23rd 2018 public utility board meeting to order
First on our agenda is a work session
To receive report and hold a discussion regarding the solid
waste fiscal year
2018-19 operating and capital budget
Good afternoon board members. Mr. Chairman. My name is Nick
Vincent utility business manager for the city of Denton
I have a two-part presentation for you today the first part
of the presentation
I will be presenting the proposed 18 19 solid waste
operating budget
But then the second part of the presentation Ethan Cox
directors always will come up and give his departmental
presentation
Please feel free to stop me if you have any questions
throughout the presentation
I'll be happy to answer them. If not, I will have staff
come up here and help me out answer the question
The cost of service study was presented to pub on July 9th
This study did indicate several service categories and
rates that were over and under recovering
Staff will continue to work with new gen
To work towards a rate correction strategy. Once that's
completed. We will bring that forward to the pub
The operational review is also presented to the pub on June
25th
the operational review
We did receive recommendation from the pub to discontinue
Operation of the building materials recovery and bubble
processing operations following that meeting on June 26
City Council
Did give staff direction to put a temporary hold on those
operations until the operational review can go to the
community on environment
Staff will be working in next month or two to take it to
the committee
Once formal recommendation is received from them the PB and
council will come back to you. Of course
We are presenting the budget today as a placeholder budget
We will be coming back by February 1st of 2019
With a modified budget based on recommendations from the
committee the pub and the council
regarding the operational review
The fund does maintain a debt coverage ratio greater than 1
.25 the target in the current proposed budget as it is today
In each of the future years and the fund balance does
maintain a fund balance above the targets of 14 and 18
percent and
Then staff has used a multi-year financial planning to
minimize rate increases and I'd like to point out this
budget actually does not have any
Rate increases for residential commercial customers. Oh,
excuse me
Let me actually flip forward. Sorry about that. Let me
actually recover this really quick since I forgot
Presents a slide here. So the cost of service was in July 9
th to the pub. You can see that here
It did identify some service categories and rates that were
under and over recovering
the operational review was presented to PB on June 25th as
I stated the PB gave direction to
discontinue the BMR operation to building materials
recovery
And the rubble process in operation City Council actually
directed staff to put a temporary hold on those operations
Until we can take the operational review to the committee
on environment
We will be visiting with them hopefully here in the next
month or so and we'll bring that back to you when we have
the formal
recommendation
The fund does maintain like I said a duck coverage ratio
greater than 1.25 percent the current fiscal year in all
the future years
And then the fund balance is above the target of 14 to 18
percent
flip here
Operational expenses are cost containment strategies that
is included in the budget in front of you today
Staff has been working to realign business units to improve
financial reporting of the different operations to landfill
We are proposing a zero base budget for travel training
outside contract services
And we will be working to implement the staffing plans from
the operational review
Once staff presents those to the committee on environment
the pub and the City Council
Equipment of vehicles staff has created new procedures in-
house to evaluate
Equipment utilization the maintenance cost of the equipment
and when is the appropriate time to sell it and replace it
capital improvement program
our plan
We are going to continue to use business case analysis to
evaluate a project's feasibility the cost and the benefit
of it moving forward
And we this fund is reducing its reliance on debt services
the primary funding source for equipment and vehicles
The future risk and mitigations of this fun
Currently staff is working with blue ridge services that PB
had a presentation from on July 9th
To develop a market study and actually it's not new gen. It
's a blue ridge
I think I suppose that blue ridge services to complete a
market study to assess the landfill fees
This study should be completed in this month once it is
completed
It'll benchmark those fees of surrounding facilities around
the Metroplex. We will bring that forward to the pub once
it is complete
Market conditions for recycling we have seen in an increase
in contamination the recycling streams in the community
We will continue to partner with the school districts and
the community to increase commercial recycling residential
recycling to decrease the amount of contamination
Changes to regulatory compliance the current fiscal year
budget 19 as it sets today
Is proposing to fully fund the yearly contribution to the
closure fund for the landfill and I'll point that out to
you here in just a second
on a couple slides down
Environmental safety risk we want to continue to build upon
regulatory compliance
Processes and then we are in the process of implementing a
robust safety program and solid waste fund based on the
operational review from blue ridge services
