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 - Okay, it is nine o'clock, so we'll call to order the City

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00:00:05,000 --> 00:00:12,360
 of Denton Public Utilities Board for August 24th.

3
00:00:12,360 --> 00:00:14,080
 - You may sign off and come back on.

4
00:00:14,080 --> 00:00:19,080
 - Before we go into public comment period,

5
00:00:19,080 --> 00:00:23,800
 we're going to change the agenda a little bit.

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00:00:23,800 --> 00:00:27,320
 We need to have the closed session before we do items

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 for individual consideration and the work session.

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 So we'll do the consent agenda,

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00:00:34,120 --> 00:00:36,640
 then we'll go into closed meeting,

10
00:00:36,640 --> 00:00:38,360
 then we'll go into work session

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 and then the final item will be the individual consideration.

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 So public comment period, does anybody wish to speak?

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00:00:45,280 --> 00:00:47,000
 Is there anybody there, Billy?

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00:00:47,000 --> 00:00:52,880
 No?

15
00:00:52,880 --> 00:00:55,680
 Kim, is there anybody on the line that wishes to speak?

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 - She's shaking her head.

17
00:00:59,240 --> 00:01:01,680
 - She's shaking her head, no, okay, all right.

18
00:01:01,680 --> 00:01:05,680
 And we'll go into the regular meeting, consent agenda.

19
00:01:05,680 --> 00:01:08,680
 Does any board member wish to pull either item A or B

20
00:01:08,680 --> 00:01:10,120
 on the consent agenda?

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00:01:10,120 --> 00:01:17,160
 - Madam Chair, I would like to pull consent agenda item A

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 so that we get a little bit of an update

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 from staff on that, thank you.

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00:01:21,080 --> 00:01:24,200
 - Okay, we still can't see you Lee, can you?

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00:01:25,560 --> 00:01:28,360
 - I think my only option is to try to log back in.

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 - Okay.

27
00:01:31,040 --> 00:01:32,520
 - I will do that now.

28
00:01:32,520 --> 00:01:33,560
 - Okay, thank you.

29
00:01:33,560 --> 00:01:38,160
 All right, do we have a motion to approve item B then?

30
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 - I'd actually like to pull B.

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 - Oh, you wanna pull B, okay, all right.

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00:01:41,840 --> 00:01:44,440
 Very good, that'll make it easier.

33
00:01:44,440 --> 00:01:47,840
 So until Lee can get back on,

34
00:01:47,840 --> 00:01:50,360
 why don't we take item B first?

35
00:01:50,360 --> 00:01:53,560
 We need to see Lee's-- - Okay.

36
00:01:56,000 --> 00:01:57,440
 Really, just a quick question.

37
00:01:57,440 --> 00:02:06,560
 So the facility was built over 50 years ago, it says,

38
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 and we've been using it the whole time, of course.

39
00:02:11,520 --> 00:02:15,640
 So I was curious what kind of what longevity might we get

40
00:02:15,640 --> 00:02:17,640
 out of these proposed changes?

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00:02:17,640 --> 00:02:21,720
 - So Madam Chair, we should have Stephen Gay on the phone.

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00:02:21,720 --> 00:02:22,560
 Stephen.

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 - Yes, Tony, this is Stephen Gay,

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00:02:27,840 --> 00:02:29,360
 Director of Water Utilities.

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00:02:29,360 --> 00:02:33,600
 The longevity, the useful life of these filters

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 are approximately 30 to 40 years.

47
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 Does that make sense?

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 - Yeah, that's great, that's a long time.

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 - Yes.

50
00:02:43,880 --> 00:02:50,840
 - Okay, do we have a motion to approve item B?

51
00:02:50,840 --> 00:02:55,080
 - So moved.

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00:02:55,080 --> 00:02:56,120
 - In a second?

53
00:02:56,120 --> 00:02:56,960
 - Second. - Second.

54
00:02:56,960 --> 00:03:02,760
 - Aye. - Aye.

55
00:03:02,760 --> 00:03:08,720
 - Any nays?

56
00:03:08,720 --> 00:03:12,800
 Okay, all right, then item A.

57
00:03:12,800 --> 00:03:16,360
 We switched up the order, Lee, so you could get on.

58
00:03:16,360 --> 00:03:19,440
 So what is your question on item A?

59
00:03:19,440 --> 00:03:23,440
 - Yes, I was just wondering if we could get some background

60
00:03:23,440 --> 00:03:28,440
 on item A, the added $1.98 million amendment.

61
00:03:28,440 --> 00:03:36,040
 - So we have Danny Kramer on the line, PV member.

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00:03:36,040 --> 00:03:37,800
 So Danny, could you respond, please?

63
00:03:37,800 --> 00:03:41,640
 - Oh, yes, can everybody hear me?

64
00:03:41,640 --> 00:03:43,080
 - Yes. - Yes, sir.

65
00:03:43,080 --> 00:03:48,440
 - Okay, Daniel Kramer, Deputy Director of Operations,

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00:03:48,440 --> 00:03:50,480
 so streets, traffic and drainage.

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 And what we use this contract for

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 is mainly our curb and gutter repair,

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 our sidewalk repairs and any valley gutters

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 or the miscellaneous concrete repairs

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00:04:02,960 --> 00:04:04,800
 that we use throughout the city.

72
00:04:04,800 --> 00:04:08,120
 Utilities also uses it on utility cuts

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00:04:08,120 --> 00:04:12,120
 when they do curb cuts and any of the flowable fill

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 that needs to be put in the trenches

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00:04:14,040 --> 00:04:15,880
 when we're going through.

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00:04:15,880 --> 00:04:20,880
 As stated in the AIS, we are going out for a new contract.

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00:04:22,240 --> 00:04:24,680
 This one expires in October.

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00:04:24,680 --> 00:04:26,800
 This is just to fill the gap

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00:04:26,800 --> 00:04:29,040
 'cause we've spent the allotted money

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 on the contract already.

81
00:04:31,600 --> 00:04:36,600
 So this is to help us keep going in our repairs

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00:04:36,600 --> 00:04:39,280
 throughout the rest of the contract term

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00:04:39,280 --> 00:04:41,720
 so we can go out and get a new contract in place.

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00:04:41,720 --> 00:04:47,440
 - Alrighty, so this is merely an extension

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 of the existing contract

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00:04:48,760 --> 00:04:53,480
 and it's for general repairs and work, nothing specific.

87
00:04:53,480 --> 00:05:00,000
 - Correct, we do have a few that we listed in the AIS.

88
00:05:00,000 --> 00:05:02,360
 The million dollars on the street side

89
00:05:02,360 --> 00:05:05,200
 is some repairs that we're trying to finish up

90
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 on Carroll Boulevard of some sunken panels,

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 panel replacements for that,

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00:05:12,080 --> 00:05:14,360
 that we're just doing spot repairs on

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 and miscellaneous water and wastewater cuts

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 that we're doing there are the main culprits

95
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 to the increase in costs.

96
00:05:23,560 --> 00:05:26,640
 - Alrighty then, well, thank you very much.

97
00:05:26,640 --> 00:05:29,880
 I didn't glean that from the documentation

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00:05:29,880 --> 00:05:32,400
 so I appreciate the updated information.

99
00:05:32,400 --> 00:05:35,480
 So with that, Madam Chairman,

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 I'm happy to move the approval of item A.

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00:05:37,960 --> 00:05:39,640
 - Okay, do we have a second?

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 - Second.

103
00:05:41,520 --> 00:05:43,720
 - All in favor say aye.

104
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 - Aye.

105
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 - Aye.

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 - That carries.

107
00:05:47,280 --> 00:05:49,600
 Okay, so next item is the closed session

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 and I'll read the full thing here.

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 - Then Karen, I mean, Susan,

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 we'll move into this council room

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 if you want to take a few minute break.

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 - Okay, we'll go maybe five minutes.

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 Would that be enough?

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 - After.

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 - Actually--

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 - Oh no, I'm sorry, I got it wrong, yeah.

117
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 - Yeah.

118
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 - You're gonna stay there?

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 - They're gonna remain there

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 and then once you go back into open,

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 into the work session, then they'll go there.

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 They'll go, okay.

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 - Yes, ma'am.

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 - All right, so here of course the closed session is.

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 Any final action, decision or vote on a matter

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 deliberated in a closed session

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 will only be taken in an open meeting that is,

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 oh, that's not the part I need to read, is it?

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 Do I need to read that section, Tony?

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 No.

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 So the item is deliberations

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 regarding certain public power utilities

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 and competitive matters under Texas Code Section 551.086.

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 Receive a presentation from staff

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 containing public power information

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 related to a proposed purchase agreement

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00:06:52,280 --> 00:06:53,880
 between the City of Denton

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 as the seller of power and electricity energy services

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 and Core Scientific Inc.

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 Discuss and deliberate actions regarding the same.

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00:07:02,480 --> 00:07:04,240
 All right, now we can go into close.

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00:07:09,800 --> 00:07:13,920
 Okay, it is 10.01 and we'll go back into the open session

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 of the Public Utilities Board meeting.

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 The next item is the work session to receive a report,

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 hold a discussion and give staff direction

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 on the proposed water and wastewater rates

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 for fiscal year 2021 and 2022.

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 (indistinct)

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00:07:41,460 --> 00:07:46,740
 - Hate to state the obvious, but we got some feedback.

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 (laughing)

151
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 (indistinct)

152
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 - I don't think this camera's working.

153
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 The camera's not working.

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 The camera's not working.

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 Tess?

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 (indistinct)

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00:08:41,460 --> 00:08:48,480
 Hey, Kim, can you tell him

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 the camera's not working on this one?

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 The video, the video, it won't work.

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 It won't let me uncheck it, like it just marked out.

161
00:09:09,040 --> 00:09:11,460
 (indistinct)

162
00:09:11,460 --> 00:09:28,800
 Yep, the video doesn't need to work.

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00:09:28,800 --> 00:09:31,720
 Okay, okay, perfect, okay, good.

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00:09:31,720 --> 00:09:32,920
 - We can see you on the big screen.

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 - Okay, perfect, I'll go ahead and get started.

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 If everybody can hear me now,

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 I think the microphone's working,

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 so I'll speak up as loud as I need to.

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00:09:41,360 --> 00:09:43,640
 Nick Vinson, Assistant Director of Finance.

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00:09:43,640 --> 00:09:44,920
 It's my pleasure to be in front of you today

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 as we continue our conversations

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 regarding the fiscal year 2021-22 rate discussion

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 for the utilities.

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00:09:51,980 --> 00:09:55,320
 So today we'll discuss water and wastewater.

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00:09:55,320 --> 00:09:57,680
 We do have individual consideration items for this

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 later in the presentation for approval or the meeting.

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00:10:00,560 --> 00:10:02,520
 One thing I do wanna say before we get started,

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 the electric rate ordinance this year

179
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 will not come forward to you.

180
00:10:05,280 --> 00:10:06,660
 If you remember the conversation we had,

181
00:10:06,660 --> 00:10:09,920
 those rates will come back forward to you in December,

182
00:10:09,920 --> 00:10:11,680
 along with the miscellaneous rate ordinance

183
00:10:11,680 --> 00:10:13,000
 if there is any changes.

184
00:10:13,000 --> 00:10:16,880
 So let me pull the presentation up.

185
00:10:16,880 --> 00:10:28,600
 Okay, so really quick, what we wanted to do

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00:10:28,600 --> 00:10:30,400
 is just give an overview of the presentation

187
00:10:30,400 --> 00:10:31,360
 that came forward to you.

188
00:10:31,360 --> 00:10:33,520
 A few weeks ago in the conversation,

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 we have a city council.

