* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:01] WELL, GOOD MORNING. [CALL TO ORDER] MY NAME IS ALISON ALTER AND I'M CHAIR OF THE AUDIT AND FINANCE COMMITTEE. IT IS 9:30 AM ON DAY 26, AND I WILL CONVENE THE AUDIT AUDIT AND FINANCE COMMITTEE, UH, VIRTUALLY THIS MORNING. UM, WE ARE GOING TO BEGIN WITH CITIZENS COMMUNICATION. WE HAVE ONE SPEAKER, UM, MR. PAUL ROBBINS COUNSEL, CAN YOU HEAR ME? GOOD MORNING. GOOD MORNING CHAIR. UH, COUNSEL, I'M HERE TO ASK YOU TO POSTPONE ITEM 55 ON NEXT WEEK'S AGENDA, WHICH IS A REVISION OF THE CITY'S ENERGY CODE. I OFFER TWO COMPELLING REASONS. FIRST, THE PEOPLE YOU HAVE APPOINTED TO REVIEW POLICY ISSUES LIKE THIS, THE ELECTRIC UTILITY COMMISSION AND THE RESOURCE MANAGEMENT COMMISSION HAVE LARGELY BEEN LEFT OUT OF THE PROCESS. AS FAR AS I CAN TELL, THEY WERE NOT INVITED TO BE STAKEHOLDERS DURING THE PUBLIC COMMENT PERIOD, NOR HAS THE COUNCIL EVEN BEEN BRIEFED AHEAD OF NEXT WEEK'S MEETING THIS MARRIAGE, YOUR COMMITTEE'S ATTENTION BECAUSE OF THE WAY PUBLIC PROCESS WAS ABUSED. THE ELECTRIC UTILITY COMMISSION WAS NOT ALLOWED TO MAKE RECOMMENDATIONS. AND THE RESOURCE MANAGEMENT COMMISSION WAS ONLY ALLOWED A CURSORY REVIEW. IT WAS SO CURSORY. IN FACT, THAT TWO MEMBERS OF THIS COMMISSION WOULD NOT ENDORSE THE CODE BECAUSE THEY WERE LARGELY LEFT OUT OF THE PROCESS AND RMC COULD NOT SUSTAIN ENOUGH VOTES TO RECOMMEND IT TO COUNCIL. THE OTHER REASON TO DELAY APPROVAL IS PROBLEMS WITH THE CODE ITSELF. I AM PARTICULARLY CONCERNED ABOUT THE WAY THE REVISED CODE HANDLES ALL ELECTRIC WATER HEATING. MY SUSPICION IS THAT THE NEW CODE, THE NEW ENERGY CODE COULD ACTUALLY INCREASE ENERGY USE IN SOME, ALL ELECTRIC HOMES COMPARED TO THE CURRENT CODE AND THE PEOPLE THAT WILL SUFFER THE MOST ARE APARTMENT DWELLERS WHO GENERALLY HAVE HALF THE INCOME OF HOMEOWNERS. I AM TRYING TO CONFIRM THIS, BUT MY PUBLIC INFORMATION REQUESTS RELEVANT TO THE SUBJECT HAS NOT BEEN ANSWERED YET, EVEN IN SITUATIONS WHERE THE NEW CODE DOES SAVE SLIGHTLY MORE ENERGY THAN BEFORE IT IS HARDLY A LEADING EXAMPLE FOR THE COUNTRY TO FOLLOW. THERE WILL BE NO EARTH SHATTERING CRISIS. IF APPROVAL IS DELAYED. AND I AM AGAIN ASKING YOU TO POSTPONE ITEM 55 UNTIL YOUR TWO COMMISSIONS CAN ADEQUATELY REVIEW IT. I APPRECIATE YOUR TIME. THANK YOU, MR. ROBINS. APPRECIATE THE HEADS UP ON THAT ITEM. UM, WE ARE NOW GOING TO CONSIDER THE MINUTES. [1. Approve the minutes of the Audit and Finance meeting of April 28, 2021.] DO I HAVE A MOTION TO APPROVE THE MINUTES? MAY I ADD THAT THERE'S APPROVAL SECONDED BY COUNCIL MEMBER POOL? AND I SHOULD NOTE THAT I'M ALSO JOINED ON THE DIASPORA BY COUNCIL MEMBER TOVO, UH, COUNCIL MEMBER. I CAN SEE KELLY WAS NOT ABLE TO JOIN US THIS MORNING. UM, LOOKS LIKE COUNCIL MEMBER HAD RUN. MADISON IS NOT ON THE COMMITTEES, ALSO, UM, JOINED US FOR THE CALL. WELCOME. UM, SO SEEING NO OBJECTIONS, UH, THOSE MINUTES WILL BE APPROVED. UM, WE WILL NOW MOVE [2. Fiscal Year 2020 Single Audit Report by Deloitte & Touche LLP, the City's external auditor.] TO, UM, A PRESENTATION FROM OUR FINANCE DEPARTMENT AND DELOITTE. UM, THIS IS OUR FISCAL YEAR 2020 SINGLE AUDIT REPORT. UM, THIS IS ONE OF THE FUNCTIONS THAT THE AUDIT AND FINANCE COMMITTEE HAS, IS TO HERE, UM, THESE AUDITS AND IS PART OF OUR AUDIT, UM, PROCEDURE. SO I WILL, UH, RECOGNIZE DIANA THOMAS. GOOD MORNING, COUNCIL MEMBERS. I'M DIANA THOMAS, INTERIM, DEPUTY CHIEF FINANCIAL OFFICER AND MARIA. YOU GET OUR INTERIM CONTROLLER WILL BE LEADING THE PRESENTATION TODAY. THANK YOU, DIANA. UH, CAN WE BRING UP THE PRESENTATION PLEASE? THANK YOU. GOOD MORNING, MAYOR AND COUNCIL MEMBERS. I'M MARIA INTERIM CITY CONTROLLER. I'M HERE WITH BLAKE ROGERS FROM DELOITTE AND TOUCHE, THE CITY'S EXTERNAL AUDITOR TO PRESENT THE RESULTS OF THE FISCAL YEAR 2020 SINGLE AUDIT. I'D LIKE TO BEGIN BY THANKING DELOITTE FOR THEIR PROFESSIONAL AND THOROUGH MANNER IN WHICH THEY CONDUCTED THIS AUDIT, UM, CITY STAFF, ESPECIALLY THE STAFF IN THE CONTROLLER'S OFFICE, GOVERNMENTAL ACCOUNTING DIVISION AND CITY DEPARTMENTS WITH GRANTS AUDITED FOR THIS REPORT FOR THEIR MANY HOURS OF DEDICATED SERVICE SOURCE OF COMPLETION OF THE SINGLE AUDIT, THE MAYOR AND COUNCIL MEMBERS FOR YOUR CONTINUED SUPPORT OF THE CITY'S GOAL [00:05:01] OF EXCELLENCE. IN ALL ASPECTS OF FINANCIAL MANAGEMENT, THE SINGLE AUDIT WAS ISSUED ON MAY 24TH, 2021, ABOUT FIVE WEEKS IN ADVANCE OF THE REGULAR JUNE 30TH, 2021 REPORTING DEADLINE AND WELL IN ADVANCE OF THE SIX MONTHS SINGLE AUDIT EXTENSION DEADLINE DUE TO THEIR COVID 19 PANDEMIC. UH, BLAKE ROGERS FROM DELOITTE WILL NOT TAKE OVER THE PRESENTATION FOLLOWING THEIR PRESENTATION. I'LL PROVIDE A BRIEF RESPONSE FROM MANAGEMENT RELATED TO THE FINDING. I APPRECIATE THAT. AND GOOD MORNING THERE IN COUNCIL MEMBERS, UH, I'M BLAKE ROGERS, A PARTNER WITH DELOITTE. I WORKED DIRECTLY WITH RHEEM SAMRA AND PROVIDING THE EXTERNAL AUDIT SERVICES FOR THE CITY FOR THE FISCAL YEAR ENDING SEPTEMBER 30TH, 2020 REAM HAD PREVIOUSLY PRESENTED TO YOU ON THIS COMMITTEE ON APRIL 28TH, 2021, AND THE RESULTS OF THE AUDIT OF THE CITY'S FINANCIAL STATEMENTS. BUT IN ADDITION TO THE AUDIT OF THE CITY'S FINANCIAL STATEMENTS, AS MARIA MENTIONED, WE'RE ALSO ENGAGED TO PERFORM COMPLIANCE OVER THE CITY STATE AND FEDERAL AWARD PROGRAMS. AND TODAY I'M PRESENTING TO YOU THE RESULTS OF THOSE AUDITS ON THE NEXT, UH, PAGE OF OUR PRESENTATION. UM, THE CITY IS REQUIRED FIRST TO UNDERGO BOTH A STATE AND FEDERAL GRANT COMPLIANCE AUDIT BECAUSE THE CITY EXPENDS MORE THAN $750,000 IN FEDERAL AWARDS ON THIS IN AN ANNUAL BASIS AND EXPENDS MORE THAN $750,000 OF STATE GRANT AWARDS ON AN ANNUAL BASIS. SO THUS BOTH AUDITS ARE REQUIRED, UH, FOR THE FEDERAL PROGRAMS, WE PERFORMED OUR AUDIT UNDER A GENERALLY ACCEPTED AUDITING STANDARDS, GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS AND IN COMPLIANCE WITH THE REQUIREMENTS OF UNIFORM GRANT GUIDANCE. WE DID ISSUE OUR REPORT, AS MARIA SAID, ON MAY 24, 2021, WE ISSUED AN UNMODIFIED OPINION. THAT'S THE CLEAN OPINION, THAT'S THE AICP LANGUAGE FOR THE APPENDANT OPINION IN THIS CASE? UM, LIKE, WELL, AS WITH THE STATE PROGRAMS, WE PERFORMED OUR AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, GOVERNMENT AUDITING STANDARDS, AND THE REQUIREMENTS OF THE STATE OF TEXAS UNIFORM GRANT MANAGEMENT STANDARDS. IN THIS CASE, WE ALSO ISSUED OUR OPINION ON THAT SAME DAY AND ALSO ISSUED AN UNMODIFIED OR CLEAN OPINION ON THE STATE PROGRAMS ON THE NEXT SLIDE. UM, WE'LL PROVIDE A LITTLE BIT MORE DETAILED TO THE COMMITTEE AND COUNCIL ABOUT WHAT WE HAVE, UH, WHAT WE AUDITED THIS YEAR FOR THE FEDERAL PROGRAMS, UNIFORM GRANT GUIDANCE, PRESCRIBES TO US AS AUDITORS, THE PROCESS THAT WE HAVE TO USE TO SELECT WHICH PROGRAMS THAT WE'RE GOING TO TEST AND AN INDIVIDUAL YEAR, AND THIS PAGE, UH, GIVES YOU INFORMATION ON WHICH PROGRAMS, WHICH WERE SUBJECT TO OUR PROCEDURES THIS YEAR, WHICH PROGRAMS WERE MAJOR PROGRAMS ESSENTIALLY. UH, SO YOU CAN SEE HERE THAT THE CITY EXPENDED A TOTAL OF $219 MILLION OF FEDERAL AWARDS DURING FISCAL YEAR 20 AS A RECORD YEAR FOR THE CITY OF AUSTIN. UM, AND THE MAJOR PROGRAMS LISTED ARE LISTED BELOW. I WANT YOU TO KNOW THAT THE CORONAVIRUS AID RELIEF AND ECONOMIC SECURITY ACT SPECIFICALLY THE CORONAVIRUS RELIEF FUND WAS THE ONE OF OUR MAJOR PROGRAMS THAT WE SUBJECTED TO TESTING THIS YEAR, TOTALING $137 MILLION OF THE CITY'S EXPENDITURES DURING FISCAL YEAR 20. SO CERTAINLY AN EXTRAORDINARY INCREASE IN AWARD SPENDING DUE TO THE CORONAVIRUS RELIEF FUND THAT MAKES UP APPROXIMATELY 62% OF THE CITY'S EXPENDITURES THIS YEAR, AND THE GRANT SUBJECTED TO TESTING AND TOTAL FOR THE FEDERAL PROGRAMS MAKE UP OVER 71% OF THE TOTAL EXPENDITURES FOR THIS YEAR FOR FEDERAL AWARDS ON THE NEXT SLIDE, YOU'LL SEE A BREAK, THE SAME BREAKDOWN THIS TIME, LOOKING AT THE STATE PROGRAMS, UH, SIMILARLY THE UNIFORM GRANT MANAGEMENT STANDARDS FROM THE STATE OF TEXAS ALSO PRESCRIBED TO US AS AUDITORS, HOW WE SHOULD GO ABOUT SELECTING, WHICH PROGRAMS TO TEST AND LIST PROVIDES YOU WITH THE PROGRAMS THAT WERE SUBJECT TO TESTING OR IDENTIFIED AS MAJOR PROGRAMS FOR TESTING DURING FISCAL YEAR 20, UH, FOR REFERENCE THESE PROGRAMS REPRESENT APPROXIMATELY 41% OF THE TOTAL EXPENDITURES OF 4.3 MILLION THAT THE CITY INCURRED FOR STATE AWARDS DURING FISCAL YEAR 20. AND ON THE NEXT PAGE, WE DID, UM, ISSUE OUR CLEAN OPINION AS I MENTIONED, BUT WE DID IDENTIFY ONE COMPLIANCE FINDING AND RELATED CONTROL DEFICIENCY THAT WE WANTED TO BRING TO YOUR ATTENTION. WHEN TESTING A SAMPLE OF EXPENDITURES FOR THE CORONAVIRUS RELIEF FUND, WE NOTED THAT FIVE OF OUR SAMPLES TOTALLING $74,000, UH, AND 30 $774,036 WERE FOR SERVICES THAT THE CITY PROVIDED TO NEARBY GOVERNMENTAL ENTITIES THAT WERE REIMBURSABLE TO THE CITY FROM THOSE ENTITIES. AND OUR INTERPRETATION OF THE CORONAVIRUS RELIEF ON REQUIREMENTS IS THAT THE CITY SHOULD ONLY CLAIM EXPENDITURES THAT THAT HAD EXPENDED AND NOT CLAIM EXPENDITURES [00:10:01] THAT WOULD BE REIMBURSED, UH, FROM OTHER SOURCES. SO WE CONSIDERED THIS TO BE NON-COMPLIANCE WITH THE CORONAVIRUS RELIEF FUND REQUIREMENTS AND A SIGNIFICANT DEFICIENCY IN THE CITY'S CONTROLS OVER THE COMPLIANCE, UH, OVER ALLOWABLE COSTS FOR THIS SPECIFIC PROGRAM. I WILL ALSO MENTION HERE THAT IN OUR FINDING, WE NOTE THAT CITY MANAGEMENT, UH, QUICKLY RESEARCHED THIS ISSUE. UH, ONCE IT WAS IDENTIFIED, REMOVED $2.2 MILLION OF COSTS FROM THE PROGRAM AND REPLACED IT WITH $2.2 MILLION OF COSTS THAT WERE ALLOWABLE TO THE PROGRAM VERY QUICKLY, WE WERE ALSO AS PART OF OUR AUDIT PROCEDURES, ABLE TO TEST THOSE REPLACEMENT $2.2 MILLION OF COSTS AND HAD NO ADDITIONAL FINDINGS RELATED TO THAT ADDITIONAL $2.2 MILLION. THE CITY WAS ABLE TO CLAIM ON THE LAST SLIDE, I WON'T TOUCH ON IT. IT JUST PROVIDES THE DEFINITION OF A SIGNIFICANT DEFICIENCY, WHICH I MENTIONED THAT THIS, THE FINDING THAT ON THE PREVIOUS SLIDE WE HAD NOTED IS CONSIDERED A SIGNIFICANT DEFICIENCY RATHER THAN A MATERIAL WEAKNESS. SO NOT SOMETHING THAT WE FELT LIKE WAS MATERIAL TO THE PROGRAM OVERALL, BUT CERTAINLY SOMETHING THAT WE FELT LIKE MEREDITH THE ATTENTION OF THIS COMMITTEE, UH, WITH THAT, I'D BE HAPPY TO TAKE ANY QUESTIONS THAT YOU HAVE ABOUT OUR SINGLE AUDIT PROCESS. THANK YOU, MR. ROGERS, ON, UM, YOU KNOW, REALLY PROUD OF HOW OUR STAFF HAS HANDLED, UH, THE ENORMOUS PRESSURES OF THE PANDEMIC AND MANAGING ALL OF THE FINANCIAL, UM, YOU KNOW, STEPS THAT WERE NEEDED IN ORDER FOR US TO BE ABLE TO EFFECTIVELY USE THE FUNDS ACCORDING TO THE GUIDELINES. SO, SO THANK YOU FOR THAT. UM, COLLEAGUES, DOES ANYONE HAVE ANY QUESTIONS, MAYOR ADLER WHO'S THAT POWERPOINT POSTED SOMEWHERE? I COULDN'T FIND IT IN BACKUP. IT MAY HAVE COME IN LATER. I MAY HAVE MISSED IT OR MAY HAVE BEEN EMAILED OUT THE MAYOR. I SENT IT YESTERDAY TOO TO THE COMMITTEE MEMBERS, BUT I ALSO, UM, UH, MENTIONED THAT IT'S GOING TO BE POSTED TO THE CITY'S WEBSITE AFTER THIS MEETING. OKAY. THANK YOU. MAY I BELIEVE THAT ANGIE ALSO RE SENT IT THIS MORNING. THANK YOU, THE COMMITTEE. ANY OTHER QUESTIONS ON THIS? UM, SO YOU HIT TO, DO YOU WANT TO RESPOND TO THAT? YES. YES. IF WE CAN GO TO THE, TO THE SLIDE WITH THE CITY'S RESPONSES, UM, AS, AS, UM, BLAKE MENTIONED, UH, DELOITTE DID, UH, IDENTIFY ONE SIGNIFICANT DEFICIENCY RELATED TO, UM, TO THE SINGLE AUDIT. UM, SO GO A FEW PAGES DOWN TOWARDS THE END. ONE MORE, ONE MORE. OKAY. THANK YOU. UM, DELOITTE DID IDENTIFY ONE SIGNIFICANT DEFICIENCY, UM, ESSENTIALLY, UM, EXPENDITURES THAT RELATED TO SERVICES PROVIDED TO, UM, UM, WITH AN INTER LOCAL AGREEMENT THAT WAS GOING TO BE REIMBURSED TO THE CITY, UM, WERE PROCESSED USING MEMOS TASK ORDERS AND MEMORY TASK ORDERS ARE ESSENTIALLY A MECHANISM, UM, USED BY THE CITY TO AGGREGATE COSTS FOR A SPECIFIC PURPOSE. UM, SO SOME OF THESE EXPENDITURES WERE RELATED TO IN OUR LOCAL AGREEMENTS THAT WE HAD WITH OUTSIDE ENTITIES THAT WERE GOING TO BE REIMBURSED BY THOSE OUTSIDE ENTITIES. UM, AND ONCE WE WERE MADE AWARE OF THE UNALLOWABLE EXPENDITURES, OUR STAFF PERSON GETS REMOVED ALL EXPENDITURES THAT YOU WILL USING MEMO TASK ORDERS, REGARDLESS OF WHETHER, WHETHER OR NOT, UM, THEY WERE REIMBURSABLE FROM OUTSIDE SOURCES. AND THAT'S THE 2.5 OR 2.2 MILLION THAT BLAKE IS REFERRING TO, UM, WHILE NOT ALL EXPENDITURES USING THE MEMO TASK ORDERS WERE REIMBURSABLE FROM OUTSIDE SOURCES. WE PROCEEDED TO GO AHEAD AND REMOVE ALL OF THEM, UH, AS, UH, OUT OF AN ABUNDANCE OF CAUTION TO MAKE SURE THAT WE WEREN'T INCLUDING EXPENDITURES THAT WERE NOT ALLOWABLE UNDER THE CRF. UM, AND SO WE, WE DO CONCUR WITH THE FINDING, BUT WE HAVE PUT A PROCESS IN PLACE GOING FORWARD TO MAKE SURE THAT THIS DOESN'T OCCUR WITH ANY FUTURE, UM, COVID-19 RELATED CLASS CHARGED TO THE US DEPARTMENT OF TREASURY. WE'VE ADDED AN ADDITIONAL LEVEL OF LEVEL OF REVIEW TO MAKE SURE WE'RE, UH, WE'RE COMPLIANT WITH US. AND I HAVE A QUESTION WITH RESPECT TO, YOU KNOW, THE CORONAVIRUS RELIEF FUNDS OR ONE SET OF FUNDS THAT, UM, WE RECEIVED FROM THE FEDERAL GOVERNMENT, BUT THEN THERE ANOTHER BLOCK OF FUNDS THAT ARE REIMBURSEMENTS FROM FEMA, UM, AND UNDERSTAND THERE'S A PROCESS BY WHICH FEMA GRANTS US THOSE. UM, BUT HOW, HOW DOES THAT GET AUDITED OR HOW DOES THAT PROCESS, UM, GET REVIEWED? SO, [00:15:02] YES, SO JUST TO SPEAK A LITTLE BIT ABOUT THE FEMA PROCESS, AS WE SUBMIT THOSE EXPENDITURES TO FEMA FOR REIMBURSEMENT, THEY WOULD BECOME ELIGIBLE EXPENDITURES UNDER, UNDER THE SINGLE AUDIT, AND THEN THEY WOULD BE SUSCEPTIBLE TO AUDIT FOLLOWING THE GUIDELINES THAT DELOITTE WOULD, WOULD, WOULD FOLLOW UNDER THE AUDIT RULES, UH, TO MAKE SURE THAT WE GET THE APPROPRIATE COVERAGE AND THEY MAY OR MAY NOT BE SELECTED FOR AUDIT DEPENDING ON WHAT PROGRAMS DELOITTE SELECTS THROUGH THAT AUDIT PROCESS. AT THIS STAGE, WE ARE STILL REVIEWING ALL OF OUR EXPENDITURES, TRYING TO MAINTAIN THAT FLEXIBILITY, UM, UH, FUNDING AND SELECTING THE MOST APPROPRIATE FUNDING SOURCE FOR THE, THE, UM, FOR THESE COSTS. AND WE ARE WORKING WITH OUR CONSULTANTS TO DETERMINE WHICH EXPENDITURES ARE BEST SUBMITTED UNDER FEMA. SO WE'RE STILL WORKING THROUGH THAT PROCESS AND SUBMITTING ITEMS TO FEMA AS WE GO. BUT IN FISCAL YEAR 2020, WE HAD NOT SUBMITTED ANY, UH, CORONAVIRUS EXPENDITURES TO FEMA AT THAT POINT. OKAY. SO THESE ARE ALL FROM THE EXPENDITURES THROUGH OCTOBER UP TO OCTOBER 1ST, AND THEN, UM, YOU HADN'T AT THAT POINT SUBMITTED THE FEMA REIMBURSEMENTS. AND SO YOU WOULDN'T HAVE CHOSEN