Dec 12, 2017 City Council on 2017-12-12 1:00 PM

Welcome, everyone, to this meeting of the Denton City Council on Tuesday, December 12, 2017. It is 1.03 p.m. And we will move forward through our agenda. We have on our first agenda citizen comments on consent agenda items. I don't see any blue cards for this specific agenda item. A request for clarification of agenda items listed on the agenda for December 12, 2017. Ms. Member Briggs. So I would like to request on the consent agenda to pull item B for discussion. And under individual consideration, item B, I'd like for council to consider to remove the item to a work session. Okay. And what's our first work session in Jan -- what's our first meeting in January? We've denied. Is that okay? That's okay with me if it's okay with council. Yeah. All right. Okay. The 9th of January. So agenda item 2B for item for individual consideration will be pulled until January the 9th. And you said consent agenda item B, as in Baker? Mm-hmm. Is that -- and I believe you're recusing from one of them. Which one? Yes. I will be recusing from work session item B as well. Okay. Item B. And I have one more question that's on the UNT, it's consent agenda item G. So I'm curious on the -- just to clarify the cost, the 112,000, that is our share of the study. And okay. So and was the study our idea or UNT's idea? A little background. Both. Okay. Yeah. The background on this is we've been meeting with the UNT administrative staff for several months now. And one of the meetings this summer, there was a request to close two or three streets around the campus, Highland Bay 1, and I think in one of the other avenues, I'm not sure if that was A or not. You know, and our position at that point in time was they had recently done a traffic study which appeared to us to be very different methodology than we would use. It was more of a counting type study, more of a pedestrian study. And the approach that we took is that we removed this traffic analysis out of the small area plan in order to work with one consultant that we could both agree on with the methodology, study not only the area around the campus but the area around -- in the smaller plan in general in order to have a similar set of facts, to even have a conversation. There was -- from UNT's perspective, they're envisioning a more walkable campus from our perspective. We need the traffic data so we can have an intelligent conversation. If we close one street, what happens through modeling with the other streets? How are we redistributing traffic, that sort of thing? So it was really agreed upon that we would need to do this to work on a common set of facts. Can I follow up on that? Oh, of course. We just approved a small area plan and that study included traffic. So is that going to correlate? Will they get access to this study? Yes. Is the timing good? Not only will the traffic study sync up with the small area plan, but UNT's got a presence on both as well. They're going to be working with us on the traffic study and they also have a presence with the small area plan. So really it's in our attempt to not -- to avoid any conflict down the road and have a meaningful discussion based on facts and not perceptions on their end. Because our goals are slightly different. We're looking at moving traffic and protecting infrastructure. They're looking at pedestrian -- closing off streets for pedestrian safety, that sort of thing. So we're trying to figure out how to sync everything up into one study. Thank you. Yes, Councilmember Ryan. Excuse me. I'd like to pull items G and H. It's mainly about H, but since they're interconnected, they have individual consideration on those items. Okay. Do you want a staff presentation? That would be good if they can have a little something to give to us. I think I'll send an email off so they're aware of that. Okay. Great. All right. Anybody else want to recognize the more festive side of the dais? So thank you all for bringing us into the holiday spirit. And I apologize for my shortcoming in that regard. Yes. Mayor Pro Tem. On Consent Agenda, item E for the IOF Cemetery and the Oak wood Cemetery, were those the bond funds or is it a combination of the bond funds plus the budget amendment that we did? Because I remember we had like a $100,000 budget amendment. These were mostly the funds that I think it was $300,000 that was approved by the council to go to the project plus some other dollars that had been allocated in the budget process for that. So those are the funds. Okay. That was my question. Thank you. Because I think we said just take them out of the fund balance. That's right. We did a budget amendment. We brought that back to the council. This is less than the budget that we had for the project. Okay. And before we -- any other clarification of agenda items? Before we move on to our work session, I just want to -- because most people may leave before we get to the closed sessions if we could show off our new glass there. If Mr. McDonald could flip that switch right behind him, you'll notice that instead of having to draw the blinds, we can simply flip a switch and when we're into executive sessions. So thank you all very much for that. I think that's very cool. Very cool. You're like, okay, Mayor, let's move on. All right. We're moving on to our work session reports. Agenda item 3A is receive report and hold discussion to give staff direction regarding the energy management organization review being conducted by Deloitte. Good afternoon, Mayor, members of the council. As you know, we've been working with Deloitte to look at some aspects of the DME operations. We hired Deloitte most recently to look at some of the benchmarking for our energy management organization and to also do an overall assessment of that organization and the governance policies for that. So today we have with us Stephen Engler and Tim Metz and they're going to provide a presentation to you on their findings. This is the same presentation that we provided to the public utilities board yesterday. So Stephen. Thank you, Brian. Good afternoon, Mayor and council. Thanks for having us back. Steve Engler and my colleague Tim, we're going to walk through a summary of our findings, plan about 30 to 40 minutes of prepared remarks, but happy to take your questions throughout that time or at the end. So just to give you an overview of what we're going to cover, we'll start out with the objectives and then kind of reset the framework under which we were asked to come and do the assessment, talk about the assessment itself, the scope of the review and how we conducted it. Then we'll talk about the delayed capability maturity model , which is the benchmark that we use in these types of assessments and how we frame that given the entity that we're looking at. And then we'll go into some details of the summary results and the recommendations of that. Then we'll talk a little bit about the benchmark analysis for fiscal '17 and beyond. If you recall the last time we were here, we did kind of a look back on the previous year's benchmarks and we'll have some recommendations around next steps for that as well. And again, if you have questions throughout, please feel free to interrupt. So just to kind of reset the context with which we were asked to come and do this assessment, one of the questions that we received, I believe from council the last time we were here, was to identify the risks that have been introduced to Denton Electric or the EMO since bringing the energy management function in-house. That kind of set the stage for based on those risks that the company manages, what are the capabilities of the organization to identify, to monitor, and to mitigate those risks. And then finally, the last piece, as I mentioned, was to analyze some different recommended approaches for establishing fiscal '17 benchmark for the performance of DME and make some recommendations as to how to proceed. So that's kind of the charge that we were given. And I spent a couple minutes just kind of setting the stage and talking about the concepts that really feed into the work that we did and how we perform these assessments because the context of the organization and the type of transacting profile is very important in how we not only do the assessment itself, but in terms of the recommendations that we make. And we try to draw a distinction between risk and uncertainty. Oftentimes we use those words kind of interchangeably. In this context, we talk about risk specifically as the possibility of suffering from adverse outcomes. And in this case, those adverse outcomes might be higher rates for customers, higher costs to the utility, or lower revenues. In contrast, when we talk about uncertainty, we're referring to unknown events where the probability of the occurrence is difficult to quantify. And the difference there may be subtle, but it's around the risk of -- the risk would be that the cost would increase or the revenues would decrease. The uncertainty is to the degree or the amount that they could change. They both talk about expectations into the future, the difference being that risk can be mitigated, whereas uncertainty will always exist. And I think therein lies the charge to a large degree of DM E and the EMO organization that's been created is how do we mitigate the risks that the utility faces by nature of the fact that they're in the business of buying and selling commodities. But in doing that in such a way that you can avoid fore going opportunities to pass benefits along ultimately to the customers. Another kind of setting the stage concept I want to talk through is just when we look at organizations, we think about the transacting mandate or the transacting profile of those organizations. And if you'll excuse the strange colors, if you look along the bottom axis, we look at organizations along a continuum from price taker in the lower left all the way through proprietary trader on the far right of that X axis. And in between are organizations that we would describe as asset optimizers. And just to explain those briefly, if I'm a price taker, it means I have exposure into the commodity markets, but I'm not going to do anything really proactive. I'm going to take the prices that the market offers me, either to buy commodities that I need or sell commodities that I have in excess. All the way to the right end of that scale would be trading companies. So organizations that are willing to take speculative positions, they may or may not have assets to back up the trading that they're doing. But these are organizations that are really on the bleeding edge, if you will, of trading activity, truly trading as opposed to transacting. And in the middle are companies that we work with often that have physical assets, have presence in the commodity market. Their objective is to optimize around those asset positions . So either maximize the revenues generated by owning an asset or if conversely minimizing the costs associated with running that asset. And we're not going to take positions that extend beyond the capacity of those assets. And if you think about those different companies along that continuum, when we look at capabilities and we do an assessment of the capabilities required to manage the risks associated with those different profiles, the things to keep in mind is that the same risks exist, whether I'm a price taker or a proprietary trader. The difference comes in probably the degree to which you're exposed to those risks, maybe the complexity and the interrelated kind of nature of those risks. And then in following that logic, the capabilities required to manage those risks will increase as you move to the right. That's the context that we try to keep this in. Our recommendations, we always try to keep, we call them fit for purpose, that if you're not proactively or speculatively trading the implications on requirements for infrastructure and policy and risk management capabilities are correspondingly lower. Okay? So just to talk about the risks for a second, I apologize, this is a bit of an eye chart with the slide. I should say that all of the recommendations that we're going to talk about here are in the written report that we have. Coming back to the first question that I mentioned when we spoke with counsel last time, the question that posed to us was what risks have we introduced to the organization by bringing this function in house? And I think the short answer to the question is that there really are very few, if any, net new risks. It's really the difference is where are those risks being managed and what's the level of exposure or the complexity of those risks that the EMO is now managing. If you look down the left-hand column, it starts with market risk on the top and then down through credit operations, model risk, and some others . These are all very common risk areas that we would see for an organization that's active in the commodity markets, an energy company that owns assets and is in a market like ERCOT. These risks exist whether you're a very small player or a very large complex trader. And in most cases, these risks existed prior to the establishment of the EMO three years ago. The difference really is the management or the mitigation of those risks was outsourced via the contract that you had with the third-party provider . And now in the current state, in our view, those risks are recognized to still exist but have been managed in-house as opposed to being outsour ced. I think that's a key distinction and maybe a clarification or maybe a further discussion from the conversation we had last time because in our assessment, again, there really are no net new risks to the organization with the one exception probably being the renewable variability risk. With the increase of renewable sources into the energy portfolio, you are probably more exposed than you were before, and especially if you moved to the 100 percent goal that the variability of the availability of those assets will introduce risk to the organization that's probably slightly different than would have been managed before with traditional fossil-based generation assets. I think that then will probably translate to more complex price risk. So how do you back up those assets? How do you fill in those potential gaps in the day ahead, the week ahead, or the forward markets? I'll pause there to see if there are specific questions on this slide or the risks associated. I guess -- I mean, I hear what you're saying about there's a new risk given if we move our renewable portfolio to either 70 or 100 percent. But yet when we think about -- because the risk is they don 't show up. And that's the uncertainty, I believe, is what I heard you saying earlier on. But the risk is mitigated in that you plan or you have a plan for those moments where they don't. It's an additional risk, but do you see it as an unmanage able one, I guess? And I wouldn't say that -- No, I don't mean to imply that at all. And I understand that the renewable plan and the work that 's going on relative to that and the contracts and the type of contracts and the supply plan that you have is really designed to anticipate when those gaps might occur and where you've got back up. And then the DEC obviously is the ultimate backup, as that report has shown as well. Thank you. Appreciate it. Okay. All right. So let's get into what we did and how we did it. I'll quickly go through this. Our objectives were really to understand the DME, the trans acting profile, and the current capabilities of the organization. Remember, getting back to where are you on that continuum informs us as far as where we think you need to be in terms of risk management capabilities. The scope included everything that we would describe as front, middle, and back office. So front being the commercial transacting, you know, ones taking the positions, middle office being the risk oversight function, and the back office is typically accounting settlements and those. But it also extended to governance, people, process and technology around all of those components. We understood the type of transacting activities that are happening today and also in the context of the renewable plan, how might that transacting profile change in the future? And we spend a fair amount of time with staff talking about risk reporting and the capabilities there and what are the things that you're looking at. And then again, in the future, what are the things that you might need to look at that might be slightly different? In order to do this, we spent time with staff and got -- we were provided with a host of information including policies, procedure documents, existing risk reports. We spent a lot of time talking to staff about what they do and how they do it and, you know, kind of incorporating that into our benchmarks so we could answer some questions around where you are today and where do we think you need to be. As I said, we spent a lot of time also talking about the future state and where things are evolving to take that into consideration with our recommendations. We developed a draft set of recommendations, discussed those with staff and had a little bit of back and forth in terms of shaping those to the final recommendations that you have in the report and that we'll summarize here. This slide is meant to be illustrative of the different maturity stages. I should say that the bullets on here aren't meant to be specific to DME. They're really just descriptive of that level of maturity. We look at the categories down the left-hand side, governance, process, people and technology, and within each of these categories we have a number of elements or components that we assess specifically and I think those are included in the appendix to this report. And then we look at what we've defined into three different stages of maturity. And if you think back to my comments on the different types of transacting profiles from price taker up through proprietary trader, you can think about these maturity stages similarly. There's nothing inherently good or bad about being in any one maturity stage. It's more a question of timing often that when we look at younger organizations, if you will, naturally they'll tend to be more in the developing stage. More mature organizations in terms of how long they've been around, that's when you start to extend in our experience into the prevalent and the leading practice areas. So the question is how long you stay in each one of these areas in terms of the development of the capabilities and does that level of maturity match the risk profile that you have? Sorry, I just lost my train of thought. I'm going to make another comment. It'll come back to me. Okay. So and when we do these assessments, sorry for the blip, as I said we talked about where the company is today and we think about where you're going, what's evolving, what's changing. So when we develop the results of these assessments, which we'll walk through in a minute, we tend to identify where we think the organization is