Jul 23, 2026 Water and Wastewater Commission

[CALL TO ORDER ]

[00:00:07]

TO ORDER AT 305. JUST SHY OF 306.

I APPRECIATE EVERYBODY TAKING THE TIME TO BE HERE FOR THE BUDGET COMMITTEE MEETING. I GUESS FIRST WE'LL GO THROUGH AND I ALWAYS FORGET THIS PART.

DO I DO PUBLIC SPEAKERS FIRST? DO WE GO TAKE ROLL FIRST? OKAY. PERFECT. IN PERSON WE HAVE COMMISSIONERS, WOLSTENCROFT, COMMISSIONER, MAXWELL GAINES AND MYSELF.

COMMISSIONER, AS WELL AS AUSTIN WATER FINANCE STAFF.

[APPROVAL OF MINUTES ]

EXCELLENT. DO WE HAVE A MOTION? I SECOND. ALL RIGHT. AND YOUR VOTE PASSES.

MINUTES APPROVED UNANIMOUSLY.

GREAT. AND IF YOU WANT TO CHECK TO SEE IF THERE'S ANY PUBLIC SPEAKERS IN THE AUDIENCE TODAY, THERE ARE NO PUBLIC SPEAKERS.

GREAT. NO PUBLIC SPEAKERS.

WONDERFUL. SO THEN NO PUBLIC SPEAKERS.

WE APPROVE THE MINUTES FROM THE LAST MEETING, AND WE CAN MOVE ON TO THE FIRST MEETING FOR DISCUSSION UNDER DISCUSSION ITEMS.

[2. Austin Water’s Proposed FY 2026-2027 Budget Update ]

GOOD AFTERNOON, COMMISSIONERS, AND THANKS FOR MEETING TODAY ON THE BUDGET COMMITTEE. AND WE JUST WOULD LIKE TO GIVE YOU.

OH, I'M CHRISTINA ROMERO.

I AM THE ACTING ASSISTANT DIRECTOR FOR FINANCIAL SERVICES, AND WE JUST WANTED TO GIVE YOU AN UPDATE OVERVIEW ON SOME CHANGES BETWEEN THE FORECAST THAT WE HAD PREVIOUSLY DISCUSSED TO THE 2027 PROPOSED BUDGET THAT WAS RELEASED BY COUNCIL OR BY OUR BUDGET OFFICE OVER A WEEK AGO.

AND SO THIS SHEET THAT YOU'RE SEEING IS OUR SIGNIFICANT CHANGES SINCE THE FORECAST.

YOU CAN SEE THAT WE PRESENTED YOU WITH THE FORECAST OF A TOTAL OF REQUIREMENTS FOR $908.4 MILLION AND GOING INTO OUR BUDGET WE BROUGHT THAT DOWN TO $899.8 MILLION AND JUST WANTED TO HIGHLIGHT SOME OF THE SIGNIFICANT CHANGES THERE.

I WON'T GO OVER ALL OF THEM, BUT IF YOU HAVE ANY QUESTIONS, LET ME KNOW. SO THE MOST SIGNIFICANT WAS A $5 MILLION INCREASE TO HELP OUR CIP CASH FUNDING OF THOSE PROJECTS. AND THEN 4.3 MILLION INCREASE FOR A CITY WIDE WAGE ADJUSTMENT.

SO IF YOU RECALL, IN OUR FORECAST, WE DID HAVE A 0% WAGE ENHANCEMENT FOR EMPLOYEES AND WE WERE ABLE TO PUT BACK 3% PER THE CITY CITY WIDE.

AND THEN NEXT AFTER THAT WAS A 2.6 MILLION INCREASE FOR A TRANSFER TO TECHNOLOGY SERVICES SUPPORT, AND THEN 1.2 MILLION INCREASE FOR OUR UTILITY BILLING SYSTEM.

AND THEN BELOW THAT, THE MOST SIGNIFICANT DECREASES.

I'LL START WITH IS OUR BUDGET UTILIZATION ADJUSTMENT.

SO AS WE HAD PREVIOUSLY DISCUSSED IN A PRIOR MEETING WE REALLY DO GREAT WORK ON OUR BUDGET IN WHICH WE'RE REALLY TRYING TO MAKE SURE WE ARE RIGHTSIZING OUR BUDGET.

AND WE LOOK LINE ITEM BY LINE ITEM.

SO WE WERE ABLE TO REDUCE OUR BUDGET BY 7.4 MILLION JUST IN BUDGET UTILIZATION ALONE.

YOU KNOW, LOOKING AT TRENDS SEEING SPENDING AND WHAT HAS THAT BEEN COMING FOR FISCAL YEAR 27? NEXT WAS OUR DEBT SERVICE COST A REDUCTION OF 4.8 MILLION.

AND A LOT OF THAT IS DUE TO OUR EFFORTS WITH DEBT DEFEASANCE TRANSACTIONS.

AND SO, AS YOU RECALL, WHEN YOU'RE TALKING ABOUT DEBT DEFEASANCE AND HOW WE DO THIS ON AN ANNUAL BASIS, AND THAT REALLY DOES HELP OUR BUDGET AND ALSO HELPS WITH THE RATE INCREASES AND HOW WE MAINTAIN OUR FINANCES.

AND THEN NEXT IS THE REDUCTION IN CONSULTANT CONTRACTS OF 2.1.

AND THEN LAST I'LL GO OVER IS A 1.7 MILLION DECREASE IN THE TRANSFER FOR OUR CAPITAL PROJECT MANAGEMENT, CIP, AS THEY DO A COST ALLOCATION.

AND SO THAT CAME DOWN.

IT'S A HISTORICAL LOOK OF THE PAST TWO YEARS.

AND SO NOW I'LL OPEN IT UP IF YOU HAVE ANY QUESTIONS.

THANKS, CHRISTINA. I GUESS WHAT WAS THE, YOU KNOW, SO YOU HAVE THE FORECAST AND THEN YOU COME UP WITH THE ACTUAL BUDGET AND I'M SURE THINGS CHANGE. I GUESS I'M LOOKING DOWN AND AS I'M SEEING THE DECREASES, YOU KNOW, OR ALL OF THESE LINE ITEMS, YOU KNOW, LIKE TECH SUPPORT ENGINEERING, PROFESSIONAL SERVICES COSTS, PARTS, EQUIPMENT, ELECTRICITY, LIGHTNING, LIGHTING,

[00:05:02]

COMMERCIAL INCENTIVES DECREASE LIKE ALL THESE OTHER CATEGORIES ARE VERY LIKE I WAS SAYING, I DON'T KNOW THE RIGHT WORD, YOU KNOW, BILLING SUPPORT, THIS AND THAT. AND THEN THERE'S JUST THESE TWO THAT DON'T SEEM TO FIT THAT ARE ACTUALLY, YOU KNOW, IMPORTANT, YOU KNOW, FOR THE FUTURE FROM ADVERTISING, WATER CONSERVATION, AND THEN COMMERCIAL INCENTIVES.

SO I'M JUST WONDERING, HOW DID THOSE GET CHOSEN TO DECREASE IN THE FINAL BUDGET? SO AS JOSEPH GONZALEZ, DEPUTY DIRECTOR OF BUSINESS SERVICES AND AS YOU KNOW YOU KNOW, THE CITY'S OVERALL BUDGET, THE CITY'S GENERAL FUND BUDGET HAS BEEN TIGHT THE LAST FEW YEARS IN LARGE PART BECAUSE OF THE 3.5% PROPERTY TAX CAP.

SO CITY COUNCIL AND CAN, CAN ONLY ADOPT A TAX RATE THAT GENERATES 3.5% MORE REVENUE ON PROPERTIES ON, ON PROPERTIES THAT WERE IN THE TAX ROLL IN THE PRIOR YEAR. NEW PROPERTIES ARE AN ADDER.

BUT SINCE THAT 3.5% TAX CAP WAS IMPLEMENTED, IT'S, IT'S MADE IT TOUGH ON, ON THE GENERAL FUND BUDGET.

