Jul 11, 2022 Public Utilities Board on 2022-07-11 9:00 AM

Good morning and welcome. I'd like to open the Public Utility Board meeting for the City of Denton on Monday July 2022. It is 9 a.m. First point of order, are there any members from the public that would like to speak or make any comments or ask any questions? Doesn't appear to be so. Is anybody on the phone? No? If not, we'll move on to the regular meeting. And the Consent Agenda. I've had some requests to pull some items. So far I've got A, B, and F. Anybody else? Ben? Item D is in Dog. D is in Dog. I think that's plenty. Would you like to consider items C and E? Oh, I'm sorry. I left the next page off. G is there also. C and E and G. We got three. Chair, who have you got down pulling B? I thought it was C. Well, I'm going to if somebody else didn't want to. I think you did, didn't you? Did you not? I will. You did. Okay. Okay. I did initially too. I was talking with Tony. I looked at the yeah. But I found out what I needed, so. I'd like to pull it. If we pull B, it has to be moved to closed session. Yes. Just making sure you know. Yeah. Okay. All right. Let's try this again. We're going to consider a motion for items C, E, and G. So moved. Second. The motion is second. All those in favor, please say aye. Aye. Any opposed? No. All right. Let's talk about item A. That was you, Lee, right? Can I say you? Yes, sir. I pulled that. I requested item A. He's coming. Okay. Here comes Brian. Good morning. Good morning. So just to restate your question or concern, this is a fairly thick document that we've got here and fairly robust in its plan looking at managing solid waste in the city of Denton over the next 40 plus years. Several of y'all have not been with us throughout this entire process. We started back October a couple of years ago. COVID slowed us down a little bit because we couldn't get together like we would normally do in a planning process. But we're here today to really sort of roll out and get the resolution passed to accept the strategy itself with a focus on diversion. Not transportation diversion, you know, moving waste from one point to another, but diverting waste from being ultimately disposed of. What the strategy outlines is the tools. It's kind of like, you know, the old movie Apollo 13. You know, they get up in space. There's an explosion. They got to get them back to Earth. And they only got so many resources and so many things that they can do. And there was the wonderful line said, well, it wasn't designed to do that. And that's really sort of where we're at now. It's, okay, what can it do? What can we do with the materials we have available to make the necessary elimination of the waste ultimate disposal? Whether it be through traditional recycling, whether it be through non-programmatic recycling, such as textiles, you know, whatever other material that might be out there. So and then looking and partnering with other cities that may be bringing their waste here to become more robust in their diversionary tactics also. Just a couple of minutes ago, y'all approved the new gen cost of service study. That's going to be important for us as we start trying to figure out how much this thing is going to cost. Because again, looking at specifically, you know, how much we have to spend every time we touch a piece of garbage is really important for us to do that. So, you know, going as we go through not only this budget planning session, but also future budget planning sessions that will help us define what these different costs are going to be. Ideally, in a best case scenario, best case world, third party partners throughout the city will be, whether we bring them in through some sort of economic development issues or existing providers here, we'll be managing some of this waste independent of the city of Denton so that we don't have to touch it. So it will be net zero to us at that end. And by doing that, we can keep control on the cost that our residents are having to pay curbside to manage their material. What kind of time frame do you think it's going to take to implement these new programmatic policies? Well, again, it's continual learning is what it is. And one of the good parts about having a strategy versus a plan, it allows us to be much more nimble and much more quick to respond to things such as market forces, designs and technology changes, changes in state law. I mean, currently, we cannot put a bag ban or a bottle deposit bill in place here in the city of Denton or across the state because the Texas State Charter says we can't. They've got privacy on that rule. So again, you know, given those two things that hobble us just a little bit, what are we going to have to do to manage that material moving forward? What kind of incentives might we have to do? How can we create value in this material so that somebody, maybe other than our current processor, Pratt, but somebody like film, Pratt can't take it. So, you know, who would be -- and when I talk about film, I'm talking about plastic sheeting, plastic things of that nature that are not rigid containers. So who can we get in town that will help us collect that, but more importantly process that for ultimate recycling and end use as opposed to disposal. >> Okay. Well, back to my question. Time frame? >> Time