1 00:00:00,000 --> 00:00:01,840 Okay. Good morning. 2 00:00:01,840 --> 00:00:03,840 It's 9.01 and we do have a quorum, 3 00:00:03,840 --> 00:00:05,400 so we'll call to order the City of 4 00:00:05,400 --> 00:00:07,760 Denton Public Utilities Board for Monday, 5 00:00:07,760 --> 00:00:09,880 September 12th, 2020. 6 00:00:09,880 --> 00:00:13,240 The first item is presentations from members of the public. 7 00:00:13,240 --> 00:00:17,360 Is anyone from the public wishing to speak this morning? 8 00:00:17,360 --> 00:00:21,920 Okay. Seeing none, the next item is consent agenda. 9 00:00:21,920 --> 00:00:24,760 Does any board member wish to remove an item A 10 00:00:24,760 --> 00:00:28,120 through F on the consent agenda? 11 00:00:30,200 --> 00:00:32,000 I see none. 12 00:00:32,000 --> 00:00:35,760 Do we have a motion to approve the consent agenda? 13 00:00:35,760 --> 00:00:39,040 So Mr. Rybeck moves. 14 00:00:39,040 --> 00:00:44,440 Ben seconds. I just had a memory loss on your last name. 15 00:00:44,440 --> 00:00:46,080 All in favor say aye. 16 00:00:46,080 --> 00:00:47,000 Aye. 17 00:00:47,000 --> 00:00:48,240 Motion carries. 18 00:00:48,240 --> 00:00:49,680 Aye for me too. 19 00:00:49,680 --> 00:00:53,760 Next item is consider approval of the August 22nd minutes. 20 00:00:53,760 --> 00:00:56,880 Were there any corrections to the minutes? 21 00:00:56,880 --> 00:01:01,400 Seeing none, do we have a motion to approve the minutes? 22 00:01:01,400 --> 00:01:05,040 Devin's moved and Larry second. 23 00:01:05,040 --> 00:01:06,320 All in favor say aye. 24 00:01:06,320 --> 00:01:07,120 Aye. 25 00:01:07,120 --> 00:01:11,040 Carries. The next three items we're going to call all at once 26 00:01:11,040 --> 00:01:14,880 since they're all regarding the same haulers contracts. 27 00:01:14,880 --> 00:01:16,760 Mr. Boehner. 28 00:01:16,760 --> 00:01:18,880 Good morning. I'm Brian Boehner. 29 00:01:18,880 --> 00:01:21,520 I am the Director of Solid Waste for the City of Denton, 30 00:01:21,520 --> 00:01:23,720 and I appreciate the opportunity today to talk about 31 00:01:23,720 --> 00:01:25,640 the waste hauler agreements that are before 32 00:01:25,640 --> 00:01:28,200 you for consideration. 33 00:01:28,200 --> 00:01:31,520 A little bit of just a primer real quick. 34 00:01:31,520 --> 00:01:33,160 What is a waste hauler agreement? 35 00:01:33,160 --> 00:01:35,480 In the industry we call it a put or pay contract, 36 00:01:35,480 --> 00:01:36,560 and that's really what it is. 37 00:01:36,560 --> 00:01:41,520 We contract with private haulers to put a defined amount 38 00:01:41,520 --> 00:01:46,360 of volume into the landfill at a set price, 39 00:01:46,360 --> 00:01:48,000 whether they put it there or not. 40 00:01:48,000 --> 00:01:51,760 So just say for example we have 100 tons that they're going 41 00:01:51,760 --> 00:01:55,520 to guarantee us for $100 even if they only 42 00:01:55,520 --> 00:01:58,440 deliver 90 tons they still owe us the $100. 43 00:01:58,440 --> 00:02:02,960 So what it does is it really guarantees and allows us 44 00:02:02,960 --> 00:02:06,560 to do some things from a revenue standpoint. 45 00:02:06,560 --> 00:02:09,040 First of all guaranteed revenue stream. 46 00:02:09,040 --> 00:02:12,200 So we're not always concerned about what's coming in, 47 00:02:12,200 --> 00:02:13,040 what's going out. 48 00:02:13,040 --> 00:02:15,880 On a monthly basis it's stabilized. 49 00:02:15,880 --> 00:02:19,240 Secondarily it stabilizes the rates for the residents. 50 00:02:19,240 --> 00:02:24,240 So again our residents are able to enjoy the benefit 51 00:02:25,400 --> 00:02:28,080 of the resource and the asset that we have. 52 00:02:28,080 --> 00:02:29,960 And really it aids us in long term planning 53 00:02:29,960 --> 00:02:34,120 for our operations such as staffing, equipment purchases, 54 00:02:34,120 --> 00:02:36,040 trying to prepare for growth. 55 00:02:36,040 --> 00:02:40,120 From a history standpoint operating as a regional facility 56 00:02:40,120 --> 00:02:45,120 since 1985 we have always accepted waste from waste haulers. 57 00:02:45,120 --> 00:02:46,960 Certain waste haulers had accounts 58 00:02:46,960 --> 00:02:49,760 and had beneficial rate preferences 59 00:02:49,760 --> 00:02:52,840 but it was never codified, never put into a contract. 60 00:02:52,840 --> 00:02:54,240 Just you got it. 61 00:02:54,240 --> 00:02:56,800 About three years ago what we did is we went ahead 62 00:02:56,800 --> 00:02:59,600 and tried to put this actually into a contract, 63 00:02:59,600 --> 00:03:01,920 a little more equitable standpoint, 64 00:03:01,920 --> 00:03:06,800 actually treated the capacity as an asset 65 00:03:06,800 --> 00:03:08,200 and put it out on the open market. 66 00:03:08,200 --> 00:03:10,840 And at that point we had four contractors, 67 00:03:10,840 --> 00:03:13,240 haulers that stepped forward and two entities 68 00:03:13,240 --> 00:03:16,360 that we entered into three year contracts with. 69 00:03:16,360 --> 00:03:18,000 At that time we didn't set a ceiling 70 00:03:18,000 --> 00:03:19,400 on how much waste we wanted. 71 00:03:19,400 --> 00:03:22,360 It was like okay you tell us how much capacity you need, 72 00:03:22,360 --> 00:03:23,760 how much you're gonna pay for it. 73 00:03:23,760 --> 00:03:26,360 And really and that's what you delivered. 74 00:03:26,360 --> 00:03:28,600 So we had a significant amount of material 75 00:03:28,600 --> 00:03:30,920 that was coming into the landfill. 76 00:03:30,920 --> 00:03:32,000 But the thing about it was 77 00:03:32,000 --> 00:03:33,520 even though there were recycling programs 78 00:03:33,520 --> 00:03:35,840 that were going on with these programs 79 00:03:35,840 --> 00:03:37,240 and these waste haulers were bringing in, 80 00:03:37,240 --> 00:03:38,520 we didn't know what they were. 81 00:03:38,520 --> 00:03:40,920 We didn't know how much material was being diverted. 82 00:03:40,920 --> 00:03:43,120 So really there was no incentive to recycle. 83 00:03:43,120 --> 00:03:46,240 It was open market for lack of a better term. 84 00:03:46,240 --> 00:03:49,560 As a result of these three year contracts 85 00:03:49,560 --> 00:03:50,520 couple things happened. 86 00:03:50,520 --> 00:03:52,360 First of all we significantly paid down 87 00:03:52,360 --> 00:03:55,840 our outstanding debt, got our finances under control. 88 00:03:55,840 --> 00:03:59,080 Secondarily as we continue to discuss 89 00:03:59,080 --> 00:04:01,760 we were able to reduce residential rates. 90 00:04:01,760 --> 00:04:03,440 So those of you who are, 91 00:04:03,440 --> 00:04:05,200 everybody here is a city of Denton resident. 92 00:04:05,200 --> 00:04:06,560 So hopefully over the past three years 93 00:04:06,560 --> 00:04:09,440 you noticed that we dropped the rate four or five dollars 94 00:04:09,440 --> 00:04:12,280 and really we continue to work 95 00:04:12,280 --> 00:04:16,280 to maintain that rate structure. 96 00:04:16,280 --> 00:04:19,480 - Say Brian before you move on I'm sorry to interrupt. 97 00:04:19,480 --> 00:04:23,880 So you mentioned that we significantly paid down our debt. 98 00:04:23,880 --> 00:04:25,600 What is the history of that debt 99 00:04:25,600 --> 00:04:28,240 just for informational purposes? 100 00:04:28,240 --> 00:04:29,640 - When you ask about history 101 00:04:29,640 --> 00:04:31,800 what did that debt go for? 102 00:04:31,800 --> 00:04:34,320 Yeah, there were some property purchases 103 00:04:34,320 --> 00:04:36,840 we made for our expansion. 104 00:04:36,840 --> 00:04:38,480 There were several programs also 105 00:04:38,480 --> 00:04:40,720 that were envisioned at that point 106 00:04:40,720 --> 00:04:42,520 that required a lot of machinery, 107 00:04:42,520 --> 00:04:44,360 a lot of upfront costs 108 00:04:44,360 --> 00:04:48,880 that were never put into practice. 109 00:04:48,880 --> 00:04:50,760 Or they shut down rather rapidly 110 00:04:50,760 --> 00:04:53,160 so we had this long term debt piece 111 00:04:53,160 --> 00:04:55,000 but really no operation to offset it. 112 00:04:55,000 --> 00:04:57,280 So really that's what we were trying to control. 