Jul 27, 2020 Public Utilities Board on 2020-07-27 9:00 AM

We do have a quorum. It's 9.02 and we're going to call to order the Public Utilities Board of the City of Denton for July 27th, 2020. The first item on the agenda and I'm going to pull item A that will give Billy an opportunity to not vote or abstain from the vote. Does any board member wish to pull another item? What item did you say, Susan? E. Yeah, C is in Charlie. And I had a couple of brief questions on A and B. A and D is in Donald? No, B is in boy. Okay. Oh, and also F. Sorry. All right. So Susan, or I guess Larry, do I need to just leave the meeting and then get Kim to let me back on after this discussion? Correct. Okay, so I'm not sure how that's going to work and when she'll tell me it's over. She can email you or text you. Okay. So. So then we have item D. You wanna go backwards? Could we approve item D? Motion to approve. I move we approve item D. I'll second. All in favor say aye. Aye. Opposed? Okay. Why don't we do item E first so that Billy can get off and then we'll come back in and he can hear the rest of the discussion. I didn't really have any questions on it. I just knew that we needed to give Billy the opportunity to. Yeah, I have a question, Susan. Okay. On the spreadsheet that shows a summary of the bid amounts, there are dollars shown, there are quantities shown, but there are no units of measure shown. So that needs to be shown. For instance, there are 740 something at a price of so many dollars, but the units of measure are not described on the sheet. We have Laurie Huell. She's our purchasing manager. She's on the on the line. She may be able to give some insight on that. Hi, yes. Laurie Huell, purchasing manager. We can add that to there and send it out to you. Yeah, we need to see that. That's an important piece of information. Okay. That's all I had. Do we have a moment to move the item? One silly question. What does PEC stand for? PEC stands for Pecan Creek. That's just part of a drainage area within the city. EEC4. Okay. That's just one of the branches of the concrete drainage ways through the city. I don't feel as stupid for not knowing what that was. That's okay. I'll move approval. Second. All in favor say aye. Aye. Okay. We can get Billy back on. I've got it, Doc. Hold on. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. I'm sorry. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. And he's back. Okay. Item A. Karen, what was your question? Yeah, I just had a quick question clarification on A and B. So maybe we can vote on both of those. I just wanted to clarify that if a vendor is on the pre-qualified list that then it doesn't go out for bids. Is that why these two items didn't go out for bids? Or we don't have a bid list at any rate. That's correct. Ms. Huell is on the phone as well. She'd be able to explain that. And we should have someone from solid waste as well. Okay. Just clarification of policy here. Sure. Yeah, that's correct. When they use the pre-qualified list where we sent the RFQ request for qualifications out, and then we brought that list to council. Here's all the firms that were pre-qualified. If they're using someone from the pre-qualified list, we do not have to do another RFQ. Thanks. Just wanted that sort of to clear my head. So I would move for approval of A and B, unless anybody else has questions? Carolee, did you have a question? One quick question on item A. That's a pretty stout amount for engineering and design services for a project. Do we have a ballpark idea how much the total expenditure for the public disposal area is going to be? This is Tina Eck, the senior business analyst for solid waste recycling. Part of the design process will be to determine that full build, the full construction cost for the facility. So you don't have a budget number? The budget number would essentially be that design services, if you estimate that being about eight to 10% of the total construction cost. Okay. So does that mean that rough numbers you're thinking about spending a million and a half dollars for a public disposal facility? That would be our estimate at this time, yes, until we get that design estimate back from Biggs and Matthews. Okay. I'll just note that that seems like an awful lot of expenditure for something we already own the land for. And maybe I'm missing what's included in the design facility, but I am concerned about the level of expenditure for that. The disposal facility will be where all of our public traffic is routed. So if you think non-commercial traffic, it's meant to be a safety improvement as well as a process improvement to get all of our smaller traffic vehicles away from the booking space site and to have them an area to essentially deliver their trash to more safely. So it's not just for the, say, recycling drop-off. It'll be more expensive than that. Mr. Parker, I think there's also going to be expenses on flat work, concrete work, as Tana mentioned, rerouting that to separate commercial and residential traffic. So there'll be a lot of concrete work, probably a building of some sorts to be able to accommodate those folks that come through. So there will be an expense. So it's probably well over a million and a half dollars to do that kind of work, even though we own the property, but it's just a construction work that's going to go along with it. Okay. Thank you. All right. We had a motion by Karen. Do we have a second? Second. All in favor, say aye. Aye. All opposed? I'll go opposed on that, please. Okay. So just to clarify, my motion was for both A and B. Right. I think Charlie is just objecting to A. That's correct. Should we have another vote on B? I'm good with B, if we want to formalize that. Larry had. Let's just go ahead. Since they were pulled off consent, take individual votes. Okay. Okay. So I move for approval of B. Second. Okay. All in favor, say aye. Aye. Opposed? Okay. Are we good? Then item C. Yes, I had a question about that. This is not so much about the cost here described, but rather the event that happened that we had to clean up and repair and so forth. I'd like to ask some questions about that. Mainly, did we – did anyone ever create any kind of a root cause analysis or report on why and how that failure happened? That's a question for management, not really for the purchasing department. Sure. We've got Ken Banks on the phone who should be able to answer those specifics on what happened in that – on that incident. Good morning, board members. Can you hear me? Morning, yes. Yes, good morning, everyone. To answer the question, yes, we did. We went back and took a look at exactly what happened. In reconstructing those events, sometimes it's difficult to tell. We basically had a catastrophic failure at the bell housing of the pump. We believe that that was caused by a water hammer event that likely happened with an interruption of electrical service out there briefly and corresponding water hammer event that went down the line. Basically, those rebounded, came back, and caused the bell housing to lose integrity. So we believe that that is what caused the problem. I can tell you also that we have – we've got a brand-new pump station going in there. It's nearing the end of completion of construction. We've got a few more things to do on the piping. We've really focused our efforts on trying to ensure that we have redundancy and bypass options that do not require us to cross Old Alton Street near the bridge. If you recall, we had to bypass and basically go to the live station for Upper Trinity to pump the waste until the repair was effective. Now we have a bypass with a direct pipe in that will allow us to use an on-site emergency pump and continue to operate the force main if we have a catastrophic failure in the new live station. So we've got a much more redundant system in place now with the new live station, and we have the ability now to do a very high level of bypass without having to cross the street. So we feel like we've got a reasonable idea about what caused the event, and it was something that really couldn't have been managed for effectively. The new pumps will be able to handle that in a much more better fashion. And then at the same time, we really focused on ensuring that we had on-site bypass capabilities so that we could respond to an event like that again much more rapidly and without having to cause the inconvenience for citizens of us having to cross the street. Okay. That's good, Ken. I guess my question is more a matter of internal processes and the department for future – the future knowledge of future employees and so forth here. If there's something here that can be learned, that can be documented, it would benefit people down the road to know how this – exactly how this happened, how we think it happened, and what could be done. Absolutely. Yeah, and that's definitely something that we can put together. It's – the issue is it's not going to – with the new live station and the new pumps, we don't feel like we're going to have a similar event, but we have documented what we felt was the cause of the situation. And certainly, we're in process now of trying to coalesce all those post-event documents and really trying to get those into a centralized location. And this will be one of those documents that we add. Yeah, I would suggest that if we – if we don't already have a written procedure or policy about doing a formal root cause analysis whenever we have a failure that results in a permit violation – this was a permit violation, right, of our – That – yes, that is correct. It resulted in a sanitary sewer overflow, so it is – absolutely. So I guess my suggestion is simply this. If we don't have a formal written policy or procedure for initiating an investigation on something like this, then I think we should think