Mar 26, 2018 Public Utilities Board on 2018-03-26 6:00 PM

all the March 26 2018 public utility board meeting to order we have work session three items and work session to begin with so let's go ahead and get started on those just item a is going to be to receive a report and hold a discussion and give staff direction regarding the use of unbudgeted capital project funds for stormwater drainage projects so mr. chairman and pb members my name is Tony point I'm the director finance for the city thank you for having me tonight first of all let me just say that over the last several months really beginning back in August we had a lot of staff internal meetings to go over all the city's CIP programs including those that are geo funded and as a result of many of those discussions we were able to identify shortfalls as well as some savings and a number of other issues throughout the city's financial system that allowed us to aggregate dollars from projects they hadn't been so it hadn't been completed so there's just been a whole team effort over the last several months on that front and so so this particular item was one of those items that we were able to identify back in January of this year late January 30th this year we did meet with the 2014 bond oversight committee to go over the specific projects that were included in the 2014 bond program we also included projects from the 2012 and even for the 2005 to make some recommendations to them regarding the funding for those projects and so what we're gonna I'm gonna go over to with you today will be specific to those drainage projects so what I want to cover real quick with you is the 2014 geo bond programs that are pertaining to drainage projects the shortfall and that we 've identified in those projects so what it would take to get those projects fully completed and fully funded I'm gonna go through also as well through the history of the drainage division division and the associated drainage fee which is really where some of these proposed the proposal we're gonna make to you today where where the money is coming from to get these parts completed and then finally just go ahead and discuss with you just the status of where the money's coming from which is the channel rehab funds so the 2014 bond program included a number of projects that are listed here I think many of those you're familiar with I will say that the pecan Creek drainage project is a project that we feel is fully funded and so there is no shortfall in that project there is so an associated project that not listed here for phase three and four of that project and we've identified funds previously with the council to fully fund that particular project thing the design work on that is an in in process this particular project is specific to pecan Creek phase phase two and that is located west of Locust to Prairie so again in identifying these projects with the bond oversight committee we found that these projects were there was a shortfall for mingo and a hinkle drainage as you know that was a major project that both the bond oversight committee and also the associated blue ribbon committee had identified we and we estimate that the shortfall for that project is approximately 1.9 million dollars the following three projects you'll see that Oak Street was not a project listed previously but we've aggregate we've put together we've combined these three projects and we've called them now the drainage downtown drainage projects felt that that was a an aspect of that of those projects that need to be completed as well and that's to some degree contributed to some of the shortfall but the shortfall for those three projects we've estimated at four hundred seventy thousand dollars the total shortfall that we want to discuss with you today is two point three almost two point four million dollars really quickly the drainage fee the drainage fee was adopted actually back in 2002 prior to that in 2001 the city had to recognize and adopt the municipal drainage utility system act in order to be able to to set that particular fee so that fee was established by ordinance 2002 019 back in 2002 I will tell you that that fee and the associated schedule has not changed since 2002 that has remained and I 've provided in your backup the establishing ordinance and that has continued through the 2017 rate ordinance that was adopted last year in conjunction with the city's budget and also with the with the wastewater fund in particular the intended use of those drainage dollars was to cover the O&M component of not just the drainage but also the watershed protection that was in existence at that time also associated general obligation debt that had been issued and was outstanding and also some additional debt that was subsequently issued after that time out of the wastewater fund as revenue bonds and so I'll be able to kind of walk you through any questions you have on that but I will tell you that this is the final year of debt service on the geo bond debt we anticipate that the remaining wastewater bonds are scheduled they're scheduled to be paid off in 2022 so what you've seen and the backup that I provided you you've seen a decrease in that annual debt service that has contributed to some of the money that's been transferred over to both capital projects and specifically to the channel rehab funds the other component as well is that over the years there's been some additional work that has that the watershed protection group has undertaken one of those is mosquito abatement those are those costs are allocated to the general fund so the general fund has actually increased his contribution to to that particular operation and that's also resulted in some of the additional revenue that has gone into our capital project program just really quickly approximately 5.5 million over the last 10 years has been transferred to to this drainage channel rehab account 1.7 million has been utilized in various drainage projects and as of February of this year we had approximately 4.1 million dollars that 4.1 million dollars in the 1718 CIP have not been budgeted there are a number of projects that staff is anticipating bringing forward to the PUB and also the City Council for consideration to be funded out of that 4.1 million but again we anticipate that that will continue to grow even beyond potentially those specific projects and so what we're proposing today for you is to to allocate 2.2 million or to authorize 2.2 million from this drainage channel account that is unbudget ed to be utilized to fund the gap of those projects that were included 2014 bond program again those are drainage projects we feel that they are very appropriate to be to be funded from this particular source and again we don't anticipate that using these funds in this particular manner will have any negative impact on any anticipated projects to be brought forward to you for the 2019 and 2020 CIP program so just in just in wrapping up we're requesting the use of 2.2 million dollars from the drainage rehab fund to be used on these particular projects that will be included in a wider budget amendment that we 're anticipating to bring forward to the council tomorrow that we identify a number of other funding sources for a number of other projects beyond these drainage projects for council's consideration and so we did want to let you know we did not bring that budget amendment to you as an individual item because it'll be included in a much wider budget amendment so that really kind of wraps up my my presentation to you be happy to answer any questions I know we have some folks here from from drainage as well so if you have specific questions about those projects be happy to go through that with you. What accounts for the shortfall in the Magnolia Hinkle drainage project that's a significant shortfall? Chad let me ask Chad he's our drainage engineer. I'm I'm Chad Allen I'm the deputy city engineer I think it 's it was listed in the AIS there's increased construction costs over the years we're seeing very high construction costs more than 10% a year inflation on construction costs and when that budget was originally put together they did not foresee that also I think previously when establishing those budgets we might not have been conservative enough as we should have been so we might not have used higher contingency numbers as high as we should we might we may not have included that all aspects of the project like design or inspection so we 're much better nowadays about trying to predict when we're going to go to construction and then escalating our costs up to that date and that might not have been done so well in the past. Okay thank you. Well I want to follow up on that is a lot of concrete in here is that because is that the main material that you're using for these drainage projects because I know that's just yes there's a shortage well it's not really street concrete that's not really shown on the AIS and the numbers you're