Feb 13, 2023 Special City Council

SO WE'LL GO AHEAD AND GET STARTED WITH OUR ANGLETON CITY COUNCIL WORKSHOP SPECIAL AGENDA, DATED FEBRUARY 13TH, 2023 AT 6:35

[DECLARATION OF A QUORUM AND CALL TO ORDER]

[00:00:09]

I'LL GO AND CALL US TO ORDER AND WE'LL START OUR WORKSHOP.

[1. Discussion and possible action on the Texas Water Development Board with Freese and Nichols to determine priorities and funding amount for the March 3, 2023, submission deadline.]

CHRIS, I'LL TOSS IT TO YOU AND YOU COULD TOSS IT TO THEM.

SO WE'RE LOOKING FOR YOUR THOUGHTS AND OBVIOUSLY DIRECTION OUT OF THIS.

SO TO PUT IT IN CONTEXT, WE HAVE A MARCH 3RD DEADLINE.

SO IF YOU HAVE IF YOU ALL DIRECT US TO MAKE CHANGES WITH FREESE AND NICHOLS OR WHATEVER, WE HAVE A LITTLE WIGGLE ROOM.

THAT'S WHY WE'RE KIND OF DOING IT RIGHT NOW.

SO WE'RE NOT JAMMED UP AGAINST A LINE.

AND REALLY, THIS IS OUR THIS IS AN OPPORTUNITY TO TO FIX SORT OF THE PRIORITY THINGS AND OR PART OF THINGS FOR NOW.

SO WHAT WE PUT IN THIS PIF THIS APPLICATION IS THE PROJECTS YOU'LL SEE MINUS WHATEVER, IF YOU TAKE SOMETHING OUT.

THE CHALLENGE IS IF WE HAVE SECOND THOUGHTS, LIKE WE SUBMIT THIS THING FOR $15 MILLION INSTEAD OF $36 OR $38 MILLION, YOU CAN'T PUT IT BACK IN. YOU HAVE TO WAIT TILL NEXT YEAR TO DO THAT.

AND SO THAT'S THAT'S KIND OF THE DIRECTION WE NEED.

IT'S EASIER TO PUT IT ALL IN AND THEN WE'LL HAVE AN OPPORTUNITY ONCE WE GET RANKED AND ACCEPTED AND ALL THAT KIND OF STUFF AND FIND OUT WHAT THE TERMS ARE.

COME BACK AND SAY, YES, WE WANT TO DO THIS.

NO, WE DON'T. FOR EXAMPLE, THERE'S SOME SCHNEIDER ELECTRIC THINGS.

IF WE FIND OTHER WAYS TO FUND IT, WE CAN PULL SOME STUFF OUT AND SAY WE'RE NOT GOING TO TAKE THE MONEY, BUT IT'S BETTER TO GO IN HIGH FOR EVERYTHING THAT WE THINK WE NEED BASED ON THE RECOMMENDATIONS.

AND AND THIS IS REALLY IT'S A AHDR PRODUCT.

SO WE ASKED THEM A YEAR OR SO AGO TO PRIORITIZE THIS.

WE CAME UP WITH $400 MILLION WORTH OF STUFF THAT NEEDS TO GET DONE IN THE WATER AND WASTEWATER.

AND SO WE'RE REALLY PICKING ON THE CRUCIAL STUFF THAT NEEDS TO GET DONE AND THE END RESULT IS RATE INCREASE IN EITHER WATER AND OR WASTEWATER DEPENDING ON WHAT THE FLAVOR OF THE PROJECTS ARE, SO THAT THAT CAN BE DONE AT A LATER TIME.

AND AGAIN, IT ALL DEPENDS ON THE NUMBER OF CONNECTIONS AND AND THOSE KIND OF THINGS AND HOW YOU CALCULATE THE RATE.

SO FREESE NICHOLS HAS GOT THEY WANT TO TALK SORT OF TALK YOU THROUGH THIS AND KIND OF REFRESH THIS.

AND AT THE END OF DAY, WE'RE LOOKING FOR SOME ACTION TO MOVE THIS FORWARD AND SEE WHERE IT GOES.

OKAY. ALL RIGHT, MR. POPE, IT'S ALL YOURS.

YES, SIR. SO YOU SHOULD HAVE IN FRONT OF YOU SHOULD BE AN AGENDA, A SET OF HARD COPY SLIDES.

AND THEN JUST KIND OF A REFRESHER ON THE CIP.

I'VE KIND OF BOXED HIGHLIGHTED WHAT WE'RE KIND OF GOING TO DISCUSS TODAY, KIND OF WHAT CHRIS MENTIONED.

AGAIN, THIS IS WORKSHOP NUMBER ONE.

THIS IS MEANT TO BE A CONTINUED DIALOG, BUT THERE'S TWO OBJECTIVES REALLY OUT OF THIS WORKSHOP.

NUMBER ONE, OBVIOUSLY WE WANT TO SELECT PROJECTS BECAUSE WE HAVE OUR MARCH 3RD DEADLINE FOR THE PIFS FOR TWDB.

SO WE WANT TO GO AHEAD AND GET THOSE SHORT APPLICATIONS SUBMITTED AND THEN THAT WAY COME LATER WE WOULD POTENTIALLY GET INVITED TO SUBMIT THE FULL APPLICATION.

SO THAT'S, THAT'S KIND OF THE NEAR TERM TARGET THAT WE WANT TO HIT, MAKE SURE WE GET THOSE SUBMITTED FOR THE CITY.

AND THEN KIND OF THE SECOND OBJECTIVE OF THE WORKSHOP IS TO KIND OF GO THROUGH SOME OF THE PARAMETERS, WHICH WE'LL GET INTO MORE DETAIL OF KIND OF WHERE THE CITY, WHAT WE'RE LOOKING, WHAT DIRECTION WE'RE LOOKING TO TAKE AS FAR AS THE CITY IS GOING.

SO I WANT TO FLIP OVER TO SLIDE NUMBER FOUR PAGE TWO, WHICH IS THE BACKGROUND.

SO JUST KIND OF PAINTING THE PAINT THE PICTURE HERE.

SO WE KNOW THE CITY HAS A GROWTH.

WE'RE PROJECTED TO GROW BY 4,616 NEW HOUSEHOLDS OVER THE NEXT 10 TO 20 YEARS, WHICH COMES OUT TO ROUGHLY 11,500 RESIDENTS.

SO WE KNOW WE HAVE SOME EXPANSION, WHICH WOULD INCLUDE THE SUCCESS OF THE STASNY RANCH AND ASHLAND DEVELOPMENTS.

CURRENTLY, THE WATER AND SEWER PAYMENTS ARE TRANSFERRED FROM THE WATER FUND TO THE DEBT SERVICE FUND, AND WE'RE CURRENTLY ISSUING DEBT ON A 20 YEAR TERM.

AND THEN, OF COURSE, OUR PROBLEM SET THAT WE HAVE HERE TODAY IN FRONT OF US IS WE'RE TRYING TO ALSO ADDRESS KIND OF AN AGING WATER WASTEWATER INFRASTRUCTURE FOR OUR CURRENT CAPACITY. YOU'LL SEE ON A LOT OF OUR CIP PLAN, WE HAVE TONS OF LIFT STATION REHABS.

[00:05:06]

THERE'S TONS OF ITEMS THAT WE WANT TO GET ADDRESSED.

BUT THE FOCUS OF THIS WORKSHOP IS TO BE A LITTLE BIT MORE PRECISE.

OBVIOUSLY, THERE'S A LOT OF PROJECTS, BUT WE'RE TRYING TO TAKE ONE BITE AT A TIME.

SO IF YOU FLIP OVER TO THE NEXT SLIDE REAL QUICK, SO WE HAVE CHUCK IN THE ROOM, MARK, AND THEN DEBORAH JONES FROM SCHNEIDER ELECTRIC.

JUST GOT A COUPLE OF PEOPLE ON LINE, RIGHT? YES, SIR. THAT'S ON ME.

SO JUST I MISSED THE INTRODUCTION.

SO I'M DUSTIN POPE. IF YOU DON'T KNOW ME WITH FREESE AND NICHOLS.

CHUCK WOLFE AND MARK EVANS, ALSO FROM FREESE AND NICHOLS.

DEBORAH JONES FROM SCHNEIDER ELECTRIC.

AND THEN WE HAVE ON THE LINE, WE'VE GOT [INAUDIBLE] AND RICH HEINEY, BOTH ALSO FROM FREESE NICHOLS.

THAT WOULD BE PART OF OUR STAFF.

THEY HAVE SOME BACKGROUND IN WASTEWATER INFRASTRUCTURE, MASTER PLANNING EXPERTISE.

AND THEN WE ALSO HAVE JOHN PETERSON ON THE LINE FROM HDR.

SO JUST A QUICK SNAPSHOT OF THE PROGRAM OVERVIEW.

SO THE SLIDE ABOVE THAT WE CAN KIND OF GET A SNAPSHOT OF THE NEW DEVELOPMENT THAT WE'RE GOING TO SEE POTENTIALLY ACROSS THE CITY.

SO KIND OF A CONCERTED EFFORT AMONGST OUR TEAM HERE.

SO HDR FINALIZED A CAPITAL IMPROVEMENT PLAN.

SNYDER IS REVIEWING THE OPERATIONAL ENERGY SAVINGS ACROSS THE CITY.

AND THEN FOR PHASE ONE, WE'RE REALLY LOOKING AT WHERE WE CAN ASSIST WITH THE GRANT AND FUNDING.

AND SO RIGHT NOW WE'RE KIND OF IN THAT WHAT WE CALL PRE APPLICATION PHASE.

SO OBVIOUSLY GETTING TO THE PIFS AND GETTING THINGS SUBMITTED AND DOING THE APPLICATIONS.

AND THEN OBVIOUSLY ONCE WE GET FEEDBACK FROM TWDB, THERE'LL BE SOME POST APPLICATION TO FINAL OUT PHASE ONE.

SO OUR GOAL IS TO GET THROUGH THE THROUGH THE GRANT AND FUNDING ASSISTING PHASE TODAY.

CAN JUST KIND OF SEE THE DRILL DOWN FOR FREESE AND NICHOLS.

SO MARK EVANS, WHO'S HERE TONIGHT, HE'S HE'S OUR GRANT KIND OF SUBJECT MATTER EXPERT.

WE ALSO HAVE RICHARD CAMPBELL AS WE START GETTING INTO RATE IMPACTS AND THINGS OF THAT NATURE.

HE'S HE'S ONE OF OUR FINANCIAL PLANNERS.

AND THEN, OF COURSE, WE HAVE SOME VARIED EXPERTISE FOR WATER, WASTEWATER, UTILITIES, TREATMENT AND CONSTRUCTION WITH SOME SUPPORT.

AND THE NEXT SLIDE.

SO NOW THIS IS WHERE I'M GOING TO I'M GOING TO BRING MARK UP HERE IN A SECOND.

BUT I WANTED TO JUST SHOW SO KIND OF AS WE'VE HAD OUR KICKOFF, WE WERE LOOKING THROUGH THE MAJOR PROJECTS ON THE PRIORITY LIST.

OBVIOUSLY, OYSTER CREEK TREATMENT PLANT REHAB WAS AT THE VERY TOP OF THAT LIST.

YOU KNOW, THE FULL PACKAGE WOULD BE SOMEWHERE BALLPARK, AROUND $20.6 MILLION, WHICH I KNOW WE'RE USING ABOUT $1.8 MGD RIGHT NOW.

BUT WE DEFINITELY WANT TO GET THESE REHABS COMPLETED AS WE KNOW THAT THE CITY IS GOING TO BE GROWING.