about creating a policy or a procedure that would require it to be done whenever there's a failure like this that results in a permit violation or some other big event that happens. That's my – that's really my thought and my suggestion in this. Yes, absolutely. We have – we definitely have standard operating procedures that require an investigation for any on-site sanitary sewer overflow that we have. I will review those and make sure that we have something in there that talks about lift station failures in particular. I am pretty sure that we do, but I will go back and verify that. If we don't, we'll get that added to our existing SOP. Yeah, okay. That's my only concern. With that said, I move – Wait, Barbara has her hand up. Now, wasn't Hickory Creek the one we just did a lot of work on and replacing stuff? Am I – is my timeframe correct or is the work not completed? Yes, ma'am, you're absolutely correct. We've got a new lift station there now. It is in – it is nearing completion for its construction. We anticipate on having that online. We're doing a few more bypass options, so it's taking a little bit longer. We had originally thought that it would be done at the – near the end of the summer. We're looking at a date now of into the fall, and that's simply because we're adding a couple more options to that system to allow us to more effectively bypass. Okay, and secondly, I didn't see anything about a fine, which usually – was it because it was reported so quickly or – We have not received any information from the TCQ indicating that we have – we will incur a fine. They have taken all of the information. We were in contact with them during the entire event from the – right after it happened through all of the information exchanged with them as we facilitated the repair. We feel that we did a very good and very responsive job. I believe they feel that as well. So we have not gotten any communication from them since the event that they are anticipating a fine. It's a possibility. It always is, but I think that it's likely the look at this is just simply a force – or a catastrophic event that we had no control over. Well, that's good. I was also glad to see that local vendors were used on this job. I always like to see that. Yes, ma'am. Ed has a question. Yeah. Ken, I have a question. You used the term – I think you said water hammer? Yes. What – can you tell me what a water hammer is, please? Yes, it's a pressure wave that is caused by a quick turnoff and turn on, if you will, of the flow of water through a pipe. It creates a pressure wave that has a tendency to move down the pipe and then come back and can cause some pretty significant pressure on the pipe when it encounters the – a valve, for example, or any other type of obstruction of flow. An example would be if you've ever had a bathtub where you turn on the hot water and turn it on real – or turn it off real fast in the pipe rattles. That's a small water hammer. Okay. Thank you very much. Sure. Any other questions? Charlie? I would like to move approval, and I would also ask that we note our thanks to the people who dealt with the triage on this event. I'm guessing there was some really nasty work that took place, and on behalf of the citizens, tell those people thanks. Second. All right. We have a motion and a second. All in favor, say aye. Aye. Ghost? Carries. I can't remember who pulled F. Is that you, Russ? No, that was me. I'm sure Russ has a question as well. But I just had a quick – another quick clarification. So for this contract with Genscape, I was just wondering if there was any software involved that would need tech support, or if tech support was part of the contract. I didn't notice it listed. Or is this just a sort of information feed that we're contracting them for? And the software is our own responsibility. Terry Lutrick – excuse me. Terry Nolte, excuse me, will be able to give you some insight on that as well. You're muted. Good morning, Terry Nolte, Assistant General Manager, Amy. So Genscape is a data feed. It provides us with relevant market information about the generating status of all the generation units in haircut market. It's a piece of software that we have had under contract for a number of years, and this is a renewal of that contract. It's critical information for us to put together our bids and offers into the day ahead in real-time markets. Yeah. So is – I mean, do you anticipate any need for tech support or upgrades or anything like that? I think this is a four-year contract. Yes, it is a – I believe it's a three-year with two one-year extensions. As I said, we've had this piece of software in place for a number of years. It's the kind of Cadillac of systems available in – throughout North America, and it's supported primarily by the vendor. Any software upgrades are just pushed to us by the vendor. Okay. So it does include upgrades and – Yes, ma'am. Okay. Thank you. Any other questions? Honestly, I do have a question. Terry, this – it's described as a sole source. The only ones that can do this, that's this group here, do they not have any competition at all? Because I'm wondering if, from what I read in the description, they're taking information that's available from other locations and basically compiling it and making it easier and quicker for you to use. Is that right? That's partially what they do, Mr. Bafford. But one of the unique things that Genscape does is they actually have field-located meters that measure the magnetic fields around the transmission systems that are exiting each of these power plants. And so while information that is publicly available as to the status of the facilities, Genscape provides real-time information where we can get that information quicker than through ERCOT or other publicly available means. And in our business, since prices change every five minutes, having that real-time information is critically important. Okay. Thank you. You're welcome. All right. Do we have a motion to approve? So moved. Second. All in favor say aye. Aye. I'm sorry, Ed, did you have a question or you just? No, I was second or I was second. Okay. All right. So the next item is consider approval of the minutes of July 13th, 2020. Does anyone have any corrections or changes? The attachment that I received was for June 22nd. Does anybody have the minutes of July 13th? I'm just looking at something weird. Huh. I thought I read July 13th. Yeah, but the actual attachment says June 22nd. Oh. Yeah, you're correct. Since I missed that one, I was curious about it. Looks like there may be an attachment error. So we may need to postpone that vote until the following meeting. I may ask the city attorney to weigh in on that since the wrong attachment was included in the item. Moved to table until the next meeting. Second. Okay. All in favor say aye. Aye. Okay. I got to leave again. Yes, you do. So Larry, I'll sign off and then ask to join and you can just let me on afterwards. How about that? Okay. Barbara? Question of Billy before he leaves. Yes, ma'am. What is a fire hydrant lateral? The lateral line coming from the fire hydrant. It goes laterally. It's just a term for a fire hydrant attack, you know, the water line attached to the fire hydrant. Okay. Thank you. Keep it. Okay. I'm out now. Bye. All right. Who's presenting this one, Mario? That's a good question. I believe we've got Trevor Cain on the line along with Becky DeVine. So I'm going to reach out to them. Yeah, I'm here. This is Trevor Cain. Can you hear me? Yes. You may need to call them the caption, Susan. I'm sorry. Oh, you want me to read the caption? Yes, ma'am. Consider recommending the adoption of an ordinance for the city of Denton, a Texas home rule municipal corporation, authorizing the city manager to execute a contract with Jagle Public Company for the construction of the McKinney Street/Mayhill intersection project for the city of Denton, providing the expenditure of funds, therefore providing an effective date award to the company and not to exceed $4,391,631.04. Susan, before we get started, Trevor, is someone supposed to be bringing the presentation up here on site or do you have the controls remotely? I do not. I was told just to call in. Okay. All right. Can we take just a five minute break so we can kind of get our act together here on site, if that's okay? Could we do that just for a few moments? Okay. We're back from our five minute break and we're going on to the item for the McKinney Street/Mayhill intersection project. Go ahead, Trevor. All right. Good morning. I'm sorry for the mix-up here, but we'll make it work. So y'all should be looking at the title slide, the McKinney/Mayhill intersection improvement. We can go ahead and go to the second slide. It shows the project overview. This project is the actual McKinney Street/Mayhill intersection. It includes traffic control, paving, drainage, sidewalks, street lights, traffic signals, pavement markings, and water and wastewater improvements. In essence, it's just the actual intersection and about 300 or 600 feet each way. It ties in in the middle of the current McKinney Street widening phase 2 project that's currently underway. We can move to the next slide. These are the bids that we received. We actually got three on this project. To the far left you'll see Hewitt dollars, OPC. Jago Public Company was the low bidder. They actually came in a little bit lower than what we were looking at, but pretty much right on budget what we were looking at. We can move to the next slide. This is our construction schedule. We go to council tomorrow pending a decision here. Notice to proceed, we're looking at middle of August and it's a one year contract. So we're looking at August 18, 2021 to be completed with this project. The next slide is just the recommendation. We recommend adoption of an