1
00:00:00,000 --> 00:00:03,360
 Yes, Russ.

2
00:00:03,360 --> 00:00:09,920
 I was absent on the 13th, so I won't vote on that one.

3
00:00:09,920 --> 00:00:14,200
 Okay, so we'll need to take them in two different.

4
00:00:14,200 --> 00:00:15,200
 Okay.

5
00:00:15,200 --> 00:00:20,520
 I have nothing on the 13th, so we can approve that as far as I'm concerned.

6
00:00:20,520 --> 00:00:21,520
 Okay, do we have a motion?

7
00:00:21,520 --> 00:00:23,320
 I second his motion to approve.

8
00:00:23,320 --> 00:00:24,320
 Okay.

9
00:00:24,320 --> 00:00:28,160
 Assuming Russ was effectively a motion to approve, I second.

10
00:00:28,160 --> 00:00:29,160
 Okay.

11
00:00:29,160 --> 00:00:30,160
 All in favor, aye?

12
00:00:30,160 --> 00:00:31,160
 Aye.

13
00:00:31,160 --> 00:00:32,160
 Opposed?

14
00:00:32,160 --> 00:00:35,440
 And Karen's not voting, so that's a record.

15
00:00:35,440 --> 00:00:36,440
 Okay.

16
00:00:36,440 --> 00:00:37,440
 July 27th.

17
00:00:37,440 --> 00:00:38,440
 Russ, you have a?

18
00:00:38,440 --> 00:00:44,280
 Yeah, just to comment on item C, where we discussed that pump failure.

19
00:00:44,280 --> 00:00:50,120
 And the comment – what I think is maybe the most important comment was not listed

20
00:00:50,120 --> 00:00:58,200
 in the minutes, and that comment is the discussion we had with Ken Banks about the need to have

21
00:00:58,200 --> 00:01:11,000
 a policy to require a written, formal, root-caused analysis or a root-caused analysis or a failure

22
00:01:11,000 --> 00:01:13,680
 analysis when something like that happens.

23
00:01:13,680 --> 00:01:19,080
 And he said he was going to make sure that requirement was in his policies, and if not,

24
00:01:19,080 --> 00:01:22,200
 he was going to add it to his policies.

25
00:01:22,200 --> 00:01:26,880
 That's, to me, the most important thing that came out of that.

26
00:01:26,880 --> 00:01:31,720
 We can certainly go back and amend those minutes and bring them back to you.

27
00:01:31,720 --> 00:01:39,920
 So, Russ, the PUB received a fairly thorough report on that right afterwards.

28
00:01:39,920 --> 00:01:43,000
 I've never received – I've never received anything about it.

29
00:01:43,000 --> 00:01:45,640
 Right, because you weren't on the board at that point.

30
00:01:45,640 --> 00:01:50,440
 So it might be useful if somebody could let you know the date of the minutes or the date

31
00:01:50,440 --> 00:01:54,680
 of the presentation, and you could go back and look at our backup.

32
00:01:54,680 --> 00:01:55,680
 Okay.

33
00:01:55,680 --> 00:01:56,680
 That's fine.

34
00:01:56,680 --> 00:01:57,680
 Yeah.

35
00:01:57,680 --> 00:02:00,760
 I can do a pretty detailed report once something like this happens.

36
00:02:00,760 --> 00:02:01,760
 Okay.

37
00:02:01,760 --> 00:02:09,760
 I guess the question was, is it a requirement written down in any policy of the department?

38
00:02:09,760 --> 00:02:11,240
 That's the issue.

39
00:02:11,240 --> 00:02:15,320
 Or is it just kind of a hit-and-miss thing?

40
00:02:15,320 --> 00:02:18,000
 I think it's a routine, isn't it, Tony?

41
00:02:18,000 --> 00:02:19,560
 Yes, it is.

42
00:02:19,560 --> 00:02:22,080
 I think Kenny wanted to verify whether or not it was in the policy.

43
00:02:22,080 --> 00:02:26,920
 He was pretty confident that it was, but I don't think he's completed his review of

44
00:02:26,920 --> 00:02:27,920
 that.

45
00:02:27,920 --> 00:02:28,920
 Okay.

46
00:02:28,920 --> 00:02:32,160
 But we can certainly get back with you, Mr. Bradford, and kind of let you know kind of

47
00:02:32,160 --> 00:02:33,160
 where that is.

48
00:02:33,160 --> 00:02:34,160
 All right.

49
00:02:34,160 --> 00:02:35,160
 Thank you.

50
00:02:35,160 --> 00:02:36,440
 That's the only thing I had on that.

51
00:02:36,440 --> 00:02:40,240
 So do we just table this?

52
00:02:40,240 --> 00:02:44,560
 I have a couple of amendments to the minutes as well.

53
00:02:44,560 --> 00:02:45,560
 Okay.

54
00:02:45,560 --> 00:02:46,560
 Go ahead.

55
00:02:46,560 --> 00:02:47,560
 Where are you, Charlie?

56
00:02:47,560 --> 00:02:59,960
 First, on the Item 2B, just for the sake of abundance of caution, I think we should mention

57
00:02:59,960 --> 00:03:04,920
 that Bill Chee left the meeting and recused himself from the discussion, not just that

58
00:03:04,920 --> 00:03:09,220
 he recused himself for the discussion.

59
00:03:09,220 --> 00:03:13,800
 Given the scope and the size of that, I think we should document it in the minutes that

60
00:03:13,800 --> 00:03:15,980
 he left the meeting.

61
00:03:15,980 --> 00:03:19,240
 And then- The clarification, actually.

62
00:03:19,240 --> 00:03:29,980
 The second clarification on the lawsuit issue, the minutes refer to it as a lawsuit between

63
00:03:29,980 --> 00:03:34,920
 DME and former employees, and that seems a little bit misleading.

64
00:03:34,920 --> 00:03:37,560
 The lawsuit is grim and- Excuse me, Charlie?

65
00:03:37,560 --> 00:03:38,560
 Charlie?

66
00:03:38,560 --> 00:03:39,560
 Yeah.

67
00:03:39,560 --> 00:03:40,720
 Can you turn your camera on, please?

68
00:03:40,720 --> 00:03:42,920
 Thank you.

69
00:03:42,920 --> 00:03:46,960
 I can't look at- I'll have my camera on in just a second.

70
00:03:46,960 --> 00:03:51,720
 I've got to read off of my word, then I'll turn my camera off.

71
00:03:51,720 --> 00:03:56,880
 But the lawsuit is entitled Grim and Maynard versus City of Denton.

72
00:03:56,880 --> 00:04:03,640
 So it's a little misleading to call it a lawsuit between DME and former employees.

73
00:04:03,640 --> 00:04:11,980
 And it also says that the judgment has not been received or arrived at.

74
00:04:11,980 --> 00:04:22,200
 The jury awarded a $3.9 million verdict on or around February, what, 10th of 2020.

75
00:04:22,200 --> 00:04:31,980
 So I think covering it differently seems- And I've got my video on now.

76
00:04:31,980 --> 00:04:34,720
 I just wanted to look at my notes on that.

77
00:04:34,720 --> 00:04:39,680
 I think we should be accurate in the minutes and not call it a lawsuit involving DME and

78
00:04:39,680 --> 00:04:41,300
 former employees.

79
00:04:41,300 --> 00:04:46,040
 Grim versus City of Denton is the title of a lawsuit.

80
00:04:46,040 --> 00:04:50,600
 We can certainly work with the city attorney's office and get those corrected.

81
00:04:50,600 --> 00:04:55,160
 So I'm assuming we need to table them for now?

82
00:04:55,160 --> 00:04:56,160
 Correct.

83
00:04:56,160 --> 00:05:01,960
 And just a point, Larry, if I'm wrong, we need to keep our faces on when we're speaking

84
00:05:01,960 --> 00:05:07,240
 because this is an open meeting and they need to be recording us visually.

85
00:05:07,240 --> 00:05:08,240
 Right.

86
00:05:08,240 --> 00:05:11,400
 So don't turn your cameras off.

87
00:05:11,400 --> 00:05:12,560
 Sorry.

88
00:05:12,560 --> 00:05:16,420
 My only reason for turning the camera off was that I was looking at a Word document.

89
00:05:16,420 --> 00:05:18,600
 I'm down to one computer screen.

90
00:05:18,600 --> 00:05:19,600
 Okay.

91
00:05:19,600 --> 00:05:21,320
 All right.

92
00:05:21,320 --> 00:05:22,960
 That's why I use two different devices.

93
00:05:22,960 --> 00:05:24,960
 That's okay.

94
00:05:24,960 --> 00:05:30,700
 Next item is management update, new business action items.

95
00:05:30,700 --> 00:05:36,000
 So Madam Chair and PB members, there was a couple of items that are still outstanding.

96
00:05:36,000 --> 00:05:39,400
 I just wanted to go over the items that have been completed.

97
00:05:39,400 --> 00:05:45,000
 So we've provided the copy of the 2015 fleet ordinance and also the information on the

98
00:05:45,000 --> 00:05:46,320
 preferred purchasing policy.

99
00:05:46,320 --> 00:05:48,000
 Those two items have been provided.

100
00:05:48,000 --> 00:05:53,040
 I think there was some additional feedback from Mr. Sofe regarding the purchasing policy

101
00:05:53,040 --> 00:05:56,520
 that we'll be taking back to the COE.

102
00:05:56,520 --> 00:06:00,960
 The item, item number three on the capital utilities approved dollars versus spend dollars

103
00:06:00,960 --> 00:06:03,560
 that will be covered in today's budget presentations.

104
00:06:03,560 --> 00:06:08,960
 So we hope that that'll meet your, your expectations on, on that particular item.

105
00:06:08,960 --> 00:06:14,120
 And then the item number one, which had to do with the, with this pending litigation,

106
00:06:14,120 --> 00:06:19,000
 I know that at the last meeting, I think it was a three, three kind of vote, but I think

107
00:06:19,000 --> 00:06:22,400
 the city attorney's office may have some additional information to provide.

108
00:06:22,400 --> 00:06:27,040
 So I'll look at Larry to see if he wants to chime in on, on that front.

109
00:06:27,040 --> 00:06:29,360
 Not right now.

110
00:06:29,360 --> 00:06:41,200
 It's just the appropriate time to get Mr. Chief.

111
00:06:41,200 --> 00:06:45,240
 I'm actually reversing my decision after I did some reading this weekend.

112
00:06:45,240 --> 00:06:50,440
 I think we should have an update so that we do understand what's going on knowing that

113
00:06:50,440 --> 00:06:55,600
 it needs to be in closed session and anything we hear cannot be discussed in public.

114
00:06:55,600 --> 00:07:00,520
 Billy, what did your thoughts?

115
00:07:00,520 --> 00:07:03,840
 What was the, what was the item you were speaking which I'm not clear where you're coming from

116
00:07:03,840 --> 00:07:07,360
 Grimm versus city of Denton, right?

117
00:07:07,360 --> 00:07:08,360
 The lawsuit.

118
00:07:08,360 --> 00:07:12,320
 Do we, do you want to hear an update on what is going on with the lawsuit?

119
00:07:12,320 --> 00:07:13,320
 Yes.

120
00:07:13,320 --> 00:07:15,000
 You need to request that of city council.

121
00:07:15,000 --> 00:07:20,600
 Yes, I, I do, but I'm not sure why you were asking me specifically because you were the

122
00:07:20,600 --> 00:07:23,280
 only one that was not on and it was three, three.

123
00:07:23,280 --> 00:07:24,280
 Oh, okay.

124
00:07:24,280 --> 00:07:25,280
 Okay.

125
00:07:25,280 --> 00:07:38,400
 If that's the, if that's the will of the majority, I'm fine with receiving a report.

126
00:07:38,400 --> 00:07:44,360
 I was one of the people who was just on the basis that it was a personnel issue.

127
00:07:44,360 --> 00:07:45,960
 I was there too, Karen.

128
00:07:45,960 --> 00:07:46,960
 I am.

129
00:07:46,960 --> 00:07:47,960
 I understand.

130
00:07:47,960 --> 00:07:49,640
 And I'll make a comment on that, Karen.

131
00:07:49,640 --> 00:07:53,200
 I think the city attorney is not going to let them give us anything that they don't

132
00:07:53,200 --> 00:07:55,960
 think is appropriate for us to see.

133
00:07:55,960 --> 00:07:56,960
 And they shouldn't.

134
00:07:56,960 --> 00:07:57,960
 Yeah, that's true.

135
00:07:57,960 --> 00:07:58,960
 That's true.

136
00:07:58,960 --> 00:08:04,000
 And I think if it affects the budget, that's really where we ought to be coming from.

137
00:08:04,000 --> 00:08:05,000
 Yeah.

138
00:08:05,000 --> 00:08:08,320
 So what will it do with the personnel issue itself?

139
00:08:08,320 --> 00:08:13,960
 We don't need to know anything about the personnel file, just the impact.

140
00:08:13,960 --> 00:08:15,320
 I want to make sure this is clear.

141
00:08:15,320 --> 00:08:21,080
 I mean, you need to make sure the record states why, why you're wanting to hear information

142
00:08:21,080 --> 00:08:25,520
 about the lawsuit, what you're wanting to hear with respect to the lawsuit, when you

143
00:08:25,520 --> 00:08:30,880
 make that request of council, it doesn't need to be just, Hey, we want to hear everything

144
00:08:30,880 --> 00:08:31,880
 about that.

145
00:08:31,880 --> 00:08:33,640
 And Mr. Cheek is right.

146
00:08:33,640 --> 00:08:38,800
 That's where I was coming from the last meeting is when you look at the charter, you have

147
00:08:38,800 --> 00:08:39,800
 the responsibility.

148
00:08:39,800 --> 00:08:46,480
 The PB is with respect to the really the financial operation, the utilities, there's nothing about

149
00:08:46,480 --> 00:08:51,240
 personnel decisions within that, that's reserved to the city council, the city manager.

150
00:08:51,240 --> 00:08:52,240
 Right.

151
00:08:52,240 --> 00:08:54,880
 So from my perspective, what is the financial impact?

152
00:08:54,880 --> 00:09:00,440
 What is the worst it can be and what is the best it can be and limit it to what our financial

153
00:09:00,440 --> 00:09:03,380
 obligation to that would be.

154
00:09:03,380 --> 00:09:07,840
 Any other board member want to weigh in on, is that the correct direction?

155
00:09:07,840 --> 00:09:18,840
 Certainly if the, the impact of the jury's verdict is something that's going to be absorbed

156
00:09:18,840 --> 00:09:23,360
 by the city's budget and the general fund, I would agree.

157
00:09:23,360 --> 00:09:28,800
 It's not within our scope particularly, but if it's the intention of the city manager

158
00:09:28,800 --> 00:09:36,520
 and the city attorney's office to have the municipal utilities funds absorb some of the

159
00:09:36,520 --> 00:09:43,880
 cost of the lawsuit, then yes, it's very germane to our committee to certainly know the publicly

160
00:09:43,880 --> 00:09:53,600
 available information and any non-public information that is, that's germane to our decision or.

161
00:09:53,600 --> 00:10:03,360
 Yeah, expanding on Charlie's point, we, you know, if it's going to be a policy to not

162
00:10:03,360 --> 00:10:17,160
 come up and make a, a settlement that affects the budget and this can, this policy continues.

163
00:10:17,160 --> 00:10:25,040
 It will affect all future budgets and therefore, although we don't need to get into the personnel

164
00:10:25,040 --> 00:10:31,720
 issue, we need to get into the policy of what is our, what is the city's decision, what

165
00:10:31,720 --> 00:10:39,320
 are the city's decision going to be handling employees with lawsuits as it affects the

166
00:10:39,320 --> 00:10:40,320
 budget?

167
00:10:40,320 --> 00:10:44,160
 Does that make sense?

168
00:10:44,160 --> 00:10:49,280
 And Tony, typically in, from the accounting perspective, the fund that is affected is

169
00:10:49,280 --> 00:10:52,600
 usually the one charged so.

170
00:10:52,600 --> 00:10:53,600
 That is correct.

171
00:10:53,600 --> 00:10:56,040
 Obviously there's insurance implications as well.

172
00:10:56,040 --> 00:11:02,480
 We do have business practice insurance, but generally speaking, a lot of these expenses

173
00:11:02,480 --> 00:11:06,560
 will come out of the city's risk fund that ultimately ends up being allocated back out

174
00:11:06,560 --> 00:11:09,960
 to the, to the respective fund.

175
00:11:09,960 --> 00:11:15,040
 However, depending on the amount that we may be talking about, it could come directly out

176
00:11:15,040 --> 00:11:16,040
 of the utilities.

177
00:11:16,040 --> 00:11:20,400
 I mean, ultimately in this particular one, it'll, it'll be the electric fund that would

178
00:11:20,400 --> 00:11:24,600
 be burdened with any, any expenditure.

179
00:11:24,600 --> 00:11:29,680
 All right.

180
00:11:29,680 --> 00:11:31,360
 Is it clear what we're asking Larry?

181
00:11:31,360 --> 00:11:32,360
 Yes.

182
00:11:32,360 --> 00:11:33,360
 Okay.

183
00:11:33,360 --> 00:11:34,360
 All right.

184
00:11:34,360 --> 00:11:40,520
 And I, I do need to tell you that we need to be done by 10 30 because the city council

185
00:11:40,520 --> 00:11:41,520
 is meeting today.

186
00:11:41,520 --> 00:11:45,560
 So let's move on to concluding items.

187
00:11:45,560 --> 00:11:50,760
 Does any board member wish to have an item added to the future agenda or have any comments

188
00:11:50,760 --> 00:11:51,760
 to make?

189
00:11:51,760 --> 00:11:55,440
 I see none.

190
00:11:55,440 --> 00:12:00,740
 So let's move on to the work session and receive a report, hold a discussion and give direction

191
00:12:00,740 --> 00:12:06,960
 to the water wastewater drainage and solid waste and fiscal year 2021 proposed budget

192
00:12:06,960 --> 00:12:11,520
 capital improvement program and five year financial forecast.

193
00:12:11,520 --> 00:12:15,120
 So PB members will turn this over to Nick Vincent.

194
00:12:15,120 --> 00:12:16,120
 Good morning.

195
00:12:16,120 --> 00:12:19,080
 PB members, chair and Nick Vincent assistant finance director.

196
00:12:19,080 --> 00:12:23,360
 First of all, I want to thank everybody for being here today for this special called meeting.

197
00:12:23,360 --> 00:12:28,520
 We do have three budget presentations to go through the water utility, wastewater utility

198
00:12:28,520 --> 00:12:33,040
 and solid waste and each of the presentations are broken into two different discussions.

199
00:12:33,040 --> 00:12:37,400
 The first part of the presentation is an operational discussion and at the end of that, there'll

200
00:12:37,400 --> 00:12:41,120
 be a slide for questions and then I'll return to the podium to go through the finances for

201
00:12:41,120 --> 00:12:42,120
 each utility.

202
00:12:42,120 --> 00:12:55,880
 With that, I'll turn it over to Frank Pugsley to go for water.

203
00:12:55,880 --> 00:12:56,880
 Thank you, Nick.

204
00:12:56,880 --> 00:12:59,240
 Good morning, Madam Chair, PB members.

205
00:12:59,240 --> 00:13:04,400
 I am Frank Pugsley, the water and wastewater utilities director here to discuss the operational

206
00:13:04,400 --> 00:13:12,360
 portion of the water utilities fiscal year '21 budget presentation.

207
00:13:12,360 --> 00:13:19,560
 I'd like to start with a few accomplishments and future goals.

208
00:13:19,560 --> 00:13:23,280
 Just kind of hit a few highlights if you have any specific questions on any of these, please

209
00:13:23,280 --> 00:13:26,480
 don't hesitate to ask in the Q&A portion.

210
00:13:26,480 --> 00:13:31,140
 We do have a couple of significant projects ongoing at the Louisville Water Treatment

211
00:13:31,140 --> 00:13:37,880
 Plant for some major upgrades and as well as zebra mussel control and we have two major

212
00:13:37,880 --> 00:13:43,240
 water transmission projects in the All Red John Payne Main and the North South Water

213
00:13:43,240 --> 00:13:47,640
 Transmission Main, which will significantly increase our ability to move water from the

214
00:13:47,640 --> 00:13:52,560
 north side of town to the south side of town, generally along Bonnie Bray and All Red Road.

