May 22, 2023 Public Utilities Board on 2023-05-22 9:00 AM

I know that doesn't say it's nine o'clock, but she just gave me the countdown. So it's nine o'clock and we have a quorum. So we're called to order the public utilities board meeting for the city of Denton on Monday, May 22nd, 2023. The first item is presentations from members of the public. There's anybody from the public wish to speak? I see none. So we'll close that out. The next item is the consent agenda. Does any board member wish to pull either item A or B? I see none. Do we have a motion to approve the consent agenda? Moved by Mr. Rybeck, seconded by Barbara. All in favor say aye. >> Aye. >> Aye. >> Okay, next item is consideration approval of the May 8th, 2023 minutes. Are there any corrections or changes? No? Do we have a motion to approve? >> So moved. >> Mr. Taylor moves, do we have a second? Mr. Block, I'm still remembering your name. Sorry about that. All in favor say aye. >> Aye. >> Aye. Carries, good thing, Billy already signed him. The next two items we're going to pull together, A, B, and C. >> Good morning, I am Randy Klingle, the Treasury Manager here with the city of Denton and the Finance Department. I have a brief presentation regarding the upcoming bond sale. So this is your bond ordinance in preparation for that. I came to you a couple of months ago with a notice of intent, which is required by law. And after your recommendation, I did take that to council. So the items that we took to council for notice of intent were completed on April 4th. And as stated in the requirements, we posted our notice of intent in the Denton Record Chronicle on April 13th and April 20th, which meets the criteria of publicizing and having this bond ordinance on the 46th day after the 13th. By the time I've received your recommendation here, hopefully today, I'll go to the council on June 6th, and so that'll actually be 54 days. So we'll be within all the rules and regulations of the notice of intent. So for the certificates of obligation for the bond sale, we have $158,500,000, which includes all the projects for the COs plus some issuance costs of about $1 million for this year. We'll go high level over the projects and note that I'm just gonna give you the totals. And on this slide presentation, what I've done is give you two columns, the notice of intent, which you recommended in the council approved last time. And then the bond sale dollar amounts, which we will be taking forward on this bond ordinance today. And it just shows you the difference, if any, of where we went through that process. And during all the timelines and the milestones that we hit for the bond sale, when we come to that in June, the departments analyze their projects, how much money they have, what product availability they have. So each timeline that I come to you with a new project timeline and a new dollar amount, they have gone through the task of looking to see what they can do, how much they can handle. And if they can't, they'll lower their number, which most of the utilities did now for the bond ordinance. And then it's not that those projects go away or that work's not gonna be done, it's probably just gonna be done in future years. So that'll be the theme for most of the utilities. But for solid waste, you see that they came in at notice of intent and bond sale, even at the $16 million. The water department had a reduction of about $12 million since the last time I was here a couple of months ago, so they are $21,188,000. The wastewater department has a reduction of almost $16.5 million, and you can see the line items here in specific orders of how they reduce their budget. Those are also in your backup in your AIS as well. And we also have departments here if you have any further questions specific to the project lines or anything. The electric department, from notice of intent, reduced theirs by almost $32 million. You can see that the transformers are still popular, so those stayed pretty close to a budget and to, well, actually to notice of intent. And then just had some play within other line items there. So the electrics bond sale ordinance item is $70 million even. For solid waste and utilities, the total COs only is 123,784,000. But in addition to the CO sale, we have a bond sale that's also the general obligation portion. And the reason I'm bringing that to you today is because of the refunding opportunities. So we will refund money when we can, and when they're callable, we are able to do so. So for the upcoming bond sale, the 2012 and the 2013 series are eligible, which include utility department and funds. So currently, we're looking at refunding 45,560,000 in par amount on debt that we currently have. And that will give us a projected one time saving of $1.4 million currently. And that $1.4 million, as you can see, is allocated out here on the bottom of my slide regarding what utility or what fund that includes. So that is where we are currently in those savings. And we won't go to sell until next month, so that could have a little bit of variation, but hoping for an increase. But we'll just have to wait until that pans out in June. So my next step with your recommendation, I'll go to council on June 6th to execute this bond ordinances. Then we'll have a sale date for the bond sale, third week of June. Then after that, the city will receive their actual proceeds on July 21st. Any questions? Yes, ma'am. >> Talk to me about the cost to issue bonds. >> What's in that? The cost issue bonds includes our outside council and our outside FA. And then there's also some, in this actual issuance cost line, is some movement for flexibility and pricing once we go out in the market. >> Okay, thank you. >> Mm-hm. >> Question, in general terms, how are these departments able to reduce their requests? Are these projects eliminated? Are they put off? Are they covered under something else? Each milestone, they have a conversation with their own department as well as the budget team and see what they can handle currently, physically able to do, and what products and what availability they have. And also, what do they have possibly in cash reserves or savings from other things, and then what they physically can do. So some of those items are not going away, they're just gonna fund them later. So you may see the same list that they went from notice of intent to bond sale to flat to nothing, next year you'll see a number there. So I'll just push it out until they get the product availability and the time to do those. >> Thank you. >> Yes, sir. >> Your turn, go ahead. >> There's been much talk in the news recently about inflation and interest rates. You're