This is the five-year pro forma as I stated before this is
we're proposing this is a placeholder budget
We will come back to the PB by February 1st of 2019
Once we have time to visit with the CoE committee on
environment the PB and council further regarding the
operation review
I do want to point out that this budget also includes the
BMR the building materials recovery operation and the rub
ble
Processing operation are still in this budget
So when we come back to you in February if the direction is
to discontinue those operations, they will be removed from
the budget
But they are not removed right now
As you can see here and the proposed 2019 budget which is
here in this column
We're proposing thirty four point eight million dollars in
revenues about thirty four point eight million dollars in
expenditures
We are proposing to draw down the fund balance about three
hundred forty nine thousand dollars
And as you can see down here, we're proposing no rate
increases for residential customers or commercial customers
The fund balance you can see it down here. It's eight point
two million
Then the target of four point eight to six point two
I do want to point out the fund balance does go from eight
point two million to eighteen million
Staff will be recommended to use this fund balance to
implement the rate correction strategy. Once it is
completed with NUGEN
We'll be able to use that moving forward. So it is a
positive thing for this fund
the debt coverage ratio as I pointed out earlier is
one point three four in FY 2019 and it does increase to two
point nine five in the future years
So there's way above the one point five to five target
quick question on that. Yes, sir
so
Work capital plus operating reserves at those levels
but that does include
all the
Expenses offset by some revenue, of course on the
The BMG or the BMR
That's correct
So there are some revenues in this budget for the BMR some
material cells commodities that they sort through
And the expenditures are also in here too for both
operations for the BMR and the rubble process and operation
There's not much revenue in here for the rubble process and
operation more expenditures than revenues, but both of them
are in here
So these numbers are good change depending upon what we
what is decided in February
That is correct once staff has time to visit with the
Committee on Environment
Pb further discussions and further discussion with council
these these numbers could change
Okay, I think the other thing to point out is you can see
the impact in the out years of the debt service
Yeah, that's that's great. That's really leading to the
reserves being higher and giving us the ability to adjust
funds on the
Over the next few years and not really have an adverse
impact in this fund
So it's a good position to be in right now. We just didn't
feel comfortable reducing
Rates any further until we knew what the outcome of some of
these other programs is gonna bring. Okay
Any more questions in this slide I'll move on
These are the resources so the revenues of the solid waste
fund
I'm gonna want to point a few things out here and the
adopted 18 budget as you can see here in this column
We had thirty nine point three million dollars in revenues
We are estimating that to be thirty four point nine million
finishing the year
And the reason behind that is that we're removing the
landfill mining operation revenues that were forecasted in
the public sales in the city's natural gas station
Moving forward the proposed budget, of course, we're not
including those revenues and the projections. We're
projecting thirty four point eight million
Do want to point out here on the transfers in this transfer
in as a transfer into from the salt from the general fund
To solid waste to fund the building lease for 651 Mayhill
if you remember that's where materials management and
traffic will be relocating to
And the use of the reserves that that's in part because we
chose to reduce the rates for residential because we
Yeah, so
We can point that up here if you see the residential
Revenue was six point two million projected in eighteen
projected goes to five point six
Same thing with residential recycling and that is
associated with twelve percent rate decrease
Yeah, so we're projecting to use reserves in the 2019
budget but moving forward we won't be drawing on the
reserves
And we knew that at the time we made that decision. That's
great
These are the expenditures by categories
As Todd had pointed out earlier the debt service is
decreasing in 2018 the adopted budget was nine point six
million
It is coming down about seven hundred thousand eight point
nine million in the 2019 proposed budget
So we're proposing thirty four point eight million in
expenditures
This is could you go back I have one more question and I
think I know the answer but I want to hear it from you
We look like we're our estimates for this year first
personal services is ten point five million
It's going up to eleven point two, but we're cutting ten
people
so right so
In the 2018 budget and currently right now there's 20 vac
ancies in the solid waste fund
We are going to be proposing to refill some of those vac
ancies in 2019 to address some of the maintenance issues
We've been seen and to implement the safety program and the
solid waste fund. So that is the increase you're seeing
So we're projecting them to stay vacant pretty much through
the rest of this year and then we propose to fill them in
next year
That's what I thought. I just want to make sure thank you.