THE FEMALE FUNDS TO BE REVIEWED AT THIS POINT IN TIME FOR THIS AUDIT. THAT IS CORRECT. UM, THE, THE FEDERAL GOVERNMENT REQUIRES THAT SIMA AWARDS NOT BE PRESENTED AND SUBJECTED TO AUDIT AS PART OF THIS PROCESS UNTIL FEMA HAS APPROVED ALL FINAL POS, UH, FROM THE CITY THAT DID NOT OCCUR DURING FISCAL YEAR 20, UH, HOPEFULLY WILL OCCUR IN FISCAL YEAR 21 OR, OR QUICKLY DIANE, I HOPE BUT, UH, BUT YEAH, SO THOSE WILL LIKELY BE, UH, INCLUDED IN THE 21 AUDIT. OKAY. SO, SO MOVING FORWARD, WE WOULD ANTICIPATE WHEN YOU COME BACK TO REVIEW FISCAL YEAR 21, THERE WILL BE POTENTIALLY ADDITIONAL, UM, CARES MONEY AS WELL AS ARPA MONEY THAT WILL GET AUDITED, BECAUSE THAT WOULD OBVIOUSLY BE THE THING THAT IS THE LARGEST AMOUNT AND THE MOST NEW FOR US. SO WE WOULD WANT TO HAVE OUR AUDITORS LOOKING AT TO MAKE SURE THAT WE WERE DOING THAT, UM, ALL AS WE NEEDED TO DO. AND THEN THE FEMA MAY OR MAY NOT COME WITH THE FISCAL YEAR 21 BECAUSE WE MAY NOT BE DONE WITH ALL OF THOSE REIMBURSEMENTS FROM CENTRAL LONG. UH, BUT WE ARE WORKING WITH CONSULTANTS TO HELP US TO NAVIGATE THAT PROCESS, TO BRING DOWN AS MUCH OF THOSE FUNDS AS POSSIBLE. UM, WHILE WE'RE ON THE SUBJECT, I WILL JUST SAY, I REALLY DO HOPE THAT WE WILL BE ABLE TO GET REIMBURSED FOR THE TESTING COSTS. UM, THAT REIMBURSEMENT AMOUNT SEEMS PARTICULARLY LOW, UM, IN WHAT WE'VE BEEN, WHAT WE'VE BEEN SEEING, UM, AND REALLY LIKE US TO SEE IF WE CAN GET THOSE, UM, THE UNIVERSE NOW FOR THE STORM. AGAIN, THIS WOULDN'T BE, THIS WOULD BE COMING IN FISCAL YEAR 21 THEN, UM, DO WE COUNT THE STORM AND THE PANDEMIC FEMA, UM, PROCESSES SEPARATELY, OR ARE THEY ALL WRAPPED UP TOGETHER AT THIS POINT, THEY'RE GOING TO BE SEPARATE, BUT THEY FOLLOW THE SIMILAR PROCESS THAT WE FOLLOW FOR, FOR THE FEMA CORONAVIRUS RESPONSE. SO WE WERE GOING TO AGGREGATE ALL THE COSTS AND MAKE SURE WE HAVE EVERYTHING TOGETHER IN A PACKET. AND BEFORE, AFTER WE SUBMIT IT TO FEMA, THAT'S WHEN WE'LL ADD IT TO, UM, TO THE SINGLE AUDIT. OKAY. THANK YOU. UM, DO ANY OF THE COMMITTEE MEMBERS OR COUNCILMAN BARBARA MADISON HAVE QUESTIONS, COUNCIL MEMBER TOPO, JUST A QUICK ONE. THANK YOU FOR THE PRESENTATION. UM, CAN YOU HELP US UNDERSTAND THE EXTENT TO, I, IT SOUNDED AS IF SOME COSTS WERE REIMBURSED WHEN THE SIGNIFICANT, UM, SORRY, I'VE FORGOTTEN THE TERMINOLOGY WHEN THEY, WHEN IT WAS NOTED THAT SOME, UH, SOME COSTS HAD BEEN INCLUDED THAT WERE DUE TO, THAT WERE BEING REIMBURSED BY OTHER ENTITIES AND THE CITY MADE THE ADJUSTMENT. UM, I THINK ONE OF YOU EXPLAINED THAT, THAT IT ALSO CAPTURED SOME COSTS THAT WEREN'T REIMBURSED BY OTHER ENTITIES. AND DO YOU HAVE SOME SENSE OF THE SCALE OF WHAT THE, THE TOTAL AMOUNTS WERE OF COSTS THAT WERE NOT, THAT WERE NOT REIMBURSED BY OTHER ENTITIES, BUT WERE EXCLUDED FROM THE CARES DUE TO THE TIMING OF THE AUDIT? WE DIDN'T GO THROUGH THAT DETAILED TO MAKE THAT ANALYSIS, BUT WE DID HAVE ELIGIBLE EXPENSES THAT WE KNEW FOR A FACT, WE'RE NOT GOING TO CREATE ISSUES AND WE'RE GOING TO BE ALLOWABLE UNDER THE CARES, CARES ACT. UM, SO WE JUST WENT AHEAD AND MOVED, ELIGIBLE COSTS OVER TO THE CARES, UM, CARES FUND. SO THAT WAY WE COULD MAKE SURE THAT ALL EXPENSES THAT WERE BEING CHARGED TO THE CORONAVIRUS [00:20:01] WERE ELIGIBLE EXPENSES. UM, AND THESE WERE ALL RELATED TO PUBLIC SAFETY WAGES. SO WE HAVE PLENTY OF ELIGIBLE WAGES THAT WE COULD MOVE OVER TO, TO THE CARES FUND, BUT WE DID NOT HAVE THAT BURDEN. I SEE. ARE THERE, ARE THERE ELIGIBLE EXPENSES THAT ARE NOT BEING REIMBURSED NOW BECAUSE THEY WERE REMOVED? I MAY HAVE MISUNDERSTOOD WHAT YOU WERE NOW. SO OUT OF THE, ALL OF THE FUNDS THAT WE RECEIVED UNDER THE CORONA VIRUS RELIEF FUND, WE WERE ABLE TO, UM, RECEIVE EXPEND ALL OF THE, ALL OF THE EXPENSES FOR GRANTED. SO THANK YOU VERY MUCH. I THINK THAT WAS NOT BUILT. YEAH, THANK YOU VERY MUCH. AND JUST AS AN FYI, UM, ABOUT A HUNDRED, 137 MILLION OF THE CORONAVIRUS RELIEF FUND WAS EXPENDED IN FISCAL YEAR 2020, AND THEN THE REMAINDER, WHICH I THINK IT WAS 37 MILLION EXPENDED IN FISCAL YEAR 2021. SO THAT'S GOING TO BE CAPTURED IN THE FISCAL YEAR 2021 SINGLE ONE. AND DOES THE SINGLE AUDIT COVER, UM, THE CARES MONEY THAT WENT TO THE AIRPORT CARE'S MONEY THAT WENT TO THE AIRPORT IS INCLUDED ON THE SOFA. UM, THE C BECAUSE OF THE SELECTION PROCESS THAT THE FEDERAL GOVERNMENT MANDATES, WE DID NOT HAVE TO TEST THAT PORTION OF FUNDING THIS PARTICULAR YEAR. OKAY, GREAT. WELL, THANK YOU. WE APPRECIATE, UM, SEEING YOU DO WE NEED TO TAKE ANY KIND OF MOTION TO ACCEPT THE AUDITOR OR ANYTHING LIKE THAT. OKAY, GREAT. WELL, UH, THANK YOU, MR. ROGERS FOR BEING WITH US. THANK YOU, MRS. CHEESECAKE. OKAY. AND MS. THOMAS, UM, I THINK SOME OF YOU MAYBE, UM, STAYING WITH US FOR SOME OF THE NEXT ONES. UM, SO COLLEAGUES, WE ARE NOW ACTUALLY GOING TO MOVE TO THE ABLE ITEM. UM, THE AIRPORT STAFF HAVE ASKED IF THEY CAN GO A LITTLE BIT EARLIER BECAUSE THEY HAD ANOTHER MEETING THAT THEY NEEDED TO ACCOMMODATE. WE CAN MOVE THEM OVER. UM, I WILL JUST ACKNOWLEDGE THAT WE ARE JOINED BY COUNCIL MEMBER OF AS WELL. GOOD MORNING. SO THAT TABLE ITEM IS ITEM [5. Discuss issues related to Austin-Bergstrom Landhost Enterprises, Inc. (ABLE) and the operations and financial information of the Hilton Hotel at Austin-Bergstrom International Airport.] FIVE, DISCUSS ISSUES RELATED TO AUSTIN BERGSTROM LAND HOST ENTERPRISES, INC ABEL, AND THE OPERATIONS AND FINANCIAL INFORMATION OF THE HILTON HOTEL AT AUSTIN BERGSTROM INTERNATIONAL AIRPORT. UM, WE HAVE TWO ITEMS, UM, RELATED TO APRIL ON OUR AGENDA COUNCIL AGENDA NEXT WEEK. AND, UM, THE AIRPORT STAFF HAVE ASKED TO SPEAK WITH US IN ADVANCED IN OUR COMMITTEE. UM, GOOD MORNING, MS. THOMPSON, ARE YOU LEADING US OFF? I'M GOING TO KICK IT OFF THIS MORNING. OKAY, WELCOME. THANK YOU. AND THANK YOU VERY MUCH TO THE COMMITTEE AND THE ATTENDEES. MY NAME IS TRACY THOMPSON. I'M SORRY. CAN WE PUT THE POWERPOINT UP, PLEASE? HERE WE GO. AND THE NEXT SLIDE PLEASE. OKAY. HI, MY NAME IS TRACY THOMPSON. I AM, I HAVEN'T MET A LOT OF YOU YET. I HAVE BEEN WITH THE CITY OF AUSTIN DEPARTMENT OF AVIATION FOR ABOUT 10 MONTHS. NOW MY POSITION IS AIRPORT CHIEF, OFFICER ADMINISTRATIVE AND EXTERNAL AFFAIRS, ALSO INTERIM AIRPORT, CHIEF OFFICER FOR OUR DEVELOPMENT PROGRAM. AND, UH, MORE RECENTLY I'VE BECOME THE VICE PRESIDENT OF THE BOARD OF DIRECTORS OF THE ABL CORPORATION. SO THAT'S WHO I AM. AND I'M JOINED TODAY BY MY COLLEAGUE AT THE DEPARTMENT OF AVIATION RAJIV THOMAS WHO'S, OUR AIRPORT, DEPUTY CHIEF OF FINANCE. WE HAVE A VERY SHORT PRESENTATION THIS MORNING, UH, FOR THE BENEFIT OF THE COMMITTEE. IT'S BASICALLY FOCUSED ON THE TWO RCAS THAT ARE PENDING FOR CITY COUNCIL MEETING ON JUNE THE THIRD RELATED TO THE HILTON HOTEL REZ RESILIENCY PROGRAM. SO WE WANTED TO UPDATE YOU, UH, AND ANSWER ANY QUESTIONS THAT THE COMMITTEE MAY HAVE REGARDING THESE TWO RCA ACTION ITEMS, KNOWING THAT WE ARE PLEASED TO COME BACK TO THIS COMMITTEE AND TO COUNCIL IN THE FUTURE TO TALK ABOUT OTHER ITEMS RELATED TO THE ABEL HOTEL ENTERPRISE PHASE, TO DO THAT IN THE FUTURE. SO WE'RE GOING TO TRY TO BE SUCCINCT TODAY OR THIS COMMITTEE'S BENEFIT. UM, NEXT SLIDE PLEASE. I WAS ASKED, UH, WHEN I JOINED THE AIRPORT LAST SUMMER, UM, I WON ONE OF MY FIRST JOBS WAS TO COME UP WITH A PROGRAM ALONG WITH MY COLLEAGUES AND TEAM. THIS WAS NOT ME ALONE. OUR TEAM WAS ASKED TO PUT TOGETHER A, A FINANCIAL ANALYSIS OF THE HOTEL OPERATIONS IN A COVID ENVIRONMENT, SIMILAR TO WHAT WE HAD TO DO AT THE AIRPORT FOR OUR AIRLINES OR RENTAL CARS OR CONCESSIONAIRES EVERY BUSINESS AT THE AIRPORT WAS STRUGGLING AS A RESULT OF THE IMPACTS OF COVID. SO WE FIRST DUG INTO THE HOTEL AND ITS OPERATIONS, UM, MAINLY FROM A FINANCIAL STANDPOINT TO LOOK AT WHAT TYPE OF BUSINESS CONTINUITY PROGRAM COULD WE PUT TOGETHER TO HELP SUSTAIN THIS ASSET OF THE CITY OF AUSTIN THROUGH THE PANDEMIC CRISIS SITUATION. UM, THROUGH THAT PROCESS OF LOOKING AT HOW WE COULD SUSTAIN THE HOTEL ENTERPRISE, [00:25:01] WE ALSO UNCOVER THAT THERE WERE SOME GOVERNANCE ISSUES AND SOME CLEANUP THAT WE NEEDED TO DO, UM, WITH RESPECT TO ARTICLES OF INCORPORATION AND BYLAWS. AND SO, UM, THOSE ACTION ITEMS HAVE PREVIOUSLY COME TO THE COUNCIL HAD BEEN APPROVED. SO WHAT'S LEFT TO BE, UM, RESOLVED IS TO, UM, GET APPROVAL FOR THE AMENDMENT, TO OUR BYLAWS, FOR THE ABEL CORPORATION THAT ACCURATELY REFLECT WHAT THE ARTICLES OF INCORPORATION, UM, UH, DESIGNATE. AND THE SECOND COMPONENT IS THE LOAN AGREEMENT. THE LOAN AGREEMENT IS A CRITICAL COMPONENT OF THE AIRPORTS, UH, PROGRAM FOR THE RESILIENCY OF THE AUSTIN HOTEL AT THE AIRPORT. SORRY. SO FOR A LITTLE BIT OF CONTEXT, AND I'M GOING TO TURN THE MIC OVER TO RAJEEV HERE IN JUST A SECOND, FOR THOSE WHO MIGHT NOT BE FAMILIAR. UM, ABEL, WHICH IS THE ACRONYM FOR AUSTIN BERGSTROM FROM LAND HOUSE ENTERPRISES WAS DEVELOPED BY THE CITY OF AUSTIN IN 1998 FOR THE PURPOSE OF THE, UM, HOTEL AT THE LOCATED AT THE AIRPORT PROPERTY. SO THE CORPORATION ACTUALLY OPERATES THIS HOTEL. THESE ARE THE PRIMARY CONTRACTS FOR HOTEL OPERATIONS. THERE IS A SEPARATE FRANCHISE AGREEMENT FROM THE MANAGEMENT AGREEMENT. SO THE BRAND IS HILTON, UH, THROUGH A FRANCHISE AGREEMENT. AND THEN THERE'S A SEPARATE MANAGEMENT AGREEMENT WITH BOYKIN PROSPERA, WHICH WE REFERRED TO AS PROSPERA THE OTHER THREE PRIMARY DOCUMENTS THAT GOVERNED THE OPERATIONS OF THIS HOTEL OR THE GROUND LEASE WITH THE CITY OF AUSTIN, THE GRANT AGREEMENT, THAT WAS PART OF THE BOND INDENTURE THAT WAS, UM, RESTRUCTURED IN 2017. AND OF COURSE OUR 2017 BOND INDENTURE WITH THE TRUSTEE ISSUE IS BANK. SO THOSE ARE THE PRIMARY, UH, CONTROLLING DOCUMENTS FOR WHICH WE HAVE, UH, DEVELOPED OUR RESILIENCY PROGRAM. NEXT SLIDE, PLEASE. THIS IS THE LAST LOT I WILL SPEAK TO. UM, IF YOU LOOK ACROSS THE TOP OF THE, OF THIS SLIDE, YOU'LL SEE THAT THE TOTAL PASSENGERS FOR AUSTIN BERGSTROM INTERNATIONAL AIRPORT IN 2020 DROPPED 63% FROM THE 2019 NUMBERS. SIMILARLY, THE HILTON HOTEL REFLECTED AT THE BOTTOM OF THIS SLIDE, HILTON HOTEL OCCUPANCY, AND THE CORRESPONDING REVENUES DROPPED 60%. SO THE HILTON HOTEL IS, UH, NOT ONLY COMPETES WITH, OF COURSE THE OTHER HOTELS WITHIN THE AUSTIN COMMUNITY, BUT ALSO IS, UH, ALMOST A DIRECT REFLECTION OF HOW WELL THE AIRPORT IS, UM, IS, UM, DOING WITH RESPECT TO THE COVID IMPACTS. SO AS WE HAD A REDUCTION IN OUR PASSENGER COUNTS, THE HILTON HOTEL AT THE AIRPORT, UH, WAS A CORRESPONDING. THEY HAVE LARGE CREW, UH, CONTRACTS WITH AIRLINES FOR CRUISE STAYS. AND SO THEIR, UM, OCCUPANCY ALSO DROPPED THEREFORE REQUIRING A BUSINESS CONTINUITY PLAN. SO WITH THAT KIND OF IS JUST CONTEXT. I'M GOING TO TURN THE MIC OVER TO RAJIV THOMAS, WE'LL TALK A LITTLE BIT ABOUT THE DETAILS OF THE LOAN AGREEMENT, WHICH ARE, UH, AND THE DETAILS OF THAT. UH, AND THEN WE'LL BE PLEASED TO ANSWER ANY QUESTIONS AT THE END OF THE PRESENTATION. THANK YOU VERY MUCH. GOOD MORNING, COUNCIL MEMBERS. MY NAME IS RAJEEV THOMAS, UH, DEPUTY CHIEF OF FINANCE WITH THE AIRPORT. UH, IF YOU GO TO THE NEXT SLIDE, PLEASE. OKAY. SO BACK IN MID 2020, WHEN THE PANDEMIC, UH, YOU KNOW, WAS AT ITS WORST AND TRAFFIC AT THE AIRPORT WAS DOWN BY 90%, ET CETERA. UH, THE OCCUPANCY LEVELS AT THE HOTEL WERE DOWN TO ABOUT 20%. YOU KNOW, THAT THE HOTEL IS REALLY KIND OF VERY CLOSELY CORRELATED, UM, TO WHAT HAPPENS AT THE AIRPORT, UM, SINCE IT'S ON THE SAME PROPERTY. AND SO, YOU KNOW, WE WERE LOOKING AT FINANCIAL PROJECTIONS AND WHAT OUR CASH RESERVES WOULD BE, UH, GOING FORWARD AND HOW LONG THE CASH THE OPERATING CASH W HAD WOULD LAST. AND WHEN WE MADE THOSE CALCULATIONS BACK IN MAY, 2020, UH, WE REALIZED THAT WE WERE GOING TO RUN OUT OF MONEY IN THE OPERATING ACCOUNT BY FEBRUARY OF 2020. AND WE PRESENTED THIS TO THE RATING AGENCIES TOO. AND, UH, THIS IS WHEN WE DECIDED THAT WE NEED A, ANOTHER TYPE OF, UH, YOU KNOW, FUNDING SOURCE, UH, TO GET THE HOTEL THROUGH, UH, THE PANDEMIC, UM, UH, YOU KNOW, UNLIKE SOME OTHER HOTELS, YOU KNOW, WHICH WERE ABLE TO SHUT DOWN ITS OPERATIONS, UH, CLOSE THE DOORS. THIS HOTEL HAS, UH, CONTRACTS WITH THE AIRLINES FOR THEIR CREW, UH, FOR THE OVERNIGHT STAYS. SO THEY HAD TO STAY OPEN TO HONOR THOSE CONTRACTS AND, YOU KNOW, THEY HAVE TO ACTUALLY EVEN KEEP THE RESTAURANTS OPEN TO, TO, TO HAVE, UH, AVAILABLE FOOD FOR THOSE, UH, FLIGHT ATTENDANTS AND THE PILOTS NOW THAT STAY OVERNIGHT. SO THERE IS A LOT THAT YOU CANNOT DO IN TERMS OF WHAT OTHER, UH, WHAT ELSE CAN DO. SO, BUT STILL, UH, WHAT WE DID WAS WE, WE REDUCED THE OPERATING EXPENSES BY 44% LAST YEAR, WE DID THIS, OBVIOUSLY, YOU KNOW, AS THE DEMAND WENT [00:30:01] DOWN, WE HAD TO DO REDUCTIONS IN STAFF. UH, WE RE RENEGOTIATE, WE TRIED TO RENEGOTIATE SOME CONTRACTS. WE EVER USED THE SCOPE OF SOME OF THE, UH, WORK, UM, THAT FOR EXAMPLE, THEY'RE DOING ET CETERA. AND WE ALSO POSTPONED SEVERAL CAPITAL PROJECTS AND SOME SERVICES TO, AND ONE OF THE OTHER THINGS THAT WE GOT FROM PROSPERO WAS, UH, YOU KNOW, THE, THEY WAY THEIR FEES, UM, LATE, I THINK, FOURTH QUARTER OF 2020, UM, THEY ARE ONLY CHARGING 50% OF WHAT THEY WERE CHARGING BEFORE ABOUT $18,000 A MONTH VERSUS ABOUT $37,000 A MONTH. AND THEY DID THAT FOR SIX MONTHS TO KIND OF HELP THE HOTEL, UM, DURING THAT TIME. BUT WE KNEW THAT, YOU KNOW, EVEN WITH ALL THOSE MEASURES, YOU KNOW, THERE WASN'T ENOUGH MONEY TO PAY, UM, ALL THE EXPENSES THAT WE NEEDED TO PAY. SO SOME OF THE INVOICES WERE DEFERRED. AND I THINK I MENTIONED THIS BEFORE, YOU KNOW, WE, WE DEFER, UH, THE INVOICES TO HILTON. WE DISPERSE THE INVOICES TO PROSPERA. UH, THOSE HAVEN'T BEEN PAID FOR AWHILE, AND ALSO WE DEFERRED OUR PAYMENTS TO HARDY PARTNERS, UH, AND, UH, GREG MILLIGAN AND ALSO TO OUR, OUR OUTSIDE LEGAL COUNSEL TO, SO THOSE HAVEN'T, SO THOSE BILLS HAVEN'T BEEN PAID SINCE MARCH FOR APRIL OF LAST YEAR. UM, SO THIS OPERATING LOAN WAS TO KIND OF HELP CATCH UP ON PAYING ALL THOSE BILLS. UH, THE, ANOTHER COMPONENT OF WHAT WE ARE FINDING OUT IS THAT WE HAVE ESSENTIALLY RUN OUT OF MONEY IN OUR ADMIN FEE FUND. UH, WE HAVE, UM, ITEMS THAT ARE DUE PER THE BOND, UM, IN DANGER AND THE, THE, I MEAN, THE TRUST INDENTURE THAT, UH, ANNUAL REPORTS THAT WE HAVE TO SUBMIT TO THE, UM, TO THE BOND TRUSTEE, WHICH WE ENABLE WE ARE NOT ABLE TO DO RIGHT NOW BECAUSE OF, UH, THERE'S NOT ENOUGH MONEY IN OUR ADMIN FEE FOR FIND THERE'S ONLY $1,500 LEFT IN, IN THERE. AND, UH, SO THIS OPERATING LOAN IS SUPPOSED TO HELP PAY FOR ALL OF THOSE CALLS GOING FORWARD. UM, AND YOU