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 >> Okay, it's 9 o'clock.

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 We do have a quorum, so we'll call the Denton Public Utilities Board

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 of Monday, January 27th, 2020 to order.

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 The first -- oh, we're going to have a change in the agenda.

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 We're going to move the closed meeting to the end of the agenda.

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 It will allow for the staff that doesn't need to be here to leave.

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 So the first item is receive a report and hold a discussion

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 and give staff direction regarding the pay as you go prepaid metering program.

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 Oh, there you are.

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 >> Good morning.

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 I'm Krista Foster with customer service, Madam Chair, board members.

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 Thank you for allowing me to be in this morning.

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 This work -- some of you will be a little bit of a recap.

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 This is a presentation we brought in August and then we're taken from the council agenda.

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 So I'm coming back in to bring in some updates.

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 So all we're doing is looking at the pay as you go prepaid metering program.

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 A basic overview of the program is it is open to all customers with electric service and an AMI meter.

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 We require a $50 service prepayment that just pays for their first several days of service.

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 When they start the program, they can certainly -- customers can pay more if they choose to do so at that time.

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 The highlights of benefits for the customer are there are no deposits.

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 There are no late fees or interest.

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 We have no delinquency fees.

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 So if a customer is interrupted, they're restored for simply their outstanding balance,

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 whatever they went into the negative, plus a $25 prepayment to ensure that their service isn't scheduled

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 for interruption within the next several days after that.

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 We also offer a debt recovery portion.

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 So if a customer does have outstanding previous debt with the city, they can pay a portion of that debt

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 and we can place the rest into an account like what you see on the screenshot, the unpaid balance of $44.

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 That would be a debt recovery amount.

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 So when a customer makes their payment, 25% of the payment they make goes to help pay that outstanding balance.

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 So it allows the customer a little more flexibility in taking care of past due balances without the financial burden being all at once.

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 >> Can we -- excuse me, can we turn off the lights right in front of the screen or not?

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 >> Does that make it a little bit better?

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 >> That's better.

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 >> Yeah, and any of the screenshots that you see are actual pieces of information

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 like the customer would be able to see as they're on the program.

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 So what happens is each day the customer will receive a deduction from their prepaid balance

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 to reflect their actual electric cost and the prorated -- not prorated, but the spread out cost

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 of all of their set services and their most recent water consumption.

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 And then they also receive usage and balance alerts.

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 I'm also a customer for our prepaid program.

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 Every morning at 10 a.m. I receive a push alert on my phone that shows me my current balance

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 in my prepaid account.

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 I can click on it, go in and see more detail about any of those transactions.

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 Benefits for the customer is if that customer has a deposit on file, we are going to apply

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 that to any balances that they may have and/or prepayment toward their pay as you go service.

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 If the customer is scheduled to pay a deposit or has been interrupted and would require additional deposit,

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 we would not require that as they move into the pay as you go program.

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 It helps them to manage some of that debt accrual so that they're not always paying in arrears.

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 You're now caught up.

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 You have no outstanding balances and you're always paying forward.

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 So without the late and delinquent fees, it allows all of the funds that that customer is paying

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 to actually be toward the cost of their services.

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 And it helps them with increased conservation awareness.

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 When you can see each day the dollar impact of your electrical usage,

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 it helps you be able to manage those costs more effectively.

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 For the city, it decreases our financial burden to our customers

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 by allowing the removal of those deposits.

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 And it helps the customers get out of debt while not helping the city to accrue greater amounts of debt.

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 So it helps us to control debt growth while allowing the customers to be debt free.

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 So we have two primary customer bases.

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 The first is customers who are needing financial flexibility.

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 The customer may be on a set income.

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 They may have inconsistent paydates.

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 They may need to just be able to pay small amounts more frequently than a one time a month large payment.

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 The second are people who are worried about consumption of electric usage.

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 They want greater control over how they're using their electricity and they're wanting to do things with conservation in mind.

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 So as an example for a customer who needs a little more financial flexibility, an actual customer who was being disconnected for past due balances,

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 in order for that customer to have restored, it would have been almost $700.

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 The customer still would have had current charges that would have been due within the next month.

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 And they still have unbilled consumption that would have been billing before the next payments were due.

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 In order to get that customer on in a much more cost effective manner,

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 that customer is able to move to prepay for a payment of $50.

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 The $50 payment will give them service for about three to five days,

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 which if necessary gives the customer time to come up with additional funds to be able to keep moving forward.

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 They had a deposit that we were able to apply to their outstanding balance and the remaining portion of their bill could be placed in debt recovery.

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 So instead of a $700 outstanding balance that would have to be paid in order to restore, that customer could restore for as little as $50.

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 For our consumption conscious customers, you're actually going to be able to see charts that give you your actual daily electric cost with the high and low temperature for the day.

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 So it helps you to better forecast what your costs may be.

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 It helps you to better see changes that you've made today.

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 How does that impact my bill tomorrow?

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 So it gives more realistic meaning to what you're doing in your home.

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 So you guys will have a little bit of a benefit because I was here with July 1st results and now we can see what's happened as of January 1st.

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 As of January 1st, we have 563 customers.

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 We have been able to take for those customers in place $117,000 into debt recovery and have already regained 66% of that at $77,000.

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 For customers who have refunded deposits, we've refunded $84,000 in deposits and not required $147,000 in either new or additional deposits for those customers.

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 The average customer at 70% of our customers are debt free in less than 60 days, so it helps them to be able to get ahead.

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 When we came in July, the difference of what we've seen since July, we've added 205 customers to the program.

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 We've added $46,000 to that total of debt, but we've collected $48,000 of the outstanding debt that's been in recovery.

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 And just since July 1st, between refunded and deposits not required,

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 we've saved customers $113,000 in deposits without increasing risk to the city.

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 What we have going on is we have the postpaid electric usage monitoring.

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 I know when I was here in August, I brought some basic information about that.

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 We were still doing some test piloting.

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 That has been concluded.

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 We now have 98 customers who are on a postpaid account that have set up with the My Usage so they can log in.

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 And daily, they can see their electric consumption with the high and low temperatures.

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 They only see that in a kilowatt hours because they are not billed in that program.

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 So it's a little less impactful than being able to see it in a dollar amount.

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 But it's still very useful information for those customers who prefer to stay in a postpaid environment.

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 We are moving toward having a full public push later this spring.

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 We also are still finishing up the testing on the Pay Near Me program.

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 Pay Near Me is a partnership that we have so that a customer can go into their prepaid account,

104
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 look for local area businesses like a CVS or a 7-Eleven,

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 where they can make a cash payment that will post real time to their Pay As You Go account.

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 So if they need to make a payment on the weekend, in the middle of the night,

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 maybe it's a college kid that realized, I'm going to be short, hey mom, who's in New York.

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 Mom can go to that same CVS or Walgreens or whatever in New York and post that payment real time to the account.

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 Then finally, we're looking at creating an educational video library to help customers be able to see some of the changes

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 and see how things work within the program so that they can take better control of their account.

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 We're still working on those right now.

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 We've created a couple of walk-through paper guides that we have on our website to allow customers that information.

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 And with that, I'll take any questions.

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 >> Questions?

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 >> I'm assuming that your customer service representatives will be trained in all this and be able to explain it to--

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 >> Yes, they already are and have been.

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 >> Okay, okay.

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 >> Yeah.

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 >> If I can make an observation, in this morning's newspaper, Denton Record Chronicle, there's a letter to the editor.

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 I don't know if anybody's seen it.

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 This person was upset because he had to mail his DME bill payment to Dallas.

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 So I just tell you this because I think the educational aspect of this will be very valuable

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 because there's still folks who think that they have to mail it in and it goes through Dallas

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 and then why doesn't it just go to Denton?

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 I mean, it's really silly, but this sort of thing will dispel a lot of this misinformation.

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 >> Yeah. We will work on continuing with that.

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 I think right now, 35-- more than 35% of our customers are actually on electronic billing,

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 but we do still have a lot of customers who resort back to that paper.

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 >> Thanks.

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 >> What's the relationship between the electric bill and the water bill?

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 >> So currently, we allow AMI-- we have AMI meters for the electric services,

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 but water meters are still read manually once a month.

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 So we can't give you an update on your daily water usage unless we had somebody physically read your meter every day.

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 So the water usage, what happens is we look at it today and when we get your read

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 and see what you used last month, we set your daily average for the next month based on that

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 and charge you as of 30 days.

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 So we do at the end of a month, we do what's called reconciliation.

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 And in reconciliation, I'll actually show you a little bit about that.

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 With reconciliation, we actually true up the account.

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 So your solid waste, your drainage, your waste water, those are set fees.

141
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 So in order to do your proration for each day, we say, "Oh, your next month of service is going to cost X dollars."

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 We divide it by 30 and that's what you're charged each day.

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 At the end of the month, if that billing cycle was only 28 days, you overpaid.

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 If that billing cycle was 32 days, you underpaid.

145
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 If your water consumption, you used a little less or a little more water,

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 then we have to kind of balance that out and we'll true that up.

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 If the cost of your reconciliation is greater than $10, then we're going to give you a call

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 and give you an option to either have it deduct from your balance or we'll place that into debt recovery

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 so you can just pay it out through the next month.

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 >> But that's part-- the $50 prepayment is-- goes towards water as well.

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 >> Correct, correct.

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 So each day, as you can see over here, the miscellaneous charges,

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 miscellaneous charges will generally show you what your prorated is and it's the same every single day.

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 When we do a reconciliation-- oh, when we do--

155
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 >> You need to get closer to the mic.

156
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 >> Sorry about that.

157
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 When we do the reconciliation, the miscellaneous charges for that day will increase or decrease slightly,

158
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 but the miscellaneous charges cover all of those set fees and your water service.

159
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 >> Okay.

160
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 >> Charlie.

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 >> What's the cost of this program?

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 Briefly, I know it's--

163
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 >> Sure.

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 >> You're talking about the cost of it to the city.

165
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 >> What does the city spend on?

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 >> The-- actually, the facility fee for being on the Pay As You Go program is about $7.35 a month higher,

167
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 which covers the cost of their enrollment fee to the program as well as the increased levels

168
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 of communication for the program.

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 >> So there's a $7.50 additional charge to the customer to participate.

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 >> It's part of the regular--

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 >> Does that cover the city's cost of implementing this program?

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 >> It does.

173
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 >> Thank you.

174
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 >> It does.

175
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 >> Any questions?

176
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 All right.

177
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 Thank you.

178
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 >> You're welcome.

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 Thank you.

180
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 >> And I think I saw Phil did make it.

181
00:14:03,940 --> 00:14:04,820
 Okay. All right.

182
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 So our second item is to receive a report and hold a discussion

183
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 and give staff direction regarding updating the existing Denton Municipal Electricity Energy

184
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 Risk Management Policy.

185
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 >> Is this closed session?

186
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 >> No.

187
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 >> Okay.

188
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 We'll hold the report session.

189
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 >> Good morning.

190
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 My name is Philip DePastina and I'm a risk control analyst at DME.

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 I'm here to provide an update on our energy risk management policy.

192
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 Just by way of background, the energy risk management policy is the set of internal rules

193
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 that DME uses to manage the acquisition and manage the risk

194
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 that go with buying energy for our retail customers.

195
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 It was last updated in May of 2019 and our current risk policy requires that we come annually

196
00:15:17,140 --> 00:15:26,700
 in January to review and provide updates to the policy for the PUB and council.

197
00:15:26,700 --> 00:15:32,060
 And just for your information, since it was last updated in May,

198
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 we've hired an outside consultant which is Deloitte to provide feedback and review our policy

199
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 and some of the comments that are proposed recommendations

200
00:15:45,660 --> 00:15:50,540
 that we're making will be reflected in that.

201
00:15:50,540 --> 00:15:58,180
 The main change in this version of the risk policy is the incorporation of a hedge plan.

202
00:15:58,180 --> 00:16:04,180
 The last version required that the EMO develop a hedge plan.

203
00:16:04,180 --> 00:16:11,900
 And since May, they have and they presented it to the risk committee in September

204
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 and they approved it and we've added a summary of that plan to this policy in Appendix F.

205
00:16:19,620 --> 00:16:27,340
 And going along with that, we've made some changes to the energy transaction limit tables

206
00:16:27,340 --> 00:16:30,700
 in Appendix B to reflect those changes.

207
00:16:30,700 --> 00:16:40,100
 A few other changes we've made to this risk policy is we've added a list of key risks

208
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 or key objectives in Section 1.2.

209
00:16:44,300 --> 00:16:49,540
 We've proposed some greater flexibility in scheduling meetings

210
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 and providing a report to the council.

211
00:16:55,260 --> 00:16:59,300
 In the current version of the risk policy, there's a requirement

212
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 that an outside consultant provide a quarterly benchmark analysis of the EMO and their activities.

213
00:17:08,420 --> 00:17:17,220
 And Deloitte said this is far more frequent than their clients or--

214
00:17:17,220 --> 00:17:25,900
 than they usually do with their clients and they recommended a health check every three to five years

215
00:17:25,900 --> 00:17:30,820
 as being a little bit more appropriate.

216
00:17:30,820 --> 00:17:39,700
 We've updated the list of responsibilities for the three groups that work together as the EMO.

