WEBVTT

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May 21st 2018 public utility board meeting to order. Our

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first part of the

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meeting is in work session. Our first item in the work

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session is to receive a

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report, hold a discussion, and give staff direction

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regarding the wastewater and

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drainage fiscal year 2018-19 operating and capital

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improvement budget.

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Mr. Chairman, members of the PB, my name is Tony Puente,

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director of finance. We're

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gonna tackle this in two phases. We're gonna go ahead and

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go through the

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wastewater budget which excludes the drainage component and

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then we'll come

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back to you and we'll go through that particular budget so

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it'll be a two-part

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presentation here for you.

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And as you can see there's a number of staff members

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present. If there's some

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questions that I can't answer they'll quickly get up here

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and answer them

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for me. So just quickly I want to walk through the volume

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forecast again very

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similar to what we did with the water volume forecast. We

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've kind of

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we've combined this together into this presentation. As you

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can see we've seen

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about a about a 2% 2.2% growth in our customers for

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wastewater,

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residential, commercial, wholesale. The total growth it's

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been about 2%. We did

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see a little bit of a spike there in 2016. You ever see the

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cursor up there?

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Yes. So in 2016 it was a little bit of a spike, 2.7%. This

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budget's kind of based

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on a 2.1% growth in customers going forward. A little bit

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about our treatment

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plan. I will, if you look, if you saw in your backup that

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is one of the major

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issues that's out there for us and we'll talk a little bit

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about that as far as

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the risk to this fund. That plan is currently out here in

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2028. We anticipate

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the capacity expansion to that. About 8 MGDs is the kind of

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the next phase of

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that of that plant or it's a new plant, excuse me. We've

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seen kind of a you know

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levelized actual flow by year. Kind of came down a little

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bit this past year in

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2017. But generally I think we're kind of on a good trend

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upwards with again

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we'll be keeping an eye on kind of where those volumes are

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going

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forward. Continue to evaluate the need for that treatment

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plant. There is a

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possibility that that plant could go out a little bit

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further than what we

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currently anticipate but we'll be evaluating as we go

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forward. Some of the

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assumptions that have gone into this budget and this

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forecast is that all

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rates are based on cost of service. Both options that we'll

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present to you

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today do maintain a 1.25 debt coverage ratio that's

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consistent with both our

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debt policy and also our bond covenants that we have.

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Annual revenue funded

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capital based on asset management program. Collection

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system replacement

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funding target is 100% revenue funded for treatment plant

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infrastructure is

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25% revenue funding 25% debt funding. Those have been long

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established policies

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for the city as the board is aware. Reserves, there's no

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changes to the

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reserves. 100 to 140 day range that's about 28% to 39% of

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budget expenses.

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I'll show you in a forecast how we try to maintain those in

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both options.

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Continue to use a multi-year financial planning to minimize

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those rate

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increases that just simply means that we only issue the

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debt when we need and

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when that capital is coming forward. Rate revenue forecast

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is based on a

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128 GPCD per day that's a gallons per customer per day that

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'll be the kind of

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target that we'll be looking at evaluating as we go forward

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as far as

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the need for an expansion or a new plant. And then the one

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thing that

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almost very similar to what we did over on the water side

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with customer

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service. What we've done here is we're recommending to

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break out the drainage

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from the wastewater to better target what those reserves

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are for just a

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wastewater operation. We do plan to create a sub fund

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within the city's

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financial system to better account for those drainage

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operations and the

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drainage fee as well and any other revenues that are

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associated with that

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operation. We'll talk a little bit about that when we get

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to that presentation.

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For a long time we've maintained in the in the wastewater

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fund one million

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dollar drainage reserve and well the recommendation is to

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simply move that to

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this sub fund of drainage and then again just dedicated to

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that drainage keep it

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out of the wastewater operation. Some cost containment

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strategies over the

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last several months we've been looking at the CIP program

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not just for this

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fund but all funds across the city we've been working

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closely with the

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departments to understand what their needs are shortfalls

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any excess balances

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that may be there and how we can better utilize those going

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forward. We also

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included a salary savings budget again this is about one

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and a half percent

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it's very small a percentage but we do have turnover in

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that that it does

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explain some of the actuals in prior years compared to the

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budgets and we'll

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talk a little bit more about that here a little bit and

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then we do have a reduced

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revenue funded capital about 1.5 million and to level out

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the the five-year

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contributions that's just simply to keep some of the swings

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and to better kind of

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match what our cash flows are in our capital projects. Some

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of the future

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risks and mitigation as I mentioned there is this Hickory

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Creek basin new

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plant that is out there in that 10-year window it's about

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an 80 million dollar

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plant that's forecasted if you give me a second. Currently

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we're looking at about

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eight million dollars in 2024 that's for design and

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potential some land

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acquisition as well with the remainder to be issued 70

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million in 2027 again

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we'll be evaluating the debt to revenue component of that

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and looking for

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opportunities again that's the current plan as we continue

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to look on an annual

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basis on the volumes that are going through our current

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plant we'll be

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determining what the exact timing of that facility will be.

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Contractor cost

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excuse me contractor cost for CIP again we continue to see

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increases in those

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costs and so that's something that we have to be cognizant

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about as we go

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forward. O&M costs we did go through last year and again

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this year pretty heavily

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on on that O&M cost evaluating what's there what's needed

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making reductions as

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appropriate. Additional regulatory requirements again that

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's always

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something that's out there both with the TCEQ EPA so there

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's some things that

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we're continually continuously monitoring as far as this

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operation is

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concerned. So the two options that we wanted to present to

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you option one as

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you saw in your backup is includes a five percent rate

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decrease that does

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draw down our reserves I'll show you a little bit of what

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the impact is of that

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option two very similar to what we did on the water side is

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a two percent rate

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decrease but what we've done is we've revenue funded more

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capital and and

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trying to reduce and the leverage if you will the the fund

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going forward from

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the amount of debt that is dedicated to it. So this is the

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financial forecast

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with the five percent decrease. I do want to point out that

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previously or last year

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the forecast did include a two percent two percent two

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percent for fiscal year

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2020-2021-2022 along with this five percent rate decrease

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we are also

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proposing to eliminate those rate increases in the future.

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The current

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projection for our for our working capital and operating

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reserves is about

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twelve point seven million that's well within a well above

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the maximum target

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if you see here the 108 target is nine million the twelve

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million that's the

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range of our fund balance throughout this forecast under

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this scenario we

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stay above the minimum we go slightly a little bit lower

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here in 2022 but then

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we bump back up in 2023 our debt coverage ratios you can

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see here stay

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well above the 1.25 percent debt coverage requirement that

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we have in our debt

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policy. The option two scenario for wastewater as I

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mentioned is a two

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percent rate decrease this this decrease again also removes

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any planned future

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rate increases that were there last year again if you look

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at the operating

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reserves 11.3 million as well within that range and also

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going forward out to

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2023 we're actually back up closer to the maximum of that

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particular range the

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the debt coverage ratio as well in this particular scenario

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stays above that

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1.25 target that we have in our debt policy. The changes

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that you can see will

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be here in our debt service I'll go back a little bit you

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'll see that in 2021

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it's a seven a little bit over 7 million 6.5 million in

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2021 and you can see kind

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of decrease here conversely to that we've increased the

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revenue debt funding

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for 2019 and also for 2020 that then mitigates those future

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debt debt

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issuances that have been backed out as a result of this

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forecast. Just going

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through the budget highlights this is the detail for you on

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the revenues these

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revenues are a reflection of option one. Staff's

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recommendation to the board

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today is option one is the five percent decrease as you can

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see here these are

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just the detailed three-year history of our revenues and

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what they've done. Same

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thing with on the expense side we again this matches our

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option one five percent

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decrease of projection for you a recommendation for you

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again three years

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worth of history of expenses and where they will be in 18-

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19 under that

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particular scenario. So the impact the impact for you today

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here is the customer

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residential customer with 6,000 gallons currently the rate

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of that is about the

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$35.55 per month if option two is is opted that's a two

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percent decrease that

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would decrease that to about $34.85 and then of course

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option one you know gets

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you further to the left here at $33.79 option one would be

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approximately a

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$21 a year decrease to our customers in this particular

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scenario on a 6,000

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gallon 50 gallon 50,000 gallon commercial customer that

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that that

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customer currently is paying about $284 per month under

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option two it would go

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to 278 and under option one is 269 dollars I apologize we

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didn't we didn't

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put that on there for you so if you need those numbers just

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let me know for a

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commercial wastewater customer 200,000 gallon that customer

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currently pays about

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1,056 per month option two would go to 1,036 and under

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option one the

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recommendation would be a thousand and three dollars that

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wraps up my portion

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of the of this presentation I'll be happy to answer any

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questions you have

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or we can go to the departmental presentation and we can

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wait to the end

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whatever your pleasure might be questions on wastewater so

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the just

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question I had was the reserve targets are based upon on

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wastewater taking the

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drainage expenses out is that correct that's correct that's

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correct

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I'm asking yes ma'am if you want to go back to the rate

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reduction slides again

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do you have any concerns that you're showing negative net

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income for roughly

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five years at all I think certainly that that is that is a

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concern that's out

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there as part of this the risk we feel comfortable that

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based on the current

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reserve balances that we have and the fact that we'll be

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coming back to an

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annual base basis to reevaluate that again I think I think

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the fund is is

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well positioned within the reserve targets and the debt the

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debt coverages

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that we have long established and that our bond rating

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agencies routinely look

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at and and so I again I think we're in a good position with

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this particular

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recommendation it's really occurring because we're going to

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start spending

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down some of those reserves that yes a little bit too high

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okay thank you

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good evening mr. chair and members of the public utility

00:15:03.559 --> 00:15:04.320
board I'm here to

00:15:04.320 --> 00:15:07.830
give the departmental presentation for wastewater my name

00:15:07.830 --> 00:15:08.600
is Kenny banks and

00:15:08.600 --> 00:15:12.700
I'm the general manager of utilities want to go over a few

00:15:12.700 --> 00:15:14.360
accomplishments for

00:15:14.360 --> 00:15:17.120
for the wastewater department and I also have the

00:15:17.120 --> 00:15:18.639
environmental services

00:15:18.639 --> 00:15:22.029
department as a part of this presentation too so it's a lot

00:15:22.029 --> 00:15:22.399
of slides

00:15:22.399 --> 00:15:27.090
I'll try to paraphrase as much as I can we have completed

00:15:27.090 --> 00:15:28.720
the design of the

00:15:28.720 --> 00:15:32.110
Hickory Creek lift station replacement project and we plan

00:15:32.110 --> 00:15:33.080
on bidding this

00:15:33.080 --> 00:15:39.919
project in in 2018 the for actual construction we've

00:15:39.919 --> 00:15:41.159
completed the pecan

00:15:41.159 --> 00:15:44.759
Creek interceptor phase 4 project awarded a contract for

00:15:44.759 --> 00:15:45.840
the Cooper Creek

00:15:45.840 --> 00:15:48.210
interceptor phase 1 and phase 2 you'll see some of these

00:15:48.210 --> 00:15:49.480
occurring in the CIP

00:15:49.480 --> 00:15:52.480
update a little bit later in the presentation we did

00:15:52.480 --> 00:15:53.559
complete the update

00:15:53.559 --> 00:15:57.450
of our wastewater master plan model and then we are

00:15:57.450 --> 00:15:59.639
currently working through

00:15:59.639 --> 00:16:02.840
we've completed the acquisition of the consultant necessary

00:16:02.840 --> 00:16:03.759
for the study for

00:16:03.759 --> 00:16:06.240
the impact fees and we're currently working through those

00:16:06.240 --> 00:16:07.960
impact fees now we

00:16:07.960 --> 00:16:10.669
will hope to bring some of that information back to you in

00:16:10.669 --> 00:16:11.159
the late

00:16:11.159 --> 00:16:15.440
summer to early fall for the impact fee updates and then we

00:16:15.440 --> 00:16:16.679
have maintained our

00:16:16.679 --> 00:16:19.700
in-house construction and preventative maintenance cost to

00:16:19.700 --> 00:16:20.919
be substantially

00:16:20.919 --> 00:16:24.309
lower than our estimates of what it would cost us to

00:16:24.309 --> 00:16:26.240
contract those jobs out

00:16:26.240 --> 00:16:30.009
our goals for 1819 is to begin construction of the Hickory

00:16:30.009 --> 00:16:30.639
Creek and

00:16:30.639 --> 00:16:33.639
West peak flow detention facility projects these are both

00:16:33.639 --> 00:16:34.519
projects

00:16:34.519 --> 00:16:37.080
designed to help us shape off the peak flows of the

00:16:37.080 --> 00:16:38.480
wastewater to allow us to

00:16:38.480 --> 00:16:42.529
have a little bit more capacity in the system and and

00:16:42.529 --> 00:16:45.279
hopefully use that to push

00:16:45.279 --> 00:16:48.059
out some of those planned additional plant capacities that

00:16:48.059 --> 00:16:49.000
we talked about a

00:16:49.000 --> 00:16:52.409
little bit earlier begin construction of the Hickory Creek

00:16:52.409 --> 00:16:53.120
pump station

00:16:53.120 --> 00:16:56.889
replacement process project this is the old Alton station

00:16:56.889 --> 00:16:58.159
that we have out there

00:16:58.159 --> 00:17:00.769
the one that you may recall that we had some damage from a

00:17:00.769 --> 00:17:01.720
piece of concrete

00:17:01.720 --> 00:17:05.609
coming through it several months ago so we want to get that

00:17:05.609 --> 00:17:07.720
rehabilitated meeting

00:17:07.720 --> 00:17:10.740
and complete of course all of our EPA administrative order

00:17:10.740 --> 00:17:11.559
requirements

00:17:11.559 --> 00:17:15.180
continue to have our in-house construction be cost-

00:17:15.180 --> 00:17:16.240
effective and

00:17:16.240 --> 00:17:19.420
exercise our preventative maintenance costs so that we keep

00:17:19.420 --> 00:17:20.480
our overall system

00:17:20.480 --> 00:17:22.910
wide expenses down and then complete design and

00:17:22.910 --> 00:17:24.279
construction of a sludge

00:17:24.279 --> 00:17:28.319
handling project at Pecan Creek water reclamation plant

00:17:28.319 --> 00:17:29.359
this will be a big

00:17:29.359 --> 00:17:33.140
project for us we are hoping to be able to use this project

00:17:33.140 --> 00:17:33.799
to replace the

00:17:33.799 --> 00:17:36.359
existing gravity thickeners out there which will really

00:17:36.359 --> 00:17:37.319
help us on our solids

00:17:37.319 --> 00:17:40.319
handling and help our anaerobic digester be a lot more

00:17:40.319 --> 00:17:41.640
efficient than it is we've

00:17:41.640 --> 00:17:45.769
been having some challenges lately with the gravity thicken

00:17:45.769 --> 00:17:46.960
ers due to some of

00:17:46.960 --> 00:17:49.349
the changes that we've made to accommodate our lower

00:17:49.349 --> 00:17:50.279
phosphorus target

00:17:50.279 --> 00:17:53.130
and the resulting solids that have come from the change of

00:17:53.130 --> 00:17:54.960
that process so

00:17:54.960 --> 00:17:59.400
overall budget emphasis is to deliver cost-effective

00:17:59.400 --> 00:18:01.279
solutions that lower our

00:18:01.279 --> 00:18:04.920
asset lifecycle cost while continuing to reduce our impact

00:18:04.920 --> 00:18:05.839
on the environment

00:18:05.839 --> 00:18:08.960
preventing the overflows making sure that we're replacing

00:18:08.960 --> 00:18:09.880
these systems at

00:18:09.880 --> 00:18:12.710
the right time based on an actual assessment of the asset

00:18:12.710 --> 00:18:13.759
not just based on

00:18:13.759 --> 00:18:18.599
on an expected life we want to leverage technology and our

00:18:18.599 --> 00:18:19.759
work processes to

00:18:19.759 --> 00:18:23.930
enable our employees to be proactive and really service-

00:18:23.930 --> 00:18:25.359
oriented and by by

00:18:25.359 --> 00:18:29.119
service-oriented this I really see that as a means of being

00:18:29.119 --> 00:18:31.119
able to minimize the

00:18:31.119 --> 00:18:33.609
problems that we have in our system by using our asset

00:18:33.609 --> 00:18:34.759
management so if we can

00:18:34.759 --> 00:18:38.259
reduce our mainline service calls our sewer chokes our san

00:18:38.259 --> 00:18:39.039
itary sewer

00:18:39.039 --> 00:18:42.440
overflows that's a means of using that asset management

00:18:42.440 --> 00:18:44.160
program to increase our

00:18:44.160 --> 00:18:50.119
service to the community in terms of process improvements

00:18:50.119 --> 00:18:51.039
our asset

00:18:51.039 --> 00:18:54.369
management plan continues to be refined and updated and

00:18:54.369 --> 00:18:55.680
continues to be a very

00:18:55.680 --> 00:18:59.859
effective tool for us to reduce our O&M and combine that

00:18:59.859 --> 00:19:01.319
with our in-house

00:19:01.319 --> 00:19:07.259
construction and system maintenance we do want to install

00:19:07.259 --> 00:19:08.519
as I said the

00:19:08.519 --> 00:19:11.700
secondary sludge dewatering equipment out there for the

00:19:11.700 --> 00:19:12.960
solids handling at the

00:19:12.960 --> 00:19:16.079
wastewater treatment plant to help us out both with the

00:19:16.079 --> 00:19:17.200
solids and with the

00:19:17.200 --> 00:19:21.349
anaerobic digester so a couple of things about our position

00:19:21.349 --> 00:19:23.279
summary you'll notice

00:19:23.279 --> 00:19:32.329
a change in the 17 18 budget from 87.25 to the proposed 89.

00:19:32.329 --> 00:19:34.559
5 and then in the 18

00:19:34.559 --> 00:19:39.509
19 budget we're actually not adding positions there we're

00:19:39.509 --> 00:19:40.160
simply moving

00:19:40.160 --> 00:19:43.240
positions from our field service technical group that were

00:19:43.240 --> 00:19:43.759
housed in

00:19:43.759 --> 00:19:48.029
water over into wastewater to have that be a complete

00:19:48.029 --> 00:19:49.519
wastewater crew

00:19:49.519 --> 00:19:52.970
essentially the the transfer from water to cover the cost

00:19:52.970 --> 00:19:54.200
of those positions

00:19:54.200 --> 00:19:59.210
will make this a budget neutral decision we did add a point

00:19:59.210 --> 00:20:02.079
to five FTE you'll

00:20:02.079 --> 00:20:05.079
notice that that difference there that was to take a three-

00:20:05.079 --> 00:20:05.759
quarter time

00:20:05.759 --> 00:20:11.430
position that we had to a full-time position so five-year

00:20:11.430 --> 00:20:12.880
plan again a lot of

00:20:12.880 --> 00:20:17.440
details here I wanted to again point out the idea of the

00:20:17.440 --> 00:20:19.319
group assignments that

00:20:19.319 --> 00:20:23.440
you'll see here basically that that will let you go through

00:20:23.440 --> 00:20:25.200
the full budget that

00:20:25.200 --> 00:20:27.609
you've been given to understand where each one of these

00:20:27.609 --> 00:20:29.160
individual assignment

00:20:29.160 --> 00:20:34.000
categories are being costed out in the CIP plan basically

00:20:34.000 --> 00:20:35.559
this gives our overall

00:20:35.559 --> 00:20:43.440
CIP plan as well as our revenue sources and the major

00:20:43.440 --> 00:20:44.599
projects that have

00:20:44.599 --> 00:20:47.150
outlined here are basically the Hickory Creek detention

00:20:47.150 --> 00:20:48.000
facility and lift

00:20:48.000 --> 00:20:51.190
station as we've already talked about we talked about the

00:20:51.190 --> 00:20:52.400
solids handling the

00:20:52.400 --> 00:20:57.039
West wet weather peak flow we've got a large number of

00:20:57.039 --> 00:20:58.519
interceptor projects

00:20:58.519 --> 00:21:01.950
that are that are coming up basically all four phases of

00:21:01.950 --> 00:21:02.799
the Hickory Creek

00:21:02.799 --> 00:21:06.869
interceptor are planned within this five-year CIP so this

00:21:06.869 --> 00:21:08.599
will basically

00:21:08.599 --> 00:21:15.039
start out at the at 377 and basically take that Hickory

00:21:15.039 --> 00:21:16.279
Creek interceptor line

00:21:16.279 --> 00:21:21.049
in a variety of different pipe sizes all the way to the 380

00:21:21.049 --> 00:21:22.960
crumb interceptor so

00:21:22.960 --> 00:21:29.190
quite a large series of changes basically just give you a

00:21:29.190 --> 00:21:30.279
sense of it

00:21:30.279 --> 00:21:35.980
interceptor one is a 1400 foot line replacement intercept

00:21:35.980 --> 00:21:37.720
interceptor two is

00:21:37.720 --> 00:21:43.950
eleven thousand two hundred feet interceptor three is

00:21:43.950 --> 00:21:50.450
eighty seven hundred and then interceptor four is ninety

00:21:50.450 --> 00:21:50.470
one hundred so quite a large number of big projects coming

00:21:50.470 --> 00:21:54.190
coming up provided you the CIP map similar to what we did

00:21:54.190 --> 00:21:58.049
with water this is color-coded by each of the individual C

00:21:58.049 --> 00:22:02.400
IP years so you can see exactly where that project has been

00:22:02.400 --> 00:22:05.299
planned where it's located in the city of what's the IP

00:22:05.299 --> 00:22:07.559
year it's it's assigned to

00:22:07.559 --> 00:22:12.660
so that's short and sweet on the wastewater presentation I

00:22:12.660 --> 00:22:13.680
'd be glad to

00:22:13.680 --> 00:22:16.960
answer any questions anyone has

00:22:18.559 --> 00:22:25.299
yes ma'am yes under the the wastewater five-year capital

00:22:25.299 --> 00:22:29.279
plan slide this one the

00:22:29.279 --> 00:22:35.559
one it's before the ad right before that the category

00:22:35.559 --> 00:22:36.799
number 24 the

00:22:36.799 --> 00:22:39.329
miscellaneous category I was wondering if you could just

00:22:39.329 --> 00:22:40.359
say a little something

00:22:40.359 --> 00:22:44.140
to us in the public about what what what kinds of

00:22:44.140 --> 00:22:46.400
assignments would fall under

00:22:46.400 --> 00:22:50.210
that miscellaneous category yes do you have a sense of what

00:22:50.210 --> 00:22:51.920
the major ones would

00:22:51.920 --> 00:22:58.369
be under miscellaneous the short answer is it's everything

00:22:58.369 --> 00:22:59.160
that's not in any of

00:22:59.160 --> 00:23:08.890
the other the first beginning there are two projects that

00:23:08.890 --> 00:23:12.000
are really tied to

00:23:12.000 --> 00:23:18.250
this Street Department projects so they were not assigned

00:23:18.250 --> 00:23:20.119
as a capacity upgrade

00:23:20.119 --> 00:23:25.279
so they put them in a miscellaneous project there and

00:23:25.279 --> 00:23:27.759
beyond that you know we

00:23:27.759 --> 00:23:30.759
have there are times when we have the field service has to

00:23:30.759 --> 00:23:32.880
go out and do some

00:23:32.880 --> 00:23:37.460
some work on a sewer line that is not part of the CIP so we

00:23:37.460 --> 00:23:38.920
put some money out

00:23:38.920 --> 00:23:48.289
there for that anything you'd like to share anything worth

00:23:48.289 --> 00:23:49.440
sharing about the

00:23:49.440 --> 00:23:52.559
the variance you know from year to year anything

00:23:52.559 --> 00:23:54.039
interesting about the reasons

00:23:54.039 --> 00:24:00.319
for the on the collection system the upgrade projects are

00:24:00.319 --> 00:24:01.000
the ones you know

00:24:01.000 --> 00:24:04.000
which are the large interceptor sewer projects that can you

00:24:04.000 --> 00:24:05.079
talk about oh sorry

00:24:05.079 --> 00:24:09.309
sorry I'm sorry I mean under the miscellaneous category

00:24:09.309 --> 00:24:10.240
from year to year

00:24:10.240 --> 00:24:16.279
so for 2019 the projected for under 30,000 and then 2020

00:24:16.279 --> 00:24:21.279
260 okay right here

00:24:21.279 --> 00:24:25.039
yeah all right yeah in this year right here you know that

00:24:25.039 --> 00:24:25.680
is where we have the

00:24:25.680 --> 00:24:30.569
street projects there that are tied to that beyond that it

00:24:30.569 --> 00:24:32.200
's pretty consistent

00:24:32.200 --> 00:24:36.670
as you can see right about $260,000 so it's a certain

00:24:36.670 --> 00:24:38.200
amount of money we put in

00:24:38.200 --> 00:24:41.799
there so if you have to do something that is not funded

00:24:41.799 --> 00:24:43.400
through the collection

00:24:43.400 --> 00:24:47.809
system upgrade or field service replace we can you know

00:24:47.809 --> 00:24:48.079
manage to do those projects

00:24:48.079 --> 00:24:53.440
thank you so you're so you're saying PS as you get a little

00:24:53.440 --> 00:24:54.359
further out it gets

00:24:54.359 --> 00:24:59.339
harder to predict I mean these we know we're gonna have

00:24:59.339 --> 00:25:00.559
street repairs all

00:25:00.559 --> 00:25:07.369
wrong but there may or may not be wastewater expenditures

00:25:07.369 --> 00:25:07.920
associated with

00:25:07.920 --> 00:25:11.599
those until we your time about the miscellaneous yeah and

00:25:11.599 --> 00:25:12.240
the miscellaneous

00:25:12.240 --> 00:25:14.990
yes in generally you know after first two or three years it

00:25:14.990 --> 00:25:15.880
's kind of hard to

00:25:15.880 --> 00:25:20.339
predict yeah what we have to do even that happens even with

00:25:20.339 --> 00:25:21.079
the major

00:25:21.079 --> 00:25:24.650
projects because we don't know capacity wise are we going

00:25:24.650 --> 00:25:26.680
to hit that where they

00:25:26.680 --> 00:25:31.609
we will need that project or not so it becomes a little

00:25:31.609 --> 00:25:40.759
more difficult okay any

00:25:40.759 --> 00:25:51.329
other questions I guess the the one question I had was kind

00:25:51.329 --> 00:25:51.920
of an overall

00:25:51.920 --> 00:25:57.519
goes back to Susan's comment about you know budgeting a

00:25:57.519 --> 00:26:03.079
loss and I'm all in

00:26:03.079 --> 00:26:07.130
favor of rate decreases whenever we can do it I just want

00:26:07.130 --> 00:26:08.240
to want to make sure

00:26:08.240 --> 00:26:12.680
that because you know we had a two point a two percent

00:26:12.680 --> 00:26:15.160
increase last year right

00:26:15.160 --> 00:26:20.690
and so or this year yes and so we're going that's a seven

00:26:20.690 --> 00:26:21.640
percent swing I

00:26:21.640 --> 00:26:25.029
guess if you will if we do a five percent this year and

00:26:25.029 --> 00:26:25.640
just to clarify

00:26:25.640 --> 00:26:29.420
your last last year we had a we had a zero rate increase we

00:26:29.420 --> 00:26:30.579
had projected a

00:26:30.579 --> 00:26:35.019
two percent okay that's okay yes okay and that's sort of

00:26:35.019 --> 00:26:35.519
the point of these

00:26:35.519 --> 00:26:38.339
budgets as we're looking out four and five years is you go

00:26:38.339 --> 00:26:39.240
back on an annual

00:26:39.240 --> 00:26:42.960
basis and you'll read you'll refine those estimates moving

00:26:42.960 --> 00:26:45.160
forward the

00:26:45.160 --> 00:26:47.950
strategy with wastewater is identical to that with water is

00:26:47.950 --> 00:26:48.799
we know we've got

00:26:48.799 --> 00:26:52.190
some significant capital projects coming down the road we

00:26:52.190 --> 00:26:53.440
're trying to manage the

00:26:53.440 --> 00:26:57.180
debt service line item is as much as we can so you'll

00:26:57.180 --> 00:26:58.440
notice in the five-year

00:26:58.440 --> 00:27:01.440
rate decrease the debt service falls off down to about five

00:27:01.440 --> 00:27:02.279
point three million

00:27:02.279 --> 00:27:06.240
dollars going as high as seven point three million in 2022

00:27:06.240 --> 00:27:07.000
that's really the

00:27:07.000 --> 00:27:09.759
number after we take a look at our policies the debt

00:27:09.759 --> 00:27:11.119
service coverage and

00:27:11.119 --> 00:27:14.299
and the and the reserves that we're most concerned about in

