* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [CALL TO ORDER] [00:00:05] 4 0 1. AND I'D LIKE TO CALL THE JULY COMMISSION MEETING TO ORDER. I AM YOUR SUBSTITUTE CHAIR THIS WEEK. UM, COMM CHAIR MAXWELL GAINES IS UNAVAILABLE AND VICE CHAIR TOON IS REMOTE. SO SHE IS UNABLE TO, UH, CHAIR WITHOUT BEING IN PERSON, BUT SHE WILL BE GIVING THE BUDGET UPDATE LATER. SO THANK YOU FOR JOINING US. UM, THE FIRST THING I'LL DO IS GO THROUGH AND DO A QUICK CHECK ON ATTENDEES. AND SO I HAVE COMMISSIONER MORIARTY ONLINE, I HAVE MYSELF IN PERSON. I HAVE, UH, COMMISSIONER REYES IN PERSON. I HAVE COMMISSIONER WOLFSTEN CROFT IN PERSON, COMMISSIONER PANI ONLINE. I HAVE COMMISSIONER ORTIZ IN PERSON, AND I HAVE COMMISSIONER TOON ONLINE AND COMMISSIONER TRI ONLINE. MAKE SURE I DIDN'T MISS ANYBODY. OKAY. UM, SO WITH THAT, WE'LL START WITH OUR, OUR FIRST ITEM, WHICH IS TO CHECK FOR ANY PUBLIC COMMUNICATION. WE HAVE NO PUBLIC SPEAKERS SIGNED UP. OKAY. SO WE'LL MOVE ON [APPROVAL OF MINUTES ] TO THE APPROVAL OF THE PAST MEETING'S MINUTES, AND COMMISSIONERS HAVE HAD A CHANCE TO REVIEW. AND I'LL LOOK AROUND IF THERE'S ANY DISCUSSION ON THOSE MINUTES. AND IF NOT, I'LL TAKE A MOTION TO APPROVE THE MINUTES. I MAKE A MOTION TO APPROVE. MOTION MADE BY COMMISSIONER PAN DURRANI. SECOND SECONDED. COMMISSIONER OLSTEN CROFT. SECONDS. WITH THAT, WE'LL TAKE A, UH, WE'LL PUT THAT UP FOR A VOTE. ALL COMMISSIONERS VOTING TO APPROVE, PLEASE RAISE YOUR HAND. AND WITH THAT, WE ARE UNANIMOUS. ALRIGHT, SO [DISCUSSION AND ACTION ] MOVING ON TO THE DISCUSSION AND ACTION ITEMS. AND BEFORE WE ASK, GO AROUND AND ASK FOR QUESTIONS OR RECUSALS, I WILL NOTE THAT WE ARE GOING TO POLL ITEM 15 FOR THE MOMENT THAT IS RELATED TO THE BUDGET. AND WE'LL HAVE AN UPDATE FROM COMMISSIONER TOON FOR THAT, FOR THE BUDGET COMMITTEE. THEN WE'LL HAVE A STAFF BRIEFING ON THAT. AND THEN WE'LL RETURN TO ITEM 15 FOR, UH, ANY ACTIONS. SO WITH THAT, I'LL GO AROUND AND, UH, ASK COMMISSIONERS IN THE SAME ORDER I DID ROLL. 'CAUSE THAT'S GONNA BE EASIEST FOR ME TO, UH, FOR QUESTIONS OR RECUSALS. SO STARTING WITH COMMISSIONER MORIARTY QUESTIONS OR RECUSALS, ARE YOU ASKING ME? YES, SIR. CAN YOU HEAR ME? THE AUDIO IS REAL CHOPPY. UM, COMMISSIONER MORIARTY, I WAS ASKING IF YOU HAVE ANY QUESTIONS OR RECUSALS DOESN'T SOUND LIKE HE CAN HEAR ME RIGHT NOW. LET'S COME BACK AND I'LL JUST KEEP GOING THROUGH THE LIST HERE MYSELF. I HAVE A RECUSAL ON ITEMS TWO AND ITEMS ITEM 11. AND COMMISSIONER REYES IS GONNA CHAIR THE MEETING AT THAT TIME. I WILL MOVE TO COMMISSIONER REYES. QUESTIONS OR RECUSALS? NO QUESTIONS. NO RECUSALS. VERY GOOD. COMMISSIONER WOLSTONCROFT, NO QUESTIONS. NO RECUSALS COMMISSIONER PANI QUESTIONS OR RECUSALS NO QUESTIONS. RECUSAL ON ITEM NUMBER 11. THANK YOU. MOVING TO COMMISSIONER ORTIZ. I HAVE QUESTIONS ON ITEM SEVEN, BUT NO OTHER RECUSALS OR QUESTIONS. MOVING ON TO COMMISSIONER ION. NO QUESTIONS. NO RECUSALS. AND FINALLY, COMMISSIONER, TRULY YES, I HAVE QUESTIONS, PLEASE ON FOUR AND SIX? UH, NO RECUSALS. THANK YOU. THANK YOU. AND THEN COMMISSIONER MORIARTY, UH, ARE YOU ABLE TO HEAR ME? YES. QUESTIONS ON ITEM FOUR? [00:05:05] THANK YOU. OKAY, SO WE'LL, RECUSALS AND I, YEAH. AND I MENTIONED I HAVE RECUSALS ON ITEMS TWO AND 11. SO THE CONSENT AGENDA THAT I HAVE INCLUDES ITEMS 3, 5, 8, 9, 10, 12, 13, AND 14. UM, IF THERE'S NO DISCUSSION ON THAT, IS THERE A MOTION TO APPROVE THE CONSENTS AGENDA? I MOVE TO, SHOULD I MAKE A MOTION? I, I'VE GOT A, I GOT A MOTION FROM COMMISSIONER ORTIZ AND A SECOND FROM COMMISSIONER PAN. OKAY. OKAY. SO WE'LL, WE'LL TAKE A VOTE, EVERYONE WITH THE, UH, VOTING TO APPROVE. PLEASE RAISE YOUR HAND FOR THE CONSENT AGENDA. OKAY. AND WITH THAT, THE CONSENT AGENDA IS PASSED UNANIMOUSLY. OKAY. UH, THE FIRST ITEM, WHICH [2. Recommend approval of a resolution authorizing the City Manager to apply for a 30-year low interest loan from the Texas Water Development Board (TWDB) through the Clean Water State Revolving Fund (CWSRF) loan program in the amount not to exceed $59,000,000 for the Walnut Creek Wastewater Treatment Plant Expansion project. Funding is contingent upon available funding in future budgets. ] INCLUDES A RECUSAL IS ITEM TWO. AND I'LL PASS THE CHAIR OVER TO COMMISSIONER REYES AT THIS TIME. ALRIGHT, THANK YOU. ITEM NUMBER TWO, UH, RECOMMEND APPROVAL OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO APPLY FOR A 30 YEAR LOW INTEREST LOAN FROM THE TEXAS WATER WATER DEVELOPMENT BOARD THROUGH THE CLEAN WATER STATE REVOLVING FUND LOAN PROGRAM IN THE AMOUNT NOT TO EXCEED $59 MILLION FOR THE WATER WALLER. WALNUT CREEK WASTEWATER TREATMENT PLANT EXPANSION. PROJECT FUNDING IS CONTINGENT UPON AVAILABLE FUNDING AND FUTURE BUDGETS. ALL RIGHT. DO WE HAVE ANY DISCUSSION, QUESTIONS OR ANY DISCUSSION? NO, NO. JUST A RECUSAL. OKAY. ALL RIGHT. UH, MOVE TO AN ACTION. UH, DO I HEAR, UH, I'LL MOVE APPROVE. THAT'S, UH, COMMISSIONER ION, UH, MOVING TO APPROVE. DO I HEAR I SECOND THE MOTION. COMMISSIONER ORTIZ IS SECONDING. ALL THOSE IN FAVOR, RAISE YOUR HAND. ALRIGHT. UH, ALL COMMISSIONERS APPROVE WITH, UH, COMMISSIONER PENN. UM, ABSTAINING RECUSING. ALRIGHT, UH, THANK YOU COMMISSIONER REYES. MOVING, MOVING ON [4. Recommend approval to authorize a contract for construction services for the Hornsby Bend Dewatering Facility and East Stormwater Station Improvements project for Capital Delivery Services with Matous Construction, LTD in the amount of $25,622,000 plus a $2,562,200 contingency for a total contract amount not to exceed $28,184,200. Funding: $28,184,200 is available in the Capital Budget of Austin Water. ] TO ITEM FOUR, WHICH IS REGARDING THE HORNSBY BEND DEWATERING FACILITY. UH, WE HAVE A COUPLE OF QUESTIONS FROM COMMISSIONERS MORIARTY AND TRU. I'LL START WITH, UH, COMMISSIONER TRU. YEAH, THANK YOU. JUST PULL UP MY LITTLE NOTES HERE. UM, MY QUESTIONS AROUND, ACTUALLY BOTH ITEMS FOR ME, BOTH FOUR AND SIX ARE RELATIVE. THEY'RE THE SAME. SO I NOTICED THIS IS A, A PRETTY LARGE PROJECT. THERE WAS ONLY ONE RESPONDENT TO THE BID. SO, DOES, UH, AUSTIN WATER HAVE ANY THOUGHTS ON WHY THAT WAS? UM, AND I THINK THIS CLOSED IN APRIL. SO WAS THERE A REASON THEN NOT SENDING IT BACK OUT FOR BIDDING OR TRYING SOME DIFFERENT APPROACHES TO GET JUST A MORE COMPETITIVE BID PROCESS? AND SO, UM, LET ME SUMMARIZE MY QUESTIONS. WHY DO WE HAVE ONLY ONE RESPONDENT? WHY DO WE NOT SEND IT BACK OUT? UM, AND THEN FINALLY, I JUST KIND OF A COMMENT AND MAYBE A QUESTION. I, I NOTICED THE, UM, THE BID DOCUMENT PROVIDED WAS PRETTY SIMPLISTIC AND JUST SOME, AS I AM STILL ONBOARDING INTO THIS, IS THAT KIND OF NORMAL? I DON'T KNOW IF YOU, THE REST OF YOU OR ANY OF MY COLLEAGUES LOOKED AT THE BID DOCUMENT OR IF AUSTIN WATER CAN ALSO GIMME A LITTLE BACKGROUND ON THAT AS WELL, PARTICULARLY FOR SUCH A SIGNIFICANT OBJECT. UH, CHARLES SOLAR ASSISTANT DIRECTOR, ENGINEERING TECHNICAL SERVICES. SO I'LL START WITH, UH, JUST IN GENERAL. UH, WE DO FIND THAT THE PROJECTS AT OUR TREATMENT FACILITY PLANS AT TIMES, UM, UH, IS HARD TO ATTRACT MULTIPLE BIDDERS FOR THOSE PROJECTS. UH, IT APPEARS THAT PIPELINE PROJECTS, WE USUALLY DO A BETTER, UH, HAVE A BETTER, UH, RESPONSE. IT IS NOT UNCOMMON FOR [00:10:01] PROJECTS AT FACILITIES TO HAVE A SINGLE BID. UH, WE'VE BEEN DOWN THIS ROAD A COUPLE OF TIMES. UM, SO WE DO, UH, REACH OUT, UH, JUST, UM, THE NORMAL PROCESS OF THE BIDDING PROCESS, THE CAPITAL, UM, CONTRACTING DOES REACH OUT TO THE, UH, CONTRACTING COMMUNITY. UM, EVERY BID THAT WE DO HAS COMMODITY CODES, LIKE FOR, FOR LIKE, IF WE'RE GONNA DO CONCRETE OR WE'RE GONNA DO A RE REBAR OR THINGS OF THAT NATURE. AND ALL THE CONTRACTORS SAY, YEAH, I DO THAT. AND THEY SIGN UP FOR THE COMMODITY CODE. SO IF ANYBODY WHO'S LIKE, FOR INSTANCE, UH, GONNA DO CONCRETE AND THAT'S IN COMMODITY CODE, THEY GET AN EMAIL THAT, HEY, THIS HAS GONE OUT AND IT HAS CONCRETE IN IT. SO WE DO DO THAT WITH EVERY SINGLE BID THAT WE GO DOWN THROUGH AND WE GO THROUGH ALL THE TRADES. AND THEN WHO'S EVER SIGNED UP FOR THOSE TRADES THROUGH THE, UH, UM, CAPITAL CONTRACTING, THE AUSTIN FINANCE ONLINE PROCESS, THEY GET AN EMAIL. SO THAT GOES OUT AS WELL AS WE JUST DO OUR OWN GRASSROOTS, UH, EFFORTS AS WELL. UM, FOR, UH, THE, UM, UH, LET'S SEE, FOR THE, THE NUMBER, UH, FOUR FOR THE HORNS WE BEND. UM, MATUS IS CURRENTLY HAS, UH, TWO PROJECTS ON SITE THEY'RE FINISHING UP. UM, I DO NOT KNOW IF THAT WAS A DETERRENT. UH, I HAVE SEEN AT TIMES FOR PLANTS WHEN A CONTRACTOR DOES GET, UH, ONE OR TWO PROJECTS ON THE PLANT SITE, THAT SOMETIMES WE HAVE A HARD TIME GETTING SOMEBODY ELSE TO COME IN THAT'S OCCURRED AT WALNUT CREEK AS WELL. UM, SO, BUT, BUT WE DO REVIEW THE BIDS ONCE WE DO GET THE BIDS BACK. WE DO REVIEW IT ALL BASED ON THE ENGINEERING, UM, UH, COSTS, THE, THE, THE, UH, OPINION OF, OF CONSTRUCTION COSTS WITH THE ENGINEER. AND WE'LL REVIEW THOSE. AND WE HAVE, WE, WE ENSURE OURSELVES THAT IT'S A VALUE BID FOR THE CITY. UM, WHY DO WE DO NOT GO BACK OUT? TO GO BACK OUT WOULD PROBABLY BE MEAN A NINE TO 12 MONTH DELAY. AND, UH, HIS, HIS HISTORICALLY, UH, REBIDDING A PROJECT DOES NOT MAKE IT, UH, UM, UH, CHEAPER. YOU KNOW, NORMALLY THE PROJECT, UH, GOES UP IN PRICE. IT DOES NOT GO BACK DOWN IN PRICE, ESPECIALLY IF YOU JUST REBID IT WITH THE SAME SCOPE. IF YOU CHANGE THE SCOPE, OF COURSE WE CAN CHANGE THE PRICE, BUT NORMALLY WHEN WE REBID THE PROJECT, WHICH WE HAVE IN, IN THE PAST A COUPLE TIMES, WE DO NOT GET, UM, UH, LOWER BIDS. MATTER OF FACT, THEY'RE HIGHER BIDS, UM, FOR THE DAVIS RAW WATER, UM, HYDRAULIC AND EFFICIENCY IMPROVEMENT PROJECTS, UH, THAT PROJECT DOES, UM, HAVE MULTIPLE COMPONENTS, UH, I GUESS BOTH PROJECTS DO. BUT, UM, I WOULD CALL THE, UM, THE, THE ONE AT DAVIS WATER TREATMENT PLANT. UH, IT'S IN MULTIPLE AREAS OF THE PLANT, AND IT'S A LITTLE BIT OF THIS OVER HERE AND A LITTLE BIT OF THIS OVER HERE AS WE'RE TRYING TO FACILITATE OUR REHAB AT TIMES THAT SOMETIMES, UH, UH, CAUSES A CONTRACTOR NOT TO WANT TO BID. THEY LIKE TO MAYBE TRY TO GET INTO ONE BIG THING AND THAT'S IT. VERSUS HANDLING A SOMETHING OVER HERE, THEN HANDLING SOMETHING OVER HERE FOR US. SO WE HAVE SEEN THAT IN THE PAST. SOMETIMES THAT DETERS BIDDERS AGAIN, WE TRY AS BEST WE CAN. UH, BOTH BIDDERS ARE, HAVE CURRENT WORK WITH, UH, WITH THE CITY OF AUSTIN, AS WELL AS AUSTIN WATER. THEY'RE KNOWN CONTRACTORS TO US. AND, UH, SO, UH, WE FEEL THAT, UM, THERE'S, WE SHOULD MOVE FORWARD WITH THE BIDS FOR BOTH, UH, ITEM NUMBER, UH, FOUR AS WELL AS ITEM NUMBER SIX WITH BEING SINGLE BIDS. THANK YOU, CHARLES. THANK YOU. ALRIGHT, COMMISSIONER, TRULY SOUNDS LIKE THAT'S YOUR, NO MORE QUESTIONS FOR YOU. UM, NO, NOT ON THIS SPECIFICALLY. I'LL, I'LL JUST NOTE FOR MY COLLEAGUES, I THINK WHEN WE GET TO THE LARGER BUDGET QUESTION, YOU KNOW, UM, IN GENERAL, HOW MANY OF OUR CONTRACTS ARE GOING WITHOUT MORE THAN ONE OR TWO BIDS THAT THAT WILL COME UP AS A MATTER OF JUST PUBLIC ADMINISTRATION. BUT FOR, FOR THIS ITEM, NO, I'M, I'M DONE. AND I THANK YOU. OKAY. THANK YOU FOR YOUR QUESTION. UM, COMMISSIONER MORIARTY, ARE YOU AVAILABLE? CAN YOU HEAR ME? YES. YEAH, I'M VOTING NO ON THE SINGLE BIDDER STUFF. I'VE SAID THIS A MILLION TIMES. UM, THIS IS BAD BUSINESS. MISSISSIPPI NEEDS TO DO MORE TO, UH, GET MULTIPLE BIDDERS ON THIS PROJECT. AND WHEN THEY ONLY GET ONE BID, WE GOTTA VOTE IT DOWN. AND I'M GOING TO GO FURTHER CONTACT MY, CONTACT THE MAYOR AND TELL HIM TO VOTE NO ON THIS TOO. THAT ANY OF THESE PROJECTS THAT COME THROUGH WITH A SINGLE BID, I'M A NO VOTE, BUT I'VE GOT MY QUESTIONS ANSWERED THROUGH COMMISSIONER TRILLS, UH, QUESTION. BUT I'M [00:15:01] A NO ON ALL THE SINGLE BIDDER STUFF. ALRIGHT, COMMISSIONER MORTY, THANK YOU FOR YOUR COMMENT AND FOLLOW UP. UH, OTHER COMMISSIONERS PASSING THIS AROUND. ANY OTHER DISCUSSION OR QUESTIONS BEFORE WE ENTERTAIN OUR NEXT STEPS? I, I HAVE ONE QUESTION WHICH SORT OF GETS AT, AT THE DISCUSSION THAT'S ALREADY HAPPENED. IS THERE ANYTHING THAT Y'ALL SEE RIGHT NOW AT AUSTIN WATER THAT THAT COULD IMMEDIATELY CHANGE THE FACT THAT THERE IS ONLY ONE BIDDER ON CERTAIN PROJECTS? JUST, UH, ANECDOTALLY FROM WHAT I'VE SEEN BEING AT AUSTIN WATER, SOMETIMES THE, THE GENERAL, UH, ECONOMY WILL SOMETIMES DICTATE THAT, UM, THERE ARE A LOT OF PROJECTS AVAILABLE FOR CONTRACTORS AND THEY HAVE MAYBE THE AVAILABILITY TO PICK AND CHOOSE A LITTLE BIT MORE THAN BEING A LITTLE MORE AGGRESSIVE ON SOME OTHER PROJECTS THAT PERHAPS THEY, THEY WEREN'T VALUE LOOKING AT TWO DIFFERENT PROJECTS. OH, THAT ONE LOOKS A LITTLE EASIER. THAT ONE LOOKS A LITTLE HARDER, SO WE'RE NOT GONNA DO THAT ONE. SO, UH, AGAIN, WE, WE TRY TO REACH OUT TO THE CONTRACTED COMMUNITY JUST OURSELVES. UH, CAPITAL CONTRACTING, UH, DOES, AS