frame. Again, this is, as I said earlier, this is a continual process. We've put a couple of really short-term goals and long-term goals. As we had stated earlier in our budget presentation here a couple, three weeks ago, we want to be able to divert, you know, over 30 percent by 2030, 40 percent by 2040, 75 percent by 2075. We feel that these are attainable just because of the time frame that they're in, but also it gives us the time to ramp up, you know, to get some of these programs in place. You know, we're not going to be putting any physical plans or physical programs in place in this next budget year. There's a lot of things administratively that we have to do. We're going to have to change our code of ordinances to help support what's in the plan here. We're going to have to go out with some economic development plans, try to identify third-party providers to come in and manage construction and demolition debris, rock, non-programmatic materials such as textiles, you know, the material that Pratt can't take, you know, glass. Currently, you know, Pratt is doing a wonderful job by managing our glass, but they have to transport it all the way down to Houston for it to be processed. If we can find enough glass here in the North Texas area so that we can get glass processor here in the city of Denton, not only have we reduced emissions from hauling that stuff all the way down to Houston, but we've created jobs, we've created a market, and so that's part of what all of next year will be. And then in 2023, '24, that's when we start putting physical things in place, such as, you know, additional recycling. We're looking at implementing a comprehensive diversion ordinance where everybody will have to recycle in some way, shape, or form. So from commercially, it's not going to be optional anymore, but you're going to tell us how you're going to do it and the material that you have to recycle. So it may be the programmatic stuff that we currently take, you know, bottles, containers, metal cans, things of that nature, or places like Tetrapak and Peterbilt, which, you know, currently have wonderful zero waste type of facilities. So managing that material themselves, they're the experts in what they manage. They can work within their supply chain to manage that, and that's really what we want to leverage through the implementation. You had mentioned about the transportation all the way to Houston for the glass. Yes. By getting something up here, does that also reduce the cost of the recycling? Yes, it does. Because again, you know, every time somebody touches this, every mile that we have to put it on the road, you know, increases the processing cost. Currently, you know, we're very fortunate with our contract with Pratt because currently we don't pay anything for the processing, but many of the cities around here are paying between $75 and $90 a ton just to manage that material so that it can go into processing. So if we can get something here, it significantly reduces that processing cost. When we get out of this current contract with Pratt, I would imagine that we're going to be faced with increased processing charges instead of zero, like we're doing now. So we have to position ourselves right now to be able to manage that material at the lowest possible. In preparation for that. In preparation, correct. Well, thank you. That answers most of my questions, so I'll certainly let some others get a word in edgewise. Mr. Beck? Takes time. Good morning. Good morning. On your waste management hierarchy, you've got source reduction. You were talking about Tetra Pak and what they're doing. Would that be something that would fall into that category? I mean, can you give us kind of a broad? Yeah. I mean, source reduction is much bigger than just taking it off the top and not bringing it to us. I mean, source reduction can even be looking at our own households. So instead of just going through the grocery store, this looks good, this looks good, this looks good. You know, if you make a menu and buy only what you need, then you don't have that bag of salad or a bag of kale that looked really good, but now it's this green mushy thing sitting in the bottom of the refrigerator. So you buy what you need, you buy only what you need, and then you use it all completely. So that's the source reduction. Same thing, you know, as you scale up to something like a Tetra Pak, you know. Most of your things are first in, first out, buy only what you need, use it all, don't have anything else to throw away. Okay. So this is just a concept that can be put out there in the public. We've got to lay on the public that they have some obligations. Correct. You know, and it's not this, this is not the City of Denton's program as a unity. It is a City of Denton cooperative. It's going to be a partnership between residents, commercial businesses, visitors to the city, us as the city actually being the implementing agency to make this happen. Great. Thank you. Kevin. Thank you, Chair. So this, the plan is really thorough. It's amazing. I actually missed the, in April, I believe, we came before the board and I was not able to attend that meeting. And, you know, it's got a lot of great goals and a lot of information. The research depth of Burns and... Burns and McDonnell. Burns and McDonnell. They have amazing resources. And so I have to say, the plan looks beautiful. I think it's very important to reflect on Appendix B, which is the citizen input. Correct. The think tank. And, you know, this, the items in Appendix B, the goals that the citizens want, the vision the citizens like, you know, that's, that's been really consistent since I started participating in citizen stuff in Denton, maybe about 20 years ago, like the citywide comprehensive plan, the 2020 plan, the 2030 plan. Are we on the 2040 plan now? I think. 