ordinance accepting the competitive low bid that award a public works contract for construction on McKinney Street/Mayhill intersection project to Jago in the amount of $4,108,575 plus a contingency in the amount of $209,125.29. For the total not to exceed amount of $391,631.04. The next slide is just the question slide and that's the end of the presentation. I can take any questions that anybody has. Barbara, go ahead. Yes. Give me an example of a contingency at the city's discretion. What would that be like? So this 5% is something we're starting to add to contract. It's really just a mechanism for us to do if there's a quantity adjustments or change orders that fall underneath so that we don't have to go back to count, these will be things, you know, some items to that nature. Okay. Thanks, Matt. Yeah, I have a question. On the agenda information sheet, it says it makes reference to 600 liner feet. What is a liner foot? That's probably a typo. It should be linear feet. I would suggest when we deal with something that involves this much money, we have somebody proofread these dimensions because I can guess what it means and usually come pretty close, but it should be very clear. Another thing, another question. You mentioned 600 linear feet. Is that 600 feet west of Mayhill and 600 feet east of Mayhill? Is that what that means? Yes, sir. 600 linear feet east and west of the intersection. Okay. Thank you. Yes, sir. Other questions? Do we have a motion to approve? I move, we approve. Second. Okay. All in favor say aye. Aye. All right. Management reports. Yes, Madam Chair, members of the board, good morning. You have a number of attachments in the management report. You've got that. Do you want to wait for Billy? Oh, I forgot. Good point, Larry. Yes, Barbara? Charlie asked the question about all the verbiage in the agenda and to answer your question, yes, it has been since I was on here another time. There's verbiage at the beginning of everyone and Mario maybe cannot tell us why, but they consider recommending the adoption of the ordinance, home rule, municipal, blah, blah, blah. Why is that at the beginning of every agenda item? It did not feel like that. I'm not following your question, Barbara. Okay. At each, on the agenda, each one starts off with consider recommending the adoption of the ordinance of the city of Denton at Texas home rule municipal corporation or raising the city manager or his designated to execute the contract with. And that that verbiage is at the beginning of every item. And what is the reason for that? Larry? I can jump in. So, PUB is just making a recommendation and it's to comply with the open meetings act about what the PUB is doing. So you're considering making a recommendation for council to take an action. We've added city of Denton, Texas home rule municipal corporation. That's the official legal description of the city. And that's why we've done that. The charter is strange in that Texas in that Denton is just known as the city of Denton. It's not known as the city of Denton, Texas. And so that's why we go ahead and add all that. Could that be added at the beginning before before it just said the following items are considered recommending instead of each time, because every time, you know, you have to quickly sift through that because oh, yeah, they printed that again. Could you just put that once at the beginning of the agenda to all items that it applied to and not have to constantly be skipping over that because you've already read it on the first, second, third and fourth items? We can look at that. The bigger issue is one of complying with the Texas Open Meetings Act. One item, one action. And that may look like you're taking like with consent. We're able to do that because we're stating on consent. It's all being acted on. We can look at it I'll be honest with you. It's always been done that way. And no, we're the first part. Well, it's always been done that way since I've been here. And so there may have been another way we can certainly look at that. Well, before you were here, it did not. It was not done like that. Oh, just saying. Well, I can give you a little brief history. There have been council members since I have been here that have wanted to have great detail put in the captions that is really way beyond what the Open Meetings Act requires. But that's the direction they've asked us to go. And we've accommodated that. Understand. All right. Management reports, Murray. All right, I'll start over. Madam chair, members of the board. Good morning. You do have a number of items listed and in this month, or excuse me, this meetings report, we've got the energy center informal staff report and dashboard. I know the board has requested that on a number of occasions. And this is the latest version of that. And we've got staff from DME that can respond to those questions along with finance if you have any. And then we've got the identity theft prevention program during the emergency declaration. Got information on that. Krista Foster should be on the line to be able to answer any questions that you may have. And then the environmental preferred procurement request. That was a request that had been made previously, I believe, by Mr. Soph. And we're providing you all what we've done so far. I know that our staff is looking over the next coming months to be able to add additional components to the environmental preferred procurement policy. So that will be coming forward to the committee on the environment here in the near future and then ultimately adoption by city council. As far as future agenda items, you have those listed there. And then as far as today, we would have been covering items regarding the budget on the utilities. And I believe we are covering a few. But the majority of those would be covered next Tuesday, excuse me, next Monday on special called meeting. And then lastly, it's just any new business items that we have on your report. Any questions that you may have on any of these reports that we can get staff on the line for? Yes, I have one. Ed's hands up, too. So we'll go to Ed first, then you, then Gerald. I had a question regarding the DEC report. And that question is, in keeping with Denton's sustainability goals, is there a policy or initiative in place to offset the DEC's greenhouse gas emissions? Terry Nolte will be able to answer that. And I believe Ken Banks is on the line as well. Good morning. Terry Nolte, Assistant General Manager. There is no current policy at DME with regard to offsetting those carbon emissions. I think as the board knows, as 100% renewable supplied utility, the metric that we use for determining that 100% renewable is based on the renewable energy credits that we have associated with contracted renewable energy resources, those equal the total load that served over the year. And therefore, we net to kind of a zero sum game on carbon to serve the load. However, we do not have any active program to account for those carbon emissions that take place from the DEC. We are looking at a number of technologies. Recently, there's been a lot of work on introducing hydrogen into natural gas pipelines as a measure or a means to offset some of those carbon emissions. If you combust hydrogen, there are no carbon emissions from hydrogen. However, that is in its infancy across the United States. Interestingly, the Wurzilla engines at the DEC do have the capability of processing natural gas combined with hydrogen. Is there any – do you think, Terry, there's any interest between, say, DME working with the sustainability folks in working out some sort of means of offsets until there is a technological advance where the emissions are reduced? We'd be glad to work with sustainability on what the options are and determine whether that's something that the PUB or the council would be willing to pursue and what the cost would be. I hope you can go forward with that and keep us apprised of any progress. All right. Russ, you had a question? Yes, I do. On the DEC report, the line item that says insurance, we're spending roughly twice the amount budgeted for insurance. And I know part of that – that's a $580,000 increase, I believe. And part of that is because of the outage insurance we agreed to purchase. But I don't remember how much the cost was for that outage insurance. My memory – I don't have the exact number – somewhere around $280,000 was the bill for that. We did not budget that as an insurance item. We actually budgeted that as a – one of the costs of power supply in the Energy Management Office. The balance of the increase is due to a very large premium increase in our property and business interruption insurance that took place this year. We renew those policies each year. It's premised upon kind of the market that's being offered in – for that particular type of service. And as I know, Bafford, you've got a background in power generation. So, you know, each year the carrier comes out, reviews metrics, performance, and then assesses its reinsurance options in the marketplace. And for some reason, this year, across the industry, we've seen about a 30 to 40 percent increase in business interruption and property and casualty insurance for these types of generating facilities. Yeah, I understand that. Given how really few hours we operate those engines compared to the total hours in a year, our interruption, I would think, wouldn't be all that much. And it's a new facility. So my only suggestion is it might be time to think about shopping for some insurance. You ever shop for different carriers? In fact, this year we just switched brokers, and that happened during a transition period where we – where the risk department was transitioning from one manager to another. And the prior insurance carrier provided us a quote. We are currently