I MENTIONED BEFORE, HAVE THAT EXTENSIVE EMAILING LIST. UM, SO, UH, THE, I DON'T KNOW HOW ELSE WE COULD MAYBE BRING THEM IN TO THE, TO OUR, TO OUR FACILITIES. UM, WE DO, UH, PRE-BID MEETINGS. WE TRY TO DO THEM, UH, ONSITE. WE TRY TO MAKE THEM, UH, WE EVEN TRY, SOMETIMES WE DON'T MAKE THEM MANDATORY BECAUSE SOMETIMES THAT'S A DETERRENT, BUT WE DO 'EM ON SITE, THEY CAN GO LOOK AT THE SITE, THEY CAN REVIEW THE SITE AND MAKE A ASSESSMENT THERE AS WELL. SO, UM, I WISH I HAD THE MAGIC ANSWER, BUT I DO NOT. I WASN'T EXPECTING ONE, BUT THANK YOU. CHELSEA, I HAVE TWO QUESTIONS. YES, PLEASE. COMMISSIONER UNA. YES. THANK YOU. UH, FIRST, UM, IN THE PAST, I KNOW FOR LARGER PROJECTS SUCH AS WALNUT, I I DO UNDERSTAND THAT AUSTIN WATER WAS ALSO IN COMMUNICATION WITH KIND OF THE NEIGHBORING UTILITIES, LIKE SAWS AND SOME OF THE OTHER LARGER ONES THAT ALSO HAD LARGE PROJECTS COMING OUT TO MAYBE TRY AND, YOU KNOW, STAGGER OUT THE, THE PROJECTS AND THE BIDS, UM, SO THAT MORE CONTRACTORS, YOU KNOW, COULD POTENTIALLY BE OPEN TO, TO PURSUING THE PROJECT. IS THAT SOMETHING THAT'S STILL HAPPENING? CHARLES? UM, I, WE HAVE NOT TOUCHED BASE IN ABOUT THE LAST THREE MONTHS, BUT WE WERE COORDINATING, UH, WE DO FIND THAT IT IS HARD TO COORDINATE BETWEEN THE TWO CITIES. UH, YOU GET A PROJECT OUT FOR BID, UH, IT GETS DELAYED FOR AN ADDENDUM AND NEXT THING YOU KNOW, YOU'RE TRYING TO SEPARATE IT OUT BY A MONTH. THE NEXT THING YOU KNOW, YOU GOT ALL THREE IN THE SAME MONTH. SO IT IS KIND OF HARD, DEFINITELY BETWEEN CITIES. WE DO COMMUNICATE OBVIOUSLY WITH THE, WITH THE BIG, BIG, BIG PROJECTS. I KNOW $25 MILLION IS A LARGE PROJECT, BUT I'M TALKING ABOUT EVEN SUBSTANTIALLY LARGER PROJECT. WE DO COMMUNICATE THOSE AS WELL SEPARATELY FROM JUST A, A NORMAL MEETING THAT WE HAVE WITH THEM. BUT, UH, IT IS BEEN ABOUT THREE MONTHS. IT'S DUE FOR ANOTHER MEETING. OKAY. THANK YOU FOR THAT. AND THEN, UM, JUST OUTTA CURIOSITY, WHO IS THE DESIGN ENGINEER ON THIS PROJECT? UM, FOR THE HORNSBY BEND, UH, FACILITY, STORMWATER IMPROVEMENTS, IF I HAVE IT CORRECTLY. IT WAS WALKER PARTNERS. THANK YOU. OKAY, COMMISSIONERS. UM, ANY MORE QUESTIONS OR COMMENTS ON ITEM FOUR? IF NOT, I'LL ENTERTAIN A MOTION TO APPROVE THIS ITEM. I MAKE A MOTION. WE HAVE A MOTION FROM COMMISSIONER PANDA. I'LL SECOND. AND WE HAVE A SECOND BY COMMISSIONER REYES. SO, UH, TO VOTE, APPROVE, TO APPROVE THIS ITEM, COMMISSIONERS, PLEASE, UH, INDICATE YOUR VOTE BY RAISING YOUR HAND. OKAY. AND COMMISSIONERS VOTING? NO, PLEASE RAISE YOUR HAND. UH, COMMISSIONER MORIARTY, I BELIEVE YOU'RE GONNA, THIS IS, UH, FOR VOTING. NO, PLEASE RAISE YOUR RIGHT HAND. YEAH. OKAY. WE'VE GOT TWO NOS ON THIS ONE, TRULY. AND MORIARTY. THANK YOU. GOT IT. OKAY, THAT'S ITEM FOUR. WE HAVE, UH, UH, COMMISSIONER TRULY MENTIONED [6. Recommend approval to authorize a contract for construction services for the Davis WTP Raw Water Hydraulic and Energy Efficiency Improvements (RWHEEI) for Capital Delivery Services with Jay Reese Contractors, Inc., in the amount of $18,822,000 plus a $1,882,200 contingency for a total contract amount not to exceed $20,704,200. Funding: $20,704,200 is available in the Capital Budget of Austin Water. ] THAT SHE HAD A SIMILAR QUESTION ON ITEM SIX, UM, WHICH HAS ALSO BEEN PULLED FOR QUESTIONS. COMMISSIONER, TRULY, ANY ADDITIONAL THOUGHTS [00:20:01] OR QUESTIONS ON THIS ITEM? SIX. SIX, SORRY, ITEM SIX. YEP. UM, I, IT WAS, IT IS THE SAME, YOU KNOW, ONE BIDDER, IT WAS, IT WAS CLOSED MONTHS AGO. WE'RE LOOKING AT IT NOW. UM, BUT I DON'T, I DON'T THINK WE'LL, WE'LL SOURCE ANY KIND OF NEW RESPONSES. SO I, I'M OKAY WITH THIS AND MY VOTE WILL, WILL STAY THE SAME, WHICH IS A NO . OKAY. THANK YOU. UH, COMMISSIONERS, ANY OTHER QUESTIONS OR COMMENTS OR DISCUSSION ON THIS ITEM? UM, COMMISSIONER PENN? I DO HAVE ONE COMMENT. UM, I GUESS IN THE PAST, AND ACTUALLY I'M NOT SURE IF WE HAVE OR WE HAVE IT, BUT IT WOULD BE HELPFUL IF WE HAD THE ENGINEER'S OPCC, UM, OPINION OF PROBABLE CONSTRUCTION COSTS TO COMPARE TO THE BID NUMBERS, PARTICULARLY IN A SINGLE BIDDER SITUATION, UM, WHERE WE CAN ACTUALLY SEE IF, IF THIS WAS IN THE BALLPARK OR, OR POTENTIALLY HAVE A, A REFERENCE, UM, FOR THE FUTURE. WE CAN MAKE THAT NOTE. SO NOTED, UH, MANY COMMENTS ARE ON THAT. I THINK THE BACKUP THAT WE'RE PUTTING PROVIDING RIGHT NOW IS, IS WHAT WE NORMALLY ARE ACCUSTOMED TO. UH, WE CAN BRING THOSE FOR SINGLE BIDDERS. WE CAN PREPARE TO ANSWER THOSE QUESTIONS. I HAVE IT ON MY PHONE. I JUST DON'T HAVE MY PHONE WITH ME RIGHT NOW. FOR THE WHO AT THE OPCC WAS VERSUS THE LOW BID. UM, MY RECOLLECTION IS IT WAS NOT, IT WASN'T ONE OF THOSE BIDS THAT IT WAS WAY SIGNIFICANTLY HIGHER THAN THE ENGINEER'S ESTIMATE, BUT I CAN GET THAT FOR YOU. THANK YOU, COMMISSIONERS. ANY OTHER DISCUSSION OR QUESTIONS ON THIS ITEM? IF NOT, I'LL ENTERTAIN A MOTION. MOVE TO APPROVE ITEM SIX. WE HAVE A MOTION FROM COMMISSIONER WOLSTONCROFT TO APPROVE. DO I HAVE A SECOND? HAVE A SECOND. COMMISSIONER REYES SECONDS ALL VOTING TO APPROVE. PLEASE RAISE YOUR HAND, YOUR RIGHT HAND FOR, ALRIGHT. ALL RIGHT. WE AND COMMISSIONERS, UH, VOTING NO. PLEASE RAISE YOUR RIGHT HAND COMMISSIONERS, JULIAN MORIARTY. UM, AND THE OTHER COMMISSIONERS ARE VOTING TO APPROVE. SO THAT'S OUR GROUP. OKAY, THANK YOU. UM, WE WILL NOW MOVE [7. Recommend approval to authorize a contract for construction services for the Burnet Road Corridor - US 183 to Bright Verde Way project for Capital Delivery Services with DeNucci Constructors LLC, in the amount of $18,833,099 plus a $1,883,310 contingency for a total contract amount not to exceed $20,716,409. Funding: $19,926,964 is available in the Capital Budget of the Transportation and Public Works Department. $789,445 is available in the Capital Budget of Austin Water. ] ON TO ITEM NUMBER SEVEN. AND THIS WAS IN RELATION TO THE BURNETT CORRIDOR IMPROVEMENTS. AND WE HAVE STAFF MOVING TO THE FRONT DESK TO THE TABLE TO ANSWER QUESTIONS. AND COMMISSIONER TRULY HAD QUESTIONS ON THIS ONE. COMMISSIONER, TRULY PLEASE. I THINK IT WAS ME THAT HAD QUESTIONS. FOUR, SEVEN. I'M SORRY, I'M FOR SEVEN. I DON'T, YEAH, SORRY ABOUT THAT. THANK YOU. YOU THANK YOU. NO WORRIES, . UM, SO MY FIRST QUESTION IS, UM, ARE, ARE THE CURRENT PATHS ON BURNETT ROAD SUPPOSED TO BE SHARED USE PATHS? LIKE IS THAT ALREADY THE CUSTOM? DO YOU HAPPEN TO KNOW ? UM, KEVIN KOHLER, DIVISION MANAGER WITH AUSTIN WATER PIPELINE, CIP DELIVERY. UM, I BELIEVE, I, I DON'T KNOW A HUNDRED PERCENT FOR SURE. I BELIEVE THE STANDARD PRACTICE FOR NEW ROADWAYS IS TO INCLUDE SHARED USE PATHS. OKAY. AND DO YOU HAPPEN TO KNOW WHY? AND I REALIZE THAT THIS IS STRANGE THAT WE ARE, I I BELIEVE WE ARE THE ONLY COMMISSION ENTERED LOOKING AT THIS MATTER, WHICH IS WHY I WAS I A LITTLE THROWN 'CAUSE THIS IS IN THE DISTRICT THAT, THAT, UH, THE COUNCIL MEMBER THAT APPOINTED ME REPRESENTS, BUT I AM, I, I'M NOT A TRANSPORTATION EXPERT AT ALL. SO I, I WAS WONDERING IF THERE WAS, IF, IF YOU HAD ANY INFORMATION ABOUT HOW SHARED USE PATHS AFFECT PEDESTRIAN SAFETY, UH, SPECIFICALLY BECAUSE THIS IS LIKE A PARTICULARLY HIGH TRAFFIC, HIGH PEDESTRIAN TRAFFIC AREA AS IT APPROACHES THE Q2 STADIUM, WHICH HAS VERY HEAVY FOOT TRAFFIC DURING EVENTS. YEAH. SO, UM, OUR, OUR PORTION OF THIS PROJECT IS THE WATER AND WASTEWATER PIPES INSIDE. UM, WE COULD GET SOMEONE FROM AUSTIN TRANSPORTATION TO COME POTENTIALLY AND DO BRIEFING IF NEEDED OR REACH OUT TO YOU SEPARATELY. BUT I DON'T, I DON'T HAVE THE ANSWER TO THAT. OKAY. NO, THAT, THAT'S HELPFUL. UM, THEN I, I DON'T THINK THE OTHER QUESTIONS I HAVE ARE GONNA BE PARTICULARLY HELPFUL THOUGH. I WILL SAY I WILL PROBABLY ABSTAIN ON THE ITEM BECAUSE IT IS, I I DO HAVE A, [00:25:01] I I WANT SOME ANSWERS TO THOSE THINGS. OKAY. AND, AND JUST FOR CLARIFICATION, THIS IS A, A PROJECT LED BY THE TRANSPORTATION DEPARTMENT AND WE'RE JUST ADDING OUR UTILITIES JUST TO MINIMIZE COSTS TO DIG ONCE AND THOSE KIND OF THINGS. BUT I'M SURE WE CAN GET STAFF TO REACH OUT TO YOU TO ADDRESS YOUR QUESTIONS. NO, THANK YOU. UM, ANY OTHER QUESTIONS ON THIS ITEM? I WILL SAY THAT, UH, HEATHER JUST MENTIONED THAT THAT'S SOMETHING THAT WE CAN DO COMMISSIONER ORTIZ AND GET SOME INFORMATION. YES. HEATHER COOK, AUSTIN WATER CHIEF ADMINISTRATIVE OFFICER. I CAN, UM, ALERT TRANSPORTATION PUBLIC WORK STAFF TO CONNECT WITH YOU DIRECTLY. THAT MIGHT BE MORE EFFICIENT THAN TRYING TO GO THROUGH US. THEY'RE THE SUBJECT MATTER EXPERTS, BUT I WILL SAY, UM, THIS ITEM IS ON THE COUNCIL AGENDA FOR A VOTE JULY 24. SO UNLESS THERE'S A SPECIAL CALL MEETING, WE TYPICALLY WOULDN'T BRING THIS ITEM BACK TO THE COMMISSION AT THIS POINT FOR ANOTHER REVIEW. UM, JUST, JUST TO EXPLAIN OUR PROCESS THERE. SO, BUT I'M HAPPY TO CONNECT YOU WITH THE SUBJECT MATTER EXPERTS. YEAH, THAT, THAT WOULD BE SUPER HELPFUL. THANK YOU. THANKS FOR JUMPING IN ON THAT. OKAY. SO COMMISSIONERS, IF THERE'S NO FURTHER DISCUSSION ON THIS ITEM, I'LL ENTERTAIN A MOTION TO APPROVE. I CAN MAKE A MOTION. COMMISSIONER PANDA MOVES TO APPROVE. DO I HAVE A SECOND? I'LL SECOND. SECOND. FROM COMMISSIONER TO YON. UH, ALL VOTING IN FAVOR, PLEASE RAISE YOUR HAND. DID, DID, UH, PAN? YES. PANANG. BELIEVE YOU HAVE YOUR HAND. OKAY. YEAH. OKAY. SO, UH, THAT'S ALL. BUT COMMISSIONER ORTIZ, WHO IS ABSTAINING. THANK YOU. OKAY, WE HAVE ONE [11. Recommend approval to authorize an amendment to the contracts for engineering services for the 2019 Large Diameter Water and Wastewater Pipeline Engineering Services Rotation List for Financial Services Department with AECOM Technical Services, Inc.; Atkinsrealis USA, Inc.; BGE, Inc.; CAS Consulting and Services, Inc.; CP&Y, Inc. DBA STV Infrastructure; Freese and Nichols, Inc.; Jacobs Engineering Group, Inc.; H.W, Lochner, Inc. DBA K Friese & Associates, LLC; Gannett Fleming, Inc. (formerly DEC - Central Texas, LLC); Lockwood Andrews & Newnam, Inc.; and Pape-Dawson Consulting Engineers, LLC, to increase the amount by $11,000,000 for a revised total contract amount not to exceed $23,000,000. Funding: $11,000,000 is available in the Capital Budget of Austin Water.] MORE ITEM BEFORE THE, WE SKIP OVER TO THE BUDGET BRIEFINGS, UM, AND UPDATES. THAT'S, THAT'S ITEM NUMBER 11. AND WE HAVE TWO RECUSALS ON THAT. COMMISSIONER PENN. COMMISSIONER PANDA. SO I'LL PASS THIS TO COMMISSIONER REYES. ALL RIGHT, THANK YOU. THIS WAS A LONG DESCRIPTION, SO I'M GONNA READ THE PORTION OF IT. UM, SO ITEM NUMBER 11 IS RECOMMEND APPROVAL TO AUTHORIZE AN AMENDMENT TO THE CONTRACTS FOR ENGINEERING SERVICES FOR THE 2019 LARGE DIAMETER WATER AND WASTEWATER PIPELINE ENGINEERING SERVICES ROTATION LIST, UH, FOR FINANCIAL SERVICES DEPARTMENT TO INCREASE THE AMOUNT BY $11 MILLION FOR REVISED TOTAL CONTRACT AMOUNT NOT TO EXCEED $23 MILLION. FUNDING IS THROUGH THE, FOR THE 11 MILLION IS AVAILABLE IN THE CAPITAL BUDGET OF BOSTON WATER. WE HAVE TWO COMMISSIONERS, RECUSING, I DON'T KNOW IF WE HAVE ANY QUESTIONS OR DISCUSSION ITEMS FOR THIS ONE. AND IF NOT, I'LL, UM, HEAR MOTION FOR THIS ITEM. I MOVE TO APPROVE ITEM 11. ALL RIGHT, THANK YOU. UH, DO I HEAR A SECOND? I SECOND. ALL RIGHT. THAT'S A SECOND BY COMMISSIONER ION. THAT IS CORRECT. YEP. ALL THOSE IN FAVOR RAISE YOUR RIGHT, RAISE YOUR HAND. 3, 4, 5, 6. SO WE HAVE ALL COMMISSIONERS MOVING TO APPROVE WITH COMMISSIONERS. PEN AND PEN, UH, RECUSING. ALRIGHT, THANK YOU. OKAY, THANKS EVERYBODY. THAT BRINGS US TO, UM, WE'LL COME BACK TO ITEM 15 RELATED TO THE BUDGET. AND WE HAVE STAFF BRIEFINGS COMMITTEE UPDATES ON THOSE ITEMS. AND WE'LL START WITH THE [17. Update on meetings held by the Budget Committee regarding a review of Austin Water’s Fiscal Years 2026-2030 Financial Forecast and Capital Spending Plan – Vice Chair Marcela Tuñón ] COMMITTEE UPDATES FROM VICE CHAIR ION. GREAT. THANK YOU. COMMISSIONER PENN. UM, THE BUDGET COMMITTEE WAS FORMED. WE HAD TWO SEPARATE MEETINGS WHERE, UM, JOSEPH GONZALEZ AND THE AUSTIN WATER FINANCE STAFF PRESENTED THE, UH, FINANCIAL FORECAST FOR THE YEARS 2026 THROUGH 2030. THE BUDGET ITSELF WAS NOT YET FINALIZED, SO THE, UM, COMMITTEE WAS ONLY ABLE TO REVIEW THE FORECAST AND THERE WAS CERTAIN PARTS OF THE FORECAST THAT WERE APPROVED BY COUNCIL FOR RELEASE TO THE COMMISSIONS. UM, WE WERE ABLE TO ASK QUESTIONS REGARDING THE CIP AND REGARDING, UH, CHANGES TO STAFFING. UM, PRIMARILY THERE WERE OPEN POSITIONS THAT WERE CHANGED FROM TEMPORARY POSITIONS TO PERMANENT POSITIONS. UM, THERE WERE ALSO SOME CHANGES TO HOW AUSTIN WATER, UM, JUST FUNDED, [00:30:01] UM, CERTAIN PROJECTS. UM, AGAIN, THIS WAS THE FORECAST. WE DID NOT GET TO SEE THE ACTUAL BUDGET. I BELIEVE THE ACTUAL BUDGET WAS PRESENTED TO COUNCIL YESTERDAY. AND THE SAME PRESENTATION, OR ONE