Feb 28, 2022 Public Utilities Board on 2022-02-28 9:00 AM

All right, it is nine o'clock and we have a quorum, so a call to order the Public Utilities Board for the City of Denton on Monday, February 28th. The first item is public comment period. Does anybody in the audience wish to speak? Is there anyone on the phone that wishes to speak? All right, I guess not. All right, then we'll go into the regular meeting. On the agenda, the consent agenda, does any board member wish to pull any items A through C? Yes, Mr. Beck. Okay, we'll have to pull it then, so we can get into the record. Yes? C? B? A and B? Any others? All right, do we have a motion to approve item C? Oh, you want B? I wanted to pull C. Oh, you want to pull C. I'm sorry, and B? Just C. Just C, not B. Okay, and did you want, no, so then, now, do we have a motion to approve item B as in boy? So move. Okay, in a second. Okay, thank you. All in favor say aye. Aye. Okay, motion carries. Item A. My only comment is, thank you, Chair, was this ordinance, I guess it is, that we're going to be considering, is this something that's going to be retroactive that would go back to freezes prior to today, in other words, this last winter and even winter storm area. Good question. Yes, go ahead. Mr. Customer Service Manager, if I'm understanding correct, you're asking if this is going to be retroactive, like retroactive to cover past leaks. Yes, ma'am. We couldn't write it for a retroactive. It is going to be effective at the date Council makes the approval, and it will be effective moving forward. I think it's great policy, I was just wondering if we could capture some of the damage we had in the past. Go ahead, Mr. I didn't want you to sit down yet, I had a couple more questions about the ordinance. Sure. Currently, I guess, is the current leak policy informal or? The current leak policy is a very explicit policy in ordinance. It excludes the vast majority of leaks, we found that less than half of 1% of our customer base actually qualifies with the types of leaks that they receive. We wanted to be able to expand that program to give customers actual access to it. Regarding the proof, I was curious what, it doesn't really, the ordinance seems to rely on the policy and the policy document we have doesn't seem to indicate what level of proof is required. Well, that's because proof of leak and leak repair can vary. We first look for a plumbing receipt. If we don't have a plumbing receipt, then we'll move to looking for what are the parts, the receipt for the parts. But there are those times where you may have that part in your garage, in which case, we're going to ask you for a detailed letter so that we can gather something that says there was a leak, we knew what it was, we fixed it, and this is how it was done. Okay, thank you. My personal experience with this was probably 15 years ago, I had a leak in the yard, an antique compression coupler failed, and 50,000 gallons later, dug it up and replaced it with the $5 part. It was a $200 water bill versus at least a $200 service call for a plumber. Sure. It was easier just to pay the bill, so I was just curious if it was going to allow for that kind of home remedy. Yeah, we will allow for that, and that's part of the reason we left it a little broad, so that it does give us that little bit of flexibility to work with customers as we need to. Thank you. You're very welcome. So it's more flexible than it was in the past. It is much more flexible. Okay. It's much more consistent with what other cities in the area are doing. All right. Thank you. Any other questions? All right. Do we have a motion to approve item A? Mr. Beck motions? And a second? All in favor, say aye. Aye. The motion carries. Item C, as in cat. Is there someone here? Oh, thank you. Hey there. Okay. Yes. So my question is maybe a couple of questions relating to each other. So a lot of branded material seems like an awful lot of money for city dint and pens and whatnot, so just wanted a little more detail on when and how these are used and distributed to whom internally to the public. Sure. Hi, I'm Christine Taylor, the procurement director. So this contract is we're wanting to put it in place since departments are coming back since we are looking at holding more public events. It is a multi-year contract, so we are looking at capturing a three-year spend on this. So we did try to list out on each of them, but the branded material and things like that are going to be for community engagement events. If they do, I think Water listed a couple of examples for Water Week, various promotional campaigns through Solid Waste, parks events, any event where we're interfacing with the public and want some promotional items to really hit home those visual cues to see and remember those campaigns. But again, the contract is the dollar amount, not to exceed is not a requirement. There's no minimum spend that we have to obtain with this contract, so if events don't take place or we don't purchase them, there's no problem with not spending any money on the contract or exceeding it. But we did try to work with all the departments to capture what they think they will engage with the public over the next couple of years so we can have a contract in place that meets all statutory requirements and we can purchase those items easily. Okay. And if I understand correctly, everybody else used to do maybe a little bit on their own, so this is pulling everybody together and that's... Yeah, that's absolutely correct. We wanna pull that one commodity together and be able to easily identify what we're spending and making sure we're all kinda have equity in who we're purchasing from and that it meets purchasing requirements. Okay. So does that lead to any overlap of shared expense or discounts or anything? Yes. Since we are going through the purchasing, a cooperative agreement, we get, I believe it's a 10 or a five, it's a 10% discount on the items for each purchase that we do through this agreement. Thanks. All right. Any other questions? Do we have a motion to approve item C? Okay. And a second? Second. All right. All in favor say aye. Aye. Did you catch that, Kim? Okay. Thank you. Next item is consider approval of the February 17th, 2020 minutes. Do we have any changes to the minutes? Seeing none, do we have a motion to approve the minutes for February 17th? Billy moves. Oh, Ben seconds. All in favor say aye. Aye. That one carries. Item B. Good morning, Cassie. Good morning. Cassie Ogden, Director of Finance, here to seek your direction on a capital improvement budget amendment for solid waste. So just briefly, I have one slide for you. We're proposing a budget amendment to increase the capital improvement program expenditure by 4.4 million, and this is for the purchase of land for solid waste transfer station. Brian Boehner is here if you have operational questions, but I'm happy to take any financial questions. And I do have the next item also in case there are questions about the funding of this item. And we have operational questions for Brian. All right. Then do we have a motion to approve item B? Billy moves approval. Second? Ben seconds. All in favor say aye. Aye. Motion carries. Item C. This presentation is a couple slides longer, so just talking about the funding of the land purchase. So we are planning on issuing bonds, COs, for that purchase. And so this is for a reimbursement ordinance. We do these typically every October, but we can do them anytime within the year before we sell the bonds. Basically, it