Jul 17, 2024 Water and Wastewater Commission

COMMISSIONER MUSGROVE? NO QUESTIONS.

COMMISSIONER PEN DURRANI? NO QUESTIONS.

NO RECUSALS.

NO RECUSALS.

COMMISSIONER MORIARTY? NO QUESTIONS.

NO RECUSALS AND COMMISSIONER RIETTA? NO QUESTIONS.

NO RECUSALS.

I MAKE A, I MAKE A MOTION TO, UH, TO APPROVE IT.

AND THEN I HAVE RECUSALS ON ITEMS TWO AND SIX.

MY COMPANY IS A DESIGN ENGINEER ON THAT PROJECT.

AND THEN I'M ALSO GOING TO POLL ITEMS 14 AND 15 BECAUSE THERE'S PRESENTATIONS ON THOSE ITEMS AND WE'LL VOTE ON THOSE AFTER WE'VE HEARD THE PRESENTATION.

ALRIGHT, SO LOOKING AT THE CONSENT AGENDA, I HAVE ITEMS 3, 4, 5, 7, 8, 9, 10, 12, AND 13.

SO, COMMISSIONERS, UH, BEFORE WE TAKE THAT VOTE, IS THERE ANY OTHER DISCUSSION? DID I MISS ONE? I HAVE A QUESTION ON 13.

ISN'T THAT JUST A REPORT? UH, HAVE WE SEEN THE REPORT? ARE WE, IT SAYS APPROVED THE ANNUAL INTERNAL REPORT.

HAVE YOU SEEN THAT? YES.

IT'S IN, UM, YOUR, YOUR PACKET.

UH, DO I HAVE A MOTION?

[00:05:04]

COMMISSIONER PAN DURRANI MAKES A MOTION TO APPROVE THE CONSENT AGENDA.

DO I HAVE A SECOND? I'LL SECOND IT.

COMMISSIONER GROBE SECONDS.

ALL THOSE VOTING TO APPROVE, PLEASE RAISE YOUR HAND.

AND WE, THE ITEM PASSES UNANIMOUSLY.

ITEM TWO, WHICH IS AN ITEM THAT I PULLED, UM, FOR MY RECUSAL.

UM, NEXT WE'LL COME BACK TO THE ITEMS, UH, THAT WERE PULLED.

AND WE'LL START WITH

[2. Recommend approval to execute a contract for construction services for the Bull Creek Basin Wastewater Renewal – CIPP project with DeNucci Constructors, LLC, in the amount of $6,854,549 plus a $685,455 contingency for a total contract amount not to exceed $7,540,004. (District 10)]

SO I'M GONNA TURN OVER THE MEETING TO COMMISSIONER S.

ALRIGHT, THANK YOU.

UM, FOR ITEM NUMBER TWO, UM, GONNA SEE IF THERE'S ANY DISCUSSION.

ITEMS RECOMMEND APPROVAL TO EXECUTE A CONTRACT FOR CONSTRUCTION SERVICES FOR THE BULL CREEK BASIN WASTEWATER RENEWAL CIP PROJECT WITH DENUCCI CONSTRUCTORS LLC IN THE AMOUNT OF $6,854,549 PLUS A 685,455, UH, DOLLARS CONTINGENCY FOR A TOTAL CONTRACT AMOUNT NOT TO EXCEED $7,540,004 OUTSIDE OF DISTRICT 10.

ALRIGHT, I'LL GO AHEAD AND ASK IF THERE'S, UH, ANY DISCUSSION, ANY QUESTIONS, SIR, IF THERE'S NO DISCUSSION, YOU CAN, UM, ASK FOR A COMMISSIONER TO MAKE A MOTION.

UH, I'D LIKE TO ASK IF THERE'S A MOTION FOR THIS.

I MOVE TO APPROVE, UM, ITEM NUMBER TWO.

ITEM NUMBER SIX, RECOMMEND APPROVAL TO EXECUTE A CONTRACT FOR THE JOHNNY MORRIS HIGHWAY TWO 90 AREA WATERLINE EXTENSIONS PROJECT WITH CASH CONSTRUCTION COMPANY, INC.

AND ASK FOR A SECOND.

UM, SECOND.

ALL RIGHT.

UM, WE GOT A MOTION TO SECOND THAT.

UM, SHOW OF HANDS.

UM, ALL THOSE IN FAVOR, ITEM NUMBER TWO PASSES, UH, WITH COMMISSIONER PENN RECUSING AND MOVE ON TO

[6. Recommend approval to execute a contract for the Johnny Morris/Hwy 290 Area Water Line Extensions project with Cash Construction Company Inc., in the amount of $1,929,742 plus a $192,974 contingency for a total contract amount not to exceed $2,122,716. (District 1, ETJ)]

IN THE AMOUNT OF 1,929,700 $742 PLUS A $192,974 CONTINGENCY FOR A TOTAL CONTRACT AMOUNT NOT TO EXCEED $2,122,716 OUTTA DISTRICT ONE ETJ.

ASK IF THERE'S ANY QUESTIONS, DISCUSSION ITEMS FOR THAT.

OKAY, I MOVE TO APPROVE ITEM SIX.

ASK FOR A SECOND.

I'LL SECOND IT.

ALL RIGHT.

ALL THOSE IN FAVOR AND SHALL HANDS.

LOOKS LIKE THAT.

ITEM NUMBER SIX IS APPROVED WITH COMMISSIONER PENN, UH, RECUSING.

THANK YOU VERY MUCH.

WE ARE NOW

[11. Recommend approval of an ordinance regarding Undine, LLC’s proposal to increase water and wastewater rates for its customers located in the City’s corporate limits in the area known as Greenshores on Lake Austin.]

MOVING ON ITEM NUMBER 11, WHICH IS TO RECOMMEND APPROVAL OF AN ORDINANCE REGARDING UNDYING LLCS PROPOSAL TO INCREASE WATER AND WASTEWATER RATES FOR ITS CUSTOMERS LOCATED IN THE CITY, CORPORATE LIMITS IN THE AREA KNOWN AS GREEN SHORES ON LAKE AUSTIN.

THIS ITEM, THERE WAS A INITIAL QUESTION FROM COMMISSIONER REYES.

YES.

UH, SO THE QUESTION THAT I HAD IS JUST MORE OF A CLARIFICATION ON THE LANGUAGE.

ON ITEM NUMBER 11, UH, THE PROPOSAL WAS TO INCREASE WATER AND WASTEWATER RATES FOR ITS CUSTOMERS.

BUT AS YOU LOOK INTO THE ITEM DOCUMENTATION, IT SPECIFIES IN THE LAST PARAGRAPH, UH, THAT AUSTIN WATER STAFF RECOMMENDS APPROVAL OF THE PROPOSED WATER RATE, WATER RATE INCREASE, BUT RE RECOMMENDS DENIAL OF THE WATER RATE, UH, PROPOSAL.

JUST WANTED TO GET CLARIFICATION ON THAT LANGUAGE.

YES.

SO, SO STAFF'S RECOMMENDATION IS, AS, AS YOU INDICATED, IS, UH, TO, TO RECOMMEND APPROVAL OF THE PROPOSED WATER INCREASE, BUT RECOMMEND DENIAL OF THE WASTEWATER INCREASE, WHICH IS, UH, ROUGHLY 66%.

UM, SO OUR, OUR RECOMMENDATION WOULD BE TO PHASE

[00:10:01]

IN A, UH, RATE INCREASE THAT LARGE.

UM, BUT THE ITEM ITSELF IS A RECOMMENDATION TO COUNSEL TO ADOPT AN ORDINANCE, UM, BASED ON STAFF'S RECOMMENDATION.

AND SO THE ORDINANCE WOULD READ, YOU KNOW, RECOMMENDING APPROVAL OF THE WATER AND DENIAL OF, OF THE WASTEWATER RATE INCREASE.

AND, AND SO YOU ARE BEING ASKED TO, UM, RECOMMEND THE RCA, WHICH WOULD BE BASED ON STAFF'S RECOMMENDATION, UH, WHICH IS SPLIT BETWEEN WATER AND WASTEWATER APPROVING WATER, BUT DENYING THE WASTEWATER INCREASE.

DOES THAT MAKE YES.

THANK YOU FOR THE CLARIFICATION.

SURE.

UM, ANY OTHER COMMISSIONERS HAVE ANY QUESTIONS OR DISCUSSION ON THIS ITEM? UM, WELL, I DID ALSO WANT TO, TO CLARIFY THAT AS PART OF THE, UM, THE FILING, UM, INE, UH, YOU KNOW, MADE OF A FILING WITH THE CITY OF AUSTIN FOR THE SIX CUSTOMERS WITHIN, UH, THEIR SERVICE TERRITORY THAT ARE WITHIN THE CITY OF AUSTIN CITY LIMITS.

UM, AT THE SAME TIME, THEY FILED A RATE CASE WITH THE PUBLIC UTILITY COMMISSION OF TEXAS, UM, WHO HAS AUTHORITY OVER THE REMAINING CUSTOMERS.

UM, AND, YOU KNOW, THEY'RE, UH, BOTH WITHIN GREEN SHORES, UM, BUT, BUT ALSO OTHER SYSTEMS WITHIN THEIR, THEIR SERVICE TERRITORIES.

UM, AND LAST WEEK, THE PUBLIC UTILITY COMMISSION OF TEXAS, UH, ADOPT OR CITED WITH STAFF WHO SAID THAT THE FILING WAS INCOMPLETE, THAT IT HA, YOU KNOW, WAS NOT A VALID TEST YEAR.

OUR REVIEW DID NOT LOOK AT THE VALIDITY OF, OF THE TEST YEAR.

UM, BUT WHAT THAT LIKELY MEANS IS, WELL, UNDYED WILL EITHER HAVE TO REFILE BASED ON A NEW TEST YEAR OR WITHDRAW COMPLETELY AND, AND REFILE.

SO THE CASE, WE, WE EXPECT THE CASE WILL BE PROLONGED AS UNDYED FIGURES OUT, UM, YOU KNOW, DO THEY WANT TO AMEND THEIR FILING OR DO THEY WANT TO WITHDRAW AND, AND REFILE, UM, ALL THAT'S TO SAY, UH, THAT EVEN WITH, WITH OUR RECOMMENDATION THAT IT WILL LIKELY NOT PROCEED UNTIL THE PUC PROCESS, UH, HAS MORE CLARITY.

AND JUST TO CLARIFY THAT THE PUC PROCESS AFFECTS BOTH THE WATER AND WASTEWATER SIDE, NOT JUST THE WASTEWATER? CORRECT.

VERY GOOD.

AND SHOULD ON DIME HAVE TO RESUBMIT THEN? THIS WOULD COME THROUGH AGAIN, IF, IF THEY WITHDRAW, WE WOULD EXPECT THEM TO FILE A NEW RATE CASE TO US AND TO THE PUC.

IF THEY AMEND, UM, THEN OUR ACTION WOULD, WOULD GO FORWARD AND, AND INE UM, INDICATED THAT THEY WOULD APPEAL OUR RECOMMENDATION IF, IF COUNSEL ADOPTS OUR, THE STAFF RECOMMENDATION THAT THEY WOULD APPEAL, UM, SO THAT THEY COULD JOIN THE CASE AT THE PUC.

JUST ONE MORE QUESTION.

SO THEN FROM A TIMING STANDPOINT, SHOULD WE WAIT FOR, TO SEE HOW WHAT THE P-U-C-P-U-C OF TEXAS SAYS BEFORE WE MOVE ON THIS? OR IS THIS LIKE THE RIGHT TIME TO MAKE THE RECOMMENDATION AND TAKE IT THROUGH COUNSEL? WE ARE PROCEEDING IN OUR STATUTORILY REQUIRED TIMELINE.

UM, YOU KNOW, BASED ON WHEN THEY FILED WITH US, THE, THE PUC DECISION CAME AFTER, UH, OUR MEETING WITH DYED STAFF, UM, AS STATUTORILY REQUIRED.

UM, SO WE WEREN'T AWARE, EVEN AT THAT TIME WHEN WE MADE OUR RECOMMENDATION, UH, WE, WE WERE AWARE THAT THE PC WAS TAKING UP THE ISSUE, BUT WE WERE NOT AWARE WHAT THEIR FINAL RECOMMENDATION WOULD BE.

UM, AND SO I WOULD SAY WE, WE MOVE FORWARD WITH OUR RECOMMENDATION AND, AND, YOU KNOW, CONTINUE TO FOLLOW AT, AT THE PUC.

WE MAY, IT MAY COME BACK TO US, OR IT MAY SHIFT ENTIRELY TO THE PUC.

NEXT INTO STAFF BRIEFINGS BEFORE WE GET INTO ANY MORE VOTING ITEMS.

ANY OTHER DISCUSSION OR QUESTIONS ON THIS ITEM? DO I HAVE A MOTION TO APPROVE? MOTION TO APPROVE MOTION BY COMMISSIONER SION TO APPROVE.

I SECOND IT.

SECOND BY COMMISSIONER PENI.

ALL THOSE IN FA IN FAVOR, PLEASE RAISE YOUR RIGHT HAND BY VOTING.

AND THE ITEM PASSES UNANIMOUSLY.

THAT WRAPS UP OUR, OUR AGENDA ITEMS. AND I BELIEVE WE'RE GONNA MOVE

[16. Staff briefing on Austin Water’s Proposed Fiscal Year 2024-2025 Budget]

[00:15:01]

AND THE FIRST STAFF BRIEFING IS, UH, AUSTIN WATERS PROPOSED FISCAL YEAR 20 24, 20 25.

BUDGET, UH, STAFF, UH, BRIEFING, GETTING .

WE CHANGED THE ORDER ON YOU.

JUST NEED TO TURN IT OFF YEP.

AND I, UH, REALIZE I, I NEGLECTED TO INTRODUCE MYSELF FOR THE LAST, UH, ITEM.

SO JOSEPH GONZALEZ, ASSISTANT DIRECTOR, UH, OVER FINANCIAL SERVICES WITH AUSTIN WATER.

AND, UH, TODAY WE'LL, UH, HAVE A PRESENTATION, AN OVERVIEW OF OUR PROPOSED BUDGET FOR FISCAL YEAR, UH, 25 AS PART OF, UH, THE PRESENTATION.

WE'LL, UH, COVER OUR RECENTLY COMPLETED COST OF SERVICE STUDY, UM, INCLUDING OUR ENGAGEMENT ACTIVITIES.

SO I'LL HAND IT OVER TO RANDY JENKINS TO, TO TALK ABOUT OUR, UH, CUSTOMER ENGAGEMENT ACTIVITIES.

UH, BUT I'LL START WITH, UH, AN OVERVIEW OF THE AGENDA AND, UM, AND THE PROPOSED BUDGET.

SO, SO TONIGHT, WE'LL, LIKE I SAID, WE'LL, WE'LL TALK ABOUT, UH, THE COST OF SERVICE OVERVIEW, TALK ABOUT THAT PROCESS.

RANDY WILL GO OVER, UH, COMMUNITY ENGAGEMENT AND, UM, YOU KNOW, WITHIN THE PROPOSED BUDGET, WE'LL HIGHLIGHT, UH, YOU KNOW, OUR SOURCES AND, AND USES OF FUNDS, OUR REVENUES AND EXPENDITURES, UH, GO OVER OUR CAPITAL IMPROVEMENT PLAN, UH, TALK ABOUT OUR CONTINUED DEBT MANAGEMENT ACTIVITIES, UM, AND THEN GO OVER BILL IMPACTS, UH, SPECIFICALLY RESIDENTIAL BILL IMPACTS.