currently and then our recommendations are geared to drive the organization to where we think you should be or need to be based on the risk profile that we anticipate. Okay. So with that I'm going to hand it to Tim and he's going to go through the specific results. Thanks, Steve. I guess before I jump into the results, maybe kind of wanted to give an overview, kind of an executive summary of kind of what we saw and what we heard. I mean I think overall everything that we heard made a lot of sense. We didn't find any glaring gaps or holes given the size of the organization, their transacting mandate and how they operate. I think it's very consistent with where we kind of see you in the growth of the organization from just a couple years ago, kind of three years ago starting it up to where you are now. So as it relates to kind of looking at the results at a high level, in addition to the developing prevalent and leading evolutionary maturities that Steve talked about on the previous slide in the four main categories, we added the recommendations to that. So at each category a high, medium and low priority. And then we also identified the risks that those recommendations would map back to on the slide that Steve talked about a little while ago. So in each of these categories, governance, process, people , technology, there's really a whole bunch of individual elements that when taken together affect the governance or represent the governance. And so when we look at identifying where the current state is using governance as an example, what we do is we go through each of those individual pieces , things like risk management committee, the risk policy, objectives, the risk management program. And we look at and identify where we think the current state is based on what we're hearing and what we've read. And then also the recommended future state. And so when we take all of those individual pieces, the summary that you get is what you see on this slide here in terms of the current state across each of the categories and then the future state. So as you can see, all of the current state assessments are right there in the developing. Some are kind of right there in the middle of it. Some are kind of on the edge of developing. And there's really, there's not necessarily a science behind it. We're not quantitatively placing these, but really kind of taking a look at the results as a whole and identifying where you are. And so as you can see in terms of the recommended future state, we have recommended and what we heard is kind of moving into the middle, right in the middle of the prevalent, all the way to kind of on governance and process to the edge of leading. And so in the case of a couple of these, it might look like big movements, but as we get into the recommendations, I think what you'll see is there is a lot of low-hanging fruit here. Some relatively simple things, light lifting things that could be done in order to really enhance the governance and especially the technology as well and really take big steps moving forward as you look to implement those recommendations. Any questions? Okay. So now I wanted to take a couple of minutes to walk through some of the recommendations. So all the recommendations on this slide represent the high -priority recommendations that were identified on the previous slide. And so as you can see, the governance really has the bulk of the recommendations. And if you were to group these together, I kind of talk about three to four main groups. So the first group is really kind of the first three or four bullets on this slide, which is around kind of thinking through the governance hierarchy and the oversight. So currently, that hierarchy is city council. The board has a role in that. And then there are two committees within DMA, the strategy committee and the operating committee. So kind of stepping back and thinking through that and asking the question, is that the right hierarchy to have? And so one of our recommendations is that at the DME level to consider consolidating the strategy and the operating committee, making it a single risk management committee. Part of that is there's a significant overlap in the people that sit on both of those committees. And so having a more focused, concentrated group to provide that oversight would likely pay dividends. And that includes taking a look at the governance document, the risk policy, the procedures manuals as well. I think it's clear that when both of those documents were set up early on, a lot of thought was given to how the oversight would be, the different processes that would comprise the risk management program. And I think just over time, as things have evolved, some of those things have changed. Some of the, they're doing some of those things. There's some new things that, from a risk management perspective, that are being done. And so just going back through that and making sure that that document's tight and accurately represents what's being done would again pay dividends. The next group of it, really right in the middle of the slide, update appendix A and appendix E of the risk policy. Again, it's about making sure that those, the limits and the approved products are specific and representative of what the front office and what the energy management organization is focused on. And then finally, the last three, I guess the last group of three, actually step back. So on the last bullet then, reconcile the DOA. DOA is delegation of authority memorandum. So there's a memo that goes out on a periodic basis. Just making sure that that, as you look to make changes to appendix A and E, making sure that those changes kind of carry through into that memorand um that gets sent out. And so then the last main bucket is around the design and document the financial hedge strategy, quantify the risk profile annually, and define risk limits linked to objectives. So kind of to tie back to something we've already talked a little bit about, it's, you know, as you've introduced a little bit more uncertainty into the portfolio related to the renewable supply variability, kind of taking a step back and making sure that the variability is well understood, the potential impact, cost impact or rate impact of that variability can be quantified, and that there's a mitigation plan there to manage that, to the point made earlier. And we'll come back to that piece of it as well when we talk, when we get to the benchmark piece. Also on the process side, it's really about the communications are focused on reporting and communication, making sure that there's a clear set of reports that can be provided not only within DME, but, you know, to the city council and to the board as well. And then just making sure that everybody is, you know, has a consistent set of those reports so that everybody is, you know, talking from the same sheet of music, if you will. On the technology side, I think one of the things that we heard and learned is that, you know, the systems and the technology that staff uses on a day-to-day basis, there are, you know, there's some gaps in the functionality and the capabilities of that system. And so taking a look at what it is they need to support the program and finding a solution that can be implemented in order to support the day-to-day activities would help take a big step forward. And then finally around the people, making sure that across the front, middle, back office, so the front office being the group that executes transactions, the middle group, the group that is responsible for the risk oversight and the back office, the group that accounts for it, making sure that there's, you know, there's redundant resources across those groups to help step into, you know, any gaps in resourcing that might exist. And so it's really about making sure there's redundancy across those resources to support the mission of the energy and risk management program. Okay. A couple of questions. Councilmember Hutzpeth. Thank you, Mayor. Regarding the technology component, assuming it's functioning currently, so what your analysis is, there's ways to pare that down or remove some processes , steps. I'm assuming there's some kind of -- they have a methodology currently, and this is saying that there can -- that can be paired down. Am I on the right track there? I don't know about paired down. I think what we heard -- what we saw and what we heard is that the system that's currently in place doesn't have all of the capabilities that DME would need in order to oversee and manage the risk management program, and risk is currently designed. It doesn't necessarily have the analytics that are needed. There's limited reporting capabilities. So -- and this kind of ties into the people recommendation here. I think there's a lot of effort right now, a lot of manual effort that goes into being able to prepare reports on a daily basis. Yeah, there are -- there are certainly technology solutions out there that can help facilitate those things, such that, you know, the resources aren't using all of their time preparing report -- manually preparing reports in more time, analyzing, you know, and having time to respond to the risks that the utility faces. So on the technology front, it's about, you know, as -- you know, defining what's needed, what capabilities are needed, what reports are needed, and then finding a solution that's really fit for purpose. It might be something that's, you know, cheaper than the current system that's been implemented and being used, but it's kind of less about the cost and more about how does it support the mission and the day-to-day activities of the utility. Okay. So just to make sure I'm tracking with you, so the technology component, the people component, that would be -- so for example, if you find a technology that completes the reporting faster, more efficiently, more accurately, that would then dovetail into people as they're assigned positions, that sort of thing. Am I right? Well, it would certainly make the -- it certainly help facilitate the day-to-day activities of the individuals involved in the program, absolutely. Okay. All right. Thank you. I've got a question on the prepared daily portfolio level risk report. What is that exactly, and is that prepared for the day ahead or for the current day? I mean, and what's the purpose of that? So it's more of a forward-looking report. So, you know, when we think about -- when I think about risk management, you know, I might think about it in the context of a rate -- the rate year, for example. And so if I -- you know, if I'm managing -- my risk management program is focused on managing the rate charge to the customer, I might look at a rate at risk. So over the course of the next year, how much variability might there be in rates given supply is going to change over time and prices are going to change over time? And that might then inform decisions I make about, you know , what to do in the day ahead or what to do a week from now or what to do in the forward markets. So that daily portfolio level risk report would supply would help everybody understand what the risk in rates might be for a particular year and then drive decision-making on how to mitigate those risks. Okay. I might have read that. I was thinking this is a daily report, but that's not what you're saying. You're saying this is a report that covers a certain span of time based upon sort of an overall risk report based upon assumptions of, you know, renewables and either showing up or not showing up. So it's not a -- it's not a daily report is what -- or is it? Yeah, it can be. It can be a daily or weekly report. The daily focus here focuses on, yeah, how often do I send it out? The portfolio level report goes to the over what period of time am I looking? Gotcha. Okay. I'm looking at a rate year or calendar year, for example. That's helpful. I appreciate that. Thank you. You're welcome. Any other questions for this slide? Oh, are we through with this slide, people? Any other questions so far? Okay. All right. Go ahead. Okay. And not much more to say here. I think we covered -- I covered this off on one of the previous slides. So when we looked at the program, I think that when you look at how the organization is structured, staffed, you know, there's a lot of the capabilities are there to manage the risks the utility currently faces. And then we talked about the technology piece as well. Okay. Anything you'd add, Steve? Okay. So now we'll transition to the FY17 benchmark analysis. So I guess before we get into the results of the analysis, I wanted to walk through the two options that we really looked at. And then we'll also talk a little bit about an alternative approach to perhaps consider. So the really two main approaches, the first one being looking at the day ahead -- using the day ahead power prices and a three and a half heat rate adder. So if you recall the last time we talked about the benchmark, this one is in a lot of ways very similar to that benchmark with the third party. And so the three and a half heat rate adder, if you recall, represents the risk associated with providing the power as well as some component of that being profit or -- profit margin or premium. And so in this case, option one would look at what the day ahead prices for electricity were over the course of the year in question. So FY17, take those as a function of the load that was supplied. So how much electricity did you need, adding in that three and a half heat rate adder to establish the benchmark. And so it has some benefits. It has some disadvantages. One of the main advantages is that it's very easy to measure. It's very easy to go out to ERCOT, pull down day ahead power prices. The utility would know the load that was supplied, and you could very easily quantify it. One of the disadvantages is that it's constantly moving with however power prices are moving throughout the year. So as you go through the year, if generally prices are rising, the benchmark is going to rise over time and vice versa. And then the other aspect of this is it's always going to include some premium in there related to the three and a half heat rate adder. And so one of the things that we did, you'll see on the previous -- the next slide is we looked at this benchmark, option one, both with the adder and without the adder, to provide an understanding of how much of a cushion that that provided in the benchmark. And then the second option is -- really uses a forward curve approach. So on any point -- on any day and time, I can go out to the financial markets and I can see what the markets expect the price of electricity to be, you know, one year from now, two years from now. And so this benchmark uses the forward curve on a particular day, so in this case the end of September, right before you start the fiscal year. So we went back in the case of the analysis and looked at what the price for power was in ERCOT on September 30th of 2016. And then we used that forward curve to -- and the load, again, a forecast of the load, to establish a benchmark that then the EMO would manage against in order to, you know, demonstrate cost savings or value, depending on how you describe it. And so the advantage of this is it's market-based and you can set a very clear target at the beginning of the year to manage to. The disadvantage is that it can be -- it's disconnected from objectives, risk, and the impact of uncertainty, which we talked a little bit about in some of the previous slides. So I guess before I move on to the results, I just wanted to pause real quick and see if you had any questions about either of those. Any questions? Okay. So in terms of the table that we have here, the top third is what the benchmark calculation was in the different options. And again, option two kind of has -- sorry, option one kind of has option 1A and 1B with and without that heat rate adder. The middle section here were the costs for FY17 as supplied by DME. And then the bottom third are the savings. So I guess if we jump to the bottom real quick, the good news is that under all three benchmark scenarios there were cost savings for FY17. The level of those obviously differs a little bit. Is there a question? Yeah. No, go ahead. Finish your thought because I just have -- yeah. So as you can see, and we'll go back up to the top and we look at the benchmark calculation under option one, you've got about 37 million in the case of where you're just -- you're looking at the day ahead and the heat rate adder, and about 29 million in the case where you're just looking at the day ahead heat rate. So the difference between those two and then -- and thus the corresponding difference down below in the savings is purely a function of that premium, the three and a half heat rate premium, which was very similar to the premium that was embedded in the previous contract. And then when you look at the forward curve, which as I mentioned was established on 9/30/2016, the savings for FY17 would be about $4 million. Okay. Yeah, the question is -- make sure because it's been a few days since I read this. So the EMO costs provided by EMO, that represents our cost of energy and does that also -- or does that just represent all the expenses associated with the production or with DME? In other words, it's not just the energy cost, but it's personnel, the EMO, the MMO group expenses and things such as that. Okay. So that's all in. That's all in there. That's all in. All right. So if you look at the -- I say worst case scenario, but the one that shows the least amount of savings is that middle option, which is the option without the heat rate adder. So -- but when you look at it, you go from a $2 million savings to a $10 million savings simply by what benchmark you're choosing, which that's a big spread. I mean, so it's just a little -- it's interesting. And I eventually would like to hear from DME as far as what they think is the more appropriate benchmark because that's been our concern is how do we measure this? But when you can choose one that creates a $10 million savings and the other one -- but which one represents more accurately the market and is that -- would that be option three? So you're hitting on the exact question, I think. And when we spoke last time, one of our observations was whatever benchmark you choose, everyone needs to be crystal clear on the elements, the components of it, how it's calculated and what drives it one way or the other. The question, I think, to read in your question a little bit as well is what's reality in terms of -- Absolutely. -- how could -- if we're effectively looking to replace what the EMO is doing, would anybody be willing to do that in the market similar to the previous agreements you had at a zero premium? Probably not. I mean, they would want to be compensated for assuming that risk. If you remember before -- Yes. -- the risks before were all outsourced and effective. The management of those risks were all outsourced. So the question becomes what's a reasonable heat rate number that someone would