- Okay, good morning.
It is nine o'clock and we have a quorum.
So call to order the public utilities board
for the city of Denton for Monday, March 27th of 2023.
The first item is presentations from members of the public.
Is anyone from the public here to make any comments?
Okay, I see none.
Let's move on to the consent agenda.
Does any board member wish to pull a board item
of A or B?
Okay, I see none.
Do we have a motion to approve items A and B?
- So moved.
- Thank you, Devin.
Do we have a second? - So moved.
- Thank you, Billy.
All in favor say aye.
- Aye. - Aye.
Motion carries.
Next item is consider approval
of the March 13th, 2023 minutes.
Do we have any changes or corrections?
All right, do we have a motion to approve?
- So moved. - Thank you, Barbara.
And a second?
Tom, thank you.
All in favor say aye.
- Aye. - Aye.
Motion carries.
We're gonna call items B and C together
because they have a single presentation
but we do need to vote on them separately.
Do you need to read them off or at all?
- Do I need to read them?
- Okay. - I usually read them.
- Okay, thank you.
Haven't been to PMU in a while.
Good morning, Randy Klingle, Treasury Manager.
And I have a brief presentations
about the notice of intents for certificates of obligation.
The purpose of the notice of intent,
we do it for the certificates of obligation
because it is required by state law.
We must publish this notice two times in our local paper.
So we will publish this in the Denton Record Chronicle.
We also will put it on our city's website
for the duration of the notice.
We will also pass a bond ordinance
at least 46 days after the first publication.
So that will be happening in a couple of weeks
after we take this to council
after your recommendation today.
Most of my presentation
is about each utilities project list fund
that you approved as a budget item.
And then you also note it'll have a new column
that has the notice of intent item list
which has a new total on some of those.
And we will just briefly go over those.
We do have the department's presence
if you have specific questions regarding the actual projects.
So our first utility is Solid Waste,
which their budget and their notice of intent project list
came in the same at $16 million.
The Water Department reduced their budget
by about $3 million.
And that's mostly in the line
of the water transmission lines.
They did an analysis and they just not needed as much funds
in the beginning of the year as they thought.
So they reduced that by 3 million.
The Waste Water Department did have a larger reduction
from the budget to the notice of intent
reducing for about $11 million.
And the discussion with that department
is in the solid handlings improvement line item
from 12 million to two.
That was the full contract amount at the time.
And after reviewing,
they only needed about $2 million this fiscal year.
So you'll see that 12 million roll out in future years.
But that is-- - Does that come under
existing contracts or is that just a prediction
of what will happen?
- My understanding is that is a contracted amount
and you'll probably see that come forth later
and they'll use commercial paper
to get the full contract amount,
but the funds they'll only need
through multiple years ahead.
Electric is the last utility fund.
So we had a $30 million budget increase
from the notice intent from the budget.
And Daniel Stanford came in a couple of weeks ago
and y'all did recommend the budget improvement for that.
And that is mostly due to the transformers
and the increasing cost of those
over the last several months, if not even longer.
I think he quoted 300% increase in those costs.
So that is majority of that.
But you also see a note at the bottom.
There are some other projects like the LED conversions,
the Hickory GIS and some text dot relocations,
which they reviewed again.
And that is part of the increase for the electric fund.
And the comparison is also in the AIS,
if you need to look at it a little further too,
but a little give and take on several of the line items,
but you should see where the bulk is.
- Most of it's just the-
- Transformers. - Development.
Correct, we got transmission lines up there too,
but we're on a pretty big jump.
- Yes, and I believe they reduce the transformers
and then, or the substations
and increase the transformer lines
just with residential and commercial growth.
Would you agree with that, Tony?
- Yeah, I'll just point out that
Dennis Intents really sets the maximum
that we can issue after this 46 day period.
And so we're gonna continue to work through that time
and see if we can continue to finalize these numbers.
And so I'm really hopeful,
not putting pressure on Jerry Fielder who's here,
but I'm really hopeful that we can parse that down
a little bit more and so it won't be as dramatic.
- If you've got new revenue coming in
because of the T cost and that's a different thing,
and obviously you wanna spend money to make money.
- Well, that's a good point.
For all these items that are transmission related,
there is a reimbursement that we get
through our transmission cost service.