UM, AND THEN, AND THEN, UH, END WITH, UH, BUDGET CONSIDERATIONS AND BUDGET AND COST DRIVERS THAT, UH, HAVE IMPACTED THIS BUDGET.

BUT WE EXPECT TO CONTINUE TO IMPACT FUTURE YEAR BUDGETS AS WELL.

WITH ENSURING THAT THE RATES, YOU KNOW, SUPPORT OUR FINANCIAL STRENGTH, THE UTILITIES, UH, YOU KNOW, OPERATING IN INFRASTRUCTURE, RESILIENCE.

SO IN TERMS OF OUR COST OF SERVICE OVERVIEW, YOU KNOW, WE DO A COST OF SERVICE STUDY, UH, EVERY, EVERY FIVE TO SEVEN YEARS.

AND AS PART OF THAT PROCESS, WE ENGAGE WITH, UM, AN EXTERNAL CONSULTANT WHO, UM, REVIEWS OUR COST OF SERVICE, UM, YOU KNOW, DEVELOPS A MODEL THAT WE USE TO ALLOCATE COST TO CUSTOMERS AND DEVELOP A REVENUE REQUIREMENT FOR OUR DIFFERENT CUSTOMER CLASSES.

UM, AND THE, THE GOAL OF THE STUDY IS, IS ULTIMATELY TO DEVELOP A COST ALLOCATION PROCESS AND, AND, AND DEVELOP RATES THAT, THAT MEET OUR, YOU KNOW, FINANCIAL PLAN NEEDS, PROVIDE ADEQUATE REVENUES TO SUPPORT OUR OPERATIONS AND INVESTMENTS IN INFRASTRUCTURE, UH, BUT ALSO ENSURE THAT, UH, YOU KNOW, THE, THE RATES THAT WE ARE CHARGING FOR BOTH WATER AND WASTEWATER ARE, YOU KNOW, FULLY SUPPORT OUR, OUR COST OF SERVICE AND OUR SELF-SUPPORTING.

UM, YOU KNOW, WE, WE ARE LOOKING TO, TO SET RATES THAT, UH, YOU KNOW, MEET OUR RATE OBJECTIVE PRIORITIES WHILE, UH, ENSURING EQUITABLE COST RECOVERY FROM, FROM OUR DIFFERENT CUSTOMER CLASSES.

THERE, THERE WAS A TIME WHEN, UM, YOU KNOW, FOR EXAMPLE, COMMERCIAL AND, AND MULTI-FAMILY, UH, RATE CLASSES, SUBSIDIZED RESIDENTIAL RATE, YOU KNOW, CLASS.

SO WE WEREN'T FULLY RECOVERING THE COST TO SERVE OUR RESIDENTIAL CUSTOMERS.

UM, SINCE 2017, THAT HAS NOT BEEN THE CASE.

AND SO OUR, OUR GOAL IS TO CONTINUE TO, UH, SET RATES AND, AND DEVELOP, YOU KNOW, REVENUE REQUIREMENTS AT THE CUSTOMER CLASS LEVEL THAT ARE FULLY SELF-SUPPORTING THE, THE COST OF SERVICE PROCESS INCLUDED A PUBLIC PUBLIC INVOLVEMENT COMMITTEE.

UH, YOU KNOW, WE HAD TWO COMMISSIONERS SERVE ON THAT PUBLIC INVOLVEMENT COMMITTEE, UH, COMMISSIONER PENN AND, AND NAVARRO.

UM, BUT THE PUBLIC INVOLVEMENT COMMITTEE, YOU KNOW, UH, KITS, UM, YOU KNOW, DETAILED, DETAILED, UM, OVERVIEWS OF THE COST ALLOCATION PROCESS AND ULTIMATELY PROVIDES INPUT OVER, UM, THE COST SERVICE METHODOLOGY AND, AND PROVIDES INPUT ON, ON RATES AND, AND OTHER RECOMMENDATIONS.

AND WHEN WE LOOK AT THE COST OF SERVICE STUDY, YOU KNOW, WE'RE REALLY, IT'S, IT'S ABOUT BALANCING A, A NUMBER OF RATE, UM, PRIORITIES, YOU KNOW, MAKING SURE THAT WE'RE BALANCING AFFORDABILITY AND CONSERVATION AND MINIMIZING BILL IMPACTS

[00:20:01]

UM, AND, AND AGAIN, UM, YOU KNOW, THAT THE RATES ARE EQUITABLE.

IN OTHER WORDS, EVERYBODY'S PAYING THEIR FAIR SHARE OF COST TO SERVICE.

ALRIGHT, SO TO THAT END, UM, YOU KNOW, NEW NEWER TO, TO THIS COST OF SERVICE STUDY IS WE, WE HAD A REALLY ROBUST COMMUNITY ENGAGEMENT PROCESS AND, UM, ASSISTANT DIRECTOR RANDY JENKINS WILL, UM, WILL TALK ABOUT THAT PROCESS AND THE OUTCOMES OF OUR PUBLIC ENGAGEMENT AND COMMUNITY ENGAGEMENT ACTIVITIES.

GREAT.

THANK YOU JOSEPH.

AND GOOD EVENING COMMISSIONERS.

UM, AS JOSEPH MENTIONED, I LED OUR COMMUNITY ENGAGEMENT EFFORTS RELATED TO OUR COST OF SERVICE STUDY AND RECEIVING COMMUNITY INPUT ABOUT HOW WE WOULD SET OUR RATE SETTING PRIORITIES.

AND SO REALLY THE PURPOSE OF OUR COMMUNITY GA ENGAGEMENT PROCESS WAS TO BOLSTER, BOLSTER TRANSPARENCY IN OUR PROCESS, RAISE AWARENESS ABOUT OUR COST OF SERVICE STUDY, AND AT OBTAIN CUSTOMER INPUT ON PRICING OBJECTIVES.

AS JOSEPH MENTIONED, WE DO HAVE FLEXIBILITY BETWEEN HOW WE, UM, DIVIDE THOSE COSTS.

AND SO THIS WAS AN IMPORTANT ELEMENT OF RECEIVING DIRECT CUSTOMER INPUT ABOUT WHAT THEY FELT WAS THE HIGHEST PRIORITY FOR THEM, UM, AS THEY LOOKED AT OUR DIFFERENT OBJECTIVES.

AND SO, UM, AS WE, UH, APPROACHED COMMUNITY ENGAGEMENT, UM, WE DID SO KIND OF WITH ALL THE TOOLS IN THE TOOLBOX.

UM, WE SET UP O AN OPEN HOUSE IN EVERY COUNCIL DISTRICT.

WE HELD A VIRTUAL OPEN HOUSE FOR ANYONE THAT MAY BE MISSED THEIR COUNCIL DISTRICT OR COULD NOT GET, UM, TO AN IN-PERSON EVENT.

WE ALSO HELD, UM, THREE IN-PERSON FOCUS GROUPS.

WE ATTENDED A NEIGHBORHOOD COUNCIL MEETING.

UM, WE SENT OUT EMAILED SURVEYS AS WELL AS PRODUCED A SPEAK UP AUSTIN ONLINE SURVEY THAT, UM, ANYONE IN THE COMMUNITY COULD TAKE TAKE.

SO IN ORDER TO GET PEOPLE TO PARTICIPATE, UM, WE, UH, STOOD UP, YOU KNOW, KIND OF FULL PRESS COVERAGE ON ALL THE DIFFERENT WAYS THAT WE COULD MAKE SURE THAT PEOPLE KNEW ABOUT THIS OPPORTUNITY.

SO WE REACHED, UM, THROUGH OUR OUTREACH EFFORTS, WE REACHED APPROXIMATELY 200,000 UNIQUE AUSTINITES.

UM, WE STARTED OUT BY, UH, ISSUING A PRESS RELEASE, UM, IN HOPES THAT THE MEDIA WOULD PICK UP AND COVER THESE OPPORTUNITIES PUBLICLY, WHICH THEY DID.

UM, WE, UH, RECEIVED A LOT OF COVERAGE AND ALSO HAD SEVERAL RADIO AND UM, TV UH, INTERVIEWS THAT WERE CONDUCTED ABOUT OUR COVERAGE.

AND WE EVEN HAD, UM, ONE NEWS OUTLET SHOW UP AND, AND ACTUALLY, UM, INTERVIEW US AT ONE OF OUR OPEN HOUSES.

SO, UM, CERTAINLY A SUCCESSFUL CAMPAIGN.

THERE WAS A LOT OF INTEREST.

WE ALSO ISSUED A DIRECT EMAIL THROUGH OUR, UM, MY EX WATER CUSTOMER PORTAL.

AND, UM, AS, AS TYPICAL WITH ANY TYPE OF CAMPAIGN, WE, UM, USED A REACH ON SOCIAL MEDIA.

SO WE REACHED NEARLY 40,000 PEOPLE, UNIQUE PEOPLE, UM, ACROSS THE COMMUNITY.

AND THEN OUR CONTENT WAS DISPLAYED IN, UM, ONLINE ADVERTISEMENT, UM, NEARLY 50,000 TIMES.

AND SO IN ADDITION TO ALL OF THOSE, WE ALSO MADE SURE THAT ALL OF OUR COUNCIL OFFICES WERE NOTIFIED ABOUT THE UPCOMING OPPORTUNITIES, CERTAINLY IN THEIR DISTRICT, BUT, UM, ALSO BROADLY.

AND SO THE OUTCOME OF, OF ALL OF OUR, UM, ENGAGEMENT OPPORTUNITIES, UM, WE HAD NEARLY 200 RESPOND ON OUR SPEAK UP AUSTIN PAGE, UM, THAT PARTICIPATED IN OUR SURVEYS AND, AND COMMENT PERIOD THERE.

OVER A HUNDRED ATTENDED OUR OPEN HOUSES IN THE 10 COUNCIL DISTRICTS, 20 ATTENDED OUR VIRTUAL OPEN HOUSE, UM, 56 PARTICIPATED IN OUR EMAIL SURVEY AND 27 PARTICIPATED IN FOCUS GROUPS.

AND ONE THING I'D LIKE TO HIGHLIGHT THAT WAS DIFFERENT, YOU KNOW, OUR OPEN HOUSES, UM, INDIVIDUALS COULD COME AND ASK US QUESTIONS AND ENGAGE WITH INDIVIDUAL STAFF MEMBERS AS WELL AS, UM, OUR, UH, AND I FAILED TO MENTION THIS, UM, AT THE ONSET WE PARTNERED WITH RALPH TEIS.

SO PART OF THE PUBLIC INVOLVEMENT COMMITTEE, THE RESIDENTIAL RATE ADVOCATE WAS RALPH TEIS.

SO, UM, THEY WERE OUR HIRED RESIDENTIAL RATE ADVOCATE CONSULTANT.

AND SO THEY PARTNERED WITH US, UM, TO HELP, UH, STAND UP THESE OPEN HOUSES AND, UM, THIS OUTREACH EFFORT.

AND, UM, SO THEY SET UP THE FOCUS GROUP.

SO IT WASN'T AUSTIN WATER STAFF RECEIVING THIS INPUT, IT WAS A THIRD PARTY CONSULTANT THAT, UM, HAD, YOU KNOW, SMALL GROUP MEETINGS WITH, UM, APPLICANTS WHO WANTED TO APPLY AND PARTICIPATE IN THESE FOCUS GROUPS AND RECEIVE THAT DIRECT FEEDBACK.

SO IT WAS A LITTLE MORE, UM, OF AN INTIMATE SETTING WHERE THEY COULD ASK DIRECT QUESTIONS AND WE COULD REALLY GET INTO A LITTLE BIT MORE WEEDS AND KIND OF UNDERSTAND WHAT THEY KNEW ABOUT AUSTIN WATER AND WHAT THEIR RATE PRIORITIES

[00:25:01]

WERE FOR THE UTILITY.

AND SO THAT WAS THE FOCUS GROUPS.

AND THEN 32, UM, ATTENDED AN AN AUSTIN NEIGHBORHOOD COUNCIL MEETING.

AND THEN THE OUTCOMES OF, OF ALL OF OUR OUTREACH AND, AND THOSE 400 VERSUS VOICES THAT WE HEARD, YOU KNOW, I MENTIONED THE RATE SETTING PRIORITIES.

AND SO WE ASKED AT EVERY OPPORTUNITY, WHETHER IT BE THE OPEN HOUSE, THE FOCUS GROUPS, OR THE SURVEY FOR, UM, OUR CUSTOMER BASE TO RANK THEIR PRIORITIES FOR US.

AND SO, UM, AS AN AVERAGE, UM, HERE IS THEIR, UM, MOST TO LEAST IMPORTANT.

SO STARTING WITH NUMBER ONE, AFFORDABILITY FOR ESSENTIAL, UH, USES OF WATER.

SO, UM, WHAT THAT TELLS US IS THAT, YOU KNOW, OUR LOWER TIERS WHERE, YOU KNOW, PEOPLE ARE USING WATER FOR, YOU KNOW, ESSENTIAL DAILY FUNCTIONS IN THEIR HOUSEHOLD WAS A MAIN PRIORITY FOR THEM.

UM, SECOND WATER CONSERVATION TO ENCOURAGE SUSTAINABLE USE OF WATER.

UH, THIRD WAS SYSTEM RESILIENCE TO WITHSTAND CLIMATE IMPACTS AND RELIABILITY TO MINIMIZE OUTAGES.

AND A VERY CLOSE FOURTH WAS AFFORDABILITY FOR LOW INCOME USERS.

AND THEN FIFTH WAS MINIMIZING BILL IMPACTS BY GRADUALLY INCREASING RATES OVER TIME.

AND THEN SIX WAS REVENUE STABILITY SO THAT AUSTIN WATER RECEIVES A STABLE LEVEL OF REVENUE DESPITE FLUCTUATIONS IN WATER USE.

AND SO THAT IS, UM, IN ESSENCE WHAT WE HEARD AND WHAT WE SOUGHT TO, TO SEEK AND, UM, CERTAINLY HELP US IN OUR DECISIONS AS WE COME FORWARD TODAY WITH YOU.

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

GREAT.

SO WE, WE TOOK THAT FEEDBACK THAT WE GOT FROM, FROM ALL OF OUR, SORRY.

SO WE TOOK, WE TOOK THE FEEDBACK THAT WE GOT FROM ALL OF OUR COMMUNITY ENGAGEMENT ACTIVITIES AND FEEDBACK THAT WE GOT FROM THE PICK.

SO, UH, THROUGHOUT THE PUBLIC INVOL, YOU KNOW, UH, THE PUBLIC INVOLVEMENT COMMITTEE PROCESS, YOU KNOW, WE WERE, UH, TALKING ABOUT, YOU KNOW, SEVERAL OF THE, REALLY THE BIG RATE DRIVERS IN, IN OUR PROCESS, BUT WE ASKED, UH, THE PUBLIC INVOLVEMENT COMMITTEE THE SAME THING.

UM, AND WE TOOK THAT FEEDBACK AS AN EXECUTIVE TEAM AND REALLY TALKED ABOUT, YOU KNOW, WHAT ARE, WHAT ARE OUR PRIORITIES AS AN EXECUTIVE TEAM? WHAT ARE AUSTIN WATERS PRIORITIES? AND, AND THEY, UH, GENERALLY ALIGNED WITH THE, THE FEEDBACK THAT WE GOT FROM THE COMMUNITY AND, AND FROM THE PUBLIC INVOLVEMENT COMMITTEE IN TERMS OF AFFORDABILITY, PARTICULARLY FOR BASIC SERVICES AND ESSENTIAL USE, UM, BUT ALSO FOR, FOR SYSTEM RESILIENCE.

