Apr 22, 2019 Public Utilities Board on 2019-04-22 6:00 PM

Good evening everybody. It's 6 o'clock. We barely made a quorum this evening, but let's go ahead and call the Monday April 22nd 2019 Public Utility Board meeting to order. The first items on our agenda are work session items, and the first item is item A, receive a report and hold a discussion regarding the 2018 water loss audit report. Evening. Good evening. My name is Tyler Dawson. I'm the field service tech manager, and I'm here to present you with the results of our 2018 water loss audit from the water department. At a 30,000 foot view, a water loss audit is about finding where all of your water went and why it went there. At a high level, this is your equation. You have authorized consumption, you have apparent losses and real losses, which I'll get into those definitions here shortly, and that should equal the total water supplied. There's a lot more to it, but once we get into it, we want to focus in on these two categories. What was the water loss? How much was that? Is that okay? Is it normal or abnormal? And what are we gonna do about it? To get more into the weeds of this, here's a more detailed view of what that audit consists of. So to walk you through this busy graphic here, we're starting from the left side. We have water produced from our two water treatment plants, and we split that off into different applications of that water as we go from left to right. So we export a little bit of water to Crum and Singer, some of our treated water, and the rest is water supplied to Denton. The vast majority of the rest is authorized consumption, which is then billed to our customers, either on the residential or commercial side. And then we have a few more categories in the bottom right over here. We have some unbilled authorized usage, and we also have two types of water loss, apparent loss and real loss. Now when you talk about real loss, this is probably what comes into most of your minds when you first hear the term water loss. This is leakage. For example, you take a pipe, put one gallon in this end, you expect one gallon to come into the other. Real loss is when you have some leakage in between. You have a joint that doesn't quite fit right, you have an older pipe that might crack. Whatever happens, that water actually leaves the system before it gets to its intended purpose. Now real loss is an indicator of system health, how our pipes are doing, how we're maintaining our distribution system. There are lots of causes for these. We have aging pipes in the city that just don't hold up forever, that we want to replace those as they come up. We have connections that don't quite hold up as well, and the environments of the pipes, of course, have different effects along the way. You can see a number here at the bottom that's the total water loss for fiscal year '18, 505 million gallons. Now that's a pretty big number. I wanted to help put that in context for us. So out of a gallon of water, here's your real loss. It's about seven percent of our total. In drinking water terms, say you're talking a gallon of drinking water, it's about nine ounces. We also have apparent loss, which is a little bit trickier to understand, but taking our visualization here, you take a gallon of water, put it in one end of a pipe, and you have a meter connection at the other end. Now all the water goes through, but your meter doesn't quite register one gallon. For some reason, it looks like you have less water at the end, even though all the water may have gone through. So the biggest contributor to this is meter inaccuracy. Our meters, when we put them in the ground, are as accurate as we can make them, and of course they start to degrade just a little bit over time. Scaling within the meter can slow down the mechanism, lose just a few percent accuracy. This also includes things like unauthorized consumption. If we have someone creative enough to bypass our metering system and use our water, it went to a customer or an individual at least, but we weren't able to measure that water. We weren't able to capture who it went to assign that to an individual or an entity. And this is an indicator of fiscal health, because our billing system is based on who uses how much water. Each customer gets a certain amount of water through their meter and they receive a bill based on that. If this number is not accurate, then it's hard to assign that out. It's hard to recover accurate revenues, so we want to keep a close eye on this as well. And you can see a volume at the bottom of this slide. Our apparent loss in 2018 was 222 million gallons. So again, let's look at our drinking water example. That's about four ounces out of a gallon. So you can see everything left in this jug is what we consider authorized consumption. This is the rest of the water. As big as those numbers seem, we also have about six billion gallons in authorized consumption per year. And included in this, we do have some unbilled authorized usage. Again, this is not in the water loss part of the audit, but it is another kind of complicated category sometimes to understand. Primarily, this is fire protection and system operations. Fire protection is not a build service. It's offered for free to any customer who develops a fire protection system. This includes water that goes through a fire engine. This includes water that might come out of a sprinkler system in a building, and also training operations for the fire department. System operations is basically everything we do, all the water we use to keep the distribution system running and keep the water clean. When we put new pipes in the ground, we flush water out to scour anything out of those pipes that we don't want to be there. We also will flush water out for water quality issues. As water ages, it loses some of its disinfectant, so we want to flush out that old water and make sure the water is clean and healthy to drink. So when you put all these together, you can see we filled in some numbers on this chart. You can see our 505 million gallons of real-loss, 222 of apparent, and whopping 6 billion 147 million of total authorized consumption in the city. And we also want to look at this from a financial perspective as well as a volume perspective. The real-loss, well you can see that's our bigger amount here in the red, is actually the lower cost because it doesn't cost all that much for us to produce an extra gallon of water over and above what our customers need. The total cost we estimate to treat a thousand gallons of water is only 37 cents, so we cost out that real-loss at a little bit under $200,000. The reason this is important is because this is how much we could save if we could fix all of our leaks. So it's roughly the amount we could apply to a comprehensive leak management or leak detection and repair program. There's only so much we can do with that. Honestly this is probably comparable to the cost of one repair crew in the water department, and that doesn't include finding the leaks and it won't fix all of your leaks. So we do have some efforts we put forth to find and repair leaks, but we're a little bit cautious on how far we take that, make sure we're approaching that in a financially responsible way. The apparent loss, the small yellow glass here, is much more expensive at about a million dollars. The reason for that is that's priced at the retail cost of water. If a customer uses a thousand dollars or a thousand gallons and we weren't able to recover the cost of the water they used from revenue, we price that out at about $4.69 per thousand gallons on average for last year. This is a large number and also justifies the meter replacement program we have out of our water meter shop. We have done analysis that suggests that about 13 years old is about the place when a meter needs to be replaced when we can save the right amount of money by replacing that and offset the cost of doing so. We wanted to benchmark some of this data against some nearby cities in Regency. We'll show you our loss, both real and apparent loss, as well as something called the infrastructure leakage index which I'll define here in a moment. Some considerations when looking at benchmarking. We're never quite looking