all right it is nine o'clock and we have a quorum so we'll call to order the
December 13th 2021 City of Denton Public Utilities Board meeting the first item
is the public comment does anybody here wish to make public comment how about on
the phone anybody on the phone no all right and we'll go into the regular
meeting the first item is the consent agenda with items a through s I'm gonna
call pull item M does any other board member wish to pull an item yes mr. beth
okay I'll go with mr. Rybeck I'm interested in looking at item F and H
and H and mr. jumper item E okay that was E as in Evan right and a question
about J okay and then is that it all right so do we have a motion to approve
items A B C D G I L N O P Q R and S okay mr. jumper moved and Barbie second all
in favor say aye aye carries okay the first item then is item E so I think
that's Krista would you come out there she is madam chair board members what
questions can I answer related to item yeah so I was curious I think this is a
neat idea actually I was curious what what prompted the need or desire for
anything like that the virtual teller yes I'm sorry you know the virtual
teller unit is something that even pre-pandemic I had already had kind of
on my agenda and had started developing with ad comp prior to you know there's
been a desire for customer service to have kind of an outreach center where
people don't have to come all the way to City Hall East to conduct their
face-to-face business and this is something that we felt like would be a
reasonable measure of being able to provide service to the citizens as
opposed to the citizen coming to us so we'll be piloting it it's actually ready
for launch we're just waiting on a little bit of construction if you've
been in the City Hall East Lobby the acoustics are great if you want to stand
in there and sing but not so much if you want to stand in there and talk about
business so we're building in a little sound area so that we can install it as
long as we get some good public adoption then we want to be able to expand that
to maybe the UNT campus look at some overlays to see what customers are coming
into the lobby what parts of town need to be best served by doing something
with an outpost and then I was curious currently do you know kind of the
percentage the breakdown of how many folks do business online versus coming in
person versus on the phone anything like that you know I haven't looked at them
recently because we've had so much going on I don't know if you've noticed it's
very busy initiative wise and customer service currently that we usually only
have a 10% or less of our customers who come in and do their business so it's
very difficult sometimes for us to keep those two lobby windows open all the
time when we have callers you know on the phone that are holding for no
longer periods of time but we're hoping that with this particular initiative
once we get it moved out that we'll actually be able to expand so as long as
you're not making a cash payment if you need to present that alternative ID like
a foreign student that you can actually do that from your phone or PC and still
do that virtual interaction from your home or wherever you happen to be as
long as you're not doing a cash payment so we're hoping to expand this okay so
this new kiosk would be at your current facility currently it will be at the
facility I will still have our standard kiosk available outdoors to just do
their traditional kiosk business but inside the lobby if there's a line
waiting or even if there's not a customer can go to that virtual teller
and conduct their business present their IDs scan documents whatever business
they need to take care of so you consider this a pilot project then this
is a pilot project thank you yeah other questions do we have a motion to approve
okay mr. Rybex move moving and mr. Beck is seconding all in favor say aye aye
thank you very much item F that was you right Lee that was your item F okay so
we have a Daniel Kramer with our Street Department here good morning
Dana Kramer deputy director of operations question this particular
contract not to exceed 2.6 million dollars from construction material
testing and geotechnical investigation services is rather broad could you give
us a little bit more information about what these folks be doing for you yes
sir Street Department is the one that actually kicked off this contract what
we use that for is our lime series test and our subgrade tests so we know how
much lime and mix to put into the street when we're rebuilding the street we also
use it for density testing compaction testing which is what utilities use it a
lot for for the ditch lines and everything we'll use it for density to
make sure we've met the 95 percent compaction before we can patch the road
it'll also be used by DME which a lot of times we'll use that when they're
installing the poles and stuff like that same thing with the compaction testing so
this is just an on-call contract so that we can keep our construction operations
moving throughout the years is this a firm we've been working with previously
no sir we we originally had G consulting which is the one that had it for the last
one I think it was a three year if I'm not mistaken was the last terms on that
contract all right so this is a new firm providing services that another firm had
been providing and this is a not to exceed amount over the five-year period
basically on a time of material basis thank you all right any other questions