looking at but there's big concrete box cul verts that are putting into Hinkle and all of that storm drain cost has increased like it's like we said we've been seeing 10 to 12 percent a year over the last three to five years so and the original estimate was put together what year? Approximately? Not so sure about that. Between 2010 and 2012. Okay all right all right thank you. Was it a completion time problem? I mean so if it was budgeted or bid or estimated in 2012 and approved in a 2014 bond and here it is 2018 it's not done so is that that's definitely a part of it. I think that's fair and one of the things that we've done over the last six or eight months is go back all the way to the 2005 bond package cleaned out all those projects as well as everything in 2012-14 lifted them up on the spreadsheets in trying to balance the remaining bond programs I think we're there on 99% of the programs now but you're absolutely correct the time value of money is definitely been a major obstacle for us and so a couple of things that we're doing at this point is making sure that we're trying to get up to a point where we 've got plans on the shelf before we meet with the bond committees in the future and we've also just recently gone through a pretty exhaustive RFQ process where we've pre-qualified a number of engineering firms within seven different areas so we're able to get these projects designed and on the street quickly and not lose that 1% cost that we're seeing every month in the escalation of these projects. Okay and so you feel like those changes will help us complete the project with these additional budgeted funds in a time where we won't have to come back and ask for more? I mean it's your question is right on in terms of having these projects you know estimated and then waiting four or five six years to get them constructed you know they've got to go back to re-engineer everything make sure the designs are up to speed and with the construction estimate the cost that we're seeing escalating right now many of our projects have been you know several hundred thousand dollars short plus so I do think that the improvements that Chad and Todd Estes our city engineer working on are gonna have a major impact moving forward. Thank you. Other questions? This is for Tony I guess. So the drainage fees that we see on our utility bill have been funding this account that this money is going coming out of is that correct? That's correct. And I notice you said there's no impact on 2019-2020 capital improvement programs for drainage what about because we normally look five years out on that is that do we anticipate other debt are we gonna have enough money to fund these out of fees going forward do you think? Well I think that you know there's certainly some opportunities here now with with this capacity to potentially fund some additional bond issues if we wanted to do that and maybe get some of these additional projects out the door certainly I think over the next couple of months we'll be having those discussions coming back to you with a recommendation in that area in conjunction with the wastewater budget. Okay I guess at some point in time we'll determine if we've done all the all the drainage projects and wastewater projects we need that day ever comes I don't know. Pretty staggering numbers. Yeah you know at some point in time I know this was when this was in act put in place in 2002 I know it was kind of first time it ever been done so it's not first of all it's nice to see that it's actually going towards projects as opposed to debt service that's that's good to see so hopefully these things can be we can manage it where there's a lot of revenue funded projects in the future for these things. Any other questions comments? So Mr. Chairman we are asking for for direction from the PUB to move forward again we are planning to have this same discussion with the City Council tomorrow night not just specific to these drainage projects but all the projects that are included in the in the bond program. Okay so everybody understand the request? Do we need a motion? It's not actually an action item. It's not an action motion you just need direction. I'm comfortable in using those funds to finish these projects. Me too. All right I think you've you've got our all the head nods. Thank you. Okay item B is to receive a report, hold a discussion and give staff direction regarding a proposed rate reduction for residential solid waste customers. So Mr. Chairman and members of the PUB a lot of good news tonight for you. First of all before I begin I do want to acknowledge you know all the hard work that our staff at the solid waste department have done over the last several months in particular you know Mr. Ethan Cox is our director over that area and also you know Dr. Kenny Banks both as well as a number of financial staff members that have been involved throughout that process have been doing a lot of work. You've seen over the last several months a number of items that have come through you to you. Changes that we've made to specifically the capital improvement program but also some operating changes as well. I think all of that has been a culmination in getting us to where we are today and and the recommendation that we want to discuss with you this evening. So just really quickly you know our recommendation to you will be to decrease the residential rates an amount of 12%. They're listed there for you you can see that both the standard and large carts will be reduced by that amount and just request that come in. We anticipate that that if approved tomorrow by the City Council tonight by you and tomorrow by the City Council that that will go into effect for those for those meters that are actually rare actually for the billings that go out on the 28th of March so those will be kind of the first cycle we call cycle 19. So the bills that are due April 1st will be the bills that will actually have that reduced rate. Just really quickly for a standard cart if you know if this is approved and goes into effect we anticipate about a $20 savings in total for that six six month period. That's about $40 per year on a standard cart. If you're on a large cart service that's going to be about 23 almost $24 over that six month period or about $47 almost $48 that our residential customers will see. And again that will be an immediate impact. So I do want to cover with you some of the staff efforts that have gone on that resulted in this recommendation today as well as changes to our capital plan and debt service. What that means for the particular funds reserves and working capital and what the budget impact will be for this for the rest this year for 17-18. Finally we'll cover just cover quickly some next steps and also just what the general impact is of this of this rate decrease in the context of our of our projections . So speaking about staff efforts over the last several months so we've done a business unit realignment in preparation for a new management study and also cost of service. We'll talk a little bit more about that with you to just better align what those service streams and revenues are as well as the expenditure expenditures. We've revised a capital program and and also the budget process and so there's a multi-step review through the department that was a recommendation if you remember from one of the consultants we're trying to make sure that our staff out there are involved and engaged in the review of programs and costs that are happening out in the solid waste department so that so that we can appropriately vet those programs and efforts that may be going on. I want to make sure that we strengthen our business case and financial analysis that goes on with this particular programs one of the changes that was made recently this was before mr. Springer left all the finance all the finance individuals staff members that are in the utilities now report to the city's director finance and so there is that additional layer and oversight that really hadn't been there previously. Again we continue to work very closely with with our staff members in the operating department but many of those discussions happen in tandem with our finance group as well. So for the CIP over the next five years that's CIP and you 'll see that coming to you as well as part of the proposed budget for you when we come back to you we've been able to reduce that over the five years by 12.2 million dollars. There's a number of projects one of those projects that comes to mind is the mining project if you remember that project was discontin ued and so that contributes to this 2.2 million dollars. In addition these changes have resulted in no debt issuances for 17-18 for the current year or 18-19 and so there's associated annual debt service savings from that that are now being stripped out of the financial forecast for that particular fund. So the reduced debt service expense over the next six years we anticipate that that would