113 00:04:57,280 --> 00:04:58,120 - Thank you. 114 00:04:58,120 --> 00:04:58,960 - Thank you. 115 00:04:58,960 --> 00:05:02,280 So over these past three years 116 00:05:02,280 --> 00:05:03,560 we've been listening to the community, 117 00:05:03,560 --> 00:05:05,680 listening to council, listening to people. 118 00:05:05,680 --> 00:05:07,560 And there's always been the argument about 119 00:05:07,560 --> 00:05:10,520 well you're filling up the landfill, you're losing life. 120 00:05:10,520 --> 00:05:13,760 Well in these three years 121 00:05:13,760 --> 00:05:16,720 the contracts that were brought in 122 00:05:16,720 --> 00:05:20,520 we lost approximately 90 days of life per year. 123 00:05:20,520 --> 00:05:23,920 So about three quarters of a year of landfill life 124 00:05:23,920 --> 00:05:26,400 of the 55 years that we currently have 125 00:05:26,400 --> 00:05:28,760 was lost as a result of these contracts. 126 00:05:28,760 --> 00:05:31,320 And again this waste would have come here anyway 127 00:05:31,320 --> 00:05:32,680 or a majority of it would. 128 00:05:32,680 --> 00:05:36,440 So it's kind of a, it's a non-equitable comparison 129 00:05:36,440 --> 00:05:40,280 but again that's what the waste accounts for. 130 00:05:40,280 --> 00:05:43,520 There was a concern about increase in landfill traffic. 131 00:05:43,520 --> 00:05:46,920 Currently we're averaging about 500 transaction a day total. 132 00:05:46,920 --> 00:05:49,440 25% of that comes from these waste haulers. 133 00:05:49,440 --> 00:05:52,560 Another 25% comes from our city of Denton operation. 134 00:05:52,560 --> 00:05:55,960 What's interesting is that 50% of the people 135 00:05:55,960 --> 00:05:58,240 that come across the scale day in and day out 136 00:05:58,240 --> 00:06:00,360 are actually cash customers. 137 00:06:00,360 --> 00:06:02,080 They're either the independent landscapers, 138 00:06:02,080 --> 00:06:04,400 independent contractors bringing material to us 139 00:06:04,400 --> 00:06:06,200 or it's the mom and pops that are just cleaning out 140 00:06:06,200 --> 00:06:10,960 the garage that you know need to get rid of material. 141 00:06:10,960 --> 00:06:15,720 A little side note here, keeping involved in the industry 142 00:06:15,720 --> 00:06:18,320 people were wringing their hands over COVID. 143 00:06:18,320 --> 00:06:20,280 We are locked down, we're not gonna see the waste, 144 00:06:20,280 --> 00:06:21,520 it's gonna affect us. 145 00:06:21,520 --> 00:06:23,440 No, landfill traffic shot up 146 00:06:23,440 --> 00:06:25,600 because you can only mow the yard so much, 147 00:06:25,600 --> 00:06:28,320 you can only weed the petunia bed so much. 148 00:06:28,320 --> 00:06:29,160 What are you gonna do? 149 00:06:29,160 --> 00:06:30,320 You're gonna clean out the garage. 150 00:06:30,320 --> 00:06:32,960 So we just saw a lot of material coming in 151 00:06:32,960 --> 00:06:34,840 over that COVID period. 152 00:06:34,840 --> 00:06:36,600 So and that adds into that 153 00:06:36,600 --> 00:06:39,320 and we haven't really seen that plateau or drop off. 154 00:06:39,320 --> 00:06:41,680 That number continues to rise. 155 00:06:41,680 --> 00:06:44,640 So again as an asset with the growth that's happening 156 00:06:44,640 --> 00:06:46,800 in this area, you see it coming up through Frisco, 157 00:06:46,800 --> 00:06:49,640 through Argyle, it's sandwiching us in here 158 00:06:49,640 --> 00:06:51,440 and people are coming bringing us materials 159 00:06:51,440 --> 00:06:52,840 as they're getting ready to move. 160 00:06:52,840 --> 00:06:56,560 So also another concern was the contract link. 161 00:06:56,560 --> 00:06:58,960 We went from three years in this proposal 162 00:06:58,960 --> 00:07:02,000 to two years as we move forward. 163 00:07:02,000 --> 00:07:05,720 Historically or currently what's in this proposal 164 00:07:05,720 --> 00:07:09,960 or notice of intent that was issued 8005. 165 00:07:09,960 --> 00:07:12,720 What we did is instead of setting an open market, 166 00:07:12,720 --> 00:07:15,680 we decided to put a ceiling or excuse me, 167 00:07:15,680 --> 00:07:16,840 I'm getting ahead of myself. 168 00:07:16,840 --> 00:07:18,880 What we decided to do is recognize the asset 169 00:07:18,880 --> 00:07:21,240 of the landfill itself. 170 00:07:21,240 --> 00:07:22,360 Under the previous contracts, 171 00:07:22,360 --> 00:07:25,160 we set the floor at $27 a ton. 172 00:07:25,160 --> 00:07:28,480 We realized very quickly we significantly underbid 173 00:07:28,480 --> 00:07:29,600 that asset that we have. 174 00:07:29,600 --> 00:07:33,800 So we raised the minimum bid to $35 a ton delivered. 175 00:07:33,800 --> 00:07:36,680 We recognized the asset but also we had to remain 176 00:07:36,680 --> 00:07:38,920 cost competitive in the region. 177 00:07:38,920 --> 00:07:41,720 There are basically three or four other facilities 178 00:07:41,720 --> 00:07:46,720 in this area and that puts us in direct cost equality 179 00:07:46,720 --> 00:07:49,840 with them so it then just becomes transportation 180 00:07:49,840 --> 00:07:52,360 which facility is closer and at that point, 181 00:07:52,360 --> 00:07:54,200 City of Denton wins out. 182 00:07:54,200 --> 00:07:56,560 Secondly, we put a ceiling on disposal tons. 183 00:07:56,560 --> 00:07:58,400 In the old contracts, we basically said, 184 00:07:58,400 --> 00:07:59,680 you tell us what you're gonna bring us 185 00:07:59,680 --> 00:08:00,880 and we'll contract with you. 186 00:08:00,880 --> 00:08:03,600 This time we said no, we're gonna put a cap on it. 187 00:08:03,600 --> 00:08:06,760 So instead of almost 200,000 tons a year 188 00:08:06,760 --> 00:08:08,480 that we're currently bringing in, 189 00:08:08,480 --> 00:08:10,960 we set that ceiling of 125,000. 190 00:08:10,960 --> 00:08:15,960 So really just 60% of what we're currently taking in. 191 00:08:15,960 --> 00:08:18,920 What we did do though is put some skin in the game 192 00:08:18,920 --> 00:08:20,200 for the waste haulers. 193 00:08:20,200 --> 00:08:22,200 What we wanna be able to do again is recognize 194 00:08:22,200 --> 00:08:23,600 that diversion that's currently out there 195 00:08:23,600 --> 00:08:26,960 but also incentivize additional opportunities to divert. 196 00:08:26,960 --> 00:08:29,200 So if you need additional capacity, 197 00:08:29,200 --> 00:08:33,400 you're not just going to get another 10, 15% next year 198 00:08:33,400 --> 00:08:34,880 as part of the contract, 199 00:08:34,880 --> 00:08:36,320 you're gonna have to show us why you need it. 200 00:08:36,320 --> 00:08:38,560 So if you can divert, let's say, 201 00:08:38,560 --> 00:08:40,320 let's put that 100 ton example out there. 202 00:08:40,320 --> 00:08:43,840 Let's say you can divert 10 more tons to recycling, 203 00:08:43,840 --> 00:08:45,680 that gives you 10 more tons of capacity. 204 00:08:45,680 --> 00:08:49,520 So you divert the recycling, that gives you 110 tons 205 00:08:49,520 --> 00:08:53,160 and again, so you're working, we get the benefit 206 00:08:53,160 --> 00:08:56,720 and then most importantly is we get to recognize, 207 00:08:56,720 --> 00:08:58,000 first of all, who your customers are 208 00:08:58,000 --> 00:09:00,360 but secondarily, what's actually being diverted 209 00:09:00,360 --> 00:09:02,840 and we can show that as the diversion number 210 00:09:02,840 --> 00:09:04,640 from the City of Denton Landfill. 211 00:09:04,640 --> 00:09:06,400 Mr. Beck. - Yeah, Ryan, thanks. 212 00:09:06,400 --> 00:09:12,520 I'm glad to see that the recycling incentive is there 213 00:09:12,520 --> 00:09:16,240 but I guess it's also saying that they don't have to, 214 00:09:16,240 --> 00:09:18,840 they just kind of lose out on this discount if they don't. 215 00:09:18,840 --> 00:09:20,120 Is that right? 216 00:09:20,120 --> 00:09:21,760 - Potentially yes. - Okay. 217 00:09:21,760 --> 00:09:23,120 - But again, I've talked to all these guys 218 00:09:23,120 --> 00:09:24,240 and they're excited about it. 219 00:09:24,240 --> 00:09:26,440 It's like, it makes a whole lot of sense. 