moving at the appropriate pace so that we can get out ahead of that street reconstruction, but also time it so that it's happening as efficiently as it possibly can. Thank you. Sure. In terms of our performance measures, we have looked at new water meter installations for a number of years now and then water meter replacements. The new water meter installations give us a sense of what kind of growth is occurring in the city and what kind of water demands we might expect. The water meter replacements, we've done analyses that suggest our water meters on average are getting to the point of economically being ready to be replaced at around a 13-year period. That's the point by which in the design life the cost of putting a new meter in is more cost effective than letting an old meter stay there that will have inaccuracies in the building. So these meters wear out over time and we have them on a rotational schedule to replace them. Yes, Council Member Briggs. About water meters, I know I think it was last year there was a big hoo-ha in Dallas and in San Antonio about water meters and the way that they were read and they were estimated. Would these still be actually read by an individual? Yes, our water meters right now are read by an individual. Okay. And they will remain? We have not gone to AMI technologies or anything along those lines so the new meters that we're putting in are also going to be individual read meters. Thanks. Council Member Gregory. Thank you. Yeah, I just love the word hoo-ha. I think that we ought to make a point of using that once every meeting. I think I love that. I was looking at the quarterly report after the second quarterly report was done. And last year in our quarterly reports we were seeing counts of water meters replaced and work orders completed and things like that. And that's not showing up in our new quarterly report. And I was -- I thought to go back and look because I was looking at the proposed performance measures and I'm not seeing any suggestions for numbers. So when we talk about unbilled water volume we're going to measure that. But I'm curious as to how main breaks per hundred miles last year it was -- we were looking at main replacements and we were looking at work orders completed. Right. So first of all, are those metrics going to continue to be no longer reported to us? How are we going to be able to monitor that? Right. I think there was -- well, do you want to -- Councilmember Gregory, we went through a process over the last year or two to look at all the performance measures and change those. And we tried to tie them to the strategic outcomes that were included in the strategic plan. And some of those are better than others. We're still trying to improve those as best we can. We're going through a process with the new city manager to evaluate all the performance measures. And the ones that you'll be seeing in these departmental presentations are the ones that we look at proposing to you to include in that report going forward. But certainly if there's some that are already there that you certainly want to have us look at and continue to report. And we can do that. Well, and it's not that I was particularly needing to know how many water hydrants got repainted. That wasn't a high priority for me. Yet that was in the old report. And in the old report it was the number of work orders completed. Well, that doesn't tell you much unless you know how many work orders were put in. So -- and it -- but I am curious about things like the amount of time it takes to get a work order completed. Okay. And even maybe more appropriately is I suspect that we have some metrics for just like auto mechanics know that in order to replace a muffler, it probably takes this much time. So you get billed for that much time whether the mechanic did it quicker or they did it slower. So we probably know in a lot of cases what a repair should take. Yes, sir. Are we hitting those metrics of getting repairs done in a timely fashion? And that's probably a more important metric than how many work orders are getting completed. But to simply use -- since we are -- since we're providing utility services, we probably need to keep metrics in our reports on how we're doing on that. So I'd just bring that up now. We'll certainly take a look at that and try to bring something more in line with some of those comments of the efficiency of the activity. Was it how many were completed on time and so forth? What percentage were completed? We can do that. Do we have any more questions on this before I move on? Okay. Chuck has already gone through a little bit of this, but in terms of departmental efforts for cost containment, we had an elimination of some FTEs that represented about $47,850. Budgeted salary savings of about 175 due to turnover and vacancies. Our O&M budget from '17 to '18 was reduced by about $615, 000. As Chuck mentioned, our debt service efficiency was accomplished by trying to balance in time our capital improvement programs and our cash flow schedules for upcoming projects. We reduced our revenue funded capital variability using a similar strategy, which we've termed leveling over the five -year period. And summing all of these together represents about a 2.5% rate increase collectively in terms of the amount of money saved. Councilmember Briggs? I'm surprised I haven't heard the word conservation yet with the water presentation. Is this where conservation under this item would come into play? Would that help? In terms of cost containment? No, not really. I mean, we do have a conservation program in place. It is a freestanding program that we implement every year. It basically takes a look at various responses due to where route and drought stage is. And then we also have the water auditing program that we do that helps out. We have dealt with conservation from the standpoint of upgrading some of our building requirements for things like fixtures and the type of sprinklers that you would put in where they're required now to have rain sensors. So I mean, we do those types of issues, but it's not really something that has a direct bearing on a cost containment, at least from a budgetary sense. It's more savings for the citizen? Yes, exactly. The interesting part about that is, I mean, as I've read different articles, you can cut your water usage. In other words, we sell less water. Sometimes your costs, the rates to the citizens, they either don't see a savings or they see an increase because you have so many fixed costs that still have to be paid, whether you've got, what, 100 gallons going through that pipe or 50 gallons going through that pipe. It's a really odd thing, honestly. So yeah, conservation is more just from an environmental perspective. From a cost perspective, it's helpful, but it doesn't necessarily mean you're going to see that proportionally the same reduction in costs. Correct. Yep. So in terms of process improvements, we've improved the meter reading, billing, and work order process. We basically assembled a team as a part of a lean project to look at water metering, electric metering, and water utility customer service. And this was really about reducing redundancies and reducing errors in the process. There was a lot of work and rework that were caused just by the way the process workflow went among all these entities. And so we were able to improve that through