Good morning. Good morning. Let's bring the public utility board meeting of Monday, July
28, 2025 to order. Are there any presentations from the public? There are not. We will move
on to the consent agenda. Would any board member like to remove any item from the consent
agenda? No? There's no beefs. So with that, I'll entertain a motion to approve the consent
agenda, as is. Second. Motion and a second. All those in favor, please say aye. Aye. Passes
unanimously. We're moving on to items for individual consideration. Item A, which is considered
to the approval of the July 14th minutes. Entertain a motion for that. We have a motion
and a second. Raider. Plot. All those in favor, please say aye. Aye. Any opposed? Unanimously
pass. Item B, consider recommendation, recommending adoption of an ordinance of the City of Denton
at Texas Home Rule Municipal Corporation authorizing the approval of the first amendment to a professional
services agreement with the City of Denton and Kimley Horn. This is for the additional
engineering design and construction phase for the Pecan Creek Wastewater Treatment Plant,
Water Reclamation Plant. Good morning. Jason Donnell, Water Utilities Project Manager.
Today for consideration, we have a design contract amendment with Kimley Horn and Associates
for the Pecan Creek Water Reclamation Plant design expansion to 30MGD. The current plant
was built in 1961 and has a capacity of 21 million gallons per day, is currently operating
up to 85% of its capacity. TCEQ7090 rule states that once you reach 75% capacity, you need
to be in design for expansion. Once you reach 90, you need to be in construction. Since
we have hit that back in 2023, this particular contract was awarded to Kimley Horn through
PUB and council in May and June of '23. As part of that, we had to increase our discharge
limits with a two-stage permit up to 30MGD. Currently that is complete and ready to go.
At the beginning of this, there was a condition assessment performed of the existing plant
to develop scoring criteria for infrastructure and equipment to make sure we were in compliance
regulatory or out to prove either way and to make recommendations to move forward. Comparing
the rehabilitation of the existing plant to building a new plant, there is an estimated
cost savings of approximately $133 million, in which it was recommended to the city to
move forward and build a completely new plant at 30MGD. This chart is a cost breakdown of
that exercise showing that rehabbing the plant is approximately $82.5 million. The 5MGD expansion
up to 389.5, connecting the two plants together is about 12.5, after which the rehab portion
would need to be replaced relatively soon due to its age, expanding that 21MGD to new.
But the $636.7 million estimate completion in July of 2034, whereas rebuilding the new
plant, we would carry about $5.8 million to maintain existing infrastructure while building
the new one for 498, a total of $503.8, completion about two and a half years earlier in December
of 2031. The current contract includes a sewer interceptor, headworks bar screen, 5MGD MBR,
solids handling UV disinfection, and a 30 million gallon equalization basin, which is
basically a giant pond. We're at 14.952 million. The recommended amendment includes an additional
25MGD MBR to make us a total of 30MGD. It will add the biological nutrient removal to
the project, some aerobic digesters, a non-pot water system for reuse, chemical feed system
and operations and scatability will be included, and emergency generators. The amendment also
includes the contract administration from Kimley-Horn, our resident project representative
from Kimley-Horn, which will represent the city, and environmental assessment services
to help the city on the environmental side, for a total of $33.792500. Any questions?
Thank you.
I know you'll have some. I heard you talking a minute ago.
Mr. Rayner. I'd like to talk about more of my Fortalean real estate. What is the footprint
on that particular site?
The whole site?
No, the new one.
In other words, the new plant, if we vote for this, is it a two acre size, is it three
acre, five acres?
It's approximately 30 acres. The existing plant is on about 40. The total plant with
the basins and everything is 180 acres. The actual treatment portion is on a little over
40. This portion will be about 30, just south of it, in an open area. The old plant will
later be demoed, and that will be open. All of that is city owned property by the water
reclamation plant. It's available.
Thank you. So the 40 acres, which will be leveled, then they could be used for their
whatever expansion.
The expansion would be the planning portion of it, yes, sir.
So that's 70 acres out of approximately, would you say, 130 acres that we have?
About 180 is what's being utilized. There's some equalization ponds further down for the
existing plant. They will be also re-dug and increased in size for increased emergency
capacity.
Thank you.