As you guys know, we're still working through that process,
but about 50% roughly of this bond issue
is T-coast eligible.
- Electric wind locations.
Can you explain that line item to me, please?
- Jerry, come up here.
- Sorry, Jerry.
- He thought he was gonna get away.
- We're still friends.
- You're all dressed up, so you may as well come up.
- Jerry Fielder, division engineering manager.
Tony was doing a good job.
No, relocations is mainly dealing with TextDOT.
Whenever we first had budgeted for all the projects
that we did relocate for TextDOT, we had a set of plans.
TextDOT has increased, I guess, the amount of space
or whatever that they wanted to take.
And so it's increased the number of encroachments
that we have or relocations that we have.
So it's jacked up the price significantly
when it came to those.
- Okay, I've said it before, I'll say it again.
For someone who builds roads,
the delays that are caused by utility relocates
are not your problem.
You guys are fantastic.
- Thank you.
- You get right out there and get it done
'cause you are a public utility and care about the public.
It's the franchise utilities that delay everything.
That's kind of why I pulled that line out.
- I'll take kudos anytime.
- Absolutely.
- Yeah, I just pointed out Billy on those.
We do anticipate some level of reimbursement from the state.
Unfortunately, they're not as quick to pay as we are,
so we tend to issue bonds.
Once we get reimbursed, we then repurpose those bonds
for other projects, that subsequently then lowers
the bond sale for the next year.
- And some utilities, you're just responsible
for your own relocates because you've had that land
for free from the state, and they'll say,
no, we're not paying you for it.
You just gotta move it, right?
- Yeah, not all relocations are created equal, for sure.
- Right, yeah.
- Okay.
Thank you, Jerry.
- And like Tony said, all the utilities,
you know, for the next time I come up for you
for the bond parameter orders,
they'll all take, constantly take reviews of these projects
to see what they can do to tweak them.
So the total notice of intent for all the COs
is 181,771,000 with those four utilities
that we just discussed.
Okay.
So next steps, after your recommendation,
I will take this to council on April 4th,
so we can issue the notice of intent and make those postings.
And then in May, we'll have the bond ordinance
come back to the PUB, which will be our final sale list
for you guys to recommend.
Take it forth to council after that in June.
And we hope to have the sale about the third week of June,
and then we'll receive proceeds in July.
So that's the further timeline out for this year's bond sale.
And then any further questions?
- Any further questions?
All right.
Oh, go ahead.
- So just to clarify and probably educate
maybe any public who might be watching,
what does this do to the total debt load
of the utilities?
- In total dollars or it increases
their total debt service payments overall,
it will add to there.
- Okay, so let me,
is this a total net increase of maximum debt
by this amount perpetually,
or have previous COs been paid off
and been removed from the stack?
- Previous COs have been paid off.
They accumulate over time,
and then we refund them any time we can.
They are callable in nine years,
and we may refinance them,
and they move forward to current debt.
So there is debt on the books,
and I believe most of this is 20, 30 year debt
that we have here.
Those are the terms of these projects here.
- Okay.
I guess I was trying to look for,
you might not have this information readily available,
of what the pattern is as old debt gets paid off,
and new debt, this is new projects.
Some of this is growth,
and some of this is existing areas of the city.
So we would expect the total debt load to increase,
maybe not $200 million a year, right?
Some of that's been paid off,
and some of this is,
I don't know when the last time we issued COs,
I don't know if it was last year,
if it wasn't here, okay.
If this is like what that kind of trend in debt is.
- I can bring that back.
- Yeah, that'd be great, thank you.
- Maybe the bond capacity that we can have.
- Yeah.
- Yeah, and it should be kind of interesting to see
how much of this is growth as the city grows,
and infrastructure needs grow,
versus just ongoing kind of revitalization
of existing infrastructure.
- Okay.
- Thank you.
- Absolutely.
Other questions?
Nope, okay.
Do we have a motion to approve item B,
the notice of intention to issue $52 million in principal
for certificates of obligation for the city of Denton
for general government and solid waste projects?
Okay, feeling moved?
I think Devin's second.
All in favor say aye.
- Aye.
- Okay, the next one is item C,
publication of notice of intent to issue $167 million
in principal amounts of certificates of obligation
for the city of Denton for waterworks and wastewater
and electric system projects.