be 13.4 million dollars based on what we know today and what's being planned and what will come forward to you and you can see that over that that time horizon that I've listed up here where those savings are and what those in those years and so those are associated reduced debt services that's the annual debt service. So again this is an immediate rate decrease you see right here on the right hand side my left your right that we think that this reduction this total percent reduction still keeps this fund very very healthy. We have minimum fund balance requirements of 14 percent of budget expenses and a maximum of 18 and we're well above those those reserves even even today. Again we'll be coming back to you with some additional recommendations in the near future. So the growth in reserves is due to decrease debt service again you go had already echoed that for you. There'll be some additional savings from some operating changes that we're making certainly as we get back our cost of service and our management study there may be some additional changes as well that they have O&M impacts for that particular fund. So just here just side by side we've provided to you what the adopted budget was when it was adopted at the end of last year and then what the what we currently project would be that particular budget or what we anticipate spending at the year of eight fiscal year 17-18. You'll see that we do as a result of some of the changes that we've made in the capital program in particular the mining we didn't just strip out those related expenses but there were also some assumptions on revenues that we've also had to pull out and so that so there's been changes on both sides of this equation and then the total expenses have been reduced by about four point three million dollars again we anticipate some drawdown in in that fund balance but again staying well above the even the 18 percent maximum that set for that particular fund. This 12 percent translates to approximately a six hundred thousand dollar revenue so about 1.2 million full years that's six hundred thousand for if it was implemented now mid-year. Some financial considerations that we just wanted to pose to you that we 've discussed internally and just let me just quickly say to you that this we believe that this is a first step in in in the recommendation that we're bringing to you we anticipate over the next three to four months when we come back to you the possibility of some additional rate reductions potentially both in residential but also in some of our other classes. So in doing this 12 percent reduction again major consideration is to make sure that we 're staying within those reserve targets of 14 to 18 percent. We also wanted to make sure that we safeguarded that fund we do have our wholesale revenue that makes about two million dollars we want to make sure that we that that we have a better understanding through our cost of service of what potential impacts could come to that particular source again two point two million dollars is a significant amount for that fund and then finally we've not made any recommendations to you today regarding commercial rates we do anticipate that there may be some changes there as well it's the largest revenue stream for that particular fund and so we want to be cognizant of the fact that that we're providing to you a conservative reduction today and and come back to you with a much more in-depth discussion about rates in total once we have more information from our cost of service and also our management study. So next steps is again we'll staff will be reviewing this management study in addition to that we'll be conducting a market study for all our rates to make sure we understand what we're able to do with those rates in particular wholesale and some of these large commercial rates that we have and then finally we'll be bringing back to you as part of the proposed budget potential additional rate decreases associated with with all these efforts we anticipate that first presentation to be for the PAB and the council be in early summer so you know we're just around the corner. You know council members of the PAB that's that wraps up my presentation I've covered a lot I'd be happy to stand for any questions again we have Ethan Cox here and if there's any specific questions on that operation we'll be able to provide those responses to you. I don't have a question but I have a comment I applaud you for going through and doing cost reductions and saying to have a rate decrease now not waiting until next year because it's our citizens money and it's not our money so I applaud you for doing that. Questions? I mean I'll second that. That's pretty incredible I mean 12% decrease in rates is pretty incredible to find that kind of operating efficiency and that's that you're gonna be applauded for that so and I'm gonna I'm gonna hold you to it that there's more reductions to come right? I guess I do have a question you didn't reduce it even more because the reserves are like you said significantly above the 18% but I think that's pr udent because you're you're going through this whole commercial review too and then once you're done with that I think we'll have a more comprehensive picture to then tighten that up even a little bit better too. Yes ma'am that is the plan. Thank you. Any other questions? So you're I guess you're basing some of the future reductions on that the cost of service study for the commercial rates will come in and we will be able to reduce those as well I mean you 're not foreseeing that we're undercharging them and somehow we won't be able to offer that reduction to our residential. Yeah our preliminary review of those rates is that there is opportunities to potentially lower those as well. Very good. I don't think anybody's gonna be against reducing rates. Well and just let me say to you Mr. Chairman that we do have you know this particular discussion as well with the City Council tomorrow there is a an agenda item for you tonight in individual consideration to amend the current rate ordinance and reflect these particular reductions now. Good very good . Thank you Tony. Appreciate it. Okay item C is to receive a report, hold a discussion and give staff direction regarding current city facilities and how to proceed with planning for future space needs regarding the Denton Service Center traffic operations building and storage facility located at 651 Mayhill Road. Thank you Mr. Chairman, members of the PUB Mario Kanazaris, assistant city manager. I wanted to present some information to you that was given to City Council back in mid February about some existing space needs that we had our service center along with our transportation operations building and some solutions that we were proposing to utilize to help offset some of those space needs and the reason we're bringing it to to the PUB is because it does affect utility operations along with solid waste and so I'm going to go through a number of slides and let you see what we're proposing and the assumptions behind those proposals. So to give you a brief overview with the presentation just to give you some history of why we're here some of the issues that were being addressed again the space needs that we have in our operations at the service center and also at traffic operations. The assumptions that were used originally through our previous analysis, some of the options that we're utilizing to solve some of the issues that are being presented, the financial implications and Mr. Puente is here to to be able to answer some of the specifics if the PUB has those questions and then what we believe will help improve our overall overall operations along with customer service that it affects our community and our constituents and then some next steps. To give you an overview of the service center campus I've outlined here in yellow the campus itself is approximately 46 acres in size it's an industrial area off at Mingo Road I believe the PUB before before I started with the organization I had its meetings over there so you should be relatively familiar with with this building and and then the overall campus. Procurement materials management is housed there our fleet services operations are housed there we also have a number of areas where we continue we where we house our our fill and dirt materials so that can be utilized for our drainage and our street operations so again just to keep kind of give you an overview of the location which we're talking about the two areas the two buildings that we're covering this evening and it was covered with City Council was the the the first one we're going to be covering is a service center here in the on the I guess your top top left my right here on the screen on the on the left side and then the traffic operations here on the opposite side of of the screen there and again to give you some history the service center was built back in 1980 the traffic operations was the