May 09, 2018 Economic Development Partnership Board on 2018-05-09 11:00 AM

All right good morning I'm Marty Rivers chairman of the Economic Development Partnership Board. We do have a quorum and I will now call the work session to order at 1102 a.m. our first order of business we're going to go a little bit out of order. We have George Morrow here from the who's a general manager of DME and we're gonna go ahead and skip to item EDP 18-032 to have a report and discussion regarding the Denton renewable resource plan and the Denton Energy Center so welcome George. Thank you Mr. Chairman and thank you for letting us move up in the agenda today so I'm gonna get Chris back to work. Chris Lutrix here he's our Denton Energy Center project manager and he provided a few slides for my presentation so I thought why don't we just get Chris to come by and and say a few words to you. Why do I have this up here? Let's take this off. Technical difficulties guys you ever had those before? Never. Councilmember? Yeah last night the projector was not working so we're already ahead of the game today. We have the projector working. I'm gonna go to your your desk. You have my presentation on here right? I do. And it will be down here. You have a lot of presentations here. That saves me from having to go into this thing down here. So two big initiatives we have going on in the city Denton Energy Center I mentioned that and I mentioned Chris also our renewable energy plan so I wanted to touch base on those two topics knowing you're interested in what's going on in the community. Okay everybody know about DME? Probably more than I do. Thank you. So I've been general manager here since late November. It's been quite an interesting process learning about the community. I grew up in West Texas. I spent about 25 years in El Paso, picked up a couple of degrees and then moved around a little bit. I grew up as a military brat so I kind of got used to packing and moving and cleaning and unpacking and all that type of stuff so I've been in the electric utility business as of next week will be exactly 40 years. I've been running municipal electric utilities for 24 years and it's been a great time and a great career for me and started coming out to this area to visit my mom. My mom was and sister moved out from Southern California to McKinney and I came out to visit help her with her medical things. I'd come out take her to some appointments and visit and I said you know what this is a beautiful beautiful area out here in North Texas. So I ended up wanting to ended up buying a house. I said I'm gonna come here someday and live and lo and behold Denton was looking for a general manager. I saw the advertisement in our industry publication and threw my hat in the ring and voila here I am and again I'm tickled to death to be here. There's lots of good things going on so there hasn't been a too much of a sleepy period for me so far. So we started service at DME in 1905. We've got 53,000 electric customers , pretty large service area about a hundred square miles, lots of transmission lines and sub stations to serve our customers as efficiently as possible including new economic development. I think that's one of one of DME strengths. So the big project before us, largest capital project I think in Denton's history is the Denton Energy Center. Here's a little overhead view of the project and Chris I want to take your excitement. Yeah so we'll start off here with a picture. This facility is located west of the Dent Regional Airport just south of Jim Crystal Road. It sits about a half a mile off the road and here's a drone footage from the City of Denton's IT department. So we took it out to try to see what this thing looks like from from an aerial view. So to kind of see my mouse here so as you see back here is the the new Jim Crystal substation. That's a very modern substation and that's the the power plant's connection to the Ercock grid. So pretty hard to see but in the background you'll see some some high voltage power lines running out here. That's the connection point to the Ercock grid and as far as the layout of the plant goes it's symmetrical. The center of the plan is called the core. That's where the control room is, some maintenance rooms, some the electrical components of the plant are or in the center and then there's two engine halls, a south hall and a north hall. Each has six engines in it and then towards the the back of the plant the emissions control systems come first, the stacks. These things are basically a very large engine, gas engine so they have radiators and they also have mufflers so inside of this white shrouded area are actually the mufflers. At this scope they 're called silencers and then the plant on the backside here is a radiator. So he uses a closed loop cooling system which means that much similar to your automobile you put water in it it's circulated through to cold the engines out through the radiator and the benefit of this is this plant uses very little water so once you get the system filled up its makeup water is about 10 to 20 gallons a week so it's very water conscious. So just some some facts about the Denton Energy Center as George stated it's the city's largest capital improvement project. Construction commenced in October 2016 and it took us about 18 months to get to get everything done. Yes sir. Your name again is? Chris Lutrik. How do you spell that? L-U-T-R-I-C-K. Okay Chris so when you say it's the city's largest capital improvement how much are we talking about? 225 million dollars. Thank you. Yes sir and just feel free to stop me if you have any questions. So construction so we broke ground on October of 2016 as I said it took about 18 months to where we are now the plan is is operational we 're in the testing phase we have some site cleanup to totally make the project finished and we expect to have that done by the by the end of June. The plan is powered by 12 Wardzilla natural gas engines and the plant can deliver up to 220 megawatts of power so that's ERCOT's rating the actual theoretical output of the plan is 225 megawatts but the plants load is about 5 megawatts so therefore ERCOT deducts that off. What's the city's total load? Our peak load max I believe is 355 megawatts so for instance I looked yesterday yesterday was a pretty warm day in the afternoon the city's load was about 240 megawatts so and that'll grow over the summer with the peak coming in August early August is when the city of Dayton generally sees its peak load but but a key thing about the plan and this type of plant is you'll notice that in five minutes the plant can deliver its full output so that is that is not something that that every power plant has coal may take days to ramp up so they're not using this kind of thing and your combined cycle plants which use the heat they generate in making electricity they take some time to get up to speed as well so this plants ability to say ERCOT calls and says