>> Okay, good morning, it's 9 o'clock.
So let's call to order, we do have a quorum.
The Monday, October 14th Public Utilities Board for the City of Denton.
First item is the consent agenda.
Are there any board members that wish to pull one of the agenda items?
>> Yes. >> Yes.
>> Item B is in Bravo, E is in Echo, F is in Foxtrot.
>> Okay, so we are pulling B, E, and F.
Do we have a motion to approve A, C, and D?
>> So moved.
>> Second?
>> Second.
>> All in favor say aye.
>> Aye. >> Aye.
>> Motion carries.
Item B, do we have someone?
>> Good morning board.
Terry Nolte, Assistant General Manager, DME.
Yes sir, can I, what question can I ask?
>> Well I understand the value of the short term forecast.
The value of the mid term and long term forecast is what I question.
>> Yeah. >> Has significant value for us.
>> So we use three forecasting tools, the first one is weather.
And of course our business is driven very, very closely by weather.
Both short term, mid term, and long term.
The second one that we use is a kind of an artificial intelligence program.
That is a learning piece of software that predicts output from our renewable
resources based upon historical weather conditions.
And then the third piece, yeah, so those are the two main ones.
And we use the longer term, mid term and longer term weather forecasting for
budgeting purposes.
So each year when we put a five year budget together,
we have to have a baseline assumption of what weather we're expecting.
And that weather drives the load forecast, which is the third piece that we use.
So all of these systems are integrated with one another, and
that's what we use them for.
>> Yeah, and in terms of dollars and cents, this may be a small amount.
But there's so many different ways to get long term forecasts that cost nothing.
Or you can share, you can find information from other organizations like EPRI perhaps,
or I don't know what ERCOT has, or some other agency that looks at long term things.
>> Right, so we do use- >> Is it worth paying for, extra,
for another opinion of what the weather's gonna be two months from now?
>> It is, because they provide actually very granular data for us.
So it's traditional, free, or
commonly available weather data would just provide day ahead highs and lows.
This provides actual hourly forecast through the term of the forecast so
that we can accurately project our electrical load demands.
Both for the system that we serve, and for ERCOT grid as a whole.
Because, as you know, we're selling power into the grid at various points where
our renewable resources are, and we need to have that level of granularity.
>> Is a long term forecast accurate, generally speaking, that you pay for?
>> As accurate as it can be.
I mean, we don't, the real value is in the short term forecast, and that's what
you're really paying for, is that short term forecast and the learning,
that neural network, the learning aspects of the software so
that we can correlate different weather forecast or
weather conditions to actual load that we're serving.
It helps us to manage both price and volume risk on our power procurement.
>> Which is a very large budget.
>> Yeah, the power purchase contract, $60 to $80 million a year is what we're spending.
So you're right, it is a small percentage, but it's very important to us.
And this is what the rest of the market uses.
So when we are competing to try to procure power in a competitive market,
we need to have at least as good data as our competitors do.
>> Okay, do we have a motion to approve?
>> I'll second that.
>> All in favor say aye.
>> Aye. >> Aye.
>> Opposed?
Motion carries.
Item E.
>> Morning, board.
>> Morning. >> Good morning, chair.
I'm Brent Heath, executive manager for energy delivery.
If there's any questions I can answer, I'd be happy to.
I do have a small presentation to go over, if y'all would prefer.
>> How long is your presentation?
>> It's less than an hour.
>> Now actually, we should be able to get through that in just a few minutes if we can get the screen on up here.
>> That'd be fine with me, if you've got five minutes.
>> You see?
Okay.
>> May I take five minutes?
>> This is a land transaction for contract between the city of Denton and the city of Garland for a piece of property that are Spencer Interchange.
Spencer Interchange is a substation that's right next to the Garland power plant that the city of Denton used to have.
The city of Denton power plant was actually sold to PG&E, Pacific Gas and Electric in 2001.
And when that was sold, they took the land for the power plant, as well as the land around the station.
We did retain the Spencer Interchange substation.
They stayed here serving some businesses here in the state of Texas, PG&E, until 2005.
