WEBVTT

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 Okay, it is nine o'clock and we do have a quorum, so call to order the Public Utilities

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 Board for the City of Denton on Monday, June 24th, 2024.

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 The first item is presentations from the public.

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 Has anyone registered?

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 No?

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 All right, then we'll go into items for individual consideration.

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 The first item is approval of the June 10th meeting minutes.

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 Were there any changes or corrections?

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 Seeing none, do we have a motion to approve?

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 So moved.

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 Okay.

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 Devin and Rob, all in favor say aye.

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 Aye.

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 Carries.

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 Management reports.

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 It's Taylor.

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 Pretty simple.

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 Yes.

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 Good morning.

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 We have two items for the board this morning.

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 On your future agenda items, there's attachment covering that then today you're going to hear

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 the proposed budgets for the utilities and then it looks like on your next meeting on

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 July 8th, you'll have approval of any utility rate changes, recommendations for water, wastewater,

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 drainage, and solid waste budgets.

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 Any questions on future agenda items?

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 No?

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 Okay.

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 Next item is new business action items.

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 There appears to be one outstanding request and it is for comparison on our experience

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 with EV versus combustion engine cars and trucks.

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 So that one still looks outstanding.

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 I don't know if we've gotten any updates yet, but we can provide you how that's going.

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 And that's it.

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 All right.

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 The next item is concluding items.

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 Does any board member wish to have something put on a future agenda or address the public?

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 No?

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 Okay.

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 Then we'll go into the work session.

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 Leave a report and hold a discussion and give staff direction on fiscal year '24-'25

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 preliminary utility forecast for solid waste water, wastewater, electric, and customer

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 service.

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 Good morning.

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 Good morning.

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 Good morning, members of PUB, Chair Matt Hamilton, budget manager for the city.

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 Here to present the second in a series of budget presentations for you.

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 Today's presentation is going to largely focus on the five-year operating performance and

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 five-year capital budgets for each of the utilities.

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 I did want to mention that as we go through the financials that I'll walk through, we'll

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 talk a little bit about revenue sufficiency.

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 And as you'll see, some of the percentages that we have in there, I just wanted to note,

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 is representative of the total revenue sufficiency for the fund that's required.

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 And so at the next meeting on July 8th, we will bring back some different rate structure

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 options in order to meet those revenue sufficiency requirements.

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 So it's not specific to any one rate class, residential, commercial fees otherwise.

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 So just wanted to note that at the top of the presentation.

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 Okay.

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 So as I had mentioned, we'll talk a little bit about the budget process overview and

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 then get into the preliminary utility budgets for each of the utilities.

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 So this was something that we had talked about at the prior PUB meeting.

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 So I won't go through all of it, but we are here in June presenting the preliminary utility

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 budgets to PUB following the meeting on the 8th.

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 We will then provide this information for consideration to counsel.

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 They will review it on the 23rd and also at the budget workshop.

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 If there's anything that needs to come back to the PUB, any changes, we will bring that

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 back to the board.

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 And then in August, we'll have our public hearings and it will culminate in the budget

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 adoption in September.

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 So starting with our solid waste and recycling department, this is an overview of the current

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 solid waste organizational chart for fiscal year 2024, our current fiscal year.

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 There's a total of 133 budgeted FTEs in the department.

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 As we had discussed previously, included in our rate forecasts are a 2%, 2.6% growth in

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 residential customers, a 2% growth in commercial front-load, side-load poles, and 2.1% growth

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 in landfill customers.

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 And the graphic that you see here was something that we had reviewed last time.

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 But just to illustrate that solid waste is fairly consistent and our forecast for 2023

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 lined up pretty well with the 2023 actuals.

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 We anticipate the same for 2024.

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 And then the growth projections there are based on the percentages that you see.

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 So getting into specific budget request packages, just to explain a little bit, baseline adjustments

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 are budgetary increases for expenses that already exist or contracts that already exist.

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 Supplemental requests is a request for a new expense or a new service.

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 So looking at baseline adjustments, you can see there's seven requests.

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 Each of these have to do with an increase in the cost of doing business.

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 And then supplemental requests of $121,500 for new software that will go into the vehicles.

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 And that is every new software cover.

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 The question was about the software for the vehicles.

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 Good morning, Brian Burner, Solid Waste Director with the City of Denton.

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 It's for a program called SAMSARA.

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 It sets upon our existing Rubicon and ties together the routing software, the accountability

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 software, our third eye system, basically drops it all into one unit so that instead

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 of us, let's say we've had a miss or an alleged miss at a resident.

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 Right now we have to go and pull the card and spend an hour going through until we get

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 to that house to determine with this new system, not only does it allow us to pull that up

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 by the address, by the GeoTab, but it also helps us from a driver accountability standpoint,

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 make sure from the NCAP standpoint he's driving the way he needs to, monitors all the exterior

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 so in case we get hit we can help determine more reliably who's at fault.

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 So it's a risk management software also.

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 30,000 of that is originally for the initial installation and that's not going to be a

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 reoccurring charge.

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 So does that, if I may, does that also include looking at the trash cans or receptacles that

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 may need to be replaced?

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 Is that something the driver makes a decision at that point, is that what the software would

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 be useful for?

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 No, our existing software, the Rubicon system, if there's a crack lid, the wheel, something

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 that the driver observes, he can actually hit a, there's a button, there's what we

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 call an exception report that he can push and it will note that that may need to happen

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 in addition to our field auditors that are out there, they're gathering that data.

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 But if you have a can that may have a crack, may need to be repaired, the best way to manage

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 that is just go ahead and call customer service.

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 It gets it directly into the system and we'll have it repaired on the next service day.

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 Thank you.

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 Thank you.

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 Yes sir.

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 This seems like a wonderful idea but reasonably expensive so what kind of labor savings do

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 you see coming from this or have you calculated those out in any way?

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 We've calculated that but we've really looked at it from the risk management standpoint.

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 I mean, 131,000, that's one claim.

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 We place several claims a year based on alleged incidents and things that we just can't quite

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 prove up so we end up paying.

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 This really is cost neutral, cost beneficial to us.

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 Okay but you haven't calculated that out.

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 From a risk management standpoint we've looked at it, again, as I said, 130,000 or 120,000

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 is basically one claim potentially.

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 We have four or five claims a year.

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 What do those claims typically run you a year, the small part?

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 I would have to go back and look at that, I don't know off the top of my head what that

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 is.

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 If this could be one claim and you get half a dozen of them a year, then that's a half

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 a million dollars.

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 That's half a million dollars.

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 Yeah, exactly.

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 Okay.

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 So it's running in that range?

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 Correct.

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 Okay, thank you.

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 Thank you.

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 Brian, thanks for your department's quick response during the storms this year.

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 Thank you very much.

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 You're most welcome.

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 And it goes without saying that really it's the dedication of the employees that we have.

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 They were asking questions before we even got in on Monday, what do we need to do, what

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 do we need to do?

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 And in addition to just our guys out on the streets picking it up, working six days a

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 week, 12 hours a day, I want to give shout-outs to Fleet because if they weren't there, you

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 know, making sure our trucks were up and running, then we couldn't have done this.

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 And also the help we got from Water and Streets Department on Saturdays, we had their dump

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 trucks out, we were loading and going and into the day, you know, Friday we basically

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 said Operation Push, which is what we call this operation to get our debris management

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 taken care of.

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 It was over.

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 Today we're back in regular business.

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 So we're hitting, you know, Monday through Thursday piles, anything overage we're going

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 to be charging you for, but again, you have the debris collection is done.

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 So again, thanks to our employees for that dedicated service.

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 Yeah, I did make contact with you via someone else, of course, and you answered my question

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 quickly and the people on a certain street and didn't -- I didn't even tell you what

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 street it was on, but they called me and thanked me for getting their trees removed.

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 Well, you know -- And I gave you credit is what I'm --

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 Well, thank you.

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 You know, it's just the patience of our residents and our citizens, you know, it -- you know,

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 we just started one in and worked our way slowly slogging through it all.

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 But again, you know, working together as a team, you know, the citizens and the community

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 and our folks, you know, Denton is a cleaner place this Monday, so thank you.

00:11:11.320 --> 00:11:16.880
 Okay.

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 So taking a look at solid waste position summary, in fiscal year 2024, the current fiscal year

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 had 133 FTEs, as we saw in the organizational chart.

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 There are no positions being added for 2025, so we anticipate 133 positions in 2025.

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 Taking a look at the solid waste five-year capital plan, the plan includes, for fiscal

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 year 2025, $12.9 million, of which 11.1 is anticipated to be debt funded and 1.8 million

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 revenue funded.

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 So the major projects include cell five and six construction, as well as a little over

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 $5 million in annual vehicle replacement.

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 Okay.

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 So getting into the solid waste fund five-year forecast, for fiscal year 2024, the current

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 fiscal year, we had budgeted $39.2 million in revenue, for fiscal year 2025, we are budgeting

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 $41.2 million in revenue.

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 That increase is due to some of the growth that we're seeing, as well as, as you'll

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 see at the bottom, a 1.5% increase that is needed for revenue sufficiency.

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 On the expenditure side, 2024, we budgeted $41.3 million, and 2025, we've budgeted $42.2,

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 something that I wanted to note on certain lines.

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 So within personnel services, we do anticipate a 3% COLA for employees citywide, as well

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 as a, up to a 2.5% performance merit that employees would be eligible to receive.

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 And so that's primarily what's driving the increase in personnel services.

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 In operations, there was a budget increase that we've made to the commercial collection

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 business unit that has to do with vehicle maintenance and repair.

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 So what we found is that in that specific business unit, that we had under budgeted

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 vehicle maintenance in prior years and are increasing that line by $700,000 to bring

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 it up to where actual fleet maintenance costs are.

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 And then just taking a look at the debt service in 2024, it was at $4.8 million, 2025, we

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 anticipate $5.3 million with the recent debt issuance in the summer.

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 So with all that, in 2025, the ending fund balance is projected to be $8.6 million.

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 At the bottom, you'll see two rows under target reserves.

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 The first line is the minimum target reserve level, the second is our targeted maximum

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 level.

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 And so you'll notice that the $8.6 million does fall above the bounds of the upper limit.

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 However, the reason that we anticipate needing additional revenue in the next fiscal year

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 is looking out the next four fiscal years.

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 And as you'll see, the fund balance, you know, in 2026 declines to be within those target

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 limits, 2027 within the limits, 2028 and 2029.

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 So another piece of it that we're also cognizant of and have a policy surrounding is this very

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 last line, the debt service coverage ratio.

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 And this is a ratio that is looked at by rating agencies where our target is one and a half.

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 So you know, looking out the five years, we also want to ensure that we are maintaining

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 at least a one and a half percent or one and a half times debt service coverage ratio.

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 So it's really a balance between where we're keeping the fund balance, where our expenditures

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 are and where that debt service coverage ratio is, yes.

