>> Okay, it is 9 o'clock and we have a quorum so a call to order the public utilities board
for the City of Denton on Monday, June 12, 2023.
Our first item is presentations for members of the public.
Is anyone from the public wishing to present?
I see none.
So we'll move on to the consent agenda.
Does any board member wish to pull any items from A through F?
>> A. >> A.
Any others?
I see none.
Do we have a motion to approve items B through F?
Thank you and a second?
>> Second.
>> There'll be seconds.
All in favor say aye.
Aye.
Opposed?
Item A.
>> Good morning members of the PUB.
Randy Key, Denton Municipal Electric, electric engineering supervisor.
I'll gladly take any questions.
>> It was just a big number.
>> It was a big increase.
>> Yes, sir.
>> Really wasn't a presentation on how we got there, it was just a lot of statutes quoted.
So it gets a little confusing.
How did we get there?
>> So we were in talks with a lot of other electric utilities.
And we heard that wood poles were becoming an issue.
We decided to put in a bulk order as the lead times went from 14 weeks to six months.
We put in the PO.
Stella Jones came back and said that they couldn't fulfill
because we haven't done any price increases.
So they sent over the price increase and it was an 85% addition.
>> Okay. Was that already in the contract to have increases in price?
>> Yes, sir.
>> And it's only due to an extension of the realization of when we can get them.
Is that correct?
>> Yes, sir.
>> Okay.
So is this going to -- this could possibly change as well, right?
With the current atmosphere of --
>> I see it increasing even more, yes, sir.
>> Okay. All right.
>> Yeah. I mean, I'll just mention to tag --
tag a little bit on what Randy is saying.
This is another supply chain issue, frankly, but this one is very unique because this one has
to do with the creosote that's used to cover the poles.
There's some issues going on with that.
It's also limiting the supply.
And so in addition to adding these dollars, we're also looking to other opportunities
like utilizing other steel structures when it comes to our distribution system.
But again, that's part of the normal operational decisions that we make.
Obviously, we don't have a whole lot of steel poles out there for distribution,
but in the event that we need to, if there is a shortage, if we can't get these orders in,
we'll definitely do that as well.
But it's certainly just another supply chain issue that we're seeing along with transformers
and switch gear and a number of other pieces of equipment out there.
>> Okay.
>> Have you looked at concrete poles?
>> Yes, ma'am.
We have.
We have some on the system currently, but we're not fully set up for concrete poles as we are,
as for our steel and wood is easier for construction.
>> Okay. This item will be-- I will bring back up in relation to an item
on individual consideration, so I appreciate you letting us know about that.
I'll go ahead and move approval.
>> Yes, sir.
Thank you.
>> I second.
>> Thank you, Berber.
All in favor, say aye.
>> Aye.
>> Opposed? Carries.
Next item is approval of the May 22nd, 2023 minutes.
Do we have any changes or corrections?
Seeing none, do we have a motion to approve?
>> Approve.
>> Berber's motioning and a second?
>> Second.
>> The second.
All in favor, say aye.
>> Aye.
>> Motion carries.
Item B, consider recommending the adoption of an ordinance for the city of Denton
to execute a contract with Mountain Cascade of Texas, LLC.
>> Good morning.
I'm Cole Tankersley.
I'm a capital projects project manager, and I'll be presenting the I-35 project today.
This is a-- this project is in support of TxDOT's relocation, widening of the freeways,
and we'll be moving the utilities in support of that.
It's a pretty large project.
It starts south near US 380, and it'll go all the way up to the Milam Road.
And it's a mix of wastewater and water with around 30,000 linear feet
of water relocation and wastewater.
And as I mentioned before, this is a TxDOT reimbursable project,
so we'll be getting 100% reimbursed.
We had three companies that bid, Mountain Cascade was the one that came in at the lowest,
that's over-- just over 16 million.
The other two were around 22 million.
And this is a pre-qualified list, so all three companies are more than capable
of completing this project.
And this is an invitation for bids, so we just went with the lowest of those three.
The public utility board's today, council will be on the 27th, and we'll give a notice
to proceed immediately following that so that they can start ordering material
and begin construction.
And the project's estimated to be about 300 days in construction.
There's some time limits to meet TxDOT's requirements
so that they can begin their work.
The total amount was 16,200,000.
The contingency is 5% for just over 800,000 for a total not to exceed of 17,000,000.1.
Do you have any questions?
>> I do. Can we go back to the code page or the--
>> Which page?
>> The tab with the three bids?
>> Yes, ma'am.
>> Are you-- I always get concerned when there's that big of a spread
between the low bidder and the next two?
>> Yes, I figured you have that question.
There's a couple of reasons.
One, Mountain Cascade is already doing this type of project for us right now.
So their ability to mobilize is cheaper.
They're already doing it.
They already have the teams created.
They're just going to add additional people.
So they were able to be a little bit lower for those reasons.
In addition, they had two choices.
They could use ductile iron pipe or HDPE which is like a polymer high density polyurethane pipe.
With that, they chose the HDPE which is cheaper.
In addition, they have Mountain Cascade purchased a machine that fuses it.
So they don't have to subcontract that out.
And they were able to come in much lower than the other two because I think they had
that capability in addition to their already mobilized.