00:27:14.299 --> 00:27:15.440
both of those funds

00:27:15.440 --> 00:27:19.039
we know that in the next five years or so after out there

00:27:19.039 --> 00:27:20.440
that we've got major

00:27:20.440 --> 00:27:23.619
projects coming forward and we're trying to create as much

00:27:23.619 --> 00:27:25.680
capacity as we can so

00:27:25.680 --> 00:27:29.839
as to not have a situation in the mid 2020s where we get

00:27:29.839 --> 00:27:30.839
into a rate shock

00:27:30.839 --> 00:27:34.490
scenario because we're talking both those projects are

00:27:34.490 --> 00:27:34.880
going to be

00:27:34.880 --> 00:27:38.000
significant certain tens of millions of dollars so that's

00:27:38.000 --> 00:27:39.319
really what's driving

00:27:39.319 --> 00:27:43.259
us we'll go back in next year we're trying to we're trying

00:27:43.259 --> 00:27:43.880
to revenue fund

00:27:43.880 --> 00:27:47.519
as much capital as possible stay away from certificates of

00:27:47.519 --> 00:27:51.650
obligation and and then when we actually need those dollars

00:27:51.650 --> 00:27:52.440
to create the

00:27:52.440 --> 00:27:55.180
capacity in both water and wastewater treatment plants it's

00:27:55.180 --> 00:27:55.680
there and

00:27:55.680 --> 00:27:58.000
hopefully manage the rate increase that's going to be

00:27:58.000 --> 00:27:58.720
necessary at that

00:27:58.720 --> 00:28:03.160
time so the negative numbers don't bother us too much the

00:28:03.160 --> 00:28:04.200
the dollars are

00:28:04.200 --> 00:28:08.170
there to draw it down we're still having a fairly robust C

00:28:08.170 --> 00:28:09.640
IP and planning for

00:28:09.640 --> 00:28:12.220
for our next treatment plan expansion so we feel like we're

00:28:12.220 --> 00:28:13.160
in good this this

00:28:13.160 --> 00:28:17.599
fund in particular we're in really good shape yeah I know I

00:28:17.599 --> 00:28:18.920
guess the not too

00:28:18.920 --> 00:28:24.289
distant future we had we really had to step up the capital

00:28:24.289 --> 00:28:25.799
improvement program

00:28:25.799 --> 00:28:31.519
and wastewater because of the compliance with EPA

00:28:31.519 --> 00:28:34.480
requirements and right TCEQ and

00:28:34.480 --> 00:28:38.269
all that and so I just want to make sure we're not putting

00:28:38.269 --> 00:28:39.599
any of that at risk

00:28:39.599 --> 00:28:43.890
right well it is a self-correcting process every year we

00:28:43.890 --> 00:28:44.720
are looking at

00:28:44.720 --> 00:28:48.109
biggest miniatures on the on the water side we're looking

00:28:48.109 --> 00:28:49.200
at it's going to be

00:28:49.200 --> 00:28:52.839
close to with design and construction close to a hundred

00:28:52.839 --> 00:28:54.559
million dollars and

00:28:54.559 --> 00:28:57.559
on the wastewater side we're looking at about 78 million

00:28:57.559 --> 00:28:58.200
for the plant

00:28:58.200 --> 00:29:01.019
expansion that's that's planned I do think there's some

00:29:01.019 --> 00:29:02.160
capacity to push that

00:29:02.160 --> 00:29:05.660
out further on the wastewater side depending on how things

00:29:05.660 --> 00:29:06.519
go with solid

00:29:06.519 --> 00:29:10.750
solids handling and some of the things that we were doing

00:29:10.750 --> 00:29:11.799
with the PS of

00:29:11.799 --> 00:29:15.480
particulars do with his group and the in system storage

00:29:15.480 --> 00:29:17.000
capacity to be able to

00:29:17.000 --> 00:29:22.450
make the existing concrete plant last longer so it but

00:29:22.450 --> 00:29:24.799
those are two projects

00:29:24.799 --> 00:29:26.920
that are out there looming and we definitely have our eyes

00:29:26.920 --> 00:29:27.319
on them as

00:29:27.319 --> 00:29:30.720
we're going forward is that part of the collection

00:29:30.720 --> 00:29:32.079
collection capital

00:29:32.079 --> 00:29:34.640
improvements is it with that is a collection system or is

00:29:34.640 --> 00:29:35.980
that yes yes I

00:29:35.980 --> 00:29:41.640
mean it did the the the plant design and the and the actual

00:29:41.640 --> 00:29:42.960
construction of the

00:29:42.960 --> 00:29:46.369
plan is outside of this five-year IP but yes it would be in

00:29:46.369 --> 00:29:47.359
that in that category

00:29:47.359 --> 00:30:00.039
okay all right any other questions no

00:30:02.839 --> 00:30:06.559
okay talk real quick about the environmental services and

00:30:06.559 --> 00:30:07.359
sustainability

00:30:07.359 --> 00:30:11.000
department you have a question I was just gonna say I mean

00:30:11.000 --> 00:30:12.000
I support the five

00:30:12.000 --> 00:30:17.660
percent rate decrease it seems like a great idea for the

00:30:17.660 --> 00:30:20.960
ratepayers and and

00:30:20.960 --> 00:30:24.039
very sensibly planned for I'm not worried you know looking

00:30:24.039 --> 00:30:24.720
at how we're

00:30:24.720 --> 00:30:28.069
doing going forward so it seems like a great plan and thank

00:30:28.069 --> 00:30:35.839
you um I've been

00:30:35.839 --> 00:30:38.670
before the board and talked about environmental services

00:30:38.670 --> 00:30:38.880
and

00:30:38.880 --> 00:30:41.710
sustainability for the last several budget cycles it's a

00:30:41.710 --> 00:30:42.960
little bit of a of

00:30:42.960 --> 00:30:46.079
an odd division because it's kind of spread among the

00:30:46.079 --> 00:30:47.160
organization and so we

00:30:47.160 --> 00:30:51.240
thought we'd kind of just go through it in a fairly high

00:30:51.240 --> 00:30:53.200
pass level and kind of

00:30:53.200 --> 00:30:56.200
show you the major elements of it and then you can see the

00:30:56.200 --> 00:30:57.440
individual FTEs by

00:30:57.440 --> 00:31:01.049
functional area so now through some reorganizations we have

00:31:01.049 --> 00:31:01.680
landfill

00:31:01.680 --> 00:31:04.920
regulatory compliance as a as a component of environmental

00:31:04.920 --> 00:31:05.480
services

00:31:05.480 --> 00:31:08.069
generally speaking we that's the same approach that we've

00:31:08.069 --> 00:31:08.880
used on the water

00:31:08.880 --> 00:31:11.259
and wastewater side where environmental services handles

00:31:11.259 --> 00:31:13.039
the regulatory arm of

00:31:13.039 --> 00:31:16.960
the of the organization we've got the water laboratory

00:31:16.960 --> 00:31:18.119
wastewater laboratory

00:31:18.119 --> 00:31:20.670
industrial pretreatment and watershed protection that are

00:31:20.670 --> 00:31:22.220
all under either the

00:31:22.220 --> 00:31:25.670
water fund wastewater fund or the drainage fund watershed

00:31:25.670 --> 00:31:26.319
protection is

00:31:26.319 --> 00:31:29.589
also the group that does the stormwater compliance for the

00:31:29.589 --> 00:31:31.039
city and then we've

00:31:31.039 --> 00:31:36.019
got the sustainability department as well a couple of foot

00:31:36.019 --> 00:31:39.680
notes there the the

00:31:39.680 --> 00:31:43.130
FTEs by functional area are going to be a part as I've

00:31:43.130 --> 00:31:44.480
stated of the water

00:31:44.480 --> 00:31:48.920
wastewater solid waste fund FTE counts but there's a couple

00:31:48.920 --> 00:31:50.119
of other issues

00:31:50.119 --> 00:31:53.599
that I'd like to point out the reduction of the FTEs on the

00:31:53.599 --> 00:31:54.920
landfill regulatory

00:31:54.920 --> 00:31:58.359
compliance was due to the fact that we had basically

00:31:58.359 --> 00:32:00.000
cancelled the landfill

00:32:00.000 --> 00:32:02.519
mining operation and so there were two FTEs that were no

00:32:02.519 --> 00:32:03.559
longer needed there

00:32:03.559 --> 00:32:08.190
the sustainability increase of three FTEs was just simply a

00:32:08.190 --> 00:32:09.359
component of an

00:32:09.359 --> 00:32:12.549
environmental or an organization into the environmental

00:32:12.549 --> 00:32:14.039
services department so

00:32:14.039 --> 00:32:18.119
those positions do not represent new positions to the FTE

00:32:18.119 --> 00:32:19.400
new positions to

00:32:19.400 --> 00:32:22.759
the city rather they represent new positions just to

00:32:22.759 --> 00:32:25.920
environmental services

00:32:25.920 --> 00:32:29.630
basically this is the the arrangement of the reporting

00:32:29.630 --> 00:32:31.359
structure so there's two

00:32:31.359 --> 00:32:34.599
major arms one under the assistant director of

00:32:34.599 --> 00:32:35.920
environmental services Deborah

00:32:35.920 --> 00:32:39.470
Vieira that has the majority of the regulatory compliance

00:32:39.470 --> 00:32:41.440
the laboratory the

00:32:41.440 --> 00:32:44.599
pretreatment and watershed groups and then the

00:32:44.599 --> 00:32:46.640
sustainability side is under

00:32:46.640 --> 00:32:49.789
the management of Catherine Barnett and that includes keep

00:32:49.789 --> 00:32:51.000
it beautiful which is

00:32:51.000 --> 00:32:56.430
the main reason for the change the FTEs and sustainability

00:32:56.430 --> 00:32:57.960
and then also the

00:32:57.960 --> 00:33:03.759
sustainability recycling and marketing group so

00:33:03.759 --> 00:33:06.799
accomplishments for 1718 we

00:33:06.799 --> 00:33:10.210
achieved a three star certification star is a community

00:33:10.210 --> 00:33:10.920
rating for

00:33:10.920 --> 00:33:15.789
sustainability a three rating for a city our size is very

00:33:15.789 --> 00:33:18.119
very good so usually

00:33:18.119 --> 00:33:21.150
you don't see that except on larger cities so we're doing

00:33:21.150 --> 00:33:22.039
very well there

00:33:22.039 --> 00:33:26.170
completed review and final approval of sub chapter 17 of

00:33:26.170 --> 00:33:27.640
the development code

00:33:27.640 --> 00:33:32.460
regarding environmentally sensitive areas that was a very

00:33:32.460 --> 00:33:33.920
large project that

00:33:33.920 --> 00:33:38.359
Deborah Vieira oversaw and got through to completion we met

00:33:38.359 --> 00:33:39.279
or exceeded all our

00:33:39.279 --> 00:33:43.400
requirements to retain our designation of a high performing

00:33:43.400 --> 00:33:44.039
pretreatment

00:33:44.039 --> 00:33:47.589
program we've received a zero compliance history score

00:33:47.589 --> 00:33:48.920
which sounds really bad

00:33:48.920 --> 00:33:52.150
but that's actually really good I really would like to

00:33:52.150 --> 00:33:53.839
petition the TCQ to change

00:33:53.839 --> 00:33:56.690
that scoring because it sounds bad but zero zero means we

00:33:56.690 --> 00:33:57.559
didn't have any

00:33:57.559 --> 00:34:01.519
violations we implemented the energy star portfolio manager

00:34:01.519 --> 00:34:02.440
to track our

00:34:02.440 --> 00:34:06.529
municipal building energy use so we're doing that that's

00:34:06.529 --> 00:34:07.680
going to be an

00:34:07.680 --> 00:34:10.079
interesting project because it feeds in and gives us a

00:34:10.079 --> 00:34:11.320
little bit better data on

00:34:11.320 --> 00:34:15.260
our greenhouse gas inventory for the for the city as well

00:34:15.260 --> 00:34:16.679
as helping us track our

00:34:16.679 --> 00:34:19.510
energy usage and see where we might be able to implement

00:34:19.510 --> 00:34:20.679
some savings and then

00:34:20.679 --> 00:34:23.679
we coordinated with SECO the Texas State Energy

00:34:23.679 --> 00:34:26.920
Conservation Office to actually

00:34:26.920 --> 00:34:29.920
come here and help us conduct energy audits for 10 of our

00:34:29.920 --> 00:34:30.599
higher usage

00:34:30.599 --> 00:34:34.480
municipal buildings and we have a set of recommendations

00:34:34.480 --> 00:34:36.039
for for those some of our

00:34:36.039 --> 00:34:41.030
goals for 1819 is to revise our air quality action plan

00:34:41.030 --> 00:34:42.719
basically this plan

00:34:42.719 --> 00:34:49.880
is a component of our overall greenhouse gas emissions our

00:34:49.880 --> 00:34:51.079
idea there is to

00:34:51.079 --> 00:34:54.300
basically build that out further so it's not just dealing

00:34:54.300 --> 00:34:55.760
with greenhouse gas

00:34:55.760 --> 00:34:57.820
emissions we'll be working on that through the committee on

00:34:57.820 --> 00:34:58.480
the environment

00:34:58.480 --> 00:35:03.099
we do need to draft a stormwater ordinance for industrial

00:35:03.099 --> 00:35:04.239
sites and our

00:35:04.239 --> 00:35:08.300
utility inspections to basically address some of our new

00:35:08.300 --> 00:35:10.280
requirements for our MS4

00:35:10.280 --> 00:35:13.659
municipal separate storm sewer permit we now have

00:35:13.659 --> 00:35:15.679
responsibility underneath the

00:35:15.679 --> 00:35:19.679
new permit to actually inspect linear projects which are

00:35:19.679 --> 00:35:21.400
typically franchises

00:35:21.400 --> 00:35:24.829
like gas utilities and cable utilities in addition to the

00:35:24.829 --> 00:35:26.159
inspections that we

00:35:26.159 --> 00:35:28.480
have to do for all the active construction sites in the

00:35:28.480 --> 00:35:30.239
city so it's a

00:35:30.239 --> 00:35:33.690
it's becoming a larger and larger program as the

00:35:33.690 --> 00:35:35.559
regulations continue to

00:35:35.559 --> 00:35:40.000
to evolve we want to draft and approve technical criteria

00:35:40.000 --> 00:35:41.159
manuals for managing

00:35:41.159 --> 00:35:43.489
environmentally sensitive areas this is one of the things

00:35:43.489 --> 00:35:44.199
that we said we would

00:35:44.199 --> 00:35:47.079
do with the committee on the environment for sub chapters

00:35:47.079 --> 00:35:49.239
17 revisions complete

00:35:49.239 --> 00:35:52.039
our updates to the sustainability plan adopt and implement

00:35:52.039 --> 00:35:52.920
we've had several

00:35:52.920 --> 00:35:56.179
public meetings and public surveys on that so we're in

00:35:56.179 --> 00:35:57.480
process right now of

00:35:57.480 --> 00:36:02.250
working through that particular plan we're going to expand

00:36:02.250 --> 00:36:04.239
our sustainability

00:36:04.239 --> 00:36:09.219
education series to include some some youth programs we

00:36:09.219 --> 00:36:11.440
this one is one I had

00:36:11.440 --> 00:36:15.159
to look at my cliff notes on the roots and shoots program

00:36:15.159 --> 00:36:16.480
this is this is kind

00:36:16.480 --> 00:36:19.889
of an interesting one it's it's an outgrowth not pardon the

00:36:19.889 --> 00:36:21.239
pun of the of

00:36:21.239 --> 00:36:26.280
the sustainable schools program we've done a lot of work

00:36:26.280 --> 00:36:27.840
with community

00:36:27.840 --> 00:36:32.280
gardens and and school-based composting this one is

00:36:32.280 --> 00:36:33.679
basically community

00:36:33.679 --> 00:36:38.500
volunteerism school volunteerism and so it kind of gives

00:36:38.500 --> 00:36:39.900
the next level to

00:36:39.900 --> 00:36:44.340
incorporate some of our already existing recycling and

00:36:44.340 --> 00:36:47.360
community gardens and and

00:36:47.360 --> 00:36:50.610
programs along those lines so we've been working with the

00:36:50.610 --> 00:36:52.079
ISD to build that that

00:36:52.079 --> 00:36:56.519
program out it's actually a program that is from the Jane

00:36:56.519 --> 00:36:57.159
good all

00:36:57.159 --> 00:37:00.190
association so you may be familiar with it it's a it's a

00:37:00.190 --> 00:37:01.400
pretty neat what it

00:37:01.400 --> 00:37:06.079
looks like so we want to complete the gas well inspection

00:37:06.079 --> 00:37:08.400
contract haven't

00:37:08.400 --> 00:37:10.780
really gone over this too much with the public utility

00:37:10.780 --> 00:37:11.639
board the gas well

00:37:11.639 --> 00:37:15.940
inspections was also moved under the environmental services

00:37:15.940 --> 00:37:17.079
group so we have

00:37:17.079 --> 00:37:19.929
an outside contract right now that's performing a lot of

00:37:19.929 --> 00:37:20.920
those inspection

00:37:20.920 --> 00:37:23.429
services for us and we want to evaluate that program and

00:37:23.429 --> 00:37:24.519
make a recommendation

00:37:24.519 --> 00:37:27.119
to City Council that will be coming up here very shortly

00:37:27.119 --> 00:37:28.679
and then one of the

00:37:28.679 --> 00:37:31.000
things that we've continued to try to do is improve that

00:37:31.000 --> 00:37:31.920
public education for

00:37:31.920 --> 00:37:35.420
gas well inspections we've done a lot of revisions to the

00:37:35.420 --> 00:37:36.480
website a lot of

00:37:36.480 --> 00:37:39.480
additional information on our enhanced monitoring that you

00:37:39.480 --> 00:37:40.480
can access now on our

00:37:40.480 --> 00:37:44.610
mapping application on that website see any of that data

00:37:44.610 --> 00:37:46.199
for any well that you

00:37:46.199 --> 00:37:50.800
have an interest in so we have a lot of performance

00:37:50.800 --> 00:37:52.480
measures within the

00:37:52.480 --> 00:37:56.119
organization I won't bore you with going through all these

00:37:56.119 --> 00:37:57.519
except to say that

00:37:57.519 --> 00:38:01.760
we're generally on target our green sense rebating fund

00:38:01.760 --> 00:38:03.320
expenditure is still

00:38:03.320 --> 00:38:05.650
a little bit on the low side but we always make that up in

00:38:05.650 --> 00:38:06.039
the third

00:38:06.039 --> 00:38:09.280
quarter because almost all of the the requests for that and

00:38:09.280 --> 00:38:10.199
the request for

00:38:10.199 --> 00:38:15.969
audits come in during the summer months not too surprising

00:38:15.969 --> 00:38:17.239
so the illicit

00:38:17.239 --> 00:38:21.480
discharge reported per number resolved of course we want to

00:38:21.480 --> 00:38:22.639
to keep that at a

00:38:22.639 --> 00:38:26.760
at a hundred percent average turnaround time for results

00:38:26.760 --> 00:38:28.159
for residents with

00:38:28.159 --> 00:38:30.639
drinking water complaints we had a less than 24 hour we've

00:38:30.639 --> 00:38:31.559
actually shaved that

00:38:31.559 --> 00:38:36.289
down to 18 so that's typically you'll get a response back

00:38:36.289 --> 00:38:37.599
before the end of

00:38:37.599 --> 00:38:40.920
the next business day the number of effluent discharge

00:38:40.920 --> 00:38:41.639
violations that

00:38:41.639 --> 00:38:44.440
regulated industrial sites we always like to keep it zero

00:38:44.440 --> 00:38:45.840
we're running about

00:38:45.840 --> 00:38:48.840
about two per quarter now which is not a bad number but one

00:38:48.840 --> 00:38:49.840
we need to work on a

00:38:49.840 --> 00:38:53.400
little bit and the number of on-site sanitary sewer

00:38:53.400 --> 00:38:54.559
facilities part of the

00:38:54.559 --> 00:38:57.949
pretreatment program actually regulates on-site sanitary se

00:38:57.949 --> 00:38:59.679
wers so you wouldn't

00:38:59.679 --> 00:39:02.070
think that there would be a lot of those in the city of

00:39:02.070 --> 00:39:02.840
Denton but our

00:39:02.840 --> 00:39:05.849
annexations have really incorporated quite a few of those

00:39:05.849 --> 00:39:06.320
so we're we're

00:39:06.320 --> 00:39:11.039
sitting at about 750 on-site sanitary sewer facilities that

00:39:11.039 --> 00:39:11.679
we go by and

00:39:11.679 --> 00:39:15.099
inspect and regulate so we're at a hundred percent right

00:39:15.099 --> 00:39:15.760
now of our

00:39:15.760 --> 00:39:19.960
complaints abated per number received so a couple of cost

00:39:19.960 --> 00:39:21.480
containment strategies

00:39:21.480 --> 00:39:24.599
just real quick we reviewed our water sample collection and

00:39:24.599 --> 00:39:26.679
analysis we tend

00:39:26.679 --> 00:39:29.710
to do this every few years because redundancies have this

00:39:29.710 --> 00:39:30.559
nasty habit of

00:39:30.559 --> 00:39:33.300
creeping in and so we're able to shave some of those off

00:39:33.300 --> 00:39:34.000
and save about

00:39:34.000 --> 00:39:37.860
nineteen thousand dollars in cost savings without comprom

00:39:37.860 --> 00:39:38.920
ising any of our

00:39:38.920 --> 00:39:42.000
quality control or pollution prevention responsibilities

00:39:42.000 --> 00:39:43.119
and then we reduce those

00:39:43.119 --> 00:39:45.440
two FTEs that I mentioned earlier under the landfill

00:39:45.440 --> 00:39:46.760
regulatory compliance with

00:39:46.760 --> 00:39:52.340
landfill mining so completed projects we finished the 301

00:39:52.340 --> 00:39:53.159
East McKinney Street

00:39:53.159 --> 00:39:55.730
property remediation the property right across from us

00:39:55.730 --> 00:39:56.619
through the Texas

00:39:56.619 --> 00:40:00.219
Commission on Environmental Quality Voluntary Cleanup

00:40:00.219 --> 00:40:01.639
Program restructured

00:40:01.639 --> 00:40:04.659
the rates for private waste haulers to provide a little bit

00:40:04.659 --> 00:40:05.679
more equity there

00:40:05.679 --> 00:40:09.599
and bring us more in line with other municipalities we also

00:40:09.599 --> 00:40:10.400
increased

00:40:10.400 --> 00:40:13.619
opportunities for the smaller haulers there's a an

00:40:13.619 --> 00:40:15.199
adjustment that's been

00:40:15.199 --> 00:40:19.030
made that makes it that a little bit more a little bit

00:40:19.030 --> 00:40:20.800
easier to bear because

00:40:20.800 --> 00:40:24.670
they have a tendency to be obviously not a the larger more

00:40:24.670 --> 00:40:26.119
profitable businesses

00:40:26.119 --> 00:40:30.239
we consolidated the recycling education and outreach and

00:40:30.239 --> 00:40:31.039
keep it in beautiful

00:40:31.039 --> 00:40:35.130
under sustainability as I mentioned earlier we're currently

00:40:35.130 --> 00:40:36.760
renovating our

00:40:36.760 --> 00:40:40.139
renovated a building at the wastewater treatment plant into

00:40:40.139 --> 00:40:41.239
a field laboratory

00:40:41.239 --> 00:40:44.539
this really helps us improve our analytical efficiency and

00:40:44.539 --> 00:40:45.320
helps us keep

00:40:45.320 --> 00:40:51.010
the the high-end laboratory equipment from from the field

00:40:51.010 --> 00:40:52.699
equipment we

00:40:52.699 --> 00:40:55.530
installed a permanent odor control vapor system along the

00:40:55.530 --> 00:40:56.280
south and east

00:40:56.280 --> 00:40:59.130
perimeters of the landfill we were using portable units

00:40:59.130 --> 00:41:00.380
before you actually have

00:41:00.380 --> 00:41:03.840
an item tonight about about some of that odor control

00:41:03.840 --> 00:41:04.719
equipment that Ethan's

00:41:04.719 --> 00:41:09.199
going to bring forward future projects always looking to

00:41:09.199 --> 00:41:10.119
improve our mosquito

00:41:10.119 --> 00:41:13.119
surveillance and response plan that's also one that

00:41:13.119 --> 00:41:14.480
environmental services is

00:41:14.480 --> 00:41:18.500
responsible for continue to develop our laboratory

00:41:18.500 --> 00:41:20.360
information management system

00:41:20.360 --> 00:41:23.659
and really use that to produce information automated

00:41:23.659 --> 00:41:24.679
reports etc and

00:41:24.679 --> 00:41:28.369
then also streamline the transfer of information the TCQ is

00:41:28.369 --> 00:41:30.119
getting more and

00:41:30.119 --> 00:41:34.300
more up to speed on acceptance of digital reporting and so

00:41:34.300 --> 00:41:34.840
that's been a

00:41:34.840 --> 00:41:38.760
really nice system there's no lost in the mail lost in the

00:41:38.760 --> 00:41:40.119
building issues to

00:41:40.119 --> 00:41:44.889
deal with and then of course ensure the compliance with our

00:41:44.889 --> 00:41:45.920
new monitoring

00:41:45.920 --> 00:41:49.750
requirements under our landfill municipal solid waste

00:41:49.750 --> 00:41:51.840
permit so that's

00:41:51.840 --> 00:41:54.960
pretty much it for environmental services I'd be happy to

00:41:54.960 --> 00:41:55.400
answer any

00:41:55.400 --> 00:41:58.280
questions anyone has

00:42:00.119 --> 00:42:05.030
yes sir questions no I just oh okay I'm just gonna ask for

00:42:05.030 --> 00:42:06.079
questions from

00:42:06.079 --> 00:42:11.769
anybody no okay thank you thank Tony's gonna take the right

00:42:11.769 --> 00:42:13.400
image now

00:42:23.719 --> 00:42:25.010
well as I mentioned at the beginning of our presentation we

00:42:25.010 --> 00:42:27.159
've kind of

00:42:27.159 --> 00:42:31.119
separated this out to just bring a little more transparency

00:42:31.119 --> 00:42:31.480
to it

00:42:31.480 --> 00:42:36.369
Daniel Kramer is our new deputy director of operations he's

00:42:36.369 --> 00:42:37.360
sitting right over

00:42:37.360 --> 00:42:41.289
there and he'll be coming up when we get to the department

00:42:41.289 --> 00:42:42.519
al section to go

00:42:42.519 --> 00:42:45.750
through that particular section I'll cover the the

00:42:45.750 --> 00:42:47.480
financial section of this

00:42:47.480 --> 00:42:51.559
presentation if you recall back a few months ago we did

00:42:51.559 --> 00:42:54.079
come to to the board

00:42:54.079 --> 00:42:58.050
with a recommendation to utilize some dollars that we had

00:42:58.050 --> 00:42:59.559
in our CIP that had

00:42:59.559 --> 00:43:03.420
accumulated as a result some of these transfers and we use

00:43:03.420 --> 00:43:04.699
that to bridge the

00:43:04.699 --> 00:43:08.900
gap of some more 2014 bond program projects that were

00:43:08.900 --> 00:43:11.039
drainage related the

00:43:11.039 --> 00:43:15.480
council did approve the use of those funds back on the 8th

00:43:15.480 --> 00:43:16.360
of May and so

00:43:16.360 --> 00:43:19.670
those projects one of them being the Hinkle project with

00:43:19.670 --> 00:43:20.880
Magnolia drainage

00:43:20.880 --> 00:43:23.619
project which is a major project with project that was very

00:43:23.619 --> 00:43:24.360
important to the

00:43:24.360 --> 00:43:27.510
citizens as part of that program we'll be one of those

00:43:27.510 --> 00:43:29.320
projects about 1.7

00:43:29.320 --> 00:43:35.010
million will be coming from that drainage channel rehab

00:43:35.010 --> 00:43:36.239
fund to to bridge

00:43:36.239 --> 00:43:40.480
the gap on that and so anyways want to point out that for

00:43:40.480 --> 00:43:41.760
you so just a little

00:43:41.760 --> 00:43:45.719
bit of history here of the of the drainage believe it or

00:43:45.719 --> 00:43:46.639
not this predates

00:43:46.639 --> 00:43:52.070
me so I started with the city back in 99 so but anyways so

00:43:52.070 --> 00:43:54.119
this drainage program

00:43:54.119 --> 00:43:59.789
prior to 1999 was funded from the general fund it was

00:43:59.789 --> 00:44:01.320
subsequently moved

00:44:01.320 --> 00:44:06.269
from the general fund into the wastewater fund and it was a