AND AS A DEPARTMENT OF THE CITY, WE, WE FOLLOW THE OVERALL CITY BUDGET PROCESS. AND OVER THE LAST FEW YEARS, LAST YEAR AND THIS YEAR, THE CITY HAS IMPLEMENTED A PROCESS WHEREBY EVERY DEPARTMENT IS TASKED TO, TO IDENTIFY CUTS IN SERVICES, CUTS IN OUR BUDGET THAT ARE THAT WE CONSIDER THE, THE FURTHEST FROM, FROM OUR CORE MISSION.

AND FOR US, THAT'S A DIFFICULT EXERCISE.

YOU KNOW, THERE'S, THERE'S NOT YOU KNOW THERE'S NOT A LOT THAT WE DO.

IN FACT, I'D SAY THERE'S PROBABLY VERY, VERY LITTLE THAT WE DO THAT DOESN'T DIRECTLY CONTRIBUTE TO TO SERVING OUR CUSTOMERS.

THOSE TWO SPECIFICALLY BECAUSE THEY'RE NOT DIRECTLY RELATED TO TREATMENT DISTRIBUTION COLLECTION WERE TWO ITEMS THAT, WE IDENTIFIED AS AN AREA THAT WE WE COULD REDUCE OUR BUDGET. IF WE HAD TO AND, AND, AND THOSE TWO ITEMS WERE, WERE ACCEPTED AS A PROPOSED CUT AS WE WORKED WITH CITY MANAGEMENT IN FINALIZING OUR BUDGET. IT'S JUST BECAUSE LIKE, YOU KNOW, THE.

PROPOSED BUDGET IS EIGHT POINT, YOU KNOW, AND OF COURSE, THEY'RE ASKING YOU TO TRIM UP AS MUCH AS YOU CAN.

AND SO IT'S EIGHT AND A HALF, 8.6 BELOW.

AND I'M JUST, YOU KNOW, LIKE, DID THEY, WAS THERE A SPECIFIC LIKE WE NEED YOU AT 8.6 BELOW, YOU KNOW, BECAUSE AGAIN, THESE TWO LINE ITEMS I MEAN, I KNOW THEY'RE SIGNIFICANT, YOU KNOW, A MILLION, A LITTLE OVER A MILLION EACH OR WHATEVER. RIGHT? I'M JUST TRYING TO FIGURE OUT LIKE, AGAIN, IT'S JUST, YOU KNOW, AS WE GO FORWARD, YOU KNOW, NOW THE LAKE IS AT 100%, I CAN TELL YOU THIS IS MY EXPERIENCE FROM MY BUSINESS.

PEOPLE ARE GOING TO STOP CARING ABOUT CONSERVATION.

WRITE THE STORIES ABOUT THE LAKE BEING LOW.

THAT'S ALL GOING TO GO AWAY. SO JUST HUMAN NATURE.

IT JUST DROPS OFF. SO THE IDEA OF LIKE TAKING THE PEDAL OFF THE ACCELERATOR OF LIKE PROMOTING CONSERVATION.

AND AGAIN, I MEAN, I KNOW THAT AUSTIN WATER DOES A GREAT JOB.

ALL THAT STUFF JUST, YOU KNOW, IS NOT LIKE A HUGE, BUT IT'S JUST, YOU KNOW, I GUESS I'M JUST TRYING TO UNDERSTAND BECAUSE I CAN SEE ALL THESE OTHER DEDUCTIONS AND, YOU KNOW, BUT THEREOF, LIKE, YOU KNOW, SYSTEMS, PARTS FOR EQUIPMENT AND STREET CUT COSTS. AND I DON'T KNOW, THESE ARE THE ONLY TWO THAT ARE INCENTIVE OR ADVERTISING RELATED. SO THEY JUST STICK OUT TO ME.

AND IT ALSO FEEL LIKE, YOU KNOW, IT IS SOMETHING AS, AS AUSTIN WATER GOES FORWARD THAT THESE ARE NEEDED.

AND, AND PARTICULARLY DURING THESE TIMES WHEN PEOPLE SEEM TO CARE LESS ABOUT CONSERVATION BECAUSE OF LOCAL CONDITIONS.

SO I'M JUST TRYING TO PUT THIS OUT THERE.

I MEAN, I'M NOT ASKING FOR ANY KIND OF, YOU KNOW, CHANGE. I'M JUST TRYING TO GET A REAL GOOD UNDERSTANDING BECAUSE, YOU KNOW, IT IS I BELIEVE THE CORE MISSION HOOKED, OBVIOUSLY. BUT YEAH, JUST TRYING TO UNDERSTAND HOW BECAUSE I'M SURE THERE'S

[00:10:04]

AND SO WHY DID THESE TWO GET HOOKED IN THERE ANYWAYS? I'M JUST WELL, AND AS TINA MENTIONED, YOU KNOW, THE BUDGET UTILIZATION ANALYSIS THAT WE DO EVERY YEAR IS REALLY COMPREHENSIVE.

AND IT LOOKS AT, YOU KNOW, WHAT ARE OUR SPENDING TRENDS COMPARED TO OUR PRIOR YEAR BUDGETS. AND, AND SO THAT 7.4 MILLION REPRESENTS REPRESENTS CUTS WHERE, YOU KNOW, OUR SPENDING HAS HISTORICALLY TRACKED BELOW OUR BUDGET SPENDING. AND THIS IS AN EFFORT THAT WE'VE BEEN DOING FOR THE LAST SEVERAL YEARS. I'LL SAY, YOU KNOW, THE FIRST YEAR, YOU KNOW, THE USUALLY UTILIZATION CUTS WERE UP MORE THAN 12 MILLION RANGE.

AND SO AS WE'VE REFINED AND, YOU KNOW, THERE'S, THERE'S LESS OPPORTUNITIES, LESS LOW HANGING FRUIT IN THAT AREA, WHICH, WHICH MAKES, YOU KNOW, THIS EFFORT THAT MUCH MORE DIFFICULT FOR US.

BUT WE ALSO AS YOU KNOW, OVER THE LAST FEW YEARS WELL, FOR, FOR MANY YEARS HAVE BEEN HEAVILY FOCUSED ON, ON AFFORDABILITY AND, AND SO CERTAINLY, YOU KNOW, THIS EXERCISE IS, IS, YOU KNOW, AN EXERCISE THAT, YOU KNOW, ALL CITY DEPARTMENTS DO WITH THE END GOAL OF, OF YOU KNOW, HAVING AS AFFORDABLE CITY SERVICES AS WE CAN HAVE.

AND, AND SO THOSE TWO ITEMS WERE, WERE, WERE ACCEPTED.

WE, WE PROPOSED A TOTAL OF ABOUT $15 MILLION IN REDUCTIONS AND CAME TO ABOUT, YOU KNOW, ALMOST 12 MILLION, ABOUT 11.9 MILLION OF REDUCTIONS AS A RESULT OF THAT EFFORT. BUT FOR, FOR, FOR ME, IT'S IT'S, IT'S, AND, YOU KNOW, OUR ENTIRE EXECUTIVE TEAM, IT'S YOU KNOW, WE KIND OF EQUATE IT TO LIKE, WHICH CHILD DO YOU, DO YOU, DO YOU LOVE THE MOST? YOU KNOW, WE LOVE THEM ALL, BUT, YOU KNOW, HAD TO MAKE SOME DIFFICULT DECISIONS. YEAH, YEAH.

THANKS FOR THE ANSWER.

I JUST WANT TO MAKE SURE YOU UNDERSTAND THE UNDERLYING THINKING AND KNOWING THAT, YOU KNOW, YOU HAVE TO MAKE DIFFICULT CHOICES.

SO I APPRECIATE THE ANSWER.

LETTING ME UNDERSTAND THAT MORE.

SO YEAH, NO, YOU'RE WELCOME. AND I'D LIKE TO ADD ON TOP OF WHAT JOSEPH INDICATED, THIS DOESN'T DEPLETE OUR ADVERTISING BUDGET.

WE STILL HAVE ADVERTISING.

WE WILL STILL BE DOING THAT.

AND WE, WE LOOKED AT OUR OUR BUDGET AND WHAT WE'VE BEEN SPENDING ON ADVERTISING.

AND SO IT SEEMS LIKE WE ARE STILL GOING TO STAY IN THAT REALM OF SPENDING THAT WE'VE SEEN HISTORICALLY. AND SO WE STILL HAVE THAT BUDGET FOR IT.