at apples-to-apples. Every system is a little bit different. Some have grown faster, some have older infrastructure, some the topology of the system effects breaks in a different way and not all audits are performed equally. We're pretty proud and dentin of the way we do our water audits. The state has caught up to doing a more advanced water audit, water loss audit program that we feel like we've been at for several years and we put a lot of effort behind making sure our numbers are as accurate as we can make them. So within a Regency we're looking at real and apparent loss per connection. So that'll kind of normalize it between different utilities and you can see dentin's numbers right here. We're right around the 60th percentile, so right around the mid-range of utilities within Regency on a per connection basis. On a per capita basis you can already see the difference in the cities by how much this chart changed just from per connection and per capita. We shift just the other side of the midpoint so we estimate we're right about at the median for our water loss. And finally on the ILI, infrastructure leakage index, this looks at total real loss compared to a theoretical minimum real loss. So there's a leakage calculation based on the size of your system that can help you determine what's the minimum that your system is expected to lose just through leaky pipe joints and connections throughout the city that are buried underground and it compares your actual real loss to that theoretical minimum. So our number was 1.83. Theoretically you can't go below 1, you can't lose less than your minimum and there's no cap on this number. So within Regency our ILI is significantly lower than most utilities. We're pretty proud that we're below a 2. That's consistent if maybe a little bit higher than some past years but we're proud that we're on the on the left side of this chart. And some of the results of this audit, some of the steps we're implementing as a result of these numbers we found. First of all we want to continue our meter replacement program at the schedule we're doing it. We found nothing wrong with the program as it is and we think it's doing well to offset our apparent losses. We also want to continue leak detection as we've done it. Again we can't justify a bigger investment at this time but we do have leak detection equipment that we're currently in the process of renewing to some updated technology and we're going to continue using that and trying to find leaks that nobody's seen yet. We've also made some improvements to the audit itself. Our main break water loss estimates as you can imagine if there's a main break that water is not coming through a meter and it's not coming through a regular sized hole in the pipe. So it's difficult to estimate how much water is coming out of that but our water utilities coordinators put together a great program to help us jump-start that and improve those estimates so we can get a better feel of how much water is leaving our system. Similarly we're improving our water estimates for operational applications. Again these don't always come through meters. Some trucks are outfitted with meters on the back of them some are not. When we flush pipes for new construction we don't always have meters available for that so we're improving this process to to better understand how we're using water operationally. And finally we're improving our source metering at the production plants. This involved this is mentioned during the conservation plan presentation a couple weeks ago but we have at each of our two plants we have a raw water meter that pulls water from the lake and measures it and a finished water meter that pushes water out to the system that finished drinking water and we've had some concerns with the accuracy so we have actually replaced two of those last year have two more to be replaced next year and we're also looking at some steps to help keep those systems in calibration so that we can keep an accurate idea of this. The reason that's important is those meters the way they're built actually overestimate water so as they come out of calibration we could actually be overestimating how much water we're sending to the city and assuming water losses that were never actually there to begin with so we want to make sure that's accurate. And that's all I have for you today I'm happy to take any questions or comments. Can you expand a little bit on what the replacement program is I mean do we know how many need to be replaced right now how many are replaced every year things like that? I don't know those numbers currently but it's a 13-year cycle our customer service program helps manage that list they store the meter ages with the accounts so they provide reports on a rolling basis any any meters that hit that age are sent to the water meter shop and they go out and replace them as the time comes. Okay so you said you didn't know how many come of age on a on a yearly basis or anything like that? Yeah Tim may have a better answer. I know he does. 13-year rollover. He knows everything. We actually have a projection going over the next five years when meters will be replaced and we're currently keeping up with them so we have no meters over 13 years old. Okay so we're currently staffed to keep up with that at the present time. Real quick will you state your name? Oh I'm sorry my name is Tim Fisher and I'm the director of the water utilities. Thank you. Thank you. How many residential meters do we have in the system? Approximately 32 see a 30,000 or 32,000 Daniel. David why don't you stand up and tell us through the microphone? This may not actually have the breakdown. 35,000 total. So sort of divide that by 13 and that might give us a rough number of how many? A rough number yes. If I can just ask a couple more do the do the resident plan do the payers know when it's being replaced or are they notified or does it just happen or they're typically only notified if they're on site at the time. We'll make sure we're not shutting off water to prevent anything that's happening inside the home but it happens very quickly. If you're not home you probably wouldn't know. So you probably wouldn't know. Okay just wondering because I was thinking well I don't remember the last time that mine was but I wouldn't know. Okay all right. I have one question. For the purpose of the audit when you're determining real loss attributed to faulty poorly calibrated water meters how is it that you come about a volume or figure being that the meter is faulty or not working properly. Yeah that's a good question. We've done bench testing studies where we pull meters from the field and we know the actual age of those meters and we will test the accuracy. Again taking our example if you pour in a gallon here and see what comes out the other side. We can see that in a very similar way if you know that that bottle is one gallon then you can fill it up and see how much the meter reads. Okay. So we've done bench testing to see what those degradation curves look like. Okay. And on the larger meters anything over I think two inches and above we do testing annually we actually pull those meters test them on that specific meter and we can rebuild if we're able to rebuild and regain some of that accuracy or we can completely replace that meter. Okay so some of them are estimates based on theoretical approaches to the loss rather than somebody actually really tried to measure how much water came out of the pipe or something like that. Yeah majority of this is extrapolated from the bench testing study. Okay thank you. Does anybody have any other questions? Okay thank you. Thank you. Our next item in our work session is item B receiver report hold a discussion and give staff recommendations regarding the solid waste fiscal year 2019-2020 operating and capital budget. Good evening Chair, members of the board. My name is Ethan Cox. I'm the director of solid waste. For my props I'm gonna empty a bag of garbage on the table. Just kidding. I was actually hoping you'd leave it for some refreshments but. I wanted to drink the red one. I was okay with the red not the yellow one. All right so I appreciate the time this evening. We do have kind of a two-headed