And we'll go right into that with the first part which is
item A.
I guess Phil, this is the report regarding moving city of
Denton toward 100% renewable energy.
I think Phil Williams is going to make this presentation.
Thank you.
This is an extremely exciting time in electric utility
industry.
I've been in the industry for 40 years.
I've seen transitions from different fuel sources from fuel
oil to coal to nuclear to gas and now to renewables.
And these transitions are exciting times, challenging times
, but exciting as we make these transitions to go forward
with, in this case, more economical.
And certainly more resources that will provide us better
energy from sustainability standpoint.
Just a quick background on the DME.
Been in business since 1905.
52,000 customers.
I was noticing an article I read last week from Guam Power
Authority.
Guam is an interesting place to watch as renewables make an
evolution there because it's on an island.
It's about the same number of customers as Denton.
So it's interesting to watch from our perspective of how
they deploy renewables on their island.
And use that to deploy energy sources now that have to all
be shipped in.
Whether it's fuel oil or heavy oil, everything is shipped
in.
As you can imagine, their power is 50 to 60% more expensive
.
So there they can certainly afford to take some stretch
goals as far as what they do with renewables.
Again, recognizing our customer base, 88% residential, 12%
commercial industrial.
If you look at the load side of it, our sales, 60% of our
sales are those 12% of our customers.
We've grown from small to medium, as I say.
We're not ever going to be the size of San Antonio or
Austin, the largest municipal utilities in the state.
But we've certainly grown from a small municipal utility to
one of the medium size and certainly stand out in the crowd
.
With our renewable portfolio.
Annual budget, $176 million. This was last year's budget.
The next presentation of CFDIS will be this year's budget.
We'll be less than that.
We operate within a grid of the Electrical Liability
Council of Texas.
And we operate on the purview of this board, the Public Ut
ility Board, and Advisory Board to City Council, who is our
governing body.
That governing body gave us clear direction in 2016.
As we adopted the renewable didn't plan, it certainly gave
us direction that 70% was a goal and a marker along the
journey.
It was certainly not supposed to be the end point.
Then they gave us clear direction that they still want us
to pursue as much renewable as possible while continuing to
offer competitive electric rates and ensure not only
physical electrical liability, but financial electrical
liability for our customers.
And that's what this plan has done.
And we'll continue to do.
So key factors that I'm going to cover in more detail, but
I'll hit the high points here.
Up front, the pricing for wind and solar projects continues
to be favorable.
Matter of fact, it almost with solar, especially, it could
drive us into paralysis a little bit because the price
keeps going down.
And so it drives you into a point of when do I pull the
trigger to go forward more solar?
I want to go more solar.
We've been looking at more solar for years.
And every time we think we're ready to pull the trigger on
it, somebody walks in the door for a better price.
And so things are shaping up.
We have a new RFP going out that I'll refer to later.
And we'll certainly get in a position to pull the trigger
on the deal that we'll bring forward to the utility board
and to the council later this year.
One of the advantages of renewables is that we see as price
consistency through long term contracts.
We can lock in pricing to these contracts that we can't
lock in with long term gas.
And so it gives us a capability at this time to lock in
long term wind power contracts and solar contracts that
will provide us price consistency throughout their terms.
The issue, of course, is the renewable output as compared
to the load.
Wind and solar come when wind and solar come.
And not exactly when we have the load.
I still need something to dispatch to match our load
capability.
And I have some charts to demonstrate that.
Of course, the answer in a lot of people's mind for that
and the future answer for that is grid scale storage.
But that's at the pilot phase.
I was talking earlier about Guam.
Guam just issued a request for a proposal, I think, for 40
megawatts of storage.
And they're about the same size system we are.
So about 350 megawatts system.
And so they're just starting into it.
And the problem they're solving with storage in their
system is one they have because they don't have an ERCOT.
They don't have a grid to back up on their own grid.
And so they're going to use battery storage for frequency
and to maintain the quality of electricity.
Not exactly to provide a bulk of electricity, which is what
we need.
Wind doesn't always deliver according to forecast.
I have some graphs that will show that.
And because of that, it can cause prices to spike.
And I also have a graph showing the spike of that.
You have to contract on the megawatt capacity versus megaw
att hour production.
You have to contract for so much more capacity than you
would otherwise as far as production.
But what that can give you is an overabundance of renewable
energy at some times and not enough at others.
The research and development.
We've been in discussions with universities, San Diego labs
, to look at what other developments will be in the future.
And to talk to them about and partner with some of them on
what could come forward.
So where have we been?
A short period of time, we were at a very low -- we had a
landfill gas project.
We added the next era contract, the wind contract, that
took us 40 percent.
The latest plan that we passed was to take us up to 70
percent.
And what I'm here to tell you today is with the pricing we
're seeing, we'll be able to go beyond that by 2019.
We'll go well over 80 percent.
And so we're going to achieve beyond that immediately in
2019.
And we still recognize that's not the end.
We're achieving these different goals by these different
resources.
Coastal wind, west Texas solar, west Texas wind.
We're looking at community solar, energy storage, demand
response.
All those to keep going towards the goal of having more and
more renewables in our portfolio.
And we're talking about physical renewable portfolio.
Where we are right now, 263,000 megawatt hours.
We're talking about in 2019, the original plan of the
renewable project was to have close to a million megawatt
hours of wind and 300,000 megawatt hours of solar.
We're seeing the pricing and the shape of these plans come
forward now.
And we're talking about increasing that to almost a million
three of wind and 357,000 of solar.
So a significant increase from where we originally talked
about.
How does that come about?
We're looking at originally we talked about 100 megawatts
of solar and I believe 230 megawatts of wind.
We've added 50 more of wind, 30 more of solar to the mix as
far as the capacity of it we would generate.
And we still have the energy center.
The reason we have to go for that over amount of capacity
is because as we've said, the wind doesn't always shine.
The wind doesn't always blow, the sun doesn't always shine.
Solar produces about 30 to 35%.
You factor that size of solar times 8,760 hours a year
times the percentage it does produce.
And that gives you that amount of megawatt hours to fit in
our portfolio.
Same thing with wind.
Wind 45 to 55% capacity factor and it produces almost a
million three.
The energy center, we're looking at producing depending on
the year, what the weather is.
We'll probably run about 20 to 30% of the time and produce
about 488,000 megawatt hours.
Now what's a little bit misleading here is this little sl
iver down here I call market.
And that's net.
The reason that's misleading is because that's net of how
much we're going to push out at times and how much we'll
take in at times.
There will be time for renewable energy is blowing, wind's
blowing, the sun shining and the load is low.
And we'll have more renewable energy coming in than we can
use.
And we'll be selling that on the market.
We'll also have time for the market prices are high and we
'll be running the generation not for ourselves but because
the market demands it.
