Jul 22, 2019 Public Utilities Board on 2019-07-22 6:00 PM

It's 6 o'clock, so let's call to order the Public Utilities Board meeting of July 22, 2019. The first item is receive a report, hold a discussion, and give staff direction regarding the Pay As You Go prepaid metering program. >> Good evening. I'm Lista Foster, Customer Service Manager, Madam Chair, Board. I'm here to be able to discuss the prepaid metering program with you guys this evening. Since our public launch in February of this year, our patronage has increased by 860%. So we felt it was important to give you guys a little bit of an update on how the program works and some of the results that we've been seeing. So just to give you a basic overview of what this program requires is basic requirements. It's any residential customer who has electric service is eligible. We do require a $50 prepayment that goes toward the first $50 of service that the customer would use. If a customer has a large amount of a deposit and it will cover all of their outstanding balances including unbilled usage, we will attempt to apply that as we can as well. We try to help customers move to this program for the least amount out of pocket. The highlights for it, we have no deposits, no late fees or interest, there are no delinquent fees. I highlight those specifically because we capitalize there are no fees. There is one fee possible and that is if someone has a return payment. Then that's something that we would still be charged by the bank, so we would still have that one type of fee. We also have a program called debt recovery. This will allow customers who have an outstanding balance or even an old balance due to be able to move on to the program with a partial payment of the balance. And the remaining portion will go into the debt recovery program. And each time they make a payment toward their electric service, 25% of that goes to pay their past due balance. So it will help them to be able to get back in good standing with no outstanding debt over a little bit of time to make it less burdensome. So what happens with this program is we estimate your water usage based on your most recent water bill as well as all of your set fees such as your solid waste, such as your facility fees. Then we actually charge you every single day for your actual electric usage. And that becomes deducted out of your balance if you look at the screenshot on the right. You'll see that a customer can see their current balance. That unpaid balance is anything that might be in debt recovery. And then you can see approximately how many days of service are left. Under each day, you'll see the usage total. That's going to be all of the metered service usage, the estimate for water as well as the actual cost for electric service. The miscellaneous line is all of the non-metered service costs. So all of the set fees as well as some things here what customers have most had questions or concerns about or don't understand. And that is if I make a payment of $100, $25 of that would go toward my unpaid balance. That's going to show in that miscellaneous fee the day that I make the payment. So it can be a little confusing and we wanted to make sure that you guys are aware of that and understand with clarity. The other thing that you can see in that miscellaneous field is once a month we have to do what is called a reconciliation. As I mentioned, our water service, we're actually estimating the cost of that. So if the water usage is different than what it was the previous month, we have to true that up once we actually have a read to go along with the billing. The other thing that can happen at reconciliation is we're going to estimate or equalize your payments for your facility fee, which on this program is a little higher than what it is with this traditional electric program. But we average that out. If we say that we're going to average that out, if it's the $30 in fees, it would be $1 a day. At the end of the month, if your actual billing period was only 28 days, then we didn't receive enough money to cover that fee. Or if your actual billing period was 32 days, then we now need to rectify that and get that money back to you. So once a month you'll see that balance change. If it changes by more than $10 unexpectedly for that customer, we are going to contact them and give them the opportunity to place that money in debt recovery or to go ahead and have it taken from their available balance. The other thing that customers will get are usage and balance alerts. They will get some daily pushes or emails or texts. They can set them up the way they want, letting them know what their cost for service was the previous day. And they can set thresholds so that anywhere between $10 and $30, if their credit drops below that, they'll start receiving an alert letting them know it's time to put additional funds on their account. If a customer reaches a negative balance, they will receive an alert on day one, letting them know that they need to get the account into a positive balance. On day two, if they're still negative, they'll receive a second notification and will be interrupted later that day. When a customer is interrupted on the pay as you go program, the only things that they have to pay to have service restored is the negative balance, any debt recovery payment that would be required, and we do have them pay