hey we need some power need a hundred megawatts we need it in five minutes this this plant can do that so it has those capabilities so that fact coupled or that fact that quick start fact and the ability that it's very low emissions make the plant suitable to be a financial backup to Denton's desire or Denton's goal to become a hundred percent renewable so I don't want to steal any George's thunder but that's that's what he's going to talk about but that's the physical capabilities of the plant to help support that and and finally should say that the plant will enter commercial operation it shouldn't say on July 1st it should say by July 1st so we're kind of in our middle stages of commissioning we'll get that done we'll get all of our documentation filed and at that point we'll submit that and then commercially be online so a couple more pictures for you hopefully you know we'll have tours tours will come along and everybody can see these here's an actual picture of the engine hall so what you're seeing here is the world's largest gas engine so there are 18 cylinders they're set up in a V configuration the pist ons are about 20 inches in diameter but basically it's just it's just a big a big cruise ship engine is one way to look at it and finally I threw this picture in there just because it has some artistic qualities that I think it looks pretty good so this is this is what it looks like from the ground so any questions so upon my arrival in Denton I feel like my role was to see this through construction we were you know well through the project at the time I showed up and my role and DME's role going forward is to get the most value out of this investment so I I'm looking at it from that standpoint and that's what our intention is we believe that's important now we have a number of other resources that we provide the load here we have a 30 megawatt around- the-clock power supply from next era energy resources that has a nexus to the wolf ridge wind farm though you know we it's not as the wind comes out of the plant you know next era sort of manages the variability of the wind and they give us a flat around-the-clock project we paid extra for that back when this was contracted for in 2009 but the nexus is we received the power at the substation right there next to the wood next to the farm and the farm came in service just when our contract started so there's a relationship but it's not a pure not a pure wind product shows you a couple of photos I snapped off of our wall to give some graphics something interesting to look at we also have a landfill project here in Denton out at the landfill site it's about a megaw att so pretty significant size project that takes no gases from the landfill and gathers those and puts them through to generate electricity so instead of like flaring gases or just letting go up in the atmosphere we're capturing that that gas cleaning it up and putting it through this plant it's actually owned by a private company a subsidiary I believe of Detroit Edison and we contract for the energy to make that project happen here locally and it has some good environmental benefits as I mentioned I'm excited about this project came in service last month called the Santa Rita wind farm out there in West Texas I was looking for a graphic there I didn't really have much except this is the layout of all these wind turbines there's there's a bunch of turbines out there adding up to there a megawatt and a half so it's about a hundred wind turbines equaling this hundred and fifty megawatts so it's a large power supply to us it will be the lowest cost energy product that we have in our portfolio and it will generate a lot of electricity going forward and it's going to be good for George we have a question absolutely yes I know that in our in our conversations on committee on the environment and also on council we are actually producing a lot more gas than we're able to convert and we had talked about maybe adding more of these generators is that still a conversation that that we're having or it's not been one that I've been involved in I'll keep my ears open and see if there's an opportunity to do that the energy is relatively expensive here this would be our most expensive energy product and and that was you know probably fair price back when this came online but maybe the next generation of landfill gas conversion projects could be a little bit cheaper and I think we'll look at that if that's the case so thank you so that's the wind farm and as Chris mentioned I'm really pleased to be part of the implementation of the Denton renewable resource plan which was adopted by City Council in February and provides that we'll be a hundred percent renewable by 2020 and what that means is if we look at the total electric requirements of our customer base for a given year that we'll have at least that much renewable energy in our portfolio that's about 1.5 million megawatt hours and that's what we 're looking to bring online right now we're in the 60 to 65 percent range and we 're we have plans to get that to the hundred percent by by 2020 or as close thereafter as possible and the other things we have ongoing and one of them I mentioned here is the acquired additional hundred megawatts of West Texas solar and we got that approved last night at the City Council so that project called Blue Bail solar 2 scheduled to be online sometime in 2020 and that is a very attractively priced fixed price product for 15 years we're involved with five other municipalities at the moment in a second solar RFP and looking to pick up as much as another hundred and the numbers I've seen so far also look very very attractive for us and lastly we'll let that kind of fit into our portfolio we'll be looking to go back out to add some additional renewables and that will get us basically to the hundred percent want to get those under contract right now there's some you know incentives to do that you know production tax credits and investment tax credits at the federal level and the market has just ripened the market is very very good for this this technology right now Gibbons Creek Chris mentioned our coal plant it's going to run this summer we've got a mini I call it a mini energy crisis might actually be bigger than a mini energy crisis this summer a lot of big power plants in Texas have retired in the past year have a hard time competing with lesser priced natural gas typically and even some renewables and that's reduced the reserve margin out there in aircott to around 10% so prices are starting to rise up on the forward market kind of like the stock market going forward and we 're going to see if there's going to be any shortages or any issues there they 're saying be prepared and and we're prepared hopefully the Denton Energy Center will provide a role in providing some extra reliability to the grid this summer and and we also have our Gibbons Creek project which likely this will be the last hurrah for that