>> All right. Good morning and welcome to the public utility board meeting of Monday, October 27, 2025 for the city of Denton.
Are there any presentations from members of the public? As usual, there are not. We'll move straight to the consent agenda.
Does any member wish to pull an item from the consent agenda? Wow. Okay. All right. Well, then we'll entertain a motion for an approval.
I have a motion for Mr. Robert. Second for Mr. Taylor. All those in favor, please say aye. Aye. Any opposed? Sign the same.
All right. Moving on to items for individual consideration, consider approval of the minutes of October 13, 2025.
Unless there's any changes, entertain a motion for approval on item A. Second.
I have a motion. Second. All those in favor, please say aye. Aye. Any opposed? Sign the same.
Passes unanimously. Moving on to item 3B. Consider recommending adoption of an ordinance for a contract with Acceleron software for prepaid utility solution from the customer service.
Guru. Well, hello. We're going to see about this tech issue.
I've got a light. $25 a second. Okay.
You know, rose down, rose downhill, doesn't it?
Good morning.
So if we.
This one and then just to turn that off. Okay.
Thank you.
We'll give it just one more moment.
All right.
So chair board, Krista Foster, customer service manager, and I am just doing a brief presentation on our prepaid utilities program.
We are going through some contracting with that.
So we introduced prepaid utilities in October of 2018. The original review by tech services indicated that with the integrations that were required and some of the complexities that it be a 10 year lifecycle platform.
But they did do a follow up review and indicated that a 20 year lifecycle option was more appropriate for this product.
So these are the services that are provided. It gives customers daily cost and usage information so they can better plan their utility expenses.
And it reduces arrears balances for customers or large final bills gives them flexibility in their payment dates does not require deposits charges them no late or interruption fees.
We have a debt recovery option so those customers have a better chance of being able to keep their utilities on while catching back up and they get alert options and balance usage and balance options for alerts on a daily basis or as they set those thresholds.
And then it also allows us to do postpaid usage monitoring for electric for residential customers.
So what we did is we actually projected our cost at current engagement rates allowing for a 5 percent annual customer base increase which would max out at saying 15 percent of our customer base is probably not likely to go over 15 percent of the customer base to a prepaid program.
And so with that we did the additional 13 years of expenditures based on that which comes to a total of 15 almost 15 point five million dollars.
Yes sir I'm just curious the capping the growth at 15 percent. Where did that number come from. We were looking at our growth rates and we have been hovering in the 800 to 1000 customers until the last year and a half.
A 15 percent growth rate across that time was partially to maintain what we're trying to set this contract at to something reasonable since we're nowhere near 15 percent and additionally allowed at 15 percent at 5 percent growth annually in customer base.
So it would take us to 30 40 thousand customers over the next 13 years.
Okay and 30 or 40 thousand customers is the 15 percent that would be yes right around the 15 percent at that time.
So just to understand the so the fire right now it's a few percent of customers 5 percent or something if customers are on the plan. And so if uptake triples to kind of what we expect the maximum to be and then 5 percent of 5 percent annual increase in total meters.
Okay I'm I was trying to figure this arithmetic out because you have like a 5 percent increase and a 15 percent max but then over here the rates are basically going up like 30 percent.
So the other thing that we have to include in the year to year expenditure is up to an 8 percent increase by the contractor requesting it. City contracts allow the vendor to instigate an increase each year as well.
So we were wanting to include that as of yet no vendor that we have has been using that option so this should be more than sufficient funding to allow for the program over the previous life of the program that we've had thus far.
I want to say we were less than 50 percent of the authorized funding was actually utilized because we're billed as customers are using the program.
Right and I understand we want like I mean we're just we just approved change order number 10 on a on another project I get that that it's sometimes better to plan ahead and put a little extra contingency in their plan for the growth.
Just this 30 percent per year increase you know takes it to where you know in 10 years we're doing paying 10 times as much.
Again we will only be paying what is actually used so the likelihood that this actual projected spend will be met is very low.
We just want to make sure that we have the funds available in the event that there is a growth and explosion in that program.
And to understand also if you go back one slide what we pay for you list you listed a bunch of yes.
