Okay, it is nine o'clock and we do have a quorum so we'll call to order the public utilities
board for the city of Denton for Monday October 11th, 2021.
Is there anyone in the public wishing to speak?
Is there anyone on the phone?
Kim, do you know if anyone's on the phone?
No?
All right, then we'll go into our regular meeting.
The first item is our consent agenda.
Does any board member wish to pull one of the items of A, B, or C?
I'm looking at Ben.
Go ahead, Ben.
I can't hear you.
Are you muted?
I am talking.
Okay.
I'm sorry.
Go ahead again, Ben.
We didn't hear it.
That's okay.
Item B is in boy.
Okay.
Item B is in boy.
All right.
Then do we have a motion to approve items A and C?
So moved.
Barbara, moved.
Do we have a second?
Larry seconded.
All in favor say aye.
Aye.
Okay, that includes Ben.
Then item B.
Yeah, I really just had one quick question about that.
It was talking about a switch between the type of steel, and it said stainless steel
was preferred.
I was curious.
Why is it preferred?
What's the difference?
What's the purpose of the switch, exactly?
Do we have someone from staff?
Madam Chair, let me see if Stephen Gay or one of his staff members is on the line.
Okay.
Yeah, this is Stephen Gay.
I was going to wait to see if Chris could answer the question, but essentially stainless
steel is more resistant to the rusting, and in the moist environment, it's preferred over
the galvanized.
Okay, that was it.
Thank you.
Okay.
Do we have a motion to approve item B?
Mr. Beck, motion to approve?
I'll second.
Ben, you can be the second.
All in favor say aye.
Aye.
All right, that carries.
Next item, items for individual consideration.
Consider the approval of the September 13th minutes.
Does anyone have any changes or corrections?
Okay, seeing none, do we have a motion to approve the minutes?
So moved.
Devin moved.
Barbara seconded.
All in favor say aye.
Aye.
That carries.
Okay.
Item B, consider recommending the adoption of an ordinance for the city of Denton to
declare the intent to reimburse capital expenditures for the electric utility.
There we go.
Good morning.
Randy Klingle, Treasury Manager.
I'm here to present to you a short slide deck regarding our annual reimbursement ordinance.
The purpose of this ordinance is due to the fact that the IRS wants the city to declare
its intent to reimburse itself with tax bonds that will be issued at a future date.
Generally, we sell the bonds 12 months after this ordinance is approved.
We like to do it before the end of the fiscal year for accounting purposes.
And this is also allowed in our current city's debt policy for us to do this.
The projects that you will see on the slides going forward, we're not gonna go through
them item by item.
They are the budgeted items for the utility departments.
So these were just approved in the September 21st overall budget for the city.
So there should be nothing new here for you to see, but these are the same projects.
The water projects are totaling a 34.4 for their budget for this current year.
Wastewater projects has a longer list.
There's three slides here, but also in your backup, I'll note that your AIS has a very
small narrative detail on the highlights of what they're doing this fiscal year.
There's large projects that are going on, but there's a small narrative in your backup.
Wastewater projects continue with a total of 44.2 million.
Solid Waste has a budget of 2.5, working on the scale house and some fleet facility.
Wastewater projects are totaling 52.9 this year, which brings your utilities to a grand
total of 134.1, and this is their budget for the fiscal year that we just started.
So our next steps are for staff to go to the bond oversight committee, where we will take
the geo bond portion of the total project list for review.
Then we'll come back to PUB and to council regarding the notice of intent.
At this time, this project dollars most likely will reduce.
We're not going until probably April for that, so they have some time to review the projects
and the current funds that they have available.
Then in May, we will go for a parameters ordinance for council, and then on May 22nd, we will
have a project bond sale and possible proceeds in mid-summer, possibly in June.
Yes, ma'am.
- I just have a general question, is the bond oversight committee, is that the public or
is that staff?
- It's public.
Yes, ma'am.
- And the council selects?
- Yes, they go through that program in 2019 when we had the bond election, they began
that committee process.
They went through the summer, had the election in November of 2019, and some of those stayed
on, and they try to meet quarterly to review all projects.
- Okay, thank you.
- Thank you, and that was all of my slides, so any questions further than that?
- Other questions?
Ben, no question from you, right?
Okay.
All right, no further questions.
Do we have a motion to approve?
Mary Beck is approving.
Motion to approve.
Second?
Barbara Russell.
All in favor, say aye.
- Aye.
- Opposed?
- Aye.
- Thank you, Ben.
Item C, consider recommending the adoption of an ordinance for the city of Denton, a
Texas Home Rule Municipal Corporation, authorizing the city manager to execute a contract with
Floyd Smith Concrete in the five-year not to exceed amount of $39 million.
- Good morning, Madam Chair, members of the PB.
My name is Ethan Cox.
I'm the general manager for public works for the city of Denton.
The item that you have before you this morning is for concrete repair and installation services.
This is not related to our capital projects.
Those are typically contracted separately.
This is really for spot pairs and smaller projects that are less than $400,000 in cost.
This is a city-wide contract, although public works uses about 70% of all the services.
That's our drainage streets, traffic, and parks and recreation.
