May 22, 2017 Public Utilities Board on 2017-05-22 9:00 AM

Okay, let's call the May 22, 2017 Public Utility Board meeting to order. Our first item is our consent agenda. We have three items on the consent agenda. Would any member like to pull any of those items for individual consideration? Hearing none then, is there a motion to approve the consent agenda as presented? Motion from Lillian? Second. Second. Any discussion? All in favor say aye. Aye. Any opposed? Same sign, consent agenda passes. Next we have the Public Utility Board meeting minutes of May 8, 2017. Those have been distributed prior to. Any corrections, amendments to those? Any one? Hearing none then those will be approved as submitted. Item B, and I think Dr. Banks is going to do the presentation on this. Good morning everyone. I can't think of a more exciting topic to have on a Monday morning than to talk about fire sprinkler tap fees and tap and meter fees. So I hope you all enjoy the ride. This is a topic that has a little bit of history associated with it that I think is important to this discussion. And so I want to talk a little bit, talk about what a fire sprinkler tap fee actually is and then give you a little bit of that history to kind of show you what led up to the point that we're at. So a fire sprinkler tap is just a water line tap fee. It is usually a larger line than you'll see for a service tap. That's really about the only distinction there. The tap is made on the line itself. A gate valve is installed and then the person that's requiring the fire sprinkler tap is responsible for the expenses of extending that service to their facility. The fees do depend on tap size and then the installation type, whether it's a paved or unpaved situation. Fees are based on our average installation cost, which is always we try to base our fees on cost of service. And so these are no exceptions. We take a look at the cost and every year we put together a cost of service analysis that will show what these fees actually are. This is included in the utility fee schedule that you'll see every year at the end of the budget process and then it goes on to be adopted by ordinance by the city council. And if site conditions differ substantially from average conditions or if we have a specific requirement that's requested by fire, charges are based on the actual cost of the installation itself. So a little bit of history on this. The fees were charged for fire sprinkler taps just like any other tap prior to 1991. And in '91 there was a new fire sprinkler system ordinance that was adopted citywide. And at the time that was a much more stringent ordinance than existed in the DFW Metroplex. And so there was discussion and ultimately an agreement by council to waive these fees for a temporary but unspecified period of time. So basically the language that you see in the utility code of ordinances stated upon written request to the superintendent, the utility department shall waive the installation charges for water taps exclusively dedicated to fire sprink ler taps. The superintendent shall have sole discretion in the application of this subsection. Similar language was actually included in the water rate schedules and has been in place since 1992. That language is in there today. And around 2000 there were conversations between fire and water department staff that indicated that the Denton sprinkler ordinance was consistent now with other Metroplex cities. In other words those Metroplex cities had caught up with our code. This prompted in 2001 the water department to survey 41 cities, 21 were from Texas, 9 were in the Metroplex, 20 from around the United States and tried to determine whether fire tap fees were actually charged by these entities. All of them required the developer or building owner to pay a fire tap and connection fee. And this prompted an item to be brought to the public utility board in March 2001 recommending charging for the fire sprinkler taps. And based on the PV direction at the time staff began to assess fire tap fees in 2001 and have been doing so since that time. However, that language was not changed in either the code of ordinances or in the rate schedule itself. And that has caused some confusion through the years as to why that language still exists. We were asked to bring this information to the council on February 14th and that was a request by the mayor. And in April this item was brought forward as a part of bringing this information forward as a work session to council. We conducted a survey of 19 area cities in March of 2017. We felt that the previous 41 city survey was quite dated and we wanted to be sure that this information that we were bringing forward was as current as possible. 18 of these cities charged fire tap fees as a part of the regular tap fees. One charged a separate fee for the water line tap for a fire tap plus a one-time demand charge that was based on the tap size. So they all charged this one was just did it in a little bit of a different way. So as I stated, we had a request to bring this forward in February. We ended up having a work session on April 18th with the council. The council was direction from that work session was to remove references to waiving fees for fire sprinkler taps from 26-126-1 of the code of ordinances and to remove that language from the water rate schedule and continue to collect fire sprinkler tap fees as we have been since 2001. We did get into a discussion about clarifying what is included in the standard water tap and meter fee. The council felt that our rate schedule needed some additional language so that the applicants would understand exactly what the fee they were paying actually went towards and what the applicant was responsible for. And so we were asked to clarify what was included in the standard water tap and meter fee and clarify when a special price quote to perform nonstandard work would apply. So exhibits two and three of your agenda information sheets show the changes that we have made in response to the council request. We removed the 1991 language about waiving fire tap fees from the code of ordinances and from the current and future water rate schedules. We are looking at clarifying language for the rate schedule itself. And all of these will have to be taken forward to the city council with an ordinance to enact these changes. So right now the current water rate schedule, if the board direction is to move forward with this, will be modified outside of our normal sequence. We'll try to get that done as quickly as we can with the council. So that will happen before it would usually happen at the end of the budget cycle when we adopt the entire rate schedule. Real quickly, I know this is a bit tedious because it's code language, but I wanted to be sure that we worked through the additions that we have made to the rate schedule. For the water taps with meter