00:16:04.340 --> 00:16:10.960
 On the vehicle replacement, is that just for the solid waste department vehicle replacement?

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 Yes.

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 And what would -- give me an example of what kind of replacement that would be.

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 Is it pickups, is it trash truck?

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 What is the vehicle re-emplacement?

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 Could you write some detail?

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 Good morning.

00:16:31.560 --> 00:16:33.160
 And it would be all of the above.

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 You know, we basically have a five-year replacement cycle on most of our rolling stock.

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 So you know, and it goes back working with Fleet to determine, you know, amount of repair

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 points, cost to maintain, things of that nature.

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 So we'll be getting some new automatic side loaders, some new commercial front load trucks,

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 as well as some just front line, you know, light and medium duty vehicles to help support

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 supervisors, crew leaders, service delivery out in the community.

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 And if I may ask, of those, are you going to have -- what's the makeup of those vehicles

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 in that?

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 Are they going to be gas burners?

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 Are they going to be electric or hybrid?

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 What's your goal on those?

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 These will be conventional fuels, so diesel and gasoline.

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 However, you know, we are continuing to look at the potential of alternate-fueled vehicles

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 into the fleet.

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 You know, right now, the heavy-duty garbage trucks, there really isn't a reliable solution

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 for alternative other than compressed natural gas.

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 So we'll continue down the road, but we're working closely with Peterbilt and other manufacturers

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 to really test vehicles.

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 But where the technology is solid and reliable, our, you know, pickup trucks, box trucks,

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 things of that nature, we're looking actively at actually incorporating, you know, electric

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 vehicles and other alternatively-fueled vehicles in those mechanisms.

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 Would you know how many we have in the fleet right now that are the electric?

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 At solid waste, I believe we have five.

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 Five in solid waste.

00:18:03.520 --> 00:18:04.520
 Yes.

00:18:04.520 --> 00:18:05.520
 Thank you.

00:18:05.520 --> 00:18:06.520
 Thank you.

00:18:06.520 --> 00:18:07.520
 One more question.

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 On the replacement line, it's one and a half, two million, and then it kind of trickles

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 down to 500,000.

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 Is that just because those replacements aren't planned yet, or do you expect it to decrease

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 in cost?

00:18:20.320 --> 00:18:26.080
 Part of it has to do with when we originally acquired the vehicles, and it is a five-year

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 replacement.

00:18:27.080 --> 00:18:30.480
 So in that five years, you're going to see adjustments up and down.

00:18:30.480 --> 00:18:35.920
 I would, you know, this is a long-term forecast, and, you know, anything beyond about three

00:18:35.920 --> 00:18:38.840
 or four years, we're speculating.

00:18:38.840 --> 00:18:43.160
 So you know, we'll -- look next year, those numbers will be just a slight bit different.

00:18:43.160 --> 00:18:44.160
 Okay.

00:18:44.160 --> 00:18:47.640
 Yeah, and I was just curious if it was actually a planned trend down, or if it just -- the

00:18:47.640 --> 00:18:48.640
 numbers aren't there yet.

00:18:48.640 --> 00:18:49.640
 They'll probably be there in a year or two.

00:18:49.640 --> 00:18:50.640
 I think it's all of the above.

00:18:50.640 --> 00:18:51.640
 Okay.

00:18:51.640 --> 00:18:52.640
 Thank you.

00:18:52.640 --> 00:18:53.640
 Thank you.

00:18:53.640 --> 00:18:54.640
 Appreciate it.

00:18:54.640 --> 00:18:58.120
 A little bit of both.

00:18:58.120 --> 00:19:02.640
 What is our legal requirement for debt service coverage under the bond covenants?

00:19:02.640 --> 00:19:03.640
 Is it 1.25?

00:19:03.640 --> 00:19:05.680
 Is that what I remember correctly?

00:19:05.680 --> 00:19:06.680
 Yes.

00:19:06.680 --> 00:19:07.680
 Okay.

00:19:07.680 --> 00:19:08.680
 Yeah.

00:19:08.680 --> 00:19:09.680
 All right.

00:19:09.680 --> 00:19:10.680
 Okay.

00:19:10.680 --> 00:19:11.680
 All right.

00:19:11.680 --> 00:19:22.720
 Well, moving on to DME, this is an organizational chart for fiscal year 2024, the current fiscal

00:19:22.720 --> 00:19:29.440
 year for DME, and the current FTE count is 187.

00:19:29.440 --> 00:19:37.960
 So as we talked about last time, we do anticipate 7.53% growth in retail sales, megawatt hours,

00:19:37.960 --> 00:19:41.280
 for known residential and commercial projects.

00:19:41.280 --> 00:19:48.520
 The cost of service study, which is ongoing, we anticipate the results and recommendations

00:19:48.520 --> 00:19:54.480
 to come later in July, and so we'll bring that back to the board for your consideration.

00:19:54.480 --> 00:19:59.460
 But the cost of service study is primarily focused on fixed costs, the facility and usage

00:19:59.460 --> 00:20:04.520
 charges, and then we'll also bring back the value of solar steady results and recommendations

00:20:04.520 --> 00:20:06.080
 as well.

00:20:06.080 --> 00:20:12.280
 In terms of expense projections, and this is true for all the utilities, is an increase

00:20:12.280 --> 00:20:20.440
 in personnel costs associated with the cost of living adjustment and the merit adjustment.

00:20:20.440 --> 00:20:26.200
 So this is a graphic that you had seen at the previous meeting just illustrating that

00:20:26.200 --> 00:20:30.120
 7.53% growth in forecasted retail sales.

00:20:30.120 --> 00:20:37.500
 So for 2025, we anticipate 881,000 in residential service megawatt hours and over a million

00:20:37.500 --> 00:20:41.960
 in general service.

00:20:41.960 --> 00:20:50.720
 So a comment that had come up at the prior meeting was what expenditures make up the

00:20:50.720 --> 00:20:56.160
 various rates, and so we wanted to make sure that we provided some information in regard

00:20:56.160 --> 00:20:57.320
 to that.

00:20:57.320 --> 00:21:03.680
 So as you see here, base rates for DME are made up of personnel services, O&M, the ROI

00:21:03.680 --> 00:21:10.040
 and franchise fee costs, debt service, cost of service transfers, and capital outlay,

00:21:10.040 --> 00:21:13.680
 which are revenue-funded capital projects.

00:21:13.680 --> 00:21:18.000
 So base rates recover the cost of operations and maintenance, and the rates will vary by

00:21:18.000 --> 00:21:20.000
 customer class.

00:21:20.000 --> 00:21:28.720
 The ECA rate is comprised of purchase power, which excludes deck revenue, deck fuel, deck

00:21:28.720 --> 00:21:38.520
 variable O&M expenses, as well as any prior period over/under collection on the ECA.

00:21:38.520 --> 00:21:44.680
 And the ECA simply recovers the net energy cost as a pass-through charge to customers,

00:21:44.680 --> 00:21:48.120
 and it's the same rate for all customer classes.

00:21:48.120 --> 00:21:55.700
 The TCRF, which is the transmission cost recovery fee, is just comprised of transmission costs.

00:21:55.700 --> 00:22:06.700
 The transmission costs are determined by the PUCT, and the rates vary by customer class.

00:22:06.700 --> 00:22:15.320
 So specific to DME, we are anticipated to see a 14.2% total increase in personnel expenditures,

00:22:15.320 --> 00:22:17.080
 including benefits.

00:22:17.080 --> 00:22:20.480
 So as I had mentioned, it includes the cost of living and the merit.

00:22:20.480 --> 00:22:27.480
 However, DME is also proposing 16 and a half positions, supplemental positions.

00:22:27.480 --> 00:22:34.800
 Otherwise, there's not a significant change in their overall O&M expenditures, and debt

00:22:34.800 --> 00:22:42.480
 service is estimated to increase a little over 8% in non-deck debt service, which includes

00:22:42.480 --> 00:22:48.720
 the $60 million that was issued in the current fiscal year, as well as the recent refunding

00:22:48.720 --> 00:22:56.640
 or refinancing on some old bonds that we were able to get some more advantageous interest

00:22:56.640 --> 00:23:02.100
 rates of the savings is $1.5 million over the life of those bonds.

00:23:02.100 --> 00:23:05.920
 So that's included in that total.

00:23:05.920 --> 00:23:09.560
 And there's no change in the deck debt service expense.

00:23:09.560 --> 00:23:10.560
 Yeah.

00:23:10.560 --> 00:23:11.560
 Yes, I have a quick question.

00:23:11.560 --> 00:23:17.680
 So the additional personnel, what categories do they fall into, engineering, linemen?

00:23:17.680 --> 00:23:19.160
 I think there's a slide.

00:23:19.160 --> 00:23:20.160
 Yep.

00:23:20.160 --> 00:23:21.160
 There's a slide coming up.

00:23:21.160 --> 00:23:23.300
 So it may be the next one.

00:23:23.300 --> 00:23:27.560
 If not, it's in one or two, but -- Thank you.

00:23:27.560 --> 00:23:28.560
 Yep.

00:23:28.560 --> 00:23:29.560
 Okay.

00:23:29.560 --> 00:23:34.080
 So we're making a look at the electric fund five-year forecast.

00:23:34.080 --> 00:23:43.680
 In 2024, we budgeted $290 million in revenues and $308 million in expenses.

00:23:43.680 --> 00:23:55.080
 2025, you can see that the amount that we're budgeting for revenues has increased to $392

00:23:55.080 --> 00:24:03.400
 million, and on the expenditure side, $396 million in expenditures.

00:24:03.400 --> 00:24:11.800
 So we still anticipate a use of reserve -- excuse me -- of $3.8 million.

00:24:11.800 --> 00:24:18.440
 Something to make a note of, the amount that we budgeted in 2024 for purchase power was

00:24:18.440 --> 00:24:28.720
 considerably lower than what we actually ended up anticipating to expend, and as we've talked

00:24:28.720 --> 00:24:33.200
 about in prior meetings, there may be the need for a budget amendment in the current

00:24:33.200 --> 00:24:40.440
 fiscal year to address that, and so you'll see that 2024 was $116 million in purchase

00:24:40.440 --> 00:24:50.480
 power, 2025 is $181 million, which aligns much closer to the actuals of 2023 and the

00:24:50.480 --> 00:24:51.480
 prior fiscal year.

00:24:51.480 --> 00:24:56.920
 So I just wanted to note that, otherwise, the major changes, as I had noted, was just

00:24:56.920 --> 00:25:03.720
 the increase in personnel due to the 16.5 FTEs that are being proposed, and then also

00:25:03.720 --> 00:25:06.320
 an increase in the non-debt service.

00:25:06.320 --> 00:25:15.760
 In 2024, it was $47.1 million, and we anticipate it to be $51 million in 2025.

00:25:15.760 --> 00:25:21.600
 So taking a look at the ending fund balance, we anticipate that DME will have an ending

00:25:21.600 --> 00:25:32.040
 fund balance of about $112 million next year, which will necessitate an anticipated additional

00:25:32.040 --> 00:25:36.480
 revenue need of 1.5%.