showing about a 2.75% interest rate. Is that where the municipal bond or market is right now? >> The 2.75 here is just on the refunding portion. The debt, the new debt that we're bringing on, most of the utility debt is 20-year debt, and the portion of utilities for the electric is 30-year debt. So the first 15 years of this debt is at 5%, and the outlying years up to 30 is down at 4%. >> Thank you. >> Questions, okay, do we have a motion to approve items B and C? >> Did you say B and C or just B and C? >> B and C. >> Okay. >> Did I say A? >> No, no, no. >> All right. >> I'm sick of the consent agenda, sorry. >> So moved. >> And a second? >> Second. >> Mr. Bybrook, seconds? All in favor, say aye. >> Aye. >> Aye. >> Opposed? Carries, item D, professional services agreement with Kimley-Horn. >> Good morning, David Brown, project manager, city and water utilities. Excited to bring to you a expansion to 26MGD over at our Pecan Creek water reclamation plant. So let's discuss, TCEQ requires 7590 rule that we talk about. At 75% of the permitted flow, the average flow, daily flow MGD that we have, we are, once we reach that, we're required to go into design for an expansion. At 90% when we reach that, we need to be in construction and ready to go. So with that, let's look at the current, what's going on out there right now. Currently, it's at 21MGD with a peak flow of 46MGD. That's many gallons per day for a peak two hour flow. That would be during rain events. We did file for an amendment to our TCEQ permit and we, it's administratively complete as of February 6th when this was, we started on this. And we anticipate we'll get that, those permits amended in the, in the summer. So, right now we have a master plan going on all over the city. It didn't, as far as conveyance, it's also plants and wastewater. And part of that is a facility master plan at the concrete water reclamation plant. Part of that facility master plan, as you see, it recommends a 5MGD expansion of MBR technology, which and solids handling and a disinfection improvements. I might say this would be the first expansion as far as a new train, cuz that's what there's called, there's a north and a south train. You can see that on there. This would be the first expansion of a, of a new train over there since 1980. We've investigated, you know, membrane bioactive treatment process, which, you know, includes a bioactive treatment as well as a membrane that are very high quality effluent. So you cut down some of the, some of the initial process, but you're able to use a membrane technology to get a very, just a super-duper effluent. And also it allows for more treatment in that, in that area, in that train area. It's also expandable, it's modularly expandable. So with that, this enhancement, you see there that it will, it'll help to purify the water that we're putting back into the system for the city, the community, and those, that sensitive pecan creek stream that eventually ends up in Lake Louisville. With that, we also have a solids handling improvement. Currently we utilize built, filter presses, and what that is, that's for your press of your solids. And then that goes also into, you know, our dino dirt. That process feeds into the dino dirt. Kimley Horne will partner with us to evaluate what is best for our solids handling in this process. It will be built out for the ultimate built out for the plant, meaning it's not just for this expansion. It's gonna handle the plant plus whatever else we need to put in. This solids handling will be able to handle that. Also that we have disinfection improvements. Currently we use UV and it's a bottleneck there. Everything goes into the UV system and then goes out to the stream. So we're gonna look into that and also improve that. So with that, we use the pre-qualified list 7574 to select Kimley Horne. The staff recommends that we select Kimley Horne with a design contract. This will be a design contract for $14,952 million. Anybody have any questions? >> Questions? >> Yes, sir. >> What is your max build out on the facility? >> Right now I believe it's, what is it, 110? We're sizing our head works right now for up to 75. >> Okay. >> And that's another project that's going on. And this is in conjunction with this. So our head works is up to 75. So that would probably be in 40 year span, 75. >> Okay, so the solids handling plan you were discussing, it's gonna be sized for the 70? >> It's gonna be sized for the ultimate build out, yes. >> Okay, thank you. >> Yes, sir. >> Question. I was behind you a little bit, I was reading some of the backup before the end. Did you say what you thought your estimated cost of construction was? >> This estimated construction with contingencies is $134 million. >> Okay. >> And we're gonna use a CMAR method of delivery, meaning we can, because of product flow and the time of getting some of this equipment. We're gonna use CMAR method so we can evaluate some of the technology in order to purchase those quicker, get an economy of scale, there's some value to get those here and ready to go. >> So yeah, I know what CMAR is, but that's, yeah. So Kimberly Horn, you're expecting to run the project, be basically almost the GC as well. They're gonna be the design, the CMAR will go out on another separate contract. Yeah, we'll evaluate those that can help us with the CMAR. Yes, sir. >> Other questions? All right, do we have a motion to approve the Kimberly Horn and associates contract to the amount of 14 million 952? >> So moved. >> Mr. Taylor moved. Mr. Rebick seconds. All in favor say aye. >> Aye. >> Motion carries. >> Thank you. >> Item P, Alamo Transformers Supply Company Contract. An amount of $10 million. [BLANK_AUDIO] >> Good morning. [BLANK_AUDIO] Let's see. I'm Rainey Key with the Municipal Electric, Electric Engineering Supervisor. Bring in a contract for Alamo Transformers. Okay, our lead times are currently 80 plus weeks. The industry trend is moving towards two to three years. Actually looking into the future is probably gonna be more like four, possibly five years. Current transformer inventory, we're below our minimum levels at the moment. This contract will allow DME to get back to the minimum operating levels for maintenance and outages and could also possibly help out with projects as well. Shipment for transformers are sporadic. We have a spend schedule, however, it's not usually correct. [BLANK_AUDIO] With this contract, we will rebuild, refurbish our current transformers and return to service. Right now, on average, we could send out maybe 200, 300 transformers with this contract. Rebuild and refurbish transformers provide significant cost savings and