KNOW, MEDIATOR, UH, WE ALSO, UH, RECEIVED THE PPP ONE LOAN, WHICH WAS ABOUT $907,000. WE USE THAT MONEY TO REHIRE ABOUT 75, UM, PERSONNEL BACK TO DO SOME PROJECTS AROUND THE AIRPORT. I MEAN, SORRY, AROUND THE HOTEL. AND YOU CAN SEE THERE'S ABOUT, YOU KNOW, THEY IDENTIFIED ABOUT 46 PROJECTS AND ABOUT 22,440 IN WORK HOURS, HOURS. BUT MOST OF THAT PPP LOAN, 83% WAS USED TOWARDS PAYROLL EXPENSES. THE REST OF IT WAS USED TOWARDS UTILITIES LIKE ELECTRICITY AND WATER UTILITIES, UM, AS, UM, STATED BY THE FBA ON, IN THE SMALL BUSINESS ASSOCIATION ON WHAT YOU CAN USE THE, THOSE FUNDS FOR. SO WE EXPECT THAT WHOLE $907,000 TO BE FORGIVEN. WE HAVE, WE ARE SUBMITTING AN APPLICATION TO CHASE BANK. WE, UM, RECEIVED THE FUNDS FROM, UH, FOR FULL FORGIVENESS OF THAT $907,000. AND WE SHOULD RECEIVE AN ANSWER BACK IN ABOUT SIX WEEKS OR SO. IT WAS WHAT PEOPLE, UM, AND ALSO WE APPLIED FOR PPP TWO LOAN THIS YEAR. SO WE RECEIVED 1.27 MILLION IN PPP TO LOAN ALSO, WHICH IS ALSO GOING TO BE USED, UH, MOSTLY ALL TOWARDS PAYROLL, AS MUCH AS WE CAN. YEAH. NEXT SLIDE PLEASE. UM, A COUPLE OF THINGS REGARDING, UH, YOU KNOW, WHAT I MENTIONED TO YOU BEFORE REGARDING THE ADMIN FEE FUND, AND THERE ARE ITEMS OF THE ADMIN FEE FUND THAT WE NEED TO PAY OUT OF THAT WE ARE NOW OUT OF FUNDS IN THAT FORM. UM, FOR EXAMPLE, THE HOTTIE PARTNERS INVOICE, UH, TH THAT GETS PAID OUT OF THE ADMIN FEE. I DON'T KNOW, YOU PROBABLY CANNOT SEE THE FLOW OF FUNDS VERY CLEARLY, BUT IT'S NOT THROUGH THE ONM EXPENSES. THEN THERE'S A REBATE FUND AND THERE'S AN ADMIN FEE FUND THAT IS A THIRD, UM, BUCKET IN THAT, YOU KNOW, FLOW FUNDS RIGHT THERE. AND, UH, ALSO THE, THE CONSULTANT REPORTS THAT IS DUE TO THE BOND TRUSTEE, WHICH IS THERE'S A CONSULTING ENGINEER'S REPORT THAT WE HAVE TO SUBMIT ANNUALLY. AND ALSO THERE'S A REVENUE CONSULTANT REPORT THAT KIND OF STATES, YOU KNOW, HOW MUCH REVENUE YOU NEED TO COLLECT TO MEET THE RATE COVENANT IN THE COMING YEAR, ET CETERA. SO THOSE ARE REQUIREMENTS IN, UH, BASED ON THE BOND INJURED IN DANGER THAT GETS PAID OUT OF THE ADMIN FEE FUND. UH, IN ADDITION TO THAT, UM, AS YOU ALL KNOW, PROBABLY, UM, WE HAVE A GRANT AGREEMENT WITH ABEL WHERE, UM, IF THE DEBT SERVICE RESERVE FUND IS DIP INTO TO PAY THE DEBT SERVICE PAYMENT, WE HAVE TO REPLENISH THAT THE AIRPORT HAS TO REPLENISH THAT. SO WE DID MAKE A PAYMENT INTO THAT, THAT SERVICE RESERVE ON NASA, OCTOBER 1ST, 2020 FOR $1.5 BILLION. UH, IT WAS AGAIN [00:35:01] DRAWN FOR $1.08 MILLION IN APRIL ONE OF 2021. SO THAT PAYMENT IS PENDING, BUT THAT IS COMING OUT OF THE AIRPORTS, UM, ACCOUNTS. AND WE ALSO ANTICIPATE, UH, THAT, UH, WE WOULD HAVE TO MAKE THE OCTOBER 1ST 20, 21 PAYMENT, THE APRIL 1ST, 2022 PAYMENT, BECAUSE WE DON'T FEEL THERE WILL BE SUFFICIENT CASH FLOW, UH, THAT WOULD, UH, THAT, YOU KNOW, THAT WOULD FLOW INTO THAT SENIOR DEBT SERVICE FUND ACCOUNT TO PAY THE DEBT SERVICE PAYMENT, UM, WITHIN THAT TIMEFRAME. UM, SO, SO I MEAN, THOSE, YOU KNOW, THOSE EXPERTS, SO THOSE ARE KIND OF ANTICIPATED BY THE AIRPORT AND, YOU KNOW, WE'VE ALREADY COMMUNICATED THAT TO THE CONTROLLER'S OFFICE, ET CETERA, THAT WE EXPECT TO MAKE THE PAYMENT. AND IF YOU LOOK AT THE CURRENT OCCUPANCY LEVEL AT THE HOTEL IN MARCH AND APRIL, IT'S ABOUT 50 TO 60%. SO IT IS NOW AT A BREAKEVEN POINT, BUT IT DOESN'T GENERATE ENOUGH EXCESS CASH TO BE ABLE TO GO BACK AND MAKE THE PLANS THAT ARE PAST DUE, YOU KNOW, DOES IT PROVIDE ENOUGH SUFFICIENT CASH FLOW, UH, TO FILL THIS DEBT SERVICE, UH, SENIOR DEBT SERVICE FUND. SO, I MEAN, THAT'S SORT OF THE SITUATION THAT THE HOTEL IS IN. UH, SO THAT'S WHY IT IS, YOU KNOW, OPERATING LOAN KIND OF HELPS THEM MEET THOSE PRIOR OBLIGATIONS. AND THEN, YOU KNOW, AS THEY BREAK EVEN HOPEFULLY, YOU KNOW, THE TRAFFIC TRENDS HIGHER, UM, AND THEY BREAK EVEN, THEY'RE ABLE TO MEET ALL THE CURRENT OBLIGATIONS OUT OF THE OPERATING FUND GOING FORWARD, AND MAYBE SOMEBODY WILL START TRICKLING INTO THESE OTHER ACCOUNTS THAT NEED TO, UH, SHOULD BE FUNDED. UM, UH, TRACY ALREADY MADE, I MENTIONED ABOUT THE, YOU KNOW, THE GOVERNANCE AND THE AMENDED BYLAWS. AND SO LET ME JUST GET TO THE NEXT SLIDE AND TALK ABOUT THE LOAN AGREEMENT. OKAY. SO, UM, WE DID APPROVE A NEW BUDGET. UM, WERE THEY ABLE TO BOARD OF DIRECTORS AS OF MAY 17, THERE WAS AN ORIGINAL BUDGET THAT WAS DONE IN MARCH, BUT THAT WAS KIND OF PUT TOGETHER BEFORE WHAT WE S WE SAW THE TRIBAL REBOUND IN MARCH AND APRIL. SO WE PUT A TICKET IN AN AMENDED BUDGET THAT WAS APPROVED BY THE BOARD OF DIRECTORS, BUT WHEN WE LOOK AT THE FULL YEAR OCCUPANCY LEVELS AND THE REVENUE PROJECTIONS, WE STILL FEEL LIKE, YOU KNOW, YOU NEED THE OPERATING LOAN BECAUSE THE OCCUPANCY LEVEL REALLY, UH, THE EXPECTED OCCUPANCY LEVELS, WE ARE STILL X, YOU KNOW, WE THINK IT IS GOING TO BE IN THE 60% LEVELS RATHER THAN 80%, UM, OCCUPANCY LEVELS WHEN IT WAS BACK IN 2018 BEFORE THE PRE PANDEMIC. SO WE'RE NOT QUITE BACK TO FULL RECOVERY, AND WE DON'T EXPECT TO BE BACK TO FULL RECOVERY TOOL THE YEAR 2010, 22. UM, SO THE LOAN AGREEMENT, UM, THE PURPOSE OF IT IS AN ASSURANCE TO THE BOND TRUSTEE AND EXTERNAL AUDITORS THAT ABEL WILL REMAIN A GOING CONCERN BECAUSE, UM, YOU KNOW, THE AUDITOR'S HAD HAD, UM, AT SOME TIMES ABOUT, ABOUT ABEL AS A GOING CONCERN BECAUSE OF THE CASHFLOW ISSUES THAT IT WOULD PHASE IN THE COMING YEAR. SO THIS OPERATING LOAN WAS ALSO AN ASSURANCE TO THE, TO THE AUDITORS THAT, YOU KNOW, WE CAN FUND THE, THE OPERATING EXPENSES, UM, WITH WHAT WE GET FROM THE PPP LOANS AND ALSO FROM THE OPERATING LOAN, UM, AS IF NEEDED, BECAUSE THERE'S A LINE OF CREDIT IN THAT, UH, OPERATING LOAN COMPONENT THAT I'LL GET TO IN A SECOND. AND THEN, YOU KNOW, AS I MENTIONED BEFORE, RETOOL PAY IN THE OPERATING BUDGET, UH, THE VENDORS AND SUPPLIERS THAT I MENTIONED BEFORE, UH, SOME OF THE PROFESSIONAL SERVICES, AND THEN IT WILL ALSO AUGMENT THE PPP LOAN PROCEEDS AND WHAT IT IS KIND OF PROVIDING, IT'S SORT OF LIKE A BRIDGE LOAN TILL THE YEAR 2022, BEFORE WE SEE THE FULL OCCUPANCY LEVELS RETURN. AND IT IS JUST TO MAKE SURE THAT IT HAS THE HOTEL AS A FINANCIAL LIFELINE TO GET THROUGH THIS PANDEMIC. UM, IF YOU GO TO THE NEXT SLIDE, PLEASE. SO THE STRUCTURE OF THIS LOAN AGREEMENT, IT IS, IT IS FOR A FULL AMOUNT OF $2.6 MILLION. WE EXPECT THE INITIAL DRAW TO BE ABOUT $1.3 MILLION OR SO TO MAKE SURE THAT, YOU KNOW, ALL THE PRIOR OBLIGATIONS ARE MET. AND THEN, YOU KNOW, THERE IS A 1.2, 5 MILLION AS A, AS A LINE OF CREDIT THAT, UM, THAT IS GOING TO BE DRAWN ON JUST BASED ON WHAT THE HOTEL SUBMITS TO THE AIRPORT, UH, IN TERMS OF THEIR PROJECTIONS FOR THE COMING QUARTER. SO THEY ARE GOING TO, WE ARE GOING TO LOOK AT, UM, THE FORECAST FOR THE HOTEL, UM, ON A QUARTER BY QUARTER BASIS AND SEE WHETHER THERE IS ANY NEED FOR ANY ADDITIONAL AMOUNTS OTHER THAN THE INITIAL DRAMA. AND THE LOAN INTEREST RATE IS 2%. IT WAS BASED ON A, A, A, THE FED FEDERAL RESERVE RATES. OR IF YOU LOOK AT THE FEDERAL RESERVE [00:40:01] RATES FOR A FIVE-YEAR LOAN, IT IS RIGHT BELOW 1%. AND A SEVEN YEAR LOAN IS ABOUT 1.3% IS WHAT IS THE AVERAGES? SO IT HAS A LITTLE BIT OF A RISK PREMIUM IN THERE THAT TAKES IT TO 2%. AND THEN THE PAYMENTS START IN APRIL 1ST OF 2024, AS STARTED AS AN INTEREST ONLY PAYMENTS. AND THEN IN APRIL 1ST OF 2025 TO MARCH 31ST OF 2028, YOU GET THE PRINCIPAL AND INTEREST PAYMENTS. SO WHAT THAT ALLOWS THE HOTEL TO DO IS START REPLENISHING SOME OF THOSE THAT SERVICE FUND BUCKETS THAT IS THE DEBT SERVICE FUND, AND ALSO THE DEBT SERVICE RESERVE FUND BUCKETS, UM, UM, UH, BEFORE THEY HAVE TO PAY THE LOAN BACK. SO, UM, THAT'S, THAT WAS THE END OF MY PRESENTATION. SO, YOU KNOW, UH, WHEN WE CAN TAKE ANY QUESTIONS, YOU'D LIKE, THANK YOU, THANK YOU. IF WE CAN, THERE WE GO. UM, COLLEAGUES, DO FOLKS HAVE ANY QUESTIONS? THAT'S A MEMBER OF QUANTIS. THANK YOU. AND THANK YOU FOR THE PRESENTATION. UM, MY QUESTION IS ABOUT THE SECOND PPE LOAN. YOU MENTIONED THAT THE INTENTION IS TO SPEND THAT F Y 21. UM, HAVE YOU, HOW HAVE WE RECEIVED THE, THE PP, THOSE, THE FUNDS YET? ARE THEY, YEAH, WE HAVE RECEIVED IT. YEAH. OKAY. SO IT IS GOING TO GO TOWARDS JUST LIKE THE DPP ONE LOAN, MOSTLY TOWARDS PAYROLL 80. I MEAN, THE PROJECTION IS THAT 80 SOMETHING PERCENT WILL BE TOO EXPENSIVE. SO IF THAT, IF THAT LOAN IS GOING TO PAYROLL, WHAT DO WE HAVE? LIKE A BETTER, IF I COULD GET A BETTER UNDERSTANDING OF HOW THIS OPERATING LOAN WOULD HELP SUPPLEMENT THE OTHER COSTS THAT ARE OWED, UM, THAT WOULD BE HELPFUL. AND I KNOW YOU HAVE A SLIDE THERE THAT KIND OF BROKE IT DOWN, BUT IT WAS, YEAH. SO, SO LET ME, LET ME ALSO BRING UP ANOTHER POINT. UM, YOU KNOW, AS, AS YOU PROBABLY KNOW, MOST BUSINESSES AROUND THE CITY ARE HAVING A LOT OF TROUBLE REHIRING EMPLOYEES RIGHT NOW, RIGHT? UH, OUR CONCESSIONS ARE, THE AIRPORT IS REALLY HAVING A HARD TIME TO THAT. LIKEWISE, THE HOTEL, WHAT THE HOTEL IS TELLING US IS THAT THEY ARE GOING TO HAVE TO INCREASE THEIR MINIMUM WAGES THERE AND START HIRING, UM, AND START OFFERING $14 AND ABOVE. SO THAT IS ALSO ADDING AN EXTRA COST TO THE PAYROLL EXPENSES IN THIS COMING YEAR. SO WE HOPE THAT THIS PPP ONE LOAN WOULD HELP, UH, YOU KNOW, SUPPLEMENT SOME OF THOSE INCREASES IN THE PAYROLL COSTS THAT WE ARE EXPECTING TO INCUR THE CO2. OKAY. OKAY. AND THEN IF YOU COULD JUST WALK US THROUGH, AND I'M GLAD TO HEAR THAT WE'RE RAISING WAGES CERTAINLY WANT TO GET TO, TO MARKET WAGES AND, AND LIVABLE WAGE. SO THAT'S GREAT NEWS, UM, AND DEFINITELY NEEDED. AND SO, UM, SO THEN THE, I KNOW IT'S ON COUNCIL AGENDA FOR NEXT WEEK FOR US TO APPROVE THE OPERATING LOAN. AND SO I JUST WANNA UNDERSTAND IF THERE'S ANY, UM, IF THERE'S ANY OTHER LIKE TIME SENSITIVITY OR RISKS THAT WE SHOULD BE AWARE OF. UM, YEAH. YES. I MEAN, THE TIME SENSITIVITY IS REGARDING, YOU KNOW, WHAT, WHAT I MENTIONED BEFORE, UH, REGARDING THE DOCUMENTS THAT WE HAVE TO PROVIDE TO THE BOND TRUSTEE, THOSE ARE ACTUALLY PASSED YOU. UM, THEY WERE DUE THIS MONTH, UM, AND WE DON'T HAVE THE MONEY IN THAT BIN FEE TO, TO PRODUCE THE CONSULTANT REPORT OR THE CONSULTING ENGINEER'S REPORT THAT IS DUE ANNUALLY. UM, SO YOU KNOW, THAT, THAT IS, THAT, YOU KNOW, PUTS US IN NONCOMPLIANCE WITH THE TRUST IN DANGER RIGHT NOW. UM, SO, YOU KNOW, THAT IS ONE OF THE THINGS THAT WE HAVE TO CONSIDER, UH, PLUS THE OTHER RISK, YOU KNOW, THAT WE TALKED ABOUT EARLIER WAS, UM, YOU KNOW, WE HAVE NON-PAYMENT, WE HAVE ALSO INCURRING LATE FEES WITH HILTON. UM, WE WE'VE ALREADY INCURRED OVER $3,000 IN LATE FEES WITH HILTON BECAUSE WE, YOU KNOW, AND, UH, YOU KNOW, WE, YOU KNOW, ONE OF OUR, OUR, UM, POINTS TO THEM WAS THAT WE HAD THIS OPERATING LOAN COMING, YOU KNOW, HOPEFULLY, AND THEN WE WOULD CATCH UP ON ALL THOSE PAYMENTS. SO I DON'T KNOW HOW LONG THEY WOULD GO BACK. UM, YOU KNOW, UH, THERE IS ISSUES WITH COLLECTION AGENCIES THAT THEY CAN SEND THIS TO IF THEY FEEL LIKE, YOU KNOW, UM, YOU KNOW, MAKING THE PAYMENTS. SO ALL THOSE RISKS IS STILL THERE, BUT I WOULD SAY THE BOND IN DANGER AND MEETING THE, UH, AND BEING COMPLIANT WITH THE, UH, THE BOND IN DANGER IS RIGHT UP THERE. GOTCHA. THANK YOU. SO, UM, MR. DAVIS, THIS IS A LOAN FROM THE DEPARTMENT OF AVIATION TO THE, AND THOSE FUNDS ARE NOT PART OF THE GENERAL FUND THEY'RE PART OF THE ENTERPRISE FUND. THAT IS [00:45:01] THE AIRPORT, CORRECT? THAT'S CORRECT. AND FROM THE AIRPORT SIDE OF IT, FROM THE AVIATION DEPARTMENT WHERE THOSE FUNDS COMING FROM, THEY'RE COMING FROM THE OPERATING BUDGET, IT'S COMING FROM OUR SURPLUS CAPITAL FUND. UM, WE DO HAVE, UM, YOU KNOW, WE HAVE ABOUT 170 MILLION IN THERE CURRENTLY AS A BALANCE. UM, SO THAT IS OUR, OUR SORT OF AFTER THE OPERATING EXPENSES, THAT'S WHERE ALL OUR FUNDS KIND OF FLOW INTO. AND IT'S THE FUNDING THAT WE HAVE FOR EXPANSION, ET CETERA. I MEAN, IT'S NOT, I MEAN, YOU HAVE TO HAVE ENOUGH FUNDS IN THERE TO BE ABLE TO PULL OFF THE EXPANSION. I MEAN, IT'S NOT, YEAH. I MEAN, IT, IT, YOU KNOW, SO, YOU KNOW, IT'S, IT'S SORT OF, YOU KNOW, WE WANT THOUGH, I MEAN, WE DON'T SEE ANOTHER ALTERNATIVE. RIGHT, RIGHT NOW, IF THERE WAS ANOTHER ALTERNATIVE THAT WE COULD GO WITH, DEFINITELY, YOU KNOW, WE WOULD, BUT, UH, I MEAN, THIS LOAN WOULD BE PAID BACK, RIGHT. WE EXPECT IT TO BE PAID BACK AND WE, AND ONE OF THE OPTIMISM WE HAVE ABOUT THE HOTEL IS THIS AREA AROUND THE AIRPORT, YOU KNOW, IT'S REALLY GOING THROUGH A REVITALIZATION WITH THE TESLA PLANT NEARBY AND SOME OF THE INTEREST IN THE DEVELOPMENT. SO WE FEEL LIKE THE HOTEL WILL DO WELL IN THE FUTURE JUST BECAUSE THE ECONOMIC CONDITIONS AROUND THE AIRPORT SHOULD IMPROVE. SO, YOU KNOW, YOU KNOW, IT'S TO, IS TO KIND OF FOSTER, UH, THE ABILITY TO SERVE THE AIRLINES. YOU KNOW, THE HOTEL ALSO SERVES AS A, AS A, AS A, UM, HELPED FOR THE AIRPORT. YOU KNOW, WHEN WE HAVE THE SPECIAL, I MEAN, THE WEATHER EVENT BACK IN FEBRUARY, WE WERE ABLE TO, YOU KNOW, A LOT OF OUR, OUR, UH, STAFF AT THE STAY OVERNIGHT AT THE AIRPORT FOR FOUR OR FIVE DAYS, AND WE WERE ABLE TO PUT THEM UP AT THE HOTEL, WHICH IS RIGHT ON THE PROPERTY. SO, YOU KNOW, THERE'S A LOT OF, YOU KNOW, WHAT DO YOU CALL IT, SYMBIOSIS BETWEEN THE AIRPORT AND THE HOTEL THAT, YOU KNOW, YOU'RE TRYING TO ACCOMPLISH HERE, APPRECIATE THAT THIS IS A USEFUL CONVERSATION FOR US TO BE, TO HAVE THE OPPORTUNITY TO HAVE SEPARATE FROM JUST MEMOS FLYING AT US, OR I THINK WE GOT, I KNOW THAT I HAVE MUCH BETTER IDEA OF THE FINANCIAL CHALLENGES THAT YOU'RE TRYING TO SOLVE, UM, WITH THIS, UH, COUNCIL MEMBER TOTO, DID YOU STILL HAVE A QUESTION? I DID. THANKS. UH, JUST A QUICK ONE ON SLIDE FIVE, YOU'VE TALKED ABOUT 46 PROJECTS, AND I APOLOGIZE IF I MISSED YOUR EXPLANATION OF WHAT SOME OF THOSE WERE, BUT I WONDERED IF YOU COULD IDENTIFY FOR US WHAT, WHAT SOME OF THE PROJECTS WERE THAT, THAT THE STAFF THAT WERE IDENTIFIED FOR STAFF TO WORK ON DURING THE PERIOD OF TIME WHERE WE'RE, OUR DEMAND IS LOW. YEAH. I MEAN, FROM MY UNDERSTANDING, AND I CAN, YOU KNOW, MAYBE REPLY BACK TO YOU WITH A LITTLE BIT OF DETAIL AFTER I GET BACK FROM THE MANAGEMENT COMPANY, BUT, UH, THERE WERE SOME SORT OF, YOU KNOW, ENDINGS AND, YOU KNOW, FIX UPS THAT THEY NEEDED TO DO AT THE HOTEL, LIKE WHITEWASHING THE OUTSIDE OF THE, UH, THE BUILDING, FOR EXAMPLE, I REMEMBER THAT WAS ONE OF THE THINGS THAT THEY DID, UM, ET CETERA. SO IT'S, I MEAN, I KNOW ALL THE PROJECTS, BUT I CAN GIVE YOU A LIST OF IT, YOU KNOW, AFTER THE MEETING. YEAH, SURE. THANKS. THERE MAY BE. MAYBE WE COULD TREAT IT AS A Q AND A FOR THE COUNCIL WHEN IT COMES FORWARD FOR