It's 9 o'clock and we do have a quorum so we'll call the December 9th Public Utilities
Board to order.
The first item on the agenda is to receive a report, hold a discussion and give staff
direction regarding solid waste and recycling grant applications to the North Central Texas
Council of Governments.
Good morning Madam Chair, members of the committee.
My name is Brian Berner.
I'm Director of Solid Waste for the City of Denton.
I appreciate the opportunity this morning to talk about some exciting, potentially free
money coming from the COG to help us implement a couple of programs here in the City of Denton.
What we're looking for today is basically to provide you with a quick briefing on what
the money is, what the grant program is, outline a few projects and then receive some feedback
and direction on these proposed projects.
North Central Texas Council of Governments, every biennium goes through a process where
they fund a grant program to promote solid waste programs that support the regional solid
waste management plan.
Ideally, we're trying to reduce waste, ensure materials are being used to recycle whenever
possible, trying to affect illegal dumping and then at the end of the day safely handle
any remaining waste at permitted facilities.
Of the approximately $2 million allocated to the COG, about $1.2 million is allocated
to support local projects.
The rest remains with the COG to support a regional project.
There is some reporting requirements for those who are successful in getting one or several
grant awards.
There is a progress report that's due on quarterly basis at the end of August 31, 2021,
which is the end of this next legislative biennium.
TCEQ, we have to report to TCEQ what our results are and then one year later we have to report
any sort of status update with regards to how the process is working, how the money
is being spent, so on and so forth.
There are several project categories and again, these are broad categories that are eligible
for grants including but not limited to local enforcement, source reduction recycling, household
hazardous waste, litter abatement, citizens convenience centers, solid waste management
plans and on and on.
In this grant cycle, the COG has seen fit to place a priority on increasing recycling,
looking at food waste diversion, pharmaceutical disposals, targeted education campaigns and
construction demolition debris because based on a survey that they did last year, this
appears to be the most underserved areas of solid waste management in the North Texas
area.
From a grant funding timeline standpoint, we are in Q4 here.
We will be presenting today to the PUB the proposed grant packages that we would wish
to submit.
Tomorrow, we will be presenting those to council.
The grant packages are due in January or January 6th.
So again, a fairly short timeline to get everything else together.
We have been working on getting the data, so that's not an issue.
We will hear back in March whether we have been awarded these grant projects.
In April, we will have contracts executed and then by the end of May 2021, we should
have all of the projects actually completed and all of the information back to the COG
about how successful and such that we were with the grant funding cycle.
So with this, I'm actually going to -- this is going to be sort of a cast of characters
today.
I want to turn the podium over to Ms. Tina Eck who is going to talk about the proposed
projects that we have here in solid waste and then we're going to turn the podium over
to Deborah Viega to talk about a proposed project that they have in watershed.
Our first proposal that we would like to have you consider is the comprehensive solid waste
management strategy.
We have spoken a little bit about that already, but what this would do would be to fund the
consultant that would come in and get that kicked off for us and there's an entire category
that's just focused on this award.
Our next one would be for recycling dumpster contamination reduction in lids and locks.
So what we've noticed particularly at our multifamily properties is some of the contamination
is for bulky type items specifically and so these restrictive size lids would reduce that
so essentially it would come down and lock onto the lid and then create an opening that
was essentially large enough for just a bin so that you could dump your loose recyclables
in there.
One of them costs about, let's see, it was about $3,000 a piece I believe and that's
without installation so this is a wonderful opportunity to have that done without additional
burden.
They're technically two separate pieces so each piece and then the lock that comes down
over it but it's a gravity lock type system so once it flips back over it just closes
so there's not anything that you would have to do to lock or unlock it manually.
We have our submission that we would like for the public disposal area recycling center
improvements and upgrades.
So what this is is kind of a bundled picture so we have our existing facility that's at
the landfill at the public disposal area.
It will need to be moved by the time we develop the next landfill cell so this would cover
the design costs to give a really thoughtful design to what that public area looks like
and how we construct it and then additionally our current site at North Lakes is being relocated
but what this would do would be to and that's already funded in our capital program but
what this would do would be increase the funding for cameras and also when litter fencing and
just some other type improvements to the site to make that more successful.
