Apr 25, 2022 Water and Wastewater Commission

A ONE, UH, FEBRUARY, 2020 TO BOIL WATER NOTICE APPROVAL BUDGET AMENDMENT.

UM, IT IS 3:03 PM ON TWO TUESDAY, MONDAY, APRIL 25TH OF BOY.

UM, AND I'M CALLING MEETING, UM, IS THERE ANY PUBLIC SPEAKERS? UH, NO PUBLIC SPEAKERS.

SO WE WILL MOVE TO ITEM

[A.1. February 2022 Boil Water Notice Approved Budget Amendment ]

AND IT SHOWS UP IN DOLLAR HOSPITAL, JOSEPH GONZALEZ, UH, AUSTIN WATER ASSISTANT DIRECTOR OVER FINANCIAL SERVICES.

AND I'LL JUST PROVIDE A BRIEF UPDATE ON A BUDGET AMENDMENT THAT WAS PASSED BY COUNCIL, UH, LAST WEEK, YOU KNOW, LAST THURSDAY, UM, THAT APPROVED AN ADDITIONAL 16 FTES, UH, AS WELL AS A, A MILLION DOLLARS FOR SOME, UM, MODERNIZATION SOFTWARE, UH, FOR OUR, OUR STANDARD OPERATING PROCEDURES.

UM, WE OFFERED, UH, THE PROPOSED BUDGET AMENDMENT NOW APPROVED BUDGET AMENDMENT, UM, AS AN ALTERNATIVE TO PROVIDING A BILL CREDIT, UH, YOU KNOW, SUBSEQUENT TO THE FEBRUARY, BOIL WATER NOTICE.

UM, WE HAD CONTEMPLATED, YOU KNOW, UM, GOODWILL, UH, BILL CREDIT, UH, BUT WE GOT FEEDBACK, UH, I THINK BOTH FROM, UM, FROM, FROM COUNCIL AND THE COMMUNITY THAT, UH, YOU KNOW, PROBABLY THOSE FUNDS WEREN'T WERE BETTER SPENT INVESTING IN INTO THE UTILITY.

AND SO WE LOOKED AT ALTERNATIVES, UH, TO, TO PROVIDING A BILL CREDIT AND PROPOSED AGAIN, THE 16 FTES, UM, 12 OF WHICH WOULD BE OPERATIONAL FTES TO, UM, TO INCREASE STAFFING LEVELS, UM, YOU KNOW, THROUGHOUT THE OPERATIONAL SHIFTS, UH, UM, TO GO FROM, FROM, UH, YOU KNOW, STAFF, A TEAM OF THREE, UH, TWO TO A TEAM OF FOUR, UH, BUT ALSO TO ADD SOME ADDITIONAL FTES TO SUPPORT THE FUNCTION.

SO, UM, SO THAT'S TWO FTES TO TWO MAINTENANCE SUPERVISORS THAT WOULD PROVIDE OVERLAPPING SUPERVISION, UH, TO PLANT OPERATORS, YOU KNOW, FOR, FROM DAY TO NIGHT SHIFT TO, TO, TO ENSURE THAT WE'VE GOT A GOOD TRANSITION, UH, FROM, FROM DAY TO NIGHT SHIFT, UH, WITH ALL OF OUR TEAMS, UH, FIVE ADDITIONAL FTES, UM, MAINTENANCE AND PLANT TECHNICIANS TO ESTABLISH, UH, YOU KNOW, AGAIN, UH, AN ADDITIONAL OPERATOR ONSITE FOR 24 7 COVERAGE, UM, FIVE FTES, UM, LET'S SEE, FIVE ADDITIONAL PLANT TECHNICIANS, UM, TO, TO PROVIDE DAY SHIFT COVERS.

SO FIVE FOR NIGHT SHIFT FIVE FOR DAVE THEY SHIFT, UH, TO ADD TO THOSE, THOSE TEAMS. UM, IN ADDITION, IN ADDITION, UM, AN ADDITIONAL AUSTIN WATER PROCESS ENGINEERED TO PROVIDE ADDITIONAL ENGINEERING SUPPORT TO, TO OUR OPERATIONS STAFF AND, UH, THREE, UH, WELLSTON WATER CERTIFICATION TRAINING, SENIORS TO, UM, TO PROVIDE, YOU KNOW, UH, BETTER TRAINING SUPPORT TO ALL OF OUR OPERATIONS STAFF.

UH, SO THOSE ARE THE, THE 16 FTES.

AND THEN AGAIN, UM, YOU KNOW, WE'RE STILL LOOKING AT EXACTLY WHAT WE WANT TO DO IN TERMS OF, OF YOUR MONETIZATION SOFTWARE EVALUATING WHETHER THAT LOOKS LIKE, UM, YOU KNOW, PROCURING CONSULTING SERVICES TO, UM, TO ENHANCE OUR DISH, OUR, OUR, UM, OUR INTERNAL SHAREPOINT SITE, UM, TO ENHANCE, YOU KNOW, THE FUNCTIONALITY AND USABILITY OF, OF THAT, OR WHETHER THERE'S A GOOD FIT WITH SOME KIND OF OFF THE SELL OFF THE SHELF SOFTWARE, UM, TO, TO BETTER MAINTAIN AND, UH, PROVIDE BETTER ACCESS TO, TO OUR SOP, TO, UM, TO OPERATION STAFF.

UM, SO AGAIN, THAT, THAT BUDGET AMENDMENT WAS APPROVED LAST THURSDAY, UM, TO THE TUNE OF $1.6 MILLION FROM AN FDA PERSPECTIVE IS ABOUT 400,000, UH, FOR, FOR THE REMAINDER OF THE FISCAL YEAR.

AND THAT ASSUMES, YOU KNOW, PRETTY QUICK POSTING AND, AND, YOU KNOW, FILLING FOR, FOR THE THIRD QUARTER OF A MILLION FOR THE MA MODERNIZATION SOFTWARE.

UH, THE MODERNIZATION SOFTWARE IS A ONE-TIME EXPENSE.

YOU KNOW, ONCE WE GO THROUGH THAT PROCESS, IT WOULDN'T BE AN ONGOING BUDGETARY ITEM, BUT THE, THE FTES OF COURSE, WOULD, WOULD THEN BECOME PART OF OUR BASE BUDGET AND ROLL INTO NEXT YEAR'S BUDGET.

UM, YOU HAVE ANY QUESTIONS ABOUT THAT BUDGET AMENDMENT, UH, JOSEPH, UH, THOSE FTES, PARTICULARLY FOR THE OPERATIONAL SUPPORT, IS THAT

[00:05:01]

ACROSS EACH OF THE TREATMENT PLANTS? ARE WE TALKING ABOUT ADDING STAFF AT EACH PLANT? YES.

THAT'S TO PROVIDE ADDITIONAL SUPPORT IT ALL, ALL THREE TREATMENT PLANTS, NOT JUST ALL RICK.

AND, UM, YOU KNOW, UH, PRIOR TO, UM, PRIOR TO THE CURRENT MARKET CONDITIONS, IT WAS ALREADY A CHALLENGE HIRING PEOPLE.

AND, AND SO IN THE PROPOSED BUDGET, ARE WE LOOKING AT, OR HAVE WE INCLUDED INCREASES IN COMPENSATION TO TRY TO ATTRACT AND ACTUALLY GET THOSE HIRES? SO, AND, AND WE'LL TALK ABOUT THE BUDGET SCHEDULE AND OUR, OUR PROPOSED BUDGET IS DUE TO THE BUDGET OFFICE MAY SIX IN A COUPLE OF WEEKS.

SO, UM, WE'RE, WE'RE CURRENTLY WORKING TO FINALIZE OUR PROPOSED BUDGET, BUT, UM, WE, WE HAVE BEEN INTERNALLY AUSTIN WATER, UM, CONDUCTED A MARKET STUDY, UM, THAT FOCUSED ON OPERATIONS AND WE'RE RECOMMENDING, UH, WE HAVE RECOMMENDED TO CITY HUMAN RESOURCE DEPARTMENT TO, UM, TO IMPLEMENT THAT MARKET STUDY, WHICH WOULD INCLUDE, YOU KNOW, UH, OPERATORS AND ENGINEERS.

AND, AND, AND MANY OF THESE POSITIONS THAT WE'RE TALKING ABOUT ARE INCLUDED IN, IN THE MARKET STUDY, UM, WHERE WE'RE WORKING WITH HRD AND OUR HOPE IS THAT WE CAN GET, AT LEAST FOR THE AUSTIN WATER POSITIONS, WE CAN GET THOSE IMPLEMENTED DURING THE CURRENT FISCAL YEAR, AND THEN THEY WOULD JUST ROLL, UM, YOU KNOW, AS PART OF OUR BASE BUDGET FOR NEXT YEAR.

UM, SO RIGHT NOW WE HAVEN'T, WE HAVEN'T ADDED ANYTHING IN TERMS OF, OF WHAT WE'RE PUTTING TOGETHER FOR OUR PROPOSED BUDGET SPECIFIC TO THAT UNTIL WE, WE GET FEEDBACK FROM HRD, UM, IF IT'S SOMETHING THAT WE COULDN'T ABSORB, YOU KNOW, NEXT YEAR, THEN WE WOULD, YOU KNOW, IF WE CAN'T GET IT DONE DURING FISCAL YEAR 22, UM, AND, YOU KNOW, WE, WE, WE, AREN'T AT A POINT WHERE WE CAN INCLUDE IT IN THE PROPOSED BUDGET, THEN WE WOULD EITHER TRY AND ABSORB IT, YOU KNOW, FROM A VACANCY PERSPECTIVE, WE MIGHT BE ABLE TO DO THAT.

IF THEY CAN SEE, CONTINUE TO HOLD KIND OF AT THE SAME LEVEL THEY ARE, WE, WE, WE COULD PROBABLY ABSORB IT JUST WITH VACANCY SAVINGS.

OTHERWISE WE WOULD HAVE TO GO BACK TO COUNCIL FOR A BUDGET AMENDMENT MID-YEAR IF, IF WE'RE NOT ABLE TO GET, YOU KNOW, THE MO MOST OF IT IMPLEMENTED IT IN THE CURRENT YEAR.

UM, BUT JUST TO CLARIFY BY HRD, YOU MEAN HUMAN RESOURCES, HUMAN RESOURCES DEPARTMENT.

SO, SO WE'VE GOT OUR OWN INTERNAL HR STAFF.

AND, UM, YOU KNOW, WHEN WE SAY HRD, THAT'S A CENTRAL HR, SO THEY'VE GOT TO BLESS EVERYTHING THAT WE DO.

AND, UH, SO WE'VE MADE OUR PROPOSAL.

WE'RE WAITING FOR FEEDBACK FROM THEM, NOTHING FURTHER, UH, JESSE, JUST TO BRING YOU UP TO SPEED, WE ARE TALKING ABOUT, UH, ITEM A ONE, THE, UH, FEBRUARY, 2020 TO BOIL WATER NOTICE IN THE APPROVAL OF A BUDGET AMENDMENT OF $1.6 MILLION AT COUNCIL PASSED ON THURSDAY OF LAST WEEK.

UM, DOES ANYBODY ELSE HAVE ANY OTHER QUESTIONS ON THAT GRANT OR JOSIE? UM, I DO HAVE QUESTIONS, BUT THEY'RE REALLY NOT RELATED TO BUDGET MORE THAN HOW YOU'RE GOING TO IMPLEMENT IT.

SO WE CAN SAY THIS DISCUSSIONS FOR, UH, THE COMMISSION MEETING, BECAUSE IT'S GOING TO BE HARD AS A HEAVY LIFT TO HIRE THAT MANY PEOPLE WELL, AND, AND, AND, YOU KNOW, TO, TO FOLLOW UP ON IN COMMISSIONER MICHELLE'S QUESTION AND, AND JUST HIRING, YOU KNOW, WE'VE ACTUALLY DONE A REALLY GOOD JOB OF HIRING THIS YEAR.

WE STARTED THE YEAR WITH 138 VACANCIES, AND, YOU KNOW, AS A, AND THIS IS A COUPLE OF WEEKS OLD, BUT AS OF A COUPLE OF WEEKS AGO, WE'VE HIRED 142 THAT THE CHALLENGE, UM, IT, IT IS A HARD MARKET TO HIRE IN, BUT, UH, THE CHALLENGE IS, YOU KNOW, WE'VE JUST, UH, WITH RETIREMENTS AND OTHER, UM, YOU KNOW, OTHER TRANSITIONS, UH, WE'VE, WE'VE LOST ALMOST AS MANY AS WE'VE HIRED, SO IT LOOKS LIKE WE HAVEN'T MADE ANY PROGRESS.

ON TO ITEM A, TO AUSTIN WATER, FINANCIAL FORECAST, PHYSICAL YEAR 23 TO 27.

ANYBODY ELSE? NO MORE QUESTIONS ON THIS ITEM.

ALL RIGHT.

MOVING

[A.2. Austin Water Financial Forecast Fiscal Year 2023-2027 ]

RECENTLY PRESENTED TO THE COUNCIL.

AND THEN I'LL JUST START, UH, JUST TO TAKE A STEP BACK, UH, FOR, FOR THOSE OF YOU THAT HAVE BEEN ON THE BUDGET COMMITTEE BEFORE.

UM, YOU KNOW, AND AS I SAID EARLIER, WE HAVEN'T SUBMITTED OUR PROPOSED BUDGET YET, SO IT HASN'T MADE IT TO, UH, TO THE BUDGET OFFICE, CITY MANAGER'S OFFICE AND CERTAINLY NOT TO COUNCIL YET.

AND SO WE'RE STILL WORKING THROUGH THAT.

AND SO, UM, AS, AS WE HAVE IN YEARS PAST, WE, WE GENERALLY START THESE MEETINGS WITH A FINANCIAL FORECAST UPDATE.

OUR FINANCIAL FORECAST WAS SUBMITTED, UH, TO CITY MANAGER'S OFFICE BACK IN, IN MARCH AND, UH,

[00:10:01]

UM, SO, SO IT'S PUBLICLY INFORMATION PUBLICLY AVAILABLE INFORMATION.

AND, AND SO GENERALLY, UM, YOU KNOW, WE'VE BEEN ASKED TO, TO, UH, AVOID SHARING PUBLICLY INFOR INFORMATION THAT'S NOT PUBLICLY AVAILABLE.

AND SO, SO TODAY'S FOCUS WILL BE ON, ON THE FINANCIAL FORECAST, WHICH PROVIDES A GOOD SENSE OF WHERE, UM, YOU KNOW, WHERE WE THOUGHT WE WERE HEADED FOR IN TERMS OF BUDGET PROPOSAL BACK IN MARCH.

UM, SO THAT'S, YOU KNOW, ITEM A TWO, WE'LL TALK A LITTLE BIT ABOUT, YOU KNOW, DEBT MANAGEMENT, UM, AS, AS IT RELATES TO THE FORECAST, UH, GIVE YOU THE BUDGET SCHEDULE.

AND THEN A NEW THING IS, YOU KNOW, BUDGET COMMITTEE RECOMMENDATIONS AND INPUT IS SOMETHING THAT THE CITY'S BEEN DOING FOR FOR A FEW YEARS NOW IS ASKING, YOU KNOW, COMMISSIONS FOR, FOR INPUT AND RECOMMENDATIONS INTO THE BUDGET PROCESS.

UM, AND MOST OF THE COMMISSIONS THAT HAVE PROVIDED INPUT PROVIDED THAT IN MARCH.

UM, AND IT WAS SOMETHING WE WERE GOING TO REACH OUT TO YOU GUYS.

UM, IT WOULD HAVE THE COMMISSION MEETINGS, UH, BUT WE'LL WATER NOTICE HAPPENED AND IT KINDA GOT PUT ON THE BACK BURNER.