be willing to absorb those risks and aware that risk on your behalf? And so is that really what -- so these options -- because that's a good point. In other words, if we decided to do something different and let's say outsource it, then which one of these three options would more accurately represent what the requirements would be in the marketplace for that? And so either -- I'd like to hear what y'all's thoughts are on that. Just from just a professional perspective and then at some point hear DME's thoughts on what would more -- and so I'll ask you first. If hypothetically speaking -- obviously nobody's made this decision, but this is what the whole purpose of this presentation is. If we were to say, okay, we had to -- something happened and we lost the EMO for some crazy reason. We had to go out and contract it. Which one of these three options do you see based upon your professional opinion and just expertise in the marketplace say would more accurately reflect what we would expect? I think it would be something very similar to option one. I don't know that the premium, the three and a half heat rate premium would be one and a half or if it would be three and a half, but it would certainly be some cost for the energy, probably using the day ahead as some type of -- as a benchmark plus some premium. And some factors I think will drive whether that premium is one and a half versus three and a half, including kind of the number of counter parties that are willing to provide the service. So the more counter parties you could get to bid on that, I think the more better pricing or better premiums you could expect. But it would probably be something very similar to one. So what I heard you just say then was the second -- the $29 million savings would not even be the floor because somebody is going to ask for at least some adder. Whereas the $36 or $37 million, that may be the top end. So if you had a one and a half or two -- is that a percent or is that just a dollar amount or is that the heat rate -- add two to the heat rate, I guess. You're probably looking at somewhere around $32 to $33 million or somewhere in the middle between those two. Okay. All right. Okay. So you don't want to get to where you can choose which one just to sort of fit the savings that you may try to achieve. All right. I appreciate that. Thank you for that. Just to tee up the -- sorry. My only point is I think you framed that well because the middle option that we're seeing here, the middle one basically is probably the most conservative option without actually going out and obtaining bids. I don't know that anybody could really answer your question without having formal bids submitted. No, I understand. Sure. I think you're right. It would probably be somewhere in the middle there. Okay. So just to maybe tee up the transition because we looked at these options as kind of a cost-based benchmark. What Tim is going to describe now is more of a performance- based benchmark, which Tim mentioned kind of looking at a rate at risk. What we're going to walk through next is something for the council and for the board to consider. What we often suggest to organizations is what is it that you're striving for as an organizational goal? What we heard a lot when we spoke with staff almost in every meeting that we talked about was the ultimate responsibility of that organization is to manage the prices that are passed through to the ratepayers, to the residents of Denton. And I'm sorry, one last question before we move on from that last slide just so I make sure I understand. So on the option, let's say let's use option one that you were talking about. That's where you go out and you contract with someone and they may give you a premium added onto the heat rate. But that cost, just to be clear, but that cost, which is a third party's energy costs, also includes again, once again, the expenses for DME as far as it's an all-in cost, even including the third party contract. Or is this just an energy cost that you're, I'm trying to make sure I'm understanding what the savings are because the EMO costs us some money just to have it. And if they're included in this, that's great. But if not, then I've got to subtract that. I just want to make sure I'm not having to subtract anything out of these savings to get to a net number. So I think if you took the costs for the EMO that were non- energy related, I think if you were outsourcing it, a chunk of them might go away. I don't know that they would all go away. You still need to have oversight of that contract, oversight of the counterparty. There's still some back office functions that would exist. So it's not as if all of those EMO costs would go away, but some portion of them would. Is my question making sense as far as I just, because the whole point of this discussion, I believe was to look at in the past, we've said, well, by having this organization, we're able to save X amount of dollars, but we didn't really have a good benchmark to measure that by. This is what we're trying to establish here. And I just want to be sure that I'm understanding that, okay, if we use this benchmark and the EMO costs us, say we use benchmark one, it's $37 million. And EMO costs us, I don't know, what is it, $3 million, I 'll just pick a number. That I'm not having to subtract off of these savings the cost of the EMO that it's already included in that benchmarking cost. Is that, so, and the answer to that question is yes, they are. Yes. Okay. All right. Thank you. Yes, Mayor Pro Tem. Then what is the EMO cost line? The $26.5 million here. That is the energy that was procured in FY17 plus the cost to support the EMO, so personnel, systems, other expenses. I thought, but I thought you were saying that the EMO costs were already in the benchmark costs. I guess I'm confused by the question. Wasn't your question if the EMO costs are included in the benchmark? Yes. Yes, because if you're saying that the EMO costs, that middle line, is what the actual cost of the energy that was paid by the rate payers, which includes the part of the EMO for the salary, the staff, technology, whatever, to produce that energy, that's an all-in number for our discussions, $26 million. In our benchmark costs of $36.7 million, you've got how much the energy would cost plus you've also estimated that this is what the EMO costs associated with it, which would be similar to the middle line, whatever that subset is. Yes, in order to be apples to apples and have a savings calculation that, or savings result that made sense, you'd have to have those costs in both the benchmark and in the actuals, and those are in here. Okay. Yes, Mayor Pro Tem. So what else is included in the benchmark costs? So the benchmark cost is the energy plus the 3.5 heat rate encapsulates a lot of those other costs, it encapsulates risk, it encapsulates profit margin. So in that risk number would be the systems and the people that the third party supplier would need to have in place to effectively manage those, which they're doing in that outsourced model. Okay. So as Steve was saying, I think as you kind of continue to think about this as an evolution, so you start something out, you may start in developing and you move more into the prevalent. I would, I think it makes a lot of sense to think about the benchmark in the same way. So going into this, the frame of mind might have been, let 's be able to quantify how much we're saving in order to support the decision to establish the EMO and moving forward. I think it makes sense now as the EMO is more established and more completely managing the risks of the utility to also think about evolving how you think about the benchmark. And I think one way that makes a lot of sense is to move from cost savings to more of a performance or value add based approach. And so one way in which you might do that is to rather than think about how much did I save, well what outcomes was I able to achieve because I had this risk management function in place. And as Steve mentioned, it kind of goes back to what are you trying to manage to? What are the outcomes you're looking to promote? And when we talked with staff, we kind of heard, we heard two pieces to that. One is stable electricity rates when prices rise, but then also competitive and lower rates when prices fall. So one potential approach to that would be, well, as prices rise, I'm just going to have as much fixed price power as I possibly can so that when prices go from $50 to $100, my customers don't have to participate in $100. I think when you look at it kind of solely from that dimension, what happens is when prices fall, now you're no longer competitive and you get questions about, well, how come one town over, their prices are significantly lower than mine? And so the way in which you kind of navigate both of those, you know, both of those dimensions is you have a set of paired and market compatible objectives, and in the coming slides I'll talk a little bit more exactly what I mean by that. You have a hedge strategy with risk limits that have been demonstrated to help you achieve those objectives. And then you have to have the right infrastructure, going back to the technology question that we had earlier. You have to have the right infrastructure, the deal capture , be able to capture transactions, view them, quantify the risk and monitor in place to help you decide when to act. And so if we kind of bring it back to the benchmark, it's really the first two of these that then form -- will help form the basis for the benchmark and give you a platform to assess how well did we perform last year and how much value did we add to our customers. And I'm sure you probably got it in the upcoming slide, but -- and I appreciate that and I understand that concept and that strategy. I guess, though, as I think through it, you're -- there's still going to be at the end of the day potentially a question that says how do we measure this strategy that we've implemented with the EMO, and if you're able to benchmark items number one and two, okay, but you're still going to come back to if we didn't have it, even using one and two, what would our -- what would it have cost us and how do we measure that and how do we -- and I'm assuming that's going to be explained in the next couple slides. Absolutely, yes. So we'll walk through that in a little bit more detail in the next couple slides. So it starts with the objectives. So if we think about -- I talked about market compatible and balanced objectives. So this is -- it's kind of meant to represent what that means. And so there's kind of two pieces to the objectives. There's what we call portfolio risk or managing the customer's rate at risk. And so in this case, I would be executing transactions in order to prevent against the possibility of higher prices. We also look at the hedges -- the transactions that I have executed, how well are they doing and what do I need to do in order to make sure that as market prices fall, I'm able to pass along the value of those lower prices to my customers. Well, when you have these two objectives, they tend to be in tension with one another. In other words, every time you hedge to protect against higher prices, you create the probability that you might be wrong and you might actually forego passing along lower prices to your customers. So the way that we manage that is by having an option strategy that allows you to balance both of those things. So what I mean by that is if I've hedged a whole lot to protect against higher prices, options allow me to capture some of that value if prices were to fall because they benefit me in falling price environments. And so the combination of those two things allows me to not only protect against rising prices but also benefit from lower prices. And so these three objectives then form not only the basis for how I'm going to manage and make decisions as I go throughout the year, but they also then form the benchmark against which I'm going to assess my performance, not only relative to what I said I was going to do, but we can also use the same framework to look at, well, if I had done nothing, if I was purely a price taker, what would the cost have been? What would the impact have been to my rate payers? And what value was I able to deliver to them because I wasn 't a price taker, I was more of an asset optimizer. And the way that we do that is we explicitly state three objectives. First one, going back to that rate at risk. So I'm going to manage my energy cost adjustment so I don't pass along more than a X percent year over year rate increase to the customer. And as you go through this and you do that risk profile and the hedge strategy that we talked about in the recommendations section, you can fill in a number there. And so maybe that number is 5 percent, just to pick a number. I pair that with my second objective, which is I'm going to manage those hedges or those fixed price transactions I've placed so that customers' customer rates are never more than X percent above what the market rate for electricity might be. So in other words, if electricity prices, if power prices fell by 5 percent, I want to be able to pass along as much of that 5 percent decrease in power prices to my customers as I possibly can. And then the third piece of it is I need to have that options budget so I might say I'm going to set aside $500,000 in order to manage the tension between objective one and two. So you go throughout the year and the EMO is managing to both of those first two, really I guess all three objectives. And then you get to the end of the year and then what you do is you look back and you say, well, what actually happened? Well, from when I set my budget back on, just to pick a date, September 30th going into the year, power prices or my energy cost adjustment would have risen 7.5 percent if I hadn't done anything. But I only have to raise it 1 percent because I've actively managed my portfolio. I've hedged to protect against those higher prices. I have the benefit of this renewable portfolio. And you can measure that you did better than you said you were going to do because I was going to protect against 5 percent. It was actually 7.5 percent so I can assign a 6.5 percent value to the EMO related to managing to this objective. And you can convert that into total dollars based on what the overall energy cost adjustment would have been without having the EMO in place. And then similarly, if you look at a year, consider a year in which prices might have fallen, you can go back and you can measure how much the energy cost adjustment would have fallen or you would have been able to decrease it if you hadn't hedged. And so maybe if that was the market fell by 8 percent, well , because of the hedge program and this second objective here, you can also measure, well, I'm capable of passing back 6 percent of that 7 percent decrease. And so again, you can quantify regardless of whether prices go up or prices go down, you have the framework and the ability to quantify the value in both of those types of environments. So I want to make sure I understood what you just said. This is very all high level technical so I'm just trying to understand it. What I heard you say was that you can look at your end of the year and look at what you were able to do with the EMO either by minimizing your energy cost adjustment and/or maximizing your option, your hedging activities. So this is where I might need to help me understand. I thought what I heard you say is and what you compare that to is if you don't have an EMO, which my implication in that statement was, well, then you're just saying you're comparing it to just the performance of the market without any intervening kind of decision making either through our EMO or through some other contractor if we didn't have an EMO who would be managing our energy portfolio. Am I understanding that? Is that? Yes. Okay. Where I get my concern or my question or my observation is if you're comparing it simply to the market function, I don't know if that's realistic from the standpoint of what we would be doing as a decision maker. If we didn't have an EMO, I don't think we're going to go, well, because you have to have somebody manage it. I mean, I think per ERCOT, you have to have somebody who is it a QSE or what do they call that or something or so that means they're just saying we 're just going to pay whatever the market is. If it's high, it's high. If it's low, it's low. Is that really a strategy that is an option? I mean, I guess it could be, but I don't think you would be recommending that we, I mean, obviously by your three objectives here, you're not saying, hey, just, but you're comparing it to if it just, if you just simply went by market pricing . So I'm not understanding how that really is a realistic comparison of a sales number. Does that make sense? It does. If we go back to that option one, that's the same approach that that benchmark is using to establish that benchmark. You're purely a price taker. Now it's kind of separate the QSE, the scheduling side of it, separate the scheduling function piece of that, because that would need to be, that cost would need to be included in there because you're right. You couldn't just not schedule your load and supply. But we can, you can incorporate that in both the objective and what you're managing to and also the market, the pure price taker version of that. Okay. I need to understand when you say pure price taker option one, are you talking about that one slide that had the savings and those kinds of things? Which option are you talking about? Option one here, the very first row, the 30th. Where you had the $10 million savings? Yeah, 37. So in that scenario, you're assuming that you're just going to take whatever the market price for power is on each day that you need power. You're not, it doesn't consider any type of active management and the third party wouldn't actively manage that on your behalf either. Well, that's a very good point because that's an assumption I did not read into that option. So, these three options are simply you take what the market price is with no management of energy. Is that, is that, is that correct? It is true for option one. Option two, it's different because in option two, you're fixing the price as of September 30th of the prior year, establishing a benchmark that you then are managing to. So that's a good point that they are option one and option two are very different in that regard. Okay. All right. And that's, it's one of the maybe disadvantages of option two is, you know, because you are, you're fixing the price of power, if prices simply rose throughout the year, you would have fewer cost savings. If they fell, you would have larger cost savings. So it's, and you're not, and this goes back to the, it doesn't consider objectives or risk. You're not changing it there, you're just establishing that benchmark and forgetting about it till the end of the year when you go back and look at what the savings might have