that lean event . We're going to continue to evaluate capital project coordination and our implementation process. That's a continual improvement issue. Complete our system distribution master plan and implement those recommendations as being done by an outside consultant right now. Improve our work order and data reliability for City Works. City Works is our program whereby we track all of our costs and we can come up with that cost of muffler replacement type calculations. So we're always working to try to improve our data reliability and make sure we've got good costs associated with that system. And then always room to improve on our asset management program. We've got a huge number of very expensive items in the ground or around the city that are used to basically move water around through our system and treat water. So anything and everything that we can do to improve our asset management program, we're just going to continue down that pathway. Real quickly, in terms of the budgets, just a real high pass view. I wanted to give you a sense of kind of where the individual funds go in terms of the type of expense. So you can see, for example, what we are spending on purchase power, which is all the electricity needed to move this water around, treat this water. Our personal services, material and supply, maintenance, and so on. You can see the difference in terms of the budget in '16-' 17 to our proposed and some of those cost reductions that we 've done. A lot of that is based on chemicals, small tools, instrumentation, materials and equipment. Basically just a lot of scrubbing of the budget to try to reduce those costs down. Some major capital improvement plan projects that are coming up. Our Lake Louisville water treatment plant upgrade, the phase two of that particular project is upcoming, very large project, about $10 million. A lot of that has to do with basically our switch gear system and our electrical system that runs our large pumps that move the water from that system out into the distribution side. Those are very old and in need of replacement and that's a very expensive item, so we've got that targeted. The Allred to John Payne Road transmission line, also very large project at $6 million. The Lake Louisville raw water transmission line, basically that's that 30 inch line that was mentioned earlier. We've done a condition assessment on that line, identified areas that need to be repaired or replaced and right now we 're sitting at about $4 million budget on that project. The implementation of the zebra mussel control strategies for Lake Ray Roberts. And then we've got the Highway 380 to I-35 transmission line at $1.5 million and our relocations associated with McKinney Street utility or McKinney Street widening that requires utilities to be relocated. Are there any federal or state funds that we could leverage for the zebra mussel control? I'm not aware of any. Tim is saying that there isn't any either, so that's a very specialized issue. I have a feeling we're already doing assessments on Louis ville. Right now they've shown up in Ray Roberts to the extent that they're actually showing up in plant processes. Louisville is not as bad, but the anticipation because the lakes are interconnected is it's just a matter of time. But unfortunately I don't believe there are any federal programs, at least none that I'm aware of. Thank you, Mayor. Mr. City Manager, I have a request. Yes, sir. If we could, on these type projects, one, I'm going to ask if we're using vendors, similar questions, local vendors, that sort of thing, just as a running question. Can we somehow, if you don't already, start capturing images, photos? So as the layperson says, what does $10 million buy you? And it's not like I can drive by and see it, assuming it's underground, that sort of thing. While we're in there, is there a process we can start where we take pictures before, after, that sort of thing, so that we can kind of archive those things and kind of what does that look like? So you can see, visualize from this size pipe to the next or whatever that is, it kind of helps add value to our understanding, different understanding, if you will. Absolutely. And you might have seen in the last weekly update that we provided you that we're starting to take our CIP program, be able to put it on the website like that to give status updates, project assignments, maps, that sort of thing. So we can certainly incorporate that type of data in these projects as well. Yeah, because I can also see that something I could tap into, so neighborhood meetings, going to elementary schools , that sort of thing. They kind of, if we have kids that are interested in that field, here's what that looks like, this sort of thing. Sure. Thank you. That is the presentation for the water department. I didn't have this included in your backup, but I've got to put it out there just because I think it's neat. We produce about 6.3 billion gallons of water. We have two plants. Our plant capacity right now with those two plants combined is almost 49 million gallons per day. We've got around 34,000 people connected to the system, and we've got 618 miles of pipe in the ground. So, late end to end, we get from here to the other side of Kansas City with just the pipes that we have in the ground. So, I'd be happy to answer any questions regarding the water department. I do have a CIP map. They're just kind of a little bit difficult to see, but if you have specific questions on any of our CIP, I can at least show you kind of locationally where they are. Dr. Banks, I think Councilwoman Briggs had a question. Yes, I'm sorry. This isn't really budget related, but do you still do field trips at the water department for schools for educational purposes? Yes, we have a tendency to have more of those on the wastewater side just because the kids like the wastewater side more. I've attended one of those. Yes, it's very interesting. But yes, we continue to do those on a very regular basis. Okay. Thank you. Yep. I don't think there's any other questions. Okay. Thank you. We will move on to the wastewater. So, try to keep with the same format on this budget presentation, starting with the full-time equivalents for our employees by functional areas. So, you can see kind of generally where we were at in '16-' 17 budget compared to where we ended up in our '17-'18 proposed. Chuck has already talked about this. We had a 1.5 FTE reduction on collection, and then we basically had a transfer on the drainage side, 16 1/2 to 15 1/2. That's representative of our streets superintendent moving out of the drainage and streets department into another department. Very quickly, just to show you how the wastewater department is arranged, the director of wastewater is P.S. Aurora, water reclamation superintendent Rusty Willard, who is responsible for the plants, wastewater collection manager Drew Huffman, who is responsible for the collection network and the infield capital projects, and then the beneficial reuse program, which is a program whereby we use some of our treated effluent water for the purposes of irrigation and other kind of industrial uses, and then also combine our biosolids from our wastewater treatment plant operation with yard waste in the city of Denton to create a compost project. So, we have 100% of our biological material in terms of the sludge coming out of the