1 00:00:00,850 --> 00:00:08,410 Also an audio communication between board members participating by video conference establishing a quorum. 2 00:00:08,870 --> 00:00:17,810 The public may attend the meeting in person. Audio and video of board members participating by video conference will be visible. 3 00:00:18,570 --> 00:00:24,890 So members of the public wishing to listen to live audio from the meeting may do so by calling in. 4 00:00:25,150 --> 00:00:30,330 Committee members, please remember your video must be on to be considered present. 5 00:00:30,810 --> 00:00:35,030 And I'll now call the roll and confirm committee members attendance. 6 00:00:35,910 --> 00:00:37,090 Terry Sam Anderson. 7 00:00:37,770 --> 00:00:37,910 Here. 8 00:00:38,510 --> 00:00:39,110 Thank you, sir. 9 00:00:39,850 --> 00:00:40,510 I'm here. 10 00:00:41,150 --> 00:00:41,770 Jack May. 11 00:00:42,310 --> 00:00:42,590 Here. 12 00:00:43,210 --> 00:00:43,830 Thank you, Jack. 13 00:00:44,390 --> 00:00:45,130 Don Paskell. 14 00:00:46,570 --> 00:00:47,130 Here. 15 00:00:47,910 --> 00:00:48,590 Thank you, Don. 16 00:00:49,170 --> 00:00:49,930 Randy Rowland. 17 00:00:50,510 --> 00:00:50,750 Here. 18 00:00:51,590 --> 00:00:52,210 Thank you, Randy. 19 00:00:52,790 --> 00:00:53,730 Jody Sutherland. 20 00:00:54,410 --> 00:00:54,690 Present. 21 00:00:55,350 --> 00:00:56,090 Thank you, sir. 22 00:00:56,630 --> 00:00:57,930 And Steven Terrell. 23 00:00:58,550 --> 00:00:58,790 Here. 24 00:00:59,610 --> 00:01:00,370 Thank you, Steven. 25 00:01:01,070 --> 00:01:03,590 Now is our time for public comments. 26 00:01:04,150 --> 00:01:06,810 Do we have any members of the public wishing to speak? 27 00:01:07,190 --> 00:01:08,930 We have no request for public comment. 28 00:01:09,250 --> 00:01:09,650 Okay. 29 00:01:09,910 --> 00:01:12,870 With that, we'll move on to our opening remarks. 30 00:01:12,870 --> 00:01:21,450 And I would just begin by thanking Director Pascal for agreeing to be the vice chair of this committee. 31 00:01:22,250 --> 00:01:26,130 So David, at this point, we'll turn it over to you for any opening comments that you have. 32 00:01:34,870 --> 00:01:35,350 Okay. 33 00:01:35,990 --> 00:01:36,470 Yeah. 34 00:01:37,470 --> 00:01:39,090 Okay, so can you hear me now? 35 00:01:40,530 --> 00:01:40,650 Yes. 36 00:01:41,810 --> 00:01:41,990 Okay. 37 00:01:42,170 --> 00:01:44,030 Here you are not able to see. 38 00:01:44,290 --> 00:01:45,150 You're not able to see. 39 00:01:46,390 --> 00:01:48,350 You'll have two audio connections in the room, I believe. 40 00:01:48,350 --> 00:01:48,510 Dave? 41 00:01:49,170 --> 00:01:50,330 Yeah, I apologize. 42 00:01:50,610 --> 00:01:51,370 Give us one second. 43 00:01:51,630 --> 00:01:52,470 Give us one second. 44 00:01:52,770 --> 00:01:53,050 Okay. 45 00:02:00,350 --> 00:02:00,830 Okay. 46 00:02:01,190 --> 00:02:01,470 Okay. 47 00:02:01,730 --> 00:02:02,150 Hopefully. 48 00:02:02,630 --> 00:02:04,130 Hopefully we can turn that speaker off for a minute. 49 00:02:08,270 --> 00:02:09,150 Go to speaker. 50 00:02:09,490 --> 00:02:09,910 Go to speaker. 51 00:02:10,310 --> 00:02:10,490 Go to speaker. 52 00:02:10,490 --> 00:02:10,550 Go to speaker. 53 00:02:16,060 --> 00:02:17,420 We can't hear you now, David. 54 00:02:23,800 --> 00:02:24,120 Okay. 55 00:02:24,540 --> 00:02:26,180 Can you guys hear me okay now? 56 00:02:26,380 --> 00:02:26,900 There we go. 57 00:02:27,320 --> 00:02:28,160 That's much better. 58 00:02:28,620 --> 00:02:29,200 All right. 59 00:02:29,300 --> 00:02:34,140 I apologize for our technical difficulties here as we were working to get set up. 60 00:02:34,140 --> 00:02:38,040 Thank you very much Director Kelly and good afternoon. 61 00:02:38,240 --> 00:02:39,560 Thank you all for joining us today. 62 00:02:40,060 --> 00:02:44,800 If I can take just a moment of personal privilege, I'd like to say welcome to Chairman Kelly and 63 00:02:44,800 --> 00:02:45,740 Vice Chair Paschal. 64 00:02:45,820 --> 00:02:48,760 I'm looking forward to working with you on the committee. 65 00:02:49,020 --> 00:02:53,320 This is the first time in the six plus years that I've been at the district that this 66 00:02:53,320 --> 00:02:57,680 committee hasn't been chaired by Director Fuller and I'm glad he's here today to 67 00:02:57,680 --> 00:03:02,140 join us and I just want to thank him again for his service and say what a joy and 68 00:03:02,140 --> 00:03:04,700 honor it has been to work with him for so long. 69 00:03:05,680 --> 00:03:09,720 So with that, I just want to start off with a broad understanding of where we stand with 70 00:03:09,720 --> 00:03:11,160 the legislature in Austin. 