217
00:17:39,700 --> 00:17:46,340
 They provide checks and balances to each other and we've updated the list of their responsibilities

218
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 and the-- clarified the supervisory responsibility for each group.

219
00:17:52,400 --> 00:17:58,100
 We've made some clarifications to how these three groups interact with each other to document

220
00:17:58,100 --> 00:18:04,340
 and record the energy transactions that we execute.

221
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 We've updated the credit limit section to reflect our current practices.

222
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 We've updated the reports and the organizational-- org chart to reflect current job titles

223
00:18:23,420 --> 00:18:26,860
 and operating structure and reporting structure.

224
00:18:26,860 --> 00:18:35,300
 And finally, we've got in Appendix A, a list of the risks that the EMO is trying to manage.

225
00:18:35,300 --> 00:18:40,220
 And to that list, we've added deck outage risk.

226
00:18:40,220 --> 00:18:47,500
 And I believe later today, you'll receive a report on some preventive maintenance programs we have

227
00:18:47,500 --> 00:18:52,460
 to try to better manage that outage risk.

228
00:18:52,460 --> 00:19:00,220
 We've added some language talking about the risk that goes with renewable energy

229
00:19:00,220 --> 00:19:09,600
 and the uncertainty in when it actually gets delivered as well as the impact on the ECA account

230
00:19:09,600 --> 00:19:16,860
 of changes in market prices and the seasonality of DME load

231
00:19:16,860 --> 00:19:22,820
 and renewables and resources delivery patterns.

232
00:19:22,820 --> 00:19:28,580
 Now with that, we-- in the package that I've-- we provided you today is a red line

233
00:19:28,580 --> 00:19:35,060
 of all the changes no matter how minute we've made to the risk policy and I'd be happy to go

234
00:19:35,060 --> 00:19:42,500
 into any of those or answer questions you have or receive any feedback you might have for us today.

235
00:19:42,500 --> 00:19:45,900
 >> The light keeps coming on.

236
00:19:45,900 --> 00:19:50,340
 Could you check and make sure that the mic is active?

237
00:19:50,340 --> 00:19:55,140
 >> Is there a button?

238
00:19:55,140 --> 00:19:57,460
 >> Okay. No?

239
00:19:57,460 --> 00:19:58,020
 >> No.

240
00:19:58,020 --> 00:19:58,580
 >> Still on.

241
00:19:58,580 --> 00:20:01,260
 Okay. Questions?

242
00:20:01,260 --> 00:20:06,700
 Yes, I have a question about the frequency of doing a health-- economic health check.

243
00:20:06,700 --> 00:20:14,900
 I think you said Deloitte recommended you extend that to a period of 3 to 5 years or review.

244
00:20:14,900 --> 00:20:20,780
 It seems to me that the energy markets change pretty quickly

245
00:20:20,780 --> 00:20:25,620
 and a lot can happen in even 2 years.

246
00:20:25,620 --> 00:20:28,500
 Did you have any back and forth about that frequency?

247
00:20:28,500 --> 00:20:33,540
 I mean if we wait 5 years to have another look at this,

248
00:20:33,540 --> 00:20:40,900
 the whole world can be different significantly than it was 5 years ago.

249
00:20:40,900 --> 00:20:42,540
 >> Good question.

250
00:20:42,540 --> 00:20:50,380
 We actually generate reports every day and the kind of health check they're talking

251
00:20:50,380 --> 00:20:57,700
 about is reassessing whether the way we measure our risk is still appropriate.

252
00:20:57,700 --> 00:21:05,860
 The way we-- the kinds of risks we have and how we're managing them doesn't change every day.

253
00:21:05,860 --> 00:21:10,500
 It's the kind of absolute market impact of those.

254
00:21:10,500 --> 00:21:15,900
 And so, they say that most of their clients have them come in

255
00:21:15,900 --> 00:21:22,700
 and review the overall framework they're using about every 3 to 5 years.

256
00:21:22,700 --> 00:21:29,460
 >> So, it's the overall risk management plan not the day-to-day or quarterly economic?

257
00:21:29,460 --> 00:21:31,180
 >> That's correct.

258
00:21:31,180 --> 00:21:32,380
 >> I have another question.

259
00:21:32,380 --> 00:21:39,540
 Can you give us an example of some kind of a procedural violation that was reported

260
00:21:39,540 --> 00:21:43,860
 by the middle office each quarter?

261
00:21:43,860 --> 00:21:45,380
 Are there any?

262
00:21:45,380 --> 00:21:48,860
 I mean there's language in there that talks about violating procedure.

263
00:21:48,860 --> 00:21:50,020
 Does that happen?

264
00:21:50,020 --> 00:21:53,860
 What's an example of that instance?

265
00:21:53,860 --> 00:22:02,220
 >> An example would be one of the requirements is that the people

266
00:22:02,220 --> 00:22:10,100
 that execute trades report them by 5 o'clock on the day they've executed them.

267
00:22:10,100 --> 00:22:19,980
 And we've had a few times when they've done it late in the day and they haven't notified me

268
00:22:19,980 --> 00:22:23,500
 until the next morning.

269
00:22:23,500 --> 00:22:32,740
 That's about the only violations that I've seen in the 5 years that we've been doing this program.

270
00:22:32,740 --> 00:22:38,140
 >> And it also mentions-- discusses disciplinary action.

271
00:22:38,140 --> 00:22:42,540
 Was there any disciplinary action taken in 2019?

272
00:22:42,540 --> 00:22:44,060
 >> No.

273
00:22:44,060 --> 00:22:49,660
 >> Another question.

274
00:22:49,660 --> 00:22:58,060
 Can you give me an example of an actual stress test that was used in 2019?

275
00:22:58,060 --> 00:23:10,980
 Stress tests are modeling our-- taking our models and putting extreme assumptions on them.

276
00:23:10,980 --> 00:23:20,580
 So to answer the question of what would the rate impact be if natural gas prices tripled

277
00:23:20,580 --> 00:23:31,460
 or if the Denton Energy Center broke and wasn't able to run during July and August of the year.

278
00:23:31,460 --> 00:23:39,780
 So those are the kind of stress tests we do just to see if things went really bad,

279
00:23:39,780 --> 00:23:46,460
 how bad would they go and develop a plan for how we'd mitigate those risks.

280
00:23:46,460 --> 00:23:51,540
 Not that anything did happen.

281
00:23:51,540 --> 00:24:01,300
 >> I'm curious who is in-- who originates these sequence series of events, these what if scenarios?

282
00:24:01,300 --> 00:24:02,500
 How often does that happen?

283
00:24:02,500 --> 00:24:10,300
 How often do you have people conceiving of situations that may develop?

284
00:24:10,300 --> 00:24:10,780
 Yes.

285
00:24:10,780 --> 00:24:11,460
 >> Good morning.

286
00:24:11,460 --> 00:24:13,460
 Terry Nolte, NEME.

287
00:24:13,460 --> 00:24:18,980
 To answer your question, we-- every year when we do our budgets,

288
00:24:18,980 --> 00:24:23,140
 we run a number of scenarios looking at all the variables that we have.

289
00:24:23,140 --> 00:24:31,060
 So that would be high and low gas price cases, high and low electric price cases,

290
00:24:31,060 --> 00:24:36,540
 outage rate analysis to see what the impact to the portfolio might be

291
00:24:36,540 --> 00:24:42,300
 if we had forced outages of the deck at inconvenient times.

292
00:24:42,300 --> 00:24:46,980
 Those are run annually as part of the budget process.

293
00:24:46,980 --> 00:24:52,820
 We do update them and run them periodically just within the EMO.

294
00:24:52,820 --> 00:25:00,580
 It's not something that we normally share with risk management with the middle office

295
00:25:00,580 --> 00:25:02,500
 but it can be done at any time.

296
00:25:02,500 --> 00:25:10,580
 The risk committee has the authority to request it at any time and in the quarterly reports

297
00:25:10,580 --> 00:25:15,700
 with the risk committee, we do keep them up to date on changes in market conditions

298
00:25:15,700 --> 00:25:20,260
 and we would, if we saw a big change in a market parameter,

299
00:25:20,260 --> 00:25:24,260
 provide that analysis to the risk committee at that time.

300
00:25:24,260 --> 00:25:28,780
 We also have ongoing the work with Deloitte.

301
00:25:28,780 --> 00:25:32,940
 They are currently assessing, completing an assessment

302
00:25:32,940 --> 00:25:43,220
 of the last actually the calendar fiscal year '17-'18 and the comprehensively looking

303
00:25:43,220 --> 00:25:52,300
 at how we manage the EMO, whether we comply with every risk policy that we have

304
00:25:52,300 --> 00:25:58,300
 and so we are doing these kind of health checks and risk assessments periodically.

305
00:25:58,300 --> 00:26:03,740
 It's just a part of the business that we do on a day-to-day basis.

306
00:26:03,740 --> 00:26:06,460
 >> So I think I heard you say there's probably a dozen

307
00:26:06,460 --> 00:26:14,460
 or so different stress tests that you run annually, maybe in that neighborhood.

308
00:26:14,460 --> 00:26:19,020
 >> Well, we run, I think the number of variables that we have

309
00:26:19,020 --> 00:26:23,700
 in our equation is 75 or 72 variables.

310
00:26:23,700 --> 00:26:29,300
 So we'll run various stress tests on those.

311
00:26:29,300 --> 00:26:36,460
 Again, during the budgeting process, we're just coming on up to that budgeting process now.

312
00:26:36,460 --> 00:26:41,220
 You recall a couple weeks ago when we were before you, we had an item

313
00:26:41,220 --> 00:26:43,740
 which was an advanced forecasting model.

314
00:26:43,740 --> 00:26:48,900
 That model will give us the ability to do these stress tests in real time

315
00:26:48,900 --> 00:26:54,740
 and it will run automatically every day so that we can see what the distribution

316
00:26:54,740 --> 00:27:00,260
 of potential outcomes would be during these market upset conditions.

317
00:27:00,260 --> 00:27:04,220
 >> Charlie, did you have some questions?

318
00:27:04,220 --> 00:27:12,460
 >> I do. One little one on B3, it looks like you talk about consumer risk tolerances

319
00:27:12,460 --> 00:27:18,820
 and in the policy it says a consumer risk tolerance in excess of 1% per kilowatt hour outside

320
00:27:18,820 --> 00:27:20,660
 the 12-month rolling average.

321
00:27:20,660 --> 00:27:23,580
 I'm not sure how one measures a tolerance.

322
00:27:23,580 --> 00:27:28,700
 I'm wondering if that's a rate impact or assumed rate impact, but not a question,

323
00:27:28,700 --> 00:27:33,140
 just a note for some time.

324
00:27:33,140 --> 00:27:42,180
 And then my question is if you go to B51, the transaction limits,

325
00:27:42,180 --> 00:27:47,620
 you've got the city manager with a limit of greater than three years.

326
00:27:47,620 --> 00:27:52,900
 Does that mean that he can't engage in a hedge transaction less than three years

327
00:27:52,900 --> 00:27:58,940
 or is that a typo?

328
00:27:58,940 --> 00:28:01,380
 >> That's the length of the--

329
00:28:01,380 --> 00:28:06,180
 >> Yeah, everyone else is up to a month, up to a week, up to a year, up to three years

330
00:28:06,180 --> 00:28:12,820
 and then the city manager is-- his limit is greater than three years of term of a hedge.

331
00:28:12,820 --> 00:28:16,140
 >> Okay. I think that might be a typo.

332
00:28:16,140 --> 00:28:16,500
 >> Okay.

333
00:28:16,500 --> 00:28:17,220
 >> I'll confirm that.

334
00:28:17,220 --> 00:28:23,580
 >> That just seems odd to me that he would have to hedge for a term at least three years.

335
00:28:23,580 --> 00:28:26,420
 >> I believe it's for more than--

336
00:28:26,420 --> 00:28:27,780
 >> Not more than three years.

337
00:28:27,780 --> 00:28:34,340
 >> Yes. If it's more than three years, we'd have to go to the city manager for approval.

338
00:28:34,340 --> 00:28:39,420
 That's what it's intended to say.

339
00:28:39,420 --> 00:28:45,420
 >> So, it shows no limit for the council and then it shows greater

340
00:28:45,420 --> 00:28:48,780
 than three limit-- three years for the city manager.

341
00:28:48,780 --> 00:28:53,780
 So, it seems like a typo to me or you wouldn't have a limit that he has

342
00:28:53,780 --> 00:28:57,620
 to hedge at least a certain length if he's in the supervisor.

343
00:28:57,620 --> 00:28:58,500
 So, that seems weird.

344
00:28:58,500 --> 00:28:59,980
 >> We'll clarify that.

345
00:28:59,980 --> 00:29:03,860
 >> The other question I had was on the volume limits.

346
00:29:03,860 --> 00:29:13,780
 I'm not sure I know exactly what they mean but if we're talking about 30 million megawatt hours

347
00:29:13,780 --> 00:29:22,540
 for the city manager and you're assuming let's grab a price of $20 per megawatt hour,

348
00:29:22,540 --> 00:29:27,340
 would that be-- he would be allowed 30 million times 20,

349
00:29:27,340 --> 00:29:33,940
 is that $600 million worth of notional principle that he could?

350
00:29:33,940 --> 00:29:36,500
 That seems like an awful lot of--

351
00:29:36,500 --> 00:29:41,940
 >> It appears that you did your reading.

