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 >> Okay, it is 9 o'clock and we have a quorum so a call to order the public utilities board

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 for the City of Denton on Monday, June 12, 2023.

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 Our first item is presentations for members of the public.

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 Is anyone from the public wishing to present?

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 I see none.

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 So we'll move on to the consent agenda.

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 Does any board member wish to pull any items from A through F?

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 >> A. >> A.

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 Any others?

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 I see none.

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 Do we have a motion to approve items B through F?

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 Thank you and a second?

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 >> Second.

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 >> There'll be seconds.

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 All in favor say aye.

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 Aye.

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 Opposed?

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 Item A.

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 >> Good morning members of the PUB.

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 Randy Key, Denton Municipal Electric, electric engineering supervisor.

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 I'll gladly take any questions.

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 >> It was just a big number.

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 >> It was a big increase.

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 >> Yes, sir.

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 >> Really wasn't a presentation on how we got there, it was just a lot of statutes quoted.

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 So it gets a little confusing.

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 How did we get there?

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 >> So we were in talks with a lot of other electric utilities.

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 And we heard that wood poles were becoming an issue.

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 We decided to put in a bulk order as the lead times went from 14 weeks to six months.

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 We put in the PO.

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 Stella Jones came back and said that they couldn't fulfill

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 because we haven't done any price increases.

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 So they sent over the price increase and it was an 85% addition.

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 >> Okay. Was that already in the contract to have increases in price?

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 >> Yes, sir.

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 >> And it's only due to an extension of the realization of when we can get them.

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 Is that correct?

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 >> Yes, sir.

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 >> Okay.

41
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 So is this going to -- this could possibly change as well, right?

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 With the current atmosphere of --

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 >> I see it increasing even more, yes, sir.

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 >> Okay. All right.

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 >> Yeah. I mean, I'll just mention to tag --

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 tag a little bit on what Randy is saying.

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 This is another supply chain issue, frankly, but this one is very unique because this one has

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 to do with the creosote that's used to cover the poles.

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 There's some issues going on with that.

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 It's also limiting the supply.

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 And so in addition to adding these dollars, we're also looking to other opportunities

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 like utilizing other steel structures when it comes to our distribution system.

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00:02:56,840 --> 00:03:02,360
 But again, that's part of the normal operational decisions that we make.

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 Obviously, we don't have a whole lot of steel poles out there for distribution,

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 but in the event that we need to, if there is a shortage, if we can't get these orders in,

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 we'll definitely do that as well.

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 But it's certainly just another supply chain issue that we're seeing along with transformers

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 and switch gear and a number of other pieces of equipment out there.

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 >> Okay.

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 >> Have you looked at concrete poles?

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 >> Yes, ma'am.

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 We have.

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 We have some on the system currently, but we're not fully set up for concrete poles as we are,

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 as for our steel and wood is easier for construction.

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 >> Okay. This item will be-- I will bring back up in relation to an item

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 on individual consideration, so I appreciate you letting us know about that.

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 I'll go ahead and move approval.

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 >> Yes, sir.

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 Thank you.

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 >> I second.

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 >> Thank you, Berber.

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 All in favor, say aye.

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 >> Aye.

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 >> Aye.

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 >> Opposed? Carries.

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 Next item is approval of the May 22nd, 2023 minutes.

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 Do we have any changes or corrections?

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 Seeing none, do we have a motion to approve?

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 >> Approve.

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 >> Berber's motioning and a second?

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 >> Second.

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 >> The second.

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 All in favor, say aye.

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 >> Aye.

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 >> Motion carries.

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 Item B, consider recommending the adoption of an ordinance for the city of Denton

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 to execute a contract with Mountain Cascade of Texas, LLC.

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 >> Good morning.

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 I'm Cole Tankersley.

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 I'm a capital projects project manager, and I'll be presenting the I-35 project today.

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 This is a-- this project is in support of TxDOT's relocation, widening of the freeways,

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 and we'll be moving the utilities in support of that.

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 It's a pretty large project.

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 It starts south near US 380, and it'll go all the way up to the Milam Road.

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 And it's a mix of wastewater and water with around 30,000 linear feet

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 of water relocation and wastewater.

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 And as I mentioned before, this is a TxDOT reimbursable project,

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 so we'll be getting 100% reimbursed.

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 We had three companies that bid, Mountain Cascade was the one that came in at the lowest,

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 that's over-- just over 16 million.

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 The other two were around 22 million.

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 And this is a pre-qualified list, so all three companies are more than capable

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 of completing this project.

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 And this is an invitation for bids, so we just went with the lowest of those three.

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 The public utility board's today, council will be on the 27th, and we'll give a notice

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 to proceed immediately following that so that they can start ordering material

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 and begin construction.

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 And the project's estimated to be about 300 days in construction.

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 There's some time limits to meet TxDOT's requirements

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 so that they can begin their work.

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 The total amount was 16,200,000.

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 The contingency is 5% for just over 800,000 for a total not to exceed of 17,000,000.1.

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 Do you have any questions?

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 >> I do. Can we go back to the code page or the--

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 >> Which page?

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 >> The tab with the three bids?

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 >> Yes, ma'am.

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 >> Are you-- I always get concerned when there's that big of a spread

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 between the low bidder and the next two?

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 >> Yes, I figured you have that question.

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 There's a couple of reasons.

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 One, Mountain Cascade is already doing this type of project for us right now.

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 So their ability to mobilize is cheaper.

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 They're already doing it.

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 They already have the teams created.

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 They're just going to add additional people.

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 So they were able to be a little bit lower for those reasons.

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 In addition, they had two choices.

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 They could use ductile iron pipe or HDPE which is like a polymer high density polyurethane pipe.

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 With that, they chose the HDPE which is cheaper.

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 In addition, they have Mountain Cascade purchased a machine that fuses it.

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 So they don't have to subcontract that out.

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 And they were able to come in much lower than the other two because I think they had

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 that capability in addition to their already mobilized.

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 >> Okay.

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 >> So because I mean that's the first thing we saw too.

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 It was like what's going on here?

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 >> How many change orders are we going to have?

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 >> And I will say that they're doing the exact same work right now in a different section

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 and they're doing a great job, so.

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 >> Which section are you referring to?

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 >> It's called the Mayhill Project.

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 So you'll see them out here.

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 I think they're by BJ's right now.

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 And what's that?

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 James Wood.

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 So if you're driving on the I-35, you see that pipe.

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 That's them doing that project right now.

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 >> Yeah. So your prequalification requirements,

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 were they TxDOT approved prequalification requirements?

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 >> Yes, sir.

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 >> Okay. Why did you decide to go with just the IFB on this one rather than you've had a history

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 of going with best value bits?

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 >> It's required, sir.

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 It's required to be IFB for TxDOT reimbursement.

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 >> Right.

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 >> So because it's the funding style from either state or federal funding.

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 But to make it a better situation, we went with a prequalified list to make sure

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 that the lowest bid is capable of doing the work.

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 >> Excuse me.

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 >> Yeah.

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 >> Yeah. So what we've done on these I-35 projects,

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 so when there's federal money that's involved, we're required to do IFB.

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 What we were finding were that you're kind of limited.

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 You know, you have to go with that low bid when you let everybody bid on it.

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 So what we were able to work out with TxDOT was to be able to create this prequalified list

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 and prequal-- I mean, look at all these firms, their qualifications,

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 all those types of things, and pre-approve them.

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 And then once we go out or once we determine we're ready for a project,

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 we can just release the project to these prequalified firms that we've already approved,

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 already reviewed their qualifications, and then we go with low bid based on those three.

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 >> Is there a certain percentage that TxDOT funded projects require for you to go

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 to the prequalification way instead of the best value bid you've been going with?

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 >> As far as I'm aware, if there's TxDOT money involved, we have to do low bid.

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 It doesn't matter what the cost is.

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 >> I'd audit that if I was you.

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 >> Okay.

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 >> Going backwards.

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 >> Yeah. I understand.

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 There's always, you know, we prefer to do the competitive seal proposal or the CMAR

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 that gives us more control over the type of contractors we get in, the qualifications.

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 But there's always a cost to getting free money or money from TxDOT and those types of things.

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 So we've worked with TxDOT to figure out a way that we can try to work in some

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 of those qualifications and things, and we're not just getting some random contractor,

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 you know, off the street that isn't really qualified to do this type of work.

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 >> I prefer that way of work myself, but I'm a former contractor, so I guess it was a month ago.

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 >> Yeah.

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 >> Okay. That's all I got.

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 >> Thank you.

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 >> Any questions?

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 All right.

192
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 Do we have a motion to approve?

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 >> Move approval.

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 >> Thank you, Billy.

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 And a second?

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 >> Second.

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 >> For a second.

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 All in favor say aye.

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 >> Aye.

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 >> Motion carries.

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 Management reports.

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 >> Madam Chair, so members of the POB, we've provided to you a memo from Solid Waste.

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00:10:57,800 --> 00:11:00,800
 Certainly if you have questions regarding a grant that they've applied

204
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 for to address the Styrofoam problem at the landfill.

205
00:11:04,520 --> 00:11:07,400
 Certainly if there's questions you have on that.

206
00:11:07,400 --> 00:11:13,640
 And then on the future agenda, I think I've said at every meeting, budget, budget, budget, right?

207
00:11:13,640 --> 00:11:15,240
 Make sure your calendars are up to date.

208
00:11:15,240 --> 00:11:19,600
 You know, we're going to fill your time here with a lot of budgets between now

209
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 and the end of July.

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 And then finally on the new business action matrix, we've completed the first one

211
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 on there which is the debt load trends.

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00:11:28,040 --> 00:11:32,080
 I did move the Winter Storm URI update to July 10th.

213
00:11:32,080 --> 00:11:35,120
 We've had a couple of things that come up and so I could not get to that.

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00:11:35,120 --> 00:11:39,200
 But I'll commit to get to you by the 10th of July.

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00:11:39,200 --> 00:11:45,120
 So with that, the other couple of items that weren't on here that I'll just mention.

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00:11:45,120 --> 00:11:51,560
 One, if your term is expiring, please make sure if you're interested in being renominated

217
00:11:51,560 --> 00:11:57,000
 that you submit your documentation to Jesse Salazar, the city secretary's office.

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00:11:57,000 --> 00:12:01,440
 If you have questions, please direct them to him or Kim can help you with that as well.

219
00:12:01,440 --> 00:12:04,680
 And then I think Billy wanted to give just a quick update on TNPA.

220
00:12:04,680 --> 00:12:06,560
 >> Okay, we're going to do that here?

221
00:12:06,560 --> 00:12:08,000
 >> We can do that here if you want to.

222
00:12:08,000 --> 00:12:10,280
 >> Okay, if you haven't heard, our general manager,

223
00:12:10,280 --> 00:12:16,680
 I think Bob Kahn has been the general manager for TNPA for about eight years now.