71 00:03:12,120 --> 00:03:16,760 As you have likely heard in the news, more than 50 House Democrats have left the state 72 00:03:16,760 --> 00:03:22,380 to prevent a quorum of the House from considering legislation regarding congressional redistricting. 73 00:03:23,060 --> 00:03:27,380 While this is a very fluid situation, it appears that they will remain out of the 74 00:03:27,380 --> 00:03:28,480 state through this week. 75 00:03:28,480 --> 00:03:45,040 The expectation currently is that on Friday the House will convene again and the Legislature will adjourn without Democrats present and that the Governor will immediately call a second special session that will begin next week. 76 00:03:45,620 --> 00:03:52,060 The expectation is that the Democrats will return and that congressional redistricting will pass in the second special session. 77 00:03:53,340 --> 00:03:57,280 Meanwhile, there has been significant work done in both the House and the Senate in response 78 00:03:57,280 --> 00:03:59,360 to the July 4th flooding in the Hill Country. 79 00:03:59,820 --> 00:04:04,100 Several very extensive hearings have been held by a joint special committee and bills have 80 00:04:04,100 --> 00:04:09,280 advanced through the Senate that appropriate funding for recovery from that disaster as 81 00:04:09,280 --> 00:04:13,940 well as significantly strengthen the way the state, county officials and volunteer 82 00:04:13,940 --> 00:04:16,600 organizations prepare and respond. 83 00:04:17,280 --> 00:04:21,200 We expect that this legislation will pass in the second special session in very 84 00:04:21,200 --> 00:04:25,120 similar form to what we have seen moved through the Senate and House committees already. 85 00:04:26,100 --> 00:04:31,720 In the House, Natural Resources Committee Chairman Cody Harris has introduced four bills 86 00:04:31,720 --> 00:04:36,740 regarding groundwater management in response to applications for groundwater well drilling 87 00:04:36,740 --> 00:04:41,500 permits in Cherokee and Anderson counties, which are in Chairman Harris's district. 88 00:04:42,360 --> 00:04:47,860 On July 15th, the committee held a 14-hour-long hearing on these permit applications. 89 00:04:48,520 --> 00:04:54,640 These bills are not covered by the governor's special session call, and so they will not advance at this time. 90 00:04:55,640 --> 00:05:01,940 It is possible that these bills could be a part of the second special session call, but that is not currently anticipated. 91 00:05:02,480 --> 00:05:11,120 We do believe that there will be an extensive interim study done by the committee on this issue and that these bills will return in the next regular session. 92 00:05:12,680 --> 00:05:15,720 Finally, just a brief look at what is going on at the federal level. 93 00:05:15,720 --> 00:05:20,420 Congress is currently in its August district work period and will return to 94 00:05:20,420 --> 00:05:25,520 session on September 2nd. The federal water policy landscape remains active 95 00:05:25,520 --> 00:05:30,360 as reauthorization efforts continue for major programs like the clean water and 96 00:05:30,360 --> 00:05:34,220 drinking water state revolving funds and the Water Infrastructure Finance 97 00:05:34,220 --> 00:05:38,760 and Innovation Act. The Trump administration's budget proposed a 90 98 00:05:38,760 --> 00:05:44,120 percent cut to the state revolving funds of roughly 2.46 billion dollars 99 00:05:44,120 --> 00:05:52,740 reducing their combined funding from the 2025 level of approximately 2.76 billion down to just 305 million. 100 00:05:53,540 --> 00:05:59,300 It appears unlikely that Congress will agree with this cut and will likely restore the vast majority of this funding. 101 00:06:00,080 --> 00:06:13,480 Additionally, the EPA has rolled back enforceable limits on several PFOS compounds 102 00:06:13,480 --> 00:06:19,260 The administration has also revised chemical risk assessments to preempt state-level PFOS 103 00:06:19,260 --> 00:06:26,040 bans in consumer products proposing to evaluate chemical risks by each use rather than holistically. 