WE IDENTIFIED OUT OF THE SANITARY SEWER, REHAB AND WATERLINE REPLACEMENT PROGRAMS. WE'RE LOOKING AT BALLPARK ABOUT $5 MILLION.

AND AGAIN, IF YOU LOOK AT HENDERSON TRANSMISSION LINE, WHICH IS THE THIRD BULLET NUMBER FOUR, THAT'S ABOUT $3.7, IF YOU INCLUDE THE CHENANGO BOOSTER PUMP BUILDING AND DISINFECTION ROOM.

AND THAT'S ABOUT 10,000 LINEAR FEET OF FORCE MAIN, 12 INCH FORCE MAIN.

SO THAT JUST KIND OF GIVES YOU AN IDEA OF OF WHAT YOU CAN WHAT YOU CAN BITE OFF.

AND THEN AS WE WERE LOOKING THROUGH THE LIFT STATION PACKAGES, WE THOUGHT IT MIGHT BE A GOOD IDEA FOR ECONOMIES OF SCALE IF WE COULD COMBINE LIFT STATIONS, REHABS AS A PACKAGE. THAT WAY YOU GET SOME BIGGER CONTRACTORS, YOU'RE GETTING POTENTIALLY A BETTER PHASING PLAN BECAUSE IT ALSO MATTERS WHERE THESE LIFT STATIONS SIT, WHAT SYSTEM THEY'RE ON. SO THESE ARE JUST WHAT WE CAME UP WITH, WHICH IS ALSO WHY I INCLUDED THE OVERARCHING CIP.

THESE ARE JUST THE PROJECTS THAT WE'VE COME UP WITH INTERNALLY THAT WE THINK THE CITY SHOULD SUBMIT ON FOR FOR THE PIFS.

JUST THE INITIAL APPLICATION.

AND THIS IS TODAY'S DOLLARS, RIGHT? YES, SIR. THIS IS IN TODAY'S DOLLARS.

WHICH WILL NOT BE IN TOMORROW'S DOLLARS.

AND THIS IS THIS IS CONSTRUCTION VALUE.

RIGHT. RIGHT.

AND THERE'S SOME FLEXIBILITY IN THERE.

IF YOU WANT TO DO LESS WATER LINE OR LESS SEWER LINE.

WE CAN TRIM SOME NUMBERS BACK, BUT.

YOU KNOW, WE'VE GOT THE NEED.

WE HAVE. WE HAVE ISSUES.

YEAH. AND CHRIS IS RIGHT.

I MEAN, THERE'S DIFFERENT VARIATIONS THAT WE COULD TAKE ON ON HOW WE SUBMIT OUR PIFS.

SO EVEN FOR OYSTER CREEK TREATMENT PLANT, YOU KNOW, AT A BARE MINIMUM, YOU COULD DO PHASE PHASE ONE ALPHA, WHICH IS THE FIRST PROJECT THAN THE ACTUAL FULL BODY CIP.

SO THAT WOULD BE YOUR INFLUENT LIFT STATION, YOUR MCC OPERATOR BUILDING, THINGS OF THAT NATURE.

[00:10:04]

AND UNDER ONE IS THE SCHNEIDER ELECTRIC BOB PROJECTS.

DO YOU WANT TO? ARE YOU WANTING US TO ASK QUESTIONS NOW? I WAS TRYING TO BE QUIET AND WAIT UNTIL YOU'RE FINISHED WITH THE PRESENTATION.

IT'S A WORKSHOP. YOU CAN I JUST WANTED YOU TO GET EVERYTHING OUT THAT YOU WERE TRYING TO GET OUT BEFORE I STARTED.

OH, YEAH? YEAH. WE DEFINITELY WANT TO HEAR FROM THE COUNCIL FOR SURE.

OKAY. FIRST QUESTION IS THE HENDERSON TRANSMISSION LINE NUMBER FOUR, $3.7 MILLION ON THE TEXAS WATER DEVELOPMENT BOARD SLIDE IT SHOWS $3.7 THEN YOU GO TO THE PACKAGE EXAMPLE AND IT SHOWS $2.1.

WHAT IS THE DIFFERENCE BETWEEN THOSE TWO? SO THAT TAKES OUT THE CHENANGO BOOSTER PUMP BUILDING AND DISINFECTION.

THAT'S WHAT I WAS ASSUMING. SO THE DIFFERENCE OF THAT IS THE CHENANGO.

YES. THEN IN THE STATION REHAB, HOW MUCH OF THAT DID WE HAVE EARMARKED FOR FUNDING FROM THE RESCUE PLAN? SO WE WE DID HALF A MILLION DOLLARS AND [INAUDIBLE].

OKAY. SO ANYTHING THAT WE WERE IF WE WERE TO PACKAGE THESE AND PUT THOSE ON THERE AND WE WERE TO GET THIS GRANT.

THEN THAT MONEY BECOMES AVAILABLE FOR SOMETHING ELSE.

WELL, I THINK WE'RE GOING TO SPEND THE ARPA MONEY FIRST AND WE HAVE TO SPEND IT BY 2025 OR SOMETHING.

SO UNDER THIS, WE WOULDN'T PROBABLY SEE THE MONEY FOR A YEAR AND A HALF AND THEN DESIGN AND ALL THAT STUFF, RIGHT? SO THEN SOME OF THIS WOULD WE'VE ALREADY EARMARKED FOR SOME OF THESE LIFT STATIONS WOULD JUST MIGHT AS WELL JUST GO THROUGH WITH THOSE.

RIGHT. WELL SO YEAH, WE'VE ALREADY HIT THE HIGH PRIORITY LIFT STATIONS THAT WE'VE NEEDED TO AND THIS IS THE NEXT TIER.

OKAY. WE'RE.

[INAUDIBLE] EXCUSE ME. LET'S CLEAR UP MY CONFUSION.

BUT I THOUGHT WE WERE ALREADY REHABILITATING LIFT STATION NUMBER SEVEN OR A COUPLE OF THESE.

SO THEY SHOULD COME OFF THIS LIST.

YES, SIR. YEAH, THIS WAS JUST.

THIS WAS MEANT TO BE YES, SIR. SO WHICH ONES DO WE GET TO TAKE OFF THE LIST.

SO I CAN WORK WITH JEFF AND CHRIS TO MAKE SURE.

BECAUSE THE INTENT WAS THAT WE PACKAGED UP A SERIES OF STATION REHABS THAT GOT US TO SOMEWHERE IN THAT $2 TO$ 3 MILLION BALLPARK TO MAKE US SO THAT WHEN WE PUT IT OUT FOR BID, WE GET KIND OF A BIGGER CONTRACT.

WE JUST CHANGED SOME NUMBERS JUST FOR THAT.

YES, SIR.

GOOD. CAN YOU BE REIMBURSED? SO IF YOU WERE TO GO AHEAD AND START THIS ON THESE TWO LIFT STATIONS AND THEN ALL OF A SUDDEN WE GET THE GRANT, WE'RE IN THE MIDDLE OF CONSTRUCTION ON THESE TWO OR REHABBING THEM OR FIXING THEM.

CAN WE APPLY THAT MONEY TO IT AND PAY OURSELVES BACK ON THE ARPA SIDE AND USE THAT FOR SOMETHING ELSE? LIKE IT'S FEDERAL ON TOP OF FEDERAL BECAUSE THE TWO SRF PROGRAMS THAT I'LL SPEAK TO IN A LITTLE BIT, YOU'RE NOT GOING TO BE ABLE TO USE THOSE TOGETHER.

SO YOU REALLY NEED TO DECIDE TIMING WISE.

YOU HAVE THE ARPA MONEY NOW THE SRF MONIES, WHICH I'LL SPEAK TO IN A SECOND IS STILL AN UNKNOWN.

AND SO YOU LOOK AT YOUR NEED AND YOU MIGHT WANT TO GO AHEAD AND APPLY YOUR ARPA NEEDS NOW, MAINLY BASED ON THE FACT THAT REGARDLESS OF WHAT YOU USE YOUR ARPA MONEY FUNDING, YOU'VE GOT THOSE HARD DEADLINES TO MEET.

SO I DON'T THINK YOU'RE GOING TO HAVE AN OPPORTUNITY TO BE ABLE TO REIMBURSE ON THAT.

NOW AGAIN, I'LL SPEAK TO THIS MORE IN PROCESS, BUT IF YOU WORK AHEAD OF THE WATER DEVELOPMENT BOARD FUNDING, THEN THERE IS AN OPPORTUNITY TO REIMBURSE ONCE THE BOARD'S FUNDING CATCHES UP WITH YOU.

FOR INSTANCE, WHAT IF YOU'RE WORKING ON DESIGN ALREADY? BUT THE BOARD'S JUST FUNDING PLANNING AT THE TIME, SO ONCE THEY APPROVE YOUR PLANNING, THEN THE MONEY CAN BE RELEASED FOR YOUR DESIGN.

YOU CAN PLAY THAT CATCH UP.

EVERYTHING CAN BE KIND OF DONE IN ARREARS OR REIMBURSED UNTIL YOU GET TO CONSTRUCTION.

AND THAT'S A HARD ONE RIGHT THERE, BECAUSE UNTIL YOU GET YOUR ENVIRONMENTAL CLEARANCE, YOU REALLY DON'T WANT TO STICK A SHOVEL IN THE GROUND BECAUSE THAT COMPLICATES THINGS HEAVILY. SO I'LL STOP THERE WITH THE PROCESS.

NO, GREAT. THAT'S EXACTLY WHAT I WAS ASKING.

THANK YOU. NEXT QUESTION IS AROUND THE

[00:15:04]

YEAH. SO I DON'T HAVE IT.

WE ACTUALLY HAVE TO BREAK OUT.

I DON'T HAVE IT RIGHT HERE IN FRONT OF ME. BUT YES, WE DO HAVE, LIKE PHASE ONE ALPHA THROUGH PHASE ONE E [INAUDIBLE].

SO WE DO HAVE A PRIORITIZATION WITHIN THE PRIORITY.

PRIORITY NUMBER ONE. YES, SIR.

OKAY. THAT'D BE INTERESTING TO SEE JUST HOW MUCH WHAT THE REQUIREMENTS WOULD BE.

RIGHT. WELL, I THINK, IF I REMEMBER CORRECTLY, PHASE ONE A, WHICH AGAIN IS THE INFLUENT LIFT STATION, THE MMC OPERATED BUILDING WAS AROUND $9.6 MILLION.

I MIGHT BE MISSING. BUT WHAT DOES W-L REPLACEMENT? WATERLINE. WATERLINE REPLACEMENT.

WE'RE KIND OF DOING THAT ALREADY, RIGHT? WE'RE REPLACING WATER LINES ALL THE TIME IN OUR CURRENT OPERATIONAL BUDGET.

MM HMM. OH, WELL, THAT'S USUALLY WHENEVER A CONTRACTOR HITS THEM.

SOUTHAMPTON. SO I WANT TO I WANT TO CLARIFY A COMMENT.

JOHN, JUST IT'S IT IT'S LOANS, LOW INTEREST LOANS, BUT THERE COULD BE GRANTS DEPENDING ON LIKE SOME OF THE STUFF IS GREEN ORIENTED.

SO THERE MAY BE SOME GREEN ORIENTED GRANTS, BUT IT'S IT'S LARGELY LOANS.

YES. SO.

IT'S NICE TO SAY GRANTS.

SURE. MY EXPERIENCE AND PROBABLY MARKS IS, YOU KNOW, WE'RE NOT A DISADVANTAGED COMMUNITY, I MEAN, THANKFULLY.

BUT THAT WORKS AGAINST US IN IN THIS FUNDING PIECE.

THANKS FOR CLARIFYING.