224
00:12:16,680 --> 00:12:18,160
 I think that's about right.

225
00:12:18,160 --> 00:12:24,720
 And he came in and Bob's really great, very qualified and very open and honest

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00:12:24,720 --> 00:12:31,160
 and direct with the board and he went from having 190 employees shutting the plant

227
00:12:31,160 --> 00:12:35,040
 down and having six I think is what we have.

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00:12:35,040 --> 00:12:38,840
 He did a great job with the legal, with the sale, with the plant sale,

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 with the, you know, he's an attorney but he's a guy that grew up in the electrical business.

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 He has decided to resign.

231
00:12:48,400 --> 00:12:50,400
 He's not retiring.

232
00:12:50,400 --> 00:12:54,360
 Although he said he was probably going to retire at TNPA, it's been announced, Tony.

233
00:12:54,360 --> 00:12:57,960
 Tony, sorry, I'm going to tell you, he's the director of Austin Energy.

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00:12:57,960 --> 00:12:59,240
 >> Right, general manager.

235
00:12:59,240 --> 00:13:06,080
 >> General manager he is, which is going to be going from your, you know, your feet into the fire.

236
00:13:06,080 --> 00:13:11,840
 So God bless him on that and good luck to him.

237
00:13:11,840 --> 00:13:15,680
 Hate to lose him but we're getting at a point where we don't necessarily need

238
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 that qualified of a person honestly, I hate to say that but we're going to talk Friday.

239
00:13:21,000 --> 00:13:26,720
 I'm going to go to Brian with the other members and board members only.

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00:13:26,720 --> 00:13:33,880
 It's not really required for PNO to be there and talk to two candidates for interim.

241
00:13:33,880 --> 00:13:38,000
 They wanted us, several of the board members wanted us to just decide the permanent one then

242
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 and I did not want to do that and so we're not going to do that.

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00:13:43,840 --> 00:13:50,840
 On Friday, like I said, we'll interview those two candidates and then move on from there.

244
00:13:50,840 --> 00:13:52,360
 >> Madam Chair, that's all we have.

245
00:13:52,360 --> 00:13:55,040
 Certainly if there's any questions, happy to address them now.

246
00:13:55,040 --> 00:13:58,800
 >> It doesn't look like they're on.

247
00:13:58,800 --> 00:14:00,680
 All right, that brings us to concluding items.

248
00:14:00,680 --> 00:14:04,840
 Does any board member wish to have a future item put on an agenda

249
00:14:04,840 --> 00:14:08,560
 or comments to be made to the public?

250
00:14:08,560 --> 00:14:10,080
 I see none.

251
00:14:10,080 --> 00:14:11,360
 So we'll move into work session.

252
00:14:11,360 --> 00:14:12,720
 We're going to do it a little bit different.

253
00:14:12,720 --> 00:14:17,280
 We're going to do the customer service, environmental services and sustainability.

254
00:14:17,280 --> 00:14:21,760
 Then we'll go into closed session and we'll come back and do the electric.

255
00:14:21,760 --> 00:14:34,080
 >> Good morning, PUB, Danielle Stanford, budget manager.

256
00:14:34,080 --> 00:14:37,920
 So as Susan mentioned, we're going to do customer service, environmental services

257
00:14:37,920 --> 00:14:40,080
 and sustainability and then electric.

258
00:14:40,080 --> 00:14:43,280
 We are going to have a hybrid approach for each presentation.

259
00:14:43,280 --> 00:14:49,680
 So the manager or director of each utility is going to cover the first portion

260
00:14:49,680 --> 00:14:52,720
 of the presentation and then I'll cover the financials.

261
00:14:52,720 --> 00:14:57,240
 So first we'll begin with Krista Foster, the customer service manager,

262
00:14:57,240 --> 00:15:01,120
 and I'll turn it over to you, Krista.

263
00:15:01,120 --> 00:15:03,240
 >> Thank you, Danielle.

264
00:15:03,240 --> 00:15:06,840
 Madam Chair, board members, Krista Foster, customer service manager.

265
00:15:06,840 --> 00:15:10,200
 Let me go ahead and get this brought up.

266
00:15:10,200 --> 00:15:14,680
 And I will get us moving into the customer service budget starting with our metrics.

267
00:15:14,680 --> 00:15:18,880
 So what I've done is I've given you kind of our trend over the last four years

268
00:15:18,880 --> 00:15:24,080
 for our total number of accounts, our call volumes, the average time it's taking

269
00:15:24,080 --> 00:15:27,800
 for a representative to resolve a call, as well as the number

270
00:15:27,800 --> 00:15:30,080
 of bills that we're producing annually.

271
00:15:30,080 --> 00:15:33,280
 There have been increases in all four categories.

272
00:15:33,280 --> 00:15:37,280
 Certainly the sharpest increases that you'll note are both with our call volumes

273
00:15:37,280 --> 00:15:39,360
 and with our average call time.

274
00:15:39,360 --> 00:15:43,640
 That seems to be attributed to a lot of the financial and economic stresses

275
00:15:43,640 --> 00:15:49,520
 that our customers are experiencing throughout the pandemic and now post-pandemic.

276
00:15:49,520 --> 00:15:52,160
 We've also moved to a lot of self-service tools.

277
00:15:52,160 --> 00:15:58,320
 We've introduced eight new self-service forms on our website over the past 12 months.

278
00:15:58,320 --> 00:16:03,000
 So as we continue to take out some of those simpler calls, that again leads

279
00:16:03,000 --> 00:16:05,960
 to a longer call time as the things that people are getting

280
00:16:05,960 --> 00:16:11,240
 in for actually require resolution with a representative.

281
00:16:13,000 --> 00:16:17,360
 So if you look, the first thing we found is that it's helpful each year to remind everyone

282
00:16:17,360 --> 00:16:21,280
 that as we go into budget discussions, especially as it relates to utilities,

283
00:16:21,280 --> 00:16:25,480
 customer service has been moved as an internal service fund.

284
00:16:25,480 --> 00:16:30,680
 But we have no kind of operating reserve required for us.

285
00:16:30,680 --> 00:16:34,960
 And we allocate our expenses based on the usage

286
00:16:34,960 --> 00:16:39,400
 by the different utilities and the divisions that we serve.

287
00:16:39,400 --> 00:16:43,120
 We have a total of 56 and a half headcount that is broken down

288
00:16:43,120 --> 00:16:46,400
 into three major operating categories within our division.

289
00:16:46,400 --> 00:16:50,640
 The first is our contact center, our collections and revenue division,

290
00:16:50,640 --> 00:16:53,800
 as well as our utility billing areas.

291
00:16:53,800 --> 00:17:02,160
 Our FTE summary is we are preliminarily set for 62.5 FTE in the coming budget year.

292
00:17:02,160 --> 00:17:05,760
 We do have six FTE in supplemental requests

293
00:17:05,760 --> 00:17:09,800
 which we'll discuss more thoroughly as we move forward.

294
00:17:09,800 --> 00:17:15,480
 But that does include one frontline customer service rep, two customer service trainers,

295
00:17:15,480 --> 00:17:21,200
 and then some increases in support staff that have to support those frontline reps

296
00:17:21,200 --> 00:17:25,840
 with one senior customer service rep which functions as a team lead,

297
00:17:25,840 --> 00:17:29,920
 one supervisor and one cash operations specialist.

298
00:17:35,280 --> 00:17:40,760
 So in our strategic initiatives, our first initiative actually was finalized last week

299
00:17:40,760 --> 00:17:43,200
 and that is our phone system redesign.

300
00:17:43,200 --> 00:17:46,960
 We had a number of problematic call routing issues that were determined

301
00:17:46,960 --> 00:17:53,960
 with the old scripting methods even after we transitioned to the upgraded phone system.

302
00:17:53,960 --> 00:18:00,440
 Those original programs were copied into the new system so the problems were not resolved.

303
00:18:00,440 --> 00:18:04,720
 So what we've done is we've redone all of those call scripting methods.

304
00:18:04,720 --> 00:18:08,160
 We've rewritten our interactive voice response which is

305
00:18:08,160 --> 00:18:11,440
 that automated menu you hear when you first call in.

306
00:18:11,440 --> 00:18:15,360
 We've simplified that to make it easier to get to a representative.

307
00:18:15,360 --> 00:18:19,600
 We have added some extra latent features that allow us to better mobilize in the event

308
00:18:19,600 --> 00:18:23,280
 of an emergency and provide greater amounts of information to the public.

309
00:18:23,280 --> 00:18:28,840
 That did go live as of Thursday night last week and we operated with the new structure

310
00:18:28,840 --> 00:18:32,120
 on Friday with very few issues.

311
00:18:32,120 --> 00:18:35,960
 The second initiative is our Silver Blaze utility portal.

312
00:18:35,960 --> 00:18:41,200
 That project has been postponed slightly throughout time just because of some upgrades

313
00:18:41,200 --> 00:18:43,640
 that have needed to be done to our billing system.

314
00:18:43,640 --> 00:18:48,640
 That billing system upgrade is now in final stages of testing so we're hoping that we'll be able

315
00:18:48,640 --> 00:18:51,960
 to move forward with that throughout the rest of this year.

316
00:18:51,960 --> 00:18:55,640
 And our third initiative is our customer relationship management software

317
00:18:55,640 --> 00:18:58,400
 and our call center consolidation.

318
00:18:58,400 --> 00:19:01,560
 Frequently you'll hear us refer to that as 311.

319
00:19:01,560 --> 00:19:06,880
 I'm stepping back from calling it 311 and going for call center consolidation

320
00:19:06,880 --> 00:19:11,800
 since at initial onset we will not be utilizing the 311 designation.

321
00:19:11,800 --> 00:19:15,400
 We don't want that to create confusion possibly for our public

322
00:19:15,400 --> 00:19:20,280
 to where they may think they can just pick up the phone and make that dial with 311.

323
00:19:20,280 --> 00:19:25,000
 So as we look at moving into the customer relationship management software this is going

324
00:19:25,000 --> 00:19:30,080
 to allow us to integrate with all of the major departmental work order systems,

325
00:19:30,080 --> 00:19:35,120
 increase the amount of true self-service and give customers one point of contact

326
00:19:35,120 --> 00:19:38,200
 to reach a representative who can take care of their issue.

327
00:19:38,200 --> 00:19:43,920
 They can take care of multiple issues for multiple departments with one contact to one person.

328
00:19:43,920 --> 00:19:49,320
 So we also have a new mobile application that will replace Engage Denton as well

329
00:19:49,320 --> 00:19:53,680
 as a more robust service request area on our website.

330
00:19:53,680 --> 00:19:58,200
 This is expected with the first phase of launch to happen in November of this year

331
00:19:58,200 --> 00:20:01,000
 and then we'll be phasing throughout the next year.

332
00:20:01,000 --> 00:20:06,200
 And then I will turn it back over to Danielle for financials.