allows us to pay ourselves back once the bonds are issued. So we'll use fund balance or cash available to make the purchase before the bonds are issued because we aren't planning on issuing bonds this year until June. And so this is allowed by our city's debt policy. And again, this is the purchase that we are planning. It was a mid-year ad, so it was not included in the original CIP, so $4.4 million for that transfer station or the purchase of the land for the transfer station. And then again, next steps, just like every year, this will come back to council a couple of times before the actual COs are issued. So there's a notice of intent requirement that we have to post on the website and in the paper. And then there's also a parameters ordinance that will come to PB and council. And then the bond sale date will be in July. All right. Questions? Yes, Mr. Beck, go ahead. I'm sorry, and I might have missed it. Where was this land at for this new station? I'll let Brian answer that question. Just curious. Good morning, Madam Chair, members of the board, Brian Burner, Solid Waste Director with City of Denton. This property is located on the west side of City of Denton, west of 35, very close to where the deck is located right now. What we're trying to do is, you know, when we -- last year we would have included this in our budget, but with the whole housing crisis and speculative purchasing of land and everything getting kind of apy here, we just wanted to make sure that we had some property carved out to ensure that we could get through our permitting and everything else and be ready in the 10 or so years it's going to take to really get the critical mass of businesses and residents in this area. So we're looking forward to the construction of loop 288, which will help us in our transportation route and getting trucks from this transfer station into the landfill. Okay. So there's no zoning conflicts that we're going to -- No. We've worked closely not only with the existing code, but also with the current updates to the comprehensive plan to ensure that they are commiserate. Excellent. Thank you. Other questions? All right. Do we have a motion to approve item C? Very clear. And Ben seconds. All in favor say aye. Aye. Motion carries. Management reports. What's up, Madam Chair and members of the PUB? So it appears that we didn't attach the action item, but the only item that was still on there was related to a past PUB member's request, and DME is still working on that. We do plan to bring that back to the board. And then just to pass on a couple of other items, so starting March 14th, our plan is to hold the PUB meetings in the work session room, so we'll be going back there. Hopefully that'll help with some of the sound and some of the kind of issues that you've had. And then as a reminder, I know some of you had problems with the agenda last week. There was a number of items included in the management report. If you have any questions about those, please email them to me or to Kim, and we'll get answers to you if we need to set up a meeting with staff. We're happy to do that as well. The next item is just budget items in general. We'll report that back to you at the next meeting, but the budget office has a calendar already so that you can start making plans to be here. We want to make sure that you don't miss out on any of those budget presentations that will be coming up here before too long. And then finally, just because I had a question this morning, City Council did select Sarah Hensley as our permanent city manager, and they'll be taking up that contract consideration I think tomorrow, but I did want to pass that along to you, and we certainly look forward to working with Sarah, and she's always available to you if you have any questions. So happy to answer any questions that you have, but that's really the management report. Questions? Nope. All right. Thank you. All right. Any other board member wish to have a item placed on a future agenda or have any comments to make to the public? Seeing none. All right. We're into the work session. Receive a report, hold discussion, and give staff direction regarding the audit. Project 025, Energy Portfolio Management. Good morning, Madison. Good morning. I don't know how to get my presentation on here, Tony. Thank you, Cassie. Thank you, Cassie. Great. All right. Hello, PUB. I'm Madison Rorschach. I'm Denton City Auditor, and I'm just here to present our findings from our audit of the City's Energy Portfolio Transaction Administration. So this report details our findings from the first phase of this project, and phase two will cover the Renewable Denton Plan reporting, and it should be released next month. So this audit generally evaluated compliance with the City's Energy Portfolio Transaction Administration policies, including the energy risk management policy and the hedge plan. So annually, the City spends about $95 million in wholesale power costs, and these policies have been implemented to manage the risk associated with meeting the City's instantaneous electric demand through its energy portfolio. In order to meet this demand, DME's energy management organization must execute transactions, including hedges, to ensure energy put on the ERCOT grid by generators is available to be taken off the grid by DME to serve its customers. It's important to make clear that once energy is put on the grid, it's not physically possible to keep track of each unique megawatt hour generated. So instead, ERCOT uses metering and a system of accounting to track and financially settle the trade and use of electricity. So I'll begin by just discussing the different types of energy portfolio transactions and if these were executed in compliance with the City's policies. So in general, we reviewed three different types of energy portfolio transactions as part of the audit, including physical and financial trades, power purchase agreements, and congestion revenue rights. In general, the front office is responsible for identifying a transaction to execute, including monitoring the electricity market to identify appropriate physical and financial hedges, soliciting and evaluating generators to contract with for power purchase agreements, and bidding as part of ERCOT's congestion revenue rights auctions. The middle office is then responsible for ensuring these transactions align with relevant energy portfolio management policies, such as verifying that physical and financial hedges were executed with the proper authority, executing agreements with other market participants, and monitoring contract compliance. The back office is then responsible for processing received invoices and billing other market participants for executed transactions. The back office also communicates these transaction settlement activities to the City's Treasury and accounting divisions as needed to ensure that the transactions are recorded in the City's financial records. These duties and internal controls, including the effectively designed separation of duties and the creation of the risk management committee's governance activities, are generally laid out effectively in the City's energy risk management policy and hedge plan. And so the results of our review of each of these transaction types are summarized next. So beginning with physical and financial trades, we found that all 40 reviewed trades were generally executed, settled, and recorded appropriately in the City's financial records. However, there was no formal process