WEBVTT

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Public utility board meeting to order. First we have on the

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agenda we have work

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session three items there so we'll start with item A which

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is to receive a

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report hold a discussion and give staff direction on on the

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proposed water

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wastewater and miscellaneous rates for fiscal year 2018-

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2019.

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Good morning PEP members my name is Nick Vincent I'm the

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utility business manager

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for the city of Denton and I have two presentations for you

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the first one is

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the water rate presentation the second is the wastewater

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rate presentation. I have a

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little bit of history the 18-19 water and wastewater

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budgets and CIPs were

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presented to PUB on May 7th and May 21st the PUB gave staff

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direction to

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proceed with a 2% rate decrease for water and a 5% rate

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decrease for

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wastewater. Following that meeting in June staff received

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direction from City

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Council to proceed with a 0% rate increase or decrease for

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water and a 5%

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decrease for wastewater. Staff has taken the more

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conservative approach and

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recommending a 0% for water and a 5% decrease for

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wastewater so that's the

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way the presentation is set up today for you. As I stated

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there is no adjustments

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to the water residential or commercial rates staff is

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recommending a 3%

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increase to wholesale rates based on the cost of service

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model. This is the

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wholesale rate comparison here basically we have it broken

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into categories the

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first one being the wholesale raw water rate it has a

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facility charge the

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current charge is $280.31 is proposed to go to 288.72 the

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demand to charge per

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annual cost is 648,426 which is reposed to 667.879 the

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volume charge is

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based on thousand gallons volumes is 59 cents and proposed

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to go to 61 cents.

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The wholesale raw water has rate is 85% of the Dallas rate

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and this is set off

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of the Dallas rate it's 85% of that rate currently the 85%

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of that is 0.867

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staff will update that when the Dallas rate becomes

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available it's not

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available right now. The wholesale wall raw water pass-

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through rate is based off

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the consumer price index of the month of June it is not

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published yet as soon as

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it's published we will update this rate it's currently it

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stands at 0.0266.

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This is the residential water rate comparison chart here it

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shows us

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compared to other cities as you can see here sorry it's a

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little bit out of focus

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but let me see if you can see my pointer you can see the

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current rate that's

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actually in yellow here this is where we're recommending

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that rates stay with

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no decrease or increase.

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This is the commercial water rate comparison chart on 50,

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000 gallons

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based off a two-inch meter you can see the city of Denton

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yellow just about the

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middle of the group so there is no change to that proposed.

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This is the

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commercial water based on 200,000 gallons of the two-inch

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meter excuse me

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you can see us in the yellow just about the middle of the

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group also. If there's any

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questions please stop me anytime and I will answer them.

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That concludes the

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water presentation like I said there is no rate decrease or

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increase proposed

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for water just a 3% wholesale increase on the wholesale

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side.

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Anybody getting questions on the water? So on the versus

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the two cent decrease

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before where was where does that where does that show up in

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the budget as far

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as is that going to the capital's project side? So

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basically the way the

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water fund the budget was looking before is we were showing

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a 2% decrease in

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water basically is showing a drawdown in the fund balance

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and if we take that 2%

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out we're actually just proposing to drop the fund balance

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that much less so

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instead of taking out a fund balance yeah so it didn't

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reduce any capital

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projects and answer your question. Okay yeah.

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All right. Okay now we will proceed to wastewater it's a

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couple different

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options we need PUB to consider in wastewater. Okay so as I

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said PUB during

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the May 21st meeting gave staff direction to proceed with a

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5% rate

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decrease for wastewater. Council in June actually gave the

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same direction to

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proceed with a 5% rate decrease. That's what we have in

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front of you today.

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There's two options to consider the 5% rate decrease.

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Option one is a modified

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cost of service option and option two is a 5% across the

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board reduction. I'll be

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happy to walk us through both of them here. Option one

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reduces the facility

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charge less and reduces the volume charge more. Option two

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does the exact

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opposite. Option one is based on consultants

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recommendations of keeping

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the facility charge somewhat level not adjusting it too

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much moving forward. So

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your facility charge for inside customers currently the

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current rate is

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$11.25 you can see right here and it is proposed in option

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one to go to $11.00

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option two would take it to 1060. Outside customers

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currently is 1295 for the

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facility charge proposed to go to 1275 or 1230 based on

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your guidance. The

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residential volume charge currently is 405 for an inside

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customer which you can

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see here and is proposed to go to 380 and then 385 under

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option two. Outside

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customers 465 proposed to go to 440 under option one and 4

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40 under option two.

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Next slide. This is an average residential monthly bill

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comparison.

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Staff is recommending decreasing the wastewater minimum

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charge from 6,000

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gallons to 5,400 gallons. This is based off historical data

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that staff has been

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and did analysis on and these charges basically the current

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fee for

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residential bill to expect on the wastewater side to be $33

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.12

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under the option one scenario which is cost of service it

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would take it to 3152

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and then option two take it to 3139 which is 5% across the

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board.

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So option one would be about a $1.60 decrease option two

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would be about $1.73.

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This is the residential wastewater rate comparison chart.

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It shows the city of

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Denton current rate here in the yellow where we currently

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are. This here would

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be under option one the 5% cost of service decrease option.

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It would take us

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here to the orange so it actually move us toward the first

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third of the graph.

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This is the commercial rate comparison same scenario as

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residential there's

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two different options for PB to consider. Option one is the

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modified cost of

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service option. Option two is the 5% across the board. The

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facility charge for

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a commercial customer currently is 2675 proposed to go to

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2650 under option one

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or 2540 under option two. The outside facility charge would

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be 3075 currently

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proposed to go to 3050 under option one or 2920 under

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option two. Moving down the

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page here the commercial volume charge inside customers

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currently is 515 under

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option one the cost of service option is 485 proposed and

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then 490 into the 5%

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across the board. The outside city is 585 which is a little

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bit higher inside

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proposed to go to 550 and then 560 under option two. If

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anybody's any questions

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please feel free to stop me I'll keep moving along here.

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The commercial monthly

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bill comparison we we look at this on 50,000 gallons we

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also look at it on

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200,000 gallons. Currently a 50,000 gallon customer can

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expect to pay $284.25

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under option one it would go to 269 under option two it'd

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go to 270 40.

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200,000 gallon customer currently would be 1056.75 cents.

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Option one would take

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it to $996.50. Option two would take it to $1,005.40.

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This is the commercial wastewater comparison based on 50,

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000 gallons you

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can see the city of Denton currently is here in the yellow

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the race we just

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looked at and then the 5% decrease would take us to the

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orange so it'd move us to

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the left a little bit.

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This is a commercial wastewater rate comparison on 200,000

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gallons you can

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see our current rate here in the yellow and then again it

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could be here in the

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orange would be but the proposed is a 5% decrease under

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option one. The on-site

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sanitary sewer facility permit fees these fees have not

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been updated since

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2006 staff started doing analysis to look at the cost of

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service of these

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permit fees and it is recommended these actually increase

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instead of decrease.

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Like I said they have an increase since 2006 cost have

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increased so the aerobic

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treatment system is currently $410 we're proposing to take

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it to 500. The

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conventional treatment permit fee is 210 we're proposing to

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take it to 300. The

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repair alterations and extensions currently is 50 we're

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proposing to take

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it to 200 and the re-inspection fee is a flat fee currently

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based on the permit

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type of 100 or 200 and we're currently planning to take it

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to 50% of the permit

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fee. Those are the proposals what we have some graphs

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following this up that'll

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show us where we stand with other cities that way you you

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'll kind of know where

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that aligns with those cities. So what causes what instance

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is a

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re-inspection fee is that after repairs? I probably would

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have to ask staff to

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maybe Deborah if you could come up here and answer that

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question for us.

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Good morning for I'm Deborah Vieira with environmental

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services. The

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re-inspection fees are if by any chance staff shows up to

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the to the site to

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conduct inspections but they are not being repaired

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accordingly or they have

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not the work done then we would have to go back before they

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can actually put all

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that on the ground so that that would be their inspection

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fee.

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All right then we'll go back or go forward here to the rate

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comparisons. So

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you can see currently here in the city of Denton they're

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both red but this is

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the current rate here for the aerobic treatment here. The

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proposal will take

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us over here to just above crossroads. The conventional

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permit fee

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comparison here you can see the city of Denton currently is

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right here towards

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the lower end. The proposal will take us right here just

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above crumb. The altar

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extend repair fee comparison you can see the city of Denton

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currently down here

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right now. The proposal will move us up a couple here just

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above crossroads. Any

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questions and I also want to mention that it's not in the

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presentation here

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but staff has made changes to the residential delinquent

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service fee. It is

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changed from 46 to 23 and then the residential reconnection

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charge has been

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reduced from 61 to 30 and those reductions were a result of

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the

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installation the smart meters through DMV. That was

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something that staff was

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you know given direction by PB and council to install and

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it result to

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reduce the cost of service of those things. That concludes

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water and

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wastewater. Any questions to be happy to answer? Do you

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have any projections for

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the amount of revenues total that will change how the

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revenues will change as

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far as collection goes total? So on the for the five

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percent reduction or for

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any of it okay so for mostly the reductions okay there you

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know while a

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few dollars off a residential bill is great it's not it's

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really not

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substantial and so I wonder if there's really if you're not

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you know if we're

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gonna lose a significant amount of revenue by offering a

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few dollars off

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the bill it may be that we can do more for our

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infrastructure by using that

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money instead of giving this five percent discount. Right

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good question.

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The five percent reduction in the wastewater rates is about

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1.2 million

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dollars in revenue. That's what it equates to. Okay okay.

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Well we are looking for

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recommendations in the PB today too and that's one thing I

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did forget option one

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or option two on the wastewater side and I can back up to

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them. Option one again

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was the cost of service option. Option two was the five

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percent across the board.

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So if we could get recommendations in PB today to which

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which option to proceed

00:13:59.600 --> 00:14:03.840
with. We will come back to the PB on July 23rd to seek

00:14:03.840 --> 00:14:05.240
approval of the rate

00:14:05.240 --> 00:14:09.990
ordinances in the budgets. I have one more question about

00:14:09.990 --> 00:14:10.720
it's kind of off

00:14:10.720 --> 00:14:15.159
topic a little bit but for your on-site sanitary for those

00:14:15.159 --> 00:14:16.320
are septic tanks. Yes

00:14:16.320 --> 00:14:21.720
sir. Do we know like I know that we you know we annex

00:14:21.720 --> 00:14:23.120
property sometime and I

00:14:23.120 --> 00:14:26.669
think that's when we run into several of those. Do we have

00:14:26.669 --> 00:14:28.679
a good do we know how

00:14:28.679 --> 00:14:32.730
many we have in our city really? Let me ask Deborah to come

00:14:32.730 --> 00:14:33.559
back up here she

00:14:33.559 --> 00:14:36.629
would know that answer. I know that's a little bit off

00:14:36.629 --> 00:14:38.080
topic but it seems a

00:14:38.080 --> 00:14:46.090
little bit relevant. That is a very good question. We so

00:14:46.090 --> 00:14:47.679
far we have got around

00:14:47.679 --> 00:14:52.220
700 new sanitary sewer facilities as a part of the annex

00:14:52.220 --> 00:14:56.279
ations. We don't have a

00:14:56.279 --> 00:14:59.490
we got all that information from the county. The county

00:14:59.490 --> 00:15:00.679
when those properties

00:15:00.679 --> 00:15:02.840
are in the county the county regulate the installation the

00:15:02.840 --> 00:15:03.659
permitting of those

00:15:03.659 --> 00:15:07.710
facilities. Unfortunately the county lost all the database

00:15:07.710 --> 00:15:09.240
years back and they

00:15:09.240 --> 00:15:14.429
didn't have any backup. So what we know so far is around

00:15:14.429 --> 00:15:16.320
700 new I'm sorry

00:15:16.320 --> 00:15:19.389
additional facility that have been added into the city

00:15:19.389 --> 00:15:21.200
regulated system. They

00:15:21.200 --> 00:15:24.299
could be more we have been doing going over aerial

00:15:24.299 --> 00:15:26.080
photographs and trying to

00:15:26.080 --> 00:15:29.350
locate where houses are if they are not tied to the city

00:15:29.350 --> 00:15:30.639
system we assume that

00:15:30.639 --> 00:15:34.279
they are on sanitary and we have approached them. But that

00:15:34.279 --> 00:15:35.879
700 number is a

00:15:35.879 --> 00:15:43.230
little bit fluid. If you sure okay okay do you do do you

00:15:43.230 --> 00:15:44.720
think that and you know

00:15:44.720 --> 00:15:50.480
again this is by raising those fees do you think you'll get

00:15:50.480 --> 00:15:52.399
more people who say

00:15:52.399 --> 00:15:56.879
hey I've got one let me pay $700 or do you think you'll get

00:15:56.879 --> 00:15:57.840
fewer people who

00:15:57.840 --> 00:16:01.889
are willing to let you know that they've got one. Well the

00:16:01.889 --> 00:16:02.960
those people would

00:16:02.960 --> 00:16:06.029
probably trigger the repair alteration if they ever do

00:16:06.029 --> 00:16:07.279
anything to their system

00:16:07.279 --> 00:16:11.580
it's not that they would be new new permits. So when they

00:16:11.580 --> 00:16:13.320
when they come to

00:16:13.320 --> 00:16:15.600
the city most of the time those alteration is because

00:16:15.600 --> 00:16:16.440
either small

00:16:16.440 --> 00:16:20.490
functioning or they're expanding their facility in a need

00:16:20.490 --> 00:16:21.639
larger capacity. So

00:16:21.639 --> 00:16:24.259
being already in the into the city limits require them to

00:16:24.259 --> 00:16:25.039
have some sort of

00:16:25.039 --> 00:16:29.509
permit through building inspections. So we will be able to

00:16:29.509 --> 00:16:31.480
catch those. The

00:16:31.480 --> 00:16:36.360
increases nobody likes the increases however we have been

00:16:36.360 --> 00:16:37.679
going over 12 years

00:16:37.679 --> 00:16:40.750
with no changes whatsoever and the red payers have been

00:16:40.750 --> 00:16:41.600
subsidized in the

00:16:41.600 --> 00:16:45.649
difference between what the permit actually cost to do and

00:16:45.649 --> 00:16:46.440
review versus

00:16:46.440 --> 00:16:49.750
what we're actually charging. So at this point even though

00:16:49.750 --> 00:16:51.039
the changes are minimal

00:16:51.039 --> 00:16:54.529
I think that we it would be to balance out that that

00:16:54.529 --> 00:16:55.840
imbalance that we currently

00:16:55.840 --> 00:16:59.889
has. Okay thank you. So what I'm hearing is let's say a

00:16:59.889 --> 00:17:00.960
property gets annexed

00:17:00.960 --> 00:17:06.240
into the city that doesn't trigger a permit. Correct. Yeah

00:17:06.240 --> 00:17:07.440
it is when they are

00:17:07.440 --> 00:17:10.549
ready to just when it gets repaired or power functions.

