Nov 14, 2017 City Council on 2017-11-14 12:00 PM

Good afternoon, good noon everyone. Welcome to this meeting of the Denton City Council on Tuesday November the 14th 2017. It is straight up noon. We'll move through our work session agenda items. First item on our agenda is citizen comments on consent agenda items. I don't see any blue cards. Request for clarification of agenda items listed on the agenda for November the 14th 2017. Yes, Councilmember. I would like to request a pull A off for a vote, separate vote please. A? The DMV sponsorship program. Okay. All right. Yes, Councilmember. Mayor, I need to have in pulled. I've already filed the paperwork to recuse myself. In? Yes, okay. Ms. Nancy. Okay. Anybody else? Yes. Well, I'll be rec using myself from the close session items, so I don't know if I need to clarify that here, but. From all of them? No, just the airport leasing. Okay. All right. All right. Do you remember which one that is at A or? Yes. Okay. All right. And then, Councilmembers, I wanted to sort of just give you a brief explanation on agenda item two. Mayor. Where is it? D? Wait a minute. Is it D? Motion for? Yeah. Item two D as in David. It's a motion for, oh, I'm sorry. Councilmember Briggs, did you have something? I just wanted to go on record and say that item V had been pulled off just for the public. Yes. Just so they know. Yes . Before we move ahead. All right. Thank you. I appreciate that. Sorry. V as in Victor. On agenda item two D is a motion for reconsideration of a item that we heard last week, and I requested that. I've done this once before when an applicant who wasn't present at the time, but their representative didn't give maybe the full story on the presentation, and so it allowed some new information to come forward. I talked with the applicant for this particular item after the meeting, and I just felt that, of course, it's up to you guys, you all, to vote for the motion to reconsider. If you don't, then we don't hear it again. It just had some good facts that he didn't present, and we talked about why that was and won't go into that here, but. So that's what it's on there for. Just wanted to give you a little background and let you know that I requested it, but vote however you need to on that, and I'll be OK with the outcome on that. Any other items for clarification? OK. All right. Move into our work session reports. Agenda item three A. Receive report, hold discussion, give staff direction regarding a review of the Solid Waste Department's measures and internal control controls, excuse me, by We aver and Tidwell. Good afternoon, Mr. Mayor, members of the City Council. My name is Ethan Cox. I'm the director of Solid Waste. With us today we also have Elisa Martin as well as John Watson from Weaver and Tidwell. Their partners are with Weaver, and earlier this year we contracted, Solid Waste contracted with Weaver to come out and do a review of some of our processes and controls, internal controls in our department. As you're probably aware, we had a number of projects that have come before the council, the PUB recently, that we kind of looked at and said there may be some things that we can clean up from a control standpoint, from a risk assessment standpoint. And so that was really the charge that we left Weaver with and what they've helped us with over the last few weeks and months. So today 's presentation, they're going to come up, Elisa is, as well as John, and walk you through their findings of their site visit and their audit. And then after that, I'll return to the podium and walk you through management's response to those findings as well as kind of our plan of action that we plan to implement in the months and weeks ahead. So with that, I'm happy to turn it over to Elisa and John. All right. Good afternoon. Your presentation that you have in your materials has two parts, an executive summary and supplemental information. My expectation is that I'm going to walk us through the executive summary and then we can dive into supplementary information on any specific inquiries that you have that you want to talk about more specifically. So as mentioned, certainly the solid waste department has some opportunity to strengthen their processes and controls. And the charge for Weaver was to look at specific transactional cycles that had a pervasive effect on operations across the solid waste department. And so our evaluation was over the six cycles noted here. That evaluation was not a deep dive of prior transactions or historical view. It was a walk through of the cycle from initiation through the control structure through implementation of systems and authorization and reporting. So really looking at a holistic view of what these cycles were. And so we first started with the landfill commodity sales and cash collections separate and distinct from other work that had been done from the internal auditor for which we were a recipient and a reviewer of that work, but separately an objective view of what that cycle is for that purpose. Then we moved on to project management and contract initiation. So initiation, authorization, and monitoring of contracts. Purchase requisition and approvals, the annual budgeting process, and the linkage of that budget into JD Edwards, the fixed asset inventory, tracking and utilization of those asset listings and equipment, and then contract labor and overtime. So those six distinct cycles were part of our scoping and our evaluation. And again, this was a process review. We looked at the procedures and controls in place to operate and evaluated the cycle of coverage across those six cycles. We did two things. We evaluated the completeness of coverage of controls and expected procedural steps against city policies and procedures, against expected procedures and controls, and then we validated that what we understood to be in place was occurring on a transactional basis. And so we really looked at it from two vantage points. And through that, our team was in the field talking with individuals who have responsibility for execution over the individual cycle steps and reviewing actual evidence and documentation that existed in order to feel comfortable that the control or the process or the procedure had some compliance documentation of nature for a repeatable, continuous cycle. So that was the scope of our procedures. As part of that scope, we did come up with a good -- a really balanced coverage. We started with expected control, so we went into the cycle saying, "Here's kind of what I expect to see." And so when we look at landfill commodity sales as an example, from the point in which incoming waste comes in, rolls over the scales, we receive cash or we have a billing event, the validation of measurement, the pricing tables, all the way through that cycle, we evaluated those controls and those procedures that are currently executed on an ongoing basis. We watched, monitored, documented. We had 21 controls that we expected to identify and find in that cycle. And so -- and we documented the occurrence and existence of 15. So we said, you know, we think 21 things need to happen. We found 15. We came up with some recommendations. Of those recommendations, two, we risk rated high. Now, when we risk rate -- this is a judgmental rating based on a procedural evaluation. So if it's risk rated high, we identified a gap, you know, something that was missing that we would have expected to see. If it's risk rated moderate, something's happening but not as formal or standard as we would like to see. And if something's risk rated low, it's occurring but we're not going to get credit for it because it's ad hoc or not documented. >> I have a real quick question, Councilmember Gregory. >> Yes, sir. >> So I could not -- I did not notice this in the back up, but it might have been there. So you said of the 21 things that you would expect to see, you found 15. From those things that were not there that you were expecting or hoping to see, was that -- were they covered in our procedures manual or were they simply even missing from the procedures manual? I didn't -- I couldn't tell from the report if this was a problem with procedures that we had in place that were not being followed or if we simply were lacking in some procedures that needed to be there. >> The results of that delta was the recommendations. And so the detail explanation to you on that question is those -- are those five recommendations -- we 're just talking about this one sliver, this one cycle. Those five recommendations were the results of a missing delta. And it's not a one for one match. You may have one control that handles three risks or three processes. So it's not really -- it's not a checklist approach. It's not a one for one match. But I appreciate your question. And so in that detail, when you saw -- we were looking for these 21, we found these 15. If I've got recommendations, that's how we accommodated for any missing item. >> So the missing -- but again, the missing items, was it due to a lack of written procedures, standard operating procedures, or was it a lack of simply following procedures, or was it a combination? >> I would say a combination. And we're going to get into the detail of our -- of the 10 high recommendations, and you'll see that there's a combination of all of that. >> Okay. Thank you. >> Yeah. Absolutely. So as I mentioned, there are five items only of which two were considered high risk. So a gap in that case. The next process was project and contract initiation. Initiation is one piece. Then you need authorization and monitoring of contracts in order to have a continuous, effective process. And so when we look at projects, we're really saying the landfill has an effort. Is that effort a project, or is it just an ongoing effort? If it's a project, what's the formality in place to actively manage and monitor the outcomes expected? And so we looked at the entire cycle from the project all the way through reporting to you as counsel on the output and what would be expected to be in place. I'm happy to report that we found 15 very active control points through that cycle. We were looking for 19, so we found 15. And through that process, we identified five recommendations. And these are recommendations all related to formality, those five high recommendations. We found another three things that could be better, get credit for what you're doing, but the five have to do with formality. And we'll talk about those five. That's probably where we have the most formality that could be put in place. Then we looked at the purchase acquisition process. So you have a requisition, and then you go through and approve the buying, essentially. And so validating that this is a budgeted item , a legitimate purchase, a necessary purchase, and getting through those approvals, we 're very confident in that process. And we were able to identify the controls and expected procedures. We had no recommendations in that process other than one low recommendation that was a documentation effort. The next process was the budget preparation effort. Now, this only happens annually, and of course happened under prior leadership previously. And so this was an area that we looked at for the initiation of the budget, for the level of departmental roll up of that budget, and how that budget gets into JD Edwards in order to be monitored. And there were recommendations that we made, but only four, and only one of them was considered high in this process. And we identified nine controls, primarily citywide controls that are implemented by the solid waste department, but a pretty robust process that we looked at in that evaluation. The next area was fixed assets, fixed asset inventory, tracking, and monitoring. So what equipment do we have? Do we know where it is? Do we know what it's being used for? And in that case, we've identified seven controls over that process. And frankly, the asset tracking and requisition process was pretty strong. We only made one recommendation, none high in that approach. And then the last process was contract labor and the use of overtime. Certainly labor is necessary at solid waste, and direct labor is somewhat uncertain based on unpredictable volume. And there needs to be a process for using contract labor, monitoring that labor, and then monitoring the overtime elements. And those are the processes we looked at. We did identify seven controls. That process has the appropriate blocking and tackling, but there are some more strategic recommendations that we made. And so those recommendations, those two recommendations were both rated high in this particular process. And so this table gives you a snapshot, one, of coverage. You should have comfort that through our evaluation, we found 61 controls, essentially 61 things that are happening to cover the initiation, the reporting, the authorization of that cycle. And so we were, we did find formality in procedures, processes, documentation. Do you have a question? Yeah. So it's 61 out of how many anticipated controls? I think it was about 72. Okay. Thanks. So not a huge gap in the supplemental information for each table. We indicated that. And again, it's not a one for one ratio. We come in saying, we're looking for what we expect to find. What did we find? You know, you could achieve that multiple ways through automation, through manual procedures. And so we were quite happy that we found the 61 controls that we did find. But that doesn't mean that there is an opportunity to improve. And so what I wanted to cover next was what are these 10 things that were the higher risk recommendations, what we had deemed higher risk. Again, this is a subjective risk rating. But if we thought that there was a gap in coverage, that's really where that higher risk was. So I want to just map down these 10 items that were part of the higher risk controls. So the first is related to landfill sales. Number one and number two are both related to landfill sales. And there currently has not been an updated cost of service analysis performed in order to validate and update the tonnage rates and the fees being charged for the various services. So we made a recommendation to do a cost of service analysis. That's a strategic type analysis that would be helpful going forward . The second recommendation had to do with access. So we want to have a least privilege access in any systems or any authorization that we give employees. And so we did find in paradigm that they could restrict the access in the paradigm system a little bit better. So those two recommendations had to do with landfill sales and contracts. The next five are your five risk recommendations related to project and contract management. And we could have made this one big one, but each one has a separate attribute. So we wanted to call out each attribute separately. So the first thing is really defining what a project is. Not every initiative taken at Solid Waste should have the same level of attention. And knowing really what constitutes a project. And having some definitive criteria. And then once you define a project, required steps along the way for evaluating, approving, and managing that project. I would say on a more proactive basis. The next has to do with once you have a project underway, the required elements to constitute continuance. So having a business case and actually preparing a business case analysis that then justifies both an operational feas ibility but the financial feasibility. Not looking at it only with one half of that equation. And so the establishment of a project is one step. Once you have a project, you should have a business case and you should have developed criteria and procedures that then take action in order to proactively look at operational metrics and improvement, including environment, as well as financial metrics in order to proceed forward on a project. The next has to do with project management itself. And so currently we do not have a project management office. There's not a PMO. There's no one that says I'm responsible for ensuring this additional effort on top of our daily job is going to achieve the outcome that's in my business case. And now that we have individual effort, but really that project management function separate and distinct from the division or department management. And so we recommend that the landfill consider a project management office or a project management position to own that responsibility for proactive management. When we look, as weaver, look at a gap, we're also looking at what's the root cause. Why is that not happening? And sometimes it's not happening because we don't have an active participation responsibility on that. So that's what the PMO office recommendation is. The next has to do with periodic touch points for continuance. So defining the conditions that would require a project to then become a contract and any kind of contract that maybe wasn't part of a project to still have the criteria for formalization for contract requirements and separate managing of another party's responsibility back to solid waste. So understanding where those responsibility boundaries are and having that documented. And so six and seven both have to do with contracts and identifying what defines the condition for which a contract should be required and then separately defining the review and authorization of contracts and then ongoing monitoring of contracts as a separate responsibility. So distinctly carving that out. So those five all came from the project contract management part of the cycle. And again when we do root cause analysis we're looking for the why. Why is this a gap? And we feel like that's probably the area that could be strengthened the most, that particular cycle. Then moving on, item eight or recommendation eight had to do with the budgeting process and really looking more from a strategic budgeting cycle versus an annual budget. Certainly on a year by year basis knowing what your costs, your requirements and your expected fees are is important. But mapping that back to some specific strategies and more of your long range plan, which we should have, is also important. So it justifies your ongoing budget responsibility. So that was that recommendation. The next two recommendations had to do with overtime and staffing. So the first has to do with a strategic staffing plan. And this is different than just having a head count or your typical employee monitoring, but more about capacity planning and determining where your unpredictable volume is and what your strategy is to manage that unpredictable volume on a more periodic basis. Maybe it's weekly, monthly versus quarterly or a big bucket annually. And so having a strategic staffing plan allows the divisions to know where their labor source will come from, given variable volume that can be used. That then feeds into overtime usage, because overtime usage is essentially a reaction to staffing capacity planning. And so we separated those two recommendations. The last had to do with separately approving, hopefully advance approval of overtime usage so that we can have enhanced budget monitoring. So those were the 10 recommendations that came out of our evaluation with detail of our controls and gap coverage that was provided to Solid Waste. And I was going to conclude my remarks with that. I'm happy to answer questions based on your review of the supplemental information. But as important as hearing what our findings were, it's probably more important to find out what Solid Waste has done in order to be responsive to our recommendations. They have a response for all 21 recommendations. I'll leave open to questions. Any questions? Seeing none. Thank you. Thank you. You bet. So I assume that means most of the questions are going to be for me. So I'm not I'm not getting off easy. If you've implemented things to fix them all, then be sure we're good here then. So short presentation. Well, much like the Weaver team did, I am going to hit these at a fairly high level. And we do have 21 of those through. So I want to be a good steward of your time and make sure that we get through these quickly. That being said, if you have questions you want a little bit more detail, please stop me . And I'm happy to dive into that. I think one of the things that I'll say at the outset is I'm immensely appreciative of our staff. They've had a great deal of change over the last few months since I've been involved in Solid Waste. And these types of reviews typically aren't fun for staff. They wonder why folks are asking about their work and what they're doing. I've been really, really impressed, continually impressed by our staff's openness to this and their willingness to quickly implement change when we've identified these things. A few things that are kind of connective tissue through all this or some overriding themes is one of the things that we were addressed and that we found as well is that having clear roles, responsibility, authority is kind of an overriding theme with a lot of these points, as well as having standard operating procedures and then having the ability or the willingness to go back and stick to those and also evaluate how we're doing. And so even for the things that I go through today and I say this is complete, our work is never done on these types of things, internal controls, operating procedures, or things that you constantly rinse and repeat on. And so I just want to kind of emphasize that even when it says it's completed. So first things first, PFC, that stands for points for consideration. The first one is formalized process to evaluate and set tonnage rates, like Elisa said. Weaver's recommending a cost of service review. That is in progress. We have that in our procurement department right now. A few things that we've been doing to kind of gear up for that is reorganizing our business units, our profit centers if you will, within solid waste. We can't very well run an effective cost of service if we aren't allocating our cost appropriately and we don't have our operations divided up the right way. And so we have done a little bit of legwork on that. We're closing in on that effort and we should have a good cost of service around Q2 of fiscal year 17-18. PFC2 was not on the list that Elisa covered. This says evaluate process for accepting and monitoring on account customers. Essentially that is for customers that come to the landfill and we issue credit versus taking a cash transaction. You know, what are the standards in which we're adhering to in allowing that to happen and are we following up on it to make sure that those folks are doing what they need to do as a customer of ours? Are they maintaining the right level of waste coming in and out of the facility? Are they paying for it in a timely manner? We just need to tighten up our controls and so in the next quarter we're actually going to be reevaluating that process and assigning staff to monitor that on a routine basis. Number three is to enhance the controls for the paradigm access. Really from staff's perspective what we look at this is this is really a separation of duties issue. If everyone has unfettered access in the billing system to make adjustments, to implement rates, to do those types of things and that's also the same staff handling payments, it's very easy to have fraud occur. It doesn't mean it has occurred, but there is that potential there and so we want to make sure that we restrict access, separate that out by rules, have separation of duties and then make sure that there's an audit trail for that type of stuff moving forward. We are working with tech services on that as we speak and we hope that that'll be done in the next month. We have commodity rates to maximize sales. We have assigned a business analyst to this to monitor and reconcile our commodities. We sell a number of commodities at our site. We have a lot of construction and demolition material that comes in that we process and then sell as a commodity. That 's concrete, tire chips, soil, things of that nature and so making sure that we have the right processes in place to maximize our revenue on that end is really important. That'll be a part of the cost of the service review as well. Strict flow and track visitors entering and departing the landfill. If you take a visit to the landfill, you'll notice that we have a number of lanes kind of like a tollway coming in and out of our facility. We do have a bypass lane to make sure that we don't get clogged up for our own account customers. Essentially what this recommendation, what we're going to be doing with this is evaluating that design, making sure the traffic flow makes sense and that we streamline a way to track those folks that are coming in and out of our facility. Think toll tag. There's a camera there, takes a picture, records the weight. It makes the process a lot easier and so that's something we're going to be taking a look at as well. Talked about formalizing the definition of a project. I mean essentially for us, it's any type of initiative that is new business based on what we're doing now. Now that may be a temporary initiative. Let's take the CNG gas station that we talked to council about a few months ago. That's something that has a definitive start and end in terms of the project work . But that also may mean that there's a project that's a brand new business unit that's going to require a handoff and further implementation and ongoing maintenance, like say a mining operation. And so all of those would be what we would say that fits the definition of a project. As we continue on into these, these next two are also related to project management. At least we talked about business case analysis. We're requiring that for any new initiative that comes through the pipeline now. We have kind of what you would call a phase gate approach is that before it reaches my desk, it has to go through several folks that are either analysts or kind of gatekeepers for financial components of this. The idea behind that is that we get some diversity of thoughts, several different eyes on a proposal before it reaches the PUB or council. That's currently happening now. And so that is something that we 're going to be focusing on an ongoing effort. Couple questions. Councilmember Briggs. On the items that say complete, were these already in progress before this report came back? And did they, were they aware of that at the time? A little bit of both. I think some of these are fairly new, but I think coming into solid waste, some of these things were pretty apparent from day one for me and members of the staff. And so I think most of these have been completed since the Weaver evaluation. But this was definitely a cooperative effort between us and Weaver as we evaluated some of these points for consideration. Does that answer your question? These that are, those four, seven, eight, nine, and ten, are these in response to, this is a different process that will help us to avoid sort of circumstances like we had with some of the projects, the mining, the liquid natural gas, or this will help mitigate some of those concerns that we had to deal with after the fact. Absolutely. Okay. You know, and I think the idea behind that, kind of that phrase diversity of thought is, you know , there's, there's times that you have to reach a consensus to get something through. And if we all can't buy in and be on board with that, then it doesn't mean that that continues on without that type of approval. I think to use mining and the CNG station as an example, there were areas of our staff that didn't agree with those projects. There was some disagreement amongst the ranks. And so I think depending on which perspective you're looking from, whether it was an operational or a financial perspective, that was kind of where the differences were present. And so with that, we have to have really a balanced approach to our projects. Is it operationally feasible? You know, is it financially feasible? And if the answers to these things aren't yes, then it shouldn't move much further beyond that point. So I guess to follow up on that, and it's a question for you or maybe for the city manager. Based upon your report, there were some who had a difference of opinion on those projects moving forward. Do you, well, you weren't here, Mr. City Manager, but see, because I don't recall, and that's one of the things I've always thought we needed at the council level, is if projects do come forward that have these kinds of scenarios where you have people who are maybe have a difference of opinion, we don't necessarily always hear that. So it seems like those might have been the situation where when they were presented, the dissenting concerns were not necessarily saying that either they get dealt with at staff level or if they come to council, then those dissenting opinions or those concerns will be brought forward as well for the council's consideration. Right. Okay. I think a good way to sum that up would be that it's incumbent on me or whoever stands behind this podium that we convey the risk associated with some of these new initiatives and projects. And so let's take mining, for example. That was very much a financial risk. And we should have done a better job of conveying that to the council and the PUB so you can make an informed decision. Good. Thank you. Appreciate it. So in terms of the PFC 8, that is create a project management office. At the time that Weaver did the review, we had an immense number of projects that were queued up. We've since thinned those out. From a staff perspective, we're not sure that we need a full office of project managers, but we have, as of August 2017, appointed a project manager in our office. His name is Nicholas Vincent. He is one of those gatekeeper type of positions that when things get submitted and come through, his eyes are one of the first that are going to be laid on that and he's going to make sure that the feas ibility is there. In terms of defining contracts, when those should be utilized, I'd love to tell you that there is a hard fast rule of when a contract is needed. What I will say is staff's approach to this is anytime that we are obliging the city to do something and we're obligated to do something or we're having another party be obligated to do something for us, those are all these instances where from my perspective we need to bring those to the purchasing department, to the legal department and make sure that they have eyes on it and they can share that with us. Yes, Mayor Pro Tem has a question. I thought there was a financial figure that triggered the need for a contract or triggered the need for purchasing or what have you. There can be through the purchasing process. I don't want to misspeak, but there is a dollar amount there that will either allow this to go just through a standard purchase order where the purchase order stands as the contract or we need to get something a little bit more formal into place. I think some of the challenges that we saw at Solid Waste was particularly with leases and some of the things that wouldn't necessarily have gone through the purchasing department. That's why for our standard definition is anything to where we are obligated or we're requiring another party to be obligated to us, that's at least kind of an alarm bell for us that we need to consult with purchasing and/or legal or others within the city organization. So it 's not necessarily a number is what you're saying. It's basically just an obligation. If it's a purchasing item, it can be a number, but I think we really feel like it needs to be a broader definition than that. Thank you. All right. In terms of contract and lease initiation review and approval, I think from Solid Waste perspective, the city has processes in place for this and like I said a second ago, it's really just as simple as us making sure that we're adhering to those processes. Contract management procedures and also renewal process, that's PFC 11 and 12. We do have an administrative office that we've created through our reorganization. One of the real weaknesses that we identified when I started in Solid Waste is we didn't have administrative staff. And so what that meant was a lot of the operations managers were kind of wearing two or three hats at one time. Not only were they an operations manager, they were also a project manager and they had administrative responsibilities. And back to that separation of duties, checks and balances, even when everything is well intentioned and people are doing what they should be doing, it creates kind of some murky boundaries, if you will. And so the administration manager has a number of responsibilities that they're taking on. One of those is making sure that from a contract management standpoint, we have well over 50 contracts within the Solid Waste Department. 