for front office staff to approve trade transaction transactions after execution to ensure that they were appropriate. In addition, we found that the middle office did not have a process to verify that trade transactions were made by authorized employees based on the transaction authority limits set in the energy risk management policy. In addition, the middle office has established procedures for evaluating and monitoring the financial health of trading counterparties. However, documentation of these periodic evaluations were not maintained, so we couldn't verify the adequacy. For power purchase agreements, we found that the City was complying with state procurement regulations when going through the solicitation process. That being said, we found that for 10 of 46 reviewed agreement payments, the quantity delivered could not be verified based on the documentation provided by back office staff. In addition, we found that payments made for megawatt hours curtailed, which means that those megawatt hours that are not generated, but they could have been generated by the provider, they were curtailed by the City's direction, were very difficult to verify because there's not a physical commodity being delivered, and additionally, quantities can only be reviewed in 15-minute increments while curtailment decisions are made instantaneously, basically, based on market price. And then finally, for congestion revenue rights, awarded CRRs are automatically recorded in the City's Energy Trading and Risk Management System, or ETRM, and transactions are settled by ERCOT automatically in the City's CRR account with ERCOT. The back office has a process to monitor the City's CRR account and has established informal thresholds at which account replenishment payments are initiated. Also as part of our review, we noticed several administrative issues. In particular, we found that data stored in the ETRM system was not regularly reviewed, which resulted in some data inconsistencies. In particular, as I noted, we found that there were some CRRs awarded to the City that were not automatically recorded, but this issue has been fixed. In addition, we found that while the ETRM system included data on energy generated from the City's Power Purchase Agreements, this data was not used to verify megawatt hour quantities billed, instead the back office uses ERCOT settlement data, however, there were inconsistencies between the ERCOT settlement data and what was in the ETRM system. In addition, we found that while the middle office has developed and implemented standard operating procedures, they had not been updated since 2017 and did not match current practices. Furthermore, the middle office has been charged with administering access to the ETRM system, but no criteria or procedures had been developed outlining how that access should be granted, modified or revoked. In addition, we found that the back office did not have any standard operating procedures for settlement activities. We also found that the back office settlement activities were primarily performed by a single individual and the uniqueness and complexity of these settlement activities, along with the lack of standard operating procedures, further increases the risk that the City would be unable to adequately settle its energy portfolio transactions if that key role was vacated. So in summary, we issued a total of 12 recommendations to DME, all of which were concurred with, and so based on this response, we believe the identified risks will be appropriately addressed, but we plan to conduct a follow-up review in 18 to 36 months, which is just our standard practice. So there you go, whoops. All right, questions? I can pull this down. Yeah, well, maybe pull the slide 6 up, leave that one up. This one? Yeah, thank you. That's not the right slide. Sorry about that. There you go. Thank you. Any questions? Yes, go ahead. Thank you, Madison, for your report. I kind of empathize with you being the messenger of quasi-news. These lapses, though, do they seem to be more of an issue with training and staff, or are there technological problems with the system that are created? Oh, the data inconsistencies? Yeah. I think it's more of just technological issues, but I don't know if Terry would like to speak to that if he's here. It was indicated that there wasn't enough staff, too, and that was probably an oversight from just, what, COVID maybe going on, that there was some other factors that contributed to it? Yeah, I think there might be a lack of staffing issues, especially at the back office. Like we mentioned, there's just, and it's a key role, right? So if nobody's there to take that place, then we don't know, how do we get those activities done? And if I read about it, you're going to take the next 18 months or so to? Yeah, I believe they said that they would have everything in this report complete by September 30th, 2023. So we'll come back after that date and have a follow-up review. Okay. And again, one last one, and I know you probably can't answer it, but if we've lost the money as a result of this, is there going to be any way to recoup it, or are we just... Sorry, I say that again. As a result of these lapses, if the city's lost money of this, is there any way to recoup that, or are we just dialed up? It is what it is. Yeah, we didn't really find any losses, per se, just that the data was inconsistent between what ERCOT was using and the ETRM system. We did look at the PPA payments, and there were some discrepancies there with what we could verify, megawatt hours. But what we actually found was that the city had not lost money, but had maybe not paid as much as it seemed like was verified, so it didn't seem like there were any negative effects financially. Okay. Well, kudos to you. I don't envy your job, so good luck. Yeah, Mr. Beck, I'll just echo what Madison said. I think in her report, she was clear that it appears that we may have underpaid or maybe owing someone $80,000. I can tell you, nobody's knocking on my door asking for that money. But I think as, certainly I've incurred with all her recommendations, we're gonna be taking a look at not just the technical side of some of these transactions, but also the staffing side as well. And certainly we'll be bringing that back to you in the budget process if, in fact, we feel that we need to shore up some of those resources. But I can assure you, if we are owed money, we will do everything we can to go collect that money. And I'm not as enthusiastic about having to pay money, but that's just the way it's... If they're not knocking at our door. Yeah. Okay. Thanks, Tony. Appreciate it. So I wanna be clear. We did not lose any money. You did not find anything that says we didn't get the money. I think there were a couple transactions where it looked like maybe we had lost a very slight amount of money. Yeah. Like maybe a couple thousand dollars. Yeah. 95 million, very complex system, a couple thousand dollars. Yeah. In material. In material. Things happen. Yes, go ahead. Thank you, Madam Chair. So I commend your auditing ability that you can look at a system as complex as this and come down to 12. Took us a while. Yeah. Yeah. And DME, I know DME has its challenges in the complexity of multiple PPAs, then additionally hedging, a lot of systems, a lot of electric systems use their own generation and ERCOT. That's it. They have, or everything is settled through ERCOT. Makes it much simpler. You just verify the ERCOT settlement. We're settling against