Nov 13, 2017 Public Utilities Board on 2017-11-13 9:00 AM

public utility board meeting to order. We have a work session to begin this morning, a few items, so we'll dive right into that. First item in work session is to receive a report, hold a discussion, and give staff direction regarding the Denton Energy Center air permit review, which is being conducted by Black and Veatch Corporation. Brian, you want to make the introductions? Good morning. Brian Langley, Deputy City Manager. We had several questions about the air permit that was filed for the Denton Energy Center and through the City Council and also through the community, and so we hired Black and Veatch to conduct a study to look at that and to bring back their findings back to both the PUB and the City Council. So today they'll make that presentation to you, and tomorrow the same presentation to the City Council. We have Diane Fisher that's here with Black and Veatch, and so I'm going to ask her to go through the presentation and answer any questions that you may have. Diane. Good morning. It's great to be here in front of the PUB today. Again, my name is Diane Fisher. I'm Associate Vice President with Black and Veatch and the Project Director for this project. I have with me Michael Fisher, no relation, also Mike Rinkle. Michael Fisher is our Project Manager. Mike R inkle is our Environmental Engineer, and then Paul Lee is our Air Quality Control Engineer. So I want to tell you a little bit first about Black and Veatch so that you have a sense of who we are and why we're doing this work. Black and Veatch is a engineering consulting firm. We've been in business for about a hundred years. We celebrate our 100th anniversary in 2015, and we do mostly infrastructure projects. We do work in the power industry similar to the Denton Energy Project. We also work in the water and wastewater industry. We do oil and gas projects and telecommunications projects. We also do those type of projects both for the private industry and then also for the United States government. And we serve in a variety of roles. Sometimes we build projects like Denton Energy Center ourselves, and then other times like this we serve as owner's engineer where we're looking out for the interests of the city. So we have about 11,000 employees. We do about 7,000 different projects every year, and we work throughout the world on six continents. And so in this project like this, we are again looking at the needs of the sea and making sure that what's happening on this project makes sense for the city of Dent on. What I'm going to talk about today, or what we're going to talk about today again, is the project at hand. I want to tell you a little bit about the folks that are doing the work today and a little bit about me. My background, I've been at Black and Beach since 1992. I was 10 years old when I started, if you're doing that math. And most of my background is actually in air quality control, so I've done a lot of projects like this, although now I serve more in an oversight role. And so I graduated from Iowa State University with a degree in mechanical engineering. And so that's, it's been a fun time. I've enjoyed my time of Black and Beach. I'm first Michael Fisher, who's the project manager, as I said. He will be talking about the assignment that we did here for Black and Beach, and also giving you a summary of the conclusions that he came to, that the project team came to. Michael has 26 years of experience in the power industry. He's served in a variety of roles. He's been an engineering manager. He's been a project design mechanical engineer. He's done construction and startup in the industry. He's also served as an honors engineer, similar to this project. He has a mechanical engineering degree from the University of Tulsa, and so he will first start us out and kick it off. Then we'll turn it over to Mike Rinkle. Mike Rinkle has a bachelor's of science degree in chemical engineering and a master's degree in environmental engineer from the University of Nebraska, and he has 17 years of experience all in permitting, and he'll be talking about the permitting process that was done on this project. And then finally Paul Lee will finish us off, and he will talk about the emissions issues and also the air quality control associated with the Denton Energy Center. And Paul Lee has a chemical engineering degree from the University of Colorado at Boulder and has been in the power industry for 13 years. So we have a very experienced team who's going to talk, and with that I'm going to turn it over to Mike Rinkle to kick us off on the details of the work. Thank You Diane. It's a pleasure to be here this morning discussing this with the PUB. So as Diane has indicated, I'm Michael Fisher . I'm the project manager for this for the Denton Energy Center work. First thing I'm going to go over here is the the overview of the assignment and the conclusions, and after I give that overview then I'll turn it over to my team, and my team will get a little bit further in depth with what they with what the conclusions were from from this work. We were contracted as Black & Veatch was contracted to do an independent review of this of this project, Denton Energy Center. The Denton Energy Center is 12 reciprocating and internal combustion engine engines, commonly called rice, within the with that's an industry term, and it's used for the Denton Energy Center is used for peaking purposes. Wartzilla is the engine manufacturer for the Denton Energy Center, and Burns and McDonald is the engineering constructor. The surrounding community has concerns with the permit application and the permit process, and therefore Denton Municipal Electric retained Black & Veatch to perform an independent analysis of the permit process and the application. DME has requested that we compare the DEC to the Red Gate facility. Red Gate facility being another rice unit that's down in South Texas. So our conclusions from this from our work was that the the DEC permit application was filed correctly, and the the DEC permit is valid and filed in accordance with the EPA and the TCEQ requirements. A little bit about the DEC permit was that it was permitted as a peaking unit in an ozone non-attainment area, and it will get into some of the definitions a little bit further, you know what non-attainment and a peaking unit is. Well I'll have some of my colleagues address that. It was permitted as a minor source using standard permit designation, and the units are limited to a number of limited to run hours to 3,200 hours per year. That's out of a total of what would be considered 8760 would be the maximum run hours, but this this unit is permitted for a maximum of 3,200 run hours per year per unit. Our conclusions continued would be that Black and Beach has no concerns with the DEC project meeting the emissions limits in its permit. That the DEC has an enhanced admission control package and the emissions testing performed by a third-party agency using procedures approved by the EPA and TCEQ with witness by individuals from the TCEQ and Black and Beach. And finally it's it's an industry standard for the emissions performance to be backed by contractual guarantee from the engine manufacturer. With that I'll turn this over to Mike Rinkle who's our environmental engineer and our permitting specialist. Thanks Michael. Good morning everyone. Morning. My name is Mike Rinkle and as Michael said I'm the permitting specialist for this project on this team. Today I'm going to talk to you a little bit about the permitting process here in Texas. In Texas well actually the Clean Air Act is the program that regulates the emissions of pollutants into the atmosphere and EPA is the agency on the federal side that regulates or promulgates the Clean Air Act. Here within the state of Texas EPA has delegated that authority to the Texas Commission Commission of Environmental Quality or TCEQ. So TCEQ is the agency that has the authority to issue the permits under the Clean Air Act. Within the Texas Commission of Environmental Quality they've developed a hierarchy of how they want to maximize the use of their resources within their agency. Obviously there are a lot of industry here in the state of Texas and so to maximize the effective use of their resources they've developed this hierarchy of doing the permits within the state of Texas. And as you can see from this pyramid the top is the de minimis. That basically is the most easiest way of obtaining a permit in order to be able to construct your emission source. What that is is basically saying that there are very discernible emissions going to be polluted into the atmosphere and TCEQ has basically said they didn't want to waste the time of their resources to have to kind of go through and develop a permit for those types of sources. There are obviously restrictions that you have to meet in order to be the de minimis so you have to have very low emissions in order to be a de minimis source and so that's the de minimis source. The next category beyond that is again you're gonna have probably a little bit more emissions but you're still going to have less resources having to be spent from the TCEQ in order to get those types of sources and that's what they call the permit by rule. There are approximately around a hundred different types of facility types that the Texas Commission of Environment Quality has developed that if you meet certain emission limit requirements and you emit lower emissions you can go ahead and attain a construction permit via their mechanism of a permit by rule. The third mechanism to get a permit is what the Texas Commission of Equality calls is the standard permits. The standard permits are basically they've developed a lot of similar type of facilities within the state that have the similar type of emissions and as long as they're all are similar then they're gonna have the same type of permit requirements and so they've kind of categorized those into what they call the standard permits. The standard permits are basically types of facilities that can 't meet the de minimis or the permit by rule emission limits or requirements but they do not require to go through the more exhaustive type of the NSR, new source review permits and so then the new source permits are the ones where it's going to be taking a lot of time and effort by the Texas Commission of Environment Quality staff to review the application and then develop the permit and then as Michael Fisher mentioned earlier the DEC and Energy Center did get their permit through the mechanism of the standard permit whereas the Red Gate facility went through the new source review permit mechanism. This slide is similar to the last slide in that but this kind of goes through a general overview of how the Clean Air Act process really works. So you have what we call the new source review under the Clean Air Act and within the new source review you have two different kind of categories that you're going to be going through your permitting process. The first differentiator is you look at where the facility is located at. Is it located in a non-attainment area or an attainment area? What that basically means is the EPA has developed on national ambient air quality standards for several criteria air pollutants and that means that they've developed national ambient standards or limits that are in the atmosphere that areas must be able to obtain. If your area is above those limits then you're classified as a non-attainment area and as Michael mentioned before the city of Denton is in a ozone non-attainment area so it'd be classified as a non-attainment area so you're following that non-attainment area pathway within the new source review permitting process. Within each of those two different categories either attainment or non-attainment you look at whether or not your facility or your project is going to be classified as either a major or minor contributor to that air pollution and then that just basically then develops whether or not you go through major permitting or minor permitting. As discussed DEC went through the standard permits so they were all classified as minor permit action under the Texas Commission of Environmental Quality whereas the Red Gate facility went through the major route and they went through what we call the prevention of significant deterior ation permitting process. So that was the permitting process for the Denton Energy Center so with that I'm going to turn it over to Paul Lee. Good morning so I think to start off as important to recap some of the things that Mike and Michael have referred to although the Denton Energy Center and Red Gate are utilizing similar engines the intent of the two facilities are very different and it's very important to note that Red Gate is a base load plant it runs all the time 8,760 hours is the number of hours in a year. The intent of Denton Energy Center though is a peaking facility it'll be running limited to 3,200 hours per year so when energy demand is high such as summer times when everyone's using their air conditioners that's when Denton Energy Center could be turned on. Therefore the DEC or Denton Energy Center could apply for a standard permit whereas Red Gate being a base load facility had to go through PSD review. Also in addition to being similar engines the control equipment both facilities are the same. Selective catalytic lid of reduction also commonly known as an SCR is used to reduce NOx emissions with the injection of a reagent ammonia in both cases and also both facilities will have an oxidation catalyst which I think I accidentally hit a button. Oxidation catalyst is used to reduce the CO and VOC emissions as well as any ammonia slip that could go past the SCR. However the emission rates are different at both facilities. As you can see from this table the things that are in bold are the higher emissions rates between the two facilities. Emission rates are provided by the equipment manufacturer in this case with Rosilla to help develop the air permit within the constraints of all the regulations TCAQ, Federal EPA and as you can see the CO emissions are slightly lower but the NOx are significantly lower as well as the SO2 and the VOCs. So the question is why? If we have two similar engines at both facilities and they're both utilizing the same emissions controls and how is one facility such lower in NOx CO and VOC emissions? Well similar to how cars are not all the same, not all SCRs and oxidation catalysts are made equal. Some parts of the country have very very stringent and tight regulations such as Southern California for example where pollution is very very high. For this purpose Rosilla has created an enhanced emissions package and the Denton Energy Center is equipped with this same type of package so therefore the SCR is just a higher performing SCR, the catalysts as well as the oxidation catalyst. It's also important to note that the emission guarantees are a make right guarantee. There is contractually no way that they can buy themselves out of these guarantees. They are responsible and liable to to use all the financial funds as well as the manpower to make these emission limits met. So now we have all that covered then how do you demonstrate that emission limits are met? So the Federal Environmental Protection Agency, the EPA, has developed a series of test methods that is used throughout the industry and those will be used once the plant is built and constructed and starting up to demonstrate what emissions are being produced. The engines will be at full load in order to challenge the engines at most maximum potential for emissions and then we will hire a third party contractor to execute the test. The third party contractors specialize in these tests. They have a certification as well so I'll call the qualified stack testing individual. So they're certified, they're third party, there's no collusion or fake news with what they do. They will perform a test and prior to a test 30 to 60 days before the test occur will notify TCEQ. They'll have every opportunity to come to the testing facility and make sure the apparatus is set up correctly, that there's no operating errors that it's occurring and they often do come, not always, but they at least have the opportunity to come. Regardless of whether or not they witness the test, the test report will be developed and submitted to them. They 'll have to review it and make sure the emission limits are met and then they could issue an operating permit. Only then can the facility actually operate. So emission limits should be met regardless when this facility is operating. So with that, that was a presentation and I'd like to open up for questions. Questions? [inaudible] These are from the permanent application. Yes. So these figures, they are all within the minor source permit and specifications for a non -attainment zone. Deb, would you mind? I'm sorry. No, thank you. So these figures, which are all fit within the requirements for a minor source permit in our non-attainment zone, these were taken from the paperwork of the manufacturer of Wurzala. This is what they said on paper. Yes, so these are taken from the apartment and these are provided from the OEM, in this case Wurzala. Yeah , so just to understand where you guys fit in, so Black and Veatch is not, you're not standing behind these and saying we guarantee that when they turn on the plant, these, you know, it will test exactly like this. What you're saying is I understand it is we are confident that if it doesn't end up testing like this, that Wurzala is responsible for fixing the problem. Is that correct? Yeah, correct. We are not standing by Wurzala hand-in-hand saying that the make-right guarantees are going to be met. There's just a review of the permit itself. Yes. So these were provided from the OEM or Wurzala and we're just evaluating how they submitted and how the permit was done and were executed. Yes. In our opinion it was done correctly. Yeah, and the permit is just a matter of, and correct me if I'm wrong, when the permit, the air permit is submitted to TCEQ, TCEQ as I understand it, they look at the paperwork and they make sure that the numbers are where they're supposed to be and they say kind of like you're doing, okay, but if something goes wrong then it's on you. Is that correct? By you I mean, you know, the, whoever's submitting the permit. Yeah, so the permit is approved by TCEQ and if the initial limits aren't met, I had to go back to that make-right guarantee aspect. Yeah. That the facility won't get an operating permit if the initial limits aren't met. Exactly. So therefore Wurzala has to meet these guarantees. So if we get to this, to start up with the third-party contractors that's doing the EPA test methods, if CEO comes out higher in a pounds per hour basis than the standard permit allows, then they need to fix that oxidation catalyst. Whether that means purchase the whole brand new one. There are many options. Exactly, there's many options, but they are responsible for the labor, the parts, and as well as the lost money. Yeah, and so that's why you're not concerned because you know if something goes wrong, is that correct? Correct. Wurzala will take care of it. Exactly, in our experience make-right guarantees are very, very sensitive as you can imagine and they're typically met. My experience, they're always met. Yeah, end up being met. They end up being met somehow. Exactly. Brendan, I think you had a question. Yeah, some of what y'all just discussed confused me a little bit. So in the application for the permit, Wurzala submitted their performance emissions, is that what you're saying? You mentioned OEM stats. So these are the stats that the engines are going to perform at or they're the stats for what's allowable by the permit? Why don't you put a mic here a little bit. Because the engines perform at something and the permit should be separate than what the engines actually perform at, right? So when an application is developed, the the client will go to the OEM or the manufacturer of the engine and they will get what they call these guaranteed values. And so the manufacturer will provide a guaranteed value of we can meet those levels of emissions. Obviously since there will be a contractual obligation to meet those, the manufacturer will want to be able to operate at a level that is lower than that. They don't want to be right at that level that they 're going to be operating. And so they give these contractual values that are used for the application when you're developing the permit and say we will not go above these levels. And so those are the levels that will get into the permit and the permit basically says you shall not emit above these levels . Okay, so then the the TCEQ won't allow us to operate these engines at any higher than what you've got published right here on this slide. That's not fact ually correct. Okay. These these numbers are what was used to develop the application. So then the TCEQ or Texas Commission of Environmental Quality, when they write their permit, if you look at the actual permit, I believe that the permit limits are in what they are in an emission unit called pounds per hour. And so you take these numbers and you would develop a pound per hour emission rate. And so in your actual permit, the actual permitted limit is on a pound per hour basis. So you cannot emit above that number. Are any of those numbers, if you convert them into these numbers, greater than these numbers? They are equal. Okay, thank you. Susan, do you have a question? I didn't and I think there was a slide in the beginning that this is the normal utility practice. What Denton Energy Center did is normal standard in getting going to the standard permit versus the NSR. Correct. The way the project the project's goals were developed by the city. And so you take those project goals and it defines the project. And so once the project is defined, you then go look at the mechanism within the TCEQ realm of requirements and they fit into the standard permit realm. And it's really because we were not a baseload. We are a peaking facility. Is that correct or is that not correct? That is correct. When you're