THE COUNCIL. THAT WOULD BE, THAT'D BE USEFUL JUST TO GET A SENSE OF THE KIND OF WORK THAT'S BEEN DONE ON THE HILTON, UM, AS PART OF THE INTEREST IN LEARNING PEOPLE BACK. SO THANKS. THANKS VERY MUCH. YEAH. AND MAYBE WE CAN, UM, PUT THIS PRESENTATION, UM, BOTH THE, YOU KNOW, THE, THE SLIDES, BUT THEN MAYBE ALSO JUST A NOTE THAT THIS WAS DISCUSSED AT THIS TIME AT AUDIT AND FINANCE IN THE BACKUP, UM, FOR THOSE ITEMS IN CASE OTHER FOLKS ARE IN NEED OR DESIRE OF, UM, ADDITIONAL INFORMATION. I THINK THERE WAS A LOT OF INFORMATION IN THE PRESENTATION THAT WASN'T NECESSARILY ON THE SLIDES THAT FOLKS MAY FIND HELPFUL IF THEY HAVE HAVE QUESTIONS. UM, ARE THERE FURTHER QUESTIONS, COUNCIL MEMBER POOL? THIS IS JUST A GENERAL COMMENT TO MY COLLEAGUES ON THE AUDIT AND FINANCE COMMITTEE. YOU REMEMBER AT OUR LAST MEETING, I MENTIONED THAT I HAD ASKED STAFF TO GET US AN INVENTORY OF THE DIFFERENT, THE VARIOUS DIFFERENT ENTITIES THAT THE CITY OF AUSTIN HAS, THAT ARE EITHER CREATED BY THE COUNCIL, UM, UNDER A SPECIFIC STATUTORY AUTHORITY, LIKE A LGC A LOCAL GOVERNMENT CORPORATION OR CREATED BY COUNCIL OUTSIDE OF CHAPTER TWO, ONE OF THE CODE AND ENTITIES OR ENTITIES THAT ARE CREATED WITH OTHER GOVERNMENTAL ENTITIES, LIKE THE SOBERING CENTER WOULD BE ONE OF THOSE AND BALCONIES CANYON LANDS WOULD BE ANOTHER ONE ENTITIES CREATED BY HOUSING FINANCE CORPORATION. AND IT LOOKS LIKE THE LAST CATEGORY ENTITIES CREATED [00:50:01] BY A STATE OR FEDERAL LAW AND THE COUNCIL OF POINTS MEMBERS TO THAT ENTITIES, A BOARD. SO I NOW, UM, DO YOU HAVE TO LISTEN, I REALLY APPRECIATE STAFF DIGGING DEEP TO BE ABLE TO ACQUIRE THE INFORMATION AND ORGANIZE IT AND GET IT INTO A SPREADSHEET. AND THERE'S ABOUT, THERE'S MORE THAN 50. AND, UM, IT'S AN INTERESTING, AND I, AND I JUST GOT IT YESTERDAY, SO I HAVEN'T ACTUALLY BEEN ABLE TO SPEND TOO MUCH TIME WITH IT OTHER, JUST TO KIND OF GIVE IT A CURSORY REVIEW. YOU'RE HAPPY TO SHARE THIS WITH EVERYBODY. UM, WHOEVER'S INTERESTED IN SEEING IT, UM, THERE'S, UH, A WIDE RANGE OF WORK THAT WE DO OBVIOUSLY, AND THIS PUTS TOGETHER ALL OF THE ENTITIES THAT ARE, ARE AFFILIATED, MAYBE NOT AS DIRECTLY, OBVIOUSLY AS, AS LIKE AVIATION DEPARTMENT WOULD BE TO THE CITY, BUT WHOSE, UH, WELFARE AND RESOURCES, AND IS IN OUR STEWARDSHIP. AND, UM, WHO'S WHICH WELFARE WE REALLY CARE A WHOLE LOT ABOUT ON THE DIET. SO, UM, AGAIN, I, I WANT TO LET FOLKS WITH, UM, THE CITY MANAGER'S OFFICE AND A LOT OF APARTMENT THAN OUR, UM, LEGAL FOLKS, UM, A LOT DEPARTMENT AND OUR FINANCIAL DEPARTMENT FOR PULLING ALL THIS TOGETHER AND WE'LL HAVE MORE ON IT, UM, IN THE FUTURE, JUST WANTED TO GIVE YOU ALL AN UPDATE THAT WE DO NOW HAVE THAT INVENTORY AND ABLE IS ON THE LIST. AND WE'RE PLEASED TO COME BACK AND PROVIDE ADDITIONAL INFORMATION AT YOUR REQUEST. THANK YOU SO MUCH, TRACY, THE, THE BRIEFING THAT YOU GAVE TO MY STAFF AND ME A COUPLE OF WEEKS AGO, IT WAS REALLY INSIGHTFUL. AND I ANSWERED A LOT OF QUESTIONS THAT WE HAD, AND WE APPRECIATE THE GOOD WORK THAT YOU ALL ARE DOING. AND JUST TO FLAG JUMPING AHEAD FOR A MOMENT TO ITEM SIX ON FUTURE MEETINGS, I BELIEVE THAT, UM, VICE CIRCLE HAS ASKED US TO HAVE AN ITEM OUR JUNE MEETING RELATED TO OVAL, UM, MORE GENERALLY, UM, TO HELP US BETTER UNDERSTAND THAT HISTORY AND FINANCIAL PROFILE OPERATIONS AND GOVERNANCE AND OTHER KINDS OF THINGS. UM, SO WE WILL SEE YOU IN A FEW WEEKS. THANK YOU VERY MUCH. THANK YOU. THANK YOU FOR YOUR TIME. THANKS GELS. SO THE NEXT ITEM GOING TO TAKE UP THIS ITEM, NUMBER THREE, [3. Financial Policies Update.] THE FINANCIAL POLICIES UPDATE MORNING WHISTLING. GOOD MORNING. HOW ARE YOU? THANK YOU ALL FOR A HAPPINESS. I JUST WANT TO MAKE SURE THE ENTIRE TEAM IS ON. UM, AND WE START SPECTATION PLEASE. THAT IS ACTUALLY THE BACKUP. THERE SHOULD BE A THANK YOU. GOOD MORNING. MY NAME IS GARY LANG. I'M THE INTERIM BUDGET OFFICER FOR THE CITY. UM, AND I WANT TO JUST START OUT WITH, UM, QUITE A CLARIFICATION FOR THE RECORD THAT THERE ARE SEVERAL, UM, FINANCIAL POLICY CHANGES THAT WE'RE BRINGING FORWARD TO THE AUDIT FINANCE COMMITTEE FROM AUSTIN, WATER AVIATION AND AUSTIN ENERGY. THE ORIGINAL POST, UM, HAD AUSTIN WATERS AS THE LEAD DEPARTMENT. HOWEVER, THE FINANCIAL SERVICES DEPARTMENT, UM, IS THE LEAD AND HAS WORKED WITH EACH OF THE DEPARTMENTS ON THESE POLICY CHANGES. UM, A REPRESENTATIVE FROM EACH DEPARTMENT WE'LL DISCUSS THE RELEVANT CHANGES, AND THEN IF THE COMMITTEE SOME MORE SUPPORTS THESE RECOMMENDATIONS, THEY WILL BE INCLUDED IN THE FISCAL YEAR 22 PROPOSED BUDGET THAT WILL BE PRESENTED TO THE FULL COUNCIL ON JULY 9TH. NEXT SLIDE PLEASE. SO WE HAVE ADAM MCINROY WITH THE AUSTIN ENERGY DEPARTMENT WHO WILL SPEAK TO THE LETTERS OF CREDIT FINANCIAL POLICY CHANGES. SURE. THANKS CARRIE. GOOD MORNING, MAYOR AND COUNCIL MEMBERS. AND THANK YOU FOR YOUR TIME TODAY. MY NAME IS ADAM MCINROY AND I'M AUSTIN ENERGY'S FINANCE DIRECTOR FOR RISK. IN THAT ROLE, I SERVE AS ONE OF THE UTILITIES, PRIMARY STAFF MEMBERS ACCOUNTABLE FOR THE MANAGEMENT OF CREDIT RISK FOR AUSTIN ENERGY, AS PART OF OUR CREDIT RISK MANAGEMENT ON BEHALF OF OUR CITIZENS AND CUSTOMERS, THE CITY OF AUSTIN CAN AUSTIN ENERGY SUPPORT VENDORS, OBLIGATIONS UNDER OUR CONTRACTS, INCLUDING OUR LONGTERM ENERGY MARKET CONTRACTS LIKE POWER PURCHASE AGREEMENTS WITH LETTERS OF CREDIT OR LCS FROM CREDIT WORTHY, THIRD PARTY PROVIDERS OR ISSUERS. THESE ISSUERS PLEDGED TO DELIVER CASH SECURITY TO THE CITY IF A VENDOR UNDERPERFORMS AND THAT MITIGATES THE OVERALL NEGATIVE IMPACT, THE RISK OF UNDER-PERFORMANCE [00:55:01] BY OUR VENDORS. THE GOAL OF THE LC PRACTICE IS TO MITIGATE THE RISK OF NON-PERFORMANCE OF THE VENDOR. SO THE CREDIT QUALITY ISSUER OF THE LETTER OF CREDIT IS OF CRITICAL IMPORTANCE TO THAT PLAN. THE UPDATE HERE TO THE FINANCIAL POLICIES REQUESTED TODAY WOULD DELEGATE OVERSIGHT AUTHORITY OVER ISSUERS OF LETTERS OF CREDIT, JUST FOR ENERGY MARKET CONTRACTS, LIKE PDAS TO AUSTIN ENERGY'S RISK OVERSIGHT COMMITTEE. THAT COMMITTEE IS CREATED BY COUNCIL RESOLUTION FOR THE PURPOSE OF MANAGING RISKS FOR THE ENERGY MARKETS. AND THAT EXPLICITLY INCLUDES CREDIT RISKS IN ITS MANDATE, UH, ON BEHALF OF OUR CUSTOMERS. SO TO MEET THAT MANDATE COMMITTEE HAS DEVELOPED FOCUS AND EXPERIENCE IN OVERSEEING CREDIT RISK IN ENERGY MARKETS IN PARTICULAR, BOTH WITHIN COMMITTEE MEMBERSHIP AND WITHIN THE STAFF THAT SUPPORTS IT IN RECENT YEARS, THE COMMITTEE HAS SEEN THAT THE EVALUATION OF ISSUERS FOR ENERGY MARKETS AS A COMMUNITY OF PRACTICE OF ITS OWN, THAT USES A SIMILAR OVERALL LEVEL OF DILIGENCE FOR SCREENING ISSUERS, BUT SLIGHTLY DIFFERENT DETAILED TESTS FOR ISSUER QUALITY VERSUS THE TEST AND OTHER LOCAL GOVERNMENT PRACTICES LIKE OUR EXISTING LETTER OF CREDIT POLICY IN THE FINANCIAL POLICIES TODAY. SO STAFF BUILDINGS THAT LOCATING OVERSIGHT OF THE ENERGY MARKET LC ISSUE OR QUALITY AT AUSTIN ENERGY'S RISK OVERSIGHT COMMITTEE CAN HELP ALIGN THE CITY'S DILIGENCE IN THESE MATTERS WITH THE BEST FOR CREDIT MANAGEMENT IN THESE MARKETS, WE BELIEVE THAT CHANGE WILL BENEFIT CITIZENS AND CUSTOMERS BY ALLOWING MORE COHERENT MATCHES BETWEEN ENERGY CONTRACTS AND THE POLICIES THAT THE CITY INCREASING THE FAMILIARITY OF OUR VENDORS WITH OUR CONTRACT STRUCTURES AS THEY BID, SINCE THEY'RE A PART OF THIS OTHER COMMUNITY OF PRACTICE. AND OVERALL, WE THINK THAT WILL IMPROVE THE OFFER QUALITY AND PRICING FOR OUR POWER PURCHASE AGREEMENTS FOR OUR CUSTOMERS. SO I'LL PAUSE HERE FOR, UH, THIS SLIDE AND THIS UPDATE REQUESTS. I'M HAPPY TO ANSWER ANY QUESTIONS THE COMMITTEE MAY HAVE, AND IF THERE ARE NONE, I THINK REGGIE FROM AVIATION WILL DISCUSS THE NEXT CHANGE. I THINK MAYBE WE'LL GO THROUGH THAT PRESENTATION AND THEN TAKE QUESTIONS. THAT'S OKAY. FOLKS. GOOD MORNING. UM, NEXT SLIDE PLEASE. OKAY. SO THERE'S TWO, UM, CHANGES THAT WE ARE, WE ARE ASKING, UH, REGARDING THE, UH, FINANCIAL POLICIES WHERE AVIATION HERE. THE FIRST ONE IS, UM, THIS IS THE, THE CURRENT LIABILITY CALCULATION, YOU KNOW, WHICH THE THRESHOLD IS 1.5 1.5. AND WE ARE ASKING THAT, UH, IT'D BE SUBSTITUTED WITH A MINIMUM 400 DAYS CASH ON HAND, UM, BASED ON THE ANNUAL OPERATING BUDGET, UH, FOR THE AIRPORT. AND THE REASON WHY WE ARE ASKING FOR THIS IS IN OUR, IN THE AVIATION INDUSTRY AND FOR, YOU KNOW, WHEN RATING AGENCIES LOOK AT AIRPORTS, UH, THE METRIC THAT THEY USUALLY SITE THAT COMPARES AIRPORT TO AIRPORT IN TERMS OF FINANCIAL HEALTH IS THE DAY'S CASH ON HAND. THERE ARE AIRPORTS, FOR EXAMPLE, LIKE THE HOUSTON AIRPORT SYSTEM THAT HAS OVER A THOUSAND DAYS CASH ON HAND. AND THERE ARE OTHERS, YOU KNOW, THAT GO TO 400 TO 300 DAYS CASH ON HAND, ET CETERA. SO IT'S, IT'S, IT'S A WHOLE SPECTRUM OF, UM, YOU KNOW, WHERE, UH, AIRPORTS ARE IN THE CAPITAL DOLPHIN PROGRAM AND HOW MUCH CASH ON HAND THAT THEY, THEY, THEY HAVE. SO, UM, THE, THE RECOMMENDED RECOMMENDATION HERE IS TO REPLACE THE CURRENT RATIO WITH THE DAY'S CASH ON HAND. UM, YOU KNOW, THE LOOKING BACK AT THIS FINANCIAL POLICY BACK IN FISCAL YEAR 17 AND 18, UM, WE WERE NOT, THE AIRPORT WAS NOT IN COMPLIANCE WITH THAT FINANCIAL POLICY. AND THE REASON FOR THAT IS WE HAD LARGE CAPITAL PROJECTS, UM, LIKE THE NINE GATE EXPANSION AND THE PARKING GARAGE THAT WAS ONGOING AT THAT TIME. AND, AND, AND INVOICES WORTH MILLIONS OF DOLLARS, UH, WERE SHOWING UP IN CURRENT LIABILITIES WHILE THE CASH USED TO PAY FOR THAT WASN'T IN CURRENT ASSETS. SO IT WASN'T IN COMPLIANCE. AND SO SINCE THIS IS, YOU KNOW, TRYING TO MEASURE SHORT-TERM LIQUIDITY ANYWAY, WHICH THE AIRPORT HAS AN ABUNDANCE, UH, THIS WOULD BE A BETTER MEASURE, UH, IN OUR OPINION, UH, GOING FORWARD, UM, AND THE RECOMMENDATION, WHAT NUMBER TWO, WHICH IS ALSO REPLACING SIX OR THE FINANCIAL POLICIES SIX FOR THE AIRPORT IS, UM, IS JUST REMOVING THE WORKING CAPITAL CALCULATION OUT OF THAT, UH, POLICY. UH, BECAUSE AGAIN, THE WORKING CAPITAL POLICY, I MEAN, CALCULATION IS VERY SIMILAR TO THE CURRENT RATIO CALCULATION. IT'S JUST, IT'S AN ATTRACTION WHERE IT DOESN'T, I MEAN, A DIVISION AND THE, THE ONLY THING THAT THE BOND IN DANGER ASKS FOR IS THAT WE MAINTAIN IN OUR MEAN OUR ONM RESERVE FUND 60 DAYS OF, UH, OF EXPENSES. AND WE ARE IN COMPLIANCE OF THAT. AND WE JUST WANTED TO CHANGE THE LANGUAGE THAT, UH, MORE CLOSELY REFLECTS WHAT THE [01:00:01] BOND INDENTURE STATES OR THE ONE ORDINANCE IT'S. SO, UH, NEXT, NEXT SLIDE. I THINK, UH, AUSTIN WATERS. THANK YOU. GOOD MORNING. UH, MY NAME IS JOSEPH GONZALEZ. I'M AN ASSISTANT DIRECTOR AND CHIEF FINANCIAL OFFICER FOR AUSTIN WATER. AND TODAY WE HAVE FOUR PROPOSED UPDATES TO OUR FINANCIAL POLICIES FOR FISCAL YEAR 2022. AND THE FIRST THREE RECOMMENDATIONS ARE RELATED TO KEY FINANCIAL INDICATORS THAT OUR RATING AGENCIES LOOK AT WHEN EVALUATING AUSTIN WATER'S CREDIT RATING. AND THE FOURTH RECOMMENDATION WOULD STREAMLINE THE, UH, BOARD BOARDING COMMISSION REVIEW PROCESS FOR CAPITAL PROJECTS WITHIN THE DRINKING WATER PROTECTION ZONE. THE BIGGEST DRIVING FACTOR FOR THE PROPOSED FINANCIAL POLICY CHANGES IS, UH, THE, THE LESSONS LEARNED DURING THE DROUGHT FROM 2011 TO 2015, UH, DURING THE DROUGHT AUSTIN WATER SAW DROUGHT RELATED REVENUE SHORTFALLS TOTALING $96 MILLION IN FISCAL YEARS, 2012, 2013, 2014 AND 2015 COMBINED. UM, AND, AND AS A RESULT OF A $49.4 MILLION REVENUE SHORTFALL AT THE PEAK OF THE DROUGHT IN 2014, AUSTIN WATERS DEBT SERVICE COVERAGE DROPPED TO THE BOND COVENANT LEVEL OF 1.2, FIVE TIMES, UH, ANNUAL DEBT SERVICE REQUIREMENTS. NOW, IF THE REVENUE SHORTFALL HAD BEEN, YOU KNOW, JUST $600,000 HIGHER AT AN EVEN 50 MILLION AUSTIN WATER WOULD HAVE BEEN IN TECHNICAL DEFAULT, UH, WITH ITS REVENUE BONDS, AND COULD HAVE HAD ITS BOND RATING, CALVARY DOWNGRADED. SO IT IN ADDITIONAL NOS WATER SAW ITS DAY'S CASH ON HAND, YOU KNOW, FINANCIAL METRIC, UH, DROPPED TO 53 DAYS. YOU HAVE THE CENTRAL POLICY TARGET OF 60 DAYS DURING THE PEAK OF THE DROUGHT. UM, AND IN 2014, ACTUALLY, EVEN BEFORE, UH, YOU KNOW, YEAR END, AND BEFORE YOUR END RESULTS WERE AVAILABLE TO THE THREE MAJOR CREDIT RATING AGENCIES PLACED AUSTIN WATER ON A NEGATIVE RATING OUTLOOK DOING PART TWO WEAK DEBT SERVICE COVERAGE, AND CASH RESERVE LEVELS. NOW AFTER 2014 YEAR RESULTS WERE AVAILABLE, IT BECAME CLEAR THAT AUSTIN WATER'S CURRENT FINANCIAL POLICIES WERE TOO LOW TO ENSURE COMPLIANCE WITH BOND COVENANTS AND TO PROVIDE THE STRATEGIC GUIDANCE STATED TO MAINTAIN, YOU KNOW, MINIMUM LEVELS OF FINANCIAL PERFORMANCE TO SUPPORT AUSTIN WATER'S AA BOND RATING. SO TO THAT END, WE ARE RECOMMENDING, YOU KNOW, AN INCREASE IN DEBT SERVICE COVERAGE, FINANCIAL POLICY TARGET FROM 1.5 TIMES COVERAGE TO 1.75 TIMES COVERAGE. WE'RE ALSO RECOMMENDING AN INCREASE IN THE DAY'S CASH ON AN FINANCIAL METRIC, UH, FROM 60 DAYS TO 180 DAYS. AND IN ADDITION, WE'RE RECOMMENDING AN UPDATE TO AUSTIN WATERS, CASH FINANCING TARGET FOR CIP PROJECTS FROM A MINIMUM OF 20% OF ANNUAL CAPITAL PROJECT EXPENDITURES TO A RANGE OF 35 TO 50%. NOW, I POINT OUT THAT WE ENDED FISCAL YEAR 20 WITH A DEBT SERVICE COVERAGE OF 1.9 TIMES ANNUAL DEBT SERVICE REQUIREMENTS. UH, WE ENDED THE YEAR WITH 300 DAYS CASH AND WE MAINTAINED A CASH FINANCING FUNDING PERCENTAGE OF BETWEEN 40 AND 50% SINCE, SINCE FYI 18. SO BECAUSE WE ARE CURRENTLY PERFORMING LEVELS ABOVE THE PROPOSED AMENDMENTS, WE DID NOT EXPECT THE PROPOSED CHANGES TO DRIVE FUTURE RATE INCREASES. IN FACT, UH, YOU KNOW, THESE THREE FINANCIAL METRICS, YOU KNOW, COMPLIMENT OUR LONGTERM AFFORDABILITY EFFORTS BY ENSURING THAT WE HAVE ADEQUATE RESOURCES TO WITHSTAND, YOU KNOW, WEATHER RELATED REVENUE VOLATILITY, WHILE ALSO SUPPORTING OUR LONG-TERM CAPITAL PLANNING AND DEBT MANAGEMENT EFFORTS, PARTICULARLY AS WE PLAN FOR FUTURE RESILIENCY AND, AND WATERFORD PROJECTS. FINALLY, WE'RE PROPOSING A CHANGE TO THE FINANCIAL POLICY THAT REQUIRES YOU'LL ALSO WANT TO SUBMIT CAPITAL PROJECTS FOR NEW, YOU KNOW, UH, TREATMENT PLANT PROJECTS, CAPITAL EXPANSIONS GROWTH RELATED PROJECTS LOCATED IN WITHIN THE DRINKING WATER PROTECTION ZONE, TWO, SEVERAL, UH, BOARDS OF CONDITIONS, THE WATER WASTEWATER COMMISSION, THE RESOURCE MANAGEMENT COMMISSION, UM, THE ENVIRONMENTAL BOARD PLANNING COMMISSION AND THE ZONING AND PLANNING COMMISSION. IN ADDITION, WE'RE REQUIRED TO HOLD A PUBLIC HEARING BEFORE COUNCIL, LATE INTO THE PROPOSED PROJECTS IN THE DRINKING WATER PROTECTION ZONE. AND ALTHOUGH THIS POLICY DOES NOT IMPACT OUR FINANCIAL PERFORMANCE OR OUR BOND RATING, AND WE ARE PROPOSING A MORE STREAMLINED