Apr 10, 2024 Economic Development Partnership Board on 2024-04-10 11:00 AM

Okay, so then we have a quorum. I will now call the regular meeting of the Economic Development Partnership to order. It's about 1108, so thank you for coming. First item on the agenda is item A, number EDP 24-030, to approve the minutes of our February 14, 2024 Economic Development Partnership order. Do we have any comments, questions, or corrections for the minute? We have a motion to approve. Do we need a second? I can second. Any other questions or questions? So we have a motion and a second to approve our minutes from last month. All in favor, aye. Aye. Any opposed? Motion passes. Next up, we have item A, number EDP 24-032, receive a report, hold a discussion, and give staff direction regarding the incentive evaluation matrix. Chair recognizes staff presenting this item, Erika Sullivan. Good morning, my name is Erika Sullivan. I'm the economic development program administrator for the city, and I'm giving a presentation on the incentive evaluation matrix. We'll start with the background and history. So the first tax abatement policy was adopted in 1989. Chapter 312 of the tax code requires that we adopt a tax abatement policy every two years. So the economic development strategic plan was approved in February of 2021, and then the policy for tax abatement and incentives expired in March 22. In 2022, staff worked to align the incentive policies with our new strategic plan and the city's core values. And then we have a recommendation on the incentive policies from February to May when they were actually adopted in 2022. And this board will review the updates. We meant to do it at the March meeting, but now we're doing them both at the May meeting, but it's so that you can approve the policies that are expiring in May of 2024. So here we have the incentive evaluation matrix and we're going to go over each of these sections individually. You also have them at your table. The first one with less colors is the current evaluation matrix. It's gray and green. So we selected three different projects to review so you can get an idea how the matrix works. The first is a project with a significant capital tax case that they received an incentive, 100% incentive for a period of seven years. The next is a expansion project that received 100% chapter 380 rebate for a period of 10 years. And then the last one is an entrepreneurial tech project. And this project received a $50,000 expansion grant as well as a job-based grant in the amount of $29,500 for a five-year term. It was also a residency bonus. So we'll begin with the first section. These are our SGA, our strategic growth areas identified in our strategic plan that help us for recruit different targets and they are connective, creative, sustainable, and competitive. And so you can see we have the three different examples here, the capital example, expansion example, and the tech entrepreneur example. Both the capital and the expansion fell under the connective category and our tech entrepreneur sample fell under creative. And then we also have, and this was added during that process when we went back and forth between ADP and council, there was a suggestion to add in other categories. So we added another category and the expansion example received additional A points because their secondary makes was aviation. So they received it for that. And then our tech entrepreneur sample received additional points for their hub and spoke offshoot companies. The next is the priority considerations. This is the first half of the priority considerations. And you can see the capital example, the expansion example, and the tech example again. The capital and expansion generates more utilities. It's a large capital investment, more jobs, more space than the tech entrepreneur sample. The next item encourages new business markets, suppliers, and entrepreneurship. Our entrepreneur tech grants scored highest in this area. Sustainable practice, our capital example, they had a goal to be compostable and recyclable by 2025, as well as reducing their waste by 15%. So we gave them additional considerations there. And then increases high wage jobs. You can see the entrepreneur tech samples scored highest in this category because their overall average wage was $68,000 and then the incentivized average was $70,000. The priority considerations continue. You'll see here we have the encouraging knowledge based jobs. Again, the tech entrepreneur sample scored highest in this category. Spring infill development, redevelopment, our expansion sample scored highest in this category since they moved into a new building that was larger and vacant for over two years. Encouraging a living wage. Again, the tech entrepreneur sample scored highest in this category. And then other considerations. Our expansion and our tech entrepreneur sample received additional considerations for retention and expansion. And our other consideration, capital, was for their different investments in the community. Before we move on, I just wanted to show this table. It was in your backup as well. This is the living wage table that we added to the policies the last two years. The council requested that we add a living wage component. So I brought three different things to this board at that time. So we looked at housing, the department housing and urban development income limits. We looked at this calculation for the living wage, MIT from Michigan. And also we looked at Texas workforce income limits as well. And this is the one that this board recommended to the council and we've chosen for that economy. Finally, we have our public benefit factors. This includes expanding the tax base, fiscal and economic impacts. You can see the capital example scored better on expanding the tax base as well as the expansion sample because there's significant investment in a new and expanded facility. The fiscal and economic impacts all scored pretty well. The tech sample scored well in the jobs and the additional multipliers that benefited from that. Community investment all scored well in this category. The tech entrepreneur sample continues its involvement with Stoke and they also mentor and offer internships for UNT students. The expansion sample works with our ATC, Advanced Technology Center at DISD. And then community investment with the capital sample, they have a Kids Smart program with our large capital investment. And they also contribute to food banks. And then we didn't have any other special considerations in the public benefits. So you could see how these particular projects scored. The capital sample scored the best in the excellent category and the expansion and tech entrepreneur goals scored in the acceptable category. And all these items are taken from our policy. It's just a method in which we always look for conformance, but it's a method in which we can evaluate it. This is a first time because a number of you haven't been here. There's about three of you who were here during that process. But it allows us to go back and look at it versus the regular conformance that we did prior. And this was also brought up when we presented the strategic plan. It was a council request to do the evaluation. At that time we had four or five considerations we were looking at when the strategic plan was adopted. And so I'm happy to entertain questions. Any questions for Erica? I have one. Back on the living wage graph that you put up chart, how do we as a city track, I know that the demographics are, you know, having the census and all that stuff, how do we track as a city where we are, you know, relative to the demographics of our community, the trend that we're looking, we're seeing relative to wages and wage growth, things like that. We keep up with that very well. We have a software. We used to use MC. Now we use Job CQ. So the software allows us to get down to the city level for most things. A few things you have to use approximation of zip codes. But any type of published data, the lowest you can get is the MSA. So we use that and we utilize that frequently to compare them as well. And then to get our average wage because in order to meet the threshold for high wage jobs, you have to have 65,000 or more to be the average wage or weighted average and or 25% making 75,000 or more. Our prospects will request certain job codes that we will look up and provide what the average wage is. It also gives us a location quotient. So it will tell us where we stand compared to the national average. So if we are one or higher, then we have a higher concentration, equal or higher concentration than the national average. Does the fact that we have all these college kids in our community, does that distort those numbers in any way relative to they're part of that, you know, study or demographic? It does somewhat. And there's definitely an influx and you'll see changes in the summer and you'll see it with unemployment, too. There have been a few studies that the census has done that looked at the group quarters and looked how they've done that, but they only do it every so many years. But we still perform pretty well and we also use comps with Waco and San Marcos, because they're University townships. How is this used to evaluate on your actual overall matrix? The reason I'm asking is just doing some math in my head. That's $62 an hour versus $125,000 a year. It's $65,000 a year. So if you divide it by 2008, you can get the hourly. When you convert hourly to salary, you divide by 2008 and you multiply by 2008. So this is done in hourly. So if you multiply these by 2008, you get the salary, the annual salary versus the hourly salary. Any other questions or thoughts for Eric? Thank you. Next up, we have item A, number EDP 24-031, receive a report, hold a discussion, make a recommendation to the City Council regarding the City of Dixie's policies for incentives. The Chair recognizes staff who's in this item, Erica Sullivan. Again, Erica Sullivan, Economic Development Program Administrator for the City, and I'll be giving a presentation on our incentive policies. So we began with a history, we're going to discuss some tax abatement considerations, and then we'll look at the proposed changes. We're not making significant changes to policy since it was a complete rewrite on the last day. So our policy history, again, first tax abatement policy in 1989, we added green incentives in 2010 and 2012. Once you implement something, you realize you missed something, so we added green incentives in 2012. The policy was broadened in 2014 to include Chapter 380 of the Public Government Code, which allows us to make cash grants and loans. Retail was addressed, some of our sales and use tax for construction definitions were added to the policy in '18. In 2020, we held off on making any updates other than the Census updated maps, since we were working on our new strategic plan. So our strategic plan was adopted in February of 2021. We have our five guiding principles that provide the framework for economic development, core resiliency, future-focused, inclusive growth, entrepreneurial spirit, and cultural vitality. And then we also have the three major goals that our programs are aligned to, accelerate recovery, foster growth, and strengthen