May 07, 2018 Public Utilities Board on 2018-05-07 8:30 AM

May the 7th 2018 we'll call the May 7 2018 public utility board meeting to order and right away we have a work session so we have a few items to go over we'll start with item A which is to receive a report from staff regarding the 2017 reliability indices for the electric distribution system and DME's actions taken to improve reliability. George Morrow DME general manager it's my honor to come before you this morning to introduce this reliability information about the electric system and also introduce Jerry Fielder who's our distribution system manager who has sliced and diced and parsed all this reliability information to kind of give you and us an idea of how reliable are we reliability being extremely important these days we're all used to having electricity and when it 's out you know how critical that is and I think we what I've seen my time in Denton that we have an outstanding reliability here in the city we have very few outages and though when we do have outages we respond extremely quickly it's to me it's been amazing our reliability here is 99.99% so so with that I'll introduce Jerry and let him take it away. A little shorter good morning. I appreciate the time this morning to kind of visit with you guys about the reliability of the distribution system before I get into it I want to introduce a couple of other members of the reliability team and that's Brad Watts who is the superintendent of operation and maintenance and Rowdy Patterson who is the superintendent of construction and missing today is Sam Bridges who is the superintendent's of the substation group. All right we're gonna start off with the test questions begin with just kind of let you know what we look at these are indices that are established by IEEE 1366 which is a standard for electric reliability this was established by the Institute of Electrical and Electronic Engineers there are several different factors that we look at these are the common ones we look at SATI. SATI is the system average interruption duration and that's the total duration of an interruption for the average customer during a given time period and it's measured in minutes. KD is the customer average inter ruption duration index and that's the average amount of time taken to restore service and again that is in minutes. SAFE is the system average interruption frequency index and that's the average number of times that a system customer experiences an outage during a time period being studied and that's just a number. A SAY which is the average system availability index that's the total necessary number of customer hours that service was available during the time period being studied to the total customer hours demanded and is calculated using the formula that they've got right there this one is actually given to us in hours. TMED is a method that if you are in area that has large and extended interruptions TMED lets you figure out what that number is and those you can actually take out of your calculations DM E has no TMED we don't take any of them out and then performance this is not IEEE 1366 this is Jerry Fielder basically what I do is take the SATE times the SAFE so I take the duration times the frequency multiply them together the higher the number the worst performer that asset is. Okay to go over the baseline for 2017 the time period that was studied was January 1st 2017 to December 31st 2017 during that time frame we had 950 events the indices were calculated on IEEE 1366 standards for reliability industries and classified based on IEEE 1782 which is another specification that lets us know how the I EEE wants these things to kind of be classified we go above and beyond on classification you guys should have a cheat sheet in front of you of all the classifications that we actually use reliability indices we calculate on the system level the substation level and on the feeder service levels and during that time frame we've identified the top five cause and equipment codes that were on these three different service levels. So for us last year as it was in 2016 squirrels were our nemesis of the 213 animal small animal reported incidences 199 were contributed to squirrels. So just kind of give you an idea we're not unusual with this thing the APPA had an article squirrels other wildlife are the most common cause of allergies the survey finds and just the quote from this thing is saying wildlife near power equipment is the most common cause of allergies at public power utilities and the failure of overhead equipment is the second most common cause according to the APPA's latest survey you know basically what they're saying is since a utility pole is similar to a tree squirrels frequently climb the poles the heat emitted by electric lines can attract the squirrel because they like to get that warmth from the electric line so that's why squirrels love us so much. Now once we did the study we identify the top five cause codes we identify the top five equipment codes for 2017 the top five cause codes or number one was animals the small animals and birds this is your squirrels planned outages maintenance and we'll talk a little bit more about this why that's so high this time maintenance or decay age of material that's basically materials just aging out there weather associated with lightning lightning associated with weather and equipment or design installation it's a material or equipment failure the equipment that we identified was no damaged equipment and that kind of goes in with the maintenance part of it overhead line conductor and devices the line transformers the fuses associated with the line transformers secondary and services and line transformers becoming bad we're going to focus mainly on the equipment I mean the cause codes during this thing because that's what everything is really kind of tuned to it is eliminating the causes but the equipment codes help us understand if there's a pattern going on out there that we have equipment that's failing and it's in the same area or it's the same manufacturer helps us understand what that's going on right there so what this next graph is showing you is on the top of it is the combination of all the events the combination of all the outage time for those 950 events and the number of customers affected as you can see right there there's when you take the top five out on the top part of it which for the number of events 65 4 of the 950 events were top five events those are separated out into the maintenance material equipment failure decay age of equipment lighting and small animal or bird the same thing can be seen at the amount of cottage time that's contributed contributed to the top five as well as the customers affected that's attributed to the top five this is just another way of looking at it you can see on a monthly basis what the top five spread was based upon how much of a contributor they were now what I want to point out here in October November in December you're going to see the maintenance part of it go up this is when we did a lot of feeder sweeps in a in an area that we 're going to talk about these feeder sweeps were pretty intense they went out there and took a lot of custody and to do this they had to take the customers out of power for a short time so that's why when you look at the amount of time for maintenance that's why it's gone up is because they have to do that this is not something that we really believe is going to be a continual issue for us we just wanted to get a lot of things done within that first three months to try to eliminate as many as possible of the issues or errors that we have in a specific area I've got on the side over here a lot of the items that were put on during the sweep if you guys are interested in looking at those or asking more about those thank you very much we can certainly go about them and talk to you a little bit more about what each of these items are and what their contribution is to helping us get more reliable power okay so comparison start now system growth from the distribution standpoint we only grew about 1.25 percent during the 16 17 time frame again our underground miles grew which led us to be over 57.91 percent of an underground distribution system the reliability indices as you can see our safety or frequency went down however you look at Sadie the durations and Katie customer dur ations they went up there's a reason for this and the reason is this is the first year that we've had full implementation of the AMI system into the OMS outage management system so what that means is in the past the time starts on an outage whenever you first know about it so if people are at home and they don't know that their power is out and they get home and they call us then that's when the clock starts for the amount of time that we're attributing this thing with the AMI system we know within seconds that a person's out and so the AMI system reports it in and so that's when our clock starts so that means your durations are going to be just a little bit longer because of that so in other words we basically established a new baseline for this year so we did a heat map analysis of the system using the top five cause codes and as you can see the north east area is the area that has the most has the it seems like it has the highest number of cause codes it has the highest number of heat equipment codes events happening this area we know is an area this is area that we concentrated a lot of our maintenance activities on this is where those proactive going out there change putting in the animal protection putting in the automatic fuses etc etc occurred on that thing to reduce them down we haven't had a full year of data yet for that but we pretty much believe that this has been a very positive because the number of phone calls coming in from that area has reduced drastically so we think we've done some good things out there this will be one of the things that we look at at the end of the year once I have a full year of data to say did we actually affect that as with most utilities we like to compare ourselves to everybody so we won't go over every one of these unless you want me to but just didn't municipal electric from a public power power standpoint in national and state of Texas level we are better there are some utilities out there that have got some numbers that are better than ours there's some that have got some numbers that are worse than ours our sister TNPA cities Garland Bryan and Greenville they don't they don't claim to go to I triple e 1366 glass so I can't tell you that they're being lower than us by so much is an actual apples to apples type comparison because they don't go by I triple e 1366 okay so we look as I said we do a performance calculation we look at the substations Denton North last year was the worst performing substation its availability was 99.95 percent with the highest rank of performance last year it was seven Kings Road which last year was our worst performing substation did get some improvement it's now the 15th and we take these are all the substations that's on our system so we know from the worst performing substation down to the least worst performing substation and we focus a lot of attention on what the worst performers are to see if there 's any thing common in that area that we need to attack or pursue same thing happens with feeders so Denton North 212 is our worst performing feeder for 2017 followed by McKinney 221 Kings Road 222 Locust 221 and Cooper Creek 222 kind of goes down the top five or ten