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 All right, it is nine o'clock and we have a quorum, so a call to order the Public Utilities

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 Board for the City of Denton on Monday, February 28th.

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 The first item is public comment period.

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 Does anybody in the audience wish to speak?

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 Is there anyone on the phone that wishes to speak?

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 All right, I guess not.

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 All right, then we'll go into the regular meeting.

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 On the agenda, the consent agenda, does any board member wish to pull any items A through

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00:00:38,040 --> 00:00:39,040
 C?

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 Yes, Mr. Beck.

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 Okay, we'll have to pull it then, so we can get into the record.

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 Yes?

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 C?

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 B?

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 A and B?

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 Any others?

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00:00:55,360 --> 00:00:59,800
 All right, do we have a motion to approve item C?

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00:00:59,800 --> 00:01:02,680
 Oh, you want B?

19
00:01:02,680 --> 00:01:03,680
 I wanted to pull C.

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00:01:03,680 --> 00:01:07,480
 Oh, you want to pull C. I'm sorry, and B?

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00:01:07,480 --> 00:01:08,480
 Just C.

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 Just C, not B. Okay, and did you want, no, so then, now, do we have a motion to approve

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 item B as in boy?

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 So move.

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 Okay, in a second.

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00:01:20,280 --> 00:01:21,280
 Okay, thank you.

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 All in favor say aye.

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00:01:23,480 --> 00:01:24,480
 Aye.

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 Okay, motion carries.

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 Item A. My only comment is, thank you, Chair, was this ordinance, I guess it is, that we're

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 going to be considering, is this something that's going to be retroactive that would

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 go back to freezes prior to today, in other words, this last winter and even winter storm

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 area. Good question. Yes, go ahead.

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 Mr. Customer Service Manager, if I'm understanding correct, you're asking if this is going to

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 be retroactive, like retroactive to cover past leaks.

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 Yes, ma'am.

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 We couldn't write it for a retroactive.

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 It is going to be effective at the date Council makes the approval, and it will be effective

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 moving forward.

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 I think it's great policy, I was just wondering if we could capture some of the damage we

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 had in the past.

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 Go ahead, Mr.

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 I didn't want you to sit down yet, I had a couple more questions about the ordinance.

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 Sure.

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00:02:29,200 --> 00:02:33,440
 Currently, I guess, is the current leak policy informal or?

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00:02:33,440 --> 00:02:39,800
 The current leak policy is a very explicit policy in ordinance.

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 It excludes the vast majority of leaks, we found that less than half of 1% of our customer

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 base actually qualifies with the types of leaks that they receive.

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00:02:50,680 --> 00:02:59,360
 We wanted to be able to expand that program to give customers actual access to it.

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00:02:59,360 --> 00:03:05,880
 Regarding the proof, I was curious what, it doesn't really, the ordinance seems to rely

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 on the policy and the policy document we have doesn't seem to indicate what level of proof

52
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 is required.

53
00:03:12,720 --> 00:03:17,760
 Well, that's because proof of leak and leak repair can vary.

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00:03:17,760 --> 00:03:20,160
 We first look for a plumbing receipt.

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 If we don't have a plumbing receipt, then we'll move to looking for what are the parts,

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00:03:23,880 --> 00:03:25,400
 the receipt for the parts.

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00:03:25,400 --> 00:03:29,360
 But there are those times where you may have that part in your garage, in which case, we're

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 going to ask you for a detailed letter so that we can gather something that says there

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 was a leak, we knew what it was, we fixed it, and this is how it was done.

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00:03:39,040 --> 00:03:40,040
 Okay, thank you.

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 My personal experience with this was probably 15 years ago, I had a leak in the yard, an

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 antique compression coupler failed, and 50,000 gallons later, dug it up and replaced it with

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 the $5 part.

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 It was a $200 water bill versus at least a $200 service call for a plumber.

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00:04:06,920 --> 00:04:07,920
 Sure.

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00:04:07,920 --> 00:04:10,720
 It was easier just to pay the bill, so I was just curious if it was going to allow for

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 that kind of home remedy.

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00:04:11,720 --> 00:04:15,080
 Yeah, we will allow for that, and that's part of the reason we left it a little broad, so

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 that it does give us that little bit of flexibility to work with customers as we need to.

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 Thank you.

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00:04:20,920 --> 00:04:21,920
 You're very welcome.

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 So it's more flexible than it was in the past.

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 It is much more flexible.

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 Okay.

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 It's much more consistent with what other cities in the area are doing.

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 All right.

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00:04:28,800 --> 00:04:29,800
 Thank you.

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 Any other questions?

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00:04:30,800 --> 00:04:31,800
 All right.

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00:04:31,800 --> 00:04:32,800
 Do we have a motion to approve item A?

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00:04:32,800 --> 00:04:33,800
 Mr. Beck motions?

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 And a second?

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 All in favor, say aye.

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00:04:35,800 --> 00:04:36,800
 Aye.

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 The motion carries.

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 Item C, as in cat.

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 Is there someone here?

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 Oh, thank you.

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00:04:40,800 --> 00:04:41,800
 Hey there.

90
00:04:41,800 --> 00:04:42,800
 Okay.

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00:04:42,800 --> 00:04:43,800
 Yes.

92
00:04:43,800 --> 00:04:58,680
 So my question is maybe a couple of questions relating to each other.

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 So a lot of branded material seems like an awful lot of money for city dint and pens

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 and whatnot, so just wanted a little more detail on when and how these are used and

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00:05:10,960 --> 00:05:14,320
 distributed to whom internally to the public.

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00:05:14,320 --> 00:05:15,320
 Sure.

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00:05:15,320 --> 00:05:18,360
 Hi, I'm Christine Taylor, the procurement director.

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00:05:18,360 --> 00:05:22,280
 So this contract is we're wanting to put it in place since departments are coming back

99
00:05:22,280 --> 00:05:25,040
 since we are looking at holding more public events.

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00:05:25,040 --> 00:05:30,400
 It is a multi-year contract, so we are looking at capturing a three-year spend on this.

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00:05:30,400 --> 00:05:34,520
 So we did try to list out on each of them, but the branded material and things like that

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00:05:34,520 --> 00:05:37,220
 are going to be for community engagement events.

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 If they do, I think Water listed a couple of examples for Water Week, various promotional

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 campaigns through Solid Waste, parks events, any event where we're interfacing with the

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 public and want some promotional items to really hit home those visual cues to see and

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 remember those campaigns.

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00:05:53,960 --> 00:05:59,040
 But again, the contract is the dollar amount, not to exceed is not a requirement.

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00:05:59,040 --> 00:06:03,800
 There's no minimum spend that we have to obtain with this contract, so if events don't take

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 place or we don't purchase them, there's no problem with not spending any money on the

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 contract or exceeding it.

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00:06:10,720 --> 00:06:14,560
 But we did try to work with all the departments to capture what they think they will engage

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 with the public over the next couple of years so we can have a contract in place that meets

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 all statutory requirements and we can purchase those items easily.

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 Okay.

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00:06:23,600 --> 00:06:29,120
 And if I understand correctly, everybody else used to do maybe a little bit on their own,

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 so this is pulling everybody together and that's...

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 Yeah, that's absolutely correct.

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 We wanna pull that one commodity together and be able to easily identify what we're spending

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 and making sure we're all kinda have equity in who we're purchasing from and that it meets

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 purchasing requirements.

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00:06:42,680 --> 00:06:43,680
 Okay.

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00:06:43,680 --> 00:06:48,640
 So does that lead to any overlap of shared expense or discounts or anything?

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00:06:48,640 --> 00:06:49,640
 Yes.

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 Since we are going through the purchasing, a cooperative agreement, we get, I believe

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 it's a 10 or a five, it's a 10% discount on the items for each purchase that we do through

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 this agreement.

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00:07:00,720 --> 00:07:01,720
 Thanks.

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 All right.

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 Any other questions?

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 Do we have a motion to approve item C?

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 Okay.

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00:07:07,760 --> 00:07:08,760
 And a second?

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 Second.

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 All right.

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 All in favor say aye.

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00:07:11,760 --> 00:07:12,760
 Aye.

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00:07:12,760 --> 00:07:14,560
 Did you catch that, Kim?

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00:07:14,560 --> 00:07:15,560
 Okay.

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00:07:15,560 --> 00:07:16,560
 Thank you.

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00:07:16,560 --> 00:07:21,080
 Next item is consider approval of the February 17th, 2020 minutes.

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 Do we have any changes to the minutes?

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 Seeing none, do we have a motion to approve the minutes for February 17th?

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00:07:29,040 --> 00:07:30,400
 Billy moves.

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00:07:30,400 --> 00:07:33,400
 Oh, Ben seconds.

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 All in favor say aye.

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00:07:34,640 --> 00:07:35,640
 Aye.

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 That one carries.

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00:07:36,740 --> 00:07:43,440
 Item B. Good morning, Cassie.

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00:07:43,440 --> 00:07:44,440
 Good morning.

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00:07:44,440 --> 00:07:53,000
 Cassie Ogden, Director of Finance, here to seek your direction on a capital improvement

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00:07:53,000 --> 00:07:56,520
 budget amendment for solid waste.

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00:07:56,520 --> 00:07:59,680
 So just briefly, I have one slide for you.

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00:07:59,680 --> 00:08:05,240
 We're proposing a budget amendment to increase the capital improvement program expenditure

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 by 4.4 million, and this is for the purchase of land for solid waste transfer station.

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00:08:11,520 --> 00:08:15,800
 Brian Boehner is here if you have operational questions, but I'm happy to take any financial

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 questions.

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00:08:16,800 --> 00:08:24,280
 And I do have the next item also in case there are questions about the funding of this item.

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 And we have operational questions for Brian.

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00:08:30,360 --> 00:08:32,560
 All right.

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00:08:32,560 --> 00:08:36,960
 Then do we have a motion to approve item B?

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00:08:36,960 --> 00:08:37,960
 Billy moves approval.

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00:08:37,960 --> 00:08:38,960
 Second?

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00:08:38,960 --> 00:08:39,960
 Ben seconds.

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00:08:39,960 --> 00:08:42,080
 All in favor say aye.

165
00:08:42,080 --> 00:08:43,080
 Aye.

166
00:08:43,080 --> 00:08:44,080
 Motion carries.

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00:08:44,080 --> 00:08:54,120
 Item C. This presentation is a couple slides longer, so just talking about the funding

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 of the land purchase.

169
00:08:56,240 --> 00:09:01,280
 So we are planning on issuing bonds, COs, for that purchase.

170
00:09:01,280 --> 00:09:04,600
 And so this is for a reimbursement ordinance.

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00:09:04,600 --> 00:09:09,720
 We do these typically every October, but we can do them anytime within the year before

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 we sell the bonds.

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00:09:11,360 --> 00:09:15,360
 Basically, it allows us to pay ourselves back once the bonds are issued.

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00:09:15,360 --> 00:09:21,440
 So we'll use fund balance or cash available to make the purchase before the bonds are

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00:09:21,440 --> 00:09:25,720
 issued because we aren't planning on issuing bonds this year until June.

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00:09:25,720 --> 00:09:30,160
 And so this is allowed by our city's debt policy.

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00:09:30,160 --> 00:09:33,920
 And again, this is the purchase that we are planning.

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00:09:33,920 --> 00:09:40,160
 It was a mid-year ad, so it was not included in the original CIP, so $4.4 million for that

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00:09:40,160 --> 00:09:44,400
 transfer station or the purchase of the land for the transfer station.

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00:09:44,400 --> 00:09:49,000
 And then again, next steps, just like every year, this will come back to council a couple

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 of times before the actual COs are issued.

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00:09:52,640 --> 00:09:56,960
 So there's a notice of intent requirement that we have to post on the website and in

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 the paper.

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00:09:57,960 --> 00:10:02,880
 And then there's also a parameters ordinance that will come to PB and council.

185
00:10:02,880 --> 00:10:06,280
 And then the bond sale date will be in July.

186
00:10:06,280 --> 00:10:08,480
 All right.

187
00:10:08,480 --> 00:10:09,480
 Questions?

188
00:10:09,480 --> 00:10:17,200
 Yes, Mr. Beck, go ahead.

189
00:10:17,200 --> 00:10:19,160
 I'm sorry, and I might have missed it.

190
00:10:19,160 --> 00:10:22,600
 Where was this land at for this new station?

191
00:10:22,600 --> 00:10:25,160
 I'll let Brian answer that question.

192
00:10:25,160 --> 00:10:26,160
 Just curious.