Both those together have us pushing out 500,000 megawatt
hours in a year.
By the same, the other side of the equation, there will be
times when load is high, the wind and solar resources are
not producing,
and we'll be going to the market and pulling in 500,000 meg
awatts a year.
And so it almost nets each other out.
This is not the time.
And that's the whole philosophy of our project.
You know, what is 100%?
Is 100% meaning that I'm going to buy as many megawatt
hours of renewable energy as what I sell?
Then we can get to 100%.
And I'll still have the energy center to run.
And somebody might look at that and go, why do you need the
engines if you're able to buy as much as you sell?
Because it doesn't come at the right time.
And so we have to balance, have to have some asset that we
can use to balance the load and the resource coming in.
So in our trek to get to renewable energy,
I'm going to mark her here, the original forecast for
renewable didn't plan.
We would open up at 78%.
It is load grows that deteriorates down.
We would add a block of solar energy and it would go back
up, come back down, and we would always been above 70%.
What we're saying it's today's pricing.
Our plan today is we'll open up at 88%.
It'll deteriorate down.
We'll buy a block of solar.
It'll deteriorate down.
We'll buy another block of solar and that will be our
future.
And we'll never go below 80%.
But it will go up and down each year depending on the
weather, depending on how the renewable resources are
provided.
So to talk a little bit about, I'm going to have to ask you
to focus on the different colors here one at a time.
Otherwise it gets confusing.
The red lines are load.
This is a usual summertime load.
Start off at early in the morning, 24 hours a day, wrapping
up to late afternoon peak.
So that's the red line.
The orange line here, orange like the sun, that's the solar
production.
The blue line here is the wind.
It blows when I don't need it at night, blows some, comes
down during the day when I need it most, but then it ramps
back up at night.
So the orange and the blue together give me that green line
of supply.
You can see I have some hours, as I was discussing, that
are over supply.
They'll be selling that to the market.
I'll have some other hours where it's under.
And if the market's cheaper, I'll buy from the market.
If it's a lot cheaper, we'll be running our engines.
And then we'll have another hour where it's excess, another
hour where we're looking at the market or looking at our
engines.
And this is during the summertime, averages.
Wintertime, again, focus on the red for a minute.
The red wintertime load is what we call a camelback double
hop.
Comes up in the morning, lays down a little bit during the
day, comes back again in the evening when everybody goes
home.
Again, the wind production, the solar production, add those
together and it gives me this supply.
But again, a big supply when I don't need it, I'm selling
it to the market.
The time when I'm using the engines or buying from the
market and then again, excess supply.
So we flip back and forth all the time.
And this is just an average.
It can vary a lot by each day.
But this is one of the risks and what we look at as far as
buying renewable energy is why don't we buy more?
Well, because I'm buying at a fixed price.
And then we'll have to sell it back into the market
whenever it comes at whatever price the market is that time
.
And so that's the risk involved in what some people are
finding is when they go to sell it back into the market,
they contract at a price of, say, $23 a megawatt hour.
They're selling it back into the market at $18.
So how much loss can they afford to take during those hours
to offset the good times when it's the opposite way?
And that's what we have to look for, do our forward curves
and look at what the forward market is going to be like for
the energy.
So this is just one day actual forecast, the ERCOP forecast
.
Normal summertime load.
Here's the wind production, wind forecast they had, dotted
line, and the blue line, the saw line is where it actually
showed up.
That's just reemphasizing the same point of sometimes the
wind's harder to predict.
That's what they're finding.
So good benefit of solar, it's easier to predict.
But the wind is becoming more and more difficult.
They're finding the Electric Reliability Council of Texas
has even added a position that's all they do is weather
forecast, wind forecast now,
because it has such an impact on resources.
And that's what we've added to our staff, is people to do
the same forecast for us.
Because we're incorporating so much wind and solar into our
portfolio.
The dotted lines here represent forecast.
This is a wind forecast day ahead, two days.
So this was a day earlier this month.
So the white dotted line was forecast total, the solid bars
is what was producing.
These different colors are different flavors of wind.
Panhandle wind, this is yellow on the bottom.
The red is the coastal wind.
The blue is the West Texas wind.
On this day, all of them are underperforming, performing
less than what they'd forecast.
But panhandle wind is especially erratic.
As you can see, it went to the bottom.
And so those are the times we have to fill in, we have to
scramble and fill in with a different resource so that you
're not exposed.
When I talk about not exposed, here's what I'm talking
about not being exposed to.
When you have these different market occasions, these are
the prices that you can see because of the scale.
You can barely see the price for every 15 minute interval
because it's rocking along around $20 a megawatt hour.
But you can have transmission congestion or the wind
suddenly lay down or some other fossil fuel generator not
show up or they just missed the load forecast that day.
When those things happen, transmission congestion is what
happened here because they sent a negative signal telling
people in this area not to generate because it was costing
them to push money on the grid.
And then quickly turned around to a positive number.
Instead of costing $20 a megawatt hour, it cost $373 a meg
awatt hour.
Again, it rocks along and the next day it got almost to $
800 a megawatt hour.
So for our load, those kind of excursions could cost you $
100,000 pretty quick if you're not covered in some way.
That's why having the five minute start engines covers us
on that and balances out, protects us from our financial
risk.
The progress we're making on renewables, we're making it on
our wholesale portfolio by taking into consideration those
risks and how to balance them.
How to balance them against each other contracts and how to
balance them with our generation and making significant
progress on that.
But there's other things we can do.
Community solar has been a goal and something in our sites
that we've had our consideration for the last three years.
But again, as we progress towards a contractor or coming up
with a program, the market keeps changing and coming out
with something better.
But we are honing in on that now and intend to have an RFP
of a question proposal later this year.
We also intend to get details and have community
involvement as far as what's wanted and what would fit with
our community as far as a community solar project later
this year.
Storage, renewable, research and development, mainly this
is batteries in our area.
We've been talking to University of North Texas, University
of Texas at Dallas, SMU, Sandia, National Laboratories, all
these people.
And from the perspective of us furnishing them the site of
here's a site, here's the open land, here's the
interconnection, here's a place for you to stage your new
technology.
And they're all very excited about that.
What they're all doing is scrambling, looking for grant
money to help fund those projects.
And we've certainly left an open door for any of them to
come forward and bring their projects forward and partner
with them to do these kind of projects.
We've set a record on rooftop solar. We passed 100 system
mark a couple of months ago.
So far we've provided rebates for those systems of a
million two.
Demand response.
We've been talking to our top 200 customers, certainly
making it available to them.
Most of them as we look at the demand response programs
that are in the market, and we provide them an avenue to
take advantage of those.
The response we get back from those customers, from those
commercial large industrial customers is they don't want to
interrupt their load. They don't want to interrupt their
production to respond to the band.