I knew it was coming. So I'm trying to remember, what was the original estimate of this project
cost when we approved the original design contract?
The original design contract in 2023, I believe there was an opinion of probable cost from
the design firm of $189 million. That was for the 5M GDMBR.
And so basically the retrofit is the surprise? Like the retrofit of the remaining 21?
The retrofit is a huge portion, the $82.5 million, just to limp it along, and then you're
basically double spending here, because you're rehabbing 60-year-old concrete, which you
can only rehab the exterior, not the interior. So it would have to be replaced for a better
discharge later. It's kind of double paying for it, yes, sir.
There were also a few more things added other than what you spoke of. There's a building
added, a new chemical feed non-pot system, and aerobic digesters due to the increase
to 25. Well, those are these round structures here, which will turn some of the solids into
gas, which can be reused.
And so this completely replaces the existing 40 acres of facility, this 30-acre facility?
Yes, sir. If you look in the picture here, the existing is this top left. The new is
this bottom part. It's a little bit smaller footprint. It completely replaces everything,
at which point the old one, there would be another project to demo the old one.
And this is just the nature of everything's more efficient now, requires less time in
process. You don't have to have as big of tanks, and that sort of thing.
You can discharge faster, and the quality of the water exiting is a bit higher quality.
So it's safer for the environment, too. That's the MBR technology.
Okay. Thank you.
Yes, sir.
I'm going back to the cost comparison. At what point did we start the consideration
of the new plant?
Over a rehabbing?
Yes.
I came on board here in January of '24. It was shortly thereafter when we met with exec
staff and our internal engineering team to go over the cost models. It was about that
time we started considering that. A few months later, with recommendations to the consultant,
that was the decision.
Okay. The cost savings, what was the original estimate? Back up a little bit. I'm sorry,
you said it a moment ago.
The original was $189 million. Back in 2023, it was a very early cost, opinion of probable
cost from the engineering firm.
Right. Okay. But 636 is what we think is the real number for the existing plant rehab,
right?
It's going to be as close as we can get.
Yes, sir.
That's your guess. That's your estimate.
That's a very difficult guess going 10 years out for the construction cost. That's as close
as we've been able to get to it. We're fairly confident we're within 10%.
Gotcha. Okay. That's all I got. Anybody else?
Extended life for the new one was the question.
The planned life for a new plant is 50 years. The planned equipment life is 30 years. All
of this can be extended with money. Better maintenance and replacing workwear parts can
extend that.
So the new plant, potentially 50 years, and then parts you said for 30?
Equipment, motors, and pumps. They have a planned life of 30.
The 50 years, just the shell itself.
Yes, sir.
So really, other than the cost of the shell, what we're looking at is the part or the years
for the part changes, really, wouldn't it be?
The whole lot of equipment, yes, sir.
Yeah. Okay. Thank you.
Okay. So any more questions on this?
Do we have approval?
We have a motion to approve.
Second.
And a second. Any further discussion? If not, all those in favor, please say aye.
Aye.
Any opposed? Doesn't appear to be. Passes unanimously.
All right. We're moving on to item C. Consider recommending adoption of an ordinance for
the city manager to execute a contract with RDO equipment for if over 50,000, we go to
a competitive bidding. The first one is 371,000 for approval.
I guess there's no, nobody's presenting anything.
That's all right.
Good morning, Brenda Haney. There is no-
I'm sorry, I read the wrong thing.
Okay, perfect. I thought that was on consent, so we did not want to bring it up.
That would be me. Thank you.
Yeah, perfect.
Just testing. Thank you very much.
Yeah, thank you. Yeah. Okay. I guess we're moving on to the fun part. This is item C.
Consider recommending approval of a solid waste fund fiscal year 2025-26 operating in
capital budget. There appears to be a presentation on this item.
Popcorn outside.
That's right.
All right. Good morning, Chair, members of the board, Matt Hamilton, ADF Finance, here
to present a number of presentations, each for the utilities, and then we also have some
items as well for you specific to rate recommendations as well. We provided just a printout for you,
which was the same as the backup information for each of these items, just so that it was
a little bit larger because we know some of the numbers on the screen can be a little
small and we had a request last week, or excuse me, at the prior meeting to provide the breakout
of the CIP projects, which is what that exhibit is, is the full list of the projects. Myself
and also the departments are here to answer any questions that you may have in regard
to the budget or in regard to those specific projects.