presentation for you this afternoon. I'll be leading us off walking you through the operational side of the solid waste budget and then Mr. Nick Vincent from the finance department will come up and dive into the numbers for everyone. We do have our managers here from solid waste. I'd like to take a brief moment to introduce them. I have Mr. Eugene McKinney. He's our operations manager in charge of the collections fleet. His staff are the friendly faces you see on the road every day doing the recycling refuse collection. Ms. Tina Eck is our senior business analyst so she's a wizard with numbers and spreadsheets. We've got Aaron Clark our administration manager and then we also have Brian Berner our deputy director over the landfill and side operations and so in addition to Nick Lee these folks have done quite a bit of work putting the presentation or the budget together. It's always kind of a drawn-out you know kind of a thought-provoking process but I appreciate all the efforts they and their staff have put into this. So when we talked about the solid waste budget last year one of the things that I'd mentioned is we're basically preparing to do a number of diagnostic checks for the solid waste department and by that I meant we were bringing in a number of consultants to look at our operations. We had audits ongoing from Weaver and Tidwell and we were also undertaking a rate study that's fairly comprehensive in nature and so all those have wrapped up in the past year and so for this first slide what we'll do is we'll go through a few accomplishments as well as goals. I bring those things up simply because it informs a lot of what we've been tackling recently as well as what our goals are moving forward. In terms of accomplishments we did do a fairly massive management reorganization of solid waste last summer essentially turned over about 70 percent of our management staff. For the folks that remain really what we were focusing on is bringing in leaders that are focused on employee engagement as well as workplace safety and one of the biggest accomplishments we've had we do an annual employee survey and we had tremendous gains year over year. Our new management teams been in place for the better part about six or eight months. We're getting really good responsiveness out of our employees the survey was outstanding so I really want to give a tip of the hat to our operations managers their staff as well as our line staff because I think we've made a great deal of progress on that front in a very short period of time. In addition whenever the PUB and the council received the Blue Ridge report that operational review last year one of the things they pointed to is lack of a safety culture in our department and they identified that that was one of the reasons why we're having a high incidence of accidents and workplace injuries. There is an award called the Jimmy Huff Award through Texwana which is the Texas branch of the Solid Waste Association in North America. I want to point out that our department was recently recognized for the best year-over-year improvement of workplace safety. That doesn't come without a lot of hard work by our staff. We hired a safety and training coordinator named Jason Palofsky. Brian spent a great deal of time putting in some curriculum with Jason's assistance and it's starting to pay off and so again just a tip of hat to staff as well as our line workers that make safety a priority every day. We also have a number of initiatives where we're trying to right-size our fleet and improve operations that's efficiency, effectiveness, making sure that we're making good decisions. One of the things we're doing in terms of right-sizing our fleet is changing out a number of pieces of equipment in the landfill to basically be the right size for our operations. One such change that we made is replacing our compactors which is basically a big piece of heavy equipment that compacts the waste. Just as an illustration of what right-sizing can do that's given us about eight additional years of landfill life through that one change in our operation and so I don't think we're I think we'll be hard-pressed to have another impact that large. That's really one of the things you'll see as a thread as we go through this presentation. In terms of goals for 19-20 I'm not gonna hit all these but one of the things I do want to point out is we did have an audit by Weaver that basically came in and looked at our scale house operation. For those of you that don't visit the landfill the scale house is basically the entrance and the exit to the facility. The way I allude to it is like the nerve center for any landfill operation. Everything gets weighed coming into our facility it gets weighed going out and that's where all the financial transactions take place. And so I neglected to put it in your packet but I will circle up with Mario to make sure you have a copy of the audit for the next PUB meeting. But essentially what their findings were is there weren't really good separation duties there weren't good internal controls. We've corrected all that that we can but one of the things they identified is your system has some big loopholes that can't be closed and so the system that we use for all of our financial transactions is what I'm alluding to. And so one of the things you'll see when we get to our supplemental packages is we do think that system needs to either be upgraded or replaced. It is an investment that we really feel like it's a top priority for us moving forward. We've talked a little bit with the board and the council about the state of the recycling market that's going to be an ongoing conversation with you all as we move through the next few months. The market is still somewhat in turmoil and so as we mentioned in that presentation making sure citizens are informed, educated, and doing their best to recycle right and reduce contamination. That's going to be an ongoing goal for us. Next going to talk about the rates in a moment. The last thing I want to highlight here is we do have continued efforts to improve our fleet performance and uptime. Back to Blue Ridge's report last summer they were looking at our fleet. We're carrying an abundance of backup fleet to try to keep a functioning fleet on the road. One of the things that you don't want to play too much with is your collection fleet. Otherwise trash is sitting on the curb. Folks aren't getting their stuff collected. It becomes a human health issue and so we've been carrying a large number of backup pieces of equipment for a number of years. With the assistance of the fleet department we are basically trying to change out our equipment as fast as we can and catch up from some of the negligence that we've had in years past and so that's again going to be a top priority as we work through the budget and the capital improvement plan. In terms of budget emphasis one of the things that I always like to talk about is your budget should really be an offshoot of your purpose and your strategy should be closely linked to your budget as well. For us if you ever come out to our administrative building take a tour you're liable to see that illustration there on the right. That's what we call our big picture which is really a statement of purpose for our department. It also provides a little bit of a cue to the employees that look at it as if I'm making a decision and it doesn't jive with everything under the big picture then it's red alert we may need to reevaluate our decision making. This kind of leaves out our culture our approach what we expect of our staff and our leaders. From a strategy perspective we try to basically make this really simple is our goal is to provide exceptional value to our community. When you pull solid waste down to its nuts and bolts we're here to collect waste and recycling we're here to divert and recycle as much as we can and we dispose of the rest and safe and environmentally friendly manner and so doing that providing exceptional value we're basically the only choice in town for service and so we have to be a little bit of everything to all people and so how we do that is we balance our goals and our approach. Financial performance is important but so is operational