104 00:06:27,040 --> 00:06:31,480 Finally also in the federal space, we are looking forward to hosting Congresswoman 105 00:06:31,480 --> 00:06:36,740 Julie Johnson for a tour and meeting with Jenna and others on September 5th. 106 00:06:36,780 --> 00:06:41,800 Congresswoman Johnson replaced Colin Allred in Congress and she represents portions 107 00:06:41,800 --> 00:06:45,760 of Mesquite, Garland, and Richardson in our service area. 108 00:06:46,360 --> 00:06:50,500 So with that, Chairman Kelly, that is all I have for opening comments. 109 00:06:51,200 --> 00:06:55,480 Okay. Thank you, David. And just for the record, we do have a quorum. 110 00:06:56,240 --> 00:06:59,020 And at this time, Jenna, any comments you'd like to add? 111 00:06:59,500 --> 00:07:02,000 I think David covered it very well. I have nothing to add. Thank you. 112 00:07:02,160 --> 00:07:05,320 Okay. Thank you. We're going to move on to our action items. 113 00:07:05,320 --> 00:07:16,160 We have one action item here today, and that's considering the approval of our legislative committee meeting minutes from the meeting on December 4th, 2024. 114 00:07:17,060 --> 00:07:18,120 So do I have a motion? 115 00:07:22,860 --> 00:07:23,120 This other one. 116 00:07:23,780 --> 00:07:24,720 Thank you. 117 00:07:24,720 --> 00:07:25,400 Roland would second. 118 00:07:26,220 --> 00:07:27,040 And second? 119 00:07:28,120 --> 00:07:28,460 Roland. 120 00:07:28,720 --> 00:07:29,720 Roland, thank you. 121 00:07:30,420 --> 00:07:32,460 Any discussion before we vote? 122 00:07:33,420 --> 00:07:34,200 No discussion. 123 00:07:34,420 --> 00:07:36,480 All those in favor, please say aye. 124 00:07:36,980 --> 00:07:37,340 Aye. 125 00:07:37,340 --> 00:07:46,200 And all opposed say nay that motion passes. We're going to move on to our discussion items. 126 00:07:46,440 --> 00:07:53,780 We have four discussion items here today. We're going to begin with the 89th Texas Legislative 127 00:07:53,780 --> 00:07:59,120 Regular and Special Sessions Review. And David Kelly will present. David? 128 00:07:59,120 --> 00:07:59,220 David. 129 00:08:00,080 --> 00:08:00,640 Okay. 130 00:08:00,780 --> 00:08:01,400 Thank you, Chairman. 131 00:08:02,260 --> 00:08:09,800 I'll say up front that I am joined here today in our Austin Legislative Consultants Office. 132 00:08:10,240 --> 00:08:16,340 I have with me Shae Pearson and Eddie Solis, who are part of our team from Hillco and 133 00:08:16,340 --> 00:08:17,800 I'm grateful to have them. 134 00:08:19,500 --> 00:08:24,960 I'd like to begin by refreshing your understanding of what the legislature did in the 88th 135 00:08:24,960 --> 00:08:31,000 session on water infrastructure funding and the Texas Water Fund to set the stage for 136 00:08:31,000 --> 00:08:32,520 the changes that occurred this session. 137 00:08:33,160 --> 00:08:40,200 In 2023, the legislature created two new funds, the Texas Water Fund and the New Water 138 00:08:40,200 --> 00:08:45,920 Supply for Texas Fund and provided $1 billion to start these funds in a constitutional amendment 139 00:08:45,920 --> 00:08:49,280 that was approved by voters with over 77 percent support. 140 00:08:49,280 --> 00:08:54,860 That funding was split 75-25 between the Texas Water Fund and the New Water 141 00:08:54,860 --> 00:09:00,040 Supply Fund. The TWF is a broad umbrella fund that provides the board with 142 00:09:00,040 --> 00:09:05,020 significant flexibility to allocate funding for the majority of the programs 143 00:09:05,020 --> 00:09:09,780 administered by the board including the New Water Supply Fund, which you can 144 00:09:09,780 --> 00:09:14,740 see in this graphic. The programs in the blue boxes were included in the 145 00:09:14,740 --> 00:09:18,520 original TWF and the orange boxes were added to the fund by the 146 00:09:18,520 --> 00:09:24,280 legislature this session. Most significant on this list is the addition of the Flood Infrastructure 147 00:09:24,280 --> 00:09:30,040 Fund, which will require significant funding, particularly following the floods last month 148 00:09:30,040 --> 00:09:32,860 in the Hill Country. Next slide. 