a $25 credit so that they're not immediately turned back off. So those are the only things that they would see with that. The turn on happens automatically and usually within about 15 minutes. So some of the benefits for the program is for the customer, this is allowing them to utilize any deposits they may have on file, no matter what their current payment history is. It avoids any deposits for a new customer coming in and it avoids any increased deposits for customers who are on the program. It actually helps to manage their debt accrual because once you go into the negative, you're going to get those alerts and your service would be interrupted before you've gotten into a situation where your $300 or $400 passed due. So this is a great tool for customers. They have, it's the lowest cost for them to be able to set up services or to restore their services. We'll look at that in just a couple of minutes. For the city, we're doing our part to decrease the financial burden to our customers. We're helping them to be able to get out of debt and we're also helping to protect our bad debt balances by keeping customers current and on. So we have two customer bases. The first are customers who need financial flexibility. This could be a customer who's on a fixed income. Maybe they get inconsistent pay dates so they need more flexibility on making smaller payments more frequently. Maybe this is a customer who really needs some help with some outstanding debt and they need to be able to get their services back on. We can help those customers. Additionally, it is for consumption conscious customers. That is the reason I am personally a prepaid customer. So it allows you to be able to see every single day your electric usage and the cost alongside the high and low temperatures for the day. It helps you to be able to get an immediate view of the changes that you're making in your lifestyle and how they're impacting the cost of your utility services for you. So in talking about a customer who needs a little bit more flexibility in their payment options. This is a customer and we're going to talk about an actual customer scenario that had been interrupted for a delinquent account. In order for that customer to be restored, they would have to have taken care of all of their past due balances, any additional deposits and it would have cost them $698 to be able to have their services restored because of the amount of electric service they use. And they also have new charges that are about to be billed. This particular customer had a $294 deposit on file. So by moving to prepaid, we were able to apply that deposit toward outstanding balances so that they only needed to pay that $50 prepayment. And then we moved about $385 into debt recovery to allow them a greater flexibility to get that paid out. Now for a $50 payment for this customer's average, that would give them service for about three days and they would need to make another payment. But if you're trying to get from now until Friday, we can help do that for you without it having to cost you nearly $700. If that customer had the $700 and would like to make that payment to move to the prepaid environment, that would have given that customer approximately 51 days of service that they would have paid for in advance with no fear of being interrupted again. So it makes it a really great option for a lot of customers. The next piece is, of course, the conservation minded. So again, you can see exactly what your costs are. So for instance, when I moved into my home, my first week I thought it's because we're opening doors, we're going in and out. By week two, I noticed one day kept spiking, got my attention very quickly, and I identified that that's the day we're doing laundry. So I could see what the impact of running our dryer was costing us each weekend. It allowed me to see that when I got my alert one day, it was higher than it should have been, that there was something not quite right. And I got home to find that we had left some lights on in the garage and I got to see what that impact was. So it allows you to do these things. I had the pleasure of speaking with a customer. It started as a concern that she had posted on Facebook regarding the miscellaneous charges. And as we got to speaking, she told me that the program has literally changed their lives. She said that before they had difficulty with the payment dates and being able to keep up, that now they do much better with that because of the alerts. But additionally, she has been able to take her significant other and teach him that no, really, leaving it plugged in, even off, is using electricity. Did the work of unplugging it one day. He saw the difference and now they're saving money by taking those little bitty steps. So it was really a big game changer for her and her family. So some of our program results, obviously, we did our launch, our soft launch in October of last year. We had 50 customers who were on the program by the first of the year. And once we had deemed everything is moving successfully, we did our public launch last February. Since February, and I just took it through July 1st, we had 367 customers who are active. As of this morning, we had 430 active customers on the pay as you go program. And of those, we have placed about $75,000 into debt recovery on behalf of these customers and collected $31,000 of