WEBVTT

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 The board of the City of Denton for Monday, June 10, 2024.

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 The first item is presentation from the members.

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 Kathy, did anyone sign up?

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 Okay.

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 The next item, oh.

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 [no audio]

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 Two board members wish to pull a few items.

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 We'll start with Mr. Cheek.

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 Okay.

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 This may cover the -- excuse me.

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 Let me speak closer to the microphone for Mr. Matthews.

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 I'd like to pull consent agenda items.

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 A is in Alpha.

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 F is in Frank.

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 G is in Gorilla.

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 M is in Mary.

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 N is in Nancy.

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 All right.

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 And then Mr. Rayner, which ones did you wish to pull?

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 Besides those same, I would also like to pull D as in David.

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 Okay.

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 I'm sure I've got them all right.

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 So then do we have a motion to approve items B, C, E, H, I, J, K, L?

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 And that's it.

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 So moved.

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 So moved.

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 Okay.

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 And Mr. Taylor seconded.

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 All in favor say aye.

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 Aye.

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 Okay.

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 First item is PUB 24100 for the right of way.

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 Who from staff is here?

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 Good morning.

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 I'm Doug Breon from the GME Engineering Group.

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 Good morning.

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 Thank you for being here.

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 I was looking at A and as I was reading it, it started talking about frontage location I-35, then it jumped to I-35E and then I-35W.

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 Then we got down to 2499 and 1515.

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 I was just hoping for a little explanation or maybe even an aerial as to what is all of that?

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 There's three other projects involved in this signature authority.

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 The first one would be I-35E and that's where the UP Railroad crossings are.

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 They're redoing the frontage roads on both of those.

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 So that's one project.

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 FM 1515 is another project on there and that's from the airport area over to I-35E.

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 Yes.

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 And then the I-35W project is the frontage roads going from FM 2499 going south.

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 And so you were able to get all three of those projects into one request?

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 Yes.

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 There'll be three different projects in there, yes, but it's all under the same signature authority.

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 I think that's great.

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 That leads to a question I'll have later on some others.

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 Sorry to take up your time.

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 I just wanted to get a visual on it because it was a plate of spaghetti.

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 Yeah, it is.

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 Press two.

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 Understanding it's a signature authority means it was already in your plans to do this.

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 That's correct.

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 Okay.

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 Yes.

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 All right.

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 So these were all utilities that were in the states right away, correct?

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 Correct.

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 Just the electric utilities.

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 Just the electric.

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 Yeah, I got that.

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 Yeah.

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 You're a DME.

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 Okay.

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 He asked the questions I was curious about as well.

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 So that's all I've got on that.

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 All right.

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 Any other questions?

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 Do we have a motion to approve item A?

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 So moved.

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 Second.

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 Mr. Rayner, second.

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 All in favor say aye.

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 Aye.

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 Carries.

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 Thank you.

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 Item D, approval of First Amendment to contract between the City of Denton and Freeport Welding

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 and Fabricating.

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 Good morning.

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 Cody Snorrio, DME Engineering.

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 Here for item D.

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 I have a question.

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 Yes, sir.

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 Thank you for being here.

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 I was reading this and I looked at the backup material.

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 Am I correct, the original request did not have the $140,000.

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 It came back as an amendment too.

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 Is that correct?

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 Yes, sir.

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 And I'm just curious, how did that slip through our net the first time?

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 Initially, when the contract was approved back in 2023 of last year, we got the quote

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 from the supplier.

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 Since then, the transportation costs have increased, and for those three tanks, they're

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 really large.

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 So that was a result of the increase in transportation costs since that time.

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 They gave us the quote in the time that they were actually delivered at the beginning of

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 May.

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 So we're just held hostage for time, because in the beginning it would have worked, but

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 because of whatever the reason is, can we blame that on them for the delays that cost

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 us the $140,000?

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 I really can't speak to that.

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 Well, I can, just so that we can pass the buck to somebody.

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 But is this a common thing that you have seen?

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 No, sir.

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 Okay, that's what I really wanted to hear.

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 Yeah, this is not common.

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 It's just such a long, long time between the two that it increased on the transport.

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 Thank you.

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 Oh, how contracting has changed.

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 Used to turn in a bid, and that was your bid.

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 And unless the plans, specifications, or engineering were incorrect or changed, the contractor

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 had to honor their original bid.

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 In this case, none of the PS&E changed, plans, specifications, or engineering, and we're

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 having to eat the $140,000 as a request by the contractor saying that he can't get it

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 delivered for his original price.

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 Is that correct?

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 Yes, sir.

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 Okay.

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 And what is the reason for that?

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 Oh, I'm sorry.

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 What is the reason for that?

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 I mean, did they give you one other than?

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 Only response was that there was just an increase in transportation costs with the permitting

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 and everything else, and that's what resulted in the $140,000.

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 Thank you.

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 This is not an isolated incident.

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 That's, I think, the concern.

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 Just want to bring it up, and it's not just about this item.

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 Terry, it's not just about this item.

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 I promise you that.

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 It's not just about.

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 No, I apologize, board members.

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 Terry Nalte, Assistant General Manager.

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 So the original contract for the tanks included an allowance for transportation, but the actual

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 cost of transportation exceeded the allowance as a result of the size of the tanks and the

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 routing that had to be made.

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 These tanks would not fit under normal bridges, and some utility lines had to be potentially

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 relocated and things like that.

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 Did they redesign the tanks?

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 They did not, but I guess the way that the contract was actually led, it just gave an

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 allowance for the amount of transportation cost, and when the permits were acquired for

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 the transportation and the routing was determined, this was the increased cost.

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 Tanks have been delivered and have been erected.

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 I guess the point being it's not very often, and it hasn't happened in recent years, that

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 somebody comes to you and says, "Oh, we overpriced the hall on this thing.

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 We'd like to give you half off today."

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 Well, that would be nice, wouldn't it?

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 Oh, I know of one time when it's been done in this city.

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 It was probably from a local vendor or something, but.

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 Okay.

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 Further questions?

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 Thanks, Cody.

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 Okay.

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 Do we have a motion to approve item D?

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 So moved.

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 Okay.

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 Mr. Cheek moved.

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 Do we have a second?

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 Second.

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 Okay.

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 Mr. Rayner?

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 Okay.

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 All in favor say aye.

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 Aye.

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 Aye.

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 Those opposed?

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 Okay.

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 Motion carries.

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 Thank you.

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 Item F. Thank you.

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 Another utility relocation.

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 Is this both of ours, Rob?

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 Good morning.

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 Sean Messick with Accountable Projects.

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 Okay.

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 This is mine.

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 I pulled this.

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 Let me go back.

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 This is F, right?

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 Yes.

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 We're on F.

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 So it's the relocation at Fort Worth Drive project.

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 Okay.

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 This was just a low bidder project.

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 Is that correct?

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 Yeah.

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 Okay.

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 All right.

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 So how's Mountain Cascade doing with you around town?

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 Oh, they're phenomenal.

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 Really?

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 Yeah.

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 Are you driven down Pony Brae Street?

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 On the I-35 stuff, they're doing good.

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 Is that what you're talking about?

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 Yeah.

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 Yes.

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 Okay.

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 Wow.

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 In some cases, people might go to a second bidder on a situation like that.

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 But okay.

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 That's all I got.

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 Further questions?

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 Oh, go ahead.

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 So I was curious.

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 Is it fair to say that it looked like F -- will you be addressing M and N as well?

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 N.

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 N as in Nathan?

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 Yes.

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 And M as in Michael?

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 Not Michael.

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 Okay.

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 Well, I looked at all three of those as kind of dovetailing together.

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 And I was just curious, since we had three projects into one, now we have three projects

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 into three.

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 I was just curious, what is the -- like on the F, let's talk about it first.

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 Going down along 377 to Locust and the widening and such.

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 You're working with Textile.

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 Is that correct?

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 Yes, sir.

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 Okay.

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 So my question then is, does F, M, and N -- because you can't address to M, evidently.

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 But do all of these coincide with each other?

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 Are they all within a similar timeframe?

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 Are they overlapping?

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 What?

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 No.

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 Mike is actually Aaron's project.

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 And so that one is a supplemental agreement to the Textile initial agreement.

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 So it's -- any additions to funding that happened there to finalize the payments on that.

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 Foxtrot in November are the one project that's just on 377 and the funds are there for Textile.

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 There are two Textile projects.

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 Trevor Crane, Director of Capital Projects.

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 So F is the actual construction contract for Mountain Cascade to go out and do the utility relocations.

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 These are all Textile projects.

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 The utility -- well, the utility relocates are in response to Textile's widening.

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 So F is an actual construction contract for Mountain Cascade to move utilities so that Textile can come out

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 and do the relocations or do their widening.

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 The other two, M and N, are actually the agreements that allow us to be reimbursed for those utilities.

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 So all separate projects, one, the F is an actual construction contract for us to do the utility relocates.

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 M and N are actually amendments to our standard utility agreement with Textile that allow us to be reimbursed for that work.

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 But they all are married together.

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 Correct.

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 Where was the second bidder?

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 It's not on the agenda sheet, so I have to ask.

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 I have to go back and look.

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 I don't remember.

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 So all the Textile projects, we actually have a pre-qualified list of contractors.

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 The people on that list are Oscar Renda, Mountain Cascade, and S.J. Lewis.

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 S.J. Lewis hasn't been bidding on them recently, so it's been Oscar Renda and Mountain Cascade.

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 Both have been awarded contracts on I-35.

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 But Lori can probably speak.

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 Lori Hewlett, Purchasing Manager.

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 And I can forward you the evaluation tab that got missed from the agenda packet.

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 If it was pre-qualified, that would have just been a little better.

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 It was a little bit, yes.

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 And the other bid was $2.7 million.

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 Around that.

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 It was over $2 million.

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 So it was a very large bid.

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 That may have been the better bid.

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 Okay.

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 So almost a $2 million spread.

00:12:51.000 --> 00:12:55.000
 Yes, ma'am.

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 What did Mountain Cascade miss?

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 I don't think they've missed anything.

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 They're already established in the area.

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 They've got contracts.

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 They're already working.

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 So I feel like a lot of it was in the mobilization.

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 I'd have to go back and look at exactly at the bids.

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 But they already have crews that are mobilized, that are coming off other projects and ready to kind of mobilize on this one.

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 Okay.

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 But absolutely it's something we look at because that's a huge spread and we want to make sure that they're not missing anything and we're not going to have to be chasing them through change orders at the end of the project.

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 Correct.

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 All right.

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 Further questions?

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 Do we have a motion to approve item F?

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 Is it just me?

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 Move approval.

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 Okay.

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 Mr. Cheek, do we have a second?

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 I second.

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 Okay, Mr. Rayner seconds.

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 All in favor say aye.

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 Aye.

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 Nobody.

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 That's okay.

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 That carries.

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 Item G, landfill entrance facility.

00:14:00.000 --> 00:14:02.000
 I just want to see a picture of this thing.

00:14:02.000 --> 00:14:04.000
 That's not very exciting.

00:14:04.000 --> 00:14:07.000
 I'm Christine Stewart, project manager at Capital Projects.

00:14:07.000 --> 00:14:11.000
 We're really just doing a facelift on the entry.

00:14:11.000 --> 00:14:20.000
 So there's the removal of the existing scales will be in placing some temporary scales and then putting new scales back.