Like usage monitoring and that sort of is like a per page view or is it just a percentage of the bill for the daily usage monitoring is something that is free of charge.
So the fees that we see are actually related to enrollment in the program so that there's a monthly enrollment fee per user and then for the text messages or email messages there are per incident fees for those.
So those fees really depend on the way the customer has chosen to receive their information if they're using like SMS push messages and notifications those are free of charge.
But if we're needing to send out a low balance alert or a pending disconnection alert via text or email those would incur a charge.
Okay so it's something like $10 a month per enrolled meter and then 25 cents a message or 50 cents a message or something like that.
Something like that I want to say the rates are cheaper and if you'd like exacts I can bring those back.
Just kind of that general premise okay thank you.
Yes, I have a question this is a prepaid program where you are going to equalize your payments out over the year rather than have them you know travel with the changes.
So no they're basically done as actuals so well for electric because electric is AMI metered.
So we look today at what you used yesterday and calculate those charges and that comes off your balance.
It's kind of like when you put gas in your car if you know that you're going to be driving 10 miles to work each day and that's going to take about X amount then you know how much you can put in your car to get to work for the rest of the week.
So maybe I'm misunderstanding a prepaid program so I'm going to deposit a hundred bucks and you're just going to chew up the money as it goes along. Is that it? Yes so each day it's kind of like a prepaid cell phone plan as you use services the money is deducted and that way you can see real time what you're using.
You can better plan for how much you need to deposit to get where you're needing to go your next paycheck whatever that may be.
Okay I understand why the enrollment is lower than what I would expect.
I thought you were prepaying an amount you know like per month equalize it over the year. No you can absolutely do that. But if I'm just depositing money and you're just taking it out what's the difference of you billing and me paying.
So the difference is if I am a postpaid customer which I am not but if I were a postpaid customer the usage that I am accruing today I will be billed for in three weeks right.
So the bill that I have today is for usage from four weeks ago. If I get into a situation where my services interrupted I am now going to have to take care of past due balances I've probably received a brand new bill so I have those potentially deposits because now my credit rating is a little bit more risky for the organization.
And then it's going to I'm going to get turned back on but I'm still in arrears. So with this program if I have the deposit on file that deposit can be taken off file placed into my prepaid account as money that's going toward my services and I'm moving forward I'm not accruing back balances.
Not an interruption of service for non-payment not an interruption of service from failure of the service. Correct. Okay. Yes yes yes.
Well thank you. I know I understand again why the enrollment is relatively low in the program. Thank you. You're welcome.
And so our recommendation is just to award the contract with acceleron through September of twenty thirty eight in the not to exceed amount of fifteen million four hundred sixty thousand six hundred five dollars and twenty three cents.
And just to be clear this contract is set up so that it is a three year contract with ten one year renewal options. So even accepting this does not mean that we are forced to retain that service through the full length.
And are there any other questions.
So it's three years before it's renegotiable or is it annual. It's three years from the date of signature that we will be with that service.
And then after that it would be one year renewals so that we have the option to do that and I believe Lori had said that even if we chose to leave that there is a clause in this contract that with 30 day notice we could terminate.
It's a cause termination I would imagine. Lori that would be a question for you.
I'm going to say yes.
Lori fuel purchasing manager. No you're fine short. Yeah I need to actually read through this one because it's not our basic contract our basic contract we put a 30 day to terminate for cause or for convenience.
So hopefully the convenience is in this one also I can get back to you to make sure that it's in there. Yeah I would bet it is. I hope so. Yep. We try to put it into all of our agreements.
Mr. Reiner.
Good morning. Could you go to slide number two for me.
So this prepaid program at refresh my memory if you would is this just for residential or is this residential and commercial.
This is just residential currently.
And what is the percentage of if you have the top of your head the prepaid versus I would call the old fashioned I get a bill and I pay it.
So right now we have just about 2100 customers on prepaid. That's what you're out of about eighty one thousand customers in total.
So it is a very small percentage currently. I will say that the customers that have moved to prepaid we see most of those customers enjoy it immensely.
It gives them much greater control on their budgeting and their finances.