100 more citywide is that is a central focus for this position, having a repository where we can easily get to that information. And then making sure that they're providing the effective communication and coordination with staff. For things like renewals, going on to number 13 is what happens if a vendor is not performing? Who's keeping an eye on that? Who's the owner of that process or that project or that contract? That's going to be a key role moving forward for us with administration management as well as our coordination with operations. POC 14 is verification of needs prior to approval of purchase requisition. This was as simple as just setting a formal process. There 's a form that our managers complete now that says I have a need for a purchase. They identify what fund, what the purpose of that purchase is going to be. That's handled by a centralized person in our administration office and things are coordinated in a much more efficient and effective manner. 15 is enhanced reporting within paradigm. This is going to be an ongoing effort for a little while as we are coordinating with tech services as well as our vendors to make sure we have routine operational, financial, and performance measures that we can report out. 16 is internal controls over budget preparations. This is listed as low risk assessment, but we already completed this. Essentially this deficiency was making sure that our budget documents are locked down to where if I go in there and edit something, it has to have certain levels of approval for that edit to be accepted. That's as simple as putting a password on a particular document and making sure that we have consensus and everyone is on the same page when those updates are made. That carries over into P FC 17, the consistency of draft and final budget. I mentioned a little bit earlier that we're going through and updating our business units. That was one of the challenges with making sure that we are consistent and when a member of council, a member of staff asks, "Why does this show up this way that we're not having to dig through a myriad of spreadsheets and documents to reconnect the dots?" We feel like as we adjust our HBU's, this will be much more transparent and easier to follow. That will make it much easier for us to transfer our draft budget into the final budget document. Lisa talked about the strategic budgeting process. That's actually in progress right now as we speak. We are going through our capital improvement planning process right now, which is a lot to do with our equipment, our projects, things of that nature. The strategic point of this is making sure that everything that we propose has a link back to our strategic plan, our long-term goals. It's also making sure that we go through several iterations of that budget process to make sure that we have good discussion, that if there is differences of opinion, we work through those. When we provide it to the city manager through our department, it's something that all of us can put our full faith behind that that's a good product. That also ties into utilization monitoring for a lot of our equipment. For lack of a better term, solid waste is like a transportation company for refuse and recycling. We have a lot of vehicles, a lot of heavy equipment on site. The utilization of that and the utilization of our staff, those are the two most expensive resources that we manage. Making sure that we have our finger on the pulse of that at all times is do we have the right amount of equipment? Is our capacity where it needs to be? Are we overstaffed? Are we understaffed? I think all of those are questions that we've got to tackle in the months ahead. We do have a utilization report that we're looking at for our vehicles and our heavy equipment. We're working through that with our CIP process right now. That's been helpful so far and we really see that as a big benefit moving forward that we can keep an eye on that. The last two are really tied to the strategic staffing plan as well as oversight and use of contract labor and overtime. After we shuttered the mining operation, we did reduce our reliance on temporary labor a great deal. We were upwards of 10 to 15 temporary laborers on site each and every day. At that point, we're down to about four. Our goal over the next few months is we do want to do an operational review that includes a staffing plan. Coming out of that, what we want to have is here's the level of work that we need to achieve on site in our collection routes every day. Here's the capacity that we need to meet that and make sure we're being a little bit more proactive about staff management as opposed to finding ourselves, like Elisa said, in those positions where we've got to approve overtime or we got to go get contract labor because we didn't plan ahead effectively enough. A lot of activity going on, a lot of things that are in progress and a lot of things that are coming up. I know I ran through that very quickly. I'm happy to stand for any questions you have. - Councilmember Gregory. - Thank you, Mayor. Thank you for the report, Mr. Cogs. It 's clear from management response that a lot of the items that were brought up by Weaver were not a surprise and that you were already working on them and I appreciate that. You know, solid waste is an interesting area because people pay to give us materials and a lot of those materials actually still have value and we're finding ways to get value out of those materials, keep them out of that landfill actually. And I think we've all been very pleased with some creative ideas and creative programs that are happening in our solid waste department. It seems clear to me from the Weaver report from your responses that we needed some tightening of oversight and management of those. At the same time, I'm interested in us continuing to be as creative and as thoughtful as possible in taking those materials that people are willing to pay to give to us and to reuse those as effectively as possible. So I think that you're going to have a little bit of a job on your hand to manage the idea of continuing to run a department that has a lot of creativity and yet has the kind of bureaucratic controls that are necessary to protect the rate payers, to make sure that they're in good shape. I think that's going to be a big task, but I think the fact that you've already seen some of the areas of concern and that you're already addressing them is a good sign. So thanks for that. And so my expectation is that you'll be able to do both. That you'll be able to continue the kind of creative and trend setting programs that have made our landfill and our solid waste department a department that's copied by an awful lot of other utilities or municipalities around the country and around the world. And yet at the same time, do it in a way that is as careful as possible with the use of our resources and gets them as far as we can. So thanks. That's absolutely our goal. Thank you. Council Member Briggs. Thank you. These are great responses and I'm glad to see that the staffing plan is on there. I know that we have a lot of people working really hard out of the solid waste. So that's just my one comment. Just kind of, can you give us an idea or let the citizens know why the solid waste department, why this was, why we did the audit out here? Was it you coming in? Was it, I know that council had, we've gone over a couple of contracts that we didn't get a lot of information on or the risk wasn't there. Was that mostly why we have this audit right now we're going through? I mean, you may, the city manager may speak to that. I'm just kind of... Good pass off. Yeah. All I wanted to do was raise my eyebrows. Yeah, I was going to say, man, that's a great sign. I'm going to have to steal that. The non-verbals were very subtle, do you think? Yeah, Council Member Briggs, I think you bring up a good point. Bringing Mr. Cox in, we just wanted to be sure that he had a very solid scan of how things were working there. Had some jumping out points. We knew that some of the processes could be tightened up, particularly in the business case analysis. The mayor talks about perhaps some minority opinions on some of these programs. I think it was just more of a matter of teaching our folks how to ask the right questions and in terms of justifying projects, that sort of thing. We knew that there was some issues that needed to be tightened up from a separation of duties perspective. One of the other things that Ethan hasn't mentioned that we've also done with not only solid waste, but all the utilities is those financial analysts are all reporting into Chuck Springer and his group now. So we've got that, our finance director, CFO, overseeing these pro formas as well. So it really gave him the opportunity to think through what the issues were, where maybe some staffing enhancements could be made, such as the project management office, and make sure that we're giving you the best information as possible. We value the innovativeness and the creativity out at the landfill, but I think as you've also seen, it's real easy to get carried away with innovativeness without having a solid business plan and that puts the taxpayers and the ratepayers second. So I think everything that we're doing right now is just trying to make sure that we're giving you as thorough of an analysis on any business plan in the budget as possible. And I feel like we're probably heading into this next budget year. We're going to see an even more streamlined solid waste budget as well. So it was really to make sure that he had a great jumping off point. Okay, that makes sense. Thank you. Yes, Council Member Duff. Welcome back. Actually recycling is not something that occurs in most of the apartment complexes. Is that correct? I think that's something that's going to be brought up here later. I've got a lot of letters from people that are wanting us to look into how can we do that. That's definitely top of mind for us. It's a subject that we've been working with on the Council Committee on the Environment. Right now our guess or our estimate based on recent numbers is about 40% of the apartment complexes proactively offer recycling. Now the challenge with that is that recycling is also one of those that there is an open market and so we're not in essence the only show in town. So we are one of many cities that are kind of struggling with how do we tackle that because in a city like Denton we have a lot of new development. We also have a lot of old development and so it's not a one size fits all solution. We've kind of walked through some of our plans, our strategy to tackle this issue with the COE. That's certainly something if Council is interested in I can certainly share with the entire Council. From a personal standpoint I know that when we take the trash out like we did this morning it's about this much and the recycle can is totally full. Sure. And I think that is a possibility. You 're good. The camera's only on Mr. Duff. Any other comments? Thank you so much. I appreciate city management and staff looking to tighten up the processes because that's what we owe our taxpayers in our community to make sure we're spending our money in the best way possible. Thank you very much. All right. Housekeeping matter. Closed session item C is consultation with or if there are any questions about the scope of work in consent agenda item U which was not pulled. So I don't know if there were any questions but we do have attorney here that's waiting. So if we don't have any questions for closed session item C then we can release them but if we do we'll just move right on. I just wanted to make that announcement. So agenda item U is the ordinance authorizing the engagement of the law firm and BKD to wrap up the review of the Parks and Rec Department and Foundation Board. So if nobody had any questions or that wasn't pulled so are y'all going to have any questions for this particular agenda item C closed session? All right. Last call. Seeing none then we will go ahead and then pull agenda item C and let the appropriate personnel who are here waiting for that be released from needing to be here for that item. Appreciate that. Okay. We'll move on to agenda item work session agenda item 3B. Receive report and hold discussion give staff direction regarding the Denton Energy Center air permit review being conducted by Black and is it Veach? Veach. Okay. Corporation and additional studies or analysis etc. Good afternoon. Brian Langley, deputy city manager. We had some current concerns that were brought forward to us by the city council and some in the community about the validity of the air permit that was filed for the Denton Energy Center and so we hired the firm of Black and Veach to do an independent analysis of those factors to take a look at that and bring that information back to the city council. Yesterday we had the same report go to the public utilities board and we'll be providing this information to the city council. Diane Fisher is here with Black and Veach. At this time I'd like to introduce her and she'll be providing the presentation and then walking you through the report and her other staff and then following her presentation I'll be back to give you some additional information about some other studies that have been requested for discussion by the city council to get some direction from you on whether or not we should proceed. So Diane, thank you. Good afternoon. Well it's an honor to be here today. Again my name is Diane Fisher. I'm an associate vice president and project director for the project we're helping Denton Energy Center with. First want to tell you a little bit about Black and Veach so you can understand why Denton had us do this work. Black and Veach is a hundred year old engineering and construction firm. We started, we just had our hundredth anniversary back in 2015 . We do mostly infrastructure projects, projects like the Denton Energy Center. We also do water and wastewater projects, oil and gas projects, telecommunications projects and we also work in the, for the federal government in those same areas of business. We serve in a variety of roles on those projects. Sometimes we're the constructor so we will serve as the engineer so we would be the designer of a project like Denton Energy Center and then other times like this time we're serving on behalf of the city in looking out for the city's interests. We have about 7,000, I mean 10,000 employees. We do about 7,000 different projects a year across six continents and we have about three billion in revenue last year. So this is a pretty typical project for Black and Veach and we've done a lot of permitting projects similar to the Denton Energy Center. My background is I have, I've been at Black and Veach for about 25 years. I have a mechanical engineering degree from Iowa State University and although I'm serving in more of a director role on this project, my background is actually in air quality control. I have a lot of experience in permitting and I've done similar activities like we're talking about today where we are providing testimony or other type services for, in a government setting like this. I'm going to talk about the team that we have with us and then what we're going to talk about today. First off, Michael Fisher, no relationship to me but we have the same, similar last name. Michael Fisher is the project manager and he will be providing an overview of the assignment we did and also providing an executive summary of our conclusions. Michael has a degree in mechanical engineering from the University of Tulsa. He has 26 years of experience in a variety of roles in the power industry. He's served as project manager, engineering manager. He's been a design, a mechanical engineer in a design role. He's also done construction and startup and has served both on the design and owner's engineer side. Then he'll turn it over to Mike Wrinkle. Mike has a master's in environmental engineering and a bachelor's in chemical engineering from the University of Nebraska. He has 17 years of experience in doing environmental permitting similar to what we're going to be talking about today. Then finally, we'll turn it over to Paul Lee. Paul is an air quality control engineer. He has a bachelor's of science degree in chemical engineering from University of Colorado at Boulder. He'll be talking about the emissions and also the air quality control equipment that's going to be at the Denton Energy Center. So with that, I will turn it over to Michael and he'll do a summary of the assignment that we did here today. Thank you, Diane. Good afternoon. As Diane had stated, my name is Michael Fisher. I'm the project manager for this effort working with Denton Municipal Electric on the Denton Energy Center. Our overall role is owner's engineer. As part of that owner's engineer role, we're asked to give a little bit of background and a little bit of history and look at the permitting process for this Denton Energy Center. So we were asked to provide an independent review of this project. Now, just a little bit of background, just so we're all on the same page, the Denton Energy Center is a 12 engine reciprocating internal combustion engine project, commonly referred to in the industry as a R ICE unit, and it's used for peaking purposes. Wartsilla is the engine manufacturer in this case, and Burns and McDonald is the engineering constructor. And again, discussing a little bit about our process throughout this, the surrounding community has brought up concerns about the air permit application and the permit process. Therefore, our assignment from the Denton Municipal Electric was to perform an independent analysis of that permit process and the application. Along with that, Denton Municipal Electric had requested that we compare the Denton Energy Center with one specific unit or specific project within in South Texas , in Edinburgh, as a matter of fact, entitled Red Gate. They had the same amount of engines, and it was a similar reciprocating engine project. So we went through, as a part of our process, we went through, we provided a report, and we also had come up with some additional, come up with some conclusions on reviewing the permit and the permit application. And from the permit application, we determined, one of our conclusions, that the permit was, the application was filed correctly, and that the permit is valid and filed in accordance with the EPA and the TCEQ requirements of the TCEQ. Now the TECQ is the, that stands for Texas Commission on Environmental Quality. They are the agency, the state agency that regulates the EPA, the regulations from the EPA. Specifics about the DEC permit, this project was permitted as a peaking unit in an ozone non-attainment area. Now we'll get into specifics a little bit later on. My colleagues will talk a little bit about, you know, what's a peaking unit, what's an ozone non-attainment area. So we'll touch on that a little bit more here shortly in further slides. It was permitted as a minor source using a standard permit, and when we talk a little bit about a peaking unit, that's in relation to 8,760 hours, 8,760 being the number of hours in a year, and this, the Denton Energy Center is permitted for a maximum of 3,200 hours per year on any given unit, on any given engine. No, go ahead. My mic was off. Thanks. Can you explain the difference between a minor source and a major source in a non-attainment area? You know, I'll defer that question to one of my colleagues. Is it coming up in later in the presentation? Yeah, it'll come up further in the slides. Yeah, I'll have one of my colleagues, Mike Rinkle, will talk a little bit about that. Okay. Okay. So question I have, if you'll go back to the hour, the last, I guess, the previous slide or the next slide or I'm not sure which slide it was. Okay. That showed the 3,200 hours or something like that, that one right there. Yeah, that one right here. Okay. So, and maybe though, and if they address, if they address this in the distinction between a minor source and a major source, because my understanding is that there 's only a certain amount of emissions that are allowed under each one of those, under the minor source. You can't exceed a certain emissions level. So is this 3,200 hours per year? So we've got 12 engines. Correct, yes. Which is, I think it's 200 megawatt or 220 megawatt capacity, something around there. So we multiply that megawatt capacity times those hours and that's the maximum amount. We would still be within our permit, is that correct? Each engine itself can run the maximum of 3,200 hours. So you'd run 3,200 hours on engine one. All 12 of them is the same. Yeah, right. Okay, gotcha. At a maximum. Now, you don't, it doesn't mean you have to run 3,200 hours. It just means that that would be your cap. No, I appreciate that. That answers my question. Thank you. Okay, so in further our conclusions, we, Black and Veatch has no concerns with the Denton Energy Center project meeting the emissions limits in its permit. With that, the Denton Energy Center has an enhanced emissions control package, an optional package. And the emissions testing will be performed by a third party agency using procedures from the EPA and the TECQ. With the TECQ being offered a chance to come witness that testing. And that testing will also be witnessed by, as a matter of fact, Paul Lee would be witnessing the test from the owner 's engineer perspective during that emissions testing. In addition, the industry standard is for the emissions performance to be backed by contractual guarantees from the engine manufacturer. We'll get a little bit, get a little bit into more detail later on when we talk about make good contracts where there's no buyout provisions for the emissions. They have to meet the emissions in the contract or essentially continue to, continue to do what they need to do in order to meet those emissions. With that, I'd like to turn, turn this over to Mike Rinkle, who's our environmental engineer and permitting specialist. He can get a little bit further in detail. Yeah, answer some of the questions that we had. Yeah. Thank you. Thank you. Thank you, Michael. And good afternoon. As Michael said, my name is Mike Rinkle. And we're talking to you guys today about our review of how the Dent Energy Center went through its permitting process with the TCEQ. Just to give a brief overview, the Clean Air Act is the federal act that does promulgate and regulates the emissions of air contaminants into the atmosphere. So the EPA has delegated the authority to issue permits to emit air pollutants in the atmosphere to the state of Texas, and that is through the Texas Commission of Environmental Quality. So the TCEQ is the governing agency here in the state of Texas that will issue construction permits and operating permits. What the TCEQ has done to make life a little bit easier and utilize the resources there for their staff, they've developed a hierarchy of how they want to set the methodologies of how they go about getting construction permits. And this is the hierarchy that they've kind of developed. As you can see on the right-hand side, there's three bullets that are kind of under this minor source modification, and only one bullet is kind of under the major source or major modifications. Since the question came up, I'll go ahead and answer the question that was about the minor source and major source. Under the definition of a minor source or major source, the easiest one is a minor source is a source that's not a major source. So... Does that satisfy your answer to the question, Mayor Pro Tem? No. Well, but that is the definition of what the minor source is underneath the TCEQ rules. So you have to look at the definition of what a major source is to see whether or not your major -- if you're not a major source, then you're classified as a minor source. So the definition of a major source is rather complex, but in short, if you emit on an annual basis emissions above 250 tons a year of each individual pollut ant, then you would be considered a major source, unless you're classified as one of the 28 listed sources under the rules. The Denin Energy Center is not classified as one of those 28 listed sources. So it is allowed to emit up to 250 tons per year of, say, for example, SO2 emissions. If it's below 250 tons, it's not considered a major source, therefore be classified as a minor source. That's where I was making the distinction that a minor source is basically not equal to a major source. So with that -- but that is in general what the rule is. However, with the Denin Energy Center being located in a non-attainment area, there are -- that level is ratcheted down quite a bit, depending on the severity of your non-attainment area. At the time of the permit application for the Denin Energy Center, the city of Denton was classified as a serious non-attainment -- serious non- attainment for ozone. So therefore, the limit for being determined whether or not you're a major source was, I believe, 10 tons per year of NOx and/or VOC -- or NOx or VOC, I'm sorry. So that level was severely limited down to 10 tons. And we do have a question. I'm sorry. Yes. So backing off what you just said, would the Denin Energy Center being in a non-attainment area not qualify for this major source permit? It would have not qualified? Is that what you're saying? No, that's not what I'm saying. What I'm saying is the basis of the facility, the way it was designed, allowed for the annual emissions to be below that major source threshold determination level. And so since it was below that major source threshold determination threshold, it was classified as a minor source. So what you're saying is that the Denin Energy Center has the -- what was this -- the special package on it, right, which allows it to become a synthetic minor source rather than a major source? There could be several reasons as to why a facility would be classified as a minor -- as -- not a major source. To get to that distinction, you could do air quality control equipment like this special package, or you could reduce your number of hours of operation as well. And there's other means that you can do that. The definition of a major source is if you emit more than that threshold. But I'm just going to just follow up. I'm trying to understand. So on the major source, 250 pounds -- 250 tons. Tons. Okay. Okay, sorry. There's also pound per hour as well, right? No. No? Okay. Not for NSR permitting purposes, and that's what this is all about. Okay. Yes. Your pound per hour is when we get into what we call the new source performance standards. Okay. So on some of the -- like the COs, some of them can be 250, and then some aren't. And that depends on which is the major source and which is the minor source. Correct? Yes. If a single pollutant is over the 250 tons, then it would be classified as a major source. Okay. Thank you. Yes. Council Member Depp. If the enhanced package that's on deck were not there, would it still stay in the minor source? I have not performed that calculation, so I cannot answer that question. What's your feeling? He just said he can't answer it. Okay. But what I'm hearing you say also is that because it's a nonattainment area, that that benchmark is considerably reduced. So you're saying it went from 250 tons per year down to -- I thought I heard you say 10 tons per year? It may have been 10. I'd have to go back. We have it in the report that we provided. But it's considerable. Considerable, yes. Yes. All right. And for the very reason, because it's a nonattainment area and you don't want to be emitting those type of pollutants into the air in a nonattainment area. Yeah. And to answer the question about what a nonattainment area is, so yes, what it is is the nonattainment area is already classified as the air quality has been significantly deteriorated in that area. Okay. And so that's why it's classified as a nonattainment area. Okay. Yes. Mayor Pro Tem. For clarification purposes, in a nonattainment area, are major sources permitted? Yes, they can be. And what is the process for permitting a major source in a nonattainment area? That process is actually called the new source review non attainment permitting process. And are there hearings associated with that, or how does