UM, SO GOING FORWARD, WE WOULD ANTICIPATE, YOU'RE KIND OF REACHING OUT A LITTLE BIT EARLIER IN THE PROCESS TO GET YOUR INPUT, BUT WE DO STILL HAVE A FEW WEEKS BEFORE WE'RE SUBMITTING OUR BUDGET.

AND, AND SO THE, UM, SO AS WE, WHEN WE GET TO THAT POINT, THE ASK WILL BE, YOU KNOW, ARE THERE ANY RECOMMENDATIONS THAT YOU GUYS HAVE AS A COMMITTEE, UM, THAT, UH, YOU WOULD LIKE TO SEE US POTENTIALLY INCLUDE IN OUR PROPOSED BUDGET? ALRIGHT.

AND WITH THAT, UM, I'LL MOVE FORWARD, UH, AND YOU WILL START, UH, THE DISCUSSION WITH THE, UH, REVENUE SUMMARY.

UM, SO, UH, CHRISTINA ROMERO, WE'LL, WE'LL COVER THAT.

UM, SHE'S THE DIVISION MANAGER OVER OUR FINANCIAL MANAGEMENT, UH, GROUP, OUR FINANCIAL MANAGEMENT DIVISION, AND THEY'RE RESPONSIBLE FOR, FOR RATES AND REVENUES AND FORECASTING.

AND THEN WE'LL HAND IT OVER TO SONG LEE FLOYD, WHO'S OUR DIVISION MANAGER OVER, UM, BUDGET AND ACCOUNTING, AND SHE'S RESPONSIBLE FOR THE, THE OPERATING AND MAINTENANCE BUDGET, UM, HAND IT BACK OVER TO TINA, UH, FOR RATES AND BILL IMPACT.

AND THEN, YOU KNOW, KIND OF AS A TEAM, WE'LL WRAP UP WITH THE FORECAST FUNDS SUMMARY, AND, UM, WHAT THAT LOOKS LIKE, ALL RIGHT, WITH THAT, I HOME TURN IT OVER TO TINA.

HELLO, TINA ROMERO.

UH, THIS IS A DIVISION MANAGER, UH, WITH AUSTIN WATER.

AND SO I WILL BE GOING OVER AS JOSEPH MENTIONED, A REVENUE AND SEVERAL OTHER ITEMS. AND, UM, THIS IS THE REVENUE BACKGROUND AND ASSUMPTION SLIDE.

SO SERVICE RATE INCREASES FORECASTED IN FYI 2024 AND FYI 2026.

AND WE'LL SHOW YOU THAT ON ANOTHER SLIDE OF OUR PROPOSED RATE INCREASES, THEN IN THE FORECAST, OR I SHOULD SAY OUR FORECASTED RATE INCREASES, UM, WE HAVE MODEST CUSTOMER GROWTH ABOUT ONE POINT BY PERCENT THAT WE'RE SEEING.

AND SO THAT IS WHAT WAS FORECASTED WITHIN OUR, OUR REVENUES.

UH, WE SAW ABOUT 5,800 AVERAGE MONTHLY RESIDENTIAL, UM, WATER CONSUMPTION ABOUT 3,700 ON AVERAGE MONTHLY RESIDENTIAL WASTEWATER FLOWS.

AND THAT'S, UM, THOSE NUMBERS ARE PART OF OUR PROJECTION AND HOW WE, UM, GOT TO THE REVENUES FOR OUR FORECAST.

SURE.

WHAT ARE THOSE UNITS FOR THOSE TWO VALUES? 5,800 OH, UM, MILLION GALLON, THAT'S 5,800 GALLONS, UH, WHICH IS OUR AVERAGE RESIDENTIAL CONSUMPTION, UH, PER MONTH.

AND, AND THOSE ARE, YOU KNOW, UH, BASICALLY FLAT.

UH, WE, WE HAVEN'T SEEN ALL THE WAY TO INITIALLY SEEN, UH, AN INCREASE IN RESIDENTIAL AND MULTIFAMILY CONSUMPTION RELATED TO THE PANDEMIC AS EVERYBODY WAS WORKING FROM HOME.

THEY'VE KIND OF LEVELED OFF AND REVERTED BACK TO OUR PRE PANDEMIC LEVELS OF 5,800, UH, GALLONS OF WATER CONSUMPTION PER MONTH AND 3,700, UH, WASTEWATER FLOWS.

YES, I'M SORRY.

WAS IT MILLION GALLONS? I LOOK AT THE FORECAST ALL THE TIME IN MILLIONS OF GALLONS.

SO, UM, THANK YOU JOSEPH, FOR THAT INFORMATION.

SORRY TO INTERRUPT.

BUT SINCE WE WERE PAUSING FOR A QUESTION, UM, I WANTED TO ASK YOU ABOUT, UH, THE MODEST CUSTOMER ACCOUNT GROWTH, UM, YOU KNOW, TREND WISE, AUSTIN'S BEEN A HOT MARKET, HOT REAL ESTATE MARKET.

PEOPLE CONTINUE TO MOVE HERE AT A MUCH MORE RAPID PACE THAN WHAT ONE MIGHT CONSIDER TO BE A MODEST GROWTH CURVE.

SO I WAS JUST

[00:15:01]

CURIOUS WHY, UM, OUR ACCOUNT GROWTH IS FAIRLY MODEST COMPARED TO THE GROWTH THAT'S OCCURRING IN THE CITY AND THE REGION THAT'S PRETTY RAPID.

AND SO TO SPEAK ONTO SOME OF THAT, UM, BASED ON THE ACCOUNT GROWTH, UM, WE ARE SEEING AN INCREASE, BUT, UM, THIS 1.5% IS IN RELATION TO THE TOTAL NUMBER OF ACCOUNTS THAT WE HAVE.

AND THAT'S WHY IT SHOWS 1.5%, EVEN THOUGH, UH, WE'RE LOOKING AT ADDING ANOTHER 10,000 CUSTOMERS OR SO ON THE WATER SIDE, AND THEN ANOTHER 10,007 TO 10 ON THE WASTEWATER SIDE.

AND, AND RECALL THAT, YOU KNOW, THOSE ARE AVERAGE NUMBERS, YOU KNOW, IS, UH, WE LOOK AT OUR DIFFERENT CUSTOMER CLASSES.

UM, YOU KNOW, WE'RE SEEING STRONGER GROWTH IN, IN, IN SOME AREAS, YOU KNOW, THE, UH, COMMERCIAL IS, IS BOTH REBOUNDING FROM THE PANDEMIC, BUT, BUT WE'RE SEEING STRONG, UH, COMMERCIAL GROWTH, UM, ON THE RESIDENTIAL SIDE, IT'S, YOU KNOW, NOT AS, NOT QUITE AS STRONG, UM, IT'S IN THE LOWER 1%, LIKE ONE, 1%.

AND SO THIS IS BASED ON, ON, YOU KNOW, KIND OF GENERALLY WE LOOK AT, YOU KNOW, THREE TO FIVE-YEAR AVERAGE AND, AND, AND LOOK FOR, UM, SOMETHING THAT'S REPRESENTATIVE OF WHAT WE EXPECT TO HAPPEN IN THE FUTURE.

SO ALTHOUGH WE'RE SEEING A TON OF DEVELOPMENT AND WE'RE SEEING THAT COME THROUGH, UH, BOTH IN CAPITAL RECOVERY FEES AND IMPACT, YOU KNOW, IMPACT FEES, UM, IT HASN'T YET TRANSLATED TO A SIGNIFICANT INCREASE IN TERMS OF, OF WHAT WE'RE SEEING ON THE ACCOUNT SIDE.

YES, YOU'RE WELCOME.

UH, THAT'S PARTIALLY PART OF THAT WHERE WE DO HAVE SOME ACCOUNT GROWTH IN RECLAIMED, UH, HOWEVER, UM, THE, UH, BIG AMOUNT IS DUE TO A SANDHILL, BRINGING THEM UP TO OUR RECLAIMED RATES.

AND, UH, NEXT IS THE MINIMAL PANDEMIC IMPACT ON REVENUE.

SO, UM, WE ARE SEEING REBOUNDING ON THE COMMERCIAL SIDE WHERE WE ARE PICKING BACK UP ON REVENUES, UM, BACK, UM, TO WHERE WE WERE IN PRE COVID.

NOT EXACTLY AT THAT LEVEL, BUT WE ARE GETTING BACK THERE.

IT SEEMS. UM, AND SO WE FOUND THAT WE HAVE, UM, MINIMAL PANDEMIC IMPACT, UH, IN, UH, 21 THAN WE DID IN 20.

AND WE'RE WORKING TO UPDATE WHOLESALE RATES AS CONTRACTS COME UP FOR RENEWAL.

SO THE CURRENT, UM, WHOLESALE CUSTOMERS WE ARE WORKING ON RIGHT NOW, SINCE THAT VALLEY WINDEMERE WCID 10 OR, OR WATER DISTRICT PRETEND, UH, AND NIGHTHAWK.

AND SO THOSE ARE THE ONES WE'RE WORKING ON RIGHT NOW, UM, UPDATING THOSE CONTRACTS AND UPDATING RATES.

THIS NEXT SLIDE HERE IS OUR FORECASTED REVENUE SUMMARY.

WE BROKE THIS UP OUT OF OUR THREE MAJOR FUNDS, A WATER SERVICE, WASTEWATER SERVICE, AND RECLAIMED, AND THEN OUR, OUR MISCELLANEOUS OTHER REVENUE, UH, THAT IT'S NORMALLY FINES OR FEES AND OUR TRANSFERS IN.

SO AS YOU CAN SEE THE WATER SERVICE REVENUE, THAT'S WHERE A BULK OF OUR REVENUE COMES FROM.

AND, UM, OUR AMENDED BUDGET FOR FYI 22 SHOWS $311.1 MILLION.

SO WE GRADUALLY INCREASE IN 23 AND 24 ALL THE WAY TO 27 BASED ON THAT CUSTOMER ACCOUNT GROWTH.

AND BASED ON THE, UM, AVERAGE GALLONS PER ACCOUNT, SAME THING THAT WE'RE GOING TO SEE FOR WASTEWATER SEEING THAT MODEST, UH, ACCOUNT GROWTH.

UH, WE'RE GOING TO SEE THE SAME WITH REVENUES WHERE WE'RE, UM, YEAR OVER YEAR ARE SHOWING AN INCREASE.

AND AS YOU LOOK IN 24 AND 26, UH, THE REASON THOSE LOOK A LOT HIGHER IS BECAUSE IT FACTORS IN, UH, OUR FORECASTED RATE INCREASE THAT WE'LL SHOW YOU ON ANOTHER SLIDE, A RECLAIM SERVICE AS WELL.

WE'LL HAVE THAT, UM, RATE INCREASE IN 24 AND ALSO IN 26.

AND THEN ON THE OTHER REVENUE SIDE, WE ARE SLIGHTLY SEEING AN UPTICK IN OUR REVENUES, UH, YEAR OVER YEAR, UH, TRANSFERS IN, UM, YOU SEE THAT THAT'S DECLINED IN 23, THAT'S REALLY DUE TO THE DEBT DEFEASANCE.

WE HAD A REALLY LARGE DEBT DEFEASANCE TRANSACTION, UH, THIS PAST DECEMBER.

AND SO WE'RE, WE'RE ACTUALLY PROJECTING A, UH, LOWER DEBT DEFEASANCE, UH, IN THE $40 MILLION RANGE.

AND THEN IT'LL SLIGHTLY, UH, DECREASE AGAIN, JUST BASED ON THE DEFEASANCE TRANSACTIONS YEAR OVER YEAR.

ANY QUESTIONS ON THIS SLIDE? YES.

UH, ON THE RECLAIM SERVICE, UM, FORECAST SEEMS LIKE BETWEEN FYI 22 AND 24 IS A DECENT INCREASE THERE.

AND THEN IT KIND OF LEVELS OFF A BIT, UH, IS THAT, UM, MAINLY DUE TO, UM, THE, UH, POTENTIAL CUSTOMER BASE FOR, FOR THE RECLAIM SYSTEM, UM, THAT MOST OF THOSE POTENTIAL CUSTOMERS ARE, ARE TAPPING IN AND BEING SERVED IN THAT AFTER ABOUT 24, WE'RE JUST PROTECTING THAT TO LEVEL OFF A BIT.

[00:20:01]

GOTCHA.

THANKS.

WITH ALL THE JUSTIFICATIONS.

SO NOW I WILL TURN IT OVER TO, UM, SONG LEE WHO WILL GO OVER ALL THE REQUIREMENTS.

THANKS, TINA.

SO SUDDENLY FLOYD, UH, WITH AUSTIN WATER, GOOD AFTERNOON, I'LL COVER THE EXPENDITURE REQUIREMENT PART.

AND, UH, NORMALLY WHEN WE TALK ABOUT FORECAST ASSUMPTIONS, IT'S A COMBO OF ASSUMPTIONS FROM AUSTIN WATER, AS WELL AS DIRECTIONS THAT WE RECEIVE FROM BUDGET OFFICE.

SO THIS YEAR, UH, VERY, UH, VERY OFTEN THE BUDGET OFFICE WILL EVERY YEAR BUDGET FOR A TWO TO 3% OF WIDGET ADJUSTMENT THIS YEAR.

AT THIS POINT OF TIME, THEY HAVE NOT MADE THE DECISION.

HOWEVER, DURING THE FORECAST TIME, THEY DID ADVISE US TO INCLUDE THE 2% AS A PLACE HOLDER.

SO THE FORECAST IS THAT WE ARE SHOWING YOU DOES INCLUDE A 2% WAGE ADJUSTMENT, AND THEN WE HAVE A LIST OF THE INTER DEPARTMENTAL COST DRIVERS THAT'S PROVIDED BY THE BUDGET OFFICE.

I HAVE ANOTHER SLIDE FOLLOWING THIS THAT I'LL BE ABLE TO SHOW YOU A LITTLE MORE DETAIL.

AND THEN OF COURSE, I WILL ALSO HAVE ANOTHER SLIDE THAT WILL SHOW YOU, UH, OUR NEW FTE REQUESTS, UH, TO ACCOUNT FOR OUR CONTINUED STAFFING INVESTMENTS.

SO, UH, THE NEW FT PROPOSED THE WORLD SUPPORT AS THE RESIDENCY STRATEGIC INITIATIVES, AS WELL AS SUPPORTING THE CUSTOMER GIRL ALSO, UM, I WILL SHOW YOU ANOTHER, UH, MORE DETAILED INFORMATION THAT WE'LL BE ABLE TO, YOU YOU'LL BE ABLE TO SEE THAT WE DO HAVE INCREASED COSTS DUE TO INFLATION AND THE SUPPLY CHAIN ISSUES AS, OR CHALLENGES AS WELL DUE TO THE PANDEMIC, AND THEN, UH, CASH FUNDING, AS A PERCENTAGE OF THE CAPITAL PROJECT ARE EXPECTED TO DECLINE, UH, AS A CAPITAL SPENDING PLAN GIRL.

UM, TINA, DO YOU WANT TO EXPAND ON THAT? YEAH, I CAN.

UM, YEAH, SO, YOU KNOW, WHERE OBVIOUSLY YOU'VE GOT SEVERAL LARGE PROJECTS ON THE HORIZON, UM, INCLUDING, YOU KNOW, EXPANSION WHEN YOU WANT IT CREEK A WASTEWATER TREATMENT PLANT EXPANSION.

UM, ASRS IS OUT OF THE FIVE-YEAR FORECAST PERIOD AND THE FIVE-YEAR CAPITAL SPENDING PLAN PERIOD, BUT IT'S, IT'S ON THE HORIZON.