They'd rather pay the bill and our products that value by
them that they won't continue their production.
And so we haven't had a response yet or had the right
customer to respond to demand response.
Energy efficiency. The cleanest megawatt hour is the one I
never have to produce.
And that's what we look for in energy efficiency. We have a
program that first is free in home audits.
Those free in home audits are not available in other
service areas and other service areas people have to pay
for those.
Matter of fact, there are businesses that come to Denton
wanting to sell those and are disappointed when they find
out that they can't sell them here because we already
offered that service for free.
Those audits produce results of telling people where they
need to improve their houses, and we provide rebates for
installation, thermostats, air conditioning change outs,
and solar systems.
And as far as I know, we're the only entity in the United
States that provides rebate for battery storage systems.
So we're ahead in that regard. We have our Green Sense
renewable rate, 168 customers on that account.
That first is renewable energy credits, and people pay for
the difference in that to achieve 100% renewable.
How do our rebates stack up against other utilities? Tied
at third behind American Electric Power, which is the
largest investor-owned utility in the United States.
They have an entity in North Texas, which is the old West
Texas Utilities, and the South Texas, the old Central Power
and Light.
And theirs are ahead of us other than that.
We're first talking about with battery systems because as I
said, we're the only ones that incentivize people to get a
battery.
The thing to note here is the number of cities, Bryan
College Station, Georgetown, Lubbock, Greenville, that no
longer offer solar incentives.
And it's not that those people are against solar, but it's
just you got to recognize the reasoning why you do rebates.
Why you do rebates is to motivate people to take an action
they would not otherwise take.
So for years on air conditioning systems, when we first
started doing rebates, that's where the main area we did
was getting people to take a step to go for a more
efficient air conditioning system.
You recognize efficiency of air conditioning systems by the
efficiency rating, which was when it first started was
eight.
And we incentivized people to go to 10. And then the market
switched and everybody was doing 10 and we incentivized
people to go to 12.
And then we changed our program to incentivize people to go
to 14, 16, so on.
So you quit paying incentives for people to do what they
were going to do anyway.
That's kind of where some people are with the solar
programs.
We have people that even though we run out of rebate money,
they go forward with their solar installations anyway.
And so it makes you question if people are going to go
forward with solar installations anyway, that's a policy
question we need to bring back is do we still need to do it
at the level we're doing it?
Certainly in light of some people cutting back on these
altogether.
And so that's one of the things we need to look at as far
as our solar program in the future.
Next steps.
We remain focused on increasing renewables. We understand
the direction and charge.
We anticipate being 88% renewable in 2019.
We are pursuing means of increasing renewable energy
through community solar, energy storage, demand response,
and looking for opportunities and avenues to do that.
If we go to 88%, going to the last pieces of that become
more expensive and harder to do, but we keep trying to get
closer to that.
Additional renewable request proposal is issued this month.
And we expect to return presentation for the end of the
year after we get those responses back.
And we'll come back to this board and into the council with
the result of those responses.
That's the state of the union on renewables. Any questions?
[INAUDIBLE]
So I see battery storage will certainly have a use in the
electrical grid. What Guam is using it for is mainly just
for a small percentage of their load to maintain frequency.
California is pushing for more battery storage. It'll make
sense there because they have a short window of peak load
that they're not covering with renewables that they can get
coverage for a couple hours, I would say, happening.
In Texas, where we have the 75 to 80 degree nights, the
amount of time you would have to charge the batteries and
to discharge, that technology isn't there yet to charge it
in a short period of time, usually over a long period of
time.
And that's where they've got to go.
Certainly there's going to be some places in the electrical
grid where they frequency response whenever frequency
responses when something sudden happens on the grid and you
need some kind of response to that to get it back up to
speed.
And that seems to be the first place that they'll be used.
Right now the first project in Texas was a battery system
that was put in in a place appropriately named No Trees out
in West Texas.
And that battery system, I believe, cycled out. It got cy
cled so much that it ordered batteries out in three to four
years.
And so you have large capital investment like we're making
in these engines, and you used it up in three to four years
and had to replace it.
And so that's the kind of research and development needs is
how do you utilize those batteries and make it where they
're economical.
Right now, physically can they be used? Yes. Is it
economical yet? No, because you put the batteries in, you
still have to buy the power to put in them.
You have some loss, and then you cycle enough time and it
wears them out.
And so to me, I see batteries where solar was 20 years ago.
I think it will evolve.
It may evolve quicker, but as far as evolving to the point
of being a complete replacement for the entire generation
grid, I don't see that happening overnight.
That's all right.
One other question as far as to the whole idea of when the
sun doesn't shine.
I know that when the sun doesn't shine, you still get a sun
burn. Does that same, I mean, how much power is taken in
when the sun doesn't shine?
There is still some, but just as you can see the normal
capacity for over a year for solar installation would be 30
% of what you would get out of fossil fuel generation at
that same capacity.
About 30%? Yeah.
So you're not going to get an average over a year. You're
just not going to get all the sun shining all the time.
Is there any research to try to increase the pull?
The technology for the solar panels is getting better and
more efficient and certainly has made great strides.
And what they've made the greatest stride on is just
getting cheaper and more efficient, but more on getting
them built cheaper as they increase volume.
And so that's what we're seeing is that they just keep
getting their prices down from where they were two years
ago.
I mean, like, they've dropped by, since 2010, they've
dropped over 100%.
So, I mean, it's just dropped, that's not the right
percentage, but anyway, it's dropped significantly since
then from $200 a megawatt hour down below.
Now we're seeing prices in the 30s and 40s.
Back on battery storage. I read there are a couple of
businesses out in California that installed that themselves
from an R&D perspective.
Is that something we can do here, maybe with the university
or something, just to configure it?
Well, we've provided a rebate for people to put in and we
've had some people take us up on that.
And are in the midst of doing of installing the battery
pack home battery pack systems.
Then also we've been in discussion with University of North
Texas, UTD and SMU and looking for grant money for them to
put in a facility to test that.
And we look at the city of Austin has done experiment with
one and now Guam is doing one and we'll certainly
investigate those.
Great.
Phil, we're talking about now being at 88% by 2019.
It's took quite a bit. I mean, it's pretty big jump from 70
to 88.
Not that much more of a jump to 100. I know the 2035 is the
stated target, I guess, if you will.
And I just want to, you know, what's the how much more of a
job or what's going to have to happen for it to get to 100?
Is it is it going to be new technologies such as battery
storage? Is that where we're going to be?
Because you certainly certainly all those technologies
could, you know, and that's the, you know, I'd like to
share what the board would like.
What we'd like to be able to do sit down and say, OK, we're
going to do this, this and this and we'll be in 100.
And what we don't know is what technology breakthroughs are
going to be, where the price is going to go next that will
drive us to that.