So so when we have FTEs, we're looking at
That's correct. Um, so the budgeted I think this is what
you're asking them in the budget at 18 adopted budget
This would be fully staffed here. So everybody being
employed eleven point six million
We're projecting some vacancies and some salary savings in
the estimate and those will be filled. That's correct. We
're anticipating filling those
That's correct. Thank you. Yeah
One other thing that may not be apparent up here we are
transitioning away from contracted temporary labor and then
hiring our own staff
And so that's one of the reasons why we wanted to maintain
some of those vacancies
As a matter of fact, we're starting to post some of those
positions on the street
we just feel like it's a better opportunity for us to grow
our own talent and have kind of a
Some bench strength to draw from in the future as we
develop our own staff versus contracting out on a
consistent basis
So in 18 19, you see some of that kind of kicking in there
All right, any more questions on the expenditures I'll be
happy to answer them or Ethan will come back up here
All right. This is the solid waste materials forecast table
We are projecting about a two point four percent growth in
the residential customers. You can see that number
Right here on your screen
We're projecting about a one point five eight percent
growth in the front load side load customers commercial
customers
We are projecting a little bit more for roll-off customers
based on the construction around the community about seven
point one six percent
landfill wholesale customer tons were just increasing a
point two five percent
So we're projecting for it to increase and landfill retail
tons based on tonnage coming to the gate about an eight
point four eight percent increase
Quite a bit of increase that is coming in the game if you
look at
2015 to 19 that's
31
But you're actually seeing that
But you're saying that I mean that's
18 that's real numbers and some of this increase here
I like to think from being it's always previously before my
current position
Is due to people commuting to them, you know
Louisville or to the Metroplex of the other facilities must
kind of being closer with the traffic and the amount of
time it takes to
travel there
So, you know the population increasing around the community
I
Okay, these are the next steps so as I stated earlier this
is a work session item
We actually have another item on here for individual
consideration
Well, we will be asking the pub to adopt the budget is in
front of you today as a placeholder budget
Once staff has time to visit with the community environment
the P being counsel further in the operational review
We will come back by February 1st of next year of 2019
Let's see counsel is scheduled to adopt the solid waste and
operating budget capital budget
by September 18 2018 actually on September 18 2018
As I stated earlier, there are no residential rate
increases or commercial increases in here
We are proposing to increase the wholesale rate from $23 a
ton to 2450
And then staff will bring the FY 2018 solid rate ordinance
to the pub during August or formal approval
So you'll be seeing that here in the next month
That
Concludes the financial part of the presentation Ethan Cox
the director will come up here for the next part of the
presentation
If you have any questions for me, I'll stand for him.
