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[00:00:01]

WAS THAT

[CALL TO ORDER]

A SPECIAL MEETING OF THE WATER AND WASTEWATER.

OKAY.

THERE'S NO POVERTY COMMUNICATION.

SO WE WILL MOVE TO ITEM.

[APPROVAL OF MINUTES]

NUMBER ONE APPROVAL FROM THE JUNE COMMISSIONERS.

YOU GOT A CHANCE TO LOOK AT MINUTES.

WE WILL ENTERTAIN MOTION, MOTION MADE BY ALL IN FAVOR.

PLEASE RAISE YOUR HAND.

COMMISSIONER WILLIAMS AND THE COMMISSION BE CHERYL BOLT FOR YEARS.

THANK YOU.

NOW LET'S MOVE TO

[DISCUSSION AND POSSIBLE ACTION ON RECOMMENDATIONS TO COUNCIL]

DISCUSSION FROM TWO TO 14 AND THE REASON FOR YOUR REVIEW.

SO THAT WAS WHAT STARTED WITH COMMISSIONER MICHELLE.

THANK YOU, COMMISSIONER WILLIAMS. THANK YOU.

COMMISSIONER PAIN.

I HAVE NO QUESTIONS.

RECUSALS ON ITEM SEVEN AND ADD ON ITEM SEVEN.

MY COMPANY IS ONE OF THE PRIME FIRMS INCLUDED ON THIS ITEM ITEM ON ITEM 80.

MY COMPANY IS A SUB CONSULTANT ON THE TEAM INCLUDED IN THIS ITEM.

THANK YOU.

NICE CHILL, CASSELBERRY.

NOPE, COMMISSIONER I HAVE NO REFUSALS, BUT I HAVE 6, 8, 10 COMMISSIONAL FISHER.

NO QUESTIONS.

THANK YOU.

SORT OF CONSENTING ITEMS ARE, OH, I'M SORRY.

I NEEDED TO READ CUES.

UM, ITEM THREE, SINCE WE ARE DESIGNING FOR ANOTHER CITY PROJECT, NOT THAT THE CONTRACTOR IS WALKING UP.

AND THEN I HAVE QUESTION, UM, ITEM NUMBERS, SIX SORTA CONSENTED ITEMS ARE 2, 4, 5, 9, 11, 12, 13, 14.

LET ME REPEAT IT.

ITEM 2, 4, 5, 9, 12 30.

OKAY.

AND 14 YEARS WE WOULDN'T PULL IT OUT FOR DISCUSSION BECAUSE THAT HAS RELATED TO

[00:05:01]

BUDGET EITHER.

SO ONE MORE TIME.

THE CONSENT ITEMS, 2, 4, 5, 9, 11, 12, AND 13 MOTION TO APPROVE MOTION MADE BY MY CHAIR.

CASTLEBERRY.

SECOND, SECOND BY COMMISSIONER.

ALL IN FAVOR.

PLEASE RAISE YOUR HAND SHOW IN PRISON AND THE COMMISSIONER WILLIAMS AND TRAVERSE MICHELLE.

OH FOUR.

THANK YOU.

S

[3. Recommend approval to award and execute a construction contract with Santa Clara Construction, Ltd., for Wastewater Line Renewal and Spot Rehab Service Contract (2023 to 2025) Indefinite Delivery/Indefinite Quantity contract in the amount of $3,200,000 for an initial 1-year term, with two 12-month extension options of $3,200,000, for a total contract amount not to exceed $9,600,000. (Districts 1-10)]

GO BACK TO THREE AND VICE CHAIR TO CONDUCT THE MEETING HALL, READ ITEM THREE IN AS RECOMMEND APPROVAL TO AWARD AND EXECUTE HAD CONSTRUCTION CONTRACTS WITH SANTA CLARA CONSTRUCTION LTD FOR WASTEWATER LINE FOR RENEWAL AND SPOT REHAB SERVICE CONTRACT, UH, 2023 TO 2025 INDEFINITE DELIVERY INDEFINITE QUANTITY CONTRACT IN THE AMOUNT OF 3 MILLION, 200,000 FOR AN INITIAL ONE YEAR TERM WITH TWO 12 MONTH EXTENSION OPTIONS OF 3 MILLION, $200,000 FOR A TOTAL CONTRACT ARE NOW NOT TO EXCEED 9 MILLION, $600,000.

THIS IS IN DISTRICTS, ONE THROUGH 10, UM, COMMISSIONER LEE IS RECUSING.

IS THERE ANY DISCUSSION? OKAY, I'LL TAKE A MOTION FOR APPROVAL.

ALL RIGHT.

COMMISSIONER FISH ENTER MOVES TO APPROVE.

DO I HAVE A SECOND, SECOND COMMISSIONER PENN'S SECONDS.

IF I COULD HAVE A SHOW OF HANDS FOR ALL THAT APPROVE.

OKAY.

ALL PRESENT EXCEPT FOR COMMISSIONER LEE, UM, WHO IS RECUSING, INCLUDING OUR VIRTUAL, UH, COMMISSIONERS, MICHELLE AND WILLIAMS APPROVE.

AND I'LL TURN BACK OVER TO CHAIR.

THANK YOU.

LET'S MOVE TO ITEM.

[6. Recommend approval to award and execute a construction contract with PGC General Contractors, LLC., for the 2021 Facilities – Large Facilities Indefinite Delivery/Indefinite Quantity contract in the amount of $5,000,000 for an initial 1-year term, with two 1-year extension options of $5,000,000, for a total contract amount not to exceed $15,000,000.]

NUMBER SIX.

BECOME AN APPROVAL TO AWARD IN THIS QUEUE.

A CON STRUCTURE CONTRACT WITH PG SHI GENERAL CONTRACTORS, L L S C 2021 FACILITIES, LARGE FACILITIES, INDEFINITE INDEFINITELY QUANTITY CONTRACT IN THE AMOUNT OF $5 MILLION FOR AN INITIAL ONE YEAR TERM WITH TWO, ONE YEAR EXTENSION OPTIONS OF FIVE MINUTES

[00:17:57]

SHOWING

[00:17:58]

ALL IN FAVOR AND THE COMMISSIONER PEN WE KISSING.

THANK YOU VERY MUCH.

OKAY.

THANK YOU.

MUTO ITEM

[8. Recommend approval to negotiate and execute an amendment to the professional services agreement with AECOM Technical Services, Inc., for engineering services for the Walnut Creek Wastewater Treatment Plant Expansion to 100 million gallons per day project in the amount of $45,000,000 for a total contract amount not to exceed $60,000,000. (District 1)]

EIGHT.

RECOMMEND A POOL WALL TO NEGOTIATE AN EXCUSE, AN AMENDMENT TO THE PROFESSIONAL SERVICE AGREEMENT WITH A CALM TECHNOLOGICAL SERVICES, INC.

FOR ENGINEERING SERVICES FOR THE WALNUT CREEK WASTEWATER TREATMENT PLANT EXPANSION TO 1 MILLION GALLONS PER DAY PROJECT IN A MONK OF FORTY-FIVE MILLION DOLLARS FOR A TOTAL CONTRACT AMOUNT, NOT TO EXCEED $60 MILLION.

AND THIS IS IN HISTORY.

NUMBER ONE, AND THE COMMISSIONER PEN NEEDED TO RECUSE ON IT.

IS THERE ANY QUESTIONS FOR THIS ITEM? OKAY.

IF NOT, WE ENTERTAIN MOTION.

UM, MAKE A MOTION TO APPROVE IT.

ISN'T THERE A SECOND SECOND MADE MY COMMISSION OF ISSUE ALL IN FAVOR.

PLEASE RAISE YOUR HANDS SHOWING.

OH, IN FAVOR AND COMMISSIONER PENN IS RECUSING.

[00:20:04]

OKAY.

YES.

OKAY.

[10. Recommend approval to negotiate and execute a Construction Manager at Risk Agreement with MGC Contractor’s Inc. for preconstruction and construction phase services for the Walnut Creek Primary Clarifier and Flow Equalization Basin Rehab project in an amount not to exceed $32,700,000. (District 1)]

WE'LL MOVE ON TO ITEM.

NUMBER 10, RECOMMEND APPROVAL TO NEGOTIATE.

AND IT'S CUTE.

A CONSTRUCTION MANAGER AT RISK AMENDMENT WITH MG.

SHE CONTRACTORS INC FOR PRE CONSTRUCTION AND CONSTRUCTION PHASE SERVICES FOR THE ONE-OFF QUICK PRIMARY CRAY FILE AND THE FLOW EQUALIZATION PATIENT.

WE HAVE PROJECT IN THE AMOUNT NOT TO EXCEED $32,700,000.

AND JUST IN DISTRICT NUMBER ONE AND COMMISSIONER MOSCOW.

UM, I WAS JUST WONDERING WHAT THAT 10%, THAT SEEMS HIGH TO ME BECAUSE I'M FAMILIAR WITH SOME OF THESE CONTRACTS AND OTHER SITUATIONS, AND THEY'RE USUALLY THREE TO 4% OR STAND WHY IT'S 10%.

AND THEN WHEN I ASKED WHAT OTHER PROJECTS THE CITY HAS DONE AND WHAT THE CMR AR FEES HAVE BEEN ON THOSE, IT SEEMS LIKE A LOT OF THEM ARE 5% OR LESS, BUT THEN OUR HOOD HANCOCK'S PLANT WAS 13%.

SO I'M JUST WONDERING WHY THE UTILITY GETS THIS HIGH CMAR FEES WHERE THE OTHER PROJECTS DON'T CHARLES SOLAR, AUSTIN WATER.

I CAN ONLY SPECULATE.

UH, I DO KNOW THAT, UH, THE ONES THAT LISTED THERE ARE MORE ARCHITECTURAL THAN CIVIL ENGINEERING.

SO THAT MAY BE A REASON.

UM, 10% PROFIT IS USUALLY WHAT WE INCLUDE IN OUR ENGINEERS OR, UH, OPINION OF CONSTRUCTION COSTS.

SO I GUESS IT DIDN'T POP OUT AS A RED FLAG FOR ME WHEN I SAW THAT 10%.

UM, THE OTHER, UM, ISSUE PROBABLY MAYBE LEADING TO A SLIGHTLY HIGHER WOULD BE, THIS IS A THREE-YEAR PROJECT.

AND IN THIS TIMEFRAME RIGHT NOW, THAT MAY BE A LITTLE BIT, UH, RISKIER FOR A CONTRACTOR.

SO MAYBE THEY WOULD HAVE LIKE, WOULD LIKE A LITTLE BUFFER IN THE OVERHEAD AND PROFIT.

SO, UH, THOSE ARE THE THINGS I COULD OFFER.

IS THERE ANY WAY THAT YOU CAN NEGOTIATE THAT 10% TO NOT APPLY TO LIKE PRE PURCHASE OF EQUIPMENT OR THINGS LIKE THAT THAT ARE NOT WORTHY OF A 10% FEE? I WOULD I'VE KNOW OF THE CONTRACT.

I DON'T THINK WE COULD DO THAT.

UM, IT'S KIND OF SET IN THERE THAT EXCLUDING THIS, THEN YOU GET THE 10%.

SO, UM, CAUSE THERE'S THE GENERAL CONDITIONS ALSO IN THERE THAT THEY PROVIDED.

SO, UH, UM, WE WILL JUST START THE CONTRACT.

I KNOW THAT THE CONTRACT VALUES FOR 32 MILLION, BUT THE ONLY THING THAT WE WILL DO RIGHT NOW WITH THIS AUTHORIZATION WOULD BE THE PRE-CONSTRUCTION, WHICH WILL BE THE $600,000.

SO WE WILL STILL HAVE TO GO BACK IN AND PROVIDE A NOTICE, PROCEED FOR THEM TO MOVE FORWARD AFTER THIS.