those outstanding balances. The average customer is paid debt free within 45 days. And 74% of customers have no more outstanding debt balance within 60 days. So it really has helped them a lot. We have been able to refund $58,000 in deposits and we have been able to not require an additional $72,000 in deposits. And the deposit figures are just since the 1st of January because we hadn't tracked that prior. So, you know, it's been very significant to our customers. And the other thing that I had noticed on this is, you know, we've done a lot of hard work. I've got a team that's been, you know, getting out and meeting with apartment management companies. They've met with 87 different apartment managers who represent over 300 complexes in the community. They've begun putting materials in their welcome packs for their residents. We've had a lot of stuff going out on social media to let people know that the program exists. And then we've had things out in the Citizen Connection as well. We've had a small clip in DTV and we've started putting things up on the website. So as part of the things that are going to happen in the future, we're working right now with the Public Communications Office to be able to create an educational video library. Videos that are just a few minutes in scope but will tackle different aspects of the program to help customers better understand how things work. This is going to be in response to some of the questions and things that we see frequently from our customers like the miscellaneous charges or the reconciliation balance or why do we charge or why do they get charged a $25, you know, additional amount when they're restoring their service. Those things are very easy for us to be able to give them just a little snippet. So that's what we're working on right now. We also have the Pay Near Me program that is in some of the final phases of testing. Pay Near Me is a program that will allow a customer to get a barcode on their cell phone. They can choose any local establishment that participates like a 7-Eleven or CVS, local or nationwide, take that in and be able to make their payment for a-- and that will work for pre and postpaid customers but for a prepaid customer, that is going to be a real-time payment that they can make in cash. And then finally, the postpaid usage monitoring. Everyone got a little bit of a prize tonight and Tiffany was kind enough to pass them out. Those are instructions if any of you would like to just kind of test out and see what the postpaid usage monitoring program will look like for our customers. We're in our final phases of testing and we're hoping to roll that out early fall. So it's not quite as robust and some of the information is what the pay as you go customers will receive. But because we're not actually doing the billing out of that system, it can't quite be as robust. But it provides plenty of good information on the amount of electricity being used again with the high and low temperatures of the day. And with that, are there any questions? >> Questions. Very impressive. >> We are very proud of it. >> I'm glad that people are embracing it. >> Very proud of it. >> Yeah. Yeah. All right. Thank you. >> Thank you. >> The next item then is receive a report and hold a discussion and give staff direction on the proposed water rates for fiscal year 2019 and 2020. >> Good afternoon, PB members, chair. I'm Nick Vincent, the city's budget manager. I'll be presenting to you the proposed 19-20 water rates. Hold up here. Feel free to stop me throughout this presentation. If you have any questions, I'll be happy to answer them for you. A little bit of history, the operating budget was presented to city council on June 4th and the PB on May 6th. It is on your agenda today for individual consideration later in today's meeting. We are proposing no adjustments to residential and commercial water rates this fiscal year. They were not adjusted last fiscal year also. So we are carrying that forward in the fiscal year 19-20. This slide summarizes the wholesale water rates for the current fiscal year in the proposed. So you can see for a wholesale customer, their current facility charge is 288.72. We are proposing to take that forward to 288.72 in fiscal year 19-20. The volume charge is currently 61 cents per thousand gallons. Moving forward, we are proposing to stay at 61 cents. We are proposing to increase the wholesale raw water pass-through rate from .0266 to .0270. This is based on the consumer price index for the month of June of this year. This is the residential water rate comparison at 9,200 gallons. So two components make up a residential water bill each month, a facility charge and a volume charge. So you can see the current resident at 9,200 gallons of usage is paying $54.18. This is the commercial water usage at 50,000 gallons at two inch meter. You can see the city and customers are currently paying $274. This is commercial water comparison at 200,000 gallons of usage at two inch meter. You can see the rate is 9,4150. Similar to residential, this does have two components, a facility charge and a volume charge based on each thousand gallons of usage. With that, I will stand for any questions that you may have. >> So we're in the middle of it, of the pack on all of the water? >> Absolutely. Let me back up for you. >> Good. >> Yeah. So the residential 9,200 gallons were