project it's in operation since the early 80s and we 're looking to divest ourselves of that project and retire it and that kind of thing so but it is running this year could possibly run next year depending on the transaction that we have involved in what the City Council wants to do but right now it looks like that we're only committed through September we 're gonna pay off the last tranche of generation debt a little bit later this year of 25 million dollars so so we'll we'll be able to walk away with at least that debt gone we have a little bit of internal debt that we did for some environmental controls and so forth and we'll be looking to try to get that paid off as soon as possible as soon as the as we're able to handle that from a financial and a callable standpoint does the city own that plant no it's a it's a joint venture of us and three other cities we formed a joint action agency called Texas municipal power agency about the same time as this plant was conceived and so they they actually manage it and operate it for us but we're responsible for all our proportional share of the project it's a little over 400 megawatts our piece right now is 21% and yeah so as of September 1st Greenville will walk away from the project we'll run it for one more month and we've the other three of us are sharing their piece which ought to be pretty attractive we think this summer based on our forward assessment of the power market that could be worth quite a bit to us the variable cost of the plan you mentioned the debt piece but the variable cost is extremely low it's a and so that will make it you know generate some good revenues for this summer which I'm looking forward to questions on any of this George I do have a question please sir John Baines with the black chamber hey John the with the renewable plan how how well how well has the public understood the magnitude of this plan is it well understood within this community very well I've heard be honest I've heard nothing negative it seems like folks believe this is a very positive direction for the utility I came in with my I call it eyes wide open ready to give my input and good or bad if it didn't make sense I was gonna say that or if it did make sense I was gonna get on board the the train and everything to me it makes total sense the reason I ask is because most of us don't really think about energy until we don't have it until it's you have a brown out or a black out of some sort so I just didn't know if the community at large was appreciating the magnitude of this project it's a good point in our end that we will be fine this some do and some don't some some all they care about is they care about that elect that electric bill and now it's coming electronically so you may not actually not even look at the bill anymore so yeah whether the lights are on or off is like the big deal right and we had a nice presentation yesterday I was gratified by the response of the council for presentation we made our reliability we also did it for the public utility board the day before talking about all the things you know we we dive in deeply to looking at reliability by substation and by circuit and by cause you know and we've identified squirrels the critters is the number one cause believe it or not for outages and I had all sorts of great squirrel pictures that I ended up having to take out I think we had a squirrel behind bars or something even you know so so we have a lot of work we're doing to improve reliability because we know how bad it is when you when my power is out man alive there's so many things that aren't happening that need to be happening and we're waiting and we're watching and and you know the temperatures rising in our place if it's summertime or getting colder it and the night we can't charge this and our refrigerator and our television on our internet so our folks do recognize that and we have ninety nine point nine nine eight percent reliability that's when you evaluate the customers by time but even so it's still a problem when we have an outage and I 've been gratified if I could just speak one more comment I've been gratified by one how few an outages that we have here in Denton in my time I'm not getting woke up and out of bed middle of the night many places I've been I do get woke up quite frequently at night and also how quick and responsive our crews are they know their job I don't have to you know trounce around yelling and screaming or doing anything like that they they're on it they're hopping to it and almost by the time they get the message out that there's an issue they figured it out and they're resolving it so very good about responding in fact if we have an issue we generally get a phone call within a couple of minutes with an explanation of what 's going on how long it's gonna be Jim who you with just okay yep one of our best customers I learned that really quickly are they our best Keely has a question usually because you mentioned the plan and people don't really care till their powers out but to that point the generation aspect of it isn't when someone loses power because we have air caught to back that energy up it's on the distribution side it's because of the the squirrels and the lines and the poles that that is when you're gonna experience an outage in your house it's not gonna be because we don't have enough megawatts of energy coming into our city very good point extremely rare in the history of the art business that we don't have enough electrons from a power supply standpoint however this summer that you know if there is an issue that actually could be the issue if I want two units drop off line we lose that reserve margin then we may not have enough electrons so it's like I say a very very rare case and we'll have to go into some kind of a load shedding mode where we you know we drop a circuit for 15 or 20 or 30 minutes and put it back on before that gets too hot and then get it and drop another circuit we don't want to have to do that we're hoping we don't George I was on PUB for about eight years okay and I remember some of our spirited discussions about as the city grows and the demand for electricity grows I believe that was one of the things that caused this particular project to be put on the map is that as we're getting more houses more plants etc etc the demand for energy was increasing and so without this I think we'd really be in trouble yeah good point or or alternative ly for relying on other people to build power plants for us then one we haven 't done our part to preserve the environment potentially and two we're subject to quite a bit higher prices so you know just the ballpark maybe the market prices are twice what it costs us for these renewable projects we would pay that much instead of this so we're we're controlling our own destiny price wise also that's very good point and as a kind of a bowl on this I think we've got to do maybe a better job of letting people know how good