Good morning, I'd like to call to order the public utility board meeting, the public utility
board of the city of Denton meeting of Monday, June 9th, 2025 to order.
It is 9 a.m.
We have six members of the board, so there is a quorum.
Are there any presentations from members of the public?
No, there are not.
No surprise.
All right.
We've got a consent agenda.
Would any members like to pull any items?
Mr. Ryback.
Item G.
Pulling item G.
I'd like to pull item C as in cat.
We will entertain a motion to approve items A, B, D, E and F.
So moved.
We have a motion from Ms. Parker.
Second.
Second from Mr. Plot.
All those in favor, please say aye.
Aye.
Any opposed, sign the same.
It passes unanimously.
Moving on to item C. My question is just in a nutshell, why do we have to pull it?
So Mr. Chair, Tony pointed to the general manager.
So this is a joint project with the water, wastewater, solid waste and the electric utility.
We did do an RFP for this charter mandated study.
The charter requires that we do a management study every 10 years.
The last one was in 2018, but after reviewing the proposals and looking at the scope that
we had originally provided, there was just a lack of proposals that I think met the full
scope.
And so the proposal here is to reject these proposals, rework the scope and then reissue
the RFP and then come back.
Okay, I just wasn't clear on that because it said something about a lack of personnel
in there as well.
Yeah, I think that's probably the other issue too, is that we have seen some turnover in
the utilities and making sure that we have manpower to do that.
So there's a little bit of a delay needed though.
I don't think that part's going to change anytime soon with any company or government
entity.
Maybe so.
All right.
Was there anything else about the scope that was difficult for the respondents to comply
with?
Yeah, I think there was just an overall lacking on the electric side, really to be honest
with you.
The level of responses just didn't seem to fulfill I think what was needed to really
evaluate the electric utility was kind of the primary area.
Thank you.
Any additional questions, if not an entertaining motion to approve, well we do them both, right?
Yeah.
Okay.
All right, let's go on to item G. Mr. Rybeck, you pulled that one.
Okay, all right, what's, all right.
Item C, an entertaining motion to approve item C.
So moved.
We have a motion for Mr. Rybeck.
Second.
Second from Ms. Parker.
All those in favor, please say aye.
Aye.
Opposed?
Sign the same.
Passes 6-0.
All right, item G. Good morning.
Good morning.
Dante Hale, Capital Projects Project Manager.
Thank you.
I read the agenda information sheet and I was a little bit confused about dates.
Yes, sir.
One said something had to be done before the school year started this year, and then another
thing referred to the project wouldn't be completed until second quarter of next year,
so I was a little confused about which date, or is there some portion of the project that
needs to move forward?
Yes, sir.
Sorry about the confusion.
That was my fault.
So to clarify, we are seeking to split this project into two phases, this first phase
starting first to expedite a portion of Westgate East-West so that we can try and alleviate
some of the congestion that is being experienced at the new school.
So the goal is to try and work with the contractor to have a portion of that roadway paved so
that we can get traffic out onto the frontage road of I-35, and the overall completion of
the project would be quarter two.
Well, I'm going to ask a dumb question, but it's already June, so is there enough time
left for them to execute that before the start of school?
It will be tight.
The goal is if we are approved next week with the City Council is to work with the contractor
to see what we can do to expedite that, and the goal is to try and get a portion of that
paved as quickly as possible so that we can alleviate that traffic on the East and West
portion of Westgate.
Well, that should prove to be challenging.
Yes, sir.
I would recommend that you clarify that in your agenda information before it goes forward
to Council.
Yes, sir.
Thank you for that recommendation.
Otherwise, it seemed fine by just looking at this date, which is which, so thank you.
Completely understand.
Apologies.
Okay.
Any other questions?
I have one.
Is that a typo on one of the contractor's bids for $900,000?
Did you leave a three off of there, maybe?
Sorry.
Urbans, urban infrastructure.
On our sheet, it shows the total proposal amount of everybody else to be 3.6 and up,
and their bid tabulation shows to be $988,000.
I believe that may have been a typo.
Just a typo.
Okay.
Otherwise, their price would have beat everybody else, and I'm sure it would have been withdrawn.
Okay.
No additional questions?
I entertain a motion to approve.
So moved.
We have a motion.
Do we have a second?
Aaron, he has the second.
All those in favor, please say aye.
Aye.
Any opposed, sign the same.
All right.