193
00:10:26,160 --> 00:10:32,440
 Good morning, Madam Chair, members of the board, Brian Burner, Solid Waste Director

194
00:10:32,440 --> 00:10:33,800
 with City of Denton.

195
00:10:33,800 --> 00:10:42,260
 This property is located on the west side of City of Denton, west of 35, very close

196
00:10:42,260 --> 00:10:44,640
 to where the deck is located right now.

197
00:10:44,640 --> 00:10:48,600
 What we're trying to do is, you know, when we -- last year we would have included this

198
00:10:48,600 --> 00:10:54,560
 in our budget, but with the whole housing crisis and speculative purchasing of land

199
00:10:54,560 --> 00:10:59,320
 and everything getting kind of apy here, we just wanted to make sure that we had some

200
00:10:59,320 --> 00:11:02,980
 property carved out to ensure that we could get through our permitting and everything

201
00:11:02,980 --> 00:11:08,680
 else and be ready in the 10 or so years it's going to take to really get the critical mass

202
00:11:08,680 --> 00:11:11,660
 of businesses and residents in this area.

203
00:11:11,660 --> 00:11:16,360
 So we're looking forward to the construction of loop 288, which will help us in our transportation

204
00:11:16,360 --> 00:11:20,400
 route and getting trucks from this transfer station into the landfill.

205
00:11:20,400 --> 00:11:21,400
 Okay.

206
00:11:21,400 --> 00:11:23,720
 So there's no zoning conflicts that we're going to --

207
00:11:23,720 --> 00:11:24,720
 No.

208
00:11:24,720 --> 00:11:29,000
 We've worked closely not only with the existing code, but also with the current updates to

209
00:11:29,000 --> 00:11:32,280
 the comprehensive plan to ensure that they are commiserate.

210
00:11:32,280 --> 00:11:33,280
 Excellent.

211
00:11:33,280 --> 00:11:34,280
 Thank you.

212
00:11:34,280 --> 00:11:35,280
 Other questions?

213
00:11:35,280 --> 00:11:36,280
 All right.

214
00:11:36,280 --> 00:11:42,080
 Do we have a motion to approve item C?

215
00:11:42,080 --> 00:11:43,080
 Very clear.

216
00:11:43,080 --> 00:11:44,080
 And Ben seconds.

217
00:11:44,080 --> 00:11:46,080
 All in favor say aye.

218
00:11:46,080 --> 00:11:47,080
 Aye.

219
00:11:47,080 --> 00:11:48,080
 Motion carries.

220
00:11:48,080 --> 00:11:49,080
 Management reports.

221
00:11:49,080 --> 00:11:53,280
 What's up, Madam Chair and members of the PUB?

222
00:11:53,280 --> 00:11:58,720
 So it appears that we didn't attach the action item, but the only item that was still on

223
00:11:58,720 --> 00:12:04,120
 there was related to a past PUB member's request, and DME is still working on that.

224
00:12:04,120 --> 00:12:07,720
 We do plan to bring that back to the board.

225
00:12:07,720 --> 00:12:14,180
 And then just to pass on a couple of other items, so starting March 14th, our plan is

226
00:12:14,180 --> 00:12:18,920
 to hold the PUB meetings in the work session room, so we'll be going back there.

227
00:12:18,920 --> 00:12:22,020
 Hopefully that'll help with some of the sound and some of the kind of issues that you've

228
00:12:22,020 --> 00:12:23,020
 had.

229
00:12:23,020 --> 00:12:28,840
 And then as a reminder, I know some of you had problems with the agenda last week.

230
00:12:28,840 --> 00:12:31,480
 There was a number of items included in the management report.

231
00:12:31,480 --> 00:12:35,780
 If you have any questions about those, please email them to me or to Kim, and we'll get

232
00:12:35,780 --> 00:12:38,160
 answers to you if we need to set up a meeting with staff.

233
00:12:38,160 --> 00:12:41,040
 We're happy to do that as well.

234
00:12:41,040 --> 00:12:44,080
 The next item is just budget items in general.

235
00:12:44,080 --> 00:12:47,560
 We'll report that back to you at the next meeting, but the budget office has a calendar

236
00:12:47,560 --> 00:12:50,040
 already so that you can start making plans to be here.

237
00:12:50,040 --> 00:12:53,320
 We want to make sure that you don't miss out on any of those budget presentations that

238
00:12:53,320 --> 00:12:56,880
 will be coming up here before too long.

239
00:12:56,880 --> 00:13:01,560
 And then finally, just because I had a question this morning, City Council did select Sarah

240
00:13:01,560 --> 00:13:07,160
 Hensley as our permanent city manager, and they'll be taking up that contract consideration

241
00:13:07,160 --> 00:13:11,320
 I think tomorrow, but I did want to pass that along to you, and we certainly look forward

242
00:13:11,320 --> 00:13:16,800
 to working with Sarah, and she's always available to you if you have any questions.

243
00:13:16,800 --> 00:13:21,000
 So happy to answer any questions that you have, but that's really the management report.

244
00:13:21,000 --> 00:13:22,000
 Questions?

245
00:13:22,000 --> 00:13:23,000
 Nope.

246
00:13:23,000 --> 00:13:24,000
 All right.

247
00:13:24,000 --> 00:13:25,000
 Thank you.

248
00:13:25,000 --> 00:13:26,000
 All right.

249
00:13:26,000 --> 00:13:29,920
 Any other board member wish to have a item placed on a future agenda or have any comments

250
00:13:29,920 --> 00:13:32,920
 to make to the public?

251
00:13:32,920 --> 00:13:33,920
 Seeing none.

252
00:13:33,920 --> 00:13:34,920
 All right.

253
00:13:34,920 --> 00:13:35,920
 We're into the work session.

254
00:13:35,920 --> 00:13:40,560
 Receive a report, hold discussion, and give staff direction regarding the audit.

255
00:13:40,560 --> 00:13:44,400
 Project 025, Energy Portfolio Management.

256
00:13:44,400 --> 00:13:45,720
 Good morning, Madison.

257
00:13:45,720 --> 00:13:47,360
 Good morning.

258
00:13:47,360 --> 00:13:51,760
 I don't know how to get my presentation on here, Tony.

259
00:13:51,760 --> 00:13:56,320
 Thank you, Cassie.

260
00:13:56,320 --> 00:14:01,240
 Thank you, Cassie.

261
00:14:01,240 --> 00:14:03,600
 Great.

262
00:14:03,600 --> 00:14:08,080
 All right.

263
00:14:08,080 --> 00:14:12,000
 Hello, PUB.

264
00:14:12,000 --> 00:14:13,000
 I'm Madison Rorschach.

265
00:14:13,000 --> 00:14:17,040
 I'm Denton City Auditor, and I'm just here to present our findings from our audit of

266
00:14:17,040 --> 00:14:22,080
 the City's Energy Portfolio Transaction Administration.

267
00:14:22,080 --> 00:14:28,280
 So this report details our findings from the first phase of this project, and phase two

268
00:14:28,280 --> 00:14:34,440
 will cover the Renewable Denton Plan reporting, and it should be released next month.

269
00:14:34,440 --> 00:14:44,660
 So this audit generally evaluated compliance with the City's Energy Portfolio Transaction

270
00:14:44,660 --> 00:14:51,640
 Administration policies, including the energy risk management policy and the hedge plan.

271
00:14:51,640 --> 00:14:57,920
 So annually, the City spends about $95 million in wholesale power costs, and these policies

272
00:14:57,920 --> 00:15:03,700
 have been implemented to manage the risk associated with meeting the City's instantaneous electric

273
00:15:03,700 --> 00:15:06,040
 demand through its energy portfolio.

274
00:15:06,040 --> 00:15:12,720
 In order to meet this demand, DME's energy management organization must execute transactions,

275
00:15:12,720 --> 00:15:17,600
 including hedges, to ensure energy put on the ERCOT grid by generators is available

276
00:15:17,600 --> 00:15:21,280
 to be taken off the grid by DME to serve its customers.

277
00:15:21,280 --> 00:15:26,620
 It's important to make clear that once energy is put on the grid, it's not physically possible

278
00:15:26,620 --> 00:15:31,200
 to keep track of each unique megawatt hour generated.

279
00:15:31,200 --> 00:15:36,080
 So instead, ERCOT uses metering and a system of accounting to track and financially settle

280
00:15:36,080 --> 00:15:39,320
 the trade and use of electricity.

281
00:15:39,320 --> 00:15:44,400
 So I'll begin by just discussing the different types of energy portfolio transactions and

282
00:15:44,400 --> 00:15:48,240
 if these were executed in compliance with the City's policies.

283
00:15:48,240 --> 00:15:52,960
 So in general, we reviewed three different types of energy portfolio transactions as

284
00:15:52,960 --> 00:15:58,840
 part of the audit, including physical and financial trades, power purchase agreements,

285
00:15:58,840 --> 00:16:00,640
 and congestion revenue rights.

286
00:16:00,640 --> 00:16:06,400
 In general, the front office is responsible for identifying a transaction to execute,

287
00:16:06,400 --> 00:16:10,120
 including monitoring the electricity market to identify appropriate physical and financial

288
00:16:10,120 --> 00:16:16,080
 hedges, soliciting and evaluating generators to contract with for power purchase agreements,

289
00:16:16,080 --> 00:16:20,120
 and bidding as part of ERCOT's congestion revenue rights auctions.

290
00:16:20,120 --> 00:16:23,960
 The middle office is then responsible for ensuring these transactions align with relevant

291
00:16:23,960 --> 00:16:29,080
 energy portfolio management policies, such as verifying that physical and financial hedges

292
00:16:29,080 --> 00:16:34,520
 were executed with the proper authority, executing agreements with other market participants,

293
00:16:34,520 --> 00:16:37,000
 and monitoring contract compliance.

294
00:16:37,000 --> 00:16:41,960
 The back office is then responsible for processing received invoices and billing other market

295
00:16:41,960 --> 00:16:45,000
 participants for executed transactions.

296
00:16:45,000 --> 00:16:49,080
 The back office also communicates these transaction settlement activities to the City's Treasury

297
00:16:49,080 --> 00:16:53,920
 and accounting divisions as needed to ensure that the transactions are recorded in the

298
00:16:53,920 --> 00:16:57,200
 City's financial records.

299
00:16:57,200 --> 00:17:02,520
 These duties and internal controls, including the effectively designed separation of duties

300
00:17:02,520 --> 00:17:05,960
 and the creation of the risk management committee's governance activities, are generally laid

301
00:17:05,960 --> 00:17:11,240
 out effectively in the City's energy risk management policy and hedge plan.

302
00:17:11,240 --> 00:17:17,100
 And so the results of our review of each of these transaction types are summarized next.

303
00:17:17,100 --> 00:17:21,760
 So beginning with physical and financial trades, we found that all 40 reviewed trades were

304
00:17:21,760 --> 00:17:26,560
 generally executed, settled, and recorded appropriately in the City's financial records.

305
00:17:26,560 --> 00:17:32,480
 However, there was no formal process for front office staff to approve trade transaction

306
00:17:32,480 --> 00:17:35,780
 transactions after execution to ensure that they were appropriate.

307
00:17:35,780 --> 00:17:40,840
 In addition, we found that the middle office did not have a process to verify that trade

308
00:17:40,840 --> 00:17:46,680
 transactions were made by authorized employees based on the transaction authority limits

309
00:17:46,680 --> 00:17:49,940
 set in the energy risk management policy.

310
00:17:49,940 --> 00:17:54,680
 In addition, the middle office has established procedures for evaluating and monitoring the

311
00:17:54,680 --> 00:17:57,200
 financial health of trading counterparties.

312
00:17:57,200 --> 00:18:01,800
 However, documentation of these periodic evaluations were not maintained, so we couldn't verify

313
00:18:01,800 --> 00:18:04,560
 the adequacy.

314
00:18:04,560 --> 00:18:07,840
 For power purchase agreements, we found that the City was complying with state procurement

315
00:18:07,840 --> 00:18:11,800
 regulations when going through the solicitation process.

316
00:18:11,800 --> 00:18:17,000
 That being said, we found that for 10 of 46 reviewed agreement payments, the quantity

317
00:18:17,000 --> 00:18:22,880
 delivered could not be verified based on the documentation provided by back office staff.

318
00:18:22,880 --> 00:18:28,600
 In addition, we found that payments made for megawatt hours curtailed, which means that

319
00:18:28,600 --> 00:18:34,040
 those megawatt hours that are not generated, but they could have been generated by the

320
00:18:34,040 --> 00:18:39,280
 provider, they were curtailed by the City's direction, were very difficult to verify because

321
00:18:39,280 --> 00:18:45,700
 there's not a physical commodity being delivered, and additionally, quantities can only be reviewed

322
00:18:45,700 --> 00:18:50,700
 in 15-minute increments while curtailment decisions are made instantaneously, basically, based

323
00:18:50,700 --> 00:18:53,120
 on market price.