Right now, what's preventing us from going further is just
the market prices of renewable energy compared to the
market prices where I can sell that energy back into back
into when I don't need it.
You know, again, getting stuck in a situation where I got a
contract price for twenty dollars a megawatt hour. But I've
got all this excess.
I got five hundred thousand megawatt hours of energy that I
sell back into the market sometimes at a price that's not
desirable.
And so how to mitigate that risk, I think, is the next step
to drive to seeing higher.
But as far as driving us to the point where the about megaw
att hours we buy is equal or more than the megawatt hours we
use, we can get there.
I think pretty quickly. I mean, I think that's that's going
to happen.
But, you know, people are going to look at it and go, OK,
you're you say you're you're 100 percent renewable, but you
still have these gas fired engines.
How does that work? Well, you have to have them because it
doesn't come at the same time.
Well, even with a contract, you're going to pay for some
type of insurance policy, if you will, from whoever you're
buying it from.
Right. If you don't have that. And that's what those
engines provide.
Just one other thing on the you mentioned something about
the and I like the chart about the rebate program we have.
That's very popular here. I think it gets funded on October
1st.
And if you don't if you're not in by October 15th, you're
almost out.
It didn't run out quite that fast this year.
But I just again, that's that's a great chart.
And I get a lot of comments from folks that are now
thinking about, OK, I'm going to pull the trigger on solar
at my house.
And and what does push them over the top is being able some
of the some of the grants, some of the rebates both locally
and federal.
And so I'd encourage us to keep keep those. I don't want to
see those things go away.
I think that's probably I mean, it's not it's not a large
budget item, but it can be if you know, individually, if
you break it down, it is a large percentage and a great
incentive.
For for people to do it individually. So I like that.
Well, like I said, this this is a exciting time in the
business to see this transition and to see us go to a plan
that reduces emissions, reduces the use of gas, reduces.
It just makes it more sustainable as far as resources. And
we're just driving more towards that every day.
And like I said, driving towards that without a rate
increase.
And so that I think that is a significant difference
between us and and other cities that have gone towards this
is ours is doing it with with competitive rates.
And reliability and reliability.
Any other questions.
Thank you. Okay, thank you.
Okay, next work session item we have is item B. And that is
the to receive report, hold a discussion, give direction on
the DME fiscal year 2017, 2018.
Operating in capital budget and Chuck Springer is going to
lead us in that.
Randy.
I'll start off. I won't still Phil Stunder, but his his
favorite first slide in terms of the goals of DME rates,
reliability and renewables.
I think he's kind of covered some of those in his first
presentation in terms of the goals, maintaining competitive
rates.
While adding that reliability or capacity to service all
the customers, safety compliance with federal regulations,
the maintenance of infrastructure, kind of replacement and
growth and maximizing the use of renewable energy.
Some of the more detailed goals in the upcoming year. I won
't go through everything, but Phil's talked about executing
additional wind and solar agreements and plan for the
opening of the generation facility by the fall of 2018.
Some substation completions.
And look at, excuse me, filing a rate request with the PUC
for additional transmission cost revenues to the city.
In terms of accomplishments, paying off TMPA debt this
upcoming budget year and I'll talk about that will be the
last year of paying off that debt.
Some of the savings from the energy management operation.
As well as a reduction in October of the ECA rate and the
amount of savings to the rate payers.
Some other accomplishments. These are kind of construction
related accomplishments in terms of, just highlight a few
of them, the underground buried cable out at Southridge.
Whenever you're impacting individuals yards and houses, it
's always a challenging project.
And they came through that very successfully. Exceeded the
national average for system reliability.
Recently passed the NERC audit and some of the others.
In terms of the substations down at the bottom, you can see
the completion of three.
These are some of the other accomplishments. I won't go
over them individually.
But you can see down at the bottom when we were talking
about the 6.4 million additional transmission cost.
They recently received an additional 7.2.
And when I get to the budget, you can see where that line
item in terms of revenue is increasing.
The performance measures in terms of the electric utility,
it will just kind of highlight really reliability in terms
of customer service hour that the system was available.
Reducing the outage duration. Average number of interrupt
ions, reducing those.
Electrical outage due to vegetation or downed electrical
lines.
Percentage total electrical line is underground. Didn't
have a very high percentage.
And some of the new ones, percentage of renewable energy,
the bottom two, and the EMO performance.
There are some new performance measures that are proposed.
I'll leave that up for a second, see if there's any
questions on that one.
In switching to cost containment within the budget, these
are some of the proposals in the upcoming budget year.
They've had challenges filling their engineering vacancies.
So currently they have five. What they're proposing to do
is to simply contract out for those engineering services
instead of hiring in-house.
They did eliminate two management positions in this budget.
Also, like we've done for the other utilities, is
recognizing salary savings and budgeting for that.
It's about a percent and a half of total salaries and
benefits. So within their budget this year, it's 308,000.
Debt service is lower than projected. Some internally
developed software packages.
And implementation of the workforce management system to
move toward a paperless environment in terms of their work
order system.
In terms of process improvements, the mydme.com application
kind of through the customer service area.
And you can see how often that was used by April of 2017,
really to help customers become more aware of their usage,
hopefully reduce usage by that awareness. It saves the
customer funds, also helps reduce the demands on the system
.
Coordinating distribution system to automate power
restoration, hopefully shortening the duration of outages,
one of the performance measures.
And RDIF system and standardizing their PC models for the
department.
Some other process improvements. They worked along with
water and customer service in revamping the meter to
billing process.
They're using some temporary interns and programmers to
help supplement staff and they converted one EMO operator
position to an energy trading and risk management analyst
position.
And replacing their energy management trading system with a
more robust system to more efficiently use their capacity.
This is a chart that Phil has always shown historically,
which kind of red talks about the annual peak demand.
And then the blue is their kind of total sales. And you can
see their projections in terms of peak demand a little bit
lower.
And their total sales at least in 2016 a little bit lower.
Like the water utility, they're very dependent in terms of
weather. And our last couple of summers have been a little
rainier and a little cooler.
Unfortunately, I don't know what this one will be like. It
started out a little bit rainier, but we're all crossing
our fingers that we'll have another cool summer.
At some point that will turn around and we'll start to
having one of those summers where we count the days in a
row over 100.
In terms of growth factors, this is a table I think we
showed last year that shows the growth in customers.
I highlight a couple things. You can see the outage events
going down. You can see the significant increase in capital
projects.
And one of the things in terms of customers, some of the
large commercial customers when they come online, they don
't add to customer numbers.
In terms of total usage, that can be significant. And we've
had some growth in those over the last couple of years that
are some pretty large customers.
I'm not going to go over this part of the presentation. I
'll leave this up for a second in terms of the definitions.
But some of these you'll see within the budget.