THAT'S WHAT I WAS GOING TO ASK. IF THERE WAS, YOU KNOW, WHAT NUMBER OR HOW MUCH WAS STILL IN THERE FOR, YOU KNOW, AND HOW THAT ALIGNED WITH WHAT WAS IN THERE BEFORE. YEAH. AND I GUESS JUST A GENERAL STATEMENT OR QUESTION, BUT I KNOW THAT A LOT OF ADVERTISING AND MARKETING HAS NOW GONE ONLINE, RIGHT? SO IS THAT CHEAPER OR LESS EXPENSIVE TOSSED IN WATER THAN THE MAILERS PERHAPS, OR THEN, YOU KNOW, SO IS IT CHANGING THE METHODS? ARE THEY CHANGING SUCH THAT IT BECOMES LESS EXPENSIVE, OR IS IT JUST A MATTER OF KIND OF FOLLOWING THE TRENDS? I THINK JOSEPH CAN CHIME IN AFTER THIS, BUT I THINK A LOT OF THE SOCIAL MEDIA THAT WE DO MY UNDERSTANDING THAT'S LITTLE TO NO COST, YOU KNOW, HAVING THE FACEBOOK ACCOUNT, YOU KNOW, SENDING THAT MESSAGE OUT.

AND IT DID CHANGE DYNAMICALLY FROM, YOU KNOW, MAIL OUTS AND WE STILL HAVE MAIL OUTS THAT WE DO.

THERE'S STILL PEOPLE THAT, YOU KNOW, LIKE TO RECEIVE MAIL FROM US AND READ IT, WHICH IS GREAT.

BUT WE ARE SEEING THAT SHIFT.

I KNOW THAT I DON'T KNOW AT WHAT COST THOUGH.

RIGHT. YEAH. AND TINA'S RIGHT.

YOU KNOW, WE, WE, YOU KNOW, AS WE PROPOSE THOSE CUTS, WE CERTAINLY DIDN'T PROPOSE ANY ELIMINATION.

AND PARTICULARLY AS IT RELATES TO, YOU KNOW, SOME OF OUR CONSERVATION INCENTIVES THAT YOU KNOW, A PART OF THAT IS YOU KNOW, KIND OF AN EXTENSION OF OUR BUDGET UTILIZATION ANALYSIS. IN OTHER WORDS YOU KNOW, THE YOU KNOW, AS YOU MENTIONED, YOU KNOW, NOW THAT THE LAKES ARE FULL WE WILL LIKELY SEE YOU KNOW LESS FOCUS ON, ON CONSERVATION AND, AND AS A RESULT YOU KNOW, WE, YOU KNOW, WE WERE ALREADY SEEING DEMAND

[00:15:03]

AND SO I THINK THAT THAT WILL LIKELY EXTEND YOU KNOW, EVEN FURTHER. BUT IF WE SEE AN INCREASE IN DEMAND, FOR EXAMPLE, FOR CONSERVATION INCENTIVES, WE DON'T TURN PEOPLE AWAY.

IN OTHER WORDS, WE DON'T HAVE A CAP. WE MIGHT GO OVER BUDGET.

BUT, BUT CONSERVATION INCENTIVES IS SOMETHING THAT WE RECOGNIZE THE DEMAND EBBS AND FLOWS.

WE, WE THINK THE BUDGET REFLECTS KIND OF OUR HISTORIC DEMAND, BUT IF WE SEE A TICK UP IN DEMAND, WE CAN RESPOND.

WE DO HAVE A UTILITY WIDE CONTINGENCY THAT, THAT PROVIDES US WITH THE ABILITY TO, TO ABSORB ANY, ANY CHANGES IN BUDGETARY NEEDS THROUGHOUT THE YEAR.

THANK YOU FOR THAT. AND I HAVE ONE MORE QUESTION.

THIS ITEM, THERE'S A 6 MILLION OR 0.6 MILLION INCREASE IN ENGINEERING PROFESSIONAL SERVICES. YEAH. THERE WAS A DECREASE IN CONSULTANT CONTRACTS AND OTHER SERVICES.

WHAT'S THE DIFFERENCE? OR CAN YOU MAYBE ELABORATE ON THE DIFFERENCES BETWEEN THE TWO.

WE'D HAVE TO PROBABLY DIG INTO IT.

AND I DON'T KNOW IF YOU HAVE THAT, BUT IF I RECALL, THE ENGINEERING PROFESSIONAL SERVICES IS, YOU KNOW, HIRING, YOU KNOW, OUTSIDE ENGINEERING FIRM TO HELP US WITH SOME OF OUR PROJECT MANAGEMENT EFFORTS. SO. SO THAT'S A REAL SPECIFIC ASK.

BUT OVERALL, WE UNDERTOOK AN EFFORT TO, TO LOOK AT OUR OUTSIDE CONTRACT SPENDING.

SO, SO, SO THAT'S A SPECIFIC AD.

BUT WE LOOKED AT, YOU KNOW, ARE THERE WAYS THAT WE ARE SPENDING, YOU KNOW, THAT WE'RE ALLOCATING BUDGET AND SPENDING FOR OUTSIDE SERVICES OR WERE THERE WAYS TO PULL THAT BACK? SO THAT'S MORE OF A GENERAL LOOK KIND OF ACROSS THE BOARD.

AND WE TARGETED, IF I RECALL MAYBE AN 8% INCREASE IN OUTSIDE, YOU KNOW, OUTSIDE SERVICES CONTRACTS.

BUT WE'RE STRUGGLING IN A SPECIFIC AREA THAT THAT WE HAD A SPECIFIC PROPOSAL FOR OUTSIDE ENGINEERING SUPPORT TO HELP US WITH SOME OF OUR PROJECT MANAGEMENT EFFORTS.

GOT IT. THANK YOU. AND I APOLOGIZE, I WOULD BE ABLE TO LOOK THAT UP FOR YOU RIGHT NOW, BUT I'M HAVING A LITTLE BIT OF TECHNICAL ISSUES TODAY WITH THE COMPUTER.

BUT I CAN TELL YOU THAT JUST RECALLING A LOT OF THE CONSULTANT THAT WAS NOT ENGINEERING BASED, THERE WAS SOME, I BELIEVE SOME MAYBE STREET CUTS INVOLVED IN THAT I RECALL. SO IT WAS MORE JUST CONSULTING, BUT NOT NECESSARILY ENGINEERING.

THAT MAKES SENSE. THANK YOU.

COMMISSIONERS DO YOU HAVE ANY ADDITIONAL QUESTIONS FOR DISCUSSION? ITEM NUMBER TWO. NO. OKAY.

[3. Austin Water’s Proposed FY 2026-2027 through FY 2030-2031 Capital Spending Plan Update ]

ADDITIONALLY, WHEN WE HAVE OUR FULL COMMISSION MEETING HE WILL ALSO BE PRESENTING. HE'LL HAVE A PRESENTATION AND GO OVER MORE DETAIL THERE, BUT HE WANTED TO BE ABLE TO HAVE A DISCUSSION WITH YOU TODAY SO WE CAN ANSWER ANY QUESTIONS THAT YOU HAVE ON OUR CIP PLAN BEFORE WE GO INTO OUR COMMISSION MEETING.

THANK YOU. WELCOME. THANK YOU AGAIN.

MARTIN TOWER, INFRASTRUCTURE MANAGEMENT DIVISION MANAGER HERE AT AUSTIN WATER.

AS TINA POINTED OUT, WE KIND OF WORK IN COMPLEMENT TO THE FINANCE TEAM AS THEY PREPARE THE BUDGET BY BRIDGING THE GAP OR FILLING THE GAP BETWEEN FINANCE AND ENGINEERING AND OPERATIONS TO TRY AND TRANSLATE THE INFRASTRUCTURE NEEDS INTO YOU KNOW, A FORMAT, A PARADIGM THAT FITS INTO OUR BUDGET PLANNING PROCESS.

SO THAT PROCESS IS OVERSEEN BY A SUBSET OF OUR EXECUTIVE TEAM.