multiple PPA counterparties. We also have the hedging, also have the forward purchasing. We're probably not quite big enough to, we're in the double bind of we don't have the staff where we're, because we're buying gigawatts, to have lots of redundancy and we have pressure to keep our staff costs low. So we don't want to have, you know, if you can be done in less than 40 hours, that's one person. And then we have, and it's an expert salary probably, so hiring two experts maybe at 20 hours of work, you know, that's a budgeting question, right? But then we also need those controls and that redundancy in case of unexpected staff changes or, and control from a control aspect. So looking at this, I think this is, it's really great to see the audit and I think the results of it are, if anything, show just the challenges that DME faces in executing, you know, our 100% renewable plan. And so I think, I think it's, I don't think there's anything to be faulted here. As far as data, I was, I'm fascinated by, I'm very familiar with, it doesn't quite match ERCOT settlement. In my job role, I see that a lot and, you know, I think there's, at some point it's going to be what is the expected rate of error, you know, and, you know, data, the best way to fix data issues, just on my soapbox, is to utilize the data day in and day out. Like, it becomes a performance report to see how far different we are from ERCOT and whether we think it's ERCOT's fault or ours. But I mean, I don't know if that actually applies in this situation. So I just wanted to say this is, it's really great to see an audit of this detail with, I think, pretty strong findings and as complex as our system is, it's going to be challenging to have controls on every aspect of it, fully overlapping controls, so, but I'm glad we're, we want to move toward that while balancing, you know, overhead and staff hours and so forth. Thank you. So we went the right amount of controls, but not so many that it exceeds, the cost exceeds the cost of the, you know, but you know that. Yes. Other questions? All right. And what is the action on this? Just. I think, we don't usually take action. Oh, just direction. Yeah. Okay. Yeah. Well, we're planning to go to the city council tomorrow with this exact same presentation. Okay. Good enough. That is the direction. Awesome. Thank you so much. Thank you. And the next item is receive a report and hold a discussion and give staff direction regarding the options related to the creation and setting of metrics and goals related to the development of the comprehensive solid waste plan. What we've all been waiting for. Exactly. We have an exciting opportunity here and I appreciate the opportunity to stand before you and help lead this discussion. Again, I'm Brian burner. I am the solid waste director for the city of Denton. And again, this has been a long road to travel, but again, it's been an important one. City of Denton has been working over a year now on the development of a comprehensive solid waste management strategy. And so we can see the finish line up just ahead where we've looked at different programs across the nation, current, local, state, federal and global issues that stand in our way to potentially doing some really good work here and tried to set some realistic goals and metrics that will help define what our system will be, not only for the next 20 years, but over the next 40 years and springboard into the next 60 years. And long after I'm gone, we will have a very comprehensive plan that will help promote diversion across the city limits or the city of Denton and most importantly, the North Texas region. So really what I want to talk about today is just give you a quick status update on the strategy, review those metrics with the underlying goal that they have to be transparent. That's one of the big things that when looking at other plans across the nation, they aren't transparent. They're very confusing. And as such, you know, if we want people to be involved, they've got to know what's happening and what it's costing them. So transparency is going to be key. And secondarily, it needs to be representative of the city of Denton's efforts. We're not San Francisco, we are not Seattle, Washington, we are not King County, you know, we are the city of Denton. And granted, there's some commonalities in what we're talking about from a solid waste and trash management standpoint. But again, there's some unique things that allow us, I think, some opportunities to grow. We're in the second to third fastest growing urban area in America. And over the next 20 years, I think that their growth is going to be phenomenal. And as such, we have to position ourselves to be able to manage not only that, we are the regional provider of solid waste management services, or at least disposal capacity in North Texas, and what we want to try to do is to maintain that diversion that we have and really be the driver of what's happening in the North Texas area. Taking a quick step back, just really talking about metrics and goals, when we talk about metrics and goals, metrics are those sort of stepping stone things, those little bitty things that we put into place to help us in the not only development, but also reaching these short-term goals. So looking at things from a daily, weekly, annual basis that we can wrap up into some long-term goals, things that are a little bit more on the future. You can sort of stand up and see on the horizon. And then we have lifetime goals, which you may have to get to the top of the building to look way out, but again, we're setting two sets of goals, and we're setting them really as floors, not ceilings. It's what we want to do to reach as a minimum. If we exceed these things, great, it puts us well on the path to exceed what we're doing. But again, it gives us something that's not only attainable, but realistic and measurable. So when we're looking at the metrics that are going to drive our diversion goals, there are eight things that we're actually looking at here. First and foremost, we want to talk about the waste generation rate, and that's really the amount of garbage that every man, woman, and child in the city of Denton, and possibly the North Texas region, produces on a daily basis. What we want to be able to do is drive that number down. It's kind of interesting, when we first started looking at different programs across the nation and what they're doing, you know, the city of San Francisco had a fairly aggressive diversion goal and a zero waste plan. Well here recently, they've actually eliminated that goal. They've gone specifically to one goal, and that's waste generation rate. We're trying to drive that down as low as possible. They're not looking at recycling, they're not looking at diversion, they're specifically looking at generation. And to that fact, they're putting in different plans and programs, and I think that's important. And so that's an important metric for us to be looking at here. Similarly, we want to be able to look at increasing the rate that we're recycling material at the residential and commercial level. We are the sole provider for these two services, at least from a programmatic standpoint. There are a lot of things out there that are recyclable that you can't put in your blue bin. What we're talking about here is what's in your blue bin, what we as a city are able to manage internally. Ideally, what we'd also like to do as a caveat to this is manage those things that may not be your, you know, one through