So starting with solid waste, as we had talked about at the last meeting, solid waste has
proposed a 4.2% increase to their budget for fiscal year 2026. However, there is no base
rate increase proposed for 2026. There are some minor changes to the rate ordinance that
we'll get into in another slide. As we went through the zero base budgeting process this
year, which was new to the city and we went through it citywide, solid waste identified
$980,000 in reductions, $212,000 in personnel by reducing the number of deputy directors
from 2 to 1, $209,000 in materials and supplies, $17,500 in maintenance and repair, $397,000
in operations, and $144,000 in fixed assets, which related to rehabbing the containers
rather than replacing them.
So proposed rate schedule updates, again, no base rate increase is proposed for solid
waste. However, we are proposing adding a category called front load, side load, shared
services to the rate schedule. These are existing charges for refuge and recycling but are not
currently clearly defined in the rate schedule, so you just create its own category and make
it clear that that's what the current rates are. And then clarifying that re-delivery
is part of the delivery service fee, and so this relates to primarily when there's a
disconnection in service and then solid waste re-delivers a cart to the property when the
service is resumed and then reducing the per item bulk collection limit from 10 to 5.
So taking a look at the five-year preliminary forecast, this is the same forecast that we
had reviewed at the prior meeting. The proposed fiscal year 2026 budget is $45,353,673. Again,
there is no -- I'm sorry, that's on the revenue side. Expenditures of $44,949,845 and no base
rate increase.
So the solid waste five-year capital plan for fiscal year 2026, the big project is the
organics program and the infrastructure associated with it. $7.2 million in vehicle replacements
and $448,000 in vehicle additions for a total of $21.7 million. $18.2 million of that being
debt funded and $3.4 million being revenue funded. As we talked about at the last meeting,
as you'll see in starting fiscal year 27, all of the vehicles will be revenue funded
and so we're making a concerted effort to revenue fund more of the capital program as
we move forward. Any questions on solid waste?
Mr. Reiner.
Slide number three. On the re-delivery, that would be on an existing client, gotten arrears,
it was closed, you removed it, but that's only for that existing client to have it back,
it's not for a new one coming in. That charge is not involved at all.
That's correct.
All right. Thank you.
One more on this slide. The bulk item collection, is it 10 items or 10 pickups down to five?
Items or pickups?
Items.
See, I knew I'd get you up there.
I'm sorry to get you up there all the way.
That was one of them.
Brenda Haney, Director of Solid Waste. Yes, we're reducing the number of items that we're
picking up at each location from 10 to five, starting with the next fiscal year.
Is that five per week or is that like five per-
It's per collection cycle, so it is per week.
The other thing in full disclosure, multifamily units are using a lot of this and what we've
asked them to do, what they've done has been very creative and they have multiple places
throughout their complex where they have 10 items and we've asked them to consolidate
it and put it at one location.
A lot of the intent behind this program was to facilitate the cleanup and maintenance
of some of those smaller units that didn't have on-site personnel to handle those items
and so we wanted to provide them an avenue for getting rid of those bulk items, particularly
when people are moving in and moving out.
What we found is the bigger units, bigger complexes that have the capacity and the staff
on board to help with that are taking advantage of the system a little bit.
I know for residential it's great because it prevents dumping because a lot of times
renters move out and they have some old furniture and instead of it ending up in the creek,
they just put it on the curb and it gets taken away once a year.
It's a balancing act of making sure that we get an appropriate number to accommodate
the needs of people and not encourage the illegal dumping of those items.
Thank you.
You're welcome.
Okay.
Thank you.
All right.
Thank you.
Those are the questions I believe that you have, the preliminary budget reductions.
Okay.
That says it.
That's fine.
Okay.
That's all I got.
Anybody else?
All right.
Anybody?
Entertain a motion to approve.
I'll move approval.
Second.
We have a motion and a second.
All those in favor please say aye.
Aye.
It's unanimous.
Thank you very much.
We're moving on to item D, water fund.
You read the whole thing, shouldn't I?