communication. So Chapter 312 of the tax code requires that we update our guidelines on policy for tax abatement every two years. It's effective four or two years after adoption. If we want to amend it during that two years, we need a superintendant vote. If everybody must hold a public hearing before we adopt them, Denton County chooses not to participate in Chapter 380-1, so we typically do a tax payment. We want the county to produce pay. And that's just the county equivalent to Chapter 380. So we work with the county to facilitate any incentive where an incentive applicant will be seeking an incentive from the city. So those are just some of the considerations. So the proposed changes to the policy. Since we adopted the policy, the city has changed our city values. So you'll see that the items that have changed are in green here. Conclusion, quality service, and fiscal responsibility stay the same. So some of the changes that we're proposing here. After you implement a policy, you realize that those are the things you need to change. So we've received feedback and also staff input into the proposed changes. One of them is realigning what we had as the priority considerations and our community benefits into our strategic growth areas. So again, that's our priority targeted areas. So we also updated the evaluation matrix to match that. So you have three categories. Now we have the four SGA's and then an economic and fiscal impact section. And then we incorporated possible underwriting into the policy. As we utilize that for the fine arts theater and might be using in the future, we want to make applicants aware that that might be part of the process. And then again, update to the census maps that we do over two years. So again, our strategic growth areas are connected, creative, sustainable, and competitive. And we again organized all of the considerations under these areas. So here's our new matrix. So you have the old and the new matrix that you can compare at your table. The major factors didn't change. Where there is a change, I will note it in greens. We're going to go over each section individually again. So we'll begin with our SGA targets. So this is our targeted industry sectors in our former policy. Again, this is now our strategic growth areas. The change that we added here was adding the NAICS. I would put it off to the side because this is an Excel document. Now I can add it here where everyone can see it. So it might be semiconductors or manufacturing or whatever. We will have the industry number there and then the description. And all of these categories include other. I just didn't include it here because some of the tables would not fit. This one, for example. So again, we have economic and fiscal impacts now all in one category. One of the changes that we did make is expanding the tax base and economic impact were grouped together. They were separate prior. That was the only major change to this section. Next we have connective. So in implementing this particular project, we made a change in on focusing on electric as we have our own municipal electric utility and we have our EGR economic growth rider where we can offer an incentive working with DME in our demand bill. So it can reduce their payments at 50% over a five-year period, decreasing 40, 30, 20. And again, there's another consideration for all of these. I did change the other from 10 points to five points since we have more categories now and we didn't want to inflate the point structure. Next is creative. There were no changes to creative and the items that fall under it are community investment, encouraging new business, market suppliers, and entrepreneurship and childcare assistance. Next we have sustainable. So engaging in sustainable practices for infill development, redevelopment, and competitive. So our headquarters and then use of local infrastructure. And then our total point structure. So our total point structure went from maxing out at 175 now to 155. So this board has a couple of options. They can recommend the staff proposed changes that we have here or the board can make a recommendation to include exclude other items in their recommendations. Any questions? A lot of stuff there. You know, first I want to say what I really like about this rubric that it's half actually, more than half just a straight up economic analysis. But that, you know, you can get likely all the way there just on project economics, the city strategy. And the rest, you know, is organized to reflect the city's adopted economic development strategy in those areas. I think that feels very, very untargeted. I'm a little unclear about exactly what kinds to give on this point that they're making. If you've got, for example, let's say a movie studio wants to come in here, pretty clearly, like, created, right? We tap resources for community. But because, you know, it might not fall under, whether or not they have child care assistance or these other very important things that we like and want to keep credit for, you know, maybe the most they could score under created would be five points because it would be other. You know what I'm saying? There's not a way for an overwhelming on-target, you know, on strategy thing to score as much as it maybe ought to in that area. They would give points under the creative category in the SGA. So they don't get 10 points there. And it is in our SGA because council specifically added creative. Oh, okay. I guess kind of the false point. One thing I would look at, maybe getting back to total compensation and living wage, depending on the business, I'm just talking about Peterville. We don't offer a child care voucher, for example, but we offer a very premium wage. So could that be like basically a total compensation versus because I offer more than a wage voucher plus the premium wage, but that's going to show up for me as just 110 points in the category. Does that make sense? Yes. And one of the things that I haven't noted is in the application when we have a separate tab, it's an Excel document and we have the applicants actually, they don't point structure, but they check the box. So if you check a box that tells me that you have that, I'm going to ask you for the documentation that goes along with that. I agree. But if I say the living wage is $20 an hour, just for a number, and child care is worth $10 an hour in real value, and I offer my employees $40 an hour, I'm actually offering more. Does that make sense? Mm-hmm. And we look at all sorts of things. In the way this matrix is set up though, you could miss that. So I guess maybe another way of looking at it is total compensation, total value that you're giving for your employees. Does that make sense? Yes. And we do look at other things like some have -- Because we also offer 50% tuition reimbursement. I mean there's all sorts of things -- I mean there's all sorts of other things, so it might be one of those things where instead of being very specific about those things, I understand why they're there. They should maybe have that plus a value that that's worse. So that when you look at -- roll it up to total employee compensation, you can -- because a lot of your big employers that I'm thinking you want to attract are going to give people the choice of how to spend their money as a strategy versus paying someone lower and then giving them a voucher. Does that make sense? Whenever we have anyone complete our application, we do ask them, "Does this include benefits? And if so, what are your benefits?" So it does factor in to that as well as a tuition reimbursement and those different types of things. We actually haven't had anyone come forward with a child care system. Part of the issues with that, I think, is the liability of that. Oh yeah, for sure. That's what -- I think you've got to look at all those things that you're pushing out, though, and my point is as a value. So like if annualized child care is either I have an on-site child care center or I pay my employees $15,000 more a year than everybody else, those are really the same thing. That's what I'm kind of getting at. We had to pick a threshold and we picked a weighted average of $65,000 or more. That makes sense. 25% making $75,000. You're going to have companies coming here that have different policies that really address the need and you're going to, based on how we evaluate them, if you don't go to the total compensation at some point, you're not potentially giving credit to premium employers that are going to actually be a better tax base for them, if that makes sense, for both the people with more expendable income living here and the company itself investing more money in the business. So it's just something you've got to be careful with with these matrices is you're not artificially because we do the same thing. This is the reason I'm bringing it up. It's not criticism as much as advice. It's like you have to, at some point, put everything into the same term and the easiest thing for everyone to understand is money. So child care for a year is worth this much money. So if I give a voucher, it's worth $10,000 or if I pay $75,000, that's the same. Right. Maybe there ought to be an aspect in the total amount of compensation that if they go over that $65,000 or whatever, that it credits some of the other things so that we don't forget it. Well, that gets kind of on getting that when you're evaluating those things, you have to make sure you're kind of not. I agree, but yeah, it ought to be figured out. I agree with that, too, because you got 401k matching, you got all these other things that are great long-term benefits for the employees, and we have to take that because we fight that all the time in our business, right? Somebody's making no money or this, but what are they paying part of health insurance? What are they paying all that? All those things matter for quality of life, and I think it's really important that we look at a total compact package. And when we make offers to people to hire them, we show a total compact package. That's part of our deal, so I think it's really important. I think in Paul's comments, I think it was about if somebody scores, if there's meeting the criteria, just meeting it, and then there's vastly exceeding it. So how do you, that's what we're seeing, how do you knowledge if somebody's vastly exceeding it, where it may be worth an extra look, just other than the 10 points you gave them? Well, some is the other. We have another category in each of these categories, so you can put individual things in there. I think we actually had this discussion when we first developed this. I mean, this was part of the discussion on comp when however many years ago it was we put this together. Erica would, and I agree completely with Brian's comments, but back to the childcare assistance, it says vouchers or other financial assistance. And I would hope that we would be able to interpret what Brian was saying when companies are really paying above market. You know, that other financial assistance could in essence, you know, be considered childcare or even assistive benefits that other companies aren't providing. It gives them that point factor maybe that they wouldn't get because they don't check that exact box. We could definitely add that to that section or other benefits to the, to the childcare and then we could put IE 401(k) to issue. I think Brian's, I mean, I'm not going to speak for him. I think he's, he doesn't want a company like Peterbilt to get deemed because they maybe not don't provide childcare, but they do provide a salary that's far above maybe what an average company would bring in. So they're in essence going over and above what other companies might compensate for childcare with their just basic salary benefits. That's exactly. And it's, it's not about Peterbilt, but it's, but it's, it's, it's about making sure that we're trying to get the companies in here, incentivizing companies that are going to pay our people, have a good education. I think it's all the things you want to do is just when you do a matrix and you're putting these things side to side and give them point values. If you don't have like an overall, well, compensation for Peterbilt or whatever company X is, is this, you know, it's, it's a hundred thousand dollars all in with 401(k) block out all this stuff. This, this person is $80,000 because they offer $65,000 plus the childcare voucher. Plus the, if you don't have those things lined up to the money, they, that you can, so I just think all these things like very specific like that should be, that's worth this much money. You got to kind of put it in the money. Like 50% tuition reimbursement at UNT is this much money. Like a pension is this much money. 