comparing to Red Gate. Okay. That is correct. Thank you. Can you speak to the process if the plant after it's been issued its operating permit, what occurs if it starts to operate outside of its emissions limits? Like if we're in non-compliance with our permit? So they so the city then would then they are required to submit semi-annual and annual reports to the Texas Commission of Environment and Quality. Okay. And in those reports they will state their compliance. If they are out of compliance they have to notify the Texas Commission of Environment and Quality that they are out of compliance. The TCEQ then will determine the severity of that non-compliance and they will make a determination whether or not to issue what they call a notice of violation. But that's all done within the Texas Commission of Environment and Quality. Okay. And it's all and all the testing is it's a self-assessment type system, self-assessed and self-reported then, right? Like all the emissions testings that's all done by our personnel or people we contract. The testing is usually done by a third-party testing agency. Similar to the initial testing. Correct. Okay. Thank you. They need to be certified testers to perform that. Yes. And it would be similar to an independent audit of financial records only on the environment side. Correct. Thank you. Questions? Charlie? Questions? Okay. Thank you. So I understand that the Redgate plant is a baseload plant and the deck is a peaking plant so they have different purposes which means that the Redgate runs more hours per year. But when testing occurs is the use of the plant factored into the emissions testing at all? As I understand it, it's simply a matter of what emissions are in the air you know and then calculations are made based on that. No, when the third party company comes out to do the performance testing they need to be at certain limits of operation within their realm. So I believe it's 90% above 90% of their capacity that they need to be at when they perform the testing. Yes, it's at the moment they perform the testing, correct? Correct. Yes, so just to be clear so that people understand and then that the public understands that when emissions testing is happening they're not thinking oh well this is a lot for this moment but they're only gonna run it X number of hours per year, right? It's simply looking at the emissions at that moment. Yes, under the requirements of the law that is how you perform the testing. Yes, thank you. I understand that I just wanted to because I think there's a little confusion in the public about that and just wanted to clarify. Thank you very much. Any other questions? No? Thank you. Thank you. Appreciate it. Thank you very much. Okay next in the work session. Can we discuss this amongst ourselves? Sure. Yeah, I was I don't know if anybody else had but I was wondering if we could have a discussion at some point about if this does end up happening dot the emissions at testing exceed the permit what our options might be and you know of course we don't if that ends up happening we don't need to decide till that moment comes but in the sense of you know because it's good to be prepared for these things. I would would appreciate a discussion at some point before testing about you know looking at different hypothetical scenarios. I don't know if that would have to be a closed session if you know be if it was a legal issue and we had questions about liability but I would like you know to know ahead of time what our options might be. Do you mean the testing before we get an operating permit or do you mean after we have an operating permit and we're and we'll get meeting. Before the initial before the testing when they're when they're finished and you know to see if they if they grant the permit the initial right when they turn it on before that moment. I would think and I have to have and you're correct it may need to go discuss because it's going to go back to the contract with the engine manufacturer but if there's a make right clause in the contract I'm assuming that would kick in at that point. Oh of course but I mean you know in the sense of I would hope that we don't just leave it up to that if that were to happen that we wouldn't just leave it up to Wurzilla to decide how they're going to fix the problem I would hope that Wurzilla that we would be able to work with them and we would have options. The I guess the short answer to your question is we would obviously enforce the make good provision we would have independent verification that they 've made good on their on their promise in order to clear that contractual hurdle but we would not we would not sign off on the make good provision until independent experts have verified that they are in compliance. So we would if should that happen we'll enforce it immediately. Oh yeah yeah but in terms of the different ways I mean there are a number of different ways of getting in compliance you can have them you know they could keep tweaking the emissions controls for years and years and years you know while the plant remains non-operational and the assets depreciate or you know we could we could tell that we could ask them to say you know take it to take away some of take back some of the engines I mean to what I would hope that we meaning not just PUB but the City you know council would would have some say in the methods by which those emissions requirements are met. I think those those methods have already been prescribed in the contract and it's pretty simple they're they're either going to have to comply or you know we can certainly they would be legal for not not comp lying with the terms of the contract but it's a fairly simple thing I mean if we're gonna there's gonna be a cure provision in the contract which there is if the if the engines don't initially perform as necessary we'll have to provide them notice which they don't want you know that's and I think the gentleman from Black and Beech sort of alert you know alluded to that is it is definitely their best interest to comply immediately and we're not going to be in a position where we can cancel a contract or necessary scale anything back they're going to be allowed to to cure right away if they get to a point in theory where they can't cure then within that brings a whole nother set of variables in the ear that you're discussing but they're gonna be given a time period that's well defined the contract to comply immediately okay and it's not and we 're not gonna have much say in terms of how they do it they're just simply going to have to make that technology work they've guaranteed us it will I see I see and this is all in the non redacted contract because I've only seen and because PUP has only seen the redacted contract we haven't been allowed to see the unredacted contract so the emissions figures are taken out of that I assume that these they're identical that's what I assume right so they are contract they have contractually bound themselves to meet those standards and obviously that's where our rights come in if they can't then the whole contract is obviously called into question but they will be given a cure period to come into compliance okay and is that period prescribed in the in the contract and again because I've only seen we've only seen the redacted version I need to defer to our legal counsel on that I'm sure it is I just cannot remember it that period would be okay I wanted to know if anybody knew if the contract allowed for changing of the the permit if if for some reason the testing is out of compliance and they try to get it in compliance if we can change the permit to have greater emissions as you know I think we're kind of getting off into discussing specifics of the contract and I don't know that okay well I mean I thought I think that I take it just discuss the image yeah I take it that there's a right there's a right to cure in the contract and there's certain things we can do sure within our rights to do that I also go back to comment mr. Lee made I believe about the initial attainment of I believe you you gave a when the percentage but it was basically how many times on these initial permits the manufacturers did I not hear that right that there was a certain amount of time I'm not exactly sure what coming in front of you when I said that in my experience the the OEMs in this case where Zilla do meet the emission limits I don't want to put you before you're guaranteeing it but I just your experience has been exactly my experience is that the OEMs do meet emission limits they are such a sensitive issue and they will not back up things that they have to meet because there is no financial buyout some other performance guarantees if they don't meet those there are agreed upon financial terms where they could say okay we didn't meet this sorry here's a million dollars this case they cannot and it can therefore incur millions it's got to work yeah so my experience yes but I definitely don't know sure I don't I don't want to put you on the spot it would guarantee anything I want to follow up and what I and correct me Brendan if I'm putting words in your what you were trying to find out though we cannot change that permit at this point in time we have to meet the permit that we've submitted yes as I understand yes so we can't change that if testing says we didn't meet it we can't change that at this point great yes live up with that yes and I had not seen you guys contract so I don't know the answer to that question you're asking but yes miss Parker I can do believe that and just to go back to what you were saying sorry this kind of repetitive it just but then but just to make clear when you said that that they always that you know the manufacturers always follow through because they have a stake in it you 're not saying that they never fail the initial testing you're saying that they always will do whatever it takes to make it comply eventually well I should in my experience it's always been the first time but um regardless I think if we were to take a survey of hundreds more people like me that to get a better survey of all of the experiences out there yes yeah there's documentation of failing testing and tweaking and tweaking and tweaking and tweaking forever correct forever is not a very long you're talking you're talking worst-case scenario and I mean the sky's not gonna fall in I mean these these guys know what they're doing and we have rights under the contract to make it work to meet our permit standards and we sit here and debate all day about what if what if what if what if you know it's either gonna work it 's not gonna work so I want to add a little bit to what Paul because my experience both Paul and I have worked together for many years and my experience is also air quality control yes you can find examples out there where people have had to tweak and tweak and tweak they are rare very very rare most plants pass on their first try that is that is common for the exact reason that Paul said in that they will fail on something else before they fail on air quality that's just the reality of the situation to your question of what do we do if in the unlikely event that this is the plant that is in that rare situation how do you come up with a plan to deal with that situation the the first thing you have to look at is why is it failing and so to come up with a action plan in advance of how to deal with that that's it's it's it's hard to do that but what what my recommendation to you would be is that's frankly our role as owner's engineer to help you with that in addition to this assignment we're serving as your owner 's engineer so how we would handle those situations and how we have in the past is to look at the cause step through and figure out is it the ammonia system is it not tracking emissions properly is it something in that that's causing problem is the catalyst not functioning properly is something wrong with the catalyst is the engine not properly inhibiting oxidation in some way and that's what's causing the the NOx to be a problem is the fuel you're using not in accordance to spec so we'd have to go through a step-by-step diagnostic process to figure out what the cause is and so that that was that would be the activity that we would go through and and we couldn't do that until the situation actually I see so so you're saying so if I understand correctly and this might involve me kind of retracting my or at least tweaking you know my suggestion about having a work session about possible scenarios that because there are so many different possible if something does go wrong there are so many different ways it could go wrong but you really would not know what our options that we couldn't even say well it would have to be one of these five options right we really don't know right so the action plan would be immediately get together in a mitigation group to assess the situation and that's your job that that's what we would do as your owners engineer okay yeah thank you very much and the I don't know if you followed the there's a similar work Silla plant in Humboldt California that failed emissions initial testing recently and they tweaked and tweaked and tweaked and tweaked and twe aked and yeah that so I have a sense and you know anybody can look that up and see to see what kind of difficult complex work is involved not for the layperson thank you very much uh-huh okay thank you thank you any other questions comments okay any direction I mean I think direction the staff I think we're pretty much we've got our we're online we'll just we'll see when we when we get there I think we've got got things lined up to make sure it tests and and black and beach is working on our behalf that's correct yes yes we have to put our faith in them and they're a good firm yeah okay all right moving on then actually the of the five items for work session two were with consultants and three are with staff so what I'd like to do is move in the work session if it's okay item C next which is to receive a report hold a discussion and give staff direction regarding a review of this solid waste department's procedures and internal controls by Weaver and Tidwell LLP good morning PV my name is Ethan Cox I'm the director of solid waste we have John Lawson which is a partner with We aver and Tidwell here with us this morning just a little bit of brief introduction about how we arrived at this point so over the last several months as many of you are aware we've presented or brought forth some projects agreements things of that nature in solid waste that we found some concerns with following a recent change in management a lot of those were really related to system of controls standardized procedures a lot of that's related to project management as well as contract management and so earlier in the fall the city of Denton contracted with Weaver and Tidwell to come out and perform a review of our processes controls resource utilization things of that nature in the solid waste department so what we have for you today John Lawson is here he'll go through Weaver's findings at the conclusion of his presentation I 'll be back to the podium and I'll walk through what our management responses are our plan of action for all of those findings so with that I'll turn it over to John. Good morning everyone as Ethan mentioned my name is John Lawson I'm a partner in the risk advisory group at Weaver and just to kind of let you know what that means we look at process so we review process internal control similar to what an internal audit function might do so what we've what we worked through was not digging into any one specific issue I know y'all have had conversations much as Ethan mentioned about some specific issues that have happened but to really try to understand the process the internal procedures behind some you know just general standardized operating procedures and certain controls that you would expect to see or would like to see that help make sure those procedures are executed the appropriate way every time they happen so you know we started off by having a you know we started off just in meetings with with Ethan and different members of the management team trying to figure out well where are we going to focus this project and and through those conversations and talking about just some of the some of the challenges and and in the middle of the transition wanted to evaluate some of the processes we identified six areas that we were going to focus on in our review so the first one which we kind of came up with these titles landfill commodity sales and cash collections so really what this is is you know there's you come into the landfill you go through a scale house there's procedures to to to weigh a vehicle to process that transaction you have vehicles coming in and going out and how do we make sure that that those what are the what are the processes and the controls to make sure that we that we record every transaction that we weigh every vehicle and we also included did a little bit of looking at where there's commodity specifically just metals where there might be a market for selling these out of the landfill how do we do that and what are the controls that we use to make sure that those are done properly when that happens there was as Ian as he as he said that Ethan mentioned a lot of focus on just project management initi ating a project documenting the person the the protocol for a project what is the the preparation the review the documentation evaluation of initiating a project within the landfill and that could be really implementing a new business initiative you know changing up processes construction projects that might happen on the landfill a lot of this could take a lot of different avenues but what you what we would what you want to see is that there's some protocols and some procedures in place as we work up to approving a project and then managing on a go-forward so we tried to get deep into how this happens at the landfill and then associated with that a lot of times you'll have contracts so we looked at you know contract management recording and tracking within the landfill as well as part of this process purchase requisition this is not the centralized procurement function of the city we were focused at at the landfill so kind of running up to before you would do procure of you know formal procurement what are the procedures internally to make sure that this is really something we need to purchase that the sears not you know maybe another way that we could obtain these materials and the authorization and documentation that happens within within the landfill for purchasing budget preparation you know we talked about we looked at the process internally within the landfill to develop their budget kind of up to the point where it's turned over to finance and then and then consolidated into the budget with the city it was really the the specific procedures within solid ways to develop the budget for their department and and and kind of monitor it on a go-forward and then we looked at fixed asset inventory and tracking and really what that was you know there's a lot of equipment and assets out at the landfill and you know having an inventory of those and tracking and utilization of those we tried to understand how that's done out at the landfill and then the last one is contract labor and overtime there's a lot of contract labor at the landfill and we looked at the process for engaging that labor monitoring what they do approving it as well as approval and tracking of overtime for the for the full-time staff at the landfill so you know it was a lot of different processes and pieces that we looked at and you know what just to kind of be able to give you a little bit more idea of what we actually did so we spent a lot of time on site at the landfill and and with Ethan's team from the management team to operations supervisors to the to the folks working in the scale house we we walked all around that place we had meetings with just about everybody I think and really we wanted to understand how these processes occur we wanted that to talk to people about how they're done we wanted to observe them being performed we wanted to see when I have to log into a system to enter a transaction how does that actually happen and what does the screen look like that where I record that so we we we were at the individuals workspace trying to observe and understand how these activities occur and one of the key things that we look for our internal control so as we were preparing for our walkthroughs or our interviews we would say well what are the what are the controls the activities we would expect to see that kind of give us ourselves and my team a benchmark of you know if I'm gonna go if we're gonna do let's just take purchasing for example if there's if we're gonna purchase something we'd expect to see that there's a delegation of authority there are certain levels of approval and those are documented budgeting you would expect that there's identification of individuals that own certain parts of the budget that they 've worked through that and there's approval of that we look at system controls so we did some evaluation of access who has what what are what are the access privileges within these systems that they use the landfill and what does that allow people to do so we kind of trying to develop some expected controls that we could use as a benchmark to when we went out into the field to evaluate the activities that are actually happening and so we use that to map when we looked for these controls and didn't have to match exactly what what we thought we'd see we were looking for the objective of that control being achieved and so we mapped those out and where where we saw a gap we we provided we had an observation we provided what we call points for consideration or recommendations to management if we didn't see a control where we thought we would see one that resulted in a recommendation or if we saw control or a step in the process that we thought could be enhanced made more efficient that resulted in a recommendation as well so all of our recommendations here are risk rated as high moderate or low which is a judgmental