Otherwise, he will come up. Thank you
Thank you Nick
Ethan Cox director of solid waste for the city
Just a few brief presentation a few brief slides for you
here in the presentation
a lot of this we've already kind of covered either
earlier in the presentation or prior presentations
But just kind of hit the highlights in terms of
accomplishments. We talked about the 12% rate reduction for
our residential customers
Nick also highlighted our restructured capital plan
I want to point out that's due to a significant amount of
work and effort by not just our
Managers, but also our financial staff Nick
Tina Lee
Rodriguez everyone that's kind of contributed to this over
the last several months
We started this process about 14 months ago. So it's been
like the longest budget process known to man
But I think we've come out the other side relatively unsc
athed during that process. We did a lot of business case
analysis
We have a few of those up here landfill mining the CNG fuel
ing station the liquid waste disposal operation
There's some real numbers associated with those and I think
that leads to where you're seeing some of the improved
Outlook over the next five years some of our goals for
fifth fiscal year 18 19
We do want to implement some of the recommendations from
the rate study as Nick alluded to
We do have some audit recommendations from last fall that
we're continuing to work on
We're gonna have a second round of an audit on our scale
house
That will be returning to the pub and the council on in the
next couple of months
And then we'll also be as Nick alluded to coming back
through the CoE the pub and the council with the
operational review
One other big highlight that's going to be coming up in the
next few months. Hopefully
Is that the TCEQ will formally adopt our new operating
permit 1590 B
Which should give us 30 to 50 more years of landfill life
capacity
In terms of budget emphasis, you know what we always try to
do is link this back to strategy
For years solid waste has been really about pushing the
envelope being innovative bringing on new programs
Not that we don't feel like that's important
But what we're shooting for is a more balanced strategy our
goal
The reason why we exist our purpose is to provide
exceptional value to our customers our ratepayers
We have a critical service for the community and we want to
make sure that we're delivering the best value to them that
we can
So part of our focus in achieving that end is we want to
have kind of a balanced approach if you will
It's not just all about financial results. It's not just
about you know efficiency
We want to make sure that we're keeping our eye on all
these things that you have up here on the board
So it's financial it's being having an excellent operation
Having that customer focus that it's not just about quality
of service. It's about breath
It's also about being available for them when they need us
and then also from a sustainability standpoint
It's not just being environmentally sustainable. It's
financially sustainable and it's also making sure that what
we're doing is in concert with what the community wants
So our cost drivers and considerations customer growth and
increased service demands
I think that's par for the course for most city services
But we do have some regulatory requirements if the state or
the EPA has an unfunded mandate then that can certainly hit
our bottom line
We also have some market pressures that some of the other
utilities are not necessarily exposed to
As Nick alluded to we pointed to the the retail and the
wholesale side of things
Our landfill is a regional in regional competition with
other landfills for revenue
We also have the construction industry that also leads into
some of the retail increase that you saw there
That also hits our roll-off business. And so if
construction dries up you can really see a pretty
Kind of a depressed effect on our revenues
Nick alluded to it earlier that we had 2.3 million in unrec
ognized revenues from landfill mining and C&G sales
And that was removed from this year's budget
Turns of process improvements for 1718 we've hit most of
these we do have the checks and balances for budget and CIP
our managers
Are all over their budgets now. They see reports monthly
making sure that they're on track
We question anomalies or issues when we see them
I think everyone's much more attuned to where their budget
is now. We also centralized project management contract
management
Purchasing kind of streamlined some of that
Provided some more controls. We're still purchasing the
things that we need
But we have a little bit extra oversight on those things
We're also continuing to work through improved processes
and internal controls for our scale house
That's essentially the touch point for all the customers
entering our facility. I call it the nerve center of our
operation
All the cash handling happens there all the data that's
recorded from a regulatory standpoint
It cannot be a more critical operation than that one right
there. And so it's getting a lot of attention right now
Turns a future process improvements. We are going to be
implementing some resource management processes. Some of
those are already in play
That's are we staffed effectively? Do we know what our
needs are? How do we quantify those? What happens in a
contingency?
So all that's going to be a key focus area for us as is
improved inventory systems for our carts our containers
Making sure that we're only ordering those when we really
need to and that we order it just in time
And then as Nick mentioned earlier implementing a formal
training and safety program
It's just not something we want to mess around with we have
big pieces of equipment that can do some real damage and
We want to make sure that we're protecting our staff the
people that we serve and also the city's assets
In terms of cost containment
one of the things that I want to emphasize and this is kind
of the
The fruit of all the the laborers for the staff over the
last several months is
Fiscal year 17 18 expenditures are about 11% under what we
budgeted last year. That's about four point four million
dollars in savings
That's due in large part to the restructure capital plan
Understand that this year's reduction you do see that debt
service stepping down
And so that's going to give us a lot of flexibility to
implement that rate reduction or rate correction strategy
it's also allowed for the residential rate decrease of 12%
and
Had we not made some of the tough decisions that not only
the pub
But also the councils had to make with landfill mining and
CNG if we didn't make those decisions
We could be looking at a significant loss this year. Maybe
upwards of four million dollars. And so I don't want to
Emphasize that too strongly
But I do want to tip my hat to staff to the managers that