352
00:29:41,940 --> 00:29:45,180
 Sorry, I'll never do it again.

353
00:29:45,180 --> 00:29:49,660
 >> No, it's a great question actually and we put the volume limits in it.

354
00:29:49,660 --> 00:29:53,860
 The volume limits were not in the plan prior to this year.

355
00:29:53,860 --> 00:29:54,340
 >> Okay.

356
00:29:54,340 --> 00:30:02,100
 >> And the issue there is without putting a volume limit for each level of authority,

357
00:30:02,100 --> 00:30:07,020
 there's effectively an open-ended amount of volume that could be done.

358
00:30:07,020 --> 00:30:10,700
 So, the reason why the numbers are-- appear to be high, you have to remember

359
00:30:10,700 --> 00:30:16,900
 that we're managing the portfolio with various-- we call them trade books.

360
00:30:16,900 --> 00:30:23,140
 So, we're buying the load from the market in the forward market, so three years out.

361
00:30:23,140 --> 00:30:31,100
 We're also selling deck and selling renewable assets into the market on a three-year basis.

362
00:30:31,100 --> 00:30:38,460
 So, the numbers are actually reflective of the fact that within the authority limits,

363
00:30:38,460 --> 00:30:43,460
 there may be a buy and a sell multiple times of that same volume.

364
00:30:43,460 --> 00:30:52,060
 And so, notional value, you're correct in your calculation that $20 times 60 million,

365
00:30:52,060 --> 00:30:55,700
 I think that's what you said, 30 million.

366
00:30:55,700 --> 00:30:58,380
 >> 30 million times 20 was--

367
00:30:58,380 --> 00:31:03,620
 >> Yeah. So, that is-- your analysis is correct but you have to remember that--

368
00:31:03,620 --> 00:31:05,820
 >> These are three-year and five-year and 10-year agreements.

369
00:31:05,820 --> 00:31:07,580
 >> Correct and they're buy and sell.

370
00:31:07,580 --> 00:31:15,140
 >> So, the buy and the sell would offset in terms of the risk position that we would be in.

371
00:31:15,140 --> 00:31:22,700
 >> I just-- I would-- would have a little concern if you've got market operations manager

372
00:31:22,700 --> 00:31:31,620
 and I don't know who that person is but 6 million, those numbers get enormous

373
00:31:31,620 --> 00:31:36,700
 if we had a-- I assume what we're trying to do is prevent a rogue trader from coming

374
00:31:36,700 --> 00:31:39,780
 and making speculative positions or doing something he

375
00:31:39,780 --> 00:31:43,700
 or she shouldn't be doing within the scope of their work.

376
00:31:43,700 --> 00:31:49,020
 Those seem like awfully big numbers relative to the size of the city's operation.

377
00:31:49,020 --> 00:31:50,580
 I understand.

378
00:31:50,580 --> 00:31:55,980
 >> Yeah. The market operations manager is the primary person that is doing--

379
00:31:55,980 --> 00:31:57,980
 [ Inaudible Remark ]

380
00:31:57,980 --> 00:32:02,500
 So, they need to have a significantly high enough level.

381
00:32:02,500 --> 00:32:06,920
 The volume limits are here just for the purpose that you've mentioned.

382
00:32:06,920 --> 00:32:10,260
 We don't want people to be-- we call churning trades.

383
00:32:10,260 --> 00:32:17,780
 So, you sell a position in the morning and you buy it back in the afternoon

384
00:32:17,780 --> 00:32:23,580
 and you generate a positive income or a gain in that trade

385
00:32:23,580 --> 00:32:26,500
 and the next day you do the same thing and you have a loss

386
00:32:26,500 --> 00:32:29,520
 and the next day you do the same thing and you have a gain.

387
00:32:29,520 --> 00:32:31,940
 We're not in the business of speculating.

388
00:32:31,940 --> 00:32:34,980
 We're in the business of hedging and managing risk.

389
00:32:34,980 --> 00:32:41,860
 So, that is exactly why the volume limits are put in there and they were calculated based

390
00:32:41,860 --> 00:32:52,040
 upon our projected level of activity, trading activity in the hedge plan with a bit

391
00:32:52,040 --> 00:32:57,220
 of a safety margin because as you'll see or if you read through the hedge plan,

392
00:32:57,220 --> 00:33:03,780
 you saw there was these optimization trades as well that could increase the volumes

393
00:33:03,780 --> 00:33:06,500
 for the benefit of rate payers.

394
00:33:06,500 --> 00:33:15,900
 >> For the same-- I'm not trying to be adversarial, I'm just trying to raise concerns.

395
00:33:15,900 --> 00:33:19,780
 On the natural gas side, those numbers look even larger in terms

396
00:33:19,780 --> 00:33:23,140
 of the notional principle of the hedge.

397
00:33:23,140 --> 00:33:25,140
 >> And that's because of the term.

398
00:33:25,140 --> 00:33:26,220
 >> It's a longer term.

399
00:33:26,220 --> 00:33:29,620
 >> Long term gas hedge is a lot of volume.

400
00:33:29,620 --> 00:33:36,780
 >> Okay. I was seeing notional principles of like 450 million which, again,

401
00:33:36,780 --> 00:33:39,980
 I realized that reversing trades--

402
00:33:39,980 --> 00:33:46,500
 >> Yeah, you might be doing a 10-year transaction or something to get to those levels.

403
00:33:46,500 --> 00:33:49,580
 >> And I think this one may be for you as well.

404
00:33:49,580 --> 00:33:56,100
 I noticed on the work charts that it looks like everything kind of eventually runs

405
00:33:56,100 --> 00:34:04,340
 at the city manager level, the front office, the back office and the mid office all have the city manager

406
00:34:04,340 --> 00:34:11,140
 as being the ultimate stop for that or is it manager of DMA?

407
00:34:11,140 --> 00:34:12,660
 >> Well, I mean our structure is--

408
00:34:12,660 --> 00:34:17,100
 >> I'm sorry, DMA general manager is where all three of those.

409
00:34:17,100 --> 00:34:17,780
 >> Yeah, so that is--

410
00:34:17,780 --> 00:34:24,060
 >> Have you considered having another stop for that like the city manager or some other

411
00:34:24,060 --> 00:34:29,140
 if the middle office or the back office had a concern with something the front office was doing,

412
00:34:29,140 --> 00:34:37,540
 the highest limits go to the DME general manager and that's potentially problematic.

413
00:34:37,540 --> 00:34:39,100
 Is that you?

414
00:34:39,100 --> 00:34:39,500
 >> No.

415
00:34:39,500 --> 00:34:40,380
 >> Oh, okay.

416
00:34:40,380 --> 00:34:45,060
 >> Miss-- Tony Puente is the interim general manager.

417
00:34:45,060 --> 00:34:54,660
 The issue here is that because of the-- you know, it's not a vast staff of traders.

418
00:34:54,660 --> 00:35:00,380
 There's only a limited number of folks that are involved in commercial transactions

419
00:35:00,380 --> 00:35:03,100
 on a day-to-day basis in the front office.

420
00:35:03,100 --> 00:35:09,980
 And so because of our organizational structure, the division of responsibilities is back office,

421
00:35:09,980 --> 00:35:12,620
 middle office, front office.

422
00:35:12,620 --> 00:35:19,540
 In a large trading organization, you may have the risk management function reporting

423
00:35:19,540 --> 00:35:27,260
 to a different functional area but ultimately, those positions all report

424
00:35:27,260 --> 00:35:30,540
 up to a CEO or a general manager.

425
00:35:30,540 --> 00:35:37,580
 So it is consistent with what I'd say best practices are for risk management.

426
00:35:37,580 --> 00:35:39,420
 Does that answer your question?

427
00:35:39,420 --> 00:35:41,060
 Okay.

428
00:35:41,060 --> 00:35:45,020
 >> And the internal auditor is also someone that if someone was concerned,

429
00:35:45,020 --> 00:35:49,820
 they could report directly to the city's internal auditor, correct?

430
00:35:49,820 --> 00:35:50,260
 >> Correct.

431
00:35:50,260 --> 00:35:54,820
 And there is a whistleblower policy as well.

432
00:35:54,820 --> 00:35:57,020
 >> And he's also part of the risk management committee, isn't he?

433
00:35:57,020 --> 00:35:57,540
 >> Yes.

434
00:35:57,540 --> 00:35:57,780
 >> Yes.

435
00:35:57,780 --> 00:35:59,100
 >> Official member.

436
00:35:59,100 --> 00:36:00,020
 >> Yes.

437
00:36:00,020 --> 00:36:02,860
 >> I have one question.

438
00:36:02,860 --> 00:36:04,380
 >> Go ahead.

439
00:36:04,380 --> 00:36:16,140
 >> On page 28, carbon cost, have you all run any numbers of what that might,

440
00:36:16,140 --> 00:36:23,780
 what that potential cost might be if carbon costs became reality?

441
00:36:23,780 --> 00:36:27,420
 There's quite a bit of discussion about that now.

442
00:36:27,420 --> 00:36:29,140
 >> We have not.

443
00:36:29,140 --> 00:36:36,700
 It's a little premature, we think, until we see a good paradigm, a good model

444
00:36:36,700 --> 00:36:43,700
 that might be used such as a carbon tax or various other market models.

445
00:36:43,700 --> 00:36:49,460
 It's very difficult for us to put a price on that carbon.

446
00:36:49,460 --> 00:36:56,940
 But certainly, it's in the policy for a reason that we want to be able to look at it when

447
00:36:56,940 --> 00:37:02,180
 and if it becomes a economic factor in the decisions we're making.

448
00:37:02,180 --> 00:37:06,060
 >> Are you familiar with the carbon fee and dividend proposal?

449
00:37:06,060 --> 00:37:07,220
 >> I am not.

450
00:37:07,220 --> 00:37:14,780
 >> Where the, I just wondered how this would fit in with something like this where,

451
00:37:14,780 --> 00:37:22,460
 under that program, which is getting bipartisan scrutiny, believe it or not,

452
00:37:22,460 --> 00:37:33,340
 the money that is collected, the tax, is redistributed through social security to the rate payers

453
00:37:33,340 --> 00:37:41,220
 to enable them to, first of all, pay for any increase in their rate because of this carbon fee

454
00:37:41,220 --> 00:37:48,340
 and also to give them a financial leg up in purchasing renewable energy.

455
00:37:48,340 --> 00:37:54,220
 So I think that that might be something that we would want to look at simply

456
00:37:54,220 --> 00:37:57,900
 because of all the things that have been out there.

457
00:37:57,900 --> 00:38:02,700
 That seems to be the one approach that is getting some traction

458
00:38:02,700 --> 00:38:06,020
 and may end up becoming policy someday.

459
00:38:06,020 --> 00:38:08,940
 The Citizens' Climate Lobby is the main proponent of that.

460
00:38:08,940 --> 00:38:10,060
 >> I'll take a look at that.

461
00:38:10,060 --> 00:38:10,620
 >> Yeah, thanks.

462
00:38:10,620 --> 00:38:12,540
 >> Appreciate that information.

463
00:38:12,540 --> 00:38:18,540
 I have a question about the consumer risk tolerance that's mentioned in the documentation,

464
00:38:18,540 --> 00:38:20,700
 and I'm trying to understand that better.

465
00:38:20,700 --> 00:38:27,260
 As I read it, it's defined as one cent, a change in one cent per kilowatt hour

466
00:38:27,260 --> 00:38:31,600
 over a 12-month rolling window time frame.

467
00:38:31,600 --> 00:38:35,420
 Is that what we're trying to, the whole purpose of all these hedges

468
00:38:35,420 --> 00:38:38,860
 and all this future stuff is to bring stability,

469
00:38:38,860 --> 00:38:41,820
 relative stability to the rate payers, correct?

470
00:38:41,820 --> 00:38:43,020
 >> That is correct.

471
00:38:43,020 --> 00:38:47,820
 >> And is the one cent per kilowatt hour the target we're trying to stay within?

472
00:38:47,820 --> 00:38:54,140
 >> There's actually two trigger levels, and I'm glad to let you speak to it, Phil.

473
00:38:54,140 --> 00:38:58,340
 One is we're trying to manage the ECA account within $5 million.

474
00:38:58,340 --> 00:39:06,140
 So when we look at the rolling 12-month average movement in the ECA account,

475
00:39:06,140 --> 00:39:10,540
 we're trying to manage that within plus or minus $5 million.

476
00:39:10,540 --> 00:39:13,740
 The second one is the one cent.

477
00:39:13,740 --> 00:39:18,740
 And that becomes a trigger that we would go to the risk committee with if we saw changes

478
00:39:18,740 --> 00:39:24,180
 in the market or poorly performing hedges that would result in a one cent.

479
00:39:24,180 --> 00:39:30,980
 So one cent would be little less than a 10% impact on the rate payer.

480
00:39:30,980 --> 00:39:36,660
 >> Other questions?

481
00:39:36,660 --> 00:39:40,940
 All right, thank you.

482
00:39:40,940 --> 00:39:46,820
 As I said earlier, we're going to move the closed session to the end of the meeting.

483
00:39:46,820 --> 00:39:49,060
 We're on to the consent agenda.

484
00:39:49,060 --> 00:39:52,620
 Does any board member wish to pull any-- oh, I'm sorry.

