May 11, 2020 Public Utilities Board on 2020-05-11 9:00 AM

Okay, it's about 9.07 and it's time to call the Public Utilities Board of May 11th, 2020 to order. We do have a quorum. I want to remind everybody to mute your microphones and just raise your hand if you want to be heard and I'll call on you then. The first item on the agenda is our consent agenda. Does any board member wish to pull any of the items A through G? Okay, Ed? Yeah, I'd like to pull C as in cantaloupe. And Billy? I'd like to pull A as an antelope. And Karen? I'd like to pull B as in boy. Anyone else? All right. So item A. Are we going to approve the other ones first or? Oh, that's a good idea. Gee, we're a little out of sync today, aren't we? Okay. So do I have a motion to approve item D, E, S, and G? So moved. Second. All in favor say aye. Aye. Item A is the rejection of bids to add bays to the fleet services. There's really not a lot of explanation that everything just come in over budget. We have Cassie Ogden on the line, our procurement director, but I can give you a quick background. As part of the budget reductions that the city was looking at over the last few weeks, those were one of the items that we looked at is to stop construction on some projects and facilities at this point. It doesn't mean that that project can't come forward in the near future, but those were part of our what we call tier one cuts for the upcoming future for the city operations. That's the only reason. Okay. That's great. I appreciate you guys being responsible with the budget. I think the public needs to know that for sure. Correct. Thank you. Thank you. That's all. Do we have a motion to approve item A? I'll move approval. I'll second. All in favor say aye. Aye. Aye. Okay. Okay, and Russ did, okay, all right, my motion carries. All right. Item B. I think that was you, Karen. Oh yeah. Sorry. Same question as Billy, I understood the rejecting certain budget items, you know, during this time. Could I, stupid question as usual, do we have a handle on the total shortfall, predicted shortfall for this fiscal year? At this, specifically to solid waste or utilities in general, we are working with our, I'm sorry, we are working with our, with David Gaines, our finance director, he's in the room here with me if you have some specifics, but we're working towards creating those forecasts. It's still too early because of all the issues that occurred starting in mid-March. So everything happened so rapidly with businesses closing and universities closing, et cetera. And so while we're forecasting, we're still kind of playing a wait and see mentality until we get at least another four to six more weeks under our belt so we can try to understand what the full impact is of the last two months or so. I was curious about our target numbers for cuts or whatever savings, I guess I should say. Sure, let me refer that to David Gaines, our director of finance, if you'll give him in just a few moments, he'll be on the call. Chairman Parker, before he starts, one thing I'd ask that you do when you take the vote is to ask each individual member, their vote, since this is the only recording we have of the vote. Yeah, I'll do that. Thank you. David Gaines, director of finance, we took a forecast update to city council last month where we touched largely on the general fund but also on each of the utility funds with some very high level assumptions for revenue losses and then also what we've done so far with expenditure reductions and are kind of what we've phrased our tier one strategy. So I can talk about a very high level of what that entailed and also what those revenue losses were. We looked at a solid waste fund specifically about $800,000 revenue impact right now really related to commercial revenues and revenues that we're anticipating to lose based on our collections practices with deferring late fees and shutoffs. So we had those with each of the utility funds of what we're anticipating and we've done the same tiered strategy of reductions with the utility funds that we looked at in the general fund as well and those were position freezes, merit increase, cessation of merit increases, some one time expenditure reductions, things such as the fleet expansion that we touched on with capital projects, reallocations and then we also have offered the voluntary separation program which was detailed with council which is currently ongoing. That's open to all employees not just general fund out to all the utilities. So those are the actions that we've taken thus far. The revenue impact there is definitely preliminary and we're rapidly as we go forward. Okay. Thanks David. I was just wondering if things had changed since the report to council. Nothing. Nothing yet. We're still trying to monitor it. All right. Thank you. I'm fine with B. Okay. Is it that your motion to approve? Sure. Yeah. Motion to approve. Do we have a second? Second. Was that Charlie? Charlie says second. And aye. And aye. Okay. Ed? Yes. Billy? Please click open Zoom meetings to save your system. See the system dialogue. If nothing prompts from your browser, click here to launch the meeting. Russ? Yes. Charlie? Yes. And I'm a yes. All right. The next item is C, cantaloupe. Ed? Yeah. If my memory serves me, as I recall, getting this survey done was contingent on getting a grant from the North Texas Council of Government. And I wondered what the status of the grant was. If the grant was denied, then that is causing the cancellation of this bid, or little about the background on this. Sure. I believe Brown-Burner, Director of Solid Waste, and then Alon, I believe he can answer some of those questions, Mr. So. I think he is. Miss Bryan, can you hear me? We can. Yes. Okay. Very good. Thank you very much. Mr. So, you are correct that we did submit a grant application to the North Central Texas Council of Governments to help fund this. However, the completion of this was not contingent upon successfully getting the grant. It was the direction of the council that, you know, had we not been successful, that this was important enough for us to move forward. However, in light of the COVID revenue reductions, at least at this time, we are taking forward this recommendation to reject this bid. And once we get a little more comfortable with where our revenues are, hopefully very, you know, 90, 120 days down the road, we can reopen this bid and start this process again. But right now, just, you know, in the -- where we find ourselves, it's a prudent thing to do to at least defer this for a few months until we know where the funding is going to be coming from. Thank you. Can you clarify, was the grant awarded or denied? Or did you even submit it? No, it was denied. We did submit it, and it was denied. Not so much it was denied. It fell below the funding -- the funding level. There was like close to $4 million worth of applications that were submitted and only about $1.2 million worth of grant funds available. So was there any -- We fell below the line. So there was no priority given to these grant applications? It was simply the financial consideration? That is correct. Okay. Thank you very much. You're welcome. And I have one more question. I assume that there's no target date at this point because of the state of affairs as to when this will be re-solicited. That is correct. I mean, we're working close with finance, and once we get comfortable with where not only our revenues are, but the total financial outlook, we will be putting together a plan to take this back out on the street. But as Mr. Gaines had previously noted, it's still just a little too early to really understand where we are from a financial standpoint. I see. Thank you very much. You're welcome. And do we have a motion to approve then? I move. And a second? Second. Okay. And to a vote, I'll vote yes. Ed, we'll start with you. Yes. Billy? Aye. Yes. Karen? Yes. Russ? Yes. Charlie? Yes. And Barbara? Could you say that again, Barbara? I said I'm sorry. I am still dealing with problems. I did not hear any of the discussion. I will abstain. Okay. Okay. All right. So the next item is consider approval of the minutes of March 9th, 2020. That was a long time ago. Do I have a motion to approve the minutes? I move. We approve. Second. This is Russ. And Karen seconded. Okay. Well, we'll start with Ed. Yes. Approve. Yes. Yes. Billy? Yes. Karen? Yes. Russ? Yes. Charlie? Yes. And Barbara, I'm assuming you still can't hear. Okay. All right. Then on to management reports. Good morning, members of the PB, Mario Canazares, deputy city manager. We have a few items here that we would like to review with you or at least just make it