We do have some utilities that are involved as well with water, wastewater, solid waste,
and I believe electric sometimes utilizes this contract as well.
You'll see here on this slide, we've included some of the types of work that you'll typically
see us use this contract for.
I would say about 50% of our overall annual spend, which up to this point is about $6
million a year.
About 50% of that we plan going into the year.
These repairs that are scheduled and anticipated.
About half of the rest of that expenditure is for emergency repairs as well as citizen
requests and issues that staff identifies in the field in the course of our ordinary work.
We have been seeing about a 7% cost escalation on an annual basis.
We expect that to continue as a result of some of the supply chain shortages we're seeing
with the pandemic.
Over here on the right, you can see our breakdown on the ... This is a three-year contract with
two optional one-year renewals.
We also have $4 million in there for contingencies.
Over a five-year period, it's an estimated total contract spend of $39 million.
For the solicitation, we did send this out to 486 prospective vendors.
We had about 21 express interest or at least view the solicitation on wave.
We did only have one response from a vendor.
This is the contractor we've worked with, Floyd Smith, for over 20 years here locally.
In terms of only getting one response, I know that's usually a question we look at.
I think from a staff perspective, there's a couple of things there.
I mentioned the pandemic, so we're not seeing as many bidders on some of these just because
they don't know if they can fulfill the obligations.
I think the other thing with a contract like this, these are small localized repairs.
You're mobilizing every day, two or three times a day.
For vendors outside of Denton, that can be a challenge.
We understand that's always a concern, but this wasn't necessarily unexpected for us
and we feel like we have a good relationship with the contractor and Floyd Smith.
From a staff perspective, we recommend that the PB recommend approval to the city council
for the concrete repair services.
Again, it's a two-year contract, I misspoke earlier, with the option for three one-year
renewals and that total not to exceed amount of 39 million.
I'm happy to stand for any questions.
Questions?
Yes, ma'am.
I don't think I have seen as many sidewalks and curbs being worked on in our city since
we've lived here.
Are we behind and catching up because they're in neighborhoods that are older neighborhoods
and it just seems like everywhere I go, there's a sidewalk or a curb being worked on.
Yeah, I think there's obviously our capital projects where anytime we go into the capital
project, we want to look at everything holistically, not just the street repair and reconstruction
as we have in the past.
With those projects, you're going to see curb and gutter, sidewalks, sometimes you may be
looking at bike lanes and lighting being installed as well.
I think from a maintenance and repair standpoint, really, we're trying to be more proactive.
I think in the past, we would really just wait until we saw an issue out in the field
or a citizen contacted us.
Really, we've put an emphasis the last couple of years on identifying where there's gaps,
where there's trip hazards, where there are things like that and really trying to program
that work.
That 50% of the contract spend is really geared toward being proactive and scheduling some
of those things so that we're not as reactive and not waiting for a citizen to complain.
So we're not fixing a straight and then tearing it up to do a water line?
No.
Ideally, that would be what we avoid.
Right.
Absolutely.
Good idea.
Oh, Mr. Beck, go ahead.
Quick question for my own edification.
I'm in a new development where the developer's fixing to get out of there and already we've
got a couple of areas on the sidewalk that are broken and I anticipate they'll fix it,
but just out of curiosity, what's the timeframe that they're obligated to fix once they're
done and out of there?
I'm not sure.
I'm not as involved with the development side of approval, but I do know that we do have
warranties for developers and typically what I've seen in those, I've seen two and three
year warranty periods for those.
I don't know if that's a standard for the city, but if you're seeing a developer that's
stepping out of there and part of what they've installed is already failing, that should
be covered under the warranty.
If you have specifics, if you want to shoot me an email, we can get that over to our inspections
division and make sure they're aware of it.
Well, I've been dealing with developers.
I feel certain that they'll take care of it, but good to know where I can go if they don't.
Yes, sir.
Thanks, sir.
Other questions?
Do we have a motion to approve item C?
So moved.
Barber moved.
Do we have a second?
Devin second.
All those in favor say aye.
Aye.
Opposed?
Thank you very much.
Thanks, Ben.
All right.
Management reports.
Madam Chair, PB members, so we have a couple of reports that we've submitted to you.
One was the water cost of service study.
I think someone had requested that, and then we have the July 2021 dashboard for the Dent
Energy Center.
Nick Vincent is on the line if anyone has a question regarding those two reports.
And the third report is this customer service integrated utility payment solution contract.
Either Ryan Adams or Krista Foster are on the line.
So before I go to the next item, if there's any questions on any of those reports, I'll
be happy to respond.
Mr. Beck, go ahead.
Yeah, just a couple of things popped out to me.
First, I want to congratulate whoever put the report together.
I mean, for a lay person like me where it's hard to get your head wrapped around a lot
of this information, I thought it was well done, and I was able to understand it reasonably
well.
But a couple of things did pop out to me, if you could allow me to ask you about it.
In addition to the water operation and maintenance costs, utility, it says the utility pays a
5% annual franchise fee to the city and a 3.5% return on investment to the city.
