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Conclude Other Funds Discussion

Roll call (4 Present, 3 Absent, 0 Excused) (Recorded at 00:00:19)

Mayor Waddle called the meeting to order at 8:41 a.m.

Discussion of Water and Sewer Fund

JB outlined the course of the discussion for the meeting - how the funds will be spent. The water and sewer items in the CIP will be discussed. Councilmember Ledbetter arrived at 8:43 p.m. CB reviewed utility billing. Tonya Warren, Utility Billing Manager, discussed bad debt. There has been an increase in the frequency of disconnects. They are now disconnecting once a week rather than twice a month. Accounts that are vacant are being closed out sooner. There has been an increase in renters who move and do not notify the department. She asked that Council increase the rates for deposit, which is currently $40. That amount does not cover the cost of a minimum bill and they are unable to capture that amount. She is requesting that the deposit rate for renters be greater than those who own their homes. JB the small amounts in the past would have been written off during the audit process, but now is the time for us to be more "hard nosed" about this process. Because Council will potentially receiving calls from customers, it is important to be awa CW line 3998? CB yes CW who in the BSW has differentiation between renters and owners TW Lancaster CW what is deposit across BSW TW Duncanville is $70 SR what percent of sales is bad debt TW 7/10 of 1% SR what is disconnect protocol TW opportunity to request an extension for 10 days to pay. the following Thurs or second Thurs will be disconnected. past due and reconnect fee of $35. incur additional costs by paying overtime paying for reconnection service until 10 p.m. SR if 15 days delinquent will be cut off TW if 10 days delinquent, you are subject to disconnect SR within 15 days, is there fair warning TW second bill shows past due amount and note that will be disconnected; two phone tree messages stating bill past due and will be disconnected SR calendar days or business days TW calendar days PL left the room at 8:58 a.m. and returned at 9:00 a.m. SR what is the average residential billing TW approximately $80, which will vary due to watering lawns SR what do you think real loss is in terms of revenue JB if increasing the deposit, then the exposure will be considered SR is deposit in addition to connect fee TW you will be charged $40 CW is there a large number of "abandonments" TW 10% CS spoke with Lancaster who has increased their deposit to $100 -- stated he felt there does need to be an increase.

CS stated the increased deposit will increase the desire for customers to discontinue service through the proper channels so they will receive their deposit. TW $20 of the reconnect goes as an additional deposit to the account CS JB discussion today is to show the increased bad debt and look for ways to be vigilant in keeping costs down for the customers. CW is there a process in place to determine if you are renting or owning TW the form contains owner's name and if the name is different from the account name, they request a lease agreement SR has difficulty in differentiating from renters and owners -- not opposed to increasing the deposit. asked that other utilities be investigated to see what their deposits are as well as the reconnect fees CS asked about theft of service TW we consider theft as people removing the meter and putting in a "jumper" which doesn't allow the meter readers to read the meter. they are then reported to the police PL are the delinquencies single income or dual income families TW candle meadow and fern heights have a lot of disconnects SR the trends are following the foreclosure trend

JB the water maintenance 3521 and 3522 - fees are going up again this year TJ more expensive to treat water. more and more restrictions are being placed on TRA. cost to red oak plant is increasing received rate from Dallas Water and they are increasing. TJ reduced one position - added third party assistance SR how is peak demand established TJ rate of flow is 14.5 million gallons per day - do have storage capacity --- when we get close to the 14.5, we go into drought contingency plan -- have to happen two or three days in a row JB when we hit 14.5 and have to call Dallas JB if use over 14.5 from Dallas, rate increases -- have 10 million storage available -- suggested to Dallas to incentivize cities to conserve TJ have a memorandum of agreement with Dallas done in 1979 and expires in 2009. over the last two years have had meetings with customer cities who have a board to deal with DWU. over the past year and DWU employee turnover, there has not been any work toward a new MOA. SR retailer of water and sewer services and Dallas is wholesaler - try to minimize costs TJ august and september are difficult -- department is able to keep tabs on CW what is the time the 14.5 million gallons is measured SR arrangement needs to be restructured -- need to change not according to today's reality that may CS asked for clarification of the significant budget changes in the water/wastewater maintenance fund regarding the disposal fee.