worst performing feeders is a standard that the Public Utility Commission of Texas asks people to look at of course we're not come we're not dependent on the PUC of Texas to tell us what we need to do but we still make those comparisons for ourselves to see how we're doing and use their standards a feeder a feeder you have substation you have a system level which is everything that we have out there you have a subst ation which is the big assets that you see that are placed around the city that have the big transformers in them and everything else and those subst ations feed feeders feeders are they the assets that go out and serve the customer so they're the big wire the big underground wire that goes out and serves customers is what a feeder is so that's the end game for us is to look at that point and where is this feeder located is it up in that northwest several several of them are up there in that area is Denton North as well as Kings Row and if you look at that Kings Row has two feeders that are on the worst performer and Denton North has two feeders on the worst performing so yes those four feeders are up and usually serving that one area that you see as worst performing so we do some other looking at this thing another heat map that we prepare is using the ten on the ten worst performing feeders we we identify the cost codes the top five cost codes and we plot those out there on the system as you can see that same area that's northeast is still pretty much red but there are other areas within the city that there is some you know events that we need to look at and see what the cause is and then equipment codes as I said those are all focusing pretty much in the same area we don't pay a whole lot of attention for study parts of the equipment codes that's more or less for the engineer geek of us to try to figure out so you know is there equipment that is failing constantly and if it is is there a commonality with that equipment do we need to go replace it all etc etc okay so 2017 findings the top five cause and equipment codes were identified as factors in over 60% of all the recorded events at the every service level from the system the substation the feeder level North Lake substation is the worst performing substation and King Joe substation has moved from being the worst performance but it still has two of the worst performing feeders in it so what are we going to do about this what is DME going to do about this for animal protection there you're going to see on this slide these are the actions that were taken if they're standardized it means they're now in our construction standards or design standards if it's says continuous that means that we do this normally anyway and then in progress is something other that is kind of a study thing for us so for animal protection we are using rely guard products that's a lot what you see out here these are the new products that we're using and Brad will be able to talk a little bit more about the advantages of the rely guard products and then later on in the presentation we now install animal protection on all of our designs everything goes out whenever an engineer or technician does a design he puts animal protection into the estimate on that part of it we have used duct plugs instead of air seal on polarizers that plugs which are these items air seal is basically foam that they would put down on the top of the polarizer and squirrels didn't have any issue with chewing down in the bottom of it and then chewing on the cable and causing outages they can't chew through metal so we are now using these in our polarizers our tree trimming program has been very successful we continued the tree trimming program and if we find areas where hot spots are we go ahead and trim that out if areas have and we need taller pose we'll certainly put in taller pose in those areas and we've even tried different things such as Fox urine to try to eliminate squirrels I wasn't very popular with Brad 's crews at the time when they had to go put it out there it really wasn't that effective but we tried it from a maintenance standpoint we've replaced damaged and missing lightning arrestors as well as the missing grounds and down guys this was done pretty heavily during the feeder sweeps that were performed we are going to prepare an RFP for infrared testing and strategic placement of fault indicators this is something other for both operations as well as engineering to kind of help focus in and narrow in on what causes and what the area of what the area that the fault has occurred is where that area is so it fault current indicator basically has a light or some sort of signal that lets the crews know that down from it it saw the fault and so they know okay from this point down we got a look okay decay age of material we are doing another RFP for a system wide pole inspection and inventory from the engineering standpoint we're mostly wanting to do the pole inspection the pole inspection is they hammer the pole the test the pole for rot and make sure that the pole is good if the pole is not good they send it back to us and we replace the pole the sweeps are to replace if they see any deteriorated insulators or other equipment that replace those and we are also going to do an RFP for infrared testing to identify hot connections on the distribution system lightning you know the sweeps are looking into that replacing damage or missing lightning arresters and replace damage or missing ground rods and guys that's the best thing we can do against lightning and material and equipment failures we use contingency analysis to minimize the number of customers effective and now it's time what this means is we have several ways that we we try to design it into the system several ways to serve different areas of the city so that if we have a failure of a substation or not something subst ation or feeder or substation bank we have other ways to get that power back up fairly quickly so that we can then spend the time restoring the power and still have customers up and when we're working in areas that have dated facilities that we go ahead and try to be proactive and replace those facilities when we can okay I've got a quick video here that's going to kind of talk a little bit about the advantages of the new rely guard products that we got and Brad is going to kind of talk to you a little bit about that when we started looking at this I've been here for 27 years to try and figure out you know what why the squirrels are getting in there what they're doing and the main thing that a squirrel does that gives us the problem besides you know on the transformer for warmth they will they will climb up and they will they collect all kinds of nuts berries food and they store it and so what they do is they climb up on the transformer and they try and stuff these berries and nuts and stuff up inside these squirrel protection and then once they get full they start tracking over and then that's when you're going to have the outage or they're going to get their hands in there and they're going to make contact well they're standing on a transformer and the transformers grounded and so they're going to make contact with the wire and then that's when you know the explosion that you hear the fuses blow and that's what's causing it and I've got one one example I want to show you this is another one I can help you pass around if you want to but that's one of the old squirrel protection and after a while we found out that they start tracking over and they start burning a path and once they start tracking then the squirrel protection itself kind of becomes a conductor and then when the squirrel just touches it that's when we have a fault and I learned of a new product and it was actually designed by a lineman so he had the experience as far as you know knowing what the squirrels are doing knowing how they're doing it and so he got with another company and they designed squirrel protection called Reli-G uard and they also impregnate these with a product called Reli-Tanium and it's non-flammable. It has a flammability rating of VO and I'm sorry and they it's a new product it's supposed to be a 15 year product and so far we've had really good good luck with them and one thing that the squirrels can't do is they can't get them off once you lock them on it has a keeper key on it and once we set it I mean it's on there the squirrel can't raise it up and also the inside of it has a fitting where it will grab the skirt of the transformer they cannot pick it up and they can't get it off. They cannot pick it up and they can't move it they can't twist it it's pretty tough to put on but once it's on it's on and we're having really good luck with it. So the video is playing now and Brad will kind of talk about what what they're doing now is they're just going to test the circuit this is a controlled circuit that we built and we can do arching demos we do it a lot for schools and you know different events. And now we've installed the old squirrel guard which also is passing around and we're using a sausage to simulate you know something getting up there touching it and you'll see how it will arc up and this is supposed to be our protection this was the old style protection. But over a period of time it's not protecting anything. But the hot dog is cooked. Now we're going to install this. And now the guys are going to go ahead and you'll see them they'll install that new rely guard product on the jumper. And now they're going to simulate the same thing again a squirrel climbing up there and touching the. Touching the cover up. And actually rub it all up and down the wire and everything and it's it's really a good cover up and only till he gets up to the bear conductor does it draw an arc but we're not going to get a squirrel up there because if they do happen to get up there and they will climb up and get on the line. It's kind of like a bird on the wire. I mean they're the same potential as the wire itself. But this seems I mean this is really creating a good you know protection for our system. And then here Michael's going to go ahead and just show you what a tree limb does. Once it's been on the line you'll see it I mean they'll smoke but eventually they're going to burn a path. That's about the questions about the product. When did we start using this product. We actually started about almost a year ago. We were just but we didn't just jump right into it because we wanted to make sure it was going to work for us. So we were trying it on different things and we had one of their engineers come visit with us and they actually went out and we showed them some air switches we're having trouble and actually designed a guard to go over the air switch steel bracket. And we did we did some tests and stuff we've done we've done things like this. Now we're using it full force and the feeder sweeps. That's what these are doing. We actually have to go into the backyards and or on the streets wherever the transformers located at rest or the underground termination points on the poles. And we have to kill it out and then we install this we install the ill guard over the wire takes about about 15 to 20 minutes sometimes a little sooner than that. But we're going to get the benefit from it. So we'll be able to monitor this in the next few years. Yes . See how many we should get good data. Didn't try. It's used all over our entire system. So I mean anytime we come on line they was something it has a live guard cover up the old guard and we're we have you know so many features in the town that