Consider recommending approval of the water fund fiscal year 2025-26 operating on the
capital budget.
Okay.
Matt Hamilton, ADF Finance, here to present the water proposed budget for fiscal year
2025-26.
The water budget has a total increase of 6.3% over the budget for last year.
What is being proposed is a 3% rate increase for residential and commercial as well as
industrial and we'll get into some slides that detail exactly what those rate increases
look like.
A 297% rate increase on the wholesale treated water which we'll see as well in the slides.
Revenue projections of 59,167,356 and expense projections of 62,799,520.
The water fund anticipates holding two vacancies vacant through fiscal year 2026.
A retail rate study and wholesale rate study have been completed this year and that was
factored into the creation of the budget.
Also just to note that the WIFIA and Texas Water Development Board funding is also included
in the budget and staff has really been making a concerted effort to align the capital improvement
plan with the investment portfolio just from a cash management perspective and that just
ensures that when we do issue debt it's not sitting, you know, it's being put to use and
we're managing that cash flow well.
And then of course just balancing affordability with the growth of the city.
So taking a look at the five-year water forecast for fiscal year 2026 as I mentioned 59.1 million
in revenue, 62.7 million in expenditures, and a 3% rate increase on residential, commercial,
and 297% on treated water.
So getting into the preliminary rate changes or proposed rate changes for residential and
commercial, inside the corporate limits a 3% rate increase, for residential and commercial
service outside the corporate limits a 3% increase, for irrigation that is metered both
residential and commercial inside corporate limits 3%, and the same outside corporate
limits of 3%, a 3% increase on metered water from hydrants.
What is that?
Is that the dollar?
Yes, sorry the...
[inaudible]
Okay.
Got it.
Okay.
On the wholesale well water, one change, we currently have a specific rate in the book
of 96 cents for opportunity.
The contract actually stipulates it's 85% of the Dallas wholesale untreated water rate.
And so what we are proposing is just to change the language in the rate ordinance to the
85%.
And the reason for this is that both Denton and Dallas contemplate rate increases through
the budget process at the same time.
And so we don't know as we're putting together our budgets and rates what that adopted rate
in Dallas will be until late in the fall.
And so what this would do is it would allow us to adjust the rate rather than in the fall
rather than wait in another year essentially to implement it and be a year behind in the
rate that we're charging.
Question?
Mr. Rainey.
So is this a contractual agreement on the 85%?
Yes.
And so that stays the same.
Dallas comes up with a number.
So then how do we -- is our number part of the 85% or do we just come up with a number
but make sure that it falls within the 85%?
Is that kind of how I'm seeing it?
Our number is the 85%.
Okay.
So we're just really tied to whatever Dallas wishes.
Yes.
So if it goes up, it goes up.
If it goes down, we'll take a picture.
That's really what we're looking at, right?
Yeah.
We're just trying to clarify the language in the fee schedule to reflect what is in
the contract rather than a rate which the rate would be essentially a year behind because
we won't know what that is until after Dallas adopts.
And do we both get into a room to make that decision or do we just wait until Dallas comes
out of the room to tell us what that number will be?
I believe we just reference what Dallas publishes.
Okay.
Thank you.
Thank you, Doug.
Okay.
Follow up.
Thank you.
Yeah.
So on the opportunity pass-through rates, is that 96 cents or 85% of Dallas wholesale,
is that delivered water or is that water just in situ in the lake, in the reservoir?
Shorter than that, good morning, PV, Stephen Gage, General Manager of Water Utilities.
They have their own intake on Lake Lewisville, so that's just the raw water that they pull
from it and they have their own meter and we have a system where we can verify the draw.
And then follow up question on the treated portion there, I'm assuming that's a per
thousand gallon?
Per thousand gallons delivered and that's to the customers they have at City of Crum
and Sanger.
And so they purchase the water from us and deliver to Crum and Sanger.
But it goes through some kind of wholesale facility, like they have tanks and pumps?
They actually have metered connections.
There's one on the, I guess the border of Crum and then over on Milam and the 35 is
the metering connection for Sanger.
And so that's the point of delivery for those two wholesale connections.
In this big jump, I believe we, I remember a year or so ago you all were doing a wholesale
rate study.