risk rating you know it really something that's high would be if there was not a control somewhere where we thought there needed to be one if we thought there were gaps in the process you know or lack of a formal process which we'll see some of the high-risk findings specifically where most of them are in the project and contract initiation and monitoring procedures formalization of process so that people know what to do and how to do it that that those types of things we would say you know that's a higher risk finding there's a likelihood that you could have mistakes or errors without having some kind of formal procedure there or controls to make sure that it's done the way the way you expect it to be every time moderate would be you know maybe there's a control but it's not really designed to fully address what it's supposed to or there's some kind of segregation of duties issue maybe you've got people that have too many steps in the process and we need to break that up lower risk findings tend to be more operational this is something we could do to maybe gain efficiency or better utilize some of our systems or technology so what we found is you know across these six areas there we found controls in all of them even in some of the areas where there's not what I would say a formal process talking to different people there there are controls and things that they would do that make sure you know these some some level of procedure or review occurs may not be standardized but we did identify controls across all of these areas and for the most part we found some recommendations in all of these areas as well I was planning to focus on well these 10 items where what we would that we risk rated as high and kind of summarize these these kind of more significant findings for you guys so the first one and really the first two here relate to the landfill sales and commodity sales process the first one is we're recommending a cost of service study and and really what that is if when there's rates that are established out to landfill if you come in and you you go through the scale house your vehicle will be weighed you'll pay a rate to to dispose of your waste there are multiple rates though you know let's let me let me give an example of say a refrigerator if I want to dispose of a refrigerator at the landfill I believe it's $25 to drop it off up I think that's the rate but but there's a defined rate to dispose of a refrigerator well how did we come up with that rate is what we would ask you know what is the what are the steps that we go through to establish that rate does it cover our costs to receive store process properly dispose of a refrigerator well I don't personally know the answer to that question but but having some kind of a study that supports the rates that we use is what we're recommending so there's a lot of different rates they're established in the paradigm system but having some kind of analysis of of what those rates are and and how they cover the landfills costs and how we've determined that that's the appropriate rate is the basis of this recommendation the second one is enhanced system access controls within the paradigm application so at the scale house and within this process of you know processing transactions at the landfill people coming in using the landfill paying their fees recording those fees in the system there's there's there's there's an application that's used called paradigm and one of the things that we look at or really anytime you're considering internal control is there are the manual steps that happen so this is what I do as a person working in this process I come I use the system I talk to the customer the things that I would do but there's also what you have the ability to do within the system and it might not be part of your normal process but access allows folks sometimes to do more than what they should and just because they don't necessarily know that or do it on a regular basis doesn't mean we don't want to restrict access it's a system control it's a preventive control that we can do so specifically you know we noticed that the folks that can process transactions in the scale house also have the ability to change the rates and access within the system when we started digging a little bit deeper really just needs a needs some fine-tuning to make sure that people can't circumvent some of the good controls we do have in that process by by using some of their their access even though it's not necessarily part of what they would normally do and in in their part of the process so the next five so three through seven really all have to do with project management and contract management and not not to rehash and I want to want to clarify you know we didn't look at any of the specific issues that have happened over you know mining or or the CNG facility that I know y'all have had a lot of conversation about over recent months but some of the some of the back office processes for those we did we did talk about with with the solid waste team and and really formally defining what constitutes a project is the first step here so having you want to get to having procedure and some standard operating procedure and control but it really starts with what having a definition of when that that procedure would would be required so you know it would be new business initiatives capital projects on the landfill we've given some recommendations to management of when this would specifically apply but it 's really having a documented clear definition of what a project is so they can be communicated to the team at the landfill when we have an issues like this or initiatives like this we've got a protocol that kicks in and so defining that formally is really our first recommendation and a lot of the following ones kind of key off of this first one initially so another another recommendation is having number five is I'm sorry number four a business case analysis which we've provided some really specific kind of detailed steps steps to Ethan and the team on how to start to initiate this but it having having a staged approach so once once we we determine okay we've got a project based on our definition of what a project is we're going to go through a protocol of what are what is the purpose of this project why are we doing it is it the result you know is it is it are we trying to be innovative and we think we can you know we think this could be a revenue source or this could reduce our cost or is this something that we need to do because there 's a new TCEQ regulation and we need to comply with it it could take a lot of different things but what's the driver for us wanting to do this project and what are what's the desired outcome documenting all this out formally so you can have you know conversations within all of the kind of key stakeholders in the team is really kind of a first step and then say okay well here's kind of an initial documentation and expectation of what we want to achieve let's start with that conversation and document it and then we start to move forward into more more detailed parts of the plan so what are the what are the what are the risks or the things that we think could go wrong what what are the different options that we're going to look at that we we know we think this might be an avenue this could be an avenue what do we think the best way to go is and why is it better than our other options what are the financial what's the financial feasibility of this project revenues expenses running some kind of sensitivity analysis on different outcomes so so there's a there's a full project and I guess evaluation business case analysis that we would like to see or you know that we've recommended be implemented and documented thoroughly throughout an internal preparation and review process the next one here is again kind of once you approve a project we have to manage it on a go-forward so one thing we've we've recommended and and when you have you know potentially multiple large projects going on at one time having whether it's even just one person or multiple people someone that's focused on managing projects and so that that knows what the timeline is what the milestones are what the expectations are where we should be along the path of the project that's really monitoring that as a centralized component at the landfill is a right is is what we're recommending here so whether they're the specific project manager that's how executing the project could be different but someone that's overseeing and making sure that projects are where they need to be and if they're not how are we going to get them back on track so the next the next one item number six kind of really goes more and getting more into the contract part of what we looked at here but the really what what are we ask questions what what are the different types of contracts we have what what are the different activities that would require a contract and and you know having a clear definition so that folks out at the landfill and the management team out there kind of really knows what what do we when do we need to have a contract what constitutes a contract is something we're recommending here and and and I would say this this goes into this would include leases purchase contracts of which you know your procurement team is going to be involved in that at some point but you could have purchase you could have sale contracts you've definitely got leases but but we need to have the clear definition definition of when we would expect a contract to be in place and and then kind of adding on to that one number seven here is specific levels of review and monitoring procedures for a contract so if we are going to enter into a lease of which there are multiple le ases at the landfill who needs to review that well I was I would assume it would be management team at the at the landfill but it might also be the general counsel for the city other members of senior management in the city so laying out who are the required people that need to review a contract and any kind of form that could take as well as how are we going to inventory those contracts so we know at any given time what our contractual obligations are and who they are to and being able to monitor those terms of the contract and you know when does it expire are we going to renew this and actively working to manage that contract on a go forward we've provided some recommendations to management on that as well so that that that's a lot of meat there on the project management and contract process from there number eight really was getting more into the budgeting process strategic budgeting and so really what we 're talking about here is having some clear guidelines or expectations and process on when we're developing the budget at the solid waste department internally before it gets pushed up the chain to finance and and consolidated with the rest of the city they have to develop their budget and you know what are the different departments what are the different individuals that are going to own certain parts of the budget what's the timeline with which the budget is going to be prepared you know what are what are the expectations within the budget and the documentation for certain assumptions so you know you don't have instances where it's just well we had we had that number there last year so we're not going to roll it forward we want assumptions if there's going to be an increase in cost for certain areas if there's large budget line items that have big values in them what what let's break this down let 's talk about what really goes into this so that you have more of a strategic initial budget but it also helps you monitor the performance against your budget in a more detailed kind of progressive way as you go forward these last two have to do with contract labor and overtime a strategic staffing plan is what we've recommended here and it really gets into beyond just lay direct contract labor and overtime but more of a detailed analysis of you know how much time does it take to really operate the landfill and how much labor do we need on a daily weekly monthly annual basis what are those people in different positions doing what do we need them to do at different levels what kind of capacity do we know we need because we can go from being really slow to really busy in a very short amount of time and how much do we want to rely on how much are we relying on contract labor now how much do we want to be relying on and you have a benchmark not to say that it's would never deviate from the plan but you have some kind of expectation that you can then manage from so that's that's that's the that's the recommendation there and then really just there is a lot of labor and overtime and having some more kind of oversight and management of you know be a bit of all of that but also looking back over time and seeing where where where are we using our direct labor what are we asking them to do are we happy with the service that we're getting why do we have certain people maybe that are constantly working over time and is there some more strategic way we could do scheduling to reduce over time maybe do some some staggered scheduling that you have people coming in at different times and reduce any one individual working working over working over time so those are kind of the key our key findings the high the items that we dubbed as higher risk from this point forward in the presentation we've got supplemental information here which I'm happy to continue walking through if you if you would like or I can stop here and ask answer any questions yeah does anybody have looking through the supplemental information I think you've touched upon the high priority items which is great but you know if there's any questions or concerns about some of the moderate items or moderate risk recommendations or even the low as far as that goes or even more and just I gathered from the information that they're working on all of these high medium low yes ma'am so I believe once I'm done talking Ethan has is gonna come and give you a brief on all 21 high medium low they're all they're working to respond to each of them that is correct well and I just want to say I think this is a healthy thing for every organization to go through and if you don't have high moderate and low there's probably something wrong so I think it's very healthy that we identified these things and I had a question about the process I was just wondering did you work with the city auditor in this or to what extent we we did not work with the city auditor in this and well to the extent that the city auditor had done some procedures out at the landfill prior to us coming on site we we tried to not duplicate that effort so we wanted to make sure that we were spending our time looking at you know not doing something that had just been done by the city auditor and really focusing on things where we could where we could be of best use to to to the city and to the management team so from a standpoint of making sure we weren't duplicating effort that was that was definitely a consideration. I have a comment or maybe a question it appears that everything that was brought up and mentioned are common-sense basic business principles that I don't care if it's widgets or digits people ought to be doing. In sitting on this board over the last year and a half I don't I'm not sure that there's not one area that we haven't had presentations on so somebody's looked at. Then they come to the board for disclosure and comments and then they go to City Council. So what I'm getting out of this is that while you found this high medium and low it's not that these things aren't being looked at but they're within the departments from a control standpoint there's not as much formality and in some cases procedure to monitor that on a regular basis day to day month to month. That's an accurate statement so you know they're still doing business out there and people are trying to do their job and what they they think they need to do but from when we come in we're looking for kind of we're looking for standard process we're looking for internal control and we also want to see some kind of documentation that that we can roll so so I don't say oh this control you've got a control here but the only thing I can base that on is that somebody told me that they do that. So you know like you said there's there's there's business is happening they're there they're working through things they bring things here for you all to review. The level of documentation that we were able to see that would support kind of the the procedure and the review and the preparation and the performance of some of the controls you know that that's where some of our review art some of those moderate and lower risk recommendations go is to formalizing and documenting some of those procedures so that you know that it just really helps you make sure that they happen every single time and that they happen thoroughly and consistently. Any other questions? No? Okay thank you. Thank you all very much. Now the solution. John gets the fun part of the presentation. I drew the short end of the stick today. So I'm gonna go through these at a fairly high level and so certainly if you have questions as we go through the staff responses and the status feel free to stop me. One of the things I'll say at the outset is is I want to thank my staff they spent a lot of time with John and his folks and I'm continually impressed about how open-minded everyone is out there. A lot of this was challenging what they do every day. Show me how you do it and I'm just always really appreciate the the openness and the willingness to go through these processes and willingness to change and make no mistake we have a lot of things going on in the solid waste department right now. There's 21 of these here like I said I'm gonna hit them at a very high level. Overall I want to kind of echo what John said though is that a lot of this comes down to making sure that we have clear roles, responsibilities, the delegation of authority. I think in my short time in solid waste that's one of the things that I 've seen is really one of our biggest challenges is whose job is this? Because of his five people's jobs we have a real hard time staying consistent. That's especially true when it comes to contracts, project management is a lot of the operations managers out there were really relied upon to be the sole driver of those ships and whenever that happens something has to give and I think that's kind of what we've seen in a lot of cases. The other thing is making sure that we have those standard operating procedures. In some cases we're going to be adhering to what the city already does. In some cases we're going to build some of this from scratch and so and lastly I would say like John said there 's there's a routine review of this type of stuff is and it's not just hiring someone like Weaver to come in and help us out it's my job the management staff's job to make sure that we're keeping an eye on this stuff on a regular basis making sure it's working number one but then also making sure that people are adher ing to it and when that doesn't happen we course correct and learn something from that. So with that I'm going to go through these very quickly again stop me if there's something that piques your attention. PFC 01 again those are points for consideration the first one was to formalize the process to evaluate and set tonnage rates. Like John said we are going to be looking at a cost of service review we actually have this within the procurement department right now is scheduled to go out for solicitation. A couple of things that we need to do ahead of this and we're actively working on is realigning our business units within our budget and also making sure that we're alloc ating our costs correctly. So for instance my position is overhead I can have a fairly big impact if I allocate my cost incorrectly and that comes home to ro ost with the rate payers and so our staffs done a fantastic job over the last few months and we are completing that process as we speak that tees us up for that cost of service in quarter two. PFC number two is evaluate the process for accepting and monitoring on-account customers and on-account customer is someone essentially that we're extending credit to that could be somewhat large haul er that does business with us on a regular basis it could be someone that this is the first time at the landfill and they want to do business with us on a temporary basis for the next three quarters. There's standards there that exist we're not consistently monitoring that and staying on top of it and so we are going to be assigning staff and making sure that that is something we keep an eye on on a regular basis. John mentioned a little bit earlier about system controls and making sure that the securities are in place I believe the thing that he mentioned is adjusting rates on the fly for folks at the scale house this goes back into clear roles and responsibilities delegation of authority is who should be responsible for adjusting rates if one needs to be adjusted what is the thought process and the audit trail behind that separation of duties would tell you that whoever is handling the billing should not be handling the cash and so we have made some of those changes that if you are adjusting rates you do not need to be in the scale house that needs to go to someone else. We have this is December 2017 I think that's a pretty easy fix for the most part but we do need to go through with tech services and do a securities review and make sure that we update all those permissions in our billing system. The next two are low priority you have monitor commodity rates that is mostly for like our metal sales sell of concrete sell of soil we have a number of revenue lines there if you will and we just want to make sure that we're getting the best rate possible as we move through those we have assigned a business analyst to keep an eye on that and we will be fir ming up that process and formalizing that moving forward. This is also a great opportunity for us to look and say does this constitute a contract is do we want to be