SO AS WE, AS WE START TO, UM, TO INCLUDE THOSE SIGNIFICANT PROJECTS IN, IN OUR SPENDING PLAN, YOU OUR ABILITY TO, UM, TO CASH FUND, UH, YOU KNOW, AT, AT 40, 45, 50%, IT DIMINISHES, IT BECOMES MORE CHALLENGING.

UM, AND SO AS WE LOOK AT THE, EXCUSE ME, OVER THE FORECAST PERIOD, WE EXPECT, UM, YOU KNOW, A MODEST DECLINE IN, IN THE FUNDING PERCENTAGE, BUT, BUT THE DOLLARS WILL PROBABLY CONTINUE TO GROW.

UM, YOU KNOW, DESPITE THE DECLINE IN PERCENTAGE OF OVERALL CASH FUNDING.

AND THEN OF COURSE OUR CONTINUE THEIR MANAGEMENT EFFORTS.

I THINK TINA COVER LATER COVER LATER IN, IN OUR CHART, UM, THAT WE'RE GOING TO SHOW YOU, SO THIS IS MORE LIKE OVERVIEW.

NOW WE'RE GETTING TO THE DETAIL.

SO THIS SLIDE SHOWS OUR PROGRAM REQUIREMENT, ASSUMPTIONS.

UH, THAT'S WHAT THE MAJORITY OF THE ITEMS THAT MADE UP OUR, UH, ADDITIONAL FUNDING THAT WE ARE FORECASTING AND ARE NEEDED FOR THE PROGRAM REQUIREMENTS.

SO THE FIRST ITEM YOU'LL SEE IS A 45 NEW FTES THAT WE ARE REQUESTING FOR THE COMING FISCAL YEAR TO 2023.

NOW EVERY YEAR AUSTIN WATERS, EXECUTIVE TEAM ACTUALLY SPENT, UH, QUITE, UH, THEY WILL SET UP A, QUITE A FEW MEETINGS JUST TO DISCUSS THE INCOMING FTE NEEDS.

SO THEY WILL LOOK AT ALL OF THE PROPOSED INCREASE FROM EACH PROGRAM AREAS AND EACH DIVISIONS

[00:25:01]

AND THEN IT'S A VERY, UM, EXTENSIVE DISCUSSION.

AND, UH, EVERY 80 HAS TO BE ABLE TO SUPPORT WHAT THEY, WHAT THEY ARE REQUESTING.

AND THE, UM, IT'S, IT'S A COUPLE HOURS PER MEETING, I THINK, AS IT GOES THROUGH THREE DIFFERENT MEETINGS AND COME UP WITH A, UH, NORMALLY IT'S A TWO YEAR PLAN WHERE WE ARE SHOWING YOU HERE IS A SO YEAR ONE WHERE WE ARE REQUESTING FOR FY 23.

I DO HAVE ANOTHER SLIDE AS I WAS, OH, YES, SIR.

OR INTERRUPT THE 45 FTES.

DOES THAT INCLUDE THE 16 THAT WAS APPROVED LAST WEEK BY COUNCIL? NO, THE 16 FTES IS WHAT WE CONSIDERED A BUDGET AMENDMENT.

SO IT WILL ACTUALLY BE ADD ON TOP OF THE KULIN FTE COUNT.

AND, UH, IT'S ALSO SOMETHING WE WILL, UH, IN FACT, THE, WE ALREADY CONTACTED THE BUDGET OFFICE LAST WEEK, UH, AFTER THE COUNCIL APPROVED THE MINIMUM.

SO WHAT WE'LL HAVE TO DO IS WE'LL ADD IT DIRECTLY INTO THE BENDER, WHICH IS OUR PAYROLL SYSTEM, AND THEN START THE HIRING PROCESS.

SO THIS 45 IS ON TOP OF THE 16TH, I WILL REQUEST.

CORRECT.

RECALL THAT THIS IS BASE CURRENTLY.

I RECALL THAT EVERY, EVERYTHING THAT WE'RE PRESENTING TODAY IS BASED ON OUR FORECAST THAT WAS SUBMITTED IN MARCH.

SO, SO IT, BEFORE THE PROPOSED BUDGET AMENDMENT AND, YOU KNOW, UM, AND THAT'S REALLY BEEN THE ONLY, ONLY SIGNIFICANT CHANGE IN TERMS OF OUR BUDGET SINCE THEN, BUT, BUT, UM, ALL OF THIS INFORMATION IS BASED ON WHAT WE KNEW AT THE TIME AND WE ARE WORKING, WE'RE TRYING TO GET AMENDMENT THROUGH BEFORE SUBMITTAL.

UH, BUT THAT'S ONLY A WEEK OR TWO, SO IT MIGHT NOT WORK.

BUT WHEN WE FIND, WHEN WE HAVE A FINAL PROPOSED FOR 20, 23 BUDGET, SO AT THAT TIME YOU WILL SEE THAT OUR BASE, BECAUSE WE'LL ALREADY BEEN INCLUDING THE AMENDMENT AT 1.6 AT $1.4 MILLION.

SO, UM, THE SECOND MAIN ITEM IS EVERY YEAR, UH, AROUND JANUARY TIME, WE ALSO REACH OUT BECAUSE, UM, BUDGET PROCESS AND THE FORECASTING PROCESS IS BOTH A BOTTOM UP AND A TOP DOWN PROCESS.

SO THE BOTTOM UP SIDE OF THIS PROCESS IS WE REACH OUT DURING JANUARY TIME, WHICH IS QUITE EARLY FOR THE DIVISION MANAGERS, BUT EVERYBODY ARE GRADUALLY GETTING USED TO THE IDEA.

WE ASK THEM TO SAY, HEY, WELL, YOU KNOW, FOR THE FROG FORECAST, BE MORE ACCURATE.

WE NEED TO KNOW WHAT YOUR UPCOMING FISCAL YEAR'S NEEDS ARE.

SO THAT $3.7 MILLION IS, WELL, WE IDENTIFIED DURING THIS PROCESS, WHICH WE'LL REACH IT OUT AND THEY SEND IN THEIR PROPOSAL AND THE SENDING THEIR KNEES.

AND, UH, UH, WE INCLUDED $3.7 MILLION IN THE FORECAST AND A 0.7, UH, ASHRAE IDENTIFIED ONGOING NEEDS, WHICH WILL CARRY FORWARD EVERY YEAR, BUT $3 MILLION WAS THE ONE-TIME COST.

A $450,000 ADDITIONAL FUNDING FOR OUR MAINTENANCE OF PIPELINES.

AND I, I WOULD JUST ADD, UM, ABOUT HALF OF THAT ONE-TIME COST IS ANTICIPATED FOR A POTENTIAL IMPARTIAL HEARING EXAMINER OR RATE REVIEW PROCESS.

UH, CHRISTINA MENTIONED, UM, THAT, UH, WE'RE ANTICIPATING YOUR RATE INCREASES IN 24 AND 26.

SO WE ARE BEGINNING THE, THE EFFORTS TO, UM, HAVE A RATE REVIEW PROCESS MUCH LIKE THE ONE THAT IS ONGOING FOR AUSTIN ENERGY.

UM, I HAD, UH, THAT, THAT FYI 24, UH, RATE INCREASE PROCESS ABOUT 1.6 MILLION OF THAT IS, IS TO, TO FUND THE COST OF A RATE REVIEW PROCESS.

THANKS JOSEPH AND OTHER ELEMENTS, INCLUDING THE 3.7, WE INCLUDED SOME INCREASE, UH, FOR THE CHEMICAL COST.

UH, AS WE HAVE HEARD FROM THE, UH, WE WILL RECEIVING INPUT FROM THE FIELD, THE DIVISIONAL MANAGERS TO IMPRINTS DIVISION MANAGERS THAT TELLING US THAT THE CHEMICAL COST IS INCREASING.

SO, AND WE ALSO INCLUDED, UH, SOME, UH, ADDITIONAL FUNDS FOR THE CONTRACTUAL SERVICES AS WELL.

AND, UH, WE RECEIVING, UH, BOSE FEEDBACKS FROM THE DIVISION MANAGERS, AS WELL AS OUR PURCHASING MANAGERS TO TELLING US THEY ARE NEGOTIATING SOME CONTRACTS THAT HAS REQUESTED PRICING INCREASES.

AND THEN, UH, NOT A BIG ITEM IN THE $3.7 MILLION IS A, WE ACTUALLY INCLUDED

[00:30:01]

AND THAT IS TO ADDRESS THE CHALLENGING AND DIFFICULT AREAS.

SO THIS IS ADDITIONAL FUNDING THAT THEY REQUESTED AND GO DOWN THE LIST.

DO YOU SEE THE 2% WAGE ADJUSTMENTS THAT I MENTIONED, UM, THAT WE INCLUDED, AND, UH, BUT JARVIS WHO TOLD US THAT WE NEED TO INCLUDE A PERCENT FOR HEALTH INSURANCE.

THESE ARE ALL DIRECTIONS NUMBERS THAT WE DON'T HAVE MUCH CONTROL IT.

WE JUST HAD, WE GET A PERCENTAGE AND WE INCLUDE THEM IN THE FORECAST.

AND ANOTHER THING IS THE 7% FLEA MAINTENANCE AS THE END OF THE FLEA FEEL.

I ALSO NUMBERS FROM THE BUDGET OFFICE.

UH, BUT WE, WE HAVE NOT HAD THE FINAL NUMBERS YET, BUT WE DID RECEIVE SOME COMMUNICATION FROM THE FLEET DEPARTMENT.

THEY ARE SAYING THE FUEL COSTS MIGHT NOT COVER 5%, MIGHT NOT COVER THE ACTUAL INCREASE WILL PROBABLY BE MORE THAN THAT.

SO, UM, AND THEN WE, AS A UTILITY ALSO, UM, INCLUDED 2% INFLATION RATE, UH, TO, FOR OVERALL INFLATION RATE TO COVER, OH, AS A COMMODITIES AND CONTRACTUALS, UH, TO BE INCLUDED IN THE FORECAST.

SO THAT KIND OF SUMMARIZES A MAJORITY OF THE MAJOR ASSUMPTIONS THAT WE HAVE INCLUDED IN F I TOLD TWO, THREE FORECAST.

I'LL SEE ANY QUESTIONS.

I JUST KIND OF A QUESTION AND A COMMENT.

I'M JUST CURIOUS TO YOUR THOUGHT PROCESS WITH THESE, THIS, THESE ARE ALL COULD BE PRETTY VOLATILE ITEMS, AND OBVIOUSLY YOU DON'T WANT TO WAY OVERSHOOT AND YOU'RE TRYING TO FIND SOMETHING THAT MAKES SENSE.

WHAT'S THE, WHAT'S YOUR THOUGHT PROCESS ON THAT? IF YOU START SEEING THIS STARTS CHANGING, IS THIS AN AMENDMENT THAT WOULD POTENTIALLY COME OUT OR, YOU KNOW, WHAT'S THE THINKING AS MORE INFORMATION BECOMES AVAILABLE? SO, YOU KNOW, AGAIN, YOU KNOW, THIS, THIS WAS BASED ON OUR MARCH FORECAST AND AT THE TIME WE HADN'T SEEN, YOU KNOW, WE'D SEEN, YOU KNOW, SOME SMALL INCREASES IN, IN, IN CHEMICALS.

YOU WANT A COUPLE OF CHEMICALS, BUT, BUT IT SEEMED LIKE AS SOON AS WE SUBMITTED OUR FORECAST THAT, UM, YOU KNOW, I, I THINK I WAS GETTING, YOU KNOW, FOUR OR FIVE, UM, CONTRACTUAL ADJUSTMENTS FOR PRICE INCREASES, UM, YOU KNOW, COMING IN.

SO, SO THIS WAS, UM, THIS WAS OUR FORECAST AND THE FORECAST, UH, IS, IS REALLY THE STARTING POINT FOR OUR BUDGET PROCESS.

UM, BUT OUR, OUR BUDGET PROCESS REALLY STARTS UP FROM, FROM A UTILITY PERSPECTIVE, YOU KNOW, THE END OF FEBRUARY, BEGINNING OF MARCH.

AND, AND SO FORTUNATELY, OR UNFORTUNATELY, DEPENDING ON HOW YOU LOOK AT IT, WE HAD AN OPPORTUNITY TO, TO REFINE AND, AND, UM, YOU KNOW, AS, AS WE GET TO OUR PROPOSED BUDGET, IT'S GOING TO INCLUDE, YOU KNOW, SOME OF THE IMPACT OF SOME OF THOSE CONTRACT MODIFICATIONS, WHAT WE'RE HEARING FROM, FROM THE DIVISION MANAGERS.

UM, YOU KNOW, BECAUSE CAUSE SINCE THEN I FEEL LIKE INFLATION IS KIND OF GONE CRAZY EVEN WELL ABOVE WHERE WE SAW WHERE IT WAS AT THE TIME AND WHAT WE, WHAT WE WERE THINKING AT THE TIME WAS, YOU KNOW, THAT, THAT, YOU KNOW, THE ADDITIONAL 2% WAS, YOU KNOW, NOT QUITE HALF OF WHAT WE WERE SEEING OVERALL INFLATION, BUT WE WEREN'T NECESSARILY SEEING, UM, YOU KNOW, WE WEREN'T NECESSARILY SEEING THAT IMPACT YET.

AND, AND, UH, WHEREAS WE HAVE OVER THE LAST FEW MONTHS, AND SO WE, WE'VE GOT AN OPPORTUNITY TO ADJUST IN TERMS OF OUR FINAL BUDGET SUBMITTAL.

UM, AND YOU KNOW, IF, IF WE CONTINUE TO SEE THOSE KINDS OF INCREASES, YOU KNOW, IF THEY'RE, IF THEY'RE LARGE ENOUGH AND THEY REQUIRE US TO DO A BUDGET AMENDMENT, WE WOULD DO THAT.

WE DO HAVE SOME CONTINGENCY, UM, IN OUR BUDGET, ALMOST $2 MILLION.

AND HISTORICALLY THAT'S BEEN ABLE TO COVER, YOU KNOW, UH, YOU KNOW, UNANTICIPATED, YOU KNOW, EVENTS, WHETHER IT'S A BOIL WATER NOTICE AND, YOU KNOW, WATER DISTRIBUTION, OR WHETHER IT'S SOME OF THESE CONTRACTS COMING UP.

UM, SO, UM, AND WE WOULD LOOK AT, UM, YOU KNOW, POTENTIALLY INCREASING, YOU KNOW, OUR, OUR CONTINGENCY JUST BECAUSE OF WHAT'S GOING ON IN THE SUPPLY CHAIN MARKET.

ANY OTHER QUESTIONS? I HAVE A QUESTION.

SO DID YOU, WHERE IS YOUR CONTINGENCY? LIKE, DID YOU INCREASE IT AT ALL OVER NORMAL? THAT'S NOT CALLED OUT HERE SPECIFICALLY.

THAT'S NOT CALLED OUT IN THE FORECAST.

UM, SO WE'VE HAD SOME INTERNAL DISCUSSIONS ABOUT YOU'D BE INCREASING.

WILL THAT SHOW UP IN ANY OF THE, THE FUNDS, WILL THAT SHOW UP ANYWHERE ELSE TODAY? NOT TODAY.

THE CONTINGENCY RESIDES SO HELP.

NOT AS AN INDIVIDUAL LINE ITEM, BUT LATER ON WHEN WE SHOW YOU THE FUND SUMMARY, I CAN POINT TO YOU WITH THE LINE,

[00:35:01]

NEXT SLIDE.

SO, AS I WAS SAYING EARLIER, IT'S A COMBO OF AUSTIN WATER ASSUMPTION, AS WELL AS BUDGET OFFICE ASSUMPTION.

SO, BUT YOUR OFFICE WOULD GIVE US A LONG LIST.