149 00:09:36,040 --> 00:09:38,400 With that foundation, we'll begin with the major water 150 00:09:38,400 --> 00:09:43,880 funding legislation that was passed this year. House Joint Resolution 7 is a constitutional 151 00:09:43,880 --> 00:09:49,760 amendment that provides dedicated revenue of $1 billion annually for 20 years beginning 152 00:09:49,760 --> 00:09:57,580 in 2027 coming from the existing state sales and use tax. This begins after the first 46.5 153 00:09:57,580 --> 00:10:03,360 billion is received from the tax. There's no split of those funds in the constitutional amendment, 154 00:10:03,640 --> 00:10:10,320 but Senate Bill 7 directs 50% of the funding to the New Water Supply for Texas Fund or the 155 00:10:10,320 --> 00:10:15,740 State Water Implementation Fund for Texas or SWIFT at the discretion of the Board and 156 00:10:15,740 --> 00:10:17,820 specifically for water infrastructure funding. 157 00:10:18,560 --> 00:10:22,340 The other half will go to the Texas Water Fund and remain flexible there. 158 00:10:23,140 --> 00:10:28,420 This was a very positive development as we have consistently advocated for maximum flexibility 159 00:10:28,420 --> 00:10:32,220 for the board as well as for increasing funding for SWIFT. 160 00:10:33,320 --> 00:10:37,980 As mentioned, this is a constitutional amendment so it must be approved by voters this November 161 00:10:38,420 --> 00:10:40,800 and we will discuss that in more detail in a moment. 162 00:10:40,800 --> 00:10:45,780 Additionally, while the funds are dedicated, the legislature still has to authorize the 163 00:10:45,780 --> 00:10:50,480 spending each session, and they will have the ability to suspend and redirect the funding 164 00:10:50,920 --> 00:10:55,460 in the event of a declared disaster, but the bill expressed the legislature's intent 165 00:10:55,460 --> 00:10:58,980 that the funding be replaced as soon as possible following that. 166 00:10:59,440 --> 00:11:00,180 Next slide. 167 00:11:03,100 --> 00:11:07,880 Moving on to the next major water funding bill, Senate Bill 7 expands what these funds 168 00:11:07,880 --> 00:11:14,420 can be used for by adding water reuse projects to the new water supply fund as well as acquisition 169 00:11:14,420 --> 00:11:21,360 of water rights from outside the state. It also adds shovel ready reservoirs as an eligible uses 170 00:11:21,360 --> 00:11:27,580 of these funds and defines that as having acquired all of the required land and having obtained 171 00:11:27,580 --> 00:11:34,360 both a state water right permit and a federal 404 permit. SB 7 also broadens the Texas water 172 00:11:34,360 --> 00:11:39,600 Fund to include the Flood Infrastructure Fund, the Agricultural Water Conservation Fund, and 173 00:11:39,600 --> 00:11:41,820 the Economically Distressed Areas Fund. 174 00:11:42,560 --> 00:11:47,340 Finally, it charges the Board with development of standards and coordination for water transportation 175 00:11:47,340 --> 00:11:52,640 projects across the state so that projects constructed with these funds can be interoperable 176 00:11:52,640 --> 00:11:55,480 and benefit multiple regions of the state simultaneously. 177 00:11:57,040 --> 00:11:57,640 Next slide. 178 00:12:00,710 --> 00:12:04,870 In addition to the dedicated revenue, the legislature also provided one-time funding 179 00:12:04,870 --> 00:12:08,210 through House Bill 500, the Supplemental Appropriations Act. 180 00:12:08,770 --> 00:12:14,450 It is a total of $2.5 billion to the Texas Water Development Board with over $1 billion 181 00:12:14,450 --> 00:12:17,350 of that for water infrastructure and supply projects. 182 00:12:17,910 --> 00:12:23,930 There's also a reallocation of $880 million in funding appropriated last session from 183 00:12:23,930 --> 00:12:26,870 the Texas Water Fund to the Water Development Board generally. 184 00:12:26,870 --> 00:12:36,970 There was also $550 million in unspent funds, over $581 million in unspent funds for specific 185 00:12:36,970 --> 00:12:43,170 projects that the board awarded but was unable to fully process before the state budget process. 186 00:12:43,410 --> 00:12:47,850 Timelines required that funding be returned to the General Revenue Fund. 187 00:12:48,570 --> 00:12:53,850 Finally, there was over $130 million provided to pay the non-federal matching requirements 188 00:12:53,850 --> 00:12:56,850 funds for the clean water and drinking water state revolving funds. 189 00:12:57,810 --> 00:12:58,710 Next slide. 190 00:13:01,870 --> 00:13:06,730 Moving on to legislation that we worked on heavily this session and we've provided several 191 00:13:06,730 --> 00:13:10,010 updates to the Board on these bills as session progressed. 