What do you think can be done to reduce illegal dumping not only in a place like North Lakes
but also with multi-family what you're talking about the restricted access on those dumpsters.
What's to stop people from just leaving their stuff on the ground there just as they do
here?
Yes.
Yeah.
That is very true so ultimately really with the drop-off site that it's a manned operation
is the most effective and or at least having hours of operation for it and then closing
the gates but then it just goes the material goes right outside the gate so it's still
a concern unless it's a manned facility which is what's particularly successful about our
Lee Enfield site comparatively.
I didn't know if you had anything you wanted to add to that answer.
Again to reinforce what Tina said until you get a staff member out there actually checking
people in and out you will always have illegal dumping I think what we're trying to do is
raise the bar here by putting in video surveillance what that allows it it does add a level or
a layer of accountability so we can go back and prosecute or do we need to do to minimize
those those issues.
I know there used to be a video camera out at North Lakes I don't think it's operative
anymore.
No it is not and again the quality of those are extremely poor and part of what we want
to do and I think that's part of what what Deborah is going to be talking about illegal
dumping around the city is some very very high quality where we can you know get facial
recognition we can get you know license plates we can get the evidence that we need that
a prosecutor can actually take something forward and make it stick.
Thank you what's sorry what's the penalty for illegal dumping.
At this point I can't respond to that but we can bring that back to you if we need to.
Is it a misdemeanor?
Again I would have to bring that back to you.
We have our current home chemical collection program but we would like to enhance it to
include mobile events and so this grant request would be for a trailer especially outfitted
trailer so that they could go out into neighborhoods and have a public it would also have an education
component in it as well and an outreach component to have public collection events and so the
request would be for the trailer a forklift to load and unload out of the trailer and
collection and packaging supplies and then outreach material so this one is kind of a
combination of many different facets that would would essentially enhance this program.
And then our final one is yard waste collection craft bags so as you all well know I'm sure
we began our yard waste collection program modifications on October 1st and so what we
were thinking that this could accomplish would be to get an additional supply of craft bags
that we could give out that would have the educational material printed on them so kind
of give a boost to the program and hopefully increase the diversion and the participation
in the program.
And that concludes ours and then there is one more.
If I understand if you elect to have the bags you can get additional but if you elect to
have the cart people in the northeast that have so many trays that cart doesn't even
begin to make a dent what what is available to them?
Basically the cart service comes with unlimited craft bag collection at the same time so you
can have one cart and 50 craft bags if you would like and they're all collected at the
same time.
Okay.
Alright.
Thank you.
You're welcome.
Good morning the Brevier Environmental Services I will be presenting for the remote cameras
for the illegal dumping throughout the city we have identified sites especially the outskirts
that are prone to be magnets for illegal dumping due to the secludeness of the location.
Illegal dumping is a it's not only a water quality issue because most of that trash end
up being on the creeks and being end up at the lakes where we take our water for portable
purposes but also it becomes an issue of safety welfare and health.
Most areas are could if the trash end up being at the creek it can increase our flood conditions
that means that our drainage department will have to go out and get that cleaned up.
It could be a breeding ground for mosquito related illnesses so it's a safety issue and
definitely is a welfare issue as well and aesthetics.
So just to give you an update when we first put this together we were looking to get approximately
$5200 as a grant as of last week when we met with COG they actually told us to bump up
our request because they have they have granted similar awards in the past and they recommend
to use a better quality high resolution cameras that tend to be more expensive.
So the grant actually will be around $15,000 because each camera will cost around $3,000
to $4,000.
Those cameras have higher resolution so we will be able to get better picture if we have
the elements for prosecution and also they are more difficult to be stolen and dismantled
which is our experience with the current set of cameras.
So people tend to either remove them or tamper and so this new set of cameras would be higher
quality and provide us with that.
So if you have any questions for that program?
Questions?
I have one question.