Do we have a motion?
Devin moves.
Do we have a second?
Barbara seconds.
All in favor say aye.
- Aye.
- Motion carries.
- Thank you.
Management reports.
- So Madam Chair, members of the PB,
so the two items that we have here for you
are just the future agenda items.
Coming up on April 10th,
we have a update on the wastewater master plan.
And as I said before, after that period,
there'll be a lot of budget discussions with you.
Certainly there'll be a lot of conversations going on
this year with rates and cost of service studies
and what have you.
So please make sure that you have your calendars
up to date on that so that you can be here.
And then for new business action items,
believe it or not, this is the first time
in a couple of years that we have no outstanding items.
Certainly I'm not encouraging you to add anything today,
but certainly if you have something
that you're interested in, please let us know.
We'll be happy to do that.
And we'll make sure I'll work with Randy
on getting a response to Mr. Taylor's request.
We'll try to get that in the next management update.
- Do you have any rights that you think are gonna go down?
(laughing)
- I'm gonna let the finance people respond to that.
- Yeah, you're gonna walk away from that one.
(laughing)
- So good morning.
Nick Vincent, Interim Finance Director.
To answer your question,
we do not have anticipation of rates decreasing.
We'll probably be talking about rate increases
this fiscal year.
So it's yet to be determined.
It'll come forward to you in the coming months though.
- So keep our calendars clear.
(laughing)
- You never ask a question
that you don't really know the answer to.
(laughing)
- Madam Chair, those are the two items
that I was really happy to answer any questions you may have.
- All right, thank you.
Then we're to concluding items.
Does any board member have anything
they want added to a future agenda
or have any comments they'd like to make?
I see none.
Okay, work session, PUB 2308.
Hold a discussion on the solid waste
and recycling rewrite of the solid waste ordinance.
And I appreciate that you put 45 minutes on there
so that we know about how long.
- Good morning, my name's Tammy Clausing.
I'm the Assistant Director for Solid Waste and Recycling.
And today we'll be talking about
the proposed solid waste ordinance update
to include the commercial diversion.
Our agenda today will be to review the background
on this item, a metrics trends and problems,
components of the commercial diversion article,
public engagement opportunities,
public meeting feedback, solid waste ordinance updates,
next steps and ask for direction.
So back in July of 2022,
we adopted a comprehensive solid waste management strategy,
the alignment with council's key focus area
of promoting sustainability and in the environment.
And in November of 2022, we had a council work session
on the introduction of a comprehensive diversion ordinance.
Just to be clear on the verbiage,
the comprehensive diversion ordinance
is the same as the commercial diversion article.
Just wanted to make sure that our verbiage was clear
throughout what we're talking about today
and what you might remember from last year.
So we're gonna get in a little bit of numbers
that you might be familiar with.
Our current commercial diversion rate is 3%,
equaling 2,448 tons.
So currently out of our city of Denton customers,
we have roughly 95,000 tons last year
that went to the landfill of that 2,448 was recycled.
Our current commercial recycling participation rate
is 17% equaling 483.
So out of all of our commercial trash customers,
17% are currently recycling with us.
Back in 2020, we did a waste characterization study
that showed between 42 and 55% of commercial
and multifamily trash was comprised of programmatic material.
Programmatic material being items
that are in the city of Denton's contract with Pratt,
cardboard, paper, plastic containers one through seven,
aluminum cans and steel cans.
So roughly 45,000 tons from our commercial customers
went into the landfill and could have been recycled.
So the caveat to these numbers
is that it's only the city of Denton data.
We have an open market for commercial recycling,
which means that any third-party vendor
can come in and recycle or haul recycling
as long as they get a permit with the city.
So we're not capturing that data
and all the good work that all the businesses
are currently doing.
So that's the caveat to these numbers.
- Question. - Yes.
- So you may answer this on another slide
and I apologize if you do,
but what is your current estimated life left?
- On the landfill. - On the landfill.
- We're looking at 2049, I believe, easily.
The more we divert, the longer the life will be.
- In 2002, I believe it was,
the estimated life of the landfill was 26 years.
So we've done a good job.
You guys have done a good job of--
- We have a lot more opportunity for sure.
- Yeah, cooperation has been great.
So anyway.
So I wanted to bring up,
we did a pilot program with chute lids
and locking devices on our recycling bins.