building itself was built in the 60s over time the the service center has been renovated or expanded slightly over the last number of years to give you some statistics about the city of Denton it was much smaller back then back in 1980 when it was constructed and as you can see the sizes of our community now and it's certainly much larger these numbers were from 2016 and as you can also see just the amount of square mileage that the city has expanded over the years we we've expanded three three times the size of our community since this facility was opened and then the most glaring issue is a fact that back in 1980 we house a little over a hundred employees and now we're certainly double that 250 somewhat employees now are our house there and and I would imagine that as during seasonal activity or during the summer months there's probably additional employees there especially at the parks department because of the amount of activities happening in and around the summer months of the calendar year the first facility wanted to cover was a service center as again I was mentioned it was built in 1980 it's been updated over the last number of years 250 employees operate from that location it's very cramped there's no room for growth in existing configuration it's somewhat poorly configured you all familiar with it when you walk into the lobby it's not the most user-friendly location there's no one to greet you if you look behind the the first wall behind the stairs there's restroom facilities there it's also it also has shower facilities so if you can imagine the public walks in and we don't have a lot of public that utilize that facility but we do have contractors consultants that come in to do business there to have meetings etc and so when you walk in if you use restroom facilities you're greeted with you know your traditional restroom facilities also shower facilities and so it does create some awkwardness if field employees are utilizing those facilities if been out in the field working in a very muddy dirty environment and they're needing to clean off rinse off and you're also intermingling with folks from the public utilizing restroom so not the ideal situation so if so again just the current configurations of spaces it's not the most configured appropriately some previous assumptions that we use that to do some space needs back in 2015 2016 the city had hired a consultant to do a series of space needs analysis for the entire organization from City Hall to City Hall East to City Hall West our fire stations etc and one of these was for a service center and one of the considerations that was discussed was potentially having an annexed a service center annex on the southwest side of town close to fire station 7 near Bonnie Bray and in vintage and the idea behind it was to help move some of the operations to that location again as a city continued to grow but the cost of those of that facility was in a neighborhood of 21 to 22 million dollars for 40,000 square feet and so that would require bond issuance it would be years in the making and so at that time through a change of administration with the new city manager coming on board late in January the conversation was resurrected as to what options could we utilize to allow for better utilization of our existing space but also try to meet the needs of our staff as it continues to grow and again so here the last number of months we viewed a lot we 've analyzed all the spaces that we have in the city knowing that trying to build a 21 to 22 million dollar facility or potentially more depending on as as mr. Allen mentioned about the cost of inflation would be higher in current dollars what could we do to better utilize existing spaces and some of that space may be hiding in plain sight so what we decided to do is look at the existing service center and I'll show you a slide here of what we decided to do and is look utilizing the existing service center and looking at materials management as an opportunity where if we have the option of moving materials management out of the service center could we utilize that vacant space and reconfigure it into office space and so what you have here before you basically are a snapshot of the the site layout the interior site layout of the service center the first and second floor and the bottom floor where it says materials management is just under 30,000 square feet and again that is a warehouse operations that is where where departments are issued supplies from just from poles and equipment for P for DME and other types of cable to pipe fittings pipes blue jeans it depends I mean it's a it's a variety of things that are issued and distributed at our materials management warehouse but it does occupy about 40% of our square footage of the first floor of the service center and so knowing that we have some operations or some facilities and DME or excuse me a DME at solid waste we felt like we could potentially move that operations over and just wanted to show you here some photos of the existing service center and just to cramp nature in which our operations are being housed in and and I don't need to go through every single one of these pictures but but so some of you that are familiar with with the facility we have some of our parks facilities and all the other operations facility where they've been very been very creative and incorporating every single nook and cranny so they can whether it's having staff meetings or break room areas that also is incorporated locker room area locker room areas our restroom facilities that I'd mentioned earlier on the on the bottom right hand corner of the screen we utilize some of our equipment bays for staff meetings or areas for our staff to to have lunch or have breaks in our parks area which is in the top middle is is is has equipment and other supplies where they utilize to to maintain our park system and so every single bit of the space is utilized and so really it doesn 't create the necessary work environment for our staff to have the space they need to to meet during the morning when they when they get when they begin their shift to have a variety of private conversations when it requires supervisor to employee top issues it just makes it very inconvenient very difficult to have those kinds of conversations and operate out of that cramped space and so just wanted to show you some of those current conditions so the thought was with with moving materials management out of that space would free up quite a bit of space at the service center and and I know we brought this information before you to the pub before but the thought was if we could utilize an existing location existing space 651 Mayhill is the one that came to mind that's a space that is owned by the city it's a solid waste facility over at the Mayhill location it's 81,000 square feet as a former Department of Defense warehouse location where as troops were were deployed overseas depending on whatever the theater of operation they were they would they would maintain their equipment their vehicles or personal vehicles in this space and so as you can see by the pictures it's very rectangular in size for the most part it's it's a very open space it's it's basically a blank canvas we do house some solid waste carts and I know DME has some of their equipment there but we'll leave that we can utilize that space and move materials management over into into this location and so the thought was if we can move approximately 30,000 square feet of materials management out of the service center and put them into this 81,000 square feet it really would open up quite a bit of space we're looking at potentially doubling the size of materials management their footprint because some of this equipment that materials management houses over at service center is under awnings so it is protected by the elements but not completely and so the thought is if we can move most of not all of that material under a roof a would protect it would protect the asset and really give materials management the space they need to to fully function in that location it still provides some additional space for future expansion which I'll show you here in some subsequent slides it would provide for about just under five acres of a laydown yard as well employee spaces parking spaces for this location and so we believe that that would again free up some of the space and so as a result there is an investment to be made what we were thinking is if we could working with our architects we believe we have developed some at least high-level planning estimates on probable costs on this construction project to to allocate about a million six for moving materials management there is an investment to be made on the laydown yard and other parking that's required for that location so all in with construction it'd be right at two point five million dollars we would require some additional furniture fixtures and equipment to out outfit that facility some design