2040 plan now, yeah. Yeah. So like in 2020, the 2020 plan and the 2030 plan, and I assume the 2040 plan, there was a lot of focus on, we want to be innovators and leaders, you know, and, and I think in our, in our goals, we have to get the data collection put together where we can measure whether or not we're achieving our goals, whether or not we're improving, where we have to have, you have to have the administrative capability to launch new programs, evaluate them, terminate them if necessary, or support them if they're doing well. So there is a bunch of back office work, if you will. So I definitely understand. I think that's, that's great. And I hope we can, this board can support that back office and administrative work. And I do think though, the goals here in the plan will be a starting point to continue to follow the vision of the citizens that, that's been carried for at least 20 years of really innovating and trying to, you know, do the best thing for the citizens cost wise, environmental impact, neighborhood wise, you know, diversion wise, cost of permitting, you know, like when we fill up the landfill again, now we just expanded it, you know, at some point we, you know, we want, this is an important reason for diversion is to make that landfill last as long as possible. You know, at one point, you know, that we've talked about zero waste, and it's perhaps not fully feasible, but it's, I think it's an aspirational goal. We want to not have to keep making new landfills a hundred years from now. And I don't know if we'll get there even in a hundred years. So like I said, the content of this plan is really great. And I just want to make sure that we say this is, this is the starting point and that we can continue to find new ways to divert, to improve our efficiency, to improve our environmental footprint. And, you know, whether it's partnering with external partners or improving internal systems, you know, in the, within the solid waste department. Well, I think you hit the nail right on the head is this is a starting point. And again, it's the strategy, not a plan. Plans are very static. We're going to do, we're going to put this kind of collection in place. But what this allows us to do is look at that data and, and right as you said, be able to evaluate, be very nimble in how we approach the, you know, the, the reduction and the diversion of this material when also thank you for bringing up the comp plan. We went into this sort of arm in arm with the development department to ensure that it was consistent with the planning and the, and the timeframe of the comp plan. In previous comprehensive plans, you've had, you know, we're going to do these sustainability things and these solid waste things. I think one absence that you'll notice in this current comprehensive plan is it doesn't talk about specific solid waste goals, but what it does is it references our solid waste strategy. And just as you said, you know, it serves at that building, that building block, that spring point, spring board, you know, into to continual improvement and growth, you know, talking with the community about what needs to happen and then how we go about implementing some of those programs. Thank you. Very good input. It was a great program. Looks like a really good plan. Thank you. I was telling you that earlier. I really appreciate what you're doing. I appreciate the support that y'all give us here. So thank you. Mr. Rebek. I'd like to move we approve item A. The motion and a second. Any further discussion? If not, all those in favor, please say aye. Any opposed? Item A is passed. Thank you. Thank you. Okay, we're going to move on to item D. D is in dog. See why somebody might have a question on that. Ben. Good morning. Mark Zimmer, DME engineering. Happy to answer any questions you might have. Howdy. Okay. So kind of looking through this. So we've got a retainer for the company and then billable hours for work. It just kind of makes me wonder how does that compare to if we hired staff to do that as the as the city? What's the benefit to us? So staff does not have people capable of performing that type of work, nor do we have the equipment needed to work on the transmission lines. Okay. Just not even an option? Right. Okay. That's a good reason. I think that's all I had actually. It's a lot of money though, Ben. Yeah, yeah. Anybody else? I'm sorry. About how many events per year per 10 years require us to use transmission voltage repair services? Yes. And I've been here for almost 10 years and we've had to use it one time. And so this this $150,000 it's really insurance, right? Just it just ensures they're available in the event we need them. Even though we have contract with them now, it doesn't guarantee they'll be available for work