[00:20:02]

AND THAT'S LARGELY BECAUSE AT ITS CORE, THE REQUESTS FOR CAPITAL FUNDING COME IN THROUGH THE FORM OF A DOCUMENTED STANDARD FORMAT BUSINESS CASE.

SO THESE BUSINESS CASES, I THINK THEY AMOUNTED TO LIKE MAYBE ABOUT 120 BUSINESS CASES IN THE LAST CIP.

THEY ARE REVIEWED YOU KNOW, INDIVIDUALLY OVER THE COURSE OF ABOUT A MONTH'S TIME IN THESE SESSIONS BEFORE THE, THAT EXECUTIVE COMMITTEE RETURNS ITS RECOMMENDATIONS FOR, FOR WHAT THE NEXT CIP PLAN SHOULD BE.

BUT IF YOU HAVE A SENSE OF OUR CAPITAL IMPROVEMENTS PROGRAM, IT'S ACTUALLY QUITE, QUITE A LARGE PROGRAM WITH UPWARDS OF LIKE 500 DIFFERENT UNIQUE SUBPROJECTS IN IT. SO OUR CIP PLAN IS IN FACT, EVERY YEAR BUILT UP FROM ZERO.

EVERY SINGLE PROJECT THAT IS BEING CONSIDERED, WHETHER IT'S ALREADY UNDERWAY OR IT'S A BRAND NEW IDEA GETS BROUGHT INTO THIS PROCESS THAT'S OVERSEEN BY OUR BUSINESS CASE REVIEW COMMITTEE. AND AND WE FIND MECHANISMS FOR BEING AS EFFICIENT AS POSSIBLE WITH OUR EXECUTIVES TIME SO THAT WE CAN GET THROUGH KIND OF A 500 LINE ITEM BUDGET.

SO THERE'S KIND OF DETAILS INSIDE OF THAT, WHICH I'LL GO INTO IN A MOMENT, BUT I WANT TO JUST PAUSE AND SEE IF THERE'S ANY DIRECTION IN PARTICULAR. YOU WANT ME TO TAKE THIS, OR IS THERE ANY QUESTIONS YOU WANT TO MAKE SURE THAT WE GET ANSWERED? OKAY, COOL. SO, RIGHT, IF WE KIND OF MARCH ALONG THROUGH THE PROCESS, BASICALLY, YOU KNOW, WE HAVE WHAT, 1400 STAFF WE HAVE TRY TO, YOU KNOW, TAXONOMIZE THAT INTO TEN DIFFERENT INFRASTRUCTURE GROUPS.

SO MAYBE THEIR WATER TREATMENT PLANTS, MAYBE THEIR WASTEWATER PIPES, MAYBE THEIR VEHICLES. I.T. BUILDINGS, THEY ALL HAVE DIFFERENT INFRASTRUCTURE BASES.

THEY ALL HAVE DIFFERENT INFRASTRUCTURE NEEDS.

AND SO ONE OF THE FIRST THINGS THAT WE DO IN OUR CAPITAL DEVELOPMENT PROCESS IS TO UNDERSTAND WHAT WE HAVE TODAY AND TO UNDERSTAND THE REINVESTMENT NEEDS, LIKE THE THE ASSET RISKS IN TODAY'S DATA ASSET BASE.

SO WE INTERROGATE OUR ENTERPRISE ASSET DATABASES AND IDENTIFY THE VALUE OF OUR ASSETS THAT ARE IN KIND OF THE HIGHEST RISK, THE WORST CONDITION, WORST CONDITION, AND MOST CRITICAL, GIVE THESE INFORMATION TO THAT EXECUTIVE SUBCOMMITTEE. THE EXECUTIVE COMMITTEE CALLED THE BUSINESS CASE REVIEW COMMITTEE. AND THEY, USING THE ANALYSIS THAT MY TEAM PROVIDES AROUND THE SCALE OF THE RENEWAL NEED FOR OUR CURRENT ASSET BASE, THEY IDENTIFY AN AMOUNT TO BE OF DELEGATED AUTHORITY.

AND THAT DELEGATED AUTHORITY IS AGAIN, IT'S DATA DRIVEN, IT'S BASED ON OUR CURRENT ASSET CONDITIONS.

AND THAT IS DELEGATED TO THE NEXT IMPORTANT GROUP OF DECISION MAKERS INSIDE OF OUR PROCESS, WHICH IS OUR CIP CHAIRS.

SO OUR CIP CHAIRS ARE AT THE DIVISION LEVEL, SO THEY'RE KIND OF ONE BELOW THE EXECUTIVE TEAM. AND THEY ESSENTIALLY HAVE CONSTITUENTS THAT COVER THE ENTIRE UTILITY.

SO WE HAVE SIX CIP CHAIRS.

THOSE CIP CHAIRS COVER AREAS LIKE ALL OF OUR OPERATIONAL FACILITIES, OUR PIPELINE FACILITIES, OUR VEHICLES, OUR INFORMATION TECHNOLOGY, AS WELL AS OUR OUR LIKE SYSTEM EXTENSION AND ENHANCEMENT ASPECTS.

SO ACROSS THOSE SIX MIDDLE MANAGEMENT ENGINEERS AND MANAGERS, THEY ARE THE ONES WHO IDENTIFY THE INDIVIDUAL SUBPROJECTS TO BE INCLUDED IN THE CAPITAL IMPROVEMENTS PLAN PROPOSAL FOR REVIEW BY OUR EXECUTIVES AND THEY, OF COURSE DO THAT IN CONSULTATION WITH WHAT, IN SOME INSTANCES, MAYBE DOZENS OF STAFF WHO ARE ON THE GROUND, WHO HAVE A SENSE OF WHAT THEY THINK IS NEEDED. AND, YOU KNOW, THEY'RE COVERING REALLY NOT JUST RENEWAL OF ASSETS USING THEIR DELEGATED AUTHORITY, BUT ALSO WHAT ENHANCEMENTS, OPPORTUNITIES THEY SEE THAT THEY WANT TO BRING FORWARD TO THE, TO THE BUSINESS CASE REVIEW COMMITTEE. AND THOSE ENHANCEMENTS ARE GENERALLY BROUGHT FORWARD IN THE FORM OF BUSINESS CASE. WHAT GROWTH IMPERATIVES EXIST AND AND THAT THEY WANT TO BRING FORWARD TO THE EXECUTIVE TEAM AND AGAIN, TYPICALLY THE FORM OF A BUSINESS CASE.

SO THOSE SIX CIP CHAIRS, THEY'RE REALLY THE THE, REALLY THE VITAL COGS IN TRANSLATING THE NEEDS KNOWN AND IDENTIFIED BY STAFF ON THE

[00:25:06]

THAT IS A LOT OF BANG FOR THE BUCK OF THESE EXECUTIVES.

BECAUSE WHAT HAPPENS IS WHILE WE HAVE, AGAIN, UPWARDS OF 500 SUBPROJECTS, IF YOU LOOKED AT THE AMOUNT OF THE NUMBER OF THOSE SUBPROJECTS THAT ARE DONE THROUGH THAT DELEGATED AUTHORITY, IT'S LIKE TWO THIRDS OF THEM. THERE'S MANY, MANY BREAD AND BUTTER, SMALL FOCUSED PROJECTS THAT NEED TO GET DONE.

AND THAT IS TWO THIRDS OF THE COUNT OF PROJECTS, BUT IT'S LIKE 10% OF THE VALUE OF THE SIP.

SO IT'S A HUGE WIN FOR LIKE GETTING THINGS DONE THAT NEED TO GET DONE WITH SOME BASIS OR JUSTIFICATION FOR WHY WE INVESTED THIS MUCH IN, IN THIS AREA. SO WE WILL CALCULATE A NUMBER FOR WATER PIPES WILL BE DIFFERENT THAN THE NUMBER WE CALCULATE FOR WASTEWATER TREATMENT PLANTS AND DIFFERENT FROM THE NUMBER WE CALCULATE FOR LIFT STATIONS. AND THOSE WILL BE DOLED OUT INDIVIDUALLY. THEY'RE NOT JUST ONE BIG BUCKET RIGHT. SO THAT'LL BE A DELEGATED AUTHORITY.