UM, ONE OF THE, YEAH, I KNOW THESE, UH, ITEMS. WE, UH, AGAIN, WE REALLY DON'T HAVE MUCH CONTROL.

WE, UH, INCRUSE THEM.

AND, UH, SO YOU SEE THE INSURANCE FEEL CTM INTO DEPARTMENTAL CHARGES, SEE TECH, UH, RADIO NETWORK, WIRELESS MAINTENANCE, ACCRUE, PAYROLL, ADMINISTRATIVE SUPPORT WORKS COMP AND ELABORATE RESERVES AT ZERO THIS YEAR.

SO, UH, AT THIS POINT IN TIME, WE DON'T HAVE ALL OF THE FINAL NUMBER YET, AND THIS IS JUST THE PERCENTAGE YOU WAIT.

THEY TOLD US TO INCLUDE FOR THE FORECAST.

AND A LOT OF THESE, FOR EXAMPLE, THE ADMINISTRATIVE SUPPORT, THEY CAN'T COME UP WITH A REAL PERCENTAGE AND TO KNOW WHAT PERCENTAGE IT WILL BE UNTIL EVERYBODY OWES A GENERAL FUND, UH, DEPARTMENT'S BUDGET IS SUBMITTED.

SO IT'S, UH, A PRETTY LATE PROCESS.

AND WE WON'T KNOW, UH, WHAT THE ACTUAL PERCENTAGE WILL BE UNTIL PRETTY CLOSE TO THE SUBMITTAL.

SO, YES, UH, CTO IS COOK COMMUNICATIONS AND TECHNOLOGY MANAGEMENT.

THAT'S OUR IT DEPARTMENT OR INFO SYSTEMS DEPARTMENT, AND C TECH IS COMBINED TELECOMMUNICATIONS.

WHAT'S A CC CALL, RIGHT.

SO I WOULD ADD THOUGH THAT, ALTHOUGH, YOU KNOW, WE DON'T CONTROL THESE COSTS, YOU KNOW, FROM A PERCENTAGE PERSPECTIVE, WE DO TAKE STEPS TO DO WHAT WE CAN TO, TO, TO CONTROL THESE COSTS.

FOR EXAMPLE, UM, THE, UM, UM, COMMUNICATIONS AND TECHNOLOGY MANAGEMENT, CTM, UM, ALL A LARGE PART OF THOSE COSTS ARE ALLOCATED BASED ON, UM, DEVICES SUPPORTED.

AND, AND SO THERE WAS A TIME WHERE, YOU KNOW, WE FELT LIKE IT WAS MORE PRODUCTIVE TO HAVE, YOU KNOW, MAYBE A DESKTOP AND A PORTABLE DEVICE.

WELL, THEY, THEY ALLOCATE COSTS BASED ON NUMBER OF DEVICES SUPPORTED.

SO, SO WE'VE PULLED BACK FROM THAT AND, AND HAVE SHIFTED MORE TOWARDS LAPTOPS.

SO WE HAVE A SINGLE DEVICE, UM, AND SO WE CAN REDUCE THE NUMBER OF DEVICES THEY'RE SUPPORTING.

UM, AND SO REDUCING OUR SHARE OF THE OVERALL CITY BURDEN, UH, FOR, FOR COMMUNICATIONS AND TECHNOLOGY MANAGEMENT, SAME THING WITH FLEET.

UM, YOU KNOW, THERE HAS HISTORICALLY, UM, WE'VE, WE'VE TRIED TO USE OUR VEHICLES AS, AS, AS LONG AS THEY WOULD LAST.

UM, BUT WITHIN WE FOUND THAT WE WERE GETTING, YOU KNOW, A BIGGER INCREASE OF, OF THE FLEET MAINTENANCE COSTS.

AND SO NOW WE'RE TRYING TO BALANCE WITH, WITH KIND OF A YOUNGER FLEET.

UM, AND, AND SO WE'RE TRYING TO REPLACE OUR VEHICLES A LITTLE BIT MORE FREQUENTLY TO, TO REDUCE OUR FLEET AND FUEL MAINTENANCE.

AND OF COURSE, YOU KNOW, NEWER VEHICLES ARE GENERALLY MORE, MORE FUEL EFFICIENT.

SO, SO WE'RE, WE'RE EXPECTING TO SEE, UM, YOU KNOW, OUR PERCENTAGE OF THE ALLOCATIONS FOR, FOR THINGS LIKE FLEET AND COMMUNICATIONS, TECHNOLOGY MANAGEMENT, UM, AND EVEN CTECH YOU, ALL OF OUR, ALL THE DEPARTMENTS THAT, THAT SEE TECH SUPPORTS, UM, A LOT OF THOSE COSTS ARE BASED ON, UM, YOU KNOW, HANDHELD RADIOS SUPPORTED.

AND SO WE'VE DONE A REVIEW OF YOUR, HOW MANY DEVICES DO WE HAVE? HOW MANY DO WE NEED? AND, AND, AND SO WE, WE REVIEWED THOSE ALLOCATIONS PRETTY, UH, PRETTY THOROUGHLY EACH YEAR, AND LOOK FOR WAYS TO REDUCE OUR SHARE OF THAT BURDEN.

C TECH? SO I CAN SPEAK TO THAT CYBER SECURITY CURRENTLY UNDER OUR CURRENT INSURANCE POLICY, WE DO HAVE COVERAGE FOR CYBERSECURITY.

AND TO ADD TO WHAT YOU'RE SAYING, WE DO LOOK AT THESE ALLOCATIONS EVERY YEAR, VERY THOROUGHLY.

AND WE REVIEW THE ALLOCATION OF FACTORS.

A LOT OF THESE EFFECTORS, UM, A LOT OF THESE ALLOCATIONS WILL BASED ON LIKE WHAT JUST FOR SAYING THE COMPUTER DEVICE NUMBER OR THE NEW O UH, OVERALL UTILITY OR DEPARTMENT FTE NUMBERS.

AND, UH, ALSO THEY SOMETIME WILL BASED ON THE BUDGET NUMBERS DOLLAR AMOUNT.

SO IT JUST DEPENDS ON WHAT THE FACTORS ARE, BUT WE DO REVIEW THEM TO MAKE SURE THE CALCULATIONS ARE CORRECT.

AND THE ALLOCATION FACTORS.

SO THEY CONTRIBUTE, THEY ARE, UH, ALLOCATED TO AUSTIN WATER.

CORRECT.

SO, UH, QUICK QUESTION, UM, I'M ENGAGED IN SOME MUD BOARDS AND THEY'RE ALL STARTING TO GET CYBER SECURITY INSURANCE.

IS THE CITY DOING THAT UNDER THIS CTM OR

[00:40:01]

HOWEVER, I KNOW THAT THERE'S ONE DEPARTMENT THAT HAS THEIR OWN COVERAGE FOR IT, BUT WE ARE COVERED, UH, FOR A CERTAIN AMOUNT.

UM, WE JUST, UH, DON'T MAKE IT WIDELY AVAILABLE, KNOWN OF WHAT WE'RE COVERED FOR, UM, BUT IT IS IN OUR INSURANCE POLICY.

AND THIS IS JUST A COMMENT.

UM, I DON'T THINK 3% PAYROLLS ENOUGH, UH, NOW ACCRUED PAYROLL THAT THAT'S, UM, A MECHANISM THAT THE CITY USES TO FUND.

UM, EVERY, EVERY NINE OR 10 YEARS THERE, GENERALLY SPEAKING, WE HAVE 26 PAY PERIODS IN, IN A, UM, IN A FISCAL YEAR.

UM, BUT, BUT JUST FROM A TIMING PERSPECTIVE, EVERY NINE OR 10 YEARS, UM, THERE IS A 27TH PAY PERIOD THAN WHAT ACCRUED PAYROLL IS.

IT'S, IT'S A WAY OF FUNDING THAT EXTRA PAY PERIOD, BUT, BUT REALLY WHAT IT IS, IS LOOKING AT, UM, JUST HOW, HOW THE PAY PERIODS FALL AT THE END OF EACH FISCAL YEAR.

AND SO AT THE END OF EACH FISCAL YEAR, YOU MIGHT HAVE, UM, FOR EXAMPLE, IF, UM, THE FIRST CHECK OF THE NEW YEAR IS FOR WORK DONE THROUGH SAY, UM, SEPTEMBER 23RD.

UM, SO THAT WOULD MEAN THAT THAT LASTS SEVEN DAYS GETS PAID AT THE NEW YEAR.

THEY ACCRUE THOSE COSTS THAT ARE ASSOCIATED WITH THE OLD YEAR AND, AND THE WAY THAT THE TIMING WORKS, YOU KNOW, YOU KIND OF ADD A YEAR A DAY OR SO EVERY YEAR.

AND SO IT, IT KIND OF MATCHES UP WITH THAT 27TH PAY PERIOD.

SO IT'S NOT THAT THAT ACCRUED PAYROLL NUMBER IS NOT A WAGING.

EXACTLY.

THE WAGE INCREASE NUMBER.

ACTUALLY, WE INCLUDED THE YOUTH A 2% TO 2%, WHICH IS OBVIOUSLY AS WE TALKED ABOUT MUCH LOWER THAN, THAN, UM, THEN WHAT WE'RE SEEING INFLATION WISE.

UM, BUT IT'S, UH, THE, THE WAGE INCREASE NUMBER IS, IS, IS SET BY, YOU KNOW, THE CITY MANAGEMENT.

SO, SO WE DON'T HAVE MUCH CONTROL OVER, OVER THAT NUMBER.

WE DON'T HAVE ANY CONTROL OVER THAT NUMBER.

OH, YOU SAID THAT WE'RE SUPPOSED TO PROVIDE RECOMMENDATIONS SO WELL, AND, AND IF THAT'S, YOU KNOW, OBVIOUSLY IF THAT'S AN AREA, UM, YEAH, TH THAT YOU GUYS WANT TO PROVIDE INPUT OR RECOMMENDATION ON, UH, WE WOULD PASS IT ON.

ANY OTHER QUESTIONS? OKAY.

NEXT SLIDE.

SO THIS GIVE EVERYONE A LITTLE EXTRA INSIGHT ON THE 45 NEW FTES, UH, NUMBERS FTES AS WELL AS, UH, RELATING COST.

SO, UM, LIKE WHAT I MENTIONED BEFORE EVERY YEAR, THE EXECUTIVE TEAM WILL GET TOGETHER AND THEY WILL, UH, DISCUSS EXTENSIVELY ON WHICH YOU HAVE TO YOU TO ADD AND TO SUPPORT WHAT INITIATIVES.

SO OF COURSE, OPERATIONAL OPTIMIZATION IS ONE OF THE MOST IMPORTANT, UM, AREAS IS AS WE FOCUSED ON, AS YOU ALL CAN SEE OUT OF THE 45, 15 IS TO SUPPORT THAT EFFORT.

AND THEN, THEN NEXT ONE IS INTO ENTERPRISE RESILIENCY.

AND THEN WE ALSO ADDED, UM, FTES TO, UH, ENHANCE THE EMPLOYEE AND LEADERSHIP DEVELOPMENT AND THE REDUCING CONTRACTOR, THE SERVICE YOU SEE HERE IS A PLAN THAT HAS BEEN IMPLEMENTED SINCE LAST YEAR.

WE ARE TRYING TO BRING THE CONTRACT FOR THE SECURITY GUARD IN HOUSE.

AND AS Y'ALL CAN RE RECALL LAST YEAR, WE, I BELIEVE WE ADDED NINE NEW FTES TO START RE INFLUENCING THE, UM, SECURITY GUARDS CONTRACT SERVICES.

AND AS IN THIS YEAR WERE ADDING TO THAT EFFORT WITH AN ADDITIONAL FIVE.

THIS WILL GO ON PROBABLY FOR A COUPLE MORE YEARS UNTIL WE HAVE 40 TRANSIT, THAT TO MOVE THE ENTIRE SERVICE IN HOUSE.

AND THEN WE ALSO ADDED, UM, FTS FOR CUSTOMER SATISFACTIONS AND STAKEHOLDER UNDERSTANDING AND SUPPORT A LOT OF THE THINGS THAT THE INITIATIVES, UH, CATEGORIES OR CATEGORIES YOU SEE HERE, UH, ASHTRAY PART OF THE EOM ATTRIBUTES.

SO YOU, SOME OF THEM MIGHT SEEM FAMILIAR TO YOU BECAUSE THAT'S, UM, SOMETHING UTILITY TO BEING WORKING

[00:45:01]

ON FOR A FEW YEARS.

NOW, WE USE A LOT OF THESE, UH, U M ATTRIBUTES AS OUR EFFORT AND THE FOCUS.

SO, AND THEN YOU ALSO SEE THAT A COUPLE ZS HERE, MY ATX WATER AND THE WATER FORWARD, THESE ARE MORE AUSTIN WATER INITIATIVES.

SO WE WILL, OF COURSE HAS THESE, BOTH OF THESE FOR COUPLE OF YEARS NOW, AND THE WAY I WAS CONTINUING TO, TO FINALIZE AND REFINE THESE EFFORTS.

AND THEN WE ALSO ADDED A ONE EACH FOR THE AFFORDABILITY INFRASTRUCTURE STRATEGY AND THE PERFORMANCE.

AND AS IN PRODUCT QUALITY, YES.

WHAT EXACTLY IS PRODUCT QUALITY? OKAY.

AT THE CARD, HE WILL HAVE TO PUT UP THE SPANISH.

LET ME LOOK, LOOK, PULL THAT UP AND, AND, UH, GET, GET BACK TO YOU.

UH, OUR RATE WAS 19 CENTS.

SO I WILL MOVE TO THE NEXT SLIDE, UH, WHILE JUST LOOK IT UP.

SO THIS SLIDE, YOU WILL SEE IT'S A TABLE, VERY SIMILAR TO WHAT TINA HAS PRESENTED A BIT AGO, WHICH IS, THIS SHOWS YOU A SUMMARY LEVEL OF THE, UM, REQUIREMENT SUMMARY, WHERE SHE SHOWED WAS A REVENUE SUMMARY.

SO WHAT I HAVE BEEN A FOLK SONG SO FAR IS THE OPERATING REQUIREMENTS BECAUSE, UM, A LOT OF THERE'S A LOT OF DETAILED INFORMATION TO SORT OUT IN THAT CATEGORY.

AND THEN ALSO WE ALSO HAVE DEBT SERVICE REQUIREMENTS AND THE TRANSFER OUTS, UH, WHAT YOU'LL SEE, THAT'S, INTERDEPARTMENT WHOLE TRANSFERS THAT WE WERE TALKING ABOUT CTM SUPPOSE SERVICE TRANSFERS, AND ALSO INCLUDING THAT OUR OPERATING FUND TRANSFERS TO CIP AND THE GENERAL FUND TRANSFERS AND, AND, UH, ITEMS LIKE THAT.

AND YOU WILL SEE THE TOTAL REQUIREMENT OF F Y 23 FORECASTED AMOUNT COMPARED TO, UM, CURRENT YEAR'S BUDGET, UH, IS A $17 MILLION DIFFERENCE.

AND IF YOU REMEMBER RECALL EARLIER, THE SLIDE, I SHOW YOU, I THINK IT TOTALED 14.2 MILLION.

AND, UH, SO IT COVERS THE MAJORITY OF THE INCREASE YES, WE WILL HAVE A FUN SUMMARY THAT WILL, YOU WILL BE ABLE TO SEE YOU CHOSE THE LINE ITEMS, HOW THEY ARE BROKEN NOW, AND AS THE AMOUNT THAT WE ARE FORECASTING, UH, UH, BASED ON THE ASSUMPTION THAT FROM THE BUDGET OFFICE THAT YOU SAW.

SO, YES.

ALL RIGHT.