00:44:06.269 --> 00:44:07.280
mixture of

00:44:07.280 --> 00:44:11.730
funding for for that function at that time about 70% of the

00:44:11.730 --> 00:44:12.880
funding came from

00:44:12.880 --> 00:44:17.039
water about the other the other 30% came from wastewater

00:44:17.039 --> 00:44:19.440
and then late in in 2000

00:44:19.440 --> 00:44:25.679
there was a recommendation to implement a drainage fee

00:44:25.679 --> 00:44:28.239
identified the the actual

00:44:28.239 --> 00:44:31.110
program what the cost would be that would be included in

00:44:31.110 --> 00:44:32.079
that and and also

00:44:32.079 --> 00:44:35.079
established the the the level of revenue that would be

00:44:35.079 --> 00:44:37.320
needed to fund those some

00:44:37.320 --> 00:44:40.440
of the operations that were included it was of course the

00:44:40.440 --> 00:44:41.559
drainage operation

00:44:41.559 --> 00:44:45.360
maintenance component the stormwater program street

00:44:45.360 --> 00:44:47.599
sweeping program and also

00:44:47.599 --> 00:44:53.869
to fund a limited capital program these are minor capital

00:44:53.869 --> 00:44:55.639
projects where where

00:44:55.639 --> 00:44:59.480
maybe debt is infeasible or economical and it's easier to

00:44:59.480 --> 00:45:00.400
just utilize a

00:45:00.400 --> 00:45:04.099
revenue funding those projects and we'll talk a little bit

00:45:04.099 --> 00:45:05.079
about some of those

00:45:05.079 --> 00:45:10.900
projects going forward for you so in January of 2002 the

00:45:10.900 --> 00:45:12.360
council did approve

00:45:12.360 --> 00:45:17.179
a drainage free a drainage fee in the city of Denton that

00:45:17.179 --> 00:45:18.800
eliminated the need

00:45:18.800 --> 00:45:23.670
to to fund that these functions from water and wastewater

00:45:23.670 --> 00:45:24.599
and that has

00:45:24.599 --> 00:45:30.480
continued to today I will I will tell the board I will say

00:45:30.480 --> 00:45:31.079
to the board that

00:45:31.079 --> 00:45:36.199
since 2002 those fees have not increased and we are

00:45:36.199 --> 00:45:37.000
currently making no

00:45:37.000 --> 00:45:43.289
recommendations on increasing or decreasing those fees some

00:45:43.289 --> 00:45:44.119
of the cost

00:45:44.119 --> 00:45:47.239
containment strategies again these are very similar to what

00:45:47.239 --> 00:45:48.119
you've seen with

00:45:48.119 --> 00:45:51.800
water and wastewater we continue to look at turnover we

00:45:51.800 --> 00:45:54.599
have had turnover in in

00:45:54.599 --> 00:45:57.090
that particular operation again is just part of the

00:45:57.090 --> 00:45:58.679
management of that operation

00:45:58.679 --> 00:46:03.400
we also do fund small capital improvement program projects

00:46:03.400 --> 00:46:04.119
this year

00:46:04.119 --> 00:46:08.110
as I mentioned we did fund some some projects that related

00:46:08.110 --> 00:46:09.960
to the 2014 bond

00:46:09.960 --> 00:46:14.639
program and it also utilizing mapping to reduce personnel

00:46:14.639 --> 00:46:16.400
time so some of the

00:46:16.400 --> 00:46:20.230
assumptions again that have gone into into this forecast no

00:46:20.230 --> 00:46:21.360
change in the

00:46:21.360 --> 00:46:24.920
current fee schedule again that's been in place since 2002

00:46:24.920 --> 00:46:25.559
and I'll recommend

00:46:25.559 --> 00:46:29.469
any changes the drainage fee is calculated based on a

00:46:29.469 --> 00:46:31.440
square footage of

00:46:31.440 --> 00:46:35.280
impervious surface and apologize that we had a misspell in

00:46:35.280 --> 00:46:36.480
there incorrect word

00:46:36.480 --> 00:46:40.039
but it's a surface drainage reserve as I mentioned earlier

00:46:40.039 --> 00:46:41.519
to you as part of the

00:46:41.519 --> 00:46:46.360
wastewater presentation we are showing it as a reserve in

00:46:46.360 --> 00:46:46.960
this particular

00:46:46.960 --> 00:46:50.920
function and then the drainage revenue for the drainage fee

00:46:50.920 --> 00:46:52.000
can only be used

00:46:52.000 --> 00:46:54.989
for drainage as I mentioned to you already the items that

00:46:54.989 --> 00:46:55.760
it could cover

00:46:55.760 --> 00:46:59.670
and there is no recommended changes for the use of that

00:46:59.670 --> 00:47:01.320
drainage fee revenue

00:47:01.320 --> 00:47:04.969
some of the risks and mitigations that we're doing of

00:47:04.969 --> 00:47:06.480
course we have aging

00:47:06.480 --> 00:47:11.000
infrastructure there are a number of channels and lines

00:47:11.000 --> 00:47:11.519
that need to be

00:47:11.519 --> 00:47:15.679
replaced and upgraded there's public safety concerns as

00:47:15.679 --> 00:47:17.400
well regarding some

00:47:17.400 --> 00:47:20.159
of the road crossings and pipes and relate to some of the

00:47:20.159 --> 00:47:21.280
smaller projects and

00:47:21.280 --> 00:47:25.110
contractor costs of course are always something for us to

00:47:25.110 --> 00:47:26.639
think about as as we

00:47:26.639 --> 00:47:31.730
look at these projects just quickly this particular

00:47:31.730 --> 00:47:33.400
function this particular cost

00:47:33.400 --> 00:47:38.019
center is a self balancing as you can see here the revenue

00:47:38.019 --> 00:47:39.000
that's generated

00:47:39.000 --> 00:47:43.889
either goes to pay for O&M any transfers that we may have

00:47:43.889 --> 00:47:45.159
for some of our

00:47:45.159 --> 00:47:50.329
internal service funds also to service the debt and in any

00:47:50.329 --> 00:47:51.840
any additional

00:47:51.840 --> 00:47:55.809
revenue goes into revenue funding of capital and it goes

00:47:55.809 --> 00:47:57.039
into our capital

00:47:57.039 --> 00:48:03.039
program again no rate increases no changes in the rates for

00:48:03.039 --> 00:48:03.840
that's being

00:48:03.840 --> 00:48:06.449
recommended at this time we do show the reserve of a

00:48:06.449 --> 00:48:08.800
million dollars here to my

00:48:08.800 --> 00:48:11.920
knowledge we've never used that particular reserve but it's

00:48:11.920 --> 00:48:12.559
something

00:48:12.559 --> 00:48:19.000
that we've maintained for just just in case so that is the

00:48:19.000 --> 00:48:20.079
the the forecast for

00:48:20.079 --> 00:48:25.030
you some of the budget highlights for 18 19 we're

00:48:25.030 --> 00:48:26.679
projecting about a four point

00:48:26.679 --> 00:48:30.760
seven million dollars of drainage fee revenue that will

00:48:30.760 --> 00:48:32.480
come into that to fund

00:48:32.480 --> 00:48:36.199
that operation we also have about three hundred thousand

00:48:36.199 --> 00:48:37.199
dollars of a transfer

00:48:37.199 --> 00:48:40.860
in that's to cover some of the cost of programs like

00:48:40.860 --> 00:48:42.719
mosquito abatement and

00:48:42.719 --> 00:48:45.929
some of these environmental services functions that dr.

00:48:45.929 --> 00:48:47.320
Banks just spoke with

00:48:47.320 --> 00:48:51.519
you about in a small amount related to auction proceeds

00:48:51.519 --> 00:48:53.440
that's when we sell

00:48:53.440 --> 00:48:57.170
surplus vehicles or vehicles that are no longer needed for

00:48:57.170 --> 00:48:58.280
the city and also

00:48:58.280 --> 00:49:03.969
miscellaneous equipment this gives you some of the budget

00:49:03.969 --> 00:49:06.679
highlights for for

00:49:06.679 --> 00:49:10.909
this function as I mentioned to you we do have turnover in

00:49:10.909 --> 00:49:12.239
this fund we have

00:49:12.239 --> 00:49:17.239
seen some turnover we've also moved previous costs that we

00:49:17.239 --> 00:49:18.639
had here for the

00:49:18.639 --> 00:49:21.639
street superintendent that is no longer overseeing this

00:49:21.639 --> 00:49:22.519
operation we've moved

00:49:22.519 --> 00:49:27.429
that those expenses out of there but again we also now have

00:49:27.429 --> 00:49:28.119
you know Daniel

00:49:28.119 --> 00:49:32.159
Kramer who's over that overseeing that area that his costs

00:49:32.159 --> 00:49:33.440
are embedded in this

00:49:33.440 --> 00:49:40.250
1.8 million so that's pretty much it again I mentioned to

00:49:40.250 --> 00:49:40.719
you this is a

00:49:40.719 --> 00:49:46.320
self-balancing operation function cost center for the city

00:49:46.320 --> 00:49:47.840
any money above and

00:49:47.840 --> 00:49:50.679
beyond those normal operating costs are transferred over

00:49:50.679 --> 00:49:51.519
into our capital

00:49:51.519 --> 00:49:57.119
project fund to fund smaller capital projects and Daniel go

00:49:57.119 --> 00:49:57.679
through a little

00:49:57.679 --> 00:50:00.420
bit and talk to you about some of those planned projects so

00:50:00.420 --> 00:50:01.599
unless you have any

00:50:01.599 --> 00:50:04.110
questions or if you have any questions if you don't I can

00:50:04.110 --> 00:50:04.840
turn it over to

00:50:04.840 --> 00:50:10.090
Daniel yes ma'am I have a question under the future process

00:50:10.090 --> 00:50:10.920
improvement but I'm

00:50:10.920 --> 00:50:13.659
not sure if this a question for you or yeah Daniel will

00:50:13.659 --> 00:50:14.599
come up here he'll go

00:50:14.599 --> 00:50:19.119
through that he'll be happy to okay thanks

00:50:24.159 --> 00:50:27.690
evening ladies and gentlemen my name is Daniel Kramer I'm

00:50:27.690 --> 00:50:28.920
the deputy director of

00:50:28.920 --> 00:50:32.070
operations for the streets and drainage department here for

00:50:32.070 --> 00:50:33.079
the city of Denton

00:50:33.079 --> 00:50:39.159
okay so drainage goals and the compliment accomplishments

00:50:39.159 --> 00:50:40.280
some of the

00:50:40.280 --> 00:50:43.480
ones we've been working on for this physical year have been

00:50:43.480 --> 00:50:44.440
the Canton

00:50:44.440 --> 00:50:50.349
Berry excuse me can't Mary court storm drains expenses you

00:50:50.349 --> 00:50:50.920
know year-to-date

00:50:50.920 --> 00:50:53.800
we're sitting about eighty six thousand out of the budget

00:50:53.800 --> 00:50:55.079
150 and that one's

00:50:55.079 --> 00:51:00.059
planned to be completed in June Kingswood expense the Kings

00:51:00.059 --> 00:51:01.760
wood court we

00:51:01.760 --> 00:51:06.710
also have expenses at about 31,000 and that one is complete

00:51:06.710 --> 00:51:07.079
out of a budget

00:51:07.079 --> 00:51:14.130
50,000 and for the Rockwood we also is in design and that

00:51:14.130 --> 00:51:15.440
is scheduled as long

00:51:15.440 --> 00:51:18.179
as everything holds together be done in September with

00:51:18.179 --> 00:51:20.960
about 20 close to 27,000

00:51:20.960 --> 00:51:25.650
out budgeted 350,000 for now for design some of the goals

00:51:25.650 --> 00:51:28.679
for 1819 will be the

00:51:28.679 --> 00:51:34.980
South Bell storm drains and that is in design for future

00:51:34.980 --> 00:51:35.679
starting at the first

00:51:35.679 --> 00:51:43.119
of 2019 and the Smith excuse me Smith storm drains and that

00:51:43.119 --> 00:51:43.800
is planned on

00:51:43.800 --> 00:51:48.239
being the in the fall have some we're waiting on atmosphere

00:51:48.239 --> 00:51:49.119
right now to move

00:51:49.119 --> 00:51:52.119
one of their gas lines for us for that one and the oak tree

00:51:52.119 --> 00:51:53.719
and Choctaw the

00:51:53.719 --> 00:51:57.150
jobs have not officially been set up but they're scheduled

00:51:57.150 --> 00:52:00.679
for the summer of 19

00:52:01.119 --> 00:52:07.000
some of the budget emphasis for drainage is to improve the

00:52:07.000 --> 00:52:09.159
storm drain system to

00:52:09.159 --> 00:52:12.440
prioritize the citizens from potential flooding risk

00:52:12.440 --> 00:52:13.760
maintain the storm drain

00:52:13.760 --> 00:52:16.880
system reducing amount of silt and debris going to the lake

00:52:16.880 --> 00:52:18.239
so clean out

00:52:18.239 --> 00:52:20.570
our channels maintain our channels making sure they all

00:52:20.570 --> 00:52:21.239
stay clean we get

00:52:21.239 --> 00:52:24.320
all that out there reduce the standing water to minimize

00:52:24.320 --> 00:52:25.320
the mosquito population

00:52:25.320 --> 00:52:29.760
in the area and also maintain regulatory compliance with

00:52:29.760 --> 00:52:31.280
the TCEQ municipal

00:52:31.280 --> 00:52:35.320
separate stormwater system MS4 permit for the watershed

00:52:35.320 --> 00:52:39.039
protection some of

00:52:39.039 --> 00:52:42.039
the process improvements we've completed mapping the storm

00:52:42.039 --> 00:52:43.679
water system from Pecan

00:52:43.679 --> 00:52:47.309
Creek the guys have been out working on that when the

00:52:47.309 --> 00:52:49.159
weather has been a little

00:52:49.159 --> 00:52:51.480
off whatever they'll go out and verify all of our drains

00:52:51.480 --> 00:52:52.199
all of our stuff make

00:52:52.199 --> 00:52:54.940
sure that we have all the information in there all the pipe

00:52:54.940 --> 00:52:56.000
sizes and all that

00:52:56.000 --> 00:52:59.809
improve inlet inspection processes utilizing mapping same

00:52:59.809 --> 00:53:00.880
with that to

00:53:00.880 --> 00:53:03.199
verify that'll help us be able to create our work orders

00:53:03.199 --> 00:53:03.840
and keep all of our

00:53:03.840 --> 00:53:06.320
system digitalized so we know where everything is and what

00:53:06.320 --> 00:53:06.800
all of our

00:53:06.800 --> 00:53:09.119
systems are and what state they're in at all times and

00:53:09.119 --> 00:53:10.880
customer response tracking

00:53:10.880 --> 00:53:13.960
working on that if we have any issues or anything coming up

00:53:13.960 --> 00:53:15.199
from our customers we

00:53:15.199 --> 00:53:17.679
can get out there we can take a look at it document it all

00:53:17.679 --> 00:53:18.559
so that we have that

00:53:18.559 --> 00:53:23.429
there for us future process improvements is keep going

00:53:23.429 --> 00:53:25.199
forward on the mapping for

00:53:25.199 --> 00:53:29.130
the Cooper Creek and Hickory Creek to continue that process

00:53:29.130 --> 00:53:30.239
and utilize the

00:53:30.239 --> 00:53:35.230
mapping system to track stormwater assist inspections and

00:53:35.230 --> 00:53:36.719
analyze need for

00:53:36.719 --> 00:53:40.050
adding additional street sweeper for the future growth and

00:53:40.050 --> 00:53:40.960
then update the

00:53:40.960 --> 00:53:43.789
drainage CIP plan for current needs and future replacement

00:53:43.789 --> 00:53:44.239
of aging

00:53:44.239 --> 00:53:51.070
infrastructures for our position summary as Tony mentioned

00:53:51.070 --> 00:53:53.960
earlier in the 2017

00:53:53.960 --> 00:53:56.760
2018 budget the reduction in the head was our street

00:53:56.760 --> 00:53:58.059
superintendent which was

00:53:58.059 --> 00:54:00.889
brought out of drainage and he's no longer over that and

00:54:00.889 --> 00:54:02.400
then for the

00:54:02.400 --> 00:54:08.329
addition of our one one FTE in the 18 and 19 is for the

00:54:08.329 --> 00:54:10.119
watershed stormwater

00:54:10.119 --> 00:54:19.760
protection super for the intern for that one so currently

00:54:19.760 --> 00:54:21.639
for our five-year

00:54:21.639 --> 00:54:25.619
capital plan our main ones that we're sitting at are the

00:54:25.619 --> 00:54:28.079
Choctaw drainage

00:54:28.079 --> 00:54:33.269
which the drainage project was not on the original list but

00:54:33.269 --> 00:54:34.800
it was triggered

00:54:34.800 --> 00:54:37.539
from some neighborhood associations recent out to the

00:54:37.539 --> 00:54:40.559
council the primos

00:54:40.559 --> 00:54:43.800
promos development designed the discharge from their

00:54:43.800 --> 00:54:45.039
detention pond onto

00:54:45.039 --> 00:54:47.849
the street and caused a lot of water flowing through the

00:54:47.849 --> 00:54:49.880
neighborhood so with

00:54:49.880 --> 00:54:52.230
the text that also improved highway 380 to create

00:54:52.230 --> 00:54:53.440
additional flow through the

00:54:53.440 --> 00:54:56.579
creek this neighborhood does not have an underground water

00:54:56.579 --> 00:54:57.880
system and Creek

00:54:57.880 --> 00:55:00.880
crossings are undersized so that's where that one comes

00:55:00.880 --> 00:55:02.639
into play we also had the

00:55:02.639 --> 00:55:06.630
the oak tree drainage system which has been on the list and

00:55:06.630 --> 00:55:07.800
was originally

00:55:07.800 --> 00:55:12.239
listed as white Creek drainage improvements the storm drain

00:55:12.239 --> 00:55:12.480
pipe

00:55:12.480 --> 00:55:16.440
beginning at Audrey Lane is a metal pipe that is failing

00:55:16.440 --> 00:55:17.239
the neighborhood does

00:55:17.239 --> 00:55:21.369
not have an underground system from the intersection of P

00:55:21.369 --> 00:55:22.960
aisley to Malky up to

00:55:22.960 --> 00:55:26.280
Oak Creek there's been numerous complaints over the years

00:55:26.280 --> 00:55:26.860
mostly in the

00:55:26.860 --> 00:55:30.489
summer and June storms so engineering has has done the

00:55:30.489 --> 00:55:32.000
preliminary analysis

00:55:32.000 --> 00:55:36.570
and costs for this project King's detention pond and out

00:55:36.570 --> 00:55:37.840
fall project

00:55:37.840 --> 00:55:40.960
analysis has also been determined for the structure is

00:55:40.960 --> 00:55:42.159
needed to help reduce

00:55:42.159 --> 00:55:45.690
the flow discharge from the pond to maximize the efficiency

00:55:45.690 --> 00:55:47.159
and also the main

00:55:47.159 --> 00:55:52.309
pecan which is main pecan project is starting preliminary

00:55:52.309 --> 00:55:53.480
design of the

00:55:53.480 --> 00:55:56.340
channel from downstream of sycamore Street which was built

00:55:56.340 --> 00:55:57.079
to the hundred

00:55:57.079 --> 00:56:00.800
year storm system up to frame Street this will this project

00:56:00.800 --> 00:56:01.880
is going to help

00:56:01.880 --> 00:56:05.030
determine the future funding to relieve the downtown

00:56:05.030 --> 00:56:06.599
flooding along Hickory

00:56:06.599 --> 00:56:16.760
McKenney Bell so some of the some of the 2014 bond funder

00:56:16.760 --> 00:56:17.960
projects that we've had

00:56:17.960 --> 00:56:21.349
which is only about ten point nine million dollars have

00:56:21.349 --> 00:56:22.340
been the Eagle

00:56:22.340 --> 00:56:26.360
Drive improvements Magnolia Street the peck for drainage H

00:56:26.360 --> 00:56:27.440
ickory Street

00:56:27.440 --> 00:56:30.440
drainage Oak Street and South Bell drainage most of those

00:56:30.440 --> 00:56:31.079
are still in in

00:56:31.079 --> 00:56:34.760
progress is also here's a map it's kind of a little hard to

00:56:34.760 --> 00:56:35.480
see up on the

00:56:35.480 --> 00:56:39.179
screen but we got some of the areas that we had from the

00:56:39.179 --> 00:56:40.239
bond funding projects

00:56:40.239 --> 00:56:48.289
for those and some of the future projects that we need to

00:56:48.289 --> 00:56:48.880
look at in

00:56:48.880 --> 00:56:51.489
the future on the next section which is unfunded we didn't

00:56:51.489 --> 00:56:52.519
have on the last bond

00:56:52.519 --> 00:56:54.840
but we got another twenty six point nine million of

00:56:54.840 --> 00:56:56.079
projects to help get the whole

00:56:56.079 --> 00:56:58.400
city out of the hundred year flood plan that we'll be

00:56:58.400 --> 00:56:59.480
looking at coming up in

00:56:59.480 --> 00:57:01.409
the future for the next bond election that we're going

00:57:01.409 --> 00:57:03.280
through so I just want

00:57:03.280 --> 00:57:05.599
to throw some of that out you know the Cooper Creek

00:57:05.599 --> 00:57:07.039
improvements for Mingo Road

00:57:07.039 --> 00:57:10.239
Sherman Drive peck for drainage three and four and also pe

00:57:10.239 --> 00:57:11.880
can Creek and those

00:57:11.880 --> 00:57:16.960
are some of the locations for those areas up there okay

00:57:16.960 --> 00:57:20.360
are any questions

00:57:22.480 --> 00:57:27.179
yeah the 2014 projects that you just listed are those all

00:57:27.179 --> 00:57:29.000
complete no sir not

00:57:29.000 --> 00:57:31.320
all of them we are still working on some of those are in

00:57:31.320 --> 00:57:32.639
process for those can you

00:57:32.639 --> 00:57:36.070
tell us a little bit about their completion and I do not

00:57:36.070 --> 00:57:37.800
have those all

00:57:37.800 --> 00:57:40.059
those numbers in front of me at the moment I can't get back

00:57:40.059 --> 00:57:40.559
to you on that

00:57:40.559 --> 00:57:46.110
sir I can tell you that Magnolia's in the process progress

00:57:46.110 --> 00:57:47.559
right now I'll combine

00:57:47.559 --> 00:57:51.610
that with the Hinkle Road projects that would be started I

00:57:51.610 --> 00:57:52.440
'm hoping this fall

00:57:52.440 --> 00:57:56.880
and I believe peck for council just amended the budget for

00:57:56.880 --> 00:57:58.159
that but what the

00:57:58.159 --> 00:58:02.039
peck for is it's the the major trunk line downtown

00:58:02.039 --> 00:58:03.639
basically we've got we had

00:58:03.639 --> 00:58:07.550
enough money to get to from the east to get to Elm Street

00:58:07.550 --> 00:58:09.119
so that is under will

00:58:09.119 --> 00:58:13.110
be under construction this year we just put a put together

00:58:13.110 --> 00:58:14.199
a engineering

00:58:14.199 --> 00:58:21.079
contract to take that major project from Elm to Carroll and

00:58:21.079 --> 00:58:23.639
to get it designed so

00:58:23.639 --> 00:58:26.380
it's ready for the next bond package so ran out of funding

00:58:26.380 --> 00:58:27.159
in order to build

00:58:27.159 --> 00:58:31.239
that however we'll get the design on this on the books and

00:58:31.239 --> 00:58:31.880
if we've got a way

00:58:31.880 --> 00:58:34.260
to we can find it before funded before the next bond

00:58:34.260 --> 00:58:35.480
package you will otherwise

00:58:35.480 --> 00:58:39.179
it'll be one of the very first things that we recommend the

00:58:39.179 --> 00:58:40.360
other ones are all

00:58:40.360 --> 00:58:44.449
either in Southville also was under construction so several

00:58:44.449 --> 00:58:45.360
of those are in

00:58:45.360 --> 00:58:48.809
the works right now and we just actually evil I can tell

00:58:48.809 --> 00:58:50.239
you we just had a a

00:58:50.239 --> 00:58:55.010
couple of easement swaps orchestrated by a City Council in

00:58:55.010 --> 00:58:56.360
order to make that

00:58:56.360 --> 00:58:59.119
project move forward as well so almost all of those are

00:58:59.119 --> 00:59:00.719
either in design under

00:59:00.719 --> 00:59:03.480
construction will be completed the next year or two okay

00:59:03.480 --> 00:59:04.400
okay

00:59:04.400 --> 00:59:08.360
I have one more question yes sir you mentioned the mapping

00:59:08.360 --> 00:59:10.639
of the assets that

00:59:10.639 --> 00:59:13.760
you had there were some accomplishments there and then

00:59:13.760 --> 00:59:15.079
future efforts would be

00:59:15.079 --> 00:59:19.329
to continue mapping do you have a any kind of percentage

00:59:19.329 --> 00:59:20.559
estimate about how

00:59:20.559 --> 00:59:23.590
many of the assets you have mapped or how many are left un

00:59:23.590 --> 00:59:24.480
mapped or anything

00:59:24.480 --> 00:59:27.599
like that well what we have we've mapped the whole pecan

00:59:27.599 --> 00:59:28.800
Creek I don't have the

00:59:28.800 --> 00:59:31.130
exact number of percentage versus the whole city versus

00:59:31.130 --> 00:59:31.920
what we have and have

00:59:31.920 --> 00:59:34.630
not done with me I can't get back to you on that but we're

00:59:34.630 --> 00:59:35.320
doing it as in

00:59:35.320 --> 00:59:39.570
sections so we can get a full complete section one at a

00:59:39.570 --> 00:59:41.400
time okay thank you

00:59:41.400 --> 00:59:50.170
sir I have a question that's as much for us here on pub is

00:59:50.170 --> 00:59:51.099
for anyone from the

00:59:51.099 --> 00:59:55.130
public watching and that is you mentioned that that a

00:59:55.130 --> 00:59:56.519
number of the

00:59:56.519 --> 01:00:00.239
drainage project were initiated by neighborhood

01:00:00.239 --> 01:00:02.320
associations or residents

01:00:02.320 --> 01:00:04.420
or businesses in the area coming forward and you know

01:00:04.420 --> 01:00:05.480
calling these issues to

01:00:05.480 --> 01:00:09.679
your attention is there you know if there's anybody

01:00:09.679 --> 01:00:12.719
listening who who has a

01:00:12.719 --> 01:00:16.730
drainage concern in their area what would you say is the

01:00:16.730 --> 01:00:17.840
best way to see

01:00:17.840 --> 01:00:21.030
that that's addressed by the city to go through council and

01:00:21.030 --> 01:00:22.159
for them to directly

01:00:22.159 --> 01:00:25.280
contact their council people to directly contact the

01:00:25.280 --> 01:00:26.199
department some

01:00:26.199 --> 01:00:29.530
combination of both deformant neighborhood association

01:00:29.530 --> 01:00:30.199
going as an

01:00:30.199 --> 01:00:34.489
individual etc just based on you know what you've seen and

01:00:34.489 --> 01:00:35.079
which which

01:00:35.079 --> 01:00:38.079
squeaky wheels have you know most quickly gotten it gotten

01:00:38.079 --> 01:00:38.860
the grease and

01:00:38.860 --> 01:00:42.360
gotten the attention what we normally do is our calls will

01:00:42.360 --> 01:00:43.679
come in to our our

01:00:43.679 --> 01:00:46.480
drainage manager Clark Olson doll he does get a lot of the

01:00:46.480 --> 01:00:47.079
calls for any

01:00:47.079 --> 01:00:49.929
kind of issues or anything that we have going on he will

01:00:49.929 --> 01:00:51.519
document all those and

01:00:51.519 --> 01:00:54.389
put them in a file and we'll look at the the cost analysis

01:00:54.389 --> 01:00:55.400
based on what it is

01:00:55.400 --> 01:00:57.690
and you know where it's at if we have funding for it if it

01:00:57.690 --> 01:00:58.519
's something that we

01:00:58.519 --> 01:01:00.849
can easily take care of or if we have to go out and put it

01:01:00.849 --> 01:01:01.760
on an actual bigger

01:01:01.760 --> 01:01:05.280
project for bonds or you know we'll do that basic analysis

01:01:05.280 --> 01:01:06.199
you know that's

01:01:06.199 --> 01:01:08.940
probably one of the best ways that we can get a hold of it

01:01:08.940 --> 01:01:09.719
that way is just

01:01:09.719 --> 01:01:12.539
call through the department you know or it can go through