available for you. We've got folks on the line that can answer specific questions, but because of the fact that with COVID and the pandemic, along with the various emergency declarations that were issued by the mayor and city council, we had a number of procurement items that normally would have gone to the public utilities board and other committees across the organization. But as a result of the fact that we were no longer doing meetings for the remainder of March and all of April, and some of these items required council approval, we went ahead and proceeded with those items before the city council. You should have a list in front of you. And if you have any questions, believe Cassie Ogden, our director of procurement, is on the line to be able to answer any specifics you may have about those items. Do any members have a question on one of the items? Just raise your hand. Yes. Yes. Okay. Russ? I have one, too. I have a question about the deck outage insurance. Could you explain exactly what that covers? Good someone? Good morning. This is Cassie Ogden. Can you hear me? Yes. The deck outage insurance, and I can defer to Tony or Terry for more specifics, but it basically allows us to have insurance in case we are we have an outage at the deck that we were unable to operate during the summer. So it's some insurance to make sure that if we lose revenue that it was a policy to cover our lost revenue. So it's basically a business interruption insurance for the deck? Okay. That's very similar. Okay. Does that answer it? Yes. It does. Okay. Okay. Oh, I muted myself. Any other board members have a question? All right. Okay. And so in item number two, under management reports, as we've been providing to PUB here recently, we've got the Energy Center dashboard that just shows the performance for the last quarter. And so I believe David Gaines is here if you have any specifics, and Mr. Puente is on the phone as well. Does a board member have a specific question on this item? Yes. Russ. Yeah. The title of the spreadsheet I see there says January 2020, but I think you just told us it was for the first quarter. Is that right? This is the first fiscal quarter. Mr. Bradford, our fiscal year begins October 1st through September 30th. So the first quarter of the fiscal year would be October 1st through December 31st. That's why you have it. All right. Okay. Just to clarify on that, when it says January 2020, it means the quarter ending December 31st? That's an affirmative. Okay. Thank you. Mr. Stolf. Yeah. I don't know if this is a printer problem, but the last under plant monthly run hour comparison, the last column for January 2020, is that green in color as opposed to blue for the others? And if so, why is it green? This is Tony. That's just to designate that that's the current month. Okay. All right. Thank you. Mr. Parker, let me make a correction. I was corrected by our finance director, the DEC dashboard year to date, January 2020, is for the actual month of January, not the previous quarter. My apologies. Any other questions? All right. Then future agenda items. Let me toggle to that screen, give me just a moment. I'm doing the same thing. Okay. You should have at your next meeting in June, excuse me, in June, a water loss audit work session. So that'll be presented by one of our members of the water department to be able to present to you their analysis on any water loss that's happened within our system within the city and also to you, while it's not listed, we'll be rolling into the budget season. So you'll start seeing a lot of these slots filled with budget presentations and discussions. So we're having to accommodate based on that since we typically would meet normally twice a month and right now we're with the PUV and right now we're at this point doing once a month meeting, so we're having to just adjust schedules accordingly until we get more in a routine. All right. And then onto new business action items. Oh, I'm sorry, Billy. I have a follow-up question for Mario. Sure. I've been thinking about BUVs here for the past few weeks and usually we're getting started already. It'd surely be nice to see some preliminary stuff and I know you'd hate to put it out there, especially right now, because you don't know what your budget's going to be probably. But do you know when our first meeting, we'll have some information to review will be? I would imagine probably we'll have to start in June with those discussions. So we'll start probably seeing some forecast and also trending from the past as well. Well, okay, appreciate it. Thank you. All right then. Onto new business action items. Any discussion on that? All right, so then concluding items. Does any board member wish to have something added to a future agenda or have anything that they'd like to share now? Doesn't look like it. Okay. Onto our work session items. The first work session is to receive a report and hold a discussion and give staff direction regarding emergency credit and collections measures and reopening strategy. Madam Chair, board members, Krista Foster, utility customer services manager. This morning I'm here to be able to give you guys a bit of an update on an update on where we are with some of the credit and collections activities and statuses since the pandemic. We're going to start with just a quick overview. We're going to look at all active accounts that carry past due balances, look at the current state and what our reopening strategy that we're proposing is. Then we're going to look at other collections activities, again reviewing the current state and a proposed reopening plan. We're going to look at the customer service recommendations for how we would like to move forward and then a quick update on some of the other collection activities. So in response to the pandemic, we did suspend all collection activities on active accounts. We did not charge any late fees or interest since the 1st of March and we stopped all service interruptions effective March 13th. We also suspended any collection activities that we take on closed accounts. This includes any calls or letters letting folks know that their final balances are past due and we've made no referrals to any outside collection agency. We have, however, made sure that all customers who have contacted customer service have access to basic utilities throughout the pandemic. So we've exhibited a lot of extra flexibility in working with customers to ensure that they have access to the utilities that they need. In addition to that, the city has created some partnerships with United Way. One of those things is for creation of a navigation line where residents and businesses can call for help. They can have someone who answers the phone or gives them a call back that can answer basic questions or get them referral to subject matter experts in the community who are volunteering their time and expertise to help navigate some of the challenges with the CARES Act and resources that businesses specifically may need access to. We have also provided $100,000 in emergency funding that has gone to the United Way. There is still $48,000 of that assistance available. We have been able to assist 86 families with either housing or utility assistance. We added an additional $50,000 to our relief through interfaith ministries that is dogged for the emergency. We have given a total of $185,000 for this current year to interfaith ministries. Just since March, we have been able to assist an additional 68 families, and there is still $112,000 in available assistance funds for residents in Denton. Part of the reason that we're here to talk about this today is that as state and city charter prohibit debt forgiveness by a municipal utility, if we don't do something soon, as balances are continuing to grow for our residents and businesses, we are going to put them in a very bad situation in terms of recovery after the fact. So as we look at the delinquent accounts, this is looking only at active accounts that currently carry a past due balance. We currently have, as of Friday morning, 2,660 postpaid accounts that are eligible for interruption. That is roughly 4.5% of all active accounts, where normally our interruptions run at about 1.2% of average accounts. We currently have $921,000 in past due balances, and for all of those accounts that carry a past due balance, between the past due and current balance, that increases to $1.5 million in outstanding debt for those customers who have a past due balance. We have 29 residential and multifamily accounts that currently have charges of over $1,000 that will become due. We have 175 accounts that have made no payments