excellent being safe effective and efficient. Customer focus is something that we've been spending a lot of time with the board and the council on giving you overviews of our program showing you what we think is working what isn't because the breadth of service is important but also making sure that it's high quality and then from a sustainability perspective we certainly want to focus on the environmental components but we also need to be financially and socially sustainable as well. A few cost drivers for our budget obviously with most of the presentations you're going to see from the other utilities customer growth and increased service demands are always there. Unlike other utilities solid waste is exposed to market forces from a landfill we are in competition with other landfills in the region that's based on a price basis as well as a convenience basis. Construction is probably one of our sectors that is most exposed to a recession and so construction tends to die off if a recession hits so we have to make sure we're paying attention to that and then obviously with the recycling market being in flux the commodity prices are certainly something that will affect our bottom line. We're also a highly regulated environment so we are known to run into unfunded mandates at the state and federal level occasionally and so we do track those bills and try to integrate that stuff into our budget when possible. A few cost containment strategies in terms of the operating budget those are your ongoing year-to-year expenses that don't typically go away. We do zero based budget for some of our stuff like travel training and outside contract services. We essentially want to rinse and refresh and look at that fresh every year. Improvement in resource management is something you're going to hear me talk a little bit more about on these next few slides. When we say resource is really for our operation what you're talking about is staff, you're talking about equipment which can be landfill equipment, it can also be collection vehicles and then you also have your containers and carts and things that you actually as a consumer or as a customer of ours use out in the field. Those are all things that we need to make sure we're managing effectively and efficiently. Equipment of vehicles we do utilize or we analyze vehicle utilization information we get from the fleet department and we try to rat size our fleet. I don't want to misspeak I'll kind of do an eyeball check with Tina over here. I think we've eliminated something on the order of about 40 or 50 vehicles and pieces of equipment the last two years is that about right? And so one of the things that the utilization will do for you is you look at underutilized equipment and you find ways to rat size but also what we've done is tried to implement means in which we can share equipment. I think we've done a good job of that within the department but we're also looking at trying to partner with fleet and share equipment across other department lines too. We've also identified and tried to replace some of those underperforming vehicles like I alluded to earlier. At some point a piece of equipment or a vehicle if that's a lemon it costs more to maintain than it does to jettison and replace and so those are ongoing conversations for us. The last thing that I'll talk about down here we I'm sure all of you are familiar with the business case analysis that we bring through so I'm not gonna spend much time on that. I do want to talk about kind of how we've approached our capital plans and so whenever you look at solid waste you have your disposal operation in your collection operation. Years past the landfill tended to get most of the investment through our capital improvement plan and so what we've really tried to do the last couple years is make a more holistic approach to how we evaluate and so when you see the supplemental packages and our capital plan it's basically focused on needs first and making sure that there's a good mix between those two divisions and then we get to once after we've satisfied all the needs and so hopefully that makes sense. In terms of process improvements I think we've hit some of these I think one of the things that we're really proud of is our relationship with finance I think we have a good working relationship there challenges assumptions on both sides of the table and so there is a healthy amount of checks and balances that go into our budget. We do have some improved processes and internal controls that we've implemented responsive to the audit that we received last year a couple of new things we're implementing that are just on the starting line we've implemented a dispatching operation basically charged with improving the routing of our collection vehicles making sure that that route is as efficient as it can be it's not just about money it's about wear and tear on the road it's also about emissions and making sure that we're not doubling back in a neighborhood when we don't need to be. We've also implemented that formal training and safety program like I talked about. These are going to be ongoing improvements for us ongoing focus in the years ahead. I've talked about resource management for future improvements I'm not going to hit that again but I will say that this is a nice segue in terms of the scale house software and asset management that takes us into our supplemental packages. So we do have about 1.8 million dollars in supplemental packages that we're going to be proposing for this upcoming fiscal year. If council recalls and I'm sure Nick will hit on this when he gets to the podium is we've essentially gone two years without issuing any debt and so we've right-sized all of our capital plans to try to maximize the use of existing funds. So what we're focusing on here is a few priorities. This is the scale house and asset management software that's responding to that audit. Engineering services is something you typically see for landfills what we're actually doing is eliminating several different line items smaller line items in our budget and collapsing it into one blanket engineering agreement. So we'll be putting an RFP out for that. Route consulting services believe it or not for a modern city all of our drivers come in in the morning they get a piece of paper that tells them where to go. There's no onboard GPS the driver basically has either a printed map where they're operating off of what they think is the best route to go collect the trash and recycling. Don't want to speak for Eugene but I know he was out doing a ride along with one of our drivers they came across a commercial can. Okay when do you pick this one up? We picked that one up on Monday. What about that one over there? We picked that one up on Tuesday. Why are we not just picking them both up on Monday? And so I think there's a lot of efficiencies to be gained both with the new technology for a system as well as designing clean and efficient routes that our drivers can have an onboard computer that tells them where to go. Takes a little bit of the guesswork out of it. We have some pieces of equipment here I'll just quickly go through those that roll off is for construction we are seeing growth in that segment so we're trying to keep up with customer demand. A waste handler dozer that is a replacement. The mini rear loaders I have a picture of these because they're kind of cute. So right now what we have when we go out into a community we have a lot of pieces of heavy equipment and we have light duty vehicles for our supervisors and crew leaders. Rather than dispatching a heavy piece of equipment to double back on missed collections we would be replacing light duty vehicles with a mini rear loader for our supervisors and crew leaders. They can be more responsive to customers that get missed or that customer that's running late and has has to have us double back and get them. It's more efficient, more economical, keeps our drivers on task so they're not having to divert from their routes. Quickly. Nick's chomping at the bit over there I can feel him. We do have an additional HEO that's heavy equipment operator they were proposing for the landfill. Last year we eliminated about seven hundred thousand dollars worth of