>> Okay, it is nine o'clock and we do have a quorum.
So our call to order the Public Utilities Board for the City of Denton on Monday, October 9th, 2023.
The first item is presentations from the members of the public and I understand no one asked to speak.
So then we'll go into closed session and I'll read this.
The Public Utilities Board will now at 9.01 AM convene in a closed session to deliberate the closed meeting items set forth on the agenda,
which include the following IDPUB 23171, deliberations regarding certain public power utilities,
competitive matters under Texas Government Code section 551.086,
consultation with attorneys under Texas Government Code section 551.071.
Okay, the Public Utilities Board now has now at 9.34 AM reconvened from the closed session and no official action was taken.
So the next item is the consent agenda.
Does any board member wish to pull an item from A through E?
>> Madam, I move approval of consent agenda.
>> Okay, Mr. Ryback moved approval of the consent agenda.
Do we have a second?
>> Second.
>> Mr. Taylor seconded.
All in favor say aye.
>> Aye.
>> Okay, next item is consider approval of the September 11th, 2023 minutes.
>> So move.
>> Second.
>> All in favor say aye.
>> Aye.
>> Carries.
PUB 23180, consider recommending the adoption of a contract with Techline Inc. for the purchase of insulated and multi-conductor underground distribution cables for $20 million.
>> Good morning members of the PUB, I'm Randy Key, Electrical Engineering Supervisor at DME.
Bringing forward a new contract for underground cable.
We went out for RFP to supply 15KV and 25KV insulated primary and secondary cable.
We had two responses to the bid.
It was Techline and Mena Holdings.
This contract is a replacement for the current contract that is expiring.
The last contract was for an NTE of $18 million.
This is a table of what we expect to spend.
This past fiscal year, we actually, we did spend $4.2 million.
The year before that, it was around 1.6.
We did have to bulk order a little bit this past fiscal year because --
So this last year, we did spend $4.2 million.
The fiscal year before that, we spent around 1.6.
We did have to bulk order.
We do expect to spend around 3.6 the next five years.
We did put $2 million in contingency for this contract.
And we recommend moving forward with this contract with Techline for the NTE of $20 million.
And at this point, I'll take some questions.
>> I see we only had two responses out of what was 243?
>> Yes, ma'am.
>> Just the way the business is now?
>> Just the way it rolls.
>> Okay. >> Yes, ma'am.
>> All right.
Other questions?
>> Yes, ma'am.
This organization or company, Techline, have we procured from them previously?
>> Yes, sir.
>> Okay. Have they been a good supplier?
>> They have. They've been great.
>> And I'm all in favor.
Thank you.
All right. Do we have a motion to approve this item?
>> So moved.
>> Mr. Reddick moves.
And Mr. Pluck seconds.
All in favor say aye.
>> Aye.
>> Carries. Thank you.
Management reports.
>> Thank you.
>> Thank you, Madam Chair.
A few things in here.
We have the very done memo for a tech services contract.
We do have Alicia Main here if you have any questions on that.
Then we also have the distributed generation manual which was taken to council a few weeks ago.
And the green sense incentive program manual as well.
And there's a TRC engineers memo which is related to DME services.
There's staff here to answer questions on that as well if you have any future agenda items.
It shows in there that what was asked back in September,
the final wastewater master plan is scheduled for a work session with y'all in December.
So December 11th.
Basically all the new business action items were corrected back in September.
>> Okay.
And I have a good question.
>> So I sent an email and we were hoping to discuss this last meeting but we didn't have a quorum.
I just wanted to briefly point out in the distributed generation and green sense programs,
DME has a low threshold for requiring a PPA.
The maximum solar or distributed generation you can put behind the meter
without having a negotiated contract is 20kW which is big for a house but it's pretty small for commercial.
And there was some talk about, well, we don't have a rate.
There wouldn't necessarily be an appropriate tariff.
The green sense tariff pays a very high rate for homeowners but it doesn't apply to commercial.
So if a grocery store or warehouse or factory installed 100kW system to offset their load,
if they exported, we don't have a mechanism necessarily to pay them.
And I understand that and I think it might be why prudent to have a base commercial export rate added
in the future but even without an export rate allowing Kroger to put 100kW system on their roof,
they're going to use more than 100kW in load.