WE'LL GET A LOT OF BANG FOR OUR BUCK THERE. AND THEN THOSE REQUESTS, THOSE, THOSE INVESTMENT OPPORTUNITIES ABOVE AND BEYOND THAT AUTHORITY IS WHERE OUR CIP THE BUSINESS CASE REVIEW COMMITTEE COMES IN. WE HAVE A COUPLE OF OTHER PORTFOLIOS WE CALL THEM THAT WE USE TO BE AS EFFICIENT AS POSSIBLE WITH OUR EXECUTIVE'S TIME.

WE HAVE A PORTFOLIO THAT WE REFER TO AS A SYSTEM EXTENSION AND ENHANCEMENT ALLOWANCE PORTFOLIO. IT'S A RECOGNITION THAT THERE ARE MANY OPPORTUNITIES FOR SMALL, FOCUSED EXTENSIONS TO THE SYSTEM, OR PIPE SIZE IMPROVEMENTS THAT WILL POP UP AND BE IDENTIFIED BY OUR SYSTEMS PLANNING GROUP TO, FOR EXAMPLE, WE MAY HAVE A PART OF THE PIPE NETWORK THAT HAS GROWN THROUGH DEVELOPMENT AND NOW THERE'S A GAP AND WE WANT TO HAVE RESILIENCE.

WE WANT TO HAVE LOOPING, WE WANT TO HAVE A STRONG SYSTEM DESIGN.

SO THEY MIGHT SAY, OKAY, WE SHOULD SPEND OUR MONEY TO FILL THAT GAP AND ACHIEVE THE TYPE OF SYSTEM WE WANT.

SO THERE'S AN ALLOWANCE MADE FOR THAT.

AND THEN FINALLY THERE'S ANOTHER PORTFOLIO THAT WE CALL THE PARTICIPATION PORTFOLIO.

THAT'S US WORKING IN CONCERT WITH PROJECTS LED GENERALLY BY MOBILITY, BUT ALSO OUR PARTICIPATION IN SOME PRIVATE DEVELOPMENT PIPELINES THAT MAY BE PRIVATE.

DEVELOPERS CAN INSTALL A 12 INCH PIPELINE.

WE WANT TO HAVE THEM INSTALL A 16 INCH SO THAT WE CAN GET SOME MORE BANG FOR OUR BUCK THERE. AND SO WE'LL PARTICIPATE IN BETTERMENTS OR UPSIZING THERE ONCE WE'VE CARVED OFF THESE THESE OPPORTUNITIES.

THEN THE REMAINING ABOUT QUARTER OF THE PROJECTS, BUT REPRESENTING THREE QUARTERS OR MORE OF THE FUNDING IS WHAT GOES THROUGH THIS BUSINESS CASE COMMITTEE AND REVIEWED INDIVIDUALLY.

AND THEN AT THE END OF THE DAY, AFTER THEY'VE MADE THEIR COMMENTS AND REVISIONS AND FED BACK THEIR INPUT TO THE, THE CFP CHAIRS WHO SUBMITTED THE PROPOSED PLANS, THE PLAN GETS FINALIZED AND WE ADD IT TO THE LARGER BUDGET REQUEST THAT TINA AND HER TEAM PUT TOGETHER AND, AND MARCH ALONG THROUGH THE PROCESS THAT WE'RE IN NOW. SO THERE'S A 30,000 FOOT FLYPAST, BUT HAPPY TO GO INTO ANY DETAILS AND WHATNOT.

THANK YOU FOR THAT WAS VERY COMPLEX WHEN YOU GET INTO IT.

SO YOU MENTIONED THAT THERE'S, YOU KNOW, THE IDEA OF LIKE ONGOING CAPITAL IMPROVEMENT AND THEN VERSUS LIKE NEW.

YEAH. DO YOU HAVE LIKE EXAMPLES OF LIKE, WHAT WAS THE ONGOING VERSUS LIKE A NEW CAPITAL, YOU KNOW, PROJECT B SO THAT WE CAN KIND OF UNDERSTAND THE DIFFERENTIAL.

SURE. WE JUST IN TERMS OF HOW WE TRY TO MAKE, MANAGE THAT DATA AND COMMUNICATE IT, WE TEND TO TALK IN TERMS OF WHAT HAD FUNDING IN THE FIVE YEAR WINDOW OF STUDY.

AND THERE'S A LITTLE BIT OF TIME TRAVEL THAT WE NEED TO BE PREPARED TO COMMIT TO BECAUSE WE ARE TODAY TALKING ABOUT THE PLAN THAT IS FOR FY 27 AND FORWARD THAT PLAN WE ACTUALLY FINALIZED IN JANUARY. WE BEGAN WORK ON IT IN OCTOBER.

AND WE ARE ALREADY NOW WORKING ON FY 28 THROUGH 32 PLAN.

SO I CAN DIG UP A SPECIFIC EXAMPLE, BUT I'LL JUST IN GENERAL TALK ABOUT LIKE, FOR EXAMPLE, THE WALNUT CREEK WASTEWATER TREATMENT PLANT EXPANSION, THAT PROJECT IS UNDERWAY. IT'S GOING TO MAYBE IT'S 12 YEARS OVER THE COURSE OF ITS WHOLE

[00:30:04]

IT IS REVIEWED BY BUSINESS CASE EVERY YEAR BECAUSE IT'S SUCH A BIG, SIGNIFICANT INVESTMENT.

AND IN THAT INSTANCE YOU KNOW, THEY HAVE THE THE RESPONSIBILITY TO JUDGE AFFORDABILITY VERSUS RISK FOR EVERY SINGLE LINE ITEM IN THE CIP.

YOU KNOW, THEY, I THINK RESPONSIBLY, OFTEN LOOK AT THAT PLAN AND SAY THAT PROJECT AND THEY RECOGNIZE THE NEED FOR IT IN THE OVERALL COMMUNITY'S WASTEWATER KIND OF GROWTH. AND THEY SAY, OKAY, IT LOOKS LIKE THINGS ARE CURRENT.

LOOKS LIKE WE'VE GOT, YOU KNOW, THE STATUS OF THE PROJECT UPDATED HERE. LET'S PROCEED. SO THEY SAY SO THEY CONSCIOUSLY SAY YES, KEEP GOING. A NEW ONE THAT MIGHT HAVE COME UP.

BOY, I'M TEMPTED TO LOOK AT MY LITTLE SPREADSHEET HERE AND SEE IF I CAN PULL ONE OUT. BUT ONE WAS LIKE MAYBE A, A LIFT STATION REHABILITATION PROJECT AT THE SOUTH AUSTIN REGIONAL WASTEWATER TREATMENT PLANT THAT HADN'T PREVIOUSLY BEEN SUBMITTED, BUT NOW IS SUBMITTED FOR CONSIDERATION.

AND THEN THEY WOULD HAVE JUDGED, OKAY, DO WE THINK, GIVEN THE WAY THE REST OF THE PLAN IS ADDING UP, IS THIS SOMETHING THAT WE WANT TO INCREASE THE TOTAL VALUE OF THE PLAN TO ACCOMMODATE OR SOMETHING THAT CAN BE DEFERRED, OR HOW DOES IT FIT IN AMONGST THE OTHERS? IS THAT GOT IT? NO, NO.

YEAH. OKAY. I JUST WANT TO MAKE SURE THAT I UNDERSTOOD.

SO WITH THE ONGOING, YOU KNOW, BECAUSE THIS OBVIOUSLY GIVES THIS PROCESS GIVES A CHANCE TO REVIEW ONGOING.

YOU'RE NOT GOING TO LIKE JUST GO, OH, NO, LET'S JUST STOP.

LIKE STOP. RIGHT. BUT IT GIVES OR IS THERE EXAMPLES OF THAT? OR IS IT JUST AN OPPORTUNITY TO GO? IS THIS PROCEEDING AND STILL FITTING BUDGETS OR WHATEVER? OR ARE THERE ESCALATIONS HAPPENING AS IT GOES THROUGH YEARS AND YEARS? SO AS A FACILITATOR AND NOT A VOTING MEMBER OF THAT BUSINESS CASE REVIEW COMMITTEE.

YEAH, I I'M VERY HAPPY TO SAY THAT THEY HAVE THE AUTHORITY TO KILL ANY PROJECT TO CHANGE IT, MODIFY IT, WHATEVER THEY THINK IS BEST BECAUSE THEY'RE THE ONES ULTIMATELY TASKED WITH BALANCING AFFORDABILITY AND RISK.