192 00:13:10,910 --> 00:13:18,430 HB 5659 by J. Dean changes the enabling legislation of the Northeast Texas Municipal Water District 193 00:13:18,430 --> 00:13:23,830 for inter-basin transfers requiring a majority vote of five of their seven member cities, 194 00:13:24,650 --> 00:13:30,230 councils before their board can approve a new contract or permit application for 195 00:13:30,230 --> 00:13:35,850 moving water into or out of the Cyprus River Basin. This bill was modified from 196 00:13:35,850 --> 00:13:40,070 its original form, which initially required a majority vote of all seven 197 00:13:40,070 --> 00:13:45,490 member cities. Additionally, there was an amendment to SB1, the budget that would 198 00:13:45,490 --> 00:13:50,210 have prohibited TCEQ from processing an interbasin transfer permit in the 199 00:13:50,210 --> 00:13:55,530 Cypress River Basin, but this amendment was declared an unconstitutional creation of general 200 00:13:55,530 --> 00:13:58,230 law by Governor Abbott and will not be enforced. 201 00:13:59,230 --> 00:14:05,210 Finally, we've discussed HB 2109 by Gary Van Dever at length, as this bill would have 202 00:14:05,210 --> 00:14:07,970 removed the Marvin Nichols Reservoir from the state water plan. 203 00:14:08,610 --> 00:14:12,330 This bill passed through the House committee but was never placed on the calendar for 204 00:14:12,330 --> 00:14:12,970 the full House. 205 00:14:13,490 --> 00:14:17,550 There was an attempt to amend a different piece of legislation with similar language, 206 00:14:17,550 --> 00:14:30,190 But that failed on the House floor, and we were very pleased to see our entire legislative delegation vote against that amendment, as well as having several of them speak against it and fight to protect water supply options for our region. 207 00:14:31,210 --> 00:14:31,810 Next slide. 208 00:14:34,680 --> 00:14:42,960 Moving on to other impactful water legislation, these first two bills were represented in our legislative agenda, and we formally supported both of them. 209 00:14:42,960 --> 00:14:49,900 HB 517 is a conservation bill that prevents HOAs from finding residents for discolored 210 00:14:49,900 --> 00:14:54,340 lawns during watering restrictions and for 60 days after. 211 00:14:55,520 --> 00:14:59,940 SB 1261 extends repayment terms for very large 212 00:15:00,000 --> 00:15:09,380 Water projects up to 40 years for TWDB funded bonds and 50 years for open market bonds. Our 213 00:15:09,380 --> 00:15:14,380 enabling legislation already provides us with 40-year bonding authority, but we will benefit 214 00:15:14,380 --> 00:15:19,780 from the open market term increase if we need that ability in the future. This bill applies 215 00:15:19,780 --> 00:15:25,620 to projects of 750 million or more and requires an engineer to certify the asset's lifespan 216 00:15:25,620 --> 00:15:32,620 matches the bond term. And then SB740 clarifies that PUC wholesale rate 217 00:15:32,620 --> 00:15:37,780 jurisdiction does not apply when one municipality sells wholesale water to 218 00:15:37,780 --> 00:15:42,820 another as several of our member and customer cities do, essentially sending 219 00:15:42,820 --> 00:15:48,560 these disputes straight to district court rather than the PUC. It also expands 220 00:15:48,560 --> 00:15:53,400 the expedited process for sales transfers and mergers of municipal 221 00:15:53,400 --> 00:15:53,880 systems. 222 00:15:55,320 --> 00:15:56,040 Next slide. 223 00:15:57,820 --> 00:16:03,080 Moving on to other significant legislation that will impact our city's growth, development, 224 00:16:03,520 --> 00:16:07,120 and indirectly water demands that we will need to plan for. 225 00:16:07,940 --> 00:16:13,900 Senate Bill 15 places a broad range of limits on the ability of cities over 150,000 residents 226 00:16:13,900 --> 00:16:19,600 to regulate development density, including minimum lot sizes, the maximum number of 227 00:16:19,600 --> 00:16:21,980 dwellings per lot, and related requirements. 228 00:16:21,980 --> 00:16:28,180 This will allow for significantly increased densities and higher growth projections for our region in the future. 