fees would be incorporated into that and then some minor development fees cost that we pay for the city for as part of its development of that of that location and working with the finance department we believe we could utilize excess certificates of obligation in the solid waste fund to help offset the cost of that process on that project so I 'll let that digest for the minute so in turn what what does that do for us by moving materials management out of the service center what we believe it'll do is it'll free up quite a bit of space and to allow our parks operations streets electric communications water distribution utility safety training it would allow us to expand further into that vacant footprint of the facility so before this future this the space here where it says future expansion again it showed twenty nine thousand it allows for a future expansion of our facility so what I decided what I provided here is a table of the current configuration of the square footage and again these are how these are high level planning estimates of the square footage nothing has been designed these are just conversations that have been had with our architect at a planning level from a planning level estimate and just what could happen if this space were vacated so what I wanted to show you here is just the current square footage and our current operations and the proposed square footage with materials management moving out of the service center on the first floor so you can see the difference and this is then what would happen on the second floor it would allow for engineering to expand water wastewater administration to to to be reconfigured in a much more holistic fashion purchasing administration the actual purchasing manager along with her staff would stay at the service center at this point it was just be the materials management staff that would be moving over to the service center so as you can see it does allow room for expansion on the previous slide so as our staff continues to grow we have about 18,000 square feet to move into that over time and so in essence it would forego the need having to build a second service center or a service center annex in the near future for us to make that happen it would be just under a nine million dollar investment to make that change to to renovate the service center we're talking about five point eight million dollars some additional side improvements that would be necessary there at the service center so all in construction and hard costs would be just under six point eight million dollars along with furniture fixtures and equipment to add into the additional footprint that would be moving into that vacant space what the design fees and the development development fees for that project so we're talking right under nine million dollars for that entire project to be completed and on the opposite side our funding sources that we've been working with the finance department to to at least from a high- level perspective from an allocation of if we were to move forward with this project what would be estimated that those respective funds and those areas of funding would come from so from a service center perspective we believe that moving purchasing from the service center to 651 Mayhill makes sense we believe that it allow us to to allow us to utilize some existing space that city already owns no need to purchase anything else allowed us allows us to expand into the existing space and fully utilize all the space areas that we have to date we believe it will meet the shortages that we have at the service center again it would allows us to from a standpoint from a construction to be minimal amounts of construction because you're not having to build new foundations you're utilizing existing footprints of existing facility so a lot of it's just renovation and retrofitting into existing into an existing facility it's scalable allows for future growth we believe that it does provide some efficiencies for city staff it would must be a much more inviting environment for our for the visiting public that comes in to see and visit with city staff when it comes to doing business it would be coder it would meet code requirements because we would have to add additional restroom facilities at the service center which were highly needed and so overall we believe that it's a good option for the staff to consider and for the and then the way it was presented to City Council we're in the process of in fact we just closed your request for qualifications for architectural services so just to kind of keep in mind that we have not spent any money on any of these projects these are all high level high level planning estimates but we have done a request for qualifications for architectural services that has closed and so what would we be doing and as this as staff reviews these requests for qualifications once an architect is selected and we begin contract negotiations we would bring that contract to the PUB for your consideration and then if voted favorably would it then be presented to City Council at a subsequent meeting any questions about about the service center so far because there are some more slides but it's about the traffic operations. Just a question about you were saying that these buildings were old 1960 1980 well the service centers 1980s but but the traffic operations which I'll show you here in just a moment that was built in the 1960s okay what you've said is so far so it's it's stable as far as you know as far as you know it's stable to you know redesign okay all right so we're talking about the difference between eight or nine million dollars and thank you to 21 million dollars before start from scratch. And we're using a building that wasn't being used. I just wanted to make sure that the existing building was stable. Yes ma'am it's safe and sound . Okay. I think this is the building that was being used. 1960 isn't that old. Yes they 've been vacated from there. Yes. How does it work from a location standpoint for materials management to be on Mayhill for all the I don't know I'm assuming at some point in time everybody has to go there to get something. Correct. Well it is change so that is it is I guess a con in the standpoint of the pros and cons of that facility but it will be an adjustment and we were working with materials management to make sure that that operations that are maintained at the service center that they have the adequate supplies they need to make sure they can leave from their location and work in a very efficient manner but but certainly it will be a change and it is the service center where it's located now in the central part of town moving it over to to May hill will be a change so there'll be an adjustment that will need to be made and and we think we can work through that. How many issues do you have during the day? Sir. How many visitors do you have in and out during a day? Of the service center? Material management. Oh goodness I would imagine just about every single operation probably comes in and out of materials management they just walk across and so it'll be a lot of them there'll be a lot more coordination that's needed. We're not utilizing the train for shipping right there are we because the train goes right by the existing location. Mostly it's all dropped by truck. So moving on to traffic operation this is the building that was built in the 60s this is a one of the entrances to the service center and that building there is our traffic operations facility. It was built in the 1960s is approximately 4,000 square foot it's the former former animal shelter facility. It's been utilized by our traffic operations folks since the mid 80s and again some of the same statistics that I showed you earlier about the size of Dent on over the years and again if you can imagine the amount of signals that we 've added over the years and the amount of rows that are maintained stop signs etc it's quite a bit that's happened and they've been utilizing that same footprint for for 30 plus years. Currently non full-time full-time equival ents FTEs are housed at our traffic operations building. While it does show no vehicle bays I mean there is a garage door but if you'll see a photo here in a minute it does not act as a base basically just another storage area for our folks and so it's very cramped there is no room for expansion and again it is the former animal control facility so it's time it's time to to upgrade our facilities for this for the staff and quite honestly they're really it 's not designed for new technology as we replace several of our aging traffic signals they are in essence smart signals they can be worked remotely and things that nature you can operate those from a centralized location this facility doesn't really house it doesn't really lends itself for that type of operation so it's very manually oriented when it comes to working a traffic signal for our staff so any type of remote locate remote login to