220 00:09:26,440 --> 00:09:28,000 A lot of the stuff we're currently doing, 221 00:09:28,000 --> 00:09:30,000 we wanna be able to be recognized for it, 222 00:09:30,000 --> 00:09:33,040 put that shit in our bin 223 00:09:33,040 --> 00:09:34,480 but also it gives them an opportunity 224 00:09:34,480 --> 00:09:36,320 to look at some other programs, 225 00:09:36,320 --> 00:09:38,800 whether it's curbside recycling 226 00:09:38,800 --> 00:09:40,920 and again, we're talking about not just recycling, 227 00:09:40,920 --> 00:09:42,640 we're talking about diversion. 228 00:09:42,640 --> 00:09:45,400 So recycling is again, is that programmatic material 229 00:09:45,400 --> 00:09:46,440 in the bin by the curb 230 00:09:46,440 --> 00:09:49,960 but again, you can divert yard waste, 231 00:09:49,960 --> 00:09:52,400 you can divert electronics, you can divert appliances. 232 00:09:52,400 --> 00:09:53,920 So if you've got programs out there 233 00:09:53,920 --> 00:09:55,840 that manage that other material 234 00:09:55,840 --> 00:09:57,160 that we would potentially receive 235 00:09:57,160 --> 00:09:58,280 and would go into the landfill, 236 00:09:58,280 --> 00:10:01,520 then by all means, let's give you credit for it. 237 00:10:01,520 --> 00:10:05,080 - And it looks like based on lowering your tonnage per year 238 00:10:05,080 --> 00:10:07,040 and going from a three to two year contract 239 00:10:07,040 --> 00:10:09,840 that there's some concern that, 240 00:10:09,840 --> 00:10:13,560 well, I would ask is this likely not to be sustainable 241 00:10:13,560 --> 00:10:16,720 long down the road where we can't take care of our own or? 242 00:10:16,720 --> 00:10:18,680 - No, no, that's not the reason. 243 00:10:18,680 --> 00:10:19,720 - Okay. 244 00:10:19,720 --> 00:10:22,400 - Recently, y'all approved our City of Denton's 245 00:10:22,400 --> 00:10:24,760 comprehensive solid waste management strategy 246 00:10:24,760 --> 00:10:26,040 and really what we're doing right now 247 00:10:26,040 --> 00:10:27,400 in these first couple of years 248 00:10:27,400 --> 00:10:29,280 is starting to spin up programs 249 00:10:29,280 --> 00:10:33,680 and part of that will be managed through some regionalization 250 00:10:33,680 --> 00:10:36,400 of some processes that we're gonna be proposing 251 00:10:36,400 --> 00:10:38,200 such as our home chemical collection. 252 00:10:38,200 --> 00:10:40,360 Right now, we're the only city 253 00:10:40,360 --> 00:10:42,880 basically in Denton County, possibly Frisco 254 00:10:42,880 --> 00:10:45,880 that offers a home chemical collection 255 00:10:45,880 --> 00:10:48,320 but we've got a bunch of small cities in this area. 256 00:10:48,320 --> 00:10:50,880 So we want to be able to take that type of material, 257 00:10:50,880 --> 00:10:52,880 recognize that diversion. 258 00:10:52,880 --> 00:10:54,720 Looking at yard waste programs, 259 00:10:54,720 --> 00:10:56,560 I know that in talking with our partners 260 00:10:56,560 --> 00:10:58,360 over at the water and wastewater plant, 261 00:10:58,360 --> 00:11:01,160 we've got this terrific program called Dino Dirt 262 00:11:01,160 --> 00:11:02,360 but we could really grow that 263 00:11:02,360 --> 00:11:04,120 and if we're gonna be feeding food waste into that, 264 00:11:04,120 --> 00:11:06,720 we need more yard waste to help brown and green 265 00:11:06,720 --> 00:11:09,640 the compost mixture. 266 00:11:09,640 --> 00:11:10,840 So again, working with them 267 00:11:10,840 --> 00:11:13,000 to actually have yard waste diversion programs 268 00:11:13,000 --> 00:11:14,120 instead of sending it. 269 00:11:14,120 --> 00:11:16,400 Think about construction demolition debris, 270 00:11:16,400 --> 00:11:18,800 boards that are this long that are going to landfill 271 00:11:18,800 --> 00:11:19,720 but they're perfectly good. 272 00:11:19,720 --> 00:11:22,080 If we can find a contractor 273 00:11:22,080 --> 00:11:23,720 that wants those short pieces of board 274 00:11:23,720 --> 00:11:26,000 to make chipboard or whatever else out of. 275 00:11:26,000 --> 00:11:27,080 So these are the type of things 276 00:11:27,080 --> 00:11:28,480 that we want to be able to recognize. 277 00:11:28,480 --> 00:11:30,760 And if we put a three-year contract, 278 00:11:30,760 --> 00:11:32,400 it may be too far down the line 279 00:11:32,400 --> 00:11:33,560 to be able to roll that in 280 00:11:33,560 --> 00:11:35,020 but a two-year it gives us time 281 00:11:35,020 --> 00:11:36,800 to put these programs in place 282 00:11:36,800 --> 00:11:40,200 so that when the next two years start, 283 00:11:40,200 --> 00:11:42,400 we can actually give you some benefit 284 00:11:42,400 --> 00:11:44,280 and maybe even use our asset here 285 00:11:44,280 --> 00:11:46,880 to drive more material that way economically. 286 00:11:46,880 --> 00:11:48,120 - Okay, thanks. 287 00:11:48,120 --> 00:11:48,960 - Thank you. 288 00:11:48,960 --> 00:11:50,080 - Mr. Rybeck, go ahead. 289 00:11:50,080 --> 00:11:51,880 - Go ahead. 290 00:11:51,880 --> 00:11:53,720 - Okay, I thought you were looking over there. 291 00:11:53,720 --> 00:11:55,360 I love the allowance program. 292 00:11:55,360 --> 00:11:57,880 I think as part of this program, that's a great idea. 293 00:11:57,880 --> 00:12:01,800 Why the 10% cap and you could incentivize them more, 294 00:12:01,800 --> 00:12:03,680 20%, 25%? 295 00:12:03,680 --> 00:12:05,280 - We could, we could. 296 00:12:05,280 --> 00:12:07,160 But I think part of it was let's get our, 297 00:12:07,160 --> 00:12:09,560 let's, you know, the rule of nature is you crawl, 298 00:12:09,560 --> 00:12:11,080 you walk, you run. 299 00:12:11,080 --> 00:12:13,400 And so let's crawl here, see what it is 300 00:12:13,400 --> 00:12:15,040 and then, you know, get our hands up. 301 00:12:15,040 --> 00:12:17,080 And if it needs to be bigger than the next two years, 302 00:12:17,080 --> 00:12:19,320 we can incentivize that even more. 303 00:12:19,320 --> 00:12:20,500 - And again, with the two years, 304 00:12:20,500 --> 00:12:24,000 we have that time to look at what we've done at 10%. 305 00:12:24,000 --> 00:12:24,840 - Exactly. 306 00:12:24,840 --> 00:12:27,800 - So we can go to 20 or 25 based on real data. 307 00:12:27,800 --> 00:12:30,000 - And in reality, I don't think that they're going to say, 308 00:12:30,000 --> 00:12:31,720 well, here's just the 10%. 309 00:12:31,720 --> 00:12:32,720 They're gonna come in and say, 310 00:12:32,720 --> 00:12:36,240 okay, we were able to divert 45%. 311 00:12:36,240 --> 00:12:37,200 So when you're looking, you know, 312 00:12:37,200 --> 00:12:38,520 so we get a, you know, 313 00:12:38,520 --> 00:12:40,120 what is actually happening in the market, 314 00:12:40,120 --> 00:12:43,000 but also it gives us the opportunity to understand 315 00:12:43,000 --> 00:12:46,040 what those drivers are in the private sector, 316 00:12:46,040 --> 00:12:48,040 those people that have private companies 317 00:12:48,040 --> 00:12:49,320 picking up things at the curb. 318 00:12:49,320 --> 00:12:51,640 It allows us to try to work with them 319 00:12:51,640 --> 00:12:53,800 to widen the market, so to speak. 320 00:12:55,800 --> 00:12:57,000 - Go ahead. 321 00:12:57,000 --> 00:12:58,560 - Thank you. 322 00:12:58,560 --> 00:13:02,320 So I found that the page in the con, 323 00:13:02,320 --> 00:13:04,640 the, I guess this is in the bid, 324 00:13:04,640 --> 00:13:07,960 perhaps it's in the bid about talking about this-- 325 00:13:07,960 --> 00:13:08,800 - 10%. 326 00:13:08,800 --> 00:13:09,640 - 10%-- - Yes. 327 00:13:09,640 --> 00:13:13,320 - Diverted allowance, I'm not quite understanding. 328 00:13:13,320 --> 00:13:18,320 So is that like, they have a, you know, 329 00:13:18,320 --> 00:13:20,320 50,000 ton a year, or we'll do the 100, 330 00:13:20,320 --> 00:13:23,920 100 ton a year allowance in the contract. 331 00:13:23,920 --> 00:13:26,200 They divert, is it a one for one? 332 00:13:26,200 --> 00:13:29,600 They divert 10 tons, they get that additional 10 tons? 333 00:13:29,600 --> 00:13:31,360 - Yes, it is net, so net 10 tons. 334 00:13:31,360 --> 00:13:36,360 So let's say you take 30 tons to the Murph, 335 00:13:36,360 --> 00:13:41,040 but 20 tons of it is contaminated 336 00:13:41,040 --> 00:13:43,200 and goes out the back end and goes to the landfill. 337 00:13:43,200 --> 00:13:46,360 They only get credit for the 10 tons that is net recycled. 