333
00:20:06,200 --> 00:20:19,160
 >> Okay. So as Krista mentioned the customer service fund is fully funded

334
00:20:19,160 --> 00:20:22,040
 by other departments, the departments that they serve.

335
00:20:22,040 --> 00:20:25,240
 So on the pro forma here you see that their sources

336
00:20:25,240 --> 00:20:31,520
 of revenue are mostly other city departments, the largest contributor being DME.

337
00:20:31,520 --> 00:20:39,800
 So our budget from the current fiscal year to FY24 has increased significantly as you see there

338
00:20:39,800 --> 00:20:44,520
 by about 1.3 million, the largest driver of that is the call volume.

339
00:20:44,520 --> 00:20:50,600
 So we allocate three different ways, one of those ways being the number of calls

340
00:20:50,600 --> 00:20:54,720
 that customer service takes for each entity that they serve.

341
00:20:54,720 --> 00:21:01,560
 DME is their largest customer and their call volume did increase by about 8% from 23 to 24.

342
00:21:01,560 --> 00:21:06,840
 These are of course estimated numbers at the end of each fiscal year.

343
00:21:06,840 --> 00:21:11,000
 We do a cost allocation true up so if we've, you know,

344
00:21:11,000 --> 00:21:16,120
 budgeted slightly off we do true that up at the end of each year.

345
00:21:16,120 --> 00:21:21,800
 Water, wastewater stay right on track with what they're budgeted, same for solid waste.

346
00:21:21,800 --> 00:21:28,160
 Airport fleet and engineering have increased slightly,

347
00:21:28,160 --> 00:21:31,720
 same thing that the customer service department is expanding their services

348
00:21:31,720 --> 00:21:37,200
 for those entities so their allocation reflects that.

349
00:21:37,200 --> 00:21:43,520
 Moving down into personnel services for expenses, that 24 number includes all

350
00:21:43,520 --> 00:21:48,200
 of the requests that Krista has identified.

351
00:21:48,200 --> 00:21:53,520
 So the bottom line, the 9.7 includes, is a fully loaded budget, it includes all

352
00:21:53,520 --> 00:21:57,360
 of the baseline and supplemental requests that she's requested.

353
00:21:57,360 --> 00:22:01,600
 If we do not approve those of course that bottom line would decrease

354
00:22:01,600 --> 00:22:05,720
 and the allocations would decrease accordingly as well.

355
00:22:05,720 --> 00:22:13,280
 Change requests, they have two baseline adjustment requests.

356
00:22:13,280 --> 00:22:19,760
 The first is their increase credit card processing fees, we are seeing that this is going

357
00:22:19,760 --> 00:22:23,280
 to be an issue even in the current year so we've just gone ahead and asked

358
00:22:23,280 --> 00:22:26,920
 that that be increased for the upcoming fiscal year.

359
00:22:26,920 --> 00:22:32,080
 And then the increase for the utility assistance program by about $50,000.

360
00:22:32,080 --> 00:22:36,440
 So a total based on adjustment request of 750,000.

361
00:22:36,440 --> 00:22:39,920
 In the right hand column you'll see that we've added that funding source this year.

362
00:22:39,920 --> 00:22:43,680
 This is what the budget team has proposed, the manner

363
00:22:43,680 --> 00:22:46,360
 which we proposed that that's going to be funded.

364
00:22:46,360 --> 00:22:51,640
 So here we're just adding it to their operating fund.

365
00:22:51,640 --> 00:23:01,480
 >> Is that 700 grand, where is that in your income statement over here?

366
00:23:01,480 --> 00:23:04,360
 >> It's in the operations line.

367
00:23:04,360 --> 00:23:10,600
 >> Okay. So that's coming from credit card processing fees

368
00:23:10,600 --> 00:23:12,640
 when customers pay their utility bills, right?

369
00:23:12,640 --> 00:23:13,280
 >> That's correct.

370
00:23:13,280 --> 00:23:16,360
 >> And that's the cost that the city's paying on behalf of the customers.

371
00:23:16,360 --> 00:23:18,200
 Why don't we pass that through on to the customers?

372
00:23:18,200 --> 00:23:24,280
 Not that I'm advocating for that, but I mean it's not unusual when you pay for a bill

373
00:23:24,280 --> 00:23:27,520
 with a credit card that that fee's passed back on to the person paying,

374
00:23:27,520 --> 00:23:29,400
 not the business that's paying that.

375
00:23:29,400 --> 00:23:30,840
 >> Especially the government entity.

376
00:23:30,840 --> 00:23:35,720
 >> Right. Yeah.

377
00:23:35,720 --> 00:23:37,760
 >> Krista Foster, customer service manager.

378
00:23:37,760 --> 00:23:42,520
 I had the pleasure of having to greatly look into that as my very first opportunity

379
00:23:42,520 --> 00:23:46,240
 to come before the board and council in 2019.

380
00:23:46,240 --> 00:23:50,120
 So credit card bylaws are very specific.

381
00:23:50,120 --> 00:23:51,400
 There are a couple of reasons.

382
00:23:51,400 --> 00:23:53,160
 Bottom line first and foremost,

383
00:23:53,160 --> 00:23:56,320
 city council made the decision they wanted no pass

384
00:23:56,320 --> 00:23:59,400
 through fees to our residential customers.

385
00:23:59,400 --> 00:24:03,520
 However, at that time, and we would have to review them again later

386
00:24:03,520 --> 00:24:08,360
 if that was the direction we were given, the bylaws indicated

387
00:24:08,360 --> 00:24:13,600
 that if we charge a pass through fee or a transactional fee to a commercial,

388
00:24:13,600 --> 00:24:15,720
 we must do that to a residential.

389
00:24:15,720 --> 00:24:18,320
 It could not be a varied fee.

390
00:24:18,320 --> 00:24:20,680
 It has to be a fixed rate fee.

391
00:24:20,680 --> 00:24:26,000
 And if we at that time had accepted passing on a fee, it prevented us

392
00:24:26,000 --> 00:24:30,120
 from accepting any recurring forms of payments through our website.

393
00:24:30,120 --> 00:24:35,320
 So there were a lot of additional costs that it would create for us in our business.

394
00:24:35,320 --> 00:24:42,360
 At that time, the operational costs for that were running about $25,000 to $30,000 a month,

395
00:24:42,360 --> 00:24:45,920
 and now they're running close to $90,000 to $100,000 a month.

396
00:24:45,920 --> 00:24:48,120
 So that's why you're seeing this type of increase.

397
00:24:48,120 --> 00:24:50,760
 >> Is that due to the volume of people who are using credit cards?

398
00:24:50,760 --> 00:24:51,800
 >> It is due to the volume.

399
00:24:51,800 --> 00:24:53,200
 We are seeing increased volumes.

400
00:24:53,200 --> 00:24:57,720
 Again, I think a portion of that is due to some of the economic hardships

401
00:24:57,720 --> 00:25:02,240
 and then people more are lending toward putting their bills on credit.

402
00:25:02,240 --> 00:25:05,880
 But I certainly can't say that that would be all of it.

403
00:25:05,880 --> 00:25:09,600
 >> Yeah, I just come from working in the financial industry,

404
00:25:09,600 --> 00:25:13,160
 and I know those interchange fees are pretty costly.

405
00:25:13,160 --> 00:25:13,840
 >> Yes.

406
00:25:13,840 --> 00:25:18,000
 >> Rewards cards and American Express, and it's a little bit unsettling as a taxpayer

407
00:25:18,000 --> 00:25:21,760
 that I'm paying 3 to 5 percent interchange fees on behalf of someone--

408
00:25:21,760 --> 00:25:27,880
 >> I was going to say our interchange rate has been running about 1 percent to 1.1 percent,

409
00:25:27,880 --> 00:25:31,440
 somewhere in that range, and we do not accept American Express.

410
00:25:31,440 --> 00:25:32,360
 >> Okay.

411
00:25:32,360 --> 00:25:34,960
 >> I'm assuming because of the interchange fees.

412
00:25:34,960 --> 00:25:37,280
 Thank you so much.

413
00:25:37,280 --> 00:25:38,880
 Any other questions?

414
00:25:38,880 --> 00:25:47,120
 >> You said that if you require commercial to pay it, then you also have to require residential?

415
00:25:47,120 --> 00:25:48,600
 >> Yeah, we cannot differentiate.

416
00:25:48,600 --> 00:25:51,960
 >> You can't-- same thing goes for the opposite, is that correct?

417
00:25:51,960 --> 00:25:52,760
 >> For what?

418
00:25:52,760 --> 00:25:56,000
 >> If you require residential to pay it, you also have to require commercial to pay it.

419
00:25:56,000 --> 00:25:56,320
 >> Correct.

420
00:25:56,320 --> 00:26:06,200
 >> Okay. Because that operational increase was more than-- I mean, the $700,000 was in both of them,

421
00:26:06,200 --> 00:26:12,520
 I'm sure, but it was more of an increase in your operations.

422
00:26:12,520 --> 00:26:19,040
 I'm not really clear on why that is because if you didn't--

423
00:26:19,040 --> 00:26:22,680
 [ Inaudible Remark ]

424
00:26:22,680 --> 00:26:25,880
 >> So you got operations at--

425
00:26:25,880 --> 00:26:28,280
 >> But the baseline of judgment is down below.

426
00:26:28,280 --> 00:26:29,920
 >> Decrease, but let's see.

427
00:26:29,920 --> 00:26:36,000
 >> Well, our operations budget has stayed flat from '23 to '24, and then the $750,000 you see

428
00:26:36,000 --> 00:26:40,800
 in the baseline adjustment second row from the bottom, that's because we don't assume

429
00:26:40,800 --> 00:26:44,520
 that those are approved and it's easily removed

430
00:26:44,520 --> 00:26:47,560
 from the baseline adjustment versus in the budget.

431
00:26:47,560 --> 00:26:49,960
 >> The baseline adjustment, you're-- I'm sorry, I was--

432
00:26:49,960 --> 00:26:50,400
 >> That's okay.

433
00:26:50,400 --> 00:26:51,520
 >> -- looking while you were--

434
00:26:51,520 --> 00:26:51,840
 >> That's okay.

435
00:26:51,840 --> 00:26:52,680
 >> -- answering.

436
00:26:52,680 --> 00:26:56,520
 The $750,000 is the credit card fees are in there?

437
00:26:56,520 --> 00:26:57,000
 >> It is.

438
00:26:57,000 --> 00:27:02,760
 It's in the-- the $750,000 is the $700,000 for the credit card processing fees

439
00:27:02,760 --> 00:27:04,240
 and the utility assistance program.

440
00:27:04,240 --> 00:27:06,280
 >> Okay. It's not in the operations line, it's in the--

441
00:27:06,280 --> 00:27:10,400
 >> Correct, but if it were approved, then it would be in the operations line.