that work? That process is usually -- they will go through and have to install what we call lowest available emission rates. And so that's basically taken into consideration of what is the technology out there to reduce your emissions. And you do not account for the cost of that technology. So it's called layer, lowest achievable emission rate. You also have to do purchase emission offsets. And those emission offsets have to be within the air shed of where the facility will be located at, or at least within the air shed where it's a nonattainment area. So in your experience in the North Texas ozone nonattain ment area, have there been new sources permitted in the past five or ten years? I do not -- my personal experience, I do not know that. Okay. Another question for you. So this particular permit for DEC was applied for, I believe, in September of 2015 with CCEQ. And then, if I remember correctly, in January, another permit for the Green Valley facility was applied for. And if you're not familiar with this, just let me know. But I find it interesting that both projects were presented to us, and they're both presented as standard permits. However, if you combine the VOCs from both of the projects, they are clearly a major source of pollution because you're getting into the 97, 98 plus tons of VOCs when you put them together. So how common is that to have separated two different projects with two different permits with the idea that they're both going to be run as, you know, not minor sources, essentially? I am not familiar with the other project that you mentioned . However, under the rules, it's not a cumulative addition of additional sources in that area that the TCEQ has to look at. It's on a case-by-case basis. Okay, so you could potentially put one minor source right next to the other mile away, and there's not a cumulative look at it. If they are owned by the same owner, there would be some potential ramifications to that, yes. Like what? That they may not be able to do that. Okay. All right. That helps. But you have to look at ownership and then if the properties are contiguous or not. Okay. Okay. So the de minimis permitting is basically the commission of environment quality has basically said these types of sources, they're really insignificant, and in order to utilize the best effective use of the resources, they basically just said as long as you follow this category that's listed in the rule, you can go ahead and get the de minimis permit, and there's a lot of review by the agency itself. The next category up would be the permit by rule. The commission of environment quality has approximately 100 facility types that they allow to be permitted by rule. Again, these all fall under this minor source, minor modification category. Lastly under the minor source category is the standard permit, and there's approximately 20 different facility types for that, and what the commission of environment quality has done for that is they've kind of grouped similar type facilities into a single type of a standard permit, and so that's why they're listed as a standard permit. Then we get into the major source permitting, and that's where we get into new source review and/or non-attainment new source review. As we have in parentheses, the DEC was issued a permit under the standard permit methodology, and the other facility that we did review was the Red Gate, and that was issued a permit under the new source review permit. This is a similar slide to the other one, except this kind of gives a little bit more of a process flow description of the federal rule and then vice versa, the state rule. So under the Clean Air Act, we do have this thing called the new source review when you're looking at sources that are emitting pollutants. Under that program, you follow either one of two pathways. One pathway is determine whether or not where this facility is located at. Is it located in an attainment area or a non-attainment area? Again, the non-attainment area are those areas that the EPA has developed six criteria pollutants. They developed national ambient air quality standards for those six criteria pollutants, and if you are above those ambient concentrations, if that area is above that concentration, then you would be classified as a non-attainment area. If you are not above those concentration levels, then you would be deemed an attainment area. And so that distinction then is going to categorize what review process you go through under the new source review program. Under the attainment area review, it's typically referred to in the industry standard as a PSD review process, and then that then is also divided into the distinction of either being major or minor. Under TCEQ regulations, the minor permitting process is that de minimis, the permit by rules and the standard permit. Similar to the non-attainment area, the non-attainment area is also divided up into either being major or minor. Again, you have the de minimis and permit by rules and standard permits under the minor pathway, and then you have the non-attainment new source review for any sources that would be a major source in a non-attainment area. As we did the review, the DEC was issued a standard permit. Again, they were in a non-attainment area for ozone, and so the precursors for ozone would be NOx and VOC. And so that technically would have gone under a non-attain ment new source review, and it fell underneath the minor permitting process. And the CO, PM, and SO2 emissions for DEC was under the attainment review process. Again, they were able to fall underneath the standard permit. And then the Red Gate application that we did review, that permit process went through the major prevention of syndicate deterioration review process. Go ahead, Kit. Cast my grace. But that's because one's considered baseload and one's considered peaking, right? The definition of the facility does not determine the classification of the facility. The definition of the classification of the facility is determined by the annual emissions that they will be emitting. Right, but the definition of the facility is determined by how long it's going to run, basically. Correct. Right, so that's what I'm saying. In a roundabout way, yes. Right, so that's the main difference between the Red Gate and the DEC, right? One's considered baseload and one's considered peaking in the permitting process. Correct. Okay. Mayor Pro Tem. Thank you. So with respect to the DEC permits for VOC, our permit, if I remember correctly, accounted for 49.6 tons of VOC out of a maximum number of 50 for a standard permit. How common is it to have applications come in, you know, 0. 4 tons underneath the permit? It's common to have emissions come right up at that cap, under my experience. Okay, so I have another question. As I understand it, once this project goes online, ERCOT has the ability to put it on line as needed, and if it exceeds the - it can do so even exceeding the 3,200-hour operation limit. Is that correct, or what is the situation with ERCOT and the hours of operation? Under the construction permit, and then once they finish construction and through the operating permit, the facility will be limited to the 3,200 hours per engine. If they do go above those, the facility that we require to file a report with the Commission of Environment and Equality stating that they were above their emission limits, and then the Commission of Environment and Equality will make the determination of whether or not they will issue a notice of violation. So how does ERCOT play into that arrangement, I would say? I'm not quite familiar with the arrangements between ERCOT and the Commission of Environment and Equality. Yeah, your question is, can ERCOT require them to run at such a rate that exceeds the permit? Yes, right, which I've been told that yes, they can, so I was wondering. Is there anybody on the panel with the group that knows - and if not, we'll find out the answer to the question. I don't necessarily want to belabor it, but if you know the answer, it would be nice to have it. To my knowledge, they can't operate above the permit, the EPA has given them the operating permit, not ERCOT. We'll find out more specifically the answer to that question. The operating permit is the operating permit. So I can't answer that unequivocally, but that is a permit to operate. All right, thank you. Okay. Oh, I'm sorry, Council Member Duff. You know, I guess the reason that we can't achieve compliance basically in Denton is because where we're located, we're north of Dallas-Fort Worth. That probably has nothing to do with the permitting or anything else, but I have a real difficult time when people keep saying this is going to add to the pollution in Denton, is figuring out how is that going to happen. When that wind is blowing from the south, we get all of that stuff coming from the multiplex, and you know, we're out on the other side of the airport. They don't both come at the same time. That's just the point I'm making. Okay, great. Do you have a question? Go ahead. So I have a question from a constituent that wanted to know if you were permitting this project for us, would you have permitted it the same way? Yes, I would. Okay, thanks. What's off the scope of the project? As a peak. Correct. Okay, with that, I'm going to turn it over to Paulie. Oh yes, I'm sorry. Not a question for you. I was just going to make a comment while you're transitioning between speakers. The non-attainment areas, just so people are aware, those are based on eight hours at a time. And typically what happens in the North Texas non-attain ment area, which is 17 counties, the air will stagnate. And so our red ozone days or our orange ozone days are actually when there's not any wind at all. And that's when you get the highest readings. Only reason I know this is because we go over this every month at the Regional Transportation Council because our highway funding is contingent upon, you know, having actual attainment in this 17 county area. So the wind plays into it, you're right, but it's because the wind stagnates in the summertime and that's when we get our highest readings of volatile organic compounds and ozone. Good afternoon. You guys are rather precious. You guys have done my work for me on this slide by asking us great questions. So I just want to start off by comparing and contrasting the Dent Energy Center and Red Gate. As Councilman Briggs said, one of the main differences is peaking and baseload. Red Gate is a baseload facility. It is allowed to run 24/7, 365, whereas the C is only allowed to run up to 3,200 hours per year. And that's usually just due to the energy demands of the general area. Now, some amounts when air conditions are high, you're going to need some type of energy source. And that is the purpose of a peaking facility. So even though the two facilities employ the same type of engine, the intent and purpose of them are different. And therefore, the permit types are different. They also employ the same type, not the exact same, but the type of control equipment. Selective catalytic reduction is employed on both units. It's commonly termed an SCR. An SCR just basically provides a catalyst that helps promote the reaction of NOx and the reagent, in this case, ammonia or NH3, to reduce the NO x pollution. They also both have oxidation catalysts. An oxidation catalyst is just, again, another catalyst that helps reduce the CO and VOC emissions. Other things that we want to compare between the two facilities are the emission rates. Emission rates are provided by the equipment manufacturers, in this case, Wurzola. And as you can see in this table, highlighted by bold, the red gate facility is higher, sometimes significantly higher, on some pollutants. Significantly, I would like to point out the NOx and the VO Cs. Sulfur emissions are also higher, but that's usually due to the fuel content and fuel type. So even though the two facilities share the same engine and also have the same type of controls, I guess the question next is, how is that possible if they're both the same type of engine and employ the same type of control, then where are the emission factors different? Yes. Question, if you could go back to the last slide, please. Of course. I think I asked this question yesterday or whenever. So I'm looking at this table, and you're comparing the deck with red gate. Yes. Does this take into consideration the number of hours? Is this just based upon one hour of emission? Okay, so it's not one's running 8,760, one's running 3,200. Obviously, one's going to have more emissions. But the standard is the same. Correct. The units are in pounds per million BTU, which is an energy unit. So it's not on per hour tonnage basis cumulatively, it's in satinous rate. Okay, thank you. Very helpful. I appreciate that. Any others? All right. So as the previous slide showed, the Dennern energy center has significantly lower emissions on certain pollutants. So the reason why is that Warzilla is providing an enhanced equipment package for this particular project. Throughout the nation, one area that comes to mind is Southern California. There's very, very tight regulations. So to meet those purposes, Warzilla and other manufacturers provide sort of Cadillacs of their types of design. So for Dennern energy center, there is an enhanced emission package. Basically, the SCR and oxidation catalyst, I don't know the specific extent or reasons because proprietary reasons, but they are higher performing , if you will. Another point that's critical to note is that emissions are always in the make right guarantee. So within any type of contract, there's a plethora of performance guarantees. Manufacturers sometimes can buy themselves out if they don 't meet some of those guarantees. And they could just say, "Hey, here's 500 grand. Sorry, we didn't meet this particular performance guarantee ." But emissions are always make right. They have to provide the manpower and as well as the monetary, the money to provide the necessary fixes and corrections to get the emission limits under what they're permitted to do. So question? Go ahead. Well, if you could just explain that process because... sorry, I'm on medication, I'm sick. I'm pretty okay. So there's the testing process, right? So I've heard it in tons and then I've also heard it in pounds. So when that testing process goes and say, "Where's Zilla's coming in their testing and they're trying to get the emissions to match that permit that were permitted for?" How do they calculate the yearly emissions in that test? Sure. So the permit is actually in pounds per hour. The standard permit was provided in pounds per hour. And it was permitted based on the tons per year, right? But when we do the testing, it will be really in concentrations. And if I go back to the previous slide, for example, if you have pounds per million BTU, a million BTU is an energy input value. So if we measure in the stack a concentration of usually in parts per million, we convert that based on the volume flow rate to a pound rate. And we know how much heat input we have into that. So that's how we get our pounds per million BTU. If we know the million BTU per hour, we can convert the pounds per million BTU to a pounds per hour rate. And that's how we will demonstrate that we've met the permit. Okay. Is that the answer? Yeah. Okay. And is it my understanding that you or your company will be overseeing those testings along with TCEQ and others? Yes, sir. Okay. So the last slide after we talked about MakeGoods was about how we validate emissions. So the federal EPA has written a series of test methods that is used commonly throughout industry to test and then calculate and then ultimately demonstrate what your emissions are. The engines are always ran at the maximum performance to test the engines to their full emissions. And once that's done, a third-party contractor that special izes in these tests is hired to execute them. Black & Veatch will be present right now, specifically me, to oversee the tests to make sure that the tests are done correctly, the apparatus are there. Just like engineers are certified, these stack testers are certified as qualified stack testing individuals or QSTI. So they know these test methods very well. Once the test is actually executed, you have to develop a report. The report is also held to certain requirements by the EPA. And there will be all the QA checks to show that their equipment has been checked, that the data is valid, and that will be there every day to get preliminary test results to make sure everything is working correctly. 60 to 30 days prior to a test, we will notify the TCEQ that we plan to do a test. So they are more than welcome to show up to site and test everything out themselves and look at everything and make sure everything is up to code. We have to do all of this and show that we're within compliance with the emissions before we get an operating permit. Otherwise the station can't really run. It is a make-right guarantee again, so Borzilla and Burns & McDonnell are obligated to get the emissions where they need to be. So with that, I'd like to open up to further questions. With respect to the air quality monitoring, would -- so I'm trying to remember which slide you were on. I think it was slide 13 that had all of the different pollutants. One that I didn't see on there was NH4, which is one of the effects of the catalytic process, ammonia slip. And it's a particulate. It can only be produced in very, very small amounts for human health. So will we be also monitoring the particulate matter output as well? I don't believe ammonia is in the permit, so therefore the plans were not to. And ammonia slip, you're correct, is a pollutant, NH3. Paul, do you have to do a particulate test? We are doing a particulate test, yes. Yeah, if you could come to the microphone because they can 't -- yeah, it's being televised in the camera. We are doing a particulate test, so the ammonia will be included in that particulate. Okay. That would be my main concern is just the particulate because it'll be greater than -- obviously they didn't have to permit for it, but I do recall it being in something that I read, so. Any other questions? Yes, Council Member Barra. So we hired you all because there's been a lack of confidence in the renewable Dinton plan and a lack of confidence and some skepticism about the permitting that happened. And the most recent lack of confidence has been promoted by comparing the Dinton Energy Center to Red Gate, which is why you all are showing those two comparisons. And what I think I'm hearing from you is that the reason that the Dinton Energy Center and Red Gate are different is because of, number one, some enhanced emissions control packages that are being placed on these at the Dinton Energy Center that are not on the Red Gate plant. And the other is that the Red Gate plant is running 24/7 and the Dinton Energy Center is limited in its time. Is that correct? Yes. And the very thing that you let off with was that your analysis of the permitting process is that all of the information provided is accurate and would withstand not only your third-party evaluation but probably fourth-party and fifth- party evaluations if we wanted to continue spending money to do that. Is that correct? Yes. I would like to say, though, that the information provided to us, we weren't able to back check. But the information provided to us, yes. What does that mean? For example, the emission rates given to us that are shown in this slide, while we ask the question, due to proprietary reasons, we weren't given all of the reasons or the calculations behind the emission rates that were developed. So we took, for example, CO at Dinton Energy Center, 0.032 pounds per million BTU. I didn't personally validate that number with the back calculation of heat and mass balances. Will there be an opportunity to validate that number when you actually do the make-good testing? Yes, because this basically correlates ultimately to that pounds per hour limit, the center permit. So we will validate the permit limits. But is there an opportunity for us to validate that 0.032 is correct? No. But we will validate that the emissions are below. So the testing that you will be doing would not tell us whether that's accurate or not? Okay. It will validate that the emissions are going to be below it. Okay. The below the permit limits. And therefore, generally speaking, yes, it will validate the emissions. But -- Okay. Can I -- Go ahead. So the testing is going to validate the guarantees. Okay. And it's going to validate that the plant meets its permit limits. And if it doesn't validate, then they have to continue tuning, adding whatever types of engineering modifications that they need to in order to achieve those goals that they have promised us in their contract. Right. Yes, that is true. Okay. They will have to keep working on it until they fix it. Okay. I think what Paul was getting at is because these are guarantees, he can't get into the mind of Warzilla to know how he -- how we got these guarantees. And that was his point. So -- but, yes. We're going to be able to test this unit and prove it meets its emissions. And we have every confidence that they're going to be able to meet them. And if I may go -- Sure. In the news in the past year or so, we've heard of a German automobile company that somehow rigged their vehicles and their -- the computers in their vehicles so that they could cheat and what the emissions that they said that they were getting is not really what they were getting. Does this technology have a way of doing that kind of cheating or is your third-party testing going to assure that there's not opportunity for shenan igans? So that's a really good question. Thank you for asking that. Thank you for telling me I'm going to get that. So there's a really big difference between how the auto industry does their testing and how the utility industry does their testing. The big difference is that the auto industry self-tests. So they do -- they run their tests on a system inside their facility, and they're running their own tests. And this test is done by a third party. That party has no obligation to the plant. That test has -- receives their certification from the EPA. They have to follow the EPA test methods that are laid out in 40 CFR 60. And those methods are pretty well-established methods. And in fact, those methods are often used by other countries because they don't have their own test methods. That's how rigorous they are. There are also very specific rules about the load you have to be at. You have to be above full load operation to be able to pass the test. And so -- and the companies that do those tests receive their certifications from the EPA. And the other thing that they have to do is they have to calibrate their instruments with what are called protocol gases that are also provided by another company that is -- has to go through a certification process to certify that their gases are in accordance with EPA methods. They have to certify their instruments using a set of protocol gases that they buy from another company. And then they come on site. They have to prove that their instruments are certified and calibrated. They have to submit their calibration data as part of the test results. And then they have to do the test methods using these very specific methods. And then the -- we have to provide plant data proving that the unit was above 90% load operation during the test. And then all the calculation results have to be submitted as part of the test protocol. And then that's submitted to the TCEQ for review. And until they're satisfied with the results, the unit doesn't get its operating permit. So it's a significantly different process -- >> Of course. >> -- than what the automobile industry goes through. >> Thank you very much. >> So you just said that all units, all 12 engines will be running at full blast when this testing occurs. >> Well, I think it's each unit. Is it each unit individually? >> That might not be correct. We will be doing multiple units at a time, but not all 12 will be operating at the same time. But each unit does have a pound per hour limit that we have to test for. >> You have to test each unit. >> Yeah. >> And all will be tested at the same time, just because that would be too much manpower right now. >> Yeah. So it's not required. Any other questions? All right. Any other parts of the presentation? Okay. Okay. Thank you all very much. Appreciate it. >> Thank you. >> Mayor and council, I did have just a couple more slides for you regarding some additional studies that we've had some interest from the council in doing. So I wanted to show you what we think a preliminary scope of these might look like, some considerations that you need to understand and potential cost and get direction from you of how to proceed. The first of these that we've had some questions about is the health impact assessment. That would take a look at the positive and negative public health impacts of the deck facility. Major steps would include trying to identify what are the health risks and benefits, quantifying those impacts to the population and making recommendations as needed. It's important to point out that the HIA, as it's called, is voluntary. It's usually voluntary. So there's no regulatory requirement to have this kind of assessment. So I think one of the considerations for the council would be what would be the purpose of the study, what would you want to be doing with the study and how it would be done. Looking at some preliminary numbers, we've worked with Black and Veitch. We think the cost for a study of this type might be around 130,000. That would certainly depend on the scope that you'd want to look at. But we're looking for some direction of if you want to proceed with that study. I do have one other to look at with you as well, the climate impact analysis. This would examine the climate impact of the Denton Energy Center versus purchasing market electricity, so other types of contracts we might be able to have for power, whether it be coal or renewables or other natural gas-fired power, what would be the impact of that. And really basically looking at the life cycle of taking the fuel from the ground, in this case natural gas, transporting it to Denton, burning the fuel to make power, and trying to estimate what's the carbon dioxide equivalents that are being released in the atmosphere from that versus other power sources. That would be a climate cycle analysis. This could be similar to the, if you may recall, there was a study done, I believe by Dr. Banks, looking at CNG vehicles versus biodiesel vehicles and the emissions from that. We could use a similar, perhaps use a similar methodology to that study. That may be applicable to the deck. We're not really sure if that would work or not. If that would work, we think the cost would be somewhere in the neighborhood of $30,000 to do some type of study like that. If it wasn't an applicable study, we would have to develop a different type of methodology. The cost would be substantially higher. So those are the two studies, very high level of detail, and we're looking for some feedback from the council if you want us to proceed with those studies. And if you do, what exact scope would be included. Council Member Riggs? Well, I am in favor of both of these studies. I know the health impact was actually a call from the citizens during the process. They wanted to know exactly what the impacts would be to their health having this energy center here in the city. And I think it's important to know that. And also climate impact analysis for me is very important going forward, especially when we're trying to decide market run. I think it would be good information for us to have. Okay. Thank you. Anyone else? Council Member Ryan? I have to kind of question the second one from the standpoint of, you know, the horse is already out of the barn. We've already put the deck in place. And if we're looking at it from do we purchase or run it, my understanding is ERCOT determines when we're going to run that. So I don't really see, unless there's further information than what's up on the screen, whether this study would do us any good. Okay. Yes. Council Member Gregory? Well, I'm not clear about what we do with the information from either of the studies. So I would want some help. We've done some significant studies so far. We just had a report. How much did the study that we just received, how much did that cost? Approximately $100,000. How much did the study on the energy management operation savings cost us? Over $200,000. And it verified that we're getting savings, right? And we did a study on the renewable debt and plan to begin with. How much did that cost us? Right around $200,000. So we're studying this thing to death. Rate payers are paying a lot of money for these studies. And I don't mind having studies if they assure us that we 're getting what we said we're getting. But what happens if the study comes back? What do we do with the information? Maybe you can help or maybe our council member. I think that's a consideration for the council of what would be the purpose of both of the studies and what would you want to do with the information. And that's one of the reasons I want to bring it today is to have that conversation for the group. Council Member Duff and then Mayor Pro Tem. Frankly I think this is a total waste of money and I would not be doing either one of them. Mayor Pro Tem. I mean I think it's important when we're speaking about the results of studies to be very clear about what the results of studies are. So I have a problem when people say, people being Council man Gregory, the EMO study showed that we're saving money. DME presented the EMO as saving $13 million a year. That's the number that they told us this EMO was worth. And because of the study we know that that's not even in the ballpark of what the EMO saves us. If somebody correct me I believe it was $6 million was the maximum. So that is a $6 million discrepancy in the accounting. And to stand up here and say, oh well the study told us that the EMO is saving us money. The study told us that DME overestimated $6 million of savings. That's a pretty big overestimation and I want to be really clear that's what the study told us. It's not that we're saving money. Mayor. Yes. I think what I heard in the report was that if the study said that using the calculations that DME used were reasonable. Those were reasonable calculations