in over 90 days. So this would include balances that would have made them subject to interruption prior to the start of the pandemic. We have an additional 215 past due accounts that have never made a payment on their accounts since it was opened. You can see... Yes, sir. Yeah, I just, sort of a silly question, but is interruption a euphemism for having their power shut off? Yes, sir. Okay, thank you. As you can see with the chart, you can see the month over month amount that we would normally cut services for throughout any month, and we've now gone from $76,000 in February, and we had interrupted services for, to currently $921,000 in outstanding balances. In addition to the postpaid active accounts, we also have prepaid customers. Right now we have 160 prepaid accounts that are eligible for interruption, and that is 28.5% of all of our prepaid accounts are currently behind. That is $22,000 in outstanding monies that are due that have them in the negative. And we do have 41 accounts with over $200 due, and about 50% of those owe in excess of $300 to $350. And you can see, again, the interruption statistics in terms of the dollar balance for prepaid, and you can see that that is continuing to grow. Our 60-day plan for reinstating collections on active accounts is if it were to start June 1st, then what we would like to do is in the month of June, we'd like to provide a message on all past due bills. We normally send two courtesy calls prior to interruption, but in June we would like to make those courtesy calls indicative that they have a past due balance, that if it's, you know, showing as a past due balance on the July bill, they would be eligible for interruption in July, that the customer should make a payment or call for arrangements, that we will first offer pay-as-you-go to allow customers who have deposits to relieve part of their outstanding balance, and we can work with them on moving some of the remaining balances into debt recovery. If they would like to stay on a post-paid plan, that we will offer up to a six-month payment plan for them to get back on track and current. If they need greater than six months, then at that point we would require them to move to pay-as-you-go so that we can put those funds into debt recovery so that they're continually making small payments as they keep moving forward without building up additional balances. We will still encourage customers to contact interfaith ministries or United Way for assistance as there is a large amount of funding available currently, and during the month of June we would do no interruptions and we would assess no fees or interest. I do think it's important that we all know that once an arrangement has been made on an account, they would not receive fees or interest for the balances that are on that agreement as long as that agreement is kept and current. In the month of July, we would again continue encouraging customers to contact interfaith ministries or the United Way if they need assistance. We would revert back to the standard bill message allowing them to know that their service will be eligible for interruption. We would begin interruption of services for past due balances showing on the July bill where no arrangement has been made. However, since we have not done interruptions since the middle of March, if someone has not made contact and is interrupted, we will work more flexibly with them and allow them to create an arrangement rather than forcing payment of all past due balances which caused the interruption of service. Again, we would charge no fees or interest so that we give every customer full opportunity to get on some form of an agreement and get payments started before they ever are assessed fees again. In the month of August, now we have gone through alerting customers through the month of June. We have done interruptions for balances in July. In August, we are again going to continue to have them contact interfaith and United Way, but we will begin following normal processes including fees and interest assessed on any new past due balances or interruptions of service. As for other account collections, for activity on closed accounts, as you can see, for accounts that had a final balance due in January, those accounts should have gone to the collections agency at the end of March. That did not happen. As you can see, the black dates will show the time ranges when each of these accounts should have received either the automated call or the letter. The red indicates that that is a timeline that is passed or will be passed. And then you see the count of the accounts that were in question as well as the outstanding balance. For February 2020, accounts that had the final balance due in February, most of those customers did receive their automated call and their collection letter, but were not sent to collections on the 30th of April. And then for balances that were due in March, they have had no activity taken on them, and you can see the difference that makes in the number of accounts and the outstanding balances. Collection activities on return payments. We have not done interruptions of service for returned payments. We currently have $32,000 in outstanding returned payments, and 22,000 of that is for commercial accounts. In regards to reopening, our 60-day plan would be, again, to mimic a lot of what we're doing with active accounts. So for return checks, in June, we would send the standard return check letter, but we would not interrupt until July. Once July hits, then any of those outstanding return checks, we would begin interruption for those balances. For collections on closed accounts, we're recommending that both January and February customers, that in the month of June, they would receive a second collection letter to remind them that the balance is outstanding, and then collections activity be taken on the 31st of July for the people that had balances due in March and April. We would be doing an automated courtesy call in the month of June, and then the collection letter would go in July, and then you can see the respective dates for sending those to collections with the May 2020 final balances working off of the normal process and timeline. So our recommendation is to go with a phased reintroduction of collection activities, effective June 1st, that we would like to do courtesy contacts only through the month of June, that interruptions and collection agency referrals would begin in July, that we would begin resuming late fees and interest in August, and August would be a full return to normal operation, that we would allow up to a six month pay agreement for postpaid accounts and utilization of pay as you go, debt recovery for longer arrangements, obviously noting that if we had outstanding situations that we would handle those on a case by case basis. I also, oh, go ahead. Okay, just, are there any backup plans, I mean, just looking at the news and looking at projections and the uncertainty about what's going to happen with this so-called phased reopening of the economy, what's, are there plans in place that if there are spikes in the virus, as some medical folks are saying is going to happen, will, I assume that there will be other plans that will have to be reinstituted, and if there are, are there any, can you share any, what would you say, different plans that would have to be put in because of growing severity of the virus? Ed, this is Mario Canazares. Are you speaking in regards to just facility openings or just in regards to the payment and billing of utilities? Payment and billing, in other words, you know, greater stress on the population? Well, obviously, this is a very unprecedented situation, and we would be having to go back and regroup and look at what is the best approach to continue working with our customers. At this point, as some things have begun to reopen, our concern right now is for continued growing balances and placing customers in an unrecoverable situation financially. And since we do have a large number of assistance funds available, then, you know, we're hoping that we can help to get them back on track in the event that something does change and we have to regroup and maybe pull back some of the activities. Thank you. You probably have this, or already said this, what is the debt for commercial versus residential? I'm assuming a lot of restaurants were impacted quite heavily by this, and, you know, chances are some of them may not come back. Can you cover that a little bit? Sure. Right now, let me pull this back up. Well, let me see if I've got that on my printed stuff, give me a moment. Right now, about 14% of the accounts