401(k) is this much money. I could definitely change the heading of that one to benefits package to include childcare, 401(k) tuition reimbursement, that type of thing. Or if we just do, because what happens on a lot of these things, you know, we all make these decisions and get approved, council changes, this board changes, gets down the road and well, we have to go by the letter of the law, right? Of what this document says. So, you know, even if we just attach the supporting document to say, when making these decisions, keep these things in mind, right? To these categories, just so it communicates, not just a checklist, it communicates what the thinking was behind this. Because, you know, I worked at UPS during college, they paid for my books and tuition. I made less money working at UPS, but they paid for my books and tuition and health insurance. So, I think a supplemental document could be of assistance. And this isn't code, this isn't saying it, this is just thoughts when these decisions were made. Just to help clarify people in the future to kind of know what, why. We can actually put that in the policy. Well, that's fine. I mean, it can be in the policy. That's fine. But just, and so many times it's just, okay, it doesn't check its box by interpretation down the road. We need to leave a little bit of room for whoever's making those decisions, whether it be counsel, or ourself, or whoever it is, to kind of know this is the thought. It doesn't have to be like perfectly specific, but just kind of outlines the thinking. The other comment I'd have, did the connectivity, did a lot of that get pulled up into like some of the general, the second from a strategic plan, is the only thing that's just got one thing in it? I'm just curious. There's a whole host of industry sectors that fall under Kennedy semiconductor, for example, that's one of the ones I used in there. It's just the only one on our factors of consideration. And there's some of these that could fall under a couple categories. Yeah, that's kind of what I was wondering. Some of that stuff. So you just ultimately have to pick one if you choose to do it that way. And that was one of the feedback we received was to organize it under the SGS, which made sense. It doesn't make sense. That's kind of where I was coming from. I chose creative, just to see something connected. Invariably, something's going to pop up that we didn't exactly anticipate, or where, you know, reasonable people will look and go, that is entirely on strategy being connected. You know, there ought to be a way to, you know, for the body to say, yeah, it wasn't anticipated in the checklist, but you know, we want to award all the points that are such, you know, I feel like it needs a little more room for interpretation. We do have in our policies that we can do everything on a case-by-case basis. Okay, so this is a guideline. These factors for considerations were taken from the policy as well, and these are the things that we utilize. The scoring document, we never utilize a formal scoring document prior to the last update. We did have factors for considerations less, mind you, and they would increase the incentive award by five percent in abatement or rebate, limit five. That's what we had prior, so. This actually allows us more leeway than that. It was an actual formula where if you wanted to give them more, you really kind of were stuck and you were limited by. Any other thoughts or comments or questions? I do want to understand what is our goal to affect these areas or to have the opportunity affect these areas, right? So for example, per diem, right, you get paid X amount per day. I can eat at McDonald's every day and bank that, you know, whatever, 20 bucks, or I can go someplace and max that out or exceed that, right? But I don't think the city cares, right, if how I manage that money. So in this instance, if I'm getting child care money, is our goal to make sure they spend that money or, you know, or they can just say, hey, this is going to cover my partner's income and they'll just stay home. We're not going to spend all the time. Do we? That's what I just need to understand. What are we trying to do? This is a way for reviewing it. These are all in our policies, so you're looking for conformance to our policies and you're justifying basically how they affect those. You do have some leeway, like the example I gave with the high capital project and the expansion project as they did a significant investment, our expansion, the larger facility, but then you have the human capital and they still scored well because of the human capital. They're investing in people, in wages, and we're detaining people here. So we do have that ability. If we want to be restrictive, what we do, we do that in the agreement phase. If we want to require that they spend it on X, then we put that in the agreement phase. So like, for example, the expansion project, we tell you exactly for the entrepreneur tech what you can expend that money on. It's not just anything. It has specific items that are eligible. But using the discussion we had about from at the individual employee level, if they're making $100,000 and that's above, we don't, we're not prescriptive to say, okay, well, we want, you have to require them to go invest in a child carried to see in the city and all those things, right? So you could, that could just be, that's just, you get points there, but you don't have to spend it there. We don't require you to donate to the United Way. Right. No, we don't put those in the agreement. Right. It's a consideration when making the recommendation. Right. Okay. My concern was more around someone who pays more money to say, we're all used to zero out of a hundred because we all went to school like with ABCD. So I know this is 125, but just, so someone who pays a hundred thousand dollars a year might get a 90 and someone who pays $60,000 a year, but then gives a $10,000 voucher to child care might get a hundred just based on how the matrix is. That was my concern. Yeah. I'm very careful about the matrix. Yeah. And I think that's, that's a great example. And that's where I just kind of wanted to understand how we evaluate that. Right. Because it nets out on here. It nets out the same, but as a pop for me, I think, right. If it points wise, right. If I give you points, if you, oh, if you pay a higher salary, but don't give the credits and, but I give you those points, the points are even. You just have to know that. Right. So how you write your matrix is important. Right. So then beyond that, how do we, do we want to differentiate? Do we want to, do we value vouchers or salary more, right? Just as a policy, right? If I'm reading this and I understand that one employer pays more and so that's cash in your pocket that you can do whatever with, do I, let's say it's round numbers, $10,000. So do I look at that $10,000 and I say it's a $10,000 worth of a childcare credit and I assign that what value and then $10,000 on your check, I assign that what value and does this group weigh those things? Cause I would opt for the latter 10,000 on your check and you can do whatever you need to do with it is a higher value. I think if we're bringing that in the community, if there's a tie, that's a tie breaker for me, but that's just my personal. We recently had a site visit from a prospect from Europe and they were thinking about offering what they do in Europe is a cafeteria where the meals are paid for, for employees. So it varies and that, that's an example of something we don't typically see here, but we may see here in the future. Yeah. Yeah. No. So I just always think whatever it is, it's flexibility versus a credit for a single thing. Like if I'm, it's either, if I'm going to give a gift, I'm going to give a Visa credit card because it's accepted wherever Visa is accepted versus a Bed Bath Beyond, you know, gift card because you can only go to Bed Bath Beyond. So same thing. Whatever gives the most flexibility, I think just for what it's worth from a policy evaluation perspective, I think that should be more valuable because it has more flexibility. Your kids may not start to go to school and now you still have that value though. For those of you who weren't here when this board made the recommendation, remember we looked at HUD, we looked at workforce and we looked at the MIT. MIT was the only one that addressed living wage. The rest were like thresholds. So income limits. But I guess Erica, just to summarize what you're saying is from a staff perspective, this is kind of a roadmap, it's got flexibility to it. And you guys can interpret some of the, you know, the dynamics of different companies with Peterbilt or a company that doesn't pay, that pays less, but adds chocolate. You guys can interpret that and make that recommendation when this becomes, when this comes into play. Yes. So CFO, if you see numbers, you got to add them up. So we would have 20, 25, 30, 50. We could check those numbers. 