AND, AND TO ANSWER YOUR QUESTION, COMMISSIONER MICHELLE, UH, THAT POSITION IS A WATER QUALITY, UH, SCIENTISTS POSITION, UH, IN OUR LABORATORY SERVICES, UH, ORGANIZATION.

SO IT'S, IT'S, UH, FOR, YOU KNOW, LAB TESTING AND WATER QUALITY, ANY OTHER QUESTIONS ON THE OPERATING REQUIREMENTS? OKAY.

THEN I WILL TURN IT BACK TO TINA AND SHE WILL TALK ABOUT THE PROJECTED RATE REVENUE INCREASES.

SO THIS IS OUR PROJECTED SERVICE RATE REVENUE INCREASES, UH, WHERE WE'RE SHOWING INCREASES AGAIN IN, UH, FYI 24 AND FYI 26.

AND SO YOU CAN SEE, UM, COMBINED, WE NORMALLY DO A COMBINED WATER AND WASTEWATER OVERALL IT'S 4.7% FOR 24, AND THEN 3.2% IN 26.

AND THERE IS THAT DIFFERENCE BETWEEN WATER AND WASTEWATER IN 20, UH, 26.

AND THAT'S REALLY DUE TO WHAT JOSEPH MENTIONED EARLIER IS A HEAVY CCAP PLAN, AND IT'S JUST HEAVIER ON THE WASTEWATER SIDE.

UM, AND THAT'S WHY YOU'RE SEEING A LITTLE BIT LARGER INCREASE IN WASTEWATER THAN YOU ARE WATER FOR FYI 26, AND THEN, UH, RIGHT BELOW THE COMBINED WATER AND WASTEWATER IT'S RECLAIMED.

AND SO WE'RE SEEING A 4.7% AND 2024, AND THEN A 2% IN 2026.

AND THAT ALIGNS WITH WHAT, UM, IS SHOWN WITH WATER FUND.

AND SO ALSO OUR REVENUE STABILITY RESERVE FUND SURCHARGE.

UH, IF YOU RECALL, BACK IN 2018,

[00:50:02]

WE REDUCED IT TO OUR CURRENT RATE OF 5 CENTS CENTS THEN PER THOUSAND GALLONS.

AND WE REACHED THAT 120 DAYS OF OPERATIONS AND MAINTENANCE BACK IN 2018.

AND THAT'S ALSO A FACTOR OF WHY WE REDUCED THE RATE.

AND I WOULD JUST ADD, UM, YOU KNOW, WITH, WITH THE ANTICIPATED INCREASE IN, IN 24, UH, YOU KNOW, THAT'S ROUGHLY, UH, YOU MAY RECALL WE HAD A 4.8% RATE REDUCTION IN, IN 2018.

UM, AND, AND SO WE'RE, WE'RE ANTICIPATING THAT THIS INCREASE WOULD, WOULD, UH, GET US ROUGHLY BACK TO WHERE WE WERE IN 2018 RATES.

WE HAVEN'T HAD A RATE INCREASE SINCE THAT 2018 RATE REDUCTION.

UM, AND SO WE ANTICIPATE THIS NEXT ONE REALLY WOULD JUST BE KIND OF A CATCH-UP.

UM, BUT, BUT WOULDN'T TAKE US ABOVE, YOU KNOW, WHERE WE WERE IN 2018.

AND SO THIS IS, THIS IS A KIND OF AN ACROSS THE BOARD, YOU KNOW, UH, INCREASE, UH, WHAT YOU, AS WE GO THROUGH, YOU KNOW, OUR, OUR RATE REVIEW AND COST OF SERVICE STUDY IN ADVANCE OF THAT, YOU WILL LOOK AT INDIVIDUAL CUSTOMER CLASSES AND, AND, YOU KNOW, IF THEIR DEMANDS, IF AN INDIVIDUAL CUSTOMER CLASS DEMANDS IS CHANGING IN RELATION TO THE OTHERS, YOU MIGHT SEE A BIGGER INCREASE IN ONE CLASS VERSUS ANOTHER.

UM, BUT WE ANTICIPATE THAT OVERALL, IT WOULD BE AN AVERAGE 4.7% RETAIL RATE INCREASE.

UH, SO AUSTIN, LIKE I SAID EARLIER, AUSTIN ENERGY IS CURRENTLY GOING THROUGH THEIR, UH, RATE REVIEW.

UM, AND SO WE'RE WAITING FOR THEM THEM TO FINISH.

AND, UH, WE, WE LIKE TO TAKE SOME LESSONS LEARNED FROM, FROM, FROM THEIR PROCESS.

UM, BUT WE'RE, WE'RE STARTING THE PROCESS TO, UM, TO, UH, PUT OUT SOLICITATIONS FOR OUR, OUR RATE CONSULTANT FOR, UH, AN IMPARTIAL HEARING EXAMINER, UM, AND A RESIDENTIAL RATE ADVOCATE.

SO OUR HOPE IS TO GET, UH, THROUGH THOSE SOLICITATIONS BY THE END OF THE CALENDAR YEAR, UM, WITH, UH, YOU KNOW, WITH THE PRIOR WORD T BEING THE, THE RATE CONSULTANTS.

SO WE CAN DO OUR COST OF SERVICE STUDY AND, AND UPDATE, UM, IN ADVANCE OF FILING, UH, YOU KNOW, RATE, REVIEW PACKAGE.

AND, UM, SO WE'RE LOOKING AT YOU IN TERMS OF THE RATE INCREASE, UH, YOU KNOW, THAT THAT PROCESS IS ABOUT, UH, UH, EIGHT TO 10 MONTH PROCESS SET.

WE'LL CALL IT SEVEN TO 10 MONTH PROCESS, UM, THAT WOULD LIKELY WRAP UP AROUND BUDGET TIME NEXT YEAR.

SO AUGUST, SEPTEMBER, UH, SO IN TERMS OF IMPLEMENTATION, YOU HAVE ANYWHERE FROM, FROM NOVEMBER TO JANUARY, DEPENDING ON HOW QUICKLY WE CAN WRAP IT UP, IT TAKES A COUPLE OF MONTHS FOR AUSTIN ENERGY TO, TO LOAD NEW RATES.

SO IF WE CAN GET IT DONE KIND OF COINCIDE WITH THE BUDGET PROCESS, THEN, THEN IT MIGHT BE AS EARLY AS NOVEMBER, UM, OR AS LATE AS JANUARY OF 24.

SO IT LOOKS LIKE ALSO WATER-SAVING AIMING FOR FOUR SEVEN.

DO YOU KNOW WHAT AUSTIN ENERGY IS FOR ROUGHLY? UM, WAS IT 17%? IS THAT I THINK THE RESIDENTIAL WAS AROUND 17%, BUT THE OVERALL RATE INCREASE, I WANT TO SAY IT WAS CLOSE TO ABOUT 7% OVERALL FOR ALL THEIR CUSTOMER CLASSES.

UM, AND THEY JUST KICKED OFF THEIR, UM, THEIR RATE PACKET.

THEY JUST FILED IT EARLY LAST WEEK.

AND SO THEY HAD THEIR FIRST, UM, MEETING, UM, LAST TUESDAY, UH, WITH THEIR KEY CUSTOMERS.

SO WHY THE, WHY THE LARGE, I MEAN, I KNOW Y'ALL, DON'T KNOW, BUT THAT'S A PRETTY BIG DIFFERENCE.

SEVEN AND 4.7.

WHY SUCH A BIG DIFFERENCE, UM, FROM WHAT THEY INDICATED IN THEIR PRESENTATION AND A KEY CUSTOMERS IS JUST BRINGING EVERYONE UP TO COST OF SERVICE.

AND THEY FOUND THAT RESIDENTIAL IS REALLY BEHIND THEIR COST OF SERVICE IN THIS WOULDN'T EVEN BRING THEM UP TO COST OF SERVICE, BUT WITH CLOSE THE GAP A LITTLE MORE, BUT YOU CAN SEE ALL THE INFORMATION IT IS ON ONLINE.

THEY DID CREATE A WEBPAGE FOR IT, AND WE WOULD DO THE SAME WHEN WE GET TO RA IHG.

WE WOULD HAVE A WEBPAGE WITH ALL INFORMATION OUT THERE.

UM, THIS ALSO SHOWS THE CHANGE IN FUND BALANCE, UM, AND PROVIDES YOU OUR FORECASTED ENDING FUND BALANCE, WHERE YOU CAN SEE THAT WE'RE STILL IN THE TWO TWENTIES AND IN 27, WE ARE PROJECTING TO BE CLOSER TO TWO 50, UM, AND PARTIALLY THAT'S DUE TO RATE INCREASES AS WELL.

SO NOW THIS SLIDE IS OUR FORECAST FUND SUMMARY.

THIS IS JUST A REALLY HIGH LEVEL, UM, FUND SUMMARY OVERVIEW FOR YOU.

WE'VE TALKED ABOUT ALL THESE NUMBERS IN THE REVENUE AND TRANSFER ZEN, AND THEN THE REQUIREMENTS AND TRANSFERS OUT.

[00:55:01]

SO AS WE, UM, GO INTO NEXT YEAR'S FORECAST, AGAIN, ALL THESE NUMBERS WILL BE UPDATED.

AND OUR AVERAGE MONTHLY BILL, UH, FOR THE RATE INCREASES THAT WE'VE FORECASTED, IT WILL BRING UP, UM, OUR AVERAGE MONTHLY BILL FOR OUR TYPICAL RATE PAYER FROM $80 AND 79 CENTS TO 84 49 AND 24.

AND THEN IN 26, IT'LL GO FROM, UM, IT'LL GO IN 25 FROM 84 49, THEN IN 26 TO 87 49 WITH THE RATE INCREASE.

AND THEN RIGHT BELOW, THAT IS ALL THE FTES, UM, THAT, UM, WE HAVEN'T IN OUR FORECAST AND THEN OUR DEBT SERVICE COVERAGE.

AND YOU CAN SEE ON OUR DEBT SERVICE COVERAGE, WE ARE MEETING OUR NEW FINANCIAL POLICY OF OUR 1.75 AND THEN OUR DAY'S CASH ON HAND, OUR NEW FINANCIAL POLICY OF 180 DAYS.

WE ARE EXCEEDING THAT AND OUR CASH FINANCING OF ANNUAL CIP.

UM, AS JOSEPH MENTIONED, WE WERE IN THE 40 CLOSE TO 40 RANGE AND IS, AS YOU SEE, THROUGH THE OUTER YEARS, WE ARE STARTING TO SEE A DECLINE AND THAT'S JUST DUE TO THE CIP PLAN AND THE PROJECTS, THE LARGE PROJECTS WE HAVE GOING OUT, UH, IN THOSE OUTER YEARS.

AND A QUICK NOTE TO ADD ON THE FTES, THE 1298, YOU SEE, AS A COLONIA F 22, THE NUMBER, THIS NUMBER DOES NOT INCLUDE IN THE 16TH.

SO THE 16 UFT IS HELPING A MINIMUM HAS BEEN APPROVED.

SO, UM, AFTER WE SUBMITTED THE BUDGET AND THIS NUMBER WILL CHANGE IT TO 1314, SO THE WHOLE ROLL-UP WILL CHANGE.

AND THEN I'LL ALSO ADD IN YOUR PACKET, YOU ALSO HAVE A DETAILED FUND SUMMARY.

THIS IS, THIS IS OUR HIGH LEVELS, UH, UH, FUNDS SUMMARY ON THE PRESENTATION, BUT, UH, YOU'VE GOT A MUCH MORE DETAILED FUND SUMMARY THAT SHOWS BOTH A COMBINED FOR ALL FUNDS, WATER WASTE, WATER RECLAIM, UM, AND THEN INDIVIDUAL FUNDS SUMMARIES FOR, FOR WA YOU KNOW, FOR EACH OF THE THREE WATER WASTE WATER AND RECLAIMED AND DEFEAT INCLUDE CDC, CDC.

UM, AND W WE'VE ALSO GOT AN ADDITIONAL FUND SUMMARY FOR THAT.

THAT'S NOT INCLUDED.

IT'S NOT PART OF OUR FORECASTS MENTAL NECESSARILY, UH, FOR THE COMMUNITY BENEFIT CHARGE FUND, BUT, UM, COMMISSIONER FISHER, TO ANSWER YOUR QUESTION EARLIER, IF YOU LOOK ON THE FIRST PAGE UNDER PROGRAM REQUIREMENTS ARE CONTINGENCIES INCLUDED IN THAT OTHER UTILITY PROGRAM REQUIREMENTS.

AND, UM, WELL IN THERE, THERE'S SOME OTHER THINGS IN THERE, BUT, UM, IT'S, IT'S PART, UH, THAT THAT'S WHERE IT ROLLS INTO.

AND AS YOU'RE LOOKING AT THIS PACKET, UM, THERE ARE, UH, TITLES ABOVE ON THE LEFT-HAND SIDE, THE FIRST PIECE OF THIS YOU'RE LOOKING AT A COMBINED FUND SUMMARY.

SO THAT TAKES INTO ACCOUNT ALL THREE FUNDS.

AND THEN RIGHT BEHIND THAT, YOU'LL SEE THE WATER FUND SUMMARY, THE WASTEWATER FUND SUMMARY, THE ACTUALLY A RECLAIMED THEN WASTEWATER FUND SUMMARY THAT HELPFUL, BUT MOST OF THE TRANSFER DETAILS IN THERE TOO.

AND, UH, IT'S IT'S FOR EACH OF THE, EACH OF THE FUND SUMMARIES, IT WILL HAVE A TRANSFER DETAIL TOWARDS THE END OF THE FUN SUMMER AND THAT CONCLUDES OUR PRESENTATION FOR ITEM TWO.

UM, IN THE, IN THE HANDOUT, WE DO HAVE A DEBT MANAGEMENT, UH, UPDATE, UH, WHICH IS, WHICH IS ITEM NUMBER THREE ON OUR AGENDA.

IT COULD HAVE BEEN WE, RIGHT, RIGHT.

SO LET ME CHANGE OVER TO THAT ONE.

DOES ANYBODY HAVE ANY QUESTIONS ON THE FORECAST THAT YOU'RE SEEING? OKAY.

[A.3. Debt Management ]

SEC, SO SINCE, SINCE ITEM NUMBER THREE IS POSTED AS A SEPARATE ITEM, WE WANT TO, WE NEED TO CALL ITEM NUMBER THREE.

SO I'LL MOVE ON TO DEBT MANAGEMENT EFFORTS.

I'M SURE YOU'VE SEEN THIS CHART BEFORE.

I SHOW IT PRETTY OFTEN TO Y'ALL IT'S OUR DEBT MANAGEMENT EFFORTS, AND IT SHOWS HOW, UM, THROUGH ALL OF OUR EFFORTS WE'VE SAVED MILLIONS OF DOLLARS.

AND SO WITH OUR UPDATED FORECAST IN HERE, UM, SINCE 20 S ONE

[01:00:01]

SORRY, SORRY.

UM, ALL RIGHT.

MOVING FORWARD TO ITEM A THREE, UH, DEBT MANAGEMENT.

SO THIS CHART SHOWS, UM, OUR SAVINGS COMPARED TO, UH, BACK IN, IN 2017.

IT ACTUALLY INCLUDES SOME SAVINGS FROM, UH, 2016 IN THE NUMBER THAT I'M GOING TO SHARE.

SO WE'VE SAVED IN, UH, EVEN FOR ACTUALS ALL THE WAY TO FORECAST TO 2027, AROUND $630 MILLION THROUGH OUR DEBT MANAGEMENT EFFORTS.

THAT INCLUDES DEBT, DEFEASANCE TRANSACTIONS, UH, REFUNDING OPPORTUNITIES THAT WE'VE HAD AND COMPLETED, UH, AS WELL AS, UM, TEXAS WATER DEVELOPMENT BOARD LOANS.