WHAT DO YOU DO IF THEY DON'T GET THREE BIDS FOR THEIR SUB WORK OR DO THEY ALWAYS GET BEDS? THE BY CONTRACT, THE, THE PACKAGES THAT CAN GO OUT, WHICH COULD BE, UM, DURING THE PRE-CONSTRUCTION PHASE, IF WE WANT TO, WE WANT TO GO OUT OR EARLY DELIVERY, OR LIKE YOU'VE MENTIONED ABOUT EQUIPMENT, UM, IT IS COMPETITIVELY BID AND THEY HAVE TO TURN THAT INFORMATION OVER TO US.

SO WHETHER THEY ONLY GET ONE BID OR THREE BIDS THAT'S I DON'T KNOW FOR THAT, BUT THEY DO HAVE TO COMPETITIVELY BID THEIR PACKAGES THAT THEY'RE PROPOSING FOR THE PROJECT.

OKAY.

I'M JUST, I JUST DON'T LIKE THIS ONE BID BID THING, YOU KNOW, AND THEY ONLY, THEY ONLY ONE YOU HAVE TO CHOOSE FROM IS, IS THIS ONE COMPANY I KNOW TH TH THIS PARTICULAR COMPANIES, UH, IS AN, HAS AN ACTIVE PROJECT WITH AUSTIN WATER, THE NORTH AUSTIN PUMP STATION, RESERVOIR NORMS THAT WE COMMONLY CALL IT.

THEY'VE DONE A VERY GOOD JOB SO FAR IN MY SPECULATION.

UM, WE ALSO DO KNOW THAT THEY HAVE DONE SOME CMR WORK THAT MGC, NOT WITH AUSTIN WATER, BUT WITH ANOTHER UTILITY.

AND THAT FORMED VERY WELL TO COMMISSIONER MUSGRAVE, ROBERT GOOD INTERIM DIRECTOR.

IF I MAY WEIGH IN YOUR CONCERNS ARE VALID.

WE ARE CONCERNED AS WELL.

THE BIDDING ENVIRONMENT WE'RE IN WE'RE, WE'RE LUCKY TO GET A BID SOMETIMES.

AND THAT'S FRUSTRATING FOR US.

PLEASE KNOW, IF WE DON'T THINK THE BID IS COMPETITIVE, THEN WE WOULD REJECT AND START OVER.

SO WE'D LIKE TO GET AT LEAST THREE SO WE CAN COMPARE AND SEE WHERE WE'RE AT, BUT IN THIS, IN THIS CASE, AND IN MANY CASES, WE'RE GETTING A SINGLE BETTER AND YOUR CONCERN IS SPOT ON WE'RE, WE'RE THERE WITH YOU.

BUT I THINK AT THIS POINT IN THIS, IN BIDDING ENVIRONMENT, WE'RE AT THE SPOT THAT AS LONG AS IT LOOKS REASONABLE, WE'RE GOING TO BRING IT TO THE COMMISSION

[00:25:01]

FOR RECORD FOR YOUR RECOMMENDATION CONSIDERATION.

SO YOUR CONCERNS ARE VALID.

NO MORE QUESTIONS.

THANK YOU.

ANY MORE QUESTION FOR THE STUFF? IF NOT, WELL, IN THE 10 MOTION.

YEAH.

I'LL MOVE TO IMPROVE MOTION MADE BY VICE CHAIR, KISSEL BERRY.

AND SECOND, SECOND BY COMMISSIONER PAIN.

ALL IN FAVOR, PLEASE RAISE YOUR HAND.

SHOW YOU.

OH, POOP AND MSDS.

THANK YOU VERY MUCH.

OKAY.

[15. Discussion of ratification of a contract with John Zamora Jr. d/b/a King Daddy Distribution LLC, for bottled and canned drinking water in the amount of $247,824.]

LET'S MOVE ON TO ITEM.

HAVE A CONTRACT WITH JANG ZAMORA, JUNIOR DBA, KIN DADDY DISTRIBUTION, LLC, FOR BOTTLES, AND THE KEN DID DRINKING WATER IN THE AMOUNT OF $247,824.

AND ITEM IS GRATIFICATION.

OKAY.

SO THERE'S NO BOAT.

OH, OKAY.

OKAY.

THOSE JESUS THERE.

I JUST START WITH, JUST REMIND ME CONTRACT.

WE JUST NEED TO REPORT IT, BUT WE DON'T NEED TO BOLT ON IT.

AND THEN WE

[22. Staff briefing regarding the proposed Fiscal Year 2022-2023 budget]

WILL JUMP TO ITEM 22 FOR STAFF BRIEFING REGARDING THE PROPOSED PHYSICAL YEAR, 2020 TO 2023 BUDGET CHAIR.

ROBERT GOOD INTERIM DIRECTOR.

I JUST WANTED TO ADD A FEW COMMENTS BEFORE JOSEPH RUNS THROUGH THE NUMBERS WITH YOU.

I PUT IN YOUR PACKET, SOME BUDGET BRIEFS FROM THE CITY MANAGER.

AND THE REASON I DID THAT IS TO GIVE YOU A PERSPECTIVE OF THE OVERALL BUDGET THAT WASSERMAN WATER'S BUDGET IS A PIECE OF THE PUZZLE.

SO THE CITY MANAGER PROPOSED A $5 BILLION BUDGET WITH A 2.7% INCREASE FOR SERVICES AND RATES ACROSS THE BOARD.

THE ONE THING I WANTED TO BRING OUT AS WELL AS HE DEFINED AS AN EMERGING CRISIS IN STAFF RECRUITMENT AND RETENTION.

SO HE FOCUSED A LOT OF HIS BUDGET THIS YEAR PRIORITIES ON OUR EMPLOYEES RIGHTFULLY SO MOST IMPORTANT ASSET.

WE HAVE, YOU'LL SEE THAT REFLECTED IN AUSTIN WATER'S BUDGET AS WELL.

SO SOME OF OUR MAJOR INCREASES ARE AROUND EMPLOYEE RETENTION, SALARY INCREASES, UH, AS WELL AS SOME NEW FDS THAT WE FEEL WE NEED TO CONTINUE TO MAINTAIN BASIC SERVICES.

SO I JUST WANTED TO GIVE YOU THAT CONTEXT.

YOU ALSO SEE IN THAT DOCUMENT, THERE WAS A TAX IMPACT STATEMENT, AND YOU CAN SEE ALL THE RATES THAT ARE BEING INCREASED ACROSS THE BOARD WITH WATER AND WATERSHED IS THE ONLY TWO ENTERPRISES THAT HAVE NOT PROPOSED RATE INCREASES THIS YEAR AS WELL.

SO THE REST OF OUR SISTER EY ENTERPRISE FUNDS ARE PROPOSING RATE INCREASES.

WE'RE ZERO.

AGAIN, THIS YEAR WE'LL BE BACK NEXT YEAR WITH A PROPOSED RATE INCREASE AS WE GO THROUGH COST OF SERVICE, BUT WE'RE GOING TO MAINTAIN THAT ZERO, NO RATE INCREASE FOR ONE MORE YEAR.

AND, UH, AND I'M, WE'RE PROUD OF THAT THIS YEAR AS AFFORDABILITY IS CONTINUING TO BE A STRUGGLE FOR MANY OF OUR RATE PAYERS.

SO WITHOUT I WENT, TURN IT OVER TO JOSEPH AND HE'LL WALK YOU THROUGH THE PRESENTATION.

GOOD EVENING.

MY NAME IS JOSEPH GONZALEZ.

I'M THE ASSISTANT DIRECTOR AND OUR PROPOSED FISCAL YEAR.

UH, STARTING WITH ALL OF MY HIGHLIGHTS, A CAPITAL IMPROVEMENT PLAN WITH AN OVERALL IMPACT.

I WAS WONDERING WHY I WOULDN'T GET AN ECHO.

UM, SO AGAIN, CONCLUDING WITH AN UPDATE, UH, ABOUT, UH, RATES AND AFFORDABILITY, AS ROBERT MENTIONED, WE, WE ARE NOT, UH, PROPOSING,

[00:30:01]

SO THAT SHOULD BE A BRIEF, UH, UH, BRIEF UPDATE.

NEXT SLIDE PLEASE.

SO THE GOAL OF OUR ANNUAL BUDGET IS TO ENSURE THAT THE ALLOCATION OF, OF, UH, OUR FINANCIAL RESOURCES SUPPORTS, YOU KNOW, IN TERMS OF THE BUDGET SUPPORTS OUR MISSION, OUR GOALS, AND, AND OUR PRIORITIES.

AND, AND SO THROUGHOUT THE PROCESS, THE BUDGET PROCESS, UH, YOU KNOW, WE REALLY FOCUSED ON THREE AREAS, UM, FOR, YOU KNOW, WHEN, WHEN WE THINK ABOUT THE, THE INVESTMENTS THAT A, UH, DIRECTOR GOOD MENTIONED IN TERMS OF, OF, OF OUR EMPLOYEES.

UM, BUT, BUT THAT'S DONE MORE AT A CORPORATE LEVEL AND NOT AS MUCH AT, AT THE, AT THE AUSTIN WATER LEVEL.

UM, SO THIS BUDGET, WE BELIEVE SUPPORTS, UM, YOU KNOW, OUR, OUR EFFORTS TO, TO FOCUS AND INCREASE, UH, ENTERPRISE RESILIENCY.

UH, I'LL REMIND YOU THAT ENTERPRISE RESILIENCY HAS BEEN A FOCUS, UH, FOR AUSTIN WATER FOR THE LAST SEVERAL YEARS.

UH, WE BELIEVE THIS BUDGET, UH, YOU KNOW, SUPPORTS, UH, OUR CONTINUED, UM, FINANCIAL STRENGTH AND STABILITY.

UH, YOU KNOW, WHEN, WHEN WE GET TO THE END, WE'LL, WE'LL TALK A LITTLE BIT ABOUT SOME OF OUR KEY FINANCIAL METRICS, BUT, UH, YOU KNOW, THIS BUDGET, UH, UH, MEETS ALL OF OUR FINANCIAL POLICY GOALS IN TERMS OF THOSE KEY FINANCIAL METRICS.

UM, AND, AND FINALLY, YOU KNOW, ANY, ANY TIME, YOU KNOW, AS WE WORKED THROUGH THE BUDGET PROCESS, WE'VE HAD A FOCUS ON, ON AFFORDABILITY, UH, YOU KNOW, FOR, FOR, FOR MANY YEARS NOW, AND THIS WILL MARK THE FIFTH YEAR OF, OF, OF NO RATE INCREASE FOLLOWING OUR, OUR 2018 4.8% RATE REDUCTION.

SO, UH, AS, AS A DIRECTOR, GOOD MENTIONED, WE'RE, WE'RE, WE'RE PROUD OF THAT.

UM, BUT WE'RE DEALING WITH THE SAME, UM, INFLATIONARY ENVIRONMENT THAT, UH, OUR CUSTOMERS ARE DEALING WITH, THAT OTHER DEPARTMENTS ARE DEALING WITH.

AND SO WE DO ANTICIPATE A NEED FOR, FOR FUTURE RATE INCREASE AND, AND, UH, AS DIRECTOR GOOD MENTIONED, WE'LL, WE'LL START TO WORK THROUGH THAT PROCESS, BUT WE'RE, WE'RE VERY PROUD OF, OF, UM, BEING ABLE TO GO A FIFTH YEAR IN, IN THE INFLATIONARY ENVIRONMENT THAT WE'RE IN, UH, WITH, WITHOUT A RATE INCREASE.

NEXT SLIDE, PLEASE.

NEXT SLIDE PLEASE.

OH, GOOD.

ALL RIGHT.