PROCESS SINCE, UH, THE ITEMS BEFORE THESE BOARDS AND COMMISSIONS AND THE SEPARATE BUDGET PUBLIC HEARING, HAVEN'T GOTTEN HONORED, UH, YOU KNOW, ANY PUBLIC INPUT IN, IN MANY YEARS, IN ADDITION, YOU KNOW, OTHER THAN THE ANNUAL DRINKING WATER PROTECTION ZONE ITEM. AND WE HAVE LITTLE TO NO INTERACTION WITH, WITH MOST OF THE BOARDS AND COMMISSIONS. SO WE'RE PROPOSING THAT, UM, RATHER THAN GO TO ALL OF THE BOARDS AND COMMISSIONS, WE, WE FOCUS OUR EFFORTS ON THE WATER WASTEWATER COMMISSION, UM, AND, AND THE, UH, INCLUSION [01:05:01] IN THE CITY'S BUDGET PROCESS. SO WITH THAT, I'D BE HAPPY TO ANSWER ANY QUESTIONS, I BELIEVE THAT INCLUDES THE PRESENTATION. THANK YOU. UM, SO THAT'S WHAT THE QUESTIONS, UM, BUT BEFORE I DO, I JUST WANT TO FLAG THAT, UM, I THINK IT WOULD BE USEFUL, UM, IF WE COULD GET, UH, MR. GONZALEZ AND FOLKS AT AUSTIN WATER TOGETHER WITH SOME OF THE WATER STAKEHOLDERS, UM, TO REVIEW THE POLICIES AND EXPLAIN THE RATIONALE AND, AND TALK THROUGH SOME CONCERNS, UM, THAT MAY HAVE ARISEN, UM, PARTICULARLY ON THE FOUR RECOMMENDATIONS FOR AUSTIN WATER. UM, WE DO HAVE ANOTHER MEETING IN JUNE FOR AUDIT AND FINANCE. UM, SO I THINK IT WOULD BE, IT WOULD BE USEFUL TO GET, UM, YOU KNOW, TO DIVE A LITTLE BIT DEEPER AND EXPLAIN THAT. I THINK THERE'S SOME CONCERNS ABOUT, UM, YOU KNOW, THE TRADE-OFFS OF INCREASING THE BOND RATING AND BEING ABLE TO DO THINGS AT LOWER INTEREST RATES. I'M PRETTY CONFIDENT THAT FOR THOSE PIECES FOR THE FIRST THREE, THAT THERE ARE SOUND FINANCIAL REASONS FOR, FOR DOING DINGS AND HISTORY. UM, BUT WE DO HAVE A WATER FORWARD TASKFORCE AND STAKEHOLDERS WHO HAVE BEEN VERY ENGAGED IN FACTORING IN A LOT OF THESE THINGS. UM, THE FIRST RECOMMENDATION GIVES ME A LOT OF PAUSE AND AGAIN, I THINK WE NEED TO HAVE OPEN AND TRANSPARENT CONVERSATIONS, UM, YOU KNOW, SHOWING UP ON AN AUDIT AND FINANCE, WHICH IS THE APPROPRIATE WAY FOR IT TO, TO APPEAR. BUT WHEN IT APPEARS, YOU KNOW, JUST A COUPLE OF DAYS BEFORE THE MEETING MAKES IT HARD FOR THE STAKEHOLDERS TO COME, UM, AND ADDRESS US. UM, SO I'M HOPING I'M HAPPY, UM, TO BE INVOLVED IN HELPING TO CONVENE THAT WITH YOU. UM, BUT I, BUT I THINK THAT MIGHT BE AN APPROPRIATE NEXT STEP. UM, PARTICULARLY WITH RESPECT TO, UM, THE AUSTIN WATER, UM, ELEMENTS OF THE FINANCIAL POLICIES. THAT'S SOMETHING THAT YOU'RE OPEN TO MR. GONZALES. UM, IT, IT IS, I WOULD POINT OUT THAT WE HAVE HAD TWO PUBLIC STAKEHOLDER MEETINGS, UM, TO, TO DISCUSS THE, THESE CHANGES. IN FACT, UM, YOU KNOW, WHEN, WHEN WE CAME FORWARD TO COUNCIL IN 2018, UH, WITH OUR PROPOSED, UH, RATE REDUCTION, UH, YOU KNOW, 4.8% RATE REDUCTION, OR THAT THAT RATE REDUCTION WAS THE RESULT OF CONVERSATIONS AND JOINT RECOMMENDATIONS BETWEEN, YOU KNOW, MANY OF OUR STAKEHOLDERS, IT INCLUDED, YOU KNOW, OUR, OUR LARGE VOLUME CUSTOMERS, UM, YOU KNOW, THE, OUR MULTIFAMILY CUSTOMERS, THEY AUSTIN, UH, YOU KNOW, APARTMENT ASSOCIATION, UH, LOW INCOME ADVOCATES. WE HAD A RESIDENTIAL RATE ADVOCATE, UM, AS YOU KNOW, UM, SO WE HAD REPRESENTATIVES FROM ALL OF OUR CUSTOMER CLASSES IN THAT PROCESS. AND, AND IN THAT PROCESS, WE AGREED TO A PUBLIC STAKEHOLDER PROCESS BEFORE PROPOSING ANY, ANY FINANCIAL POLICY CHANGES. AND TO THAT END, YOU KNOW, LIKE I SAID, WE HAD TWO PUBLIC STAKEHOLDER MEETINGS, UM, INCLUDING HIRING AND RESIDENTIAL RATE ADVOCATE, UH, TO, UH, PROVIDE YOUR RECOMMENDATIONS AND, UM, AND INPUT ON, ON THE PROPOSED CHANGES. UM, AND YOU KNOW, THE RESIDENTIAL RATE ADVOCATE, UM, DID NOT OPPOSE, UH, THREE OF THE FOUR, UH, RECOMMENDED CHANGES. INITIALLY WHEN WE, WHEN WE MET WITH OUR, OUR STAKEHOLDERS, WE WERE PROPOSING A DEBT SERVICE COVERAGE OF ONE 85. UH WE'VE SINCE DROPPED THAT TO ONE 75 BASED ON FEEDBACK WE'VE RECEIVED, UH, WE WERE PROPOSING 245 DAYS CASH WE'VE SINCE DROPPED THAT TO 180 DAYS. AND BASED IN ART BY THE RESIDENTS, GREAT ADVOCATES RECOMMENDATION OF ONE 50 DAYS. UH, BUT WE, WE DECIDED TO GO WITH ONE 180 DAYS, WHICH BELIEVES IN LINE WITH, UH, YOU KNOW, THE CONVENTION CENTER. AND SO WE HAVE HAD THAT, THAT, YOU KNOW, PUBLIC CONVERSATION WE'RE HAPPY TO, TO DO MORE IF NECESSARY. UM, WE DO UNDERSTAND THAT, UM, YOU KNOW, MR. DAVEY WITH, UH, UM, C CARE HAS REACHED OUT TO, TO MAYOR AND COUNCIL. UM, BUT YOU KNOW, WE, WE, WE DO BELIEVE THAT THE PROPOSED CHANGES, YOU KNOW, UH, NOT ONLY WON'T DRIVE FUTURE RATE INCREASES THERE, THEY'RE SUPPORTIVE OF MORE RATES STABILITY. UM, YOU, PARTICULARLY AS WE HEAD INTO PERIODS OF, UH, INCREASED, UM, CAPITAL PROGRAMMING AND, UM, THE, THE PROPOSED LEVELS AND THE CURRENT LEVELS THAT WE'RE OPERATING AT, UM, YOU KNOW, PROVIDE SUFFICIENT REVENUES TO, UM, TO PROVIDE FOR OUR LONG-TERM CAPITAL PLAN, UM, BUT ALSO SUPPORT OUR DEBT MANAGEMENT PLAN. WELL, THANK YOU. I WAS UNAWARE OF THOSE STAKEHOLDER MEETINGS. WERE THERE ANY ENVIRONMENTAL GROUPS REPRESENTED AT THOSE, OR JUST, UM, PAIRS? UM, THERE WERE NOT ANY [01:10:01] ENVIRONMENTAL GROUPS. UM, WE DID, SO WE INVITED THE SAME FOLKS THAT PARTICIPATE IN, IN THE COST OF SERVICE STUDY, UM, AS WELL AS ADVERTISED IT ON OUR SOCIAL MEDIA, ON OUR, ON OUR WEB PAGE. UH, BUT, BUT IN THE SOCIAL, UH, WE'RE IN THE LAST COST OF SERVICE STUDY, UH, WE, WE DID, UM, WE DID SEEK INPUT FROM, FROM ENVIRONMENTAL GROUPS, BUT THEY DIDN'T REALLY PARTICIPATE IN THE PROCESS. AND, UM, WE, WE, WE DID NOT DIRECTLY INVITE THEM AS PART OF THE PROCESS. WE'D BE HAPPY TO DO THAT. SO THAT'S THE GROUP OF FOLKS THAT I'M PARTICULARLY INTERESTED IN MAKING SURE THAT WE CAN HAVE AN OPEN AND TRANSPARENT DISCUSSION WITH, UM, SO THAT THEY CAN GET UP TO SPEED ON THE FINANCIAL DETAILS OF THE PROBLEM THAT YOU'RE TRYING TO SOLVE AND THE SOLUTIONS THAT YOU'RE PROPOSING. UM, AND THEN, YOU KNOW, UNDERSTANDING FROM THEIR PERSPECTIVE, EVEN IF THEY'RE NOT COMING AND BEING ACTIVE AT THE COMMITTEE, HOW HAVING THOSE OPPORTUNITIES AND THOSE NOTICES AT THE COMMITTEES OF YOUR COMING, UM, ASSIST THEIR EFFORTS TO, TO MONITOR. AND, YOU KNOW, IT'S NOT A BAD THING IF YOU'VE BEEN HITTING THE MARK AND THEY HAVEN'T HAD TO RAISE QUESTIONS FOR THE LAST FEW YEARS. UM, BUT IT IS A POSITIVE THING IF THEY'RE ABLE TO SEE THOSE, UM, SURFACED AND REVIEWED. UM, AND I KNOW AS A, AS A COUNCIL MEMBER, I FELT BETTER, YOU KNOW, FOR THE PROJECTS THAT WE CANNOT RE VIEW ON OUR OWN IN GREAT DEPTH, UM, KNOWING THAT SOME OF THOSE REVIEW PROCESSES AND STEPS AND EXTRA EYES ARE ON THOSE PROGRAMS. UM, SO, UM, MY OFFICE CAN WORK WITH YOU AND WE CAN CONVENE SOME OF THOSE FOLKS. AND THEN WE CAN, UM, YOU KNOW, IT SOUNDS LIKE, UM, MS. LANG WAS SUGGESTING THAT YOU ULTIMATELY WANT, YOU KNOW, APPROVAL OF THE POLICIES FROM THIS COMMITTEE IN ORDER TO PUT IT IN THE BUDGET THAT COMES FORTH TO COUNCIL. UM, SO I THINK WE COULD PUT IT ON THE, PROBABLY PUT IT ON THE JUNE AGENDA AND ADDRESS THAT JUST IT THEN, UM, AS CHEERFUL. THANKS. AND THANKS CIL FOR THE PRESENTATION. I HAVE TWO QUESTIONS ON THE WATER, FINANCIAL POLICIES AND ONE ON AVIATION. UM, WE'LL START WITH WATER FINANCIAL POLICIES. COULD YOU PULL UP THE FOUR RECOMMENDATIONS SLIDE? I WANTED TO FOCUS ON RECOMMENDATION FOR WHICH I THINK THE CHAIR WAS TALKING ABOUT AS WELL. UM, SO I HAVE A LITTLE BIT OF PERSONAL EXPERIENCE HAVING BEEN, UM, A COMMISSIONER ON WATER WASTEWATER, UM, PROBABLY 15, MAYBE EVEN 20 YEARS AGO. AND I KNOW FROM BEING ON THAT COMMISSION, THAT MOST OF THE PEOPLE WHO ARE APPOINTED TO THE COMMISSION HAVE A PARTICULAR LENS THAT THEY LOOK THROUGH AS THEY REVIEW THE WATER DEPARTMENT AND THE SPECIFIC ENGINEERING CONTRACTS AND THE TECHNICAL DOCUMENTS. AND I'LL JUST SAY, AS AN ASIDE, IT WAS A MASSIVE UPWARD, UPWARD, UH, WALK FOR ME TO LEARN ALL OF THE TECHNICAL ASPECTS OF WHAT'S REQUIRED TO BE A GOOD FUNCTIONING WATER WASTEWATER COMMISSIONER. WHAT THEY DON'T NECESSARILY BRING TO THE TABLE ARE THE, THEY MET, I MEAN, I CERTAINLY DID, BUT MY LENS, WHICH WAS ENVIRONMENTAL, UH, SENSITIVITY, I CERTAINLY BROUGHT THAT TO THE TABLE AND ACTED ON IT, BUT THAT WAS A MINORITY VIEWPOINT AND IT DIDN'T GET AS MUCH. UM, IT DIDN'T GET AS AS MUCH ATTENTION OR DEPTH OF REVIEW AS IT MIGHT HAVE IN, UH, AN ENVIRONMENTALLY FOCUSED COMMISSION, WHICH IS WHY I BELIEVE THAT THE, UH, CAPITAL PROJECTS AND THE DRINKING WATER PROTECTION ZONE ARE REQUIRED TO GO THROUGH THE ENVIRONMENTAL COMMISSION. I WOULD NOT BE SUPPORTIVE OF EXCISING THEM AND ELIMINATING THEM FROM THE REVIEW PROCESS FOR THE SPECIFIC REASONS THAT THE CHAIR WAS, UM, WAS DISCUSSING AND THE ONES THAT I'M BRINGING TO THE TABLE, WHICH, AND THAT'S, UH, WHICH ARE THAT THEIR PERSPECTIVES ARE VALUABLE. AND YOU WON'T FIND PERSPECTIVES, UM, WITH THE AMOUNT OF DEPTH AND INSIGHT AS YOU WILL, IF YOU TAKE THESE ITEMS THROUGH THE ENVIRONMENTAL COMMISSION, UM, WITH REGARD TO THE PLANNING COMMISSION OR THE ZONING AND PLANNING COMMISSION, THE DIFFERENCE BETWEEN THOSE TWO AND THEY ARE EQUAL, AND THEY BOTH DO SIMILAR WORK, THEY, THE MAIN DIFFERENCE BETWEEN THE TWO IS IF YOU HAVE A NEIGHBORHOOD PLAN, THEN ZONING CHANGES ARE SENT TO THE PLANNING COMMISSION. IF YOU DO NOT, WHICH TENDS TO BE PERIPHERAL, UH, THE OUTER RING OF THE DOUGHNUT, IF YOU WILL. THOSE, UH, ZONING CASES GO TO THE ZONING AND PLANNING COMMISSION, THUS BOTH OF THEM ARE EQUALLY IMPORTANT AND SERIOUS HIGH LEVEL COMMISSIONS, BUT THEY DEAL IN DIFFERENT AREAS OF TOWN. AND SO DEPENDING WHERE IN THE DRINKING WATER PROTECTION [01:15:01] ZONE, WHICH IS WHAT YOU SPECIFICALLY CALL OUT HERE, I MAYBE YOU WOULD BE GOING TO BOTH COMMISSIONS, BUT THE ONE WITH THE, WITH THE JURISDICTION WOULD BE THE ONE WHERE THE CAPITAL PROJECT IS CITED. SO IT MAY BE THAT THAT PART IS BEING DOUBLED UP WHERE IT DOESN'T NECESSARILY NEED TO BE. I DON'T KNOW, BECAUSE I HAVEN'T SEEN YOUR EXAMPLES, BUT I WOULD JUST ASK YOU TO REVIEW THAT AND CONSIDER THE FACT THAT ONE AREA WHERE THE CITY CAN DO BETTER. AND WE TALK ABOUT IT A LOT ON THE DIOCESE IS IN PLANNING. AND, UM, IN FACT, THE CITY HAS SOMETIMES BEEN CRITICIZED AS NOT SUFFICIENTLY PLANNING, PARTICULARLY FOR THE FUTURE AND WE'RE TALKING. AND WHEN WE ARE TALKING ABOUT LONG-TERM AND EXPENSIVE, UH, INFRASTRUCTURE PROJECTS, LIKE A FRICKING WATER PRODUCTION ZONE CAPITAL PROJECT, THAT WOULD BE IN THAT CATEGORY, IT'S IMPORTANT TO MAKE SURE THAT AS MUCH INFORMATION PENETRATES INTO THE COMMUNITY, THAT PEOPLE HAVE ENOUGH UNDERSTANDING OF WHAT IT IS THAT IS HAPPENING, MAYBE DOWN THE STREET FROM THEM OR OVER THE HILL, AND THAT WE ARE AS TRANSPARENT AND ACCOMMODATING AS POSSIBLE WITH ALL THE INFORMATION. SO, UM, SO I LOOK FORWARD TO THE ADDITIONAL INFORMATION THAT YOU ALL WILL BE BRINGING US IN THE MOUNTAINS AND INCLUDING IN THE MONTH THAT WE HAVE BETWEEN NOW AND, UM, AND OUR NEXT AUDIT AND FINANCE FINANCE COMMITTEE MEETING. SO THAT'S MY COMMENT ON YOUR RECOMMENDATION FOR, AND MY ASK OF YOU FOR ADDITIONAL, UM, CONSIDERATION OF THAT. AND THEN THE QUESTION THAT I HAVE A SECOND QUESTION I HAVE FOR YOU, AND I'M THE ONE I HAVE FOR AVIATION, SAME QUESTION IN RECOMMENDATION THREE HERE AND ON THE AVIATION FINANCIAL POLICY SLIDE. IT WAS RECOMMENDATION ONE WHERE WE'RE TALKING ABOUT THE NUMBER OF DAYS IN RESERVE. I WANTED TO KNOW WHAT THE DOLLAR FIGURE AND THE PERCENTAGE OF THE TOTAL BUDGET IS FOR, UH, THE INCREASES IN THE CASH RESERVES. AND IF YOU CAN'T, IF YOU DON'T HAVE IT AT HAND, THAT'S OKAY. MAYBE YOU COULD SEND TO US IN A, IN A MEMO. RIGHT. AND, AND SO WHAT I WOULD SAY FROM AN AUSTIN WATER PERSPECTIVE, UH, YOU KNOW, WE'RE, WE'RE CURRENTLY AROUND 300 A DAY'S CASH. AND, UM, I BELIEVE THAT'S, UH, THAT'S, THAT'S ABOUT IT, CANDY, UH, BUT, BUT THAT'S, UH, YOU KNOW, AROUND 300 MILLION IN CASH, BUT WE'RE, WE'RE, WE'RE CURRENTLY THERE. SO, UM, YOU KNOW, THERE, THERE, THERE WOULDN'T BE AN INCREASE, YOU KNOW, THESE CHANGES, YOU KNOW, FOR THE, FOR THE THREE FINANCIAL, UH, METRICS, UM, THERE WOULDN'T BE A CHANGE, UM, YOU KNOW, IN TERMS OF RATES OR, OR, OR WHATEVER. UM, JUST, JUST SO YOU KNOW, I'M ALL FOR RESERVES. AND I THINK ESPECIALLY LOOKING FORWARD, THERE MAY BE, UM, UH, THE NEED TO INCREASE THEM, UH, IS LIKELY MORE CRITICAL NOW THAN IT WAS EVEN IN THE PAST FEW YEARS, BECAUSE WE'RE LOOKING AT A VERY DIFFERENT ECONOMIC LANDSCAPE IN A LOT OF WAYS. SO I JUST KIND OF WANTED TO WRAP MY HEAD AROUND THE, THE SCALE OF THE SIZE OF THE INCREASE SO THAT I COULD SORT OF COMPARE IT AGAINST THE, THE FINANCIAL POLICY THAT WE HAVE FOR GENERAL CITY OF AUSTIN RESERVES AND HOW THESE TWO KIND OF LINE UP WITH THOSE. AND I REALIZE YOU'RE TALKING ABOUT YOURS, IS THE CASH AND ON THE AVIATION, WAS THAT ALSO CORRECT? YES, IT WAS, IT WAS BASED CASH ON HAND. SO WE HAVE CURRENTLY, UH, IF YOU LOOK AT OUR UNRESTRICTED CASH, IT'S ABOUT 212 MILLION AS OF LAST WEEK, AND IT EQUATES TO ABOUT 600. AND RIGHT NOW, YOU KNOW, IF YOU CALCULATE BASED ON OUR CURRENT YEAR ESTIMATE, IT'S ABOUT, UH, 670 DAYS CASH ON HAND. SO THE 400 IS A THRESHOLD. WE FEEL LIKE, YOU KNOW, AS WE EMBARK ON, UM, LARGER CAPITAL PROJECTS THAT WE ENVISION IN THE FUTURE, UH, THAT IT MIGHT DIP DOWN TO 500 TO 400. SO, BUT MINIMUM WHAT OUR GOAL IS TO MAINTAIN IS 600 DAYS CASH ON HAND IS OUR GOAL, BUT IN MINIMUM, YOU DON'T WANT TO GO BELOW FOUR. I THINK THAT WE'RE GOING TO NEED THAT CUSHION AND WE'VE GUARDED ZEALOUSLY. AND THEN ON, ON WATER, DO YOU KIND OF HAVE A GENERAL BALLPARK SIMILAR TO WHAT ORIGINALLY FIFTHS GAVE ME? YEAH. SO, SO WE'VE GOT FOR, FOR EACH OF THE THREE METRICS THAT WE'RE PROPOSING CHANGES TO, WE'VE GOT, UM, INTERNAL TARGETS, FOR EXAMPLE, FOR, FOR DEBT SERVICE COVERAGE, W WE'RE TARGETING FROM A MANAGEMENT PERSPECTIVE, WE'RE TARGETING 1.85. UH, SO THE 1.75, YOU KNOW, OBVIOUSLY, UH, YOU KNOW, AS, AS I MENTIONED, UM, YOU KNOW, W THERE, THERE'S A LITTLE BIT OF CONFESSION THERE, YOU KNOW, TO, TO PROVIDE A LITTLE BIT MORE CUSHION SO THAT, UM, SO THAT 1.85, YOU KNOW, DOES IT POTENTIALLY HAVE AN IMPACT [01:20:01] OR DRIVE FUTURE RATE INCREASES? UM, WHICH IS ONE OF THE CONCERNS THAT, THAT I THINK, YOU KNOW, UM, OUR, OUR RATE PAYERS HAVE, AND THEN FROM A CASH PERSPECTIVE, YOUR MANAGEMENT TARGET IS 245 DAYS OF OPERATING CASH. UM, BUT IN ADDITION, WE'VE GOT 120 DAYS IN OUR, UM, REVENUE STABILITY RESERVE ON. AND, UM, SO, YOU KNOW, THE, THE, THE 245 DAYS, YOU KNOW, IN COMPLIMENT WITH THE, THE 120 DAYS IN OUR REVENUES OR FUND, IS THIS ALMOST A FULL 365 DAYS OF CASH RESERVES ON THE WATER SIDE, WHICH IS WHERE WE SEE MORE REVENUE VOLATILITY. SO I JUST WANT TO CLARIFY THAT FROM A FINANCIAL PERSPECTIVE, YOU'RE ALREADY MEETING ALL OF