seven plastics, that may not be your tin cans, your aluminum cans, or your glass, and be able to report that material also. We have some wonderful partners, you know, Tetra Pak, Peterbilt, other large corporations here in the city of Denton that have extremely robust recycling facilities. But again, they're not manufacturing or utilizing water bottles. They're not, you know, they're not emptying soup out of a can, you know, they're building trucks, they're making labels, and as such, you know, those two pieces don't align. So not only do we have to focus on what we as a city can manage from a programmatic standpoint, but what everybody else is doing and drive those two pieces together to help better communicate what's happening from a recycling standpoint. Consistently, also, what we want to do is drive down the contamination rate. We have been doing phenomenally over the past two years in light of COVID, the global markets, the Asian sword, which basically cut off, you know, all the markets in the Asian market for us to be able to send material to, and currently we realize that, you know, our current contamination rate is 61%. It's hoarded, but again, it's better than it was a year and a half ago when it was almost 80%. You know, and the thing to remember, keep in mind, is if this had been three years ago, our contamination rate, we would not have to change anything as to what we're doing, but our contamination rate would have probably been down to about 25%. And it's all, you know, the quality of the material. Because the market is so much smaller here in North America, the material that would have normally been taken and utilized now is considered coal and contamination, and we have to manage it as such. So again, what we're hoping to do is put in programs to increase quality, decrease contamination. The next goal that we want to be able to report, a metric we want to be able to report on our drive to diversion is the capture rate. How much material is in the, or are we able to capture curbside to be able to divert as opposed to what's going in the landfill, both residentially and from the commercial sector. Bottom line, landfill life. That's what this all comes down to. We want to be able to extend the life of our landfill as long as we possibly can. This is a tremendous resource. It's being utilized as a regional facility as it has been since the day it opened. And we want to be able to continue that, but again, make the life as long as possible. And then again, organics diversion. This is probably the low-hanging fruit in this entire argument is to be able not only to manage yard waste, but look at food waste diversion and other organic materials that are out there for us to be able to increase as we move forward. One of the really exciting things that happened back in November, there was finally, EPA finally set a national solid waste reduction goal. But as part of this report, EPA announced that they wanted to increase the U.S. recycling rate to 50 percent by 2030. So again, in the next 10 years or eight years, drive up that material or that diversion rate or recycle rate, excuse me, to 2030. And we're talking about what they're looking at specifically, again, it's those programmatic materials, that easy stuff that we can capture, plastics, paper, cans, containers and glass. Yes, sir. So the recycle rate, does that mean the 50 percent, does that mean 50 percent of all recyclable materials are then recycled or 50 percent of waste is recycled? Fifty percent of those materials that are able to be recycled programmatically. So again, you know, I listed paper, plastic, metal, cans, containers, glass. There are other things that are out there that are recyclable. I mean, wood, let's say, you know, scrap pieces of two-by-four. Technically, you can recycle and reuse those if you define it broad enough, but that's not included in here. So if, you know, if just to make the math easy, if the U.S. Container Council produces a hundred bottles in this year, they want to ensure that 50 of those bottles are put back in the system and reused and recycled. I got a question. Maybe it's later in the presentation, but are you considering the paving products recycling at all in this analysis? I'm sorry. Paving products? Are you considering paving products recycling at all? Paving. Paving products. Yes. So that's part of the issue, or part of what we're looking at. What we want to be able to do is not only the city be the driving force, but we will look at the third party and the open market. Currently, there is a very robust concrete asphalt type of recycling community out there. What we want to do is to be able to expand that. We don't need to be in the business where we're competing with the open market, but I think if, yeah, as part of this process, if we put in rules, regulations, and mandates, which will help drive that material into the third part. We have a tremendous amount of buying power here in the city of Denton, so riding our specs that says you have to have at least 50% recycled content as concrete aggregate or millings or whatever, then now of a sudden, we become a key in driving what that is. If we can set a standard type of specification now, not only is the city of Denton helping drive that, but let's think about these smaller cities that could use some of our help. The Crumbs, the Argylls, the Aubries, the Pilot Points, the Ponders, the Prosper's. Now they can take this standard spec, throw it into their contracts, and all of a sudden, instead of one city out there standing alone, you've got this large purchasing conglomerate that will really help drive a lot of this. The city of Denton in recent years has gone away from allowing recycled products in their pavements, which makes no sense to me. If you don't allow it in your engineered product, then it's going to be hard for you to recycle it. Exactly. Exactly. I think that's the discussion we have to have with our CIP folks, as well as some of the local educational communities, because a lot of what engineering across the state of Texas, they're relying on the TTI, Texas A&M, UT, North Texas, a lot of these powerhouse educational facilities to help define what some of these specs and standards are going to be. If we're in partnership and working with them to help move this forward, now we've created this huge opportunity that we're looking to fill. Yes, sir? Brian, could you just, and I don't want to drag you down too much here, but could you just, a little bit more input on organic waste, because I know that isn't a big part of your deal, but it may grow, and there's a lot of people out there. Is there conceivably an opportunity where there will be a separate bin for organic waste per homeowner, per residential, or something a little bit bigger where there's a dumpster type location within a community where people could take it and make it easy for the city to do that? I think we're talking both trying to answer the what and the how. From the what standpoint, we do want to divert as much organic materials as possible. How is the big question? Currently we do have an organics recycling container at your house, though it's a brown yard waste bin, and you can put grass clippings, you can put yard clippings, you can put tree clippings. The big brown bin? Yeah, the big brown bin, or even the paper bag, the craft bag, and uncooked vegetables. That organic material that hasn't been cooked, doesn't have fat oils or grease in it, that can go in there. And now we can manage that material