338 00:13:46,360 --> 00:13:49,000 So it's not the 30 tons, it's the 10 tons. 339 00:13:49,000 --> 00:13:53,640 - And then they, so now they're putting 110 tons 340 00:13:53,640 --> 00:13:56,840 in the landfill, some 10 or 20 at the Murph, 341 00:13:56,840 --> 00:13:57,680 something like that. 342 00:13:57,680 --> 00:13:58,520 - Correct. 343 00:13:58,520 --> 00:14:01,320 - And they're still paying the $35 or whatever 344 00:14:01,320 --> 00:14:03,320 contract rate for that additional? 345 00:14:03,320 --> 00:14:04,400 - 10 tons, correct. 346 00:14:04,400 --> 00:14:07,080 - And the Murph, is that also billed, 347 00:14:07,080 --> 00:14:10,080 or is that like free or discounted or its own rate? 348 00:14:10,080 --> 00:14:14,720 - That is the private, that is their private contract 349 00:14:14,720 --> 00:14:16,040 with whatever it is. 350 00:14:16,040 --> 00:14:19,080 I will tell you that from an industry standard right now, 351 00:14:19,080 --> 00:14:23,040 most people are paying between 65 and $95 a ton 352 00:14:23,040 --> 00:14:25,400 to process material through a Murph. 353 00:14:25,400 --> 00:14:30,160 It's not cheap, but again, from a conservation standpoint, 354 00:14:30,160 --> 00:14:31,400 people are willing to pay that. 355 00:14:31,400 --> 00:14:33,720 But again, you've got revenue on the back end, 356 00:14:33,720 --> 00:14:35,480 as long as the market's up, you know, 357 00:14:35,480 --> 00:14:38,320 you're not technically paying quite that much. 358 00:14:38,320 --> 00:14:40,440 - And so basically they pay $65 a ton 359 00:14:40,440 --> 00:14:44,160 and they get palletized material they could sell, 360 00:14:44,160 --> 00:14:45,360 something like that. 361 00:14:45,360 --> 00:14:49,200 - Yeah, but the Murph operators are all private sector. 362 00:14:49,200 --> 00:14:52,480 So they have the paper market and the plastics and the glass, 363 00:14:52,480 --> 00:14:54,080 they've got places to send this. 364 00:14:54,080 --> 00:14:55,720 - Okay, and they don't have to bring it to our Murph, 365 00:14:55,720 --> 00:14:56,840 they just have to prove they're taking it 366 00:14:56,840 --> 00:14:59,880 to some diversion, some approved diversion. 367 00:14:59,880 --> 00:15:01,760 - Yeah, and they can't just send us a letter saying, 368 00:15:01,760 --> 00:15:03,880 here's what we did, we've got to have the Murph reports, 369 00:15:03,880 --> 00:15:06,960 the public reports, they get back from the Murph 370 00:15:06,960 --> 00:15:09,040 that shows what that balance is. 371 00:15:09,040 --> 00:15:10,800 - Okay, and that, and it is a one for one though, 372 00:15:10,800 --> 00:15:13,400 10 tons over here equals 10 tons. 373 00:15:13,400 --> 00:15:15,840 - It is a one for one, correct, up to 10 tons. 374 00:15:15,840 --> 00:15:16,680 - Thank you. 375 00:15:16,680 --> 00:15:18,360 - Okay, yes sir. 376 00:15:18,360 --> 00:15:20,320 - Just keep rolling here. 377 00:15:20,320 --> 00:15:24,040 All right, so I went to the landfill 378 00:15:24,040 --> 00:15:25,920 for the first time recently myself, 379 00:15:25,920 --> 00:15:27,840 and I'm pretty sure I know the answer to this question, 380 00:15:27,840 --> 00:15:29,600 but just to ask it for the record, 381 00:15:29,600 --> 00:15:34,600 is it possible to divert anything after customers 382 00:15:34,600 --> 00:15:37,520 put it in the pile? 383 00:15:37,520 --> 00:15:40,240 I know, I know. 384 00:15:40,240 --> 00:15:43,400 I mean, for example, so when I was there, 385 00:15:43,400 --> 00:15:47,680 I saw a lot of electronics, TVs, furniture, desks, chairs, 386 00:15:47,680 --> 00:15:51,120 wood scraps, things that could be used or refurbished 387 00:15:51,120 --> 00:15:53,520 had it been put somewhere else, 388 00:15:53,520 --> 00:15:58,520 is it even remotely feasible to somehow divert that? 389 00:15:58,520 --> 00:16:02,440 - It is feasible, but before it reaches the working face. 390 00:16:02,440 --> 00:16:04,000 Once material hits the working face 391 00:16:04,000 --> 00:16:06,920 and touches the tipping floor, it is considered trash. 392 00:16:06,920 --> 00:16:09,600 It is probably the most unsafe thing that you can do 393 00:16:09,600 --> 00:16:11,920 to try to pull material out of there. 394 00:16:11,920 --> 00:16:15,440 Again, employees and customer safety comes first. 395 00:16:15,440 --> 00:16:18,320 So once it hits the floor, it's in the landfill. 396 00:16:18,320 --> 00:16:19,400 But as part of that comprehensive 397 00:16:19,400 --> 00:16:20,640 solid waste management strategy, 398 00:16:20,640 --> 00:16:22,920 we wanna set in place those opportunities 399 00:16:22,920 --> 00:16:25,560 that if you come to the landfill and you've got that desk, 400 00:16:25,560 --> 00:16:30,080 or you've got that article that can be diverted, 401 00:16:30,080 --> 00:16:32,080 you can go through and divert that material 402 00:16:32,080 --> 00:16:35,600 before you go to the working face, so it never goes there. 403 00:16:35,600 --> 00:16:37,600 And you do it at a much less cost 404 00:16:37,600 --> 00:16:40,080 than what you would be paying at the gate rate. 405 00:16:40,080 --> 00:16:43,520 - So how does somebody like me clean out my garage? 406 00:16:43,520 --> 00:16:45,480 I've got an old TV, some wood scraps. 407 00:16:45,480 --> 00:16:50,080 I don't recall seeing where to take those things. 408 00:16:50,080 --> 00:16:52,320 Is that-- - You are correct. 409 00:16:52,320 --> 00:16:54,320 - Okay. - Yeah, that currently, 410 00:16:54,320 --> 00:16:57,600 I mean, it's extremely arduous to find something. 411 00:16:57,600 --> 00:16:58,800 First place I would go to 412 00:16:58,800 --> 00:17:01,000 is on the City of Denton's Recycle website. 413 00:17:01,000 --> 00:17:02,780 We have what's called the Waste Wizard. 414 00:17:02,780 --> 00:17:05,520 You go in there, you type in, I have an old file cabinet. 415 00:17:05,520 --> 00:17:07,080 And it'll say-- - Tells you what to do 416 00:17:07,080 --> 00:17:08,600 with it basically. - What to do with it basically. 417 00:17:08,600 --> 00:17:11,380 But what we wanna do is try to make it a little more simple 418 00:17:11,380 --> 00:17:14,240 and find those operators who will step forward 419 00:17:14,240 --> 00:17:17,200 and actually create opportunities at the landfill 420 00:17:17,200 --> 00:17:20,000 or some other place that's centrally located 421 00:17:20,000 --> 00:17:21,860 for you to take that material. 422 00:17:21,860 --> 00:17:22,700 - Great, thanks. 423 00:17:22,700 --> 00:17:26,640 - All right. - Okay, I think 424 00:17:26,640 --> 00:17:28,120 you can keep going. 425 00:17:28,120 --> 00:17:31,660 - All right, so when we put our notice of intent out, 426 00:17:31,660 --> 00:17:35,440 we had four waste haulers that proposed. 427 00:17:35,440 --> 00:17:38,840 And really, we exceeded the volume of tonnage 428 00:17:38,840 --> 00:17:41,440 that we were willing to contract by almost double. 429 00:17:41,440 --> 00:17:45,000 So again, three guys, one, one guy, you know. 430 00:17:45,000 --> 00:17:47,520 If you would've sweetened his bid just a little bit more, 431 00:17:47,520 --> 00:17:50,840 we may be looking at two contracts instead of three. 432 00:17:50,840 --> 00:17:53,560 But at the end of the day, we selected the best three bids 433 00:17:53,560 --> 00:17:56,120 that provided the highest cost 434 00:17:56,120 --> 00:17:59,420 and source of revenue to the city. 435 00:17:59,420 --> 00:18:01,600 And what was interesting is the tonnage that came in 436 00:18:01,600 --> 00:18:04,360 was actually below the maximum amount contemplated. 437 00:18:04,360 --> 00:18:09,360 So we're not at the 125 tons maximum that we were looking at. 438 00:18:09,360 --> 00:18:11,080 The three haulers we'll be considering today 439 00:18:11,080 --> 00:18:15,280 are Waste Connections, Rhino Removal, and Frontier Waste. 440 00:18:15,280 --> 00:18:20,280 Their initial bid was 105,000 tons with that 10% allowance. 441 00:18:20,280 --> 00:18:23,880 We're looking at 115,500 ton 442 00:18:23,880 --> 00:18:26,900 with potential revenues of 4.2 million. 443 00:18:26,900 --> 00:18:29,560 We're also looking at two interlocal agreements 444 00:18:29,560 --> 00:18:30,820 that you'll probably be seeing here 445 00:18:30,820 --> 00:18:32,960 within the next few weeks. 