May 08, 2017 Public Utilities Board on 2017-05-08 9:00 AM

. . >> Okay. Welcome, everybody. We're going to call the May 8 th, 2017 Public Utilities Board meeting to order. It's 9 o' clock. We're going to start the morning and work session. So right off the bat, we've got work session agenda A. I guess Chuck Springer is going to lead us on this. >> Yeah, Chuck's our finance director, and he's going to make this presentation for item A and B. >> Okay. Morning. >> Morning. >> I'm sure you spent the weekend reading over the exciting budget document we put in the packet, but I will go over it a little bit more. Of course, I left it on the last slide, so we'll start off at the beginning. >> I'm glad you made that picture. I thought that was a gu illotine. >> That is the bell that they're putting up by the fire station. They removed the old bell from the City Hall West and putting it up, and part of the steel is from the Twin T owers. So it's being constructed and put up through the Public Art Committee. We're going to start off kind of going over the goals and accomplishments for the wastewater utility today. They've completed the design of the Hickory Creek and the West Peak Flow detention facilities. Those are going out for bids soon. Awarded the Pecan Creek Interceptor Phase 4 project for construction. They met the TCEQ phosphorus limits. You remember a couple years ago that was a major budget issue. They've been meeting those due to the plan improvements and the additional chemicals they've added. They continue with their in-house construction and prevent ive maintenance program, and those costs are lower than external contracted costs. They've reduced their sanitary sewer overflow volumes last year during a wet year, and the compost operation received the Ron Sigler Award from the Water Environmental Association of Texas. In terms of upcoming goals for the upcoming year, to begin the construction of those two projects, the Hickory Creek and the West Peak Flow detention facilities, to continue to meet the EPA administrative orders. Here's just some of the items that they're doing in order to continue meeting that administrative order. Again, the in-house construction and preventive maintenance costs continue to be lower, and they want to complete an update of the wastewater master plan during the upcoming year. In terms of performance measures and across really the city organization, we've been looking at updating these. So we've got the current performance measures of O&M cost per account and O&M cost per million gallons treated, but they're looking at additional performance measures to add in. The first one, kind of the comparing the compost sales revenues plus the cost avoidance, be able to use that sl udge instead of having to dispose of it, compared to the cost of that operation. A goal for sanitary sewer overflows less than three per hundred miles of sewer lines. Again, to continue to maintain their cost comparisons between their in-house services for items such as sewer line cleaning, their closed circuit television monitoring of the lines and construction, just to continue to compare those against doing that externally. And then the sewer main chokes less than one per 1,000 customers. And you can see the last three years where they've been in terms of that goal. Another emphasis this year is on cost containment strategies. You'll see some of these numbers reflected when I get to the detail in the budget. But in terms of what they are, they've eliminated some FTEs . The departmental reorganization in terms of administration. The savings of about 40,000 in terms of how administration been reorganized. In terms of the elimination of the FTEs, it was really one supervisor and one administrative intern that was eliminated. They had a supervisor that's now over both construction maintenance, one over that in the flushing crew. In terms of from the O&M budget, really did an exercise where they went through line item by line item within the divisions to look at historically what have we been spending in these line items versus what we have budgeted. So you see a reduction from the budget in the current year to the proposed budget of about 255,000. And those are the major areas that those reductions came through. But there are also other line items. We made some changes in terms of their timing of their debt service sale to balance against when they're spending the funds. Trying to just incur the debt closer to when the projects are starting. This year we're not selling for the waste water. We're carrying that sale of 6 million over to next year because we have the cash balances within that fund. The CEO fund to cover the projects for this year. So by just kind of matching that a little bit better, we're able to lower the debt service going forward. Another item, and I'll show this a little closer in future slides, but we've kind of leveled the revenue funded capital out. Historically, as they've budgeted the projects, then they 've budgeted the revenue funded capital. But what we've tried to look at is leveling that out over the five year period versus the peaks and valleys. We do have cash available in that revenue capital funded or that revenue capital fund. Currently there's about 13 million that's budgeted