Okay, it is 9 o'clock and we have a quorum, so I'll call to order the Public Utilities
Board for the City of Denton on Monday, September 9th, 2024.
Were there any presentations requested, Cassie?
No?
All right.
Then we'll go into Consent Agenda.
Does a board member wish to pull any items on the Consent Agenda?
Mr. Rybeck?
I'd like to pull items A and B.
Okay, any others?
All right.
Then do we have a motion to approve items C through F?
Mr. Reiner and Pluck seconds.
All in favor say aye.
Aye.
Motion carries.
Item A. And just as a reminder, if you ever have questions, just go ahead and contact
Tony and let him know what the question is so that the staff can be better prepared.
Good morning.
Sheldon Gatewood, Construction Project Manager with Capital Projects.
So this plan maintenance turned into an emergency repair?
Is that correct?
That's wrong, sir.
I'm sorry?
Item A is...
It's going to be...
It's the road project.
Oh, that's a road project.
Oh, my apologies.
Oh, you're fine.
I was like...
I took my glasses off.
That was a mistake.
The road project.
So is this road project one that's part of the ongoing master plan for our road work
or is it something new and different?
It's something new and different.
Okay.
And what is the origin of the project?
Basically the origin of the project is from when utilities went in, did their upgrades
and then Atmos went in, did their upgrades and then they brought the OCI's ratings on
the street a little bit.
I'm sorry.
OCI?
Yes.
That's the...
Basically, the rating standards that street uses to warrant it for a new reconstruction,
milling, overlay, micro-silling on any type of street.
So it brought the OCI low enough to warrant it a full street reconstruction.
Okay.
So this reconstruction project was really driven by all this other utility work?
Correct.
Okay.
What we weren't expecting in our overall plan for the roads for this to occur?
Correct.
Well, that's interesting.
In that case, why were we unprepared for it in terms of our planning if we knew all this
utility work was going to take place?
It was mainly for those external factors as far as franchise utilities getting in there
at the same time of when public utilities went in there because it simply is just going
to be those permanent trench repairs that you see on any type of water utility, sewer
utility project.
But seeing the Atmos went in at the same time, it basically degraded the street a little
bit more than was already sought after as far as utilities going in there.
Is it unusual for multiple utilities to do their work at the same time or is that typically
preferable?
It's preferable for most utilities to do their work at the same time, but we still have those
external factors as far as Atmos, they have a iron pipe that needs to be upgraded to something
that poly or a low pressure system that needs to be upgraded to an intramarine pressure
system.
It's unforeseeable as far as what their plans have in the future, but once they do come,
we have to adapt.
So because they were changing out the line to a different material, was their work therefore
more extensive?
Yes, sir.
So whenever they're changing out for new materials, say if they're going to low pressure to IP,
they have to dig back to a certain extent and of course install a testing station.
That way they can adapt to the new feed because it's a different technology that they use
from having their older models to newer models, basically.
Okay.
Well, I don't have any other questions.
Thank you.
Awesome.
Thank you.
Go ahead.
Thank you.
So I live over there and once they found out that I was on this committee at Crosshairs,
so the question is, do you have a projected timeframe when all this will be done and they'll
be back to normal streets?
So once we're given a notice to proceed for once to go to City Council next week, I plan
to have Texas been in there, hopefully within next month getting a rock and rolling, no
longer than 180 days from when their contract starts.
So they're going to be on top of it.
That'd be great.
Yes, sir.
Thank you.
Where do the funds come from?
Utilities.
From utilities?
Yes, sir.
Okay.
All the funds on this project come from utilities?
It's coming from utilities and the small drainage section from drainage.
Are you redoing the streets?
Yes, sir.
So utilities are paying for the street on this?
Yes, sir.
Okay.
So whenever the planning is done ... Oh, sorry.
When the planning was done for the budget for streets, the OCI didn't rank these to
be included.
And so there was no plan for streets to include these on the next batch that they're doing.
And then whenever all the utilities got replaced, the streets became in pretty bad disrepair.
So the utilities funding is what is being used to restore the streets.
Okay.
That's not a norm, correct?
It's not normal.
Because I mean, if you put a utility in a street, you're going to tear up the street.
Right.
And they usually come in and do their patches, and that's where you see the patches all through
the street.
So they would pay for the patches normally, not for the reconstruction of the street.
But we wouldn't be able to leave the streets in disrepair until streets would be able to
include it in a project, or in the planning budget part of it.
So we needed to go ahead and get them taken care of.
Okay.
There we go.
That's where it goes.
All right.
That helps.
What's your name?
Robin Names.
Project Mike.
Other questions?
All right.
Do we have a motion to approve Item A?
So moved.
I just moved, and we have a second.
Second.
Oh.
Devin Taylor seconds.
All in favor say aye.
Aye.
Thank you.
Item B. This one is the emergency repair.