446 00:18:32,960 --> 00:18:34,960 Two government entities have expressed an interest 447 00:18:34,960 --> 00:18:37,960 in continuing their relationship with us. 448 00:18:37,960 --> 00:18:40,280 We wanted to work to memorialize those agreements 449 00:18:40,280 --> 00:18:42,200 of tonnage and rate. 450 00:18:42,200 --> 00:18:46,320 We're not including a diversion incentive with that, 451 00:18:46,320 --> 00:18:49,360 but we will get any sort of diversion recognition 452 00:18:49,360 --> 00:18:50,520 back through them. 453 00:18:50,520 --> 00:18:53,220 And we'll be working to create programs 454 00:18:53,220 --> 00:18:55,720 for the next contract to help them 455 00:18:55,720 --> 00:18:57,760 from a regional standpoint. 456 00:18:57,760 --> 00:19:01,080 Those two are the city of Little Elm and Wise County. 457 00:19:01,080 --> 00:19:04,840 So again, they've proposed 5,400 tons 458 00:19:04,840 --> 00:19:07,080 with revenue of $189,000. 459 00:19:07,080 --> 00:19:08,440 So when all is said and done, 460 00:19:08,440 --> 00:19:11,720 if you look at the previous contracts with their 10% 461 00:19:11,720 --> 00:19:14,160 plus what we're looking at the interlocal agreements, 462 00:19:14,160 --> 00:19:19,040 we could be looking at the potential of 121,000 tons roughly 463 00:19:19,040 --> 00:19:24,040 at almost 4.4 million dollars annually 464 00:19:24,040 --> 00:19:27,280 over the next two years with this contract. 465 00:19:27,280 --> 00:19:28,840 So what we would recommend 466 00:19:28,840 --> 00:19:32,080 is to approve each of these contracts 467 00:19:32,080 --> 00:19:34,760 for consideration by the city council. 468 00:19:34,760 --> 00:19:38,000 Be glad to answer any additional questions 469 00:19:38,000 --> 00:19:39,680 that you might have. 470 00:19:39,680 --> 00:19:41,440 - Are there additional questions? 471 00:19:41,440 --> 00:19:44,080 Yes, go ahead, Mr. Taylor. 472 00:19:44,080 --> 00:19:46,160 - Not so much a question. 473 00:19:46,160 --> 00:19:49,280 I just wanna say I think this is a really good way 474 00:19:49,280 --> 00:19:51,040 of managing our asset, 475 00:19:51,040 --> 00:19:54,540 of getting the best value to the landfill for Denton, 476 00:19:54,540 --> 00:19:58,520 and also encouraging regional diversion and recycling. 477 00:19:58,520 --> 00:20:01,200 And I think 10% is a little low, 478 00:20:01,200 --> 00:20:02,440 but it's a great starting point. 479 00:20:02,440 --> 00:20:04,760 And like you said, we have a two-year contract. 480 00:20:04,760 --> 00:20:08,240 And as we build out our programs into regional programs, 481 00:20:08,240 --> 00:20:10,600 then these smaller haulers in the county 482 00:20:10,600 --> 00:20:13,280 that are coming from the Provinces 483 00:20:13,280 --> 00:20:16,560 and other like Wise County, rural counties, 484 00:20:16,560 --> 00:20:18,320 this gives them an opportunity 485 00:20:18,320 --> 00:20:20,400 to build those programs as well. 486 00:20:20,400 --> 00:20:22,880 And with that, I think I would move for, 487 00:20:22,880 --> 00:20:24,840 are we moving one or all three? 488 00:20:24,840 --> 00:20:27,120 - We need to take them individually, right, Ms. Marcella? 489 00:20:27,120 --> 00:20:29,720 - I will move item A for approval. 490 00:20:29,720 --> 00:20:34,640 - Item B with frontier waste solutions is the first one. 491 00:20:34,640 --> 00:20:37,280 - I'm sorry, item B with frontier waste solutions 492 00:20:37,280 --> 00:20:38,120 for approval. 493 00:20:38,120 --> 00:20:39,360 - Do we have a second? 494 00:20:39,360 --> 00:20:40,920 - Second. 495 00:20:40,920 --> 00:20:41,740 - Larry. 496 00:20:41,740 --> 00:20:44,680 Oh, okay. 497 00:20:44,680 --> 00:20:46,400 So it's Mr. Jumper gets the second. 498 00:20:46,400 --> 00:20:48,040 All in favor say aye. 499 00:20:48,040 --> 00:20:48,880 - Aye. 500 00:20:48,880 --> 00:20:50,040 - That one carries. 501 00:20:50,040 --> 00:20:55,040 The next one is PUB 22120 with rhino removal LLC. 502 00:20:55,940 --> 00:20:59,740 Do we have a motion to approve Mr. Rybeck motion? 503 00:20:59,740 --> 00:21:01,260 Mr. Beck seconded. 504 00:21:01,260 --> 00:21:02,760 All in favor say aye. 505 00:21:02,760 --> 00:21:04,080 - Aye. 506 00:21:04,080 --> 00:21:07,000 - And the last one is PUB 22121 507 00:21:07,000 --> 00:21:10,000 with waste connections Lone Star Inc. 508 00:21:10,000 --> 00:21:11,480 Do we have a motion? 509 00:21:11,480 --> 00:21:14,280 Mr. Jumper, Mr. Cheek seconds. 510 00:21:14,280 --> 00:21:15,720 All in favor say aye. 511 00:21:15,720 --> 00:21:16,740 - Aye. 512 00:21:16,740 --> 00:21:17,580 - Thank you. 513 00:21:17,580 --> 00:21:18,680 - Thank you very much. 514 00:21:18,680 --> 00:21:22,500 - The next item is to formalize a return on investment 515 00:21:22,500 --> 00:21:24,460 payment with the city utility funds. 516 00:21:26,640 --> 00:21:28,280 - Good morning, Chair, PEB members, 517 00:21:28,280 --> 00:21:30,120 Nick Vincent, Assistant Director of Finance. 518 00:21:30,120 --> 00:21:32,720 Let me get this pulled up really quick. 519 00:21:32,720 --> 00:21:34,440 My hands to work, they're cold this morning. 520 00:21:34,440 --> 00:21:36,180 It's pretty cold in here. 521 00:21:36,180 --> 00:21:39,200 So yeah, this is to formalize the return on investment 522 00:21:39,200 --> 00:21:41,320 payment for water, wastewater, and electric 523 00:21:41,320 --> 00:21:42,500 to the general fund. 524 00:21:42,500 --> 00:21:44,480 Let me share this. 525 00:21:44,480 --> 00:21:51,600 So we'll read the first bullet point. 526 00:21:51,600 --> 00:21:52,920 We really already talked about that. 527 00:21:52,920 --> 00:21:55,340 But this ordinance will formalize the return on investment 528 00:21:55,340 --> 00:21:58,400 payment that you saw during the proposed budgets 529 00:21:58,400 --> 00:22:01,960 for water, wastewater, and electric to the general fund. 530 00:22:01,960 --> 00:22:04,360 Electric's ROI is currently 6%, 531 00:22:04,360 --> 00:22:05,880 as discussed to the Public Utility Board 532 00:22:05,880 --> 00:22:07,200 during those presentations. 533 00:22:07,200 --> 00:22:10,740 Water's 3.5%, wastewater's 3.5%. 534 00:22:10,740 --> 00:22:17,080 Just really quick one to show you the amount 535 00:22:17,080 --> 00:22:18,600 that each of these utilities budget 536 00:22:18,600 --> 00:22:19,520 and return on investment. 537 00:22:19,520 --> 00:22:23,280 So this is percentage of gross revenue with some exclusions. 538 00:22:23,280 --> 00:22:27,600 Electric currently pays 19.4 million to the general fund. 539 00:22:27,600 --> 00:22:31,140 Water pays 1.5, and then wastewater pays a million. 540 00:22:31,140 --> 00:22:34,900 And that is it. 541 00:22:34,900 --> 00:22:37,800 Very short and sweet. 542 00:22:37,800 --> 00:22:39,800 - Questions. 543 00:22:39,800 --> 00:22:49,700 - No, Mr. Cheek, the 6% was increased from 3.5% to 6% 544 00:22:49,700 --> 00:22:51,240 in April 2020. 545 00:22:51,240 --> 00:22:52,820 So during the COVID pandemic. 546 00:22:54,280 --> 00:22:59,280 - That's always a tough balancing act between, you know, 547 00:22:59,280 --> 00:23:02,800 what do you charge for your rate of return and investment? 548 00:23:02,800 --> 00:23:03,640 It's difficult. 549 00:23:03,640 --> 00:23:08,000 But that was increased here in COVID. 550 00:23:08,000 --> 00:23:10,260 All right, do we have a motion to approve 551 00:23:10,260 --> 00:23:12,300 if there are no other questions? 552 00:23:12,300 --> 00:23:13,960 Mr. Beck is moving approval. 553 00:23:13,960 --> 00:23:15,880 Do we have a second? 554 00:23:15,880 --> 00:23:20,560 Mr. Cheek seconds, all in favor say aye. 555 00:23:20,560 --> 00:23:21,400 - Aye. 556 00:23:21,400 --> 00:23:22,240 - Opposed? 557 00:23:24,200 --> 00:23:25,440 - Abstaining. 558 00:23:25,440 --> 00:23:27,440 - Abstaining, Mr. Rybeck is abstaining. 559 00:23:27,440 --> 00:23:28,280 Okay. 560 00:23:28,280 --> 00:23:32,920 Next item is consider recommending the adoption 561 00:23:32,920 --> 00:23:35,680 of an ordinance through the lower Colorado River 562 00:23:35,680 --> 00:23:38,900 authority contract, number 5343. 563 00:23:38,900 --> 00:23:46,140 For $16 million. 564 00:23:46,140 --> 00:23:51,060 - I'm gonna try to go as fast as Nick did. 565 00:23:52,800 --> 00:23:54,320 Just kidding. 