playing the commodities market on a regular basis and trying to strike at an appropriate time or would we prefer to contract this out and have a little bit more stabilization on our revenues. So we'll be looking at that. We also restrict flow and track visitors entering and departing the landfill. We actually have what's known as a bypass lane at the landfill that is for our folks that do frequent business with us they're not having to go through and take up a scale house attendees time on a regular basis they come in enter their weights they move through and then we build them at the end of the month they're an on-account customer. One of the things that we've seen other landfills do is kind of set up a toll tag system if you will where they have the RFID tag comes through a camera reads it snaps it they weigh and they're on about their way one of the things that we're going to be looking at for our capital improvement project or capital improvement budget in the years ahead is should we redesign our inbound and outbound lanes to be more efficient and to also tighten up some of these controls at the same time using RFID technology. Talked a little bit about formalizing the definition of a project John's definition is very accurate I think for us whenever I started we had a number of initiatives that were defined as projects but I don't know that they were necessarily projects and whenever we do run across those and I'll hit on this in the next slide is we want to make sure that there's business case analysis for each of these whether it's a new initiative like landfill mining that turns into a business unit or if it's something like compressed natural gas vehicles that there is a defined start in terms of initiation proposal validation and then project management if that does get the blessing of the PUB and council. I think a lot of this stuff was to the earlier point being brought to PUB and the city council one of the things that concerned me a little bit about some of that going back through it is there wasn't a lot of diversity of thought meaning that this may have been one or two person projects that took it from proposal to validation to implementation the process that we've talked to Weaver about is there needs to be multiple checkpoints kind of a gatekeeper system if you will of this does not get past my desk unless it meets certain criteria and so by the time we bring something to the PUB or the city council we will have gone through all of those internal controls ourselves to make sure that we have a very sound product and that what you see is is really a consensus effort on our part that plays into number seven so I'm not going to repeat there number eight was to establish a project management office the project load that we had several months ago is very heavy we've scaled that down a great deal you've seen a couple of those that we brought forward we did have a reorganization in August that addressed a number of the roles and responsibility deficiencies that we found namely solid waste was without an administrative office a lot of that fell to the operations to do themselves and so you had a lot of redundancy a lot overlap a lot of confusion so we do have an administration office now that we're building up we also have a project manager position that we created and that to that gatekeeper comment a moment ago this this is really one of those key positions that whenever you have a project that's got a sponsor and we want to submit it for further consideration this person is one of those important gatekeepers that says well let me sit down let's do kind of a feasibility study on this to see if it warrants a further financial analysis and so there's three or four of these types of positions in our office now that we'll kind of walk these through whenever a proposal is made same thing with the condition in which contracts should be utilized I think just in general we are working with legal and purchasing on a number of these we have 50 plus contracts within solid waste right now that we've gotten our arms around a couple of things that we're going to be doing is formal izing how that initiation review much like project management is you're gonna have those gatekeepers to make sure that this is a passing muster and then that will tie into the the city process that involves legal and procurement down to PFC 11 we have contract management procedures part of the task for the administrative staff is creating kind of a contract repository where we always have eyes on this that would also alert us when a review is due a couple of PFCs later on talk about vendor performance there's not a consolidated way in solid waste right now in which we evaluate vendor performance you really have to go dig into the contract and say what what are they supposed to be doing and so we want to make sure that we have those out there in a repository that that information is easy to get to and easy to manage so that addresses 11 and 12 those are quarter two completion dates currently that also goes into the vendor performance like I mentioned that is something we'll probably need to partner with procurement and talk about how does that process work if we have a vendor that's not complying or maybe they're behind schedule we don't want to go rogue and go out there and try to enforce contract terms on our own we definitely need to partner with legal and procurement on that so once we have our bearings with our contract management we will circle back with them the verification of a purchase requisition that one was kind of low-hanging fruit there was not a formal process for how requisitions were requested before there were two or three people that could open a purchase order we've restricted that and centralized that to where there's only one or two and there's a prescribed way in which those are submitted approved verified the whole nine yards so that one's complete one of the things I will say even on these that are complete doesn't mean that we're done and we're gonna walk away a lot of this this is a great example is these forms are submitted via email right now I 'm not a big fan of email it doesn't have a great audit trail on it so a lot of these we really want to try to formalize and standardize and then automate how some of these processes work that you have not only the audit trail but we also have some reporting and it gives them the managers and also myself with a higher degree of visibility and a little bit more accountability as we move through in terms of reporting with paradigm we are going to be working through and establishing a routine reporting for both operational financial performance data we're data driven environment and we have a lot of data but not a lot of information and that's something that is going to be a work in progress for us over the next 12 to 18 months the budget preparation process like John highlighted we have corrected that deficiency one of the biggest issues we had was there was not security locked down on budget documents and so some of the financial analysts we go into that document say well how did that number get there and it wasn't anything deviant an operations manager was simply updating information as they got it they were trying to be helpful but it really put us in a challenging environment of well if I don't know where that number came from I can't source it how am I going to defend it and so we have locked that down there is a formalized process for budget preparation that goes through 17 and 18 as well is there is a strategic budgeting process that we are in the currently in progress right now we're going through our CIP budget as we speak essentially there's three to four series of meetings from myself the financial analyst all the operations managers where we really go through and vet this out and make sure that there's that diversity of thought there's dialogue and that this isn't something that we're throwing together at the last minute and so I think we are going to have a much better product coming forward through the budget process moving forward and something that we all have some buy-in as an input into lastly a couple of things here utilization monitoring for equipment this is the fixed asset finding that we were identified is we have a lot of equipment for lack of a better term we're a transportation department we just don't transport people we transport garbage and recycling so they're much less vocal whenever they get in the back versus a taxi maybe but in terms of transporting that around it's really important for us that our vehicles that we manage that fleet effectively that we keep a close eye on one of our maintenance our repair costs when is the appropriate time for us to replace vehicles and so we are utilizing utilization guides and reports to make those decisions now we think that that will make a big difference in this year's budget and it's something that we're eager to share with the PUB and the City Council as it develops lastly talked about the strategic staffing plan and oversight for contract labor and overtime following the closure of the mining operation we did decrease our contract labor a great deal we went from about 14 to 15 on average contract labor per day now we're down to about four one of the things that we are going to be looking for in the next two to three months is that strategic staffing evaluation and creating an operational model that we can use as managers as directors to guide our day-to-day operations it's really taking us from being in a reactive situation which gets you into that contract labor that over time is I didn't anticipate this happening today I need to go find workers to get this stuff done we want to be in a more proactive situation more proactive posture where we say I anticipated that and this is how we're going to address it so that's really the goal with with it and I'm confident that as we work through that we will probably see some further organizational changes moving folks from one operation or maybe one responsibility to another and then hopefully in turn what we will see is a reduction in contract labor as well as over time for our staff I know that's a lot of information to take in I hit it really fast so I'm happy to stand for any questions that you might have questions you guys been busy yeah you know can you go back to the like the first slide it was maybe there second slide I'm sorry yeah the the business case analysis obviously I mean that's that's kind of on everybody's mind given you know we had to make a decision on landfill mining and who knows if we'd had that before I'm not trying to second-guess anybody but as it turned out but but I think that's before we you know I don't want to kill the innovation that we've had at the landfill because I think we've done some great things there but at the same time I'm glad to see having a project management office and also the business case analysis that 's more formal process now I'm encouraged by that and having a business case doesn 't necessarily decrease innovation it just correct correct has diversity of thought is well sometimes a business case analysis might be how much money can you make or how much money do you expect to lose yeah and put a price on it so that's that's but you got to know right you got and I think the interesting thing to to kind of bring staff into this is the CNG the mining both of those operations there were split opinions within our office even as I got there and so I think back to the diversity of thought and making sure that you convey risk and that you understand it and that you try to put a dollar amount to it that's really critical and that really flows straight into business case analysis is it's our duty to be innovative but it's also our duty to convey what the risk are and then allow this board as well as the City Council to make those decisions on do we want to allocate our funds in that and is the return worth it so and this is something that you're doing citywide yes and I guess we recently also just set up and established a chief procurement officer function in a contract compliance officer function as well one of the things well I think Ethan's doing a good job getting you know improving the process on the front end really the back end is where we're having more of the issues in terms of you know we recently did an inventory and had just under a thousand active managed actively managed contracts leases that sort of thing within the city and my concern was is are people assigned to those particular contracts are we closing them out properly are we enforcing the provision so we've got a team now that is set up and actually housed in our office which is why you see the construction that is going to be working with all the department directors to make sure that the best practices are brought to them and that we're giving the proper training out to our staffs as well so I really applaud Ethan and his team for embracing all these recommendations moving forward it really will help set a template for everyone else good very good thank you certainly City Council received the same presentation next week and then it would be our intention that we circle back at some point in the future let you know how we've progressed through the remainder of the recommendations we haven't implemented yet it's good thank you very much thank you okay now let's since we we went over item B so let's let's go back to item B which is to receive a report hold discussion and give staff direction regarding the credit and collection policy of the city utility system good morning I'm Tiffany Thompson the customer service manager and coming back with a follow-up presentation in regards to credit and collections so a little bit of background in November of 2010 we did approve an ordinance that changed our credit and collection policies this was due to the high debt that we had we had about 1.4 million and I wait and no nine and that was due to an affectionate ineffective credit collection policy specifically with credit scoring deposits and fees and so after the last couple years we've seen a reduction in our uncollectible debt for 1516 it went down to five hundred and thirty six thousand dollars in our overall delinquent accounts has decreased by 34 percent since that time and so last month we came before the board and City Council to let you know about the progress of that and so today we're just going to follow up on a couple of items from that presentation and then get direction from you and council tomorrow so the focus areas for this morning is to talk about the meter and billing cycles some of the survey comparisons that we did how we do fair and credit fair credit scoring our overview of our fees and how we're going to review deposit options and what we may want to do with those if we have any changes and then additional funding to the plus one program so first on the meter and billing cycles didn't municipal electric does utilize two different type of AMI meters you have the AMI meter that has remote reads and two-way disconnections 47% of the meters deployed right now are the AMI meters 53% are the AMI disconnect meters which allows for the two-way communication in addition to being able to connect and reconnect remotely or disconnect pardon me and reconnect remotely and so in addition to that whenever they go out to read the meters the water meters are physically read and so we do have the capability to do remotely with electric but again just the water is physically read out in the field so we do have our cycles build out into 21 different cycles so we can go out to the different places in the city everyone's has a specific cycle assigned to them so they can go out and read that meter and then we build it accordingly and we have it distributed out that way so we can be able to handle the workload and also with the customers calling in to us we can actually kind of spread that out throughout the month versus the first or 15th due date or payment arrangement date with that and then we also have a greater flexibility now with our payments we implemented a new payment portal this last summer that allows customers to go in and schedule their payments if they do have that need for the first of the 15th they're able to do that and also setting up reoccurring payments we have a budget billing and so we have a different additional payment methods to give our customers greater flexibility now and then if we did change to a first or 15th due date or payment arrangement cycle that actually would influence the number of accounts that would go into a past due status just because you wouldn't be able to disconnect them on a regular basis because we do disconnects about three times a week right now and so having that set first or 15th would create a lot of manual processes and some customers would actually actually experience about three bills on their account and so that is just a little bit of information on why we bill how we bill and why we spread it out into multiple cycles throughout this presentation we did survey comparisons with eight comparable cities to us and so you're just going to see some of that data throughout this I just wanted to illustrate the cities that we did get information from and it's also included in the backup so in regards to compliance and credit scoring the city does utilize online utility exchange to make sure that we are compliant we do have to be red flag compliant meaning when a customer comes into the utility system we have to identify verify their social security number and their IDs in order to make sure that we're mitigating any type of fraud or identity theft with that in addition what we glean from that is an assessment of the customer's credit that's coming into our system and so we're able to deem do we need to charge them a deposit is it waived what deposit would be appropriate for that customer coming in and how that is assessed is through a vantage score and advantage score is different than a FACA score the vantage score does have data from all three credit agencies Equifax TransUnion and Exper ian and the vantage score is different from the FACA score because it is soft credit pool on that customer's report so that means that the customer does not get adversely affected by having us pull it that way and it's also much more cost effective if we were to pull it based off of a FACA score it would cost about ten dollars to do that and it would be a hard credit pull on their credit so this is why we utilize the vantage score and for any customers that we do assess a deposit to they're providing an adverse letter that lets them know the score the contributing factors to that score and how they can get additional information so for the cities that we surveyed 33% of the cities do have a credit scoring module like the one that we use and do offer ability to waive the deposits 45% do not use a credit scoring and have one option to waive the deposit and 22% of the cities do not have the credit scoring but they charge you a mandatory deposit meaning regardless of your credit history you would still be charged a deposit and I wanted to note that and whenever we expand the sample of cities that we benchmark it actually was much higher almost 64% use a credit scoring module but for the purpose of this presentation we kept it to the 8 but I thought that was worthy to note and then also the city of Denton offers the most amount of options to be able to waive a deposit out of the surveyed city we had the letter of credit, co-signer form and also if you set up reoccurring draft with a credit or checking account will waive the deposit so we have three options where most only have one. So in regards to fees what we have found through the survey is the fee structure is highly variable and depending on the city with this and so what we found is we were right there in the middle in regards to some of our fees compared to the other cities and 86% of our customer base pays on time on a consistent basis and again since 2010 with the implementation of our credit collection policies we've reduced the number of delinquent accounts by 34% with that and so deposit usage we wanted to discuss the ways that we utilize our deposits we have 21% of our customer base has security deposits on the account the reason why we seek deposits is we are in a post-paid environment and so at the time of disconnect ion or when you turn off services you could have upwards of two and a half months worth of usage on your account and the highest deposit that we're requesting is up to two months with that and so 44% of the cities that we surveyed do have that average two month deposit like we do and we're also seeing an increase in customers leaving the utility system without contacting us formally to let them know to let us know that they're disconnecting services so they're just letting it turn off and we're not getting a reconnection from them and so that increased last fiscal year by 9% so we think that that 's even more important while we want to make sure we have proper security deposits on the account with that increased trend and so how we used the deposit usage for fiscal year 16-17 56-69 final accounts held deposits 54% of them had their entire balance paid with that deposit which meant that they were able to move out and have additional funds to be able to connect services wherever they're going and then 46% of them still had an amount owing after that deposit and we don't know the final impact of on that for uncollectible debt because we don't deem debt uncollectible until 180 days but we do have data for 15 and 16 and out of the 5,500 accounts 53% of the deposits paid off the final bill 47% of them still had an amount owing and after that 23% overall ended up leaving a debt that turned into uncollectible debt so on average about 25% of the total is or 23% in that case is still even with the deposit refunding to the balance they're still leaving a debt on the account and for the two fiscal years prior to that it's it's about the same it's about 25% so we're seeing that's a consistent trend with who leaves ultimately results in uncollectible debt with the deposit refunding for the plus one program this is the prevent