that are scheduled for interruption are actually commercial, and the average commercial past due balance is $1,200. We have 301 out of that 2,600 that are commercial accounts. Thank you. You're welcome. Before we get finished, I wanted to go ahead and make sure that I gave a follow-up on some of the write-off performance, obviously with a six-month lag between when accounts final and when they're written off, any of the impacts that we see because of the pandemic will not be seen until as early as even 2021, depending on exactly how flexible we have to be with the actions that we're taking internally. Debt growth, as you can see, has slowed. We are still monitoring it very closely. What I've seen is the trend in the growth of debt as that's starting to level out and drop a little bit from what we saw last year also follows the same type of trend that we're seeing in late fees and interruptions. It looks very early on as though pay-as-you-go, as those numbers of pay-as-you-go customers has increased, that appears to be one of the major influencers. It's still a little too early to draw a direct correlation, but that is something that we are also watching and monitoring. We are going to still recommend that we continue all of our current deposit and collections processes without additional changes as we're working on stabilization of debt and that we're going to focus on growth of that pay-as-you-go program as a containment strategy, which helps us to control unrecoverable debt and additionally helps to relieve customer financial burden with no additional fees. And finally, this is other accounts that are not utility related, but I wanted to make sure that… Go ahead. Karen Devaney has a question. Oh, I'm sorry, Karen. Hi, Krista. I just want to backtrack a little bit. You had mentioned that there's a charter rule, city charter, and I think some other… And state. Uh-huh. That prevented you from forgiving any debt. Could you give a little bit of history on that charter? Is that the most recent rewrite? I can give you guys some follow-up information related to the charters, both city and state, but it is in… even in Texas state charter that we would not be able to relieve debt. I think the city charter mimics what was already on the books for the state. And that's been a fairly long-term policy? Yes. Yes. Okay. Thank you. All right. Charlie Parker has a question. All right. I just have a comment. I'm very encouraged that the city is using discretion in its collections, but I do think that people's utility payments should come ahead of their car payment. They should come ahead of credit card bills. I think that people should prioritize making their utility payments right up there with their rent or their house payment. With that in mind, I think there are people who will be opportunistic in this situation and choose to make other payments. And there's a lot of people that will have liquidity events in the form of the stimulus payment and unemployment. And it just seems to me that we need to remember that we are a business. I don't think we should have punitive late fees, punitive interest rates, but I do think we need to hold people accountable for the utilities that they're using and make sure that paying your utilities is very high up on your list of priorities right up there with your house payment. Thank you. The only thing that I have in terms of other departmental utilities or collections is that we are working with Fire EMS, we're working with municipal court to make sure that we can streamline our processes so that we're presenting a unified approach. Fire EMS will end up following whatever utility customer service does in terms of their collections guidelines while municipal court as they fall under the Office of Court Administration will be following the guidance of the Office of Court Administration and the city judge. And with that, are there additional questions? Yes. I just want to say that I really appreciate your efforts to accommodate people who perhaps are less fortunate than we are and because the scope of the disruption of people's lives, service workers and all, as you know, is just incredible and the future is so uncertain for so many people who are dependent upon service jobs, et cetera, that I think that these people should not be punished and that's why I think it's wonderful that the EME has these policies in place where people are not unduly penalized for something that's completely out of their control. So thank you very much. You're welcome. I think it's also important to note that with the additional funding that has gone to interfaith ministries, the pandemic-related responses that they get from the public, they have loosened some of the income guidelines so that it can be used for true emergency relief for some of those families that may not otherwise qualify. So they have loosened some of those financial restrictions to be able to assist a greater number of people who are suffering because of income loss during the pandemic. Mr. Baffert. Yes, I just – I think it's a very sensible approach, what you've laid out here, and I think it's very lenient, actually, all things considered. One thing I noticed is, if I understood this right, on slide number five, you've got 215 accounts that have never made any payments since the account was created. Did I get that right? That is correct. And so that group and anybody that had a delinquent account prior to, let's say, the middle of March when all this corona stuff started here anyway, I'm thinking they probably ought to be looked at as a – with a separate set of eyes compared to people whose delinquent accounts only began from about the middle of March and later. So anyway, that's my two cents. It's a good approach. I think it's very lenient. Thank you. Thank you. Any other questions or comments? All right. Thank you. Oh, yes, Maureen. Madam Chair, let me ask Krista, is this information going to be presented to City Council tomorrow? So this is an opportunity if the PUB as a body would like to provide that input. Is there consensus around the information presented? It would be good for staff to be able to get that input from the board that they can be conveyed to council based on your consensus of what you saw. I heard comments that's too lenient. I heard comments that look at accounts in a different manner based on when those accounts became delinquent. So it would be good to be able to get that input from the board as a body. And so that way Krista can present that to the council when the information is presented tomorrow. Okay. Then I'll just ask each member to just say what they think. I think it's a fair plan. I know a lot of businesses are suffering quite a bit in adding penalties and interest on top of what's already happened. I do agree with Russ that I think we look at the people who were delinquent prior to this happening and the people who didn't even make a payment first. Because as Mr. Parker said, some people will take this opportunity to not pay their utility bill, but there are a lot of people who are hurting too. So that's my take. Yes, well, I stand by my previous statement and I also stand by what Russ said regarding people who got accounts and then never paid at the very beginning before this actually the virus actually really impacted us. So again, I am very pleased with the amount of consideration that DME has for people who've been impacted by this. Billy. I agree with the statements before. I know it's very difficult. It's sort of like in comparison to we all or a lot of people got stimulus checks. Some didn't need it at all. Others couldn't survive without it. I think this collection runs into the same problem. It's hard to tell the difference between who really needs it and who's taking advantage. I don't admire your task, but I think your plan is a good one at this point. Karen. Yeah, ditto. I'm admiring the flexibility you're providing within the constraints of state charter. I think probably DME is doing the most it can considering there's a hard and fast line against debt forgiveness or anything that might be construed as debt forgiveness. So yeah, kudos on the flexibility and otherwise agreeing with previous statements. Russ, anything more to add? Yeah, just a thought. Perhaps you might want to share with the council the total dollar amount is delinquent that existed prior to the middle of March before this corona stuff happened. That would be one amount. And then the amount of dollar amount, total dollar amount of delinquency that began after the middle of March. And that might be an enlightening thing for folks to understand. But it's a very lenient, very