229 00:16:29,320 --> 00:16:33,920 Senate Bill 840 addresses mixed use and multifamily conversions, 230 00:16:34,520 --> 00:16:40,100 preventing cities from imposing impact fees on buildings converted from commercial to residential use 231 00:16:40,100 --> 00:16:45,320 unless those fees already applied before a building permit was issued. 232 00:16:45,880 --> 00:16:50,100 This also applies to cities with populations over 150,000. 233 00:16:51,120 --> 00:16:58,100 And then House Bill 2559 by Jared Patterson changes the process for cities to impose a 234 00:16:58,100 --> 00:16:59,900 moratorium on new development. 235 00:17:00,280 --> 00:17:04,700 It does not limit their ability to do so, but does require two public hearings at least 236 00:17:04,700 --> 00:17:10,140 30 days apart and a three-fourths vote of council for approval each time the moratorium 237 00:17:10,140 --> 00:17:12,280 is put in place or extended. 238 00:17:13,280 --> 00:17:14,080 Next slide. 239 00:17:14,080 --> 00:17:15,040 There 240 00:17:17,250 --> 00:17:24,730 were several bills passed this session regarding city imposition of impact fees on developers for water and wastewater infrastructure. 241 00:17:25,230 --> 00:17:32,770 SB 1253 would require cities to give impact fee credits for water conservation projects installed by developers. 242 00:17:33,750 --> 00:17:39,850 This bill was vetoed because of an amendment on the House floor addressing a specific impact fee issue in Harris County, 243 00:17:39,850 --> 00:17:44,710 but is on the special session call and will likely be on the next one as well so that 244 00:17:44,710 --> 00:17:46,310 they can pass the bill cleanly. 245 00:17:48,110 --> 00:17:55,450 SB 1883 tightens impact fee rules by requiring a two-thirds vote of a city council to impose 246 00:17:55,450 --> 00:17:59,510 them and barring increases more than once every three years. 247 00:18:00,910 --> 00:18:08,030 Finally, SB 1173 raises the competitive procurement threshold from $50,000 to $100,000 248 00:18:08,030 --> 00:18:15,110 dollars for cities but this legislation does not impact us as our limit of 25,000 is found 249 00:18:15,110 --> 00:18:16,190 in our enabling legislation. 250 00:18:17,490 --> 00:18:18,010 Next slide. 251 00:18:21,210 --> 00:18:26,070 Every session there are bills that make changes to how political subdivisions like the district 252 00:18:26,070 --> 00:18:31,090 conduct business in areas like procurement, cybersecurity and the public information 253 00:18:31,090 --> 00:18:31,590 act. 254 00:18:32,150 --> 00:18:37,010 There are several more bills here that I can highlight but our staff is aware of 255 00:18:37,010 --> 00:18:41,630 of all of them and working to implement any legislation that impacts our operations. 256 00:18:43,030 --> 00:18:49,430 As has been mentioned to the Board, HB 1522 now requires public meeting notices to be 257 00:18:49,430 --> 00:18:55,570 posted three business days in advance as opposed to 72 hours previously, as well as 258 00:18:55,570 --> 00:18:58,370 posting a copy of the budget if it's on the agenda. 259 00:18:59,490 --> 00:19:06,590 SB 1964 relates to how political subdivisions use artificial intelligence and requires 260 00:19:06,590 --> 00:19:11,470 local governments to review certain AI systems and provide that review to the 261 00:19:11,470 --> 00:19:16,750 Department of Information Resources on request. Additionally, we will be required 262 00:19:16,750 --> 00:19:21,110 to conduct annual training on AI for those employees who regularly use 263 00:19:21,110 --> 00:19:28,450 computers. HB 1584 directs the PUC and electric utilities to maintain a 264 00:19:28,450 --> 00:19:33,110 priority facilities list that automatically includes hospitals, police, fire, 265 00:19:36,350 --> 00:19:36,350 and 266 00:19:36,350 --> 00:19:40,170 This is something we worked on extensively with the electric utilities that supply our 267 00:19:40,170 --> 00:19:42,150 facilities in the wake of winter storm Yuri. 268 00:19:43,350 --> 00:19:47,190 Generally we haven't had any problems with these utilities, but we're happy to see this 269 00:19:47,190 --> 00:19:48,170 codified in law. 270 00:19:49,710 --> 00:19:50,510 Next slide. 271 00:19:52,810 --> 00:19:56,110 With that, I'll move on to the ongoing special session. 