and it's managed on a weekly basis. But let's say the spoiled food from your household, you finish Thanksgiving and you've got the rest of the turkey carcass and the little brown scrapings off the edges of the stuffing bowl. What happens with those? I can conceive at some point that you may have a bin on your counter, whether we pick that up curbside or set up some sort of regional type of collection dumpsters where you go maybe to a library or to a park or out to the landfill and pour that material in there, that may be what it looks like. So again, we're talking a lot of what now as we look at implementation, that's where the how questions will be answered. Okay. Thanks, sir. Thank you. We're going to go ahead and continue here. And again, looking nationwide, this is just a smattering of the few plans that we looked at. And again, locally, when we look at our partners here in North Texas, Dallas and Fort Worth, they've got some fairly aggressive goals. Dallas wanted to have 60% by 2030, but currently, and their plan started in 2013 and currently they're at 20%, but again, Dallas is a fairly large community. City of Fort Worth, again, 40%, they stated in 2017 and they're currently at 30% and that's by 37. Now put this in perspective, when I left Fort Worth back in 2010, we were at 28. So again, they've had just a little bit of a creep there, but again, I think there's some opportunities to continue to improve that. You look at Austin, Houston, San Antonio, similar type results, and then you get across the United States. Some of these, when you get outside of the state of Texas, you see some fairly significant goals, 90%, 90%, 80%, 70%. One of the things you have to remember when these cities were setting these goals, first of all, it wasn't comprehensive. A lot of these are related specifically to the residential community. They do not address the commercial waste sector, and secondarily, they have a bullet in their pocket that we don't have, and a lot of that is state mandates with regard to container, bottle bills, buyback, things of that nature. In the state of Texas, currently there are no laws that allow us to limit bags and what kind of container you can bring your groceries home in and the nickel we used to get on the pop bottles. We don't have that in ... You got a nickel for it. We've got certain challenges that we have to face on this uphill climb, but again, I think as we go through this and look at this comprehensively, we've set some goals and looking at some opportunities here that are realistic. Based on everything that we've looked at, some of the opportunities and the crawl, walk, run mentality of nature, what we want to try to do is define a long-term diversion goal in the city of Denton of 40% by 2040. The 2040 period is important because again, from a comprehensive plan standpoint, the update, we're trying to align a lot of our plans and with 2040 being the comp plan date, we want to be on that same time period. 40% also, I think it gives us the opportunity to get programs in place, get funding in place, get mandates in place, get rules and regulations in place, get education in place, and really get that conversation and momentum started. Secondarily also, it gives us a good educational metric, 40 by 40. It just rolls off the tongue, that alliteration, it helps, it sticks in your mind, and you're going to be thinking about 40 by 40 the rest of the day. Similarly, we want to have a lifetime diversion goal of 75 by 75. Where do we come up with 75? Well, it goes back to that capture rate. Back in October of 2020, seems like a long time ago when it was, but we actually grabbed a couple hundred trash carts off the curb and tore them apart, weighed what was in there, identified specifically what the components were, and we found out that based on what we know now, we have the opportunity to capture about 75 or 73% of everything that's being thrown away. So, if we set an 80% goal, and we only had the ability to recover 73%, that's unattainable. But again, if we're working towards trying to divert everything that's possible, 75 by 75 makes a whole lot of sense. So again, that's where that 75, and again, it's alliterative, 75 by 75, 40 by 40, 75 by 75. So, what does that mean as opposed to where we are now? Well, currently, the city of Denton, and again, I'm just talking about our residents and our commercial structure, we're at about 15%. Not too shabby, not too great, but again, it's a good starting point. Currently, every man, woman, and child in the city of Denton, we produce about one and a quarter pound of garbage per person per day. What we want to be able to do is drive that down. Our current residential recycling rate is about 11% with a 61% contamination rate. From a commercial sector, and again, this is only the programmatic material, what you would put in your blue bin here is really what we're trying to recover from commercial sector right now is about 2%. But again, we don't provide recycling to everybody, so we don't have that number to really round that out, but that's everybody that we collect. Commercial contamination is about 55%. When we look at the residential capture rate at the residential curbside, we're at about 50%. So we've gotten about half of everything, so we still have about halfway to go to be able to really clean up the garbage bins. Also looking at our landfill life with our current expansion and everything else, we're at about 50 years, a little bit more than that right now, and part of what's driving that is just the growth in this area. Not only our waste hauler agreements, but really the regional customers that are single pay that come across, that is just going up every day, and that's not just commercial customers, that's residential customers cleaning out their garages, moving in, moving out, things of that nature. From an organic standpoint, that's really a short-term success. Currently with the implementation of our carted and bagged program, we've been able to drive that number up to about 28,000 ton a year, almost 29,000 ton a year. We collect slightly north of 6,000 tons curbside, and then about 300 ton of organic material from commercial customers such as Walmart, Target, Sam's. They have special bins outside that we go and collect the spoiled vegetables and everything else that they have and put that in to be making dino dirt. One of the big successes is really the direct haul, so those people, those arborists and everybody else that's working in Denton and sort of in this North Texas region, bringing us material to make the dino dirt out of, almost 22,000 ton a year of direct haul material going up. Again, we have a good product, we have a system that can manage it thanks to wastewater in that group for beneficial reuse for driving that, but again, looking for some exciting opportunities as we look at commercial food waste diversion, food waste diversion from our university cafeterias and things of this nature, so really some exciting things that is going on now. If we look, if we wanted to take this as a regional diversion rate for everything that we're managing here through the City of Denton landfill, that drops to about 7.5%. But that number, I'm going to put an asterisk on that because again, we know most of the these that are being serviced by these contract haulers have recycling programs, but we're not able to capture that number yet. Part of what we want to do if we extend these waste hauler agreements is to require reporting of what those numbers are and actually