but unex pended and not encumbered. So we feel like we have a large enough cash balance in there to level that out over the five years versus the peaks and valleys. And I'll kind of show that when I show the five year summary. Their maintenance and operation program resulted in what the PUB is very familiar with in rescinding the EPA consent decree. And estimated savings is about 100 million in terms of a reduced capital program. One of the reasons this is here is I think we need to highlight it for the city council. They will also get this presentation and a lot of them were not here when we were going through that process. So I think that's something important to highlight. So the total reductions from all these changes would equate to about a 2.4% rate increase. So we're proposing no rate increase for this year, so we've been able to reduce that. In terms of process improvements within the fund, they continue to refine their conditions assessments and life cycle assumptions for their waste water assets. And they performed a lean improvement program this year where they approved the information amongst departments for construction plan information. There's different departments within the city that handle the construction plans. And they really looked at a process so they could get the information they needed for their permanent files on a timely basis and also make sure it all came through correctly. In terms of future process improvements that the fund is looking at, looking at a criticality ranking for the plant and lift station equipment, equipment reliability analysis, just trying to determine what's most important, what do we need to keep track of more, what might need to be replaced more often because of that ranking. They're looking to create workflow charts of all the critical plant activities, improve the work order data with City Works, and just to continually improve the asset management program. In terms of future risks and how to mitigate those risks, one of the risks really across the city and across the Metroplex is just increased contractor costs for CIP projects. A lot of this is driven by the economy and the Metroplex. If you drive around, I was driving out through Dallas one day trying to count all the cranes along the way and I lost count at some point. It's just amazing how much activity is going on. But that kind of demand drives up cost. There's discussions, nothing's been set, but there's some discussion starting about setting discharge limits for sulfate and chlorides that come out of the wastewater treatment plant. If this were to occur, it would be some additional cost in order to, one, monitor to that and two, to control that. And they're currently testing their discharge to see where they're at. O&M cost, again, trying to mitigate those by refining their forecast and their asset management program and additional regulatory requirements that could come forward that we're not even aware of. In terms of assumptions for the budget, all the rates are based on cost of service. The goal is at least a minimum debt service coverage ratio of 1.25, but striving for much better than that. The annual revenue funded capital is based on the asset management program. Collection and those goals are the collection system replacement is 100% revenue funded and treatment plant infrastructure is 25% revenue funded and 75% debt. So with the five year leveling out, they are still meeting those revenue funding goals. Reserves the goal is 100 to 140 days and again, use long term planning to try to minimize customer rate impacts. This is a summary of the budget in terms of revenues for the wastewater utility. I just want to highlight a couple things on here. And this just really takes into account for 17, 18, just regular growth. There's no rate increases proposed in here, but regular growth. But one of the items you can see that use of reserves in 16 , 17 that was budgeted at 4 million, 3. If you remember, we did a refunding of the revenue debt, outstanding revenue debt. And across the three utilities, we're able to free up funds from reserve funds that were required and some other cash funds that were required by those revenue bonds. And so we planned a use of reserves about 4.4 million came into the wastewater utility. We plan to transfer all that over to revenue funded capital . You can see they're estimating a little bit less this year in terms of a transfer. But when you look at the projection for 17, 18, the draw down of fund balance is really the remainder of that transfer. And I'll show that on the next slide. And here we have the proposed expenditures. And you can see in terms of changes, there's increases in personnel services. A slight increase in materials and supplies from the estimate, but below the budget. A portion of that is due to they're really estimating what kind of chemicals they would need for the phosphorus limits . They've been able to get a better handle on what's going to be necessary with that. And you can see the major difference is that transfer for capital projects because we had the one time larger transfer. And you see the reduction of two personnel positions or excuse me, one and a half personnel positions. So this is kind of the baseline for all of the funds in the