190
00:10:34,600 --> 00:10:37,480
 So prior direction on July 26th,

191
00:10:37,480 --> 00:10:39,080
 we did talk to the Public Utility Board

192
00:10:39,080 --> 00:10:41,600
 regarding the water and wastewater rates

193
00:10:41,600 --> 00:10:44,600
 and the rates quite frankly for each of the utilities.

194
00:10:44,600 --> 00:10:46,540
 The direction we did get from the Public Utility Board

195
00:10:46,540 --> 00:10:49,400
 at that time was to proceed with option three.

196
00:10:49,400 --> 00:10:51,860
 And if you remember option three established a new tier

197
00:10:51,860 --> 00:10:54,040
 from zero to 5,000 gallons.

198
00:10:54,040 --> 00:10:56,180
 And it also combined that seasonal rate

199
00:10:56,180 --> 00:10:58,040
 of that winter and summer block structures.

200
00:10:58,040 --> 00:11:00,480
 We'll review that with you here shortly.

201
00:11:00,480 --> 00:11:04,200
 We did go to city council the day after on July 27th.

202
00:11:04,200 --> 00:11:05,800
 Presentation went well.

203
00:11:05,800 --> 00:11:07,960
 The city council did request additional detail

204
00:11:07,960 --> 00:11:09,600
 regarding the 11% of customers

205
00:11:09,600 --> 00:11:11,200
 that would see a rate increase.

206
00:11:11,200 --> 00:11:12,680
 So I'll review that with you here shortly.

207
00:11:12,680 --> 00:11:14,460
 We have dived into that greater.

208
00:11:14,460 --> 00:11:17,120
 But then their direction was the same

209
00:11:17,120 --> 00:11:18,280
 as the Public Utility Board.

210
00:11:18,280 --> 00:11:21,120
 A few questions was asked about the zero to 5,000 tier,

211
00:11:21,120 --> 00:11:22,440
 where that came from.

212
00:11:22,440 --> 00:11:24,440
 Staff was able to answer those questions.

213
00:11:24,440 --> 00:11:25,980
 And their guidance they gave us

214
00:11:25,980 --> 00:11:27,880
 was to proceed with that option.

215
00:11:27,880 --> 00:11:30,560
 However, city council did ask for an additional tier

216
00:11:30,560 --> 00:11:32,080
 or the possibility of additional tier

217
00:11:32,080 --> 00:11:34,640
 between five and 15,000 gallons.

218
00:11:34,640 --> 00:11:37,080
 So I'll review that with you also.

219
00:11:37,080 --> 00:11:38,640
 Just a quick overview of the presentation.

220
00:11:38,640 --> 00:11:39,940
 You can see the current rate structure.

221
00:11:39,940 --> 00:11:42,160
 We'll review that here shortly.

222
00:11:42,160 --> 00:11:43,560
 We'll look at the detailed analysis.

223
00:11:43,560 --> 00:11:45,360
 We'll look at the 11% of customers

224
00:11:45,360 --> 00:11:48,640
 and what our recommendation is to the Public Utility Board.

225
00:11:48,640 --> 00:11:55,800
 Take my glasses off here, fogging up a little bit.

226
00:11:55,800 --> 00:11:57,960
 So the current rate structure within water,

227
00:11:57,960 --> 00:11:59,320
 as we talked about last time,

228
00:11:59,320 --> 00:12:02,280
 there are two different fees within the water rate structure,

229
00:12:02,280 --> 00:12:03,920
 the first one being a facility charge

230
00:12:03,920 --> 00:12:05,920
 and the second one being a volume charge.

231
00:12:05,920 --> 00:12:09,020
 As a reminder, that facility charge is a fixed fee

232
00:12:09,020 --> 00:12:12,460
 based on the meter size that a residential customer has.

233
00:12:12,460 --> 00:12:13,800
 The volume charge, of course,

234
00:12:13,800 --> 00:12:15,480
 is the focus of today's conversation

235
00:12:15,480 --> 00:12:18,040
 talking about the different volumetric rates

236
00:12:18,040 --> 00:12:19,640
 within the water rate structure.

237
00:12:19,640 --> 00:12:22,920
 The average consumption, as a reminder,

238
00:12:22,920 --> 00:12:24,560
 previously was 9,200 gallons.

239
00:12:24,560 --> 00:12:27,120
 We have seen that decrease from the last four or five years

240
00:12:27,120 --> 00:12:29,000
 to 7,600 gallons.

241
00:12:29,000 --> 00:12:30,500
 We'll talk a little bit more about that

242
00:12:30,500 --> 00:12:32,560
 in our rate comparisons here shortly.

243
00:12:32,560 --> 00:12:39,080
 So everybody, let me minimize it.

244
00:12:39,080 --> 00:12:40,640
 Everybody saw this last time

245
00:12:40,640 --> 00:12:43,400
 but just wanted to review it with a group again.

246
00:12:43,400 --> 00:12:44,980
 So you can see the bill distribution

247
00:12:44,980 --> 00:12:46,780
 of where that 11% is coming from.

248
00:12:46,780 --> 00:12:49,240
 So currently, in our current tier structure

249
00:12:49,240 --> 00:12:54,120
 from zero to 15,000, 89% of the bills fit into this tier.

250
00:12:54,120 --> 00:12:57,700
 From 15,001 gallon to greater than 50,000 gallons,

251
00:12:57,700 --> 00:12:59,840
 there's 11% of customers.

252
00:12:59,840 --> 00:13:01,960
 And then those customers, as we discussed last time,

253
00:13:01,960 --> 00:13:03,920
 actually see a rate increase

254
00:13:03,920 --> 00:13:06,560
 with this new proposed rate structure.

255
00:13:06,560 --> 00:13:09,480
 And we'll review that with you here shortly.

256
00:13:09,480 --> 00:13:11,480
 And then this table just basically shows you

257
00:13:11,480 --> 00:13:14,560
 the distribution of water consumption per 1,000 gallons.

258
00:13:14,560 --> 00:13:16,120
 So you can see the majority of customers

259
00:13:16,120 --> 00:13:18,320
 fitting in between 1,000,

260
00:13:18,320 --> 00:13:21,620
 leading up to 13, 14, and 15,000 gallons.

261
00:13:21,620 --> 00:13:23,560
 - Nick? - Yes, ma'am.

262
00:13:23,560 --> 00:13:26,840
 - Could you give me an example of the 1%,

263
00:13:26,840 --> 00:13:28,440
 the 50,000 plus?

264
00:13:28,440 --> 00:13:32,360
 - So that's a great question, Ms. Russell.

265
00:13:32,360 --> 00:13:34,680
 One thing we did look at is we looked at that,

266
00:13:34,680 --> 00:13:36,600
 and I have a slide that I'll cover in just a second

267
00:13:36,600 --> 00:13:41,600
 because we did try to break it into the size of partial.

268
00:13:41,600 --> 00:13:43,280
 So is it a certain size partial

269
00:13:43,280 --> 00:13:45,280
 that fits that 1% definition?

270
00:13:45,280 --> 00:13:46,600
 And the answer is no.

271
00:13:46,600 --> 00:13:47,920
 We did not find a correlation

272
00:13:47,920 --> 00:13:50,320
 between water usage and partial size.

273
00:13:50,320 --> 00:13:52,360
 So I think a lot of it has to do with habits,

274
00:13:52,360 --> 00:13:53,960
 water consumption habits,

275
00:13:53,960 --> 00:13:55,520
 and how people water their yards,

276
00:13:55,520 --> 00:13:58,160
 maybe their irrigation systems are set,

277
00:13:58,160 --> 00:13:59,960
 what type of appliances they have in their house.

278
00:13:59,960 --> 00:14:02,360
 So I don't have a clear definition for you

279
00:14:02,360 --> 00:14:05,040
 exactly who's in the 1% category.

280
00:14:05,040 --> 00:14:07,120
 - I was just wondering, in the city of Denton,

281
00:14:07,120 --> 00:14:10,440
 is there someone that uses 50,000 gallons?

282
00:14:10,440 --> 00:14:11,840
 - There is.

283
00:14:11,840 --> 00:14:13,480
 It does vary throughout the year.

284
00:14:13,480 --> 00:14:16,200
 So for a residential customer,

285
00:14:16,200 --> 00:14:18,240
 what we did see is there's 1% of the bills

286
00:14:18,240 --> 00:14:20,560
 fit into that 50,000 gallon window.

287
00:14:20,560 --> 00:14:24,060
 Now, what I will tell you is that varies throughout the year.

288
00:14:24,060 --> 00:14:25,800
 So this year, for example, it just rained

289
00:14:25,800 --> 00:14:29,160
 a couple inches last week, people tend to water less.

290
00:14:29,160 --> 00:14:31,440
 So it may not be every month out of the year.

291
00:14:31,440 --> 00:14:33,240
 It may just be a few months out of the year.

292
00:14:33,240 --> 00:14:34,520
 But if we have a really dry year,

293
00:14:34,520 --> 00:14:37,040
 there could be someone that uses over 50,000 gallons.

294
00:14:37,040 --> 00:14:38,320
 Absolutely.

295
00:14:38,320 --> 00:14:39,160
 Yeah.

296
00:14:39,160 --> 00:14:41,240
 And we'll talk a little bit more about that in just a second.

297
00:14:41,240 --> 00:14:42,080
 Yeah.

298
00:14:42,080 --> 00:14:44,280
 Okay, let me...

299
00:14:44,280 --> 00:14:46,280
 Sorry, I should have stopped sharing that.

300
00:14:46,280 --> 00:14:50,680
 Okay, so this really dives into that 11%.

301
00:14:50,680 --> 00:14:53,800
 Just wanted to really update the PEB on what staff did

302
00:14:53,800 --> 00:14:55,480
 and the great job that the water utility

303
00:14:55,480 --> 00:14:57,800
 helped us look at these customers.

304
00:14:57,800 --> 00:15:00,760
 So the 11% equates to about 3,600 customers

305
00:15:00,760 --> 00:15:04,060
 that use on an average over 15,000 gallons.

306
00:15:04,060 --> 00:15:06,100
 As I'd said, that fluctuates throughout the year.

307
00:15:06,100 --> 00:15:08,360
 One month, it could be a little bit more than that.

308
00:15:08,360 --> 00:15:10,640
 Next month, it could be a little bit less than that.

309
00:15:10,640 --> 00:15:13,960
 But we did sit on an average about 3,600.

310
00:15:13,960 --> 00:15:16,720
 What we did is we took basically the water consumption data

311
00:15:16,720 --> 00:15:19,040
 from customer service, all the water consumption

312
00:15:19,040 --> 00:15:20,960
 in the city for every single meter

313
00:15:20,960 --> 00:15:24,360
 within residential customers with the help of water.

314
00:15:24,360 --> 00:15:26,000
 Really grateful for their help.

315
00:15:26,000 --> 00:15:27,540
 We took that data and we plotted it

316
00:15:27,540 --> 00:15:29,680
 by partials within Denton.

317
00:15:29,680 --> 00:15:32,240
 And then what that did is that allowed us to look

318
00:15:32,240 --> 00:15:34,480
 at the geographical map, right?

319
00:15:34,480 --> 00:15:37,840
 And look at the area of town that those customers fit into.

320
00:15:37,840 --> 00:15:39,600
 I will tell you that there is no correlation

321
00:15:39,600 --> 00:15:41,960
 between lot size and water consumption,

322
00:15:41,960 --> 00:15:43,480
 as I said, Ms. Russell, just a while ago.

323
00:15:43,480 --> 00:15:45,760
 So what we did is to summarize the detail,

324
00:15:45,760 --> 00:15:48,280
 we put together this bar chart just to kind of give you

325
00:15:48,280 --> 00:15:49,840
 an example of how those customers fit

326
00:15:49,840 --> 00:15:52,000
 into the different categories.