to use. They then said that they would have used different calculations. They said that the calculations were reasonable because it was based on an estimate of what it would cost if we hired out that EMO function. They said that they thought that we could possibly get that function for less money and therefore that the savings would be less. You're right that they gave us an alternate for what the savings would be. But they also said that the calculations and the assumptions used by DME to calculate those were reasonable assumptions to make. And that was one of the questions that we asked. Is this a reasonable thing to calculate? And they said yes. They said they think that there were better assumptions to use. The savings would be less. The savings were still significant. I think a $6 million savings a year is a significant savings. It's certainly not $14 million but it's significant. And I said that I didn't mind that study. I'm just concerned about how many studies we're going to do and what we can do with the information that we get. I share that concern. So that's the only question that I ask is what we're going to do with the information. I share that. I just wanted to clarify because the EMO, I walked away from the EMO study with a different perspective about what that study meant. And I wanted to be clear about what it said. So I'm not in favor of either of these studies. These would have been great in 2015 when the data could have been used by the public and by the council to make a good decision. We didn't make a good decision. We didn't have the data. So I'm not in favor of spending more money on our bad decision. Well the great thing about sometimes, two people are right even though they see it differently. You're right. The study did show that it might have been a savings of $6 million from $13 million to $16 million. Absolutely. The study did show that it's still a savings. It's just not the amount of savings that we thought it was. And my concern with these studies is because they're narrow ly tailored to the deck. If we want to do a health impact analysis, let's do it on the entire city. Let's do it on what's coming across our borders with the increase in population, with the increase in the road traffic, with the airport, with all the things that I remember we received a chart of what the air quality is made up of as far as what's created within our city, what's being imported from across our border. So I don't want to, I wouldn't want to limit it to just what is this doing because we might have things going on in our city that we have no control over that are contributing a much larger impact to the health of our community. So if we are able to do that, can I ask Dr. Banks a question? Of course. Can I ask you a question real quick? I hate to drag you into this. I want to talk about mosquitoes. That's great. I'll be happy to do so. I'm teasing. Season's over, everything's great. Fantastic. So correct me if I'm wrong because I remember one time you presented a chart that was sourced from either someone at UNT or somewhere there was a source of our air quality out at the monitor at the airport of what those pollutants consisted of as far as their source. Am I remembering that correctly? That's correct. I believe that the chart that you're referring to is actually a presentation that was given to the Council of Governments by the TCEQ and they had partitioned out components of emissions that were related to particular sources, if I understand what you're asking. And those particular sources, examples are the airport, traffic outside of Denton, transportation, oil and gas, just different series of categories. Correct. Okay. All right. I appreciate that. Thank you. So as far as the engineering cost on the, go back to that. I don't know if I'd be in favor of that, to get away from, to move beyond Mayor Pro Tim's very keen observation that, okay, well, if we do a climate impact analysis just on the deck, that doesn't mean we're not analyzing it based upon the price of energy. In other words, it's just, okay, what is this? But if we could expand that to say, okay, well, what is the effect of just the overall condition of our air and its sources, you know, but it's probably going to drive that cost up considerably. So that's what I struggle with. I just don't want to sort of pull out something and draw a little dot around it because what does that mean? Does that mean that we don't run the plant? So if energy is at $50 a megawatt hour and we're producing it at $20 an hour, do we not run it? It's a whole policy discussion. So I would rather truly understand the impact of our overall health of the entire comprehensive look at the climate than just because how many cars does it take to come in to equal that type of impact? Yes. I don't know. What I'm thinking about is, you know, we talk about pollut ants coming from deck. You know, how significant is that compared to what blows in from the multiple dollars foot worth? I mean, my feeling is we're talking about something that's pretty small compared to the overall. And you know, if anybody has any answers to that, you know, what kind of percentages are we talking about? You know, we may be talking about something that's very tiny out there. It's, you know, running deck. Mary Pro Tem. I think what I'd like to see once deck goes online is more transparency about its operations. So if it's running, I would like the public to be able to see that and, you know, we can actually see what times we have an idea of when deck is going to run. It's going to be during August, July, you know, high. We're already going to be at orange ozone days when it runs basically. So if we can put that online and perhaps put a link to North Texas COGS air quality monitor, there's a map. I mean, a lot of this stuff has already been done by the North Texas Council of Governments as far as air quality monitoring. The data's out there, but if we can kind of direct our people or at least have a link or something where people can become educated, there might be a time for the climate impact analysis, but I would think that it's not during the first year of operation. I could see that being useful later on. I mean, it would have been really useful in 2015, but going forward, we kind of need to know how the deck is going to run and we don't really know yet. We could certainly do that. Any other comments, questions? Well, the Committee on Environment received a report on greenhouse gas inventory last week. I think as we move forward, what we're told was that with next year, the deck would be included in what the greenhouse gas inventory for both within the city, the municipality, and the city as a whole. I think that's something even staff could put together fairly quick to just include in some backup for us to see how big of an impact it is because I was surprised to see how big an impact solid waste had on our greenhouse gas inventory. Council Member Briggs? So, on the health impact study, my original request was made from citizens during the process and you're right, it would have been great to have. I believe we asked for it during that process and for some reason it didn't get through. So I asked for it again and mostly it's because we have a lot of sensitivities in our population. There's a lot of children with asthma. Health impact study could come out and allow people to know what to expect, give them a chance to move out of our city if it's going to harm them in any way. But I'm okay with waiting on that. I guess I'm the only one here that's for either one of these, so I guess I'm going to have to be. But transparency of the deck running is good and allowing our citizens to know what toxins we're putting in the air and when is going to be really important. Okay. Council Member Duff? I'd just like to comment on, you know, as far as the savings that DEC is going to create, you know, the estimates are all fine and all that. You know, the real truth is nobody knows what those actuals are going to be because there are absolutely too many variables to actually play in and really get an accurate number. We're going to -- it's going to happen, so we're going to find out what it's going to be. Yeah. So it sounds like the direction is to maybe wait on these studies until the DEC is up and operational and we put in some processes of transparency based upon, you know, the time running and things such as that. And then is that what I'm understanding? I know, Council Member Briggs, that you would want the HIA. I think we can work with the Committee on the Environment, bring some information back, look at the format of that and then bring that back to the full council at some point with a proposal of how that would be done. Yes, Council Member Grady? Well, and the other thing is we need to know when the next regional air quality study is done because we got a great deal of very useful information from that. Dr. Banks presented most of that. That was done -- I think it was done by a professor at the University of North Texas, but it was commissioned, I think, for a regional basis. And I suspect that there will be a schedule for that to happen again. And so that may be done getting the information that Council Member Briggs wants. And because it's a regional thing, you know, the city's participation should be a part of it, but certainly would not be the only entity that would be participating because we are in an air shed just like we are in a watershed, and what happens here impacts it, but what happens upwind from us impacts it also. Okay. You know, one last comment sort of to dovetail on Council Member Doefe. You know, two years ago we looked at this. Obviously we see that there was some data that we could have had, but also some of the numbers have changed. I mean, even if we had perfect data, prices have gone down. Global energy has gone down. And it's already known that next year there may be 2,000 to 3,000 megawatts at least of coal fire generation that is taken offline in the Urquhart grid because it's just not sustainable economically. I mean, those announcements have already been made. So when you start talking about those kind of numbers between supply and demand, you just don't know exactly what's going to happen. And some of these things we can forecast with some kind of certainty. Some of them we don't know, we just have to use that best information that we can gather at the time. So time changes a lot of things. Yes, Council Member Doefe. Yeah. And you know, as far as natural gas, does anybody know what it's going to be two years, three years from now? If they tell you that, I won't believe them. And that's a big factor as far as DEC. Sure. Any other questions for this presentation? All right. Seeing none, thank you very much. We will take about a five or 10 minute break. Come back and resume our agenda. All right. Welcome everybody back to this meeting of the Denton City Council at what time is it? 2.07 p.m. on Tuesday, November the 14th, 2017. We'll move on to our next agenda item, which is agenda item 3C, receive a report and hold discussion, give staff direction regarding the credit and collection policy of the city utility system. Thank you. Good afternoon, Mayor, Council, City Manager. I'm Tiffany Thompson, the customer service manager. And today I'm doing a follow up presentation in regards to credit collections. So a little bit of background. In November of 2010, we did do an ordinance update to update our credit and collection policies. This was due to the high amount of bad debt that we had. It was upwards of 1.4 million. And the contributing factors to that was ineffective collection policies, inadequate deposit, and on the accounts. And then also we didn't have proper credit screening for our customers. And so since that time, we've decreased our debt. And for '15-'16, it's down to $536,000. And so last month we came and gave an update on the policies. And today we're doing follow up information and seeking your direction. So the focus areas for today is going to be on the meter and billing cycles, some of the survey comparisons that we did, how we do fair credit scoring, an overview of our fees, reviewing the deposit options and seeking direction on that , and then additional funding to the PLUS One program. So for the meter and billing cycles, Dent municipal electric does utilize advanced metering infrastructure, AMI meters. And so 47% of the meters that are deployed do have remote reads and are able to get two-way communication. The other 53% of the meters out there are AMI disconnect meters. And in addition to the remote reads and two-way communication, they can do a remote connection and disconnection of service. For all of our water meters, those do have to be physically read out into the field each and every month for our customers. So we do have our cycles broken out into 21 cycles throughout the city. And this helps us have a distribution of workload for the field workers and for the customer service staff that bills on a daily basis. Again, they're having to collect those water reads manually . And also allows us to be able to respond to our customer requests as they come in throughout the month. I believe there was a question about changing our billing cycles and due dates and payment arrangements to the 1st or the 15th. And we have it set up throughout the month in order for us to be able to, again, have that distribution of workload and because we have those manual reads on water. We do have additional flexibility for our payments, specifically with the new implementation of our new payment portal where you can go in there and schedule a payment for whatever day works best for you. And also we have programs such as budget billing and then automatic draft as well on a credit card or a checking account. And so some of the survey comparisons that we did for this presentation are eight other comparable cities and you're going to see that data throughout this presentation. I just wanted to give you an illustration of what those cities are. So for compliance and credit scores, the city does utilize a vendor. Our online utility exchange to help us make sure that we are compliant. It gives us additional ID verification and then a credit risk assessment for our customers. We do have to be compliant, meaning when a customer comes into the utility system, we do have to verify their social security number and IDs to make sure that we're mitigating any type of fraud or ID theft with that. So in addition, they're giving us that credit assessment so we know do we need to charge a deposit to the customer or what deposit would be applicable to them. And that credit assessment is based off of a vantage score and not a FICO score. And what the vantage score is, is it's data from all three credit rating agencies, Equifax, TransUnion and Experian that gives a score based off of recent credit payment history, utilization of debt that they have and then also just credit balances. The reason why we use this vantage score and not a FICO score is if we were to pull the FICO score, it would be a hard pull on their credit report. And so that would have an adverse impact on them. And then it also would cost up to $10 for every pull that we did on that. With the vantage score, it's a soft credit pull, meaning it does not hit their credit report. They don't even see it on there and it's much more cost effective. And any customer that we do ask for a deposit does receive that adverse letter letting them know about the score and how they can contact to get additional information on that. And so the data that we collected from the surveys is 33% do use a credit scoring module like we do and they have options to waive the deposit. 45% does not have the credit scoring but does have an option to waive the deposit. And then 22% of the surveyed cities do not do the credit scoring but they charge a mandatory deposit meaning even if you have good credit history, you have to pay a deposit. Yes, sir. Yes, Councilman Gregory. Thank you, ma'am. I don't believe that this is in an upcoming slide otherwise I wouldn't interrupt right now but there's been a question about if a person feels like that they want to challenge their rating from the city. Is there a way to do that? We do provide that adverse letter and we go into the explanation what the score is coming up with. We do give them options to waive the deposit even if that credit scoring comes back. As such with the letter of credit, the cosigner form or if they wanted to go on draft they could waive the deposit. And so we do direct them to that because we're not the adverse letter because we're not able to get into that specific data of what compiled that score for them with it. So if I had a lower score and I was going to need to put down a deposit that was rather high, I could avoid that. If I had a banking account and I agreed for you all to do a bank draft to get that and I wouldn't have to pay a deposit. No, that is correct. If I did not have a banking account for you to draft, what would be the next? Could you draft my do an automatic ding on my credit card? Yes, we do offer the option to do either the checking account like you mentioned or also a credit or a debit card. Either one of those would allow me to forgo the deposit. Yes, and that's one of the things that we found through the survey research is that City of Denton actually offers the most amount of options to be able to waive a deposit where most cities only have one which is the letter of credit. City of Denton has the letter of credit, the cosigner form and then this option we just discussed with going on draft. Cosigner form would probably be used most often by university students? Yes, it does have to be someone else that's living in the utility system so you do have the mom and dad or it could be a family member but it isn't tied directly to family. If you just have a good friend that you want to help out, then they can actually cosign form. They do have to be in the utility system because if ultimately that person they cosign form doesn't pay, they would be responsible for the debt. And there are some people that do not understand what a letter of credit is. Okay, great question. Letter of credit is if you had a prior utility, you can ask them for what their balance history or their payment history and utilities will provide that. We provide that to many of our customers moving out of the utility system, letting them know that they had satisfactory payment history with us and we could probably expect that from that customer as well. So as long as they're able to provide that from the previous utility, we would waive that and we provide that for our customers as well moving out. Thank you. One thing I also want to, oh. Yes. And so that's all just for the initial deposit, right? That's just for getting the connection, the initial connection to the utility. The options to waive it. So whenever we do the additional deposit based off of customer's payment history, if they will agree to go on draft, we've waived it for them as well on that to say, okay, if you'll go on draft and make sure we're getting your payments on a timely basis, then we can waive the deposit with that. So we have a lot of customers who have done that and have maintained that as well because they don't want to pay the deposit, but they're like, okay, I can do that. So set up that option. And I missed it a while ago. You were going over the pie chart, the 45% no credit scoring. Is that of the cities? That's of the eight cities that we surveyed. They don't utilize the credit scoring, but they have an option to waive the deposit. And I'm glad you brought that up because when we had a larger sampling of this, actually 64% of utilities use credit scoring, but for the purpose of this presentation, we had a smaller sampling size with that. So the common practice is to use the credit scoring to determine deposits. Thank you. So an overview of our fees. One of the things throughout the survey comparisons that we found is that the city's fee structures are highly variable with that. So what we found is city of Denton to be right there in the middle with our fees. Late payments, 100% of the city's survey do charge a late payment on their accounts and two of the cities don't even offer the option to have same day reconnection of services so they don't have fees because that's not an option for them. And 86% of the city's utilities customers actually pay on an on time basis right now. That's for us. And since 2010, our delinquent accounts have dropped by 34 %. We wanted to give you an overview of what other cities are charging for their fees. Yeah, we have a question. On that slide. On this slide? The past slide. A lot of the late payments I recall during the discussion were late payments of businesses, commercial accounts. And when we instituted that, the late payments dropped considerably. Is that correct? Yeah, when we implemented the late payment charge in 2011, it increased from $10 to $20. We saw a decrease month to month by 29%. And we've maintained that since. The reconnect fee. It seems to me that that was at one point it was based on the fact that it meant that a person had come out to a house and had flipped something and put a red tag on it and a wire on it. At least that's what they did to our house when we missed a payment back in the '80s. And we went back, we ran down that afternoon and paid it because we had a birthday party for our kids that night. It was going to be embarrassing to do that in the dark. So they came back out and un-clipped it and turned it back on. But there was a lot of staff time involved in going out, cutting it off, going back out and turning it back on. That's not really the case now, is it, in terms of disconnect and reconnect? If the account or the address has that AMI disconnect meter on it, it can be done remotely with that. 53% of the accounts have that AMI disconnect meter on that. So they may not have to physically go out to that location with that. So does that answer your question? So that means that it would be done by someone at a computer terminal. They're getting on a laptop, making sure that they have a proper signal, going there, collecting the read, turning it back on and making sure that they get data back with that. And one of the things, to your point about staff response time on that, is customer service is working with DME now to be able to take over a piece of that function for the reconnection. So we can actually enhance the customer's experience when they call in to say, "I've been disconnected for non-payment." We'll take that payment and our staff internally, if it's an AMI disconnect meter, is going to work to actually do that process. So we're going to be able to get them reconnected sooner than right now. So that's something that we're working on now to get them a quicker response time on that. I'm just asking that question because it would seem that we might be able to reduce those fees if our costs are not really as high as those fees are suggesting. And then the AMI meters, I thought that we had switched over so that all of the homes had smart meters now. Is that different from an AMI meter? Yeah, so there's the AMI meter that has the two-way communication and then there's the AMI disconnect meter, which gives you that capability and the ability to be able to reconnect and disconnect remotely. If the DME is going out to do service at that address and it's not an AMI disconnect meter, they're replacing those meters. So as they're working just organically out in the field, they're replacing those meters. Okay, you anticipated the next question. Thank you, Mayor. Thank you. Yes. So for our deposit usage, 21% of our customer base does have security deposits on the account. And I wanted to talk a little bit about why we secure deposits on the account. We are in a post-paid environment. And so if a customer is disconnected for non-payment or they leave the utility system, they could have upwards of two and a half months worth of billing on their account. And the most deposit that we're seeking is up to two months of usage. 44% of the cities that we surveyed do have that up to the two-month average like we do. And we're also seeing an increase in customers leaving the utility system without formally contacting us. So they're just letting the power go off and we're not getting proper forwarding addresses. And so we saw a 9% increase in that last fiscal year. So that's another reason why it's important to make sure we have proper coverage on the account with that new trend. And then data for '16-'17, the deposit usage. We had about 5,700 final accounts that held deposits. Out of those, 54% of them, their balance, their entire final balance was paid with that deposit. And then 46% of them still had an amount owing after the deposit. We don't know the final if it turned into uncollectible debt because we don't deem debt uncollectible until 180 days. So we don't have that yet. But we do have '15-'16. We had about 5,500 accounts that had deposits when they finaled. 53% of them, their final balance was paid. And then 47% of them still had the amount owing after the deposit. And what ultimately happened is 23% total ended up leaving a balance that turned into uncollectible debt. And we have data for the previous two fiscal years and we were seeing a trend of about 25%. So that's consistent. About 25% of our customers that have deposits on the account when it finals are going to leave a bad debt is what we're seeing right now. So the next two slides are when we get to the end of the presentation, we're going to open it up for discussion to get to seek direction. In regards to plus one for fiscal year '16-'17, we assisted 231 families for a total of a little over $80,000. Our contract with interfaith ministries does expire next month. We have a six-month extension that we've already gone into in order to incorporate PUB and council's feedback into that contract specifications. Six out of the eight cities that we surveyed have a similar assistance program like the plus one program. And so some of the criteria that we are recommending to be changed or updated in consideration for council is right now the plus one funds can only go to balances. They can go to current balance. They can go to past two balance. But they cannot be allocated to any type of deposit. And so that's up for discussion now if we want to allow those funds to be utilized for deposits. And the additional criteria that we're recommending is a requirement for the vendor to establish written program guidelines that the city would approve on a yearly basis because things change in the community, needs changes. So we want to make sure that we have a good temperature reading on a yearly basis of what the need is. And then we need to gain richer data with our monthly reporting as far as understanding the barriers that our customers are facing. We're not getting that data now. And so we think that we'll be able to make better decisions with richer data. And then additional training of staff and also the vendor to make sure that they understand the authority in being able to assist customers. And then assisting customers regardless of the tenure at the address. Right now we have that six month verbiage in the contract. We think that we could take that out to make sure that we can help a customer as soon as they come into the utility system. And then right now we do have verbiage about helping a customer once in a 12 month period. We think that's something that is up for discussion today. I have up to three times, but that's definitely up to your direction what you would like to do. Councilmember Gregory has a question. Thank you, Mayor. The $80,000 at the top of this slide, that's what happened in '16-'17. Yes, sir. But my memory is that the council at least at one point authorized up to $100,000. The total of the allocation is $100,000. And with the contract, $14,000 of that goes to administrative costs for interfaith. And then the $86,000 goes to distribution of funds. So last year, what you're probably getting at is interfaith didn't use all of those funds. And we think that an influencer of that is based off of some of the criteria that we think we can loosen up in order to be able to assist more families. So we have a little bit of room within the $100,000. Currently, right now, yes. And if we decided to change some of the criteria, it might be advisable for us to consider increasing from $100,000 to $110,000, $120,000, because if a family can use it more than once a year, they indeed might. Yes, absolutely. Okay, thank you. Mayor Pro Tem. So does the vendor take 20% of the total available money, or do they take 20% of the distributed money? Their contract is $14,000 flat in the contract. So they haven't broken out what that $14,000 is used for. It doesn't go any more or less. Okay, so if we were to increase the amount of money that we put in this, would their contract still be $14,000? Whenever we go out for a competitive bid, I would anticipate that might change, because if they're able to, if they have more funds, they may be seeing more families, and that may take more time of them to be able to assist those families. So I think it would depend on what bids we got back as far as what those individual vendors who put in for the bid would charge us for that. That's just the $14,000 is just what the awarded vendor charged us with that. So that's up to whatever happens when we go back out. Do we know how much it would cost to administer it in-house ? If we did that in-house? I don't know the cost off the top of my head in-house, but one of the things when I talked with Interfaith Ministries, they spend upwards of 45 minutes to an hour with each person, whether they get approved or not. And they're also collecting a lot of sensitive data that we may not want to be privy to as city staff. And then also with Interfaith Ministries and any help organization, I think they're offering them a suite of resources with that. So usually it isn't a singular need that they have as far as utility assistance. So that's why we've pushed that to, or advocated that it be an outside contract for them to also get the additional resources that they need. Well, I'm just, I'll give my direction now. I'm in favor of increasing the amount of the plus one program. And I'm also in favor of the changes that are outlined on this particular slide. Okay. Thank you. Council Member Briggs. On that 14,000, so the assumption is that if we increase the amount of money, then that administration costs