create some sort of incentive that the more you recycle, the better rate you potentially get from us and create opportunities for them to divert within our system also. So again, there's some, we use the power of our dollar and our system to help drive the improvements there. So with that- Oh, go ahead. Yes. I have a question on the last slide if you could, Mayne. Yes. Okay, so commercial recycle rate is only 2%. Yes. Do you guys have any idea why it's so low? Well again, there's several things. First of all, we're only recycling programmatic material. So again, bottles, containers, cans, and if you're going to, if you're pulling the can at U-Haul, how many of those are they going to have? Absolutely nothing. A lot of this comes from the commercial sector, a lot of it, not commercial, a lot of this comes from the multi-family sector, which again is highly contaminated, you know, any port in a storm, somebody's walking out to their car to go to work, closest band it goes into. So we're currently, and again, these are 21 numbers. These are not the current numbers, but it's the last full year. But we're currently with lid locks and sized lids, we're really driving the multi-family contamination number down right now. Working with schools and institutions to help rectify and really tighten up their janitorial services so that again, we've got people that are putting the right materials. So again, and again, from a commercial sector standpoint, the amount of material that's able to be recycled from some of these locations is minimal. Yeah, so I looked into getting like a recycle dumpster for our company a while back in it. If I remember right, you actually pay for it? Yes, you do. Okay, so have you all thought that might be a dissentive in any way? Well, you're going to pay for it either way, because I mean, let's say... For the service, yeah. I mean, let's say, well, but it's also mass balance, let's say you got 10 yards of garbage. If you can recycle 50%, you still have 10 yards of material to deal with, five yards in this can and five yards of this can, and it actually cost us twice as much to go out there to pick it up and service it. It's a little bit of a disincentive on the front end, but it's part of our recycling, the way the whole rate system's set up, you're not paying the disposal charge on the recycling dumpster. That's a net savings, utilizing that dumpster versus your garbage dumpster. That's great. Thanks. Oh, yes. Go ahead, Billy. So are you accounting for any... I'll do it like this. Are you accounting for any of the recycling that you're not doing? Does this take into account... No, this does not take into account any recycling that we do not have specific control over, and that's going to be step one here, is rewriting our Chapter 24 ordinance that will allow us to capture that material. The University of North Texas right now has a very, very robust, internalized recycling program. A tremendous amount of material is at the diverting, but we never see that. We don't know what that number is, but we haul all their garbage. So again, it's almost we get the denominator, but we don't get the numerator in the process. We shred almost every piece of paper that goes out our door, and it's recycled by the people we pay to shred it. Correct. Well, also, if you come over and look at that pile of black recycled asphalt that I have at my yard, it's about 50,000 tons. Yes. So we'll recycle every bit of that. Right. So anyway. That would help your numbers. Yes, sir. I think David had a question. Yeah, I was just trying to understand. So again, these numbers, the recycle rate is tons in the green bin versus tons in the blue bin? Net of contamination. So again, we've pulled out all the contaminated material, put that back over on the garbage side. So 11% of it actually is going to some third party to be reused beneficially in a new product. Okay. So contamination rate is tons of non-recyclable material in the recycle bin. So you're saying over half of what enters the recycling facility is not a recyclable material like our list of approved recyclables? No. It may be a material that is programmatic and recycling, but because of the way it was managed in your bin, it has become contaminated and we cannot manage it. Imagine you have half a bin full of paper and somebody absentmindedly throws a bag of dirty diapers on top of it. Now all of a sudden we have a half a bin of contaminated material. 95% of that is a potentially recyclable product, but because it was contaminated, it has made it non-processable through our facility. And that may be even a better way to look at this, that 61% of this material is non-processable because, again, it has been contaminated by garbage, yard waste, aspirational recycling. It's material we don't take right now. A film, a -- Garden hose. Pardon? A garden hose? A garden hose. A tangler. Styrofoam. Styrofoam is notorious for this. Technically it is a recyclable material, but we do not manage our program. People see the recycle triangles, they put it in the bin, and we get it, and it has to go out the back door. And the way that number is captured is tons into the MRF and then tons out the MRF. And so, okay, and now 11% and 2%, how does that get to 15% diversion rate? It seems like your average would be 9 or 8. That's really good because, again, that's the recycle rate versus the diversion rate. Recycle rate is a term we're going to use specifically about programmatic material. Diversion rate is everything we have control over, so organic material. If we're using paving, you know, if we're able to be able to do paving. At some point in time, I would like to be able to capture all this donation boxes that's on every target and Kroger parking lot right now, we've got material going in there that could have potentially been waste coming to us, but it's being beneficially diverted somehow. So if we can capture that weight, then now that gives us a better understanding of what's happening in the city of Denton. And if we can define that third party, maybe instead of the nasty old box sitting out in that parking lot that's always overflowing and causing litter everywhere, create some sort of partnership opportunity that now we've got a little bit of a storefront maybe or an area that we can, you know, create that it's, first of all, it's aesthetically better, but secondarily, the material's not being damaged because, you know, it's being rained on or somebody's carting it off for this or that. And the contamination rate, has it always, you said it's, it was lower in the past? Well, it has been lower in the past because again, the quality standards were much more forgiving for lack of a better term. So you know, the higher spec stuff could go over here, but the lower spec stuff was, I mean, in all honesty was being sent to Asia where, you know, they had people that were secondarily picking through a lot of this stuff. So again, the quality of the material in the can has not changed significantly. Our ability to find a processor that would manage that quality of material has decreased. Okay. So then, and really this might be, this might be baled number six plastic that there's no market for and it ends up in the landfill? Correct. So it might, it might even be like fully processed material, like the MRF, the MRF in theory. At that city of Bend, we are not taking any fully processed material into our landfill. Okay. Okay. So again, you know, the initial calling happens at the, at the sorting floor. Materials