THAT'S TRUE. I WON'T USE THE WORD GRANT ANYMORE.

NOT SAYING YOU CAN'T USE IT. I'M JUST SAYING TO PUT IT IN CONTEXT.

WELL, WE NEVER GET THEM ANYWAY, SO I JUST WON'T USE IT.

BUT I GUESS THE QUESTION ON THE WATER LINE REPLACEMENT, WHAT WOULD BE THE NECESSITY FOR REPLACING ALL OF THE WATER LINE OR $5 MILLION WORTH OF WATER LINES AT ONE TIME? WOULDN'T THAT BE IN HOW MANY YEARS DO YOU THINK THAT WOULD TAKE? JUST GOING RIPPING UP THE CITY AND REPLACING THESE THINGS.

SO TO PUT IT, I GUESS TO PUT IT INTO CONTEXT.

SO BACK TO THE HENDERSON, THAT'S ABOUT 10,000 LINEAR FEET OF WATER LINE, WHICH AGAIN, YOU'RE PROBABLY $1.5, PROBABLY CLOSER TO $2 PLUS MILLION.

SO WITH $5 MILLION, YOU'RE PROBABLY GETTING 1 TO 3 PACKAGES OF WATER LINE PROJECTS, IN MY OPINION.

BUT THAT'S DRIVEWAY AND THAT'S PAVEMENT.

THAT'S ALL I'M SAYING I COULD SEE THE TIME LINE OF THAT JUST DRAGGING OUT FOR.

YEAH, WELL, AND AGAIN, IT'S NOT JUST ALL WATER LINE.

IT'S THE RIGHT SURFACE BELOW.

YEAH. WOULD HENDERSON TRANSMISSION LINE GET US STARTED ON OUR HENDERSON ROAD PROJECT.

YEAH JOHN THAT'S THAT'S A DIFFERENT, DIFFERENT AREA ALTOGETHER THAT, THAT ONE'S TAKEN A WATER LINE FROM THE HENDERSON WATER PLANT BASICALLY DOWN A DRAINAGE DITCH EASEMENT THAT WE'VE TALKED TO, THE DRAINAGE DITCH ALL THE WAY DOWN TO THE CHENANGO TO GET AN INDEPENDENT FILL LINE THAT'LL BE PVC AND THEN IT'LL ALLOW YOU TO UTILIZE THE EXISTING OLDER LINE AS A FILL ON FROM YOUR WELLS WHENEVER YOU NEED TO RUN YOUR WELLS.

I KNOW WHAT YOU'RE TALKING ABOUT.

YEAH. THANK YOU.

THAT'S RIGHT. BUT KIND OF YOUR QUESTION, JOHN, OR LET ME ASK JOHN PETERSON.

SO DOING THAT IS, IS THAT UNDER THE WATER DEVELOPMENT BOARD? WHAT'S THE THE THE LINE FROM THE FILL LINE FROM ONE ONE PLANT TO THE OTHER WOULD BE A WATER DEVELOPMENT BOARD.

THE WATER LINES ALONG HENDERSON ARE THE ONES THAT WERE IDENTIFIED.

MOST OF THEM ARE ALREADY DONE.

THE SANITARY SEWER NEEDS TO BE DONE.

THAT WILL BE PART OF OUR TIP APPLICATION HTAC.

BUT COULD IT NOT BE

[00:20:02]

BOTH LOANS, LOW INTEREST LOANS AND THOSE KIND OF THINGS HELP FIX THAT.

YEAH. SO IF IT'S OKAY WITH YOU, LET ME LET ME TRY TO EXPLAIN WHAT WE'RE DOING RIGHT NOW TO MEET THAT MARCH 3RD DEADLINE.

SO THE BOARD HAS MULTIPLE PROGRAMS, AND I'LL GET TO THE LEAD SERVICE LINE REPLACEMENT HERE IN A MINUTE, BECAUSE THIS IS A NEW PROGRAM THAT JUST CAME UP WITH THE IJA.

BUT THEIR NORMAL PROGRAMS, THEY HAVE A WATER AND WASTE PROGRAM THEY CALL THE STATE REVOLVING FUNDS CLEAN WATER STATE REVOLVING FUND FOR WASTEWATER, DRINKING WATER FOR POTABLE WATER. AND THOSE ARE FROM EBA THROUGH MONEY PROVIDED BY CONGRESS AND ANNUAL APPROPRIATIONS.

IT'S NOW EXPLODED IN THE AMOUNT OF MONEY THAT IT HAS AVAILABLE BECAUSE OF THE IJA, WHICH MADE US ALL EXCITED EXCEPT CONGRESS ATTACHED THIS PESKY LITTLE THING CALLED 49% MUST GO TO DISADVANTAGED COMMUNITIES.

SO AND IT'S NOT A SLIDING SCALE.

IT'S NOT AT LEAST THIS MUCH UP TO THIS MUCH IT IS 49%.

SO THE BOARD HAS NO CHOICE BUT TO FOCUS ON DISADVANTAGED COMMUNITIES AND THEN FOCUS ON PROJECTS THAT ARE GOING TO SCORE REALLY WELL.

NOW, THE SCORING CRITERIA IS GOING TO FAVOR PLANTS THAT ARE UNDER ENFORCEMENT.

YOU KNOW, DISCHARGING ILLEGAL OVERFLOWS TO A 303D LIST STREAM, WHICH IS A WATER IMPAIRED STREAM IN THE STATE OF TEXAS.

AND TCU HAS PROGRAMS THEY'RE TRYING TO CLEAN UP THE WATER.

AND SO THERE'S ALL THESE HOT BUTTONS THAT TCU HELPED THE WATER DEVELOPMENT BOARD CREATE THE SCORING CRITERIA FOR.

I HATE TO SAY IT, I USED TO ANSWER THIS QUESTION ALL THE TIME DURING MY NINE YEARS AT THE BOARD.

BUT YES, IT FAVORS SYSTEMS THAT DON'T TAKE CARE OF THEMSELVES LIKE YOU GUYS HAVE TRIED TO TAKE CARE OF YOUR SYSTEMS AND YOU'RE NOT BEING REWARDED WITH THIS MONEY.

BUT UNFORTUNATELY RIGHT NOW THAT'S THE SCORING CRITERIA WE HAVE.

NOW THE MARCH 3RD DEADLINE IS JUST FOR THOSE TWO PROGRAMS. SO ANYTHING WASTEWATER WOULD BE CLEAN WATER AND DRINKING WATER WOULD BE FOR THE DRINKING WATER PROJECTS YOU SEE THERE ANY WATER LINE PROJECTS.

NOW, CHRIS MENTIONED THIS EARLIER, BUT I WANT TO REINFORCE IT.

THE CITY WOULD HAVE ZERO COMMITMENT ZERO UNTIL YOU GO TO CLOSE ALONE.

AND IN BETWEEN THERE YOU SUBMIT A PIF AND THEN YOU HAVE TO BE INVITED AND THEN YOU HAVE AN APPLICATION AND THEN YOU'VE GOT THE CLOSING PROCESS, WHICH TAKES MONTHS.

IT TAKES THE BETTER PART OF A YEAR TO GET THROUGH ALL OF THAT AT ANY POINT IN TIME THAT YOU SAY, WE DON'T WANT TO DO THE WHOLE OYSTER CREEK AT $20 MILLION, WE WANT TO DO HALF OF IT, THAT'S FINE. YOU CAN ALWAYS GO DOWN.

BUT IF YOU DON'T ASK FOR A LARGE ENOUGH NUMBER WHEN YOU SUBMIT THESE PIFS, BECAUSE THE BOARD THEN TAKES ITS AVAILABLE MONEY AND SCORES AND RANKS THESE PROJECTS, THEY CAN'T GIVE YOU MORE MONEY, NOT IN THESE PROGRAMS. NOW, ONE OF THE THINGS I WANTED TO BRING TO THE COUNCIL'S ATTENTION IS THE BOARD HAS OTHER PROGRAMS. THERE'S ONE CALLED THE WATER DEVELOPMENT FUND, WHICH HAS A LOT OF MONEY.

THE DOWNSIDE IS THERE'S NO GRANT FOR GREEN AND THE INTEREST RATES ARE NOT SUBSIDIZED.

WHAT HAPPENS IS THE BOARD SELLS BONDS TO FUND THESE FOR THE D FUND, THEY CALL IT AT A TRIPLE-A RATE.

AND THEN IF YOU'RE NOT A TRIPLE-A RATE, THEN YOU'RE GOING TO REALIZE A COST SAVINGS DIFFERENTIAL THERE.

AND SO BUT THAT THAT PROGRAM HAS PLENTY OF MONEY AND ALL OF THESE PROJECTS WILL QUALIFY AND THE CITY QUALIFIES.

AND SO YOU WOULD BE ABLE TO DO WATER AND WASTE ALL IN ONE LOAN.

IN THE SRF PROGRAMS. YOU'RE GOING TO HAVE TO SPLIT IT INTO TWO BECAUSE THE FEDS MANDATE YOU SPLIT THOSE TWO PROGRAMS UP.

DOES THAT MAKE MORE SENSE ON WHY WE HAVE BIGGER NUMBERS HERE AND WE'RE TALKING ABOUT AND AGAIN, I WANT TO STRESS AT THE TIME OF YOU GET INVITED AND SUBMIT AN APPLICATION, YOU CAN SAY TAKE OUT THE LIFT STATIONS ONE AND FIVE.

WE DON'T THAT THAT GOT DONE.

IT'S FINALIZED AND THOSE ARE COMPLETED SO WE'RE TAKING THAT OUT.

NO PROBLEM. YOU CAN ALWAYS GO DOWN AND JUST TELL THE BOARD WE'RE DOING A PORTION OF WHAT WE SAID WE WERE GOING TO DO BEFORE.

IT'S NOT UNTIL YOU CLOSE THAT LOAN THEN THAT YOU'RE ON THE HOOK FOR A 20 YEAR LOAN AND HAVE TO REPAY IT NO MATTER WHAT YOU DO.

SO IF THAT DOES THAT, CAN I ANSWER ANY QUESTIONS ON JUST PROCESS AND WHAT THAT'S ABOUT? NOW, THE D FUND PROCESS IS DIFFERENT.

THEY DON'T HAVE THIS TWO STEP PROCESS.

YOU BASICALLY RAISE YOUR HAND AND SAY, WE NEED FUNDING AND YOU HAVE A PRE APPLICATION MEETING WITH THE BOARD.

TELL THEM WHAT YOU'RE INTERESTED IN.

THEY'LL TELL YOU HOW TO FILL OUT THE APPLICATION AND GIVE YOU OTHER HINTS AND TRICKS AND STUFF LIKE THIS, AND THEN YOU APPLY WHEN YOU'RE READY.

NOW, THE BOARD DOES HAVE TO SELL BONDS TO FUND THAT PROGRAM, SO YOU HAVE TO GET INTO A CYCLE WHEN THE BOARDS GO INTO WALL STREET TO SELL THOSE BONDS.

BUT OTHER THAN THAT, YOU CAN APPLY IT ANY TIME.

SO THAT'S A LITTLE MORE FLEXIBLE, NOT QUITE AS CHEAP.

THE REASON WE GO FOR SRF IS IT'S GOT AN UPCOMING DEADLINE AND YOU COULD GET BETTER SAVINGS.

NOW, I KNOW A COUPLE OF YOU HAVE SOME FINANCIAL ACUMEN HERE.

[00:25:05]

YOU GET IT ALL UP FRONT.

LOAN IS TRULY A GRANT.

IF IT'S SUBSIDIZED INTEREST RATE, YOU JUST AMORTIZE THAT OVER THE LIFE OF THE LOAN 20, 25, 30 YEARS.