considered approach. Good job. Thanks, Barbara, unmute, you need to unmute. Down in the right hand corner, you should be able to unmute. Okay. Now you're unmuted. Now you're unmuted. Go ahead. Thank you. I actually appreciate the punishing of it that because if you've got a bill, adding on to it is just not the right thing to do. But do I understand that if you have a utility balance, you can't open another account that you have to pay past for the people that open an account and have never paid anything. If they had a previous account, did not they have to pay that before they could open another one? Under our normal processes, under regular operations, yes, we require the balances for outstanding accounts or at least 50% and an agreement depending on that case by case situation. Currently we are working with customers on those situations because we do not want someone to not have access to utilities currently. Very thoughtful plan. Thank you. Charlie? I'll just agree with Russ's comment that it looks like a very lenient plan and that we do need to have people pay their bills that are owed for services they received. This can get out of hand in a very quick way and I would hate to see us punishing the rate payers that are paying on time with people who have taken advantage of the situation. That being said, there are very legitimate needs right now and I realize those needs need to be addressed with compassion. Thank you. Mario, do you have your consensus? Direction? Yes, ma'am. We do. Thank you very much. All right. The next item is to receive a report and hold a discussion regarding the following with respect to Green Tree Estates, the actions taken and expenditures by the city in accordance with the mayor's declaration of disaster ordinance, existing conditions, the extension of the declaration of disaster, water infrastructure improvement options, and city council direction received on May 5th. Madam Chair, Mario, I'm going to be actually making the presentation, so I'm going to step away from this workstation and go to the presentation workstation, so just bear with me just a moment as I transition over. I'm going to go to the presentation workstation. Madam Chair, members of the Board, Mario Kenazares, can you see the screen? Yes. Oh. No. Which one is it? That one. All right. Okay. I think we're back in business again. Yep. You're back in business. Well, I wanted to take a few moments to make a presentation to the Board. This very presentation was given to the city council last Tuesday, and then so we just wanted to cover the slides that were made to the council, and then the last few slides of the slide deck is the direction that city council provided us after the conclusion of the presentation. So we've got a number of slides, certainly I believe there's kind of a stopping point halfway through the presentation. If you'll let me get to that point, I can stop and then answer any questions of the Board, and then I'll continue for the remainder, okay? As I mentioned, this was presented last Tuesday. So overall, this all started back in November of last year, I believe Ryan Adams came to you all now, it seems like a number of months ago, to cover this situation over at Green Tree Estates. What had happened was back in November, a water well that was connected to a number of homes, notice was given to those homeowners, property owners and residents, approximately 14 of them, that their water service through the well would be shut down starting in mid-November, mid-November of 2019. The city stepped in, heard from the residents, the city stepped in as far as trying to come up with a number of options, and one of those options was to provide water service to those residents. As a result, the mayor and city council back at the, just before Thanksgiving holiday declared a disaster for the residents out there for approximately 100 days. That was to expire in May 2020, or May 22nd of this year. One of the things that was done back in February was to begin making, requiring the residents to begin making payment of the water service. So the way it works is you've got some residents that have one 275 gallon containers, you have some residents that have two 275 gallon containers, and so for those residents that have one, they are charged $20.59 a month. For those that have two containers, they're charged $37.75 a month, and those costs are just to pay for the cost of water. Along with the extension of that time, back in mid-February, the city council also offered for city staff to do voluntary courtesy inspections, and offered to send information regarding code compliance, and also to address any issues related to health, life safety matters of non-occupied structures there in the subdivision. We had heard complaints from the residents over those weeks that there were several structures that were unoccupied, basically dilapidated structures. They were having issues with rodents, vermin, other issues, concerns with fire hazards, or folks that maybe could potentially be using that as shelter, and just causing major issues for those residents that actually were living in occupied structures. So building inspections went out and inspected the subdivision, and began working with the respective property owners of those structure, those lots, and of those structures to begin the removal of those things. So that's been in the works for the last number of weeks, and I'll give you an update here shortly. As part of the courtesy inspections, one of the reasons why we offered that is because those homes were connected to the well system, ultimately the residents wanted to be connected to the city's water system. So before we did that, we wanted to make sure that residents, before they spent money on upgrading their homes, that the city perform basically courtesy inspections. And what that intended to do was just to identify any issues related to health and safety matters. This is not about trying to condemn occupied structures or target those with any code enforcement issues. It was purely just to make sure that if you're going to connect to the city's water system, that the infrastructure you have in your home is adequate and appropriate, that you have appropriate backflow prevention devices so that you don't infiltrate our system on the back end and then cause issues downstream for other residents connected to the same water system. To date, none of those inspections have been requested by the residents or performed by the city as a result. However, in late February, the city reached out to Habitat for Humanity. We made those connections with that entity because they do this kind of work. They work in sometimes rehabbing existing homes. They also build new homes, so they're familiar with our codes, they're familiar with construction. And so we wanted to make sure that if there was an opportunity to do this, could we work with Habitat as a partner to make that connection with the residents? Habitat was able to reach out to the residents and perform some inspections. They actually inspected five of the 14 homes, and the reason five, because those five are owner occupied. So they were able to do some inspections of those homes and create the list of situations that they observed that would typically be problematic for connecting to the city's water system. To this date, we are not aware of the details of those results. We have a general understanding that some of the items that were identified were relatively minor in nature and could be repaired within short order. Habitat and working with the sweat team, which is a nonprofit group or a set of volunteers out of Denton Bible, they're coordinating those repairs, I believe, starting in the month of May. And they would have started a lot sooner, but COVID stopped a lot of things. And so they were not able to get started as they had hoped, but they should be starting up here in the month of May. As I mentioned, the city was working with the property owners of those dilapidated structures. To date, 13 applications for demolition have been issued. Of those 13, 10 have been demolished, and the other three were still working with their respective property owner to get those sites cleaned up and cleared. As far as connecting to the city's water system, the city sent out a large packet of information. A lot of stuff was happening in the month of March. The city sent out a large packet of information, just under 40 pages of information, both in English and in Spanish, to all the property owners and residents at Green Tree. The premise behind it was to give them very clear, concise, and step-by-step information on how to connect to the city's