city this year. The baseline, which is kind of no rate increases over the five year period. And I pointed out this drawdown here, about 800,000 in terms of a drawdown. Again, we had that planned use of reserves about 4.3 million. They were only projecting use about 3.3. So this drawdown is really related to taking those funds over to the revenue funded capital. And you can see the proposed rate increases last year, we 're estimating about 2%. You can see we draw down what's highlighted in yellow is where the number of working days in terms of working capital goes below the target of 100 to 140. So what we've proposed in the proposed budget, there were two in your packet, is a 2% rate increase in the future years. Option one is what I just showed you, 2018 to 2022. It would withdraw about 5.3 million from reserves and they fall below the target. Option two is 2% increases in the last three years would reduce that drawdown to 1.1. Now, let me emphasize really what we're adopting is the budget for '17-'18. So we're just looking at the one year, but we try to project out on what we're going to be doing over the five year period and give a realistic look at that. Also included within the adopted budget document is a five year forecast. So we want to put a five year forecast in the budget that's realistic in terms of what we really expect. And here is the proposed five year forecast. You can see the really only difference is these 2% rate increases in terms of expenditures. About the only area that that impacts is the ROI and franchise fee is a little bit higher because you have a higher amount of revenues. And you can see with this change that the number of working days stays within the 100 to 140 day target here. I did want to break out drainage out of this. The drainage fee and the drainage function is within the wastewater system. It's kind of a net. The revenues and expenditures are equal, but just to be able to break that out a little bit. So here's the five year projection for the drainage portion of revenue and expenditures within the wastewater fund. And the only thing to point out here, there's no rate increases assumed in this, just growth in terms of revenue. But if you look down at the debt service line, you can see that that starts to decline significantly. And what that allows for if you go to the revenue funded capital, you can see the debt service begins to decline in '19. It goes down significantly. What that allows for is revenue funded capital so we can do capital projects related to drainage increases annually on that basis. And here's the five year capital plan in terms of the wastewater fund. I've got a table or a graph that kind of shows this in terms of across the community. But you can see the breakdown in terms of collection system upgrade, field service replacement are the largest. And then we've broken it down here in the bottom. How much is revenue funded capital versus CEOs? This is footnoted. We only plan to issue two million for these projects, but there's a six million dollar carryover from the current year. So we would issue eight million in 20 years, CEO next year, plus the 350,000. But in terms of the projects shown here, we only need two million to fund that. This gives a breakdown and it's color coded. I know it's a little bit hard to see, but in terms of the projects by different fiscal year. If you have any questions on this, I'll gladly allow one of the experts in the wastewater fund to come up and answer any capital questions you may have. I'm used to doing these budget presentations with the city council when I'm not stopped with questions on every other slide. It makes me a little bit nervous. So let me know if you have some questions. I'm not used to going through on this quickly. Chuck on the just to make you feel more comfortable. Appreciate that. Two questions. One is on the on the reserve days. We did was it last year we did a study or two years ago that kind of did a comparison of where we are, where we should be is 100 to 140 days. Was that in line with the study or what it said or was that and I think Dr. Banks had done a study. I know we had updated some of them two years ago where we increase the amount, but I don't believe we made any changes last year. But I'll turn it over to Dr. Okay. Good morning. Morning. Yes, we've we've been looking at the reserve level on both the water wastewater side as well as solid waste and DME for that matter. And we went through a large number of survey data to try to figure out exactly where we were needing to be. The way that's calculated is different, different among different agencies. And so we struggle quite a bit on on how that day's calculation was actually done, whether it included debt service, if it was just strictly operating, et cetera. We have systematically adjusted those reserves upwards. We are now at 100 to 140 days and that puts us pretty well in the midpoint of what the survey data was showing us. And so it is a I think a reasonable target to be at considering what we saw in the in the data and then also what we have experienced in terms of year over year losses. So basically the programming for that was to allow us at the top end to be able to tolerate two to three historically bad years back to back. And so