we're just trying to start with the ones that are impacted the most and then we 're just branching out in the service trucks. They're doing that constantly when they get on calls when they see one. I mean they're they're trying to install these as fast as they can as many as they can. The North has been yes ma'am. And we were at a there's three fingers in the north where 100% on that. And it's the guys worked really hard. Is the safety device that we cook the hot dog with is that still available. Do people still buy and use those. These right here. They're still available. We don't use them. So in that situation that we just saw that products installed correctly but not working. It's installed correctly but over a period of time that it 's not dielectrically sound for it and then the ozone I mean the sunlight just eats it up and it starts tracking and it 'll start creating little little lines of track lines. And then once it gets to a certain point then it'll actually can mail and just cover the bushing. We found them where they just melt and go down on the bushing. I mean it's just not a good product. They thought it was but it wasn't. But it's still available on the market. Yes sir. What's the price point between the two. That I don't have the light guard is very expensive. I can get that. Okay for the light guard products. They go anywhere from two hundred and forty seven dollars to it looks like three hundred and six dollars each. The pole wrap which we've got one over here you haven't seen it is is about eight dollars and sixty cents. I mean is one hundred and sixty seven dollars and fifty cents. And that price is for a box of them. It's not individual. I think there's twenty five in a box. And I would say these other ones are probably going to be comparable in price. The one the old ones because they all kind of come in the same price point. So that's about what you're looking at from a price standpoint. So the cost. So the cost is roughly comparable. But and and it would end it saves us cost in the time and spend in repairs. Yes ma'am. Yeah. Thank you. OK. Very good. Any other questions. Somebody want to see the video again. Thank you guys. Thank you. And Brad showed you one of the products. Again if you want to see him I can actually leave this if you want to see it afterwards. But there are different types of products for different uses. The one he showed you was for transformer bushing. They have them for an insulator cover as well as other type of things that we use them all that we have out there. OK. So in closing this I want to kind of tell you a little bit about some good news for us. APP R P 3 is a destination that that signifies leadership in reliability safety workforce development system improvement. For the past few years we have been at the gold level but I 'm very happy to tell you that this year at the APP conference DME has been moved up to the platinum level for reliability. Congratulations. Very happy with this. So that's the end of the formal presentation. Any questions. Yes sir. You mentioned that we were at four nines of uptime right. If all you were doing were scheduled maintenance let's just say we live in a world where we don't have unexpected out ages. What would you say your uptime would be percentage wise. What we're at four times if we spent all the time on it it may go to five nines. We're actually at point nine nine eight. So we're pretty darn close on the fifth digit. But you know it's kind of a typical thing to go to four digits. So that's why we stop at four digits and the bulk of the changes that you're going to make are really the installation of this new equipment. But basically we're still just going to approach it the way been approaching it before. Yes sir unless we can think of anything different in the area. I mean again the feeder sweeps have done a really good job of eliminating a lot of the issues that we've had in the northeastern quadrant and we're watching that. This is a standard installation product that we put everywhere now within the city. So you know we should be able to see some improvement from that standpoint. Again some of the duration the reason why the duration went up because we now have the meters telling us when they're out which is a very positive thing. I mean that's something that from an engineering standpoint we've always known is that once you get a my hooked into your own system your numbers are going to get worse for a bit because it's now reporting immediately versus waiting maybe eight hours for a person to come home. Yeah I don't know anymore. I know you know. So we did. I thought that was an insightful question because a lot of the utilities I'm familiar with they actually don't count the schedule maintenance as an outage when they do their out of these calculations that Jerry does. And here I think we go strictly by the book. We're not trying to shade anything any different direction. So we give it all to you. But a lot of places will ignore that in their calculations. So I just know for nine is pretty solid. Pretty good. That fifth nine is you know that's very difficult to you know to make that kind of transition. So you guys are doing a great job. Thank you. Thanks everyone. Thank you. Okay. The next next time we have in work session is to receive a report. Holder discussion and give staff direction regarding the customer service fiscal year 2018 19 operating budget. Mr. Chairman. P.B. members. My name is Tony point them the director of finance. So I went to very quickly just introduce this item. Tiffany Thompson will come up here. She's our customer service manager and I've asked her to go ahead and walk you through this budget presentation for customer service. So I have to cover a couple of things. The first one is that making this a separate fund does not make it a new operation. It's an existing operation that has been in the water fund for many years. We have other internal service funds in the city. Those that come to mind are technology services for our computers risk management our fleet operation. And so this isn't anything different than what we've done with other operations within the city. And then finally by separating the side of its own segregated fund it will still continue to come back to the P.B. on an annual basis for review and approval and to seek your recommendation back to the city council. And so none of those things will change by making this a separate fund. So I'll have Tiffany come up here walk you through the presentation. And if you have any questions we'll certainly be happy to answer those for you. Good morning everyone. I'm sorry that I don't have props like hot dogs and. So I really feel like I'm going to be disappointed. Thanks. Yeah. Give me that with that. So I'll bring s'mores next time we meet. I'm Tiffany Thompson customer service manager happy to be here this morning to go over our budget presentation customer service assist all five utilities. We operate the main switch calls coming into this city and we also take care of billing and customer service functions for 20 other departments. So last year we calculated and build over six hundred and twenty seven thousand bills. We accepted six hundred and sixteen thousand payments. We filled it over one hundred and eighty five thousand calls. We took care of over seventy two thousand customers in our lobby operation and we collected and reconciled over two hundred sixty eight million dollars worth of revenue in our department. And our mission and customer service is to help serve and educate both our internal and our external customers. So the objectives of this presentation is as Tony mentioned to discuss the internal creating the internal service fund review fund assumptions the financial forecast and review our revenues and expenditures and then go over the budget. And then go over some additional departmental information. So with the proposal for the internal service funds currently customer service is housed under the water utility fund. And it's been that way since 1999 and creating that internal service fund helps separate the accounting fund that's used to account for the services provided to those other services at cost. And so we do want to do this because we don't only service just water we do all five utilities and a general fund functions with that. And with this internal service fund creation it's going to reduce the required reserve level for the water fund and it will help reduce our overall budget expenses. So the fund assumptions include that we will not have any operating reserve required for this fund. Our revenues and expenditures will continue to be based off of our percentage of service utilized. So that means if the utility or the general fund is represented on a bill if we take a phone call for them or revenue that they'll get a certain allocation of that for service back to them. So nothing changes with how we do that now. So our financial forecast we do propose to have a 3 percent increase across the board for our personal services going forward and then a 2 percent everywhere else. The major budget changes that we are anticipating for 2020 is the addition of 1.5 FTEs. That's a full time person and then a part time staff. And that's just to be able to continue to have capacity for us to handle our increased scope of services that we're offering and then also with the increase of our customer service base. Our highlights. This is how we allocate out our our total budget. Again that's based off of if the utility is represented on a bill if we take a phone call for them and accept the revenue is proportionate to what services we provide to them. And our budgeting highlights this year we do have a slight increase in our personal services for materials and supplies that's directly related to our bill production and postage. We have a decrease in that line item budget this year. I'm going to talk a little bit more about that in just a moment. We did have a large increase in our electronic billing adoption which is giving us a decrease in this need for for funds in this line item and then for our operations. This is where we increase the twenty five thousand dollars for the plus one. But we also have some additional savings in other area and overall we have an overall decrease in that line item. And so we're maintaining about a five point four million dollar budget again this year. So our position summary we have fifty one souls and customer service which makes up forty two point five FTEs. We have a cross section of full time employees part time permanent employees and then seasonal staff that we bring into assistance with our heavier volume times. Thirty of those souls help us with our frontline operations to be there for our citizens needs. So our accomplishments for 17 18 we did launch a new payment portal in August called payment is since that time over twenty one thousand of our customers have been paid. So we have a total of twenty five thousand of our customers have registered through that payment portal that represents about 35 percent of our customer base. We have an increased electronic billing adoption which went up fifty five percent since last year and that's a direct reflection on how easy it is to sign up for e-billing now. And because of that we were able to have that budget reduction in that line item. We've also deployed an after call customer satisfaction survey. We're utilizing that right now so our customers have the opportunity to answer three short questions on their customer service experience. Right now we're seeing about a ninety