>> Okay.
>> So because I mean that's the first thing we saw too.
It was like what's going on here?
>> How many change orders are we going to have?
>> And I will say that they're doing the exact same work right now in a different section
and they're doing a great job, so.
>> Which section are you referring to?
>> It's called the Mayhill Project.
So you'll see them out here.
I think they're by BJ's right now.
And what's that?
James Wood.
So if you're driving on the I-35, you see that pipe.
That's them doing that project right now.
>> Yeah. So your prequalification requirements,
were they TxDOT approved prequalification requirements?
>> Yes, sir.
>> Okay. Why did you decide to go with just the IFB on this one rather than you've had a history
of going with best value bits?
>> It's required, sir.
It's required to be IFB for TxDOT reimbursement.
>> Right.
>> So because it's the funding style from either state or federal funding.
But to make it a better situation, we went with a prequalified list to make sure
that the lowest bid is capable of doing the work.
>> Excuse me.
>> Yeah.
>> Yeah. So what we've done on these I-35 projects,
so when there's federal money that's involved, we're required to do IFB.
What we were finding were that you're kind of limited.
You know, you have to go with that low bid when you let everybody bid on it.
So what we were able to work out with TxDOT was to be able to create this prequalified list
and prequal-- I mean, look at all these firms, their qualifications,
all those types of things, and pre-approve them.
And then once we go out or once we determine we're ready for a project,
we can just release the project to these prequalified firms that we've already approved,
already reviewed their qualifications, and then we go with low bid based on those three.
>> Is there a certain percentage that TxDOT funded projects require for you to go
to the prequalification way instead of the best value bid you've been going with?
>> As far as I'm aware, if there's TxDOT money involved, we have to do low bid.
It doesn't matter what the cost is.
>> I'd audit that if I was you.
>> Okay.
>> Going backwards.
>> Yeah. I understand.
There's always, you know, we prefer to do the competitive seal proposal or the CMAR
that gives us more control over the type of contractors we get in, the qualifications.
But there's always a cost to getting free money or money from TxDOT and those types of things.
So we've worked with TxDOT to figure out a way that we can try to work in some
of those qualifications and things, and we're not just getting some random contractor,
you know, off the street that isn't really qualified to do this type of work.
>> I prefer that way of work myself, but I'm a former contractor, so I guess it was a month ago.
>> Yeah.
>> Okay. That's all I got.
>> Thank you.
>> Any questions?
All right.
Do we have a motion to approve?
>> Move approval.
>> Thank you, Billy.
And a second?
>> Second.
>> For a second.
All in favor say aye.
>> Aye.
>> Motion carries.
Management reports.
>> Madam Chair, so members of the POB, we've provided to you a memo from Solid Waste.
Certainly if you have questions regarding a grant that they've applied
for to address the Styrofoam problem at the landfill.
Certainly if there's questions you have on that.
And then on the future agenda, I think I've said at every meeting, budget, budget, budget, right?
Make sure your calendars are up to date.
You know, we're going to fill your time here with a lot of budgets between now
and the end of July.
And then finally on the new business action matrix, we've completed the first one
on there which is the debt load trends.
I did move the Winter Storm URI update to July 10th.
We've had a couple of things that come up and so I could not get to that.
But I'll commit to get to you by the 10th of July.
So with that, the other couple of items that weren't on here that I'll just mention.
One, if your term is expiring, please make sure if you're interested in being renominated
that you submit your documentation to Jesse Salazar, the city secretary's office.
If you have questions, please direct them to him or Kim can help you with that as well.
And then I think Billy wanted to give just a quick update on TNPA.
>> Okay, we're going to do that here?
>> We can do that here if you want to.
>> Okay, if you haven't heard, our general manager,
I think Bob Kahn has been the general manager for TNPA for about eight years now.
I think that's about right.
And he came in and Bob's really great, very qualified and very open and honest
and direct with the board and he went from having 190 employees shutting the plant
down and having six I think is what we have.
He did a great job with the legal, with the sale, with the plant sale,
with the, you know, he's an attorney but he's a guy that grew up in the electrical business.
He has decided to resign.
He's not retiring.
Although he said he was probably going to retire at TNPA, it's been announced, Tony.
Tony, sorry, I'm going to tell you, he's the director of Austin Energy.
>> Right, general manager.
>> General manager he is, which is going to be going from your, you know, your feet into the fire.
So God bless him on that and good luck to him.
Hate to lose him but we're getting at a point where we don't necessarily need
that qualified of a person honestly, I hate to say that but we're going to talk Friday.
I'm going to go to Brian with the other members and board members only.
It's not really required for PNO to be there and talk to two candidates for interim.
They wanted us, several of the board members wanted us to just decide the permanent one then
and I did not want to do that and so we're not going to do that.
On Friday, like I said, we'll interview those two candidates and then move on from there.
>> Madam Chair, that's all we have.
Certainly if there's any questions, happy to address them now.
>> It doesn't look like they're on.
All right, that brings us to concluding items.
Does any board member wish to have a future item put on an agenda
or comments to be made to the public?
I see none.
So we'll move into work session.
We're going to do it a little bit different.
We're going to do the customer service, environmental services and sustainability.