QUITE SIMILAR TO IT WILL BE SHARED WITH US HERE SHORTLY. UM, SO JUST WANTED TO UPDATE EVERYBODY, UH, THAT THE COMMITTEE DID MEET TWICE. WE WERE ABLE TO DISCUSS THIS INFORMATION, THE FORECASTED INFORMATION WITH, UM, AUSTIN WATERS FINANCE DEPARTMENT PRIOR TO IT GOING TO COUNCIL. DOES ANYBODY HAVE ANY QUESTIONS? UM, WE MAY NEED TO HOLD THOSE UNTIL AFTER THE FULL PRESENTATION REGARDLESS. UM, BUT JUST WANTED TO MAKE SURE EVERYBODY KNEW THAT THE COMMISSION, THE COMMITTEE CREATED BY THE COMMISSION DID MEET, UM, AND SERVED THE, THE PURPOSE OF THE CREATION. THANK YOU, COMMISSIONER ION. UM, I'LL ASK OUR COMMISSIONERS IF THEY HAVE ANY SPECIFIC CLARIFICATIONS FROM FOR COMMISSIONER ION. OTHERWISE WE DO HAVE A BRIEFING COMING THAT WILL PROVIDE MORE INFORMATION. WE'LL HAVE ANOTHER OPPORTUNITY TO ASK QUESTIONS. SO, UH, LOOKING AROUND FOR ANY, ALRIGHT, LOOKS LIKE WE'RE GOOD TO, UH, THANK YOU FOR THAT. UH, THAT COMMITTEE UPDATE, COMMISSIONER TOY, AND THANK YOU TO THE, THE, UH, COMMITTEE FOR THEIR WORK ON THAT, ON THE BUDGET ITEM. SO NOW I'LL PASS THIS OVER [16. Staff briefing on Austin Water’s Proposed Fiscal Year 2025-2026 Budget. ] TO, UH, THE STAFF BRIEFING FOR ITEM 16 ON THE PROPOSED BUDGET. GOOD AFTERNOON. UH, MY NAME IS JOSEPH GONZALEZ, UH, AUSTIN WATER ASSISTANT DIRECTOR OVER FINANCIAL SERVICES AND I, AND OUR, OUR, OUR TEAM WILL BE, UH, PROVIDING A PRESENTATION ON OUR PROPOSED BUDGET. UM, I, I'D LIKE TO START JUST TO, TO FOLLOW UP ON, UH, COMMISSIONER ION'S COMMENTS REGARDING THE, THE BUDGET COMMITTEE REVIEW PROCESS. UM, WE, WE DID GO OVER OUR, OUR FINANCIAL FORECAST. OUR FIVE-YEAR FORECAST WAS PRESENTED TO COUNCIL, UH, BACK IN APRIL. AND, AND THEREBY, UH, YOU KNOW, AVAILABLE FOR, UH, YOU KNOW, PUBLIC COMMENT AND, AND, AND RELEASE OF INFORMATION. UM, I WILL SAY THAT OUR FIVE-YEAR FORECAST REALLY SERVES AS A FRAMEWORK FOR, FOR OUR BUDGET. AND SO, ALTHOUGH WE WEREN'T ABLE TO PROVIDE DETAILS, UH, ABOUT OUR PROPOSED BUDGET, UM, OUR PROPOSED BUDGET RELIES PRETTY HEAVILY ON OUR, OUR, ON OUR FIVE-YEAR FORECAST AND, UM, IS THE BASIS ON WHICH WE BUILD OUR, OUR ANNUAL BUDGET PROCESS. UM, AS COMMISSIONER TOAN ALSO MENTIONED THE PRESENT, THE CITY MANAGER PRESENTED, UH, THE PROPOSED BUDGET TO COUNCIL YESTERDAY, WHICH, YOU KNOW, KICKS OFF THE BUDGET PROCESS AND, AND BUDGET DELIBERATION PROCESS, UH, FROM A COUNCIL PERSPECTIVE, UH, FOLLOWING THE, THE PRESENTATION TO COUNCIL AND PUBLIC RELEASE OF THE BUDGET, UH, THERE ARE SEVERAL WORK SESSIONS, UH, OVER THE NEXT MONTH FOR, UH, FOR THE COUNCIL TO DIG INTO OUR BUDGET AND FOR, UH, FOR THE PUBLIC AND COMMUNITY TO, UH, PROVIDE INPUT OVER THE BUDGET, UH, STARTING WITH THE WORK SESSION NEXT WEEK, JULY 23RD, UH, FOLLOWED BY ANOTHER WORK SESSION ON JULY 29TH THAT WILL FOCUS ON ENTERPRISE FUND DEPARTMENTS. SO, UM, SO IT'LL FOCUS ON AUSTIN WATER AND THE OTHER ENTERPRISE, UH, DEPARTMENTS. AND THEN THERE'S, UH, THREE MORE WORK SESSIONS SCHEDULED, JULY 31ST, AUGUST 5TH AND AUGUST 7TH, UH, TO, UM, AGAIN, PROVIDE INPUT TO COUNCIL AND, UH, YOU KNOW, AN OPPORTUNITY FOR PUBLIC INPUT. AND THEN FINALLY, THE, THE BUDGET PROCESS IS EXPECTED TO WRAP UP, UH, WITH ADOPTION, UH, BUDGET READINGS FROM AUGUST 13TH THROUGH 15TH. NEXT SLIDE, PLEASE. UM, SO THIS, THIS AFTERNOON, UH, WE'LL WALK THROUGH A, A COST OF SERVICE UPDATE. WE, WE UNDERSTAND THAT, YOU KNOW, THERE'S A FEW NEW COMMISSIONERS, AND ALTHOUGH, YOU KNOW, WE, WE WENT THROUGH COST OF SERVICE PROCESS LAST YEAR, YOU KNOW, IT REALLY PROVIDES THE FRAMEWORK FOR OUR, OUR BUDGET PROCESS AND OUR RATE SETTING. SO, UH, I'LL PROVIDE AN OVERVIEW OF, UH, THE COST OF SERVICE, UH, UH, STUDY THAT WAS PERFORMED LAST YEAR AND, AND HOW IT IMPACTS OUR BUDGET. UM, PROVIDE AN OVERVIEW OF, UH, THE PROPOSED BUDGET, THE, THE FY 26 PROPOSED BUDGET. UM, AND THEN I'LL HAND IT OVER TO, UM, TO SONG LEE FLOYD FLOYD, WHO'S, UM, YOU KNOW, ONE OF OUR DIVISION MANAGERS WITHIN THE, THE FINANCIAL SERVICES, UH, PROGRAM AREA TO, TO WALK THROUGH SOURCES AND USES, GET INTO SOME OF THE, THE DETAILS ON, YOU KNOW, OUR EXPENDITURE BUDGET. AND, UM, AND THEN WE'LL HAND IT OVER TO CHRISTINA ROMERO TO GO OVER OUR CAPITAL IMPROVEMENT PLAN, UH, DEBT MANAGEMENT EFFORTS. UM, AND THEN THE, THE BILL IMPACTS. AND THEN I'LL, I'LL WRAP UP, UH, THE PRESENTATION. UH, NEXT SLIDE PLEASE. [00:35:03] AND ONE MORE. THANK YOU. SO, AS I MENTIONED, WE PERFORMED A COST OF SERVICE STUDY, UH, IN 2024. UH, IT'S A PROCESS THAT WE GO THROUGH ROUGHLY, YOU KNOW, EVERY FIVE TO SEVEN YEARS. AND OUR, OUR PREVIOUS COST OF SERVICE STUDY, UH, PRIOR TO THE 2024 COST OF SERVICE STUDY, UH, ENDED IN 2017. SO, RIGHT, YOU KNOW, RIGHT ON THAT, UH, SEVEN YEAR MARK. AND THEN, UM, THE GOAL OF THE COST OF SERVICE PROCESS IS, UM, YOU KNOW, TO ENGAGE WITH THE PUBLIC BOLSTER TRANSPARENCY ABOUT OUR RATE SETTING PROCESS, UM, EDUCATE THE PUBLIC AND RAISE AWARENESS ABOUT, YOU KNOW, UH, THINGS THAT IMPACT THE COST OF SERVICE STUDY AND, AND ULTIMATELY IM IMPACT RATES. UM, AND THEN FINALLY, TO GET FEEDBACK FROM, UH, FROM THE COMMUNITY AND STAKEHOLDERS, UH, ON, UM, KEY ISSUES THAT IMPACT RATES AND, AND, YOU KNOW, OBJECTIVES THAT ULTIMATELY I INFLUENCE, UH, RATES AND RATE AND DESIGN. UH, NEXT SLIDE, PLEASE. AND SO, UM, SOME OF THE KEY QUESTIONS THAT WE ASKED AS WE WENT THROUGH, UH, THE COST SERVICE PROCESS, UM, YOU KNOW, WE, WE, UM, HAD 10 PUBLIC INVOLVEMENT COMMITTEE MEETINGS. THOSE MEETINGS WERE MADE UP OF CUSTOMER CLASS REPRESENTATIVES. UM, YOU KNOW, A COUPLE OF COMMISSIONERS FROM, FROM THIS COMMISSION. UH, A COUPLE OF, UM, CHAMBERS OF COMMERCE AND ENVIRONMENTAL, UH, COMMUNITY REPRESENTATIVES. UM, IN ADDITION, WE HAD SEVERAL OPEN HOUSES. WE HAD, UH, 10 OPEN HOUSES, UH, IN-PERSON, OPEN HOUSES, ONE IN EACH DISTRICT, AS WELL AS, UH, YOU KNOW, A COUPLE OF VIRTUAL OPEN HOUSE MEETINGS FOR THOSE, UH, FOLKS THAT COULDN'T MAKE, UH, ANY OF THE IN-PERSON MEETINGS. WE ALSO CONDUCTED SURVEYS, UM, WITH, UH, THE GOAL OF GETTING INPUT ABOUT OUR RATE SETTING PROCESS, BUT, UM, MORE SPECIFICALLY TO PRIORITIZE, UM, YOU KNOW, RATE SETTING OBJECTIVES. UM, YOU KNOW, DEPENDING ON THE OBJECTIVES THAT, THAT WE PRIORITIZE, YOU KNOW, THEY HAVE GREAT INFLUENCE ON HOW WE SET RATES AND, AND HOW WE DESIGN RATES. AND SO, UM, YOU KNOW, WE ASKED, UH, YOU KNOW, THE COMMUNITY TO, UM, TO PRIORITIZE WHAT THEIR PRIORITIES WERE IN TERMS OF MAKING SURE THAT RATES, UH, SUPPORTED THE UTILITIES FINANCIAL STRENGTH. UH, HOW IMPORTANT WAS AFFORDABILITY OR, UM, SYSTEM RESILIENCE. UM, HOW IMPORTANT IS IT FOR OUR RATES TO ENCOURAGE CONSERVATION, UM, AND EQUITY. UM, AND THEN FINALLY, YOU KNOW, UH, WHAT, WHAT WERE THEIR PRIORITIES IN TERMS OF MINIMIZING BILL IMPACTS? UH, NEXT SLIDE PLEASE. AND, AND SO FOLLOWING, YOU KNOW, PUBLIC OUTREACH FROM SURVEYS, OUR OPEN HOUSE MEETINGS AND, AND INPUT FROM OUR PUBLIC INVOLVEMENT COMMITTEE, UM, YOU KNOW, THE COMMUNITY PRIORITIZED, UH, SEVERAL THINGS. UH, BUT, BUT THE HIGHEST PRIORITY WAS AFFORDABILITY FOR ESSENTIAL SERVICES, UM, ALONG WITH SYSTEM RESILIENCY. SO THE COMMUNITY, UH, YOU KNOW, WANTED OUR RATES TO BE AFFORDABLE, UH, BUT BUT ALSO ENSURE THAT, UH, YOU KNOW, OUR, OUR SYSTEM, UH, AND OUR SERVICES WERE RELIABLE AND, AND RESILIENT. UM, UM, ONE OF THE OTHER KEY, UM, POINTS OF DISCUSSION THROUGHOUT THE COST SERVICE PROCESS WAS, UM, YOU KNOW, HOW DO WE FUND LARGE GENERATIONAL PROJECTS? UM, YOU KNOW, YOU MAY BE AWARE WE'VE GOT A, A SIGNIFICANT, UH, EXPANSION AND UPGRADE AT OUR, UH, WALNUT CREEK WASTEWATER TREATMENT PLANT. AND, UH, THAT PROJECT IS, IS, UH, YOU KNOW, ABOUT A BILLION DOLLAR PROJECT. AND, UM, YOU KNOW, WE HAVE A FINANCIAL POLICY THAT SAYS FOR OUR CAPITAL PROGRAM IN GENERAL, THAT WE WOULD TARGET BETWEEN 35 AND 50%, UH, FUNDING CASH FINANCING OF OUR CAPITAL PROJECTS. AND, UM, AND THAT, THAT CAME ABOUT AFTER, YOU KNOW, REALLY OUT OF OUR, OUR MOST, OUR PREVIOUS COST OF SERVICE STUDY. BUT TRYING TO FIND A BALANCE OF AFFORDABILITY, UH, ALSO UNDERSTANDING THAT, UH, MANY OF THE PROJECTS WITHIN OUR CAPITAL PROGRAM, UM, YOU KNOW, DON'T HAVE A 30 YEAR LIFE. AND SO WE CAN'T FINANCE, UM, YOU KNOW, AN ASSET OR A PROJECT THAT DOESN'T HAVE A 30 YEAR LIFE WITH 30 YEAR BONDS. SO THERE'S A LOT OF THINGS THAT WE'LL PAY CASH FOR JUST BECAUSE WE CAN'T, UM, FINANCE 'EM FOR 30 YEARS. AND SO THAT INCLUDES THINGS LIKE OUR VEHICLES, UM, SOME SMALLER FACILITY IMPROVEMENTS, OUR IT INFRASTRUCTURE. UM, AND, AND SO, YOU KNOW, AS WE ANALYZED OUR HISTORIC CAPITAL PROGRAM, UH, YOU KNOW, WE FELT LIKE A 35% MINIMUM, UH, YOU KNOW, ALLOWED US TO FUND THOSE THINGS THAT WE CAN'T FUND WITH BONDS. UH, BUT, BUT ALSO, YOU KNOW, APPROPRIATELY BALANCED, UH, GENERATIONAL EQUITY IN TERMS [00:40:01] OF, YOU KNOW, HAVING TODAY'S CUSTOMERS PAY FOR PROJECTS THAT, YOU KNOW, WILL HAVE A LIFE, YOU KNOW, OF AT LEAST 30 YEARS OR, OR, OR OR BEYOND. UM, BUT WHEN IT COMES TO PROJECTS LIKE THE WALNUT CREEK, UH, WASTEWATER TREATMENT, PLANT EXPANSION, YOU KNOW, A PROJECT THAT, UH, YOU KNOW, WILL SERVE OUR CUSTOMERS FOR THE NEXT 50 YEARS, UH, TO ASK TODAY'S CUSTOMERS TO PAY FOR MORE THAN A THIRD OF THAT, UM, YOU KNOW, REALLY DIDN'T PROVIDE, YOU KNOW, GENERATIONAL EQUITY THAT WE, WE STRIVE FOR IN TERMS OF HOW WE FUND OUR, OUR CAPITAL PROJECTS. AND SO WE ASKED, UM, THE COMMUNITY, WE ASKED THE PUBLIC INVOLVEMENT COMMITTEE, YOU KNOW, HOW SHOULD WE FINANCE SOME OF THOSE LARGER GENERATIONAL PROJECTS? AND, UM, YOU KNOW, THEY RECOMMENDED THAT. UM, AND WE, WE RECOMMENDED, AND THEY AGREED THAT FOR THOSE PROJECTS, WE, WE SHOULD TARGET, UH, SOMETHING MORE IN LINE WITH A 20% TARGET FOR THOSE LARGE GENERATIONAL PROJECTS, UM, SO THAT WE CAN BALANCE GENERATIONAL EQUITY, UH, BUT STILL NOT FULLY, YOU KNOW, DEBT FUND THOSE PROJECTS AND, AND KICK THAT DEBT BURDEN DOWN THE ROAD. AND ONE, ONE OF THE REASONS FOR THAT IS, IS DEBT IS, YOU KNOW, OUR MOST EXPENSIVE COST. UH, WE HAVE ANOTHER FINANCIAL POLICY, UH, THAT SAYS, UH, WE SHOULD HAVE, UM, A MINIMUM OF 1.75 TIMES DEBT SERVICE COVERAGE. AND WHAT THAT MEANS IS, UM, YOU KNOW, UH, WE NEED TO HAVE, UH, NET REVENUES, UH, SO OPERATING REVENUES MINUS, MINUS OPERATING EXPENSES OF AT LEAST 1.75 TIMES, UM, OUR ANNUAL DEBT SERVICE REQUIREMENTS. SO THAT MEANS EVERY DOLLAR OF DEBT SERVICE THAT WE HAVE, WE HAVE TO COLLECT REVENUES TO, TO BASICALLY COVER A DOLLAR 75. SO, SO DEBT SERVICE ARE, IS OUR MOST EXPENSIVE COST. AND, YOU KNOW, WHEN YOU THROW IN INTEREST, UM, YOU KNOW, UH, EVERY DOLLAR OF DEBT'S, YOU KNOW, EVERY DOLLAR WE FINANCE TYPICALLY COST US $2 OVER THE, OVER THE LIFE OF THE LOAN. SO WE WORKED REAL HARD TO TRY AND MINIMIZE, UH, DEBT SERVICE COST. AND, UH, CHRISTINA WILL TALK A LITTLE BIT MORE ABOUT THAT LATER. UH, BUT, UM, THAT WAS REALLY PROBABLY THE BIGGEST QUESTION THROUGHOUT THE COST OF SERVICE STUDY WAS HOW DO WE FUND, UH, THOSE LARGE GENERATIONAL PROJECTS IN A WAY THAT BALANCES AFFORDABILITY WITH, UM, INVESTMENTS IN NEEDED INFRASTRUCTURE. UH, ANOTHER THING THAT WE TALKED A LOT ABOUT WAS, UH, OUR CUSTOMER ASSISTANCE PROGRAM. AND, AND AGAIN, WE'LL GET INTO THIS, UH, A LITTLE BIT LATER, BUT, UH, YOU KNOW, WE, WE ARRIVED AT A, UM, A TARGET FOR OUR CUSTOMER ASSISTANCE PROGRAM TO HAVE RATES THAT WERE ROUGHLY 50% OF OUR REGULAR RESIDENTIAL RATES. UM, AND THEN OVER THE LAST FEW YEARS, WE'VE SEEN, UH, TREMENDOUS GROWTH IN OUR CUSTOMER ASSISTANCE PROGRAM AND THE, THE NUMBER OF ENROLLEES. UM, SO THAT COUPLED WITH MAINTAINING THAT 50% TARGET, UH, REALLY NECESSITATED THAT WE, UM, YOU KNOW, ASK OUR CUSTOMERS TO CONTRIBUTE MORE INTO THE COMMUNITY BENEFIT CHARGE TO, TO FUND THAT PROGRAM. OTHERWISE, WE WOULDN'T BE ABLE TO MAINTAIN A, A 50% TARGET, UH, FOR THE AVERAGE BILL, FOR OUR, OUR CUSTOMER ASSISTANCE PROGRAM CUSTOMERS AS COMPARED TO OUR REGULAR RESIDENTIAL CUSTOMERS. AND SO, UH, YOU KNOW, WE INCREASE THE COMMUNITY BENEFIT CHARGE FROM 15 CENTS PER THOUSAND GALLONS, UH, TO 30 CENTS PER THOUSAND GALLONS TO MAINTAIN THAT TARGET. UH, AND THEN FINALLY, ONE OF THE OTHER THINGS THAT WE TALKED ABOUT WAS, YOU KNOW, HOW DO WE, UH, PUT TOGETHER A, A RATE FOR OUR COMMERCIAL AND MULTI-FAMILY CUSTOMERS THAT MORE CLOSELY APPROXIMATES OUR, OUR, OUR TIERED RESIDENTIAL RATE STRUCTURE? SO THE GOAL OF OUR TIERED RESIDENTIAL RATE STRUCTURE IS TO HAVE AFFORDABLE RATES FOR ESSENTIAL SERVICES. AND SO THE VOLUMETRIC RATES, UH, YOU KNOW, START LOW, UM, BUT INCREASE AS YOU GET INTO HIGHER LEVELS OF, OF CONSUMPTION. UM, AND WE DON'T REALLY HAVE A SIMILAR MECHANISM FOR OUR COMMERCIAL AND MULTIFAMILY CUSTOMERS, PARTICULARLY FOR IRRIGATION USE. UM, AND, UH, THERE WAS A LOT OF DISCUSSION ABOUT WHETHER WE SHOULD HAVE, UH, HIGHER IRRIGATION RATES AND, UM, BECAUSE, UM, OUR COMMERCIAL AND MULTIFAMILY, UH, CUSTOMERS AND, AND