Thank you.
Oh, I thought you were doing well.
Should we note that I arrived during that last item?
Oh, okay.
You didn't vote?
Or you did vote?
Okay.
You're fine.
Yeah.
You heard most of what you needed to hear.
Yeah.
You would have protested otherwise.
Mr. Harris has entered the building.
All right, we're moving on to number three items for individual consideration.
First one is the consideration of the approval of the minutes of May 19th.
Entertain a motion to approve.
So moved.
We'll take a motion or a motion and a second motion from Rob and second from Devin.
All those in favor, please say aye.
Aye.
Passes unanimously.
We're moving on to 3B, consider recommending adoption of the ordinance to execute a contract
with Holt, Texas.
Good morning, Tom Green, Director of Facilities and Fleet Services.
This response contract is with Holt, Texas, which is Holt Caterpillar.
They are off the buy board.
The City of Denton Fleet Services Department purchases, repairs, maintains, and runs various
types of Caterpillar construction equipment utilized by several departments to support
the city's services.
The construction equipment is utilized by multiple departments to provide the services
to include moving of the bulk materials, loaders, and excavators at the landfill and the streets
department.
The proposed contract allows for the purchase, rental, and repair of these assets utilized
by the several departments as mentioned.
The services provided by this contract ensure that the assets remained up and running.
They have special diagnostic equipment that's required to repair them, and the technical
knowledge to make sure that they're operational.
All vehicles and equipment will be acquired through the city's budgeting process, and
the city will only pay for services rendered, and we are not obligated to spend the full
amount of this contract.
Here are the contract estimates by department and fund of what we would traditionally see.
Again, these are projections based off of a collaborative effort with the utility departments.
On the right-hand side, you'll see that an acquisition example is the trash compactor.
One piece of equipment alone is over $1 million, therefore resulting in the large ask for this
contract.
Staff recommends approval of a one-year with four additional one-year extensions and a
total of five years not to exceed the amount with Whole Texas for $14,983,500.
Any questions?
Mr. Rebic.
Could you go back a couple of slides where you have your projection?
Of course.
So in your asset replacements, what are you anticipating will be in need of replacement
over the next several years?
Absolutely.
For this fiscal year, we have two articulating dump trucks at the landfill that are scheduled
for replacements.
Those are over $1 million a piece.
Those are those off-road dump trucks that you see that have the open rear end tailgate,
the big construction equipment, six wheels, big tires.
They utilize that to move the block material to landfill.
There's a couple backhoe acquisitions that need to be made for replacements throughout
the year, and of course the mini excavators and other various CAD equipment that's used
to move the material and/or excavate for the utilities.
I was just thinking it might be useful as you move this forward to Council to maybe
give some note about what those asset replacements look like over the next coming, if not the
whole term, at least a few years hence.
Yes, sir.
Noted.
Thank you.
Mr. Rayner.
What's the life expectancy, like the question that was just asked, that equipment?
Well, the life expectancy of each equipment varies.
Equipment to landfill we try to get seven years out of.
Of course with the corrosiveness of the trash, it may not last that long, or depending if
we change the operation.
We have scheduled each asset to be 10 to 15 years of expected life to really utilize that
equipment throughout.
We believe with our good maintenance program that we can get a little bit more than expected,
and that's where we're at for most of the Caterpillar construction equipment is 10 to
15 years.
An example of the trash compactor, and there's a picture of what would be the life expectancy
that you would like on that one.
The trash compactors see the most use actually at the landfill.
They're ran every day, all day, and there's two of them.
We see about five to seven years before they need an overhaul, and then an additional five
to seven years of continued operations.
And the overhaul, tell me what that is.
Traditionally it would be the wearable items like a transmission or an engine and driveline
items.
Good.
Thank you, sir.
So you don't have a breakdown of the equipment that you plan to purchase?
They're all projections.
We do have that schedule list based off of our 15-point maintenance schedule and faster,
so I can provide that in additional documentation.
This year right now, the $2 million for replacement is the two articulating dump trucks.
I'd have to look at my list for the future years.
Okay, but you don't bring those back individually, do you?
No, no, sir.
Okay.
So you've got two articulating trucks planned to buy through Caterpillar off the buy board?
Yes, sir.
Okay.
So what you're calling a trash compactor, that's an 815, right?
I'm not exactly sure of the model number.
I don't know.