loss of utility services for fiscal year 16 17 we assisted 231 families for a total of about $80,000 the contract with interfaith ministries is expiring next month we have a six month extension that we've already signed off on so we can incorporate data or pardon me a feedback from pub and council and those specifications that we're gonna write six out of the eight cities that we survey do have a program like the one that we have here at the city and so some of the things that we want to talk about and get direction from you and council tomorrow with a again we're trying to create the specs for that contract now so we can get that out to a competitive process and so one of the things we'd like to have you consider is do you want utility plus one funds going to utility deposits right now if someone seeks assistance deposits is not in scope for that and so it can only go towards balances so there's an opportunity if you wanted funds to be able to assist with customers deposits we have an opportunity to incorporate that into the contract now and then also establishing a requirement that the the vendor the new vendor or incumbent established written program guidelines that the city would review on a yearly basis and so this would allow us an opportunity to understand what's going on in the community then it may be not three years out when the contracts up for service or for it to go back out for competitive process and then what we also found is that we think we need to get richer data as far as monthly results from interfaith ministries currently and whoever the new vendor may be just so we can know what are the barriers that our customers are experiencing and is there a way for us to help them so we'd like to incorporate richer data on the monthly reporting and then training not only for city staff but for the vendor to make sure that they understand what type of authority they have in qualifying assistance for the customer and then we talked about last time we do have a six month tenure criteria in the current contract and so we think that we could change that to say that you could assist the family regardless of the tenure at the address and then assisting families more than once in a 12 month period right now you get assistance once and then you can't get assistance for until the next year depending on the circumstance and this was a 50% of the reason why customers were denied assistance was because they needed assistance again so we think this is an opportunity to put into the criteria where what is the appropriate amount I put up to three times but that's definitely open for discussion today and tomorrow and so after last month's discussion it was brought up if we did want to change something with the deposit process what would that be and what options are there and so just as a reminder the way we charge deposit is based off of credit scoring we'll run the credit to see if you need a deposit if you don't deposits waived if it's fair it's a one month deposit and then if it's a risk factor then we're going to charge up to a two month deposit on the account and so some options for new and existing customers for residential that we have is we would maintain that credit scoring and if you 're good credit scoring we wouldn't charge a deposit so the option number one is only charge a deposit for that one month of utility usage as opposed to if they need to have two we would change to where it would only be one and as the customer establishes their tenure and their payment behavior or if they got disconnected for non-payment then we would seek the additional one month deposit to get them up to two months on the account the second option that we can do is charge a deposit again only a one month deposit when they come into the utility system and then based upon their payment behavior or if they're disconnected for non-payment increase their deposit by $50 increments with that until they get up to that two month average on there and then option number three would to be only secure a one month deposit no additional increases and then option number four you know is going to put it in there right no changes to the deposit process and we could continue to do payment arrangements like we do now but that's definitely an option that we can vet out with that so at the end of this we're going to open that up for discussion we could collaborate it with community development because as we're talking about the deposits we thought that this was a very timely conversation especially with the recent emergency solutions grant that just went through is what other people can we assist specifically with a deposit waiver we do have in ordinance now that victims of family violence that are working with friends of the family have a deposit wage and so they provide us a form letter if they're going through that scenario we do not charge them a deposit and so we think this is another opportunity that we can incorporate this into city ordinance if someone who is working with the help agency and they're being going through either that rapid rehoming process or any of the agencies that's helping with homelessness they can provide us a form like they do for the victim family violence and we can waive that deposit so again we think this is a timely conversation while we're looking at the deposits and so with that and the discussion today and direction that we're seeking is on the plus one program and for the deposits so for plus one do we want to increase the funds to that for next year specifically because we're going through the contract competitive bid and then also do we want to allow funds to go to the deposits and staff obviously had recommended some of these criteria but we're definitely open if there's additional criteria that the PUB and council wants to incorporate into that we want to start working on those specifications so we can get that contract going as soon as possible and then for deposits do you want to incorporate a deposit for people experiencing homelessness and if you do want to make any changes to the deposit process what option would you like to select and with that I'll open it up to any questions and direction questions yes last time we talked about this I said aren't there any agencies that also help with this and I noticed in the paper the Denton paper the Texoma Council of Government's energy services program also provides funds do we work with them we don't work with them directly but we have like a list in addition to plus one where our customers are reaching out to us they're struggling we have a list that they will provide them they are on that list and in my previous perfect presentation we did have almost 1200 customers were being assisted through those various agencies with Texoma Council of Governments being one of them and last fiscal year they gave or assisted our customers with about $135,000 worth of payments on there so yeah we discussed that last time with it but I'm glad you brought it so yes we do make our customers aware the additional resources that they have out there for them is that is that applying deposits or I know plus one is we're talking about really applied to deposit not but there's a Texas Council of Governments that assistant them or balances I'm not sure how it works here in Minnesota it was it had to be electric only really deposits it couldn't be water and most of them are definitely balances but you know it's an opportunity if we're allocating funds we can deem how we want those allocated so I think it 's it's a good conversation to have yeah okay but there are programs out there in addition to what we're doing to help you some you mentioned that was at eighty thousand and change or something that we the plus one program was that yes for this year it was a little over 80,000 we allocate about 86,000 to them every year for it's a hundred thousand fourteen thousand goes for admin costs for the vendor to administer it and then they distribute eighty six thousand dollars they have those funds and so you can see they're not even using all of those funds right now we don't tell anybody no then I guess I'm sorry we didn 't tell anybody no we did tell quite a bit of people as people know and we talked about this last time some of the reasons why fifty percent of the reasons why they're getting decon is they need assistance more than once with that and then the other fifty percent is the documentation wasn't filled out the applicant didn't show up for the appointment or they didn't need assistance any longer but I think it goes back to that point of getting that bit that richer data to get a better understanding so we know how we can address those needs with that so do we know if we were to increase it to up to three times a year would we need more funds or do you think we would just use the funds that we were already allocating do we I don't know the exact answers to that question I think we're going to need to my recommendation is changing the criteria to make it to where we can assist more customers and seeing what the impact is of that I think that we would definitely utilize this especially if you incorporated deposits in there and then you remove that more than once in a 12 month period I do think you're going to see a greater need for that but without having that in place it's hard to determine I wouldn't feel comfortable telling you yes they need this and I did have a conversation with interfaith ministries and they had suggested maybe doing an increase of $25,000 in addition to the criteria changes and then seeing how that goes with that but again it's your discretion that was gonna be my next question is can we amend it later we could put that in the contract so that would be make sure I'm saying that right I'm looking at legal I don't be like yeah we can do it you're like no you can't with that so I think we could put that in the contract what I'm trying to get is I think your deposit process is probably one of the better ones and I would rather keep good credit policy in place and provide assistance in the limited periods where it's going to be needed and I don't even have a problem with it going towards the deposit if they meet the criteria and they need the help but I don't want to get away from sound policy. I have a question. I'm sorry there's probably gonna be an amount of situations where that deposit goes to just pay the last couple of months of their utility bill right like we saw it was pretty expensive so if they can't having trouble affording it already they might just so that deposit might actually end up just paying for electric rates. Yeah exactly. So just in a different way. What is the source of whatever funding of that money? We do have a customer contributions that give I think it's about eight thousand dollars a year that our customers make donations to the plus one program and then the rest of it is funded through the city through we do an allocation to the utilities so that's how it ultimately comes back out so there is a the rate carrier is subsidizing the additional that customers aren't donating. And so what is the source from the city? The source from the city. Our rates. So it affects our rate structure. Yes. Okay there was a list that I think Susan brought up of I don't know whether they're nonprofits or church organizations or whatever that obviously see a need I think you mentioned quite a few of those that helped up to 1200 people. We have a specific I would call it a public-private partnership or contract with one entity to administer the funds that the city does if I'm understanding it. I don't know if it would make sense but to have maybe that public-private partnership with expand that some to other organizations or if they're doing that voluntarily maybe there's no need to do that. So one of the things with those additional resources that miss Parker brought up we do work with them because they reach out to us to ensure they understand what the customer needs are they let us know what amount they're going to be pledging so we can make sure the customer doesn't have any interruption of service until we get that pledge payment on there but as far as contract ual we only have the one with interfaith ministries for that so am I understanding that maybe not having just one contract but multiple with agency is that what I'm asking I don't I don't know that that's even viable or needed if all of these other agencies are already doing it without having to formally enter into an agreement. I think I may be able to address some of that we did an RFP for that service a few years ago and interfaith was the firm or the nonprofit that wanted to do the service there is some administration that has to go along with it you need to have some infrastructure to do that so there may be others that would want to do that we're certainly willing to talk to them if you want to have more than one partner I think that would be fine it's just matter of finding someone who's willing to do that for the programs already have in place perhaps. Again I'm asking for understanding not necessarily suggesting that okay needs to be done because I agree with Susan you know the business side the credit standards your deposit that I've seen too many businesses fail when they start loaning credit standards banks cities housing authorities and on and on and on and I've seen that from firsthand personal because I foreclosed on or suit them or whatever so I don't think we should ever lower credit standards and policies but to help from a social side this type of thing and how do you make it better and how do you solicit more money or how do you how do you raise more money without necessarily jeopardizing increasing utility rates is a challenge but also worthy of trying to do. Okay understood. I'm sorry no I talked too much. Go ahead Lily. You've got some background on. I do I do in my time with United Way as their CEO for about five years and then also as a fundraiser for the United Way everyone on staff had to answer calls from the community asking for assistance and more times than I can count they would not were not able to get funds for their to go towards their bills for electricity because they had already gone once before or other organizations had already run out of funds and so there might be a whole bunch of organizations out there but they have very limited funding for this particular thing and so it really doesn't cover the need that is out there. The other point that I wish to make is that while addressing homelessness that is a huge problem problem that a lot of families even families who have both spouses working still run into this problem of not being able to pay all of their their funding and so you ask you have to ask yourself the question is are we going to you know have these people thrown out on the streets because they couldn't pay their electric bill or are we going to help them this time and let them continue to work and make money and provide for their families so that they can also pay for their electric bill on a regular basis and quite frankly up to three times a year I think would be the kinder thing for us to be able to do and also not only kind but also to ensure that families don't become homeless because they couldn't have their bills paid that one time a year. Yes can I piggyback on that I just want to say I completely agree with with what Lillia just said both about the the homeless deposit waiver and up to three times more a year assistance and the connection between these two issues because as our Denton homeless coalition you know makes clear that people that low-income people are on the verge of homelessness and that home and that homeless is not a kind of person but a state of being that that that anybody could fall into at one time and so there's a direct connection between these two. I would like to have staff consider bring to the table the possibility of a low- income deposit waiver because these are precisely the people who you know low-income people who are being asked to put more upfront when they don't even have the money to simply pay their bill and I find really interesting if you wouldn 't mind going to the additional information slide the follow-up information slide or the let's see this is page page seven of the follow-up information. Sorry let me get a hold up. Yes it's with the additional funding yes yeah starting right there yeah so you see um so where it says it a hundred thousand dollars right towards the plus one program and then you scroll down to the next item item 11 which is this breakdown of uncollectible debt and that a hundred thousand dollars is just a little less than half of the uncollected residential debt that exists today right so we're really looking at you know when I when I look at this and I found this so interesting and I'm really grateful that you know you put this on here as far as thinking about you know not just does the deposit system work but how does it work you know what I see is that the commercial debt has shrunk so significantly both in terms of the amount of money and the overall percentage the piece of the pie of the uncollected debt and you can see that in terms of percentages the commercial category has literally switched places with the residential category we go from 46% of the total uncoll ected debt being commercial to 46% of the uncollected debt being residential so what that says to me is that the deposit is that since we enacted this deposit system that we've we've shrunk the total uncollected debt down but we 've done that by shifting the burden to you know from essentially the you know rich but I could say from the rich to the poor you know from from the commercial entities that can pay these deposits because you can see there's so little uncollected debt now from commercial because they can pay right they can pay their deposits most of them can and then you have these residents and I should say I've been you know since I started on PUB I am contacted every every week by multiple you know low low-income people who are struggling to pay their bills which are augmented by these extra you know as you know and you know more about it than I do because you talked to him you know more of these people than I do so you know what I would like to propose again is following up on what I was saying before and I'm just using this as the as the data to back that up this is what gave me the idea you know if we could you know keep the commercial deposits and and include not just a waiver for people who are homeless but for people who are on the verge of always on the verge of homelessness which is quite frankly low income people in Denton in general and and then we could even if you're taught if you're you know looking at the plus one program so I'm kind of jumping from you know one to the other and back because they are such related issues and but and I and I push for that reason I appreciate having both these issues in the same presentation you know what about since so if you scroll up to that scroll back up to the plus one so if what we're doing with the you know plus one program is we're giving a hundred thousand to a third party and they keep fourteen thousand for their operations and then they're giving the rest of the money back to our ratepayers to give back to us you know why not from a point of view of just you know practicality and you know fiscal responsibility just kind of cut the middleman and have staff have you know have customer service you know do away with the low-income deposit which means less time spent on on the on the phones you know I think more you said said previously at council work session more than 50% of the time on customers not 10% but I went back and research okay so it is less okay yeah but but but you remember that yeah that question yeah so but you know a significant part of time so what if instead you know you were able to spend this time it would be helping the same kinds of customers but having being able to provide that assistance at the level of staff and I don't expect you to actually be able to answer that right now I do have a thought on that if I may yeah with that they customers are divulging a lot of personal information with getting assistance like do they meet the criteria what's their financial need health I mean you got HIPAA stuff in there too and I don't know I don't necessarily know if the city wants to be brought into scope with all that and being us saying no to you and yes to you with that I think that's one of the primary reasons we do do a contract for this so we establish the criteria and then the customer goes to interfaith that make sure they meet the criteria in addition that they know the additional resources that are out in the community because it isn't usually just one need with utilities it's probably a combination of needs and so interfaith is that that resource for them to be able to get the additional resources that they may need with us thank you for bringing that up because I was just gonna say we don't want to know that Deb we don't want to know that about our customers and and I think using this third party is a better way and if that means we help them with deposits and they will get other resources do they need food do they need you know clothing for their children and things it's a really is a more efficient interfaith does a lot of things besides utility assistance and so you know for fourteen thousand dollars that is a very efficient very cheap administrative cost especially if the city to take it on I think you you would have to budget I don't know what at the budget to administer that program but it would be I just don't think it'd be very efficient I think having a third party that also takes care of these other needs school supplies medical referrals that type of stuff transportation see yeah really really makes because they're getting the information anyway I think we agree on the outcome we're trying to achieve oh of course yeah yes yeah of course yeah I just it's because I know from having talked to you so many customers and also having talked to you know customer service that you know you guys are hearing these stories anyway I completely understand why you don't want to you know get