327
00:15:52,000 --> 00:15:54,240
 So at the bottom, you can see consumption.

328
00:15:54,240 --> 00:15:56,920
 So 10 to 5,000 gallons consumption.

329
00:15:56,920 --> 00:16:01,720
 You can see 5,001 to 7,500, 7,500 to 15,

330
00:16:01,720 --> 00:16:03,880
 15 to 30, and then 30 to 90.

331
00:16:03,880 --> 00:16:09,240
 You see this light blue color, that is the partial size

332
00:16:09,240 --> 00:16:12,960
 for a 10 to 12,000 square foot piece of property.

333
00:16:12,960 --> 00:16:16,800
 The orange is 12,000 to 20, that is the partial size

334
00:16:16,800 --> 00:16:18,920
 for that color, and then so forth going down.

335
00:16:18,920 --> 00:16:21,960
 So you can see a bigger partial, one acre above,

336
00:16:21,960 --> 00:16:25,280
 is really this brownish orange color here

337
00:16:25,280 --> 00:16:26,800
 that's at the very bottom.

338
00:16:26,800 --> 00:16:29,200
 So if you start over here to the very left of the table,

339
00:16:29,200 --> 00:16:33,520
 you can see a partial from 10 gallons of usage

340
00:16:33,520 --> 00:16:34,880
 to 5,000 gallons.

341
00:16:34,880 --> 00:16:37,560
 The partial size that had the most consumption

342
00:16:37,560 --> 00:16:39,840
 or the most properties within that category

343
00:16:39,840 --> 00:16:42,680
 were 10 to 12,000 square feet.

344
00:16:42,680 --> 00:16:44,960
 As you get to the larger consumption categories,

345
00:16:44,960 --> 00:16:47,080
 you look out here at 15 to 30,

346
00:16:47,080 --> 00:16:50,080
 one would tend to think that a partial size

347
00:16:50,080 --> 00:16:53,160
 plays a big role into that water consumption.

348
00:16:53,160 --> 00:16:55,360
 One thing we did see within that data

349
00:16:55,360 --> 00:16:57,080
 is that some of the smaller partials

350
00:16:57,080 --> 00:16:59,680
 actually use more water than those bigger partials,

351
00:16:59,680 --> 00:17:01,600
 even a one acre lot or bigger.

352
00:17:01,600 --> 00:17:05,200
 So just really, you know, looking at the data staff

353
00:17:05,200 --> 00:17:07,960
 was not able to tie it down to a certain partial size

354
00:17:07,960 --> 00:17:10,720
 to say, you know, a half acre lot or a one acre lot

355
00:17:10,720 --> 00:17:13,760
 meets the definition of someone using over 15,000 gallons.

356
00:17:13,760 --> 00:17:17,280
 It's very possible for someone to have a 12,000 square foot

357
00:17:17,280 --> 00:17:20,240
 lot and use 5,000 gallons worth of water.

358
00:17:20,240 --> 00:17:22,320
 So we did dive into it.

359
00:17:22,320 --> 00:17:24,520
 Just wanted to make sure we pointed this out.

360
00:17:24,520 --> 00:17:31,000
 So rate options for the water utility.

361
00:17:31,000 --> 00:17:32,480
 We talked about these last time,

362
00:17:32,480 --> 00:17:34,720
 but we wanted to explore just put in front

363
00:17:34,720 --> 00:17:37,480
 of the public utility board one additional option

364
00:17:37,480 --> 00:17:40,280
 that we came up with after talking to city council.

365
00:17:40,280 --> 00:17:42,680
 So as I'd said earlier, the public utility board

366
00:17:42,680 --> 00:17:46,600
 did give us consent to move forward with option three.

367
00:17:46,600 --> 00:17:49,200
 That is in front of you today for consideration.

368
00:17:49,200 --> 00:17:51,080
 That is still staff's recommendation.

369
00:17:51,080 --> 00:17:53,520
 And that's still consistent with the cost of service model

370
00:17:53,520 --> 00:17:55,480
 that we completed a few months ago.

371
00:17:55,480 --> 00:18:00,160
 One thing we did look at is we looked at an option four

372
00:18:00,160 --> 00:18:02,280
 that would introduce an additional tier

373
00:18:02,280 --> 00:18:05,320
 between the 5,000 and 15,000 gallon range.

374
00:18:05,320 --> 00:18:08,360
 And I'll review that with you down here at the bottom.

375
00:18:08,360 --> 00:18:10,280
 So starting the very left of the screen,

376
00:18:10,280 --> 00:18:11,680
 you can see the current rate structure

377
00:18:11,680 --> 00:18:13,280
 with the winter and summer blocks.

378
00:18:13,280 --> 00:18:16,560
 You can see option three introduces a new tier

379
00:18:16,560 --> 00:18:20,680
 from zero to 5,000 gallons, the rate being 363.

380
00:18:20,680 --> 00:18:23,840
 And then that next tier being five to 15, 405.

381
00:18:23,840 --> 00:18:28,840
 You can notice as you go up higher, 15 to 30 at 712,

382
00:18:28,840 --> 00:18:33,840
 30 to 50 at 953, and then over 50,000 gallons is 1179.

383
00:18:33,840 --> 00:18:36,280
 So each one of these options are revenue neutral.

384
00:18:36,280 --> 00:18:38,920
 That is achieved by decreasing the rates

385
00:18:38,920 --> 00:18:39,880
 for the lower customer.

386
00:18:39,880 --> 00:18:42,120
 So those customers will see a rate decrease

387
00:18:42,120 --> 00:18:44,040
 under 15,000 gallons.

388
00:18:44,040 --> 00:18:46,600
 And that revenue is being made up by a rate increase

389
00:18:46,600 --> 00:18:48,520
 for customers over 15,000 gallons.

390
00:18:48,520 --> 00:18:51,400
 So really meant to incentivize that water conservation

391
00:18:51,400 --> 00:18:53,360
 within this utility.

392
00:18:53,360 --> 00:18:55,160
 Option four, what it does,

393
00:18:55,160 --> 00:18:58,520
 it does break up that five to 15,000 gallon tier,

394
00:18:58,520 --> 00:19:01,680
 adding in an additional tier from five to 7,000 gallons.

395
00:19:01,680 --> 00:19:04,960
 And that rate for that tier being $3.90.

396
00:19:04,960 --> 00:19:07,600
 And this is achieved by further increasing that rate

397
00:19:07,600 --> 00:19:09,360
 for those higher tier customers.

398
00:19:09,360 --> 00:19:11,240
 So anyone over 15,000 gallons

399
00:19:11,240 --> 00:19:13,560
 would even see more of a rate increase.

400
00:19:13,560 --> 00:19:16,480
 Status recommendation now is to proceed with option three,

401
00:19:16,480 --> 00:19:18,640
 which is the consultant's recommendation,

402
00:19:18,640 --> 00:19:21,520
 and see how the movement between the tiers

403
00:19:21,520 --> 00:19:23,280
 occurs in the coming months.

404
00:19:23,280 --> 00:19:25,160
 And then come back to you possibly next year

405
00:19:25,160 --> 00:19:28,560
 with some additional tiers of as the guidance we get.

406
00:19:28,560 --> 00:19:32,880
 So each one of these options are revenue neutral.

407
00:19:32,880 --> 00:19:34,720
 But one thing they currently,

408
00:19:34,720 --> 00:19:36,320
 and this is pointed out later in the presentation,

409
00:19:36,320 --> 00:19:39,000
 they do not consume is movement within the tiers.

410
00:19:39,000 --> 00:19:40,840
 So for example, if a lot of customers,

411
00:19:40,840 --> 00:19:44,240
 that 11% of customers start using less than 15,000 gallons,

412
00:19:44,240 --> 00:19:45,680
 there is a possibility that this utility

413
00:19:45,680 --> 00:19:47,320
 could see a revenue decrease.

414
00:19:47,320 --> 00:19:48,680
 So we wanted to make sure we pointed that out

415
00:19:48,680 --> 00:19:50,080
 to the Public Utility Board.

416
00:19:50,080 --> 00:19:54,880
 Residential rate comparison.

417
00:19:54,880 --> 00:19:58,680
 So same numbers, 89% are 29,197.

418
00:19:58,680 --> 00:20:01,600
 Other residential customers will see a rate decrease.

419
00:20:01,600 --> 00:20:04,320
 And those 11% of customers will see an increase.

420
00:20:04,320 --> 00:20:06,960
 One thing I did wanna show the Public Utilities Board is,

421
00:20:06,960 --> 00:20:09,400
 you know, what could a customer expect that they did use

422
00:20:09,400 --> 00:20:11,120
 over 15,000 gallons?

423
00:20:11,120 --> 00:20:12,360
 We don't want people to be surprised.

424
00:20:12,360 --> 00:20:13,520
 We want them to know exactly

425
00:20:13,520 --> 00:20:16,160
 what their bill is going to go to.

426
00:20:16,160 --> 00:20:19,960
 And so you can see a 7,600 gallon customer using 7,600,

427
00:20:19,960 --> 00:20:21,800
 which is that average per month

428
00:20:21,800 --> 00:20:25,080
 is currently paying $46.62.

429
00:20:25,080 --> 00:20:28,320
 You can see in the blue that customer paid $44.52.

430
00:20:28,320 --> 00:20:30,600
 So a decrease of $2.10.

431
00:20:30,600 --> 00:20:33,920
 15,000 gallons just showing that max

432
00:20:33,920 --> 00:20:36,520
 that you can use and still receive a rate decrease.

433
00:20:36,520 --> 00:20:38,760
 Currently paying 76.59.

434
00:20:38,760 --> 00:20:40,000
 Under option three,

435
00:20:40,000 --> 00:20:42,880
 which is staff's recommendation is 74.49,

436
00:20:42,880 --> 00:20:45,640
 they would see a $2.10 decrease also.

437
00:20:45,640 --> 00:20:48,560
 So when you get up into the 30,000 gallon water usage,

438
00:20:48,560 --> 00:20:51,000
 they're currently paying 162.99.

439
00:20:51,000 --> 00:20:53,640
 That bill would go to 181.29

440
00:20:53,640 --> 00:20:57,160
 for an $18.30 increase a month.

441
00:20:57,160 --> 00:21:00,160
 If you were a customer and you used over 50,000 gallons,

442
00:21:00,160 --> 00:21:03,200
 your bill is currently 321.99.

443
00:21:03,200 --> 00:21:08,200
 That bill would go to 371.89 for a $50 increase a month,

444
00:21:08,200 --> 00:21:10,560
 so $49.90.

445
00:21:10,560 --> 00:21:14,120
 So just kind of want to point out some different examples

446
00:21:14,120 --> 00:21:15,680
 across the spectrum,

447
00:21:15,680 --> 00:21:17,600
 as you could see what those rate increases are.

448
00:21:17,600 --> 00:21:19,800
 - Do you have a screen that shows the gross revenue change

449
00:21:19,800 --> 00:21:20,880
 with these estimates?

450
00:21:20,880 --> 00:21:23,160
 - Let me stop sharing this really quick.

451
00:21:23,160 --> 00:21:25,320
 I think I forgot last time.

452
00:21:25,320 --> 00:21:26,480
 Great question.

453
00:21:26,480 --> 00:21:29,120
 So each option is currently revenue neutral.

454
00:21:29,120 --> 00:21:32,200
 So if you see the ones increasing for the higher users

455
00:21:32,200 --> 00:21:34,200
 and see it decreasing for the lower users,

456
00:21:34,200 --> 00:21:36,040
 that's just revenue neutral to the fund.