that allows us to we think to survive if we end up having a couple of bad years and still be able to keep operations going just fine. So does that answer your question? Where were we before on the reserve? We were we prior to this last adjustment, we were 90 to 120 . Okay. And then we went to the 100 to 140. So we we increase the lower level and broaden the range. Okay. All right. Yeah, I think I think it's good that we're recognizing that the water wastewater is one of the more vulnerable to weather fluctuations, more volatile from a revenue side. And so, yeah, that's good. Any other questions? I do have a question on that slot the five years slide that there's $1.2 million loss. And is that again just carry over? Go back another one. This right there and I know that our focus is really 2018. But in 2019, is that again from the planned use of reserves or is that? That's that's really just what it shows with a zero rate increase in that year and one of the items. Also, to consider when we're doing the plan use of reserves , we're up at 204 here after this year and coming down but it kind of brings us into the middle of that range. I just want to make sure I understood that right. Yeah, and it's really, it's really the following year that we would propose the two percent. So we don't continue that decline. And again, you know, we 'll refine these numbers as we go into that year. So it's somewhat of an estimate and close estimate, but somewhat of an estimate. Thank you. I remember I said I had two questions. I just remember that . Okay. Any any adjustments made to the five year capital improvement program from what it was what it has been to be thing delayed or or taken out is it looks the map looks pretty much the same all the projects but just just just comment on right about the map looks about the same. The delays are usually it is tied to getting easements so engaging the property owners and buying the easements to do the installation. So we have made some adjustments on some projects because of that. But within the five year window. We still have pretty much the same projects. Okay. No delays or taking projects or delaying projects because of no rate increase. Not on the wastewater site. I haven't really. What has helped is actually balancing out the just in time funding for the projects and also the revenue funding. So that balance it out. Okay. Good. Thank you. We always show these kind of comparisons where our rates are versus other communities in the area this is residential. And this will come back to the P.U.B. after others make their rate adjustments. So after everyone's budget process will come back. But you can see in terms of residential where we're at. And this one shows commercial at fifty thousand gallons. And then commercial at two hundred thousand gallons. So a little bit higher on the scale on commercial than we are residential. And with that I'll go to my last and first slide. Questions and comments. And in terms of timing we've presented this information we 've also got in the backup to detailed budget backups kind of the baseline budget and the proposed budget which again is the same for the first couple of fiscal years. We've got all this information. We'll come back with put this on the agenda in June again for questions and look for a recommendation on the budget by the end of June to be able to take it to counsel during the July timeframe into July when we take a proposed budget . So there's additional time for the committee to discuss this budget. Future meetings. Everybody's reading the next presentation. Let me drop off a little paperwork and pick up a little bit . In terms of the solid waste fund and I'll go through it in the same manner as the other one. Same emphasis in terms of the accomplishments expanding the alternative fuel facility so that we can get C&G actually through our own facility versus bringing a contractor out. At least right now on a per gallon equivalent, C&G is about 50 cents less than diesel in terms on a per gallon equivalent. To they began the landfill cell construction estimated completion of it kind of at the end of this calendar year of the latest cell and the cell life is about ten years. There's three grants that the fund received for their C&G, the home chemical center and for mining equipment. They're currently fully compliant on all the regulations from TCEQ and one of the goals and you'll see in terms of when we look at new performance measures is adding commercial to the recycling program. So they added 38 accounts, multi-family accounts this year and that brings up the participation rate for multi-family from about 28% of the multi-family customers to about 36%. In terms of the goals, hope to increase the building materials recovery program by about 7%. Mining operations in this first 17-18 will be really the first year where they're fully geared up. They hope to process about 216,000 cubic yards to give you a little bit of reference. They estimate that the total amount of mining is about three million cubic yards. Hope to do it over a ten year period. That's the first year, but they hope each year to be able to mine more cubic yards as they get more efficient and get more knowledgeable on the process. I know that it's come to this board some of