would go up. But you said that administration cost has not been defined for us and broken out into what that covers? Yeah, we do have it. I do have it broken out. I don't have it here, but we have exactly what the overhead is, the supplies. And they put that whenever we did their request for proposal, they said this is how the admin costs are broken out. But I think it's a very timely discussion with that contract being up with what their administrative costs may change to. I just don't know what that is with the additional funding. It would depend on the vendor. But they still charge us 14,000 even though they don't allocate all the funds and spend all the money. Yes. That's a good question. It's the same amount of admin costs regardless of how many families ended up getting served. They're still spending that resources or time with those people coming in to seek assistance. Which, that doesn't seem, I mean, we couldn't do it for $14 ,000, but that's just me. Okay, go ahead. So after last month's discussion, we did want to come back and provide some options, potential options if the deposit policies did want to be changed. And so these are the options. And one of the things I wanted to note is for residential customers and also we would continue the credit screening. That way if a customer coming in, we don't need to charge a deposit. That would remain the same. If they have good credit history, we don't charge a deposit . But for option number one, we would charge a deposit equal to one month's average of the utility bill whenever they're coming into the utility system. Unless if they're fair or at risk, we would only ask for a one month deposit at that time. As they establish their tenure and we do the assessments, or if they get disconnected for non-payment, then we would seek that additional up to two months worth of usage deposit. Option number two would be the same, charge a one month deposit when they're coming into the utility system. And as they establish their tenure or if they're disconnected for non-payment and it warrants that we need to increase the deposit, we would only do that in $50 increments versus the entire two month deposit. And so the $50 increments would eventually go up to the two month worth of usage if it warrants that. And then option number three would be only charge a one month deposit and then there is no additional increases after that. And option number four would have no changes to the deposit process and continue with the payment arrangements that we offer now. >> So you've got two slides left. >> I have two slides left. >> Do you have a question on this? >> I'm going to have a discussion about it. >> So currently, if you have to add to the deposit because of a non-payment, don't you at times work with the customer and not make them pay that entire thing at the same time? You're talking option two shows $50 a month increments until they reach that. But isn't that almost a practice anyway? >> Yeah, for our customers coming in new to the utility system and our existing customers that may get an additional deposit assessment, the deposit payment arrangement is an option in both of those scenarios. And last fiscal year we extended about 3100 deposit payment arrangements for that. So we do have that option for either one new or existing for the customer. >> Of those 3100 payment options that you offered, how many of them were able to work with that? >> We have about a 72% success rate with our payment arrangements that we offer. And so I think the other 6% ended up getting voided. They didn't need it. They paid it off early. And then the remaining are the ones that defaulted. >> I wish my favorite college football team had a 72% success rate. I just have a lot to say, but I can help out. >> So while we were vetting out the deposit options, we thought it was a very timely discussion to potentially identify an additional need that's going on in the community, especially with the recent approval of the emergency solutions grant. And so we're wanting to bring forward an option to waive deposits for people experiencing homelessness. The only other deposit waiver that we have right now in the city ordinance is victims of family violence. And we work with friends of the family. So if someone's experiencing a situation and they've gone with friends of the family, they will provide a form letter to us letting us know that this customer is experiencing this. And we waive the deposits for that. And so we think that this could work much like that. The customers that are working with the different help agencies on being rehomed or experiencing homelessness could provide that form letter to us and we could waive the deposit much like we do for their friends of the family. So we want to incorporate that into the discussion today if that's something that you wanted to move forward with. And we collaborated with community development on this as well to make sure that we understand how we could make that work. So with that, the staff is seeking direction today on the plus one program and the deposits. So for the plus one program, do you want to increase funds? Do you want to allow the funds to be able to be utilized towards the deposits? And do you want to incorporate the guidelines that we spoke about? And then for deposits, do you want to move forward with the homelessness deposit waiver? If you want to change the deposit, what option would you like to move forward with? And then wanted to let you know after yesterday's discussions with PUB what their recommendations were was to increase funds by $25,000 to interfaith. One of the reasons why they chose $25,000 is staff had spoken with interfaith ministries to say if we wanted to increase funds and we changed the criteria, what do you think would be an appropriate amount to start with? And they had said $25,000. And then also potentially putting in an amendment in the new contract saying that we could change that amount as needed based off of needs, especially with being able to get richer data to be able to make that a proper determination for that. And so the contract amendment was also suggested. And then moving forward with the homelessness deposit and then option number four for deposits is what was recommended from the PUB yesterday. And with that, I'd be happy to get your direction. Well, I believe that our policy, the way that we give deposits is an unfair practice. I think that the low income end up paying a higher deposit than those with good credit score who can obviously pay. And I'm not in favor and I can in good conscience continue to vote for nothing to change in the process. I think we have a lot to work with and we can do better. So that's where I stand on that. And I feel like the plus one, I think allowing it to go towards deposits is good and increasing it is good. But I also think that if we eliminate some of our practices on the way that we charge deposits, those funds won't need to be increased. I mean, I think we're just kind of keeping the problem in place and just kind of putting more money onto it. I mean, I see every day somebody with a situation, a mother reaching out asking about which payday loans places she can go to that aren't going to have a lot of interest so that she can pay her bill. Like I just, I think that we are putting difficult choices on our families and I want to be able to change that. On the credit checks that we do, do we get just a score only or do we get just a pass/fail or is it a full sheet of history? So we get this on the new credit scores, something that will come up good, fair or high risk. And so this is actually how our percentages are broke down with that. And that lets us know if it's good, we do not charge a deposit. So 41% of our customers, we don't charge a deposit. The 29% were asking for a one month deposit and then the 30 % were asking for a high risk. So it's just giving us that good, fair, yes, yes. It's not giving us that score. That score comes out on the adverse letter and we get that emailed or mailed out to the customer. Okay. Council Member Gregory? If you would go to the slide with the PUB recommendation, please. I would support the PUB recommendation but also suggest that we look at adjusting our reconnect/disconnect fees. On the reconnect and you said reconnect in the language? That disconnect/reconnect. Okay. So for somebody who's been a customer but they got disconnected because of it. I think we can incorporate that into a cost of service study. They told me to look at them if I needed help so that's what I'm doing right now. That's when Chuck and I look at each other. So I think I want to make sure I understand the question. So the reconnect fees, we had provided some information about what that fee is that we charge to reconnect customers and what we think our costs are in some of the supplementary information that we had. So if you're looking at that fee, then we can certainly look at that in the cost of service analysis to see how that would work. Right now we think the cost to provide that service is higher than the fee that we're charging. Is that the question? Oh really? Yes, sir. Okay. I take that back. I just recommended the PUB. I would support the PUB recommendations. Okay. Thank you. Did we ever find out how much staff time it takes to kind of go after all of the delinquencies and all that? Yes. We drill down to specifically on delinquencies based off of your question and it's 19% of our staff time is dedicated to the accounts that we're speaking of today. So do we know what that amounts to in terms of a dollar amount? It's 378,000. We have one dedicated staff. I do want to know, we have one dedicated staff that's a credit and collection specialist. So she's doing everything. She's sending out those friendly reminder calls. She's screening the accounts. So we have a dedicated person that's just for credit collections and then the rest of it is our customer service representatives that are field ing those interactions and phone calls. And that's 378,000 is all in cost. That's benefits and everything. Okay. I think that's the right way to account for it. So our total delinquencies are 424,000. Is that right? Total delinquencies. Oh, 500. Oh, yes. 536,000. Okay. I guess, I don't know why I see 423 missing something. So it's 526,000 in total delinquencies. Yes, ma'am. And do we know of the total delinquencies, how much of that breaks down to the deposit part of it versus the actual delinquent payments? Because I know the deposits can be delinquent as well. That 536,000, that is ultimately uncollectible debt. So that's going to be after everything's refunded to the account and it goes into that write off status. I see. So okay. I think I'm understanding it better now. So I'm in favor of the PUV recommendations except for option four. I think we do need a change to our deposit process. And looking in the backup materials for exhibit five, there was a benchmark study that was done on collection processes. And it looks like most of the cities have flat residential deposits. We have our two month average. Garland has a two month average and New Braunfels has a two month average. So I'd like to see us go to a flat deposit just to make life more streamlined and simple for people. And I'd like for it to be not a really high number either. Like one month average would be fine in my opinion. One month average on residential? So that would be about $227. So okay. I'm sorry. I don't have electricity with the City of Denton. So I think of water and wastewater bills. So I'm thinking it's like $100. Okay. We do have it broken out into all residential and then multi and then just residential. So if you were to look at multi only, which is your apartment complex, it's about $88 a month average bill. Okay. That's one month. Because they don't pay. But it's just electricity typically only. Yeah. That's one month for that. Would it be possible to just make it for the, I mean, I don 't want to complicate it, but it just seems like a $200 deposit is high when people are already behind. I mean a $400 deposit is incredibly high when people are already behind. So because right now we do two month average. That's a two month average. And previous to this policy, our flat deposit was $150. Okay. So if you were coming into the utility system, it was $150 for that. And everyone was charged that. Even with good credit? We did have the option to waive with the letter of credit and co-signer, but we didn't have credit scoring. So we were creating an additional layer for someone that did have good credit. We were asking for this additional paperwork to waive the deposits. So previous when we were at that higher debt, we had a flat deposit of $150. So with these cities that have flat deposits, what are they charging months or are they charging a flat fee? It's all variable how they charge it. I think I had marked it yes or no. Some of them do off of one month average. Some of them do flat, but what we're seeing right now with cities trending is that they're wanting to increase their deposits because their deposit policies aren't effective right now. So we're seeing that. Well, I'm in favor of changing it to a one month average with no increases. So option three. Okay. Council Member Gregory? See, in this regard, you said that the old policy back in ' 08, '09 was a flat $150 month deposit. Now, whether you had a great history of payments or you had no history at all. And at that time, our uncollectible debt was $1.4 million. Now, with our new policies, our uncollectible debt is 60% less. It sounds like our current deposit processes work. I would be hard pressed to change those. But at the time that we did this, we added money to the One Plus program. And now we're seeing that we need to make an adjustment also to help it let it cover the deposits. So I think leaving the deposit process as it is is a good business practice. And it reminds us that we have an obligation to our current customers who have to -- whose bill reflects uncollectible debt. Their bills go up as our uncollectible debt goes up because they're going to have to end up paying for the services to operate the electric company. And there are a lot of folks that struggle, as has been noted, to make their monthly payments. And I don't think that they need to make a higher monthly payment to cover folks who were not able to do that. Our deposit process has worked and it's reduced our uncoll ectible debt. And that's important. >> We'll do it in a line. Councilmember Ryan, then we'll go to Councilmember Briggs. >> Thank you. I know we talked about going to a prepay system probably next summer about that timeframe. So how would that work with Interfaith if someone's on prep ay to -- they would not be able to use Interfaith to -- >> So I'm glad you brought that. It's a very good point, not only about the prepaid utilities, because prepaid, whenever we have this online, negates all the deposits and late fees and everything. It's an additional option for our customers coming in and current customers that we'd be working with. And so that's another timely part of the new contract is how we want to work with customers who want to go to a prepaid system. So we would need to make sure that we write good specs in there because someone could encounter that they have a need or they're getting close to -- they're going to be disconnected and they need to put something on their utility, what that appropriate amount is. So we would, as staff, we need to put that in the specifications of the contract. >> And I'd like to see it written in such a way that that is allowed in there somehow because I would like to do the -- I agree with PUB on the homeless waiving deposits until such time that we put prepay in there. Once we go to prepay, that brings in a whole different dynamic and they can go on that prepay system and it takes care of that whole situation completely. And as far as allowing the assistance with deposits, since we already allow payout on deposits, we're now using part of the funds that are supposed to be used for -- that previously could be used strictly for the utility, for the balance. So I don't really agree with allowing them to be used for deposits if we're allowing the payout on deposits. >> Council Member Briggs. >> So I wanted to just go over some numbers here. I asked for information and currently there's 4,535 customers that currently have late fees. >> That are eligible for late fees. That'll go down. >> That have late fees. >> Yes, ma'am. >> And 6,392 with deposits over $200. >> For clarification, is that new -- is that new customers that came in or is that customers that had the deposits added once they were late? >> That's our entire utility system. So we went into the CIS, customer information system this morning and pulled everyone that has a required deposit and that's how we got that number. So that's going to be your new customers that just come in and our current customers. So that's the whole -- that's everyone. >> Right, and so if we went to a lower deposit, I mean, because 6,000 out of, you know, 55, that's really not -- I mean, it's not really going to -- >> 6,000 out of 59,000. So that's 12%. >> So if it was $175 flat deposit, I mean, we're not really going to -- I mean, we're not talking about that much of a difference. >> We have deposits under 200. I think it's about 4,400 accounts that are under 200 with that. So we have quite a few deposits that are under that 200 threshold. >> So is there a way to do deposits based on a pay scale? >> I'm going to make sure I understand what you're saying. So we would need to ask the customer how much -- what their income level is and then base the deposit off of that? >> Instead of a credit score. I mean, I'm just -- I'm just kind of -- to make it more -- to make it more fair. >> I think that would be -- I mean, just thinking out loud here, I think that would be a manual -- I don't know if the customers want to divulge that, nor do we want to ask that information of the customer because -- and how to determine that threshold, I just don't know right off the top. Like, I wouldn't want to answer that right now. >> Right. It's probably -- there's probably legal implications to that. But do people share that information with you when they are trying to negotiate their deposit or bill? >> When they're coming into the utility system, those aren 't questions that we ask. They don't ask that or they don't get into that. But whenever someone is needing assistance, they may get into that information. And so what we do with that is if someone says I'm really struggling, we do the -- you know, we'll go up to three months, but then we may give them a little extra time depending on their situation with that. So trying to have that empowered workforce to work through those specific -- we have the policy that takes care of the masses and then we have the empowerment to take care of the individual circumstances. >> So the initial -- the customer -- the new customer deposit isn't as a big of an issue for me as when we have a family that has a late payment and then all of a sudden they have an extra deposit on top of that. So that's kind of what I want to address. >> Is the -- so I'm hearing the reassessments of deposits, so the additional deposit. Do you think any of the options like increasing it just by a $50 increment is better than going up to the two month? >> I mean, when you have parents paying for food and shelter and watching their lights get cut off, I mean, because they can't make that extra payment, I don't know. I mean, I just sit there as a child, I live through these things, you know, and watching your parents struggle, it affects you. >> Thank you for sharing that. I know that's difficult and I echo what you're saying with that. I think we are able to address those individual needs. With that, it's hard to quantify all those conversations that we've had with our customers. I mean, you see it in the payment arrangement data, but I think there is those very sensitive conversations that we're having with that. So I feel like we're able to work through that with our current policy. And I would advocate if someone is reaching out to send them our way so we can take a deeper dive at it. >> There's many, many, many families, I mean, moms that are going through this and are having issues with our utility and struggles. So I appreciate this conversation. I just think we could do more. And so I mean, I would be in favor of the recommendations, but I am in favor of changing the deposit process. >> Anybody else? Mayor Pratt? >> Can you go back to slide two, please? >> Yeah. >> So right now, like this discussion, just to put it in context, is equal, really we're discussing .22% of total receivables billed, is that right? How does that compare to other cities as far as what they 're collecting? Because that seems really low. We have a really, I mean, even the 2010 number seems really low as far as having receivables. >> Our goal is to be no more than .25 with our bad debt. With that, that was when we surveyed the cities, we were asking them about their bad debt percentage because we wanted to present that to you and we weren't able to collect that data. They either were trying to get back with this, but we just didn't have it at the time of the presentation with that. But almost all of them were very interested in our policy and what we're doing with that. So I don't have that exact data. >> I guess I just -- oh, you have an answer, Brian? >> Yeah, we did a -- there was a management study that was done back in the 2008, 2009 timeframe and it's required by charter to be done every 10 years, so we're getting ready to do another one of those. One of the things we looked at was our credit and collection policies and what was the benchmark that we should have. That's where that .25% benchmark came from, was from that study looking at midsize utilities across the United States, where should we be? So that's kind of where that benchmark came from. So for that purpose, we were a little bit high in 2010 and then we were able to achieve our goals at this point in time. >> So that's where this originally started was from this discussion, we identified that we were high compared to our peers and so we tried to look at what policies do we need to have to reduce that. >> While I have you here, so we've increased our billing by a significant amount since 2008, right? If I remember correctly, we've increased by like 50% or something, our total number of accounts. >> Are you talking about the customer base? >> Yeah, the customer base. >> We've increased by 9% customer base since that time. >> Since that time? >> Yes, ma'am. >> Okay. So I mean, not only did we go down, it was during a time that our customer base was also increasing, so it's kind of a double achievement because we were increasing the potential for delinquencies and we still achieved our goals. Just kind of pointing that out. I don't have a lot of heartburn over the delinquencies. Frankly I have a hard time believing that the rate payers are going to have to pick up the slack for another 100,000. I mean, we've had sessions where people, there's just like $200,000 that's not in a fund anymore or it's been used for something or equipment was purchased. I cannot see this trickling down to the rate payers. I think there's a lot of factors that go into budgeting and I'm not having any type of problem with reducing our deposits. I don't think it will affect the rate payers. If I did, I wouldn't vote for it. But there's so many moving parts at utilities, so many different expenses that go into the rate structure. This is basically nothing. So that's just my opinion. >> Well, I can appreciate that. I guess my only thought is if we know that something has reduced our bad debt from 1.6 million to 500,000. So we've got competing interests. We've got competing policies. How do we make sure that we maintain good business practices, which I think anybody would expect us to do, notwithstanding the percentage. I mean, there's nothing more that I just cannot stand is for somebody to say, well, we're only going to increase the rate this much and it's only going to affect, you know, it's only going to increase your bill by $1. And the whole principle of it is, and we've had this discussion at this table, is, well, wait a minute. We want to make sure we hold the line as much as possible. So there's that end. And then it's how do we ensure that we can be as compassionate as we can without establishing a de facto charity. If we want to do that, then we just need to make a policy to do that. And we've done some of that with the plus one. And if we need to increase that more, I mean, I'd much be in more favor of, you know, if instead of saying we're going to just allow our uncoll ectible debt to increase because of its de minimis impact, I'd be more in favor of it's $100 ,000 that seems to be not an impact. Well, then let's fund it at $200,000. Because I think in the end, every, almost every email that I've received since I've been on counsel, that they've had a utility struggle. You know, I've read it. I empathize with them. And when I have forwarded on to have them to have customer service look at it, first of all, I'm 100% confident that customer service is going to look at it and do whatever they can to make sure that they can help that client. More times than not, what comes back is that I have a clear understanding of the historical context of that email. So I've got a couple of questions. So when, because as far as the initial deposit, I mean, if we're asking for deposits, and I think Councilmember Hussbett had a good point, that we're asking for deposits based on the historical average of a unit that this person has not lived in, that has been based upon whoever lived in it before, which if we want to go back three or four year average, where we're taking into consideration maybe different types of of residencies or people who use utilities at different rates, but some people use a lot more than others. So but as far as the initial deposit, I mean, if it's four or $500, I think we need to look at that if it's an average of you said 200, I think on a residential 227 for the one month. And I go ahead. Yes, one month. Yes. No, right. Yes. Yeah. And I know why we do that, it's because worst case scenario , if they don't pay, if we send out all our notices pursuant to our schedule, if we disconnected when we say we're going to, we'll be out two and a half months of service. And right now 25% of the people with deposits are leaving a debt ultimately. Right. So when let's say, for instance, someone is disconnected for nonpayment, the original deposit, what happens to that? When they're disconnected for nonpayment, they have an original deposit on there. If they had to pay the two months, up to two months at the originally, then the deposit doesn't increase because it's that we don't ask for any more at that time. So they just pay their past due balance. If they only have the one month deposit on the account, then we would ask for the additional month of deposit to have the two month average on there. So what I hear you saying is that that deposit, it gets disconnected for nonpayment. That deposit is still sitting out there as a deposit. Let's say somebody's got a delinquent bill of $200 and they 've got original deposit of -- that's a bad example. An original paid deposit or only -- Original paid deposit at the beginning of the -- when they first connect service. So we make sure that that deposit covers two months of their average. So if their two month average, whenever they get disconnected for nonpayment, is 200, we're not going to ask for an additional deposit. It's all based off of their usage at that time. Okay. So -- but if -- well, then why is it then when people get disconnected, it's so that people who don't have a deposit, if they get disconnected, that's when that large deposit requirement comes up and whatever -- like if they come in and their bill is $400 and they have no deposit on record because they had the credit or waiver or whatever, the bill's $400, their delinquent $400, they come in and give us $400. We're saying, okay, that's towards your deposit. Now you still owe $400 more to pay the bill. Yeah. In most cases, people who are disconnected for nonpayment already have a deposit on the account because they've more than likely had to have that deposit secured on the account at the time of coming into the utility system. See, to me, that's where the big problem -- that's where the problem comes in. It's when people sign up, that's not the problem. I mean, that's not the problem. Even using the credit -- the credit paradigm, I mean, you have opportunities with waiver. The problem comes in when you get a disconnect, you get disconnected. It's not a disconnect notice. You get disconnected. The deposit, additional deposit is not required until you get disconnected. If you don't have the two months deposit. But if you have the two months deposit originally, then what I'm hearing you say is you just pay the delinquent amount. Is that correct? If that specific account doesn't have that two months, then we're going to seek it at the time of disconnection. But if they have two months, then there's no additional deposit. No, no additional. We don't go above that. But we do still offer, even if they're disconnected, we'll offer to work with them on that deposit. Because that wasn't my understanding in our previous conversations. Not that you said anything. So I'll be honest with you. I don't know if I have enough data to make a decision today . Because the data I want to see is what I believe really is the problem. And that is on disconnected, noticed accounts that have been disconnected, how many of those have a two month, a regular deposit available? How many of those have no deposit? And then how many of those and what is the deposit amount that's been required on average? And then the next question for me is, if they do require a deposit, the first money that they pay us goes to the deposit. So then they've got to come up with the other money to pay the delinquent account. But I understand that y'all can work with them and say, well, if you got $400, give us credit 50 or 75 or 100 of that to deposit. And the rest will go to your. The whole point of all this is just that we get paid. I mean, this is pretty simple. I mean, it's not, I mean, every business that they need to get paid. And so their goal is reduce the receivables as much as you can. Now, being a city, we have some different interests and policies