457
00:21:36,040 --> 00:21:38,120
 If we didn't increase those rates for the higher tier

458
00:21:38,120 --> 00:21:40,720
 and we just let the fund take that revenue impact,

459
00:21:40,720 --> 00:21:43,120
 it'd be six to 700,000 a year.

460
00:21:43,120 --> 00:21:44,520
 - Okay. - Yeah.

461
00:21:44,520 --> 00:21:45,360
 Yeah, if we just said,

462
00:21:45,360 --> 00:21:46,520
 "Hey, we don't want to increase it for the higher tiers.

463
00:21:46,520 --> 00:21:48,440
 "We just want to decrease it for the lower tiers."

464
00:21:48,440 --> 00:21:51,160
 Six to 700,000, absolutely.

465
00:21:51,160 --> 00:21:53,760
 - And then kind of follow up to that is,

466
00:21:53,760 --> 00:21:56,680
 so thinking if usage,

467
00:21:56,680 --> 00:21:58,600
 behavior changes and usage drops,

468
00:21:58,600 --> 00:22:00,120
 obviously revenue would drop,

469
00:22:01,000 --> 00:22:03,680
 but would that also mean that our costs drop?

470
00:22:03,680 --> 00:22:06,360
 And so do you know what kind of impact that might have?

471
00:22:06,360 --> 00:22:09,560
 I mean, obviously knowing how much usage drops

472
00:22:09,560 --> 00:22:11,400
 is very variable.

473
00:22:11,400 --> 00:22:12,240
 - Right.

474
00:22:12,240 --> 00:22:14,400
 - But I wondered how those are related.

475
00:22:14,400 --> 00:22:17,200
 - So that's a great question.

476
00:22:17,200 --> 00:22:18,400
 And we actually had a follow up question

477
00:22:18,400 --> 00:22:21,200
 very similar to that because if we see a big shift

478
00:22:21,200 --> 00:22:23,320
 in usage within the water utility,

479
00:22:23,320 --> 00:22:26,480
 could it possibly delay some of those plant expansions?

480
00:22:26,480 --> 00:22:28,240
 And really after visiting with Stephen Gay,

481
00:22:28,240 --> 00:22:30,600
 the director of water, is what we come to find out

482
00:22:30,600 --> 00:22:32,840
 is we have to plan on the peak demand.

483
00:22:32,840 --> 00:22:35,400
 So even if those usage and those consumption habits

484
00:22:35,400 --> 00:22:38,160
 of the consumer change a little bit or decrease,

485
00:22:38,160 --> 00:22:41,160
 we really wouldn't see too much of a decrease in expenses.

486
00:22:41,160 --> 00:22:43,200
 We would still be planning for the peak demand.

487
00:22:43,200 --> 00:22:45,240
 We'd still be planning for those chemicals

488
00:22:45,240 --> 00:22:47,240
 or those different items to treat the water.

489
00:22:47,240 --> 00:22:50,200
 So hopefully that answers your question is really,

490
00:22:50,200 --> 00:22:51,400
 since we're planning on the peak,

491
00:22:51,400 --> 00:22:53,800
 it really wouldn't decrease expenses very much.

492
00:22:53,800 --> 00:22:59,800
 Okay, let me pull this back up.

493
00:23:01,320 --> 00:23:04,080
 (mouse clicking)

494
00:23:04,080 --> 00:23:09,880
 Okay, so commercial rate recommendations

495
00:23:09,880 --> 00:23:11,000
 won't spend too much time on this.

496
00:23:11,000 --> 00:23:12,400
 We visited about this last time.

497
00:23:12,400 --> 00:23:14,920
 No recommended changes to the commercial rate structure

498
00:23:14,920 --> 00:23:18,040
 for regular commercial water usage.

499
00:23:18,040 --> 00:23:20,120
 Currently is not a seasonal rate.

500
00:23:20,120 --> 00:23:22,200
 There is one fee for a facility charge

501
00:23:22,200 --> 00:23:25,040
 based on the meter size and then one volume charge

502
00:23:25,040 --> 00:23:27,640
 based on that water usage per thousand gallons.

503
00:23:27,640 --> 00:23:28,960
 I was just looking to keep this the same.

504
00:23:28,960 --> 00:23:31,760
 Just wanted to put this in front of the Public Utilities Board.

505
00:23:31,760 --> 00:23:35,320
 Commercial irrigation to simplify this rate structure,

506
00:23:35,320 --> 00:23:38,360
 we are recommending that we combine the winter and summer rate

507
00:23:38,360 --> 00:23:40,040
 into one blended rate.

508
00:23:40,040 --> 00:23:42,240
 And you can see currently for a winter,

509
00:23:42,240 --> 00:23:44,640
 the volume metric rate is 434.

510
00:23:44,640 --> 00:23:46,400
 For summer it's $6.

511
00:23:46,400 --> 00:23:50,480
 And that combined, we're looking to introduce a 575 rate.

512
00:23:50,480 --> 00:23:53,800
 And this would result in a decrease of approximately $10.65

513
00:23:53,800 --> 00:23:55,600
 for commercial customers.

514
00:23:55,600 --> 00:23:57,980
 And if you recall, in our cost service study,

515
00:23:57,980 --> 00:23:59,840
 commercial customers are over recovering.

516
00:23:59,840 --> 00:24:01,760
 So this is a step in the right direction

517
00:24:01,760 --> 00:24:03,600
 for cost recovery purposes.

518
00:24:03,600 --> 00:24:08,240
 Wholesale rates, we reviewed these last time.

519
00:24:08,240 --> 00:24:10,120
 I did want to point out to the Public Utility Board,

520
00:24:10,120 --> 00:24:12,800
 we have made one update that is in the rate ordinance

521
00:24:12,800 --> 00:24:14,000
 for your consideration today.

522
00:24:14,000 --> 00:24:16,400
 It is our wholesale raw water pass-through rate.

523
00:24:16,400 --> 00:24:18,840
 And this number has been updated based on the June CPI

524
00:24:18,840 --> 00:24:21,800
 adjuster that's come available since the last time we talked.

525
00:24:21,800 --> 00:24:25,640
 The last time we showed you the rate is 0.0282 proposed.

526
00:24:25,640 --> 00:24:29,120
 We are looking to propose 0.0285 based on that adjuster.

527
00:24:29,120 --> 00:24:33,360
 Wastewater rate changes.

528
00:24:33,360 --> 00:24:34,840
 We talked a little bit about these last time.

529
00:24:34,840 --> 00:24:36,760
 Dino-soil per cubic yard.

530
00:24:36,760 --> 00:24:39,120
 We are looking to increase that from 30 to 35

531
00:24:39,120 --> 00:24:41,960
 based on cost of service of making this material

532
00:24:41,960 --> 00:24:44,840
 and demand of it has been up here lately.

533
00:24:44,840 --> 00:24:46,520
 And then you can see some discount rates

534
00:24:46,520 --> 00:24:49,080
 if you were to buy 10 to 99 yards

535
00:24:49,080 --> 00:24:52,440
 or a hundred plus yards getting 40% off.

536
00:24:55,120 --> 00:24:56,880
 So rate changes, just a little bit of history

537
00:24:56,880 --> 00:25:00,200
 back from fiscal year 2015 to current.

538
00:25:00,200 --> 00:25:02,120
 We're not really showing a rate decrease this year.

539
00:25:02,120 --> 00:25:03,440
 We're just redoing the rate structure.

540
00:25:03,440 --> 00:25:05,720
 So it's something definitely we can add in the future.

541
00:25:05,720 --> 00:25:09,200
 But you can see up to fiscal year 2017,

542
00:25:09,200 --> 00:25:12,040
 we had annual rate increases since 2018.

543
00:25:12,040 --> 00:25:14,560
 Actually had some rate decreases moving forward

544
00:25:14,560 --> 00:25:16,040
 and no rate changes at all.

545
00:25:16,040 --> 00:25:21,040
 So just rate recommendations, really quick one to recap it.

546
00:25:21,040 --> 00:25:23,360
 So option three, as we talked about,

547
00:25:23,360 --> 00:25:25,320
 this is staff's recommendation.

548
00:25:25,320 --> 00:25:27,120
 The recommendation that was the guidance we received

549
00:25:27,120 --> 00:25:29,240
 from the PV and city council.

550
00:25:29,240 --> 00:25:32,280
 And is also consistent with the consultant's recommendation

551
00:25:32,280 --> 00:25:35,520
 of stepping into new tiers for the water utility.

552
00:25:35,520 --> 00:25:37,680
 Commercial water service option one

553
00:25:37,680 --> 00:25:39,240
 for the regular water service

554
00:25:39,240 --> 00:25:42,280
 to maintain our current rate structure, no change.

555
00:25:42,280 --> 00:25:45,040
 And then option two for the irrigation rates,

556
00:25:45,040 --> 00:25:48,160
 which is combining the winter and summer rate structure.

557
00:25:48,160 --> 00:25:50,520
 And then the wholesale water service adjustments

558
00:25:50,520 --> 00:25:52,200
 in accordance with contracts.

559
00:25:52,200 --> 00:25:53,240
 And then those wastewater,

560
00:25:53,240 --> 00:25:55,560
 just those cost of service adjustments.

561
00:25:55,560 --> 00:25:57,400
 And then lastly, just point out the risk

562
00:25:57,400 --> 00:25:58,640
 associated with the new rate structures

563
00:25:58,640 --> 00:25:59,800
 we talked about before.

564
00:25:59,800 --> 00:26:01,640
 Each option is revenue neutral.

565
00:26:01,640 --> 00:26:03,280
 It does not contemplate customers

566
00:26:03,280 --> 00:26:05,120
 changing their consumption habits.

567
00:26:05,120 --> 00:26:07,160
 If they drastically reduce their water usage,

568
00:26:07,160 --> 00:26:10,040
 there is a risk of this fund to have a revenue decrease.

569
00:26:10,040 --> 00:26:11,560
 So we can revisit that as next year,

570
00:26:11,560 --> 00:26:12,400
 update you accordingly

571
00:26:12,400 --> 00:26:14,600
 as we proceed through the next fiscal year.

572
00:26:14,600 --> 00:26:17,800
 And then upcoming next steps.

573
00:26:17,800 --> 00:26:20,640
 So this presentation will go to city council tomorrow.

574
00:26:20,640 --> 00:26:22,320
 We are coming up on the public hearings,

575
00:26:22,320 --> 00:26:23,560
 which are September 14th.

576
00:26:23,560 --> 00:26:25,240
 So just a few weeks away.

577
00:26:25,240 --> 00:26:28,120
 And in September 21st, we do have the budget adoption,

578
00:26:28,120 --> 00:26:30,080
 the tax rate and the rates scheduled

579
00:26:30,080 --> 00:26:31,640
 to be adopted by city council.

580
00:26:31,640 --> 00:26:35,000
 And that concludes the presentation.

581
00:26:35,000 --> 00:26:36,480
 I'll pull down for questions.

582
00:26:36,480 --> 00:26:47,040
 - Madam chair, I don't have a question but I have a comment.

583
00:26:47,040 --> 00:26:48,840
 I like the city council's approach

584
00:26:48,840 --> 00:26:50,920
 of adding the additional tier.

585
00:26:50,920 --> 00:26:54,080
 So I'm certainly would be in favor of that.

586
00:26:54,080 --> 00:27:01,320
 - I think either way is good.

587
00:27:01,320 --> 00:27:02,680
 I'd support either option.

588
00:27:02,680 --> 00:27:07,960
 - Yeah, as somebody who's gonna be paying more

589
00:27:07,960 --> 00:27:10,240
 because my husband loves his lawn,

590
00:27:10,240 --> 00:27:15,360
 either arrangement would be fine with me.