THESE POLICIES. YOU'RE TRYING TO ENSHRINE THESE IN THE FINANCIAL POLICIES TO REAP THE BENEFIT OF THAT WITH RESPECT TO THE BOND RATING AGENCIES AND HOW THEY VIEW WHAT YOU'RE DATING, BECAUSE THEY DON'T KNOW WHAT YOUR INTERNAL TARGETS ARE, BUT THE FINANCIAL POLICIES SIGNAL A COMMITMENT, UM, TO THIS HIGHER STANDARD OF ORDER. IS THAT CORRECT? WE DO COMMUNICATE TO, TO THE BOND RATING AGENCIES, WHAT OUR MANAGEMENT TARGETS ARE. SO, UM, YOU KNOW, EVERY YEAR THEY UNDERSTAND THAT WE'RE TARGETING 245 DAYS CASH, UH, PLUS THE 120 DAYS AND OPERATE, YOU KNOW, IN REVENUE RESERVE FUND. UM, THEY, THEY KNOW WE'RE TARGETING ONE EIGHT, FIVE, UH, BUT WITH THESE DO SIGNAL, UM, SEND A SIGNAL TO THE RATING AGENCIES THAT, YOU KNOW, WE'RE, WE'RE TRYING TO INCREASE THE MINIMUM LEVEL SO THAT, YOU KNOW, UM, DURING THE TIME OF DROUGHT, IF WE, YOU KNOW, AND, AND, AND IT'S, YOU KNOW, THERE'S A VERY REAL POSSIBILITY THAT WE'RE HEADING INTO, UH, ANOTHER DROUGHT. AND, UM, SO WHAT THESE FINANCIAL POLICIES SIGNIFY IS THAT FROM A LONG-TERM PLANNING PERSPECTIVE, IF IT LOOKS LIKE WE'RE HEADING INTO DROUGHT, WE NEED TO PROBABLY START MAKING FINANCIAL DECISIONS TO ENSURE THAT THAT WE'RE MAINTAINING, YOU KNOW, WE'RE STILL MAINTAINING STRONG LEVELS OF RESERVES. WE'RE STILL MAINTAINING ADEQUATE LEVELS OF DEBT SERVICE COVERAGE, UH, TO, TO SUPPORT OUR OPERATION, EVEN WHEN REVENUES ARE MORE CONSTRAINED. AND THE REAL VALUE OF FINANCIAL POLICIES IS THAT THEY SUPPORT, YOU KNOW, THE LONG-TERM FINANCIAL PLANNING, UH, FOR, FOR THE UTILITY, BUT, BUT ALSO INSTITUTIONALIZED STRONG IF FINANCIAL MANAGEMENT PRACTICES, UM, OUR, UH, I STARTED WITH AUSTIN WATER IN THIS ROLE IN DECEMBER AND REPLACED DAVID ANDREWS, WHO HAD BEEN WITH THE UTILITY, UH, FOR 33 YEARS. AND, AND SO, SO OVER THE LAST 30 YEARS, DAVID SAW, YOU KNOW, MULTIPLE DROUGHTS AND, AND, UM, YOU KNOW, LIVE THROUGH THE DROUGHT OF RECORD YOU IN TERMS OF 2011, 2015. AND I WAS HERE DURING THAT TIME. BUT, UM, YOU KNOW, THE, THE, THE REAL BENEFIT OF THESE FINANCIAL POLICY CHANGES IS IF THEY LIVE BEYOND ME AND LIVE BEYOND DAVID. AND, AND SO WHEN I'M GONE, IF THERE'S SOMEBODY WHO HASN'T BEEN THROUGH, UM, A DROUGHT THAT THEY PROVIDE, YOU KNOW, UH, STRONG MANAGEMENT AND GUIDANCE TO, UH, TO BE ABLE TO WEATHER THOSE TYPES OF, OF, UM, UH, REVENUE, POTENTIAL REVENUE CHALLENGES THAT, THAT WE HAVE IN THE FUTURE. AND SO, I GUESS MY QUESTION, UM, YOU KNOW, JUST TO MAKE SURE I UNDERSTAND YOUR CONCERN IS PRIMARILY ON, ON RECOMMENDATION FOR, OR DO YOU HAVE, YOU KNOW, ALSO CONCERNS ON THE THREE FINANCIAL METRICS BECAUSE YOU KNOW, THOSE THREE, YOU KNOW, UM, YOU KNOW, I THINK ARE TIED TOGETHER IN TERMS OF OUR FINANCIAL PERFORMANCE. AND THE FOURTH REALLY IS ABOUT, YOU KNOW, THE ADMINISTRATIVE, AND THEN YOU TRY AND STREAMLINE THE PROCESS. WE, WE HAVEN'T HAD, UM, YOU KNOW, REALLY MUCH INPUT FROM, UH, FROM, FROM ANY OF THE BOARDS AND COMMISSIONS, AND THOSE ITEMS GENERALLY PASS WHEN CONSENT WITH THOSE DISCUSSION. UM, BUT WE'RE NOT, YOU KNOW, UM, IF OF THE FOUR, THAT'S THE ONE THAT WE'RE, WE'RE PROBABLY THE, THE LEAST CONCERNED ABOUT IT WOULD MAKE OUR LIVES EASIER, BUT WE UNDERSTAND THAT FROM A TRANSPARENCY PERSPECTIVE, UM, THAT, YOU KNOW, THERE MAY BE A DESIRE TO, TO CONTINUE AS WE ARE, OR, OR, OR MAYBE JUST, YOU KNOW, MAYBE DROP ONE, DROP TWO, WHATEVER THE CASE MAY BE. UM, THAT'S NOT A FINANCIAL METRIC AND, AND FINANCIAL PERFORMANCE DRIVEN POLICY, WHEREAS THE OTHER THREE ARE, WELL, I'LL JUST JUMP IN SINCE I, I PUT YOU ON THE SPOT WITH THE QUESTIONS THAT YOU HAD, THE FINANCIAL POLICIES, THAT FIRST THREE, I JUST WAS LOOKING FOR ADDITIONAL INFORMATION TO KIND OF SLOT IT IN WITH A KIND OF A THOUGHT PROCESS THAT I HAD. IT'S NUMBER FOUR, THAT I, I, AS I MENTIONED, I AM DEFINITELY LOOKING FOR ADDITIONAL CONSIDERATION AT YOUR END. AND I WILL SAY THAT JUST BECAUSE THE PUBLIC ISN'T SHOWING UP FOR A PUBLIC HEARING DOES NOT MEAN THAT THEY'RE NOT PAYING ATTENTION OR THEY DON'T CARE. I MEAN, IT'S ACTUALLY A GOOD THING THAT WE, UM, THAT PEOPLE ARE, ARE GENERALLY IN A GOOD PLACE WITH THE POLICIES, BUT I THINK WE START DOWN, UM, UH, THE WRONG ROAD, IF WE TAKE THAT TO MEAN THAT WE NO LONGER HAVE TO, [01:25:01] UM, TO FORTIFY THE PUBLIC'S KNOWLEDGE ABOUT WHAT WE'RE DOING HERE BY STOPPING WITH THE PUBLIC HEARINGS AND THE PUBLIC PROCESSES. OKAY. SO ANYWAY, THANKS FOR THE ANSWERS ON, ON MY QUESTIONS. I APPRECIATE THAT FROM BOTH OF YOU GENTLEMEN, THAT'S THE ONE PHOTO. YEAH. I'LL JUST REGISTER MY, UM, I'M STILL NOT UNDERSTANDING ENTIRELY THE RATIONALE FOR NUMBER FOUR. AND I'M JUST GONNA NOTE THAT THAT'S WHEN THAT GIVES ME PAUSE AND I'M GOING TO BE TALKING WITH, WITH, UM, DIFFERENT STAKEHOLDERS ABOUT THE RECOMMENDATIONS WITH REGARD TO THAT ONE. I DON'T KNOW IF STAFF HAD ANY, ANY ADDITIONAL INFORMATION THEY WANT TO OFFER ABOUT THE RATIONALE, OTHER THAN WHAT WE JUST HEARD ABOUT STREAMLINING THE PROCESS, BUT THAT'S, I'M JUST NOTING THIS FOR THE COMMUNITIES, UH, FOR THE, MY COLLEAGUES BENEFIT. YEAH, REALLY THE BIGGEST DRIVING FACTOR FOR THAT ONE IS, UH, YOU KNOW, BECAUSE, YOU KNOW, WE, WE ARE REQUIRED TO GO TO THE FIVE BOARDS AND COMMISSIONS, IT TAKES, UM, YOU KNOW, IT TAKES SOME PLANNING TO DO AND, AND, AND IN TERMS OF COORDINATING WITH THE MEETINGS. UH, BUT, BUT, YOU KNOW, HONESTLY, UH, YOU KNOW, WE, WE, WE'VE GOT THE SAME PRESENTATION, WE'VE GOT THE SAME MATERIALS. UM, IT'S REALLY JUST A MATTER OF SHOWING UP AND PARTICIPATING IN THOSE MEETINGS. UM, YOU KNOW, THAT'S THAT, THAT POLICY, THAT PROPOSED POLICY, UM, YOU KNOW, IF COUNCIL HAS CONCERNS, UH, THAT'S THE, THE ONE THAT I'VE, UH, WOULD, UH, YOU KNOW, BE MOST AMENABLE TO, TO EITHER POSTPONING A CHANGE OR IN HAVING FURTHER DISCUSSION OR, YOU KNOW, UH, BUT, BUT THE OTHER THREE ARE REALLY MORE ABOUT, UM, YOU KNOW, OUR, OUR LONGTERM FINANCIAL PLANNING OR OUR BOND RATINGS AND, AND OUR OVERALL FINANCIAL PERFORMANCE. AND AGAIN, MR. , I THINK I'LL JUST, UM, YOU KNOW, CONVENE SOME FOLKS TO, TO, TO MEET WITH YOU WHO IN THE ENVIRONMENTAL COMMUNITY THAT MAY HAVE SOME QUESTIONS. I THINK THAT TRANSPARENCY AND THE OPEN CONVERSATION AND THE ABILITY OF YOU TO, UM, EXPLAIN THE VALUE OF THOSE AND WHAT THOSE MEAN IN PRACTICE, UM, FOR THE FIRST THREE. AND THEN FOR THEM TO BE ABLE TO EXPLAIN HOW THEY'RE, HOW THEY'RE VIEWING THE OPPORTUNITY TO, TO SPEAK IN THESE COMMISSIONS OR TO HAVE THE MATERIAL PRESENTED THERE WHERE THEY CAN SEE IT. UM, I JUST THINK THAT THAT'S A FAIRLY EASY NEXT STEP. UM, I THINK WE MAY END UP MODIFYING OR NOT MOVING FORWARD WITH RECOMMENDATION FOR, UM, BUT SINCE I DON'T HAVE THEIR FEEDBACK ON THE FIRST THREE, OTHER THAN THE KIND OF THE GUT REACTION, I THINK, YOU KNOW, MY SENSE IS ON THOSE FIRST THREE, IT'S REALLY A MATTER OF PROVIDING THE EDUCATION AND UNDERSTANDING OF WHAT WE'RE TRYING TO ACCOMPLISH AND WHAT THAT DOES OR DOESN'T CONSTRAIN US TO AND HOW THAT'S HELPFUL, UM, FOR, FOR THE UTILITY. UM, SINCE THEY WERE NOT PART OF THE STAKEHOLDER CONVERSATIONS, I JUST THINK THEN WE DON'T GET TO, WE DON'T GET TO JULY OR AUGUST WHEN WE'RE DEBATING THE BUDGET AND HAVE TO SPEND TIME ON THIS. UM, WE CAN GET THOSE QUESTIONS ANSWERED, UM, AND, AND NOT GET DIVERTED AT THE LAST MINUTE, DEALING WITH SOMETHING THAT'S REALLY JUST A MATTER POTENTIALLY OF EVERYONE BEING IN THE SAME ROOM AND GETTING, GETTING THE INFORMATION. WE'D BE HAPPY TO DO THAT. GREAT. THANK YOU. UM, IF THERE ARE NO FURTHER QUESTIONS, UH, THANK YOU ALL FOR BEING HERE. OUR PLAN WILL BE TO PUT THIS ON THE, UM, JUNE AGENDA FOR THE VOTE ON IT, UM, WITH ANY CHANGES THAT COME FORWARD OUT OF THOSE DISCUSSIONS AND, AND MY OFFICE WILL BE IN TOUCH, UM, WITH, UH, MR. GONZALEZ SLANG, IF SHE WANTS TO BE A PART OF THAT AS WELL. I DON'T, I DON'T KNOW IF THAT'S NECESSARY, BUT, UM, WE'LL INCLUDE YOU AS WELL. UM, COMES A MEMBER, HAVE A MADISON QUESTION, OR YOU JUST POP IT IN FOR WILDFIRE WITH THE SCREEN ON GOOD TO SEE YOUR FACE. THANK YOU. I APPRECIATE THAT. I WAS JUST GOING TO POP IN TO SAY, THANKS FOR HAVING ME. I APPRECIATE YOU. I'LL LET ME LISTEN. AND I HAVE AN 11 O'CLOCK, BUT I REALLY APPRECIATE BEING ABLE TO LISTEN IN TO THESE. SO THANKS, THANKS FOR, UH, FOR ALLOWING US TO DO THAT. OUR PLEASURE. UM, WELL, THANK YOU EVERYONE FOR SHARING THIS INFORMATION. I WILL MOVE FORWARD ACCORDINGLY. UM, [4. Wildfire Audit Update.] OUR LAST MAJOR ITEM BEYOND, UM, DISCUSSING WHAT WILL GET FUTURE MEETINGS, WHICH IS THE WILDFIRE AUDIT UPDATE. I BELIEVE WE HAVE, UM, THE STOKES. ARE YOU LEADING US OFF OR ARE THE FIREFOX? I CAN CERTAINLY INTRODUCE IT. UM, I DON'T SEE THE FIREFOX ON YET, BUT IT MAY JUST BE THAT I CAN'T SEE EVERYTHING AT ONCE. EVERYBODY DON'T WANT TO SEE AUSTIN FD, BUT I DON'T SEE THE PICTURE YET. ALL RIGHT. LET'S GIVE THEM JUST A SECOND TO GET MOVED OVER. I'LL GO AHEAD. AND I THINK THEY'RE OVER THERE JUST IN THE ROOM THERE. OKAY. EXCELLENT. UM, ALL RIGHT. SO, SO THIS AUDIT, UM, IS RELATED TO AN AUDIT THAT WE RELEASED, I BELIEVE IN OCTOBER OF 2019 ON WILDFIRE [01:30:01] PREPAREDNESS OF THE CITY. AND, UM, WE, UH, PERIODICALLY DEPARTMENTS COME BACK, UM, PARTICULARLY AT THE REQUEST OF THE MEMBERS OF THIS COMMITTEE, UM, DEPARTMENTS COME BACK AND PROVIDE AN UPDATE IN THIS CASE, THE DEPARTMENTS PROVIDING, UM, AUSTIN FIRE DEPARTMENT. AND, UM, ALSO THERE WERE RECOMMENDATIONS TO PART. SO, UM, WITH THAT, I BELIEVE THEY HAVE A PRESENTATION AND I WILL TURN IT OVER TO, UM, LEAD FROM THERE FROM AUSTIN FIRE. THANKS SO MUCH FOR THE OPPORTUNITY TO PRESENT. THEN, UH, IT WAS GOING TO START OFF. IT'S GOING TO BE CHIEF STEWART AND MR. JONES WILL BE HERE AS WELL AS, UH, CHIEF VOCA THINGS BE LIKE, YOU CAN GO AHEAD AND FORWARD TO THE NEXT SLIDE, PLEASE. SO THE FIRST PORTION OF OUR UPDATE IS RELATED TO RECOMMENDATION NUMBER ONE, UM, WHICH ASKS THAT WE ENGAGE ALL ENTITIES WITH RESPONSIBILITY, FOR MITIGATION WITHIN THE CITY, AND DEVELOP A SYSTEM FOR TRACKING AND COMMUNICATING THOSE EFFORTS ON BOTH INTERNALLY AND EXTERNALLY TO BRING TRANSPARENCY TO ALL THE GREAT WORK THAT, UM, THE CITY OF AUSTIN IS DOING TO MITIGATE WILDFIRE RISKS. UH, WE TOOK THIS RECOMMENDATION A STEP FURTHER AND DEVELOPED A GIS BASED PLATFORM CALLED THE WILDFIRE HUB, WHICH YOU CAN EASILY GET TO BY GOOGLING THAT ILLUSTRATES OUR COLLECTIVE EFFORTS, WHICH ARE ALIGNED WITH THE NATIONAL COHESIVE WILDFIRE STRATEGY. THAT EFFORT HELPS US ENSURE THAT OUR LANDSCAPES RESILIENT TO THE CATASTROPHIC IMPACTS OF WILDFIRE, THAT OUR COMMUNITIES CAN EXPERIENCE A FIRE WITHOUT SIGNIFICANT LOSS OF LIFE OR PROPERTY, AND THAT OUR FIRE DEPARTMENT AND OUR FIRST RESPONDERS ARE POSED TO EFFECTIVELY RESPOND TO THOSE WILDFIRES WILDFIRES AND TAKE ADVANTAGE OF ALL THE GREAT WORK THAT OTHER MEMBERS OF THE CITY HAVE DONE TO CREATE AN ENVIRONMENT THAT LENDS ITSELF TO OPERATIONAL SUCCESS DURING THOSE WILDFIRES, WHEN THEY DO OCCUR. NEXT, WE'RE REAL PROUD OF THE WORK THAT'S BEEN INTEGRATED INTO THE HUB. AND WE ENCOURAGE EVERYBODY TO TAKE A LOOK OF THAT AT THE RESOURCE BECAUSE IT'S A LIVING DOCUMENT AND IT'S UPDATED IN REAL TIME BASED ON THE WORK THAT WE'RE DOING IN THE FIELDS. AND SO I'D LIKE TO GIVE YOU A LITTLE BIT OF BACKGROUND ON THE HUB AND THE ELEMENTS OF THE HUB. SO YOU CAN TAKE TIME TO EXPLORE THAT AND WHAT WE HOPE AND INTEND IS INTO THE FUTURE. MANY OF THE QUESTIONS AND RECOMMENDATIONS IDENTIFIED IN THE AUDIT WILL BE, UH, ANSWERED AND REFLECTED BY THE HUB AS ADDITION, UH, ADDITION TO THE RECOMMENDATIONS IN THE 2016 COUNCIL RESOLUTION, WHICH WE WORKED TO ENCOMPASS IN TO THE HUB AS WELL, IT'S REFLECTIVE OF OUR COLLECTIVE EFFORTS. AND YOU'LL SEE THAT, UM, IT HIGHLIGHTS OUR PARTNERSHIPS FROM ACROSS THE CITY. UH, MUCH OF THE FOCUS FOR THE AUDIT WAS ON FUELS MITIGATION, BUT WE ALSO KNOW FUELS MITIGATION IS LARGELY LESS EFFECTIVE IF IT'S NOT COUPLED WITH COMMUNITIES AND RESIDENTS TAKING ACTION TO REDUCE RISK ON THEIR PROPERTY. SO WE TRACKING BOTH THE EFFORTS TO MITIGATE FUELS RISK ON CITY OF AUSTIN PROPERTY AND THE EFFORTS TO ENGAGE AND EMPOWER OUR RESIDENTS OR COMMUNITIES ADJACENT TO THOSE AREAS TO TAKE ACTION ON THEIR SIDE OF THE FENCE. SO HIGHLY RECOMMEND THAT YOU TAKE A LOOK AT THE HUB AND DIG INTO THAT. SOME OF THE INFORMATION THAT YOU CAN FIND ON THE HUB OUR YEAR TO DATE TREATMENTS AS THE CITY. AND THAT INCLUDES ALL OF OUR LAND MANAGEMENT AGENCIES, AUSTIN, WATER PARKS, AND REC WATERSHED PROTECTION, UM, OR EVEN WORKING WITH, UM, AUSTIN ENERGY AND OTHERS THAT ARE AREN'T TRADITIONAL LAND MANAGERS, BUT MANAGE THE VEGETATION WITHIN THE CITY OF AUSTIN TO CAPTURE THOSE COLLECTIVE EFFORTS. SO MUCH WORK HAS BEEN DONE ACROSS THE CITY THAT WE WANT TO MAKE SURE THAT THAT'S ILLUSTRATED. AND YOU GO AHEAD AND SWITCH TO THE NEXT SLIDE, PLEASE. SO I'VE TOUCHED ON EACH OF THESE ELEMENTS. ONE OF THE KEY INDICATORS THAT WE DISCUSSED AT OUR LAST UPDATE TO THE AUDIT IS THE NUMBER OF TAKERS OR LINEAR FEED THAT HAD BEEN TREATED IN RESPONSE TO IDENTIFY WILDFIRE RISK. ORIGINALLY, WE HAD IDENTIFIED 647 MILES OF LENNAR, YOUR WILD LAND, URBAN INTERFACE BOUNDARY IN AUSTIN. UH, WE EVALUATED THOSE AREAS FOR FEASIBILITY OF TREATMENT BASED ON SEVERAL FACTORS, ACCESS SLOPE, TOPOGRAPHICAL FEATURES TO NARROW THAT DOWN TO WHAT WE ARE REFERRING TO AS OUR CREDIBLE ACRES, WHICH IS CURRENTLY AT 590 TREATABLE ACRES ACROSS THE CITY OF AUSTIN TO DATE WE'VE, UM, IN PLACE HAVE SHADED FUEL BREAKS ON ABOUT 15% OF THOSE OVERALL TREATABLE ACRES. SO WE'VE MADE SIGNIFICANT PROGRESS, BUT WE STILL HAVE A LOT OF WORK TO DO, UM, OUR FUELS MITIGATION CREW BECAUSE OF COVID, UM, STOOD DOWN ON FUELS TREATMENT. BUT WE USE THAT TIME TO GET STRATEGIC IN OUR FUELS MITIGATION EFFORTS AND TO GO OUT INTO THE FIELD AND EVALUATE ALL [01:35:01] OF THE SITES FOR POTENTIAL TREATMENT AND WORK WITH OUR LAND MANAGEMENT PARTNERS TO PRIORITIZE THOSE AREAS FOR TREATMENT INTO THE FUTURE. UH, SO WE'RE MUCH MORE DIALED IN ON OUR STRATEGIC APPROACH, THE FUELS MITIGATION FOR REDUCING COMMUNITY RISK IN THESE COMMUNITY PROTECTION ZONES. UM, IN ADDITION TO THAT, UM, WE'VE GOT SOME RECENT EXAMPLES OF KILZ MITIGATION PROJECTS THAT YOU CAN LOOK AT IN THE HUB. I'LL BRING TWO TO LIFE. ONE IS THE RED ROCK PROJECT IN SOUTHEAST AUSTIN, UH, THAT PROTECTS COMMUNITIES AND VALUES OF RISK IN THAT AREA. AND ANOTHER ONE IS THE YETI PARSE PAY PRESERVE AND NORTHWEST AUSTIN, UM, IN THE GESTURE COMMUNITY THAT REINFORCES ONGOING EFFORTS BY THAT COMMUNITY AND BY THE CITY OF AUSTIN TO MITIGATE WILDFIRE