we have it here you know and they could be worse you know if we didn't have this kind of operation in place and that if we were subject to the volatility of the market you know pricing could be quite a bit different every month if you looked at you feel well I love those thoughts I'm a true believer of local control of public power you know this utilities technically owned by the city and by the citizens and it's controlled and managed locally you know you can pick up the phone and talk to the big boss at the electric company you can't do that with a private company if you were to have a private supplier for instance or possibly even one of these competitive suppliers that are out there if you live outside of Denton you know good luck trying to get a hold of a of somebody that knows something at those agencies so I worked ten years in the private sector 30 years now in the public the public is the place to be and where you can make a difference you can say hey I want these kind of streetlights I want underground overhead I'm willing to pay for it and all those kinds of things but I can make those decisions I don't have that let a commission hundreds of miles away making those for us and or or some folks in an executive suite high up in some tall buildings so so I it's it's great to be part of that 2,000 member public power community in the United States and about 78 I think in Texas we're one of those one of the larger ones in the country and in the state so George on the we retire the Gibbons Creek plant that didn't energy center will pick up the slack in the short run we'll have a little more open position we 've had a lot of open position in the past and we're which means we did a lot of market purchases and which was fine because the market prices were declining but they're moving back up dramatically the new renewables will fill that gap and we'll go back and buy some from the market in the short run before the renewables all come into play and the Denton Energy Center will be a revenue source in and of itself so it kind of offsets our costs the way the market works today you buy all your load so everything people use in Denton we go and purchase from this so-called market out there and then we sell everything that we own into that and it results in a credit basically against what we pay for our load that's the competitive market in Texas and so yes this will be a hedge toward that and the renewables plug a hole that we've had for a long time one of the reasons renewables are not adopted as quickly and as much as possible in other jurisdictions is because they are stranding assets they have power plants they've already built some of them not as old as the Gib bons Creek maybe a little bit newer that they don't want to retire and say hey I got all this cost still on my books so they continue to operate those and operate those that's it's an economic dislocation to do renewables fortunately we were in a position where we had a hole and we were filling it with short-term market purchases now we can make its time is right to make investments going forward so it's really a as I mentioned yesterday kind of a sweet spot for for Denton to be able to fill its open position it's vacant you know it's shortage and power supply with something that's very environmentally and economically attractive so one other question how do we compete I know that our kilow att price per kilowatt hours from as a Californian who moved here incredibly inexpensive how do we compete against our other local markets and do we put that as in our economic development packet when we give we talk for bringing companies because seven cents a kilowatt hours ridiculously inexpensive I mean it's just it's a wonderful thing yeah so when you're when we're at the table and even the cities at the table we do tout the value of having a locally controlled and operated utility we're able to manage those costs and and and provide the level of service that some of the companies want so we do tout that today we 're about in the middle of the pack when we look at the competitive suppliers that are out there and one of the reasons we're not better than that is because they have lived what's called short-term energy and energy gas prices have been dropping for a long time so they've taken advantage of that drop in the spot market and to me the price they're going to start paying will be this summer they've stayed short they've stayed open kind of like we were and they and they're going to have to go pay these really really high prices that we 're going to start seeing this summer and already in just one month I saw we moved seven places in a list of about 50 utilities they went up higher than us just in the last month and I think over the next couple of months we're gonna be moving even closer so we're in about the middle of the pack today and and for that you're getting a grid that is being managed and built to serve Denton 20 and 30 years out there it's a I was amazed at how ambitious and a program that we did have and as I studied it Carolyn oh well before you talk a little bit more about the grid I just want to point out to you that you know the middle of the pack is you know that's about where DME's pricing has been over the four years that I've been here but two really important things that we bring to the attention of prospects is that reliability issue that George discussed which is incredibly important especially for certain industries like manufacturing but then the consistency of the pricing which he also spoke to you know why DME can 't maintains relatively level and steady pricing versus some of these other providers that have that volatility because of the way that they do their energy pricing so we just make sure that we are are talking about you know maybe we're not at the very bottom end of the the price range but there are these other things that will provide stability and take away some of that uncertainty which is what everybody's trying to minimize yeah yeah and and I think what I've already heard is if you need something at your business if you need to be let's say you have a new business and you need to be hooked up or you need to have the utility out there to do something because you only have this short period of time in a window to get in there we make it happen you know and we're very responsive to that that is not how typically these other distribution companies work you get in a queue you get on a list and there you work with their schedule and they don't necessarily work with yours every place I've been so Jim you can probably testify to that it been pretty responsive when you have an issue I think that's gonna be the wonderful that level of service so we are in the middle of this major expansion and upgrade the system locally that the subst ations and the transmission lines that move power between the substations had gotten outdated and old and what has happened is a lot of power is moving from the western