Is that the result of that?
Yeah, and this is the result of that.
We hadn't raised the rate.
I mean, last year we did a modest increase based off of CPI.
And we did the rate study and it demonstrated that we were woefully undercharging for treated
water.
Okay.
Thank you.
All right.
Thanks.
Okay.
Meter fees and meter relocation fees, an increase of 3% and a 3% increase on fire hydrant installations.
So this is a chart I believe that we had shown last time, just giving a comparison of where
Denton's rates currently are and where they will be with the proposed increases.
Keep in mind these other comparison cities have not finished their budget process and
so it is assumed that some of their rates would increase as well.
So not much of a change on the residential proposed in relation to the comparison cities
where we are currently on commercial rates.
And this does include that blue bar is both water and wastewater and where we would be
with the proposed rates, which is essentially in line with Frisco, Plano, and McKinney.
And then an overview of the five-year capital plan, which again, you have the backup with
the specific projects.
But 94.9 million in fiscal year 2026, of which we anticipate 37.9 million to be funded with
WIFIA and 55.6 million, a combination of CEOs and the Texas Water Development Board, and
then 1.3 million in revenue funding.
Any questions?
>> My question maybe -- let me go ahead and go to the floor here, is anybody else -- no?
So my question, this is just a general knowledge deal, are you seeing the requests for hydrants
and meters going down at this point?
>> So development right now in Denton is remaining the same as far as you can project?
>> Very active.
We actually did -- we did some analysis recently when we were looking at the impact fees, and
we can show that we have grown much more rapidly than we had anticipated.
You can see a little dip during the pandemic, where we slowed down a little bit, but we're
on track to --
>> But nothing now?
>> Nothing now.
We're not -- we're really not seeing any lag in development at all right now.
>> Okay.
All right.
Thanks.
>> You're welcome.
>> Just curious.
All right.
If there aren't any more questions, entertain a motion to approve this item.
Any other motion?
>> Second.
>> We have a second.
You know the two guys are going to have to participate here.
All those in favor, please say aye.
>> Aye.
>> Thank you.
It's unanimous votes.
All right.
Moving on to item F, consider approval of the electric fund.
I want to waste water, I'm sorry.
Water, waste water, okay.
>> Okay.
Waste water fund.
So for fiscal year 2526, we are proposing revenue of 44.5 million and also an increase
of 11%, which we'll get into in the future slides.
Drainage, a budget of 5.8 million, which is a 3.6% increase over the 2025 budget, and
no proposed rate increase for drainage.
We have kicked off a cost of service study as we talked about at the last meeting with
Raftelis on June 27th, and so the intent is to bring forward after the conclusion of that
cost of service proposed rates for drainage in the 2027 budget.
Expense projections for waste water, 44.1 million, drainage, 7.1 million, and all vehicle
replacements are budgeted to be revenue funded.
So taking a look at the waste water five-year forecast proposed for fiscal year 2026, as
I mentioned, 44.5 million revenue, 44.1 million in total expenditures with a change in fund
balance of 377,000, an 11% rate increase on residential and an 11% rate increase on commercial.
Taking a look at drainage and waste water, drainage is a part of the waste water fund,
but we've broken the two out just so that you can see each component individually.
So for drainage, 5.8 million in revenue and 7.1 million in expense.
The reason for this, as we had talked about, was in fiscal year 2024, typically at the
end of the year, we move money into a capital account for drainage to complete channel repairs.
That transfer didn't occur, and so that funding you can see, their fund balance increased
from a million to 2.3, so what we're doing is budgeting in 2026 to move that funding
back into or into the channel rehab account so that it can be utilized, and it returns
the fund balance to the target of a million dollars.
So this is the waste water and drainage five-year forecast with those two combined.
So 50.4 million in proposed revenue, 51.3 million in expense, and a net use of reserve
of 935,000, but again, that's the drainage funding that we're moving out of fund balance
into the job, into the channel rehab account.
Okay, so preliminary rate changes proposed for the Wastewater Fund Residential Service,
increasing 11% both in and outside of the city limits.
It also applies to accounts that do not have City of Denton Water Service.
Commercial Home Park Service, an 11% increase both inside and outside the limits.