00:17:10.549 --> 00:17:12.160
Correct. Or if they put a new one.

00:17:12.160 --> 00:17:23.039
So the options we have really option one is more when you

00:17:23.039 --> 00:17:24.200
say modified cost of

00:17:24.200 --> 00:17:29.559
service I know that it's kind of like a facilities charge I

00:17:29.559 --> 00:17:30.519
guess if you will

00:17:30.519 --> 00:17:34.839
because it's or based upon really what it costs to deliver

00:17:34.839 --> 00:17:36.559
that although the

00:17:36.559 --> 00:17:41.119
increase or the decrease doesn't seem quite as much. Now I

00:17:41.119 --> 00:17:41.960
'd like to get

00:17:41.960 --> 00:17:49.309
everybody's thoughts on this but it seems to me it's a more

00:17:49.309 --> 00:17:49.960
instead of just

00:17:49.960 --> 00:17:53.079
saying five across five percent across the board which

00:17:53.079 --> 00:17:54.599
certainly sounds better

00:17:54.599 --> 00:18:02.059
but it's more really more reflective of based upon what

00:18:02.059 --> 00:18:03.839
what our usage is or

00:18:03.839 --> 00:18:07.329
what our what it cost to deliver the water or take the

00:18:07.329 --> 00:18:08.759
wastewater away.

00:18:08.759 --> 00:18:11.819
Based on a lot of factors. Yeah based on the cost of

00:18:11.819 --> 00:18:14.559
service rate model.

00:18:14.880 --> 00:18:19.000
You mentioned that the consultant had a recommendation and

00:18:19.000 --> 00:18:20.000
could give us the

00:18:20.000 --> 00:18:25.759
basis for that. So my understanding in Dr. Banks I may have

00:18:25.759 --> 00:18:26.559
to point you up here

00:18:26.559 --> 00:18:30.640
is a past consultant did make a recommendation to the city

00:18:30.640 --> 00:18:32.000
that it was a

00:18:32.000 --> 00:18:35.240
good decision to keep the facility charge relatively stable

00:18:35.240 --> 00:18:36.440
because it's a

00:18:36.440 --> 00:18:39.960
pretty constant revenue stream. The volume charge of course

00:18:39.960 --> 00:18:40.799
with rainfall

00:18:40.799 --> 00:18:44.450
and unpredictable weather tends to go up and down and that

00:18:44.450 --> 00:18:45.440
's my understanding of

00:18:45.440 --> 00:18:51.859
it. Is that pretty close to okay yeah does that answer your

00:18:51.859 --> 00:18:53.319
question or okay

00:18:53.319 --> 00:18:56.950
that's why option one it proposes to reduce the facility

00:18:56.950 --> 00:18:58.440
charge less option

00:18:58.440 --> 00:19:01.579
two is more we're trying to stick with those

00:19:01.579 --> 00:19:04.279
recommendations and option one.

00:19:04.279 --> 00:19:08.400
And it stays closer to what it actually costs us to deliver

00:19:08.400 --> 00:19:09.359
that service. That's

00:19:09.359 --> 00:19:12.430
correct that's correct. I'm always in favor of that. Yeah

00:19:12.430 --> 00:19:14.200
that's correct. If you go

00:19:14.200 --> 00:19:17.259
too far off of that then you could see higher rate

00:19:17.259 --> 00:19:18.359
increases down the road.

00:19:18.359 --> 00:19:21.680
Right right right. On the flip side if you're out of town

00:19:21.680 --> 00:19:22.720
and you don't use any

00:19:22.720 --> 00:19:26.430
water and you still have a water bill sometimes that's

00:19:26.430 --> 00:19:27.839
surprising you know I

00:19:27.839 --> 00:19:30.329
mean that they all have that base charge regardless if you

00:19:30.329 --> 00:19:31.359
're actually using the

00:19:31.359 --> 00:19:34.680
service or not. Right. You know so if you have gas

00:19:34.680 --> 00:19:36.599
electricity and water and you're

00:19:36.599 --> 00:19:40.319
gone for a month you've got $80 worth of bills even though

00:19:40.319 --> 00:19:41.039
you haven't used

00:19:41.039 --> 00:19:45.119
anything at all. But that's because we had to build a

00:19:45.119 --> 00:19:46.160
system to get there. I'm with you.

00:19:46.160 --> 00:19:54.119
Okay yeah I don't know if either option is significantly

00:19:54.119 --> 00:19:55.000
enough different to

00:19:55.000 --> 00:20:02.640
really it's not but I would go in favor of option one.

00:20:02.640 --> 00:20:09.119
I would agree. All right looks like the consensus is option

00:20:09.119 --> 00:20:10.039
one is our

00:20:10.039 --> 00:20:17.420
preference or recommendation to base it on you know actual

00:20:17.420 --> 00:20:20.119
cost of service.

00:20:22.359 --> 00:20:27.319
Any other comments about that? No. Yeah and like I said we

00:20:27.319 --> 00:20:28.039
'll come back on the

00:20:28.039 --> 00:20:31.720
23rd with the actual rate ordinances based on 0% in water

00:20:31.720 --> 00:20:32.440
and then a 5%

00:20:32.440 --> 00:20:36.490
reduction in wastewater. Okay. So we'll proceed. All right

00:20:36.490 --> 00:20:39.000
thank you.

00:20:43.640 --> 00:20:49.970
Okay item B is to receive a report hold a discussion give

00:20:49.970 --> 00:20:50.960
staff direction

00:20:50.960 --> 00:20:57.519
regarding proposed electric rates for fiscal year 2018-2019

00:20:57.519 --> 00:20:57.519
.

00:21:09.880 --> 00:21:13.930
Good morning George Morrow general manager of DME. Each

00:21:13.930 --> 00:21:14.839
year we come

00:21:14.839 --> 00:21:17.299
forward after the budget presentation and talk about the

00:21:17.299 --> 00:21:18.039
rate schedules

00:21:18.039 --> 00:21:20.289
themselves you know what changes need to be made in the

00:21:20.289 --> 00:21:21.720
rate schedules and really

00:21:21.720 --> 00:21:24.339
for this year they're going to be very minimal but we want

00:21:24.339 --> 00:21:25.279
to follow through

00:21:25.279 --> 00:21:31.420
with our typical process. So the key things we'll be

00:21:31.420 --> 00:21:33.720
talking through a few

00:21:33.720 --> 00:21:39.089
names ECA, RCA, TCRF. ECA is the energy cost adjustment. R

00:21:39.089 --> 00:21:40.160
CA is the renewable

00:21:40.160 --> 00:21:43.339
cost adjustment and the TCRF is the transmission cost

00:21:43.339 --> 00:21:44.640
recovery factor and

00:21:44.640 --> 00:21:47.859
that rate table I was talking about is in our ordinance

00:21:47.859 --> 00:21:50.000
2017-256 which will

00:21:50.000 --> 00:21:53.079
have some very minor minor changes as a result of the

00:21:53.079 --> 00:21:54.440
budget process and so

00:21:54.440 --> 00:21:58.609
here's basically the rate change overview. The biggest one

00:21:58.609 --> 00:21:59.319
is we're going

00:21:59.319 --> 00:22:05.559
to zero out the TCRF for 2019. So that's going to save our

00:22:05.559 --> 00:22:06.359
customers an average

00:22:06.359 --> 00:22:10.599
of about three and a half percent. No changes to the ECA or

00:22:10.599 --> 00:22:11.759
RCA amounts so

00:22:11.759 --> 00:22:15.329
we're fixing that we're going to hang in there. Now the ECA

00:22:15.329 --> 00:22:16.160
is reviewed

00:22:16.160 --> 00:22:19.759
quarterly so the PUB has that in their charter their

00:22:19.759 --> 00:22:21.480
responsibility so you know

00:22:21.480 --> 00:22:24.539
we'd like to stay with that ECA for the rest of the budget

00:22:24.539 --> 00:22:25.400
year but we're going

00:22:25.400 --> 00:22:27.680
to look at the numbers and the things change significantly

00:22:27.680 --> 00:22:28.720
then general

00:22:28.720 --> 00:22:31.789
managers charged with coming back to you and updating you

00:22:31.789 --> 00:22:32.839
about the ECA so you

00:22:32.839 --> 00:22:36.329
might see me in three months or so if things have changed

00:22:36.329 --> 00:22:37.160
from the the budget

00:22:37.160 --> 00:22:39.640
expectations but we're hoping we can hang in there. We'll

00:22:39.640 --> 00:22:41.079
see. We got a little

00:22:41.079 --> 00:22:44.400
more explicit with the ECA definition when I reviewed that

00:22:44.400 --> 00:22:45.240
and I've been

00:22:45.240 --> 00:22:48.430
playing with ECA's over my career it didn't look like it

00:22:48.430 --> 00:22:49.519
was as precise and

00:22:49.519 --> 00:22:54.400
specific as I was hoping so we updated that definition and

00:22:54.400 --> 00:22:55.599
that's part of your

00:22:55.599 --> 00:22:59.339
packet today. One of the things that didn't really wasn't

00:22:59.339 --> 00:23:00.119
clear to me that it

00:23:00.119 --> 00:23:04.170
explicitly credited all of our power sales revenue you know

00:23:04.170 --> 00:23:04.880
so the ECA has

00:23:04.880 --> 00:23:07.950
the cost in there right of all of our power supplies but it

00:23:07.950 --> 00:23:09.160
should also credit

00:23:09.160 --> 00:23:11.670
of course the revenue and we were doing that it just didn't

00:23:11.670 --> 00:23:12.440
really say that

00:23:12.440 --> 00:23:15.500
clearly so we updated that. We talked to you about

00:23:15.500 --> 00:23:17.000
including the DEC so that's a

00:23:17.000 --> 00:23:20.130
big change we've never had a DEC before we never had a

00:23:20.130 --> 00:23:21.640
power plant or at least

00:23:21.640 --> 00:23:25.130
not for many many many years so we're putting those costs

00:23:25.130 --> 00:23:26.440
into the ECA but

00:23:26.440 --> 00:23:28.789
we're also putting the revenues from the DEC into the ECA

00:23:28.789 --> 00:23:29.839
so that's an offsetting

00:23:29.839 --> 00:23:32.900
and for the first few years if you remember the DEC pro

00:23:32.900 --> 00:23:33.519
forma there's a

00:23:33.519 --> 00:23:37.920
very positive balance from revenues versus cost and so the

00:23:37.920 --> 00:23:38.799
customers will

00:23:38.799 --> 00:23:41.920
benefit from that in the short run and we'll see what

00:23:41.920 --> 00:23:42.400
happens in the

00:23:42.400 --> 00:23:46.970
future you know nobody can really predict exactly and we'll

00:23:46.970 --> 00:23:48.000
take it a year

00:23:48.000 --> 00:23:52.380
at a time as we move forward with the DEC and there's some

00:23:52.380 --> 00:23:53.440
other very minor

00:23:53.440 --> 00:23:57.569
wording changes we eliminated what's called residential

00:23:57.569 --> 00:24:00.400
prepaid service where

00:24:00.400 --> 00:24:03.170
we were had a facility charge for three-phase service well

00:24:03.170 --> 00:24:03.640
we don't

00:24:03.640 --> 00:24:06.710
actually have that three-phase service they don't make

00:24:06.710 --> 00:24:07.839
meters that allow us to

00:24:07.839 --> 00:24:10.960
do that I think at one time we hope to do that so we just

00:24:10.960 --> 00:24:11.960
simply remove that

00:24:11.960 --> 00:24:16.289
but we didn't really change the usage charges for that and

00:24:16.289 --> 00:24:17.319
then we just we

00:24:17.319 --> 00:24:20.390
pointed out to customers if they're going to install

00:24:20.390 --> 00:24:21.319
distributed generation

00:24:21.319 --> 00:24:24.519
behind the meter you know we have a manual you know go look

00:24:24.519 --> 00:24:25.079
at the manual

00:24:25.079 --> 00:24:28.150
upfront and learn about the process and what you should

00:24:28.150 --> 00:24:29.400
consider when you're

00:24:29.400 --> 00:24:32.789
putting in distributed generation and there's one bit of

00:24:32.789 --> 00:24:34.079
language in there that

00:24:34.079 --> 00:24:39.359
says hey if you if your intention is to generate more

00:24:39.359 --> 00:24:40.240
electricity than you're

00:24:40.240 --> 00:24:42.720
actually using that sort of puts you in a different

00:24:42.720 --> 00:24:45.680
category then we may want to

00:24:45.680 --> 00:24:49.730
talk about how we treat that additional generation so so

00:24:49.730 --> 00:24:50.720
right now if you

00:24:50.720 --> 00:24:54.099
install behind the meter solar for instance you're gonna

00:24:54.099 --> 00:24:55.019
you can offset

00:24:55.019 --> 00:24:59.730
your bill pretty much one for one and a little bit of that

00:24:59.730 --> 00:25:00.319
discussion was

00:25:00.319 --> 00:25:02.880
mentioned earlier you're not going to be paying any of our

00:25:02.880 --> 00:25:03.799
system costs you're

00:25:03.799 --> 00:25:08.400
not gonna be paying the wires cost the T&D administration

00:25:08.400 --> 00:25:11.000
finance rates so up

00:25:11.000 --> 00:25:14.519
to a point that is an incentive right to encourage

00:25:14.519 --> 00:25:17.400
renewable generation but over

00:25:17.400 --> 00:25:19.849
that if you start going beyond that should you you know

00:25:19.849 --> 00:25:20.759
what what should we

00:25:20.759 --> 00:25:23.960
do how should we treat that you know maybe there's a point

00:25:23.960 --> 00:25:25.400
where an incentive

00:25:25.400 --> 00:25:27.730
is appropriate but maybe there's another point where it's

00:25:27.730 --> 00:25:28.480
not and that would be a

00:25:28.480 --> 00:25:32.240
dialogue for us to have at some time if we get another very

00:25:32.240 --> 00:25:33.400
large renewable

00:25:33.400 --> 00:25:37.450
installation our code says if it's over 50 KW we should at

00:25:37.450 --> 00:25:38.839
least think about how

00:25:38.839 --> 00:25:43.160
we treat that over 50 and I think that's over my pay grade

00:25:43.160 --> 00:25:44.480
so I obviously want to

00:25:44.480 --> 00:25:47.549
come back and have that dialogue with you as we go forward