215
00:13:52,560 --> 00:14:00,840
 Some of our future goals in this next fiscal year, we intend to enter into a project to

216
00:14:00,840 --> 00:14:05,000
 study advanced metering infrastructure for water distribution that'd be similar to the

217
00:14:05,000 --> 00:14:09,400
 smart meters for electric, so we're going to start investigating that and see what may

218
00:14:09,400 --> 00:14:12,640
 or may not be the best options for us in the future.

219
00:14:12,640 --> 00:14:18,640
 And we also intend to continue to make full use of our asset management program that we

220
00:14:18,640 --> 00:14:23,960
 completed this past fiscal year to make sure we are replacing the right pipes at the right

221
00:14:23,960 --> 00:14:29,420
 time in their life cycle, as well as coordinating those conditions of those pipes with the street

222
00:14:29,420 --> 00:14:35,720
 condition index so that we can touch the streets as few times as practical.

223
00:14:35,720 --> 00:14:40,680
 Some of our philosophical changes that we've had over the past 12 to 18 months, we've really

224
00:14:40,680 --> 00:14:46,980
 spent a lot of time really focusing on culture building as we've begun to lose a lot of long

225
00:14:46,980 --> 00:14:48,480
 tenured employees.

226
00:14:48,480 --> 00:14:53,760
 We started breaking down silos and really working on process and functional integration

227
00:14:53,760 --> 00:15:00,200
 with other departments in the city, including tech services, IT, public works, capital projects,

228
00:15:00,200 --> 00:15:05,480
 so we are actually, I think, doing a lot more today than we have done in recent history

229
00:15:05,480 --> 00:15:11,480
 with fewer people, you know, tighter budgets, and in light of a pandemic, we're still being

230
00:15:11,480 --> 00:15:13,680
 extremely successful.

231
00:15:13,680 --> 00:15:19,900
 Some of our planning and cost saving items, as you probably are aware, we are intending

232
00:15:19,900 --> 00:15:23,920
 on expanding the Ray Roberts water treatment plant significantly.

233
00:15:23,920 --> 00:15:29,320
 The current planned expansion was for 30 million gallons per day, increasing above the current

234
00:15:29,320 --> 00:15:31,840
 20MGD capacity.

235
00:15:31,840 --> 00:15:38,240
 Through a capacity upgrade process that we're going to pursue with the TCEQ, we're actually

236
00:15:38,240 --> 00:15:45,760
 able to push back the major 30MGD upgrade to be online around 2029 or 2030.

237
00:15:45,760 --> 00:15:49,360
 So that major upgrade will be the $100 million project you've been hearing about, but we

238
00:15:49,360 --> 00:15:55,200
 think we can get an extra 5MGD to 10MGD out of the current plant and the current processes

239
00:15:55,200 --> 00:16:01,880
 within current TCEQ regulations, so that way we can utilize that plant to its full capacity.

240
00:16:01,880 --> 00:16:06,800
 That has kind of a secondary benefit, and that 30MGD expansion would then be somewhere

241
00:16:06,800 --> 00:16:13,760
 between, you know, 37 to 45MGD for about the same cost, so we're actually getting a two

242
00:16:13,760 --> 00:16:15,880
 for one there in some ways.

243
00:16:15,880 --> 00:16:20,360
 Here's some operational data from our water production.

244
00:16:20,360 --> 00:16:24,440
 The gray shaded area is our five-year average of monthly water production.

245
00:16:24,440 --> 00:16:30,180
 The kind of brown-orange line at the top was our 2020 fiscal year budget for water production.

246
00:16:30,180 --> 00:16:33,800
 The green line was last fiscal year, and the blue line is this fiscal year.

247
00:16:33,800 --> 00:16:39,560
 As you can see, we've kind of been at or just near our budgeted amounts this year, adjusting

248
00:16:39,560 --> 00:16:40,560
 for weather.

249
00:16:40,560 --> 00:16:46,320
 We're doing fairly well, and we finished July basically right in between last fiscal year

250
00:16:46,320 --> 00:16:53,540
 and our budget, so we're doing pretty well on the water production side.

251
00:16:53,540 --> 00:16:57,820
 Operational data for the water distribution and asset management groups.

252
00:16:57,820 --> 00:17:01,360
 We intend to flush 11,000 hydrants this year.

253
00:17:01,360 --> 00:17:04,460
 That is, on average, each hydrant about twice a year.

254
00:17:04,460 --> 00:17:11,760
 We have just over 5,000 hydrants in the city, and additionally replace 3,200 meters.

255
00:17:11,760 --> 00:17:17,520
 And for our system major maintenance, which is our replacement of some of our aging lines,

256
00:17:17,520 --> 00:17:25,260
 this fiscal year, we've set a minimum goal to replace 29 or 24,000 linear feet.

257
00:17:25,260 --> 00:17:29,080
 That's based on our new asset management program we've started this year.

258
00:17:29,080 --> 00:17:34,240
 And in order to accomplish that, we've really partnered heavily with Streets and Public Works

259
00:17:34,240 --> 00:17:38,600
 and the Capital Projects Group to outsource that additional replacement.

260
00:17:38,600 --> 00:17:42,680
 So you can see in past fiscal years, we've outsourced very little system replacement,

261
00:17:42,680 --> 00:17:46,680
 whereas this fiscal year, we're nearly 30,000 feet of outsourced lines.

262
00:17:46,680 --> 00:17:52,760
 So we're far exceeding that amount this year, close to 44,000, and then we're going to increase

263
00:17:52,760 --> 00:17:59,000
 that goal next year as we really work together with the Streets program to push that to about

264
00:17:59,000 --> 00:18:01,120
 46,000 feet.

265
00:18:01,120 --> 00:18:06,240
 The benefit we see here is that we can turn outsourcing of this major maintenance on and

266
00:18:06,240 --> 00:18:07,240
 off.

267
00:18:07,240 --> 00:18:12,000
 We really can't outsource emergencies or some of the minor maintenance activities.

268
00:18:12,000 --> 00:18:17,960
 So we're able to keep our core in-house crews fully utilized and fully busy while we can

269
00:18:17,960 --> 00:18:25,340
 turn up and down the outsourcing and still meet our 24,000-foot goal.

270
00:18:25,340 --> 00:18:31,520
 In view of the FTE summary, our full-time employees, we began this year with 107.5.

271
00:18:31,520 --> 00:18:39,840
 We had 18.5 vacancies, including DSP departures, and we were approved to refill 12 and a half

272
00:18:39,840 --> 00:18:45,480
 of those, leaving us with 101 and a half FTEs going into next fiscal year.

273
00:18:45,480 --> 00:18:50,220
 And that salary savings for next fiscal year is about 540,000.

274
00:18:50,220 --> 00:18:54,400
 And you'll see the positions that were eliminated from the budget listed there in the bulleted

275
00:18:54,400 --> 00:18:59,680
 list, and we've done all this really with no reductions in level of service.

276
00:18:59,680 --> 00:19:01,280
 The plants are still operating well.

277
00:19:01,280 --> 00:19:06,400
 We're still completing our system replacement and our minor maintenance.

278
00:19:06,400 --> 00:19:11,520
 We're very proud of our ability to continue to work at a high level with fewer staff and

279
00:19:11,520 --> 00:19:15,560
 more efficiently.

280
00:19:15,560 --> 00:19:19,840
 The organizational chart for the utilities, you'll see here broken down in basically functional

281
00:19:19,840 --> 00:19:20,840
 areas.

282
00:19:20,840 --> 00:19:25,280
 We're familiar with our general manager of utilities, Kenny Banks, and his six direct

283
00:19:25,280 --> 00:19:30,120
 reports are listed there with their functional responsibilities.

284
00:19:30,120 --> 00:19:33,600
 I will just note, and I'll probably note it again in the wastewater presentation, you'll

285
00:19:33,600 --> 00:19:37,440
 see the red box around the Clear Creek Natural Heritage Center.

286
00:19:37,440 --> 00:19:42,800
 The educational programming components of Clear Creek, as well as the Sustainable Schools

287
00:19:42,800 --> 00:19:48,720
 Program have been shifted to the Parks Department, so Gary will provide more details on that

288
00:19:48,720 --> 00:19:51,240
 in his presentation.

289
00:19:51,240 --> 00:19:59,120
 With that, I will open it up to any questions on the operational aspects of the water utility.

290
00:19:59,120 --> 00:20:00,120
 Questions of the board?

291
00:20:00,120 --> 00:20:01,120
 Yes, sir.

292
00:20:01,120 --> 00:20:03,120
 Does anyone have a question?

293
00:20:03,120 --> 00:20:06,560
 Frank, on your operational data, slide number four.

294
00:20:06,560 --> 00:20:07,560
 Yes, sir.

295
00:20:07,560 --> 00:20:15,000
 The increase in water produced between June of '19 and this year is roughly, according

296
00:20:15,000 --> 00:20:22,840
 to the way I read it, around 140 million gallons, something like that, which is about a 24%

297
00:20:22,840 --> 00:20:23,840
 increase.

298
00:20:23,840 --> 00:20:26,440
 That's a pretty big jump.

299
00:20:26,440 --> 00:20:29,080
 What's the reason for that increase?

300
00:20:29,080 --> 00:20:33,000
 I don't have the data right in front of me, but I think if we all can rack our brains,

301
00:20:33,000 --> 00:20:36,880
 we can remember last spring into summer, it was a very wet year.

302
00:20:36,880 --> 00:20:41,840
 We really didn't see that uptick in water production until August and September, so

303
00:20:41,840 --> 00:20:46,280
 we really made up a lot of ground in late July, August, and September of last year.

304
00:20:46,280 --> 00:20:50,080
 Up until June, it was just rain and cats and dogs, and we weren't seeing the irrigation

305
00:20:50,080 --> 00:20:53,280
 demand that we are this year.

306
00:20:53,280 --> 00:20:57,440
 Then you're relying more on the five-year average than just last year?

307
00:20:57,440 --> 00:20:58,440
 Correct.

308
00:20:58,440 --> 00:21:01,560
 Yeah, we like to compare to the five-year average because obviously with growth, we'd

309
00:21:01,560 --> 00:21:08,080
 like to see our production continue to increase in accordance with our plans.

310
00:21:08,080 --> 00:21:13,160
 What do you think the main reason for the increase is lawn sprinklers, basically?

311
00:21:13,160 --> 00:21:17,120
 Yes, it's primarily driven by weather.

312
00:21:17,120 --> 00:21:21,680
 We had a pretty hot and dry June compared to last year.

313
00:21:21,680 --> 00:21:22,820
 How close are you?

314
00:21:22,820 --> 00:21:28,840
 You talked about the upcoming plant capacity increases, and it's going to come online.

315
00:21:28,840 --> 00:21:32,200
 How close are you now to your capacity?

316
00:21:32,200 --> 00:21:39,600
 Our peak day that we've experienced all time, I believe, is in the 37 to 39 MGD range.

317
00:21:39,600 --> 00:21:45,760
 We have 28 or 29 MGD of capacity at the Lewisville plant plus the 20 at Bray Roberts.

318
00:21:45,760 --> 00:21:50,280
 We have 49, almost 50 MGD of capacity.

319
00:21:50,280 --> 00:21:57,200
 We have about 11 MGD of spare capacity today, but with the Hunter and Coal Ranch developments,

320
00:21:57,200 --> 00:22:02,320
 as well as any renewed interest in development in the city of Denton, that additional spare

321
00:22:02,320 --> 00:22:07,240
 capacity that we have right now will be consumed, we expect, in the next decade.

322
00:22:07,240 --> 00:22:09,360
 Okay, thanks.

323
00:22:09,360 --> 00:22:13,160
 Barbara, go ahead.

324
00:22:13,160 --> 00:22:16,360
 In the past, the zebra mussels have been a big issue.

325
00:22:16,360 --> 00:22:18,200
 Are we making improvements?

326
00:22:18,200 --> 00:22:20,800
 Are we getting a hold of that better?

327
00:22:20,800 --> 00:22:26,740
 Yes, so part of those Lake Lewisville upgrade projects are some zebra mussel control technologies

328
00:22:26,740 --> 00:22:31,640
 at both raw water intakes at Bray Roberts and at Lewisville Lake.

329
00:22:31,640 --> 00:22:34,640
 One of the things that's interesting about zebra mussels, you may have seen in the news

330
00:22:34,640 --> 00:22:39,040
 this week that grapevine has now been determined to be fully infested.

331
00:22:39,040 --> 00:22:41,680
 Bray Roberts and Lewisville already are.

332
00:22:41,680 --> 00:22:46,360
 Whenever we see the initial surge in zebra mussels, it seems like their population peaks

333
00:22:46,360 --> 00:22:48,880
 and then begins to subside.

334
00:22:48,880 --> 00:22:53,840
 We haven't had too many issues with them in the last several years.

335
00:22:53,840 --> 00:22:59,680
 Whenever we go into Bray Roberts, we're having a major upgrade project between now and the

336
00:22:59,680 --> 00:23:00,680
 capacity expansion.

337
00:23:00,680 --> 00:23:04,480
 We'll go in and we'll clean our raw water line out, because we probably will find some

338
00:23:04,480 --> 00:23:07,080
 accumulation of shells in the line.

339
00:23:07,080 --> 00:23:09,040
 Thank you.

340
00:23:09,040 --> 00:23:10,760
 Any other questions?

341
00:23:10,760 --> 00:23:11,760
 Go ahead.

342
00:23:11,760 --> 00:23:20,160
 Yeah, I'd just like to make a remark about your goals and congratulate you on the improved

343
00:23:20,160 --> 00:23:25,120
 communication and collaboration and, as you say, the breaking down of silos.

344
00:23:25,120 --> 00:23:29,540
 I think this is very healthy that the more inner communication on various projects and

345
00:23:29,540 --> 00:23:35,080
 initiatives and strategies between various departments is very good, because the more

346
00:23:35,080 --> 00:23:38,080
 brains the more ideas for sure.

347
00:23:38,080 --> 00:23:39,080
 Thank you.

348
00:23:39,080 --> 00:23:40,080
 Thank you.

349
00:23:40,080 --> 00:23:43,280
 Yeah, we're trying to be as efficient as we possibly can, so we're not, you know, we know

350
00:23:43,280 --> 00:23:48,240
 the right hand and left hand need to know what each other are doing so we can cooperate.

351
00:23:48,240 --> 00:23:50,400
 And Frank, is that why we're increasing?

352
00:23:50,400 --> 00:23:54,920
 I know you've got it in the slide, but I just want the public to hear it, that we're increasing

353
00:23:54,920 --> 00:23:59,760
 what we used to do in street rehabilitations to about 46,000, and that's because we're

354
00:23:59,760 --> 00:24:02,400
 aligning with the street projects that are going on.

355
00:24:02,400 --> 00:24:07,320
 So when they tear up the street, we're going in and we're doing utilities, so it's more

356
00:24:07,320 --> 00:24:12,160
 coordinated and we're not tearing up a good street to put in utilities.

357
00:24:12,160 --> 00:24:13,160
 Correct.

358
00:24:13,160 --> 00:24:17,400
 Yes, we are definitely coordinating heavily with the street replacement program.

359
00:24:17,400 --> 00:24:22,120
 And you know, we're looking also very intently on the condition and criticality of the utilities

360
00:24:22,120 --> 00:24:23,440
 in that street.

361
00:24:23,440 --> 00:24:28,560
 If we feel like they have ample life left that we don't need to replace them today,

362
00:24:28,560 --> 00:24:31,560
 we're not going to throw good money in replacing good pipes.

363
00:24:31,560 --> 00:24:35,400
 We'll let the street project go and we'll plan to come back in, you know, 15 or 20 years

364
00:24:35,400 --> 00:24:38,200
 to replace the utilities when the next street project comes through.

365
00:24:38,200 --> 00:24:42,560
 So we're definitely trying to synchronize all that so we minimize the impacts to the

366
00:24:42,560 --> 00:24:46,080
 residents and to, like you said, we don't want to tear up a good street.

367
00:24:46,080 --> 00:24:47,640
 Good idea.

368
00:24:47,640 --> 00:24:49,680
 Oh, Karen.

369
00:24:49,680 --> 00:24:55,980
 I was just noticing on page six, you're eliminating an auditor position.

370
00:24:55,980 --> 00:25:00,560
 How many auditors do you currently have?

371
00:25:00,560 --> 00:25:10,600
 If Kenny Banks is on the line, I'll let him tackle that question.

372
00:25:10,600 --> 00:25:11,600
 Good morning, board members.

373
00:25:11,600 --> 00:25:14,440
 This is Ken Banks, general manager of utilities.

374
00:25:14,440 --> 00:25:15,440
 Can you hear me?

375
00:25:15,440 --> 00:25:16,440
 Yes.

376
00:25:16,440 --> 00:25:17,440
 Yes.

377
00:25:17,440 --> 00:25:18,440
 Good morning.

378
00:25:18,440 --> 00:25:30,560
 To address your question, we have had a single auditor position and it's really that position

379
00:25:30,560 --> 00:25:35,840
 over time has changed more into a business manager position.

380
00:25:35,840 --> 00:25:43,080
 So that title was retooled this year and we have made that into a business management

381
00:25:43,080 --> 00:25:44,080
 position.

382
00:25:44,080 --> 00:25:50,880
 So we had one that did some auditing, but predominantly was dealing with performance

383
00:25:50,880 --> 00:25:54,400
 measures, business metrics, et cetera.

384
00:25:54,400 --> 00:25:57,160
 And now we have essentially the same function.

385
00:25:57,160 --> 00:26:03,320
 It's just more the title is more aligned with what the job actually does.

386
00:26:03,320 --> 00:26:07,440
 So you have zero auditors then?

387
00:26:07,440 --> 00:26:08,440
 That is correct.

388
00:26:08,440 --> 00:26:12,560
 Having a formal auditor in the utilities, we do not have one.

389
00:26:12,560 --> 00:26:16,240
 We have an overall city auditing program.

390
00:26:16,240 --> 00:26:25,320
 So we didn't want to have any overlap there and so this is basically just a business management

391
00:26:25,320 --> 00:26:26,320
 position.

392
00:26:26,320 --> 00:26:27,320
 Okay.

393
00:26:27,320 --> 00:26:28,320
 Thank you.

394
00:26:28,320 --> 00:26:32,160
 So to make it clear, the internal auditor's office is still looking at your department.

395
00:26:32,160 --> 00:26:33,160
 Yes.

396
00:26:33,160 --> 00:26:39,840
 I mean, the internal auditor's department examines all aspects of city operations and utilities

397
00:26:39,840 --> 00:26:43,880
 has certainly been one that they've looked at on a variety of programs.

398
00:26:43,880 --> 00:26:47,520
 Billy, did you have a question or no?

399
00:26:47,520 --> 00:26:48,520
 Yeah.

400
00:26:48,520 --> 00:26:55,200
 I'm going to comment as a whole, it's not just for water, it's for all the utility budget

401
00:26:55,200 --> 00:27:00,160
 presentations.

402
00:27:00,160 --> 00:27:04,400
 We're not looking at a preliminary budget, we're looking at a presentation.

403
00:27:04,400 --> 00:27:06,760
 We don't really see the details.

404
00:27:06,760 --> 00:27:12,000
 There's a number for capital expenditure, but there is no detail as to what those, and

405
00:27:12,000 --> 00:27:20,720
 I mean purchases of equipment, vehicles, improvements, there's no details of those items.

406
00:27:20,720 --> 00:27:23,940
 Council sees this in a few minutes.

407
00:27:23,940 --> 00:27:30,920
 I really can't give any good advice without any detail and I'm not saying anything against

408
00:27:30,920 --> 00:27:31,920
 staff.

409
00:27:31,920 --> 00:27:39,560
 I think this is, seems to be the philosophy at the city right now, is that there's no

410
00:27:39,560 --> 00:27:42,360
 reason to get the board to any detail.