It looks to me like the use of this kind of camera would be pretty broad for a number
of people if there's not some compelling reason not to if you wouldn't mind sending back just
to the committee what you end up selecting and what you had planned on selecting prior
to the request for increase of the budget amount affected there's a lot of demand for
that and a nice you know stand alone system like that.
There's probably other uses both inside the city and for other benefits that I think people
would like to see what we end up with if we find an adequate solution.
My question then is it looks like that's a Wi-Fi antenna on the housing do you anticipate
having Wi-Fi access for each of these locations or is it going to be cellular based or something
else?
It would probably be cellular based to be honest with you and depends on the location
of it.
Most of the sites are more in the outskirts we have been in communication with the county
as well so in that way if we just happen to be taking pictures of something that happened
nearby but outside city limits we can provide that information for them and then take it
from there that's a part of the coordination where other jurisdiction can actually benefit
from it.
We definitely if I'm not mistaken it would be similar.
So the communication will be cellular?
Correct.
Yeah.
Thank you.
And we will bring more information later as you requested.
We can respond to any additional questions you might have on these.
Yes sir.
Yeah is there I don't know if this well I'll just ask it.
With all the concern now about plastic pollution will there be an educational component in
this regarding educating people about single use plastics and all the stuff that we're
having problems with?
Within each of these grant applications no at this point but as part of our solid waste
management strategy part of that education plastic or part of that education program
will entail some outreach regarding plastics, plastic diversions, single use things of that
nature so indirectly yes but directly no.
Okay thank you.
Have we approached the county with collaborating on this?
No we have not.
When do you plan to do that?
Well again I believe that with the with the illegal dumping camera yes that the county
has been approached on that one but the other one but the other programs from solid waste
are specific to our operations within the city so there really isn't a need to bring
the county in at this time on those.
Two questions I have one pertains to the security of the installation of the camera itself and
then the other is lightning do you anticipate putting these cameras on a pole or how do
you anticipate mounting them?
Traditionally with the illegal dumping they're mounted very similar to game cameras they're
put on posts they're put on trees and again they're not a static installation I mean
ideally we know where our high use you know frequent sites are they're used for illegal
dumping but you move them around because once you start enforcing in one area they move
to another so you've got to be able to move those but again there's significant camouflage
and other items so again you know they're not as just in your face so to speak they're
out there collecting the evidence.
From a lightning standpoint again these are fixed these are you know standalone units
just like any any other piece of electronic equipment that happens to get you know hit
by lightning then it's fried but otherwise there is no surge protection or anything else
because it is contained within itself.
What's our record of being awarded these grants?
This program with the cog is well over 15 years old and while I have not been with the
City of Denton for over 15 years you know having worked in the North Texas area that
entire time I know that the City of Denton has been very successful anytime that it has
been awarded these.
Now you know sometimes the installation or the execution of some of these grants has
not been as well as done as well as we would have anticipated however you know we have
a very high regard for what's going on here and we are having talked with the cog staff
there behind what we're doing here so we have a very good feeling that we will be awarded
these if the grant application is put forward.
Is there any record of progress made with past grants that the City has received?
Have we gotten grants from cog for this before or is this?
Not for these no these are these are separate projects but in the past we've had household
hazardous waste we've had education and outreach we've had basic you know all the different
categories just like every other city in North Texas area we've put in grant applications
we've won those we've implemented programs we move forward.
And is there a requirement that you submit a report to the entity or is it like an arts
grant or anything else?
Correct I mean there is a reporting requirement so you know in the first quarter while we
have it there is a reporting requirement at the end of the grant period we have to report
to the TCEQ how we've done and then we basically have to do a year later showing what the progress
is.
Another question about the very first item you mentioned developing a formulating a plan
for solid waste.
Correct.
Do you have any does your department have any plans of its own on what you think should
be done or is this looking for a consultant to tell you what the best practices are?
Well again this is actually this is not a plan this is a strategy so it's a forward
looking document.
What we want to do is look at the trends that are happening out there if we were putting
this together two years ago nobody would have envisioned that the national sword that happened
in China and we would have thought you know managing plastics the same old same old.
Where we sit here today at the end of 2019 we know that recycling is an issue and how
we did it even 18 months ago has to be addressed a little bit different.