00:25:47.549 --> 00:25:51.839
so this is a

00:25:51.839 --> 00:25:55.910
breakdown of what that reduction in the TCRF to zero means

00:25:55.910 --> 00:25:57.279
it was an average of

00:25:57.279 --> 00:25:59.150
three and a half percent but it just depends which

00:25:59.150 --> 00:26:00.079
particular rate class

00:26:00.079 --> 00:26:03.670
you're in how that falls out and so that's a summary if you

00:26:03.670 --> 00:26:04.839
look on the far

00:26:04.839 --> 00:26:08.890
right hand column there's the percentages the dollar sign

00:26:08.890 --> 00:26:09.440
column shows

00:26:09.440 --> 00:26:16.950
how much of a typical bill the savings would be so and

00:26:16.950 --> 00:26:18.519
there's a further

00:26:18.519 --> 00:26:21.589
breakdown in your packet today for each of those areas

00:26:21.589 --> 00:26:22.839
showing the different

00:26:22.839 --> 00:26:25.170
tiers and the different other components so I'm just going

00:26:25.170 --> 00:26:26.039
to zip through here

00:26:26.039 --> 00:26:29.529
because we just summarized it in that last slide these are

00:26:29.529 --> 00:26:30.519
the same numbers

00:26:30.519 --> 00:26:34.009
that you were just looking at so this is average small

00:26:34.009 --> 00:26:36.640
commercial average medium

00:26:36.640 --> 00:26:40.380
commercial again the bottom the only change really is that

00:26:40.380 --> 00:26:41.480
TCRF going to zero

00:26:41.480 --> 00:26:45.160
and all of these different tables and then large commercial

00:26:45.160 --> 00:26:46.079
same thing that

00:26:46.079 --> 00:26:49.599
TCRF going to zero so the savings is typically a thousand

00:26:49.599 --> 00:26:51.200
dollars or four

00:26:51.200 --> 00:26:56.559
point three one percent for large commercial so the process

00:26:56.559 --> 00:26:57.680
going forward

00:26:57.680 --> 00:27:01.730
will be will be coming back to you on July 23rd for today's

00:27:01.730 --> 00:27:02.440
just a work

00:27:02.440 --> 00:27:04.819
session we'll come back for formal approval of what we

00:27:04.819 --> 00:27:05.880
talked about here and

00:27:05.880 --> 00:27:09.930
then we'll go forward with the council on September 19th so

00:27:09.930 --> 00:27:10.519
open for any

00:27:10.519 --> 00:27:21.440
comments questions this on the TCRF rate going to zero it

00:27:21.440 --> 00:27:22.799
has a TCRF has that

00:27:22.799 --> 00:27:27.680
been a part of the ECA rate in the past no it I think at

00:27:27.680 --> 00:27:29.599
some point it was and

00:27:29.599 --> 00:27:32.140
then it was split then we had some new costs new

00:27:32.140 --> 00:27:33.279
transmission service costs

00:27:33.279 --> 00:27:36.599
that were beyond what we typically had put in the ECA so we

00:27:36.599 --> 00:27:37.480
created a new

00:27:37.480 --> 00:27:41.140
category called the TCRF several years ago and to collect

00:27:41.140 --> 00:27:42.359
those additional

00:27:42.359 --> 00:27:46.890
transmission costs so we've and staff talked about

00:27:46.890 --> 00:27:48.759
combining the two and

00:27:48.759 --> 00:27:51.829
that's possible down the road we may actually do that

00:27:51.829 --> 00:27:53.039
because transmission

00:27:53.039 --> 00:27:56.109
service costs could actually be part of energy cost

00:27:56.109 --> 00:27:57.200
adjustment right it does

00:27:57.200 --> 00:28:00.589
there's a nexus there so that if we are able to continue

00:28:00.589 --> 00:28:02.000
with this at zero for

00:28:02.000 --> 00:28:04.519
an extended period then likely we might come back as hey

00:28:04.519 --> 00:28:05.559
let's just do away with

00:28:05.559 --> 00:28:08.630
it if that's where you're going with that question so

00:28:08.630 --> 00:28:12.119
overall as a system our

00:28:12.119 --> 00:28:20.869
the TCRF that we pay into our cut right is offset by

00:28:20.869 --> 00:28:22.599
revenue that revenue

00:28:22.599 --> 00:28:27.480
credits if you will by of our transmission cost because we

00:28:27.480 --> 00:28:28.519
there's also

00:28:28.519 --> 00:28:32.980
a reimbursement side of that right so just to clarify that

00:28:32.980 --> 00:28:34.440
so on the cost side

00:28:34.440 --> 00:28:38.849
when we make transmission investments we submit those to

00:28:38.849 --> 00:28:42.279
the PUC and they make

00:28:42.279 --> 00:28:44.700
sure we get reimbursed for that and you've talked about

00:28:44.700 --> 00:28:45.480
that quite a bit in

00:28:45.480 --> 00:28:48.970
the past so that's our cost side on the expense side we

00:28:48.970 --> 00:28:50.599
have to pay our share of

00:28:50.599 --> 00:28:53.910
other electric utilities in Texas when we impact their

00:28:53.910 --> 00:28:55.240
system so that's the

00:28:55.240 --> 00:29:01.559
expense side so right now the and we had been netting those

00:29:01.559 --> 00:29:02.519
and one time they

00:29:02.519 --> 00:29:05.170
were very close but as we continued with our T and D

00:29:05.170 --> 00:29:07.079
program that the revenue

00:29:07.079 --> 00:29:10.150
side is much higher now than the expense side so we do

00:29:10.150 --> 00:29:11.680
account for those

00:29:11.680 --> 00:29:15.400
separately and I think back when that TCRF was established

00:29:15.400 --> 00:29:17.099
it was that part

00:29:17.099 --> 00:29:20.599
was separated out the expense part from a financial or

00:29:20.599 --> 00:29:23.039
business standpoint so is

00:29:23.039 --> 00:29:26.720
that clear yes it is I just want to make that clarification

00:29:26.720 --> 00:29:28.980
that there's so it's

00:29:28.980 --> 00:29:32.339
not a netting at the moment it's kind of that's our expense

00:29:32.339 --> 00:29:34.279
right for right and

00:29:34.279 --> 00:29:36.619
it's just actually part of our expenses kind of like an

00:29:36.619 --> 00:29:37.759
incremental piece that

00:29:37.759 --> 00:29:40.410
was over and above what we had been used to in the past but

00:29:40.410 --> 00:29:42.359
that's coming off the

00:29:42.359 --> 00:29:46.410
individual bills now the expense side is coming off right

00:29:46.410 --> 00:29:47.559
so we're recommending

00:29:47.559 --> 00:29:50.299
correct okay so this year we collected next year we're

00:29:50.299 --> 00:29:50.960
proposing not to

00:29:50.960 --> 00:29:58.309
collect it okay questions I'm glad to see the ECA rate it's

00:29:58.309 --> 00:29:59.599
more transparent

00:29:59.599 --> 00:30:05.359
when you put in the put everything in with the power cells

00:30:05.359 --> 00:30:07.160
and expenses and

00:30:07.160 --> 00:30:09.750
all that so that that should be very transparent going

00:30:09.750 --> 00:30:10.880
forward how that rate

00:30:10.880 --> 00:30:17.119
is calculated and if I understand that is what we were

00:30:17.119 --> 00:30:18.160
doing we're just making

00:30:18.160 --> 00:30:22.400
it more transparent right correct nothing yeah nothing new

00:30:22.400 --> 00:30:23.559
in reality with

00:30:23.559 --> 00:30:26.630
the exception of the clarifying that the deck is also a

00:30:26.630 --> 00:30:27.880
power supply and that

00:30:27.880 --> 00:30:31.049
would be included in there okay that has no way by that

00:30:31.049 --> 00:30:34.599
this year right all right

00:30:34.599 --> 00:30:40.549
any other comments questions is there a direction

00:30:40.549 --> 00:30:42.759
recommendations so we'll be

00:30:42.759 --> 00:30:46.809
coming back on the the 23rd for your formal approval of

00:30:46.809 --> 00:30:47.720
that what we talked

00:30:47.720 --> 00:30:53.240
about today okay I think everybody's no questions on it

00:30:53.240 --> 00:30:53.960
right thank you very

00:30:53.960 --> 00:31:03.359
much thanks George okay next we have item C which is to

00:31:03.359 --> 00:31:04.339
receive a report hold

00:31:04.339 --> 00:31:07.019
a discussion and give staff direction regarding the solid

00:31:07.019 --> 00:31:08.319
waste department's

00:31:08.319 --> 00:31:11.920
cost of service and right design study provided by new gen

00:31:11.920 --> 00:31:12.960
strategies and

00:31:12.960 --> 00:31:22.069
solutions LLC almost came to the podium for the wrong item

00:31:22.069 --> 00:31:23.680
earlier so excited

00:31:23.680 --> 00:31:26.109
about electric rates I wanted to do the presentation for

00:31:26.109 --> 00:31:27.839
George well good morning

00:31:27.839 --> 00:31:30.170
members of the PB my name is Ethan Cox I'm the director of

00:31:30.170 --> 00:31:31.079
solid waste for the

00:31:31.079 --> 00:31:34.960
city of Denton it's my pleasure to have new gen services

00:31:34.960 --> 00:31:35.759
here this morning mr.

00:31:35.759 --> 00:31:38.509
Dave Yankee is going to be coming to the podium in just a

00:31:38.509 --> 00:31:39.640
moment a few of the

00:31:39.640 --> 00:31:42.390
things that I wanted to kind of lay out before we get

00:31:42.390 --> 00:31:44.079
started is this is kind of

00:31:44.079 --> 00:31:47.140
kind of a continuation of a discussion we had with the pub

00:31:47.140 --> 00:31:48.119
in the council a few

00:31:48.119 --> 00:31:51.480
weeks ago we had our operational review in which we kind of

00:31:51.480 --> 00:31:52.519
came to the pub in

00:31:52.519 --> 00:31:55.170
the council we talked a little bit about how our programs

00:31:55.170 --> 00:31:56.279
were performing how our

00:31:56.279 --> 00:31:59.349
operations were performing this is kind of the financial

00:31:59.349 --> 00:32:00.599
side of that discussion

00:32:00.599 --> 00:32:04.650
in that we've really spent the last 13 to 14 months kind of

00:32:04.650 --> 00:32:05.599
pulling our budget

00:32:05.599 --> 00:32:07.759
apart making sure we understand where all of our costs are

00:32:07.759 --> 00:32:08.440
and put it back

00:32:08.440 --> 00:32:11.750
together and I'd be remiss if I didn't compliment our staff

00:32:11.750 --> 00:32:12.920
the financial staff

00:32:12.920 --> 00:32:15.990
particularly that has done some real yeoman's work to kind

00:32:15.990 --> 00:32:16.920
of get us to this

00:32:16.920 --> 00:32:20.960
point and so mr. Yankee is going to come up in just a

00:32:20.960 --> 00:32:22.240
moment and kind of walk us

00:32:22.240 --> 00:32:25.740
through new Jen's work on this so far and then I'll return

00:32:25.740 --> 00:32:26.640
to the podium

00:32:26.640 --> 00:32:29.700
afterward to have a brief management overview kind of

00:32:29.700 --> 00:32:30.440
management response

00:32:30.440 --> 00:32:33.509
fuel to their recommendations and findings and so without

00:32:33.509 --> 00:32:34.160
further ado I'll

00:32:34.160 --> 00:32:38.440
turn it over to mr. Dave Yankee

00:32:54.880 --> 00:32:58.079
great thank you

00:33:05.000 --> 00:33:06.750
well good morning for the record my name is Dave Yankee

00:33:06.750 --> 00:33:11.079
with new Jen's strategies

00:33:11.079 --> 00:33:14.569
and solutions just real quick I'm going to give you a

00:33:14.569 --> 00:33:16.279
little background on our

00:33:16.279 --> 00:33:20.690
firm we're a 35 person management consulting firm what we

00:33:20.690 --> 00:33:21.519
focus on is

00:33:21.519 --> 00:33:25.789
conducting financial economic cost-of-service studies for

00:33:25.789 --> 00:33:27.079
water wastewater

00:33:27.079 --> 00:33:27.079
solid waste and electric so this is what we do and I'm out

00:33:27.079 --> 00:33:33.680
of our Austin office

00:33:33.680 --> 00:33:37.170
real quick background I've been involved in the solid waste

00:33:37.170 --> 00:33:38.279
area for about 25

00:33:38.279 --> 00:33:43.220
years again what I focus on is cost-of-service and rate

00:33:43.220 --> 00:33:44.319
design studies

00:33:44.319 --> 00:33:48.369
financial feasibility studies things like that so again

00:33:48.369 --> 00:33:49.039
just a little

00:33:49.039 --> 00:33:53.529
background I've been doing this for quite a while let me

00:33:53.529 --> 00:33:54.839
give you a real

00:33:54.839 --> 00:34:01.079
quick scope or synopsis of what our scope was the first

00:34:01.079 --> 00:34:02.279
thing was we were

00:34:02.279 --> 00:34:05.470
to conduct a cost service study that allocates all the cost

00:34:05.470 --> 00:34:06.680
to each specific

00:34:06.680 --> 00:34:09.739
solid waste service and I'll show those to you here in a

00:34:09.739 --> 00:34:10.840
little bit we're also

00:34:10.840 --> 00:34:14.360
also supposed to develop a five-year revenue requirement

00:34:14.360 --> 00:34:15.679
which is for fiscal

00:34:15.679 --> 00:34:20.559
year 19 through fiscal year 2023 with that then we were

00:34:20.559 --> 00:34:22.000
going to forecast out

00:34:22.000 --> 00:34:26.050
what are the revenues being realized for each of those

00:34:26.050 --> 00:34:27.480
services you know are you

00:34:27.480 --> 00:34:31.949
under recovering over recovering and then based on that

00:34:31.949 --> 00:34:33.639
step four recommend

00:34:33.639 --> 00:34:36.880
or design rates for residential and commercial collection

00:34:36.880 --> 00:34:37.960
services the

00:34:37.960 --> 00:34:42.010
fifth item was a market analysis and what that entails is

00:34:42.010 --> 00:34:43.239
looking at what are

00:34:43.239 --> 00:34:47.579
you charging for wholesale solid waste coming into the

00:34:47.579 --> 00:34:48.880
landfill whether it's

00:34:48.880 --> 00:34:51.949
from private contractors other cities what have you

00:34:51.949 --> 00:34:53.840
basically garbage not

00:34:53.840 --> 00:34:58.280
collected by your city and then finally presenting

00:34:58.280 --> 00:35:00.360
presentation to to you folks

00:35:00.360 --> 00:35:03.449
City Council and then we'll be issuing a draft and then a