The pilot was very successful.
So moving forward, any new recycling bin,
we put on a chute lid and locking device.
There were some issues with some of the pilot participants
when they had turnover with the employees.
So they didn't understand that they needed
to keep the lids closed.
So we created a video and we're letting the management
of those places have that video
so they can train new employees.
We talked about donation box concerns.
And as we followed up with development services,
our current development code does not allow donation boxes.
There are 17 locations that are illegal,
non-conforming or grandfathered in.
And as I was told that there were no issues
of overfill or contamination.
So we decided to not pursue the donation boxes any further.
Legal is working with development services
to understand the regulation for future issues
that might arise, but for solid waste,
we're not pursuing anything with the donation boxes.
We talked about North Lakes Recycling Center last time.
I heard loud and clear to keep it.
So we're gonna keep it.
There are construction, there is construction going on.
So we may be moving the location slightly
just to help with the parking situation.
As we were creating this diversion article,
within the solid waste ordinance,
there were some inadequacies that we would like to address.
So limited enforcement capability for illegal containers,
overflowing materials and contamination.
The service assistant's porch collection program
and valet services are not considered
in the current ordinance.
And the outdated third party permit and yard waste articles.
And then of course, the commercial recycling diversion
is not required.
Components of the commercial diversion article
will require that all entities to implement a diversion
or recycling program.
Requirements from customers will be to submit
a diversion plan annually.
Their choices for programmatic material
will be to contract with the city of Denton or a third party.
Choices for non-programmatic materials
will be to contract with a third party or perform in-house.
So non-programmatic materials are anything
that's not in the city of Denton's program.
So used motor oil, scrap metal, large plastic items,
textiles, anything that can be recycled will fit into this.
Requirements from a third party diversion vendor
or in-house programs will be to obtain a permit
with the city, which is currently implemented,
and send quarterly diversion tonnages to the city
so that we can track all the good work that's going on.
Our public engagement opportunities.
We sent mailings to commercial and multifamily customers
informing them of the commercial diversion articles
and public opportunities to comment.
We made public comment available starting February 3rd.
We held a public meeting at the Civic Center on February 16th.
And we posted a red line and clean version
of the revised solid waste ordinance on February 28th.
And we'll leave that online until April 4th
for continued public comment.
Public feedback that we've already received.
There were some concerns with legal,
non-conforming grandfather properties,
unique layouts and enough room for another container.
We assured the meeting attendees
that we would handle unique situations
and layouts individually and create a plan
or a solution that fit their business.
We understand there's not a one size fits all.
So we wanna make sure that everybody's comfortable
with whatever level that they can support on their property.
We were asked for clear wording
on what type of diversion would be acceptable.
So in our letter to commercial businesses
in an online diversion plan portal
for implementation of our commercial diversion ordinance,
we would outline acceptable diversion materials.
Again, non-programmatic materials,
anything like used motor oil, plastic film,
textile, scrap metal are all non-programmatic materials
and are acceptable for the diversion plan.
The ordinance updates we're proposing.
One item that won't be changing is the city
will remain a sole provider for residential trash
and residential recycling of programmatic materials
and commercial multifamily trash.
We'd like to include the porch collection service,
valet services and the commercial diversion.
We'd like to update the third party permitting
and yard waste articles to reflect current processes
and updates for illegal containers,
overflowing materials and contamination.
And I just wanna mention, there might be,
this may lead to other ordinance updates
needing to help with implementation.
And status and next steps.
We held our public meeting on February 16th
where we had 12 business owners attend
and we got great feedback from them.
We were very excited for it.
Our draft ordinance was completed on February 28th
and I'm here today for the PUB work session.
We'll have a council work session next week
and then based on feedback,
come back to PUB and council later in the month for approval.
We'd like to start outreach in June of 2023
with the implementation start around December, 2023
and an implementation completion in June of 2024.
So what does implementation look like?
We're gonna have phases.
There will be five groups made
from the 2,803 commercial customers.
Each group will be phased by months
over a five month period starting in June of 2023.
So group one will send a letter out in June
and then have six months of implementation.
So they'll hopefully start their diversion plan in December.
Group two will be in July,
group three will be in August and so forth.
On the communication side,
a letter will be sent out to each of the groups
or phases as they come online.