566 00:23:54,320 --> 00:23:56,160 My name is Randy Key. 567 00:23:56,160 --> 00:23:58,500 I'm an electric engineering supervisor at DME. 568 00:23:58,500 --> 00:24:01,860 Let's see here. 569 00:24:01,860 --> 00:24:06,560 Okay, this is for the LCRA contract, 570 00:24:06,560 --> 00:24:08,320 lower Colorado River authority. 571 00:24:08,320 --> 00:24:10,040 This is a co-op contract. 572 00:24:10,040 --> 00:24:17,600 Okay, this contract intends to supply low usage, 573 00:24:17,600 --> 00:24:19,880 one time buy and specialty items not covered 574 00:24:19,880 --> 00:24:21,520 by any current city agreements. 575 00:24:22,560 --> 00:24:24,360 The city will also be able to use this contract 576 00:24:24,360 --> 00:24:26,400 to purchase a variety of electric items, 577 00:24:26,400 --> 00:24:29,320 such as wire, cable, hardware, connector, 578 00:24:29,320 --> 00:24:32,100 pretty much any electric utility item. 579 00:24:32,100 --> 00:24:41,520 Right here, went over some of the categories 580 00:24:41,520 --> 00:24:47,280 and estimations that we have for wire, 581 00:24:47,280 --> 00:24:51,280 two million cable, two million components, 582 00:24:51,280 --> 00:24:54,640 eight million, which is kind of all-encompassing, 583 00:24:54,640 --> 00:24:57,000 hardware, four million, and for three years 584 00:24:57,000 --> 00:24:58,600 for a total of $16 million. 585 00:24:58,600 --> 00:25:07,320 Why we need the extra purchasing power. 586 00:25:07,320 --> 00:25:09,560 The purchase of these supplies is necessary 587 00:25:09,560 --> 00:25:11,920 so that DME can construct, operate, maintain, 588 00:25:11,920 --> 00:25:14,880 overhead, underground electric utilities, 589 00:25:14,880 --> 00:25:18,160 provide electric service to new and existing customers. 590 00:25:18,160 --> 00:25:20,600 Items are purchased as needed by the warehouse 591 00:25:20,600 --> 00:25:22,020 as well as DME. 592 00:25:22,020 --> 00:25:27,520 We can kind of use this contract as an emergency once. 593 00:25:27,520 --> 00:25:31,200 What we have seen in the past year 594 00:25:31,200 --> 00:25:36,200 with price increases is tremendous, 595 00:25:36,200 --> 00:25:39,860 which means that our current contracts, 596 00:25:39,860 --> 00:25:46,120 they're being used up way faster than we ever anticipated, 597 00:25:46,120 --> 00:25:48,320 and that's what this contract is mainly for. 598 00:25:48,320 --> 00:25:51,680 And for the one-time buys and the specialty items 599 00:25:51,680 --> 00:25:53,920 that we don't necessarily have on contract. 600 00:25:53,920 --> 00:25:56,960 - Are we having supply chain issues 601 00:25:56,960 --> 00:25:58,880 with a lot of these components also? 602 00:25:58,880 --> 00:26:00,920 - Yes. - Okay, all right. 603 00:26:00,920 --> 00:26:02,000 - Very much so. 604 00:26:02,000 --> 00:26:06,800 For instance, transformers that were about 12-week weight 605 00:26:06,800 --> 00:26:08,500 were almost at two years. 606 00:26:08,500 --> 00:26:10,040 - Oh, no. 607 00:26:10,040 --> 00:26:12,380 - And that goes, it's industry-wide. 608 00:26:12,380 --> 00:26:13,720 It's not just transformers. 609 00:26:13,720 --> 00:26:16,800 It's our PVC, it's pretty much everything, 610 00:26:16,800 --> 00:26:20,200 PVC pedestals, wire, cable, it's a lot. 611 00:26:20,200 --> 00:26:21,400 - Mr. Beck, go ahead. 612 00:26:21,400 --> 00:26:22,360 - Thank you. 613 00:26:22,360 --> 00:26:23,720 When you say one-time buy now, 614 00:26:23,720 --> 00:26:25,240 are you talking about this is in place 615 00:26:25,240 --> 00:26:29,120 for this fiscal year, or it's kind of an ongoing thing, 616 00:26:29,120 --> 00:26:32,840 but when we do do it, we only do it one time? 617 00:26:32,840 --> 00:26:34,160 - It's gonna be ongoing. 618 00:26:34,160 --> 00:26:36,160 It depends on the actual project. 619 00:26:36,160 --> 00:26:39,960 We do have a few fairly large projects 620 00:26:39,960 --> 00:26:43,920 that could encompass some one-time buys. 621 00:26:43,920 --> 00:26:46,720 So this is not something we're gonna review every year. 622 00:26:46,720 --> 00:26:49,280 This is to kind of approve it, 623 00:26:49,280 --> 00:26:52,360 and it'll be kind of an ongoing, as needed. 624 00:26:52,360 --> 00:26:53,200 - I believe it's a three-year. 625 00:26:53,200 --> 00:26:55,260 - Mr. Beck, this is a three-year contract. 626 00:26:55,260 --> 00:26:56,100 - Okay. 627 00:26:56,100 --> 00:26:58,840 - With that $16 million authorization, 628 00:26:58,840 --> 00:27:01,440 we're only gonna use it if we need it. 629 00:27:01,440 --> 00:27:04,060 And so if we don't need it, it expires in three years. 630 00:27:04,060 --> 00:27:07,000 We'll come back, and we renew it if we need to. 631 00:27:07,000 --> 00:27:07,840 - Okay. 632 00:27:07,840 --> 00:27:10,440 - I will tell you, we certainly don't wanna create 633 00:27:10,440 --> 00:27:12,880 any kind of panic, right, with these long lead times. 634 00:27:12,880 --> 00:27:15,040 So something that we're doing internally, 635 00:27:15,040 --> 00:27:16,320 both at DME and in conjunction 636 00:27:16,320 --> 00:27:17,760 with our centralized warehouse, 637 00:27:17,760 --> 00:27:20,760 is trying to identify the amount of inventory 638 00:27:20,760 --> 00:27:24,320 that we need to serve our current existing customers. 639 00:27:24,320 --> 00:27:27,120 And so the plan would then be that any lead times, 640 00:27:27,120 --> 00:27:30,020 once we've exhausted some of that excess inventory, 641 00:27:30,020 --> 00:27:32,280 is to begin to push that out to new development, 642 00:27:32,280 --> 00:27:33,440 if we need to. 643 00:27:33,440 --> 00:27:34,560 Again, that's our current plan. 644 00:27:34,560 --> 00:27:35,880 That's what we're planning for. 645 00:27:35,880 --> 00:27:37,800 But we wanna make sure that we preserve 646 00:27:37,800 --> 00:27:40,480 our existing inventory for our existing customers, 647 00:27:40,480 --> 00:27:43,360 and that they don't experience any outages 648 00:27:43,360 --> 00:27:46,540 as a result of any long lead times. 649 00:27:46,540 --> 00:27:47,380 - Good, thank you. 650 00:27:47,380 --> 00:27:48,840 - And this is just really allowing us 651 00:27:48,840 --> 00:27:52,600 to leverage some opportunities with Lower Colorado. 652 00:27:52,600 --> 00:27:54,760 - Absolutely, this is just an additional contract 653 00:27:54,760 --> 00:27:56,900 that we'll have in place in case we need it. 654 00:27:56,900 --> 00:27:57,740 - Yeah. 655 00:27:57,740 --> 00:27:58,560 - True. 656 00:27:58,560 --> 00:28:01,320 - And it saves us in the bidding process. 657 00:28:01,320 --> 00:28:03,520 Saves us time in the bidding process. 658 00:28:03,520 --> 00:28:04,440 - Absolutely. 659 00:28:04,440 --> 00:28:05,480 - Yes. 660 00:28:05,480 --> 00:28:08,420 - I just wanted to find out that you have some numbers there. 661 00:28:08,420 --> 00:28:10,160 So obviously you made some projections 662 00:28:10,160 --> 00:28:14,240 about your requirement as you see them going forward. 663 00:28:14,240 --> 00:28:17,560 Is that reasonably correct for me to assume? 664 00:28:17,560 --> 00:28:19,400 - You're saying about the numbers for lead times, 665 00:28:19,400 --> 00:28:21,360 or numbers for price increases? 666 00:28:21,360 --> 00:28:24,640 - The dollar amounts in total over the period. 667 00:28:24,640 --> 00:28:26,720 - For wire, cable. 668 00:28:26,720 --> 00:28:28,680 - Oh, for the wire and the cable. 669 00:28:28,680 --> 00:28:30,960 That was just, that's based upon, 670 00:28:30,960 --> 00:28:34,680 it's really based upon just the upcoming projects, 671 00:28:34,680 --> 00:28:38,560 and what could, it's a complete estimation. 672 00:28:38,560 --> 00:28:43,560 So what I do have is numbers for the lead times 673 00:28:43,560 --> 00:28:46,560 and price increases of the equipment. 674 00:28:46,560 --> 00:28:49,040 And so, yes sir. 675 00:28:49,040 --> 00:28:51,460 - Okay, I don't know if that answered my question, 676 00:28:51,460 --> 00:28:52,300 but I'll take it. 677 00:28:52,300 --> 00:28:56,460 - Well, so if you're asking about your question, 678 00:28:56,460 --> 00:29:00,760 you're asking for what we're gonna spend the 16 million on? 679 00:29:00,760 --> 00:29:02,600 Is that, was that your question? 