00:35:03.449 --> 00:35:04.800
final report with our

00:35:04.800 --> 00:35:08.849
findings and recommendations I want to talk just briefly on

00:35:08.849 --> 00:35:09.559
the cost of service

00:35:09.559 --> 00:35:13.800
methodology and what we did drill into it a little bit more

00:35:13.800 --> 00:35:15.239
what we did is first

00:35:15.239 --> 00:35:18.329
of all we developed what's called a test year which is

00:35:18.329 --> 00:35:19.800
using your preliminary

00:35:19.800 --> 00:35:23.849
fiscal year 2019 budget spent a lot of time with staff and

00:35:23.849 --> 00:35:24.519
I do want to

00:35:24.519 --> 00:35:28.039
compliment them because they spent a lot of time with us

00:35:28.039 --> 00:35:29.719
going into it as far as

00:35:29.719 --> 00:35:33.369
looking at the budget the capital plan all the equipment

00:35:33.369 --> 00:35:34.840
and personnel and how

00:35:34.840 --> 00:35:38.400
they get assigned to the different services and so with

00:35:38.400 --> 00:35:39.639
that we then

00:35:39.639 --> 00:35:43.690
developed a five-year revenue requirement key component in

00:35:43.690 --> 00:35:44.480
that is the

00:35:44.480 --> 00:35:47.969
capital improvement plan that's for purchasing rolling

00:35:47.969 --> 00:35:49.039
stock your debt

00:35:49.039 --> 00:35:51.750
service and all that I've got a couple slides that will

00:35:51.750 --> 00:35:52.800
show with regard to

00:35:52.800 --> 00:35:56.289
that here in a few minutes and then allocating the cost to

00:35:56.289 --> 00:35:57.079
the service

00:35:57.079 --> 00:35:59.769
categories you have 22 service categories I'll just show

00:35:59.769 --> 00:36:00.239
you those

00:36:00.239 --> 00:36:05.030
briefly and then allocating to the customer classes and

00:36:05.030 --> 00:36:06.400
then calculating

00:36:06.400 --> 00:36:12.239
the cost of service couple highlights I want to emphasize

00:36:12.239 --> 00:36:14.840
here your own M again

00:36:14.840 --> 00:36:18.889
is based on your fiscal year 2019 proposed budget

00:36:18.889 --> 00:36:20.400
adjustments were made to

00:36:20.400 --> 00:36:24.449
reflect reoccurring cash needs and investments again I'll

00:36:24.449 --> 00:36:25.400
have a slide on

00:36:25.400 --> 00:36:28.889
that what that means is what we're really focused on is

00:36:28.889 --> 00:36:30.159
seeing if we can

00:36:30.159 --> 00:36:34.639
help in looking at the forecast move to more of what we

00:36:34.639 --> 00:36:36.559
call a pay-as-you-go

00:36:36.559 --> 00:36:40.610
cash funding some of your rolling stock and again I have a

00:36:40.610 --> 00:36:41.639
slide to show the

00:36:41.639 --> 00:36:46.599
increase in that so you can pay with cash versus debt or

00:36:46.599 --> 00:36:48.440
you know phase that

00:36:48.440 --> 00:36:53.360
out great news and good thing that is the the third bullet

00:36:53.360 --> 00:36:54.519
annual debt service

00:36:54.519 --> 00:36:57.679
payments again I'll have a slide here I'll show it to you

00:36:57.679 --> 00:36:58.960
but you're seeing a

00:36:58.960 --> 00:37:03.440
decrease in your debt service declining by 3.8 million

00:37:03.440 --> 00:37:05.400
dollars a year from

00:37:05.400 --> 00:37:10.670
fiscal year 2019-2023 what that allows you to do is

00:37:10.670 --> 00:37:12.280
increase the cash you're

00:37:12.280 --> 00:37:17.159
setting aside for paying cash for your equipment versus

00:37:17.159 --> 00:37:19.880
issuing debt and so

00:37:19.880 --> 00:37:22.949
again that that leads into the final bullet you'll see a

00:37:22.949 --> 00:37:23.880
significant increase

00:37:23.880 --> 00:37:28.440
in the funding for that equipment on a pay-as-you-go basis

00:37:28.440 --> 00:37:29.159
these are all the

00:37:29.159 --> 00:37:32.230
services you provide you probably don't know all these

00:37:32.230 --> 00:37:33.239
services you take them

00:37:33.239 --> 00:37:36.880
for granted a lot of it's behind the scenes but there are

00:37:36.880 --> 00:37:38.280
22 different

00:37:38.280 --> 00:37:41.349
service categories here again they're focused between the

00:37:41.349 --> 00:37:42.159
residential the

00:37:42.159 --> 00:37:45.389
commercial and then administrative gets allocated to them

00:37:45.389 --> 00:37:46.519
and then you have the

00:37:46.519 --> 00:37:51.599
disposal related operations I'll keep moving on that unless

00:37:51.599 --> 00:37:52.199
anyone has

00:37:52.199 --> 00:37:59.550
questions so what we've got here is the five-year revenue

00:37:59.550 --> 00:38:01.599
requirement a lot of

00:38:01.599 --> 00:38:05.090
numbers let me just highlight a few things bottom line for

00:38:05.090 --> 00:38:07.199
fiscal year 2019

00:38:07.199 --> 00:38:11.739
you've got a total revenue requirement of just over 33

00:38:11.739 --> 00:38:14.320
million dollars by 2023

00:38:14.320 --> 00:38:18.369
if you look at that bottom right corner it's about 34.3

00:38:18.369 --> 00:38:19.760
million dollars bottom

00:38:19.760 --> 00:38:24.659
line coupled with watching some of the cost the debt

00:38:24.659 --> 00:38:26.380
service reduction even

00:38:26.380 --> 00:38:29.619
with increasing pay-as-you-go for your equipment if you

00:38:29.619 --> 00:38:30.599
look at that that's

00:38:30.599 --> 00:38:36.360
about a 1% increase per year it's very manageable it's very

00:38:36.360 --> 00:38:37.199
reasonable and

00:38:37.199 --> 00:38:43.559
again you know that that's good news from that standpoint

00:38:43.559 --> 00:38:47.800
the next slide what

00:38:47.800 --> 00:38:52.900
we're showing here are the fully loaded cost of service if

00:38:52.900 --> 00:38:55.980
you go back well I'm

00:38:55.980 --> 00:39:00.079
not going to go back but if you had looked before what we

00:39:00.079 --> 00:39:01.360
've done here is

00:39:01.360 --> 00:39:05.510
we've allocated to for instance residential collection

00:39:05.510 --> 00:39:07.320
services there's

00:39:07.320 --> 00:39:11.599
of about the 280,000 tons a year of garbage it comes into

00:39:11.599 --> 00:39:12.199
your landfill

00:39:12.199 --> 00:39:16.320
about 29,000 tons a year is picked up by your residential

00:39:16.320 --> 00:39:17.920
trucks in this slide

00:39:17.920 --> 00:39:22.360
versus the prior slide we've allocated the disposal cost to

00:39:22.360 --> 00:39:23.360
the residential

00:39:23.360 --> 00:39:26.880
collection services so on the prior slide it was a little

00:39:26.880 --> 00:39:28.320
over 11 million or

00:39:28.320 --> 00:39:33.519
11.3 million now it's at point 12.3 million because we've

00:39:33.519 --> 00:39:34.760
allocated the

00:39:34.760 --> 00:39:41.000
disposal cost associated with residential garbage service

00:39:41.000 --> 00:39:42.760
okay the red and green

00:39:42.760 --> 00:39:47.639
bottom line the green show the services that are covering

00:39:47.639 --> 00:39:49.219
their costs recovering

00:39:49.219 --> 00:39:52.579
their costs the red ones are those that are under

00:39:52.579 --> 00:39:54.619
recovering and again we'll

00:39:54.619 --> 00:39:58.190
talk about that in just a few minutes with regard to some

00:39:58.190 --> 00:39:58.679
of our

00:39:58.679 --> 00:40:03.349
recommendations and that's the key things I want to focus

00:40:03.349 --> 00:40:04.800
on there and I'll

00:40:04.800 --> 00:40:08.510
be glad to take more questions at the end on that but you

00:40:08.510 --> 00:40:10.000
can see overall your

00:40:10.000 --> 00:40:15.199
commercial services are doing well something I want to show

00:40:15.199 --> 00:40:15.880
that again

00:40:15.880 --> 00:40:19.420
going back to the annual debt service and revenue funding

00:40:19.420 --> 00:40:20.599
this is a key slide

00:40:20.599 --> 00:40:24.300
that gives you some flexibility going forward if you look

00:40:24.300 --> 00:40:25.480
at your current debt

00:40:25.480 --> 00:40:29.530
service and fiscal year 2019 it's just under nine million

00:40:29.530 --> 00:40:30.159
dollars at eight

00:40:30.159 --> 00:40:33.409
million nine hundred ninety five thousand dollars it does

00:40:33.409 --> 00:40:35.039
decrease over

00:40:35.039 --> 00:40:39.090
the next five years to five point one million dollars which

00:40:39.090 --> 00:40:40.239
again that debt

00:40:40.239 --> 00:40:44.739
service is rolling off if you notice there's some projected

00:40:44.739 --> 00:40:45.880
new serve debt

00:40:45.880 --> 00:40:51.260
service starting in 2021 but it's very minimal and you

00:40:51.260 --> 00:40:53.280
still have a significant

00:40:53.280 --> 00:40:57.639
reduction there what that allows you to do then is the

00:40:57.639 --> 00:40:59.280
replacement fund one of

00:40:59.280 --> 00:41:03.050
the things we've put in and again spent a lot of time with

00:41:03.050 --> 00:41:04.320
staff what we looked

00:41:04.320 --> 00:41:09.039
at was the equipment needs you have for your utility

00:41:09.039 --> 00:41:10.119
whether it's residential

00:41:10.119 --> 00:41:14.170
garbage collection trucks recycling trucks your commercial

00:41:14.170 --> 00:41:14.920
front loads your

00:41:14.920 --> 00:41:18.500
roll-offs all that equipment there's typically a life cycle

00:41:18.500 --> 00:41:19.119
that's put

00:41:19.119 --> 00:41:22.239
together when does it have to be replaced when is it

00:41:22.239 --> 00:41:23.480
cheaper to replace

00:41:23.480 --> 00:41:27.619
it versus to keep trying to fix it that equipment takes a

00:41:27.619 --> 00:41:29.679
lot of wear and tear so

00:41:29.679 --> 00:41:34.400
that's factored in to develop in this replacement fund okay

00:41:34.400 --> 00:41:35.679
so bottom line

00:41:35.679 --> 00:41:39.420
what's built into that revenue requirement that I showed

00:41:39.420 --> 00:41:40.760
you that was only increasing

00:41:40.760 --> 00:41:45.630
1% a year is setting aside these funds where it's starting

00:41:45.630 --> 00:41:46.239
at six hundred and

00:41:46.239 --> 00:41:51.380
twenty thousand dollars in 2019 and it grows to three point

00:41:51.380 --> 00:41:52.159
three million

00:41:52.159 --> 00:41:58.000
dollars in 2023 so again I want to emphasize built into

00:41:58.000 --> 00:42:00.119
that 1% increase in

00:42:00.119 --> 00:42:04.199
the revenue requirement with the debt service rolling off

00:42:04.199 --> 00:42:05.039
you're able to

00:42:05.039 --> 00:42:08.530
increase the cash you're setting aside so you can pay cash

00:42:08.530 --> 00:42:09.760
for this equipment

00:42:09.760 --> 00:42:17.110
and minimize the issuance of debt so really good good story

00:42:17.110 --> 00:42:18.719
there question

00:42:18.719 --> 00:42:22.219
yes on the on the debt service that's rolling off is is

00:42:22.219 --> 00:42:24.000
that associated with

00:42:24.000 --> 00:42:28.880
just what you said the equipment trucks and it's a

00:42:28.880 --> 00:42:30.239
combination of things but I

00:42:30.239 --> 00:42:34.289
call short-term assets yeah it's equipment and the landfill

00:42:34.289 --> 00:42:34.880
so it's a

00:42:34.880 --> 00:42:41.420
combination of rolling stock and the landfill okay and then

00:42:41.420 --> 00:42:43.280
the projected new

00:42:43.280 --> 00:42:48.469
debt service the projected new debt service some of that is

00:42:48.469 --> 00:42:49.199
related to

00:42:49.199 --> 00:42:53.440
rolling stock so some equipment can't move straight to a

00:42:53.440 --> 00:42:54.920
cash right paying as

00:42:54.920 --> 00:42:59.159
you go so it's a combination of both so you're increasing

00:42:59.159 --> 00:43:00.440
the cash minimum

00:43:00.440 --> 00:43:05.800
reducing your debt in 2023 there is a little bit of funding

00:43:05.800 --> 00:43:07.920
for design

00:43:07.920 --> 00:43:11.969
planning engineering consulting services for the new cell

00:43:11.969 --> 00:43:13.079
that you will be

00:43:13.079 --> 00:43:21.760
building okay and this is really the bottom well this is

00:43:21.760 --> 00:43:22.239
one of the key

00:43:22.239 --> 00:43:24.980
things I want to focus on it's pretty close to be in the

00:43:24.980 --> 00:43:26.840
bottom line when you

00:43:26.840 --> 00:43:31.559
look at the utility overall it's under recovering about

00:43:31.559 --> 00:43:32.159
three hundred and four

00:43:32.159 --> 00:43:35.340
thousand dollars are projected to under recover three

00:43:35.340 --> 00:43:36.840
hundred and four thousand

00:43:36.840 --> 00:43:41.599
dollars in 2019 however what I want to emphasize with

00:43:41.599 --> 00:43:42.920
project the continued

00:43:42.920 --> 00:43:48.760
projected growth in the city and with that cost containment

00:43:48.760 --> 00:43:51.440
1% increases there

00:43:51.440 --> 00:43:57.139
you're projected to over recover gradually over time so by

00:43:57.139 --> 00:43:59.679
2023 at these

00:43:59.679 --> 00:44:04.360
projected costs you'd have a over recovery of about 3.7

00:44:04.360 --> 00:44:06.480
million cumulative

00:44:06.480 --> 00:44:11.510
over recovery of about 8.1 million as we all know there are

00:44:11.510 --> 00:44:12.480
a lot of things that

00:44:12.480 --> 00:44:18.030
can happen to you know create surprises I'll give you an

00:44:18.030 --> 00:44:19.199
example you're in the

00:44:19.199 --> 00:44:23.250
commercial roll-off business when a recession hits we work