AND SO, UH, YOU KNOW, AS WE, UH, THINK ABOUT HOW WE WANT TO MANAGE THE UTILITY, YOU KNOW, WE WANT TO HAVE, UH, AFFORDABLE RATES FOR, FOR ESSENTIAL SERVICES, UH, BUT WE ALSO WANT TO BE ABLE TO INVEST IN, IN THE UTILITY, INVEST IN OUR INFRASTRUCTURE AND OUR OPERATIONS TO MAKE SURE THAT, YOU KNOW, WHEN OUR CUSTOMERS GO TO TURN ON THE WATER THAT, YOU KNOW, WATER COMES OUT AND, AND THAT WE'RE ABLE TO EFFECTIVELY TREAT, UH, YOU KNOW, OUR, OUR WATER AND, AND WASTEWATER, UM, YOU KNOW, UH, FLOWS THAT, THAT WE RECEIVE.

UM, YOU KNOW, IN TERMS OF, UM, AN OUTCOME, UH, SPECIFICALLY FROM PICK RECOMMENDATIONS.

YOU KNOW, ONE OF THE BIGGEST QUESTIONS THAT WE, UM, WE ASKED OUR PUBLIC INVOLVEMENT COMMITTEE MEMBERS WAS HOW SHOULD WE, UM, FINANCE OUR, OUR LARGE GENERATIONAL PROJECTS? AS YOU KNOW, UM, YOU KNOW, WE RECENTLY WENT TO COMMISSION AND COUNCIL, UH, FOR APPROVAL FOR OUR WALNUT CREEK, UH, WASTEWATER EXPANSION AND UPGRADE PROJECT.

YOU KNOW, IT'S A LARGE GENERATIONAL PROJECT, UH, UH, ALMOST A BILLION DOLLARS.

AND, UM, THE WAY THAT WE FINANCE THAT PROJECT HAS A BIG IMPACT ON, ULTIMATELY ON OUR, OUR RATES AND OUR CUSTOMER BILLS.

UM, SO YOU MAY RECALL THAT OUR, WE HAVE A FINANCIAL POLICY THAT TARGETS, UH, 35% MINIMUM CASH FINANCING OF OUR CIP PLAN IN TOTAL, BUT IT'S NOT REAL SPECIFIC IN TERMS OF, YOU KNOW, INDIVIDUAL PROJECTS.

AND WHEN WE HAVE A LARGE PROJECT LIKE THE WALNUT CREEK PROJECT, YOU KNOW, TO ASK TODAY'S CUSTOMERS TO, TO PAY FOR MORE THAN A THIRD, YOU KNOW, 35% OF THE PROJECT OVER A FIVE OR SIX YEAR PERIOD HAS A BIG BILL IMPACT.

AND SO WE ASKED, UM, THE PUBLIC INVOLVEMENT COMMITTEE, UM, YOU KNOW, HOW SHOULD WE, HOW SHOULD WE FINANCE THAT? UM, AND THEY RECOMMENDED, YOU KNOW, A LOWER FINANCING TARGET PERCENTAGE FOR LARGE PROJECTS.

AND, AND, YOU KNOW, WE RAISED THE ISSUE BECAUSE WE RECOGNIZED, UH, YOU KNOW, OBVIOUSLY THE IMPACT TO, TO OUR CUSTOMERS.

AND WHERE WE SETTLED THERE WAS, UM, YOU KNOW, 30% FINANCING OF OUR, OUR, OUR CAPITAL PLAN OVER THE NEXT FIVE YEARS AS WE WORK TO RE REALIGN OUR RATE STRUCTURE WITH, UM, YOU KNOW, OUR, OUR GROWING, UH, OPERATIONAL COSTS, YOU KNOW, THAT ARE DRIVEN LARGELY BY INFLATION,

[00:30:01]

UH, BUT, BUT ALSO, UH, AN INCREASING COST TO DELIVER OUR CAPITAL PROJECTS.

AND OH, BY THE WAY, THERE'S A, YOU KNOW, ALMOST BILLION DOLLAR PROJECT INCLUDED.

SO, UM, FOR, FOR THAT PROJECT SPECIFICALLY, UH, WE ARE RECOMMENDING AUSTIN WATER IS RECOMMENDING 20% FINANCING TARGET FOR LARGE GENERATIONAL PROJECTS.

AND, AND, AND SO OVER THE NEXT FIVE TO SIX YEARS, WE EXPECT, UM, TO BE BELOW OUR, UM, FINANCIAL POLICY TARGET OF 35% CASH FINANCING AND, AND BE, YOU KNOW, MORE IN THE 26 TO 28% ON, ON AVERAGE, DEPENDING ON, ON THE SPEND FOR, FOR WALNUT.

AND, AND THAT'LL HELP US KEEP RATES LOWER THAN THEY WOULD OTHERWISE HAVE BEEN IF WE HAD MAINTAINED, YOU KNOW, STRICT ADHERENCE TO THE 35%, UH, CASH FINANCING TARGET.

UM, SO WHAT THAT MEANS IS, WE'LL, WE'LL BE DEBT FINANCING MORE OF OUR CAPITAL PLAN OVER THE NEXT FIVE TO SIX YEARS, BUT, UM, YOU KNOW, WE THINK THAT THAT MAKES SENSE FROM, FROM AN AFFORDABILITY PERSPECTIVE.

UM, ONE OF THE OTHER BIG QUESTIONS WAS ABOUT OUR CUSTOMER ASSISTANCE PROGRAM.

YOU KNOW, OVER, OVER TIME, THE BILL DISCOUNT FOR OUR CUSTOMER ASSISTANCE PROGRAM CUSTOMERS HAS INCREASED FROM, FROM 35% TO, TO 53% IN, IN THE CURRENT YEAR, IN FISCAL YEAR 24.

UM, AND SO ONE OF THE THINGS THAT WE SOUGHT TO DO WAS HAVE, UH, BETTER GUIDANCE ABOUT, YOU KNOW, WHAT, WHAT KIND OF DISCOUNT SHOULD, UH, AUSTIN WATER BE TARGETING FOR CUSTOMER ASSISTANCE PROGRAMS? AND, AND, UM, YOU KNOW, OUR RECOMMENDATION IS TO MAINTAIN A, A BILL DISCOUNT TARGET AROUND 50%.

UM, NOW TO DO THAT, UH, WE'RE RECOMMENDING AN INCREASE IN THE COMMUNITY BENEFIT CHARGE, UM, THAT, UH, YOU KNOW, CURRENTLY DOES NOT BRING IN ENOUGH REVENUE TO COVER THE EXPANDED CUSTOMER ASSISTANCE PROGRAM ENROLLMENT THAT WE'VE SEEN O OVER THE LAST TWO YEARS.

SO, SO WE ARE PROPOSING AND RECOMMENDING AN INCREASE, UH, OF THE COMMUNITY BENEFIT CHARGE FROM 15 CENTS PER THOUSAND GALLONS FOR BOTH WATER AND WASTEWATER SERVICE TO, TO 30 CENTS PER THOUSAND GALLONS.

AND, AND THEN FINALLY, WE'RE, WE'RE RECOMMENDING EXPEDITED IMPLEMENTATION OF WATER BUDGET BILLING, UH, TO ADDRESS, UH, DISCRETIONARY USE, UH, YOU KNOW, UH, PRIMARILY IRRIGATION USE OF OUR COMMERCIAL AND MULTIFAMILY CUSTOMERS.

THE, THE, THROUGHOUT THE COST SERVICE STUDY, WE LOOKED AT, UM, YOU KNOW, PERHAPS IMPLEMENTING IRRIGATION RATES FOR OUR COMMERCIAL AND MULTIFAMILY CUSTOMERS WHO HAVE SEPARATE IRRIGATION METERS.

BUT IN OUR ANALYSIS, UH, YOU KNOW, WE, WE FOUND THAT ONLY ABOUT 5% OF OUR MULTIFAMILY AND COMMERCIAL CUSTOMERS HAVE A SEPARATE IRRIGATION RATE.

SO WE FEEL LIKE A, YOU KNOW, UH, TRANSITIONING AND EXPEDITING IMPLEMENTATION OF WATER BUDGET BILLING WILL HELP US GET TO, YOU KNOW, DISCRETIONARY USE AND WHERE WE CAN SET A TARGET THAT'S BASED ON, YOU KNOW, THE, THE NON-PEAK IRRIGATION PERIODS, UM, AND USE BUDGET BILLING TO, TO BETTER, UM, YOU KNOW, SET A CONSERVATION PRICE TARGET FOR COMMERCIAL AND MULTIFAMILY CUSTOMERS, UM, AS OPPOSED TO, YOU KNOW, JUST TARGETING CUSTOMERS WITH, UM, IRRIGATION METERS, WHICH WOULDN'T GET AT THE FULL VOLUME FOR OUR COMMERCIAL AND MULTI-FAMILY CUSTOMERS.

AND IT WOULD ALSO MEAN THAT IF WE TARGETED JUST THOSE CUSTOMERS WITH STANDALONE IRRIGATION METERS, UH, WHICH IS REQUIRED UNDER CURRENT CODE, BUT HASN'T ALWAYS BEEN REQUIRED, WE COULD HAVE A SITUATION WHERE WE CUSTOMER, UM, YOU KNOW, UH, WHO HAS AN IRRIGATION METER WOULD BE PAYING HIGHER RATES THAN THE CUSTOMER ACROSS THE STREET THAT MIGHT HAVE BEEN AN OLDER DEVELOPMENT THAT DIDN'T HAVE A STANDALONE IRRIGATION METER.

SO WE'RE RECOMMENDING, AGAIN, EXPEDITED IMPLEMENTATION OF WATER BUDGET BILLING.

AND WITH THAT, THAT KIND OF GETS US TO, UM, HOW THE COST OF SERVICE STUDY IS REALLY INFORMING, UH, YOU KNOW, OUR ULTIMATE RATE PROPOSAL.

UM, BUT NOW I'LL GO INTO MORE OF A, A, A BUDGET OVERVIEW.

UH, AGAIN, UM, YOU KNOW, THE BUDGET, UH, DOES OUR, OUR PROPOSED BUDGET, UH, WILL INCORPORATE OUR, THE RESULTS OF OUR COST OF SERVICE STUDY AND, AND COMMUNITY ENGAGEMENT RESULTS.

UH, AS ALWAYS, WE, WE LOOK TO BALANCE, UH, AFFORDABILITY WITH, UH, APPROPRIATE INVESTMENTS IN, IN OUR OPERATIONS AND IN OUR INFRASTRUCTURE TO, TO MAINTAIN SYSTEM RESILIENCY.

UM, YOU KNOW, WE ARE PROPOSING SOME STAFFING ADDITIONS, UH, 29 FTES, ALTHOUGH, UH, SEVEN OF THOSE

[00:35:01]

POSITIONS WILL, UM, CONVERT A CURRENT TEMPORARY OR CONTRACTOR, UH, POSITION TO, TO A FULL-TIME POSITION.

UM, YOU KNOW, WE WILL, UH, CONTINUE TO, UM, CON CONTINUE TO IMPLEMENT AND, AND MAINTAIN OUR DEBT MANAGEMENT STRATEGIES, UM, ALL WITH THE GOAL OF MAINTAINING, YOU KNOW, FINANCIAL STRENGTH OF U THE UTILITY, UH, SUPPORTING OUR, OUR BOND RATINGS, WHICH HAVE BEEN STABLE SINCE, SINCE 2016.

UM, AND THEN SPECIFICALLY, YOU KNOW, IN TERMS OF OUR RESIDENTIAL BILL INCREASE, AND WE'LL GET INTO THIS IN A LITTLE BIT MORE DETAIL, BUT WE'RE PROPOSING, UH, YOU KNOW, AN AVERAGE MON MONTHLY RESIDENTIAL BILL INCREASE OF $8 AND 14 CENTS, UM, YOU KNOW, AND, AND THAT INVOLVES, UH, LOWER INCREASES IN THE LOWER RATE TIERS TO SUPPORT AFFORDABILITY, UH, BUT, BUT MAINTAINING THE, OUR CONSERVATION BASED INCLINING BLOCK RATE STRUCTURE, WHICH HAS HIGHER RATES FOR HIGHER LEVELS OF CONSUMPTION TO, UM, TO, UH, TO SUPPORT AND ENCOURAGE CONSERVATION.

UM, AND, AND THEN AS I I MENTIONED, OUR CUSTOMER ASSISTANCE PROGRAM CUSTOMERS, YOU KNOW, WE'RE TARGETING MAINTAINING A A 50, UH, PERCENT DISCOUNT, ALTHOUGH THOSE CUSTOMERS WILL SEE AN INCREASE OF $7 AND 95 CENTS, AND WE'LL GET MORE INTO THAT DETAIL, UM, ON, ON THE LATER SLIDE.

AND, AND THIS IS A HIGH LEVEL FUND SUMMARY, YOU KNOW, THAT SHOWS, YOU KNOW, OUR, OUR REVENUES, OUR SOURCES OF, OF FUNDS, REVENUES AND TRANSFERS IN, UH, OUR, OUR EXPENDITURES, UM, AND, AND HOW THAT, UH, COMPARES, YOU KNOW, REVENUES OVER EXPENDITURES, YOU KNOW, WHICH, UH, RESULTS IN A CHANGE IN FUND BALANCE AND, UM, ULTIMATELY DRIVES OUR ENDING BALANCE.

AND THEN AS WE LOOK AT A COUPLE OF OUR, OUR KEY FINANCIAL METRICS, BOTH DEBT SERVICE COVERAGE AND, AND DAYS CASH ON HAND, UM, AND THEN, AS I MENTIONED, YOU KNOW, 29 NEW FTES, IT GETS US TO, TO, UH, TOTAL PROPOSED FTES FOR FISCAL YEAR 25 OF 1,410 FTES.

BUT, UM, I DO WANNA POINT OUT A, A A COUPLE OF THINGS.

AND YOU MAY RECALL, UH, FROM FROM LAST YEAR'S BUDGET, UH, IF YOU, YOU WERE ON THE COMMISSION LAST YEAR THAT, UM, WHEN WE SET LAST YEAR'S BUDGET, UH, WE HAD ASSUMED A PRETTY BIG DEBT DEFE TRANSACTION, UM, IN THE BUDGET OF, UH, $60 MILLION.

NOW, WE WEREN'T ABLE TO TAKE CREDIT FOR THE RESULTS OF THE DEBT TRANSACTION UNTIL THE DEFIANCE TRANSACTION, UH, ACTUALLY OCCURRED.

SO WHAT THAT MEANS IS YOU SEE A DIFFERENCE IN, IN THE CHANGE IN FUND BALANCE FROM OUR FISCAL YEAR 24 AMENDED, WHERE WE WERE ANTICIPATING, UM, YOU KNOW, UH, EXPENDITURES OVER REVENUES OF ALMOST $66 MILLION.

UH, BUT WHEN YOU LOOK AT OUR CURRENT YEAR ESTIMATE, THAT MIDDLE COLUMN, UH, YOU SEE, UH, THAT, THAT, UH, THE ANTICIPATED CHANGE IN FUND BALANCE IS 25 MILLION.