AND SO ALL OF THESE DEBT MANAGEMENT EFFORTS HAVE SAVED THE UTILITY, UM, $630 MILLION, WHICH IS VERY SIGNIFICANT.

AND ALSO THAT HAS REALLY HELPED US KEEP RATES, UM, AT A 0% RATE INCREASE FOR SO LONG IN, IN REALLY MANAGING, UH, OUR DEBT SERVICE.

IN ADDITION, WE DID, UM, RECEIVE THE GFR WAY AWARD, UH, THIS PAST YEAR, UH, FOR 2021 FOR ALL OF OUR DEBT MANAGEMENT EFFORTS.

SO WE WERE REALLY EXCITED ABOUT THAT, OH, GOVERNMENT, UM, FINANCE OFFICER'S ASSOCIATION.

I HAVE A QUICK QUESTION.

I HAVE TWO CHARTS THAT HAVE THE SAME TITLE, BUT DIFFERENT NUMBERS AND MY HANDOUT.

UM, OH, NO, THEY ARE DIFFERENT.

I THINK THE PRESENTATION RECENTLY UPDATED.

RIGHT? SO THE PRESENTATION PIECE, IF YOU LOOK AT THAT ONE, THAT'S THE MOST UP TO DATE WITH THE UPDATED FORECAST? APOLOGIES FOR THAT.

THE, THE, THE HANDOUT, UH, GOES THROUGH 26, THE FORECAST GOES THROUGH 27, SO WE DIDN'T CATCH THAT.

BUT THE, UM, SO WE NEEDED TO ADD THE EXTRA YEAR.

IN ADDITION, UM, THE, THE CHART WAS UPDATED TO REFLECT THE CURRENT YEAR ACTIVITY.

UH, WE HAD HAD, UM, YOU KNOW, $77 MILLION DEFEASANCE, UH, IN, IN DECEMBER AND, UM, AND $140 MILLION, UM, REFUNDING IN, IN NOVEMBER.

AND SO THE, THE CHART IN THE PRESENTATION, UM, REFLECTS THE IMPACTS OF, OF THOSE LAST TWO TRANSACTIONS.

UM, IT, IT'S IMPORTANT TO REMEMBER THAT, UM, YOU KNOW, ONE OF OUR KEY FINANCIAL METRICS IS, IS DEBT SERVICE COVERAGE, UM, AND, AND DEBT SERVICE COVERAGE IS SIMPLY WHEN YOU TAKE YOUR REVENUES AVAILABLE FOR DEBT SERVICE, YOU SUBTRACT OUT YOUR OPERATING REQUIREMENTS, AND THEN YOU TAKE THAT LEFTOVER AMOUNT AS A MULTIPLE OF YOUR ANNUAL DEBT SERVICE.

AND THEN ALSO IN THIS, UM, THE SLIDE THAT YOU'RE SEEING, UH, WE TOOK OFF, UH, 20, 26, 20 16 IN ORDER TO ADD 20, 27 INTO THE CHART.

QUICK QUESTION.

WHEN YOU SAID THAT WE'VE SAVED, UM, 630 MILLION, IS THAT FROM THE BEGINNING OF IMPACT FEES TO DATE, OR IS THAT PROJECTED? UM, WE USE THE IMPACT FEES FOR OUR DEBT DEFEASANCE TRANSACTIONS.

AND SO, UM, WHEN I BELIEVE IN 20 12, 20 14, YEAH, ABOUT 2014, THE 20, 20 14 IS WHEN THE, THE, UH, THE CHANGE WAS IMPLEMENTED, UH, TO, TO TAKE IMPACT FEES TO THE MAXIMUM AMOUNT ALLOWED BY MY STATE CALCULATION.

UM, BUT THAT THAT'S 630 MILLION, UM, BASICALLY IS THE DIFFERENCE BETWEEN, YOU KNOW, EVERY YEAR WE DO A FIVE-YEAR FORECAST.

AND SO IF WE LOOKED AT OUR 2016 FIVE-YEAR FORECAST AND WHERE WE THOUGHT WE WERE GOING TO BE BASED ON OUR SPENDING PLAN AND OUR DEBT SERVICE REQUIREMENTS THAT WERE DUE AT THAT TIME, UM, AND COMPARE IT TO WHERE WE ACTUALLY ENDED UP, UM, AND, AND WHERE WE'RE PROJECTING, BECAUSE SOME OF THE SAVINGS IS SPREAD OVER FUTURE YEARS, UH, THAT THAT 630, 30 MILLION REFLECTS THAT CUMULATIVE SAVINGS, UM, AS COMPARED TO THAT FYI 16 FIVE-YEAR FORECAST.

AND, YOU KNOW, I, I WOULD ALSO NOTE THAT, YOU KNOW, UM, A BIG REASON WHY WE, YOU KNOW, WE FOCUS SO HEAVILY ON OUR DEBT MANAGEMENT PLAN AND TRYING TO BRING DOWN OUR OVERALL, UH, LEVEL OF, OF DEBT SERVICE REQUIREMENTS.

UM, I THINK IN, IN THAT YEAR 2016, OUR DEBT SERVICE REQUIREMENTS WERE ABOUT $225 MILLION JUST FOR THAT ONE YEAR.

UM, AND SINCE THEN, WE'VE, YOU CAN SEE, WE BROUGHT THEM, SLOW YOU DOWN, YOU KNOW, BELOW 200 MILLION.

AND WE, YOU KNOW, WE TRY AND KEEP THEM IN THE 1 75 TO ONE 85 MILLION RANGE A YEAR, UH, WHICH IS MANAGEABLE AT OUR CURRENT LEVEL OF, UH, REVENUE RECOVERY.

UM, BUT,

[01:05:01]

UM, AND, AND RECALL THAT OUR CURRENT FINANCIAL POLICY IS UPDATED, UM, IS, IS 1.75.

SO AT THAT CURRENT DEBT SERVICE COVERAGE TARGET OF 1 75, HAD IT NOT BEEN FOR THESE EFFORTS, UH, WE WOULD HAVE HAD TO HAVE RECOVERED, UM, $1.1 BILLION OF ADDITIONAL REVENUE, UM, UH, OVER THE, OVER THAT TIMEFRAME, UM, JUST, JUST TO MAINTAIN, YOU KNOW, FINANCIAL POLICY LEVEL OF DEBT SERVICE COVERAGE.

UM, SO IT'S, IT'S BEEN, IT'S BEEN OBVIOUSLY KEY FOR US FROM A FINANCIAL, UM, YOU KNOW, A FINANCIAL CONDITION PERSPECTIVE AND A FINANCIAL PERFORMANCE PERSPECTIVE, BUT IT'S, YOU KNOW, IT'S THE ONLY, YOU KNOW, THE PRIMARY REASON THAT WE WERE ABLE TO REDUCE RATES IN 2018 AND NOT HAVE A RATE INCREASE, YOU KNOW, UNTIL, YOU KNOW, THE, THE FORECAST AND ONE IN 2024.

AND I'LL, I'LL ADD TO WHAT JOSEPH'S SAYING.

AND IN ADDITION TO, UM, THAT INFORMATION, JUST OUR TEXAS WATER DEVELOPMENT BOARD LOANS, I KNOW I DID PRESENTATIONS ON THAT TO YOU BEFORE.

UM, BUT JUST 20, 22 ALONE IN, UM, THOSE LOAN TRANSACTIONS OF 71.1 MILLION WE'VE SAVED THE UTILITY $13.3 MILLION IN INTEREST THAT WE WOULD HAVE HAD TO PAY IF WE WENT OUT AND DID OUR OWN BOND AND NOT GET THE LOAN THROUGH THE BOARD.

SO THAT'S A SIGNIFICANT SAVINGS.

UM, SO, UH, WE STILL HAVE SOME LOAN CLOSINGS LEFT, UM, FOR OUR CURRENT LOANS, BUT OUR PRESENT VALUE SAVINGS TODAY FOR TEXAS WATER DEVELOPMENT BOARD IS $34 MILLION.

QUESTION, THE BLUE TREND LINE AT THE TOP, UM, RIGHT IN THE MIDDLE THERE BETWEEN 20 19, 20, 20 TO 24 25 APPEARS TO BE A DASHED LINE TYPE.

IS THAT REPRESENT SOMETHING OR IS THAT JUST AN ANOMALY? UM, NO, THAT REPRESENTS THAT ACTUALLY SHOULD HAVE BEEN MOVED, UM, TO SHOW ACTUAL AS A STRAIGHT LINE AND THEN DRAW THE LINES OF FORECASTING.

I SEE, WE'LL GET THAT CORRECTED AND JUST, JUST TO TAKE A STEP BACK.

AND I THINK TINA EXPLAINED THAT, BUT THAT, THAT BLUE LINE AGAIN, REPRESENTS WHERE WE THOUGHT DEBT SERVICE REQUIREMENTS WERE GOING TO BE BASED ON THAT 26, 14 OR 2016, UH, FORECAST, UH, THE BLUE BARS REPRESENT OUR ACTUAL AMOUNT AND THE GREEN BARS REPRESENT THE SAVINGS AS COMPARED TO THAT 2016 FORECASTED LEVEL OF DEBT SERVICE REQUIREMENTS.

MOVING ON TO A, FOR FISCAL YEAR 20, 23 BUDGET SCHEDULE? ALL RIGHT.

ANY OTHER QUESTIONS

[A.4. Fiscal Year 2023 Budget Schedule ]

AND SO YOU SHOULD HAVE IN YOUR, IN YOUR HANDOUTS, A, A BUDGET CALENDAR.

UM, SO, UH, YOU KNOW, WHERE, WHERE WE ARE TODAY IS WHERE A COUPLE OF WEEKS OUT, UM, YOU KNOW, FROM, FROM THE MAY 6TH DEADLINE FOR ALL BUDGET DELIVERABLES, DELIVERABLES TO BE SUBMITTED, UH, TO THE CITY BUDGET OFFICE.

UM, AFTER, AFTER WE SUBMITTED THE BUDGET OFFICE, WE'LL KIND OF ROLL EVERYTHING TOGETHER, PRESENT IT TO CITY MANAGER'S OFFICE, THERE'LL BE CITY MANAGER REVIEW, UM, AND YOU KNOW, AND PART OF THAT PROCESS, WE'LL, WE'LL BE MAKING ANY, ANY MODIFICATIONS NECESSARY TO GET TO THE FINAL CITY MANAGER PROPOSED, UH, BUDGET, WHICH IS, UH, SCHEDULED TO BE PRESENTED TO CITY COUNCIL ON JULY 15TH, UH, RECALL THAT, UM, AND ACTUALLY, I'M NOT SURE IF YOU'RE, YOU'RE AWARE, UM, AT OUR LAST COMMISSION MEETING, WE TALKED ABOUT, UH, POTENTIALLY SHIFTING EITHER THE JULY, UH, WATER WASTEWATER COMMISSION MEETING, UM, A WEEK BACK OR THE AUGUST COMMISSION MEETING A WEEK FORWARD TO, TO BETTER ALIGN WITH, UM, THE PRESENTATION AND RELEASE OF, OF THE CITY MANAGER'S PROPOSED BUDGET.

UM, AND,

[01:10:01]

AND THEN ALLOW TIME FOR THE COMMISSION TO, TO MAKE A RECOMMENDATION ON OUR PROPOSED BUDGET, UH, IN ADVANCE OF THE AUGUST, UM, COUNCIL ADOPTION DATE.

UM, SO, SO THE BUDGET READINGS ARE SCHEDULED FOR, UM, AUGUST 17TH THROUGH 19TH.

UH, SO WE'RE GOING TO, UM, WE WERE ABLE TO WORK WITH CITY CLERK'S OFFICE, AND ACTUALLY, I THINK AUSTIN ENERGY ACTUALLY, UM, PLAYED A ROLE IN THIS, THEY, THEY, UH, ASKED US TO MOVE OUR JULY 13TH MEETING BECAUSE IT WAS GOING TO CONFLICT WITH SOMETHING THAT THEY HAD SCHEDULED.

SO WE'LL BE SHIFTING THE JULY 13TH WATER AND WASTEWATER COMMISSION MEETING TO JULY 20TH, WHICH AGAIN IS A COUPLE OF WEEKS IN ADVANCE OF, UM, COUNCIL BUDGET, ADOPTION.

ARE THERE ANY QUESTIONS ABOUT THE BUDGET CALENDAR OR SCHEDULE? UM, I DON'T, SO YOU'RE GOING TO HAVE A MORE REFINED BUDGET BY SIX, BUT YOU PROBABLY WON'T HAVE ANY NEW INFORMATION FOR US AT THAT POINT.

SO OUR NEXT MEETING IS MAY 25TH, MAY 26.

SO WE WILL, WE'LL SUBMIT OUR BUDGET, UM, MAY SIX AND THEN OUR NEXT MEETING, AS WE HAVE IN YEARS PAST, UM, YOU KNOW, THE, THE BUDGET WON'T BE FINALIZED UNTIL IT GOES THROUGH CITY MANAGER REVIEW, BUT WE WILL DO WHAT WE'VE DONE IN YEARS PAST.

AND WE'LL TALK ABOUT SPECIFIC CHANGES, UM, THAT, THAT WE'VE PROPOSED, UM, THAT DON'T GET TO THE LEVEL OF PROVIDING YOU OUR ENTIRE PROPOSAL BUDGET, UM, BEFORE COUNCIL SEES WELL BEFORE CITY MANAGER FINALIZES IT AND COUNCIL SEASON.

GOT IT.

SO I'D PROBABLY BE A LITTLE BRIEFER UNLESS THEY REALLY CHANGE THINGS UP ON YOU.

YEAH, WE DON'T.

I MEAN, LIKE I SAID EARLIER, WE WE'VE SEEN, UM, AS, AS WE HAVE GONE THROUGH OUR INTERNAL PROCESS, WE'VE SEEN SOME, SOME COST INCREASES, UM, THAT WE ANTICIPATE WILL BE PROGRAMMING IN TO OUR PROPOSED BUDGET.

UM, SO, SO THOSE ARE THE KINDS OF THINGS WE'LL BRING TO YOU.

UM, BUT WE DON'T ANTICIPATE, YOU KNOW, A TON OF SIGNIFICANT CHANGES FROM, FROM FORECAST TO OUR PROPOSED BUDGET AND THAT'S ON PURPOSE.

THAT'S WHY WE GO THROUGH THE PROCESS THAT SONG LEAD DESCRIBED, UM, WHERE, WHERE WE TRY AND, UM, GET ALL OF OUR PROGRAM AREAS AND OUR DIVISION MANAGERS TO GIVE US A SENSE OF WHAT THEY THINK THEY'RE GOING TO NEED IN THE BUDGET.

AND WE TRY AND INCLUDE AS MUCH OF THAT IN OUR FORECAST AS POSSIBLE.

SO THERE AREN'T VERY MANY CHANGES WHEN WE GET TO THE PROPOSED BUDGET.

ANY OTHER QUESTIONS? UH, LAST FISCAL YEAR WAS DAVE.

ANDREW'S STILL WITH US TAKING US THROUGH THE BUDGET PROCESS.

DAVID RETIRED IN MARCH.

AND SO I, I WAS HERE, UH, FOR, FOR LAST FISCAL YEAR.

AND THE REASON I ASKED, WE'VE GOT AN INTERIM DIRECTOR GOING THROUGH THE PROCESS THIS YEAR.

SO THANKFULLY JOSEPH, YOU AND YOUR TEAM ARE HERE TO LEAD US THROUGH THAT EFFORT LAST YEAR.

UH, AND I THINK INTERIM DIRECTOR, GOOD.