seven point one percent satisfaction rating from our customers on that. And one of the last questions that we do ask customers if they want to receive a call back on their experience and our assumption when we first implemented that is when people want to call back. Maybe they didn't get everything they needed to get taken care of. We actually have seen the exact opposite. Customers are wanting a call back to accolade the customer service rep that assisted them and to really kind of shout their pra ises. So I think that's a testament to the staff that we have in our shop. So we're going to continue to deploy that out to customer service reps over the summer. We're just kind of tweaking some of the questions with that but we're pretty excited with those results thus far. We've also reduced the AMI disconnect meter reconnection time by almost 50 percent. So previously if we were doing a reconnection for a customer we would send out a service order to DME and then they would take care of the rest of the steps in order to do that. In January we took over the rest of those that process so we could holistically do it in-house with customer service. And by doing that again we've reduced that reconnection time by 50 percent for our customers. We're piloting the prepaid program right metering program right now. We have a couple of our internal staff that are on the program right now. We're working on training and just mapping out some of the additional processes throughout the summer. We are going to be educating our customers about the availability of that and signing customers up throughout the summer. And in September and October we're really going to do that hard push marketing push to get people to sign up on that adoption. But we do want to do it gradual so we can kind of grow into the program make sure that we know what the lessons learned are before we really do that full blown deployment with that. But as the word gets out if customers want to get on that we're going to get them signed up for it. We also implemented the new credit collection guidelines with your direction in city council which included executing a homelessness deposit waiver and we enhanced our plus one program criteria and funding. So for next year we want to report and proactively respond to those assistance needs with the data that we're going to be collecting. We also are working with DME right now on how we can reduce the reconnection charge. And so right now they're doing their cost of study survey and so we want to bring back what that would be and then also what the financial impact of that reduction of that rate will be. So that's something else that we're going to be bringing forth to you and a goal for next year. And we also want to continue to increase our adoption of self service options. So looking at the availability of adding a payment arrangement option online and then being able to connect and transfer services as well online. And so our budget emphasis is to maximize value while containing cost. And so we accomplish this by focusing on our performance metrics and some of the ones that we do is the self service adoption. So we want to make sure to provide multiple channels for customers to be able to pay and do their business online. We want to make sure that we're accomplishing first contact resolution. They call us that one time we want to make sure to take care of it that first time. So we're not creating duplication of effort for our customer and also for our staff and then average speed of answer. We want to get our citizens where they need to go as quickly as possible and answer that phone call within 60 seconds. Right now we're averaging about 36 seconds for us to answer that phone call. And so the key drivers of our budget is the volumes of our customer base, the behaviors of our customers, how we respond to that volume and then how do we minimize that volume. And so we do that by reducing volume and improving efficiency while also increasing customer satisfaction. So we want to continue to invest in those self service options like the new payment portal, being able to sign for electronic billing online. And a critical measure for us is first contact resolution. Again, that's providing that holistic solution the first time they call in. And we measure this through a robust quality assurance program in our department where we actually grade eight to ten observations from our frontline staff to make sure that they're meeting our key performance indicators and offering coaching and development and that continuity of service. And so we want to continue to improve efficiency. We use a workforce management tool that takes historical data and tells us how what the forecast is and how we should deploy our resources. So that tells us where we should let staff go on break lunch, how many staff we should let off for the day so we can make sure that we meet our service levels. And then we want to continue to increase our process improvement and automation. And then with the new feedback that we're getting from the customer service survey, use what our customers are saying and then deploy different action items to assist them better as well. And so these are the results of our cost containment strategies and the changes in our customer behavior. So since 08 and 09, our customer base has increased by 18.3 percent. Our lobby volume has decreased by 60 percent. We used to see over 108,000 more customers in our lobby than we do today. And that's a direct reflection in that investment in those self-service tools that we've been deploying over the last several years. Our call center volume has increased by 34.7 percent and our average handle time has increased by almost 25 percent. And that isn't necessarily a bad thing because we are providing that first contact resolution. So we're not creating an additional callback. And we're also working with those customers that have more complex issues that we do need to spend a little bit more time with. And even though our customer base has increased by that 18. 3 percent, our average speed of answer, how quickly we're answering that phone call, has decreased by 33 percent. And with that, a couple of months ago, we had a customer bring in her receipt from 1955. So 63 years later, she had her original receipt and she thought, well, you might want to have it. So I thought you would. I guess that's my prop. I should have brought it to be cool like you guys, but I didn't. So it's on the slideshow with that and with that, I'd be happy to answer any questions or comments that you may have . Questions. So what was the methodology in 1955 on light and power? Because it seems like it's the same thing. I'm not sure anybody here was here. Questions. I'm sure. Do you track first call resolution? We sure do. How we do you want to know how we track that? Well, I mean, I'd like to know what your first call resolution percentages. Oh, great. It is. I don't think you didn't list it there. So yeah, it's ninety four point nine percent. I just missed it. OK. Thank you. I had a question on the budget piece, the plus one. Which category was that in? Plus one. Let's see here. It's what line item it is. It's under operations. Under operations. Yes, sir. And that in the eight in the eighteen nineteen budget that shows an increase to one twenty five. Is that correct? Yes, sir. Correct. And did we increase that in seventeen eighteen? We actually increase this year, but we have savings that will be able to accommodate it. Any other? I'm sure there's questions. One question, the three percent increase over the five years, is that based on historical or how does that drive? That is based on my story on that, because that's just what we've done in the past. But if there is additional methodology. That's just a planning number. I mean, it approximates the population growth, customer growth. So it's a plan number. We reevaluate that on an annual basis, true it up if we need to. But for planning purposes, that's just a customary percentage that we utilize. So how does that compare to actual from previous years? Yeah, we know. Yeah, we don't have that right now. We can get that back to you. And just just to let the people know, we do plan to come back to you around the twenty fifth of June to finalize that. We'll bring back any answers to any questions that we don't have today. But today we are seeking direction from you that if this is something that you'd like for us to pursue and breaking this out as an internal service fund, then we'll come back to you as such around the twenty fifth. But we'll get a response to you on that question. Yeah, I just wanted to say as far as I'm concerned, I really like this idea of separating the having a separate internal service fund. I actually was had not been aware. I don't know about the rest of you that it was lumped together with water. So that seems to me arbitrary. That was a kind of arbitrary. I'm sure there was some reason behind it, but it looks arbitrary and it doesn't look like it was good for the water department either. So it's better for water. It's better for customer service. It's better for the public for transparency. And now when questions arise about the about what's being spent in the internal service fund, it'll also be easier to separate those numbers and and calculate them. So anyway, this is an excellent resolution to a problem I didn't I didn't even know existed until reading about it. But I myself approve very much. Yeah, I mean, go ahead. No, I approve, too. I think it's a great idea to do it this way. And I'm sure it started that way. Maybe water was the biggest person or department or whatever. Sometimes you just do things and keep doing them. You know, I guess the the obviously other than the than having it all in one place where you can see it. We've all known that there's been, you know, cost of service to all the utilities. There's really not any change there. I guess a major financial change is going to be the reserve requirements for the water fund. I mean, that's if we were reserving based upon what we were collecting cost of service from all the other utilities, that's a that's a huge, huge part of the waterfront. That's a big number, as you can see, one and a half to two point three million. That's that's to me. That's a major financial impact for this is doing that. So now we go from having more more days and reserves for water. Yes, it definitely right. It's an opportunity. It increased the reserve a little bit more than it needed to be. And we also get questions on occasion for exactly how customer service is funded. So the way that we've laid that out, I'm hoping that explains to the public a little bit better. Transparent. Yep. Very good. Any other questions? No. Thank you. Thank you. Appreciate it. Okay, next, next time we have in the work session is to is item C, which is to receive a report, hold a discussion and give staff direction regarding the water fiscal year 2018 19 operating and capital budget. So, Mr. Chairman, again, Tony pointed director finance, a PB members, thank you for having me today. Over the last several months, we've had a lot of internal staff discussions, certainly as as you've just seen, breaking out the customer service operation from the water front was was a result of some of those internal discussions feedback that we've gotten in the past. And so you'll see the impact of that today and very similar to what we've done on the solid waste side. We really looked at this operation. We've also looked at the CIP program to make sure that that those were in line and easily justifiable. So I'm happy to present to you today. Our proposed budget. As you saw in your backup, we do have two options that we want to discuss with you today and certainly get your feedback and your direction on which option you you would you would like for us to do. You would like for us to continue to proceed with. So, just briefly want to talk with you a little bit about our customer base. So as you can see, we've had a, you know, roughly a 2% increase in our customer base. And that goes to something very similar to what we see on the population side. We've broken it out for you between residential, commercial, wholesale. And so you can see that the total growth has been around 2%. 