CB reviewed the non-departmental portion of the water and sewer fund. TJ reviewed the CIP regarding water and sewer. Internally, keep 10 years, but publish 5 years. R&R repair and replace. TJ I&I studies are part of sanitary sewer overflow initiative program. INcentive to keep rainwater out of sewer system Deshaundra Lockhart arrived at 9:41 a.m. NOTES - LLH LEFT THE ROOM

SR will be hard to continue on a pay as you system. BW recessed the meeting at 9:50 a.m. and reconvened at 10:00 a.m.

CB JB Rate Consultant -- Becky ?? -- rate study conducted last year to determine if the pay as you go basis will continue or to incur debt. (p. 276) She outlined potential increases over the next few years due to increased costs, replacement of equipment, etc. CW was there a side by side of comparison JB steeper increase for pay as you go but it levels off -- increase with incurred debt continues SR increase is driven by incurred debt - what part is assumed cost increases for operation and cost of goods Becky - forecast takes current budget and show inflation factors regular goods and services, medical premiums and insurance, chemicals, some volume and growth some straight expense. SR once enter into debt - there is a fixed cost -- operating cost can predict fairly well -- cost of goods sold - what are the range of possibilities - could we see a dramatic increase in the cost of water and sewer services that we might have to pass on to customers Becky -- if you look at past trends, it is up -- d TJ the further Dallas has to pump the water, the higher the rates JB SR what part comes from commercial vs. residential CB more than 80% is residential SR continue to provide the level of service as now and minimize the cost as much as we can Becky 64% of revenue comes from residential, which doesn't include multi-family It was the consensus of Council to incur debt. CB reviewed the upcoming budget calendar and the process for approving the budget JB thanked the Council for their questions and hard work on the budget. He also commended the managing directors for their hard work on the budget. BW commented that the budget meetings SR have never seen a better run budget process than what he's seen here - six public companies experience. Mayor Waddle adjourned the meeting at 10:42 a.m.

Aug 02, 2008 Special Meetings 2008-08-02 Budget Workshop

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Conclude Other Funds Discussion

Roll call (4 Present, 3 Absent, 0 Excused) (Recorded at 00:00:19)

Mayor Waddle called the meeting to order at 8:41 a.m.

Discussion of Water and Sewer Fund

JB outlined the course of the discussion for the meeting - how the funds will be spent. The water and sewer items in the CIP will be discussed. Councilmember Ledbetter arrived at 8:43 p.m. CB reviewed utility billing. Tonya Warren, Utility Billing Manager, discussed bad debt. There has been an increase in the frequency of disconnects. They are now disconnecting once a week rather than twice a month. Accounts that are vacant are being closed out sooner. There has been an increase in renters who move and do not notify the department. She asked that Council increase the rates for deposit, which is currently $40. That amount does not cover the cost of a minimum bill and they are unable to capture that amount. She is requesting that the deposit rate for renters be greater than those who own their homes. JB the small amounts in the past would have been written off during the audit process, but now is the time for us to be more "hard nosed" about this process. Because Council will potentially receiving calls from customers, it is important to be awa CW line 3998? CB yes CW who in the BSW has differentiation between renters and owners TW Lancaster CW what is deposit across BSW TW Duncanville is $70 SR what percent of sales is bad debt TW 7/10 of 1% SR what is disconnect protocol TW opportunity to request an extension for 10 days to pay. the following Thurs or second Thurs will be disconnected. past due and reconnect fee of $35. incur additional costs by paying overtime paying for reconnection service until 10 p.m. SR if 15 days delinquent will be cut off TW if 10 days delinquent, you are subject to disconnect SR within 15 days, is there fair warning TW second bill shows past due amount and note that will be disconnected; two phone tree messages stating bill past due and will be disconnected SR calendar days or business days TW calendar days PL left the room at 8:58 a.m. and returned at 9:00 a.m. SR what is the average residential billing TW approximately $80, which will vary due to watering lawns SR what do you think real loss is in terms of revenue JB if increasing the deposit, then the exposure will be considered SR is deposit in addition to connect fee TW you will be charged $40 CW is there a large number of "abandonments" TW 10% CS spoke with Lancaster who has increased their deposit to $100 -- stated he felt there does need to be an increase.