we need to consider. And that is how do we provide the maximum flexibility for our citizens to allow them to get back on their feet. That's why we do it. We don't do it to say we're going to help you out so then you can increase the amount of debt that we can't collect from you. So it's just tweaking this. And one of the things we did a few years back was this. But to me, the real issue isn't, I mean, I certainly am in favor of the plus one funding. We could, better be careful. We could, we could fund that. We could even, I'm okay with funding that more. Because it is based upon Mayor Pro Tem's observation. It's I mean, if you added $25,000 more to that, if you increased it by $50,000, the amount of additional people you're going to help is probably pretty significant. And the impact on the budget is minimal. As far as deposits within the plus one, I think it's important. And I have to rely on the agencies that are doing this. That when people are asking for help, that they have some kind of investment into whatever it is. So if they need help with the deposit, but then somehow if they get help with the deposit, I'm not sure about the up to three times a year. Because you might, that might be enabling people to not necessarily pay their bill. And then you're, you're cutting in half, you're cutting by what? By three, the amount of families that you can actually help . So I'm okay with that, but I'd rather take that down maybe to two. Deposits, that's an unknown because we're not quite sure where we are with the deposit yet. I mean, so I don't know if it'd be helpful to let them use it as a deposit if we're going to have a flat rate, let's say. But for me, the real question becomes, what is the data on disconnects? I mean, is that not really what we're talking about here? I mean, if somebody's coming in to pay a deposit to get electric service, if they struggle with, I'm going to say the two months, and I'm okay with one month. I'm okay with one month with an option of if they get behind, if it's delinquent, how can we work with them? But if they come in and they don't have the deposit amount, you can build a deposit and installments, can you not? Is it over three months? Yes, sir. Okay. So we're trying, I'm not in favor of saying no deposits. And I'm not in favor of saying, well, we're going to give them $50 deposit on the upfront charge. It's when the disconnect happens for me, because that's when people really get in a bind. You're right. In the front end, they may struggle, but they don't have service now anyway. And so how can we help them with this accommodation of billing out the deposit if we reduce it down to what, one month's average? Which is $200, $227 split out over three months is $66 a month, I think. So what I don't want to do is create something that brings us back up to where we now have $1.5 to $1.6 million a year. Is that a year? Yes. That was a year. A year in uncollected debt. Uncollectible debt. We can find a solution that I think that will meet your need and will meet the, but I just don't know if I have enough data to make a decision. I think you misunderstood. My issue is with the deposit that is attached onto a late bill, because generally you can't pay your electric bill because you're struggling. And then you add on the $250 onto that late payment, which then goes into the deposit. Is that the initial deposit or are you talking about the disconnect deposit? There's a deposit, whether there's a disconnect or not, it 's on a late payment. Is that correct? Yes. So if they have accumulated a certain number of events on an account, then a deposit would be warranted. So if they're late one time on an account, they're not getting a charge of deposit. I think they need to be late six times on an account before they get assessed. I'm going to start all over and spend another 15 minutes reframing my statement. No, I'm not. I'm just going to substitute. What I was calling disconnect deposit, the data for that, the data from, okay, how are these late, these delinquent payments, how is the data on after the first delinquent notice how much of deposits are being assessed at that time? Okay. Does that make sense? This will answer your question then. So we have an internal scoring that determines why we would need to charge a deposit. And so we have A, B, C, D ratings with that. So anyone that is C, A to C does not get charged a deposit. But once a customer has accumulated a certain number of points, then that warrants what we do on the utility system as far as charging a deposit. Okay. So. A late fee is 50 points. So if they have six late payments, that would take them down to that credit rating that's asking for a deposit. Credit rating D to F is where we're asking for deposits. So someone who does have the occasional late payment on the account is not being charged an additional deposit. It's the consistent behaviors. Okay. All right. So what would be good is to get a breakdown of that data. You know, and so you're saying from the D, E, and F ratings , that's when an additional deposit would be asked for based upon this point total. Am I correct in that? So this slide right here on the left has our current breakdown of our credit ratings for our customers. So you can see the 73, the A, B, and C. Those are the customers that do not have deposits on the account. It's only the D through Z is new accounts. Okay. So I'm getting confused by the sort of interplay of words. So this says existing customer credit rating. When I see existing customer credit rating, I'm thinking of the credit rating that you pull at the initiation of the account. This is the internal credit rating that we use to determine -- That's the points. Yes, sir. Okay. Yes, sir. So if you'll go back -- so you're saying D, E, and F -- Are the ones who will be charged deposits. And if you'll go back to the -- additional deposits. Yes, sir. Additional deposits. So that's from 600 to 900. So now apparently there's a deposit amount associated with each D, E, and F. Because, I mean, if you go from 601 to 900 and you're a D rating, is it a less of an additional deposit than if you're an E or an F rating? It's two months, right? Yeah. So you're securing the two-month deposit because you would have had to have a consistent behavior to hit these points. No, no. So yes, the answer to your question is yes. We would seek a two-month deposit. At D? Yes, sir. What about at E? Same thing. So why do we even have a -- I mean, why are there even point ranges? I mean, if we're assessing a two-month deposit at a D, beginning at a D rating, that means if you accumulate 601 points or above, you're going to get a two-month deposit. So what's the -- That's just used for us internally to know the health of our accounts, like how many credit events did this customer have on there. So I mean, we don't use that for anything but for internal stuff. But once they hit that D, that's where the two-month deposit comes in when it's being reassessed on the account. Okay. See, this is -- to me, this is really where the issue is. I mean, PUB recommendation, except for option number four, I would say let's increase the plus one. But here is where I think we could really get into understanding the data and understanding, you know, and how would a one-month average deposit in the initial account setting affect? In other words, if you started out with one month, then when you hit D, do we just want to have -- you know, then we just charge an additional one month, whereas if you've got two months starting out -- so if you've got two months starting out -- I'm sorry I'm getting in the weeds, but this is important. I think this is where it is for me. So if I got a two-month deposit on account and I hit a D event, and you know, I hit something, I do something where I go into the D rating within a year, right? So you said you already have a two-month deposit? I already have a $200 deposit. Then we're not asking you for anything else. So whether I'm D, E, or F, you're not going to ask for another deposit. Sure. So I need to know how many people is this actually affecting? That's what I -- That's the pie. I need to know actual numbers. I mean, I need to know what does 4% represent, what does 2% represent, you know, and because -- no, what you're saying is then 4% has a -- let's see, where's D? Which one is D? Is that 3%? It's the yellow. It's 6%. But that's just the credit -- No, I'm sorry. It's the 3%. That's just the credit rating. Somebody in D could have a two-month deposit already on file and not get an additional deposit. If they're a D, they do have the two-month deposit. But if they paid it initially -- Yes, absolutely. I see what you're saying. Yes. That's what I'm saying is I don't know with D how many people who hit D are actually getting assessed an additional deposit or they're not getting any additional deposit. So that's -- yeah, well, I think Keely's been -- no, go ahead. Go ahead. So along those lines, if somebody pays an initial deposit, they're late and they're in the D, E, or F category, they've paid two months up front as an initial deposit. Is that the amount? When they come into the utility system based off their credit scoring that we run, if they're fair good or at risk, that determines their deposit amount. If we charge them their two-month deposit coming in, we do not seek anything else regardless of what happens with their credit history internally. So then let's say they have a late bill that they haven't paid and it's a $400 bill and they have $200 on deposit. When is the money from the deposit applied to the late bill ? Well, you said the deposit was already paid, so the deposit isn't coming -- that's what I understood. Yes. She's saying there has to be -- you're asking why not credit the deposit to the $400 bill. But then they would have no deposit moving forward. So that's my question is when is the deposit applied? The deposit's applied when they end their billing or the other option -- in other words, if you have a late bill and a deposit, we don't apply the deposit against the late bill. That deposit just remains on hand. But I wanted to mention also after a certain -- is it a year of positive behavior? Then that deposit is refunded to the customer through a credit. But if you have a deposit on hand and you're late, then we don't apply that deposit first. You're just late in that bill and that bill is due and we retain that deposit. It's only those customers that either have a positive behavior and so that deposit is refunded after a certain amount of time or when they end service that deposit is applied against their account. So I have another question. How is the commercial deposit determined? In terms of by the average -- Yeah, it's two months average. The average usage at that location. And how is it determined who pays the commercial deposit? Is it the same credit criteria as for the residential? Yes. It's the same criteria. We utilize the online utility exchange to determine the deposits for them as well. Okay. But I mean, I guess you can't have a FICO score or something if you're a business. You would just have -- We have a separate -- it's a separate report that's ran for commercial -- but within that online utility exchange. Okay. Okay, thank you. Any other questions? So I've heard PUB recommendation. I'm going to -- have you -- do you have any direction? I'm still listening, so -- What choices or what options if you -- I guess I'm having a hard time seeing really to change anything that we have now. Because apparently it is working. I am for increasing the plus one. I think that, you know, if that's helping some people out there, that's helping our other problem a little bit too. So you're saying PUB recommendation you're okay with, but on the plus one they've had there were some staff recommendations as far as assisting with the deposit and then assisting families more than once per 12 month period. Are you okay with those? Well whether, you know, it's two or three times a year, I guess I can have it. But as far as the deposit, I don't think that should be used for the deposit. All right. Okay. I think you -- Yeah, I think -- I'm sure I have some questions. Sure, yeah. Increasing the plus one I'm in favor of by the suggested amount by PUB. Adding the ability to apply the funds in the ways that were outlined I think in slide 10 was where it was. And then I would like to change the deposit to a one month deposit. Or a flat -- flat or one month. Would that leave -- but then all the other processes in place. In other words, you're just dropping the initial deposit amount. But then -- Well, no, because it's not just initial. You can either have an initial deposit or you can have a delinquency deposit. That's what I'm saying. You're just saying change that number. Yeah. Okay. Yeah. So that it's not a two month amount. It's a lesser amount. So one month for instance. Or flat like the other cities. Okay. PUB recommendation. All right. Councilmember Ryan. I'm for increasing the plus one. But I don't believe it should be used for deposits. I'd like to do the homeless deposit waiver on a temporary basis until we get the prepay in place. Okay. And I guess I would say I'm in favor of option four, no deposits to our current criteria. And when we get the prepay in place, then we can look at the overall structure of how we do deposits. Councilmember Ray. I am okay with it being used with deposits because that is part of the issue when those deposits are attached and they're applied to the bill first before the payment can be accepted. And so some families can make their payment, but they can't make their deposit and their payment. And so the reason why I think Interfaith would need at least two payments is because it helps them get caught up, that one individual maybe. So say they help pay the deposit, which is at this point would be two months, but if we change it would be one month, which would be easier for them and less money to pay. So it would go further. And then it would give the individual time to -- or a chance to catch up on their payment. That's what happens when you apply that deposit for a delin quent account. It just keeps rolling. And then we have interest that we didn't even talk about and all the other late fees. And so if you're consistently late and you can't get caught up, then you just keep getting a late fee every single month. So that happens. That's what's happening. So I am in favor of being able to use it for a deposit, maybe not an initial deposit, if that's where people's hesitation is. But on that deposit when someone is having a hard time already paying their bill and then that's when they need assistance. And I'm okay with that. I'm with Mayor Pro Tempigere on all the other things with the deposits being one month instead of two. I think that's going to make a big difference. You're talking about an average, one month average? Yes. Or I know you all said flat fee, but -- No, one month average. Okay. All right. So the 227 that we talked about? Well, I mean, it would depend on the account -- So one month average based off of the address that they're going to? Yeah, yeah. Okay. So we talked about changing it from the residence to -- because right now it's based on the electricity or the usage at that residence, even if they weren't living there. Yeah, we base it off of someone who's been there, so we're not basing off of a vacant previous apartment on there. But yeah, we can do the one month average utility for the deposit. Do you have a question? Yes. No. Okay. So I mean, the one month or two month is just not really that big a deal, you know. And I'd ask, you know, if we reduce it down from two months to one month, what's the impact going to be? Is there going to be an impact? I think that's what we'd have to come back and show what would happen after the changes. The impact there would probably be when somebody is -- they go, and so there's less money there. So more delinquent. So would you -- are you saying that if it came down to it, are you okay with reducing it to a one month average? Yes. Okay. With the PUB recommendations, but there is a change in the deposit process, $100. If on the plus one, using it for deposits, Council Member Briggs said maybe not use it for the initial deposit, but if there's an additional deposit that's levied, which would just basically almost become a cash flow issue, whether it 's deposit or bill, I mean, it's all the same. Would you be okay with that sort of caveat? I really don't think we should use it for deposits at all. Okay. All right. Mayor, I just wanted to mention in terms of the impact, and we'd have to analyze that, but I think you saw from the slide of the people who left service that had deposits, about 50% of those -- about 50% covered and 50% didn't. And you know, and half of those that didn't became delin quent, I think we'd see an instantaneous increase in that if you go to one month's deposit. If most of those are two months deposit, we go to one month , we're gonna go from 50% not covering their last bill to probably 60 or 75%. So I think there would be a direct impact. I mean, we can estimate that just by the delinquent bills we have now and say drop it from two months to one month and what's that impact. But I think there would be a direct impact in terms of un collectible debt by going from two months to one month. Okay. And that's the council's decision because of that, but there would be, I think, a pretty direct impact. Well, I'm hearing a consensus on some things because we're all over the place on one issue, a couple issues. That's the deposit amount and then whether the plus one should be used for deposits or not. I want to tell you a story on that real briefly. Got a call from someone, had -- was working with a homeless person, a mother and a child, and they needed an apartment. Fortunately, I had one. One of the issues was they went to interfaith. They got assistance. Or giving hope. I'm sorry. Giving hope. To get assistance. They got assistance. But one thing they couldn't do was pay the deposit amount for the electric bill. So the homeless deposit waiver would have resolved that issue in that particular instance. So what I'm hearing is everybody's okay with the $25,000 increase. Contract amendment to add blah, blah, blah. Allow funds to assist with deposits. We don't have a consensus on that. I understand Councilmember Duff doesn't want to allow that. Councilmember Ryan doesn't want to allow that. And I didn't know where you were. >> I'm fine with the PUP recommendations. >> Okay. Which allowed -- that's right. Okay. All right. You're okay with allowing the deposits? You're okay with allowing the deposits? I'm okay with allowing the deposits. So we have a -- we have -- I think we have four there. So we checked off increased plus one funds. Allow contract amendment to add additional funds as needed. Allow funds to assist with the deposits. >> You skipped over criteria. >> Updated criteria suggested. Okay. So on plus one, the updated criteria. Well, I think the big issue there was the deposit issue. Allowing it to -- allowing plus one to be used for deposits . >> Three months or two. >> Oh. >> Three times a year or two times a year. >> What are your thoughts? >> They had ten items on the criteria that they wanted to update. >> Right here. >> No. >> Yeah. This is the same criteria that's in the backup. >> So this isn't all the criteria that we're getting at? >> No. This is the recommended changes. We have the current criteria, but this is the recommended changes. >> Okay. So how's everybody on the recommended changes on the plus one program? >> Yes. >> Yes. >> Yes. Okay. >> So up to the three times a year? >> Yes. >> Okay. >> That's fine. >> So we've got the contract amendment to add additional plus one program we've done. So we've done plus one by 25,000. We've approved the changes, recommended changes to the actual plus one program. We've allowed funds to assist with the deposits, allow for contract amendment to add additional funds as needed. What are we talking about? Is that the plus one program? >> Yeah. After we add the additional 25,000 and change their criteria, if we see that there's a need -- >> Okay. Well, we can do that anytime. >> -- that we can increase that. >> Execute homeless deposit waiver. >> Okay. >> Okay. So we're okay with that? All right. So now we're down to option four. I understand Councilmember Gregory wants to -- no change to the deposit process? Councilmember Ryan, no change to the deposit process? No change to the deposit process. You've obviously expressed -- you've expressed deposit. I'm okay with changing the process. I don't know if I would agree with everybody, but -- so what we have there is sort of we've got a -- the direction. We don't have a consensus. We do have one Councilmember that's not here. So this is what I'd like to do. We've reached a -- does the option four affect anybody's consensus for all the items we've agreed to? In other words, if we change the deposit, we're not going to change any of those things we've already agreed to. >> Several. >> Yeah. Okay. You're using words that -- yeah. All right. >> Well, and I brought up that I'd like for us to reeval uate the deposit process after the prepay comes into play. >> Right. >> Because that -- and just leave it alone for a minute. >> No, no. I understand that. But what I'm saying is what I'm going to suggest is we can put in place those items that we've all agreed to so far. >> And along with that, I think we're going to -- we're going to come back and review this whole thing because especially if it appears that we may be changing the deposit process, we're going to need to see in a year what the status of uncollectible debt is. >> Okay. >> Not to debt, but uncollectible debt. >> We get that. I'm trying to wrap this up. So we've come to an agreement on four of the five bullet points and the changes to the plus one program. So the only thing we really have outstanding is the -- no changes to the deposit process. We do not have a council member here, which I know this is important to him. So what I would like to do is bring back the discussion only, only on the deposit process. And if you could dive into the data on D, E, and F, how many of those Ds, Es, and Fs have a full deposit? If they don't, how much was the additional deposit? I mean, I want to understand that data. And I think then when we come back, we'll be able to address the final remaining component of this particular work session item. Does anybody have a problem with that? Any objection to that? Okay. All right. You got direction? >> Yes. So we'll be able to update all this in our specs and get a bid out on the street for the new contract for plus one program based off of PUB and your feedback. So we can go ahead and move on that and then staff will come back with the required data, additional data on and we'll talk just about deposits. >> Yeah. And if you have any questions of data that you would like that we haven't discussed here, then be sure and send those on to staff so that we can make an informed decision. All right? Good. Thank you. What time did we take a break before? Was it 2 o'clock? Let's take a five-minute break. Yeah. >> Welcome, everyone, back to this meeting of the Denton City Council, Tuesday, November the 14th, 2017. It is 3.40 p.m. Not a.m. P.m. We're at agenda item 3D. Receive report and hold discussion, give staff direction regarding an overview and options for fire department recruiting and hiring. >> Thank you, Mayor and Councilmembers. My name is Brad Layhart. I'm the fire marshal and assistant fire chief in the fire department. A couple weeks ago, Councilmember Briggs, who's ill today, she asked a simple question, does the fire department offer scholarships? And being the fire department, we decided to morph this conversation today into our entire hiring practices and diversity within the fire department. I'm going to try to go through the first several slides pretty quickly, keep this presentation short. If you just put them in there in case you wanted a reminder of how the hiring process goes. To begin with, we have three primary bodies that regulate how we hire people in the Denton fire department. The first and overreaching one is the Texas local government code 143. This was passed by citizen vote, I believe, in 1948. So it's been around for a very long time in the city of Denton. And it basically outlines our general hiring guidelines. And within the guidelines is we have the city of Denton rules and regulations. That establishes the local civil service commission. And they help clarify some of the rules and how we hire and promotion tests and scoring and stuff like that. And then starting in 2006, the city decided to enter into a meet and confer agreement with the fire department. So the meet and confer agreement allows us to modify and supersede chapter 143 in the certain situations and allows us to change our hiring practices and change the way that we do promotions. Basic hiring process. I'm not going to go into all these steps unless you want me to. The only one I'm going to point out is takes the annual written entrance exam. Our entrance exam is every January. It's going to be January 13th in case you want to sign up for it at 11 a.m. Oh yes, I'm sorry. I thought he was saying he was going to sign up. Yeah, I thought you were going to say you're going to sign up. No, I did back in the 80s. Back at that point, number five, the physical agility was the first exam and that eliminated anybody that couldn't make it past that point. Is it free exam? Is there any reason that it's gotten moved down that far on the list? Because if we're already doing back, providing background and polygraph, those are an expense to the city. Yeah, what we do is the order has changed throughout the years pretty much. Yeah, the test does cost us money. We rent the test every single year from a third party. The polygraph does cost us money too, but right now we do the entrance exam, do the backgrounds, and then once we get a smaller list, then we 'll do the physical agility test. So we do have some expense in there. I just know at that time that was the way to cut the list down from 150. It's a great question because in the Metroplex, there's about five to ten departments. What they've done is gone to a yearly card for physical agility test, which if you pass the physical agility test at a specific facility, your card 's good for an entire year for any other department except that. And that's something that we're looking at doing once we get the training facility open is offering the physical agility so many times a year. And once you pass it, we'll give you a certification and let you be certified for a year, at least through us, and we'll allow other departments to sign on too if they want to do that. Goes into a little bit more detail or hiring requirements. You must be a certified firefighter and certified paramedic . Those are the two outstanding ones. So if you're over 36, you can't be a firefighter. No. Me and Confer can supersede that, though. But is that a state law? It's a state, yes, Civil Service 143. Okay. But Me and Confer can supersede it. That's interesting. There's a few departments. I know Dallas doesn't, they have sort of, they have a hybrid civil service. It's like a city civil service, but they have no hiring requirement age. There's a few that are 40, 45, I believe. Okay. Well, I'm past all those anyway, so it doesn't matter. I think the whole idea with the 36 was to be retirement age when you're invested in a pension plan. Gotcha. I think that's where Regents came from. That makes sense. All right. Thank you. Didn't it have something to do with, after that age, agility issues become more and more of these younger folks with heart attacks and stuff? Absolutely not. I know better. March on. Something that we want to look into is the differences between Denton Fire Department, Denton Police Department hiring requirements. They're pretty much the same. We don't require any college. PD does require, have requirements. Misdemeanors are a little bit different. But the main difference we want to point out too is we do require you to be a firefighter and paramedic on the first day that you're offered a letter of employment where the police department doesn't require anything at all. How do we recruit? There's nine million different ways that we recruit. I'm not going to read each and every one of them. There's two slides of this actually. We go to tons of fire academies, tons of paramedic schools. And then how do we advertise? Print ads and trade magazines, social media, email, visit schools, visit trade associations. I think Councilmember Briggs, she was interested in, too bad she's ill, is we also have formed somewhat of a partnership, informal partnership with North Texas Women Firefighters Association, which the president actually works for us full time. She's a female firefighter. And what they do is they promote women in fire service. Actually they promote women and men in fire service. But it's really geared towards women and how to get women to be able to pass all the entrance exams and physical agility tests and stuff like that. Because it's really just skill level instead of brute strength. Yes, Councilmember Duff. How much turnover does the Denton Fire Department have every year? And how many firemen are you actually adding a year? Generally, turnover wise, we have very little turnover. And partially because we've been told, is because we have our own pension plan, to be in our pension plan, you have to be in our pension plan at least 10 years to be vested. If they leave before then, then they basically leave all the money on the table that the city's put in. They get their contributions back. The majority of other departments are in TMRS, which allows them sort of to hopscotch around other departments. City of Dallas has their own pension plan. You don't really see people leaving City of Dallas very much. But their pension plan's been in the news a lot too recently. But the TMRS Fire Departments, you see somewhat more hops cotching around, especially for entry level firefighters, you know, they'll be here two years, there three years, until they find the home that they really want to be in. Generally though, if we didn't have new apparatus going in service, we're averaging four, three people a year. So that sort of hurt our recruiting a little bit, until years that we could say, oh, we're going to hire nine, we're going to hire six, we're going to hire ten. That's sort of when you get a lot of people. So if you