324
00:18:53,120 --> 00:18:57,640
 And then finally, for congestion revenue rights, awarded CRRs are automatically recorded in

325
00:18:57,640 --> 00:19:03,620
 the City's Energy Trading and Risk Management System, or ETRM, and transactions are settled

326
00:19:03,620 --> 00:19:08,240
 by ERCOT automatically in the City's CRR account with ERCOT.

327
00:19:08,240 --> 00:19:13,320
 The back office has a process to monitor the City's CRR account and has established informal

328
00:19:13,320 --> 00:19:21,240
 thresholds at which account replenishment payments are initiated.

329
00:19:21,240 --> 00:19:25,360
 Also as part of our review, we noticed several administrative issues.

330
00:19:25,360 --> 00:19:31,880
 In particular, we found that data stored in the ETRM system was not regularly reviewed,

331
00:19:31,880 --> 00:19:34,800
 which resulted in some data inconsistencies.

332
00:19:34,800 --> 00:19:38,760
 In particular, as I noted, we found that there were some CRRs awarded to the City that were

333
00:19:38,760 --> 00:19:42,740
 not automatically recorded, but this issue has been fixed.

334
00:19:42,740 --> 00:19:47,760
 In addition, we found that while the ETRM system included data on energy generated from

335
00:19:47,760 --> 00:19:52,580
 the City's Power Purchase Agreements, this data was not used to verify megawatt hour

336
00:19:52,580 --> 00:19:58,080
 quantities billed, instead the back office uses ERCOT settlement data, however, there

337
00:19:58,080 --> 00:20:04,600
 were inconsistencies between the ERCOT settlement data and what was in the ETRM system.

338
00:20:04,600 --> 00:20:09,280
 In addition, we found that while the middle office has developed and implemented standard

339
00:20:09,280 --> 00:20:15,840
 operating procedures, they had not been updated since 2017 and did not match current practices.

340
00:20:15,840 --> 00:20:21,160
 Furthermore, the middle office has been charged with administering access to the ETRM system,

341
00:20:21,160 --> 00:20:27,200
 but no criteria or procedures had been developed outlining how that access should be granted,

342
00:20:27,200 --> 00:20:28,200
 modified or revoked.

343
00:20:28,200 --> 00:20:32,840
 In addition, we found that the back office did not have any standard operating procedures

344
00:20:32,840 --> 00:20:35,140
 for settlement activities.

345
00:20:35,140 --> 00:20:39,600
 We also found that the back office settlement activities were primarily performed by a single

346
00:20:39,600 --> 00:20:45,040
 individual and the uniqueness and complexity of these settlement activities, along with

347
00:20:45,040 --> 00:20:50,200
 the lack of standard operating procedures, further increases the risk that the City would

348
00:20:50,200 --> 00:20:54,440
 be unable to adequately settle its energy portfolio transactions if that key role was

349
00:20:54,440 --> 00:20:56,600
 vacated.

350
00:20:56,600 --> 00:21:03,360
 So in summary, we issued a total of 12 recommendations to DME, all of which were concurred with,

351
00:21:03,360 --> 00:21:06,480
 and so based on this response, we believe the identified risks will be appropriately

352
00:21:06,480 --> 00:21:12,440
 addressed, but we plan to conduct a follow-up review in 18 to 36 months, which is just our

353
00:21:12,440 --> 00:21:14,720
 standard practice.

354
00:21:14,720 --> 00:21:17,120
 So there you go, whoops.

355
00:21:17,120 --> 00:21:19,080
 All right, questions?

356
00:21:19,080 --> 00:21:20,080
 I can pull this down.

357
00:21:20,080 --> 00:21:25,080
 Yeah, well, maybe pull the slide 6 up, leave that one up.

358
00:21:25,080 --> 00:21:26,080
 This one?

359
00:21:26,080 --> 00:21:27,080
 Yeah, thank you.

360
00:21:27,080 --> 00:21:28,080
 That's not the right slide.

361
00:21:28,080 --> 00:21:29,080
 Sorry about that.

362
00:21:29,080 --> 00:21:30,080
 There you go.

363
00:21:30,080 --> 00:21:31,080
 Thank you.

364
00:21:31,080 --> 00:21:32,080
 Any questions?

365
00:21:32,080 --> 00:21:33,080
 Yes, go ahead.

366
00:21:33,080 --> 00:21:36,080
 Thank you, Madison, for your report.

367
00:21:36,080 --> 00:21:41,680
 I kind of empathize with you being the messenger of quasi-news.

368
00:21:41,680 --> 00:21:50,680
 These lapses, though, do they seem to be more of an issue with training and staff, or are

369
00:21:50,680 --> 00:21:54,320
 there technological problems with the system that are created?

370
00:21:54,320 --> 00:21:56,520
 Oh, the data inconsistencies?

371
00:21:56,520 --> 00:21:58,160
 Yeah.

372
00:21:58,160 --> 00:22:04,840
 I think it's more of just technological issues, but I don't know if Terry would like to speak

373
00:22:04,840 --> 00:22:07,720
 to that if he's here.

374
00:22:07,720 --> 00:22:13,960
 It was indicated that there wasn't enough staff, too, and that was probably an oversight

375
00:22:13,960 --> 00:22:22,160
 from just, what, COVID maybe going on, that there was some other factors that contributed

376
00:22:22,160 --> 00:22:23,160
 to it?

377
00:22:23,160 --> 00:22:29,720
 Yeah, I think there might be a lack of staffing issues, especially at the back office.

378
00:22:29,720 --> 00:22:33,040
 Like we mentioned, there's just, and it's a key role, right?

379
00:22:33,040 --> 00:22:38,240
 So if nobody's there to take that place, then we don't know, how do we get those activities

380
00:22:38,240 --> 00:22:39,240
 done?

381
00:22:39,240 --> 00:22:42,800
 And if I read about it, you're going to take the next 18 months or so to?

382
00:22:42,800 --> 00:22:46,840
 Yeah, I believe they said that they would have everything in this report complete by

383
00:22:46,840 --> 00:22:50,000
 September 30th, 2023.

384
00:22:50,000 --> 00:22:52,880
 So we'll come back after that date and have a follow-up review.

385
00:22:52,880 --> 00:22:53,880
 Okay.

386
00:22:53,880 --> 00:22:59,680
 And again, one last one, and I know you probably can't answer it, but if we've lost the money

387
00:22:59,680 --> 00:23:03,240
 as a result of this, is there going to be any way to recoup it, or are we just...

388
00:23:03,240 --> 00:23:05,840
 Sorry, I say that again.

389
00:23:05,840 --> 00:23:10,240
 As a result of these lapses, if the city's lost money of this, is there any way to recoup

390
00:23:10,240 --> 00:23:12,240
 that, or are we just dialed up?

391
00:23:12,240 --> 00:23:14,080
 It is what it is.

392
00:23:14,080 --> 00:23:18,640
 Yeah, we didn't really find any losses, per se, just that the data was inconsistent between

393
00:23:18,640 --> 00:23:23,400
 what ERCOT was using and the ETRM system.

394
00:23:23,400 --> 00:23:27,160
 We did look at the PPA payments, and there were some discrepancies there with what we

395
00:23:27,160 --> 00:23:30,320
 could verify, megawatt hours.

396
00:23:30,320 --> 00:23:35,360
 But what we actually found was that the city had not lost money, but had maybe not paid

397
00:23:35,360 --> 00:23:39,880
 as much as it seemed like was verified, so it didn't seem like there were any negative

398
00:23:39,880 --> 00:23:40,880
 effects financially.

399
00:23:40,880 --> 00:23:41,880
 Okay.

400
00:23:41,880 --> 00:23:42,880
 Well, kudos to you.

401
00:23:42,880 --> 00:23:45,720
 I don't envy your job, so good luck.

402
00:23:45,720 --> 00:23:49,600
 Yeah, Mr. Beck, I'll just echo what Madison said.

403
00:23:49,600 --> 00:23:55,340
 I think in her report, she was clear that it appears that we may have underpaid or maybe

404
00:23:55,340 --> 00:23:57,440
 owing someone $80,000.

405
00:23:57,440 --> 00:24:00,840
 I can tell you, nobody's knocking on my door asking for that money.

406
00:24:00,840 --> 00:24:06,520
 But I think as, certainly I've incurred with all her recommendations, we're gonna be taking

407
00:24:06,520 --> 00:24:11,280
 a look at not just the technical side of some of these transactions, but also the staffing

408
00:24:11,280 --> 00:24:12,280
 side as well.

409
00:24:12,280 --> 00:24:15,480
 And certainly we'll be bringing that back to you in the budget process if, in fact,

410
00:24:15,480 --> 00:24:17,760
 we feel that we need to shore up some of those resources.

411
00:24:17,760 --> 00:24:23,320
 But I can assure you, if we are owed money, we will do everything we can to go collect

412
00:24:23,320 --> 00:24:24,320
 that money.

413
00:24:24,320 --> 00:24:27,760
 And I'm not as enthusiastic about having to pay money, but that's just the way it's...

414
00:24:27,760 --> 00:24:29,480
 If they're not knocking at our door.

415
00:24:29,480 --> 00:24:30,480
 Yeah.

416
00:24:30,480 --> 00:24:31,480
 Okay.

417
00:24:31,480 --> 00:24:32,480
 Thanks, Tony.

418
00:24:32,480 --> 00:24:33,480
 Appreciate it.

419
00:24:33,480 --> 00:24:34,480
 So I wanna be clear.

420
00:24:34,480 --> 00:24:36,640
 We did not lose any money.

421
00:24:36,640 --> 00:24:39,840
 You did not find anything that says we didn't get the money.

422
00:24:39,840 --> 00:24:43,920
 I think there were a couple transactions where it looked like maybe we had lost a very slight

423
00:24:43,920 --> 00:24:44,920
 amount of money.

424
00:24:44,920 --> 00:24:45,920
 Yeah.

425
00:24:45,920 --> 00:24:47,920
 Like maybe a couple thousand dollars.

426
00:24:47,920 --> 00:24:48,920
 Yeah.

427
00:24:48,920 --> 00:24:53,040
 95 million, very complex system, a couple thousand dollars.

428
00:24:53,040 --> 00:24:54,040
 Yeah.

429
00:24:54,040 --> 00:24:55,040
 In material.

430
00:24:55,040 --> 00:24:56,040
 In material.

431
00:24:56,040 --> 00:24:57,040
 Things happen.

432
00:24:57,040 --> 00:24:58,040
 Yes, go ahead.

433
00:24:58,040 --> 00:25:00,240
 Thank you, Madam Chair.

434
00:25:00,240 --> 00:25:06,840
 So I commend your auditing ability that you can look at a system as complex as this and

435
00:25:06,840 --> 00:25:07,840
 come down to 12.

436
00:25:07,840 --> 00:25:09,240
 Took us a while.

437
00:25:09,240 --> 00:25:10,240
 Yeah.

438
00:25:10,240 --> 00:25:11,240
 Yeah.

439
00:25:11,240 --> 00:25:19,800
 And DME, I know DME has its challenges in the complexity of multiple PPAs, then additionally

440
00:25:19,800 --> 00:25:28,040
 hedging, a lot of systems, a lot of electric systems use their own generation and ERCOT.

441
00:25:28,040 --> 00:25:29,040
 That's it.

442
00:25:29,040 --> 00:25:31,520
 They have, or everything is settled through ERCOT.

443
00:25:31,520 --> 00:25:32,520
 Makes it much simpler.

444
00:25:32,520 --> 00:25:35,560
 You just verify the ERCOT settlement.

445
00:25:35,560 --> 00:25:39,080
 We're settling against multiple PPA counterparties.

446
00:25:39,080 --> 00:25:42,760
 We also have the hedging, also have the forward purchasing.

447
00:25:42,760 --> 00:25:51,480
 We're probably not quite big enough to, we're in the double bind of we don't have the staff

448
00:25:51,480 --> 00:25:57,320
 where we're, because we're buying gigawatts, to have lots of redundancy and we have pressure

449
00:25:57,320 --> 00:25:59,160
 to keep our staff costs low.

450
00:25:59,160 --> 00:26:04,480
 So we don't want to have, you know, if you can be done in less than 40 hours, that's

451
00:26:04,480 --> 00:26:06,000
 one person.