680 00:29:02,600 --> 00:29:04,440 - You had some specific dollar amounts, 681 00:29:04,440 --> 00:29:06,700 and I'm presuming they were based on something, 682 00:29:06,700 --> 00:29:08,840 and you're based on projections of things 683 00:29:08,840 --> 00:29:10,880 you expect to need over the next two years. 684 00:29:10,880 --> 00:29:13,860 - Yeah, Mr. Ryback, the reason for the dollar amount 685 00:29:13,860 --> 00:29:16,540 is really attributable to the price increases 686 00:29:16,540 --> 00:29:17,640 that we're seeing. 687 00:29:17,640 --> 00:29:19,660 For some of our normal distribution transformers, 688 00:29:19,660 --> 00:29:23,560 we're seeing pricing increases up to 250%, right? 689 00:29:23,560 --> 00:29:28,420 And so again, so the contracts that Randy has referenced, 690 00:29:28,420 --> 00:29:31,280 our existing contracts, the dollar values of those contracts, 691 00:29:31,280 --> 00:29:33,480 we're expending those dollars a lot quicker. 692 00:29:33,480 --> 00:29:36,040 - Oh, that part I got, yes, I was clear about that. 693 00:29:36,040 --> 00:29:39,880 I was just curious what these dollars were tied to, 694 00:29:39,880 --> 00:29:42,600 and if you are projecting A, replacing equipment 695 00:29:42,600 --> 00:29:45,920 you have on hand, or B, new projects 696 00:29:45,920 --> 00:29:47,280 that you see coming down the road 697 00:29:47,280 --> 00:29:49,160 that will require equipment. 698 00:29:49,160 --> 00:29:53,360 - It's really the new projects that are coming online, 699 00:29:53,360 --> 00:29:54,800 and they're already in the pipeline. 700 00:29:54,800 --> 00:29:56,960 - All right, so do you have an existing inventory 701 00:29:56,960 --> 00:30:00,960 of some of these basic, constantly reused products 702 00:30:00,960 --> 00:30:04,080 like cable, transformers, et cetera? 703 00:30:04,080 --> 00:30:04,960 - Yes, absolutely. 704 00:30:04,960 --> 00:30:06,160 - Okay, thank you. 705 00:30:06,160 --> 00:30:09,040 - Other questions? 706 00:30:09,040 --> 00:30:10,560 Oh, go ahead, Mr. Taylor. 707 00:30:10,560 --> 00:30:12,080 - Thank you. 708 00:30:12,080 --> 00:30:13,720 So when we talk about projects, 709 00:30:13,720 --> 00:30:18,720 are these capital projects, or are these kind of O&M, 710 00:30:18,720 --> 00:30:21,720 like updating existing distribution? 711 00:30:21,720 --> 00:30:22,680 - Majority capital. 712 00:30:22,680 --> 00:30:25,280 I mean, there is maintenance projects as well, 713 00:30:25,280 --> 00:30:26,540 but majority capital. 714 00:30:26,540 --> 00:30:29,960 - And so in this case, we might have a new substation, 715 00:30:29,960 --> 00:30:32,640 $20 million project, it was approved a year ago, 716 00:30:32,640 --> 00:30:34,080 it's three years construction. 717 00:30:35,600 --> 00:30:36,800 Copper prices are high. 718 00:30:36,800 --> 00:30:37,640 - Yes, sir. 719 00:30:37,640 --> 00:30:40,200 - And so a million of this is gonna go to 720 00:30:40,200 --> 00:30:43,920 increased material costs for that project? 721 00:30:43,920 --> 00:30:46,720 - It would just depend, depend on the contracts 722 00:30:46,720 --> 00:30:49,120 and how much we have in stock. 723 00:30:49,120 --> 00:30:54,120 So this is mainly for what I would, okay. 724 00:30:54,120 --> 00:31:00,680 - I'm sorry, Jerry Filler, engineering manager for DME. 725 00:31:00,680 --> 00:31:03,200 The substation project that I think you're referring to, 726 00:31:03,200 --> 00:31:05,720 it's under its own contract and the contractor's required 727 00:31:05,720 --> 00:31:07,600 to provide all the materials. 728 00:31:07,600 --> 00:31:09,200 So the money that we have for this contract 729 00:31:09,200 --> 00:31:11,600 will not be going to that substation. 730 00:31:11,600 --> 00:31:13,560 This is mainly for distribution projects, 731 00:31:13,560 --> 00:31:15,440 mostly capital, some maintenance functions 732 00:31:15,440 --> 00:31:18,080 that we have come up and it's above and beyond 733 00:31:18,080 --> 00:31:20,840 what we're already doing, as Mr. Puente pointed out. 734 00:31:20,840 --> 00:31:26,840 We have tried to identify a standard level of materials 735 00:31:26,840 --> 00:31:29,520 to handle the customers that we have now. 736 00:31:29,520 --> 00:31:32,520 And so things happen, storms come through, 737 00:31:32,520 --> 00:31:34,200 et cetera, et cetera. 738 00:31:34,200 --> 00:31:36,840 So this allows us to go buy additional materials 739 00:31:36,840 --> 00:31:38,280 if we need to. 740 00:31:38,280 --> 00:31:39,920 Doesn't mean that we're still not gonna come back later 741 00:31:39,920 --> 00:31:42,280 and come in front of you guys to get contracts 742 00:31:42,280 --> 00:31:44,400 for cable, wire, transformers. 743 00:31:44,400 --> 00:31:46,240 Gonna see a big one for transformers here 744 00:31:46,240 --> 00:31:48,160 in a couple of weeks, probably. 745 00:31:48,160 --> 00:31:50,880 But this one is just basically a help all 746 00:31:50,880 --> 00:31:52,680 to make sure that we keep everything 747 00:31:52,680 --> 00:31:54,680 under control that we have. 748 00:31:54,680 --> 00:31:56,080 - Okay, so this would not be used 749 00:31:56,080 --> 00:31:58,760 for kind of the large capital projects 750 00:31:58,760 --> 00:32:00,760 that have their own contracts. 751 00:32:00,760 --> 00:32:05,760 This would be used for smaller or kind of O&M type work? 752 00:32:05,760 --> 00:32:08,720 - Substations are typically under a separate contract. 753 00:32:08,720 --> 00:32:10,040 So those are the big ones. 754 00:32:10,040 --> 00:32:13,280 - Substations are so big that the contractor 755 00:32:13,280 --> 00:32:14,760 provides everything. - Pretty much, yeah. 756 00:32:14,760 --> 00:32:16,360 - Maybe some smaller stuff you might have. 757 00:32:16,360 --> 00:32:18,000 We might have a million dollar project 758 00:32:18,000 --> 00:32:19,880 on upgrading something. 759 00:32:19,880 --> 00:32:21,240 - Yeah, real widenings. 760 00:32:21,240 --> 00:32:22,720 That would be a distribution project 761 00:32:22,720 --> 00:32:25,480 and if we needed materials and we need to use this contract, 762 00:32:25,480 --> 00:32:28,080 then this would make this contract available to us. 763 00:32:28,080 --> 00:32:32,480 - Okay, and then I was curious, electric components, 764 00:32:32,480 --> 00:32:37,480 I mean, is this only distributed or almost only distribution? 765 00:32:37,480 --> 00:32:38,960 - Distribution, yes, sir. 766 00:32:38,960 --> 00:32:42,360 - And so wires, poles, transformers? 767 00:32:42,360 --> 00:32:45,480 - Splicers, connections, it's all encompassing. 768 00:32:45,480 --> 00:32:47,560 - Okay, but like what you see driving down 769 00:32:47,560 --> 00:32:49,360 a residential neighborhood? - Yes, sir. 770 00:32:49,360 --> 00:32:51,960 - You know, City Street, okay, thank you. 771 00:32:51,960 --> 00:32:54,360 - Did I see another question on this side? 772 00:32:55,320 --> 00:32:58,760 No, no, any other questions? 773 00:32:58,760 --> 00:33:02,520 All right, do we have a motion to approve 774 00:33:02,520 --> 00:33:04,760 the contract with Lower Colorado River Authority 775 00:33:04,760 --> 00:33:07,960 contract number 5343? 776 00:33:07,960 --> 00:33:14,200 Oh, Mr. Rybeka moved and Mr. Taylor seconded. 777 00:33:14,200 --> 00:33:15,640 All in favor say aye. 778 00:33:15,640 --> 00:33:16,680 - Aye. - Aye. 779 00:33:16,680 --> 00:33:17,840 - Carries, thank you. 780 00:33:17,840 --> 00:33:19,120 - Thank you very much. 781 00:33:19,120 --> 00:33:20,400 - Management reports. 782 00:33:20,400 --> 00:33:24,120 - So Madam Chair and members of the board, 783 00:33:24,120 --> 00:33:27,720 so for your future items on your agenda, 784 00:33:27,720 --> 00:33:31,080 we have a water rights modernization 785 00:33:31,080 --> 00:33:35,640 and one water contract is coming to you on the 26th. 786 00:33:35,640 --> 00:33:40,080 And then we did push back the Greensense Incentives Program 787 00:33:40,080 --> 00:33:42,260 out to October 24th. 788 00:33:42,260 --> 00:33:45,120 I will tell you, we did go to the sustainability committee, 789 00:33:45,120 --> 00:33:47,720 I did forward to you the various presentations, 790 00:33:47,720 --> 00:33:49,720 there's also some additional documentation. 