411
00:27:42,360 --> 00:27:46,760
 So if there's no reason to give the board to any detail or time to consider these things

412
00:27:46,760 --> 00:27:52,800
 and looking at preliminary budget, how can we possibly advise the council?

413
00:27:52,800 --> 00:27:55,000
 I think the answer is we can't.

414
00:27:55,000 --> 00:28:00,440
 I don't see any way to be able to give advice to the council.

415
00:28:00,440 --> 00:28:05,800
 If we don't get preliminary budgets with detail and discussion.

416
00:28:05,800 --> 00:28:12,880
 And in previous years, I think Nick's going to respond, what the process is for this year.

417
00:28:12,880 --> 00:28:17,320
 Yes, Mr. Cheek, and I should have mentioned that earlier and for all the board members,

418
00:28:17,320 --> 00:28:22,000
 this is fully the intent of the finance department, the city management team and the utilities

419
00:28:22,000 --> 00:28:26,240
 was to take an abbreviated budget presentation forward for the utilities.

420
00:28:26,240 --> 00:28:29,300
 What we'll do, and you'll see this is part of the financial discussion, we do fully intend

421
00:28:29,300 --> 00:28:33,680
 to circle back with the public utility board and city council to have that detailed budget

422
00:28:33,680 --> 00:28:35,440
 discussion that you're talking about.

423
00:28:35,440 --> 00:28:38,760
 So to talk about raise, to talk about the capital plan in detail and to talk about the

424
00:28:38,760 --> 00:28:39,760
 operating budget.

425
00:28:39,760 --> 00:28:42,440
 Yeah, it's obvious third.

426
00:28:42,440 --> 00:28:43,960
 So I think that's what I'm saying.

427
00:28:43,960 --> 00:28:45,760
 I think it's going to be redundant.

428
00:28:45,760 --> 00:28:48,840
 And all of a sudden we get a detailed budget and go to prove this place.

429
00:28:48,840 --> 00:28:56,440
 I mean, I would assume, and I shouldn't, that we'd get this budget detail before the council

430
00:28:56,440 --> 00:29:01,400
 sees it, because there's so many items now that we're getting either after council's

431
00:29:01,400 --> 00:29:03,080
 already approved it.

432
00:29:03,080 --> 00:29:05,680
 So what's the use in presenting it to the PUB?

433
00:29:05,680 --> 00:29:10,120
 I think it's a bad philosophy.

434
00:29:10,120 --> 00:29:12,640
 There's no reason to have the boards or commissions.

435
00:29:12,640 --> 00:29:13,800
 There's zero reason.

436
00:29:13,800 --> 00:29:17,800
 We have no, I'm not blaming you, Frank, I'm not blaming the staff at all.

437
00:29:17,800 --> 00:29:21,360
 I think it's a philosophy and it comes from the top down.

438
00:29:21,360 --> 00:29:24,680
 There's no reason for us to have these boards and commissions that we don't have time to

439
00:29:24,680 --> 00:29:27,880
 go over the detail and how it affects the city.

440
00:29:27,880 --> 00:29:32,240
 Well, Billy, I would just say that we do, again, as Nick said, we do plan to circle

441
00:29:32,240 --> 00:29:35,880
 back with the PUB with all the detail on the budget.

442
00:29:35,880 --> 00:29:42,520
 I think that the reason why we're doing this today is because of the pandemic.

443
00:29:42,520 --> 00:29:46,440
 We've certainly over the last several months have been concentrating on that.

444
00:29:46,440 --> 00:29:51,480
 And so we do plan to come back to the PUB with all the detail, giving ample time to

445
00:29:51,480 --> 00:29:54,960
 consider that and then be able to make a recommendation back to council.

446
00:29:54,960 --> 00:29:58,400
 We're not asking you for a recommendation to the council today.

447
00:29:58,400 --> 00:30:01,440
 This is simply a work session, but we do plan to do that.

448
00:30:01,440 --> 00:30:06,280
 And again, it's because of where we are with the pandemic and where we were with the budget,

449
00:30:06,280 --> 00:30:07,280
 a lot of uncertainty.

450
00:30:07,280 --> 00:30:11,920
 And it's only been in the last couple of weeks that we really had a better idea of where

451
00:30:11,920 --> 00:30:14,520
 we were headed and what the impact had been.

452
00:30:14,520 --> 00:30:20,880
 We've been very open with the PUB and the council that there's a delay in when we knew

453
00:30:20,880 --> 00:30:24,800
 that when we would know what the financial impact was, was going to be from the pandemic.

454
00:30:24,800 --> 00:30:26,800
 And so that's why we're here today.

455
00:30:26,800 --> 00:30:27,800
 Okay.

456
00:30:27,800 --> 00:30:31,360
 It was the same way last year too, Tony, is what I'm saying.

457
00:30:31,360 --> 00:30:38,000
 So I mean, this is no change and we're on, we have electronics, there is detail to the

458
00:30:38,000 --> 00:30:39,000
 budget, I'm sure.

459
00:30:39,000 --> 00:30:43,040
 Otherwise you can't formulate these numbers, they've got to come from somewhere.

460
00:30:43,040 --> 00:30:47,360
 And I don't understand the reason why that's not included in the agenda pack.

461
00:30:47,360 --> 00:30:48,360
 I really don't.

462
00:30:48,360 --> 00:30:50,800
 And Mr. Sheik, this is Nick again.

463
00:30:50,800 --> 00:30:54,040
 We can get that information to you prior to budget adoption.

464
00:30:54,040 --> 00:30:57,000
 We're not actually seeking any new formal direction from PUB today.

465
00:30:57,000 --> 00:31:02,040
 It's eventually intent to be an informational session to update the PUB where we are.

466
00:31:02,040 --> 00:31:05,720
 So before budget adoption and before we ask you to take any action on the budget or rates,

467
00:31:05,720 --> 00:31:08,040
 we'll get you a detailed budget where you can look at.

468
00:31:08,040 --> 00:31:09,040
 Okay.

469
00:31:09,040 --> 00:31:10,040
 And I appreciate that, Nick.

470
00:31:10,040 --> 00:31:11,040
 I really do.

471
00:31:11,040 --> 00:31:15,920
 What I'm saying is a few years ago, you know, this may be the way we used to do it thing,

472
00:31:15,920 --> 00:31:19,720
 which everybody hates, we said that, but we had budget season.

473
00:31:19,720 --> 00:31:22,560
 It wasn't just a budget presentation.

474
00:31:22,560 --> 00:31:28,080
 Budget season started in the spring and the board would see the details starting in the

475
00:31:28,080 --> 00:31:31,960
 spring and start having discussions about, hey, what do we want to do with this section?

476
00:31:31,960 --> 00:31:35,720
 Today's water, we're going to go over some of the water deals.

477
00:31:35,720 --> 00:31:39,360
 Two weeks later, we go over solid waste and vice versa.

478
00:31:39,360 --> 00:31:41,880
 I'm just telling you, I don't believe in the philosophy.

479
00:31:41,880 --> 00:31:46,000
 I think the boards and commissions become useless at this point if we don't have time

480
00:31:46,000 --> 00:31:48,500
 to go over the budget.

481
00:31:48,500 --> 00:31:50,620
 And I'll leave it at that.

482
00:31:50,620 --> 00:31:57,160
 For the record, I'll agree with Billy's comment and also add a couple of things.

483
00:31:57,160 --> 00:32:05,080
 I know in our last meeting, we had roughly 400 pages of detail and we got those details

484
00:32:05,080 --> 00:32:10,840
 on Friday morning, maybe Thursday night, but typically Friday morning and we have our meeting

485
00:32:10,840 --> 00:32:12,360
 on Monday morning.

486
00:32:12,360 --> 00:32:18,360
 400 pages is a lot of detail to review in 72 hours.

487
00:32:18,360 --> 00:32:23,560
 And I realize that that 72 hours is a minimum for the public posting, but I don't believe

488
00:32:23,560 --> 00:32:29,540
 there's anything wrong with providing it to the members of the PUB a little earlier so

489
00:32:29,540 --> 00:32:32,960
 that we can have a little bit of time to work.

490
00:32:32,960 --> 00:32:40,200
 And I think a perfect example of Billy's comment is I'm aware that historically at Lake Ray

491
00:32:40,200 --> 00:32:46,460
 Roberts, we had some hydroelectric production capability and that that has been shuttered

492
00:32:46,460 --> 00:32:54,280
 for a number of years, but there is a little bit of hydroelectric capability there.

493
00:32:54,280 --> 00:33:01,120
 That would be something to include in this level of discussion at the PUB work session.

494
00:33:01,120 --> 00:33:06,540
 If we had several iterations and could have open discussions about this rather than such

495
00:33:06,540 --> 00:33:13,580
 formalized presentation, the idea of adding some hydroelectric to our mix seems really

496
00:33:13,580 --> 00:33:18,180
 desirable to me and a former director of utilities was the one who made me aware of it.

497
00:33:18,180 --> 00:33:23,960
 So that's an example of something that could be brought to light and we could have a discussion

498
00:33:23,960 --> 00:33:24,960
 about it.

499
00:33:24,960 --> 00:33:29,880
 It may be that it's unfeasible as heck, that's fine, but the idea of power we don't have

500
00:33:29,880 --> 00:33:34,600
 to pay five kilowatt of would be pretty desirable.

501
00:33:34,600 --> 00:33:37,600
 Other comments?

502
00:33:37,600 --> 00:33:40,680
 Yes, Ed, go ahead.

503
00:33:40,680 --> 00:33:48,800
 I'd just like to say is with Mr. Cheek's institutional memory, having seen a lot of what's gone down

504
00:33:48,800 --> 00:33:59,820
 obviously in this on this board, I strongly support examining the means of dissemination

505
00:33:59,820 --> 00:34:01,760
 of the information.

506
00:34:01,760 --> 00:34:07,680
 So because it's just in my short time, it is pretty, pretty some of these agendas and

507
00:34:07,680 --> 00:34:12,880
 backup materials that you get on Friday and you have to get ready for Monday.

508
00:34:12,880 --> 00:34:17,760
 It's pretty, pretty daunting sometimes and especially something like the budget.

509
00:34:17,760 --> 00:34:25,320
 I see absolutely no reason not to more compartmentalize presentations over an organized schedules.

510
00:34:25,320 --> 00:34:29,720
 And I think what he said about budget season is the perfect analogy for this.

511
00:34:29,720 --> 00:34:35,320
 I think it's a very, very important, obviously very important subject that requires, I think

512
00:34:35,320 --> 00:34:40,000
 a little more depth in presentation and discussion from us.

513
00:34:40,000 --> 00:34:41,000
 Thank you.

514
00:34:41,000 --> 00:34:43,040
 And we did used to get more detailed.

515
00:34:43,040 --> 00:34:46,520
 Barbara, you and I were both on here a few years ago.

516
00:34:46,520 --> 00:34:53,360
 I mean, it would be detailed presentation, two weeks, then you, you know, so you had

517
00:34:53,360 --> 00:34:59,100
 time to digest and ask questions before we came back.

518
00:34:59,100 --> 00:35:03,520
 And I know this is an unusual year, but like Billy said, maybe last year, maybe we didn't

519
00:35:03,520 --> 00:35:04,520
 have it either.

520
00:35:04,520 --> 00:35:09,480
 I'm not really remembering and have to go back and look, the years begin to blend.

521
00:35:09,480 --> 00:35:15,440
 So Susan, let us, let us take this feedback back and, and take a look at what we've done

522
00:35:15,440 --> 00:35:19,200
 in the past and kind of where we are today and let's even come back with some additional

523
00:35:19,200 --> 00:35:23,360
 recommendations, obviously maybe too late for this year, but certainly going into next

524
00:35:23,360 --> 00:35:24,360
 year.

525
00:35:24,360 --> 00:35:25,360
 And this year is a little different.

526
00:35:25,360 --> 00:35:26,360
 I understand.

527
00:35:26,360 --> 00:35:27,360
 Yeah.

528
00:35:27,360 --> 00:35:28,360
 Karen had a question.

529
00:35:28,360 --> 00:35:31,960
 Yeah, I just wanted to follow up on Ed's comment.

530
00:35:31,960 --> 00:35:38,480
 And I only have two years institutional memory on this board, but I've got 13 years of institutional

531
00:35:38,480 --> 00:35:46,140
 memory on other boards and the whole issue of the 72 hour notice has come up every time.

532
00:35:46,140 --> 00:35:53,160
 I've been on, I've been on commissions where I'm representing a neighborhood and I need

533
00:35:53,160 --> 00:35:59,600
 to give my constituents time to go to the torch and pitchfork store, you know, to get

534
00:35:59,600 --> 00:36:04,720
 ready for the meeting next week so that they can attend the meeting prepared.

535
00:36:04,720 --> 00:36:05,720
 And it was very frustrating.

536
00:36:05,720 --> 00:36:12,480
 And we did manage to get staff to bump information to the previous Wednesday, just if something

537
00:36:12,480 --> 00:36:19,120
 came up that was going to be controversial, the commission could get information a little

538
00:36:19,120 --> 00:36:21,480
 bit earlier.

539
00:36:21,480 --> 00:36:24,800
 But that took probably two years.

540
00:36:24,800 --> 00:36:30,560
 So this might be something that needs to come up at the city level or, you know, with boards

541
00:36:30,560 --> 00:36:38,080
 and commissions as a whole, because nobody can do much in 72 hours, especially if there's

542
00:36:38,080 --> 00:36:44,000
 going to be a public hearing and you need to get people prepared to present.

543
00:36:44,000 --> 00:36:51,680
 So this might be a discussion for, you know, a longer discussion and more general discussion.

544
00:36:51,680 --> 00:36:58,000
 72 hours is just not, you know, we're sleeping for 40 some of those.

545
00:36:58,000 --> 00:37:01,920
 So we need more time.

546
00:37:01,920 --> 00:37:03,160
 All right.

547
00:37:03,160 --> 00:37:10,760
 I agree with that so much, even even when I was on another commission, we had five days

548
00:37:10,760 --> 00:37:14,880
 and this turnaround, you've got to be absorbed.

549
00:37:14,880 --> 00:37:18,720
 If you want to go out and look at something that's mentioned in this, it doesn't leave

550
00:37:18,720 --> 00:37:20,280
 you time to do research.

551
00:37:20,280 --> 00:37:22,680
 And so that would be great.

552
00:37:22,680 --> 00:37:29,320
 And regarding the budget, seems like this is my first time now, but previously when

553
00:37:29,320 --> 00:37:33,640
 I was on, we would take one at a time and discuss it.

554
00:37:33,640 --> 00:37:38,800
 I know this year's different and I thought, well, maybe this is the new normal here, but

555
00:37:38,800 --> 00:37:40,360
 it didn't used to be that way.

556
00:37:40,360 --> 00:37:46,000
 So anyway, I agree with the remarks that have been made.

557
00:37:46,000 --> 00:37:47,000
 All right.

558
00:37:47,000 --> 00:37:48,000
 With that.

559
00:37:48,000 --> 00:37:49,000
 Go ahead, Nick.

560
00:37:49,000 --> 00:37:52,840
 I'll walk you through the budget slides that we do have for you today.

561
00:37:52,840 --> 00:37:56,960
 And of course, we'll follow back up with you on the requested information about a detailed

562
00:37:56,960 --> 00:37:57,960
 discussion.

563
00:37:57,960 --> 00:38:02,640
 So real quick, the financial assumptions we're going to cover today, Frank, you kind of touched

564
00:38:02,640 --> 00:38:05,080
 on this a little bit, the growth in the out years.

565
00:38:05,080 --> 00:38:09,160
 We are currently forecasting a 2% growth in forecasted revenues, and I'll show that to

566
00:38:09,160 --> 00:38:11,460
 you shortly on the forecast.

567
00:38:11,460 --> 00:38:15,740
 We are continuing to utilize impact fee funding to revenue fund projects.

568
00:38:15,740 --> 00:38:20,200
 If you remember last year, we transitioned from using revenue or impact fee funding to

569
00:38:20,200 --> 00:38:25,320
 just offset debt service to actually revenue funding projects to mitigate that cost associated

570
00:38:25,320 --> 00:38:28,320
 with issuing that debt for those projects.

571
00:38:28,320 --> 00:38:31,800
 We do have the Hunter Coal Ranch development included in these forecasts that you will

572
00:38:31,800 --> 00:38:33,760
 see starting near 2024.

573
00:38:33,760 --> 00:38:38,200
 They do start showing up in both the water, wastewater, and solid waste utilities.

574
00:38:38,200 --> 00:38:42,880
 We are forecasting 3% growth in expenses in the out years, and then the Hunter Coal Ranch

575
00:38:42,880 --> 00:38:45,500
 statement I made about revenues.

576
00:38:45,500 --> 00:38:49,220
 We are currently proposing to the board, we do not have to take any action on this today,

577
00:38:49,220 --> 00:38:53,640
 a 2% rate decrease for water customers, so residential and commercial.

578
00:38:53,640 --> 00:38:57,960
 We have a few updates to the rate ordinance we want you to look at today and consider

579
00:38:57,960 --> 00:39:00,200
 in August for adoption.

580
00:39:00,200 --> 00:39:04,320
 These are mostly contractual updates and then anything to do with the rate decrease.

581
00:39:04,320 --> 00:39:09,040
 So we do fully intend to circle back in November, December to discuss the rates further with

582
00:39:09,040 --> 00:39:10,200
 the cost of service study.

583
00:39:10,200 --> 00:39:13,680
 The water utility is currently going through a cost of service study.

584
00:39:13,680 --> 00:39:17,560
 It will be completed by then and we do plan to come back to the PUB and city council to

585
00:39:17,560 --> 00:39:35,120
 update you of where our rates weigh up from a cost of service standpoint.

586
00:39:35,120 --> 00:39:38,520
 So in the past, we had shown you a five-year forecast.

587
00:39:38,520 --> 00:39:41,720
 What we are actually doing this year is showing you a 10-year forecast.

588
00:39:41,720 --> 00:39:45,520
 And to be more transparent about the utility and where we look at or what it looks like

589
00:39:45,520 --> 00:39:47,680
 over the 10-year horizon.

590
00:39:47,680 --> 00:39:50,560
 So a couple of things I want to point out to you, you can see the 2020 adopted budget

591
00:39:50,560 --> 00:39:54,320
 in this column, and this is the current fiscal year we're currently in.

592
00:39:54,320 --> 00:39:58,120
 We do have planned use of reserves about $2.9 million.

593
00:39:58,120 --> 00:40:01,280
 So this budget was adopted by both the PUB and city council.

594
00:40:01,280 --> 00:40:05,440
 There are no rate increases or decreases included in the proposed budget.

595
00:40:05,440 --> 00:40:09,920
 End of year estimate, we are really close to being what we originally intended in the

596
00:40:09,920 --> 00:40:14,120
 budget, about $2.7 or $2.8 million in reserve usage.

597
00:40:14,120 --> 00:40:19,240
 A couple of other things in this reform I want to point out, we do currently have a

598
00:40:19,240 --> 00:40:23,600
 little bit of COVID impact reflected in the water fund of $617,000.

599
00:40:23,600 --> 00:40:27,400
 And this is another reason we do want to circle back with the PUB and city council in November

600
00:40:27,400 --> 00:40:32,240
 and December this year, we'll actually fully understand what the COVID impact or the COVID

601
00:40:32,240 --> 00:40:36,920
 pandemic will have to the utilities at that point, and be able to update the PUB and city

602
00:40:36,920 --> 00:40:37,920
 council accordingly.

603
00:40:37,920 --> 00:40:41,520
 So that's another reason for those discussions coming up.

604
00:40:41,520 --> 00:40:45,640
 And a few other reasons for doing that is our high usage months in the water utility

605
00:40:45,640 --> 00:40:49,440
 typically, you know, tends to be July through September.

606
00:40:49,440 --> 00:40:53,200
 So we'll have that data of kind of where we finished the year and how many bills are outstanding

607
00:40:53,200 --> 00:40:54,200
 at that point.