50. I did have 55 points at one point and did change it so that might be, we've had it changed to a total circle. But we'll check that before we make that recommendation. CFO, when you see numbers, you might want to start getting a rash. I did have them on the side of the cell document to add them up, but I did make one change, so I would guess it was the... You probably did that in your head too, right? Love it. Yeah, we changed the other from 10 to 5 since we had more categories, and this probably worked better. Other comments. Would you mind putting back up the options that we have? Sure. From a motion perspective? So we have two options here. With the board can recommend the proposed changes to the economic developments in policy city. The board can make a recommendation to include items, some of those we talked about, exclude items, provide other direction concerning the policy than the board recommendations in the council. So I would ask before to, if someone would want to make a motion relative to one of those. I can make a motion recommending two, with some form of having things that can be expressed in a monetary value. I think how to phrase this properly, get that value when considering so that you can figure out a total compensation when talking about employees and living wage. Everything else, I'm on board with. Question? Offer an amendment. Haven't you heard anybody that go, "Yeah, I totally agree with Paul so far, but let's find out." Remember to what has already been proposed, totally fine. That there also be an option for the board to give points within the strategic, the four strategic categories for attributes not yet anticipated. Just to say a little bit more about, just to use the example connected. Let's imagine somebody is going to come in and add some incredible new capacity to the airport. That will clearly improve our connectivity with other communities. Because the only thing other than five points for other that's in there is generating new utility customers. There's nothing that's even sort of bang on about connectivity in that category right now. I do believe that if we had the flexibility to just say, we're going to award points for connectivity, I think this might configure that out. So, can we restate it? I have an option for board to give points and I have parentheses in the strategic growth areas for attributes not yet anticipated. "Brian, are you good with that amendment?" "Oh, yeah." "Do we not have that flexibility under every category with other maximum five points?" "Well, the maximum five points is really bad." "So, we've got only five more points." "Yeah, but if you've got something that's bang on, there's 100% for connectivity but because it's not about utilities, the most you could do is five. That strikes me as wrong." "To maybe put it in a policy, I agree with what you're saying. Could you just give this board a general category that says strategic and you don't get into the knit of what bucket and just give it a 15 point?" "Well, I'm happy with..." "I think that does the same thing." "Not exactly for me. I'm very supportive of the fact that have been consulted, Council waited and adopted these four strategic directions. So, I'm very bullish on the idea of this body saying this opportunity fits or doesn't fit these four strategic directions that we're seeing want us to go after. So, I'm working with myself. I'm working within the framework of those four strategic directions. I just want us to have flexibility within those." "So, maybe a different way than when you did that. Was any one of these categories more important than other categories? The reason I'm asking that is..." "I notice they have different point values." "They have different point values. So, if you just said every one of these was worth 30, which looks like it's close, and the total number goes up, then you effectively do the same thing." "Rint was saying this. Wait, both examples, you get both. You could do other on all five, all categories, and you get up 25 points, because you could say it's going to have that, but that doesn't mean it's going to have 50. I think each..." "Oh, if you could just find a bunch of places to put it." "Yeah, we have to get each five, each other under all of the other categories within them, because you could trick those all into it. That's what he was trying to do. You have access to 25 points, I think, what he was trying to say, and you could try to do that, which is what you're saying, which is creating another category that's just as strategic that you weigh in on. That's not what the other one does, but you can pull that out." "I'll see if I can get a second, because..." "We have a motion by Ryan, we have a second, and we have an amendment by Paul that needs a second to move forward. We have a second from the floor for Paul's amendment." "I guess I'm just not real clear on what the amendment is." "That within the four strategic categories that exist, and that's important to me, that it's within the four categories, not just general and strategic. It conforms with the strategy. Within each of the four strategic categories, that this body would have the ability to attribute points up to the full value of each of those four." "I'm not against that at all. It's just how do we put some framework around that, because I think it needs to be as pretty open as possible, because we're competing against all these other cities. We don't want to restrict. We want this to move forward if it comes before us. We want to have as much flexibility as we can have in making these recommendations. I think by that, you said earlier that this is just a guidance form. We can make whatever decision we need, but it helps. I'm open, for me personally, of having as much flexibility in this thing as we can have, because I've sat in these meetings and made decisions on, "Okay, are we doing this deal? Gosh, does it fit here? Does it fit here?" I think going forward, it gets complicated. I'm open to making this more flexible, because at the end of the day, we're going to make a recommendation to council, and this is just a guiding document." Lee, I like your idea of the explanation statement that goes with it, so maybe there's a way to marry those two to say, "Within the four accepted strategic pillars, the body can assign values as it comes up with an explanation, with a Lee Ramsey document attached." Just whatever the discussion was around it and why we did it, because there could be good debate in these meetings about how do we get there, and that's going to go to a summary to council, which is going to ultimately make decisions. So maybe just a supplementary document explaining, say, "The board can have some flexibility of where it puts these as it sees fits, if it's not specifically defined," or something like that. Put it that way, I'm in favor of that. That way, it gives this board some room to move. I think that achieves your goal, correct? Yeah, yeah. Yeah, that's a problem I have. My understanding is we have to communicate to everyone the same, right? So you get this nebulous, points can be attributed, how many points? It's hard for me to even lock in on, even if you call these the pillars, economic and fiscal impacts. That is, to nail that down to something specific is near impossible, right? It is everything. So I do agree with Rick. The points are available there. It's clearly communicated to everyone, "Here's the maximum amount of points you get for these categories. If you maximize the others, you get these extra 25 points." And then to your point, there's some narratives that can be added there to kind of, "Hey, here's why we're forwarding it." But I just think when you start sequestering the number of points that aren't prescribed for something that may happen, I don't know how you communicate that equally to everyone, right? And so that everyone- And the case-by-case basis addresses that as well. Right, yeah, yeah. So I think we have, all the tools are here to Lee's point to give us the flexibility we need to maximize, because every project's going to touch on these. I mean, define creative, right? It's like you can't nail something down to these categories. I just don't believe. We try to make things apples to apples as much as we can. We do 10-year analysis despite terms. You see when it falls off and the city receives 100%. We have our return on investment report, net revenue report, that we try to track that. We can try to put them as apples to apples to every product that you need. And you need that flexibility if you're going to be competitive, too, to Lee's point. So I'll second the motion with a little summary statement, you know, that this is our guideline. And like I said before we started this part of the debate, some explanations of our thoughts with our approval of how the board got there, when it goes to council. I'm seconding his motion, but with Brian, I mean, I guess there's not really a second. We just have our conversation. Brian, why don't you remake your motion? My motion was purely around putting a monetary value to things that can be monetized. Obviously, you can't monetize creativity, but you can monetize tuition reimbursement. You can monetize child care voucher. There's certain things that are specifically on here that you can give a monetary value to, so that when you look at an employer or an employee, you can kind of see, this is total compensation that this employer offers. That was mine. How about this? I'll draw my motion and I'll let Lee say whatever he wants to say that he thinks is missing. I'll second that. With that, we submit a document with this, kind of our thoughts of what our goals are in economics. And those being, to Brian's point, and I don't know how everybody says we can't do this, but to Brian's point saying, you know, whether it be financial or whether it be creative or however this board needs to fit those in those buckets, we can do. I don't know if we can do that or not. A summary document of some kind. So just the flexibility to categorize the money? Not how we want. So what I'm trying to get to, guys, and maybe somebody else has got a recommendation, is I don't want to corner ourselves in to, if it doesn't check this box, and maybe by having the other consideration, that gets us there, maybe already. So maybe we're okay with where we're at. I think Brian's supplemental motion includes what he's recommended, gets us there. Okay. I just think it kind of broadens our ability to interpret things maybe better. So I think his, I would agree with his motion as well. Paul, you have your draw. I withdrew my amendment. Just, I got it said. You know, wherever you want to go with that. Second motion. Would that be a new category that you're suggesting? No. It would be within the categories that already exist and you could, at the end of the day, roll that up so that you have an apples to apples compensation for employees and calculation of tax base revenue, whatever. I just want to make sure staff is getting it all down. I was going to ask, when there was a final motion, I was going to clarify, because what I have in my notes is amending the child care to a benefit package, which could include all the things that we discussed here and others not. It needs to have a, it needs to have a value. I'm not, I think you're right. It's probably salary and benefits package. Salary has a value. Benefit package has a value and that's total compensation. Because if you just look at hourly wage or if you just look at child care voucher, this is an example, you're not getting the total compensation that that employee is providing and it's really not probably making the best decision for them. Who's to say it has to be child care? We've got a lot of people working in the plants right now. They have a dog that they have to take care of. So are you suggesting that the whole child care package is child care? It can still be to creative. It's fine. Well, I mean it's, I mean, what I'm hearing in the Vanoff's comments is a desire to compare the value of total compensation, whatever the components are, salary or cafeteria or some way