591
00:27:15,360 --> 00:27:19,240
 I want him to feel the pain of watering

592
00:27:19,240 --> 00:27:21,440
 that stupid St. Augustine.

593
00:27:21,440 --> 00:27:24,600
 So I'm totally in favor of the tier approach

594
00:27:24,600 --> 00:27:27,440
 because we just use too much water.

595
00:27:27,440 --> 00:27:31,520
 - I think the difference between the five

596
00:27:31,520 --> 00:27:34,560
 and the five and $7,000 or 7,000 gallon tiers

597
00:27:34,560 --> 00:27:35,800
 is so minimal.

598
00:27:35,800 --> 00:27:39,880
 I don't even, I don't see much of a difference

599
00:27:39,880 --> 00:27:44,640
 for the end user just to maybe a few cents.

600
00:27:44,640 --> 00:27:45,960
 So either one.

601
00:27:45,960 --> 00:27:51,480
 - And I'm good with either one too.

602
00:27:51,480 --> 00:27:56,080
 But if the consultant is also saying option three,

603
00:27:56,080 --> 00:27:59,080
 then I'd be more in favor of option three.

604
00:27:59,080 --> 00:28:02,600
 - And then chair, if I may,

605
00:28:02,600 --> 00:28:03,880
 the ordinances in front of you today

606
00:28:03,880 --> 00:28:05,440
 is based on option three.

607
00:28:05,440 --> 00:28:06,840
 Staff's recommendation would be

608
00:28:06,840 --> 00:28:09,080
 is to adopt the ordinance as it is,

609
00:28:09,080 --> 00:28:10,720
 circle back with the public utilities board

610
00:28:10,720 --> 00:28:12,760
 next fiscal year once we understand the movement

611
00:28:12,760 --> 00:28:13,600
 within the fund.

612
00:28:13,600 --> 00:28:15,160
 And then we can really dial in

613
00:28:15,160 --> 00:28:17,320
 where those tiers need to be created, so.

614
00:28:17,320 --> 00:28:19,120
 - Okay.

615
00:28:19,120 --> 00:28:23,520
 Yeah, that is on the second item

616
00:28:23,520 --> 00:28:25,840
 on the individual consideration, so.

617
00:28:25,840 --> 00:28:31,120
 Okay.

618
00:28:31,120 --> 00:28:32,240
 Any other questions?

619
00:28:32,240 --> 00:28:34,360
 Thank you, Nick.

620
00:28:34,360 --> 00:28:41,280
 Okay, so let's go into items for individual consideration.

621
00:28:41,280 --> 00:28:43,200
 The first item is consider approval

622
00:28:43,200 --> 00:28:46,040
 of the August 9th, 2021 minutes.

623
00:28:46,040 --> 00:28:47,880
 Do we have a motion to approve?

624
00:28:47,880 --> 00:28:53,760
 - So moved.

625
00:28:53,760 --> 00:28:54,880
 - Thank you, Karen.

626
00:28:54,880 --> 00:28:56,440
 And do we have a second?

627
00:28:56,440 --> 00:28:57,280
 - Second.

628
00:28:57,280 --> 00:29:00,240
 - All in favor say aye.

629
00:29:00,240 --> 00:29:01,440
 - Aye.

630
00:29:01,440 --> 00:29:03,960
 - And I'm going to abstain that wasn't there, so.

631
00:29:03,960 --> 00:29:05,640
 And I didn't watch it, so.

632
00:29:05,640 --> 00:29:08,680
 Second item is consider recommending

633
00:29:08,680 --> 00:29:09,960
 the adoption of an ordinance,

634
00:29:09,960 --> 00:29:12,800
 establishing the rates for water and water service,

635
00:29:12,800 --> 00:29:14,640
 providing for repealer,

636
00:29:14,640 --> 00:29:16,560
 providing for several ability clause

637
00:29:16,560 --> 00:29:18,640
 and providing for an effective date.

638
00:29:18,640 --> 00:29:22,560
 - So do you want to make the motion

639
00:29:22,560 --> 00:29:24,560
 including the comments from the PUB?

640
00:29:24,560 --> 00:29:26,360
 Is that probably the appropriate way?

641
00:29:26,360 --> 00:29:30,480
 - You can make the motion to adopt the ordinance

642
00:29:30,480 --> 00:29:31,800
 as presented in front of you today

643
00:29:31,800 --> 00:29:34,080
 if you wanted to at sports option three,

644
00:29:34,080 --> 00:29:36,600
 that was previously the direction staff received.

645
00:29:36,600 --> 00:29:39,520
 Any true question, Mr. Chief?

646
00:29:39,520 --> 00:29:41,840
 - Yeah, I just know that we had a naysayer here

647
00:29:41,840 --> 00:29:45,200
 and I wanted to see what we needed to do about that

648
00:29:45,200 --> 00:29:47,560
 to pass the rate, Susan.

649
00:29:47,560 --> 00:29:54,080
 - I would say we could pass it as it is presented today

650
00:29:54,080 --> 00:29:57,320
 and with the following up in another year,

651
00:29:57,320 --> 00:30:01,360
 'cause I believe was suggesting that the extra.

652
00:30:01,360 --> 00:30:07,080
 - Uh oh, you're out.

653
00:30:11,760 --> 00:30:13,080
 I just froze.

654
00:30:13,080 --> 00:30:14,960
 - You did, but you're back now.

655
00:30:14,960 --> 00:30:15,800
 - Okay.

656
00:30:15,800 --> 00:30:19,600
 Yeah, it's saying my internet connection is unstable.

657
00:30:19,600 --> 00:30:20,440
 I don't know.

658
00:30:20,440 --> 00:30:25,880
 Did you hear what I said?

659
00:30:25,880 --> 00:30:27,080
 - No.

660
00:30:27,080 --> 00:30:28,240
 - No, okay.

661
00:30:28,240 --> 00:30:31,040
 What I said was we could approve it as it is

662
00:30:31,040 --> 00:30:34,520
 with the comment to come back and review it

663
00:30:34,520 --> 00:30:37,080
 after another year to see if the changes occurred.

664
00:30:37,080 --> 00:30:39,720
 I just went out again, didn't I?

665
00:30:39,720 --> 00:30:41,040
 - No, you're still here.

666
00:30:41,040 --> 00:30:41,880
 - Okay.

667
00:30:41,880 --> 00:30:45,360
 Everybody else was frozen on my end.

668
00:30:45,360 --> 00:30:52,120
 - I'll make a motion to approve as presented.

669
00:30:52,120 --> 00:30:55,920
 - I'll second.

670
00:30:55,920 --> 00:30:56,760
 - Thank you, Karen.

671
00:30:56,760 --> 00:30:58,440
 All in favor say aye.

672
00:30:58,440 --> 00:30:59,880
 - Aye.

673
00:30:59,880 --> 00:31:00,720
 - Opposed?

674
00:31:00,720 --> 00:31:03,880
 Okay, that carries.

675
00:31:03,880 --> 00:31:06,520
 Next item is consider recommending adoption

676
00:31:06,520 --> 00:31:08,400
 of an ordinance establishing the rates

677
00:31:08,400 --> 00:31:11,320
 for fighting for repealer,

678
00:31:11,320 --> 00:31:13,360
 providing for a severability clause

679
00:31:13,360 --> 00:31:15,280
 and providing for an effective date.

680
00:31:15,280 --> 00:31:20,800
 - Chair, I don't have a present.

681
00:31:20,800 --> 00:31:23,560
 I do have a presentation if you'd like to see it.

682
00:31:23,560 --> 00:31:25,360
 I'd be happy to pull it up.

683
00:31:25,360 --> 00:31:27,200
 Otherwise, just looking for your approval.

684
00:31:27,200 --> 00:31:28,040
 - Yeah.

685
00:31:28,040 --> 00:31:30,080
 Do we have a motion to approve?

686
00:31:30,080 --> 00:31:30,920
 - So moved.

687
00:31:30,920 --> 00:31:33,360
 - And a second.

688
00:31:33,360 --> 00:31:34,200
 - Second.

689
00:31:34,200 --> 00:31:37,240
 - I think that was Barbara.

690
00:31:37,240 --> 00:31:38,840
 All in favor say aye.

691
00:31:38,840 --> 00:31:39,680
 - Aye.

692
00:31:39,680 --> 00:31:41,440
 - Opposed?

693
00:31:41,440 --> 00:31:46,720
 Consider recommending an adoption of an ordinance

694
00:31:46,720 --> 00:31:49,840
 of the city of Denton, Texas establishing for the rates

695
00:31:49,840 --> 00:31:52,600
 for solid waste and recycling collection service,

696
00:31:52,600 --> 00:31:56,600
 repealing ordinance number 20, 1551,

697
00:31:56,600 --> 00:31:57,920
 providing for repealer,

698
00:31:57,920 --> 00:31:59,920
 providing for severability clause

699
00:31:59,920 --> 00:32:02,560
 and providing for an effective date.

700
00:32:02,560 --> 00:32:06,080
 I think this is the same, right Nick, that presentation?

701
00:32:06,080 --> 00:32:06,920
 - It is the same.

702
00:32:06,920 --> 00:32:08,080
 I saw the presentation last time.

703
00:32:08,080 --> 00:32:09,480
 If anybody wishes to see it, I can pull it up.

704
00:32:09,480 --> 00:32:12,000
 Otherwise, I just need your approval.

705
00:32:12,000 --> 00:32:13,520
 - We have a motion to approve.

706
00:32:13,520 --> 00:32:15,200
 - Move approval.

707
00:32:15,200 --> 00:32:17,800
 - Thank you.

708
00:32:17,800 --> 00:32:18,640
 Thank you.

709
00:32:18,640 --> 00:32:23,840
 Opposed?

710
00:32:23,840 --> 00:32:24,880
 I'm back.

711
00:32:24,880 --> 00:32:26,400
 - There you are.

712
00:32:26,400 --> 00:32:28,120
 Did we all, call it again.

713
00:32:28,120 --> 00:32:29,640
 Call the vote again.

714
00:32:29,640 --> 00:32:30,640
 - Okay.

715
00:32:30,640 --> 00:32:32,080
 Do we have a motion?

716
00:32:32,080 --> 00:32:34,600
 No, we have a motion and a second.

717
00:32:34,600 --> 00:32:36,120
 All in favor say aye.

718
00:32:36,120 --> 00:32:36,960
 - Aye.

719
00:32:36,960 --> 00:32:39,520
 - And opposed?

720
00:32:39,520 --> 00:32:40,920
 That carries.

721
00:32:40,920 --> 00:32:43,200
 Consider recommending adoption of an ordinance

722
00:32:43,200 --> 00:32:44,320
 of the city of Denton,

723
00:32:44,320 --> 00:32:47,280
 a Texas Home Rural Municipal Corporation,

724
00:32:47,280 --> 00:32:49,960
 authorizing the city manager to execute a lease

725
00:32:49,960 --> 00:32:51,960
 with Core Scientific Inc.

726
00:32:51,960 --> 00:32:54,840
 for approximately 30 acres of city owned property

727
00:32:54,840 --> 00:32:59,840
 located in the Moses H. Davis Survey, abstract number 377,

728
00:32:59,840 --> 00:33:03,520
 in the Johnson Green Myers and Brumlett Survey,

729
00:33:03,520 --> 00:33:06,440
 abstract number 1699,

730
00:33:06,440 --> 00:33:09,040
 all in the city and county of Denton, Texas

731
00:33:09,040 --> 00:33:11,240
 and providing for an effective date.

732
00:33:11,240 --> 00:33:18,240
 - Good morning, Madam Chairman.