dropped, it's carved out. We make a, we make an estimate estimation and then the tonnages are calculated on the backend. So but again, if it's processed through the MRF, it goes to a third party processor where it's been officially recycled. It is not thrown away. Okay. All right. That's good to know. Now, at these rates are, you've talked about the programs you've talked about to increase the recycling rate and diversion rate is to take credit for services that are being already performed. Like we talked about UNT, talked about the donation boxes, you know, I'm assuming like we want to make sure we do a full accounting of all waste in Bend. Are there any plans, is it feasible to increase commercial or residential recycling rates or decrease contamination? Like I guess I'm curious about those goals. Yeah. And I see where you're coming from and I apologize if I didn't make it clear. We're currently working in driving those numbers down. Again, these numbers are a year old. They're not into 22 and you know, we have a cart audit program right now that's extremely robust. We have auditors out there lifting the lid on recycling bins in neighborhoods before the trucks get there, so to speak. And you know, we've been able to drive this number down significantly. I think really in, you know, currently our monthly recycling average is about, contamination level is about 48% instead of 61%. The 61% is an annual from the past year when we started really high. That number continues to come down. Part of that is just, you know, walking and talking to people in the neighborhoods, doing the point, the single point education says, you know, this is not recyclable. This is what we found. So and we've got people in the commercial sector. We've got people in the multifamily sector. We're running, you know, test routes, trying to identify what those materials are so we can create programs that will continue to drive that contamination level down and increase the quality of material. Because again, from a recycling standpoint, it's all about quality. It's not about quantity. Quantity has nothing to do with it. It's about quality. If you can get the highest quality, you can get the highest cost and again, the highest return and then the quantity follows. But until you've got quality covered, quantity doesn't matter. Okay, so you have current programs on like the cart audits in residential and you said you mentioned planning future programs to further residential, you kind of just said it in a sentence very quickly. Do you have future programs also to improve the recycle rate and contamination rate? Yeah, we're currently working on, like I said, the cart program, we're doing the audits. That's really what's driving it down. But then we're going to be looking at some other programs in the commercial and multifamily sector which will help clean up those bins also so that we can continue to reduce the contamination, increase the quality and also work with the community to help those people who currently don't have recycling containers, get them into the system also. Okay, so that really seems to be targeting contamination rate. Yes. Yeah. And that's a one person at a time education by cart audit in the residential. And I'm just trying to think of what other, like holistically you have a stream of generated waste, it goes to a lot of places. A lot of those are carts and dumpsters that then go to the MRR for the landfill. Other points of diversion, are you looking at anything landfill, at the landfill for diversion? Yeah, we are. We are. To be honest, and a lot of that goes to the direct hall. But anything that happens at the landfill will be for the mom and pop that pulls across the scale. And with the establishment of our new public disposal facility that we're currently constructing out at the site, that will help us further that recycling. When you pull into it, one side you'll be able to dump, the other side will have recycled containers. Metal, bigger metal that wouldn't be able to fit in your cart, steel, things of that nature. If you're bringing in a bulk paper or boxes or things of that nature, that will be able to be thrown over in those bins. So those are the diversionary tactics. But things like C&D and concrete and brick and rubble and things like that, that's where the opportunities on the third party exist and we're going to be working closely with economic development to create those synergies that not only bring jobs to the city of Denton, but also help provide opportunities to recycle that material before we even see it. Yeah, I mean, I definitely think the best option is it never reaches the landfill. That is correct. But if 15% of the waste is this product and it's getting to the landfill, it's entering the landfill, then it seems like you can educate all you want. It might be necessary to divert at the landfill. And so that recycling, I had no idea that program was there. That's a good, so that's MRF materials, the big four MRF sorted recycling. Material recycling or material recovery facility. No, it's the blue bin sorting, yeah, because recycling, like you said, recycling is concrete or asphalt or wood or all this other, but things that go into the MRF like... Material recycling facility. So I guess another question I have is how is this aligning with citywide plans? I think this is, you know, any city department can have the best intentions and plans. I'm curious how the sustainability board and city council, how much overarching support does this have? Like was mentioned earlier, if we don't use recycled concrete in our building contracts, there's no market for the concrete to be recycled. And so I do feel like this needs to be, not just like, you get the brunt of it. You are receiving it every day, like all the waste material comes to the door right outside your office. However, this does need to be approached systematically, you know, and with support from the greater city system. Have you presented this to the sustainability committee yet? No, and they will not really have a discussion or direction on this. Once we start implementing it, then that's when we will rely heavily on their feedback. We present this same thing to council tomorrow, but I think you hit the nail right on the head. We got to clean up our own house first before we really reach out. And part of this plan and really the job that I'm not really looking forward to over the next year, year and a half, is, you know, pulling other departments forward, kicking and screaming to align with what we're wanting to do here. Because again, this is not a solid waste code revision. This is a development code revision. This is a purchasing code revision. This is sustainability and environmental. This is a process right now. We have a wonderful partnership with water. How are we going to have to change that to ensure that we increase our opportunities from an organic recycling standpoint? So there's a lot of moving parts internally that we have to get our arms around, and I think based on with discussions I've had with the effort management here, we're in alignment about where we need to go with this, and again, it will be small steps, but again, there will be critical steps that we will make. And once we get to that point, then we'll be reaching out into the community further. Thank you. Thank you. Other questions? No? Well, I'm impressed. Thank you very much. I appreciate it. All right. I guess that is the last item. So Billy, do we have a motion to adjourn? 10.05, we are adjourned.