So even if they never sell a kW back onto the grid, they can't do that without having a PPA.
And so it would be beneficial for this demand response and demand reduction.
If it's behind the meter, DME never even sees that load and it removes that peak summer demand.
So having an interconnection capability higher than 20kW without a PPA in place,
I think would be a benefit for all rate payers in DME and for the DME system.
Now, the rate that they get paid if they export is a separate matter and usually,
you know, you don't get paid very much if you're a commercial entity exporting unscheduled power.
>> Do you speak to that?
>> Good morning, Madam Chair, Bill Sheppard, DME and PB members.
So the answer to your question is there is a mechanism and that is our DGR.
So that's our distributed generation rate.
If we don't do a PPA, that's the rate that they default to.
And in fact, we have 21 systems that are over 20kW.
Two of which have a PPA, the others do not.
So they fall under that same DGR rate that they're getting essentially full retail
for anything that comes back to us.
Now, it allows us the option to do a PPA and it's a very simple PPA.
It essentially just outlines what DME is willing to pay for energy that does incidentally come back to us.
So it's a way to sort of hedge our risk, so to speak, without paying a lot of money for that energy coming back.
Now, once we have the value of solar study done, which we're going to be starting this fall,
I think maybe we can relook at that and how that mechanism takes place.
But until then, at least this gives us an option to enter a PPA.
>> Because I believe our language says may.
May enter into a PPA, okay, not shall.
>> Correct.
>> And that's different, correct?
>> Yeah, and I think it's great news that we have this planned.
But if we already have a price that we, you know, a standard PPA rate, you know,
we could make that the commercial export tariff rate, you know.
So, but I think it'll be great to see the results of that study and see how we can move forward with this.
>> Sure.
>> Thank you.
>> I wanted to comment, I really appreciated the work that you did in investigating this particular aspect
of our current DME program.
I thought that was outstanding.
One thing I do agree with, Mr. Taylor, about very strongly is I like the idea of raising that threshold from 20 to 100 KW.
I don't know if that makes sense based on what you just said.
I did not also, I also did not realize it was a shall not must on the PPA.
So I don't--
>> It's a may not shall.
>> Or may not shall, or however you want to put it.
It wasn't mandatory.
>> But you're not allowed unless you have it.
>> Yeah, so if it's not mandatory, maybe the concern I had about that is less important.
But I also read it as that was mandatory and I agree that I thought the PPA thing was rather involved based
on my experience and knowledge of them in the past.
So maybe I shouldn't be that concerned about it, but I thought it was a good idea to potentially look at raising a threshold for that.
So I would like to know what you think about that.
>> Yeah, if I may, so one of the instances we have to look at is the what ifs, right?
Let's take an auto dealership for example, a used car dealership, very small office, very small load at the office.
Probably the majority of their load is lighting and they install a canopy system to protect their cars
from hail or what not and the elements and they put solar on top of that.
Well, as you saw a year and a half ago, a lot of dealers went out of business.
Well, that dealer can technically go out of business from a retail standpoint, leave its meter on and that 100 kW system,
which would have been easily accomplished for a pretty large lot, would steady be pumping energy back to DME,
which we would be paying full retail for.
So that's the part that we're just trying to cover our bases with.
But the majority of the businesses that are putting solar out there are absorbing it internally.
So, you know, we never even see any of that energy, which is great.
That's ideal for them.
That's the most value for them is to offset any retail sales from us.
So, but again, we will be taking a lot of look at it when we do the value of solar.
>> Thank you.
Then we're on to concluding items.
Does any board member wish to say something to the public or put a future agenda item on future item on the agenda?
>> Yes, ma'am.
I would like to add an item for future consideration to learn more about what plans,
if any, Garland has for the power plant, which is so closely located to our infrastructure.
>> Okay.
And Ray or Rob, welcome to the PUP board.
Would you like to introduce yourself and Rob Rainer with Tom Fouch Realtors?
And I have, yep, turn your microphone on.
>> Rob Rainer, Tom Fouch Realtors, looking forward to just getting more information as to how this all operates.
And it has been a great improvement from the last time I was on the PUB.