Good morning, Stephen Gay, Director of Water Utilities.
Good morning.
I'll ask my question again.
Cut them out of order.
So this planned maintenance turned into more of an emergency repair, I take it?
Yes.
We actually had filter number four, which we were planning to do the work on, and then
16 failed.
And so we didn't anticipate 16 failing in the heat of the summer when our demands were
so aggressive.
So that's what escalated this repair.
So filter number four was already planned.
It was already failed.
So we planned to do the maintenance and repair on that.
And then 16 failed.
And so that escalated the need to get 16.
We had the contractor here.
It made good sense for us to move forward with that repair, and the tool that we have
available to do that is that emergency declaration.
Okay.
So just curiosity on this case, since it is affecting all of us.
Yes.
By increased water restrictions.
So how long will it take for these to be completed?
Well, filter number four is back in service.
The crew was here yesterday and while they're still here, they pulled out the under drains
and they're doing their evaluation.
We anticipate roughly two weeks before that filter is back in service and then we'll get
back to full capacity, which is 50 million gallons a day.
Okay.
So this thing with these filters, are they something that are installed and still under
warranty?
Yes, sir.
Great question.
They are under warranty.
Basically the warranty is expired, but the contractor has, actually a manufacturer has
evaluated the installation and has deemed that the filters have failed due to faulty
installation, so they're warranting their product anyway.
So they're coming to the table and they're with financial resources to offset the cost
of these repairs.
So the cost that we see is actually only a portion of the total repair.
Yes, sir.
That is correct.
So these filters, what is their typical life expectancy?
Basically 20 years and so what we're going to be doing, we actually had already planned
to do this, but we're going to be evaluating, we have to remove the filter material to do
a comprehensive inspection and so we're going to start.
We have 16 at Lake Louisville and so we're going to put them on a rotation to where we
remove the filter media and we do a comprehensive inspection on those periodically and that
will begin this year.
It was already planned actually before the filters failed.
Okay.
So once you put them on a plan program, will you be doing a certain number of them each
year in the off season?
Yes, sir.
Yes.
And so we'll have, it'll be a comprehensive program, maintenance program for the filters.
Okay.
Do we have similar filters at Ray Roberts?
No, sir.
They're different filters.
Well, they're different capacity.
We have fewer at Lake Ray Roberts.
It's a similar design.
I believe we have underdrain systems there as well and we use GAC, Granule Activated
Carbon at, no, we're using anthracite at Ray Roberts and we're shifting to GAC and we use
Granule Activated Carbon over at Lake Louisville currently and that's what we'll be putting
back into those filters, but at Ray Roberts we do that capacity improvement that we're
working on right now.
We're changing that filter media out to the GAC.
And what is the GAC?
Granule Activated Carbon.
That was okay.
You mentioned that.
I'm sorry.
We're changing that currently.
Okay.
Well, I don't have any further questions.
Questions?
Go ahead.
Sure.
Thank you.
So I'd like to, I saw the memo and the photos.
I guess since we're already talking about this, related to this expenditure, talk about
this now.
So the failure was, I was trying to understand what the failure was.
I saw like there were some torn holes in the...
Yeah, essentially the concrete wasn't level and then some media made it into the under
drain and so we put pressure on the filters or the under drains two different ways, right?
So you have filter media that sits on top of them and so the water percolates down through
the filter media and then goes into a main trough.
That's the filter process.
To clean the filters, we have to do an air scour.
So we basically push air up through the filter so we reverse the flow to break apart all
the little particles that are stuck to the filters and then we wash the filters to make
them clean.
And so we're putting pressure on going down and pressure on coming up.
And when that filter media, I guess, breaches the under drain, it gets caught in there and
it increases the pressure.
And so that's what caused those welds to fail.
Okay, I couldn't tell by the images that there were failed welds.
Yeah, because what it did is the gasket because the actual concrete was not level so the gasket
failed.
He had the material in there and then due to just the normal operation and the pressure
fluctuations caused the welds to fail on some of the troughs or some of the laterals.
Okay, and so the failure was in those lateral supports but the repairs to the concrete,
which is...
It's both.
Yeah, we're repairing the concrete, getting everything nice and level.
That's what they found yesterday when they pulled them out.
They said, "Yeah, the concrete really needs to be addressed."
Okay, thank you.
Yes, sir.
Further questions?
Okay, do we have a motion to approve item B?
So moved.
And second?
Oh, Mr. Rybeck seconds.
All in favor say aye.
Aye.
Motion carries.
Next item is, excuse me, consider approval of the August 26th, 2024 minutes.
Were there any changes or corrections?
I couldn't access the minutes.
I don't know if they're available.
When I go to view them online, it just gives me a message that the document's not available.
Oh, I had to go in a different way, but I couldn't get to them, yeah.
I would like to confirm that it's still the case.
Okay.
Nothing.