quicker lead times compared to the new transformers, which is pretty easy with a three to four year lead time. The opportunity to purchase rebuild and refurbished from other utilities, this is most likely what we will utilize this contract for for the majority. By asking Alamo what they have on hand whenever we are at our minimums like we are right now. This will provide sustainable practices with pickup and disposal of used oil and scrap transformers. We'll be able to purchase the transformers with shorter lead times and apply credit from scrap transformers that they pick up from our DME yard. This will provide a temporary relief in the supply chain challenges that we are facing right now. This is the table of our estimated spend. We're looking at about $3 million a year with a $1 million contingency. This will help out with, I've brought through five declaration of emergency transformer purchases so far. And with that, it's been a little over $2 million. So this would help tremendously with the slowing down of the declaration of emergencies that Marcella loves so much. And at that, I'll take some questions. Yes, sir. >> Where did you come up with your cost estimates? There's nothing in here that says anything about that. I mean, is it like, are you, at this point with transformers, is it like a comparison to, I've got Home Depot, Lowe's, and Ace, and I don't know what the price is gonna be. So, I mean, I looked at your evaluation sheet and, of course, I think those are always very subjective. >> The pricing is pretty much the same with all of them. It's gonna vary by the size, the voltage, and everything else. The only difference is we've done the declaration of emergency. And a lot of the evaluation went with how quickly people respond and how much information we can get from them at the time. >> Well, if it's an emergency situation, shouldn't you have more than one choice of where to get it? >> We do, and that's what the declaration of emergencies are. So we still have the option to use Solomon or anybody else, but it would be a declaration of emergency. This would just be, we would be in contract with them. And also with this contract, we would be able to have them in contract to come pick up our current transformers that we take off of projects and maintenance. And so it wouldn't be an emergency for that, and also to get rid of our oil and our scrap. We currently don't have a contract for that. >> Okay, where'd you come up with the pricing again? That's just the $3 million for each year? >> Well, you're talking about a $10 million contract total. >> $3 million a year. >> Yes, $3 million a year, that's just an average spend that we came up with by asking around the average prices for each size transformer. You're talking about from a half KVA all the way up to a 2,500 KVA at different voltages. >> And we've seen cost sheets before where you said here's the current prices. I just didn't see it on this presentation, so. >> It's gonna change every single time that you go out and you ask them. >> So it's like just awarding it to Home Depot loads or basement, hardware or whatever. >> Yeah, Billy, I think the reality is that we've seen a 200% increase in pricing of these transformers. And to be frank with you, there's no end in sight on that. And we continue to see supply chain issues. We continue to see raw material being diverted from transformers to the electric vehicle industry. And so it's really a crapshoot for us, to be honest with you. And I think what Randy's done here is try to give a best cost estimate that we can, not really knowing where we're gonna be. If it's not enough money, we're gonna come back to you and ask you for additional appropriation. >> These dollar amounts can roll to additional years, correct, Lynn? >> Yes. >> Yeah, and I think what he's showing is that that $10 million will be over three years, but if we find ourselves that we spent all of it in a year and a half, then yeah, we're gonna have to come back for additional appropriation. >> Yeah. Mr. Rybeck, you had your hand up? >> Yes, I had my hand up. [LAUGH] I'm more concerned about the weeks than the dollars. 80 weeks, that's almost a year and a half. Now, you're saying that's for an average utility transformer. >> Yes, sir. >> A new one. >> Yes, so our current contract, we still have POs that are open that are at two years right now. >> Wow. >> Wow, so may I assume that as the transformer size and complexity, i.e. higher voltage, goes up, that the time is extending? >> No, sir. >> Okay. >> Not with the refurbished, is what you're saying. >> Not with the refurbished or even with our current contract. The voltage doesn't, they're all around two plus years. >> Wow. >> In fact, our three phase transformers are actually shorter lead times, so. >> Yeah, and I just want to point out that again, these are supply chain issues associated with the raw material that is associated with the transformers that are being diverted. But in addition to that, there's current efforts at the EPA to put in additional standards that will further cause delays. And so that's why it's so important for us to get into the manufacturing process as soon as we can. Get in line, that way when those things happen, we're already in line and we're not having to kind of restart all over again. But certainly, again, I don't want to give a doomsday scenario here. But it's, we're trying to purchase as much as we can, as quickly as we can. That way we can continue to operate, not just to serve our current customers. Certainly that's our number one priority. But also to have an inventory level in the event of an emergency. And then thirdly is to serve new development. >> Right, in addition to the transformers, maybe that's just the area you're working on, but does this also apply to switch gear, main distribution panels? >> Yes. >> The same equipment that's getting the power to the transformers? >> Yeah, Lee, we're having challenges right now with wood poles. And we're looking at other options as well. That's another discussion that we'll be coming back with you. But yeah, we're having issues across the board. And it's not just DME, it's industry wide. >> Well, I understand that. I mean, I realize we're not being singled out for this. I was just curious, a transformer is a relatively straightforward piece of equipment to build. But you start getting distribution panels, and switch gear, and the complexity is increasing. I'm just wondering if those time frames are even worse than the 80 to 100 weeks that we're talking about. >> They're not worse. However, they have at least doubled. So when you talk about switch gears, they've more than doubled in lead