wastewater treatment plant ultimately being converted into a class A biosolid that can be sold and used by the public. I wanted to also point out that the Galen Gillum capital projects director also is over the drainage department. Drainage is another one of those departments that is housed within wastewater, but actually has a different reporting structure. So, in terms of accomplishments for 16/17, we completed design for the Hickory Creek and West Peak Flow detention facilities. The Hickory Creek facility is basically a design to allow us during times of high flow rates, which oftentimes happen associated with storm events, to divert and temporarily store some of that waste stream and then feed it back into the system over time once that event has passed. The same is true to some extent of the West Peak Flow detention facility. It's located on plant property, but it basically allows us to take incoming wastewater in periods of high flow, divert it over to a temporary storage basin, and then feed that back into the plant after that event has passed. We awarded the Pecan Creek Interceptor Phase 4 project, which is a very large interceptor for our system, about a $ 1.2 million capital program. We got a phosphorus limit from the TCEQ to reduce our phosphorus down to half a milligram per liter, and we're able to meet that through the implementation of a lot of research and then some plant improvements. We continue to hold our in-house construction and prevent ative maintenance costs lower than contracted costs and are doing regular benchmarking to ensure that remains the case. The compost operation, which is part of beneficial reuse, which I mentioned a little bit earlier, received the 2017 Ron Seiger Award from the Water Environment Association of Texas, and then we reduced our sanitary sewer overflow volumes during the '16-'17 year, even though that year was a relatively wet year. Anytime we have excessive rainfall in a given year because of infiltration, we have a tendency to see our overflow volumes increase, but through maintenance and through system capacity, we've been able to keep those continually on a downward trend. Our goals for '17-'18 is to begin the actual construction of that Hickory Creek and West Peak Flow detention facility , meet all of our EPA administrative order requirements, which gets back to that idea of system capacity and system maintenance to ensure that we do not have overflows, continue to have our in-house construction and preventative maintenance costs lower than outside contracted costs, and then we have a completion of the update of the wastewater master plan model as well. Again, on those goals, if we could look at, in our quarterly report, seeing restoration of some of those metrics, especially when it comes to reducing sanitary sewer over flows and some of the issues that are related to that flow, whether it's repairs or grease trap cleanouts. And some of those performance measures along that line, we have our operation and maintenance cost per account, and then our operation and maintenance cost per million gallons of wastewater treated. Some of the proposed performance measures that we're going to be looking at is our compost sales revenue plus our cost avoidance. Because we don't have to landfill our sludge and don't have to dispose of our yard waste in our landfill, we have some cost avoidance there. So what we're doing is we're doing a compost sales revenue, adding that cost avoidance component into it, and comparing that to the cost of operation to make sure that that's a net positive for the ratepayers. Sanitary sewer overflows want to maintain less than three per 100 miles of sewer main. We reached that goal in 2016. We want to stay at that goal and continue to reduce that. Our cost comparisons between our in-house and contracted services for the things we're doing to help with the reduction of those sanitary sewer overflows, like our line cleaning, our closed circuit television, and overall construction of our infrastructure. We want to always compare that against outside contracted services to make sure that we're cost effective. And we want to maintain our sewer main chokes, which are effectively a clog, at less than one per 1,000 customers. Dr. Banks, on the sanitary sewer overflow, do you all have a volume goal or is it just the numerical goal? We have both. We have a volume goal and a numerical goal. To give you a sense, in 2016, we had 13,655 gallons, total 2.9 overflows per 100 miles of main. I can compare that back to, for example, in 2014, when we had 113,655 gallons of overflow in 5.1 per 100 miles of main. So we're tracking both of those measures. Great. Thank you. Sure. Yes, Councilmember Wasney. And just to, again, for the people who are watching, the closed circuit television, when you see it fall under Wast ewater Department, it's a fascinating process. And in the old days, they knew they had a leak. They had to dig up an entire street. They had to dig up an entire yard to try to find that leak. Now they drop a closed circuit television camera down there and it crawls down the pipe and they can find exactly where that leak is. So they know exactly where to penetrate from the top down to get down to that leak and be precise in the location. And there was a video on that that was just really, really fascinating. And, you know, technology has just changed the world when it comes to fixing sewer lines. But anyway, that's what that closed circuit television has to do with wastewater. Thank you. Right. I appreciate you pointing that out. And it is a fascinating thing to see. The technology is there not only to go in and assess the pipe, but through some of the work that the PS and his folks have done, they can literally carry a repair device into that pipe and expand that repair device in place, depending on the pipe characteristics and the pipe size, actually do a repair without ever having to open it up at all. So it's just amazing how that process has changed over time . So it's great because it's cost effective, but it's also great because you don't have to tear anything up to get to it and inconvenience people. You can literally do it right there on the side in the right of way and just run your camera down and make the repair. So very interesting technologies. Councilmember Ryan. Thank you, Mayor. On the sewer overflows, we're talking strictly about from the tap into our system on there's no way of any way of tracking anything that happens from the from the street side cling out back towards the building. Yeah, that's that's generally correct. It's only for for our system that is that is, I guess, for lack of a better word, owned or in control of the city of Denton. If you have a system whereby the the the clean out kind of makes the demarcation between the private and the public side. If there's something that's going on past that point, this resulting in a release, unless we get a report of it, we're not going to to know about it. And then there's in terms of estimating that volume, it would be difficult because we wouldn't know exactly how long it had been going. Okay, because I know where I used to live that the houses on the other side of the street were lower than the street level. Right in the first place, we know that there was a blockage in the line. Right. They're cleaning out. Right. That wouldn't be putting in that calculation. That's