Nov 14, 2017 City Council on 2017-11-14 12:00 PM
November 14, 2017 City Council
Full Transcript
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.