UM, IN TERMS OF, OF, SORRY, UH, BACK ONE, KEEP, KEEP COMING BACK.

SLIDE FOUR.

THERE WE GO.

UM, SO AS I MENTIONED, ENTERPRISE RESILIENCY HAS BEEN A FOCUS AREA FOR AUSTIN WATER FOR THE LAST SEVERAL YEARS.

AND THE PROPOSED BUDGET INCLUDES A 13.6 MILLION IN, UM, RESILIENCY FUNDING IN, IN OUR OPERATIONS AND MAINTENANCE BUDGET, UH, AS WELL AS 441.3 MILLION IN OUR FIVE-YEAR CAPITAL SPENDING BUDGET.

UM, ALTHOUGH WE, WE, WE KIND OF ARGUE, ARGUE WITH, UH, UM, ASSISTANT DIRECTOR, UH, RAULSON ABOUT THIS, YOU KNOW, WHEN, WHEN YOU THINK ABOUT OUR CAPITAL SPENDING PLAN, UH, YOU CAN ARGUE THAT THE ENTIRE CAPITAL SPENDING PLAN IS REALLY FOCUSED ON, ON RESILIENCY AS WE FOCUS ON, UM, KNOW MAINTAINING OUR INFRASTRUCTURE, UH, BOTH TO, UM, TO, UH, ADDRESS THE CHALLENGES ASSOCIATED WITH AGING INFRASTRUCTURE, BUT THE GROWTH ENVIRONMENT THAT WE'RE IN.

UM, BUT, UH, FOR, FOR THE PURPOSES OF, OF OUR BUDGET AND THIS DISCUSSION, YOU KNOW, WE, WE, UH, TALK ABOUT RESILIENCY IN TERMS OF, UH, YOU KNOW, UH, MAKING SURE THE INFRASTRUCTURE IS AVAILABLE IN GROWTH.

GROWTH HAS KIND OF DEALT WITH IT IS NOT INCLUDED IN THOSE FIGURES.

UH, THIS BUDGET INCLUDES 47 PROPOSED NEW, UH, NEW POSITIONS.

UH, THOSE, THOSE POSITIONS WILL SUPPORT, UH, YOU KNOW, OUR, UH, EFFECTIVE UTILITY MANAGEMENT EFFORTS, INCLUDING ENTERPRISE RESILIENCY, UM, OPERAS, OPERATIONAL OPTIMIZATION, UM, ENHANCING CUSTOMER SATISFACTION, UH, AFFORDABILITY AND, AND INFRASTRUCTURE, UM, INFRASTRUCTURE SUPPORT.

THIS BUDGET ALSO, UH, CONTINUES TO FOCUS ON OUR DEBT MANAGEMENT STRATEGIES, UH, IN, IN THE PROPOSED BUDGET, WE'RE PROPOSING A $47 MILLION DEBT DEFEASANCE, UH, FOR, FOR FISCAL YEAR 23, WE WOULD ANTICIPATE THAT WOULD HAPPEN IN THE FALL.

AND JUST AS A REMINDER, UH, YOU KNOW, DEBT DEFEASANCE IS A TRANSACTION WHEREBY WE, UH, MAKE EXTRA PAYMENTS AGAINST OUR OUTSTANDING DEBT SERVICE TO, TO BUY DOWN OUR OVERALL DEBT SERVICE REQUIREMENTS.

[00:35:02]

UM, IN ADDITION, WE'RE ANTICIPATING, UM, A WE'RE EXPLORING OPTIONS FOR, FOR A DEBT REFUNDING, UM, ALSO IN THE FALL AND, UM, YOU KNOW, CLOSELY MONITORING THE, THE MARKET, UH, AS WE ARE SEEING INTEREST RATES RISE, UM, YOU KNOW, A, A REFUNDING TO REFINANCE EXISTING DEBT AT LOWER INTEREST RATES, UH, CURRENTLY IS, IS ON THE TABLE, BUT SHOULD, SHOULD RATES CONTINUE TO CLIMB, UH, YOU KNOW, W WE'LL CONTINUE TO, TO EVALUATE, UM, SHOULD THEY HOLD, WE ANTICIPATE AGAIN, A IN, IN THE FALL.

AND, UM, FINALLY, YOU KNOW, FROM A, FROM A DEBT MANAGEMENT PERSPECTIVE, WE'RE CONTINUING TO UTILIZE A TEXAS WATER DEVELOPMENT BOARD, UM, LOW INTEREST LOANS TO, UM, TO LOWER OUR COST OF FINANCING FOR, FOR AS MANY PROJECTS AS WE CAN.

AND SO WE'LL HAVE THREE, UH, LOAN CLOSINGS IN THE FALL, UH, TOTALING $51 MILLION THROUGH OUR TEXAS WATER DEVELOPMENT BOARD LOAN PROGRAM.

NEXT SLIDE, PLEASE.

SO THIS CHART SHOWS OUR SOURCES OF FUNDS, PRIMARILY OUR, OUR, OUR REVENUES, UH, AS YOU CAN SEE, ALMOST ALL OF THE 600, ALMOST $609 MILLION IN, UH, PROPOSED REVENUES FOR NEXT YEAR COMES FROM OUR WATER AND WASTEWATER SERVICES FOR WE'RE PROJECTING INCREASES OF 9.3 MILLION IN WATER SERVICE REVENUE, AND 15.8 MILLION IN, IN WASTEWATER SERVICE REVENUE.

NEXT SLIDE, PLEASE, IN TERMS OF USES OF FUNDS, UM, WE'RE PROPOSING 683.8 MILLION IN, UH, FOR OUR PROPOSED EXPENDITURE BUDGET.

UM, THAT'S, UH, UH, AROUND A $28 MILLION INCREASE OVER THE CURRENT YEAR, FYI 22 BUDGET, AND APPROXIMATELY 20 MILLION OF THAT INCREASE HAS RELATED TO OPERATING REQUIREMENTS.

NEXT SLIDE, PLEASE.

THIS SLIDE HIGHLIGHTS SOME OF THE SIGNIFICANT INCREASES YEAR OVER YEAR IN TERMS OF OUR BUDGET.

UM, AND, YOU KNOW, WE'VE TALKED EARLIER IN TERMS OF, UH, SOME OF THE CONTRACTS THAT, UH, WE BROUGHT FORWARD AND, UH, SOME OF THE COST INCREASES WE'RE SEEING ON THE, UH, CAPITAL SPENDING SIDE, BUT WE'RE SEEING THE SAME THING, UH, ON THE OPERATIONS AND MAINTENANCE SIDE.

SO, UH, THE BIGGEST AREA OF INCREASE FOR US FOR 23 IS INCREASES IN THE GOODS AND SERVICES THAT WE PROCURE TO, TO RUN THE UTILITY.

AND THAT'S, UH, AROUND 6.8 MILLION FOR, FOR NEXT YEAR.

AND THAT'S PRIMARILY RESULTING FROM, UH, COST INCREASES FOR THINGS LIKE CHEMICALS, PIPES, VALVES, FITTINGS.

UM, AND SO, YEAH, UH, AGAIN, WE'RE, WE'RE, WE'RE DEALING WITH THE, YOU KNOW, A CHALLENGING INFLATIONARY ENVIRONMENT.

UM, I, I MENTIONED THE 47 NEW, UH, FTES FULL-TIME EQUIVALENTS, $5 MILLION OF THE INCREASE YEAR OVER YEAR.

UM, AND THEN AS ROBERT MENTIONED AT THE ONSET OF THIS PRESENTATION, WAGES AND BENEFITS WILL BE INCREASING BY, UH, AROUND 4.8 MILLION WITH THE BULK OF THAT BEING FOR A PROPOSED WAGE INCREASE OF 4% FOR EMPLOYEES, UH, WENT WITH THE REMAINDER MIG FOR, UH, BENEFIT COST INCREASES.

LET'S SEE.

UM, I DON'T, I'LL GO INTO A LITTLE BIT MORE DETAIL ON SOME OF THE OTHER THINGS, UM, BUT AGAIN, THE PRIMARY FOCUS OF THE OVERALL CITY BUDGET IS INVESTING IN THE WORKFORCE, AND YOU CAN SEE THAT REFLECTED IN, UM, IN SOME OF OUR INCREASES AS WELL.

NEXT SLIDE PLEASE.

OKAY.

NOW THIS CHART SHOWS, UM, A SUMMARY OF THE 47 NEW POSITIONS THAT WE'RE PROPOSING IN THE BUDGET, AND MANY OF THE PROPOSED POSITIONS AGAINST SUPPORT OUR EFFECTIVE UTILITY MANAGEMENT EFFORTS, INCLUDING OPERATIONAL OPTIMIZATION, CUSTOMER SATISFACTION, EMPLOYEE LEADERSHIP, AND DEVELOPMENT, AND INFRASTRUCTURE STRATEGY, AND PERFORMANCE.

UH, SOME OF THE HIGHLIGHTS INCLUDE, UM, SIX NEW POSITIONS TO, TO CREATE A STREET CUT, UH, TEAM THAT WILL HELP ADDRESS OUR STEEP STREET CUT BACKLOG, AS WELL AS AN ADDITIONAL EMPLOYEE TO SUPPORT OUR MOBILE WORKFORCE INITIATIVE, UH, SO THAT OUR

[00:40:01]

CREWS CAN MORE EFFICIENTLY RESPOND TO SERVICE REQUESTS.

SO THOSE ARE SOME OF THE POSITIONS THAT ARE IN THE UPPER RACIAL OPTIMIZATION BUCKET.

THE PROPOSED BUDGET ALSO INCLUDES TWO POSITIONS TO ENHANCE OUR DISPATCH SERVICES, AS WELL AS POSITION TO OVERSEE CUSTOMER OUTREACH AND CUSTOMER RELATION EFFORTS IN OUR CUSTOMER SATISFACTION AREA.

UM, IN ADDITION, WE'RE PROPOSING SIX NEW POSITIONS TO SUPPORT ENTERPRISE RESILIENCY, INCLUDING TO SCALE POSITIONS AND TO NEW PIPELINE TECHNICIANS.

UM, YOU KNOW, JUST A FEW OF, OF OUR, UH, ENTERPRISE RESILIENCY RELATED, UH, POSITIONS.

AND THEN, UM, I WON'T, I WON'T LIST THEM ALL, BUT I DO WANT TO HIGHLIGHT THAT WE'RE ALSO PROPOSING FIVE NEW, UH, SECURITY POSITIONS TO REDUCE CONTRACTED SERVICES AND SUPPORT A COUNCIL INITIATIVE TO, TO BRING, UH, CERTAIN POSITIONS THAT WE CURRENTLY CONTRACT FOR IN-HOUSE.

SO, UH, FIVE NEW SECURITY POSITIONS, UM, TO REDUCE EXTERNAL CONTRACTED SERVICES.

UH, NEXT SLIDE PLEASE.

SO, UM, ALTHOUGH WE, WE ARE ABLE TO NOT HAVE A RATE INCREASE IN THE PROPOSED BUDGET.

WE ARE, UH, FACING SOME BUDGET CHALLENGES, UM, THE SUPPLY CHAIN, UM, AND INFLATIONARY CHALLENGES THAT I TALKED ABOUT, YOU KNOW, JUST THIS YEAR ALONE.

UM, THROUGH LAST MONTH WE HAD 17, UH, CONTRACT PRICE ADJUSTMENTS ON EXISTING CONTRACTS, UH, TOTALLING AROUND 3.1 MILLION.

UH, ABOUT HALF OF THAT IS, HAS BEEN FOR, FOR CHEMICAL COSTS.

UH, WE'RE ALSO CLOSELY MONITORING, UH, OUR INTER-DEPARTMENT TRANSFERS.