RISK. SO WE'RE EXPANDING OUR FUELS MITIGATION FOOTPRINT, UM, TO INCLUDE ALL AREAS WITH AT-RISK PROPERTY WITHIN THE CITY OF AUSTIN, TO ENSURE THAT WE APPLY THESE TREATMENTS WITH EQUITY IN MIND, AND WE'RE MEETING THE NEEDS OF ALL OF OUR COMMUNITY RESIDENTS AT RISK. UM, AS A RESULT OF THIS, UH, WE'VE PROTECTED JUST IN THIS YEAR, 179 HOMES FROM WILDFIRE AT A VALUE OF OVER $59 MILLION A YEAR TODAY, WE'VE PROTECTED, UH, OVER A 100 OR 1000 HOMES AT A PROPERTY VALUE OF OVER $700 MILLION. SO WE CONTINUE TO GET A GOOD RETURN ON OUR INVESTMENT FOR OUR FIELDS MITIGATION EFFORTS. AND WE'RE REINFORCING THOSE BY ENGAGING COMMUNITIES TO DO THE WORK. AS WE MENTIONED ON THEIR SIDE OF THE FENCE, THAT WILL BE OUR UPDATE FOR RECOMMENDATION ONE WE'LL, WE'VE GOT ONE MORE SLIDE, BUT I THINK WE SPOKE TO THOSE POINTS ON THE FOLLOWING SLIDE. WE DID SUBMIT A FOLLOWUP REPORTS AS REQUESTED TO THE CITY MANAGER. WE UPDATED THE WILDFIRE COALITION. THIS IS OUR AUSTIN AND TRAVIS COUNTY COALITION THAT IMPLEMENTS OUR CITY AND COUNTY WIDE CWPP TO SEED BY IT. AND THEN WE PRESENTED THE HUB TO A CITY COUNCIL ON APRIL 26 FOR THEIR AWARENESS. UH, WE DON'T SEE ANY SIGNIFICANT BARRIERS TO IMPLEMENTATION AS LONG AS OUR PARTNERS ARE ON BOARD WITH INPUTTING THE GREAT WORK THAT THEY'RE DOING. WE'RE REAL PROUD TO REFLECT OUR COLLECTIVE EFFORTS ON THE WILDFIRE HUB. THANK YOU. SLIDE PLEASE. NEXT SLIDE PLEASE. SO TOM BOOK AIR FROM THE FIRE MARSHAL'S OFFICE, UM, WITH THE HELP OF MANY PEOPLE, AGENCIES AND ORGANIZATIONS WE HAVE NOW IMPLEMENTED THE 2015 ICC WILD LAND, URBAN INTERFACE CODE, UH, AS A PART OF THE AUSTIN CITY. UH, NEXT SLIDE, PLEASE. THERE ARE MANY KEY ELEMENTS INCLUDED IN, IN THE, UH, ADOPTION OF THE CODE, AND IT'S INTEGRATED WITH THE CURRENT FIRE CODE, UH, KIND OF CREATE A COHESIVE TOOL TO IMPROVE SAFETY AND RESILIENCY OVERALL FOR THE ENTIRE CITY OF AUSTIN AS REPORTED IN THE MEMO ON NOVEMBER 3RD, 2020, WE'VE ADOPTED THE TUCK, THE CODE AGAIN, THE COMMUNITY ENGAGEMENT WAS EXTENSIVE. UM, YOU KNOW, WE PROVIDED THE, THE CORRECT TIMELINES ADDRESSED ALL THE CONCERNS AND, UH, ALLOWED CONTRIBUTING STAKEHOLDERS, BOARDS, AND COMMISSIONS TO WEIGH IN. AND, UH, I THINK WE DEVELOPED A CODE AND HAVE IMPLEMENTED A CODE NOW THAT WE ALL CAN BE PROUD OF. UH, NEXT SLIDE PLEASE. SO, SO, UM, WE FULLY IMPLEMENTED THE 2015 WILD LAND URBAN INTERFACE CODE WITH THE PRIMARY FOCUS ON EMPEROR PROTECTION, UH, STRUCTURAL HARDENING AND CONSTRUCTION FEE CONSTRUCTION FEATURES. UH, WE STRATEGICALLY FOCUSED ON THE IGNITION RESISTANT CONSTRUCTION, UH, WITH THE BUILDING CODE. AND THEN, UH, ALONG WITH OUR WILDFIRE PARTNERS, THE COMMUNITY OUTREACH APPROACHES TO DEFENSIBLE SPACE AND BRUSH MITIGATION. UM, WE ALL KNOW THAT THE FUELS GROW BACK AND, AND, YOU KNOW, AFTER ANY MITIGATION, THE STRUCTURAL HARDENING ITEMS REMAIN IN PLACE. AND THAT'S BEEN THE FOCUS OF, OF THE CODE FROM THE, UH, FIRE PREVENTION STANDPOINT. UM, AGAIN, THE, THE PANDEMIC DID HAVE AN IMPACT ON US. IT SLOWED THE INITIAL CODE IMPLEMENTATION, UH, WE'RE UH, FACING TONS OF CHALLENGES ALONG THE WAY WITH, UH, YOU KNOW, ALL THE PROBLEMS WE'RE HAVING LOCALLY AND NATIONWIDE WITH, UH, BUILDING, UH, BUILDING MATERIALS AND CONSTRUCTION ISSUES. SO, UH, YOU KNOW, IT'S, IT'S NEVER GOOD TO IMPLEMENT A CODE IN A, UH, YOU KNOW, UNPRECEDENTED HOUSING BOOM WITH A UNPRECEDENTED, UH, LACK OF MATERIALS. SO THAT HAS DEFINITELY BEEN A CHALLENGE. UM, OUR TEAM HAS REALLY STEPPED UP AND BEEN ABLE TO, UH, TO WORK, TO, UH, COME UP WITH CREATIVE SOLUTIONS. UM, AGAIN, THE DELAY IN THE, IN THE LDC BEING ADOPTED DID PRESENT A FEW CHALLENGES, BUT I THINK IN MOST CASES WE'VE BEEN ABLE TO ADAPT AND FIGURE OUT WAYS TO WORK AROUND THAT. UM, [01:40:01] AS YOU MIGHT IMAGINE, USING THE WILD LAND, URBAN INTERFACE MAP THAT SHOWS, UH, OUR TARGET HAZARDS AND SHOWS THE AREAS THAT WE WANT TO FOCUS ON IS, IS REALLY PROBLEMATIC AND A CITY THAT'S GROWING AS FAST AS AUSTIN. UH, BUT I THINK WE'VE COME UP WITH SOME REALLY GOOD PLANS, UH, WITH SOME OF THE VOLUME BUILDERS WE'RE, WE'RE WORKING ON NOW, WHAT WE HAVE OUR VICINITY PLANS THAT ALLOW US TO, TO DEVELOP THE COMMUNITY, TO AVOID, UH, INTERACTION WITH THE, WITH THE URBAN INTERFACE, AS MUCH AS, AS MUCH AS REASONABLY POSSIBLE. SO I THINK, UH, YOU KNOW, W RATHER THAN WORKING ON DEFENSIBLE SPACE AND, YOU KNOW, REQUIRING MORE STRUCTURAL HARDENING BECAUSE WE'RE RIGHT NEXT TO, TO THE, UH, WILD LAND AREAS, DEVELOPING THE COMMUNITIES AND THE SUBDIVISIONS IN A WAY THAT CREATES NATURAL SPACE, UH, ALLOWS US TO, UH, TO HAVE THE BEST RESULTS WITH, UH, WITH MINIMIZING THE AMOUNT OF COSTS, UH, TO THE ACTUAL HOMEOWNERS AND, AND BUILDERS. SO, UM, WE DO PLAN TO SEND A MEMO DETAILING, UH, NEXT STEPS IN THE CODE ADOPTION, AND ALSO OFFERING A LETTER ABOUT FUTURE PLANS ALONG WITH THE JUNE 3RD PRESENTATION OF THE, UH, UH, ABOUT THE ADOPTION OF THE 2021 INTERNATIONAL BUILDING CODE. WE HAVE, UH, OPTED TO DELAY ADOPTION OF THE 2021, UH, WE CODE UNTIL NEXT YEAR, JUST BECAUSE WE'RE, WE'RE STILL WORKING THROUGH ALL THE STEPS AND WE DON'T WANT TO CHANGE, CHANGE THE RULES AND CHANGE THINGS AND THE IMPLEMENTATION PROCESS, BECAUSE WE'RE CURRENTLY STILL, UH, YOU KNOW, TRYING TO GET THE COMMUNITY USED TO THE RULES AND, AND FIGURING OUT HOW, HOW TO INTERACT WITH THE COMMUNITY, UH, WITH THE NEW CODE. AND SO CHANGING A NEW CODE, UH, YOU KNOW, LESS THAN A YEAR AND WOULD BE, UH, WOULD BE TROUBLESOME. AND SO WE WANT TO GET THINGS NAILED DOWN THIS TIME AND THEN LOOK TO WORK, UH, WORK ON EXPANDING AND DEVELOPING, UH, THINGS AS WE MOVE INTO THE CODE, UH, FURTHER DOWN THE LINE, UM, ACCORDING TO THE ICC WHERE THE LARGEST CITY IN THE U S TO ADOPT THE WILD LAND, URBAN INTERFACE CODE, UM, AND WE'RE THE ONLY MAJOR CITY, UH, TO USE THE EXPANDED, EVER CONTROLS THAT WE'VE CREATED. SO, UH, JUSTICE, IF YOU DON'T MIND WHAT YOU EXPLAINED, UH, THE BENEFITS THAT WE GAINED FROM THE EXPANDED EMPEROR CONTROL AND WHY THAT'S SUCH A CRITICAL FACTOR TO OUR CODE'S SUCCESS IN AUSTIN, CERTAINLY CHIEF, WE BASED THE CODE OFF RESEARCH AND BEST AVAILABLE SCIENCE. AND WHAT'S EMERGING OUT OF CASE STUDIES FROM CALIFORNIA AND ACROSS THE COUNTRY IS EMBERS ARE THE MOST INSIDIOUS. AND NUMBER ONE REASON WHY HOMES ARE IGNITED DURING THESE WILD LAND, URBAN INTERFACE, FIRES EMBERS FROM THE FIRE ITSELF AND EMBERS FROM OTHER STRUCTURES THAT ARE HARD AT BURNING. SO ONE OF THE STEPS THAT WE TOOK THAT'S ABOVE AND BEYOND THE CODE IS TO EXTEND THAT AMBER PROTECTION ZONE OUT TO A MILE AND A HALF FROM OUR WILD LAND, URBAN INTERFACE AREAS. WE CHOSE THIS BECAUSE OUR FIRE HISTORY IN CENTRAL TEXAS, UM, SIGNIFIES THAT WE CAN HAVE ACTIVE SPOTTING OF EMBERS OVER A MILE, A MILE AND A HALF AWAY FROM THE MAIN FIRE. SO IT'S NOT JUST ENOUGH TO PROTECT HOMES DIRECTLY ADJACENT TO OUR WILD LAND AREAS THAT WE HAVE TO PROTECT THEM AGAINST THE BIGGEST THREAT THAT WE'LL HAVE TO HOMES IN AUSTIN, WHICH IS OUR EMBER STORMS, WHICH RESULTED IN THE MAJORITY OF THOSE WILD LAND LOSSES. AND WHAT WE'VE SEEN IS IF WE CAN STOP THE FIRE, THAT FRONT LINE OF HOMES ADJACENT TO THE WILD LANDS, WE DRAMATICALLY REDUCED THE EMBER STORM THAT WILL, UH, WE RESULTING IN DOWNSTREAM IGNITIONS. SO THIS IS A REALLY FORWARD-THINKING STEP THAT THE CITY HAS TAKING, AND YOU DON'T SEE THAT TYPE OF PROTECTION AND OTHER CODES ACROSS THE COUNTRY JUSTICE. I APPRECIATE THAT. AND SO JUST TO KIND OF CIRCLE BACK ON A FEW THINGS, UH, THE PROVIDING METHODS FOR THE COMMUNITY TO HELP THEMSELVES, UH, IN SUPPORT OF WILDFIRE EFFORTS IS, IS ONE OF OUR MAIN GOALS. OUR INSPECTORS ARE NOW OUT THERE WITH THE WOOEY OUR WAY INSPECTORS ARE NOW OUT THERE INTERACTING THE COMMUNITY, AND, UH, AND WORKING WITH BUILDERS AND DEVELOPERS TO CREATE, UH, YOU KNOW, VICINITY AND AREA PLANS THAT, THAT ARE SOMETHING THAT WE ACTUALLY DIDN'T NECESSARILY THINK WERE GOING TO BE A PART OF THIS, BUT IT DEVELOPED OUT OF THE IMPLEMENTATION OF THE COACH. IT'S SOMETHING THAT WE'RE REALLY EXCITED ABOUT IS AS WE, AS WE LOOK AT, RATHER THAN RETROFITTING THINGS INTO COMMUNITIES, WE'RE BILLING THEM IN ON THE FRONT END. AND I THINK THAT'S PROBABLY, UH, THE BEST WAY MOVING FORWARD FOR US TO BE ABLE TO, UH, TO PREVENT THESE TYPES OF DISASTERS. UM, AGAIN, THERE'S STILL MANY THINGS THAT WE CAN DO AND WE CAN GROW AND IMPROVE, BUT WE'RE, UH, AT THIS POINT WE'RE REALLY HAPPY WITH OUR PROGRESS AND, UH, WE'RE EXCITED TO CONTINUE TO BUILD A SAFER COMMUNITY. THAT'S ALL FOR THAT, FOR THAT SLIDE. SO WE'RE GOING TO GO ON TO THE NEXT SECTION. HI. UM, YES, WE CAN HEAR YOU. I DO. UM, MY NAME IS MATT MCCALL. I'M THE PROGRAM MANAGER FOR THE NEW LAND [01:45:01] MANAGEMENT PROGRAM WITHIN PART. AND I'LL BE, I'M TALKING ABOUT THE NEXT FEW SLIDES. UM, SO IN RESPONSE TO, UM, THE WELFARE AUDIT, PARTICULARLY FINDING TO, UM, UH, WHICH WAS FOUND THAT, UM, PARD SHOULD ENSURE THAT LAND MANAGEMENT PLANS ARE DRAFTED, UH, FOR PARKS AND REC PROPERTIES WITH A PRIORITY ON HIGH WILDFIRE RISK PROPERTIES, UM, AND THAT THEY, UH, MOST IMPORTANTLY, SHOULD BE IMPLEMENTED TO REDUCE THE THREAT OF WILDFIRE X, Y. UH, SO IN RESPONSE, UM, THE DEPARTMENT COMMITTED TO ESTABLISH A LAND MANAGEMENT TEAM, UH, AND WORK WITH, UH, AFD TO, UH, REVIEW PARKLAND PROFILE OUR RISKS, UM, AND TO, UM, UPDATE, UH, PROVIDE REGULAR UPDATES TO LAND MANAGEMENT PLANS. UM, WE ALSO COMMITTED TO, UH, USE LAND MANAGEMENT PLANS AS A ROADMAP FOR ON THE GROUND IMPLEMENTATION TO REDUCE WILDFIRE RISK. NEXT SLIDE, PLEASE, JUST AN UPDATE ON OUR ACTIVITIES TO DATE. UH, PART HAS HIRED A PROGRAM MANAGER THAT'S ME, UH, AND A PROGRAM COORDINATOR TO BEGIN A CREATION OF THIS LAND MANAGEMENT TEAM. UH, WE HAVE A SCOPE OF WORK FOR A LAND MANAGEMENT PLAN, UM, WHICH IS IN THE PROCUREMENT PROCESS. THIS PLAN, UH, WILL COVER OVER 10,000 ACRES, WHICH IS APPROXIMATELY ABOUT THREE QUARTERS OF OUR PLANT NATURAL AREAS. UM, AND THESE, THESE, UH, PARKLAND NATURAL AREAS WERE SELECTED BECAUSE THEY PRESENT FROM A LAND MANAGEMENT PRACTICAL ON THE GROUND STANDPOINT, PRESENT THE GREATEST OPPORTUNITY FOR BOTH ECOLOGICAL RESTORATION AND THE REDUCTION OF WILDFIRES. NEXT ONE, UM, IN TERMS OF IMPLEMENTATION, UH, BEFORE THAT LAND MANAGEMENT PLAN IS FULLY COMPLETE, WE HAVE ALREADY BEGUN SOME ACTIVITIES. UH, FIRST AND FOREMOST BEGAN RENOVATING SOME, UH, VACANT BUILDING SPACE TO SERVE AS A CENTER OF OPERATIONS FOR OUR LAND MANAGEMENT TEAM. UH, THIS TEAM, THIS TEAM IS GOING TO NEED TO BE AN OPERATIONAL UNIT WITHIN PARKS AND RECREATION. SO WE'RE GOING TO NEED SOME SPACE TO WORK. UM, WE'VE BEGUN CREATING THE INTERNAL PRESCRIBED THE BURN TEAM, AND THIS TEAM WILL WORK WITH VARIOUS, UH, LAND MANAGEMENT ENTITIES IN THE REGION, UH, AS WELL AS, UH, AUSTIN FIRE DEPARTMENTS IMPLEMENT PRESCRIBED BURNS ON PARKLAND AS WELL AS TO PROVIDE SCREENING IMPORTANT TRAINING FOR STAFF. UH, WE'RE CREATING COOPERATIVE AGREEMENTS WITH THESE ORGANIZATIONS FOR THIS PURPOSE, AND ALSO UPDATING OUR STANDING UNDER DEPARTMENTAL WITH, UH, AUSTIN PARK. UH, WE HAVE A CONTRACT FOR 83 ACRES OF FRESH CONTROL AT THE RIM NEIGHBOR, ERA, INDIAN GRASS PRESERVE FOR TALL GRASS PRAIRIE RESTORATION. UM, WE'RE PREPARING, UH, THE DECKER TALLGRASS PRAIRIE PRESERVE, UM, OR A POTENTIAL PRESCRIBED BURN. THAT'S ABOUT 340 ACRES. I BELIEVE. UH, AUSTIN, OUR DEPARTMENT ALSO HAS A COUPLE OF PERMITS IN FOR A COUPLE OF OTHER PARKLAND, UH, PROPERTIES, UH, THAT MY TEAM WOULD, UH, UM, HOPE TO ASSIST WITH. UM, AND, UH, WE'RE ALSO MANAGING ONE OF THE AUSTIN CIVILIAN CONSERVATION, FOUR CREWS. THAT'S IMPLEMENTING SEVERAL PROJECTS ACROSS OUR PRESERVES AND OTHER NATURAL. EXCELLENT. I THINK THAT'S BACK TO AFT MORNING. I'M CARRIE STEWART WITH THE WILDFIRE DIVISION AND RECOMMENDATION FOR WAS REGARDING A PERMITTING PROCESS FOR, FOR PRESCRIBED FIRE IN THE CITY OF AUSTIN ON CITY OF AUSTIN LANDS. SO WE WERE DIRECTED TO CREATE POLICIES AND PROCEDURES FOR A BURN. I PRESCRIBED FIRE PROCESS PERMITTING PROCESS, AND THAT, AND WE WOULD ISSUE PRESCRIBED FIRE PERMITS ACCORDING TO THOSE POLICIES SO THAT WE COULD ENSURE THAT PRESCRIBED FIRE COULD BE IMPLEMENTED SAFELY AND EFFICIENTLY AS A LAND MANAGEMENT TOOL. AND THEN WE WOULD ALSO CREATE GUIDANCE FOR OUR PARLOR, OUR PARTNERS, AND STAKEHOLDERS, SO THAT THEY WOULD UNDERSTAND HOW TO USE THAT PERMITTING PROCESS AS WELL. NEXT SLIDE PLEASE. SO THE DOCUMENTS THAT WE SUBMITTED, OUR NUMBER ONE, OUR PRESCRIBED FIRE HANDBOOK. SO THAT IS OUR PROCEDURAL DOCUMENT. THAT EXPLAINS HOW TO IMPLEMENT PRESCRIBED FIRE IN THE CITY OF AUSTIN. AND ON CITY LANDS, THESE POLICIES AND PROCEDURES WERE DEVELOPED WITH OUR PRESCRIBED FIRE PARTNERS AND WITH THE FIRE MARSHALL'S OFFICE. UH, IT WAS A REGIONAL COLLABORATION TO COME UP WITH THIS HANDBOOK AND THESE POLICIES AND PROCEDURES. THE NEWEST VERSION OF THAT IS 2.4. WE RECENTLY HAD OUR FIRST MEETING REGARDING THIS HANDBOOK TO UPDATE IT TO VERSION 2.4. AND WE DO CONSIDER TO BE A LIVING DOCUMENT THAT ALL OF OUR PERSPECTIVES OUR PARTNERS CAN PROVIDE INPUT FOR SO THAT WE CAN CONTINUE TO WORK SAFELY AND EFFICIENTLY TOGETHER, UM, AND HAVE EVERYONE UNDERSTAND THE PERMITTING PROCESS AND HOW THE, OUR PERMITTING GUIDELINES, WHICH [01:50:01] WE'LL COME TO A BULLET FOR, UH, APPLIED TO THE HANDBOOK. THE SECOND DOCUMENT THAT WE SUBMITTED, WHERE OUR PRESCRIBED FIRE DEFINITIONS, THESE LIVE WITHIN THE HANDBOOK. AND SO WE OUTLINED THE DEFINITIONS FOR ALL PARTS OF A PRESCRIBED FIRE SO THAT EVERYONE CAN WORK ON THE SAME PAGE AND UNDERSTAND WHAT THOSE POSITIONS ARE AND HOW TO IMPLEMENT THE PRESCRIBED FIRE IN THE CITY. THE THIRD DOCUMENT WE SUBMITTED WAS OUR AMT WILDFIRE DIVISION ROLES AND RESPONSIBILITIES. THIS DOCUMENT IS TO OUTLINE THE, THE ROLES OF THE WILDFIRE DIVISION AND OF THE FIRE MARSHALL'S OFFICE, SINCE IT IS A SHARED RESPONSIBILITY FOR THE PERMITTING PROCESS. SO IT OUTLINES HOW FOLKS SUBMIT A PERMIT TO THE, TO, TO THE PREVENTION OFFICE AND THEN ROLES AND RESPONSIBILITIES OF THE AMT WILDFIRE DIVISION BURN BOSS TO REVIEW THOSE, AND ALSO IMPLEMENTS CONVERSION RESOURCES. THAT'S OUTLINED IN THE HANDBOOK AS WELL. OUR CONVERSION RESOURCES ARE ON-SCENE AFD ON DUTY RESOURCES THAT WILL BE AVAILABLE. SHOULD ANYTHING HAPPEN AT A PRESCRIBED FIRE? SO IT'S KIND OF A SAFETY STEP THAT'S ABOVE AND BEYOND WHAT WOULD NORMALLY HAPPEN ON A PRESCRIBED FIRE. AND IT ADDRESSES THE CONCERNS OF THE AUDIT AND OF THE 2016 COUNCIL RESOLUTION REGARDING A PRESCRIBED FIRE IN THE CITY AS WELL. AND THEN OUR PRESCRIBED FIRE PERMITTING