And back then, we just passed for a green and blue trash can.
And that's about all we accomplished.
So thank you, Madam Chair.
>> All right.
Anything else?
Let's move into the work session.
Receive training and hold a discussion regarding the City of Denton Code of Ordinances, Chapter 2, Article 6.
I had to remember my Roman rule.
>> 11. >> 11, 11.
That's not a V, that's an X.
Had to go back to elementary school there for a minute.
And that was a long time ago.
>> All right.
Hello, I'm Madison Rocha.
I'm Denton City Auditor.
I'm going to give you all a brief training on the city's ethics ordinance, which you're all required to receive for the ordinance.
But I promise it'll be quick.
Rob, you're aware of this, some of this at least.
So today we'll be covering the ethical expectations laid out by the city's ethics ordinance.
The ordinance's mandates and prohibitions are basically what it requires.
How city officials subject to the ordinance can request clarification on its application.
And a quick overview of what happens if an ethics complaint is submitted against you as a city official.
So to begin, the City of Denton's ethics ordinance was adopted in 2018 and was most recently amended this year.
This ethics code is intended to foster an environment of integrity for those that serve the City of Denton and its residents.
By ensuring that decision makers provide responsible stewardship of the city's resources and assets and providing behavioral guidelines and requirements.
The key goal of the ethics ordinance is to further the public's trust in those who govern their community.
More specifically, the ethics ordinance outlines six aspirational expectations.
These expectations cannot be used as the basis of an ethics complaint, but they are intended to guide city officials in carrying out their duties.
These include conducting yourself in a manner that fosters public trust, performing your public duties with personal and organizational integrity.
Avoiding behavior that might call your motives into question and erode public confidence.
Placing the interests and concerns of Denton's residents above your own.
Valuing honesty, trustworthiness, diligence, objectivity, fairness, due process, efficiency and prudence.
And balancing transparency with the duty to protect personal privacy and preserve any confidential information that you have been trusted with.
While the rest of this training will focus on specific behaviors that city officials must comply with, this aspirational section is the most important of the ethics ordinance.
If you ever find yourself questioning if a specific action or inaction might be ethical, first ask yourself if it would align with these expectations.
It's important to realize that these expectations are not only focused on the way things are, but also on how they appear.
A city official has a position of privilege within their community that they must respect.
Serving your community as a city official is an honor that requires integrity and dedication.
In general, you can think about an ethics code as a stoplight.
In some instances, the code clearly prohibits a specific behavior or creates a red light.
However, in other areas, the code creates broader prohibitions or yellow lights.
Yellow lights communicate that a city official should thoughtfully and cautiously consider if the action or inaction is ethical based on the city's expectations as they proceed.
Throughout the presentation, I'll be calling out which parts of the code are red lights versus yellow lights to help provide guidance.
Now that we've covered the basics of the city's ethics, ethics, ethical expectations and general guidance, I'll get into more specifics.
So the city's ethics ordinance includes three mandates and nine prohibitions that cover different actions or behaviors that city officials may take.
So I'll briefly cover them over the next couple of slides.
However, more detail is available in the actual ethics ordinance.
So beginning with the mandates, the ethics ordinance requires that city officials disclose certain business relationships if they are relevant to a pending matter.
Specifically, if a business entity with a pending matter is owned by a city official's partner,
the city official must disclose this relationship to the city secretary and the city auditor.
That's me at least one business day before the meeting where the pending matter will be deliberated.
All disclosures will be provided to the relevant body before the deliberations.
This disclosure requirement is a yellow light in the ethics code as even though city officials are allowed to deliberate on these matters by the ethics,
per the ethics ordinance, it calls out that there may be a risk that this type of business interests may receive unfair treatment from the related city official.
In addition, it requires that city officials comply with any financial disclosures required by the Texas state law
and that city officials report any person that they know has violated the city's ethics ordinance.
These mandates are red lights and not reporting a known violation is itself considered to be a violation of the ordinance.
So you want to if you have questions, I can take them about this section.
I know that the business equals report is kind of complicated.
So but we can take questions if you have any here.
Yes, I have a question report known violations of the ethics ordinance.