452
00:26:06,000 --> 00:26:13,320
 And then we have, and it's an expert salary probably, so hiring two experts maybe at 20

453
00:26:13,320 --> 00:26:17,480
 hours of work, you know, that's a budgeting question, right?

454
00:26:17,480 --> 00:26:23,640
 But then we also need those controls and that redundancy in case of unexpected staff changes

455
00:26:23,640 --> 00:26:26,280
 or, and control from a control aspect.

456
00:26:26,280 --> 00:26:34,120
 So looking at this, I think this is, it's really great to see the audit and I think the

457
00:26:34,120 --> 00:26:41,760
 results of it are, if anything, show just the challenges that DME faces in executing,

458
00:26:41,760 --> 00:26:44,480
 you know, our 100% renewable plan.

459
00:26:44,480 --> 00:26:48,200
 And so I think, I think it's, I don't think there's anything to be faulted here.

460
00:26:48,200 --> 00:26:54,200
 As far as data, I was, I'm fascinated by, I'm very familiar with, it doesn't quite

461
00:26:54,200 --> 00:26:56,600
 match ERCOT settlement.

462
00:26:56,600 --> 00:27:02,120
 In my job role, I see that a lot and, you know, I think there's, at some point it's

463
00:27:02,120 --> 00:27:09,560
 going to be what is the expected rate of error, you know, and, you know, data, the best way

464
00:27:09,560 --> 00:27:16,800
 to fix data issues, just on my soapbox, is to utilize the data day in and day out.

465
00:27:16,800 --> 00:27:22,120
 Like, it becomes a performance report to see how far different we are from ERCOT and whether

466
00:27:22,120 --> 00:27:25,400
 we think it's ERCOT's fault or ours.

467
00:27:25,400 --> 00:27:28,240
 But I mean, I don't know if that actually applies in this situation.

468
00:27:28,240 --> 00:27:34,160
 So I just wanted to say this is, it's really great to see an audit of this detail with,

469
00:27:34,160 --> 00:27:39,120
 I think, pretty strong findings and as complex as our system is, it's going to be challenging

470
00:27:39,120 --> 00:27:45,760
 to have controls on every aspect of it, fully overlapping controls, so, but I'm glad we're,

471
00:27:45,760 --> 00:27:52,800
 we want to move toward that while balancing, you know, overhead and staff hours and so

472
00:27:52,800 --> 00:27:53,800
 forth.

473
00:27:53,800 --> 00:27:54,800
 Thank you.

474
00:27:54,800 --> 00:28:02,800
 So we went the right amount of controls, but not so many that it exceeds, the cost exceeds

475
00:28:02,800 --> 00:28:06,440
 the cost of the, you know, but you know that.

476
00:28:06,440 --> 00:28:07,440
 Yes.

477
00:28:07,440 --> 00:28:08,440
 Other questions?

478
00:28:08,440 --> 00:28:09,440
 All right.

479
00:28:09,440 --> 00:28:13,440
 And what is the action on this?

480
00:28:13,440 --> 00:28:14,440
 Just.

481
00:28:14,440 --> 00:28:17,280
 I think, we don't usually take action.

482
00:28:17,280 --> 00:28:18,880
 Oh, just direction.

483
00:28:18,880 --> 00:28:19,880
 Yeah.

484
00:28:19,880 --> 00:28:20,880
 Okay.

485
00:28:20,880 --> 00:28:21,880
 Yeah.

486
00:28:21,880 --> 00:28:24,680
 Well, we're planning to go to the city council tomorrow with this exact same presentation.

487
00:28:24,680 --> 00:28:25,680
 Okay.

488
00:28:25,680 --> 00:28:26,800
 Good enough.

489
00:28:26,800 --> 00:28:27,800
 That is the direction.

490
00:28:27,800 --> 00:28:28,800
 Awesome.

491
00:28:28,800 --> 00:28:30,480
 Thank you so much.

492
00:28:30,480 --> 00:28:33,640
 Thank you.

493
00:28:33,640 --> 00:28:38,820
 And the next item is receive a report and hold a discussion and give staff direction

494
00:28:38,820 --> 00:28:44,520
 regarding the options related to the creation and setting of metrics and goals related to

495
00:28:44,520 --> 00:28:47,480
 the development of the comprehensive solid waste plan.

496
00:28:47,480 --> 00:28:49,960
 What we've all been waiting for.

497
00:28:49,960 --> 00:28:51,520
 Exactly.

498
00:28:51,520 --> 00:28:57,400
 We have an exciting opportunity here and I appreciate the opportunity to stand before

499
00:28:57,400 --> 00:28:58,840
 you and help lead this discussion.

500
00:28:58,840 --> 00:29:00,080
 Again, I'm Brian burner.

501
00:29:00,080 --> 00:29:02,960
 I am the solid waste director for the city of Denton.

502
00:29:02,960 --> 00:29:09,400
 And again, this has been a long road to travel, but again, it's been an important one.

503
00:29:09,400 --> 00:29:13,600
 City of Denton has been working over a year now on the development of a comprehensive

504
00:29:13,600 --> 00:29:15,160
 solid waste management strategy.

505
00:29:15,160 --> 00:29:21,760
 And so we can see the finish line up just ahead where we've looked at different programs

506
00:29:21,760 --> 00:29:29,040
 across the nation, current, local, state, federal and global issues that stand in our

507
00:29:29,040 --> 00:29:33,320
 way to potentially doing some really good work here and tried to set some realistic

508
00:29:33,320 --> 00:29:37,240
 goals and metrics that will help define what our system will be, not only for the next

509
00:29:37,240 --> 00:29:41,480
 20 years, but over the next 40 years and springboard into the next 60 years.

510
00:29:41,480 --> 00:29:46,600
 And long after I'm gone, we will have a very comprehensive plan that will help promote

511
00:29:46,600 --> 00:29:51,440
 diversion across the city limits or the city of Denton and most importantly, the North

512
00:29:51,440 --> 00:29:52,440
 Texas region.

513
00:29:52,440 --> 00:29:57,080
 So really what I want to talk about today is just give you a quick status update on

514
00:29:57,080 --> 00:30:03,360
 the strategy, review those metrics with the underlying goal that they have to be transparent.

515
00:30:03,360 --> 00:30:07,480
 That's one of the big things that when looking at other plans across the nation, they aren't

516
00:30:07,480 --> 00:30:08,480
 transparent.

517
00:30:08,480 --> 00:30:09,480
 They're very confusing.

518
00:30:09,480 --> 00:30:13,400
 And as such, you know, if we want people to be involved, they've got to know what's happening

519
00:30:13,400 --> 00:30:14,640
 and what it's costing them.

520
00:30:14,640 --> 00:30:16,440
 So transparency is going to be key.

521
00:30:16,440 --> 00:30:21,800
 And secondarily, it needs to be representative of the city of Denton's efforts.

522
00:30:21,800 --> 00:30:26,440
 We're not San Francisco, we are not Seattle, Washington, we are not King County, you know,

523
00:30:26,440 --> 00:30:27,440
 we are the city of Denton.

524
00:30:27,440 --> 00:30:32,280
 And granted, there's some commonalities in what we're talking about from a solid waste

525
00:30:32,280 --> 00:30:33,720
 and trash management standpoint.

526
00:30:33,720 --> 00:30:38,960
 But again, there's some unique things that allow us, I think, some opportunities to grow.

527
00:30:38,960 --> 00:30:46,520
 We're in the second to third fastest growing urban area in America.

528
00:30:46,520 --> 00:30:51,840
 And over the next 20 years, I think that their growth is going to be phenomenal.

529
00:30:51,840 --> 00:30:56,200
 And as such, we have to position ourselves to be able to manage not only that, we are

530
00:30:56,200 --> 00:31:00,560
 the regional provider of solid waste management services, or at least disposal capacity in

531
00:31:00,560 --> 00:31:09,560
 North Texas, and what we want to try to do is to maintain that diversion that we have

532
00:31:09,560 --> 00:31:14,000
 and really be the driver of what's happening in the North Texas area.

533
00:31:14,000 --> 00:31:18,160
 Taking a quick step back, just really talking about metrics and goals, when we talk about

534
00:31:18,160 --> 00:31:22,120
 metrics and goals, metrics are those sort of stepping stone things, those little bitty

535
00:31:22,120 --> 00:31:29,440
 things that we put into place to help us in the not only development, but also reaching

536
00:31:29,440 --> 00:31:30,600
 these short-term goals.

537
00:31:30,600 --> 00:31:35,200
 So looking at things from a daily, weekly, annual basis that we can wrap up into some

538
00:31:35,200 --> 00:31:39,880
 long-term goals, things that are a little bit more on the future.

539
00:31:39,880 --> 00:31:42,320
 You can sort of stand up and see on the horizon.

540
00:31:42,320 --> 00:31:45,120
 And then we have lifetime goals, which you may have to get to the top of the building

541
00:31:45,120 --> 00:31:50,000
 to look way out, but again, we're setting two sets of goals, and we're setting them

542
00:31:50,000 --> 00:31:52,200
 really as floors, not ceilings.

543
00:31:52,200 --> 00:31:54,360
 It's what we want to do to reach as a minimum.

544
00:31:54,360 --> 00:32:00,000
 If we exceed these things, great, it puts us well on the path to exceed what we're

545
00:32:00,000 --> 00:32:01,000
 doing.

546
00:32:01,000 --> 00:32:06,880
 But again, it gives us something that's not only attainable, but realistic and measurable.

547
00:32:06,880 --> 00:32:13,040
 So when we're looking at the metrics that are going to drive our diversion goals, there

548
00:32:13,040 --> 00:32:16,560
 are eight things that we're actually looking at here.

549
00:32:16,560 --> 00:32:21,900
 First and foremost, we want to talk about the waste generation rate, and that's really

550
00:32:21,900 --> 00:32:25,880
 the amount of garbage that every man, woman, and child in the city of Denton, and possibly

551
00:32:25,880 --> 00:32:29,200
 the North Texas region, produces on a daily basis.

552
00:32:29,200 --> 00:32:31,920
 What we want to be able to do is drive that number down.

553
00:32:31,920 --> 00:32:35,680
 It's kind of interesting, when we first started looking at different programs across the nation

554
00:32:35,680 --> 00:32:39,000
 and what they're doing, you know, the city of San Francisco had a fairly aggressive diversion

555
00:32:39,000 --> 00:32:41,400
 goal and a zero waste plan.

556
00:32:41,400 --> 00:32:47,240
 Well here recently, they've actually eliminated that goal.

557
00:32:47,240 --> 00:32:51,880
 They've gone specifically to one goal, and that's waste generation rate.

558
00:32:51,880 --> 00:32:53,600
 We're trying to drive that down as low as possible.

559
00:32:53,600 --> 00:32:57,200
 They're not looking at recycling, they're not looking at diversion, they're specifically

560
00:32:57,200 --> 00:32:59,200
 looking at generation.

561
00:32:59,200 --> 00:33:03,240
 And to that fact, they're putting in different plans and programs, and I think that's important.

562
00:33:03,240 --> 00:33:06,240
 And so that's an important metric for us to be looking at here.

563
00:33:06,240 --> 00:33:13,120
 Similarly, we want to be able to look at increasing the rate that we're recycling material at

564
00:33:13,120 --> 00:33:15,040
 the residential and commercial level.

565
00:33:15,040 --> 00:33:20,640
 We are the sole provider for these two services, at least from a programmatic standpoint.

566
00:33:20,640 --> 00:33:23,880
 There are a lot of things out there that are recyclable that you can't put in your blue

567
00:33:23,880 --> 00:33:24,880
 bin.

568
00:33:24,880 --> 00:33:27,400
 What we're talking about here is what's in your blue bin, what we as a city are able

569
00:33:27,400 --> 00:33:28,400
 to manage internally.

570
00:33:28,400 --> 00:33:33,360
 Ideally, what we'd also like to do as a caveat to this is manage those things that may not

571
00:33:33,360 --> 00:33:38,560
 be your, you know, one through seven plastics, that may not be your tin cans, your aluminum

572
00:33:38,560 --> 00:33:41,720
 cans, or your glass, and be able to report that material also.

573
00:33:41,720 --> 00:33:47,680
 We have some wonderful partners, you know, Tetra Pak, Peterbilt, other large corporations

574
00:33:47,680 --> 00:33:51,920
 here in the city of Denton that have extremely robust recycling facilities.

575
00:33:51,920 --> 00:33:58,040
 But again, they're not manufacturing or utilizing water bottles.

576
00:33:58,040 --> 00:34:01,400
 They're not, you know, they're not emptying soup out of a can, you know, they're building

577
00:34:01,400 --> 00:34:06,200
 trucks, they're making labels, and as such, you know, those two pieces don't align.