SO THAT $40 MILLION DIFFERENCE IS THE, THE CHANGE IS PARTIALLY THE CHANGE IN, UM, DEBT SERVICE THAT WE WEREN'T ABLE TO TAKE CREDIT FOR IN THE PROPOSED BUDGET BECAUSE THE TRANSACTION HADN'T OCCURRED YET.

SO PART OF THAT IS JUST, UH, YOU KNOW, A PRESENTATION ISSUE, UH, BUT WE DID IN FACT USE ABOUT, UH, $30 MILLION OF FUND BALANCE TO, TO SUPPORT OUR DEFE TRANSACTION.

UM, AND, AND SO THAT'S WHY THERE WAS A SPEND DOWN OF, OF FUND BALANCE WHERE WE USED, UM, HIGHER REVENUES THAT WE'VE RECEIVED IN FISCAL YEARS 22 AND 23 BECAUSE OF THE DROUGHT CONDITIONS, REVENUES CAME IN HIGHER IN BOTH OF THOSE YEARS.

AND, AND SO WHEN WE HAVE EXCESS REVENUES, WE TRY AND USE THEM, UM, OVER THE LAST FEW YEARS WE'VE USED THEM, UH, SPECIFICALLY TO HELP US TO FEES DEBT AND, AND KEEP OUR DEBT SERVICE, OUR FUTURE DEBT SERVICE LOW.

AND, AND WE'LL TALK MORE ABOUT DEBT SERVICE, UH, MANAGEMENT, UH, HERE IN A LITTLE BIT.

UM, AND THAT'S PART OF THE REASON WHY OUR ADOPTED BUDGET, UM, HAD A DEBT SERVICE COVERAGE OF OF 1 5, 1 OF, ALTHOUGH OUR FINANCIAL, OUR, OUR MANAGEMENT TARGET IS, IS 1 8 5 DEBT SERVICE COVERAGE.

AND, AND DEBT SERVICE COVERAGE IS SIMPLY LOOKING AT, YOU KNOW, THE DIFFERENCE BETWEEN REVENUES AND EXPENDITURES.

UM, AND, AND WHATEVER LEFTOVER AMOUNT, YOU KNOW, FROM OPERATING REVENUES AND OPERATING EXPENDITURES SHOULD BE, YOU KNOW, AT AT LEAST 1 7, 5 TIMES, UM, OUR ANNUAL DEBT SERVICE FROM A FINANCIAL POLICY PERSPECTIVE, ALTHOUGH, AS I MENTIONED, OUR, OUR MANAGEMENT TARGET IS A LITTLE BIT HIGHER AT 1 8 5 TO GIVE US A LITTLE BIT OF A

[00:40:01]

CUSHION BETWEEN THE FINANCIAL POLICY TARGET AND THE MANAGEMENT TARGET.

UM, AND THEN WITH DAY'S CASH ON HAND, AGAIN, THAT ANTICIPATED, YOU KNOW, $66 MILLION CHANGE IN FUND BALANCE WOULD'VE RESULTED IN A DROP OF, IN DAYS CASH FROM OVER 300 DAYS TO ABOUT 240 DAYS.

UM, BUT THE COMBINATION OF, UH, USING PRIOR YEAR BALANCE, WELL, THE COMBINATION OF THE DEFE SAVINGS, UH, FOR DEBT SERVICE AND, UM, YOU KNOW, REVENUES COMING IN A LITTLE BIT HIGHER IN THE CURRENT YEAR THAN WE HAD EVEN ANTICIPATED.

YOU KNOW, WE THINK WE'LL END THE YEAR WITH OVER 300 DAYS CASH, AND THEN FOR 25, A SLIGHT DEFICIT TO END THE YEAR, UH, RIGHT AT, YOU KNOW, 312 DAYS CASH.

AND IF WE LOOK MORE SPECIFICALLY AT, YOU KNOW, REVENUES AND EXPENDITURES, YOU KNOW, FROM A REVENUE PERSPECTIVE, UH, THE CURRENT YEAR AMENDED BUDGET, UH, WAS SET AT 640.6 MILLION, UH, WITH THE, UM, IMPLEMENTING COST OF SERVICE RESULTS AND, UM, YOU KNOW, ONGOING, UM, OTHER, YOU KNOW, CHANGES IN, UM, ACCOUNT GROWTH AND, AND REALLY JUST LEVEL, YOU KNOW, CONTINUING TO MAINTAIN LEVELIZED DEMAND.

WE EXPECT, UH, UH, WE'RE PROPOSING A REVENUE BUDGET OF 700, ALMOST 705 MILLION FOR NEXT YEAR.

AND YOU CAN SEE THAT INCLUDES INCREASES, UM, ON FOR WATER SERVICES FROM 327 MILLION TO, UH, 352 MILLION, UH, FOR WASTEWATER GOING FROM 200 AND, UH, 89 MILLION TO 325 MILLION, AND THEN SMALLER INCREASES, UH, FOR, FOR RECLAIMED AND MISCELLANEOUS REVENUE.

IN TERMS OF USE OF FUNDS, UM, NO, NO BIG CHANGES HERE.

YOU KNOW, IN, IN TERMS OF THE, THE CATEGORIES, UM, IN, IN FACT, UM, YEAR OVER YEAR, REALLY, REALLY NO CHANGE YEAR OVER YEAR, UH, FROM, FROM 24 TO TO 25, UM, IN TOTAL, YOU KNOW, STAYING RIGHT AT ABOUT 769 MILLION.

SO, UH, ONE OF THE BIG CHANGES, AND WE'LL, WE WILL GET BACK, GET INTO THIS, YOU KNOW, ON A FUTURE SLIDE TOO, ONE OF THE BIG CHANGES IS THE END OF OUR, UM, OUR RETENTION, OUR 10%, UM, EMPLOYEE RETENTION STIPEND, UH, WHICH IS SAVINGS ABOUT 8 MILLION.

AND SO, ALTHOUGH WE DID SEE SOME COST INCREASES, UM, YOU KNOW, THROUGHOUT OUR OPERATIONS, THOSE OFF THOSE COST INCREASES WERE OFFSET BY, UM, THE EMPLOYEE, UH, THE, THE 10% EMPLOYEE RETENTION STIPEND GOING AWAY.

AND SO AS WE LOOK AT SOME OF THE SIGNIFICANT, UH, OPERATING REQUIREMENT CHANGES, UM, YOU KNOW, AGAIN, YOU SEE THE, THE $8.3 MILLION DECREASE FOR THE END OF THE CROSS, THE BROAD RETENTION STIPEND, UM, AND THAT GENERALLY OFFSET, UM, YOU KNOW, OTHER INCREASES, UH, FROM FOR WAGE AND BENEFITS, UH, 5.7 MILLION.

UM, AND, AND THIS 5.7 MILLION IS THE RESULT OF ALL OF THE ACTIVITIES THAT WE'VE BEEN DOING OVER THE LAST YEAR AND A HALF, UM, IMPLEMENTING MARKET STUDIES, LOOKING AT OTHER WAGE, OTHER WAGE ADJUSTMENTS, UH, ALSO INCLUDES, UH, AN INCREASE, YOU KNOW, FOR, UH, RETIREMENT CONTRIBUTIONS, UH, WHICH IS, YOU KNOW, FOR THE CITY AS A WHOLE.

UM, IT INCLUDES 3.4 MILLION FOR THE, YOU KNOW, PROPOSED, UH, 29 NEW FTES.

UM, AND THEN ABOUT 2.1 MILLION FOR, UH, OTHER EMPLOYEE BENEFIT COST.

UH, FROM A CONTRACTUAL AND COMMODITIES PERSPECTIVE, THE BIGGEST INCREASE, UH, CONTINUES TO BE CHEMICALS.

CHEMICALS HAS BEEN ONE OF OUR BIGGEST COST DRIVERS OVER THE LAST SEVERAL YEARS.

UH, WE'RE ALSO SEEING, YOU KNOW, FOR, FOR BRASS AND FITTING, YOU KNOW, PIPES AND FITTING, UH, COMPONENT, UH, ITEMS, UH, ABOUT A MILLION DOLLAR INCREASE BASED ON, UH, YOU KNOW, NEW CONTRACTS THAT WERE, UH, WERE, UH, TAKEN ON OVER THE LAST YEAR.

UM, AND THEN A MILLION DOLLAR INCREASE FOR, YOU KNOW, FLOW METER CONTRACTS, UH, YOU KNOW, FOR ENGINEERING SERVICES.

UM, WE ALSO, UM, TALKED EARLIER IN THE YEAR ABOUT OUR GO PURPLE INITIATIVES.

UM, IN ADDITION TO THE CHANGE IN THE, UM, THE CUSTOMER ASSISTANCE PROGRAM COMMUNITY BENEFIT CHARGE, EARLIER IN THE YEAR, YOU KNOW, WE IMPLEMENTED A, UM, A GO PURPLE COMMUNITY BENEFIT CHARGE.

AND, AND THAT'S GONNA GENERATE ON AN ANNUAL BASIS, UH, A LITTLE OVER 10 MILLION, ABOUT 4 MILLION OF THAT WILL STAY IN OPERATING TO PROVIDE REUSE INCENTIVES.

UM, SO THAT'S THE GO PURPLE, UH, INITIATIVES ON, ON THE OPERATION

[00:45:01]

SIDE.

UM, ON THE INFRASTRUCTURE SIDE, WE EXPECT TO USE ABOUT SIX TO SIX AND A HALF MILLION TO INVEST IN, IN OUR RECLAIMED SYSTEM.

AND AS WE START TO GET SOME EXPERIENCE IN TERMS OF, OF, UH, REUSE INCENTIVES THAT, THAT OUR, OUR CUSTOMERS ARE, ARE, ARE, ARE SEEKING, UM, YOU KNOW, WILL TRUE UP THE BUDGET FOR, UM, AND THIS, THE SPLIT OF GO PURPLE FUNDING BETWEEN, UM, REUSE INCENTIVES AND, AND INVESTMENTS IN OUR INFRASTRUCTURE.

UH, IN ADDITION, WE, WE'VE GOT A, A, A NEW, WE'RE SUPPORTING A NEW INFRASTRUCTURE ACADEMY.

UM, AND, AND THAT'LL BE ABOUT $3.3 MILLION, UH, FOR AUSTIN WATER.

YOU KNOW, THERE'S SEVERAL POSITIONS THAT WE ARE ASKING.

UM, SO THIS WILL BE A CITYWIDE PROGRAM, BUT THERE'S SEVERAL POSITIONS THAT WE'RE ASKING, UH, TO FOCUS ON, YOU KNOW, HARD TO FILL POSITIONS FOR US, LIKE ELECTRICIANS, UM, INSTRUMENT AND CONTROL TECHNICIANS, UM, OPERATORS AND METER SERVICE TECHNICIANS.

SO, SO THERE'S A HANDFUL OF POSITIONS THAT WE ARE ASKING, UH, YOU KNOW, THE INFRASTRUCTURE ACADEMY TO DEVELOP, UH, YOU KNOW, A WORKFORCE PIPELINE AND HELP US ATTRACT, UM, POSITIONS INTO THOSE ENTRY LEVEL, UH, OR ATTRACT EMPLOYEES INTO THOSE ENTRY LEVEL POSITIONS.

AND THEN FINALLY, UM, YOU KNOW, WE'RE SEEING, UH, A $2 MILLION INCREASE IN OUR UTILITY BILLING SYSTEM SUPPORT.

THIS IS THE CUSTOMER CARE ALLOCATION THAT WE GET FROM AUSTIN WATER, AUSTIN ENERGY, UM, TO, TO MANAGE THE UTILITY BILLING SYSTEM AND CUSTOMER CARE, UH, OFFICE.

UM, I, I NOTE THAT WE EXPECT THIS TO, TO DECREASE NEXT YEAR.

UM, THIS IS THE LAST YEAR, UH, WHERE THAT ALLOCATION FULLY INCLUDES THE COST OF MANUAL READ METER READING COSTS.

SO THERE'S, THERE'S A TWO YEAR LAG.

THE, UM, THIS TRANSFER IS BASED ON FISCAL YEAR 23 COST, AND, AND AT THE END OF FISCAL YEAR 23, WE WERE STILL AT ALMOST A HUNDRED PERCENT OF OUR METERS BEING READ MANUALLY.

UM, BY THE END OF 24, WE EXPECT TO BE, YOU KNOW, MORE IN THE, THE 5% RANGE BY THE, BY THE END OF 24.

AS WE, UM, YOU KNOW, WE TURN ON ALL OF OUR A MI METERS, BUT, UH, SO 24, WE'LL HAVE MUCH LOWER, UM, MANUAL METER READING COST.

AND SO WE, I EXPECT FOR NEXT YEAR WE'LL ACTUALLY SEE A REDUCTION IN UTILITY BUILDING SYSTEM SUPPORT AS A RESULT.

UM, AND THEN, UH, FOR OUR PROPOSED NEW FTES, AS I MENTIONED, UH, WE ARE PROPOSING 29 NEW FTES.

UM, AGAIN, SEVEN OF THOSE ARE TEMPORARY AND, AND CONTRACTOR CONVERSIONS.

AND SO I JUST WANTED TO HIGHLIGHT A A FEW OF 'EM IN TERMS OF ENTERPRISE RESILIENCY, WHICH HAS BEEN THE BIG FOCUS FOR AUSTIN WATER FOR, FOR SEVERAL YEARS NOW.

UM, FOR ENTERPRISE RE RESILIENCY, THERE'S A WILDFIRE MITIGATION SPECIALIST POSITION, UM, AN O AND M TREATMENT TECH POSITION, AS WELL AS A WATER QUALITY SCIENCE, UH, SCIENTIST SENIOR POSITION.

UM, IN TERMS OF, YOU KNOW, OUR INFRASTRUCTURE PERFORMANCE, IT INCLUDES A CAPITAL PROGRAM CONSULTANT TO HELP US WITH, UM, ASSET MANAGEMENT DATA ANALYSIS AND HELP, YOU KNOW, YOU KNOW, HELP US DEVELOP OUR, OUR, OUR CAPITAL PLAN AND MAKING SURE THAT, YOU KNOW, THE CAPITAL PLAN IS FOCUSED ON THOSE AREAS, UM, WHERE THAT OUR INFRASTRUCTURE OR OUR ASSET MANAGEMENT DATA IS TELLING US WE NEED, UH, YOU KNOW, A STRONG FOCUS.

UH, I'D ALSO HIGHLIGHT THAT TWO OF THE POSITIONS, UH, WE'RE RECOMMENDED BY OUR EXTERNAL REVIEW.

UM, AND, AND THAT INCLUDES A, UH, PROCESS IMPROVEMENT DATA ANALYST, ANALYTICS MANAGER, AND A BUSINESS INTELLIGENCE INTELLIGENCE CONSULTANT TO, TO BUILD OUT OUR DATA ANALYTICS TEAM AND, AND TAKING THE DATA THAT WE'RE GETTING FROM, FROM OUR A MI METERS AND, AND, YOU KNOW, USING IT TO SUPPORT UTILITY OPERATIONS, BUT ALSO HELP CUSTOMERS MANAGE, UH, THEIR CONSUMPTION.

LET'S SEE.

AND THEN, UH, MOVING FORWARD WITH THE, THE CAPITAL PLAN, AND THIS HAS REALLY BEEN ONE OF OUR, OUR BIGGEST COST DRIVERS AND IT'S REASON, UM, THAT OUR CASH FINANCING WAS, WAS SUCH A BIG TOPIC THROUGHOUT OUR COST OF SERVICE PROCESS.