Then we'll go into closed session and we'll come back and do the electric.
>> Good morning, PUB, Danielle Stanford, budget manager.
So as Susan mentioned, we're going to do customer service, environmental services
and sustainability and then electric.
We are going to have a hybrid approach for each presentation.
So the manager or director of each utility is going to cover the first portion
of the presentation and then I'll cover the financials.
So first we'll begin with Krista Foster, the customer service manager,
and I'll turn it over to you, Krista.
>> Thank you, Danielle.
Madam Chair, board members, Krista Foster, customer service manager.
Let me go ahead and get this brought up.
And I will get us moving into the customer service budget starting with our metrics.
So what I've done is I've given you kind of our trend over the last four years
for our total number of accounts, our call volumes, the average time it's taking
for a representative to resolve a call, as well as the number
of bills that we're producing annually.
There have been increases in all four categories.
Certainly the sharpest increases that you'll note are both with our call volumes
and with our average call time.
That seems to be attributed to a lot of the financial and economic stresses
that our customers are experiencing throughout the pandemic and now post-pandemic.
We've also moved to a lot of self-service tools.
We've introduced eight new self-service forms on our website over the past 12 months.
So as we continue to take out some of those simpler calls, that again leads
to a longer call time as the things that people are getting
in for actually require resolution with a representative.
So if you look, the first thing we found is that it's helpful each year to remind everyone
that as we go into budget discussions, especially as it relates to utilities,
customer service has been moved as an internal service fund.
But we have no kind of operating reserve required for us.
And we allocate our expenses based on the usage
by the different utilities and the divisions that we serve.
We have a total of 56 and a half headcount that is broken down
into three major operating categories within our division.
The first is our contact center, our collections and revenue division,
as well as our utility billing areas.
Our FTE summary is we are preliminarily set for 62.5 FTE in the coming budget year.
We do have six FTE in supplemental requests
which we'll discuss more thoroughly as we move forward.
But that does include one frontline customer service rep, two customer service trainers,
and then some increases in support staff that have to support those frontline reps
with one senior customer service rep which functions as a team lead,
one supervisor and one cash operations specialist.
So in our strategic initiatives, our first initiative actually was finalized last week
and that is our phone system redesign.
We had a number of problematic call routing issues that were determined
with the old scripting methods even after we transitioned to the upgraded phone system.
Those original programs were copied into the new system so the problems were not resolved.
So what we've done is we've redone all of those call scripting methods.
We've rewritten our interactive voice response which is
that automated menu you hear when you first call in.
We've simplified that to make it easier to get to a representative.
We have added some extra latent features that allow us to better mobilize in the event
of an emergency and provide greater amounts of information to the public.
That did go live as of Thursday night last week and we operated with the new structure
on Friday with very few issues.
The second initiative is our Silver Blaze utility portal.
That project has been postponed slightly throughout time just because of some upgrades
that have needed to be done to our billing system.
That billing system upgrade is now in final stages of testing so we're hoping that we'll be able
to move forward with that throughout the rest of this year.
And our third initiative is our customer relationship management software
and our call center consolidation.
Frequently you'll hear us refer to that as 311.
I'm stepping back from calling it 311 and going for call center consolidation
since at initial onset we will not be utilizing the 311 designation.
We don't want that to create confusion possibly for our public
to where they may think they can just pick up the phone and make that dial with 311.
So as we look at moving into the customer relationship management software this is going
to allow us to integrate with all of the major departmental work order systems,
increase the amount of true self-service and give customers one point of contact
to reach a representative who can take care of their issue.
They can take care of multiple issues for multiple departments with one contact to one person.
So we also have a new mobile application that will replace Engage Denton as well
as a more robust service request area on our website.
This is expected with the first phase of launch to happen in November of this year
and then we'll be phasing throughout the next year.
And then I will turn it back over to Danielle for financials.
>> Okay. So as Krista mentioned the customer service fund is fully funded
by other departments, the departments that they serve.
So on the pro forma here you see that their sources
of revenue are mostly other city departments, the largest contributor being DME.
So our budget from the current fiscal year to FY24 has increased significantly as you see there
by about 1.3 million, the largest driver of that is the call volume.
So we allocate three different ways, one of those ways being the number of calls
that customer service takes for each entity that they serve.
DME is their largest customer and their call volume did increase by about 8% from 23 to 24.
These are of course estimated numbers at the end of each fiscal year.
We do a cost allocation true up so if we've, you know,
budgeted slightly off we do true that up at the end of each year.
Water, wastewater stay right on track with what they're budgeted, same for solid waste.
Airport fleet and engineering have increased slightly,
same thing that the customer service department is expanding their services
for those entities so their allocation reflects that.
Moving down into personnel services for expenses, that 24 number includes all
of the requests that Krista has identified.
So the bottom line, the 9.7 includes, is a fully loaded budget, it includes all
of the baseline and supplemental requests that she's requested.
If we do not approve those of course that bottom line would decrease
and the allocations would decrease accordingly as well.
Change requests, they have two baseline adjustment requests.
The first is their increase credit card processing fees, we are seeing that this is going
to be an issue even in the current year so we've just gone ahead and asked
that that be increased for the upcoming fiscal year.