to to work through these signals it just doesn't happen at this location. So again some photos so you can see the location this is basically some of the control centers that we have for our traffic operations here and then here's some of our staff areas where we work in and and again that's that bay door area where we have some of our equipment and supplies and signs and that are that are housed there so it's it's a very cramped space it's very small and again doesn't really allow for our staff to work in the most in a good area for it for what they need to do in the amount of work that they have to do. To give you an idea there was a bond package item back in 2014 where the citizens voted to to have the city build a traffic operations facility and there had been some some some planning documents put together some planning level estimates that were put together of building a 10,000 square foot facility actually on the service center campus and so but one of the options that was going to happen with that with that process was to they were gonna the thought was to real ign Roodale Road in that location along with some other interior streets to to to configure to be reconfigured for traffic operations along with just just the alignment of Roodale Road for the ease of traffic through that location. When those planning level estimates were conducted back in 2018 the construction estimates came in at 2.2 million dollars which obviously is higher than the 1.5 million that was approved by the bond by by the community however it did not include any furniture fixtures and equipment these high- level planning estimates and there was and the laid-out yard also was not factored into that cost so right then and there we were already 700,000 over budget plus there were other components that were still not not not taken into account as part of the project so it could very easily have been nearly three million dollars or twice the amount that was approved by the bond committee and by the by the community so at the time the thought was let's put the project on hold let's reassess and see what other options are considered could be considered so again with new city management we revisited the issue and and and felt we needed to what can we do to advance the conversation and see what options were made available and so the thought was again looking at the existing facilities as we talked about for materials management could we incorporate 10,000 square feet into the into the leftover space for 651 May hill and so again the thought was could we take that the 10,000 square foot facility renovate 651 Mayhill and incorporate traffic operations into that location and so that's one of the options that we considered so we we believe that we can incorporate the 1.5 million dollars retrofit the interior of 651 Mayhill this information was taken to the bond oversight committee in late January and they unanimously approved it and so I can show you here just a kind of a rudimentary site plan of here's materials management or incorporating their 61,000 square foot facility here's traffic control incorporating 10,000 square foot allows for an additional 10,000 square feet of future expansion if needed over time and incorporate some additional parking for that operation of traffic here the financials moving that 1.5 million dollars into 651 it would include the parking stalls there would be some furniture and fixtures cost that were needed we would need to do some design elements for that so in essence all-in for that entire project we're estimating it just under 2.2 million dollars which is very similar to the previous budget we had come in at but this is all-in with all cost versus the other one there were still some elements that were missing so we think this is based on what we've in conversations with the architect we believe that this is a you know a really a good project and it would be all-in from the standpoint of moving that operation over and then again from a financials incorporating the 1.5 million dollars general obligation bonds that were approved by by the community and then some excess CEOs and solid waste to make up the difference so for the 2.2 million and that's just that doesn't include the technology correct for the traffic correct correct facility correct it'll include some but not the whole thing and the excess certificates of obligation if that's because we're not doing something solid waste that we plan to use this for yes ma'am we have about 4.2 million dollars of excess CEOs that were planned we're already issued we're planned for something else and so the proposal here is to use it for this purpose and so then the city's materials management fund and also then the general fund traffic is housed in the general fund would pay a rental back to solid waste offset that debt and so it really you know helps solid waste fund as well the idea would be that that asset would continue to be a solid waste asset met with a with the city's bond council and we think it's an appropriate use there is no private activity issue that arises out of this it's the city itself and so it's an allowable use you read my mind Tony you knew what my next question was thank you so that that offset was taken into account for the previous item we had yes sir it's already built into that into that forecast yes sir so again some of the issues that it solves it does fulfill the bond commitment that was made to the community it's utilizing with with existing bond funds as budgeted utilize existing space that the city already owns allows for future growth it's scalable allows for the state of the art components that we need to maintain and and expand our operations and expand our footprint when it comes to replacing our traffic signals and our community we believe that it provides some efficiencies by centralizing a lot of these operations that right now are done manually on site there at the intersection so allows for safety allows for a lot of different things to be done from a remote location or centralized location again as I mentioned earlier this information was presented to the bond oversight committee back in late January it was approved unanimously and then really the next steps is we're in the process of reviewing architects so again not a single penny has been spent on any of these projects so again this information was presented to council back in February we wanted to present it to you tonight to keep you informed of what we were what we were wanting to do and like to do and seek your recommendation for moving this process forward and as and as mentioned if as we go through the process of selecting an architect we'll bring that selection to the pub with with the requisite funding to get your recommendation and if recommended favorably that would then be sent to the City Council at one of their upcoming meetings okay questions we with the technology shortcomings that you say that the existing traffic operations building has what can you touch on what those might be and how they'll be alleviated out on Mayhill they're just metal buildings so there's really not there's really not much difference between the building on Mayhill off of Mayhill and the building that we currently have well it in size right well right they're they're both metal buildings of the the one on Mayhill can be again with working with an architect will be insulated will be I mean it'll it'll look like an office on the interior would allow for some bays it'll allow for workspace for our our sign sign crews so they can create signs and change create stop signs and sign blades for street signs etc from a technology perspective and some of the traffic operation facilities I've been in I mean it literally looks like NASA and you've got all these flat panels and you're able to meet able to see your your city out your your intersections via cameras etc so while we do have have some of that technology there at the existing facility it's not to the extent it could be as we continue to expand our footprint and replacing these older older intersections with your traffic signals okay I have one more question it's just some clarification for me so the bond oversight committee so they meet and they reviewed the original intent of the bond committee before and they review the intent of the ordinance that the city voted on and then determined that the funds can be reallocated to a project that the voters didn't approve I'm just curious how that works so about every five years the council appoints a blue ribbon committee it's about 50 you know citizens I think each council member gets about seven that they can appoint from that generally speaking that that committee will break up into subcommittees and so once the committee's work's been done and the recommendations been made and elections been had generally speaking the chairman as there 's there's co-chairmans of the entire committee and then the chairs of the of the subcommittees then become the bond