578
00:34:06,200 --> 00:34:10,760
 So not only do we have to focus on what we as a city can manage from a programmatic standpoint,

579
00:34:10,760 --> 00:34:17,600
 but what everybody else is doing and drive those two pieces together to help better communicate

580
00:34:17,600 --> 00:34:20,520
 what's happening from a recycling standpoint.

581
00:34:20,520 --> 00:34:25,260
 Consistently, also, what we want to do is drive down the contamination rate.

582
00:34:25,260 --> 00:34:32,080
 We have been doing phenomenally over the past two years in light of COVID, the global markets,

583
00:34:32,080 --> 00:34:39,280
 the Asian sword, which basically cut off, you know, all the markets in the Asian market

584
00:34:39,280 --> 00:34:46,240
 for us to be able to send material to, and currently we realize that, you know, our current

585
00:34:46,240 --> 00:34:48,960
 contamination rate is 61%.

586
00:34:48,960 --> 00:34:52,560
 It's hoarded, but again, it's better than it was a year and a half ago when it was almost

587
00:34:52,560 --> 00:34:53,560
 80%.

588
00:34:53,560 --> 00:34:58,760
 You know, and the thing to remember, keep in mind, is if this had been three years ago,

589
00:34:58,760 --> 00:35:02,440
 our contamination rate, we would not have to change anything as to what we're doing,

590
00:35:02,440 --> 00:35:06,240
 but our contamination rate would have probably been down to about 25%.

591
00:35:06,240 --> 00:35:09,280
 And it's all, you know, the quality of the material.

592
00:35:09,280 --> 00:35:14,040
 Because the market is so much smaller here in North America, the material that would

593
00:35:14,040 --> 00:35:20,000
 have normally been taken and utilized now is considered coal and contamination, and

594
00:35:20,000 --> 00:35:21,200
 we have to manage it as such.

595
00:35:21,200 --> 00:35:29,640
 So again, what we're hoping to do is put in programs to increase quality, decrease contamination.

596
00:35:29,640 --> 00:35:34,640
 The next goal that we want to be able to report, a metric we want to be able to report on our

597
00:35:34,640 --> 00:35:37,400
 drive to diversion is the capture rate.

598
00:35:37,400 --> 00:35:46,000
 How much material is in the, or are we able to capture curbside to be able to divert as

599
00:35:46,000 --> 00:35:52,640
 opposed to what's going in the landfill, both residentially and from the commercial sector.

600
00:35:52,640 --> 00:35:53,900
 Bottom line, landfill life.

601
00:35:53,900 --> 00:35:55,080
 That's what this all comes down to.

602
00:35:55,080 --> 00:35:59,820
 We want to be able to extend the life of our landfill as long as we possibly can.

603
00:35:59,820 --> 00:36:02,000
 This is a tremendous resource.

604
00:36:02,000 --> 00:36:06,240
 It's being utilized as a regional facility as it has been since the day it opened.

605
00:36:06,240 --> 00:36:10,920
 And we want to be able to continue that, but again, make the life as long as possible.

606
00:36:10,920 --> 00:36:12,300
 And then again, organics diversion.

607
00:36:12,300 --> 00:36:16,040
 This is probably the low-hanging fruit in this entire argument is to be able not only

608
00:36:16,040 --> 00:36:20,640
 to manage yard waste, but look at food waste diversion and other organic materials that

609
00:36:20,640 --> 00:36:26,560
 are out there for us to be able to increase as we move forward.

610
00:36:26,560 --> 00:36:30,840
 One of the really exciting things that happened back in November, there was finally, EPA finally

611
00:36:30,840 --> 00:36:34,880
 set a national solid waste reduction goal.

612
00:36:34,880 --> 00:36:40,360
 But as part of this report, EPA announced that they wanted to increase the U.S. recycling

613
00:36:40,360 --> 00:36:42,440
 rate to 50 percent by 2030.

614
00:36:42,440 --> 00:36:49,200
 So again, in the next 10 years or eight years, drive up that material or that diversion rate

615
00:36:49,200 --> 00:36:51,000
 or recycle rate, excuse me, to 2030.

616
00:36:51,000 --> 00:36:55,000
 And we're talking about what they're looking at specifically, again, it's those programmatic

617
00:36:55,000 --> 00:37:00,400
 materials, that easy stuff that we can capture, plastics, paper, cans, containers and glass.

618
00:37:00,400 --> 00:37:02,520
 Yes, sir.

619
00:37:02,520 --> 00:37:08,680
 So the recycle rate, does that mean the 50 percent, does that mean 50 percent of all

620
00:37:08,680 --> 00:37:13,280
 recyclable materials are then recycled or 50 percent of waste is recycled?

621
00:37:13,280 --> 00:37:17,140
 Fifty percent of those materials that are able to be recycled programmatically.

622
00:37:17,140 --> 00:37:21,120
 So again, you know, I listed paper, plastic, metal, cans, containers, glass.

623
00:37:21,120 --> 00:37:23,320
 There are other things that are out there that are recyclable.

624
00:37:23,320 --> 00:37:26,680
 I mean, wood, let's say, you know, scrap pieces of two-by-four.

625
00:37:26,680 --> 00:37:30,960
 Technically, you can recycle and reuse those if you define it broad enough, but that's

626
00:37:30,960 --> 00:37:32,120
 not included in here.

627
00:37:32,120 --> 00:37:37,000
 So if, you know, if just to make the math easy, if the U.S. Container Council produces

628
00:37:37,000 --> 00:37:40,880
 a hundred bottles in this year, they want to ensure that 50 of those bottles are put

629
00:37:40,880 --> 00:37:46,180
 back in the system and reused and recycled.

630
00:37:46,180 --> 00:37:47,180
 I got a question.

631
00:37:47,180 --> 00:37:52,840
 Maybe it's later in the presentation, but are you considering the paving products recycling

632
00:37:52,840 --> 00:37:54,080
 at all in this analysis?

633
00:37:54,080 --> 00:37:55,080
 I'm sorry.

634
00:37:55,080 --> 00:37:56,080
 Paving products?

635
00:37:56,080 --> 00:37:58,280
 Are you considering paving products recycling at all?

636
00:37:58,280 --> 00:37:59,280
 Paving.

637
00:37:59,280 --> 00:38:00,280
 Paving products.

638
00:38:00,280 --> 00:38:01,280
 Yes.

639
00:38:01,280 --> 00:38:05,460
 So that's part of the issue, or part of what we're looking at.

640
00:38:05,460 --> 00:38:09,960
 What we want to be able to do is not only the city be the driving force, but we will

641
00:38:09,960 --> 00:38:12,560
 look at the third party and the open market.

642
00:38:12,560 --> 00:38:20,440
 Currently, there is a very robust concrete asphalt type of recycling community out there.

643
00:38:20,440 --> 00:38:22,800
 What we want to do is to be able to expand that.

644
00:38:22,800 --> 00:38:25,880
 We don't need to be in the business where we're competing with the open market, but

645
00:38:25,880 --> 00:38:30,800
 I think if, yeah, as part of this process, if we put in rules, regulations, and mandates,

646
00:38:30,800 --> 00:38:35,080
 which will help drive that material into the third part.

647
00:38:35,080 --> 00:38:38,840
 We have a tremendous amount of buying power here in the city of Denton, so riding our

648
00:38:38,840 --> 00:38:45,120
 specs that says you have to have at least 50% recycled content as concrete aggregate

649
00:38:45,120 --> 00:38:52,360
 or millings or whatever, then now of a sudden, we become a key in driving what that is.

650
00:38:52,360 --> 00:38:57,360
 If we can set a standard type of specification now, not only is the city of Denton helping

651
00:38:57,360 --> 00:39:01,280
 drive that, but let's think about these smaller cities that could use some of our help.

652
00:39:01,280 --> 00:39:06,800
 The Crumbs, the Argylls, the Aubries, the Pilot Points, the Ponders, the Prosper's.

653
00:39:06,800 --> 00:39:10,640
 Now they can take this standard spec, throw it into their contracts, and all of a sudden,

654
00:39:10,640 --> 00:39:15,200
 instead of one city out there standing alone, you've got this large purchasing conglomerate

655
00:39:15,200 --> 00:39:17,800
 that will really help drive a lot of this.

656
00:39:17,800 --> 00:39:22,240
 The city of Denton in recent years has gone away from allowing recycled products in their

657
00:39:22,240 --> 00:39:24,000
 pavements, which makes no sense to me.

658
00:39:24,000 --> 00:39:29,240
 If you don't allow it in your engineered product, then it's going to be hard for you to recycle

659
00:39:29,240 --> 00:39:30,240
 it.

660
00:39:30,240 --> 00:39:31,240
 Exactly.

661
00:39:31,240 --> 00:39:32,240
 Exactly.

662
00:39:32,240 --> 00:39:35,360
 I think that's the discussion we have to have with our CIP folks, as well as some of the

663
00:39:35,360 --> 00:39:41,360
 local educational communities, because a lot of what engineering across the state of Texas,

664
00:39:41,360 --> 00:39:49,080
 they're relying on the TTI, Texas A&M, UT, North Texas, a lot of these powerhouse educational

665
00:39:49,080 --> 00:39:53,220
 facilities to help define what some of these specs and standards are going to be.

666
00:39:53,220 --> 00:39:57,380
 If we're in partnership and working with them to help move this forward, now we've created

667
00:39:57,380 --> 00:40:01,720
 this huge opportunity that we're looking to fill.

668
00:40:01,720 --> 00:40:04,040
 Yes, sir?

669
00:40:04,040 --> 00:40:09,040
 Brian, could you just, and I don't want to drag you down too much here, but could you

670
00:40:09,040 --> 00:40:14,080
 just, a little bit more input on organic waste, because I know that isn't a big part of your

671
00:40:14,080 --> 00:40:17,680
 deal, but it may grow, and there's a lot of people out there.

672
00:40:17,680 --> 00:40:24,900
 Is there conceivably an opportunity where there will be a separate bin for organic waste

673
00:40:24,900 --> 00:40:30,320
 per homeowner, per residential, or something a little bit bigger where there's a dumpster

674
00:40:30,320 --> 00:40:36,200
 type location within a community where people could take it and make it easy for the city

675
00:40:36,200 --> 00:40:37,200
 to do that?

676
00:40:37,200 --> 00:40:41,640
 I think we're talking both trying to answer the what and the how.

677
00:40:41,640 --> 00:40:45,520
 From the what standpoint, we do want to divert as much organic materials as possible.

678
00:40:45,520 --> 00:40:48,520
 How is the big question?

679
00:40:48,520 --> 00:40:53,400
 Currently we do have an organics recycling container at your house, though it's a brown

680
00:40:53,400 --> 00:40:57,680
 yard waste bin, and you can put grass clippings, you can put yard clippings, you can put tree

681
00:40:57,680 --> 00:40:58,680
 clippings.

682
00:40:58,680 --> 00:40:59,680
 The big brown bin?

683
00:40:59,680 --> 00:41:05,680
 Yeah, the big brown bin, or even the paper bag, the craft bag, and uncooked vegetables.

684
00:41:05,680 --> 00:41:09,240
 That organic material that hasn't been cooked, doesn't have fat oils or grease in it, that

685
00:41:09,240 --> 00:41:10,240
 can go in there.

686
00:41:10,240 --> 00:41:16,520
 And now we can manage that material and it's managed on a weekly basis.

687
00:41:16,520 --> 00:41:27,480
 But let's say the spoiled food from your household, you finish Thanksgiving and you've got the

688
00:41:27,480 --> 00:41:31,880
 rest of the turkey carcass and the little brown scrapings off the edges of the stuffing

689
00:41:31,880 --> 00:41:32,880
 bowl.

690
00:41:32,880 --> 00:41:34,080
 What happens with those?

691
00:41:34,080 --> 00:41:40,920
 I can conceive at some point that you may have a bin on your counter, whether we pick

692
00:41:40,920 --> 00:41:46,400
 that up curbside or set up some sort of regional type of collection dumpsters where you go

693
00:41:46,400 --> 00:41:52,440
 maybe to a library or to a park or out to the landfill and pour that material in there,

694
00:41:52,440 --> 00:41:53,840
 that may be what it looks like.

695
00:41:53,840 --> 00:41:58,560
 So again, we're talking a lot of what now as we look at implementation, that's where

696
00:41:58,560 --> 00:42:00,160
 the how questions will be answered.

697
00:42:00,160 --> 00:42:01,160
 Okay.

698
00:42:01,160 --> 00:42:02,160
 Thanks, sir.

699
00:42:02,160 --> 00:42:03,160
 Thank you.