And then the increase for the utility assistance program by about $50,000.
So a total based on adjustment request of 750,000.
In the right hand column you'll see that we've added that funding source this year.
This is what the budget team has proposed, the manner
which we proposed that that's going to be funded.
So here we're just adding it to their operating fund.
>> Is that 700 grand, where is that in your income statement over here?
>> It's in the operations line.
>> Okay. So that's coming from credit card processing fees
when customers pay their utility bills, right?
>> That's correct.
>> And that's the cost that the city's paying on behalf of the customers.
Why don't we pass that through on to the customers?
Not that I'm advocating for that, but I mean it's not unusual when you pay for a bill
with a credit card that that fee's passed back on to the person paying,
not the business that's paying that.
>> Especially the government entity.
>> Right. Yeah.
>> Krista Foster, customer service manager.
I had the pleasure of having to greatly look into that as my very first opportunity
to come before the board and council in 2019.
So credit card bylaws are very specific.
There are a couple of reasons.
Bottom line first and foremost,
city council made the decision they wanted no pass
through fees to our residential customers.
However, at that time, and we would have to review them again later
if that was the direction we were given, the bylaws indicated
that if we charge a pass through fee or a transactional fee to a commercial,
we must do that to a residential.
It could not be a varied fee.
It has to be a fixed rate fee.
And if we at that time had accepted passing on a fee, it prevented us
from accepting any recurring forms of payments through our website.
So there were a lot of additional costs that it would create for us in our business.
At that time, the operational costs for that were running about $25,000 to $30,000 a month,
and now they're running close to $90,000 to $100,000 a month.
So that's why you're seeing this type of increase.
>> Is that due to the volume of people who are using credit cards?
>> It is due to the volume.
We are seeing increased volumes.
Again, I think a portion of that is due to some of the economic hardships
and then people more are lending toward putting their bills on credit.
But I certainly can't say that that would be all of it.
>> Yeah, I just come from working in the financial industry,
and I know those interchange fees are pretty costly.
>> Yes.
>> Rewards cards and American Express, and it's a little bit unsettling as a taxpayer
that I'm paying 3 to 5 percent interchange fees on behalf of someone--
>> I was going to say our interchange rate has been running about 1 percent to 1.1 percent,
somewhere in that range, and we do not accept American Express.
>> Okay.
>> I'm assuming because of the interchange fees.
Thank you so much.
Any other questions?
>> You said that if you require commercial to pay it, then you also have to require residential?
>> Yeah, we cannot differentiate.
>> You can't-- same thing goes for the opposite, is that correct?
>> For what?
>> If you require residential to pay it, you also have to require commercial to pay it.
>> Correct.
>> Okay. Because that operational increase was more than-- I mean, the $700,000 was in both of them,
I'm sure, but it was more of an increase in your operations.
I'm not really clear on why that is because if you didn't--
[ Inaudible Remark ]
>> So you got operations at--
>> But the baseline of judgment is down below.
>> Decrease, but let's see.
>> Well, our operations budget has stayed flat from '23 to '24, and then the $750,000 you see
in the baseline adjustment second row from the bottom, that's because we don't assume
that those are approved and it's easily removed
from the baseline adjustment versus in the budget.
>> The baseline adjustment, you're-- I'm sorry, I was--
>> That's okay.
>> -- looking while you were--
>> That's okay.
>> -- answering.
The $750,000 is the credit card fees are in there?
>> It is.
It's in the-- the $750,000 is the $700,000 for the credit card processing fees
and the utility assistance program.
>> Okay. It's not in the operations line, it's in the--
>> Correct, but if it were approved, then it would be in the operations line.
>> Okay. Wow.
>> Can you remind me how much do we have now going towards the utility assistance?
I know that we increased it.
>> We did.
We increased by, I believe, $25,000 last year.
We are currently budgeted at $175,000 per year to assist.
What we have found is we have had to increase the amount given again this year.
Interfaith would have been running out of funds about the middle of this month at the $175,000 mark.
And we have seen a dramatic change in the reasons that customers are denied.
So, in the past, 20% of our customers roughly were denied
because they never completed their documentation.
They never fulfilled all of the obligations.
At this point, we're now seeing 15%, 20% of the people being denied
because they've already received maximum assistance.
So, there has been a significant change in the needs within that fund.
>> So, if it's over 25 this month, where are you going to be in September?
>> We've already made-- we've already made sure to increase our funding for this year based
on the contractual add that was made in December of last year.
So, we can make it through the summer.
We may run out of funding toward the very end of September.
>> Are we going to make it through the summer?
>> We're hoping that we can make it through the summer.
Of course, it will all depend on what, you know, is brought forward.
But they should have funding to make it through the majority of the summer.
>> Thank you.
>> Just a couple more points on the pro forma.
The personnel services for FY 24 does include the comp and class implementation plus 3%.
Same thing for the out years-- I'm sorry.
FY 24 includes comp and class with-- so, we have the 3% built in and then the difference
of what was needed on top of that 3% and then a 3% inflation in the out years.
O&M has a 2% inflation in the out years.
And those are really the largest changes to the expenses.
And then that brings us to our supplemental request.