608
00:40:54,200 --> 00:40:59,780
 Moving to your right-hand side, the 2021 proposed budget, I mean, you can't see it in this column,

609
00:40:59,780 --> 00:41:02,920
 so we have rate revenue of $39.5 million.

610
00:41:02,920 --> 00:41:06,960
 We do have some other revenues in here that you can see, non-rate revenue.

611
00:41:06,960 --> 00:41:09,640
 We have some revenue funding, impact fee funding.

612
00:41:09,640 --> 00:41:13,200
 This is what I mentioned a couple of slides ago, as we are pulling this money into the

613
00:41:13,200 --> 00:41:17,280
 operating fund to revenue funds and impact fee eligible projects.

614
00:41:17,280 --> 00:41:22,480
 We are using some impact fees to offset debt service of eligible projects, about $3.8 million.

615
00:41:22,480 --> 00:41:25,760
 For total resources, about $49 million.

616
00:41:25,760 --> 00:41:27,760
 Expenses are $52.9.

617
00:41:27,760 --> 00:41:31,580
 You can't see we did planned use of reserves about $3.9 million.

618
00:41:31,580 --> 00:41:35,120
 At that point, a couple of slides ago, we are currently proposing a 2% rate decrease

619
00:41:35,120 --> 00:41:36,840
 for the water utility.

620
00:41:36,840 --> 00:41:39,040
 And this is a little bit different than what we showed you last year.

621
00:41:39,040 --> 00:41:43,040
 We had a 2% rate increase in '22 and '23.

622
00:41:43,040 --> 00:41:47,120
 That was before the water utility and the management staff had gone back and looked at

623
00:41:47,120 --> 00:41:50,880
 the capacity of the water treatment plant facility.

624
00:41:50,880 --> 00:41:54,960
 And they plan to do a performance and regulatory upgrade in 2021.

625
00:41:54,960 --> 00:41:58,840
 And what that project does and why it's so important, it actually pushes that lake expansion

626
00:41:58,840 --> 00:42:00,680
 out to the future years.

627
00:42:00,680 --> 00:42:04,880
 So now you can see the construction of the lake expansion is this increase from this

628
00:42:04,880 --> 00:42:08,720
 '11 to '18 is actually out there in '27 and '28.

629
00:42:08,720 --> 00:42:13,340
 So pushing that lake expansion out, allowing more growth to come into the community has

630
00:42:13,340 --> 00:42:17,660
 really improved the financial condition of this fund.

631
00:42:17,660 --> 00:42:22,320
 Moving down the page a little bit further, you can see our operating reserve of $17.7

632
00:42:22,320 --> 00:42:23,760
 million.

633
00:42:23,760 --> 00:42:26,160
 You can see our reserve requirement down here at the bottom.

634
00:42:26,160 --> 00:42:28,160
 We've shown it like this for several years now.

635
00:42:28,160 --> 00:42:31,720
 So you can see the minimum is 120 days or 33%.

636
00:42:31,720 --> 00:42:34,320
 The maximum was 180 days or 50%.

637
00:42:34,320 --> 00:42:39,940
 So you can see that 17.8 or 17.7 falls within that range.

638
00:42:39,940 --> 00:42:43,320
 It continues to be in that range in the 10-year forecast.

639
00:42:43,320 --> 00:42:49,280
 Slightly dropping below out here in the future years, just a couple thousand dollars.

640
00:42:49,280 --> 00:42:51,880
 Quick question on that.

641
00:42:51,880 --> 00:42:55,120
 On the paper you say it's a reserve target.

642
00:42:55,120 --> 00:42:58,120
 You said it was a reserve requirement.

643
00:42:58,120 --> 00:43:02,960
 Is that something imposed by local statute, by state statute?

644
00:43:02,960 --> 00:43:06,920
 No, this is a reserve target for the water utility.

645
00:43:06,920 --> 00:43:10,720
 This target is set by the city utilities and finance department.

646
00:43:10,720 --> 00:43:14,000
 I will tell you the one thing we're going to be doing this winter is not only looking

647
00:43:14,000 --> 00:43:17,260
 at the utilities, but looking at all the funds across the city.

648
00:43:17,260 --> 00:43:20,720
 So any special revenue fund that the city has, any internal service fund, and what should

649
00:43:20,720 --> 00:43:23,020
 that reserve be?

650
00:43:23,020 --> 00:43:28,040
 So hopefully that answers your question, but that is our internal goal is to have that

651
00:43:28,040 --> 00:43:30,080
 reserve between those reserve requirements.

652
00:43:30,080 --> 00:43:33,320
 So that is staff's goal?

653
00:43:33,320 --> 00:43:38,000
 Well, Charlie, I would add that the council does have a, did pass an ordinance adopting

654
00:43:38,000 --> 00:43:39,760
 a fund balance policy.

655
00:43:39,760 --> 00:43:46,480
 And so within that policy, these targets are included in that ordinance.

656
00:43:46,480 --> 00:43:48,520
 Okay.

657
00:43:48,520 --> 00:43:53,440
 So the city council has approved a target, but it's not a requirement?

658
00:43:53,440 --> 00:43:57,280
 Not necessarily a requirement.

659
00:43:57,280 --> 00:44:03,800
 Many of the bond rating agencies do want to look at the health of these funds.

660
00:44:03,800 --> 00:44:08,120
 And so generally they want to make sure that we have adequate reserves to meet our operating

661
00:44:08,120 --> 00:44:13,760
 needs as well as any debts or coverage ratios, which is another measure that's in that financial

662
00:44:13,760 --> 00:44:14,760
 statement.

663
00:44:14,760 --> 00:44:15,760
 Okay.

664
00:44:15,760 --> 00:44:20,600
 For the record, I'm not against the idea of having a good solid target and being physically

665
00:44:20,600 --> 00:44:21,600
 stable.

666
00:44:21,600 --> 00:44:26,440
 I just didn't know whether it was some state imposed requirement or something done by staff,

667
00:44:26,440 --> 00:44:33,440
 or if city council is the correct, that's great.

668
00:44:33,440 --> 00:44:34,440
 Correct.

669
00:44:34,440 --> 00:44:37,400
 Anybody else have any questions or yes, Nick.

670
00:44:37,400 --> 00:44:38,400
 Okay.

671
00:44:38,400 --> 00:44:39,400
 Nick.

672
00:44:39,400 --> 00:44:40,400
 I have a question.

673
00:44:40,400 --> 00:44:46,120
 Can you talk about impact fees a little bit and why you budget projects separately for

674
00:44:46,120 --> 00:44:47,120
 impact fees?

675
00:44:47,120 --> 00:44:48,120
 You bet.

676
00:44:48,120 --> 00:44:50,040
 So that's a great question.

677
00:44:50,040 --> 00:44:55,520
 So the city under when an impact fee study in 2018 in the fall, the winter of 2018, what

678
00:44:55,520 --> 00:44:59,080
 that study does is it looks at any project that the water wastewater utility will do

679
00:44:59,080 --> 00:45:04,320
 that's growth related and those projects are deemed impact fee eligible.

680
00:45:04,320 --> 00:45:06,760
 There is a consumptive use associated with those projects.

681
00:45:06,760 --> 00:45:11,240
 What that consumptive use identifies is how much of that asset can we recover over a 10

682
00:45:11,240 --> 00:45:12,240
 year period?

683
00:45:12,240 --> 00:45:16,520
 The study takes it a step further and it divides the projects into already completed and will

684
00:45:16,520 --> 00:45:20,720
 be completed in a 10 year horizon or a 10 year period.

685
00:45:20,720 --> 00:45:23,880
 So the ones that are completed, of course, we have to fund with debt service.

686
00:45:23,880 --> 00:45:28,320
 We pull that money into the operating fund to offset that eligible debt service.

687
00:45:28,320 --> 00:45:31,120
 Anything that's a future project, we fund that money.

688
00:45:31,120 --> 00:45:36,460
 We fund that project up front using impact fee revenue funding.

689
00:45:36,460 --> 00:45:40,080
 Hopefully that addresses your question.

690
00:45:40,080 --> 00:45:41,720
 I didn't capture it.

691
00:45:41,720 --> 00:45:44,720
 Define for me what an impact fee is.

692
00:45:44,720 --> 00:45:47,400
 What exactly is an impact fee?

693
00:45:47,400 --> 00:45:48,400
 Great question.

694
00:45:48,400 --> 00:45:54,700
 One was to build a house in our community, that is the fee to access to city's water

695
00:45:54,700 --> 00:45:57,080
 infrastructure or wastewater infrastructure.

696
00:45:57,080 --> 00:46:01,880
 So to go out there and to tap onto that wastewater line or that water line, the impact fee is

697
00:46:01,880 --> 00:46:03,620
 that set amount to do that.

698
00:46:03,620 --> 00:46:08,440
 So it will be charged to that household or charged to that developer.

699
00:46:08,440 --> 00:46:12,480
 Okay it's the initial tap fee for one time thing, okay.

700
00:46:12,480 --> 00:46:15,240
 Well tap fee and impact fee are two separate things.

701
00:46:15,240 --> 00:46:18,280
 The water utility does have a tap fee and an impact fee.

702
00:46:18,280 --> 00:46:20,860
 So both of those are charged when someone does tap into the system.

703
00:46:20,860 --> 00:46:24,800
 But yes, there are a tap fee and an impact fee to answer your question.

704
00:46:24,800 --> 00:46:29,840
 And the impact fee is paid by the particular user, correct?

705
00:46:29,840 --> 00:46:30,840
 Yes, sir.

706
00:46:30,840 --> 00:46:31,840
 It would be a user.

707
00:46:31,840 --> 00:46:32,840
 Yeah.

708
00:46:32,840 --> 00:46:40,520
 I have another question about slide 10, your 10 year budget presentation.

709
00:46:40,520 --> 00:46:43,400
 I think I could share it with the group and Larry correct me if I'm wrong, but I think

710
00:46:43,400 --> 00:46:47,360
 I can pull it up and address this question.

711
00:46:47,360 --> 00:46:56,820
 Okay if you look at the adopted 2020 budget numbers for the capital projects, those numbers

712
00:46:56,820 --> 00:47:01,720
 match what you estimate you're going to spend in 2020 also.

713
00:47:01,720 --> 00:47:08,000
 Meaning that the way I read it, you expect to accomplish and spend 100% of what you have

714
00:47:08,000 --> 00:47:11,120
 budgeted for those capital items.

715
00:47:11,120 --> 00:47:15,080
 That's something that has never been done in the last three or four years.

716
00:47:15,080 --> 00:47:22,640
 And that was the issue what I was getting at in the previous action item question about

717
00:47:22,640 --> 00:47:30,920
 why is it that we can identify needed projects, budget for them, sell bonds for them, and

718
00:47:30,920 --> 00:47:34,300
 then not get the project done.

719
00:47:34,300 --> 00:47:38,360
 This year, according to the way I read your numbers, you're going to get 100% of the projects

720
00:47:38,360 --> 00:47:42,180
 done but that's never been done in the last three or four years.

721
00:47:42,180 --> 00:47:48,560
 And my question is, what's changed in 2020 compared to the previous years that will allow

722
00:47:48,560 --> 00:47:55,600
 you to say you're going to get 100% of all these projects done as budgeted?

723
00:47:55,600 --> 00:47:56,600
 >> It's a great question also.

724
00:47:56,600 --> 00:48:02,160
 And then Frank, you come up and address the projects getting completed standpoint.

725
00:48:02,160 --> 00:48:06,380
 From the financial standpoint, right, the 9.3 million Mr. Baffert is talking about is

726
00:48:06,380 --> 00:48:07,380
 calling out here.

727
00:48:07,380 --> 00:48:09,280
 This is the revenue funded capital.

728
00:48:09,280 --> 00:48:13,120
 This represents about one fourth of the water CIP.

729
00:48:13,120 --> 00:48:17,280
 So entire water CIP is 30 to 40 million.

730
00:48:17,280 --> 00:48:20,880
 What we do is we do a couple of different things throughout the year.

731
00:48:20,880 --> 00:48:25,520
 So the PUB and City Council adopts a budget and that budget may include $30 million in

732
00:48:25,520 --> 00:48:27,440
 capital projects.

733
00:48:27,440 --> 00:48:32,640
 Before we actually issue that debt, what we've done in the last few years, staff has taken

734
00:48:32,640 --> 00:48:35,900
 a look at it and said, okay, what can we complete this fiscal year?

735
00:48:35,900 --> 00:48:41,200
 So this year, for example, in the 2020 budget, we had 20 to 30 million in the capital plan.

736
00:48:41,200 --> 00:48:45,000
 Looking back and when Frank and his staff went through those projects, we actually identified

737
00:48:45,000 --> 00:48:47,520
 we did not need to issue any of those bond proceeds.

738
00:48:47,520 --> 00:48:52,040
 But we still do plan to revenue fund some projects as you see called out here.

739
00:48:52,040 --> 00:48:55,600
 A large portion of this revenue funding are field service replacement jobs.

740
00:48:55,600 --> 00:48:59,680
 So I noticed Susan asked the question earlier about those, you know, replacements under

741
00:48:59,680 --> 00:49:01,880
 streets and neighborhoods and such.

742
00:49:01,880 --> 00:49:04,320
 A large portion of that is this.

743
00:49:04,320 --> 00:49:08,320
 But I also have a financial slide in a couple of slides, Mr. Bafford, that will hopefully

744
00:49:08,320 --> 00:49:13,600
 address your capital question a little bit better to kind of show that historical spend

745
00:49:13,600 --> 00:49:14,600
 down.

746
00:49:14,600 --> 00:49:18,360
 Three or four years, you're absolutely correct, three or four years ago, the water utility

747
00:49:18,360 --> 00:49:23,120
 had a large amount of money that was unencumbered and projects were not getting done.

748
00:49:23,120 --> 00:49:26,800
 I thank staff that here lately, those projects have been getting done and we've actually

749
00:49:26,800 --> 00:49:30,400
 drawn down on that amount of money available in the water utility.

750
00:49:30,400 --> 00:49:33,160
 And I'll show that to you shortly in that slide I'm talking about.

751
00:49:33,160 --> 00:49:36,720
 Does that address your question or has you got more operational questions I can get Frank

752
00:49:36,720 --> 00:49:37,920
 to come up and address?

753
00:49:37,920 --> 00:49:42,600
 Oh, I'll look forward to see what you have down the road here.

754
00:49:42,600 --> 00:49:45,360
 And if it doesn't answer your question, we'll be happy to provide you additional detail

755
00:49:45,360 --> 00:49:46,360
 down the road.

756
00:49:46,360 --> 00:49:49,760
 This is our first attempt to help answer your question.

757
00:49:49,760 --> 00:50:03,720
 We'll pull it back up if that's okay, Susan.

758
00:50:03,720 --> 00:50:05,920
 So this is the five-year capital plan.

759
00:50:05,920 --> 00:50:08,440
 This isn't the slide to address your question, Mr. Bafford.

760
00:50:08,440 --> 00:50:14,200
 This is the adopted or what will be considered for adoption by PUV and City Council in the

761
00:50:14,200 --> 00:50:15,200
 coming months.

762
00:50:15,200 --> 00:50:20,360
 So you can see in 2021, we have $35.5 million in debt issuance.

763
00:50:20,360 --> 00:50:23,920
 Plan projects that we plan to complete in 2021.

764
00:50:23,920 --> 00:50:27,400
 Revenue funding, this is coming from the operating fund.

765
00:50:27,400 --> 00:50:32,680
 So rate revenue, we have about $12.9 or $13 million in project funding.

766
00:50:32,680 --> 00:50:36,000
 Impact fee funding, which we call it on the five-year forecast, is about $2.7.

767
00:50:36,000 --> 00:50:40,200
 We have some aid in construction and some fee accord replacement.

768
00:50:40,200 --> 00:50:45,760
 So total CIP for 2021 is $51.7 million or $51.8.

769
00:50:45,760 --> 00:50:51,160
 Over the five-year period, you can see that number is just around $100 million.

770
00:50:51,160 --> 00:50:54,560
 So I'll get into a detailed discussion about the projects that are getting completed here

771
00:50:54,560 --> 00:50:55,560
 shortly.

772
00:50:55,560 --> 00:50:59,840
 But to my earlier point, this would be the amount included in the budget.

773
00:50:59,840 --> 00:51:04,280
 What staff does before we formally issue this debt in the water utility, we actually do

774
00:51:04,280 --> 00:51:10,640
 look at our project schedule and what can we complete that fiscal year.

775
00:51:10,640 --> 00:51:15,200
 So this is the kind of project timeline of some projects we currently have.

776
00:51:15,200 --> 00:51:19,640
 This is not a complete list of everything in the water utility.

777
00:51:19,640 --> 00:51:24,800
 We did pick out the majority of the larger projects, the ones that we can have that discussion

778
00:51:24,800 --> 00:51:26,200
 with you today about.

779
00:51:26,200 --> 00:51:29,320
 There are several field service replacement projects that are smaller than this that are

780
00:51:29,320 --> 00:51:30,320
 cash-funded.

781
00:51:30,320 --> 00:51:34,520
 But starting at the top, you know, Elm and Locust, you can see the budgeted amount in

782
00:51:34,520 --> 00:51:36,880
 this column of $950,000.

783
00:51:36,880 --> 00:51:40,960
 What the expenses are today, what's unencumbered, and the funds remaining.

784
00:51:40,960 --> 00:51:43,840
 And then one thing we wanted to provide you is kind of, you know, what was that estimated

785
00:51:43,840 --> 00:51:49,520
 completion date, which in this project is January 31st of 2020.

786
00:51:49,520 --> 00:51:53,860
 I'd like to draw your attention to this number down here, this $10.9 million.

787
00:51:53,860 --> 00:51:58,060
 These projects make up about $10.9 million, about $14 million that's currently unencumbered

788
00:51:58,060 --> 00:51:59,760
 in the water utility.

789
00:51:59,760 --> 00:52:03,520
 Three years ago, that $14 million was about $25 to $30 million.

790
00:52:03,520 --> 00:52:07,080
 So over the last two or three years, the water utility and Frank and his staff have done

791
00:52:07,080 --> 00:52:11,280
 a great job getting these projects completed, and we've actually brought that unencumbered

792
00:52:11,280 --> 00:52:12,920
 amount down in the water utility.

793
00:52:12,920 --> 00:52:17,440
 Does anyone have any detailed question on these projects that Frank can come up and address

794
00:52:17,440 --> 00:52:20,440
 from a completion standpoint?

795
00:52:20,440 --> 00:52:27,080
 This looks like it, Nick.

796
00:52:27,080 --> 00:52:28,080
 Okay.

797
00:52:28,080 --> 00:52:31,460
 So this is not a complete list.

798
00:52:31,460 --> 00:52:36,200
 The ordinance will come back to you, Mr. Cheek, as you had said about that detail.

799
00:52:36,200 --> 00:52:39,560
 Before we ask you to adopt a rate ordinance, you will get a complete red line ordinance

800
00:52:39,560 --> 00:52:42,520
 that will have all the rate changes identified in it.

801
00:52:42,520 --> 00:52:46,760
 So looking at the 2% decrease across the water utility, that's the direction we get from

802
00:52:46,760 --> 00:52:47,760
 the PUB.

803
00:52:47,760 --> 00:52:50,500
 For residential, we use a 3/4 inch meter.

804
00:52:50,500 --> 00:52:55,280
 This is the most common meter size in the residential water utility, and you can see

805
00:52:55,280 --> 00:52:58,160
 the current rate that's currently in place is $16.

806
00:52:58,160 --> 00:53:04,480
 This is the facility charge, but the 2% decrease, this would go to 1568.

807
00:53:04,480 --> 00:53:09,840
 Our volume charge from zero to 15,000 gallons, and it is charged per 1,000 gallon, it's 415

808
00:53:09,840 --> 00:53:10,840
 per 1,000.

809
00:53:10,840 --> 00:53:13,940
 This would decrease to 407.

810
00:53:13,940 --> 00:53:17,300
 And then commercial, we use a 2 inch meter, so the facility charge currently in place

811
00:53:17,300 --> 00:53:22,880
 is 5150, but the 2% decrease would be $50.47.