01:01:12.539 --> 01:01:13.519
council members and it

01:01:13.519 --> 01:01:16.139
will trickle down through the through the ranks and we will

01:01:16.139 --> 01:01:16.880
get a hold of that

01:01:16.880 --> 01:01:21.480
and go through there okay thank you thank you I had a

01:01:21.480 --> 01:01:23.079
second question go

01:01:23.079 --> 01:01:26.710
ahead then my second question is a more specific question

01:01:26.710 --> 01:01:27.480
about I'm under the

01:01:27.480 --> 01:01:31.489
future process improvement one of the items was to analyze

01:01:31.489 --> 01:01:32.920
the need for adding

01:01:32.920 --> 01:01:36.639
additional streets street sweeper due to anticipated growth

01:01:36.639 --> 01:01:38.000
yes and I was just

01:01:38.000 --> 01:01:42.440
wondering you know if you have any projection for that in

01:01:42.440 --> 01:01:43.360
terms of the

01:01:43.360 --> 01:01:49.289
likelihood that that that will be needed and the timeline

01:01:49.289 --> 01:01:51.639
for the the process of

01:01:51.639 --> 01:01:57.400
analyzing that need right okay um currently we are we are

01:01:57.400 --> 01:01:58.039
looking into it

01:01:58.039 --> 01:02:01.030
there's a lot of new subdivisions that are being built in

01:02:01.030 --> 01:02:01.920
in the system and

01:02:01.920 --> 01:02:05.780
they do not turn over to us normally till they're building

01:02:05.780 --> 01:02:06.840
out the final phase

01:02:06.840 --> 01:02:09.989
and towards the end because as that time goes on as

01:02:09.989 --> 01:02:11.880
construction still going on

01:02:11.880 --> 01:02:14.670
there's still a lot of construction debris that gets all up

01:02:14.670 --> 01:02:15.480
in the machines

01:02:15.480 --> 01:02:18.239
and we get all the drainage and runoff and everything from

01:02:18.239 --> 01:02:18.960
the construction

01:02:18.960 --> 01:02:22.719
sites so those usually come in on the last phase so I don't

01:02:22.719 --> 01:02:24.239
have those numbers

01:02:24.239 --> 01:02:26.090
for you right now but we are looking at all the roads that

01:02:26.090 --> 01:02:26.840
are coming in and it

01:02:26.840 --> 01:02:31.280
kind of bears into is you know us as you know the council

01:02:31.280 --> 01:02:33.039
and staff how often we

01:02:33.039 --> 01:02:37.099
want these streets swept you know what's the you know do we

01:02:37.099 --> 01:02:38.119
want them once a month

01:02:38.119 --> 01:02:40.050
do we want them twice a month three times a month you know

01:02:40.050 --> 01:02:40.760
how often we want

01:02:40.760 --> 01:02:46.469
right now we run to two street sweepers and they run five

01:02:46.469 --> 01:02:48.000
days a week I think

01:02:48.000 --> 01:02:51.960
four or five days a week constantly on that to do all the

01:02:51.960 --> 01:02:52.599
street sweeping that

01:02:52.599 --> 01:02:56.199
we have right now we can still get more capacity out of

01:02:56.199 --> 01:02:57.440
them it just means some

01:02:57.440 --> 01:03:00.150
that we will not hit as often as we normally do so I will

01:03:00.150 --> 01:03:01.239
have to get those

01:03:01.239 --> 01:03:03.789
numbers for you can tell you how many streets that we will

01:03:03.789 --> 01:03:04.599
be having come up

01:03:04.599 --> 01:03:07.179
and how many we hit on a regular basis and what kind of

01:03:07.179 --> 01:03:08.280
numbers we can look at

01:03:08.280 --> 01:03:12.389
for that I know that you know that to determine the cost if

01:03:12.389 --> 01:03:13.280
it's decided that

01:03:13.280 --> 01:03:16.079
another street sweeper is necessary you'd have to do an RFP

01:03:16.079 --> 01:03:16.880
but what just

01:03:16.880 --> 01:03:23.179
roughly you know would you estimate is the cost of it the

01:03:23.179 --> 01:03:24.920
range of it cost for

01:03:24.920 --> 01:03:28.889
those numbers I can't tell you an exact number right now I

01:03:28.889 --> 01:03:29.960
prefer not to say

01:03:29.960 --> 01:03:33.380
being this is a new environment I don't want to throw out

01:03:33.380 --> 01:03:35.719
that number I will get

01:03:35.719 --> 01:03:38.960
that information thank you this is this is a fun part of

01:03:38.960 --> 01:03:39.480
the reason that we

01:03:39.480 --> 01:03:42.280
didn't recommend any changes to the fund balances it

01:03:42.280 --> 01:03:43.119
probably hasn't been as

01:03:43.119 --> 01:03:46.119
managed as aggressively as we would like the past and so a

01:03:46.119 --> 01:03:47.000
lot of questions

01:03:47.000 --> 01:03:50.769
you're asking they're asking and we're putting together

01:03:50.769 --> 01:03:52.440
specific plans in terms

01:03:52.440 --> 01:03:55.559
of ways which should be the service level in the community

01:03:55.559 --> 01:03:56.599
you know do we

01:03:56.599 --> 01:04:02.590
have a strong management plan maintenance plan we're

01:04:02.590 --> 01:04:03.559
viewing this is

01:04:03.559 --> 01:04:06.070
just an area where the crews historically there's even

01:04:06.070 --> 01:04:06.559
turnover

01:04:06.559 --> 01:04:10.090
they've gotten moved over to other things and it's probably

01:04:10.090 --> 01:04:10.880
not it's not

01:04:10.880 --> 01:04:13.619
not as much of a specific plan in there as we would like to

01:04:13.619 --> 01:04:14.599
see so that's really

01:04:14.599 --> 01:04:16.929
their charge over the next year is to get all those

01:04:16.929 --> 01:04:17.880
questions and answer it

01:04:17.880 --> 01:04:21.329
in a plan a better plan in place me it seems like this is

01:04:21.329 --> 01:04:22.480
really headed in the

01:04:22.480 --> 01:04:26.920
right direction big it's a big project to tackle it's city

01:04:26.920 --> 01:04:28.239
wide but it looks

01:04:28.239 --> 01:04:33.059
really good this place this may seem absurd but I'm gonna

01:04:33.059 --> 01:04:35.239
say it anyway when

01:04:35.239 --> 01:04:38.940
you're evaluating your streets street sweeper the future

01:04:38.940 --> 01:04:39.920
purchase if you've

01:04:39.920 --> 01:04:43.309
decided to make a future purpose purchase you might look at

01:04:43.309 --> 01:04:43.880
one that can

01:04:43.880 --> 01:04:47.610
get close enough to cul-de-sacs because they don't really

01:04:47.610 --> 01:04:49.000
actually make it

01:04:49.000 --> 01:04:51.329
through the cul-de-sac and that debris ends up staying

01:04:51.329 --> 01:04:52.360
there because they can't

01:04:52.360 --> 01:04:56.440
get close enough to the curved road and then the other

01:04:56.440 --> 01:04:58.079
thing you might do is

01:04:58.079 --> 01:05:01.539
publish when you're gonna be on somebody's street so they

01:05:01.539 --> 01:05:02.239
could like move

01:05:02.239 --> 01:05:05.500
their car so that all the leaves would get street swept

01:05:05.500 --> 01:05:06.599
instead of him just

01:05:06.599 --> 01:05:09.380
going around them and then they just leave the leaves there

01:05:09.380 --> 01:05:10.000
sorry I just

01:05:10.000 --> 01:05:13.710
streets we want to get the debris off because it plugs up

01:05:13.710 --> 01:05:14.320
everything else so it's

01:05:14.320 --> 01:05:17.579
not to keep the street clean it's to keep the stormwater

01:05:17.579 --> 01:05:18.880
system clean it's a

01:05:18.880 --> 01:05:22.889
very visual service so yes you see the street sweeper

01:05:22.889 --> 01:05:24.960
coming I have one

01:05:24.960 --> 01:05:30.110
question on this may be a Tony question but on the five-

01:05:30.110 --> 01:05:32.179
year forecast drainage

01:05:32.179 --> 01:05:37.289
forecast we're showing in 2023 and obviously the debt

01:05:37.289 --> 01:05:38.159
service is going down

01:05:38.159 --> 01:05:44.389
every year but it's zero in 2023 but we just we're just not

01:05:44.389 --> 01:05:47.760
doing the 2014 CIP

01:05:47.760 --> 01:05:51.820
projects and those are bond funded so is that are we saying

01:05:51.820 --> 01:05:52.840
that that debt

01:05:52.840 --> 01:05:55.650
service associated with that is going away or is that being

01:05:55.650 --> 01:05:56.440
paid somewhere

01:05:56.440 --> 01:06:01.099
else the debt service that's associated you know with with

01:06:01.099 --> 01:06:02.599
this payment here

01:06:02.599 --> 01:06:07.159
we're CEOs and some Geos that were issued some time ago so

01:06:07.159 --> 01:06:08.320
so they're in

01:06:08.320 --> 01:06:11.829
the 2014 bond program that is all paid out of the general

01:06:11.829 --> 01:06:13.199
debt service fund and

01:06:13.199 --> 01:06:18.639
and the tax rate currently we left that at zero one of the

01:06:18.639 --> 01:06:19.079
things that we did

01:06:19.079 --> 01:06:23.059
talk with the council briefly about when we discussed the

01:06:23.059 --> 01:06:24.239
use of the channel

01:06:24.239 --> 01:06:28.369
rehab money is the possibility of issuing some limited debt

01:06:28.369 --> 01:06:29.360
in the future

01:06:29.360 --> 01:06:34.079
but I think that goes with better evaluating this operation

01:06:34.079 --> 01:06:34.800
making sure

01:06:34.800 --> 01:06:36.800
that we understand what all the needs are out there

01:06:36.800 --> 01:06:39.039
certainly if there's an

01:06:39.039 --> 01:06:42.199
opportunity to revenue fund something we would obviously

01:06:42.199 --> 01:06:43.199
would prefer that

01:06:43.199 --> 01:06:46.659
especially for some of these smaller projects right but but

01:06:46.659 --> 01:06:48.039
again it's

01:06:48.039 --> 01:06:51.619
currently there are no plans to issue an additional debt

01:06:51.619 --> 01:06:53.679
and so we just left that

01:06:53.679 --> 01:06:58.880
at zero for now okay so it's these are larger projects that

01:06:58.880 --> 01:06:59.679
really fall under a

01:06:59.679 --> 01:07:04.239
general obligation traditionally that's been traditionally

01:07:04.239 --> 01:07:05.199
that's been that's

01:07:05.199 --> 01:07:08.480
been the case simply because of the magnitude of those

01:07:08.480 --> 01:07:09.880
projects from a from

01:07:09.880 --> 01:07:15.389
a dollar perspective all right very good well mr. chairman

01:07:15.389 --> 01:07:16.280
and members of the

01:07:16.280 --> 01:07:19.530
board that that concludes our our presentation for for the

01:07:19.530 --> 01:07:21.000
wastewater fund

01:07:21.000 --> 01:07:25.710
that includes drainage as I mentioned what what we are

01:07:25.710 --> 01:07:27.440
seeking from you is

01:07:27.440 --> 01:07:31.659
direction you know our recommendation again is is a five

01:07:31.659 --> 01:07:33.519
percent decrease in

01:07:33.519 --> 01:07:37.440
rates with no increases in the future at least planned

01:07:37.440 --> 01:07:39.079
currently addition to that

01:07:39.079 --> 01:07:44.900
we are recommending no changes to the drainage fee the the

01:07:44.900 --> 01:07:45.880
next steps for us

01:07:45.880 --> 01:07:50.320
would be to come back to the board sometime in July to have

01:07:50.320 --> 01:07:51.280
you formally

01:07:51.280 --> 01:07:56.000
approve this budget and also the corresponding rate ordin

01:07:56.000 --> 01:07:57.039
ances that will

01:07:57.039 --> 01:08:02.440
detail out what the actual rate impacts would be of this

01:08:02.440 --> 01:08:03.519
this forecast or this

01:08:03.519 --> 01:08:06.289
this budget so if you have any questions I'll be happy to

01:08:06.289 --> 01:08:07.719
entertain any questions

01:08:07.719 --> 01:08:12.800
you may have questions I didn't have a question I have more

01:08:12.800 --> 01:08:13.480
of a comment of

01:08:13.480 --> 01:08:19.079
when we were gonna get back to five or two so yeah we know

01:08:19.079 --> 01:08:20.760
that that says five

01:08:20.760 --> 01:08:25.579
I'm still nervous about five versus two percent but I I

01:08:25.579 --> 01:08:27.199
trust you've run the

01:08:27.199 --> 01:08:30.640
numbers and like you said you're gonna come back next year

01:08:30.640 --> 01:08:31.640
I hope it doesn't

01:08:31.640 --> 01:08:35.729
swing five percent the next time I don't think it will so I

01:08:35.729 --> 01:08:37.840
don't think we keep

01:08:37.840 --> 01:08:41.859
our customers money any longer than we should so I'll

01:08:41.859 --> 01:08:43.880
support the five percent

01:08:43.880 --> 01:08:47.279
other comments

01:08:51.720 --> 01:08:53.619
I think I said before I'm all for any kind of any kind of

01:08:53.619 --> 01:08:55.880
rate reduction we

01:08:55.880 --> 01:08:58.619
could do and if we could do five percent still maintain the

01:08:58.619 --> 01:08:59.600
integrity of the

01:08:59.600 --> 01:09:06.930
wastewater system where we're we're not any anything we've

01:09:06.930 --> 01:09:10.319
done from a compliance

01:09:10.600 --> 01:09:14.289
accomplishment over the last few years you I don't want to

01:09:14.289 --> 01:09:15.359
interrupt the

01:09:15.359 --> 01:09:20.229
program and you've already told me we weren't so so as long

01:09:20.229 --> 01:09:24.920
as that's is that I

01:09:24.920 --> 01:09:30.819
you know again I think it's a it's a healthy fun we made

01:09:30.819 --> 01:09:32.319
some arrangements to

01:09:32.319 --> 01:09:38.550
take some of the operating expense out of wastewater and so

01:09:38.550 --> 01:09:40.399
that that puts our

01:09:40.399 --> 01:09:44.840
puts our reserves at a better really a high level I think

01:09:44.840 --> 01:09:46.399
based upon what it

01:09:46.399 --> 01:09:51.729
looks like going forward and we're freeing up room for debt

01:09:51.729 --> 01:09:52.560
service if we

01:09:52.560 --> 01:09:56.500
need to do something in the future important same very

01:09:56.500 --> 01:09:57.079
similar to what we

01:09:57.079 --> 01:10:03.310
get on the on the water side yes ma'am right okay all right

01:10:03.310 --> 01:10:06.520
thank you Tony and

01:10:06.520 --> 01:10:16.319
Daniel and Daniel and Daniel thank you okay next item we

01:10:16.319 --> 01:10:16.920
have in the work

01:10:16.920 --> 01:10:20.569
session is to receive a report hold a discussion and give

01:10:20.569 --> 01:10:21.760
staff direction

01:10:21.760 --> 01:10:25.939
regarding the Denton municipal electric fiscal year 2018-19

01:10:25.939 --> 01:10:27.000
operating budget

01:10:27.000 --> 01:10:32.170
capital improvement program and renewable resource plan so

01:10:32.170 --> 01:10:33.720
mr. chairman

01:10:33.720 --> 01:10:37.600
members of the board again Tony pointed director finance

01:10:37.600 --> 01:10:39.039
again very similar

01:10:39.039 --> 01:10:47.569
presentation but quite a bit more slides we we we do have

01:10:47.569 --> 01:10:48.520
George Morrow our

01:10:48.520 --> 01:10:51.750
general manager will be is here and we'll be walking

01:10:51.750 --> 01:10:53.000
through a number of

01:10:53.000 --> 01:10:56.880
sections of this slide he and I did have to arm wrestle a

01:10:56.880 --> 01:10:57.760
little bit for you know

01:10:57.760 --> 01:11:01.189
for all the good slides I told him next year will be

01:11:01.189 --> 01:11:04.039
different but we also have

01:11:04.039 --> 01:11:08.720
some consultants here from ERC that are also gonna assist

01:11:08.720 --> 01:11:10.159
us in walking through

01:11:10.159 --> 01:11:13.920
the deck performer as well we've asked him to come in and

01:11:13.920 --> 01:11:16.399
and evaluate that to

01:11:16.399 --> 01:11:19.890
provide at least a second pair of eyes not just for for the

01:11:19.890 --> 01:11:21.039
board but also the

01:11:21.039 --> 01:11:27.060
council and certainly our citizens so just really quickly

01:11:27.060 --> 01:11:29.119
want to you may have

01:11:29.119 --> 01:11:31.710
a lot of questions on some of these items so I wanted to

01:11:31.710 --> 01:11:32.600
let you know just

01:11:32.600 --> 01:11:34.869
right here on slide one that they're coming up right and so

01:11:34.869 --> 01:11:35.479
I just want to

01:11:35.479 --> 01:11:38.100
give you kind of the order certainly if we need to get out

01:11:38.100 --> 01:11:39.039
of order I will be

01:11:39.039 --> 01:11:42.800
happy to do that I will be going through the load forecasts

01:11:42.800 --> 01:11:45.479
for this fund also

01:11:45.479 --> 01:11:49.439
with our financial assumptions we did have some requests

01:11:49.439 --> 01:11:51.119
regarding commercial

01:11:51.119 --> 01:11:53.859
and residential rates and how those compare and George will

01:11:53.859 --> 01:11:54.560
come up here and

01:11:54.560 --> 01:11:58.760
and talk through that there's also some some

01:11:58.760 --> 01:11:59.640
recommendations that we're gonna

01:11:59.640 --> 01:12:04.220
be making to the board to the council regarding the ECA and

01:12:04.220 --> 01:12:05.640
and also the

01:12:05.640 --> 01:12:09.359
related to that is the the TCRF the transmission cost

01:12:09.359 --> 01:12:10.960
recovery factor that

01:12:10.960 --> 01:12:14.409
we'll be discussing with you again we'll go through the

01:12:14.409 --> 01:12:16.760
financial forecast talk a

01:12:16.760 --> 01:12:20.630
little bit about about the debt for this fund where the

01:12:20.630 --> 01:12:22.880
fund was as of 930 17 and

01:12:22.880 --> 01:12:27.829
where we anticipate it would be at the end of 19 930 19

01:12:27.829 --> 01:12:28.560
based on the

01:12:28.560 --> 01:12:32.529
recommendations that we're making to you today George will

01:12:32.529 --> 01:12:33.720
then come back up here

01:12:33.720 --> 01:12:37.109
talk to you a little bit about purchase power some of the

01:12:37.109 --> 01:12:38.359
changes in that that

01:12:38.359 --> 01:12:42.340
are frankly driving some of this forecast we'll talk to you

01:12:42.340 --> 01:12:43.119
as well about

01:12:43.119 --> 01:12:47.680
the the deck performer that's the debt energy center and

01:12:47.680 --> 01:12:49.039
then finally George

01:12:49.039 --> 01:12:52.329
will go through the departmental presentation section

01:12:52.329 --> 01:12:53.199
including the

01:12:53.199 --> 01:12:58.060
capital improvement program so just very quickly here for

01:12:58.060 --> 01:13:00.359
you again our customers

01:13:00.359 --> 01:13:06.600
by class we see about a 2% increase in our in our customers

01:13:06.600 --> 01:13:07.039
there's been

01:13:07.039 --> 01:13:10.640
certainly some spikes that have been slowed down a little

01:13:10.640 --> 01:13:11.840
bit because of the

01:13:11.840 --> 01:13:14.850
recession and some of the slows down in the housing market

01:13:14.850 --> 01:13:15.920
as that continues to

01:13:15.920 --> 01:13:20.720
to increase we're likely to see continued increases in our

01:13:20.720 --> 01:13:23.520
customer base

01:13:23.520 --> 01:13:32.659
just quickly we are projecting 361 megawatt peak for 2019 I

01:13:32.659 --> 01:13:33.279
think you're

01:13:33.279 --> 01:13:35.630
familiar with some of the some of the articles and some of

01:13:35.630 --> 01:13:36.359
the news stories

01:13:36.359 --> 01:13:38.970
about what's anticipated for the summer this year so we are

01:13:38.970 --> 01:13:39.840
ramping up and

01:13:39.840 --> 01:13:45.500
anticipating some heavy usage of electricity this this

01:13:45.500 --> 01:13:47.760
coming year some

01:13:47.760 --> 01:13:50.130
of the financial assumptions and and again we'll go through

01:13:50.130 --> 01:13:50.640
some of the

01:13:50.640 --> 01:13:55.159
details we part of part of this this forecast that does

01:13:55.159 --> 01:13:57.239
include the payoff of

01:13:57.239 --> 01:14:03.470
28.6 million dollars of what's called the scrubber debt it

01:14:03.470 --> 01:14:04.079
was debt that we

01:14:04.079 --> 01:14:10.020
issued back in 2010 that's related to the TMPA facility if

01:14:10.020 --> 01:14:12.159
approved by both

01:14:12.159 --> 01:14:15.649
the board and the council we would come back sometime in

01:14:15.649 --> 01:14:17.880
February to call that

01:14:17.880 --> 01:14:21.289
debt provide notice to to investors so that they're aware

01:14:21.289 --> 01:14:22.319
that we'll be calling

01:14:22.319 --> 01:14:31.100
that debt and then cash fund that in in the first part of

01:14:31.100 --> 01:14:33.039
2019 we will send that

01:14:33.039 --> 01:14:36.659
cash payment to to our paying agent who then will disperse

01:14:36.659 --> 01:14:37.640
that out to the

01:14:37.640 --> 01:14:40.659
investors and then that debt will will be paid off we are

01:14:40.659 --> 01:14:41.760
recommending no

01:14:41.760 --> 01:14:47.430
changes to the base rates for for this fund there is a

01:14:47.430 --> 01:14:49.479
suspension of the TCRF

01:14:49.479 --> 01:14:53.350
that is driving what our customers will see as far as their

01:14:53.350 --> 01:14:54.600
rates and a decrease

01:14:54.600 --> 01:14:59.529
the ECA will be maintained at the current level and again

01:14:59.529 --> 01:15:00.560
that is the

01:15:00.560 --> 01:15:05.569
level that we reduced last year if you recall and the so we

01:15:05.569 --> 01:15:07.279
are recommending

01:15:07.279 --> 01:15:10.670
to maintain that particular level of the ECA there is an

01:15:10.670 --> 01:15:12.479
update to these ECA

01:15:12.479 --> 01:15:19.979
ordinance that will include the net expenses of the deck as

01:15:19.979 --> 01:15:21.279
part of the

01:15:21.279 --> 01:15:23.890
purchase power portfolio for the city and George will come

01:15:23.890 --> 01:15:24.680
up here and talk a

01:15:24.680 --> 01:15:29.560
little bit about that as well as ERC reduced purchase power

01:15:29.560 --> 01:15:30.800
cost we're seeing

01:15:30.800 --> 01:15:33.920
that as a result of some of our more recent contracts for

01:15:33.920 --> 01:15:34.840
solar and wind

01:15:34.840 --> 01:15:39.819
energy and so those are reflective here and then one of the

01:15:39.819 --> 01:15:41.000
major items is a

01:15:41.000 --> 01:15:47.039
reduction in the overall CIP program for for the Electric

01:15:47.039 --> 01:15:48.880
Department we'll talk

01:15:48.880 --> 01:15:52.050
to you in conjunction tonight there'll be a consideration

01:15:52.050 --> 01:15:53.239
for a budget amendment

01:15:53.239 --> 01:15:57.880
seeking authority to draw down 34 million dollars to fund a

01:15:57.880 --> 01:15:58.600
34 million

01:15:58.600 --> 01:16:02.800
dollar capital improvement program in in the current year

01:16:02.800 --> 01:16:05.479
that includes also 10

01:16:05.479 --> 01:16:08.880
million dollars of excess revenue bonds to the system

01:16:08.880 --> 01:16:11.479
revenue bonds from the deck

01:16:11.479 --> 01:16:15.050
facility that have that we do not anticipate using those

01:16:15.050 --> 01:16:15.880
for the deck

01:16:15.880 --> 01:16:19.949
facility that we're planning to use use for other electric

01:16:19.949 --> 01:16:21.560
system improvements

01:16:21.560 --> 01:16:25.720
that's part of your budget amendment for your consideration

01:16:25.720 --> 01:16:26.640
later tonight and

01:16:26.640 --> 01:16:32.359
part of this forecast that is a reduction of a plan 54

01:16:32.359 --> 01:16:33.960
million dollar CEO

01:16:33.960 --> 01:16:38.399
issuance that was originally planned for for this fund

01:16:38.399 --> 01:16:39.880
again now we plan to

01:16:39.880 --> 01:16:43.319
utilize 34 million dollars George will talk a little bit

01:16:43.319 --> 01:16:44.199
about that when he

01:16:44.199 --> 01:16:48.399
comes up here and then to debt fund portion of the

01:16:48.399 --> 01:16:51.399
transmission system going

01:16:51.399 --> 01:16:56.949
forward but to continue to draw down rate stabilization to

01:16:56.949 --> 01:16:57.880
cash fund the

01:16:57.880 --> 01:17:03.319
remainder of the CIP and so there'll be a huge decrease in

01:17:03.319 --> 01:17:05.039
the planned debt

01:17:05.039 --> 01:17:09.149
issuances for this fund compared to what we presented to

01:17:09.149 --> 01:17:13.159
you last year so how are

01:17:13.159 --> 01:17:18.819
we able to do this so for 2018-19 what's included is a

01:17:18.819 --> 01:17:20.340
decrease of about 33

01:17:20.340 --> 01:17:24.779
million dollars in in purchase power costs some of those

01:17:24.779 --> 01:17:26.640
are attributable to

01:17:26.640 --> 01:17:32.399
a a projected net income to the deck facility about 20

01:17:32.399 --> 01:17:34.640
million dollars part

01:17:34.640 --> 01:17:37.119
of it is related to the fact that we are still currently

01:17:37.119 --> 01:17:38.239
not paying debt on that

01:17:38.239 --> 01:17:40.760
facility George again I'll walk through that

01:17:40.760 --> 01:17:47.500
performer with you and also a reduced TMPA related expenses

01:17:47.500 --> 01:17:48.600
about 22 million

01:17:48.600 --> 01:17:53.579
dollars we have a reduced CIP program that carries forward

01:17:53.579 --> 01:17:55.000
not just in 18-19

01:17:55.000 --> 01:18:01.439
but the five years of this program but for 2018-19 we are

01:18:01.439 --> 01:18:02.760
projecting a decrease

01:18:02.760 --> 01:18:07.649
from 45 million dollars to about 23 million dollars in that

01:18:07.649 --> 01:18:09.680
program and then

01:18:09.680 --> 01:18:12.920
finally as I mentioned just a few minutes ago we part of

01:18:12.920 --> 01:18:14.199
the recommendation

01:18:14.199 --> 01:18:21.029
is to fund cash fund 24 million dollars in in currency IP

01:18:21.029 --> 01:18:24.560
we've not included any

01:18:24.560 --> 01:18:27.560
of this and the CEO issuance at the council will consider

01:18:27.560 --> 01:18:29.359
tomorrow but we

01:18:29.359 --> 01:18:32.779
also recommend utilizing about 10 million dollars that we

01:18:32.779 --> 01:18:33.600
're currently

01:18:33.600 --> 01:18:39.199
projecting in savings from the deck operation we issued

01:18:39.199 --> 01:18:40.399
those utility system

01:18:40.399 --> 01:18:44.229
revenue bonds that are eligible and not just for the deck

01:18:44.229 --> 01:18:45.800
operation but for any

01:18:45.800 --> 01:18:50.590
other utility system electric system projects as we're

01:18:50.590 --> 01:18:51.920
planning the

01:18:51.920 --> 01:18:57.060
recommendations to shift those to fund the normal CIP for

01:18:57.060 --> 01:18:59.920
this fund some of the

01:18:59.920 --> 01:19:04.659
future emphasis is you know continued management of the

01:19:04.659 --> 01:19:05.159
transmission

01:19:05.159 --> 01:19:08.689
distribution system expansion program we'll talk to you a

01:19:08.689 --> 01:19:09.920
little bit further

01:19:09.920 --> 01:19:15.430
about that O&M of the deck energy center is certainly

01:19:15.430 --> 01:19:15.920
something that will

01:19:15.920 --> 01:19:19.310
continue to evaluate we are staffing up to run that

01:19:19.310 --> 01:19:21.920
facility update the energy

01:19:21.920 --> 01:19:27.430
risk management policy that's phase two of that process