As Krista touched on, it is-- oops, I'm sorry.
In large part, 6 FTEs and then the top request is the merit increase.
So, we're not only implementing comp and class in the current fiscal year,
we're also proposing a merit increase in the upcoming fiscal year.
And all of these will be funded in the operating budget and then allocated back out to departments.
And then Krista's going to go over the supporting documentation for each supplemental request.
>> All right.
Thank you for letting me speak again.
So, the first thing I wanted to do is just summarize how call consolidation is going
to change our services as that is coming up this year.
So, currently, we support the main number for City Hall, solid waste, utility billing, and dino dirt.
So, as we move into consolidation and we phase through by this time next summer,
we will also support community improvement services, parks maintenance, public works,
water distribution, water meter shop, waste water,
and absorb the after hours emergency support that's currently at DME.
And when we're looking at water meter shop, waste water, we currently support their utility billing functions
and the things that are related to that.
This will now be supporting those infrastructure type calls.
So, if there's a water main break, a sewer backup, those types of things.
General services that we provide today are the things that you would expect with a utility,
starting and stopping services, referrals for assistance, referrals to non-city services.
Things that we will be adding are emergency service orders and dispatches for our infrastructure divisions.
We will be doing regular infrastructure work orders for streets and sidewalks,
traffic control, water infrastructure, water metering, and waste water infrastructure.
Additionally, we'll be taking code violations as well as some of those parks maintenance types of issues.
You know that we did add some staff in preparation for 311.
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,
as all the contact center agents will be generalists.
So, if they pick up the phone and it's a waste water call for infrastructure,
or they pick up the phone and it's a call about the bill, that one representative can handle both issues.
What we have found is with the call volumes that we have experienced over the last few years that you saw in my summary,
that staff has been absorbed into what was necessary just for us to try to maintain normal operation.
Our supplemental requests include some frontline staff because our business need has outpaced our increases in that area,
and we need to prepare for the increased consolidated call volumes.
We also have some requests for support staff because at this point, the pre-planned workload for our team leads and supervisors,
meaning just the things that must happen that they know have to happen before they walk in the door,
range from 9 to 11 hours of commitment daily, and they don't have that.
So, it doesn't allow any opportunity for unplanned activities.
And if you have ever been in a contact center at all familiar with, unplanned activity is a huge portion of what we do.
So, that's part of the reason we have requests. We've also requested two trainers.
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.
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.
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.
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,
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.
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.
So, what you're going to see is our four-year change for our total calls handled is a 33.23 percent change.
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.
The light area is the number of calls that ultimately had to give up. They couldn't get through. They hung up.
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.
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.
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.
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.
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.
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.
And that is a 462 percent increase over the last four years.
Don't you have the opportunity for them to leave their number and you can call them back?
We do. We do.
But it still leaves us with the waits because they're still technically part of those wait times.
And how long did they have to wait to be able to get us to take care of them?
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.
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.
Right. But it's very important to note that if we have an average wait of 35 minutes during that peak,
that means that the peak wait time may be in excess of an hour or an hour and 10 minutes
because 35 minute average assumes that some of them are getting in more quickly than others.
And it's just something that I have to give folks lunches, I have to give them breaks.
And they just happen to coincide with the same types of times that people also are taking lunches and breaks.
So that's what's happened with those.
And this is looking at our percentage of callers who have to wait longer than one minute.
Our goal is to answer callers in a minute or less of hold, at least 75 percent of them.
And what you'll see is pre-pandemic, we were going into that very easily, handling that.
What you'll see now is 60 percent of our customers are waiting for longer than a minute.
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.
And this is concerning for us as we move into the consolidated call center,
because we don't want people with some form of an emergency to have to wait for an extended period of time.
And then that will be all of mine. Give it back to you.
So for next steps, we'll be back with you all next or the next meeting for any changes between today's budget.
And in that meeting, we'll be back with you on the 18th for a rates work session.
Customer service doesn't have rates, so well, not rates that will be discussed here.
And then we'll have budget approvals on July 24th.
And then that doesn't make sense. Oh, that's for city council. I'm sorry.
Like, wait, we don't have to do that. So then we'll start our council meetings in July.
Do you have any further questions for customer service?
Thank you. Thank you.
OK, so next, we'll move into environmental services and sustainability.
Good morning, board members, Michael Gagne, director of environmental services and sustainability.
Starting off our metrics, a lot of these are changing per year.
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.
That's one of our key goals is to reach at least 10 percent of our customers every year.
That's the top one on there. Our energy rebates are trailing a little bit this year that's somewhat driven off demand.
And the amount of the rebate is a little lower right now compared to what the costs are.
So I think we're having less traction. We're looking at those rebate structures to improve that for next year.
Then you move into a lot of our stormwater related efforts, as well as our industrial pretreatment program.
That's IPP. Those are things we're doing on behalf of both drainage, the entire city, as well as water utilities.
And you move down into gas well inspections. That's a variable number.
But our goal is to touch every gas well site twice per fiscal year.
So we try to get out there every twice. That includes our E.T.J. as well.
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.
So we do a lot of samples per year to meet our compliance requirements.
They're sure it's a little bit slightly higher because we've actually had to do some replicates and different things.