correct. Yes. So in terms of cost, can stay containment strategies just real quickly, we've eliminated some FTEs as was mentioned earlier. There was a reorganization within our engineering tech department and administration that saved about forty thousand budgeted salary savings of about one hundred twenty thousand from turnover and vacancies. And then a reduction of twenty seventeen eighteen. O and M of about two hundred and fifty five thousand dollars. Again, we've taken a look at our debt service and our revenue funded capital and tried to balance those out kind of balancing that cash flow with the timing of the of the projects themselves. These all these combined represent about a two point four percent rate increase in terms of overall cost. So the the other thing that I wanted to point out is that because of the aggressiveness of our flushing program and the aggressiveness of our own and the asset management program that is in place, we basically were able to facilitate the rescinding of an EPA consent decree. And that saved us well over a hundred million dollars in terms of our studies, design and construction that that consent decree had contemplated. So I think it's important to point that out because that's a it's a very good program and it was a good investment on the part of the city to to do that real quickly in terms of completed projects. We want to we continue to refine our condition assessment and life cycle assumption for our asset management program. That's going to be just an ongoing thing. We did have a lean program where we looked at improving consistency among departments by streamlining the construction plan and information flow so that the idea here was that basically our red line comments from all reviewers go to our G. I. S. Group, our design group and our operations group to to be examined, reviewed and then design uses that information once finalized actually complete the as bills in conjunction with our geographic information system department. So just a way of making sure that the information flow is correct so that we get the most efficient use of reviewer time and the best information in terms of our as built in terms of the. In terms of future projects, we want to take a look at doing a criticality ranking for the plant and lift station equipment. Just a an assessment of what the most critical assets are and then follow that with an equipment reliability analysis so that we can kind of combine those two and see what we need to to look at with regards to to replacement. I'm sorry. That's my regarding that. Have we been doing those kinds of assessments. We have been doing those kinds of assessments, but not in a systematic regimented way like this one is contemplated. The reason I ask is because we had the emergency expenditure at the wastewater treatment plant. Correct. And I'm wondering, had we been more systematic, would we have caught that earlier. That's a hard question to answer. I I could speculate and and say maybe. But it's a machine and you don't always know what's going on. Yeah, yeah, yeah. I mean, it's it's one of those situations where you get in there and start to to look at the system and you find out that the old pumps that you knew had pretty significant amount of where had more where than you thought. And you're exhibiting some symptoms of potential failure. And so I would I would say generally a system like this, if we've got a more regimented inspection program that's more systematic in nature, it should be able to to identify issues like that earlier in the process. If I may go on, does that also include when you're doing that kind of an inspection and review, does it include the general life expectancy of the different pieces of equipment. It does. But general life expectancy is a pretty tricky thing to deal with. You can rebuild. You can you can get more life out of an asset. You can have a failure that occurs well before the expected lifespan. So we have a general programmed average expected life for most of our big assets. But that's I consider that more of a guideline. It's not going to take the place of a good on site inspection program. Thanks. Sure. Real quickly, we want to also create a workflow charts for all of our critical plant activities and again improve our worker to data reliability from City Works City Works is our program that is used to track our costs and make sure that we're being efficient with our resources. And then asset management programs are always something that you want to continuously approve and that improve and that's one of those situations where you have a combination of expected lifespan of a given asset. But also coupling that with what you observe in the field, what you what you see through inspection. Real quickly in terms of our expenditures, again, this is set up to just so you can see major categories that occur and effectively you can see the difference between our 16 17 budget as proposed compared to our 17 or 16 17 budget as adopted compared to our 17 18 as as proposed and see that that decrease that occurs. So we did have a little bit of an uptick just based on our historical in terms of our our purchase power so you can see that on the on the first line. It just we use a lot of energy moving materials around treating water. Generally speaking, the transfer to capital projects is probably the biggest difference that you're going to see in this budget and that gets back to this idea of normalizing and trying to program so that our our transfer to capital is a little bit more even. So. Couple of major projects that we've got coming on in terms of capital improvement plans is the Cooper Creek intercept or at two point seven million dollars. We've got our dry fork Hickory Creek tributary interceptor project coming on at one point five. I have details on on all of these if you were if you're interested in on the Cooper Creek interceptor to and then our Hickory Creek lift station upgrade. These are all major increases in terms of upsizing for the interceptors and then the Hickory Creek lift station upgrade is going to be the installation of a submersible pump lift station at the Hickory Creek lift station on old Alton question. So Councilmember wasn't he didn't ask this one, but an interpretation into English. Nobody knows what interceptor means except a few of the people in this room. Right. Right. It's a big sewer line. Right. Yeah. Yeah. Exactly. For example, Cooper Creek interceptor one is replacing thirty four hundred feet of a twenty four inch sewer with a thirty inch line that runs from loop to the Cooper Creek lift station on Mayhill. But there's a reason that you must call it interceptor rather than sanitary sewer line. Yes, there's there are collectors and there are intercept ors. It's based on kind of what the the size categories are. So the the interceptors of the big stuff. So that's that. You may continue. Okay. Yeah. I set that up. No, no, no comment. It's too easy. I had to talk with him. That's that's all I had for wastewater. I had a similar summary slide. Gallons of effluent treated is about six point one billion on a on a annual basis. We have one plant at Pecan Creek. We have a small plant, though, at Robeson Ranch. That's about a point three seven five million gallon per day. The plant capacity right now sits at forty six million gallons per day. We have twenty eight lift