NOW THEY HAVE EVERY YEAR THAT WE, WE UPDATE AND THEY SIGN A BUSINESS CRC STATEMENT OF PURPOSE WHERE THEY KIND OF STATE SOME OF THEIR VALUES AND THEY EXPLICITLY STATE, WE WANT TO ENCOURAGE STABILITY IN THE PLAN.

WE WANT TO YOU KNOW WHAT THEIR MOTTO IS TO PLAN THE WORK, WORK THE PLAN. A LOT OF THINGS ARE KIND OF TALKING TO BOTH THEMSELVES.

THEY'RE TALKING TO THE CIP CHAIRS AND THE STAFF.

SO IN PRACTICE, THEY DON'T PULL THE RUG OUT FROM PROJECTS THAT ARE IMPORTANT.

BUT INASMUCH AS THERE WAS A CLEAR NEED FOR THAT TO HAPPEN THERE, THAT IS VERY MUCH WITHIN THEIR PREROGATIVE.

I WOULD ADD THAT, YOU KNOW, THERE ARE POINTS WITHIN A PROJECT LIFE WHERE WHERE WE CAN MAKE DECISIONS AND MAYBE NOT NECESSARILY TO KILL IT, BUT BUT TO DELAY IT. AND WE HAVE HAD PROJECTS THAT, YOU KNOW, WE'VE, WE'VE DONE DESIGN AND HAVE PLANS.

AND, YOU KNOW, MAYBE INITIALLY WE'RE PLANNED TO HAPPEN A LITTLE BIT QUICKER.

AND SO THERE ARE PROJECTS AND WHERE, WHERE WE'VE MADE SOME DECISIONS BECAUSE OF THE SHAPE OF, OF OUR SPEND.

AND SO YOU KNOW MARTIN FACILITATES THE PROJECT OR THE PROCESS TO DEVELOP THE OVERALL PLAN. AND ONCE THE PROJECTS ARE IDENTIFIED, YOU KNOW, FINDING FINANCE GETS IN AND LOOKS AT THE SHAPE OF THE SPIN.

IN OTHER WORDS, YOU KNOW, IS IT A BELL CURVE? IS IT, IS IT RELATIVELY FLAT? AND IF THE SHAPE OF THE SPEND PRODUCES SIGNIFICANT FINANCIAL CHALLENGES TO, TO, TO MEET EITHER FROM A DEBT SERVICE PERSPECTIVE OR FROM A CASH FINANCING PERSPECTIVE. WE THEN WORK TO, TO, YOU KNOW, LOOK FOR WAYS TO MAYBE MODIFY THE SHAPE OF THE SPEND TO REDUCE THE FINANCIAL IMPACT TO REDUCE THE AFFORDABILITY IMPACT. AND SO IN THAT WAY YOU KNOW, WE, YOU KNOW, BECAUSE THE PROJECTS, YOU KNOW, AND PART OF THE REVIEW PROCESS ENSURES THAT, YOU KNOW, THE PROJECTS ARE CRITICAL PROJECTS FOR US TO DO. SO IT ISN'T AS MUCH, YOU KNOW, PARTICULARLY IF THERE'S A PROJECT THAT'S, YOU KNOW, IN CONSTRUCTION OR, YOU KNOW, GOING, WE, WE GENERALLY WOULDN'T STOP THAT.

BUT, BUT UNTIL WE GET TO CONSTRUCTION, THERE IS ALWAYS THE LIKELIHOOD AND THERE HAVE BEEN INSTANCES WHERE, WHERE WE'VE PUSHED OFF A PROJECT A YEAR OR TWO OR SO TO, TO MANAGE OUR OVERALL SPEND.

I'D ALSO ADD THAT WE HAVE AN INTERNAL PROCESS THAT WORKS IN CONCERT WITH THIS PLAN DEVELOPMENT PROCESS. SO IN THE PLAN DEVELOPMENT PROCESS,

[00:35:01]

THEN THERE IS EXECUTION OF THAT PLAN, WHICH HAPPENS BY DOZENS OF STAFF AS EACH PROJECT GETS TO ITS CERTAIN LEVEL OF PROGRESSION.

RIGHT? IT HITS DIFFERENT MILESTONES.

THIS PROCESS THAT OUR TEAM ALSO OVERSEES IS THE PROCESS BY WHICH AT DIFFERENT MILESTONES.

SO WHEN BASICALLY A MAJOR PHASE ENDS AND A PRELIMINARY DESIGN AND DETAILED DESIGN AND GOING INTO CONSTRUCTION, THERE IS THE NEED TO REQUEST THE APPROPRIATION. SO YES, WE'RE TALKING ABOUT BUDGET NOW.

AND THEN THERE'S ANOTHER LAYER WHICH IS ACTUALLY GETTING THE APPROPRIATION NEEDED TO EXECUTE CONTRACTS. THAT APPROPRIATION PROCESS IS ANOTHER CONTROL POINT FOR OUR EXECUTIVES AND OUR DIRECTOR IN PARTICULAR, BUT AS WELL AS INTERMEDIATE KIND OF MANAGEMENT TO STOP AND SAY, DO WE GO FORWARD? IS THIS CONTINUE TO BE A PRIORITY? AND AND YET EVERY SINGLE PROJECT AT AT THOSE MILESTONES GOES BEFORE OUR DIRECTOR AND SAYS, OKAY, SO YES, WE THOUGHT THIS WAS A GOOD IDEA.

IT WAS IN THE BUDGET. WE'VE MOVED FORWARD TO THIS POINT.

DO WE CONTINUE? IT'S A GO NO GO DECISION.

YEAH, AND I'LL ADD TO THAT TOO.

SO WHEN WE ASKED FOR APPROPRIATION, WE DO THAT ON AN ANNUAL BASIS.

AND SO WE ACTUALLY USE WHAT WE CALL PARENT ACCOUNTS THAT HOLDS ALL THE APPROPRIATIONS BY EACH FUND. AND THE PROCESS THAT MARTIN'S TALKING ABOUT, THAT PROCESS IN WHICH THEY REQUEST THAT APPROPRIATION, THEY'RE REALLY JUST REQUESTING IT FOR US TO MOVE FROM OUR PARENT ACCOUNT TO THAT ACTUAL PROJECT. AND THAT'S HOW THAT WORKS, SO THAT WE CAN CONTROL AS WELL, YOU KNOW, WHERE SOMEONE HAS BUDGET AND THEY'RE NOT USING IT AND MOVING FORWARD AND MAKING, YOU KNOW, NOT KIND OF DEADLOCKING US WHEN IT COMES TO APPROPRIATION.

AND FROM MY KNOWLEDGE, WE'RE THE ONLY ONES IN THE CITY THAT ACTUALLY DO THAT AND MANAGE IN THAT MANNER.

THANK YOU. YEAH. THAT WAS ALL REALLY INSIGHTFUL.

SO THANK YOU FOR ALL OF THAT.

QUESTION ON LIKE WHO SITS ON THE BUSINESS CASE REVIEW COMMITTEE AND YOUR CIP CHAIRS.

IS THERE A CYCLE LIKE HOW OFTEN DO THOSE ROTATE? AND HOW DO YOU MAKE SURE THAT ALL OF THE DIFFERENT DEPARTMENTS WITHIN AUSTIN WATER ARE ACCURATELY REPRESENTED ON THOSE COMMITTEES? YEAH. IN SHORT, OUR DIRECTOR APPOINTS THOSE INDIVIDUALS THAT SIT ON THAT COMMITTEE.

BUT IN PRACTICE, IN FACT, IT HAS BEEN FOUR INDIVIDUALS HAVE BEEN ON THE COMMITTEE. THEY OPERATE BY CONSENSUS.

IT'S NOT LIKE A VOTING THING. AND THEY HAVE REPRESENTED THOSE PROGRAM AREAS THAT ARE KIND OF THE MOST INFRASTRUCTURE INTENSIVE.

SO IT'S BEEN THE HEAD OF OPERATIONS, THE HEAD OF ENGINEERING, THE HEAD OF ESSENTIALLY PLANNING.