times. >> So what are they now? >> So for right now, they were about five months. They're over a year at this point. >> So they're now in the same boat as the transformers essentially? >> Yes, sir. >> Okay, so the whole industry- >> The whole industry. >> Has the problem, regardless of what part of the- >> Yes. >> Electrical supply chain we're talking about. >> Yes. >> Thank you. >> I have a question, go ahead, no, go ahead. >> So these are rebuilt and refurbished? >> Yes, sir. >> Are there any concerns about reliability or lifespan? >> Honestly, no. In fact, right now, these have a better production rate than our new contract. Our new contract, the transformers that are coming in, we're seeing a higher failure rate. And with these, the warranty that's in place, if they show bad, then we'll get a replacement. And so far, we're having a very good turnout from our refurbished. >> What's the cost difference on average between a new one and a refurbished? >> That varies because there are so many different sizes with single phase, three phase, all the way from half KVA to 2,500. However, they are a lot less expensive. >> Can we divert more resources into a program such as this versus going after new, if they're used as better? >> You can, however, the amount that you would need would not be here for the refurbished. >> Gotcha, thank you. >> They need inventory of refurbishable transformers and so then we have the same issue. >> Yeah, you're not going to have the amount that you would need on the refurb contract. >> You stole my question, but thank you for asking it. >> You're welcome. >> I applaud your creativity in trying to solve this issue because boy, that's all we have to say. >> I would also just expand a little bit on what Randy said. So we are seeing a larger failure rate on transformers and just to give you a preview, we are, through the budget process, going to be requesting for a piece of equipment that's pretty standard in the industry to test these transformers when they come in the yard. The last thing we want is to have our folks putting up these transformers and then they fail, you know, when they're working on them. And so that is, you know, about a quarter of a million dollar piece of machinery that we're going to be asking for to do exactly as these come in. We're testing them in the yard before they ever go out. But we're seeing about a 20% failure rate on new transformers. >> On new? >> So, yes. >> Is it new? >> On new, yeah. >> Listen. >> Yeah. >> Yeah, I don't think it comes with AI yet, but if it does, we'll look into it. So we won't be able to plug in our cars anytime soon, so. >> I'm sorry. So this is based on your current inventory too, right? >> Yes. >> What your needs are going to be. How is your current inventory? >> Depending on the size. So we are at below minimums on certain sizes. On certain sizes, we have an abundance of-- >> Like the larger ones probably? >> The larger ones we have over what we need currently. However, we do have projects where the growth is steadily happening. And we will probably hit a low at some point at these sizes as well. But on our most common single-phase transformers, on a few sizes we are below our minimums. >> Is that right? Okay. Thank you. >> And I know we've talked about this before, but what's the impact to the new development? Have we told people to slow their roll? >> Yeah, we work with development services and we got some information out to developers. Randy and Jerry have gone to a couple places and talked with developers as well, let them know what's happening. What we've been trying to do is work with each developer, each development, right? Make sure that we understand what their phasing is, right? Make sure that we prioritize people. We try to do a first come first basis type of assignment on these things. And then we have folks like I think Brad Watts is here, you know? Brad's one of our superintendents, and they get really creative out in the field on how we energize people and what we can do. And so we're certainly not doing anything outside what's norm or dangerous, but certainly we're trying to accommodate everybody as much as we can. Our number one priority though is our existing customers, right? And in the event of emergency, so we're holding onto stock and we know we are, and it's a difficult conversation we're having with developers, but we're not going to jeopardize our current customers for new development that's not even there yet. >> There's some jumper cables out there. >> You can talk to Brad later and tell him what they're doing. >> All right, and -- oh, go ahead. >> Is there a possibility of forming a partnership with other utilities? >> Yes, there is, and I've been in talks with a few other electric utilities about that. >> Okay, thank you. >> And this contract included refurbishing from other utilities transformers, correct? >> Yes. >> Did I steal your -- oh. >> I would just point out real quick, you know, Mr. Plotk, remember, for new development, if it's happening in dual or triple certified area, we're in competition, right? And so there's not a lot of cooperation in those areas, just be sure of that, right? And so within our existing area, I think that's a different situation, but when we're out there competing, you know, you're going to use everything you can at your disposal. >> Are the transformers that are out on the poles in the residential areas, are those the ones that you're most in shortage of? >> The ones that are on the poles, right now, we are low on certain size of the overhead, which is what you're speaking of, but the biggest issue that we face are the pad mounted, so the ones that are underground. >> I wouldn't have thought that, but oh, eye opening. All right, other questions? Do we have a motion to approve item E? >> So moved. >> Second. >> Thank you very much. >> All in favor, say aye. >> Aye. >> Aye. >> Carries. Okay, item F, approve a contract with Peer Technologies U.S. Inc. for the amount of $10 million. >> Good morning. >> Good morning. >> My name is Tyler Dawson. I'm with Water Utilities. It's been a couple of years since I've presented to this board. It's good to be back in front of you. I'm here to present a contract for approval for the condition assessment of our water transmission mains. Starting off with some understanding of what assets we're looking at, transmission mains are typically, we consider them 14 inches in diameter or larger. Really, we define them by their function, which is these transmission mains send water to different parts of the city before they branch off to serve individual homes and businesses. They carry much higher flows than your typical