have worked really hard over the last
13 or 14 months to achieve these results
We talked about the positions earlier
We do want to have some flexibility to complete our reorgan
ization as well as start growing some of our own talent over
the next few months
Whenever we return to the pub in the council next winter
Then one of the things that we'll be talking about is is
our staffing where it needs to be and we need to make
additional
Adjustments here. I think we're just on the early edges of
implementing what the blue ridge recommendations are
And so this may change slightly, but I think we're in
really good position with a lot of the vacancies
We have to address some of our needs
This is kind of an eye chart so get out your your good
glasses. This is our capital plan
For solid waste and like some of the other utilities
We're not quite as long-term asset intensive. We're more
focused on rolling stock shorter lived assets. So a lot of
equipment
Trucks some light duty vehicles, but you also have cell
development that you've got to contend with
Cell development comes around bus every six or seven years
and so that's something that we could kind of deem as a
short-term asset
As well our goal on this is to really shift from debt
service over to revenue funded capital as much as we can
On this bottom line here
You can kind of see where we started at revenue funded all
the way up to about
79% as we get to the fifth year in our projections and so
we think we may be able to beat that
It's a little bit early
But in terms of maintaining our fleet taking better care of
it, we do think that we'll be able to reduce some of our
fleet
And equipment needs in the out years as well
And that is it for the departmental side I'll stand for any
questions you might have
Now that's that's good I appreciate the summary that that's
Didn't take that one sure did seem a lot longer seem like
it took a lot longer getting to that point
My beard was solid brown when we started yeah
Not quite I remember
Thank you very much, yeah, thank you appreciate it
Okay moving on
to the regular meeting
First we had the consent agenda. We have one item on the
consent agenda
Which is item a any
Board member like to take that
Out and put that into individual consideration
Questions
Hearing none is there a motion then on item a of the
consent agenda
I'll move approval
Motion and a second discussion all in favor say aye
Any opposed?
Consent agenda passes
Moving on to items for individual consideration item a is
the public utility board draft minutes of July 9th
2018
These have been distributed in advance any corrections or
comments
Changes
Hearing none. Is there a motion then on the minutes for
July 9th 2018?
recommend approval
Second have a motion and a second to approve
discussion all in favor say aye
Thank you
Okay, item B excuse me we're gonna wait on item B
We really have to we need to
Look at the budget before we set the right so
We will put that usually works. Yeah, we're gonna move that
to just before item G
so we'll go right into item C which is to
Consider recommending approval of the water fiscal year
2018-19 operating and capital budget
Pb members, my name is Tony point them the director finance
just really quickly
Want to just recap for you?
I know we've had a lot of discussions with you over the
last a couple of months couple weeks about this budget
Well, we came back to you after we met with the City
Council was the recommendation on a no rate increase
Budget that's that's still the recommendation today
This here is the financial forecast. We're looking at
a little bit over 50 million dollars in expenses that's
being recommended again, no rate increases
For this year or projected for the next five years
We have had a number of questions that have come up surely
here by the Pb
but also by the council that will continue to evaluate and
look at this budget over the next few months and
certainly as we prepare for
Next year's budget not the 18-19, but the 19-20 budget then
we'll be briefing you again on where we are again
On an annual basis, we're going to be able to look at this
forecast
Not just within the context of a five-year but certainly
within the context of a ten-year
And if adjustments are necessary as we go through that will
certainly be discussing that with you
We think that this budget positions the fund well
Certainly keeps our reserves within the targets that we
have we certainly have
Some large capital projects that are out there that we're
cognizant of I will continue to evaluate those work with
the department
Look at prioritizing their capital projects. So I don't
have anything further
If you have any questions, I'll be happy to answer those
questions again
But our recommendation today is a budget with no rate
change no changes to any of the rates
And I'll stand for any questions that you may have
Questions
We sure have is there a motion to handle item C I'll move
approval
Second motion and a second to approve discussion
No, no rate increase or decrease no change on the rate
Any other discussion
All in favor say aye. Aye any opposed same sign
Okay
Item D is to consider recommending approval of the
wastewater and drainage fiscal year
2018-19 operating and capital budget
So again some similar situation here with this budget we've
had a number of discussions with you just wanted to recap
really quickly
This budget does recommend a decrease of five percent in
rates
No rate increases projected currently over the next
Four years of this planning window again, just like what
the water budget will continue to evaluate the needs
Capital programs and in this budget certainly just like on
the water side. We also have a large
Expansion or addition to our treatment facilities
Out in the 10-year window that will continue to evaluate
and and come back to you have those discussions with you
This budget also as we previously discussed
We were able to separate out the drainage component, but it
's still part of this budget
It was not separated out to a separate fund
So we are also recommending no changes to that
drainage budget we have had
Half an FTE increase that's being recommended
From what we previously discussed with you and that's just
to continue to support that operation
Again, we've seen this budget a couple of times with you
I'll be happy to answer any questions that you may have our
recommendation again is for a five percent decrease in
rates
We previously talked to you about where those how we're
going to do that in a modified cost of service
Strategy versus across the board. We'll talk a little more
about that. We'll get to the rates
Questions on the
Wastewater drainage fiscal year 2018-19 operating capital
budget
Is there a motion then on item D
move
for
Recommendation okay, we have a motion to approve
Second and a second discussion
All in favor say aye
Any opposed?