to put them all under the common metric of dollars. Will you staff and do that and then you can address it like you do a case by case, cases where they can cross, these categories can cross. Just like some categories they fall, NAICS fall in different categories, some of these benefits are going to cross. If I change the child care assistance category to other benefits, then that gives you the ability to award the maximum number of points based on the benefits, all of the benefits offered, not just the child care. And we can certainly do that. I don't mean to be teased. This goes to City Council. If there is a specific desire from council that have child care, I mean, understand that, right? There might be, you could put I.E. child care or 1K, attention. Adult care, adult care, whatever. That's what I'm trying to categorize it. So we have employers who are paying total compensation for their employees, we're getting the best employers here, based on total compensation. Not very specific. It happens all the time in tech, right? You hear about these guys in San Francisco, they go give you a ping pong table and they'll lay you off. Okay, well I'd rather have a pension. It's safe to say your motion is to change the child care section to a general benefit section. Yes. That also includes total compensation above just the wage. You have wage and you have total benefit. Yes. So I'm going to try to communicate what I think I heard. Erica, so under the child care assistance under creative, we're going to change the definition of that to total compensation or some other descriptive compensation terminology. Yes, please. Which would include. It's your benefit side here. So you have a salary side and you have a benefit side. Okay. And they just happen to call a very specific one. Can we get a second again to that motion? Now that's good. I'll save it. We have a second, Lee. Okay. Any other discussion? So once again, I think we understand what we're voting all in favor. Any opposed? The ayes have it. The motion passes. Thank you, Erica. Thank you. You always do. That's what we're here for. I really thank you guys. We have discussed possibly moving forward with an incentive study to measure our competitiveness with other cities. We know that we have sales, tax and property tax rebates center programs, but are we getting ROI on those incentives? So I just want to let you know that's going to be on the radar. We may be coming to the end of your future with that. And hopefully before we adjourn today, I would love to give us a little overview of herself, our new team member. I got to meet her yesterday. I had a great conversation. I'm very impressed. So hopefully we'll have some time for you to share that with the rest of the board today. Okay. Item A, number EDP 24-033. Receive a report, hold a discussion regarding Atlas Energy utility update. The chair recognizes John. There you go. Thank you, John, for coming. My pleasure. Any chance I could move this around the way where I can see that presentation here? You can turn on the mic. I probably don't need a mic. Can everyone hear me? Yeah, you can see. All right. First off, thank you for inviting us out today to share a little information about Atlas Energy and the service we provide here in Denton. I'd like to start off, share a little bit about Atlas Energy and then break it down further into this specific division. At Atlas Energy, we have about seven divisions within the company and we're across eight states. In this area, in Texas, we have three divisions. We have a West Texas division, kind of like the Lubbock and Morello area. Then we have a pipeline division, our Atlas Pipeline Texas, which is focused on bringing gas to the Metroplex to serve the human-need customers. And then we have our Mid-Tex division, which is what's here in Denton. That's the distribution line you see in your city right of ways. That being said, we're going to focus today on the distribution business. And Atlas Energy's Mid-Tex division is a fully regulated local distribution public utility. It provides distribution service to approximately 1.8 million customers in our service area. That's 1.8 million here in the Mid-Tex division. Our Mid-Tex division, here's some information. The top half is a corporate piece of all the divisions put together. The bottom half is here in the Dent area, the Mid-Tex division. We have about 32,000 miles of pipeline in our Mid-Tex division. And as we go further, customer count, we have roughly about 23,000 customers. As you can see, about 20,000 of those are residential, about 2,300 commercial customers, and about 14 industrial customers. Next, we're going to talk just a little bit about an overview of the services we provide. We are a regulated natural gas distribution utility, meaning we take natural gas from supplier pipelines and deliver it to gas to customers at their homes and businesses. Next, throughout here, we're going to talk about some terminology to help everybody familiarize yourself. There may be some words I use or some terms I use that are industry knowledge, but the general public may not fully understand. One of those terms is human needs customers. As a regulated distribution utility, our system was created and is designed to provide service to human needs customers, which in Texas is defined as residences, hospitals, water, wastewater facilities, police, fire, military, civil defense facilities, and locations where people congregate in an emergency, such as schools and places of worship. We are required by regulation to prioritize service first to those customers. Some of the customer categories we have, we have residential customers, we have commercial sales customers, industrial sales customers, interruptible transportation customers, and then special contract customers. Industrial sales customers are customers' small industrial operations who have less than 200 MMBTU per day of usage. MMBTU is how gas is measured for small industrial customers. Atmos Energy purchases gas and sells it to those customers in a manner similar to residential and commercial customers. In return, the industrial customers pay a rate per MMBTU for the gas that is commensurate with this level of service. The next category is interruptible transportation customers. For industrial customers who do not meet the requirements of an industrial sales, the interruptible transportation agreement service means that Atmos Energy charges those customers for the use of Atmos Energy's pipeline to transport gas from a third-party supplier to the customer. To receive this service, Atmos Energy industrial customers enter into a negotiated contract that reflects the approved rate and terms, a rate that is lower than the rate for sales service. The customer agrees to receive interruptible service. Now some terminologies in an interruptible service contract, plant protection. The customer can include in that contract an appropriate level of plant protection, which in Texas means a minimum natural gas required to prevent physical harm and/or ensure critical safety to the plant facilities, to plant personnel, and to the public when such protection cannot be achieved through the use of an alternative fuel. The end result is an agreement that gives Atmos Energy the option to interrupt the service in a manner that limits the customer's usage to the level of plant protection reflected in the agreement. Part of the transportation contract includes backup fuel. Backup fuel. Some transportation agreements require the customer to have an alternative fuel source. Backup fuel. All customers are encouraged to have alternatives to Atmos Energy's transportation service to reflect the level of assurance the energy will be available to meet the customer's needs in the rare event Atmos Energy's transportation service is interrupted. Some customers choose to have onsite backup generation that is powered by fuel stored onsite such as diesel or propane. Other plans for direct use of fuel source stored onsite, which also could include fuel oil or potentially compressed natural gas or liquefied natural gas. Some customers choose to connect to another natural gas pipeline so that they have dual feeds for natural gas service to their facility. So during periods of extreme weather events is what we're going to talk about next. When we experience forecasted extreme and prolonged cold subzero temperatures we provide notice to our industrial customers with interruptible contracts to reduce their usage and to contract plant protection if they have that in their contract levels that protect and preserve reliable service to our human needs customers throughout the duration of the event and we touched on human needs customers early in the presentation. If a forecasted extreme weather event occurs Atmos Energy provides notice to our interruptible customers giving as much notice as possible consistent with the terms of the transportation agreement they entered into with Atmos Energy. If an industrial customer has contracted for plant protection they're allowed to use the agreed upon MCF and that's how large industrial gases measure its MCF. The MCF of natural gas per day for plant protection means only. If interruption is noticed they are asked to finish all work in progress and limit all gas utilization beyond the plant protection allowance prior to beginning the interruption period. During the interruption period we continuously monitor the weather forecast actual expected demand as well as system conditions and performance. We lift the interruption as soon as the operating information available to us confirms that the system will have the capability to meet all potential interruptible demand based on system performance. Everything we do is primarily based and driven by our vision to be the safest provider of natural gas. To put this information regarding interruption in context the reliability of the system is over 99 percent reliable for human needs customers. And with that that's the end of the presentation and I'm happy to entertain any questions comments thoughts y'all may have. What is your uh without getting political or you know getting into to unusual conversations what's your thoughts on the issue the future of natural gas I mean between Marcellus and Texas now and I guess Wyoming we theoretically have one of the largest uh we have the largest gas fields in the world now in three or I've heard three to four hundred years of supply what's what's that look like from your your side from our from our perspective it's a great resource to utilize it's clean affordable and it's abundant I mean you have all three of those and it's in our backyard here I mean it's a great it's a great resource um Texas is a great market you know there's other parts of the country you may see something a little different but here in Texas people love their natural gas people don't want to lose their natural gas stoves that you've heard in other parts of the country meaning the restaurant industry they love cooking with natural gas so my job is easy in Texas. How much gas are you shipping overseas? um that's outside the scope of what we do so I would have no idea John maybe uh so one of the concerns we had up here I've talked to Jeff we've talked to your president but um is we know that