And then Garland actually put a bid in on that and bought the power plant back from PG&E, Pacific Gas and Electric.
Looks like the presentation's coming up.
So this is the topics I was talking about, the power plant, Garland Power Plant.
The property that was sold with the power plant to PG&E in 2001.
Spencer Interchange over here in the southeast quadrant.
2015, here's a picture on the left-hand side that shows the ring bus next to the coolant towers and what it looked like back at that time.
2018, after we've done some construction.
You might note on this coolant tower, if you come straight down here, that's where the fence line stopped.
We needed to acquire some additional land here to get some ground grid to properly ground the fence,
the chain link fence to put a control building in there to resolve an aging infrastructure, a relay control building.
It was an approved DME project.
We added some additional base terminals to bring transmission lines in.
You might notice how clean it kind of looks here.
We had to bring some additional lines in on the north side up here, and we increased the bus capacity of this ring bus to 3,000 amps.
This was originally a TMPA project also for the station that they own, and they transferred that to the city of Denton for us to do this work in 2015.
>> I have a question.
>> Yes, sir.
>> What is bus capacity?
>> Bus capacity is like the size of the wire.
How large is that?
How much current can flow through the bus, the conductor size, so to speak?
>> Thank you.
>> Uh-huh, yes, sir.
So when we were looking at how do we expand that fence outward, we just need a little bit of property.
We need some access easement, and we needed some room to construct and work through there.
We noticed as we were looking through that, the transmission line that existed already that came from the south, from our Parker substation,
when that land was sold, PG&E bought it, that was not reserved, and so we needed to resolve that issue as well.
And so we talked with the city of Garland, they came in and said, well, because there's access easements, they need access, we need access.
The transmission line easement, there's an existing fence line, let's just go ahead and resolve it and get it taken care of this time.
And so they came back with us to go ahead and acquire the 2.194 acres from them and grant the access easements.
We did go ahead and work with them, with the city of Denton real estate office and legal departments,
to draft a right of entry that was executed in 2017 that allowed us to go ahead and
enter the property, store materials, and commence construction so we could work with the peak load.
This was very critical time-wise, we were in the process of converting part of a 69 KV transmission system to 138.
And we needed this in order to keep from having power outages, so we needed to go ahead and proceed with the construction.
>> Is this clearing up title, basically?
>> Yes, it allows us to have the city of Denton assets on this property.
>> Okay.
>> So here's a photograph from the street view of Spencer Road looking northward to the existing Spencer interchange.
The blue building was the old control building, it's really hard to see.
But right here is the new control building that the control relay panel has been put into with the new structures.
This was a purchase price that was based upon an appraised value from a city of Denton and
city of Garland mutually agreed upon appraisal, and staff recommends approval of the sale contract in the 298,000 amount.
>> So we had two separate appraisals.
>> We had one appraiser, but we wanted to make sure we both were going to agree upon that appraiser before we went forward with it.
>> Okay, got it, got it, all right.
>> Be happy to answer any other questions that you might have.
>> That's $136,000 an acre, roughly, rounded up in the nearest thousand, $136,000 an acre.
Tell me again why that's worth $136,000 an acre.
>> The Spencer interchange site is in a very strategic location that's been there for
quite some time since I believe it was 1982 on an earlier slide, 1982.
This was where our 345 source from Denton West came into the city of Denton, so
it was our strongest source to serve all of the city of Denton.
So it's a very critical location, and we need to go ahead and resolve these title issues.
>> So the construction has already been done, is that right?
>> Yes, that's correct.
We're just in the process of trying to clean up some things that had happened a few years ago.
>> And the Spencer interchange is owned by Texas Municipal Power Agency, is that true?
>> Yes.
>> Okay, which is, it's a project for Texas Municipal Power Agency, right?
>> That they gave to us, we have done the work,
the city now owns this upgraded 3,000 amp bus and all the equipment we put in.
It was a major upgrade to increase that capacity.
>> Okay, so Denton owns the Spencer interchange now, not TMP.
>> That is correct, that's why they gave it to us.
>> That's why we're trying to clear up the title at this point.
>> Yes, that is correct.