733
00:33:18,240 --> 00:33:22,480
 It's Terry Nolte, DME Assistant General Manager.

734
00:33:22,480 --> 00:33:27,720
 I think if it's all right with the city attorney,

735
00:33:27,720 --> 00:33:30,920
 if you could call both that item and the following item,

736
00:33:30,920 --> 00:33:33,160
 we could take them both up to same time.

737
00:33:33,160 --> 00:33:34,000
 - All right.

738
00:33:34,000 --> 00:33:37,760
 Consider recommending the adoption of an ordinance

739
00:33:37,760 --> 00:33:40,040
 with the city of Denton, a Texas Home Rural

740
00:33:40,040 --> 00:33:44,720
 Municipal Corporation approving a purchase power agreement

741
00:33:44,720 --> 00:33:47,200
 between the city and Core Scientific,

742
00:33:47,200 --> 00:33:50,560
 a Delaware corporation providing for the expenditure of funds

743
00:33:50,560 --> 00:33:52,320
 and providing for an effective date.

744
00:33:52,320 --> 00:33:55,120
 Okay.

745
00:33:55,120 --> 00:33:57,680
 - Okay, let me share my screen real quick.

746
00:34:03,480 --> 00:34:04,880
 - One moment, please.

747
00:34:04,880 --> 00:34:23,640
 Okay, can everyone see that presentation?

748
00:34:23,640 --> 00:34:26,880
 - Yes. - Okay.

749
00:34:26,880 --> 00:34:27,800
 - Thank you.

750
00:34:27,800 --> 00:34:28,640
 - Thank you.

751
00:34:28,640 --> 00:34:29,480
 - Thank you.

752
00:34:29,480 --> 00:34:33,240
 Is this presentation? - Yes.

753
00:34:33,240 --> 00:34:34,080
 - Okay, I apologize.

754
00:34:34,080 --> 00:34:38,280
 My computer is telling me I needed to update Zoom

755
00:34:38,280 --> 00:34:40,800
 into the latest version at the same time.

756
00:34:40,800 --> 00:34:46,040
 Okay, today we're here to talk about the proposed lease

757
00:34:46,040 --> 00:34:50,240
 between the city of Denton and Core Scientific.

758
00:34:50,240 --> 00:34:54,280
 Core Scientific is the proposed owner

759
00:34:54,280 --> 00:34:55,820
 of the new data center.

760
00:34:56,880 --> 00:34:59,800
 Should you and the council approve it,

761
00:34:59,800 --> 00:35:02,000
 council is taking this up tomorrow.

762
00:35:02,000 --> 00:35:06,600
 And I do have some participants from Core Scientific.

763
00:35:06,600 --> 00:35:09,800
 Jeff Pratt is with us with Core Scientific

764
00:35:09,800 --> 00:35:14,240
 and Chris Hemshot with Tanaska is with us as well

765
00:35:14,240 --> 00:35:15,640
 to answer questions.

766
00:35:15,640 --> 00:35:21,720
 So the proposed data center project

767
00:35:21,720 --> 00:35:23,920
 that we've been in discussion with the city council,

768
00:35:23,920 --> 00:35:28,400
 VME is proposing to lease two parcels of property

769
00:35:28,400 --> 00:35:30,960
 at the Denton Energy Center.

770
00:35:30,960 --> 00:35:34,040
 On the exhibit to the left,

771
00:35:34,040 --> 00:35:39,040
 you can see the sites are both north and south

772
00:35:39,040 --> 00:35:41,440
 of the existing Denton Energy Center.

773
00:35:41,440 --> 00:35:43,360
 This is the Denton Energy Center here.

774
00:35:43,360 --> 00:35:48,880
 Site two is on the north, site one is to the south.

775
00:35:48,880 --> 00:35:52,640
 The airport is over here on the right-hand side.

776
00:35:52,640 --> 00:35:57,200
 And this is a substation that's owned by Encore.

777
00:35:57,200 --> 00:35:59,560
 This is the old Jim Crystal substation

778
00:35:59,560 --> 00:36:01,480
 and here's Jim Crystal Road.

779
00:36:01,480 --> 00:36:07,760
 The property was rezoned to light industrial

780
00:36:07,760 --> 00:36:11,040
 last week by action of the city council.

781
00:36:11,040 --> 00:36:15,840
 The total lease area is to be 30 acres.

782
00:36:15,840 --> 00:36:18,640
 It consists of both of these two parcels.

783
00:36:18,640 --> 00:36:23,640
 And as the development will include development

784
00:36:23,640 --> 00:36:29,400
 of two phases on the site down here

785
00:36:29,400 --> 00:36:34,040
 and then a third final phase on the north site here.

786
00:36:34,040 --> 00:36:39,280
 The term lease is a seven-year lease

787
00:36:39,280 --> 00:36:42,480
 with one seven-year extension term.

788
00:36:45,360 --> 00:36:49,640
 The lease is co-terminus with the power purchase agreement

789
00:36:49,640 --> 00:36:55,200
 and the lease and the power purchase agreement

790
00:36:55,200 --> 00:36:59,200
 have cross-default provisions so that a default

791
00:36:59,200 --> 00:37:02,600
 under either agreement would result in a default

792
00:37:02,600 --> 00:37:04,880
 under the other agreement.

793
00:37:04,880 --> 00:37:07,320
 Likewise, with respect to terminations,

794
00:37:07,320 --> 00:37:10,240
 a termination of either agreement would result

795
00:37:10,240 --> 00:37:12,960
 in a termination of the other agreement.

796
00:37:14,080 --> 00:37:18,680
 The lease rate is $10,075 per month.

797
00:37:18,680 --> 00:37:20,720
 It is subject to escalations

798
00:37:20,720 --> 00:37:24,720
 based on CPI adjustments every two years.

799
00:37:24,720 --> 00:37:30,880
 And it is a market-based rate that was determined

800
00:37:30,880 --> 00:37:32,600
 by the real estate department.

801
00:37:32,600 --> 00:37:39,080
 One thing that's important is that as you all are aware,

802
00:37:39,080 --> 00:37:42,120
 the debt energy center as well as the substation

803
00:37:42,120 --> 00:37:46,520
 adjacent to the center have tight access controls

804
00:37:46,520 --> 00:37:51,120
 and the lease prohibits and restricts access

805
00:37:51,120 --> 00:37:53,520
 to those controlled areas on the site.

806
00:37:53,520 --> 00:38:03,640
 The bulk of the terms and conditions of this transaction

807
00:38:03,640 --> 00:38:06,280
 have to deal with the disposition of equipment,

808
00:38:06,280 --> 00:38:10,880
 improvements that are made on the property

809
00:38:10,880 --> 00:38:13,120
 during the term of the agreement.

810
00:38:13,120 --> 00:38:19,240
 And with that, we would recommend adoption.

811
00:38:19,240 --> 00:38:26,120
 And as I said earlier, Madam Chair,

812
00:38:26,120 --> 00:38:29,280
 we do have someone here, Mr. Pratt,

813
00:38:29,280 --> 00:38:34,280
 from Course Scientific Online

814
00:38:34,280 --> 00:38:37,800
 who's available to answer questions.

815
00:38:37,800 --> 00:38:40,960
 And I've got a few slides that we could go over with.

816
00:38:40,960 --> 00:38:43,240
 - Questions.

817
00:38:43,240 --> 00:38:46,080
 Barbara, I think you had a couple of questions.

818
00:38:46,080 --> 00:38:47,520
 - Yes, I did, thank you.

819
00:38:47,520 --> 00:38:52,480
 How old is your company and how long,

820
00:38:52,480 --> 00:38:57,160
 what is the length of time at your various locations?

821
00:38:57,160 --> 00:39:00,400
 What length of time have you been in operation there?

822
00:39:00,400 --> 00:39:03,560
 - Sure, that's a great question.

823
00:39:03,560 --> 00:39:06,120
 We actually have one slide kind of on our timeline.

824
00:39:07,200 --> 00:39:11,120
 Our founders started working in this area back in 2012,

825
00:39:11,120 --> 00:39:13,800
 but Course Scientific as a legal entity

826
00:39:13,800 --> 00:39:16,360
 was opened in December of 2017.

827
00:39:16,360 --> 00:39:21,600
 And that's 2017 would be the year we expanded

828
00:39:21,600 --> 00:39:24,440
 and opened in North Carolina.

829
00:39:24,440 --> 00:39:27,960
 We followed in 2018 in Georgia.

830
00:39:27,960 --> 00:39:31,440
 And in 2019, we expanded into Kentucky.

831
00:39:31,440 --> 00:39:35,880
 Here in 2021, we're expanding into North Dakota.

832
00:39:35,880 --> 00:39:38,520
 And hopefully, we're excited about this relationship

833
00:39:38,520 --> 00:39:41,360
 and opportunity with the city of Denton

834
00:39:41,360 --> 00:39:42,840
 to move into Texas as well.

835
00:39:42,840 --> 00:39:47,240
 So this would be our fourth real full year of operation

836
00:39:47,240 --> 00:39:49,160
 entering our fifth year.

837
00:39:49,160 --> 00:39:52,760
 - Thank you.

838
00:39:52,760 --> 00:39:57,040
 - So the very next slide actually shows that timeline.

839
00:39:57,040 --> 00:40:00,440
 And I'm happy to flip back and forth

840
00:40:00,440 --> 00:40:01,480
 and answer any questions.

841
00:40:01,480 --> 00:40:02,720
 I'm happy to give a short overview.

842
00:40:02,720 --> 00:40:05,120
 I wanna use your time.

843
00:40:05,120 --> 00:40:06,640
 I know everybody's always busy on time.

844
00:40:06,640 --> 00:40:11,000
 So whatever is most useful to this committee or board,

845
00:40:11,000 --> 00:40:14,040
 I'm happy to use the time that would make it helpful to you.

846
00:40:14,040 --> 00:40:18,240
 - Are there questions?

847
00:40:18,240 --> 00:40:26,320
 - I do have a few questions.

848
00:40:26,320 --> 00:40:28,080
 This is really about the land layout

849
00:40:28,080 --> 00:40:31,600
 and some more for probably VME staff.

850
00:40:33,000 --> 00:40:36,200
 Is it possible to pull back up the map

851
00:40:36,200 --> 00:40:39,880
 in the presentation showing the parcels for trucks?

852
00:40:39,880 --> 00:40:42,480
 - Sure.

853
00:40:42,480 --> 00:40:56,320
 - And I'm suspecting that site one and site two are chosen

854
00:40:56,320 --> 00:40:58,960
 for the proximity to the switch gear there,

855
00:40:58,960 --> 00:41:02,240
 the 138KV substation.

856
00:41:03,440 --> 00:41:04,280
 - That's correct.

857
00:41:04,280 --> 00:41:07,920
 This is the substation, the Jim Crystal substation.

858
00:41:07,920 --> 00:41:13,960
 Phase one and two will be fed out of the substation.

859
00:41:13,960 --> 00:41:19,480
 You'll notice along the edge here,

860
00:41:19,480 --> 00:41:21,080
 you can't see 'em exactly,

861
00:41:21,080 --> 00:41:25,480
 but we have 138KV transmission lines

862
00:41:25,480 --> 00:41:27,440
 that run north to south.

863
00:41:27,440 --> 00:41:31,520
 And then there's the substation here with Encore.

864
00:41:31,520 --> 00:41:33,920
 There's a transmission line that runs

865
00:41:33,920 --> 00:41:36,160
 through the Encore substation as well.