directly in the center, commercial 50,000 gallons exactly in the middle and then at 200,000 gallons were in the middle. >> Any questions? No? All right. Thank you, Nick. Next item is receive a report and hold a discussion and give staff direction on the proposed waste water rates for fiscal year 2019-2020. >> Good afternoon. >> And it's you again. >> PEV members, chair, Nick Vincent, city budget manager. I'll be presenting to you the proposed 19-20 waste water rates similar to water. If you have any questions, please feel free to ask me throughout the presentation. This was presented, the operating budget was presented to PEV on May 6th. It did go to city council on June 4th. It is here today for your individual consideration of approval later in the agenda. So similar to water, we are proposing no rate adjustments for residential and commercial waste water customers in the proposed 19-20 budget. And this slide does summarize the residential waste water rates. So you can see the current rate in this column here. You can see the proposed rate. There are two components similar to water customers that make up a waste water customers bill each month. One component is a facility charge of $11, you can see that number here, and then a volume charge of $3.80 per thousand gallons. We are not proposing any rate adjustments to those. This is the residential monthly bill comparison at 5,400 gallons. I do want to point out this 5,400 is the minimum. This was reduced last year from 6,000 gallons based on average water usage from water customers. This rate comes into play when a customer is new into the city and they don't have average billing for the month of December, January, and February. So they're built 5,400 gallons of usage. So you can see that bill is $31.52. We are proposing to leave that flat going into fiscal year '19-'20. This is the residential waste water rate comparison at 5,400 gallons that we just discussed. You can see the rate is $31.52. I would like to point out last fiscal year we did do a 5% rate reduction for waste water customers in the city of Denton. This is the commercial waste water rate comparison. You can see the current adopted rate here in the '18-'19 column and they're proposed in the '19-'20. Inside City of Denton customers are currently paying $26.50 for a facility charge and $4.85 for the volume charge per 1,000 gallons. The commercial monthly rate comparison, we do have two different volume comparisons here, one at 50,000 gallon and one at 200,000 gallon. You can see the current rate is $269. We are proposing that that stay the same. 200,000 gallons is $996.50. We are also proposing for that to stay the same. The commercial waste water rate comparison for 50,000 gallons we just saw, so we are in the middle at $269. The commercial waste water comparison at 200,000 gallons, here's the $996.50 we saw a few slides ago. >> Why is Austin off the charts? They've been sort of in the middle of the path. >> Oh, you need to get closer to your microphone, Karen. >> Oh, sorry. Why is Austin-- I don't suppose you have any idea why Austin is suddenly so expensive. >> I would have to look into that. We can look into that, you know, and get back with you. We can do a follow-up memo with you the next meeting. >> Oh, it doesn't matter. I was just kind of looking at them and they were in the middle for everybody, all the other charts, so. >> Yeah, let me back up really quick. >> They're a little bit high there, but yeah. >> Yeah, I can back up. >> Maybe on the residential? >> Yeah, let me back up to the residential slide and see if they're to the left a little bit here. >> They're not the-- >> They're not up? >> Yeah, we-- >> Yeah. >> Oh, there they are. Yeah. >> I'm just curious. It doesn't matter. >> Well, and I'm curious on a residential or a little bit on the low side, is it-- has to do with the cost of service? >> It does have to do with the cost of service. We look at that each year. We do run an internal cost of service model. This year we ran it, of course, and that's why we're not increasing the wholesale rate based on that model. So to answer your question, yes, it does have to do with the cost of service. We did do the 5% rate reduction last year, which did move us to the left a little bit on this chart as part of it. >> Okay, thank you. >> So we are proposing to change the following fees. We are looking to introduce a bagged dyno dirt rate. So staff is looking into bagging the dyno dirt material at the Beneficial Reuse Department. We are proposing to charge $4 per bag for that material for customers coming in to purchase it. We are looking to increase the dyno dirt overage rate. It's currently at $2 per cubic yard. We are proposing to take that to $3 per cubic yard. And then the dyno landscape mulch, we are looking to discontinue this rate. We do not have a high demand for this product currently at the Beneficial Reuse Department. >> Doesn't UNT use like tons of that or are they using something else? >> I'm not sure about UNT. I can ask Dr. Banks to come up. He may have a better idea about UNT. >> I was just surprised that you didn't have very much demand because it seems like that's what they're using. >> Good evening, board. Kenny Banks, general manager of utilities. I think that the product that you're considering at UNT is not the same one as this mulch product. This is a double grind process. And