residential water mains running down the street in front of your house, and they are critical assets. They ensure that all of our customers on all regions of our city have enough water, not only for their use, but for fire protection as well. They also, interestingly, have some of the longest design life of our water assets. Your small diameter water mains are typically designed for about a 50-year life cycle. Some of your mechanical assets, like your plant assets that we constantly maintain may have as low as a 10- to 25-year life cycle. Transmission mains are typically designed for a 70-year life cycle. So if you look at any of these mains that's reaching the end of its design life now in 2023, we're talking about mains that were installed in the early 1950s. So there's a lot of unknowns. They are buried assets. We don't get to put eyes on them in any simple method. So we're looking at doing assessments on some of our most critical transmission mains to determine where they might have failure points and how much life they have left in them. The methodology on this is equipment that's going to be sent through the pipe. Typically under pressure, there's a variety of equipment that can serve different functions and tell us different things about each pipe. Some of that includes acoustic technology that can listen for irregular flow in the pipe. So if there is a leak, there's a certain acoustic signature that can lead us to believe there is a leak. Same with if there are air gaps in the pipe. If we're not sufficiently releasing air from those pipes, there's a certain acoustic signature that goes with those and some equipment can tell us where those spots are. There's also equipment that can look at the steel cylinder within the pipe wall. So your typical transmission main is about a three-layer structure. The center of that is a steel cylinder. And then there's a mortar coating or concrete on the inside to protect that steel from the water so we don't have rust and corrosion on the steel cylinder. And then there's more concrete and sometimes some reinforcing bars or wires on the outside of the steel cylinder to provide more reinforcement to hold that water pressure in. The most critical part of that is the steel cylinder. And there's some electromagnetic technology that can send an electromagnetic signal through the pipe wall and tell us where it's thinning. So if water has bypassed that mortar coating on the inside and started to corrode the steel, we can find that before it ruptures and causes a main breaker leak. There are also camera technologies that can just get a visual look at the pipe, see if you have cracks, see if there are any signs of degradation within the pipe. Those inspections typically don't involve any excavation. They are considered trenchless technologies. The only exception to that will be for access points. So we have to be able to deploy the technology into the pipe and then retrieve it at another point. So sometimes we can do that through hydrants. Sometimes we can do that through other existing approaches to the pipe. In other cases, we will have to install an access point, which luckily we can do at our own timing and not under emergency scenarios such as a main break. And then the most important part of this is we will get reports with the vendor's review of all the results. That will tell us a couple of things. One, where we have known or potential leaks that we need to send out and repair. And then it will tell us overall pipe condition, which will help inform capital decisions. Make sure we're spending money where we really need to, not just because a pipe has reached a certain age. So the biggest improvement that we'll see from this, the most visible improvement is preventing main breaks. Again, especially with being able to see thinning of the steel cylinder in the pipe wall, that will tell us in advance of a main break that there is a potential break coming. So any main break, we know, we don't like it. We don't want main breaks. We want to prevent them wherever possible. Any main break can have the potential for water outages. If we have to shut down pressure to make the repair, any time water inside the pipe comes in contact with anything outside the pipe, we have potential for contamination. And then if you're losing water, that could result in loss of fire protection or even a boil water notice if we can't maintain the TCEQ required pressures within that pipe. Of course, some of the smaller but more visible effects. Any time there's a main break in or near a road, we're going to have traffic interruptions, both for the repair of the main break and sometimes for the water itself. And then temporary damage to whatever rests over that main. So the streets, the yards, we're going to have to dig through that. There may be even damage from the break itself that we have to go back and backfill and restore to its original condition. So that's for any main break. We're talking about our larger mains here with higher flows. They're going to have a higher impact. We had one unexpected main break on a 16 inch about four months ago that it was more difficult to repair. It caused a bigger issue. We want to prevent those wherever possible. We can we can justify tolerating a few of our smaller main breaks. You know, the impact tends to be very localized. They tend to be easy to repair. We have those repair parts in stock. It's pretty easy to get to those and fix them with minimal impact. But on the larger mains, we want to prevent those wherever possible. And then to look at the cost side of things, we just talked about the impact to a single main break, the impact that comes from a single main break. But when we're talking about capital, these mains, they go on the average in the range of about $500 to $15 per linear foot to install. So if we were to replace one of these mains today, that's what we would be paying to restore that asset and renew it to that 70 year design life. You annualize that down to about seven to twenty one dollars per year over the life of that investment. The inspection costs, depending on which technology we deploy and we'll work with a consultant to decide which technology is best for each pipe. That ranges from about five to twenty five dollars per linear foot. We assume I assumed an annualized life of that inspection of about 10 years. We could go back in 10 years and repeat this process. We could wait a little bit longer and reduce that annualized cost. But that comes down to 50 cents to two dollars and 50 cents per year per linear foot. So by simple comparison of capital cost versus assessment cost, at worst, we're talking about a 35 percent