442
00:27:10,400 --> 00:27:13,320
 >> Okay. Wow.

443
00:27:13,320 --> 00:27:19,800
 >> Can you remind me how much do we have now going towards the utility assistance?

444
00:27:19,800 --> 00:27:21,480
 I know that we increased it.

445
00:27:21,480 --> 00:27:22,080
 >> We did.

446
00:27:22,080 --> 00:27:26,760
 We increased by, I believe, $25,000 last year.

447
00:27:26,760 --> 00:27:33,380
 We are currently budgeted at $175,000 per year to assist.

448
00:27:33,380 --> 00:27:39,320
 What we have found is we have had to increase the amount given again this year.

449
00:27:39,320 --> 00:27:46,680
 Interfaith would have been running out of funds about the middle of this month at the $175,000 mark.

450
00:27:46,680 --> 00:27:53,480
 And we have seen a dramatic change in the reasons that customers are denied.

451
00:27:53,480 --> 00:27:58,440
 So, in the past, 20% of our customers roughly were denied

452
00:27:58,440 --> 00:28:01,320
 because they never completed their documentation.

453
00:28:01,320 --> 00:28:03,760
 They never fulfilled all of the obligations.

454
00:28:03,760 --> 00:28:08,240
 At this point, we're now seeing 15%, 20% of the people being denied

455
00:28:08,240 --> 00:28:11,440
 because they've already received maximum assistance.

456
00:28:11,440 --> 00:28:18,320
 So, there has been a significant change in the needs within that fund.

457
00:28:18,320 --> 00:28:24,960
 >> So, if it's over 25 this month, where are you going to be in September?

458
00:28:24,960 --> 00:28:30,120
 >> We've already made-- we've already made sure to increase our funding for this year based

459
00:28:30,120 --> 00:28:34,800
 on the contractual add that was made in December of last year.

460
00:28:34,800 --> 00:28:36,320
 So, we can make it through the summer.

461
00:28:36,320 --> 00:28:41,320
 We may run out of funding toward the very end of September.

462
00:28:41,320 --> 00:28:42,680
 >> Are we going to make it through the summer?

463
00:28:42,680 --> 00:28:44,320
 >> We're hoping that we can make it through the summer.

464
00:28:44,320 --> 00:28:47,600
 Of course, it will all depend on what, you know, is brought forward.

465
00:28:47,600 --> 00:28:51,680
 But they should have funding to make it through the majority of the summer.

466
00:28:51,680 --> 00:28:53,040
 >> Thank you.

467
00:28:53,040 --> 00:29:00,680
 >> Just a couple more points on the pro forma.

468
00:29:00,680 --> 00:29:08,280
 The personnel services for FY 24 does include the comp and class implementation plus 3%.

469
00:29:08,280 --> 00:29:12,040
 Same thing for the out years-- I'm sorry.

470
00:29:12,040 --> 00:29:18,560
 FY 24 includes comp and class with-- so, we have the 3% built in and then the difference

471
00:29:18,560 --> 00:29:25,800
 of what was needed on top of that 3% and then a 3% inflation in the out years.

472
00:29:25,800 --> 00:29:29,280
 O&M has a 2% inflation in the out years.

473
00:29:29,280 --> 00:29:33,240
 And those are really the largest changes to the expenses.

474
00:29:33,240 --> 00:29:39,520
 And then that brings us to our supplemental request.

475
00:29:39,520 --> 00:29:42,520
 As Krista touched on, it is-- oops, I'm sorry.

476
00:29:42,520 --> 00:29:48,400
 In large part, 6 FTEs and then the top request is the merit increase.

477
00:29:48,400 --> 00:29:52,960
 So, we're not only implementing comp and class in the current fiscal year,

478
00:29:52,960 --> 00:29:58,200
 we're also proposing a merit increase in the upcoming fiscal year.

479
00:29:58,200 --> 00:30:04,760
 And all of these will be funded in the operating budget and then allocated back out to departments.

480
00:30:04,760 --> 00:30:12,560
 And then Krista's going to go over the supporting documentation for each supplemental request.

481
00:30:12,560 --> 00:30:15,040
 >> All right.

482
00:30:15,040 --> 00:30:17,600
 Thank you for letting me speak again.

483
00:30:17,600 --> 00:30:21,520
 So, the first thing I wanted to do is just summarize how call consolidation is going

484
00:30:21,520 --> 00:30:24,480
 to change our services as that is coming up this year.

485
00:30:24,480 --> 00:30:31,560
 So, currently, we support the main number for City Hall, solid waste, utility billing, and dino dirt.

486
00:30:31,560 --> 00:30:37,680
 So, as we move into consolidation and we phase through by this time next summer,

487
00:30:37,680 --> 00:30:42,680
 we will also support community improvement services, parks maintenance, public works,

488
00:30:42,680 --> 00:30:46,120
 water distribution, water meter shop, waste water,

489
00:30:46,120 --> 00:30:50,720
 and absorb the after hours emergency support that's currently at DME.

490
00:30:50,720 --> 00:30:57,600
 And when we're looking at water meter shop, waste water, we currently support their utility billing functions

491
00:30:57,600 --> 00:30:59,880
 and the things that are related to that.

492
00:30:59,880 --> 00:31:03,160
 This will now be supporting those infrastructure type calls.

493
00:31:03,160 --> 00:31:07,120
 So, if there's a water main break, a sewer backup, those types of things.

494
00:31:07,120 --> 00:31:11,440
 General services that we provide today are the things that you would expect with a utility,

495
00:31:11,440 --> 00:31:16,960
 starting and stopping services, referrals for assistance, referrals to non-city services.

496
00:31:16,960 --> 00:31:24,320
 Things that we will be adding are emergency service orders and dispatches for our infrastructure divisions.

497
00:31:24,320 --> 00:31:28,040
 We will be doing regular infrastructure work orders for streets and sidewalks,

498
00:31:28,040 --> 00:31:33,360
 traffic control, water infrastructure, water metering, and waste water infrastructure.

499
00:31:33,360 --> 00:31:39,520
 Additionally, we'll be taking code violations as well as some of those parks maintenance types of issues.

500
00:31:39,520 --> 00:31:43,960
 You know that we did add some staff in preparation for 311.

501
00:31:43,960 --> 00:31:50,760
 We did bring those staff on in March of last year so that they could be fully versed in the utility billing section of that,

502
00:31:50,760 --> 00:31:54,840
 as all the contact center agents will be generalists.

503
00:31:54,840 --> 00:31:58,680
 So, if they pick up the phone and it's a waste water call for infrastructure,

504
00:31:58,680 --> 00:32:05,000
 or they pick up the phone and it's a call about the bill, that one representative can handle both issues.

505
00:32:05,000 --> 00:32:13,080
 What we have found is with the call volumes that we have experienced over the last few years that you saw in my summary,

506
00:32:13,080 --> 00:32:19,560
 that staff has been absorbed into what was necessary just for us to try to maintain normal operation.

507
00:32:19,560 --> 00:32:28,520
 Our supplemental requests include some frontline staff because our business need has outpaced our increases in that area,

508
00:32:28,520 --> 00:32:33,400
 and we need to prepare for the increased consolidated call volumes.

509
00:32:33,400 --> 00:32:43,320
 We also have some requests for support staff because at this point, the pre-planned workload for our team leads and supervisors,

510
00:32:43,320 --> 00:32:48,680
 meaning just the things that must happen that they know have to happen before they walk in the door,

511
00:32:48,680 --> 00:32:53,880
 range from 9 to 11 hours of commitment daily, and they don't have that.

512
00:32:53,880 --> 00:32:58,440
 So, it doesn't allow any opportunity for unplanned activities.

513
00:32:58,440 --> 00:33:07,400
 And if you have ever been in a contact center at all familiar with, unplanned activity is a huge portion of what we do.

514
00:33:07,400 --> 00:33:12,440
 So, that's part of the reason we have requests. We've also requested two trainers.

515
00:33:12,440 --> 00:33:23,800
 We found that over the last fiscal year, we had to pull two of our frontline representatives to assist with training classes just to try to stay on top of keeping staffing there.

516
00:33:23,800 --> 00:33:32,440
 Customer service is an entry position within the city. People a lot of times will promote either within our division or into other roles within the city.

517
00:33:32,440 --> 00:33:40,440
 We're happy to see them grow and to thrive, but we also have that revolving door and the need for being able to train them.

518
00:33:40,440 --> 00:33:50,280
 We're also being required to, through our tech services model, to look for having a subject matter expert on hand who can really deal with the telephone system,

519
00:33:50,280 --> 00:34:04,760
 the troubleshooting and liaison with them for solutions on the phone system, as well as the systems we utilize that are integrated with that phone system, such as our workforce management and our quality assurance programs.

520
00:34:04,760 --> 00:34:17,720
 So, we're going to look just a little bit at the metrics of what's going on in the contact center specifically, and the projections for next year include anticipation of a 3-1-1 volume.

521
00:34:17,720 --> 00:34:27,640
 So, what you're going to see is our four-year change for our total calls handled is a 33.23 percent change.

522
00:34:27,640 --> 00:34:35,000
 You'll notice that the dark area is the calls we were actually able to answer versus, I'm sorry, that was our calls offered.

523
00:34:35,000 --> 00:34:42,520
 The light area is the number of calls that ultimately had to give up. They couldn't get through. They hung up.

524
00:34:42,520 --> 00:34:56,320
 We couldn't get to them for whatever reason, and those are our abandons. So, you'll see that, you know, our staffing and ability to handle those calls has stayed roughly the same as our average call times have gone up slightly.

525
00:34:56,320 --> 00:35:06,640
 Even though we've added a couple of staff members with that increased time that it's taking to work with people, it's not helping us to overcome the volumes that were being presented.

526
00:35:06,640 --> 00:35:19,680
 And as you look into moving to 2024, we anticipate a reduced average handle time because as we bring in some of those infrastructure calls, they don't take as long as billing and utility calls.

527
00:35:19,680 --> 00:35:32,000
 But even with that reduction, it's not going to get us the amount of staffing that we need to really adequately handle the volume and the request.

528
00:35:32,000 --> 00:35:49,720
 Peak wait times, and this makes me very sad and uncomfortable, but our peak wait times, if you'll see, we've gone up to a 45 minute average wait during the peak wait times in 2022.

529
00:35:49,720 --> 00:35:59,560
 We were at a 35 minute or so average wait through our peak wait times from 1130 in the morning until two o'clock in the afternoon when people are at lunches.

530
00:35:59,560 --> 00:36:05,840
 And that is a 462 percent increase over the last four years.

531
00:36:05,840 --> 00:36:12,280
 Don't you have the opportunity for them to leave their number and you can call them back?

532
00:36:12,280 --> 00:36:14,760
 We do. We do.

533
00:36:14,760 --> 00:36:22,440
 But it still leaves us with the waits because they're still technically part of those wait times.