BUT IT'S THE SAME. YOU JUST GET THAT GRANT RECURRING EVERY YEAR IN THE SAVINGS THAT YOU HAVE.

AND THEN WHEN YOU COUPLE THAT TOGETHER WITH THINGS LIKE IMPACT FEES OR EFFICIENCY IMPROVEMENTS.

NOW, FROM AN OVERALL CITY BUDGET, YOU'VE STARTED TO REDUCE YOUR COSTS, BUT YOU'RE GETTING SOME OF THESE PROJECTS COMPLETED.

SO I'LL STOP THERE IF YOU HAVE ANY QUESTIONS.

I COULD SEE THERE WAS A LITTLE CONFUSION AS TO, OKAY, WAIT A MINUTE, BECAUSE YOU START GETTING NERVOUS WHEN YOU SEE 36 MILLION, RIGHT? SAY NO, WAIT A MINUTE. DO WE NEED TO DO ALL OF THAT NOW? WELL, YOU CAN PULL IT OUT AT ANY TIME.

SURE. THANK YOU.

QUESTION, THOUGH, WHAT WOULD YOU WHAT IS COMMON FOR MOST CITIES THAT YOU'VE SEEN ARE WHICH WHICH ROUTE ARE THEY NORMALLY GOING? WELL, THESE DAYS, IT'S EXACTLY THIS PATH I'M WORKING ON CITY OF ARLINGTON RIGHT NOW.

WE'RE DOING EXACTLY THE SAME THING.

WE ARE TAKING A LIST OF THE PROJECTS THAT THEY WANT TO GET DONE.

IT'S ON THEIR CIP. IT'S HIGH PRIORITY.

WE ARE SUBMITTING GIFTS AND WE'RE GOING TO FOCUS REAL HARD.

THE SCORING CRITERIA IS MOSTLY SUBJECTIVE.

YOU'RE EITHER UNDER ENFORCEMENT OR YOU'RE NOT.

YOU'RE EITHER DISCHARGING TO A 303 STREAM OR YOU'RE NOT.

BUT YOU TRY TO COUPLE THOSE TOGETHER.

AND I WAS GOING TO MAKE AN ARGUMENT FOR DUSTIN.

TALK ABOUT PACKAGING THE WASTEWATER ALTOGETHER.

SOMETIMES YOU CAN SAY, WELL, OYSTER CREEK IS NEARING CAPACITY.

IT'S AT SOME LEVEL 75% CAPACITY, 90% CAPACITY.

COUPLE THAT TOGETHER WITH SOME LIFT STATION POSSIBLE OVERFLOWS, SOME NOTICES OF VIOLATION FROM TCQ AND YOU PACKAGE ALL THOSE TOGETHER.

NOW THE BOARD'S LOOKING AT THIS AND SAYING, YOU KNOW, THIS SYSTEM NEEDS SOME HELP AND THEY'RE NOT GOING TO GET IT WITHOUT FUNDING.

AND SO THEY'RE ABLE TO USE THEIR SCORING CRITERIA AND LOOK AT THESE INDIVIDUAL ISSUES AND KIND OF PUT THEM ALL TOGETHER.

THEY DON'T ALWAYS HAVE THAT ABILITY.

IF YOU SAY, YOU KNOW, WE'VE GOT LIFT STATIONS TO THREE OR FOUR AND THERE'S NO VIOLATIONS ON THAT WHATSOEVER, IT'S NOT GOING TO HELP YOU A WHOLE LOT EITHER WAY.

BUT IF YOU PACKAGE THEM TOGETHER AND SAY, LOOK, HERE'S THE AGE, YOU KNOW, HERE'S WHEN WE SHOULD BE REPLACING THESE, WE'VE GOT SOME ISSUES HERE.

WE'VE GOT SOME ISSUES THERE.

I&I ISSUES, WHATEVER IT IS.

AND NOW YOU'RE PUTTING TOGETHER A WHOLE PACKAGE AND THE BOARD LIKES TO SEE THAT THEY WOULD RATHER DO A PROGRAM OF THINGS THAT HELP YOUR SYSTEM OVERALL THAN JUST INDIVIDUAL PIECES. AND TOO MANY TOO MANY TIMES THEY SEE JUST THOSE INDIVIDUAL PROJECTS COME THROUGH.

SO YOU'RE DOING EXACTLY WHAT I'M RECOMMENDING WE DO IN OTHER IN OTHER COMMUNITIES AS WELL.

SO AND IT'S TOUGH BECAUSE LIKE I SAID, THAT IJA FUNDING WE ALL WAITED FOR, IT'S GOING TO A DIFFERENT TYPE OF UTILITY.

UNFORTUNATELY, THAT'S WHAT I WAS GOING TO ASK TO THE IIJ.

I'M SORRY, MR. RIGHT.

CHRIS WANTED ME TO MENTION THE THE LEAD SERVICE LINE REPLACEMENT.

SO PART OF THE IAJ FUNDING, THEY'RE PROVIDING VERY SPECIFIC FUNDING FOR REPLACING LEAD SERVICE LINES.

SO NOT YOUR LINES IN THE STREET, BUT THE HOUSE LINES GO INTO THE HOUSE INTO THE METERS, AND THEY'RE THE FUNDING IS BIG.

THE BOARD HAS OVER 200 MILLION THIS YEAR TO SPEND.

IT IS DIVIDED EXACTLY LIKE THE BASE PROGRAM, 49% GRANT, 51% LOAN.

BUT AT THE BOARD'S CONFERENCE, THE WATER FOR TEXAS CONFERENCE A COUPLE OF WEEKS AGO, THEY OUTLINED PRELIMINARILY BEFORE THEY RELEASE AUP, THEY'RE GOING TO MAKE EVERY PROJECT 49% GRANT, 51% LOAN.

SO EVERY PROJECT YOU DO ON THAT WILL BE SPLIT EXACTLY LIKE THAT.

STILL WAITING FOR THAT CALL FOR PROJECTS.

AND WHEN IT DOES COME IN, ONE OF THE BIGGEST, BIGGEST BENEFITS AND I THINK THIS IS WHAT MADE CHRIS RAISE AN EYEBROW UNDER THE BASE PROGRAM.

THE BOARD DEFINES A DISADVANTAGED COMMUNITY AS A COMMUNITY THAT HAS A MEDIAN HOUSEHOLD INCOME THAT IS 75% OF THE STATE'S MEDIAN INCOME OR LESS FOR THE LEAD SERVICE LINES. THEY REDEFINED IT 150%.

SO INSTEAD OF A $50,000 MEDIAN INCOME THRESHOLD THAT YOU HAVE NOW, IT'S 101, WHICH MEANS EVERY UTILITY IN TEXAS QUALIFIES.

SO YOU WILL QUALIFY.

IT'S JUST A MATTER OF HOW FAR WILL THAT 200 MILLION GO.

NOW, THE WAY THAT THE PROGRAM WAS DESIGNED WHEN CONGRESS APPROVED THE IIJA, IT'S A FIVE YEAR PROGRAM, SO THEY'RE SUPPOSED TO.

OF 200 MILLION AVAILABLE THIS YEAR PLUS FOUR AND MORE.

AND IT'S FOR INVENTORIES, IT'S FOR REPLACEMENT OF THOSE LINES, THE WHOLE SHOOTING MATCH.

NOW, CHRIS SAID YOU'RE ALREADY UNDER AN INVENTORY.

[00:30:01]

THAT'S GOING TO GET YOU POINTS IN THIS PROGRAM.

GOOD. BUT IT'S A SEPARATE IEP, A SEPARATE SUBMITTAL.

IT'LL BE A NEW PITH.

SO WE'LL BE TALKING ABOUT THAT WHEN THAT LANDS AND BE ABLE TO GET SUBMITTED FOR THE CITY ON THAT AS WELL.

AND WHAT'S THE INTEREST RATE RIGHT NOW THAT YOU'RE SEEING? YOU KNOW, I HAVEN'T LOOKED IN A WHILE SINCE I HAVEN'T CLOSED A LOAN SINCE SEPTEMBER, BUT I WANT TO SAY IT'S OVER 4% RIGHT NOW FOR THE STANDARD RATES.

RIGHT. SO IF YOU'VE GOT TO TAKE A LIKE IF YOU GET AN SRF LOAN IN THE CLEAN WATER PROGRAM, YOU CAN GET UP TO 40% OFF OF THAT RATE WOULD BE YOUR SUBSIDIZED RATE.

JUST WONDERING WHAT THE LOW INTEREST RATE WAS GOING TO BE.

YEAH. YEAH. NO, IT'S IT'S LOWER.

YEAH. SO WHAT THE BOARD DOES IN THE SRF PROGRAM, THEY DON'T LOOK AT THEIR RATING, THEY LOOK AT YOUR RATING.

AND I THINK THAT YOUR RATING IS LIKE A PLUS MINUS DOUBLE-A, MINUS SOME DOUBLE-A SOMETHING.

RIGHT. SO WHAT THEY'RE GOING TO USE, THEY USE THE THOMSON REUTERS MUNICIPAL MARKET DATA SCALE AS THEIR SCALE AND THEY'LL GO IN AND SAY, OKAY, ANGLETON ON A 20 YEAR LOAN, YOUR DOUBLE-A EVEN WE'LL CALL IT, THEY SUBTRACT, THEY TAKE ALL OF THOSE RATES, BUT THEY SUBTRACT 40% OFF OF THAT AND THAT'S YOUR LOAN RATE THAT YOU REPAY.

SO THAT'S WHY IT'S IT'S IMPORTANT TO TRY TO HIT THESE SO YOU CAN TRY TO GET THESE SRF DOLLARS BECAUSE IT TRULY IS A GOOD SAVINGS.

NOW, THE D FUND STILL IS A SAVINGS FROM DOUBLE-A TO TRIPLE-A.

SO YOU'RE STILL GOING TO HAVE A SAVINGS, JUST NOT AS MUCH AS 40% OFF YOUR AA.

WELL, WHEN WE HAD DONE THIS THREE YEARS AGO.

NOW THE SAVINGS IS JUST THE DIFFERENCE OF THE INTEREST RATE HIKES OVER THE LAST YEAR.

I'LL STAY QUIET FOR A MINUTE.

JUST MAKE A COMMENT.

SO ONE OF THE THINGS WE'RE ADDRESSING UNDER THE OYSTER CREEK REHAB IS SCHNEIDER ELECTRIC.

SO THERE'S TWO PORTIONS ONE WE'RE NOT GOING TO TALK ABOUT TONIGHT IS ALL THE LIGHTING AND THE HVAC AND THE CONTROLS.

BUT THE FIVE PROJECTS THEY HAVE, SO SO IN THE SCHEME OF WE'RE NOT GOING TO SAVE ENERGY.

WELL, I'M SORRY, WE'RE GOING TO SAVE ENERGY, BUT WE'RE NOT GOING TO WE'RE NOT GOING TO REDUCE OUR COST.

RIGHT. SO WE BOUGHT ENERGY AT THREE AND ONE HALF CENTS THREE YEARS AGO.

OUR CONTRACT ENDS IN SEVEN YEARS.

SO IN SEVEN YEARS, I MEAN, $0.16, $0.20, FIVE.

WE'RE JUST GOING TO REDUCE THE COST OF THE INCREASE FOR ELECTRICITY.

AND AND SO WHEN YOU LOOK AT THE PROGRAMS, YOU KNOW, WE'RE SEVEN YEARS OUT, BUT BY THE TIME WE FUND DESIGN, EXECUTE, WE'RE GOING TO BE GETTING TOWARD THE END OF THAT.