272 00:19:56,750 --> 00:20:00,730 I've already covered the majority of this slide in my comments at the beginning of 273 00:20:00,730 --> 00:20:05,710 the meeting, but in addition to congressional redistricting and flood recovery legislation, 274 00:20:05,710 --> 00:20:11,610 The governor included a broad array of topics that do not impact water on the special session call. 275 00:20:11,950 --> 00:20:21,390 One additional item that could impact us is a prohibition on political subdivisions hiring legislative consultants to represent them in Boston. 276 00:20:21,970 --> 00:20:26,210 This has been a recurring issue over the course of several sessions and has never passed. 277 00:20:26,810 --> 00:20:31,070 During the regular session this year, the Senate passed the bill, but the House did not. 278 00:20:31,070 --> 00:20:36,330 It does not appear that there is any change to those positions going into the second special 279 00:20:36,330 --> 00:20:40,710 session and it's not clear that anything will move forward in that regard. 280 00:20:42,090 --> 00:20:46,950 So with that, I think that is a full review of the important legislation from this session 281 00:20:47,550 --> 00:20:54,330 and all I have, Mr. Chairman, I will just ask briefly if Eddie or Shea have anything 282 00:20:54,330 --> 00:20:55,610 to add that I didn't cover. 283 00:20:56,270 --> 00:20:57,050 That was extensive. 284 00:20:58,770 --> 00:20:59,290 Comprehensive. 285 00:20:59,550 --> 00:21:00,470 Comprehensive, yes. 286 00:21:00,470 --> 00:21:05,410 All right. So a lot of legislation. Yeah, a lot going on for sure. 287 00:21:07,580 --> 00:21:11,580 Okay. Any any questions from any committee members, other 288 00:21:16,900 --> 00:21:18,300 directors, any questions? 289 00:21:18,780 --> 00:21:19,300 Do 290 00:21:23,390 --> 00:21:32,000 you have something to say, my friend? Yeah, I got just one clarification for everybody on the committee's benefit. 291 00:21:32,000 --> 00:21:39,980 that while we're addressing these issues appropriately, do we need to have any kind 292 00:21:39,980 --> 00:21:45,300 of action from this committee or going to the board as a whole that these positions 293 00:21:45,300 --> 00:21:48,640 be adopted as the official positions of the district? 294 00:21:52,430 --> 00:21:53,090 Yes, sir. 295 00:21:53,350 --> 00:21:59,710 We have a formal legislative position statement that is considered by the committee and 296 00:21:59,710 --> 00:22:06,050 the board prior to the legislative session, and that is what staff works on and directs 297 00:22:06,050 --> 00:22:13,670 lobbyists to work on during session. Following session, I don't think there's any action 298 00:22:14,130 --> 00:22:20,610 to take on that, and we revisit that position statement before every session. 299 00:22:20,910 --> 00:22:25,170 I thought I had recalled something several months back to that regard, but I just wanted 300 00:22:25,170 --> 00:22:29,410 to be sure, and anything else that comes up in the special session would be covered 301 00:22:29,410 --> 00:22:31,950 by what we've already got here in the positions paper. 302 00:22:32,350 --> 00:22:32,970 Okay, thank you. 303 00:22:33,070 --> 00:22:34,290 I just wanted to be sure we were all on board. 304 00:22:35,550 --> 00:22:35,930 Okay. 305 00:22:36,850 --> 00:22:39,030 Okay. Any other directors? 306 00:22:40,210 --> 00:22:40,990 Oh, this is Thompson. 307 00:22:42,150 --> 00:22:43,210 Go ahead, Director Thompson. 308 00:22:43,650 --> 00:22:48,990 SB 1173 will then increase the trigger for competitive procurements. 309 00:22:49,650 --> 00:22:54,950 Is there any appetite from the district to change ours from 25 to 50 310 00:22:54,950 --> 00:22:59,910 or something like that, or do we think 25k is the right number to uh. 311 00:23:00,330 --> 00:23:05,870 Yeah I can speak to that one. So the specific requirement within our enabling legislation 312 00:23:06,330 --> 00:23:13,670 is related to construction contracts and so there is some flexibility on our part to 313 00:23:14,470 --> 00:23:18,390 increase that threshold for things that aren't considered construction contracts. 314 00:23:18,390 --> 00:23:27,970 We've historically aligned our policy with that of cities and the code required to be 315 00:23:27,970 --> 00:23:32,690 followed by city, even though it's not directly applicable to us. 316 00:23:33,090 --> 00:23:39,370 So as we kind of look to potentially refine our finance policy manual, that's something 317 00:23:39,370 --> 00:23:40,910 that we can talk about internally. 