I think what you're looking at is the dyno dirt products that are -- we have a couple of different versions of that depending on the grind. So we have some that are chunkier, that have larger pieces in them. I think that's what you're thinking about. >> There's lots of grades of mulch, evidently. >> Yes, correct. This particular one has not had very high sale volume and it has a two process grind on it. So it's relatively expensive to produce. Interestingly, on the first pass on this one, we produce a fairly large shredded product and that's actually used -- we've experimented with it for use as an erosion control product and have had really good luck with it. And so what we're proposing here is to do away with this particular product but still use the first stage of that product. It's less expensive to produce and we've got a demand that appears to be growing for an erosion control product that can then be just incorporated into the site instead of your typical plastic or geotech materials that would have to be removed. >> Okay. Thanks. >> Sure. >> Any more questions on this slide? I'll move ahead. >> Okay. >> All right. And that concludes the wastewater presentation. >> Any other questions? All right. Thank you. Receive a report and hold a discussion and give staff direction on the proposed miscellaneous rates for fiscal year 2019 and 2020. >> Good afternoon, PUB members, chair, and Nick Benson, city's budget manager. I'll be presenting this short presentation to you. This one is fairly short. We are proposing no changes to the miscellaneous rate ordinance. We did make a few changes last year but this year we are proposing not to change any of those rates. With that, that actually concludes this presentation. There were no rate adjustments to show you. >> Okay. I take it there's no questions, right? >> No. >> All right. Thank you, Nick. Now we'll go into a closed meeting and I'm supposed to read this whole -- this paragraph, right? Okay. The public utilities board will convene in a closed meeting to consider specific items. When these items are listed below and under the closed meeting section of this agenda, when items for consideration are not listed under the closed meeting section of the agenda, the PUB will not conduct a closed meeting and will immediately convene in its open meeting. The PUB reserves the right to adjourn to a closed meeting on any item on its open meeting agenda consistent with chapter 551 of the Texas government code as amended or otherwise as allowed by law. And under this item we're going to be deliberating regarding certain public utilities competitive matters under Texas government code sections 551.086. Deliberate and discuss competitive matters about our power -- public power operations, including but not limited to purchase power agreements as it relates to the proposed electric budget. >> Madam Chair. >> Okay. It is 638 and the public utility board is reconvening into its regular meeting. And the item -- oops. And the items on there are the consent agenda. We have three items. Does any board member wish to pull an item on the consent agenda? All right. Do we have a motion? >> So moved. >> So moved. >> Second. >> All in favor say aye. >> Aye. >> Motion carries. Next items for individual consideration. Consider the approval of the public utility board minutes of July 8, 2019. Did anyone see any changes or corrections? And they'll stand approved as presented. Next item. Consider recommending approval of the Denton Municipal Electric Fiscal Year 2019-2020 operating and capital budget. Mr. Gaines. >> David Gaines, director of finance. Good evening. We don't have a new presentation, but can definitely answer any questions from last meeting's DME presentation and the budget that was submitted to the board. Does anybody have any specific questions? It was a lot to digest that day. >> Yes, it was. >> We didn't need to bring this back. All right. All right. The next item, then, is consider recommending approval of the water -- >> Do you want to take a -- >> Oh. I'm sorry. >> Need to vote on it. >> Oh. That's -- thank you. All right. Do we have a motion to approve? >> I recommend approval. >> I'll second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. Thank you for that clarification. Consider recommending approval of the water fiscal year budget 2019-2020 operating and capital budgets. >> Good afternoon. Nick Vincent, city's budget manager. Similar to DME, we do have a presentation. If anybody has any questions, we'd be happy to answer them. >> Questions? All right. We have a motion to approve. >> I recommend approval. >> Second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. Consider recommending approval of the wastewater and drainage fiscal year 2019-2020 operating and capital budgets. Same thing? >> Good afternoon. Similar to water, we do have a presentation for wastewater if anyone has any questions. Any questions from the last time? Motion to approve. >> I recommend approval. >> Second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. All right. Consider recommending approval of the customer service fiscal year 2019-2020 operating budget. >> Good afternoon. Similar to water and wastewater, we do have a presentation for customer service if someone has a question about their budget. >> All right. No questions. Do I have a motion to approve? >> So moved to