00:44:23.250 --> 00:44:24.360
with clients that

00:44:24.360 --> 00:44:29.630
business that can drop by two-thirds and that again fixed

00:44:29.630 --> 00:44:31.119
cost business that

00:44:31.119 --> 00:44:36.000
revenue can drop quickly so we didn't bake in a recession

00:44:36.000 --> 00:44:37.519
here because we're

00:44:37.519 --> 00:44:42.039
not that good at forecasting those things but this is based

00:44:42.039 --> 00:44:42.239
on a

00:44:42.239 --> 00:44:47.210
conservative forecast going forward okay so overall the

00:44:47.210 --> 00:44:49.119
utilities in good shape

00:44:49.119 --> 00:44:58.090
going forward so the findings recommendations we have we do

00:44:58.090 --> 00:44:58.960
not I

00:44:58.960 --> 00:45:02.519
know you've had a recent decrease in the residential rate

00:45:02.519 --> 00:45:03.519
we would not

00:45:03.519 --> 00:45:07.900
recommend any further decreases in the residential rates in

00:45:07.900 --> 00:45:09.840
fiscal year 2019

00:45:09.840 --> 00:45:14.440
and for the foreseeable future I'd keep them as is we would

00:45:14.440 --> 00:45:16.599
recommend that you

00:45:16.599 --> 00:45:18.800
increase the wholesale rate you have about a hundred

00:45:18.800 --> 00:45:19.760
thousand tons a year

00:45:19.760 --> 00:45:24.059
that comes in from private contractors and we would

00:45:24.059 --> 00:45:26.280
recommend and we looked at

00:45:26.280 --> 00:45:30.489
the market we talked to numerous folks we would recommend

00:45:30.489 --> 00:45:31.400
an increase there

00:45:31.400 --> 00:45:37.159
from 23 to 2450 per ton it's a dollar 50 per ton it would

00:45:37.159 --> 00:45:38.840
generate about another

00:45:38.840 --> 00:45:41.909
hundred and fifty thousand dollars one of the things

00:45:41.909 --> 00:45:43.519
whenever we work with folks

00:45:43.519 --> 00:45:47.619
on this we recommend small incremental changes if you're

00:45:47.619 --> 00:45:48.480
doing this versus

00:45:48.480 --> 00:45:53.130
drastic increases you don't want to chase off the tonnage

00:45:53.130 --> 00:45:54.280
again in a fixed

00:45:54.280 --> 00:45:58.329
cost business but I would start recommending you look at

00:45:58.329 --> 00:45:59.639
moving that up

00:45:59.639 --> 00:46:03.869
we'd also recommend you look at put or pay contracts if you

00:46:03.869 --> 00:46:04.840
're familiar with

00:46:04.840 --> 00:46:08.329
them on the water side with taker pay contracts it's very

00:46:08.329 --> 00:46:09.280
similar in other

00:46:09.280 --> 00:46:11.949
words if you have a contract let's say with waste

00:46:11.949 --> 00:46:13.500
connections and they say we'll

00:46:13.500 --> 00:46:17.800
bring you 30,000 tons a year at this rate then if they only

00:46:17.800 --> 00:46:19.440
bring you 27,000

00:46:19.440 --> 00:46:25.230
tons they still pay for 30,000 tons okay we'd also

00:46:25.230 --> 00:46:27.159
recommend you maintain the

00:46:27.159 --> 00:46:30.539
commercial dumpster rates that you have right now you may

00:46:30.539 --> 00:46:31.719
want to look at

00:46:31.719 --> 00:46:34.489
modifying them in the future I think the key thing I want

00:46:34.489 --> 00:46:35.920
to emphasize right now

00:46:35.920 --> 00:46:40.050
we're not recommending any rate changes other than that

00:46:40.050 --> 00:46:42.800
wholesale rate from $23

00:46:42.800 --> 00:46:47.719
to $24.50 what I would recommend is during this fiscal year

00:46:47.719 --> 00:46:48.920
2019 you kind of

00:46:48.920 --> 00:46:52.429
look at some of your rates versus your recoveries and under

00:46:52.429 --> 00:46:53.400
recoveries what

00:46:53.400 --> 00:46:56.510
have you to put a game plan together but you have the

00:46:56.510 --> 00:46:57.679
luxury of having this

00:46:57.679 --> 00:47:00.750
upcoming fiscal year to kind of figure out okay where do we

00:47:00.750 --> 00:47:01.639
want to go going

00:47:01.639 --> 00:47:04.610
forward for the next five years so it's really nice you

00:47:04.610 --> 00:47:05.519
have that luxury of

00:47:05.519 --> 00:47:09.239
being able to plan for that tied to that you may want to

00:47:09.239 --> 00:47:11.280
look at your commercial

00:47:11.280 --> 00:47:14.849
rate structure and how that's set up you might want to look

00:47:14.849 --> 00:47:16.039
at tweaking that a

00:47:16.039 --> 00:47:21.590
little bit key thing and especially with a community that's

00:47:21.590 --> 00:47:23.960
growing it's really

00:47:23.960 --> 00:47:27.519
important to look and make sure that you're you've got all

00:47:27.519 --> 00:47:28.480
of your proper

00:47:28.480 --> 00:47:32.639
container counts everybody's being billed as they should be

00:47:32.639 --> 00:47:33.639
both on

00:47:33.639 --> 00:47:38.519
commercial residential the recycling customers and also at

00:47:38.519 --> 00:47:40.300
the landfill there

00:47:40.300 --> 00:47:42.659
a number of different services provided there I know you've

00:47:42.659 --> 00:47:43.320
had some other

00:47:43.320 --> 00:47:47.530
presentations on that recently but being able to track the

00:47:47.530 --> 00:47:49.199
specific tonnages by

00:47:49.199 --> 00:47:53.250
the specific services helps you to figure out okay how our

00:47:53.250 --> 00:47:54.039
how's our cost

00:47:54.039 --> 00:48:00.650
recovery versus the costs incurred okay and then what we

00:48:00.650 --> 00:48:02.000
just said is you know

00:48:02.000 --> 00:48:05.489
any over recoveries again setting those aside into a

00:48:05.489 --> 00:48:08.079
restricted reserve would be

00:48:08.079 --> 00:48:12.139
good again keep in mind you will be looking at a new

00:48:12.139 --> 00:48:14.079
landfill cell out in

00:48:14.079 --> 00:48:20.320
fiscal year 2024 and then finally there was some discussion

00:48:20.320 --> 00:48:21.559
again like I said

00:48:21.559 --> 00:48:25.610
looking at 2019 and what do you want to consider as far as

00:48:25.610 --> 00:48:26.880
tweaking rates and

00:48:26.880 --> 00:48:30.260
here's the key thing I want to emphasize if you're looking

00:48:30.260 --> 00:48:31.519
at your rate structure

00:48:31.519 --> 00:48:35.269
we're talking about tweaking things or moving things you

00:48:35.269 --> 00:48:36.480
know evaluating those

00:48:36.480 --> 00:48:40.530
options there's nothing major that you have to look at and

00:48:40.530 --> 00:48:41.280
that's the the good

00:48:41.280 --> 00:48:47.369
news and with that that's my presentation I'm glad to take

00:48:47.369 --> 00:48:48.400
any any more questions

00:48:48.400 --> 00:48:57.239
you may have questions I had one I think you maybe

00:48:57.239 --> 00:48:58.639
addressed it this the slide

00:48:58.639 --> 00:49:11.420
well slide 11 that that we keep it's showing that we're we

00:49:11.420 --> 00:49:12.880
're not collecting

00:49:12.880 --> 00:49:22.400
enough slide 11 there we go did our recent rate reduction

00:49:22.400 --> 00:49:23.920
make that happen

00:49:23.920 --> 00:49:35.440
or you had a lot of moving parts here that that is correct

00:49:35.440 --> 00:49:37.280
that was a component

00:49:37.280 --> 00:49:40.440
of it one of the things we always say you remember those 22

00:49:40.440 --> 00:49:41.519
service categories

00:49:41.519 --> 00:49:46.789
I showed you you never know exactly where you are until I

00:49:46.789 --> 00:49:47.360
mean to give you

00:49:47.360 --> 00:49:51.039
an idea you know the hundred-plus employees you have all

00:49:51.039 --> 00:49:52.400
the equipment we

00:49:52.400 --> 00:49:56.010
went through exercise which is what we always do in cost of

00:49:56.010 --> 00:49:57.119
service studies

00:49:57.119 --> 00:50:02.280
where every person every piece of equipment is allocated to

00:50:02.280 --> 00:50:03.480
those 22

00:50:03.480 --> 00:50:06.719
different services and some of them pretty easy you say hey

00:50:06.719 --> 00:50:07.519
you know this

00:50:07.519 --> 00:50:10.579
this guy is out there he's collecting garbage five days a

00:50:10.579 --> 00:50:11.360
week he's a hundred

00:50:11.360 --> 00:50:15.489
percent on residential refuse or you know whatever and that

00:50:15.489 --> 00:50:16.320
piece of equipment

00:50:16.320 --> 00:50:19.389
but then there are other pieces they may be allocated and

00:50:19.389 --> 00:50:20.639
there's certain work

00:50:20.639 --> 00:50:24.139
that seasonal also so you have to allocate that so there

00:50:24.139 --> 00:50:25.519
was a lot of work

00:50:25.519 --> 00:50:29.570
that went into allocating all those costs and so what I

00:50:29.570 --> 00:50:30.599
always say is you

00:50:30.599 --> 00:50:34.989
never know where what your costs are until you go through

00:50:34.989 --> 00:50:36.360
an exercise like

00:50:36.360 --> 00:50:43.969
this so it's a combination of things there okay and then on

00:50:43.969 --> 00:50:45.559
the 2250 for the

00:50:45.559 --> 00:50:49.920
landfill rate what are other rates around us is that you

00:50:49.920 --> 00:50:50.400
said you did a

00:50:50.400 --> 00:50:54.519
market right analysis yeah generally speaking and I'll give

00:50:54.519 --> 00:50:54.960
you a broad

00:50:54.960 --> 00:50:59.380
range you're looking at around 30 to 35 dollars this what

00:50:59.380 --> 00:51:00.880
the the post to gate

00:51:00.880 --> 00:51:06.199
rate now here's the one thing oh here's my caveat those are

00:51:06.199 --> 00:51:07.559
posted gate rates

00:51:07.559 --> 00:51:12.059
now if someone is bringing a large volume you will get a

00:51:12.059 --> 00:51:13.480
discounted rate

00:51:13.480 --> 00:51:17.550
that you won't know and especially if it's a private they

00:51:17.550 --> 00:51:19.000
do not want to share

00:51:19.000 --> 00:51:22.730
and say what we're giving you know as far as a discounted

00:51:22.730 --> 00:51:23.960
rate but the gate

00:51:23.960 --> 00:51:27.449
rates we're seeing that are posted are 30 to 35 dollars

00:51:27.449 --> 00:51:29.000
kind of the benchmark

00:51:29.000 --> 00:51:32.760
of who sets the the standard in the DFW area but you're

00:51:32.760 --> 00:51:34.119
pretty far away so

00:51:34.119 --> 00:51:38.170
transportation costs become an issue but you know overall

00:51:38.170 --> 00:51:39.559
lowest is the Dallas

00:51:39.559 --> 00:51:43.800
McComas Bluff landfill we spend time talking with those

00:51:43.800 --> 00:51:44.679
folks because they

00:51:44.679 --> 00:51:49.849
have a put or pay contract process they offer lower rates

00:51:49.849 --> 00:51:51.679
for higher volumes

00:51:51.679 --> 00:51:56.239
with that said your you know they have rates that decline

00:51:56.239 --> 00:51:57.920
lower than you know

00:51:57.920 --> 00:52:04.519
the 23 24 but you're still cheaper up here generally

00:52:04.519 --> 00:52:06.000
speaking that moving

00:52:06.000 --> 00:52:09.769
again a dollar dollar 50 you should be in pretty good shape

00:52:09.769 --> 00:52:10.760
from that standpoint

00:52:10.760 --> 00:52:15.510
and we're not so cheap that we're getting too much garbage

00:52:15.510 --> 00:52:16.360
so that we

00:52:16.360 --> 00:52:20.539
can't serve our own citizens over no I mean you're not from

00:52:20.539 --> 00:52:21.800
that standpoint it

00:52:21.800 --> 00:52:25.329
does bring up and again it's one of those issues in cities

00:52:25.329 --> 00:52:26.480
wrestle with this

00:52:26.480 --> 00:52:30.530
topic how much waste do you want to bring in from outside

00:52:30.530 --> 00:52:31.440
if you have

00:52:31.440 --> 00:52:35.119
capacity and again that it cuts both ways so I'm not saying

00:52:35.119 --> 00:52:36.199
what you should

00:52:36.199 --> 00:52:39.260
or shouldn't do but you know for instance we've been

00:52:39.260 --> 00:52:40.119
working with the

00:52:40.119 --> 00:52:44.840
city of Tucson for the last 15 years they bring in a

00:52:44.840 --> 00:52:46.119
significant amount of

00:52:46.119 --> 00:52:51.960
waste they compete in their market but they bring in waste

00:52:51.960 --> 00:52:54.400
from outside just

00:52:54.400 --> 00:52:57.469
their city residential and commercial trucks it's still

00:52:57.469 --> 00:52:58.400
collected in the city

00:52:58.400 --> 00:53:04.429
but by other by privates but it can be a source of revenue

00:53:04.429 --> 00:53:06.199
for you but it does

00:53:06.199 --> 00:53:09.420
fill up your airspace so you've got to figure out what your

00:53:09.420 --> 00:53:10.400
balance is there

00:53:10.400 --> 00:53:15.519
and what you want so you I think you mentioned a hundred

00:53:15.519 --> 00:53:17.760
thousand tons about

00:53:17.760 --> 00:53:22.800
it's what we average right from wholesale customers is the

00:53:22.800 --> 00:53:23.599
the cost of

00:53:23.599 --> 00:53:27.199
service on wholesale does that take into account airspace

00:53:27.199 --> 00:53:29.000
it's being taken up yes

00:53:29.000 --> 00:53:43.889
no it factors all that in other comments I'll just go ahead

00:53:43.889 --> 00:53:44.119
to outside garbage

00:53:44.119 --> 00:53:49.650
coming in because you know I don't understand that I guess

00:53:49.650 --> 00:53:49.880
I don't I think

00:53:49.880 --> 00:53:56.449
the you may want to answer this my general idea is if you

00:53:56.449 --> 00:53:57.840
're if you're we

00:53:57.840 --> 00:54:06.809
shouldn't be we should be recovering our cost larger that's

00:54:06.809 --> 00:54:10.599
my it is it is a as

00:54:10.599 --> 00:54:16.360
Dave said it's it's a source of revenue that offsets fixed