It says the fees are based upon rate revenue, the franchise fee is calculated within the
model based upon the model's calculated revenue.
My question is, is this miscellaneous revenue that helps fund, what, city capital improvements
or some other thing?
So let me see if Nick is on the line, see if he can respond to that.
If not, I can give it a shot.
Nick?
Yes, I'm here.
Can you hear me?
Yes.
So Nick Vincent, assistant director of finance, great question.
So I believe your question would be is the return on investment and the franchise fees
that go to the general fund, what do those go to funds?
Is that your question?
It goes to the general fund then.
So it does go to the general fund for a couple of different reasons, or for a couple of different
purposes, so I can kind of walk you through it really quick.
So the franchise fees go to the general fund, those are eventually funneled over to the streets
fund for street infrastructure, and two, for the street improvement fund, so used around
the community for different improvements within streets, and I know Ethan had presented a
couple items to go, that's a perfect example of what those funds go to fund, is that department.
And the return on investment does go to the general fund just to cover overhead costs,
so it's the general fund's return on investment for owning those utilities, hopefully that
answers your question.
Yeah, it does.
And this applies to both water and wastewater, right?
Yes sir, actually the franchise fees and returns on investment applies to each of the utilities,
with the exception of solid waste, so water, waste water, and electric, each pay a franchise
fee and return on investment, and solid waste pays a franchise fee that does not pay a return
on investment.
Okay, and what was, what is the, what's it called, auction proceeds under these?
Yes.
Yeah, great question, so auction proceeds are simply just as it sounds, that is the
utilities sell at its assets, or dispose of those assets through auction, so you may remember
a couple meetings ago we had Terry Cater, the fleet superintendent, give a presentation
regarding vehicles, and the city purchased new vehicles, we sell from those older assets,
we bring those revenues into the funds to sell of assets, or sell of vehicles, yeah.
Okay, that makes sense, that's kind of what it sounds like, and then last thing, why wasn't
it determined by the city that no growth was assumed in the collection of water and wastewater
impact fees, it's just a static amount for the next five years, why was that?
So a great question, so a couple years ago the city updated the impact fee study for
the water and wastewater utility, but that study did look at a 10-year recoverable cost
that each of the utilities could recover through impact fees, that amount happens to be, for
example, for water around 60 million, I believe for wastewater around 45 or 49 million, what
we simply did is we took that amount, divided it over 10 years, that is a 10-year amount
we're going to recover from the community, from growth coming in, so from the impact
of those growths on those different utility systems, is it exact science, the impact fee
itself does consider growth, we just simply took that amount, divided it evenly over 10
years, not really knowing what year we would receive more or less, and I will tell you
that fluctuates year to year, I mean this year for example, water has received somewhere
around 7 million dollars in impact fees, when we budgeted it somewhere around 6 million,
so I mean that definitely does fluctuate year to year.
And this took into consideration the 100 coal development out on 35?
Great question, so the current impact fee study does not contemplate 100 coal ranch
development, one thing we've been talking about along with Stephen Gaye, the water waste
water utility director and the city management team is updating that impact fee study prior
to the five-year period to include that development, so that very likely could come back to you
in the near future, we likely will not wait for five years to update that study, so I
think that study was updated in 2018 or 2019, so we're approaching the third year of that
study.
Okay, great, thank you.
You're welcome.
Questions for anyone else?
All right, go on to new business.
So there's really no change to the new business items that we have, you know we have a number
of follow-ups that we're planning to do, the last request that we had was this emergency
preparedness for the DEC, we are working on a memo to you and anticipate having that for
you for the next meeting along with this legislative update as well, so if anyone has any questions
on those, I'd be happy to respond, but we are working on those.
Mr. Beck again.
I'm pretty talkative today, are we dealing with the list because I don't have it in front
of me, are we dealing with the list of issues that were raised in the past and where they
stand?
I can certainly read them out to you.
No, no, no, the one I was interested in, I think a former PUB member had soft presented
about how much solar energy was put back in, he and I were on what was called the Denton
drilling awareness group which is now defunct, so that is an item that interests me too,
so has there been any movement on it at all or is it just?
I can tell you that we are working on that, as you may be aware there's been a number
of questions that have come up regarding street lights and lighting and dark skies and a number
of other issues surrounding that, including questions regarding PPA that we recently did
with embassy suites and so the direction that we got is to work on that and we're planning
to have a conversation with the sustainability committee regarding all these matters, we're
going to just roll all this into that discussion and we'll come back to the PUB with whatever
recommendation that committee makes on that presentation and ultimately we'll go to council
to seek any direction, if there is any direction there's likely going to be a pretty broad
discussion about our total solar program and lighting in the city and those related matters,
so at this point I don't have a date certain of when we're going to do that, I can just
tell you that we are working on that and hope to have that before too long.
Good, I appreciate your attention to it, thank you.
Yes sir.
Any other board members?
Alright then on to concluding items, does a board member wish to have anything added
to a future agenda item or have congratulations or anything to add?
Alright, hearing none it is 922, do we have a motion to adjourn, Billy's not here, somebody
has to do it.
So moved.
I'll move.
Alright, we're adjourned.
Bye everyone.
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