00:14:20.000 --> 00:14:28.000
 There will also be an upgrade to the system that processes all the scales and the weights that come in.

00:14:28.000 --> 00:14:30.000
 So a software update?

00:14:30.000 --> 00:14:33.000
 Some of it, yes.

00:14:33.000 --> 00:14:37.000
 Is there a problem with the existing one?

00:14:37.000 --> 00:14:41.000
 It's more about the spacing and how the scales were positioned.

00:14:41.000 --> 00:14:48.000
 So if you go into the facility right now, there's a hanging apparatus and it keeps getting knocked into.

00:14:48.000 --> 00:14:51.000
 So there's no spacing in between the scales.

00:14:51.000 --> 00:14:54.000
 So that's part of what the reconfiguration is for.

00:14:54.000 --> 00:14:56.000
 You're replacing the scales?

00:14:56.000 --> 00:14:57.000
 We are.

00:14:57.000 --> 00:14:58.000
 Okay.

00:14:58.000 --> 00:15:00.000
 And we're adding an additional one.

00:15:00.000 --> 00:15:01.000
 Two lanes?

00:15:01.000 --> 00:15:02.000
 It will be, yes.

00:15:02.000 --> 00:15:03.000
 Gotcha.

00:15:03.000 --> 00:15:05.000
 That was really my question at 3.4 million.

00:15:05.000 --> 00:15:07.000
 It had to be more than software.

00:15:07.000 --> 00:15:08.000
 Yes.

00:15:08.000 --> 00:15:09.000
 Okay.

00:15:09.000 --> 00:15:10.000
 Absolutely.

00:15:10.000 --> 00:15:11.000
 All right.

00:15:11.000 --> 00:15:12.000
 No picture.

00:15:12.000 --> 00:15:13.000
 No picture.

00:15:13.000 --> 00:15:15.000
 Well, we'll see them later.

00:15:15.000 --> 00:15:16.000
 True.

00:15:16.000 --> 00:15:18.000
 Any further questions?

00:15:18.000 --> 00:15:19.000
 All right.

00:15:19.000 --> 00:15:21.000
 Do we have a motion to approve item G?

00:15:21.000 --> 00:15:22.000
 So moved.

00:15:22.000 --> 00:15:23.000
 Mr. Pluck moved.

00:15:23.000 --> 00:15:25.000
 And do we have a second?

00:15:25.000 --> 00:15:26.000
 Second.

00:15:26.000 --> 00:15:27.000
 Mr. Taylor seconds.

00:15:27.000 --> 00:15:28.000
 All in favor say aye.

00:15:28.000 --> 00:15:29.000
 Aye.

00:15:29.000 --> 00:15:30.000
 Aye.

00:15:30.000 --> 00:15:31.000
 All right.

00:15:31.000 --> 00:15:35.000
 Item M, Mountain.

00:15:35.000 --> 00:15:36.000
 You say Mountain.

00:15:36.000 --> 00:15:39.000
 Michael, whatever we called it before.

00:15:39.000 --> 00:15:40.000
 Mary.

00:15:40.000 --> 00:15:41.000
 Okay.

00:15:41.000 --> 00:15:46.000
 This was both Mr. Rayner and Mr. Cheek.

00:15:46.000 --> 00:15:47.000
 Correct?

00:15:47.000 --> 00:15:51.000
 I was just, he just said it and so I circled it.

00:15:51.000 --> 00:15:52.000
 All right.

00:15:52.000 --> 00:15:55.000
 Aaron Skinner, Senior Project Manager, Capital Projects.

00:15:55.000 --> 00:16:00.000
 Oh, I'm sorry.

00:16:00.000 --> 00:16:04.000
 I really got my answer, but I appreciate you coming up.

00:16:04.000 --> 00:16:05.000
 So it's a reimbursement.

00:16:05.000 --> 00:16:06.000
 Yes, sir.

00:16:06.000 --> 00:16:08.000
 So are we looking at the reimbursement of 1.8 million?

00:16:08.000 --> 00:16:09.000
 Is that what they're saying?

00:16:09.000 --> 00:16:11.000
 The additional 1.8 million, yes, sir.

00:16:11.000 --> 00:16:12.000
 An additional?

00:16:12.000 --> 00:16:13.000
 Yes, sir.

00:16:13.000 --> 00:16:14.000
 Okay.

00:16:14.000 --> 00:16:15.000
 And does that, where does that go?

00:16:15.000 --> 00:16:17.000
 Where does that pigeon hole when you get that?

00:16:17.000 --> 00:16:19.000
 That goes back to the project fund.

00:16:19.000 --> 00:16:20.000
 Okay.

00:16:20.000 --> 00:16:21.000
 Great.

00:16:21.000 --> 00:16:22.000
 That just brought up another question.

00:16:22.000 --> 00:16:25.000
 So the total cost of this was?

00:16:25.000 --> 00:16:26.000
 Just north of 17, I believe.

00:16:26.000 --> 00:16:30.000
 So you're saying that basically 15 of that is something we owned already anyway?

00:16:30.000 --> 00:16:31.000
 Yes, sir.

00:16:31.000 --> 00:16:33.000
 That was in supplemental agreement one.

00:16:33.000 --> 00:16:34.000
 Okay.

00:16:34.000 --> 00:16:36.000
 It was estimated, I believe it was about 15 and a half.

00:16:36.000 --> 00:16:37.000
 Okay.

00:16:37.000 --> 00:16:39.000
 So this is the true up of that additional 1.8.

00:16:39.000 --> 00:16:40.000
 Yeah.

00:16:40.000 --> 00:16:41.000
 Gotcha.

00:16:41.000 --> 00:16:45.000
 I'm fine, thank you for your time.

00:16:45.000 --> 00:16:46.000
 Okay.

00:16:46.000 --> 00:16:47.000
 Any further questions?

00:16:47.000 --> 00:16:48.000
 Okay.

00:16:48.000 --> 00:16:49.000
 Thank you.

00:16:49.000 --> 00:16:50.000
 Thank you.

00:16:50.000 --> 00:16:51.000
 Do we have a motion to approve item M?

00:16:51.000 --> 00:16:52.000
 So moved.

00:16:52.000 --> 00:16:55.000
 Mr. Pluck, can we have a second?

00:16:55.000 --> 00:16:56.000
 Second.

00:16:56.000 --> 00:16:57.000
 Mr. Cheek?

00:16:57.000 --> 00:16:59.000
 All in favor say aye.

00:16:59.000 --> 00:17:00.000
 Aye.

00:17:00.000 --> 00:17:01.000
 Opposed?

00:17:01.000 --> 00:17:02.000
 Carries.

00:17:02.000 --> 00:17:06.000
 Item N. Do we need him to come up or?

00:17:06.000 --> 00:17:08.000
 I'm happy.

00:17:08.000 --> 00:17:09.000
 He's not.

00:17:09.000 --> 00:17:11.000
 Are you happy, Billy?

00:17:11.000 --> 00:17:13.000
 Yeah, I'm fine.

00:17:13.000 --> 00:17:14.000
 Billy's happy?

00:17:14.000 --> 00:17:15.000
 Okay.

00:17:15.000 --> 00:17:18.000
 Do we have a motion to approve item N?

00:17:18.000 --> 00:17:20.000
 So moved.

00:17:20.000 --> 00:17:23.000
 Thank you, Mr. Newquist.

00:17:23.000 --> 00:17:26.000
 Do we have a second?

00:17:26.000 --> 00:17:27.000
 Second.

00:17:27.000 --> 00:17:28.000
 Mr. Pluck, all in favor say aye.

00:17:28.000 --> 00:17:29.000
 Aye.

00:17:29.000 --> 00:17:30.000
 Aye.

00:17:30.000 --> 00:17:31.000
 Opposed?

00:17:31.000 --> 00:17:32.000
 Put that on the plaque, Aaron.

00:17:32.000 --> 00:17:33.000
 Jump in.

00:17:33.000 --> 00:17:34.000
 My feet moved.

00:17:34.000 --> 00:17:35.000
 You got in.

00:17:35.000 --> 00:17:36.000
 All right.

00:17:36.000 --> 00:17:37.000
 Perfect, that's why.

00:17:37.000 --> 00:17:40.000
 Yeah, there you go.

00:17:40.000 --> 00:17:44.000
 Next item is considered the approval of the May 20th, 2024 minutes.

00:17:44.000 --> 00:17:47.000
 Were there any changes or corrections?

00:17:47.000 --> 00:17:51.000
 Seeing none, do we have a motion to approve the minutes?

00:17:51.000 --> 00:17:53.000
 So moved.

00:17:53.000 --> 00:17:54.000
 Thank you.

00:17:54.000 --> 00:17:56.000
 And a second?

00:17:56.000 --> 00:17:57.000
 Second.

00:17:57.000 --> 00:17:58.000
 Thank you.

00:17:58.000 --> 00:17:59.000
 All in favor say aye.

00:17:59.000 --> 00:18:00.000
 Aye.

00:18:00.000 --> 00:18:02.000
 Motion carries.

00:18:02.000 --> 00:18:24.000
 Next item is considered the approval of the May 20th, 2014 minutes.

00:18:24.000 --> 00:18:32.000
 Good morning, I'm David Brown, project manager of Water Utility City of Denton.

00:18:32.000 --> 00:18:37.000
 Today I have for your consideration a contract with Archer Western for construction for the project at Ray Roberts Water Treatment Plant.

00:18:37.000 --> 00:18:43.000
 It's a capacity rerate performance improvements project.

00:18:43.000 --> 00:18:45.000
 So let's talk a little bit about Ray Roberts.

00:18:45.000 --> 00:18:50.000
 Ray Roberts Water Treatment Plant was constructed about 20 years ago, put into service in 2002,

00:18:50.000 --> 00:18:54.000
 and there's not been any significant upgrades or maintenance.

00:18:54.000 --> 00:18:59.000
 Well, there's been maintenance done, but not larger maintenance type projects done out there since 2002.

00:18:59.000 --> 00:19:07.000
 It is anticipated with this project it will add approximately up to 10 million gallons a day of additional treatment capacity.

00:19:07.000 --> 00:19:11.000
 And this is just with improvements within the site itself.

00:19:11.000 --> 00:19:15.000
 No additions as far as in the train of treatment.

00:19:15.000 --> 00:19:20.000
 The project is anticipated to be completed in 2028.

00:19:20.000 --> 00:19:27.000
 So in this project is replacement of valves and actuators throughout Ray Roberts Water Treatment Plant.

00:19:27.000 --> 00:19:36.000
 Approximately about 86 valves and actuators move to a field bus type actuator system, which improves flexibility.

00:19:36.000 --> 00:19:45.000
 Also, the solids handling will be rehabilitated, which is a chain of flight mechanism within a sedimentation basins.

00:19:45.000 --> 00:19:51.000
 Also, we're going to replace the filters with granulated activated carbon, which is GAC.

00:19:51.000 --> 00:19:54.000
 Currently right now is just normal sand.

00:19:54.000 --> 00:19:59.000
 So with that, we're going to go ahead and replace the GAC.

00:19:59.000 --> 00:20:03.000
 Also, we're going to construct a new backwash system.

00:20:03.000 --> 00:20:06.000
 The backwash system now is slower.

00:20:06.000 --> 00:20:09.000
 You have to backwash each filter, which there's eight filters out there.

00:20:09.000 --> 00:20:13.000
 It does not have a gravity storage tank.