That number is slightly higher. The base minimum is our goal.
And the last part of that is our environmentally sensitive areas metrics or ESA, as it's known here.
Then we move into our simply sustainable framework.
One of our goals as a city is to reduce our electric consumption.
This slide does not show that it actually shows it went up.
That's directly related to the last year we had one of the highest demands on potable water we've seen in years.
And 70 to 75 percent of the electric consumption for city facilities is driven by our water and wastewater plants.
So that number is directly related to that.
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.
That metrics a soft metric. It's a five percent goal to reduce annually.
So in other words, five percent below what we did in 2019.
It's not weather normalized. It doesn't account for growth.
It's just a base thing that was set by state law. That's one of our goals.
The right side shows our natural gas consumption, which is just key to note as well there.
Our trend is basically going down with the one anomaly during covid year of 2020.
Our department structure, we're basically 39 strong.
We cover sustainability efforts, which touch on a lot of different things.
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.
So if you look at that as a breakdown, the admin is new. We've shifted around over the years.
We haven't been we were part of DWU's admin. We shifted over to sustainability.
We're trying to get that on the books correctly.
So it actually shows four because there's a proposal, a supplemental to add a position.
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.
Water lab is water and wastewater labs shown as two different lines this year.
We're proposing to combine them into one. What will be the municipal lab has the bottom line on there.
So there's no increase in the number of staff. We're just combining that into one HBU or home business unit.
Gaswell State Flat landfill compliance shows up somewhat new. You may recall last year, we've always had landfill compliance with our reporting structure.
This year, we're specifically calling them out as an HBU to track all their costs and have that housed within environmental services sustainability.
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.
We didn't really gain them. They've always been part of us. They just weren't funded with us.
And then you'll see on watershed protection, that portion will stay directly on the drainage fund.
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.
We have a FATS oil and greases program where we inspect grease traps, different things, all these pretreatment devices across the city.
We have to inspect those on a regular basis as well as every time a new certificate of occupancy is issued.
So we've been making do with one and a half full time staff and subsidizing with the supervisor.
That area has gone from basically 300 to 600 actively inspected grease traps over the last 10 years.
So it's time to take the half time position and make it be a full time position.
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,
whether that be has waste, asbestos, due diligence, all the general aspects which aren't part of their day to day business.
Not how do you actually provide fresh water or potable water? How do you provide electricity?
But once you're doing that, what do you do with the bulbs you've created out of your building?
What do you do with that leftover waste? How do you do that correctly? So we're asking for a position to do that.
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.
We haven't had that. It's kind of been done on all different pieces.
It's time to step up. That aligns well with what DWU is doing on their long range planning.
It's time to have it. We'll work hand in hand with them. We're missing that opportunity.
So that's what we're asking for. Our strategic initiatives, I'm aligning here.
These are all things that we're working on that were council priorities.
So create a wildlife corridor map as part of the comp 2040 plan.
It's an ongoing process. We're working with different community members, different things to make that happen.
I should hopefully have a draft map back in front of council towards the end of the summer, probably August, September.
We're heavily involved with our climate action and adaptation plan. It's on track. However, it's a little delayed.
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.
We've had a couple of delays on getting responses, getting things prepared and ensuring and outlining all of our targets and actions
that make sense for the city of Denton specifically, not to be generic and be like everybody else.
The last one on there is to expand our electric fleet and infrastructure.
So we're looking at EV charging, EV usage across all of Denton.
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?
Where does that need to be? How do we get that equably across Denton? We're also looking at EV charging for the fleet.
How do we actually increase the number of EV vehicles we have and make use of those appropriately and right size our fleet?
So with that, I'll turn it over to Danielle unless you have any questions for me right now.
OK, thank you.
Right. Moving into financials for environmental services and sustainability.
This is a new fund, so we don't have the out years quite yet.
But the revenue there, you can see they have cost allocations, transfers in from DME water,
wastewater, drainage and solid waste, and then a small number of transfers in for twenty twenty four.
They also have the revenue from the water lab, pretreatment revenue and gas well inspection revenue for personal effort.
Sorry for expenses. We have the increase in personal services.
That's the three percent from the twenty three budget plus the cost of comp and class.
And then we have an average of two percent increase in operations.
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,
which we'll get into on the next slides.
Oh, sorry. Sorry. I was just curious. I'm noticing that some of the fees increase just, I guess, as the number of.
Customers or whatever like that need to be inspected, go up, but the water lab has a flat rate from twenty twenty three.
I was wondering if there are they're doing the same number of inspections and then follow up question after that.
Michael Gagne, again, director for vital services, sustainability.
The water lab line is actually for the analysis we perform for outside customers.
So the number of samples coming in is staying the same and our internal costs at this point are projected to be the same.
That's why that line stays flat.
And is that I notice that it says coliform specifically, is that the only outside analysis we perform primarily?
Yes, there's a few others we do. Those are getting directly charged back.
If we do it, this is one one line that gets called out separately every year to make sure we're clear for that.
It includes both private and other city customers.
So we have various city municipalities that come to us for that analysis.
We have to do it for private water wells.
And I see that as a you know, there are a lot of small and growing communities in the area.
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.
I know it's you probably are cost competitive with commercial labs because they have a lot of different overhead.