Okay, you're on a roll
So
Now we're on item B right I'm following this correctly, let
's see. No, actually we're on item E. We'll wait
Get through let's get through all the
Budget stuff that will go to the rights. So item E is to
consider
recommending approval
of the customer service fiscal year 2018-19 operating
budget
So as as we've discussed previously
We our recommendation today is to create a new internal
service fund for customer service
This was previous all these expenses were previously in the
water fund
And as we discussed with you that was having an impact on
how we calculated the required reserves in that fund
Again, we presented this this discussion to the City
Council
Council was shown supportive and recommended approval will
be presenting that to them contingent upon your approval
today
Because this establishes a separate internal service fund
for 18-19 a little bit over five point three million
dollars of expenses
This fund is funded by transfers from the utilities
primarily
into this fund for
Utility billing that is done through this operation that
Tiffany Thompson is our customer service manager and she's
not here today
But I'll be happy to answer any questions that you may have
That concludes my presentation for you. I
Do have a question on the
Allocation of the cost of service
How is that calculated is that revenue driven or is that
customer number of customer driven?
Anything to probably help me here. He was he was there over
that area
But I believe this is based on the accounts number of
accounts that are billed for each utility
As you can see the the bulk of that is related to electric
Okay
Any other questions?
Not a question, but a comment. I do think this is a much
better way for all the utilities to be served
So I think I said it before say it again
Okay
Comments or questions, is there a motion then on item II
moved to approve
We have a motion to approve. Is there a second?
Second and a second any discussion
All in favor say aye
Any opposed
motion passes
Item F is to consider recommending approval of the solid
waste fiscal year
2018-19 operating and capital budget
Good afternoon PB members, mr. Chairman's Nick Vincent
utility business manager of the city of Denton
They pull up here the solid waste presentation that we just
walked through
As
I stated before we are seeking approval of the 18-19 budget
is proposed to you today and it will be a placeholder
budget
We will come back to you at the first the fiscal year once
we receive formal direction on the operational review
If you have any questions, I'll be happy to answer them. If
you didn't ask them last time. I'll be happy to answer them
Okay, any questions anything come to anybody
All right, is there a motion then on item F
Recommend approval we have a motion to approve. Is there a
second second second discussion
All in favor say aye
Any opposed same sign?
Okay, we'll now move back up to item B
Which is consider recommending an ordinance establishing
the schedule of rates for water service
providing for a repealer
Providing for a severability clause and providing for an
effective date
Some as chairman and members of the Pb again no changes
here
Well one minor change we had briefly
Communicated to you that the wholesale a raw water rate
that we charge to the opportunity
Would change a contingent upon the city of Dallas is rate
It's 85%
That we did receive that today
And so that is now
calculated at
72
86
Since and so will we we will be updating the ordinance that
we provided to you for the council consideration to update
that
Other than that, there's no changes from what we previously
Communicated to you a couple of weeks ago
Stand for any other questions any questions that you may
have
Okay
And that rate is mandated by contract. Yes, that's correct
Question other questions
No, is there a motion then to recommend?