00:25:36.480 --> 00:25:43.480
 We did finance, as had been brought to the board earlier this year, $31.5 million in

00:25:43.480 --> 00:25:50.760
 purchase power expense, which you'll see in the 2024 purchase power securitization line

00:25:50.760 --> 00:26:00.080
 here, where the $31.5 million has increased the expenditures over the next five years,

00:26:00.080 --> 00:26:03.240
 the financing period, by $7.1 million.

00:26:03.240 --> 00:26:12.760
 And so, in total, DME's fund balance will be below the targeted minimum for the next

00:26:12.760 --> 00:26:13.980
 several years.

00:26:13.980 --> 00:26:19.440
 The policy does allow us to be below the minimum, so long as a plan is in place to bring it

00:26:19.440 --> 00:26:31.000
 above the minimum within five years, which is illustrated here.

00:26:31.000 --> 00:26:40.640
 So taking a look at DME's budget request packages, baseline adjustments, the first four baselines

00:26:40.640 --> 00:26:48.520
 listed there are related to the deck, and then a fifth request, which is an increase

00:26:48.520 --> 00:26:53.360
 to the outside meter reading contract for $50,000.

00:26:53.360 --> 00:27:00.640
 In terms of supplemental requests, as I had mentioned, personnel requests of 16.5 FTEs,

00:27:00.640 --> 00:27:08.920
 which totals a little over $2.3 million, including benefits, $222,000 for equipment and supplies

00:27:08.920 --> 00:27:17.240
 associated with those FTEs, and $315,000 for a GIS cloud management service.

00:27:17.240 --> 00:27:32.120
 So all in total, baselines and supplementals, a budgetary increase of $3,721,948.

00:27:32.120 --> 00:27:37.000
 So this brings us to the slide that I think will address the prior question.

00:27:37.000 --> 00:27:41.720
 Oh, actually, it's one more, sorry.

00:27:41.720 --> 00:27:50.620
 So this is a summary of their current positions, and so you'll see in fiscal year 2024, 187,000,

00:27:50.620 --> 00:27:56.920
 and then in 2025, preliminary, the total is 200.5 FTEs.

00:27:56.920 --> 00:28:04.820
 You'll notice that that number is four FTE short, and the reason is because in electric

00:28:04.820 --> 00:28:13.360
 system operations, we anticipate moving four DME dispatchers from electric system operations

00:28:13.360 --> 00:28:20.400
 to the new 311 call center.

00:28:20.400 --> 00:28:25.440
 So this is the slide that I was hoping to get to.

00:28:25.440 --> 00:28:33.000
 So this provides an overview of all the position requests for DME, and so what you'll see

00:28:33.000 --> 00:28:39.640
 is that there are a number of positions, but they are throughout the organization and in

00:28:39.640 --> 00:28:46.320
 multiple business divisions, and so I won't read all of them, but if you have any questions

00:28:46.320 --> 00:28:50.960
 on any of these, we'd be happy to answer any questions.

00:28:50.960 --> 00:28:51.960
 Yeah.

00:28:51.960 --> 00:28:56.240
 Are these new hire projections, or are these people coming up through the ranks as it were?

00:28:56.240 --> 00:28:58.760
 These would be new positions.

00:28:58.760 --> 00:29:05.160
 So that new position could be filled by someone internally or someone externally, but it is

00:29:05.160 --> 00:29:07.620
 a newly budgeted position.

00:29:07.620 --> 00:29:13.480
 And how do you, historically, how do you find that to be a higher percentage of internal

00:29:13.480 --> 00:29:15.640
 versus coming from outside?

00:29:15.640 --> 00:29:16.640
 Yeah.

00:29:16.640 --> 00:29:25.720
 Terry, I'll ask Terry, specific to DME, if internal or external.

00:29:25.720 --> 00:29:26.720
 Good morning.

00:29:26.720 --> 00:29:28.900
 I'm Terry Conell, the Assistant General Manager.

00:29:28.900 --> 00:29:40.040
 So we have, in this budget, we're requesting for a new crew for our electric system operations

00:29:40.040 --> 00:29:41.400
 and construction.

00:29:41.400 --> 00:29:47.900
 Those generally will be, like the senior journeyman-level folks and the supervisor, will most likely

00:29:47.900 --> 00:29:50.000
 be internal hires.

00:29:50.000 --> 00:29:59.400
 That be replaced, then, kind of through the waterfall of people moving up with new hires.

00:29:59.400 --> 00:30:02.640
 We've got three or four positions in the Energy Management Office.

00:30:02.640 --> 00:30:05.680
 Those will be new hires from outside.

00:30:05.680 --> 00:30:12.300
 Some of our tech services, tech operations, will most likely be from outside as well.

00:30:12.300 --> 00:30:16.440
 So most of these positions, I would guess, would be new hires from outside.

00:30:16.440 --> 00:30:17.440
 Okay.

00:30:17.440 --> 00:30:18.440
 Thank you.

00:30:18.440 --> 00:30:21.200
 Go ahead, Lee.

00:30:21.200 --> 00:30:25.680
 I'm considering the growth of our system and added new customers coming online over the

00:30:25.680 --> 00:30:26.680
 next few years.

00:30:26.680 --> 00:30:29.600
 Are we hiring enough linemen?

00:30:29.600 --> 00:30:35.560
 Well, I think the answer to that is we're hiring what we believe is the correct number.

00:30:35.560 --> 00:30:36.560
 And you're right.

00:30:36.560 --> 00:30:38.040
 We're trying to keep up with the growth.

00:30:38.040 --> 00:30:45.520
 If you look at just residential growth, over the last five years, we've added, I would

00:30:45.520 --> 00:30:49.840
 guess, over 10,000 customers.

00:30:49.840 --> 00:30:53.280
 We're back with this staffing level that we're suggesting here.

00:30:53.280 --> 00:30:57.160
 We're back to the staffing level we were at six years ago.

00:30:57.160 --> 00:31:02.760
 So we actually moved down 12 positions from six years ago, and now we're trying to get

00:31:02.760 --> 00:31:04.280
 back up to that level.

00:31:04.280 --> 00:31:10.280
 And what's most interesting is that our revenues are almost doubling.

00:31:10.280 --> 00:31:16.080
 So we're going from about a $200 million a year business to a $400 million a year business.

00:31:16.080 --> 00:31:19.920
 So we're experiencing a lot of growth.

00:31:19.920 --> 00:31:21.960
 And we need people.

00:31:21.960 --> 00:31:26.800
 We need very talented people to make sure that we can operate cost effectively.

00:31:26.800 --> 00:31:33.560
 Well, my question kind of is you've got a lot of people in the kind of operations, administration,

00:31:33.560 --> 00:31:34.560
 support areas.

00:31:34.560 --> 00:31:41.000
 And I'm just curious if this is enough linemen, growth in linemen, to support all of this

00:31:41.000 --> 00:31:46.040
 added growth we have, you know, with the conversion of our mains and adding coal and hunter ranch.

00:31:46.040 --> 00:31:48.760
 It's a whole lot of load, a whole lot of new lines.

00:31:48.760 --> 00:31:50.960
 I'm just curious if this is --

00:31:50.960 --> 00:31:51.960
 Yeah.

00:31:51.960 --> 00:31:56.560
 So these positions will be augmented, as we currently do with outside services.

00:31:56.560 --> 00:32:02.680
 So we have an outside contractor that does transmission-level work for us.

00:32:02.680 --> 00:32:11.720
 We have arrangements with service organizations, can help us with the distribution, construction,

00:32:11.720 --> 00:32:14.040
 storm response, and the like.

00:32:14.040 --> 00:32:20.880
 But this is what we believe we need to meet the expectations of our customers.

00:32:20.880 --> 00:32:28.240
 You know, all of our linemen and our field operations people have to be able to jump

00:32:28.240 --> 00:32:32.060
 to meet the customer's expectations in the middle of the night.

00:32:32.060 --> 00:32:38.120
 And so we think with an extra crew, this four-man crew, that we'll continue to be able to meet

00:32:38.120 --> 00:32:39.120
 those expectations.

00:32:39.120 --> 00:32:40.120
 Thank you.

00:32:40.120 --> 00:32:41.120
 Thank you, Terry.

00:32:41.120 --> 00:32:42.120
 Okay.

00:32:42.120 --> 00:32:58.600
 This is the second slide of the FTE list, if there's any questions on these specific

00:32:58.600 --> 00:33:02.440
 positions.

00:33:02.440 --> 00:33:06.360
 Okay.

00:33:06.360 --> 00:33:13.680
 Sorry, I'll let us finish the interviewers.

00:33:13.680 --> 00:33:14.680
 Oh, okay.

00:33:14.680 --> 00:33:23.240
 So taking a look at the DME five-year capital plan for fiscal year 2025, this is broken

00:33:23.240 --> 00:33:25.360
 up into two parts.

00:33:25.360 --> 00:33:32.920
 The first slide here is related to distribution, and the next slide is related to transmission.

00:33:32.920 --> 00:33:42.240
 So for distribution, the 2025 total is $60.2 million, and the five-year estimated total

00:33:42.240 --> 00:33:47.160
 is $315 million.

00:33:47.160 --> 00:33:52.160
 Transmission projects, fiscal year 2025 totals $14.7 million.

00:33:52.160 --> 00:33:56.840
 So between distribution and transmission, the total is $75 million.

00:33:56.840 --> 00:34:06.300
 Of the $75 million, $67.7 million is anticipated to be debt funded, $2.1 million is anticipated

00:34:06.300 --> 00:34:13.960
 to be revenue funded, and we have $5.1 million in anticipated cost participation.

00:34:13.960 --> 00:34:20.520
 Okay, any questions on DME?

00:34:20.520 --> 00:34:24.560
 Yes, thank you.

00:34:24.560 --> 00:34:31.400
 So if we return to the slide early on regarding structure of the three parts of the rate,

00:34:31.400 --> 00:34:36.360
 I just had one question for clarification.

00:34:36.360 --> 00:34:44.360
 So deck revenue is excluded from the ECA, where is that in the rate?

00:34:44.360 --> 00:34:51.000
 Is that part of -- is that applied as a credit to base rate funds?

00:34:51.000 --> 00:34:56.080
 I'll have Terry come up.

00:34:56.080 --> 00:35:04.040
 Yeah, on the income statement, the deck revenues show up as electric revenue.

00:35:04.040 --> 00:35:08.980
 The reason why they're not included in the ECA rate is because the wholesale deck revenues

00:35:08.980 --> 00:35:15.560
 are not subject to the ROI and franchise fee that we pay to the city.

00:35:15.560 --> 00:35:23.760
 And just on this slide, the ECA rate now, ECA rate and the TCRF rate are also burdened

00:35:23.760 --> 00:35:27.000
 by that general fund transfer amount as well.