DEVELOPMENTS DEPE, DEPENDING ON WHEN, UM, YOU KNOW, THE, THOSE PARTICULAR PROPERTIES WERE DEVELOPED, UH, THEY WERE DEVELOPED UNDER DIFFERENT RULES. SO TODAY, UH, A COMMERCIAL OR MULTIFAMILY, UH, DEVELOPMENT WOULD HAVE TO INSTALL AN IRRIGATION METER FOR IRRIGATION USES. AND SO WE COULD HAVE SEPARATE RATES FOR, FOR THOSE CUSTOMERS. HOWEVER, UH, CUSTOMERS ACROSS THE STREET WHO MAY HAVE BEEN DEVELOPED BEFORE THAT REQUIREMENT WENT INTO EFFECT, WOULDN'T HAVE AN IRRIGATION METER, AND WE WOULDN'T BE ABLE TO SIMILARLY TARGET THEIR IRRIGATION USE. AND SO, UM, SO THE RECOMMENDATION THAT CAME OUT RELATED [00:45:01] TO IRRIGATION USE WAS TO, UH, UTILIZE OUR, UM, ADVANCED METERING INFRASTRUCTURE, OUR A MI SYSTEM TO, UM, TO BASICALLY DEVELOP, UH, BUDGETS FOR OUR COMMERCIAL AND MULTIFAMILY CUSTOMERS BASED ON THEIR PEAKS IN DEMAND. SO, SO USE THAT, UH, INFORMATION TO IDENTIFY THEIR TYPICAL ESSENTIAL USE AND, UM, AS COMPARED TO THEIR PEAK USE DURING PEAK IRRIGATION PERIODS, AND USE THAT INFORMATION TO SET, UH, CUSTOMERS, CUSTOMER SPECIFIC BUDGETS THAT, UH, WE COULD, WE COULD SET RATES THEN AS, AS THEY, UH, GET INTO HIGHER TIERS ASSOCIATED WITH IRRIGATION OR, OR NON-ESSENTIAL USES. UH, NEXT SLIDE PLEASE. SO THOSE WERE THE RECOMMENDATIONS THAT THAT CAME OUT OF THE BUDGET PROCESS AND, AND REALLY KIND OF THE BASIS FOR THE DEVELOPMENT OF OUR BUDGET PROCESS. SO, YOU KNOW, IN ADDITION, UM, YOU KNOW, UH, WE'LL, WE'LL TALK SOME ABOUT OUR GROWING CAPITAL PLAN, UM, WHICH IS REALLY BIG DRIVER IN TERMS OF RECENT RATE INCREASES. UM, FROM 2019 THROUGH 2023, WE DIDN'T HAVE, UH, YOU KNOW, WE DIDN'T HAVE ANY RATE INCREASES. UM, AND IN 2018, WE HAD, WE ACTUALLY HAD A RATE REDUCTION. UH, BUT, UM, SO OVER THE LAST FEW YEARS WE STARTED TO HAVE, UM, IN 2024 AN INFLATIONARY RATE INCREASE. AND THEN LAST YEAR WAS THE FIRST YEAR WE IMPLEMENTED A COST OF SERVICE RATE INCREASE. BUT ON THE RESIDENTIAL SIDE, UH, WE ARE, UH, WE ARE PHASING IN THOSE RATE INCREASES. THE COST OF SERVICE STUDY GENERALLY CALLED FOR DOUBLE DIGIT RATE INCREASES, UH, ACROSS ALL OF OUR CUSTOMER CLASSES. AND, UM, YOU KNOW, ON THE RESIDENTIAL SIDE, MULTI-FAMILY SIDE, WE TOOK A MORE PHASED IN APPROACH, UM, SO THAT IT, YOU KNOW, THEY WEREN'T SEEING, UH, DOUBLE DIGIT RATE INCREASES, YOU KNOW, IN, IN YEAR ONE. AND SO WE'RE REALLY, UH, TRYING TO PHASE IN THOSE RATE INCREASES OVER A FOUR OR FIVE YEAR PERIOD. UM, BUT AS WE LOOK AT OUR BUDGET DEVELOPMENT PROCESS, YOU KNOW, WE START WITH THE GOAL OF BALANCING AFFORDABILITY, UH, WITH NECESSARY OPERATIONAL AND INFRASTRUCTURE INVESTMENTS. SO, YOU KNOW, WE WANT TO, UH, YOU KNOW, PROVIDE, UM, YOU KNOW, HIGH QUALITY WATER AND WASTEWATER SERVICES AND, AND, UH, SO IT'S IMPORTANT THAT OUR BUDGET PROVIDES THE FUNDING TO, UH, MAINTAIN THOSE OPERATIONS, UH, BUT ALSO TAKE CARE OF OUR INFRASTRUCTURE. AND, AND, BUT WE, WE DO THAT WITH AN EYE TOWARDS AFFORDABILITY. AND, AND SO THIS PROPOSED BUDGET WOULD RECOMMEND, UM, ON THE RESIDENTIAL SIDE, AN AVERAGE MONTHLY BILL INCREASE OF $8 AND 71 CENTS, WHICH EQUATES TO APPROXIMATELY, UH, 29 CENTS A DAY FOR OUR AVERAGE RESIDENTIAL CUSTOMERS. AND THEN FOR OUR CUSTOMER ASSISTANCE PROGRAM CUSTOMERS, UH, THEY WOULD SEE, YOU KNOW, AN AVERAGE MONTHLY INCREASE OF ABOUT $5 AND 50 CENTS, OR ABOUT AN 18 CENTS PER DAY INCREASE. UM, AGAIN, WE'LL CONTINUE TO PHASE IN THE COST OF SERVICE, UM, AND COMMUNITY ENGAGEMENT RESULTS. UM, YOU KNOW, OUR PROPOSED BUDGET ALSO LOOKS TO MAINTAIN OUR FINANCIAL STRENGTH AND STABLE BOND RATINGS. UM, BOND RATINGS HAVE BEEN STABLE SINCE 2016. UM, AS WE CAME OUT OF OUR PREVIOUS DROUGHT OF RECORD FROM 2008 TO 2015, WE WERE ON, UH, A NEGATIVE, UH, RATING WATCH, UH, BY ONE OF OUR RATING AGENCIES. AND, UM, YOU KNOW, IN 2016, WE, WE CAME OFF OF THAT NEGATIVE WATCH AND HAVE HAD STABLE BOND RATINGS SINCE THEN. WE, YOU KNOW, OUR, OUR GOAL IS TO MAINTAIN THOSE BOND RATINGS, UH, PARTICULARLY BECAUSE THEY IMPACT THE RATES AT WHICH WE CAN BORROW FOR OUR CAPITAL PROGRAM. UM, AND THEN THIS BUDGET, UH, PRIORITIZES, UM, YOU KNOW, CONTINUED STRATEGIC INVESTMENT, UH, YOU KNOW, WITH STAFF, BOTH IN TERMS OF NEW FTES, BUT WE'VE ALSO OVER THE LAST FEW YEARS, FOCUSED PRETTY HEAVILY ON, YOU KNOW, CONVERTING TEMPORARY OR CONTRACT POSITIONS TO BRING THOSE POSITIONS IN-HOUSE. AND, AND THEN FINALLY, UH, THIS BUDGET INCLUDES ADDITIONAL INVESTMENTS, UH, TO SUPPORT OUR WATER LOSS EFFORTS AS, AS WELL AS OUR CONSERVATION EFFORTS IN THE FORM OF INCREASED ADVERTISING AND, AND, UM, AND PUBLIC, UH, EDUCATION MESSAGES. NEXT SLIDE THERE. UM, AND THEN, UM, THIS IS, UH, YOU KNOW, A HIGH LEVEL FUND SUMMARY, WHICH IS KIND OF THE WAY WE TALK ABOUT OUR BUDGET IN TERMS OF SUMMARIZING, UH, OUR REVENUES, OUR EXPENDITURES, UH, HOW THAT RESULTS IN OUR CHANGE IN FUND BALANCE. THE REVENUES OVER EXPENDITURES, YOU KNOW, CAN PRODUCE A DEFICIT AS YOU SEE, UM, IN THE FY 25, UH, AMENDED BUDGET, UM, AS WELL AS THE PROPOSED BUDGET. BUT I WOULD HIGHLIGHT, UH, IF YOU [00:50:01] LOOK AT, UM, THE ENDING FUND BALANCE, WHICH IS KIND OF IN THE MIDDLE OF THE PAGE, UH, YOU KNOW, OUR, OUR BUDGET CALLED FOR AN ENDING FUND BALANCE OF AROUND $268 MILLION. UM, AND BECAUSE WE HAD, UH, YOU KNOW, HIGHER THAN ANTICIPATED REVENUES IN THE EARLY PART OF THE YEAR, UM, LARGELY DUE TO WEATHER CONDITIONS AND DROUGHT CONDITIONS, UM, WE EXPECT TO END OF THE YEAR, UH, WITH A HIGHER THAN PLANNED ENDING FUND BALANCE. AND SO, DESPITE THE, UM, THE PROPOSED DEFICIT FOR NEXT YEAR, WE EXPECT TO END, UH, WITH AN ENDING FUND BALANCE. THAT'S IN LINE WITH WHERE WE THOUGHT WE WOULD BE FOR, UH, FISCAL YEAR 25. YOU SEE AT THE BOTTOM OF THE PAGE, UH, THREE OF OUR KEY FINANCIAL METRICS, UM, TALKED ABOUT DEBT SERVICE COVERAGE EARLIER. UM, OUR FINANCIAL POLICY FOR DEBT SERVICE COVERAGE IS 1.75 TIMES COVERAGE. UM, AND YOU CAN SEE THAT, UH, BOTH IN THE CURRENT YEAR AND, AND IN THE PROPOSED BUDGET YEAR, WE WOULD BE ABOVE THE 1.75 TIMES FINANCIAL POLICY TARGET. UH, FOR DAYS CASH ON HAND. OUR, OUR TARGET IS A 180 DAYS. UM, AND, AND YOU CAN SEE WE'RE ABOVE THAT, ALTHOUGH I WOULD HIGHLIGHT THAT AS OUR BUDGET GROWS, UM, YOU KNOW, A A DAY OF CASH, UH, INCREASES EVERY TIME OUR, OUR BUDGET GROWS. SO, UH, FOR, FOR EXAMPLE, FOR FISCAL YEAR 24, A DAY'S WORTH OF CASH WAS ROUGHLY 900 MILLION. AS WE GET INTO FISCAL YEAR 26, IT'S MORE IN THE 1.1, UH, MILLION DOLLARS RANGE. IN OTHER WORDS, IT COST US, UH, ABOUT A MILLION 0.1 A DAY TO RUN THE UTILITY, UM, JUST IN TERMS OF OPERATING COSTS. UM, SO EVEN IF, UM, YOU KNOW, EVEN IF OUR CASH REMAIN FLAT, UH, BECAUSE A DAY'S CASH IS GROWING HIGHER, THE THE NUMBER OF DAYS EQUIVALENT WILL DROP. AND THAT'S ONE OF THE THINGS THAT YOU'RE SEEING IN TERMS OF THE DROP. YOU KNOW, WE EXPECT TO END FISCAL YEAR 25 WITH 274 DAYS CASH, BUT WITH THE COMBINATION OF THE PLANNED DEFICIT, UM, FOR NEXT YEAR, UH, AGAIN, TO, TO PHASE IN RATES, RIGHT? IF WE'VE GOT AVAILABLE FUNDING THAT WE CAN USE TO, TO MITIGATE, YOU KNOW, UH, A LARGER RATE INCREASE, WE, WE TRY AND DO THAT. UM, SO BOTH THE COMBINATION OF THE, THE PROPOSED DEFICIT AND, UH, OUR DAYS OR OUR DAY, OUR AMOUNT OF CASH TO OPERATE, YOU KNOW, A DAY, UH, YOU KNOW, WE EXPECTING TO SEE THAT DROP TO ABOUT 248 DAYS. AND THEN FINALLY, IN TERMS OF FTES, WE'LL GET INTO THE DETAILS, BUT, UH, WE EXPECT TO GROW OUR FULL-TIME EQUIVALENT EMPLOYEES, OUR NUMBER OF BUDGETED POSITIONS, UH, FROM 1,410, UH, IN THE CURRENT YEAR TO 1,439. AND WITH THAT, I'LL TURN IT OVER TO SONG LEE FLOYD TO GO OVER SOURCES AND USES. THANK YOU, JOSEPH SOLE, FLOYD AUSTIN, WATER DIVISION MANAGER, BUDGET ACCOUNTING. SO THE FOLLOWING OF YOUR SLIDES WILL DISCUSS THE SOURCES AND USES OF FUNDS. AUSTIN WATER'S TOTAL FY 2026, PROPOSED SERVICE REVENUE IS AT 761.7 MILLION. THIS IS 56.7 MILLION OH 8% INCREASE FROM THE CURRENT YEAR FY 25 BUDGET. AND THE SERVICE, UH, AUSTIN WATER SERVICE REVENUE INCREASED 15.2 MILLION, AND IT'S ABOUT 4.3% INCREASE. AND THE WASTEWATER SERVICE REVENUE INCREASED 44.6 MILLION, WHICH IS ABOUT 13.7% INCREASE. AND THIS IS TO MOSTLY TO RAMP UP THE FOR INCREASED DEBT SERVICE COST AND THE GREATER CASH TRANSFER TO CIP RELATING TO THE WALNUT CREEK EXPANSION. AND ALSO, AS JOSEPH MENTIONED, JUST GENERAL, UH, UH, GROWING CAPITAL PLAN. NEXT SLIDE, PLEASE. SO, AS WATER'S TOTAL, UH, FI 2026, PROPOSED EXPENDITURE BUDGET IS AT $849.9 MILLION, AND THIS IS 76.3 MILLION. OH, ABOUT CLOSE TO 10% INCREASE COMPARED TO FY 12 2 5 CURRENT YEAR BUDGET. AND WE DID A BIT OF CALCULATION. [00:55:01] SO OVER 60% OF THIS INCREASE ACTUALLY IS RELATED TO INCREASED TRANSFERS AND DEATH SERVICE COST. THE PROGRAM REQUIREMENT INCREASED ABOUT $30 MILLION. UH, WE HAVE ANOTHER SLIDE LAID ON TO, UH, PROVIDE A LITTLE BIT MORE INFORMATION. UH, SO AS, AS I SAID, MAJORITY OF THE INCREASE IS ACTUALLY DUE TO THEIR SERVICES COST AND, UH, TRANSFER OUT. NEXT SLIDE, PLEASE. SO THIS SLIDE PROVIDES A BIT OF MORE DETAILED INFORMATION ON OUR MAJOR TRANSFER OUTS. THE FIRST ONE IS TRANSFER TO GENERAL FUND, WHICH IS AT 54.8 FOR PROPOSED FY 2026 BUDGET. AND THIS IS A $2.5 MILLION INCREASE COMPARED TO CURRENT YEAR, AND WHICH IS ALSO A 4.7% INCREASE. AND THE GENERAL FUND TRANSFER AMOUNT IS CALCULATED BASED ON 8.2% OF THE THREE YEAR AVERAGE OF OUR AUSTIN WATERS GROSS REVENUE. THE NEXT ONE, UTILITY BILLING SYSTEM SUPPORT, UH, IS ACTUALLY A DECREASE, UH, COMPARED TO PRIOR, UH, CURRENTLY FISCAL YEAR, IT'S A $1.7 MILLION DECREASE. AND THAT'S MOSTLY DUE TO THE DECREASE, UH, MANUAL MIDDLE RATING CONTRACT COST. AND THEN I'M NOT GOING TO GO THROUGH ALL OF THEM. I'LL JUST HIGHLIGHT A FEW LARGER ONES. UH, THE ADMINISTRATIVE SUPPORT IS ACTUALLY THE CD, UH, SUPPORT SERVICE COST. SO, WHICH INCLUDES, UH, COST RELATED TO CITY FINANCE, UM, HRD, CITY MANAGER'S OFFICE, FOR EXAMPLE, CITY MANAGER'S OFFICE, AND, UH, UM, LAW. SO WE, WE SHARE THESE SERVICES, SO WE HAD TO PAY FOR OUR SHARES COST. SO, AND JUST FOR EVERYBODY'S, UH, UH, INFORMATION. HRD IS OUR HUMAN RESOURCES DEPARTMENT, THE CITY'S, UH, HUMAN RESOURCE DEPARTMENT. THANK YOU, JASON. SO, AND THEN WE ALSO HAVE A FEW SMALLER TRANSFERS, UH, CTM, WHICH IS, UH, CITY IT SERVICES, AND THEN CIP, UH, MANAGEMENT, ECONOMIC DEVELOPMENT, UH, THEN, UH, UH, UH, SOME EVEN SMALLER WORKS COMPENSATION AND, UH, UH, RADIO AND OTHER, UH, CTECH, OTHER SMALL, SMALL, UH, INTERDEPARTMENTAL TRANSFERS. SO, NEXT SLIDE PLEASE. SO, EARLIER I MENTIONED THAT, UH, MOST OF OUR EXPENDITURE BUDGET INCREASE, UH, OVER 60% IS DUE TO THEIR SERVICES AND THE TRANSFER OUT, BUT OUR OPERATING, UH, REQUIREMENTS, SOMETIMES WE CALL A PROGRAM REQUIREMENTS. UH, PROPOSED BUDGET DID INCREASE $30 MILLION COMPARED TO CURRENT YEAR FY 2025. SO AS YOU CAN SEE, WE HAVE A FEW CATEGORIZE CATEGORIES HERE. UH, THE FIRST THREE NUMBERS UNDER WAGES AND BENEFIT, IF YOU ADD IT UP, IT'S ACTUALLY $17.3 MILLION, WHICH REPRESENTS OVER 50%, WHICH I, I BELIEVE IT'S 57% OF THE TOTAL PROGRAM REQUIREMENT OR OPERATING REQUIREMENT INCREASE. AND SO THE FIRST ONE, $8.4 MILLION, THAT'S BECAUSE IN TOTAL FIVE AUSTIN WATER IMPLEMENTED THE RETENTION STIPEND CONVERSION TO BASE WAGE, UH, WHICH WE DID NOT BUDGET FOR IT DURING FY 2 0 2 5 BUDGET DEVELOPMENT PROCESS. SO NOW WE HAD TO ADD IT BACK INTO THE 26TH BUDGET. AND THEN THE FIVE POINT MILLION DOLLARS INCREASE THAT, UH, BUDGET OFFICE DECIDED TO PROPOSE A 4% ACROSS THE BOARD CITYWIDE WAGE ADJUSTMENT FOR FY 26. AND SO THE AMOUNT FOR AUSTIN WATER SHARE IS $5.4 MILLION. AND WE ALSO PROPOSED 31 NEW FTES FOR FFY 2026, WHICH IS ABOUT $3.5 MILLION. AND WE DO HAVE A SLIDE LAID ON TO PROVIDE A LITTLE MORE INFORMATION ON NEW FTES. I [01:00:01] ALREADY TOUCHED THE UTILITY BILLING SYSTEM SUPPORT, WHICH IS A, ACTUALLY A DECREASE, AND SOME OTHER CONTRIBUTORS TO THE INCREASE OF THE BUDGET IS CONTRACTION COMMODITIES. UH, WE HAVE $2.4 MILLION IN CHEMICAL COST, AND THEN WE ALSO INCREASED OUR EFFORTS IN WATER CONSERVATION EDUCATION AND ADVERTISING CAMPAIGN. UH, WE ALSO, UH, ADD ADDED FUND IN PUBLIC WORK, STREET CARD, UH, COST, AND ALSO THAT TO HELP ADDRESS THE WATER LOSS, WE ARE ACTUALLY, UM, ADDED A MILLION DOLLAR FOR WATER METER ACCURACY TESTING CONTRACT AND CITYWIDE, UM, CITY MANAGER'S OFFICE IS LEADING THE REBRANDING EFFORT. AND WE WERE TOLD THAT WE HAD TO, UH, BUDGET, UH, FUND ACCORDINGLY TO HELP WITH THE EFFORT. SO WE HAD INCLUDED $1 MILLION IN THE FY 26 PROPOSED BUDGET FOR THE CITY WIDELY BRANDING. AND TO, TO, TO BE CLEAR, THAT'S THE ESTIMATE OF THE COST FOR AUSTIN WATER TO, TO REBRAND, UM, AND, YOU KNOW, INCLUDING, YOU KNOW, UH, NEW UNIFORMS FOR, FOR STAFF. UH, BUT, BUT MOST OF THAT COST, UH, WILL BE, YOU KNOW, VEHICLE REBRANDING, UM, FACILITIES REBRANDING. AND SO IT'S THE, ALTHOUGH IT'S A CITYWIDE EFFORT, THESE ARE THE COST SPECIFIC TO