water system. And that was intended because at the request of the residents, they wanted to be customers, and so we wanted to make sure they had all the information they needed. To date, the city has not received any requests for the connection. In conjunction with that letter, we were planning on having a meeting with the residents, a face-to-face meeting with the residents at Subdivision, and it was scheduled for March 21st. And that was to go over the letter to make sure they understood the OSSS, basically the septic systems. We had included a frequently asked questions component, inspections. I mean, it was very comprehensive, the mailer. And so we had scheduled a meeting for March 21st to meet with the residents. Unfortunately, that meeting was canceled because of COVID, certainly at the request of the residents, and it was a right call to make to not meet face-to-face because so much had started to, with the pandemic, so much started to happen by mid-March. And so folks were scared, understandably so. So we decided to cancel that meeting. We were also going to have a follow-up meeting in April prior to the presentation to the city council, but as a result of the stay-at-home order, along with the continued pandemic situation, that meeting was canceled as well. As part of the mailer, and again, just to kind of give you graphically what we included, it was this graphic. Again, not drawn to scale, but it allowed the residents to understand where the bank of meters would be set. If we were going to install 14 meters for those 14 homes, it would be set right at the neighborhood boundary. And so it gives sort of just an artist's depiction of how the project would work, and that the responsibility of the city, the responsibility of the owners, and so that way those things could be outlined, and again, just more informative for the residents so they can understand what was to take place. Again, that was just one of the pieces of information that was included in the packet. The next component was the fees piece, because one of the components is obviously paying the tap meter and impact fee of $6,938, in which, as you can see, that fee is static. The other fee is a variable fee, and that is the component, if I go back a slide, and I believe my mouse is working, there is a component that there is to where my mouse is, there's a section here where there is a water line, and then this piece here, this dash line, this double dash line to the bank of meters, is that variable fee. That is to connect the bank of meters to this water source here where my mouse is running, and so that variable fee, it's contingent based on the $9,204, that's the estimated cost of staff time and materials cost to connect that. Based on the number of meters that would be connected, as you can see, if one person connected, that person would, in theory, absorb that entire cost. If more people connected, then that cost would be shared amongst those that are connected. But as you can imagine, more than likely, people will be connecting at different points, and so trying to work out a payment system would just be proved very difficult. So one of the things that City Council, we had brought to City Council back in early February was would there be a possibility under the emergency declaration for the city to cover the $9,204 that allows for that fee to basically be absorbed as part of the original $100,000 emergency declaration amount. And so that way, it takes that piece out of the equation for the residents. So really, the resident would be responsible for the $6,938. That way, the fee is fixed, they know exactly what they had to budget for, they know exactly what the fee is to the city, and there's no variable cost for the residents. And so that was one of the big concerns the residents have because if one person connected, they would, in theory, would be responsible for nearly $16,000 of a fee. That just seemed extraordinarily high, and then for the city to try to collect the remainder or for the resident to try to recoup his or her cost amongst 13 other potential customers, that would prove problematic. So that was one of the options we brought forward to council. The council seemed receptive as long as there was progress with residents wanting to connect. So I just wanted to share that with you. That was part of the information that was sent to the residents as part of the mailer that was sent in March. Here is just a depiction of the subdivision. There's 14 homes or 14 structures that are receiving water today. Of those 14, five, the homes in blue are owner-occupied. Those in gray are renter-occupied. So again, just mentioning that 14 homes are being served by water as we speak. They receive water three days a week, Monday, Wednesday, and Friday, including holidays. And so that's done rain or shine, all weather. So even during the issues with the pandemic and the stay at home, the water was still being delivered to the residents, and of course, our employees were observing appropriate social distancing requirements. As I'd mentioned, a lot was happening in the month of May, early May, excuse me, early March. By mid-March, things changed for everyone. So a lot of momentum has been lost for the last six-plus weeks. As you knew, the stay at home order by the mayor and council was issued back on March 25th. That technically ended April 30th. As I'd mentioned, our employees were delivering water, however, we were having to maintain split crews. We were making sure that employees were observing social distancing, that we wanted to make sure that we're keeping our employees safe and keeping them from having to be quarantined. And so far, so good, we've been able to manage that and not have any issues there. So services were not disrupted for the residents. As offered before, city inspections could be provided. We've been able to be able to do the inspections remotely through our building inspections. So if a resident or property owner is ready to connect, the city is willing and ready and able to do the inspections in some cases without even stepping foot on the home. There may be some requirements with the residents to be able to utilize their smartphone or an iPad or tablet device to be able to show the piece that needs to be inspected and the inspector can be able to, through a variety of angles, be able to determine whether the improvement has been done appropriately. So we've been able to do a number of things, and as mentioned before, our inspectors are doing inspections all over the city. So our city was open even though it was in a modified manner. So with that, before I go into the staff recommendations, does anybody have any questions at this point that I can answer? Go ahead, Charlie. First of all, kudos on the demolition permits. After having visited there, there really were some really horrible problems with unoccupied structures. So thank you for doing that. You showed the 14 people who are receiving water, but as I looked at that neighborhood, that represents what, 40% or so of the total homes, do the rest of those homes have access to utilities from the water well, from other sources or are they without water and unoccupied? Actually, the remainder of the, and I can go back to that slide so you can see, can you see that? The remaining are, with the exception of the actual owner of the entire subdivision, which the gentleman, I believe approximately 50 or so lots in that subdivision, and the major property owner, I believe, owns about 30. The other 20 or so or 15 or so are owned by a variety of owners. The others, actually, those are, they're not inhabited, there's no structures out there. Those that are living, those that are occupied, those that are shaded are the people that are actually living in the subdivision. The rest of them, I don't know why the aerial map, the way it shows, shows these structures, but there are no other folks living out there. Some of those are just former structures, so no one else is receiving services with the exception of the owner of the well. And my understanding is he's receiving water through his own well, and so he just stopped delivering service to the rest of the residents that are living out there. I don't know, I hope that answers your question, Charlie. That does, thank you. Okay. Ed. Yeah, I, just a question, I see, if I'm correct, Habitat for Humanity inspected five structures that were owner owned that weren't being rented, is that correct? That is correct, sir. So I find it curious that the rest of the structures, which were rented, have had no courtesy inspections at all, and I wondered if, who was contacted about that, the owners, the