the fleet software that the solid waste has looked at and they hope to improve efficiencies in their information management from that new fleet software that will be has some vehicle location and mapping capabilities, reduce preventable accidents by 10% and kind of continue to refine the business plan for the regional household chemical center. In terms of performance measures, the current ones are the residential reef refuge and recycling tonnage and the commercial refuge and recycling tonnage, those percentages and the pounds disposed per capita. Some of the new performance measures that they would like to add, increasing their commercial recycling accounts and tracking their cubic yards processed in their mining operations and then just achieving their optimal waste comp action by 1100 to 1200 pounds per cubic yard. Really that allows the breakdown of materials as well as kind of maximizing that methane gas recovery that's captured within the landfill and used to produce electricity for DME. In terms of cost containment strategies, the solid waste fund did delay some issuance and reduce some issuance on their capital program by 9.4 million for 16-17 that reduced their debt service by about 1.1 million in the upcoming year. They transitioned seven FTEs that were construction crew out at the landfill over to the mining operation as a lot of their construction activities geared down. They have future construction activities to look at contracting that out. They also went through the same type of exercise in terms of line item by line item looking at their historical expenses and reducing their O&M expenses from the budget in 16-17 to 17-18 by about 620,000. You can see some of the main categories that are in there. They've eliminated two FTEs that were vacant in terms of planning for 17-18. They're in the public outreach division, a public outreach manager, and a business account coordinator were the two that were eliminated. They've also reduced communication services and equipment going with a new vendor. That's their push to talk system. Estimate that'll save them about 175,000 over the five-year life of that contract . Question? On the public outreach, what could you explain a little bit about what's involved there? I'm going to turn that over to Vance to answer that question. Good morning. Yes. Public outreach is part of our public education and the outreach we do in the community. We've looked at how we can better coordinate those activities through the organization and we think that by doing that and a better job, we can actually reduce that one position. And the second position has not been filled in a few years. We were looking at expanding our commercial and multifamily recycling and utilizing that one position to market and educate. We've been able to do that in-house, so we just never have filled that position. So those are the two. Do we have any programs that go into the schools to start with the children? Yes. Yes. That is not being cut. We think that's an important long-term program called the Denton Sustainable Schools Program, and that will continue on. We've been doing that for probably 14 years, and that has been very successful. So we're seeing those first students moving out, graduating from high school, and coming into the community. So it's one of those long-term programs that is really needed. And to maintain our high amount of diversion and recycling, we have to have an ongoing public education program, both in the schools and in the community. I think that's very important. Thank you very much. Thank you. In terms of process improvements out at the landfill and their operations, they're hoping to reduce turnaround time, really getting a second inbound and outbound scale so that folks can come in and out more quickly and help reduce that turnaround time, make it more efficient and more pleasing for those who choose to come and use our services. And just improving their forecasting, budgeting, and CIP process materials forecasting. Some of the future improvements, looking at improving the accounting and information management processes with a software upgrade and the new fleet management software looking to incorporate that and really find some efficiencies through the use of that new software, and then collaborate with fleet services to reduce vehicle maintenance cost. In terms of future risk and what's being done to mitigate those, the mining operations is really offsetting future expense to add landfill cell space, and it also materials recovery and the sales and revenue that's coming from that. The Mosley Road landfill wanted to stress that we've identified funding available for necessary improvements, but we may have to do to that landfill of 6.2 million, sorry, 6.4 million. 