I CAN NAME NAMES KEVIN CRITTENDEN, AYMAN BINYAMIN AND SORRY, RANDY JENKINS NOW. AND CHARLES LAUREL.

SORRY. KEVIN CRITTENDEN, AS YOU KNOW, JUST RETIRED.

SO THERE'S A VACANCY. BUT BUT YES, THE COMMITTEE AS OF A WEEK AGO WAS THOSE FOUR PEOPLE. AND I WILL ADD, THIS PAST YEAR, WE DID ADD JOSEPH GONZALEZ OVERALL TO, TO LOOK AT AS HE MENTIONED, YOU KNOW, WHETHER IT'S A BELL CURVE SHAPE AND HOW TO GUIDE THE CRC IN HOW TO MAKE SURE THAT WE TRY TO LEVEL LIES THAT PLAN AS WELL.

YEAH, I MIGHT EVEN ADD AGAIN, THAT COMMITTEE IN THEIR DELIBERATIONS, THEY START AND END WITH A CONSULTATION WITH FINANCE.

SO THE AFFORDABILITY BRIEFING THAT THAT HAPPENS.

AND THEN ONCE THE PLAN HAS BEEN DEVELOPED, CONSULTING WITH JOSEPH.

WELL, AND THE GOAL, YOU KNOW, BECAUSE THERE HAVE BEEN TIMES, YOU KNOW, PARTICULARLY AS WE WENT THROUGH, YOU KNOW, OUR DROUGHT OF RECORD FROM FROM 2008 TO 2015 THERE WERE TIMES WELL, DURING THAT TIME FRAME WHERE YOU KNOW, WE WERE REALLY STRUGGLING FROM A REVENUE PERSPECTIVE. YOU KNOW, WE HAD 40 AND $50 MILLION REVENUE SHORTFALLS AS, AS THE DROUGHT PERSISTED AND, YOU KNOW, DEMAND KEPT DROPPING.

AND I THINK I'VE SAID THIS BEFORE, BUT, YOU KNOW, WHEN WE STARTED THE DROUGHT OUR AVERAGE RESIDENTIAL CONSUMPTION WAS ALMOST 9000 GALLONS PER MONTH.

AND AS THE DROUGHT PERSISTED, IT DROPPED TO BELOW 6000 GALLONS PER MONTH AND HAS PRETTY MUCH STAYED LEVEL SINCE THEN.

BUT THAT DROP, THAT SUSTAINED DROP RESULTED IN SIGNIFICANT REVENUE SHORTFALLS WHERE WE JUST, YOU KNOW, FINANCE SET A CAP.

AND AT THE END OF THE DAY, FINANCE YOU KNOW THE WAY WE VIEW OUR ROLE NOW

[00:40:05]

NOW WE PROVIDE A BRIEFING UP FRONT AND WE REVIEW AT THE END TO MAKE SURE THAT IT'S SOMETHING THAT WE FEEL LIKE WE CAN DO.

BUT, YOU KNOW, I VIEW IT KIND OF AS MORE OF A CHALLENGE.

HOW DO WE DO ALL THE THINGS THAT WE THINK WE NEED TO DO? AND OUR PLAN, AS MARTIN SAID, IS, IS VERY RISK BASED, YOU KNOW, NEW PROJECTS ARE EVALUATED ON, ON YOU KNOW, THE RISK OF NOT DOING THOSE PROJECTS.

RENEWAL PROJECTS ARE PRIORITIZED BASED ON, ON, ON RISK AND ASSET CONDITION.

SO WHEN, WHEN THEY RECOMMEND A PLAN, THE LAST THING THAT WE WANT TO DO FROM A FINANCIAL PERSPECTIVE IS SAY, SORRY, WE CAN'T DO ALL, ALL THOSE THINGS. AND SO WE VIEW OUR ROLE AS A CHALLENGE TO FIGURE OUT HOW DO WE HOW DO WE MAKE IT HAPPEN? HOW DO WE DO IT? AND PART OF THAT IS THE SHAPING OF THE SPEND CURVE.

BUT YOU KNOW, WE, AND SO IT'S VERY INTENTIONAL THAT THAT FINANCE DOESN'T HAVE A SEAT ON THE BC ARC. BECAUSE WE WANT THE FOLKS THAT MANAGE OPERATIONS AND ENGINEERING AND PLANNING TO TO EVALUATE PROJECTS BASED ON A RISK BASED APPROACH AND, AND RECOMMEND THE PLAN.

AND THEN WE, AND THEN WE KIND OF GET IN AND SEE, YOU KNOW CAN WE MAKE IT HAPPEN? AND THAT'S A BIG PART OF THE REASON TO HAVE THAT, THAT INITIAL KICKOFF KIND OF SETS A.

GUARDRAILS, IF YOU WILL, OF WHAT WE THINK WE CAN DO.

AND AND THEN THE BCCDC TRIES TO WORK WITHIN THOSE PARAMETERS.

THANK YOU. MARTIN. AS AN ASSET MANAGEMENT PERSON, I'M VERY CURIOUS HOW OFTEN YOU'RE SAYING YOU RATE THE CRITICALITY AND ALL THAT STUFF ON PROJECT BASIS. DO YOU ALSO GO INTO IT AND DO IT ON AN ASSET BASIS OR IN A FACILITY BASIS? DO YOU JUST KIND OF LIKE START FROM THE BOTTOM AND BUILD UP? YES, ACTUALLY. SO THAT'S, THAT IS WHERE WE START.

SO WE HAVE LIKE TEN 000 SOME ASSETS AT OUR PLANTS AND PUMP STATIONS AND LIFT STATIONS.

WE HAVE KIND OF HUNDREDS OF THOUSANDS OF PIPE SEGMENTS.

AND WE GO TO THOSE ENTERPRISE DATABASES AS A RECORD AND DO EXACTLY THAT.

SO WE'LL, WE'LL TOT UP FOR EVERY ONE OF OUR ASSETS THAT IT'S IN VERY POOR CONDITION.

WE WILL IDENTIFY THE REPLACEMENT VALUE OF ALL THOSE ASSETS.

AND IF THERE'S RENEWAL POSSIBLE REHABILITATION POSSIBILITIES, WE'RE MAKING A MODIFICATION FOR THAT. AND AND WE DO IT FROM AN ASSET BASIS.

YEAH. THANK YOU. YEAH.

YOU'RE WELCOME. IT'S A GREAT WAY TO JUSTIFY YOUR $5 BILLION, YOU KNOW, INVESTMENT IN UNDERSTANDING FOR FOLKS TO UNDERSTAND WHERE THAT ALL COMES FROM. YOU KNOW, IT'S NOT JUST WRITING IT IN A LINE ITEM.

THERE'S A LOT THAT GOES INTO IT. YEAH.

SO WHEN I THINK I JOINED HERE ABOUT 12, 13 YEARS AGO.

WE ONLY WENT TO THIS ZERO BASED CIP ABOUT SEVEN, EIGHT YEARS AGO BECAUSE IT WAS AROUND THEN THAT OUR ASSET MANAGEMENT SYSTEMS HAD GOTTEN TO A PLACE WHERE THEY COULD SUPPORT THIS. THANK YOU.

THANK YOU. MARTIN, TINA, AND JOSEPH, FOR THE VERY COMPREHENSIVE OVERVIEW, I WANT TO TAKE US.

I THINK JUST WRAPPING THIS UP TO MAYBE THE HIGHEST LEVEL POSSIBLE.

SO THINKING, JUST RECAPPING WHERE WE'RE AT BASED OFF OF WHAT YOU EXPLAINED, THINKING OF HOW THE CIP IS PUT TOGETHER. WE HAVE SORT OF LIKE THIS NOW AND NEXT APPROACH.

SO WE CAN LOOK AT THE SIX FUNCTIONAL DIVISIONS THROUGH OUR CIP CHAIRS, YOU KNOW, WHO'S MANAGING THE ASSETS AND THE EQUIPMENT AND ASSESS WHAT IS HIGHEST RISK TO REPLACE. NOW WE CAN THINK OF IN THE FIVE YEAR STUDY WINDOW. WHAT DO WE NEED TO PREPARE FOR IN TERMS OF IMPROVEMENTS OR NEW BUILD.