That's what it looks like, just a regular compactor to me, but I didn't know if there's
any difference or not.
Do you end up getting different pad foots on them than a regular compactor?
Pad foots and those greasing specifications are different because of the corrosiveness
in the trash landfill.
So the trash is very corrosive, so we have to use a little bit more heavy-duty items
and repair cycles than you would at a normal dirt facility.
Subgrade compactor or whatever?
Okay.
All right.
So this approval is for the entire amount of $15 million for the next five years, is
that correct?
Yes, sir.
All right.
So none of this comes back, right?
It does not.
Okay.
And this is the capacity to buy and to note that all of these asset acquisitions go through
the city's budgeting cycle, so unless the department requests it, they have the funds,
it goes through procurement, and then it goes through the budgeting process, do we make
that acquisition?
There's still a lot of approvals required to make an acquisition.
But acquisition will come back through in the budget process.
The dollar amount issued for debt or operating funds will go through the budgeting process,
so when we do our fiscal year, there will be projections on what assets need to be replaced,
what assets need to be bought now, and then that will be approved to move forward or,
of course, adjusted.
Okay.
All right.
So that's where our approval process is, in the budget.
Right.
Okay.
That's all I got.
It doesn't appear to be any additional questions, so we'll entertain a motion for approval.
So moved.
We have a motion to approve.
We have a second from Mr. Rybak, but the motion was from Mr. Rayner.
All those in favor, please say aye.
Aye.
Any opposed, sign the same.
Thank you.
Passes unanimously.
Thank you.
So we're on C now, management reports already.
So, Mr. Chair, members of the board, don't have a whole lot of stuff to share with this
morning.
Just a reminder that starting June 23rd, kind of the budget process kind of begins in earnest
here, so the finance department will be providing to you a financial update on the 23rd, July
14th.
They will be conducting a budget workshop with you on the various funds, and then the
target is July 28th, that the PAB will consider approval and recommendation to the council
on the various budgets and rate ordinances as well.
And then for new business, we actually do not have any new business that we have pending
with you, but certainly if there's anything else that you would like, please let us know.
Mr. Rybak.
Tony, I just wanted to let you know that I did review the report on the collections that
I had asked for, even though I wasn't at the meeting, that I do want to thank finance for
providing that to us.
You're welcome on their behalf.
All right.
Any other?
All right.
Well, I think this is the point at which we move into the closed meeting, is that correct,
to consider PUB25-078, and then we'll come back in to vote on item D. Who's going to
be giving this presentation?
You are?
All right.
It is 9/28.
Public utility board has now at 9/28, public utility board has now at 9/28 a.m.
Reconvened from the closed session as no official, and no official action was taken.
All right, we're back on.
So we are, is there any further discussion regarding item D?
Yes.
Okay.
All right, good morning, PUB and board, Vispopentavong, ADF Finance, here to discuss ECA and TCRF.
So just to provide a current policy and rate quickly, energy cost adjustment, currently
it's at a plus or minus $10 million, and the rate is at .0462.
Current cost recovery factor, we're recommending no changes.
So those are the small, medium, large.
So we do have a few adjustments that are coming today as, you know, when we talk about purchase
power, you know, that fluctuates, you know, power goes up and down, especially between
summer and the winter months.
So one year of ECA monthly review and looking at 24 months, we think provides a better outlook
just so we can look at the data at a longer period of time.
And the next thing we want to talk about is the buffer.
So going from 10 million to 20 million, and that 20 million is actually based on 60 days
worth of average purchase power.
But also maintaining the current rate at .0462 per kilowatts.
This is the other recommendation is we wanted to create a new schedule, which is called
large load.
This large load is really looking at power that's over 20 megawatts.
So the customers that pull power that's over 20 megawatts.
And on this buffer, we're thinking we're looking at zero to 20 million.
We're still going to forecast it just like the other ECA, looking at 12 months, but like
I said before, looking at the history and looking at 24 months and the rate would be
at .0515.
So here is just a current look at the ECA in the T-server F, maintaining at .0462.
By May, it'll get us around 13 million dollars.
The T-server F maintaining at .0176, it'll give us about 4.6 million dollar balance.
So here is the recommendation.
So effective July 1st, we're coming to you to maintain the rate at .0462, but looking
at the buffer going from 10 million to 20 million plus or minus.
Like I said, T-server F, no change, but we'll still take a look at it.
And then the new schedule we're talking about is the large load, is for the ECA.