So I'll just go through these if you have a question on one
of them. I think the board has seen this before.
Yes, Barbara. I'm sorry.
I have a question on your outages. Do you have any way of
tracing how many of those are caused by squirrels and
things that get into the line, which is a real problem in
that area?
Dang squirrels.
You've hit enemy number one.
Yes, squirrels are our top outage cause, followed by
lightning and equipment failure.
And we rest for each outage with the top cause and like I
say, squirrels and wildlife is number one.
We've just started using a new wildlife guard, put on
equipment and we're ordering those and putting those on in
the areas that are having the heaviest number of outages as
we speak to guard against that in the future.
But the other thing we're doing is a plan to start
replacing some of the over 50 year old infrastructure. Our
distribution system is in the same similar situation, not
the same but similar situation as the streets in that we're
needing to, it's time to replace some of those.
And we're working on how to do that.
And fortunately, a lot of those are in very crowded areas,
people's backyards and we'll need to have someone house
meeting to talk about how we do those in the future.
In terms of the capital plan for the five year capital plan
, you can see 368.8 million, 100.8 in the current fiscal
year.
I do want to stress again and I think it will show in a
future slide, but Denton's charter requires us to re-budget
any capital funds that are available that haven't been enc
umbered.
So when you're looking at this capital budget, some of
these funds are currently available.
It's not like it's an additional 100 million and you'll see
the debt issuance each year.
So a little bit of the capital program probably is overst
ated because of the charter requirement that we have to re-
budget those funds every year.
So you can look here historically seeing what the capital
program has been but the actual amount spent per year.
For example, in '15-'16, the capital budget when we re-bud
geted all the funds was about 105 million, but the actual
expenditures the end of the year were 65 million.
And this just gives, this table here, like for example in '
16-'17 shows a five year of 647.
This next table just shows it excluding the Denton Energy
Center in terms of the capital program.
This gives a breakdown of the capital program each year by
different type.
I've included in your packet and we've got another
PowerPoint if you would like to have more details on the
capital program.
We've included that as another exhibit, but this just kind
of breaks down the type of improvements by distribution and
by transmission.
And a reminder that transmission, that's where we receive
the cost recovery through the state system is on the
transmission.
And then you can see what's planned in terms of debt sales
over that period of time down on this bottom line here.
And that's where I kind of emphasize, you know, the $100
million program, some of that is carryover where it just
takes time to complete those projects.
So we kind of have to conservatively budget that to make
sure we're re-budgeting.
But if you look at the planned debt issuance of 208 million
versus the 368 million, that gives you a little bit of idea
of that carryover.
And this is kind of simply a schematic of the capital
program, the substations and transmissions versus some of
the other written out details of the program.
Just a couple of breakdowns, and I know Phil covered this
before in terms of electric meters by category being
strongly dominated by residential.
But then you look at the usage, kind of what strikes you
the most is the green area where you see here it's just a
quarter of 1%.
But you can see the usage is almost 40%.
I'll start getting into the details of the budget numbers.
What's proposed for the upcoming fiscal year is a 1%
decrease in rates, base rates to stay the same, a very
small adjustment to the transmission cost recovery factor.
This is really what the city pays to the other communities
around the state for part of the distribution system.
If you remember a couple of years ago, that part of the
rate was broken out along with ECA.
So you really have the base rate ECA and TCRF.
It's scheduled to go up a little bit in terms of what Dent
on will pay.
So we wanted to make that adjustment just to keep that rate
matching with what we pay.
But the ECA, we're proposing for the upcoming budget year
to decrease that by 1%.
Also want to highlight there may be additional ECA
reduction possible in the fall, kind of at the end of the
year when the Denton Energy Center comes online.
One of the big expenses that's built into this budget under
the city charter DME is required to do kind of a complete
management study on a 10 year rotation.
And that 10 year period is coming up in 17, 18.
So that 500,000 is built into the budget as an estimate of
that study.
And that's done by an external firm.
This just kind of goes over some of the definitions, base
rate, the transmission cost recovery factor, the ECA.
I'll go over the TMPA coverage return.
This is really where TMPA returns the access to their
customers.
That will be changing.
I'll go over that when I show you that slide and the
transmission cost of service.
That's really the revenue that the city receives as part of
that statewide transmission system.
So in terms of revenues that's proposed for 17, 18, you see
a slight decrease in base rate revenues.
That's really just based on the projections of usage.
The projections in the upcoming year are down a little bit
from this year's projections.
You can see the ECA revenues projected to be down a little
bit because of that reduction in the ECA rate.
And the coverage return, I mentioned, you can see in prior
years, it was about 7 to 8 million.
Because this 17, 18 is the last year of that debt for TMPA
and the operation of that facility, the coverage return
drops significantly.
And then you can see, I mentioned the revenue that comes in
to the city T-cost.
You can see the jump in 16, 17 and the proposed jump in 17,
18.
In terms of expenditures, purchase power and fuel,
transmission and personnel services.
And I did want to mention we've put a closed session item
if there's some questions specifically related to purchase
power and fuel costs within the budget.
There's a closed session if the committee has some
questions on that.
Operations and maintenance, the ROI, return on investment
and franchise fees that are paid to the city's general fund
,
debt service, the inner fund transfers, mainly the cost of
service from the general fund and from the technology
services fund.
And fixed assets is really a definition under accounting
rules.
So here's the proposed budget for 17, 18.
You can see a reduction in the purchase power and fuel.
And let me state this highlighted at the bottom, this does
not assume any sale of TMPA.
So it could be lower than that.
And the energy center, if it comes online a little bit
earlier than the end of the fiscal year, could also result
in a little bit lower than that.
So I think this is kind of a conservative assumption in
terms of that.
Personnel services are to stay about level.
Operation and maintenance goes up mainly because of the
energy center.
The ROI and franchise fees stays relatively level.
Debt service because of increased debt issuance.
And inner fund transfers stay relatively level.
Any questions on expenditures before I sneak on?
This is the five-year forecast.
So let me highlight a few things.
You can see here we do have a planned use of reserves of
about 7.5 million.
As we've done in the past, we've built up funds to be able
to pay down TMPA debt.
So this is really kind of the last planned use of reserves
relating to the TMPA debt.
And I've gone over the other revenues and expenditures.
And you can see projecting a 1% decrease.
In terms of future years, we're projecting decreases at
about 2% for the future years.
I do want to highlight one area or a couple areas.
You can see purchase power and fuel beginning in 2019 falls
significantly.
A lot of that is due to not paying TMPA debt or paying TMPA
.
And also kind of a transference with the energy center.
The cost related to the energy center are kind of internal
personnel cost and debt service cost
versus actually buying power out on the marketplace.
So you can see that while the purchase power and fuel goes
down, you can see debt service going up.