do we have a motion to approve mr. Ibex motion second and second all
favor say aye thank you item H that was also you rightly yes okay
good morning good morning board madam chairman my name is Jerry Fielder I am
the division engineering manager for didn't municipal electric I haven't in
here with me Aaron Binion who's the project manager for this project as well
as the engineering firm and we can go through a formal presentation or just
answer any questions that you may have I'll see you are going to give us a
formal presentation on this or you can no we can you want to go ahead and see
that if it's all right with sure chairwoman I'd be very interested in
seeing that yes yeah thank you
good morning give me just a moment to get this set up
I think it's being shared says that we are sharing all right I think we figured
out the technology so again thank you for letting me be here my name is Aaron
Benyon I'm an engineer with that municipal electric and today we'll just
present a little bit on our new line extension policy so up to this point the
line extension go ahead Madam Chair I would wonder if the speaker could take
his mask off I'm having a little trouble understanding him thank you thank you
I've often been told I've got a quiet engineers voice my apologies all right so
our current line extension policies are contained in the electric service
standards these standards have been around since at least 2014 the latest
version was approved in 2014 and there really haven't been any changes since
then these standards include both technical requirements as well as policy
relating to new developments extensions and developer and DME
responsibilities now there is a need to update them and so DME has proposed that
we split them out into a revised electric service standards that would
focus on the technical requirements that ensure that developers and DME are
following the applicable codes and the line extension policy would govern the
customer aid and construction contributions now the current line
extension policy that's contained in the ESS is really a one-size-fits-all
approach it's based on distance and so any extension up to 300 feet is covered
by DME and by extension the rate payers and so there's a wide variety of costs
that can be incurred in that mostly depending on what type of service is
currently available what type of customer loads are coming and so it
really leaves things pretty open for for what that can cost the existing rate
payers developers are also responsible for the civil work and DME provides
certain materials like conduit and pads for various pad mounted equipment
developers depending on the length of the extension they may pay none of the
cost or they may pay some beyond that 300 foot distance and DME covers the
rest our proposed policy would be that within the single certified areas of the
city developers would pay the full cost of any line extensions to them now DME
does have multi certified areas that we share with other electric service
providers so encore and co-serve in those areas we propose that credit be
given based on a projected rate of return and that allows us to provide an
economic development incentive and basically stay competitive with some of
the other developers go ahead thank you I'm wondering when you say multi service
area so is DME essentially bidding if you will on the future service of these
developments to an extent yes when it when a new developer comes in they have
a choice in these areas they could choose whether they would like to have
DME co-serve or encore encore depending on the area serve them and one of the
challenges that comes with that is the first one to serve a development
generally takes the whole thing because of the costs associated with trying to
get additional services from another provider in there so does this still
give DME the flexibility to work with the developers on projects even though
we have this new standard that's being proposed yes yes it does thank you
mr. Rebecca the one thing I'll tell you is the main cases in these multi
certified areas developers are already being incentivized by the city through
other economic development incentives and so then additionally they they can
either walk away from DME or request additional incentives and so there's
double and triple dipping that occurs from time to time with those
development I think this helps us kind of equalize that and at the same time
helps us address some of the some of the cost perspective cost issues that we're
having at DME and that we're trying to address yes it does appear that these
new policies are give you a little better structure in your program but I
was running if it's also taking away the flexibility to negotiate so that's my
question okay sorry did you have a question go ahead
thank you chair so I'm really conflicted on only incentivizing only giving an ROI
based discount in the fringe areas of the city like if you don't know if you
have a map in your slide deck let me skip down to that yeah so everything
blue would not receive the incentive that had to cover full full cost of
construction where if you're building a subdivision in the red area out west
you're going to get ROI you know an ROI based value on your development
mm-hmm so it will cost more to build closer to who to develop closer to the
city center I'm curious what encore and co-serve what their policies are on
their single service areas and their multiple their competitive areas do you