UM, BUT, BUT YOU CAN SEE, UH, YOU KNOW, OUR, OUR FIVE YEAR CAPITAL PLAN, UM, IS, UM, YOU KNOW, ASSUMES, UH, ABOUT A $2.3 BILLION OF CAPITAL SPENDING O OVER THE NEXT FIVE YEARS.

NOW, WE KNOW, UH, UH, YOU KNOW, NOT ALMOST HALF OF THAT IS RELATED TO A SINGLE PROJECT, UH, YOU KNOW, WALNUT CREEK, UH, YOU KNOW, EXPANSION AND, AND UPGRADE.

AND, AND SO THAT'S A, A BIG COST DRIVER.

UM, BUT THIS IS, UH, YOU KNOW, THIS IS ABOUT A, A 500,000,

[00:50:01]

UH, $500 MILLION INCREASE OVER THE CURRENT YEAR PLAN.

AND, AND IF WE JUST, UH, YOU KNOW, THINK BACK TO THREE OR FOUR YEARS AGO, YOU KNOW, WE WERE SPENDING, YOU KNOW, RIGHT ABOUT A BILLION DOLLARS OVER A FIVE YEAR PERIOD.

SO, UM, SO, UH, THE, THE COMBINATION OF, OF, OF BRINGING WALNUT, UH, EXPANSION INTO THE SPEND PLAN AS WELL AS, YOU KNOW, INCREASED COST OF CAPITAL DELIVERY, UH, YOU KNOW, HAS GROWN OUR CAPITAL SPENDING PLAN, UH, FROM, FROM ABOUT A BILLION DOLLARS FOUR YEARS AGO TO, UH, TO OVER, OVER TWO, 2 BILLION, 2.3 BILLION.

UM, IN TERMS OF SOME OF THE KEY PROJECTS, AGAIN, YOU KNOW, WALNUT CREEK EXPANSION IS, IS OBVIOUSLY THE, UM, YOU KNOW, THE 800 POUND GORILLA.

UM, BUT, UH, YOU KNOW, THERE'S SEVERAL OTHER PROJECTS, THE WALNUT CREEK, UH, PRIMARY CLARIFIER AND FEB REHAB, UH, SOUTH AUSTIN REGIONAL TRAINS, A AND B, UH, THE WILLIAMSON CREEK WASTEWATER INTERCEPTOR.

AND WE'RE GETTING STARTED WITH, UH, AQUIFER STORAGE AND RECOVERY, YOU KNOW, STARTING WITH THE PILOT.

UH, BUT THERE'S ALSO SOME COSTS WITHIN THE FIVE YEAR PERIOD AS WE START TO LOOK TO FULL SCALE AQUIFER STORAGE AND RECOVERY.

UM, AND ALSO HIGHLIGHT, UM, YOU KNOW, AN AUSTIN WATER CONTROL CENTER.

IN FACT, ON TOMORROW'S COUNCIL AGENDA, UH, COUNCIL WILL BE, UH, YOU KNOW, WE'RE RECOMMENDING APPROVAL FOR A PURCHASE OF A A, A BUILDING, UM, TO THAT WOULD HOUSE OUR, UH, AUSTIN WATER CONTROL CENTER.

AND, AND SO AS I, I TALKED ABOUT HOW OUR PLAN HAS GROWN, YOU CAN SEE IT GRAPHICALLY HERE, UH, WHERE, YOU KNOW, IN, IN FISCAL YEAR 20, YOU KNOW, IT WAS JUST BELOW A BILLION DOLLARS AND, UM, OVER, OVER THE LAST FEW YEARS, AS, AS WE PROGRAM IN WALNUT AND, AND, UM, YOU KNOW, INCREASED CAPITAL DELIVERY COSTS, HOW, HOW THE PLAN HAS GROWN.

UM, BUT YOU CAN SEE WITH THE GREEN BARS, AND, YOU KNOW, IN TERMS OF GROWTH ENHANCEMENT AND PRIORITY PROJECTS THAT, YOU KNOW, A BIG PART OF THAT INCREASE IS, IS RELATED TO, TO, UM, TO INCREASE CAPITAL DELIVERY COSTS.

WHILE OUR LONG RANGE LARGE SCALE PROJECTS, YOU SEE THAT THE INCREASE RELATED TO, UH, WALNUT CREEK BEING PROGRAMMED INTO OUR FIVE YEAR PLAN.

SO NEXT WE'LL TALK ABOUT HOW WE PAY FOR, UH, YOU KNOW, ALL THOSE CAPITAL PROJECTS.

AND, AND CERTAINLY, UM, ALTHOUGH WE CASH FUND, UH, YOU KNOW, ABOUT A THIRD OF, OF, UH, OUR CAPITAL SPENDING PLAN, WE DEBT, FINANCE, THE, THE REST, UM, AND, AND OUR DEBT MANAGEMENT ACTIVITY HAS BEEN A BIG PART OF OUR FINANCIAL FOCUS SINCE 2016.

AND SINCE 2016, UM, YOU KNOW, OUR DEBT MANAGEMENT EFFORTS, WHICH INCLUDE, UH, DEFEATING DEBT, PAYING OFF DEBT EARLY, UH, REFINANCING DEBT AT LOWER INTEREST RATES, WHERE WHEN POSSIBLE, UH, UTILIZING, UH, LOW INTEREST LOAN PROGRAMS, SEEKING OUT GRANTS WHERE, WHERE AVAILABLE, UH, THROUGH ALL OF THOSE EFFORTS, WE'VE, UH, UH, REDUCED DEBT SERVICE COSTS BY, UH, OVER $580 MILLION SINCE FISCAL YEAR 2016.

AND SO WHAT THIS CHART SHOWS, UH, THE, THE BLUE BARS IS OUR ACTUAL LEVEL, OUR ACTUAL AND PROJECTED LEVEL OF, OF DEBT SERVICE, UM, AND THE GREEN HATCHED AREAS SHOWS THE, THE SAVINGS THAT WE'VE ACHIEVED, AS, YOU KNOW, FROM, FROM THE INCEPTION OF OUR DEBT MANAGEMENT EFFORTS THROUGH, UH, THROUGH JUST JUNE.

UM, IN FACT, IN JUNE, WE HAD, UM, A, A NEW BOND ISSUE AND REFUNDING, UH, THAT SAVED THE UTILITY ABOUT $27 MILLION IN FUTURE DEBT SERVICE COSTS.

UM, IN ADDITION, IN THE FALL, WE HAD A $58 MILLION, UM, DEBT DEFIANCE TRANSACTION, OR $60 MILLION, UM, DEFE TRANSACTION THAT IN FUTURE YEARS SAVED ABOUT $58 MILLION.

UM, AND THEN THE, THE RED LINE SHOWS HOW OUR DEBT SERVICE COSTS HAVE, HAVE CHANGED OVER TIME AS A PERCENTAGE OF OUR ANNUAL BUDGET.

UM, AND I'LL, I'LL SAY THAT IN 2015 WHEN I GOT HERE, ACTUALLY IN 2014, UM, BEFORE I GOT HERE, DEBT SERVICE ACCOUNTED FOR ABOUT 42% OF OUR ANNUAL BUDGET.

AND, UM, IN THE CURRENT YEARS, YOU KNOW, IN THE LAST FEW YEARS, IT'S BEEN, UH, YOU KNOW, MORE IN, IN THE MID TWENTIES, MID TO UPPER TWENTIES.

AND, AND THAT'S KIND OF WHERE WE'RE, WE'RE WANTING TO STAY.

UH, BUT I WILL POINT OUT, YOU KNOW, IN THE LATER YEARS, YOU CAN SEE, UM, HOW WE HAVEN'T QUITE, UH, BEEN ABLE TO LEVELIZE, UH, FISCAL YEARS 26 THROUGH THROUGH 29.

AND SO OUR DEBT MANAGEMENT ACTIVITIES WILL CONTINUE TO FOCUS ON THOSE YEARS.

ALTHOUGH, UM, THE, THE RESOURCES THAT WE HAVE AVAILABLE TO, TO FUND SPECIFIC SPECIFICALLY DEFE TRANSACTIONS, UM, HAS SLOWED

[00:55:01]

SOME.

AND SO THIS IS, THIS CHART SHOWS KIND OF OUR, OUR, UH, RECENT HISTORY IN TERMS OF CAPITAL RECOVERY FEE COLLECTIONS.

THE LINE SHOWS OUR, OUR FOUR YEAR AVERAGE FROM FISCAL YEAR 2019 THROUGH 22.

AND DURING THOSE FOUR YEARS, WE AVERAGED ABOUT $40 MILLION IN CAPITAL RECOVERY FEES.

AND, AND AGAIN, WE USE THOSE CAPITAL RECOVERY FEES, UH, TO, TO DEFE DEBT, PAY OFF DEBT EARLY.

UM, IN 23, YOU KNOW, WE SAW ABOUT A $10 MILLION DECLINE FROM THAT AVERAGE.

SO, UH, GOING FROM $40 MILLION TO, TO JUST OVER $30 MILLION IN FISCAL YEAR 23.

AND, UM, ALTHOUGH WE'VE GOT SOME MONTHS IN THE CURRENT YEAR THAT ARE ABOVE, UH, YOU KNOW, BOTH OUR, HIS, OUR, OUR PRIOR FOUR YEAR AVERAGE AND, AND FY 23 WE'RE, WE'RE TRENDING TO STAY AT, YOU KNOW, RIGHT AROUND THAT $30 MILLION MARK.

UM, AND, AND THAT'S A BIG DEAL FOR US.

YOU KNOW, $10 MILLION REDUCTION IN CAPITAL RECOVERY FEES, UH, MEANS THERE'S $10 MILLION LESS FUNDING TO, UM, TO THE FEES DEBT.

AND WHEN WE THINK ABOUT DEBT SERVICE AND, AND THE RELATIONSHIP WITH DEBT SERVICE COVERAGE, EVERY $10 MILLION WE SAVE, YOU KNOW, HAS, BECAUSE OF OUR DEBT SERVICE COVERAGE MULTIPLIER AT 1 7 5 FINANCIAL POLICY, YOU KNOW, RESULTS IN ABOUT 17 AND A HALF MILLION DOLLARS OF DEBT SERVICE THAT, OF, OF REVENUE REQUIREMENTS THAT WE WEREN'T ABLE TO BUY DOWN.

SO THAT'S WHY WE'VE BEEN FOCUSED SO HEAVILY ON, ON DEBT SERVICE COSTS, YOU KNOW, OVER THE LAST, UH, EIGHT TO 10 YEARS AND, AND WHAT WE'LL CONTINUE TO, UH, BUT WE'RE, WE'RE CLOSELY MONITORING CAPITAL RECOVERY FEES BECAUSE IT, UM, IT IS, UM, IT DOES IMPACT OUR ABILITY TO DEFE DEBT.

UM, AND SO AS WE LOOK TO, TO BILL IMPACTS, AGAIN, UM, YOU KNOW, BIG FOCUS OF THE COST OF SERVICE EFFORT WAS, YOU KNOW, HOW HOW DO WE MITIGATE THE BILL IMPACT? HOW DO WE FOCUS ON AFFORDABILITY AND, AND BALANCE, YOU KNOW, INVESTING IN OUR SYSTEM WITH, UM, YOU KNOW, REDUCING THE BILL IMPACT FOR OUR CUSTOMERS.

AND SO FOR OUR AVERAGE CUSTOMER WHO USES 5,800 GALLONS OF WATER AND, UH, PRODUCES ABOUT 4,000 GALLONS OF, OF WASTEWATER ON AVERAGE, UM, YOU KNOW, THEIR AVERAGE BILL WILL, WILL GO FROM ABOUT $84 AND 99 CENTS TO, UH, $93 AND 13 CENTS, WHICH IS AN $8 14 UH, CENTS INCREASE.

UM, BUT WHEN WE LOOK AT, UH, YOU KNOW, HOW THAT TRANSLATES TO, UM, YOU KNOW, A, A A A GALLON OF WATER, YOU KNOW, IT'S IMPORTANT TO REMEMBER THAT ON, ON THE WATER SIDE, UH, YOU KNOW, THAT TRANSLATES TO, UH, ABOUT 0.8% OF A CENT OF OF WATER PER THOUSAND PER PER GALLON, AND ABOUT A CENT ON THE WASTEWATER SIDE.

AND THEN FOR OUR CUSTOMER ASSISTANCE PROGRAM, UM, I MENTIONED THAT OUR CUSTOMER ASSISTANCE PROGRAM, UM, UH, PARTICIPANTS HAVE HAVE GROWN OVER THE LAST YEAR AND A HALF.

UM, YOU KNOW, UH, A YEAR AND A HALF AGO, WE WERE AT ABOUT 14,000 RESIDENTIAL CAP CUSTOMERS, AND WE WERE, UH, JUST IMPLEMENTING OUR MULTIFAMILY CAP PROGRAM.

UM, SO IN, IN THE LAST YEAR AND A HALF, WE'VE SEEN, UH, THE MULTIFAMILY CAP PROGRAM GROW TO 32,000 PARTICIPANTS.

UM, AND OUR RESIDENTIAL CAP CUSTOMERS, UH, YOU KNOW, GROW BY ABOUT 50% TO ABOUT 21,000, UH, PARTICIPANTS.

AND THAT'S PUT SOME PRESSURE ON, UM, THE, THE FUNDING THAT WE HAVE AVAILABLE TO, UH, TO PROVIDE DISCOUNTS TO THOSE CUSTOMERS.

UM, BUT, UM, WE ARE PROPOSING, UM, AND AN INCREASE, UH, FOR OUR CAP CUSTOMER, UH, FROM ABOUT $39 TO, TO $47 AND 55 CENTS.

I WOULD POINT OUT THAT, UH, AT $47 AND 55 CENTS FOR, UH, THE AVERAGE CAP CUSTOMER BILL THAT BRINGS, THAT'S STILL BELOW, UH, THE AVERAGE BILL IN 2018 FOR CAP CUSTOMERS, WHICH WAS, UM, ABOUT $47 AND 90 CENTS, UH, BACK IN 2018.

SO IT GETS US BACK TO 2018 LEVELS AND, UM, AND MAINTAINS A BILL DISCOUNT OF ABOUT 49%.

AND THEN WHEN WE THINK ABOUT, UH, YOU KNOW, CERTAINLY, UH, THE, THE COST DRIVERS FOR, FOR THE CURRENT YEAR BUDGET, BUT ALSO COST DRIVERS FOR FUTURE YEAR BUDGETS, AND, UH, YOU KNOW, WHAT, WHAT'S GOING TO INFLUENCE, UM, YOU KNOW, OUR, OUR BUDGET AND OUR RATES, UH, OVER THE NEXT FEW YEARS, YOU KNOW, CERTAINLY THE GROWING CAPITAL IMPROVEMENT PLAN, UM, IS, IS A BIG FACTOR.

YOU

[01:00:01]

THERE ARE, UH, BEYOND WALNUT, THERE'S SEVERAL OTHER LARGE, A COUPLE OF OTHER LARGE PROJECTS ON THE HORIZON, UH, TALKED ABOUT, UH, UM, AQUIFER STORAGE AND RECOVERY.

UH, BUT ALSO, YOU KNOW, AFTER WE FINISH, UH, WALNUT, WE'LL TURN OUR ATTENTION TO SOUTH AUSTIN REGIONAL WASTEWATER TREATMENT PLANT.