Create the new ECA large load schedule.
We're still going to look at it on a monthly basis, but we could adjust it quarterly.
And the buffer will be zero to 20 million dollars and the rate will be .0515 kilowatts.
Any questions?
So I think it's important as we add new rate schedules to treat all customers fairly.
And I think this proposal seems to do that.
Our long-term residents are kind of what we often refer to as our native load.
The load that DME has had for the last 50 years and has been steadily growing has made
lots of investments for energy.
And so while these very large potential new customers, you know, we need to treat them
fairly as well, but there is a potential for risk to our existing residential customer
base in that these large loads could ramp very quickly, not allowing lots of pre-purchase
time or the best rates in energy purchases.
And they could ramp down quickly, which would have the potential to leave financial burden
for our existing customers.
However, we also don't want to charge our large customers extra and then subsidize our
residential rates.
And I feel like this proposal does a really good job of there will be a separate ECA account
for both of those customer groups, and their rates will move independently based on the
needs of those two categories of customer.
So I do want to applaud that separation while being fair to both existing and new, not creating
a lot of additional risk for existing, but trying to give the most competitive rate we
can to new customers.
I want to make sure that I understand, so under the native load ECA, it can go negative.
Yes, correct.
But on the new one, it cannot go below zero.
No, ma'am.
So it's always going to be adjusted so that that is not doing a cross to the native load.
Correct.
Thank you.
I also agree with what Devin said.
This is a really good way to set it up.
Yes, I just want to make sure I would clear that.
So it's not the ECA rate itself, it is the balance that we're talking about.
Yes, ma'am.
So there was some discussion about additional new large customers, and time frame, I think
you mentioned, would be two or three years before we would have the capacity for those
kinds of connections.
So data center prospects continue to present themselves across the entire state.
Only DME is not an exception to that.
What we're facing today is that there are some transmission overloads in the area that
we're working through what's called the regional planning group through ERCOT.
That involves not just us, but other utilities like Encore, TMPA, even Brazos as well.
And so we're working through that process.
We anticipate that there'll be a number of projects that will need to come online to
continue to give us additional capacity in the area to resolve those overloads.
We think that that'll be a two to three year process, approval and construction before
those are online.
And so currently for any large load, we're giving them that type of time frame that we
don't think we'll be able to energize in front of the two to three years.
So these regional projects, are they being funded by DME and all or in part or are they
coming through ERCOT?
So ultimately ERCOT has the final say on which project and also ownership.
Certainly there are some advantages we believe for DME to own, to construct and own some
of those projects.
Certainly there is a T COAS component, so there's a rate of return.
Certainly it's not at the 28% rate of return that we used to have.
It's at 6.21.
I would challenge that 6.21, if you look at your own personal investments, it's a pretty
good rate.
And so I think there's some advantages.
We're going through that process.
We would anticipate that those projects that DME would own would come back through the
PAB and to the council through the budget process because ultimately we'll be issuing,
having to issue debt for those projects.
Thank you.
Any additional questions?
Okay, at this, we do need a motion to adopt and approve this ordinance.
Second.
We have a motion for Mr. Block.
Second.
Second from Ms. Barker.
All those in favor, please say aye.
Aye.
Any opposed, sign the same, passes unanimously.
Do you have anybody you'd like to talk about before we shut down?
Well there's actually two people.
So I just want to make sure the board is aware that Brian Borner, previous Director of Solid
Waste, did retire.
And so last Friday was his last day and certainly, you know, Brian was a good friend and a good
colleague here and I think did a fantastic job on behalf of the community.
So they want to make sure the board was aware.
And also want to let the board know that our own DME employee, Bill Shepard, who's sitting
right over here, was recently appointed as the General Manager for Greenville Electric
Utility System right here in Greenville, Texas.
And so it's a great opportunity and professional advancement for Bill.
We're sad to see him go, but it's always good to have another DME plant somewhere else,
right?
And so...
No, he's not commuting.
He is going to be relocated, but we're very proud of Bill and I think he's done a fantastic
job here and came to us from Florida back in 2021, was with us at Dear Winter Storm
Uri and the various other fun events that we've had.
And so he's done a fantastic job and just very proud of him for his professional accomplishment.
I highly recommend you stop giving out good references to employees.
It's a bad habit that I keep telling them.
Thanks Bill.
Thank you so much.
Then we stand adjourned.