know that so as part of the presentation we actually do cover what encore and
co-serve do if it's okay we can jump back to that and work through that okay
excellent okay so we're we're almost there all right just a couple of
additional items on the proposed policy is that developers would be responsible
for civil work as they had been but also that they would provide some of the
materials that we've previously been providing and what that does is allow
them a little bit more flexibility they're not completely dependent on DME
providing all of these materials and it frees up our warehouse and and others
from being the the sole point of contact sometimes that becomes a bottleneck and
again down at the bottom it just states that we we would expect them to cover
the full cost of the extension except for competitive credits in those areas so
the question is then what do other utilities do these aid and construction
fees are a standard in the electric utility industry we've worked together
with the consultants and gathered research on what several other utilities
do some credit is given in various forms throughout the state of Texas and so you
can see examples of what other energy providers use some base it on the fixed
distance like DME has up to this point some use a fixed allowance a dollar
amount where once it exceeds that they're responsible for it others have a
formulaic approach that again is tied to something like a return on investment
or other formula that they've developed and then there are some utilities like
Austin Electric and Garland that they give no credit the the developers are
expected to pay for the entire cost so it's really across the board as you can
see Encore and CoServe use both the fixed distance and the formulaic
approach and and then you have others that say you know what the developers
can can cover the cost if they want to bring in do they have a split policy
between single serve and duly certified areas I don't believe that they do it's
it's across the board if you don't mind I can ensure that I used to work for
CoServe and the policy is typically you're going to get the service no
matter what it takes and so they do have in the rate manual some degree of
allowance associated with stuff but if it's a development like we're talking
about in our multi certified errors they know full well they're going to be in
competition with Encore or DME and they'll do what they need to do from an
economic standpoint also to get service to that development so it's really kind
of putting us on the same playing field as the other two competitors that we
have thank you yeah sorry board member I think the difference here is that DME as
an MOU has single certified area and multi certified area but co-ops and
IOUs or investor on utilities do not they are in a fully competitive
environment so there is no single certified area for them I'm fairly
certain that CoServe has single certified areas north of town in Cook
County and I know Encore definitely has single certified areas across the state
but this I don't have a problem with our new formula what I what I'm concerned
about is if you're in our monopoly zone we're going to charge you more if you're
across the line we're going to you know provide a discount or we're going to
take into you know and we're not providing a discount necessarily we're
taking into consideration the ROI on this infrastructure it's gonna cost a
million dollars to build it but we're going to get back line service fees over
the next 20 years half a million dollars therefore we're only going to charge you
half the cost right well it costs a million dollars to build a develop the
same service in the blue area we're gonna get back half a million dollars in
you know future you know line service fees so why would we not also give the
ROI consideration inside of our single service area and that's like I said
I otherwise I think the competitive nature I understand the competitive
nature multi-service areas and we don't want to be at a disadvantage we don't
want to bankrupt DME trying to compete but we but in like the split between our
service area and the competitive service areas where I have concerns I think the
the question and if I understand correctly you can you can validate this
formula is whether it's equitable to the developers to have two different rate
possibilities or I'm sorry not rates but credit possibilities or from the
flip side it's DME and the existing rate base and so really the goal is to
minimize cross-subsidization anytime we do give a credit we're actually
shouldering the burden on the existing rate pairs and so the goal that we're
striving for is the most equitable to the to the existing rate base and now to
be competitive there are times when when maybe we do have to give some credit to
the developers but in general we've seen a consistent desire to come to Denton to
build here and so there's less of a concern of driving away business and
it's more of trying to provide an equitable base for the existing existing
rate pairs thank you okay any any other questions okay I'll continue again along
those same lines we just clarify a little bit of the differences between
the single certified territory and the multi certified territory so as as
mentioned before the new customers pay a hundred percent the the goal was to ease
the burden on the existing rate pairs and and it's not unheard of to do this
there are several other large municipally owned coops that I'm sorry