812
00:53:22,880 --> 00:53:26,360
 The volume charge for commercial per 1,000 gallon is 445.

813
00:53:26,360 --> 00:53:27,360
 This would decrease to 436.

814
00:53:27,360 --> 00:53:30,840
 There are a couple other rates I wanted to update the PUB on today.

815
00:53:30,840 --> 00:53:36,960
 These are contractual agreements that we have for wholesale water agreements that are out

816
00:53:36,960 --> 00:53:37,960
 there.

817
00:53:37,960 --> 00:53:41,640
 So the Wholesale Raw Water Service to the Upper Trinity Regional Water District, this

818
00:53:41,640 --> 00:53:43,460
 is a rate we update every single year.

819
00:53:43,460 --> 00:53:46,160
 It's currently set at .7401.

820
00:53:46,160 --> 00:53:52,560
 This rate is 85% of the Dallas wholesale rate, so that rate would go to .7578.

821
00:53:52,560 --> 00:53:57,400
 And then the pass through Lake Chapman, this is another rate we update.

822
00:53:57,400 --> 00:54:01,480
 According to the agreement, this one adjusts annually on a CPI adjuster for the month of

823
00:54:01,480 --> 00:54:02,480
 June.

824
00:54:02,480 --> 00:54:08,440
 So this rate would increase from .0270 to .0275.

825
00:54:08,440 --> 00:54:13,040
 Like I said, this is not an all-inclusive list that will come back to the Public Utility

826
00:54:13,040 --> 00:54:16,820
 Board in a red line rate ordinance that lists all the rates.

827
00:54:16,820 --> 00:54:19,840
 What we wanted to show, and we showed this to council last year too, and I think we've

828
00:54:19,840 --> 00:54:24,580
 historically shown at the PUB in the previous years, this is what an average residential

829
00:54:24,580 --> 00:54:27,160
 customer could expect to pay in the city of Denton.

830
00:54:27,160 --> 00:54:29,920
 So at the top, you saw the electric utility last week.

831
00:54:29,920 --> 00:54:34,280
 We are currently not forecasting any rate changes in that utility.

832
00:54:34,280 --> 00:54:37,480
 Water we do based on 9,200 gallons.

833
00:54:37,480 --> 00:54:43,360
 You can see what a customer would pay in the proposed budget of .5310, which is at 2% decrease.

834
00:54:43,360 --> 00:54:46,560
 In wastewater, which you haven't seen this one yet, we're not proposing any rate changes

835
00:54:46,560 --> 00:54:50,240
 for the wastewater utility, 3,115 would be the rate.

836
00:54:50,240 --> 00:54:55,760
 And then solid waste, we are currently proposing a $1 decrease for residential customers, which

837
00:54:55,760 --> 00:54:58,560
 would take that rate to $20.51.

838
00:54:58,560 --> 00:55:01,680
 So total is $229.56.

839
00:55:01,680 --> 00:55:05,000
 So this would be a decrease for the average residential customer of $2.08.

840
00:55:05,000 --> 00:55:10,180
 A couple of other things, if you do remember, the PUB and city council both approved the

841
00:55:10,180 --> 00:55:16,520
 mid-year rate decrease last November and December for the residential solid waste customers,

842
00:55:16,520 --> 00:55:17,520
 the $3.

843
00:55:17,520 --> 00:55:26,640
 So previously, this rate was $24.51, but you have an asterisk, it is currently $21.51.

844
00:55:26,640 --> 00:55:31,240
 So this presentation, we'll go to council tomorrow, August the 4th.

845
00:55:31,240 --> 00:55:34,920
 We do intend to circle back with the PUB in the coming weeks.

846
00:55:34,920 --> 00:55:37,040
 The state may change based on our discussion today.

847
00:55:37,040 --> 00:55:41,040
 So maybe later in August, when we get that detailed information to the public utility

848
00:55:41,040 --> 00:55:42,040
 board.

849
00:55:42,040 --> 00:55:45,920
 And then September 15th, the city council is currently scheduled to adopt the budget

850
00:55:45,920 --> 00:55:47,680
 and tax rate and the capital plan.

851
00:55:47,680 --> 00:55:52,080
 And as I previously mentioned, circling back with the public utility board in December

852
00:55:52,080 --> 00:55:57,680
 of 2020, with that mid-year budget and rate discussion, when we fully understand the impact

853
00:55:57,680 --> 00:55:59,880
 from the COVID pandemic.

854
00:55:59,880 --> 00:56:01,400
 And with that, I will pull it down.

855
00:56:01,400 --> 00:56:03,680
 That concludes the financial portion of water.

856
00:56:03,680 --> 00:56:07,760
 I'll turn it back over to Frank to go over the operations for wastewater shortly, if

857
00:56:07,760 --> 00:56:09,920
 you don't have any questions.

858
00:56:09,920 --> 00:56:11,960
 Anybody have questions?

859
00:56:11,960 --> 00:56:17,600
 You're on mute.

860
00:56:17,600 --> 00:56:19,320
 My apologies.

861
00:56:19,320 --> 00:56:28,420
 In terms of the rate structure, if you could guesstimate, do you have just kind of a shoot

862
00:56:28,420 --> 00:56:34,800
 from the hip kind of cost per thousand that it costs you to operate?

863
00:56:34,800 --> 00:56:42,720
 I mean, is it roughly, you know, $3.75 per thousand, $4 per thousand, $40 per thousand?

864
00:56:42,720 --> 00:56:45,160
 Mr. Parker, in front of me right now, I do not have that number.

865
00:56:45,160 --> 00:56:49,840
 I will tell you that that number will is currently being revised in that cost of service study

866
00:56:49,840 --> 00:56:53,040
 that will come back to the public utility board in November.

867
00:56:53,040 --> 00:56:56,240
 But we can look it up based on our current cost of service and I can provide that number

868
00:56:56,240 --> 00:56:58,240
 to get a follow-up response.

869
00:56:58,240 --> 00:57:07,760
 Okay, not asking for precision, but is that number in the 30s, the 40s, the 50s, 60s?

870
00:57:07,760 --> 00:57:10,880
 The number is close to the number that you see in the presentation.

871
00:57:10,880 --> 00:57:14,780
 So every year we do update a cost of service study that looks at the facility charge and

872
00:57:14,780 --> 00:57:16,840
 looks at the volume charge.

873
00:57:16,840 --> 00:57:22,760
 But to give you an exact number, I don't have it in front of me right now, Mr. Parker.

874
00:57:22,760 --> 00:57:27,080
 The intent of the cost of service study is to make sure we just recover our costs and

875
00:57:27,080 --> 00:57:29,160
 nothing more.

876
00:57:29,160 --> 00:57:31,680
 That's correct.

877
00:57:31,680 --> 00:57:32,680
 That's correct.

878
00:57:32,680 --> 00:57:34,360
 And we do cost of service studies.

879
00:57:34,360 --> 00:57:37,840
 Solid waste went through one, I think it was two years ago.

880
00:57:37,840 --> 00:57:40,680
 Water and wastewater are both going through one now.

881
00:57:40,680 --> 00:57:44,600
 And what that cost of service study do, right, it'll give us staff a working model that we

882
00:57:44,600 --> 00:57:47,320
 can update annually, usually for about a five-year period.

883
00:57:47,320 --> 00:57:50,280
 So we update these every five years.

884
00:57:50,280 --> 00:57:55,440
 We will also, we intend to have a rate discussion and a cost of service discussion with you

885
00:57:55,440 --> 00:57:57,940
 for the electric utility in November, December this year also.

886
00:57:57,940 --> 00:58:04,200
 So there'll be four rate discussions for each of the utilities in detail coming up in November,

887
00:58:04,200 --> 00:58:05,200
 December.

888
00:58:05,200 --> 00:58:06,200
 Okay.

889
00:58:06,200 --> 00:58:18,160
 I guess my question was, it looks like, is it $48 per thousand that we have for the top

890
00:58:18,160 --> 00:58:19,640
 commercial cost?

891
00:58:19,640 --> 00:58:23,160
 Let me pull it right back up here.

892
00:58:23,160 --> 00:58:34,320
 Hang on, just bear with me a second, Mr. Parker.

893
00:58:34,320 --> 00:58:40,360
 Is this the slide you're referring to for the wastewater, for the water rate?

894
00:58:40,360 --> 00:58:42,520
 Water rates, probably two behind that, I think.

895
00:58:42,520 --> 00:58:43,520
 Okay.

896
00:58:43,520 --> 00:58:44,840
 My memory serves me correct.

897
00:58:44,840 --> 00:58:48,840
 Slide 13, I believe, there.

898
00:58:48,840 --> 00:58:49,840
 This one?

899
00:58:49,840 --> 00:58:50,840
 Okay.

900
00:58:50,840 --> 00:58:54,760
 So you're charging $4.45 per thousand.

901
00:58:54,760 --> 00:58:56,200
 That's correct.

902
00:58:56,200 --> 00:59:03,240
 And then for the lowest residential, looks like you're getting $4.15.

903
00:59:03,240 --> 00:59:08,660
 And I would expect that to be residential being slightly lower, but about the same.

904
00:59:08,660 --> 00:59:16,680
 What are the top commercial and top residential rates you're using right now?

905
00:59:16,680 --> 00:59:19,240
 For the highest tier, is that your question?

906
00:59:19,240 --> 00:59:21,440
 For the low tier, above zero to $15,000.

907
00:59:21,440 --> 00:59:22,440
 I can get that for you.

908
00:59:22,440 --> 00:59:23,440
 Hang on just a second.

909
00:59:23,440 --> 00:59:24,440
 I have it.

910
00:59:24,440 --> 00:59:32,560
 Hang on just a second.

911
00:59:32,560 --> 00:59:48,640
 Mr. Parker.

912
00:59:48,640 --> 00:59:53,360
 So for commercial service, we actually have a volume charge for inside the city of Denton

913
00:59:53,360 --> 00:59:54,360
 at $4.45.

914
00:59:54,360 --> 00:59:57,840
 So to answer your question, we do currently not have a tier in place.

915
00:59:57,840 --> 01:00:01,800
 There's a $4.45 charge for commercial customers per thousand gallon.

916
01:00:01,800 --> 01:00:04,500
 It's a little bit different.

917
01:00:04,500 --> 01:00:08,440
 Residential does have a tiered structure to incentivize water conservation.

918
01:00:08,440 --> 01:00:11,480
 So what I was showing you is zero to 15,000 gallon.

919
01:00:11,480 --> 01:00:20,040
 As you step up on the residential water side, over 50,000 gallons would be 415 if you're

920
01:00:20,040 --> 01:00:21,040
 in the winter.

921
01:00:21,040 --> 01:00:27,280
 But in the summer, when we're incentivizing that conservation, it goes to $10.90.

922
01:00:27,280 --> 01:00:36,240
 So right now you're charging large residential users more than double what you charge commercial?

923
01:00:36,240 --> 01:00:39,560
 For over 50,000 gallons.

924
01:00:39,560 --> 01:00:42,840
 That is currently the way that the rate ordinance is set up.

925
01:00:42,840 --> 01:00:48,440
 If you went over 50,000 gallon, your per thousand gallon rate would be $10.90.

926
01:00:48,440 --> 01:00:49,520
 So to answer your question, yes.

927
01:00:49,520 --> 01:00:59,560
 If a residential customer did go over 50,000 gallons, it would be double.

928
01:00:59,560 --> 01:01:09,440
 That seems out of line to me for people who are on semi-agricultural or larger products

929
01:01:09,440 --> 01:01:11,760
 or homes.

930
01:01:11,760 --> 01:01:17,480
 That seems awfully punitive when somebody like, I don't know, Safety Clean, I don't

931
01:01:17,480 --> 01:01:24,700
 mean to pick on them as an example, is paying less than half of the rate of someone who

932
01:01:24,700 --> 01:01:29,280
 lives on a large or old residential property.

933
01:01:29,280 --> 01:01:33,240
 That seems like a very large difference.

934
01:01:33,240 --> 01:01:37,360
 I certainly understand incentivizing lower usage.

935
01:01:37,360 --> 01:01:38,600
 That makes sense.

936
01:01:38,600 --> 01:01:45,560
 But doubling the rate seems a little overly punitive, in my opinion.

937
01:01:45,560 --> 01:01:50,080
 So Charlie, just a question for you on your comment.

938
01:01:50,080 --> 01:01:58,760
 Are you saying it's not fair to the residential, whereas commercial residential should be more

939
01:01:58,760 --> 01:01:59,760
 in line?

940
01:01:59,760 --> 01:02:03,800
 Or are you saying it's just too much?

941
01:02:03,800 --> 01:02:04,800
 Yes.

942
01:02:04,800 --> 01:02:05,800
 I don't understand.

943
01:02:05,800 --> 01:02:12,280
 It seems, you know, I looked up Gainesville because it's a nearby city.

944
01:02:12,280 --> 01:02:19,440
 And Gainesville is like 48 per thousand for everybody or for all residential.

945
01:02:19,440 --> 01:02:25,560
 And Denton has chosen to have a punitive rate for large residential users.

946
01:02:25,560 --> 01:02:33,480
 It just seems to me that that's a little too high a punitive rate relative to the commercial.

947
01:02:33,480 --> 01:02:38,440
 The commercial is 48 cents, almost $11 per thousand.

948
01:02:38,440 --> 01:02:40,440
 Seems pretty punitive.

949
01:02:40,440 --> 01:02:41,940
 Yeah.

950
01:02:41,940 --> 01:02:45,160
 So I'll comment on that, and I think this is the philosophy.

951
01:02:45,160 --> 01:02:54,320
 I'm putting words in mixed mouth here, but the commercial user is using that for manufacturing

952
01:02:54,320 --> 01:02:57,020
 or whatever purposes it may be.

953
01:02:57,020 --> 01:03:03,400
 And so they're using that water to do their business, whereas the residential is doing

954
01:03:03,400 --> 01:03:07,360
 to be somebody overwatering a major amount, I would assume.

955
01:03:07,360 --> 01:03:12,440
 And the philosophy is you're trying to sell water to the commercial user, but we're trying

956
01:03:12,440 --> 01:03:16,160
 to promote saving water to the residential user.

957
01:03:16,160 --> 01:03:17,400
 Is that correct, Nate?

958
01:03:17,400 --> 01:03:18,400
 Yes, Mr. Jake.

959
01:03:18,400 --> 01:03:19,400
 That is correct.

960
01:03:19,400 --> 01:03:25,760
 That is for over irrigation that this incentivizes people to over irrigate their yards.

961
01:03:25,760 --> 01:03:31,000
 And one other thing, Mr. Parker, I was trying to find you on the screen here really quick.

962
01:03:31,000 --> 01:03:34,540
 So the over $50,000 is going from the incremental amount.

963
01:03:34,540 --> 01:03:37,720
 So anything over $50,000 would be charged at that $1090.

964
01:03:37,720 --> 01:03:40,360
 Anything under the other rate would still apply.

965
01:03:40,360 --> 01:03:43,200
 So let's make sure I clarify that really quick.

966
01:03:43,200 --> 01:03:47,080
 So anything leading up that $50,000 -- sorry, Susan.

967
01:03:47,080 --> 01:03:51,200
 No, $50,000 in a residential is a lot of water.

968
01:03:51,200 --> 01:03:52,200
 Yeah.

969
01:03:52,200 --> 01:03:53,200
 Agreed.

970
01:03:53,200 --> 01:03:54,200
 A lot of water.

971
01:03:54,200 --> 01:03:59,640
 And won't this be addressed when we do the cost of service study again, because we do

972
01:03:59,640 --> 01:04:01,720
 it by class?

973
01:04:01,720 --> 01:04:02,720
 Yeah.

974
01:04:02,720 --> 01:04:03,720
 Yeah.

975
01:04:03,720 --> 01:04:07,800
 And our full intent is to have the consultant here to help us address these questions with

976
01:04:07,800 --> 01:04:09,400
 the Public Utility Board.

977
01:04:09,400 --> 01:04:15,320
 Staff will have a presentation that will be detailed to go through these rates in a full

978
01:04:15,320 --> 01:04:16,320
 presentation.

979
01:04:16,320 --> 01:04:19,240
 And you can look at each one of them separately and ask those questions.

980
01:04:19,240 --> 01:04:20,240
 Absolutely.

981
01:04:20,240 --> 01:04:21,240
 And this is Tony.

982
01:04:21,240 --> 01:04:23,480
 And that will be in November.

983
01:04:23,480 --> 01:04:25,960
 We'll have that ready for you in work session.

984
01:04:25,960 --> 01:04:26,960
 Russ.

985
01:04:26,960 --> 01:04:30,080
 Yes, I have a question about Hunter coal.

986
01:04:30,080 --> 01:04:35,880
 I believe you said you incorporated those numbers in beginning 2024 into your budget

987
01:04:35,880 --> 01:04:37,800
 figures.

988
01:04:37,800 --> 01:04:41,720
 My question is, how did you phase that in?

989
01:04:41,720 --> 01:04:47,040
 Obviously, in 2024, Hunter coal is not going to be 100% built.

990
01:04:47,040 --> 01:04:49,720
 You would probably phase that in over a period of years.

991
01:04:49,720 --> 01:04:52,120
 What kind of assumptions did you make there?

992
01:04:52,120 --> 01:04:54,280
 That's a great question.

993
01:04:54,280 --> 01:04:57,040
 And Frank can definitely give us a little more detail on that.

994
01:04:57,040 --> 01:05:00,520
 But the city did contract with a consultant to come in to look at the Hunter coal ranch

995
01:05:00,520 --> 01:05:01,520
 development.

996
01:05:01,520 --> 01:05:05,080
 What the consultant did, they did look at the phased in approach to that development.

997
01:05:05,080 --> 01:05:07,640
 So starting near 2024, you're absolutely correct.

998
01:05:07,640 --> 01:05:12,180
 There's not 100% of those residents in commercial businesses going to be built at once.

999
01:05:12,180 --> 01:05:14,000
 So this is a phased in approach.

1000
01:05:14,000 --> 01:05:18,880
 So there is some showing up in 2024, but it's minimum in the total size of that development.

1001
01:05:18,880 --> 01:05:21,160
 So it is not everything at once.

1002
01:05:21,160 --> 01:05:26,760
 It is just what that study identified as being online and needing water service or wastewater

1003
01:05:26,760 --> 01:05:30,360
 service starting in 2024.

1004
01:05:30,360 --> 01:05:37,400
 I would think you could maybe present that in one table with years in the dollar amount

1005
01:05:37,400 --> 01:05:43,000
 per year contribution to the budget or demand on the budget.

1006
01:05:43,000 --> 01:05:46,560
 Yeah, we can we can summarize that for you, Mr. Bafford.

1007
01:05:46,560 --> 01:05:48,880
 All right, I think we need to move on.

1008
01:05:48,880 --> 01:05:56,960
 Okay, one quick question, I'm sorry, what, Nick, what's the hydrants estimate for charges

1009
01:05:56,960 --> 01:06:00,240
 going to be?

1010
01:06:00,240 --> 01:06:05,200
 I haven't, Mr. Sheik, I don't have the hydrants in front of me right now and what that what

1011
01:06:05,200 --> 01:06:07,060
 the new rate will be.

1012
01:06:07,060 --> 01:06:10,120
 For today's presentation, we went through and looked at the 2% decrease for residential

1013
01:06:10,120 --> 01:06:11,120
 commercial.

1014
01:06:11,120 --> 01:06:15,040
 But that will come back with you at that red line ordinance and you can look at it in detail.

1015
01:06:15,040 --> 01:06:18,280
 And then it's 15 to 20 pages, so it'll have all the rates outlined for you.

1016
01:06:18,280 --> 01:06:19,280
 Great.

1017
01:06:19,280 --> 01:06:20,760
 Thank you.

1018
01:06:20,760 --> 01:06:37,920
 Okay, with that, I will turn it back over to Frank to go through wastewater.

1019
01:06:37,920 --> 01:06:38,920
 Thank you, Nick.