Commercial and Industrial, an 11% increase inside and outside the limits.
Commercial and Industrial Metered and Submetered accounts, an 11% increase.
Septage and Chemical Toilet Disposal and Restaurant and Food Establishments, an 11% increase.
Oil of treated affluence, wholesale wastewater treatment, and the dino dirt products are
also included in the 11% increase.
These are the same charts as you saw in the previous presentation with water and wastewater
combined.
So essentially, remaining where we were relative to the comparative cities on residential,
and for commercial increasing in alignment with Frisco, Plano, and McKinney.
So taking a look at the Wastewater Five-Year Capital Plan for fiscal year 2026, 242.9 million,
which is primarily made up of the plant improvements.
We anticipate 98.2 million to be WIFIA funded and 141.8 million to be debt funded.
And any questions?
I have a question on the capital, the Pecan Creek, what we just approved earlier.
Have those numbers been adjusted or because it looks like it's the higher number, and
I realize engineering is in there.
Jason's on that water utilities.
The numbers you see are a little bit higher due to our internal staff being requested
by the EPA to add an additional contingency percent due to the rising cost of construction.
I believe it was around 20% extra that you're seeing here as opposed to what I showed earlier.
Thank you.
I'd rather plan for contingencies, too.
Any other questions?
So I think we're looking at over a billion dollars in capital improvements over the next
five years.
Yes.
And we just saw the presentation on seeking the most cost-effective means to meet our
growing wastewater demand and changing our plans from rehabbing the existing facility
to building a new one, because it will save us $100 million.
But still, $100 million savings still leaves us with a billion dollars.
So an 11% increase is a substantial rate increase.
What was the last year we had a rate increase?
The rates did increase last year, 11% as well.
So we're on this track to pay for all of this capital improvements that are needed.
It is a -- you know, these are large numbers, but I feel like they're probably necessary.
Yeah, and I'll just note -- let me go back to the forecast real quick.
So as you'll notice, over the next four years, beyond fiscal year '26, those rate increases,
the forecast rate increases do decline, and so we do anticipate, as we move forward, that
we won't have rate increases that are as, you know, high as 11%.
And so, you know, I just wanted to note that, that, you know, we do anticipate that that
will return back down to, you know, more normal levels, just based on, you know, inflation
and operating increases and things.
Any further questions or discussion?
We have a motion and a second.
All in favor, please say aye.
Aye.
The motion carries unanimously.
The next item on the agenda is item F, consider recommending approval of the electric fund
for fiscal year '25, '26.
Okay.
So jumping into electric, for fiscal year 2026, we're proposing a 34.2% increase as
a -- compared to the '25 budget.
As you'll see, a lot of that is purchase power, in fact, all of it is a purchase power.
I do want to note that staff is running an updated purchase power forecast, and so these
numbers are based on a forecast that was produced, I believe, in March, but we're working, you
know, just as the summer has evolved, you know, want to update that forecast.
If that forecast is updated, we'll bring it back to you, just so that you're able to review
it and provide an updated recommendation to counsel before budget adoption.
So I just wanted to note that.
There is no base rate increase proposed for DME in fiscal year '26.
The ECA and TCRF will adjust as they have been adjusting the ECA on a quarterly basis
and the TCRF annually.
We talked a little bit about just the implementation of the ECA large load, which we think will
strengthen the fund's financials by having that reserve target.
Revenue projections of $526.6 million and expense projections of $509.5 million.
Through the zero-based budgeting process, DME was also able to identify $3.3 million
reductions, one being the winter and summer outage insurance.
And we just want to note that we still have contingency funds available for, you know,
any unexpected outage.
The campus expansion, revenue funding, the design piece of that, which reduced the debt
service by almost $1 million, and then reducing the focused advocacy contract of $72,000,
which is a lobbying contract.
Additionally, DME intends to hold six vacancies throughout 2026, which contributes to that
$3.3 million in savings.
So taking a look at the five-year forecast, again, $526.6 million in revenue, $509.5 million
in expense for a net income of $17 million and no base rate increase.
So looking at DME's five-year capital plan, we anticipate $63.9 million of new funding,
of which $58.4 million would be debt funded, and $1.47 million would come from their operating
and another $4 million in development contributions.