been. Okay. All right. Oh, Council Member Briggs had a question. So that was really interesting conversation. I'm glad you brought that up because I wasn't making that connection either. And so my follow-up question to that is that the savings of 10 million you confirmed was compared to the market pricing only. Is that how we, DME was getting their numbers before our savings under the prior contract? Yes. Comparing it to market pricing only? Yes. Okay. With, I guess maybe a little bit of a qualification to that . So under the prior contract, the price for power was determined based on a fixed heat rate, which was under the last proposal, 15.75 times whatever the natural gas price was on that day. Now that natural gas price went up and down just in, you're basically a price taker on the natural gas side. The heat rate was fixed. So it's a little different than option one here because now all of the power price is moving up and down. It wasn't moving quite as far up and down under the previous contract. Okay. And so I just wanted to circle back and maybe we didn't call this out on this slide, but when you look at this first column here and what was actively managed prior to go live, when we look at the commodity price risk, which is what we 're talking about here, that was not something that was actively managed. Okay, good. So yeah, it's sort of buried in there. Okay, good. I'm glad we sort of ferreted that out. That's good. Council Member Hutzbeth? Yeah. So I have a question regarding the kind of some of the conversation about the cost, right? Because that kind of, if a citizen comes to me potentially, their question is going to be exactly what you pointed out. One city over, here's how much we're paying. That's easy to find out. What's lost on me is how the energy rate or cost for that particular day, for that quarter to that, that seems like it's more difficult for the lay person to trace, find and correct me if I'm wrong. Is that something easy to look up and I'm just not up to speed on it? Because given the two scenarios, it's easy for me to call my friend in Louisville and say how much are you paying per kilowatt hour, right, or whatever that is. That's easy. So I'm trying to see, I just, I hadn't heard you speak to that because I can tell you that the natural, my natural thought is if we own it as a citizens group, then there should be savings, there should be an advantage versus someone that's strictly just buying something retail or having it managed in a retail fashion, if you will. So that's what I, that's kind of, if you could just speak to that component of first, educate me, where do I go find the daily rate on the market? So that's step one. But step two is if a citizen came and said, where's the savings because this is a municipality owned power source, where's the savings compared to someone that's just dealing with co-serve? Does that make, and if I'm wrong, correct me. No, I think I understand the question. And you're right. I think the, you know, a citizen's cost, actual cost is, you don't have real time information, necessarily real time information on that as an end user. I can look at my bill at the end of a month and see what my bill was. And depending on how rates change, I can see that, you know , last year my bill was $100, this year it's $125, you know, why? I might not understand why other than the fact that energy prices are higher. So I think that's part of it. I think the other thing, you know, is I think you were asking about retail rates. Yeah. So for example, if I'll just, my assumption is if I own it, there should be just, by the mere fact that I'm buying it wholesale and selling it retail, I mean, whatever that is, I mean, fix the terminology, but ownership should have privileges versus someone that does not own their own power company. Now, they don't have the cost with the trucks, this, that, and the other, and maybe there's more downtime than here. I just don't, I just need to understand that better. What is, what are the benefits? If not, because I'll tell you, immediately your mind goes to the rates. That's just, that's, and like you said, it may be reactive, look at the pricing. I think you're spot on, but it's a fact. It's easy to look at, and it's the initial point of a question for a citizen 99% of the time. Hey, they're paying this rate over here. You know, so I just need to understand the value and how that, if there's a savings or if there's not a savings because we have to buy trucks and poles and store equipment, if that removes the savings. I just need to understand that and understand where to go find that live energy cost for the day, the quarter, whatever that, however it's reported. Let me, let me address it. Because I think the scope of this presentation is primarily towards looking at the EMO, either with or without the EMO as far as how it affects our overall energy strategy. What you're asking, and we can get you the answer to that as far as is there a data, is there a website where somebody can go look at what the costs are for all the different utility companies for residential rates. And then understanding that that is the primary concern. But I think what we, and that's a very good question you asked because what you're asking is what's the value of having a municipally owned utility? Right. I mean, not just what, whether it's 10 cents a kilowatt hour or it's 8 cents a kilowatt hour, but what are some of the other either value added aspects or deterrents or detriments to that? And I think that's probably a little bit past their scope, but I think that that's a great question that we need to have some discussion on coming up in the future. But as far as that immediate answer of is there a website where we can, people who call you can say, here's a website, go check it out. If you know that, then that'd be great. No, I just, what I wanted to do is add to the comment you made about the value add. I don't think it's about savings because if, I mean, you could go out and you could compare what my, what's the rate in my bill to what a retailer might provide. And that's, I mean, it's a data point today, but what owning it gets you is the ability to manage the risk and manage price risk going forward. So it kind of comes back in a way to this. So that same retailer, as prices are rising, they're going to, that price is going to change every day and it's going to continue to go up. The fact that I own something, I own the assets and I can manage the risk associated with those assets allows me to make decisions that don't result in my customers bills going up day after day when prices are steadily rising. So that's the value add I think that you get from ownership . So for me, it's less about cost savings and more about what value am I adding based on the activities and the decisions I'm making to manage my risk. Council Member Duff had a question, but did you have a follow up or? You know, I just like him to move to District 1 and take that. Okay, yeah, yeah. No, but those are good questions that we can get some of the answers to. Council Member Duff. Yeah, I'm just trying to, you know, wrap my head around this whole thing. If I go back and look at what EMO does, it looks like with, I mean, there's a lot of moving parts there. I mean, they literally sit there and look at what the wind 's doing in West Texas and I'm sure they're going to be looking at the price of natural gas once we get the deck up. So it looks like to me, I mean, they're literally buying power on a 15 minute basis, I think. So you've got so many moving parts and you go into the summer when, you know, the prices are going to go up. And you know, another advantage I can see with the deck is the fact that all the coal plants are shutting down. There's some big ones shutting down into first of the year. And so where's that power going to come from? So I guess what I see is that EMO, I mean, is literally saving us money. And you know, how that's all going to work in with deck and what is deck going to cost us in all of that, you know. It's pretty complicated. Did you have a question? Oh, okay. You just looked at me like you had a question. Okay. Sorry, go ahead. Yeah, just I mean, an overarching comment. I think, you know, maybe to get back to your question before about don't we still have to compare the cost to if we were to outsource this. And I think that's a very valid point that if even if you have, you know, you follow kind of a plan like we're outlining here, which is more objective based in terms of deciding did we do well or did we not do well, there's still probably the option to have somebody else try to do well on your behalf, right? So I agree that there may be for some period of time it makes sense to still have that cost benchmark. I think overall what we're recommending and some of the comments I think tie back to that is as an organization, what are we trying to do? And if the example we're giving is we want to manage the cost per kilowatt hour that the citizens of Denton are ultimately paying. And it's our job at DME to not have the gut through the roof. And if things go in our favor, we want to participate in that favorable market. If we can agree that that's the right benchmark, then I think or if that's the right objective as an organization, what that helps you do is then decide what are the transacting activities that we're going to authorize in order for us to try to participate and achieve those objectives? What are the limits we need to define and put in our policy such that we can make sure that no one's going outside of, you know, what we what we deem to be authorized? It helps add a level of clarity to both what we're doing and how we know, you know, when we're doing that well and when things are going outside of the scope of what's expected from either the council or the board or the ratepayers. Having that objective serves those purposes in terms of defining the activities of DME, but it also can, I think, help the conversation and maybe the transparency that the councilman is getting to in terms of how do we tell our customers, our citizens, how well we're doing. I think the answer to your question lies in, you know, yes, they can go to ERCOT and see where prices settled yesterday and where would they, you know, are anticipated to go tomorrow. There's a difficult conversion from that into what's on my bill, and that's kind of the translation of wholesale to retail, and that's where you get into who owns the wires and all the systems that back that. But I think you can bake all of that in to an objective that says we don't want to pass more than a five percent increase to our customers on any given on any given year. Thank you. And then I think just to wrap up, I think Steve hit on a number of these things. You know, to the extent that, you know, you thought it made sense to go down the path of kind of moving to more of a performance or value-add- based approach for a benchmark, these would kind of be the next steps that you might take as part of that. So as Steve, you know, talked about, it's about, you know, what's the exposure, what's the range of outcomes, how am I going to -- what activities am I going to undertake to manage that exposure, all the way through the ability to set risk limits to know when you're inbounds and when you're out of bounds. So not necessarily something that needs to be done, you know, today, tomorrow, but, you know, over the course of, you know, some period of time, if that's the direction you were to move, this would be how you would approach that. Any questions, comments? Is that there's some -- never mind. Questions or comments? And as far as -- you had mentioned on the next steps, it was based upon your three options or the benchmarking. You're talking about the three options? Yes. Okay. Those. Okay. Got you. All right. Okay. I appreciate that. I guess what I -- go ahead, Brian. You're getting crowded up here. Yeah. Well, I just wanted to take -- yeah, I just wanted to take a moment to thank Tim and Stephen. I think they've done a great job working through this. I know this is very technical data, but what we want to do is come back to you in the next couple of months. We're going to bring forward the resource plan that we've been talking about with enterprise risk consulting. We've been working on that. We want the council to formally approve that. There's going to be a pro forma, new financial pro forma for DME that we'll want to talk about. And then look at these specific issues of performance of how do we want to benchmark this going forward from a value add perspective to have a policy discussion with the council about options of how we could do that, how that might look, so that on the front end you know what that's going to look like going forward. So we've got additional steps to do that going forward, but we will be doing that in the next few weeks with you. So I think this has been very helpful for us to look at that. There will also be things that we'll need to do from our organizational standpoint of bringing forward a new risk management policy, bringing that to you to have a discussion about those options and a variety of different issues. So more to come. Sure. I do have a quick question for Mr. Morrow if you, if, welcome. Thank you. Happy to be here. Yes. And I know that you are fairly new to our organization, so this is going to be a softball per se, but I'm assuming some of this, it made sense to me, but obviously you're tasked with really deciphering this report and coming up with what you believe is to be the best recommendation to move forward. And just wanted to give you an opportunity to comment. If you had any, and if not, that's okay too. Well I, thank you George Morrow, General Manager of DME. Yes, I'm happy to be here in Denton. It's been my third week, so I, yeah, I don't know everything yet. But I've been in the electric utility business for 39 years and worked a lot in this area. So power supply, power resources are my expertise. And I'm very comfortable with what I heard today. I'm very comfortable with the report that we received from Deloitte. For us, it's kind of like getting that annual physical. You know, it was three years after we implemented the EMO and it was time to do a quick assessment and give us some other places to go. So we're going to be following through on lots of the smaller recommendations that were made and doing some of the bigger things, which is updating the risk management policy that was put in place in 2014. There's some low-hanging fruit there that we're going to move forward on. And thank you for your comments in that regard. We're looking at a new model to do the kinds of mach inations and calculations that are required to do some of the benchmarking that we want to do going forward. So I think it's great that Denton has a community-owned utility, you know, 105 years old. There's lots of benefits of having a public power utility. That was one of the thoughts I had as you were discussing that, including managing and controlling your own destiny in the power markets and power resources. You can decide to go 100 percent renewable or 70 percent. In California, there's still people at 25 and 30. You'll be moving ahead of that pack pretty quickly, and you 'll be gaining some of the benefits of doing that from an environmental and rate standpoint. So local control, you can decide, you know, we want blue lights. You can say, hey, on this street, I want to go underground, or I don't want to go underground. You know, you've got a lot of things that you can't control if you weren't managing the utility that I think, as we think through all of the -- all sides of this, it's a much bigger question than just this power supply piece. So I thought the questions were great and look forward to more discussions as we move down the road. And again, I did want to thank Brian, our deputy city manager, for carrying the ball on a lot of this stuff while you were transitioning to a new general manager. And look -- and he's -- we're working very well together. Fantastic. Thank you. Appreciate it. Thank you. Okay. Thank you, gentlemen, for that. And any other questions or comments? Okay. Thank you very much. Thank you very much. Appreciate it. Let's take a quick five-minute break before we move on. , thank you. Thank you. All right. Welcome back to our meeting of Denton City Council, Tuesday , December the 12th at 2.30. We're on work session agenda item 3B, and Councilmember Br iggs has completed the proper paperwork, I believe, and to recuse herself from this item. And so we're going to now take up agenda item 3B, receive report, hold discussion, provide staff direction on -- provide direction, excuse me, on design options and schedule for the proposed reconstruction of Fire Station 3. Good afternoon, Mayor, members of council. Mark Nelson, director of transportation here with the City of Denton. Appreciate the opportunity to visit with you this afternoon on what we hope to be the last design discussion on Fire Station 3. I would like to point out we certainly have our Fire Chief, Paulsgrove, Assistant Chief Hedges, our design architect, David Robinson, with us, as well as Dean Hartley, our facilities manager, who have been participating as we move through this process. So really this afternoon, wanted to visit with you kind of where we are with the particular -- with this particular project. And really at the end of the day, end of this presentation, we have a couple more design components as it relates to the roof and the HVAC system in terms of opportunities where council may want to weigh in on those design elements and costs associated with this particular project. With that, I'll move on with maybe a little less technical presentation than what we heard in the last hour. So just to reorient you, this is the location essentially at McCormick and Avenue A. There on the -- in the red outline is the existing Station 3. You can see I-35E there on the bottom left side of the slide. That we have roughly right at three acres of property. The area here that you see the ground disturbed, that's an old hotel site that we purchased. A portion of it had to be acquired for the 35 Express project, clipping the corner of that property. And so we were able to acquire that piece of property as it fit in with the fire department's strategic plan in terms of districts and where they put their people and apparatus. This is another shot of this. This gives you the orientation. From what you've seen last time, this has moved a little bit counterclockwise. But you can see where the fire station here in this light red or pink color here is, the shading here of the access into the back of the station. And then the departure route across the existing McCormick Street onto Avenue A. Just a reminder, as part of this project, we would be looking to close a segment of McCormick Street, which is from Underwood down here to Avenue A. So a short segment. And so we'll be working with our Traffic Safety Commission. We'll have to follow through that process to