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.
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.
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.