not co-ops municipally owned providers that that do the same the multi
certified territory the focus was on a formulaic approach finding the best way
to provide an incentive and yet still have a reasonable return on investment
this allows us to be competitive the residential development credit is
slightly different in that the data for that it's it's really a wide range of
what a residential development could require and so we looked at the data
from the last five years and we were able to average out the cost per
residents of extending to a to a home in a new development so that's where that
came from but with the caveat kind of to what mr. Rybeck was asking before
there is flexibility if we need to adjust that based on the formula we we
can but that's a starting place for us and commercial and industrial credits
will be calculated using the formula okay so the requested action is that the
council I'm sorry not the council but the board recommend approval of the new
line extension policy oops and also open it up to questions
mr. Rybeck go ahead I see you turned your light on finally got it to come on
okay so this new policy is one that you guys have obviously work with the
utility to put together and really all you're looking for is for us to
recommend it on to council it eventually will have to be approved by the council
so I guess you weren't entirely wrong in your presentation I don't really have
any other questions about it I appreciate that you came today to
provide us with this information and a little more background on it like a
little surprised when I got the email took a look at it and said well what are
we looking at here I think it was appropriate to pull it out from the
consent agenda for us to have a better look at it so thank you I have no
further questions just a comment I think if you look at this as a whole it may
not be totally fair to a developer that's building inside the single
certified versus outside the certified but the end the end result is it is more
fair for the rate payers the overall rate payers all right no other questions
do we have a motion to approve mr. Rybeck's motioning do we have a second
oh mr. Beck all in favor say aye opposed so that was very fast I think I will say
yeah actually okay okay I saw you were thinking so that was off all seven days
correct all right thank you thank you very much okay the next item is J and I
don't remember who pulled J oh I just had a question do we still have a city
engineer
or is J pre-qualified engineering firms thank you so Barbara the answer the
answer is yes Becky Davini is is our city engineer this particular item is for
engineering services at DME specifically which DME handled separately well I know
you're doing a considerable amount of work and I just had wasn't aware if we
still had one with there was one on staff and now there are more yes ma'am
Becky Davini is our city engineer okay thank you that was it okay do we have a
motion to approve so he's moving and Barbara's seconding all in favor say aye
aye any nays no okay item K item J yes
okay now is item K thank you again Jerry Fielder division engineering manager for
DME about mr. Doug Brion he was an engineering supervisor that will speak
to you guys about the young dry auger billing thank you thank you I'm Doug
Brion engineering supervisor for DME and just answer any questions you have yes
sir I was have a question about this contract similar to the other one the
this is for the directional drilling appears to be for all three departments
of the utility so is this a new contractor that we're working with this
is a contractor that we've worked with before in the past but we had a contract
that expired a couple years ago and had not been renewed for this time so yes we
have worked with him okay so this is somebody we had worked with before but
this is a new contract going forward again time of material not to exceed a
given amount that's correct thank you that's really my only question okay
I'm sorry mr. jumper you have a question we have a motion to approve mr. Beck is
motioning second please seconding all in favor say aye aye opposed all right item
M we really don't have a question but mr. cheek had to recuse himself because
his company bid on it so motion to approve so moved all right in a second
okay mr. Beck's seconding all in favor say aye aye Billy recuses himself all
right I'll go I'll go you're welcome okay the next item is a recommend approval
of the November 8th minutes I did notice that there was an error on item E we had
board member Russell approving and she wasn't there so that item has been
changed and for my signature were there any other changes okay do we have a
motion to approve those with the correction Billy moves second Devin all
in favor say aye aye okay next item item B the design build agreement for the
Hickory gas insulated substation an amount of forty million four hundred and
sixty nine thousand dollars good morning count Phoebe Mark Zimmer DME
engineering excuse me sir while you're queuing up would you mind taking your
mask off so we can understand you a little better thank you yes sir we're
here this morning for your consideration of a contract to design and construct
the Hickory GIS substation so back in 2014 DME identified the need to rebuild
the existing Hickory substation due to age safety concerns and incompatibility
with future CFP projects to convert the station from 69 KV operation to 138 KB
operation in addition DME determined that the existing site is not large