YOU PROBABLY WON'T HAVE A PERMANENT REPLACEMENT, PERMANENT DIRECTOR OF PLACEMENT BEFORE THIS BUDGET IS FINALIZED.

I WOULDN'T EXPECT, SO I THINK, UM, HE, UH, UH, DIRECTOR GOOD IS EXPECTING TO BE INTERIM FOR, FOR, YOU KNOW, AT LEAST SIX TO EIGHT MONTHS OR SO.

UM, AND, AND SO THAT KNOW, THAT WOULD PUT US THROUGH THROUGH OCTOBER, THE BUDGET IS SCHEDULED TO BE AT ADOPTED, AS I SAID, UM, MID AUGUST.

MOVING ON TO ITEM A FIVE BUDGET COMMITTEE INPUT RECOMMENDATIONS.

THANK YOU.

ANY OTHER QUESTIONS? UH,

[A.5. Budget Committee Input/Recommendations ]

SO AS I SAID AT THE OUTSET, UM, YOU KNOW, WANTING TO PROVIDE YOU GUYS AN OPPORTUNITY TO, TO MAKE RECOMMENDATIONS IN OUR BUDGET, UM, YOU KNOW, IF THERE'S THINGS THAT, THAT WE HAVE CONTROL OVER THAT, THAT, UM, YOU KNOW, WE THINK WE CAN, WE CAN IMPLEMENT AND INCLUDE IN OUR BUDGET.

UM, YOU KNOW, THE SOONER WE GET THAT, YOU KNOW, THE SOONER WE CAN, UM, WE CAN INCORPORATE IT, UM, YOU KNOW, IN TERMS OF THINGS THAT ARE DONE MORE AT A CORPORATE LEVEL AT A CITY-WIDE LEVEL, UM, YOU KNOW, I

[01:15:01]

THINK WE CAN INCLUDE THOSE.

YOU, YOU GUYS GENERALLY DO, UM, YOU KNOW, UH, AN EXECUTIVE OR COMMISSION SUMMARY, UM, THAT GOES AS PART OF YOUR RECOMMENDATION.

AND, AND SO IF THERE'S THINGS THAT ARE MORE CITY-WIDE, WE CAN, WE CAN INCLUDE THEM THERE.

UM, BUT, UH, YOU KNOW, IF, AGAIN, IF, IF, IF THERE'S ANY RECOMMENDATIONS THAT YOU HAVE FROM, FROM YOUR PERSPECTIVE THAT YOU WOULD LIKE TO SEE US TRY AND INCORPORATE IN OUR BUDGET, UM, YOU KNOW, I, I, I THINK, YOU KNOW, IF WE COULD GET THAT AND, YOU KNOW, BY PROBABLY BY THE END OF NEXT WEEK WOULD BE PROBABLY THE LATEST THAT, THAT WE COULD TRY AND INCORPORATE SOMETHING WITHIN OUR BUDGET.

UM, I DEFINITELY THINK ALL FOUR OF US SHOULD THINK REAL HARD ON THAT.

UM, ONE OF THE THINGS I DID BRING UP LIKE THE BUDGET OFFICE GIVES YOU YOUR GUIDELINES ON SALARY INCREASES AND FUEL.

AND IF YOU DON'T THINK IT'S REALISTIC, ARE YOU ALLOWED TO INCREASE IT AND SEE WHAT THEY DO WITH IT? OR DO YOU HAVE TO FOLLOW THEIR RECOMMENDATION? WELL, THINK THINGS LIKE A MARKET STUDY OR ONE WAY THAT, YOU KNOW, AND PARTICULARLY FOR AUSTIN WATER SPECIFIC TITLES, UM, YOU KNOW, IF GOING, GOING OUT AND GETTING AN EXTERNAL MARKET STUDY IS ONE WAY WHERE, WHERE WE CAN, UM, IMPACT, YOU KNOW, SALARIES FOR EMPLOYEES, UM, YOU KNOW, WHERE, WHERE THEY'RE NOT AT MARKET, BUT, UM, YOU KNOW, FROM A CITYWIDE WAGE INCREASE, UH, YOU KNOW, WE'RE, WE'RE AS AN ORGANIZATION, THE CITY HAS KIND OF HELD TO WHAT, UM, WHAT THE GENERAL FUND CAN AFFORD.

UM, SO, UM, WE'RE NOT ABLE AS AN INDIVIDUAL DEPARTMENT TO, TO HAVE WAGE INCREASES THAT THAT AREN'T REALLY DONE AT A CITY-WIDE LEVEL, UNLESS THEY'RE TIED TO SOME KIND OF MARKET STUDY.

UM, I THINK THAT MIGHT BE WARRANTED, UM, TALK TO YOU GUYS ABOUT IT, BUT THERE'S A LOT OF SPECIALIZED POSITIONS WITHIN THE UTILITY.

IT'S NOT JUST EVEN THE OPERATIONS FOLKS.

I MEAN, IT'S, YOU GOT TO KNOW WHAT YOU'RE DOING, ARE YOU GOING TO GET HURT? RIGHT.

AND, AND AS PART OF THAT MARKET STUDY, YOU KNOW, I THINK WE, WE FOUND, UM, I MEAN, OUR OPERATORS, YOU KNOW, ON AVERAGE ARE MAKING LESS THAN, THAN FOLKS AT CITY OF CEDAR PARK.

UM, W WHICH IS, IS A GREAT ORGANIZATION.

I USED TO WORK THERE.

UH, BUT, UM, YOU KNOW, W WE'RE, WE'RE NOT AS COMPETITIVE AS WE NEED TO BE.

UM, AND, AND HOPEFULLY THE MARKET STUDY WILL HELP US GET THERE.

WE'RE ALSO LOOKING AT IT, YOU KNOW, OTHER THINGS THAT WE CAN DO TO, YOU KNOW, UH, TO IMPROVE RETENTION, WHETHER THAT'S RETENTION BONUSES OR SIGN-ON BONUSES, UM, YOU KNOW, ALL OF THOSE THINGS, AND THOSE THINGS ARE INCLUDED IN OUR FORECAST.

UM, BUT THOSE ARE THINGS THAT WE'RE CONTINUING TO WORK WITH.

UM, YOU KNOW, CENTRAL HR, HUMAN RESOURCES DEPARTMENT, UH, TO, TO REALLY MAKE SURE THAT WE'RE USING ALL THE TOOLS THAT WE CAN TO MAKE SURE OUR EMPLOYEES ARE, ARE PAID, YOU KNOW, MARKET RATES AND, UM, SO THAT WE CAN KEEP THEM AND, UM, AND HOPEFULLY REDUCE THAT TURNOVER THAT WE'VE SEEN.

UH, A LOT OF PEOPLE DON'T KEEP THEIR JOB BECAUSE I WANT YOU TO GET PAID.

THEY KEEP IT, CAUSE THEY'RE, THEY'RE HAPPY THERE, BUT THAT MEANS YOU NEED GOOD LEADERSHIP AND A GOOD STRONG ORGANIZATION, AND THAT COSTS MONEY.

ANYTHING ELSE COME TO MIND? I HAVE A QUESTION, NOT NECESSARILY A RECOMMENDATION, UM, AND IT'S HARD FOR ME.

UH, IT'S HARD FOR ME TO REMEMBER, UM, LAST YEAR'S BUDGET PROCESS, BUT, UM, YOU KNOW, WE'VE BEEN FIGHTING ZEBRA MUSSELS, AND I KNOW WE, WE HAD SOME EXPENDITURES TO SELL SOME CHEMICAL FEED SYSTEMS THAT, UH, SOME OF THE TREATMENT FACILITIES, UH, I WOULD ASSUME, UH, THOSE COSTS ARE ALL FULLY EMBEDDED IN OUR PROPOSED BUDGET.

OKAY, WELL THAT, THAT'S ANOTHER AREA OF THE BUDGET AND OUR, OUR, OUR OWN M BUDGET, UM, AND OUR CAPITAL BUDGET OR OUR BOTH TO MAY SIX.

AND SO, UM, BUT AS PART OF OUR FORECAST, WE DON'T PR WE DON'T PROVIDE A, UM, UH, A D ANY KIND OF ESTIMATE IN TERMS OF OUR, OUR, OUR CAPITAL SPENDING BUDGET.

UM, SO WE HAVEN'T GIVEN ANY OF THAT TO YOU TODAY.

UM, WE, WE CAN START LOOKING AT, YOU KNOW, WITH THE NEXT MEETING, UM, YOU KNOW, SOME OF OUR SIGNIFICANT PROJECTS, I KNOW THERE ARE, UH, PROJECTS TO, TO

[01:20:01]

ADDRESS, YOU KNOW, A NUMBER OF THINGS, YOU KNOW, RESILIENCY EFFORTS, ELECTRICAL SYSTEMS, UM, YOU KNOW, OUR, OUR, UH, PIPELINE SYSTEMS, ZEBRA MUSSELS POLYMERS SYSTEM, THERE, THERE ARE A LOT OF PROJECTS GOING ON AND WE'LL BE ABLE TO START DRILLING INTO SOME OF THOSE SIGNIFICANT PROJECTS WITH, WITH OUR NEXT MEETING.

SOUNDS GOOD.

JUST ONE, GOING BACK TO THE RECOMMENDATIONS AND INPUT.

ONE THING THAT I'VE BEEN WRESTLING WITH IN MY MIND IS I KNOW FROM A RETIREMENT STANDPOINT, FOLKS RETIRE, BUT YOU'RE REPLACING THEM.

SO YOU'RE NOT COUNTING THEM AS NEW FTES.

HOWEVER, THERE IS SOME BIT YOU'RE KIND OF COMPETING WITH YOURSELF.

YOU'RE, YOU'RE BRINGING ON SOMEBODY NEW, BUT YOU'RE REPLACING RETIREMENT.

AND THAT JUST KIND OF DRIVES YOUR RECRUITING COSTS AND THEN POTENTIALLY TEMPORARY EMPLOYEES THAT HAVE TO FILL THE GAPS.

AND ALL OF THAT'S GOING TO BE MORE EXPENSIVE THAN IT HAS BEEN IN THE PAST, AND PROBABLY GOING TO, TO A WHOLE DIFFERENT LEVEL, BUT THAT'S JUST SOMETHING I'M THINKING ABOUT.

AND I'M GUESSING BY YOU SHAKING YOUR HEAD UP.

SOUNDS LIKE YOU'VE ALREADY BEEN THINKING ABOUT THESE THINGS AND YOU'RE, AS YOU LOOK AT THIS BUDGET.

DEFICIENCY AT THE END OF 2021, THAT THE CASE, WAS IT STANDING ON ITS OWN TWO FEET, I GUESS THERE'S SUBSIDIES IN THERE THAT I DON'T KNOW ABOUT, OR THERE, THERE ARE SUBSIDIES IN THERE.

YOU KNOW, IN SOME CASES WHERE WE'RE ABLE TO, UM, YOU KNOW, W WHEN PEOPLE RETIRE, SOMETIMES THEY'RE NOT READY TO FULLY RETIRE AND WHERE IT MAKES SENSE.

WE HAVE THE ABILITY TO BRING THEM BACK PART-TIME SO THAT WE CAN TRY AND BRIDGE THAT GAP.

UH, RIGHT.

YOU KNOW, IF SOMEBODY RETIRES WITH, WITH 30 YEARS OF EXPERIENCE AND YOU'RE REPLACING THEM WITH, YOU KNOW, A NEW OPERATOR WHO DOESN'T HAVE NEAR THAT, THAT MUCH EXPERIENCE, YOU KNOW, UH, THERE'S, THERE'S A LOT OF TRAINING.

AND SO WE, YOU KNOW, THAT'S ONE OF THE WAYS THAT WE USE, UH, YOUR RETIREES AND TEMPORARY POSITIONS.

UM, BUT, YOU KNOW, WE'RE STRUGGLING, YOU KNOW, EVEN FOR TEMPORARIES TO FILL POSITIONS, YOU KNOW, WHERE, UM, YOU KNOW, BECAUSE THOSE POSITIONS DON'T HAVE BENEFITS.

SO UNLESS IT'S A RETIREE, UM, WHO WHO'S GOT BENEFITS, IT'S, UM, IT'S HARD TO FILL EVEN TEMPORARY POSITIONS.

UH, WHEN DO YOU NEED OUR INPUT ON RECOMMENDATIONS BY, UM, ANYTHING YOU COULD GET US BY THE END OF NEXT WEEK WOULD GIVE US TIME TO TRY AND SEE IF IT MAKES SENSE TO, TO GET INTO THE BUDGET.

UM, IF, IF THERE'S, IF WE DON'T GET ANY, YOU KNOW, IF THERE'S OTHER THINGS THAT YOU'RE THINKING OF THAT WE DON'T GET BY THAT TIME, I WOULD JUST SAY LET'S INCLUDE IT IN, UM, IN THE WRITEUP THAT WE, WE ALWAYS DO, UM, RIGHT IN THE RECOMMENDATION TO COUNCIL.

UM, BUT IT WOULD, YOU KNOW, WE WOULD, UH, MISS THE ABILITY UNLESS IT'S LIKE, UM, YOU KNOW, SOME, SOME, YOU KNOW, WE, WE GET IN, WE'RE LIKE, I DON'T KNOW WHY WE DIDN'T THINK OF THAT.

UM, WE DO HAVE LIMITED ABILITY TO, AFTER WE SUBMIT OUR BUDGET TO, TO MAKE, YOU KNOW, A MODIFICATION, BUT IT WOULD HAVE TO BE SOMETHING FAIRLY SIGNIFICANT JUST TO MAKE SURE I'M CLEAR THAT MARKET STUDY IS GOING TO BE COMPLETED.

WOULD THAT AMENDMENT, THE MARKET STUDY, THE PROCESS, THE WORK PROCESS IS COMPLETE.

UM, WE HAD STARTED, UM, DISCUSSIONS WITH HUMAN RESOURCES DEPARTMENT, UH, TO SEE HOW, HOW WE COULD IMPLEMENT THAT.

UM, OUR HOPE IS THAT WE CAN GET YOU, UM, A LOT OF, YOU KNOW, PARTICULARLY THOSE, YOU KNOW, KEY CRITICAL OPERATIONS POSITIONS, UH, THOSE POSITIONS THAT ARE HARD TO FILL THOSE POSITIONS THAT ARE AUSTIN WATER SPECIFIC, THAT WOULDN'T IMPACT OTHER DEPARTMENTS.

UH, OUR HOPE IS THAT WE COULD GET, UM, A LOT OF THAT IMPLEMENTED BEFORE, UH, THE END OF THE CURRENT FISCAL YEAR.

UM, SO IT WOULDN'T NECESSARILY BE A PART OF OUR PROPOSED BUDGET PROCESS, BUT IT WOULD, UM, IT WOULD PROBABLY HAVE TO BE RECOGNIZED AS, YOU KNOW, OUR, OUR BASE BUDGET IS BEING UPDATED.

AND AS A RESULT, YOU KNOW, WE WOULD TAKE, YOU KNOW, OUR PROPOSED BUDGET AND MAKE THAT SAME OF CORRESPONDING UPDATE, UM, YOU KNOW, AS PART OF THE ADOPTION PROCESS, SO WE CAN MAKE RECOMMENDATIONS.

DID THEY TAKE THAT INTO ACCOUNT? ABSOLUTELY.

WHICH WE WILL, I'LL GIVE YOU THAT ONE.

UM, ANOTHER ONE THAT COMES TO MIND IN THE PAST, AND I JUST KIND OF PEEKED AT IT.

UM, OUR RECLAIMED WATER, YOU KNOW, IT'S A NEW TYPE OF UTILITY.

IT'S, IT'S A LITTLE DIFFERENT THAN, THAN, UH, THE COMMODITY OF WATER AND WASTEWATER.

UH, IT'S NOT NECESSARILY AS NECESSARY.