So I just see that as perhaps an opportunity to grow a little.
You're not going to fund the department on it necessarily.
But to provide a service to Sanger Crum, the the groundwater district, that sort of thing.
Thank you. I think he's still on.
If it's if it's on this. I'm sorry.
Do you have a question? Yeah, I do. Just go ahead.
General fund clarification and revenues.
Oh, that is for her. OK. Well, I'll start with her.
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.
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.
OK, and you don't you don't have a franchise fee. Is that correct?
We do not have a franchise fee for environmental services and sustainability.
OK. And the operations line, it's going up from the twenty twenty three estimate to preliminary by about two hundred thousand.
So great question. There's a lot of departments.
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.
So we have some expenses that move with those as well.
OK. All right. That makes sense. Thank you.
Sure. Any other questions before we move on?
So Michael has no baseline adjustment requests.
We do have some supplemental requests. The top one is that two percent merit increase.
We have the former police department gun range environmental assessment.
We are we the budget team is proposing that that be funded in the current year versus in twenty four.
The same for this as best as assessment for city facilities.
We're also proposing that that be funded in the current year.
And then the next three lines are those positions that Michael touched on a little bit earlier.
And then finally, a compliance tracking software for fourteen thousand four hundred dollars.
So the total one time cost is two hundred and fourteen thousand four hundred of that.
We're proposing two hundred thousand be funded in the current fiscal year.
The recurring costs are all personnel related with the addition of the two and a half percent.
And then the merit increase and then the total requests three hundred and forty one thousand three hundred ninety six.
Two and a half of two and a half new FTE Barbara has a question.
Sure. Did you entertain like the asbestos assessment of contract having contract on that?
Because I'm wondering how many do you have enough to keep it busy?
And in times past, we have just contracted things like that rather than provide a full employment package for someone.
Yes, ma'am. Michael Gagne again.
And as you may notice, it's a one time cost.
There are no full time positions associated with that.
We do have a third party consultant that will perform that work for us.
I am also personally licensed to do it if I need to on behalf of the city.
But that is a third party contract.
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
to ensure that we can do normal routine maintenance and other things on that.
It's a good planning practice to make sure we have that.
Thank you. And the same next steps as customer service with that.
We'll take any additional questions. Any other questions? No.
OK. Thank you. So all right.
Let me read. OK.
The Public Utilities Board will now at nine fifty three a.m.
convene in a closed meeting to deliberate the closed meeting item set forth on the agenda,
which include the following a I.D.P.B. twenty three one hundred and eleven deliberations
regarding certain public power utilities, competitive matters under Texas Government Code Section five five one point zero eight six.
Consultation with attorneys under Texas Government Code Section five five one point zero seven one.
OK. The Public Utilities Board has now at ten thirty seven a.m.
reconvened from the closed session and no official action was taken.
Now we'll go into the electric utility budget.
So we'll start off with some metrics, probably the most important one.
Is how do we compare to other utilities?
And as you can see, we are very close to lowest cost electric utility amongst all the
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
that you'll see later. No rate increase in fiscal year twenty four.
We'll remain one of the lowest cost providers in Texas.
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
providers. In this case, those are reps, retail energy providers in the in the competitive area.
And as you can see, we're we're the lowest cost of any one hundred percent renewable option in Texas.
The other metric that we we track is our reliability metrics.
How how reliable are we? And there's two metrics that we really focus on, and that's system average interruption frequency or safety.
And as you can see, we've been consistently since 2009 below the average for the industry.
And the same can be said for the system average interruption duration index.
So we're very proud of those. We again this year were awarded by a award for reliability.
Our structure, we have basically six divisions.
We are adding we have added a few interesting positions or critical positions this year.
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.
and ERCOT. As you know, we're a very highly regulated industry.
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.
in the community and the programs that we offer for the benefit of our customers.
Total headcount is one hundred and eighty five employees.
Here's our FTE summary and be glad to answer any questions you might have on that.
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.
And I'll point out that we're still below our employment levels that we had in 2020 before the pandemic.
And the two positions where we're requesting one is an electric system operations outage coordinator.
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.
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.
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.
And then the other one is relay technician. We have keep adding substations.
We as you'll see in the capital budget, we're adding a number of automated metering applications.
And these require a lot of relay adjustments and relay settings and programming.
Our three strategic initiatives that will bring to your attention this year, one is to update the Denton Renewable Resource Plan.
The plan, which was adopted in 2007, 2017, is now getting a little dated.
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.
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.
There are upcoming requirements for making sure that with this high level of renewables that we have in the state,
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,
we don't have as much solar production that we have adequate resources to generate electricity to meet the needs of Texans.
So those are coming, and the plan will include options in the event that those dispatchable requirements become more burdensome.
And of course, we're always looking at costs.
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.
The second initiative is a new campus for the Denton Municipal Electric.
We've been growing. Our number of meter counts continues to go up.
Technology continues to move forward.
Our customers' expectations with regard to our integration of that technology and in providing service to them continues to move forward.
And we're at a point now where we've outgrown our existing structure, and we're looking.
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,
which is a two year process in the subsequent two years.
Of course, that's subject to your approval and to City Council's approval.