700
00:42:03,160 --> 00:42:05,600
 We're going to go ahead and continue here.

701
00:42:05,600 --> 00:42:11,920
 And again, looking nationwide, this is just a smattering of the few plans that we looked

702
00:42:11,920 --> 00:42:12,920
 at.

703
00:42:12,920 --> 00:42:16,600
 And again, locally, when we look at our partners here in North Texas, Dallas and Fort Worth,

704
00:42:16,600 --> 00:42:19,760
 they've got some fairly aggressive goals.

705
00:42:19,760 --> 00:42:28,760
 Dallas wanted to have 60% by 2030, but currently, and their plan started in 2013 and currently

706
00:42:28,760 --> 00:42:34,940
 they're at 20%, but again, Dallas is a fairly large community.

707
00:42:34,940 --> 00:42:42,080
 City of Fort Worth, again, 40%, they stated in 2017 and they're currently at 30% and that's

708
00:42:42,080 --> 00:42:43,080
 by 37.

709
00:42:43,080 --> 00:42:47,260
 Now put this in perspective, when I left Fort Worth back in 2010, we were at 28.

710
00:42:47,260 --> 00:42:50,160
 So again, they've had just a little bit of a creep there, but again, I think there's

711
00:42:50,160 --> 00:42:53,560
 some opportunities to continue to improve that.

712
00:42:53,560 --> 00:42:57,600
 You look at Austin, Houston, San Antonio, similar type results, and then you get across

713
00:42:57,600 --> 00:42:59,280
 the United States.

714
00:42:59,280 --> 00:43:04,800
 Some of these, when you get outside of the state of Texas, you see some fairly significant

715
00:43:04,800 --> 00:43:09,840
 goals, 90%, 90%, 80%, 70%.

716
00:43:09,840 --> 00:43:14,840
 One of the things you have to remember when these cities were setting these goals, first

717
00:43:14,840 --> 00:43:16,360
 of all, it wasn't comprehensive.

718
00:43:16,360 --> 00:43:19,960
 A lot of these are related specifically to the residential community.

719
00:43:19,960 --> 00:43:24,760
 They do not address the commercial waste sector, and secondarily, they have a bullet in their

720
00:43:24,760 --> 00:43:30,480
 pocket that we don't have, and a lot of that is state mandates with regard to container,

721
00:43:30,480 --> 00:43:33,880
 bottle bills, buyback, things of that nature.

722
00:43:33,880 --> 00:43:40,640
 In the state of Texas, currently there are no laws that allow us to limit bags and what

723
00:43:40,640 --> 00:43:46,520
 kind of container you can bring your groceries home in and the nickel we used to get on the

724
00:43:46,520 --> 00:43:47,960
 pop bottles.

725
00:43:47,960 --> 00:43:56,160
 We don't have that in ... You got a nickel for it.

726
00:43:56,160 --> 00:43:59,920
 We've got certain challenges that we have to face on this uphill climb, but again, I

727
00:43:59,920 --> 00:44:04,200
 think as we go through this and look at this comprehensively, we've set some goals and

728
00:44:04,200 --> 00:44:07,800
 looking at some opportunities here that are realistic.

729
00:44:07,800 --> 00:44:12,560
 Based on everything that we've looked at, some of the opportunities and the crawl, walk,

730
00:44:12,560 --> 00:44:17,680
 run mentality of nature, what we want to try to do is define a long-term diversion goal

731
00:44:17,680 --> 00:44:22,080
 in the city of Denton of 40% by 2040.

732
00:44:22,080 --> 00:44:27,400
 The 2040 period is important because again, from a comprehensive plan standpoint, the

733
00:44:27,400 --> 00:44:33,760
 update, we're trying to align a lot of our plans and with 2040 being the comp plan date,

734
00:44:33,760 --> 00:44:36,000
 we want to be on that same time period.

735
00:44:36,000 --> 00:44:41,960
 40% also, I think it gives us the opportunity to get programs in place, get funding in place,

736
00:44:41,960 --> 00:44:46,600
 get mandates in place, get rules and regulations in place, get education in place, and really

737
00:44:46,600 --> 00:44:50,080
 get that conversation and momentum started.

738
00:44:50,080 --> 00:44:54,640
 Secondarily also, it gives us a good educational metric, 40 by 40.

739
00:44:54,640 --> 00:44:58,800
 It just rolls off the tongue, that alliteration, it helps, it sticks in your mind, and you're

740
00:44:58,800 --> 00:45:01,560
 going to be thinking about 40 by 40 the rest of the day.

741
00:45:01,560 --> 00:45:09,560
 Similarly, we want to have a lifetime diversion goal of 75 by 75.

742
00:45:09,560 --> 00:45:10,560
 Where do we come up with 75?

743
00:45:10,560 --> 00:45:13,960
 Well, it goes back to that capture rate.

744
00:45:13,960 --> 00:45:22,280
 Back in October of 2020, seems like a long time ago when it was, but we actually grabbed

745
00:45:22,280 --> 00:45:28,840
 a couple hundred trash carts off the curb and tore them apart, weighed what was in there,

746
00:45:28,840 --> 00:45:33,800
 identified specifically what the components were, and we found out that based on what

747
00:45:33,800 --> 00:45:39,440
 we know now, we have the opportunity to capture about 75 or 73% of everything that's being

748
00:45:39,440 --> 00:45:40,440
 thrown away.

749
00:45:40,440 --> 00:45:48,080
 So, if we set an 80% goal, and we only had the ability to recover 73%, that's unattainable.

750
00:45:48,080 --> 00:45:53,320
 But again, if we're working towards trying to divert everything that's possible, 75 by

751
00:45:53,320 --> 00:45:55,600
 75 makes a whole lot of sense.

752
00:45:55,600 --> 00:46:01,720
 So again, that's where that 75, and again, it's alliterative, 75 by 75, 40 by 40, 75

753
00:46:01,720 --> 00:46:02,720
 by 75.

754
00:46:02,720 --> 00:46:05,960
 So, what does that mean as opposed to where we are now?

755
00:46:05,960 --> 00:46:10,880
 Well, currently, the city of Denton, and again, I'm just talking about our residents and our

756
00:46:10,880 --> 00:46:15,040
 commercial structure, we're at about 15%.

757
00:46:15,040 --> 00:46:19,720
 Not too shabby, not too great, but again, it's a good starting point.

758
00:46:19,720 --> 00:46:24,640
 Currently, every man, woman, and child in the city of Denton, we produce about one and

759
00:46:24,640 --> 00:46:26,920
 a quarter pound of garbage per person per day.

760
00:46:26,920 --> 00:46:30,260
 What we want to be able to do is drive that down.

761
00:46:30,260 --> 00:46:36,840
 Our current residential recycling rate is about 11% with a 61% contamination rate.

762
00:46:36,840 --> 00:46:41,520
 From a commercial sector, and again, this is only the programmatic material, what you

763
00:46:41,520 --> 00:46:46,320
 would put in your blue bin here is really what we're trying to recover from commercial

764
00:46:46,320 --> 00:46:48,600
 sector right now is about 2%.

765
00:46:48,600 --> 00:46:53,760
 But again, we don't provide recycling to everybody, so we don't have that number to really round

766
00:46:53,760 --> 00:46:57,280
 that out, but that's everybody that we collect.

767
00:46:57,280 --> 00:46:59,880
 Commercial contamination is about 55%.

768
00:46:59,880 --> 00:47:04,520
 When we look at the residential capture rate at the residential curbside, we're at about

769
00:47:04,520 --> 00:47:05,520
 50%.

770
00:47:05,520 --> 00:47:11,200
 So we've gotten about half of everything, so we still have about halfway to go to be

771
00:47:11,200 --> 00:47:14,200
 able to really clean up the garbage bins.

772
00:47:14,200 --> 00:47:17,360
 Also looking at our landfill life with our current expansion and everything else, we're

773
00:47:17,360 --> 00:47:21,920
 at about 50 years, a little bit more than that right now, and part of what's driving

774
00:47:21,920 --> 00:47:24,540
 that is just the growth in this area.

775
00:47:24,540 --> 00:47:30,220
 Not only our waste hauler agreements, but really the regional customers that are single

776
00:47:30,220 --> 00:47:35,100
 pay that come across, that is just going up every day, and that's not just commercial

777
00:47:35,100 --> 00:47:41,160
 customers, that's residential customers cleaning out their garages, moving in, moving out,

778
00:47:41,160 --> 00:47:42,800
 things of that nature.

779
00:47:42,800 --> 00:47:46,400
 From an organic standpoint, that's really a short-term success.

780
00:47:46,400 --> 00:47:50,120
 Currently with the implementation of our carted and bagged program, we've been able to drive

781
00:47:50,120 --> 00:47:55,740
 that number up to about 28,000 ton a year, almost 29,000 ton a year.

782
00:47:55,740 --> 00:48:05,200
 We collect slightly north of 6,000 tons curbside, and then about 300 ton of organic material

783
00:48:05,200 --> 00:48:08,880
 from commercial customers such as Walmart, Target, Sam's.

784
00:48:08,880 --> 00:48:14,060
 They have special bins outside that we go and collect the spoiled vegetables and everything

785
00:48:14,060 --> 00:48:17,600
 else that they have and put that in to be making dino dirt.

786
00:48:17,600 --> 00:48:22,520
 One of the big successes is really the direct haul, so those people, those arborists and

787
00:48:22,520 --> 00:48:26,520
 everybody else that's working in Denton and sort of in this North Texas region, bringing

788
00:48:26,520 --> 00:48:32,840
 us material to make the dino dirt out of, almost 22,000 ton a year of direct haul material

789
00:48:32,840 --> 00:48:33,840
 going up.

790
00:48:33,840 --> 00:48:38,920
 Again, we have a good product, we have a system that can manage it thanks to wastewater in

791
00:48:38,920 --> 00:48:44,080
 that group for beneficial reuse for driving that, but again, looking for some exciting

792
00:48:44,080 --> 00:48:50,480
 opportunities as we look at commercial food waste diversion, food waste diversion from

793
00:48:50,480 --> 00:48:56,880
 our university cafeterias and things of this nature, so really some exciting things that

794
00:48:56,880 --> 00:48:58,400
 is going on now.

795
00:48:58,400 --> 00:49:02,440
 If we look, if we wanted to take this as a regional diversion rate for everything that

796
00:49:02,440 --> 00:49:09,280
 we're managing here through the City of Denton landfill, that drops to about 7.5%.

797
00:49:09,280 --> 00:49:12,880
 But that number, I'm going to put an asterisk on that because again, we know most of the

798
00:49:12,880 --> 00:49:19,000
 these that are being serviced by these contract haulers have recycling programs, but we're

799
00:49:19,000 --> 00:49:20,640
 not able to capture that number yet.

800
00:49:20,640 --> 00:49:26,000
 Part of what we want to do if we extend these waste hauler agreements is to require reporting

801
00:49:26,000 --> 00:49:30,480
 of what those numbers are and actually create some sort of incentive that the more you recycle,

802
00:49:30,480 --> 00:49:34,920
 the better rate you potentially get from us and create opportunities for them to divert

803
00:49:34,920 --> 00:49:36,800
 within our system also.

804
00:49:36,800 --> 00:49:41,240
 So again, there's some, we use the power of our dollar and our system to help drive the

805
00:49:41,240 --> 00:49:42,240
 improvements there.

806
00:49:42,240 --> 00:49:43,240
 So with that-

807
00:49:43,240 --> 00:49:44,240
 Oh, go ahead.

808
00:49:44,240 --> 00:49:45,240
 Yes.

809
00:49:45,240 --> 00:49:46,720
 I have a question on the last slide if you could, Mayne.

810
00:49:46,720 --> 00:49:47,720
 Yes.

811
00:49:47,720 --> 00:49:50,040
 Okay, so commercial recycle rate is only 2%.

812
00:49:50,040 --> 00:49:51,040
 Yes.

813
00:49:51,040 --> 00:49:52,440
 Do you guys have any idea why it's so low?

814
00:49:52,440 --> 00:49:54,520
 Well again, there's several things.

815
00:49:54,520 --> 00:49:58,240
 First of all, we're only recycling programmatic material.

816
00:49:58,240 --> 00:50:07,200
 So again, bottles, containers, cans, and if you're going to, if you're pulling the can

817
00:50:07,200 --> 00:50:11,680
 at U-Haul, how many of those are they going to have?

818
00:50:11,680 --> 00:50:12,680
 Absolutely nothing.