485
00:39:52,620 --> 00:39:57,580
 >> I think we were looking for your direction on that policy as well.

486
00:39:57,580 --> 00:39:59,060
 >> Oh, of course you were.

487
00:39:59,060 --> 00:40:06,340
 Well, I actually-- and I know that Billy Cheek attended a risk management meeting for me

488
00:40:06,340 --> 00:40:10,260
 when I was gone in September.

489
00:40:10,260 --> 00:40:13,740
 So we've both been pretty well informed on this.

490
00:40:13,740 --> 00:40:15,500
 I'm in support of it.

491
00:40:15,500 --> 00:40:16,340
 I--

492
00:40:16,340 --> 00:40:16,820
 >> Yeah, I am too.

493
00:40:16,820 --> 00:40:22,380
 I think staff's done a really good job of looking forward and trying to minimize our risk.

494
00:40:22,380 --> 00:40:25,900
 >> I think people get nervous with the word hedge.

495
00:40:25,900 --> 00:40:29,780
 We're not-- as Mr. Nalti said, we're not in speculation.

496
00:40:29,780 --> 00:40:34,060
 We're looking at our risks and trying to mitigate those through hedging.

497
00:40:34,060 --> 00:40:39,700
 So it's a little bit different than derivatives and hedging.

498
00:40:39,700 --> 00:40:44,100
 >> They're keeping-- this department is keeping their eye on the boards constantly.

499
00:40:44,100 --> 00:40:49,220
 >> Constantly, so other board members?

500
00:40:49,220 --> 00:40:56,860
 >> I'm also impressed with the effort and the-- I got involved in the details but only because--

501
00:40:56,860 --> 00:40:57,180
 >> You should.

502
00:40:57,180 --> 00:40:59,180
 >> -- it's important that I care about it.

503
00:40:59,180 --> 00:41:00,540
 I think they're doing great work.

504
00:41:00,540 --> 00:41:02,900
 >> Yes.

505
00:41:02,900 --> 00:41:05,740
 >> I move we approve this proposed revision.

506
00:41:05,740 --> 00:41:06,740
 >> I'll second that.

507
00:41:06,740 --> 00:41:08,700
 >> Oh, there's no action item.

508
00:41:08,700 --> 00:41:10,380
 They're just giving direction.

509
00:41:10,380 --> 00:41:16,620
 >> We'll be coming back to you in a few weeks to ask for approval.

510
00:41:16,620 --> 00:41:19,500
 We're going to brief the city council tomorrow.

511
00:41:19,500 --> 00:41:26,180
 >> And maybe the one item that wasn't too clear about where the city manager's authority lands.

512
00:41:26,180 --> 00:41:29,340
 >> Right, we'll take a look at that and address that.

513
00:41:29,340 --> 00:41:29,700
 Thank you.

514
00:41:29,700 --> 00:41:31,420
 >> All right, thank you.

515
00:41:31,420 --> 00:41:41,580
 Thank you, Mr. Nalti for-- consent agenda, any board members wish to pull any items of A through F?

516
00:41:41,580 --> 00:41:45,420
 >> I had a quick question on A, I don't know if we need to pull it.

517
00:41:45,420 --> 00:41:47,020
 >> You have to pull it if you have a quick question.

518
00:41:47,020 --> 00:41:48,180
 >> Just a quick question.

519
00:41:48,180 --> 00:41:50,700
 >> No question on item F, the last one.

520
00:41:50,700 --> 00:41:55,620
 >> Okay. All right, so item A first.

521
00:41:55,620 --> 00:42:05,860
 I guess you have to be by the mic, but I was wondering what sort of gas is being extracted, is this the methane flare-off?

522
00:42:05,860 --> 00:42:12,580
 >> This is the landfill gas, so it's methane and other gases that are produced as the waste mass decays.

523
00:42:12,580 --> 00:42:18,700
 That gas is collected by DTE and then it's either run through the engine to generate electricity or flared off if there's excess.

524
00:42:18,700 --> 00:42:21,380
 >> So it's a mix of?

525
00:42:21,380 --> 00:42:26,060
 >> It's mostly methane but then there's oxygen and oxygen, carbon dioxide and other things.

526
00:42:26,060 --> 00:42:31,860
 >> Okay. I was just trying to get my head around what this sort of thing is coming out of the landfill.

527
00:42:31,860 --> 00:42:32,380
 >> Okay.

528
00:42:32,380 --> 00:42:33,020
 >> Thank you.

529
00:42:33,020 --> 00:42:35,580
 >> You're welcome.

530
00:42:35,580 --> 00:42:41,860
 >> I forgot to say we needed to approve items B through E.

531
00:42:41,860 --> 00:42:43,100
 >> I'll move approval.

532
00:42:43,100 --> 00:42:44,180
 Let's check it.

533
00:42:44,180 --> 00:42:45,460
 >> All in favor say aye.

534
00:42:45,460 --> 00:42:46,580
 >> Aye.

535
00:42:46,580 --> 00:42:47,220
 >> Motion carries.

536
00:42:47,220 --> 00:42:50,180
 Okay, now item A, do you wish to move approval?

537
00:42:50,180 --> 00:42:53,100
 >> Yes, I'll move approval of item A.

538
00:42:53,100 --> 00:42:54,340
 >> Second.

539
00:42:54,340 --> 00:42:56,580
 >> Okay. All in favor say aye.

540
00:42:56,580 --> 00:42:57,780
 >> Aye.

541
00:42:57,780 --> 00:42:58,460
 >> That carries.

542
00:42:58,460 --> 00:43:03,740
 Item F. That is also you.

543
00:43:03,740 --> 00:43:07,100
 >> Good morning, Brian Burner, Director of Solid Waste.

544
00:43:07,100 --> 00:43:13,620
 >> This pertains to getting the environmental approvals through the state formally, right?

545
00:43:13,620 --> 00:43:16,780
 >> Correct. This is for our permit modification.

546
00:43:16,780 --> 00:43:22,740
 >> And as I read this, this is really for continuing to hire a legal firm.

547
00:43:22,740 --> 00:43:24,140
 >> Correct.

548
00:43:24,140 --> 00:43:26,620
 >> For their interaction with the state agencies.

549
00:43:26,620 --> 00:43:34,660
 Is there a reason that the technical people that do these revisions can't do the same thing?

550
00:43:34,660 --> 00:43:41,020
 The reason I'm asking is I used to do in a previous life a lot of these permits.

551
00:43:41,020 --> 00:43:41,460
 >> Correct.

552
00:43:41,460 --> 00:43:46,380
 >> And we almost never needed a legal firm to handle the permit.

553
00:43:46,380 --> 00:43:52,340
 As I read what this legal company is going to do is it's going to be the interface

554
00:43:52,340 --> 00:43:55,980
 between the agency and the technical firm.

555
00:43:55,980 --> 00:43:59,220
 Is that true?

556
00:43:59,220 --> 00:44:00,100
 >> That is true.

557
00:44:00,100 --> 00:44:05,900
 And in addition, they are going to be working with the state to respond to comments and really focus

558
00:44:05,900 --> 00:44:10,340
 on the legal aspects of the permit, what's within state law, what's required,

559
00:44:10,340 --> 00:44:15,860
 moving us forward to hopefully getting our permit as we move through this process.

560
00:44:15,860 --> 00:44:22,340
 This is a contract that just recently expired and due to the fact that we're still working

561
00:44:22,340 --> 00:44:29,740
 on getting our permit expansion, all we are actually seeking is an extension of the contract.

562
00:44:29,740 --> 00:44:34,420
 It's not any new services, any new task, any new monetary outlay.

563
00:44:34,420 --> 00:44:38,340
 It's just extending the current task that they're currently --

564
00:44:38,340 --> 00:44:42,700
 or that they were currently contracted to do an additional 18 months.

565
00:44:42,700 --> 00:44:48,740
 >> I guess my question is, so this is a function that the technical --

566
00:44:48,740 --> 00:44:54,780
 whoever you're using to do the technical aspect of the permit, they're not able to do that as well?

567
00:44:54,780 --> 00:44:59,620
 >> It was not tasked within the technical piece of that to do it.

568
00:44:59,620 --> 00:45:05,980
 Normally when a landfill goes out to do like this, you have your technical folks that focus

569
00:45:05,980 --> 00:45:09,940
 on the engineering and then you have your legal team that will focus

570
00:45:09,940 --> 00:45:13,580
 on the legal aspect of the submittal.

571
00:45:13,580 --> 00:45:17,580
 >> And I had a question on this as well.

572
00:45:17,580 --> 00:45:24,540
 Number one, these were the people that were previously under contract to do this work, correct?

573
00:45:24,540 --> 00:45:25,660
 >> Correct.

574
00:45:25,660 --> 00:45:31,540
 >> Okay. Did you go out for bids for any additional work or --

575
00:45:31,540 --> 00:45:32,260
 >> No, we did not.

576
00:45:32,260 --> 00:45:36,660
 This -- all we're doing is looking to extend the existing contract that they have

577
00:45:36,660 --> 00:45:39,780
 to complete the task that are currently within that contract.

578
00:45:39,780 --> 00:45:43,420
 That have not been approached because we're currently entering

579
00:45:43,420 --> 00:45:47,860
 into the public meeting phase of this and that is task three under this contract.

580
00:45:47,860 --> 00:45:51,620
 It's just an additional 18 months for the services.

581
00:45:51,620 --> 00:45:54,300
 >> And was this already in your budget?

582
00:45:54,300 --> 00:45:55,420
 >> Yes.

583
00:45:55,420 --> 00:45:57,060
 >> Okay. Thank you.

584
00:45:57,060 --> 00:46:00,820
 >> Is the public meeting, the TCEQ public meeting?

585
00:46:00,820 --> 00:46:01,340
 >> Correct.

586
00:46:01,340 --> 00:46:03,220
 >> Okay. Do you know when that's going to occur?

587
00:46:03,220 --> 00:46:04,380
 >> We do not know yet.

588
00:46:04,380 --> 00:46:05,900
 We're in discussions with them.

589
00:46:05,900 --> 00:46:07,940
 It will be sometime in the future.

590
00:46:07,940 --> 00:46:09,020
 We don't know how soon yet.

591
00:46:09,020 --> 00:46:10,420
 >> Okay. Thanks.

592
00:46:10,420 --> 00:46:14,260
 >> I guess my only parting comment would be you might consider

593
00:46:14,260 --> 00:46:20,620
 if there's a more cost effective way to use the tax money than pay these folks.

594
00:46:20,620 --> 00:46:28,180
 I saw the rates, $375 an hour down to 280 something an hour.

595
00:46:28,180 --> 00:46:34,260
 There may be some potential savings there for the taxpayers and rate payers

596
00:46:34,260 --> 00:46:38,620
 to get the same thing done if you approach it a little bit different way.

597
00:46:38,620 --> 00:46:40,140
 >> That's my only comment.

598
00:46:40,140 --> 00:46:41,060
 >> Okay.

599
00:46:41,060 --> 00:46:41,980
 >> And just one question.

600
00:46:41,980 --> 00:46:43,380
 I know this firm.

601
00:46:43,380 --> 00:46:45,220
 Who is your ramrod at the firm?

602
00:46:45,220 --> 00:46:46,580
 >> Jeffrey.

603
00:46:46,580 --> 00:46:47,660
 >> Okay.

604
00:46:47,660 --> 00:46:51,220
 >> Okay. Other questions?

605
00:46:51,220 --> 00:46:53,180
 Do we have a motion to approve?

606
00:46:53,180 --> 00:46:57,420
 >> I'll move approval.

607
00:46:57,420 --> 00:46:58,820
 >> Do we have a second?

608
00:46:58,820 --> 00:47:00,100
 >> I'll second.

609
00:47:00,100 --> 00:47:01,620
 >> All in favor say aye.

610
00:47:01,620 --> 00:47:01,860
 >> Aye.

611
00:47:01,860 --> 00:47:02,140
 >> Aye.

612
00:47:02,140 --> 00:47:02,420
 >> Aye.

613
00:47:02,420 --> 00:47:03,100
 >> Opposed?

614
00:47:03,100 --> 00:47:04,580
 >> Opposed.

615
00:47:04,580 --> 00:47:06,540
 >> Thank you.

616
00:47:06,540 --> 00:47:07,460
 >> Thank you.

617
00:47:07,460 --> 00:47:09,820
 >> All right. Items for individual consideration.

618
00:47:09,820 --> 00:47:14,540
 Consider the approval of the minutes of January 13th, 2020.

619
00:47:14,540 --> 00:47:16,580
 Were there any changes?

620
00:47:16,580 --> 00:47:19,700
 >> I will move approval but I also had one typographical.

621
00:47:19,700 --> 00:47:20,180
 >> Okay.

622
00:47:20,180 --> 00:47:21,140
 >> Dementamus.

623
00:47:21,140 --> 00:47:21,860
 >> All right.

624
00:47:21,860 --> 00:47:22,940
 >> Change that I noticed that.

625
00:47:22,940 --> 00:47:26,260
 So I'll move approval with the typo corrected.

626
00:47:26,260 --> 00:47:32,900
 >> I just have an observation that it frequently says in the minutes

627
00:47:32,900 --> 00:47:36,500
 that many questions were asked by the board.