AUSTIN WATER. THANK YOU, JOSEPH. NEXT SLIDE, PLEASE. SO THIS SLIDE PROVIDES A BIT MORE INFORMATION ON THE 31 NEW FTS THAT WE PROPOSED FOR FY 2026. UH, WE CATEGORIZED THEM BASED ON EOM, UH, EFFECTIVE UTILITY MANAGEMENT ATTRIBUTES. SO WE HAVE 11, THAT'S FOR THE OPERATIONAL OPTIMIZATION, SIX FOR CUSTOMER SATISFACTION, SIX FOR ENTERPRISE RESILIENCY, AND FIVE FOR WATER RESOURCE SUSTAINABILITY. I DO WANNA POINT OUT, THIS IS ACTUALLY THE FIRST YEAR WE HAVE PROPOSED NEW FTES FOR THIS, UH, ATTRIBUTES. SO INCLUDED IN THESE FIVE NEW FTS, WE HAVE AN ENGINEER TO SUPPORT FUTURE INDIRECT PORTABLE, UH, REUSE EFFORT. WE HAVE A ENVIRONMENTAL COMPLIANCE SPECIALIST TO HELP IMPLEMENT WATER FOREST STRATEGIES, LANDSCAPE TRANSFORMATION ORDINANCE, AND WE ALSO HAD INCLUDED A HYDRO GEOLOGIST TO SUPPORT THE AQUAPHOR STORAGE AND THE RECOVERY EFFORT. AND THEN OF THE, UM, SO WE ALSO HAD TWO PROPOSED NEW FTS FOR EMPLOYEE LEADERSHIP AND DEVELOPMENT, AND ONE FOR INFRASTRUCTURE PERFORMANCE. SO ONE THING I DO WANT TO POINT OUT IS OTHER, THE TOTAL 31 NEW FTS THAT WE PROPOSED, 11 IS ACTUALLY A TEMPORARY OR CONTRACT CONVERSION, MEANS WE CURRENTLY HAVE A TEMPORARY EMPLOYEE OR CONTRACTORS WORKING AND, UH, ADDING THE NEW FTE WILL HELP US. UM, WELL, WE WON'T NEED THE TEMPORARY EMPLOYEE CONTRACTORS ANYMORE, SO WILL BE A CONVERSION FROM DISTANCE. SO THAT IS, UM, THE INFORMATION WE HAVE FOR THE SOURCES AND THE USES OF FUNDS. I DO WANT TO SEE IF ANYBODY HAS ANY QUESTIONS. SO, AND FEEL FREE TO ASK QUESTIONS AS WE GO, BUT CERTAINLY THERE WILL BE TIME AT THE END, UH, FOR, FOR ANY QUESTIONS. SO, UH, IF, IF YOU HAVE A BURNING QUESTION, FEEL FREE TO ASK, UH, OTHERWISE, UM, WE'LL ADDRESS 'EM AT THE END. OKAY, THANK YOU. I'M CHRISTINA ROMERO, I'M FINANCIAL MANAGER WITH AUSTIN WATER, AND I'LL BE, UH, BEGINNING WITH THE CAPITAL IMPROVEMENT PLAN. NEXT SLIDE. SO THIS IS OUR CIP PLAN FUNDING. THIS SHOWS FIVE YEARS, UH, OF PLANNING EFFORTS OF EACH FIVE YEAR PLAN. AS YOU CAN SEE, IT'S AN INCLINING PLAN. UM, THE PROPOSED CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 26 THROUGH 30 AMOUNTS TO 2.74 BILLION, REPRESENTING AN INCREASE OF ABOUT 446 MILLION OR 20% COMPARED TO [01:05:01] THE PREVIOUS YEAR'S FIVE YEAR PLAN. APPROXIMATELY 95% OF THE PROJECTS IN THIS PROPOSED PLAN, UM, ARE CARRYOVERS FROM THE EARLIER PLAN THAT FOCUS ON RENEWAL AND REPLACEMENT OF CRITICAL INFRASTRUCTURE. THE INCREASE IN FUNDING IS INTENDED TO SUPPORT ONGOING PROJECTS THAT WERE ALREADY UNDERWAY OR INCLUDED IN LAST YEAR'S PLAN. NOTABLY, THE EXPANSION OF WALNUT CREEK WASTEWATER TREATMENT PLAN IS A KEY PROJECT AS WELL. FURTHERMORE, THE CIP EMPHASIZES INVESTMENTS IN NEW TECHNOLOGY AND SYSTEM EXPANSION WHILE PRIORITIZING CAPITAL INVESTMENTS AIMED AT ENHANCING RESILIENCY IN RESPONSE TO CHALLENGES RELATED TO AGING INFRASTRUCTURE, EXTREME WEATHER, AND GROWING POPULATION. NEXT SLIDE PLEASE. SO THIS IS OUR FIVE YEAR CAPITAL PLAN HIGHLIGHT SLIDE, UM, THAT IS BROKEN OUT BY WATER, WASTEWATER AND RECLAIMED WATER. SO IT REPRESENTS THE, UM, TOTAL SPENDING PLAN OVER THE FIVE YEAR PERIOD. IT HIGHLIGHTS KEY PROJECTS AIMED AT GROWTH ENHANCEMENTS AND PRIORITY IMPROVEMENTS TO SUPPORT THE RESILIENCY OF THE SYSTEM. THE DATA SHOWS THAT THE MAJORITY OF THE SPENDING IS PRIMARILY ALLOCATED TO THE WASTEWATER PROJECTS, ALTHOUGH NOT INCLUDED IN THIS LIST, UM, THAT YOU SEE ON THE SLIDE, WE WANT TO EMPHASIZE THE POLYBUTYLENE REPLACEMENT PROJECT, WHICH AIMS TO REDUCE WATER LOSS. OVER THE PAST 10 YEARS. WE HAVE SPENT, ON AVERAGE ABOUT 1.5 MILLION, UH, PER YEAR ON REPLACING POLYBUTYLENE SERVICE LINES, AND WE PLAN TO TRIPLE THAT SPENDING OVER THE NEXT 10 YEARS. ADDITIONALLY, WE ARE COLLABORATING WITH THE TEXAS WATER DEVELOPMENT BOARD TO SECURE LOW INTEREST LOAN FUNDING FOR THIS PROJECT, AND WE ANTICIPATE TO CLOSE ON THAT LOAN THIS NOVEMBER. NEXT SLIDE, PLEASE. AND NEXT SLIDE. THERE WE GO. UM, SO NOW I'LL, UM, TALK ABOUT DEBT SAVINGS. UH, I KNOW JOSEPH HAD PREVIOUSLY MENTIONED THAT IN THE BEGINNING, UM, OUR DEBT SAVINGS, UM, AND OUR DEBT MANAGEMENT EFFORTS, UM, ARE PRESENTED IN THIS SLIDE, BOTH HISTORICAL DATA AND FUTURE PROJE PROJECTIONS RELATED TO DEBT SERVICE REQUIREMENTS. THIS SLIDE HIGHLIGHTS THE IMPRESSIVE NET PRESENT VALUE SAVINGS OF $625 MILLION TO DATE DEMONSTRATING THE EFFECTIVENESS OF OUR DEBT MANAGEMENT STRATEGIES. AS JOSEPH MENTIONED, FOR EVERY ADDITIONAL, UH, DOLLAR OF DEBT WE REQUIRE A DEBT SERVICE COVERAGE OF A DOLLAR 0.75 FROM OUR CUSTOMERS. DEBT SERVICE COVERAGE REFERS TO THE NET REVENUES AVAILABLE FOR DEBT SERVICE, WHICH IS CALCULATED BY SUBTRACTING THOSE OPERATING EXPENSES FROM REVENUES, AND THEN THAT REMAINING AMOUNT IS THEN COMPARED TO OUR ANNUAL DEBT SERVICE REQUIREMENTS. THE BLUE BAR HERE REPRESENTS CURRENT DEBT SERVICE REQUIREMENTS. WHILE THE SHADED GREEN BAR INDICATES DEBT SERVICE SAVINGS, THE PURPLE LINE SHOWS DEBT SERVICE AS A PERCENTAGE OF TOTAL REQUIREMENTS. IN 2016, OUR DEBT SERVICE ACCOUNTED FOR SLIGHTLY OVER 40% OF OUR TOTAL REQUIREMENTS. SINCE THEN, THERE HAVE BEEN IMPROVEMENTS. HOWEVER, WE EXPAND OUR CAPITAL AS WE ARE EXPANDING OUR CAPITAL PLAN. WE ARE WORKING TO CREATE CAPACITY FOR NEW PROJECTS. IN THE FINAL THREE YEARS THAT YOU SEE ON THIS CHART, OUR GOAL IS TO BRING DEBT SERVICE REQUIREMENTS CLOSER TO THE $200 MILLION RANGE AND THE 625 MILLION IN NET PRESENT VALUE SAVINGS RESULTS FROM DFE TRANSACTIONS, DEBT REFUNDINGS, LOW INTEREST LOANS FROM THE TEXAS WATER DEVELOPMENT BOARD, AND INCREASED CASH FUNDING OF THE CAPITAL IMPROVEMENT PLAN. AND, AND JUST TO PUT THAT NUMBER INTO PERSPECTIVE, WHEN YOU THINK ABOUT IT FROM, AGAIN, FROM A DEBT SERVICE COVERAGE PERSPECTIVE, IF EVERY DOLLAR OF DEBT, YOU KNOW, REQUIRES THAT WE, YOU KNOW, GENERATE REVENUES OF AT LEAST A DOLLAR 75, YOU KNOW, AFTER COVERING OPERATING EXPENSES, YOU KNOW THAT 625 MILLION IN DEBT SERVICE SAVINGS HAS TRANSLATES INTO ABOUT 1.1 BILLION IN REVENUES THAT WE HAVEN'T HAD TO RECOVER FROM OUR CUSTOMERS AS A RESULT OF THESE EFFORTS. NEXT SLIDE. SO THIS IS OUR CAPITAL RECOVERY FEE COLLECTION SLIDE. THIS DETAILED CHART ILLUSTRATES, UM, THE CAPITAL RECOVERY FEE REVENUES OVER THE PAST FIVE YEARS. IT SHOWS A DECLINING TREND FOLLOWING A PEAK OF 44 MILLION IN 2021, ATTRIBUTED TO A SLOW DOWN IN DEVELOPMENT. WE CONCLUDED FISCAL YEAR 2024 WITH 29 MILLION IN CAPITAL RECOVERY FEE REVENUE COLLECTIONS. THE TOTAL REVENUE YEAR TO DATE STANDS AT 23.6 MILLION, AND WE EXPECT TO FINISH THE YEAR AROUND $30 MILLION IN CAPITAL RECOVERY FEE REVENUES. THE DECREASE IN REVENUES INDICATES THAT WE HAVE LESS CAPITAL RECOVERY FEE REVENUE TO USE TOWARDS DEBT D FOR OUR DEBT MANAGEMENT STRATEGIES. NEXT SLIDE, PLEASE. SO NOW WE'LL TALK ABOUT BILL IMPACTS. SO THIS SLIDE, UH, PRESENTS [01:10:01] THE EXPECTED IMPACT ON BILLS FOR THE AVERAGE NON CAP RESIDENTIAL CUSTOMER. AND CAP IS OUR CUSTOMER ASSISTANCE PROGRAM. IT'S IMPORTANT TO NOTE THAT BILLS ARE ANTICIPATED TO INCREASE DURING THIS PERIOD AS WE FOCUS ON ENHANCING OUR ENTERPRISE RESILIENCY AND ENSURING WE HAVE THE NECESSARY RESOURCES TO SUPPORT OUR EXPANDING CAPITAL PLAN. AS MENTIONED IN THE PREVIOUS SLIDE, UM, WATER RATES ARE INCREASING BY 4%, UH, IN REVENUES WHILE WASTEWATER IS INCREASING BY 13%. AND THAT'S WHAT SONG LEE HAD MENTIONED PREVIOUSLY. DUE TO THE SIGNIFICANT INVESTMENTS THAT WE'RE MAKING IN WASTEWATER INFRASTRUCTURE, THE INCREASE OF $8 AND 71 CENTS REPRESENTED HERE EQUATES TO AN ADDITIONAL 29 CENTS PER DAY FOR THE AVERAGE NON CAP RESIDENTIAL CUSTOMER. AND THAT'S WHAT JOSEPH MENTIONED EARLIER AS WELL. THIS WOULD PUT THE PRICE OF A GALLON OF WATER LESS THAN 1 CENT, WHILE THE COST FOR WASTEWATER IS SLIGHTLY HIGHER THAN 1 CENT. NEXT SLIDE, PLEASE. SO THIS IS OUR CUSTOMER ASSISTANCE PROGRAM SLIDE, AND OUR CUSTOMER ASSISTANCE PROGRAM CAP AIMS TO PROVIDE CRUCIAL SUPPORT TO OUR MOST VULNERABLE CUSTOMERS. CURRENT DATA INDICATES THAT WE HAVE OVER 54,000 CAP PARTICIPANTS ENROLLED IN OUR PROGRAM, AND THEY'RE BENEFITING FROM AN AVERAGE DISCOUNT OF 50% OR MORE, MAKING WATER SIGNIFICANTLY MORE AFFORDABLE FOR THEM. AND THIS PROPOSED INCREASE WOULD MAKE THEIR DISCOUNT ABOUT 52%. THE INCREASE OF $5 AND 50 CENTS ON AVERAGE PER MONTH EQUATES TO AN ADDITIONAL 18 CENTS PER DAY, AS JOSEPH MENTIONED EARLIER, FOR THE AVERAGE CAP RESIDENTIAL CUSTOMER. NEXT SLIDE, PLEASE. ALRIGHT, SO THAT, THAT BRINGS IT, UH, THAT BRINGS IT BACK TO ME. UM, YOU KNOW, AND AS, AS WE, UM, AS WE WORK THROUGH THIS BUDGET, UH, THE, THE CITY MANAGER'S BUDGET ACTUALLY CALLS FOR, UH, A A TWO YEAR PLAN, YOU KNOW, PROPOSED BUDGET FOR, FOR NEXT YEAR AND THEN A PLAN YEAR FOR 27. SO, AS WE THINK ABOUT, YOU KNOW, 27 AND, AND FORWARD, UH, YOU KNOW, ONGOING BUDGET CONSIDERATIONS THAT WILL INFLUENCE OUR BUDGET, YOU KNOW, CERTAINLY, YOU KNOW, FIRST AND FOREMOST IS OUR, OUR GROWING CAPITAL IMPROVEMENTS PLAN. YOU KNOW, YOU, UH, SAW THE SLIDE WHERE OUR, OUR FIVE YEAR CIP PLAN HAS GROWN FROM, UH, ROUGHLY A BILLION DOLLARS, UH, YOU KNOW, ALMOST $1.1 BILLION, UH, IN OUR 2022 THROUGH 26 PLAN, UH, TO THE CURRENT FIVE YEAR PLAN OF 2.7, UH, 2.7 BILLION. UM, YOU KNOW, UH, SO OUR, OUR GROWING CAPITAL IMPROVEMENT PLAN IS, IS REALLY OUR BIGGEST FOCUS AS WE LOOK AT, YOU KNOW, THIS BUDGET, BUT, YOU KNOW, OUR BUDGETS OVER, OVER THE NEXT FIVE YEARS. UM, SO ALTHOUGH WE'LL HAVE, UM, SOME, SOME BIGGER RATE INCREASES OVER, OVER THE NEXT FIVE YEARS, YOU KNOW, ONCE WE GET THROUGH, YOU KNOW, REALIGNING OUR RATE STRUCTURE TO SUPPORT THAT LEVEL OF CAPITAL SPENDING, YOU KNOW, WHEN WE GET TO FISCAL YEARS 29 FORWARD, WE EXPECT TO BE MORE IN KIND OF AN INFLATIONARY RATE ADJUSTMENT ROLE. SO, UM, THE, THE NEXT FEW YEARS, AGAIN, IS JUST, UM, TRYING TO RESET OUR RATES TO SUPPORT, UM, YOU KNOW, OUR INVESTMENT, UH, CERTAINLY IN CAPITAL IMPROVEMENTS, BUT ALSO IN, IN TERMS OF OPERATIONS. UM, YOU KNOW, AND THAT'S A, YOU KNOW, UH, IN PART BECAUSE OF CONS, CONSTRUCTION, CROSS COST, BUT ALSO, UH, YOU KNOW, ADDING A LARGE GENERATIONAL PROJECT THAT'S, UH, YOU KNOW, BIGGER THAN, UH, OUR 20 22 5 YEAR CIP PLAN. UM, NOW WE'RE DOING IT AGAIN, AS TINA MENTIONED, UH, IN AN ENVIRONMENT WHERE DEVELOPMENT IS SLOWING AND CAPITAL RECOVERY FEES, UH, YOU KNOW, ARE COMING IN LOWER THAN, THAN CERTAINLY A PEAK YEAR IN 2021. UM, BUT WE'RE STILL RECEIVING ENOUGH, UH, CAPITAL RECOVERY FEES OR IMPACT FEES, UH, TO MAKE, YOU KNOW, SIGNIFICANT DEBT IN, YOU KNOW, IN TERMS OF OUR FUTURE DEBT SERVICE. AND SO WE'LL CONTINUE TO USE CAPITAL RECOVERY FEES TO DEFE DEBT. UM, AND WHEN WE HAVE, UH, YOU KNOW, A SURPLUS, UH, LIKE WE'RE ANTICIPATING IN 25, ALTHOUGH FOR 25, WE'RE USING IT PRIMARILY TO HELP FUND OPERATIONS FOR, FOR 26, UM, IN, IN PRIOR YEARS, WE'VE ALSO USED, YOU KNOW, ANY UNANTICIPATED SURPLUS, UH, TO, TO DEFEASE DEBT AND, UH, ESSENTIALLY BUY DOWN FUTURE RATE INCREASES. UM, AND, AND CERTAINLY, UH, YOU KNOW, DESPITE, UH, THE RECENT, UH, DEVASTATING RAIN AND FLOODS THAT HAVE IMPROVED, UH, YOU KNOW, OUR LAKE LEVELS UP TO ABOUT 93% AS OF TODAY, UH, FROM, FROM 51%, UH, I BELIEVE ON JULY 3RD. UM, YOU KNOW, WE WILL CONTINUE TO MONITOR [01:15:01] INFLOWS AS, AS YOU KNOW, AS THE FLOODS AND, AND THE INFLOWS PRIOR TO THE FLOODS HIGHLIGHT. WE'RE SEEING, YOU KNOW, REALLY TWO EXTREME ENDS OF, OF INFLOWS INTO THE HIGHLAND LAKES. UH, INFLOWS OVER THE LAST FEW YEARS HAVE BEEN AT HISTORIC LOWS. UM, BUT, UM, AND ALTHOUGH IT TAKES FLOODS TO, TO REFILL THE LAKES, UH, YOU KNOW, THE, THE, THE RAINFALL AND FLOODS, UH, ARE HAVE BEEN MORE EXTREME. UM, AND SO, UH, WHAT THAT MEANS IS, YOU KNOW, ALTHOUGH THE LAKES MAY FEEL FASTER THAN THEY HAVE HISTORICALLY, THEY PROBABLY ALSO DRAIN A LITTLE BIT FASTER. AND SO CONSERVATION IS GOING TO CONTINUE TO BE IMPORTANT, UH, CERTAINLY AS WE CONSIDER OUR BUDGET. BUT, YOU KNOW, AS, UH, ALSO AS WE CONSIDER OUR, YOU KNOW, OUR LONG-TERM WATER SUPPLY. AND SO, UH, OUR INVESTMENTS IN OUR PURPLE PIPE SYSTEM, OUR RECLAIM SYSTEM ARE GONNA CONTINUE TO BE IMPORTANT, UM, AS WELL AS, UM, YOU KNOW, ONSITE REUSE IN, IN, IN NEW DEVELOPMENTS SO THAT WE CAN REDUCE DEMAND, UH, ON THE HIGHLAND LAKES AND OUR POTABLE WATER SYSTEM. UM, AGAIN, WE'LL, YOU KNOW, CONTINUE TO MAINTAIN, YOU KNOW, OUR, OUR CONSERVATION BASED, UH, YOU KNOW, INCLINING RATE STRUCTURE, AND WE'LL LOOK FOR WAYS TO EXTEND, UH, YOU KNOW, SIMILAR RATE STRUCTURES, UH, TO OUR, UM, NON-RESIDENTIAL CUSTOMERS, OUR, OUR COMMERCIAL AND AND MULTIFAMILY CUSTOMERS. UM, AND THEN FINALLY, YOU KNOW, UH, OUR, OUR BUDGET WILL LOOK TO CONTINUE TO SUPPORT, UH, WATER FORWARD STRATEGIES, UM, YOU KNOW, PARTICULARLY SUPPLY STRATEGIES LIKE AQUIFER STORAGE, INDIRECT POTABLE REUSE, UM, BUT ALSO LOOKING TO, TO INVEST IN, UM, PROJECTS AND, AND, UH, OPERATIONAL IMPROVEMENTS TO REDUCE WATER LOSS. AND WITH