1020
01:06:38,920 --> 01:06:48,560
 Madam Chair, PUP member, Frank Pugsley, Water and Wastewater Utilities Director, back with

1021
01:06:48,560 --> 01:06:49,560
 you again.

1022
01:06:49,560 --> 01:06:50,560
 Skip ahead here.

1023
01:06:50,560 --> 01:06:51,560
 Where are we, Nick?

1024
01:06:51,560 --> 01:06:52,560
 There we go.

1025
01:06:52,560 --> 01:06:53,560
 Wastewater utilities.

1026
01:06:53,560 --> 01:06:54,680
 Excuse me.

1027
01:06:54,680 --> 01:06:59,440
 And I may repeat a few of the things I said earlier, just in case there are new people

1028
01:06:59,440 --> 01:07:01,160
 listening to the wastewater presentation.

1029
01:07:01,160 --> 01:07:02,160
 So please excuse me.

1030
01:07:02,160 --> 01:07:05,080
 I'll still try to keep some of those brief.

1031
01:07:05,080 --> 01:07:10,240
 Again, some accomplishments and future goals, taking a little retrospective on the wastewater

1032
01:07:10,240 --> 01:07:11,480
 department.

1033
01:07:11,480 --> 01:07:16,880
 This past fiscal year, we did complete the requirements of our EPA administrative order,

1034
01:07:16,880 --> 01:07:20,680
 which essentially required us to reduce sanitary sewer overflows.

1035
01:07:20,680 --> 01:07:26,880
 We've very successfully done that through our extensive cleaning and maintenance programs.

1036
01:07:26,880 --> 01:07:32,880
 And we are getting very close to completing the Hickory Creek lift station replacement.

1037
01:07:32,880 --> 01:07:37,760
 You discussed it earlier a little bit about the root cause analysis for those failures.

1038
01:07:37,760 --> 01:07:43,120
 We've had significant issues with that facility over the last two years or so.

1039
01:07:43,120 --> 01:07:48,120
 We have a permanent tip-ray solution in place right now, and the new lift station will be

1040
01:07:48,120 --> 01:07:50,540
 online later this year.

1041
01:07:50,540 --> 01:07:54,840
 And we should be in good shape there for quite a while.

1042
01:07:54,840 --> 01:08:00,620
 Some of our future goals are to complete the design of the phase one of the Pecan Creek

1043
01:08:00,620 --> 01:08:04,720
 Wastewater Treatment Plant expansion, and that's to handle general growth in the city,

1044
01:08:04,720 --> 01:08:09,600
 as well as some of the increases we expect from the Hunter and Cole Ranch.

1045
01:08:09,600 --> 01:08:16,360
 And to prepare an extensively updated wastewater collection system master plan that will help

1046
01:08:16,360 --> 01:08:20,600
 guide us in our capital improvement plans moving forward.

1047
01:08:20,600 --> 01:08:25,600
 Again, philosophical changes, we have worked diligently over the last 12 to 18 months to

1048
01:08:25,600 --> 01:08:30,120
 really focus on improving the culture in our department, break down the silos, and make

1049
01:08:30,120 --> 01:08:36,160
 sure all of our staff are comfortable functioning together, working with other departments from

1050
01:08:36,160 --> 01:08:41,440
 tech services, public works, capital projects, so that we can be our most efficient selves

1051
01:08:41,440 --> 01:08:45,960
 at the city of Denton, and innovative planning and cost savings.

1052
01:08:45,960 --> 01:08:52,400
 We are conducting a capacity expansion at Pecan Creek Water Treatment Plant, or Wastewater

1053
01:08:52,400 --> 01:08:57,820
 Recovery Plant, Wastewater Treatment Plant, by doing some improvements to existing processes,

1054
01:08:57,820 --> 01:09:03,440
 no actual physical expansions to volumes at the plant, we're doing this with a chemically

1055
01:09:03,440 --> 01:09:08,480
 enhanced primary treatment process, and we're going to step into it in phases.

1056
01:09:08,480 --> 01:09:12,520
 The first phase I mentioned is one of our goals for this year, is to expand the solids

1057
01:09:12,520 --> 01:09:20,360
 handling program, then we will expand the filtration capacity and then implement the

1058
01:09:20,360 --> 01:09:22,940
 stepped process itself.

1059
01:09:22,940 --> 01:09:28,120
 And again, our asset management program that the software package we use to assign a score

1060
01:09:28,120 --> 01:09:31,840
 to every pipe in the city so that we know we're replacing the right pipes at the right

1061
01:09:31,840 --> 01:09:36,920
 time and also using those scores to collaborate with the streets department and tie those

1062
01:09:36,920 --> 01:09:41,840
 together with their street condition index so we make sure we're building the right CIP

1063
01:09:41,840 --> 01:09:44,100
 projects for the city.

1064
01:09:44,100 --> 01:09:51,640
 The operational data for wastewater collection, we intend to complete CCTV inspection of 120,000

1065
01:09:51,640 --> 01:09:56,800
 linear feet of wastewater lines, gravity lines this year, as well as complete cleaning of

1066
01:09:56,800 --> 01:10:02,800
 675,000 feet, and those goals carry forward to the next year.

1067
01:10:02,800 --> 01:10:06,520
 Our major maintenance, the replacement of aging infrastructure, again, I'll touch on

1068
01:10:06,520 --> 01:10:11,320
 a little bit, but historically we haven't outsourced much replacement, and through the

1069
01:10:11,320 --> 01:10:16,300
 collaboration with the street program and our asset management system, we've reset our

1070
01:10:16,300 --> 01:10:20,880
 minimum replacement to 24,000 linear feet a year.

1071
01:10:20,880 --> 01:10:27,640
 This year, we will hit about 37, 38,000 linear feet and intend to make 40,000 linear feet

1072
01:10:27,640 --> 01:10:33,000
 of major maintenance replacements next year, and again, we'll use that outsourcing to ramp

1073
01:10:33,000 --> 01:10:38,880
 up and ramp down our replacement so that we can meet that 24,000 linear foot goal, because

1074
01:10:38,880 --> 01:10:43,560
 we can turn, again, outsourcing on and off, but we can't turn on and off our crews for

1075
01:10:43,560 --> 01:10:45,720
 emergency response in towns.

1076
01:10:45,720 --> 01:10:49,920
 We want to make sure we keep our guys who work for the city fully utilized and we can

1077
01:10:49,920 --> 01:10:56,600
 use outside contractors to fill in the gaps where we need.

1078
01:10:56,600 --> 01:11:02,480
 Our employee summary for the wastewater department, we began the year with 125 full-time employees

1079
01:11:02,480 --> 01:11:04,160
 on the books.

1080
01:11:04,160 --> 01:11:10,680
 We ended up with 31 vacancies through unfilled positions and the VSP departures.

1081
01:11:10,680 --> 01:11:16,800
 We were approved to refill 18 of those, leaving us with 112 FTEs today and carrying into next

1082
01:11:16,800 --> 01:11:22,480
 fiscal year, so that estimated salary savings brings us almost $2 million, $990,000 in salary

1083
01:11:22,480 --> 01:11:26,880
 savings, and you'll see the positions that were eliminated from the budget in the bulleted

1084
01:11:26,880 --> 01:11:31,240
 list, and again, we've done all this with really no reductions in level of service,

1085
01:11:31,240 --> 01:11:36,840
 and we've done that through efficiently reallocating some of the responsibilities as well as those

1086
01:11:36,840 --> 01:11:42,240
 partnerships and cooperation with other departments, so we make sure we are being as efficient

1087
01:11:42,240 --> 01:11:45,800
 as practical.

1088
01:11:45,800 --> 01:11:50,920
 In the org chart, you'll remember, of course, Ken Banks, our general manager of utilities,

1089
01:11:50,920 --> 01:11:56,840
 his six direct reports, and each one of our functional responsibilities, and again, just

1090
01:11:56,840 --> 01:12:02,160
 in case someone new is listening, the Clear Creek Natural Heritage Center, that educational

1091
01:12:02,160 --> 01:12:07,160
 programming and sustainable schools initiative program, is going to be transferred to the

1092
01:12:07,160 --> 01:12:14,000
 parks department, and Gary Packin will definitely discuss more of that with everyone in the

1093
01:12:14,000 --> 01:12:15,920
 future during their presentations.

1094
01:12:15,920 --> 01:12:23,960
 With that, I will open it up to operational questions.

1095
01:12:23,960 --> 01:12:24,960
 >> Any questions?

1096
01:12:24,960 --> 01:12:27,160
 >> Yeah, I forget.

1097
01:12:27,160 --> 01:12:34,840
 On slide number four, on infrastructure replacements, there's three columns, there's three columns

1098
01:12:34,840 --> 01:12:38,020
 on slide number four, all of which are labeled 2019.

1099
01:12:38,020 --> 01:12:44,320
 >> Hang on, let me go back there.

1100
01:12:44,320 --> 01:12:45,320
 >> Maybe incorrect.

1101
01:12:45,320 --> 01:12:46,320
 >> Oh, yeah.

1102
01:12:46,320 --> 01:12:47,320
 >> Oh, yeah, I'm sorry.

1103
01:12:47,320 --> 01:12:48,320
 Yes, that's a typo.

1104
01:12:48,320 --> 01:12:49,320
 It should be '17, '18, '19.

1105
01:12:49,320 --> 01:12:50,320
 >> Okay.

1106
01:12:50,320 --> 01:12:51,320
 >> Yes, sir.

1107
01:12:51,320 --> 01:12:52,320
 >> Any other questions?

1108
01:12:52,320 --> 01:12:57,320
 Let me switch so I can see your hands.

1109
01:12:57,320 --> 01:12:58,320
 All right.

1110
01:12:58,320 --> 01:12:59,320
 Greenwich.

1111
01:12:59,320 --> 01:13:02,020
 >> Thank you very much.

1112
01:13:02,020 --> 01:13:04,200
 I will hand it back over to Nick.

1113
01:13:04,200 --> 01:13:06,600
 >> Susan, this is Tony.

1114
01:13:06,600 --> 01:13:09,520
 I just wanted to just bring your attention to the time.

1115
01:13:09,520 --> 01:13:10,520
 >> Yes.

1116
01:13:10,520 --> 01:13:22,320
 >> Thank you, Frank.

1117
01:13:22,320 --> 01:13:27,520
 Actually really quick, Daniel Kramer is going to come up and go through drainage.

1118
01:13:27,520 --> 01:13:32,400
 Once Daniel gets through drainage, I'll go through the financials for both.

1119
01:13:32,400 --> 01:13:37,320
 So let me turn it over to Daniel really quick.

1120
01:13:37,320 --> 01:13:41,800
 >> Good morning, Daniel.

1121
01:13:41,800 --> 01:13:48,680
 >> Good morning, Madam Chair, PUB members, it's Daniel Kramer, Deputy Director of Operations

1122
01:13:48,680 --> 01:13:49,680
 for Public Works.

1123
01:13:49,680 --> 01:13:52,560
 I'll be here talking about our drainage department.

1124
01:13:52,560 --> 01:13:57,600
 A few of our accomplishments and future goals that we've had for the past year, we've had

1125
01:13:57,600 --> 01:14:00,240
 multiple projects we've been able to complete.

1126
01:14:00,240 --> 01:14:06,680
 We did hit our goal of 25% of drainage inlands inspected over the past year.

1127
01:14:06,680 --> 01:14:11,200
 Some of our future goals we'll be working towards is going for a full inspect and grade

1128
01:14:11,200 --> 01:14:14,400
 of our existing storm drain systems.

1129
01:14:14,400 --> 01:14:18,320
 Currently right now we do know the sizes and the capacity of our systems, but with some

1130
01:14:18,320 --> 01:14:22,280
 of the neighborhood failures and stuff that we've seen recently in some of the storm drains,

1131
01:14:22,280 --> 01:14:26,560
 we're looking at getting a CCTV out throughout them so we can actually get a good grade on

1132
01:14:26,560 --> 01:14:31,120
 them, similar to what we use for our streets and our OCI.

1133
01:14:31,120 --> 01:14:35,160
 Also working on public awareness for our departments and making sure that everybody understands

1134
01:14:35,160 --> 01:14:40,840
 exactly what the drainage department does, because right now I think a lot of it is just

1135
01:14:40,840 --> 01:14:44,120
 what happens when there's an emergency and not what we do, normal maintenance and keeping

1136
01:14:44,120 --> 01:14:45,560
 stuff up.

1137
01:14:45,560 --> 01:14:47,680
 We're also working with our capital projects.

1138
01:14:47,680 --> 01:14:51,680
 We're going to work with engineering to reevaluate the whole capital program for drainage and

1139
01:14:51,680 --> 01:14:56,640
 make sure that we are all on the same page when it comes to the overall drainage plan

1140
01:14:56,640 --> 01:14:59,520
 for the city.

1141
01:14:59,520 --> 01:15:06,080
 Some of the service level changes that we've had here pre and post COVID.

1142
01:15:06,080 --> 01:15:12,140
 Every year we're going to continue our 100% inspection of our concrete line channels.

1143
01:15:12,140 --> 01:15:15,800
 We make sure we go through those every single year to make sure everything's flowing correctly

1144
01:15:15,800 --> 01:15:17,880
 just in case we have any weather events.

1145
01:15:17,880 --> 01:15:22,720
 Our earthen channels, we had ramped up last year with the addition of a new inspection

1146
01:15:22,720 --> 01:15:24,080
 crew.

1147
01:15:24,080 --> 01:15:28,760
 That will actually drop as I'll go through with our FTEs on how we had some changes with

1148
01:15:28,760 --> 01:15:34,800
 COVID, how it affected us with our VSP and also some other people leaving throughout

1149
01:15:34,800 --> 01:15:36,440
 the department.

1150
01:15:36,440 --> 01:15:42,600
 And as I said before, we did hit our 25 inspection of inlets over the past year.

1151
01:15:42,600 --> 01:15:45,520
 Post COVID, like I said, we'll continue with our concrete channels.

1152
01:15:45,520 --> 01:15:49,720
 Our earthen channels will just be down to the major earthen channels that we inspect

1153
01:15:49,720 --> 01:15:54,160
 every year, and the rest of them will be on an as-needed basis.

1154
01:15:54,160 --> 01:15:59,640
 And our inlet inspection will drop a little bit to 10%.

1155
01:15:59,640 --> 01:16:05,840
 Some of the operational data as we've been going through this past year, we mow roughly

1156
01:16:05,840 --> 01:16:10,940
 155 acres, and we do try to hit four cycles per year.

1157
01:16:10,940 --> 01:16:14,000
 And currently we're on goal to hit that for this year.

1158
01:16:14,000 --> 01:16:21,960
 Lane miles swept, we do roughly about 10 cycles per year, about 770 lane miles.

1159
01:16:21,960 --> 01:16:27,920
 Now that comes up, as you can see on the goal, it actually is 7,800, but the 77 lane miles

1160
01:16:27,920 --> 01:16:31,720
 swept does not include our thoroughfares, which we do every Friday, which is around

1161
01:16:31,720 --> 01:16:36,280
 the square Elm and Locust, that we do hit those on Fridays.

1162
01:16:36,280 --> 01:16:41,760
 And our concrete channel inspection, we're still already had those full inspection for

1163
01:16:41,760 --> 01:16:46,440
 this year, and so we'll be good on that.

1164
01:16:46,440 --> 01:16:53,960
 As said with our FTEs, we did lose actually our drainage manager and supervisor, and also

1165
01:16:53,960 --> 01:16:58,660
 one of our heavy equipment operators to the VSP this past year.

1166
01:16:58,660 --> 01:17:03,200
 We did refill, instead of refilling both the manager and the supervisor, we refilled the

1167
01:17:03,200 --> 01:17:09,840
 supervisor position, and we're going to leave the manager position vacant for the time being.

1168
01:17:09,840 --> 01:17:17,620
 And we also did refill the heavy equipment operator.

1169
01:17:17,620 --> 01:17:23,200
 For the organizational chart, we did go through, as you can see, we pretty much lost the entire

1170
01:17:23,200 --> 01:17:25,840
 crew that we did add last year for inspection.

1171
01:17:25,840 --> 01:17:28,480
 That's why our inspection numbers have gone down.

1172
01:17:28,480 --> 01:17:32,760
 We are looking at different ways to move forward to be more efficient, and how we can use our

1173
01:17:32,760 --> 01:17:38,880
 personnel the best way and focus towards maintenance going forward.

1174
01:17:38,880 --> 01:17:39,880
 Any questions?

1175
01:17:39,880 --> 01:17:40,880
 I have one.

1176
01:17:40,880 --> 01:17:41,880
 Billy.

1177
01:17:41,880 --> 01:17:42,880
 Daniel, it's Billy Chief.

1178
01:17:42,880 --> 01:17:43,880
 Mr. Chief.

1179
01:17:43,880 --> 01:17:44,880
 Hey.

1180
01:17:44,880 --> 01:17:53,280
 One thing that you kind of touched on a little bit about your grading, and I tell you, I've

1181
01:17:53,280 --> 01:18:01,520
 noticed a tremendous difference the past few years in the way the city drains for the better.

1182
01:18:01,520 --> 01:18:10,680
 It seems like the downstream grading and clearing of brush and debris and the open ditches wasn't

1183
01:18:10,680 --> 01:18:11,680
 being done very well.

1184
01:18:11,680 --> 01:18:16,840
 Now it looks really good, so you guys are doing a great job keeping this water moving,

1185
01:18:16,840 --> 01:18:19,800
 because there's been a lot of it.

1186
01:18:19,800 --> 01:18:20,800
 Well thank you, sir, Mr. Chief.

1187
01:18:20,800 --> 01:18:26,680
 We have been working to make sure that we focus on our maintenance as much as possible,

1188
01:18:26,680 --> 01:18:31,320
 and also with the multiple large scale CIP projects they have been doing in drainage

1189
01:18:31,320 --> 01:18:33,080
 that's helped out a lot also.

1190
01:18:33,080 --> 01:18:34,600
 Good stuff.

1191
01:18:34,600 --> 01:18:36,600
 Other questions?

1192
01:18:36,600 --> 01:18:37,600
 Okay.

1193
01:18:37,600 --> 01:18:40,600
 Nick's back up.

1194
01:18:40,600 --> 01:18:42,600
 Thank you.

1195
01:18:42,600 --> 01:18:46,600
 I'm back.

1196
01:18:46,600 --> 01:18:52,800
 Thank you, Daniel.

1197
01:18:52,800 --> 01:18:56,720
 As a reminder, for any PB members, I think everybody's aware of this.

1198
01:18:56,720 --> 01:19:01,280
 Drainage is part of the wastewater fund, so we do present drainage separately, but it

1199
01:19:01,280 --> 01:19:03,400
 does roll up ultimately into the wastewater fund.

1200
01:19:03,400 --> 01:19:08,080
 I'll show that to you here shortly in the forecast also.

1201
01:19:08,080 --> 01:19:14,080
 So similar to the water utility, we are forecasting 2% growth in forecasted revenues for wastewater.

1202
01:19:14,080 --> 01:19:18,080
 We are continuing to utilize impact fee funding just like we do in water in the wastewater

1203
01:19:18,080 --> 01:19:19,760
 fund.

1204
01:19:19,760 --> 01:19:23,000
 We have 3% growth forecast in the out years for expenses.

1205
01:19:23,000 --> 01:19:26,840
 Here's that hunter coal ranch development is accounted for in the wastewater utility

1206
01:19:26,840 --> 01:19:29,680
 in the financial picture as it is for water.

1207
01:19:29,680 --> 01:19:34,760
 And then rates, we are currently forecasting no rate changes for the wastewater utility.

1208
01:19:34,760 --> 01:19:40,440
 So the 10-year forecast, so in an effort to increase transparency, we've historically

1209
01:19:40,440 --> 01:19:42,040
 showed the 5-year forecast.

1210
01:19:42,040 --> 01:19:45,520
 We started showing the 10-year forecast in utilities to kind of give you that long-range

1211
01:19:45,520 --> 01:19:48,240
 forecast what the utility looks like.

1212
01:19:48,240 --> 01:19:50,400
 Similar to water, I'll start in the 2020 column.