819
00:50:12,680 --> 00:50:16,280
 A lot of this comes from the commercial sector, a lot of it, not commercial, a lot of this

820
00:50:16,280 --> 00:50:20,960
 comes from the multi-family sector, which again is highly contaminated, you know, any

821
00:50:20,960 --> 00:50:26,080
 port in a storm, somebody's walking out to their car to go to work, closest band it goes

822
00:50:26,080 --> 00:50:27,080
 into.

823
00:50:27,080 --> 00:50:30,360
 So we're currently, and again, these are 21 numbers.

824
00:50:30,360 --> 00:50:33,400
 These are not the current numbers, but it's the last full year.

825
00:50:33,400 --> 00:50:42,520
 But we're currently with lid locks and sized lids, we're really driving the multi-family

826
00:50:42,520 --> 00:50:45,000
 contamination number down right now.

827
00:50:45,000 --> 00:50:50,720
 Working with schools and institutions to help rectify and really tighten up their janitorial

828
00:50:50,720 --> 00:50:55,540
 services so that again, we've got people that are putting the right materials.

829
00:50:55,540 --> 00:51:01,120
 So again, and again, from a commercial sector standpoint, the amount of material that's

830
00:51:01,120 --> 00:51:04,640
 able to be recycled from some of these locations is minimal.

831
00:51:04,640 --> 00:51:13,160
 Yeah, so I looked into getting like a recycle dumpster for our company a while back in it.

832
00:51:13,160 --> 00:51:15,640
 If I remember right, you actually pay for it?

833
00:51:15,640 --> 00:51:16,640
 Yes, you do.

834
00:51:16,640 --> 00:51:20,640
 Okay, so have you all thought that might be a dissentive in any way?

835
00:51:20,640 --> 00:51:25,840
 Well, you're going to pay for it either way, because I mean, let's say...

836
00:51:25,840 --> 00:51:26,840
 For the service, yeah.

837
00:51:26,840 --> 00:51:33,880
 I mean, let's say, well, but it's also mass balance, let's say you got 10 yards of garbage.

838
00:51:33,880 --> 00:51:37,560
 If you can recycle 50%, you still have 10 yards of material to deal with, five yards

839
00:51:37,560 --> 00:51:41,360
 in this can and five yards of this can, and it actually cost us twice as much to go out

840
00:51:41,360 --> 00:51:44,600
 there to pick it up and service it.

841
00:51:44,600 --> 00:51:48,460
 It's a little bit of a disincentive on the front end, but it's part of our recycling,

842
00:51:48,460 --> 00:51:52,600
 the way the whole rate system's set up, you're not paying the disposal charge on the recycling

843
00:51:52,600 --> 00:51:53,600
 dumpster.

844
00:51:53,600 --> 00:51:58,800
 That's a net savings, utilizing that dumpster versus your garbage dumpster.

845
00:51:58,800 --> 00:51:59,800
 That's great.

846
00:51:59,800 --> 00:52:00,800
 Thanks.

847
00:52:00,800 --> 00:52:01,800
 Oh, yes.

848
00:52:01,800 --> 00:52:02,800
 Go ahead, Billy.

849
00:52:02,800 --> 00:52:03,800
 So are you accounting for any...

850
00:52:03,800 --> 00:52:05,240
 I'll do it like this.

851
00:52:05,240 --> 00:52:08,680
 Are you accounting for any of the recycling that you're not doing?

852
00:52:08,680 --> 00:52:09,680
 Does this take into account...

853
00:52:09,680 --> 00:52:15,620
 No, this does not take into account any recycling that we do not have specific control over,

854
00:52:15,620 --> 00:52:20,080
 and that's going to be step one here, is rewriting our Chapter 24 ordinance that will allow us

855
00:52:20,080 --> 00:52:21,320
 to capture that material.

856
00:52:21,320 --> 00:52:26,480
 The University of North Texas right now has a very, very robust, internalized recycling

857
00:52:26,480 --> 00:52:27,480
 program.

858
00:52:27,480 --> 00:52:31,640
 A tremendous amount of material is at the diverting, but we never see that.

859
00:52:31,640 --> 00:52:34,500
 We don't know what that number is, but we haul all their garbage.

860
00:52:34,500 --> 00:52:42,280
 So again, it's almost we get the denominator, but we don't get the numerator in the process.

861
00:52:42,280 --> 00:52:45,760
 We shred almost every piece of paper that goes out our door, and it's recycled by the

862
00:52:45,760 --> 00:52:47,040
 people we pay to shred it.

863
00:52:47,040 --> 00:52:48,040
 Correct.

864
00:52:48,040 --> 00:52:52,760
 Well, also, if you come over and look at that pile of black recycled asphalt that I have

865
00:52:52,760 --> 00:52:55,080
 at my yard, it's about 50,000 tons.

866
00:52:55,080 --> 00:52:56,080
 Yes.

867
00:52:56,080 --> 00:52:57,600
 So we'll recycle every bit of that.

868
00:52:57,600 --> 00:52:58,600
 Right.

869
00:52:58,600 --> 00:52:59,600
 So anyway.

870
00:52:59,600 --> 00:53:00,600
 That would help your numbers.

871
00:53:00,600 --> 00:53:01,600
 Yes, sir.

872
00:53:01,600 --> 00:53:02,600
 I think David had a question.

873
00:53:02,600 --> 00:53:04,800
 Yeah, I was just trying to understand.

874
00:53:04,800 --> 00:53:12,080
 So again, these numbers, the recycle rate is tons in the green bin versus tons in the

875
00:53:12,080 --> 00:53:14,280
 blue bin?

876
00:53:14,280 --> 00:53:15,920
 Net of contamination.

877
00:53:15,920 --> 00:53:20,240
 So again, we've pulled out all the contaminated material, put that back over on the garbage

878
00:53:20,240 --> 00:53:21,240
 side.

879
00:53:21,240 --> 00:53:29,760
 So 11% of it actually is going to some third party to be reused beneficially in a new product.

880
00:53:29,760 --> 00:53:30,760
 Okay.

881
00:53:30,760 --> 00:53:38,680
 So contamination rate is tons of non-recyclable material in the recycle bin.

882
00:53:38,680 --> 00:53:44,260
 So you're saying over half of what enters the recycling facility is not a recyclable

883
00:53:44,260 --> 00:53:48,360
 material like our list of approved recyclables?

884
00:53:48,360 --> 00:53:49,360
 No.

885
00:53:49,360 --> 00:53:52,360
 It may be a material that is programmatic and recycling, but because of the way it was

886
00:53:52,360 --> 00:53:58,080
 managed in your bin, it has become contaminated and we cannot manage it.

887
00:53:58,080 --> 00:54:07,520
 Imagine you have half a bin full of paper and somebody absentmindedly throws a bag of

888
00:54:07,520 --> 00:54:09,620
 dirty diapers on top of it.

889
00:54:09,620 --> 00:54:13,120
 Now all of a sudden we have a half a bin of contaminated material.

890
00:54:13,120 --> 00:54:20,360
 95% of that is a potentially recyclable product, but because it was contaminated, it has made

891
00:54:20,360 --> 00:54:23,920
 it non-processable through our facility.

892
00:54:23,920 --> 00:54:28,880
 And that may be even a better way to look at this, that 61% of this material is non-processable

893
00:54:28,880 --> 00:54:36,500
 because, again, it has been contaminated by garbage, yard waste, aspirational recycling.

894
00:54:36,500 --> 00:54:38,240
 It's material we don't take right now.

895
00:54:38,240 --> 00:54:41,520
 A film, a -- Garden hose.

896
00:54:41,520 --> 00:54:42,520
 Pardon?

897
00:54:42,520 --> 00:54:43,520
 A garden hose?

898
00:54:43,520 --> 00:54:44,520
 A garden hose.

899
00:54:44,520 --> 00:54:45,520
 A tangler.

900
00:54:45,520 --> 00:54:46,520
 Styrofoam.

901
00:54:46,520 --> 00:54:49,960
 Styrofoam is notorious for this.

902
00:54:49,960 --> 00:54:52,960
 Technically it is a recyclable material, but we do not manage our program.

903
00:54:52,960 --> 00:54:57,520
 People see the recycle triangles, they put it in the bin, and we get it, and it has to

904
00:54:57,520 --> 00:54:59,900
 go out the back door.

905
00:54:59,900 --> 00:55:06,440
 And the way that number is captured is tons into the MRF and then tons out the MRF.

906
00:55:06,440 --> 00:55:17,160
 And so, okay, and now 11% and 2%, how does that get to 15% diversion rate?

907
00:55:17,160 --> 00:55:20,040
 It seems like your average would be 9 or 8.

908
00:55:20,040 --> 00:55:24,640
 That's really good because, again, that's the recycle rate versus the diversion rate.

909
00:55:24,640 --> 00:55:30,000
 Recycle rate is a term we're going to use specifically about programmatic material.

910
00:55:30,000 --> 00:55:33,640
 Diversion rate is everything we have control over, so organic material.

911
00:55:33,640 --> 00:55:37,800
 If we're using paving, you know, if we're able to be able to do paving.

912
00:55:37,800 --> 00:55:43,080
 At some point in time, I would like to be able to capture all this donation boxes that's

913
00:55:43,080 --> 00:55:48,560
 on every target and Kroger parking lot right now, we've got material going in there that

914
00:55:48,560 --> 00:55:52,360
 could have potentially been waste coming to us, but it's being beneficially diverted somehow.

915
00:55:52,360 --> 00:55:56,600
 So if we can capture that weight, then now that gives us a better understanding of what's

916
00:55:56,600 --> 00:55:58,200
 happening in the city of Denton.

917
00:55:58,200 --> 00:56:02,840
 And if we can define that third party, maybe instead of the nasty old box sitting out in

918
00:56:02,840 --> 00:56:06,720
 that parking lot that's always overflowing and causing litter everywhere, create some

919
00:56:06,720 --> 00:56:11,240
 sort of partnership opportunity that now we've got a little bit of a storefront maybe or

920
00:56:11,240 --> 00:56:15,200
 an area that we can, you know, create that it's, first of all, it's aesthetically better,

921
00:56:15,200 --> 00:56:19,080
 but secondarily, the material's not being damaged because, you know, it's being rained

922
00:56:19,080 --> 00:56:23,360
 on or somebody's carting it off for this or that.

923
00:56:23,360 --> 00:56:28,520
 And the contamination rate, has it always, you said it's, it was lower in the past?

924
00:56:28,520 --> 00:56:35,520
 Well, it has been lower in the past because again, the quality standards were much more

925
00:56:35,520 --> 00:56:37,800
 forgiving for lack of a better term.

926
00:56:37,800 --> 00:56:42,880
 So you know, the higher spec stuff could go over here, but the lower spec stuff was, I

927
00:56:42,880 --> 00:56:46,760
 mean, in all honesty was being sent to Asia where, you know, they had people that were

928
00:56:46,760 --> 00:56:49,280
 secondarily picking through a lot of this stuff.

929
00:56:49,280 --> 00:56:54,440
 So again, the quality of the material in the can has not changed significantly.

930
00:56:54,440 --> 00:56:59,720
 Our ability to find a processor that would manage that quality of material has decreased.

931
00:56:59,720 --> 00:57:00,720
 Okay.

932
00:57:00,720 --> 00:57:06,880
 So then, and really this might be, this might be baled number six plastic that there's no

933
00:57:06,880 --> 00:57:09,880
 market for and it ends up in the landfill?

934
00:57:09,880 --> 00:57:10,880
 Correct.

935
00:57:10,880 --> 00:57:15,080
 So it might, it might even be like fully processed material, like the MRF, the MRF in theory.

936
00:57:15,080 --> 00:57:19,520
 At that city of Bend, we are not taking any fully processed material into our landfill.

937
00:57:19,520 --> 00:57:20,520
 Okay.

938
00:57:20,520 --> 00:57:21,520
 Okay.

939
00:57:21,520 --> 00:57:26,520
 So again, you know, the initial calling happens at the, at the sorting floor.

940
00:57:26,520 --> 00:57:28,680
 Materials dropped, it's carved out.

941
00:57:28,680 --> 00:57:34,640
 We make a, we make an estimate estimation and then the tonnages are calculated on the

942
00:57:34,640 --> 00:57:35,800
 backend.

943
00:57:35,800 --> 00:57:42,080
 So but again, if it's processed through the MRF, it goes to a third party processor where

944
00:57:42,080 --> 00:57:43,080
 it's been officially recycled.

945
00:57:43,080 --> 00:57:44,880
 It is not thrown away.

946
00:57:44,880 --> 00:57:45,880
 Okay.

947
00:57:45,880 --> 00:57:46,880
 All right.

948
00:57:46,880 --> 00:57:47,880
 That's good to know.