make that happen. One other note, we're also working very closely with TechSt ot on the actual right-of-way lines for ultimate location for the 35 Express project through there to ensure that where we place our facility, we don't run into any hiccups down the road. So this is the more traditional design. This is one of the concepts that was brought before you back in September. This particular elevation is similar to what you see at the new station two out on McCormick and what is being constructed with the new station, station four up on Sherman Drive. Has more masonry, brick masonry elements to it versus what we looked at before was a more contemporary that had a little bit more glass and steel structure to it. So this is the layout. If you may recall, in September we brought forward three different design options. We were given the direction to move forward with the larger design option with about 16,100 square feet. And essentially what the design team has done is gone back and embraced the request from council to see where we could reduce or might we be able to reduce that total footprint. So you see in the top right corner a reduction of about 420 square feet. Some were shaved off, kind of made the vehicle bay a little skinnier, if you will. And then some changes in the living quarter and the support area. You know, primarily this vestibule area was a little bit larger. And then the entry lobby was a little bit larger as well. But there was other changes in some of the support areas on the north side of the facility as well. So when we brought this forward to you in September, we had roughly an estimate of about $5.8 million. There was a direction to move forward with -- there was a direction to move forward with a higher -- a higher or more robust foundation, which was about 190,000. So that increased that number up to about $6 million. Now as we progress through the design elements or design process, we get a little more clarity focus on what the costs are. And so now we're looking at roughly the $6.2 -- $6.28 million for the current design with recommended -- with recommended design elements. What we see here at this point in time is a couple of the design options in front of you today for discussion. What you see is the HILO, which is the city standard. We have that -- we're using that type of roofing system throughout the city. In fact, this particular facility we're in here had the roof replaced in 1992. We're looking to replace it in the next six to eight months , so roughly a 26-year lifespan on that. It's a 20-year standard. The TPO is more of a 12- to 15-year life. And so, you know, for the cost, life -- life cycle cost, we 're recommending -- staff is recommending the HILO 20-year roof. In terms of the HVAC system, what we're looking at this variable refrigerant flow, what that particular system allows is rather than having a multitude or several different units as a single unit, and it allows to -- allows the opportunity to control the temperature throughout the -- throughout different zones versus, you know, shutting down or utilizing separate units in different locations. Here those are on the VFR, the very -- VRF. It is a -- is roughly a 20-, 25-year system as well, whereas the rooftop units are going to be in about the 12- to 15-year range. And we look at about a 3.5- to 4-year payback on -- on -- in terms of operating efficiencies. >> Is the variable refrigerant flow -- is that a chiller system or is that -- no? >> Yes. >> No, it's not? Okay. That's fine. I just -- I don't even know the -- I just -- I just wasn't familiar with that. I just didn't know if it was a chiller. Okay. All right. >> Any additional questions on this? >> I can't speak because Todd's gut is taser out fixing to tase me on it. I'm just kidding. No, that's good. So you're saying the difference is only about 100 grand from staff's recommendation to whatever the other option is, it's $90,000. >> Correct. >> So -- >> On the high load versus the TPO, I believe I read in the backup that there's a significant hail difference. >> That is correct. >> Right. So that's -- that's the reason that this roof has been around since '92 for anything that were the TPO in this area has been replaced at least three times by hail during that time period? >> We've not replaced it in that time frame. We've done -- certainly we've done the maintenance process. We've gone through different maintenance. >> But any buildings we had TPO on probably got replaced due to hail. >> That would be correct, Dean. >> Actually, we don't have TPO on it. >> Actually we've been in the high load system since '93. So basically we don't have anything that has TPO on it anymore. >> Okay. Great. Great. Thank you. Any questions for staff on this? I'm assuming you're asking for direction of do we go with the staff recommendation on the high load -- >> Correct. I've got a few more slides if you -- >> Sorry? >> I have a few more slides if you -- >> Oh, okay. All right. Go ahead. Yeah. >> So I did want to bring to your attention we did have a deficit. We presented roughly about a 1.275 deficit. That's this number here to the right. Back in September due to the increase in the costs, we're looking at about a 1.6, 1.7 million dollar deficit at this point in time. Once we get closer to going out to bid, we'll get better -- a better -- or a tighter number on that and move that forward and look at working with our finance office in terms of probably a reimbursement resolution in terms of finding out exactly what that total dollar amount is. So this would be the schedule. If we receive direction, we start moving forward, final izing the construction document and then move forward with submittal for the building permit phase. Again, we'll have to -- we have to plat the property. Still need to see about doing the street closure. And then as you can see, move through this process with essentially in the December timeframe potentially initiating an 18-month construction schedule. So with that, I would take any questions that you may have. I can go back to those slides if you'd like to visit with those particular options. >> Any questions? Is it staff's direction -- staff -- is it council's direction to -- Council Member Hussbett and Mayor Potem? >> So one question. So lessons learned from the fire department on McCormick. >> I think that's right. Markingbird. So have we put in place the new construction plan that then makes it punitive if the -- would that be applied to this project? I guess is a better question. That makes it punitive for them to fall behind or for -- as we incur bumps along the road, we get a -- >> We haven't gone to that point yet in terms of advertising that. But I think what you're asking about is A plus B or the -- and we can certainly add that in and take that direction forward. >> We're studying capital projects right now, a couple road projects in this building project in particular that we might implement that in and make that recommendation to you. Not only to try to incent them and do it a little bit quicker, but obviously building those penalties if they're late. >> Okay. >> But yeah, I'm all -- I think to the -- for the value, I 'm okay with moving forward with the recommendation. >> Mayor Pro Tem. >> I just wanted to point out that the high load roof system actually has a warranty on hail of four inches, up to four inches of hail, is that right? Whereas the TPO system has no warranty on hail. >> That's correct. >> Right. >> I know way too much about commercial roofs, so I cannot get in favor of the TPO roof system for our purposes. It's going to -- there's no way we're going to have a 20- year roof, and I think what we're really looking at is more of like when there's a hail storm , we'll have to replace it. >> Okay. All right. Any other questions? All right. So direction is to go ahead and go with staff's recommendations. >> Very well. >> Yep. >> Thank you. >> All right, if somebody could maybe grab Councilmember Br iggs. >> All right, moving on to agenda item -- what session report 3C? >> Agenda item 3C, receive report, hold discussion, give staff direction regarding the potential funding for small-scale traffic improvements and Vela Athletic Complex project. >> Thank you. Mario Kenizar, City Manager, Mayor, members of the Council. Wanted to bring a couple of topics to you for your consideration and direction. One of those is, as mentioned, it's to give staff direction on the potential funding for some small-scale traffic improvements, and I'll cover those here shortly, and then also to provide some funding solutions for the Vela Athletic Complex project. Also here we have members from the finance department, also from engineering, public works, and from the parks department and finance department here to answer any specific questions that you might have. Back in August 26th of 2017 at your council retreat, one of the things that you all mentioned that you'd like for staff to consider doing is to look at some small-scale traffic improvement projects that, A, would increase the mobility of our community, that could be done quickly, designed quickly, and that could get things going. And so one of the things that we were able to do with PRET AM and our traffic engineering department is they identified six projects that they believe could get done, could get started pretty quickly, if we could identify the funding, could make an immediate impact to the community, and lastly, could be completed, certainly started, if not completed within the current fiscal year. And these are some of the areas and projects and intersections that were identified as part of that project. I have a question. Well, it's a specific question about one of the specific projects. Is this a good time to do it? You can. And then Todd is here to be able to answer some of the more technical questions about that, but certainly please. Okay. A couple questions. One is on Carroll Boulevard and Sherman Drive. That caught my eye because of the size. And I'm going to look at your 77 Dallas Drive. Northbound left turn, I'm assuming that should be Lane. Yes. And improve the turning radius on the southeast corner. So I'm at the corner of Carroll and Sherman. It's right there where the fairgrounds are. You got two, if you're coming, if you're heading north on Carroll, you got two lanes that turn right onto Sherman. And then I think you can go straight. Help me understand what this is. Northbound left turn lane from where? Sherman? You're coming from Carroll? Yeah. Is there? Yeah, you have to go to the microphone. Good afternoon. I'm Preetam. Yes. Add a northbound left turn lane. That's the first component. So we're adding a northbound left turn lane that gets into back of Kroger. There's no left turn lane that gets you into back of Kroger . So that's before the light? That's at the light. Okay. All right. So that's the first component is adding more radius for the right turn. Okay. So when you say turn left, because there's the behind the stores there, behind the retail center, there's obviously parking, I mean, access, ingress, ingress, as far as the concrete behind the building. And then there's the fairground has a sort of an entrance. They may be common. You're saying that's where you want it? The left hand turn lane? Yes. Well, what that does is helps take the left turning people out of the equation. There's two lanes that go, there's one lane that goes straight and it's a shared lane. So it will help remove the left turners away from the, through traffic. Okay. Is that, and the only reason I ask is it seems like that's really only an issue during events at the fairgrounds or the fair itself. I mean, because other than that, it's just accessing the rear part of Kroger, which people can get to, I think, from the side of the store and the left turn. So it helps improve the signal timing. That way we can eliminate the signal time that's allocated to the left because what's happening is more timing is getting allocated for that through movement. Whereas higher volume is going, doing from Carroll to Sherman. We need that left turners from Sherman to Carroll going south or even northbound making the right turn. So green is not, the green time is not getting properly allocated and adding that turn lane will help us design it that it's distributed properly and it gives more time for the turners. For the right turn, for the left turners from Sherman onto. Onto the, onto Carroll. Correct. I know it. Okay. We're going to add a left hand turn lane, not because it's needed, but because somehow it will help. Enhance capacity. Exactly. Well, it's not needed to get people from Carroll turning left into the fairgrounds. It's more to help the timing of a light coming from Sherman turning left onto Carroll. So you can't adjust the timing. Because it's a shared movement, the way the green time is split, it's given more to accommodate all the through and the left turners at the same time going northbound. And that's a very low movement going northbound on Carroll where Carroll kind of dead ends all the way up there. So that timing can be allocated more to Sherman. So why couldn't you, why couldn't you split off the right turn? Because what I'm hearing you say is when the light turns green, there's no designation of your turning left or your turning right. It just turns green. Is that my understanding? Correct. And what I'm hearing you say is the green, there's not very many people going straight. Most of them are turning right anyway. Correct. So you can turn right on red. Am I, is that correct? I mean, from Carroll onto Sherman, you can turn right. I guess I'm not understanding. For $425,000, I'm struggling with if we were to just make the light shorter, the northbound going straight to full green, is the concern is you're turning right? You won't have the people turning right as quickly? I think the concern here is not enough capacity to move people out of the way that the movement, the primary movement or the primary traffic movement is weird. It's more of Sherman to Carroll and back and forth. And there are some intermittent traffic vehicles that are waiting to go other movements. And if you get them out of the way, it will help address the issue. And I get that. But when you say help get them out of the way, when you've got people heading north on Carroll, which as you said is very intermittent because there's not a, that's very sporadic. It's not near as much traffic. So obviously I'm not a traffic engineer, but this, what I'm hearing on its face, I'm having a hard time making sense of it at this level of financing. So let's just say you said we're going to reduce the signal light green timing from Sherman and Carroll heading north. Because the people who are turning right, they don't have to have a green. So it's just the people going straight or quote unquote turning left into the, which that could be an issue maybe at certain times of the year with events. But on average, what I'm hearing you say is that's not the issue. We're trying to figure out how do we get more people from Sherman turning left on the Carroll. Is that, am I, is that correct? So how does, how does reducing the light time for the north bound people for on Carroll and increasing the time for the left turn on from Sherman to Carroll, if you just change that timing somewhat, whatever is appropriate, how does that not help that? Why do we need to spend $425,000 to do it? And there's probably a good reason, but, and this may be too technical, but that's, I mean, I'm having, I need some help here. Yeah. The way that intersection is set up, it is really close to the driveway, the other driveway on Carroll. Going into Kroger. Yes. So this is the driveway I'm talking about. So there's one driveway here. A lot of people make this left. This through movement, I can't zoom in. So this through movement is shared. It's currently shared. So through left is shared and this backs up up to this driveway. So if we get the left turners that are once in a while showing up and have a short left turn in here, the through movement will be cleared off. The people trying to get up to the Kroger driveway can go in. So you're saying it's stacking up back because one person may be turning left and they can't get through. They can't get to university and that creates an issue for people making a left from university going north to turn into Carroll because that thing is stacked up up to university. Show me what they're turning left into. It's a driveway. That's the driveway. And this signal sometimes becomes confusing because of safety concerns. It turns green and if this person is making a left, he's not moving, he gets honked at. And he can't move because it's a yield green which they have to yield to this through movement. So it is connected. It will function better. We've run the models and we've looked at the actual functionality of the intersection and just creating this little left turn pocket will really help take out one or two cars that are really lined up here. So you're telling me that you go in, you cut the median out , you put in the left turn lane. I guess you change the signal light, I guess. Yes, you'll have a protected left. That is $425,000? No, I think the chunk of the cost is this corner. Widening this corner and moving this pole is the big cost because this corner is not -- currently, if you see there are a lot of cars that can't really turn this radius, the two lanes that are receiving and in order to make this ADA compliant, this corner is the chunk of the cost. Didn't we just change -- didn't we just do that ADA compliant? I mean, it looks like those are brand new kind of -- These are at least one or two generations old because these are completely detectable warnings. These are older designs. The newer one has two feet. So when you say there's not enough radius, I mean, I drive that all the time. Okay, yeah. Well, I'm okay with -- I understand the left-hand turn lane now. I do. But if it's $200,000 or $300,000 to take that little chunk of land, anyway, that's -- Moving this pole is a big chunk of money. That's what it is. Well, that's my point. Yes, anyway. Okay. Yes. So I'm going to kind of be the opposite on you. I think that that -- That doesn't surprise me. Removing that section there is really important because when I first got on council, I had a lot of people email me about that and I actually have had an accident there because when you turn, both lanes turn at the same time and there's not enough space for both cars to get there. So you're saying the lanes merge? You side swap. No, they don't merge, but you have two vehicles turning at the same time into those -- into the separate lanes and you're really close. You can kind of accidentally merge into somebody's lane there. Okay. All right. I mean, it's -- I would completely be okay with just doing that part and not doing the other part. This is the most expensive one. But I'm sure it all -- well, yeah, but I think it's the most necessary. And that's fine. I mean, if that's the case, my thought is, well, then good