temporary labor through a staffing service and we also reduced 10 FTEs out of landfill as well so we basically took 24 positions out of the landfill. I think we cut a little bit too deep and so what we were recommending is adding one position back. And then on communication radios right now our drivers and folks in landfill are on cell phones. It's not safe. We're having issues with communication so we'd like to get the landfill to switch over to communication radios instead. And then the last one here, last but not least, is the recycling drop-off at North Lakes. This one is on here because we are going to need to relocate that facility. It's currently housed where the new believe it's either a Vela soccer or tennis center is going to be and so we've been working with Parks and Recreation to find a new site. That center takes in about a hundred and sixty hundred seventy tons a year so this is a hefty investment to relocate it. The other thing that I'll say is the relocation. We may be relocating some challenges that we're currently seeing at the site. There's a heavy amount of illegal dumping that's going on there. This is similar to the issue that we brought forward to the PV and council with our drop-off sites at the landfill. We are certainly happy to move that. There's a couple of additional things that we could bring forward to the PV and council as alternatives. One is not to relocate the drop-off center and is to pursue what we call drop-off or pickup events where we basically take containers out into the community on a weekend when most folks are doing their cleanup. We can also collect home chemicals while we're out there and once we're done we take the containers with us to prevent illegal dumping. That's on the very low cost side. We could do that with existing resources. On the high side we could take it from a drop-off center to a staff site which could go all the way up to a million or two million dollars depending on the services that we want to offer. And so we put that out there the way we built this into the budget is basically just a flat relocation of that site at $420,000. We're happy to take any recommendations the PV has before we talk to council on that particular piece. So essentially the the cost could scale up or down depending on how we want to approach that. So that's essentially our supplemental package in the end of my piece of the presentation. Before I turn it over to Nick are there any questions from an operational standpoint? Do you know what the contamination rate is for the North Lakes drop-off? Yeah so we it's about 38 to 40 percent which is not uncommon. I mean when you look at these photos you've got folks that are recycling responsibly but then you have a few bad actors. So you've got lots of usable cardboard here but then you also have you know a lot of waste that's going in. The reason why the contamination rate isn't higher is we actually roll out with refuse trucks and do clean up three times a week on this side. So it's it's a pretty involved process. I don't know Eugene probably two or three employees an hour or so at a time to clean this up. In addition to the waste and stuff some of the other problems we have obviously you got chemicals and propane tanks here. We're dealing with a lot of windblown litter at the site and depending on where we relocate that can have an impact on other city properties or private property owners. So our staff is going to pretty considerable lengths to keep this cleaned up. Contamination isn't as high but it's much higher than what we're seeing at the drop-off site at the landfill after we move that behind the gates. Other questions? All right without further ado all right good afternoon PB members chair I'm Nick Vincent the city's budget manager. As Ethan said I'll be walking you through the financial portion of the proposed 19-20 budget for solid waste fund. I did want to hit some assumptions that were included in putting this budget together this year. Staff is recommending to change the way that the current reserve is structured within this solid waste fund. I'll review this with you in detail on the preceding slide after well the slide following this one where we can explain a little better. We are also recommended to maintain existing residential rates. We are wanting to utilize the fund balance within this solid waste fund to implement a rate correction strategy that I'll review with you in a following presentation after this one also. That's a direct follow-up to a cost of service study that was done last summer and I'll discuss that with you in further detail here shortly. Some of the major capital items that's included in this year's budget in 2020 we are wanting to issue one million dollars in bonds to fund renovations to the administration building at solid waste. In addition in 2022 we're wanting to issue five million dollars in bonds for cell development cost which is in the future years and I'll show that to you on the five-year CIP. So as I mentioned staff is recommended to change the way that the current operating reserve is calculated in the solid waste fund. Currently there are three components that are added together to make up this fund total. You have an operating component that you can see here that currently has about five million dollars in it. You have a rental fund component has about 1.2 million and then you have a vehicle replacement fund component about four million dollars. So all together these total about ten point four million. They're not separated out they are all combined into one reserve fund currently. Moving forward what we want to do is create two distinct separate reserve funds. One being operating the other being vehicle replacement. In doing that we had moved nine million to the operating side and one million to the vehicle replacement side. We are also recommended to do away with the current rental fund component that is shown on the second line. This is consistent the way the water and wastewater utility currently show it so they both have an operating component a vehicle replacement fund component. This is the five-year forecast. You can see the adopted 2019 budget that we're currently in here in this column. We were projecting to use about three hundred fifty thousand dollars in reserves. End of your estimate revenues are coming a little bit shy of what we projected so we're projecting to use about five hundred fifty thousand in reserves. Moving forward we have rate revenue of thirty four point four million dollars. You can see that up here. Expenses about thirty seven point three million. This does include the one point eight million dollars in supplemental packages that Ethan had pointed out on that slide. So given that we would be using two point nine million in reserves if PB and council approves this proposed budget. The reserve funds are both separated out here down below for transparency so you can very easily see there's an operating fund component and there's a vehicle replacement fund component and you can see that both of them are growing over the five-year period so the operating fund goes from seven point one to seven point nine million and then the vehicle replacement goes from one million to four point three million. These are the solid waste resources. You can see the adopted budget is here in the middle column. The proposed budget is to the very far right so we had adopted resources about thirty four point eight million that did use a little bit of reserves that were included in here and then proposed about thirty seven point three of which two point nine is the use of reserves and we pointed out in the forecast. This is the expense detail. You can see the expenses by the different service categories within solid waste. We have thirty four point eight million dollars in expenses in the adopted budget. We're projecting that to come in about thirty four point six with the proposed budget to be about thirty seven point three. As I stated before the supplemental packages that Ethan reviewed are included in here. This is the five-year capital plan. I did want to point out on the previous slide I had mentioned we're going to issue one million dollars in bonds to renovate the solid waste administration building. You