MARK BROUGHT UP A POINT JUST A MOMENT AGO THAT I CLUED IN ON.

GETTING THE MONEY IS GOING TO TAKE A LONG TIME.

AND DURING THIS PERIOD THAT WE'RE WAITING TO GET THE MONEY, THE SEWER PLANT IS NOT HEALING ITSELF.

IT'S JUST GETTING WORSE AND WORSE.

THE STUFF THAT IS DECAYING IS ROTTING AND WORSENING.

SO I'M GOING TO ENCOURAGE US.

TO TAKE THE HEAT AS MUCH AS WE POSSIBLY CAN.

IT BECAUSE IT'S GOING TO BE HARDER AND HARDER THE LONGER WE WAIT TO DO TO DO THESE THINGS.

ON. WATERLINE REPLACEMENTS.

THERE ARE PARTS OF TOWN WHERE THERE'S MULTIPLE PLACES HERE IN TOWN THAT NEED WATER LINES REPLACED.

WHEN YOU START DEALING WITH DOWNTOWN AREAS.

THOSE ARE GOING TO BE WAY MORE COSTLY WHEN YOU WALK DOWN VELASCO STREET.

DO YOU SEE ANY DIRT ANYWHERE? NO. IT'S CONCRETE FROM WALL TO WALL.

AND UNDERNEATH ALL THAT.

IS WHERE THE WATER LINES ARE.

SO YOU HAVE TO TAKE THE PAVEMENT UP.

YOU GOT TO GET DOWN THERE AND GET TO IT.

OR GET TO A SPOT TO PUT A NEW ONE AND TRANSFER THE SERVERS FROM THE OLD WATER TO THE NEW WATER.

THAT'S A LOT OF THE MINUTIA THAT IS VERY, VERY EXPENSIVE.

JOHN PETERSON.

THE LINE THAT GOES BETWEEN THE HENDERSON ROAD PLANT AND THE SHENANGO PLANT NOW.

WILL THAT LINE BE ABLE TO BE CONTINUED IN SOME SORT OF USE OR IS IT JUST GOING TO GET TOTALLY ABANDONED? NO, IT'LL BE IN USE.

WHAT WE'RE TRYING TO DO THAT WE INSTALL THIS NEW TRANSMISSION MAIN, IT WILL REVERT BACK TO ITS ORIGINAL INTENTION.

YES, SIR. OKAY.

YES, SIR. THAT WAY.

THAT WAY. YOU ALWAYS HAVE TREATED WATER IN THE IN THE MAIN THAT GOES FROM PLANT TO PLANT.

[00:35:06]

AND NOT NOT KIND OF A COMBINATION WHEN YOU FLIP OVER FROM ONE TO THE OTHER.

OKAY. THANK YOU. SO COUNCILMAN BOOTH'S POINT.

I THOUGHT IT MAY BE HELPFUL FROM THE DISCUSSION OF WHAT YOU WANT TO TAKE ON TO AT LEAST HAVE SOME IDEA OF HOW YOU SIT WITH YOUR PEERS ON YOUR CURRENT RATE STRUCTURE AND WHAT KIND OF SPACE YOU MAY OR MAY NOT HAVE AND HOW YOU GUYS WANT TO LOOK AT THAT.

THE INTENT FOR TONIGHT IS TO SORT OF HELP SET THE STAGE FOR A LOT OF DISCUSSIONS WE MAY HAVE IN A SECOND WORKSHOP, WHICH WOULD MOST LIKELY BE AFTER THE PIFS ARE SUBMITTED.

BUT WHERE YOU CAN START TO DIVE INTO DIFFERENT STRATEGIES AROUND DIFFERENT PROJECTS THAT YOU COULD OR COULDN'T TAKE DOWN, AND EVEN SOME UPDATES WE MAY NEED TO HAVE TO SOME OF THE NUMBERS ON THESE GIVEN SOME OF THE FEEDBACK THAT WE'VE GOT WORK WE'RE STILL DOING.

SO JUST TO PUT A LITTLE BIT OF A COMPARISON TO THIS, IF YOU LOOK AT 5000 GALLONS FROM WHAT THAT IF YOU WANT, THIS IS ON PAGE TEN.

SLIDE TEN, PAGE FIVE OF YOUR OF YOUR HANDOUT, YOU WANT TO SEE A LITTLE BIT CLOSER.

SO RIGHT NOW ANGLETON IS 5000 GALLONS PER MONTH, SORT OF $63.42 A MONTH.

BILL, YOU'LL SEE THAT OTHER CITIES THAT ARE STARTING TO EXPERIENCE SIGNIFICANT GROWTH LIKE ALVIN, RICHWOOD, MANVILLE, EVEN PEARLAND, ARE SIGNIFICANTLY HIGHER THAN YOU CURRENTLY.

I THINK PARALLEL IS THE CLOSEST AT 7631 IN THAT RESPECT, AND THEY ARE LOOKING AT SUBSTANTIAL RATE INCREASES FOR THE PROGRAMS THAT THEY'RE HAVING TO PUT IN PLACE TO.

SO ONE MORAL OF THE STORY IS YOU WOULDN'T BE THE ONLY ONES HAVING TO DO RATE INCREASES, RIGHT? IT'S THE DATA POINT THAT I REMEMBER FROM A LONG TIME AGO IS THAT ABOUT 95% OF THE UNITED STATES WATER AND SEWER INFRASTRUCTURE WAS PUT IN BY LOCAL MONEY.

AND THAT DATA IS PROBABLY EVEN HIGHER NOW.

IT'S PROBABLY MORE 97 OR 98% BECAUSE THAT INCLUDED THE CONSTRUCTION GRANTS ERA.

AND WE WERE A LOT CLOSER WHEN I GOT THAT DATA POINT.

SO SO YOU'RE TALKING IN THAT CASE NOW, THERE'S CHANGES IN BASE RATES FOR DIFFERENT FOR DIFFERENT COMPONENTS OF DIFFERENT VOLUMETRIC RATES.

SO IF YOU GO UP TO 10,000 GALLONS PER MONTH, YOU GUYS ACTUALLY JUMP A LITTLE BIT AHEAD OF WHERE MANVEL IS AT CURRENTLY.

BUT ONCE AGAIN, MANVILLE IS CONSIDERING A 17% RATE INCREASE.

SO THEY GO FROM $104 TO RIGHT AROUND 120 OR SOMETHING LIKE THAT.

SO OBVIOUSLY WHAT YOU HAVE TO DO AS POLICYMAKERS FOR YOUR RESIDENTS IS DIFFERENT THAN WHAT THESE OTHER COMMUNITIES HAVE TO DO.

BUT SORT OF THE POINT HERE IS YOU'RE NOT GOING TO NECESSARILY PRICE YOURSELF OUT OF THE MARKET IF YOU MAKE A RATE ADJUSTMENT, AT LEAST BASED UPON THE CURRENT DATA, WHERE WE SEE THE TRAJECTORY OF THINGS GOING.

AND YOU'RE NOT THE ONLY ONES IN BRAZORIA COUNTY IN PARTICULAR THAT ARE SORT OF FACING THE SAME CHALLENGE.

THERE'S JUST A LOT OF GROWTH COMING AT YOU.

YOU'VE GOT OLDER SYSTEMS THAT ALSO HAVE TO BE UPGRADED, SO YOU'VE GOT TO KILL TWO BIRDS.

IN THIS CASE, YOU'VE GOT TO BOTH GET THE CAPACITY FOR THE ADDITIONAL GROWTH AND YOU'VE GOT TO TAKE CARE OF THE SYSTEM THAT'S AGING AS WELL.

SO AND THAT'S WHERE, AS MARK SAID, HOPEFULLY WE CAN GET CREATIVE IN THE WAY WE PACKAGE THESE PROJECTS UP AND TRY TO FIND SOME ARGUMENTS THAT SAY, YES, THE SYSTEM IS WORKING, IT'S NOT UNDER ENFORCEMENT.

BUT IF WE LET IT GO MUCH FURTHER, IT COULD BE UNDER ENFORCEMENT.

AND WE WANT TO TRY TO AVOID THAT AND TRY TO USE THAT TO STRENGTHEN THE ARGUMENTS.

WE GET THE APPLICATIONS.

THE ISSUE IS WE DON'T CONTROL OUR OWN WATER RATE TO SOME EXTENT.

IT'S FORCED ON US FROM BWA WITH THEIR PRICE INCREASES AS WELL.

SO WHATEVER WE TAKE ON, WE'RE ALSO AT THE WHIM OF WHAT BWA PASSES ON TO US AS WELL.

SO WHEN YOU LOOK AT THE STRUCTURE ON THESE GRAPHS, ONE OF THE INTERESTING PIECE OF IT IS THE DIFFERENCE BETWEEN THE GREEN AND THE BLUE.

YOU CAN LOOK AT THE CITY OF ANGLETON AND THE AMOUNT OF BLUE YOU SEE IN THE COST THERE IS A LITTLE BIT HIGHER.

IT WAS ACTUALLY THE SECOND HIGHEST, I BELIEVE, IN THIS GRAPH OF THE CITIES, AND THAT'S BECAUSE WE'RE TAKING ON A MORE PROPORTIONALLY MORE WATER COST THAN MOST OF THE OTHER CITIES. AND OUR SEWER IS ACTUALLY THE SMALLER PIECE.

SO WE ACTUALLY IF THERE WAS A NEED TO INVEST AND RAISE RATE, IT WOULD HAVE TO BE TO ME WOULD BE MOST LIKELY TO DO THAT ON THE WASTEWATER SIDE, ALTHOUGH THE RATES KIND OF TOGETHER IN THE COMPARISON, THAT'S JUST WHAT JUMPED OUT AT ME INSTANTLY WAS JUST THE DIFFERENCE OF THAT.

FORTUNATELY, THERE'S A LOT OF THERE'S A LOT OF EXPENSE IN THE TABLE THAT'S RELATED TO WASTEWATER.

SO AND THAT'S I THINK YOU'VE GOT THE JUSTIFICATION, RIGHT? YEAH, ABSOLUTELY. YOU CAN MAKE THERE.

BUT IT ALSO BEGS THE QUESTION OF WHY IS OUR COST STRUCTURE SO OFF FROM THE OTHER CITIES IN WATER? YEAH, I THINK YOU HIT THE NAIL ON THE HEAD.

I MEAN, IF YOU LOOK AT IT, THAT VOLUMETRIC WATER PRICING, WHICH IS PROBABLY WHAT'S COMING THROUGH YOUR WHOLESALER, IS A SIGNIFICANT.

[00:40:02]

SO IT'S IT'S GOING TO BE BASED UPON HOW MANY GALLONS YOU USE.

RIGHT. AND WE CAN'T CONTROL THAT.

BUT OBVIOUSLY, ONE OF THE THINGS THAT RICHARD CAMPBELL IS VERY GOOD AT DOING IS LOOKING AT RATE STRUCTURES AND REVENUE STRUCTURES.

AND WE CAN TRY TO LOOK AT HOW WE CAN LEVEL IN THE.

WHAT YOU'RE GOING TO DO FOR THE RATES TO MATCH THE WASTEWATER SIDE OF THE SPEND.

RIGHT. LET'S LOOK AS WE COMPARE VOLUMETRIC RATES, FREEPORT, CLUTE, LAKE JACKSON AND RICHWOOD.

ALL FOUR GET THE MAJORITY OF THEIR WATER FROM THE BWA.

WE'RE NOT THE LONE WOLF IN THIS COMPARATIVE.

STUFF HERE. SO FREEPORT GETS ALL THEIR WATER FROM BWA AND I DON'T KNOW THE PROPORTION THAT THESE OTHER TOWNS DO, BUT WE'RE NOT WE'RE NOT THE ONLY PERSON THAT'S IN THIS.

