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