stations, which are basically stations that take the incoming waste from an interceptor and lift it up to a so the gravity can convey it down to the to the system treatment system. Thirty two thousand and seventy seven connections and we have five hundred and twenty one miles of pipe. Real quick question on the plant capacity. What does that work out in terms of what we're currently treating? I mean, is it when you say forty six million gallons a day, is it just as easy as that multiplying that times three hundred sixty five? And that's what we can treat on a yearly basis. No, we have we have that's the maximum plant capacity. We have a tendency to run about fifteen million gallons per day on average in terms of treated volume. So we're we're well within. Yes. Yes. We got a lot of room, a lot of space. That's correct. Keep keep in mind that that number goes up significantly when we have big storm events. And so that capacity is important to be able to accommodate it from inflow. Yes, Councilman. What what connection do we have to the Robinson Ranch plant with regard to our budget? Is there any connection there? Yes. It's our plant and we provide all the wastewater services for it. OK, I thought they the property owner there, they don't manage it. No, they're in. No, sir. OK, that's that's our plan. OK, very good. Thank you. Any other questions on the on the wastewater? Any questions? Two down, two to go. Two down, two to go. Mosquitoes. Yeah, not yet. OK, solid waste and recycling. Very similar set up here in terms of FTEs by functional area. And so you'll see some some changes that have gone on in the last couple of years. For example, you can see a pretty significant uptick in the diversion process mining. That's a new initiative out there to actually go into the old cells and mine the material out for the purposes of recycling and also being able to to reduce our environmental liability and potential for contamination by going into those old cells, taking the material out through mining and then putting a modern liner in place to add some other more modern design elements for for these individual cells. I believe Councilmember Briggs has a question. Yes. So the thing that jumps out at me here is the public outreach decreasing from nine to four eventually. Can you explain that? That's pretty significant. Yes. Lost there to the public. Yes, I had dreaded the people asking me to explain the FTEs because there's a lot of gyrations here between the individuals. I'll do my best to try to tell you kind of how everybody landed on this. And I'm hoping Tina and Cassie can bail me out on this if I if I take a missed step. So on on the administration, we basically took in our special project manager and and our municipal solid waste facility manager moving from five to seven. On the residential side, we basically moved a special project manager to admin on the commercial and landfill side and field support and diversion mining. There's a lot of movement between all of those individuals. And so what we what you'll see without going into detail on that is basically we're moving people back and forth between landfill to diversion process mining. I can go into the to the detail. Essentially, we moved a facility manager to admin. As I mentioned earlier, field service support became its own division at six at five FTEs moved in there. We took the building material conversion, the process mining conversion. Seven FTEs were moved under the mining and BMR component here. And then we took in the home chemical collection division, which was a total of three FTEs. So in terms of the the public outreach, three of those individuals on the public outreach were actually in the home chemical collection division and they were moved to landfill. So that's what you're seeing in terms of that reduction. And I apologize for having to walk all the way through that to get to that point. But I wanted you to know that it's there's a lot of things that have been moved around through it. And so that's what the the change was in terms of going seven to four. OK, thank you. I just wanted to make sure that our sustainable schools and sure. And the Clear Creek and all of those things weren't affected by that number. So that's good to hear. Thank you. OK, that's my Gregory. Thanks. Well, I had the same question because I was concerned with what the public outreach folks are doing. So those four FTEs go over then again what they are doing now. Yeah, those it's three FTEs and they were the the public outreach group included the home chemical collection staff out at the landfill. And so the home chemical collection staff are doing the same job that they were doing before, which is basically running the reuse store, facilitating the collection of those materials from individual residences when called, et cetera. They're doing the same thing. They're just housed now in a different area. So we have the same personnel. It's just they're in different places. So there's no loss of function. That's another words, whatever the public outreach used to be the function under there. You might have moved the function somewhere else, but the function is still being still the same. Correct. Well, and to follow up, the reason I'm asking is because we have some goals in terms of percentage of waste being di verted from the landfill. I suppose that most of that is recycling, but some of it could be yard waste. Yes. I mean, all of that is that's just lumped under material diversion. Well, my concern is I read in the report our half year summary that in 2016 that we had added 38 multifamily residential customers for recycling containers. Right. But I'm not seeing any particular uptick in recycling. And my guess is that just because you add a container doesn 't mean that people are going to use it unless there's some type of educational outreach. Right. Tina may be able to bail me out on this, but I'll take a take a shot at that. In terms of the multifamily adding that 38 accounts would basically move them from a 28 to 36 percent in terms of their recycling percentage as estimated. So that is an uptick of a little bit, but it's not going to be easily seen within the overall recycling within the city . Well, we've been missing our 40 percent target for residential recycling anyway. That's correct. And I think that that and maybe that's OK. What what might be helpful is to come back and do a review of what the cost avoidance is for for redirecting material out of the landfill. And are we by by by not putting more investment into public outreach on recycling and material diversion? Are we are we ending up going to be costing ourselves a lot more money in the long run by by using up our landfill that much sooner? So if you could do a little research on that. But my understanding is that what what what you're what I thought I heard you just say was that do we need to put additional resources into diversion programs, which is different than saying we are this wasn't a decrease in public outreach. You're saying do we need to maybe do a cost analysis of do we do we need to do a cost analysis and put more into it? Or do we need to find a way to do what we're doing more efficiently and effectively doing some. We might just be able to do it differently and get a better result. It's just a matter of we're we're again not tracking our our recycling percentages right now. And we need to