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