WE'RE ALL IN THIS TOGETHER.

YEAH. SO WE CERTAINLY CAN TAKE THE ACTION OVER THE NEXT COUPLE OF WEEKS AS WE'RE WORKING ON THE DETAILS OF THE PROJECTS TO DIVE DEEPER INTO THE RATE STRUCTURE AND THE RATE STRUCTURE OF THE OTHER COMMUNITIES AND MAKE SURE THAT WE HAVE A GOOD UNDERSTANDING OF WHAT THAT IS.

AND IF THERE'S A WAY TO STRATEGIZE AROUND MINIMIZING THE IMPACT.

WE CAN WE CAN ONLY CONTROL OUR WAGE STRUCTURE.

WHAT OTHER CITIES DO.

THAT'S THAT'S CORRECT.

TOTALLY UP TO THEM. YEAH.

YEAH. BUT IT DOES BEG THE QUESTION, IF YOU LOOK AT LAKE JACKSON, WHO ALSO HAS A MIXED SYSTEM AS WELL, AND THEY HAVE A LOWER COST OF WATER.

HOW ARE THEY? IS IT BY VOLUME? IS IT I MEAN, I GUESS THE COST ACCOUNTANT COMES OUT IN ME AND WANTS TO LIKE, DIVE IN AND START LOOKING AT IS IT LABOR OR IS IT MATERIAL? WHAT'S DRIVING OUR COST STRUCTURE? AND I GUESS DIFFERENT FROM THE OTHER MEMBER CITIES THAT ARE IN THE SAME BOAT AS US.

BUT WE'RE ON A MIXED SYSTEM AND SIMILAR TO US IN THAT SIZE.

I THINK THAT'S AN EXCELLENT SET OF QUESTIONS FOR US TO TRY TO ADDRESS.

WE GET BACK ON THE STRATEGY DISCUSSION BECAUSE IT'S OBVIOUSLY GOING TO IMPACT ON WHERE YOU WANT TO PUT YOUR RATES.

YEAH. FORTUNATELY, IT'S THE WASTEWATER SIDE WHERE YOU PROBABLY HAVE TO ADD THE FUNDING, BUT HOW YOU LEVEL UP OVER A SERIES OF YEARS BETWEEN THE TWO IS GOING TO BE IMPORTANT.

BUT WE COULD ALSO ALWAYS KEEP OUR RATE LOW BUT NEVER FIX ANYTHING.

I MEAN, WHICH HAS HAPPENED IN THE PAST.

YEAH, THAT'S WHERE WE ARE TODAY.

YEAH, NOT TOTALLY, BUT.

I MEAN. AND THE GOOD NEWS, SAYING WE'RE FIXING THINGS, RIGHT.

THE BAD NEWS IS IT'S GOING TO COST US MORE TO DO THAT.

BUT WE HAVE TO RECOGNIZE THAT WE'RE ADDRESSING THE PROBLEMS AND THAT IT'S COSTLY AND ADDRESS THEM IN 20, $24 INSTEAD OF 26 OR EIGHT OR 2030, RIGHT.

COSTS ARE ONLY GOING TO INCREASE AND THEY'RE GOING TO INCREASE AT A HIGHER RATE THAN YOU CAN BOND.

THAT'S THE PROBLEM WITH THE SITUATION, IS YOU CAN'T GET ANY BENEFIT BY PUSHING IT.

DOWNSTREAM. BECAUSE WHETHER IT'S THROUGH STATE MONEY OR EVEN WITH YOUR YOUR CREDIT RATING, THE LIKELIHOOD OF THERE BEING A ESCALATORY ENVIRONMENT IN THE CONSTRUCTION MARKET, GIVEN ALL THE DEVELOPMENT IN THE STATE, IS PRETTY LOW.

AND THAT'S GOING TO MEAN ESCALATION IS 6 TO 8% A YEAR OR 8 TO 10% PER YEAR.

AND YOU'LL ALWAYS BE ABLE TO BOND AT CHEAPER THAN THAT.

SO YOU JUST RUN THE FINANCIAL EQUATIONS AND YOU'RE GOING TO SHOW THAT IT'S BETTER TO DO THINGS SOONER THAN LATER.

NOW. YOU CAN'T GO BITE OFF EVERYTHING AT ONCE BECAUSE YOU HAVE TO PAY FOR IT, TOO.

BUT YES, SIR, THAT'S PART OF, I THINK, WHAT WE'RE GOING TO TRY TO DO FOR YOU AND LOOKING AT THE WAY WE LEVEL INTO THESE APPLICATIONS AND OTHER THINGS AND HOW THAT WOULD AFFECT THE RATES IS HOW MUCH CAN YOU EFFECTIVELY BITE OFF IN YEAR ONE, FOLLOWED BY YEAR TWO OF ALL BY THREE YEAR, YEAR THREE.

YEAH. AS I MENTIONED A LITTLE BIT EARLIER, I WAS IN THE EXACT SAME BOAT IN 2003 SITTING ON A COUNCIL.

WE HAD THE EXACT SAME PROBLEM AND WE HAD TO DO DOUBLE DIGIT RATE INCREASES EVERY YEAR FOR LIKE FIVE YEARS.

BUT WE DIDN'T DO THEM ALL IN ONE FUND.

SO WE, WE LEVELED UP ON OUR WASTEWATER.

GOT THINGS GOING. THEN WE DID SOME ON OUR WATER AND WE CAME BACK ON THE WASTEWATER.

WE'RE LOOKING MOSTLY AT THIS KIND OF ANALYSIS.

WHAT'S THE ACTUAL MONTHLY BILL GOING TO LOOK LIKE? AND I THINK STRUCTURED THAT WAY.

YEAH. BECAUSE THAT'S WHAT THE CITIZEN SEES.

CORRECT. CORRECT.

WELL, THIS CAN BE HARD BECAUSE WE'RE GOING TO GO OUT FOR THIS.

RIGHT. AND WE'RE GOING TO GO BORROW THE MONEY AND RAISE THE RATES.

AND THEN BWA GIVE US THE RESERVOIR INCREASE AND THEY'LL GIVE US AN M&O INCREASE AND WHATEVER.

AND LET'S SAY YOU JUST RAISE THE RATES BECAUSE YOU SAID YOU'RE GOING TO BORROW THIS.

NOW YOU TURN AROUND AND RAISE THEM AGAIN.

[00:45:02]

I DON'T NEED TO GET INTO THIS TONIGHT, BUT I THINK THERE'S A WAY TO PACKAGE THAT IN YOUR BILL THAT MAY MAKE IT CLEAR WHAT THE CITY IS DOING VERSUS WHAT'S HAVING TO BE PASSED THROUGH. I WAS LOOKING FOR MARKETING SUGGESTIONS.

YEAH. WE'VE HAD TO DEAL WITH THAT ISSUE, TOO.

THIS IS WHAT YOUR CITY CONTROLS.

THIS IS WHAT YOUR CITY DOES NOT CONTROL.

SO. YEAH.

I WOULD STRONGLY ENCOURAGE US TO.

AND WE'RE DOING THIS TO LOOK AT THE SANITARY SEWER REHAB PORTION OF THE COLLECTION SYSTEM.

THAT'S WHERE OUR INFLOWS COME FROM, WHICH ALL HAS TO GO OUT TO THE SEWER PLANT.

EVERY DROP HAS TO BE TREATED.

SO I KNOW THE $5 MILLION IN THE LIST, THERE IS JUST A GUESS.

ALL THESE ARE GUESSES. BUT THAT'S A THAT'S THE BIGGEST GUESS OF ALL, BECAUSE YOU HAVE NO IDEA HOW SEVERE OR WHERE THESE PROBLEMS EXIST.

THAT'S WHY WE GO THROUGH AND DO THE SMOKE TESTING AND THINGS LIKE THAT TO TRY TO FIND.

THE MAJOR, THE MAJOR INFLOW POINTS, THE COUNCILMAN BOOTH IS EXACTLY RIGHT.

IF YOU CAN SLOW DOWN THE AMOUNT OF WATER YOU DON'T NEED TO TREAT GETTING TO THE PLANT, IT CAN SAVE YOU ON HOW MUCH YOU HAVE TO EXPAND THE FACILITY OR FIX THE FACILITY. JUST FOR REFERENCE PURPOSES, THAT $5 MILLION IS PROBABLY.

OBVIOUSLY, IT DEPENDS UPON WHERE YOU'RE BUILDING FOR BUILDING UNDER CONCRETE.

IT'S A DIFFERENT ANIMAL, BUT MAYBE 20,000 LINEAR FEET A YEAR OF 270,000 LINEAR FEET THAT YOU HAVE.

SO 5 MILLION IS AN INVESTMENT, BUT IT TAKES A LONG TIME TO GET TO FULL REPLACEMENT WITH THAT KIND OF INVESTMENT. SO.

ANOTHER THING YOU MAY WANT TO LOG INTO AS YOU GET GOING.

SO WHAT KIND OF ACTION DO YOU WANT US TO GIVE? JUST. SUBMIT A PDF AND WITH OUR SELECTIONS AND A DOLLAR AMOUNT.

YEP. JUST GIVE ME A DOLLAR AMOUNT IN THAT WAY, YOU KNOW, YOU'VE GIVEN THAT PARAMETER OF WHAT YOU WANT TO FIX, AND THEN WE'VE GIVEN THEM THE AUTHORIZATION BECAUSE LIKE CHUCK SAID AND MARK SAID, WE'RE GOING TO HAVE TIME TO COME BACK.

AND HEY, THEY RANKED US NUMBER 25 AND CLEAN WATER AND 15 AND DRINKING WATER.

AND THESE ARE THE GRANTS OR THE TERMS OR WHATEVER.

AND THEN IF WE WANT TO PARE THAT.

YOU KNOW. OR DO YOU MEAN DOWN? WE CAN SAY WE REALLY ONLY HAVE THE APPETITE FOR X AND THAT MECHANISMS. NINE MONTHS TO I THINK A YEAR FROM NOW FOR THAT SO THIS IS NOT A ONE AND DONE AND WE'RE OBLIGATED THIS IS STEP A, STEP ONE TO SEE WHERE WE'RE AT.

STEP TWO WILL BE WHEN WE GET THE CALL FOR AN APPLICATION AND STEP THREE WILL FIND OUT OUR RANKINGS AND THEN WE CAN START MAKING THOSE HARD DECISIONS.

OR MAYBE WE HAVE OPERATIONAL ISSUES AND WE SAY IT'S AN EASY DECISION.

YOU KNOW, CAN'T FORECAST THAT.

SURE. ONE THING THAT I WOULD ASK FOR THE NEXT TIME WE MEET IS THE DEBT SERVICE ON THE WATER FUND AND THE SCHEDULE OF THAT.

SO THE AMORTIZATION SCHEDULE FOR THE NEXT TEN, 15 YEARS.

JUST TO HELP US UNDERSTAND THE COST STRUCTURE A LITTLE BIT.

YOU KNOW, I THINK WE NEED TO PUT IN THE BWI RESERVOIR INCREASES AND THEN SEE IF WE CAN GET ANY KIND OF INTEL ON FUTURE M&O.

YEAH. TIMELINE JUST HAD A CRYSTAL BALL.

WHEN WOULD WE ACTUALLY BE LOOKING AT A FIRST PAYMENT SHOULD WE GET SELECTED AND ALL THAT? IS THAT 20, 26, 2027, 2028? SO WE CAN START. Y'ALL CAN START DOING YOUR BUDGETING.

IT'S 2024.

YEAH. SO THAT'S ONE REASON I STEPPED UP HERE.