00:20:13.000 --> 00:20:22.000
 We will be constructing a gravity storage tank as well, meaning we'll be able to use gravity and some pumps to backwash.

00:20:22.000 --> 00:20:31.000
 And that's where we're going to get our -- hopefully we get better capacity would be through the ability to do faster backwashes.

00:20:31.000 --> 00:20:42.000
 We're going to install VFDs or variable frequency drives for 1,000 horsepower distribution pumps that have been run a total probably about two hours and 20 years

00:20:42.000 --> 00:20:49.000
 because they have such a huge pumpage that we are not currently having that demand.

00:20:49.000 --> 00:20:58.000
 But when we do install the VFDs, we'll be able to control those motors and to utilize those for increased capacity.

00:20:58.000 --> 00:21:04.000
 So we did send it out to bids, and we got two bids back, one from Felix and one from Archer Western.

00:21:04.000 --> 00:21:10.000
 Archer Western came back with a lower bid of $39,995.

00:21:10.000 --> 00:21:16.000
 Of course, there's a contingency of 10%, a total of $43,994,500.

00:21:16.000 --> 00:21:18.000
 The contract day is $1088.

00:21:18.000 --> 00:21:23.000
 And I'll be glad to answer any questions.

00:21:23.000 --> 00:21:28.000
 Mr. Cheek. Oh, I'm sorry.

00:21:28.000 --> 00:21:32.000
 Okay. Mr. Taylor.

00:21:32.000 --> 00:21:38.000
 So I think you just touched on it with your comment regarding the run time on those large pumps.

00:21:38.000 --> 00:21:46.000
 So I was curious if we're increasing capacity by 50% if we needed to increase the pumping capability.

00:21:46.000 --> 00:21:49.000
 But it sounds like it might have been already built.

00:21:49.000 --> 00:21:55.000
 Yes, sir. The pumping capability of those pumps, I believe, are about 50 MGD.

00:21:55.000 --> 00:21:57.000
 We just have not been using them.

00:21:57.000 --> 00:22:00.000
 We haven't had the actual need for them.

00:22:00.000 --> 00:22:04.000
 So our forefathers planned ahead to be ready.

00:22:04.000 --> 00:22:09.000
 And there's actually another one slot out there for another pump.

00:22:09.000 --> 00:22:11.000
 So as far as pumping, we're ready.

00:22:11.000 --> 00:22:17.000
 It's just a matter of we need to put those VFDs on there so we can control them and actually turn them down.

00:22:17.000 --> 00:22:20.000
 So there must be smaller pumps that are used.

00:22:20.000 --> 00:22:21.000
 Yes, sir. Right.

00:22:21.000 --> 00:22:23.000
 Currently, we use smaller pumps.

00:22:23.000 --> 00:22:28.000
 And with that, also, like I said, we're going to build a building for the VFDs.

00:22:28.000 --> 00:22:29.000
 So VFDs will be separate.

00:22:29.000 --> 00:22:32.000
 We'll also help with any kind of emergencies.

00:22:32.000 --> 00:22:36.000
 And are any of the existing pumps on VFD or are they all soft?

00:22:36.000 --> 00:22:39.000
 They're all on VFDs. The smaller ones are.

00:22:39.000 --> 00:22:40.000
 Okay. Yeah.

00:22:40.000 --> 00:22:43.000
 All right.

00:22:43.000 --> 00:22:49.000
 So I just saw we only had two bidders in this case.

00:22:49.000 --> 00:22:50.000
 Yes, sir.

00:22:50.000 --> 00:22:54.000
 Any reason why Sunt didn't bid this one?

00:22:54.000 --> 00:22:57.000
 Because they've been involved with these before, correct?

00:22:57.000 --> 00:22:59.000
 Yes, and that's what we held.

00:22:59.000 --> 00:23:03.000
 Actually, we actually held two walkthroughs to invite bidders.

00:23:03.000 --> 00:23:07.000
 And that's what we received was Arch Western and Felix.

00:23:07.000 --> 00:23:09.000
 I have no idea why Sunt wasn't involved.

00:23:09.000 --> 00:23:10.000
 And walkthroughs?

00:23:10.000 --> 00:23:11.000
 No, sir.

00:23:11.000 --> 00:23:13.000
 Not that I know of.

00:23:13.000 --> 00:23:19.000
 Actually, the Felix bid was actually -- they were going to combine with Schofield to do --

00:23:19.000 --> 00:23:22.000
 kind of team up to actually do the project.

00:23:22.000 --> 00:23:25.000
 So lots of work going on in the region.

00:23:25.000 --> 00:23:26.000
 Just busy.

00:23:26.000 --> 00:23:27.000
 Yes.

00:23:27.000 --> 00:23:29.000
 Yeah.

00:23:29.000 --> 00:23:34.000
 Sunt's already here doing some wastewater treatment work, aren't they?

00:23:34.000 --> 00:23:35.000
 Yes, sir.

00:23:35.000 --> 00:23:41.000
 They're going to do the CMAR over at the concrete water reclamation plant.

00:23:41.000 --> 00:23:42.000
 I saw that.

00:23:42.000 --> 00:23:48.000
 I remember that Arch Western was much lower in their bid.

00:23:48.000 --> 00:23:56.000
 But they were less rated in your overall rating of them versus Sunt.

00:23:56.000 --> 00:23:57.000
 Yes, sir.

00:23:57.000 --> 00:24:06.000
 What we went through was we had a -- actually, evaluation for the CMAR and Arch Western and Sunt.

00:24:06.000 --> 00:24:08.000
 They were both involved.

00:24:08.000 --> 00:24:13.000
 And for that aspect, Sunt was chosen just because of their CMAR abilities.

00:24:13.000 --> 00:24:16.000
 And now, I mean, of course, we're going to have coming up expansion.

00:24:16.000 --> 00:24:19.000
 I'll just tell you there's going to be an expansion at Ray Roberts.

00:24:19.000 --> 00:24:23.000
 And that will be also construction manager at risk as well.

00:24:23.000 --> 00:24:28.000
 So we're going to entertain, and in fact, it's going to be opening pretty soon.

00:24:28.000 --> 00:24:34.000
 So we're going to entertain whoever, hopefully, will get some more players in that market.

00:24:34.000 --> 00:24:36.000
 I hope so.

00:24:36.000 --> 00:24:39.000
 And I think I voiced my concern before with the CMAR.

00:24:39.000 --> 00:24:45.000
 I understand the reasoning in it that sometimes the lowest bid is not the best bid.

00:24:45.000 --> 00:24:53.000
 But I questioned that bid because Arch Western, I thought, you can't really beat a company that large.

00:24:53.000 --> 00:25:04.000
 And they'll correct things, but correct things that you think aren't going well is what I mean for that.

00:25:04.000 --> 00:25:06.000
 But now they're rated really high.

00:25:06.000 --> 00:25:09.000
 And this is just design, bid, build, Mr. Chief?

00:25:09.000 --> 00:25:11.000
 Yeah.

00:25:11.000 --> 00:25:12.000
 Just design, bid, build?

00:25:12.000 --> 00:25:13.000
 Well, it's going to be build.

00:25:13.000 --> 00:25:14.000
 That's pretty complicated.

00:25:14.000 --> 00:25:17.000
 That's probably the most complicated contract you can make.

00:25:17.000 --> 00:25:20.000
 But what I meant was that it's DBB.

00:25:20.000 --> 00:25:25.000
 It's not a CMAR project.

00:25:25.000 --> 00:25:27.000
 Further questions?

00:25:27.000 --> 00:25:30.000
 Kyle Pedigo, planning and engineering manager for water utilities.

00:25:30.000 --> 00:25:40.000
 So during the evaluation, during the CMAR evaluation, Sunt scored higher on the CMAR delivery method.

00:25:40.000 --> 00:25:46.000
 And Arch Western was more of a traditional delivery method, which this project falls under.

00:25:46.000 --> 00:25:50.000
 So that's why the ratings are different between the two projects.

00:25:50.000 --> 00:25:57.000
 I understand the difference between the two categories of letting the CMAR and the design build bid.

00:25:57.000 --> 00:26:07.000
 And I would argue with you that this is the more complicated thing to get done than a CMAR bid.

00:26:07.000 --> 00:26:14.000
 But that's just my opinion and I want to continue to voice that because I have concern about these type of bids.

00:26:14.000 --> 00:26:18.000
 And I'm not trying to isolate you guys out for this and we make that clear.

00:26:18.000 --> 00:26:34.000
 But I believe that we are stacked deep with bids with contracts in this city that are just given according to sometimes a subjective reasoning.

00:26:34.000 --> 00:26:39.000
 And you would argue that they're not that the rules are playing, I would think.

00:26:39.000 --> 00:26:41.000
 And I disagree with you.

00:26:41.000 --> 00:26:50.000
 So I've sat in conversations with evaluations that were subjective.

00:26:50.000 --> 00:26:53.000
 Words were used anyway.

00:26:53.000 --> 00:26:57.000
 I hope the city council hears me on this because that's who I'm really talking to.

00:26:57.000 --> 00:26:58.000
 So thank you for your time.

00:26:58.000 --> 00:26:59.000
 And I apologize.

00:26:59.000 --> 00:27:03.000
 And I did not mean to single you out on this and make that clear.

00:27:03.000 --> 00:27:04.000
 It's the concept.

00:27:04.000 --> 00:27:07.000
 So that's all I got.

00:27:07.000 --> 00:27:09.000
 >> Further questions?

00:27:09.000 --> 00:27:11.000
 Thank you very much for coming up.

00:27:11.000 --> 00:27:16.000
 Do we have a motion to approve PUB 24110?

00:27:16.000 --> 00:27:18.000
 >> So moved.

00:27:18.000 --> 00:27:19.000
 >> Mr. Taylor, moved.

00:27:19.000 --> 00:27:21.000
 Do we have a second?

00:27:21.000 --> 00:27:22.000
 >> Second.

00:27:22.000 --> 00:27:23.000
 >> Thank you, Mr. Pluck.

00:27:23.000 --> 00:27:24.000
 All in favor say aye.

00:27:24.000 --> 00:27:25.000
 >> Aye.

00:27:25.000 --> 00:27:27.000
 >> Opposed?

00:27:27.000 --> 00:27:28.000
 Carries.

00:27:28.000 --> 00:27:29.000
 Thank you.

00:27:29.000 --> 00:27:31.000
 Management reports.

00:27:31.000 --> 00:27:36.000
 Thank you.

00:27:36.000 --> 00:27:41.000
 >> Taking a minute there.

00:27:41.000 --> 00:27:46.000
 I don't want Billy coming in here getting after me, the other Billy.

00:27:46.000 --> 00:27:48.000
 Frank Dixon, assistant city manager.

00:27:48.000 --> 00:27:50.000
 We have nothing at this time.

00:27:50.000 --> 00:27:55.000
 If there's anything the board would like to hear, we'd be happy to present it.

00:27:55.000 --> 00:27:56.000
 >> That's fine.

00:27:56.000 --> 00:27:57.000
 Thank you.

00:27:57.000 --> 00:27:59.000
 That brings us to concluding items.

00:27:59.000 --> 00:28:04.000
 Does any board member wish to have a future item presented on the agenda or have something

00:28:04.000 --> 00:28:06.000
 to say to the public?

00:28:06.000 --> 00:28:09.000
 This is where you get to speak, Aaron.