because that's been a goal and then we need to find out how how we might be able to get more bang for the buck or if we need to spend more. So just on that, I mean, we were in 1516. We were at 10. Were any of those public outreach the Councilmember Gregory we're talking about? Did we lose any of those to the public? Can you can you guess right here? Okay. We were at 10. And now then we went down to seven and I know that from 16 to 17 to 17 18 those were just, you know, moved. Right. Right. But we did actually lose. That's correct. So I'm just curious. What department what area were those losses? Right. I can find that out. I have it here in my nose. Okay. So in in 1516, we actually added a marketing and outreach coordinator for the public outreach component. And then in 1617. Okay, here we go. In 18, we reduced the public outreach manager and the building outreach coordinator and a title that was recycling account representative. Now, Tina may be able to help me out. I know that the that the public outreach manager was a filled position where those other two actually filled by individuals or were they were they just open positions? Right. Right. So I think repeat that so they can hear on the I'm sorry, repeat her answer. Her statement was that they were open positions, but they were unfilled. So actually the the one that is missing is the actual field position, which was the public outreach manager. That position was filled and that position is not filled right now. So that went through a reorganization and was moved to another another manager within the division. Okay. So the job is still being done. Yes, it's it is now under under a manager that I can show you right here. The planning and public outreach manager position, which is the third one on the right. Mayor pro tem has a question. She's got to leave a little bit early. So one makes you. Yeah, I just want to apologize. I do have to leave a little bit early. So my apologies for having to go. I just wanted to address Councilmember Gregory about the outreach. We do have Katie be keep that beautiful. And one of their charges at the state and national level is litter mitigation and waste reduction. So they may be a resource to us since we've almost fully fund that organization. Any other questions on this one? Okay. Real quickly, just the way the department is is organized. Director of Solid Waste is Ethan Cox, who is over here. The collections operation manager, Billy Sprayberry, municipal solid waste operation manager is David Dugger. So Mr. Sprayberry handles all of the collection side. Mr. Dugger handles the actual operations within the landfill and the mining operation. Tyler Heard, who is the planning and public outreach manager, who has a field support component, which is a type of customer service and then a public outreach group. And then Keith didn't beautiful as was mentioned just a moment ago. In terms of accomplishments for 16-17, there was an expansion of the alternative fuels facility. The estimated completion of that is fall of this year. Basically, we began or we're going we're in process of our landfill cell construction. The estimated completion is this year that that item is has gone out for bid. And you'll be seeing that shortly for doing that cell construction. We did receive $995,000 in grants for the public CNG fuel ing station, the home chemical center, and then the mining operation and mining equipment. We retained full compliance with TCEQ and expanded as was mentioned a little bit earlier, our multifamily recycling services. Yes, that's my briefs. On the mining operations, I've had some citizens comment to me that, let's see there. They think that we're spending too much money and not really getting a bang for our butt per se on the mining. Is there a way to get a return on investment to see that in actual numbers and data? Yes, this is something that we're having the universities that we partnered with take a look at. The mining operation needs to get up and we need to get it going to see exactly what our recycle content is going to be off of that material and what those recoverable resources are. We're hoping to get to the point of starting to collect data on that right around this month. And then we will be running that going forward. I don't have a sense of what the data is going to look like , so I don't know how comfortable I'm going to be with a six month versus maybe a little bit longer data set. But we definitely have that as an item that we're going to look at. And so it's going to be a combination of the -- I think what we can get some pretty decent numbers on, which would be the amount of recyclable materials, but also the recoverable airspace that will allow us to put additional waste in there. What will be a little bit harder to pin down is going to be the avoidance of environmental liability by having the ability to design that still to modern standards once all of that material is out of it. So we're going to look at all that and that's definitely on our radar to do some analyses on it. Okay. Thank you. Sure. Let's see here. We've got our goals for '17-'18 is our building materials recovery program to increase that by 7% from FY '16 to '17. It looks like that. That will be pretty easy to achieve. The construction is going up, and so we're seeing more material coming in. Mining operations, we're hoping to hit the mark of 216,000 cubic yards on that particular one. Improving efficiencies from our information management via fleet software that we're taking a look at right now. Basically, that fleet software will allow us, if it works as we're hoping right now, it's in pilot phase, but allow us to be more efficient in our routing. We want to be able to reduce the preventable accidents by 10% from the previous year. So far, we're sitting at about 12 year to date. We had 26 last year, and so we're well on target to be able to meet that goal. And then we want to continue to refine our business plan for regional household chemical center. We're evaluating that right now. This is kind of a -- it's an attempt to expand out our home chemical collection to offer that service on a more regional basis. There is not another facility close to us that's able to do that. There's one in Fort Worth. There's one in Dallas. We're evaluating that right now from a business case standpoint to see if it makes sense. It's a good deal from the standpoint of being able to offer that service, but we also have to keep in mind that we're receiving regionally waste in as well as local waste. And so if we offer a program like this, the intention is to provide a way in which people can dispose of material so that it doesn't end up in the landfill, material that shouldn't go into the landfill. So in terms of our performance measures, we have residential -- sorry, been a long time up here. Residential refuse and recycling tonnage, commercial refuse and recycling tonnage, and pounds disposed of per capita. So that's what we're tracking now. We want to take a look at our increase in commercial recycling accounts, tracking our cubic yards process and our mining operation, and then achieving an optimal waste compaction. This one's a very operational in nature, but we want to hit right in that concept of having on a per cubic yard basis 1 ,100 to 1,200 pounds of material combined in that cubic yard . The reason for that is that we're trying to