I WANTED YOU TO, ONCE YOU SUBMIT A PIF, I WANTED YOU TO UNDERSTAND WHAT THE PROCESS WAS.

SO THE PIF TELLS THE BOARD YOU HAVE A PROJECT AND YOU ANSWER CERTAIN QUESTIONS IN THERE WHICH HELPS THEM SCORE YOUR PROJECT.

THEN THEY TAKE ALL OF THE PROJECTS AND THEY PUT THEM AGAINST EACH OTHER AND RANK THEM HIGHEST TO LOWEST.

NOW THE OTHER PART THAT THEY DO IS THEY HAVE TO CREATE AN INTENDED USE PLAN THAT'S PART OF THEIR REQUIREMENT WITH THE EPA.

AND THE PLAN SAYS WE HAVE THIS MUCH MONEY, HERE'S YOUR ELIGIBLE APPLICANTS, HERE'S YOUR ELIGIBLE PROJECTS, HERE'S WHAT WE PLAN TO SPEND THE MONEY ON.

[00:50:07]

SO NORMALLY YOU WOULD SUBMIT BY MARCH 3RD AND THEY WOULD BE CREATING A DRAFT INTENDED USE PLAN, WHICH THEN IS VISIBLE TO THE PUBLIC BY JUNE.

THAT HAS KIND OF GONE BY THE WAYSIDE WITH THEIR LOW STAFFING LEVELS.

SO I GAVE YOU LAST YEAR, I THINK IT HIT IN NOVEMBER, IT WAS THAT LATE.

BUT ONCE YOU SEE THAT AND IN IT'S IN DRAFT FORM AND IT'S OPEN FOR PUBLIC COMMENT FOR A MONTH, RIGHT, YOU ACTUALLY GET THE OPPORTUNITY TO SEE WHERE YOU SCORED. AND ONE OF YOUR NEIGHBORS, MISSOURI CITY, YOU KNOW, I EVEN SAW AN ANOMALY ON THEIR SCORING.

AND SO I SUBMITTED A COMMENT TO THE BOARD HOPING TO GET THE RANKING CHANGED.

DIDN'T HAPPEN. I DIDN'T GET IT, BUT WE TRIED.

IT GIVES YOU THAT OPPORTUNITY.

BUT YOU SEE WHERE YOU'RE GOING TO BE.

SO YOU'RE NOT WAITING FOR A YEAR TO FIGURE OUT WHETHER YOU GOT THE FUNDING OR NOT, BECAUSE IF YOU ARE IN SO THE BOARD WILL GIVE SEVERAL LISTS, ALPHABETICAL AND THEN BY RANK ORDER, AND THEN THEY GIVE A LIST THAT'S CALLED THE INITIAL INVITED PROJECTS LIST.

AND GIVEN THE AMOUNT OF MONEY THEY HAVE AND THE DIFFERENT FEATURES THEY HAVE TO TRY TO FUND LIKE THE GREEN AND THE DISADVANTAGE AND ALL THIS, THEY THEN SHOW YOU, HERE'S THE ENTITIES WE PLAN TO INVITE FIRST, AND THEN AFTER THAT FIRST ROUND AND THE APPLICATIONS ARE SUBMITTED BY THAT GROUP, THEN THEY CAN START MOVING DOWN THE LIST UNTIL THEY RUN OUT OF MONEY ULTIMATELY.

AND THAT'S HOW THE PROCESS WORKS.

NOW, TIMING WISE, YOU KNOW, I DON'T WANT TO SAY THAT WE SUBMIT NOW AND YOU'RE NOT GOING TO KNOW TILL NOVEMBER.

I KNOW THE BOARD WOULD LIKE TO CURE THAT.

SO LET ME TELL YOU WHAT THEIR NORMAL TIME FRAME WOULD BE.

YOU'D SEE THE DRAFT BY JUNE.

JULY WOULD BE THE 30 DAY PUBLIC COMMENT PERIOD, THE 1ST OF AUGUST.

THEY'RE ADDRESSING THOSE COMMENTS AND SENDING IT BACK TO EVERYBODY.

THEY'RE FINALIZING THEIR IUP WITH ALL OF THE COMMENTS AND RESPONSES AND TAKING IT BACK TO THEIR BOARD AT THE END OF AUGUST FOR FINAL APPROVAL.

USUALLY THE DAY OF GIVEN ENOUGH TIME OR WITHIN A DAY OR TWO, THEY'RE INVITING THOSE THOSE FIRST PROJECTS ON THAT INITIAL INVITED PROJECTS LIST, AND THEY'RE USUALLY GIVING ABOUT 60 DAYS TO SUBMIT AN APPLICATION.

SO NOW YOU'RE TALKING IF YOU'RE TALKING ABOUT END OF AUGUST, NOW YOU'RE TALKING ABOUT SEPTEMBER, OCTOBER, AROUND THE END OF OCTOBER 1ST OF NOVEMBER, YOU'RE HAVING TO SUBMIT A FULL APPLICATION NOW THAT EVEN THOUGH THERE'S STILL NO COMMITMENT TO SUBMIT THAT IT IS A SIGNIFICANT SUBMITTAL.

IT'LL TAKE YOUR FINANCIAL ADVISOR, IT'LL TAKE YOUR BOND COUNCIL, THE ENGINEER.

WE HAVE TO ANSWER QUESTIONS ABOUT ENVIRONMENTAL AND ALL KINDS OF STUFF.

SO IT'S A HEAVIER LIFT THAN JUST SUBMITTING THIS PIF.

YOU SUBMIT THAT, LET'S SAY BY 1ST OF NOVEMBER, THE BOARD NORMALLY WOULD TAKE SOMEWHERE AROUND 3 TO 4 MONTHS.

NORMALLY THESE DAYS IT'S RUNNING MORE LIKE 4 TO 5 MONTHS TO GET YOUR PROJECT TO THEIR BOARD FOR FUNDING COMMITMENT.

SO IF WE'RE TALKING ABOUT NOVEMBER NOW, WE'RE TALKING ABOUT DECEMBER, JANUARY, FEBRUARY, MARCH AT THE EARLIEST, YOU'RE GOING TO THE WATER BOARD FOR A FUNDING COMMITMENT AND THEN IT TAKES AT QUICKEST 3 TO 4 MONTHS TO CLOSE THAT LOAN OR CLOSE THAT LOAN.

AND IN THE SRF PROGRAMS, THEY DON'T CALL THEM A GRANT.

THEY CALL THEM PRINCIPAL FORGIVENESS.

SO THOSE ARE INTERCHANGEABLE.

SO AT THE QUICKEST YOU'RE LOOKING MARCH OR APRIL IN A NORMAL TIME FRAME.

SO THAT'S KIND OF THE LAY OF THE SCHEDULE.

NOW, BEYOND THAT, LET'S SAY YOU CLOSE, LET'S SAY IN APRIL YOU HAVE AN ENVIRONMENTAL PLANNING DOCUMENT THAT HAS TO BE SUBMITTED AND APPROVED AND ENGINEERING FEASIBILITY REPORT, WHICH IS AN ENGINEERING PLANNING DOCUMENT THAT HAS TO BE SUBMITTED AND APPROVED, AND THEN PLANS AND SPECIFICATIONS, ESPECIALLY FOR WASTEWATER WHEN THERE'S BOARD FUNDING INVOLVED, TCU PASSES OFF ALL STATE DESIGN REVIEW TO TWDB, SO IT STAYS WITH THE TWDB.

WATER'S A LITTLE DIFFERENT.

SOME MORE COMPLICATED PROJECTS STILL HAVE TO GO TO TCQ FOR APPROVAL, BUT ON WASTEWATER.

ITS ALL WATER DEVELOPMENT BOARD.

ALL OF THAT PROCESS OF CREATING THESE DOCUMENTS, SUBMITTAL AND APPROVAL COULD TAKE UPWARDS OF A YEAR, NINE MONTHS TO A YEAR.

NOW, THE APPROVALS VARY.

THEY VARY BY TEAM.

THIS TEAM HERE IS TEAM FOUR.

NANCY RICHARDS, I KNOW HER WELL.

SHE'S THE TEAM MANAGER.

NANCY HAS A LOT OF EXPERIENCE, BUT SHE'S LIKE ALL THE REST OF THE TEAMS OVER THERE.

SHE'S DOWN STAFF RIGHT NOW.

SHE IS AN ENGINEER, SO I KNOW SHE'S DOING HER OLD ENGINEERING WORK AS WELL AS MANAGING THE TEAM RIGHT NOW.

BUT EVERYTHING IS SLOWED DOWN.

AND THAT'S THAT'S THE BAD PART.

YOU KNOW, YOU HAVE INFLATION ON TOP OF SLOWER SCHEDULES AND, YOU KNOW, LIKE MR. BOOTH SAID. WHEN DO WE THINK WE'D GET THE FUNDS JUST BASED ON A NORMAL TIMELINE AND THEN ?

[00:55:01]

AND THEN WE'D MAKE A PAYMENT WHEN? YOU'D START MAKING CYCLE OF YOUR BONDING, RIGHT? SO IT IS A BOND.

SO YOU'D MAKE TWO INTEREST PAYMENTS A YEAR AND ONE PRINCIPAL PAYMENT.

SO WITHIN 12 MONTHS YOU'D START MAKING PAYMENTS ON THAT.

NOW WITH THAT SAID, THE BOARD DOES ALLOW THEY AT LEAST ENTERTAIN STRUCTURING.

SO IF THERE'S SOME REASON THAT YOU CAN SHOW, LOOK, WE'VE GOT A PREVIOUS BOND THAT'S GOING TO FALL OFF, IT'S GOING TO BE PAID OFF IN THIS TIME FRAME.

WE JUST NEED A LITTLE BIT OF TIME, YOU KNOW, MAYBE TWO YEARS TO PUSH THAT OUT.

NOW, THEY'RE NOT GOING TO LET YOU BACK IN, LOAD ALL THE PRINCIPAL.

RIGHT. BUT THEY COULD VERY WELL LOOK AT YOUR SITUATION AND THEY'RE GOING TO WORK WITH YOUR FINANCIAL ADVISORY FIRM AND SAY, LOOK, WE COULD REALLY USE A COUPLE OF YEARS.

SO INSTEAD OF WITHIN 12 MONTHS, IT COULD BE 24, MAYBE 36 MONTHS BEFORE YOU HAVE TO PAY, MAKE THAT FIRST BIG PRINCIPAL PAYMENT.

IT'S GOOD TO KNOW. AND SO 2025.

YEAH, YEAH, THAT'S WHAT I WAS THINKING.

BUT NORMALLY IT'D BE 12 MONTHS FROM THE CLOSING DATE.

SO IF YOU'RE CLOSING, LET'S SAY IN APRIL, YOU'RE MAKING YOUR FIRST PAYMENT IN APRIL THE FOLLOWING YEAR.

BUT IN ORDER TO DO THAT, YOU'D HAVE TO RAISE RATES EARLIER TO MAKE THAT PAYMENT.

MAKE YOUR RATE ADJUSTMENTS SIX MONTHS EARLIER TO MAKE THAT PAYMENT.

YES. IT'S GOOD TO KNOW.

YEAH. YEAH, I WOULD.

HIGH LEVEL STRATEGY.

WE CAN COME BACK AND REFINE IT.

I THINK YOU'D PROBABLY WANT TO BE DOING YOUR RATE STRUCTURE AHEAD OF WHEN YOU'RE DOING YOUR APPLICATION, AND THEN YOU'D BE ABLE TO START COLLECTING SOME OF THE FUNDS YOU NEED TO BE BE AHEAD OF YOUR PAYMENTS.