00:28:09.000 --> 00:28:10.000
 >> Good morning.

00:28:10.000 --> 00:28:11.000
 Aaron Newquist.

00:28:11.000 --> 00:28:12.000
 Glad to be here.

00:28:12.000 --> 00:28:16.000
 I've been a resident of Denton for the last 12 years.

00:28:16.000 --> 00:28:22.000
 Plus some time in the late '90s at UNT.

00:28:22.000 --> 00:28:29.000
 And just my background is I'm a 20-year banker, the last 15 here in Denton, currently with

00:28:29.000 --> 00:28:32.000
 American National Bank and Trust for the past five years.

00:28:32.000 --> 00:28:37.000
 My son Brady is a graduate of Denton Ryan High School and off to Texas Tech.

00:28:37.000 --> 00:28:44.000
 But, again, just pleased to be here and look forward to serving with you all.

00:28:44.000 --> 00:28:45.000
 >> Thank you.

00:28:45.000 --> 00:28:46.000
 All right.

00:28:46.000 --> 00:28:47.000
 That brings us -- yes, welcome.

00:28:47.000 --> 00:28:50.000
 Glad to have you.

00:28:50.000 --> 00:28:52.000
 That brings us to our work session.

00:28:52.000 --> 00:28:58.000
 We receive a report, hold a discussion, and give staff direction on the fiscal year 2024-25

00:28:58.000 --> 00:29:08.000
 preliminary utility forecast for solid waste, water, wastewater, and electric.

00:29:08.000 --> 00:29:12.000
 >> Okay.

00:29:12.000 --> 00:29:18.000
 Good morning, members of PUB.

00:29:18.000 --> 00:29:19.000
 My name is Matt Hamilton.

00:29:19.000 --> 00:29:24.000
 I'm the budget manager with the city here today to present what will be the first in

00:29:24.000 --> 00:29:29.000
 a series of budget presentations for you over the next couple weeks.

00:29:29.000 --> 00:29:37.000
 Today's presentation focuses on where the utilities funds ended for fiscal year 2023.

00:29:37.000 --> 00:29:44.000
 And then also just to talk a little bit about some of the assumptions that we are putting

00:29:44.000 --> 00:29:49.000
 together for you for the fiscal year 2025 budget.

00:29:49.000 --> 00:29:59.000
 So our anticipation is to bring forward on June 24th all the utility performance budgets

00:29:59.000 --> 00:30:06.000
 for next year, which will include all the budgetary requests, supplementals, baselines,

00:30:06.000 --> 00:30:13.000
 in addition to the five-year capital improvement plan for each of the funds, as well as an

00:30:13.000 --> 00:30:17.000
 outlook on preliminary rates at that time as well.

00:30:17.000 --> 00:30:24.000
 So certainly a very detailed presentation coming up for you on June 24th.

00:30:24.000 --> 00:30:30.000
 The presentation today simply provides just an overview of the process and where we ended

00:30:30.000 --> 00:30:35.000
 the prior fiscal year.

00:30:35.000 --> 00:30:41.000
 So as I mentioned, we'll cover the upcoming budget process, what that looks like, some

00:30:41.000 --> 00:30:45.000
 of the economic conditions that we're seeing, financial assumptions that we're making for

00:30:45.000 --> 00:30:53.000
 2025, and then also the 2023 financial performance.

00:30:53.000 --> 00:30:59.000
 So just to start, I know many members of the board have gone through the budget process

00:30:59.000 --> 00:31:05.000
 before, but for the new member, just wanted to provide an overview of what the utility

00:31:05.000 --> 00:31:12.000
 budget process looks like, so the city's fiscal year begins on October 1st.

00:31:12.000 --> 00:31:19.000
 In January and February timeframe, we do a budget kickoff citywide, which includes both

00:31:19.000 --> 00:31:22.000
 utility and non-utility departments.

00:31:22.000 --> 00:31:29.000
 The departments have approximately 30 to 45 days to compile their budgets, and budget

00:31:29.000 --> 00:31:31.000
 submissions are due in March.

00:31:31.000 --> 00:31:37.000
 Following the budget submissions, the finance department and the utility departments get

00:31:37.000 --> 00:31:45.000
 together to review the submissions and determine financial feasibility, at which time we then

00:31:45.000 --> 00:31:50.000
 schedule meetings with the city manager's office to review the requests and the financial

00:31:50.000 --> 00:31:59.000
 forecasts, which then brings us here today, June timeframe, to present these findings

00:31:59.000 --> 00:32:08.000
 and preliminary budgets to the PUB for your review and recommendation before we then submit

00:32:08.000 --> 00:32:13.000
 it to council and hold workshops with council in July and August.

00:32:13.000 --> 00:32:21.000
 Following the workshops with the city council, we have public hearings for any feedback from

00:32:21.000 --> 00:32:24.000
 the public regarding the proposed budgets.

00:32:24.000 --> 00:32:32.000
 Finally, it culminates in budget adoption late September, and the process starts all

00:32:32.000 --> 00:32:36.000
 over again for the next fiscal year.

00:32:36.000 --> 00:32:41.000
 We just wanted to talk a little bit about some of the economic conditions that were

00:32:41.000 --> 00:32:48.000
 seen broadly throughout the city, but in particular with the utilities.

00:32:48.000 --> 00:32:55.000
 You know, Denton has seen quite a bit of growth over the last couple years, and we anticipate

00:32:55.000 --> 00:33:02.000
 quite a bit more growth within the city, and the question is how to pay for that growth

00:33:02.000 --> 00:33:08.000
 with today's dollars, because those future developments aren't here quite yet, but the

00:33:08.000 --> 00:33:14.000
 infrastructure is needed in order to move forward with those developments and growth.

00:33:14.000 --> 00:33:22.000
 So in addition to the growth piece of it, there's also the responsibility to maintain

00:33:22.000 --> 00:33:29.000
 our existing infrastructure, and so we do have a number of capital needs, large capital

00:33:29.000 --> 00:33:36.000
 needs, that you'll see on June 24th as part of the CIP plan that we're looking to address.

00:33:36.000 --> 00:33:42.000
 And finally, the big challenge over the last couple years, but this year as well, has been

00:33:42.000 --> 00:33:51.000
 inflation and the cost of goods and services has gone up quite a bit, especially, you know,

00:33:51.000 --> 00:33:59.000
 cost of personnel and, you know, in addition to materials and supplies.

00:33:59.000 --> 00:34:05.000
 But some of our current opportunities that we're looking at to fund some of these financial

00:34:05.000 --> 00:34:11.000
 needs is we've really taken a close look at federal and state funding opportunities to

00:34:11.000 --> 00:34:18.000
 fund some of these large infrastructure projects, and we'll be pursuing all of those available

00:34:18.000 --> 00:34:25.000
 programs, bringing to you any opportunities that we find where we can leverage our existing

00:34:25.000 --> 00:34:29.000
 dollars to help pay for some of that growth.

00:34:29.000 --> 00:34:37.000
 As part of that, we've also reexamined our debt portfolio, our five-year CIP, to, you

00:34:37.000 --> 00:34:44.000
 know, refocus our priorities on what needs to be accomplished, what infrastructure we

00:34:44.000 --> 00:34:47.000
 can afford.

00:34:47.000 --> 00:34:54.000
 And finally, you know, looking at some potential rate increases across the utilities as we've

00:34:54.000 --> 00:35:00.000
 brought forward previously, and I know through the last budget cycle, we as a city haven't

00:35:00.000 --> 00:35:08.000
 raised utility rates really since 2017, and there were a number of years, 2019, 2020,

00:35:08.000 --> 00:35:14.000
 2021, where we actually decreased rates pretty significantly.

00:35:14.000 --> 00:35:21.000
 So I know DME had implemented a midyear rate increase this year.

00:35:21.000 --> 00:35:30.000
 We did increase wastewater rates last year, but, you know, just given the costs today

00:35:30.000 --> 00:35:36.000
 versus, you know, what will be eight years ago, they're simply not the same.

00:35:36.000 --> 00:35:45.000
 So our financial assumptions going into 2025, we're assuming that the city is growing at

00:35:45.000 --> 00:35:53.000
 nearly a 3 percent rate, which is contributing some increased system demands.

00:35:53.000 --> 00:35:59.000
 As I mentioned, we have a lot of growth that we're looking at in the future.

00:35:59.000 --> 00:36:05.000
 Part of that, a significant part of that, is the hunter coal developments, which we

00:36:05.000 --> 00:36:09.000
 have accounted for, as you'll see in the five-year CIP.

00:36:09.000 --> 00:36:16.000
 Solid Waste just wanted to note that we base their forecasts on customer counts, tonnage,

00:36:16.000 --> 00:36:18.000
 and service frequency.

00:36:18.000 --> 00:36:24.000
 Water and wastewater, it's a consumption forecast based on actual consumption.

00:36:24.000 --> 00:36:30.000
 And then I had mentioned some alternative funding options, so specific to water and

00:36:30.000 --> 00:36:37.000
 wastewater, we've done quite a bit of work on the WIFIA program and the SWIFT program,

00:36:37.000 --> 00:36:44.000
 WIFIA being a federal program through the EPA and SWIFT being an infrastructure program

00:36:44.000 --> 00:36:47.000
 through the Texas Water Development Board.

00:36:47.000 --> 00:36:57.000
 And so we'll be bringing to you funding options, which include both of those programs.

00:36:57.000 --> 00:37:03.000
 And finally, just that we have included an updated assumption based on the media rate

00:37:03.000 --> 00:37:09.000
 adjustments for electric in next year's financials.

00:37:09.000 --> 00:37:16.000
 So getting into specific funds, for the Solid Waste Fund for '24-'25, we do anticipate

00:37:16.000 --> 00:37:23.000
 growth of about 2.6 percent in residential customers, 2 percent in commercial front-load,

00:37:23.000 --> 00:37:28.000
 side-load poles, and 2.1 percent growth in landfill customers.

00:37:28.000 --> 00:37:31.000
 This is relatively in line with prior years.

00:37:31.000 --> 00:37:37.000
 Solid waste is more or less one of the more predictable funds.

00:37:37.000 --> 00:37:44.000
 We are in the process of concluding a cost of service study, which we anticipate the

00:37:44.000 --> 00:37:47.000
 completion of which will be this month.

00:37:47.000 --> 00:37:54.000
 We received some draft documentation from the consultant, and so we'll be bringing

00:37:54.000 --> 00:38:00.000
 that information forward to you over the next several weeks and months.

00:38:00.000 --> 00:38:03.000
 There is the potential, as I mentioned, for a rate increase.

00:38:03.000 --> 00:38:10.000
 Solid waste was one utility where they have not had any type of rate increase since 2017.

00:38:10.000 --> 00:38:14.000
 The cost to the vehicles has increased substantially.

00:38:14.000 --> 00:38:18.000
 The cost to personnel has increased substantially.

00:38:18.000 --> 00:38:24.000
 So it may be something that we look at for fiscal year 2025.

00:38:24.000 --> 00:38:34.000
 On the expense side, we will include a contribution, as we've done in the past, for closure post-closure.

00:38:34.000 --> 00:38:42.000
 We do anticipate citywide a compensation adjustment for inflation and the ongoing competitive

00:38:42.000 --> 00:38:45.000
 labor market that we're seeing.

00:38:45.000 --> 00:38:51.000
 And then debt service for the Solid Waste Fund is projected to increase in 2025.