oversight committee so it's the same individuals that were involved from the very beginning on what those projects were and what was decided they're fully in tune believe me on what what the intent was for those individual projects we do try to meet with them at least annually that we have been talking about meeting with them I believe quarterly now because of some of these changes so we do review this and from time to time there are reallocations that occur from one project to another but generally speaking most of those projects stay intact unless there's you know some other extenuating circumstances and I will tell you in the 2005 bond program there was a couple of projects where the city had issued bonds US 377 FM 1830 those project was subsequently funded by other sources external to the city so that resulted in some dollars that we had available so you know part of our recommendation to the council tomorrow will be to reall ocate those dollars for some other projects that are in existence and so so again yeah we have a lot of conversations with that committee but generally speaking unless there's some exchange circumstance those projects that were identified for the for the citizens are the ones that we work on okay and so the current oversight committee is made up of the chairpeople from the 2016 bond or you actually have multiple bond oversight committees that are made up of the chairpeople from those years that those bonds were presented the the only committee that we have currently is from the 2014 bond election and as a matter of fact the pub chairman is the chairman of that committee we do have a 2000 just trying to get some clarification now this work we also had a an oversight committee from the 2012 bond program we did late last year attempted to get those two committees together unfortunately some of those members have now moved on and so we've not officially dissolved it so what we've asked the 2014 bond oversight committee because some of the projects are very similar street reconstruction was 2012 we've asked them to make a recommendation on the 2005 projects 2012 projects and the 14 projects as well okay thank you for sure okay I just have one comment and I guess it's a concern with some lost efficiency and in splitting your material management area away from your workforce having had some experience with that and losing employees on a much smaller campus than you guys are working with in making those trips I think it's something you need to take a deep look at with your supervisors absolutely we definitely will other comments questions you need an indication from us then as far as what what the committee's preference is I say go ahead thank you thanks yeah well on 22 million well yeah plus it's the best thing I mean you get you get a lot of room to grow if you will yeah that you're gonna need eventually anyway okay thank you thank you okay see what we have we have a closed meeting is the next thing on the agenda I know we've got some people here that that really deals with one one issue one matter on the regular agenda yeah I'm thinking we could do that and we yeah and then come back and pick up the one that deals with closed meeting after yeah after okay okay trying to make sure buddy gets home in time to watch part of the North Texas basketball game tonight or listen to it anyway okay so we'll rather than going to close meeting we'll do the do the regular meeting we have a consent agenda with let's see five items on the consent agenda is there any member who would like to have any of those items pulled for individual consideration hearing none then is there a motion to approve the consent agenda so moved second of a motion second to approve the items item a b c d and e on the consent agenda is there further discussion all in favor then say aye any opposed same sign okay consent agenda is approved items for individual consideration first item a which is to consider approval of the public utilities board meeting minutes of February 26 2018 are there any questions additions corrections for to those minutes if not then is there a motion to approve those as submitted so moved motion second and a second discussion all in favor say aye any opposed same sign okay item B under items for individual consideration is to consider recommending approval of the watershed protection division sponsorship agreement with keep didn't beautiful incorporated in the amount of $8,000 good evening pb my name is Deb Rivera I'm with environmental services tonight staff is requesting the recommendation for expanding $8,000 for sponsorship watershed protection allocate fund annually for this purpose and the purpose though the reason why we do it is just for promoting pollution prevention it's on water and water quality awareness and to meet the requirements of the MS4 permit which is the municipal separate sewer site or a system I'm sorry separate storm sewer system with the CQ by using the KDB staff is able to capitalize in the network of contacts that KDB already has to use the volunteer base over 2,000 people that KDB currently has and to use establish events that the community would recognize already in the last two years staff have allocated between nine thousand ninety five hundred dollars for that purpose we are requesting to spend eight thousand dollars for paying into the Red One Festival the great American cleanup and the environmental grant program for a total of 8,000 however due to a rollover funds from last year we are actually requesting for eighteen I'm sorry fifteen hundred dollars to be used towards that so we will end up paying sixty five hundreds to keep the kid that and beautiful at this point the staff is recommending on maintaining the sponsorship to KDB to approve the requested expenditure of sixty five hundred dollars and to adhere the resolution passed in 2018 about how to expand sponsorship funds that was ordinance I'm sorry resolution eighteen zero nine five any questions questions yes what is the MS4 MS4 is a permit that the city has with TCQ and it is for the municipal separate storm sewer system and that's a permit that the city have to maintain every five years with TCQ every municipal has to do that across the country and just to be clear this is we just approve the minutes from last time those were DME funds that we looked at last time this is a wastewater right watershed watershed protection and I'll make the same statement I made last time I think it's a great way to leverage keeping it beautiful is a good good job in leveraging public money with private donations and private volunteer hours and so they do a good job so 2000 people 2000 people those on the events that we are participating in have been for 13 years the community already recognized them they actually attend those on a regular basis so it's definitely a win-win situation for both KDB and watershed protection okay we have a motion then on item B much to approve and a second further discussion all in favor say aye any opposed same sign thank you items passes okay we can item C which is to consider recommending adoption of an ordinance for the city of Denton amending ordinance number 2017 273 to reduce solid waste residential collection service rates and remove certain administrative rate setting provisions in providing an effective date of course this relates back to our work session item so Tony I'll just want to just react read a right again this is a first step stab at these rates we will come back to you in the next three or four months to have a wider discussion about all the rates in solid waste but we believe that that we can immediately make this change for our residential customers so we're here to recommend a 12% decrease in those refuge and recycling rates standard and large carts and be happy to answer any questions that you may have this is for an effective date of the effective date it will be the 28th 28 correct you know pending councils okay any other questions at Tony is there a motion then to approve we have a motion to second this time from the side of the room give them a turn any other discussion all in favor say aye any opposed same sign thank you item D is to consider recommending adoption of an ordinance of the city of Denton Texas excuse me authorizing the city manager to execute a contract for a utility assistance program supporting low- income households providing for the expenditure of funds therefore and providing an effective date RFP 6669 awarded to interfaith ministries of Denton incorporated in the not to exceed amount of three hundred and seventy five thousand dollars customer service manager I'm happy to report that I did not go to the dentist prior to this meeting so you should be able to understand me I'm here tonight to talk about the utility assistance program request for proposal a little bit of background the prevent loss of utility service also known as the plus one program helps our customers that are going through a financial hardship to be