628
00:47:36,500 --> 00:47:41,260
 I wondered in the future if there could be at least some sort

629
00:47:41,260 --> 00:47:49,580
 of substantive description as to what the question was and what the reply was

630
00:47:49,580 --> 00:47:53,820
 and I'm simply basing this on a question that I asked the gentleman last time

631
00:47:53,820 --> 00:47:56,500
 about electric garbage trucks.

632
00:47:56,500 --> 00:47:57,380
 >> Okay.

633
00:47:57,380 --> 00:48:02,540
 >> And his reply was that they were looking at it and I think something like that

634
00:48:02,540 --> 00:48:08,340
 where a commitment is made for future investigation that might come to PUB.

635
00:48:08,340 --> 00:48:12,140
 I think that might be in better detail than minutes.

636
00:48:12,140 --> 00:48:12,620
 >> All right.

637
00:48:12,620 --> 00:48:13,180
 >> Thank you.

638
00:48:13,180 --> 00:48:14,620
 >> Is that possible?

639
00:48:14,620 --> 00:48:19,220
 [ Inaudible Remark ]

640
00:48:19,220 --> 00:48:24,020
 >> So it's pretty much just when they've made a commitment to a question that we've--

641
00:48:24,020 --> 00:48:24,380
 >> Right.

642
00:48:24,380 --> 00:48:27,860
 >> Okay. So it's limited.

643
00:48:27,860 --> 00:48:30,300
 Okay.

644
00:48:30,300 --> 00:48:31,900
 >> I'll continue my motion to approve.

645
00:48:31,900 --> 00:48:32,420
 >> Okay.

646
00:48:32,420 --> 00:48:34,820
 [ Inaudible Remark ]

647
00:48:34,820 --> 00:48:36,020
 >> All in favor say aye.

648
00:48:36,020 --> 00:48:36,540
 >> Aye.

649
00:48:36,540 --> 00:48:37,220
 >> Opposed?

650
00:48:37,220 --> 00:48:43,660
 Okay. Item B, consider recommending adoption of an ordinance.

651
00:48:43,660 --> 00:48:47,820
 I'm just going to make it shorter.

652
00:48:47,820 --> 00:48:52,900
 With Wartzella, North America for the parts and services, the DM&E.

653
00:49:02,420 --> 00:49:11,500
 [ Pause ]

654
00:49:11,500 --> 00:49:12,940
 >> Good morning.

655
00:49:12,940 --> 00:49:14,300
 Terry Nolte, DM&E.

656
00:49:14,300 --> 00:49:20,580
 I'm going to talk to you this morning about the major maintenance efforts that we have

657
00:49:20,580 --> 00:49:25,780
 at the DEC and the cost of parts to support that effort.

658
00:49:25,780 --> 00:49:34,860
 Our objectives in bringing this to you are shown here on this slide but as we know,

659
00:49:34,860 --> 00:49:41,820
 achieving the highest level of availability on the DEC engines is critical.

660
00:49:41,820 --> 00:49:48,580
 It's most critical during those high-priced hours because if we're not running the units during

661
00:49:48,580 --> 00:49:52,220
 those high-priced hours, we're buying from the market at that high price

662
00:49:52,220 --> 00:49:56,460
 without an offsetting revenue stream coming to us.

663
00:49:56,460 --> 00:50:04,740
 Summer readiness is absolutely critical now with low reserve margins in the marketplace.

664
00:50:04,740 --> 00:50:11,380
 We are expecting this summer to have the same level of volatility and price that we've seen

665
00:50:11,380 --> 00:50:16,180
 and without a change in the market design, the continued reliance

666
00:50:16,180 --> 00:50:24,140
 on intermittent renewable resources, primarily wind, are likely to continue to drive prices high

667
00:50:24,140 --> 00:50:29,140
 in certain hours of the peak period in the summer.

668
00:50:29,140 --> 00:50:32,900
 Despite our best efforts, these are mechanical pieces of equipment just

669
00:50:32,900 --> 00:50:36,100
 like the engine in your car.

670
00:50:36,100 --> 00:50:41,500
 They are subject to failure and while we do the best we can to predict that

671
00:50:41,500 --> 00:50:48,780
 and to perform maintenance pursuant to the manufacturer's specifications,

672
00:50:48,780 --> 00:50:52,060
 we'll nonetheless experience forced outages.

673
00:50:52,060 --> 00:51:01,820
 And having these parts on hand will enable us to minimize the duration of those outages.

674
00:51:01,820 --> 00:51:07,700
 Cost is always a concern and one of the reasons why we're bringing this to you today is

675
00:51:07,700 --> 00:51:15,260
 because we believe that purchasing these parts today will ultimately save ratepayers money

676
00:51:15,260 --> 00:51:21,380
 by not having to pay escalation charges in the coming years.

677
00:51:21,380 --> 00:51:27,260
 And with that, I'm going to turn it over to the real expert, Jason Brown, the plant manager.

678
00:51:27,260 --> 00:51:34,260
 >> Good morning, Madam Chair.

679
00:51:34,260 --> 00:51:45,060
 Board. So as Terry stated, we're trying to achieve the highest availability of the facility

680
00:51:45,060 --> 00:51:51,300
 and the way to achieve this is through preventative maintenance and spare parts.

681
00:51:51,300 --> 00:51:55,220
 We're requesting the approval of additional parts as the best solution

682
00:51:55,220 --> 00:52:00,340
 in reducing our outage timeframe during normal routine maintenance

683
00:52:00,340 --> 00:52:03,980
 and also during forced outage scenarios.

684
00:52:03,980 --> 00:52:09,020
 And the next few slides I'll briefly be discussing preventative maintenance schedules,

685
00:52:09,020 --> 00:52:14,900
 parts and the benefits of having these parts.

686
00:52:14,900 --> 00:52:19,980
 So please feel free to ask any questions as we go through this.

687
00:52:19,980 --> 00:52:25,180
 The Denton Energy Center equipment is much like your car engine, just like Terry said.

688
00:52:25,180 --> 00:52:32,220
 It must be maintained routinely as recommended by the manufacturer to operate correctly.

689
00:52:32,220 --> 00:52:36,140
 This is called the preventative maintenance program where preventative predictive

690
00:52:36,140 --> 00:52:39,500
 and corrective maintenance activities occur.

691
00:52:39,500 --> 00:52:47,740
 Many components require routine maintenance to proactively inspect for repair or for wear, sorry.

692
00:52:47,740 --> 00:52:53,820
 Premature failure and critical items must also be rebuilt or replaced.

693
00:52:53,820 --> 00:52:56,620
 The preventative maintenance activities are performed consistent

694
00:52:56,620 --> 00:53:01,820
 with manufacturer's guidelines based on operating hours.

695
00:53:01,820 --> 00:53:08,220
 This chart depicts our current estimate of when these major maintenance items will occur.

696
00:53:08,220 --> 00:53:12,540
 Major maintenance activities require shutdown of the individual units,

697
00:53:12,540 --> 00:53:17,860
 but we want to minimize the length of time that they're unavailable for generation.

698
00:53:17,860 --> 00:53:24,140
 The first major maintenance outages will take place when the units reach 12,000 hours.

699
00:53:24,140 --> 00:53:27,900
 We currently estimate that to happen in 2024.

700
00:53:27,900 --> 00:53:32,860
 However, since the units are dispatched against the aircraft market at 12,000 hours,

701
00:53:32,860 --> 00:53:36,380
 could either be earlier or later than the current projection.

702
00:53:36,380 --> 00:53:44,780
 This slide lists the parts that are currently installed on the engines

703
00:53:44,780 --> 00:53:47,660
 and what we are requesting as swing sets.

704
00:53:47,660 --> 00:53:51,660
 The swing sets that we're requesting you can see are the requested quantities

705
00:53:51,660 --> 00:53:55,020
 over here on the right-hand side of the slide.

706
00:53:55,020 --> 00:53:59,060
 The term swing set recognizes that if the first set of parts are installed,

707
00:53:59,060 --> 00:54:04,460
 the removed parts are sent back to be rebuilt or reconditioned.

708
00:54:04,460 --> 00:54:09,020
 When the reconditioned parts return back to the deck, they're placed into the warehouse

709
00:54:09,020 --> 00:54:12,620
 and then the cycle starts over again once you,

710
00:54:12,620 --> 00:54:18,780
 once the next engine reaches its hour interval for maintenance, maintenance service.

711
00:54:18,780 --> 00:54:23,620
 This swapping out of the components is where the term swing set comes from.

712
00:54:23,620 --> 00:54:26,860
 When we receive these parts, they'll be inspected and placed into a warehouse

713
00:54:26,860 --> 00:54:29,540
 that will be built at the Denton Energy Center.

714
00:54:29,540 --> 00:54:38,580
 The swing set parts will be warrantied for 12 months upon installation or 18 months upon arrival,

715
00:54:38,580 --> 00:54:41,860
 whichever occurs earlier.

716
00:54:41,860 --> 00:54:46,900
 While it's likely that the swing sets will not be in warranty by the time they're installed

717
00:54:46,900 --> 00:54:51,580
 in the first round, the parts that are removed during the overhaul will be sent

718
00:54:51,580 --> 00:54:59,060
 out for refurbishment and come back and thus the warranty will be on the parts for that direction.

719
00:54:59,060 --> 00:55:00,780
 >> Jason, I have a question about that.

720
00:55:00,780 --> 00:55:01,140
 >> Yes, sir.

721
00:55:01,140 --> 00:55:06,220
 >> When you end up with your extra set of parts to take out, will you send those back

722
00:55:06,220 --> 00:55:09,740
 to Wurziller or will you look for a third party refurbishing?

723
00:55:09,740 --> 00:55:12,340
 >> We'll look for a third party for refurbishment.

724
00:55:12,340 --> 00:55:13,740
 >> And what does LT mean?

725
00:55:13,740 --> 00:55:14,820
 Is that low temperature?

726
00:55:14,820 --> 00:55:15,820
 >> Yes, low temperature.

727
00:55:15,820 --> 00:55:21,500
 There's two different cooling systems on each engine, low temperature and high temperature.

728
00:55:21,500 --> 00:55:27,380
 High temperature where all the firing deck is and all the higher temperatures.

729
00:55:27,380 --> 00:55:35,340
 So to be clear, the initial warranty for the Wurziller engines and this project ended

730
00:55:35,340 --> 00:55:42,540
 on in April of 2019, so this has nothing to do really with that warranty period.

731
00:55:42,540 --> 00:55:48,420
 There are still 115 warranty claims remaining from that original warranty period

732
00:55:48,420 --> 00:55:51,900
 that we're still taking care of at this time.

733
00:55:51,900 --> 00:55:57,180
 So as Terry stated, our objective is to make the units available as often as possible

734
00:55:57,180 --> 00:55:59,860
 to generate the most revenue from the market.

735
00:55:59,860 --> 00:56:07,780
 The swing set enables us to reduce the downtime because we have the parts on hand

736
00:56:07,780 --> 00:56:14,420
 and because we can schedule maintenance activities during the lowest prices in the market.

737
00:56:14,420 --> 00:56:19,740
 Also having the parts on hand will minimize downtime in the event of forced outages.

738
00:56:19,740 --> 00:56:25,540
 The other benefits of purchasing the swing sets now are

739
00:56:25,540 --> 00:56:30,900
 that we'll be paying 2019 parts prices instead of the projected 5% increase

740
00:56:30,900 --> 00:56:34,940
 in the coming years with later purchases.

741
00:56:34,940 --> 00:56:40,220
 Parts will be on hand in the event we have unforeseen outages due to premature failure

742
00:56:40,220 --> 00:56:45,220
 and most importantly having the swing sets on site will reduce major overhaul timeframes

743
00:56:45,220 --> 00:56:52,340
 by 20 days as compared to 45 to 65 days without swing sets.

744
00:56:52,340 --> 00:56:58,060
 So in summary, we're proactively preparing for future outages

745
00:56:58,060 --> 00:57:01,740
 that are projected to start in 2024.

746
00:57:01,740 --> 00:57:07,140
 These parts are intended to reduce outage durations to help maximize revenue potential

747
00:57:07,140 --> 00:57:11,540
 and we are requesting approval of soil source purchase major overhaul swing sets

748
00:57:11,540 --> 00:57:20,460
 in the amount of $2,228,970 to where it's all led to be funded

749
00:57:20,460 --> 00:57:28,580
 from the $3.9 million that's remaining in the original revenue bond from the project.

750
00:57:28,580 --> 00:57:31,340
 And then there's a last bullet point there about some turbos.

751
00:57:31,340 --> 00:57:35,540
 As you noticed on a couple slides before, we were planning

752
00:57:35,540 --> 00:57:38,660
 on bringing turbochargers here at the same time.

753
00:57:38,660 --> 00:57:45,460
 They didn't make it through legal, but we'll be bringing that back to you at a later date.

754
00:57:45,460 --> 00:57:46,900
 >> It looks like Mr. Parker has a question.

755
00:57:46,900 --> 00:57:47,100
 No?

756
00:57:47,100 --> 00:57:48,620
 >> No, no questions.

757
00:57:48,620 --> 00:57:49,300
 >> I have just a--

758
00:57:49,300 --> 00:57:50,780
 >> Just a motion.

759
00:57:50,780 --> 00:57:57,380
 >> Why didn't we-- I mean, I'm going to support you need to have those on hand.