actual owners of the property or the renters, because I could see a situation where a renter might be afraid to ask for an inspection because if something is found that needs to be fixed, that person has to go to the person from whom he's renting. Yes, you're correct, but our policy has been that we notify the occupant of the structure along with the property owner. Okay. So both. And to follow up on that, is there any way to find out the results of Habitat's inspections? Well, we could, except that Habitat, prior to them stepping foot on the properties, they were required to sign non-disclosure agreements, and so as a result, those results have not been shared, which was surprising, and again, I want to speak for or against Habitat, but they were surprised by the fact that that needed to happen. We had, I had reached out directly with one of the board members that was working as part of the volunteer group to do so, and I had requested, once you start, if you would, please, once you do your inspections and you've had the time to kind of create your list, would you please share it with the city? We're not gonna do anything with it, but it's just nice to know what are some of the issues that you found so that if there are homeowners or property owners or residents that are willing to and ready to start connecting, we can work directly with them and try to help move the process forward. I waited a couple of weeks after the inspections, reached out to the board member, and he said, "I would love to be able to share it, but I can't because we were required to sign non-disclosure agreements." And who were they required by to do that? Well, the residents, they signed it directly with the residents, and it's my understanding that there are some advocacy groups working with those residents, and I believe they were they were advised to do that. Thank you. Anyone else? Okay, can I go ahead and continue for the remainder of the slides? Let me pull everything back up. Okay, everybody see it? Okay, so can you hear me okay? Okay. Sorry. This is new, just trying to get used to everything. So what we did, knowing that the declaration was supposed to expire on May 22nd, just within a few weeks, and knowing that the pandemic had caused a lot of disruption, we knew that there had not been anything done, at least any connections with the city and the property and homeowners out there. We were going to be recommending from staff to City Council that the City Council extend the declaration through July 31st. This would give homeowners, property owners, additional time to go through the process. Again, keeping in mind, we don't know the extent of the details regarding the inspections, but we knew that they were relatively minor in nature and that it would take a few weeks to complete. Some of them can be done, I believe, by the homeowners and property owners themselves. Some of them would require some help from outside sources for the sweat team. So based on that information, we wanted to indicate that if the inspections would be completed by mid-June, and if property owners would pay the fee by July 3rd, and the meters set by our staff by mid-July, it would give residents and property owners the ability to coordinate with each other, with contractors, plumbers, and to be able to get the work completed. We felt that if we can get in front of City Council early May, and then now that the PUB is up and operational again with you all, that it would give the residents approximately two additional months to be able to get a lot of this work done. And so again, within keeping the fact that the residents are wanting to connect to the city's water system, they understand what the fees are. The fees have not changed. The city is willing and able and ready to start work. We just need to sit across the table with the residents and property owners to go ahead and begin planning for this work. So as a result, we felt that adding some additional time was prudent and would give the residents the time that they needed to coordinate the effort. So that's what we were recommending, is to extend it through July 31st, the city would still, through its emergency declaration, cover that $9,204 cost of a line extension that I'd mentioned to you earlier, that variable fee. That way is to fix costs for the residents. And at that point, on July 31st, or in essence, August 1st, the residents would become regular water customers of the city. And then as a result, by July 31st, the emergency would end and we would stop the temporary water service that we've been providing for the last several months, three times a week. We met with the residents a day ahead of time via a Zoom call. So we had a number of residents on the call, including some property owners. The residents expressed vehemently that they've experienced financial and employment hardships as a result of the pandemic. They did assert that they've been demonstrating progress by having Habitat for Humanity do the inspections of those owner occupied structures. So as a result, they had requested a longer range plan. In fact, they had requested that the city council consider the input they gave us and that we would pass along the city council is that the city council should extend the emergency declaration until May of 2021. So an additional year worth of time. We duly noted and got that information. The city staff in conjunction with the call and keeping with the amount of money that was set aside of the original 100,000, we were able to calculate that we could potentially offer sort of a mid-range solution. And so one of those was to potentially have council consider an extension through mid-November that would give the city, excuse me, the residents additional time beyond July, but not all the way into May of 2021. So both the long range, both the, well, all three, the three options were presented. The July 31st option was presented to city council last Tuesday, the mid-range option through November, mid-November of 2020, and then the long range option that the residents requested of May, 2021 was presented to city council. There was quite a bit of debate with the council and discussion. And so, and I'll cover that here in just a moment, but in kind of in summarizing, and I'll give you here what council ultimately directed. So in summary, services are still being delivered through May 22nd of this year. Utility payments are still being accepted and are ongoing. I believe there may be one or two folks that have not been paying, but that's as of recent. It hasn't been long-term, it just here have been a recent issue, but we're working with those residents. City, as I mentioned, is addressing and or has addressed many of the substandard structures out in the subdivision. We still yet have not received any inspections, but we're hoping that through the work that Habitat is doing beginning in May, that that will begin. And then we're ready. We're ready to work. We're ready to get going and connect those residents up with water once they make the requisite repairs and make the payments that are required. So based on all of this, this information was presented to city council last week. Ultimately, the city council gave the following direction from staff to staff. So again, as I mentioned, it was a lengthy debate and very lively conversation. So the staff, the council concurred with extending the declaration through the end of July 2020. They would also consider waiving the $9,200 fee. So really they concurred with everything that the staff offered originally in its original recommendation. There were a couple of extra or two or three extra items that they added to the direction. They wanted to make sure that no new customers in Green Tree Estates could establish water after May 5th. What had happened was one of the renters vacated the property, moved to a different area, don't know where, they vacated the property. That landlord then re-leased that property to another occupant. And so that was recent news that we found out literally the week of last week, the week of the presentation to city council. So the council was concerned that how could a property owner, landlord continue to allow other properties as they become vacant to continue leasing to folks that do not have and not provide running water. So as a result, that was one of the conditions that they made is that no new customers could be added to the city under the provision in which we're working in now. The other ones are pretty similar to what was presented before, the customer inspections to be completed by mid-June. The new one that they added was that a head of household living at Green