534
00:36:22,440 --> 00:36:26,920
 And how long did they have to wait to be able to get us to take care of them?

535
00:36:26,920 --> 00:36:35,720
 And if we're taking care of you in the order in which you called, the customer who's on the phone actually holding is still having to wait through that time.

536
00:36:35,720 --> 00:36:43,760
 Certainly, we encourage people to use the callback system because at least that way you're not waiting with the music in your ear for an hour.

537
00:36:43,760 --> 00:36:52,920
 Right. But it's very important to note that if we have an average wait of 35 minutes during that peak,

538
00:36:52,920 --> 00:37:00,480
 that means that the peak wait time may be in excess of an hour or an hour and 10 minutes

539
00:37:00,480 --> 00:37:05,880
 because 35 minute average assumes that some of them are getting in more quickly than others.

540
00:37:05,880 --> 00:37:11,760
 And it's just something that I have to give folks lunches, I have to give them breaks.

541
00:37:11,760 --> 00:37:17,880
 And they just happen to coincide with the same types of times that people also are taking lunches and breaks.

542
00:37:17,880 --> 00:37:22,040
 So that's what's happened with those.

543
00:37:22,040 --> 00:37:26,640
 And this is looking at our percentage of callers who have to wait longer than one minute.

544
00:37:26,640 --> 00:37:32,640
 Our goal is to answer callers in a minute or less of hold, at least 75 percent of them.

545
00:37:32,640 --> 00:37:39,080
 And what you'll see is pre-pandemic, we were going into that very easily, handling that.

546
00:37:39,080 --> 00:37:44,280
 What you'll see now is 60 percent of our customers are waiting for longer than a minute.

547
00:37:44,280 --> 00:37:52,240
 So unless you're calling like right at the start of the day or right at the end of the day, you're probably going to be experiencing a wait time.

548
00:37:52,240 --> 00:37:57,520
 And this is concerning for us as we move into the consolidated call center,

549
00:37:57,520 --> 00:38:07,360
 because we don't want people with some form of an emergency to have to wait for an extended period of time.

550
00:38:07,360 --> 00:38:15,160
 And then that will be all of mine. Give it back to you.

551
00:38:15,160 --> 00:38:21,560
 So for next steps, we'll be back with you all next or the next meeting for any changes between today's budget.

552
00:38:21,560 --> 00:38:27,640
 And in that meeting, we'll be back with you on the 18th for a rates work session.

553
00:38:27,640 --> 00:38:34,360
 Customer service doesn't have rates, so well, not rates that will be discussed here.

554
00:38:34,360 --> 00:38:40,440
 And then we'll have budget approvals on July 24th.

555
00:38:40,440 --> 00:38:47,280
 And then that doesn't make sense. Oh, that's for city council. I'm sorry.

556
00:38:47,280 --> 00:38:53,320
 Like, wait, we don't have to do that. So then we'll start our council meetings in July.

557
00:38:53,320 --> 00:38:58,520
 Do you have any further questions for customer service?

558
00:38:58,520 --> 00:39:04,840
 Thank you. Thank you.

559
00:39:04,840 --> 00:39:16,680
 OK, so next, we'll move into environmental services and sustainability.

560
00:39:16,680 --> 00:39:23,080
 Good morning, board members, Michael Gagne, director of environmental services and sustainability.

561
00:39:23,080 --> 00:39:27,640
 Starting off our metrics, a lot of these are changing per year.

562
00:39:27,640 --> 00:39:34,360
 But one of the things we work heavily with the solid waste and recycling is to do a lot of community outreach on recycling education.

563
00:39:34,360 --> 00:39:39,640
 That's one of our key goals is to reach at least 10 percent of our customers every year.

564
00:39:39,640 --> 00:39:47,440
 That's the top one on there. Our energy rebates are trailing a little bit this year that's somewhat driven off demand.

565
00:39:47,440 --> 00:39:52,160
 And the amount of the rebate is a little lower right now compared to what the costs are.

566
00:39:52,160 --> 00:39:57,960
 So I think we're having less traction. We're looking at those rebate structures to improve that for next year.

567
00:39:57,960 --> 00:40:03,320
 Then you move into a lot of our stormwater related efforts, as well as our industrial pretreatment program.

568
00:40:03,320 --> 00:40:12,680
 That's IPP. Those are things we're doing on behalf of both drainage, the entire city, as well as water utilities.

569
00:40:12,680 --> 00:40:15,840
 And you move down into gas well inspections. That's a variable number.

570
00:40:15,840 --> 00:40:20,680
 But our goal is to touch every gas well site twice per fiscal year.

571
00:40:20,680 --> 00:40:25,120
 So we try to get out there every twice. That includes our E.T.J. as well.

572
00:40:25,120 --> 00:40:32,920
 Then you move down into some of our laboratory and things like that, where our goal is to provide services both for water and wastewater.

573
00:40:32,920 --> 00:40:37,440
 So we do a lot of samples per year to meet our compliance requirements.

574
00:40:37,440 --> 00:40:41,240
 They're sure it's a little bit slightly higher because we've actually had to do some replicates and different things.

575
00:40:41,240 --> 00:40:45,880
 That number is slightly higher. The base minimum is our goal.

576
00:40:45,880 --> 00:40:53,040
 And the last part of that is our environmentally sensitive areas metrics or ESA, as it's known here.

577
00:40:53,040 --> 00:40:55,720
 Then we move into our simply sustainable framework.

578
00:40:55,720 --> 00:41:00,120
 One of our goals as a city is to reduce our electric consumption.

579
00:41:00,120 --> 00:41:03,400
 This slide does not show that it actually shows it went up.

580
00:41:03,400 --> 00:41:09,920
 That's directly related to the last year we had one of the highest demands on potable water we've seen in years.

581
00:41:09,920 --> 00:41:18,480
 And 70 to 75 percent of the electric consumption for city facilities is driven by our water and wastewater plants.

582
00:41:18,480 --> 00:41:20,080
 So that number is directly related to that.

583
00:41:20,080 --> 00:41:28,360
 So when you see DWU come before you and show different things on their metrics and how much water was provided and treated last year, that's what drove that up.

584
00:41:28,360 --> 00:41:32,640
 That metrics a soft metric. It's a five percent goal to reduce annually.

585
00:41:32,640 --> 00:41:35,800
 So in other words, five percent below what we did in 2019.

586
00:41:35,800 --> 00:41:38,800
 It's not weather normalized. It doesn't account for growth.

587
00:41:38,800 --> 00:41:42,880
 It's just a base thing that was set by state law. That's one of our goals.

588
00:41:42,880 --> 00:41:47,000
 The right side shows our natural gas consumption, which is just key to note as well there.

589
00:41:47,000 --> 00:41:54,360
 Our trend is basically going down with the one anomaly during covid year of 2020.

590
00:41:54,360 --> 00:41:58,000
 Our department structure, we're basically 39 strong.

591
00:41:58,000 --> 00:42:02,040
 We cover sustainability efforts, which touch on a lot of different things.

592
00:42:02,040 --> 00:42:12,600
 And then we have our gas well inspections program, our industrial pretreatment, landfill, municipal lab, watershed protection, and then a small admin group that supports all of that.

593
00:42:12,600 --> 00:42:17,800
 So if you look at that as a breakdown, the admin is new. We've shifted around over the years.

594
00:42:17,800 --> 00:42:22,760
 We haven't been we were part of DWU's admin. We shifted over to sustainability.

595
00:42:22,760 --> 00:42:25,160
 We're trying to get that on the books correctly.

596
00:42:25,160 --> 00:42:30,120
 So it actually shows four because there's a proposal, a supplemental to add a position.

597
00:42:30,120 --> 00:42:40,240
 Sustainability is showing going down because, again, the director position and the assistant director position are moving out of sustainability and moving into admin, which makes more sense.

598
00:42:40,240 --> 00:42:45,280
 Water lab is water and wastewater labs shown as two different lines this year.

599
00:42:45,280 --> 00:42:51,000
 We're proposing to combine them into one. What will be the municipal lab has the bottom line on there.

600
00:42:51,000 --> 00:42:58,560
 So there's no increase in the number of staff. We're just combining that into one HBU or home business unit.

601
00:42:58,560 --> 00:43:06,680
 Gaswell State Flat landfill compliance shows up somewhat new. You may recall last year, we've always had landfill compliance with our reporting structure.

602
00:43:06,680 --> 00:43:14,800
 This year, we're specifically calling them out as an HBU to track all their costs and have that housed within environmental services sustainability.

603
00:43:14,800 --> 00:43:21,760
 So that's not a new ad. You'll see it on solid waste and recycling to show that they lose two positions and we gain two.

604
00:43:21,760 --> 00:43:25,600
 We didn't really gain them. They've always been part of us. They just weren't funded with us.

605
00:43:25,600 --> 00:43:34,040
 And then you'll see on watershed protection, that portion will stay directly on the drainage fund.

606
00:43:34,040 --> 00:43:40,920
 So we're asking for basically two and a half new positions this year. I'm going to start with the bottom one industrial pretreatment.

607
00:43:40,920 --> 00:43:48,320
 We have a FATS oil and greases program where we inspect grease traps, different things, all these pretreatment devices across the city.

608
00:43:48,320 --> 00:43:54,000
 We have to inspect those on a regular basis as well as every time a new certificate of occupancy is issued.

609
00:43:54,000 --> 00:43:58,840
 So we've been making do with one and a half full time staff and subsidizing with the supervisor.

610
00:43:58,840 --> 00:44:06,520
 That area has gone from basically 300 to 600 actively inspected grease traps over the last 10 years.

611
00:44:06,520 --> 00:44:10,680
 So it's time to take the half time position and make it be a full time position.

612
00:44:10,680 --> 00:44:19,320
 Then within admin, you might be surprised, but out of our almost 40 staff, we have no one person helping out all city departments for environmental compliance,

613
00:44:19,320 --> 00:44:25,680
 whether that be has waste, asbestos, due diligence, all the general aspects which aren't part of their day to day business.

614
00:44:25,680 --> 00:44:30,880
 Not how do you actually provide fresh water or potable water? How do you provide electricity?

615
00:44:30,880 --> 00:44:34,680
 But once you're doing that, what do you do with the bulbs you've created out of your building?

616
00:44:34,680 --> 00:44:39,840
 What do you do with that leftover waste? How do you do that correctly? So we're asking for a position to do that.

617
00:44:39,840 --> 00:44:48,080
 The top one under sustainability, we actually want to step up and put our best foot forward and add a position solely dedicated to water conservation.

618
00:44:48,080 --> 00:44:50,840
 We haven't had that. It's kind of been done on all different pieces.

619
00:44:50,840 --> 00:44:55,760
 It's time to step up. That aligns well with what DWU is doing on their long range planning.

620
00:44:55,760 --> 00:44:59,720
 It's time to have it. We'll work hand in hand with them. We're missing that opportunity.