When I run statistics I found that customers in the year prior to being on prepaid called 50 percent more than they called in the year after moving to prepaid because they don't end up having the difficulties or wanting to have to call us.
Those who do call us generally to make a quick payment and just move on with their day. And do you is it ideal or is it the futuristic plan that we go hopefully 100 percent like this for you is that would that are how does what's the life expectancy of the old school I'll call it.
I don't know that there have been a lot of discussions on that. We want to move everything toward the prepaid.
I think that it's a matter of giving at this point customers a choice for what works best for their lives and the way that they want to manage their utilities while giving customers who need this type of flexible option a chance to be able to be very successful in managing their utilities.
So let's say I have a property management firm. Oh I do.
And let's say that I have 20 accounts in the company name.
What is the is in that scenario being a property management sometime the houses I many times I get to the to show account to get the property prepared once a tenant leaves and sometimes the tenant leaves me a utility bill that I am charged because it is on the property versus the individuals named any time.
So how does that fall if I wanted to go to prepaid. How do the no deposits or penalty payments. How do they affect if it's if it's if I get caught where I'm a tenant left and I'm stuck with the bill myself.
Does that fall into that scenario that you've just shown there.
No, I would want to maybe speak offline with you to be able to better understand what some of the specific scenarios are sure accounts.
But this would be the same as the other. The account is in the name of the resident whomever that resident is. The difference is, if you get to a point where your past do like you're in the negative, or you get to a place where your service is interrupted.
There are no fees for you being interrupted. And the only thing that is required to be restored is to pay the negative balance.
If you have any funds that are in debt that you're paying off, then you would have a 25% of whatever the total balances that would need to go toward that debt and a $25 credit and the $25 credit is not a fee.
It is truly a $25 service credit so that that customer can remain in the positive balance for more than a couple of days.
And then their services are automatically restored within 15 minutes.
Great. And could you, if I may, please go to slide number three for me.
Yes.
So the 15 million, that's if everything falls into play as far as your growth and such. So if we don't have a growth to this extent, I'm just curious, is that 15 million, is that the vendor's request or is that something the two entities got together to build or what?
No, this is purely a number that allows customer service that if we experienced all of this, this contract would have sufficient approved funding to continue.
This is not, these funds would not go to a vendor or be in our budget unless we're seeing the growth and adding those additional funds into our budget to accommodate.
So those will be actual dollars that you're looking at, and those numbers may not be the same, but it's actual dollars that's coming in.
Correct.
And it's not money that's having to come out of the city's pocket.
Correct.
And so I, too, am a little caught back with the 15 million.
Sure.
And I realize that's just a paper number, it sounds like.
Correct.
But I've been in other groups where even though that's the paper number, for some reason people try to strive for that, and if they don't, then they look for ways of making that number.
I don't know, and maybe that's inappropriate, but that's just, I'm concerned about that.
I was going to say that is not part of this, and those numbers, they could only be spent if we're actually seeing the usage of that program.
And we don't budget nearly that high an amount currently because we don't see that usage.
If we see an increase in our usage of one year, we'll project that for the next and increase only as appropriate based on that validated information.
So is it fair to say then we may not see you again until 2038?
I am certain you will see me again before that, but with this one, hopefully not.
Okay, thank you.
Never come in.
If I can tag on to what we were just talking about, so basically if this thing only grows, you know, a few percentage a year over the life of this contract, the contract won't be at 15 million, it might be 350 or 400,000, you know, per year.
Correct. This is purely making sure that if we experience some of the growth that we've been seeing over the last year and apply just standard growth rates with a cap, this is what we would want to be safe in allowing for.
I'd like to share the concern about the 15 million for this program, but again, since it's a projection, it may not come to pass, and if it doesn't, then this thing might end up being worth, you know, five or six million over the entire life of the contract.
I don't want to see it as a goal.
Well, you know, since you're a property manager of residential properties, maybe you want to mandate that your tenants have to go on the prepaid program.
We're going to talk offline. Thank you for bringing that up.
You know, first of all, this has been a great program, it really has, so we've got 2,100, you know, customers that if it wasn't for this program, those customers wouldn't continue service, right?
They would not be able to pay the amount that they have in arrears, right?