CS stated the increased deposit will increase the desire for customers to discontinue service through the proper channels so they will receive their deposit. TW $20 of the reconnect goes as an additional deposit to the account CS JB discussion today is to show the increased bad debt and look for ways to be vigilant in keeping costs down for the customers. CW is there a process in place to determine if you are renting or owning TW the form contains owner's name and if the name is different from the account name, they request a lease agreement SR has difficulty in differentiating from renters and owners -- not opposed to increasing the deposit. asked that other utilities be investigated to see what their deposits are as well as the reconnect fees CS asked about theft of service TW we consider theft as people removing the meter and putting in a "jumper" which doesn't allow the meter readers to read the meter. they are then reported to the police PL are the delinquencies single income or dual income families TW candle meadow and fern heights have a lot of disconnects SR the trends are following the foreclosure trend

JB the water maintenance 3521 and 3522 - fees are going up again this year TJ more expensive to treat water. more and more restrictions are being placed on TRA. cost to red oak plant is increasing received rate from Dallas Water and they are increasing. TJ reduced one position - added third party assistance SR how is peak demand established TJ rate of flow is 14.5 million gallons per day - do have storage capacity --- when we get close to the 14.5, we go into drought contingency plan -- have to happen two or three days in a row JB when we hit 14.5 and have to call Dallas JB if use over 14.5 from Dallas, rate increases -- have 10 million storage available -- suggested to Dallas to incentivize cities to conserve TJ have a memorandum of agreement with Dallas done in 1979 and expires in 2009. over the last two years have had meetings with customer cities who have a board to deal with DWU. over the past year and DWU employee turnover, there has not been any work toward a new MOA. SR retailer of water and sewer services and Dallas is wholesaler - try to minimize costs TJ august and september are difficult -- department is able to keep tabs on CW what is the time the 14.5 million gallons is measured SR arrangement needs to be restructured -- need to change not according to today's reality that may CS asked for clarification of the significant budget changes in the water/wastewater maintenance fund regarding the disposal fee.

CB reviewed the non-departmental portion of the water and sewer fund. TJ reviewed the CIP regarding water and sewer. Internally, keep 10 years, but publish 5 years. R&R repair and replace. TJ I&I studies are part of sanitary sewer overflow initiative program. INcentive to keep rainwater out of sewer system Deshaundra Lockhart arrived at 9:41 a.m. NOTES - LLH LEFT THE ROOM

SR will be hard to continue on a pay as you system. BW recessed the meeting at 9:50 a.m. and reconvened at 10:00 a.m.

CB JB Rate Consultant -- Becky ?? -- rate study conducted last year to determine if the pay as you go basis will continue or to incur debt. (p. 276) She outlined potential increases over the next few years due to increased costs, replacement of equipment, etc. CW was there a side by side of comparison JB steeper increase for pay as you go but it levels off -- increase with incurred debt continues SR increase is driven by incurred debt - what part is assumed cost increases for operation and cost of goods Becky - forecast takes current budget and show inflation factors regular goods and services, medical premiums and insurance, chemicals, some volume and growth some straight expense. SR once enter into debt - there is a fixed cost -- operating cost can predict fairly well -- cost of goods sold - what are the range of possibilities - could we see a dramatic increase in the cost of water and sewer services that we might have to pass on to customers Becky -- if you look at past trends, it is up -- d TJ the further Dallas has to pump the water, the higher the rates JB SR what part comes from commercial vs. residential CB more than 80% is residential SR continue to provide the level of service as now and minimize the cost as much as we can Becky 64% of revenue comes from residential, which doesn't include multi-family It was the consensus of Council to incur debt. CB reviewed the upcoming budget calendar and the process for approving the budget JB thanked the Council for their questions and hard work on the budget. He also commended the managing directors for their hard work on the budget. BW commented that the budget meetings SR have never seen a better run budget process than what he's seen here - six public companies experience. Mayor Waddle adjourned the meeting at 10:42 a.m.

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