heavens when we designed this to begin with, why in the world did we -- I mean, if it was a problem then, why did we even -- that's done and gone. Councilmember Ryan. Yeah. I think a lot of my comments have already been handled, but I don't understand why on the stoplight, this stoplight right here, we can't add an arrow and do as we do here on Bell Avenue that you have one direction at a time moving to get that left-hand turn lane rather than the expense of adding another lane in there. Yeah. We looked at that alternative, but as I mentioned, the primary move is this left turn from Sherman. So that gets blocked when this green arrow gets going. If everything is green here, that means only this direction is going, which is what happens on Bell. Well, in my experience in that area has been that more of the backup hits on Elm and Locust than what hits on that corner. The Elm and Locust lights just up the road there tend to regulate how many cars can get down to that corner. Okay. And that's fair enough. I mean, if that's it and your experience has been that it's hard to do that, it just -- it looks like we put in some new ADA there. I mean, I don't know how old that is, but we've spent some money and we're going to go rip it up. So, okay. I do have another question on one of the other projects. Okay. I'm sorry, y'all, but if we're going to spend this money, I 'd like to know what we're spending it on. Okay. US 77 Dallas Drive and Teasley Lane. Add turn lanes and channel -- help me understand what that means. That means -- I think picture speaks better than words. Give me a quick second. Sure. Okay. And this is one of the most congested locations in the city . That they're fixing to shut down, right? That's correct. Okay. I just want to make sure I understood that. So especially this southbound -- I'm sorry, this northbound left turn lane that wants to travel from Dallas Drive to Teasley. This left turn lane we're talking about. Okay. And this typically backs out no matter what time of the day . It typically backs out under the through lanes. And if you look at it closely, go back a little bit, there 's a drainage inlet here. So this is a major drainage channel in the middle of the street. And in order to extend these curbs back all the way and get the median -- get two left turn lanes within this area, we can actually shift the median here, redesign the poles and move the poles out. And then have two left turn lanes here. And channelize this all the way back. All right. That's majority of the project. There are some other changes. These two left turn lanes could be moved back. It can be widened on this side. We have some right of way. So these two substandard left turns will be back to normal standard. These are really tight left turn lanes. I'm okay with that. So to tag onto this, if you'll pull the map up at the location of Woodrow Lane and Shady Oaks Drive. So we're going to need to do a trade out here somewhere. Because that is horrible. When you're talking about Carroll Boulevard and left turn lanes and through traffic, you've got to get a right turn lane. And I was there the other day looking at it and I thought this would be a bear. You've got to probably get right of way. You've got to move a pole. This one? Yes. And to turn, yeah. When you go to turn right onto Shady, onto Woodrow Lane, that backs up all the way back to the railroad track. I think the right turn lane is under construction. We designed it. And if I'm not mistaken, they've already started working on it. No, there's nothing. No. No. Maybe some utilities removed. But it should be under construction. I think so. You're saying that right? The streets department is, we have a design and they're. Okay. It's in the works. It's in the works. Could somebody verify? I mean, just send me something after this. Yes, absolutely. We'll send you a report. Because if we're going to put more traffic on that road, I mean, it's going to be a bear to, I mean, the other day, literally, I was past the railroad tracks up by, close to where the circle, the traffic circle is. And it was simply people wanting to either go straight, but everybody's wanting to turn right, except for one person, like you said, over on Carroll is wanting to go straight and they have to wait for the lights. Okay. So there is a plan. There is a plan. We have a design that the left, the right turn lane starts about here and then it's flares out. And that is estimated to be. Completed we can give you a schedule. I'd appreciate that. All right. Okay. All right. Council member. No, that was just my same point that if you're going to put more traffic there. And then that adds to the problem. There's a red light camera there, which then has everyone terrified that you don't, you know. Yeah. You don't turn. Right. Right. So, and if you don't know the rules. And I think that's kind of to, I think that's the trick, right? Even when you're talking about that, that corner and the other intersection, it's drivers today aren't drivers. The younger kids, I don't, I just don't think it's the same experience. That's why you see a lot of less people turning into their own lane, less experience. And that's why I think that that other intersection on Carol is a problem. People are terrified to turn into the near lane. Yeah. And so just habits are you, you swing out, you know, and so I think that that's a part of the issue as well. But yeah, this intersection was going to be mine. Okay. All right. So then what I'm hearing you say is that since this one is already in design. In the works. And the other one is more you're getting direction today. This one should be finished before the other one is correct . Okay. Yes. Council member speaking about this one particularly, do we have any plans to update or restructure teesley repave? I mean, I'm sorry, Dallas drive. Repainting Dallas drive. That's a very good question. I'm not. Yeah. Well, I mean, if we're doing like $725,000 worth of work, I just curious if that if we're going to have to go back in and I don't have a good answer on that one. I know we don't have anything with it being a textile facility. Okay. And then being in the area working on that ramp. I'm not sure how far they're coming up off I 35 years they 're redoing this section. We can find that out for you and bring that back. Okay. Yeah, what will make the request? It's a good good point. So we'll make the request. Hey, I'm good. We're getting a right hand turn lane at Shady Oaks and Wood row. That's that's just that's I mean, that's one of the major thoroughfares going east west and it just is it's a huge bottleneck. It is and it's something that we as a staff we've honestly been looking at that entire connection. Yes, as we're emptying more traffic that direction. I know I live on the south side. So I travel that way frequently. It's one of those things where we're looking at what is the ultimate shape and configuration of Shady Oaks look like. Right, because we've we've done from Woodrow to Luke 288. Right brand spanking new for years old and then we in the bond package Morris from Luke 288 to Mayhill was going to get reconfigured to four lanes I believe. But all the traffic usually traveling there is coming down Shady Oaks which is a single lane no left turn. No there is a left turn lane in the middle and okay. You got some tight turns and you got a railroad crossing. It's not a real safe configuration. Councilmember and a roundabout. Yeah, yeah. We love the roundabouts. Okay and if you could put the project list back up one more time I just want to see if the council has any more questions or if I had any more questions. Keith you got a question. Okay. Yeah. Go ahead. So at University on Old North Road the green light had been extended and that's been you can definitely tell there's not a lot of people trying to jump out in front of traffic but also University and Nottingham. Can you tell me why this one was up there and that one wasn 't? There's a couple of reasons I can go back to the map. And also expand on the price a little bit. So there are two things. I think Old North is right here and Nottingham is here. Nottingham serves this particular area of the suburb. This area is served by Old North. One of the things that is it is a higher volume intersection just because Mingo kind of turns in and becomes comes on the south side. The other thing is there's a lot of new development on this corner that will be using Old North and that's anticipated and it's under construction. So all those factors playing to making this one step ahead. Even cost wise there's more right of way take and more requirements and at Old Nottingham because it's already developed all the corners are developed. There were houses too close especially at Nottingham you have driveways right in front of the intersection if you look at the you have houses right next to the intersection. That becomes a tough it the turnaround time for that project and the cost is higher. Less traffic is another criteria that we looked at not enough traffic but if you compare that with Old North it is higher traffic only if I can find it but it's higher traffic as well as open land that's available on either corner that we have better right of way require I mean we can get right of way it's a bigger intersection that we can work on. And so is it the 500,000 is that a new light I mean because I'm wondering what the price it includes everything it includes upgrading all the lights it also includes taking right of way for the turn lanes constructing the turn lanes everything and design. So on either side you'll have turn lanes at least 150 foot turn lanes on both directions north south. Oh okay so it's a larger it's not just putting an arrow in a light to turn okay all right thank you. I would expand on this that Nottingham was the next one up we've got we had actually had about a dozen traffic improvements that we identified the main criteria that were what we're ready right now what can we go in and do this fiscal year and so we've got another six that we'll probably be bringing back to you during next budget year same type of thing immediate impacts you know helping helping move traffic a little bit more but that was just one that took a little bit more design work so we've got it's in the queue for the next time we come back to you. Okay any other questions on specific projects. All right thank you thank you great answers thank you appreciate the information wonderful. So these are the lists that we we together with pre tam and Todd's work or Todd's help so equal two point one two million dollars and so just wanted to provide that information to you and so and then the next one is here recently the staff presented some information about the Vela project and and not to go through all the all the bullet points there but as you can see they look the Vela project will serve a number of different sports activities there on that side the engineers estimate is projected to be a little over five point five million dollars based on the information that staff has at this point the there's a shortfall for Vela at two million three hundred and thirty thousand dollars and so one of the things that we wanted to do is show you some how we how we would recommend you can shore up the funding for that project to let you know too that we're going to be bidding this project later this month with the bid opening later in the at the end of January 2018 so obviously we're still at the engineers estimate so we won't know what those prices are until the bids come in they're evaluated. So what I did is I went ahead and combined the fiscal information for the traffic improvement projects based on the information provided by the finance department they've identified about three million dollars of additional funds that revenues exceeded expenditures for fiscal year 2016-17 and so one of the things that's being recommended is to allocate majority of those those those additional funds towards those small traffic improvements that were just presented and then for the Vela sports complex projects one of the things we're looking at doing is reallocating a placeholder that was set for property acquisition based on discussions from staff that property again the property has not yet necessarily been identified has not been purchased so we believe that this might be a good use of funds to reallocate those funds from that to to the sports complex also reallocating some monies for a master plan and design of an amount of seven hundred fifty thousand dollars to Vela and then a difference of five hundred and seventy five thousand towards Vela coming from the fiscal year 2016-17 budget revenues and funds that were identified so in total for for the Vela that comes up with a shortfall of two million three hundred and thirty thousand all said if you were to allocate the two million one hundred and twenty thousand for small traffic improvements from the fiscal year 2016-17 budget and in the five seven five hundred seventy five thousand towards Vela it would still leave approximately three hundred and five thousand dollars that we could increase the fund balance in the general fund. So what what does the what is the shortfall for Vela after all these applications of funds should be well based on what we know today should be zero but we won't know until the bids come in and ladies anywhere and they're evaluated. All right so then you take the the budget of five seventy five which is a and and part of this three million yes sir then you've added the Southwest Park the property acquisition so if we do all that it all works out the way it's supposed to and if the budget if the bids come in like we anticipate then the Vela project is funded fully that's my understanding based upon and we're still having a 305 going into the general fund so that if the bids come in and they're a little high or then we have at least still some opportunity to make that up correct. I believe also too is part of the bid the construction documents for Vela there's a number of alternates that the that the contractor can bid so it gives the staff options of what to incorporate for the final bid. Well I really want to encourage that I'm assuming you mean alternates is if they come in high that we sort of scale it back initially and do something that's a little unless it just blows this whole thing up. We just need to we just need to build it. I mean obviously we won't know if the bids come in two million dollars more which if that happens we're all going to be looking at each other like what just happened but I just again I'll just reiterate I really encourage us to to move forward on that. Yes Councilmember Riggs. I thought you had a question. I did but I answered it myself. Oh okay. And I would just add just we know this is weighing on the council right now we're going out to market to get bids make sure we've got a very certain funding gap that we can identify for you. One of the other things that we're doing just to put try to put you these a little bit because I know we're dealing still with the fire station three project is we have been working with our finance director to identify opportunities for that we have we currently are holding CO's that could be moved if necessary to help make sure that we've got these projects fully funded but our main point today was to talk to you about some additional cash that we can we can bring forward to make some immediate impacts but we're I think we're constantly refining and refining and handling the finance plan so our goal is to make sure that they like it's built the way it was intended fire station three is taken care of and that we get these traffic improvements out of the way still working within our current fund balance policy so I think it's a good message and I hope the council sees as such. When you say working within the current fund balance policy what are you talking about? Well we're actually we adopted a budget that had a fund balance assumption I believe about twenty three point seven or roughly twenty four somewhere in that neighborhood and we're actually adding to it at this point but we're making sure we're trying to manage this a little bit more proactively so you don't feel like you're you're having to make cuts on projects that were promised to this community and we're able to work within our existing tax levy. And on any of the funds that are being maybe this is my word so if it's incorrect let me know reallocated from maybe some old projects to the Vela complex if they were if it was bond funded money are we we're going back to the is it bond advisory committee? Bond oversight committee. Bond oversight to double check with them and get their approval or just feedback and those kind of things. That would be the process we'd go back to the bond oversight committee let them know this is our recommendation make sure they incur with that but again both of these were ones that we felt like made sense the property acquisition was an undetermined piece of property at some point in the future so we really didn't have something identified for that it was really a placeholder and then the parks master plan money is just reducing the scope of that master plan to have more of a conceptual master plan rather than a very detailed engineering type drawing so still moving forward the master plan in the southwest park it just wouldn't be as detailed. Right okay. Yes Council Member Hudspeth. Just thank you just as an aside we talked about it last week as well I just again want to stress that those two pieces of property that we're hanging on to I look forward to those reports because I think at some point we need to before we I get it these projects I'm not saying these projects specific but in general before we start taking from projects and we're just sitting on something that potentially has value for again just like the land acquisition for some undetermined purpose I think at some point you need to look inward and reconcile what we're going to do there before we start you know going too far down taking from projects that have been determined at least understand what we have and understand the value to the whatever potential buyer. Okay great. So last slide is if you are in agreement with this we'd like to move forward with the recommendation of allocating those funds for those two projects if you concur then we'll work with our finance team to bring forward a budget amendment for the current budget year at your next meeting which would be January 9th. Sure. What are what's the estimated completion of the traffic projects as far as just overall are we doing those serially are we doing them one at a time or they going to are we talking about a year or two. Well the intent is that we would certainly get started with construction this fiscal year and our intent is to get them done in this fiscal year and nearly completed this fiscal year. That's the intent the criteria of getting those those recommended on that list. Okay great. All right any other questions comments. Yes briefly as we want to make my