of capital expenditure. At best, we're going to be much lower than that. And ideally, we're going to be able to drive capital decisions by saying, yes, we have a 70 year old pipe here, but it may have 10 or 20 years left in its life. Again, these are buried assets. We don't readily get eyes on these pipes. We don't know the actual condition. But the best we can do sometimes is make assumptions by how old they are, what they're made of, what their break history is. So this will give us so much more information and help us make smarter capital decisions and defer a lot of those installation costs for the right time. At this point, I'll take any questions. So as you're replacing mains, what percentage or how much of your mains that you're replacing would you have not replaced if you were able to inspect them prior to replacing them? That's a really hard question. And we don't have firm numbers on that. We do find that to be an issue sometimes, particularly it's easier to see in our small diameter mains that those are more common to replace. They're done at higher numbers. But we may be replacing half a mile of water main and find that there may be one or two localized locations where based on soil conditions or installation factors or some aspect of that pipe and the effects of the environment around it, those are the really bad parts. But we end up replacing the whole pipe without necessarily knowing where those bad pockets are. So a technology like this would minimize? Yes. Speaking of the technology, while this whatever testing methodologies you choose or between you and the consultant choose and that work is going on, will water department personnel be witnessing any of this or watching this as it's underway? Absolutely. It will be heavily monitored. There's a lot of preparation work that goes into it, too. Oh, absolutely. I made reference to the access points to make sure we have proper access points. We're also looking at what exists on that entire stretch of pipe. We may be doing, say, half a mile or a full mile and one deployment. And we need to know where are there valves that we may need to open or close or valves that may hinder the equipment from coming through it. So we'll be doing heavy research into the original designs of these pipelines. And we'll make sure we know, put some eyes on wherever we can to make sure we know what's there. And then when it comes time to do the actual inspection, we'll have both contractor personnel and water utilities personnel on site to execute that inspection as best we can. Well, that's great. What kind of turnaround do you typically get on the reporting? We did inspections on our raw water pipelines coming from Lake Louisville. And I'm not sure about the turnaround. Stephen, do you know what timeline we're on on those projects? This is with the same consultant and similar technologies. Stephen Gay, Director of Water Utilities. Mr. Rybeck, that inspection, we're still pending the results from the raw water line. And it's usually about a three to six month turnaround time, depending on the amount of data. Because they have to go through all the data, analyze it, and then come up with the recommendations. Okay, very good. Thank you. Go ahead, David. Thank you. So I have several questions. Is this the first program we've had to do the internal inspection of water mains? So again, we've done a similar inspection on our raw water mains. There's about a nine mile set of parallel pipelines that goes from our Lake Louisville raw water station up to the plant on Spencer Road using similar technologies with the same consultant. To my knowledge, in my time with the city, this is the first time we've executed this on finished water transmission mains. I thought we had the camera before. One point of clarification is in 2021, Freeze and Nichols launched a study that looked at our transmission main, and they did a condition assessment on them, identified the most critical mains and the ones that had the highest consequence of failure and probability of failure. And those will be included in this study. Now, what you may be thinking about, Susan, is the assessment that we did on the raw water line. So we did look at the raw water lines with the pure technology equipment. So we're using the same methodology on our active transmission of finished water. So that's the distinction. So the previous study was like a desktop analysis of risk, basically? Basically, looking at, OK, method of installation, does it cross a railroad track, depth, soil conditions? Is it a dead end? Is it serving a major, densely populated area? Those types of factors were taken into consideration, as well as age and pipe material as well. And I don't want to get too in the weeds, but I'm curious if we know, since the 1950s, are we looking at how many different technologies of manufacturing technologies? Do we have like cast iron and PVC as well as the pre-stressed concrete, or is it pretty much all pre-stressed concrete? Yeah, I think it's pretty much all pre-stressed concrete because of the pressures, because the construction methodology of the actual pipe is based off pressure and the pressure rating and the flows. And that's the most favorable design. You can correct me if I'm wrong. Sure. I think the only different technologies we would see is there's bar wrapped and there is a pre-stressed wire. So we'll see some difference whether there's a wire wrapping around the steel cylinder encased in concrete or basically rebar steel bars around the concrete. I know Pure is a technological leader in the pre-stressed concrete analysis. I'm also curious, this is a five-year contract and you're showing you on an inspection about every 10 years on average. Is the plan to turn this into an ongoing program to do half of it every five years covering the whole system or initial assessment in only high risk areas? Since this is the first time that we're really doing it on the finished water side of the equation, we're going to look at the data and that's going to drive the frequency of this analysis. So it will become a program. So once we get the analysis done and we identify what we need to fix, we'll also come up with a frequency of re-evaluating this infrastructure. And this amount in this contract, I guess is it 10 million? 