>> Okay, any other questions?
>> This is a transmission work, so it's T cost eligible, I want to add that so
we can get reimbursed for this full cost for the work that we do on the transmission component.
>> Any other questions?
Do we have a motion to approve?
>> I'll move approval.
>> And a second?
>> Second.
>> All in favor say aye.
>> Aye. >> Aye.
>> Opposed?
Motion carries.
Item F.
>> Good morning members of the board, Ethan Cox, Director of Public Works.
I don't have a presentation but I can answer questions.
>> Okay, this is for a new CAT D9 dozer.
>> That's correct.
>> To push compacted waste toward a compactor.
>> Correct. >> We'll then run over it, okay.
It's a new machine, have you considered looking at an old machine since we like to recycle a lot of stuff?
>> I'm not, I can't speak to that, Terry, do you know if we took a look at-
>> The used machine?
>> The used market for these?
>> [INAUDIBLE]
>> So the answer is we had not considered a refurbished machine for this purchase.
Is there a reason because, I mean, I just snooped around last night and found 50 D9s within a day's drive of here for various prices.
Again, some of them might not, some of them may be junk, some of them might have some life left in them.
>> Right. >> But some of the ones that had lower operating miles on them were half the price.
>> It's certainly something we can take this off and consider.
I do know that the reliability of our existing dozer, this is about right sizing.
We're running at 155 right now, which is about 20,000 pounds lighter.
You mentioned compaction, that's the key thing for making this type of purchase.
We can certainly go back and take a look at the used market if we want to reconsider the purchase.
>> And in the explanation, the agenda item explanation, it said because of excessive maintenance and downtime, what is excessive maintenance?
>> I don't have the figures right now, but I do know from a downtime perspective every day that we don't have an appropriate size machine out there in the waste.
We're losing airspace.
This particular machine is Komatsu that we're currently running.
It's been down, I would say about half of the year.
>> What happens when it's down?
What happens then?
>> I need to defer to fleet on the maintenance, but these are warranty pieces of equipment.
So we do end up contracting with Komatsu to come out and do the maintenance.
>> So do you have any particulars you want to share, Terry?
>> This is a critical piece of equipment for daily compaction.
>> Yeah, what happens when you don't have it?
>> Typically the department will have to substitute another piece of equipment if available.
We'll have to try to get them a rental unit if available.
And a lot of times, because it is specialty, we can't get our hands on the rental.
So it's pretty critical that we keep it up for them.
>> And what makes it specialty is the big blade, right?
>> It's the weight of the machine and the fact that it's in refuse to begin with,
because that requires a whole other package to be added to a regular dozer.
Because trash will find its way into the interior of the machine if it's not guarded,
and that causes even more maintenance problems.
One of the other reasons that we did not look into a used machine is that we have an agreement
with the North Central Council of Governments so that we're eligible
for some grant funding opportunities.
Part of that agreement is that we buy new equipment and not used equipment,
and that's because of emissions-related issues.
>> And the refuse is very hard on the machines.
I remember from my past, so typically that's why they don't use used also.
>> It's the harshest environment out there, and that's the reason it's hard to get rental equipment,
because once we tell them where we're going to rent it.
>> They're not going to rent it to you, right?
>> So are you going to get a grant for part of the cost of this?
>> This one is not eligible for a grant at this time, but we do take advantage of other opportunities
when they're available and they meet our needs.
But the agreement we have is so that we can take advantage of those opportunities when they come up.
>> Okay. Any other questions?
Do we have a motion to approve?
>> So moved.
>> And a second?
>> Second.
>> All in favor say aye.
>> Aye.
>> Opposed?
>> Opposed.
>> Nay.
>> Motion carried.
Next item, consider approval of minutes of September 23rd, 2019.
I did notice that the members present needs to be changed.
We have Charles Parker and Barbara Russell, not Lillia, and Charlie Jackson.
>> Yes.
>> Other than that change, are there any other changes?
>> I'll move approval as a second.
>> Okay.
>> Second.
>> All in favor say aye.
>> Aye. >> Aye.
>> Opposed?
All right.