and emergencies. It just kind of guarantees rates, right? So this retainer guarantees them to be available within eight hours with two crews and the equipment needed. Anyone else? Okay. Entertain a motion. Mr. Ryback. Mr. Ryback, second. Any more discussion? If not, all those in favor, please say aye. Aye. Opposed? Passes. Thank you very much. Okay. Item F, as in Frank. Is that was that you, Ben? No, I'm sorry. Good morning. I'm Jerry Field. I'm the engineering division manager for DME. What questions do you have regarding this project? Mr. Ryback. Yes, I was the one who asked to pull this. I was curious if you could just give us a little bit more information about this particular item. And I didn't have anything in specific, but you know, there are some dollars involved and there's a program implementation. I thought perhaps you could tell us a little bit more about it. You bet. I'll do my best without getting into too much ingenuity. Some of you guys may understand it, but we tend to come a little bit more in depth on conversation. But these items are items that we put at the end of all the, or we're going to eventually put at the end of a hundred feeders. And we call them, I'm calling them a bell weather meter. And what it does is it gives us a real time voltage response of what's happening at the end of feeder. Now, from a regulatory standpoint, I have to maintain 114 to 127 volts, but there is this process called conservation voltage reduction, which we artificially lower the voltage on the system. And what that does for us is that reduces actually the amount of power we have to purchase during that timeframe. So we like to keep our four CP days low. And so this is when we typically use this program is yes, sir. What is a CP day? Coincident peak day. Thank you. Yes. So this is an artificial lowering of the voltage during that time. And what this item likes allows us to do is have real time input coming in back to the system. So the folks in the operations operations area are watching the voltage constantly, making sure we don't violate anything. Now, even though I can go down to 114 volts, we keep it at 116. We had that safety factor in there. So what happens if they see anything going below 116, they'll actually jack the voltage back up at the substation. So what we want to do is we've, we put this on six feeders and we had a, um, we had a proof of concept and what we're based upon the savings that we saw with proof of concept, we're expecting that with this at $500 per megawatt hour, we could save about $383,000 per year. So within a couple of years, we've paid for this project just for that standpoint. Um, that number that you came up with is based on current rates. Yes. Based on current and project. Well, based on energy rates. Um, what I'm talking about is what we're being charged through the ERCOT system. It's not really based on the living sense average that we pay or customers pay for kilowatt hour. It's not based on that. That's, that's always going to be a variable, but that's a good point because that's something that we're working on right now, adding into the equation. Um, we're at 11 cents per kilowatt hour. That's about $110 per megawatt hour. So there's some logic that if you go above that $110, we're not making any more money. In fact, we're losing money. So you start lowering the voltage to start saving even more money. So our folks in our EMO are developing lack of a better term, a widget right now to make sure all the buys and sales and everything are equating. And hopefully there'll be a signal that'd be sent out to our folks in the operations center to turn the system on. Again, we've only got a small system in place right now. We're going to try to do it to a full system place. Uh, we've got it over the next three years. It looks like we're planning on spending about $62,000 over the next three years to implement these. So we're going to do about 30 feeders or so a year, a hundred feeders maximum. Okay. So once you get to the hundred meters and you feel like you're going to have a pretty good, um, overview of current consumption and the rate of growth of consumption so that you can make that adjustment. Yeah. And, and the other thing that's going to be happening during this timeframe is we're, we're having RFP and you guys will see it pretty soon for a advanced distribution management system that will make the management of this system much more automated and keep a lot better detail and a record for us to understand what the actual savings is and everything else that we've got going on on the system out there. So it's a really good system. It's, I mean, people have been doing CVR for probably a couple of decades now, so it's not a new phenomenon. Uh, we're just now starting to introduce it here to DME. So first you're going to introduce it, implement it, introduce it and have an operating maybe manually and then down the road, you're intending to make it a more automated process that I understand that correctly. Yes, sir. Yes, sir. In other words, the ADMS system will watch all this stuff and hopefully have an input coming in from the EMO. And when that input comes in, it starts doing everything itself automatically to lower those, that power consumed. Very good. Thank you. If there's no further, we entertain a motion