Just as an overview, new residential and commercial, $8.3 million in projects, distribution, transformers
and substations, $18.2 million, transmission lines and substations, $12.2 million, feeder
extension and improvements, $11.1 million, meter improvements, $1.8 million, street lighting
and power factor improvements of just under a million, technology and electric relocations
of $9.9 million, and again, revenue funding vehicles of $1.47 million.
We did want to mention, as we had mentioned to counsel previously, that DME is looking
at some transmission overload projects which are pending ERCOT approval.
If those were to move forward, we would come back to you looking for an operating and capital
budget amendment for the debt service, and then as those assets are energized, you know,
the offsetting revenue associated with those as well.
So just wanted to make you aware that that may be coming back to you at some point in
the future.
So looking at the capital plan for fiscal year 2026, $63.9 million.
As I mentioned, $58.4 million debt funded, $1.4 million revenue funded, and $4 million
from developer contributions.
And any questions?
Ms. Parker?
First one on slide two, the six positions that are being held open, what kinds are they
if they're not going to impact reliability or service?
Well, the short answer is no.
Those are positions that were actually added for this fiscal year that we've not filled,
and so we felt comfortable keeping them unfilled.
Now, if there's a change, then we will come back to and discuss that with city manager's
office.
Now you've got a lot of transmission line considerations going on.
So save those questions for later.
I'm sure you'll have some work to do on that.
Anybody else?
Okay.
All right.
And we will entertain a motion to approve this item.
We have a motion.
Second.
Thank you.
I know it.
I know it well.
You know, thanks.
You do it for Deb and not for me.
All those in favor, please say aye.
Aye.
Passes unanimously.
Moving on to item G, which is customer service.
So looking at the customer service fund for fiscal year 2026, we are proposing $11.8 million
in revenue and $11.8 million in expense.
As a reminder, the customer service fund is an internal service fund that is funded by
the utilities in order to, you know, complete utility billing on their behalf.
And as we talked about at the last meeting in regard to convenience fees, the city currently
pays $1.3 million in credit card fees and e-check processing fees.
The city currently doesn't have a dedicated fee to recover that cost.
So we talked about a number of options, and we took the PUB's feedback.
We presented the information to council.
Council had very similar feedback to the board.
And so staff is currently looking at a number of different options, whether it's a flat
rate convenience fee, the options related to percentage-based fee, potentially a tiered
system of some type for convenience fees, and also a fee that would be based on customer
type, whether it's residential or commercial, et cetera.
So just wanted to let you know that staff is still looking into these options.
It's not as straightforward as just flipping a switch.
There's a lot of back office adjustments that would need to be made, as well as work
with the city's vendors to ensure that it's feasible to move forward.
So our intent is to continue to put together options and bring that back to the board for
your recommendation on the implementation of that fee.
What it means for the budget, if I back up a slide, currently all the utilities transfer
funds into the customer service fund.
So the implementation of this fee, the effect of it, if it were to be implemented next year,
would be that the transfers from the utilities would be lowered, and the utilities would
see a savings in their funds.
So from a customer service fund budget perspective, this $11.8 million in revenue and expense
would be unchanged.
It's just a matter of where that funding comes from.
So I just want to let you know that the savings wouldn't be seen in the customer service fund,
it's going to be seen in the utility funds, which then would help their funds.
Could you go back to slide three, please?
So the cost recovery options, those four points are directly related to how to address the
$1.3 million.
Correct.
So the individuals, because they're using credit cards and that.
So would those fees then be directly related just to them versus those that may come in
and pay cash or a check?
They will be?
Correct.
Okay.
Thank you.
Yes.
Yeah.
So what we're looking at, what we're looking at is a convenience fee for paying with a
card online, as opposed to, you know, if you have a credit card, we're looking into it.
So yeah.
Yeah.
Did you say, I'm sorry, did you say a debit card?
This is for both of them, right?
It is both.
Okay.
Yes.
I'm sorry, I missed it.
What is both then?
Debit and credit.
Oh, so this fee could be for the debit as well then?
If it is processed online through the website, if you were to come in, any kind of point
of sale, you know, you swipe your card in person, that would not be assessed the fee.
Okay.