section, we added the text that you see on the screen to the beginning of that section basically explaining that the installation of the water main tap, service line from the main to the water meter, the meter box and the water meter itself are actually included in those fees. Water impact fees are not included. And for situations where portions of the installation requires a pavement cut or the repair or water service line has to be bored underneath the street, the paved street fee shall apply. We do have a nuance with some of our streets that are constructed of full concrete panels. Those panels are weakened if you just cut them and patch them. And so what we are requiring on those is a full concrete panel section replacement. And so in that particular instance, if you've got a meter that's larger than two inches or a full concrete panel section that has to be removed, that takes you to the special price quote section which is called fees for installations not listed. Water meter fees, just the meter itself, this would be installation for water meters for new developments and existing properties that are requesting a larger water meter as long as they have an adequately sized water tap and service line . This fee would include the installation and setup of a new meter, new water meter box if required. Impact fees are not included. And again, for those meters that are larger than two inches , we would provide a special price quotation. For the relocates, this is for relocating an existing water meter to remove them from a conflict like if someone wanted to put in a driveway or sidewalk or other type of surface obstruction. This fee would cover relocation of the meter box itself and the water meter, water service line up to 10 feet. It does not include pavement removal or replacement. And for distances longer than 10 feet, we'll provide a price quotation in increments of 10 feet. The taps themselves, one of the things that we've done that was causing a little bit of a confusion was that the water line tap section currently has taps for one inch and two inch lines. Those are covered elsewhere in the fee schedule, so we simply removed those from the -- from this section. This will cover larger than two inch diameter service lines and those fire lines that are installed by a private contractor. The fee includes the tapping sleeve itself and the isolation gate valve, the installation of the tap and removal and restoration of the pavement for water tap installation only. The contractor in this case is responsible for installing the main line extensions, service lines, and fire lines from that tapping sleeve isolation valve to its point of service. As I stated, we removed the one inch and two inch taps. And for those taps that impact a concrete pavement that require a full panel removal and replacement, we'll provide a special price quote. We did want to put in there -- this is asked of us on occasion -- we can offer to make a short extension of the main or service line to the backside of the street curb. That makes it a little bit easier for the contractor to pick that up and take that on to the point of service. And so while we're out there doing that, if they so choose, we can provide a special price quote for doing that activity. And then for the fees for installations, not listed section , we modified this to make it consistent with 126.1. It was a little bit different in the fee schedule requiring a 50% upfront. That was inconsistent with 126.1, which required an upfront payment based on an estimate and then the final payment based on the actual cost of doing the work. So we made that change. So I know that was a bit tedious and a lot of information, but those are the changes that we're proposing as staff to address the council concerns. And I'll be happy to answer any questions anyone has. I have one on this last slide. The change is from paying 50% upfront to the entire amount. That's correct. Right. And that is currently what is required in our code of ordin ances. Barbara, thank you for the question. You mentioned on page two, there are a couple of terms on page two and page seven talking about average conditions and nonstandard. Are there definitions for that? How does one know? What we do when we set a meter fee cost of service is that we are, when we're going out there and doing the work, we're actually collecting information on the cost of materials, the cost of labor, what it takes to do a line bore, anything that goes into it. And we come up with a standard fee or an average fee that actually goes into the rate schedule. And so that is based on our normal conditions of installing a meter. We look at that every year and base our fees on that actual cost. And so what we will look at is basically are we going to be within the range of that cost? And we have a tendency to deviate maybe 10% on either side on average. And so if we're substantially above that, that kind of pushes us into that nonstandard realm. And so what we're trying to do is we're trying to set a fee that makes it easy to administer and that everybody understands what that fee is. But at the same time, if we've got an installation that is much more expensive than the established fee, then the cost of service approach would indicate that we need to do a special price quote. And the person that would be in that position would know before they began how much they were going to have to pay? As a part of the development review process, what they're proposing, we'd be able to go out there and take a look at the situation and come up with if they're in a situation where we have a nonstandard, they would know that beforehand. Okay. Thank you. Any other questions? No? Okay. Thank you, Kenny. Appreciate it. Thank you. Is there a recommendation? Yeah. I was about to get to that. Is there a, excuse me, a motion then for recommendation on to adopt this as presented? Second. Okay. First and second. Any further discussion? All in favor say aye. Aye. Any opposed? Same sign. Okay. Motion passes. Item C is a matrix. And AC, or excuse me, ACM report. I don't know. I think the only thing... Okay. Yes. Barbara? Are you ready for us to add something? Sure. Absolutely. I'd just like an update on the sale of the coal plant and where we are on our electrical work. I'm seeing the lot on 288 grow void of equipment and materials. And I just, if you could bring us up to date on how close we are to being done, how much is left? All the transmission is still going. Okay. I guess that'd be two separate items then. Yes, sir. Okay. Any other additions to the matrix? Questions? Would like to see for future agendas? Okay. Hearing none, then nobody here. Looks like the seats are empty, so no public comments. So is there a motion to adjourn? So moved. We don't even let you do it, Brendan. Second. And Brendan? All in favor say aye. Aye. Thank you. I think that's a record, by the way.