UM, OUR INTER-DEPARTMENT TRANSFERS FOR THE LAST TWO YEARS HAVE INCREASED AT A FASTER RATE THAN THE RATE OF INFLATION.

UM, AND YOU KNOW, WE'RE DOING A LOT TO TRY AND MITIGATE SOME OF THAT.

UH, FOR EXAMPLE, UH, YOU KNOW, IN TERMS OF OUR, OUR FLEET COST, WE'RE, UH, WORKING TO REDUCE OUR FLEET AGE TO REDUCE FLEET MAINTENANCE COSTS, UM, ON, UH, FOR OUR, UM, INFORMATION SYSTEM SUPPORT OUR, YOU KNOW, UH, COMMUNICATIONS TECHNOLOGY MANAGEMENT TRANSFER, UH, WE'RE WORKING TO REDUCE THE NUMBER OF DEVICES WHERE, UM, YOU KNOW, IN, IN, IN THE PAST, WE MIGHT'VE HAD MULTIPLE DEVICES.

UM, YOU KNOW, WE'RE REDUCING THAT AS MUCH AS POSSIBLE TO, UM, TO REDUCE THAT ALLOCATION SINCE MOST OF THAT ALLOCATION IS BASED ON THE NUMBER OF DEVICES THAT ARE SUPPORTED BY, UH, CITY, UH, COMMUNICATION TECHNOLOGY MANAGEMENT DEPARTMENT, UH, WITH AUSTIN ENERGY, WITH OUR TRANSFER, UH, FOR CUSTOMER CARE AND CUSTOMER SUPPORT AND THE BILLING SYSTEM, UH, WE'VE WORKED WITH AUSTIN ENERGY OVER THE LAST FEW YEARS TO, UM, TO REVIEW THAT ALLOCATION.

AND, AND WE'RE ABLE TO HIGHLIGHT AREAS WHERE, UM, WE WERE, YOU KNOW, THE ALLOCATION, UH, YOU KNOW, MAYBE WASN'T ENTIRELY, UM, BEING ALLOCATED TO ALL DEPARTMENTS, YOU KNOW, THAT WERE SUPPORTED.

AND SO WE ACTUALLY SAW A DECREASE THIS YEAR IN OUR AUSTIN ENERGY CUSTOMER CARE ALLOCATION.

SO, UM, ALTHOUGH IT'S A, IT'S, IT'S AN AREA, UH, THAT WE MONITOR, UH, WE WE'RE DOING EVERYTHING WE CAN AGAIN, TO, TO CONTROL THOSE COSTS.

UM, AND I'LL TALK SHORTLY ABOUT OUR, UH, GO MORE DEPTH ON ABOUT THE CAPITAL SPENDING PLAN, BUT, UM, YOU KNOW, WE DO HAVE A GROWING CAPITAL PLAN WITH SEVERAL LARGE STRATEGIC PROJECTS ON THE HORIZON.

AND, UH, YOU KNOW, SO IT'S, UH, IT'S A CHALLENGE FROM A DEBT MANAGEMENT PERSPECTIVE TO, TO, TO TRY AND ENSURE THAT WE'RE MANAGING OUR, OUR, OUR DEBT, UM, TO, TO CONTINUE TO KEEP OUR RATES AS AFFORDABLE AS POSSIBLE.

UM, YOU KNOW, AGAIN, AS WE TALKED ABOUT EARLIER, YOU KNOW, CONSTRUCTION COSTS CONTINUE TO RISE.

IT'S, IT'S A TOUGH CHALLENGE FROM A BIDDING ENVIRONMENT, UH, YOU KNOW, IN TERMS OF, OF, UH, CONSTRUCTION PROJECTS AND, UM, W YOU KNOW, WE'RE, WE'RE WORKING TO, UH, TO KEEP THOSE COSTS AS AFFORDABLE AS POSSIBLE.

UM, AND, AND, YOU KNOW, ULTIMATELY TRY AND KEEP OUR DEBT COSTS AS AFFORDABLE AS POSSIBLE.

AND WE'LL TALK A LITTLE BIT MORE ABOUT DEBT MANAGEMENT HERE SHORTLY.

UM, AND THEN MORE OF A HORIZON ISSUE, YOU KNOW, WE'RE OBVIOUSLY, UH, I THINK IN THE START OF, UH, YOU KNOW, DROUGHT CONDITIONS, WE, WE RECENTLY MOVED FROM CONSERVATION STAGE TO DROUGHT STAGE ONE, UH, JUST, JUST LAST MONTH, UM, FOR, FOR THE CURRENT YEAR WE'RE, WE'RE SEEING INCREASED REVENUES, UH, YOU KNOW, PEOPLE ARE TRYING TO MAINTAIN THEIR LAWNS.

I DON'T SEE A SIGNIFICANT IMPACT FOR, FOR FISCAL YEAR 23.

UM, YOU KNOW, AND JUST KIND OF THINKING BACK TO THE LAST DROUGHT,

[00:45:01]

UM, WE SAW AVERAGE CONSUMPTION FOR ACCOUNT, UM, DROP FROM 8,800 GALLONS A MONTH FOR RESIDENTIAL CUSTOMERS.

WHEN WE, YOU KNOW, IN 2011, YOU KNOW, EARLY ON IN THE DROUGHT DOWN TO ABOUT 5,700, UH, IN, IN 2016.

UM, AND, AND WE'VE KIND OF MAINTAINED THAT LEVEL OF DEMAND.

SO WE'RE ALREADY AT A LEVEL THAT'S CONSISTENT WITH KIND OF THE PEAK, UH, YOU KNOW, OF, OF THE DROUGHT CONDITIONS, UH, THE PREVIOUS DROUGHT.

SO I DON'T ANTICIPATE WE WOULD SEE MUCH REVENUE EROSION, UH, BUT AGAIN, IT IS SOMETHING THAT WE'RE CONTINUING TO MONITOR AND, UM, AND, UH, UH, BUT WE'RE IN A MUCH STRONGER FINANCIAL CONDITION CURRENTLY THAN WE WERE DURING THE LAST DROUGHT.

UM, DURING THE LAST DROUGHT, WE WERE STRUGGLING TO, UM, TO FIND A MATCH OF, YOU KNOW, OUR, OUR, OUR RATE STRUCTURE WITH THE DEMAND THAT WE WERE SEEING.

AND AS A RESULT, UM, YOU KNOW, IN 2014 WE HAD A $50 MILLION REVENUE SHORTFALL.

UM, YOU KNOW, LAST YEAR IS A GOOD EXAMPLE WITH THE WET WEATHER WE SAW, UM, YOU KNOW, WE SAW DEMAND DECLINE, BUT, UM, YOU KNOW, THE, OUR REVENUE SHORTFALL WAS $10 MILLION LAST YEAR.

UM, SO I THINK, YOU KNOW, EVEN IF THE DROUGHT CONDITIONS CONTINUE, YOU KNOW, IT WOULD BE MUCH MORE MANAGEABLE THAN, THAN THE PREVIOUS DROUGHT.

UH, NEXT SLIDE PLEASE.

AND ONE MORE.

ALRIGHT.

UM, NOW PROVIDE A QUICK OVERVIEW OF OUR, UH, CAPITAL IMPROVEMENT SPENDING PLAN.

OKAY.

UM, THE, THE PROPOSED CAPITAL IMPROVEMENT SPENDING PLAN IS 1.37 BILLION, UH, WHICH IS A $280 MILLION INCREASE, UH, OVER, OVER THE CURRENT FIVE-YEAR CAPITAL SPENDING PLAN.

UM, AND YOU'LL, YOU'LL SEE, ON, ON THE NEXT COUPLE OF SLIDES THAT, YOU KNOW, IN TERMS OF SOME OF OUR STRATEGIC PROJECTS, PARTICULARLY OUR WALNUT CREEK EXPANSION PROJECT IS, IS STARTING TO DRIVE THAT WE'VE GOT SEVERAL, YOU KNOW, STRATEGIC PROJECTS ON THE HORIZON.

AND AS WE PROGRAM THOSE IN, UH, YOU KNOW, WE'RE SEEING AN INCREASE IN OUR OVERALL CAPITAL SPENDING PLAN, AS WELL AS, YOU KNOW, THE IMPACTS OF, UM, THE, THE CURRENT, UM, YEAH.

INFLATIONARY ENVIRONMENT.

UH, I WOULD NOTE THAT, UH, JUST IN TERMS OF, OF THE SPENDING PLAN SPLIT, IT'S, IT'S FAIRLY CONSISTENT WITH LAST YEAR WITH, UM, THE SPLIT BETWEEN, YOU KNOW, UH, YOU KNOW, WATER IS COUNTING FOR ABOUT 34% OF, OF THE OVERALL SPENDING PLAN WHILE, YOU KNOW, WASTEWATER PROJECTS ACCOUNT FOR ABOUT 64%.

SO, SO PERCENTAGE WISE, WE'RE, WE'RE IN THE SAME BALLPARK.

UM, BUT, UM, WE ARE SEEING AN INCREASE AGAIN BECAUSE OF, UH, SOME OF THE STRATEGIC PROJECTS ON THE HORIZON.

NEXT SLIDE PLEASE.

UM, AND THIS SLIDE JUST PROVIDES A, UM, KIND OF A HISTORICAL LOOK AT, UH, HOW THE CURRENT PROPOSED CIP SPENDING PLAN COMPARES TO THE LAST THREE, FIVE YEARS SPENDING PLANS.

AND YOU CAN SEE, OBVIOUSLY THEY, THEY THEY'VE GROWN OVER TIME, BUT, UH, THE MAJORITY OF THE INCREASE HAS HAPPENED IN, IN, IN THAT YELLOW SLICE, WHICH IS OUR STRATEGIC PROJECTS IN THE NEXT SLIDE.

WE'LL, UH, WE'LL WE'LL LIST THOSE STRATEGIC PROJECTS, BUT, UH, UM, THAT, THAT'S THE AREA WHERE WE'VE SEEN THE BIGGEST INCREASE WITH, UM, YOU KNOW, MODEST INCREASE IN OUR GROWTH ENHANCEMENT AND PRIORITY PROJECTS AND, AND, AND OUR RENEWAL PROJECTS.

NEXT SLIDE PLEASE.

UM, AND, AND SO THESE ARE THE STRATEGIC PROJECTS THAT I MENTIONED, UH, THE, THE BIGGEST ONE BEING THE, YOU KNOW, THE WALNUT CREEK, UH, WASTEWATER TREATMENT PLANT A HUNDRED MGD EXPANSION, UH, WITHIN THE FIVE-YEAR SPENDING PLAN, UH, WE'RE, WE'RE PROJECTING $284 MILLION, UH, OVER, OVER THE FIVE-YEAR PERIOD.

UM, THE, THE NEXT BIGGEST PROJECT IS, IS OUR ADVANCED METERING INFRASTRUCTURE PROJECT.

UM, YOU MAY RECALL WE RECENTLY HIT, UH, UH, 50,000 METER INSTALLS, AND WE'RE LOOKING, UH, YOU KNOW, WE ANTICIPATE COMPLETION IN 2024 TIMEFRAME.

UH, SO YOU KNOW, ABOUT 66 MILLION LEFT TO GO ON THAT PROJECT, UM, AND ALSO POINT OUT, UM, THE SOUTH AUSTIN REGIONAL WASTEWATER TREATMENT, UH, UM, EXPANSION ALSO TO A HUNDRED MGD.

UH, WE DIDN'T, WE DON'T HAVE ANY SPENDING IN, IN THE, YOU KNOW, THE CURRENT FIVE-YEAR SPENDING PLAN FOR, FOR THE EXPANSION, BUT IT IS A HORIZON STRATEGIC PROJECT.