00:35:27.000 --> 00:35:35.000
 So the -- shown in the base rates, it's actually -- we do collect the GFT on the base rate,

00:35:35.000 --> 00:35:42.400
 but we individually collect the GFT, general fund transfer on the ECA and the TCRF components

00:35:42.400 --> 00:35:44.440
 of the rate as well.

00:35:44.440 --> 00:35:48.720
 And so then deck revenue would kind of come in as like a kind of cost of service transfer

00:35:48.720 --> 00:35:49.720
 from this slide or --

00:35:49.720 --> 00:35:57.500
 No, it doesn't actually make up -- it's not something that we include in the rate because

00:35:57.500 --> 00:36:01.560
 it shows up as retail revenue.

00:36:01.560 --> 00:36:04.760
 It shows up as revenue on the income statement.

00:36:04.760 --> 00:36:12.480
 So it is -- when you look at the fund balance itself, it's a credit to the fund balance.

00:36:12.480 --> 00:36:15.880
 So it helps us to keep the rates in check.

00:36:15.880 --> 00:36:17.520
 Does that make sense to you?

00:36:17.520 --> 00:36:18.520
 Yeah.

00:36:18.520 --> 00:36:25.360
 So it doesn't -- so just as a credit to the fund, which then just -- but that in effect

00:36:25.360 --> 00:36:26.880
 lowers the base rate.

00:36:26.880 --> 00:36:32.480
 Well, it lowers the ECA requirement because it is a revenue that's collected for energy

00:36:32.480 --> 00:36:33.480
 that's purchased.

00:36:33.480 --> 00:36:38.080
 Okay, so it's kind of outside the ECA but still part of that power purchase.

00:36:38.080 --> 00:36:39.080
 Right.

00:36:39.080 --> 00:36:40.080
 Okay.

00:36:40.080 --> 00:36:41.080
 All right.

00:36:41.080 --> 00:36:44.080
 Yeah, thank you.

00:36:44.080 --> 00:36:47.120
 Would that be baked into non-rate revenues in the P&O?

00:36:47.120 --> 00:36:48.920
 No, it is not.

00:36:48.920 --> 00:36:52.720
 It is actually in the retail rate revenue.

00:36:52.720 --> 00:36:55.280
 What kind of things are in non-rate revenues?

00:36:55.280 --> 00:37:05.520
 It's fees, like connection fees, it's interest we gain on our fund balance.

00:37:05.520 --> 00:37:11.120
 It's just the non-billed rates that we give directly to every customer.

00:37:11.120 --> 00:37:12.120
 Oh.

00:37:12.120 --> 00:37:14.920
 Aaron, you need to put your microphone on.

00:37:14.920 --> 00:37:18.000
 I'm probably just not close enough.

00:37:18.000 --> 00:37:19.000
 Okay.

00:37:19.000 --> 00:37:23.200
 Just got to have a closer -- okay.

00:37:23.200 --> 00:37:24.200
 Other questions?

00:37:24.200 --> 00:37:25.200
 Thank you.

00:37:25.200 --> 00:37:26.200
 Okay.

00:37:26.200 --> 00:37:31.200
 Thank you, Teri.

00:37:31.200 --> 00:37:33.240
 Okay.

00:37:33.240 --> 00:37:39.680
 Okay, moving on to customer service.

00:37:39.680 --> 00:37:44.960
 So this is an organizational chart of the customer service fund, and something that

00:37:44.960 --> 00:37:50.880
 you'll notice that is different than in prior years is that in the current fiscal year,

00:37:50.880 --> 00:37:59.120
 the customer service fund now reports up through DME, and so there's two divisions within the

00:37:59.120 --> 00:38:06.520
 customer service fund, one being the newly formed 311 operations, as well as the existing

00:38:06.520 --> 00:38:09.200
 customer service group.

00:38:09.200 --> 00:38:17.360
 And so in total, customer service for fiscal year 2024 has 62 and a half FTEs.

00:38:17.360 --> 00:38:22.560
 And just talking a little bit about the customer -- or the 311 call center, because I know

00:38:22.560 --> 00:38:26.680
 that we have some new members on the board.

00:38:26.680 --> 00:38:35.000
 The city, prior to implementing 311, had a very decentralized contact structure.

00:38:35.000 --> 00:38:41.360
 So citizens and residents, when they reached out to the city with a concern, would be routed

00:38:41.360 --> 00:38:44.880
 to the department, who may be routed to another department.

00:38:44.880 --> 00:38:52.020
 The 311 call center really centralizes all of that communication, and so all inquiries

00:38:52.020 --> 00:38:58.600
 will come into 311, and then 311 will be able to communicate that to the appropriate department

00:38:58.600 --> 00:39:04.840
 and follow up with the resident, essentially providing a single point of contact for all

00:39:04.840 --> 00:39:11.720
 their needs, regardless of what the inquiry or the concern may be.

00:39:11.720 --> 00:39:16.720
 So this is a position summary for customer service, as I had noted.

00:39:16.720 --> 00:39:20.240
 In the current fiscal year, 62 and a half FTEs.

00:39:20.240 --> 00:39:27.680
 The preliminary for 2025 is 65 and a half, and so as you'll see in that 311 call center

00:39:27.680 --> 00:39:33.820
 line for 2025, it increases from 6 to 10.

00:39:33.820 --> 00:39:40.340
 Those are the four DME dispatchers that are coming over from electric operations.

00:39:40.340 --> 00:39:44.600
 And then customer service.

00:39:44.600 --> 00:39:54.720
 We moved six positions from customer service over to 311, so they decreased by six.

00:39:54.720 --> 00:39:59.920
 And then you'll also notice the decrease from 62 and a half to 55 and a half.

00:39:59.920 --> 00:40:07.000
 There was one more position, a director level position, that was reclassified to another

00:40:07.000 --> 00:40:13.920
 area of the city with the movement of 311 and customer service now being under DME,

00:40:13.920 --> 00:40:22.780
 who had appropriate managers and directors in place to provide that level of supervision.

00:40:22.780 --> 00:40:29.760
 So in total, 2025, we anticipate 65 and a half FTEs, with the only position request

00:40:29.760 --> 00:40:35.840
 being the movement of the four positions from DME to customer service.

00:40:35.840 --> 00:40:42.320
 So taking a look at the baseline and supplemental requests, baseline requests include increases

00:40:42.320 --> 00:40:48.000
 for postage, as well as two contract price increases.

00:40:48.000 --> 00:40:57.040
 And as far as supplementals, a request for software and build out specific to 311, as

00:40:57.040 --> 00:41:03.640
 well as two reviews, one to be done on the credit and collection process, and the other,

00:41:03.640 --> 00:41:13.440
 an operational review as 311 is implemented and integrated with our existing customer

00:41:13.440 --> 00:41:15.680
 service department.

00:41:15.680 --> 00:41:22.980
 So total requests are 230,200.

00:41:22.980 --> 00:41:27.920
 Any questions on these request packages?

00:41:27.920 --> 00:41:28.920
 Yeah.

00:41:28.920 --> 00:41:33.320
 To offset the postage increase, is there any way that we could do electronic statements

00:41:33.320 --> 00:41:35.720
 so people can opt out of receiving paper?

00:41:35.720 --> 00:41:37.040
 Good question.

00:41:37.040 --> 00:41:39.960
 I'll ask Krista to speak to that.

00:41:39.960 --> 00:41:40.960
 Here comes Krista.

00:41:40.960 --> 00:41:41.960
 I don't get paper.

00:41:41.960 --> 00:41:42.960
 I don't get paper.

00:41:42.960 --> 00:41:50.760
 Well, I get paper, I don't want it.

00:41:50.760 --> 00:41:54.400
 Madam Chair, board members, Krista Foster, customer service.

00:41:54.400 --> 00:41:59.120
 Customer service is actually in the middle of a push that we're about to start marketing

00:41:59.120 --> 00:42:02.560
 more to get people moving to electronic enrollment.

00:42:02.560 --> 00:42:11.400
 Currently, we are looking at opportunities for trying to make paper opt-in versus opt-out.

00:42:11.400 --> 00:42:17.660
 We are running into a couple of hitches with that, just with the vendors that we're using

00:42:17.660 --> 00:42:22.720
 for our bill print and for our payment portal.

00:42:22.720 --> 00:42:29.400
 So I'm not 100% that I can guarantee you we could go to opt-in for paper, but we are going

00:42:29.400 --> 00:42:33.100
 to be making a very large push over the next year.

00:42:33.100 --> 00:42:36.160
 We actually have several pretty neat things that I think you guys will like seeing coming

00:42:36.160 --> 00:42:40.600
 through.

00:42:40.600 --> 00:42:52.000
 Okay, so taking a look at the customer service fund financials.

00:42:52.000 --> 00:42:57.800
 In 2024, our budgeted revenue was $9.8 million.

00:42:57.800 --> 00:43:02.580
 Customer service is an internal service fund that is funded by the other funds within the

00:43:02.580 --> 00:43:05.720
 city who utilize customer service.

00:43:05.720 --> 00:43:12.160
 For the most part, that's primarily made up of the utilities for utility billing and customer

00:43:12.160 --> 00:43:15.120
 contact.

00:43:15.120 --> 00:43:20.760
 On the expense side, $9.8 million in expenditures.

00:43:20.760 --> 00:43:25.920
 For 2025, we do anticipate the revenue to increase to $11.4.

00:43:25.920 --> 00:43:33.680
 Again, those are transfers from internal departments and corresponding $11.4 million in expenditures.

00:43:33.680 --> 00:43:42.960
 You can see one of the primary drivers is personnel increases from $5.1 million to $6.5

00:43:42.960 --> 00:43:44.400
 million.

00:43:44.400 --> 00:43:51.640
 Customer service has quite a few employees, call center employees, and the 3% COLA and

00:43:51.640 --> 00:43:59.280
 2.5% merit are a big part of that increase in personnel services.

00:43:59.280 --> 00:44:07.320
 Otherwise, not a whole lot of change year over year with the customer service fund.

00:44:07.320 --> 00:44:14.800
 Okay, any other questions on customer service before we move on?

00:44:14.800 --> 00:44:19.600
 Really quickly, I'm noticing the transfer in from electrical is going up.

00:44:19.600 --> 00:44:25.160
 I'm assuming that's because the four DME dispatchers now moving over.

00:44:25.160 --> 00:44:28.880
 Those services are now handled by customer service versus DME.

00:44:28.880 --> 00:44:35.120
 But then water is also increasing by $600,000 in expected transfers.

00:44:35.120 --> 00:44:41.760
 Are we seeing an increase in water requests?

00:44:41.760 --> 00:44:54.200
 The way that we allocate out internal service funds is we determine the percentage of work

00:44:54.200 --> 00:44:59.840
 that that internal service fund is providing to those other departments.

00:44:59.840 --> 00:45:07.680
 So it's really more of a proportional increase as customer service or another internal service

00:45:07.680 --> 00:45:17.000
 expenses increase, whether or not water or electric has more billions, that proportional

00:45:17.000 --> 00:45:20.360
 share is still going to increase.