So what the consultant is going to come in and do is help you know through discussions
with boards like this with the council with the public looking at what's happening across
the nation trying to forward vision what some of these strategies are we'll take that information
and we'll put together the plans to meet those goals to reduce the amount of material we're
sending to the landfill to try to increase diversion try to increase you know reuse and
recycling of material that are out there.
Now some of this may go back to you know just the way we manage physical you know material
that we pick up other may be some sort of a little more aggressive legislative type
plan because we are bound right now by several laws that are in place in the state of Texas
that don't allow us to do certain things or as I you know as I brought up here you know
some of our food packaging laws right now are 20 and 30 years old and they require certain
things that may or may not need be needed right now from a health and safety standpoint.
So going back and looking at those and trying to get changes in those which at the end of
the day would affect the material that we have to recycle.
Other questions?
If not then you know our plan is to take this presentation tomorrow to council for their
approval we will complete the COG grants and submit that.
One other thing that you will see probably in the January time period is we are required
to submit to the COG a resolution from the council basically allowing us to accept the
grants if they are awarded so we will be running that information past you and as part of that
we can share with you the grant application so that you can see specifically what pieces
of equipment we are specing out and things of that nature.
I just wanted the illegal dumping is a nuisance violation it's a class C misdemeanor it's
a max of $500 fine of $71 that goes to the state and taxes additionally.
And that's $500 per day?
Well per violation.
Per violation.
Thank you.
All right our next item is receive a report and hold a discussion and give staff direction
regarding the Denton municipal electric budget.
Good morning committee members David Gaines director of finance.
This item is intended to give an update of the DME budget now that we have closed out
the previous fiscal year at least preliminarily.
For those of you who were on the board during the budget process you will recall that as
we were going through the budget discussions for DME we pointed out that the ECA rate the
portion of our rate which I'll touch on as we go through the presentation was significantly
underfunded at our current rates but we also had a significant fund balance so the discussion
points with the board and with city council during the budget process last year were do
we need a rate increase now do we want to hold off on a rate increase till possibly
the next fiscal year or do we want to see how this year shakes out before we make any
of those decisions and ultimately that's where council landed was let's not have any changes
to the rates during the budget process but come back to both the PUB and council once
we see how we end the fiscal year and at least give the update and that would give that option
to consider a mid-year rate change in our rates.
So to kind of cut to the chase at the last slide we are at this time not recommending
any rate changes for this fiscal year as we go through the budget process for the 19,
for the 2021 budget we'll obviously be having those discussions and as we go through the
budget process obviously it will be a much more detailed presentation, much more detailed
information for everyone and we've also had those conversations about having a more in-depth
presentation just on T-cost itself and getting the board up to speed all of those so definitely
as I go through this very high level short presentation we have D&E staff here to answer
any questions that you might have obviously we can get into any of the detail that you
would like but this was really the intent of this presentation was really to give that
just update on how we ended the fiscal year.
So this just lays out everything I just went over for the objectives of the meeting.
So this chart basically says right what I just pointed out of where we thought we would
end the year or where we ended up in finishing the fiscal year.
So as we brought the budget to the board and to council during the budget process we estimated
that we would end the fiscal year with about an 18 million dollar deficit in our operating
fund last year and which would be a draw down on fund balance and that the deck would be
about two and a half million from a net income basis under, with revenues under expenses.
We also said that we would have no increases as I just mentioned on those on either other
of the primary rate classes.
We ended the fiscal year much better than that.
You know obviously as we're going through the budget process we come to PV early in
the spring and we even adopt we'll get to a point where we're ready to adopt a budget
in September having these discussions in the summer it does make it difficult with the
water budget with D&E where we have our highest usage months in August and July and we don't
have some of that data when we're making the estimates but August was a month that had
a significant impact on our fund obviously with increase significant increases in demand
a couple weeks where it was kind of almost record setting in the amount of demand that
we had and also the cost of power had that significant impact to have us use the deck
more had us pay more in purchase power but also had us receive more in revenues.