AND WE ANTICIPATE OVER THE NEXT COUPLE OF YEARS, WE'LL, UH, WE'LL START TO SEE THAT PROGRAM IN, UM,

[00:50:01]

YOU KNOW, PROBABLY LAYERED A LITTLE BIT, YOU KNOW, TO NOT, NOT OVERLAP TOO MUCH WITH, WITH WALNUT CREEK, BUT, UM, YOU KNOW, IT'S, IT'S, IT'S JUST A SIGN THAT, UH, YOU KNOW, WE'VE GOT A LOT OF CAPITAL NEEDS.

UM, IN, IN FACT, I THINK, UH, YOU KNOW, IN TERMS OF OUR, OUR PROJECT SUBMITTAL, UM, YOU KNOW, WITH $1.37 BILLION PLAN, THERE WAS ANOTHER 400, $500 MILLION OF PROPOSED PROJECTS THAT, THAT WEREN'T INCLUDED IN THIS PLAN.

SO, UM, YOU KNOW, WE W WE, UH, AREN'T, HAVEN'T BEEN IN A POSITION AND IT PROBABLY WOULDN'T BE IN A POSITION TO, TO DO EVERYTHING WE'D LIKE TO DO.

UH, BUT WE'VE GOT A ROBUST, UH, CAPITAL PLANNING PROJECT THAT LOOKS AT THE HIGHEST PRIORITIES.

AND, AND, AND THAT'S WHAT THIS PLAN REFLECTS.

NEXT SLIDE, PLEASE.

AND THEN IN TERMS OF THE OTHER PRIORITY PROJECTS, THE BIDS, THE BIGGEST PROJECTS OUTSIDE, OUTSIDE OF OUR STRATEGIC PROJECTS, THIS IS A LIST OF, OF THOSE PROJECTS.

AND, AND YOU CAN SEE THAT JUST LIKE OUR OVERALL SPENDING PLAN, UM, THEY'RE, THEY'RE, UH, HEAVILY WEIGHTED TOWARDS THE WASTEWATER SIDE OF THE HOUSE WITH, UM, YOU KNOW, SOUTH AUSTIN, REGIONAL WASTEWATER TREATMENT PLANS AND BE IMPROVEMENTS AT 61 MILLION WILLIAMSON CREEK WASTEWATER INTERCEPTOR AT 45 MILLION, UH, WALNUT CREEK, UH, HAD WORKS IMPROVEMENTS AT 32 MILLION.

I WON'T LIST THEM ALL, BUT, UH, UM, UH, SEVEN, UH, SIX OF THE TOP SEVEN PROJECTS IN TERMS OF SPEND OR ON THE WASTEWATER SIDE OF THE HOUSE.

UH, NEXT SLIDE PLEASE.

AND ONE MORE.

SO I'LL, I'LL, UM, CONCLUDE WITH, YOU KNOW, UM, DISCUSSION ABOUT AFFORDABILITY AND ANY DISCUSSION FOR, FOR AUSTIN WATER ABOUT AFFORDABILITY REALLY STARTS WITH, WITH OUR DEBT MANAGEMENT EFFORTS, UH, YOU KNOW, BACK IN 2016, UH, YOU KNOW, WE UNDER TOOK, UH, SEVERAL INITIATIVES TO, UM, TO KEEP OUR, OUR DEBT SERVICE REQUIREMENTS UNDER, UNDER CONTROL.

UM, YOU CAN SEE, UM, AND THIS STARTS WITH 2018, BUT, YOU KNOW, BACK IN 2016, UH, YOU KNOW, WE WERE IN THE 200 2200 $30 MILLION RANGE, UM, IN TERMS OF, UH, ANNUAL DEBT SERVICE REQUIREMENTS.

AND, AND WE'VE WORKED TO, TO, UM, TO SHAVE THAT OFF AND, AND REALLY LEVELIZE OUR DEBT SERVICE.

SO WHAT THIS CHART SHOWS IS, UM, THE, THE BLUE BARS THAT YOU GO UP, UH, REPRESENT OUR ACTUAL LEVEL OF DEBT SERVICE.

UM, AND, AND THE, THE BLUE LINE AT THE TOP REPRESENTS OUR PROJECTED LEVEL OF DEBT SERVICE, YOU KNOW, AS COMPARED TO OUR, OUR 2016, UM, FIVE-YEAR FORECAST, WHICH, YOU KNOW, OUR, OUR FIVE-YEAR FORECAST GOES REALLY OUT OUT 20 YEARS, BUT, UM, UM, YOU KNOW, IN TERMS OF WHAT WE SUBMIT FOR THE CITY, IT'S A FIVE-YEAR FORECAST.

UM, SO AT THE TIME WE WERE LOOKING AT, UH, ANNUAL DEBT SERVICE REQUIREMENTS, WELL, OVER 200 MILLION, YOU KNOW, AVERAGING IN THE 220 MILLION RANGE AND, AND THROUGH THE USE OF CAPITAL RECOVERY FEES TO DEFEASE DEBT.

UH, AS I MENTIONED EARLIER, UH, TO PAY OFF DEBT EARLY, YOU KNOW, UH, AKIN TO MAKING EXTRA, YOU KNOW, EXTRA MORTGAGE OR CAR PAYMENTS, UM, REFINANCING EXISTING DEBT, REFUNDING EXISTING DEBT AT LOWER INTEREST RATES, UM, UTILIZING TEXAS WATER DEVELOPMENT BOARD, LOW INTEREST, UH, LOANS, WE'VE BEEN ABLE TO SHAVE, UH, $600 MILLION OVER $600 MILLION OFF OF OUR ANNUAL DEBT SERVICE REQUIREMENTS.

UM, IN, IN THE LAST SIX YEARS, UM, THAT'S HAD A SIGNIFICANT IMPACT, YOU KNOW, IN TERMS OF AFFORDABILITY.

UH, ONE OF OUR KEY FINANCIAL METRICS IS DEBT SERVICE COVERAGE, AND DEBT SERVICE COVERAGE IS, UM, A RATIO.

YOU, YOU, YOU TAKE OUR, OUR, OUR REVENUES THAT ARE AVAILABLE TO PAY OFF DEBT, UM, SUBTRACT OUT YOUR OPERATIONS AND MAINTENANCE COSTS.

AND THEN YOU, YOU MEASURE THE LEFTOVER AMOUNT AS A MULTIPLE OF YOUR ANNUAL DEBT SERVICE REQUIREMENTS.

UM, AND OUR FINANCIAL POLICY LEVEL OF, OF DEBT SERVICE COVERAGE IS 1.75 TIMES COVERAGE.

SO FOR EVERY DOLLAR OF DEBT SERVICE SAVINGS THAT WE'VE ACHIEVED, WE'RE SAVING A DOLLAR 75 FOR OUR CUSTOMERS.

UM, SO IT'S, IT'S, UH, YOU KNOW, I TALKED A LITTLE BIT ABOUT SOME OF THE THINGS THAT WE DO TO TRY AND CONTROL OUR COSTS ON THE OPERATION SIDE, BUT SAVING AGAIN, SAVING A DOLLAR, UH, ON THE DEBT SERVICE SIDE HAS A MULTIPLE EFFECT, UM, YOU KNOW, IN TERMS OF, OF OUR REVENUE REQUIREMENTS.

SO, SO WE, WE, WE HEAVILY FOCUS ON BOTH, BUT WE RECOGNIZE THAT IF WE CAN KEEP DEBT SERVICE REQUIREMENTS IN THE ONE 70 TO $180 MILLION

[00:55:01]

RANGE, THEN WE CAN STAY IN THE CURRENT LEVEL OF, UH, OF RATES AND OUR RATES ARE, ARE, UH, DESIGNED TO ACCOMMODATE THAT LEVEL OF DEBT SERVICE ALSO HIGHLIGHT, UM, THAT IN 2021, WE RECEIVED A GOVERNMENT FINANCE OFFICER ASSOCIATION, UH, AWARD FOR EXCELLENCE FOR OUR DEBT MANAGEMENT PLAN.

UM, YOU KNOW, WE'RE, WE'RE PROUD OF THAT.

UM, AND, AND AGAIN, WE'RE, UH, YOU KNOW, THESE EFFORTS ARE ONGOING.

THE, YOU KNOW, UH, WE'RE NOWHERE NEAR DONE.

YOU KNOW, WE, UH, WE'LL WORK TO CONTINUE TO, TO KEEP DEBT SERVICE REQUIREMENTS AS LOW AS POSSIBLE BECAUSE OF THE IMPACT THAT IT HAS ON OUR RATES.

NEXT SLIDE, PLEASE.

AND THIS CHART SHOWS, UM, UH, A SUMMARY OF OUR TEXAS WATER DEVELOPMENT BOARD AND LOAN ACTIVITY.

UM, YOU KNOW, YOU CAN SEE THE, THE, THE LOANS TO DATE, UH, THE ROYAL BLUE, UM, SHOWS, UH, THE LOAN AMOUNTS THAT WE'VE TAKEN DOWN, UH, OVER THE LAST FEW YEARS WITH A HUNDRED, ALMOST 198 MILLION IN LOANS TO DATE.

UM, AND, AND THE DARKER BLUE AT THE TOP, UH, REPRESENTS THE ESTIMATED SAVINGS AS COMPARED TO OUR TRADITIONAL, UH, REVENUE BOND ISSUANCES.

AND WE'VE SAVED ABOUT 34 MILLION YEAR TO DATE.

UM, I MENTIONED THAT WE'LL HAVE THREE LOAN CLOSINGS IN THE FALL, AGAIN, TOTALING 51 MILLION.

UM, AND, YOU KNOW, WITH, UH, EVEN WITH A RISING INTEREST RATE ENVIRONMENT, WE ANTICIPATE, UH, TO SEE SIGNIFICANT SAVINGS, UH, BECAUSE THE WAY THE WATER DEVELOPMENT BOARD LOANS ARE STRUCTURED IS THERE, YOU KNOW, UM, WE GET DISCOUNTS OFF OF, OFF OF MARKET RATES.

SO, UM, IT'LL CONTINUE TO BE, UH, YOU KNOW, A KEY INITIATIVE FOR US.

NEXT SLIDE, PLEASE.

SO, AS ROBERT MENTIONED, THE, AT THE OUTSET, YOU KNOW, WHERE WE'RE NOT PROPOSING A, A RATE INCREASE FOR FISCAL YEAR 23, SO THIS CHART SHOWS, UH, YOU KNOW, UH, THE AVERAGE BILL FOR OUR CUSTOMERS AT, AT CURRENT RATES AT 80 79, AND WITH NO RATE INCREASE, OBVIOUSLY THAT NUMBER IS THE SAME FOR, FOR 2023 AND AT 80 79.

AND THAT'S BASED ON, AGAIN, THE AVERAGE LEVEL OF CONSUMPTION OF 5,800 GALLONS OF WATER, AND, UH, THE AVERAGE, UH, 4,000 GALLONS OF WASTEWATER PER MONTH.

NEXT SLIDE, PLEASE.

AND THEN SAME STORY, UH, FOR OUR CUSTOMER ASSISTANCE PROGRAM, UH, YOU KNOW, UH, NO RATE INCREASE.

AND WE DON'T SHOW THAT AS A COMPARISON.

WHAT WE HIGHLIGHT HERE IS, IS THE DISCOUNT.

YOU KNOW, WE, WE'VE GOT, UM, REALLY, REALLY ROBUST CUSTOMER ASSISTANCE PROGRAM.

WE THINK, UH, YOU KNOW, ONE OF THE BEST, UH, IN, IN THE NATION, UH, WE'VE GOT OVER 14,000 RESIDENTIAL CAP CUSTOMERS.

UM, AND, AND JUST THIS YEAR AND 2022, WE ADDED 18,000 MULTIFAMILY FAMILY CAP CUSTOMERS WHO, UH, WE WEREN'T ABLE TO REACH PREVIOUSLY.