enough for needed expansion to serve additional customers and load in the
area so DME held public open houses to get citizen feedback on new substation
sites that feedback was provided to council and council ultimately chose the
site directly across the street from the existing substation that site was
purchased by DME in 2015 the appearance of the new Hickory GIS substation was
some some importance to see council council directed us to use an aesthetics
committee to determine the appearance of the perimeter wall around the
substation the design that was chosen by the committee is shown here on this
slide that is the design that is included in the contract in addition to
that council directed us to convert the existing overhead electric facilities
around this project from overhead to underground that's also included in the
contract the new Hickory GIS substation will serve approximately 20% more
customers than the existing substation and because we're using gas insulated
switchgear on the site we're able to do a future expansion on the site to serve
an additional 100% more customers and because we can do that that negates the
need for Eagle substation until at least 2034 so DME prepared a request for
qualifications to qualify firms capable of performing all pieces of the project
we received seven responses and we evaluated them based on qualifications
proven success stability and safety record after evaluation we chose for
those firms to receive a request for proposals which included technical
specification as prepared by our owners engineering black and beach after
reviewing those we determined beta engineering was the highest overall
evaluated and was also the lowest cost and also due to the instability in the
market right now beta is only able to hold the cost on this project until
January 14th of next next year so any delays and awarding a contract could
result in a higher contract cost so if awarded we would issue a limited notice
to proceed in January and we would expect project completion by October of
2024 so staff recommends approval of a contract with beta engineering LLC for
design and construction of the Hickory GIS substation in an amount not to
exceed 40 million 469 thousand dollars any questions I like that last
parentheses yes yeah yeah good portion of goes in our teeth yeah could you
remind me the difference in cost on putting the structure around it I mean
I'm all in favor I know it's expensive for the perimeter wall yes yes sir the
perimeter wall is about six million dollars a typical wall is three four
hundred thousand so quite a bit more this is gonna be real pretty I was
curious you projected that you wouldn't need the eagle substation until 2034
curious how you arrived at that specific time frame and we used a projected load
growth we use a percentage load growth an annual load growth to determine when
the existing stations will need additional capacity and so based on that
because we can add to this new Hickory GIS substation we can add additional
transformers there to serve more loads how much additional capacity can you add
to the new facility current 50 NBA currently the way this new substation is
designed we will initially construct it with 50 NBA of capacity and then we can
add another 50 NBA onto that so you can essentially double the size of facility
thank you and that's because we're using the gas insulated switcher and what
approximately is the savings of pushing that project out how many millions that
was just approximately it was Jerry do you remember the numbers we've got the
number but I don't remember right off the top of my head we can certainly get
that to you guys just curious go ahead so we're going from above ground to
underground does that bring any complications in any way for any
maintenance or repairs anything like that all right so converting the
overhead facilities right around the project from overhead to underground is
of course more expensive those costs are included in the contract so that's one
one task typically you can't have failures and underground facilities and
that's accommodated for in the design so we include extra conduit and the
underground of banks to accommodate for that so that is one concern we also are
designing the project where those underground facilities would not limit
the rating of the station in any way those are some of the things you can
consider when designing those facilities okay this is the first gas insulated
this may be me are there any issues with groundwater in the area since you're
going underground yeah anytime we do a project in that and we seem to have
issues with groundwater typically when it's typically when we're doing a
transmission line design or we're digging a really deep hole we have that
problem this project we don't anticipate the need but geotechnical
reports have been done on the site and are provided to this contractor so
they're aware of the site conditions so are you required to take any additional
steps such as dewatering or anything like that not not on the side no there's of
course drainage going to be installed inside the substation but no no
additional features thank you okay go ahead dinner thank you chair if you just
a few comments and then I have some questions I'm fairly new to the
Commission so just like to get a little bit more information or the board so I
love the the breakdown of the competitive bids it's really fascinating
to see like some of the other bids are very competitive on the switchgear but