I'M THINKING OF OUR SORT OF MORE ASPIRATIONAL STRATEGIES LIKE TIED TO WATER FORWARD.

AND SO WHEN WE'RE LOOKING AT THIS FIVE YEAR STUDY WINDOW, HOW DO WE SORT OF SQUARE AND ALIGN WHAT WE KNOW MIGHT BE COMING UP IN THIS FORECAST FOR THE CIP AND SORT OF TAKE FIVE YEARS OUT OF THAT CHUNK OF 100 AND THINK ABOUT, OKAY, WHAT DO WE NEED TO BE DOING OR INVESTING IN TO MEET OUR SUPPLY CONSERVATION AND REUSE GOALS? WOULD LOVE SOME DISCUSSION JUST A LITTLE BIT MORE ABOUT HOW WE'RE TRANSLATING THAT MORE ASPIRATIONAL STRATEGY INTO NUMBERS ON A SPREADSHEET? YEAH, DEFINITELY. SO A COUPLE WAYS TO ANSWER THAT.

THE MOST DIRECT WAY IN THE CONTEXT THAT I'VE ALREADY SET UP IS THAT THE SIP CHAIR, THE RELEVANT SIP CHAIR.

AND THAT ONE WOULD BE TERESA LUTZ WOULD INCLUDE IN HER PROPOSAL FOR THE NEXT SIP

[00:45:04]

SO SPECIFICALLY, YOU KNOW, OVER THE YEARS, THERE'S BEEN MAYBE IT'S A PROJECT TO HIRE A CONSULTANT TO HELP DEVELOP THE WATER FORWARD PLAN, OR MAYBE IT'S A ESSER, RIGHT? THE HUGE INVESTMENTS ASSOCIATED WITH ASR OR ANY INDIRECT POTABLE REUSE.

THESE ARE INDIVIDUAL LINE ITEMS IN OUR SIP TODAY.

AND THEY WOULD HAVE GOTTEN THERE THROUGH BUSINESS CASES SUBMITTED TO THIS BUSINESS CASE REVIEW COMMITTEE OF OUR EXECUTIVE TEAM. SO THAT'S THE KIND OF THE QUICKEST ANSWERS.

THE RELEVANT CFP CHAIR, THERESA LUTZ.

SHE SUBMITS BUSINESS CASES TO THE BCDC AND THEN THEIR KNOWLEDGE OF THE ORGANIZATIONS, YOU KNOW, WATER FORWARD PLANS INFORMS THEIR DETERMINATION TO.

YES, LET'S FUND THIS PROJECT.

AND PLEASE, JOSEPH, FIND US THE MONEY.

YOU KNOW, SOMETHING TO THAT EFFECT. AND CAN YOU JUST RESTATE THERESA LUTZ'S SIP SORT OF TAXONOMY AREA? SURE. SO SHE IS OUR HEAD OF SYSTEMS PLANNING.

SHE'S OUR CURRENTLY ACTUALLY OUR INTERIM ASSISTANT DIRECTOR FOR ENVIRONMENTAL PLANNING AND DEVELOPMENT SERVICES.

BUT SHE IS. IN CHARGE OF A PORTFOLIO WE CALL THE SYSTEM EXTENSION AND ENHANCEMENT PORTFOLIO.

SHE, HER AND HER TEAM DO THE HYDRAULIC MODELING FOR BOTH WATER AND WASTEWATER RECLAIMED WATER. THEY KIND OF OWN THE FUTURE VISION FOR THE UTILITY, LIKE THE FUTURE FOR THE INFRASTRUCTURE.

SO WHILE MOST OF US ARE THINKING IN THE MAYBE THIS YEAR OR FIVE YEARS TIME PERIOD, HER TEAM IS THINKING, YOU KNOW, 2100 YEARS AT WATER FORWARD.

SO, TERESA, HAVING THAT PERSPECTIVE IS WELL SUITED TO IDENTIFY THE PROJECTS NEEDED TO ADVANCE THAT. AND SHE HAS TWO MECHANISMS TO DO THAT.

SHE CAN SUBMIT BUSINESS CASES DIRECTLY TO THE BCDC AS A CHAIR FOR BIG THINGS LIKE WATER OR SORRY, INDIRECT POTABLE REUSE, FOR EXAMPLE.

SHE ALSO HAS DELEGATED DEVOLVED AUTHORITY TO HER.

SO THE BCDC HAS SEEN FIT TO DEVOLVE $25 MILLION TO HER FOR IMPROVEMENTS TO THE WATER NETWORK, $25 MILLION FOR IMPROVEMENTS TO THE WASTEWATER NETWORK, AND $5 MILLION FOR IMPROVEMENTS TO THE RECLAIMED WATER NETWORK OVER THAT FIVE YEAR PERIOD. SO THOSE ARE WAYS IN WHICH SHE'S GIVEN LEVERS TO TRY AND ADVANCE THINGS LIKE WATER FORWARD. THANK YOU.

THAT'S HELPFUL. ANY OTHER QUESTIONS? AWESOME. THANK YOU GUYS FOR ALL OF THAT.

EXTREMELY HELPFUL. I THINK THE FULL COMMISSION IS GOING TO REALLY ENJOY OR, YOU KNOW, JUST UNDERSTANDING A LITTLE MORE ABOUT WHAT YOU HAVE TO SAY.

ALL RIGHT. WITH THAT FULL COMMISSION, IS IT BECAUSE SOMETIMES, YOU KNOW, BECAUSE YOU WERE TALKING, THERE'S HIERARCHIES AND STUFF LIKE THAT. IS THERE GOING TO BE ANY SORT OF VISUALS? YEAH. PRESENTATION FOR THE GENERAL COMMISSION MEETING.

I'M JUST SAYING BECAUSE, YOU KNOW, YOU'RE TRYING TO FOLLOW THROUGH EVERYTHING, YOU KNOW, JUST KIND OF THINKING, YOU KNOW, VISUALS WOULD MAYBE. YEAH.

AGAIN, I TRY TO FIGURE OUT THE RIGHT LEVEL OF DETAIL TO GET INTO.

SO MY UNDERSTANDING IS THAT I THINK THERE'S AN INTEREST IN MY PRESENTING A PRESENTATION ABOUT 7 OR 8 SLIDES, WHICH IS ONE THAT WE PRESENTED TO SEAWEB MAYBE IN OCTOBER OR NOVEMBER, AND WE PRESENTED TO THIS COMMISSION IN JANUARY.

SO I WAS GOING TO BRING THOSE UP AGAIN. AND THEN, OF COURSE, FOLLOW THE QUESTIONS WHEREVER IT GOES. THANK YOU.

ALL RIGHT. SO WE HAD TO WITHDRAW ITEM NUMBER FOUR FROM THE AGENDA DUE TO INSUFFICIENT ITEM DESCRIPTION. SO WE'LL BE WITHDRAWING THAT ITEM NOW.

SO THAT CONCLUDES OUR DISCUSSION.

ITEMS ON THAT HAVE BEEN LISTED ON THIS AGENDA OFFICIALLY.

[FUTURE AGENDA ITEMS ]

IF YOU HAVE ANY OTHER FUTURE AGENDA ITEMS THAT WE CAN ADD TO THAT MEETING ON THE 29TH WOULD BE. THERE'S SOME HEAD SHAKING SAYING NO.

SO WE WILL NOT BE ADDING ANY FUTURE AGENDA ITEMS. AGAIN, I JUST WANT TO SAY THANK YOU FOR ALL OF THE INSANE AMOUNTS OF WORK THAT YOU GUYS PUT INTO THIS AND THE PEOPLE THAT AREN'T HERE AS WELL.

IT'S A HUGE TEAM EFFORT AND WE APPRECIATE YOU GUYS DIVING IN AND KIND OF WALKING US THROUGH

[00:50:05]

AND JUST THAT IT'S ALL IN AN EFFORT TO SERVE CUSTOMERS AND TO DO RIGHT BY ALL OF AUSTIN.

SO THANK YOU ALL VERY MUCH.

AND WITH THAT, I WILL ADJOURN THE MEETING AT 356.

* This transcript was compiled from uncorrected Closed Captioning.