866
00:41:36,160 --> 00:41:41,440
 - And I just wanna, I'm curious if there's been any work

867
00:41:41,440 --> 00:41:46,440
 to lay out this potential future tracks

868
00:41:46,440 --> 00:41:53,800
 so that as additional leases or additional development

869
00:41:53,800 --> 00:41:58,280
 or potentially solar or other uses go in here

870
00:41:58,280 --> 00:42:03,280
 that we have good, consistent layout with access

871
00:42:03,280 --> 00:42:09,840
 and noticing the distance between my future Luke 288

872
00:42:09,840 --> 00:42:14,840
 and the eastern edge of both of these lease contracts.

873
00:42:14,840 --> 00:42:21,000
 It's fairly small, if we were to have another potential leaser

874
00:42:21,000 --> 00:42:26,880
 on the east side of future 288 or southern property

875
00:42:27,840 --> 00:42:30,840
 and so forth, is there a plan to kind of...

876
00:42:30,840 --> 00:42:37,080
 - Yeah, the site is actually quite constrained

877
00:42:37,080 --> 00:42:40,360
 by easements due to the fact that we have

878
00:42:40,360 --> 00:42:43,600
 so many transmission lines, distribution lines,

879
00:42:43,600 --> 00:42:47,560
 and gas supply pipelines crossing the site.

880
00:42:47,560 --> 00:42:52,560
 And so there really isn't additional available property

881
00:42:52,560 --> 00:42:55,520
 for development on the deck site.

882
00:42:55,520 --> 00:43:00,520
 The Luke 288 will hive off a pretty good section

883
00:43:00,520 --> 00:43:03,200
 of the east side of the property.

884
00:43:03,200 --> 00:43:08,200
 And then on the east side of the future 288 loop

885
00:43:08,200 --> 00:43:13,160
 is airport property and the city is actually in discussions

886
00:43:13,160 --> 00:43:17,280
 or working on design for the use of that property

887
00:43:17,280 --> 00:43:18,840
 for other city functions.

888
00:43:18,840 --> 00:43:23,960
 - Okay, so it sounds like there isn't much other opportunity

889
00:43:23,960 --> 00:43:25,440
 for future leases.

890
00:43:25,440 --> 00:43:29,200
 - No, there's a small segment up against

891
00:43:29,200 --> 00:43:33,360
 Jim Crystal Road that could be leased,

892
00:43:33,360 --> 00:43:37,160
 but it's, you have to transact a couple

893
00:43:37,160 --> 00:43:40,920
 environmentally sensitive areas to get to that property.

894
00:43:40,920 --> 00:43:43,760
 - Thank you.

895
00:43:43,760 --> 00:43:48,920
 - All right, other questions?

896
00:43:52,880 --> 00:43:54,760
 All right, do we have a motion then

897
00:43:54,760 --> 00:43:57,440
 to approve the lease agreement?

898
00:43:57,440 --> 00:44:01,520
 - I'll move to approve.

899
00:44:01,520 --> 00:44:04,320
 - Second. - Second.

900
00:44:04,320 --> 00:44:11,480
 - I froze, so who moved it?

901
00:44:11,480 --> 00:44:14,080
 - Benjumper moved to approve.

902
00:44:14,080 --> 00:44:14,920
 - Okay.

903
00:44:14,920 --> 00:44:19,040
 - And I guess Devin, you seconded?

904
00:44:19,040 --> 00:44:20,280
 - I'll second, yeah.

905
00:44:20,280 --> 00:44:23,000
 - All right, so all in favor say aye.

906
00:44:23,000 --> 00:44:24,520
 - Aye. - Aye.

907
00:44:24,520 --> 00:44:25,360
 - Opposed?

908
00:44:25,360 --> 00:44:27,400
 Sorry about this internet connection.

909
00:44:27,400 --> 00:44:30,120
 That carries.

910
00:44:30,120 --> 00:44:32,240
 - Thank you, the court.

911
00:44:32,240 --> 00:44:36,280
 - Verification, you had two items for consideration,

912
00:44:36,280 --> 00:44:38,080
 which one was just moved in here?

913
00:44:38,080 --> 00:44:39,600
 - Just the lease, I'm sorry.

914
00:44:39,600 --> 00:44:41,640
 - Okay, thank you.

915
00:44:41,640 --> 00:44:42,480
 - You're welcome.

916
00:44:42,480 --> 00:44:47,160
 - Madam Chairman, I do not have a formal presentation

917
00:44:47,160 --> 00:44:48,640
 on the power purchase agreement,

918
00:44:48,640 --> 00:44:51,440
 but I'd be glad to answer any questions that you might have.

919
00:44:51,440 --> 00:44:55,200
 - Okay, are there further questions on the power agreement?

920
00:44:55,200 --> 00:45:01,680
 I'm seeing none, all right, do we have a motion?

921
00:45:01,680 --> 00:45:03,120
 Oh, I'm sorry, go ahead.

922
00:45:03,120 --> 00:45:05,040
 (phone ringing)

923
00:45:05,040 --> 00:45:07,040
 - I'm asking here, I wondered if they could comment

924
00:45:07,040 --> 00:45:10,840
 about the internet connection agreement

925
00:45:10,840 --> 00:45:13,960
 and their plans for that, since we have them here.

926
00:45:13,960 --> 00:45:16,280
 - All right.

927
00:45:16,280 --> 00:45:17,960
 - I apologize, there was a phone ringing

928
00:45:17,960 --> 00:45:19,040
 when you asked that question.

929
00:45:19,040 --> 00:45:20,960
 Mr. Rybak, could you please repeat?

930
00:45:20,960 --> 00:45:23,360
 (phone ringing)

931
00:45:23,360 --> 00:45:26,320
 - It's still ringing and I can't do much about it.

932
00:45:26,320 --> 00:45:28,520
 - Hello, you've reached line four zero.

933
00:45:28,520 --> 00:45:31,320
 - I was hoping that you might be able to give us

934
00:45:31,320 --> 00:45:34,400
 a little sense of your operation of the agreement,

935
00:45:34,400 --> 00:45:38,480
 since you guys are gonna be handling that interconnection.

936
00:45:38,480 --> 00:45:40,400
 Since you're here, I thought we should take advantage

937
00:45:40,400 --> 00:45:41,800
 of your presence.

938
00:45:41,800 --> 00:45:47,920
 - Okay, I'm gonna repeat what I think is the question.

939
00:45:47,920 --> 00:45:50,600
 So I think you're interested to hear about

940
00:45:50,600 --> 00:45:52,000
 how we're going to handle the construction

941
00:45:52,000 --> 00:45:54,880
 of the interconnection and work with Denton

942
00:45:54,880 --> 00:45:56,440
 to build up the interconnection

943
00:45:56,440 --> 00:45:59,920
 and then a smaller substation for each of the phases

944
00:45:59,920 --> 00:46:01,040
 that were discussed.

945
00:46:01,040 --> 00:46:05,040
 So the three phases, as Terry mentioned,

946
00:46:05,040 --> 00:46:08,640
 the first phase is only 22 megawatts,

947
00:46:08,640 --> 00:46:11,600
 that will be at distribution, so that will be all,

948
00:46:11,600 --> 00:46:14,640
 any of the construction there will be handled by DMA.

949
00:46:14,640 --> 00:46:19,080
 Moving into phase two, which will be hopefully starting up

950
00:46:19,080 --> 00:46:22,600
 quickly assuming approval of council,

951
00:46:22,600 --> 00:46:27,600
 that we will then be putting in a 158 megawatt transformer

952
00:46:27,600 --> 00:46:32,800
 from 138 out of 34.5, and that will be on the south edge,

953
00:46:32,800 --> 00:46:34,800
 the south track of the property.

954
00:46:34,800 --> 00:46:37,720
 We have an EPC agreement with the SHIELD,

955
00:46:37,720 --> 00:46:40,080
 who has done quite a bit of our construction

956
00:46:40,080 --> 00:46:41,520
 for us in the past.

957
00:46:41,520 --> 00:46:44,800
 They've worked on other substations for us

958
00:46:44,800 --> 00:46:46,600
 and some of our other power plants.

959
00:46:46,600 --> 00:46:49,880
 So they've been working on the site and been in contact,

960
00:46:49,880 --> 00:46:53,040
 and we've had several meetings with Denton

961
00:46:53,040 --> 00:46:54,960
 and the electrical engineers to coordinate

962
00:46:54,960 --> 00:46:58,200
 and make sure that that is all coordinated well.

963
00:46:58,200 --> 00:47:00,840
 We haven't started, we haven't finished,

964
00:47:00,840 --> 00:47:04,400
 I would say the planning for phase three yet,

965
00:47:04,400 --> 00:47:06,280
 but that will be quickly followed

966
00:47:06,280 --> 00:47:07,960
 after we get started on phase two.

967
00:47:10,400 --> 00:47:11,680
 - All right, thank you.

968
00:47:11,680 --> 00:47:12,520
 I just thought we should take advantage

969
00:47:12,520 --> 00:47:14,960
 of your presence today, so I appreciate that.

970
00:47:14,960 --> 00:47:17,160
 - Absolutely, any other questions, please let me know.

971
00:47:17,160 --> 00:47:19,280
 - The questions?

972
00:47:19,280 --> 00:47:22,560
 All right, do we have a motion to approve

973
00:47:22,560 --> 00:47:25,680
 the power purchase agreement between the city of Denton

974
00:47:25,680 --> 00:47:27,880
 and Core Scientific Inc?

975
00:47:27,880 --> 00:47:28,720
 - So moved.

976
00:47:28,720 --> 00:47:32,080
 - I'll second.

977
00:47:32,080 --> 00:47:37,600
 - All in favor say aye.

978
00:47:37,600 --> 00:47:38,720
 - Aye. - Aye.

979
00:47:38,720 --> 00:47:39,560
 - Opposed?

980
00:47:40,640 --> 00:47:41,480
 - Opposed?

981
00:47:41,480 --> 00:47:43,920
 Okay, parries.

982
00:47:43,920 --> 00:47:48,840
 Management reports, am I frozen again?

983
00:47:48,840 --> 00:47:50,240
 - No, Susan, you're fine.

984
00:47:50,240 --> 00:47:51,440
 - All right.

985
00:47:51,440 --> 00:47:53,960
 - So Madam Chair, members of the Board,

986
00:47:53,960 --> 00:47:55,920
 Tony Puente, the DMV General Manager.

987
00:47:55,920 --> 00:47:59,680
 In your management reports, we provided to you

988
00:47:59,680 --> 00:48:03,600
 the DECK dashboards for the month of May and June.

989
00:48:03,600 --> 00:48:07,080
 Certainly our folks from finance are here and available

990
00:48:07,080 --> 00:48:10,320
 if you have any questions on either one of those reports.

991
00:48:11,240 --> 00:48:13,240
 - Question, all right.

992
00:48:13,240 --> 00:48:17,200
 - Okay, going to the future agenda items.

993
00:48:17,200 --> 00:48:20,440
 Obviously today you've already approved the rates

994
00:48:20,440 --> 00:48:24,080
 for wastewater and solid waste, I think Nick was clear

995
00:48:24,080 --> 00:48:26,760
 that we've not brought to you the electric rate ordinance,

996
00:48:26,760 --> 00:48:29,160
 the rate ordinance that was approved last year

997
00:48:29,160 --> 00:48:31,120
 will continue to remain in effect.

998
00:48:31,120 --> 00:48:34,040
 We'll certainly have a discussion with you later on

999
00:48:34,040 --> 00:48:36,480
 this calendar year, but by the end of the calendar year,

1000
00:48:36,480 --> 00:48:38,800
 if there's any changes at the end of the year,

1001
00:48:38,800 --> 00:48:41,040
 if there's any changes at that point,

1002
00:48:41,040 --> 00:48:43,960
 then we'll bring that ordinance to you.