00:45:20.360 --> 00:45:27.680
 So, yeah, it's simply driven by an increase in customer services expenses that drives

00:45:27.680 --> 00:45:29.800
 those transfers.

00:45:29.800 --> 00:45:34.400
 The reason water might be receiving a higher proportion, a little bit higher proportion

00:45:34.400 --> 00:45:39.880
 compared to the other services is just that you have a formula that splits that cost.

00:45:39.880 --> 00:45:40.880
 Yes.

00:45:40.880 --> 00:45:41.880
 Yeah.

00:45:41.880 --> 00:45:43.800
 So we look at the number of billings.

00:45:43.800 --> 00:45:50.880
 We look at the total amount that's being received, the number of customer accounts,

00:45:50.880 --> 00:45:56.640
 and that all plays into how much each utility contributes to the customer service fund.

00:45:56.640 --> 00:45:57.640
 Yep.

00:45:57.640 --> 00:46:05.440
 And so does that also, fair to say, within the wastewater, that same type of mentality

00:46:05.440 --> 00:46:07.320
 or ratio is being used?

00:46:07.320 --> 00:46:08.320
 Yes.

00:46:08.320 --> 00:46:09.320
 Yeah.

00:46:09.320 --> 00:46:16.920
 Can you provide me any kind of insight on usage adoption of things like engaged debt

00:46:16.920 --> 00:46:21.720
 and any other thing we can use to be extremely efficient with how we deal with our customers,

00:46:21.720 --> 00:46:25.280
 but also keep a high level of service?

00:46:25.280 --> 00:46:27.120
 Is that stuff that's being used?

00:46:27.120 --> 00:46:32.360
 What kind of efforts do we do to try to increase usage, but keep customer satisfaction high,

00:46:32.360 --> 00:46:33.360
 things like that?

00:46:33.360 --> 00:46:37.840
 That's a good question, Chris.

00:46:37.840 --> 00:46:42.280
 Again, Krista Foster, customer service.

00:46:42.280 --> 00:46:48.740
 So customer service has a number of self-service options that we promote on our website.

00:46:48.740 --> 00:46:51.480
 We promote them on our phone lines.

00:46:51.480 --> 00:46:53.400
 We have our representatives also promote them.

00:46:53.400 --> 00:47:02.120
 I believe that over the last 12 to 18 months, we have put out about 10 customer-facing self-service

00:47:02.120 --> 00:47:11.760
 items that now receive roughly 15,000 contacts a year.

00:47:11.760 --> 00:47:14.160
 We're working on trying to drive those even more.

00:47:14.160 --> 00:47:20.380
 We are in the process of launching a self-service residential service application.

00:47:20.380 --> 00:47:24.040
 We already have one out for the commercial services so that they don't have to call in,

00:47:24.040 --> 00:47:26.640
 but they can just fill that out online.

00:47:26.640 --> 00:47:30.760
 We're in the final stages of developing one for the residential services as well.

00:47:30.760 --> 00:47:36.460
 We're also in the process of making our pay agreements, an online process that customers

00:47:36.460 --> 00:47:41.280
 can just go online 24 hours a day and request that as opposed to having to call in.

00:47:41.280 --> 00:47:46.280
 So we are very cognizant of wanting to drive those calls to self-service.

00:47:46.280 --> 00:47:50.280
 We also know that our customers prefer self-service, a lot of them.

00:47:50.280 --> 00:47:56.560
 So yes, we are definitely making efforts.

00:47:56.560 --> 00:47:59.440
 How do we gauge customer satisfaction with things like that?

00:47:59.440 --> 00:48:04.900
 So the way that we gauge customer satisfaction formally in customer service, if you're talking

00:48:04.900 --> 00:48:10.940
 with a representative, is we automatically drop that call into a three-question survey.

00:48:10.940 --> 00:48:15.880
 We ask the customer how satisfied were they with the support that they received, then

00:48:15.880 --> 00:48:21.240
 was this the first time that they've contacted us regarding this instance of an issue, and

00:48:21.240 --> 00:48:22.980
 was that issue resolved?

00:48:22.980 --> 00:48:29.640
 So that allows us to get a customer-reported satisfaction level as well as first call resolution

00:48:29.640 --> 00:48:30.640
 rate.

00:48:30.640 --> 00:48:34.720
 Because the way I see it, I can think that I resolved your call, but if you don't think

00:48:34.720 --> 00:48:38.600
 I resolved your call, yours is the important opinion there.

00:48:38.600 --> 00:48:40.760
 So that is what we run.

00:48:40.760 --> 00:48:47.600
 And we are running over 94 percent very satisfied customers and over 95 percent first call resolution

00:48:47.600 --> 00:48:48.600
 customer reported.

00:48:48.600 --> 00:48:49.600
 Thank you.

00:48:49.600 --> 00:48:50.600
 Thank you.

00:48:50.600 --> 00:48:51.600
 Anything else?

00:48:51.600 --> 00:48:52.600
 All right.

00:48:52.600 --> 00:48:53.600
 Thank you.

00:48:53.600 --> 00:48:54.600
 Okay.

00:48:54.600 --> 00:49:06.400
 Turning now to water, wastewater, and drainage.

00:49:06.400 --> 00:49:10.160
 So taking a look at the water and wastewater organizational chart.

00:49:10.160 --> 00:49:13.820
 This is just water and wastewater.

00:49:13.820 --> 00:49:19.080
 It does exclude drainage and watershed protection in this chart here.

00:49:19.080 --> 00:49:24.320
 So for the water and wastewater utility, the total FTE count in the current fiscal year

00:49:24.320 --> 00:49:29.200
 is 185.

00:49:29.200 --> 00:49:34.440
 For next fiscal year, we do anticipate 3.4 percent growth in residential customers.

00:49:34.440 --> 00:49:37.320
 This is related to water.

00:49:37.320 --> 00:49:40.720
 And 5.3 percent growth in commercial customers.

00:49:40.720 --> 00:49:47.400
 Additional factors that we are making consideration of is the 100 coal development, as well as

00:49:47.400 --> 00:49:50.920
 growth in the muds that we're seeing.

00:49:50.920 --> 00:49:57.800
 So in terms of revenue projections, as we had talked about previously, a 3 percent increase

00:49:57.800 --> 00:50:01.680
 in rate revenues based on growth.

00:50:01.680 --> 00:50:08.400
 Our forecast does include some reduction for water conservation implementation impacts.

00:50:08.400 --> 00:50:15.400
 So in future years, our anticipation is that residents will start to conserve more and

00:50:15.400 --> 00:50:23.040
 therefore consumption would be more reduced than otherwise.

00:50:23.040 --> 00:50:30.120
 And then also, if we have put together an application for the Texas Water Development

00:50:30.120 --> 00:50:37.760
 Board funding for the Ray Roberts Water Treatment Plant expansion project, which certainly has

00:50:37.760 --> 00:50:43.320
 some favorable rates associated with it.

00:50:43.320 --> 00:50:49.880
 And so if that's something that we are successful with, we'll bring it back to the board with

00:50:49.880 --> 00:50:51.900
 the rates associated with that.

00:50:51.900 --> 00:50:56.680
 On the expense projection side, again, just an increase in personnel costs associated

00:50:56.680 --> 00:51:00.600
 with the coal and the merit.

00:51:00.600 --> 00:51:01.600
 Thank you.

00:51:01.600 --> 00:51:06.360
 On the growth projections with the 100 coal development, now the mud growth, is that in

00:51:06.360 --> 00:51:09.820
 correlation with the 100 coal, or is that separate?

00:51:09.820 --> 00:51:12.320
 And how many others are there?

00:51:12.320 --> 00:51:14.120
 That's separate.

00:51:14.120 --> 00:51:15.120
 And I don't know.

00:51:15.120 --> 00:51:16.120
 Are you projecting?

00:51:16.120 --> 00:51:17.120
 Yes.

00:51:17.120 --> 00:51:20.600
 I mean, how many are you projecting that we're looking at, then?

00:51:20.600 --> 00:51:22.240
 We currently have a handful.

00:51:22.240 --> 00:51:30.280
 I don't know, Kyle, I'm not certain if Kyle knows on the mud projection, we can come back

00:51:30.280 --> 00:51:31.280
 to that.

00:51:31.280 --> 00:51:37.400
 I'm just curious as to, because it seems to ebb and flow with the popularity, yet it stays

00:51:37.400 --> 00:51:39.680
 constant in that it's eternal.

00:51:39.680 --> 00:51:40.680
 Right.

00:51:40.680 --> 00:51:44.040
 Okay, thank you.

00:51:44.040 --> 00:51:51.400
 Okay, so this was a graphic that we had provided last time, and I know the board has seen prior

00:51:51.400 --> 00:51:52.400
 to that.

00:51:52.400 --> 00:51:58.320
 But just wanted to show it again, because we did have a question about the red growth.

00:51:58.320 --> 00:52:05.360
 And so what this graphic is intended to show is the blue is the maximum demand, current

00:52:05.360 --> 00:52:14.720
 maximum demand that we saw as of August 28, 2023, which was 41 million gallons a day.

00:52:14.720 --> 00:52:24.600
 And the red is the anticipated demand in megagallons, or million gallons per day, you know, based

00:52:24.600 --> 00:52:26.800
 on growth.

00:52:26.800 --> 00:52:33.200
 So what you'll see is, you know, that the red does exceed the black dotted line, and

00:52:33.200 --> 00:52:36.920
 the black dotted line is our current capacity.

00:52:36.920 --> 00:52:44.160
 And so I just wanted to bring this back really to, you know, note that this is reflective

00:52:44.160 --> 00:52:53.640
 of maximum capacity, as well as the plan for the expansion is to build the footprints of

00:52:53.640 --> 00:53:02.760
 the building and expand, do the expansion to 20 million gallons a day, add that capacity,

00:53:02.760 --> 00:53:11.160
 but outfit the building in a way that we're able to add capacity as we're seeing that

00:53:11.160 --> 00:53:12.320
 demand increase.

00:53:12.320 --> 00:53:20.000
 So it's not just a fixed expansion up front, and then if the growth doesn't come, you know,

00:53:20.000 --> 00:53:26.720
 we're stuck with a plant that is, you know, has capacity far more than we need.

00:53:26.720 --> 00:53:33.080
 We're able to put in the infrastructure and the machinery as that growth actually occurs

00:53:33.080 --> 00:53:38.060
 to be able to then meet the daily demand.

00:53:38.060 --> 00:53:43.160
 Did you just say if the growth doesn't come?

00:53:43.160 --> 00:53:48.440
 As projected in this chart, yes, let me clear for that, the growth will come.

00:53:48.440 --> 00:53:50.400
 Build it and they will come.

00:53:50.400 --> 00:53:55.680
 And as the growth does come and we project that, what is the triggering timeframe to

00:53:55.680 --> 00:54:00.700
 start the expansion and what is your expectation on the completion before we have to trigger

00:54:00.700 --> 00:54:01.700
 and go again?