THAT, UH, THAT CONCLUDES OUR PRESENTATION, AND WE'D BE HAPPY TO ANSWER ANY QUESTIONS. COMMISSIONERS, UH, DO ANY QUESTIONS AT THIS TIME FOR THE STAFF. I HAVE ONE FROM COMMISSIONER TREE. UH, THE YOU'RE ON MUTE. SORRY. THANK YOU. MY ITALIAN HANDS WEREN'T COMMUNICATING, UH, . UM, THANK YOU VERY MUCH. SO I HAVE, UM, FOUR QUESTIONS. SO IF THE CHAIR WOULD JUST GUIDE, IF YOU WANT ME TO JUST ASK ALL FOUR AND THEN LET, UM, THE DISCUSSION FLOW OR GO ONE BY ONE, WHAT WOULD BE, WHICH WOULD BE MOST HELPFUL? MAY MAYBE ONE BY ONE AT LEAST FOR ME, . OKAY, COOL. UM, MAY I THEN, BEFORE I JUMP INTO MY QUESTIONS, UM, JUST JUST SAY A FEW SENTENCES OF CONTEXT. UM, FIRST OF ALL, I JUST WANNA THANK, UM, THE AUSTIN WATER STAFF, JOSEPH, CHRISTINA SONG LEE, FOR THE WORK YOU DID WITH OUR SUBCOMMITTEE. I, I WATCHED ALL THOSE MEETINGS, ALL THE VIDEOS AND PREPPED FOR TODAY WITH, WITH IMMENSE DILIGENCE AND INTEREST, AND REALLY APPRECIATE ALL THE WORK DONE TO FACILITATE THE CON THE CONVERSATION, UM, FOR, FOR OUR CITY. AND MY QUESTIONS WILL REALLY FOCUS NOT SO MUCH KIND OF QUESTIONING THE PLAN. UM, I THINK THE STRATEGY IS REALLY SOLID. I THINK MY QUESTIONS, AND I KNOW THOSE OF OF MY DISTRICT ARE REALLY AROUND THE, THE CONTEXT THAT WE FIND OURSELF IN ECONOMICALLY, SOCIALLY, UM, POLITICALLY, YOU KNOW, WILL EPA KEEP GIVING US LOW INTEREST BUDGETS THROUGH THE STATE, YOU KNOW, UM, SO IT'S REALLY ABOUT THE TIMING AND THE FACT THAT OUR COUNCIL AND MAYOR WILL STAND IN FRONT OF WHAT RIGHT NOW IS A DOUBLE DIGIT INCREASE OVER A SHORT PERIOD OF TIME IN RATES, AND IS A BILL THAT GOES FROM DOUBLE DIGITS TO TRIPLE DIGITS ALMOST RIGHT ABOUT TO A HUNDRED DOLLARS. UM, AND SO JUST BEAR WITH ME AS I GO THROUGH THESE FOUR QUESTIONS, KNOWING THE SPIRIT IS MORE, UM, ABOUT TIMING AND, AND RESPONDING TO THE MOMENT THAN KINDA TECHNICAL QUESTIONS OR STRATEGIC QUESTIONS FOR YOU AND THE TEAM. UM, SO QUESTION ONE WOULD BE, SO AS WE PROPOSE HOW WE'RE GOING TO PAY FOR THE EXCELLENT STRATEGIES OF SUSTAINING OUR CITY, UM, WHERE DID AUSTIN WATER FIND CUTS AND EFFICIENCIES TO KIND OF DEMONSTRATE THAT WE'RE MAKING, MAKING HARD CHOICES AS WE ASK RATE PAYERS AND EVEN TAXPAYERS SECONDARILY, TO PAY MORE FOR THIS BUDGET? CERTAINLY. UM, GREAT QUESTION. UH, YOU KNOW, AND I THINK WE'VE DONE THAT IN, IN SEVERAL WAYS. UM, YOU KNOW, CERTAINLY WE'VE TALKED A LOT ABOUT OUR, UH, GROWING CAPITAL IMPROVEMENT PLAN, BUT IT'S IMPORTANT TO UNDERSTAND THAT ALTHOUGH IT'S A A, A $2.7 BILLION, UH, PROPOSED CAPITAL IMPROVEMENT PLAN, [01:20:01] UM, YOU KNOW, WE'VE GOT AN INTERNAL PROCESS WHEREBY, UH, YOU KNOW, OUR, UH, PROJECT MANAGEMENT STAFF, UH, PROPOSES PROJECTS THAT, UM, ARE PRIORITY PROJECTS FOR, FOR THE UTILITY. UM, THEY PROPOSE IT TO, UH, WHAT WE CALL A, A BUSINESS CASE REVIEW COMMITTEE, WHICH IS MADE UP OF FOUR, UH, FOUR OF OUR EXECUTIVES. AND, UH, SO THE REQUEST, THE ASK OF THE, THE BUSINESS CASE REVIEW COMMITTEE, THE BCRC AS WE CALL IT, UH, WAS I BELIEVE AROUND $3.7 BILLION. AND, UM, AND SO THE, YOU KNOW, ONE OF THE FIRST THINGS WE DO IS, IS, YOU KNOW, CERTAINLY WE CAN'T AFFORD EVERYTHING THAT WE WOULD LIKE TO DO. UM, WE, YOU KNOW, AND WE PRIORITIZE THE, THE HIGHEST, UH, PRIORITY PROJECTS, BOTH IN TERMS OF, UM, YOU KNOW, WHEN WE TALK ABOUT, SAY, RENEWAL AND REPLACEMENT, UH, YOU KNOW, WE IDENTIFY, WE, WE'VE GOT A ROBUST ASSET MANAGEMENT, UH, SYSTEM THAT, UM, ASSESSES OUR, OUR INFRASTRUCTURE. AND, AND SO FROM A RENEWAL AND REPLACEMENT PERSPECTIVE, WE, WE FOCUS ON POOR PERFORMING AS ASSETS. AND, UM, IN, IN WHAT, YOU KNOW, OUR, OUR CATEGORY FOUR AND FIVE, THEY'RE OUR WORST PERFORMING ASSETS. UM, SO THAT, UH, WE CAN AVOID, UH, YOU KNOW, AS MANY WATER LEAKS AS POSSIBLE, WE CAN AVOID SANITARY SEWER OVERFLOWS OR IN TERMS OF OUR PLANTS, MAKE SURE THAT THEY'RE ABLE TO CONTINUE TO RUN. SO, SO THERE'S A HEAVY PRIORITY ON, UH, OUR, OUR POOR PERFORMING ASSETS. UM, BUT, UH, WHEN YOU THINK ABOUT SOME OF OUR LARGER PROJECTS LIKE THE, WHEN WALNUT CREEK EXPANSION, THAT'S A REGULATORY, UH, LARGELY A REG REGULATORILY REQUIRED, UH, PROJECT, UH, JUST BASED ON THE AMOUNT OF WASTEWATER FLOWS THAT ARE COMING INTO THE PLANT, UH, YOU KNOW, THOSE WASTEWATER FLOWS ARE COMING INTO THE PLANT APPROACHING, UH, 75% OF THE PLANT'S CAPACITY. AND, AND SO TCEQ RULES REQUIRE THAT AS WE APPROACH THAT LEVEL, WE HAVE TO START PLANNING AND, AND, AND CONSTRUCTING, YOU KNOW, AN, AN EXPANSION OR, OR SOME OTHER ALTERNATIVE TO, TO, UH, TO TREAT, YOU KNOW, GROWTH IN, IN THE FLOWS OR INCREASES IN THE FLOWS THAT ARE COMING INTO THE PLANTS. SO THAT'S PART OF IT. UM, YOU KNOW, WHEN, WHEN WE THINK ABOUT IT FROM AN OPERATING PERSPECTIVE, WE GO THROUGH A PRETTY COMPREHENSIVE, UH, OPERATING, UH, BUDGET REVIEW WHEREBY WE LOOK AT, UH, HISTORIC BUDGET UTILIZATION. UM, SO FOR EXAMPLE, IF SOMEONE, UM, HAS A, YOU KNOW, A, A REQUEST FOR A BUDGET INCREASE, ONE OF THE FIRST THINGS WE'D LOOK AT IS, WELL, HOW MUCH OF THE BUDGET THAT'S ALREADY ALLOCATED TO A DIVISION OR A PROGRAM AREA, ARE WE UTILIZING? ARE WE FULLY UTILIZING THE EXISTING BUDGET OR DO WE HAVE THE ABILITY TO ABSORB SOME OR ALL OF THOSE INCREASES WITHIN OUR, OUR CURRENT BUDGET? AND JUST IN THE LAST TWO YEARS ALONE, UH, WE'VE REDUCED OVER $20 MILLION OF OPERATING INCREASE ASK AS PART OF THAT PROCESS. UM, YOU KNOW, OUR, OUR, UH, EXECUTIVE TEAM, UH, OUR, OUR, OUR DIVISION MANAGERS AND, UH, HAVE, HAVE REALLY BOUGHT INTO THE PROCESS, UH, YOU KNOW, WITH THE MINDSET THAT WE, WE, WE ONLY WANT TO ASK FOR WHAT WE THINK WE NEED, UM, YOU KNOW, AND SO WE, WE WANNA MAKE SURE THAT WE'RE UTILIZING THE FUNDS THAT WE ALREADY HAVE IN THE BEST WAY POSSIBLE. AND I'LL ALSO ADD ON TOP OF THAT, UM, CURRENTLY IN THAT CIP PLAN, UH, WE HAVE ABOUT $561 MILLION IN WHICH WE ARE TRYING TO SECURE LOANS FOR. SO WE HAVE TWO CLOSINGS THAT WILL HAPPEN IN NOVEMBER WITH THE SWIFT LOAN. WE'RE WORKING ON THE CLOSING WITH EPA ON THE WIA LOAN. AND, UM, WE, AS, UH, YOU SAW TODAY ON THE AGENDA, THE CLEAN WATER SRF LOAN FROM TWDB, WE WERE INVITED FOR THAT AS WELL AS PART OF WALNUT CREEK. SO ALL THOSE LOANS, UH, THIS YEAR, TOTAL 561 MILLION OF THAT PLAN IN WHICH WE WILL SAVE RATE PAYERS MONEY ON THE INTEREST THAT WE HAVE TO PAY FOR THE DEBT. THANK YOU. DO ANY OF MY COMMISSION COLLEAGUES HAVE ANY FOLLOW-UPS OR SHALL I KEEP MOVING FORWARD? CHAIR? I DON'T SEE ANY FOLLOW-UP QUESTIONS AT THIS TIME. UM, THANK YOU. UM, I, BEFORE I MOVE ON TO THE SECOND ONE, I WOULD JUST SAY I THINK IT WOULD BE SO HELPFUL, UM, AND I WILL COMMUNICATE IT TO MY COUNCIL MEMBER, BUT TO KIND OF BALANCE THE BUDGET AND THE ASK WITH KIND OF THESE HIGHLIGHTS OF, UM, WHERE THESE HARD CHOICES, FOR EXAMPLE, HAVE BEEN MADE OR MAKE IT MORE OF A, I KNOW THE MAYOR'S EXCITED OR, YOU KNOW, REALLY BUYING INTO [01:25:01] THE WALNUT CREEK FACILITY, BUT I THINK PAR PARTNERING IT WITH JUST, IT'S A REQUIREMENT WE HAVE TO DO THIS CITY, UM, WOULD HELP I THINK AUSTIN RESIDENTS AND US, EVEN THE COUNCIL MEMBERS, UNDERSTAND WHAT IT WILL BE A REALLY, I THINK, UM, SIGNIFICANT OR MEANINGFUL OR FELT, UH, RATE CHANGE IN BUDGET CHANGE, UM, DOES, SO, UM, ACTUALLY IT WAS VERY HELPFUL. EVERY TIME I WATCH THIS PRESENTATION, I LEARN MORE, BUT CHRISTINA SAID ESSENTIALLY THE CIP, YOU KNOW, 95% OF IT IS ESSENTIALLY CARRY OVER AND, AND COMMITTED PROJECTS. UM, IS THAT CORRECT? LET ME FIRST MAKE SURE I I HEARD THAT. YES, THAT IS, THAT RIGHT IS CORRECT. AND THAT'S PART OF WHAT THE BUSINESS CASE REVIEW COMMITTEE THAT JOSEPH MENTIONED REVIEWED. AND THEY WANTED TO MAKE SURE THAT, UM, THE PROJECTS, UH, THAT WE HAD, I IDENTIFIED IN THE PREVIOUS PLAN, THOSE PRIORITY PROJECTS, UM, WE'RE COMPLETING THOSE. AND SO, UM, OF WHAT IS IN THE FULLER PACKET, I GUESS WITHIN THAT WIGGLE, THAT WIGGLE ROOM OF 5% THAT WASN'T ROLLOVER OR DON'T STOP A PROJECT ONCE IT STARTED, WHICH IS INCREDIBLY INEFFICIENT, UM, ARE YOU CONFIDENT, OR HOW WOULD YOU, IN KIND OF LAYMAN TERMS, SAY, WE SELECTED THE MOST ESSENTIAL OR THIS PLAN IN ORDER TO MINIMIZE THE RATE, WHAT, WHAT CUSTOMERS WILL FEEL TO PAY FOR THESE PROJECTS AND PAY FOR KIND OF THESE GENERATIONAL PROJECTS? HOW WOULD YOU ARTICULATE THAT? ONLY THE MOST ESSENTIAL ARE IN THIS PLAN, OR THAT THE WAY THAT WE'RE GOING TO CHARGE, OR, YOU KNOW, CUSTOMERS, THAT 25% OF THE OVERALL BUDGET THAT, THAT, THAT COMES FROM DEBT SERVICE, UM, THAT WE KIND OF DID OUR BEST AS AUSTIN WATER TO MINIMIZE THE IMPACT, AND WE'RE ONLY CHOOSING THE MOST ESSENTIAL PROJECTS, UM, TO ASK CUSTOMERS TO FINANCE RIGHT NOW. LIKE HOW WOULD YOU ARTICULATE THAT? UH, I, I'M GONNA PUT, UH, YOU KNOW, OUR, UH, ASSISTANT DIRECTOR OF ENVIRONMENTAL PLANNING AND DEVELOPMENT SERVICES ON, ON THE SPOT SINCE HE'S, UH, ONE OF THE, UH, BUSINESS CASE REVIEW COMMITTEE MEMBERS, UM, TO, TO TALK TO HOW WE, UH, PRIORITIZE PROJECTS AND HOW WE ARRIVED AT, YOU KNOW, APPROVING THE OTHER 5% OF, OF NEW PROJECTS THAT CAME INTO THE PLAN. OKAY. AGAIN, KEVIN CRIT AND AUSTIN WATER, UM, WE DO, JUSTIN MENTIONED EVERY YEAR WE DO CONVENE, UH, UM, OUR EXECUTIVES AND OUR BUSINESS CASE REVIEW, UM, PROCESS. UM, EVERY PROJECT THAT WE HAVE IN OUR PORTFOLIO PROJECTS, UM, RESULTS IN AN INDIVIDUAL BUSINESS CASE THAT DESCRIBES THE NEED AND THE BENEFITS PROVIDED BY THAT PROJECT. UM, A LOT OF THAT INFORMATION IS INFORMED BY OUR ASSET MANAGEMENT PROGRAM WHERE WE LOOK AT CONDITION AND CRITICALITY OF ALL THE ASSETS AND ALL THE ASSET REQUESTS ACROSS THE ORGANIZATION. UM, BASICALLY WE GO THROUGH THAT PROCESS PRIMARILY FOCUSED ON TRYING TO REPLACE, UM, POOR AND VERY POOR PERFORMING ASSETS, UM, IN OUR SYSTEM WITH THE IDEA OF TRYING TO GET THOSE OUT, UM, REALLY FROM A RISK MINIMIZATION PERSPECTIVE. UM, SO THAT'S HOW THE PROCESS HAPPENS EVERY YEAR. UM, AGAIN, IT'S A REPETITIVE PROCESS THAT HAPPENS OVER SEVERAL WEEKS. UM, WE DO LOOK AT SOMEWHERE ON THE ORDER OF 400 PROJECTS INDIVIDUALLY AND KIND OF RANK AND GO THROUGH THAT PROCESS. SO HOPEFULLY THAT KIND OF GIVES YOU A FEEL FOR, UM, THE, THE LEVEL OF DILIGENCE THAT WE GO THROUGH IN MAKING SURE THAT WE'RE ONLY SPENDING THE MONIES THAT ARE APPROPRIATE, UM, GIVEN OUR CONDITIONS. OKAY. UH, COMMISSIONERS HAVE ANY OTHER FOLLOW UP QUESTIONS ON THAT, OR, I THINK IT'S BACK TO YOU, COMMISSIONER, TRULY THANK YOU. NUMBER THREE, , AND THANK YOU ALL AGAIN FOR, FOR ALLOWING ME THESE QUESTIONS. UM, I, I ACTUALLY MAY HAVE SEEN SOME OF THIS DATA TODAY, AND THIS MAY BE A BIT REDUNDANT, BUT, UM, WITH OUR BUDGET AND WITH HOW THE BUSINESS OR THE ENTERPRISE WILL GROW, HOW MUCH CONTRIBUTION THEN CAN, CAN WE SAY LIKE THAT, CAN AUSTIN WATER SAY WE WILL BE PROVIDING THE CITY OF AUSTIN WITH EVEN MORE CONTRIBUTION MOVING FORWARD AND INVESTING IN THESE PROJECTS, PARTICULARLY THE GROWTH PROJECTS, SO AS TO POTENTIALLY OFFSET OTHER CITY COSTS? UM, AND AGAIN, MAYBE WE CAN PULL THAT SLIDE BACK UP. UM, BUT DO YOU SEE WHAT I'M SAYING? LIKE, IS THERE A WAY, AGAIN, I'M KIND OF MAKING THE CASE HERE IN A WAY THAT IT MAYBE LAYMAN WILL HEAR ABOUT THE CONTRIBUTION AUSTIN WATER MAKES TO KIND OF THE BIGGER PICTURE OF THE CITY. DO YOU MEAN THE THE INTERNAL [01:30:01] CITY TRANSFERS? UH, LIKE THE TRANSFERS THE GENERAL FUND? YEP, YEP, YEP. OKAY. YES. UM, AND, AND CERTAINLY WE, YOU KNOW, UH, WE DO CONTRIBUTE, UH, YOU KNOW, FOR, FOR FY 26, THE PROPOSED AMOUNT IS 54, UH, MILLION. UM, YOU KNOW, IT'S BEEN ROUGHLY, ROUGHLY 50 MILLION FOR THE LAST FEW YEARS. UM, AND, AND SO THAT IS, UH, YOU KNOW, UH, CAN BE VIEWED, UH, KIND OF AS A RETURN ON THE CITY'S INVESTMENT IN AUSTIN WATER, BUT IT'S ALSO TO SUPPORT OUR USE OF CITY SERVICES. CERTAINLY WE HAVE NEED FOR, UM, FOR UNFORTUNATELY AT TIMES, YOU KNOW, POLICE AND FIRE, UM, DEPARTMENT, UM, YOU KNOW, WE, A LOT OF OUR INFRASTRUCTURE IS, IS, UH, LOCATED, UH, YOU KNOW, ALONG RIVERS OR, OR, YOU KNOW, NEAR FLOODPLAINS AND, AND SO, YOU KNOW, THE CITY'S WATERSHED PROTECTION DEPARTMENT, YOU KNOW, UH, PLAYS A KEY ROLE IN KEEPING OUR, OUR ASSETS AND INFRASTRUCTURE, UM, YOU KNOW, SAFE FROM, FROM FLOODING. UH, SO WE, WE GET A RETURN ON, ON ON THAT INVESTMENT. BUT IT, IT DOES, UH, YOU KNOW, WE DO SEND FUNDS, UH, CERTAINLY TO THE GENERAL FUND, UM, AS WELL AS SUPPORT SERVICES FUNDS, ALTHOUGH THAT'S REALLY MORE OF A, A REIMBURSEMENT FOR SERVICES PROVIDED TO US, UM, ON AN ALLOCATION BASIS. YEAH, OKAY. I, I UNDERSTAND BETTER. I THINK, I'M JUST TRYING TO PUT THE, THE BIGGER CONTEXT OF THE CITY, AND I KNOW IT'S NOT OUR LANE, OUR LANE IS AUSTIN WATER, SO I'M STAYING THERE, BUT COGNIZANT OF IN ADDITION TO, YOU KNOW, WATER UTILITY RATES, THERE'S ALSO TAX, YOU KNOW, TAX BASE INCREASE. AND SO, UM, JUST TRYING TO UNDERSTAND HOW ALL OF THIS INTERPLAYS BETTER, BUT, UH, JOSEPH, THAT WAS FINE, THANK YOU. YES, AND I'LL ADD TO THAT, UM, AND JUST CLARIFY THAT AUSTIN