item B
Recommend approval
Have a motion
Discussion all in favor say aye any opposed
Item G is to consider recommending an ordinance
establishing the schedule of rates for wastewater service
Providing for a repealer providing for a severability
clause and providing for an effective date
So, mr. Chairman and P members again no changes from what
we previously discussed with you within the wastewater
rates
Certainly if you have any specific questions about any of
the recommendations here, I'd be happy to go through that
So there is a change
That we had recommended I'll just kind of make sure that I
point that out on the newcomer rates
We are proposing to decrease that to 5400 gallons from 6,
000 gallons
based on a 10-year review of
Where that usage has been and so that'll be that's part of
our condition
I believe that we talked to you about that the last time we
were here
Questions
No, is there a motion then on item G
Motion and second discussion
All in favor say aye
Any opposed?
Okay, item H is consider recommending an ordinance
establishing the schedule of rates for miscellaneous
service
Providing for repealer providing for a severability clause
and providing for an effective date
Mr. Chairman, I don't have a presentation on this
particular one
But I do want to just remind the PB that based on our
presentation a couple weeks ago
We are recommending within the miscellaneous rate ordin
ances ordinance
to reduce by 50% the residential delinquent service fee
from
$46 to $23 and the residential reconnection charge
For same-day service is decreased from 61
To $30 and that's primarily due to some of the or to the AM
I
Capabilities that we now have so other than that
Those are the only changes that we're recommending within
this miscellaneous rate ordinance to be happy to answer any
questions that you may have
So those are due to more effective way of us being able to
connect and disconnect that's recognition of
A reduction in the cost of providing that service or doing
that particular service
Okay
Okay, any other questions
Not if there's a motion then on item H
move to approve
Second we have a motion and second any discussion
All in favor say aye
Any opposed same side
Okay
Thank you Tony for taking us through those. Thank you
Item I is ACM update
Mr. Chairman members of the board as you know
We've experienced a record heat the last number of the last
week and continue to do so this week
And so we thought it would be good idea to have someone
from DME
So I've got Smith day here who can give the board
Oh, I would like to give the board just a quick overview of
how the energy center is doing
Well the last number of days with the record heat we've
experienced here in the area
Good evening, I'm Smith day with DME. I'm the regulatory
and risk division manager and
As you can imagine this past week is as you've seen it you
've seen it on the news and it felt that outside obviously
record-breaking heat and
It was it was the first week where the deck was operating
at full steam coincidentally, so
We've got a slew of data and numbers that have
Fallen in as through the first week of our full operation
of the deck
Those numbers are being
Crunched and obviously there's just having some of them
yesterday and Saturday
Friday and Thursday, there's no time to put those all
together for you here, but this is just for some high-level
information
So Urquhart on I
think as some of you may have heard last week on Thursday
hit a all-time peak of
73,000 megawatts and
Also, coincidentally DME hit a all-time peak of 369 megawat
ts last Thursday
That smashed the previous record which was the previous day
Wednesday was of 352 megawatts
Absolutely smashed it and that compares to last year the
last year's
All all-time peak was total peak day was 350 megawatts
So we've at went last Wednesday. We thought hey 352
Wow, we broke broke last year pretty easily then Thursday
came and
Absolutely wrecked it
yesterday was I
Want to say yesterday was she yes, it was
347 megawatts which is pretty incredible for an off-peak
day
Which is every Sunday is considered an off-peak day. So
anyway
on with the deck the deck had
Previous to last week. There was some pipeline work being
done and
So that the pipeline company had to curtail some of the gas
that
The weather hadn't hit yet. So that was really no big
effect there. So
the gas came back on fully last week and
The deck the engines were running running excellent
They're running beautifully and they're performing and so
they've been protecting us all week
Against these high prices with some of which you've seen
I don't know if you some of you may have the app on on your
phone for ERCOT and
They've been hitting in the 2000 3000 range sometimes for
some hours mostly in the afternoon hours between one o'
clock and seven
Is when you'll see those extreme prices
Coincides with the extreme heat go figure but that's
exactly the way it works during those hours
We've also seen our wind production
Decrease you see that and
That's a typical
Situation as part of the country
your western winds
fall off and tremendous heat when high pressure sits over
the state so
that the wind dives
the oppressive heat comes in the loads come up and then
Scarcity pricing hits and that's that's when the decks
jumped into action and and protect us. So
in
general
Things are working. Well, those are the good things there
haven't been without hiccups. I mean when you have an
Enterprise like this like running a
Tremendous plant like this. It has a few problems one of
them being the gas. The other was there there was some tele
metry
Issues it was all worked around. They didn't cause any any
operational problems. We still had the deck running
It's just that's mostly tweaking on the computer systems
that talk to ERCOT and they know there's just a few little
things to iron out
But nothing that's stopping us from running full full out
full capacity
so
It's there. It's been running. I don't have a you know,
like I said, I don't have a whole bunch of numbers to throw
at
Your crunch, but any general questions, I'll be happy to
entertain
You maybe can't answer this but I'm curious. Why would they
do a pipeline inspection in July in Texas?