part of the state as a result of renewables and places where people can build cheaper power plants it's going through Denton because that's how the grid operates it's an electrical connections to places east of us and it was causing a lot of issues and impacts on our system so we sort of got we were able to upgrade locally and able to share a lot of that most if not all that cost with others in the state under the state's social ization of transmission costs and get ourselves a brand new nice high functioning network and and just the last piece of it so the substations now are a little bit like the center we talked about it yesterday of a wheel right deck the hub and then there's spokes going out those spokes actually take power then to the neighborhoods and I think Keely indicated it's those spokes a lot of times that caused the the issues with service locally because you've got overhead lines older lines you've got the critters getting in there they don't usually affect the transmission or substations but they do the local line so that's where we're doing feeder sweeps right now we're going from one end of the these little circuits that come out of the substations we call them feed ers all the way to end users and fixing repairing updating replacing putting this critter protection out there that's we found some that actually seems to work and just in the last couple of months we've been very aggressive that we've seen the results of that so so that's that's my little pitch on that local grid so customers come to Denton we're going to be there we have plenty of capacity plenty of reliability you know be you cold storage or data farm or you know production facility for like a Peterbilt and we'll be there so in conclusion DME prepared for the future was the thing that came to mind when I put this slide together significant expansion and modernization of the grid here locally leadership by the City Council and the utility and using environmentally positive power resources with that hundred percent renewable goal which as I said makes sense today if it didn't make sense I was going to say something that's what I meant to finish my thought a little bit earlier and say oh guys are you sure you want to do this because for the first 35 years of my career didn't really make sense you had to do it for other reasons since from an economic standpoint but it clearly does today both from an environmental and economic standpoint and lastly you know it I know there's different perspectives about the Denton Energy Center you know I think we're working through that but it is a big project for us an important one and one that we know is invested by you and the citizens and the businesses we're going to optimize the value of that plant going forward and I think as Chris mentioned one of the big times when it could have value is when the renew when the winds not there we have prices going to $9,000 a megawatt hour and you pay maybe $100 at your house if I could put it in those terms 9,000 when the wind just disappeared what a cold front wind stopped the front came through and prices went to 9,000 this would be when something like this could be extremely valuable and because otherwise we're going to pay that 9,000 because we have to buy our load as you remember from the market and at the same time we can get credit for it by operating the deck so so that's the value it not necessarily required technically to have renewables but it does provide a little bit of a hedge and a buffer so those are my comments it's nice meeting everybody any further questions so one question just that I'm not directly associated with but your philosophy on substations you have in my understanding there's two there's hey greenery around the substations okay to kind of screen it and then there's hey I don't want trees etc planted around the substations people could climb it get in there animals whatever that is what do you what do you fall on future substations either a screening or kind of keeping everything away from them to keep it safe you know the business has evolved dramatically with respect to that in the old days it was a chain-link fence that's what you got right with a sign saying high voltage stay away there's so many of those around the country probably in the Dallas area some of the older subst ations I think that's not our approach so our approaches we're going to try to make the substation as aesthetically pleasing as possible at the same time you did raise some appropriate concerns we are concerned about safety and and and also concerned about the the critters being able to hop the tree hop the fence and pop on over though those guys can figure out how to do anything anyway so is there some trees is there a substation you're thinking about council man I didn't know was there until I had to get it up on it and look through the trees and so I asked previously before you got here and they that was their explanation hey we don't like to screen them because it provides opportunities for people to climb the trees animals upon the trees and then hop over so that's why ours do not have that screening but we do have we do have nice fences though right we have some is that your preference to have kind of decorative brick or something like that but not to have greenery in front of it to kind of screen it is that am I capturing that right yes you know I've done them in the middle of the woods if I had to to kind of make them as compatible with the community so I think trees per se is not negative we might have to look and I'd be happy to look and talk to our folks a little more about that that hasn't really come on my radar at the moment maybe there's might depend if we've got some underground facilities there also and we're trying to dodge and duck maybe that we don't have enough easement outside the substation because some of these substations are pretty tight particularly if in the inner city area so let me just dig into that a little bit I think I'm okay with providing as much aesthetics as possible that's consistent with the other objectives oh Chris gonna take care of this for me I've been around for a while so it's here before George mr. one one have you are you familiar with our Cooper Creek substation it's of Audre Lane and loop 288 it kind of sets back and it actually bumps up to a neighborhood so it's a it was a greenfield site that we built and so to kind of accommodate that we had some room is we planted a tree buffer between the houses and we left about 50 feet to kind of maintain that clear zone but we were able to plant trees for the houses to kind of to separate them or give them a buffer between the substation so in that situation yeah that works out so so our goals are met and then we could also provide the the neighbors with some some tree buffer where possible yeah we had we had enough room so we actually planted trees we put irrigation in the trees are coming in but that's a situation where every site