You couldn't get to them either?
Oh, I did.
You're a genius.
Well, so's Aaron.
Okay, Susan just said we can delay it and do both minutes next time.
Yeah, we don't.
Okay, we'll just delay that until the next meeting.
Thank you.
The next item is consider recommending the approval of the solid waste fiscal year 2024-2025
meeting and capital budgets.
All right.
Good morning, members of PUB, Madam Chair.
My name's Matt Hamilton, budget manager for the city.
Here today to present the budgets and rates for each of the utilities as well as the customer
service fund, which we've historically presented with the utilities.
So first, we have the solid waste fund.
There are no changes to the solid waste fund from the information that you had previously
seen.
So as you may recall, we presented to the PUB in June and July and then presented to
the city council in August.
There were no changes that had come out of the presentation from the city council.
So we've returned today just to present what we intend to bring forward on September 17th
for budget adoption.
So the solid waste fund, as you may recall, we're proposing a base rate increase of one
and a half percent.
In the fiscal year 2025 budget, we've included expenditures for closure, post closure, an
increase in personnel cost for the anticipated citywide COLA and merit, as well as an increase
in the debt service projected for 2025 from the 2024 CIP issuance.
Supplemental request for the solid waste and recycling fund includes software for their
vehicles in the amount of $121,500.
So this is the same PERFORMA five year forecast that you saw previously.
The proposed 2025 budget is $43,519,287.
And this is just an overview of the total resources and expenditures that you had seen
previously.
So the solid waste five year capital plan, a total of $12,995,711, which primarily is
debt funded and includes the projects that you see there.
And then just to provide an overview of the proposed rate changes, commercial and residential
cart service, a one and a half percent increase, $25 increase to the roll off rates for hauls,
$2.92 increase on the rentals, again, $25 on the compactor rates, $1.05 increase on
the rental for 30 cubic yard and $4.25 increase on the rental of a 40 cubic yard container.
And then landfill rates proposed to increase $1.50 with the exception of shingles.
And then commercial trash, also one and a half percent increase.
So again, these are the same proposals that we previously brought to the board.
And next steps will be budget adoption on September 17th.
Are there any questions in regards to solid waste?
Yes.
Could you go back to the slide with the debt service on it?
Excuse me.
Is that the one?
Maybe it's the next one.
Nope.
Oh, there you are.
Okay.
Thank you.
I just want to take another look at it, you kind of went by it.
Sure, sure.
So we're projecting that our debt service ratio for solid waste is going to be declining
over time?
Yes.
So the debt service coverage ratio just looks at the current year's cash flow and that current
year's debt service.
So whatever the revenues minus expenditures are in that year compared or, you know, over
the amounts that we would owe in debt service.
So some of that change is attributable to expenditures increasing in future years.
Some of it is attributable to the debt service increasing in the future years.
The city's policy is to maintain a debt service coverage ratio of at least one and a quarter
percent, but we target one and a half or, you know, 1.5.
So the solid waste fund is well above our policy targets for the debt service coverage
ratio.
Okay, and the revenue sufficiency requirement line item appears to just start next fiscal
year.
So have we not had that in previous years or?
So the revenue sufficiency requirement line is the anticipated additional revenue that
we will need in those future years, which is akin to rate increases.
And now that may be base rate or it may be, as you saw, some of the other rates in terms
of solid waste where, you know, we have landfill rates and other, you know, rates.
So not specific to, you know, residential base rates necessarily.
And that's something that we evaluate and look at very closely each year.
The percentages that you see in '26 through '29 are just projections at this point.
And so, you know, if there were to be changes in growth, if there were to be changes in
the fund's expenditures, you know, we could see that percentage fluctuate.
Well, I noticed as it went up, the debt service ratio went down.
So I was just curious if there was some relationship about that to try to maintain the debt service
ratio at a lower number.
It is that and that is the one tool that we use in order to keep that debt service coverage
ratio above the policy target.
And so it all plays together.
There's a revenue requirement to meet the expenditure needs as well as that debt service
coverage ratio, which is calculated based on the revenue and expenditures.
So okay, well, I'm not the expert financial guy, but thank you.
Yeah.
Yeah, of course.
Other questions?
Go ahead.
I know we've seen this, the statistics in our previous budgeting meetings, and unfortunately,
it's not in this.
The last solid waste residential rate increase, was that in 2000?
Do you know the year?
I want to say, was it like about 12 years ago?
I'll ask Brian to come up.
Brian Burner, Solid Waste Director with City of Denton.
You're correct.
I've just celebrated my sixth anniversary with the City of Denton, and we have not had
a rate increase in those six years, so it's been at least 10 years since we've realized
a rate increase.
You may remember that about five years ago, we actually cut rates by about 27%, and we've
carried that through to this point, which really is why it necessitates the 1.5% increase
moving forward.
Okay.
Thank you.