then an extra six or eight million on-site design an extra three or four
million on the wall suddenly they're no longer competitive and then just for my
own information not really pertaining to approving this the the underground
distribution out does that have to be gas insulated as well or no sir it's
just an underground duck bank just in conduit okay and and then in the
exhibits the mock-ups the photo mock-ups there appears to be one above ground
line still headed I think it's south I was like trying to tell in the picture
if there was one shown there that's probably just an error in the float
assimilation but right around the new substation side of all the underground
facilities and then and at some point does it so there's a line that runs
north to you know North Bonnie bray is that is it going to go like a thousand
feet underground and the transition above or so there's two different types
of facilities that will be converted to underground so there's overhead
transmission facilities and overhead distribution facilities the existing
overhead transmission facilities were pretty much stay in the existing
alignment as they are they will convert from overhead to
underground be on the west side of the convenience store that's right beside
the existing substation and then all of the overhead distribution facilities
will all be converted within about a block around the site okay so then the
existing transmission line runs to the current site and then and that will I
guess that will stay DME owned it'll just have no equipment just like go
underground or under them there'll be a what we call a riser structure that
converts the overhead line to underground right there around the old
hickory substation and the rest of that site will probably remain DME property
indefinitely the rest of that site we will demo the mall retire and demolish
the old station and that'll be done under a separate contract and are there
any cosmetic like fent like I know there's a lot of screening on this one
is there any plans for changing the aesthetic of the existing location not
this time okay thank you we just plan to remove it other questions okay seeing
none do we have a motion to approve this item Devin of motions so move I'll
second and then seconds all in favor say aye aye opposed thank you thank you
it's been a long time in the making next item is management reports so madam
chair and board of so there's a few items that we've provided to you contracts
for some information on country for water and wastewater chemicals I think
Council Board member Taylor had requested a red line of the solid waste
criteria menu we've provided that to you as well and then also an update on the
leak adjustment policy that recently went to the council what I'll say with
with that one and also the chemical contracts certainly we endeavor to try
to bring everything to to the board prior to going to council though
obviously these did not were providing to you providing them to you kind of
retroactive I think as we move forward the council certainly talking about
going to a strict to meeting type of schedule and so we're certainly
reinforced with our staff to make sure that that they properly plan out their
items that they come to you before they go to the council so there's a couple
staff members here if you have any questions on items one two or three and
then finally on the new business section item again we just have a couple of
items that that we've had on here for a little bit of time and do plan to bring
those back to you obviously those were previously requested by you know mr.
self who's no longer on the board but we've still kept them on there the plan
is to still bring those back to you and we are working on that I just we just
want to keep them on there too as a reminder so happy to answer any questions
certainly the staff here if you have any questions on the other items mr. Beck
thank you I'd be glad to add my name to mr. sauce on the second item there if
that would help move it along okay very well thank you any other questions oh go
ahead thank you I just wanted to thank staff and mr.
Rangita for providing the the red line version of the solid waste manual I
notice there's a lot of red line the entire sections were completely
rewritten so there wasn't there wasn't a lot of detail to see in that red line
but I think it's solid waste has an interesting aspect where a lot of the
infrastructure is privately owned where all of the other utilities they're in
easements or they're in publicly owned streets if we want to change something
well we can change our rules and we can go back and retrofit potentially solid
waste all of that pickup infrastructure is on private property and so if if the
design manual doesn't require it or allow it you know that that dictates how
decades of infrastructure are built in the city and we can't go back and say oh
now we want to use this other dumpster thing this other dumpster style and
without forcing ten or twenty or fifty thousand citizens to change their
property so I think that's a unique thing where the criteria manual reflects
a major portion of solid waste infrastructure that can't be changed in
the future so thank you for the detail
other questions all right that brings us to concluding items does any board
member wish to have something put on a future agenda or have any comments to
make to the public I see no I'll just wish everybody a Merry Christmas happy
holidays and healthy new year motion to adjourn adjourn we're adjourned