And so, at that point, now we're going into uncollectibles, we're going into collection proceedings, all those kinds of things, right?
This program has allowed them to take the amount that they own, they still carry it forward, every time they pay to keep their power on, they're paying a percentage, and I think it's like 25%, 25% of what they pay, whenever they pay it, goes to pay off that debt that otherwise wouldn't have been paid off, right?
And so, I just want to make sure that the board understands that, that while this may be a big number, right, on an annual basis, while we're going to budget what we need to continue the program, but again, 2,100 customers and that number will likely grow, allows us to continue to receive funds that otherwise would have been lost, so.
And to ask that question then, with the way that the payments are made, whether it be by credit card, I know we've talked about extra costs with that, or if they come down and just lay down dead presidents, that is fine in that there's not an increase of their expense because they're paying cash versus the credit card.
Correct.
But the other way around, the credit card does go up a little bit, is that right?
Yeah, it depends on the type of credit card, on the credit card charge that we get, and so, and again, those 2,100 customers are our residential customers, sometimes are folks that are living in multifamily areas, right, that, that for whatever reason have difficulties making payment.
This program has allowed them to continue with service, right, keep their power on, and the rest of the utilities, while still being able to pay off the debt that they owe to the city.
Thank you for your clarification.
Yes, sir.
So I appreciate the program and I think this makes sense.
I would not want to get a text message telling me I've got three days left to pay my electric bill or, you know, I'm going to run out of credit and get my electric turned off, but I think it does suit, you know, some customers.
And so I think it's a good program to have. I generally like having growth factors in planning and budgeting, because, you know, a lot of times we'll like we're planning for the growth we're seeing and then in five years that we forecast that 2% growth after that and our capital plans are often really front loaded and don't really represent where we're going to likely be in 15 or 20 years.
And I worry about a 15 year contract that has about a 25 to 30% escalator for the first like eight years until we hit that 15% cap.
Because of the nature of this one, because this is strictly, we're only paying kind of per meter that's enrolled.
There isn't scope creep or vendor you know like we're going to ask something extra like we've got the budget let's just ask for a little bit more kind of situation like you might have on a design or even an ID IQ kind of contract.
It's, it's, I don't, I don't love it that has like a 30% growth rate for a 15 year contract. But I think it, I think there are other limits that keep this in in the guardrails.
So I think I'm not going to vote against it but I would, I would, it makes me leery to, to see such a huge increase like a 10 X increase over the life of an annual cost over the life of the contract, just kind of, you know, makes me nervous but like I said the nature of this one I think it's okay but I would, I would, I would probably be not be supporting a design contract or an ID IQ.
I'd rather see change requests every two or three years than, than just a contract with this level of escalation on it.
Okay. I think you see the support of the program itself obviously I think it's a great program and it's, it's probably much better for the city's budget as well I mean for the actual dollar, the income amounts.
Just, there is a concern about how much we're budgeting and really why.
So, having said that, some room more questions. You need an action on this don't we entertain a motion to approve.
There's a motion and a second for Mr block. All those in favor please say aye. Aye. Aye. Any opposed sign the same.
Passes us anyway. Thank you. All right, management reports.
Good morning, Chair and PV board looks like we have. There's three memos that were provided to you within your packet. I believe we have representation from each one of these areas if there are any further questions.
No future agenda items that we're aware of and no new business action items, Mr right back.
Yes.
I have a question regarding the utility relocation memo, which I did read, and I'm very glad to receive the clarifications, but I'm very concerned that we received documentation that was so improperly prepared.
I'm curious to know how we're going to not be seeing that again. What steps will be taken to keep that from happening again.
Aaron Skinner, senior project manager capital projects.
So, moving forward we'll just do more of our due diligence before it gets to you guys.
I appreciate that. So, if you don't mind my asking what steps will you take to ensure we don't receive documentation.
We're going to do further dry runs going to do what I'm sorry do further dry runs on these documents before we send them to you guys. So further review.
Yes, sir. Yes, sir. I think that's a very good idea.
Thank you, sir.
No, thank you, sir. Thank you.
No. All right.
Nothing in closed session.
We stand adjourned