00:54:16.360 --> 00:54:22.760
costs we have but do

00:54:22.760 --> 00:54:26.920
we know that it's actually offsetting anything I mean look

00:54:26.920 --> 00:54:27.760
at those numbers to

00:54:27.760 --> 00:54:30.000
see if it's worth taking that I can take a stab at this

00:54:30.000 --> 00:54:31.159
this is definitely a kind

00:54:31.159 --> 00:54:34.030
of a policy discussion and probably one that we don't have

00:54:34.030 --> 00:54:34.880
a lot of time for

00:54:34.880 --> 00:54:38.260
today but at a high level a lot of landfills will look at

00:54:38.260 --> 00:54:39.099
bringing in

00:54:39.099 --> 00:54:43.150
outside waste not to cover cost what your goal would be is

00:54:43.150 --> 00:54:44.320
we cover our cost

00:54:44.320 --> 00:54:49.519
for our citizens through rate recovery then you can also

00:54:49.519 --> 00:54:50.960
look at subsidizing

00:54:50.960 --> 00:54:54.280
what you have in the city your residents your businesses by

00:54:54.280 --> 00:54:55.440
bringing in outside

00:54:55.440 --> 00:54:59.070
waste and so it really comes down to the landfills an asset

00:54:59.070 --> 00:55:00.320
the airspace is an

00:55:00.320 --> 00:55:04.800
asset do we want to accept outside waste to help subsidize

00:55:04.800 --> 00:55:05.880
and reduce rates for

00:55:05.880 --> 00:55:08.940
our citizens and our businesses and so that's that's why

00:55:08.940 --> 00:55:09.920
you see some of those

00:55:09.920 --> 00:55:12.019
they can offer those that reduced rates because it's

00:55:12.019 --> 00:55:13.239
basically dealing with pure

00:55:13.239 --> 00:55:15.590
profit at that stage because you've already covered all

00:55:15.590 --> 00:55:16.679
your costs through

00:55:16.679 --> 00:55:20.170
your curbside rates we're not there yet but as mr. Yankee

00:55:20.170 --> 00:55:21.639
said we're financially

00:55:21.639 --> 00:55:24.199
positioned that we can let the market kind of come to us

00:55:24.199 --> 00:55:25.260
over the next four to

00:55:25.260 --> 00:55:29.329
five years and we've much we have much more flexibility as

00:55:29.329 --> 00:55:30.480
a utility to kind of

00:55:30.480 --> 00:55:34.110
deal with do we want to compete and if so at what level and

00:55:34.110 --> 00:55:35.000
what is that air

00:55:35.000 --> 00:55:39.050
space really worth in terms of selling in the open market

00:55:39.050 --> 00:55:39.840
where we've been up

00:55:39.840 --> 00:55:42.909
to this point is we've been kind of strapped by debt to

00:55:42.909 --> 00:55:43.960
where if wholesale

00:55:43.960 --> 00:55:46.119
were to leave today we'd have a two to three million dollar

00:55:46.119 --> 00:55:46.960
hole in our budget

00:55:46.960 --> 00:55:50.030
that we'd be hard-pressed to cover and so we're not

00:55:50.030 --> 00:55:51.599
competitively where we need

00:55:51.599 --> 00:55:53.969
to be but in the next four to five years I think we will

00:55:53.969 --> 00:55:55.239
definitely be well

00:55:55.239 --> 00:55:57.619
positioned to take advantage of that if we want to do it so

00:55:57.619 --> 00:56:00.800
that makes sense yes

00:56:00.800 --> 00:56:06.349
right okay there's no other questions for mr. Yankee I do

00:56:06.349 --> 00:56:07.280
have a few things

00:56:07.280 --> 00:56:11.800
that I can follow up on just from a management standpoint

00:56:19.000 --> 00:56:22.309
all right so thank you to Dave also again I want to

00:56:22.309 --> 00:56:23.880
reiterate thank you to

00:56:23.880 --> 00:56:26.949
our staff they've done a tremendous amount of work Lee

00:56:26.949 --> 00:56:28.119
Rodriguez Tina Eck

00:56:28.119 --> 00:56:32.170
Nick Vincent it's been a kind of a team effort as we work

00:56:32.170 --> 00:56:32.880
through this budget

00:56:32.880 --> 00:56:35.849
process like I said we started last June on our budget and

00:56:35.849 --> 00:56:36.760
so we hope to bring

00:56:36.760 --> 00:56:39.400
that forward to you in the next few next couple of weeks

00:56:39.400 --> 00:56:40.880
and then we'll also be

00:56:40.880 --> 00:56:45.039
talking a little bit about rates we do have some right

00:56:45.039 --> 00:56:45.840
corrections that need to

00:56:45.840 --> 00:56:48.590
be addressed as mr. Yankee said it's definitely doable with

00:56:48.590 --> 00:56:49.219
where we are

00:56:49.219 --> 00:56:52.800
positioned financially what we're really talking about is

00:56:52.800 --> 00:56:53.039
is rate

00:56:53.039 --> 00:56:57.269
subsidization and the little green and red font that he had

00:56:57.269 --> 00:56:58.000
up there gave you

00:56:58.000 --> 00:57:01.550
an indication of what's a recovering its cost and what's

00:57:01.550 --> 00:57:03.079
under recovering our

00:57:03.079 --> 00:57:07.030
goal unless directed otherwise as a service provider would

00:57:07.030 --> 00:57:08.000
be cost recovery

00:57:08.000 --> 00:57:11.150
through equitable rate design what that means is if you're

00:57:11.150 --> 00:57:12.159
using the service

00:57:12.159 --> 00:57:15.659
you're paying cost and nothing more for our residents and

00:57:15.659 --> 00:57:17.719
our businesses we do

00:57:17.719 --> 00:57:20.179
have some rate subsidization that's happening between and

00:57:20.179 --> 00:57:20.719
within rate

00:57:20.719 --> 00:57:24.039
classes what that means is you may have residents subsid

00:57:24.039 --> 00:57:25.400
izing a program at the

00:57:25.400 --> 00:57:28.469
landfill that's not recovering its cost likewise you may

00:57:28.469 --> 00:57:28.960
have a business

00:57:28.960 --> 00:57:31.699
subsidizing a residential program that's not recovering its

00:57:31.699 --> 00:57:33.039
cost as well and so

00:57:33.039 --> 00:57:36.329
kind of tying that back to the operational discussion we

00:57:36.329 --> 00:57:37.079
had a couple

00:57:37.079 --> 00:57:39.909
of weeks ago is if we have a program that's not performing

00:57:39.909 --> 00:57:40.800
and not recovering

00:57:40.800 --> 00:57:46.000
its cost we're not trying to dismantle programs that both

00:57:46.000 --> 00:57:46.840
the board and the

00:57:46.840 --> 00:57:49.909
council want to keep but we really feel like it's important

00:57:49.909 --> 00:57:50.760
that we present that

00:57:50.760 --> 00:57:53.079
to you all and give you a clear indication of here's what

00:57:53.079 --> 00:57:53.800
the program's

00:57:53.800 --> 00:57:56.869
purpose is here's what's intended to do and if we want to

00:57:56.869 --> 00:57:58.239
continue going on it's

00:57:58.239 --> 00:58:00.590
going to need to be subsidized in some form or fashion and

00:58:00.590 --> 00:58:01.280
this is how we go

00:58:01.280 --> 00:58:03.559
about that we just want to be very candid and transparent

00:58:03.559 --> 00:58:05.320
about it our

00:58:05.320 --> 00:58:07.780
approach on this like mr. Yankee said is we want to make

00:58:07.780 --> 00:58:08.639
sure that we don't have

00:58:08.639 --> 00:58:11.139
drastic changes in our rates one way or the other so we

00:58:11.139 --> 00:58:12.400
want to try to phase in

00:58:12.400 --> 00:58:16.000
corrections over time number one because we do compete

00:58:16.000 --> 00:58:16.800
unlike some of the other

00:58:16.800 --> 00:58:19.869
utilities we have market rates that we have to be sensitive

00:58:19.869 --> 00:58:20.760
to for the landfill

00:58:20.760 --> 00:58:24.809
we also compete for commercial recycling and so we can't

00:58:24.809 --> 00:58:26.159
have a lot of drastic

00:58:26.159 --> 00:58:29.219
rate swings otherwise we may end up losing some of that

00:58:29.219 --> 00:58:30.280
business so we want

00:58:30.280 --> 00:58:33.599
to phase those in over time and protect the funds financial

00:58:33.599 --> 00:58:35.159
health as Dave said

00:58:35.159 --> 00:58:38.630
we've reduced our debt funding significantly I think he did

00:58:38.630 --> 00:58:39.119
a really

00:58:39.119 --> 00:58:41.610
nice job of illustrating what our goal is to try to get

00:58:41.610 --> 00:58:42.639
more cash funding or

00:58:42.639 --> 00:58:46.690
pay-as-you-go and also to the operational review we want to

00:58:46.690 --> 00:58:46.800
improve

00:58:46.800 --> 00:58:50.289
operational efficiency I'll highlight what that looks like

00:58:50.289 --> 00:58:50.920
on the next slide

00:58:50.920 --> 00:58:54.150
and then like I said evaluating those subsidized programs

00:58:54.150 --> 00:58:55.159
and services and

00:58:55.159 --> 00:58:57.559
just making sure that we're all kind of calibrated on what

00:58:57.559 --> 00:58:58.320
we want to do with

00:58:58.320 --> 00:59:02.840
those moving forward for the rate of classes that we're

00:59:02.840 --> 00:59:03.760
talking about I want

00:59:03.760 --> 00:59:06.510
to highlight just a little bit of our approach on that like

00:59:06.510 --> 00:59:07.199
Dave said with

00:59:07.199 --> 00:59:09.789
residential we would maintain rates at existing levels that

00:59:09.789 --> 00:59:10.599
being said there

00:59:10.599 --> 00:59:13.250
may be opportunities to adjust rates if we are able to

00:59:13.250 --> 00:59:14.239
drastically improve

00:59:14.239 --> 00:59:16.949
operational efficiency some of the things that you heard in

00:59:16.949 --> 00:59:17.760
the operational

00:59:17.760 --> 00:59:20.829
review where we can improve routing increase route sizes

00:59:20.829 --> 00:59:21.719
maybe reduce the

00:59:21.719 --> 00:59:24.389
number of trucks that we have to have on the road fleet

00:59:24.389 --> 00:59:25.320
maintenance is one of

00:59:25.320 --> 00:59:28.010
those key factors that are key recommendations that came

00:59:28.010 --> 00:59:28.559
out of that

00:59:28.559 --> 00:59:31.849
report as well is we're carrying a very heavy part of our

00:59:31.849 --> 00:59:33.000
fleet is back up if

00:59:33.000 --> 00:59:35.159
our fleet starts performing better then that's a

00:59:35.159 --> 00:59:36.639
substantial reduction in cost

00:59:36.639 --> 00:59:39.710
and you're getting closer to a full cash funding versus

00:59:39.710 --> 00:59:40.679
debt funding some of

00:59:40.679 --> 00:59:44.409
your rolling stock and then we do have some of the under

00:59:44.409 --> 00:59:45.559
performing programs

00:59:45.559 --> 00:59:48.630
that we want to assess and seek direction from our

00:59:48.630 --> 00:59:49.679
residential yard waste

00:59:49.679 --> 00:59:52.170
is one that kind of comes to mind is it's it's about six

00:59:52.170 --> 00:59:53.320
dollars a month on

00:59:53.320 --> 00:59:55.429
everybody's residential bill it's bundled in with your

00:59:55.429 --> 00:59:57.280
residential rates not

00:59:57.280 --> 00:59:59.460
everyone's using that every month and so that's what we

00:59:59.460 --> 01:00:00.440
talked about when it's

01:00:00.440 --> 01:00:03.539
subsidized doesn't mean it's a bad thing it's just one of

01:00:03.539 --> 01:00:04.280
those things we want to

01:00:04.280 --> 01:00:07.349
make sure that we're kind of calibrated with how we're

01:00:07.349 --> 01:00:09.159
performing that from a

01:00:09.159 --> 01:00:12.650
commercial rate structure standpoint if you look at our

01:00:12.650 --> 01:00:14.440
rates on the page they

01:00:14.440 --> 01:00:16.730
don't really give a full indication the complexity that's

01:00:16.730 --> 01:00:17.679
there with commercial

01:00:17.679 --> 01:00:21.420
rates so our goal with this year's race is to make sure

01:00:21.420 --> 01:00:22.280
that everything is very

01:00:22.280 --> 01:00:25.769
transparent and what you see is what you get and then

01:00:25.769 --> 01:00:27.199
within that commercial is

01:00:27.199 --> 01:00:30.420
the the one rate category where there is some subsidization

01:00:30.420 --> 01:00:31.340
within the rate

01:00:31.340 --> 01:00:35.380
class meaning a small container may not be fully recovering

01:00:35.380 --> 01:00:36.159
its cost a large

01:00:36.159 --> 01:00:38.989
container may be slightly over recovering and we want to

01:00:38.989 --> 01:00:39.519
try to balance

01:00:39.519 --> 01:00:44.269
that out if we can short term and this may answer the

01:00:44.269 --> 01:00:45.000
question that came up

01:00:45.000 --> 01:00:48.070
earlier is you know why are we drawing down and having an

01:00:48.070 --> 01:00:49.159
under recovery as a

01:00:49.159 --> 01:00:52.469
fund we do have some excess reserves that's kind of how we

01:00:52.469 --> 01:00:53.139
address the

01:00:53.139 --> 01:00:56.340
residential rate reduction we're still taking a look at

01:00:56.340 --> 01:00:57.599
this but we feel like

01:00:57.599 --> 01:00:59.559
we may be able to do the same thing for some of the

01:00:59.559 --> 01:01:00.800
commercial rates that are

01:01:00.800 --> 01:01:04.539
over recovering if that's possible we'll bring that forward

01:01:04.539 --> 01:01:04.659
as a

01:01:04.659 --> 01:01:07.730
recommendation and utilize those reserves to to reduce

01:01:07.730 --> 01:01:08.239
those over

01:01:08.239 --> 01:01:11.440
recovering rates from a long-term standpoint we want to

01:01:11.440 --> 01:01:12.079
slowly adjust

01:01:12.079 --> 01:01:15.320
those to toward cost recovery again we don't want to have

01:01:15.320 --> 01:01:16.559
big spikes one way or

01:01:16.559 --> 01:01:20.309
the other from a landfill standpoint I think Dave summed