Denton is in this whole region is growing and even we brought this up with him it's not that we got interrupted this time it's that we know what category we're in as a customer someone like Peterbilt we can do exactly like you said we can invest three million dollars and get a pipe or an extra well or whatever right to a custom to uh make sure we don't have issues in the future as far as bring our employees to work when you know schools are working and other things I know I know we've talked through this Ignatian but as we're growing as a community as area the concern is more not Peterbilt it's how do we make sure that we have the infrastructure to bring other big customers in here that are in that transportation category and what does the city and the edp need to know to help advocate for even to say okay if I have another customer that's say an Acme Brick or a Peterbilt or wants to be a steel foundry or wants to something that takes a lot of energy right how are they going to feel good coming in here or we're trying to track those businesses to say you can expect this level of service even though there's this much growth all these other things or hey you can expect this level of service so by the way if you use this much energy you need to have a backup because that's that's I think where we all need to kind of level set right and as you can see from the slide we've invested over 15 billion dollars in growing the system and modernizing the system to accommodate the growth across our territory your specific question my best answer would be to work hand in hand with our industrial account managers because every situation as you're doing business development as you know each is unique their location where they are how close they are to pipelines what the availability is what the cost implications are so if they're visiting with our industrial account managers they should have all that information available when they're looking to come to this area and I just other thing is Peterbilt's Peterbilt we've never said that we want to be ahead of people but you and I understand what a transportation company is a lot of people don't and I'll say this and the and the optics of turning off a hospital even though I know their transportation companies too it ought to be just maybe something you consider in the future like because I know both the hospitals got turned off as well but I also know their transportation customers and they have transportation contracts so it's just something from a PR perspective maybe y'all ought to think about as far as when you do prioritize customers because that's the thing that also got us really kind of agitated before you get into the details right but a headline is going to be a headline people like people aren't going to read the fine print right okay Peterbilt's fine I would just suggest that that's that that to me was what caused a lot of this consternation I would agree that our communication our transport customers even some of the transport customers that contract doesn't make its way all the way through the business so the local person that signed it may have understood the contract or thought they understood the contract it may not have made it to their legal department the risk management department or other departments so part of it is us educating folks when they sign those contracts about what all the terms mean I mean I thought after winter storm yuri there would be a huge push for plant protection because some contracts didn't have that that's that's we're working with customers now to really explain what plant protection means and why it's valuable I know a lot of people look at it as an insurance policy but there's a reason it's available the other piece is just educating you know the public they hear an interruption in service the average individual doesn't know what that means you know so being able to get out ahead of it and we notify the customers multiple days ahead of time but the general public when someone's sitting at home or my employers tell me I can't work today they don't understand why and that that's kind of you know unfortunately behind the eight ball a little bit but that's that's what we're doing now is trying to get out there and be better communicators when it comes to a situation like that and like I said since 2011 we've had four interruptions in service two that have affected this area total was about six days so if you look at it that's over a 99 percent reliability and our biggest issue honestly when it comes to reliability is third-party damage our pipelines get damaged from contractors excavators and we can't guarantee service if the line is cut in half by a contractor so even if I told you today I'd love to give you a hundred percent reliable service it's just not realistic I think the concern that we had beyond the Peterfield specific concern was two of those interruptions happened in the last two years and we also know that's with the growth in the area right of north Texas are we putting in does Denton have the right size gate right for distribution that that's the kind of stuff and and to me as a board like Peterbilt's face don't worry about people I mean we're upset but we know what we need like are we set up for natural gas distribution and our growth right it's the same question that we have with water right right it's the same question and roadways too yeah exactly so what do we need to do if anything to make sure that we understand the implications as we're doing our job to natural gas or the distribution I would tell you a lot of it goes along we have a great system planning group that is really looking at the you know the growth in the area planning ahead running models doing all that a lot of it is coordination with the cities too you know Denton for one is doing a lot of road work which has given us an opportunity to get in there relocate lines out of the way when we're relocating we're improving that infrastructure we're putting in bigger lines more or newer lines and then also that economic development piece I mean y'all know what's coming to town better than we do being able to communicate that to us ahead of time so our system planning can take that into the models and then really incorporate it and then give us time pipelines take a while to put in the ground you know your engineering plans your construction and getting it all done so get giving us enough lead time when something is coming that we can get that in there to serve them I mean we'd love to serve every customer out there if we could so again if we had for these people how would they know hey I've got a I'm just gonna throw in a business out there because I know they use a lot either I'm saying we want this here I have a steel foundry wants to come in really interested they're gonna pay 90 grand a year per employee these guys start knowing hey this is great they have child care vouchers like how do they know that's a good idea and they can they can specifically tell that person hey you're gonna not be interrupted not or this is what you need to do to make sure you're not you're not interrupting we do have coordination meetings on the city staff side where we pull in all of those those external utilities also so when we know those things are coming that's when we're planning those we have those meetings monthly so we do we'll see that out of you when we get a package yes kind of like hey we think it's good that this this should go forward we have been pulled into those meetings when perspective people are coming looking at big industrial warehouse space or other space where we come in tell them what's available what it would take to bring in additional you know what those costs are what assets would need to be put in the ground we've had those discussions with folks that really the challenge is transportation agreements and helping the customers really understand what a transportation agreement is i mean as you know being a transportation customer the rates a lot less because we're only transporting that gas when there's space available in the pipeline but when a winter storm like like yuri for example i mean that was like a hundred year storm you don't design your infrastructure for the hundred year currents i mean it's that's just not cost effective from anyone's perspective and y'all all part of an edc really understand that better than most people i get to visit with but you know we want to do everything in our power to serve our customers at the end of the day so we're working on building a site database so that when we are pitching sites to prospects we are aware of the capabilities we utility give them for them so and that's that's my bigger concern after this incident is are we going to get ourselves in a problem that's jason's concern too about you know get some comments about should i be recommending definitely grow right because any of those conversations i want to have with atlas please just reach out to me i'll get you in touch with the right individuals to have those so they're this is a booming area you know we would love to continue to see growth up in this area do you have any interoperability agreements with other gas companies where if they have a complete catastrophe you burnish gas to them no typically the systems aren't interconnected that way we are a distribution company we do have a pipeline company that pipeline company serves other distribution companies besides our mid-text division so there are other distribution companies out there but i mean i'll say this this is denton i'm i'll share this we have a gas storage facility here in denton down off mayville that is a critical asset for denton that is our pipeline divisions we store gas in the summer there so when weather comes in we have available gas to pull in and increase the pressures in the pipeline and really that's that's a great asset you'll have in your backyard that a lot of communities don't can you go and forgive me i thought i stepped out for a second do you have a slide on what constitutes the weather that would trigger the interruption it's a combination of there's not a one one issue it's forecast it's actual weather coming in and it's our forecasted demand for our human needs customers but when i talked to you before it was made it there's a i was surprised at how low my estimation right like nice how low a threshold that was right it's it's 100 degrees for a no the lower temperature what is the lowest it has to be for a couple of days to trigger the interruption it's it's not measured that way that's not how it's looked at that's what we talked about no it's not what we talked about um what we talked about is this last weather incident typically texas weather what you see is it gets cold overnight it freezes overnight it may rain during the day freezes overnight the roads are ice in the morning things thaw out the weather gets above about 40 degrees when that weather warms up it gives us an opportunity to put gas in the pipeline that's not being sucked out immediately build the pressure back up when you had the issue back in a couple months ago you had sub zero temperatures for multiple days with it never getting above freezing that doesn't give us an opportunity to rebuild the pressures in the system and rebuild our storage