able to pay for their utilities and also to be able to restore services if they encountered an interruption of service I'm also happy to let you know that we had anticipated not coming back to you until June of this year with this RFP so we're three months ahead of schedule so we'll be able to implement that enhanced criteria sooner for our customers pending your approval interfaith ministry we did send this out to 295 organizations we had one response which was the incumbent interfaith ministries Inc of Denton the contracts going to be increasing from 100,000 to 125,000 and the administrative costs are going up by 26% with this contract proposal the last two contracts with interfaith we did not see any price increase so this is the first price increase with them in the last seven years and it's specifically tied to their personnel and also their technology for their personnel they do spend an hour with each of the clients that are coming in to offer them a holistic solution because usually it isn't just a singular issue that that family may be experiencing so they spend time making sure that the customer knows about additional resources and also how that they can budget in the future with that so that's one of the reasons why the personnel expense is going up and then the phone and technology they are implementing a homeless management information system that 's going to help us with the additional criteria that we're requiring and so that is one of the reasons why that technology is increasing as well so the niche criteria for the clients is they're going to be able to get assistance on security deposits now they'll be able to get assistance up to three times a year where it was only once a year and then also there's no required tenure at that address that they have to be there to get assistance those are the top three things that we pinpointed why our customers were being declined to be able to get assistance and so that criteria is in the new contract in addition to that we've updated the reporting criteria so we're going to be able to get richer data in order to understand what the barriers are our customers are facing so we know if we need to pull additional levers or do the additional criteria enhancements going forward and so tonight we are asking for your recommendation or consideration and improving this contract and awarding it to interfaith ministries we're going to report back to you within one year on the impact to our customers that this criteria change has had what the data results are and then if there's any additional adjustments that we may need to make with your direction and council's direction do you have any questions for me you're glad that you're doing this sooner I imagine summer is when most of these people hurt the most yes absolutely so and what the deposits being able to assist with the deposit you have a lot of customers moving in and hey and so I would actually anticipate our our May assistance going up and September and August are usually our big heavy hit ter months because the bills are starting to start creeping up a little bit contingent on weather with that so it'll be interesting how the enhancements and criteria what it's going to influence on those months for the assistant good data so we have we did we modify the budget to make it 125 this year this fiscal year okay and we'll revisit that we have the data back yes by the time we adopt a budget for next year yes yeah we'll come back here to know if we need to make any modifications to that but we'll be able to increase that funding now with savings budget so we're going to be able to absorb that I guess I'm I am but I'm not amazed at 295 organizations only one response it's okay they do a good job so any other questions comments do we have a motion on the item so I have to approve okay second and a second discussion is just a point of clarification is this a three-year yes sir it's one year and then with two years any other discussion all in favor say aye any opposed same sign motion carries thank you okay I think we've gone as far as we can with that going into closed meeting so at this time we will go into a closed meeting to consider okay it is 742 so we'll are back in open session and we have a couple of items remaining one of which is item E which is to consider recommending adoption of an ordinance authorizing the city manager or his designee to sign a notice of extension of the TMPA power sales contract for seasonal operation from some September 1 2018 to September 3rd 2018 and then for seasonal operation from some September 1 2018 to September 30 2018 pursuant to section 5.1.3 of the TMPA amended joint operating agreement and I believe George has a presentation on this chairman and members of the public utility board George Morrow DME general manager as I was mentioned I before you tonight to talk about a possible 30-day extension of the power sales contract for the Gibbons Creek power plant presently we we have a 21 .3 percent entitlement or about a hundred megawatts in that plant based on a termination notice given about two years ago by the city of Greenville there's a trigger date of September 1 for the other participants to extend for an additional month if they so desire and so far staff of the three entities have shown interest just wanted to show you that provision it was approved by the utility board and City Council I believe or came before you back in September of last year that did allow for this extension for seasonal operation that were here today to talk about so I have received an extension letter for this 30-day period it will increase our entitlement from that 21 .3 percent to 23.7 because Greenville is departing the project after that date and we'll proportionally share their remaining entitlement that they would have would have taken so what I can say to you right now is that we've done an analysis of that plant operation for the month of September and that the value exceeds the the cost of operation and it's a one-time thing it's only really just for that month it has no obligation beyond that and if there is a desire to discuss possible operation for next year's seasonal then we would take that up at a later date so there is an ordinance that I'd like you to consider recommending to the City Council that would extend that operation for the 30 day period we've been talking about and that's my recommendation to you this evening okay questions so this this is again an extension 30-day extension of our existing contract with with no future obligation to just if we want correct the plan is still for this plant to be shut down at some foreseeable point in the future right okay okay any other comments questions do we have a motion on this item recommend okay we have a motion to approve second and a second further discussion all in favor say aye any opposed nay one nay motion passes thank you very much okay item F is ACM update yes mr. chairman members of the board in your packet you will have you have a number of reports that were provided by staff first of them is first of them is a first quarter financial review report the impact fee capital improvements advisory committee and dr. banked here is here to answer any questions you might have as mr. Morrow just presented the Gibbons Creek plant closure update so that is provided as well along with a DME transmission and substation update that was requested from a previous pub meeting mr. Morrow and mr. banks are here to answer any questions you may have about those items on your future ag endas list we have a number of items that are coming forward to you in the near future I believe there was a minor typo typographical error on the energy risk policy it was believe on the agenda it was scheduled to be presented today that'll be presented on April the 9th the the energy risk policy update that should be for April the 9th so at your next pub meeting not today so make that correction I think that's been changed it has been okay okay okay and then and then for a new business matrix believe everything has been covered that has been requested so far there are a couple of items that were requested as far as reconnect fees for meters and smart meters along with the revenue reconnect fees as they're lowered that will be information that will be presented at a future meeting for your during the budget process so that'll be covered during that time frame and we'll bring all that forward to you then all the remaining items I believe were covered tonight okay nothing further questions on any of the ACM items no hearing none okay if we're concluding items under section five five one point oh four to the Texas Open Meetings Act any inqu iries from the Public Utilities Board or the public with specific factual information or recitation of policy or accept a proposal to place a matter on the agenda for an upcoming meeting hearing none is there a motion to adjourn motion second Alan second all in favor say aye any opposed thank you