And initiative three, we call utility of the future.
We will be adding significantly more automated distribution management system equipment.
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,
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.
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.
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.
We will be looking and in next fiscal year at the development of demand resource programs.
Demand resource programs will be programs where we'll incentivize customers to reduce their energy demand during peak periods.
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,
and the cheapest resource is one is from is associated with a megawatt or a kilowatt hour that you never use.
And so we will be developing these programs over the next year or so.
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.
We are reengineering the way we do work at DME so that we can do more with less.
And that's important when we have a level of growth that we are seeing in our community now.
And with that, I'm going to turn it over to Danielle.
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.
Is there a long term plan to convert the entire system of twenty five KV or will we have two separate zones?
There's a billion reasons.
So it's a great question and we are evaluating that.
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.
The analysis itself is several million dollars because it's a very complex system.
So the answer to your question is not immediately, maybe in the future, but that we many years down the road.
And that would because it would require every feeder gets every building, gets a new transformer, every substation feeder, gets a new transfer.
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.
Thank you, which now with how long it takes you to actually if you can get the transformers, that's right.
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.
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.
But again, we just made, you know, half a billion dollars worth of investments in our system, right?
We need to let those depreciate a little bit more before we start converting things.
But I think I think certainly in the future, probably well beyond our lifetimes probably makes some sense to do.
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.
But probably not everything will be converted.
Yeah, it's expensive proposition.
It's a very expensive proposition.
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.
So you have to you can't convert the system all at one time.
It would take many, many years to transition over in order to maintain that reliability that we're known for.
And we want to continue to have.
Yeah, the other just really quick, the other the other nugget that I'll kind of put out there.
You know, so so our our linemen, our operations folks have, you know, it's called fr rated uniforms.
Right. And those are rated to our current system.
Our our sister utility right next door to us co-serve doesn't have the same voltage.
So from from a mutual aid standpoint, they can come in and help us, but we can't help them.
Right. So it kind of makes it difficult to have that type of relationship with only it's only a one way relationship.
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.
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.
But then they can also then reciprocate back to us as well.
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.
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.
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.
How can we how can we shore up the resources that we have to better support our customers?
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.
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,
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.
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.
Danielle.
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.
The revenue projections include no rate increase in twenty four, but we do propose a rate increase beginning in twenty five.
And then additionally, a proposed three percent rate increase from twenty five to twenty eight.
And then the expense projections include the increase in personnel costs due to the compensation classification study and the craft pay adjustments,
future merit increases and annual inflation, and then an average two percent increase in operations and maintenance costs.
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.
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.
Additionally, the purchase power expenses are also expected to decrease in line with the revenue decrease.
You can see that increase in personnel costs.
Again, that's the comp and class and the three percent O and M is an increase of two percent.
The debt service increases appropriately with our capital improvement plan, which we'll see shortly.
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.
This pro forma does contemplate a three percent increase for beginning in twenty five to twenty eight.
That allows us to be within our target reserves and we are debt service coverage ratio beginning in twenty six.
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.
Proposed rate changes, the cost of service study is ongoing.
So we plan to bring back their proposed rate changes as a result of that study in the coming months.
The capital plan is this is the high level summary.
You can see the building that Terry referred to in the strategic initiatives is the second line.
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.
So here's a summary by funding type. Again, the same totals just broken down by how we plan to fund those different projects.
Change requests, DME has a handful of baseline adjustments.
Again, as you saw with the other presentations we've included in that right hand column, how we suggest funding those.
All of these are suggested to be added to the operating budget.
The first one there is an insurance increase to premiums of six hundred and seventy five thousand dollars apprenticeship training.
DME has seen an increase in the number of apprentices that they have within the utility.
So to go along with that, we need to train those apprentices.
Additionally, they're also growing their program for their existing journeymen.
So one hundred and fifty thousand for that personal protective equipment, an increase of eighty five thousand.
The compliance consultant one hundred and fifty thousand.
The transformer test equipment is a one time cost of three hundred and thirty thousand.
And then finally, on this slide, the consultant fees for the emergency services retainer of two hundred thousand dollars.
More baseline adjustment increases, application maintenance and support contracts increase of one hundred thousand dollars.
The additional testing and repair to maintain deck maintain the deck three hundred and twenty five thousand dollars.
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.
We saw this is an increase for the substation tax of three hundred three thousand dollars.
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.
The supplemental packages, the merit increase is at the top.
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.
Grant for storage of electrical equipment, two hundred and ten thousand dollars.
And finally, the construction standards for the voltage conversion, a one time cost of four hundred and fifty thousand dollars.
We're suggesting that all of these be funded from the operating budget.
In the operating budget, these all of these requests on this slide are funded from the existing vehicle replacement plan.
So this is no additional funding. This is this is being funded from existing funds.
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.
So if these aren't additional, they're replacements of something we currently have or these are additional that comes out of the fleet.
These are additions.
The funding source is from existing funding, though.
All right. Great.
And then those same next steps that we've seen in the other presentations.
I'll take any additional questions. Thank you.
See none. Thank you. All right.
It is ten fifty eight and that is the agenda.
So, Billy, would you like to move to adjourn to adjourn, please?
We are adjourned.