SO, UH, WE EXPECT ANOTHER LARGE GENERATIONAL PROJECT AT, AT, UH, SOUTH AUSTIN REGIONAL.

UM, AGAIN, WE'RE, WE CONTINUE TO DEAL WITH CONSTRUCTION COSTS, UH, RISING CONSTRUCTION COSTS.

UM, ALTHOUGH, UM, CHARLES DID MENTION THIS WEEK AT, UH, I THINK ONE OF OUR STAFF MEETINGS THAT, UH, YOU KNOW, WE HAD PROJECT COME IN BELOW, UH, ENGINEERS ESTIMATE, SO HOPEFULLY THAT'S STARTING TO SLOW.

UM, AND THEN, YOU KNOW, CONTINUED DEBT MANAGEMENT EFFORTS, UH, IN ADDITION TO, UM, YOU KNOW, OUR, OUR DEFIANCE PROGRAM, OUR, YOU KNOW, TRYING TO REFINANCE, UH, OUR OUTSTANDING BONDS AT LOWER INTEREST RATES WHEN, WHEN AVAILABLE, UM, AND LOW INTEREST LOAN PROGRAMS, YOU KNOW, SPECIFIC TO WALNUT, WE'RE PURSUING WIA FUNDING.

IN FACT, THERE'S, UH, WAS AN ITEM ON TODAY'S AGENDA, UH, TO, UH, AUTHORIZE APPLYING FOR, FOR WIA FUNDING.

UM, IN ADDITION, WE ARE CONTINUING TO SEEK, UH, YOU KNOW, GRANT OPPORTUNITIES.

WE'RE, UM, YOU KNOW, BOTH FOR, UH, WE'VE LOOKED PURSUING GRANT OPPORTUNITIES, UH, FOR FLOOD FLOOD MITIGATION, UM, AT SOUTH AUSTIN REGIONAL.

WE'RE ALSO PURSUING GRANT FUNDING, UH, FOR SOME OF OUR SCADA PROJECTS.

SO, UM, YOU KNOW, WE'RE, UH, WE'RE, AND WE'RE ALSO LOOKING AT BUREAU OF RECLAMATION FUNDING, UH, POTENTIALLY FOR, FOR SOME OF OUR, OUR REUSE PROJECTS.

UM, AND THEN OF COURSE, CAPITAL RECOVERY FEE.

YOU TALKED ABOUT THAT SLOWING DEVELOPMENT IS, IS IMPACTING THE FUNDING AVAILABILITY FOR DFE AND TRANSACTIONS.

UH, BUT WHERE WE HAVE EXCESS REVENUES, YOU KNOW, WHEN, WHEN REVENUES COME IN STRONGER THAN ANTICIPATED, WE EXPECT TO CONTINUE TO, TO USE EXCESS REVENUES TO HELP WITH OUR DEBT MANAGEMENT EFFORTS.

UM, AND OF COURSE, WE'RE STILL, WE'RE STILL IN A DROUGHT DESPITE THE RECENT RAIN.

UH, YOU KNOW, LAKE LEVELS ARE STILL IN THE 50% LEVEL, AND SO WE'RE CONTINUING TO MONITOR LAKE LEVELS.

UM, ALTHOUGH, YOU KNOW, WHEN WE TALKED A LITTLE BIT ABOUT GO PURPLE, UH, YOU KNOW, UH, OUR GO PURPLE FUNDING WILL ALLOW US TO INCREASE OUR INVESTMENT IN, IN REUSE STRATEGIES, UM, INVESTMENTS IN OUR RECLAIM SYSTEM.

WE HAD, UM, A, A RECLAIM SYSTEM DEEP DIVE TODAY WITH THE, YOU KNOW, UH, WITH STAFF.

AND, UM, YOU KNOW, WE THINK THAT THE, THE GOLD PURPLE FUNDING WILL ALLOW US TO, UH, TO DOUBLE OUR INVESTMENT IN OUR RECLAIM SYSTEM, UH, YOU KNOW, OVER, OVER THE NEXT 10 YEARS AS COMPARED TO THE CURRENT FIVE YEAR PROGRAM.

UM, AND THEN, UM, YOU KNOW, OUR, OUR RATE DESIGN CONTINUES TO, TO HAVE A STRONG CONSERVATION FOCUS.

YOU KNOW, OUR, UM, YOU KNOW, OUR TIER FIVE RATE CURRENTLY IS ABOUT $14 AND 70 CENTS, UM, UNDER THE NEW PROPOSED RATE DESIGN THAT WOULD JUMP UP TO, TO OVER $18 AND, AND 50 CENTS.

AND SO WE STILL WANT TO SEND A STRONG PRICE SIGNAL TO OUR CUSTOMERS THAT, UM, YOU KNOW, WE WANT TO BE AFFORDABLE FOR ESSENTIAL USE, BUT, UM, FOR DISCRETIONARY USE, YOU KNOW, WE, UH, WE EXPECT IT TO COST, UH, YOU KNOW, QUITE A BIT AND HOPEFULLY DISCOURAGE SOME OF THAT, UH, UM, CONSUMPTION.

UM, AND THEN WE'RE CONTINUING TO, TO, TO WORK WITH THE WATER FORWARD TEAM AND, UM, YOU KNOW, WATER FORWARD SU SUPPLY STRATEGIES.

UM, RECLAIMED IS CERTAINLY A PART OF THAT, BUT THE GO PURPLE INVESTMENT WILL ALSO, UH, YOU KNOW, HELP US INVEST IN OTHER REUSE STRATEGIES AND OTHER OTHER SUPPLY STRATEGIES.

AND WITH THAT, I'D BE HAPPY TO ANSWER ANY QUESTIONS.

WELL, FIRST I WOULD JUST LIKE TO THANK YOU FOR THE PRESENTATION.

A LOT OF GOOD INFORMATION THERE.

THANK YOU TO BOTH OF YOU FOR YOUR PRESENTATION AND YOUR TEAM'S EFFORTS ON THIS.

AND, UH, COMMISSIONERS WOULD LIKE TO OPEN THIS UP FOR QUESTIONS, UH, REGARDING THE PRESENTATION CHAIR.

TOTA HAS A QUESTION.

OH, YOU NEED TO UNMUTE.

THERE WE GO.

MUCH BETTER.

SO, UM, UH, I WANTED TO JUST POINT, UH, OUT THAT WE DID INCLUDE, UM, OUR REVIEW OF THE BUDGET IN THE AGENDA, AND IT WAS APPROVED BY YOU TODAY, BUT FEEL FREE TO LOOK AT IT.

IT IS, UH, A HIGH SUMMARY OF EXACTLY WHAT WAS PRESENTED TO YOU JUST NOW.

UM, STAFF WAS VERY, VERY ACCOMMODATING IN SHARING INFORMATION ABOUT THE BUDGET AND SIGNIFICANT CHANGES, UH, AND, UH, THE COST OF SERVICE, UM, STUDY THAT WAS DONE.

AND I THINK IT WAS ALL VERY GOOD WORK, AND I THINK WE ARE DOING VERY WELL

[01:05:01]

AS A UTILITY.

UM, THE ONLY THING THAT, UH, WE ARE LOOKING AT, AND JOSEPH, UH, EXPANDED ON THIS A LITTLE BIT IS WE'RE NOT GETTING AS MUCH IN THE CAPITAL RECOVERY FREE FEE AS WE USED TO NECESSARILY ECONOMY SLOWING DOWN A LITTLE BIT.

SO THAT'S HOW WE USED TO PAY OFF A LOT OF OUR DEBT.

SO BEING PROACTIVE, THE UTILITIES USING A LOT OF, A LOT OF OTHER METHODS.

SO FUNDING FROM THE TEXAS WATER DEVELOPMENT BOARD IS A GOOD EXAMPLE.

AND JOE JOSEPH ACTUALLY WENT OVER THOSE IN THE SLIDES.

SO I JUST REALLY WANNA SAY THANK YOU TO THOSE WHO SERVED ON THAT, UH, WITH ME, WHICH, UH, WAS COMMISSIONER MUSGROVE AND COMMISSIONER ION AND, UH, FOR STAFF FOR, FOR HELPING EXPLAIN SOMETHING THAT CAN BE PRETTY COMPLEX.

WELL, AND WE'D LIKE TO THANK YOU CHAIR TERRIE YETTA FOR CHAIRING THE, THE BUDGET COMMITTEE AGAIN THIS YEAR, AND, UH, LEADING US THROUGH THAT AND APPRECIATE YOUR EFFORTS IN PAST YEARS AND THIS YEAR AS WELL.

MY PLEASURE.

AS WELL AS OTHER COMMISSIONERS ON THE, ON THE COMMITTEE.

UM, ANY OTHER QUESTIONS ON THE PRESENTATION? I HAD ONE QUESTION.

UM, WHAT'S THE WATER? THE AUSTIN WATER CONTROL CENTER GONNA BE? YEAH, THE AUSTIN WATER CONTROL CENTER.

UM, SO FOR, FOR THE LAST SEVERAL YEARS, UH, WE'VE BEEN LOOKING AT, UM, YOU KNOW, UH, A NEW FACILITY TO, TO HOUSE, UM, OUR, OUR LABORATORY STAFF, UM, WHO'S IN RENTED SPACE, BUT ALSO LOOK AT, UH, A, A FACILITY THAT WOULD CO-LOCATE, UH, YOU KNOW, OUR, OUR, YOU KNOW, CONTROL CENTER, THE SYSTEMS THAT, THAT RUN OUR WATER AND WASTEWATER SYSTEMS. AND, UH, UM, SO WE'VE, UH, IDENTIFIED A BUILDING THAT, UH, WE HAVE MADE AN OFFER ON, AND AS I MENTIONED, WE'RE, UH, GOING TO COUNCIL TOMORROW FOR APPROVAL TO MOVE FORWARD WITH THAT BUILDING.

BUT IT, UH, IT WOULD HOUSE AGAIN, YOU KNOW, OUR, OUR LAB SERVICES THAT ARE CURRENTLY IN, IN LEASE SPACE, UH, YOU KNOW, PROVIDE CONSOLES, YOU KNOW, OUR, OUR SPACE FOR OUR CONTROL CENTER, UM, OUR DISPATCH TEAM, UM, UM, PROCESS ENGINEERING.

I, I FEEL LIKE I'M FORGETTING, UH, SOME FOLKS, SECURITY MANAGEMENT, EMERGENCY MANAGEMENT, SECURITY MANAGEMENT, AND EMERGENCY MANAGEMENT.

SURE.

A BIG FOCUS FOR US THROUGH, THROUGHOUT THE COST OF SERVICE PROCESS.

I HAVE A REALLY EASY QUESTION, , PLEASE.

UM, GREAT WORK, RIGHT? SO GREAT WORK STAFF AND GREAT WORK WITH, UM, COMMISSIONER CHAIR AND EVERYBODY ON THE BUDGET COMMITTEE.

MY QUESTION REALLY IS LIKE, FROM A COMMUNITY ENGAGEMENT STANDPOINT, IT SEEMS LIKE A LOT OF GREAT WORK HAS HAPPENED.

ARE YOU, I MEAN, I KNOW THERE WAS A REGISTERED SPEAKER WHO WANTED TO TALK ABOUT IT.

SO A SIDE OF THAT IS, I MEAN, HOW'S THE COMMUNITY RECEIVING THIS INCREASE? I MEAN, IT, IT SOUNDS LIKE IT'S NOT A GREAT INCREASE, THE $8 AND 14 CENTS, BUT WHAT'S THE, THE PULSE THERE FROM THE COMMUNITY PERSPECTIVE? THANK YOU FOR THAT QUESTION.

QUESTION.

UM, YOU KNOW, I THINK, YOU KNOW, FROM THE OUTREACH THAT WE DID LEADING UP TO, UM, YOU KNOW, OUR RATE PROPOSAL THAT'S BEFORE YOU THIS EVENING, UM, I THINK THE COMMUNITY WAS IMPRESSED THAT WE HAD REACHED OUT TO THEM.

YOU KNOW, I THINK THEY, UM, AFTER THEY GOT INTO A LOT OF THE WEEDS WITH US AND HEARD FROM US DIRECTLY ABOUT HOW THE DIFFERENT THINGS IMPACT THEIR RATES, UM, IT WAS AN EDUCATIONAL MOMENT.

AND SO I REALLY FELT LIKE THEY WERE PLEASED WITH HEARING FROM US UNDERSTANDING THEIR RATES AND THEIR BILL A LITTLE BIT BETTER.

UM, YOU KNOW, I THINK THERE'S, YOU KNOW, STILL A LOT OF OPPORTUNITY IN THE COMMUNITY TO EDUCATE OUR CUSTOMERS ABOUT RATES IN GENERAL.

UM, SEVERAL OF THE FOCUS GROUP ATTENDEES, UM, ANSWERED THE QUESTION WHEN IT WAS ASKED ABOUT, YOU KNOW, WHAT, HOW DO YOU THINK IT, YOU KNOW, YOU GET YOUR RATES.

HOW DO YOU THINK AUSTIN WATER IS FUNDED? AND SEVERAL, UM, INDICATED WE, WE ARE FUNDED BY TAXES.

SO I THINK THERE'S STILL A DISCONNECT.

UM, YOU KNOW, BEING A PART OF A, A MUNICIPALLY OWNED UTILITY THERE, THAT THERE'S AN ASSUMPTION THAT TAX BASE COVERS, UM, THE WATER AND WASTEWATER UTILITY, WHICH, YOU KNOW, AS WE ALL KNOW IS NOT THE CASE.

AND SO, YOU KNOW, I THINK, UM, THERE IS A GAP THERE THAT, UM, WE'LL CONTINUE TO WORK TO, TO ADDRESS NOT ONLY IMMEDIATELY IN THE NEAR FUTURE, BUT YOU KNOW, AN ONGOING ELEMENT OF OUR COMMUNICATION ACTIVITY.

SO, YOU KNOW, THAT WAS KIND OF AN AHA MOMENT, UM, FOR US AT AUSTIN WATER.

BUT LARGELY, YOU KNOW, THE FEEDBACK WAS, YOU KNOW, VERY WARMLY RECEIVED.

THEY APPRECIATED THE OPPORTUNITY TO WEIGH IN ON OUR PRIORITIES.

UM, AND SO THAT'S THE FEEDBACK THAT I'VE RECEIVED.

I DON'T KNOW IF JOSEPH HAS ANYTHING TO ADD.

YEAH.

YOU KNOW, OBVIOUSLY WE, YOU KNOW, AFFORDABILITY WAS, WAS

[01:10:01]

AND, UM, YOU KNOW, WE FEEL LIKE, UH, THE RATES THAT WE'RE RECOMMENDING, UH, APPROPRIATELY BALANCE AFFORDABILITY WITH, UM, AN APPROPRIATE LEVEL OF INVESTMENT, BOTH IN OUR OPERATIONS AND IN OUR INFRASTRUCTURE.

UM, BUT I THINK THERE'S, THERE'S, UH, YOU KNOW, ALWAYS QUESTIONS ABOUT, YOU KNOW, WHAT MORE COULD YOU DO? WHAT MORE, UH, YOU KNOW, COULD YOU CUT IN, IN, IN THIS AREA OR, OR, OR THAT AREA.

AND, UM, I THINK, BUT BY AND LARGE, THE, THE FEEDBACK THAT, UM, THAT WE GOT FROM, FROM THE PICK WAS, UM, YOU KNOW, GENERALLY ALIGNED WHERE, WHERE WE LANDED ON, ON MOST OF OUR, OUR RECOMMENDATIONS, UH, YOU KNOW, PARTICULARLY FROM A CASH FINANCING PERSPECTIVE.