Other questions?
All right.
Do we have a motion to approve the solid waste fiscal year 2024-2025 operating cost?
Operating capital budgets.
Second.
Devin, second.
All in favor, say aye.
Aye.
Motion carries.
Next item is consider recommending the approval of the water fiscal year 2024-2025 operating
capital budgets.
Okay.
Matt Hamilton, budget manager, here to present the water budget rates for fiscal year 2025.
So for the water funds, we are proposing a base rate increase of 3%.
We again anticipate an increase in personnel costs, an increase in the debt service for
fiscal year 2025, and for the supplemental request for the water funds, we have seven
directors, one apprentice, and an assistant general manager, totaling nine FTEs for $957,431,
which does include the cost of benefits.
This is the water fund five-year forecast.
There were no changes since the last time you saw this.
So for fiscal year 2025, we are proposing a $55,635,824 million budget.
The water fund five-year capital, CIP.
For fiscal year 2025, we're proposing $130,426,000, which includes the various categories you
see there.
And in terms of the proposed rate changes, just to provide an overview, we're proposing
a 3% increase for residential water service, a 3% increase on commercial water service.
Both water services, just to note, that 3% increase includes both customers within the
corporate limits and outside of the corporate limits of the city.
The Upper Trinity Regional Water District wholesale rates, we had talked about this, adjusting
the current wholesale water rate to $0.96 from $0.90 to align with prior contract language.
And then the wholesale treated rate, as you may recall, the current rate at $0.61 is lower
than the wholesale rate, and making an adjustment to the $1.25 to align with current market
prices for cost recovery.
The meters, increase in the fire hydrant meter deposit to $3,000, just to align with the
cost of what the meter would cost if not returned.
And then the backflow testing, increasing from $15.95 to $25, just to align with the
actual cost of labor associated with the testing.
And then the backflow service and non-City of Denton meter testing, adding those fees
to the schedule.
Commercial irrigation rates, adding a tiered system to the irrigation rates, and then increasing
by 3%.
Water tap and meter fees, making a change just to align with actual costs associated
with those water taps.
And then taps over four inches, charging those on a per project basis.
So depending on the project and the various factors associated with the project, the cost
may be a little lower or a little higher than the prior rates, but that would just be reflective
of the actual cost associated with that project.
And then next steps will be budget adoption on September 17th.
Any questions on the water fund?
Page four on the capital requirements.
So over time, we actually expect our capital expenditures to go down in the next five years.
Now, this year, obviously, plan improvements is a lot higher than we expect to see in future
years.
There's a couple other ones that replace lines this coming year, also higher.
Is our history that we've ever seen lower costs on things moving forward, and how realistic
is it to expect that?
Yeah, so typically, well, I think a couple of things.
One is that there are some very large needed infrastructure improvements within the water
and wastewater systems that is reflected in this CIP that you see here, particularly the
plant improvements of 40 to 50 million over the next several years, which is attributable
to the growth that the city has experienced.
In prior years, a historical amount would be 40 to 50 million.
And so what you see here is you see the spike for this one-time infrastructure that's needed,
but then a return back to that 40 or 50 million in typical infrastructure improvements.
I have a question and a comment.
This slide, 134.26, that's 130 million.
It is.
This is expressed in thousands.
So that 130, 426 is millions.
Yes, sir.
I understand that.
But nothing on this slide indicates that it's being expressed in thousands.
Yes.
My apologies.
It should--
I would recommend you make an improvement.
I wanted to go back to the untreated and treated water rates.
So we're selling untreated wholesale water, or we're buying it?
I was a little confused about that.
Yeah.
I'll ask Stephen to come up.
Stephen Gay, Director of Water Utilities, Mr. Redbeck.
Are we purchasing that water, or are we selling water?
We sell both of those, our sales.
So the raw water is sold to Upper Trinity Regional Water District, and we also sell the
finished water to Upper Trinity Regional Water District.
That finished water goes to serve the communities of Crum and Sanger.
OK.
But we're selling it.
We're not buying it.
That is correct, sir.
OK.
I was just curious.
I saw that number jump 105%.
It's like, wow, is that a cost problem, or that's a business opportunity, I guess, on our part.
So why the big jump on that?
Well, we evaluated it.
It's been relatively stagnant for 20 years.
If you go back to the '80s, that's what the rate was for finished water.
And the organization hadn't re-evaluated it until recently, and we looked at our cost.
And that's our preliminary adjustment.
We're going to be doing a cost of service study this year, which is going to dig more
deeply into that number to make sure that we ensure full cost recovery for whatever
we sell.
And what percentage of our water are we selling in those two categories?
It's roughly, on average, is about a million gallons a day, is what we sell to those two
communities.
Which would be what percentage of our total?
Well, we do 50 million gallons a day as our treatment capacity, 17 million gallons a day
as our average daily demand, so 1/17 of that.