WATER, UH, DOES NOT RECEIVE, UH, TAX REVENUE. UH, WE ARE SOLELY FUNDED BY OUR RATE PAYERS THAT PAY FOR WATER WASTEWATER RECLAIMED WATER SERVICES. THANK YOU. OKAY, LAST ONE. UM, AND SOME OF THIS, I, I HAVE THE BENEFIT, UM, OF A SEPARATE MEETING WITH AUSTIN WATER AND MY COUNCIL MEMBER ON FRIDAY, BUT IT, I WANNA ASK THE QUESTION THAT GETS TO WHY I VOTED NO ON SOME OF THE, UH, ITEMS EARLIER TODAY, WHICH IS JUST THE SPIRIT OF, OF EXCELLENT, YOU KNOW, PUBLIC ADMINISTRATION AND I, I DON'T KNOW THE RIGHT WAY. MAYBE HEATHER, YOU CAN GUIDE ME OR OUR CHAIR, BUT HOW ARE WE ENSURING THAT WE ARE USING BEST PUBLIC ADMINISTRATION PRACTICES? SO, YOU KNOW, INDICATORS BEYOND, YOU KNOW, COST FOR GALLON OR, YOU KNOW, CUSTOMER SERVICE COSTS. IT WOULD BE THINGS LIKE, WHAT PERCENTAGE OF OUR CONTRACTS HAVE MORE THAN TWO BIDDERS, OR WHAT PERCENTAGE OF OUR PROJECTS OR CONTRACTS END ON TIME AND ON BUDGET, RIGHT? UM, DO WE, ARE WE DIVERSIFYING OUR BIDDER POOL, RIGHT? OR ARE WE JUST ROTATING? SO I KNOW I'M NOT ASKING QUESTIONS YOU ALL HAVEN'T HEARD BEFORE, BUT I HAVEN'T HEARD, YOU KNOW, RESPONSES TO THEM AS I, AS I ENTER THIS COMMISSION. AND I THINK KEEPING, YOU KNOW, REALLY MAKING SURE WE CAN SHOW THAT WE'RE OFFERING VALUE TO AUSTINITES AT A TIME WHEN EVERYTHING IS GETTING MORE AND MORE EXPENSIVE IS ALSO REALLY IMPORTANT. SO THEN I PUT IT BACK ON, ON YOU ALL, YOU KNOW HOW, AND AGAIN, WE CAN PICK THIS UP AT ANOTHER TIME, OR I HAVE THE BENEFIT OF FRIDAY, BUT I HAVE, I'M CURIOUS ABOUT HOW WE SHOW BEST ADMINISTRATIVE PRACTICE WITH INDICATORS LIKE I JUST MENTIONED, AND DO YOU HAVE ANY GENERAL, UM, RESPONSES TO MY, MY QUESTION? RIGHT. WELL, I, FIRST OF ALL, I WOULD SAY, YOU KNOW, WE ARE DISAPPOINTED. UH, WE'RE, WE'RE JUST AS DISAPPOINTED. I, I THINK AS, AS, AS YOU ARE, AND, AND COMMISSIONER MORIARTY ARE, YOU KNOW, WHEN WE GET, UH, YOU KNOW, A SINGLE RESPONSE TO, UM, TO A, UM, A PROJECT. UM, AND, AND I, I THINK WHAT I WOULD SAY IS, IS THE UTILITY AS A WHOLE, YOU KNOW, IS FOCUSED ON AFFORDABILITY, UM, YOU KNOW, FINANCE, YOU KNOW, WE CAN'T, UH, KEEP THE RATES AFFORDABLE ON, ON OUR OWN. AND, AND SO ALL THE THINGS THAT, YOU KNOW, A LOT OF THE THINGS THAT WE'VE TALKED ABOUT, WHETHER IT'S THE THE BUSINESS CASE REVIEW COMMITTEE TO TRY AND BALANCE, YOU KNOW, WHAT PROJECTS WE DO MOVE FORWARD THAT THEY'RE THE MOST CRITICAL PROJECTS, UM, YOU KNOW, HELP WORKING WITH OUR PROJECT MANAGERS TO HELP THEM UNDERSTAND, UM, YOU KNOW, HOW WE RELY ON THEM TO, TO, TO PLAN OUR FINANCES. YOU KNOW, WHEN WE THINK ABOUT THE WORK THAT WE'VE DONE FROM A DEBT MANAGEMENT PERSPECTIVE, YOU KNOW, WHEN, WHEN WE DEFE DEBT, WHAT WE'RE DOING IS WE'RE, YOU KNOW, ESSENTIALLY MAKING EXTRA MORTGAGE PAYMENTS, FOR EXAMPLE, UM, TO, UM, [01:35:01] TO PRIMARILY TO CREATE CAPACITY TO LAYER ON ON NEW DEBT. BUT, UM, AS A NEW ORGANIZATION, WE WORK REAL CLOSELY TOGETHER, UH, TO RELY ON OUR PROJECT MANAGERS AND, AND THEIR, UH, COST ESTIMATES, UH, SO THAT WE KNOW WHEN AND WHERE TO TARGET, UH, THE FEES AND TRANSACTIONS. 'CAUSE YOU KNOW, WE COULD, WE CAN TARGET IF WE SEE A PEAK, UM, IN, YOU KNOW, FOR EXAMPLE, IN 2028. 2028 IS OUR, OUR CURRENT PEAK YEAR IN TERMS OF DEBT SERVICE. AND SO, UM, YOU KNOW, KNOWING THAT THAT'S OUR PEAK YEAR AND WE'RE LAYERING FOR, YOU KNOW, WALNUT CREEK ON TOP OF IT, WE'VE BEEN HEAVILY TARGETING, UH, FISCAL YEAR 28 TO, TO BRING DOWN, UH, DEBT SERVICE. AND SO THAT RELIES, YOU KNOW, THE ORGANIZATION TO WORK TOGETHER TO, TO, TO MANAGE OUR PROJECTS AND, UH, MANAGE OUR FINANCES IN A WAY THAT'S, YOU KNOW, VERY COLLABORATIVE. YOU KNOW, THE, UM, THE BUY-IN FROM, FROM OUR ASSISTANT DIRECTORS IN OUR PROGRAM AREAS ABOUT, UH, YOU KNOW, BEING MINDFUL OF, UH, ADDITIONS TO THE BUDGET, EVEN TAKING CUTS TO, TO EXISTING BUDGETS. UM, EVERYBODY'S BOUGHT IN AND EVERYBODY'S KIND OF WORKING IN THE SAME DIRECTION. UH, YOU KNOW, WE WE'RE CHARGED WITH KEEPING THE WATER RUNNING AND TREATING THE WASTEWATER AND PLANNING FOR OUR INFRASTRUCTURE FOR, FOR THE LONG TERM. BUT WE DO IT WITH, UM, WITH AFFORDABILITY IN MIND. AND IT'S NOT JUST, IT'S NOT JUST ME AND OUR FINANCE TEAM, IT'S, IT'S THE UTILITY AS A WHOLE. AND, AND I WOULD SAY THAT EVERYBODY'S BOUGHT IN AND MADE, MADE IT EASIEST, EASIER FOR US TO DO THAT. AND I'LL ADD, AS WE, UM, TAKE CARE OF OUR SYSTEM AND WE, UM, GET THE NEEDS DONE, UH, AS IN OUR PLAN, THE PRIORITY PROJECTS, UH, WE ARE ACTUALLY SAVING RATE PAYERS MONEY IN THE LONG RUN BY ITEMS NOT BREAKING DOWN. UM, 'CAUSE WE KNOW EMERGENCY REPAIRS ARE JUST MORE COSTLY OR DOING ANYTHING ON AN EMERGENCY BASIS CAN BE MORE COSTLY. SO AS WE ARE PLANNING AND PREPARING FOR, UH, FUNDING FOR ALL OF THESE PROJECTS, WE KEEP THAT IN MIND THAT THAT'S PART OF AFFORDABILITY EFFORTS AS WELL AS WHAT WILL IT COST US IF WE DELAY THIS. AND I GUESS I'LL JUST ADD ON ONE THING AS WELL, 'CAUSE IT DOES GO TO SORT OF THE PREVIOUS SLIDE ON INTERDEPARTMENTAL TRANSFERS. UM, AT AUSTIN WATER, WE DO RELY ON CORPORATE SERVICES IN VARIOUS OTHER DEPARTMENTS. UM, PARTICULARLY CAPITAL DELIVERY SERVICE, AS AN EXAMPLE, IS THE CITY'S BASICALLY PROJECT MANAGEMENT ORGANIZATION. AND THAT HELPS ALIGN SORT OF ALL OF THE CITY'S GOALS ACROSS THE ORGANIZATION, HELPS BRING EFFICIENCIES TO THE CITY IN THE DELIVERY OF CAPITAL PROJECTS. THAT'S KIND OF ONE EXAMPLE. UM, WE ALSO UTILIZE THE, THE, UM, CITY SMALL AND MINORITY BUSINESS PROGRAMS. UH, WE ALSO UTILIZE THE CENTRALIZED CITIES, UM, UH, CORPORATE PURCHASING PROGRAMS. SO ALL OF THOSE THINGS SORT OF ARE ALIGNED TO TRY TO PROVIDE EFFICIENCIES ACROSS THE CITY AS A WHOLE. SO I THINK I HAVE A FOLLOW UP QUESTION. UM, SO I, I KIND OF WANNA TAKE IT BACK TO, TO THE EARLIER TOPIC ABOUT, ABOUT BIDS SPECIFICALLY. AND FORGIVE ME IF IT FEELS LIKE I'M, I'M TAKING US BACKWARDS, BUT I, I, I THINK, AND I'M GONNA ASK Y'ALL TO TRY AND PREDICT TO THE FUTURE A LITTLE BIT. SO TAKE IT ALL WITH A GRAIN OF SALT, BUT DO YOU SEE ANY, OR DO YOU, DO Y'ALL ANTICIPATE ANY WORLD IN WHICH SOMETHING LIKE FINDING MULTIPLE BIDDERS BECOMES EASIER IN THE NEXT FIVE TO 10 YEARS? RIGHT? IS THAT SOMETHING THAT, AND, AND WHETHER, I MEAN THAT, YOU KNOW, SOCIALLY OR CULTURALLY, OR IS THERE ANYTHING THAT THE DEPARTMENT ITSELF COULD DO OR, OR IS UNABLE TO DO FOR ANY REASON? UM, AT PRESENT, I GUESS I'LL TAKE A SHOT AND MAYBE I MAY ASK CHARLES TO COME BACK UP HERE, BUT I THINK GENERALLY SPEAKING, UM, THE CITY'S PROCUREMENT PROCESS AS A WHOLE INVOLVES A LOT OF, UM, A ADDITIONAL PARTICIPATION OPPORTUNITIES BY SUB CONSULTS AND TRADES. AND SO THERE'S A LOT OF CONVERSATION THAT GOES ON ALONG KIND OF HOW DO YOU STRUCTURE THE BID AND HOW DO YOU INCLUDE, UM, YOU KNOW, HOW YOU BREAK IT UP AND HOW YOU INCLUDE DIFFERENT PARTICIPANTS WITHIN IT. THESE ARE VERY LARGE PROJECTS, EVEN THE SMALL PROJECTS ARE LARGE PROJECTS. AND AT SOME LEVEL, UM, I WOULD SAY THE, UH, YOU KNOW, THE POPULATION THAT ARE QUALIFIED TO PROVIDE, YOU KNOW, MULTIMILLION DOLLAR, [01:40:01] HUNDREDS OF MILLIONS OF DOLLARS PROJECTS, I MEAN, IT'S A FAIRLY SMALL SET OF PROVIDERS. SO I MEAN, I THINK WE'RE ALWAYS CHALLENGED TRYING TO STRUCTURE PROJECTS IN A WAY THAT IS EFFICIENT, BUT ALSO BRINGS TO US QUALIFIED CANDIDATES. UM, AND THAT'S WHY WE STRIKE A LOT OF PARTNERSHIP WITH OUR SMBR TEAMS, UM, AND OUR CENTRAL PURCHASING GROUPS TO TRY TO MAKE SURE THAT WE'RE DOING IN THAT A WAY THAT KIND OF BALANCES THAT OUT. SO WE WANT TO CAST THE WIDEST NET. I THINK TO JOSEPH'S POINT EARLIER, WE WANT MANY, MANY BIDDERS. UM, BUT IT'S VERY DIFFICULT FOR US TO CONTROL THE BIDDING ENVIRONMENT. UM, AND IT CAN CHANGE, YOU KNOW, YEAR BY YEAR. UM, I KNOW THAT WHEN A LOT MORE MOBILITY PROJECTS WERE GOING ON, ACTUALLY IN CONSTRUCTION FIVE YEARS AGO, IT WAS VERY DIFFICULT TO FIND CONTRACTORS. UM, IN THIS CASE, A LOT OF THE BIDS THAT YOU'RE SEEING TODAY ARE RELATED TO PLANT WORK. PLANT WORK IS SORT OF THE, PROBABLY THE MOST RAREFIED OF THE KIND OF SPECIALTIES THAT WE'RE SEEING INVOLVES A LOT OF ELECTRICAL TRADES, A LOT OF MECHANICAL TRADES. AND SO, YOU KNOW, AT SOME LEVEL WE END UP KIND OF COMPETING AGAINST OURSELVES WHEN WE HAVE MULTIPLE PROJECTS GOING ON. SO I WOULD SAY THAT IT'S A VERY COMPLEX KIND OF TASK THAT WE KIND OF WORK ON ON A DAILY BASIS WITH OUR OTHER PARTNER DEPARTMENTS. THANK YOU. I, I'LL JUST ADD A COMMENT. I, I RECALL, I THINK IT WAS THREE YEARS AGO, MAYBE FOUR, WE WERE HAVING SINGLE BIDDERS ON A LOT OF PIPELINE PROJECTS, IT SEEMS, UM, I THINK AT THAT TIME WE HAD A, UH, MAYBE SOME OF THOSE OTHER PARTNER DEPARTMENTS CAME IN AND THERE WAS A BRIEFING AND MAYBE THERE WAS SOME IDEAS THAT WERE, THAT WERE THROWN AROUND. AND THAT'S BEEN A FEW YEARS. SO MAYBE SPECIFIC TO THE FACILITY SIDE OF THINGS, IT'S, IT, THAT WOULD BE SOMETHING WE COULD DO AND, AND CONTINUE THIS CONVERSATION. I THINK WE HAVE BOTH A SHORT TERM CHALLENGE OF GETTING PROJECTS DONE AND MEETING THE FACILITY NEEDS, BUT THAT ALSO, YOU KNOW, IN THE LONG TERM WE'D LIKE TO HAVE THE FIVE OR SIX BIDDERS LIKE WE HAVE IN PIPELINE PROJECTS TODAY. SO, UH, MAYBE IT'S SOMETHING THAT WE COULD KICK AROUND AS A, A FUTURE TOPIC OF DISCUSSION. ALRIGHT. UM, I ADD THAT JESSE, UM, OR COMMISSIONER PENN, I'D ADD TO THAT, THAT WE COULD ALSO DISCUSS, UM, WITH AUSTIN WATER JUST WHAT STEPS OR WHAT SORT OF, UM, INVESTIGATIONS AND, AND LOOKING INTO POTENTIAL OPPORTUNITIES FOR COLLABORATIVE DELIVERY, UM, FOR PROJECTS WHERE, YOU KNOW, MAYBE THAT WOULD BE A, A, A BETTER WAY OR JUST A DIFFERENT APPROACH TO TRYING TO GET A CONTRACTOR, UM, ON EARLIER. THANK YOU COMMISSIONER TOON. AND I SAW ANOTHER QUESTION FROM COMMISSIONER WILSON. CR THANK YOU. YEAH. UM, I HAVE A, A FEW QUESTIONS OF MY OWN, JUST SOME CLARIFICATIONS ON, UM, SOME OF THE COST OF SERVICE RECOMMENDATIONS FROM THE PRESENTATION. UM, AND ONE QUESTION REGARDING PAGE 2 26 OF THE PROPOSED BUDGET DRAFT. UM, SO START WITH THE SLIDE DECK. UM, HAPPY TO, TO BRING THAT BACK UP FOR REFERENCE AS WELL, IF HELPFUL. THAT'S THE 2024 COST OF SERVICE RECOMMENDATIONS. UM, SO SLIDE, I THINK THAT'S SLIDE SIX. YES. YES. SO I'M LOOKING AT THE COMMUNITY BENEFIT CHARGE INCREASE RECOMMENDATION FROM 15 CENTS TO 30 CENTS PER THOUSAND GALLONS TO SUPPORT THE CAP. UM, I ALSO KNOW THAT Y'ALL HAVE MENTIONED THAT THE SORT OF AVERAGE INCREASE THAT WE'LL SEE IN THE MONTHLY BILL FOR RESIDENTIAL CUSTOMERS WILL BE ABOUT $9 A LITTLE BIT UNDER THAT. AND SO JUST TO, TO CLARIFY AND HELP MY UNDERSTANDING, THE, IS THE AVERAGE MONTHLY INCREASE WE'RE GOING TO BE SEEING IN, UM, WATER BILLS ENTIRELY ATTRIBUTABLE TO THE INCREASE IN THE COMMUNITY BENEFIT CHARGE? NO. TO BE, TO BE CLEAR, THE COMMUNITY BENEFIT CHARGE, UH, IS NOT CHANGING. IT'S NOT PROPOSED TO CHANGE FOR FISCAL YEAR 26. OKAY. UH, THIS WAS A RECOMMENDATION COMING OUT OF THE 2024 COST OF SERVICE STUDY AND THAT 15 CENT INCREASE, UH, WAS ENACTED FOR THE CURRENT YEAR, FOR FISCAL YEAR 25. UM, THIS IS JUST HIGHLIGHTING THE RECOMMENDATIONS THAT CAME OUT OF LAST YEAR'S COST OF SERVICE STUDY. AND THEN IN TERMS OF THE, THE CHANGE TO WATER RATES, HOW, UM, RESIDENTS ARE GOING TO SORT OF SEE THAT REFLECTED ON THEIR WATER BILL. THAT'S JUST GOING TO BE TO, TO THE SORT OF LIKE BASE CHARGE FOR USE OF WATER, NOT ANY OF THE OTHER SORT OF FEES THAT WE SEE ON OUR MONTHLY BILL. UH, THE, THE CHANGES BEING PROPOSED, UH, ARE A SMALLER CHANGE IN, IN THE FIXED FEE AND, AND I DON'T REMEMBER THE, THE EXACT NUMBER. UM, AND, AND THEN, UM, CHANGES IN THE TIERED RATE STRUCTURE. SO, UM, GENERALLY SPEAKING, WHEN WE, UM, WHEN WE WORK THROUGH RATE DESIGN MM-HMM . UM, AGAIN, OUR, OUR RATE STRUCTURE HAS AN INCLINING BLOCK RATE [01:45:01] STRUCTURE, SO, UH, INTENDED TO KEEP THE LOWER TIERS MORE AFFORDABLE. AND SO WHAT YOU WILL GENERALLY SEE IS SMALLER INCREASES IN THE FIXED CHARGE, SMALLER INCREASES IN TIERS ONE AND TWO TO KEEP ESSENTIAL SERVICES AS AFFORDABLE AS POSSIBLE. AND THEN BIGGER DOLLAR OR CENT INCREASES, A BIGGER AMOUNT INCREASES IN THE HIGHER TIERS, ALTHOUGH THOSE MAY TRANSLATE TO SMALLER PERCENTAGE INCREASES JUST BECAUSE THOSE, THOSE TIERS ARE, ARE, YOU KNOW, UH, START OFF HIGHER. UM, BUT REALLY THE FOCUS IS, UM, YOU KNOW, HOW DO WE KEEP RATES AS AFFORDABLE AS POSSIBLE ON THE LOW END, UM, BUT, BUT THEN TRY AND INCENTIVIZE CONSERVATION WITH HIGHER RATES, UH, FOR, FOR MORE FOR HIGHER CONSUMPTION AND MORE DEMAND. THANK YOU, THAT'S REALLY HELPFUL. AS A NEW MEMBER TO THE COMMISSION, I APPRECIATE THE BACKGROUND ON JUST THE RATE DESIGN CONVERSATION, HOW THAT WORKS. UM, BEFORE I MOVE ON TO MY NEXT QUESTION, ANY FOLLOW UP ON JUST THE PROPOSED CHANGES TO RACE? I ACTUALLY HAVE A FOLLOW UP. OKAY. I'M REALLY GLAD YOU BROUGHT THIS UP. UM, SO I, AND CORRECT ME IF I'M WRONG, BUT MY UNDERSTANDING ON LIKE THE AVERAGE 8 71 PER MONTH FOR RESIDENTIAL AVERAGE