760
00:57:57,380 --> 00:57:58,740
 Why didn't we do it originally?

761
00:57:58,740 --> 00:58:03,300
 Is that because we were under warranty and we didn't need to expend the funds yet?

762
00:58:03,300 --> 00:58:11,500
 >> I-- originally, when I got here, there wasn't any real thought on before future.

763
00:58:11,500 --> 00:58:15,580
 When I got here, it was-- we only needed six engines.

764
00:58:15,580 --> 00:58:22,260
 We need 12 engines now, so it was kind of-- you can either go this route or not go this route.

765
00:58:22,260 --> 00:58:22,900
 It's not really--

766
00:58:22,900 --> 00:58:23,580
 >> I'm in support.

767
00:58:23,580 --> 00:58:25,820
 I was just curious why--

768
00:58:25,820 --> 00:58:30,580
 >> It's definitely-- I would have brought it last year except the mindset was we don't need all

769
00:58:30,580 --> 00:58:36,180
 of the engines, so why do this if time frame doesn't really matter with the outage.

770
00:58:36,180 --> 00:58:37,100
 >> Okay.

771
00:58:37,100 --> 00:58:42,580
 >> Now that we're actually seeing what this equipment can do in this market and what it brings

772
00:58:42,580 --> 00:58:45,780
 to the table, I think it's time to bring it and--

773
00:58:45,780 --> 00:58:48,220
 >> Fully in support of it, just curious.

774
00:58:48,220 --> 00:58:52,140
 Okay. Now, do we have-- other questions?

775
00:58:52,140 --> 00:58:55,180
 >> I'll move-- oh, excuse me.

776
00:58:55,180 --> 00:59:02,220
 I think I heard you say 18 months, these two million dollars worth of parts will be spent

777
00:59:02,220 --> 00:59:05,780
 over that 18-month period or they're going to be sitting here for much longer than that?

778
00:59:05,780 --> 00:59:11,020
 >> No, these parts will be sitting here up until 2024.

779
00:59:11,020 --> 00:59:14,380
 I think the part-- the first parts that would come out of this, yeah.

780
00:59:14,380 --> 00:59:17,780
 Let me-- oh, let me back up to that slide.

781
00:59:17,780 --> 00:59:20,900
 >> I saw that list but there was no dollar amounts beside it and so that's--

782
00:59:20,900 --> 00:59:27,340
 >> Correct. So out of the two million dollars, it's swing sets of major parts

783
00:59:27,340 --> 00:59:32,380
 that will be removed from engine over a long duration.

784
00:59:32,380 --> 00:59:40,300
 So in 2024, we're going to be removing charge air coolers and turbos.

785
00:59:40,300 --> 00:59:44,620
 In-- actually in 4,000 hours, we'll be removing pre-chambers.

786
00:59:44,620 --> 00:59:48,260
 So it's not all the parts coming off at one time.

787
00:59:48,260 --> 00:59:52,700
 They're sporadic and really all over the place based on the maintenance of the board.

788
00:59:52,700 --> 00:59:55,220
 >> Yeah, I understand it's a good idea to always keep inventory

789
00:59:55,220 --> 00:59:56,660
 to be able to keep things running.

790
00:59:56,660 --> 00:59:57,860
 I don't understand.

791
00:59:57,860 --> 01:00:02,060
 It's just there was nothing that traced-- I mean, you had the chart that said,

792
01:00:02,060 --> 01:00:06,180
 "Here's the maintenance hours over at 2022."

793
01:00:06,180 --> 01:00:06,700
 >> That one, yeah.

794
01:00:06,700 --> 01:00:08,500
 >> But there's no dollar amount out there beside them.

795
01:00:08,500 --> 01:00:11,020
 So that's what I was curious about.

796
01:00:11,020 --> 01:00:17,820
 Are we talking about-- you're not buying parts to replace through 2058, are you?

797
01:00:17,820 --> 01:00:18,740
 >> No.

798
01:00:18,740 --> 01:00:19,740
 >> Okay.

799
01:00:19,740 --> 01:00:24,220
 >> No. So these parts are not actually to replace any parts.

800
01:00:24,220 --> 01:00:29,100
 These parts are solely to swap out so that we can take the parts that are on there

801
01:00:29,100 --> 01:00:31,980
 and refurbish them aside from the actual maintenance.

802
01:00:31,980 --> 01:00:33,380
 >> Yeah, I would just say that.

803
01:00:33,380 --> 01:00:42,780
 It's just-- there's not a prediction of how the money will be spent over a period of time.

804
01:00:42,780 --> 01:00:48,900
 And so I guess my concern would be the good-- it's good to have inventory to repair things

805
01:00:48,900 --> 01:00:52,500
 but sometimes they deteriorate sitting on the shelf or they need--

806
01:00:52,500 --> 01:00:55,900
 I mean, do you have to maintain cylinders?

807
01:00:55,900 --> 01:00:57,580
 Do you have to keep oil on them?

808
01:00:57,580 --> 01:00:58,860
 I mean--

809
01:00:58,860 --> 01:01:02,940
 >> So as these parts come in from overseas, they have what's called cosmoline on them,

810
01:01:02,940 --> 01:01:05,580
 so a rust inhibitor.

811
01:01:05,580 --> 01:01:09,540
 It's actually maintained on there and we have preventative maintenance

812
01:01:09,540 --> 01:01:12,820
 for long-term storage of components.

813
01:01:12,820 --> 01:01:18,380
 So if there were-- I think in this list, there were LT pump, HT pump.

814
01:01:18,380 --> 01:01:25,980
 Those pumps will be turned once a month to keep rust from forming on that one spot on the shaft.

815
01:01:25,980 --> 01:01:28,180
 That's the only thing that would need to be turned.

816
01:01:28,180 --> 01:01:32,500
 Everything else is just make sure that they're desiccant in the container

817
01:01:32,500 --> 01:01:34,260
 and that the cosmoline is intact.

818
01:01:34,260 --> 01:01:40,460
 >> So I mean, you'll-- I mean, we talked about the turbos coming back here soon, I would assume.

819
01:01:40,460 --> 01:01:43,900
 It's something that you want to get pretty quickly in here.

820
01:01:43,900 --> 01:01:50,420
 But I mean, it's not-- how far does this $2 million go out?

821
01:01:50,420 --> 01:01:50,900
 Do you know?

822
01:01:50,900 --> 01:01:52,340
 I mean, is it an eight-year period?

823
01:01:52,340 --> 01:01:55,740
 Is it a four-year period?

824
01:01:55,740 --> 01:01:57,580
 It's not clear.

825
01:01:57,580 --> 01:01:58,660
 >> Yeah, let me--

826
01:01:58,660 --> 01:02:00,860
 >> Because I know you'll be coming back for more money on this--

827
01:02:00,860 --> 01:02:01,060
 >> Absolutely.

828
01:02:01,060 --> 01:02:02,700
 >> -- to maintain it and I know you will.

829
01:02:02,700 --> 01:02:05,660
 So-- and it's necessary, I'm not disagreeing, I'm just curious.

830
01:02:05,660 --> 01:02:09,860
 >> So the-- these are for these major spares.

831
01:02:09,860 --> 01:02:16,700
 We have routine maintenance activities and routine parts that we're buying, instrumentation,

832
01:02:16,700 --> 01:02:22,500
 monitors, things about a million, million and a half a year that we spend for that.

833
01:02:22,500 --> 01:02:27,980
 When these parts are shipped out, so they put in place, the ones that were taken

834
01:02:27,980 --> 01:02:35,380
 out are shipped out and rebuilt, in 2024 when we do that first one or whenever it occurs,

835
01:02:35,380 --> 01:02:40,980
 we'll then incur a rebuild expense for those parts.

836
01:02:40,980 --> 01:02:45,940
 And once they're rebuilt, they'll come back in and they'll be put into the warehouse,

837
01:02:45,940 --> 01:02:55,460
 very quickly put on the machine because if you think about it, we operate the deck pretty much

838
01:02:55,460 --> 01:03:01,100
 if one unit is in the money, so to speak, relative to the market, all units are in the money.

839
01:03:01,100 --> 01:03:02,140
 >> Crank them all up right now.

840
01:03:02,140 --> 01:03:07,460
 >> So we crank them all up but we do try to operate them in a way

841
01:03:07,460 --> 01:03:12,460
 so that we don't have all the maintenance activities coming at the same time on all 12 engines.

842
01:03:12,460 --> 01:03:12,940
 >> OK.

843
01:03:12,940 --> 01:03:18,860
 >> So what do you think the rebuild cost would be for the equipment, for the swing set?

844
01:03:18,860 --> 01:03:28,620
 >> So if we're looking at this current year, we're looking at $418,000 for this year's overall,

845
01:03:28,620 --> 01:03:32,780
 aside from swing sets or any of that nature that we're trying to buy.

846
01:03:32,780 --> 01:03:35,420
 >> 20% of what you bought or what you intend to buy?

847
01:03:35,420 --> 01:03:37,460
 >> Next year, about 100,000 more.

848
01:03:37,460 --> 01:03:37,780
 >> OK.

849
01:03:37,780 --> 01:03:41,820
 >> The next year, about 100,000 less.

850
01:03:41,820 --> 01:03:52,980
 >> We really start seeing a big increase around 12,000, this 24,000 timeframe where it'll get pretty heavy.

851
01:03:52,980 --> 01:03:54,860
 >> OK. All right, Will.

852
01:03:54,860 --> 01:04:00,700
 >> How much do you think it costs to rebuild the swing sets that you send out?

853
01:04:00,700 --> 01:04:02,500
 >> That's included in that price.

854
01:04:02,500 --> 01:04:03,580
 >> It's in the 400.

855
01:04:03,580 --> 01:04:06,980
 >> Right, the 418, OK.

856
01:04:06,980 --> 01:04:12,860
 Well, I deal with a lot of inventory and sometimes I go, what year do we get this?

857
01:04:12,860 --> 01:04:15,340
 It's been sitting there for 10 years.

858
01:04:15,340 --> 01:04:19,500
 So that was really what my question was pointed at.

859
01:04:19,500 --> 01:04:31,540
 >> Yeah, these are really not really going to depreciate as they go through with a 90,000 hour service life.

860
01:04:31,540 --> 01:04:38,020
 >> We're looking at anywhere from 90,000 to 120,000 operating hour service life on them.

861
01:04:38,020 --> 01:04:43,020
 So whenever we remove a head, we're not actually doing anything with the body of it.

862
01:04:43,020 --> 01:04:47,100
 It's replacing the seats and the valves and components within it.

863
01:04:47,100 --> 01:04:50,540
 The shell stays the same throughout the life of it.

864
01:04:50,540 --> 01:04:55,300
 So yeah, in a sense, it is going to depreciate to some extent.

865
01:04:55,300 --> 01:05:01,100
 But it's going to be reconditioned and then go on to the next one and then cycle all the way.

866
01:05:01,100 --> 01:05:03,260
 >> It's just a little bit for my education there.

867
01:05:03,260 --> 01:05:05,060
 I appreciate it and I'll move approval.

868
01:05:05,060 --> 01:05:06,340
 >> I hope that answers your question.

869
01:05:06,340 --> 01:05:06,820
 >> Yes.

870
01:05:06,820 --> 01:05:07,620
 >> Second.

871
01:05:07,620 --> 01:05:09,540
 >> Also.

872
01:05:09,540 --> 01:05:10,860
 >> All in favor say aye.

873
01:05:10,860 --> 01:05:11,380
 >> Aye.

874
01:05:11,380 --> 01:05:12,620
 >> Opposed?

875
01:05:12,620 --> 01:05:14,380
 OK, that carries.

876
01:05:14,380 --> 01:05:20,940
 The next item is consider recommending adoption of contract between the City of Denton and

877
01:05:20,940 --> 01:05:28,740
 Range Line Pipeline Services and for Terra Pipe Precast LLC for various types of pipe, water, etc, etc.

878
01:05:30,460 --> 01:05:33,020
 >> Is that the amount of 11 million?

879
01:05:33,020 --> 01:05:33,540
 Wow.

880
01:05:33,540 --> 01:05:36,700
 >> Yep, there's a lot of inventory there.

881
01:05:36,700 --> 01:05:39,580
 >> Good morning.

882
01:05:39,580 --> 01:05:40,740
 My name's Rebecca Davini.

883
01:05:40,740 --> 01:05:43,660
 I'm Deputy Director for Water and Wastewater Utilities.

884
01:05:43,660 --> 01:05:46,500
 Daniel Kramer, who is also Deputy Director of Public Works.

885
01:05:46,500 --> 01:05:50,780
 We're going to be sharing this presentation as this was a bid that was done together.

886
01:05:55,380 --> 01:06:00,980
 So Water and Wastewater Utilities relies on Range Line Pipeline Services for a number of things.

887
01:06:00,980 --> 01:06:09,460
 Currently we have been issuing declaration of emergencies for issues when these types of things come up.

888
01:06:09,460 --> 01:06:14,540
 And we worked with the purchasing department and it was recommended that we do a contract

889
01:06:14,540 --> 01:06:19,100
 that will allow for these types of services to be provided for the water utilities.

890
01:06:19,100 --> 01:06:23,980
 These services are typically for 14 inch through 54 inch in diameter.