So 8% or 9%, something in that range.
Yeah.
OK.
Thank you.
You're very welcome.
I'm glad you asked me first.
I was curious, are we the sole providers for the water for Krumm and Sanger?
Krumm and Sanger also have groundwater wells that they rely on, but from a finished to
treated water, surface water perspective, it's us, but they're not our customers.
They're customers of the Opportunity Regional Water District.
And so our contract is to sell the water to Opportunity, and then Opportunity is their
provider.
Middleman.
Yes, sir.
Thank you.
Yes, sir.
Two questions.
The raw water, is that provided in the lake, or is that-- OK.
Yeah, they have an intake on Lake Louisville, and that's where they draw their water from.
And that's based off of the Dallas contract.
So Dallas has their contract for raw water purchases, and in the contract that we had
with Opportunity, it referenced the Dallas rate, and we would be 85% of the Dallas rate.
So we can just adjust the rate as Dallas adjusts theirs.
OK.
And my second is maybe somewhat of a comment, but also I just want to make sure we address
this in that cost of service study.
Yes, sir.
$1.25 per thousand is a very cheap rate for raw water.
Yes, sir.
Much less treated water.
So I just want to make sure--
Yes, sir.
This was our first shot at trying to realize that full cost recovery, and definitely the
cost of service is being driven by this one as well.
And I understand we can't necessarily shock those water departments by tripling their
rate in a year, but we do want to make sure that in the long term we bring that up to
full cost of service and full capital.
Those pipelines out there will have to be replaced every 50 years, and all the pumping
costs, and all that stuff.
Yes.
Well, and to be fair, in the Opportunity Regional Water District budget for the last five years,
they've increased their rate to those two communities by 5%, anticipating a rate increase
for us.
So I think there's some bandwidth there.
Yes, thank you.
Further questions?
All right.
Do we have a motion to approve the water fiscal year 2024-25 operating in capital budgets?
So moved.
Okay.
Kevin moved.
Second?
Second.
Okay.
Billy second.
All in favor say aye.
Aye.
All right.
Next one is consider recommending the approval of the wastewater fiscal year 2024-25 operating
in capital budgets.
Okay.
So an overview for the wastewater funds.
We are proposing an 11% increase in base rates.
This rate is needed to meet debt service coverage and policy targets.
We also are proposing an increase in the sale of treated affluent, as well as changing the
tapping fee structure, similar to the fee structure that you had seen for the water
fund.
Expense projections, again, we anticipate an increase in personnel and operating expenditures,
particularly in chemicals going into fiscal year 2025.
For supplemental requests, the only request included for the wastewater fund is one water
reclamation technician for a cost of $101,359,000 including benefits.
This is an overview of the wastewater five-year forecast.
This is the same forecast you had seen previously.
The total budget for the wastewater fund is $40,022,601.
And I'll just note that what you see here is just the wastewater component of it.
The wastewater fund also includes the drainage division.
So we just wanted to break out each of those components so you could see them independently.
So the drainage division, not much change here or no change since you saw it previously,
but just year over year, there's very little change.
The proposed budget for drainage is $5,639,563.
And here's just a combined look at both wastewater fund components, wastewater and drainage together.
So the total of the wastewater funds that we will bring forward to council and for your
consideration today is $45,662,164.
This is an overview of the wastewater five-year CIP.
And this is in thousands.
So a total of $10475,000,000.
And then providing an overview of the wastewater proposed rates.
So again, we are proposing an 11% increase to residential and commercial services, an
increase in the sale of treated effluent rates from $1.67 to $2.50 per thousand gallons.
And then the wastewater tap fees above four inches to be on a per project basis to align
with the actual costs associated with those individual projects.
And then an increase in the waste transportation manifest book, which is just reflective of
the actual costs of printing and producing those books.
And the next steps will be council.
Any questions on the wastewater fund?
Okay.
So we're predicting and proposing an ending fund balance of a million dollars.
So the drainage fund just pretty consistently is what I was looking at there.
We do have a policy within drainage to maintain a million dollar reserve.
And so every year we budget to meet that million dollar reserve.
If there is anything above and beyond that million dollars, it's put toward one time
capital projects.
If not, then it's a use of this reserve.
Typically drainage is pretty known and steady.
And so it's plus or minus, you know, a couple hundred thousand if that each year.
But there are quite a few, you know, drainage infrastructure needs that we know are coming.
And so just having that reserve is important to, you know, maintain if there's any emergency
types of situations.
Oh, yeah.
I remember that.
And I'm pretty sure we did that when we instigated drainage fees in the city of Denver.
We just threw that number out there of a million dollars, and that was 15, 16 years ago or
something, I believe.
Yeah.
But is that about how far deep we are into drainage fees now?
Yes, the drainage fees have not been updated in a significant amount of time.
Okay.
Yeah.
All right.