So something could happen that one of us might know about but not realize it's a violation of the ethics ordinance.
So we obviously wouldn't report it.
So does that play into anything?
Is that something we should be concerned about?
Yes or no.
I think this training is intended to help you know what is and is not considered a violation of the ethics ordinance.
So I think if you have had your training and you're and then you don't report something that might have somebody else reports,
you can at least say I took the training.
I didn't realize that was a violation.
But it's intended to say if you know something's going on, you should you're required to report it per the ethics ordinance.
Does that answer your question?
Yes, thank you.
Anybody else on this section?
All right, cool.
All right.
So these are now the prohibitions and not mandates.
They're a little bit different.
But so for the first one, we'll begin with conflicts of interest.
Ethical best practices suggest that a city official recuse from deliberating on a pending matter if they or their relative have a personal or economic
interest in a business entity or property that is not shared with the general public.
This general guidance is a yellow light that is intended to draw attention to the risk of conflicts of interest.
However, I should note that while this is generally good guidance for city officials,
this general prohibition is not actually included in the ethics ordinance.
Instead, it has very specific prohibitions that I'll go over next.
And so these specific prohibitions are red lights.
And so they include owning five percent or more of a business entity's voting shares or stock,
owning six hundred dollars or more of a business entity's fair market value,
owning six hundred dollars or more of the fair market value of real property,
receiving six hundred dollars or more in income from a business entity,
serving on the board of directors or as an officer of a business entity or nonprofit,
or having solicited, received or accepted an offer of employment from a business entity or person in the last 12 months.
So if you have a conflict of interest as defined on the slide with a pending matter on an agenda,
you're required to recuse yourself from the discussion and submit an affidavit of abstention to the city auditor.
That's me. A pending matter includes an application seeking approval or authorization,
a proposal to enter into a contract or a case involving the city that is or may be before a civil criminal or administrative tribunal.
Further, it's a violation of the ordinance for a current city official to represent a person, group or entity before a city board or commission for compensation.
This prohibition also applies to former city officials for one year after termination of their official duties.
Similarly, formal city officials are prohibited from performing compensated work on a city contract or arrangement
that they substantially participated in the negotiation, award or administration of unless that was just limited to deliberation.
So any questions on the conflict of interest representation of other sections?
>> Excuse me. I do have one on the $600 of a business entity's fair market value.
I think that kind of makes sense of, you know, it's my -- I'm an investor in a store downtown or something like that that's got a case before a board.
But I was wondering about general stocks. Like if I -- if you have a 401(k) invested in S&P 500 and --
>> It holds target.
>> General -- yeah, target is building a something.
Is that -- does that apply or is there a threshold at which -- how many degrees of separation do you have to have for that $600 in market value?
>> Yeah, I think what you're talking about would be covered by the 5% or more of the voting shares or stocks.
So if you own 5% or more of targets --
>> I guess if it has voting shares or stocks, you have to be a -- if it's something small --
>> If you own voting shares -- yeah, I believe so.
>> Okay, I was just curious because thinking about that, you know, you get the occasional like large corporate thing and probably a lot of people have their 401(k)s and funds that might have it.
>> Right.
>> Okay.
>> Good question.
>> All right, I have a question.
I may have misunderstood, but you were going through that list of things after you read this list of things, you went through another list.
>> There's a lot of lists, I'm sorry.
>> That's okay.
And one of them seemed like it was saying something about 12 months after we have left the board.
Could you say that again?
>> Yes, so if once you're -- a former city official is somebody who has been on a board -- is no longer on a board, but was on one within the last 12 months, and you're -- during that time period, you're not allowed to represent a person, group, or entity before a city board or commission for compensation.
>> Oh, for compensation.
>> Right.
>> Okay, so you could still speak to an issue that was before a public body with the city of Denton.
>> Correct.
>> Okay, you just can't represent them as a --
>> Right.
>> -- paid spokesperson.
>> Yes, that's correct.
>> Okay, thank you.
>> Any other questions on this section?
Great.
Next, the ethics ordinance also prohibits a city official or their relative from accepting any gift that might reasonably influence a city official in discharging their duties.
So that's kind of the general prohibition or yellow light to kind of guide you.