From a fund level perspective it was a good in our net position of the fund balance where
we didn't have to draw down fund balance at all we actually added another two million
almost three million to our fund balance as opposed to that that significant drawdown
in fund balance.
So that's this is again at the very high level fund balance perspective for where we ended
and then as we look at the ECA rate versus the base rates I'll touch on that briefly
obviously can answer any questions when we're talking about the ECA rate where the energy
cost adjustment rate so that's a rate that is really intended to fluctuate with power
costs so as the cost of energy increases that rate is intended to increase with it to fluctuate
directly where the base rates are really intended to cover those fixed costs those costs that
we can predict year over year.
There are you know as we look at this you know this is obviously a very simple way to
look at it we have the ECA separated there's a lot more that goes into base rates as we're
talking about this and a significant piece of that is our T-cost we know that we are
collecting significant amounts of revenue for our transmission cost assets over what
our debt service is so that that difference in what we're collecting allows us to somewhat
subsidize our base rates here so when we show our base rates over collecting a big portion
of that is that T-cost is over collecting to some degree and helping us to not have
that impact on the base rate so that's kind of everything that goes into this simple slide
but it is good to see this perspective that our ECA rates are under recovering significantly
and that's something that we will need to address as we go into the budget year and
some of those options would be do we think about trying to get that ECA rate to where
it fluctuates more in future years and maybe decrease the base rates to kind of to negate
that impact and those will be the discussions that we're having but prior to this year
we didn't see this huge deficit in the ECA rate and that's really directly tied to our
debt cost we have our debt operating cost and our debt service cost that flow through
the ECA rate so that's a big portion of why once we get that those first debt service
payments we started seeing the change in the ECA rate and why we probably have to have
that discussion on how that impacts the total but again overall just good news in the sense
that we don't have to have that mid-year change right now we can really just move forward
knowing that we're going to have a more detailed discussion as we go through the budget process
here in a few months.
So here are our highlighted revenues and it really just hits on everything I've just been
saying that we did base rate revenues outperform our estimate and then also with ECA revenues
and then we have a little bit more on the deck later on we have our deck dashboards
that we've been sending out and you can see that the deck was really used a lot more than
we had used than we expected to use it as we finished the fiscal year you know another
important point that we talked about and a reason that we kind of decided to press pause
after after meeting with council and the PUB was we had didn't have a full year of what
does the deck even look like so we're still learning we're still getting data points and
having that significant August what will help us prepare the future try to project in the
future but also shows what it looks like when we have that significant usage of the deck.
Sure.
Quick question regarding the deck is its revenue because of a large adjustment that came in
the last couple of months of the year is its budget done as one twelfth of an annual estimate
each month or is that seasonalized?
It's seasonalized we seasonalize so even the budget was seasonalized it just ended up that
August and September just happened to be highly profitable for it beyond normal seasonal adjustment.
Correct.
Yeah it was more than we anticipated but again we hadn't even had an August so it was still
trying to kind of guess what the usage would be with the deck.
And then one more question on the deck net income you mentioned a couple of slides ago
you mentioned energy cost adjustments are those made within deck net income or are those
outside of that?
The impact on the ECA rate is from the debt the net debt cost so when we say the deck
revenue really that's just kind of a part of our TNPA payment it comes in as a credit
in our TNPA everything that goes into what we pay in TNPA so the net of all that is what
the ECA covers if that makes sense.
So here's just a slide that we do that we show just try to make it as clear as possible
on what's in the ECA so you can see everything that's in the ECA our purchase power obviously
everything that we pay out for our power then we have our operating cost for the deck our
debt service any prior year balance and then we have then we subtract from that our ERCOT
revenue so the deck that's a net of any of the revenue that we see from the deck as it's
out in the ERCOT market so it is a net from the revenue that we receive from the deck
but there's still we still have to cover those costs with the ECA rate.
Okay and you've got deck operating costs and deck net service obviously operating cost goes
into deck net income but the deck net income is that adjusted by ECA or does deck net income
go toward calculating the ECA?
It goes toward calculating the ECA.
Can we get a copy of that slide there this is not that is not on our presentation.
Absolutely.