00:54:01.700 --> 00:54:02.700
 Yeah.

00:54:02.700 --> 00:54:06.880
 So I believe for the current expansion, I think it's three, three or four years.

00:54:06.880 --> 00:54:15.040
 I'll ask Kyle to come up and talk about the timeline.

00:54:15.040 --> 00:54:16.040
 Good morning.

00:54:16.040 --> 00:54:18.220
 Kyle Pettigo, planning and engineering division manager.

00:54:18.220 --> 00:54:26.080
 So currently the Ray Roberts expansion is out for, it's being advertised, the CMAR project

00:54:26.080 --> 00:54:33.580
 for the base project, which is the initial 20MGD expansion and like Matt said, installation

00:54:33.580 --> 00:54:40.400
 of the underground infrastructure basins so that we can modularly increase that.

00:54:40.400 --> 00:54:46.920
 As far as the future triggers, it will be monitoring flow and maintaining those projection

00:54:46.920 --> 00:54:53.940
 calculations as we go through our next water master planning exercise.

00:54:53.940 --> 00:55:02.080
 And do you have just a guesstimate as to the construction timeframes who were not caught?

00:55:02.080 --> 00:55:06.680
 The construction timeframe, since we would be doing most of the infrastructure up front

00:55:06.680 --> 00:55:12.400
 with the initial expansion, most of the underground infrastructure, which is more time consuming

00:55:12.400 --> 00:55:19.920
 to install, the construction timeframe to install new equipment between design, procurement

00:55:19.920 --> 00:55:24.680
 and installation is right around one to two years instead of three to five years.

00:55:24.680 --> 00:55:29.880
 And do you go through a building process, building inspection process like the rest

00:55:29.880 --> 00:55:30.880
 of us?

00:55:30.880 --> 00:55:31.880
 Yes.

00:55:31.880 --> 00:55:33.360
 And it's just a year and a half?

00:55:33.360 --> 00:55:34.360
 Yes.

00:55:34.360 --> 00:55:43.640
 Okay, thank you.

00:55:43.640 --> 00:55:50.800
 Okay so taking a look at the Water Fund five-year forecast in 2024, we had budgeted $63.1 million

00:55:50.800 --> 00:55:57.640
 in revenue and budgeted $58.7 in expenditures.

00:55:57.640 --> 00:56:09.000
 Something that you may recall from a prior slide last time was that the summer of 2023

00:56:09.000 --> 00:56:17.200
 was very hot in July, August and September and so the water consumption was notably higher.

00:56:17.200 --> 00:56:27.960
 And so you'll see in the 2023 actuals for revenue there, $48.3 million and in 2025,

00:56:27.960 --> 00:56:31.840
 we're at $49.5.

00:56:31.840 --> 00:56:37.880
 And so not too much of an increase there between actuals in 2023 and 2025, but that's largely

00:56:37.880 --> 00:56:45.440
 due to a greater than anticipated consumption amount in 2023.

00:56:45.440 --> 00:56:53.600
 And so when we budget, we're budgeting on a normal year, so not a wet or a dry year.

00:56:53.600 --> 00:56:56.760
 So I just wanted to note that.

00:56:56.760 --> 00:57:06.120
 For 2025, we anticipate $55.4 million in total revenue and $54.8 million on the expenditure

00:57:06.120 --> 00:57:07.120
 side.

00:57:07.120 --> 00:57:12.440
 Personnel services, as you've seen with the other utilities, is increasing.

00:57:12.440 --> 00:57:18.800
 We're about a million dollars, as well as the debt service transfers are increasing

00:57:18.800 --> 00:57:26.000
 from $11.8 million in 2024 to $14.5 million in 2025.

00:57:26.000 --> 00:57:34.560
 So this five-year forecast does contemplate a 3% increase in revenue or revenue sufficiency

00:57:34.560 --> 00:57:37.040
 requirement for 2025.

00:57:37.040 --> 00:57:43.680
 And as I mentioned, we'll come back with some rate structures that will meet that 3%

00:57:43.680 --> 00:57:46.760
 need on July 8th.

00:57:46.760 --> 00:57:52.020
 So what you'll notice here, as was the case with solid waste, is that the ending fund

00:57:52.020 --> 00:57:58.700
 balance that's projected in 2025 is $32.8 million, which is above the upper target of

00:57:58.700 --> 00:58:01.500
 $27 million.

00:58:01.500 --> 00:58:05.600
 But something that you'll also notice is that the debt service coverage ratio is below

00:58:05.600 --> 00:58:07.620
 one and a half times.

00:58:07.620 --> 00:58:14.680
 And so, again, this is something that we're trying to balance between the debt service

00:58:14.680 --> 00:58:18.420
 coverage ratio and the fund balance targets.

00:58:18.420 --> 00:58:27.400
 But as you'll notice, the fund balance does start to fall within the targeted upper and

00:58:27.400 --> 00:58:32.280
 lower bounds in years two through five.

00:58:32.280 --> 00:58:39.600
 And so that's part of the reason why we feel that that 3% increase in revenue is needed

00:58:39.600 --> 00:58:45.640
 in 2025 and in anticipation of those next years.

00:58:45.640 --> 00:58:52.360
 If there were not to be an increase in revenue in 2025, it would simply have to be a greater

00:58:52.360 --> 00:58:58.680
 increase in revenue in a future year to meet the requirements.

00:58:58.680 --> 00:59:04.600
 In 2026, is there any concern with how low that is, doesn't that drop below our legal

00:59:04.600 --> 00:59:07.880
 obligations on the debt service coverage?

00:59:07.880 --> 00:59:09.000
 That's a great question.

00:59:09.000 --> 00:59:17.800
 So the debt service coverage ratio, although we're showing it by fund, by the bond covenants,

00:59:17.800 --> 00:59:25.100
 the utility system is comprised of the electric, water, and wastewater system, and it's a combined

00:59:25.100 --> 00:59:30.200
 amount that is looked at for the covenants.

00:59:30.200 --> 00:59:41.920
 So our policy dictates that each fund should maintain that one and a half or at least one

00:59:41.920 --> 00:59:45.880
 and a quarter percent debt service coverage ratio.

00:59:45.880 --> 00:59:52.560
 But it's viewed holistically as the utility system.

00:59:52.560 --> 00:59:59.360
 So certainly for the water fund, this is something that we're keeping an eye on, and that we

00:59:59.360 --> 01:00:03.600
 do want to increase that debt service coverage ratio.

01:00:03.600 --> 01:00:10.540
 Okay, so taking a look at the water budget request packages for 2025, there's a number

01:00:10.540 --> 01:00:12.000
 of baseline adjustments.

01:00:12.000 --> 01:00:18.180
 The most notable is the increase in chemical costs of $1.7 million.

01:00:18.180 --> 01:00:26.940
 The remaining amounts are relatively small contract and cost of service increases.

01:00:26.940 --> 01:00:36.960
 And then for supplementals, water has requested nine FTEs for 2025 additional FTEs for a total

01:00:36.960 --> 01:00:42.140
 cost of $957,431 including benefits.

01:00:42.140 --> 01:00:51.500
 So total requests, total $3,870,086.

01:00:51.500 --> 01:00:53.620
 What is the employee recruitment?

01:00:53.620 --> 01:01:04.000
 Is that to recruit those nine or -- or do you have a bunch of retirements coming up

01:01:04.000 --> 01:01:05.000
 too?

01:01:05.000 --> 01:01:12.120
 Well, there is retirement, but we also -- the employee recruitment is to recruit its external

01:01:12.120 --> 01:01:20.340
 recruitment to recruit new talent for those nine positions, several of which the water

01:01:20.340 --> 01:01:30.160
 operations manager, we're looking to bring in new people.

01:01:30.160 --> 01:01:34.920
 Are you using headhunter types for these higher up positions?

01:01:34.920 --> 01:01:35.920
 Not that I believe.

01:01:35.920 --> 01:01:45.760
 I think it's more advertising, more advertising, just getting a wider spread for the drop request.

01:01:45.760 --> 01:01:47.800
 Okay.

01:01:47.800 --> 01:01:52.280
 On the sludge recycling, that's an expense.

01:01:52.280 --> 01:01:59.560
 Is there an additional expense going to the landfill or is that just a total turnkey cost?

01:01:59.560 --> 01:02:06.400
 I believe that's turnkey, that's -- and a portion of it is due to the expansion at Pecan

01:02:06.400 --> 01:02:07.400
 Creek.

01:02:07.400 --> 01:02:11.840
 I'm just curious as to, there's that cost for the recycling to the landfill, but then

01:02:11.840 --> 01:02:15.640
 is there a charge from the landfill for taking it or is that all tied in?

01:02:15.640 --> 01:02:16.640
 I believe that's all tied in.

01:02:16.640 --> 01:02:17.640
 Thank you.

01:02:17.640 --> 01:02:18.640
 Other questions?

01:02:18.640 --> 01:02:19.640
 Thank you, Kyle.

01:02:19.640 --> 01:02:20.640
 Okay.

01:02:20.640 --> 01:02:36.080
 So, taking a look at the water position summary, in 2024, we budgeted 110 positions.

01:02:36.080 --> 01:02:44.560
 And in 2025, the preliminary number is 119 with the nine requested positions.

01:02:44.560 --> 01:02:52.200
 So, these nine requested positions, seven of them are water operators, three at Ray

01:02:52.200 --> 01:02:55.880
 Roberts and four at Lake Lewisville.

01:02:55.880 --> 01:03:02.880
 Something in a review of the organization that was found is that at the plants, we had

01:03:02.880 --> 01:03:12.000
 very few individuals who were working overnight, and it presented a safety issue at the plants

01:03:12.000 --> 01:03:15.240
 because the plants run 24 hours a day.

01:03:15.240 --> 01:03:23.280
 And so, these seven positions address both the safety risk that is currently present

01:03:23.280 --> 01:03:32.040
 as well as, you know, bringing the level of personnel up to an industry standard.

01:03:32.040 --> 01:03:40.360
 The apprentice is just in addition to get someone in to learn, and then a proposed assistant

01:03:40.360 --> 01:03:42.200
 general manager.

01:03:42.200 --> 01:03:50.760
 Currently, water is one of the few utilities that does not have an assistant director or

01:03:50.760 --> 01:03:52.640
 assistant general manager.

01:03:52.640 --> 01:04:00.240
 And so, that's to provide support to the organization.

01:04:00.240 --> 01:04:11.920
 So, looking at the Water 5-Year Capital Plan for fiscal year 2025, it totals $130.4 million.

01:04:11.920 --> 01:04:19.480
 You'll notice that the primary driver of that are the plant improvements of $78.6 million.

01:04:19.480 --> 01:04:29.400
 Of the $130.4 million, $129 million of it, so nearly all, is anticipated debt funded.