shopping that property and casualty and business interruption insurance. And to the extent we can find a provider that would provide us with comparable coverage at a lower rate, under the current trend – the current policy, we can seek, and they will reimburse us for the unused portion. So we are actively trying to find a way to lower that cost. Yeah, that's good. That's all I had on that one. Charlie, you had your hand up earlier, right? You're on mute. Sorry. Back on the red flags rule briefing, thank you for that. I just wanted to make one comment on that. I think our City customer service does an excellent job of balancing preventing identity theft and giving customer service to people. I really am grateful for the good job they do. I just – as we implement this formally rather than informally, I think it's important to remember where identity theft is a risk, perhaps new accounts, and where it's probably not a risk, and that we don't add a lot of red tape to our staff and to our customers. I think that could be a bad thing as we implement a formal policy rather than just good common sense. Thanks. Billy, did you have your hand up? No. Ed, did you? Yep, go ahead. I just wanted to request, if it's handy, I would like to receive a DEC emissions report that the cumulative amounts of all emissions since the plant began operation, would that be possible to receive? Like a year to date from the initial operation of the plant when it was first fired up? Absolutely, we can certainly do that. Mario, this is Chris Ludrick. I think I can answer that question. Please do. I didn't know if you could hear me or not. Yes, Mr. So, on our webpage, we have summaries from 2018 and 2019. Okay. Those emissions on the tonnage are year to date. So, the 2019 annual summary will have those figures you're looking for, and if you would like, we could add them together and send them to you, but those figures are available on the webpage. Okay, thank you, Chris. You're welcome. I have a question about the procurement program, too. Is this the right time to ask? It's under your environmental preferred? Yes, absolutely. Go ahead. Okay. Let me see here. I just want, the first question is, is Staples the sole environmentally conscious vendor that the city uses for all its eco products? This is Cassie Ogden, well, previous director of procurement and compliance. Yes, the Staples is our sole provider of office supplies, and so they do report on those items. We can request the report as often as we would like, but we've opted to do the report annually. Thank you. Does the city ever issue purchasing requests or send bids out for environmentally preferred products, like very often the DME does for when it has construction work done? In other words, have you actually, or has the city explored other venues for purchasing these products, especially with businesses and distributors who deal exclusively in that sort of product? Not to my knowledge, like I said in the memo, our purchasing records were very limited prior to 2017. We changed the requirements in 2017 for the records that we were required to keep and how they were organized. So those were the only items that I was able to find. Catherine Barnett might be able to give you some more context to that, but we are working to draft a policy, should be coming to you in the fall, that will give us more parameters when we do go out to bid on items that we can include and kind of give us some targets to hit for those recyclable items. Okay. The reason I ask, and I don't know if there's anybody from sustainability on the line, but with a program that was instituted in 2007, the results, according to the pie charts that are included in the backup material, are not very encouraging in terms of the percentages of how much of the product that are supplies that the city uses, furniture, et cetera, the small percentage of that, which is eco-friendly. And you can see that in the pie chart that provided. So I'm wondering if part of the problem for what is clearly perhaps a lack of progress over these 13 years might be the fact that the city has been relying on one vendor for all of this and the limitations that could be imposed upon possible purchases by the fact that the city is only using one vendor. We have Catherine Barnett, she's with sustainability on the line. Hi Ed, this is Catherine, sustainability manager. Like Cassie said, they were only able to go back and confirm some of the records to 2017. Staples is just our vendor for office supplies, so that's just going to be our typical office used paper, those type of items. Now we've done green cement, you probably remember that, several years ago we had that whenever we were trying to use some of the kilns that had already made the environmental improvements. There's an air quality preference that's in some of our bid specs, and then of course we have the local preference. So there have been a few bid items, but Staples is just a small part of what we do. We've done janitorial supplies that were environmentally preferable. And this is, unfortunately we're relying on my memory for some of this, but office supplies definitely aren't the only thing that we've done, but there there is room to embed more in our policies. Yeah, and as someone mentioned, a forthcoming document that's going to flesh out what the policies, what the city's policies are on a sustainable procurement program. Is that true? Because as it is now, there's really nothing solely dealing with it. It's dealt very, very briefly in the city procurement manual on page 61, but there really is no standout document that really outlines everything from plastics to air quality, which you know what I'm talking about, and a comprehensive document that puts goals and accomplishments in place. Yeah, and I can elaborate, that is going to be bringing, being brought forward to the Committee on the Environment, that'll go along with the, this is the Simple Sustainability Strategy Plan. Along the way, the city has, through city council, has embraced a number of new policies like the integrated pest management program. That is a program that is a lot further along than what it was before as far as the use of sustainable products out in our fields that when we maintain our ball fields, medians, et cetera, and also the utilization of pesticides when they're used inside city buildings, et cetera. So the city has come a long way. I mean, there is a lot to be done. And quite honestly, you never really arrive because the marketplace dictates a lot of these things when it comes to fixtures, when it comes to plumbing fixtures, and as a city adopts energy codes, those things have just become much more ubiquitous across a lot of different aspects of the, not only the community organization itself, but across the community as development occurs. So there's more to come. And so certainly we as staff recognize that it's, we've only scratched the surface when it comes to this. And so we're also taking a concerted effort to up our game when it comes to these types of products and practices. - Thank you. I appreciate that very much. - Any other questions? - Yes, I have one. - Yes, go ahead, Russ. - Item number five, action items. There's an item on there says that today, July 27th, we'd receive some kind of a presentation about why our capital budget items that we've identified and funded and budgeted for cannot get done. And that was a question I had pre-COVID days. This predates the COVID thing that overwhelmed everybody. So I'd just like to follow up on that. - Are you talking about item number four on the capital utilities? - Yes. Let's see. Yeah, the one that's got my name by it. - Sure. That would have been presented today as part of your budget overview. However, it's not scheduled today. It'll be scheduled next Monday. You all have a special call meeting next Monday to go over all the utility budgets. So with that will be a presentation that gives you an overview of the progress on our capital improvement plan for the utilities. - Thank you. - You heard your hand up. - I did. Item one on the new business action items. About four and a half months ago, I requested a briefing on a lawsuit lost by the city of Denton involving the determination of two DME employees. Nothing's happened since I requested the briefing. Barbara kindly brought it up last meeting and still nothing has happened. If staff thinks this request is outside of the PUB's purview, or if it's best handled in a closed meeting, that's fine. Just say so. However, we're dealing with an enormous lawsuit with implications both to DME personnel and to the budget. So I think it's both relevant and time sensitive. And I would ask staff to respond at the next meeting. - Okay. Larry, do you want to say anything? - At this point, we can probably put something together. - We'll put something together. - Thank you. Any other questions? All right. On to concluding items. Does a board member wish to have anything added to a future agenda or have comments for staff? - What Charlie's comments and questions just work as far as that goes. The DME employee situation is starting to go in that category better than where we were. - Yeah. I would like to congratulate Mario and thank you for his service to Denton. You'll be missed. - Thank you. - Their gain is our loss. - Well, I appreciated this. It's going to be my last PUB meeting, even though you do have a special call one, but we'll miss staff and certainly the board and appreciate all your, certainly your patience today and past meetings when we've had issues brought before, you appreciate your professionalism and just your ability to support city staff and city operations. With that being said, at the next meeting, Tony Puente will be the staff liaison between the city and the public utilities board. You know Tony