949
00:57:47,880 --> 00:57:55,640
 Now, at these rates are, you've talked about the programs you've talked about to increase

950
00:57:55,640 --> 00:58:00,880
 the recycling rate and diversion rate is to take credit for services that are being already

951
00:58:00,880 --> 00:58:01,880
 performed.

952
00:58:01,880 --> 00:58:07,200
 Like we talked about UNT, talked about the donation boxes, you know, I'm assuming like

953
00:58:07,200 --> 00:58:11,720
 we want to make sure we do a full accounting of all waste in Bend.

954
00:58:11,720 --> 00:58:19,160
 Are there any plans, is it feasible to increase commercial or residential recycling rates

955
00:58:19,160 --> 00:58:20,960
 or decrease contamination?

956
00:58:20,960 --> 00:58:23,360
 Like I guess I'm curious about those goals.

957
00:58:23,360 --> 00:58:24,360
 Yeah.

958
00:58:24,360 --> 00:58:27,560
 And I see where you're coming from and I apologize if I didn't make it clear.

959
00:58:27,560 --> 00:58:29,920
 We're currently working in driving those numbers down.

960
00:58:29,920 --> 00:58:32,100
 Again, these numbers are a year old.

961
00:58:32,100 --> 00:58:38,240
 They're not into 22 and you know, we have a cart audit program right now that's extremely

962
00:58:38,240 --> 00:58:39,240
 robust.

963
00:58:39,240 --> 00:58:44,080
 We have auditors out there lifting the lid on recycling bins in neighborhoods before

964
00:58:44,080 --> 00:58:46,480
 the trucks get there, so to speak.

965
00:58:46,480 --> 00:58:49,600
 And you know, we've been able to drive this number down significantly.

966
00:58:49,600 --> 00:58:57,120
 I think really in, you know, currently our monthly recycling average is about, contamination

967
00:58:57,120 --> 00:59:00,200
 level is about 48% instead of 61%.

968
00:59:00,200 --> 00:59:05,000
 The 61% is an annual from the past year when we started really high.

969
00:59:05,000 --> 00:59:06,440
 That number continues to come down.

970
00:59:06,440 --> 00:59:10,400
 Part of that is just, you know, walking and talking to people in the neighborhoods, doing

971
00:59:10,400 --> 00:59:15,160
 the point, the single point education says, you know, this is not recyclable.

972
00:59:15,160 --> 00:59:16,160
 This is what we found.

973
00:59:16,160 --> 00:59:18,720
 So and we've got people in the commercial sector.

974
00:59:18,720 --> 00:59:21,000
 We've got people in the multifamily sector.

975
00:59:21,000 --> 00:59:25,920
 We're running, you know, test routes, trying to identify what those materials are so we

976
00:59:25,920 --> 00:59:30,680
 can create programs that will continue to drive that contamination level down and increase

977
00:59:30,680 --> 00:59:32,280
 the quality of material.

978
00:59:32,280 --> 00:59:35,560
 Because again, from a recycling standpoint, it's all about quality.

979
00:59:35,560 --> 00:59:37,160
 It's not about quantity.

980
00:59:37,160 --> 00:59:38,400
 Quantity has nothing to do with it.

981
00:59:38,400 --> 00:59:39,400
 It's about quality.

982
00:59:39,400 --> 00:59:42,480
 If you can get the highest quality, you can get the highest cost and again, the highest

983
00:59:42,480 --> 00:59:45,920
 return and then the quantity follows.

984
00:59:45,920 --> 00:59:49,640
 But until you've got quality covered, quantity doesn't matter.

985
00:59:49,640 --> 00:59:56,680
 Okay, so you have current programs on like the cart audits in residential and you said

986
00:59:56,680 --> 01:00:05,120
 you mentioned planning future programs to further residential, you kind of just said

987
01:00:05,120 --> 01:00:07,000
 it in a sentence very quickly.

988
01:00:07,000 --> 01:00:13,000
 Do you have future programs also to improve the recycle rate and contamination rate?

989
01:00:13,000 --> 01:00:18,360
 Yeah, we're currently working on, like I said, the cart program, we're doing the audits.

990
01:00:18,360 --> 01:00:19,800
 That's really what's driving it down.

991
01:00:19,800 --> 01:00:26,040
 But then we're going to be looking at some other programs in the commercial and multifamily

992
01:00:26,040 --> 01:00:34,160
 sector which will help clean up those bins also so that we can continue to reduce the

993
01:00:34,160 --> 01:00:39,080
 contamination, increase the quality and also work with the community to help those people

994
01:00:39,080 --> 01:00:45,440
 who currently don't have recycling containers, get them into the system also.

995
01:00:45,440 --> 01:00:49,760
 Okay, so that really seems to be targeting contamination rate.

996
01:00:49,760 --> 01:00:50,760
 Yes.

997
01:00:50,760 --> 01:00:51,760
 Yeah.

998
01:00:51,760 --> 01:00:59,800
 And that's a one person at a time education by cart audit in the residential.

999
01:00:59,800 --> 01:01:04,920
 And I'm just trying to think of what other, like holistically you have a stream of generated

1000
01:01:04,920 --> 01:01:07,600
 waste, it goes to a lot of places.

1001
01:01:07,600 --> 01:01:13,840
 A lot of those are carts and dumpsters that then go to the MRR for the landfill.

1002
01:01:13,840 --> 01:01:19,960
 Other points of diversion, are you looking at anything landfill, at the landfill for

1003
01:01:19,960 --> 01:01:20,960
 diversion?

1004
01:01:20,960 --> 01:01:22,000
 Yeah, we are.

1005
01:01:22,000 --> 01:01:23,000
 We are.

1006
01:01:23,000 --> 01:01:25,880
 To be honest, and a lot of that goes to the direct hall.

1007
01:01:25,880 --> 01:01:30,680
 But anything that happens at the landfill will be for the mom and pop that pulls across

1008
01:01:30,680 --> 01:01:32,280
 the scale.

1009
01:01:32,280 --> 01:01:38,120
 And with the establishment of our new public disposal facility that we're currently constructing

1010
01:01:38,120 --> 01:01:44,400
 out at the site, that will help us further that recycling.

1011
01:01:44,400 --> 01:01:48,160
 When you pull into it, one side you'll be able to dump, the other side will have recycled

1012
01:01:48,160 --> 01:01:49,160
 containers.

1013
01:01:49,160 --> 01:01:56,080
 Metal, bigger metal that wouldn't be able to fit in your cart, steel, things of that

1014
01:01:56,080 --> 01:01:57,080
 nature.

1015
01:01:57,080 --> 01:02:00,120
 If you're bringing in a bulk paper or boxes or things of that nature, that will be able

1016
01:02:00,120 --> 01:02:02,100
 to be thrown over in those bins.

1017
01:02:02,100 --> 01:02:05,760
 So those are the diversionary tactics.

1018
01:02:05,760 --> 01:02:12,080
 But things like C&D and concrete and brick and rubble and things like that, that's where

1019
01:02:12,080 --> 01:02:15,360
 the opportunities on the third party exist and we're going to be working closely with

1020
01:02:15,360 --> 01:02:21,240
 economic development to create those synergies that not only bring jobs to the city of Denton,

1021
01:02:21,240 --> 01:02:27,760
 but also help provide opportunities to recycle that material before we even see it.

1022
01:02:27,760 --> 01:02:31,720
 Yeah, I mean, I definitely think the best option is it never reaches the landfill.

1023
01:02:31,720 --> 01:02:32,720
 That is correct.

1024
01:02:32,720 --> 01:02:39,040
 But if 15% of the waste is this product and it's getting to the landfill, it's entering

1025
01:02:39,040 --> 01:02:44,560
 the landfill, then it seems like you can educate all you want.

1026
01:02:44,560 --> 01:02:47,000
 It might be necessary to divert at the landfill.

1027
01:02:47,000 --> 01:02:49,360
 And so that recycling, I had no idea that program was there.

1028
01:02:49,360 --> 01:03:04,960
 That's a good, so that's MRF materials, the big four MRF sorted recycling.

1029
01:03:04,960 --> 01:03:08,560
 Material recycling or material recovery facility.

1030
01:03:08,560 --> 01:03:16,640
 No, it's the blue bin sorting, yeah, because recycling, like you said, recycling is concrete

1031
01:03:16,640 --> 01:03:22,360
 or asphalt or wood or all this other, but things that go into the MRF like...

1032
01:03:22,360 --> 01:03:30,040
 Material recycling facility.

1033
01:03:30,040 --> 01:03:40,080
 So I guess another question I have is how is this aligning with citywide plans?

1034
01:03:40,080 --> 01:03:47,480
 I think this is, you know, any city department can have the best intentions and plans.

1035
01:03:47,480 --> 01:03:59,600
 I'm curious how the sustainability board and city council, how much overarching support

1036
01:03:59,600 --> 01:04:01,200
 does this have?

1037
01:04:01,200 --> 01:04:07,960
 Like was mentioned earlier, if we don't use recycled concrete in our building contracts,

1038
01:04:07,960 --> 01:04:11,240
 there's no market for the concrete to be recycled.

1039
01:04:11,240 --> 01:04:15,920
 And so I do feel like this needs to be, not just like, you get the brunt of it.

1040
01:04:15,920 --> 01:04:21,480
 You are receiving it every day, like all the waste material comes to the door right outside

1041
01:04:21,480 --> 01:04:23,320
 your office.

1042
01:04:23,320 --> 01:04:31,480
 However, this does need to be approached systematically, you know, and with support from the greater

1043
01:04:31,480 --> 01:04:34,040
 city system.

1044
01:04:34,040 --> 01:04:38,960
 Have you presented this to the sustainability committee yet?

1045
01:04:38,960 --> 01:04:43,880
 No, and they will not really have a discussion or direction on this.

1046
01:04:43,880 --> 01:04:48,600
 Once we start implementing it, then that's when we will rely heavily on their feedback.

1047
01:04:48,600 --> 01:04:52,920
 We present this same thing to council tomorrow, but I think you hit the nail right on the

1048
01:04:52,920 --> 01:04:53,920
 head.

1049
01:04:53,920 --> 01:04:56,160
 We got to clean up our own house first before we really reach out.

1050
01:04:56,160 --> 01:05:01,000
 And part of this plan and really the job that I'm not really looking forward to over the

1051
01:05:01,000 --> 01:05:04,520
 next year, year and a half, is, you know, pulling other departments forward, kicking

1052
01:05:04,520 --> 01:05:08,960
 and screaming to align with what we're wanting to do here.

1053
01:05:08,960 --> 01:05:11,780
 Because again, this is not a solid waste code revision.

1054
01:05:11,780 --> 01:05:13,680
 This is a development code revision.

1055
01:05:13,680 --> 01:05:15,800
 This is a purchasing code revision.

1056
01:05:15,800 --> 01:05:20,040
 This is sustainability and environmental.

1057
01:05:20,040 --> 01:05:22,120
 This is a process right now.

1058
01:05:22,120 --> 01:05:24,240
 We have a wonderful partnership with water.

1059
01:05:24,240 --> 01:05:29,040
 How are we going to have to change that to ensure that we increase our opportunities

1060
01:05:29,040 --> 01:05:31,280
 from an organic recycling standpoint?

1061
01:05:31,280 --> 01:05:35,320
 So there's a lot of moving parts internally that we have to get our arms around, and I

1062
01:05:35,320 --> 01:05:43,440
 think based on with discussions I've had with the effort management here, we're in alignment

1063
01:05:43,440 --> 01:05:48,320
 about where we need to go with this, and again, it will be small steps, but again, there will

1064
01:05:48,320 --> 01:05:51,520
 be critical steps that we will make.

1065
01:05:51,520 --> 01:05:56,680
 And once we get to that point, then we'll be reaching out into the community further.

1066
01:05:56,680 --> 01:05:57,680
 Thank you.

1067
01:05:57,680 --> 01:05:58,680
 Thank you.

1068
01:05:58,680 --> 01:05:59,680
 Other questions?

1069
01:05:59,680 --> 01:06:00,680
 No?

1070
01:06:00,680 --> 01:06:02,800
 Well, I'm impressed.

1071
01:06:02,800 --> 01:06:03,800
 Thank you very much.

1072
01:06:03,800 --> 01:06:04,800
 I appreciate it.

1073
01:06:04,800 --> 01:06:05,800
 All right.

1074
01:06:05,800 --> 01:06:10,680
 I guess that is the last item.

1075
01:06:10,680 --> 01:06:13,680
 So Billy, do we have a motion to adjourn?

1076
01:06:13,680 --> 01:06:16,960
 10.05, we are adjourned.