Next item is consider recommending the adoption of an ordinance to declare the intent
to reimburse capital program expenditures for the electric utility,
solid waste water, waste water, and general government.
>> Okay. Good morning.
>> Good morning.
>> Board, my name is David Deans, Director of Finance.
I'll have a very brief presentation to go over what the purpose of this ordinance is
and how we use it to fund these projects.
So we will issue debt here at late spring, early summer for all
of the capital projects included in the FY19, FY19-20 budget.
But a lot of those projects we want to start before we actually issue the debt
and receive the funds.
So as a city, what we do is have city council approve a reimbursement ordinance
which gives us authority to spend those funds prior to actually issuing the debt.
So it's something that we do every year and we always come to PUB to talk
through those utility items that were approved in the budget
and that will be going forward with this ordinance.
So all of the items within each of the utilities are directly from the FY19-20 budget.
There's no changes in any of the CIP, but these are the projects
that the utilities would like to move forward with prior
to that late spring, early summer date.
So I'll go through the list here.
We have staff to answer any specific questions.
We did go through all of these during the budget process,
but staff would be happy to answer any questions.
I'll just hit the high number, but if you have any questions
on those projects, we can answer them.
So the water projects included in the CIP that we have included
for this reimbursement ordinance is $2.4 million and you can see those there
from the station down to the replacement.
11.3 million in wastewater projects included.
3.1 million for solid waste, including the renovations and the vehicles.
And then our electric projects, obviously the largest category,
a long list there of $37.6 million.
You can definitely answer questions on any of these.
These across all of the CIP and the electric from transmission distribution also
to those other categories such as automated meter reading
and you can see those transmission distribution as we go down.
And as kind of alluded to earlier, those transmission assets will then be part
of our TCOS filing in future years.
>> May I ask you a question?
>> Sure.
>> What are power factor improvements?
>> Well, hand that over to Brent.
>> Can you take it if you want to?
>> No, no, you guys.
>> Sure.
>> Brent Heath, Executive Manager for Energy Delivery.
Power factor improvements for capacitor banks, capacitors,
change the capacitance on the line.
When inductive motors, large air conditioners, large motors get on the line,
they cause inductance on the line, cause the power factor to go lagging,
to decrease and you counteract that by putting capacitors on the line
which raises the capacitance, counteracts the inductance,
it gets it closer to a unity power factor.
And so this, we do that across our distribution system to try to stay as close
to unity power factor, either lagging or leading.
Unity is right in the middle.
That's the zero point.
>> So if there's, it's basically there to boost the power when there's a greater drain?
>> There, it's the reactive component of the power.
>> Yes.
>> Okay.
>> Okay, thank you.
>> Yeah, I got it.
>> Do some heavy thinking on that.
[ Laughter ]
>> David, can you explain what bonds are being sold?
Are these ones that we voted on in 2014 or are these general obligation or?
>> These were also, all of the utility bonds will be certificates of obligation
so they're not included in any bond program.
>> Okay.
>> Including the ordinance that you saw, we gave you the entire ordinance
that we'll be taking to the city council.
So within that, you can see some on the general government side.
We're issuing that final general obligations for the 2014 bond program.
That'll be our last issuance for the 2014 bond program on the general government side.
>> Okay.
>> And what's the term of the bonds that are used to finance these programs?
>> 20 years for the most part, although there's some electric that are 30 years.
>> And what interest rate do you anticipate?
>> Well, interest rates are as low as they've ever been, right?
Or lowest as they've been in a number of years right now.
So it's possible between 2 and 3 percent as low as that going into next year.
So it's--
>> So you anticipate the rate of issuance will be between 2 and 3?
>> Yeah, just given, you know, we issued bonds at the end of the fiscal year last year,
a little later in the summer and we got rates in that range.
So, you know, obviously things could change,
but it's a very low interest rate environment right now.
So we'll be keeping an eye on it for sure.
>> And back on the vehicles, do we use more like certificates so that that's more aligned
with the useful life of the vehicles, correct?
>> Right, right.
So we won't do 20 years to the vehicles, we'll do 5 years, yeah.