to approve this item. I'll give you a second Lee. All those in favor, please say aye. Aye. Aye. Any opposed? Thank you. Okay. So do I need to go to closed now or do I? I believe we do because I think any questions related to those items will be confidential. So we would call the closed, um, under the competitive matters. We'll just pull it up ahead of the schedule. Okay. Uh, yes. And then to vote on the items, we'll have to come out of class. Okay. I will convene the closed session at nine 24. We will consider the following items deliberations regarding certain public power utilities, competitive matters under Texas government code section 551.086 consultation with attorneys under Texas government code section 551.071. Okay. We're back in open session. It is 1004 a.m. Um, first thing we need to do is vote on the consent item B that was pulled that we discussed in closed session. Anybody like to make a motion to approve motion to approve? Second. Okay. We have been and then Lee any further discussion? There doesn't appear to be any. So all those in favor, please say aye. Aye. Any opposed? Okay. Uh, we discussed do we need, we need to take action on item a from the closed meeting. We don't. Okay. Just discussion. Gotcha. Then we'll move into our work session. For individual consideration. Oh, yeah, I forgot about that. Sorry. Okay. That's that you, David today on items for individual other than consider approval of the minutes. June 27 2022. That's me. Move approval. Second. Please say aye. Aye. Okay. Management reports. Great. Good morning, board. We have the deck dashboard. You can see there for March 2022. I always have a number of me and me staff here to answer any questions you may have on the dashboard. You also see that future agenda items and the new business action items. So, um, are there any questions on the dashboard? Sure. Right back. I have one. It's this appears to only be for the first quarter, January through March. Correct. Yeah. Well, the second quarter of fiscal year, first quarter of the calendar year. Yes. However you want to put it, we are in July. I was surprised we didn't have second quarter or or we didn't have the next quarter's information. Right. It takes a little time for accounting to get everything finalized. So this is typical for our kind of lag timing. Okay. Thank you. Yeah. Here to anything further on that item. Future agenda items. Anyone? Doesn't appear to be there either. Lucky y'all new business action items. You can see the listed there. We still have number two listed. That was obviously complete with the procurement discussion at the last meeting, I believe. Um, we talked about the one meeting versus two meetings a month and we still have one outstanding item anything further doesn't appear to be. So under concluding items, we can now go into our work session. Receive a report, hold a discussion to give staff direction on proposed water, wastewater, solid waste and electric rates for FYI 20 22 23. Good morning, Chair P even members, Nick Vinson, assistant director of finance. I'm gonna do my best to speak up as loud as possible without yelling at you. So if I start yelling, just let me know. So. Okay. So before we get started, just kick it off. We have two presentations for you today. The first presentation will summarize the rate changes for the utilities, the ones that we are proposing this year. After this presentation, we will have a financial discussion for the electric fund. Uh, we'll talk to you about electric a little bit. So for the rate presentation, just a really quick overview. Um, you can see we'll talk about the rate change history. We'll look at some water wholesale rates that we adjust annually as part of the budgeting process. And then we'll look at some proposed wastewater and solid waste rate changes. Okay, so we show this each year as part of the budgeting process. We are proud of this. It shows some rate history. So for any new PB members that may not have seen it before, I'll walk you through it. Um, so you can see from fiscal year 2016 to 2023, any rate changes for the utilities. Um, you can see rate increases here and rate decreases. You can see the last year we had rate increases for residential or commercial customers and the utilities was fiscal year 2017. Uh, since 2017, we've actually had some rate decreases in 2018 through 2021. Um, last couple of years, we have kept rates the same. I know this was something we discussed during the last couple of meetings about possible rate changes in the future, but we're not looking to make any increases to residential or commercial rates this year. So I just want to make sure I pointed that out to the PB. So water wholesale rates, um, these are only two rates we're looking to change in the water utility. Uh, like I'd said earlier, these do update annually as part of the budgeting process. Uh, so the first one being our wholesale raw water rate. Uh, this is, it's set at 85% of the Dallas wholesale rate for water. Uh, so this is currently not available, but we did want to bring it to your attention that we will update this. And this is a contractual agreement that we have that this rate does change annually. Um, the next one is there are raw water pass through rate, uh, which is currently before you move on. I apologize. Oh, I'm sorry. I