Revenues stay relatively steady.
Kind of the growth and customer base is offset by that
reduction in rates.
I do want to highlight one other kind of abnormality in
2019.
If you look at the debt service, you can see it increases,
but then you have a much larger jump in 2020.
The way the debt service was structured for the energy
center is we begin paying interest in 2019,
but principal and interest doesn't fully kick in until 2020
.
And you can see a line below debt service, debt defeasance
of 28.6 million.
Because of the ramping up of debt service, but our
reductions in purchase power and fuel,
we would have excess revenues that year, revenues to
expenditures of over 30 million.
And I think Phil had discussed when he gave the
presentation in March that that's kind of a policy decision
.
Would we like to in that one year pay off some debt or cash
fund capital?
What I've shown here is just one option that could be
considered.
I think it'll be a policy decision when that budget comes
around.
But this is really taking that excess and defeasing the
outstanding debt that was issued for the scrubber.
It was some refunding debt in 2010 that was issued.
That debt becomes currently callable in February of 2019.
So this 28.6 million, if we used it for that, it would
eliminate that debt.
And that saves us for about six years, about 5.3 million in
debt service.
So what's reflected here is the defeasance of debt and the
impact on our debt service.
It's about 5.3 million lower in each of those years.
And that's one of the reasons we would be able to have
those 2% decreases.
Chuck, I'm looking at the debt coverage ratio in '18.
At 119, is there a -- I know we've talked about benchmarks
on debt coverage before.
Is that -- I've always assumed it was one and a quarter.
Well, our prior revenue bond coverage requirement in order
to issue additional debt was one and a quarter.
But the new one we issued revenue bonds for the energy
center is 1.0 times coverage in order to issue additional
debt.
But you can see it kind of jumps back up the next year.
Really, you know, that's somewhat a reflection of drawdown
in reserves to pay TMBA debt.
We don't anticipate -- what we anticipate issuing is
certificates of obligation.
So we don't anticipate issuing revenue bonds in that.
We could still do that under that requirement.
Kind of the industry standard is one and a quarter or
higher.
A lot of utilities, you're looking at the, you know, 1.5 to
2 times coverage.
But you can see the coverage jumps back up.
And this coverage takes into account the certificates of
obligation issued for the utility as well as the revenue
bonds.
So it takes into account all of that.
Technically speaking, when you issue the revenue bonds, it
's just coverage on the revenue bonds.
But this really calculates coverage on all the outstanding
debt related to DME.
So in '19, if we don't defuse the debt, which I think we
should, that would be a different number on the debt
service coverage ratio.
It would be lower.
It's jumping up because we're defusing debt.
In '19, if we did not defuse, you're correct, we would have
more outstanding debt.
Now, you could -- policy decision, you could use that to
cash fund capital instead of issuing debt.
So that would have an impact on it too.
Probably the defusance has a stronger impact because it's
shorter.
It's just got about six years outstanding.
So it's shorter debt. So it would have more of an impact.
>> Yeah, I think that one of the main reasons it jumps in '
19 is because of the reduction in purchase power along with
interest only on the DEC debt.
>> Yeah, it's a lot of things.
>> Yeah.
Any other questions on this slide?
Okay.
This is just a comparison in terms of where our rates are
at currently versus others.
It's color coded.
So the municipalities are kind of in the red here to
compare some other municipalities.
DME is in the green and the commonly known electric
providers are in the purple.
But you can see where we're at and you can see TXU is in
the yellow, which is close up to us.
And Cosserve is in this light color.
Right here.
Here's TXU. Here's us.
I was trying to find the other.
There's Georgetown and some of the others.
Just a comparison.
Again, we try to show this comparison for all the utilities
, but as we begin to lower rates, we expect to move down on
this curve.
>> Check on that chart.
It would be interesting to see the other TMPA.
>> Folks.
>> I don't know if you can see on there, but it would be --
I hate to add one more color to this.
But if we just saw what -- compared to TPA, because we've
always looked at TMPA debt, retirement as one of the things
that is an influence on our rates.
I just think it would be interesting to see that.
>> We can maybe do that and cut out a few of the others.
A lot of these are on the 12-month rates on the open market
, but a lot of them are very small, so to speak.
With that, I'll open up to any more questions.
We've got a lot of additional backup in terms of all the
numbers and line items are within the packet.
And just so the board is aware, there's no action.
We'll come back next meeting, which is the 26th, for actual
consideration of budget recommendations for all four
utilities.
>> Okay.
Questions?
No?
>> I'll get going.
>> I have a question.
I'm just trying to find --
>> Okay.
Sorry.
>> It's okay.
I won't find it.
The engineering positions that you were decreasing, is that
-- again, because we couldn't recruit people, so we're
going out to consulting?
I mean, is it -- I know the engineering industry is pretty
difficult to recruit right now.
>> It's just difficult to keep up with the market.
We've made adjustments in our salary plans to where we
could recruit people and get people, but then we had a
problem retaining them.
And so we have retained some, and we'll still recruit some
openings, but we're going to try -- engineering consulting
firms seem to have a little more flexibility of what they
can do for people to get them, and we want to try that
route also.
>> Do you think we're paying a premium by going to a
consulting firm, or do you think really it's about the same
when you consider benefits?
>> Well, when you consider the benefits and you consider
the management time it's requiring to try to go capture
these people and get them and train them, then we'll see.
But I mean, I guess we want to try this, and then if we see
that it is more economical, see if we hire these people
ourselves, then we'll come back and make a business case
for doing that.
But at least try another method here because we're
certainly not getting the positions filled on a long-term
basis now.
>> Yeah.
Okay.
Thank you.
>> Okay.
Okay, Chuck, item C.
>> Time for the water budget.
>> Water budget.
Again, I'm not going to hit on everything.
I'll try to hit the highlights.
Feel free to stop me at any point.
Accomplishments.
And actually this is one of the reasons that the water
budget's coming to you now instead of a little bit earlier
because of the condition assessment of that 30-inch raw
pipeline that goes from Lake Louisville to the water
treatment plant.
That's been completed.
The final report's due in June, and we have what we think
is a pretty good estimate of the cost of repairs along that
line.
And you'll see that in the capital program.
Tested the water treatment plant after the improvements and
rehabilitated the ozone generators at the Lake Ray Roberts
plant.
In terms of goals for the upcoming year, completing design
for phase two plant upgrade, trying to improve the zebra
muscle control as we learn more as to what's effective in
that.
Communication system, skater protocol, the southwest
booster pump station line, and complete water line repl
acements as we work on Hickory Street.
Kind of the next section up of Hickory Street to stay ahead
of that reconstruction.
Performance measures.
You can see the current measures that are in place
proposing to add a couple new ones.
Main breaks per 100 miles of lines and unbilled water
volume.