01:01:20.309 --> 01:01:21.960
this up very well we

01:01:21.960 --> 01:01:24.500
want to make sure that we're recovering our costs

01:01:24.500 --> 01:01:25.800
addressing the subsidization

01:01:25.800 --> 01:01:29.849
while remaining competitive in the market so that is making

01:01:29.849 --> 01:01:30.960
sure that we adjust

01:01:30.960 --> 01:01:33.239
toward the market establish those put or pay agreements

01:01:33.239 --> 01:01:34.159
with some of our bigger

01:01:34.159 --> 01:01:37.230
haulers and then also see direction on some of the subsid

01:01:37.230 --> 01:01:38.159
ized programs and

01:01:38.159 --> 01:01:42.309
operations like we talked about with PUB and council the

01:01:42.309 --> 01:01:43.400
building materials

01:01:43.400 --> 01:01:46.969
recovery and rubble processing on Dave's slide earlier it's

01:01:46.969 --> 01:01:47.800
about a two million

01:01:47.800 --> 01:01:51.460
dollar under recovery per year that's something that we

01:01:51.460 --> 01:01:53.199
feel like it we we

01:01:53.199 --> 01:01:56.260
certainly want to take the utilities board in the council's

01:01:56.260 --> 01:01:56.679
direction but that

01:01:56.679 --> 01:01:59.739
is something that that gets picked up by residential and

01:01:59.739 --> 01:02:00.599
commercial rates if it's

01:02:00.599 --> 01:02:06.840
not performing as well as it should so is that that those

01:02:06.840 --> 01:02:08.260
operations are they

01:02:08.260 --> 01:02:13.719
included in the 2019 proposed budget they will be and that

01:02:13.719 --> 01:02:14.219
's that's a good

01:02:14.219 --> 01:02:16.679
segue to the next slide our proposed budget is going to be

01:02:16.679 --> 01:02:17.320
coming back to you

01:02:17.320 --> 01:02:20.809
in July the 23rd we met with the council I believe it was

01:02:20.809 --> 01:02:21.800
last week or the week

01:02:21.800 --> 01:02:24.860
before last and essentially the direction we got from the

01:02:24.860 --> 01:02:25.280
council was to

01:02:25.280 --> 01:02:28.530
place a temporary hold on both rebel processing as well as

01:02:28.530 --> 01:02:29.360
the building

01:02:29.360 --> 01:02:32.849
materials recovery that certainly kind of helps us stop the

01:02:32.849 --> 01:02:33.760
bleeding but it

01:02:33.760 --> 01:02:36.829
doesn't necessarily reduce ongoing cost and so that's

01:02:36.829 --> 01:02:37.840
something that we'll

01:02:37.840 --> 01:02:40.900
definitely kind of point out as we go through our budget

01:02:40.900 --> 01:02:41.760
process with you all

01:02:41.760 --> 01:02:45.389
so in terms of next steps we do still have some rate design

01:02:45.389 --> 01:02:46.639
work to complete

01:02:46.639 --> 01:02:49.699
as well as the final market study in terms of the rate

01:02:49.699 --> 01:02:50.599
correction strategy

01:02:50.599 --> 01:02:52.630
that I just laid out we do want to partner with Nugent on

01:02:52.630 --> 01:02:53.280
that and try to

01:02:53.280 --> 01:02:56.440
work through that plan over the next two to three months

01:02:56.440 --> 01:02:57.519
and then once that's

01:02:57.519 --> 01:03:00.260
that's crafted we'll come back to the the board and the

01:03:00.260 --> 01:03:01.199
council and seek

01:03:01.199 --> 01:03:04.550
direction on is that the strategy that we want to go we'll

01:03:04.550 --> 01:03:05.599
talk about timelines

01:03:05.599 --> 01:03:07.880
you know impact one way or the other and make sure that

01:03:07.880 --> 01:03:09.159
everyone's comfortable

01:03:09.159 --> 01:03:12.320
with the direction we're headed council received this

01:03:12.320 --> 01:03:13.960
presentation on July 17th

01:03:13.960 --> 01:03:16.789
and then they'll also receive the department budget after

01:03:16.789 --> 01:03:17.320
the pub on

01:03:17.320 --> 01:03:21.480
August the 4th with that I'm happy to stand for any

01:03:21.480 --> 01:03:22.159
questions that you have

01:03:22.159 --> 01:03:25.599
for from your Nugent

01:03:27.719 --> 01:03:32.079
questions looking forward to the see what the budget is

01:03:32.079 --> 01:03:34.199
gonna look like sir

01:03:34.199 --> 01:03:37.719
thank you

01:03:44.000 --> 01:03:48.320
okay that's the end of the work session our regular meeting

01:03:48.320 --> 01:03:51.199
we have consent

01:03:51.199 --> 01:03:59.309
agenda items ABC D&E and it's been recommended actually it

01:03:59.309 --> 01:04:01.360
's we're gonna

01:04:01.360 --> 01:04:01.360
need to pull item number a off consent we're still looking

01:04:01.360 --> 01:04:09.559
at some details on

01:04:09.559 --> 01:04:15.469
that agreement I understand so we're pulling item a so I'd

01:04:15.469 --> 01:04:16.800
ask at this time

01:04:16.800 --> 01:04:22.739
if there's any other items that any individual member would

01:04:22.739 --> 01:04:24.039
like to pull for

01:04:24.039 --> 01:04:34.519
individual consideration okay good any other items BCD or E

01:04:34.519 --> 01:04:38.280
on consent okay

01:04:38.280 --> 01:04:44.650
hearing none then is there a motion on items B C D&E on the

01:04:44.650 --> 01:04:45.679
consent agenda I

01:04:45.679 --> 01:04:49.800
move approval second I have a motion and a second to

01:04:49.800 --> 01:04:54.400
approve those items in your

01:04:54.400 --> 01:05:01.750
discussion all in favor say aye aye any opposed okay those

01:05:01.750 --> 01:05:02.840
items are approved as

01:05:02.840 --> 01:05:08.920
presented for items for individual consideration we have

01:05:08.920 --> 01:05:09.840
item a which is

01:05:09.840 --> 01:05:12.119
considered approval of the public utilities board meeting

01:05:12.119 --> 01:05:13.400
minutes of June

01:05:13.400 --> 01:05:22.960
25th 2018 any questions changes on those minutes is there a

01:05:22.960 --> 01:05:27.079
motion on item a then

01:05:27.480 --> 01:05:34.829
I'll move approval take it have a motion motion and a

01:05:34.829 --> 01:05:38.000
second discussion all in

01:05:38.000 --> 01:05:43.719
favor say aye any opposed not a maze approved item number B

01:05:43.719 --> 01:05:45.280
or item B is to

01:05:45.280 --> 01:05:48.349
consider recommending approval of the municipal electric

01:05:48.349 --> 01:05:50.360
fiscal year 2018 19

01:05:50.360 --> 01:05:53.719
operating in capital budget

01:05:58.280 --> 01:06:03.590
Mr. Chairman and members of the PAB Tony point the director

01:06:03.590 --> 01:06:06.960
of finance have just

01:06:06.960 --> 01:06:12.349
a very very quickly going to go over our financial forecast

01:06:12.349 --> 01:06:14.039
and and the budget

01:06:14.039 --> 01:06:18.090
for you for the municipal electric I will tell you that

01:06:18.090 --> 01:06:19.320
there has been no

01:06:19.320 --> 01:06:22.039
changes well there's been a couple minor changes that I'll

01:06:22.039 --> 01:06:23.079
walk through for you

01:06:23.079 --> 01:06:27.130
but no no real material changes from what you previously

01:06:27.130 --> 01:06:28.719
saw the council also

01:06:28.719 --> 01:06:32.210
has reviewed this and has also recommended approval so

01:06:32.210 --> 01:06:33.000
today we're

01:06:33.000 --> 01:06:36.489
seeking your formal approval on this particular budget and

01:06:36.489 --> 01:06:37.239
then we'll be

01:06:37.239 --> 01:06:41.289
presenting that to the council as part of their citywide

01:06:41.289 --> 01:06:42.519
budget discussion on

01:06:42.519 --> 01:06:46.969
August 2nd so just really quickly want to go through just

01:06:46.969 --> 01:06:48.519
the the financial

01:06:48.519 --> 01:06:52.980
assumptions that you've previously seen the first is this

01:06:52.980 --> 01:06:54.519
this forecast this

01:06:54.519 --> 01:06:58.039
budget assumes the payoff of twenty eight point six million

01:06:58.039 --> 01:06:58.960
dollars of the

01:06:58.960 --> 01:07:03.119
2010 TMP a related you know scrubber debt the plan would be

01:07:03.119 --> 01:07:04.599
to come back to the PAB

01:07:04.599 --> 01:07:08.739
in November December time frame and and then to the council

01:07:08.739 --> 01:07:09.719
with a with an

01:07:09.719 --> 01:07:13.500
ordinance to call this debt and pay it off we would be

01:07:13.500 --> 01:07:15.159
doing that sending a

01:07:15.159 --> 01:07:20.039
wire on February 15th and and extinguishing that that debt

01:07:20.039 --> 01:07:20.639
no base

01:07:20.639 --> 01:07:24.760
rate changes George went through the rates for you earlier

01:07:24.760 --> 01:07:25.280
talked to you a

01:07:25.280 --> 01:07:30.639
little bit about the TCR TCRF suspension that will result

01:07:30.639 --> 01:07:32.360
in decreases to both

01:07:32.360 --> 01:07:35.880
our residential and our commercial customers as well you

01:07:35.880 --> 01:07:36.840
know I'm not

01:07:36.840 --> 01:07:39.320
going to repeat everything George said again but uh but he

01:07:39.320 --> 01:07:41.079
's covered that again

01:07:41.079 --> 01:07:45.530
the ECA will be maintained at the current rate we've

01:07:45.530 --> 01:07:47.159
proposed to in the

01:07:47.159 --> 01:07:51.400
ECA ordinance to reflect the debt cost certainly reduced

01:07:51.400 --> 01:07:52.360
purchase power costs

01:07:52.360 --> 01:07:56.409
are part of this there's substantial reduction in the

01:07:56.409 --> 01:07:57.239
capital improvement

01:07:57.239 --> 01:08:00.949
program we there's been no changes since we previously

01:08:00.949 --> 01:08:02.320
discussed that with you

01:08:02.320 --> 01:08:09.719
and then of course the there's a move to cash fund a larger

01:08:09.719 --> 01:08:11.719
portion of the of the

01:08:11.719 --> 01:08:16.159
transmission and distribution that CIP program going

01:08:16.159 --> 01:08:18.119
forward I did want to show

01:08:18.119 --> 01:08:22.420
you just really quickly here the forecast we have made some

01:08:22.420 --> 01:08:23.380
formatting

01:08:23.380 --> 01:08:26.449
changes I think that you know without discussion with the

01:08:26.449 --> 01:08:27.039
council kind of help

01:08:27.039 --> 01:08:30.720
clarify things a little bit so I wanted to point out that

01:08:30.720 --> 01:08:31.840
we have first of all

01:08:31.840 --> 01:08:36.279
separated out our deck revenues that were previously part

01:08:36.279 --> 01:08:37.600
of the base rates

01:08:37.600 --> 01:08:39.569
and so we've separated that out to make that a little bit

01:08:39.569 --> 01:08:40.399
more transparent and

01:08:40.399 --> 01:08:44.550
clear additionally we've broken out the debt cost from the

01:08:44.550 --> 01:08:45.479
purchase power which

01:08:45.479 --> 01:08:48.819
is combined to again to just make that a little more

01:08:48.819 --> 01:08:50.279
transparent that was a

01:08:50.279 --> 01:08:53.850
request that the council had other than that there really

01:08:53.850 --> 01:08:55.800
is no changes other

01:08:55.800 --> 01:08:59.979
than a couple of minor items that I'd like to point out to

01:08:59.979 --> 01:09:00.319
you

01:09:01.840 --> 01:09:12.819
of course there was as George as a we discussed earlier

01:09:12.819 --> 01:09:13.479
with you on the

01:09:13.479 --> 01:09:16.130
miscellaneous reconnect fees those have been reduced that's

01:09:16.130 --> 01:09:16.880
approximately about

01:09:16.880 --> 01:09:21.350
two hundred thousand dollars of reduced revenue to DME but

01:09:21.350 --> 01:09:23.600
again it aligns that

01:09:23.600 --> 01:09:26.670
particular fee with what the true cost of service is for

01:09:26.670 --> 01:09:27.600
reconnecting those

01:09:27.600 --> 01:09:33.189
meters we've also included the deck related insurance that

01:09:33.189 --> 01:09:34.079
was previously

01:09:34.079 --> 01:09:36.359
not part of this budget but a little bit over two hundred

01:09:36.359 --> 01:09:37.399
thousand dollars that's

01:09:37.399 --> 01:09:41.960
included in the 17 18 estimate and going forward those are

01:09:41.960 --> 01:09:42.760
really the only

01:09:42.760 --> 01:09:47.270
changes that we've made to date be happy to answer any

01:09:47.270 --> 01:09:48.840
questions that you may have

01:09:48.840 --> 01:09:53.600
but we are seeking your formal recommendation today to

01:09:53.600 --> 01:09:54.920
proceed with

01:09:54.920 --> 01:09:57.989
this budget or any changes you may have so that we can

01:09:57.989 --> 01:09:59.279
proceed to the council on

01:09:59.279 --> 01:10:07.359
August 2nd I wanted to ask a question about the do we

01:10:07.359 --> 01:10:09.720
evaluate the energy

01:10:09.720 --> 01:10:14.779
cost this judgment annual annually or quarterly that is

01:10:14.779 --> 01:10:16.359
quarterly yes and do

01:10:16.359 --> 01:10:20.090
we have the ability to pass that adjustment on to our

01:10:20.090 --> 01:10:21.159
customers through

01:10:21.159 --> 01:10:24.399
there just it throughout the year that's correct okay and

01:10:24.399 --> 01:10:25.880
so will you come back to

01:10:25.880 --> 01:10:28.409
us if those change and we're gonna pass them on or we're

01:10:28.409 --> 01:10:29.479
just gonna do it on the

01:10:29.479 --> 01:10:32.689
floor no we will come back and seek your recommendation and

01:10:32.689 --> 01:10:33.199
also go to the

01:10:33.199 --> 01:10:37.449
council okay all right thank you I just want to make it

01:10:37.449 --> 01:10:38.640
come I like the breakout

01:10:38.640 --> 01:10:42.689
too it's a lot more transparent we can really see what's

01:10:42.689 --> 01:10:44.119
going on and I won't

01:10:44.119 --> 01:10:46.670
go through this but we've done a similar thing on the other

01:10:46.670 --> 01:10:47.640
debt information that

01:10:47.640 --> 01:10:51.710
we've provided to you and we'll provide to the council as