Customers who are currently commercial recycling customers
with the city of Denton will receive a letter
stating the new ordinance and informing them
that they don't need to do anything
unless they change or update their diversion plan.
Customers will be given a six month timeframe
to implement and submit their diversion plan
and feedback and reporting,
solid waste and recycling team will be following up
with customers as needed
based on their grouping and diversion plan
or any unique situations that may arise.
So this is where I ask for direction to move forward
with the rewrite of the solid waste ordinance
and include a commercial diversion article
or any other direction you may have.
- So does any of this have to do
with the FHWA's new requirements on sustainability?
- Not that I'm aware of, no.
- Do you know what that is?
- No, we don't, but again, any other.
- Sorry, Brian.
- Good morning, Brian,
Barnard Solid Waste Director with the city of Denton.
As we worked forward, this is really an out shoot
of our comprehensive solid waste management strategy
and the concept was independent of any other state
or federal mandates related to sustainability
or diversion contained within.
However, what we're doing here should align completely
with whatever is being proposed at those levels.
- Yeah, it looks like you're going above and beyond,
but just making sure that you're aware
that the FHWA is about to come down on everybody
on any kind of infrastructure projects,
which I would assume what you do is infrastructure.
- So we'll go ahead and research that
so we have that information available to discuss,
not only at the council meeting,
but at the following, here in a couple of weeks,
we actually asked for actual approval of the ordinance
to the council, so we still have two weeks
before we ask for it out.
- Okay, I just thought it was an appropriate question.
- Thank you.
- Thanks.
- And how have the owners
of the multifamily facilities responded to this?
That's always such a difficult thing
to get tenants to recycle.
- So at the public meeting,
there were roughly 12 business owners,
and most of them were multifamily.
And there was a very positive group of people.
There were two people that had some concerns,
but after talking with them, they did seem to be on board.
They weren't the happiest about it,
but they understood the importance of recycling.
We did receive some other public comments.
They wanted to know what,
if they were already recycling something,
if that counted, and it did.
So if they're doing some sort of recycling diversion
from the landfill, that counts, so, okay.
- What's the enforcement mechanism for non-compliance?
- We're trying to be proactive
and not come down with a heavy hand.
So right now, it's making sure
that they're filling out the diversion plan,
and we'll follow up with those customers
that don't turn in a diversion plan,
and that's where we are right now with enforcement piece.
Community Improvement does plan on helping
with the contamination and, yeah,
the contamination part and illegal third party.
- Is there any benefit to them
beyond doing the right thing, quote unquote?
Is there any benefit to them for compliance?
- Ideally, you would replace the amount of trash
with a recycling.
So the recycling is 21 and some change per cubic yard,
and trash is 24 and some change.
So ideally, there'll be a less expensive
on their monthly bill.
So if it works the way that we would like it to work.
- Thank you.
- I appreciate that because that's very difficult
because the whole world uses your bins.
And they set things beside your bins
that you have to pick up.
So that's an ongoing problem.
I wonder though about recycling at places
that have no additional space,
but you're not a volume user,
if there could be bags provided to put paper products,
because some of these offices use nothing
but paper products.
They don't have an additional place to put them.
But if bags were provided that you could set beside your,
I realize that they'd have to get out of the truck
to pick up the bags, but it would be a method perhaps.
- So some of these low volume,
we do plan on giving options of a cart.
So it's smaller footprint for those locations
where the volume just isn't there,
a cart should be easily manageable by our team.
- So it'd be similar to the cart that our homes have.
- Yes, exactly.
- So I don't know how this relates.
You guys are the experts, so no, I think--
- You turn your mic on, thank you.
- I've said this before, but most of the recycling
at my office with paper that we do goes to a shredder.
Do you have any kind of cooperation with those?
- So that would be, one of our comments actually
was that specific comment.
And if you're hiring a third party to shred your paper,
all we need to know is who they are
and their contact information and we'll get with them
and make sure that we're counting that
towards your diversion plan.
- Okay.
- Good question, Billy.
- Okay, I'm just waiting for Mr. Taylor
'cause he always has good ones.
Go.
- He wasted the end.
Not always, sometimes I jump right in front.
No, so I just had a few questions.
So right now there are third party permitted haulers?