We have this slide in our budget presentations around the year but we can definitely send
that out no problem.
I know I've asked this question before but what is the reasoning of the debt service in
the ECA?
You know that's a discussion that we've continued to have that was a decision that was made
when we started the deck it was made you know once the deck came on board as we were having
those conversations to include it all so I think you know you can have that discussion
in either way I think the idea of keeping the debt service in there is it's a ultimately
the deck is a cost of power everything that we all the costs that we have for the deck
are a cost to purchase power if we didn't have the deck we'd be purchasing that power
elsewhere so all costs associated with the deck should be in there even the debt service.
I know that kind of goes against the idea of having a fixed cost so that is a discussion
and we had that discussion during the budget process as we went through it and there's
definitely you know validity on both sides but the justification for having it in the
ECA is we have we use the deck to purchase power so here's a total cost of the debt.
One follow on to Billy's question you show ERCOT revenue including deck revenue is all
of decks revenue included in it all all of the revenue comes from ERCOT and all of the
right yeah it is and if all of our income is going to that the debt service should certainly
come out of it.
Let's say revenue doesn't say income net income.
But operating costs and debt service are there yeah again that when we show our net income
or the dashboard we're kind of doing the operating costs deck and then taking out the so it's
all mixed in there and we even when we say deck revenue I was I mentioned it's not we
don't necessarily receive a check for that revenue or anything like that it's just netted
out from our ERCOT cost as they come through.
I have a question about the budgeted revenue for deck for the next budget cycle it's a
lot less than what it is for this year like 11 million dollars projected what's the reason
is it going to be cooler next year?
So you're talking about this number right here the deck revenue $25 million dollars
well you know that just goes back to as we were going through the budget process we didn't
have August to project we didn't know what August looked like when we were projecting
the revenue so we've tried to be conservative as we don't know that we haven't had the history
with the deck so I think it's two parts first being conservative and trying to estimate
how much we think we're going to use the deck and second we don't even now I think it would
I don't know that we would even say now we want to say 37 million dollars for our budget
because that August was somewhat extreme so we don't have that history to know so obviously
I think it's a conservative estimate on the revenues there but that really flows down
to the expenses as well I think so that's kind of where we stand.
And David also wasn't the budget adopted in mid September?
Exactly yeah it was adopted in mid September months ahead of that time.
But as we gain more history with the deck we'll be able to project that a little bit
better.
That's a goal we have and even when we project it we can come and say you know here's what
it would look like in a regular scenario here's what it would look like in an extreme scenario
and go through that process so definitely I mean as we go through the year we'll see
this budget and it's very you know likely if we hit what we did last year we're going
to be exceeding it both on revenues and expenses but it all you know it all plays together
and I think if Terry came up here and was talking about this as you have any questions
he would say you know everything that when we use the deck that affects our purchase
power on our regular purchase power cost so it all really does tie together.
Terry Nalti, Assistant General Manager at DME.
Anytime we look at a deck forecast revenue we have to remember that that's based on a
set of prices in the future it's an assumption that we're making based upon the then currently
traded forward market.
So this was established in September based on a curve date that was actually in May of
2019.
Today the curve is significantly different higher for the summer months as a result of
what we experienced in August and September.
So if we were to recast that forecast today it would be higher.
In fact the last time we looked at it a few weeks ago it's actually we would project net
incomes that were in excess of what we achieved this year.
But you will see that formally when we put the new budget together in early next year
and you'll start to see what July time frame or so.
Early spring.
Really you all start the budget process for the whole city we started off here.
We've kind of bounced around and we've hit most of the slides I will touch on the expenses
and then a lot of this were the discussions that we had during the fiscal year.
As you look at administration you can see our budget we significantly spent less than
our budget administration.
That's really tied if you recall for those of you who were here I can definitely bring
everyone else up to speed.
We had budgeted 28 a little over $28 million to pay off our TNPA scrubber debt going into
the fiscal year knowing that we had a fund balance and that was an option that we went
forward with.
We decided to hold off on that actually early in the fiscal year knowing that we had so
many variables outstanding from debt performance, TNPA and that turned out to be a good decision.