01:19:27.430 --> 01:19:29.439
also to bid and acquire

01:19:29.439 --> 01:19:34.079
modern a modern energy trading and risk management system

01:19:34.079 --> 01:19:38.000
this ETRM and then the

01:19:38.000 --> 01:19:41.409
next item is the acquisition of new renewable energy

01:19:41.409 --> 01:19:42.800
products to meet the

01:19:42.800 --> 01:19:49.069
100% renewable goal that you're very familiar with continue

01:19:49.069 --> 01:19:50.399
to to monitor and

01:19:50.399 --> 01:19:54.989
enhance the reliability of our system including circuit swe

01:19:54.989 --> 01:19:56.600
eps that's done by

01:19:56.600 --> 01:20:01.039
our DME distribution crews and then to manage the overall

01:20:01.039 --> 01:20:01.960
power supply

01:20:01.960 --> 01:20:08.789
portfolio you know under constraints of course by ERCOT so

01:20:08.789 --> 01:20:11.399
what you have up here

01:20:11.399 --> 01:20:15.550
is what the impact would be of what we're proposing in this

01:20:15.550 --> 01:20:17.279
forecast the DME

01:20:17.279 --> 01:20:21.840
currently for a residential customer for that utilizes

01:20:21.840 --> 01:20:23.399
about twenty twelve hundred

01:20:23.399 --> 01:20:31.069
kilowatt hours pays about $129.26 under this recommendation

01:20:31.069 --> 01:20:31.720
that

01:20:31.720 --> 01:20:40.039
would decrease to $124.24 a month about 3.5% decrease in

01:20:40.039 --> 01:20:41.159
your backup we did not

01:20:41.159 --> 01:20:44.760
include the city of Georgetown we did have a request to

01:20:44.760 --> 01:20:45.880
include that so that's

01:20:45.880 --> 01:20:49.800
here now and certainly city of Georgetown is to the right

01:20:49.800 --> 01:20:50.439
even of our

01:20:50.439 --> 01:20:57.170
current rates certainly going forward yes ma'am so that

01:20:57.170 --> 01:20:58.520
there's no anticipated

01:20:58.520 --> 01:21:04.189
base rate increase but what about can you say speak to the

01:21:04.189 --> 01:21:05.720
any anticipated

01:21:05.720 --> 01:21:09.600
changes in cost of service adjustment I realize that you

01:21:09.600 --> 01:21:10.920
that that can't be

01:21:10.920 --> 01:21:17.699
predicted that far out so so that is part of our one of our

01:21:17.699 --> 01:21:18.359
other slides and

01:21:18.359 --> 01:21:23.119
George will talk about that there will be an update to that

01:21:23.119 --> 01:21:26.119
so this gives you

01:21:26.119 --> 01:21:32.359
you know this was this was as of May 3rd where DME

01:21:32.359 --> 01:21:34.960
currently is is this this

01:21:34.960 --> 01:21:39.850
green line just want to note that but you know about 26

01:21:39.850 --> 01:21:41.439
entities five of those

01:21:41.439 --> 01:21:45.640
being cities certainly fall to the right of where our

01:21:45.640 --> 01:21:47.640
current rates are certainly

01:21:47.640 --> 01:21:51.289
if we move forward with the with the with the current

01:21:51.289 --> 01:21:52.920
recommendation that

01:21:52.920 --> 01:21:56.159
would add on about another seven that would be to the right

01:21:56.159 --> 01:21:56.960
of this and that's

01:21:56.960 --> 01:22:03.770
based on the current rates that are published out there yes

01:22:03.770 --> 01:22:06.760
ma'am does that

01:22:06.760 --> 01:22:12.579
include commercial and residential rates is that lumping

01:22:12.579 --> 01:22:13.960
those together this is

01:22:13.960 --> 01:22:17.680
just residential yes correct but there but there would also

01:22:17.680 --> 01:22:18.479
be an impact on

01:22:18.479 --> 01:22:21.220
non-commercial rates yes ma'am so I asked George to come up

01:22:21.220 --> 01:22:21.680
here and kind of

01:22:21.680 --> 01:22:28.119
walk you through kind of the next few slides Tony thank you

01:22:28.119 --> 01:22:29.479
good evening

01:22:29.479 --> 01:22:32.270
George moral general manager of DME I just want to make a

01:22:32.270 --> 01:22:33.319
few comments about

01:22:33.319 --> 01:22:36.750
the cost of service and the rate design we're not making

01:22:36.750 --> 01:22:38.359
any recommendations at

01:22:38.359 --> 01:22:41.939
this point to change anything on the rate design once you

01:22:41.939 --> 01:22:43.279
change some things

01:22:43.279 --> 01:22:46.279
on the rate design then what you run into is some folks

01:22:46.279 --> 01:22:47.399
that do very well I

01:22:47.399 --> 01:22:50.020
call them winners and then you'll have some losers it will

01:22:50.020 --> 01:22:50.960
have a zero sum

01:22:50.960 --> 01:22:54.170
revenue requirement but when you would start playing and

01:22:54.170 --> 01:22:55.159
moving the rates

01:22:55.159 --> 01:22:57.600
around then we're gonna have some folks that will be

01:22:57.600 --> 01:22:58.439
impacted pretty

01:22:58.439 --> 01:23:02.239
significantly I looked at the 2013 cost of service study

01:23:02.239 --> 01:23:05.800
and we have a draft or

01:23:05.800 --> 01:23:09.649
early stage 2018 cost of service study and what I found is

01:23:09.649 --> 01:23:10.680
what I mentioned in

01:23:10.680 --> 01:23:13.800
that second bullet is that the residential customers are

01:23:13.800 --> 01:23:14.479
paying less

01:23:14.479 --> 01:23:17.300
than what you would call their full cost of service their

01:23:17.300 --> 01:23:18.199
mathematically

01:23:18.199 --> 01:23:21.319
calculated cost of service be honest with you that's no

01:23:21.319 --> 01:23:21.880
different than any

01:23:21.880 --> 01:23:25.270
other place I've been I've been with quite a few municipal

01:23:25.270 --> 01:23:26.239
utilities and

01:23:26.239 --> 01:23:30.029
especially municipal utilities that tends to be we we tend

01:23:30.029 --> 01:23:30.680
to be sympathetic

01:23:30.680 --> 01:23:34.510
to the residential customers and and they tend to get

01:23:34.510 --> 01:23:36.039
favored in the in the

01:23:36.039 --> 01:23:39.449
rate design process and of course if they're getting

01:23:39.449 --> 01:23:40.199
favored that means the

01:23:40.199 --> 01:23:42.760
commercial are paying probably a little bit more than the

01:23:42.760 --> 01:23:44.199
cost of service so both

01:23:44.199 --> 01:23:47.590
of those studies it seems that gap has closed a little bit

01:23:47.590 --> 01:23:48.680
and how you do that

01:23:48.680 --> 01:23:52.189
cost of service is you're looking at the contributions of

01:23:52.189 --> 01:23:53.039
the of the customer

01:23:53.039 --> 01:23:55.779
profiles when they use their electricity how they use it

01:23:55.779 --> 01:23:57.399
and the costs that we

01:23:57.399 --> 01:24:03.060
incur during those different time periods and the and and

01:24:03.060 --> 01:24:04.079
and trying to do

01:24:04.079 --> 01:24:06.670
an analysis of what what's a fair share for the residential

01:24:06.670 --> 01:24:07.399
customers and

01:24:07.399 --> 01:24:11.119
commercial so that's what I had to offer today in this

01:24:11.119 --> 01:24:13.239
particular slide we do

01:24:13.239 --> 01:24:17.680
have a in the wintertime we do have this declining block

01:24:17.680 --> 01:24:19.420
rate once you use so

01:24:19.420 --> 01:24:23.000
much in the wintertime you'll get a break that in part is

01:24:23.000 --> 01:24:24.359
to recognize that

01:24:24.359 --> 01:24:27.579
we have some residential customers that do use electric

01:24:27.579 --> 01:24:29.319
heat and they can be

01:24:29.319 --> 01:24:32.989
significantly impacted in the wintertime without that kind

01:24:32.989 --> 01:24:34.600
of a cost break and so

01:24:34.600 --> 01:24:37.600
when we did a survey of an about a dozen utilities out

01:24:37.600 --> 01:24:38.840
there we found it broke

01:24:38.840 --> 01:24:42.479
every which way maybe a third had a rate design similar to

01:24:42.479 --> 01:24:43.439
us where they

01:24:43.439 --> 01:24:46.560
differentiated winter summer and gave a declining block

01:24:46.560 --> 01:24:48.760
discount which is what we

01:24:48.760 --> 01:24:52.069
give to residential customers others had a flat rate you

01:24:52.069 --> 01:24:53.199
know probably goes back

01:24:53.199 --> 01:24:55.529
to what they've been doing for a long time they just

01:24:55.529 --> 01:24:56.359
decided to go that way

01:24:56.359 --> 01:25:00.119
and some have the increasing block rate so as you use more

01:25:00.119 --> 01:25:01.720
electricity your price

01:25:01.720 --> 01:25:09.199
goes up so there's actually no perfect way to do it but our

01:25:09.199 --> 01:25:10.159
customers I think at

01:25:10.159 --> 01:25:12.640
this point are what I'm saying that they're used to our

01:25:12.640 --> 01:25:13.560
rate design and if

01:25:13.560 --> 01:25:18.640
we move it let's say we were to move the residential rates

01:25:18.640 --> 01:25:19.680
up you know that

01:25:19.680 --> 01:25:22.920
would have a significant impact on some parts of that class

01:25:22.920 --> 01:25:28.359
questions so when

01:25:28.359 --> 01:25:32.119
you say that the commercial customers paying more than

01:25:32.119 --> 01:25:33.199
their pure pure share

01:25:33.199 --> 01:25:38.229
versus yes for the cost of service excuse me versus some

01:25:38.229 --> 01:25:39.000
residential

01:25:39.000 --> 01:25:43.649
customers are paying less are these customer commercial

01:25:43.649 --> 01:25:45.000
customers and

01:25:45.000 --> 01:25:51.239
residential customers kind of considered equal in terms of

01:25:51.239 --> 01:25:53.560
their importance as

01:25:53.560 --> 01:25:57.649
customers to DME or our residential customers considered

01:25:57.649 --> 01:25:58.800
more important

01:25:58.800 --> 01:26:02.229
because the residents you know including those residents

01:26:02.229 --> 01:26:03.039
that are you know

01:26:03.039 --> 01:26:07.039
business owners etc because they're the the citizen owners

01:26:07.039 --> 01:26:09.239
of DME or is that not

01:26:09.239 --> 01:26:11.800
factored in it's it just looked at in terms of you know

01:26:11.800 --> 01:26:13.840
share of DME's cost I

01:26:13.840 --> 01:26:16.579
be surprised if that was a factor I think all of our

01:26:16.579 --> 01:26:17.800
customers are important

01:26:17.800 --> 01:26:21.859
to us and rate design is more of an art than a science and

01:26:21.859 --> 01:26:23.359
I think you know back

01:26:23.359 --> 01:26:25.689
when they these rates were designed they've probably been

01:26:25.689 --> 01:26:26.119
this way for a

01:26:26.119 --> 01:26:29.119
long long time that was you know that was the policy at the

01:26:29.119 --> 01:26:29.640
time maybe even

01:26:29.640 --> 01:26:32.380
the cost of service showed these were the appropriate rate

01:26:32.380 --> 01:26:33.159
design at the time

01:26:33.159 --> 01:26:36.600
but it's over time maybe that's that's changed a bit so

01:26:36.600 --> 01:26:37.960
that the residential

01:26:37.960 --> 01:26:40.840
customer rates could be higher based on the cost of service

01:26:40.840 --> 01:26:42.260
that's a policy

01:26:42.260 --> 01:26:45.750
decision we're not making that recommendation and I can

01:26:45.750 --> 01:26:47.319
tell you again

01:26:47.319 --> 01:26:51.100
just celebrated my 40th year in the business we've never

01:26:51.100 --> 01:26:53.239
really gone and try

01:26:53.239 --> 01:26:55.979
to do anything dramatic with respect to rate design because

01:26:55.979 --> 01:26:57.119
of what I said folks

01:26:57.119 --> 01:27:00.720
get used to there's certain paying a certain amount of

01:27:00.720 --> 01:27:02.199
their bill and once we

01:27:02.199 --> 01:27:05.880
you know favor one one direction that it in a zero-sum game

01:27:05.880 --> 01:27:07.119
then it gets made up

01:27:07.119 --> 01:27:10.119
someplace else well so that's the trickiness of playing

01:27:10.119 --> 01:27:10.520
with the rate

01:27:10.520 --> 01:27:16.359
design yeah I was thinking more you know in terms of making

01:27:16.359 --> 01:27:18.359
the in the future you

01:27:18.359 --> 01:27:21.840
know as we've we've talked about recently when looking to

01:27:21.840 --> 01:27:22.960
the the study

01:27:22.960 --> 01:27:25.699
that's going to be done of the whole I forget the name of

01:27:25.699 --> 01:27:26.800
the study but the you

01:27:26.800 --> 01:27:30.420
know financial structure of DME and for our various

01:27:30.420 --> 01:27:32.560
utilities looking at that

01:27:32.560 --> 01:27:37.000
you know the cost effectiveness and management and risk and

01:27:37.000 --> 01:27:38.359
so on looking

01:27:38.359 --> 01:27:42.020
into the possibility of reversing the rate structure so

01:27:42.020 --> 01:27:43.439
that the commercial

01:27:43.439 --> 01:27:47.000
users have a have a higher rate versus residential users

01:27:47.000 --> 01:27:48.279
having a lower rate

01:27:48.279 --> 01:27:52.460
like what we have in water because even even if it measures

01:27:52.460 --> 01:27:53.600
and I mean that

01:27:53.600 --> 01:27:56.359
makes sense to me because the commercial users use more and

01:27:56.359 --> 01:27:56.640
that

01:27:56.640 --> 01:28:01.710
residential users use less but it would certainly encourage

01:28:01.710 --> 01:28:03.399
conservation and be

01:28:03.399 --> 01:28:07.569
be better for our residential customers although of course

01:28:07.569 --> 01:28:08.680
like you said you

01:28:08.680 --> 01:28:12.069
know then the commercial customers would be would end up

01:28:12.069 --> 01:28:14.159
paying more so on a pure

01:28:14.159 --> 01:28:17.920
cents per kilowatt hour basis that commercial customers pay

01:28:17.920 --> 01:28:18.800
less but they

01:28:18.800 --> 01:28:21.119
still pay that's what you're saying I just for the

01:28:21.119 --> 01:28:22.239
everybody so but their

01:28:22.239 --> 01:28:26.359
cost of service they could actually pay even less than that

01:28:26.359 --> 01:28:29.279
so based on their

01:28:29.279 --> 01:28:32.279
their usage profile when they're using how much they use

01:28:32.279 --> 01:28:33.119
they tend to have

01:28:33.119 --> 01:28:36.270
higher load factors or capacity factors they tend to use

01:28:36.270 --> 01:28:37.560
power you know during

01:28:37.560 --> 01:28:40.560
times when it's less expensive so they get that break and

01:28:40.560 --> 01:28:41.439
also what you mentioned

01:28:41.439 --> 01:28:46.479
economies of scale so yes you know I think when you when

01:28:46.479 --> 01:28:47.720
you start looking at

01:28:47.720 --> 01:28:52.760
cost of service there's so many things that go into it that

01:28:52.760 --> 01:28:54.279
like you say it

01:28:54.279 --> 01:28:57.760
could be the time the time of the day that is being used it

01:28:57.760 --> 01:28:58.880
could just be the

01:28:58.880 --> 01:29:02.840
sheer volume that there that people use commercial versus

01:29:02.840 --> 01:29:04.520
residential that

01:29:04.520 --> 01:29:10.069
drives down the cost per delivery of a kilowatt hour not a

01:29:10.069 --> 01:29:11.359
pure cost

01:29:11.359 --> 01:29:18.579
but cost of like like you say the pure share of the cost

01:29:18.579 --> 01:29:19.680
which includes all

01:29:19.680 --> 01:29:24.300
fixed cost infrastructure and all that so that's exactly

01:29:24.300 --> 01:29:26.119
correct thank you and

01:29:26.119 --> 01:29:28.970
it is more of an art than a science it is an art and it's

01:29:28.970 --> 01:29:30.039
you know it's it can

01:29:30.039 --> 01:29:35.199
be local desires you know you can provide that input to us

01:29:35.199 --> 01:29:35.960
and the council

01:29:35.960 --> 01:29:38.550
can provide that input and and we can you know look at

01:29:38.550 --> 01:29:39.720
other scenarios if that

01:29:39.720 --> 01:29:43.109
was important if that accomplished something that the board

01:29:43.109 --> 01:29:43.800
or the council

01:29:43.800 --> 01:29:47.189
wanted to come now you said the gap is closing so that is

01:29:47.189 --> 01:29:48.079
something that we can

01:29:48.079 --> 01:29:51.520
look at in the future is if that's the policy that we want

01:29:51.520 --> 01:29:52.479
to get that gap

01:29:52.479 --> 01:29:55.609
closer we can do that but you would never do that in one

01:29:55.609 --> 01:29:56.720
year you would do

01:29:56.720 --> 01:30:01.520
that over time that would be because the impact is just too

01:30:01.520 --> 01:30:04.680
much thank you so we

01:30:04.680 --> 01:30:09.710
we do a cost of service analysis every five years and the

01:30:09.710 --> 01:30:11.000
18 do we know when

01:30:11.000 --> 01:30:14.210
that's going to be I'd say we have something in a couple of

01:30:14.210 --> 01:30:16.960
months okay we

01:30:16.960 --> 01:30:19.699
have some draft results and preliminary results we're kind

01:30:19.699 --> 01:30:20.960
of vetting through it

01:30:20.960 --> 01:30:26.520
making sure yeah it makes less so I had one other slide

01:30:26.520 --> 01:30:27.439
that I'm going to talk

01:30:27.439 --> 01:30:30.319
about here I think I'll turn it back over to Tony for a

01:30:30.319 --> 01:30:32.399
minute so we have an

01:30:32.399 --> 01:30:36.880
ECA energy cost adjustment every place I've been has had

01:30:36.880 --> 01:30:37.439
energy cost

01:30:37.439 --> 01:30:40.579
adjustments because of the nature of power costs they're

01:30:40.579 --> 01:30:41.760
extremely volatile

01:30:41.760 --> 01:30:45.359
and the energy cost adjustment makes sure customers pay no

01:30:45.359 --> 01:30:47.079
less nor any more

01:30:47.079 --> 01:30:51.939
than our actual cost of power so when we looked at that

01:30:51.939 --> 01:30:53.439
closely in conjunction

01:30:53.439 --> 01:30:56.300
with this budget we noticed it did not really reference a

01:30:56.300 --> 01:30:57.399
project like the deck

01:30:57.399 --> 01:31:01.319
the debt and energy center didn't include you know clearly

01:31:01.319 --> 01:31:02.319
that deck debt

01:31:02.319 --> 01:31:06.770
and operating expenses so we'd like to come back at a later

01:31:06.770 --> 01:31:08.119
date update that

01:31:08.119 --> 01:31:14.899
rate schedule that would include the deck and and reaffirm

01:31:14.899 --> 01:31:15.840
I think our

01:31:15.840 --> 01:31:19.159
desire that we're going to look at that on a regular basis

01:31:19.159 --> 01:31:21.039
quarterly and to the

01:31:21.039 --> 01:31:24.420
extent costs go down see if we can share that on a

01:31:24.420 --> 01:31:26.399
quarterly basis if the cost

01:31:26.399 --> 01:31:30.090
go up and we need to go the other direction so all of that

01:31:30.090 --> 01:31:31.000
what I remember

01:31:31.000 --> 01:31:33.489
from my time in designing I've designed a couple of these

01:31:33.489 --> 01:31:34.960
in places I've been the

01:31:34.960 --> 01:31:38.359
rating agencies require these basically they love them

01:31:38.359 --> 01:31:39.399
especially for municipal

01:31:39.399 --> 01:31:43.250
utilities because of the volatility again of that purchase

01:31:43.250 --> 01:31:44.520
power market they

01:31:44.520 --> 01:31:47.659
so it's important that we have one but it's important also

01:31:47.659 --> 01:31:48.720
that we operate it

01:31:48.720 --> 01:31:52.340
and I've been talking to folks here about that operated as

01:31:52.340 --> 01:31:53.399
if it's you know

01:31:53.399 --> 01:31:57.270
if it goes up it goes up if it goes down it goes down and

01:31:57.270 --> 01:31:58.840
and I think that in the

01:31:58.840 --> 01:32:02.609
long run that's how we're planning to operate the ECA there

01:32:02.609 --> 01:32:03.199
's a little bit of

01:32:03.199 --> 01:32:06.319
a balance there right now we're planning to draw that down

01:32:06.319 --> 01:32:08.039
and that's part of the

01:32:08.039 --> 01:32:11.609
strategy for keeping the ECA fixed as long as we can right

01:32:11.609 --> 01:32:12.399
now it's at point

01:32:12.399 --> 01:32:15.270
zero three four one we'd like to keep it there and that

01:32:15.270 --> 01:32:17.039
will generate with the

01:32:17.039 --> 01:32:20.060
suspension of the TCRF factor that will generate that three

01:32:20.060 --> 01:32:21.039
and a half percent

01:32:21.039 --> 01:32:25.909
rate decrease for for residential customers going forward

01:32:25.909 --> 01:32:27.039
wanted to show

01:32:27.039 --> 01:32:30.750
the formula also I guess with this conversation so it's

01:32:30.750 --> 01:32:31.600
your projected

01:32:31.600 --> 01:32:35.819
energy costs and revenues and the balancing account so if

01:32:35.819 --> 01:32:36.880
it costs less

01:32:36.880 --> 01:32:40.159
than a prior period then you credit that to the ECA and

01:32:40.159 --> 01:32:41.760
reduce it that way and if

01:32:41.760 --> 01:32:44.500
it costs more than the balancing cap will be positive and

01:32:44.500 --> 01:32:45.840
you add that back

01:32:45.840 --> 01:32:50.439
in you divide it by kilowatt hours and that's the that's

01:32:50.439 --> 01:32:51.680
the ECA now the

01:32:51.680 --> 01:32:54.180
proposed calculation is the same but we'll just add the

01:32:54.180 --> 01:32:55.000
deck expenses in

01:32:55.000 --> 01:32:57.329
there and it will include all the revenues and that's going

01:32:57.329 --> 01:32:57.560
to be

01:32:57.560 --> 01:33:00.380
particularly attractive for a few years because as was

01:33:00.380 --> 01:33:02.159
mentioned we have little

01:33:02.159 --> 01:33:05.279
or no debt service in 19 I think we have about 4 million

01:33:05.279 --> 01:33:06.680
and then it goes up after

01:33:06.680 --> 01:33:08.609
that so there's going to be a significant amount of

01:33:08.609 --> 01:33:09.319
revenues this year

01:33:09.319 --> 01:33:14.220
next year associated with the deck operation so that could

01:33:14.220 --> 01:33:14.960
be credited back

01:33:14.960 --> 01:33:19.119
in that particular formula for instance question I just

01:33:19.119 --> 01:33:21.000
want to clarify you're

01:33:21.000 --> 01:33:24.800
going to treat it as a strict pass-through so when we are

01:33:24.800 --> 01:33:25.640
when we need

01:33:25.640 --> 01:33:28.069
more money we're going to get more money when we have more

01:33:28.069 --> 01:33:28.840
than we need we're

01:33:28.840 --> 01:33:31.720
going to give it back so you're going to treat it as a past

01:33:31.720 --> 01:33:32.199
that's my

01:33:32.199 --> 01:33:35.199
philosophical recommendation I think we're gonna it will

01:33:35.199 --> 01:33:36.199
stay flat at the

01:33:36.199 --> 01:33:38.699
moment for this I'm going to try to keep it flat for this

01:33:38.699 --> 01:33:40.319
next budget year we

01:33:40.319 --> 01:33:42.819
were starting with a positive balance and when we ran all

01:33:42.819 --> 01:33:43.640
the numbers that

01:33:43.640 --> 01:33:47.859
looked like we couldn't keep it flat but it but as soon as

01:33:47.859 --> 01:33:48.840
we burn it through

01:33:48.840 --> 01:33:53.100
the money we have then I'd like to I'd like to go to a more

01:33:53.100 --> 01:33:55.079
exacting call it a

01:33:55.079 --> 01:34:01.109
pure ECA yeah I think I think in the past we've we used to

01:34:01.109 --> 01:34:01.579
call it over

01:34:01.579 --> 01:34:03.989
collected and under collected and that's essentially what

01:34:03.989 --> 01:34:04.840
we're same thing we're

01:34:04.840 --> 01:34:09.819
talking about is you're over collected if you've collected

01:34:09.819 --> 01:34:10.640
more than what your

01:34:10.640 --> 01:34:15.960
energy cost actually is for this period and so and there's

01:34:15.960 --> 01:34:17.079
always been a target

01:34:17.079 --> 01:34:20.949
I can't remember at some point we put a target on it where

01:34:20.949 --> 01:34:22.119
we didn't get let it

01:34:22.119 --> 01:34:25.810
get over yeah there was a band there was it was if I recall

01:34:25.810 --> 01:34:26.840
it was plus five and

01:34:26.840 --> 01:34:31.770
minus five like a ten million dollar window we never wanted

01:34:31.770 --> 01:34:32.239
to be under

01:34:32.239 --> 01:34:35.989
collected more than negative five million nor over

01:34:35.989 --> 01:34:37.039
collected more than five

01:34:37.039 --> 01:34:40.489
million right and so so we may be looking at a different

01:34:40.489 --> 01:34:41.840
band or different

01:34:41.840 --> 01:34:44.600
way of looking at that yeah I'm open-minded that just as

01:34:44.600 --> 01:34:45.279
long as it does

01:34:45.279 --> 01:34:48.800
self adjust to some regular degree and I think I think like

01:34:48.800 --> 01:34:49.920
say it's good for

01:34:49.920 --> 01:34:53.140
both the financial security of the agency as well as the

01:34:53.140 --> 01:34:54.039
customers they're

01:34:54.039 --> 01:34:57.220
they're getting back in real time anything we can save if

01:34:57.220 --> 01:34:57.920
the market turns

01:34:57.920 --> 01:35:00.659
in our favor for instance and our power costs go down then

01:35:00.659 --> 01:35:01.560
we can share that on

01:35:01.560 --> 01:35:05.810
a real-time basis is is now the appropriate time to ask

01:35:05.810 --> 01:35:07.119
about the TCRF

01:35:07.119 --> 01:35:11.920
sure suspension of that so kind of I know that's kind of

01:35:11.920 --> 01:35:13.840
walked through that

01:35:13.840 --> 01:35:18.369
I know so the TCRF revenue that's the TCRF revenue we

01:35:18.369 --> 01:35:19.880
collect from our

01:35:19.880 --> 01:35:23.399
customers is that correct right so a couple of years ago

01:35:23.399 --> 01:35:24.560
you established the

01:35:24.560 --> 01:35:28.239
TCRF because we were our expenses were going up for

01:35:28.239 --> 01:35:30.399
transmission and we really

01:35:30.399 --> 01:35:33.399
didn't have a pot of money to compensate for that so

01:35:33.399 --> 01:35:34.920
establish the TCRF which I

01:35:34.920 --> 01:35:39.520
think was great we just at this point in time felt like we

01:35:39.520 --> 01:35:42.279
could afford to

01:35:42.279 --> 01:35:45.760
suspend it for this year where there's a couple of

01:35:45.760 --> 01:35:46.520
different ways we could have

01:35:46.520 --> 01:35:48.680
accomplished the same thing but we didn't really want to

01:35:48.680 --> 01:35:49.420
play with the base

01:35:49.420 --> 01:35:53.500
rates or touch the base rates and it was the right amount

01:35:53.500 --> 01:35:54.760
of money was in that

01:35:54.760 --> 01:35:58.069
pot there's about five and a half million dollars in the T

01:35:58.069 --> 01:35:59.159
CRF for FY 19

01:35:59.159 --> 01:36:02.550
that now we can return to customers basically and not

01:36:02.550 --> 01:36:03.840
collect it this next

01:36:03.840 --> 01:36:07.369
year we're hoping we can go forward the same way and I

01:36:07.369 --> 01:36:08.439
think that's in our plan

01:36:08.439 --> 01:36:11.739
but we'll be revisiting that each and every year if we can

01:36:11.739 --> 01:36:12.840
continue to do that

01:36:12.840 --> 01:36:16.859
we would if they do go up and we're not able to continue

01:36:16.859 --> 01:36:18.039
the suspension that one

01:36:18.039 --> 01:36:20.869
possibility is that we could roll it into the ACA at some