1213
01:19:50,400 --> 01:19:51,920
 You can see the adopted budget here.

1214
01:19:51,920 --> 01:19:55,680
 We had $1.6 million in reserve usage for the wastewater utility.

1215
01:19:55,680 --> 01:20:01,440
 End of your forecast, we are coming in just about budget, a little bit under about $1.9

1216
01:20:01,440 --> 01:20:02,440
 million.

1217
01:20:02,440 --> 01:20:06,280
 Similar to water, we're currently accounting for some COVID impact in the wastewater utility

1218
01:20:06,280 --> 01:20:07,280
 of $389,000.

1219
01:20:07,280 --> 01:20:13,240
 One of the intents of circling back in December is to help quantify this amount and true this

1220
01:20:13,240 --> 01:20:17,360
 amount up as we receive that data back from customer service.

1221
01:20:17,360 --> 01:20:21,760
 So finishing the year, you can see we've got about $13.3 million in reserves in the wastewater

1222
01:20:21,760 --> 01:20:22,760
 utility.

1223
01:20:22,760 --> 01:20:28,320
 Moving forward in the proposed budget column in 2021, you can see rate revenue right in

1224
01:20:28,320 --> 01:20:33,360
 here is $30.5 million, non-rate revenue of $2.3.

1225
01:20:33,360 --> 01:20:37,520
 Impact fee funding of $500,000 is a little bit less in the wastewater utility.

1226
01:20:37,520 --> 01:20:43,240
 We don't have any minimum amount of eligible impact fee projects scheduled to be done next

1227
01:20:43,240 --> 01:20:44,840
 year that can be revenue funded.

1228
01:20:44,840 --> 01:20:49,920
 We're using about $3.7 impact funding to offset eligible debt.

1229
01:20:49,920 --> 01:20:52,840
 No usage of reserves is forecasted in 2021.

1230
01:20:52,840 --> 01:20:57,240
 We actually do show a little bit of profit at $292,000.

1231
01:20:57,240 --> 01:20:59,520
 You can see the 0% here in the green.

1232
01:20:59,520 --> 01:21:02,120
 Ending fund balance at $13.4.

1233
01:21:02,120 --> 01:21:06,520
 Here's that reserve requirement or reserve target for the wastewater fund, so a minimum

1234
01:21:06,520 --> 01:21:11,680
 of $10.3 with the top in $14.4.

1235
01:21:11,680 --> 01:21:17,440
 Going out into the future years, the wastewater utility does get a little bit below the minimum

1236
01:21:17,440 --> 01:21:23,000
 reserve requirement starting in fiscal year 2029, so you can see in '29 and 2030, we're

1237
01:21:23,000 --> 01:21:27,680
 a little bit below the minimum target, but I do want to point out this 10-year forecast

1238
01:21:27,680 --> 01:21:30,760
 has no rate increases within a 10-year period.

1239
01:21:30,760 --> 01:21:34,240
 So that may be something we had to circle back with the public utility board in the

1240
01:21:34,240 --> 01:21:35,240
 future.

1241
01:21:35,240 --> 01:21:38,240
 We'll keep you updated.

1242
01:21:38,240 --> 01:21:45,680
 So the five-year capital plan for the wastewater fund, so in 2021, the proposed budget, $32.8

1243
01:21:45,680 --> 01:21:52,600
 million in planned projects, 5.3 in revenue funding, 500,000 impact fee funding.

1244
01:21:52,600 --> 01:21:57,840
 You can see some aid in construction of $82,000 and vehicle replacement of $1.2 million.

1245
01:21:57,840 --> 01:22:01,680
 So the grand total is $40 million, and as previously said, the wastewater utility will

1246
01:22:01,680 --> 01:22:04,000
 not automatically issue the $32.8 million.

1247
01:22:04,000 --> 01:22:08,160
 Staff will go through and look at the projects that are slated to be completed and what is

1248
01:22:08,160 --> 01:22:15,160
 the need of the wastewater utility as far as bond proceeds.

1249
01:22:15,160 --> 01:22:18,820
 Same slide we showed in water, so we picked out the major projects within wastewater.

1250
01:22:18,820 --> 01:22:23,000
 This does exclude some of the field service replacement projects that are revenue funded.

1251
01:22:23,000 --> 01:22:28,240
 At the very top, similar to water, you can see Elm and Locust in the budget of $92,000,

1252
01:22:28,240 --> 01:22:32,420
 for example, with the completion date of 131 in 2020.

1253
01:22:32,420 --> 01:22:38,120
 So all of these projects currently make up about $15.9 million in remaining funding that

1254
01:22:38,120 --> 01:22:40,120
 is out there for these projects.

1255
01:22:40,120 --> 01:22:42,800
 I do want to point out that Frank and his staff, just like in water, have done a great

1256
01:22:42,800 --> 01:22:46,540
 job in wastewater in the last two or three years of really utilizing the existing funding

1257
01:22:46,540 --> 01:22:50,760
 that is out there in these projects, looking at what needs to be completed, and from a

1258
01:22:50,760 --> 01:22:56,080
 financial standpoint, really done a good job of looking at minimizing any bond issuances

1259
01:22:56,080 --> 01:23:02,680
 that are not required for the projects that are currently slated to be completed.

1260
01:23:02,680 --> 01:23:07,400
 The drainage forecast, this is a component of the tenure that you just saw.

1261
01:23:07,400 --> 01:23:10,800
 We've just separated out here for transparency reasons.

1262
01:23:10,800 --> 01:23:18,000
 So for 2021, you can see planned revenue of $5.4 million, and this is made up of drainage

1263
01:23:18,000 --> 01:23:22,680
 fees in the community, residential drainage fees, and non-residential, so commercial.

1264
01:23:22,680 --> 01:23:27,720
 So one's $1.9 and one's $3.1 for a total of $5.4, with some miscellaneous revenue added

1265
01:23:27,720 --> 01:23:28,720
 in there.

1266
01:23:28,720 --> 01:23:32,920
 And the expense budget, to support Daniel's budget that he just came up here and presented

1267
01:23:32,920 --> 01:23:34,960
 to you is about $5.4 million.

1268
01:23:34,960 --> 01:23:40,320
 We do segregate $1 million in reserves for the drainage fund, and this is a component

1269
01:23:40,320 --> 01:23:42,200
 of wastewater.

1270
01:23:42,200 --> 01:23:49,080
 This is the utility rates file that I showed you before, so you can see the overall decrease

1271
01:23:49,080 --> 01:23:54,400
 for residential customers of $2.08, with that mid-year rate reduction for residential customers

1272
01:23:54,400 --> 01:24:01,140
 of $3, so from $24.51 to $21.51.

1273
01:24:01,140 --> 01:24:05,320
 Kind of the steps forward, so tomorrow, council will review this presentation with the rest

1274
01:24:05,320 --> 01:24:06,320
 of the utilities.

1275
01:24:06,320 --> 01:24:10,440
 They have already seen electric, but they have not seen water, wastewater, and solid

1276
01:24:10,440 --> 01:24:11,440
 waste.

1277
01:24:11,440 --> 01:24:15,000
 On the August 10th date, the state will more likely change based on the discussion of PV

1278
01:24:15,000 --> 01:24:16,000
 todays.

1279
01:24:16,000 --> 01:24:18,920
 We'll come back later in August to seek your approval.

1280
01:24:18,920 --> 01:24:23,560
 City council approval of the budget is September 15th, with that detailed budget and rate discussion

1281
01:24:23,560 --> 01:24:29,000
 and cost of service discussion in November-December timeframe.

1282
01:24:29,000 --> 01:24:31,280
 That concludes the wastewater and drainage presentations.

1283
01:24:31,280 --> 01:24:34,280
 I'll pull it down for questions.

1284
01:24:34,280 --> 01:24:37,800
 All right, Nick, no questions.

1285
01:24:37,800 --> 01:24:48,920
 I will ask Brian Burner to come up and present the operational information for solid waste.

1286
01:24:48,920 --> 01:25:01,360
 Well, good morning, Madam Chair, members of the committee.

1287
01:25:01,360 --> 01:25:02,360
 My name is Brian Burner.

1288
01:25:02,360 --> 01:25:05,720
 I'm the director of environmental, excuse me, I'm the director of solid waste for the

1289
01:25:05,720 --> 01:25:06,720
 city of Denton.

1290
01:25:06,720 --> 01:25:13,360
 Appreciate the opportunity to run through our 2021 operational budget and capital program.

1291
01:25:13,360 --> 01:25:18,880
 This last year has been a tremendous year for the department in and of itself.

1292
01:25:18,880 --> 01:25:20,680
 We've had several major accomplishments.

1293
01:25:20,680 --> 01:25:27,680
 We've implemented the downtown trash, valet trash recycling program to much acclaim.

1294
01:25:27,680 --> 01:25:32,040
 We have started our new yard waste program, and currently we have about 22% of our residential

1295
01:25:32,040 --> 01:25:34,720
 customers actually signed up for that.

1296
01:25:34,720 --> 01:25:39,340
 And as a result of the implementation of this program, we've actually seen a significant

1297
01:25:39,340 --> 01:25:43,400
 reduction in worker compensation claims due to yard waste collection.

1298
01:25:43,400 --> 01:25:48,280
 So knock on wood, we have not had any employees injured as a result of yard waste collections

1299
01:25:48,280 --> 01:25:49,280
 in this year.

1300
01:25:49,280 --> 01:25:54,280
 So outstanding program there.

1301
01:25:54,280 --> 01:26:01,480
 Based on the improvements of our collection fleet, uptime is significant.

1302
01:26:01,480 --> 01:26:07,040
 And as a result, downtime repairs, maintenance has fallen off significantly.

1303
01:26:07,040 --> 01:26:13,080
 So we thank you for helping us move forward in those improvements.

1304
01:26:13,080 --> 01:26:16,800
 As we look into next year, one of the things that we are currently working on, and hopefully

1305
01:26:16,800 --> 01:26:21,240
 you will see very shortly, is a contract to implement the comprehensive solid waste management

1306
01:26:21,240 --> 01:26:22,240
 strategy.

1307
01:26:22,240 --> 01:26:30,080
 What we want to try to do again is to identify programs and plans and possibly impediments

1308
01:26:30,080 --> 01:26:38,600
 to implementing a solid waste program that is beneficial to the entire community as well

1309
01:26:38,600 --> 01:26:42,100
 as cost effective and sustainable as we move forward.

1310
01:26:42,100 --> 01:26:44,720
 So that contract should be coming forward.

1311
01:26:44,720 --> 01:26:50,240
 We're working to replace our scale house software asset and routing software systems so we can

1312
01:26:50,240 --> 01:26:55,640
 improve accuracy and modify or modernize our operation.

1313
01:26:55,640 --> 01:27:00,640
 We continue to work in education outreach, trying to recycle right and to reduce contamination

1314
01:27:00,640 --> 01:27:03,880
 in our recycling collections.

1315
01:27:03,880 --> 01:27:07,360
 So as a result, we've got a tremendous amount of effort ahead of us.

1316
01:27:07,360 --> 01:27:12,120
 Again, at the end of the day, we are trying to provide exceptional value to our community

1317
01:27:12,120 --> 01:27:14,200
 with the programs that we provide.

1318
01:27:14,200 --> 01:27:18,920
 A couple of service level changes I would like to identify.

1319
01:27:18,920 --> 01:27:24,840
 During COVID, unlike a lot of or several cities in the state of Texas as well as across the

1320
01:27:24,840 --> 01:27:31,120
 nation, we were able to continue providing the same level of service with no downsizing.

1321
01:27:31,120 --> 01:27:36,080
 So again, I would like to commend all the drivers, our supervisors, our managers working

1322
01:27:36,080 --> 01:27:41,480
 diligently and safely throughout these past few months to be able to remain on the road,

1323
01:27:41,480 --> 01:27:45,720
 be able to service our citizens, and again, not impact the level of service that we have

1324
01:27:45,720 --> 01:27:49,720
 been providing.

1325
01:27:49,720 --> 01:27:55,480
 In this post-COVID and operational period, a couple things have changed though.

1326
01:27:55,480 --> 01:28:00,400
 While we continue to collect home chemical collections on a curbside basis, we have temporarily

1327
01:28:00,400 --> 01:28:07,220
 closed our in-person drop off as well as a reuse store to minimize public exposure.

1328
01:28:07,220 --> 01:28:09,060
 We are not accepting cash at our scale house.

1329
01:28:09,060 --> 01:28:11,280
 We are credit and debit card only.

1330
01:28:11,280 --> 01:28:13,320
 We're increasing training protocols.

1331
01:28:13,320 --> 01:28:16,760
 We're putting in place worker safety issues.

1332
01:28:16,760 --> 01:28:23,080
 As a result, we are providing and one additional outreach aspect, our scale house staff is

1333
01:28:23,080 --> 01:28:26,920
 providing assistance to beneficial reuse in the downer customer sales.

1334
01:28:26,920 --> 01:28:31,960
 We're able to, I don't want to say double dip, but again, maximize the use of the effort

1335
01:28:31,960 --> 01:28:35,360
 that we currently have in our solid waste scale house.

1336
01:28:35,360 --> 01:28:41,640
 From an operational standpoint, we continue to identify customer growth as we move forward.

1337
01:28:41,640 --> 01:28:48,460
 Dave Denton is sort of at the top of the DFW area.

1338
01:28:48,460 --> 01:28:51,840
 Growth is coming our way, and we can see that from a residential standpoint.

1339
01:28:51,840 --> 01:28:56,880
 In 2021, we estimate that by the end of that year, we're going to be servicing slightly

1340
01:28:56,880 --> 01:29:01,760
 over 35,500 residential customers.

1341
01:29:01,760 --> 01:29:06,760
 Our yard waste program remains level, so everything that we're picking up off the curb and delivering

1342
01:29:06,760 --> 01:29:10,720
 to the landfill across the scales, it's remaining consistent.

1343
01:29:10,720 --> 01:29:13,640
 So that's a good number.

1344
01:29:13,640 --> 01:29:18,880
 One of the big increases that we're going to see and one of our supplemental packages,

1345
01:29:18,880 --> 01:29:21,360
 our commercial containers haul, it continues to improve.

1346
01:29:21,360 --> 01:29:28,160
 So our business community continues to grow and remain vibrant throughout this operational

1347
01:29:28,160 --> 01:29:29,200
 season.

1348
01:29:29,200 --> 01:29:33,720
 With our valet trash recycling fully implemented, we have 131 customers in the downtown and

1349
01:29:33,720 --> 01:29:35,360
 forestry areas.

1350
01:29:35,360 --> 01:29:39,640
 And if you've been in these areas after the implementation of our valet service, you'll

1351
01:29:39,640 --> 01:29:47,360
 notice that in addition to providing additional parking resources in these areas, the appearance

1352
01:29:47,360 --> 01:29:48,600
 has improved.

1353
01:29:48,600 --> 01:29:52,720
 We've seen a significant increase in the quality of recyclables that we are collecting from

1354
01:29:52,720 --> 01:29:57,600
 this area, as well as created a communication conduit with the business owners and the community

1355
01:29:57,600 --> 01:29:58,980
 in this area.

1356
01:29:58,980 --> 01:30:02,040
 So it's beneficial on many tiers.

1357
01:30:02,040 --> 01:30:09,360
 Significantly, also, our wholesale volumes as a result of our contracts with our private

1358
01:30:09,360 --> 01:30:15,520
 providers has jumped in '19 and then in '20, but you'll notice that in '22, '23, those

1359
01:30:15,520 --> 01:30:19,760
 contracts end and there's anticipated to be a significant drop-off.

1360
01:30:19,760 --> 01:30:25,760
 In this next year, 2021, we anticipate a little over 200,000 tons coming into the landfill

1361
01:30:25,760 --> 01:30:28,600
 from third-party sources.

1362
01:30:28,600 --> 01:30:33,400
 Across the scales, we see a significant increase of retail volumes also.

1363
01:30:33,400 --> 01:30:40,840
 These are the residents as well as the business community that are paying gate rates to bring

1364
01:30:40,840 --> 01:30:43,080
 material into the landfill.

1365
01:30:43,080 --> 01:30:48,300
 With the closure of DFW landfill in Lewisville, as well as the significant growth that we're

1366
01:30:48,300 --> 01:30:53,280
 seeing in the North Texas area, this is not unexpected, but again, the growth is significant.

1367
01:30:53,280 --> 01:30:57,680
 One of the things I would like to point out here is this compaction density.

1368
01:30:57,680 --> 01:31:08,000
 Currently, we're almost, in FY19-20, we averaged about 1,156 pounds per cubic yard.

1369
01:31:08,000 --> 01:31:13,840
 With changes in equipment and operational standards, we're hoping to increase that to a little

1370
01:31:13,840 --> 01:31:17,760
 over 1,200 pound per cubic yard.

1371
01:31:17,760 --> 01:31:21,240
 What this means is we're putting a lot more trash in a lot smaller area.

1372
01:31:21,240 --> 01:31:27,640
 As a result, the increases that we've made from last year into this year actually compensate

1373
01:31:27,640 --> 01:31:31,560
 for the increased wholesale volumes that we've been getting in, so we're really net zero

1374
01:31:31,560 --> 01:31:36,640
 in the amount of space that we anticipated using in this past year, even though we took

1375
01:31:36,640 --> 01:31:40,200
 more tonnage into the facility.

1376
01:31:40,200 --> 01:31:48,360
 From a personal standpoint, we started the year with 126 FTEs.

1377
01:31:48,360 --> 01:31:58,640
 Over the year, we had 14 vacant due to the VSP program, as well as resignations and the

1378
01:31:58,640 --> 01:32:02,080
 positions that we had been keeping open through salary savings.

1379
01:32:02,080 --> 01:32:04,920
 We've been approved and refilled 11 of those.

1380
01:32:04,920 --> 01:32:10,120
 Currently, we're going to give back three positions, a solid waste analyst, the supervisor

1381
01:32:10,120 --> 01:32:14,400
 of our household hazardous waste, our home chemical collection facility, as well as the

1382
01:32:14,400 --> 01:32:17,680
 assistant collections manager in solid waste.

1383
01:32:17,680 --> 01:32:23,800
 In 2021, we'll be proposing 123 FTEs in solid waste.

1384
01:32:23,800 --> 01:32:27,040
 Organization, again, we're fairly flat.

1385
01:32:27,040 --> 01:32:30,600
 We have deputy director that manages the operations section.

1386
01:32:30,600 --> 01:32:35,160
 We have a site operations manager, which manages our maintenance, as well as runs our home

1387
01:32:35,160 --> 01:32:36,960
 chemical collection facility.

1388
01:32:36,960 --> 01:32:41,920
 From an administrative standpoint, we have a manager that handles resource management,

1389
01:32:41,920 --> 01:32:45,480
 as well as oversees our solid waste station.

1390
01:32:45,480 --> 01:32:49,120
 And then we have an analysis section that works with business development, as well as

1391
01:32:49,120 --> 01:32:54,480
 applications and software upgrades to the system.

1392
01:32:54,480 --> 01:33:04,680
 From a supplemental standpoint, we're looking at an addition of about $731,000 in this next

1393
01:33:04,680 --> 01:33:05,760
 year.

1394
01:33:05,760 --> 01:33:09,480
 With the growth, as I stated previously, of our commercial collection, we're in need of

1395
01:33:09,480 --> 01:33:11,440
 an additional roll-off truck.

1396
01:33:11,440 --> 01:33:17,120
 This service is open tops on construction sites, as well as compactors around businesses

1397
01:33:17,120 --> 01:33:18,760
 and educational facilities.

1398
01:33:18,760 --> 01:33:24,520
 So currently, we're short and relying on rental vehicles.

1399
01:33:24,520 --> 01:33:29,160
 So the addition of this roll-off truck will ease some pressure there.

1400
01:33:29,160 --> 01:33:33,200
 In addition, with the expansion of our yard waste program, as well as the growth in our

1401
01:33:33,200 --> 01:33:41,240
 residential community, we find ourselves in need of additions in our cart purchase funds.

1402
01:33:41,240 --> 01:33:48,600
 With that, I would like to go ahead and open up for any questions that you might have regarding

1403
01:33:48,600 --> 01:33:50,200
 the program or the presentation.