we go to we still go through the the development process there is a tree requirement even though the substations themselves cannot have trees in them our area that's left around there is still subject to the didn 't development code so we plant trees where we need to or where we have room or where it's not going to become a reliability to try to offset the visual impact of a substation okay so I guess my ask would be if you can follow up me and it can be an email but I'd be curious to see once we get there what you're getting what's gonna go in on Bonnie right there as you clear that out kind of what you envision that to look like so that's Bonnie break between Hickory Oak right there's one there yeah yeah that'd be our new Hickory substation yes okay thank you anybody else have any questions or comments I would just remind everybody given the word economic development board DME plays a huge part in our negotiations with companies coming in because electricity is a big part of the battle target cold storage or cold distribution center comes in there's an electricity so they're immensely important to the whole process as we're talking to folks so appreciate y'all being here today you can you're welcome to stay all right next we have item EDP 18 - 29 to have a report on the an update on the public improvement district guidelines Caroline will present that good morning everybody I'm going to give you a quick update on our council review of the public improvement district guidelines that you all have discussed a couple times before so I'm gonna go through these really quickly but just wanted to give everyone the quick overview of what the council's direction was from the work session that we had on April 10 th they wanted to re-include residential pids which had previously been excluded they asked for some expansion on what demonstrable public benefit is and how it can be determined also wanted to make sure that residential purch asers within a PID would be clearly informed of the fact that their home is in a PID and there would be additional assessments they also asked for a checklist of development standards for residential developments requesting PIDs and the solution to that because these projects are each going to be unique as they come forward is we are working with outside council to create a development agreement template that is going to be required for all PIDs and this item can be addressed in those templates or in that template and can be customized depending on the particular aspects of the project and then there also would we would retain an assessment cap so that was council feedback and y'all have already seen this so I'm not going to go through it again but there are specific ways to mitigate risk and maximize benefits and ensure performance related to PIDs so you can't see that but it's in your backup not sure why I decided it was necessary to put that in there but basically this is the revision to the PID guidelines that we have developed working with our outside council Julie Fort from Messer Rockefeller in Fort they're an extremely experienced municipal law firm and she has really helped us put some more parameters around demonstrable public benefit so we defined it as clearly apparent positive effect or reduction of negative effects on the population or community so that's what the demonstrable public benefit is but then if you look further you can see that what we've decided to do is kind of give examples of what could constitute demonstrable public benefit for example the development being of higher quality and occurring sooner than it would if it was left to the open market and some further detail about what higher quality could mean another sample would be development in the city's ETJ and the owner is willing to voluntarily annex into the city a developer could voluntarily pay for some over sizing of infrastructure and a couple of other things to make sure that the development would be showing demonstrable public benefit and then we also felt that it was really important to give some more detail or include the detail about how to determine whether the PID would be fiscally feasible and this is a section that incorporates some of those things that y'all have seen me present over and over again is we don't want to have PID bond terms any longer than 30 years the value to lien ratio being three to one debt being used for reimbursement of costs only instead of fronting fronting the money for the work so that's just a restatement of those things that have been under discussion since the beginning of the review by both this board and the council that's really all I wanted to give you as far as the presentation but I'm glad to answer any questions that anybody has and we do have a recommendation on the agenda at during the regular meeting if you should so choose to make a recommendation to council go back to your slide three this one one back I'm sorry yeah so the city is going to give notice to residential purchasers of PID assessments when they buy a house so there's already there are already rules at the state level about disclosure of that and we we discussed that so that will clearly be done the outside council had some good examples of other ways that that can be handled with postings and you know outside the property itself or you know requiring certain things of the developer and we can specify what that looks like and the responsibility would be on the developer to do the notification not the city itself and that's something that we can address in the development agreement that would be project specific I just I think the city's getting ahead of themselves a sales contract will require the seller to just disclose that the title company will have to disclose that the lender will have to disclose that so they're in it that the city is gonna have some kind of requirement and fails to do something I just think that's I think it's overkill they're getting noticed as they're buying property it's I promise you that it's in there and it's a requirement legally so I think this city's stepping outside of their requirement to have to do that don't disagree that we have to notify people it's the same thing if you're in a homeowners association and there's dues or whatever all that has to get done there's laws in place to get done and as a banker we have to make sure that that's a count of that because they're gonna pay that can afford to make those payments so I just think that's not necessary he's speaking from one side speaking from another and I'm sure Bob will appreciate this my other concern would be that if the onus what you're saying it would just be maybe part of a checklist that the city would ask the developer to complete but okay I think the wording would be important so that there would be no liability that would come back on the city so that if all of these neighbors said hey we got this notice it was checked off on the developers checklist and this person said