01:36:20.869 --> 01:36:21.800
point or leave it

01:36:21.800 --> 01:36:24.600
out there by itself I think that'd be a decision you guys

01:36:24.600 --> 01:36:25.800
we talk about it some

01:36:25.800 --> 01:36:29.430
later date and you could help me make a recommendation in

01:36:29.430 --> 01:36:32.520
that regard so so just

01:36:32.520 --> 01:36:37.529
to be sure the TCRF that's not that has nothing to do with

01:36:37.529 --> 01:36:38.720
T cost reimbursements

01:36:38.720 --> 01:36:43.159
no that's on the flip side that's our share of the T cost

01:36:43.159 --> 01:36:43.920
that we pay other

01:36:43.920 --> 01:36:48.039
utilities right yes and it's rising and it will be

01:36:48.039 --> 01:36:49.319
continuing to project it to

01:36:49.319 --> 01:36:53.260
rise right the amount we're being assessed for our share of

01:36:53.260 --> 01:36:54.399
the grid out

01:36:54.399 --> 01:36:57.960
there in air cot so folks like us are putting in new

01:36:57.960 --> 01:36:59.079
projects and charging

01:36:59.079 --> 01:37:03.159
that back to the to the electric utilities in the state so

01:37:03.159 --> 01:37:04.159
there's a

01:37:04.159 --> 01:37:10.199
reduction because I know a lot of the the capital projects

01:37:10.199 --> 01:37:11.239
I guess are

01:37:11.239 --> 01:37:15.199
classified as transmission cost so it is a reduction in

01:37:15.199 --> 01:37:17.319
those play in hand-in-hand

01:37:17.319 --> 01:37:21.520
with suspension of that of that fee are you saying our

01:37:21.520 --> 01:37:22.520
transmission projects for

01:37:22.520 --> 01:37:26.960
our CIP yes it's being reduced has no effect so these are

01:37:26.960 --> 01:37:28.199
our share of what

01:37:28.199 --> 01:37:30.529
the other utilities in state are investing well I'm talking

01:37:30.529 --> 01:37:31.640
about our TCRF

01:37:31.640 --> 01:37:36.079
right right that we charge that piece of the right right it

01:37:36.079 --> 01:37:37.199
was meant to

01:37:37.199 --> 01:37:41.930
compensate for our expenses for the state allocation of

01:37:41.930 --> 01:37:43.359
cost to us our our

01:37:43.359 --> 01:37:49.159
transmission costs that we were charged correct yes so

01:37:49.159 --> 01:37:50.560
versus what we charge

01:37:50.560 --> 01:37:53.560
others that's a different pot so this would be what we're

01:37:53.560 --> 01:37:54.840
paying to use maybe

01:37:54.840 --> 01:37:58.310
some expenses and transmission at City of Austin put in for

01:37:58.310 --> 01:38:00.119
instance or encore

01:38:00.119 --> 01:38:04.560
or others we get our fair share of that right build each

01:38:04.560 --> 01:38:05.479
year so that's what

01:38:05.479 --> 01:38:10.600
that was nothing to do with our particular CIP investment

01:38:10.600 --> 01:38:11.979
okay all right

01:38:11.979 --> 01:38:16.439
we'll keep we'll keep marching on I'll let Tony back

01:38:19.560 --> 01:38:23.159
okay so so which have here in front of you we provide in

01:38:23.159 --> 01:38:25.199
your backup it's just

01:38:25.199 --> 01:38:30.039
our current forecast for this fund again as as George

01:38:30.039 --> 01:38:32.239
mentioned this does include

01:38:32.239 --> 01:38:39.970
the suspension of the TCRF going forward no proposed

01:38:39.970 --> 01:38:42.359
changes to to base rates and

01:38:42.359 --> 01:38:47.890
we do attempt at least you know over the next couple years

01:38:47.890 --> 01:38:48.880
to to try to maintain

01:38:48.880 --> 01:38:54.329
that that ECA and and and hopefully in the future look at a

01:38:54.329 --> 01:38:55.720
more mathematical

01:38:55.720 --> 01:39:02.720
calculation of of that ECA adjustment the 19 proposed

01:39:02.720 --> 01:39:04.960
budget does include this

01:39:04.960 --> 01:39:11.350
28 point million dollars to defuse the debt that's the 2010

01:39:11.350 --> 01:39:13.439
scrubber debt we

01:39:13.439 --> 01:39:17.670
did also talk to you about the decrease in purchase power

01:39:17.670 --> 01:39:19.239
that you'll that you

01:39:19.239 --> 01:39:26.909
see here this plan does include a drawdown of of reserves

01:39:26.909 --> 01:39:29.560
in 1718 to about

01:39:29.560 --> 01:39:37.229
13.8 million and in 19 another 27.6 million we are

01:39:37.229 --> 01:39:40.199
targeting that reserve

01:39:40.199 --> 01:39:43.460
the operating reserve for this fund to about 40 million

01:39:43.460 --> 01:39:44.520
dollars is what we

01:39:44.520 --> 01:39:48.630
would target over the plan year again in some of these

01:39:48.630 --> 01:39:50.239
years we're certainly a

01:39:50.239 --> 01:39:54.680
little bit above that but that's that is the plan or the

01:39:54.680 --> 01:39:55.800
recommendation for you

01:39:55.800 --> 01:40:01.600
the debt coverage for this fund per our debt policy is 1.25

01:40:01.600 --> 01:40:02.560
similar to all other

01:40:02.560 --> 01:40:06.720
utilities and this plan certainly projects to maintain us

01:40:06.720 --> 01:40:08.600
above above that

01:40:08.600 --> 01:40:13.420
particular measure and just just as a note with some of the

01:40:13.420 --> 01:40:15.039
revamping that we

01:40:15.039 --> 01:40:18.189
did of our revenue bond ordinance the rainy bomb ordinance

01:40:18.189 --> 01:40:19.039
on the utility

01:40:19.039 --> 01:40:23.529
system a revenue debt for the deck only requires a one-t

01:40:23.529 --> 01:40:25.239
imes coverage so this is

01:40:25.239 --> 01:40:33.460
certainly well above that that requirement I guess my eyes

01:40:33.460 --> 01:40:34.000
drawn down

01:40:34.000 --> 01:40:49.680
to 1.01 in 18 in 18 yeah yeah mr. Chairman we had we had

01:40:49.680 --> 01:40:51.000
looked at this we

01:40:51.000 --> 01:40:53.319
probably need to go back and take a closer look at that

01:40:53.319 --> 01:40:54.159
calculation to make

01:40:54.159 --> 01:40:57.300
sure that that that there's no error in that so there might

01:40:57.300 --> 01:40:58.199
be an error in that

01:40:58.199 --> 01:41:07.319
that's good that's correct so so for for a bond covenant

01:41:07.319 --> 01:41:10.359
requirements we do look

01:41:10.359 --> 01:41:13.359
at the entire utility system that's made up of electric

01:41:13.359 --> 01:41:15.239
water and wastewater the

01:41:15.239 --> 01:41:19.680
three combined utilities are you know are above the 1.25

01:41:19.680 --> 01:41:20.520
but we'll certainly

01:41:20.520 --> 01:41:23.260
take a look at that at that calculation a little bit closer

01:41:23.260 --> 01:41:23.840
make sure it's

01:41:23.840 --> 01:41:29.090
correct and the debt coverage I'm sorry and the debt

01:41:29.090 --> 01:41:30.479
coverage for the deck kicks

01:41:30.479 --> 01:41:36.720
in and 19 or 20 the debt cover the debt coverage service

01:41:36.720 --> 01:41:42.000
the debt service for

01:41:42.000 --> 01:41:51.170
19 20 is when it really goes up to just under 18 okay so as

01:41:51.170 --> 01:41:54.000
I mentioned earlier

01:41:54.000 --> 01:41:58.979
this is the the picture for you what the total debt for DME

01:41:58.979 --> 01:42:01.439
was at 930 17 this

01:42:01.439 --> 01:42:05.020
does not include any of the the recommendations that are

01:42:05.020 --> 01:42:05.920
being made we

01:42:05.920 --> 01:42:09.899
just wanted to let you know just as a reference point where

01:42:09.899 --> 01:42:11.680
we were so that

01:42:11.680 --> 01:42:15.729
include about nine hundred and thirty nine million of

01:42:15.729 --> 01:42:17.159
principal and interest

01:42:17.159 --> 01:42:23.390
for our our operation there's an additional sixty point

01:42:23.390 --> 01:42:24.319
five million of

01:42:24.319 --> 01:42:29.699
TMP a debt that's paid through our purchase power expenses

01:42:29.699 --> 01:42:30.880
on our in our

01:42:30.880 --> 01:42:37.720
budget and so this is where we were in that in that budget

01:42:37.720 --> 01:42:40.840
as of 930 17 slightly

01:42:40.840 --> 01:42:48.460
over a billion dollars so I know this is a very busy

01:42:48.460 --> 01:42:52.600
spreadsheet for you but I

01:42:52.600 --> 01:42:56.180
did want to just for reference point 1718 here's a nine

01:42:56.180 --> 01:42:57.239
nine hundred and

01:42:57.239 --> 01:42:59.590
thirty nine million of principal and interest that would be

01:42:59.590 --> 01:43:00.119
out that was

01:43:00.119 --> 01:43:04.409
outstanding at the beginning of the fiscal year we are at

01:43:04.409 --> 01:43:06.640
the end of fiscal

01:43:06.640 --> 01:43:12.340
year 18 19 with the proposed pay down of the of the scrub

01:43:12.340 --> 01:43:16.319
ber debt 28.6 million we

01:43:16.319 --> 01:43:20.760
will be down to about 848 million dollars in debt does not

01:43:20.760 --> 01:43:22.920
include the 60

01:43:22.920 --> 01:43:26.199
million that is out there and TMP a that's paid through

01:43:26.199 --> 01:43:28.239
purchase power I did

01:43:28.239 --> 01:43:31.409
want to point out that one of the positive things of paying

01:43:31.409 --> 01:43:32.000
down this

01:43:32.000 --> 01:43:37.720
28.6 million is that we will save about 3.7 million dollars

01:43:37.720 --> 01:43:39.680
in interest that

01:43:39.680 --> 01:43:42.829
the city will not have to pay on that debt by by paying it

01:43:42.829 --> 01:43:45.039
off early so so

01:43:45.039 --> 01:43:49.479
again that was part of our recommendation last year and and

01:43:49.479 --> 01:43:49.920
and we

01:43:49.920 --> 01:43:52.750
still think economically it makes sense for us to to

01:43:52.750 --> 01:43:54.119
recommend this for your

01:43:54.119 --> 01:44:00.619
consideration today and George will come back up here and

01:44:00.619 --> 01:44:01.479
talk to you about the

01:44:01.479 --> 01:44:06.520
purchase power unless you have questions about the debt

01:44:06.520 --> 01:44:08.920
could you say a little

01:44:08.920 --> 01:44:15.729
something about how the DME the total DME debt compares to

01:44:15.729 --> 01:44:17.199
the total debt for

01:44:17.199 --> 01:44:21.430
the city just so people can you know the public and kind of

01:44:21.430 --> 01:44:22.439
put that in in

01:44:22.439 --> 01:44:28.319
perspective certainly by far the the the largest amount of

01:44:28.319 --> 01:44:30.359
our outstanding debt I

01:44:30.359 --> 01:44:33.619
don't have the exact percentage for you today but it's

01:44:33.619 --> 01:44:34.680
certainly you know the

01:44:34.680 --> 01:44:37.680
largest amount of debt that we have out there primarily as

01:44:37.680 --> 01:44:39.680
a result of the 200

01:44:39.680 --> 01:44:43.600
million that we had issued for the deck for the deck yeah

01:44:43.600 --> 01:44:44.640
yeah so close to a

01:44:44.640 --> 01:44:50.960
billion I mean it's gone down citywide from a billion to

01:44:50.960 --> 01:44:52.359
under a billion but

01:44:52.359 --> 01:44:56.539
but for DM in for DME itself it's still close to a billion

01:44:56.539 --> 01:44:57.880
so yeah that's and

01:44:57.880 --> 01:45:00.470
part of the strategy here too and the recommendation for

01:45:00.470 --> 01:45:02.359
the forecast and in

01:45:02.359 --> 01:45:05.189
moving to more of a cash funding of our of our of our CAP

01:45:05.189 --> 01:45:06.279
program is to continue

01:45:06.279 --> 01:45:09.119
to deliver this fund just like we're doing with some of the

01:45:09.119 --> 01:45:09.800
other funds and

01:45:09.800 --> 01:45:14.359
so over over the over the five-year forecast if you look at

01:45:14.359 --> 01:45:15.840
a 2010 20-year

01:45:15.840 --> 01:45:19.250
projection you'll see continual decrease of that I think

01:45:19.250 --> 01:45:21.600
once we get to a more

01:45:21.600 --> 01:45:25.750
reasonable level of debt then we'll you know we may come

01:45:25.750 --> 01:45:27.439
back in a future day to

01:45:27.439 --> 01:45:31.229
look at additional debt in debt issuances but that would be

01:45:31.229 --> 01:45:31.720
in the

01:45:31.720 --> 01:45:35.279
future but for the next five years the plan would be to

01:45:35.279 --> 01:45:36.680
minimize the amount of

01:45:36.680 --> 01:45:39.680
debt that's being issued and brought on at the same time

01:45:39.680 --> 01:45:40.520
you'll continue to see

01:45:40.520 --> 01:45:45.960
debt to decrease and as opportunities come up to

01:45:45.960 --> 01:45:46.800
potentially pay down

01:45:46.800 --> 01:45:50.840
additional debt we'll certainly be looking at that as well

01:45:50.840 --> 01:45:53.159
and so tell me

01:45:53.159 --> 01:45:57.000
if this is skipping ahead too much but it's applying to the

01:45:57.000 --> 01:45:58.079
to the debt excuse

01:45:58.079 --> 01:46:01.909
me it looks like you know based on what we saw in the

01:46:01.909 --> 01:46:03.560
backup for today that the

01:46:03.560 --> 01:46:12.859
deck will be bringing in net about 10 million a year so you

01:46:12.859 --> 01:46:14.659
know originally we

01:46:14.659 --> 01:46:19.520
had been told that the deck would end up paying for itself

01:46:19.520 --> 01:46:21.000
you know in relatively

01:46:21.000 --> 01:46:25.100
short time but at that rate it this rate now you know given

01:46:25.100 --> 01:46:26.640
these new figures it

01:46:26.640 --> 01:46:30.680
looks like it wouldn't be for you know I don't know 20 22

01:46:30.680 --> 01:46:32.239
23 years something like

01:46:32.239 --> 01:46:35.039
that so whatever is gonna make up that debt service it's

01:46:35.039 --> 01:46:36.079
not gonna be primarily

01:46:36.079 --> 01:46:40.159
from the deck and and a couple of slides we'll certainly

01:46:40.159 --> 01:46:41.119
dig into that with you

01:46:41.119 --> 01:46:43.520
probably answer your questions a little bit more succinctly

01:46:43.520 --> 01:46:50.199
okay thank you so you

01:46:50.199 --> 01:46:52.909
know the most significant part of our budget is purchase

01:46:52.909 --> 01:46:53.680
power you know

01:46:53.680 --> 01:46:58.119
figuring out what the markets are gonna do and and you know

01:46:58.119 --> 01:46:59.479
we buy our load from

01:46:59.479 --> 01:47:02.220
the market and all of our resources are sold to the market

01:47:02.220 --> 01:47:03.119
so there's kind of a

01:47:03.119 --> 01:47:06.439
netting thing going on so the keys key assumptions in the

01:47:06.439 --> 01:47:06.920
purchase power

01:47:06.920 --> 01:47:09.939
forecast was the deck being operational by July and we're

01:47:09.939 --> 01:47:11.119
hoping earlier than

01:47:11.119 --> 01:47:14.779
July Gibbons Creek will be operational through September

01:47:14.779 --> 01:47:16.159
and I recall you were

01:47:16.159 --> 01:47:19.579
with me to recommend we continue that at least through

01:47:19.579 --> 01:47:21.279
September we use forward

01:47:21.279 --> 01:47:24.789
air cod market prices as per the standard and pours global

01:47:24.789 --> 01:47:25.680
forecast and

01:47:25.680 --> 01:47:29.869
we try to match it up with past market profiles to map out

01:47:29.869 --> 01:47:30.960
the costs and

01:47:30.960 --> 01:47:34.710
revenues going forward we have the bluebell solar one

01:47:34.710 --> 01:47:36.319
project operational by

01:47:36.319 --> 01:47:41.380
January of 2019 that's be our first solar Santa Rita wind

01:47:41.380 --> 01:47:42.640
became operational

01:47:42.640 --> 01:47:44.960
in April that's gonna be a nice resource for us

01:47:44.960 --> 01:47:46.920
particularly this summer we have

01:47:46.920 --> 01:47:51.600
gas prices as per NYMEX forward curve and the other

01:47:51.600 --> 01:47:53.359
transportation and adders

01:47:53.359 --> 01:47:58.159
that you're familiar with also all of our resources are

01:47:58.159 --> 01:47:59.560
pretty well locked in

01:47:59.560 --> 01:48:03.000
per contract so all of our renewables so we know what those

01:48:03.000 --> 01:48:05.239
prices are and you

01:48:05.239 --> 01:48:08.750
mentioned talked earlier Tony did about the load forecast

01:48:08.750 --> 01:48:10.960
which we updated and

01:48:10.960 --> 01:48:15.789
we had that validated by an outside entity so it was

01:48:15.789 --> 01:48:17.560
mentioned earlier about

01:48:17.560 --> 01:48:20.300
the the revenue assumptions how much the deck might

01:48:20.300 --> 01:48:22.159
generate how much TMP a might

01:48:22.159 --> 01:48:24.720
generate as well as all of our resources what's the you

01:48:24.720 --> 01:48:25.840
know what is the value of

01:48:25.840 --> 01:48:31.279
all those that operate going forward and right now we're

01:48:31.279 --> 01:48:32.159
forecasting a fairly

01:48:32.159 --> 01:48:36.130
high market it's you've heard about the scarcity of power

01:48:36.130 --> 01:48:37.520
this summer so market

01:48:37.520 --> 01:48:40.380
prices have gone through the roof so to speak question

01:48:40.380 --> 01:48:41.800
because what will actual

01:48:41.800 --> 01:48:44.670
prices be the day of will they be the same as the forwards

01:48:44.670 --> 01:48:45.640
we're looking at

01:48:45.640 --> 01:48:48.920
right now what they decline so there's a whole lot of

01:48:48.920 --> 01:48:50.359
subjectivity there we're

01:48:50.359 --> 01:48:53.479
doing our best and and we consulted with our outside

01:48:53.479 --> 01:48:54.960
council also our outside

01:48:54.960 --> 01:48:59.229
consultants on this so one thing we did is we ran a

01:48:59.229 --> 01:49:01.319
scenario where we soften the

01:49:01.319 --> 01:49:05.949
market forecast we reduced the deck revenue by about 11

01:49:05.949 --> 01:49:06.960
million dollars just

01:49:06.960 --> 01:49:10.239
to see what would happen everything else reduced okay the

01:49:10.239 --> 01:49:11.279
cost of our load that

01:49:11.279 --> 01:49:14.020
we purchased as well as all of our other resources and we

01:49:14.020 --> 01:49:15.079
found there was only a

01:49:15.079 --> 01:49:18.470
very nominal increase in the net purchase power budget

01:49:18.470 --> 01:49:19.619
about 2 million and

01:49:19.619 --> 01:49:23.560
18 and 2.6 million and 19 if it turned out to be a lot

01:49:23.560 --> 01:49:24.479
bigger or worse than

01:49:24.479 --> 01:49:28.199
that and we probably would have come in with a more of a

01:49:28.199 --> 01:49:29.840
conservative forecast

01:49:29.840 --> 01:49:33.539
so right now we're sticking with the market forwards that

01:49:33.539 --> 01:49:34.680
we're seeing out

01:49:34.680 --> 01:49:37.439
there that have been validated to us and knowing that if

01:49:37.439 --> 01:49:38.439
for some reason the

01:49:38.439 --> 01:49:41.180
market doesn't develop like they're predicting that the

01:49:41.180 --> 01:49:41.880
impact will be

01:49:41.880 --> 01:49:44.279
fairly modest and will you know probably come back at some

01:49:44.279 --> 01:49:45.039
point in time and

01:49:45.039 --> 01:49:50.739
make an adjustment on our budget some of the deck

01:49:50.739 --> 01:49:53.279
assumptions you've heard us

01:49:53.279 --> 01:49:57.329
talk before average heat rate of 8300 BTUs per kilowatt

01:49:57.329 --> 01:49:59.479
hour tests so far make

01:49:59.479 --> 01:50:02.600
that look good we're going to be coming in under that

01:50:02.600 --> 01:50:04.319
talked about natural gas

01:50:04.319 --> 01:50:07.319
prices we're not predicting any maintenance or forced out

01:50:07.319 --> 01:50:08.199
ages for 19

01:50:08.199 --> 01:50:11.029
brand-new unit like having a brand-new car I think it's

01:50:11.029 --> 01:50:13.000
going to operate we

01:50:13.000 --> 01:50:15.750
reserve a part of the deck capacity for providing ancillary

01:50:15.750 --> 01:50:16.560
services in the

01:50:16.560 --> 01:50:19.949
market we have an ancillary service requirement and we're

01:50:19.949 --> 01:50:20.800
going to use the

01:50:20.800 --> 01:50:25.279
deck for that talked about forward market price profiles

01:50:25.279 --> 01:50:26.720
deck operating

01:50:26.720 --> 01:50:30.399
hours limited as you know by the missions permit that will

01:50:30.399 --> 01:50:31.640
be about 3100

01:50:31.640 --> 01:50:35.489
hours we're not predict that would be about 35% capacity

01:50:35.489 --> 01:50:36.319
factor our

01:50:36.319 --> 01:50:40.060
presumption for this next year is a substantially less than

01:50:40.060 --> 01:50:41.119
that so even in

01:50:41.119 --> 01:50:43.520
the best case where we're looking at a lot of revenue for

01:50:43.520 --> 01:50:44.760
18 and 19 we're going

01:50:44.760 --> 01:50:49.199
to be well under that 3100 hours we look at variable O&M so

01:50:49.199 --> 01:50:49.880
what are all the

01:50:49.880 --> 01:50:54.569
costs that are impacting the deck such as the the SCR

01:50:54.569 --> 01:50:56.039
catalyst the ammonia that

01:50:56.039 --> 01:50:58.779
you approved recently the lube oil contract you approve

01:50:58.779 --> 01:50:59.600
some of that gets

01:50:59.600 --> 01:51:02.350
consumed and all of the other variable expenses out there

01:51:02.350 --> 01:51:03.199
we add that to the

01:51:03.199 --> 01:51:06.590
fuel price and we say okay this is the number we have to

01:51:06.590 --> 01:51:07.880
get when we sell power

01:51:07.880 --> 01:51:11.840
to the market we have debt service and of course we talked

01:51:11.840 --> 01:51:12.399
about that already

01:51:12.399 --> 01:51:16.000
and there's other deck related expenses the the people who

01:51:16.000 --> 01:51:16.960
are going to be

01:51:16.960 --> 01:51:19.960
there operating the plant and other types of expenses at

01:51:19.960 --> 01:51:20.800
the plant so all

01:51:20.800 --> 01:51:23.800
that's rolled together in the pro forma and this is what

01:51:23.800 --> 01:51:25.239
resulted out of that at

01:51:25.239 --> 01:51:27.569
the top you see the revenue and that includes energy

01:51:27.569 --> 01:51:28.319
revenue as well as

01:51:28.319 --> 01:51:31.319
ancillary services and then you have all the expense

01:51:31.319 --> 01:51:33.239
categories below we talked

01:51:33.239 --> 01:51:37.800
in FY 19 about the debt and you can see the 4.4 million

01:51:37.800 --> 01:51:39.600
there that would be what

01:51:39.600 --> 01:51:44.479
what our schedule is for debt that year and then moving

01:51:44.479 --> 01:51:46.000
forward we broke out

01:51:46.000 --> 01:51:49.000
principal and interest in two pieces you'll see that's that

01:51:49.000 --> 01:51:49.680
will be about

01:51:49.680 --> 01:51:56.760
17.6 million pretty well fixed going forward so we

01:51:56.760 --> 01:51:57.880
incorporated that and

01:51:57.880 --> 01:52:01.770
you can see then we sum up all the expenditures you've got

01:52:01.770 --> 01:52:02.760
a kind of a net

01:52:02.760 --> 01:52:07.199
income board member referenced earlier that first two years

01:52:07.199 --> 01:52:07.720
we look pretty

01:52:07.720 --> 01:52:13.159
good at this time we're seeing predicting that you know all

01:52:13.159 --> 01:52:13.640
of the debt

01:52:13.640 --> 01:52:17.850
cannot be covered by the market revenues but a substantial

01:52:17.850 --> 01:52:20.680
part can in 1920 for

01:52:20.680 --> 01:52:24.770
instance the third column we're predicting not being able

01:52:24.770 --> 01:52:25.840
to cover 1.8

01:52:25.840 --> 01:52:28.600
million with the current crystal ball that we have forward

01:52:28.600 --> 01:52:29.399
but we're still

01:52:29.399 --> 01:52:33.840
covering the other part of that 17.6 million debt service

01:52:33.840 --> 01:52:35.439
so we're covering

01:52:35.439 --> 01:52:38.689
quite a bit of it and we're only not recovering a part and

01:52:38.689 --> 01:52:39.640
then it gets a

01:52:39.640 --> 01:52:42.470
little worse going forward because we're we're seeing the

01:52:42.470 --> 01:52:43.640
market getting back to

01:52:43.640 --> 01:52:46.960
more normal condition there'll be some incentives for folks

01:52:46.960 --> 01:52:47.560
to put in more

01:52:47.560 --> 01:52:50.840
power plants out there try to manage their load because

01:52:50.840 --> 01:52:51.640
there's going to be

01:52:51.640 --> 01:52:55.220
very costly summer this year and next year and and we think

01:52:55.220 --> 01:52:56.319
eventually that

01:52:56.319 --> 01:52:58.840
market's going to get back to normal so there's going to be

01:52:58.840 --> 01:52:59.640
a bigger gap out

01:52:59.640 --> 01:53:06.380
there but even at the far end look at 2021 22 and 2022 23

01:53:06.380 --> 01:53:07.439
we're still covering

01:53:07.439 --> 01:53:11.930
at that point even about 6 million of the debt we're upside

01:53:11.930 --> 01:53:14.479
down the 12 was

01:53:14.479 --> 01:53:19.159
also mentioned long term it's about things about 17 years

01:53:19.159 --> 01:53:19.960
out there because

01:53:19.960 --> 01:53:23.189
that the debt service didn't start right away so it's a 20-

01:53:23.189 --> 01:53:26.479
year revenue bond but

01:53:26.479 --> 01:53:29.699
the debt didn't start to like the third year so there's

01:53:29.699 --> 01:53:31.039
only going to be 17 more

01:53:31.039 --> 01:53:33.800
years at that point in time that 18 million dollars

01:53:33.800 --> 01:53:35.279
disappears so that helps

01:53:35.279 --> 01:53:37.890
the economics at that point we'll go back to you know where

01:53:37.890 --> 01:53:38.800
it probably flips

01:53:38.800 --> 01:53:41.920
the other direction and we're making more money than we're

01:53:41.920 --> 01:53:43.039
then we're taking

01:53:43.039 --> 01:53:46.979
in the other thing is you know be honest with you who can

01:53:46.979 --> 01:53:48.600
predict the markets

01:53:48.600 --> 01:53:51.989
even one year this you know we have to do we have to make a

01:53:51.989 --> 01:53:53.039
projection and

01:53:53.039 --> 01:53:56.840
projections are going to be what they're going to be wrong

01:53:56.840 --> 01:53:59.800
and so yes I think I'm

01:53:59.800 --> 01:54:04.479
going back to Deb's question about that we were going to

01:54:04.479 --> 01:54:05.760
save so much money I

01:54:05.760 --> 01:54:10.199
think that's maybe a better word this is how much we're

01:54:10.199 --> 01:54:11.520
going to be able to cover

01:54:11.520 --> 01:54:14.960
the debt but if we didn't have the deck we'd be at the

01:54:14.960 --> 01:54:16.760
mercy of the markets and

01:54:16.760 --> 01:54:22.289
I what's that piece it I think that's where they were

01:54:22.289 --> 01:54:23.399
trying to make those

01:54:23.399 --> 01:54:27.010
assumptions when we were looking at the deck that's missing