What's our kind of water loss through the system from the
plants all the way until we build water volume.
You know, part of that is the kind of the meter replacement
program.
And as we continue to do that, how effective is the meter
replacement program in capturing that.
In terms of the cost containment strategies, eliminated
some FTEs for savings of a little under 50,000.
Again, like with the other funds, we budgeted salary
savings due to vacancies.
They went through the same process in terms of looking at
all of their individual line items from fiscal year '17 to
'18.
Reduced about 615,000.
You can see where those are areas.
Part of that I think is just kind of matching what we're
projecting in revenues in terms of more of an average year
versus an average year of expenditures.
You can imagine that the division managers are always
concerned about having enough capacity in their budget when
they have a real dry year.
But what we've tried to talk to them about is if we have a
real dry year, our revenues are going to be up, we'll come
back and amend the budget to make sure that you have the
capacity for that.
We've tried to do the same type of balancing in terms of
issuing debt when we need to for the CIP projects and also
leveling the revenue funded capital over a five year period
versus some of the peaks and valleys.
And all of these impacts together equate to about 2.5% in
rates.
Process improvements, I won't go over the process that we
did again with electric, water, and utilities customer
service.
Some of their future process improvements.
Capital project coordination.
The system distribution master plan.
Look at their work order system and reliability and just
continue to improve their asset management program.
Kind of some of the future risks in terms of water.
The raw water transmission line cost.
We talked about the one we've done an evaluation on after
those rehabilitations are complete.
It'll probably be time to do an evaluation on the other
parallel line from Lake Louisville.
The dam repair due to the flooding a couple years back.
We're working with the Army Corps of Engineers.
We've budgeted what they've given us in terms of our
proportion of the repairs on their current estimate.
But always when they get into a project like that, there's
some risk that those numbers may change.
Other transmission line replacement funding as we go
through the asset management program.
The age and condition of the Lake Louisville pump station.
Like the electric utility, some of the water utility major
assets are starting to age.
And then just a declining per capita water usage.
I know that's been a discussion within this budget in terms
of revenue projections.
They've really started to adjust down their projections of
per capita water usage beginning in about 2020.
So this budget does take into account that we think that
declining per capita water usage is permanent.
So we're starting to build that in beginning in 2020.
The assumptions, trying to maintain their coverage.
Annual revenue funded capital is based on depreciation.
So we've leveled it out, but we're still funding it at 100%
of replacement and 25% of plant infrastructure.
So still fully funding it, just kind of a little bit
different method.
Reserves, maintaining them within the reserve balance.
And kind of looking at the long term financial planning.
I'll pull up the numbers here so you can see what's being
proposed.
Again, there's a backup in your packet in terms of detail.
You can see for 2018 revenues and expenses at about 47.9
million.
You can see that's a little bit below the total expenses in
'17.
But you can see we had a drawdown of about 3.3 million in
use of reserves.
And that went to revenue funded capital.
You can see the revenue funded capital in '17 at 12.4.
Right here.
So when we talk about leveling out the revenue funded
capital, you can see leveling it out.
This jump in revenue funded capital was really due to that
one time refunding we did of revenue bonds, which released.
You can see about 7.5 million in one time money.
So we use that for revenue funded capital.
And part of this leveling out is we've built up some
balances in that revenue funded capital.
So that allows us to level that out and still have funding
as we need it.
In terms of projected rate increases, this is kind of the
zero rate increase forecast, the base forecast.
So you can see as we go out in the outer years, you start
seeing drawdowns or drawdowns in cash balance.
And you can see that last year in yellow, we kind of fall
below the target of 120 to 180 days.
So due to that, the recommended increase, again, with
option one, kind of the base reserves would be withdrawn
about 5 million.
Again, this is the five year projections.
Once you get out to those outer years, these are simply
projections.
What the committee will be recommending is just the one
year budget.
But we want to show the impacts in the future.
So what we've come up with is an option two, a five year
forecast that shows some 2% rate increases in future years.
And this is the proposed there are excuse me, there's 2%
rate increases in 2021 and 22.
We still have a little bit of a drawdown projected on the
working capital.
But it's maintained within that 120 to 180 days by the
third year.
We're relatively level in 2022.
And in terms of budget highlights, this just gives a little
bit of breakdown in detail on the revenues, residential and
commercial kind of by line item.
That cost of service, that's really where the customer
service is housed in the water utility.
But their costs are allocated out to the other utilities.
So that cost of service is transfer from the other
utilities back to the water for the customer service.
And you can see impact fee revenue utilization.
And I mentioned in 1617, we do project some use of reserves
, but again, from that one time refunding.
And here is highlights or the summary in terms of expenses.
You can see personnel services goes up slightly, but it's
really a little bit below the budget for 1617 due to those
minor FTE reductions.
And again, we projected some salary savings in that line
item.
Most of the others stay relatively steady to the estimate.
Our debt service increases based on the issuance this year.
And the transfer to capital projects, that last line, that
's that revenue funded capital.
Here's the five year capital plan.
And we've listed at the bottom.
I mentioned that existing certificates of obligation and
new.
Again, we have to re-budget estimating any funds that aren
't spent at the end of the fiscal year.
And you can see that revenue is the use of revenue funded
capital.
And part of that are balances that are already in that
revenue funded capital.
In that fund, it's a separate capital project fund.
I'll gladly call up any members of the water utility to
answer questions on their capital program.
So we're thinking the Lake Louisville dam repairs, 15
million.
That's an estimate.
Our share, we're going to.
I'm getting nods.
Nods, okay.
Okay, thank you.
Nods got there before I did.
Yeah.
9% of 150 million.
9% of 150?
Is it?
Okay.
Any other questions?
No?
This is just kind of a depiction in terms of where some of
those projects are at.
And color coded by the years of the projects.
I mentioned the improvements to the raw water transmission
line.
You see that down on the bottom.
And red.
And then you see a blue in 2022 where we're looking at the
other kind of parallel line to look at that one a few years
out and do those repairs.
Can you go back to the previous?
So which line is that then under?
Is that the transmission line?
The 12.2 million?
Yes.
Okay.
And then again the 10.6 on the other.
Okay.
Thank you.
And you can see on this one the debt issuance about 48.5
million.
Over that five year period.
I mean I have to say as someone coming into the movement
toward revenue funded capital when you look at their debt
service going forward stays relatively level.
And by doing that revenue funded capital it's really
starting to have a long term impact on what's necessary for
debt.
And I think over the long term it's really good for the
customers of Denton to be doing that.
Over the shorter term sometimes it's a little painful but
over the long term I think Denton's water rates will
continue to become more competitive.
And in terms of water rates here's where we compare.
And again we usually show this now and then after all of
the budgets are passed you can see here's the current rate
at residential kind of right in the middle.