891
01:06:23,980 --> 01:06:31,700
 It services our concrete cylinder pipeline, our pre-stressed concrete pipeline, also our still pipelines.

892
01:06:31,700 --> 01:06:40,100
 The information you see before you is not only for just the pipe itself, it's also for any emergency repair.

893
01:06:40,100 --> 01:06:45,860
 Range Line is on call 24 hours a day, 7 days a week, 365 days out of the year.

894
01:06:45,860 --> 01:06:47,900
 Any time we have an issue that might arise.

895
01:06:49,740 --> 01:06:54,860
 Typically this is for the majority of the pipeline, will be for our transmission.

896
01:06:54,860 --> 01:06:58,220
 But there are some of the pipelines that we consider in our distribution system.

897
01:06:58,220 --> 01:07:06,980
 What I will mention to you is it's not only for welding services, for all types of materials for pipes and fittings.

898
01:07:06,980 --> 01:07:13,580
 Such as the diapers and all the different fittings, it's also for taps and line stops.

899
01:07:13,580 --> 01:07:18,940
 They also assist us with cutting in valves and can come out on a 24 hour basis

900
01:07:18,940 --> 01:07:23,460
 and do a pipeline assessment to help us with whatever repair needs to be made.

901
01:07:23,460 --> 01:07:31,060
 In the 8 months I've been here, we've already had them on, I guess on call would be the best way to describe it.

902
01:07:31,060 --> 01:07:37,500
 In two different instances when they've helped assist with a 27 inch repair we made to our raw water line.

903
01:07:37,500 --> 01:07:42,740
 And then over Thanksgiving we had a 20 inch water line that also had a failure.

904
01:07:42,740 --> 01:07:48,900
 The concrete cylinder pipe is not something that our in-house crews have the expertise to do the type of work on.

905
01:07:48,900 --> 01:07:53,460
 So we're requesting that we move forward with this contract.

906
01:07:53,460 --> 01:07:58,500
 I'm going to allow Daniel to come up and make a presentation about his drainage pipe.

907
01:07:58,500 --> 01:08:01,500
 And then we'll take any questions you might have.

908
01:08:01,500 --> 01:08:09,980
 >> Good morning Madam Chair, Ford.

909
01:08:11,180 --> 01:08:17,460
 So the drainage department used these precast pipes in order to replace any emergency repairs or

910
01:08:17,460 --> 01:08:20,060
 any of the small capital projects that we have going on throughout the year.

911
01:08:20,060 --> 01:08:28,180
 This bid includes 17 different pipe sizes with two different classifications, either class three or four.

912
01:08:28,180 --> 01:08:34,020
 And seven different sizes for the boxes.

913
01:08:34,020 --> 01:08:40,060
 Most of this is just for emergencies, this covers everything that we have throughout the city.

914
01:08:41,340 --> 01:08:42,780
 So that we can get it when we need it.

915
01:08:42,780 --> 01:08:56,140
 So as this proposal goes through, there's two different proposals.

916
01:08:56,140 --> 01:09:02,180
 It goes through with 7.3 million, which is for the range line pipe services.

917
01:09:02,180 --> 01:09:06,420
 And then the four terabyte, which is 11.8 for the drainage department.

918
01:09:06,420 --> 01:09:09,580
 Any questions or anything that we can answer?

919
01:09:09,580 --> 01:09:14,500
 >> So in essence, this is a $19 million request for funds, okay.

920
01:09:14,500 --> 01:09:17,060
 >> But this is a pneumatic seat.

921
01:09:17,060 --> 01:09:22,620
 So this just gives us the ability to spend what pipes we need, when we need it.

922
01:09:22,620 --> 01:09:26,580
 And gets us a pricing sheet all the way through so we have those prices locked in for five years.

923
01:09:26,580 --> 01:09:32,100
 >> So it appears that you really only got one bidder on the water and sewer and one bidder on the precast.

924
01:09:32,100 --> 01:09:33,100
 >> Correct, yes, sir.

925
01:09:33,100 --> 01:09:37,620
 >> And you're going to award one for the one bidder for each one, correct?

926
01:09:37,620 --> 01:09:38,140
 >> Correct.

927
01:09:38,140 --> 01:09:38,660
 >> Okay. >> Yes, sir.

928
01:09:39,740 --> 01:09:41,580
 >> And it's really more of a unit price.

929
01:09:41,580 --> 01:09:44,900
 So whatever we use is what we're going to pay for.

930
01:09:44,900 --> 01:09:45,420
 >> Yes, ma'am.

931
01:09:45,420 --> 01:09:46,140
 >> Oh, yeah.

932
01:09:46,140 --> 01:09:50,140
 >> Yeah, so I actually congratulate you for

933
01:09:50,140 --> 01:09:53,900
 doing this because you're being a little proactive in emergencies.

934
01:09:53,900 --> 01:09:58,780
 And you're not then running to see what you're going to pay, so.

935
01:09:58,780 --> 01:10:00,700
 >> I have a question.

936
01:10:00,700 --> 01:10:07,660
 Is there really only one person that can make concrete pipe in the DFW area or in the North Texas area?

937
01:10:07,660 --> 01:10:12,540
 Was there no interest in any other vendor supplying the pipe?

938
01:10:12,540 --> 01:10:18,620
 >> On that, I'm not sure actually how many bidders that we had that went in or how many we sent it out to.

939
01:10:18,620 --> 01:10:22,220
 I don't know if- >> I think it's like 344 in your factor.

940
01:10:22,220 --> 01:10:24,940
 >> There are other concrete pipe and a water pipe.

941
01:10:24,940 --> 01:10:26,380
 >> I think purchasing is coming up to answer.

942
01:10:26,380 --> 01:10:28,620
 >> Sometimes they're just not interested in municipal work.

943
01:10:28,620 --> 01:10:29,120
 >> Yeah.

944
01:10:29,120 --> 01:10:35,900
 >> Laurie Hill, Purchasing Manager.

945
01:10:35,900 --> 01:10:40,860
 >> Yeah, we put this out in our electronic bidding software, and we sent it to 344 vendors.

946
01:10:40,860 --> 01:10:44,780
 And we just got the one response for Terra for the concrete, and

947
01:10:44,780 --> 01:10:49,100
 then the one response for Rangeline for their services.

948
01:10:49,100 --> 01:10:52,860
 >> Unfortunately.

949
01:10:52,860 --> 01:10:55,100
 >> Yeah, we advertise it in the newspaper.

950
01:10:55,100 --> 01:11:03,740
 >> It's interesting to me that Rangeline never bid on something that Fortera bid on.

951
01:11:03,740 --> 01:11:06,540
 >> They're two different. >> Two different things.

952
01:11:06,540 --> 01:11:08,700
 Fortera's just supply the material.

953
01:11:08,700 --> 01:11:12,620
 Rangeline is the installation service and repair, right?

954
01:11:12,620 --> 01:11:14,700
 >> And the water pipe. >> One to what, yeah.

955
01:11:14,700 --> 01:11:16,780
 >> Both water and sewer. >> Sure, yeah.

956
01:11:16,780 --> 01:11:21,980
 >> So not only does Rangeline provide the repair services or the stoppile services or

957
01:11:21,980 --> 01:11:28,620
 welding services, they're also providing the joints of pipe to do the repairs or fittings,

958
01:11:28,620 --> 01:11:31,020
 whatever types of connections are needing to be made.

959
01:11:34,460 --> 01:11:35,580
 >> Does that answer your question?

960
01:11:35,580 --> 01:11:39,900
 >> Kind of, yeah. >> If there's no other questions,

961
01:11:39,900 --> 01:11:43,020
 I'll move approval. >> Do we have a second?

962
01:11:43,020 --> 01:11:44,940
 >> I'll second. >> All in favor say aye.

963
01:11:44,940 --> 01:11:46,940
 >> Aye. >> Opposed?

964
01:11:46,940 --> 01:11:54,860
 Okay, carries. Consider recommending adoption of an ordinance authorizing approval of change order

965
01:11:54,860 --> 01:12:00,620
 number one to the contract between the City of Denton and Quality Excavation LLC for the Hinkle

966
01:12:00,620 --> 01:12:10,220
 and Windsor Paving Drainage Project and the amount of change order not to exceed 518,744.21.

967
01:12:10,220 --> 01:12:17,660
 >> Good morning, my name's Dustin Draper. I'm with Capital Projects.

968
01:12:17,660 --> 01:12:23,500
 A little about the project is Magnolia phase two drainage. It started out as a drainage project

969
01:12:23,500 --> 01:12:28,700
 and then became a street project when the road to the excavation was going to be expanded so much.

970
01:12:31,180 --> 01:12:36,300
 All we're asking for is the replacement additionally, a replacement of more curb, concrete

971
01:12:36,300 --> 01:12:42,540
 pavement, and a small utility connections for the change order. This is the terms our project was

972
01:12:42,540 --> 01:12:48,060
 originally only drainage from here, it extended all the way from University to Windsor and all

973
01:12:48,060 --> 01:12:56,540
 the way to 77 as a road project as well. We're here to recommend adoption of the ordinance for

974
01:12:57,340 --> 01:13:06,300
 change order 120 quality excavation for 518,744.21. >> Let me start by saying I have no problem with

975
01:13:06,300 --> 01:13:10,620
 these additional funds, but haven't we already seen this? Didn't this come through this board

976
01:13:10,620 --> 01:13:15,180
 already? >> No, sir, not that I know of. >> Not the change order. >> Not the change

977
01:13:15,180 --> 01:13:19,740
 order, the original contract probably did. >> No, no, no. There was something that came

978
01:13:19,740 --> 01:13:26,140
 through here and about that same amount I thought that added. >> We can check not that I know of,

979
01:13:26,140 --> 01:13:35,340
 sir. >> Okay. >> Okay. >> Any other questions? >> I move we approve. >> Do we have a second?

980
01:13:35,340 --> 01:13:41,180
 >> Second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. >> Okay. >>

981
01:13:41,180 --> 01:13:49,980
 Consider recommending approval of a resolution to recognize all the renewable energy credits

982
01:13:49,980 --> 01:13:54,460
 associated with the electric power purchase from the city from the whitetail wind turbine

983
01:13:54,460 --> 01:14:02,940
 electric generation facility. >> This is formalizing what we talked about previously. >>

984
01:14:02,940 --> 01:14:07,420
 Correct. We talked about it at the last meeting and we're formalizing it today.

985
01:14:07,420 --> 01:14:16,220
 >> There's no questions. I'll move approval. >> I have some questions. >> Oh, sorry.

986
01:14:18,220 --> 01:14:26,300
 >> It gave you 30 seconds. >> It wasn't exactly 30. Do you want to go through the presentation

987
01:14:26,300 --> 01:14:30,300
 or do you just want to jump to questions? >> I have no problem with what the presentation is.

988
01:14:30,300 --> 01:14:35,580
 >> Okay. >> Whatever you want to do. >> Madam Chairman, members of the board, Terry Nolte,

989
01:14:35,580 --> 01:14:45,100
 DME. This is in fact what you said. We were here two weeks ago to talk about the whitetail contract

990
01:14:45,100 --> 01:14:53,420
 and the potential for inclusion of the whitetail credits. We did present the same work session

991
01:14:53,420 --> 01:15:01,260
 item to the council two weeks ago and they did give us direction to include all of the renewable

992
01:15:01,260 --> 01:15:07,180
 energy credits that we have purchased from or under the whitetail contract.

993
01:15:11,980 --> 01:15:17,820
 We went over this information last time. One change to this, you can see under the whitetail

994
01:15:17,820 --> 01:15:26,300
 contract, the red line, we purchased 30 megawatts of energy. We also purchased 60 megawatts of

995
01:15:26,300 --> 01:15:33,900
 renewable energy credits from the -- from the -- under the contract. The additional 30 megawatts

996
01:15:33,900 --> 01:15:42,460
 of recs above the energy were part of the original renewable dentin plan to achieve 40%. That was

997
01:15:42,460 --> 01:15:50,140
 authorized by council in 2014 as part of the original contract with whitetail.

998
01:15:50,140 --> 01:16:00,540
 The results of this decision, if the -- if the resolution is adopted, would be as follows.

999
01:16:00,540 --> 01:16:10,620
 You can see that we move from 71% in 2021 up to 103% of renewable energy.

1000
01:16:10,620 --> 01:16:17,180
 It does avoid $5.1 million in incremental costs that we would have to spend otherwise

1001
01:16:17,180 --> 01:16:26,220
 to replace this energy with energy that was -- that was like our other contracts,

1002
01:16:26,220 --> 01:16:35,020
 like for instance Santa Rita where we have a wind farm and we get the actual -- whatever the full

1003
01:16:35,020 --> 01:16:42,940
 output of the farm is, we count those recs. This one will give us 60 recs on all hours.

1004
01:16:42,940 --> 01:16:45,260
 May I ask a question about this? Yes, sir.

1005
01:16:45,260 --> 01:16:55,740
 2324 is when the contract expires in '24? It expires at the end of 2023.

1006
01:16:55,740 --> 01:17:05,100
 It bridges the fiscal year 2324. My question is if that drops us down

1007
01:17:05,100 --> 01:17:12,540
 in 2324 to 88%, how do we get it back up to 100? We'll have to do another procurement.

1008
01:17:12,540 --> 01:17:19,340
 We'll add additional resources at that time under either a short term or long term contract.