2015 and 2016 we saw a little bit higher increase that we had in the prior two years and certainly last year we dropped back down to about 1.5%. So, on average, it's been about a 2% growth in our in our customers. So, I wanted to kind of show you this this this chart here and let me say that in the past, the department has brought forward to the PB a separate presentation regarding customer class and volume. What we've done this time just for expediency purposes of we've kind of combined this along with the financial trends. We have both the loose field treatment plant and also the Ray Roberts treatment plant. We have the green shaded area represents the loose field treatment plant that's about 25 29. And then we currently have the Ray Roberts, which is the first shaded area that adds, I believe about 20 mgd based on where our customer demand has been and where our production has been. This expansion about a 30 mgd expansion to the Ray Roberts plant will come somewhere in 2027 when we talk to you a little bit about our CIP program will talk to you about. We've already started to make plans within the five year C IP plan for a $9 million design of that expansion. Again, with all these programs will continue to evaluate those as we move forward. Our production levels have been what our demand is from our customers. As you can see, we have a couple of outliers here over the last two years where we've actually seen a decrease in our peak water usage. But again, we continue to budget basically what's considered a normal year. That's the blue trend line. The red trend line is a dry year. The green trend line is a wet year. And so we budget based on a normal year for production purposes. One of the water assumptions, some of the assumptions that have gone into this forecast is that all rates are based on cost of service. We do have a cost of service rate model that we utilize. We maintain a debt service coverage ratio of 1.25% or higher. That's a standard that's utilized by most bond rating agencies, but it's also part of our debt policy for our utilities is to maintain that, maintain that not just as a utility system, but for each individual utility. We have standard targets that we've had historically here at the City of Denton. 100% revenue funding of our distribution system replacements, 25% revenue funding, and 75% debt funding of any treatment plant infrastructure expansion primarily or just infrastructure. And then our target has been on the reserve side on the operating reserve, 33% to 50%. This is a customary tool that's used when you have a range of targets to allow you flexibility and that way, you know, there's a floor of 33%, but it can be as high as 50% and we manage to those targets , about 120 to 180 day range. Also, the last two pieces here, multi-year financial planning to minimize rate increases. If you recall for last year's presentation, there was an assumed 2% increase in rates for the five-year plan. In both scenarios that we have for you today, those have been eliminated. And, you know, some of that has to do with the fact that we 've pulled out this customer service operation that was building on top of that reserve that it won't do that now. And then finally, rate revenue forecast is based on 145 gallons per customer per day. So some cost containment strategies that we've utilized, not just this year, but really, really starting last year was to improve our debt service efficiency by balancing CIP s and our cash flows, making sure that we're issuing debt, that we're transferring money over to our capital program as those projects are coming forward and we begin to enc umber those funds. We also include a assumed salary savings for just normal attrition and turnover within our operation. We reduced revenue funded capital in 19 by 2 million to level out the five-year. And so we've tried to smooth that out on what we 're contributing to our capital program. And then we removed customer service, as we've talked to you already, from this budget to better reflect the operating days and the reserves. The only piece that's now, that's kept in the water fund is water's contributions and expenditure to that internal service fund and that's utilized to, as part of the calculation for the reserve. Like every business and public enterprise that we have, there are certain risks associated and so we wanted to point those out for you just so that you know that we're cognizant of these things and might be coming in the future that might impact this financial forecast. Raw water transmission lines costs, the Lewisville Dam repair, that's an issue that you've heard in the paper recently. Obviously I've already talked a little bit about this 30MGD expansion for Ray Roberts that we'll continue to evaluate. It's currently outside of our planning window, other than we have a $9 million plan design in 2022. And another transmission line replacements funding is also an issue that we need to be aware of. And then age and condition of Lewisville pump station. And then finally we do have a declining per capita water usage. We've seen that over the last couple of years. We believe that some of it, or a large part of it has to do with just the fact that our customers have more efficient appliances within their home, maybe a little bit more cognizant of the water issues in the area. So the two options that we wanted to talk to you about today, and let me say that our recommendation to you today is option one, but certainly if the PUB would like to entertain option two, certainly that's your prerogative. So option two does include a 2% rate decrease across the entire system. We'll be coming back to you in a future meeting to talk to you about what that means specifically to each individual rate class as we model that within our rate model. And then option two, and so option one is an option two that eliminates any future rate increases as well that previously been included. Option two, basically this is a no rate increase next year or any of the other four years of the five year plan. But what we've done is because there is additional reserves or above the minimum reserve, we've increased the amount of revenue funding capital and decreased the amount of debt that we'll plan to issue in the future. So those are option one, option two. So just quickly, I wanted to walk you through our option one forecast. As you can see here, we in this forecast, the 2% decrease in rate revenue, no increases in the future. Our reserve target or our reserve ends at about 20.746 million, but yet that's still a little bit above where our minimum range is about 15.5 million, maximum is 23. So again, we're managing to that range. If you look out in the out years, we stay pretty well above each one of those, the minimums. And so we think this is a good solid plan for the community. Our debt service remains above 1.25 each year of the plan. And so again, just wanted to just reiterate this plan is a 2% decrease for next year, no rate increases in the future. Option two is the no rate changes. And again, as I mentioned, what this plan does, it reduces the amount of debt service that is planned to be issued going forward in each of those last four years. Now we evaluate, just so the board knows, we evaluate every year where our CIP program is, and before we issue any bonds, we make those decisions. The last two years, we've not had to issue any debt for this utility and we'll continue to do that as we go forward. And so we'll only issue the debt when those projects are ready to go. And so within this plan, as I mentioned, it's a little bit better as far as our operating reserves for fiscal year 19, we're at about 18.4 million out to the final year of 2023, 18.8 million. Again, each one of those years is well above the minimum range for the financial forecast or for the targets that we 've established for this fund. Some of the highlights for you, as you can see, this is a breakdown and we've given you a three year history of where those revenues have been by each individual class. I will mention that the cost of service that you see here for General Fund, electric, wastewater, and solid waste are attributable to some of the management oversight that's included in the water fund, our utility administration that oversees some of these functions that are outside of this fund. And so there'll still be some revenues that are coming into this fund to recover some of those costs. Our budget highlights on the expenditure side, as you can see, we do break these out by classification, you know, heavy concentration here in our debt service. And so we'll continue, like I mentioned, we'll continue to evaluate that going forward, only issue the debt that we actually need for the projects that are ready to go. So currently, where our rates are for just wanted to give you kind of a brief picture again, this is all subject to change. But our current rates is this yellow bar that's where we currently are for a customer that's utilizing about 920,000 gallons per year on the residential side, with a 2% decrease that slightly moves us to the left of that. We anticipate that some of these comparable utilities will likely be seeing increases in water rates this next year. We've still not been able to confirm that they're still also working on their budgets. But as we get that information, we'll bring that back to the PAB to let you know where they are. Yes, ma'am. Increases, did you mean decreases? These comparable utilities will likely see increases in their rates. Increases, okay. Yes, correct. So with this proposed decrease, we'll actually be further to the left of this comparison. Good, thanks. Yes, ma'am. For a commercial customer, again, this is, again, the impact. Again, we'll need to put all this into our model and bring that back to you to get you a better idea of where we're actually going to be. This assumes a 2% decrease. Again, as this information becomes available for what these utilities are going to be doing, we'll bring that back. But likely this will continue to push us further to the left where we are, even with our commercial customers. And then finally, we show you a commercial customer with 200,000 gallons of usage per year. So that wraps up my piece of the presentation. We can either, if you have questions, we can go through that now, or the department is going to come up and go through their presentation. But whatever you would like, yes, ma'am. On personal services, I always look at actuals from prior years. Why are we going from roughly $6.8 million in actuals for personal services to $8.85? We don't have any FD counties in that. We don't have any pre-staff in there, right? Two? No, some customer service. We have a lot of salary savings in the previous years. Each year in the past, we have a lot of turnover in salary savings, so that's why they're lower. We budget each year based on all