01:04:29.400 --> 01:04:34.840
 And although we wrote debt funding, this is where we're really looking at those external

01:04:34.840 --> 01:04:43.920
 programs, either through the state or federal programs, to obtain the best financing terms

01:04:43.920 --> 01:04:48.400
 that we can possibly get in order to do those plant improvements.

01:04:48.400 --> 01:04:55.160
 So, it may not end up being a bond issuance, it may end up being a loan program through

01:04:55.160 --> 01:04:57.160
 the state or the federal government.

01:04:57.160 --> 01:04:59.520
 Question?

01:04:59.520 --> 01:05:00.520
 Yeah.

01:05:00.520 --> 01:05:01.520
 Yeah.

01:05:01.520 --> 01:05:02.520
 Thank you.

01:05:02.520 --> 01:05:04.920
 Please answer to your microphone, please.

01:05:04.920 --> 01:05:06.440
 Thank you.

01:05:06.440 --> 01:05:07.440
 Yeah.

01:05:07.440 --> 01:05:08.440
 Miscellaneous.

01:05:08.440 --> 01:05:13.480
 Seems to be one of your largest categories.

01:05:13.480 --> 01:05:14.480
 Yes.

01:05:14.480 --> 01:05:16.640
 So, what's miscellaneous?

01:05:16.640 --> 01:05:17.640
 Yeah.

01:05:17.640 --> 01:05:18.640
 What's it this year?

01:05:18.640 --> 01:05:24.040
 I don't, I don't, Kyle, do you know offhand?

01:05:24.040 --> 01:05:27.080
 If not, I can bring that back to you.

01:05:27.080 --> 01:05:28.080
 Yeah.

01:05:28.080 --> 01:05:32.440
 That's just, I mean, I know, I've said this before, is it a big number under something

01:05:32.440 --> 01:05:35.400
 that says miscellaneous is?

01:05:35.400 --> 01:05:41.180
 We can provide, that's the itemized breakdown with the submitted capital improvement plan.

01:05:41.180 --> 01:05:44.160
 What do you think that covers under miscellaneous?

01:05:44.160 --> 01:05:48.200
 Miscellaneous are any of the items in there that don't fit under the other categories

01:05:48.200 --> 01:05:57.040
 necessarily, or bridge the gap between categories, so for either a sludge improvement project

01:05:57.040 --> 01:06:03.640
 that could fall under there, not our lift stations, but some of the other conveyance

01:06:03.640 --> 01:06:09.120
 projects are under there as well.

01:06:09.120 --> 01:06:13.040
 I would like to recommend you show a breakdown of that when you come back.

01:06:13.040 --> 01:06:14.040
 Yeah.

01:06:14.040 --> 01:06:15.040
 That'd be interesting.

01:06:15.040 --> 01:06:16.040
 That's a good point.

01:06:16.040 --> 01:06:19.000
 I mean, that's a pretty big number for just open miscellaneous.

01:06:19.000 --> 01:06:24.720
 I'd be curious as you break that down, are there some that you would consider historical

01:06:24.720 --> 01:06:29.760
 type costs you know that they are going to be coming from your previous experience that

01:06:29.760 --> 01:06:33.480
 would fall under miscellaneous versus given in its own line item?

01:06:33.480 --> 01:06:35.040
 Does that make sense?

01:06:35.040 --> 01:06:36.040
 It doesn't make sense.

01:06:36.040 --> 01:06:37.680
 We can provide that with the breakdown.

01:06:37.680 --> 01:06:38.680
 Thank you.

01:06:38.680 --> 01:06:39.680
 Thanks.

01:06:39.680 --> 01:06:47.120
 It goes past us anyway.

01:06:47.120 --> 01:06:57.800
 Okay, so turning now to the Wastewater Fund, we anticipate 3.4 percent growth in residential

01:06:57.800 --> 01:07:04.360
 customers in 2025 and 4.1 percent growth in commercial customers.

01:07:04.360 --> 01:07:11.080
 Revenue projections, 3.7 percent increase in rate revenues just based on growth, and

01:07:11.080 --> 01:07:17.360
 that's not an increase in rates, that's just an increase in the revenue associated with

01:07:17.360 --> 01:07:18.360
 growth.

01:07:18.360 --> 01:07:23.400
 But we do anticipate that potential rate increases are going to be needed in order to meet the

01:07:23.400 --> 01:07:28.000
 debt service coverage ratio and policy targets going forward.

01:07:28.000 --> 01:07:35.360
 And again, on the expense projection side, personnel increases due to the COLA and the

01:07:35.360 --> 01:07:36.360
 merit.

01:07:36.360 --> 01:07:44.520
 So taking a look at the Wastewater Fund, in 2024 we budgeted $38.2 million in revenue

01:07:44.520 --> 01:07:50.360
 and total expenditures of $39.9 million with a use of reserve of $1.6 million.

01:07:50.360 --> 01:07:59.360
 In 2025 we anticipate $39.6 million in total revenues and $40.4 million in total expenditures

01:07:59.360 --> 01:08:04.200
 with a use of reserve of $740,000.

01:08:04.200 --> 01:08:13.080
 And as was noted, personnel services increasing from $6.5 million to $7.3 million, and then

01:08:13.080 --> 01:08:24.600
 debt service transfers increasing from $8.7 million to $10.8 million.

01:08:24.600 --> 01:08:29.880
 So taking a look at the fund balance, at the end of 2025 we anticipate a fund balance of

01:08:29.880 --> 01:08:34.960
 $14.4 million, which does fall within the target reserve.

01:08:34.960 --> 01:08:43.280
 However, that does include an 11 percent increase in the revenue sufficiency requirement.

01:08:43.280 --> 01:08:48.840
 And so this was something that was known last year that we had brought forward and discussed

01:08:48.840 --> 01:08:53.240
 with you in terms of what future years may look like.

01:08:53.240 --> 01:09:02.240
 And we'll again come back on July 8th with some options to meet that revenue requirement.

01:09:02.240 --> 01:09:07.520
 So taking a look at the budgetary requests for wastewater baseline adjustments, there's

01:09:07.520 --> 01:09:14.920
 just two, an increase in cybersecurity consulting and an increase in chemicals again.

01:09:14.920 --> 01:09:19.180
 And then one request for an FTE.

01:09:19.180 --> 01:09:27.200
 So the total baseline and supplemental requests totaling $916,369.

01:09:27.200 --> 01:09:32.440
 Any questions?

01:09:32.440 --> 01:09:44.140
 So taking a look at the wastewater position summary, 2024 budget, we budgeted at 101 positions.

01:09:44.140 --> 01:09:46.840
 This does include drainage and watershed.

01:09:46.840 --> 01:09:55.980
 And for 2025 preliminary, we're looking at 102 with the one wastewater addition.

01:09:55.980 --> 01:10:02.840
 The wastewater addition is a water reclamation technician that depending on experience would

01:10:02.840 --> 01:10:09.620
 be classified as one through four.

01:10:09.620 --> 01:10:15.900
 So taking a look at the wastewater five-year capital plan for 2025, the total capital plan

01:10:15.900 --> 01:10:24.540
 is $100.4 million, which is primarily driven by the replacement of lines and lift station

01:10:24.540 --> 01:10:32.620
 improvements.

01:10:32.620 --> 01:10:33.620
 Could you go back?

01:10:33.620 --> 01:10:34.620
 Yep.

01:10:34.620 --> 01:10:37.620
 $3 million in vehicles.

01:10:37.620 --> 01:10:42.220
 Yes, those are, yeah, vehicle replacements.

01:10:42.220 --> 01:10:52.700
 Okay, drainage.

01:10:52.700 --> 01:11:00.180
 So drainage, as you know, is part of the wastewater fund, but is a separate division that receives

01:11:00.180 --> 01:11:03.260
 separate drainage fee revenues.

01:11:03.260 --> 01:11:08.300
 And so drainage really has two components within it.

01:11:08.300 --> 01:11:13.740
 One is watershed protection, and watershed protection reports up to the Director of Environmental

01:11:13.740 --> 01:11:16.620
 Services.

01:11:16.620 --> 01:11:22.020
 Watershed protection currently has nine FTEs.

01:11:22.020 --> 01:11:29.300
 And then drainage currently has 17 FTEs and reports to the Director of Streets.

01:11:29.300 --> 01:11:37.660
 So between watershed and drainage, the current organizational chart includes 26 FTEs.

01:11:37.660 --> 01:11:43.620
 Taking a look at the drainage division five-year forecast, there's not a whole lot of change

01:11:43.620 --> 01:11:44.620
 from prior year.

01:11:44.620 --> 01:11:52.300
 We do anticipate a small increase in personnel services, but otherwise it's relatively flat

01:11:52.300 --> 01:12:03.340
 with the exception of the $130,000 in baseline adjustments that you'll see on the next slide.

01:12:03.340 --> 01:12:06.940
 So these are the proposed baseline adjustments for drainage.

01:12:06.940 --> 01:12:12.420
 Each of these are increases to the cost of existing expenditures or contracts within

01:12:12.420 --> 01:12:19.100
 the drainage fund, totaling $130,552.

01:12:19.100 --> 01:12:22.220
 Questions?

01:12:22.220 --> 01:12:26.660
 Any questions?

01:12:26.660 --> 01:12:29.220
 No.

01:12:29.220 --> 01:12:31.580
 Okay.

01:12:31.580 --> 01:12:37.360
 So as I had mentioned earlier, we do intend on bringing back proposed rate structures

01:12:37.360 --> 01:12:39.060
 for each of the utilities.

01:12:39.060 --> 01:12:47.100
 There's no anticipated change in drainage fees, but we do anticipate bringing forward

01:12:47.100 --> 01:12:52.320
 rate structures for electric water, wastewater, and solid waste.

01:12:52.320 --> 01:12:57.800
 And wanted to provide just a history, I know that the Board has seen this before, of where

01:12:57.800 --> 01:13:01.880
 rates have been over the last five or six years.

01:13:01.880 --> 01:13:12.900
 So between 2019 and 2021, we did do a number of rate reductions, and rates have not increased

01:13:12.900 --> 01:13:18.340
 until the current fiscal year in which we did a mid-year rate adjustment for DME, and

01:13:18.340 --> 01:13:22.380
 we had an 11% rate adjustment for wastewater.

01:13:22.380 --> 01:13:30.660
 So the solid waste and water funds, in particular, have not seen an increase for a number of

01:13:30.660 --> 01:13:39.220
 years despite where we've seen some pretty large increases in the cost of doing business

01:13:39.220 --> 01:13:42.980
 and the cost of personnel over this timeframe.

01:13:42.980 --> 01:13:48.980
 So just wanted to provide this as a summary, but we'll circle back to it on July 8th.

01:13:48.980 --> 01:13:49.980
 Yes?

01:13:49.980 --> 01:13:57.660
 So just a question on the wastewater, are we looking at an additional 11% increase?

01:13:57.660 --> 01:13:59.780
 We're looking at an additional-

01:13:59.780 --> 01:14:00.780
 As this is showing?