hit our optimal density to break down materials with our enhanced leachate recirculation. So a typical landfill is going to be a dry landfill, and you're simply going to put soil over the material and compact it. The landfill out there, at least portions of it, uses the injection of liquid and in some cases high nutrient content liquid to spur the breakdown of this material so that we can get greater compaction and greater breakdown of that material and ultimately be able to store a lot more material in a given cubic yard. Do you have a question? Well, just to ask that you can continue to use as performance measures residential recycling and recycling tenage, all three of those above. Okay. I don't know if I care about pounds per per disposed per capita but there may be a reason for doing that. But at least one and two. Okay. So, for the last containment, we reduced our 1617 capital improvement program by approximately $9.4 million that resulted in an annual debt service savings of about 1.1 million. So pretty substantial savings there. As mentioned earlier on the FTE slide, we transitioned our construction crew to mining operations. We reduced our operating expenses comparing 1617 to 1718 by about $620,000. The elimination of FTEs which we talked about which was $20 2,625. And we reduced our communication service and equipment expense by about $175,000 over five years by doing a contract directly with the vendor supplying that service. Okay. Yes. I would respectfully request that we take the last report and postpone that to a later work session because this is a Monday lunch meeting and we're going headlong into a very long day tomorrow. Since this is the very beginning of budget discussions, we have adequate time, several months, and Dr. Banks, excellent, excellent reports. I just know that as we go into this last one, brains also need to be sharp and I just would respectfully request that we just take this piece and bump it on the calendar later. Thank you. We had already commensurated on that. So, yeah, we were going to do that anyway. Yes. Item number one up there is pretty significant, I think. Thank you. How did you do it? We had an operations building expansion that we postponed for $1.2 million, a maintenance building that we postponed for $2 million, a material processing building for $2.7 million, an entrance upgrade of $1.3 million. That was a change in funding to unallocated bond money. A KDB property acquisition that we postponed for $720,000. The natural gas line expansion has been moved. That was a $400,000. And that funding was changed to unallocated bond money that we had available. The TCEQ groundwater and infrastructure testing of $550,000 , which was not needed because of some of our results. And a few smaller items. So some of these things were postponed, but they may be needed later? That's correct. We're evaluating that and, you know, we'll have the opportunity to make that decision in the future. One other item I would like to get back on the radar screen is it came to our attention a while back that the landfill is producing more methane than the current generator and the current collection system is able to collect in order to generate gas. And I think that has something to do with the contract that we have with the vendor. Where we had a vendor who would do up to three generators, but they've decided that they don't want to do anymore. So I would ask that we this year revisit that. Have legal revisit that or our city auditor revisit that to see if there would be any, if the vendor does not want to put in the generator. If it's a violation of the contract for us to put in the generator. And if there is any, what the values are to doing that in terms of cost recovery and what the values are in terms of reducing flaring methane. We are currently looking into our options right now, everything up to buying them out, as well as contract enforceability. So Dr. Banks and I have been discussing that on almost a weekly basis. And if you don't mind putting that on the council matrix so that we can kind of track and keep all of us keep reminded about hearing back on that. Sure. We have one other one after this. That's the one we're postponing. We're going to get through this one. Yeah, we got the electric. Real quickly in terms of process improvements, one of the things that we're looking at is reduce the landfill turnaround time through the completion of a second outbound scale and bypass lane. That will allow the more traffic to go through there in the same period of time. So that's a project that we that we have on the on the currently ongoing improve our materials, forecasting, budgeting and our CIP processes. We've made some changes from the standpoint of of our financial folks within the utility budgets to gain some more consistency, some cross training and some basically be able to share resources more effectively. Future projects. As I mentioned, we're looking at the fleet management software that's in a pilot program right now. And so we're evaluating that. And then we want to collaborate with fleet services to continue to look at ways in which we can reduce vehicle maintenance costs. Our our solid waste operations in many regards as a truck ing firm and anything that we can do with regards to our fuel platforms or our ability to become more efficient in our routing or to reduce the maintenance of our vehicles. There's definitely something that can help us to control cost. Real quickly in terms of budget highlights, you can you can see a couple of things in here that may jump out at you. And the first and foremost is that there is a you see an up tick in the personal services. This is and to some extent, I guess, on the on the operation side, you're seeing that as well. This is almost exclusively being driven by the implementation of the new mining program. And so that's where those new employees and that new operational cost is is coming in. So total expenses for that division is are setting it right at three point seven million dollars. And this includes employees purchase of equipment, supplies and basically everything that was needed to to get the operation up and running. That's my run. I see on here we've got general fund transfer and we did not have that on either the two previous presentations. Is that the ROI that we saw in the previous or is that H.R. and technology? That's is it Cassey, could you answer that question or Tina ? It's just a transfer for human resources. Okay. Yeah, right. Well, I translate that for. Yeah, sure. Yeah. So it is general fund transfers for human resources, legal tech services, all of the the general fund components. Okay. So what about the ROI? There is no ROI. There is no ROI. Right. No, there's not. Okay. Right. Yes, Councilmember Husserl. Thank you, Mayor. Is there a line item for OPAHLA? I know there's a close relationship, but I'm not sure if there's a financial connection. No, there would not be a line item specifically to that operation. I'm just saying that you're going to find that kind of components of a few of these elements within the budget, but not an individual line item. Thank you. Sure. Okay. So major capital improvement plans that we've got coming up. The Mosley Road remediation and landfill property acquisition. What we did on this one was we actually combined two former capital improvement projects. Mosley Road is a