3.2 is currently available, and there's another 3.2 in the upcoming CIP. We're currently evaluating what needs to be done out there, doing some testing, and we'll know more in the next couple of months, but we do have funds identified to be able to do remed iation as necessary. What's coming up is final approval of the municipal solid waste permit amendment. The public notice phase is coming forward and all the regulatory requirements as we go through that process. And hopefully avoid any hiccups during the legislature this year and continue to move forward. Also looking at wholesale customers, really external customers from the city that use our services, and analyzing any need for contractual agreements over the long term with those customers to maintain that customer base. In terms of the assumptions for their budget, revenue growth is really based on historical trends and customer data. I've got another slide where they changed their growth estimates for '17-'18 a little bit less than what they showed PUB a few months ago. The rates, again, based on cost of service, they also shoot for minimum debt coverage of 1.25, but would like to have higher than that. Their funding goals in terms of cash funding of capital for equipment is heavy duty vehicles. Their goal is to fund those 50% and light duty 100%. There is the revenue funded capital within the budget. I'll show you that line when we get there. And they're not proposing any rate increases for about a four year period. They're looking at a rate increase at year five. Kind of evaluating the potential increased expenses for new programs as we move forward. I stated they're going to continue to do an analysis of a regional household hazardous chemical center, the mining operation, and the CNG. Some of those costs are still in process and making sure of those once we have like a full year of experience with those facilities. I mentioned an updated growth forecast. You can see the original forecast for the upcoming fiscal year on the left in terms of residential customer growth, commercial growth, and retail and wholesale tonnage at the landfill. And you can see the revised numbers here. So this budget and the revenues is based on that updated column. In terms of revenues, we've broken these out a little bit differently than in prior years. In terms of the first one, asset sales and interest income, most of the asset sales are just sales of equipment when we replace the equipment and auction that off. We've broken it down between residential and commercial and landfill gate. You can see the importance of those external customers in terms of the landfill gate. Recyclable materials, miscellaneous. And I do want to point out the alternative fueling station. This is the CNG. For our purposes, how we handle this is it will show up, at least on a budgetary standpoint, as a revenue and an expense. When they go into fuel, they'll have to be using a card so it shows up as a revenue even with our own vehicles. And then it'll be an expense on the other side. So that's really why you see such a large increase in that. We'll also sell to the public, part of that grant is it has to be available to sell to the public. So via credit card, we'll be able to sell to the public. But the majority of that is really internal city operations from the solid waste. But that's a little bit different. And then you can see the use of reserves. And I'll show these in the summary slide. Last year, last fiscal year, DME purchased some land out at the landfill. And about half of that money, they wanted to use that for cash funded capital. About half of it was transferred in '15-'16. So they want to have budget authority to transfer the other half of that over to their cash funded capital. So that's really what they're using the reserves for in '17 -'18. This is just a summary of their expenditures. And we've tried to break these down. These are kind of the standard categories to be broken down . In terms of personnel services, most of that increase is due to kind of the full year of the mining operation, because we did reduce two FTEs. But as we get into the full year of the mining operation, you can see that increase. You can see some of the other line items have stayed the same. The franchise fee is simply a percentage of revenues. Their operations go up. And you can see even with the delay in debt service, you can see their debt service expense goes from about $8 million to about $9.6. And under the operations, I always look at what you actually spent versus what you're proposing. So in that operations, that's the increase from the mining operations? The majority of that is the mining operation. In terms of the equipment and the fuel used by the equipment, those type of things. About the same if you look at from '15-'16 to '16-'17 in terms of personnel services. >> Right. >> Was also almost all of the mining operation. In terms of their five year capital plan, it's broken down here. And we've broken it down at the bottom in terms of certificates of obligation. Five year, ten year, and 20, we match the life of the asset to the term of the debt. So that's broken down in that way. And I'll leave this up here. And if you have some questions in terms of their capital program. I did mention that Mosley Road facility where we were going to sell some additional debt. In terms of Mosley Road, would you like to cover that one? Kenny, it's really a landfill outside of the city limits that was run by the city. And I don't know during what years it was run by the city. >> I'm not sure if I know what year it is either. Vance, can you help me on that? >> It was in '84. >> Okay. >> So they stopped utilizing that landfill in the early 1980s. And I'm not sure when they started using it. It may have been as early