can see that money here and the future years we do have some debt issuance in 2022 and five-year money for cell development. Those are the major items included in the bond issuance. So you can see in 2020 we'd be issuing a total of five point seven million total. This would include revenue funded projects and capital fund projects and it separates it out down below here. Bonds are three point three and revenue is two point five. You can see, I apologize my mouse disappeared on me, right there. So bonds would be three point two and then revenue would be two point five. This is the FT summary. So currently there's a hundred and twenty two point five positions in the solid waste fund. We are projecting that to stay consistent to the rest of the fiscal year through September. Moving into next year we would have the one twenty two plus the one supplemental that Ethan had mentioned on the supplemental slide. So bring the total FT count to one twenty three point five for the solid waste fund. And then with that, that concludes the presentation for the budget. I'll stand for any questions you may have. Our staff is here, Ethan is here too if you have further questions. What caused the increase or the planned increase of our operational reserves? Let me go back here. So that's a great question. So the operating reserve is increasing from 2020 to 2024. The major contributing factor is the debt service. The debt service does go from eight point five million down to six point two million. As the fund continues to revenue fund assets instead of debt funding them, the debt service is falling off in the future years. Okay. Yeah and that does fall directly to the operating reserve. Any other questions? That's it for this presentation. Thank you sir. Appreciate it. So our next item on our work session is item C. Receive a report, hold a discussion, and give staff recommendations regarding the solid weight, solid waste rate correction strategy. Good afternoon Chair, PB members. My name is Nick Vincent, the City of Denton Budget Manager. I just want to step aside and step back up here. So I'll be walking you through this presentation also. Appreciate it. So a little bit of history in the summer of 2018, the solid waste department partnered with Nugent Strategies to complete a in-depth cost of service study, if you recall, and that study looked at the different service components in solid waste, residential, commercial, and landfill, and identified the revenue requirement of each. Some of those were over recovering and some were under recovering, so this correction strategy is meant to adjust those and correct those. So I'll walk you through each of them separately and throughout the presentations will stop me if you have any questions. I'll be happy to answer them. Apologize, let me get the right presentation up here. All right, some of the major accomplishments to date. Ethan touched on these a little bit, but we did do a 12% rate reduction last year for residential customers. We eliminated landfill mining to save net losses of over a million a year. I mean we did construct a CNG station for net savings of $400,000 annually, and one of the recent ones we did cancel the building materials recovery operation to avoid net losses of $680,000 a year, and that's about two to three months ago. So as you pointed out, Chair, earlier the debt services decreasing in 2019, it's 8.9 million. That does go to 6.2 million in 2024. This is part of the reason we can implement this rate correction strategy over a five-year period, and I'll touch on that here with you shortly. So there are three main service categories of unsolved waste. You have your residential, your commercial, and your landfill. Residential, these clearly identify the goals for each. Residential's goals is to maintain the existing rates. Of course we decreased last year by 12%. The commercial goal is to incentivize customers to move to larger containers with less collection frequency. That, you know, cuts down on wear and tear of the equipment, wear and tear on the roads, so we do want to incentivize that behavior. Recycling is the same way. We want to incentivize recycling through reduced rates, so we'll go over the recycling rates currently in the proposed ones with you here shortly. And then also we want to reduce the over recovering rates in commercial to bring them to cost of service over an amount of time of five year goal. Landfill goal would be to reduce the over recovering rates also over five years to establish cost of service rates, and then also to be cost recovery in five years, the efficiency they find at the landfill. So as I said, there's three main categories. You can see each of them listed in this matrix. Residential is listed here. They're currently under recovering through the rates about a million dollars. Commercial is over recovering about 3.3, and landfill is under recovering about 2.4. What we've done is we've put the five year goal below, so you can see that the residential five year goal is to maintain existing rates within the residential department. Commercial would be to reduce the over recovering rates. We'll review those with you shortly. And landfill would be cost recovery in five years through increased efficiency, and as the debt service continues to fall off. This is the residential slide. It details out the rates for the two different size containers that the residential customers currently can choose from. We have a large container, and then we have a medium container. The services that have the checks listed next to them here are the services that are included in that rate. We do have some individual service fees that are out here to the right with the fee of each associated with it. So if a customer was to call in, for instance, for excess yard waste, there would be a cubic yard charge for that service. I do want to point out that the ones that have the red asterisk or their underline, these are future program discussions that Ethan will be bringing back to the PB and council over the next couple months. So I thought it was important to point that out. What I wanted to do is go over the different size containers or type of containers in commercial that customers have to choose from. First, you have a front-load container. This service is built on a monthly service fee based on collection frequency and size. We'll see that on the next slide. These are side-load containers, very similar, just a different truck, and these are also built on collection frequency and size, and we'll review those also. Roll-off containers, you see these at construction sites. They do have three components that go into billing it. So when a customer receives a bill for a roll-off container, you have a service fee component, a disposal fee component, and a monthly rental fee. Same thing with compactors. You see these a lot, like at big grocery stores, universities, and they do have three components that go into the rate also. A rental component, a disposal component, and then a service fee component. This is the front-load refuse rate slide. As I stated earlier, we do want to incentivize customers to shift to larger containers with less collection frequency to cut down on wear and tear of the roads and wear on the equipment. We do want to incentivize recycling through reduced rates. We'll review the recycling rates with you on the next slide. The matrix below here, this is the front-load refuse rates. So if you look at the table, the current rates are here on the left, and then the ones we are proposing to change are highlighted in this green column. So you can see, for instance, a 6 cubic yard going two times a week is currently 297. We're recommending to go to 282. This would take us closer to cost of service. It is reducing the over recovering rates that currently exist within the front-load refuse customers. We do have a few out here that we have X's next to. I want to point these out really quick. These are rates we're recommending that go away. There are minimum customers in these categories. We do feel like it'd be more efficient to move them to a larger container, maybe going less frequent, less frequent per week. Another strategic move we're wanting to propose is to align the side-load refuse