landfill that the city of Denton owned and operated that's been closed. It's out near the town of Crossroads. And basically it is it was closed in the in the late 80s. It ran from the early 60s until that time. There were very few things that were required in terms of a post closure or and there were no accumulation of post closure funds like we do in a modern landfill. And so even though we're not operating that landfill, we still have requirements to go out there and correct any issues. What's happening on this particular one is because it is a it's an older landfill. We're starting to see some of the material in it settle down and it's accumulating some water on the surface and it 's exhibiting some erosion on areas that are slowed down, basically covering the waste pile. And so what we have to do is go out there and do a pretty significant amount of dirt work on that to get it back in shape. So we're actively working with a consultant and TCEQ to make sure that we get that taken care of. They they imposed the closure post closure with subtitled D later on in the process. And so we we simply have to come up with the money to be able to to put this in place. TCEQ authorized facility system infrastructure. Basically, this is water delivery enhancement for expans ions of our enhanced leachate recirculation system, our ELR. We're we're basically injecting fluids into the waste pack to to make it degrade more quickly. The system includes polyethylene pipe fittings and several other miscellaneous items to get that material there. The TCEQ permitted control systems are related to interior roads and interior fencing and drainage system improvements . Our landfill buffer zone development is trees and irrigation system design seeding of the Mosley Road landfill and expansion of our current odor control system at our existing landfill. And then process upgrades and research improvements include the environmental contracts with research contracts with U TA and SMU that I alluded to a little bit earlier with the mining operations. That's it. So breaks. So last question. We recently learned that we accept other cities trash into our landfill. OK, is that correct? We I think it might be more accurate to say that we accept from outside of the of the city limits of the city of Dent on. So we're we're providing that service for people that are bringing in waste from the county. And I have heard that we charge less for the outsiders coming in than we do our own citizens. Is that I don't know the the cost breakout on that. It's a gate fee versus a fee for the service of being picked up curbside. So it's a little bit on a pound per pound basis. It may seem like more, but you're having the service of being able to take it out to the curb versus the service of having to drive it to the landfill and offload it. So it's like a convenience. Yes, to an extent, but I do not know the relative cost comparison on a pound to pound basis. I can find that out. OK, that would be great. OK, thank you. Sure. Any other questions? Yes, that's good. Sort of overall, very pleased with the presentations. One thing I would like to see is that each budget kind of line up together so that we don't end up with, you know, like the question about the general fund. Those items are not showing up on the other budgets. So trying to get to a point that all budgets pinpoint, especially on the internal funds that we know, OK, if it says this, it's an internal fund item. Just says we're comparing one next to another. We know what's going from what are going to what we'll go back through and make sure that's all lining up. Appreciate the presentations. I know those are long and arduous and I can see why mosquitoes is easier. Yes, yes, sir. Absolutely. Let me get in my last slide. So we're sitting at about two hundred and fifty thousand tons. I had to do it. I'm sorry. It's OK. What's one minute after two hours? Our tonnage diverted is set at about eighty nine thousand. Our diversion rate in totality at about twenty six point three. Size of collection fleet is sixty three trucks. We've got twenty five hundred commercial accounts of twenty one thousand three hundred and forty eight residential. And then we've got forty six miscellaneous landfills. So big operation about a hundred tons a day. Yeah. Great. All right. Thank you, Dr. Banks. Appreciate those very informative presentations that lead leads us to our concluding items. I have one. But anybody got a concluding item? Yes, customer groups. Just a comment. I've noticed the railroad ties along the side of the railroad there for quite a while and I know that we were probably waiting on the railroad to do that. So just an update on when that's going to be done or if we are in contact with the railroad. Yeah. I mean, I had a citizen reach out and ask if they could have some of those to reuse and was told no, that they were going to be picking them up. So and also just a comment about the current agendas. They used to be in our Friday packet for the upcoming meeting and I haven't been getting one paper hard copy hard copy for the like say today I would have had one Friday for this meeting and for Tuesday. So that was work handy. Yeah. Anybody else? Yes. I would like to get an update on the bond package for the curb cuts for the quiet zones for the big train, if you will. I think that's 2012. But if I could even bring me up to the State of the Union of that. Thank you. Any others? The only one I have is I'd like to either have probably have a work session or some kind of presentation by staff on when we're purchasing vehicles would really like to see if we have a policy to purchase either electric vehicles or hybrids based upon the job function. You know, to really make sure that our fleet is becoming more sustainable and also to make to get an idea of are the vehicles that are being used, do they match the job requirement? I'm just going to be truthful. I get a lot of citizens asking me certain types of vehicles driven by certain types of management personnel, you know, super crew, four wheel drive, dodges. You know, are they just how necessary are some of the vehicles that we're using in our day to day operations? I'm excluding police and fire from this request. Just more of just our O and M kind of operation, because I think as we move forward, we certainly want to make sure that our fleet is as fuel efficient and as sustainable as we can and that the vehicles are matching the jobs that they're being asked to perform. Any others? Yes. Briefly, I'm gonna give credit where credit's due for our city manager. I sent him a task that I was in my neck of the woods and before I could follow up with him, I got a call back from the citizens saying, hey, thanks. I was like, oh, that's done. So, I mean, I think, you know, I'm four meetings in, but I really do appreciate the support, if you will. So thank you . I do have a question. This is sort of. So when what time has to pass and maybe some staff can share this with me. What time has to pass when we quit referring to Mr. Highman as our new city manager? Because I still do that some and so I think I'm going to say, let's sort of move beyond that because I notice I still do that and I know sometimes staff does it, but you are a city manager. So I'm going to work real hard on making that transition. Yes, you bet. Yes. Okay, we will stand adjourned at 2 0 4. [ Silence ]