621
00:44:59,720 --> 00:45:05,120
 So that's what we're asking for. Our strategic initiatives, I'm aligning here.

622
00:45:05,120 --> 00:45:08,320
 These are all things that we're working on that were council priorities.

623
00:45:08,320 --> 00:45:12,360
 So create a wildlife corridor map as part of the comp 2040 plan.

624
00:45:12,360 --> 00:45:17,200
 It's an ongoing process. We're working with different community members, different things to make that happen.

625
00:45:17,200 --> 00:45:24,640
 I should hopefully have a draft map back in front of council towards the end of the summer, probably August, September.

626
00:45:24,640 --> 00:45:31,120
 We're heavily involved with our climate action and adaptation plan. It's on track. However, it's a little delayed.

627
00:45:31,120 --> 00:45:36,200
 We were hoping to have it the first part of June. Right now, it looks like we'll probably complete that process sometime in August.

628
00:45:36,200 --> 00:45:43,720
 We've had a couple of delays on getting responses, getting things prepared and ensuring and outlining all of our targets and actions

629
00:45:43,720 --> 00:45:49,680
 that make sense for the city of Denton specifically, not to be generic and be like everybody else.

630
00:45:49,680 --> 00:45:53,000
 The last one on there is to expand our electric fleet and infrastructure.

631
00:45:53,000 --> 00:45:58,360
 So we're looking at EV charging, EV usage across all of Denton.

632
00:45:58,360 --> 00:46:04,280
 So we're not mandating EVs at this point, but we're looking at how can you charge them if you have them at your home or you have them at your business?

633
00:46:04,280 --> 00:46:10,480
 Where does that need to be? How do we get that equably across Denton? We're also looking at EV charging for the fleet.

634
00:46:10,480 --> 00:46:18,320
 How do we actually increase the number of EV vehicles we have and make use of those appropriately and right size our fleet?

635
00:46:18,320 --> 00:46:23,240
 So with that, I'll turn it over to Danielle unless you have any questions for me right now.

636
00:46:23,240 --> 00:46:29,760
 OK, thank you.

637
00:46:29,760 --> 00:46:33,920
 Right. Moving into financials for environmental services and sustainability.

638
00:46:33,920 --> 00:46:38,600
 This is a new fund, so we don't have the out years quite yet.

639
00:46:38,600 --> 00:46:46,480
 But the revenue there, you can see they have cost allocations, transfers in from DME water,

640
00:46:46,480 --> 00:46:53,560
 wastewater, drainage and solid waste, and then a small number of transfers in for twenty twenty four.

641
00:46:53,560 --> 00:47:01,680
 They also have the revenue from the water lab, pretreatment revenue and gas well inspection revenue for personal effort.

642
00:47:01,680 --> 00:47:05,680
 Sorry for expenses. We have the increase in personal services.

643
00:47:05,680 --> 00:47:11,120
 That's the three percent from the twenty three budget plus the cost of comp and class.

644
00:47:11,120 --> 00:47:15,520
 And then we have an average of two percent increase in operations.

645
00:47:15,520 --> 00:47:23,200
 And then the same as you saw with customer service, we have a supplemental line and there's supplemental requests total five forty one three ninety six,

646
00:47:23,200 --> 00:47:30,480
 which we'll get into on the next slides.

647
00:47:30,480 --> 00:47:42,320
 Oh, sorry. Sorry. I was just curious. I'm noticing that some of the fees increase just, I guess, as the number of.

648
00:47:42,320 --> 00:47:53,880
 Customers or whatever like that need to be inspected, go up, but the water lab has a flat rate from twenty twenty three.

649
00:47:53,880 --> 00:48:05,240
 I was wondering if there are they're doing the same number of inspections and then follow up question after that.

650
00:48:05,240 --> 00:48:08,120
 Michael Gagne, again, director for vital services, sustainability.

651
00:48:08,120 --> 00:48:12,560
 The water lab line is actually for the analysis we perform for outside customers.

652
00:48:12,560 --> 00:48:17,520
 So the number of samples coming in is staying the same and our internal costs at this point are projected to be the same.

653
00:48:17,520 --> 00:48:19,560
 That's why that line stays flat.

654
00:48:19,560 --> 00:48:25,240
 And is that I notice that it says coliform specifically, is that the only outside analysis we perform primarily?

655
00:48:25,240 --> 00:48:28,200
 Yes, there's a few others we do. Those are getting directly charged back.

656
00:48:28,200 --> 00:48:34,120
 If we do it, this is one one line that gets called out separately every year to make sure we're clear for that.

657
00:48:34,120 --> 00:48:37,200
 It includes both private and other city customers.

658
00:48:37,200 --> 00:48:40,640
 So we have various city municipalities that come to us for that analysis.

659
00:48:40,640 --> 00:48:42,560
 We have to do it for private water wells.

660
00:48:42,560 --> 00:48:46,840
 And I see that as a you know, there are a lot of small and growing communities in the area.

661
00:48:46,840 --> 00:48:54,080
 And like I said, water well testing, things like that, it seems like this is an opportunity for for the water lab to bring in external revenue.

662
00:48:54,080 --> 00:49:00,640
 I know it's you probably are cost competitive with commercial labs because they have a lot of different overhead.

663
00:49:00,640 --> 00:49:04,840
 So I just see that as perhaps an opportunity to grow a little.

664
00:49:04,840 --> 00:49:08,840
 You're not going to fund the department on it necessarily.

665
00:49:08,840 --> 00:49:16,800
 But to provide a service to Sanger Crum, the the groundwater district, that sort of thing.

666
00:49:16,800 --> 00:49:22,400
 Thank you. I think he's still on.

667
00:49:22,400 --> 00:49:27,440
 If it's if it's on this. I'm sorry.

668
00:49:27,440 --> 00:49:30,800
 Do you have a question? Yeah, I do. Just go ahead.

669
00:49:30,800 --> 00:49:35,200
 General fund clarification and revenues.

670
00:49:35,200 --> 00:49:38,120
 Oh, that is for her. OK. Well, I'll start with her.

671
00:49:38,120 --> 00:49:49,800
 OK, so that's a cost allocation to the to I'm sorry for the services that environmental services and sustainability provides to general fund.

672
00:49:49,800 --> 00:49:56,360
 OK, so it's for the thing. The other things that are funded under general fund that you guys work on and it gets transferred.

673
00:49:56,360 --> 00:50:00,280
 OK, and you don't you don't have a franchise fee. Is that correct?

674
00:50:00,280 --> 00:50:04,320
 We do not have a franchise fee for environmental services and sustainability.

675
00:50:04,320 --> 00:50:15,760
 OK. And the operations line, it's going up from the twenty twenty three estimate to preliminary by about two hundred thousand.

676
00:50:15,760 --> 00:50:18,600
 So great question. There's a lot of departments.

677
00:50:18,600 --> 00:50:26,280
 So if you come back to their as Michael discussed on the FTE slide, there are some departments that are moving into this fund specifically.

678
00:50:26,280 --> 00:50:28,920
 So we have some expenses that move with those as well.

679
00:50:28,920 --> 00:50:33,000
 OK. All right. That makes sense. Thank you.

680
00:50:33,000 --> 00:50:39,800
 Sure. Any other questions before we move on?

681
00:50:39,800 --> 00:50:44,280
 So Michael has no baseline adjustment requests.

682
00:50:44,280 --> 00:50:49,800
 We do have some supplemental requests. The top one is that two percent merit increase.

683
00:50:49,800 --> 00:50:54,800
 We have the former police department gun range environmental assessment.

684
00:50:54,800 --> 00:51:01,760
 We are we the budget team is proposing that that be funded in the current year versus in twenty four.

685
00:51:01,760 --> 00:51:05,680
 The same for this as best as assessment for city facilities.

686
00:51:05,680 --> 00:51:10,280
 We're also proposing that that be funded in the current year.

687
00:51:10,280 --> 00:51:15,640
 And then the next three lines are those positions that Michael touched on a little bit earlier.

688
00:51:15,640 --> 00:51:20,720
 And then finally, a compliance tracking software for fourteen thousand four hundred dollars.

689
00:51:20,720 --> 00:51:26,040
 So the total one time cost is two hundred and fourteen thousand four hundred of that.

690
00:51:26,040 --> 00:51:29,960
 We're proposing two hundred thousand be funded in the current fiscal year.

691
00:51:29,960 --> 00:51:34,720
 The recurring costs are all personnel related with the addition of the two and a half percent.

692
00:51:34,720 --> 00:51:41,240
 And then the merit increase and then the total requests three hundred and forty one thousand three hundred ninety six.

693
00:51:41,240 --> 00:51:45,920
 Two and a half of two and a half new FTE Barbara has a question.

694
00:51:45,920 --> 00:51:53,960
 Sure. Did you entertain like the asbestos assessment of contract having contract on that?

695
00:51:53,960 --> 00:51:58,960
 Because I'm wondering how many do you have enough to keep it busy?

696
00:51:58,960 --> 00:52:08,400
 And in times past, we have just contracted things like that rather than provide a full employment package for someone.

697
00:52:08,400 --> 00:52:10,280
 Yes, ma'am. Michael Gagne again.

698
00:52:10,280 --> 00:52:12,880
 And as you may notice, it's a one time cost.

699
00:52:12,880 --> 00:52:15,480
 There are no full time positions associated with that.

700
00:52:15,480 --> 00:52:19,400
 We do have a third party consultant that will perform that work for us.

701
00:52:19,400 --> 00:52:23,120
 I am also personally licensed to do it if I need to on behalf of the city.

702
00:52:23,120 --> 00:52:25,360
 But that is a third party contract.

703
00:52:25,360 --> 00:52:31,840
 It's just to get the funds to get us caught up because the bulk of our facilities don't have a current assessment on them

704
00:52:31,840 --> 00:52:35,280
 to ensure that we can do normal routine maintenance and other things on that.

705
00:52:35,280 --> 00:52:38,840
 It's a good planning practice to make sure we have that.

706
00:52:38,840 --> 00:52:51,200
 Thank you. And the same next steps as customer service with that.

707
00:52:51,200 --> 00:52:56,080
 We'll take any additional questions. Any other questions? No.

708
00:52:56,080 --> 00:52:59,760
 OK. Thank you. So all right.

709
00:52:59,760 --> 00:53:07,640
 Let me read. OK.

710
00:53:07,640 --> 00:53:11,400
 The Public Utilities Board will now at nine fifty three a.m.

711
00:53:11,400 --> 00:53:16,520
 convene in a closed meeting to deliberate the closed meeting item set forth on the agenda,

712
00:53:16,520 --> 00:53:23,120
 which include the following a I.D.P.B. twenty three one hundred and eleven deliberations

713
00:53:23,120 --> 00:53:31,480
 regarding certain public power utilities, competitive matters under Texas Government Code Section five five one point zero eight six.