facility and put gas in the ground and save gas when it's below freezing for multiple days straight people's heaters are running non-stop they're never getting a break where we can where they reduce the demand on the system does that make does that make sense the way i'm it does but i'm trying to read and listen to you there at the bottom it says uh followed by sustained period of hard freeze defined as temperatures below 28 for at least 48 hours for four hours is that that's in conjunction with i i just thought there was a number for two days if it's at a number and maybe i'm oversimplifying i i take you i take your point that that there's many variables but i i also would ask you to take my point right that if i need you in the room to explain that we're at a deficit right so i need a piece of paper that is simple for me to digest to then convey to people that are here and did right so if i'm misunderstanding fair i'll take that my challenge to you and my request to you is to give me something that makes it clear where i don't need you in every room what i would share with you is when we see anticipated weather we're following the forecast we're seeing demand on the system when we are sending out communication which we sent out to all our cities all our chambers social media when we're putting out messaging about conservation that tells you we're looking at potential for drastic conditions no so but but it's a little off track so what i'm saying is tomorrow i get called into a meeting with somebody that wants to move you there's no forecast there's no weather there's no winter or heat advisories and they ask me about the gas supply or that comes up i need to be able to articulate what those requirements are hey in texas here's the weather traditionally here's the forecast these type of months and here's where we get into areas where it gets where interruption is possible in these industries right so i it's not about how you notice when those advisories are happening it's more what are your standardized rules of where's that gray zone where's that red zone when we're going to enter that and then i can look at i don't understand texas weather just as much as anybody because no one understands it right but to understand the trends right to say okay in the summertime if the thresholds 100 degrees for three days that's a problem because we will see that right and so those are things like that what are the rules what are the bumper rails not when you're sending out warnings i get it i'm saying day in day out where are the where are the guys day in day out we're 99.98 percent i understand that too so i can tell you from that perspective there is not a hard set rule that when the weather hits 32 degrees for 4.4 minutes and 30 seconds that we're going to do an interruption in service it doesn't work that way it's what the demand on the system is it's what the forecast is what demand we're going to see tomorrow the day after we can't see that until the weather comes so it's not a i'm not trying to be difficult up here with you honestly i there is not a set temperature out there that says okay we see 40 degrees for two days we got to call an interruption that's not that's not how it works and we don't interrupt our residential the only people that are interrupted are transportation customers when there's an interruption in service and they have a transportation contract they're buying their gas from a third party and we are transporting it when there's space on our distribution system so if that space is taken up by a residential customer or human needs customer that space isn't available in the pipeline for us to transport that third party gas does that make you know all that so i would tell you you could tell a perspective human needs customer their system is almost 100 reliable certainly and and and and the customer would say okay well we make 99 of our money in this window and i'm supposed to say well i hope the weather's good that you know me like like prime day or like christmas or you know there's just there's i just i get it i guess we're trying to get it hold on i take your point i take your answer just no i don't like it because i have to communicate you know you put me in a situation where i gotta go advocate for atlas and i have no idea what i'm talking about because there's all these variables that i don't know about but it seems like and this is this is going to be this is not a fair slight to you so fair warning right recover your ears it is it's super when we have when we get our next rate increase request from atlas it is abundantly clear here's how much money we want to raise your rates and and we don't have any of these variables that go to raising your rates just flat out give us more money for our system so we can serve you well that that seems to be very easily communicated to the city and then if we don't agree we get taken to court to then get your money and so and not you the atlas but i'm saying it is frustrating and so i'm not i'm not going to belabor the point i'm not going to take over the meeting i'm just telling you i don't like the i don't think the answer has the clarity that we deserve and the next time the rape case comes up i'm going to be even more frustrated with that whole process so you and you're only showing town right so we get that from dme right i understand that i'm just telling you not plus well i would just add final comments for me that the 15 billion we've invested that's the money we're coming to ask for a rate increase so if we weren't investing that 15 billion dollars we recoup our money after we put the assets in the ground is how the gas industry works so i mean we're doing everything in our power and the customers you're talking about those customers are encouraged to have an alternative fuel source so when there is that two-day interruption out of from 2011 to today we've had two interruptions up here over a total of six days those customers have an alternative fuel source that all they have to do is kick on and they can survive for two days without an interruption in their business so um i know and i will do my best to get you better information on what you're asking for and i've tried to stop but you gotta understand also i understand your business probably better than the average bear atlas is grown by uh assuming companies not so you bought a company that invested the money and there that's monetized but and so the rate that you're saying is over 15 billion that's you investing in other you atlas investing in other companies to grow over over time come on i mean i know the history of atlas and i bought a company since txugas that i'm aware of for rate for customers so txugas was i think in 2014 if i'm correct don't quote me on that but i'm saying before that so that's i mean it's all your the 15 billion dollars is that 214 200 that's that's 2014 or beyond or is that that's in the last 10 years that 15 billion dollars and we have not acquired another company in that lab in the last 10 years every year we are investing billions of dollars in the system to keep up with the growth and keep up with the modernization of the system just like your infrastructure in the city you're spending what billions of dollars on road infrastructure improving it updating it we're doing the same thing on a daily basis and that's why you see our rate increases we we're coming in asking to recoup that money we just put back in the system okay john thank you for all that information thank you appreciate it we need you as a partner thank you anything we can do i'm gonna leave some cards that way if any of y'all need to contact me i'm happy to be available thank you thank you all again okay final item item b number edt 24-34 receive a report hold discussion requiring the quarterly stoke didn't update the chair recognizes heather gregory from stoke didn't present the file hi good afternoon um i'm holly gregory i am the owner of hickory and male adventures which operates stoke uh co-working as a public-private partnership with the city of denton and i'm going to talk about um kind of what we did in 2023 with our partnership so a little bit about oh no oh no we're making stop okay okay so a little bit about the history of stoke um july 2016 was when the city's five-year lease on the space that we're in um at the rail yards um 608 east hickory suite started so the city originally held the lease on the space um the original partnership agreement was with an organization based out of dallas the city council decided to not renew their agreement and hickory and rail adventures became the entity that entered into that management agreement with the city which was signed in november 2017 and we took over in december 2017 in june 2021 the city's five-year lease on that space um expired so at up until that point for that five years the city was paying for the rent um and help with kind of the repair facility maintenance um the city's lease expired and hickory and rail adventures negotiated a new lease with the martino group and as part of that we got 12 new offices private offices built out to take our total private offices from eight to 20 um it's just what we needed to be able to maintain the rent to take over the lease on the space and so at that point our partnership with the city shifted so that the the this board and city council kind of approves a an entrepreneur we are the entrepreneurship program for the city so we'll kind of talk about the programs and events that we do to support entrepreneurship so we are kind of economic development i call it ground up economic development a lot of it is supporting entrepreneurs um start and grow their businesses since then you know well ever since 2017 we do this kind of annual report we do monthly reporting but we come in front of this board annually and in 21 22 and 23 we've been unanimously improved by this board and city council to continue the entrepreneurship program so this is just some pictures of our space of our co-working space we have like i said just over 9 000 square feet in denton right right next to the train station so this just kind of shows some of what our dedicated desk looks like conference rooms more dedicated desk in private offices our shared kitchen facility conference room and then this is again in our co-working space um this is kind of another main one looking back at our co-working space with kitchen um this kind of spotlights some of the members that we had last year um they range from tech companies to uh bookkeepers to marketing agencies to um videography companies so they're they're creative they are um they are they're a range of people we have largely um stem businesses in our space so tech or tech-enabled companies um and this is again some of our members using the space conference rooms and events um member events that we have we do um twice a month member events and then we do special events we have a cheese party every year this is our holiday party um this is some of our member testimonials about how the access to the affordable and flexible workspace has helped the success of their business our programming helps their businesses grow and provides opportunities for them to be showcased and then just some of the benefits that it provides especially for remote