Tree Estates must establish a utility account in their name. The way it was structured right now, it was literally account one, account two, through account 14. And so the premise was to understand not who's living in the structure, but just to make sure that accounts are made in their name so that, again, as I've mentioned in that first bullet, if something transitions out there, someone transitions out of the unit, they can't acquire a new service. So that's just another safeguard so that new accounts would not be added to the city's account system. And the last piece was really more a reporting item that on July the 14th that staff would come to city council because many of the deadlines as far as the payment and inspections by then would have been completed or should have been completed based on the direction that we had requested of council is that we would report at an upcoming work session to city council in July and just give them a progress on how things are going. And so that would give council an understanding is how serious is our property owners and homeowners willing to connect to the city's water system. And then by the end of July, if the declaration would stop and then we would cease with providing services there to Green Tree if people aren't connected. So that's really all I have. That's the direction that city council gave. We are in the process of last week, late last week. We sent a letter to all property owners, tenants, homeowners, et cetera, that live out at Green Tree and own property at Green Tree. We sent them a letter with this information and these deadlines will be presenting to city council tomorrow afternoon a revised or new ordinance that extends the declaration to the 31st with these provisions. So that's what's being presented tomorrow and it will go into effect immediately. So that way we can continue providing that service at the end of July and hopefully make progress with the residents out at the subdivision. Any questions? >> Yes. Barbara, you go first. >> Yes, how are you -- you've sent the landlords the notice about not being able to connect with water. How are you going to monitor that to see that they do not lease a property if it becomes vacant? >> Well, as I mentioned, if a structure becomes vacant, they have to have water and the city right now is providing that water service within three days a week. So they would have to call customer service and set up an account. And so now I guess in theory a property owner could -- a landlord could release a structure out there, but then the resident that's living out there, when they connect to city water, it would be prohibited of connecting them or -- I'm sorry, not connecting them, providing that service. So they would be without water, and I would assume that they would then go back to their landlord and complain. >> I can see that someone renting it and getting moved in will not necessarily know, and then by the time you try to work it out with the landlord, that person is there and has spent money to move in. And they, you know, are without water. And I can see a time lag in there that will cost the tenant money, and then ultimately they'll have to move out, so. >> Well, you know, that's one of the things is that's why we wanted to hurriedly send the notice out to all the residents and property owners out at Green Tree to make them -- make sure that they fully understand the council's direction and, you know, we can't be out there and fully be involved in those private transactions, but I would hope that the property owners understand that and then will abide by the council's direction. >> Russ, I think you had your hand up before, Charlie, so we'll do Russ and then we'll do you, Charlie. >> Okay. Yeah, it occurs to me that the $6,938 tap meter and impact fee, if you compare that cost with the appraised value of the properties that you showed on the agenda item sheet, page 3, that cost is at least 50% or more of the appraised value of their entire property. And it seems to me it's going to be unlikely that -- or there's going to be a high likelihood that this is not going to get paid by the people who rent there or by the people perhaps who own the property. So I think the council needs to be prepared to say, okay, they're not going to pay that. They're not going to do it. So we're going to stop giving them water or we're going to do something like that. So this is a tough predicament that the city of Denton finds itself in right now. And I think the council would be wise to figure out some way to make this $6,938 fee less or spread it out over two or three years, something like that. I think when a person has a property, living in a property that is valued at $10,000 and you tell them they've got to spend $7,000 to get water, there's a good likelihood they're not going to do that quickly, in my opinion. That's my thought. >> Charlie? >> My question had to do -- Rush, you read my mind on the valuation. I had not gone so far as to look up the property valuations. But, yes, spending $6,000 in impact fee on a $10,000 property does not make sense. My question, though, is it looks like from the diagram that the meters will exist at rolling green and ash, basically, in location? >> Correct. It will be within -- I'm sorry, Charlie, it will be within the subdivision, but in that vicinity. Yes, sir. >> Okay. And if I were to pay my $6,900 to get a tap there, does that mean that if I lived over on Hillcrest from Google Earth, it looks like it's about 1,000 feet, I would also have to dig 1,000 feet of water line to get to my property from there? >> That's correct. That's part of the reason is why we're wanting to work with the residents and literally sit across the table, and I know, obviously, this is different times, but the proverbial sit across the table and make sure that this effort is coordinated because we believe there's some economies of scale if the property owners -- and I'm using the property owners basically sort of synonymous with the owner-occupied structures and, you know, the district properties themselves, they're the ones responsible for coordinating this work that we can sit across the table and have this work coordinated so that they can, you know, utilize the same contractor to do the trenching, the same contractor to do the plumbing connections, et cetera. There's opportunities there for some economies of scale, but at some point, there needs to be a coordinated effort between the property owners and the city to make sure that it's done well so that there's not any incurred or additional costs that's unnecessary for anyone out there. So part of that is just literally just sitting across the table and working through the process. >> Billy, just as a ballpark, would -- if -- even if you were joint venturing the water lines, is five bucks a foot a safe minimum? Ten? >> Oh. No. Okay. >> I just don't know. I don't know the -- I mean, we can get that information for you and let you know kind of what that cost might be as far -- you talk about just the trenching itself or just the work itself? >> I'm just talking about putting in a one-inch water line deep enough to not freeze and make code. I didn't know if that was $5, $10, $15 a lineal foot. >> You can find that out, and I'll get back with you on that. >> I was just asking Billy because he's probably got the most educated guesses. >> Yeah, smaller scales like that, it is very difficult, and it's going to be very high. And it's not just going to be the one-inch water line, although the city's paying for some of the access for the service lines. But, you know, the impact fee is, you know, predicting down the road the eventual effect of that water, streets, drainage, sewer, the whole bit. And it's about a service line on a brand-new subdivision is going to be $1,000, $1,200. But to go out there and start in a new area where you don't have new infrastructure, you can probably double that in real cost. >> Okay. I guess I echo Russ's sentiment that it's an insurmountable obstacle for the people who live out there. They're talking about something on the order of $20,000 to get a water line to their house that's in and working. And when the properties are worth $10,000, that becomes something just about impossible for folks who would be living there to do. >> Agreed. I did hear or see that there's a charitable fund that's been established, too, so this is a tough one. It's really tough. Any other questions? All right. >> Thank you. Appreciate your time. >> That is the full agenda. Do we have our motion to adjourn? >> So moved. >> A second. >> All right. We are adjourned. Hopefully we get to see each other soon.