10 million over three years, yes. And this will cover an initial assessment everywhere or is this only the higher risk? It is the higher risk. It's pretty broad. In fact, I can show you quickly, I have some backup slides here. If you can see the colored lines on here, that is our working map of project areas we want to touch. If you remember the map of all of our transmission mains, this covers probably 60 to 70 percent of them. A lot of those were installed in the 50s and 60s, and so those are getting near end of design life where it would be critical to do that assessment before we replace. We also have in particular up here the 54 inch main that takes water from the Ray Roberts treatment plant down to the city. That is the only pipeline that brings water from Ray Roberts down to the city at this point. So even though it is only about 20 years old, we want to do an assessment there because it's highly, highly critical. Yes, so I think while we're approving this contract, what I like seeing here is this long term program to risk based assessment of these pipeline assets because some of this stuff will last 100 or 150 years in the ground if it's, you know, well cared for and doesn't get a lot of pressure variation. And other could be extremely critical if it fails or has a premature failure. So being able to do this initial assessment and then set up a risk based analysis going forward, I think, it sounds great. Well said. A lot of the variation and the condition of the pipes over time is based on the installation practices of the pipe. And we found that in our raw main where we had one installed in the 50s, one installed in the 70s, the newer pipe was installed without proper bedding. And it has actually started to fail sooner than the pipe that's 20 years older than it. So that's a very critical factor and the ability of these pipes to last and continue to service the customers. And it's really hard to know what those installation practices were in the 1950s and 1960s. So this will help identify that. Other questions? All right. You had one just it's disappointing to just get one response. I know that one hundred three hundred sixty. Obviously, there's probably people that weren't interested in that at all. But thirteen was the number of suppliers that viewed the solicitation itself and only one response. That's that's true. We did have two that said they intended to respond and did not follow up. I don't know the reasoning behind that. We were happy to get Pure's response, though, and two reasons we were happy with their proposal. One, their pricing was right in line with our estimates. So we were happy to go along with their pricing to they are, as you mentioned, a leader in this technology and an industry leader for sure. And we actually reached out to them to help build our specs since they were an industry leader. So they were a perfect fit for this contract. Other questions? All right. Do we have a motion to approve Pure Technologies, U.S. Inc. contract for ten million dollars? So Devin moves. Do we have a second? Thank you, Barbara. Second. All in favor say aye. Motion carries. Thank you. Management reports. Madam Chair, members of the PAB, just going through the future agenda items. Again, no changes to to the items that are on there. A lot of budget stuff coming on. I think I've said that every time that we've met. There is a presentation today on some of the forecasts. So I think Danielle, the finance team will have that with you today. And then going to new business, a new business item. We've already completed the the dead low trends that was provided at the last meeting. And we did have a question last week, a request at the last meeting for an update. I wonder if you're working on a memo to you on that. I hope to have it to you for your next meeting. So with that, that's all we have for the management report. Happy to answer any questions or if there's anything else you need. I see none. Brings us to concluding items. Does any board member wish to say anything to the public or add something to a future agenda? OK, and we'll go into work session. The first one is receive a report and hold a discussion and give staff direction regarding fiscal year 2023, 2024 utility budgets forecast. Good morning, P.U.B. Danielle Stanford, budget manager. And this morning I have a brief presentation on the utility forecast presentation. So this is what guides the budgets that you will see in the next few months. So today we'll go over a quick overview of the budget process, a growth forecast for each utility and then the next steps. So our budget cycle started in January of this year, so we did our budget kickoff in January. In March through May, the budget team worked with the departments for continued budget development and planning. In June and July, you will see presentations to both P.U.B. and to city council. In August, we'll do our budget workshop with city council and any follow up workshops in August and September. And then our public hearings in September and finally budget adoption and rate adoption in late September. So our financial assumptions include Hunter Cole being accounted for in year 2024 for all utilities. Solid waste forecast is based on customer counts, tonnage and service frequency. The water wastewater forecast is based. It's a volume based forecast. We do continue to seek alternative funding sources for the water wastewater fund. And then finally, the Lake Ray Roberts plant expansion is accounted for beginning in 2024. And then finally, the electric forecast is based on megawatt hours. So the solid waste forecast is seen here. It's broken out into four different components. The residential customer count that's growing on an average two and a half percent increase from from this year forward. The front load, side load hauls, the roll off hauls and the landfill transaction count. The front load side load is growing at an average of one percent. And then the roll off and landfill transactions are growing at one point seven five percent. So this is the water volume forecast. So if you remember last year when we shared this, the Lake Ray Roberts plant expansion was not planned until 2032. This forecast does include that being moved up to 2025. And that's just based on the master planning effort. We've evaluated both the water and wastewater demands in the current development climate and identified the need to accelerate that expansion. This slide shows the water production and the trend of that year to date. As you can see, the red line is where we are year to date. Yellow is last year and the blue line is the budget. So we are above above both last year's demand and the budget for this year. Could I can we go back just really quickly? If I'm reading this right. Sorry, I went the wrong way. No problem. There you go. So the gray is the five year, the gray is the five year average, and that's two and a half years on top of that. So so there has been significant like the five year average. So years three, four and five were at or below that gray