the employees that we have fully being there for the full year. So there is a difference in that. And we can get you how many positions were empty in the previous years, if you'd like. You answered the question. Thank you. Excellent. That would be interesting to see, because I know we have unfilled positions. We budget for them, but they go unfilled. So if we're actually getting to what the actual filled positions would be, is that what we're saying? Correct. And what we can do is, with the other question that was asked on customer service, we can bring that back to the P AB and show you what that trend has been. Okay. Okay. Other questions? I had a question. To me, it seems, just looking at the two options, it seems counterintuitive that you'd have a rate decrease and have less net loss than you would. But I just want to point out that it looks like it's coming out of revenue-funded capital. The no rate increase, there's more revenue-funded capital in that number. That's correct. Is that correct? Correct. Again, the plan would be to issue less debt and revenue fund more of that capital. Right. And also, on the 145-gallon per customer per day, I know it 's been trending down. You said it was a two-year trend. I don't know if two years is a trend. It could be just a phenomenon. But looking at the wet years versus dry years, it's hard to look at it 12 months because you may get rain in certain times of the year when you expect your water usage to be up and you didn't use it. And so I think that's what we saw. We had an extremely wet year before last, and it was down. But then not as quite a wet year, almost a normal year, and it was down as well. And it's not so much the amount of rain, it's the timing of when the rain happens. I will tell you, and I do have that here for you, the gallons per customer per day in 2013 was about 158. In 2014, it went down to 138. 2015, 140. 2016, 140. 2017, 134. We're estimating 142 for this year. And so that is something that we're cognizant of. Again, Mr. Chairman, I'm not sure that three years, four years is a trend, but it's certainly something we're aware of and it's something that we may need to take action before too long. So it is something we're aware of. It's something that we do track. >> I would just add, Mr. Chairman, on page six, the water, the future risks and mitigation, this is something I promised him I'd bring up. But these are all huge costs. It's something that we manage the reserves very closely. We're trying to be as customer friendly as we can in terms of our needs. We're asking for what we need at this point. But there's a lot of large projects out there that are requiring several years of advanced planning in terms of when we're issuing the debt. So I think it's just always something you're pointing out the volatility of funding, you're right. And there's also some definite risks out there that are high dollar ones that we just want to make sure everybody is completely aware of. >> Okay. >> Any questions? >> I have a question. Maybe I'm looking at this wrong. But under option one on the budget, 2% rate decrease and we 're showing plan, am I looking at this right, the revenue of 43.128? >> The 2% is actually for fiscal year '19. >> Okay. >> Yeah. So the total revenue there is 44.9 million. >> Okay. Versus the 45 if you had no rate change. >> Yes, versus 45 and option two. >> Okay. Thank you. >> Yes, sir. >> And I would just add to the questions that have been asked about the decrease. The other thing we're really trying to do is not add to the debt burden. It's very obvious in 2023, 2024, when that next expansion becomes necessary to plan for it, you know, we're trying to create some room. So to the extent that we've got additional reserves right now, we can pay for revenue funded capital. We're doing that. But we're very concerned about how can we retire as much debt before we're going to have to, you know, bring on additional debt for that next plan expansion. So that really is driving most of our mindset right now. >> I'll go ahead and ask Dr. Banks will come up here and he 'll walk you through kind of the departmental section of this presentation. Yes, ma'am. >> I just wanted to say just to point out first that I applaud the proposed rate decrease and it's good news to hear about the reduction in per capita water usage. And as you mentioned, you know, that part of the cause or maybe most of it is due to just improvements in technology that don't waste as much water. But it's also the case that water has a rate structure that encourages conservation by just by default, by having a higher rate for commercial and a lower rate for residential . And I have always liked that and I have always thought that , you know, wanted to see that policy at least explored with our electric company as well. I was wondering one question I had regarding that is, you know, to your knowledge, have there ever been complaints from commercial customers that, you know, what about why do residents pay less than we do? Not to my knowledge. I'm looking at Dr. Banks. No, not to our knowledge. Okay. Well, and that's that's wonderful to hear. So anyway, thank you. Morning board members, Kenny Banks, general manager of utilities. I'm here to give the departmental presentation component of the water utilities presentation. I appreciate the opportunity to bring this information to you. We'll talk a little bit about our accomplishments to start out with for 1718. We started our five year update of the water wastewater impact fees. We're currently working with the capital improvements advisory committee, which is a group that is put together to review those impact fees. Initially, we will be bringing those back to you later this year. We started the 25 year water distribution master plan. We completed a preliminary design for solids handling for the Louisville water treatment plant and we're moving into final design. Very important project for us. The solids handling there has become a bit of a challenge and and this will allow us to more effectively dewater the solids and will also help out on the wastewater side as well. We completed the Lake Louisville buoy installation project. This is the buoy line that goes in on the what is known as the party cove on Lake Louisville. Basically where the intake structure is on right there by the I 35 bridge. We, I'm sorry. We completed a chlorine boosting facility at the South waste elevated storage tower. This is the storage tower that is on the lively road that is supplying the Rose Ranch community. It's far out in the system and and bit of a challenge to deal with with regards to turnover in the water at the tank during certain times of the year or so an important project to get get in there and and make sure the water quality is as high as it could possibly be in that facility. We did also complete our water distribution projects in advance of the plan bond funded street reconstruction work. This is a very important issue for both water and wastewater to get in there, evaluate those lines, make sure that if a street project is going in. Those lines need to be replaced based on our asset management or condition assessments. We want to get in there and get those done as a part of that construction process so that we are as cost effective as we can be. And also, so we only disturb the neighborhood or inconven ience to citizens one time. Some goals that we have coming up for the upcoming year is to complete our five year update of our wastewater impact fee study complete the 25 year water distribution master plan. We are currently in process of working on our 10 year utility management study item was brought to you as a work session item. A few meetings back on that. This is a charter requirement and we're actively working on that now. We're beginning construction of the Lake Louisville water treatment plant phase two rehabilitation and the solids handling projects so design was done last year we're moving into the actual treatment, our actual implementation of that treatment plant project. This is a big project. It has a lot of moving parts. A lot of it is related to our our switch gear and our pump motor system that's out there that needs to be rehabilitated is going to involve the construction of a of a new building out there that will house our skater system and some of the technology necessary to run the plant. And then also it will involve some rehabilitation of some of the treatment technologies there at the plant. We are going to complete the Ray Roberts treatment plan and equipment assessment move into final design for plant rehabilitation. As Tony mentioned earlier that that plant right now is a 20 million gallon per day plant. It's designed in four phases it can go up to 100 M.G.D. and basically it's designed to go 20 30 for the first phase and then 20 30 for the second phase. So as we move into the project of doing the 30 M.G.D. expansion that's right on the outside of our five year CIP right now we want to be sure that we have rehabilitated and assess the 20 M.G.D. so it's in good shape prior to moving into that 30 M.G.D. expansion. So this is part of that project. We are implementing a water info master program basically a computer assisted decision making program for our water line infrastructure replacements just to help us be even more efficient and have a better understanding of our assets so that we can do a better job coordinating with the streets department and wastewater department on those service replacements. So our budget emphasis is really about water system reliability and sustainability. We want to be sure that our we plan and implement for replacements of our aging infrastructure around the city and then certainly plan and implement our capital improvement programs to support the community growth that we anticipate. A couple of process improvements that we're we've implemented and some that we're looking at we've converted from paper map books to digital systems for water distribution which has made the infield work a lot more effective. We're more effectively integrating and using our geographic information systems and our computer maintenance and programs for software to basically plan and prioritize our water distribution line replacements and coordinate again with the streets department. It's all about trying to make that as quick as we possibly can and as coordinated as possibly as we possibly can so that we don't implement any delays throughout that entire process. So future process improvements are to improve our efficiency and cost effectiveness on our water main line replacements develop a permanent system for handling and disposing of solids as I've said solids have become a bit of a challenge at the Louisville plant. We are currently using a temporary fix which is a large pond system out there that allows the solids to settle and then we decant the water off the top. We need to move to a permanent solution of dewatering those solids and then just continuing to improve our asset management program. Position summary real quick. A couple of things about this. We have added two positions basically a deputy director position for water wastewater that's currently unfilled and we have consolidated the water and wastewater crews under a single water and wastewater superintendents so the water and wastewater superintendent position is a new position. So we've added those two and then we had a halftime admin position that we actually removed from the budget so that's the difference between the 102 and the 103.5 that you see in the in this position summary. A