comment is I would be in support of that but of moving forward with both but I just would stress the messaging especially that Dallas Drive component some of those things you know it's just going to be super important that we we go above and beyond messaging just because of the how those I mean obviously they're important we're working on them but just to get that information out best we can. Yeah it's a good comment. Thank you. All right thank you. Appreciate it. All right we'll move on to agenda item 3D receive report hold discussion give staff direction regarding city staff and organizational changes. Okay. Okay. Oh is it. Okay. All right. Okay. Just have a couple of comments and presentations. I don't know if I like being up here. Wow. Is this what I look at this what it looks like from up here . No we've got a couple people have announced the decision they made to to move on from the city and so I wanted to say a few remarks about them and give them a plaque because I think they've been so instrumental to our organization and have really just enjoyed working with them so the first one will be Galen if you'll come up Galen Gillum he's like oh no. Can you speak into the mic please. Thank you Mayor. Appreciate that Mayor Pro Tem thank you. Just to sort of share with you some of the accomplishments that Galen has had over the years here with with us of course he began his tenure with us with DME 2011 gosh time flies doesn't it and he's worked on a number of projects as DME expanded its service delivery to Denton residents and businesses and I will tell you I think probably for me personally and I and of course you know DME is doing their thing over there and they come over here present projects but I think one of the most important things that that he's done is is recently as he's helped us with our transition as starting in the role of director of capital projects in May of 2017 because as we've seen we 've been a little behind and trying to get caught up and add some organization and some structure to these these projects that we've been doing and he's certainly done that he's provided leadership and stability during a transitional time in the department and I think that goes without saying I think you've been a stabilizing force I think your leadership and just your demeanor and how you deal with people and and how you approach problems and projects has been exactly what we needed in that regard so thank you so much for that. There's increased okay here's increased responsiveness to citizen requests now we just stopped right there that's enough because of you know some of our efforts have probably been less than stellar in the past but we certainly strive to do the best we can and I think you've helped us do that so thank you so much for that. Establish a positive rapport with cog and text dot staff that's not easy I mean those are large bureaucracies and they have people coming at them from all over the place and and I think if you just look at some of the projects that we've got going and some of the projects that we've had assistance with here recently that have really helped us the Mayhill Road expansion being one of them to be able to get some new alignment to get some funding potentially on that Mockingbird Lane and several other street reconstruction projects Galen's been instrumental in moving the CIP department forward by recruiting and mentoring a very talented staff so they've got some big shoes to fill and so I look forward to seeing the work of your mentorship and your leadership and training them to be the same and responsiveness and problem solving. Your positive approach to building your staff is confidence and competence and increasing service delivery to make Denton a better place will be missed and I wish you the best of luck wherever you land and we have a little plaque for you I want to make sure I don't get them mixed up here and we hate to see you go but I understand that life moves forward and people make decisions to do some different things and we sure appreciate your contribution. Staff says the City of Denton expresses its gratitude to you Galen Gillum for dedication and valuable service to the City of Denton Texas serving from March 2011 to December 2017. Your contributions have been greatly appreciated. Todd Hyman thank you so much I appreciate it. You were fixing to run out of here. Thank you so much. Okay one more Mr. Chuck Springer if you'll please come forward and I was trying to think I won't go into the impression Chuck because there's a radio show I listen to all the time that talks about Chuck and they're imitating the old basketball coach from Baylor. The basketball coach from Baylor that had just a few problems what was his name? Bliss. Bliss yes yes so anyway let me Chuck but that's okay we're not talking about you being never mind Chuck come on I'm sorry well I don't know yeah I don't know if I like this up here. Chuck has served as director of finance from February 2013 to January 2018. Having some very very difficult times also coming out of the recession as Brian was moved from director of finance you came in and it has been so great working with you. Todd calls you what is the budget sage the wise old sage and I totally agree. Chuck has over 30 years of experience in local government finance 30 years of experience and has been instrumental in successfully leading several projects for the city of Denton including the following redesigning the budget process and I'm sure that wasn't easy but this last year the last couple years have been wonderful so thank you so much for that. I think it's been exactly what this council has wanted and what the community has wanted as well. Led an effort to create a lean government initiative in the organization which we've seen the byproducts of that and the different organizations that have followed that procedure and streamlined and brought some projects forward and some changes to the processes that have really helped the city the bureaucracy the administration but also more importantly our community. Refunded all of the city's outstanding utility system revenue bonds which yielded a savings of approximately six million dollars. Well that's not pocket change that's we don't have that I mean that's that's a lot of money that has gone to helping conserve money save money for our ratepayers and we can either give that back to them or do other projects that would have cost that much money to begin with. Implemented a Kronos timekeeping solution now I have no idea what that is so can you tell me what that means? Clocking in and out. Okay all right well wow all right that's that's great I should have known that I guess sorry about that. Clocking in and out with your new salary ship? No no no if that nevermind. Completed the preparation of the comprehensive annual financial report the CAFR for four consecutive consecutive years with no audit findings. That's impressive I mean that we have that kind of reporting that can be looked at from an internal audit company and have no findings that that really speaks to the integrity of the process and to your work and to the integrity of the numbers so thank you so much. Completed bond funds to simplify project oversight. Chuck has also built a very strong team in the finance department and provided consistent leadership on a number of key issues during his tenure. As Chuck you will greatly be missed we wish you well in your new role as the director of administration of the town of Prosper. So there our loss is their gain but you're just going to be right down the road so when Tony gets you know the question or I have a question I'm just going to call you up and you'll hear that I need to talk to you Chuck but all kidding aside thank you so much for your service to our community and to this city and really bringing your honesty and your integrity and your commitment to the numbers and to the accuracy of those numbers to our community and with that we also have a plaque for you. The city of Denton expresses its gratitude to you Chuck Spr inger for dedication and invaluable service to the city of Denton Texas serving from February 2013 to January 2018. Your contributions have been greatly appreciated and they will greatly be missed so thank you so much for your service. Thank you Chuck. You bet. You bet. My pleasure. Thank y'all that's all I have. Okay it's always good to really honor and show our appreciation for our staff members as they move forward in their life and what they brought to our community so thank you guys very much you will greatly be missed and surely appreciate the contribution that you've provided to us in your years of service. Okay I will now convene the closed session at 327. We will consider the following items and let's all watch for the turning of the light switch. Consultation with attorneys under Texas Government Code section 551.071. Deliberations regarding real property under Texas Government Code section 551.072. Deliberations regarding personnel matters under Texas Government Code section 551.074. [BLANK_AUDIO] [BLANK_AUDIO] All right, welcome everyone. We are now, we have concluded our work session and our closed session items. And we will now convene in a special call meeting of the Dent City Council on December the 12th, 2017, this Tuesday at about 5.58. We will move into our agenda now, which is the consent agenda. Just anybody wanna raise their hand? Yes, Council Member Ryan. I move approval of the consent agenda with the exceptions of items B, G, and H. >> Okay, we have a motion. We have a second for approval of consent agenda items except for B, G, and H. We'll be taking an individual consideration. And on that note, I wanted to remind everyone that under agenda items two, which are items for individual consideration, agenda item B has been pulled and will be considered in January. Is that right? Yep. Okay, we have a motion and a second for the consent agenda item. Save those items pulled. Everybody, we will now move on to the agenda items that were pulled. Agenda item B is an item for individual consideration. Consider adoption of an ordinance accepting competitive b ids and awarding contract for the supply of parkland maintenance products. Believe we have a presentation on that or no? Or? We pulled it all together. >> Pull that for a work session? >> Oh. >> Or was the? >> No, no, no. The spraying policy, I asked for that, a presentation on that for- >> For today? >> Yes. >> Yes, yes. Yeah, agenda item B on items for individual consideration were a work session. For- >> Well, we may have misunderstood. I thought that you wanted a future discussion of item two, excuse me, one B on the consent agenda. So we'll need to bring that back. >> Well, I would like that as well. I mean, a bigger discussion as well. >> So we won't be voting on that today. Is that correct? >> Sorry for the confusion. >> Yeah, we thought it was- >> Is that the rest of the council's understanding as well? >> I thought it was moved to January. >> That's what we understood. >> Okay, okay. Yeah, I think it got confused with the individual item two B and one B. That's fine. That's good. >> Sorry about that. >> No, we're good. One less item for individual consideration. Agenda item G is considered option of ordinance authorizing city manager execute an analogical agreement with the University of North Texas. And Councilman Ryan, you pulled this, I believe. And did you want a presentation on this? >> Yes, kind of a combination of G and H. They're interconnected. One is the agreement with UNT and the second one is actually authorizing the funds to be exp ended. >> I'll tell you what I'd like to do. We'll go ahead and have the sort of staff presentation to cover them both. We'll vote on them individually, so I'm gonna go ahead and call H so we can. Agenda item H is considered option of ordinance authorizing city manager execute professional services agreement for traffic engineering planning services related to traffic study to be performed in an area within and adjacent to the University of North Texas. >> Good evening, my name is Preetam Deshmukh. Thank you, Mr. Mayor, council members. I'm here to talk about both agenda items G as well as H as they're both interrelated. The first one is the interlocal agreement with the UNT between the city and the UNT. And the second is the professional services agreement award for a consultant to perform a traffic study. A little bit of background where this all began. I believe there was some initial confusion as to what kind of elements or what exactly is covered under the small area plan which the city is currently under contract. It was a city initiated project. We looked at an area around UNT and we're looking at the big planning level picture there. And we hired a consultant, we authorized professional services through a city council meeting on August 1st and the total contract amount for that particular project is 239, 252. That scope, a little bit of clarification here, that scope did not include detailed traffic impact analysis . It did include transportation level assessment and I'll get , next slide I'll get in details. So this is a cost breakdown of what was brought forward in front of the council for this particular consultant and the two items, item D and C here. The total cost is about $20,000, a little over 20. And it only includes a planning level assessment of these particular items. They're looking at streets, sidewalks, transit, bicycles, and parking. This is not a detailed traffic impact analysis that will tell you what kind of impacts are associated with this big picture planning exercise which is the small area plan. And so in the meantime, what we were doing is we were having several meetings with UNT. It was kind of a parallel process that was happening. And UNT adopted their master plan in 2015. As part of their master plan, they came with an impact analysis, traffic analysis. And what they came up with were pretty sort of some kind of numbers that were associated with a subjective analysis. It was not consistent with what we typically perform for traffic impact. And based on that particular analysis, UNT was proposing closure of three streets, which is High land Street, which is between Avenue C and all the way to Welch. There's Maple, which is another one-way street just south of Highland Street, same segment between Avenue C and Welch, and then Avenue C throughout the campus. It starts all the way south of, south at Eagle and goes to Hickory Street. If you look at Avenue C, it is quite a big thoroughfare that connects all the way north, it converts into Jago Avenue, it kind of jogs a little bit. And a closure, I'm sorry, closure of this street would create significant traffic on North Texas as well as Welch Street. And these are some things that we had not looked at and we were not seeing any impact analysis in UNT Transportation Master Plan. So those are the things that we really wanted to look at. So what we needed, irrespective of the small area plan, was a traffic study that looked at these particular clos ures and its near term as well as long term impact. And we were ready, UNT was ready to partner with us. They actually agreed to share cost to do a traffic impact analysis. After we went through the process of small area plan, we selected a consultant. One of the sub-consultants for that particular bigger picture plan was a traffic consultant was Walter P Moore. And we thought it would be a good idea to tie the two things and have the same consultant work on both the small area plan as well as this traffic impact study, that way we get consistent numbers. And this exercise is more of a partnership between UNT and the city trying to come to the same ground as far as understanding the impact. And agreeing on what the mitigations would be, near term and long term. So that's why we felt that this was necessary. It's not so much so that UNT was having us do it or we're trying to have UNT do it. And we agreed on a cost share which came up to a little over $112,000. It is a separate contract with Walter P Moore, who's a sub-consultant on the small area plan. So if you look at the big picture, these are some numbers that will show you what the cost sharing and costs are. If we would not partner with UNT, we would end up with almost $464,000. Because a study was necessary for those street closures to happen. And UNT believed that they already had a traffic study and we did not believe that. So ultimately we ended up with this little over $350,000. And I think that is pretty much it, if you have any questions. >> Go back to that last slide. So we've got the traffic study that we're splitting with UN T of $224,700. So we are having to do another traffic study for the small area plan? >> No, that's not part of the small area plan. What small area plan does is a planning level assessment. They will tell you that if- >> No, no, that's fine. I'm just looking here at this 463,952 total cost between the small area plan and the unit, but so this 239, what is that? That's the small area plan itself. >> Correct. >> Okay, nevermind, gotcha. I just saw that 351, but that's for both the small area plan and the traffic study. >> Correct. >> Got you, all right. Okay, yes? >> Well, one of the email responses I got talked about the fact that some traffic counts have already been done prior to Thanksgiving. Is that our counts? >> It was a joint effort. UNT did want to, and we agreed that we did want to look at traffic conditions when they were typical non-holiday seasonal traffic. And given the timeline that UNT is running, they wanted to push at least getting the count portion completed so that those counts could be used towards the study. >> Okay, and what was the condition of Hickory, which has been open close, open close, open close? >> Majority, we did check that, and majority of the segment was open for the week that these counts were collected. What we are trying to do is we will go back, we have a little bit of reserve, we will go back after Hickory Street project is completed, which I believe doesn't happen until end of next year or even into 2019, which is really late for UNT or even us to wrap this study up in conjunction with the small area plan. So we will come back and adjust some of the counts and redo the counts on Hickory, because that's the only segment that might have some disc repancies with the current count. But other than that, there are two locations that were closed and were not counted as part of the counts. >> But if Hickory is closed, then you're gonna have a higher count on the other streets right now, because people are gonna find other routes. >> Yes and no, it wasn't completely closed. The Hickory Street when we counted was open that particular part that's completely shut down at Bonnie Bray was open. It was instead of two lanes, it was open one lane. The week of. >> So your concern Councilmember Ryan is that given sort of our city projects in that area that the, I don't wanna say accuracy, because it 's gonna be accurate, but it representing normal traffic