look at the demographics and diversity of people signing up to take our entrance exam, we're making sort of positive strides percentage wise on being able to attract more of the minorities to take our entrance exam, or actually sign up for our entrance exam. Let me not say take our entrance exam, but to sign up for it. We're making strides in the minorities, but then we're losing ground a little bit the past couple of years in the male to female ratio. But here's the problem that we perceive is we have a ton, we're doing great on getting people to sign up, but then very little people actually show up to take the test. And this is Metroplex wide. We've talked to other hiring departments and they sort of see the same trend, maybe not as extreme as ours. But of the 261 people that signed up for our test last year , only 39% basically showed up to take the test. So that's a huge number. So this is the city of Denton numbers. Yes, city of Denton. So we only have three or four people who may leave a year on average. I mean, we're adding, you know, medic aid or whatever it was. So you got more people there. So we're having 261. They signed up. Signed up. And it's still even 101 that show up. Yeah, so only three or four slots. Yeah. Okay. All right. Yes, Mayor Pro Tem. Okay, so the background past section, does that mean the criminal background check or what is that? Yeah, criminal background check. So that's the misdemeanor class A. Felony, drug use. Remind me what it is again. I just forgot the slide. Drug use misdemeanors driving credit history. There's a credit history. Yeah, credit history. So what is on the credit history background? If you're more than 90 days delinquent on a payment other than a medical bill, you're temporarily kicked off the list for that year. If you've been shown to defraud a creditor, you're eliminated from the list. There's a couple of different criteria. So let's say you don't pay your toll tag for like three months. That eliminates you from -- If they reported it. If you're more than 90 days delinquent. Yeah, if you're more than 90 days delinquent. That's really interesting to me because I don't necessarily think it's related to the ability to do the job. Just my opinion. Or maybe, I don't know, I guess the credit part of it, I get the criminal aspect is just -- is the credit requirement our internal requirement or is it a state civil service? No, it's internal. And ours is pretty close to the police department. To tell you the truth, if you hold your questions to the end, I'll show you everyone that actually didn't pass the background this year. So we get a better idea. And it'll say why? Yeah. I'll say credit, but I believe it's two. But if you want to wait -- Sure, that's okay. We can wait. We'll let you go. Okay. But we had a great pass rate. We had 93% of people pass this year. But then also, then when we give them the background investigations to do, we roughly only have 56% of the people even bother to bring the background material back to us in their required time. And that's sort of Metroplex wide. We've talked to a lot of other departments and that's sort of what they're averaging. And then of the ones that bring back the background investigations, we have roughly 47% that passed the background investigations, which 47% might seem like a low number, but when I was hired, it used to be one in four, one in five that passed. So 20, 25% passed. They've gotten a lot more. Moving on. Then Councilmember Briggs had asked the question, do we offer scholarships? No, we don't offer scholarships because there's no way to offer scholarship and still have the same type of hiring practices in place that we do currently. With Meet and Confer, we can start to offer different type of programs if that's the Council's direction. Instead of scholarships, we look at the more promoting programs that would help diversify the department more. So what options are we looking at? Option number one would be to change our hiring requirements of being required to be a firefighter and paramedic. At one time, we used to not require being a firefighter or paramedic. That didn't really help. Then we switched to you could either be a firefighter or paramedic. That didn't really help too much to diversify the department. Currently we're at the current state where you have to be a firefighter and paramedic. If we do choose to eliminate one or both of the requirements, it does cost us approximately $8,000 a month while they're employed and going to school full time. So that's the main difference between the fire department and the police department. The police department will hire them and put them through the academy. Put them through the academy, which is roughly, I believe, 40 weeks. And so with the fire department, they've got all these entrance criteria, the exam, the background check, but they have to already be certified, whatever that certification is for both firefighter and paramedic. Firefighter and paramedic. So, and I know you have more slides, but that seems to be, when you look at the, a few slides back, the chart of the fire department and the police department, when I see the diversity that's represented in the police department versus what's represented in the fire department, and I see that the big difference in the hiring practices is that we will hire folks and then train them for the police department. My conclusion is that that must be what makes the difference in our ability to achieve such a representative demographic in our police department that represents the city as opposed to what we're able to do in the fire department. How much is it costing us? I don't think you can answer this. Maybe you can. How much does it cost us for that police academy that our police recruits go through? We figured that out. Yeah. Because I'd be curious. You're saying that it would cost us about $8,000 a month to hire somebody, $8,000 a month for how many months to train somebody to be a firefighter? It depends. If they're already a paramedic, the hardest school to get through is paramedic school. If they're already a paramedic, then they actually just become firefighters roughly four months, so roughly $32,000. State of Texas, if you're a paid full-time firefighter, you have tuition waivers, so we don't have to pay tuition to send them to schools, to actual college schools like NCTC, Collin College, Tarrant County College. Does it take longer to become trained to be a paramedic than it does to be a firefighter? Yeah. There's one school which will start back up this summer. It's NCTC. Right now, their program's on hold, but they're the only school locally that does a six-month program. Most other programs are at least nine months, if not 12 months. Of those programs, what is the passing rate in a paramedic program? Those that start the program that complete it successfully? We require all of our guys to pass successfully, and we've never had ... In recent years, we haven't had an issue with none of them passing successfully . When we waived that requirement. Okay. We have waived that requirement. The school as a whole, I can say with pretty certainty, the reason that NCTC does not offer a paramedic program right now is because their pass rate was sort of low. Sort of low? Yeah. Did you have any number to go with sort of? No. Okay. It was low to their standards. That's why they're reevaluating the program. We have pretty good confidence they're going to reevaluate and come back with a much stronger program. I know I was on the board at Collin College too, at McKin ney, and our pass rate was 98%. Oh, really? Yeah. Okay. That's helpful. Thank you. Go ahead. That's my ride. If you use the homegrown recruiting program- Yeah. I haven't gotten to that one yet. You're reading it. No, you have the slide. The change that would be made, would that be a lower pay for the incoming that don't have that training until there might be another classification? What would have to be changed? Let me get to the homegrown. Currently at Denton ISD's ATC Center out in CH Collins, they have an EMT program. Most likely, 95%, I would say, chances are within the next week they're going to approve a fire academy. We've been working with them to get their fire academy approved. Their fire academy is going to be in conjunction with NCTC too. NCTC is basically going to supply the instructors. ATC is going to supply the facilities and the students for it. In a two-year program, the students are going to graduate with their EMT and their fire academy certifications already. There'll be a certified firefighter already. The only thing that they won't have is a paramedic, which NCTC's plan on starting their program again this summer. So they would graduate immediately, enter paramedic school. Within six months, they'd be a paramedic ready to be hired by us, basically. And what we want to do is get in, when they start the program, start mentoring these kids, have them learn our system, and actually do everything like we normally would hire them, have them do the background checks, maybe even get into the program, you know, work it with the school district so they know exactly what our hiring requirements are. And our hiring requirements pretty much match other large cities. Some of the smaller cities are more lenient than us. But we'd morph that so by the time they graduate, they'd be ready to be hired by us. And based on counsel direction or suggestions, we could go back with me and confer, give preferential treatment potentially to high school students. But that would create an agreement between the firefighter association and city. So question, on the slide that had all the breakdown of the data on who applied for the test, who showed up, and those kind of things. So before you even get on that sheet, before you even get on that as a piece of data, do you have to have a certified firefighter? So to do any of that, do you have to say, here I am, I've got this certification? No, anyone could sign up to take the test. So you could take the test. At what point in that list of the requirements, the hiring requirements, at what point does not having that kick them out of the process? Initial background investigation. Once they, I mean, the very first thing they do is check the certifications. If they don't have the certifications, then they don't know . They can take the test, but that's about it. Yeah, that's about it. I mean, no physical ability, no- And that's what our guess is, why a lot of them don't hand in a background investigation, because they know they're not even qualified anyhow. We do have some people, though, especially paramedics, they 'll take our tests and not be state certified firefighters. And if they score high enough, they literally can take an online fire academy and pass the online fire academy, get certified to say Texas before we'd even hire them. So we've had paramedics do that before. Okay. All right. But you're saying on the homegrown, that would require a modification to the meet and confer that is voted upon by the fire association? Depending on how far we want to go on that. Okay. And the reason why we want to try this homegrown now is this is DENT ISD demographics. I don't think they're 100% correct. I think the minority rate in DENT school district's actually higher than what I listed. This is off the internet. I couldn't get people from DENT school district to replace, return my calls this morning when I got it. So their numbers are a lot more. I think Hispanic population's about 30% in DENT school district and Caucasians down to 60. I think African Americans, 13 to 15%. So then Asians about 2 or 3%. But that's why we want to go with DENT school district and try that out, especially because the ATC program, if you look at their current EMS program, they have 17 students in it, 12 of which are females and 5 are males. So the majority of their EMS program's female to begin with . So what -- okay, I'm sorry. I think your next slide was questions. Yeah, questions. Okay. So -- But I also want to answer. Council Member Begheri. Oh, go ahead, yes. Was that -- Should we have another slide? Yeah, I have another slide. Oh, what was your question? What was your question about the -- People who failed background. Oh, gotcha, gotcha. We had 28 people fail the background this year. 13 were for drugs, 17 complete background packets, two were driving requirements, one was burglary, public lewdness. Only two were credit, one was promotion of prostitution, and two had felonies. So -- Yes. I wish we could see that broken down by ethnicity and race because I think that would help our discussion. I don't know. Maybe that's a sensitive thing to say, but I think it would help. I have the actual list with me. Oh. Well, the way you say it is kind of making me worried. Well, to answer your credit question, we had -- one female failed for credit, another person was a white male for credit. Okay. So, and the felony has to be greater than a class -- A felony, an actual felony. An actual felony, okay. Okay. And like drugs, depending on what drug it is, marijuana is three years, you're kicked out. Any scheduled drugs, it's five years compared to the police department. I think it's like five and ten on the police department side. Driving, there's a city graph that based on what it is, how many points, it's a whole point system. And to tell you the truth, the person -- one of the two that -- another female failed on the driving and we're trying to figure out how she had a driver's license, to tell you the truth. I mean -- Well, don't tell us. I don't even know how -- the point scale didn't go that high. So -- Did you have a question, Mr. Algarve? He answered it. Okay. Does that answer your question? I think so. Okay. And then like, you know, things that you think would kick people out -- the promotion of prostitution was a white male, I know that too. But that's just -- it's a case by case for a lot of things. The biggest deal that we look at is really drugs. Okay. So I'll just be really direct, where are the black people falling on this? Like if you're African American, where are you most likely to fill your background check based on 2017 numbers? Or if you're Hispanic, where are you most likely to fill your background check? And how many -- if you go back to that chart, there were -- what were the actual numbers? Like -- One African American didn't fill out their background completely. One was drugs and one was driving. And then on the females, I told you one female was credit and one was driving and drugs actually. Oh, good. So she was a double whammy. Is that helpful? Okay. So I want to go back to the -- what you termed the home grown to try to understand exactly. So what you're saying is, let's say there's -- you know, there's 17 people in the EMS now. You would want to try to work with students to recruit them into the EMS. And are you saying we would hire them at that point? They're going to enter the program their junior year. So when they enter the program their junior year, we would get with them and sort of have like a counseling session to begin with. And even before they entered the program saying, hey, if you truly want to be a firefighter in North Texas, these are the requirements that you have to do. You can't get in trouble. I mean, we don't expect Eagle Scouts at all. I mean, we understand that people mess up -- Right. You're not an Eagle Scout. In and out. Mess up here and there. Sure. But, you know, these are the absolutes that won't get you hired. And in the Metroplex. So we want to give those kids -- because a lot of kids just don't understand. A lot of times they'll go test for a fire department for the first time, do their background, go, oh, I didn't know that was going to kick me out, you know? You know? So you're saying educate them early. Educate them early enough before they make some mistakes. So their junior year, sophomore -- junior year, going into their senior year. And also we were talking about today, the chief and I, and like once a quarter or something like that, do have testing practices and stuff like that for the entrance exam. And then for our physical agility, too. So by the time they actually took an entrance exam, they'll have taken several of them between their junior and senior year to better prepare them to take the real test. But this is different than, let's say, if you go back to your hiring criteria. So we've got this program over here. And then this. This. So here you're saying if you didn't have your certification , step number three is when you would be eliminated. So this is a different approach than the homegrown. So if there was a change in that, like, well, if you go through all these and you pass, then that's when you were saying that we could hire -- if we had a change of policy, and I guess the association would have to agree to that. Yeah, and understanding what the meet and confer agreement. Right. Then that's when you would hire people because they've passed all this criteria. They just wouldn't have their certifications. That's when you would put them through the training to obtain their certifications. And they would be denting firefighters during the time of that training and certification. No, they would be doing all the training -- most of the training in their junior and senior year of high school. I'm talking about -- let's put the homegrown over here. I'm talking about people already out of high school. They're coming up here to -- Yeah, we can change it back to how the PD sort of is. Right. And those are sort of two different -- one is addressing the high school kids coming up, and then one is for people who just don't have those certifications, but they pass all this other criteria, and then we would provide them with the training, and they'd be hired similar to the PD. Okay. All right. Okay. And then for the training requirements, if that's the option that you wanted to go with, we didn't budget for that this year. Plus, the test has already been announced and approved for January, so it would be 2019. Okay. January 2019 that we would implement those changes. All right. The other changes could be implemented quickly. Council Member, I -- On this list, number seven, the ranking after oral interviews. Mm-hmm. So, how much of a change, drastic change, is there on the ranking? Because when I look at the breakdown and see how many people drop out as the process goes along, I know back when I took the test, I had a 103. I was third on the list, and they were only hiring two that year. Yeah. So, if you're not in that upper score, you're probably not going to -- you're going to go, well, I passed, but I'm number 27 on the list, so there's no sense in me moving forward. Does that ranking change much? It used to be like that, exactly how you said. The problem is, though, now, as you see, we only had 25 people pass the background test this year. With the Meet and Confer, before Meet and Confer, it would have been, like how you said, it would have gone from the top score. With Meet and Confer, what they did is we take the top 15 individuals after -- based on your scores, and those 15 get interviewed. And then based on their interview scores, then they get re- ranked based on their scores with the interview. And there's two different interview boards. There's one with fire department personnel and people from the public on that board, and they have to pass that one. If they pass that one, then they go to the chief's interview, which is usually the fire chief and one of the assistant chiefs. If they pass that one, then they get re-ranked based on their total score. Okay. And that's -- And that's all in Meet and Confer. And that's all after the background checks. So you're already down to the 25 people at that point. So what I heard you say was, if there was a desire to, let 's say, look at the Homegrown program and begin to talk about maybe developing it and/or even entertaining applicants without certifications, that would -- couldn't do that this year. I mean, if we had a budget amendment, we could. But also, that's going to take a discussion with the fire associate. So council, what's your -- I mean, obviously, we don't make the unilateral decision here. The firefighter certification change and paramedic certification change cannot really take effect until January 2019 because we only give the test entrance exam one time of year. Sure. But -- The other changes could take effect -- But in addition, that change would require a change in the Meet and Confer. Yeah. Yes. So council, it's a pleasure to have a discussion on direction, if any. I say move forward with the Homegrown, with the ATC. I think that's a great program because it's something that benefits us as a city as well as Denton ISD. Okay. And I think that's a good route to start on. Okay. Mayor Pro Tem. I like the ATC program as well, and I'd probably want some more feedback from the fire department as far as the requirements for the paramedic and, you know, what that would look like if those requirements were no longer there. Yes. Okay. Yes. I'd say move with the Homegrown program. I would like to get some more financials on the cost for hiring someone and covering their cost or, you know, as they're going through the training programs. Okay. Councilmember Dove. Yeah. I like the Homegrown, and, you know, and I - very honestly, I think we need more minorities in the fire department. And the question is how do we get there? Because, you know, you can see there was a zero on the end up there for the applicants. And I think it's going to take some effort probably with high school students and, you know, how do we do that? You know? And I think there's some organizations that we have in this city that need to get proactive there. And I've had that discussion a few times with the gentleman in the corner over there. Okay. All right. Yeah. I mean, just to hit on Councilmember Dove's question a little bit or direction is going back to - it's sort of interesting and it started disturbing at the same time because going back to 2013, we used to recruit widely. Our recruiter back then, he was a New Orleans fire captain. Then he came to us after Katrina and we were heavily recruited in Louisiana and he went and spent a lot of time in Louisiana. And even in the early 2000s, we used to give the test in Houston too. We used to give a test in Denton and in Houston to try to get more minorities in it. And nothing that we've done so far has really worked other than we've seen a trend of more minorities taking our tests. So we're hoping that that would work too. But we want to, like, put it on jolt or give it a Red Bull kick, you know, and get a lot more diversity. Go to that next slide if you don't mind. Because what we're seeing here is African American 31, Hispanic 33 registered. Number present. They both go down by about two-thirds. Yeah. Hispanic a little bit more than that. And then you've got your number passed. And that's an exam. Is that an exam that we draft or is this a statewide exam? No. We buy the exam every year from an organization called Fire and Police Selection Incorporated. And they generally follow the -- I'm reading this because I know Sarah will ask me. Uniform guidelines on employee selection procedures by EEOC . So the questions are basic questions. It's rating, math, interpersonal skills, teamwork, commitment. But this is -- is this a widely used test? Yeah, nationwide. I mean, they have several. So then when you look at the numbers -- This is the group we've used the past three years, I believe, now. Okay. Background submittals. And that means they've submitted the packets. Yeah, submitted the packets. And then the background past is where when you went through those criteria of here's the criteria that we score on or here's the background check, credit, felonies, certification, all those kind of things. Okay. Which is roughly 50% once they -- Yes. We're going to go to Mayor Pro Tem. So am I reading or understanding your presentation right? It seems like the group that's really underrepresented is Hispanics. As far as like we have, you know, 28% Hispanic population and then the number of Hispanics that we have either applying, following through, passing checks. I mean, am I -- I don't know what percentage of the fire department is Hispanic or what? It's 2 or 3%. It's real low. 2 to 3%? Hold on. I got a slide. I think it's -- Oh, here it is. Yeah. Yeah. Yeah, so I mean -- 4%. If you look at the total population like as a ratio, that is the most underrepresented minority group as a ratio, the way that I'm reading it. Yeah. Yeah. And that's kind of -- you can like -- as a Hispanic, it's not a racial designation. So when you check Hispanic, you can be white Hispanic, black Hispanic, any type of Hispanic. So it's really even worse than it looks in a lot of ways. And that's where I think with the dense school district numbers that I posted, I think it was off a little bit because there are certain ones that say Hispanic but then non-Hispanic, white. Right. And then there's actually Caucasian one, too. Yeah. So based on which data you're taking -- so I think the Hispanic is closer to 30% than ISD and then African American, I think, is about 13 to 15%. So if you go back to the slide that shows the percentages. Percentages that we have? No, I'm sorry. Before that. That's fine. The one with the chart that shows who passed or who got through. So here -- so to me, the test is the first criteria. Am I correct? So when you look at those percentages, you've got your minority population, you had zero for African American and one for Hispanic that passed the background. And so it's already -- I mean, so it's not even getting down through those other -- either the certification or the agility, the physical fit. So it's almost in the top portion of those requirements is where it seems the breakdown because you're not even getting the candidates to come through to move past a certain point to even -- well, and I would -- I mean, it sounds like there's a consensus to move forward with the homegrown. Yeah. We obviously need to continue to look at this data and see where are we -- where's the gap or the disconnect. But also I think we need to begin to have a conversation with the association just to say, hey, what are the concerns if it's -- with the certification, with the homegrown -- because they're going to have to vote on it if there's anything that this council wants to do differently. It's going to have to be part of the meet and convert. And they're going to have to negotiate that. Yes, Council Member Dove. Well, you know, I look at this chart and what this is telling me is, you know, we really need to do those background checks up front. I mean, you know, why go through all of these other things if they're not going to be able to pass the background checks? The background checks are a second step. They take the entrance exam, which is free. Okay. But that's where it needs to be. It's -- yeah, it's pretty much universal now. All the departments give the entrance exam, then they do the background checks. Okay. All right. Any other questions on this presentation? Good presentation. Thank you. Good data. I appreciate that. So the direction is sort of continue to move forward and develop the homegrown kind of -- Yes, sir. -- initiative. All right. Thank you. Thanks. All right. We've got our last work session report, which is Work S ession E, which is Receive Report, Hold Discussion, Give Staff Direction Regarding How to Pro ceed with the Creation of an Ethics Ordinance. Afternoon again. Brian Langley, Deputy City Manager. Wanted to visit with you today about the ethics ordinance. And as you know, we had an election recently where the voters overwhelmingly indicated they wanted to proceed with the ethics ordinance. So we wanted to talk to you today about how to do that and some options of how to proceed. Just by way of background, this has been a discussion in the community for several months, starting back in September of 2016 when we looked at possible revisions to the Denton City Charter. We approved a charter review committee. They have presented their recommendations to you in June. August, you call for the election. As I mentioned, the election was held on November 7th. Voters overwhelmingly looked at approving that particular provision. And we're looking at canvassing the votes on the 20th. I won't go through all of this language, but this is the ethics charter amendment that was approved. And the most important thing is that in the beginning of that, the charter change said the City Council shall adopt an ethics ordinance. So that's why we're here today, to talk about how to go about doing that. And then in particular, that language indicated that that ethics ordinance would have four different criteria or components to it, that it would define prohibited and proper economic interest, define recusal and improper participation, avoid appearance of conflict of interest, and then it would also talk about the administration and enforcement of the ethics ordinance. As you may recall, the charter review committee also had some recommendations beyond just the scope of what was in the language that they proposed to you for the charter. They asked that any kind of ethics ordinance include some other elements to it. They talked about areas related to when elected and appointed officials would recuse themselves, that we needed to have some specificity in any ordinance related to that, defining conflict, making sure that elected and appointed officials comply with all applicable laws of the state of Texas, that ethics complaints would be heard by a three- person panel. Again, this was a recommendation from the charter review committee, that mandatory ethics training regimen should be adopted and enforced, and that consideration should be undertaken to include all city employees and how to do that exactly. So those are all the elements that we looked at. I think the question is, is how do you draft that in an ordinance? And so as we were looking at it from a staff perspective, we wanted to bring you some options to consider of how we would actually move forward with this . The first option that we came up with is hiring an outside consultant, and we have a proposal in your backup from Alan Borquez. He is an attorney that worked with the charter review committee to look at some of the ethics provisions. He gave some consulting work to that committee back in the summer. He had given us a proposal to walk this through with the council and/or a committee, depending on your preference, for $20,000. That would include five different sessions with the council or a committee to work through an education session on what are the elements of an ethics ordinance, drafting an ethics ordinance and working through a process to tweak that to get to all these different areas in terms of the exact language that would be proposed for consideration. It could be Alan or it could be any other attorney or someone who has a consultant who has a background in this work. We just listed his name here and reached out to him because he had done some of that work with the charter review committee prior to that, but it certainly could be any number of attorneys that you think have experience in that. The second option would be just to have us as staff research and look at other city ordinances as a model or a template. There's many different cities that have had different ones. Applying those may or may not work. It may not be the most efficient way to do it. There may be some pros and cons of that approach in terms of time, but that certainly is a way we can do that and proceed or any other direction that the city council may have. So we're happy to take any direction that you have at this point. Our recommendation would be that you would use the consultant. We do believe that's the fastest way and probably the most comprehensive way to bring this forward in a definitive manner for the council, but we're looking for direction from the entire council of how you'd like to proceed and on your timeline. >> Councilmember Duff? >> Yeah, I've -- you know, I read through his proposal and I'm good with a consultant. I think that's a good way to go. >> Anybody over here? Yes, sir. >> I've talked with some of the members of the charter review committee and they had good things to say about -- >> Barcas. Barcas. >> Yes. >> Mr. Barcas. >> The proposed consultant. And so I think that that would be good. There was also -- well, after we make that decision, we need to decide who he's consulting. >> Anybody else? Mayor Quintin? >> I'm in favor of hiring Alan Baracuis. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> I'm in favor of him. >> Well, that doesn't mean we don't have public input. I mean, we've already had a tremendous amount of public input. I've got a whole draft ordinance that I'm reading through that someone gave me. So I think if we were to -- if we want to expedite this process, because if not, we're going to have to appoint three to four people per council member to a committee because we need to make sure that it's a large, you know, cross- section of the population. You all want to do that? That's fine. It'll take us about five or six months, seven months to get through it. >> I think go sooner rather than faster. >> I've run out of people to appoint to committees. There's nobody left. We have appointed every single voter in the City of Denton to our subcommittees. >> That's not saying much. Not a whole lot of people voting. That's what I meant. >> More friends. >> Yeah. Okay. Yes, Council Member Duff. >> I think we're going to make the decision anyway, and I think we're the ones that need to be going through it and making the decisions. >> He did recommend a public outreach component to that process. >> Of course. >> So we can certainly have that through that. It doesn't preclude you from doing that. >> I think you might want to get Dove in his proposal also -- does he have add-ons, like if you have more meetings, is there -- I mean, does he have the provisions for if you go through what the scope of the current proposal is, what the -- >> He had an hourly rate that he had quoted there. So we can certainly look at some options if we did more than five meetings, what would that be, try to have that in a contract and bring that back . >> What I would like to see, if able, is maybe get him -- you know, tell us what it would be for seven or eight meetings, and if we do less than that , have a schedule backing off of that, because I don't think we're going to -- I don 't think we're going to get it done in five meetings. I mean, that's not saying I want to move slow, but I mean, unless we're spending four or five hours each meeting talking about it. >> Okay. I will certainly get with him. I'll get that -- >> And if we don't use them all, then we can have -- >> Have credit, perhaps. I'll get with him, look at schedules and see when he would be available to start, and we'll get him out of here as soon as we can. All right. Thank you for your time. >> Fantastic. Any other questions? All right. Wonderful. Rocking right along. I will now convene the closed session at 430 -- or 429 p.m. We will consider the following items. Consultation with attorneys under Texas Government Code Section 551.071. Deliberations regarding real property under Texas Government Code Section 551.072. I don't think lunch is out there, but -- All right. Welcome, everyone. We have concluded our executive session. We will now begin the closed session at 6 o'clock and consider the consent agenda. Council Member Gregory. >> Thank you, Mayor. I move approval of all of the items on the consent agenda except for items A and N, which we will have individual presentations on, and B, which are -- which is simply being dropped. >> Okay. So we have a motion to approve the consent agenda except for items A, which will be an item for individual consideration, agenda item N, which will be an item for individual consideration, and also V is being pulled altogether. Council Member. >> I will second. >> All right. We have a motion and second. I'll signify by saying aye. Aye. All opposed by like sign. Motion carried unanimously. We will now move on to items for individual consideration for the consent agenda items that have been pulled. Agenda item A, consider approval of a resolution of the City of Denton, Texas, approving the Denton Municipal Electric Sponsorship Program guidelines and application process. I do not believe we need a presentation on this. Chair would entertain a motion. Council Member Gregory. >> I move approval. >> I'll second. >> Council Member Ryan. All in favor of consent agenda item A, please signify by saying aye. >> Aye. >> All opposed by like sign. >> I move. >> Okay. Motion carries. Four to one. Is it best to do the -- or should I do a hand vote? Does it matter? Okay. All right. Okay. All right. We've got -- yes? >> Mayor, I have filed the proper paperwork to recuse myself from -- >> So you'll be recusing yourself from item E. Okay. All right. So no presentation is needed on agenda item N. Chair would entertain a motion. Yes. Council Member Gregory. >> Thank you, Mayor. I move approval of item N. >> Mayor Pro Tem. >> Second. >> We have a motion to second. All in favor, please signify by saying aye. >> Aye. >> All opposed by like sign. Ayes have it. So passes four, zero. That concludes our consent agenda item. Yes. Because we pulled V. So now we'll go to items for individual consideration. Conduct the first of two readings of an ordinance -- agenda item 2A, I'm sorry. Conduct the first of two readings of an ordinance of the City of Denton for voluntary annexation of approximately 73 .47 acres of land generally located north of Long Road and west of Farm to Market Road 428. >> Thank you. Cindy Jackson with the Planning Division. Here again to bring you A17-005, the Stark Farms. This is actually the first of two public hearings for a voluntary annexation of 73.47 acres of land generally located along Long Road to the south and to the west of Sherman Drive. The applicant is proposing -- >> Cindy, if you could just hold on just a moment, please. Because this is posted for an item for individual consideration. And your slide had said that this is a public hearing. It's the first two readings of an ordinance. Is it a public hearing for a reading of an ordinance? >> It's actually every time we do a reading of an ordinance , it is an item for consideration. >> Item for individual -- okay. I just saw public hearings. I'm thinking public hearing for public hearing. Okay. I just wanted to make sure -- yep, I'm sorry. Apologize about that. You may proceed. >> The applicant is proposing to annex approximately 73.47 acres for a proposed single family development. Here you can see the zoning map of -- the existing zoning of the site. Excuse me. You've seen this several times before October 17th and October 24th were the first and second public hearings of this request. We are now today doing the first reading of the annexation ordinance. The final reading of the annexation ordinance is scheduled for January 9th, 2018. And because this is reading of the ordinance, I will read to you the preamble of the ordinance. It's an ordinance of the city of Denton, Texas, voluntarily annexing approximately 73.47 acres of land generally located north of Long Road and west of FM 428 by the city of Denton, Texas, more specifically described in exhibit A and illustrated in exhibit B providing for a correction to the city map to include the annexed lands providing for a savings clause and an effective date. The entire ordinance is in your backup. >> Okay. All right. And there's no action on this item, I believe. Is that correct? Okay. Anything else? >> That concludes my presentation. >> Thank you very much. I appreciate that. Agenda item 2B, consider adoption of an ordinance accepting competitive bids and awarding a best value contract for the supply of light duty vehicles, which includes sedans, passenger vans, pickup trucks, and hybrid electric vehicles for various city departments. >> Good evening. Terry Kader, Fleet Services Superintendent. >> So the item for consideration tonight is a contract for the purchase of light duty vehicles. Fleet typically purchases, historically we purchase up to 50 light duty type vehicles annually. And prior to 2014, we did that through buy board HDAC, some contract. Typically it was buy board, but we also did quotes and purchased them individually like that. So in 2014, we went out for RFP and we had a contract that began in December 2014. That contract was with James Wood Auto Park. And that was a three-year contract. We found that to be a really efficient, timely, and cost- effective way to purchase vehicles, the light duty vehicles over the last three years. When I say light duty vehicles, these are some examples. They're basically sedans of all platforms, half ton, three- quarter ton, and up to one ton trucks. So these vehicles go up to 14,000 pounds GBWR. And some of them can have flatbeds. They can have utility bodies. They could be standard pickups. So we can get the bed delete option and put utility beds on them if need be, depending on what the customer needs from us. Notice the Chevy Bolt in the lower right-hand corner. So the objective is to have a contract in place for the purchase of light duty vehicles. We'd also like to standardize the fleet. That creates efficiencies in several areas, some of those being parts, technician training, special tour requirements, warranty procedures. And we'd also like to utilize value-added services. And by value-added services, I'm talking about those things that are at no additional cost to the city that the vendor has proposed to us in this particular contract. Those would include a 36-month, three-year, 36,000-mile services for the first three years of the vehicle. All the PM services that the manufacturer suggests for that are going to be included and done by the dealership. It also includes transportation of the vehicles to and from our facility. It includes free delivery of the vehicles when they're purchased new and they're delivered to the vendor. They deliver to us for free. And it includes a multi-point inspection service when the vehicles visit the vendor's facility as well as a free wash . So our last contract had a few of those items in it, but not all of it. So they've kind of stepped up and added a few more things to this contract for us. So we began purchasing GM vehicles back in 2010, and that was really due to the Ford Motor Company ceasing production of the Crown Victoria, which was our police vehicle. And we went out and researched, and we chose the Chevy Tah oe as a platform for our police pursuit vehicles. And since 2010, we've been purchasing Tahos for them. We've also moved into the other areas of the fleet with sed ans as well as a pickup truck. The value added services are at no cost, no additional cost to us. I think it's important to look at that. And it does reduce the overall cost of the vehicles in terms of life cycle cost and maintenance cost, because we have three years of free maintenance on them. And then James Wood Auto Park is a local vendor here. They're actually, I think they're the third largest commercial vendor in the Metroplex area, so they have a lot of commercial fleet experience. And they're trying to grow that business as well. I think that's why they offered us this contract at the pricing that they did. And, you know, working with a local vendor has a lot of advantages for us. We have a very knowledgeable rep at James Wood who can help us out and make sure we get the vehicles that are intended for the application that we're trying to put them in, make sure that we get the specs right on the vehicles and they're going to do the job they're intended to do. So we have some options. We can approve it. We can not approve the resolution or you can provide additional direction on which way you'd like to see fleet go with the purchase of light duty vehicles. And with that, I will answer any question. I do have one more thing I wanted to add in that keep in mind this is a three-year contract, basically a one-year contract with two one-year renewals and a not to exceed amount of $4,050,000. So that doesn't mean that we're going to spend all that $4 million, but we have asking for the authority to do that. This year we have 33 of these vehicles to purchase. They've already been identified. And so in terms of how we select those vehicles, we do have fleet criteria that we go by to see which vehicles we're going to replace. And that criteria involves maintenance costs, involves the age of the vehicle and the mileage of the vehicle. It also involves condition of the vehicle. So we look at each vehicle as it comes eligible for replacement. That doesn't mean we're going to replace it just because it 's eligible, but it has to meet several of those criteria. And so we have outlined that for this year, of course, and beginning in January we'll be outlining that vehicle list for Tony for next year. So by February we have to have that list. We also go through it again in July and we go over that list with -- I'm sorry, in detail with each customer to make sure that we're getting the right size vehicle for their application. We want to right size the fleet. We want to make sure that they have what they need to work with. And we also want to make sure that we follow the recently implemented green fleet policy. We do have a committee in place that reviews the light duty vehicles. And we have some -- hopefully some places to put a couple of electric vehicles in the fleet this year for the first time. Any questions? I've got a couple of questions. Double cab, what is that? I know a crew cab, standard cab. It says DBL cab. What is that? Double cab is -- the terminology has changed a little bit. It used to be extended cab. Now they call it a double cab because it has four doors on it. But the crew cab is the larger cab with larger doors. And so I guess that's my question here is -- because there 's a lot of crew cabs. Some of the things that the crew cab is replacing are an Explorer, compact, regular cab, Ford Escape. So why do we -- I'm just curious as to crew cabs. I mean, that's basically a four passenger vehicle. And so what's the thinking behind that? It is the four passenger vehicle typically in the departments. And that's basically why they want that, to transport workers to the job site in most cases. It's not that they're going to have four people in a truck all day every day. But some of these vehicles are used to transport their people to the job site. And the vehicles that they're replacing are also four seat vehicles, the Escapes and those type things. Yeah, there's a couple of half ton regular cabs that are going to crew cabs. So how do we -- just real quickly, how do we -- because I know I've brought this up before. How do we make sure that we're not over -- what do we call it -- that the vehicle is not -- or just it's more than what they actually need. How do we go through an analysis of that? From what I'm understanding, you say they tell you what the need is and then you guys try to match the vehicle with the need. You grill them on what the application for the vehicle is and how they're going to be using it on a daily basis. And then part of that, you know, is we want to right size each vehicle. We want to make sure we have the right -- excuse me -- drive line in the vehicle for them. And so when we meet and we talk about those things in detail, how they're going to use the vehicle and why do they need extra space if they do need extra space. And they have to validate that to us to make sure that we 're not over buying the vehicle for them. Five of the vehicles on this year's replacement list have been downsized. They went from three quarter ton down to half ton vehicles. We have one, two ton that we're reducing down to one ton. Okay. And that's on this year's list. Yes. Because I see fire prevention, fire administration, fire administration, wastewater reclamation, you know, those are all crew cabs. And my hunch is most of them aren't carrying more than one or two people at a time. So I just -- we purchased a lot of vehicles. We do. And just a slight modification of the type of vehicle to match the use could be quite substantial in savings. So I just wanted to make sure that we're being diligent on that. And the Green Fleet Committee also is reviewing this now. Who is? I'm sorry? The Green Fleet Committee. The Green Fleet Committee. The Green Fleet Committee. And I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. It's based on a combination of factors, which is the year of the vehicle, the department that the vehicle is in has something to do with that because most of these light duty vehicles are 10-year replacement vehicles. They will typically reach that before they reach the 100, 000 miles, but sometimes in some cases they may reach the maintenance threshold, which our software system that we track all of the maintenance costs in, it tracks the costs and it assigns points to each vehicle based on the cost of the maintenance. When that maintenance cost gets to be 50% of the original cost of the vehicle, it flags us and says it's time to really start taking a look at getting rid of that. So you mean 50% on an annual basis or just... Life of the vehicle. Okay. So whatever we've spent lifetime to date on the vehicle, once it reaches 50% of the cost of the vehicle is when we typically start looking at that. And then the cost of the vehicle at purchase? Yes. Okay. And then with the 2009 Toyota Prius's... Now there are some cases like the Prius's that technology is... Those are hybrid electrics and those batteries have an eight-year warranty on them. So when those came... When we purchased those back then, our thought was we better take a look at getting rid of those right about the time the warranty goes out on the batteries because the battery packs for the Prius for that platform are quite expensive. Yeah. It's just... Well, I mean the Prius battery is like $5,000, right? But a new Chevy Bolt is $35,000. So I guess I'm... I still don't... I've talked about this equation a bunch of times. I just still don't understand the reasoning behind it. Well, the other thing is that's not... That we do factor in is the actual condition of the vehicle . So our vehicles typically aren't sitting in a covered area, most of them. They're out in the sun. And the sun can damage vehicle condition and just depending on how harsh of service that they're in, depending on the department. So we also look at that as well. Okay. Thank you. Sorry. Oh, you're good. One other question. As far as vehicles that can be used for personal use, of these vehicles on here, do most of them, do people take them home and use them outside the scope of their work with the city or how does that... Some of these may be take home vehicles. I don't have that list in front of me here. But most of the take home vehicles are gonna be the three quarter one ton trucks with the utility bed on it and they're used by the utility departments in case... And their folks are on call. They're not used for personal business but they're... Okay. So they can respond to calls. Okay. Thank you. Appreciate that. Any other questions? Chair would entertain a motion. Council member Ryan. Thank you, Mayor. I would move approval of agenda item 2B. Council member Duff. Second. All right. We have a motion and second for agenda item 2B. All in favor, please signify by saying aye. Aye. All opposed by like sign. Nay. Passes four to one. Moving on to agenda item 2C. Council member Gregory, you've got a... I have filled out the paperwork to recuse myself. All right. Moving on to item 2C is considered option of an ordinance accepting a competitive proposal and awarding a contract for the management of the city St oke Denton Entrepreneur Center. Thank you, Mayor and Council. Brian Langley, Deputy City Manager. Caroline Booth is not feeling well today so I'll be doing the presentation on Stoke. I know that you had a detailed presentation on this just a couple of weeks ago. So I'll try to go through this very quickly. On October 24th, the council gave direction to proceed with the Hickory and Rail Ventures proposal for the Stoke Center. You did have some questions about the contracts and some changes. We went back, we've made those, we've added some recitals to the ordinance. We went back and clarified the payment arrangements in the contract and incorporated a sublease. So that's all been included in your backup. Just very briefly, the vision of the proposal is to have St oke be managed as a thriving startup community for entrepreneurs. The business model is built on decreasing the city's financial obligations that we've talked to you about before and I'll show you some details on that shortly. The Hickory and Rail Ventures proposal also brings to the city some different partners. The University of North Texas, Techno, Brand Accelerant, and Denton Angels, all organizations that we've talked about previously. As we've mentioned to you as well, there are metrics and deliverables that are in the contract with HRV related to members, marketing, programming events, partnerships. There's monthly financial information that will be provided and also a comprehensive annual report. As we mentioned to you last time, this is the comparison of the financial operations of current operations are at the top on the right hand side of the screen and on the lower right hand side would be the HRV ventures of what the revised financials would be. Essentially over the three year period, this proposal would save the city $241,000 compared to our current operations. So that's my presentation. I'll be happy to answer any questions that you may have. Any questions, Brian? Seeing none, Chair, I'm going to take a motion. I move approval. We have a motion and a second. All in favor, please signify by saying aye. Aye. All opposed by like sign. Motion carries 4-0. Okay. Thank you. Thank you. Somebody would please tell Council Member Gregory he can return. I think they went and got him. Next item on the agenda is agenda item E, which is considered approval. Nope, nope, wrong. Missed one. Item D, consider a motion to reconsider holding a public hearing and adopting an ordinance of the City of Denton, Texas regarding initial zoning classification neighborhood residential 6. I have a question about this for legal. So here we're just considering the motion for reconsider ation. Let's say for instance if this passes, we then we don't have to do any other action like a motion to postpone. It will automatically then have to be republicized and then put back on the agenda as a public hearing. Correct. All right. There probably is no present is there I don't there's no presentation for that. Yeah, I requested this. Oh, yes. I'm sorry, Council Member Gregory. Oh, what did you want to finish? I was going to go ahead and move to. Oh, yeah. Well, I just requested this because I had a conversation with the applicant after the meeting and felt that and I've done this before felt that there was some information that he was unable or for some reason didn't convey and I thought it was germane to the discussion and just wanted to give an opportunity to come back and share that with us because you know, we can still have the same vote but I think is an important decision and wanted him to have the opportunity to say that. So yes. Well, I'm grateful that you put it on the agenda. I thought after the meeting that it was probably that we acted too hastily. So I would move to reconsider. I can't. Second. So does the second also have to come from someone? No, no, no. In that case, I will second. All right. We have a motion and a second to reconsider. All in favor say aye. Aye. All opposed by like sign. Motion to reconsider passes. Thank you all very much. Agenda item E is consider approval of appointees to the City Hall West Steering Committee. On the last item, do we need to move to postpone? No, I think go ahead. Okay. Yeah, it will be reposted as a public hearing and put back on the agenda. Okay. We're good. Oh, yes. I'm sorry. Yes, sir. Good evening, mayors, members of council. I'm coming back before you this evening for nominations to the City Hall West Steering Committee. My name is Martin Nelson, Director of Transportation and Facilities. In October, this council approved Resolution 2017-040, creating the committee that Steering Committee was set up to determine the future use and development plan for City Hall West. This evening's item is to establish nominees for the Ste ering Committee so that we may initiate the planning process on that particular facility. What we have here in front of you this evening is the list of names that were submitted by council as of midday on Friday afternoon. I understand we have a couple of others that have been submitted as of today. One was Mr. Rob Hodak by Councilmember Gregory. Mayor, I believe you had submitted the name of Peggy Riddle . Yes. And Mayor Pro Tem had indicated she may have a name for consideration as well this evening. Yeah, Rachel Weaver. Rachel Weaver, very well. That would put us at basically 20 of the 21 members filled. That would put us in a position, if this slate of nominees is approved, put us in a position certainly to start moving forward with a quorum of Steering Committee. Okay. Any questions for staff? So we're just basically approving the names that you have and we've got one name left. One vacancy by Councilmember Briggs and she is under consideration with an individual at this point in time. Okay, great. All right. Yes, Councilmember Gregory. I move approval of the names with the additions mentioned this evening. Councilmember Ryan. I'll second. So we have a motion to approve the list on the screen with the additional names that have been presented tonight. Yes, I'm sorry, Mayor Pro Tem. I just had a small point of discussion. Yes, I'm sorry. Go ahead. So I guess the first draft that I got of the list of names, there were five women nominated and 10 men nominated at that time. So I made a concerted effort to try to equalize the balance of women and men on that committee. I wasn't planning to appoint three women, but I realized that was the only way there would be some type of equal arrangement between the genders there. So I just want to bring people's awareness to if you're appointing three men to these committees and that means that somebody else has to appoint three women to reach some type of parity or you're going to have a committee that is 75% or 80% male. So I would just ask that in the future, I don't want to have like an ordinance or resolution or something saying that we need to reserve spots. I would think that we could not do that, but I think it's going to involve consciousness on the part of us when we're appointing people. Hey, probably don't appoint all one gender. Otherwise you're going to skew the balance on the committee . So that's my discussion point. All right. Thank you. Any other discussion? We had a motion in the second. Yes, we have. All in favor signify by saying aye. Aye. All opposed by like sign. Motion carries unanimously. Well, not unanimously. Five, zero. Okay. That brings us to our concluding items. Any concluding items? Yes, Councilmember Ryan. Thank you, Mayor. I just want to give a thank you to customer service. One of the people that was affected by the fire at the corner of Sherman and Locust that they were very amenable to get their power turned on at their new residents and very helpful in the situation. Good. Fantastic. Along those same veins, I would like to send a shout out to the city departments that really helped get back up and running. You know, the collapse of the floor in the apartment building affected basically three apartments, one in the middle, you know, the second one that collapsed on the one below it. But the rest of them had to be evacuated. But I understand they've gotten it turned around real quickly. So good kudos to the engineering department, the fire department, police department, and all those that are involved, building inspections, code inspections, to get people back in there as quickly as possible. So thank you all so much for that. Yes, Councilmember Gregory. And Councilmember Ryan says that it's not too late to sign up to ride your bicycle Saturday in the Turkey Roll. It's the last organized bike ride of the year in the region . It's Saturday. It's in beautiful downtown Denton. It's over at Immaculate Conception Church. And it's - service projects come out and ride. What's the route? What's it made? 60 miles in it? The routes go - there's an 8 mile, 26 mile, 38 mile, 54 mile, and 68 mile. Todd, I appreciate you that you signed up for that 68 mile run. Yes, yes. Mayor Proctor. Also, if you decide to do that ride and you're tired at 25 miles, don't decide to do the 38 mile when you're already tired. So just letting people know, it's not a good idea. A little experience they're sharing with us. Thank you. Although they do have - Concluding items. If not, we'll stand adjourned at 633. Thank you. Thank you.