01:54:27.010 --> 01:54:27.960
from here this is

01:54:27.960 --> 01:54:31.869
what it's costing us but what could it have cost us if we

01:54:31.869 --> 01:54:33.079
had to go to the

01:54:33.079 --> 01:54:38.750
market for everything so you know the answer to that yeah

01:54:38.750 --> 01:54:40.399
yeah who knows now

01:54:40.399 --> 01:54:44.020
in our in our forecast that top line is sort of what we're

01:54:44.020 --> 01:54:45.439
getting the value for

01:54:45.439 --> 01:54:48.439
the deck so if we needed that to offset like our load

01:54:48.439 --> 01:54:49.960
purchases that would be

01:54:49.960 --> 01:54:53.350
what we would end up paying is that top line so we did try

01:54:53.350 --> 01:54:54.800
to account for that

01:54:54.800 --> 01:54:59.000
when we did that net income at the bottom but again who can

01:54:59.000 --> 01:55:00.039
predict right

01:55:00.039 --> 01:55:04.680
you know it probably wouldn't take many hours of the

01:55:04.680 --> 01:55:07.560
maximum price at aircott to

01:55:07.560 --> 01:55:10.010
generate a tremendous amount of money and I don't think

01:55:10.010 --> 01:55:10.920
that's going to happen

01:55:10.920 --> 01:55:17.159
this year but there's some folks that think it could and so

01:55:17.159 --> 01:55:18.600
as more and more

01:55:18.600 --> 01:55:21.909
these big units retired so this year we had over 5,000 meg

01:55:21.909 --> 01:55:22.439
awatts of

01:55:22.439 --> 01:55:26.250
conventional power plants retiring who knows what the next

01:55:26.250 --> 01:55:27.479
shoe will drop and

01:55:27.479 --> 01:55:30.500
that that's what's generating the crisis right now in the

01:55:30.500 --> 01:55:31.479
market and it could

01:55:31.479 --> 01:55:34.279
happen again others say hey we can't afford to compete with

01:55:34.279 --> 01:55:35.239
that that cheap

01:55:35.239 --> 01:55:37.850
natural gas can't afford to compete with the deck for

01:55:37.850 --> 01:55:39.960
instance or some of the

01:55:39.960 --> 01:55:43.390
renewables that are coming in and other other generation

01:55:43.390 --> 01:55:47.399
may may disappear so I

01:55:47.399 --> 01:55:52.310
I don't think any of us will know I I think she had a good

01:55:52.310 --> 01:55:53.000
question and I'm

01:55:53.000 --> 01:55:56.119
just trying to put the pieces together so we have did a

01:55:56.119 --> 01:55:56.640
sort of a

01:55:56.640 --> 01:56:01.670
straightforward income cost analysis but the jury's out

01:56:01.670 --> 01:56:03.479
exactly how the deck

01:56:03.479 --> 01:56:07.920
will perform this is certainly more conservative than what

01:56:07.920 --> 01:56:08.560
was probably

01:56:08.560 --> 01:56:14.159
predicted way back when yeah George what can I go back to

01:56:14.159 --> 01:56:16.359
that just a second so

01:56:16.359 --> 01:56:24.689
the revenue the deck revenue at the top goes from you know

01:56:24.689 --> 01:56:26.600
31 million this

01:56:26.600 --> 01:56:30.880
primarily this summer I guess it is yes part year part year

01:56:30.880 --> 01:56:35.960
and then to 19 in

01:56:35.960 --> 01:56:42.189
2022 23 so is that is that a function of the price we think

01:56:42.189 --> 01:56:43.279
we're trying to

01:56:43.279 --> 01:56:46.399
project with the price of it was what that electricity

01:56:46.399 --> 01:56:47.520
generation be worth

01:56:47.520 --> 01:56:51.960
right or is it volume is there a constant volume here is it

01:56:51.960 --> 01:56:53.279
all 3100

01:56:53.279 --> 01:56:56.569
hours no the volume when you read out there's probably only

01:56:56.569 --> 01:56:57.640
half of what it is

01:56:57.640 --> 01:57:01.789
in the 19 timeframe because it reacts to the market and

01:57:01.789 --> 01:57:03.680
when the market says it

01:57:03.680 --> 01:57:09.590
will make a profit it runs and so we basically we got back

01:57:09.590 --> 01:57:10.800
to a normal and

01:57:10.800 --> 01:57:13.539
these are projections that others are making for us and

01:57:13.539 --> 01:57:14.560
helping us when we got

01:57:14.560 --> 01:57:17.399
out there ways we thought it we went back to the market

01:57:17.399 --> 01:57:19.079
that we saw in 15 16

01:57:19.079 --> 01:57:26.060
and 17 much more normal market and who knows and so you're

01:57:26.060 --> 01:57:27.079
not being called on

01:57:27.079 --> 01:57:30.279
as much because the market doesn't need you market does not

01:57:30.279 --> 01:57:31.279
need us and then the

01:57:31.279 --> 01:57:34.989
pricing doesn't support a lot operating a lot less as much

01:57:34.989 --> 01:57:36.720
as a half yeah you're

01:57:36.720 --> 01:57:50.859
not producing at a profit correct I'm just trying to get a

01:57:50.859 --> 01:57:52.359
sense of how

01:57:52.359 --> 01:57:59.229
conservative this is if it's conservative realistic or

01:57:59.229 --> 01:57:59.640
middle of the

01:57:59.640 --> 01:58:07.050
road it gets more conservative as we go out okay and right

01:58:07.050 --> 01:58:09.319
now we think there's

01:58:09.319 --> 01:58:11.460
some haze on the crystal ball but we see it pretty good for

01:58:11.460 --> 01:58:12.359
this summer and next

01:58:12.359 --> 01:58:15.680
year yeah you know based on what everybody is saying and we

01:58:15.680 --> 01:58:16.319
're gonna

01:58:16.319 --> 01:58:19.079
watch it pretty carefully and and I'm sure we'll be back

01:58:19.079 --> 01:58:20.159
talking to you about

01:58:20.159 --> 01:58:23.159
how that deck actually did this summer including all our

01:58:23.159 --> 01:58:24.180
resources you know

01:58:24.180 --> 01:58:26.319
how's the how's the coal plant can operate we're kind of

01:58:26.319 --> 01:58:26.960
counting on it

01:58:26.960 --> 01:58:32.050
also to generate some revenue and and operate and it has

01:58:32.050 --> 01:58:34.000
started up it's going

01:58:34.000 --> 01:58:37.199
through its testing for summer it all seems to be well but

01:58:37.199 --> 01:58:38.239
we really need that

01:58:38.239 --> 01:58:43.630
unit also to run to you know to get the kind of performance

01:58:43.630 --> 01:58:44.399
that we need for our

01:58:44.399 --> 01:58:47.210
budget for this next year so and that's why we talked so

01:58:47.210 --> 01:58:48.359
much about the purchase

01:58:48.359 --> 01:58:55.140
power and some of the and some of the budget stuff got a

01:58:55.140 --> 01:58:57.600
few other slides if I

01:58:57.600 --> 01:59:00.760
jump to them and I'll happen to answer any more questions

01:59:00.760 --> 01:59:02.399
but so here's our our

01:59:02.399 --> 01:59:05.430
position summary we're adding two positions to the deck

01:59:05.430 --> 01:59:06.279
right now it can

01:59:06.279 --> 01:59:10.939
only operating two shifts and we'd like to be able to if we

01:59:10.939 --> 01:59:12.199
find out this summer

01:59:12.199 --> 01:59:14.800
it supports it to add a couple of additional positions

01:59:14.800 --> 01:59:15.880
gives us 24 hour

01:59:15.880 --> 01:59:19.039
coverage right now we'll have to you know run some overtime

01:59:19.039 --> 01:59:19.880
with people in

01:59:19.880 --> 01:59:23.560
order to get to that 24 hour coverage I think normally well

01:59:23.560 --> 01:59:24.960
we're gonna find out

01:59:24.960 --> 01:59:27.840
how how that's needed and then we've shifted a number of

01:59:27.840 --> 01:59:29.000
other positions to

01:59:29.000 --> 01:59:33.560
some centralized city functions about nine other positions

01:59:33.560 --> 01:59:34.399
have moved have

01:59:34.399 --> 01:59:40.670
moved elsewhere a few other slides that you saw probably in

01:59:40.670 --> 01:59:41.159
some of the other

01:59:41.159 --> 01:59:46.050
presentations today and I think Tony touched on these one

01:59:46.050 --> 01:59:46.319
of the biggest

01:59:46.319 --> 01:59:49.439
objectives we have is to implement the Denton renewable

01:59:49.439 --> 01:59:50.760
resource plan get us to

01:59:50.760 --> 01:59:54.560
100% renewable by 2020 everything is on target for that

01:59:54.560 --> 01:59:58.239
where you've recommended

01:59:58.239 --> 02:00:01.239
approval and the council did approve blue bales solar -

02:00:01.239 --> 02:00:02.239
that's going to be a

02:00:02.239 --> 02:00:04.819
great resource for us we're in the final stages of

02:00:04.819 --> 02:00:06.840
evaluating the proposals from

02:00:06.840 --> 02:00:11.399
the New Bronzeville's RFP they look they look really good

02:00:11.399 --> 02:00:12.880
and so we're excited

02:00:12.880 --> 02:00:15.300
about that and then we'll have one other tranche that will

02:00:15.300 --> 02:00:16.159
be looking at some

02:00:16.159 --> 02:00:19.850
coastal wind and we'll be going forward with that here when

02:00:19.850 --> 02:00:21.199
we close the door on

02:00:21.199 --> 02:00:25.720
the on the New Bronzeville's continuing to work on the as

02:00:25.720 --> 02:00:27.560
Tony mentioned our T&D

02:00:27.560 --> 02:00:32.289
program we've as you saw in the report we've downsized our

02:00:32.289 --> 02:00:34.079
capital program we

02:00:34.079 --> 02:00:36.859
tried to live within the financial realities that we have

02:00:36.859 --> 02:00:37.720
we're trying to

02:00:37.720 --> 02:00:40.590
put more cash into it over the budget horizon we're

02:00:40.590 --> 02:00:41.840
actually funding a hundred

02:00:41.840 --> 02:00:45.489
million dollars of cash to carry that budget plus the 24

02:00:45.489 --> 02:00:46.359
million that Tony

02:00:46.359 --> 02:00:51.119
talked about for this year that you'll be asked to approve

02:00:51.119 --> 02:00:52.800
that transfer to us a

02:00:52.800 --> 02:00:57.510
little later in the in your in your program and and and

02:00:57.510 --> 02:00:59.079
really the key here

02:00:59.079 --> 02:01:01.819
is maintaining competitive rates we're actually getting

02:01:01.819 --> 02:01:03.000
more attractive every

02:01:03.000 --> 02:01:06.779
day the competitive suppliers are hurting out there because

02:01:06.779 --> 02:01:07.319
a lot of them

02:01:07.319 --> 02:01:10.729
are not hedged quite as well as we are we're gonna actually

02:01:10.729 --> 02:01:11.760
be hedged quite

02:01:11.760 --> 02:01:15.020
well this year they're gonna be going to the face of that

02:01:15.020 --> 02:01:17.000
heavy market I have one

02:01:17.000 --> 02:01:20.659
company that I'm familiar with very well a private supplier

02:01:20.659 --> 02:01:22.439
that their rate piece

02:01:22.439 --> 02:01:26.039
other than the T&D part has gone up 48% in the last two

02:01:26.039 --> 02:01:27.960
months and I think we're

02:01:27.960 --> 02:01:30.729
gonna start seeing a lot of these other competitors start

02:01:30.729 --> 02:01:31.800
moving to the left of

02:01:31.800 --> 02:01:34.590
us and we're going to be moving to the to the other side of

02:01:34.590 --> 02:01:35.399
the of the rate

02:01:35.399 --> 02:01:41.069
thing and getting much more attractive so that's a key

02:01:41.069 --> 02:01:43.920
driver for us is to keep

02:01:43.920 --> 02:01:48.039
costs down which means we can keep rates down Denton Energy

02:01:48.039 --> 02:01:48.920
Center has reached

02:01:48.920 --> 02:01:52.090
mechanical completion we're running all of the tests right

02:01:52.090 --> 02:01:53.319
now performance tests

02:01:53.319 --> 02:01:56.779
heat rate tests emissions tests preliminary basis look

02:01:56.779 --> 02:01:58.520
really really good

02:01:58.520 --> 02:02:04.750
much more testing to go and we've continued our T&D group

02:02:04.750 --> 02:02:05.680
our engineering

02:02:05.680 --> 02:02:10.180
group to put in into service many more pieces of the T&D

02:02:10.180 --> 02:02:11.960
expansion program we

02:02:11.960 --> 02:02:15.350
actually have a wonderful T&D system out there it's going

02:02:15.350 --> 02:02:16.640
to be a great system

02:02:16.640 --> 02:02:20.159
that's going to stand the stead for Denton for many many

02:02:20.159 --> 02:02:22.479
many years and and

02:02:22.479 --> 02:02:25.239
very proud to be a part of that there's a lot of great work

02:02:25.239 --> 02:02:26.159
that has gone on

02:02:26.159 --> 02:02:28.949
there's been a massive amount accomplished over the last

02:02:28.949 --> 02:02:29.560
five years

02:02:29.560 --> 02:02:32.840
and folks involved in that deserved a quite a bit of credit

02:02:32.840 --> 02:02:34.119
it's it to get

02:02:34.119 --> 02:02:38.560
this thing done and then you heard about us moving to the

02:02:38.560 --> 02:02:39.520
platinum level for

02:02:39.520 --> 02:02:42.909
reliability and that's going to be even more of a focus for

02:02:42.909 --> 02:02:43.880
us going forward

02:02:43.880 --> 02:02:46.489
because we think that's what the customers see and that's

02:02:46.489 --> 02:02:47.199
what they want

02:02:47.199 --> 02:02:55.590
is increased reliability we have budgeted some money to do

02:02:55.590 --> 02:02:56.840
a LED streetlight

02:02:56.840 --> 02:03:01.289
retrofit program talk with the folks just even today we

02:03:01.289 --> 02:03:02.359
want to come back to

02:03:02.359 --> 02:03:05.979
the PUB and get your input of hey where might we spend that

02:03:05.979 --> 02:03:07.359
money we're probably

02:03:07.359 --> 02:03:11.189
looking at main thoroughfares and maybe some other

02:03:11.189 --> 02:03:12.880
residential areas to start

02:03:12.880 --> 02:03:15.449
with but maybe there's some priorities that you have or

02:03:15.449 --> 02:03:16.359
some thoughts you have

02:03:16.359 --> 02:03:19.560
about where increased lighting levels and more efficient

02:03:19.560 --> 02:03:20.640
lighting levels would

02:03:20.640 --> 02:03:26.479
make sense to you just I think that that can really be a

02:03:26.479 --> 02:03:28.159
beneficial program for

02:03:28.159 --> 02:03:33.090
that for the utility and for the customers so I'm gonna

02:03:33.090 --> 02:03:34.399
just move past

02:03:34.399 --> 02:03:42.270
this or actually something that you said during the last

02:03:42.270 --> 02:03:44.279
slide you I think if I

02:03:44.279 --> 02:03:46.300
heard you correctly you mentioned something about the

02:03:46.300 --> 02:03:46.840
preliminary

02:03:46.840 --> 02:03:52.560
emissions testing being underway so if you could clarify

02:03:52.560 --> 02:03:54.159
because there had you

02:03:54.159 --> 02:03:59.449
know had been some confusion about what yeah so if you

02:03:59.449 --> 02:04:01.520
could say you know what

02:04:01.520 --> 02:04:03.850
the difference is between this preliminary emissions

02:04:03.850 --> 02:04:04.600
testing and the

02:04:04.600 --> 02:04:07.590
emissions testing versus just testing the engines because

02:04:07.590 --> 02:04:09.119
we had emailed back

02:04:09.119 --> 02:04:13.560
and forth and yeah if you could just clarify that right and

02:04:13.560 --> 02:04:14.880
maybe we weren't

02:04:14.880 --> 02:04:18.800
clear way back when so when we were talking about the

02:04:18.800 --> 02:04:19.760
engines testing

02:04:19.760 --> 02:04:23.500
starting but testing includes tune-ups for emissions and

02:04:23.500 --> 02:04:24.680
tune-ups of the engine

02:04:24.680 --> 02:04:28.470
so there is an element of that before you run the official

02:04:28.470 --> 02:04:29.840
formal emissions

02:04:29.840 --> 02:04:33.939
tests you do run some some informal testing and we're

02:04:33.939 --> 02:04:35.520
seeing some really

02:04:35.520 --> 02:04:40.180
incredible results of NOx being eliminated from the the a

02:04:40.180 --> 02:04:41.439
irstream as a

02:04:41.439 --> 02:04:45.880
result of this SCR system we have out there so I you know

02:04:45.880 --> 02:04:46.720
we'll see the

02:04:46.720 --> 02:04:48.699
official results and I think I think we're all gonna be

02:04:48.699 --> 02:04:49.479
pretty happy about

02:04:49.479 --> 02:04:53.149
that but let's wait and see what how that turns out okay so

02:04:53.149 --> 02:04:53.920
what so we'll see

02:04:53.920 --> 02:04:56.920
the results of that preliminary those that preliminary

02:04:56.920 --> 02:04:58.199
emissions testing that

02:04:58.199 --> 02:05:01.729
that comes with the testing of the engines I mean I'll tell

02:05:01.729 --> 02:05:03.119
you what I what

02:05:03.119 --> 02:05:09.539
I was told so Chris you're here you can validate so we took

02:05:09.539 --> 02:05:11.760
a look at the air

02:05:11.760 --> 02:05:17.729
emissions right from the deck 88 parts per billion NOx and

02:05:17.729 --> 02:05:18.640
then after the

02:05:18.640 --> 02:05:22.439
treatment by the SCR's less than one part per billion so we

02:05:22.439 --> 02:05:23.680
went from 88 to

02:05:23.680 --> 02:05:27.439
less than one so I've that just seemed like a dramatic

02:05:27.439 --> 02:05:28.920
result but let's see how

02:05:28.920 --> 02:05:32.069
the official test turn out so that kind of gives us some

02:05:32.069 --> 02:05:33.279
indication that the

02:05:33.279 --> 02:05:36.760
engines and the system is working and that's for NOx for

02:05:36.760 --> 02:05:37.920
not you said and did

02:05:37.920 --> 02:05:43.119
you do for VOC's no I don't know do we

02:05:44.199 --> 02:05:52.000
will come up who's this young man

02:05:54.199 --> 02:05:58.340
his limit yes sir we've started the the emission testing so

02:05:58.340 --> 02:05:59.479
if you we sent out

02:05:59.479 --> 02:06:03.460
the the testing plan so all of the eight or nine components

02:06:03.460 --> 02:06:04.560
that are in our air

02:06:04.560 --> 02:06:06.960
permit are all being tested at the same time so at this

02:06:06.960 --> 02:06:07.960
point we've completed

02:06:07.960 --> 02:06:11.460
the hundred percent test which is required by the TCEQ so

02:06:11.460 --> 02:06:12.520
some of the data

02:06:12.520 --> 02:06:15.350
is preliminary you can see it coming out they still have to

02:06:15.350 --> 02:06:16.479
do some calculations

02:06:16.479 --> 02:06:19.699
and make those official and we'll have that in about ten

02:06:19.699 --> 02:06:21.720
days ten days the some

02:06:21.720 --> 02:06:24.750
of the tests the particulate matter actually has to dry in

02:06:24.750 --> 02:06:25.600
a lab for eight

02:06:25.600 --> 02:06:27.710
days so that's why there would be about a two-week

02:06:27.710 --> 02:06:29.039
turnaround till we'll get the

02:06:29.039 --> 02:06:32.159
draft report so we'll get that all back and then we'll

02:06:32.159 --> 02:06:33.560
present that to the PEB

02:06:33.560 --> 02:06:36.319
and the council when we can get on the agenda there but but

02:06:36.319 --> 02:06:37.439
that testing is

02:06:37.439 --> 02:06:41.729
ongoing we'll have about eight more days so we're actually

02:06:41.729 --> 02:06:42.359
testing some of the

02:06:42.359 --> 02:06:45.390
other engine loads in the same manner that we had to do for

02:06:45.390 --> 02:06:46.359
the TCEQ so we'll

02:06:46.359 --> 02:06:49.479
have a full spectrum of tests that we'll be able to report

02:06:49.479 --> 02:06:50.880
that data okay

02:06:50.880 --> 02:06:53.880
thank you thank you that makes sense thanks

02:06:59.000 --> 02:07:02.000
everything's looking good so the numbers are coming in

02:07:02.000 --> 02:07:03.159
there have been no

02:07:03.159 --> 02:07:06.470
concern so we have as you know Wardzilla has to make ready

02:07:06.470 --> 02:07:07.199
they have to make

02:07:07.199 --> 02:07:09.810
right they have to meet the limits there have been no

02:07:09.810 --> 02:07:10.560
issues there they're

02:07:10.560 --> 02:07:14.119
they're coming in at numbers that are that are incredible

02:07:14.119 --> 02:07:15.159
so so they're

02:07:15.159 --> 02:07:19.479
meeting the numbers that's specified in the contract

02:07:19.479 --> 02:07:24.680
excellent things see why I don't have to actually know

02:07:24.680 --> 02:07:25.720
everything because we have

02:07:25.720 --> 02:07:32.600
somebody like Chris on staff okay so I was moving along and

02:07:32.600 --> 02:07:34.119
here's our capital

02:07:34.119 --> 02:07:37.140
plan and I think the rest of this report will talk about

02:07:37.140 --> 02:07:39.000
the capital program

02:07:39.000 --> 02:07:44.550
169 million over the five-year planning horizon 107 of it

02:07:44.550 --> 02:07:46.319
paid for by revenue

02:07:46.319 --> 02:07:50.760
and that means about 35% of it at this point we're looking

02:07:50.760 --> 02:07:51.680
at needing to

02:07:51.680 --> 02:07:54.989
finance and we're gonna try to be minimizing that because

02:07:54.989 --> 02:07:55.880
as was pointed

02:07:55.880 --> 02:07:58.199
out earlier that you know we have a significant debt load

02:07:58.199 --> 02:07:59.920
out there and and

02:07:59.920 --> 02:08:04.380
part of it is not spending as much and what you do spend we

02:08:04.380 --> 02:08:06.319
're trying to write

02:08:06.319 --> 02:08:09.329
the check for and not borrow that money so it's kind of a

02:08:09.329 --> 02:08:11.159
two-part strategy and

02:08:11.159 --> 02:08:14.399
and again I appreciate all the folks at DMA that are

02:08:14.399 --> 02:08:16.000
working with us hard to

02:08:16.000 --> 02:08:20.220
try to recast the program in a way that doesn't adversely

02:08:20.220 --> 02:08:21.119
impact our our

02:08:21.119 --> 02:08:25.380
transmission distribution system and I think we've kind of

02:08:25.380 --> 02:08:26.760
accomplished that at

02:08:26.760 --> 02:08:29.090
this point I'm glad you said that because that was going to

02:08:29.090 --> 02:08:29.920
be my question

02:08:29.920 --> 02:08:33.640
right that's a pretty large reduction but it is not going

02:08:33.640 --> 02:08:34.039
to impact

02:08:34.039 --> 02:08:37.930
reliability right so that's also my concern and I've tried

02:08:37.930 --> 02:08:39.479
to evaluate that

02:08:39.479 --> 02:08:44.130
every different approach that I could and I feel good at

02:08:44.130 --> 02:08:45.520
this point that a

02:08:45.520 --> 02:08:49.090
lot of the program was getting us ready for five ten and

02:08:49.090 --> 02:08:50.640
even twenty years down

02:08:50.640 --> 02:08:55.079
the road and we could you know it just made sense to do a

02:08:55.079 --> 02:08:55.800
lot of things at the

02:08:55.800 --> 02:08:59.079
same time if you could if you had a big bank account and

02:08:59.079 --> 02:08:59.600
there's some

02:08:59.600 --> 02:09:02.829
efficiencies and and just going forward and building a lot

02:09:02.829 --> 02:09:03.960
of substations and

02:09:03.960 --> 02:09:08.520
and lines and so forth but at the end of the day I think at

02:09:08.520 --> 02:09:09.119
the end these are

02:09:09.119 --> 02:09:12.130
this will be a cost-effective way to do this because we're

02:09:12.130 --> 02:09:13.239
not actually paying

02:09:13.239 --> 02:09:17.300
rent on facilities that aren't really critical to serving

02:09:17.300 --> 02:09:18.720
customers for that

02:09:18.720 --> 02:09:22.529
five ten and twenty year period so but there's still a lot

02:09:22.529 --> 02:09:23.319
to do our folks

02:09:23.319 --> 02:09:30.100
will be busy for the next five years so I think we have

02:09:30.100 --> 02:09:31.359
some nice copies of

02:09:31.359 --> 02:09:37.020
these maps Mary so it might be a little difficult to see so

02:09:37.020 --> 02:09:38.279
we've got a couple

02:09:38.279 --> 02:09:40.609
of maps for you this you probably used to this if you've

02:09:40.609 --> 02:09:41.159
had our budget

02:09:41.159 --> 02:09:44.430
presentations in the past these are our feeder extensions

02:09:44.430 --> 02:09:46.840
and improvements so by

02:09:46.840 --> 02:09:50.670
color coding you're looking at the seven different major

02:09:50.670 --> 02:09:51.760
feeder improvement

02:09:51.760 --> 02:09:55.720
programs the one I like is this one this shows our planned

02:09:55.720 --> 02:09:56.800
residential and

02:09:56.800 --> 02:09:59.180
commercial developments sometimes you might be wondering

02:09:59.180 --> 02:10:00.199
hey what's going on

02:10:00.199 --> 02:10:04.159
in Denton and this second map is actually very interesting

02:10:04.159 --> 02:10:04.640
you can look

02:10:04.640 --> 02:10:16.520
at the key on the left and residential commercial programs

02:10:16.520 --> 02:10:17.000
that are being

02:10:17.000 --> 02:10:22.670
planned out there so let's see Jerry anything you want to

02:10:22.670 --> 02:10:23.960
add about what you

02:10:23.960 --> 02:10:29.079
have to you good okay all right well there's a lot of work

02:10:29.079 --> 02:10:30.760
here and there's a

02:10:30.760 --> 02:10:33.560
lot of planning you know our number one priority beyond

02:10:33.560 --> 02:10:34.399
keeping the lights on

02:10:34.399 --> 02:10:38.960
almost every minute of the day is serving new customers so

02:10:38.960 --> 02:10:39.680
if you look at

02:10:39.680 --> 02:10:44.659
the map that that's the red the green and the blue you can

02:10:44.659 --> 02:10:45.279
actually see the

02:10:45.279 --> 02:10:48.159
things that are happening right now all the different new

02:10:48.159 --> 02:10:50.359
customers that our CIP

02:10:50.359 --> 02:10:54.800
budget needs to extend service to those customers and it's

02:10:54.800 --> 02:10:55.359
a lot of

02:10:55.359 --> 02:10:58.600
information in a short period so down the road if there's

02:10:58.600 --> 02:10:59.840
questions and you

02:10:59.840 --> 02:11:02.579
guys want to talk any more about some of these things we

02:11:02.579 --> 02:11:03.399
can we can program that

02:11:03.399 --> 02:11:05.800
for you

02:11:13.000 --> 02:11:14.180
this one's a little more clear up there you've seen this

02:11:14.180 --> 02:11:17.560
before this is our the

02:11:17.560 --> 02:11:22.000
major transmission and substation facilities you know the

02:11:22.000 --> 02:11:23.399
biggest change

02:11:23.399 --> 02:11:28.189
in our system was moving from 69 kb to 138 that was a

02:11:28.189 --> 02:11:28.800
massive undertaking

02:11:28.800 --> 02:11:33.439
required us to upsize a lot of facilities you know replace

02:11:33.439 --> 02:11:34.880
older 69 kb

02:11:34.880 --> 02:11:39.560
substations that were not capable of being run at the 138

02:11:39.560 --> 02:11:42.560
so and as we talked

02:11:42.560 --> 02:11:46.729
before the big purpose of this particular arrangement is

02:11:46.729 --> 02:11:47.720
for Denton to

02:11:47.720 --> 02:11:50.960
be a conduit of power to folks to the east of us when you

02:11:50.960 --> 02:11:51.680
look at the growth

02:11:51.680 --> 02:11:55.720
rates of the you know the Prosper's and the Frisco's and it

02:11:55.720 --> 02:11:56.840
's a pretty amazing

02:11:56.840 --> 02:12:00.609
and I think Denton is slowly moving in that direction our