AND THEN FIVE 50 PER MONTH FOR CUSTOMER ASSISTANCE PROGRAM AVERAGE, WAS THAT THOSE CHANGES WILL HAPPEN AT, FOR THE MOST PART, EVERY NEW BUDGET TO SOME DEGREE, BECAUSE THAT WASN'T THE WHOLE RECOMMENDATION OF, OF WHAT, LIKE THE RATE INCREASE WAS WARRANTED AS A RESULT OF THIS STUDY, RIGHT? YEAH. SO, UH, WE WOULD EXPECT, WE EXPECT FISCAL YEAR 26 TO KIND OF BE THE PEAK YEAR IN TERMS OF INCREASES AND THEN STARTING TO, TO STARE, UH, STEP DOWN, UH, TILL, TILL WE GET TO, UH, MORE OF INFLATIONARY LEVEL INCREASES, UH, BY THE END OF THE FIVE YEAR FORECAST PERIOD. SO AS WE GET INTO FISCAL YEARS 28, 29, UH, YOU KNOW, WE WOULD EXPECT THE INCREASES TO BE, UH, PERCENTAGE WISE, WE'RE ROUGHLY HALF OF, OF WHERE WE, WHERE WE ARE, YOU KNOW, IN FOR 26. OKAY. THAT IS EXACTLY WHAT I WANTED TO KNOW. THANK YOU. UM, SECOND QUESTION AGAIN, UH, ON THIS SLIDE AROUND THE COST OF SERVICE RECOMMENDATIONS, UNDERSTANDING IT'S JUST A RECOMMENDATION. UM, THIS LAST POINT, THE FUTURE IMPLEMENTATION OF WATER BUDGET BILLING TO ADDRESS HIGH IRRIGATION FOR COMMERCIAL AND MULTIFAMILY CUSTOMERS. WAS THERE A DISCUSSION, UH, A DISCUSSION IN THE COST OF SERVICE GROUP AROUND, UM, THE POSSIBLE IMPACT ON RENTERS OF, UM, UH, BUDGET BILLING TO ADDRESS HIGH IRRIGATION AND MULTIFAMILY UNITS? I KNOW SOME MULTIFAMILY COMMUNITIES PASS ON THE COST OF COMMON AREA HEATING AND ELECTRICITY TO RENTERS BASED OFF OF EITHER, YOU KNOW, THEIR SHARE OF SQUARE FOOTAGE IN THE COMMUNITY OR WHAT HAVE YOU. UM, WAS THERE A DISCUSSION ABOUT HOW THIS MIGHT IMPACT RENTERS, UM, IF THE RECOMMENDATION IS ADOPTED? UM, WE DID, WE DID HAVE THAT CONVERSATION AND, AND CERTAINLY WE'RE, WE'RE MINDFUL OF, UH, THE INCREASES THAT, THAT, YOU KNOW, PARTICULARLY FOR MULTIFAMILY CUSTOMERS THAT ULTIMATELY JUST GET PASSED ON TO, UH, RENTERS. UM, AND THE HOPE IS, UH, THE, THE GOAL IS THAT WE DIS, YOU KNOW, WE DIS INCENT HIGH LEVELS OF IRRIGATION AND THAT PROPERTY OWNERS, YOU KNOW, MAKE CHANGES TO, UH, AREAS THAT, THAT, YOU KNOW, CURRENTLY GET IRRIGATION AND, AND MAYBE GO TO MORE NATIVE LANDSCAPING AND, AND, AND REDUCE, UM, YOU KNOW, REDUCE THEIR LEVEL OF DISCRETIONARY USE AS OPPOSED TO JUST KEEPING THE SAME LEVEL. THE, OUR, OUR, OUR GOAL IS, IS TO, TO, YOU KNOW, HAVE THE COMMUNITY BE AS CONSERVATION MINDED AS POSSIBLE, UM, INCLUDING OUR, OUR MULTIFAMILY CUSTOMERS. THANK YOU. I APPRECIATE THAT. UM, FOLLOW UPS, BEFORE I GET TO MY LAST QUESTION, I HAVE ONE FOLLOW UP ON THAT, AND I'M AWARE THIS COMES FROM MY EXPERIENCE IN LIKE THE REGULATORY SPHERE. SO IF IT'S JUST TOTALLY OUT THERE, PLEASE TELL ME. BUT IS THERE ANY WAY THAT Y'ALL, ON THAT SUBJECT SPECIFICALLY WITH RESPECT TO, I I, I KNOW THAT YOU MEN YOU HAD MENTIONED, UM, FOR OLDER MULTIFAMILY AND OLDER, UH, OLDER COMMERCIAL RESIDENCES THAT MAY NOT HAVE THE SAME DEGREE OF BEING ABLE TO MEASURE THAT DISCRETIONARY WATER USE. IS THERE ANYTHING THAT WHETHER AUSTIN WATER OR, OR THE CITY ITSELF COULD DO TO CHANGE CHANGE THEIR ABILITY TO DO THAT? I, IS THERE ANY WAY TO, WHETHER IT IS THROUGH REGULATION OR THROUGH INCENTIVE TO, TO SORT OF BRING THEM TO THE TABLE OF NEEDING TO [01:50:01] PARTICIPATE IN THAT SYSTEM, WHETHER OR NOT THEY THEY ACTUALLY CHANGE THEIR BEHAVIOR? IT WOULD OBVIOUSLY BE ON THEM, BUT, UH, I'LL TAKE A SHOT. I MEAN, WE, RETROFITTING OLD COMMERCIAL BUILDINGS IS VERY DIFFICULT AND VERY COSTLY EXERCISE, RIGHT? I MEAN, I THINK, I THINK OUR GENERAL APPROACHES ON THE WATER CONSERVATION SIDE ARE MORE AROUND, YOU KNOW, JUST CHANGING WATER USE AND WATER USE BEHAVIORS. LIKE JOSEPH MENTIONED, YOU KNOW, NATIVE AND ADAPTIVE LANDSCAPING, THOSE SORTS OF PROGRAMS, I MEAN, I THINK ARE OUR BIGGEST TARGET THERE. I THINK I WOULD JUST REINFORCE, AND I'M GONNA PITCH IT BACK TO JOSEPH HERE, BUT LIKE A LOT OF OUR WORK IN THE EARLY DAYS, PARTICULARLY BEING ABLE TO EXTEND CAP PROGRAM BENEFITS, UM, YOU KNOW, WE, WE, WE GOT OVER THE, YOU GOT A METER AT THE UNIT ISSUE AND I THINK THAT WAS HUGE. AND FRANKLY, I THINK THAT WAS TRANSF, RIGHT? THAT WE, WE USED TO NOT BE ABLE TO MAKE CAP BENEFITS AVAILABLE BECAUSE THEY DIDN'T HAVE METERS. AND SO WE GOT OURSELVES BEYOND THAT. SO I MEAN, I THINK THAT WAS HUGE. I THINK WE WILL CONTINUE TO WORK THROUGH THE PROCESS ON VARIOUS INCENTIVES ON THE COMMERCIAL SIDE TO TRY TO MAKE OLDER UNITS MORE COSTS, UH, EXCUSE ME, MORE WATER EFFICIENT WHERE WE CAN, UM, BUT ULTIMATELY IT'LL PROBABLY INVOLVE TAKING OLD UNITS OUT OF SERVICE FOR NEW UNITS AND BUILT WITH MORE WATER CONSERVATION IN MIND. SO, AND I MEAN, THE, THE ONLY THING I WOULD ADD IS, I MEAN, AS REDEVELOPMENT HAPPENS THEN, UH, YOU KNOW, UH, THAT WOULD COULD TRIGGER, UM, YOU KNOW, UM, HAVING, YOU KNOW, CERTAINLY HAVING TO COMPLY WITH, WITH CURRENT DEVELOPMENT CODE, UM, AND, AND HELPING WITH THAT. BUT, UH, FOR, FOR PROPERTIES THAT, THAT DON'T REDEVELOP, YOU KNOW, WE, UH, WE WANT TO HAVE A PRICE INCENTIVE TO CONSERVE. FINAL QUESTION. THANK YOU FOR YOUR PATIENCE. UM, AND I WANNA START OFF JUST WITH A QUICK PREFACE ECHOING, UM, COMMISSIONER CHILE'S COMMENTS EARLIER, UM, JUST HOW HELPFUL THE BRIEFINGS DURING THE BUDGET COMMITTEE WERE. I, I ALSO WATCHED THE RECORDINGS, UM, AND REALLY APPRECIATE THE BACKGROUND ON THE STRATEGY, UM, UH, AND, AND SUPPORT WHAT Y'ALL HAVE PUT TOGETHER. I HAVE, UM, SORT OF A, A TECHNICAL QUESTION JUST FOR MY OWN UNDERSTANDING, UM, AGAIN ON, UH, PAGE 2, 2 6 OF THE PROPOSED BUDGET TO HELP ME UNDERSTAND, UM, THIS FIRST LINE OF THE FUNDING SOURCE OF COMMERCIAL PAPER. UM, AS I UNDERSTAND IT, YOU KNOW, IN THE BUSINESS SECTOR WE USE COMMERCIAL PAPER AS, UM, SHORT TERM DEBT INSTRUMENT TO HELP RAISE, UH, WORKING CAPITAL FOR NEEDS WITHIN THE OPERATING YEAR. UM, THAT CAN CARRY INTEREST. IT'S USUALLY PAID BACK IN LIKE SIX OR NINE MONTHS. BUT, UM, SEEING THAT THIS MAKES UP, YOU KNOW, ROUGHLY 50 TO, YOU KNOW, TWO THIRDS OF, UM, THE FUNDING SOURCE LINE, UM, I WANTED TO UNDERSTAND A LITTLE BIT ABOUT HOW AUSTIN WATER USES COMMERCIAL PAPER TO HELP MEET REVENUE AND FUNDING NEEDS, UM, AND WHAT IMPACT THAT MAY OR MAY NOT HAVE ON OUR DEBT MANAGEMENT STRATEGIES. SURE. SO I'LL, UH, TAKE THAT QUESTION AND JOSEPH CAN JUMP IN AND ADD TO IT. UM, SO, UH, OUR COMMERCIAL PAPER PROGRAM, UH, THAT IS WHAT WE USE, UH, IN ORDER TO FUND THE CIP FIRST, UM, WITH DEBT. UH, AND WE ALSO HAVE CASH, UH, TRANSFERS IN FROM THE OPERATING. AND SO WE USE OUR COMMERCIAL PAPER PROGRAM BECAUSE IT'S A REVOLVING, IT'S LIKE A REVOLVING LINE OF CREDIT. AND SO ONCE WE GET CLOSE TO OUR THRESHOLD THAT WE SHARE WITH AUSTIN ENERGY, WE SHARE THAT PROGRAM WITH AUSTIN ENERGY, AND ONCE WE GET CLOSE TO OUR THRESHOLD, WE'LL ISSUE A, UH, WE'LL GO OUT AND ISSUE A REVENUE BOND. AND SO WE'LL TURN THAT SHORT-TERM DEBT INTO LONG-TERM DEBT OVER 30 YEARS. AND SO THAT'S HOW THAT PROGRAM WORKS. AND THEN ONCE WE, UH, TURN IT INTO A REVENUE BOND, IT FREES UP THAT LINE OF CREDIT AGAIN, UH, OF COMMERCIAL PAPER FOR US TO DRAW ON AS, UH, WE NEED IT. SO IF WE, WE ONLY PAY THE INTEREST ONCE WE DO OUR DRAWS. AND SO AS WE SPEND IN OUR CAPITAL PLAN, THAT'S WHEN WE, UH, GO AND WE FUND IT, UH, AT THE TIME WE SPEND IT. SO WE'RE NOT DRAWING UNNECESSARILY ON FUNDS AND PAYING INTEREST ON FUNDS WE HAVEN'T USED. THANK YOU. THAT'S VERY HELPFUL. I APPRECIATE IT. YOU'RE WELCOME. SO THEN I WOULD JUST AS YOU KNOW, TO FOLLOW UP, UM, YOU KNOW, WE, WE ONLY USE IT FOR, UH, ON, ON THE CAPITAL SIDE. SO WE DON'T USE COMMERCIAL PAPER TO FUND OPERATIONS. UM, BUT BECAUSE THE INTEREST RATES ARE LOWER, IT ALLOWS US TO, UM, TO FUND THOSE PROJECTS USING SHORT TERM COMMERCIAL PAPER AT LOWER INTEREST RATES, ACCUMULATE THAT DEBT. UM, AND THEN WE, YOU KNOW, WE ISSUE OUR LONG-TERM BONDS TO REFUND OR TO REFINANCE THAT SHORT-TERM DEBT [01:55:01] INTO LONG-TERM DEBT. AND IT ALLOWS US TO AVOID, UH, TAKING OUT BONDS UPFRONT AND PAYING INTEREST ON MONEY WE'RE NOT EVEN UTILIZING YET. SO IT ALLOWS US TO, TO BETTER TIME OUR CASH FLOWS. AND THEN QUICK FOLLOW UP ON THIS, UM, IF, IF Y'ALL COULD SHARE, UM, IF THERE'S A FINANCIAL POLICY OR IF YOU COULD SHARE WHAT THE THRESHOLD IS FOR, UM, WHERE WE WOULD THEN ISSUE REVENUE BONDS. SURE. SO WE INCREASED OUR THRESHOLD, I BELIEVE IT WAS LAST YEAR, UH, TO $400 MILLION ON OUR COMMERCIAL PAPER PROGRAM. AND THAT WAS PRIMARILY DUE TO, UH, WALNUT CREEK. WE KNEW THAT WALNUT CREEK WAS ON THE HORIZON AND WE NEEDED MORE CAPACITY IN OUR COMMERCIAL PAPER PROGRAM. AND SO AS WE GET CLOSE TO THAT THRESHOLD, THAT'S WHEN WE'LL START THE PROCESS. UH, THE PROCESS OF ISSUING A REVENUE BOND CAN TAKE ANYWHERE FROM, FROM ABOUT NINE MONTHS. UM, SO WE START PLANNING WITH OUR CITY TREASURY AND WITH OUR, UM, FINANCIAL ADVISORS AND OUR BOND COUNCIL AND WE START WORKING ON EVERYTHING THAT'S NEEDED IN ORDER TO ISSUE A REVENUE BOND. THANK YOU. AND NO FURTHER QUESTIONS FROM ME. UM, I'LL JUST JUMP IN HERE 'CAUSE THE TEAM PROBABLY WON'T TOOT THEIR OWN HORN, BUT I WILL SAY THAT OUR DEBT MANAGEMENT PROGRAM HAS BEEN RECOGNIZED BY THE GOVERNMENT, WHAT WAS IT? THE, UH, GOVERNMENT FINANCE OFFICERS ASSOCIATION, I THINK IN 2022. SO, UM, BACK TO COMMISSIONER AT TILLEY'S QUESTION ABOUT EFFICIENCY AND BEING RESPONSIBLE, I THINK THAT'S JUST ONE GREAT EXAMPLE OF THE HARD WORK THAT THAT IS DONE. SO I'LL JUST NOT KIND OF COMMENT FOR THE TEAM THERE. GOOD WORK. WELL, I, I APPRECIATE IT. AND I'LL JUST SAY THAT THAT WAS, UH, YOU KNOW, AN UNSOLICITED, UH, KUDOS, . ALRIGHT, WELL, COMMISSIONERS, UM, DO WE HAVE ANY MORE QUESTIONS? I APPRECIATE ALL THE GREAT DISCUSSION AND QUESTIONS FROM THE COMMISSION AND, UH, APPRECIATE THE PRESENTATION IN ANSWERING THE QUESTIONS FROM THE STAFF. AND SO IF WE ARE ABLE TO CLOSE THIS, WE'LL MOVE ON TO OUR LAST [15. Approve a recommendation to Council on Austin Water’s Fiscal Year 2025-2026 Proposed Operating Budget, Capital Budget, new appropriations, rates, and fees, and 5-Year Capital Improvement (CIP) spending plan.] ITEM, WHICH IS GOING BACK TO ITEM 15, THAT HAS TO DO WITH THE RECOMMENDATION FOR THE BUDGET AND THE APPROPRIATIONS CAPITAL IMPROVEMENT SPENDING SPENDING PLAN. SO CHAIR, I UH, DON'T HAVE ANY QUESTIONS, BUT I WAS JUST GONNA SAY, I'VE GONE AND WATCHED ALL THE VIDEOS MYSELF. I THINK IT'S A LOT OF INCREDIBLE WORK. I KNOW THERE ARE SOME QUESTIONS TO BE ANSWERED, SOME GREAT QUESTIONS, BUT I WANTED TO JUST SAY KUDOS TO THIS, TO STAFF FOR HAVING PUT THIS TOGETHER. YEAH, THANK YOU VERY MUCH, UH, COMMISSIONER PAN DURRANI AND I'LL, I SHOULD PAUSE AND ASK IF THERE'S ANY OTHER COMMENTS OR QUESTIONS BEFORE WE, WE MOVE ON. ALRIGHT. OKAY. SO I THINK WITHOUT HAVING ANY MORE COMMENTS OR QUESTIONS ON THE, THE BUDGET ITEMS AND THE PRESENTATION AND THE BRIEFINGS, WE CAN ENTERTAIN A MOTION ON ITEM 15, MOVE TO APPROVE. WE HAVE A, A MOVE TO APPROVE BY COMMISSIONER STEN CROFT. I SECOND, SECOND FROM COMMISSIONER PAN DURRANI. ALL IN FAVOR, PLEASE, UH, VOTE BY RAISING YOUR RIGHT HAND OR YOUR HAND. SORRY, . AND THAT LOOKS UNANIMOUS. YES. THANK YOU. THANK YOU, COMMISSIONERS. OKAY. THAT DOES IT FOR OUR, OUR OUR DISCUSSION AND ACTION ITEMS AND OUR BRIEFINGS AND OUR UPDATES. THE LAST THING ON THE AGENDA [FUTURE AGENDA ITEMS ] IS TO DISCUSS ANY FUTURE AGENDA ITEMS. UH, DO WE HAVE ANY OF THOSE AT THIS TIME? AND THEY CAN ALSO BE, UH, COMMUNICATED VIA EMAIL THROUGH OUR CHANNEL. I HAVE TWO THAT I'D LIKE TO ADD, UM, FOR FUTURE CONSIDERATION. AND THE FIRST IS, UM, JUST IN LIGHT OF THE DEVASTATING FLOODS, JUST MAYBE AN UPDATE FROM AUSTIN WATER ON HOW YOU, UM, THE FACILITIES FARED DURING THE WET WEATHER. UM, AND JUST KIND OF HOW THEY WERE ABLE TO RESPOND IF, IF ANY ISSUES AROSE. UM, AND THE SECOND IS JUST IN LIGHT OF THE CONVERSATION REGARDING THE UTILITIES ASSET MANAGEMENT PROGRAM, I FEEL LIKE WE COULD USE A BRIEFING, ESPECIALLY CONSIDERING WE HAVE SO MANY NEW COMMISSIONERS, UM, OF THE PROGRAM, KIND OF, OF THE PRIORITIZATION AND WHAT CRITICALITY MEANS AND, AND ALL THOSE THINGS. AND POTENTIALLY JUST A, AN UPDATE FOR EVERYONE. SO, SO WE CAN HAVE A BETTER UNDERSTANDING OF HOW, UM, YOU KNOW, THESE IMPORTANT DECISIONS ARE MADE AND WHAT DATA IS USED. UH, I JUST WANNA PIGGYBACK OFF OF, UM, THAT DISCUSSION. I THINK A FEW MONTHS BACK I HAD ASKED FOR [02:00:01] A BRIEFING, UM, ON FUTURE STRATEGIC INITIATIVES FROM AUSTIN WATER. I KNOW WE'RE WRAPPING UP A MI, THERE'S A LOT OF THINGS THAT ARE SORT OF CULMINATING. SO IN THAT SENSE, I'D LIKE TO UNDERSTAND WHAT IS AUSTIN MOTOR'S NEXT FIVE YEAR, FIVE TO 10 YEARS VISION. THANK YOU COMMISSIONERS, IAN AND PANANG. AND I'M LOOKING OVER AT HEATHER AND WE, SHE HAS THOSE NOTED, SO WE WILL, UH, FOLLOW UP ON THOSE IN THE FUTURE. OKAY. WITH THAT, IT'S 6:02 PM AND I CALL THIS MEETING ADJOURNED. THANK YOU VERY MUCH. THANK YOU. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.