well, so it's a familiar face. And so I know he'll do a great job. - Best wishes to you. - Thank you very much. - Yes. Mario, for those of us who live in the dark sometimes, where are you going? - Well, I will be, I have been appointed the city manager of Nacogdoches, Texas, which is in East Texas. I went to college and I'm from the Dallas-Fort Worth area, but I went to undergrad as Stephen F. Austin. And so I'll be being their next city manager starting August 10th. - Great, congratulations. - Appreciate it. - So you're going to be lumberjack, right? - Go Jacks, go Jacks. Yes, ma'am. - Good luck. - Thank you. - All right, so now we're going into work session. We're going to receive a report, hold a discussion and give direction regarding the electric fiscal year 2021 proposed budget capital improvement program and the five-year financial summary. - Good morning, PB members, chairs, Nick Benson, assistant director of finance. Can you hear me okay? - Yes. - Perfect. Let me get the presentation pulled up and then I'll do a quick introduction to Tony who will take over the operational discussion of the presentation. But to facilitate the online meeting, we've actually broken the discussion up into two parts. The first part of the presentation will be an operating discussion to cover really the goals and accomplishments of the electric department. About halfway through, there will be a slide to allow for questions. You can ask Tony any questions that you may have regarding the operations. After it gets done, I'll come back up and present the financial portion of the presentation, and then of course we'll finish out with questions regarding the financial section. A couple of things. When you read to the financial presentation today, this is an abbreviated presentation of the budget. Our full intent is to circle back to the public utility board this winter in November and December to have a detailed budget discussion with both the public utility board and city council. This will allow us time to have those high revenue months for the utilities of July and August. So actually this is July, but we'll also have August also and fully understand the COVID impact to the city utilities to further those discussions with both the PB and city council. With that, I'll turn it over to Tony and he will take the presentation over. Oh, let me go back. Sorry about that. I just realized you couldn't see me. So now you can't see me. Hang on a second. I'll turn it over to Tony. We can't hear you, Tony. Here we go. So Madam Chair and members of the PB, some of the changes in the organization, I recently assumed the position of executive manager of utilities. And so I'll be providing management oversight of all the utilities as well as being the liaison to the sports. I certainly look forward to that. But with those changes, I will continue to serve as the DME general manager. And that's the reason why I'm doing the presentation today. Obviously Terry Nolte is also in the room in case I get into any trouble, or there's any questions that you may have. So with that, I'll go ahead and shift over to the presentation and get the operational component going. So the first thing that I want to say before we get started, obviously this past year has been a challenging one. I certainly want to thank all our staff for all the work that they've done. Really unprecedented times, as you know, across not just the utilities, but our state or city and certainly the country. But I do want to thank them for all the work they've done. I will report to you that our staff is in good shape. We've been able to continue to keep the lights on and serve the community. And as well, through this process, we also had the opportunity, if you want to call it that, to respond to a F-1 tornado that tore through downtown Bowie. And so we provided mutual aid during that time. And so I really just want to thank Brad Watts and some of our other line operations staff that responded to that. And just let me say that there was no shortage of volunteers. The staff has been very responsive to those situations where we respond to mutual aid. And so I just report to you that we continue to do that. And we're happy to help out our neighbors through that, because again, we never know when we may need that same kind of help. So I just want to thank them for all the work they've done over the last year. So I want to go through just a couple of these accomplishments and goals. Certainly, I'm not going to cover every single one of these. But the one that I wanted to point out is number two that you see on there. And we did a lot of work over the last year with the Hunter and Coal Ranch developments. I'll report to you that every location where we could serve that development, if it was monthly certified, we were... What's that? The presentation isn't up on the screen. All right. Sorry about that. It's okay. Rookie mistake. Sorry about that. So as I said, with the Hunter and Coal Ranch, every area that was available for us to serve, we did get a commitment, a contract commitment for those developers to serve that area. We estimate that's going to be about four to 6,000 new customers over that build out period. Now, that is a 30-year build out period. But through those negotiations, we were also able to... Over 10 acres that were donated to the city that we are working through the title transfer. That property will be utilized to site the Underwood substation, which will primarily serve that development, but certainly that area as we continue to expand that southwest sector of the city. The next item that I wanted to talk about is there on number three. And I'll talk a little bit more about this when we get into the FT accounts, but we continue to look at our organization. We had an external review that was done and we've been restructuring DME over the last year. Currently, in this phase one, we've concentrated on our engineering department and also our metering department. Certainly, the voluntary separation program has also assisted in helping us take a look at our organization and where FT's are found and try just to be more efficient, more conscious of our labor costs. And so that is something that we've done. We no longer have two separate engineering groups. We've combined those into a single engineering group under a single manager. And also we've made some changes and continue to look for some additional changes over the next year, year and a half in our metering shop. Currently, we provide water metering services for our water department. And so we're looking at potential transitions, looking at technology that could further reduce some of the headcount or at least transfer the headcount over to the water department. The last item that I'll kind of touch base with you is number seven on here is that's the achieving the 100% renewable power supplies. You know, we had a lot of discussions with the PAB and certainly with the council. Terry Nolte kind of led us through those discussions. But I'll report to you that based on the Denton renewable plan, resource renewable plan, we will be 100% renewable under contract by the end of this year. So we will, and we have a slide after this that will just talk a little bit more about kind of where we are as far as those goals. Future goals. So we want to talk a little bit about number three here. So we continue to look for additional opportunities for, you know, short term and long term PPAs. Currently have three RFPs that that are being evaluated. We anticipate bringing those back to the PAB and then the council sometime in August, maybe towards the end of August. Those include additional coastal wind, solar, and also a smaller solar with battery. We're currently, like I said, evaluating those and we will be bringing that back to you for consideration. Again, that will help us as some of our other contracts begin to roll off in 2024, that these will then come online so that we continue with that 100% goal in mind. And then finally, I'll touch base on number six. So next to our people, data is our next biggest resource. We continue to look at our metering data. DME spent a lot of money over the last few years to automate our meters. And so making sure that we have access to that interval data will not just help our EMO in purchasing power for our customers, but certainly be able to give us some additional rate opportunities to offer time of use rates and other types of rates to our customers, as well as giving them more access and more control to their consumption in their residence. And so that's certainly something that we look forward to. We've been working towards already, but we anticipate that going into next year we'll continue to make progress. So just some philosophical changes. Certainly over the last year, we've been focusing on reducing rate pressures. We've looked at our capital improvement program. As you may recall, that for the current year, we did reduce the amount of debt that we issued by about $10 million. That was really just taking a fresh look at the CIP program that was in place. We'll continue to do that in the next year. And so we anticipate that if there are opportunities for us to put off some things, maybe do things a little bit differently, reevaluate some of our projects, we'll continue to do that. One of the examples that I'll put out there that we've discussed is with the two GIS substations that we're planning, the Hickory GIS substation, the Eagle. We made a recommendation that taking a fresh look at the Eagle substation, we think that that substation may be somewhat premature, and so we anticipate about $17 million in deferred cost by not doing that substation. But we do anticipate a little bit of additional cost on the Hickory substations to be able to serve the UNT load. That's something that we