1003
00:48:43,960 --> 00:48:47,880
 But coming up on September 13th, we do have a draft

1004
00:48:47,880 --> 00:48:50,480
 of the comprehensive solid waste management strategy

1005
00:48:50,480 --> 00:48:53,360
 discussion that'll be brought to you by Brian Borner

1006
00:48:53,360 --> 00:48:56,080
 and the consultants that he's been working with.

1007
00:48:56,080 --> 00:48:58,240
 I know many of you have a lot of interest in that

1008
00:48:58,240 --> 00:49:01,000
 and we look forward to discussing that with you.

1009
00:49:01,000 --> 00:49:04,560
 And then going on to the new business action items,

1010
00:49:04,560 --> 00:49:08,680
 obviously, we've talked about the comprehensive

1011
00:49:09,800 --> 00:49:12,840
 solid waste report that'll include any discussions

1012
00:49:12,840 --> 00:49:17,840
 on recycling for, or composting for residential use.

1013
00:49:17,840 --> 00:49:23,480
 We're also still working on a recap of legislative items

1014
00:49:23,480 --> 00:49:27,400
 associated with the electric industry.

1015
00:49:27,400 --> 00:49:31,920
 And we're also working on an ISR for this issue

1016
00:49:31,920 --> 00:49:35,560
 of the solar installations and this 4CP issue

1017
00:49:35,560 --> 00:49:38,000
 that I think Terry already talked to you a little bit about.

1018
00:49:38,000 --> 00:49:39,680
 We are working on that for the council as well.

1019
00:49:39,680 --> 00:49:41,560
 We'll be providing that to you.

1020
00:49:41,560 --> 00:49:44,480
 As you know, the legislative, the governor,

1021
00:49:44,480 --> 00:49:47,560
 they call a second special session.

1022
00:49:47,560 --> 00:49:51,120
 I think they now have a quorum and they've started to meet.

1023
00:49:51,120 --> 00:49:52,680
 And so we'll see what comes out.

1024
00:49:52,680 --> 00:49:55,840
 If any of that, that may impact not just the DME,

1025
00:49:55,840 --> 00:49:57,440
 but any of our other utilities.

1026
00:49:57,440 --> 00:50:00,680
 We'll certainly keep you abreast of that information.

1027
00:50:00,680 --> 00:50:03,040
 So with that, happy answering questions

1028
00:50:03,040 --> 00:50:05,040
 on any of these items.

1029
00:50:05,040 --> 00:50:08,560
 I did mention, I did want to mention that we did send to you

1030
00:50:08,560 --> 00:50:12,880
 the latest bond rating for the utility system on Friday.

1031
00:50:12,880 --> 00:50:15,920
 Hopefully you received that in your email.

1032
00:50:15,920 --> 00:50:17,920
 If you didn't, please let me know.

1033
00:50:17,920 --> 00:50:21,360
 But again, happy to answer any questions on that as well.

1034
00:50:21,360 --> 00:50:25,320
 - Questions.

1035
00:50:25,320 --> 00:50:28,680
 All right.

1036
00:50:28,680 --> 00:50:31,640
 - Yes Madam Chair, I have a question.

1037
00:50:31,640 --> 00:50:33,800
 - It's just delayed, I'm so sorry.

1038
00:50:33,800 --> 00:50:35,360
 I'll be back next time.

1039
00:50:35,360 --> 00:50:36,280
 (laughing)

1040
00:50:36,280 --> 00:50:39,840
 - Well, we love technology when it works

1041
00:50:39,840 --> 00:50:42,880
 and we dislike it so much when it does.

1042
00:50:42,880 --> 00:50:45,440
 Anyway, my questions, Terry or Tony,

1043
00:50:45,440 --> 00:50:48,320
 my comment would be that on the bond ratings,

1044
00:50:48,320 --> 00:50:51,640
 I've noticed that both standard and poor and fixed

1045
00:50:51,640 --> 00:50:54,000
 seem to have come to the same conclusions

1046
00:50:54,000 --> 00:50:55,880
 and had almost identical comments.

1047
00:50:55,880 --> 00:50:57,400
 I just found that kind of interesting.

1048
00:50:57,400 --> 00:50:58,480
 Is that the norm?

1049
00:50:58,480 --> 00:51:02,600
 - Yeah, I think they both sometimes look at

1050
00:51:02,600 --> 00:51:06,120
 different metrics and different financial issues

1051
00:51:06,120 --> 00:51:07,320
 going on that may be impacting,

1052
00:51:07,320 --> 00:51:09,080
 but yes, you're exactly right.

1053
00:51:09,080 --> 00:51:12,160
 Previous to this time, we actually had different ratings

1054
00:51:12,160 --> 00:51:14,280
 from each one of the rating agencies.

1055
00:51:14,280 --> 00:51:16,680
 But yeah, so it's not uncommon,

1056
00:51:16,680 --> 00:51:19,160
 but I will tell you that they don't always look

1057
00:51:19,160 --> 00:51:24,160
 at the same things, but again, not uncommon.

1058
00:51:24,160 --> 00:51:27,760
 - Okay, and my follow-up would be the ratings to me

1059
00:51:27,760 --> 00:51:31,800
 based on all of our interesting problems in the past year

1060
00:51:31,800 --> 00:51:34,520
 didn't look that bad, so what was your take on them?

1061
00:51:34,520 --> 00:51:37,080
 Or what is our official take on them?

1062
00:51:37,080 --> 00:51:39,160
 Are they good, bad, and different?

1063
00:51:39,160 --> 00:51:41,880
 - Well, and I don't see David Gaines on here,

1064
00:51:41,880 --> 00:51:43,680
 so I'll have to speak on his behalf,

1065
00:51:43,680 --> 00:51:48,680
 but I think overall we still have a very good rating.

1066
00:51:48,680 --> 00:51:54,520
 It's still certainly above some of the B-rated entities

1067
00:51:54,520 --> 00:51:57,000
 that may be out there.

1068
00:51:57,000 --> 00:51:59,960
 Obviously, it's always a little bit disappointing

1069
00:51:59,960 --> 00:52:02,480
 when you get a downgrade, but again, we understand

1070
00:52:02,480 --> 00:52:05,760
 that that's happening across the Texas market,

1071
00:52:05,760 --> 00:52:09,160
 and so it wasn't necessarily a surprise,

1072
00:52:09,160 --> 00:52:12,320
 but certainly I think deals like the one

1073
00:52:12,320 --> 00:52:16,360
 that you approved today and certainly some of the

1074
00:52:16,360 --> 00:52:20,840
 conservative budgeting that we do at DME,

1075
00:52:20,840 --> 00:52:25,040
 we hope that going forward that will be well received.

1076
00:52:25,040 --> 00:52:26,560
 Hopefully, we'll also, by the end of the year,

1077
00:52:26,560 --> 00:52:29,480
 have the transmission cost of service study

1078
00:52:29,480 --> 00:52:32,600
 and filing behind us, so we'll have a better feel

1079
00:52:32,600 --> 00:52:34,360
 of what the impact's gonna be.

1080
00:52:34,360 --> 00:52:37,760
 So I think overall it wasn't unexpected.

1081
00:52:37,760 --> 00:52:40,440
 I think, from my perspective, the utility's

1082
00:52:40,440 --> 00:52:43,160
 in a very good financial position,

1083
00:52:43,160 --> 00:52:46,520
 and we hope that going forward things will continue

1084
00:52:46,520 --> 00:52:50,760
 to improve and maybe kind of get back to a rating

1085
00:52:50,760 --> 00:52:53,560
 that we think is more commensurate of kind of

1086
00:52:53,560 --> 00:52:55,720
 where we believe our utility system is.

1087
00:53:00,280 --> 00:53:01,120
 - Okay, sir.

1088
00:53:01,120 --> 00:53:01,960
 Well, thank you for that.

1089
00:53:01,960 --> 00:53:03,680
 Again, I thought under the circumstances

1090
00:53:03,680 --> 00:53:08,440
 it wasn't that bad, so thanks for the additional background.

1091
00:53:08,440 --> 00:53:09,280
 - Yes, sir.

1092
00:53:09,280 --> 00:53:12,840
 - All right, any other questions?

1093
00:53:12,840 --> 00:53:16,360
 All right, on to concluding items.

1094
00:53:16,360 --> 00:53:19,280
 Does any board member have anything they wish to have

1095
00:53:19,280 --> 00:53:23,480
 add to a future agenda or any comments to make at this time?

1096
00:53:23,480 --> 00:53:26,160
 - Just want to thank Karen for her service very much.

1097
00:53:26,160 --> 00:53:28,640
 It's been such a pleasure getting to know you.

1098
00:53:28,640 --> 00:53:29,960
 I think you're another one of those people

1099
00:53:29,960 --> 00:53:32,440
 that proved to me, no matter how big our town gets,

1100
00:53:32,440 --> 00:53:34,800
 it's still kind of a small town.

1101
00:53:34,800 --> 00:53:35,880
 - Absolutely, Pam.

1102
00:53:35,880 --> 00:53:37,560
 - Thanks, Billy.

1103
00:53:37,560 --> 00:53:39,840
 - I hope Billy's saying too.

1104
00:53:39,840 --> 00:53:40,680
 I'll miss you.

1105
00:53:40,680 --> 00:53:43,240
 - Oh, I'll be around.

1106
00:53:43,240 --> 00:53:44,080
 - I know.

1107
00:53:44,080 --> 00:53:48,380
 - Yeah, I just wanted to say thank you for,

1108
00:53:48,380 --> 00:53:52,600
 well, thank you to the staff for teaching me

1109
00:53:52,600 --> 00:53:57,240
 how the city government works.

1110
00:53:57,240 --> 00:54:01,280
 Utilities are a huge part of what City of Denton does,

1111
00:54:01,280 --> 00:54:03,800
 and I feel like I've got a better grasp

1112
00:54:03,800 --> 00:54:07,520
 of a very complicated animal now.

1113
00:54:07,520 --> 00:54:09,880
 So thanks to the staff, and I also appreciate

1114
00:54:09,880 --> 00:54:12,960
 all the creative thinking that goes on with the staff.

1115
00:54:12,960 --> 00:54:15,720
 Kudos to them.

1116
00:54:15,720 --> 00:54:19,040
 If Terry at all can pass that along

1117
00:54:19,040 --> 00:54:20,660
 to people who've presented to us.

1118
00:54:20,660 --> 00:54:24,300
 And thanks to the other board members.

1119
00:54:24,300 --> 00:54:27,360
 I think that this board has a real,

1120
00:54:27,360 --> 00:54:32,080
 very productive variety of points of view.

1121
00:54:32,080 --> 00:54:33,520
 We all bring something different,

1122
00:54:33,520 --> 00:54:38,240
 and I am very appreciative of how well we work together.

1123
00:54:38,240 --> 00:54:40,380
 Thank you, Susan, for keeping us in line.

1124
00:54:40,380 --> 00:54:45,640
 I'll be around.

1125
00:54:45,640 --> 00:54:46,640
 - I know you will.

1126
00:54:46,640 --> 00:54:49,640
 Anything else?

1127
00:54:49,640 --> 00:54:53,880
 All right, do we have a motion to adjourn?

1128
00:54:55,280 --> 00:54:56,320
 - Thank you.

1129
00:54:56,320 --> 00:54:57,720
 - So adjourned. - Billy?

1130
00:54:57,720 --> 00:55:02,320
 - Second. - All right.

1131
00:55:02,320 --> 00:55:03,160
 And you're second?

1132
00:55:03,160 --> 00:55:04,800
 Okay, we are adjourned.

1133
00:55:04,800 --> 00:55:05,640
 Thanks.