02:12:00.609 --> 02:12:02.159
growth rates are are

02:12:02.159 --> 02:12:04.779
moving forward as you can tell from that when that one map

02:12:04.779 --> 02:12:05.779
that showed all of the

02:12:05.779 --> 02:12:09.659
new things happening in town so so still a lot of work out

02:12:09.659 --> 02:12:11.479
there I like this thing

02:12:11.479 --> 02:12:15.319
this is in your packet today it's also in the presentation

02:12:15.319 --> 02:12:16.119
if you want to know

02:12:16.119 --> 02:12:18.260
when a certain substation is going to be built what's the

02:12:18.260 --> 02:12:19.119
time frames for that

02:12:19.119 --> 02:12:22.739
you can follow the money you can see Hickory will be

02:12:22.739 --> 02:12:24.720
starting hard toward

02:12:24.720 --> 02:12:27.840
that in 2019 I think Hickory is going to be a major

02:12:27.840 --> 02:12:29.960
important substation that's

02:12:29.960 --> 02:12:33.600
going to help us you know enhance the capacity and

02:12:33.600 --> 02:12:34.920
reliability of the inner

02:12:34.920 --> 02:12:38.310
city in Denton and so I'm looking forward to seeing that

02:12:38.310 --> 02:12:39.279
project moving

02:12:39.279 --> 02:12:46.539
forward I'm gonna ask a question wasn't maybe I'm getting

02:12:46.539 --> 02:12:47.800
my substations mixed

02:12:47.800 --> 02:12:52.079
up wasn't the Hickory gonna be a larger price tag than that

02:12:52.079 --> 02:12:53.479
am I am I mixing up

02:12:53.479 --> 02:13:00.279
my substations oh gotcha

02:13:01.439 --> 02:13:07.359
good point very good question so so all this information is

02:13:07.359 --> 02:13:08.560
there I it wouldn't

02:13:08.560 --> 02:13:11.380
make sense for me probably to go through it at this point

02:13:11.380 --> 02:13:12.600
in time but we're

02:13:12.600 --> 02:13:15.760
always available to you have questions you know shoot them

02:13:15.760 --> 02:13:16.800
to us and we'll get

02:13:16.800 --> 02:13:19.979
you the responses so I say still a lot of a lot of work

02:13:19.979 --> 02:13:21.439
that we're going to be

02:13:21.439 --> 02:13:26.869
undertaking going forward so and with that I'll turn it

02:13:26.869 --> 02:13:30.560
back to Tony

02:13:31.720 --> 02:13:35.340
so mr. chairman and board members just as a reminder we do

02:13:35.340 --> 02:13:37.239
have our consultants

02:13:37.239 --> 02:13:42.949
here they're available if you if you have any questions I

02:13:42.949 --> 02:13:45.800
do want to

02:13:51.439 --> 02:13:57.140
go back to the slide again just to reiterate our

02:13:57.140 --> 02:14:00.159
recommendations today for

02:14:00.159 --> 02:14:05.029
you include the payoff of twenty eight point six million

02:14:05.029 --> 02:14:06.600
dollars in that TMPA

02:14:06.600 --> 02:14:10.699
related callable debt what we call the scrubber debt that

02:14:10.699 --> 02:14:11.880
would be part of the

02:14:11.880 --> 02:14:17.600
recommendation no changes to to the base rates there is a

02:14:17.600 --> 02:14:18.680
recommendation

02:14:18.680 --> 02:14:25.489
recommended suspension of the tcrf that as we talked about

02:14:25.489 --> 02:14:26.880
the impact to

02:14:26.880 --> 02:14:30.069
residential customers is about three and a half percent

02:14:30.069 --> 02:14:31.159
decrease in rates

02:14:31.159 --> 02:14:37.090
maintaining the ECA at zero three four one and in addition

02:14:37.090 --> 02:14:38.239
to that we would

02:14:38.239 --> 02:14:42.289
recommend making a change to these ECA rate ordinance that

02:14:42.289 --> 02:14:43.520
would allow us to

02:14:43.520 --> 02:14:51.659
include the net deck expenses in that calculation so and

02:14:51.659 --> 02:14:54.880
and finally the the

02:14:54.880 --> 02:14:58.069
other recommendation that's included in the forecast is

02:14:58.069 --> 02:15:00.760
that we would cash fund

02:15:00.760 --> 02:15:08.470
certainly all of the distribution related projects for DME

02:15:08.470 --> 02:15:09.720
and then we

02:15:09.720 --> 02:15:13.960
would use a combination of revenue funding and debt funding

02:15:13.960 --> 02:15:14.439
of the

02:15:14.439 --> 02:15:18.039
transmission debt going forward at least within that five-

02:15:18.039 --> 02:15:19.840
year window so that

02:15:19.840 --> 02:15:24.479
that wraps up our recommendations for you certainly if you

02:15:24.479 --> 02:15:25.039
have any questions

02:15:25.039 --> 02:15:30.949
of staff or of our consultants we're here to for that

02:15:30.949 --> 02:15:31.640
purpose

02:15:31.640 --> 02:15:37.869
chairman questions I know that's and that's a lot of a lot

02:15:37.869 --> 02:15:39.600
of information

02:15:39.600 --> 02:15:43.199
this is not the last time we'll see this either before we

02:15:43.199 --> 02:15:44.800
that's correct and just

02:15:44.800 --> 02:15:47.130
so the board knows we will be presenting this to the

02:15:47.130 --> 02:15:49.439
council tomorrow night along

02:15:49.439 --> 02:15:52.449
with the with the budget amendment that we're also

02:15:52.449 --> 02:15:54.520
proposing for you tonight the

02:15:54.520 --> 02:15:56.840
council will also consider that tomorrow we did let the

02:15:56.840 --> 02:15:57.760
council know that we were

02:15:57.760 --> 02:16:00.310
making this presentation and any recommendation from the

02:16:00.310 --> 02:16:01.000
board we would

02:16:01.000 --> 02:16:05.739
let them advise them of that tomorrow okay yes I like to

02:16:05.739 --> 02:16:06.800
ask the consultants

02:16:06.800 --> 02:16:10.560
just because because they're here I'd be curious to know

02:16:10.560 --> 02:16:13.359
your take on the role of

02:16:13.359 --> 02:16:20.569
the deck in debt reduction versus the role of our solar and

02:16:20.569 --> 02:16:22.760
wind contracts and

02:16:22.760 --> 02:16:29.319
paying into that that debt reduction

02:16:31.000 --> 02:16:40.040
good evening specifically with regard to the debt reduction

02:16:40.040 --> 02:16:40.760
that's not something

02:16:40.760 --> 02:16:44.479
that we've looked at we were asked to look at projections

02:16:44.479 --> 02:16:46.600
for deck revenue and

02:16:46.600 --> 02:16:50.059
the net effect of that so that's what we looked at and we

02:16:50.059 --> 02:16:51.280
had some discussions

02:16:51.280 --> 02:16:56.000
with regard to financial projections related to market

02:16:56.000 --> 02:16:57.040
expectations and

02:16:57.040 --> 02:17:02.959
forward prices going out into time so any translation of

02:17:02.959 --> 02:17:04.680
that into the effect

02:17:04.680 --> 02:17:07.000
on debt is something that your staff has done so that wasn

02:17:07.000 --> 02:17:07.879
't that wasn't sort of

02:17:07.879 --> 02:17:17.569
an arm-per-tip yeah yes so what so what what do you see as

02:17:17.569 --> 02:17:19.719
the cycle for the

02:17:19.719 --> 02:17:23.899
life cycle of this kind of gas plant in terms of

02:17:23.899 --> 02:17:26.879
profitability that depends on

02:17:26.879 --> 02:17:32.549
where prices are going to go in our discussions with the

02:17:32.549 --> 02:17:34.360
staff you know one

02:17:34.360 --> 02:17:37.360
of the points we made is that this is probably the greatest

02:17:37.360 --> 02:17:37.879
period of

02:17:37.879 --> 02:17:41.850
uncertainty we've seen in the market about 20 years George

02:17:41.850 --> 02:17:43.000
had indicated

02:17:43.000 --> 02:17:46.319
you've had 5,000 megawatts of generation that has been

02:17:46.319 --> 02:17:47.319
retired or threatened to

02:17:47.319 --> 02:17:50.860
be retired a lot of changeover in the technology I think

02:17:50.860 --> 02:17:51.600
this is a point that

02:17:51.600 --> 02:17:55.530
Neil has made recently which is that 20 years ago you had a

02:17:55.530 --> 02:17:56.719
substantial change

02:17:56.719 --> 02:18:00.780
in technology when gas was coming in to really compete with

02:18:00.780 --> 02:18:02.200
coal now you've got

02:18:02.200 --> 02:18:05.809
renewables coming in competing with gas and coal is going

02:18:05.809 --> 02:18:06.559
out so that

02:18:06.559 --> 02:18:11.000
uncertainty makes it very challenging to do financial

02:18:11.000 --> 02:18:13.000
projections and if you look

02:18:13.000 --> 02:18:15.409
at some of the projections that were in the in the

02:18:15.409 --> 02:18:17.000
presentation those reflect

02:18:17.000 --> 02:18:20.959
sort of the lower gas case that was in the Brattle report

02:18:20.959 --> 02:18:22.120
the lower gas case

02:18:22.120 --> 02:18:28.520
that was in our renewable resource presentation as well so

02:18:28.520 --> 02:18:29.479
I think that's

02:18:29.479 --> 02:18:34.909
something that is likely to be sustained there's a lot of

02:18:34.909 --> 02:18:36.159
gas that doesn't even

02:18:36.159 --> 02:18:39.639
have a place to go right now in West Texas because so much

02:18:39.639 --> 02:18:40.719
the the pervian is

02:18:40.719 --> 02:18:45.250
just a huge activity of new drilling so I think that low

02:18:45.250 --> 02:18:46.840
gas case that we had

02:18:46.840 --> 02:18:52.469
integrated into our presentation in our projections I think

02:18:52.469 --> 02:18:54.000
is the best case to

02:18:54.000 --> 02:18:57.120
be considered going forward right now you've got this

02:18:57.120 --> 02:18:58.239
uncertainty a lot of

02:18:58.239 --> 02:19:01.239
fear in the market that's driving prices up over the next

02:19:01.239 --> 02:19:02.239
couple of years in the

02:19:02.239 --> 02:19:06.719
foreign markets that can always happen again but I think

02:19:06.719 --> 02:19:07.920
how George's

02:19:07.920 --> 02:19:10.659
projections had gone to resolving to a lower gas case I

02:19:10.659 --> 02:19:11.559
think is the best

02:19:11.559 --> 02:19:16.920
estimation going forward okay thank you thanks a lot

02:19:21.200 --> 02:19:27.440
Mr. Chairman any other questions or questions from anyone

02:19:27.440 --> 02:19:30.120
any suggestions

02:19:30.120 --> 02:19:35.040
directions we want to give at this point

02:19:37.239 --> 02:19:42.680
I think do you want to see these easy come back more often

02:19:42.680 --> 02:19:43.239
in the future

02:19:43.239 --> 02:19:44.870
yes ma'am certainly our recommendation is that that would

02:19:44.870 --> 02:19:45.399
come back to you

02:19:45.399 --> 02:19:49.280
quarterly and also to the council on a quarterly basis yes

02:19:49.280 --> 02:19:51.079
correct yeah I think

02:19:51.079 --> 02:19:58.959
that probably has been the ECA has been such a stable at a

02:19:58.959 --> 02:20:00.159
such a stable level

02:20:00.159 --> 02:20:03.170
for so long and it really had didn't did not need to be

02:20:03.170 --> 02:20:05.600
addressed often and I

02:20:05.600 --> 02:20:09.280
think that's a good suggestion I think we'll see a lot more

02:20:09.280 --> 02:20:09.479
volatility so we

02:20:09.479 --> 02:20:17.239
may be forced to look at it okay all right thank you Tony

02:20:17.239 --> 02:20:19.520
thank you

02:20:22.360 --> 02:20:28.290
bonus points for anybody who can refold the maps I could

02:20:28.290 --> 02:20:34.479
very good okay okay

02:20:35.719 --> 02:20:39.680
so we can now go into the regular meeting unless I'll let y

02:20:39.680 --> 02:20:41.000
'all make the

02:20:41.000 --> 02:20:44.649
call if you want to take a break and then come back in

02:20:44.649 --> 02:20:46.479
about 10 minutes or

02:20:46.479 --> 02:20:54.750
if y'all just want to push through the agenda push through

02:20:54.750 --> 02:20:57.600
okay very good okay

02:20:57.600 --> 02:21:05.239
in our regular meeting then we have a consent agenda we

02:21:05.239 --> 02:21:08.559
have four items on the

02:21:08.559 --> 02:21:13.309
consent agenda for consideration is there any member of the

02:21:13.309 --> 02:21:15.000
board that would

02:21:15.000 --> 02:21:18.629
like to have any of these items pulled for individual

02:21:18.629 --> 02:21:20.959
consideration don't throw

02:21:20.959 --> 02:21:30.360
anything at me B it's a quick question okay all right so B

02:21:30.360 --> 02:21:33.399
is pulled any

02:21:33.399 --> 02:21:43.120
individual member who would like to pull items a C or D off

02:21:43.120 --> 02:21:46.079
the consent okay

02:21:46.079 --> 02:21:50.959
hearing none is there a motion then for the remaining

02:21:50.959 --> 02:21:54.059
consent agenda items a C

02:21:54.059 --> 02:21:59.729
and D move approval have a motion and the second any

02:21:59.729 --> 02:22:01.799
discussion all in favor

02:22:01.799 --> 02:22:09.229
say aye any opposed okay item B you said who's here for B

02:22:09.229 --> 02:22:11.680
anybody here for B it's

02:22:11.680 --> 02:22:16.209
a really quick question Ken the price differential was so

02:22:16.209 --> 02:22:17.920
huge how do we know

02:22:17.920 --> 02:22:23.879
they can really do it for 297,000

02:22:29.319 --> 02:22:33.790
those are usually always a mystery for all of us also but

02:22:33.790 --> 02:22:35.479
this company in

02:22:35.479 --> 02:22:40.059
city form was formed in 1980 and they have done millions

02:22:40.059 --> 02:22:41.559
and millions of feet

02:22:41.559 --> 02:22:45.600
of this all over the US and outside the country so we have

02:22:45.600 --> 02:22:48.159
absolutely no doubt

02:22:50.079 --> 02:22:56.600
and they're from Missouri I'll move approval okay

02:22:56.600 --> 02:23:00.569
quick question was answered and Susan's made a motion to

02:23:00.569 --> 02:23:01.700
approve is there a

02:23:01.700 --> 02:23:08.639
second second Charlie any discussion all in favor say aye

02:23:08.639 --> 02:23:13.159
any opposed same side

02:23:13.159 --> 02:23:16.979
okay under items for individual consideration we have the

02:23:16.979 --> 02:23:18.200
minutes of the

02:23:18.200 --> 02:23:25.340
public utility board of May the 7th 2018 that it part of

02:23:25.340 --> 02:23:27.559
your backup are there

02:23:27.559 --> 02:23:35.940
any changes questions suggestions on those minutes hearing

02:23:35.940 --> 02:23:37.680
none is there a

02:23:37.680 --> 02:23:43.350
motion then to approve the minutes as presented recommend

02:23:43.350 --> 02:23:44.959
approval and a

02:23:44.959 --> 02:23:49.600
second second and a second any discussion on those all in

02:23:49.600 --> 02:23:50.239
favor say aye

02:23:50.239 --> 02:23:55.940
any opposed same sign item number B which is to consider a

02:23:55.940 --> 02:23:57.680
recommendation to

02:23:57.680 --> 02:24:01.469
adopt an ordinance of the city of Denton Texas amending the

02:24:01.469 --> 02:24:03.760
fiscal year 2017 18

02:24:03.760 --> 02:24:07.409
budget an annual program of services of the city of Denton

02:24:07.409 --> 02:24:08.399
to allow for an

02:24:08.399 --> 02:24:12.309
adjustment to the electric fund of 24 million dollars for

02:24:12.309 --> 02:24:13.280
the purpose of

02:24:13.280 --> 02:24:18.700
funding capital improvement projects and solid waste fund

02:24:18.700 --> 02:24:21.399
of seven hundred and seventy four thousand six hundred

02:24:21.399 --> 02:24:23.100
eighty two dollars for the purpose of funding a reimburse

02:24:23.100 --> 02:24:27.879
ment to electric declaring a municipal purpose providing a

02:24:27.879 --> 02:24:31.350
severability clause providing an open meetings clause

02:24:31.350 --> 02:24:32.840
providing for an effective

02:24:32.840 --> 02:24:37.440
date so mr. chairman Tony pointed director finance just

02:24:37.440 --> 02:24:38.159
really quickly we

02:24:38.159 --> 02:24:42.979
talked at length about the 24 million dollars we would have

02:24:42.979 --> 02:24:44.280
to amend the

02:24:44.280 --> 02:24:48.209
budget to have the authority to then transfer that from the

02:24:48.209 --> 02:24:49.479
operating budget

02:24:49.479 --> 02:24:53.399
to the capital improvement program if part of your backup

02:24:53.399 --> 02:24:54.360
we've included with

02:24:54.360 --> 02:24:57.360
you the detailed listing of the projects that would be

02:24:57.360 --> 02:24:59.399
funded total of 34 million

02:24:59.399 --> 02:25:04.229
the remaining 10 million would come from the the excess

02:25:04.229 --> 02:25:06.159
revenue bonds from the

02:25:06.159 --> 02:25:09.940
deck to complete that that program of 34 million many of

02:25:09.940 --> 02:25:11.239
those projects are

02:25:11.239 --> 02:25:14.440
actually already underway and are in desperate need of this

02:25:14.440 --> 02:25:15.799
funding in

02:25:15.799 --> 02:25:20.840
addition this budget amendment also amends the solid waste

02:25:20.840 --> 02:25:22.159
fund to have the

02:25:22.159 --> 02:25:26.190
appropriation to be able to transfer the portion of the

02:25:26.190 --> 02:25:28.760
substation project that

02:25:28.760 --> 02:25:31.920
does not include these missus primarily the land back over

02:25:31.920 --> 02:25:33.040
to the electric fund

02:25:33.040 --> 02:25:36.239
slightly or slightly over seven hundred thousand dollars

02:25:36.239 --> 02:25:38.200
and just so the board

02:25:38.200 --> 02:25:41.350
knows that's already factored into the performer for

02:25:41.350 --> 02:25:42.959
electric again a small

02:25:42.959 --> 02:25:47.430
amount but it's already part of that as well so if you have

02:25:47.430 --> 02:25:48.399
any questions I'll

02:25:48.399 --> 02:25:52.280
be happy to answer any questions you may have just a

02:25:52.280 --> 02:25:54.559
question on the the original

02:25:54.559 --> 02:26:00.440
54 million dollars what was the what was the plan as far as

02:26:00.440 --> 02:26:01.120
how much of that was

02:26:01.120 --> 02:26:05.120
debt how much was revenue funded on that the entire amount

02:26:05.120 --> 02:26:06.399
would have been CEOs

02:26:06.399 --> 02:26:11.520
okay that was the plan so we're basically taking that

02:26:11.520 --> 02:26:12.799
essentially to 10

02:26:12.799 --> 02:26:19.280
million we're training we're using the decks CEO that's 10

02:26:19.280 --> 02:26:19.959
million of that

02:26:19.959 --> 02:26:24.510
revenue bonds revenue bonds yes sir we would use that to

02:26:24.510 --> 02:26:29.659
fund that CIP okay so

02:26:29.659 --> 02:26:33.159
that's a net savings of 44 million dollars in debt

02:26:33.159 --> 02:26:36.559
basically that's correct

02:26:36.559 --> 02:26:44.079
all right any other questions no is there a motion then on

02:26:44.079 --> 02:26:47.659
item B

02:26:47.659 --> 02:26:55.020
approval we have a motion and to approve in a second any

02:26:55.020 --> 02:26:57.840
discussion all in favor

02:26:57.840 --> 02:27:05.040
say aye opposed same sign okay item C is to consider

02:27:05.040 --> 02:27:06.840
recommending adoption of an

02:27:06.840 --> 02:27:10.350
ordinance in the city of Denton Texas the Texas Home Rule

02:27:10.350 --> 02:27:11.680
municipal corporation

02:27:11.680 --> 02:27:15.420
authorizing the city manager to execute a contract for odor

02:27:15.420 --> 02:27:16.319
neutralizer

02:27:16.319 --> 02:27:20.270
chemicals with probe America ink for the landfill providing

02:27:20.270 --> 02:27:21.319
for the expenditure

02:27:21.319 --> 02:27:26.149
funds therefore and providing an effective date in the

02:27:26.149 --> 02:27:27.799
three-year not to

02:27:27.799 --> 02:27:31.760
exceed amount of 130 thousand dollars good evening members

02:27:31.760 --> 02:27:32.239
of the board my

02:27:32.239 --> 02:27:34.979
name is Ethan Cox I'm the director of solid waste this is

02:27:34.979 --> 02:27:35.959
an item that we had

02:27:35.959 --> 02:27:38.290
brought forward for your consideration about a month ago it

02:27:38.290 --> 02:27:39.200
's backed by popular

02:27:39.200 --> 02:27:42.200
demand I appreciate you have some very informative

02:27:42.200 --> 02:27:43.879
questions last time and I

02:27:43.879 --> 02:27:47.059
apologize for not being prepared to answer those so we did

02:27:47.059 --> 02:27:47.719
go back and

02:27:47.719 --> 02:27:52.340
review some of the safety and concerns regarding the use of

02:27:52.340 --> 02:27:53.680
this chemical the

02:27:53.680 --> 02:27:57.120
chemical again is is aero pure it's brought forward by a

02:27:57.120 --> 02:27:58.559
firm known as probe

02:27:58.559 --> 02:28:01.559
America what I've included in your packet tonight is the

02:28:01.559 --> 02:28:02.440
safety data sheet

02:28:02.440 --> 02:28:04.979
that that's basically put together for any firm that

02:28:04.979 --> 02:28:06.440
manufacturers or utilizes

02:28:06.440 --> 02:28:09.479
chemicals there's a few sections in there that if you're

02:28:09.479 --> 02:28:10.399
interested I would

02:28:10.399 --> 02:28:13.790
emphasize kind of taking a look at namely that section two

02:28:13.790 --> 02:28:14.639
that is basically

02:28:14.639 --> 02:28:17.379
identifying is this a hazardous substance it is most

02:28:17.379 --> 02:28:18.799
definitely not in

02:28:18.799 --> 02:28:21.879
addition sections eight which requires personal protection

02:28:21.879 --> 02:28:22.760
for handling this

02:28:22.760 --> 02:28:26.000
material this material requires no personal protection for

02:28:26.000 --> 02:28:26.879
use of our staff

02:28:26.879 --> 02:28:29.879
and then section 11 which is all the toxicological

02:28:29.879 --> 02:28:31.639
information just to kind

02:28:31.639 --> 02:28:35.270
of briefly go through some of the high points here the

02:28:35.270 --> 02:28:36.680
arrow pure mixture is

02:28:36.680 --> 02:28:40.530
100% biodegradable it's non carcinogenic non-acid non

02:28:40.530 --> 02:28:42.479
acidic non hazardous

02:28:42.479 --> 02:28:45.479
non-irritant it's also safe for use in the food industry

02:28:45.479 --> 02:28:46.959
there was one other

02:28:46.959 --> 02:28:50.770
firm that put in for this I do not have the SDS sheet for

02:28:50.770 --> 02:28:52.040
them but one of the

02:28:52.040 --> 02:28:55.059
reasons our firm selected arrow pure is because it was much

02:28:55.059 --> 02:28:55.920
safer than what

02:28:55.920 --> 02:28:59.309
we've used in the past and they feel confident that this is

02:28:59.309 --> 02:29:00.280
the best option

02:29:00.280 --> 02:29:03.809
for us moving forward so with that I'll be happy to stand

02:29:03.809 --> 02:29:04.559
with stand for any

02:29:04.559 --> 02:29:08.559
questions that you might have so it was more pure

02:29:10.559 --> 02:29:15.569
appropriate in this case is this product aerated typically

02:29:15.569 --> 02:29:17.040
what we'll do you do

02:29:17.040 --> 02:29:19.819
have some some machines on site that can spray this into

02:29:19.819 --> 02:29:20.959
the air a lot of times

02:29:20.959 --> 02:29:22.870
we mix it with the water for our water trucks so we're

02:29:22.870 --> 02:29:23.879
doing dust suppression

02:29:23.879 --> 02:29:27.270
and odor suppression at the same time we found with some of

02:29:27.270 --> 02:29:28.440
the the stuff that

02:29:28.440 --> 02:29:30.389
we were spraying into the air it just wasn't quite as

02:29:30.389 --> 02:29:31.319
effective as we would

02:29:31.319 --> 02:29:34.760
like so essentially what we're doing is a two-prong

02:29:34.760 --> 02:29:36.799
approach we have the

02:29:36.799 --> 02:29:40.750
perimeter wall or the perimeter fence that sprays some mist

02:29:40.750 --> 02:29:41.879
to try to knock it

02:29:41.879 --> 02:29:45.319
down on the perimeter this is used more in direct contact

02:29:45.319 --> 02:29:46.120
with the waste and on

02:29:46.120 --> 02:29:49.920
the roads surrounding the active working face

02:30:01.399 --> 02:30:06.440
in terms of the MSDS that though the SDS my understanding

02:30:06.440 --> 02:30:08.079
and I may have to

02:30:08.079 --> 02:30:11.209
refer to dr. Banks on this a little bit most of the SDS is

02:30:11.209 --> 02:30:12.079
done through

02:30:12.079 --> 02:30:16.270
laboratory testing I believe in the SDS sheet that you have

02:30:16.270 --> 02:30:17.799
there or the packet

02:30:17.799 --> 02:30:21.000
that I gave you there are some testing firms in the back

02:30:21.000 --> 02:30:22.760
part of that so

02:30:22.760 --> 02:30:26.639
laboratory reports etc that are included in that you see

02:30:26.639 --> 02:30:29.799
that in your packet

02:30:31.440 --> 02:30:35.500
it is this this firm the firm is based out of the UK Aerop

02:30:35.500 --> 02:30:37.760
ure America is their

02:30:37.760 --> 02:30:43.690
North American arm of the organization I notice we first

02:30:43.690 --> 02:30:46.280
just berry yes it's kind

02:30:46.280 --> 02:30:56.129
of like going to the dentist you get a mix of I don't know

02:30:56.129 --> 02:30:59.479
if there is a taste

02:30:59.479 --> 02:31:04.250
taste testing or anything like that but we'll give it a

02:31:04.250 --> 02:31:06.680
shot I just want to say

02:31:06.680 --> 02:31:09.030
thank you very much for going back and doing that going

02:31:09.030 --> 02:31:09.680
through that due

02:31:09.680 --> 02:31:13.319
diligence I really appreciate it it does relieve my mind

02:31:13.319 --> 02:31:14.600
quite a bit certainly

02:31:14.600 --> 02:31:17.200
appreciate that

02:31:22.120 --> 02:31:25.120
to prove

02:31:26.520 --> 02:31:42.440
second Mr. Chairman members of the board I'll be real quick

02:31:42.440 --> 02:31:43.799
really the only thing

02:31:43.799 --> 02:31:49.819
to report is in your in your agenda packet is the PCW RP

02:31:49.819 --> 02:31:51.479
wet article that

02:31:51.479 --> 02:31:54.219
was provided by PS Aurora if you have any questions mr. or

02:31:54.219 --> 02:31:54.959
is here to answer

02:31:54.959 --> 02:31:59.479
those but other than that nothing else to report

02:32:25.479 --> 02:32:27.020
very good closing items and a section 551 to take a look at

02:32:27.020 --> 02:32:40.239
the public specific

02:32:40.239 --> 02:32:44.399
facts and information the recitation policy or accept the

02:32:44.399 --> 02:32:45.920
proposals place the

02:32:45.920 --> 02:32:49.520
matter on the agenda for upcoming

02:32:52.120 --> 02:32:57.120
saw the ACM for future

02:32:59.520 --> 02:33:03.680
guess for me I would just like to see and for the public

02:33:03.680 --> 02:33:06.000
the results of their

02:33:06.000 --> 02:33:09.469
preliminary emissions testing that they've done with the

02:33:09.469 --> 02:33:10.479
with the engine

02:33:10.479 --> 02:33:14.500
testing you know item by item knocks VOCs and that would

02:33:14.500 --> 02:33:15.239
just be interesting

02:33:15.239 --> 02:33:34.840
be good to see for the public thanks I move we adjourn

02:33:34.840 --> 02:33:38.840
I'll second