01:14:00.780 --> 01:14:01.780
 That's what I'm-

01:14:01.780 --> 01:14:02.780
 Yes, correct.

01:14:02.780 --> 01:14:03.780
 Yes.

01:14:03.780 --> 01:14:05.100
 And next year?

01:14:05.100 --> 01:14:07.260
 Right, in total revenue.

01:14:07.260 --> 01:14:14.580
 So what we're looking at is how to structure that.

01:14:14.580 --> 01:14:26.500
 Is it residential, commercial, industrial, fees, in order to meet that revenue sufficiency?

01:14:26.500 --> 01:14:27.500
 That's fine.

01:14:27.500 --> 01:14:32.260
 I've just- the 11% caught me again for the second year in a row, 11% increase.

01:14:32.260 --> 01:14:33.260
 Yes.

01:14:33.260 --> 01:14:34.260
 Yes.

01:14:34.260 --> 01:14:35.260
 Yep.

01:14:35.260 --> 01:14:36.260
 I look forward to that conversation.

01:14:36.260 --> 01:14:37.260
 Yeah.

01:14:37.260 --> 01:14:38.260
 Yeah.

01:14:38.260 --> 01:14:40.380
 And that was something, just to note, that we did bring forward last year.

01:14:40.380 --> 01:14:48.280
 It was known that this fund would need additional revenues going into the next couple of years

01:14:48.280 --> 01:14:54.520
 with the growth that we're seeing, with the increases in personnel costs and debt service.

01:14:54.520 --> 01:14:55.520
 So-

01:14:55.520 --> 01:14:56.520
 Yeah.

01:14:56.520 --> 01:14:57.520
 Yeah.

01:14:57.520 --> 01:15:06.220
 And I know we've already done this, we've gone over it, but it just reminds me of what,

01:15:06.220 --> 01:15:12.020
 in the past, it seemed like we would- water and wastewater went together as a pair, and

01:15:12.020 --> 01:15:17.420
 then if you had an increase in one, you had an increase in both.

01:15:17.420 --> 01:15:18.420
 Any-

01:15:18.420 --> 01:15:19.420
 Pretty level increase, too.

01:15:19.420 --> 01:15:20.420
 Yeah.

01:15:20.420 --> 01:15:24.260
 It was like we'd do 8%, 9%, or 9%, 8%, and I realized some of it was making the budget

01:15:24.260 --> 01:15:25.260
 work.

01:15:25.260 --> 01:15:26.260
 Right.

01:15:26.260 --> 01:15:30.260
 Do we have any insight into why we don't- why that's not happening anymore?

01:15:30.260 --> 01:15:34.500
 I mean, is it just we're realizing the actual cost of our wastewater?

01:15:34.500 --> 01:15:38.740
 I mean, we're getting a better idea, whereas it used to just be a huge estimate of what

01:15:38.740 --> 01:15:40.900
 it was going to cost us to run the place.

01:15:40.900 --> 01:15:41.900
 Yeah.

01:15:41.900 --> 01:15:42.900
 I think it's a couple different things.

01:15:42.900 --> 01:15:53.220
 I mean, I think, you know, one is potential differences in, you know, the cost of- in

01:15:53.220 --> 01:15:56.780
 the cost of O&M, so personnel.

01:15:56.780 --> 01:16:03.140
 As you saw in previous slides, the cost of chemicals for one, you know, fund is different

01:16:03.140 --> 01:16:06.460
 than the cost of chemical increases in another.

01:16:06.460 --> 01:16:11.100
 I also think that some of it is due to the infrastructure needs associated with each of

01:16:11.100 --> 01:16:12.100
 the funds.

01:16:12.100 --> 01:16:19.700
 The water is in a better position currently, you know, from an infrastructure perspective

01:16:19.700 --> 01:16:26.980
 than wastewater, where there is more need currently than there is on the water side.

01:16:26.980 --> 01:16:27.980
 So-

01:16:27.980 --> 01:16:31.700
 So that debt service is what's reflected there mostly?

01:16:31.700 --> 01:16:37.140
 Yes, quite a bit of it is driven by these large infrastructure projects.

01:16:37.140 --> 01:16:38.140
 Okay.

01:16:38.140 --> 01:16:39.140
 Yep.

01:16:39.140 --> 01:16:40.140
 All right.

01:16:40.140 --> 01:16:41.140
 Thanks.

01:16:41.140 --> 01:16:42.140
 Thanks.

01:16:42.140 --> 01:16:43.140
 Where in our-

01:16:43.140 --> 01:16:44.140
 Oh, sorry.

01:16:44.140 --> 01:16:50.060
 Where in our various income statements do we identify uncollectible or otherwise walked

01:16:50.060 --> 01:16:57.380
 away from revenue that we build, and does that come back in a future analysis, as well

01:16:57.380 --> 01:17:03.140
 as trends on 30-day past due all the way through when we're walking away from this stuff?

01:17:03.140 --> 01:17:04.140
 Yeah.

01:17:04.140 --> 01:17:07.180
 So we do budget for bad debt expense, and it is included.

01:17:07.180 --> 01:17:11.020
 I don't know offhand exactly in which line.

01:17:11.020 --> 01:17:14.500
 It's within the expenditure budget.

01:17:14.500 --> 01:17:21.820
 And so it has been, I know after we reviewed it this year, relatively steady.

01:17:21.820 --> 01:17:29.100
 We're not seeing an increase in write-offs for bad debt.

01:17:29.100 --> 01:17:30.100
 Does that help?

01:17:30.100 --> 01:17:31.100
 Yeah.

01:17:31.100 --> 01:17:38.380
 It's interesting what direction that's going, and what percentage we're losing, so to speak.

01:17:38.380 --> 01:17:43.180
 We're typically pretty low on the low end of bad debts.

01:17:43.180 --> 01:17:44.180
 Yes.

01:17:44.180 --> 01:17:45.180
 Like 1%.

01:17:45.180 --> 01:17:46.180
 Yeah.

01:17:46.180 --> 01:17:47.180
 Okay.

01:17:47.180 --> 01:17:48.180
 It is very low.

01:17:48.180 --> 01:17:49.180
 Perfect.

01:17:49.180 --> 01:17:50.180
 Thanks.

01:17:50.180 --> 01:17:56.680
 I think Krista would like to speak to that.

01:17:56.680 --> 01:17:59.020
 Krista Foster, customer service.

01:17:59.020 --> 01:18:04.100
 Customer service does track our bad debt, and we actually keep both the gross and the

01:18:04.100 --> 01:18:05.740
 net bad debt tracked.

01:18:05.740 --> 01:18:10.100
 So as we're receiving some of those funds back in, we kind of keep them going.

01:18:10.100 --> 01:18:16.220
 I want to say that we run less than a 0.25% of all of our revenues.

01:18:16.220 --> 01:18:18.720
 So we monitor those numbers very closely.

01:18:18.720 --> 01:18:22.860
 If I go back and find that that number is off by very much, then I will let you know.

01:18:22.860 --> 01:18:25.540
 But yes, it is something that we monitor and track.

01:18:25.540 --> 01:18:28.580
 And we look at our age debt on a monthly basis.

01:18:28.580 --> 01:18:33.340
 We recently did some enhancements to that process so that typically with the billing

01:18:33.340 --> 01:18:36.620
 system you're going to get that in three different intervals, right?

01:18:36.620 --> 01:18:41.380
 So we've actually increased that, does some custom reporting, so that we're looking at

01:18:41.380 --> 01:18:44.720
 it at every 30 days through six months old.

01:18:44.720 --> 01:18:49.980
 So we get to see those breakdowns and see residential versus commercial the whole bit.

01:18:49.980 --> 01:18:51.440
 Thank you.

01:18:51.440 --> 01:18:52.440
 Anything else?

01:18:52.440 --> 01:18:53.440
 Excellent question.

01:18:53.440 --> 01:18:54.440
 Thank you.

01:18:54.440 --> 01:18:55.440
 Okay.

01:18:55.440 --> 01:19:06.020
 So talking a little bit about next steps, on July 8th, as I had mentioned, we'll come

01:19:06.020 --> 01:19:12.520
 back to you with rate structures for each of the utilities.

01:19:12.520 --> 01:19:19.900
 And then on July 23rd, we will provide counsel with a preliminary overview of the utility

01:19:19.900 --> 01:19:20.900
 budgets and rates.

01:19:20.900 --> 01:19:25.620
 On August 10th, we have a budget workshop with the city council, followed by public

01:19:25.620 --> 01:19:28.260
 hearings and budget adoption.

01:19:28.260 --> 01:19:35.660
 There may be some items that are brought back to you in July and August, such as the electric

01:19:35.660 --> 01:19:44.100
 cost of service study that will be added in to this calendar as well.

01:19:44.100 --> 01:19:48.940
 With that, are there any additional questions we might be able to answer?

01:19:48.940 --> 01:19:49.940
 Yes.

01:19:49.940 --> 01:19:50.940
 I have one.

01:19:50.940 --> 01:19:51.940
 Yeah.

01:19:51.940 --> 01:19:54.700
 The budget workshop for city council, is that an open or closed meeting?

01:19:54.700 --> 01:19:56.660
 It's a public...

01:19:56.660 --> 01:19:57.660
 It's an open meeting.

01:19:57.660 --> 01:20:01.140
 It'll be open to the public if you want to attend.

01:20:01.140 --> 01:20:06.300
 I would be curious about that, because this is an awful lot of data to absorb.

01:20:06.300 --> 01:20:10.860
 And I wonder if at some point in the future, our public utility board might want to have

01:20:10.860 --> 01:20:16.820
 a workshop rather than just presentation of the budget.

01:20:16.820 --> 01:20:20.860
 I'm assuming the council's going to have the exact same presentation.

01:20:20.860 --> 01:20:23.420
 Yeah, for the utilities.

01:20:23.420 --> 01:20:27.980
 The workshop will also encompass the other departments within the city.

01:20:27.980 --> 01:20:31.900
 The general fund, the internal service funds, yeah.

01:20:31.900 --> 01:20:32.900
 Thank you.

01:20:32.900 --> 01:20:33.900
 Everything.

01:20:33.900 --> 01:20:34.900
 Further questions?

01:20:34.900 --> 01:20:41.980
 I was just going to add in Christine Taylor, assistant city manager.

01:20:41.980 --> 01:20:46.500
 I took note of a couple outstanding questions, so standard protocol will do a follow-up memo

01:20:46.500 --> 01:20:51.260
 that will accompany your backup for your next budget on July 8th.

01:20:51.260 --> 01:20:52.260
 Thank you.

01:20:52.260 --> 01:21:00.060
 All right, seeing there's no other questions, it is 10-21.

01:21:00.060 --> 01:21:01.220
 Do we have a motion to adjourn?

01:21:01.220 --> 01:21:02.220
 Motion to adjourn.

01:21:02.220 --> 01:21:03.780
 Okay, your turn.