And then the specifics include a city official cannot accept a single gift valued more than $50 or multiple gifts with a total value of more than $200.
In general, a gift is considered to be anything of monetary value such as cash, property, services, meals, entertainment, or travel-related expenses.
If a gift is accepted, the city official may remedy the potential violation of the ordinance by promptly donating it or reimbursing the gift giver the actual or fair market value of the gift.
And then if it is accepted, the city official should disclose the acceptance and the remedy by filing a disclosure with the city auditor.
The ordinance does allow certain exceptions to the gifts prohibition, which means that if you're under this exception, that's actually a green light.
And that includes lawful campaign contributions, expenses related to a city official's travel to a conference or other training event that's connected to the city business,
expenses related to appearances at nonprofit or community events related to city business, complementary attendance at fundraising events or hospitality functions,
complementary or promotional copies of trade publications or clothing items or gifts that are given due to a personal, familial or professional relationship that is not really related to the city official's city duties at all.
So any items received that fall under one of those exceptions do not need to be disclosed, however, city official can choose to disclose them if they would like to.
So questions about the gifts prohibition section? OK.
Next, it is a violation of the ordinance for a city official to misuse the influence or information gained due to their official city position.
So specifically, a city official may not use their influence to secure special privileges or treatment for a person, group or business organization beyond what's normally available or to imply that they can do such things.
While this is a specific prohibition, it's a yellow light as it's not meant to prohibit a city official from providing individuals, groups or businesses with information on how city processes work so that they can more easily access normally available services.
So for that reason, city officials should proceed cautiously and thoughtfully when trying to help the public with specific concerns.
Specifically, city officials should be cautious when stating what they can do to ensure a concern is addressed. Further, a city official may not state or imply that they are acting as a representative of the city unless they've been authorized to do so by the city council.
So these are red lights. There's not really an instance where misrepresenting yourself as an authorized city representative or using confidential information for private interests would be ethical.
Questions on this section? Yes, sir.
So on the confidential information, the last red light, is there a time frame on that?
I don't believe so. One year you are on probation, as it were, but then after that, forever and ever.
I believe that's how it's currently written.
Thank you. Oh, I think it might be limited to one year.
I'd have to go back and check, Rob.
You know, I've got it pulled up right now, but I don't see it.
I think by using the term former city official, it might define that as the 12-month period.
I'd have to go. It's complicated sometimes, what it's saying.
One year after termination of duties.
So I think it is one year. You're correct.
Other questions on this section? Last of the prohibitions.
It is a violation of the ordinance for a city official to abuse the city's resources
or the power or privileges granted by their official position.
Specifically, a city official should not use, request, or allow the use of city resources,
such as facilities, personnel, equipment, software, or staff time for private purposes,
including political purposes, except to the extent that those are available to other residents.
So while this is a specific prohibition,
it's also a yellow light because it doesn't have any kind of clearly defined thresholds.
And there are instances where a city official can ethically use city resources,
like renting a city facility at a publicly available price.
On the other hand, it is a violation of the ordinance for a city official to harass
or discriminate against a person based on their ethnicity, race, gender, gender identity,
sexual orientation, marital or parental status, or religion.
It's also a violation to interfere with any city-related criminal or administrative investigation,
including persuading or coercing someone else to withhold their cooperation.
These are red lights. There's no instances where harassment, discrimination,
or interfering with an investigation is considered ethical behavior.
Questions about this section? All right.
We're almost done, I promise.
Now that you all have an understanding of the expectations, mandates, and prohibitions
outlined in the ordinance, do you ever come upon a situation where you need additional guidance?
You have a few options.
First, if you need direction helping to find a section of the ordinance related to a particular situation
or an answer on how to submit a complaint or disclosures,
you can reach out to me at internalaudit@cityofdenton.com.
And then second, if you have an attorney, they may be able to provide you with an interpretation
of the ethics ordinance to help you decide whether to recuse yourself or not in a given situation.
And this is a personal attorney, not the city attorney's office.
And finally, you can also request that the Board of Ethics issue an advisory opinion,
which is intended to answer a question about compliance with the city's ethics ordinance in a particular situation.