didn't. Um, so are we actually selling this raw water at these rates? And if so, in general terms to whom, um, probably asked Steven to speak to who we sell the water to. Um, I know we do sell some at these rates, but let me let him speak to the customers. Thank you. Good morning. Uh, Steven gay director of water utilities. Yes, we do sell water to the opportunity water, uh, regional water district, and we use these rates for the raw water. Thank you. Yep. So do they like take from the lake directly or do we pump water to them? They have their own intake. Okay. And that would be all the raw water wholesale. Raw water would probably be somebody who buys just directly out of the lake or river. Okay. Thank you. Yes, sir. Any other questions? Okay. All right. Does anybody else have questions on water? If not, I will move forward. Okay. Um, so wastewater changes looking to make some changes to our dino dirt rates. Um, these are cost of service based adjustments. Just, um, the price of material using to produce this product has gone up. So we are looking to make some increases. The first one being for the pure cubic yard rates of bulk material would increase from 25 to 30 this coming year. And then also we sell bags material. We started this a couple of fiscal years ago. You may remember we are looking to increase those bags from four to $5. So solid waste, we have a few new rates we're looking to introduce and then increasing, uh, maybe an existing rate for unsecured load. So I'll start at the top here, walk you down the list. If you have questions, Eugene is here. He'll be happy to answer, but I definitely get us through the rates part of it. So the first one is an RFID replacement card. We are looking to implement this year. This is new. Uh, this would be issued to people that routinely visit the landfill and it would recognize their vehicle. So, um, that's what this rate is for. Um, the first one is, uh, sorry, go ahead. Um, it is, it's almost like a, I'm trying to think what that stands for. Yeah, absolutely. That's, did you hear that? Radio frequency identification. Yeah. Yeah. Yeah, we should have spelled that out here. Um, the, the next one is the unsecured load. So currently we do charge customers that come into the landfill facility without a cover, a $20 fee. We are looking to increase that to 25. Uh, when they do pay that fee, they would be issued a tarp and some bungee cords to secure their loads. So just wanted to point that out. Uh, we are looking to implement a second or a subsequent unsecured load fee of $30. I mean, you can't see that for you right here. And then looking to, um, implement a wait ticket rate. So for non-cited vehicles of $5. So someone wants their vehicle weighed, we would charge them a rate for that service. Um, the live load fee minimum of 15 minute charge is $75 an hour with a minimum of 15 minutes. Uh, we are looking to implement this year. If a driver has to wait for a customer to load a container, that's what this fee would be for. Then Barbara, did you have a question? No, I, you, you answered that. I was going to ask what a live load would be. And then, uh, construction and demolition rate is $65 a ton. I know Brian had talked to the solid waste comprehensive plan earlier. This does go hand in hand with this trying to divert that material. So I want to make sure we pointed that out. Um, the shingles rate is $125 a ton. We are looking to implement a shingles rate. It is a hard material to handle at the landfill. I know Eugene can talk to it more, but we are looking to get this in rate ordinance. Yeah. I have a question about that. Yeah. So is it, is it actually something you're processing there or you're hiring somebody to process or are you shipping that shingles, the shingles off? Let me ask Eugene to explain their current process. Good morning board members. My name is Eugene McKenna. I'm deputy director of solid waste recycling. I believe the question is, are we processing it there? Yeah. Are you processing it there or are you shipping it off or what? No, currently it comes in and it's landfilled. It's landfilled. Just raw like it comes in. And it's raw. And the strategy will help us identify processors for this. Um, you know, when you materials like shingles and C and D, you know, when you landfill it, you know, the byproduct is methane, right? This creates nothing. It just takes up space in the landfill. So we're talking about some diversion opportunities. So that's where we're at with that. Okay. And so these, these are any, these are always tear offs I would imagine, right? They're not, they're not rejects from the manufacturer. I've never seen that normally, you know, a roofing job and things come in like that, but I've never seen a load of more like rejects. Shingles are recycled into some other product, you know, asphalt and, and absolutely. And the plan will help us identify these companies that will possibly come here and we can find locally that'll help, you know, recycle it. So it gets another life somewhere other than just landfill. Another part of the strategy then. Okay. Absolutely. Okay. Cool. Thank you. This $75, I'm sorry, $125 a ton. Are we going to get that from site a single house? Is there a ton of shingles on one house torn off or is that just a minimum rate no matter what they bring