UM, AND, UM, AND, AND JUST, UH, YOU KNOW, HOW, HOW THE RATES WERE IMP IMPLEMENTED.

UM, YOU KNOW, OUR, OUR RATE CONSULTANT, UH, PROVIDED AN INITIAL DRAFT OF, OF PROPOSED RATES, UM, IN TERMS OF THE COST OF SERVICE MODEL THAT HAD BIGGER INCREASES IN THE, IN THE LOWER TIERS.

SO IT KIND OF, UM, MOVED, IT, IT LESSENED THE INCLINE OF OUR INCLINING BLOCK RATE STRUCTURE, UM, WHICH HAD THE EFFECT OF, OF BIGGER INCREASES, UH, FOR, FOR ESSENTIAL USE AT THE LOWER TIERS.

UM, AND WE, WE KIND OF PULLED BACK FROM THAT SOME.

UM, YOU KNOW, I THINK, UH, I THINK THERE'LL ALWAYS BE QUESTIONS, YOU KNOW, COULD WE DO, DO MORE? BUT I THINK BY AND LARGE, UH, WHERE WE LANDED, UH, GENERALLY ALIGNED WITH, UM, YOU KNOW, FEEDBACK WE GOT FROM THE COMMUNITY AND FROM FROM THE PUBLIC INVOLVEMENT COMMITTEE.

ALRIGHT, COMMISSIONERS, THIS IS NOT YOUR LAST CHANCE BECAUSE WE WILL BE TAKING THIS ITEM UP FOR A VOTE IN, IN A FEW MINUTES FOR ITEM 15.

SO WE'LL BE BRINGING THIS BACK UP.

UM, HOWEVER, AT THIS TIME I'M GONNA THROW A LITTLE CURVE BALL.

WE DO HAVE A REGISTERED SPEAKER, UM, TO TALK ON THIS TOPIC.

AND BECAUSE THIS IS BEFORE WE'VE ACTUALLY VOTED ON ITEM 15, WE'RE ALLOWED TO DO THAT BY RULE.

SO WE'RE LIKE TO RECOGNIZE LYNETTE COOPER TO COME UP AND, AND, AND SPEAK FROM THE PUBLIC.

THANK YOU SO VERY MUCH.

YEAH, THANK YOU VERY MUCH.

I'M SORRY I'M SO LATE.

I REALLY THOUGHT IT WAS SEVEN AND I WAS, THOUGHT I WAS HERE EARLY , SO I'M SO TERRIBLY SORRY ABOUT THAT.

UH, THE FACT THAT, UH, Y'ALL HAVE HAD REPORTED TO YOU FOR THE LAST THREE YEARS, EXCESS PROFITS SHOULD TELL YOU THAT THERE'S SOMETHING A LITTLE STRUCTURALLY WRONG, HOW THEY'RE CREATING THEIR COST-BASED RATES.

AND I, I, UH, FILED SOME COMMENTS AND I HAD ASKED THAT THEY BE DISTRIBUTED TO YOU ALL.

AND SO I KIND OF GO OVER IT.

AND ONE OF THE THINGS THAT HAPPENED, AT LEAST IN THIS COST OF SERVICE, AND THAT, AND I'M GONNA PASS THESE OUT, THESE ARE LIKE MY DEDUCTIONS FROM THE COSTS, AND I WON'T GO OVER THEM, BUT, UH, IS THAT THEY'RE LOOKING AT BUDGETS AND BUDGETS ARE FUTURE, FUTURE YEAR EXPENSES.

SO THE UTILITY IS LOOKING AT THE FUTURE YEAR EXPENSES, BUT THEN WHEN THEY GO BACK TO SET RATES, THEY USE HISTORICAL REVENUES.

SO THERE ARE MISMATCHING.

SO IF YOU HAVE, AND I CITED, UH, ONE OF THE AUTHORITIES THAT, UH, I KNOW MOST REGULATORS USE IN WATER WASTEWATER RATE CASES, AND THAT'S THE AMERICAN WATER.

UH, SO IT'S CITED IN THE THING.

SO THAT'S, THAT'S ALL I REALLY WANNA SAY.

I MEAN, ANOTHER THING THAT, UH, I MISSED WAS THAT WHEN I WOULD ASK A QUESTION, WELL, WHY DID THIS EXPENSE GO UP SO MUCH? AND I WAS PARTICULARLY CONCERNED ABOUT BAD DEBT BECAUSE BAD DEBT FOR WASTEWATER PRACTICALLY DOUBLED AND BAD DEBT FOR THE, UM, WATER WAS LIKE A 65% INCREASE.

THOSE ARE HUMONGOUS INCREASES FOR A GUESSTIMATE.

I MEAN, IT'S A BUDGET, IT'S NOT A, IT'S AN ESTIMATED EXPENSE.

SO I WANTED THAT QUESTION, AND THE COST OF SERVICE GUY JUST ANSWERED ME, SAID, WELL, THAT WAS THE BUDGET NUMBER.

AND I, AND SO I'VE GOT A, A QUESTION, UH, PENDING ABOUT WHAT IS THE WORK PAPERS SUPPORTING THIS BUDGET INCREASE THAT IS SO HIGH? AND AT THE SAME TIME, THERE'S ANOTHER KIND OF REVENUES BESIDES RATES, AND YOU'RE SEEING THAT IN SOME OF THOSE, LIKE THE LATE PAYMENT FEE, AND THERE WAS NO BUDGET INCREASE FOR THOSE.

AND THOSE ARE A DIRECT DEDUCTION FROM THE EXPENSES.

SO THEY'VE KIND OF MADE IT COST RICH MONEY POOR, AND THAT'S SOMETHING THAT Y'ALL SHOULD THINK ABOUT GOING FORWARD WHEN YOU'RE MAKING YOUR DECISION ON THE RATES.

BUT THE ONLY, THE LAST THING I WANTED TO TALK ABOUT, WHICH IS THE ONE I'M, I'M VERY EXCITED ABOUT,

[01:15:01]

IF, IF Y'ALL COULD GET EXCITED, AND THAT IS TO ASK THE WATER WASTEWATER FOLKS TO SET UP A LOW INCOME CONSERVATION PROGRAM FOR LEAKY TOILETS AND FAUCETS.

AND I GAVE YOU THE EPA BROCHURE BROCHURE, AND IT TELLS YOU HOW, UH, HOW MUCH WATER CAN BE WASTED BY A LEAKY TOILET, AND IT WILL SAVE.

AND, UH, AT OUR LAST MEETING, UH, MR. GONZALEZ, YOU KNOW, UH, SURMISED OPINED THAT LEAKY PLUMBING COULD BE A REASON WHY WE HAVE SUCH BAD DEBT.

I MEAN, PEOPLE PAY THEIR RENT AND THEIR UTILITY BILLS BECAUSE THOSE, THEY JUST HAVE TO HAVE 'EM.

SO IF THEY DON'T PAY 'EM, THAT USUALLY MEANS THEY DON'T HAVE ANY MONEY.

SO I KNOW THAT'S ALL, BUT IT'S IN THE COMMENTS.

I REALLY HOPE THAT YOU, UH, LOOK AT THAT AND RECOMMEND TO THE COUNCIL THAT THEY ADOPT A LOW INCOME PROGRAM FOR JUST THAT BASIC SIMPLE THING.

AND ONCE AGAIN, I'M SORRY FOR BEING LATE, AND THANK YOU FOR THE TIME.

THANK YOU FOR YOUR INPUT, AND THANK YOU FOR PROVIDING THE HANDOUTS AND, UH, COMMISSIONERS REVIEW THIS INFORMATION AND IF THERE'S SOMETHING YOU WANT TO HAVE A DISCUSSION ON, WE CAN TAKE THAT UP AS A FUTURE AGENDA ITEM.

THANK YOU SO MUCH FOR YOUR TIME.

ITEM 15 TO TAKE UP THE ITEM RELATED TO THE, UH, RECOMMENDATION.

YES.

AND ALL RIGHT, THANK YOU EVERYBODY.

UM, FIRST I'D LIKE I NEED TO RECOGNIZE THAT COMMISSIONER MORIARTY HAS IS, UH, LEFT THE MEETING.

SO THE REMAINING COMMISSIONERS ARE MINUS COMMISSIONER MORIARTY.

SO, UM, WE ARE GONNA MOVE TO

[15. Approve recommendation to Council of Austin Water’s Fiscal Year 2024-2025 Proposed Operating Budget, Capital Budget, new appropriations, rates, and fees, and 5-Year Capital Improvement (CIP) spending plan.]

UM, AND THERE'S ALSO ITEM 14 PENDING, UH, RECOMMENDING THE, UM, UH, BUDGET COMMITTEE REPORT, WHICH IS A SEPARATE ITEM, BUT JUST SO YOU REMEMBER, CORRECT.

I'M GONNA DO 15 FIRST AND THEN 14 SINCE 15 IS FRESH ON OUR MINDS, AND WE CAN THEN WE'LL MOVE TO 14, IF THAT'S OKAY.

COMMISSIONER PANANG SECONDS.

UH, SO ITEM 15, JUST TO BE CLEAR, APPROVE A RECOMMENDATION TO COUNCIL OF AUSTIN WATERS FISCAL YEAR 20 24, 20 25, PROPOSED OPERATING BUDGET, CAPITAL BUDGET, NEW APPROPRIATIONS RATES AND FEES, AND FIVE YEAR CAPITAL IMPROVEMENT.

CIP SPENDING PLAN.

UH, WE RECENTLY HAD THE PRESENTATION.

ARE THERE ANY NEW QUESTIONS OR COMMENTS THAT COME HAVE COME UP? UH, HEARING NONE, DO I HAVE A MOTION? MOTION TO APPROVE COMMISSIONER CYAN MOTIONS TO APPROVE.

DO I HAVE A SECOND? I'LL SECOND IT.

UM, ALL IN FAVOR, PLEASE RAISE YOUR HAND TO VOTE.

ALL RIGHT, WE HAVE SIX UNANIMOUSLY WITH COMMISSIONER MORIARTY NO LONGER AT THE MEETING.

AND NOW WE'LL MOVE TO ITEM

[14. Approve recommendation to Council of the proposed Budget Committee Report]

14 APPROVED RECOMMENDATION TO COUNCIL OF THE PROPOSED BUDGET COMMITTEE REPORT.

AND AGAIN, THANKS TO THE BUDGET COMMITTEE TEAM AND COM, UH, CHAIR RIETTA FOR THAT EFFORT.

AND BEFORE VOTING, IS THERE ANY FURTHER DISCUSSION OR ITEMS RELATED TO THAT TOPIC? COMMISSIONER CHAIR, RIETTA.

AND WE HAVE A SECOND FROM COMMISSIONER.

UM, I JUST WANTED TO KIND OF SUMMARIZE WHAT YOU HAVE THERE IN THE, IN YOUR PACKET.

UH, IT, IT BASICALLY, LIKE I MENTIONED PREVIOUSLY, SUMMARIZES WHAT WE DID AND SOME KEY ELEMENTS, UH, OF THE ACTUAL BUDGET.

SO, UM, IT, IT REALLY IS A SHORTENED VERSION OF WHAT YOU RECEIVED TODAY.

SO, UM, I JUST WANTED TO, TO KIND OF EXPLAIN WHAT IT IS, BUT IT REALLY HIGHLIGHTS THINGS THAT ARE DIFFERENT FROM THE YEAR BEFORE, OR IT HIGHLIGHTS WHY WE NEED FULL-TIME EMPLOYEES AND WHAT THEIR ROLES ARE AND WHAT THEY'RE SUPPORTING AND VARIOUS OTHER THINGS.

THAT WAS IT.

THANK YOU CHAIR, RIETTA.

ANY OTHER COMMENTS, QUESTIONS? ALRIGHT, DO I HAVE A MOTION? ALRIGHT, I'LL MAKE A MOTION.

ALRIGHT, WE HAVE A MOTION TO APPROVE COMMISSIONER PANI MOTION TO SECOND

[01:20:01]

OH, COMMISSIONER ION.

ALL THOSE IN FAVOR, PLEASE RAISE YOUR HAND.

AND THE ITEM PASSES UNANIMOUSLY.

TWO A FEW LAST ITEMS ON THE AGENDA.

SO THAT IS, THAT IS ALL FOR OUR VOTING ITEMS, AND WE DO HAVE

[18. Update from Public Involvement Committee for Austin Water Cost of Service Study meeting regarding Austin Water’s potential future rates and fees–]

ONE BEING THE, AN UPDATE FROM THE PUBLIC INVOLVEMENT COMMITTEE.

AND, UH, AND THAT WOULD BE ME.

SO WE JUST HEARD, UH, A LONG PRESENTATION ON THAT ITEM.

I WILL SAY THAT, UH, FOR MY, I'M SORRY.

UM, OH, I THINK I DID.

I'M SO SORRY.

UM, SO YOU, YOU CAN GIVE YOUR UPDATE OR, UH, LET STAFF DO THEIR PRESENTATION, UH, DEPENDING HOW, HOW QUICK YOUR, YOUR UPDATE IS BECAUSE COMMISSIONER MORIARTY LEFT AND HE DOES NOT HAVE A WATER FORWARD, UH, UPDATE.

VERY GOOD.

WELL, BECAUSE WE ALREADY HAD A, A VERY THOROUGH PRESENTATION AND WE'RE DONE VOTING ON THE ITEM.

I WILL JUST MAKE THE, THE, THE PICK, UH, UPDATE IS JUST SIMPLY THAT WE HAD OUR FINAL MEETING AND YOU, THE RESULTS OF THAT ARE IN FRONT OF YOU.

AND THIS PROCESS WILL MOVE FORWARD, UH, WITH AUSTIN WATER NOW.

AND, UM, UH, I THINK IT WAS A ANOTHER GREAT EXPERIENCE.

I DID THIS SEVEN YEARS AGO, VERY DIFFERENT LANDSCAPE THAN WE WERE IN SEVEN YEARS AGO.

SO IT WAS INTERESTING TO SEE THE DIFFERENCE BETWEEN THEN AND NOW AND, UH, THE PROACTIVE STEPS THAT THE, THE AUSTIN WATERS TAKING TO ADJUST TO THE TIME.

SO THAT'S, THAT'S ALL I HAVE.

ANY QUESTIONS RELATED TO THAT? AND THEN COMMISSIONER MORIARTY IS NOT HERE FOR ITEM NUMBER 19, SO WE'LL CLOSE THE COMMITTEE UPDATES AND WE'LL MOVE ON TO THE FINAL STAFF

[17. Staff briefing on Water Supply Strategy Implementation Update]

BRIEFING.

ITEM NUMBER 17, THE STAFF BRIEFING ON WATER SUPPLY STRATEGY IMPLE IMPLEMENTATION UPDATE.

ALRIGHT, GOOD EVENING, COMMISSIONER KEVIN CRIT AUSTIN WATER.

UM, YOU MAY RECALL THERE'S NO, UM, GREAT NEWS TO YOU.

YOU'LL RECALL THE COUNCIL ADOPTED OUR WATER FORWARD 18 PLAN IN NOVEMBER OF 2018.

SINCE THAT TIME, WE'VE BEEN ENGAGED IN A NUMBER OF, UH, ACTIVITIES TO IMPLEMENT THE VARIOUS STRATEGIES IDENTIFIED THEREIN.