I just wanted to clarify that.
Thanks.
Go ahead, Danny.
Okay, so personnel services has a pretty steady just kind of future years, has about a 3%
growth, which would probably cost a living, wage increases, that sort of thing.
Now, if you go down to the capital projects, which I think is a couple more here, we have
about $400 million being spent to build a wastewater treatment plant.
It seems like that's likely going to lead to a staff of 15 or 20 increase.
Is that just not currently in the forecasts or will that be from existing staff being
relocated?
So we will evaluate the operational costs and needs of any infrastructure that is completed.
I think these plant improvements are anticipated to be completed, you know, a couple years
from now I'll let Stephen discuss the timing of it.
But that is something that we look at and include in the budget.
What's reflected here are not those specific supplemental requests in years four and five,
but they will be coming forward.
So normally we've got this new plant coming online next year, we're going to do a supplemental
for 12 new headcounts.
Is that how normally in the budget process?
Yeah, and well, Stephen Gade, Director of Water Utilities, the new plant will be, I guess,
the modifications at Pecan Creek, so it's an existing facility.
So we're adding that 5 million gallons of treatment capacity there.
We'll be able to manage that with our existing staff.
The newest plant will be up in the Clear Creek Basin and that's projected to be online within
the next five to six years.
So we'll see that staffing hit about that time.
So it's like an extra $100 million, an extra $150 million, an extra $150 million.
Those are primarily the Pecan Creek, not yet the Clear Creek?
Not yet Clear Creek, right.
We're building, currently we have a CMAR, Construction Manager Risk Project, out at
Pecan Creek to add 5 million gallons of MBR technology at additional capacity at that
plant.
Okay, thank you.
I was thinking that was the new plant, not the current, thank you.
No, sir, not yet.
We haven't even gotten into design on that yet, so, okay.
And the capital plan includes all the new development that's going to be happening in
Hunter and Cole?
Yes.
Yeah.
Other questions?
All right, do we have a motion to approve the Wastewater Fiscal Year 2024-25 Operating
in Capital Budgets?
Oh, you're moved?
Second?
Please, seconds.
All in favor say aye.
Aye.
Opposed?
Carries.
All right, on to the Electrical Fiscal Year 2024-25 Operating in Capital Budgets.
Okay, so the Electric Fund, we do have a couple of items that we wanted to update the board
on since the last time this was presented.
For the most part, it's the same, but there are a couple updates on the supplementals
and rates.
So as you previously saw, growth projections of 7.53% are anticipated for known residential
and commercial projects.
In Fiscal Year 2025, revenue projections, we are proposing a 1.5% base rate increase
effective October 1st.
And while keeping in mind that we do have a cost of service study that is ongoing and
is anticipated to be completed later this fiscal year, early 2025, with the primary
consideration of looking at those fixed costs, the facility and usage charges.
On the expense side, as you had seen with the other funds, we're anticipating an increase
in personnel costs for the citywide compensation, coal, and merit.
And then in terms of supplemental requests, what we are proposing for the Electric Fund
are nine new FTEs in Fiscal Year 2025, as well as a supplemental for equipment and supplies
and GIS cloud service.
So the total supplemental requests for each of those combined is $1,871,252.
So taking a look at the revised position requests, DME evaluated the requests.
As you may call, originally it was 16 and a half new FTEs and 25.
DME revised that down to nine.
And so the supplemental expense reduced from $3.7 million to the $1.8.
And here you can see the proposed nine positions.
The proposed rate summary-- so as you had seen previously, a 1 and 1/2% increase in
base rates, but something that is new, that came up as we evaluated the full fee schedule,
was pole attachment fees and making a revision to that schedule.
So the pole attachment fees is an annual rental fee for telecommunication and cable providers
when they attach to DME poles.
And then also adding a schedule for wholesale transmission service, neither of these impact
residential customers, but it's something that we wanted to update within the fee schedule
as we made the other changes.
So this is an overview of the electric five-year forecast.
The only change is in the supplemental amounts, reducing from that $3.7 to the $1.8 million.
And then an overview of the five-year CIP, which is unchanged from what the board saw
earlier this summer.
A total CIP of $75,022,730.
And this one is not in thousands, but in actual.
Next steps will be city council on September 17th.
Are there any questions on the electric fund?
Going back to page five, personnel cost in 2024 are $26 million, but we're adding nine
FTEs in 2025.
Why is the personnel cost lower?
Yeah.
So that's a really great question.
There are some position movements occurring between funds.
And so as you'll actually see in the customer service presentation that comes next, DME currently
has dispatchers that will move from the electric fund into the customer service fund to be
part of 311.
And so there's just some internal position movements that account for that.
Thank you.
I had a question about, was it CIS or GIS on one of the slides?
The software.
Cloud service.
Mm-hmm.
Could you refresh my memory on what that is?
Yeah.
Ask Tony.