AND SO HOW IS IT FAIRING? IS IT PROFITABLE OR IS IT STILL, TO ME, IT LOOKS LIKE IT IS EXCEPT FOR A SMALL

[01:25:02]

UM, SO THERE'S TRANSFERS IN FROM AUSTIN WATER UTILITY, UM, TO, TO THE TUNE, UH, FOR CURRENT YEAR FIVE AND A HALF MILLION.

UM, AND FOR THE FORECAST PERIOD, WE'RE ASSUMING LIKE SIX, 6 MILLION, 250,000 FOR 23 AND THEN SIX AND A HALF MILLION GOING FORWARD.

UM, SO WE, WE CONSIDER THE, THE RECLAIM SIS SYSTEM, OBVIOUSLY AN EXTENSION OF THE WATER UTILITY.

IT EXTENDS OUR POTABLE WATER SUPPLY.

UM, AND, AND SO, UH, THAT TRANSFER AND REP REPRESENTS A SUBSIDY FROM THE WATER, UH, YOU KNOW, FROM THE WATER OPERATING FUND, UM, BECAUSE IT'S A RELATIVELY NEW SYSTEM THAT WE'RE, WE'RE GROWING A DEBT SERVICE, UH, FOR, FOR THE UTILITY, YOU CAN SEE WE'LL BE GROWING, UM, YOU KNOW, TWO ABOVE A 6 MILLION IN FY 24 TO 8.4 MILLION, UH, IN, IN FYI 27.

SO ABSENT, UH, YOU KIND OF A SIGNIFICANT INCREASE IN, YOU KNOW, BOTH, UH, REVENUES, UM, WHETHER IT'S ASSOCIATED WITH RATE INCREASES OR, OR, OR NEW CUSTOMERS, UM, WE WILL LIKELY NEED TO INCREASE THAT LEVEL OF SUBSIDY.

UM, BUT ONE OF THE THINGS THAT WE ARE LOOKING AT DOING, UM, IN TERMS OF OUR NEXT IMPACT FEE, UH, UPDATE, UM, IS TO INCORPORATE RECLAIM PROJECTS INTO OUR IN CAP IMPACT FEE STUDY, SO THAT WE CAN USE IMPACT FEE DOLLARS TO, TO DEFEASE DEBT AND, AND MAKE THAT LEVEL OF DEBT SERVICE MORE MANAGEABLE.

UM, YOU KNOW, THERE, THERE WAS A TIME WHERE WE, YOU KNOW, WE FELT LIKE, YOU KNOW, IT, IT, UM, WELL, IT DOES MAKE SENSE TO SEPARATE THE RECLAIM SO WE CAN BETTER TRACK THE ACTIVITIES, BUT IN DOING SO, BECAUSE IT'S A NEW SYSTEM AND THE REVENUES AREN'T THERE.

UM, YOU KNOW, WE DIDN'T, WE HAVEN'T HISTORICALLY, UM, SINCE THAT CHANGED, SINCE THE SPLIT OUT OF THE RECLAIM SYSTEM WAS MADE, WE, WE HAVEN'T INCLUDED THEM IN, IN THE IMPACT FEE, YOU KNOW, CAPITAL PROJECTS.

AND, AND SO THAT'LL, THAT'LL IMPROVE OUR ABILITY TO, TO BETTER MANAGE THAT LEVEL OF DEBT SERVICE.

AND THEN THIS IS, I SHOULD KNOW THE ANSWER TO THIS QUESTION.

UM, IS THERE A GOAL FOR AUSTIN WATER TO HAVE X PERCENT OF THE WATER RECLAIMED BY A CERTAIN YEAR, KINDA LIKE WE HAVE FOR AUSTIN ENERGY, YOU'D BE, UM, YOU KNOW, A HUNDRED PERCENT RENEWABLE BY THERE IS, UM, IN, IN THE WATER PLAN, THERE ARE GOALS TO INCREASE.

UM, AND I'M NOT SURE THAT IT'S NECESSARILY PERCENTAGE WISE PERCENTAGE OF OUR TOTAL, UH, WATER CONSUMPTION, BUT, UM, THERE IS, YOU KNOW, I FORGET WHAT THE I'LL NEED TO LOOK BACK, BUT THERE'S A MILLION GAL THERE.

ACTUALLY, I THINK EVERYTHING IN WATERFORD IS AN ACRE FEET, BUT, UH, BUT THERE, THERE ARE GOALS TO CONTINUE TO INCREASE THE, UH, RECLAIMED, UM, YOU KNOW, CONSUMPTION AND, AND, UM, I JUST DON'T HAVE THOSE NUMBERS.

I BET THAT'S OKAY.

I THINK IT'S GOOD.

WE'RE TRACKING IT SEPARATELY.

WE NEED TO KNOW WHAT COSTS, WHAT, AND IT'S MORE TRANSPARENT IN MY OPINION WHEN IT SEPARATE.

AND ALSO TO ADD TO WHAT JUSTIN JUST SAID.

UM, IF YOU LOOK AT THE RECLAIM FUND, YOU CAN SEE THAT THE REVENUE ACTUALLY WILL COVER IT'S A PROGRAM REQUIREMENTS.

SO IT'S A DAY TO DAY OPERATIONS, AND THEY ALSO HAS ITS OWN SHARES OF TRANSFER OUT LIKE GENERAL FUND TRANSFER AND THE CITY WIDE TRANSFERS.

UH, WHAT'S WHAT, WHAT IT NEEDS TO HELP COVER IS WHAT JUST PERMISSION THEIR SERVICE, AS WELL AS THE TRANSFER FROM OPERATING FUND TO THE CIP FUND TO CASH FUND, TO THE CIP PROJECTS.

SO THAT'S WHY IT NEEDS HELP.

SO IT'LL BE GOOD TO SEE THE IMPACT FEE ADJUSTED TO.

THE DEBT YOU GENERALLY, WHEN WE ISSUE A REVENUE BOND, THE FIRST THREE YEARS ARE KIND OF INTEREST ONLY PAYMENTS.

AND, AND SO, YOU KNOW, SO THERE'S THE DEBT SERVICE FOR THE RECLAIM FUND BECAUSE IT'S A NEWER SYSTEM RIGHT NOW IS KIND OF IN A GROWING TREND, UM, DEBT SERVICES INCREASING AS, AS A, AS WE FUND NEW PROJECTS.

BUT ALSO, UM, AS, UM, YOU KNOW, AS

[01:30:01]

AND THEN SO YEAR FOUR, YOU START TO GET PRINCIPAL AND INTEREST PAYMENTS.

SO, YOU KNOW, AS, AS WE GET TO YEAR FOUR ON DEBT THAT WAS ISSUED, YOU KNOW, FOUR YEARS AGO, YOU'RE ADDING PRINCIPAL.

AND SO RIGHT NOW IT'S IN A GROWING TREND, UM, AS IT, AS IT LEVELS OFF.

AND AS WE'RE ABLE TO USE CAPITAL RECOVERY FEES TO DEFEASE DEBT, WE'LL, WE'LL BE ABLE TO LEVEL OFF DEBT SERVICE AND, AND, AND TRY AND KEEP IT A LITTLE MORE MANAGEABLE.

UNDERSTOOD.

I'LL ADD ONE MORE THING TO WHAT JOSEPH SAID.

WE ALSO LOOK AT REFUND OPPORTUNITIES WHERE WE CAN HAVE SOME SAVINGS THERE, SO RECLAIMED AS PART OF THAT.

MOVING TO ITEM B ONE FUTURE COMMITTEE MEETING SCHEDULE.

ANYBODY ELSE HAVE ANY QUESTIONS ABOUT ITEM 5, 8, 5, ALL RIGHT.

[B.1. Future Committee Meeting Schedule ]

WE HAVE THAT IN FRONT OF US.

UH, OUR NEXT MEETING IS MAY 26TH.

UH, AND THEN WE HAVE ANOTHER ONE ON THE BOOKS FOR THE 22ND OF JUNE, UH, HISTORICALLY, UNLESS THERE'S SOME REALLY BIG CHANGES FROM WHAT WE'VE BEEN PRESENTED HERE AND WHAT WE'RE GOING TO SEE IN MAY, WE TYPICALLY DON'T HAVE THAT THIRD MEETING, UM, UNLESS THERE'S SOME SORT OF EMERGENCY OR SOMETHING REALLY DIFFERENT GOING ON.

THAT'S CORRECT.

UM, I THINK, YOU KNOW, WE HAVE USED THAT, THAT THIRD MEETING, UM, TO, TO, YOU KNOW, HELP DRAFT THE, UM, THE RECOMMENDATION, BUT WE'VE ALSO DONE THAT MORE OFFLINE.

AND SO IF THERE'S, YOU KNOW, IF, IF, IF IT'S, UH, MORE EFFICIENT TO, TO GET TOGETHER IN A ROOM AND TRY AND KNOCK IT OUT, WE'RE, WE'RE MORE THAN HAPPY TO DO THAT.

IF YOU GUYS FEEL LIKE IT'S MORE EFFICIENT TO DO, UH, VIA CIRCULATING, YOU KNOW, WE'RE, WE'RE, WE'RE HAPPY TO DO THAT AS WELL.

I'D LIKE SOME INFORMATION ABOUT THE AWARD YOU GUYS RECEIVED.

AND YOUR CURRENT BOND RATING.

I WOULD LIKE TO PUT THAT IN THERE, WHETHER IT'S GOOD OR BAD.

UM, AND THEN WE PRESENT THAT TO THE COMMISSION FOR ADOPTION OR APPROVAL.

UM, SHOULD WE GET THAT IN THE JULY MEETING OR DOES THAT, DO WE, I WOULD ASSUME YOU NEED TO GET IN THE JULY MEETING OR WOULD WE NEED TO GET IT IN THE JUNE MEETING? NO, THE JULY MEETING, UH, WE, WE W IN JULY WE'LL DO THE BUDGET PRESENTATION, AND THAT IS THE MEETING, UH, WHEN WE NORMALLY, UH, WOULD SEEK THE RECOMMENDATION FROM, FROM THE FULL COMMISSION.

AND THEN THE COUNCIL MAY HAVE ALREADY SEEN THE BUDGET, BUT THE READINGS HAVEN'T TAKEN PLACE SHEDS, SO THAT THE OPINION MATTERS, I GUESS IT'S TOO MUCH OF A FACTOR.

IT JUST FEELS OFF.

AND THEY HAVE, UM, BUDGET WORK SESSIONS THAT, THAT START JULY 27TH.

SO, UM, SO THAT MEETING WILL TAKE PLACE EVEN BEFORE THE FIRST, UH, UH, BUDGET INPUT AND BUDGET WORKSHOP MEETING.

UM, ANOTHER, UM, I GO AHEAD AND JESSE, YES, ANNA, I'VE GOT A CONFLICT ON THE MAY 26TH MEETING.

OH.

AND I KNOW THERE WAS SO MUCH EFFORT TO FIND A DATE, BUT, UM, AND I WOULDN'T EVEN BE AVAILABLE REMOTELY.

SO I DON'T KNOW IF YOU COULD STILL MOVE FORWARD WITH THREE AND I COULD GIVE YOU FEEDBACK SEPARATELY, BUT IT WOULD THEN BE IMPORTANT THAT ALL THREE OF THESE FOLKS ARE BECAUSE WE NEED THREE AS COMMISSIONER WILLIAMS, CHRISTIE.

MY UNDERSTANDING IS THAT SHE, UM, AND CORRECT ME IF I'M WRONG, BLANCA, BUT, UM, IS THAT SHE DECIDED THAT SHE WASN'T GOING TO BE ABLE TO PARTICIPATE THREE IT'S CAN THE REST OF YOU? UM, YEAH, I'VE GOT THE 26 ON MY CALENDAR.

ARE YOU TOO GOOD? OKAY.

UM, I THINK WE'LL LEAVE IT JUST BECAUSE IT'S SO HARD TO RESERVE THIS ROOM.

AND APOLOGIES AS OVERSIGHT.

IT'S UH, I HOPE YOU'RE DOING SOMETHING FUN.

UM, OKAY.

UH, ANY OTHER, UH, FUTURE AGENDA ITEMS OR ANYTHING ABOUT THE MEETING? I GUESS WE'RE ON,

[C. FUTURE AGENDA ITEMS ]

UM, I MENTIONED ZEBRA MUSSELS EARLIER.

MOVING TO ITEM C ANY FUTURE AGENDA ITEMS. UM, I DON'T HAVE ANYTHING THAT COMES TO MIND MICROPHONE.

UM, I ALWAYS FIND IT HELPFUL TO HAVE A, UH, DISCUSSION OF CIP PROJECT SPENDING.

[01:35:01]

I DON'T NECESSARILY NEED A DISCUSSION OF THAT AT THE NEXT MEETING, BUT, UM, IT HAD SOMETHING IN MIND.

WELL, IF IT COMES BACK TO ME, I'LL LET YOU KNOW.

AND I'LL ADD ON CIP.

I DON'T KNOW IF YOU RECALL, BUT LAST YEAR BUDGET OFFICE CHANGED WHEN WE DELIVER CIP.

SO YOU USE TO SEE IT BEFORE YOU USED TO SEE IT WITH THE FORECAST.

HOWEVER, NOW THEY CHANGED THAT DELIVERABLE TO BE WITH THE BUDGET.

AND THIS IS WHY YOU'RE NOT SEEING A LISTING OF CIP LIKE YOU USED TO BEFORE, IF THAT MAKES SENSE, BUT YOU'RE GOING TO BRING THE BIG SUMMARY OF THE BIG STUFF.

WE'LL DEFINITELY CREATE A SUMMARY FOR YOU AND, UM, OF ALL THOSE SIGNIFICANT PROJECTS.

AND YOU'LL FIND THAT SOME OF THOSE ARE PROBABLY, UM, HAVE ALREADY BEEN IN THE PREVIOUS BUDGET OR THE FIVE-YEAR FORECAST, I SHOULD SAY.

AND SO WE'LL JUST HIGHLIGHT THOSE AGAIN, JUST TO LET YOU KNOW ANYTHING THAT'S STILL, UM, THAT'S ON THERE THAT'S SIGNIFICANT AND ANYTHING NEW THAT WAS ADDED TO THE PLAN THAT SIGNIFICANT.

I DID THINK OF IT.

UM, WE TALKED ABOUT CHEMICALS EARLIER, INCREASING IN COSTS.

I'M VERY AWARE OF, UH, COST OF CORING GOING UP, BUT CERTAINLY THERE ARE OTHER CHEMICALS NEEDED IN THE VARIOUS PROCESSES.

SO I'D LOVE JUST, WE DON'T HAVE TO SPEND A LOT OF TIME ON IT, BUT I WOULD LIKE TO KNOW ASIDE FROM CHLORINE, WHAT ELSE IS REALLY TRENDING UPWARD THAT, UH, THAT WE'RE NEEDING, UH, THE OTHER ITEM WE TALKED ABOUT BRINGING, UH, CONTRACT SERVICES IN-HOUSE AND YOU MENTIONED SECURITY, WOULD THERE OTHER SERVICES OR OTHER, UM, TASKS THAT WE WERE CONTRACTING OUT THAT WERE BRINGING IN-HOUSE NOT YET, UM, SOME OF THE COUNCIL DISCUSSION? WELL, ACTUALLY THE COUNCIL DISCUSSION IS KIND OF FOCUSED ON, UH, REALLY FOUR AREAS, UM, SECURITY, UH, CUSTODIAL, THREE AREAS, I GUESS, UH, SECURITY, CUSTODIAL, UM, AND, AND A CUSTOMER SERVICE, UH, A, YOU KNOW, CALL CENTER TYPE EMPLOYEES, UM, CAUSE THAT THAT'S ALL OF THEM.