as about 1960. So prior to that, there was a landfill, so to speak, over where facility management's offices are right in that area. And they left out of there somewhere in the late '50s, early '60s. So we have those old areas where the city used to put their waste that we don't have closure, post closure funding for because that wasn't a requirement then. But we still, as a property generator of the waste and property owners, still have the obligation to maintain that . >> Did that answer -- could I provide any more information on that? >> Yeah. >> We do have some repair work that needs to be done on that facility. Some dressing that has to be done on the top to level it back out. It's settled over time. And so that's what we're working through right now. >> Okay. And I'll kind of give the same two five-year forecast. This is the zero rate or the baseline five-year forecast. And you can see kind of in the out years where the number of working days target starts to decline and where we have kind of some small net income losses, 20, 21, and 22. You can see like for FY '19, it's showing an increase in the net income. And their target is 52 to 66 days. Again, you can see partially because of that land sale in 2016 where the number of working days jumped up to about 91 days. So part of that this year is budgeted to that plan use of reserves to put that over into capital. >> What is the debt coverage ratio requirement under the bond covenants, 1.2? >> Well, it was under the old revenue bonds, was one and a quarter. We have new revenue bond covenants. We've only issued for DME for the generation facility. The new covenants are just 1.0. But in terms of still setting a policy, we like to have that coverage of 1.25. Really for the utilities, we're issuing certificates of obligation, so it's got a tax pledge and a pledge of the utility revenues. I think the 1.25 gives a little bit more comfort that we won't ever have to dip into the tax pledge to do that. So it's really just kind of a performance goal. And in terms of revenue bonds ratings, 1.25 is kind of on the lower end where they're wanting to have 1.5 up to 2 for higher rated utilities. So that's why I mentioned the 1.25 is kind of a minimum, but a stronger coverage ratio would be seen by them as better. And I mentioned the proposed really just has a 1% increase out in the last fiscal year. But you can see what that does is kind of maintains us at the upper end of the number of working day targets, keeping it up to the upper end in these outer years. Again, really the budget we're focusing on is for this fiscal year. But we like to have a good idea and give a good indication of what the five year plan looks like. And this is just if an increase occurred in the last year, the fiscal year, what that increase would be and shows kind of the current rates for standard and large cart and the landfill gate rates. But we've tried to do the same type of comparison that we do for the water and the wastewater. It's a little bit more difficult. There's a lot more variability in terms of what kind of services are offered by solid waste, how often the pickup is, those kind of things. But we've got the darker color is larger carts and the lighter color is the standard carts. Ditten is kind of green in the middle here. We've put this one kind of in alphabetical order, but you can see in terms of somewhat around the Metroplex, we're a little bit on the higher side in terms of those services. You can see Austin that has a higher level of service, more comparable to ours. But we try to put this comparison together and be a little bit consistent between the different utilities. And with that, I'll answer any other additional questions you may have or call someone up to the podium. Chuck, I did have one question on the gate and material of the gate rate. What percentage of that revenue is wholesale when you're talking about converting some of that to with contracts? Because it's not really I'm assuming that there's not a lot of residents that are going through the gate. This is this is mainly going to be a hope, I guess what you 'd call a wholesale rate. So but what percentage is that? Is it 90 percent or? OK. Intuitively, we know it's a very high percentage. Yeah. And I guess the point being that we're holding rates, no increases for four years and then one percent increase in five years. I just I'm just wondering if we looked at more of a mixture of is there an opportunity more of an opportunity for wholesale rate increases? I don't know what the other options are in the area. And obviously, I don't want to, you know, we don't want to if that's a very profitable piece of business, you've got to be competitive. But at the same time, just I'm just making the comment that if there are opportunities on the wholesale side, I'd rather see those. I think Scott. The landfill revenues for twenty eighteen, they're about six point nine million and they're made up of fees and landfill gate rates and the retail and wholesale rate. The wholesale rates approximately two point six million and the retail rate is three. I don't have the detail with me is three to three point five million. So wholesale is still a significant figure at two point six million. Mr. Robinson, I can tell you, we've looked