in? Well, that's the minimum what they bring in. Okay. So it's under a ton. Okay. Yes. Thanks. Yes, sir. Since these are proposed for upcoming year, what kind of a total budget impact are we anticipating from these new fees? Well, not sure if that's a Nick question, that he's got all the money in his pocket. Yes, sir. Thank you. I don't have the exact number right now, Mr. Rybak. These are included in the proposed budget that you saw already, but I would think the total impact would be minimal, but we can get that number to you. I don't, I don't have it today though. Thank you. Appreciate it. You're welcome. Okay. We will continue on. So won't go through the calendar again with you. You've seen it again. So next PV meeting, we will be seeking your approval for each of the operating budgets for the utilities and the rates. We are scheduled to present those to city council next Tuesday. So that concludes this presentation. Nick, if I could jump in real quick, I know Nick had that slide at the beginning talking about our rates over the past five years, and we talked about it a little bit in the budget presentations last year, but I just don't want it to be lost as we have these discussions, the fact that we don't have rate increases again this year across utilities. If you just look at articles right now, MOUs out in Texas, especially on the electric side, rates are just increasing for everyone. So it's a really achievement from the staff, from everyone that we have another year of rate increases. So just want to point that out again. All right. And then Billy, that's this item. You may want to call the next item if you don't mind for the electric presentation. Oh, it is another item. Sorry. Yes, sir. Okay. Item work session item B, receive a report, hold a discussion, and give staff direction regarding the electric FY 22-23 preliminary budget, capital improvement program, and five-year financial forecast. Okay. So Nick Vinson again, Assistant Director of Finance, walking through the electric budget presentation. We have removed the operational slides from this presentation. If you have an operational question, of course, there's plenty of DME people would be happy to speak to it. But we'll walk us through the financials, explain some updates that we've had since the last time we talked to you, and then answer any questions that you may have. So this is really just an overview of the presentation. We will talk about the pro forma. We'll look at the pro forma together. I'll point out some changes. We'll look at that fund balance and look at some operating expenses. The capital budget, we did talk in great detail last meeting. If you remember about the capital budget, we'll just hit on it in this presentation with one slide. So if you have questions or want to see a more detailed capital budget, please refer to that book that was submitted to you last time, and we're happy to provide it again if you can't find it. So financial assumptions, we saw this at the last meeting, but just walk you through really quick. So the forecast is based on retail sales, which is megawatt hours. You can see the MWH. Revenue projections of 2 to 3 percent increase, which is consistent across the utilities, something we talked about several times over the last couple meetings. Expenses, we do have the ROI, so the return on investment going to the general fund remaining at 6 percent. I believe we discussed that last time, but I wanted to point that out just in case. The TMRS rate, which is the Texas Municipal Retirement System, that rate increasing from 17.65 to 18.15. So that's something we were notified through our last meeting that we updated on this pro forma. The capital budget, we did change one project that was previously submitted to you. We removed the DME backup center from the capital budget. So that is no longer reflected in here. And then the summer and winter outage insurance premium increase of 900,000. So that was a pretty fairly large increase. We wanted to make sure we pointed that out to you. Mr. Ryback, yes, sir? Yes, I was curious about removing the DME backup center. Is it something that's going to come up then in the future year? So let me ask Mr. Filder, probably the best one to talk about that. Yes, sir. Excuse me. Yes, sir, we did remove it. Other options came out, like maybe spreading this out to kind of an offsite deal or contracting this service out to other folks. That way we can have a little bit of geographical distance between Ditten and wherever the backup data center is. So we're going to hand it back to the budget at this time. Thank you. I would also add to that DME has worked closely with tech services on thinking through the best options, as you already mentioned. So really worked together to come up with different ways to provide the service. Provide that. Gotcha. Thank you. Okay, I will keep going. So supplemental requests, those new initiatives or new positions being requested by this utility, 1.8 million, and I'll point those out to you on the pro forma here shortly. And then you can see the positions that make up the majority of that amount, 11 FTEs this coming fiscal year, and you can see them listed out here at the bottom of the slide. Okay, so the five-year forecast for the electric utility, as I mentioned last time, we do plan in a 