couple of other things that we've done kind of a small version of what you saw with customer service. We have a group called the field service technical group that had employees that were co that were funded from both the water fun and the wastewater fun. The majority of that group resides in the wastewater funds and what we've done is we've actually moved those positions to be completely under the wastewater fun and then we're going to handle the work that those positions do for water simply by a transfer. We are adding electronic tech to provide maintenance of the new equipment that is related to the ozone system at Lake Louisville. We have a lot of instrumentation there chemical control turbidity analyzers chlorine analyzers etc. So that position is being added. Five year capital improvement plan just to kind of hit the highlights on this. You will have a lot more detail when you get the full budget books on this and one of the things that I wanted to to point out on this is kind of how you work through the five year CIP plan in the budget book. So you'll notice over on the left hand side there are group assignment numbers and then those assignments numbers have a particular category associated with them. So those categories are some in this five year CIP plan. But as you go into the individual groups you can actually see detailed sheets for each one of those in the full budget. So when the full budget group book gets to you you'll be able to go through the capital improvement section on a on a home business unit basis and actually see each one of these five year CIP plans by their group assignment number. So it kind of helps you see what we're doing in each one of the individual departments. We've got a very aggressive plan as you can you can see a lot of moving parts there. We've broken it out here in terms of the grand total and the amount that we anticipate right now in terms of required bond sales for each of the years going forward. As Tony mentioned earlier we're going to continue to look at our existing funding and of course always try to reduce those bond sales when we can. I asked Lori to include the group assignment numbers on these major CIP projects that I've listed for you. So you 'll see the numbers over here to the to the side. And basically these are some of our major projects that we 've got coming up with the associated timeline with each one . Just real quick the North South Phase 3 big project that we 've got going on about thirty nine hundred linear feet of forty two inch transmission main along Bonnie Bray that runs all the way from I-35 to scripture. The all red system is one that we've had on the books for quite for quite a while. It's a twenty four and thirty inch water transmission line. Design is anticipated to be completed by the middle of June and right away acquisition completed by the end of September. We hope to move into construction by January of next year. The solids handling we've we've talked about Ray Roberts performance upgrade. We've talked about basically getting that system in line in anticipation of the expansion. Basically the Riney Road Booster pump station is a pump station that is needed for capacity to serve the North Dent on area. The raw transmission line to is part of our line assessment for our big transmission assets that are moving from the Lake Louisville pump station to the Spencer plant treatment facility. And so we're in process right now. We've completed the first phase of repairs on the 30 inch line. This is a dual line system a 30 inch and a twenty seven. We will complete the 30 inch next year and then we will start moving into the second phase of the project which is to look at the twenty seven inch. We're timing this because we have to be water those systems . We've got to bring it back online during the summertime to handle the irrigation needs. Disinfection conversion for the raw water are the Ray Roberts water treatment plant is basically to take a convert a gas based system for your chlorine to a liquid base much safer much easier to control. And then we've got the design of Ray Roberts coming up get the design out of the out of the way first for that nine million dollars and then make our plans for when we're going to actually implement the construction phase condition assessment of the southwest and east side transmission lines. A lot of our transmission assets are are getting relatively old and start with. So we're starting to take a look at some of the larger ones and doing condition assessments to see what shape they're in and then plan accordingly. And then the Louisville Dam safety modifications are basically just our payment to the Corps of Engineer for the repair work that's going on for Louisville Dam big project that's estimated at a 15 million dollar total we're programming and three point seven five million on a yearly basis for the next four years. I have provided a map in your presentation that goes through each one of these major projects and got them listed by the individual year color coded so you can kind of match those up with the with the sheet. And basically that's all I've got. So I'd be glad to answer any questions. I do have one more question. I want to make sure if we do the 2 percent rate decrease after 2023 we're not going to have to have a huge rate increase because of these other projects that are at risk. That is definitely something that we're looking at the declining GPCD we're watching every year stepping forward. And so the exact year in which that project is going to be implemented is uncertain. We'll get more certain as we move towards it. But yes there will be a large amount of debt incurred to do that project. It's going to be one of the biggest capital projects that we've had since the actual construction of the plant. And I guess the strategy is to hit debt or well we're hitting revenue revenue funded capital. This looks pretty heavy the next three or four years. Versus debt. And so I guess the strategy is to make room for the debt. So there's not a need for it. One thing you hate to do is give something. Give do a rate decrease and have to come back five years later. As Susan said that's as long as the strategy is to make room for that and looking back at our operating budget I mean our debt service ratios seem to be in good shape to 2 plus over that time. So that's seems to be a sound strategy. Yeah we're we're definitely paying attention to it and I keep going back to the risk mitigation risk and mitigation and it's one of those things where this is our best plan today. And we'll continue watching how our reserves go. You know how the revenues are affected and but yeah we're trying to create as much room as we possibly can for the debt. So when we have good years we're investing in revenue funded capital but as long as we're staying within those bands that the P.B.A. Council sent with regard to reserves we feel pretty good right now. But there's still more analysis that needs to take place. I think like I said with solid waste this isn't our money this is the customer's money so we never want to be charging more than we have to or keep more of their money in reserves than we have to. I just want to make sure we're not going to have to do 10 percent and 24 or something. But I think it's sound as best as it can be for what we know today. I did notice on group 36 replacement of lines that ends in 2020 so there's no we don't we really don't think there's any lines that need to be replaced after that. Well yeah there will be but that that that we're loading up heavy on the front end on that purpose to try to level that out. Is that part of the assessment the condition assessment will tell us. Yes on the on the transmission side we'll be able to have a better handle on right now we've got a we've got a I think a very healthy amount in for the 27 inch transmission line the other transmission line assets. I'm not as certain on but we'll have a much better sense of where we're at after that condition assessments done. Okay. Other questions. Thanks. Thanks. Okay. That concludes our work session. We have. We do have a closed. We do need to go into a closed meeting. Because we have an action item. In open session when we come back so. If this time would ask that we can be into a closed meeting it's 10. Okay we're back into our open open meeting at 1028 AM. May the 7th. 2018. First item we have under. Individual consideration is to the draft minutes. The public utility board meeting of April 23rd. 2018 or there any questions on these comments. Corrections. Yes, I. There was the one vote that. Where there was a. Where I was the dissenting vote. And I'm trying to bring this up right now. I'm trying to bring this up right now. And. The reason for my dissent wasn't given. The dissent wasn't explained. And I think that, and there may have been some other times where this was the case and I didn't. Catch it. But I think in general. When there's a dissenting opinion. If the reason is stated by the dissenter that that, that reason should be in the minutes. And I think that's something that I would prefer to see. Just something I prefer to see. So however. However you want that to be worded. I think. I mean, in the item. Perhaps under the comments. When it's during the discussion of the item. Those are recorded. So. I think that's something that I would prefer to see. And I did, I did state it. So I stated my reasons in the recording. This was about the. This was the, with the redacted contract. See the number. That would be high to see. Yeah. Yes. So did you just want to send some there? Yeah, just. Sentence in there for the reason. For the reason. That's the reason. That's the reason. That's the reason. Yes. Exactly. Exactly. Okay. Yeah. And that was stated on the record, but it. And we can put it in the discussion. Oh, exactly. Yeah. I mean, obviously. Okay. Yes. All right. Yes. Yeah. I voted, I voted against it because of all the, because of all the redactions. So yeah, just to. And I'm. Yeah. Okay. So with that correction on item C. Corrections or that addition to item C. If not, is there a motion then to approve the minutes with that correction. I move. Have a motion. And a second. Any discussion? All in favor say aye. Aye. Any opposed? Okay. Minutes are approved. Next for individual consideration, we have item B, which is to consider recommending adoption of an ordinance. The city council of the city of Denton. Providing for authorizing and approving the execution of by the mayor of a power purchase agreement between the city of Denton and blue bell solar to LLC. Proving and authorizing the acceptance and approval by the city manager or his respective designee. Of guarantees and letters of credit issued by blue bell solar to and next year energy capital holdings Inc. Further securing. The obligations of blue bell solar to to the city. So. I believe George. Is going to lead us to this. Good morning, George Morrill, general manager of DME. It's a pleasure to be before you this morning to talk about our recommendation for a new renewable power purchase agreement. The project's called the blue bell solar to project. And a little bit of history and background. The purchasing department here at the city, the city issued an RFP for solar and wind energy back on back in June of last year with bids due October 4. And we were blessed with a lot of proposals. You can see here in the presentation we had 41 separate entities submit proposals. 