involved but it's all but in design customer services is also making just simply by being customer service ending up making decisions because it's not an exact science and you can't predict what every individual case is going to be you know ending up deciding in certain cases for instance there are certain customers who have come to me in dire situations and by the way I have yet to meet anyone who pays deposits who's not in some kind of difficult circumstances it so I would like to see also more information about not only and I'm glad you're asking for plus one for more assist for more data on you know the kinds of obstacles in people's way I'd also like to see more about the income levels of people who are being charged deposits so I got a map and I appreciated the map that shows kind of where you know the clusters of where people who pay deposits are that's included in this but I would like to see data on the income levels of the people who are asked to pay deposits because I think what will my guess is what we'll find and what I've seen anecdotally is that it is our low our lower income customers on average who have to pay these who have to pay these deposits I think the criteria for deposits is what their credit yes that that's and that determines whether or not they're gonna pay us back or not and so from a business standpoint we got to be good stewards from business standpoint of making business decisions and that's what Susan we go back to that pie chart the reason why commercial started paying their bills because they were required to put down a deposit just like everyone else yes and I look at the chart the residential there in half to multifamily didn't have quite as much but the reason isn't the reason that that's lower is because you all instituted tighter credit controls and tighter collection policies yes and so that encourage people to start paying that's why that's down yeah probably and we can figure out a way to help those people who need help yeah well you know that in my from from what I have seen from talking to ratepayers whose lives have been really you know that these in in ways that some of us you know can't can't think of the kind of decisions that they have to make every day these deposits have been really successful at the commercial level and they have been successful you know for at the residential level but at what cost and what I'm seeing is the cost of making poor people's lives pretty miserable and I don't think it's if it were up to me I'm one voice on PUB but I don't think it's worth that savings you know the difference between that that the residential savings the difference between that five hundred thousand and that two hundred something thousand when we're already committed because as you said Susan because we all do have that same goal of wanting to you know help it's just just a matter of different ideas of how we get there I completely understand that but you know we're all we're already committing to okay we're putting a hundred thousand dollars down to help you know why not step back and look more at and I think the interfaith can help us with this and providing more of this information how this this the inability to be able to pay this extra money upfront is affecting people's lives and what would happen economically without just assuming oh we can handle it you know actually looking at you know at adding up the figures from a risk analysis perspective what if we exempted low-income people how much money we have from the deposits how much so I would really like to see that how much money would you know would we be losing or how much would we be gaining an uncollected debt I really want to see that because I've seen how this has really ruined people's I think you're making an assumption between low income and bad credit because you can have high income and have bad credit and you can have low income and have good here for 35 years and I believe the first few years I paid deposits because I was right out of high school I didn't have any credit and now I don't pay it was that before 2010 or after 35 years so when I'm when I'm here that was when everybody paid deposits because it used to be that everybody paid $150 deposit we still had we still had options to waive and one of the things is we do not collect data on income so we wouldn't be able to gather what the income level is for people that were charging deposits and nor I think going back to the miss Parker's point nor do we want to ask well are you low-income or get into that okay so if we can't do that then we can look at if you look at national averages of you know who it is in this nation who has the bad credit you will find overwhelmingly that it is low-income people who have bad credit because it's living in America is expensive and it is not in most people who have bad credit it is not because they're spending extravagantly you're not managing their money it's because life is really expensive and I know that you hear these kind of stories in United Way and I know you hear them in customer service you know I'm sorry to you know take the floor the floor on this but but I because I am also concerned about you know the dollars and cents of it and risk management and I do what you know want to see that this is that it would be fiscally possible but just when I just look looking at that looking at this and looking at the data that we have you know I'm not convinced that requiring people with bad credit who now who you know in terms of nationwide averages tend to be low-income people in terms of everybody who's come to me low-income people I don't see the advantage financially in charging them for this and having so many staff hours spent you know chasing down people to get them to pay I would like to see more more data more information since we're all agree we want to help people why assume that that these two ways or you know the ways the ways to do it charge people a lot and then give a third party extra money to pay people so that they can give us back the money so the deposit is indicative of what their usage is going to be going into that address and that's why we're collecting it but the map on exhibit four does demonstrate that these deposits are throughout the city yes there's a specific group or area it definitely represents that yeah it is throughout the city so so just understand your point of contention here is that you would just like to see us waive deposits for low-income people yes what is what's low-income well that would be something to be determined I mean that right here yeah we don't want to ask our customers that you know I don't think we want that information we don't we can I bring us back into center here for a second we're talking about increasing how much money and we're talking about allocating more money to allow deposits to be paid out of the plus one or whatever right whatever money we're gonna allocate for that so it makes the deposits and let's let somebody else determine what low income is and that's what that's what interfaith does that's what other agencies do city does not need to be in that business so if we allocate more money to and allow deposits I think we've accomplished what you're talking about but but we we put a limit on it because it's a here's what we're gonna budget for this year and so they'll have a blank check we can't do that we can't say we just from business standpoint we can't do that so we we just need to look at from a budget standpoint how much money do we want to allocate and do we want to allow that money to be used towards deposits as well as the utility bills and I think that's where we're at yes and so as far as giving staff guidelines I don't know other than other than that is kind of the bottom line you know when we get it if we want to we've got a we've got a contract that's coming up in December there may be some things that in working with interfaith that come out of some some ideas on how to be more effective and more efficient in assisting families that need it if it's more more than once the 12-month period so be it we can put it in there well let's just let's just kind of see what where that goes and then let's let's tweak the the policies we have and then and then allocate more funds what well if it as long as we have deposits then I do so you know if if if we're we are charging people with bad credit these deposits then I do support very much so it's plus one a plus one program assisting people with those deposits and I do very much I mean I want to support you know struggling ratepayers however we can because people are really struggling so I just want to make it clear I do support these aspects of the plus one program but I also want to which is why I'm glad these two are grouped together look at the root of the cause of why people are finding themselves in this situation you know having a hard time paying their deposits and no amount you know no policy you know deposit even even though deposits have helped with some people resident poor residents paint being able to pay it has not helped all and the statistics prove that because of the you know uncollected debt that we still have and no policy is going to make money magically appear you know in poor people's pockets other than actually giving them money or subsidizing them and I'll just say and then I'll shut up but this is one of the reasons why I wanted to be on pub because it's a really important issue for me when we were hiring for the new our new general manager one of the one of the interviewees was from Seattle and he just happened to mention that at the his utility in Seattle they subsidized sixty print I haven't checked up on this but he mentioned that they subsidized sixty percent of low- income ratepayers I'm not saying so then let's do that you know but but that's just an example of you know the kind of things that could be possible and I I won 't say no to anything until I see the numbers and how that adds up but our options you know as far as I see I mean I had to read over those four options a number of times to be able to differentiate between what exactly is the difference you know amongst those those options anyway so I will stop now and you know thank you for for hearing me and I do agree that we're all you know we're all on the same page with with wanting to help help help people the PB is okay with incorporating or do we want to increase funds to the plus one program you know I think I think the consensus is let's look at what we can increase it by and what the effect would be if we included deposits in that plus one reimbursement and increase up to three times a year yes yeah we're never gonna be able to write enough money to take care of a hundred percent I mean that's just not possible and I think that if we increase I mean they didn't use all the money they were given this last fiscal year and that might be because they're having to refuse people because they've only because I've already used it so so if we if we increase that if we increase that to three times a year is their way we can put some provision in the contract to increase the amount of money if we realize that we upped it to three times a year and we ran out of money halfway through you know is there a way to that we come here and leave the hundred thousand that we have now that we allocate to them but put into the new contract that we can amend that increase funds dependent on need or maybe go ahead and bump it up what they had what they had something that will allow it to based upon the revised criteria we're saying we definitely need more data so we can make better decisions and always yes yeah and in addition to the other new data that that we're requesting I would like to see of those what is it 231 families that we've assisted you know how much money is not on average but family by family since it's only 231 without names of course or any identifying but but how much money is going to each family because my impression was that it was a kind of a small percentage of the total bill but I recently I talked to one rate payer just yesterday who just had her entire bill paid for by by inter faith and so you know if you just if you do the math I mean I I have data on that now yes yeah oh excellent that would be great to see thank you dollar amount of the yeah so I'm guessing that that situation is very rare where they pay the entire bill but again that's why we want to have good criteria so if they want to make have that authority to make that decision and Randy on the homeless waiver do we have consensus on that the homelessness waiver and that waiver comes through an organization that their progress correct yeah that's a great idea and then with regards to the deposits you had all these four options I'm not sure I'm not sure we've decided what we wanted to get where we wanted to go with those four options I'm an option for yeah that's where I'm at and just to make certain the deposit process at this point in time is that right now whenever a customer comes into the utility system we'll run that risk assessment if they're good no deposit if they're fair it would be a one month deposit and then if they have a higher risk could be a two month deposit and with any of those deposit requirements we offer payment arrangements for that deposit so we'll split that deposit out for them on a monthly basis for them and so we work with their specific situation on that and if they can provide a letter from their past utility it's waived letter of credit cosigner or if they say I'll go on draft and we'll waive the deposit for them for that as well the real purpose for the deposit is to make sure that those utility bills get paid so that we don't we're not in a deficit because they start out in a post but we're in essence issuing credit to when someone comes into the system because it's post paid and so that's why we do the credit assessment on them because it's postpaid with and again to note what we discussed last month is we have the prepaid utilities coming on board very soon which would neg ate all the deposits and the fees for these customers I just I know you just said it but when is that coming on board next year yep that's the plan hopefully in the summer summertime for that so deposits I'm hearing that no changes in deposit but include the deposit waiver for homelessness and then include this criteria for plus one potentially start out the increase to 125,000 with the new contract with the ability to amend that based off of needs that we are able to pinpoint and bold face the more data and then up to the three times a year that's another agreement from yes I have one question that's sort of related how is it that if I move out I could possibly have two and a half months of unpaid utilities if y'all are billing me once a month I guess I could have not paid one month okay that's it that's you didn't pay your previous month and now you have your current bill behind on billing no sir once you get your current bill you're already two weeks in to your next billing cycle so if you didn't pay and then you have a new bill and then it's two weeks in so it could be upwards of two and a half months thank you any other questions I will say just about just about the map I mean it is that people are spread out all over town but you know if you look closely you can look at in the South ridge and some of the other more expensive neighborhoods you aren't really finding that many deposit payers in there so and so that's why I'm you know because I believe until I see proof to the contrary I am just going to go with it with what I see anecdotally and in terms of national statistics that this credit-based policy ends up targeting poor people I know that wasn't the intention so I support the homelessness deposit waiver but I'm not part of the consensus on you know supporting option option four but I do support the improvements to the plus one I know this is ready Dan but I didn't have one question since we have and they may do this but it's discouraging to find out that they're at whatever level their support there is an agency that we've been proactive the city's been proactive on and yet those that need assistance that are having such hardship fail either fill out the application even though they've been told or show up for an appointment now I don't know if they provide like for low-income housings homebuyer assistance and things like that to educate people more or credit but and this isn't something that we would get involved in but I'm just wondering if some of these agencies that work including the one the ministries offer something like that or if it's like take it or leave it here it is we have it and if you might take the initiative fine and if you don't well sorry just a holistic approach whenever they're trying to help the customers but to your to echo your point I was very surprised that 50% was declined or didn't get assistance because they didn't show up to the appointment didn't fill out the proper paperwork I'm not surprised I'm not surprised okay I think you got your thank you okay next we have actually we have I think items D&E are pretty much on the same presentation so we can just go through both of those at the same time sure well good good late morning Mario can is ours as a city manager I just wanted to bring a couple items to the board's attention that were brought up here over the last few weeks one of those is to a suggestion was made on a previous board meeting about placing certain expenditure items on that were on a pubs agenda for individual consideration and the second item was to give consideration that changing the meeting times of the board meeting so I just wanted to go over a few slides and then at the conclusion see try to get some understanding as to how the board wants to proceed further on these matters the first one was it was item was raised back in late September about placing certain expenditure items I believe it was fifty thousand dollars or more for individual consideration but before we just delve into that exact item I just wanted to go over a few things that things that are placed on the pub agenda and and why and just so you again just for the for the public that's watching or maybe streaming it later they get an understanding as how the pub agenda works as you heard earlier this morning we have number of work session items that are placed on the pub on a regular basis to bring information to the board seek direction or just really share information so that at some point in the future the board can make a a consideration whether it's on the individual consideration or even for the for consent during the during the spring and summer every year we bring forward operating budgets related to the utility to utility funds we also bring capital improvement budgets to you all for you all to review and give feedback to the staff about how we're proceeding as we build our upcoming budget for the next fiscal year or future years on occasion we have closed closed session items when we're bringing forward things related to legal matters real estate matters as as those things are brought forward and even on competitive a competitive electrical rate matter so again to make sure that we are making sure that we're competing appropriately on the electrical rates and not disclosing any information that that is that is not appropriate recently the board reviewed some information related to not-for-profit how we how we sponsor not-for-profit entities the council recently considered an item from the from Denton municipal electric also utility fund and and and wastewater funds on the not-for-profit so anything over $2,500 is brought forward to the PUB for your consideration on it for individual consideration with the staff report and then it also be brought forward to the City Council at their at one of their upcoming council meetings any time there's a procurement matter will bring forward if it's $100,000 or more that will be also brought forward and at a PUB and then for council for their consideration there are occasions where an item may be brought forward that's under the 100k threshold but usually it's for some things that are non recurring unique things that are just fall outside of the ordinary and again just more to bring to the PUB's attention and give your consideration and guidance as we bring those things forward and last but not least things that are special projects unique things that are brought forward certainly the the Weaver and Tid well report that you heard this morning the Black and Beach report those things that are that are not typically done on a year-in-year-out basis but are special projects we bring those things forward whether it's to engage into a consulting contract to give you the scope of the project allow you to give you give you some information so that you can then consider that so that the staff can move forward if you deem so if it's appropriate and then we'll bring those things forward for you for your review certainly anything related to policy matters if we're amending a policy adding a policy deleting a policy just like what you just heard just a moment ago about about deposits and things that age or so it falls right in line with some of the things that that that the PUB considers and then as I mentioned earlier just these new does not a routine one-time expenditure items that are brought forward for for your attention to review. Mouse is going a little haywire here. So we use a consent items again the consent agenda item just like with any board governing board it's allowed it's it's intended so that you have a slated items on your agenda if it's posted accordingly where the governing board can make one motion a second and approve that those slated items accordingly to again to make the agenda run more efficiently certainly a member with a city council member or governing board can pull an item from consent to get additional information from staff or receive a report or go through some details about the item and and and greater detail and then the board could then consider that individually so you always have that option but really the items for consent that we typically use those things are for more of those more routine things