continue to have conversations and anticipate having conversations with the University of North Texas as well. The other item on here is just evaluating distributed generation policies. As you know, we've come to you and also with the council to discuss our rooftop solar program, both on the rebate side and also on the utility side. We've gotten some good information. We're doing some additional research based on the questions that we've gotten, and we anticipate coming back to you probably sometime next month to continue to have those conversations on where we may go with those types of policies. And then finally, certainly as a result of the current pandemic, we've had some opportunities to look at telecommuting in our organization. And so if you walk onto the DME campus today, you'll find that there's a lot of buildings with not a lot of people in them. And so we have a lot of folks that are working from home and have been doing so very effectively. And so we've seen no impacts to our service level, certainly not as a result of that telecommuting. As a matter of fact, I think we've had a lot more productivity from our staff as a result of them being able to work from home. And so we'll continue to evaluate that and continue to look at what spaces we may have currently at DME. We certainly have some needs, certainly for our operational folks by way of locker rooms and restrooms and other adequate training areas. So we'll be looking at that over the next year, but certainly the pandemic is forced us to look at these sorts of things. And so it is one of the positive things, if you will, that's come out of the current challenges. So just a couple of metrics that I'll cover. This is certainly, I already spoke about the renewable energy and this is really how do we sustain that goal going out beyond even 2023. So as I mentioned earlier, we've already achieved the goal that's outlined in the Renewable Plan, but certainly being able to sustain that over the long haul. We do have the lawn draw project that has been somewhat delayed, but we anticipate that there will be back online and certainly they've had some challenges with getting materials from China and other places and so, but we anticipate that that project will be back on schedule. And then the other item that I'll mention, which is one that we've talked with you about is the Whitetail contract. That contract will expire in December of 2023 and so that is the reason for the current RFPs that we have, that we're currently evaluating. Our hope is to be able to have something in place so that when Whitetail expires, it will have a new resource in place to continue down the path of 100% renewable or more. And as I mentioned earlier, we did issue a smaller five megawatt RFP for a solar project that's combined with battery storage. We would anticipate that that would be located somewhere in the city. We've had positive conversations with the University of North Texas as a property that they may have and so we'll continue to evaluate that and be ready to discuss that with you in more detail over the next month or so. You know, certainly one of the things that we're very proud of is DME's reliability. As you can see here and this national average is a little dated, but again I think it's a good measuring stick for us. The national average is about 139 minutes worth of outage. As you can see over the last four years, we've certainly been well below that. 2019, our average outage was about 39 minutes and so certainly if you are a DME customer, you know that there's very few times that your electricity is out and when it is out, we get you back up in pretty short order. So we're very proud of this reliability measure. It is something that we're recognized routinely for our accomplishments there. And then competitive rates, this is a little bit dated. As Nick mentioned, we will be coming back to you in November after we've closed out the fiscal year and having a much broader discussion with you about where we are financially. Certainly the month of August and September are busy months, both from a demand standpoint, but also we're hopeful that also for that the deck is up and running during that time period. And so we think that making sure that we have a closed out year to be able to have a good discussion with the PV and with the council about rates, but kind of based on where we are and where we've been, I think historically we've been about the midpoint when we compare to some of the other municipally owned utilities, we're now recommending any changes to our base rate. So $124.80, which is the average over that 12 month period is where we anticipate remaining going forward, at least to the beginning of the fiscal year. And certainly we'll evaluate that going after that in November. And this is just comparison to other municipally owned utilities, we'll refresh this data for you in November and as well as comparing it to some of the private IOUs as well. So the next item here is our FTE summary. As you can see, I did want to point out that the total for FY 2021 is actually 169 FTEs. And so if you compare that from our 19-20, that's a 20 FTE reduction. I did go back and I looked in FY 17-18 as an example, we were at 199 FTEs. Now 10 of those FTEs were related to a transfer of a tech operation, a tech services operation. And so the cost is still embedded as a transfer for DME, but the FTEs don't show up here. Some of these positions that have been reduced were directly related to the voluntary separation program. Some of those positions we've not requested to refill. A couple of examples, we had a superintendent that oversaw our metering division. We've opted to not refill that position and instead, we'll have a manager that is already in the division that will continue to run that. But that superintendent will not be replaced. I already mentioned to you that we've combined our two engineering groups. We had a transmission engineering group and a distribution engineering group. We've now combined those under a single engineering manager. That would be Jerry Fiedler, but we've not refilled the other position. So those are just a couple of examples, but certainly we have a reconciliation of those 20 positions across DME. We think that based on the FTE accounts that we have going into 2021, that we'll be in good shape. Certainly if things change, if there's service issues that we run against or other demands, we'll be happy to come back to the PB and to the council and justify additional FTEs either mid-year or going into 21, 22. But currently with the 169 FTEs, we feel pretty comfortable going into that year as far as labor. And then just briefly, my final slide here is just what the current organizational chart looks like. As you know, Terry Nolte is our assistant general manager. He oversees a number of areas, including our safety and training program that we are working to revamp and working with the city as well through an outside contract. And over the next six months, we'll continue to evaluate that program and our needs. And then we have Chris Lutrick, who's our executive manager of energy services. And among the things that Chris oversees currently is the metering division. Again, working closely with those folks to really make improvements in that area. And I'll mention as well, Terry also oversees our engineering group and is working very closely with them as we continue to merge those two divisions. And then some of the other folks that we have on here, currently Smith Day oversees most of our cyber and physical security, our risk management office, and also we've recently combined our administrative assistance into an administrative pool to provide better service across all our divisions of DME. And then presently, the line operations groups under Brad Watts and Rowdy Patterson and also our substation group under Sam Bridges, they currently report to me as the general manager. I will tell you that over the next few weeks, we'll be looking at this organization as I look at across all our utilities on where my time need to be spent. And so we may update this chart in the next few weeks. If we do that, we'll get that back out to you. So you're aware on what the organizational chart will look like going forward. So with that, that concludes my portion of the operational section and I'm happy to answer any questions or we can certainly go to the financial section with Nick. Madam Chair, what is your pleasure? You'll need to minimize the presentation, Tony. I'm trying to do that. I think people do already have questions and I want to note that Billy Cheek needed to hop off. He had a 1030 meeting, so I should make sure that's in the minutes. Okay, Charlie, you had your hand up first. Quick question on the employment summary on page six. I see that you have 189 full-time equivalent employees right now and then the vacant of 43. Does that mean you have 43 places you could fill, making it 232? Or does that mean that you currently have 146 employees? So we have 189 positions budgeted. Got it. Going into this, we had 43 vacancies, but we've refilled 19 of those vacancies. And so the difference there, that's what 165. Okay. That's correct. So going into next fiscal year, 165, that's what we anticipate having as far as labor. Okay. So the labor is essentially a no change. From where we are currently, that's correct. But from the budget, it is a reduction of 20 FTEs. Absolutely. Thank you. Yes, sir. Russ, go ahead. Yes, 20. In looking at the utility rate cost per megawatt hour graph that you had up there, I think on slide five, something like that, I noticed that Garland and Bryan had lower rates than the city of Denton. And Garland and Bryan were also in the Texas municipal power agency, correct? That's correct. So what I'm wondering is, do you know, maybe there's no answer to this right now. I don't want to belabor the point, but do you know why their average rates are lower than ours? Well, certainly, I think, you know, one of the explanations is they have more customers than we do. And so they have a much broader base for them to spread their costs and be able to have lower rates. But they also have a slightly different operation when it comes to EML and their QSC services. And so they have a little bit more diversity and in some of their non base rate revenue that comes into their utility, that also helps prop some of those base rates down for those utilities. We can certainly take a closer look at that. And then when we come back in November, we can certainly give you a little bit more insights into why that may be. Okay, thank you. Yes, sir. Any other questions? I have one, Tony. Can you remind me what the percentage of our underground electric, I mean, that always helps with our outage management. So hold on, I'm looking at Terry, see if Terry, Terry has that percentage. I don't have the exact percentage. Just approximate, you know? Yeah, it's about, I think it's about 40% underground. About 20%? 