So Tony went to DME general manager.
So this is basically moving a lot of our systems out of servers that are here locally to the
cloud.
For the payment of that cloud service.
So again, just to increase the social security for many of our systems that we have.
So GIS, is that a company or a system name?
Yeah, GIS specifically is the geographical information system.
So it's how we map out our entire system.
Thank you.
Question.
So just kind of me doing the math of all things being equal, so far we're looking at roughly
a 17% overall increase in all the utilities, would that be a fair statement?
I don't know.
Well, I'm looking at one and a half, one and a half is three plus three plus 11 increases.
In terms of rates.
Yes.
If you were to, yes.
If you were to add those percentages together.
Because people will ask and I'm just as a, you know, with everything being equal, we're
looking at roughly an increase of that this year.
Right.
Yeah.
No.
I understand.
The average.
That's correct.
Right.
But I like the sum number because it catches people's attention.
Yes.
All right.
Appreciate it.
Yes.
Thank you.
I'd like to go back to the page with the personnel on it.
One of those caught my eye.
There it is.
The electric technology business operations manager.
So one of the things that, that we started doing this past year is handling a lot of
our DME specific technology that was previously handled by the city's centralized tech services
area.
And so this, so this position is a manager to oversee the staff that we already have
on hand and try to relieve one of the division managers that's been overseeing that we're
in multiple hats.
Okay.
So basically DME is kind of going to take back ownership of managing those technology
assets for those that are specific to DME only.
So the technology that's across the board for the city will continue to be managed by
the city's centralized with the city's IT group.
Yes, sir.
Thank you.
On this slide, excuse me, on page five, the DSCR is pretty low 1.1 in 2023, 1.23 in 2025,
or excuse me, 2024.
Has that impacted our interest rates and our capital projects that we're debt borrowing
to pay for?
So the debt service coverage ratio is a factor that is looked at by the, by the rating agencies.
The debt service coverage ratio as it's looked at when it's reviewed by the rating agencies
is for the utility system as a whole.
And so they're looking not at necessarily specific funds or divisions.
They're looking at the entire utility system.
It is certainly a factor in the rating agency's ratings, which that rating directly impacts
the interest rates.
So the higher the debt service coverage ratio, you know, the more favorable the rating agencies
would look at that and then therefore your interest rate may be, you know, may be lower.
Right.
So with it being 1.01% in 2023, 1.23 in 2024, it's a little bit lower than our other areas,
which based on what you said could have an impact on rates.
Did we experience an impact on our interest rates?
We did not.
So the utility system is currently rated A plus, which is high investment grade.
The CEOs that the utilities issue under the city of Denton rating is double A and so,
or excuse me, double A plus.
So one notch below the highest rating, which is triple A. So both the city and the utility
system are very highly rated.
So, yeah.
Yeah, why we need it.
Right.
Just a quick question, you may have touched on this earlier, the revenue sufficiency requirement
kind of looks like it went from zero to one and a half this coming year and then it's
going up around five, five and a half.
What's driving that line item?
Yeah, there's a couple of things that drive that.
One is operating expenses, just in general operating expenses and debt service as well
as the revenue projection.
But in this case, a lot of what's driving it is the 31 million that was needed to be
securitized this year over the next five years for the unanticipated purchase power expense
in August of 20, last year, 23.
And so what we anticipate is that the debt service as we forecast this out, you don't
see here, but in 2030 actually dips back down.
And so what you see here is you see these five and a half, five percent rate increases
again as I had mentioned with the other funds, that's just an anticipated number at this
point, but once we get through the cost of service study, we'll have a much better idea
of whether or not that five and a half is something that we'll need to move forward
with next year.
So it's just a projection at this point, but we'll see where that cost of service study
lands.
Mr. Rubick, I'll just point out too that if you remember in February when we came to the
board and to the council, we were projecting a five percent increase for 25 and we were
able to work that down to one and a half.
That's our commitment going forward is that I know these are big numbers, but we'll continue
to look at that, look at our budgets, there's still a number of things that we can potentially
do.
As an example, one of the things that we're going to be doing is some of these nine positions,
some of those we're going to hold them for a little bit, we're not going to hire them
on October 1st, so we can finish out the year, see where we end up, so those are some strategies
that we'll continue to put in place to make sure that we're being as responsible as we
can with these rate increases.
Thank you.
Further questions?
All right.
Do we have a motion to approve the electric fiscal year 2024-25 operating and capital
budgets?
Mr. Rybak, Billy seconds.
All in favor say aye.
Aye.
Opposed?
Motion carries.
Consider recommending the customer service fiscal year 2024-25 operating budget.
Okay, this is the last fund to present to you today and it's short and sweet.
So as you had seen previously, the customer service fund is proposing $230,200 in baseline
and supplemental requests and we've listed out what those requests are.