UM, UH, TONIGHT'S PRESENTATION REALLY IS A FOCUS, UM, IN RESPONSE TO COMMISSIONER'S REQUEST TO REALLY LOOK AT SPECIFICALLY OUR, UH, INDIRECT POTABLE REUSE STRATEGY, WHICH IS A DEEP DROUGHT STRATEGY, AN EMERGENCY WATER SUPPLY STRATEGY.

UM, AGAIN, YOU'LL RECALL THAT SINCE MAY, UM, OUR WATER SUPPLY CONDITION HAS CERTAINLY IMPROVED QUITE MARKETABLY.

UM, OUR WE DO REMAIN IN A REGIONAL DROUGHT.

HOWEVER, I WOULD SAY AT LEAST THE IMMEDIATE URGENCY THAT WE WERE FACED WITH, IF YOU GO BACK THREE MONTHS AGO, HAS IMPROVED.

UM, NEEDLESS TO SAY THAT WE REMAIN, UH, VIGILANT IN TRYING TO, UH, MOVE THIS, UH, STRATEGY FORWARD.

AND SO WITH ME THIS EVENING IS MARISA FLORES GONZALEZ.

SHE'LL BE PRESENTING, SHE IS OUR SUPERVISOR OVER OUR, UH, WATER RESOURCES PLANNING GROUP, SOMETHING LIKE THAT.

HELLO, MOVE THIS CLOSER.

UM, AS KEVIN SAID, MY NAME IS MARISA FLOES GONZALEZ.

I'M THE SUPERVISOR OF THE WATER RESOURCES TEAM AND THE SYSTEMS PLANNING DIVISION AT AUSTIN WATER.

UM, I'LL BE PROVIDING THIS UPDATE ON OUR WATER SUPPLY STRATEGY IMPLEMENTATION.

UM, THIS IS A PICTURE OF THE, UM, SUPPLY STRATEGIES THAT ARE INCLUDED WITHIN THE WATER FORWARD 2018 PLAN.

UH, INDIRECT PORTABLE REUSE IS ONE OF THE STRATEGIES ON THIS LIST, UM, AND WILL BE THE FOCUS OF THE PRESENTATION THIS EVENING.

UH, WE HAVE BEEN, UH, DOING WORK INTERNALLY TO MAKE PROGRESS, UM, ON THIS STRATEGY.

AND, UM, LIKE KEVIN MENTIONED, EVEN THOUGH WE'VE SEEN SOME AMELIORATION OF DROUGHT CONDITIONS, UM, WE ARE STILL MOVING FORWARD, UM, WITH THAT IMPLEMENTATION WORK, UM, IN ANTICIPATION OF POTENTIALLY NEEDING TO UTILIZE THIS STRATEGY AT SOME POINT IN THE FUTURE.

SO TO PROVIDE AN UPDATE ON OUR WORK, UM, WE WILL FIRST START OFF WITH, UM, A MORE GENERAL DESCRIPTION OF WHAT INDIRECT POTABLE REUSE IS.

UM, INDIRECT POTABLE REUSE, UH, IS DEFINED AS THE USE OF RECLAIMED WATER FOR POTABLE PURPOSES BY DISCHARGING TO A WATER SUPPLY SOURCE SUCH AS SURFACE WATER OR GROUNDWATER, THE MIXED RECLAIMED AND NATURAL WATERS WILL THEN RECEIVE ADDITIONAL TREATMENT AT A WATER TREATMENT PLANT

[01:25:01]

BEFORE ENTERING THE DRINKING WATER SYSTEM TO MEET POTABLE DRINKING WATER NEEDS.

UM, THERE ARE FIVE INDIRECT POTABLE REUSE OPERATING FACILITIES, UH, THAT ARE CURRENTLY RUNNING IN TEXAS AND THEY'RE LISTED HERE ON THIS SLIDE.

UM, EL PASO WATER UTILITIES HAS THE OLDEST OPERATING IPR, UH, FACILITY RECHARGING THE BOLS AND AQUIFERS SINCE 1985.

UM, THERE ARE ALSO SEVERAL FACILITIES THAT USE, UM, WETLANDS FOR POLISHING RECLAIM WATER TO AUGMENT SURFACE WATER RESERVOIRS AT NORTH TEXAS MUNICIPAL WATER DISTRICT AND TARRANT REGIONAL WATER DISTRICT.

UM, THE CITY OF ABILENE HAS AND, UH, THE CITY OF WICHITA FALLS HAVE ALSO, UM, BEEN USING IPR FACILITIES SINCE 20 15 20 17 TO AUGMENT, UM, ADDITIONAL SERVICE WATER RESERVOIRS.

NOW, HOW WOULD AUSTIN WATER IMPLEMENT INDIRECT POTABLE REUSE AS INCLUDED IN THE 2018 WATER FORWARD PLAN? IPR WOULD BE USED AS AN EMERGENCY WATER SUPPLY STRATEGY ONLY.

THIS STRATEGY WOULD USE LADYBIRD LAKE AS AN ENVIRONMENTAL BUFFER AND WOULD CONVEY HIGHLY TREATED WASTEWATER TREATMENT PLANT EFFLUENT, UM, THAT HAD GONE THROUGH ADDITIONAL IPR ADVANCED TREATMENT, UH, TO, UM, LADY BIRD LAKE WHERE IT WOULD UNDERGO NATURAL MIXING WITH, UM, THE WATER WITHIN LADY BIRD LAKE.

AND THEN THAT WATER WOULD BE DIVERTED, UM, JUST DOWNSTREAM OF TOM MILLER DAM AT A NEW INTAKE AND PUMP STATION, UM, LOCATED ON LADY BIRD LAKE AND WOULD, THAT WOULD TAKE THAT WATER TO OVER WATER TREATMENT PLANT FOR USE IN SUPPLEMENTING OUR DRINKING WATER SUPPLIES.

THIS STRATEGY WOULD BE USED, UM, ONLY DURING THOSE EMERGENCY DROUGHT CONDITIONS, .

SO FOR A LITTLE BIT MORE DETAIL ON WHEN WE WOULD TRIGGER THE USE OF THIS STRATEGY, UH, YOU CAN SEE ON, UM, THIS SLIDE WHICH SHOWS COMBINED STORAGE PROJECTIONS OF LAKE BUCHANAN AND TRAVIS, UM, AS DATED FROM JULY 1ST OF THIS YEAR.

UM, OUR DROUGHT CONTINGENCY PLAN TRIGGERS ON THE RIGHT HAND SIDE OF THE SLIDE.

UM, THIS STRATEGY WOULD BE OPERATIONAL AT 400,000 ACRE FEET OF COMBINED STORAGE.

YOU CAN SEE THAT GOLD BOX ALL THE WAY AT THE BOTTOM, THAT WOULD BE BELOW OUR, UH, TRIGGER FOR EMERGENCY, UM, WATER SUPPLY VOLUMES, UM, AND OUR TRIGGER FOR DROUGHT CONTINGENCY PLAN STAGE FOUR.

UM, THE IPR PROJECT, UH, WOULD ONLY BE USED WHEN WE ARE BELOW 400,000 ACRE FEET OF COMBINED STORAGE.

AND AS, UH, OUTLINED AT THE WATER 4 20 18 PLAN, WE WOULD SEEK TO, UM, STOP USE OF THAT STRATEGY WHEN WE HAD EXCEEDED THAT LEVEL OF COMBINED STORAGE.

SO TO PROVIDE A PROGRESS UPDATE ON OUR WORK SO FAR, AUSTIN WATER HAS, UH, CONVENED AN INTERNAL IPR TASK FORCE, WHICH HAS BEEN PROGRESSING ON PROJECT TASKS THAT INTERNAL IPR TASK FORCE INCLUDES STAFF FROM THE OPERATIONS PROGRAM AREA, THE ENGINEERING PROGRAM AREA, OUR SYSTEMS PLANNING DIVISION, OUR PUBLIC INFORMATION OFFICE, AS WELL AS GOVERNMENT RELATIONS STAFF AND KEY EXECUTIVES WITHIN THE UTILITY.

UH, OUR WORK HAS INCLUDED A, UH, UH, DECIDING ON THE WATER SUPPLY SOURCE FOR THE INDIRECT PORTABLE REUSE PROJECT.

UM, AND STAFF HAVE ALSO DEVELOPED SCOPES FOR FURTHER ROTATION LIST CONSULTANT SERVICES TO SUPPORT PROJECT COMPONENTS.

AND WE'RE MOVING FORWARD ON CONSULTANT PROCUREMENT, UM, FOR THOSE ENGINEERING SERVICES.

THE WATER SUPPLY SOURCE FOR THIS PROJECT HAS BEEN IDENTIFIED AS, UM, SOUTH AUSTIN REGIONAL, UM, EFFLUENT, WASTEWATER EFFLUENT FROM SOUTH AUSTIN REGIONAL, UM, WOULD BE DIVERTED TO, UM, ADVANCED IPR TREATMENT FACILITIES, UH, BEFORE IT WOULD BE DISCHARGED TO LADY BIRD LAKE JUST UPSTREAM OF LONGHORN DAM.

UH, THE CURRENT PLAN IS TO CONSTRUCT AND SEPARATELY PERMIT THOSE SIDESTREAM IPR TREATMENT FACILITIES THAT WOULD FURTHER TREAT THAT AFFLUENT AS I MENTIONED, UM, BEFORE WE HAVE DEVELOPED SCOPES FOR ADDITIONAL ENGINEERING SUPPORT TO, UM, BUILD OUT OR TO CREATE THE SCHEMATIC DESIGN, IDENTIFY DESIGN CRITERIA AND TECHNICAL SPECIFICATIONS FOR THREE DIFFERENT SCOPES FOR THE INTAKE AND PUMP STATION FACILITIES ON LADY BIRD LAKE THAT WOULD, UH, TAKE THAT WATER UP TO ULRICH WATER TREATMENT PLANT FOR THE RECLAIM TRANSMISSION

[01:30:01]

MAIN.

THAT WOULD CONVEY WATER FROM THOSE IPR ADVANCED TREATMENT FACILITIES TO LADYBIRD LAKE, UM, AS WELL AS FOR THOSE SIDESTREAM WASTEWATER EFFLUENT TREATMENT FACILITIES.

UH, THAT WOULD BE, UH, TAKING THE WATER FROM SOUTH AUSTIN REGIONAL.

ALL OF THAT INFORMATION WILL BE USED, UH, TO CREATE A PACKAGE FOR A DESIGN BUILD PROJECT, UM, WHICH WE WOULD HOPE TO BEGIN PROCUREMENT FOR, UM, IN WINTER OF 2025.

UM, UH, WITH THE HOPE THAT THEN WE WOULD, UM, GO THROUGH THE PROCESS OF FULL IPR PROJECT DESIGN AND CONSTRUCTION.

THIS IS THE TIMELINE.

UM, I MENTIONED SOME PIECES OF THIS ALREADY, BUT CURRENTLY, UM, WE, AS WE GO THROUGH, UH, OUR ROTATION LIST ENGINEERING, UM, OUR ENGINEERING ROTATION LIST, UH, PROCUREMENT PROCESS, WE'RE HOPING TO GET THAT COMPLETED BY THE END OF THE SUMMER SO THAT WE CAN WORK WITH THOSE, UH, CONSULTANTS DURING FALL OF 2024, BEGIN OUR DESIGN BUILD PROCUREMENT PROCESS IN WINTER OF 2025 ISH.

UM, HOPEFULLY, UH, WITH THE GOAL OF HAVING, UM, UH, THE ABILITY TO ISSUE A DESIGN BILL CONTRACT IN SUMMER 2025 PENDING COUNSEL APPROVAL, UM, AND THEN HAVING THE ULTIMATE TARGET OF SUBSTANTIAL COMPLETION OF IPR PROJECT CONSTRUCTION IN 2028.

AS YOU CAN SEE, THAT'S A PRETTY AGGRESSIVE SCHEDULE.

UM, WE ARE STILL WANTING TO GET MANY OF THE PIECES OF THIS PROJECT PUT INTO PLACE, UM, NOT ONLY FOR, UM, MEETING POTENTIAL DROUGHT NEEDS, BUT ALSO TO HELP WITH OTHER, UM, UH, STRATEGIES THAT ARE INCLUDED WITHIN THE WATER FORWARD PLAN.

HAPPY TO ANSWER ANY QUESTIONS THAT FOLKS MIGHT HAVE.

COMMISSIONERS, UM, HAVE YOU ANY QUESTIONS? I'M NOT SEEING ANY.

I HAVE TWO.

UM, I'M JUST CURIOUS IF, BECAUSE THIS IS, SOME OF THIS HAS BEEN DONE APPARENTLY IN OTHER LOCATIONS, IF THE PERMITTING IS SOMEWHAT, IF THERE'S A BLUEPRINT OR KIND OF A KNOWN PROCESS NOW, OR IF THIS IS STILL REALLY NEW AND YOU HAVE TO KIND OF FIND YOUR WAY THROUGH THE PERMITTING, THERE IS, UM, THERE IS SOME FAMILIARITY WITHIN TCEQ, THE PERMITTING PATHWAY FOR INDIRECT POTABLE REUSE PROJECTS.

UM, YOU KNOW, EACH INDIRECT POTABLE REUSE PROJECT IS A LITTLE BIT UNIQUE AND OUR SITUATION WOULD BE UNIQUE.

HOWEVER, WE'VE ALREADY HAD, UM, CONVERSATIONS INITIAL INFORMAL CONVERSATIONS WITH TCEQ ABOUT THE PERMITTING PATHWAY, UM, AND THEY'VE SIGNALED THEIR WILLINGNESS TO WORK WITH US, UM, AS WE MOVE FORWARD.

YEAH.

HAVING SEEN THAT SOME OF THESE OTHER PROJECTS ARE ALREADY GOING THROUGH, I THOUGHT THAT WAS, THAT WAS A GOOD SIGN.

MM-HMM, .

SO, UM, AND THEN THE OTHER QUESTION I HAD WAS, UH, BECAUSE I HADN'T REALLY THOUGHT ABOUT THE WETLANDS TYPE OF SOLUTION, IS THAT SOMETHING THAT FOR AUSTIN, THE SIDESTREAM FACILITY PROJECT MAY LOOK TO SEE IF IT'S A CANDIDATE OR IF YOU ALREADY DECIDED THAT IF IT'S MAYBE NOT A CANDIDATE, JUST CURIOUS ON THAT.

THAT COULD BE SOMETHING THAT WE LOOK AT AS A PART OF A, A LONGER TERM, UH, SUPPLY STRATEGY FOR THIS NEAR TERM STRATEGY, WHICH WE'RE HOPING TO IMPLEMENT WITHIN JUST THE NEXT SEVERAL YEARS.

UM, BECAUSE OF, UH, YOU KNOW, THE TIMELINE AS WELL AS, UM, YOU KNOW, CURRENT, UM, YOU KNOW, SPACE CONSTRAINTS, UM, WE ARE THINKING OF MOVING FORWARD WITH, UM, SIDESTREAM TREATMENT FACILITIES THAT WOULD NOT INCLUDE THAT WETLAND POLISHING COMPONENT.

GREAT.

THAT, THAT'S WHAT I WAS, THOSE WERE MY QUESTIONS.

ANY, ANY THOUGHTS GENERATED BY OTHER COMMISSIONERS AT THIS POINT? ALRIGHT, THANK YOU VERY MUCH FOR YOUR PRESENTATION.

AND WE'RE EXCITED TO SEE HOW THIS MOVES ALONG.