40. About 40%. Okay. All right. And then as we're developing, we're doing underground. And any new developments are required to have underground, yes ma'am. So all of Hunter Cole Ranch will, as an example, will all be underground. Okay. All right. Thank you. I guess there's no other questions. Okay, with that, I'll turn it over to Nick. Thank you, Tony. Pull this back up. All right. Can everybody see that? Yes. Okay. So real quick, we'll go over the financial assumptions that are currently covered in this five-year forecast. Be certain. I can answer questions at the end if you have any when we get that slide. I think there's four or five slides to cover the financials. And like I said, we'll circle back in November, December with a detailed budget discussion for DME. So on the revenue side, we are currently, we do have a low growth of 3.2% forecasted for the five-year period. Our T-cost allowed rate of return. We are currently showing a 28.04% through 2022. To be conservative, we are showing this to decrease to 16% starting in 2023 through 2025. And I'll review that with you on the five-year forecast here shortly. Expenses, we do have the ROI. So city council recently approved rate of return increased to 3.5% to 6% for the electric utility to transfer to the general fund. I'll review this with you on the forecast here shortly. And this does account for about 11.7 million over the five-year period. We are not forecasting any sale to Gibbons Creek facility. We do have some money built in for the decommissioning of that site over the five-year period. That does make up $21 million. It's currently included in purchase power. And then ultimately, Tony reviewed the position changes with you. That does account for 1.7 million in savings starting in 2021. This is the five-year forecast for the electric fund. I will do my best to walk you through this from the left-hand side. You can see the adopted 2020 budget here in this column. We did have budget use of reserves of $6.9 million. As you move down the page, you can see, of course, we had no rate increase included in the adopted budget. Finally, down here in the yellow, you can see what we were forecasting the reserves to be at the end of the fiscal or the beginning of the fiscal year, so when we adopted the 2020 budget of $48.6. Moving to your right here, you can see the estimate column of 2020. We are forecasting to use a little bit less than reserves, about $3.4 million. So coming in a little bit better than we originally budgeted. Still see no rate increases. We are forecasting a little bit better ending fund balance of $73.2 million coming in this fiscal year. And then finally, here in the dotted line, you can see the proposed 2021 budget. We are not forecasting to use any reserves. We actually have all the reserve usage taken out. We are showing a net income of $295,000 for the proposed budget. No rate increases, as Tony has previously mentioned in his part of the presentation. And then the ending fund balance is $73.5 million. A couple of other things I want to point out on this slide, you can see the debt coverage ratio is 1.4. We currently have an internal policy of 1.25. And then you can see the reserve requirement. So in the electric fund, we budget a minimum of 60 days, which represents 16% of expenses. Our maximum target is 75 days, which represents 21% of expenses. So you can see that reserve of $73.5 million is definitely above that maximum. So we do have a healthy fund balance in the electric fund. A couple of other things I want to point out. So as I said on the previous slide, we do have no sell for the TNPA facility. We are accounting for $21 million in decommissioning expenses associated with that facility. That number is included in this purchase power number that you see. A couple other things that stand out on this reform I want to show you really quick. The rate of return, you can see it does increase. So we had $16 million in the adopted budget. We do show it coming in over budget $18.8 million. That is half of the year at the 6% rate of return for the general fund. I mean, you can see it continuing on. It does end in 2022 and 2023. It goes back down to $16.3. And then one other on the revenues, jumping back up here to the top really quick, that no rate revenues. You can't see the decrease between '22 and '23. And that is the decrease in the rate of return for those transmission assets. This is the deck pro forma. So this number is included in the previous pro forma that you saw. So total revenues for the electric fund. You can see the deck revenues are $24.5 million in the proposed budget. We do have expenses including debt service of $33.2 million. So we are currently budgeting a loss for the deck of $8.6 million. A couple things I want to point out. We did put a note in here at the bottom. The net income for the deck is decreasing. The Ford market is showing energy to cost less than the future, which is less need for the deck to produce energy for the city. So you can see as you track across here, it actually goes from $24.5 million in the current proposed budget to $11.5 million in the future years. We wanted to be sure to put that note on there for an explanation. This is the five-year CIP for the electric fund. A couple things I want to point out. We are budgeting about $6.8 million for distribution substations in this budget. We do have some street lighting funding in here. This is something Tony had previously communicated to city council we had budget for moving forward. So we do have $3 million in street lighting budget for the electric fund. Distribution total is about $32.2 million in bond funded projects. Transmission is about $32.8 million. This is that Hickory substation that Tony had mentioned. Total is $65 million in projects. Over the five-year period, you can see it's $237.6 million. And all this is accounted for in the five-year forecast that I just showed you. Electric rates. We're not looking to make any substantial changes to the electric rates. We will be bringing the rate ordinance back to you for adoption. What we would like to do leading up to the conversation in November and December is make minimum updates to the electric rate ordinance. Currently, we are proposing to change the following rates that are included in this table. The first one being the residential renewable energy services rider. Also referred to as the RG. All customers now receive 100% renewable energy. So we are just looking to take this out of the rate ordinance. Weekend services. This is another one we're looking to do away with. We actually in a recent audit, we did reveal that customers were hitting their monthly peak during the week instead of the weekends. Downtown decorative lighting. This rating is known or applicable. So we are looking to take this out. The dark fiber. This rate is currently in the electric ordinance. This will move over to tech services and tech services will show on their schedule of fees. So we are coordinating with them currently to make sure that makes its way into their fees. The banner install fee. We are working with development services to take this out of the electric ordinance. We should have a consensus among staff soon, but we are currently recommending to take it out of the electric rate ordinance. Commercial renewable energy services. CGR. Also similar to the residential renewable. We are looking to take this out. All customers do receive 100% renewable energy. And then the independent wholesale generator IWG. We are also looking to do away with that rate. And then for reference, if anybody had this question, there's 186 residential customers currently on the RG rate, which is average annual savings of 47.36. Next step. So as Tony has previously communicated, we do have a special called meeting with you on August 3rd to talk about the remainder of the utilities. We will discuss water, wastewater and solid waste during that meeting. So we'll be bringing that back forward to you. This actually will go forward to city council on July 30th. This does say July 28th. So that is a typo. That should be the 30th. We will discuss this with the city council during a budget work session. We will circle back with the PBB on August 10th to review the budget one final time and seek your approval for that in the rates and then September 15th this year, the city council was scheduled to adopt the budget, the tax rate and the capital improvement plan. And then as Tony has mentioned November, December timeframe, we will circle back to the PBB and city council for a detailed rate and budget discussion. But that that'll conclude the financial portion of the presentation. And if you