SO OUR MULTIFAMILY, UM, ACCOUNTS ARE A MASTER METERED.

UH, SO, UM, YOU KNOW, IF IT'S A CONDO ASSOCIATION OR AN APARTMENT COMPLEX, UH, YOU KNOW, UH, THEIR MASTER METERS.

SO, UM, YOU KNOW, UH, CUSTOMERS WHO MIGHT OTHERWISE QUALIFY FOR CUSTOMER ASSISTANCE PROGRAM DISCOUNTS, DON'T GET A BILL FROM AUSTIN WATER, UM, BECAUSE IT WOULD GO TO THE CONDO ASSOCIATION OR THE APARTMENT COMPLEX.

UM, AND SO WE HADN'T EVER BEEN ABLE TO TARGET THOSE CUSTOMERS AND PROVIDE THEM ANY CAP BENEFITS.

UH, BUT WE WORKED WITH AUSTIN ENERGY THIS YEAR TO, UH, PROVIDE A CREDIT OF $17 FOR MULTI-FAMILY CAP CUSTOMERS ON THE AUSTIN ENERGY PORTION OF THEIR, THEIR BILL, UM, SO THAT THEY GET, UH, YOU KNOW, A WATER AND WASTEWATER DISCOUNT, UM, THAT, YOU KNOW, ON, ON THE BILL, THAT'S GOING TO, YOU KNOW, AGAIN, THE MANAGEMENT COMPANY, UH, FOR, FOR THE COMPLEX.

UM, SO WE'RE PRETTY PROUD OF THAT WE'RE WORKING, UM, TO, UH, IMPLEMENT A PHASE TWO OF THAT MULTIFAMILY CAP PROGRAM, NOT ALL OF OUR CUSTOMERS, UM, OUR SERVICE TERRITORY, OUR SERVICE AREA, UM, DOESN'T EXACTLY MATCH AUSTIN ENERGY'S SERVICE TERRITORY.

SO, YOU KNOW, THERE ARE CUSTOMERS THAT WE SERVE WITH WATER THAT AREN'T SERVED BY AUSTIN ENERGY.

AND SO THOSE CUSTOMERS, UM, YOU CURRENTLY, AREN'T GETTING THE DISCOUNT, BUT WE'RE WORKING WITH A THIRD PARTY PROVIDER TO IDENTIFY THOSE CUSTOMERS AND, UM, AND REACH OUT TO THEM TO BE ABLE TO PROVIDE, UH, DISCOUNTS IN THE FORM OF DIRECT PAYMENTS BY THE END OF THE CALENDAR YEAR.

[01:00:01]

NEXT SLIDE PLEASE.

SO IN THE, AND THIS IS A, ONE OF OUR KEY AFFORDABILITY METRICS, UM, OUR, OUR, OUR TARGET IN TERMS OF, UM, THE, UH, AVERAGE BILL AS A PERCENTAGE OF MEDIAN HOUSEHOLD INCOME FOR, FOR THE CITY, UH, IS, IS 1.5%.

UH, BUT, BUT YOU CAN SEE THAT WE'VE BEEN BELOW, UH, THAT LEVEL, YOU KNOW, SINCE, YOU KNOW, SINCE EVEN 2016.

UM, BUT AS WE'VE CONTINUED, AS WAGES HAVE GROWN IN THE AREA AND MEDIAN HOUSEHOLD INCOME HAS GROWN, AND WE HAVEN'T HAD ANY INCREASES, UM, YOU KNOW, FOR, FOR THE LAST, UH, FIVE YEARS COUNTING THE PROPOSED BUDGET YEAR, UH, THAT PERCENTAGE HAS CONTINUED TO MOVE DOWN AND, AND DESPITE SOME ANTICIPATED, UM, RATE INCREASES OVER OVER THE NEXT FEW YEARS, UH, WE EXPECT, UH, YOU KNOW, UM, WE EXPECT HOUSEHOLD INCOME TO REALLY CONTINUE TO GROW AT A FASTER RATE THAN, THAN OUR RATE INCREASES.

AND SO WE EXPECT A CONTINUED DOWNWARD TREND IN TERMS OF THIS AFFORDABILITY METRIC.

AND THEN NEXT SLIDE, PLEASE.

SO THIS SLIDE SUMMARIZES IT, THIS IS OUR BUDGET SUMMARY.

UM, YOU KNOW, YOU'VE SEEN IT IN, IN, UH, YOU KNOW, UH, FINANCIAL UPDATES, BUT IT'S A SUMMARY OF OUR REVENUES, OUR EXPENDITURES AND TRANSFERS AND, AND, YOU KNOW, OUR OVERALL, UH, FI FINANCIAL CONDITION, UH, YOU CAN SEE THAT WE STARTED, UH, THE FISCAL YEAR WITH A BEGINNING BALANCE, UH, IN, IN THAT MIDDLE COLUMN OF ALMOST 214 MILLION.

WE ANTICIPATE WITH A STRONG REVENUE YEAR THAT WE'LL END THE YEAR WITH, WITH AN ENDING BALANCE OF ABOUT 231 MILLION.

UM, AND THEN FOR NEXT YEAR, WHEN WE'RE ACTUALLY, UH, WE'LL BE SPENDING SOME OF SOME OF THAT DOWN, UM, AS WE WORK TO AGAIN, PLAN FOR YOUR GROWING CAPITAL SPENDING PLAN, WE'RE WORKING AS OUR, UH, CAPITAL SPENDING PLAN GROWS.

IT'S, IT'S, IT'S HARDER TO, TO MEET OUR, UM, OUR FINANCING, OUR CASH FINANCING PERCENTAGE.

WE, WE TARGET BETWEEN 35 AND 50% CASH FINANCING WITH THE REMAINDER BEING DEBT FINANCED OF OUR CAPITAL PROGRAM.

AND SO AS OUR CAPITAL SPENDING PLAN GROWS, IF, UH, BECOMES MORE OF A CHALLENGE TO DO THAT.

AND SO WE'LL BE SPENDING DOWN A LITTLE BIT OF, UH, THE, THE FUND BALANCE INCREASE THAT WE'LL SEE THIS YEAR FOR NEXT YEAR TO, TO BE ABLE TO TRY AND REDUCE THE AMOUNT THAT WE'RE FINANCING AGAIN.

AND THAT'S ONE OF THE THINGS THAT, THAT WE'VE BEEN DOING, UM, OVER THE LAST SEVERAL YEARS, UM, YOU KNOW, TO CONTROL OUR, OUR, OUR DEBT SERVICE COSTS.

UH, YOU CAN SEE IN TERMS OF, OF, OF DEBT SERVICE COVERAGE, EVEN BEFORE YOU ANY FUTURE RATE INCREASES, UM, WE ANTICIPATE DEBT SERVICE COVERAGE OF 1.76, WHICH IS JUST ABOVE OUR FINANCIAL POLICY LEVEL OF 1.75, UM, IN TERMS OF OUR CASH FINANCING OF CIP, YOU KNOW, WITH THAT SUPPLEMENT, WE EXPECT TO BE, YOU KNOW, CLOSER TO 38% WHERE WE THINK WE'RE GOING TO END THE YEAR, UM, AROUND 33%.

UM, AND THAT'S BECAUSE WE'VE HAD, UM, SOME, UH, UNANTICIPATED PROJECTS IN THE CURRENT YEAR THAT PUT US BELOW YOUR 35% TARGET.

UM, AND THEN WE THINK WE'LL, WE'LL CONTINUE TO MAINTAIN STRONG LEVEL OF CASH ON HAND.

UM, SO, AND, AND THAT CONCLUDES MY PRESENTATION AND BE HAPPY TO ANSWER ANY QUESTIONS.

COMMISSIONER, WHO'S GOT ANY QUESTION FOR STUFF, UH, COMMISSION MUST WORK.

UM, I WAS JUST WONDERING ABOUT THE FTES, THE, WHAT WOULD THE NINE OPERATIONAL OPTIMIZATION FTES BE DOING AND THE EIGHT CUSTOMER SATISFACTION? OKAY.

I TALKED ABOUT, UH, SOME OF THEM, FIVE OF THEM ARE THE, UH, STREET AND BRIDGE, UM, CREW TO SUPPORT OUR STREET CUT PROGRAM TO REDUCE OUR STREET CUT BACK LOG.

UM, LET'S SEE, UH, THERE'S, UM, AN IT SYSTEMS CONSULTANT, UH, TO ENHANCE OUR, OUR MOBILE WORKFORCE, UH, UH, PROGRAM, UM, MAKING TECH, NEW TECHNOLOGY MORE AVAILABLE FOR, FOR OUR CREWS OUT IN THE FIELD.

UM, AND, AND, UM, SO THAT THEY CAN WORK MORE EFFICIENTLY.

UH, I'VE GOT ANOTHER, UM, IT SUPPORT ANALYST, UH, TO, TO IMPROVE OUR HARDWARE AND SOFTWARE SUPPORT.

UM, AND THEN, UH, A PROJECT COORDINATOR, UM, FOR WATERFORD, I DON'T HAVE THE NOTES ON THAT ONE IN TERMS OF, UM, HOW IT, HOW IT IMPROVES, YOU KNOW, OUR, OUR OPERATIONAL, UM, ENHANCEMENTS.

UH, BUT, BUT THOSE ARE, THOSE ARE THE NINE POSITIONS, UM, FOR OP OPERATIONAL OPTIMIZATION.

YOU ASKED ALSO ABOUT, UH,

[01:05:02]

CUSTOMER SERVICE CUSTOMER SATISFACTION.

OKAY.

OKAY.

SECOND ONE CUSTOMER SATISFACTION.

UM, I MENTIONED, UH, TWO POSITIONS, UM, TO ENHANCE OUR, OUR, OUR DISPATCH OPERATION, UH, A MANAGER OF CONSUMER SERVICES AND AN OPERATIONS MANAGER OF OVER DISPATCH.

UM, LET'S SEE, UM, ALSO IN, IN CUSTOMER, IN CUSTOMER EXPERIENCE PROGRAM AREA, A PUBLIC INFORMATION AND MARKETING PROGRAM MANAGER TO, UH, OVERSEE, UM, YOU KNOW, CUSTOMER OUTREACH AND CUSTOMER RELATIONS, UH, WATER QUALITY SCIENTISTS, SR, UH, TO SUPPORT, UH, SAMPLING REQUIREMENTS FOR, FOR LEAD AND COPPER, UH, SERVICES.

LET'S SEE A BUSINESS PROCESS CONSULTANT TO, UM, TO OVERSEE, UM, YOU KNOW, OUR, UM, SEVERAL PROCESSES, INCLUDING, YOU KNOW, PUBLIC INFORMATION REQUEST PROCESS, UM, AND, AND, AND RECORDS MANAGEMENT AND AVAILABILITY, UH, CUSTOMER ENGAGEMENT SPECIALIST PICK THAT'S THAT'S THE EIGHT.

OKAY.

THANK YOU.

I WAS JUST SHOCKED BY THE 47 FTES AND A LOT.

SO, UM, IT IS, YOU KNOW, IT'S, AGAIN, IT'S, IT'S, IT'S AN INVESTMENT IN, UM, YOU KNOW, IN, IN, UM, MANY OF OUR EFFECTIVE UTILITY MANAGEMENT, UH, YOU KNOW, FOCUS AREAS.

UM, BUT IT'S, IT'S ACTUALLY SMALLER THAN LAST YEAR.

AND IT ALSO INCLUDES THREE FTES, UH, THAT ARE FUNDED BY A DEVELOPMENT SERVICES DEPARTMENT THAT I DIDN'T MENTION, UM, TO IMPROVE, YOU KNOW, AS PART OF THE CITY'S OVERALL, UH, EFFORTS FOR X EXPEDITED DEVELOPMENT REVIEW PROCESS.