714
00:53:31,480 --> 00:53:43,720
 Consultation with attorneys under Texas Government Code Section five five one point zero seven one.

715
00:53:43,720 --> 00:53:49,240
 OK. The Public Utilities Board has now at ten thirty seven a.m.

716
00:53:49,240 --> 00:53:53,960
 reconvened from the closed session and no official action was taken.

717
00:53:53,960 --> 00:54:13,080
 Now we'll go into the electric utility budget.

718
00:54:13,080 --> 00:54:20,760
 So we'll start off with some metrics, probably the most important one.

719
00:54:20,760 --> 00:54:24,040
 Is how do we compare to other utilities?

720
00:54:24,040 --> 00:54:30,440
 And as you can see, we are very close to lowest cost electric utility amongst all the

721
00:54:30,440 --> 00:54:44,120
 municipalities that we compare ourselves to. We do know that San Antonio, for example, is got a pending rate increase, so we should be with our recommendation

722
00:54:44,120 --> 00:54:50,120
 that you'll see later. No rate increase in fiscal year twenty four.

723
00:54:50,120 --> 00:54:56,120
 We'll remain one of the lowest cost providers in Texas.

724
00:54:56,120 --> 00:55:05,840
 And then, as you know, we are one hundred percent renewable and we always look at what our renewable costs are, our costs relative to other one hundred percent renewable

725
00:55:05,840 --> 00:55:13,920
 providers. In this case, those are reps, retail energy providers in the in the competitive area.

726
00:55:13,920 --> 00:55:24,040
 And as you can see, we're we're the lowest cost of any one hundred percent renewable option in Texas.

727
00:55:24,040 --> 00:55:28,240
 The other metric that we we track is our reliability metrics.

728
00:55:28,240 --> 00:55:37,200
 How how reliable are we? And there's two metrics that we really focus on, and that's system average interruption frequency or safety.

729
00:55:37,200 --> 00:55:45,920
 And as you can see, we've been consistently since 2009 below the average for the industry.

730
00:55:45,920 --> 00:55:51,120
 And the same can be said for the system average interruption duration index.

731
00:55:51,120 --> 00:56:01,840
 So we're very proud of those. We again this year were awarded by a award for reliability.

732
00:56:01,840 --> 00:56:06,280
 Our structure, we have basically six divisions.

733
00:56:06,280 --> 00:56:12,440
 We are adding we have added a few interesting positions or critical positions this year.

734
00:56:12,440 --> 00:56:26,840
 One, we added a Regulatory Affairs Administrator, someone that helps us with all of our matters in Austin before the legislature and before the P.U.C.T.

735
00:56:26,840 --> 00:56:30,080
 and ERCOT. As you know, we're a very highly regulated industry.

736
00:56:30,080 --> 00:56:39,640
 And so we added that position. We're also adding a public information officer that will help us to raise the visibility of D.M.E.

737
00:56:39,640 --> 00:56:44,600
 in the community and the programs that we offer for the benefit of our customers.

738
00:56:44,600 --> 00:56:49,880
 Total headcount is one hundred and eighty five employees.

739
00:56:49,880 --> 00:57:00,720
 Here's our FTE summary and be glad to answer any questions you might have on that.

740
00:57:00,720 --> 00:57:11,160
 And our summary, the rest of the summary for a total of one hundred and eighty seven, we're asking for two additional positions this year from one hundred eighty five.

741
00:57:11,160 --> 00:57:22,480
 And I'll point out that we're still below our employment levels that we had in 2020 before the pandemic.

742
00:57:22,480 --> 00:57:29,120
 And the two positions where we're requesting one is an electric system operations outage coordinator.

743
00:57:29,120 --> 00:57:40,520
 As I mentioned, we are very highly regulated and we are seeing more and more requirements with penalties from ERCOT and from P.U.C.T.

744
00:57:40,520 --> 00:57:50,880
 And this is not only a regulatory benefit, but also a safety benefit for all of our employees that are out working on lines, making sure that communication is good.

745
00:57:50,880 --> 00:58:05,880
 And we're working on de-energized and the the operators know the field staff know what lines are are engaged, operational with high voltage on them and which ones are not.

746
00:58:05,880 --> 00:58:10,520
 And then the other one is relay technician. We have keep adding substations.

747
00:58:10,520 --> 00:58:18,440
 We as you'll see in the capital budget, we're adding a number of automated metering applications.

748
00:58:18,440 --> 00:58:27,200
 And these require a lot of relay adjustments and relay settings and programming.

749
00:58:27,200 --> 00:58:35,440
 Our three strategic initiatives that will bring to your attention this year, one is to update the Denton Renewable Resource Plan.

750
00:58:35,440 --> 00:58:45,160
 The plan, which was adopted in 2007, 2017, is now getting a little dated.

751
00:58:45,160 --> 00:58:59,520
 And we've had significant changes in the market and the wholesale market that require us to relook at how we're going to continue to achieve the 100 percent renewable goal in a cost effective manner.

752
00:58:59,520 --> 00:59:14,480
 We continue to see high levels of rooftop solar penetration, and we want to take advantage of that as far as the community benefits that it provides in our 100 percent solar supply.

753
00:59:14,480 --> 00:59:24,000
 There are upcoming requirements for making sure that with this high level of renewables that we have in the state,

754
00:59:24,000 --> 00:59:34,640
 that we have adequate dispatchable generation to back them up in order to make sure that on days when the wind isn't blowing and a day like today where it's a little cloudy,

755
00:59:34,640 --> 00:59:43,160
 we don't have as much solar production that we have adequate resources to generate electricity to meet the needs of Texans.

756
00:59:43,160 --> 00:59:54,440
 So those are coming, and the plan will include options in the event that those dispatchable requirements become more burdensome.

757
00:59:54,440 --> 00:59:56,560
 And of course, we're always looking at costs.

758
00:59:56,560 --> 01:00:05,560
 And as those metrics I showed you initially, we're very sensitive to the costs, but we also want to make sure that we're achieving that 100 percent.

759
01:00:05,560 --> 01:00:12,160
 The second initiative is a new campus for the Denton Municipal Electric.

760
01:00:12,160 --> 01:00:17,080
 We've been growing. Our number of meter counts continues to go up.

761
01:00:17,080 --> 01:00:19,720
 Technology continues to move forward.

762
01:00:19,720 --> 01:00:29,520
 Our customers' expectations with regard to our integration of that technology and in providing service to them continues to move forward.

763
01:00:29,520 --> 01:00:37,520
 And we're at a point now where we've outgrown our existing structure, and we're looking.

764
01:00:37,520 --> 01:00:47,400
 So what we're going to be doing is we'll be doing a design and real estate acquisition in the next fiscal year and then begin construction,

765
01:00:47,400 --> 01:00:52,200
 which is a two year process in the subsequent two years.

766
01:00:52,200 --> 01:00:57,200
 Of course, that's subject to your approval and to City Council's approval.

767
01:00:57,200 --> 01:01:00,840
 And initiative three, we call utility of the future.

768
01:01:00,840 --> 01:01:08,040
 We will be adding significantly more automated distribution management system equipment.

769
01:01:08,040 --> 01:01:21,040
 That's a self-healing grid, if you will, to to increase our level of reliability for our customers for the high growth areas of our service territory,

770
01:01:21,040 --> 01:01:40,560
 which are out along 35E or 35W, the whole Hunter Cole Ranch area will be converting or will be installing that distribution system at a higher voltage than the existing 13 to KV system that we have around the rest of the city.

771
01:01:40,560 --> 01:01:59,400
 This enable us to meet the demands of those areas with EV, smart homes, all the other electrical demands that we're seeing on a much more cost effective basis because we can pack more power into a substation with this higher voltage.

772
01:01:59,400 --> 01:02:12,680
 That does require us to buy equipment for both the 13 to and the 25 KV systems, and that's part of the thing that's driving our need on the campus redevelopment.

773
01:02:12,680 --> 01:02:18,480
 We will be looking and in next fiscal year at the development of demand resource programs.

774
01:02:18,480 --> 01:02:26,920
 Demand resource programs will be programs where we'll incentivize customers to reduce their energy demand during peak periods.

775
01:02:26,920 --> 01:02:39,960
 Again, as the market becomes more and more dependent on renewables, especially solar, when the sun goes down, there's about a two to four hour period in which the market needs more resources,

776
01:02:39,960 --> 01:02:47,600
 and the cheapest resource is one is from is associated with a megawatt or a kilowatt hour that you never use.

777
01:02:47,600 --> 01:02:54,520
 And so we will be developing these programs over the next year or so.

778
01:02:54,520 --> 01:03:06,200
 And we're also next year, we've actually started this year, but next year we'll be laying out a new work management system to increase the productivity of our workforce.

779
01:03:06,200 --> 01:03:11,480
 We are reengineering the way we do work at DME so that we can do more with less.

780
01:03:11,480 --> 01:03:19,760
 And that's important when we have a level of growth that we are seeing in our community now.

781
01:03:19,760 --> 01:03:25,160
 And with that, I'm going to turn it over to Danielle.

782
01:03:25,160 --> 01:03:35,480
 Going back to the grid of the future, utility of the future section there, you mentioned Hunter Cole will be built out at twenty five KV.

783
01:03:35,480 --> 01:03:44,120
 Is there a long term plan to convert the entire system of twenty five KV or will we have two separate zones?

784
01:03:44,120 --> 01:03:46,080
 There's a billion reasons.

785
01:03:46,080 --> 01:03:50,960
 So it's a great question and we are evaluating that.

786
01:03:50,960 --> 01:04:01,840
 But the engineering evaluation of what the cost would be to go to twenty five KV throughout the system will take some time to develop and some money to do that analysis.

787
01:04:01,840 --> 01:04:06,840
 The analysis itself is several million dollars because it's a very complex system.

788
01:04:06,840 --> 01:04:13,160
 So the answer to your question is not immediately, maybe in the future, but that we many years down the road.

789
01:04:13,160 --> 01:04:19,720
 And that would because it would require every feeder gets every building, gets a new transformer, every substation feeder, gets a new transfer.

790
01:04:19,720 --> 01:04:30,240
 Every every transformer you see hanging on a pole today, every yard, every pad mount transformer would have to be basically replaced with a different voltage.

791
01:04:30,240 --> 01:04:40,400
 Thank you, which now with how long it takes you to actually if you can get the transformers, that's right.

792
01:04:40,400 --> 01:04:53,760
 Yeah, I think the other thing that I mentioned, the kind of response to that, Devin, is that I think I think there's probably some areas of our existing system that are probably OK at the 13 to that we probably don't need to change.

793
01:04:53,760 --> 01:05:08,120
 But I think I think until we do this engineering analysis and we have not budgeted this for next year, but at some point we need to ask for those dollars, do that engineering analysis, kind of a longitudinal type of study and set the course.