So that's why you see a decrease in our total expenses and what we ended up doing with that
TNPA debt was refinancing it which saves us $2 or $3 million over the next five years.
We didn't extend the life of the debt it still goes away in five years for this specific
TNPA debt but have $2 million less in expenses.
So that's the biggest reason that you see for a decrease there in administration and
then wholesale power you see increases which are really directly related to purchase power,
the increased demand and cost that we had that were associated with that.
So those are the biggest changes that you see in our expenses for the fiscal year.
We just touched on the debt.
The only thing I'll point out you can see that our full debt service payments are now
in the budget moving forward for the debt associated operations really.
The biggest piece of our operations is the fuel that goes along with the debt and then
you can see the other expense categories there.
Just the salaries and benefits, yes, yeah, I've been trying to get us to switch to the
spelling of personnel but it's hidden everywhere and it pops up.
The previous slide showed the expenses for DEC going up roughly 50%.
What's the reason for that?
The expenses for the Denton Energy Center going up 50% next year.
So they're the same numbers but this has more detail so I'll stick on this slide.
And I guess do you want to talk about the energy expense?
So one of the things that we have to forecast when we look at, again, dispatching the DEC
against the forward curve is how many hours a year it's going to run and that's based
upon the price of natural gas and then the price of electricity during that same period
of time.
So we assume that if the cost of the DEC is, say, $28 on a variable cost basis, any time
that the forward market is above $28, we're dispatching the unit into the market and then
purchasing gas for those hours.
So when you see these numbers, you can see that the 50%, the biggest change here is this
$14 million that was budgeted.
We actually only spent about $7 million in fuel costs because we ran actually half the
hours that we anticipated running in back in May of last year when we were doing the
budget, May the previous year when we were doing the budget, and what we actually ran.
So we only run the units when they're termed in the money.
So if it's above $28, in my example, we'll run it.
And this year, this past summer, August and September, the prices were significantly higher
than we expected, but they didn't last as long as we expected.
So we ran the units half the time and achieved a much greater margin in the hours that we
did run.
So our $12 million estimate, 12.5 for the next fiscal year is again based upon that
May 10th, 2010, I'm sorry, 2019 curve.
And that curve has changed significantly because of the performance in the summer.
So while underlying power prices for the calendar year are relatively similar to what they were
at this time last year, more of the value is now in the super peak hours in the summer.
And that's why the big difference.
I hope that answers your question.
So the deck expenses includes the cost of the natural gas itself.
That's the largest single cost, yes.
One more quick question.
You are showing debt service principal as an expenditure and subtracting principal debt
service from net income?
Yes.
Okay.
Yep.
Okay.
But no depreciation?
No.
Okay.
I just wondered how much would the deck have to run to where it couldn't run anymore because
it had reached the limits to its pollution?
I don't have that exact number, Mr. Self, but I can certainly get it to you.
We don't see any time in the future where that's going to be an issue based on the current
forward curves.
Prices would have to come up significantly for the non-summer months in addition to the
summer months in order for that to happen.
But I'll get you the number.
Yeah.
Thanks.
Yep.
So just to recap, obviously no mid-year changes.
We'll be updating our forecast as we've been discussing just over the next couple months
and then back to you pretty soon as we start talking about the 2021 budget.
And then obviously we'll continue to provide those deck dashboards, kind of showing that
net income.
And definitely if you have any feedback on those as we go through the process, let us
know and we'll continue to try to tailor those to get you all the information you need.
And that's it for the presentation, but we can definitely stand for any more questions
that you may have.
Any questions?
Okay.
All right.
Thank you.
Now we'll go into a closed session, deliberations regarding certain public power utilities,
competitive matters under the Texas Government Code Section 551.086, consultation with attorneys
under Texas Government Code Section 551.071.
Do I need to read this whole?
Okay.
It's about 10.35 and we'll reconvene the regular meeting of the Public Utility Board.
The next item is the consent agenda.
Does any board members wish to pull one of the three items?
Wow.
Do we have a motion to approve?
Move for approval.
I second.
All in favor say aye.
Aye.
Motion carries.