SO, UM, 43 OF THE THREE OF THE POSITIONS ARE FUNDED BY DEVELOPMENT SERVICES AND THE REMAINING 44 ARE FUNDED BY AUSTIN WATER OPERATIONS.

OKAY.

THANK YOU.

I HAD NO MORE QUESTIONS.

I ECHO YOUR CONCERN BECAUSE ONE YEAR WE WOULDN'T NEED TO SPEND ALL THE MONEY ON SOFTWARE SO WE CAN MAKE THAT USE OUR MANPOWER.

SO THE FTD WILL BE REDUCED THE NEXT YEAR IT'S COMING BACK AND IT'S CUSTOMER SERVICE, OR WE JUST FEEL IT IN THE VACANCIES.

THAT'S THE MANAGEMENT'S RESPONSE, UH, WHICH I AM NOT A HUNDRED PERCENT AGREE ON IT.

OKAY.

ANY OTHER QUESTIONS FOR THE PRESENTATION? IF NOT, WE'LL GO BACK.

YOU STILL HAVE A CHANCE TO ASK QUESTIONS WHEN YOU GO BACK TO ITEM 14, LET'S MOVE ON TO ITEM

[16. Approve the minutes of the May 26, 2022 Budget Committee meeting. (Budget Committee only)]

16, APPROVE THE MINUTES OF THE MAY 26TH, 2022 BUDGET COMMITTEE MEETING.

AND WE WILL ASK VICE CHAIR OF THE BUDGET COMMITTEE, CHAIRMAN, MICHELLE, TO GIVE US AN UPDATE.

IT'S YOURS.

THANK YOU, JEREMY, UH, COMMISSIONERS, YOU SHOULD HAVE RECEIVED A COPY OF A BUDGET COMMITTEE REPORT FROM STAFF.

UH, THAT REPORT WAS DEVELOPED, UH, BY OUR CHAIRS.

WHO'S INTERIOR YETTA WITH INPUT FROM MYSELF, AS WELL AS, UH, COMMISSIONERS FISHER AND PEN.

UM, OUR COMMITTEE REPORT IS SIMILAR IN FASHION TO REPORTS.

WE'VE GENERATED THE PAST COUPLE OF YEARS.

UM, IF YOU'LL RECALL, WE MET WITH STAFF BACK IN APRIL AND MAY, UM, VISITING, UH, ABOUT THE PROPOSED BUDGET.

I WOULD SAY WHAT THE INFORMATION PRESENTED THIS EVENING.

UH, NO SURPRISES, NO SIGNIFICANT CHANGES FROM WHAT STAFF HAD PRESENTED TO US BACK IN APRIL AND MAY, AND MANY OF THE, UH, THEMES IN OUR REPORT OR HIGHLIGHTED TONIGHT BY THE PRESENTATION.

A COUPLE OF BULLETS THAT ARE SUMMARIZED IN OUR REPORT.

FIRST IS RESILIENCY, UH, CONTINUES TO BE A BIG THEME OF, UH, O AND M RELATED, UH, FOCUS.

UM, WE HEARD TONIGHT ABOUT THE CONTINUED, UM, AT DEPTH DEFEASANCE STRATEGIES AND OUR, UH, FISCAL APPROACH TO MANAGING OUR DEBT.

UM, AS, UH, INTERIM DIRECTOR DID MENTIONED THAT WE TOUCH ON THAT THE, UM, DEPARTMENT DOES NOT HAVE ANY PROPOSED RATE INCREASES FOR THIS FISCAL YEAR.

UM, WE TOUCH ON THE ECONOMY

[01:10:01]

AND SOME OF THE CHALLENGES, UM, THAT WE'RE SEEING IN THE MARKETPLACE, UM, AND HOW WE CONTINUE TO MANAGE, UH, AND PREPARE FOR THOSE CONTINUED CHALLENGES, WHETHER IT'S, UM, CHALLENGES WITH MATERIALS OR MATERIAL COSTS, UH, AND CERTAINLY CHALLENGES WITH STAFFING, UM, AND THE 47 FTES, UM, AND THE CONTINUED NEED TO FOCUS ON, UM, THE HUMAN CAPITAL.

UM, OVERALL, LIKE I SAID, NO SIGNIFICANT CHANGES TO WHAT WE HEARD EARLIER THIS YEAR FROM STAFF AND WHAT WE WERE EXPECTING BASED ON WHAT'S HAPPENING IN THE MARKET, WHAT'S HAPPENING WITH THE ECONOMY AND THE CONSTRUCTION INDUSTRY.

UM, THE BUDGET OVERALL, UM, MEETS THE EXPECTATIONS OF CITY MANAGER AND THAT THE OVERALL FISCAL POLICIES DEVELOPED FOR, UH, CITY DEPARTMENTS.

AND, UM, THOSE WERE ALL WERE RECOMMENDING APPROVAL OF THIS BUDGET WITH THAT ALL TAKE ANY QUESTIONS.

UM, I'M SO SORRY.

YOU Y'ALL HEAR ME.

OKAY.

UM, UH, VICE CHAIR, MICHELLE.

I AM SO SORRY.

UH, ITEM 16 IS, UH, THE BUDGET COMMITTEE MEETINGS, AND THAT IS, UH, FOR BUDGET COMMITTEE MEMBERS TO VOTE, UM, WITH, UM, CHAIR TREE, GET ABSENT.

WE ONLY NEED THREE MEMBERS TO VOTE.

THERE ARE THREE BUDGET COMMITTEE MEMBERS AVAILABLE.

SO IF, UM, YOU CAN TAKE UP THE BUDGET COMMITTEE, UM, MINUTES OF THE LAST MEETING ON MAY 26, JUST SO WE DON'T HAVE IT HANGING UNTIL NEXT YEAR.

IF, IF, UH, YOU CAN ASK FOR A MOTION FOR THE MEETING MINUTES, AND THEN, UH, THE BUDGET COMMITTEE REPORT WILL, UH, WILL, UH, BE TAKEN UP SEPARATELY.

I AM SO SORRY FOR THE CONFUSION.

SO I'M, UH, BUDGET VICE CHAIR, MICHELLE, IF YOU CAN OPEN FOR, TO, TO REQUEST A MOTION ON THE BUDGET COMMITTEES MINUTES, PLEASE DID, DID Y'ALL HEAR ME? NO.

HELLO? IS MY SOUND COMING IN AT ALL? OKAY.

UH, I'M SO SORRY FOR THE CONFUSION.

SO I WAS SAYING THAT THE BUDGET COMMITTEE MEETING MINUTES ARE PENDING AND AS, UH, THE VICE CHAIR OF BUDGET COMMITTEE, UM, MR. MICHELLE, IF YOU CAN OPEN, REQUESTING A MOTION FOR THE PASSAGE OF THE MEETING MINUTES.

THANKS.

MY APOLOGIES ITEM 16 APPROVED THE MINUTES OF THE MAY 26TH, 2022 BUDGET COMMITTEE MEETING, UH, COMMISSIONERS, UM, LIKE TO TAKE ANY MOTIONS TO APPROVE THE MINUTES FROM THE MAY 26 MEETING, I'LL MAKE A MOTION TO APPROVE THE MINUTES.

SECOND, WE HAVE A MOTION AND A SECOND, IS THERE ANY FURTHER DISCUSSION, IF NOT BY SHOW OF HANDS, UM, ALL THOSE IN FAVOR, ANY MOTION CARRIES UNANIMOUSLY.

THANK YOU.

OKAY.

LET'S MOVE BACK TO ITEM

[17. Approve the proposed Budget Committee Report (full Water and Wastewater Commission)]

17.

APPROVE THE PROPOSED BUDGET COMMITTEE REPORT, AND I BELIEVE VICE CHAIR CASTLEVANIA GOT A QUESTION.

I DID HAVE A QUESTION FOR COMMISSIONER MICHELLE ON THE, ON THE BUDGET SUMMARY UNDER THE OPERATIONS, IT HAS, UM, THE 1.6 MILLION INCREASE IN FINANCIAL CONSULTANT SERVICES TO SUPPORT THE UPCOMING RATE FILING.

WHAT IS THE UPCOMING RATE FILING? I CAN, I CAN ANSWER THAT.

UM,

[01:15:01]

AS, AS A DIRECTOR, GOOD MENTIONED, UH, YOU KNOW, WE ARE WORKING TOWARDS GETTING AN UPDATED COST OF SERVICE, UH, STUDY, UM, TO, TO EVALUATE THE NEED FOR A FUTURE RATE INCREASE.

UM, SO, SO THAT 1.6 COVERS UH, COST OF SERVICE RATE CONSULTANT.

UM, IT WOULD COVER A RESIDENTIAL RATE ADVOCATES, ALL OF THE COSTS ASSOCIATED WITH, WITH, UH, REVIEWING AND UPDATING OUR RATES IN ADVANCE OF NEXT YEAR THEN.

OKAY.

I WAS WANTING TO JUST CLARIFY THAT IT, AND THEN CAN I ASK ONE MORE QUESTION? THE, UH, 621,000 INCREASE FOR ECONOMIC DEVELOPMENT TRANSFER, WHICH IS 23% INCREASE.

WHAT IS THAT? SO THE VERSION YOU HAVE, UH, HAD HAD A TYPO IN IT THAT THAT'S, UM, UH, PREVIOUS, UH, THE INITIAL DRAFT THAT WE SENT OUT, UM, THAT 623,000, UH, WAS LAST YEAR'S NUMBER.

IT REPRESENTED THE $600,000 INCREASE, UM, IN THE ECONOMIC DEVELOPMENT TRANSFER, UH, TO SUPPORT THE ECONOMIC DEVELOPMENT DEPARTMENT, UM, YOU KNOW, AS, UH, AUSTIN ENERGY, AUSTIN WATER, AND OTHER ENTERPRISE DEPARTMENTS, UH, SUPPORT THAT ACTIVITY.

UM, AS WE BENEFIT FROM, YOU KNOW, UH, BRINGING IN, UH, NEW COMPANIES IN, INTO THE AUSTIN AREA AND ULTIMATELY SERVING, SERVING THEM AS, AS CUSTOMERS.

UH, BUT WITH THAT NUMBER, UM, WE, WE TOOK THAT NUMBER OUT IN THE FINAL DRAFT, UM, BECAUSE THAT'S LAST YEAR'S NUMBER FOUR FOR FISCAL YEAR 23.

UH, WE ACTUALLY SAW ABOUT A $34,000 REDUCTION IN THE ECONOMIC DEVELOPMENT TRANSFER COMMISSIONER GOT ANY MORE QUESTIONS FOR STAFF OR BUDGET COMMITTEE? IF NOT, WE WILL ENTERTAIN A MOTION FOR THE COMMITTEE BUDGET COMMITTEE REPORT.

I'LL MAKE A MOTION MOTION MADE BY VICE CHAIR, PERRY AND SECOND BY COMMISSIONER MICHELLE, ALL IN FAVOR, PLEASE RAISE YOUR HAND IN THE SHOW IN APPROVE AND EMISSARIES.

THANK YOU VERY MUCH.

UH, WE WILL MOVE ON

[18. Approve Austin Water’s Capital Improvement Projects located in the Drinking Water Protection Zone for inclusion in Austin Water’s five-year Capital Spending Plan (for Fiscal Year 2023 through Fiscal Year 2027) as required by Financial Policy Number 8.]

TO ITEM 18 APPROVED AUSTIN WATERS, CAPITAL IMPROVEMENT PROJECTS LOCATED IN THE DRINKING WATER PROTECTION ZONE FOR INCLUSION IN AUSTIN WATERS.