00:38:51.000 --> 00:38:58.000
 This is due to the bond issuance that we are in the process of completing this year,

00:38:58.000 --> 00:39:06.000
 which the debt service will start next year, primarily the $2 million for the fleet shop

00:39:06.000 --> 00:39:13.000
 at Solid Waste and then $1.8 million in vehicles.

00:39:13.000 --> 00:39:21.000
 So this is a graphic that we've shown in the past that just details the 10-year growth

00:39:21.000 --> 00:39:27.000
 projections for residential customer accounts, front-load, side-load commercial, the roll-off

00:39:27.000 --> 00:39:31.000
 hauls, and landfill transactions.

00:39:31.000 --> 00:39:38.000
 What we included on the very left-hand column is our 2023 estimate where we thought those

00:39:38.000 --> 00:39:41.000
 numbers would come in.

00:39:41.000 --> 00:39:48.000
 The second column is 2023 actuals, where the numbers actually came in for 2023.

00:39:48.000 --> 00:39:52.000
 For the most part, we were very, very close.

00:39:52.000 --> 00:40:03.000
 We think these trends will continue, as noted here, going into 2025 as well.

00:40:03.000 --> 00:40:09.000
 So taking a look at the Solid Waste Fund and the financial performance, this is the fiscal

00:40:09.000 --> 00:40:15.000
 year 2023, which ended September 30th of last year.

00:40:15.000 --> 00:40:24.000
 So the fund, from a revenue perspective, ended about $1 million higher than budget, which

00:40:24.000 --> 00:40:27.000
 is always good.

00:40:27.000 --> 00:40:35.000
 And as you'll see at the bottom, the net income, we did have a use of reserve of $207,000.

00:40:35.000 --> 00:40:42.000
 However, the budget was originally budgeted to use $2.3 million in reserve.

00:40:42.000 --> 00:40:51.000
 So the fund ended better than we thought it would, which in large part had to do with

00:40:51.000 --> 00:40:57.000
 non-rate revenues associated with some of the special waste that was collected at the

00:40:57.000 --> 00:41:02.000
 landfill, along with just some reduction in expenses, O&M expenses.

00:41:02.000 --> 00:41:05.000
 So, overall, the fund did very well.

00:41:05.000 --> 00:41:12.000
 What you see in the 2024 budget that we had included in the current year was, again, a

00:41:12.000 --> 00:41:21.000
 $2 million use of reserve, and the annual budgeting of this use of reserve is really

00:41:21.000 --> 00:41:26.000
 intended to keep rates low, but there's only so many years that we're able to budget this

00:41:26.000 --> 00:41:34.000
 without increasing rates and revenue.

00:41:34.000 --> 00:41:41.000
 So moving to the water fund, we anticipate a 3.4% growth in residential customers for

00:41:41.000 --> 00:41:46.000
 water and 5.3% growth in commercial customers.

00:41:46.000 --> 00:41:51.000
 We have included some additional factors, such as 100 coal and the timing of those developments

00:41:51.000 --> 00:41:56.000
 in the five-year CIP and in their long-term operating budgets.

00:41:56.000 --> 00:42:04.000
 Revenue projections, we anticipate a 3% increase in rate revenues, just simply based on

00:42:04.000 --> 00:42:05.000
 growth.

00:42:05.000 --> 00:42:11.000
 Something else that we are including in our long-term financial forecasts is a reduction

00:42:11.000 --> 00:42:13.000
 for water conservation.

00:42:13.000 --> 00:42:19.000
 So the department is very focused on, you know, maintaining our long-term resources

00:42:19.000 --> 00:42:26.000
 and how we use those resources, and as part of that, as conservation efforts are implemented

00:42:26.000 --> 00:42:33.000
 over the next several years and we see residents potentially decreasing their consumption,

00:42:33.000 --> 00:42:42.000
 we would then see a decrease in revenues associated with that.

00:42:42.000 --> 00:42:50.000
 As I mentioned before, the SWIF funding, that's something that we've been actively pursuing

00:42:50.000 --> 00:42:59.000
 and would be a potential revenue source for us to use to fund some of the infrastructure.

00:42:59.000 --> 00:43:05.000
 On the expense projection side, as I had mentioned, citywide compensation adjustments for inflation

00:43:05.000 --> 00:43:10.000
 and the competitive labor market that we're seeing, and we do anticipate an increase in

00:43:10.000 --> 00:43:16.000
 overall debt service for the water fund based on the $20 million issued for the Ray Roberts

00:43:16.000 --> 00:43:26.000
 water treatment expansion this year, as well as the $12.2 million for water line replacements.

00:43:26.000 --> 00:43:32.000
 So taking a look at the water funds, in 2023 we budgeted $62.1 million.

00:43:32.000 --> 00:43:41.000
 Actuals were $55.4 million, budgeted expenditures were $60 million, or $63 million, excuse me,

00:43:41.000 --> 00:43:44.000
 and $49 million in actuals.

00:43:44.000 --> 00:43:50.000
 The reason that this number looks so different, budget to actual, is because we had anticipated

00:43:50.000 --> 00:43:58.000
 receiving external funding, which we did not receive in 2023.

00:43:58.000 --> 00:44:05.000
 So, overall, we had anticipated the use of reserve of $908,000.

00:44:05.000 --> 00:44:10.000
 As the fund ended up, we were positive $5.4 million.

00:44:10.000 --> 00:44:16.000
 What's that?

00:44:16.000 --> 00:44:31.000
 The external funding, that had to do with TEXDOT, some TEXDOT funding.

00:44:31.000 --> 00:44:34.000
 And your revenue funded capital was way down.

00:44:34.000 --> 00:44:44.000
 Yes, and the impact fee actuals, so if a project that is budgeted to use impact fees does not

00:44:44.000 --> 00:44:48.000
 move forward due to, you know, schedule or any other reason.

00:44:48.000 --> 00:44:49.000
 That's what I was asking.

00:44:49.000 --> 00:44:53.000
 Yeah, we don't make a transfer of the impact fees.

00:44:53.000 --> 00:44:54.000
 Right.

00:44:54.000 --> 00:44:55.000
 Yep.

00:44:55.000 --> 00:45:02.000
 I didn't know if it was a specific project.

00:45:02.000 --> 00:45:03.000
 Not to my knowledge.

00:45:03.000 --> 00:45:07.000
 I believe that there is a specific TEXDOT project that this is related to.

00:45:07.000 --> 00:45:15.000
 I don't know what it is offhand, but it did not relate to Hunter Cole.

00:45:15.000 --> 00:45:24.000
 And then for 2024, you can see the budget there as well, $58.7 million.

00:45:24.000 --> 00:45:31.000
 So those impact fees, are those tied to Hunter Cole or another specific project, or is that

00:45:31.000 --> 00:45:35.000
 $7 million just kind of a placeholder for '24?

00:45:35.000 --> 00:45:37.000
 On the impact fees?

00:45:37.000 --> 00:45:38.000
 Budget.

00:45:38.000 --> 00:45:39.000
 Yeah.

00:45:39.000 --> 00:45:40.000
 I don't know offhand.

00:45:40.000 --> 00:45:45.000
 I don't believe we do have a number of Hunter Cole infrastructure projects that are coming

00:45:45.000 --> 00:45:50.000
 up that we anticipate using the impact fees for.

00:45:50.000 --> 00:45:55.000
 It's possible that some of those projects were associated with that, although we do

00:45:55.000 --> 00:46:00.000
 have a number of other water and wastewater projects.

00:46:00.000 --> 00:46:06.000
 This is just water specific, but projects that we anticipated using impact fee funds

00:46:06.000 --> 00:46:13.000
 on.

00:46:13.000 --> 00:46:22.000
 One other note that I just want to make on the impact fees is that not all impact fees

00:46:22.000 --> 00:46:25.000
 are used as current year revenue funding.

00:46:25.000 --> 00:46:32.000
 That we do use impact fees where eligible to pay the debt service of impact fee eligible

00:46:32.000 --> 00:46:33.000
 projects.

00:46:33.000 --> 00:46:41.000
 So some of the impact fee usage is for projects that we may have issued debt for over the

00:46:41.000 --> 00:46:46.000
 last several years as they were identified in the prior impact fee study.

00:46:46.000 --> 00:46:50.000
 So it's carried as an asset before then?

00:46:50.000 --> 00:46:55.000
 Where does the impact fee go before you put it into your revenue?

00:46:55.000 --> 00:46:57.000
 It's in an impact fee fund.

00:46:57.000 --> 00:46:58.000
 We segregate it.

00:46:58.000 --> 00:46:59.000
 And that's an asset?

00:46:59.000 --> 00:47:00.000
 Yes.

00:47:00.000 --> 00:47:01.000
 Yeah.

00:47:01.000 --> 00:47:15.000
 So this is a graphic of water production.

00:47:15.000 --> 00:47:23.000
 The blue area is representative of the five year average of billable volume.

00:47:23.000 --> 00:47:27.000
 The yellow is the 2023 actuals.

00:47:27.000 --> 00:47:31.000
 The green is 2024 budget.

00:47:31.000 --> 00:47:36.000
 And red is the current year 2024 actuals.

00:47:36.000 --> 00:47:45.000
 So, you know, what we've seen, what we saw in 2023 was the consumption was quite a bit

00:47:45.000 --> 00:47:54.000
 higher starting in June over both the five year average and our projected budget increase.

00:47:54.000 --> 00:48:03.000
 So that's largely what contributed to the substantial increase in revenue for the water

00:48:03.000 --> 00:48:04.000
 fund last year.

00:48:04.000 --> 00:48:12.000
 As we look at the fund year to date, you'll see that up until January it was trending

00:48:12.000 --> 00:48:14.000
 relatively to budget.

00:48:14.000 --> 00:48:28.000
 We did see an increase in March and a decrease back to really the average there in April.

00:48:28.000 --> 00:48:35.000
 In terms of water demand, this is a graphic I think you may have seen several times before,

00:48:35.000 --> 00:48:39.000
 but this is really looking at our capacity.

00:48:39.000 --> 00:48:47.000
 And what this graphic shows is in 2028, as was presented earlier, we will need to complete

00:48:47.000 --> 00:48:55.000
 the Lake Ray Roberts water treatment plant expansion in order to be able to produce enough

00:48:55.000 --> 00:48:57.000
 capacity.

00:48:57.000 --> 00:49:02.000
 The blue shaded area is our 2023 maximum daily demand.

00:49:02.000 --> 00:49:06.000
 The areas in red is the anticipated city growth.

00:49:06.000 --> 00:49:17.000
 And the black line is the treatment plant capacity.

00:49:17.000 --> 00:49:24.000
 So the wastewater fund, we anticipate a 3.4% growth in residential customers, 4.2% growth

00:49:24.000 --> 00:49:31.000
 in commercial customers, 3.7% increase in rate revenues based on that growth.

00:49:31.000 --> 00:49:37.000
 And as we presented last year, we do feel that the wastewater fund will need some type

00:49:37.000 --> 00:49:42.000
 of rate increase or rate adjustment going into 2025.

00:49:42.000 --> 00:49:49.000
 On the expense projection side, as with all funds, we anticipate that citywide compensation

00:49:49.000 --> 00:49:54.000
 and we do anticipate an increase in debt service for the capital improvements.