GUIDELINES IS THE LAST DOCUMENT WE'VE SUBMITTED. THIS IS ON THE PERMITTING PAGE FOR THE PREVENTION WEBSITE. SO THESE ARE PRETTY MUCH THE STEPS THAT YOU WOULD GO THROUGH IF YOU'RE GOING TO FILL OUT AN APPLICATION FOR PRESCRIBED FIRE PERMIT. SO THOSE GUIDELINES ARE ON THE PAGE AND THEY DO REFERENCE THE HANDBOOK THAT IF YOU'RE GOING TO APPLY FOR A PERMIT, THEN YOU WILL FOLLOW THE DIRECTIONS AND THE POLICIES AND PROCEDURES OUTLINED WITHIN OUR PRESCRIBED FIRE HANDBOOK AND COLLECTIVELY THE HANDBOOK AND THE PERMITTING GUIDELINES FULFILLS THE REQUIREMENTS OF, UH, THE AUDITS MENTIONED A PRESCRIBED BURNS AS A CITY LAND MANAGEMENT TOOL. SO THESE DOCUMENTS ARE WHAT WE HAVE SUBMITTED TO FULFILL THAT REQUIREMENT OF THE AUDIT. AND NEXT SLIDE, PLEASE. AND WE'RE AVAILABLE FOR ANY QUESTIONS. IF THERE ARE QUESTIONS ABOUT ANY OF THIS MR. MAYOR AND COUNCIL MEMBERS AND OTHER MEMBERS HERE WHOSE ATTENDANCE ME AS FUCK, TOO, THAT YOU ALL KNOW THAT'S OUR MISSION STATEMENTS SAY THAT THE AUSTIN FIRE DEPARTMENT, WE ARE COMMITTED TO CREATING A SAFE AND RESILIENT COMMUNITIES THROUGH PREVENTION, PREPAREDNESS, AND EFFECTIVE EMERGENCY RESPONSE. SO THE MORE AND MORE WE CONTINUE TO WORK WITH KEY STAKEHOLDERS AND WORK WITH THE CITY MANAGER OFFERS WORK WITH YOU, MR. MAYOR WORK WITH THE COUNCIL MEMBERS AND THE CREATION OF BOBBY KNEW A WILDFIRE BATTALION THAT WOULD BE START ON THE EAST AND WEST SIDE OF CITY OF AUSTIN. WE'RE GETTING CLOSER AND CLOSER TO MAKING SURE TO SEE THAT AUSTIN STAY RESILIENT EVENT. THAT BIG MAMMON JAM WAS, IS THAT WILD LAND FIRE. EVERYBODY EVER HIT OUR BORDERS. WE'LL BE PREPARED TO BE EFFECTIVE IN MITIGATING ANY TYPE OF IMMERSIVE. SO THANK YOU. AND THEN IN THE QUESTIONS YOU MAY HAVE FOR THIS TEAM, WE'LL DO OUR BEST TO ANSWER THE QUESTION I WANT TO, UM, THANK YOU ALL FOR BEING HERE. UM, YOU KNOW, I REQUESTED THE ORIGINAL AUDIT INTO LAW FIRE, AND I THINK WE'VE MADE, UM, SOME REALLY SIGNIFICANT PROGRESS WITH RESPECT TO THE HUB AND THE ADOPTION OF THE, THE MOVIE CODE AND, UM, YOU KNOW, MADE SOME LEAPS AND BOUNDS IN OUR SUCCESS AND ENGAGING, UM, DEPARTMENTS BEYOND AFD, UM, IN EXPLORING HOW THEY CAN CONTRIBUTE TO REDUCING AND MITIGATING THE WILDFIRE WAS NOT PART OF THE AUDIT, BUT THE, THE INFORMATION THAT WE HEARD AT OUR STORM AFTER ACTION REPORT ABOUT WHAT WAS HAPPENING WITH OUR WILDFIRE RISKS, CIRCUITS, ET CETERA, AS ANOTHER EXAMPLE OF, YOU KNOW, FURTHER PROGRESS. UM, I DO HAVE SOME QUESTIONS, BUT I WANT TO SEE IF ANY OF MY COLLEAGUES HAVE QUESTIONS FIRST. OKAY, GREAT. UM, SO I WANTED TO CHECK, SO, SO, UM, CHIEF BULKY, YOU ARE, UM, PLANNING TO PROVIDE A WRITTEN DOCUMENT THAT I'LL TALK ABOUT SOME OF THE, THE WE CODE PIECES THAT ARE, UM, BEING ADOPTED, UM, OR PUT INTO PLACE, UM, BY OTHER MEANS THAT WE'RE PART OF THE LAND DEVELOPMENT CODE THAT HAVE NOT YET BEEN ADOPTED INTO CODE, BUT ARE IN PRACTICE TAKING PLACE. AND THEN THE PLAN FOR, UM, MOVING FORWARD TO MAKE THOSE BE PART OF THE CODE. IS THAT CORRECT? THAT'S CORRECT. WE'RE LOOKING AT THOSE ITEMS IN ADDITION TO, UH, WHAT, WHAT OTHER IMPROVEMENTS WE CAN MAKE TO THE CURRENT WHERE WE CODE, UH, YOU KNOW, SOME OF THE LESSONS LEARNED WITH THE IMPLEMENTATION IMPLEMENTATION OF THIS CODE, UH, FOR THE NEXT CODE ADOPTION AS WELL. RIGHT. SO, SO COLLEAGUES NEXT WEEK, WE ARE BEING ASKED TO ADOPT, UM, THE FIRE CODE. WE'RE NOT MAKING ADDITIONAL [01:55:01] ADJUSTMENTS TO THE WAY WE CODE AT THIS TIME. I'VE ASKED THEM TO PREPARE A MEMO SO THAT WE UNDERSTAND WHICH PIECES OF THE CODE ARE NOT, WERE NOT ADOPTED BECAUSE OF THE LAND DEVELOPMENT CODE, NOT MOVING FORWARD. UM, AND THEN ALSO KIND OF WHAT THE PLAN IS, UM, FOR THE NEXT ADOPTION. I UNDERSTAND, UM, THAT DECISION WAS MADE NOT TO MOVE FORWARD WITH ADDITIONAL CHANGES ON TOP OF WHAT WE'RE DOING AT THIS POINT. UM, TWO FOCI IS, ARE THE ADMINISTRATIVE RULES ALL, UM, PROMULGATED AND EVERYTHING IS THAT FINALIZED FOR THEM AT THIS POINT? THE THING IS EVERYTHING IS PUBLISHED. UH, UH, ALL THE RULES ARE PUBLISHED FOR THE WEEK CODE. UH, WE, WE ARE RECOGNIZING SOME, SOME MINOR ADJUSTMENTS WE'RE MAKING ALONG THE WAY AS, AS YOU KNOW, THE PRACTICAL APPLICATION, UH, YOU KNOW, IT'S PROBLEMATIC IN SOME AREAS, BUT I THINK WE'VE MADE SOME MINOR ADJUSTMENTS. THE RULES ARE IN PLACE. AND, AND I THINK EVERYTHING THAT WE'RE LOOKING AT NOW WILL BE, UH, WILL HELP US DEVELOP A BETTER CODE, UH, FOR THE NEXT ROUND OF ADOPTIONS. THANK YOU. UM, UM, MR. MCCALL, WE, I DON'T THINK WE'VE HAD A CHANCE TO MEET YET, UM, WELCOME AFFORD AND REALLY EXCITED THAT WE HAVE THE LAND MANAGEMENT TEAM. UM, WAS THERE A BUDGET NEED FOR FISCAL YEAR 22 THAT WAS EMBEDDED IN THE SLIDES OF A HUNDRED THOUSAND DOLLARS FOR SOMETHING, OR, OR MY, YOU JUST EXPLAINED THAT THE BUDGET NEEDS ARE FOR YOUR TEAM, THAT PARTICULAR A HUNDRED THOUSAND DOLLARS BULLET, UH, IN THE AUDIT. UM, I'M NOT PARTICULARLY FAMILIAR WITH, UH, I WAS NOT WITH PART WHEN THAT AUDIT WAS, UM, INDUCTED. I MAY HAVE TO PITCH THAT QUESTION TO, UH, MEMBERS OF OUR EXECUTIVE TEAM THAT MAY BE ON THIS CALL. OKAY. THAT'S FINE. IF YOU CAN JUST FOLLOW UP WITH ME TO MAKE SURE THAT I KNOW IF THERE WAS A SPECIFIC BUDGET NEED TO TAKE THE NEXT STEPS, UM, FOR FISCAL YEAR 22. UM, I WASN'T SURE IF THAT WAS PART OF THE ORIGINAL AUDIT SORT OF RESPONSE, AND THEN WE, WE FULFILLED IT WHEN WE SET UP YOUR TEAM, OR IF, IF THERE'S AN ADDITIONAL ASK THAT'S NEEDED TO TAKE THE NEXT STEPS FOR YOUR TEAM. SO IF YOU CAN, UM, YOU CAN DO IT AFTERWARDS. THAT'S, IT'S NOT A PROBLEM. SURE, ABSOLUTELY. I THINK I MAY UNDERSTAND YOUR QUESTION MORE CLEARLY. NOW. I, I WOULD SAY THAT IN GENERAL, YES, THERE WILL BE MORE, UM, REQUESTS, UM, BEING MADE. UM, THIS IS JUST A START. UM, WE'RE LOOKING AT MANAGING ACTIVELY MANAGING OVER 10,000 ACRES AND THAT TAKES A LOT OF RESOURCES. UM, WE'RE HOPING TO USE THIS LAND MANAGEMENT PLAN ONCE IT'S SUBSTANTIALLY COMPLETED TO THEN, UM, ASCERTAIN AND, AND JUSTIFY FURTHER BUDGET REQUESTS ACTUALLY FOR IMPLEMENTATION OF THAT PLAN. AND WHEN DO YOU THINK THE PLAN WILL BE FINISHED? THE PLAN IS IN A REBID PROCESS RIGHT NOW. UM, I EXPECT IT TO REQUIRE ABOUT A YEAR, UM, ONCE THAT CONTRACT IS AWARDED FOR FULL COMPLETION, ALTHOUGH, UM, I DON'T THINK ANYTHING IS GOING TO BE COMPLETELY EARTH SHATTERING AND DIFFERENT, SO WE SHOULD BE ABLE TO BEGIN IMPLEMENTING IT, UM, FAIRLY, FAIRLY QUICKLY, AT LEAST THE BASIC, UM, ELEMENTS ONCE WE HAVE RESOURCES TO DO THAT. THANK YOU. UM, SO AS I MENTIONED EARLIER, I REALLY APPRECIATE THE PROGRESS THAT'S BEEN MADE. UM, SINCE THOUGHT IT CAME BACK. UM, I DON'T KNOW, ACTUALLY TO THE AUDITOR, I WANT TO SPEAK ON THIS BEFORE I MAKE ANY THAT'S. THE ONLY THING I WANTED TO LET Y'ALL KNOW IS THAT, SO, UM, SOME OF THESE RECOMMENDATIONS ARE FULLY IMPLEMENTED AND JUST WANTED TO REMIND YOU ALL THAT, WHEN THAT HAPPENS, WE GET THAT INFORMATION. WE DO A LITTLE BIT MORE TESTING OF THOSE, UM, JUST TO MAKE SURE, LIKE, LIKE AS MENTIONED, OUR RECOMMENDATION FOR THERE WERE A BUNCH OF DOCUMENTS SUBMITTED, WE'LL REVIEW THOSE DOCUMENTS, COMPARE THEM TO THE ORIGINAL RECOMMENDATION AND THE ORIGINAL FINDINGS, AND THEN WE'LL CLOSE THEM OUT. SO JUST PROCESS WISE, THESE ARE KIND OF REPORTED AS IMPLEMENTED BY THE DEPARTMENT WILL BE CLOSED OUT BY US AND LIKELY BY THE END OF THIS YEAR. GREAT, THANK YOU. UM, SO, YOU KNOW, PART OF WHAT I WAS TRYING TO UNDERSTAND, AND THE AUDIT WAS THE SCOPE OF THE AMOUNT OF WORK THAT WE NEED TO DO TO MAKE SURE THAT WE'RE MITIGATING THE RISKS, GIVEN THE SCALE OF THE PROBLEM. UM, AND I THINK WE GET, YOU KNOW, FROM THE WILDFIRE HUB, WE GET A GOOD OF SORT OF THE SCALE OF THE PROBLEM. IF YOU HAVEN'T BEEN ON THAT HUB, YOU CAN, YOU CAN SEE WHAT THE RISK IS. YOU CAN SEE THE PROPERTY VALUES THAT ARE AT RISK. UM, YOU CAN ALSO SEE WHAT WE'VE DONE TO DATE AND, YOU KNOW, I WAS HAPPY THAT WE'RE NOW TALKING THAT WE'VE DONE 15% OF THE TREATABLE LAND. UM, BUT I WANT TO BE REALLY CLEAR THAT THAT TREATABLE LAND THAT WE'RE LOOKING AT IS, ARE, YOU KNOW, CITY OWNED LANDS. IT DOESN'T COVER, YOU KNOW, LAND THAT IS, UM, YOU KNOW, IN THE PRIVATE SECTOR WHERE WE COULD BE DOING MORE AS A COMMUNITY. UM, SO I'M STILL, I'M STILL STRUGGLING [02:00:01] WITH THIS QUESTION OF TRYING TO UNDERSTAND WHETHER WE ARE MEETING THE LEVEL OF RISKS SUFFICIENTLY, UM, GIVEN THE MAGNITUDE, WE WILL NEVER ELIMINATE THE RISK OF FIRE COMPLETELY. UM, BUT I DON'T, I DON'T KNOW IF SOMEONE ON FIRE CAN SPEAK A LITTLE BIT MORE TO, YOU KNOW, HOW SHOULD WE, UM, HOW SHOULD WE THINK ABOUT WHETHER WE'RE DOING ENOUGH KNOWING WE CAN'T DO EVERYTHING AND COMPLETELY ELIMINATE IT? ARE WE DOING ENOUGH? UM, YOU KNOW, WE'VE DONE THE, WE COPE, BUT THAT ONLY HELPS WITH THE NEW DEVELOPMENT, YOU KNOW, WE'RE TREATING LAND, BUT EVEN WHERE WE'RE TREATING LAND, YOU KNOW, WE'RE ONLY AT ABOUT 15% AT THIS POINT. UM, SO, SO JUSTICE, CAN YOU HELP US? YOU KNOW, CAUSE AS POLICY MAKERS, ONE OF THE THINGS WE REALLY HAVE TO BE ABLE TO SPEAK TO IS, YOU KNOW, WHETHER WE'RE DOING ENOUGH AND THAT STILL SEEMS SLIGHTLY ELUSIVE. SO IF OR WHOEVER WANTS TO SPEAK TO IT AT FIRE, UM, WOULD INVITE YOU TO DO SO. THANK YOU FOR THAT QUESTION, COUNCIL MEMBER. UM, I THINK ONE OF THE THINGS THAT'S IMPORTANT TO REMEMBER IS OUR STRATEGY FOR BEING RESILIENT TO WILDFIRE IS THREEFOLD, THE FIRE RESILIENT LANDSCAPES, THE FIRE ADAPTED COMMUNITIES AND THE EFFECTIVE FIREFIGHTING FORCE. OUR RESOURCES IN THE WILDFIRE DIVISION ARE SPREAD EQUALLY ACROSS THOSE REALMS TO MAKE SURE THAT WE'RE NOT LEAVING ANY STONE UNTURNED. UM, IF WE FOCUS ALL OF OUR RESOURCES ON FUELS MITIGATION, WE'D BE MISSING THAT CRITICAL OPPORTUNITY TO ENGAGE IN POWER. THE PUBLIC, OUR FUELS MITIGATION EFFORTS ARE A FORMULA THAT'S BASED ON RESOURCES AND TIME. SO IF WE WANT TO SEE, UM, MORE EXPEDITIOUS TREATMENT OF THE LANDSCAPE, THAT'S A SIMPLE OF EQUATION OF MORE BOOTS ON THE GROUND, BUT WE HAVE TO COUPLE THAT WITH A COMMUNITY ENGAGEMENT, WITH A DEFENSIBLE SPACE, WITH A FUTURE STRUCTURE HIRING TO REALLY BE EFFECTIVE. UM, AND SO, UM, OUR RESOURCES, UM, NEED TO BE, UH, EQUIVALENT ACROSS THE COHESIVE STRATEGY TO MAINTAIN THAT CONTINUITY. IF WE ONLY FOCUS ON FUELS MITIGATION AS OUR PRIMARY STANDARD, WE'LL BE LEAVING OURSELVES WIDE OPEN TO THE BIGGEST START OF A WILDFIRE, WHICH ARE EMBERS IN PEOPLE'S YARDS AND ON THEIR HOMES THAT IGNITE. THANK YOU. I MEAN, IN, IN ASKING THAT QUESTION AND LOOKING AT THE TREATABLE LAND, I'M, I'M REALLY JUST TRYING TO, TO, UM, SEE WHETHER OUR TOOLS ARE UP TO THE TASK. OBVIOUSLY WE'RE TAKING STEPS AND WE MAY BE TAKING MORE STEPS THAN MANY OTHER COMMUNITIES, BUT THAT DOESN'T ANSWER THE QUESTION AS TO WHETHER WE'RE, WHETHER WE'RE DOING ENOUGH. WHAT I'M HEARING FROM YOU IS WE HAVE TO DO ALL THREE AND WE HAVE TO DO ALL THREE IN EQUAL MEASURE. UM, BUT THAT DOESN'T TELL ME WHETHER THERE'S, YOU KNOW, A NEED TO BE DOING MORE. AND, UM, ALL THREE, UM, OBVIOUSLY I THINK WE'VE DONE WHAT WE CAN AT THIS POINT FOR THE WIFI CODE AND NEEDS AND LET THAT, THAT PEACE PEACE FLOW. BUT, UM, YOU KNOW, IS THERE ANYTHING MORE YOU CAN SAY ON THAT? AND THEN, THEN WE'LL HAVE TO PROBABLY WRAP UP CERTAINLY ARE WHAT WE ARE TRYING TO DO MORE. AND WITH THE IMPLEMENTATION OF THE WILDFIRE BATTALIONS. THEY HAVE THOSE POCKMARKS SPECIFIES TRAINED TO GET OUT THERE INTO THE FIELD. A HOPE FOR THAT THAT'S ONE STEP CLOSER, BUT WE CAN ALWAYS DO MORE. UH, JUSTIN, JONES'S GET READY TO SAY SOMETHING ELSE, BUT HOPE WOULD IMPLEMENT IMPLEMENTATION. THAT'S HELPED ME GET A LITTLE BIT CLOSER BEYOND THE 15% MR. JONES. YES, SIR. THANK YOU FOR THAT. OUR GOAL WOULD BE TO HAVE A HUNDRED PERCENT COMPLETION OF ALL OF OUR IDENTIFIED TREATMENT AREAS. AND AS I MENTIONED, THAT'S A MATTER OF TIME AND RESOURCES. ONCE WE COMPLETE THAT, WE'VE GOT TO DOUBLE BACK AND RETREAT THOSE AREAS BECAUSE THE VEGETATION IS GROWING BACK RAPIDLY. SO THIS WILL BE A LONG-TERM INVESTMENT AND CERTAINLY WON'T BE A ONE AND DONE, BUT THE FIRE DEPARTMENT IS ALWAYS GOING TO ERR ON THE SIDE OF PUBLIC SAFETY. AND WE WOULD LIKE TO COMPLETE THAT TASK IS AS SOON AS HUMANLY POSSIBLE WHILE GIVING EQUAL FOCUS TO THE OTHER KEY AREAS OF OUR COHESIVE STRATEGY. FOLLOW-UP IF WE CAN, AGAIN, YOU KNOW, IF THERE, YOU KNOW, OUR RESOURCES THAT ARE NEEDED TO DO THAT, THAT ARE APPROPRIATE FOR THE NEXT STEP THAT YOU CAN HANDLE, YOU KNOW, MANAGING, I WOULD LIKE TO KNOW THOSE. UM, AND, AND CHIEF, AS SOON AS YOU HAVE YOUR, YOUR, YOUR CONCEPT FOR THESE BATTALIONS, UM, DEVELOPED AND, AND VETTED THROUGH WITH THE VARIOUS STAKEHOLDERS WOULD LOVE TO HEAR MORE ABOUT THE SPECIFICS. I KNOW WE HAVE TALKED ABOUT IT A LITTLE BIT, UM, BUT, BUT IT SOUNDS LIKE IT MAY HAVE EVOLVED AND I WOULD, WOULD, UM, APPRECIATE HEARING ABOUT THAT. UM, I'LL UM, FOR YOUR TIME AND ALL YOUR WORK ON THIS. UM, IT'S REALLY IMPORTANT THAT WE, UM, KEEP A FOCUS ON THE CHALLENGES THAT WE FACE AS A COMMUNITY WITH RESPECT TO WILDFIRE, SO THAT PEOPLE CAN, UM, BE PREPARED, UM, MOVING FORWARD. SO THANK YOU. UM, OUR LAST ITEM IS, [6. Identify items to be discussed at future meetings.] UM, FUTURE ITEMS. UM, AND I WILL FLAG THAT IN JUNE. I GUESS WE WILL [02:05:01] BE TAKING UP THE FINANCIAL POLICIES. UM, WE HAVE THE ABLE ITEM THE COUNCIL MEMBER POOL HAS ASKED FOR, WE MAY NEED TO BE DOING INTERVIEWS FOR THE COERCED, UM, PENSION BOARD, UM, AND THAT MAY NEED A SPECIAL CALLED MEETING DEPENDING ON, UM, THE TIMING. AND, UM, WE WILL ALSO BE LOOKING FORWARD TO A FAIRMONT UPDATE EITHER IN JUNE OR JULY. UM, AND I DON'T KNOW IF I HAD MENTIONED AN EXECUTIVE SESSION ON INFORMATION SECURITY. UM, MS. STOKES, DID YOU WANT TO ADD ANYTHING FOR FUTURE ITEMS OR MY SISTER? NO. I WAS JUST CHECKING IN AND THAT, THAT CAPTURES WHAT I'VE HEARD, UM, AS WELL AS WHAT, WHAT WE'VE BEEN TRACKING. UM, THE ONLY OTHER PIECE WAS THERE WAS A SPECIFIC REQUEST FROM, UM, COUNCIL MEMBER KELLY RELATED TO SOCIAL SERVICES, PROCUREMENT. I BELIEVE THAT WAS GOING TO BE WRAPPED INTO THE PROCUREMENT UPDATE. YES, I BELIEVE SO. UM, AND I'M NOT SURE SINCE WE HAVE TO DO THE FINANCIAL POLICIES, UM, AND THE COLORS, WHETHER W WE'LL GET THAT IN JUNE OR NOT, WE'LL HAVE TO FIGURE THAT OUT. UM, WELL WITH THAT, UM, COLLIN SAID ANYONE ELSE WANT TO ADD ANYTHING FOR FUTURE ITEMS? SORRY THAT WE WENT A FEW MINUTES OVER RECOVERED A LOT OF MATERIAL TODAY. THANK YOU VERY MUCH. IT'S 1136. UM, AND I WILL INJURE ADJOURN THE AUDIT AND FINANCE COMMITTEE. THANK YOU EVERYONE. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.