well I talked to some friends of mine they got a notice I didn't so I assumed I didn't I wasn't within there in that the state or whomever else had given me a notice didn't give me or gave me notice but they were incorrect if there was some kind of liability back on the city so as far as due diligence and following up on whether the developer whether or not they checked that box actually completed that notice I'm saying is worth maybe a little more conversation well um thank you so that's one of the reasons why we wanted to bring in an outside council that has significant experience with crafting these types of agreements and has seen it done a lot of different ways in a lot of different places and could advise when we get to that situation so it's it's noted in in the policy that there will be a requirement that you know in addition to the state requirements but that's something that when the situation comes up when we get to that point with the residential PID we're gonna want to rely on our outside council to help us do that the right way and make sure that we're not opening the city up for liability or that we're not overstepping our bounds so I don't that sounds maybe like a little bit of a hedge but we want to continue to move the general policy forward with the acknowledgement that notice is important and we want to make sure that people are getting properly noticed and these specifics can be addressed when we write the development agreement when we get to that point I understand I generally agree with you but I think real-life scenarios have changed my perspective and I'll give you three so there's one where there's a neighborhood that's right on the edge of the city of Denton there's about eight or nine houses that were built and I'm sure they were noticed and I 'm sure they got they were communicated with about their internet provider etc. I like their up fast forward to the end of the story I'm getting emails about hey I have no ability for high-speed internet in my neighborhood and it 'll cost the city if we were to try to help bridge that gap the lowest quote I think is a hundred and fifty thousand dollars and so at that point I don't have access to those documents to say well no no it's here page 38 where you got noticed that's not something that you would notice on a sales contract well I said but I say that to say I would it's a question I would there's questions that I would ask right and there's questions that how does this work who's here you know we're talking about it's no different than a school being what school district command it's completely different because we're talking about tax you're having to pay money on your lot what the taxes are or whatever those are required whether you're in a good school district have access to internet is a good question to know and make sure you get that and somebody needs to know that and check that out but it's not taxing your property you're implying money against your property that you have to pay is all I'm saying well and so maybe I need to zero in on my point my point is this there are questions that you would assume get asked and there are questions that you would assume don't follow in the city but I'll tell you those issues fall on the city and I want access to those documents to then present to the party I'm sitting across from that's upset upset to say here's the page you're on versus not having access because the company could have sold they destroyed the records they didn't keep them they didn't scan them I want something under my control under the city that I can then present to that individual and say hey you were noticed and I'm sorry we're in a situation now let's figure it out but to not have anything under my control that I can defend where we stand is not acceptable and I don't like it and so there's that instance there's an instance in southeast didn't a lot was sold to an individual and they weren't they say they weren't notified I'm assuming it's in the paperwork somewhere they didn't read it they didn't read it or they don't know I don't know I mean you're asking me to I'm taking a position that hey it's coming to us right it's it and so it's it's my job to knock the ball back on the other side of the net and so that I'm happy to do that but I need I need a racket and so this instance someone sold a property and all the fees that came with it now they're blowing back at us and hey we weren't told about these fees and these assessments for us developed a piece of property they thought they bought a heck of a deal you know but oh by the way here's a piece that come with developing that you know and so as much as you say it's in there as much as I'd love to say hey it's your and on a much smaller scale look at the parking I mean Jack Bell parking lot has generated more emails then we're not in charge of it but the emails come our way and so we need to be able to have documentation and we put up the signs and we do stuff that's uncharacteristically above and beyond because we need to because those emails are coming whether you like it or love it it's coming and so you need to be able to address those and so while I agree with your your position I think the reality is I'm gonna get an email about it and I want to have it under our control to respond to that email not be subject to well I think this particular home builder that was sold three times over and conveyed to a different company maintain the records I'll reach out to them see if we can convert the laser fish to PDF I don't want to do that there as far as disclosures and the ability of private citizens to contract with private companies and and not have those unravel at a later date for a law that maybe wasn't in place at that time so I think mr. Hudson I think there's going to be a lot of going through that to try to get to where you want to and feel you need to be as a council person to be able to address these things but I don't know that the city has control over all of those levers Jim yeah turn on this is strictly a request residential this would be strictly a request from a developer not something that the city could go back to a developer and say hey we want you to do a fit that's right sure from this council session generally every council member was in favor of some sort of notification beyond and above and until you sit in the seat that we sit in it's going to be hard to explain why why we feel that way especially because the seat that you sit in and the requirements that you know that you have to do but I just wanted to say that that was generally an overall idea and everybody was pretty much in favor of the notice for the giving a notice to somebody that's buying a lot in a residential neighborhood that's in a pin is a good idea the city taking the responsibility of doing that is a bad idea because logistically doing that at the time somebody's doing that I would like for somebody on council to walk me through how that's going to happen