So the biggest advantage of an advisory opinion is that a city official can use it as an affirmative defense
to a submitted ethics complaint if they relied upon it in good faith.
So basically, if you say, hey, is this a problem?
And the Board of Ethics says no.
If somebody then submits a complaint against you, you can say, they told me this wasn't a problem.
That's the basics.
To receive an advisory opinion, a city official must submit the request in writing to the city auditor,
including relevant details of the situation in question.
I will then communicate that request to the Board of Ethics chair who assigns it to a panel of three Board of Ethics members
for review, and they have 38 days to issue the advisory opinion once it's received.
It usually takes less time than that, but that's the required timeline.
So any questions about the advisory opinion process?
Safe to say, when in doubt, recuse.
Yeah.
Okay.
All right.
This is the last big chunk of information, sort of.
So finally, the Board of Ethics' primary function is to process ethics complaints.
So there are four phases of the ethics complaint process that I'll briefly run through,
just so you have a general awareness of how that works.
Additional information about the complaint process is available on the city's Board of Ethics webpage or can be requested from me.
So first, during the initiation process stage, an individual will submit an ethics complaint using the prescribed form to the city auditor.
This complaint form should be accompanied by any evidence, such as images, videos, or documentation,
that the complainant has to support their allegations and must be sworn to in front of a notary.
The city official then determines if the ethics complaint is administratively complete, but does not make any judgment on the complaint's merits.
If a complaint is accepted, a copy is forwarded to the complainant, the respondent, and the Board of Ethics chair who assigns it to a preliminary assessment panel.
During the preliminary assessment phase, a panel of three Board of Ethics members reviews the submitted ethics complaint and determines if it is actionable or baseless.
A complaint is actionable if, on its face, the behaviors alleged in the complaint would constitute a violation of the ordinance.
The panel may also recommend that a hearing be held to determine if a complaint is frivolous instead of determining if it is actionable or baseless.
The outcome of the preliminary assessment is communicated to the complainant and respondent by me.
And if the complaint is determined to be baseless, the process stops at this point,
though the complainant may submit a written appeal within 10 business days, which would then initiate the hearing phase.
During the hearing phase, the Board of Ethics schedules an evidentiary hearing and may request additional documentary evidence or issue subpoenas to require individuals to testify.
The complainant must attend and testify at this hearing and may also present any additional evidence that they've gathered.
In addition, the respondent may provide testimony and evidence for the board's consideration.
Both the complainant and the respondent have a right to be represented by legal counsel or another advisor at the evidentiary hearing.
And based on the evidentiary hearing, the board will determine if a violation of the ordinance has occurred and may issue a sanction.
Once the board has decided on the ethics complaint, the complainant and respondent both have five business days to submit any new evidence
and request a reconsideration by submitting that request in writing to me.
And then the Board of Ethics chair will review the reconsideration request and will unilaterally determine if a new hearing is warranted based on the new evidence.
So any questions about this process?
I have one more slide about what the sanctions actually are.
But that was I know this is kind of a lot of information, too.
So. Questions about this process.
Hopefully, you'll never have to go through it exactly.
That's why you keep training us.
So if during an evidentiary hearing, the Board of Ethics finds that a violation of the ordinance has occurred,
they may issue one of four sanctions based on the city officials perceived intent and the seriousness of the violation.
And this decision process is generally illustrated in the matrix on the slide.
And if the board was to impose a sanction, the city official will be notified within 10 days by by me.
So these are this I don't know how to these are the potential sanctions.
If you have questions, you can ask them.
But that's the end of the training.
Congrats. You've done it.
I do have a piece of paper for you to sign.
Commission.
We've got the wrong commission title on here.
We're not planning to sign the commission.
Oh, shit.
Indeed, it does.
Crossed through an initial correction.
Yeah.
What this graph is out right now.
We have initial that all the right names are on there, though.
Yeah.
I have to do planning and zoning also.
It happens.
We understand.
So if you have any questions, I'm happy to answer them.
But thank you for attending this training.
Thank you, Madison.
So and it's required annually.
So if you're still around next year, you'll probably see me again.
All right.
It is 10 0 8.
Do we have a motion to adjourn?
Go Lee.
Okay, we're adjourned.