FIVE-YEAR CAPITAL SPEND IMPRINT FOR FISCAL YEAR 2023 THROUGH FISCAL YEAR 2027 AS REQUIRED BY FINANCIAL POVERTY SHEET.

NUMBER EIGHT, WE SHOULD.

WE GOT ANY QUESTIONS FOR THE STAFF, IF NOT WE'LL ENTERTAIN MOTION, CHIPPER MOTION, MOTION, MOTION MADE BY VICE CHAIR CASTLEBERRY AND THE SECOND BY COMMISSIONER MOSQUES GLOBE.

OH, IN WAIVER, PLEASE RAISE YOUR HAND SHOWING A POOL AND ETHNICITIES.

THANK YOU VERY MUCH.

NOW WE GO

[14. Recommend approval of Austin Water’s Fiscal Year 2022-2023 Proposed Operating Budget, Capital Budget, new appropriations, and 5-Year Capital Improvement (CIP) spending plan.]

BACK TO ITEM 14, RECOMMEND APPROVAL OF AUSTIN WATERS, FISCAL YEAR 2022 THROUGH 2023 PROPOSED OPERATING BUDGET, CAPITAL BUDGET, NEW APPROPRIATIONS, AND FIVE-YEAR CAPITAL IMPROVEMENT, XI IIP SPENDING PLAN, COMMISSIONER SCOTT, ANY FINAL QUESTIONS? ANY MORE QUESTIONS? IF NOT, WE'RE IN 10 MOTION, I'LL MOVE APPROVAL MOTION MADE BY COMMISSIONER PENN, SECONDED BY COMMISSIONER MOSQUES, GLOBE ALL IN WEBER.

PLEASE RAISE YOUR HAND, SHOWING A POOL, ARAMIS, THESE THANK YOU VERY MUCH.

NOW LET'S MOVE TO ITEM

[19. Approve the 2021-2022 Annual Internal Report of the Water and Wastewater Commission.]

19 APPROVED THE 20 21 20 22, ANY INTERNAL REPORT OF THE WATER AND WASTEWATER COMMISSION.

AND I BELIEVE COMMISSIONER YOU'LL HAVE A CHANCE TO LOOK AT THAT DRAFT STUFF THERE WITH THE HIGHLIGHTED BY THE STUFF.

IS THERE ANY OTHER QUESTIONS OR ANY AMENDMENT? IF NOT, WE'LL IN PUTIN IN MOTION, I'LL MAKE THE MOTION TO APPROVE IT.

ONLY NEED, IS THERE A SECOND, SECOND, SECOND BY VICE CHAIR, CASTLEBERRY ALL IN FAVOR, PLEASE RAISE YOUR HAND SHOWING APPROVE AND MSD.

THANK YOU VERY MUCH.

[01:20:05]

OH, LET'S GO TO ITEM

[20. Update from Joint Sustainability Committee – Commissioner Christy Williams]

20.

UPDATE FROM THE JONES SUSTAINABILITY COMMITTEE, COMMISSIONER WILLIAMS. UNFORTUNATELY I WAS OUT OF THE COUNTRY DURING THIS LAST MONTH'S MEETING, SO I WAS NOT ABLE TO ATTEND, BUT THE AGENDA AND WORK BACK UP OUR ONLINE.

OKAY.

THANK YOU FOR YOUR UPDATE.

WE WILL MOVE ON TO ITEM 21, BUT COMMISSIONER OUT IS NOT HERE, SO WE WILL SKIP IT.

AND NOW WE WILL MOVE TO

[23. Staff briefing regarding water supply]

ITEM 23 STAFF BRIEFING REGARDING WATER SUPPLY.

ALRIGHT, ONE MORE TIME.

ALL RIGHT.

GOOD EVENING.

CHEERLY AND COMMISSION MEMBERS, KEVIN CRITTENDON, ASSISTANT DIRECTOR, AUSTIN MATER, UM, WHILE HUNT AND DRY IS NOT UNCOMMON FOR THIS PART OF THE WORLD.

UM, WE ARE, UH, IF WE FIND OURSELVES UNUSUALLY HOT AND DRY, EVEN FOR TEXAS AND EVEN FOR THE SUMMER.

SO THIS EVENING WE'LL BE PRESENTING A SHORT WATER SUPPLY OUTLOOK.

THAT'LL INCLUDE A, UH, AN OVERVIEW OF OUR CURRENT DROUGHT CONDITIONS AS WELL.

UM, WHILE WE'RE CURRENTLY EXPERIENCING DROUGHT CONDITIONS, I WILL POINT OUT THAT, UH, A LOT HAS HAPPENED SINCE THE LAST TIME THAT WE FOUND OURSELVES IN DROUGHT.

UM, WE HAVE A VERY WELL-DEVELOPED DROUGHT CONTINGENCY PLAN THAT INCLUDES DROUGHT STAGE TRIGGERS AND LATER WATER CONSERVATION ACTIVITIES.

UM, OBVIOUSLY WE HAVE, UH, APPROVED OUR WATER FORWARD PLAN BACK IN 2018 AND CONTINUED TO WORK ON IMPLEMENTATION OF ASPECTS OF THAT.

UM, AND THEN ALSO THE LOWER COLORADO RIVER AUTHORITY HAS UPDATED ITS WATER MANAGEMENT PLAN SINCE THAT TIME, WHICH WE EXPECT A LOT OF THOSE CHANGES TO HAVE VERY BENEFICIAL OUTCOMES, SORT OF WHERE WE'RE AT RIGHT NOW.

SO IN THE COMING MONTHS, WE'LL CONTINUE TO, UH, OBVIOUSLY MONITOR THE WEATHER AND THE WATER SUPPLY CONDITIONS.

UM, WE'RE GOING TO WORK TO CONTINUE THAT WATER CONSERVATION REMAINS ON TOP OF EVERYONE'S MIND AND OUR COMMUNITY, AND ALL OF OUR CUSTOMERS, UH, WILL CONTINUE TO PROMOTE WATER CONSERVATION PROGRAM OFFERINGS AND OUR ENFORCEMENT WORK.

AND THEN WE'LL CONTINUE OUR PROGRESS ON IMPLEMENTING WATER FORWARDS STRATEGIES.

SO WITH ME TONIGHT AS TERESA LEWIS, SHE'S THE MANAGING ENGINEERING DIVISION MANAGER OVER OUR SYSTEMS PLANNING DIVISION.

THAT INCLUDES BOTH OUR WATER AND WASTEWATER INFRASTRUCTURE MODELING AND PLANNING SIDE, BUT THAT ALSO INCLUDES OUR WATERFORD AND OUR WATER SUPPLY PLANNING.

SO WITH THAT, I'LL TURN IT OVER TO TRICIA.

SHE'LL GO THROUGH AND THEN WE'LL BE AVAILABLE TO ANSWER QUESTIONS.

THANK YOU VERY MUCH.

UH, AGAIN, THERESA LUTES OF SYSTEMS PLANNING, DIVISION MANAGER, APPRECIATE THE APPRECIATE THE OPPORTUNITY TO PRESENT TODAY.

NEXT SLIDE, PLEASE.

UM, WANT TO SHOW YOU JUST SOME, UM, OF THE METRICS AND, UH, PIECES OF INFORMATION THAT WE'RE CONTINUALLY TRACKING, LOOKING AND MONITORING AS WE MONITOR OUR WATER SUPPLY, UM, CONDITIONS AND, AND, UH, ESPECIALLY IN, IN DROUGHT, LIKE WE'RE IN NOW, THIS IS A GRAPH OF THE COMBINED STORAGE OF LIKES TRAVIS AND MCCANNON.

THOSE WERE THE KEY WATER STORAGE RESERVOIRS FOR OUR BASIN, UH, LOWER COLORADO RIVER AUTHORITY, UH, MANAGES AND OPERATES THESE RESERVOIRS.

SO THIS, AGAIN, THIS IS THE COMBINED STORAGE OF BOTH OF THOSE RESERVOIRS WHEN THE FULL, THOSE ARE BOTH, UM, UH, TOTAL ABOUT 2 MILLION ACRE FEET OF WATER.

UH, AND SO CURRENTLY WE'RE AT ABOUT 1.2 MILLION ACRE FEET, WHICH IS ABOUT A 60% FULL CONDITION.

NEXT SLIDE.

THIS IS A GRAPH OF THE INFLOWS TO THOSE HIGHLAND LAKES.

THE, THIS IS ANOTHER KEY METRIC WHERE WE LOOK AT THE BASIN CONDITIONS, HOW MUCH WATER IS FLOWING INTO THOSE LAKES.

UM, OF COURSE, LCRA TRACKS THIS VERY CLOSELY.

THEY HAVE GAUGES ON THE INPUT POINTS AND WE MONITOR THAT AS WELL.

WE USE THE INFORMATION THAT LCRA COLLECTS AND WE MONITOR THAT CLOSELY AS WELL.

THIS SHOWS HOW DRY IT'S BEEN.

YOU CAN SEE THE, THE, UH, THE BARS, THE GREEN BARS ARE FOR, UH, 20, 22 THAT'S THIS YEAR.

THEY'VE BEEN TRACKING VERY LOW, EVEN LOWER THAN THE BEGINNING OF, UH, 2021, WHICH WAS ANOTHER RELATIVELY LOW YEAR.

YOU CAN SEE, UH, THE IN GOLD BARS THAT WAS 2021 FOR REFERENCE ALSO FOR REFERENCE IS THE AVERAGE OF 2008 THROUGH 2015.

THAT PERIOD IS SIGNIFICANT BECAUSE IT'S THE NEW DROUGHT OF RECORD FOR OUR

[01:25:01]

BASIN, WHICH IS THE PLANNING METRIC THAT WE DO A WATER PLANNING BY, IN THE BASIN TO COMPARE, UH, YOU KNOW, OUR FLOWS TO, TO SEE HOW WE'RE TRACKING RELATIVE TO THE DROUGHT OF RECORD.

AND SO YOU CAN SEE THAT'S THOSE BARS THERE, THEY'RE KIND OF A DARK BLUE THERE, THE AVERAGE, UH, THAT WE RECEIVED DURING THAT DROUGHT OF RECORD PERIOD, AND THEN THE OTHER BARS, THE FAR LEFT, THE, THE LIGHTER BLUE ARE THE AVERAGE NUMBERS FROM 1942 WHEN THE LAKES WERE COMPLETE AND, UM, STARTED FILLING OR RIGHT AROUND THAT TIME TO PRESENT.

SO THAT'S THE PERIOD OF RECORD.

SO AGAIN, YOU CAN SEE WE'RE TRACKING VERY LOW, WE'RE CONTINUING TO MONITOR THIS AND, UM, AND, UH, IT, IT, THESE INFLOWS REALLY REFLECT THE VERY DRY CONDITIONS WE'VE HAD IN THE BASIN, VERY, UH, HIGH AMOUNT OF, UM, UH, DRY AND, AND HEAVY HIGH TEMPERATURES FOR THE, THE PERIOD.

NEXT SLIDE, PLEASE.

THIS IS THE, UH, TEXAS DROUGHT MONITOR MAP THAT YOU MAY HAVE SEEN BEFORE.

THIS IS, UH, THIS IS A PARTICULAR VERSION OF IT THAT THE TEXAS WATER DEVELOPMENT BOARD UPDATES WEEKLY.

AND, UM, AND YOU CAN SEE THERE, WE HAVE HIGHLIGHTED, UH, TRAVIS COUNTY.

THEY'RE KIND OF IN THE CENTER WITH THE BLUE, UH, BLUE CIRCLE AROUND THERE, KIND OF HIGHLIGHTING WHERE WE ARE.

YOU CAN SEE THE, UM, HIGH DEGREE OF EXCEPTIONAL AND EXTREME DROUGHT CONDITIONS, ESPECIALLY IN