that that are brought forward whether it's a restocking item certainly utility funds and I gave some examples here pipes valves maybe on some occasion contract contracts with a consultant things that are done on a more routine basis for again just a cost of doing business for for for our utility operations more belts and suspenders kind of items those things are typically well they will be budgeted within the operating budgets or the CIP budgets they've run through our normal procurement procedures so they've been vetted through a bid or an RFQ RFP process so again these things are more routine in nature and the purpose of that as I mentioned earlier is to allow it to for your your agendas to run more efficiently and the intent is to allow the board to have higher level discussions whether it's regarding policy matters or other important issues so that you have some time to really delve into the topic have debate amongst yourselves develop develop consensus and give staff direction so that we can move forward so that's really the use of the consent and the agenda and not many more slides I mean certainly we just want to get some direction from you all if you want to consent consider excuse me continue using the consent agenda process and how it's used as described earlier or if you need additional information or if you want to go a different direction we're just here to present some of this information so that we know how to build your future agendas and I'll have comments questions yes is there a mechanism or a tool where we store this information like you just told us like some procedures and policies that we follow as as a board but we don't actually have I mean I imagine they're in our minutes if we wanted to go back and look and see what we do but in this situation we have we we had a situation where a board member wanted to change something that we do it's really a loose procedure but as you pointed out it's something that we typically do well what we've what we've done at least in the time that I've been here obviously you have the minutes that you can always go back and see and so you know any board member is welcome or any member of the public is welcome to reach out at the city manager's office to or any of our public utility or see me any utility departments to to try to get historical information of what a previous board or even a more recent board decision was made so we can look at the minutes the other mechanism which we use is the ACM new business matrix so as items are brought forward at the end of a board meeting at concluding items if there's something that you you or any other board member would like to get more information on or would like for staff to do some research on we take that and then we we work internally as far as a staff and determine the amount of time it might take to to research a matter and if it takes something that takes a little bit more time then then what we try to do is bring bring that information to you at the next board meeting to give you an idea of when that item may be forthcoming so kind of schedule your your discussions accordingly and the other thing that we're doing to that's at least relatively new thing based on some other comments that were made in previous boards is to try to keep a track of upcoming board agenda items so things are of higher of a higher importance not necessarily just typical procurement things but things that may be a policy matter or just things that that may require some discussion or a consultant that may be coming forward we'd like to keep track of those future agenda meetings so that you as a board kind of getting a feel for what's coming in December or coming in January as we start building those agendas is that answer your question or sorta sorta okay we can visit later and to kind of get a little more details I guess I guess you know maybe a handbook or bylaws or something like that oh okay committees will have you know something that you know outside of Robert's Rules of Order that governs their activities and rules procedure yeah we can certainly we can certainly build a rules procedure book you know in terms of incorporating how we've typically run the meeting we certainly have that for the City Council and but I think that the feedback Mario is trying to get from you is kind of an explanation of how something winds up on a consent agenda a lot of time there's there's sort of a call there depending on how busy you are but you know it's it's we can certainly put you know something together for a few pages that kind of dictates how we're gonna put these agenda yeah I was really using just the opportunity to bring that's kind of on I would I would like that I think that would be helpful and it'd be helpful we're gonna have some slots opening up and when new people come on I and I don't know what y'all are gonna think about this I'm curious to see how the rest of PUB feels about this but you know since we're an advisory committee to council we're in an advisory capacity to them they obviously have you know so many things to deal with because it's the whole city so I understand why they need a consent agenda I do understand that us having a consent agenda definitely makes meetings shorter I understand that but I myself would support doing away with consent agenda for the public utility board so that then the public can see that that everything that ends up getting voted on by council even utilities items that go on their consent agenda have been vetted and discussed or at least had the opportunity to discuss on the public utility board I think that would be a really good move as far as you know a gesture to the public you know showing what what we do and how seriously we take what we do on the UB if an item comes up that's just you know a simple item hey we need this equipment and here's why we needed any questions no then that's you know what five seconds ten seconds more I don't think you know looking around the room I you know I I can't imagine that we would have you know huge conversations on items that appear to all of us to just be okay that sounds good you know we don't need a big PowerPoint presentation on everything but just to show the public that we've had the opportunity before it goes on the council consent agenda anyway I would I would support that doing away with consent agenda for PUB thanks I think just because it's on a consent agenda doesn't mean that we aren't paying attention and vetting it and asking questions and still have the opportunity to remove it from consent agenda for a further discussion there are some things that are just routine in nature and and I support keeping the consent agenda for those reasons but I love the work sessions that we're doing getting into those things and if we've gone through a work session and v etted it very carefully then it could go on consent agenda I don't want us to you know act like we're not paying attention I don't know what the thing you said we are vetting those things we do take it seriously it I understand and again I mean when when things come up on the consent agenda I read everything I know we all we all study everything on the consent agenda contracts oh yeah no life so yeah no no I'm not talking about so on the one hand there's like what we do you know which is and you know and I know we're all studying it but just in terms of perception to the public I think it would be a good public relations move to show them on camera that we're doing this because they can't see us and again I know I myself know that we're working on this stuff you know but as far as the public's concern anything that doesn't happen on camera in this room around this table they don't get they don't get to see it so we've opened things up so much in this city and it's having a positive effect at a critical time so anyway but just to be clear that I do know I know you're doing the work I see you know I see it and I do know that we can always pull something so I'm really thinking almost exclusively about perception issues any other opinions consent agenda you know these things I don't know how much time you say but doing consent agendas it is I have seen it where we've we 've had consent agenda items after a work session we've already spent a lot of time on so you know why do you open it up for discussion again after you've already discussed it you know having the opportunity to pull one at any time plus all the backup is there and it's the backup is there not only for for us but also online you can pull the I legislate backup material it's open to the public so I don't think the consent agenda is there to try to hide something certainly it's just to make it make it more efficient and if if if we leave things on the consent agenda we always have the opportunity to take it off is my if there's a question or some clarity clarification or something like that so the information is available is that correct yes ma'am all agenda items have agenda information sheet and then if there's a contract a contract and any other supporting documentation actually I think it's rare that we don't have at least one item pulled off of the consent yeah I agree it's very I think we had one meeting in the last couple years where historically I think when they've been pulled it's it 's one quick question a lot of time presentation or need to abstain from a vote or whatever yeah yeah there's something interesting that you just wanted to get an overview absolutely okay so what's the direction yes keep putting on the consent agenda but just know that it may be pulled off okay so just continue it works well keep doing okay as long as the information is available to the public yeah it's it's online all the backup is there I think that needs to be stressed that even though it's on a consent agenda every bit of the backup and supporting documents or whatever it is is online yes so thanks for thanks everybody for discussing that and thanks staff for putting that item on the agenda the next item is again as I mentioned earlier but consideration of scheduling future PUB meetings meet excuse me PUB meetings into the evening only one slide as you know we the PUB meets on the second and fourth Monday in the morning at 9 a.m. there are some options that the board can consider as listed here on this on the on the screen you can continue doing the way you've been doing it you can go to all the evening meetings or you can do a hybrid where you can alternate one in the morning one in the evening or consider other options that we did look at just some quick scheduling just a little back at just some logistical things just so you are aware didn't go to every single day of the week but this is a very busy room it gets used quite a bit and so as you know we record all our PUB meetings so video record and stream and and it's recorded so that people can watch it and into the future past meetings and so there's some quick checking with the city secretary's office at night so if you were to keep it on say a Monday if you were to move it to a Monday night meeting just to make you aware there is a conflict with the Traffic Safety Commission meets on the first Monday of the month on the second the historical landmark Commission meets on in here the third meet the third Monday I don't believe there's any conflict based on what I could find at this moment and the fourth Monday I don't think they meet every single month but the zoning Board of Adjustment meets on those fourth Monday so I think those are more ad hoc but they may have a more of a something schedule on a periodic basis but just to make you aware of just a little bit of the conflicts that may occur doing a moving it to again not dissuading you just letting you know that just the scheduling issues - right was there any is there any problem with bringing it back to where we used to have the meetings is it because we don't have media in there how hard would it be to include media in there we didn't look at that but I believe it was brought here because hey it's a hall it's a visible icon and you know you can easily get to again the multimedia assets of it as far as the connectivity and the use of the cameras and so just to make it available to the viewing public is why what about the downstairs room there's no there's no man chambers council chambers does chambers does I had not not checked that schedule so I get this an option I mean my opinion personal opinion is I would like to see us do more evening meetings yeah I don't know if that's every other you know once a month if we have two a month one is gonna be in the evening one in the morning I know we've had evening meetings in the past to accommodate public comment when we especially when public comment on transmission line locations or substation locations things like that so I think it's again just because it's the way we've always done it doesn't mean it's the right way and so I like the idea of an evening meeting if we can find on a regular basis would it be the fourth Monday or the second Monday of every month I 'm all for it I don't know but you said the third Monday was the one that was open in here as far as I can tell second and fourth Monday is our that's correct and we have no bumping rights or anything yeah what about does any group or I mean you said you don't know so that you didn't check into that but just offhand if there's no group that meets in council chambers on Monday evenings at all there then maybe just consistently Monday evenings in council chambers as a I'm just throwing that out there yeah and when we're talking about evening are we talking about five o'clock or are we talking about four o'clock or three o'clock what do we it came out of part of the interviewing process where you know we the community needs to have an opportunity yeah yeah I just wanted more often a little bit better well just a great for a good historic landmark committee I think they start their agendas at 5 traffic safety is at 530 530 traffic safety so council meeting starts at 630 on Tuesday nights but they have work sessions start a lot earlier than that on those Tuesdays so it's really more up to the up to the board's call and your availability as to when you'd like to do those yeah yeah I would advocate for a time closer to you know 630 so just so that we know working people I mean everybody has different hours some people work nights but you know so that most working people can you have a commute I shouldn't even say most some more than otherwise would be able to attend 6 6 30 time frame okay I like six yeah so okay so we'll look at that time are you wanting to do the one in the morning one in the evening or all in the evenings or which I like alternating I think it gives more more opportunity for people to see it live or come here you know in person if you alternate I personally don't want to see any change at all but I'll go with the group on this you know and also they might not want to meet me at 6 o'clock of when we do have an anticipated public comment items that it can be scheduled specifically in the evening because we have had public comment items at 9 o'clock on Monday and we don't get a lot of public comment so so we 'll look at having again that you meet on the second and fourth Mondays so again just trying to narrow down this focus here so we know what to do would it be safe to say that we'll do the first meeting of the month in the morning and the second meeting of the month in the evening yeah is that okay yeah okay and then we'll look at see what's available whether it's here I know there 's conflicts already but we'll see what's available here if this is not available at all then then we'll look at the chamber council chambers for the evening meeting on that second sure yes sir and then have the meetings here in the morning is that okay yes yeah anything else on this item I guess I'm a little concerned about the impact on staff who already spent a lot of time up here in the evenings and the cost of possibly adding another business meeting to that has been a discussion internally but I think we can work around that certainly the working through on the video side of it just the actual recording of it there is a that's just another meeting added to that staff and then we had the recording secretary component so there may need to be some adjustments internally as far as how that's done and some assignments or or how it's done or who is done by so so we'll have some conversations internally kind of try to try to make sure that no single person or single persons are are overburdened because that is that can be quite burdensome especially if the same person is doing multiple committee meetings because there's they're really a part of that recording secretary or the as far as the videography and I don't want to look at Kim because we'll work through that and make sure that that not one person is over burdened. You're right. You're in a direct line of sight. You know Charlie if you have more things on consent agenda you don't need staff here. Anything else? Thank you. Okay. And actually there's no action item coming out of the closed meeting so if we can move that to the end of this meeting go through our regular agenda at this time so that anyone who does not need to be here for the closed meeting can leave after that so all right so we'll open the regular meeting now at 1159 and first item items for individual consideration first item A which is consider approval of the Public Utility Board meeting minutes of October 23rd 2017. Are there any comments questions changes additions subtractions nothing hearing none those minutes then will be approved as submitted. Item B is to receive a report hold a discussion and provide staff with direction. We need to make a motion sorry. We need to make a motion to approve. We have it in the past. I don't have to have motions and seconds and all that . Okay. As long as there's no changes. Okay. Yeah correct me if I'm wrong. It's kind of approval by acclamation. Item B is to receive a report hold a discussion and provide staff with direction concerning the approval of a public works contract for the Cooper Creek interceptor 1 & 2 project consisting of the replacement of approximately 7,000 feet of 21 inch and 24 inch clay sanitary sewer with new 84 inch fiberglass reinforced pipe and 30 inch polymerized vinyl chloride sanitary sewer along Cooper Creek. All right good morning board. Good morning. I'm Todd Estes. I'm the City Engineers. My first time to be here in front of you so I'm a little excited. Good to see you all this morning. Cooper Creek interceptor 2. This is phases 1 & 2. Phase 3 was actually done five or six years ago and it sounds a little odd that we're working backwards in the sequence here but for whatever reason that was the process and progress through the design of this project. Phase 1 & Phase 2 closes out the long-term needs what we need for this Cooper Creek interceptor. We have before you for consideration a contract with Condi Construction who was the low bidder lowest qualified bidder and responsive bid der at 3.1 million dollars. You can see here on the map that roughly the limits of phase 1 & 2 extends from Old North all the way on the top of the screen there under loop 288 down under University Drive and almost over to Promont ous Parkway. There's a couple of different pipe sizes in this and we'll get into why that's important here shortly. Existing interceptor is undersized to meet today's demand and for the future demand. So what this actually does is it increases the capacity of what we can provide for the future. It's also replacing 50 year old infrastructure with infrastructure that should last us from now and into the future. This project will provide the capacity for the ultimate development of this entire service area so as the entire area starts to develop more people come in more business come in we do have the capacity here to handle it. I love this mouse. Just briefly we had eight respondents you'll notice seven on the list here these are the seven of the eight that are considered responsive bidders. What that means is is they actually put in all the requirements that we asked for as part of the construction package. When we send out to bid we told them here are the qualifications that you need to have to be able to do a project with pipe of this size. We've got 30 inch pipe for the majority of it then we go to an 84 inch pipe. So it's a very large pipe especially for sanitary sewer line. The apparent low bidder that is the one that you don't see on the list that person did not meet all the qualifications at least they didn't include in the submittal package and then as we went through and we talked to the bidder purchasing department followed up with them said want to make sure that we just didn't miss something with this because you are the apparent low bidder they still did not supply sufficient experience to show us they met the qualifications. Condi construction company then by default became the next lowest bidder. Their increase in cost was about $150,000 over what the original apparent low bidder was. Still all of this was considerably lower than what the original engineers estimate for this project was was just approaching four million dollars so we're a good step below that. Our intended construction start is January of 2018 we expect it to go longer than no longer than about nine months. A lot of this is primarily through open field so we don't have a lot of constraints and restrictions that will slow us down. In short keeping this brief I'll be glad to answer any questions but staff does recommend you approve the contract condi construction for 3.1 million dollars. Any questions? Questions? I want to hear more about the 84 inch pipe. In what vein sir? Well it's quite an increase from what's there now. Seven times existing capacity and you're connecting a 30 inch to it? Yes sir I said there's a variety of connections but we do have both PS Aurora and Jim Wilder the design engineer here to answer the technical questions. I'm Jim Wilder I'm with the engineering department. The reason we have the 84 inch pipe is we're actually using it for storage. The 84 inch pipe gives us about a half a million gallons