Items for individual consideration, the approval of the minutes for November 11, 2019.
Are there any changes or corrections?
Yeah.
When I read that, there's some spelling problems there and some sentences are truncated, they're
not complete sentences, so I think we should run a spell checker and a grammar checker
on the minutes before we sign off on them.
I also noticed that Chair Parker thanked the veterans for their work session.
I did, huh?
That was very nice of you.
Well, I think the veterans, I think, but not for the...
Oh.
Yeah, I see that.
I'm grateful for the work session as well.
So, can you take care of that, Kim?
Thank you.
So note in those changes, would approve after.
Okay.
Oh, then we're onto future agenda items.
Yes.
Thank you.
Good morning, members of the board.
A couple of things to note.
In your future agenda items, you'll be seeing in January a report and maybe an impossible
action on an emergency declaration that was issued to do some repairs at the old Alton
lift station.
We'd had an overflow, and so staff's been working through that for the last couple of
weeks, and so we're in the process of getting those repaired, and then we'll have a report
to you all about what all expenses occurred on that.
And outside of that, as we close the end of the calendar year, just on behalf of staff,
I'd like to thank the board for your service.
Thank you for your interest in not only, certainly the questions that you all ask, but also just
pure interest in our facilities and assets that we have.
It's tremendous being in a community like this where we have electric, water, wastewater,
solid waste.
And I know you all have toured the energy center, I believe last week or a few of you
did.
And our solid waste facility and other utilities, and I believe you'll be touring our recycling
facility here in January.
So again, thank you, thank you for your service, and look forward to working with you all in
2020.
Have a great year.
Have a great holiday.
That was a great tour.
Yes.
Thanks for that.
I appreciate you being able to see that.
I had a question, speaking of future agenda items, is the green tree water situation going
to be, is that something that we will have any advisory powers over?
Well, actually, yes.
We will actually be briefing the council tomorrow on kind of the status of that event and situation.
We can certainly provide an informal staff report to the board on Friday, this coming
Friday, because we would like to get some direction from council.
And if you would all like, we can certainly bring further information to a future board
meeting if you so wish, based on the information that we provide to you.
And if you want a work session, we'd be happy to provide that for you as well.
Yeah.
I appreciate that.
Thank you.
Oh, go ahead.
On a new business thing, just kind of a comment.
We get asked to approve replacement of equipment, different pieces of equipment periodically.
And I know that sometimes in the past when I ask, well, what is -- we get told the reason
we need to replace this is because there's very high maintenance, it's very costly, it's
excessive, whatever.
There's a lot of adverbs used prior to the adjectives to describe how bad something is.
When it comes to cost, I think it would be better to be objective in this and be able
to state what the actual cost is, what the historical record was for spending money to
repair a certain piece of equipment compared to other pieces of equipment, that kind of
thing.
Rather than just say it's high cost, excessive cost, poor maintenance, yeah.
I think it would help us understand more objectively just how bad it is.
I understand that everybody wants to have -- we all like to drive new cars.
We all like to have new stuff.
But I would hope that we can make this whole process a little more objective in identifying
what the dollar cost is for these things and how that's changed over time.
So that's just a comment.
And we have all that information.
We can certainly include that in the agenda information sheet as well.
Concluding items, any other items?
I'd like to formally thank the Denton Energy Center for hosting us on the tour.
It was very enlightening.
It's a great asset for the taxpayers of the City of Denton, as we have seen.
And it's -- I think -- I don't know what the appropriate forum would be to do this or how
to do it, but I think the City could justifiably crow a little bit about the beneficial effect
that the Denton Energy Center has had for the ratepayers in Denton and the taxpayers
in Denton, due to four days in August, four hot days in August, changed the whole budget
complexion here.
It's an important thing.
People are going to continue to move into North Texas.
Last time I looked, I see it all the time.
They're going to continue to want to be cool when the August afternoon is 100 degrees.
And because the City of Denton has the ability to generate power during those high peak times,
that's an important asset for the City.
Yes, it is.
Any other items?
All right.
Do we have a motion to adjourn?
So so moved.
All right.
Second.
We're adjourned.