1009
01:17:19,340 --> 01:17:22,300
 With -- for recs? It will be energy and recs.

1010
01:17:23,020 --> 01:17:27,820
 But I think it will be at the direction of the PUBN council.

1011
01:17:27,820 --> 01:17:31,900
 However, you would like us to proceed at that point in time.

1012
01:17:31,900 --> 01:17:39,580
 We'll take your desires, your wishes into account and that's what we'll go out and procure.

1013
01:17:39,580 --> 01:17:45,980
 I'm not asking you to be a future -- a seer into the future, but I'm going to ask anyway.

1014
01:17:45,980 --> 01:17:52,220
 That's the business we're in. Do you envision a time when

1015
01:17:52,220 --> 01:17:57,740
 Denton will be 100% renewable energy from physical energy rather than --

1016
01:17:57,740 --> 01:18:02,620
 the actual energy itself rather than recs? Impossible.

1017
01:18:02,620 --> 01:18:12,540
 I guess just a clarifying statement about that. If we have a rec in our account, it means physical

1018
01:18:12,540 --> 01:18:18,060
 renewable energy was generated and delivered to the ERCOT grid.

1019
01:18:18,060 --> 01:18:20,380
 We buy all of our power from the ERCOT grid.

1020
01:18:20,380 --> 01:18:27,340
 So are there any of our renewables actual from the source, not a rec,

1021
01:18:27,340 --> 01:18:33,580
 but actually buying megawatt hours directly from a wind farm or solar farm?

1022
01:18:33,580 --> 01:18:38,380
 Yes, sir. All of our contracts, all of our

1023
01:18:38,380 --> 01:18:43,500
 renewable energy contracts are direct purchases from physical resources.

1024
01:18:43,500 --> 01:18:52,140
 The issue here is that the extra 30 that we contracted for here can be provided by this

1025
01:18:52,140 --> 01:18:58,300
 wind farm because it is 110 megawatt capacity. We're only contracted for 60.

1026
01:18:58,300 --> 01:19:04,060
 So because of the way that the recs are serialized, identified in accounts,

1027
01:19:04,060 --> 01:19:09,180
 we know exactly where they were generated and by what resource.

1028
01:19:09,980 --> 01:19:16,700
 And therefore, ERCOT deems those to be renewable megawatts that were delivered into the grid.

1029
01:19:16,700 --> 01:19:24,460
 I think you're speaking of the kind of nuance between, for example, our Santa Rita project,

1030
01:19:24,460 --> 01:19:30,540
 which we have a 150 megawatt contract. The farm is a 150 megawatt farm.

1031
01:19:30,540 --> 01:19:39,340
 And we only are allocated recs based upon the physical output of the farm in each hour.

1032
01:19:40,620 --> 01:19:47,740
 All of those recs, we count. And we don't necessarily count the energy.

1033
01:19:47,740 --> 01:19:54,220
 The rec is the tag, if you will, that demonstrates that it was renewable.

1034
01:19:54,220 --> 01:20:01,340
 And that's the premise for this resolution is to recognize that the renewable energy credit itself

1035
01:20:01,340 --> 01:20:05,820
 is the proof that it was physically delivered as a renewable energy.

1036
01:20:06,460 --> 01:20:13,260
 Okay. Thank you. I want to preface this remark before that I'm a big fan of renewable energy,

1037
01:20:13,260 --> 01:20:20,300
 no doubt. But all electricity that is produced by any source goes onto a grid, correct?

1038
01:20:20,300 --> 01:20:23,660
 Yes, sir. In ERCOT, that is correct.

1039
01:20:23,660 --> 01:20:28,460
 That is correct. It's not connected directly into our system, necessarily.

1040
01:20:28,460 --> 01:20:32,860
 With the exception of the landfill, that is correct.

1041
01:20:34,540 --> 01:20:40,380
 And the rooftop solar facilities that we have about four megawatts of rooftop solar

1042
01:20:40,380 --> 01:20:44,700
 throughout the city that's privately owned by businesses and residents.

1043
01:20:44,700 --> 01:20:48,780
 We're just, once ERCOT says this is what you use and this is what you owe, we say,

1044
01:20:48,780 --> 01:20:53,580
 okay, yeah, we owe it to these different renewable energy sources.

1045
01:20:53,580 --> 01:21:00,700
 We owe the renewable energy sources as a direct result of our contracts with them.

1046
01:21:01,420 --> 01:21:10,860
 We pay for the energy to ERCOT. We sell from Santa Rita and White Tail

1047
01:21:10,860 --> 01:21:14,460
 into the market. We're paying them to run.

1048
01:21:14,460 --> 01:21:17,660
 We're not necessarily getting their energy. That's correct.

1049
01:21:17,660 --> 01:21:32,300
 Okay. All in favor say aye. Aye.

1050
01:21:32,300 --> 01:21:37,900
 Opposed? Motion carries. Assistant City Manager update.

1051
01:21:37,900 --> 01:21:46,700
 Good morning board members. The first item that you have is an ACM update on the landfill

1052
01:21:46,700 --> 01:21:53,100
 expansion. So this is for the 1590B permit that is currently working through the system.

1053
01:21:53,100 --> 01:21:56,220
 Public notice was out on that about mid-December.

1054
01:21:56,220 --> 01:22:01,100
 Public comment, to my knowledge, just ended about 10 days ago.

1055
01:22:01,100 --> 01:22:04,620
 So staff is here to answer any questions if you have any.

1056
01:22:04,620 --> 01:22:12,220
 I will note this was provided to City Council previously, so we're closing with the PEB.

1057
01:22:13,420 --> 01:22:19,340
 Maybe it was in some backup somewhere, but what are the numbers for opposed

1058
01:22:19,340 --> 01:22:21,340
 and in support that you got from public comment?

1059
01:22:21,340 --> 01:22:30,940
 My apologies if it's somewhere buried and you didn't see it.

1060
01:22:30,940 --> 01:22:33,980
 It is not. Brian Burner, Director of Solid Waste.

1061
01:22:33,980 --> 01:22:39,740
 Currently there are about 500 comments on the electronic system.

1062
01:22:39,740 --> 01:22:45,260
 There are several of them that are for the proposal. There are many that are against.

1063
01:22:45,260 --> 01:22:49,980
 There are many that are duplicates in the system. So we're in the process right now

1064
01:22:49,980 --> 01:22:53,100
 working with the state to go through those, remove those that were entered

1065
01:22:53,100 --> 01:22:56,540
 several times, figure out exactly what that variant is.

1066
01:22:56,540 --> 01:23:02,460
 Thank you. No other questions?

1067
01:23:05,980 --> 01:23:11,660
 On our future Public Utility Board agenda items, you'll note on January 27th

1068
01:23:11,660 --> 01:23:15,660
 there's an RFP for Solid Waste Management Strategy.

1069
01:23:15,660 --> 01:23:19,900
 That went out to City Council in the Friday reading pile this Friday

1070
01:23:19,900 --> 01:23:22,860
 and was disseminated to the board via email.

1071
01:23:22,860 --> 01:23:25,660
 And so you should have the same information.

1072
01:23:25,660 --> 01:23:29,980
 And again, staff is here to answer any questions that you might have.

1073
01:23:29,980 --> 01:23:35,740
 I will note that it will be included as an ACM update in the next PEB package.

1074
01:23:35,740 --> 01:23:40,220
 So we'll have it for the record. Staff will be glad to answer any questions if you have them.

1075
01:23:40,220 --> 01:23:47,500
 Okay, for future agenda items, I have a question I'd like answered.

1076
01:23:47,500 --> 01:23:53,020
 How many of these items on our agenda today go directly to City Council of tomorrow?

1077
01:23:53,020 --> 01:24:01,820
 I don't have a number on that. Typically we try to leave a week between the time frame,

1078
01:24:01,820 --> 01:24:05,020
 at least a week between the time frame between when they're presented to the PEB

1079
01:24:05,020 --> 01:24:10,220
 and when they go to the council. But there are some cases where because of timing issues that

1080
01:24:10,220 --> 01:24:16,540
 they will actually be on the next council agenda. We try to avoid that sometimes. It's unavoidable.

1081
01:24:16,540 --> 01:24:18,300
 I understand that.

1082
01:24:18,300 --> 01:24:26,700
 So in the minutes, will they be part of, will they be intact and ready to go

1083
01:24:26,700 --> 01:24:31,020
 when the PEB action is presented to the council?

1084
01:24:31,740 --> 01:24:41,980
 If there is a situation where we have the gap between, we certainly will put the PEB decision

1085
01:24:41,980 --> 01:24:50,940
 or recommendation in there with the council packet. Typically the minutes are not disseminated

1086
01:24:50,940 --> 01:24:57,340
 to the council in that fashion, but the recommendation of the board is. In those

1087
01:24:57,340 --> 01:25:04,060
 instances where because of timing issues, we have to take it to the to the city council.

1088
01:25:04,060 --> 01:25:09,660
 We obviously don't have enough time to place the board's recommendation in terms of the

1089
01:25:09,660 --> 01:25:15,900
 overall vote in the item. What we do though is we will bring that up to the council in

1090
01:25:15,900 --> 01:25:20,380
 the presentation for the item and essentially tell them what the vote for the PEB is.

1091
01:25:20,380 --> 01:25:27,180
 Okay and it goes further with Mr. Soph's comment earlier. He asked specific questions because he

1092
01:25:27,180 --> 01:25:34,380
 wanted council to see his concern about those items and of course they didn't see that.

1093
01:25:34,380 --> 01:25:40,300
 So I guess I don't want to be blunt. Well yeah, I usually am but

1094
01:25:42,620 --> 01:25:50,460
 what sometimes I'm not clear what the use of the PEB is to the city if none of these

1095
01:25:50,460 --> 01:25:55,420
 comments or questions are not given to the city council.

1096
01:25:55,420 --> 01:26:02,140
 Okay. And so I'd like to see the council answer that question.

1097
01:26:02,140 --> 01:26:08,380
 Not for staff. I'm not saying anything against staff. This is for the council

1098
01:26:10,060 --> 01:26:12,700
 and I've asked several council members that question already so

1099
01:26:12,700 --> 01:26:16,620
 no they won't be surprised.

1100
01:26:16,620 --> 01:26:22,700
 All right so then new business.

1101
01:26:22,700 --> 01:26:31,020
 A couple of items that we've taken care of. The tour of the Denton Energy Center has been

1102
01:26:31,020 --> 01:26:39,020
 completed on December the 5th. There was a request from several board members about a tour of the

1103
01:26:39,020 --> 01:26:44,940
 Recycling Center for Pratt. We're trying to time that where the weather will be a little bit more

1104
01:26:44,940 --> 01:26:50,540
 conducive so he will be reaching out to the board members in the next couple of weeks to see about

1105
01:26:50,540 --> 01:26:59,180
 arranging a time for that. Keep in mind depending on the amount of or the participation we may have

1106
01:26:59,180 --> 01:27:05,820
 to end up posting and so that makes more time depending on how many people want to attend.

1107
01:27:06,540 --> 01:27:13,260
 And then the only other item that we have on new business action items is the currently is the

1108
01:27:13,260 --> 01:27:18,780
 work session to identify equipment replacement cost and kind of how that process is is done

1109
01:27:18,780 --> 01:27:24,140
 and that's scheduled to occur in February next month. That's all I have.

1110
01:27:24,140 --> 01:27:28,380
 And you wanted to speak to the minutes.

1111
01:27:28,380 --> 01:27:33,740
 Yeah I just want to address a comment that Mr. Sofen made about the minutes and what I was looking

1112
01:27:33,740 --> 01:27:41,340
 at is I've been emailing Billy Matthews who does the DTV and when they record the meetings and also

1113
01:27:41,340 --> 01:27:46,460
 looking at the most recent city council minutes even the city council minutes are that is talking

1114
01:27:46,460 --> 01:27:54,220
 about discussion ensued and the record is actually the recording itself and so you can go back and

1115
01:27:54,220 --> 01:28:01,180
 see exactly what happened and the PUB video is available within an hour after the meeting

1116
01:28:01,820 --> 01:28:06,540
 and so that's why the detailed minutes aren't it's not kept the way they used to be kept because the

1117
01:28:06,540 --> 01:28:14,220
 recording is the record itself. Does that address your concern or yeah okay okay I just want you to

1118
01:28:14,220 --> 01:28:21,900
 I do know several council people watch the video so and it raised a question that now we're going

1119
01:28:21,900 --> 01:28:27,500
 to address is how long we're going to archive all the videos that's not been addressed so that's

1120
01:28:27,500 --> 01:28:32,780
 something that I've already got down and we're going to not we need direction on how far along we're going to keep that so

1121
01:28:32,780 --> 01:28:39,980
 I just want to bring that forward thanks okay then we're into concluding items does a board

1122
01:28:39,980 --> 01:28:44,620
 member wish to add anything to a future agenda or congratulate a staff member

1123
01:28:44,620 --> 01:28:51,260
 all right congratulations to all the staff members for all the work you did

1124
01:28:51,260 --> 01:28:55,980
 just because I'm asking questions doesn't mean I'm insulting you at all

1125
01:28:57,580 --> 01:29:02,220
 that is our job correct so then do we just adjourn into closed session

1126
01:29:02,220 --> 01:29:07,580
 okay so we are adjourning into closed session