791 00:33:49,720 --> 00:33:51,880 There was a number of questions that came up 792 00:33:51,880 --> 00:33:54,680 here in that committee and so we've been asked 793 00:33:54,680 --> 00:33:57,200 to come back to the committee at the end of September. 794 00:33:57,200 --> 00:33:59,600 We'll be doing that, working through that process, 795 00:33:59,600 --> 00:34:00,960 getting their recommendation. 796 00:34:00,960 --> 00:34:03,600 Once we have that, we will bring all that to you 797 00:34:03,600 --> 00:34:06,880 for discussion and then ultimately we'll go back 798 00:34:06,880 --> 00:34:11,120 to the council probably sometime in November at this point. 799 00:34:11,120 --> 00:34:13,280 You know, considering where we are in the fiscal year, 800 00:34:13,280 --> 00:34:15,540 what I've told the committee, I'll tell you is that 801 00:34:15,540 --> 00:34:19,240 really there's no rush at this point to make any changes. 802 00:34:19,240 --> 00:34:22,080 We have plenty of time and so that's why we're kind of 803 00:34:22,080 --> 00:34:23,460 tapping the brakes a little bit, 804 00:34:23,460 --> 00:34:25,320 making sure that we answer everyone's questions 805 00:34:25,320 --> 00:34:27,560 and that we get the right information out there 806 00:34:27,560 --> 00:34:29,800 to ultimately get a good solid recommendation 807 00:34:29,800 --> 00:34:32,600 from both groups before we go to the council. 808 00:34:32,600 --> 00:34:36,560 And then on the new business action matrix, 809 00:34:36,560 --> 00:34:40,800 obviously those two items are items that we've included 810 00:34:40,800 --> 00:34:43,560 in that presentation and discussion. 811 00:34:43,560 --> 00:34:46,160 And so we hope to be able to get that wrapped up 812 00:34:46,160 --> 00:34:49,200 when we come to you as well and then clean that up. 813 00:34:49,200 --> 00:34:51,880 So I'm happy to answer any questions that you may have 814 00:34:51,880 --> 00:34:54,000 on any of that, but that concludes 815 00:34:54,000 --> 00:34:56,120 the information I have for you today. 816 00:34:56,120 --> 00:34:57,120 - Questions? 817 00:34:57,120 --> 00:34:57,960 - One. 818 00:34:57,960 --> 00:34:59,620 - Yeah, go ahead. 819 00:34:59,620 --> 00:35:00,560 - Thank you, Chair. 820 00:35:00,560 --> 00:35:03,760 So I reviewed the Greensense presentation 821 00:35:03,760 --> 00:35:07,160 to the sustainability in the sustainability agenda 822 00:35:07,160 --> 00:35:11,160 and I couldn't find reference to savings 823 00:35:11,160 --> 00:35:17,080 from decreased average peak distribution load. 824 00:35:17,080 --> 00:35:20,360 And I've also separately been reading 825 00:35:20,360 --> 00:35:24,400 about Austin Energy's reforms to their solar incentives 826 00:35:24,400 --> 00:35:28,920 and their solar electric rate, their buyback rate. 827 00:35:28,920 --> 00:35:33,280 And I was wondering when we get that presentation, 828 00:35:33,280 --> 00:35:38,280 if we could see distribution level O&M 829 00:35:38,280 --> 00:35:43,960 and capital savings from having generation 830 00:35:43,960 --> 00:35:45,420 on the distribution lines. 831 00:35:45,420 --> 00:35:48,600 And then also a comparison of something like Austin 832 00:35:48,600 --> 00:35:52,480 where their value of solar is something like 9.8 cents. 833 00:35:52,480 --> 00:35:56,400 Just to compare, 'cause in the presentation, 834 00:35:56,400 --> 00:35:59,560 it seemed to be just talking about this kind of 2 cents, 835 00:35:59,560 --> 00:36:03,200 $20 a megawatt offset wholesale purchase. 836 00:36:03,200 --> 00:36:06,600 But I would like to compare the full cost 837 00:36:06,600 --> 00:36:09,240 all the way from not just the wholesale power, 838 00:36:09,240 --> 00:36:12,720 but the transmission, distribution, capital savings, 839 00:36:12,720 --> 00:36:17,720 extended life of O&M and lower O&M on distribution equipment. 840 00:36:17,720 --> 00:36:19,600 - I have a question too. 841 00:36:19,600 --> 00:36:20,440 - Go ahead, Larry. 842 00:36:20,440 --> 00:36:22,280 - Good, good start there. 843 00:36:22,280 --> 00:36:24,000 I too watched the presentation 844 00:36:24,000 --> 00:36:29,000 and I didn't see an answer that explained, 845 00:36:29,000 --> 00:36:34,560 said that we pay, that DME pays PV homes, businesses, 846 00:36:34,560 --> 00:36:41,960 three times the rate when the energy they produce 847 00:36:41,960 --> 00:36:44,840 back into the system, then y'all pay aircott. 848 00:36:44,840 --> 00:36:48,400 And I, why is that, how does that happen? 849 00:36:48,400 --> 00:36:53,840 - Yeah, I guess I'm not following the, 850 00:36:53,840 --> 00:36:54,840 that we pay aircott. 851 00:36:54,840 --> 00:36:57,200 I think, I think, yeah, I think we'll-- 852 00:36:57,200 --> 00:36:58,600 - It was three times higher the rate 853 00:36:58,600 --> 00:37:01,280 than we were paying somebody. 854 00:37:01,280 --> 00:37:03,960 - So the average, so the average cost 855 00:37:03,960 --> 00:37:07,360 from buying electricity from the grid 856 00:37:07,360 --> 00:37:12,360 is about $18, $20 a megawatt hour, right? 857 00:37:12,360 --> 00:37:17,760 So that's about a 1.8 cents, a two cents type of average 858 00:37:17,760 --> 00:37:20,960 on a per kilowatt basis, but yet offered PV 859 00:37:20,960 --> 00:37:23,200 when we're paying them is 10 cents. 860 00:37:23,200 --> 00:37:26,680 So we're 10 cents on a per kilowatt basis. 861 00:37:26,680 --> 00:37:29,520 And that's kind of the comparison that we've made. 862 00:37:29,520 --> 00:37:31,000 Again, I think the committees, 863 00:37:31,000 --> 00:37:32,760 it certainly has asked a number of questions, 864 00:37:32,760 --> 00:37:33,960 certainly along those lines, 865 00:37:33,960 --> 00:37:37,120 and we're compiling responses for that. 866 00:37:37,120 --> 00:37:39,560 Also, there was an additional ISR 867 00:37:39,560 --> 00:37:41,560 that wasn't provided to you, 868 00:37:41,560 --> 00:37:43,320 that was provided to the committee 869 00:37:43,320 --> 00:37:47,360 that we'll get to that also explains some of the issues 870 00:37:47,360 --> 00:37:50,760 that are going on, the impacts on the overall load, 871 00:37:50,760 --> 00:37:53,120 what it does to the transmission cost of service 872 00:37:53,120 --> 00:37:55,040 and the force CP impacts. 873 00:37:55,040 --> 00:37:57,800 And so all of that will be coming to you. 874 00:37:57,800 --> 00:38:00,160 And so, but I think that's what you're referencing 875 00:38:00,160 --> 00:38:04,200 is how that compares to what we're actually buying power 876 00:38:04,200 --> 00:38:05,680 from the market. 877 00:38:05,680 --> 00:38:08,200 There's a huge disparity between the two, 878 00:38:08,200 --> 00:38:12,440 along with the fact that when you're net zero billing 879 00:38:12,440 --> 00:38:16,560 a customer, you're not recovering any of your fixed charges 880 00:38:16,560 --> 00:38:19,200 to serve that customer when their power 881 00:38:19,200 --> 00:38:21,240 is not being produced, you know, 882 00:38:21,240 --> 00:38:23,400 usually in the evenings, at night, 883 00:38:23,400 --> 00:38:25,480 and in the mornings as well. 884 00:38:25,480 --> 00:38:27,680 - All right, I'm hoping when we do bring this up, 885 00:38:27,680 --> 00:38:29,720 that can be something we can look at, 886 00:38:29,720 --> 00:38:32,840 that can be adjusted, 'cause I got skin in the game, 887 00:38:32,840 --> 00:38:35,600 and I don't mind giving you back my power, 888 00:38:35,600 --> 00:38:39,240 'cause I've got one of those systems that's probably too big, 889 00:38:39,240 --> 00:38:41,800 but I know you're trying to cover your fixed costs, 890 00:38:41,800 --> 00:38:46,800 and if we can just be credited with what we use 891 00:38:46,800 --> 00:38:49,400 and then give back to y'all, 892 00:38:49,400 --> 00:38:50,600 I don't know why we can't do that, 893 00:38:50,600 --> 00:38:53,360 but something to consider when we bring that up. 894 00:38:53,360 --> 00:38:54,200 Thank you. 895 00:38:54,200 --> 00:38:57,720 - Other questions? 896 00:38:57,720 --> 00:39:01,600 Concluding items, does a board member wish 897 00:39:01,600 --> 00:39:04,800 to have any items added to a future agenda, 898 00:39:04,800 --> 00:39:07,640 or have any further comments to make to the public? 899 00:39:07,640 --> 00:39:12,840 Okay, seeing none, it's 9.40, and we're adjourned.