89 different projects and when you looked at different timing and sizes and locations, we came up with 846 separate little unique offers. And we start dates ranging from mid 19 through 2021. And so RFP was very clear what what we would look at was four components for the evaluation price, of course, location, which talks about how easy it is to get it back to Denton. Hourly production profile, which indicates how much energy we're actually going to get from that plant and the past performance. And so I was also fortunate to be part of a big group of with experts looking at this evaluation. And we even had some outside council assist us with a fresh pair of eyes. And the recommendation was the one I'm bringing forward to you today is the blue bell solar to project recommended by next era proposed by next era. Energy and a little bit of background about that project. It's located in Sterling County, about 200 miles west of the city, using solar photovoltaic technology with his with crystalline solar cells. The size is 100 megawatts. So pretty substantial project for us and a 15 year term in service date by the end of 2020, which matches up well with city's policy to move toward 100 percent renewable energy. And that's a very competitive and fixed price for the term. And which is standard these days in the in the proposals, I think pretty much all our proposals were were that way. And that's that's good for the good for the utilities, good for our customers. So I did mention there's a note on the bottom of the slide. There's already a contract we have for blue bell solar one. And perhaps that was why we were able to get such an attractive offer is there's this would be layered on top of that and using the same facility. There's some economies of scale benefit for having the two projects together. And that one is scheduled to begin right now by November. This year is the current timetable. So we'll have our first 30 megawatts solar on the books later this year. So bringing forward that arrangement to you, there's a staff report and a what I call a lightly redacted contract. And why I want to compliment next era for working with us, you know, city's policy to be as open and transparent as possible. I asked them to, you know, let's work on this in that regard. And they were very helpful and supportive. So I did want to compliment them. So we're requesting the P .B. consider recommending adoption of this new renewable arrangement for 15 years of solar power. And I'm here to answer any questions. Questions. Yes. Yes. I have a couple questions. I wanted to ask if 100 percent of the power that will come out of this contract will be provided by city. And that there aren't any recs included or anything like that. No, you're totally correct. This will be one of the sun solar contracts. So when the sun is out and shining, we'll get solar energy when it's not in the evenings. Night times we'll get less or we won't get any depending on the solar insulation. So this one is not managed or in any way similar to other arrangements that other people have had in which we've had to do this. So that's great. I'd also like to ask. So we're we're we're purchasing this power from Bluebell who's setting up the solar facility. Have we evaluated like we did with the energy center? Have we evaluated building our own solar operation? I mean, yes and no. My experience over the years looking at these kinds of projects requires a tremendous amount of of expertise and specific to this type of development and program, you know, identifying a site, obtaining and managing that site, managing a project. You know, there's lots of different components that go in there. For us, it would be a relatively modest economy of scale, whereas a next era, for instance, they've got well, they're probably the country's largest wind power producer and they 're moving higher up the chain in the solar side. They're, you know, turning their head toward solar. So they've got a lot of background economies. They can mobilize bigger, you know, workforces that have expertise. So it would be difficult, extremely difficult for us to do anything even close to this. We'll mention if we were to do say a smaller solar project locally, which has pros and cons, and there's some pros to that. You'd be looking probably just rule of thumb two to three times as expensive as is what we think you might be able to buy from the open market. Okay. On a utility scale. Sure. Thank you. Yes. Other questions? Sorry, sorry. I'll just say that I'm really pleased that the company agreed to essentially only redact the price and to make everything else, or just about everything else transparent. So, you know, we can show the ratepayers, we can tell them that this is really the best deal, and even if we didn't have 100% renewable goal, this is still really the cheapest option on the market, and we got a really good deal on it. And they can look at all the other terms of the contract. So anyway, I thank you for working with them on that, and I 'm very pleased, and it makes me think very well of this company that we're working with. I think that's a good business partner. So I just want to mention that for the public, and also to thank staff for working on that. All right. Thank you. Okay. Anything else? Motion? I'd like to motion that we recommend this ordinance. Okay, we have a motion. Second, and a second. Any discussion. All in favor say aye. Aye. Any opposed. Very good. Thank you, George. Thank you very much. Okay. Next we have the ACM update. Thank you, Mr. Chairman, members of the board. In your packet, there are a couple of staff items here for your review or questions if you have one of those is the employee ethics policy that which was adopted by council. Middle of last month, Cassie Ogden here is present to answer any specific questions you may have. But in the packet you have a summary of the policy and the actual policy document itself that's been distributed to the city staff. The second item is a follow up on a water leak adjustment memo, and Tiffany Thompson to hear to answer any questions you may have about that item. We have questions I know we had a lot of discussion last time. Well, I'd like to say that I act in an ethical manner always, I wonder if any of the aspects of this policy impact the pubs behavior. The, the policy that council adopted last week will apply to the PB members, as well as I think all of our boards and commissions. So, staff is in the process of developing a training program with our outside council, and I would anticipate in probably by June, we'll be able to be in to provide training to all the various commissions that they 're impacted by that new policy. So, this is strictly the employee ethics policy which is a little bit different from the councils but yeah we'll be back to you in a month or 45 to 60 days at the latest to provide training. Okay, thank you. Good. I just wanted to thank Tiffany and staff for coming up with the water adjustment policy and putting all that, that together. I'm coming up with that document, and putting all that together that that was really informative and helpful. I was wondering is that somewhere on the website for the for the, I mean, obviously, they can see it in the agenda, but I mean, you know if you know people go to our water department, and, and if not, is that would that be possible . I wonder what category, you know, but to put that if says that somebody would know that there's a recourse to if there's a leak. I will confirm that that it's on the website I want to say that it is but I like to go back and look where it's at because we've had some relocation of items and so I want to make sure that I know where it's been located but if it isn't, I'll make sure it's on there this week. Thank you. I know that in my experience I've actually had to use this before, and the customer service representative is the one who told me about it I mean instantly, they were like, well, you can do this and we can adjust this bill so. Yeah, it's usually initiated with the customer calling in, because they are aware that they've experienced this excess usage and then we go through what was it for because there was a little bit of education piece with that but again I will confirm that it's on our website that information, thank you for the feedback. Thanks. Thank you. And beyond that, there's really nothing further to report just as a reminder to the board that the next meeting will be on the 21st of May, because the following Monday is Memorial Day. So, just as a note of reference and a reminder. Thank you. Okay. All right, let's see. And we'll go ahead and do concluding items now, which basically is to respond to inquiries from the public utilities board or the public with specific factual information or rest station policy or accept a proposal to place the matter on the agenda for an upcoming meeting. We have anything to add to future agenda. Yes, I'd like to repeat a request that I had made. Pretty soon after I first got on the public utility board, which, you know, now that we have a new general manager for DME and new head of finance. I think it would be a good time to revisit this, this, this question and explore this possibility and that is the question of why DME rates aren't structured like water rates, whereby the for our water commercial users are charged more and residential users are charged less and obviously commercial users are the big users and any residential user whether you live in a mansion or an apartment is smaller user than, than the, than the commercial account. So, you know, that seems to be working really well with with water. Obviously this water and electricity on the one hand they're apples and oranges. But you know they're both the service provided by utility service provided by by the city. And it encourages conservation and keeps residential rates low at the same time and I was really interested to hear in our, you know, just discussion and update on on water budgeting that there haven't been commercial complaints about the higher, you know, rates, rates for water. That is to say you know commercial customers haven't been complaining and lobbying to get you know why don't we get the, the same rates that that residents do. We may have some now, they're watching. So, yeah. But, I mean, but, and I think they should know, you know, it's there. So anyway, that's something that I mean I think it would be helpful to at least explore that possibility now that we've got, you know, some, some new brains on board, and for us to hear what the pros and cons might be. But I just think it's always good to, you know, question the, this, this, this status quo on an issue like this especially if there's a possibility of of lowering residential rates even more. How many agenda items was that. I'm kidding. I just said, No, I know, I know going through the budget, you know, we'll look at it and I think probably , I don't know if in the budget or maybe it's a separate agenda item where we look at cost of cost of service, and what the rates are based on, it's cost of service and obviously, you know, water is, there's an incentive and water for conservative for conservation. And it's, you know, the cost of service for a higher volume is a lot more. And it's not necessarily so on on electricity. I mean, I'm just comparing apples oranges but I think that perhaps you know maybe we look at looking at cost of service on both utilities. But at least we'll have a discussion about it. We'll be ready. Okay, any, any other comments, agenda items. We will not be coming back into open session after that will be adjourning out of the closed session since there'll be no other action items.