FORTUNATELY, AT THAT POINT IN TIME, WE SHOULD HAVE A MUCH BETTER IDEA OF WHAT WOULD BE THE CAPITAL REQUIREMENT AS WELL AS WHAT EVERYTHING ELSE.

SO YOU'D HAVE SOMETHING TO BASE THAT ON.

YEAH. A LOT OF TIKTOK VIDEOS, CHRIS, FOR MARKETING.

[INAUDIBLE] THAT I'M IN THE FACEBOOK OR SOMETHING.

DEBORAH, DO YOU HAVE ANY COMMENTS? THANK YOU. SO THE PRESENTATION IS ALL THE PROJECTS IN TANDEM.

HOW ARE WE GOING TO MOVE FORWARD? HOW ARE WE GOING TO PAY FOR IT? WHAT'S MOST IMPORTANT AND HOW DO WE PICK AND CHOOSE THOSE? AND THE FIRST PROJECT OF THE WASTEWATER IMPROVEMENT PROJECT IS THE SCHNEIDER PROJECT.

SO THAT'S SORT OF SEPARATE, RIGHT? SO THAT'S A SEPARATE CONTRACT THAT WE'RE GOING TO GO OUT, DEVELOP THAT WORK AND GET THAT IMPLEMENTED.

WE'VE COUPLED IT WITH THIS SO THAT HOPEFULLY WE CAN FIND FUNDS FOR THAT PROJECT ALONG WITH WHAT'S BEING APPLIED FOR.

ONE OF THE GOOD THINGS ABOUT OUR PROJECT IS WE CAN PROBABLY OFFSET THE COST OF THAT PROJECT BY ABOUT A THIRD.

YOU'RE RUNNING AT ABOUT 178,000 A YEAR ON YOUR ELECTRICAL USE THERE AT THE PLANT, AND WE THINK WE CAN SAVE YOU NEARLY $100,000 A YEAR ON THAT. SO TO COMPLEMENT CHRIS'S COMMENT ABOUT YOUR UTILITY COST FOR YOUR KW IN THEM, THE CONTRACT THAT YOU'RE IN RIGHT NOW, IT'S ACTUALLY A COST AVOIDANCE GETTING THAT WORK DONE NOW AS WELL BECAUSE YOU WON'T BE USING AS MUCH OF THAT POWER.

SO I WANT YOU TO CONSIDER THAT.

SECOND THING IS THE DEVELOPMENT OF THAT PROJECT IS PROBABLY 6 TO 9 MONTHS, WHICH IS AGAIN IN TANDEM WITH WHAT THEY'RE TALKING ABOUT AS FAR AS HOW LONG IT'S GOING TO TAKE TO GET INFORMATION BACK AND HOW'S IT LOOKING AND WHERE ARE WE GOING TO GO.

SO I WOULD IMAGINE THAT THE SEWER RATES IS GOING TO NEED SOME STRONG CONSIDERATION AND WHERE YOU WANT TO GO WITH THAT AND THEN ALSO PAYING THAT LOAN AS WELL. SO WE'LL ALSO BE WATCHING INTEREST RATES FOR YOU.

AND YOU ARE IN A GOOD POSITION BECAUSE OF YOUR RATING.

WE HAVE A FINANCIAL GROUP THAT WILL CONTINUE TO SHOP TO FIND OUT WHERE THE BEST RATES ARE AND BRING THAT TO YOU.

WE DON'T FINANCE THE PROJECTS, BUT WE'LL HELP YOU IDENTIFY GOOD FUNDING FOR THAT.

BUT I WOULDN'T RECOMMEND PUTTING IT OFF.

AND CECIL, YOU'VE MADE A VERY GOOD ARGUMENT THIS EVENING ABOUT WE'VE PUT THIS OFF FOR SO LONG.

THE ORIGINAL PROJECT THAT I DESIGNED FOR YOU BACK IN 2013 HAD MANY OF THE SAME THINGS WE'RE TALKING ABOUT TODAY.

AND THE CITY'S BEEN ABLE TO ADDRESS SOME OF THAT, BUT A LOT OF IT IS IN YOU'RE IN CRITICAL NEED, YOU KNOW THAT YOU'VE GOT SOME REALLY GOOD TOOLS TO HELP YOU GET THERE.

SO WE PLAN TO SEND OUR CONTRACT, OUR INVESTMENT GRADE AUDIT, WHICH IS GOING TO BE TO DEVELOP THE WORK AND HOPEFULLY HAVE THAT BACK TO YOU BY NOVEMBER, OCTOBER, NOVEMBER.

IF IT'S LESS THAN NINE MONTHS, GREAT.

I'M GOING TO SAY IT'S GOING TO BE THAT NINE MONTHS.

AND A LOT OF THAT, TOO, IS JUST WHAT'S HAPPENING IN OUR ECONOMY.

SO JUST AS A REMINDER, THESE ARE TWO SEPARATE THINGS THAT WE'RE TALKING ABOUT HERE.

BUT WE'RE WANTING TO GO AFTER A COMPREHENSIVE FUNDING OBJECTIVE HERE TO TAKE CARE OF THAT.

SO IF SCHNEIDER ELECTRIC FINDS OTHER FUNDING, THEN WE'LL BRING THAT BACK TO YOU.

THIS IS KIND OF I CALL IT THE WORST CASE, LIKE LET'S PUT IT BEFORE THE WATER DEVELOPMENT BOARD AND THAT WE KNOW WE'RE GOING TO GET FUNDED.

[01:00:06]

AND THERE ARE SOME GRANTS AND REBATES AND THINGS AVAILABLE.

ON THE OTHER PROJECT THAT WE'RE TALKING ABOUT, ESPECIALLY WITH THE RENEWABLES THAT YOU'RE INTERESTED IN.

BUT FOR THIS IN PARTICULAR, FIRST WE'VE GOT TO GET THAT DEVELOPED AND THE $20 MILLION THAT WE'VE IDENTIFIED ALSO CAN BE PICKED APART IF YOUR APPETITE ISN'T FOR THAT.

AND WE'LL TALK ABOUT IT, BUT YOU NEED TO PICK THOSE PROJECTS AND SAY, OKAY, WE'RE GOING TO PUT THESE OTHERS AT RISK AND TAKE THESE NOW OR WE'RE GOING TO GO ABOUT THIS COMPREHENSIVELY. SO.

THANK YOU, CHRIS. THANK YOU.

THANK YOU. LOOKING FOR A MOTION.

I HAVE TO SAY THE BIGGER QUESTION IS HOW MUCH YOU WANT TO BITE OFF.

MY RECOMMENDATION WOULD BE $40 MILLION THAT COVERS COST OF GOODS AND MATERIALS TWO TO THREE YEARS FROM NOW BASED ON CURRENT INFLATION RATES. AND AGAIN, WE CAN SLIM THAT DOWN IF THE ECONOMIES INTEREST RATES HAVE DROPPED AND PRICE OF GOODS SERVICES DROP, WE CAN CERTAINLY NUG THAT DOWN.

I WAS GOING TO START AT 36.33.

THAT'S WHY I SAID 49.

SPLIT THE DIFFERENCE.

WELL, BECAUSE REALLY YOU'RE NOT GOING TO BUY $36 MILLION WORTH OF STUFF.

AND THAT'S TRUE. TWO AND A HALF TO FIVE YEARS, YOU'RE GOING TO BUY 30 MILLION OR 32 MILLION.

AND JUST REMINDER, ALL WE'RE TRYING TO DO RIGHT NOW IS SET A CEILING.

A MOTION. WELL, NO, SET A CEILING THAT WE SEND IT TO TWDB, BECAUSE IF WE'RE BELOW IT, THAT'S FINE.

BUT IF WE NEED MORE.

CAN'T GO BACK. CAN'T GO BACK.

OKAY. YEAH.

MR. MAYOR. I MOVE, WE AUTHORIZE FREESE AND NICHOLS AND THE CITY MANAGER TO GO OUT FOR A PIF SUBMITTAL IN THE AMOUNT OF $40 MILLION FOR THE LISTING THAT WAS PRESENTED TO US TONIGHT WITH A LITTLE BIT OF OVERAGE JUST IN CASE WE HAVE SOME OTHER PROJECTS THAT NEED TO BE ADDRESSED.

I HAVE A MOTION BY MAYOR PRO TEM WRIGHT.

DO I HAVE A SECOND? I WILL SECOND THAT.

I HAVE A SECOND BY COUNCILMAN BOOTH.

ANY FURTHER DISCUSSION? THANK YOU FOLKS, VERY MUCH FOR COMING OUT AND PRESENTING TO US.

THANK YOU, DUSTIN, FOR YOUR TEAM.

THANK YOU, MISS DEBORAH.

THIS IS A BIG BALL THAT WE'RE GOING TO PUSH AND SHOVE, AND IT COULD TAKE MANY YEARS, BUT WE'RE TRYING TO MAKE THE CITY IN A BETTER POSITION INFRASTRUCTURE WISE FOR THE FUTURE.

SO THAT'S ALL WE'RE TRYING TO DO HERE, FOLKS TRY TO MAKE THE INFRASTRUCTURE BETTER THAN WHERE IT IS TODAY.

YES, SIR. THANK YOU, MR. MAYOR.

REMIND I DON'T NEED TO REMIND THE COUNCIL.

I'D LIKE TO REMIND THE PUBLIC THAT WE HAVE SPENT A LOT OF TIME.

OUR CITY STAFF HAS JUST POURED THEIR HEARTS INTO PUTTING THIS TOGETHER.

OUR CONSULTANTS HAVE POURED THEIR SOUL INTO PUTTING THIS TOGETHER, AND THIS IS NOT AN OVERNIGHT DECISION.

SO THANK YOU TO EVERYBODY THAT YOU'VE YOU'VE HELPED US SO FAR.

AND, JOHN, THANK YOU ONLINE AS WELL.

AND YOUR OTHER COUNTERPART, THAT'S ONLINE AS WELL.

THAT'S NOT GOING UNNOTICED.

OKAY. ANY FURTHER DISCUSSION? I'LL CALL FOR THE VOTE. HEARING NONE.

ALL THOSE IN FAVOR SIGNIFY BY SAYING AYE.

AYE. ALL THOSE OPPOSED? SAME SIGN.

THAT MOTION CARRIES.

THANK YOU GUYS SO MUCH.

OKAY. THAT COMPLETES OUR WORKSHOP PORTION OF OUR MEETING.

WE'LL GO INTO EXECUTIVE SESSION.

[EXECUTIVE SESSION]

SECTION 551.072 OF THE TEXAS STATE GOVERNMENT CODE SAW SHOW US GOING TO EXECUTIVE SESSION AT 7:39.

ALL RIGHT. WE ARE, WIN OR LOSE, BACK AT THE TABLE, IT SHOWS WE'RE RECONVENING AT 8:26.

COUNCIL, DO WE HAVE ANYTHING COMING OUT OF EXECUTIVE SESSION? MR. MAYOR, I MOVE WE AUTHORIZE THE CITY MANAGER TO ENTER NEGOTIATIONS FOR THE PURCHASE OF PROPERTY.

WE HAVE A MOTION BY MAYOR PRO TEM WRIGHT.

DO I HAVE A SECOND? SECOND.

SECOND BY COUNCILMAN TOWNSEND.

ANY FURTHER DISCUSSION? HEARING NONE. ALL THOSE IN FAVOR SIGNIFY BY SAYING AYE.

AYE. ALL THOSE OPPOSED? SAME SIGN. MOTION CARRIES AND THAT COMPLETES OUR AGENDA ITEMS. WE ARE NOW IN ADJOURNMENT AT 8:27.

* This transcript was compiled from uncorrected Closed Captioning.