line. I'm sorry, say that again. OK, I'm just saying the five year average was noticeably lower than our last three years. So that means the four years ago and five years ago were were significantly lower. So we continue to see that significant growth. Yes, sir. That's correct. Thank you. Sure. So the water demand is a little bit higher than the other utilities. You'll hear more about this in the next presentation. And you heard a little bit in Tyler's presentation on why the water growth is projected at four percent with wastewater at three and a half percent until FY 28. And then it slowly declines for electric. This is their residential and commercial service forecast. So both of these are are lining up with solid waste projection rates. So the the residential is growing at about two and a half percent. And then the same for commercial, it's an average of about one and a half percent in the future years. So this slide shows the same information in graph form. And then the next steps will be back to you on June 12th and June 26th with our utility budgets presentation and the rates and then a follow up. We'll ask for your approval on July 24th and then we'll begin our city council presentations following your recommendation. And with that, I'll take any questions. Questions. It's too early. It's too early to know what to ask. Go ahead. I think you want to ask something. I do want to ask each year you have a budget workshop with the city council. Yes, sir. And we see the budget preliminary and then the revised. I'm wondering if the board would be interested, but I'd be curious if it might be useful for us to consider having at least a mini workshop to go over the budget in more detail. I mean, I think we'd be happy to have a workshop or if you make if you make the information available, that would be good. Yes. So what we do with the budget workshop is we put all of the so for our supplemental requests, we request a white paper for each supplemental request. And what that does is really explain the need, explain the cost, explain, you know, whether it's a one time recurring, how that fits into the bigger picture. That's what we do with the budget workshop. That's what we do with the budget workshop. We do have the same for pub, wherever it fits, possibly on the July date where, you know, you're going for approval or if you'd rather have it at the follow up at the end of June, we could certainly do that as well. I think I'd feel better if we got it in June. We'd have some opportunity to review it. Okay. You don't need anything further, right? Thank you very much. Thank you. All right. Next, we will receive a report, hold a discussion and give staff direction regarding the update on the wastewater master plan. They saved the best for last. Yeah. I am still Stephen gay and I'm still the director of water utilities and I even have my own presentation is called out. So we're going to go through the wastewater master plan update. We're going to talk about the phasing and growth that we've seen. We're going to talk about the five year a little bit about the five year capital plan. And we're focusing on both Hickory Creek Basin and the Clear Creek Basin of a watershed and then we'll discuss next steps. So phasing and growth, we're projecting about an eight point one percent growth in population over the next five years. Now, this this information is developed in concert with our development services team. We've looked at the comprehensive land use plan. We've looked at all of the projects that are currently under construction and or those in the development review process, evaluated them. And that's where we're coming up with this number. Looking forward, all good master plans, we want to look at a little bit further out. So we took another we took a snapshot ten years out. We're seeing that growth cool a little bit, dropping down to about an eight point five percent increase. And then at the twenty five year horizon, we're looking at roughly about two percent growth rate. If you notice the shading, it's just demonstrating the growth that we see the projects that we know that are on the books and that development services is having conversations with developers on currently. So when we met with you in October, we we took a you know, the sixty thousand foot view and we looked way out and we said, hey, if we were going to build all this stuff today, this would be the conveyance, the infrastructure that we need to serve these communities into the future. And that was a price tag of about one point two six billion dollars. As all good master plans do we as the closer we get, the more data we get, the more refined our projections get, we look to see what's more realistic within that five year window. We know that Hunter Cole is coming online. We know that we have significant growth within our system. And these improvements are what we believe is what's needed to support the growth, the future growth of this community. Yes. And so now that's dropped from one point two six to five hundred and seventy two million, which is I think a pretty good reduction. So looking out at the Clear Creek Basin, again, we looking at the growth, we're if you've seen anything that's happening along the Milam up in Milam Creek, which is on thirty five in Milam and Ganzer Road, we're seeing some unprecedented growth in that region as well. This this snapshot took into consideration a couple of municipal utility districts at the furthest far north end of our CCN or our E.T.J. That was a cost about three hundred and forty five million. Again, with all good master plans, we've taken and honed it down, looked at that five year window, we see what's more realistic. And this is the conveyance and treatment that we're looking for currently. So with regards to conveyance total about two hundred and ninety three million and treatment facilities are roughly three hundred and five hundred and thirty two million for a grand total of eight hundred and twenty five million, which is less than just what we were projecting in the Hickory Creek Basin. So our next steps, we're going to complete the five, ten and twenty five year improvement plans, refine those numbers, do the financial analysis, have another meeting with the P.B. and city council to review the final report or what we propose to be the final before we complete the report. And then we'll we'll seek final approval once complete. And then with that, I'll stand for any questions. Questions? Again, too early. Okay. All right. Well, thank you. Thank you. All right. With that, that concludes the agenda. Billy, do we have a motion to approve at nine fifty nine? Okay, we are adjourned.