>> That was actually the gist of my question.
>> Sure.
>> Do you mind filling me in on what's done for the vehicle components
of this and the short-lived assets?
>> Yeah. So the vehicles would do 5-year issuances and then
for facility maintenance and things like that we do 10-year issuances.
For most other projects it's 20 years, although for some
of our assets with electric we'll do 30 years.
So it all depends on the life of the asset.
So some of those electric assets that have the longer life will do 30 years,
but definitely for vehicles it's always 5 and then 10 for facilities and things like that.
>> Thank you.
>> I'm sure the city has a debt management policy that says you can't issue debt
for a longer life than the assets.
Most cities do, so I imagine you do too, right?
>> We do and as we go through our audit that's something that we have to abide by.
>> Is this something that is standard practice?
This, the--
>> Reimbursement.
>> The reimbursement policy, does it have a history in the city?
>> It is.
We've done this, I don't know what year we started it, but definitely over the past 5
or 10 years every year, I don't know if it was prior to that.
But yes, it's a standard practice and it just, it helps us get those projects going sooner
than waiting till almost the end of the fiscal year before we start it.
>> Thank you.
>> Any other questions?
All right.
Do we have a motion to approve?
>> Move approval.
>> Oh, I'm sorry, I jumped in the middle of your--
>> Oh, that's right.
>> No, I--
>> I'm sorry.
>> This is just the rest of the process.
We'll go through-- we have a bond oversight committee for all of our bonds.
So as I mentioned, we'll be issuing them in 2014 bonds.
So there's the general government side.
And then throughout the summer, June is a projected date.
We could move that up and that kind of goes back to the interest rate discussion.
We'll try to take a feel for where we think interest rates are and we could make--
do that sooner or later.
But the reimbursement ordinance gives us that flexibility to do it as interest rate goes.
So that's it.
Okay, now any other questions and a motion to approve?
>> So moved.
>> And a second?
Okay, all in favor say aye.
>> Aye.
>> Any noes?
Okay, motion carries.
>> Thank you.
>> And on to city manager update.
>> Yes, ma'am.
Good morning, members of the board.
In your packet, I included a memo at the request of Ms. Parker about PUB viewership.
And in the memo, Billy Matthews, our manager of DTV, provided the data for the last 12 months.
And included in that is we have a number of options in which ways the viewing public can see PUB meetings.
There are two live options, one through the app, the app that you use,
the Legistar app that's available to others as well.
Also through our Denton TV, our DTV live stream, which is happening as we speak right now.
And the last option is on demand.
So if a person misses a meeting, they can go back and the meetings are indexed.
And so they can actually watch the viewing of the meeting as per the item.
So they don't have to go through the whole meeting.
They can fast forward, or they can rewind, however they see fit.
Again, just provide the information at the request of Ms. Parker in regards to just the viewership for the last 12 months.
As you can see, we have quite a few views throughout the course of the year.
There is no pattern, quite honestly.
Just looking at it, I think just based on some discussions we've had with staff, I think a lot of it has to do with the topic at hand for
that specific meeting where people have interest in a specific item or items.
So they get some viewership.
So really just wanted to provide that data for you.
If you have any questions, I'll try to answer.
Billy is actually running the meeting at the moment.
So if he, when we were talking earlier this morning, he could send me Morse code through his little light here that he has.
So I think one blink is yes and two blinks is no.
So, but if there's some questions that you have and I can't answer, we'll be certainly happy to respond to you later this afternoon or tomorrow.
>> I was suspecting that the jump in April and May had to do with class assignments.
High school government teachers, you know, make their students attend the thing.
>> We do have that.
In fact, we usually have around towards the end of a semester.
>> Yeah.
>> We usually have a series of students that come, high school and college,
that come to a variety of committee meetings and board meetings throughout the course of those four to six week time frame.
So that could be it, but.
>> And I know on April 22nd, I was one of the viewers because I was gone that board meeting.
So I went back and reviewed it to see what happened.
>> Well, we appreciate that.
>> Yeah, as easy as that.