worth of inline storage to allow us to store the peak flow during the large rain events and that way we don't actually have to build additional infrastructure at the Cooper Creek lift station and downstream. We figured that it ended up probably being about a $800,000 savings to the city to do it that way as opposed to building additional infrastructure downstream. Thank you. And this as far as the use of the storage area is this the same drainage system where all the flooding was back in the big rain when they're well 2007 I think it was. This is this is what backed into the neighborhoods because it got it couldn 't handle the flow. Yes the the Cooper Creek basin flooded of course the concrete basin also flooded I mean they all flooded but yes there were pretty severe flooding behind the area that's just north of University and the subdivision west of Old North or east of Old North. Okay thank you. Just go back to the numbers. Yes ma'am. What was Atkins thinking? They didn't want the job huh? Must be busy. I mean I like it when they're it 's fairly compressed that means you had a you know yes good bids. It's very compressed throughout the top six there. Yeah Atkins was a little bit outside there yes ma'am. Okay. Any questions? Questions? Comments? No. This is an action item so we need a motion on this item. I recommend approval. Second. We have a motion and a second to approve. Further discussion? All in favor say aye. Aye. Any opposed? Same sign? Motion passes. Item C is to receive report, hold discussion, and provide staff with direction concerning the approval of professional services agreement for engineering design services related to the design bid phase and construction services for the Lake Lulz water treatment plant phase two rehabilitation project. Tim Fisher. Good afternoon. I'll go over this item. My intent was to have this presentation in the backup so I 'm sorry but we'll go over real quick. Make sure okay. Believe it or not this project actually started a little over a decade ago when we did our preliminary design evaluation for the Lake Louisville plant. We hired Malcolm Perney at that time to look over all the priorities for doing work at the plant. We did the majority of those with our 2007 upgrade. That project actually took a fair amount of time to get designed, get built. I was about 32 million dollars worth of improvements. Very focused on the process, upgrading the process, and then also modernizing the equipment. So this goes over a listing of all the improvements that were done a part of that project. That one was completed about 2014. So we've had an operational now for a few years. Major work on almost all the treatment units and processes. These are some of the examples of some of the work that was done. The one in the upper left is the ozone contactor. So adding ozone to the treatment process for consistency of treatment and regulatory compliance was a big component of that project. Along with revamping the flocculation sediment ation and filters. So a lot of heavy lifting and upgrading the plant occurred in that. Phase two upgrades was budgeted not too long ago. We basically wanted to pick up where the other project left off. We had actually gone 23 years at the old facility before we did major capitalization. And it's a lengthy process to go through the planning and the implementation of that. One of the key areas that didn't make the cut the last go-around was the motor control center. Our intent was to do that. But we ran into some cost management complications and we really needed to put that in an exterior building. And then that became something that we didn't feel we could tackle on the original budget. So we're trying to do that now in the phase two upgrade. We also want to deal with the server that we have for our SCADA system. Our SCADA system server has been in a closet from day one. We're going to try to move that upstairs to what is now a training room and then try to provide that type of space in the new electrical building with the motor control center. So that's a big piece of it. We have a variety of other things relating to flow meters and polymer feed equipment and some raw water pump station improvements. That's a picture of the original motor control center. It was actually revamped by staff in the mid 90s. So we've been able to keep that motor control center functioning through a major rebuild, but that was quite some time ago as well. So it's time to kind of replace that equipment. It's pushing 60 years old. Along with this project we had a zebra mussel infestation in both lakes that captured a lot of our attention initially. We went through a zebra control management preliminary design study that did involve Arcadis. We are now moving into the capital stages of that. We felt that this was similar work and so we incorporated it into, we've actually got three projects, zebra mussel control at both facilities, Ray Robertson Lake Louisville on the raw water side plus the phase two upgrades at the Louisville plant. I think this picture shows some of our early discovery at the low spot. That's actually not a zebra mussel infestation. That's where the zebra mussel shells end up and accumulate. We've also showing them within our raw water, or excuse me, our pre-ozone contact rep at Ray Robertson. So some of that debris gets moved in there and so those become things that we have to periodically physically remove and what we're trying to do is use chemical treatment processes to prevent that infestation to begin with. So this is a summary of where we were from a budget standpoint as far as the ten million dollars for the Louis ville water treatment plant plus the zebra mussel control measures. So we had about 1.7 million budgeted for engineering and we had about a little shy of 16 million of capital. We went through an RFQ process looking at nine engineering firms. We actually started off with an SOQ which is an acronym for statement of qualifications who are out there looking for who are the engineering firms that we want to solicit proposals from. We basically had four responses from that statement of qualifications. We issued an RFQ and got responses from three. A couple of them did partner, Fries and Nichols partnered with Arcadis and they were the firm that we selected. Fries and Nichols designed our Lake Ray Roberts plant, had some design prior at the Louisville plant and then Arcadis was brought in as their sub-consultant to help with the zebra mussel design. So this scope includes final design, bid phase and basic construction services. It doesn't carry full resident rep through construction. At this point we're not necessarily sure we need that level of support but it does carry construction phase services through the approximate 18 month schedule for the project. This is where we started. We had a fee of about just shy of 2 million. We're a little over budget on that so we went through a negotiation process. We started zooming in on the construction and the construction budget so we had some issues there that we had to trim some of the scope items out of the construction budget to get it down to budget level and then this is where we landed on the engineering fees. So we had just a little shy of about four hundred and seventy thousand dollars worth of fee negotiation through this process. We got this added level that we feel is more consistent with our budget and what we think is a reasonable cost of pay. This was the engineers estimate that came up just 114 million so we're within budget on the engineering estimate going into the design and I'll just open it up to questions at this point. I'll go back a couple slides. Sure. Which one? Right there. Okay. What is the normal percentage of engineering cost to construction? It's a good question. What we found from our experience at the Lake Louisville phase two or phase one upgrade we were just a little over 11% of construction. We also looked at a consultant benchmarking service that primarily focuses on consultants and how they are seeing what the market is for fees and we found similar numbers there. So our experience has been about 10% until you start getting into the construction phase component and that's gonna bump it up. Okay. Thank you. What is the length of time of the contract? We have in the schedule right now about 10 months after we execute the contract to do the design phase . We have another three months go through the bid process and we have 18 months for the construction and that's the preliminary schedule that we have right now. So it'll be approximately a three-year process. Three years. From start to finish. And this is like a not to exceed contract? This is a lump sum. What does that mean? It means they'll produce the scope and we will pay them this fee. Okay. Which is fairly common. Most the consultant contracts are lump sum. But still limited to? Still limited to. I mean it is what it is. It's not. It is a fixed fee contract. Any additional scope we would have to bring back to you? Yeah well yeah because we look at them where it's gonna cost so much an hour sometimes and not to exceed X amount but we don't know what scope of work is necessarily. Most consultants would prefer to work under a fixed fee lump sum basis and most of our contracts are lump sum particularly if you can define the scope well. Yeah. Okay other questions? Anybody? I'll just say I really appreciated the level of detail of the zebra muscle manual. I learned a lot about that and ended up finding it just really interesting so I appreciate that level of information. Tim has become a zebra muscle expert not by choice. Not a necessity. What we're finding is that the bloom initially tends to be a little worse than the ongoing but we still see that it's something that we need to put in systems in place so that we don't get a problem in our pipe systems in particular Lewisville because they're smaller diameter they 're longer and we don't need debris accumulations in the low spots. Okay then is there a motion we need a motion then on item C ? Move approval. Second. I have a motion and a second for approval. Any further discussion? All in favor say aye. Aye. Any opposed? Same sign. Motion passes. Item D is our ACM update. Sure real quick excuse me in your agenda you have a number of articles that were provided to the board I believe one was asked to be added to the how to kill American solar that was asked by one of the board members to be placed and so that is on your on your list and the link in the agenda if you like go through that. Also on the matrix I believe we've covered just about everything that's been asked on the matrix I will ask that you look at item number 15 it showed that we would have something for you in November that should be December because there's only one meeting in the month of November so there's probably just a mistake on staff's part as far as thinking it was a second meeting but we'll bring the the billing issues on on your wastewater and the DME bill date change into your December board meeting so and then I think we also added a rules of procedures item number 16 to the matrix for future consideration. I think at a couple meetings ago I asked about the Tesla solar and if what whether or not we were going to see how that was going to impact us I don't know if anybody's been clamoring to do it but. Comments about the ACM updates? Yeah I had a comment and a request to better reiteration of the previous request about the the Puerto Rico item so I was the one who asked whether there was an interest among our any of our DME linemen to help get the power back on in Puerto Rico and while I really appreciate this this information provided about you know what what might be involved in that what the challenges would be it looks to me and correct me if I 'm wrong that DME linemen still have yet to be surveyed as to you know whether there would be an any any interest in this and so of course I do understand reading this and just you know for the the public it says you know there there is a need for a team of about 20 line workers particularly on the island of St. John's but some of the crews are having to stay on on cruise ships and have to be shuttled to and from the island so there are those complications the commitment time for linemen crews is typically at least a 30-day period and could be as long as six months so I would completely understand why somebody didn't you know if why somebody wouldn't want to volunteer for that but I could also understand why somebody might think that would be a really great opportunity to help out have an adventure you know when one person's nightmare you know 30 days on a cruise ship you know with a bunch of dudes you know some for some people that just be great you know great time and I don't I don't know that they're volunteer I think they're getting paid well yeah yes I'm sorry yes I mean I mean voluntarily you know within they're getting paid voluntarily come forward to say I want you know I would like to do this you know so that was my kind of initial and I do appreciate all this information that's part of the information I wanted but I also wanted to know you know are there any guys who would say hey you know count me in I'd like to go there and help out because if so then the questions about you know what the challenges are you know you hear the pros and hear the cons that could be determined by by the linemen if we can't afford to send to lose you know 20 people then we see how many want to go and let those go that's just my suggestion I think the challenge is how much it costs I mean I'd say it always comes down to that so we haven't done a survey as you were talking about for the staff but I know we would have people who would be willing to go it is a paid it is paid time the question would be you know how long would they be there and really can we have them be gone from the city for that long and I think that's some of the logistical challenges that we looked into and I know Brent can talk about that a little further if we need be but that's we definitely would have people who would want to serve sure they certainly want to help Brian get the question though I think it's important for this kind of discussion this the city doesn't generally basically volunteer to impose itself on these type I mean as I understand it FEMA FEMA's got control both those processes they're actually the ones inviting the utilities in coordinating reimbursement payments that sort of thing so a lot of time when when you've you've got mutual aid requests it's a very orderly purposeful request of staffing and then you've got to follow the all the FEMA rules who's ultimately responsible for coordinating that so and determining whether or not there's reimburse ment potential as well so in this particular case they they have taken in and of course the situation over there's got a little more ugly given the previous contract with the Montana firm but they are controlling who is coming in and out of there and who's going to be hitting the reimbursement for that so that's typically how the process works is is you don't necessarily volunteer to go you're basically call on and they assume certain levels of responsibility and liability at that point for coordinating the process so yeah I do understand that but thank you just a lot more complicated with this not being in the contiguous United States and FEMA and Army Corps of Engineers and lots of different agencies involved okay okay thanks Charlie I have a real quick just kind of a question regarding a past item here about the website data that I requested we talked a lot about public involvement we talked a lot about where we're gonna have our meeting so we can have the cameras we talked about our agendas and our minutes being posted and the website data that was provided in that memo was fairly limited it only had counts for who watches the strain and and I think that's a shortcoming and I don't know if if if I should approach the the memo author about making those and put some improvements there or if you guys can approach them and ask if there can be any improvements I mean the the every click made on a website is tracked by the web server so it should be not too difficult and free to generate those you know those metrics we can absolutely follow up to see what we can do to improve the caliber of the data that we're getting out the website it just be nice to know you know since we're putting forth effort to make things public to know find out if people are paying attention or not yeah we'll ask Mario to put something together for the next step you'd be meeting on areas that we could improve in thank you okay concluding items which is an opportunity to place new items or items on future agendas as well as the matrix added a couple things to the matrix already so looks I have a rules of procedure and then something that was missed on the Tesla solar roof panels future agenda items suggestions I have one future agenda item suggestion and then the other is a possible discussion but also possible something that staff could just research and and you know add add in written form to future matrix the future agenda item is has to do with DME substations and the substation cost this is under the old management you know a bunch of new substations went on online and we were told what the purpose was were for those substations and what the cost would be and now that you know there's change of management I'm thinking this would probably be something that probably best to wait till then the new the general manager comes in I would I think it could would be really productive for us to revisit that under the new general manager and just to see as far as what the substations that have yet to be built or where or where improvements haven't yet occurred or and especially where contracts have not yet been secured just to look over what the projected costs are what the process is do we really need this is that you know etc so just kind of a fresh look on these things that are already on board you know even if it turns out okay yes you know yes we really did need all of those just you know before we I don't know exactly how much money you know we've spent already on that and how much is yes to yet to be spent but as far as controlling cost going forward just have a fresh look on that would be nice because we did have like a FERC reliability study which is what where these things come out of so maybe that a refresh and I can tell you our staff Brent Heath is also just kind of been leading the charge on that taking a look at the this five-year CIP making sure that we have things broken down into mission critical to comply with FERC as well as any customer service issues we're having and then what may be a candidate for being put into a category of future planning so we're heading down that path and in your right our new GM basically has already stated that's one of the first places he wants to start taking a look at so hopefully we can get you some answers in the next and when is he coming he starts November 27th excellent and then the other and this is I'm guessing this this might be probably more of something to put in the matrix for a future meeting but something that's a matter of public interest that people in the public had come have come to me with and and that's about issues about water pressure I I did some you know research on this on my own but but you know I assured these ratepayers that that's that's that staff would you know likely have a specific dent in specific answer be able to answer that question the first was from ropes and ranch actually and I haven't tested this myself I don't I don't live there but I somebody it contacted me as a member of PB to say that they have really low water pressure at ropes and ranch and what's up with that so I I didn't know anything about that but I assured them that I would ask and the reason I'm asking that publicly even though I could just send an email is just to show people out there if anybody's watching you know these are the kind of things you can you know you can ask and that the public utility board will get get answered for you so and then the other was a rate payer who contacted me and I wanted to know you know how common this kind of situation is a rate payer who had had a leak in her a very big leak actually I think a couple leaks in her home that were ended up being taken care of by the city under the low-income you know home improvement plan and program through I believe community development and the plumber had found that it looked like the leak was possibly caused by really high water pressure on the city's end and so he he told the resident that they should look into this it was I think it was that I don't know what the units are that water pressure is measured in but it was something like you know a hundred whatever units of water pressure when it should be only 60 and so in she told me that she was approached by the city and that she was asked to sign a release form absolving the city of any liability for the her leaking pipes so I I was curious about that I wondered you know why we would do that and I told her don't sign that waiver yet you know hold on to that until I get an answer I told her she would probably consult the lawyer on that it but I didn't know I don't know if you can answer that now but I wanted to know how common this practice is I was surprised by it there will be time we have an active risk management department that works closely with my office in the city attorney's office and there are times where we will go out and assist some of our residents but in this particular case I'd really need to get all the facts I'm not familiar with the case that you're bringing up but where you know if we could get the facts we're happy to look into it okay yeah sure yeah if you could just either you or or the resident contact either Mario myself will look into it right away okay thank you very much thanks okay any any other items PV related okay hearing none then we will and actually we will not come out we will adjourn out of closed meeting but at this time we'll go into closed meeting for deliberations regarding real property Texas under Texas Government Code 6