That's like doing it in January in northern Minnesota. That
doesn't really make a lot of we have the same question and
There was an effort to and by the way that pipeline did not
only affect
DME it affected
Other plants as well. Sure. So so because that plant and
pipeline feeds multiple ones, but
No one asked us the pipeline company had a 10-year
compliance regulation they had to fulfill and
It's from what we are understood. It was a federal
regulation
So there was reach out to the Public Utility Commission
Railroad Commission and
There wasn't a whole because it was federal there wasn't a
whole lot that can be done about it. Unfortunately
it worked out and
There's there's a couple little things left for a couple
hours
But the big the big stuff's done and it really won't
interfere with with us in that super peak range
So it shouldn't be any issue from here on it. It's
important. They inspect the pipeline. Yes
That's very important. Yeah, and exactly. It's a compliance
thing and and it's a tough deal
because
If the if the pipe has a leak and it's dangerous
That's we've seen a lot of things in the news bad things
can happen
So you don't want that at this you just kind of want to to
time it better
Yeah, exactly what we'd like to see but we didn't actually
get harmed by it. No, no ma'am or any other plants
No, no ma'am. So so, you know, we'd just like to see better
timing in the future and I think you may see
from
Being a regulatory person and having my ear out there. You
may see some
movement at the state legislature
To try and make better coordination rules around what the
pipes do and when they do things
They usually don't do things in the winter because that's
that's their
Yeah
Must have shoulders somewhere in there. Yeah, just some
over some spots. Yeah, you would you would hope
Well, that's that's a great report. I'm glad to hear
everything's going well
Thought about it as we you know as we see the peak demand
for
Urquhart, so so we actually saw the deck
So was it running 24 hours or just turn it no sir
It's it really came into play. I mean up until 11 o'clock
noon on those days
Things were fairly normal. And so it was the afternoon when
when the spikes started happening
So it you know, we have our dispatch price at its cost and
when prices go above that cost and and those generally were
from
You know say noon to depending on the nights. I mean we had
a night there was I think it was I think about 10 o'clock
I looked in it was still 98 degrees. So yeah, it would be
from noon to 10 some nights
Today I think we've we've seen the things actually very
tame overall you look at Urquhart and and
This was a pretty big test and so far so far the entire
Texas grid is passing
so as as far as the in general the Texas grid goes we go
because
we're
deeply integrated into it so
It's it's all working pretty well. So let's
Knock on stuff. We still got some hot days to go
Gonna have a cool doms gonna be 98. Yeah break out the main
coats. I'm here we come
Nothing further to report
All right
Okay concluding items under section
551.0 for to the Texas Open Meetings Act respond to inqu
iries from the Public Utilities Board or the public with
specific factual information or recitation of policy or
Accepted proposal to place a matter on the agenda for an
upcoming meeting
So do we have any requests for
agenda items for upcoming meetings
Seeing none hearing none
All right, do we have a motion to adjourn
We have a motion is there a second second from Allen all in
favor say aye
Thank you
You