10-year window. We are showing you five years here. Just with those purchase power expenses, the further you get out, the less accurate it becomes. So we're showing you five years here, but just want to point out that we do have a 10-year pro forma. So the adopted budget, so the current fiscal year that we are in here, you can see the revenues that we included in the budget of 245.7 million. Expenses of 240.7, so net income of 5 million or 4.9. Going into the end of your estimate, you can see revenues of 308.5 and expenses of 291 million. So one thing I did want to point out, I know there's been a lot of conversation with Terry today about the energy market today and the pricing of such. This pro forma does not reflect those prices, so we will update this and we can always bring it back to you in the future to update you for the end of your estimate. So there is a good possibility that the electric utility will need a budget amendment this fiscal year to accommodate those energy purchases, so just wanted to make sure I said that. Fiscal year 2023, you can see here what we're proposing, so 399.9 million in revenue, that makes that number right here. Expenses of 415.9, so showing the increase in energy purchases, also associated with the data center. So we talked about the data center last time being included, which has increased the revenue and expenses for this upcoming fiscal year. Yes, sir. So what's our current requirement for operating reserve? What percentage are we supposed to be keeping? Great question. So we looked at it last year and actually revised it. I'm sure you remember that the 46% is the minimum and 69% is the max that we'd like to see in there. And then it's down here, Billy, to answer your question. So what does 46% equate to? It's 126.2 and then 189 million for the top. So you can see we're currently at 120.9, is what we're forecasting. Good. That's great. And of course, Mr. Rybeck. You anticipated. Well, I kind of got the side view, I thought you were reaching for it. Well thank you for that. I'm having a little trouble trying to look at the numbers here on my iPad. So is the non-debt service the $37 million number from '21? And the debt is the $17 million or is the debt the no cost? No, the debt service is 17.2 in 2021. And then non-debt, so for those other infrastructure assets that we have, is 37. Yeah. Well, my question actually is about the debt. It appears to be fairly static over the pro forma form. Is there a time frame at which that's going to run out or will we be done paying for it in 10 years, 20 years, seven years, or does anyone know for sure? Do you know the? There was 30 year debt. I'm not so exact. Probably about 28 years left or 27. I'm at the top of my head. Thank you. Yeah. We can get that date to you. Not terribly important. I was just captured by curiosity that it seemed to be pretty static. I was like, okay, that's long term debt. So I wondered what the time frame. It actually is 20 year debt because we did revenue bonds for that. So it's about 17 years, I would guess, left on that. Okay. So that's from, that's the debt repayment for the bond. Correct. Thank you. Yeah. For the construction of that facility. Yeah. Okay. Perfect. So the T cost is still based on 30 year debt no matter how we structure our own debt, right? Well, that's part of the discussion we're having right now as we go through the rate case, but it is tied to that. Okay. That's probably closed session. Yeah. Sorry. Yeah. I was looking at David for that one. I was like, I don't know how you want to answer it. Okay. So the forecast here, so 0% rate increases for this year. I just wanted to mention, you know, in the future if purchase power expenses do stay the way we're seeing them currently, we may have to talk about the rate structure with the PV next year and that ECA rate. So just wanted to mention that it is reflected on the pro forma here, but just wanted to put that out there for you. So I'll move on unless you have questions. So the capital budget really high level here. Like I said, we got into the detail of it last meeting, but just wanted to recap it really quick since we removed that data center project. So 72.9 million in debt funded projects, revenue funding about 1.1, aid in construction. So from some contributions from different projects around the city for 79.7 million in 2023. And here is a summary and how it breaks out into the different categories. So we do put it into categories to help us with tracking and some of our T cost return items. So we just wanted to be sure to point it out. So you can see we do have several different things here. Distribution substations, distribution transformers, some new residential commercial budgeted and then you can see transmission down here at the second portion of the table for 28.2. And this is the table or the calendar. I won't go through it again with you, but it is here for your reference. And that is the end of the presentation. Any questions on electric? >> Do you have a question, Barbara? Your lights on. That's why I'm asking. No? Okay. Anyone? I think we got them all out. Thank you. >> Perfect. Thank you. >> That's all we have today. And for the first time I'm going to let somebody else make the motion to adjourn. Mr. Beck, we're all in. I think that's all it requires anyway.