rates with these front-load rates that you see here, creating one distinct identifiable rates for refuse service and one set of rates for recycling service. Just keeping it consistent. In the past, the side-load rates were higher than the front-load refuse rates. So moving forward, we're proposing to align those two different service categories. This talks about side-load rates, the ones I just mentioned. So we are proposing to align the side-load refuse rates with the front-load rates you just saw on the previous slide. We are also proposing to adjust the following rates. So for instance, a 3 cubic yard going one time a week would go from 105 to 74. The bottom table is the recycling rates. As I mentioned before, the anyone with the X that is in the matrix are rates we're proposing to do away with moving forward. They're not currently being utilized or underutilized rates and categories, so we're recommending that them go away. These are some additional commercial rates that are out in the community. So we do have organic collection rates. These are for pre-consumer organics and you see these a lot of times at grocery stores in the community that have, you know, pre-consumer organics collected in those as are brought back to the saw waste facility to be composted. We are proposing that rate go from 374.13 to 274. The extra fee associated with that we're recommending to go from 240 to $75 based on the cost of service study that was done last summer. We are recommended to keep the compactor service fee of 275 and separating it out from the open top service fee. Reason B in the consultants recommendation was to maintain the compactor service fee just because of additional requirements for the driver to get out of the truck and hook hydraulic hoses and such a little bit more in labor-intensive. So we are recommending to leave that the same. The open top service component of it though that doesn't have the hydraulic hoses just to hook up, load the container and dump it, we're recommending that fee go to 240. That's here on the bottom. Landfill rate, one of the major recommendations from staff this in this correction strategy is to separate out the gate disposal rate for non-city Denton citizens and businesses and I'll discuss that with you down here below. We have we are continuing to reduce our reliance on wholesale waste in the landfills so the forecast is taking the growth assumptions out in the future years. So going back to separating out their disposal rates so we are proposing to separate out the city didn't disposal rate from non-city didn't disposal rate we would increase non-city Denton's rate from 44 a ton to 46 and that's shown in the first bullet point here and then we would recommend maintaining the existing rate for city and citizens and businesses and it's currently 44 a ton and this is people driving up to the facility disposing of stuff they may have loaded on a trailer in the back of their truck we would recommend keeping that the same. With that that concludes the presentation I know I've covered a lot of stuff so if you're getting questions I'll be happy to back up and address your questions. I have a question it's a little off-topic but not really. Whose budget is burdened with paying for litter or illegal dumping within the city limits? Ethan you want to come up and try to just address illegal dumping let me ask Ethan Cox to come back. I mean I know at one point in time we actually had a task force there was a number you could call like 369 dump or junk or something like that and you could report illegal dumping and I don't know if it was ran by the police department or if it was run by Solid Waste or. So Mr. Chairman Tony point the chief financial officer so currently that is all paid through out of the general fund our parks department is really the one that's tasked with that that there's also coordination with our community improvement services improvement department formerly code enforcement and so that's that department's also in the general funds it's really the general fund it's tasked with cleaning up a lot of those they have litter locations primarily around parks other city located property certainly if it's a private owned property then we try to work with the with the owner of that property to have them correct that that litter that may be on their property okay okay I know that you know I know this is this is always unintentional but often when we're dumping the commercial dumpsters litter spills I know it even happens with with residential bins as well but often the resident the residents owner will actually go out there and clean it up and put it back in the bin but with the commercial collection you know nobody really wants to own it sometimes not even the driver who spilled it doesn't want to own the trash and then it becomes something that I think we have to pick up and somebody's got to pay to have that pick up and I think it's I think it's great that we're trying to reduce rates for somebody because that's a good thing to reduce rates but it seems like maybe we're overlooking some of the real costs of delivering that service Chairman I think that's a great point you know it's one of the things that we've talked a little bit about internally is we have a very outdated ordinance in terms of servicing and service standards Nick had highlighted a couple of slides ago for residentials we want to come back and kind of refresh and say okay here's how this was intended to work is it actually working the presentation is up but one of the things you noticed on those slides for the North Lakes drop-off I showing is those containers were overloaded they're spilling out on the ground and I think that's one of those things that we really need to work with not just our residents but also our commercial entities on is if you can't close the lid by ordinance we shouldn't be servicing that container because it's exactly what you're saying is as soon as we lift it it's going to spill out all over the place for commercial containers especially front load depending on the type of material you could be lifting that and it comes straight through the windshield at the driver and so really creates not just a literary issue it also creates a safety issue for our drivers and so I think what we want to try to do is take kind of a common-sense approach to how do we do these things bring back to both the board as well as the council some recommendations for recrafting our ordinance changing some things when necessary and then we want to talk to you all about how do we enforce on that because we certainly want to go out there and collect something but it's going to create more litter or hazard then I think the person that created that issue is really the person that needs to be part of helping us clean that up and so it's just really trying to get to those common-sense solutions about how we work around those issues okay thank you this is one thing that just occurred to me is have we considered putting like cameras out there or something to monitor that North Lakes that's part of that 420 and change that we showed up there we don't know what was in that yeah I mean it is a relocation but a couple of things that we have built into that figure that you saw up there is adequate lighting as well as cameras and then prosecuting illegal dumping and folks that are abusing that site it's easier said than done we had cameras out at the landfill it didn't deter most folks from abusing that site but we do need to be more diligent about going after folks that are our bad actors I wonder if one effort you could make in that direction as far as catching those people I noticed that you know at that I use the North Lakes recycling center frequently and there are signs up that saying it's monitored but if you look around you can kind of tell it's not monitored but if we do come up with some kind of solution where people can report illegal dumping you could actually put some signs big signs along that fence or a fence near the dumpster letting people know how to report it and perhaps people will be reluctant to do so if their neighbor right next to them is being given a hey take a picture snap a text and send it you know I don't know I don't know it just