patterns may not necessarily be reflected. >> Right. >> In the traffic study with what's going on around the campus at least in this particular area, is that the concern? >> That is true, cuz right now in that area, I mean, I don't know if it's still that way today, but last week Oak Street was a two way street where it hasn't been before because they were det ouring Hickory around. And this is the first that we've actually seen what roads UNT is looking at closing down and that creates an issue. I'd like for this to actually come back as a work session to us before we move forward on it simply because Avenue C is the only road that runs from University 235 between Bonnie Bray and Carroll Boulevard. >> Well now when you say, okay, so my understanding right now it's just approving the traffic study, this isn't approving any road closures, is that correct? >> No. >> Okay, so you wanna come back with the traffic study for a work session or, yeah, we're not approving- >> Well, and I understand we're not approving what UNT's wanting. I'm just saying we weren't given enough information on this upfront. I just have a very difficult time adding another $110,000, $112,000 to that small area plan even though it's being called not part of that small area plan, it really is, so. >> So you want a work session to discuss? >> To, I guess to kinda, I guess we don't necessarily need the work session. Now that we've kinda seen what UNT's got proposed, but that . I just feel like we're being asked to spend money on something that we weren't informed we were going to do in that small area prior to this. And if it was any private developer, when it came to a TIA that we requested, they would have to pay for it in full. The city would not have to pick up one half of it. So it sounds like your objection then is, it's not so much you oppose to the traffic, the TIA, it's us paying a part of it. >> Correct. >> Okay, all right. Council Member Briggs. >> So is the plan for the traffic study to come back to us separate to discuss the road closures or will that all come back with a small area plan? >> The traffic study is gonna work with the small area plan . So since we have the same sub-consultant, it is going to look at the preferred alternatives in the small area plan. And look out at the future build out conditions and see what kind of impacts we have because of these street closures and the small area plan. What kind of impacts will be there throughout the circulation network and plan for those in the future. So this study was really important for us, not only just for the street closures as well as to understand what's happening in the region. >> Okay, Mayor Pro Tem and then, yes. Is UNT authorized to unilaterally close streets? >> No. >> That's a very good question. >> No. >> So walk me through what, I just wanna save you a bunch of money. You can't close Avenue C. That's not a good idea. So what happens if UNT decides, well, we wanna close Avenue C? >> They will require city's authorization to close any public streets. But then that becomes an issue and it will. >> So just walk me through the whole process. Does it go somewhere? Is there a hearing? How does it work? >> There would be a formal request made of the city to close the street. Basically the way this was structured is typically a TIA in an area like this would have been included, it was pulled out because UNT did not agree with the initial traffic consultant that staff had suggested partner with the planning firm. The way this contract is structured is they are in essence paying for the traffic study around the university. We're covering everything else because in my argument to them was it's a symbiotic relationship. If you start closing roads, to Councilmember Ryan's point, you have an impact on other roads. They had also done what I think, what I would gently call more of a windshield type survey where they were counting pedestrians and not doing really an impact analysis to the level that we would require along with the if you close this street, this might happen. So this is really a way to, they are paying for their share around the university, within the university, just to get us data that we can talk to each other. Otherwise, our concern was we were relying on very subjective, emotional gut call type arguments rather than the facts to present to the council. We have definitely not given them any encouragement that we would recommend closing any street over there. Some of those streets that you saw have relatively new infrastructure in them, which is a major concern of ours. And in fact, I think Highland was recently repaved. So there's a lot of meaty issues here, but this is really an attempt, we needed to do the traffic information study anyway. It was really a attempt to find some common ground with them to discuss planning in the future as they're looking to try to get to more of a walkable campus. And we wanted to make sure that we were equal partners and had the facts when those conversations come before you. So it's really a cart before the horse. In order to have a conversation with them, you need the data. And I think to Council Member Ryan's point, could the traffic study be pushed off a little while? I suppose it could. I think that study, until you get the traffic patterns a little bit more. But that's a little bit of the history behind how this happened and why it happened is we just simply said we couldn't come to the council unless we had empirical data to even talk to you about. >> Yes. >> So let's say that we do the traffic study and we're at odds over the impact of closing a street and UNT still wants to close the street and we don't wanna close the street. So what happens? >> It's your call. It's your street. >> So it would be a council decision? >> Yes. >> You wouldn't go to PNZ or any of those types of places? >> Traffic safety. >> Yeah. >> We would like to at least do traffic safety but- >> Traffic safety, they handle all your recommended clos ures and then it'll come to you with a recommendation. >> Okay. Thank you. >> Yes, Council Member Hussbett. >> Can someone correct me if I'm wrong? But first, I'm in favor of moving forward because, as I understand it, let me get my streets, Hickory Street, we removed the meters and we're waiting on the bike lanes for this data. So, I mean, there's a lot tied into this and it ties into the decision on the SUP for the restaurant there on the corner. I mean, a lot of this data plays into my calculation on how we proceed in this area. But most importantly, Hickory is on hold, I think, waiting on this data to decide the biking path and how they 're going to proceed. So it has, and I don't think that there's, I think it gives us a good launching point as far as the numbers. I mean, will it be different? Yes, with Oak being two way versus one way. I mean, I think there'll be some differences, but I don't know that it's enough that the data can't be extrapolated and reconciled to that, that hey, the traffic's gonna be a little heavier, but at least we have a static launching point and I think it'll move forward that bike path. And so I would be in favor of moving forward just because there's other things tied to it that I don't, and I don't think it does any irre parable harm to going forward. I think those numbers can be extrapolated. >> Okay, all right. Yes, next member. >> I am also in favor of this. I assumed that it was part of the small area plan since we were looking at parking and I just assumed that they would take this type of data in that plan as well to apply it to their recommendations, so yeah, I'm in favor. >> Okay. Yeah, I think I'm good with moving forward, I think, for some of the similar sentiments that Council Member Hutzpeth shared. It's, in some ways, we're getting, I think, probably a traffic study that is needed for less cost because we have a sharing of that cost with UNT based upon their desire to have these roads closed sometime in the future. Question for the engineer. Given Council Member Ryan's concerns about, okay, we're really not testing and sort of Council Member Hutzpeth's observation, is there a way to sort of look at the data on the ground from the traffic study and go, okay, yes, this was closed? Is there a way to, with some kind of accuracy, modify that to where it might more accurately reflect a, quote unquote, normal traffic pattern if these other things weren't in place? Is that possible or do you, will you have enough data to take a stab at that? >> Yes, we discussed that with the consultant. We have historical data up and down Hickory, Oak Street, Bonnie Bray, North Texas. So we have old counts that we've collected over the years and we can track them, compare how these new counts compare and see if there are any changes, major changes. And when we get closer to Hickory, there might be a little bit of changes, but the rest of the world should function the same. >> Okay, all right. Okay, any other comments, questions for staff presentation? All right, we will consider these items separately. G and H, what is that, 1G? So staff, I mean, Chair would entertain, Council Member Br iggs? >> I'll move to approve. >> All right, Council Member Hutzpeth? >> Second. >> All right, we have a motion and a second. All in favor, agenda item, I think is 1G. Signify by raising your right hand. All opposed by like sign. So motion carries four to two. Agenda item 1H. Chair would entertain a motion. >> I'll move approval. >> We have a motion for approval. We have a- >> Second. >> Motion for second. All in favor signify by raising your right hand for agenda item 1H. All opposed by like sign. Motion carries four to two. Now we will move on to our items of individual consideration for agenda items two, which should be agenda item two A. Consider adoption of an ordinance authorizing city manager to execute professional services agreement for engineering design services relating to design, bid phase, and construction services for the PEC four phases three and four. I thought I was in a gym class or something. >> Good evening, Todd Estes, city engineer. We're bringing to you tonight the continuation of a contract or a project that you all had seen and approved a contract last, I think it was last month. Where we are looking to extend PEC four, which is a bond funded project. It started phases one, phases two, primarily were downstream or east of. They were these blue and green lines you see on here. They were east and west of element locust. They take into account a large drainage area that has associated with a flood plane that runs through downtown and to complete the process of removing the downtown area from the floodplain, we need to complete phases three and four. So I'll bring up next slide is the actual drainage area map for downtown. So you can see over here at Bell Avenue and where the railroad tracks are, we have a very large drainage area that runs through downtown. I believe Chad, Chad's not paying attention. >> Todd, you're doing a great job. >> I believe we had 60, it's around 60 acres that's inund ated by the floodplain in this area that continues all the way over to Bernard Street. This area is part of this project. The four phases would actually bring all of this floodplain out, bring all these properties out of the floodplain. So the floodplain would basically go back to looking like the previous slide where you do not have a floodplain. >> Okay. >> So what we have before you tonight is the actual design contract for the construction of what you see in yellow and in red. That's to pipe everything from an open channel into a box culvert. What you also have here is a line in dash purple. That line right there is an alternative route that takes into account that you, if you see this blue line, my mouse keeps going away. This blue line here is the center line of the existing open channel. So it's that concrete line and channel that runs through downtown. At some point, these properties still need to be able to drain. And the most cost effective means that we're trying to analyze is, is this purple line or is this yellow line the best way to get there? So we're evaluating both options with this design. >> So when we go to a box culvert drainage system, first of all, what does that look like? Is it underground? Is there something green? >> It's underground. You won't see it. >> And then what happens to the open drainage system? >> The open drainage system, we would need to be, what's left of it would stay in place. Because most of what you have out there, we would not anticipate actually changing anything other than just leaving it alone. >> Would it just be an overflow or something? >> No, it still carries stormwater. The issue that you're always going to have is these homes over here on the East side of Carroll, and the businesses on the West, I'm sorry, on the East side of Carroll, on this side of the homes on the West side of Carroll, they still have to be able to drain their property. And the easiest way to get that water in is not to change what they currently have. But what does happen is, is when water is in that channel today, there's not enough capacity in that channel. So what happens is as it rains and we get a worse event, it just gets much higher than it can actually handle. These boxes will allow the vast majority of that stormwater to get out, but you'd still use the existing channel itself to just catch the regular runoff from those homes. >> And in some places, the box culvert would replace the channel? >> Yes, in some places it would, specifically as you're going through this downtown area. >> And it would be covered with soil? >> Soil, concrete, whatever is usable. If it's a parking lot, it would be asphalt. If it's bare ground, it would be soil with grass over the top. >> Okay. And would that, I'm sorry, who would own that property then if it's covered? It still belongs to the city, right? >> It belongs to the city unless it was conveyed to a private property owner. It's going to be an easement to this point. >> Oh, okay. All right. >> Could you put the floodplain map? I'm trying to, I'll leave this picture. I'm trying to orient myself here. Now, the courthouse is not on this frame, is that right? >> No, it's just to the north. >> It's up there, right? >> Yeah, Elm and Locust are these two streets right here. >> And the one where the, okay, there's Prairie. Now, where does the TIF, where's the TIF boundary on here heading south? Does it go down to Prairie Street or does it? >> Sycamore, if you believe. >> Okay. Sycamore. Is that north of Prairie or south of Prairie? That's north of Prairie. >> That's north of Prairie. >> Okay. So some of this is, some of it, probably just a little of it, is out of the outside of the TIF, but some of that yellow is inside. >> Yes. >> And then the red, phase four, that's going west of Carroll, is that right? >> Yes. >> Okay, so that's not, okay, so that's not in. All right, okay. And so this design contract is for the yellow and the red with maybe the purple hatch? >> Yes. It gives us the ability to analyze both routes and then design which route becomes the best option for us. >> And is this still within the bond funded amounts? This, because we're short, my understanding is. >> We have funding for the design and the acquisition of right away associated with it. What we do not have funding for is construction. >> So we'll have an opportunity to come back and talk about funding sources for the construction. Right now we're not, we're still within our bond guidelines . >> Yes. >> But after the design and the purchase of the right away, then we're out of money? >> Yes, sir. >> Okay. Okay. Yes, Council Member Briggs. >> Do you have a picture of the box culverts that were? >> No, but I could get you one. I mean, really most anywhere where we're putting the box culverts in themselves, you will not see. >> Okay. >> Because they will be under a street or they'll be under a parking lot or. >> So I have, it's no secret issue with 50 foot concrete channels. And so that's not what we're talking about here. What we're talking about is maybe getting rid of some of those channels, right? >> Yes, some of those would go away to be usable land afterwards. >> Okay. Okay. Just got to be clear. >> Absolutely. >> Thank you. >> Okay. Any other questions on this agenda item? Yes, Council Member Hussbett. >> If Council would want to see, there's an example on Maple Street, Google Maps says like 100 block of maple. If, I mean, if you wanted to see, I mean. >> An example of. >> Of the. >> A box culvert or. >> Yes, sir. >> Yep. Well, actually, remember that park that was, we put in some drainage, I thought, by the old Davis bakery. >> Exactly. That's what it is. >> Is that, this is a vacant piece of land now. >> Exactly. >> Yeah. Okay. Yeah. >> Do we own it? >> Yes, we do own it, I believe. I believe we do. Yes. >> So. >> I could be wrong. We don't own it? Or do we? Oh, okay. >> I have a follow-up question. Do any of these areas that you're talking about include the old channel that's made of rock and stone from, that's just. >> Yeah, I think that. >> Done a while ago. >> I do not believe that's part of this chat. >> That's Eagle and Prairie. >> Yeah, I think that's a different project altogether. >> Is it? Okay. >> I think that's this segment. I know which one you're talking about. And I believe that's over here. When you get down near Eagle, there's a segment of it that's. >> That's kind of historic. >> Yeah, it's. >> [INAUDIBLE] >> Yeah, that segment, it's back in this area, right around Briscoe Tire, just in the north in that area. And we're going to be north of there on Prairie. And the channel that you're talking about, that's not part of this. >> Okay. >> Okay. No more questions? If there are no more questions, Chair would entertain Council's pleasure. Council Member Ryan. >> I will move approval. >> Mayor Pro Tem seconds. All in favor, agenda item 2A, signify by raising your right hand. Passes unanimously. We're now on to concluding items. And I have one that I'd like to address just real quickly and then I'll record it. Just wanted to have everyone keep Jenna Duncan from Denton Record Chronicle and her family, her fiance Michael Whitaker and Michael's father, I believe his name is Charles. And your thoughts and prayers, they were involved in a car accident. And we just really wish them the most speedy recovery and our thoughts are with them. So they're part of the Record Chronicle, which sometimes I consider often part of this council family, just like all families. We sometimes have disagreements, but we all get over them. So I just really wanted to mention that because I really just want the community to keep them and their thoughts and prayers. So thank you all for indulging me in that. Any other? You have no concluding items? Please, everybody, let's make a note and the paper is not here, they can't record that. But Council Member Briggs has no concluding items. Does anybody have concluding items? Okay, great. We will stand adjourned then at 633 on December 12, 2017. [ Silence ]