1404
01:33:50,200 --> 01:33:51,200
 Questions?

1405
01:33:51,200 --> 01:33:52,200
 Ed, go ahead.

1406
01:33:52,200 --> 01:33:53,200
 You're on mute.

1407
01:33:53,200 --> 01:33:54,200
 Thank you.

1408
01:33:54,200 --> 01:34:10,000
 This sort of falls in with your first future goal, which is the solid waste comprehensive

1409
01:34:10,000 --> 01:34:12,940
 management strategy.

1410
01:34:12,940 --> 01:34:22,580
 The latest 2018 greenhouse gas inventory that the city has published indicates that waste

1411
01:34:22,580 --> 01:34:30,680
 emissions account for 44% of emissions from municipal operations.

1412
01:34:30,680 --> 01:34:38,440
 And it's an increase, actually, of 31% over 2017.

1413
01:34:38,440 --> 01:34:44,780
 And one can only assume that with the growth that is forecast and expansion that is forecast

1414
01:34:44,780 --> 01:34:51,080
 for the landfill, that this number is going to increase.

1415
01:34:51,080 --> 01:35:03,640
 So I know that much of the methane emissions from the landfill is from food waste.

1416
01:35:03,640 --> 01:35:10,400
 And so I'm basically saying that I hope that this solid waste comprehensive management

1417
01:35:10,400 --> 01:35:22,320
 strategy will include a food waste diversion plan, as well as, perhaps, residential curbside

1418
01:35:22,320 --> 01:35:27,240
 composting.

1419
01:35:27,240 --> 01:35:30,620
 Food waste diversion, I think, is very, very important with this.

1420
01:35:30,620 --> 01:35:42,880
 And I would hope, as well, that the comprehensive management strategy is of a wide scope a large

1421
01:35:42,880 --> 01:35:43,880
 time frame.

1422
01:35:43,880 --> 01:35:50,800
 I know you're probably familiar with Austin's Resource Recovery Master Plan, which is an

1423
01:35:50,800 --> 01:36:02,800
 amazing document, centralizes and compacts everything, all necessary aspects of the city

1424
01:36:02,800 --> 01:36:05,720
 in working on waste reduction.

1425
01:36:05,720 --> 01:36:11,400
 And the scope of their plan is 30 years, and some of it is even further.

1426
01:36:11,400 --> 01:36:18,400
 So I hope that given the great development, both residential and commercial, that is coming

1427
01:36:18,400 --> 01:36:28,080
 to Denton, that the plan to be has a scope that reflects the development that is coming

1428
01:36:28,080 --> 01:36:29,560
 to our community.

1429
01:36:29,560 --> 01:36:30,560
 Thanks.

1430
01:36:30,560 --> 01:36:31,560
 Thank you.

1431
01:36:31,560 --> 01:36:32,560
 Okay.

1432
01:36:32,560 --> 01:36:33,560
 Any other questions?

1433
01:36:33,560 --> 01:36:36,000
 We really need to keep moving.

1434
01:36:36,000 --> 01:36:39,840
 All right, Nick, you're up.

1435
01:36:39,840 --> 01:36:48,680
 Thank you.

1436
01:36:48,680 --> 01:36:52,680
 Thank you, Brian.

1437
01:36:52,680 --> 01:37:02,400
 All right, so financial assumptions for the wastewater fund, similar to water and wastewater,

1438
01:37:02,400 --> 01:37:05,800
 we do have a 2% growth forecast in the out years.

1439
01:37:05,800 --> 01:37:11,560
 We are currently anticipating the wholesale agreements ending in fiscal year '22 and '23.

1440
01:37:11,560 --> 01:37:14,960
 I'll walk you through that in a financial performance here shortly.

1441
01:37:14,960 --> 01:37:19,320
 Expenses the same thing as the other utilities, a 2% growth forecast in the out years.

1442
01:37:19,320 --> 01:37:23,640
 We do have cell construction being moved from fiscal year '22 to '21, seeing some of that

1443
01:37:23,640 --> 01:37:25,640
 growth coming into the facility.

1444
01:37:25,640 --> 01:37:30,320
 And then rates, a 5% rate decrease for residential customers is currently what we're proposing,

1445
01:37:30,320 --> 01:37:31,320
 which is a dollar.

1446
01:37:31,320 --> 01:37:35,560
 And I showed that to you in the water presentation, I'll review it with you again shortly.

1447
01:37:35,560 --> 01:37:39,840
 We are looking to make minimum updates to contracted rates, for example, the wholesale

1448
01:37:39,840 --> 01:37:46,960
 agreements, and then minimum updates to valley rate, commercial rate, and gate disposal rate.

1449
01:37:46,960 --> 01:37:52,300
 It's the five-year forecast for the solid waste fund.

1450
01:37:52,300 --> 01:37:56,240
 We will be bringing back a 10-year forecast when we come back to the Public Utility Board

1451
01:37:56,240 --> 01:37:59,200
 with a detailed discussion later in August.

1452
01:37:59,200 --> 01:38:03,720
 But in this financial picture, what you can see, so in the adopted 2020 column, you have

1453
01:38:03,720 --> 01:38:06,680
 planned use of reserves of $3 million.

1454
01:38:06,680 --> 01:38:11,060
 We are forecasting to finish the year a little bit better, or quite a bit better, about $1.4

1455
01:38:11,060 --> 01:38:12,060
 million positive.

1456
01:38:12,060 --> 01:38:13,760
 So actually not using reserves.

1457
01:38:13,760 --> 01:38:17,480
 So that continued growth that Brian was talking about coming into the facility has really

1458
01:38:17,480 --> 01:38:19,620
 helped out the solid waste fund.

1459
01:38:19,620 --> 01:38:23,880
 We are currently showing $280,000 for a COVID revenue impact number.

1460
01:38:23,880 --> 01:38:27,320
 We will refine this number when we come back to you in December, once we get some hard

1461
01:38:27,320 --> 01:38:30,280
 data from customer service regarding that impact.

1462
01:38:30,280 --> 01:38:33,640
 The proposed budget is in this dotted line here.

1463
01:38:33,640 --> 01:38:38,160
 In the 2021 budget, we do have planned use of reserves of $4.3 million.

1464
01:38:38,160 --> 01:38:44,220
 Moving down the page, you can see expenses of $44.1 for an ending fund balance of $8.3.

1465
01:38:44,220 --> 01:38:50,000
 In this fund, there is a minimum and a maximum goal that we have for our fund balance, 51

1466
01:38:50,000 --> 01:38:55,200
 days being the minimum of 14% and 65 days or 18% being the maximum.

1467
01:38:55,200 --> 01:38:59,520
 So you can see we're well within that range and actually above the maximum.

1468
01:38:59,520 --> 01:39:06,120
 Moving out to the 5-year, you can see we do just below it in the 5th year in 2025 to $5.6

1469
01:39:06,120 --> 01:39:10,080
 million with the minimum being $5.673.

1470
01:39:10,080 --> 01:39:11,480
 There's a couple of reasons for this.

1471
01:39:11,480 --> 01:39:17,080
 The main reason is you can see from '22 to '23, those wholesale agreements do go away.

1472
01:39:17,080 --> 01:39:21,560
 So you see rate revenue drop from $33.5 to $34.5.

1473
01:39:21,560 --> 01:39:24,720
 This is that $5 million associated with those agreements.

1474
01:39:24,720 --> 01:39:28,400
 If those are approved by PV and council or renewed, this will change the forecast.

1475
01:39:28,400 --> 01:39:32,360
 But currently we've taken the conservative approach and taken those out of the 5-year

1476
01:39:32,360 --> 01:39:33,360
 picture.

1477
01:39:33,360 --> 01:39:40,800
 The 5-year CIP, one thing I will say for the solid waste fund, they have transitioned over

1478
01:39:40,800 --> 01:39:44,960
 the last few years from debt funding, a lot of assets to revenue funding.

1479
01:39:44,960 --> 01:39:49,480
 You can actually see we have a minimum amount of debt planned for this fund, $3 million.

1480
01:39:49,480 --> 01:39:53,760
 This is for a fleet annex building at the solid waste facility.

1481
01:39:53,760 --> 01:39:59,960
 We have about $6.25 million in revenue funding and then $3.4 million in vehicle replacement.

1482
01:39:59,960 --> 01:40:02,320
 Did I hear somebody, Susan or?

1483
01:40:02,320 --> 01:40:03,320
 >> I'm sorry?

1484
01:40:03,320 --> 01:40:04,320
 >> Okay.

1485
01:40:04,320 --> 01:40:06,600
 I thought I heard someone ask the question.

1486
01:40:06,600 --> 01:40:09,660
 I was just -- didn't know if someone asked something or not.

1487
01:40:09,660 --> 01:40:15,840
 For the 5-year total for the CIP plan, you can see we have $41.5 million planned to kind

1488
01:40:15,840 --> 01:40:18,960
 of separate it out and give you a perspective of how much of that is a bond and how much

1489
01:40:18,960 --> 01:40:19,960
 of that is cash.

1490
01:40:19,960 --> 01:40:25,520
 We have $14.3 million in bond funding over a 5-year period with $27.1 million in revenue

1491
01:40:25,520 --> 01:40:26,520
 funding.

1492
01:40:26,520 --> 01:40:30,080
 So this fund is definitely healthy.

1493
01:40:30,080 --> 01:40:34,320
 Proposed rate changes, we are looking to make a few more updates in the solid waste rate

1494
01:40:34,320 --> 01:40:39,160
 ordinance this fiscal year prior to that detailed discussion in December.

1495
01:40:39,160 --> 01:40:43,160
 Valet shared services, so this is the downtown service for valet commercial services that

1496
01:40:43,160 --> 01:40:45,000
 was started last year.

1497
01:40:45,000 --> 01:40:51,520
 Under 2, the rate is currently 138.28, we are looking to decrease that rate to 74.16.

1498
01:40:51,520 --> 01:40:54,760
 This does align with the cost of service model that we are currently using that was updated

1499
01:40:54,760 --> 01:40:56,520
 two years ago.

1500
01:40:56,520 --> 01:41:01,440
 Yard waste services, currently this service is not offered to commercial businesses, so

1501
01:41:01,440 --> 01:41:06,240
 we are looking to put a rate in the ordinance for that of $75 per hour.

1502
01:41:06,240 --> 01:41:09,560
 This is consistent with the residential rate for yard waste service.

1503
01:41:09,560 --> 01:41:13,060
 The standard cart rate is currently 21.51.

1504
01:41:13,060 --> 01:41:17,520
 We are showing that dollar decrease that I discussed with you a couple slides ago, so

1505
01:41:17,520 --> 01:41:21,520
 you can see 20.51 would be the proposed rate for 20.21.

1506
01:41:21,520 --> 01:41:28,800
 The large cart, 26.26 is the current rate and then 25.04 would be with that decrease.

1507
01:41:28,800 --> 01:41:32,200
 Additional large cart, people can call in to order an additional large cart.

1508
01:41:32,200 --> 01:41:35,360
 We are looking to reduce this based on the cost of service model.

1509
01:41:35,360 --> 01:41:39,320
 So it goes from 17.38 to 16.57.

1510
01:41:39,320 --> 01:41:46,280
 We are looking to increase the gate rate from 46 to 48, and then the sludge, dewatered sludge

1511
01:41:46,280 --> 01:41:49,800
 landfill disposal rate from 46 to 50.

1512
01:41:49,800 --> 01:41:53,420
 One other thing down here at the bottom, we do have a note, we are looking to adjust the

1513
01:41:53,420 --> 01:41:58,160
 wholesale contracted rates by 2.3%, which is a CPI adjuster.

1514
01:41:58,160 --> 01:42:02,560
 This is identified in those contracts, and this does account for about 400,000 additional

1515
01:42:02,560 --> 01:42:04,240
 revenue per year.

1516
01:42:04,240 --> 01:42:07,960
 This is the slide I've shown you several times before.

1517
01:42:07,960 --> 01:42:14,800
 You can see the proposed overall bill for an average residential customer would be 229.56,

1518
01:42:14,800 --> 01:42:20,000
 so actually decreasing their utility bill by $2.08.

1519
01:42:20,000 --> 01:42:23,640
 It's the dates, as we said before, this August 10th date will more likely change based on

1520
01:42:23,640 --> 01:42:27,520
 the discussion with the PUV today, push that back later in August.

1521
01:42:27,520 --> 01:42:31,200
 Then September 15th, the City Council will adopt the budget, the tax rate, and capital

1522
01:42:31,200 --> 01:42:32,200
 improvement plan.

1523
01:42:32,200 --> 01:42:35,800
 And then we'll circle back with the PUV and City Council in November and December with

1524
01:42:35,800 --> 01:42:39,000
 a detailed budget, rate, and cost of service discussion.

1525
01:42:39,000 --> 01:42:44,240
 And with that, that concludes the presentation, and I will pull this down for questions.

1526
01:42:44,240 --> 01:42:45,240
 Yes.

1527
01:42:45,240 --> 01:42:46,240
 Yes, sir.

1528
01:42:46,240 --> 01:42:47,240
 Yes.

1529
01:42:47,240 --> 01:42:48,240
 Slide 52.

1530
01:42:48,240 --> 01:42:51,680
 Nick, can you put slide 52 back up?

1531
01:42:51,680 --> 01:42:52,680
 Sure.

1532
01:42:52,680 --> 01:42:56,440
 Hang on just a second.

1533
01:42:56,440 --> 01:42:57,440
 52.

1534
01:42:57,440 --> 01:42:58,440
 Yes, sir.

1535
01:42:58,440 --> 01:42:59,440
 Yeah.

1536
01:42:59,440 --> 01:43:00,920
 Yeah, that one.

1537
01:43:00,920 --> 01:43:09,760
 The bottom two rows, fiscal year 21-22, revenue is about half of what it is prior year.

1538
01:43:09,760 --> 01:43:12,320
 What's the reason for that, again?

1539
01:43:12,320 --> 01:43:16,680
 Let me go back to the – hang on just a second to the fine-year forecast here.

1540
01:43:16,680 --> 01:43:19,400
 This may help us answer your question.

1541
01:43:19,400 --> 01:43:24,760
 We do have some revenue funding in here, capital investment for that cell development.

1542
01:43:24,760 --> 01:43:28,400
 So if you remember, I made that comment earlier about the cell construction moving from 22

1543
01:43:28,400 --> 01:43:29,400
 to 21.

1544
01:43:29,400 --> 01:43:30,400
 Yes.

1545
01:43:30,400 --> 01:43:33,720
 So the majority of this money, to answer your question, is for the next cell development

1546
01:43:33,720 --> 01:43:34,720
 cost.

1547
01:43:34,720 --> 01:43:37,640
 We are looking to pay cash for the development of that cell.

1548
01:43:37,640 --> 01:43:39,600
 So that's about $5 million.

1549
01:43:39,600 --> 01:43:42,080
 Does that answer your question?

1550
01:43:42,080 --> 01:43:46,280
 So the reason it's not $9 million is because you're going to use half of it roughly to

1551
01:43:46,280 --> 01:43:47,280
 pay for new construction.

1552
01:43:47,280 --> 01:43:48,280
 Is that true?

1553
01:43:48,280 --> 01:43:49,280
 That's correct.

1554
01:43:49,280 --> 01:43:50,280
 Yeah.

1555
01:43:50,280 --> 01:43:53,640
 In 2021, we're going to use the majority of that money to pay for cash funding of the

1556
01:43:53,640 --> 01:43:54,640
 next cell development.

1557
01:43:54,640 --> 01:43:58,480
 And then, of course, in the five-year picture, we don't have a next cell plugged in.

1558
01:43:58,480 --> 01:44:03,880
 So the decrease in the 6.2 that you see here to the 1.9 is because we're building that

1559
01:44:03,880 --> 01:44:06,400
 cell in 2021.

1560
01:44:06,400 --> 01:44:08,360
 Okay.

1561
01:44:08,360 --> 01:44:21,200
 I also know the total working reserve is – we have above the maximum amount suggested.

1562
01:44:21,200 --> 01:44:26,600
 And I wonder if, when you contemplate issuing bonds, you ever have the discussion where

1563
01:44:26,600 --> 01:44:32,760
 you look at the total reserve and these numbers and evaluate, do you really need to issue

1564
01:44:32,760 --> 01:44:36,560
 another bond for these things?

1565
01:44:36,560 --> 01:44:37,840
 That's a great question.

1566
01:44:37,840 --> 01:44:42,040
 So we did, prior to coming to the PUB, when we met with management staff in the city,

1567
01:44:42,040 --> 01:44:46,560
 we did have $1.2 million plugged in this five-year bond program.

1568
01:44:46,560 --> 01:44:50,320
 Looking at the five-year forecast and the health of this fund, we did make the determination

1569
01:44:50,320 --> 01:44:52,520
 to cash fund that asset.

1570
01:44:52,520 --> 01:44:58,360
 With this being a building of $3 million, this fund could afford to cash fund in 2021.

1571
01:44:58,360 --> 01:45:02,680
 Staff just felt the most appropriate way to pay for this asset was bond funding it, since

1572
01:45:02,680 --> 01:45:07,520
 it is a building, and it will have longer than a 20-year life.

1573
01:45:07,520 --> 01:45:12,080
 So yes, to answer your question, we do look at the overall fund balance when considering

1574
01:45:12,080 --> 01:45:14,480
 what the revenue fund and what the debt fund.

1575
01:45:14,480 --> 01:45:18,480
 And I will say, you know, a big focus from the Solid Waste Fund, as you can see, in 2019,

1576
01:45:18,480 --> 01:45:20,680
 we had a debt service number of 8.9 million.

1577
01:45:20,680 --> 01:45:25,120
 You know, this fund from the financial department and the Solid Waste Department has done a

1578
01:45:25,120 --> 01:45:29,560
 great job of mitigating that debt issuance and cash funding more and more assets.

1579
01:45:29,560 --> 01:45:34,120
 And you can see out here, the debt service payment is cut in half, the 3.4 to 4.2 million.

1580
01:45:34,120 --> 01:45:36,240
 Well, that's a good thing.

1581
01:45:36,240 --> 01:45:37,240
 It's a great thing.

1582
01:45:37,240 --> 01:45:41,240
 And this is something to be proud of for the entire city.

1583
01:45:41,240 --> 01:45:44,680
 You really have made a lot of progress from the beginning.

1584
01:45:44,680 --> 01:45:45,680
 Absolutely.

1585
01:45:45,680 --> 01:45:51,000
 Other questions?

1586
01:45:51,000 --> 01:45:56,040
 Well, we did it.

1587
01:45:56,040 --> 01:45:57,880
 We did it.

1588
01:45:57,880 --> 01:46:00,960
 Thank you again for coming in today for the special called meeting.

1589
01:46:00,960 --> 01:46:03,080
 We really appreciate it.

1590
01:46:03,080 --> 01:46:08,240
 So Susan and PB members, one of the items that I will add to the Business Action Matrix

1591
01:46:08,240 --> 01:46:12,080
 will be a feature work session on the budget process.

1592
01:46:12,080 --> 01:46:16,720
 What we'd like to do is then come back to you along with the finance department and

1593
01:46:16,720 --> 01:46:20,680
 kind of walk you through what the process had been and kind of where we've been and

1594
01:46:20,680 --> 01:46:25,040
 then kind of turn that into just a work session discussion with you to give us some direction

1595
01:46:25,040 --> 01:46:28,880
 on what would you like that process to be going forward.

1596
01:46:28,880 --> 01:46:29,880
 Okay.

1597
01:46:29,880 --> 01:46:30,880
 Great.

1598
01:46:30,880 --> 01:46:34,240
 With that, do we have a motion to adjourn?

1599
01:46:34,240 --> 01:46:36,240
 I move we adjourn.

1600
01:46:36,240 --> 01:46:37,240
 All right.

1601
01:46:37,240 --> 01:46:38,240
 We're adjourned.

1602
01:46:38,240 --> 01:46:39,240
 Thank you.

1603
01:46:39,240 --> 01:46:40,240
 Thank you.