at the wholesale rate every year and we we've had it flat for a number of years. And I can tell you that it's our assessment of the marketplace that we're still in a position to keeping it flat that makes using our facility attractive, especially considering all the transportation costs that some of those wholesalers have to incur to come this far north. And so we think that in the future there may be a need to adjust that rate. But right now we feel like it's the appropriate level based on the market and what people are having to pay elsewhere. Can we sell natural gas when they come? Any other questions? Comments? Again, this is this will be the last time we see this. So we'll have other opportunities. OK, thank you, Chuck. Appreciate it. OK, next we have items for individual consideration. Item A is to consider approval of the Public Utilities Board meeting minutes of April 24th, 2017. Those have been distributed, published in advance. Any questions? Comments? Changes? Hearing none, those will be adopted as presented. Item number B is to consider recommending adoption of an ordinance authorizing city manager to execute a sewer main cost participation agreement between the city of Denton and Crawford Hospital Partners, LLC. This is in participation of oversizing sewer mains. And PS Aurora is going to leave this discussion. Just to get you all oriented where we are, this 35W Craw ford Road, Roads and Ranch is further back west here. And this is all Hillwood property for Hunter Ranch. And this project is coming along here, the surgical hospital. We have an existing sewer line that serves country lakes development here. And we had oversized that. Why do we oversized? A development is required to put a line in to serve their property. But if we have outside areas that will drain naturally through the property, then we look at or we estimate what the wastewater flows will be from that area. And that allows for partnering with the development and ups izing that line. So we pay for that cost. What is the upsize cost? They may need an 8 inch, but we participate beyond 10 inch. That's the ordinance that we have. So anything beyond 10 inch, if we need to oversize, we pay for it. And that's what this item is for. You have seen the cost there. It generally works out pretty good because what we get is an oversize participation that if we had to go out and lay that capacity line, that cost would be much higher. By doing the oversize participation, we're able to get a perfect cost, which is much lower cost for us. This development won't even use an 8 inch full capacity, but we go to 18 inch. This allows us to take flows from Hunter Ranch. And we have a project coming along that would probably take all of the Robson Ranch project and run it through this line here. And we are still working on it, and we'll have that back here for the meeting after the next one possibly. Okay. So if there are any questions, I'll be happy to answer. So basically these oversize participation is going to be the cost of the pipe, really. I mean, because it didn't cost that much more. That's right. It has to be the same size and it's really the material cost. It had to be a little deeper, but that's a little bit of the cost there. There's a big drainage ditch by I-35W, and we didn't want to do an aerial crossing on it. So we made the line a little deeper. Okay. Very good. Any other questions? Question. Yes, Barbara. Is this agreement, this looks very similar to the one we considered last meeting? Am I correct? Yeah, that was for water. That was for water. That is for wastewater. Thank you. Okay. Yeah. Okay. Other questions? Okay, this is an item to take action on. Is there a motion then to on this item? Move approval. Second. Motion to approve. Barbara, second by Susan. Any discussion ? All in favor then say aye. Aye. Any opposed? Same sign. Okay, motion carries. Next item we have is our ACM update. Yes, what we have for you is the action matrix, and it looks like we've completed most of the items. I do recognize it says completed, but we still owe you information on the solid waste salary, FTE comparison, and we'll have that to you as soon as we can. Okay. That's all I have. Okay. Okay, concluding items, A is for any ask of any member of the public utilities board or the public if they have, would like to see any item on the, any future agendas. Nobody's raising their hands, so I guess not. And I guess the, the only other thing left is to adjourn before I do. John, is this your last meeting, PUB meeting? I just want to, I'm starting to get a little bit of bad vibe from people sitting on my left. But I do, over the years you've been a big part of the public, since I've been on it, PUB in one way or another. I just want to thank you for the job you've done and wish you good luck in the future. Well thank you very much. It's been a pleasure working with each of you and I wish you the very best. This is a hard decision for me, but one that's exciting at the same time, but I've enjoyed my time here and I've appreciated getting to work with each of you. Thank you. Very good. With that, is there a motion to adjourn? So moved. Motion and a second? Second. Thank you, Allen. All in favor say aye. Aye. 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