give me a second, I will pull it down or you can ask questions. Okay. Questions. Go ahead, Russ. Yeah. What is the biggest risk factor in your opinion to hitting the projected budgeted numbers you have for the coming year? All of these assumptions have some amount of risk to them. What do you think is the most risky assumption that you've made in your budget for the coming year? Um, do you mean to do directly related to the pandemic or just the load forecast that we currently have plugged in or or is it both? All of them. All of the factors that go into making your annual budget projection. Let me, let me, let me answer one part of it and then I'll turn it over to Terry Nolte. They'll address the load factor of it. Um, the first part is so the COVID pandemic on the utilities, we are currently monitoring that for each of the utilities to see what the financial impact will be. And we do have a revenue loss assumption in the electric proforma now. That is one reason we want to circle back with you November and December. So around the October timeframe, we'll actually get that hard data of how the pandemic has impacted the utilities from a billing standpoint. So we'll be able to true that number up in the proforma when we come back to you. Um, now with that being said, let me turn it over to Terry for the load portion of it. I mean, he can address that question. So financially, the, uh, the largest risk that we always face is the, uh, the price formation in the air cop market. Um, you know, each year we project, uh, our revenues and our, our, uh, our expenses, expenses being loved, uh, the expenses to purchase energy from the market, uh, to serve the load and, uh, the estimates of what we, what revenues will achieve from the sales of renewable energy and deck energy to the market. Uh, those forecasts are based upon visibly traded forward markets, which change like the stock market does from hour to hour, day to day. Uh, we do have a hedge plan that we, uh, are executing against in order to, uh, try to stabilize those revenues and, uh, those expenses as best as possible. But we, uh, because of our, the nature of our portfolio, which is heavily driven by weather events, mainly wind and, and solar intensity, there's a large portion of the supply that we cannot forward hedge because we don't know, uh, exactly what the output would be. So that's the biggest single risk, uh, looking forward financially, the biggest, one of the bigger risks. Uh, and we've, as Nick mentioned, we've, uh, we've conservatively forecasted our T-cost revenues. Uh, T-cost returns are 28.04%. Uh, last year, uh, provided about 17, a little over $17 million of incremental, uh, non-rate revenue for the benefit of customers to the extent that that T-cost revenue, uh, diminishes as a result of a, a filing that we would be called in to make, uh, and lower the allowed rate of return. That would have a significant impact in the out years. We don't anticipate such a call, uh, for at least two to three years. Uh, but to be prudent, we are including that reduction. So those are the two biggest financial risks, uh, that we face. Is that an interesting question? It does. I was just, one other thing, uh, I was curious about the, uh, the demand on ERCOT. Uh, people are, are moving into Texas. That's generally known. So I would think the demand on ERCOT as a system is going to increase in the next year compared to what it is this year. Is there a, is there an estimate on what the system demand increase might be in terms of percentage or megawatt hours or whatever? I think as a market, the market is growing at about two to two and a half percent per year on annual, on peak demand. That would be the instantaneous hourly peak demand across the market. Uh, but we are seeing, uh, as, as our forecast shows about three and a half, 3.2 to three and a half percent, uh, annual energy increase. So across the year, the total kilowatt hours, uh, consumed by customers is increasing at a greater rate than the peak demand is. The peak demand, uh, is met, uh, through capacity additions in the marketplace, which are primarily renewables, wind and solar, uh, which, uh, the solar tends to be very highly correlated with peak demand, summer, hottest day of the summer. Uh, but the wind is not as well correlated. It doesn't necessarily show up as we saw, uh, last summer on the hottest day of the year. Uh, there was very little wind output in West Texas and that caused prices to go up. And, uh, that, uh, goes to the issue that I mentioned before, which is that price formation. Um, no one has a crystal ball. That's, that's, uh, clear enough to predict what each hourly price is going to, uh, show up as in the future and very high prices while, while they have benefits for the deck revenue and debt gross margin, uh, they have an offsetting effect of high purchase power costs to, to meet the load. So, uh, as we've mentioned to you before, the deck acts as an insurance policy to insulate the load from those super high prices, but it generally nets out. Uh, we receive $9,000 for energy delivered from the deck and we purchase energy at $9,000 so that nets out, but customers aren't exposed to that. So, uh, that's the benefit of our portfolio and having that, that component in the supply portfolio to kind of insulate our, our customers from those high price periods. Okay. Thank you. Questions. All right. So what do you need from us, Mario? Just really nothing. Uh, madam chair, it's just a presentation like we typically do during the budget cycle. So it's really just to be able to bring those in that those pieces of information to you all, allow you all to ask whatever questions you have of staff and, and, uh, if the council asks questions about the, what the thoughts with the pub, we'll be able to relate those to them as well. And you'll be seeing similar presentations from the other utilities, uh, next Monday at your special meeting. I believe that said eight 30 or started eight 30 on Monday, the third. Yep. And, um, Billy cheek did say that he will not have to leave early next Monday. He has to leave, he had to leave early this Monday. So, okay. And I think before we, I don't want to get in if we are adjourning soon, I believe Mr. Collister may have a question or a statement to make. Yes. I make sure. I was talking to the city attorney and we just, we discussed this before the lawsuit is a personnel matter, which is really, which is outside the purview of the PB under the charter and there has not been a judgment entered yet by the court. Once the judgment is entered, you'll be able to take the, uh, impact of that judgment consideration with a budget. And that's as far as we can go right now. Absent council providing direction, uh, for us to give you all a briefing. And if you want to make a request to council to go into the details of the lawsuit, that can be done. Okay. Do we, how does the board feel? Do they want, do you want to make a request to city council? Yeah, I would personally like to know what's going on there. And if there's, if it's going to require any kind of a change in policy with the utilities, the way they handle personnel or anything like that, perhaps we could discuss that. I know there's feeling, I know how Charlie feels Barbara. Yes, I agree. Okay. Karen. I understand the reasons why we can't be, you know, apprised of details. I mean, yeah, I think I brought this up when it first started hitting the newspaper quite a while ago. And so I'm satisfied with the fact that, you know, it's a personnel matter that we can't really throw. Yeah. And sorry. Yeah. I agree with Karen's assessment of the situation. So kind of a split here. Cause I, I understand it's a personnel matter and I'm waiting, I'm willing to wait until the court puts in a judgment. I don't see any reason at this point to put staff through that work. When we, when it, when, once it's settled, we can get the big picture. Larry, when you say the judgment has not been entered, I learned from the paper that the jury has found against the city of Denton and the city, is this on appeal or has the judgment itself not been? The judgment itself has not been entered. There was a discussion among both sides on the form of the judgment and it's been going on for quite a while. And the, and the state has also entered in to lawsuit with respect to caps on the judgment amounts and the court has ruled in their favor on that. There, there's a lot more to be done. The court has ruled in his favor. The court ruled in the favor of the state, which is essentially in favor of the city about putting limitations on the damage caps. Okay. I would argue these are the kinds of things that help us stay up to speed on that. The other question is what, what fund do you anticipate resolving the costs of this litigation and judgment? Let Finance answer that question. Nick Vinson, assistant director of finance. This would come from the electric fund. I'm taking your question. Okay. Then I would renew my mention that it's relevant to the public utilities board. Thanks. Well, maybe we should discuss it again on the third, since Billy's not here and can't weigh in and we were basically split. So, so what we'll do is we'll go, we'll go ahead and keep it on the matrix like it has. And so we'll, I'll ask Kim Mankin to go ahead and put a management report item like we normally would for a normal meeting. And that way, if you do have a seven or an odd number, that way the board can give direction one way or the other on how you would like to proceed since you're tied three, three, it is an important subject. I am not saying that that it's not, it, it impacts the utility greatly. Just it's not settled yet. So, all right. With that, do we have a motion to adjourn? So I move. All right. I guess we're adjourned. Have a great one. Take care. Thank you.