But those are the kinds of details that we're trying to sort through in terms of, you know,
what the card processors and the rules around each, you know, are, and bring those back
to you.
So cash and checks would be exempt.
Yes.
That's the word I wanted.
Yes, yes.
So it would be out there.
All right.
Thank you.
And if I remember, if you're on a reoccurring, even though you're using a credit card, that
fee will not be charged.
That's correct.
If we were to move forward with a convenience fee, those, we could not charge the convenience
fee on those recurring payments.
And that's because of the law around?
That's correct.
Okay.
Yes.
Now, there are some other types of fees, whether it's a service fee or a surcharge.
There's different types of fees in the merchant service world.
And so, you know, we're taking a holistic look, but really what we were looking, you
know, focused on was just the convenience fee for those credit cards that were being
processed online.
Okay.
Thank you.
All right.
Just wanted to comment.
After our last meeting, I actually went home that day and changed from paying with my debit
card to paying with an e-check because, you know, I had no idea that $10 a month of what
I was paying the city was going to a credit card processor.
So instead it's now it's five cents to a check processor and I do really strongly believe
we want to encourage that movement because it's not, you know, it's still a two minute
process to do an e-check versus a debit card and you set it up once and save 3% forever
on, you know, in cost.
Yeah.
There are ways to do it, in other words.
Yeah.
Okay.
Thank you.
All right.
I guess that's all.
All right.
Now I will entertain a motion to approve that item.
We have a motion and a second, what a different combination.
All right.
Thank you.
All those in favor, please say aye.
Aye.
It's unanimous.
Thank you.
Moving on to item H.
Yeah, sorry, that is the end of the presentations.
The remaining, I believe, four items relate to rates just as a separate item, but those
were incorporated into the presentation.
So if you have any questions, again, on those, yeah.
Yep.
Thank you.
We covered it all in the previous presentations.
And considering that we've approved them all, we kind of need to approve the rates now.
Yeah.
That would probably be good.
All right.
So I'll entertain a motion for item H, water fund.
Move approval.
I have a motion.
Second.
All those in favor, please say aye.
Aye.
Passes unanimously.
Now entertain a motion for, to approve item I.
So move.
We have a motion.
Second.
All those in favor, please say aye.
Aye.
Passes unanimously.
Is there a motion for item J to approve?
So moved.
Motion and a second.
All those in favor, please say aye.
Aye.
Passes unanimously.
Is there a motion to approve item K?
So moved.
Motion.
Second.
All those in favor, please say aye.
Aye.
Passes unanimously.
Is there a motion to approve item?
Well, here we go.
We're going to talk about item L. I was on a roll there, but management reports.
Tony.
So, Mr. Chair, members of the board, I don't really have anything, there's really no outstanding
items for new business action.
Your calendar, at least for future items, does seem pretty vacant here, but there is
one item that we're working on that I want to give you a heads up.
This is with customer service on our credit collection process and leak adjustment.
That'll be coming to you.
I just cannot recall at this point when in September, but it's one of those two meetings.
And we're working through that now.
I hope to bring that to you sometime in September.
We'll be working with the other departments to see if there's other major items to give
you a heads up in case any of you are planning to be out, and if there's a need for us to
kind of work with your schedules, we're happy to do that.
So with that, if there's anything else that you need, happy to go through that.
I was going to say new business items.
Mr. Rayner, do you have anything?
I knew it was coming.
I was just curious in the paper, is it Love Valley with the sewer?
Whatever the swamp.
The package plant, how will that affect us in any way?
Because it keeps coming in, the city council is involved with it, somebody.
Mr. Kay, could you give us an insight, please?
I think it's even good, probably just briefly maybe cover it, but very briefly, if that
is possible.
Oh, if it's permissible.
Yeah, because it's not on the agenda.
Really quickly, the city has filed its, well, the plant itself will affect the watershed,
and so we are evaluating our options to protest.
That's really high level.
Thank you for the report.
I just didn't know if there was anything we need to be concerned about with this.
Well, maybe concerned, but nothing we're going to be able to do about it.
We're tracking it.
Tracking.
Bring something that's pertinent.
Yes, sir.
Okay, great.
Read it, if you want to stay.
Alright, anything else, if not, we stand adjourned.