794
01:05:08,120 --> 01:05:15,040
 But again, we just made, you know, half a billion dollars worth of investments in our system, right?

795
01:05:15,040 --> 01:05:19,080
 We need to let those depreciate a little bit more before we start converting things.

796
01:05:19,080 --> 01:05:26,520
 But I think I think certainly in the future, probably well beyond our lifetimes probably makes some sense to do.

797
01:05:26,520 --> 01:05:34,440
 And I think it's our goal to at least have that plan in place so that future folks can look at look at that in the future.

798
01:05:34,440 --> 01:05:36,920
 But probably not everything will be converted.

799
01:05:36,920 --> 01:05:40,000
 Yeah, it's expensive proposition.

800
01:05:40,000 --> 01:05:41,720
 It's a very expensive proposition.

801
01:05:41,720 --> 01:05:53,760
 And typically in cities, communities that have done it, it's done sequentially one area by another based on the substation that they're connected to.

802
01:05:53,760 --> 01:05:57,560
 So you have to you can't convert the system all at one time.

803
01:05:57,560 --> 01:06:03,600
 It would take many, many years to transition over in order to maintain that reliability that we're known for.

804
01:06:03,600 --> 01:06:05,400
 And we want to continue to have.

805
01:06:05,400 --> 01:06:10,240
 Yeah, the other just really quick, the other the other nugget that I'll kind of put out there.

806
01:06:10,240 --> 01:06:16,800
 You know, so so our our linemen, our operations folks have, you know, it's called fr rated uniforms.

807
01:06:16,800 --> 01:06:20,240
 Right. And those are rated to our current system.

808
01:06:20,240 --> 01:06:25,760
 Our our sister utility right next door to us co-serve doesn't have the same voltage.

809
01:06:25,760 --> 01:06:32,160
 So from from a mutual aid standpoint, they can come in and help us, but we can't help them.

810
01:06:32,160 --> 01:06:37,440
 Right. So it kind of makes it difficult to have that type of relationship with only it's only a one way relationship.

811
01:06:37,440 --> 01:06:45,480
 Right. And so I think that this is also going to help us with that and that we're going to have to relook at all our staff's uniforms, make sure they're at the higher voltage.

812
01:06:45,480 --> 01:06:52,560
 As a result of that, now we can expand the mutual aid type of support that we can give other utilities to the surrounding area.

813
01:06:52,560 --> 01:06:55,280
 But then they can also then reciprocate back to us as well.

814
01:06:55,280 --> 01:07:00,800
 So in the event that there's an emergency and we need help, you know, co-serve as an example is right next door to us.

815
01:07:00,800 --> 01:07:06,240
 They could potentially help us. Now, if it's widespread, probably got to do a whole lot of good because they'll be impacted as well.

816
01:07:06,240 --> 01:07:14,720
 But again, just as we're evaluating, this is all coming really out of out of winter storm area, the things that we've seen over the last two winters and certainly a very hot summer last year.

817
01:07:14,720 --> 01:07:19,840
 How can we how can we shore up the resources that we have to better support our customers?

818
01:07:19,840 --> 01:07:28,760
 Yeah. And one thing I'll add to that is that that twenty five KV equipment is pretty universal across Texas and much of the United States.

819
01:07:28,760 --> 01:07:39,680
 So from mutual aid perspective and from an inventory perspective, if we were to hit it hit with a tornado or something that took out our system,

820
01:07:39,680 --> 01:07:51,640
 knowing that our neighbors and other utilities have the same size equipment that we could borrow and replace would get the lights back on quicker.

821
01:07:51,640 --> 01:08:08,360
 And with 13 to KV, there's there's very few communities in the U.S. that have 13 to KV. So we don't get that diversity that that inventory diversity that we would get with a twenty five KV system.

822
01:08:08,360 --> 01:08:10,360
 Danielle.

823
01:08:14,360 --> 01:08:25,160
 So moving into the financial section, the assumptions are the two and a half percent load growth that you previously saw in the utility forecast presentation.

824
01:08:25,160 --> 01:08:35,280
 The revenue projections include no rate increase in twenty four, but we do propose a rate increase beginning in twenty five.

825
01:08:35,280 --> 01:08:41,960
 And then additionally, a proposed three percent rate increase from twenty five to twenty eight.

826
01:08:41,960 --> 01:08:51,600
 And then the expense projections include the increase in personnel costs due to the compensation classification study and the craft pay adjustments,

827
01:08:51,600 --> 01:09:01,120
 future merit increases and annual inflation, and then an average two percent increase in operations and maintenance costs.

828
01:09:01,120 --> 01:09:13,760
 So the pro forma here, you can see where we're estimating to come in under budget that's based off of the purchase power forecast and the components discussed in closed session.

829
01:09:13,760 --> 01:09:26,920
 The same for the preliminary budget where we're expecting to be under the current year's budget based on the purchase power forecast and the components discussed in closed session.

830
01:09:26,920 --> 01:09:34,800
 Additionally, the purchase power expenses are also expected to decrease in line with the revenue decrease.

831
01:09:34,800 --> 01:09:37,480
 You can see that increase in personnel costs.

832
01:09:37,480 --> 01:09:46,720
 Again, that's the comp and class and the three percent O and M is an increase of two percent.

833
01:09:46,720 --> 01:09:53,400
 The debt service increases appropriately with our capital improvement plan, which we'll see shortly.

834
01:09:53,400 --> 01:10:02,640
 We have baseline adjustments in the amount of two point four million and then several supplemental requests in the amount of one point eight million.

835
01:10:02,640 --> 01:10:08,360
 This pro forma does contemplate a three percent increase for beginning in twenty five to twenty eight.

836
01:10:08,360 --> 01:10:21,800
 That allows us to be within our target reserves and we are debt service coverage ratio beginning in twenty six.

837
01:10:21,800 --> 01:10:32,960
 This is the same financial data, but contemplates a twelve and a half percent increase in twenty five versus the three year multi year rate increase.

838
01:10:32,960 --> 01:10:36,920
 Proposed rate changes, the cost of service study is ongoing.

839
01:10:36,920 --> 01:10:43,440
 So we plan to bring back their proposed rate changes as a result of that study in the coming months.

840
01:10:43,440 --> 01:10:46,440
 The capital plan is this is the high level summary.

841
01:10:46,440 --> 01:10:51,960
 You can see the building that Terry referred to in the strategic initiatives is the second line.

842
01:10:51,960 --> 01:11:05,240
 We have a total of ninety three million proposed for twenty four, a total of four hundred and eleven point nine million for the total five year.

843
01:11:05,240 --> 01:11:16,800
 So here's a summary by funding type. Again, the same totals just broken down by how we plan to fund those different projects.

844
01:11:16,800 --> 01:11:20,200
 Change requests, DME has a handful of baseline adjustments.

845
01:11:20,200 --> 01:11:27,600
 Again, as you saw with the other presentations we've included in that right hand column, how we suggest funding those.

846
01:11:27,600 --> 01:11:32,000
 All of these are suggested to be added to the operating budget.

847
01:11:32,000 --> 01:11:40,360
 The first one there is an insurance increase to premiums of six hundred and seventy five thousand dollars apprenticeship training.

848
01:11:40,360 --> 01:11:44,960
 DME has seen an increase in the number of apprentices that they have within the utility.

849
01:11:44,960 --> 01:11:49,840
 So to go along with that, we need to train those apprentices.

850
01:11:49,840 --> 01:11:55,120
 Additionally, they're also growing their program for their existing journeymen.

851
01:11:55,120 --> 01:12:02,800
 So one hundred and fifty thousand for that personal protective equipment, an increase of eighty five thousand.

852
01:12:02,800 --> 01:12:06,360
 The compliance consultant one hundred and fifty thousand.

853
01:12:06,360 --> 01:12:11,480
 The transformer test equipment is a one time cost of three hundred and thirty thousand.

854
01:12:11,480 --> 01:12:21,240
 And then finally, on this slide, the consultant fees for the emergency services retainer of two hundred thousand dollars.

855
01:12:21,240 --> 01:12:29,120
 More baseline adjustment increases, application maintenance and support contracts increase of one hundred thousand dollars.

856
01:12:29,120 --> 01:12:36,320
 The additional testing and repair to maintain deck maintain the deck three hundred and twenty five thousand dollars.

857
01:12:36,320 --> 01:12:46,280
 And accessory electric equipment, they exempt them for their trucks one hundred and twenty five thousand dollars to go along with the previous two trainings.

858
01:12:46,280 --> 01:12:52,120
 We saw this is an increase for the substation tax of three hundred three thousand dollars.

859
01:12:52,120 --> 01:13:05,800
 And then finally, the Texas Meter and Device contract of sixty thousand dollars for a total of two million twenty three thousand dollars for recurring and then three hundred and thirty one time.

860
01:13:05,800 --> 01:13:10,640
 The supplemental packages, the merit increase is at the top.

861
01:13:10,640 --> 01:13:21,600
 The new data network assessment, design and planning three hundred and fifty thousand dollars, the outage coordinator and the relay technician, which Terry discussed earlier in the presentation.

862
01:13:21,600 --> 01:13:26,000
 Grant for storage of electrical equipment, two hundred and ten thousand dollars.

863
01:13:26,000 --> 01:13:32,760
 And finally, the construction standards for the voltage conversion, a one time cost of four hundred and fifty thousand dollars.

864
01:13:32,760 --> 01:13:37,680
 We're suggesting that all of these be funded from the operating budget.

865
01:13:37,680 --> 01:13:47,400
 In the operating budget, these all of these requests on this slide are funded from the existing vehicle replacement plan.

866
01:13:47,400 --> 01:13:53,040
 So this is no additional funding. This is this is being funded from existing funds.

867
01:13:53,040 --> 01:14:06,000
 I have to pick up truck for sixty five thousand dollars and then two forty eight foot service bucket trucks for two hundred and fifty nine thousand seven hundred forty each for a total of two point four million.

868
01:14:06,000 --> 01:14:14,240
 So if these aren't additional, they're replacements of something we currently have or these are additional that comes out of the fleet.

869
01:14:14,240 --> 01:14:16,480
 These are additions.

870
01:14:16,480 --> 01:14:19,840
 The funding source is from existing funding, though.

871
01:14:19,840 --> 01:14:23,080
 All right. Great.

872
01:14:23,080 --> 01:14:29,680
 And then those same next steps that we've seen in the other presentations.

873
01:14:29,680 --> 01:14:37,320
 I'll take any additional questions. Thank you.

874
01:14:37,320 --> 01:14:39,880
 See none. Thank you. All right.

875
01:14:39,880 --> 01:14:43,560
 It is ten fifty eight and that is the agenda.

876
01:14:43,560 --> 01:14:48,400
 So, Billy, would you like to move to adjourn to adjourn, please?

877
01:14:48,400 --> 01:14:49,200
 We are adjourned.