00:49:54.000 --> 00:49:59.000
 $24 million was issued this year for the concrete water reclamation plant, as well as $8 million

00:49:59.000 --> 00:50:05.000
 for wastewater line replacements.

00:50:05.000 --> 00:50:15.000
 So the wastewater fund financial performance for 2023, the actual revenue was $40.2 million,

00:50:15.000 --> 00:50:23.000
 actual expenditures $51.8 million, for a use of reserve of $11.5 million.

00:50:23.000 --> 00:50:29.000
 Something that is important to note here with the wastewater fund, just looking at it, is

00:50:29.000 --> 00:50:40.000
 that in 2022, we had actually received $10 million from TexDOT in September that we had

00:50:40.000 --> 00:50:44.000
 not anticipated to receive until 2023.

00:50:44.000 --> 00:50:53.000
 So the use of reserve, that $10 million, 10 of the 10.2, was anticipated to be used because

00:50:53.000 --> 00:50:56.000
 the money was sitting in the fund balance at the end of the year.

00:50:56.000 --> 00:51:02.000
 So per accounting standards, we have to book the revenue in the period that it was received

00:51:02.000 --> 00:51:11.000
 and there wasn't a good way around, you know, budgeting it any other way.

00:51:11.000 --> 00:51:21.000
 So, you know, really as we look at the financials, we were down about $1.3 million in the wastewater

00:51:21.000 --> 00:51:29.000
 fund, but something else to keep in mind is also that this was prior to the rate adjustment

00:51:29.000 --> 00:51:31.000
 that was made in 2024.

00:51:31.000 --> 00:51:35.000
 So as we were looking at the financials last year and the year before, we saw that there

00:51:35.000 --> 00:51:42.000
 was a use of reserve, you know, that's what drove the 11 percent rate increase in wastewater

00:51:42.000 --> 00:51:44.000
 in 2024.

00:51:44.000 --> 00:51:51.000
 And just looking at 2024, and we'll get into it more on the 24th, but revenues, you know,

00:51:51.000 --> 00:51:58.000
 have increased with that rate increase to where, you know, the fund is looking much

00:51:58.000 --> 00:52:05.000
 better.

00:52:05.000 --> 00:52:09.000
 An overview of the drainage division, which is part of the wastewater fund.

00:52:09.000 --> 00:52:17.000
 So not a whole lot to note here other than in the non-residential drainage fees, there

00:52:17.000 --> 00:52:22.000
 was a refund, a fairly large refund that was made in 2023.

00:52:22.000 --> 00:52:30.000
 You'll see the non-residential drainage fees came in at $2.6 million rather than $3.6 million,

00:52:30.000 --> 00:52:37.000
 and that was just due to some billing issues that needed to be corrected.

00:52:37.000 --> 00:52:43.000
 So the impact of that was a reduction in the capital and admin transfers on the expenditure

00:52:43.000 --> 00:52:51.000
 side to reduce it down to the amount of revenue that was actually received and could be used

00:52:51.000 --> 00:52:52.000
 by the drainage fund.

00:52:52.000 --> 00:53:01.000
 So the 2024 budget, as you'll see, looks very similar to the 2023 actuals.

00:53:01.000 --> 00:53:09.000
 And we'll go through year-to-date 2024 on the 24th, but drainage is trending very well.

00:53:09.000 --> 00:53:24.000
 A large refund.

00:53:24.000 --> 00:53:34.000
 Yes, there were some entities that were exempt that the billing system had billed, and so

00:53:34.000 --> 00:53:37.000
 that's what drove the refund for those properties.

00:53:37.000 --> 00:53:40.000
 Oh, okay.

00:53:40.000 --> 00:53:43.000
 Interesting.

00:53:43.000 --> 00:53:46.000
 Okay.

00:53:46.000 --> 00:53:54.000
 The electric fund for 2025, we anticipate a 7.53% growth in retail sales, megawatt hours

00:53:54.000 --> 00:53:57.000
 from known residential and commercial projects.

00:53:57.000 --> 00:54:05.000
 We do have an ongoing cost of service study for the electric fund, and you know, which

00:54:05.000 --> 00:54:10.000
 may result in a small potential rate increase.

00:54:10.000 --> 00:54:18.000
 Again, citywide compensation adjustments will be part of the electric fund performa and

00:54:18.000 --> 00:54:21.000
 increases in debt service for capital improvements.

00:54:21.000 --> 00:54:29.000
 The electric fund issued about 60 million this year, but had reduced it from 82.5, so

00:54:29.000 --> 00:54:38.000
 the increase in debt service is actually lower than what it was originally planned to be.

00:54:38.000 --> 00:54:44.000
 So the electric fund, this is something I know you've seen before as the midyear rate

00:54:44.000 --> 00:54:48.000
 adjustment was presented to you earlier this year.

00:54:48.000 --> 00:54:56.000
 But the electric fund ended fiscal year 2023 with $334 million in revenue and $365 million

00:54:56.000 --> 00:55:03.000
 in expenditures, resulting in a use of reserve of $31.2 million.

00:55:03.000 --> 00:55:12.000
 For 2024, the budget had included $290 million in revenue and $308 million in expenditures,

00:55:12.000 --> 00:55:30.000
 which we had anticipated a use of reserve of $17 million.

00:55:30.000 --> 00:55:41.000
 I don't have it offhand, but it's certainly something that we'll cover on the 24th.

00:55:41.000 --> 00:55:48.000
 The electric forecast for retail sales, this is just a graphical representation of that

00:55:48.000 --> 00:55:59.000
 about 7.5 percent that I noted on the prior slide.

00:55:59.000 --> 00:56:05.000
 And just a quick overview of the electric specific financial assumptions.

00:56:05.000 --> 00:56:11.000
 Earlier this year, we did finance $31.26 million of energy expenses.

00:56:11.000 --> 00:56:17.000
 They were financed with five-year utility system revenue bonds, which are self-supported

00:56:17.000 --> 00:56:19.000
 by DME revenue.

00:56:19.000 --> 00:56:28.000
 The cost of service study results and recommendations are anticipated in the next few weeks, and

00:56:28.000 --> 00:56:34.000
 our anticipation is that the primary consideration will be on the fixed cost facility and usage

00:56:34.000 --> 00:56:35.000
 charges.

00:56:35.000 --> 00:56:44.000
 And additionally, we have a value of solar study, which we will incorporate the results

00:56:44.000 --> 00:56:51.000
 and recommendations as part of the 2025 budget.

00:56:51.000 --> 00:56:58.000
 So, looking forward, as I had mentioned a number of times, June 24th is when we intend

00:56:58.000 --> 00:57:05.000
 to bring forward the 2025 budgets and the detail associated with the budgetary request

00:57:05.000 --> 00:57:07.000
 and the five-year CIP.

00:57:07.000 --> 00:57:16.000
 Following the 24th, we'll come back again on July 8th to review those budgets and have

00:57:16.000 --> 00:57:22.000
 you provide a recommendation, both on the budget and rates.

00:57:22.000 --> 00:57:30.000
 On July 23rd, we will review the utility budgets and rates with Council before coming back

00:57:30.000 --> 00:57:35.000
 to Council again on August 10th for the citywide budget workshop.

00:57:35.000 --> 00:57:41.000
 We intend to have public hearings on September 10th as well as September 17th, along with

00:57:41.000 --> 00:57:46.000
 budget adoption on the 17th.

00:57:46.000 --> 00:57:48.000
 And any questions?

00:57:48.000 --> 00:57:50.000
 Questions?

00:57:50.000 --> 00:57:55.000
 Mr. Rayner, go ahead.

00:57:55.000 --> 00:58:02.000
 Could you go back to one of the earlier slides on the economic conditions, the current challenges,

00:58:02.000 --> 00:58:05.000
 community-wide growth?

00:58:05.000 --> 00:58:16.000
 Sure.

00:58:16.000 --> 00:58:23.000
 So, on the paying for tomorrow with today's dollars, existing new infrastructure needs

00:58:23.000 --> 00:58:32.000
 and such, so, are you getting your growth analysis from, such as the Hunter Cole apartments

00:58:32.000 --> 00:58:36.000
 that are in the pipeline of being approved and such?

00:58:36.000 --> 00:58:42.000
 So, are those really the main factors that drive you as to what part of town we need

00:58:42.000 --> 00:58:46.000
 to be addressing versus whatever?

00:58:46.000 --> 00:58:47.000
 Yeah.

00:58:47.000 --> 00:58:55.000
 So, we have received information from the developers, and we do incorporate that into

00:58:55.000 --> 00:58:57.000
 our financial assumptions.

00:58:57.000 --> 00:59:03.000
 However, we also work very closely with the city of Denton's development services, looking

00:59:03.000 --> 00:59:10.000
 at not just specific developers, but citywide and the projects that they know are in the

00:59:10.000 --> 00:59:13.000
 pipeline.

00:59:13.000 --> 00:59:19.000
 We really couple that with looking back at actuals as well, because we know that there's

00:59:19.000 --> 00:59:24.000
 a lot of interest in development within the city from developers.

00:59:24.000 --> 00:59:27.000
 We know that development timelines often change.

00:59:27.000 --> 00:59:35.000
 And so, you know, what we do is, you know, we base a lot of our trends on actuals, that

00:59:35.000 --> 00:59:42.000
 until those water meters, you know, go in, you know, we're being more conservative with

00:59:42.000 --> 00:59:43.000
 our forecasts.

00:59:43.000 --> 00:59:51.000
 So, we do look at a variety of different data sources in putting these together.

00:59:51.000 --> 01:00:00.000
 You know, especially with Hunter Cole, you know, we're basing our infrastructure needs,

01:00:00.000 --> 01:00:07.000
 you know, on their projected timelines to ensure that that infrastructure is in place,

01:00:07.000 --> 01:00:11.000
 you know, prior to the homes being able to go in.

01:00:11.000 --> 01:00:18.000
 So, you know, as we look at different funding options, I think what's important to us is

01:00:18.000 --> 01:00:26.000
 having that generational equity where the residents today are not burdened with, you

01:00:26.000 --> 01:00:33.000
 know, the entirety of the cost of this infrastructure that ultimately future residents will, you

01:00:33.000 --> 01:00:36.000
 know, enjoy.

01:00:36.000 --> 01:00:39.000
 Does that get to your question?

01:00:39.000 --> 01:00:41.000
 Yes.

01:00:41.000 --> 01:00:44.000
 The old joke used to be the sidewalk that went nowhere.

01:00:44.000 --> 01:00:51.000
 And so that's kind of what I -- and so then what we have, what I see as a driving force

01:00:51.000 --> 01:00:55.000
 further away from our city limits to stretch us is a school board.

01:00:55.000 --> 01:00:58.000
 We've got new high schools coming in.

01:00:58.000 --> 01:01:01.000
 We've got a school over by where Carter's house used to be, I understand.

01:01:01.000 --> 01:01:05.000
 I'd like to go and look at that 80 acres again to make sure that it's not underwater.

01:01:05.000 --> 01:01:11.000
 Would we be involved with the NAVO Elementary behind Prairie House or would that be part

01:01:11.000 --> 01:01:14.000
 of our bailiwick as well?

01:01:14.000 --> 01:01:16.000
 I don't know off hands.

01:01:16.000 --> 01:01:17.000
 Okay.

01:01:17.000 --> 01:01:22.000
 I understand there's going to be a lot of -- besides Hunter Cole, a lot of other -- we're

01:01:22.000 --> 01:01:25.000
 going to have six high schools coming in.