- Yes, so we're an open market,
so anybody can sign up and say we're recycling
in the city of Denton and as long as they have a permit,
they're allowed to do so.
- Okay, and so that's for recycling, not for solid waste?
Not for municipal solid waste?
- No, only recycling.
- Okay, and then--
- But let me say a few things.
- Yeah.
- Excuse me, Brian Burner again.
And this is where we get into semantics
because when we talk about recycling,
our mind immediately goes to the blue bin.
And probably 99% of anything that's blue bin worthy,
we get and send to Pratt.
So a lot of our contracted third party diversion partners
are taking things like C and D.
They're taking things like textile.
You go out to the Aldi warehouse,
they've got a tremendous recycling diversion program,
but they're taking film, they're taking pallets.
Things that we don't take and probably never will take.
So that's where those third parties are actually permitted
and that's the information that we're looking to obtain
through that third party process.
- Okay, thank you.
And actually I brought this up
because I actually got this flyer in the mail
a week ago or so advertising like a free dumpster
or a $300 dumpster.
- And that's the bane of our existence.
And that's part of what we want to address
as part of the update to our ordinate,
to the whole solid waste ordinance.
And for anybody who may be watching this,
again, the city of Denton is the exclusive provider
of garbage for commercial and residential.
So if you're hiring, if you're a homeowner,
if you're a apartment builder,
if you're just a general business
and you're bringing in a big name or small holder
such as this to provide a dumpster to provide,
that is illegal in the city of Denton.
And part of it is, it's part of our enforcement
where you're working to minimize those.
However, if you have a company like this
who is diverting, it's not sham recycling,
but it's physically going in, pulling out the materials,
taking it to a third party to be reused.
They'll go through the permitting process.
They'll report, there are tonnages to us
and we'll assure that.
And then those folks are fully welcome here
to operate within the city of Denton.
- Okay, so if it was like a construction
and demolition only dumpster, then they were,
and I guess in order to get their permit,
they would have to demonstrate to the city
that they have a sort of-- - Yeah, they've got a place
to take their gypsum off their drywall.
They've got a place to take the lumber.
They've got a place to take the rock
and the concrete and the brick.
And it's not going into a hole in the ground.
It's going to somebody who is reusing that
in some beneficial manner in a third party way.
- Okay, thank you.
And a few other, more process questions.
I know this isn't gonna happen until fall,
but the diversion for things like scrap metal,
a lot of Fultons, and I forget the name of the place
across the street from Fultons,
they get a steady stream of business
from local and non-local people, companies, et cetera.
Is there any way to simplify the reporting
like where, if you walk into the Fultons office,
you can say City of Denton commercial,
like here's my account number,
and then that automatically, that gets reported to the city,
or does Fultons or other metal recyclers
that are in the city report that now?
- They don't report it now,
and we wanna be very careful of double counting,
so that I think that's kind of part of your question there
is so that receipt that the customer gets
will help them with their diversion plan.
So if they're going once a week, they can just say that,
'cause that would be an in-house in that scenario,
the customer, it would be an in-house program.
So they would say that they're coming twice a month,
and their reporting would go online,
and they'd say these are my two tickets,
and this is what I diverted if they were doing it in-house.
So we don't expect Fulton to do all that work for us.
- Right, and I was wondering if there's a way
to simplify that, like where they get a triplicate
golden rod copy, and they have to go scan it
and upload it every week.
- Can I make those?
(laughing)
- Well, it's been a long time since I've been to Fulton's,
but that's what I remember getting
was the golden rod sheet off the back.
- I'd be more than happy to work with them
and see how we can, as soon as we get it up and running,
I'm sure we can find the pain points
and do some process improvement
to make life a little easier in that realm, for sure.
- Thank you.
- You have the current trends
as far as participation in recycling.
How is that trending over time?
Is it increasing?
Is it decreasing?
Is there many of the same?
- I've been with the city for two years,
and probably the last year and a half,
so I don't have historical data on that.
I do know it's increasing,
but I couldn't tell you by how much.
- Questions?
Got in on 45 minutes.
So, do we have a recommendation?
I'm going to go ahead and move forward.
Absolutely.
All right.
- Well, thank you.
- Yes, commercial and multi-family
is the hardest to get to do this, so kudos.
All right, that is 9.35.
Do we have a motion?
(laughing)