01:10:51.710 --> 01:10:53.439
well so okay any

01:10:53.439 --> 01:10:58.170
questions I know we've seen this before but this is as you

01:10:58.170 --> 01:10:59.520
say I like the way

01:10:59.520 --> 01:11:09.229
the categories are broken out any other questions on these

01:11:09.229 --> 01:11:11.119
no okay thank you

01:11:11.119 --> 01:11:18.520
thank you Tony do we have a motion then on item B

01:11:25.319 --> 01:11:30.000
we have a motion and a second any discussion all in favor

01:11:30.000 --> 01:11:31.640
say aye aye any

01:11:31.640 --> 01:11:37.000
opposed same sign okay item C is to consider recommending

01:11:37.000 --> 01:11:37.600
adoption of an

01:11:37.600 --> 01:11:40.909
ordinance of the city of Denton Texas authorizing the city

01:11:40.909 --> 01:11:41.819
manager or his

01:11:41.819 --> 01:11:45.869
designee to execute an advanced funding agreement in a form

01:11:45.869 --> 01:11:46.119
substantially

01:11:46.119 --> 01:11:49.750
similar as attached here to his exhibit to in the

01:11:49.750 --> 01:11:51.800
approximate amount of three

01:11:51.800 --> 01:11:55.850
million two hundred eleven thousand seven hundred twenty

01:11:55.850 --> 01:11:57.159
dollars which is to

01:11:57.159 --> 01:12:01.289
be finalized after bids are open by in between the state of

01:12:01.289 --> 01:12:02.239
Texas acting

01:12:02.239 --> 01:12:05.300
through the Texas Department of Transportation in the city

01:12:05.300 --> 01:12:05.720
of Denton

01:12:05.720 --> 01:12:10.000
regarding water and wastewater improvements associated with

01:12:10.000 --> 01:12:11.560
the US 77

01:12:11.560 --> 01:12:15.659
which is for work drive roadway widening project located

01:12:15.659 --> 01:12:16.880
between interstate

01:12:16.880 --> 01:12:21.880
highway 35 e to the south of farm-to-market 1830 within the

01:12:21.880 --> 01:12:22.319
city of

01:12:22.319 --> 01:12:28.779
Denton that's correct thank you yes good morning members of

01:12:28.779 --> 01:12:29.479
the pub I'm Chad

01:12:29.479 --> 01:12:31.729
Allen deputy city engineer and yes I'm going to talk about

01:12:31.729 --> 01:12:32.600
the Fort Worth Drive

01:12:32.600 --> 01:12:36.680
project we're relocating our utilities as part of that

01:12:36.680 --> 01:12:37.600
projects and it's also

01:12:37.600 --> 01:12:41.449
associated with the text on US 377 project and specifically

01:12:41.449 --> 01:12:42.199
I want to talk

01:12:42.199 --> 01:12:45.300
about an advanced funding agreement that's required for us

01:12:45.300 --> 01:12:46.180
to execute with

01:12:46.180 --> 01:12:49.670
text on it so that we can pay to remove our utilities from

01:12:49.670 --> 01:12:50.319
the text out right

01:12:50.319 --> 01:12:56.090
away so this map shows the scope of the text out project

01:12:56.090 --> 01:12:57.000
text out is going to

01:12:57.000 --> 01:13:01.050
widen for worth drive to be a six-lane facility with a

01:13:01.050 --> 01:13:02.640
raised median they're

01:13:02.640 --> 01:13:05.159
going to construct various turn lanes and the limits of the

01:13:05.159 --> 01:13:05.960
project start on

01:13:05.960 --> 01:13:09.539
the north end from I 35 East and they end south of Country

01:13:09.539 --> 01:13:11.159
Club Road or FM 1830

01:13:11.159 --> 01:13:14.220
so they're going to widen that to six lanes install a

01:13:14.220 --> 01:13:15.159
median they're going to

01:13:15.159 --> 01:13:17.609
construct traffic similar improvements at various

01:13:17.609 --> 01:13:19.159
intersections they're going to

01:13:19.159 --> 01:13:22.229
install an underground storm drain system and remove the

01:13:22.229 --> 01:13:23.079
roadside ditches

01:13:23.079 --> 01:13:25.520
and then they're going to build sidewalks on both sides of

01:13:25.520 --> 01:13:26.720
the roads road

01:13:26.720 --> 01:13:30.210
throughout the project limits so before they do that we're

01:13:30.210 --> 01:13:31.199
required to move our

01:13:31.199 --> 01:13:33.880
utilities outside of the text out right away text out does

01:13:33.880 --> 01:13:34.720
not allow public

01:13:34.720 --> 01:13:37.869
utilities to be located under new pavement for their

01:13:37.869 --> 01:13:39.079
projects so we have

01:13:39.079 --> 01:13:42.149
to move all of our utilities outside of the right away so

01:13:42.149 --> 01:13:43.239
for the last couple of

01:13:43.239 --> 01:13:46.500
years we've hired a consulting firm and we've designed our

01:13:46.500 --> 01:13:47.560
utility relocations

01:13:47.560 --> 01:13:51.560
and we've also our real estate group has obtained easements

01:13:51.560 --> 01:13:52.319
to put the new

01:13:52.319 --> 01:13:55.390
utilities in outside the right of way and then we've gotten

01:13:55.390 --> 01:13:55.880
temporary

01:13:55.880 --> 01:13:58.159
construction easements so we can actually build the utility

01:13:58.159 --> 01:13:58.800
improvements

01:13:58.800 --> 01:14:01.170
so we're moving them all outside the right of way in

01:14:01.170 --> 01:14:02.199
certain areas we're

01:14:02.199 --> 01:14:05.260
constructing new crossings across the right of way and then

01:14:05.260 --> 01:14:05.840
sometimes we have

01:14:05.840 --> 01:14:10.600
to adjust our utilities to avoid the text out improvements

01:14:10.600 --> 01:14:11.800
our consultant has

01:14:11.800 --> 01:14:13.689
designed final plans and what we've done is we put our

01:14:13.689 --> 01:14:15.520
construction plans in into

01:14:15.520 --> 01:14:18.810
the text out plans so text out is bidding the project all

01:14:18.810 --> 01:14:19.600
is one project

01:14:19.600 --> 01:14:22.270
the roadway project and the utility project has been

01:14:22.270 --> 01:14:23.439
combined so they're

01:14:23.439 --> 01:14:27.159
about to bid that job tomorrow unfortunately they won't pay

01:14:27.159 --> 01:14:27.439
for the

01:14:27.439 --> 01:14:30.500
utility improvements we have to pay for those and so we

01:14:30.500 --> 01:14:31.439
have to enter into an

01:14:31.439 --> 01:14:34.510
advanced funding agreement with text dot and that agreement

01:14:34.510 --> 01:14:35.279
sets out the terms

01:14:35.279 --> 01:14:37.970
and conditions of the payment and the agreement that you

01:14:37.970 --> 01:14:38.920
have in your backup

01:14:38.920 --> 01:14:42.100
right now is just draft the numbers that are in that

01:14:42.100 --> 01:14:43.359
agreement are based on

01:14:43.359 --> 01:14:46.430
construction cost estimates and they're approximate

01:14:46.430 --> 01:14:48.119
tomorrow text out opens bids

01:14:48.119 --> 01:14:50.270
and we'll have the final numbers but we didn't have those

01:14:50.270 --> 01:14:51.159
before bringing it to

01:14:51.159 --> 01:14:56.039
pub today so right now the approximate cost based on cost

01:14:56.039 --> 01:14:57.199
estimates from our

01:14:57.199 --> 01:14:59.779
consultant for the utility improvements is approximately

01:14:59.779 --> 01:15:01.439
three point two million

01:15:01.439 --> 01:15:06.399
dollars so text out is opening bids tomorrow and at that

01:15:06.399 --> 01:15:07.079
time we'll know the

01:15:07.079 --> 01:15:09.729
final numbers for the utility improvements we'll take the

01:15:09.729 --> 01:15:10.279
advanced

01:15:10.279 --> 01:15:13.119
funding agreement and update it with those numbers and that

01:15:13.119 --> 01:15:13.920
's the amount of

01:15:13.920 --> 01:15:17.409
money we expect to have to pay for for our utilities to be

01:15:17.409 --> 01:15:18.560
relocated as part of

01:15:18.560 --> 01:15:21.159
the project the only way that would increase is if we

01:15:21.159 --> 01:15:22.399
request change orders

01:15:22.399 --> 01:15:25.130
during construction or if we request additional work and

01:15:25.130 --> 01:15:26.039
then we would have

01:15:26.039 --> 01:15:29.109
to pay for that additional work so we'll have the final

01:15:29.109 --> 01:15:30.520
numbers tomorrow we'll

01:15:30.520 --> 01:15:32.970
update the AFA and then we'll take it we're planning to

01:15:32.970 --> 01:15:33.680
take it to City

01:15:33.680 --> 01:15:38.760
Council on July 17th so what we're asking you to do today

01:15:38.760 --> 01:15:39.720
is recommend

01:15:39.720 --> 01:15:42.800
adoption of an ordinance for the city to execute the AFA

01:15:42.800 --> 01:15:44.000
between the city and

01:15:44.000 --> 01:15:47.069
text dot and the approximate amount of 3.2 million the

01:15:47.069 --> 01:15:47.720
final amount will be

01:15:47.720 --> 01:15:50.390
determined tomorrow so that we can relocate our utilities

01:15:50.390 --> 01:15:51.039
as part of the

01:15:51.039 --> 01:15:56.800
Fort Worth Drive US 377 project and then if you have any

01:15:56.800 --> 01:15:57.560
questions I'll try to

01:15:57.560 --> 01:16:05.640
answer them just question and I did have a question on how

01:16:05.640 --> 01:16:06.880
on how increases are

01:16:06.880 --> 01:16:13.039
addressed these have to be requested by us yes for us to

01:16:13.039 --> 01:16:14.359
have any and I guess

01:16:14.359 --> 01:16:18.520
you know when you start replacing utilities who knows what

01:16:18.520 --> 01:16:19.000
you're gonna

01:16:19.000 --> 01:16:21.779
find that's exactly right so something could happen during

01:16:21.779 --> 01:16:22.319
the construction

01:16:22.319 --> 01:16:25.039
project that caused us to request additional work to be

01:16:25.039 --> 01:16:25.920
okay and we would

01:16:25.920 --> 01:16:35.479
have to pay for that yes I guess the only other question

01:16:35.479 --> 01:16:36.720
the ground pardon you

01:16:36.720 --> 01:16:39.890
never know what's well that's true the only other question

01:16:39.890 --> 01:16:40.680
is when the bids

01:16:40.680 --> 01:16:45.399
come in tomorrow I guess if it's you probably need to react

01:16:45.399 --> 01:16:46.680
to that before

01:16:46.680 --> 01:16:51.119
the next time we meet I would imagine if it's in

01:16:51.119 --> 01:16:53.439
significantly more than what we

01:16:53.439 --> 01:16:58.399
estimate now okay you know what what do we do well I guess

01:16:58.399 --> 01:16:59.159
it goes to council

01:16:59.159 --> 01:17:01.920
yes it goes to council with those final numbers with silent

01:17:01.920 --> 01:17:03.800
on the 17th okay so

01:17:03.800 --> 01:17:06.449
usually textile lacks for municipalities to take

01:17:06.449 --> 01:17:07.800
approximate numbers to council

01:17:07.800 --> 01:17:10.050
we try not to do that we want to take the final numbers to

01:17:10.050 --> 01:17:10.840
council right so

01:17:10.840 --> 01:17:13.310
this is the process we have to go through textile is sort

01:17:13.310 --> 01:17:14.079
of giving us an

01:17:14.079 --> 01:17:17.140
exception to do that way to do it that way so what they

01:17:17.140 --> 01:17:17.840
expect for us is to

01:17:17.840 --> 01:17:21.329
send them a check immediately after the council meeting so

01:17:21.329 --> 01:17:22.439
that's the process

01:17:22.439 --> 01:17:25.760
we're trying to go through right now okay do you know what

01:17:25.760 --> 01:17:26.279
size your

01:17:26.279 --> 01:17:31.659
contingency was I believe it was five percent we'll come

01:17:31.659 --> 01:17:33.199
back and update the

01:17:33.199 --> 01:17:36.949
PBA don't we get the file just to bring that back to you so

01:17:36.949 --> 01:17:38.199
you'll have the

01:17:38.199 --> 01:17:41.689
recommendation we need to look at is based upon the

01:17:41.689 --> 01:17:44.000
preliminary numbers and

01:17:44.000 --> 01:17:48.159
the concept of an advanced funding agreement it's really

01:17:48.159 --> 01:17:48.640
what we're talking

01:17:48.640 --> 01:17:55.800
about exactly okay any other questions

01:17:57.399 --> 01:18:02.319
no is there a motion then on item C so moved to approve

01:18:02.319 --> 01:18:04.119
most to approve their

01:18:04.119 --> 01:18:10.159
second second Charlie any discussion all in favor say aye

01:18:10.159 --> 01:18:14.479
any opposed when does

01:18:14.479 --> 01:18:17.539
construction start I'm just curious they're hoping to start

01:18:17.539 --> 01:18:17.920
construction in

01:18:17.920 --> 01:18:25.270
October okay so yes pretty quickly yeah well that's it's a

01:18:25.270 --> 01:18:27.600
long time coming yeah

01:18:27.600 --> 01:18:32.899
it's been talked about for a long time it has okay thank

01:18:32.899 --> 01:18:35.920
you okay thank you Chad

01:18:35.920 --> 01:18:41.439
item D is ACM update mr. chairman members of the board

01:18:41.439 --> 01:18:44.039
nothing to report

01:18:46.119 --> 01:18:53.470
okay concluding items under section five five one dot o

01:18:53.470 --> 01:18:55.239
four two the Texas Open

01:18:55.239 --> 01:18:59.520
Meetings Act is to respond to inquiries from the public

01:18:59.520 --> 01:19:00.720
utilities board or the

01:19:00.720 --> 01:19:04.770
public was specific factual information or recitation of

01:19:04.770 --> 01:19:06.199
policy or accept a

01:19:06.199 --> 01:19:09.880
proposal to place the matter on the agenda for an upcoming

01:19:09.880 --> 01:19:14.199
meeting anything

01:19:14.199 --> 01:19:20.720
to add to upcoming meetings or our matrix from anybody no

01:19:20.720 --> 01:19:23.920
hearing none is

01:19:23.920 --> 01:19:30.600
there a motion to adjourn motion to adjourn and a second

01:19:30.600 --> 01:19:31.600
second all in

01:19:31.600 --> 01:19:36.560
favor say aye thank you