when I'm buying a house that's what I do every day I'm just telling you right there so if the developer is gonna do that that's great not how I read it in when I read there so the city was gonna notify our residential no the can I read you let me read you the way that it's phrased in here it says the the development agreement shall include notice requirements to purchasers of the pit to purchase to purch asers who would be have a pit assessment that exceed the minimum notice required by the Texas property code so the developer will be asked to give additional notice it will be part of the development agreement and this is only in the case of residential pits so I would recommend we change the general language to require the developers to give notice okay I can do that well we're looking I'm just looking at the summary but yeah I don't think we have an issue with the way that it's phrased in the agreement it puts the onus on the developer it says this will be part of the developer agreement anybody else have any other questions we're gonna be asked to make a recommendation when we go into our regular meeting on if we want to recommend this as presented or not so we think about one go into our regular meeting we're in a work session meeting right now we have to go out of the work session and go into a regular meeting anything else all right we are now yeah thank you Caroline ready to go into our regular meeting and consider the minutes of our April 11th 2018 meeting okay and I was absent at that meeting also so we need to show that I was absent and Jim was absent it is towards the back okay so I had Jim and Marty is absent any other comments on the minutes from our April meeting if not I would take a motion I move that the minutes be accepted as presented as amended maybe excuse me as amended thank you second the motion and a second all those in favor say aye aye any opposed all right we need to consider a recommendation to the City Council regarding approval of the revised public improvement district guidelines accept that we recommend the approval of their revised public improvement district guidelines as written with the comments shared regarding putting that onus of the notice provision on the developer you may want to have any more discussion on that we got a motion and a second all those in favor say aye I just wanted to thank you for your comments angel as well anytime we're putting the city at risk it's nice to hear somebody stand up and hear those other perspectives for sure so I appreciate the comments all those in favor say aye aye any opposed motion is unanimous we have staff reports a couple of follow-up items I will briefly touch on these and would be glad to answer any questions we did provide an update for you on the TW women in business grants 10 business owners have been selected to receive $5,000 grant each and there's a list of the businesses provided for you in your backup there were five new businesses and five existing businesses that are expanding two of the new businesses are from Denton or in Denton and one of the expanding businesses is in Denton and TW you folks let us know that the recipients finished their grant training course on April 17 th and there will be a graduation ceremony in the near future we also provided a little bit more information about the amphitheater inquiry parks and rec staff did confirm that they're confirmed that an amphitheater is not on any of their capital project lists at this point in time I did confirm with razor ranch with red development that they are still planning a central courtyard with the performance stage and seating and I included a couple pictures in there from one of their similar developments in Phoenix that shows a concert being performed at that performance venue we also included the March Stan report the April request for information summary from the city as well as a year-to-date summary of the city's direct leads that was requested last time which the summary list and we'll add to that as new leads come in to us directly and then there's also the May 2018 chamber activity report as exhibit five so would be glad to answer any questions if anybody has any about those materials on the great business leader for yes we will add it we're working with the in-house system that we developed to track and monitor our leads as well as our performance metrics for the city so I appreciate everybody 's patience with us as we try to pull out reports and make sure that we're inputting information in a way that is going to allow us to get them out so we will make that tweak bigger percentage of it is coming from residential versus commercial and industrial and the sustainability of continued residential growth without an influx of industrial and commercial growth we're not going to be able to grow our jobs base and our wage base the way we need to so that's one of the focuses I think this group has to really hammer on how do we get that that level of good growth in the city so that we can flip that tax base around and you're looking at page 14 1 of the stand report the commercial growth the valuation trends okay just for everybody's information I agree with that I think some of that I think that numbers getting wider because of the apartment growth which is in the residential which we still don't want to rely on apartments to pay all of our taxes good point the apartment owners makes apartment rents higher I think we got somehow reverse some of the thinking in within the city itself though too I hear a lot of people talking about commercial development and if we build houses we'll get more development but you're not getting the level of job growth that you need at the correct wage rate commercial development is not going to pay what you really need to be paid you're going to end up with a ten to twelve dollar an hour job at one time we had a number of quasi dormitories refrains that apartments disguised as dormitories which were escaping the taxation because they were dormitories well what happens is is you have a private developer come in and develop and build it and then the university purchases well as I said apartments disguises dormitories and so you lose the tax base on that but you have the number of services that are still you know in demand there and so you know to me that's a challenge you know where you have all the services that are demanded but there's no tax base there and then to your point Jim you know I just appreciate you kind of sounding the trumpet again that we really have to do a better job of making sure that we're attracting and focusing on businesses that will come and make an impact here in the community anything else anybody have any items up for agenda for the next meeting which is in June I will not be in town I'll be at a conference I should be here I should be here I 'll let everyone know today I'll find out everybody notice all right we'll call this meeting adjourned thanks for being here you you you