approve. >> Second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. Consider recommending approval of the solid waste fiscal year 2019-2020 operating and capital budgets. >> Good afternoon. We have a presentation for solid waste, if you have questions, I'll be happy to answer them. >> No changes since last time? >> No changes since last time. You've seen it there -- let me pull up a presentation really quick. Hang on just a second. I'll let you ask that question. I think there's a couple slides. Bear with me a second here. I'll be able to pull it up on the city's website. There it is. >> The two slides that did change have to do with the solid waste rates. These will come back to PUB at the next meeting in August. We can discuss them with you at that meeting, or we can go into them a little bit today. They are part of the budget presentation, so we'll be happy to pull them up. Brian Burner is here. If we have questions on them, we'll be happy to answer them. Actually, let me pull this up really quick, and you actually can look at it. These slides were shown to city council a few weeks ago, so we are looking to implement some changes for yard waste collection service. So instead of being grouped into the monthly rate, there will be a subscription service moving forward. If you choose to use a craft bag, it would be a dollar a month. If you do a cart, it would be 50 cents. We would ask that you actually buy the cart for $20 if you decided to do that, but we had had some requests in the solid waste department to start a cart service, so we are putting that out there this fiscal year. Brush, we are changing that from a cubic yardage rate into an hourly rate of $75 per hour. So that's something else we'll be putting forward and talking to you about next month. Bulky waste collection, we are looking to bundle that. Anything over two items would be $5 per item, and then bulky waste commercial, we were asked to introduce a commercial bulky waste collection, and that would be $20 a trip fee, and then $25 an item to collect it. Appliances, electronics, we are looking to change that rate to $40 per item, and then home chemical collection would be $10 per collection. Good enough. Any other questions? All right, do we have a motion to approve? I recommend approval. Second. We're approving this, but we're going to talk about it later? We're approving the budget. That's correct. So let me clarify really quick. So the item in front of you today is to approve the operating budget. We did have a couple slides that went to council after y'all had seen the initial budget presentation that talked about the rates, so I wanted to be sure to show that to you today. The rates actually will come back to you the first meeting in August for your consideration, or actually for your review, then it will come back to you for approval. They kind of dovetail. Yes. All right, so we were, we had a recommendation for approval. Second. Okay. So all in favor say aye. Aye. Opposed? Motion carries. ACM update. Yes. Excuse me, Madam Chair, members of the board, real quick. As Mr. Vincent mentioned, you'll be seeing at your next meeting the rates for most of the utility departments, in addition to next meeting, which will be August 1st, I'm sorry, August 12th, you'll have the DME budget that will be presented as well. Let's see if any questions for that. And then lastly, on any of the new business items on the new business matrix, a couple of things will be removed from the matrix, and there's a couple still things that are still outstanding. One is recycling, and the other one is the meetings for the PUB. All right, then that brings us to concluding items. Are there any items that a board member wishes to have put on the agenda in the future? Do we need to elect a vice chair? That is... And we'll be having that as an item for the next meeting. Okay. And the secretary is always the iffy one, because that's the third person in case, but that one didn't change with Brendan leaving. That should not have changed. Okay. Just making sure. All right. So, do we have a motion to... Susan? Yes? Hi. Hi. I feel like it only appropriate that I let everyone know that this will be my last meeting as a member of the public utility board solely for personal reasons. I'm not mad at anybody. I don't think anybody's mad at me. I've served for three years, and I've thoroughly enjoyed it. I've been impressed with the staff. I've seen a lot of changes over the three years that have been for the good. Everybody appears to be very diligent and working for the best interest of the citizens. And it's easy to listen to people on the street, and different people have agendas, and they have their own nuances about what they want to see and people they want to serve, but it appears to me that the city, the staff, public utilities is working for the good of all citizens. And in the long run, at least over the last three years, there's been a lot of improvement, and the citizens should be very proud of the public utilities. And again, I've enjoyed it, and it's strictly personal. Susan's not mad at me. Yeah. City manager's not mad at me, I don't think. I'll be quiet with that, but anyway, I've appreciated it. Thank you. Well, thank you for serving on the board, Allen. All right. Motion to adjourn? Don't you want a motion to adjourn? Yeah. Come on, Allen. So moved. Second. Second. Okay. We are adjourned.