And then as we talked about a little earlier, there are some position movements in regard
to the new 311 call center, so moving and reclassifying, which just means moving from
the funds for DME dispatchers to the 311 call center, so the 311 call center in the current
year has six employees and starting October 1st, they'll have 10.
So this is an overview of the customer service five-year forecast.
We're proposing a budget of $11,965,917 and they don't have a capital improvement program.
And so that's all we have.
Questions?
Short and sweet.
All right, do we have a motion to approve the customer service fiscal year 2024-25 operating
budget?
Second.
And Devin, second, all in favor, say aye.
Aye.
Carries.
Okay.
The remaining items on the agenda, there's four more, which are the recommendation of
the rate ordinances that will go to council for electric, water, wastewater, and solid
waste.
We don't have a presentation.
Those were included in the presentations you just saw.
All right, so we just need to take them each individually.
Yes.
All right, do we have a motion to approve establishing the rates and fees for wastewater
service, repealing ordinance 22, 1857, and providing for repealer, providing for severability
clause, and providing an effective date.
So moved.
Mr. Cheek moves.
Second.
Aaron Newquist seconds.
All in favor, say aye.
Aye.
Opposed?
Carries.
Madam Chair, that was H right?
I think we may have skipped G.
Did I skip G?
Oh, I'm sorry.
That was H.
Yes.
Thank you.
All right.
Let's go back to G. Consider recommending the adoption of ordinance for the city of
Denton, Texas, establishing the rates for water service, providing for repealer, and
providing for severability clause, and providing an effective date.
So moved.
Devin moves.
Do we have a second?
Any seconds?
All in favor?
Aye.
Okay.
G is approved.
Consider recommending the adoption of the ordinance for the city of Denton, Texas, establishing
the rates for electric service, providing for repealer, providing for severability clause,
and providing for an effective date.
Do we have a motion?
Devin moved.
Thomas seconds.
All in favor, say aye.
Aye.
Opposed?
Carries.
Consider recommending the adoption of an ordinance for the city of Denton, Texas, establishing
the rates for solid waste and recycling collection service, repealing ordinance 23-1736, providing
for a repealer, providing for a severability clause, and providing an effective date.
Do we have a motion?
Okay.
Thomas is going to move.
Billy's going to second.
All in favor?
Say aye.
Aye.
Opposed?
Motion carries.
Management reports.
Tony.
Madam Chair, members of the PUB, so in your backup, we did include a memo from the water
department.
Stephen Gay is here.
I know it was some of the questions that you may have had already came in an earlier item,
but if there are additional questions regarding the memo that Stephen provided, he's still
here.
Happy to have him come up here and answer your questions.
With the water restrictions that we're on now, has there been any enforcement action
taken and if so, do we know the impact of that enforcement?
Stephen Gay, Director of Water Utilities, no, we have not enforced those restrictions.
Thank you.
Just to repeat the question, how soon do we anticipate the current restriction to be lifted?
Once the filter number 16 is fully back in service, so within two weeks.
Dispute, possibly, two weeks.
Yes, sir.
Thank you.
And the recent rain helped.
Yes, it did.
Yes, sir?
So I've been following along on the Waterwise Denton site.
I've been really impressed that every morning, I think it's by 8 a.m., you have updated with
the previous day's stats and it's been really good.
We were bouncing up in the stage trigger drought restrictions until the rain came and we had
a significant, I don't know, 8 million dollar or 8 million or 6 million gallon decrease.
I don't know how big it is, but it's a big drop on the chart and you could see it daily.
It was really, I really appreciate that data being available to the public, almost live,
like the next morning.
You're very welcome.
And our business partners at TWU and UNT and our parks departments really helped out as
well because they significantly curtailed their use.
I think it's about a 15 million gallon decrease from the peak to a few days ago during most
of the rain.
So that's a really significant change and it's really great to see it live, not hear
about it a month later or that kind of thing.
Those reports come out every morning at 7 a.m. so then we turn them right around.
Well, I would like to thank you, sir, for that.
I was unaware it was available at the City of Denton website.
It's Discuss Denton.
We have our own site.
All right, so the next item is just future agendas.
It's all blank.
Don't think that we're not going to have meetings.
We will.
We're going to try to work on getting this populated a little bit better for the next
meeting.
I know there's a couple of items that will be coming for you.
I want to give you a heads up that way you can plan to be here for those.
And then new business action.
There was a request at the last meeting on this item from Stephen.
He's provided that.
Solid Waste Department is also working on a question regarding card audits and they're
planning to have that ready for the Board on the 14th of October and then still following
up with Fleet on the one outstanding question on the EV vehicles.
But with that, happy to answer any questions you have or if there's anything else you'd
like to request.
All right, I guess not.
Concluding items.
Does any Board member wish to make a statement to the public or have a future agenda item
added?
Seeing none, it is -- oh, 959.
Motion to adjourn.