seems like we need some as a citizen who sees it happening we need some kind of deterrent yeah some way to report it some you know thank you yeah well just one more thing too it just occurred to me we were talking about the really large those dumpsters because I go by there all the time and it seems like they're always full like to overflowing couldn't we put some larger ones out there and that's one of the things with the new side is if we do relocate and move it over there instead of doing what we call front load containers which is what you saw up there we would do more standard roll-off containers that are restrictive in terms of what you can put in there again that's not going to knock off the illegal dumping if someone's not being monitored or you know enforced upon because we had the same dynamic at the landfill when we were seeing that but it does restrict some of what you all are talking about is the windblown litter things on the ground consistently so it's definitely something we would put into the design for the new side and I don't know if you have any control over the design of the actual thing you know the actual dumps I mean the containers containers thank you sure I'm very short I'm like five foot tall it's very hard for me you know I mean I'm constantly having the ground because you can't reach it but I know that I mean so I'm very conscientious to try to you know I do but you know other people won't I'm gonna go I've done it three times now I couldn't reach it I'm just gonna leave it where it is and walk off and just a thought we'll certainly take a look at that as we purchased some new containers I have some stairs out there so that shorter people can stand in the back of the truck well I think efforts to reduce rates for commercial customers is a fine idea I'd hate to see us go through some efforts to reduce it and then find ourselves in 18 months or 24 months trying to bump the rates back up right because we really didn't assess the situation right no I'm glad you brought that up so one of the recommendations of staff is to bring this back to the PUB and council annually as part of the budgeting process where we can take an annual look at it make sure we're not reducing them too much we have to come back the rate increase thereafter okay okay thank you okay the next item is part of our regular meeting it's the consent agenda we have a few items on our consent to consent agenda a through H we're gonna pull item a for consideration at another meeting Larry did you want to speak to that real quick we're just gonna push it to another meeting and take care of the first item on the consent agenda has to the Saturn non-disclosure agreement and UNT is involved in that ultimately and we have a member of our board who is a employee of UNT and so she's not able to participate in the vote on that and that leaves us down to three so we don't have a quorum and so it's not a problem to push that to another meeting okay although it is gonna go to council tomorrow okay without a recommendation from PV they'll come back and bring it back for consideration here okay thank you so with that being said we have items B through H on items for our consent agenda does any member want to pull any item for questions or further discussion nobody wants to pull any items do you have a motion for approval of item B through G oh sorry through H on our consent agenda so moved to approve be through H yes ma'am I'll second we have a motion for approval and a second any discussion all those in favor say aye aye all those against nay the motion to approve items be through H passes the second item we have in our regular meeting is items for individual consideration the first item is the approval of the public utility board meetings from the minute meeting of April 8th 2019 the draft minutes have been distributed in advance of this meeting do does any member have any omissions deletions edits that they'd like to make to these minutes no hearing none the minutes are approved as submitted and item B is the assistant city manager update yes mr. vice chair members of the board in your packet you'll have a memorandum or memo from Debra Vieira to myself that includes an attachment and informal staff report that was sent to our City Council back on on April the 12th basically it just gives a summary of a of a violation that that the city was issued from the Texas Commission environmental quality on a I believe it was more of a of a missed sampling of a water of a water collection it was basically a missed one sampling of a hundred they're supposed to pick 120 water samples just threw it in inadvertent error they missed one and so as a result it triggered a violation but there's no concern about the water quality so based on that we've changed our standard to actually over collect to make sure nothing's missed in the future but again because we received the violence notice of violation we wanted to inform our council and obviously informed the PUB of that of that said violation and if you have any specific questions Ms. Vieira is here to answer those questions if you have those come didn't we have a similar violation last fiscal year fiscal year before that where we didn't test at all with this it actually made the paper and upset people for a little bit until they realized that it was kind of a procedural thing I'm not good afternoon or good evening board Ken banks general manager of utilities I'm I'm gonna take a guess at the one you're referring to and I think it was related to the lead copper monitoring that we were yes okay okay and basically what that was is it was a the state had changed a procedure whereby they used to send the the bottles and that was kind of the the impetus for going out and doing the collection and because of that change in procedure it was not noticed in the monitoring time by the time that that issue was noticed we had gone past our window there's a narrow window in which to sample them because they want them want the samples collected in the hotter time of the year and so what we had to do is actually wait until the the following summer to do that monitoring we were not alone in the state there were there were quite a few utilities that kind of fell in that same category but this is a different this is a different test these are these are for fecal coliforms and for disinfection products and basically you collect a hundred and twenty on a monthly basis okay all right thanks again the future board agenda items you'll be noticing you'll notice that you'll have a number of items budget presentations coming forward to you over the next number of weeks so starting today along through through the middle of summer you'll be seeing these presentations and look forward to presenting those items to the board and answer any questions you all may have nothing further to report our third and concluding item of the regular meeting is the Texas Open Meetings Act allows an opportunity to us for us to respond to inquiries from the public utility board or the public with specific specific factual information or recitation of policy or accept a proposal to place the matter on the agenda for an upcoming meeting it also allows an opportunity for members of the publicly public or community to include expressions of thanks congratulations condolences information other type of information like that that doesn't require an action by the board does anybody have anything like that they'd like to present oh I wanted a status report on the dumpsters off of sidewalks those I think those letters gave a deadline of April something and we included an update in our as an informal staff report on this past Friday and we'll send you a copy so the board a copy of the of the update my understanding is everyone's in compliance all right well then so that doesn't need to go on the agenda right if we're getting the report we'll still include it as a ACM update okay and send it to the board separately any other items from anybody none anybody in the audience part of me anybody in the audience anybody have anything they want to say okay nothing beings wanting to be said do we have a motion for to adjourn this meeting so moved do we have a second second and we are adjourned thanks everybody