01:01:25.000 --> 01:01:27.000
 Not additional, but we will.

01:01:27.000 --> 01:01:32.000
 And I'm asking you, are you -- and I'm sure you are, but those are items that I think

01:01:32.000 --> 01:01:38.000
 the school may be accelerating beyond a comfort level that the city has.

01:01:38.000 --> 01:01:46.000
 And so I just want to say that, I guess, more than anything else.

01:01:46.000 --> 01:01:48.000
 Without a doubt.

01:01:48.000 --> 01:01:52.000
 The umbrella is really growing, but at the same time, I don't want to just sit out there

01:01:52.000 --> 01:01:56.000
 and we just start counting the spider webs.

01:01:56.000 --> 01:01:58.000
 But yeah, we know it's there.

01:01:58.000 --> 01:02:00.000
 I know that you will do this.

01:02:00.000 --> 01:02:02.000
 I will just say it.

01:02:02.000 --> 01:02:09.000
 The effectiveness and the appropriate spending of money within the time frames that we think,

01:02:09.000 --> 01:02:11.000
 it's a Las Vegas gamble, I understand.

01:02:11.000 --> 01:02:13.000
 And you've got a project, and I can't wait until the 24th.

01:02:13.000 --> 01:02:15.000
 That's going to be a wild one.

01:02:15.000 --> 01:02:21.000
 Those are factors that are accelerating that I don't know if many people in the city

01:02:21.000 --> 01:02:29.000
 realize being the school district is one that's a big catalyst.

01:02:29.000 --> 01:02:34.000
 So to that point, I will tell you that we meet on a constant basis with DISD and with

01:02:34.000 --> 01:02:36.000
 Dr. Wilson and his staff.

01:02:36.000 --> 01:02:39.000
 And that's one of the things that we cover in our two meetings per year with the entire

01:02:39.000 --> 01:02:44.000
 council and with the school board is what their forecasted growth pattern looks like.

01:02:44.000 --> 01:02:49.000
 So we can combine that with what Matt has explained to make sure that we're looking

01:02:49.000 --> 01:02:51.000
 at it in a holistic way.

01:02:51.000 --> 01:02:56.000
 And will we be able to be part of that party under the tent as far as getting to see what

01:02:56.000 --> 01:02:58.000
 the projections are besides the council getting it?

01:02:58.000 --> 01:03:01.000
 So whenever we have those meetings, they are posted for the public.

01:03:01.000 --> 01:03:04.000
 And we do broadcast those as well.

01:03:04.000 --> 01:03:06.000
 I'm just talking about this committee.

01:03:06.000 --> 01:03:09.000
 Yeah.

01:03:09.000 --> 01:03:10.000
 I couldn't answer that.

01:03:10.000 --> 01:03:12.000
 Thank you.

01:03:12.000 --> 01:03:15.000
 I appreciate it.

01:03:15.000 --> 01:03:16.000
 Further questions?

01:03:16.000 --> 01:03:17.000
 Yes, go ahead.

01:03:17.000 --> 01:03:24.000
 Sir, on the waste side, non-waste revenues, special waste, what kind of things would I

01:03:24.000 --> 01:03:31.000
 expect to see in that extremely large increase versus what we thought and what we think in

01:03:31.000 --> 01:03:33.000
 the future?

01:03:33.000 --> 01:03:36.000
 Just give me an idea of what I'm going to see in there.

01:03:36.000 --> 01:03:37.000
 Yeah.

01:03:37.000 --> 01:03:41.000
 So there's really two components, two things that are going on here.

01:03:41.000 --> 01:03:51.000
 One is -- so there's the landfill gate revenue, and then there's also a landfill special waste

01:03:51.000 --> 01:03:57.000
 fee that's collected for any type of, you know, special waste.

01:03:57.000 --> 01:04:02.000
 I don't have that list of what the special waste, you know, includes, but could certainly

01:04:02.000 --> 01:04:03.000
 provide that.

01:04:03.000 --> 01:04:07.000
 Here she comes.

01:04:07.000 --> 01:04:09.000
 Tammy Clausing, deputy director.

01:04:09.000 --> 01:04:11.000
 Special waste includes sludge.

01:04:11.000 --> 01:04:12.000
 We do have construction.

01:04:12.000 --> 01:04:17.000
 We had two new rates last year, construction demolition and shingles.

01:04:17.000 --> 01:04:19.000
 Those were coded to the wrong ones.

01:04:19.000 --> 01:04:24.000
 They'll be coded -- we caught it a few months in, so that's part of what's going on there.

01:04:24.000 --> 01:04:27.000
 But we also have an increase in our scrap metal.

01:04:27.000 --> 01:04:32.000
 We've been collecting a lot more scrap metal at our HCC where they're recycling the public

01:04:32.000 --> 01:04:37.000
 disposal, so a lot -- we've been collecting it off a bulky route, so our scrap metal has

01:04:37.000 --> 01:04:39.000
 gone up increasingly.

01:04:39.000 --> 01:04:42.000
 Our recycling rebate has also increased.

01:04:42.000 --> 01:04:47.000
 We've been doing a very good job in increasing our diversion, so.

01:04:47.000 --> 01:04:57.000
 Thank you.

01:04:57.000 --> 01:04:59.000
 One other real quick question, if I may.

01:04:59.000 --> 01:05:00.000
 Sure.

01:05:00.000 --> 01:05:07.000
 On the electric side, bank debt issuing slower -- I'm sorry, slow projects, kicking cans

01:05:07.000 --> 01:05:11.000
 down the road, savings probably not due to increases.

01:05:11.000 --> 01:05:17.000
 Just what was kind of going on there and how were we able to not put out as much as we

01:05:17.000 --> 01:05:18.000
 expected?

01:05:18.000 --> 01:05:25.000
 Yeah, so it's important, I think, to keep in mind that the budget process really starts

01:05:25.000 --> 01:05:28.000
 18 months prior to when the funding is needed.

01:05:28.000 --> 01:05:36.000
 So, you know, even as, you know, we may have budgeted $82 million, throughout that 18-month

01:05:36.000 --> 01:05:41.000
 time period, you know, we're reviewing the projects in terms of, you know, where they

01:05:41.000 --> 01:05:44.000
 are schedule-wise, what's needed.

01:05:44.000 --> 01:05:46.000
 There may have been some other opportunities.

01:05:46.000 --> 01:05:51.000
 It could be that the project we thought was going to be needed and wasn't.

01:05:51.000 --> 01:06:00.000
 So, the projects are thoroughly scrubbed before they, you know, get to the bond issuance.

01:06:00.000 --> 01:06:07.000
 And the other, you know, is just financial affordability, that some of these projects

01:06:07.000 --> 01:06:14.000
 that are a lower priority are pushed out, because, you know, looking at the financials,

01:06:14.000 --> 01:06:22.000
 we feel like an $82 million, you know, issuance, you know, adds more debt service than we would

01:06:22.000 --> 01:06:23.000
 like in that next fiscal year.

01:06:23.000 --> 01:06:28.000
 So, I think that there's a lot of contributing factors, you know, in terms of what we look

01:06:28.000 --> 01:06:29.000
 at.

01:06:29.000 --> 01:06:35.000
 But some projects could be scheduled, some projects not needed.

01:06:35.000 --> 01:06:36.000
 Just -- it just depends.

01:06:36.000 --> 01:06:37.000
 Thank you.

01:06:37.000 --> 01:06:38.000
 Mm-hmm.

01:06:38.000 --> 01:06:43.000
 Any further -- oh, here comes Devin.

01:06:43.000 --> 01:06:50.000
 So, I just have a -- I guess a couple of comments and a few questions.

01:06:50.000 --> 01:06:51.000
 Sure.

01:06:51.000 --> 01:06:55.000
 Whenever we show use of reserve, it would be helpful to show maybe the reserve and the

01:06:55.000 --> 01:06:56.000
 reserve target.

01:06:56.000 --> 01:06:57.000
 Yeah.

01:06:57.000 --> 01:07:00.000
 So, we have, in some cases, some pretty substantial use of reserve.

01:07:00.000 --> 01:07:04.000
 And, you know, you explained that $10 million that was -- had to be put in the reserve to

01:07:04.000 --> 01:07:07.000
 transfer it one month to bid and then spend it.

01:07:07.000 --> 01:07:11.000
 But in general, all of these are showing, you know, use of reserves in the millions,

01:07:11.000 --> 01:07:15.000
 which may be a goal if the reserves are above their target.

01:07:15.000 --> 01:07:16.000
 Mm-hmm.

01:07:16.000 --> 01:07:20.000
 But it looks a little scary to show a number at the bottom that's negative several million

01:07:20.000 --> 01:07:21.000
 dollars.

01:07:21.000 --> 01:07:22.000
 Yeah.

01:07:22.000 --> 01:07:32.240
 The revenue-funded capital on several of the funds is significantly lower than -- in actuals

01:07:32.240 --> 01:07:33.240
 than budget.

01:07:33.240 --> 01:07:42.240
 I mean, I know projects move, but that's also a really good way to make up a shortfall is

01:07:42.240 --> 01:07:46.240
 to kick the can down the road, to delay a project.

01:07:46.240 --> 01:07:53.240
 So, whenever we have a, you know, $10 million shift in revenue-funded capital --

01:07:53.240 --> 01:07:54.240
 Yep.

01:07:54.240 --> 01:07:57.240
 -- I'd just like to understand where those come from.

01:07:57.240 --> 01:07:58.240
 Yeah.

01:07:58.240 --> 01:08:03.240
 So, in what I believe -- and I'll go back and double-check, and we can -- you know,

01:08:03.240 --> 01:08:11.240
 I can bring some detail for it on the 24th as well -- is that if that revenue was external

01:08:11.240 --> 01:08:20.240
 funding, like TextDOT or a developer contribution, or if it were to be impact fees -- because

01:08:20.240 --> 01:08:26.240
 what happens is that money comes in on the revenue side, but then goes out on the revenue-funded

01:08:26.240 --> 01:08:29.240
 capital side if it's in the same fiscal year.

01:08:29.240 --> 01:08:37.240
 So, to your point, having some additional, you know, clarity, you know, on those revenue-funded

01:08:37.240 --> 01:08:40.240
 transfers, you know, we can provide that.

01:08:40.240 --> 01:08:45.240
 And then, as far as -- you did mention showing the fund balance.

01:08:45.240 --> 01:08:50.240
 And we do typically -- that's what you'll see on the performance, is you'll see the

01:08:50.240 --> 01:08:55.240
 beginning fund balance, all the, you know, financial activity, the ending fund balance,

01:08:55.240 --> 01:08:59.240
 and then the reserve targets as well as the debt service coverage ratio.

01:08:59.240 --> 01:09:00.240
 Okay.

01:09:00.240 --> 01:09:03.240
 Should be called a rate stabilization fund.

01:09:03.240 --> 01:09:04.240
 Yes.

01:09:04.240 --> 01:09:05.240
 Yep.

01:09:05.240 --> 01:09:11.240
 And then, going to -- if you could move to the electric fund.

01:09:11.240 --> 01:09:12.240
 Sure.

01:09:12.240 --> 01:09:18.240
 I don't know the -- so, in general, we can look at these performance and next year's

01:09:18.240 --> 01:09:23.240
 budget, and we can get a pretty good idea of what rates need to do.