>> And again, you'll note that the meetings in November, the second meeting in November and December,
those are, there's no viewers, there's no meeting because of the holiday time frame.
>> Right. >> And then we had one meeting in August where there was a no meeting due to the lack of a quorum, so.
>> Well, thank you.
I was a bit surprised at how many people actually really do view it, so I'm pleased that people actually view it.
>> And out of a note, next time we meet, the second meeting in October,
there's actually, for the first time, we're actually simultaneously videoing or broadcasting two meetings at the same time.
So this room won't be available because another board is using it.
And so the committee, the board, the PUB will be in the council chambers.
>> Okay.
>> So, just to make you aware of that.
>> All right.
Otherwise, just, we also have in the packet a memo about our put or pay agreements.
If you have any questions about those, Ethan Cox can provide you more specifics about those.
Those, a few of those agreements were considered last Tuesday, and the remainder of those,
or two of the three remaining contracts will be reviewed by council tomorrow.
And then I believe the last contract will be reviewed by council the following Tuesday, so.
>> I just had a quick clarification question on that.
These are, I didn't quite understand the minutes of the city council meeting.
These are contracts that just sort of pin down entities that are already using our landfill, right?
>> That's correct.
>> Right. >> We're a couple of alterations.
So if you'll recall during the budget discussion, we talked to PB and council about kind of going in and negotiating with some of these firms.
A few had approached us, kind of the regional landscape of landfills is really changing.
The DFW landfill in Louisville's closing, a lot of those customers are already looking for other locations.
And so, talking to a few of these firms, the only new firm which was approved last week was Wise County.
So they're a new customer to the landfill, all the rest are existing customers that are in good paying status.
The one thing that did change a little bit was the volumes.
So some of these providers did propose increasing the amount of volume that they would actually bring to the landfill.
And like I said, I think that's a direct result of kind of the regional pressures that we're seeing without a lot of other landfills being able to accept it.
>> So the purpose of having a contract is so you can rely on it budgetarily.
>> It is to provide you some certainty from a revenue standpoint.
Previously, we didn't have these types of contracts and diesel prices go up.
It may be more advantageous for one of these haulers to go down the road, and it is a significant piece of our revenue pie right now.
One of the things that we share with council is debt service begins to fall off over the next three years.
We did have a number of projects like landfill mining, building materials recovery.
They were significantly underfunded.
And so what was happening is the residential and commercial rate payers are having to subsidize some of their shortfalls.
And so what these agreements do provide is some revenue certainty as well as what we believe will be some rate relief.
And that's what the council will consider tomorrow.
And then one quick add on, I apologize.
These agreements are structured in a way that even if they do not bring the guaranteed volume to the landfill, they still pay that price.
That's kind of the term put or pay, because you're going to pay at least that amount regardless of the volume you bring.
>> Does otherwise, if diesel increases, they go somewhere else?
>> That option to go somewhere else, correct.
>> All right, and future agenda or?
>> No, we do have a few more items coming up in October, and then I think the facility tour is still scheduled for later this month.
>> Okay.
>> Otherwise, nothing else to report.
>> What exactly will be part of the facility tour?
I did a tour in May, and I'm wondering if this is a new one.
>> I don't believe so.
I think because we've had quite a bit of turnover on the board, it was just an opportunity for
new board members to be able to go through the same tour that you went through.
If you want to go through it again, we'd be happy to have you.
>> I enjoyed it.
>> What was the date when we're not going to be here?
>> October 23rd.
>> Okay, on to concluding items.
Is there a board member that wishes to have anything added to a future?
>> Nothing added, I just wanted to bring to your attention something that some of you may already know.
The Lone Star chapter of the Sierra Club has done a clean energy survey of municipally owned utilities.
And Denton came in second after Austin.
And I have some literature here about it, if I'd like to share with you, which you can pass out.
So I just wanted to bring that out because I think it's something that we should be very proud of and
really thank DME for the direction that they're taking with renewable energy and energy conservation.
>> Thank you for sharing that.
>> Yes.
>> Any other concluding items?
All right, do we have a motion to adjourn?
>> So moved.
>> Second?
I guess we're adjourned.
>> Yep.