workers it could really be anywhere um there in our space and they're working in a community of other people so this is kind of the high level programs and events that we do again as part of our partnership i put accelerate her up here because it isn't important and without stoke and the city's partnership we wouldn't be here probably at all and so um we want but that that specific partnership we do with texas women's university so they fund that um we kind of report to them on that but the other uh programs that in events that we do are a part of this partnership with the city so coffee and conversations is a virtual monthly mentorship call um i'm trying to show a range of things here the people that we have spotlighted as mentors um and then the marketing material that we are putting out um to so to promote the events that we are doing so these are like i said virtual group calls that um there is uh somebody from our team and a mentor on the call um that provides really valuable guidance and information for entrepreneurs then there's also peer-to-peer learning that happens to the small groups that join those monthly calls um flint comp is our annual conference for entrepreneurs we uh these are pictures uh from our fifth year last year and on may 8th we will be doing our sixth year of this event um and so this just kind of shows some of the people that have come the speakers um the women speaking here on this panel in the middle was a winner of denton pitch competition which in 2022 which i'll talk about in just a minute and again some of the marketing materials our keynote speaker last year was erin powell who's the ceo of bunch bikes which is a local um cargo bike company um at this event we had about 100 people including students this is a table um of denton isd students from lebron academy so we have a partnership with denton isd through the um the cte uh lebron academy and then as well with incubator edu their entrepreneurship program at geiger high school um this is some imagery from dent pitch competition this was our second year of doing pitch competition so this program is one where entrepreneurs apply um we vet them we bring um about 15 or 16 people into the coaching program so we provide resources and um coaching to them to help her have the best pitch possible um we had 16 businesses last year going through the coaching program and then the top 10 pitched in front of a panel of judges and a public audience um and then the three winners win cash um and so this first place winner is a speech therapist and she pitched that she needed uh money to help submit her applications to be able to accept accept insurance plans because she was just private pay um speech therapy for young children um and we got an update from her a couple of weeks ago that they are just a couple weeks out from being able to accept multiple different forms of insurance um which will grow their business tremendously um triptych coffee company is a pop-up uh coffee cart that has been in operation for less than a year they won second place and then golden root ginger beer won third place so all of these are local businesses that are um using the money and the coaching that we provided to help grow their businesses global entrepreneurship we have taken part in global entrepreneurship week since 2018 um and so it is a week around the world that is to celebrate and showcase entrepreneurship and so last year we held uh events all week long including a fireside chat with the thistle creative reuse owner we had a big ideas creative mixer that brought out over 60 creative entrepreneurs we offer free co-working on fridays didn't pitch competition is kind of the figure that we do as part of this celebration uh we we also produced a virtual startup crawl so we produced um four videos that showcased um some businesses in debt um through like a virtual tour that we have on our youtube other entrepreneur ecosystem activities that we participate in um speed bump was an art tour that we were a location for last year we're participating again one million cups is a um weekly kind of mini pitch event that happens um there's uh events in fort worth and frisco and we have somebody from our team that attends regularly we sponsored the hackathons that happened at unt both hack unt and hack tams we always attend our startup week we have had speaking spots in the past last year we were just attendees and then the incubator bdu is as i said the entrepreneurship program that happens at our high school so i am a coach for teams i have been a coach the last three years helping these high school students kind of work on their businesses and then pitch at the end of the year it's coming up really soon so these are just some of the efforts that we do throughout denton and the region to help support entrepreneurship and in denton my videos didn't pull up here and um to respect the sports time i will just encourage you to go to our youtube you can go to our website at stokedenton.com there's a link to our youtube we have some really wonderful professionally produced videos there um from the startup crawl from flip comp last year from the denton pitch competition so you can really see some of what um what our work looks like um some of the impacts and outcomes from last year 86 percent of our member survey respondents said their business has experienced growth and so that includes anything from sales growth hiring new employees landing new clients raising funds filing their llc so that's you know that very initial step to starting a business and then launching new products and services some of the direct impacts from their membership at stoke in terms of their growth include collaborating um between and between members the education and resources that we provide networking through getting to know each other just truly like in the kitchen or at some of our member events hiring within the member community so we see people that are literally hiring part-time or full-time or freelance workers just they wouldn't have known otherwise but they're colliding in our space and they're hiring each other to work together and then finding co-founders for their business um 93 percent net promoter score over 500 people brought together through our events and programs 11 professionally produced videos highlighting stoke programs and events and then the four internally produced videos from startup crawl and then some of our uh impacts from our programs didn't pitch competition we did we provided 28 hours of business coaching so this is really helping people perfect their pitch and business plan and understand the steps to growth 10 of those businesses pitch 70 were women-owned business 40 BIPOC and 10 LGBTQ we had 13 uh entrepreneur expo participants so as part of this pitch competition event we had a side um where people set up booths and so we have people serving the food or drink that is their business um or you know people somebody trying to start a sewing school who had people sewing on her sewing machine so 13 participants in the expo and then the three winners received recognition and cash prizes blimpon as i said 100 attendees we had five speaker sessions two panel discussions and then 10 big ideas pitch so as part of this event we open up the platform to really anybody in the room who wants to share something that they're working on something that they think would be a big a good idea for jetten and then the coffee and conversations we held 11 sessions with 70 attendees and the mentors are 70 women 50 BIPOC and 20 LGBTQ we have a team of three full-time employees and our associate director is part-time but we do all of this work taking care of our community robin is ahead of kind of our membership and our onboarding and our our community our member events um mary helps with our marketing communications and then i kind of oversee the programs and partnerships and all of the details that go into running and operating and managing a business um these are just some things that i pulled from a zine that we created last year as a way to um help inform people about what it is that we do um yeah i'm happy to answer any questions that you may have any questions for heather thank you for your presentation okay look time today we're gonna i'm gonna ask you guys to uh snap before just to review your backup information uh that was presented in our information and i want to take just 60 seconds before we adjourn today i want britney to to introduce herself to the board and just tell give us a little bit of overview of who you are we had a great discussion yesterday one day she asked me was what do you want to see from the economic health area stability and she said i'm over here for at least five years so i'll hold you that well everyone my name is race director and um i was originally going to race with the little desk area um i got my economic development started out there at the best chamber of commerce actually before that i've worked at the ut primary basis small business development center as a business consultant and then i moved over to the desk chamber of commerce who was a primary contractor for the desk building corporation their cell site corporation um and then while i'm in the city likely i got a job at the arlington office of economic development our neighbor an hour away from us i worked there for five years and experience all working on all types of public private partnerships as you can imagine an entertainment district and uh plenty of economic development projects that we recruited into the city um after i hit my five years i wanted to live by the coast and i got a job at the corpus christi regional economic development corporation um we covered three different counties new asia san francisco and aransas counties and then within those counties of course there's multiple cities and so we acted like the dallas regional chamber but we had a an agreement with the city of corpus christi to manage and send us for their typing corporation and we also managed and and compliance for the new aces and san patricio county so in corpus christi it's primarily heavy industrial projects so they were home to three oil and gas refineries and while i was there testa lithium opened up so that was exciting over the total in the next five years it will probably create about two million dollars worth of capital investment so in the room did you have a contact there so maybe we'll do something unique down here but i'm excited to be here everyone i've met has been super nice super sharp i'm excited about our partners um i have an amazing team as you already know let's give them a hand christina christin and matilda and i want to recognize vanessia as far as if she's with development services she's going to be handling all of our administrative work moving on and i do want to let you know we are working on streamlining some of our roles and responsibilities to set us up for success so we'll probably present that in the near future great i hope all you do is i'm sure you will have a chance to meet with her in the future we're all excited to have you on board here thank you thanks for that uh there's no other business uh before our board i'll now adjourn the meeting it's uh what 1250 so uh great meeting great discussion guys thank you for that great