01:09:23.240 --> 01:09:28.240
 It gets a little more complicated in water because water use varies, your water use showed.

01:09:28.240 --> 01:09:33.240
 Like, 2023 was a dry year, so it had higher revenue that isn't necessarily going to be

01:09:33.240 --> 01:09:35.240
 repeated this year or next year.

01:09:35.240 --> 01:09:39.240
 So, you have to interpret water a little differently.

01:09:39.240 --> 01:09:48.240
 Electricity is its own ballgame, and I don't know if it's possible to separate base costs

01:09:48.240 --> 01:09:58.240
 from kind of ECA, energy-related costs, but that -- I think that might be useful for us

01:09:58.240 --> 01:10:00.240
 whenever we're looking at rates.

01:10:00.240 --> 01:10:07.240
 Is the base rate needing to increase, or is this variability that's going to affect ECA?

01:10:07.240 --> 01:10:15.240
 And so, you know, you can't put that -- it might not fit in one PowerPoint slide, too,

01:10:15.240 --> 01:10:20.240
 but I think that's also important for us to be thinking about is, are the general capital

01:10:20.240 --> 01:10:27.240
 costs and personnel costs increasing that we need to increase base rates, or is, you

01:10:27.240 --> 01:10:32.240
 know, wholesale power in ERCOT more expensive, or those types of things, because they will

01:10:32.240 --> 01:10:37.240
 affect two different sections, one of them being the annual budgeted rate and one of

01:10:37.240 --> 01:10:40.240
 them being our, you know, our six-month variable rate.

01:10:40.240 --> 01:10:44.240
 I think that's where the cost of service study will come in and help us, because that's where

01:10:44.240 --> 01:10:48.240
 they're going to determine what are the fixed costs, and is that where most of it needs

01:10:48.240 --> 01:10:49.240
 to go.

01:10:49.240 --> 01:10:50.240
 >> Right.

01:10:50.240 --> 01:10:54.240
 But then, as we look -- but as we watch it happen, you know, once we get to the cost

01:10:54.240 --> 01:10:58.240
 of service, we're going to have, every six months, we're going to be reviewing those

01:10:58.240 --> 01:11:04.240
 rates, and so understanding, in this budget process, which of these affects the base rate

01:11:04.240 --> 01:11:08.240
 and which of these affects the energy rate would be helpful.

01:11:08.240 --> 01:11:14.240
 >> And we did make that move, it was last year or the year before, to make the ECA more

01:11:14.240 --> 01:11:16.240
 transparent and more about the -- >> Yes.

01:11:16.240 --> 01:11:17.240
 >> Right.

01:11:17.240 --> 01:11:18.240
 >> And this is for us to -- >> Yes.

01:11:18.240 --> 01:11:19.240
 >> -- to keep that out.

01:11:19.240 --> 01:11:20.240
 >> That'll spell that out.

01:11:20.240 --> 01:11:21.240
 >> That's right.

01:11:21.240 --> 01:11:22.240
 Very good.

01:11:22.240 --> 01:11:23.240
 >> Keep it very transparent.

01:11:23.240 --> 01:11:27.240
 >> And last, can we finish on the projected water demand chart?

01:11:27.240 --> 01:11:38.240
 >> Sure.

01:11:38.240 --> 01:11:39.240
 >> This one here?

01:11:39.240 --> 01:11:42.240
 >> Yeah, that one there.

01:11:42.240 --> 01:11:50.240
 And I appreciate the challenge of -- we want to base our revenue forecasts on what we actually

01:11:50.240 --> 01:11:57.240
 think will get built and turned on, but we have to base our infrastructure forecasts on

01:11:57.240 --> 01:12:00.240
 what's the fastest this stuff could really arrive.

01:12:00.240 --> 01:12:01.240
 >> Yeah.

01:12:01.240 --> 01:12:03.240
 >> I was curious, that red line is really aggressive.

01:12:03.240 --> 01:12:11.240
 Is that some -- that WWMP, is that some kind of a standard that shows the really rapid

01:12:11.240 --> 01:12:12.240
 growth there?

01:12:12.240 --> 01:12:18.240
 >> WWMP stands for the Wastewater Master Plan, and so these were the population projections

01:12:18.240 --> 01:12:26.240
 that were included by Frieza Nichols in that master plan.

01:12:26.240 --> 01:12:35.240
 You know, we don't use as an aggressive population in some of our financial forecasting, as opposed

01:12:35.240 --> 01:12:44.240
 to this water demand forecast, but it is -- it is very aggressive, as you noted.

01:12:44.240 --> 01:12:53.240
 I think, you know, from this perspective, we're being more conservative in understanding

01:12:53.240 --> 01:12:58.240
 when we really need this infrastructure, and then on the financial side, we're also being

01:12:58.240 --> 01:13:03.240
 conservative in terms of revenue so that we're not overexpending and putting the fund into

01:13:03.240 --> 01:13:05.240
 a deficit position.

01:13:05.240 --> 01:13:16.240
 So, yes, it's -- but, you know, I think overall, we anticipate quite a bit of growth and the

01:13:16.240 --> 01:13:21.240
 need for these plant expansions, particularly the one at Ray Roberts.

01:13:21.240 --> 01:13:22.240
 >> Yeah.

01:13:22.240 --> 01:13:28.240
 Yeah, and I definitely -- I wonder if this was re-baselined off of the dry year in 2023

01:13:28.240 --> 01:13:35.240
 that had a high water demand, because for us to be projected to be 20% below our capacity

01:13:35.240 --> 01:13:43.240
 to be 20% below our demand in four years, I mean, that's -- that seems like something's

01:13:43.240 --> 01:13:49.240
 got to be wrong there, or something went wrong several years ago that allowed us to get to

01:13:49.240 --> 01:13:51.240
 that point.

01:13:51.240 --> 01:13:58.240
 >> Go ahead.

01:13:58.240 --> 01:14:00.240
 >> Stay with the red lines.

01:14:00.240 --> 01:14:04.240
 So according to Freese and Nichols, those reflect population growth?

01:14:04.240 --> 01:14:06.240
 Is that what you're saying?

01:14:06.240 --> 01:14:18.240
 >> It reflects city growth in M.G.D., so the demand of water.

01:14:18.240 --> 01:14:27.240
 >> So how is that -- so how does population correlate with what you just said?

01:14:27.240 --> 01:14:34.240
 >> So, I mean, population obviously plays a part in the consumption.

01:14:34.240 --> 01:14:41.240
 I think the only point I was trying to make is just in some of our financial forecasts

01:14:41.240 --> 01:14:45.240
 where we're looking at the number of individuals in the city.

01:14:45.240 --> 01:14:52.240
 Earlier in the presentation, you saw it was close to 3%, but that doesn't -- we're being

01:14:52.240 --> 01:14:54.240
 conservative on that end.

01:14:54.240 --> 01:15:00.240
 Here, you know, this is representative of the water consumption, which in the beginning

01:15:00.240 --> 01:15:03.240
 years, it's hard to see at the bottom.

01:15:03.240 --> 01:15:09.240
 The growth is 8.1%, and then levels back down to the 3.5% and the 2%.

01:15:09.240 --> 01:15:14.240
 >> So I guess my question is, would it be too cumbersome to give me a better definition

01:15:14.240 --> 01:15:18.240
 of what those red lines -- what the population numbers are for those red lines?

01:15:18.240 --> 01:15:19.240
 >> Sure.

01:15:19.240 --> 01:15:20.240
 Yeah.

01:15:20.240 --> 01:15:21.240
 You can have water.

01:15:21.240 --> 01:15:25.240
 >> I mean, because -- yeah.

01:15:25.240 --> 01:15:30.240
 Because I know we've got some wild crystal ball going on, and I realize the growth is

01:15:30.240 --> 01:15:36.240
 it, but I think at some point we might even come to a realization that some of that may

01:15:36.240 --> 01:15:38.240
 be fantasy.

01:15:38.240 --> 01:15:44.240
 >> Fantasy when there are 8,000 people.

01:15:44.240 --> 01:15:52.240
 >> I'm going to turn off my mic if you're going to talk that way.

01:15:52.240 --> 01:15:55.240
 >> Oh, I didn't say it.

01:15:55.240 --> 01:15:56.240
 >> To that --

01:15:56.240 --> 01:15:57.240
 >> You got picked up on it a little bit.

01:15:57.240 --> 01:15:58.240
 Go ahead, Aaron.

01:15:58.240 --> 01:16:02.240
 >> To that point, this study being 2018 and what we've seen since then, how often is this

01:16:02.240 --> 01:16:09.240
 updated and does it need to be updated should we be off, you know, even worse, more severely

01:16:09.240 --> 01:16:12.240
 than 20% in '28?

01:16:12.240 --> 01:16:13.240
 >> Yeah.

01:16:13.240 --> 01:16:18.240
 So this -- I believe that this was updated since that time.

01:16:18.240 --> 01:16:22.240
 I believe that the master plans are done every three to five years.

01:16:22.240 --> 01:16:23.240
 >> Every five years.

01:16:23.240 --> 01:16:27.240
 >> I could be mistaken on that.

01:16:27.240 --> 01:16:32.240
 And we just went through that last year, the master plan?

01:16:32.240 --> 01:16:33.240
 Yes.

01:16:33.240 --> 01:16:36.240
 >> Fairly -- yeah, it's fairly recent.

01:16:36.240 --> 01:16:39.240
 >> A good question.

01:16:39.240 --> 01:16:40.240
 Other questions?

01:16:40.240 --> 01:16:48.240
 >> So we still have a board seat on the NPEM in North Texas for our district.

01:16:48.240 --> 01:16:49.240
 >> I don't --

01:16:49.240 --> 01:16:57.240
 >> Whatever one that we used to have, Tim Fisher used to be on it for us.

01:16:57.240 --> 01:16:58.240
 >> Oh.

01:16:58.240 --> 01:16:59.240
 >> We do?

01:16:59.240 --> 01:17:00.240
 >> We do.

01:17:00.240 --> 01:17:01.240
 >> Who's on there?

01:17:01.240 --> 01:17:02.240
 Thank you.

01:17:02.240 --> 01:17:03.240
 >> Steven.

01:17:03.240 --> 01:17:04.240
 >> Steven.

01:17:04.240 --> 01:17:05.240
 >> Oh, Steven.

01:17:05.240 --> 01:17:06.240
 Okay.

01:17:06.240 --> 01:17:07.240
 Good.

01:17:07.240 --> 01:17:08.240
 All right.

01:17:08.240 --> 01:17:09.240
 No other questions?

01:17:09.240 --> 01:17:12.240
 It's going to be a long one on the 24th.

01:17:12.240 --> 01:17:13.240
 >> That's right.

01:17:13.240 --> 01:17:21.240
 >> Can we have pizza for breakfast?

01:17:21.240 --> 01:17:22.240
 >> Thank you.

01:17:22.240 --> 01:17:23.240
 >> All right.

01:17:23.240 --> 01:17:24.240
 Thank you.

01:17:24.240 --> 01:17:25.240
 Thank you for the presentation.

01:17:25.240 --> 01:17:26.240
 All right.

01:17:26.240 --> 01:17:28.240
 With that, there's no further business.

01:17:28.240 --> 01:17:29.240
 It is 1017.

01:17:29.240 --> 01:17:32.240
 Do we have a motion to adjourn?

01:17:32.240 --> 01:17:33.240
 We are adjourned.