A commercial for 50,000 gallons in the middle or slightly
below the middle and about the same place in terms of 200,
000 gallons.
With that I'll open it up to any questions and allow staff
to come up and answer any of the tough ones.
You said earlier that water use was going down and that we
're kind of okay it's just going to de-apply is that?
The usage per capita I think a lot of it is in terms of
just usage in residential or commercial when you think of
any appliance that you change out how much more efficient
use of water.
You think of the shower heads anytime the washing machines
those kind of things.
I think it's really just kind of due to efficiencies.
I mean there's local and national campaigns to also become
more efficient in terms of that.
You know I really think it's that I'll open it up to
anybody else on a national basis but we've kind of become
aware of that and within homes even when they build newer
homes they tend to be more energy efficient and more water
efficient.
The better toilets.
Oh yeah when you think of from 15 or 20 years ago those of
us who remember those days it's just amazing how much usage
I think yeah just in toilets it's probably a quarter of
what they used to use in water 15 years ago so just those
kind of things.
Irrigation systems that can detect its raining so don't go
on please.
Yeah.
Okay, any other questions.
Again, all of the budgets. The other two items are just for
questions I think I attached the presentations and the
number for numbers for solid waste and wastewater, but
those are just on for questions I'm not going to force you
into another couple of presentations on that.
But those are for questions and then we'll come back on the
26th for recommendations on all of the four budgets.
Okay.
Any questions on wastewater solid waste.
From previous.
No. Okay.
All right. Thank you, Chuck. Thank you. Appreciate it.
Sure.
Yeah.
Okay.
All right, that concludes the work session, and at this
time we have, we're going to go ahead rather than go right
into close.
We're going to go to the consent agenda.
The consent agenda.
There are six items.
Through F, is there any member who would like to excuse me,
I'm sorry, item number see any to point that out has been
pulled from the consent agenda by staff or it needs a
little more.
We'll see that next time.
At a future meeting so actually on the consent agenda.
I'm sorry.
Okay, good, good.
So item A, B, D, E, and F on the consent agenda, would
anybody any member like to see any of those pulled for
individual consideration.
Item B.
Okay.
Anyone else.
Hearing none. And is there a motion then to approve consent
agenda.
Items A, D, E, and F.
Motion and a second. Any discussion.
All in favor say aye.
Any opposed same sign.
Item B harbor.
We just haven't seen anything like this and since we were
in the.
Okay.
Morning.
Even Cox director of solid waste services.
This is under local agreements for a couple of different
things.
One is the ground mulch that you referenced, Ms. Russell.
That ground mulch is used in our composting operation.
It's my understanding that Irving has kind of a surplus
supply of this.
So at least from an initial stage we would be accepting
some of their ground mulch on an as needed basis.
If we have an excess of mulch, we would have the same.
They would have the same opportunity from us.
There's also some provisions in here for share sharing of
emergency equipment, the use of landfill.
If there's a natural disaster emergency, they can't get
used to the use of their landfill.
Likewise for us, we can also go to their side.
So that's kind of the nuts and bolts of it. If you have
specific questions, I'm happy to answer those.
That's sort of a mutual aid, but I was just, you know, how
did it come about?
Because we've not seen this enough.
I believe we have some mutual aid, at least some interlocal
agreements with like Cockroos Cove.
I'll check with staff to see if we have any additional if
you want to know that this one is a little bit unique
because it contains the ground mulch element.
We have a closed session item where we may be able to exp
ound on that a little bit.
But there is a specific use for that in our composting
operation and we have a real deficiency of it at our side.
Thank you very much.
Motion to approve. Is there a second?
Second.
Item B and a second from Susan.
Any discussion?
All in favor say aye.
Aye.
Any opposed? Same sign.
Thank you. Item B is approved.
Okay. So now I guess we can go back to closed session.
Or you want to finish the whole thing?
All right. Great.
Item number two then is consider approval of public utility
board meeting minutes of May 22nd, 2017.
Those have been distributed in advance.
Any comments, changes?
Hearing none, those stand approved as submitted.
And next we have item B which is the ACM updates.
Okay. Mario, are you going to do this one?
Well.
Maybe you ought to. You've met everybody I'm sure.
Yes, sir. We have.
Actually I would like to lean over to my finance director,
Chuck Springer, to be able to present the information about
the financial report.
I'm happy to answer any questions.
The second quarter financial update based on the estimates.
It's usually very close for the utilities to the budget.
Kind of for the water and electric fund, one of the
challenges is always there.
The big sales time is summertime so we're just kind of
still estimating what that's going to be.
We're kind of based on an average year.
But overall the utilities seem to be performing well.
And the general fund side, our sales tax has been very
strong this year.
So we're looking at a surplus in terms of the general fund.
But other than that, things seem to be going well.
Okay. Questions?
Chuck? No. Thank you, Chuck.
Okay. Next.
We have solid waste department.
Yes. In your backup material you should have a memorandum
to Tamario that basically outlines the full time equivalent
comparison, employee comparison for solid waste to
a number of similar municipal solid waste entities.
I believe you received similar reports from both the
electric department as well as the water and wastewater
departments.
And so this is a follow up to that end.
I apologize for the delay on this.
What we found is it's really not necessarily an apples to
apples comparison when we're comparing solid waste entities
.
And so what you'll have in that first table is a little bit
of a breakdown on services provided.
And then in the second table we tried to provide kind of
some analysis based on what we really see as the drivers
behind productivity for our FTE employees or for our solid
waste employees.
So I'll stand for any questions if you have any regarding
that data.
Questions?
Well, I think I need clarification.
It looks like Irving is the one that's most closely like us
for the types of services.
Yes.
We have more FTEs and that's in part because of the mining
that we're going to be doing.
Is that inaccurate?
In part, yes.
The mining operation on the back page or the second page,
we have about 10 FTEs dedicated to that operation right now
.
We are very unique.
One of the only MSWs in this area that is pursuing that
type of endeavor.
I'm not quite sure in terms of like Keep Denton Beautiful.
I don't believe Irving's has that component in there either
.
So there's a few differences there.
Some of those ancillary operations like Keep Denton
Beautiful, the mining, home chemical collection, those are
the ones that we really had a hard time finding a
comparison among other cities.
Okay.
All right.
Any other questions?
Thank you.
And finally, we have the new business matrix.
And we did the board a couple of updates on the coal plants
and the update on the transmission line installation off
loop 288.
And I believe Phil will be putting together informal staff
reports on those.
So we'll get those out to you sometime in the next week or
two.
Okay. Great.
Any members like to add anything to the matrix or anything
that's come up?
No.
Okay.
All right.
So that clears the consent and regular the regular meeting.
So we can.
Before we go into we close.
Does anybody need a break or?
No.
Just go keep going through it.
All right.
Refill.