318 00:23:41,530 --> 00:23:46,650 There's not really an intent at this point to suggest a modification of our enabling 319 00:23:46,650 --> 00:23:53,450 legislation to increase that threshold related to construction contracts. 320 00:23:54,130 --> 00:24:03,110 But if there was a time at which we were initiating consideration to changes to our enabling legislation, 321 00:24:03,110 --> 00:24:05,610 that's something that would be on our list for consideration. 322 00:24:06,470 --> 00:24:07,590 Okay, thank you. 323 00:24:08,770 --> 00:24:08,970 Sure. 324 00:24:10,960 --> 00:24:11,620 Okay. 325 00:24:12,020 --> 00:24:15,160 Anyone else before we move on to our next discussion item? 326 00:24:15,160 --> 00:24:25,350 Okay. If there's no one, we're going to move on to discussion item B with constitutional election awareness campaign. David. 327 00:24:26,970 --> 00:24:27,730 Yes, sir. 328 00:24:30,640 --> 00:24:37,300 So, excuse me one second. I'd like to, sorry, let me get to the right spot in my notes. 329 00:24:45,950 --> 00:24:53,210 So, as I've discussed previously we are going to have a constitutional election for the dedicated revenue of water infrastructure. 330 00:24:53,210 --> 00:25:04,710 As we did in 2023, we are planning to conduct an awareness campaign in our service area in the days before the election, and I'd like to walk you through that campaign proposal now. 331 00:25:05,390 --> 00:25:21,670 As a political subdivision, NTMWD cannot advocate for or against the proposition, but we can provide educational information, encourage voter participation, and point people to nonpartisan voting resources, which is what the campaign does. 332 00:25:21,670 --> 00:25:28,350 Election Day is November 4th, 2025, and early voting begins October 20th. 333 00:25:28,730 --> 00:25:33,350 We expect to begin the campaign about two weeks prior to the start of early voting. 334 00:25:34,390 --> 00:25:39,030 The ballot language reads, the constitutional amendment to dedicate a portion of the revenue 335 00:25:39,030 --> 00:25:46,470 derived from state sales and use taxes to the Texas Water Fund and to provide for the allocation and use of that revenue. 336 00:25:47,170 --> 00:25:52,290 This language is fairly vague and leaves a question in the voter's mind about the potential 337 00:25:52,290 --> 00:25:53,790 for increasing taxes. 338 00:25:54,470 --> 00:26:00,630 So that is one thing we will focus on in our messaging since the proposal does not increase 339 00:26:00,630 --> 00:26:04,890 the sales tax but only directs a portion of it to this specific use. 340 00:26:05,770 --> 00:26:11,210 The design of the campaign is extremely similar to that which we used in 2023 and much 341 00:26:11,210 --> 00:26:13,150 of the messaging is also unchanged. 342 00:26:13,150 --> 00:26:22,950 The following slides are listed as drafts because the design and messaging may still change somewhat, but we do not anticipate significant changes. 343 00:26:23,710 --> 00:26:31,570 Lauren Kalashek has reviewed the campaign to ensure that we are staying within the requirements of the law for educational and non-advocacy purposes. 344 00:26:32,350 --> 00:26:39,370 And our communications team is working with our new media contractor to finalize the design of the campaign before we move forward. 345 00:26:40,490 --> 00:26:41,350 Next slide. 346 00:26:44,110 --> 00:26:48,690 This slide shows what is called a carousel ad that will run on social media. 347 00:26:49,130 --> 00:26:54,690 And you would click through the five images here to read what the proposition does and 348 00:26:54,690 --> 00:27:00,090 does not do. And then there are links to additional information. This would be posted 349 00:27:00,090 --> 00:27:05,910 to our social media channels, and then we would pay to boost the post and push it 350 00:27:05,910 --> 00:27:13,030 towards targeted audiences. So you can see here four main facts, including that it does 351 00:27:13,030 --> 00:27:15,310 not raise taxes on Texans. 352 00:27:17,760 --> 00:27:18,240 Next slide. 353 00:27:21,450 --> 00:27:25,670 This slide shows a banner ad and two margin ads 354 00:27:25,670 --> 00:27:33,190 that would run on web pages of local newspaper websites in our service area. The banner 355 00:27:33,190 --> 00:27:38,370 ad will likely lead to a fact sheet on the proposition provided by the Texas Water 356 00:27:38,370 --> 00:27:44,570 Development Board, which is also not an advocacy piece. This is what we pointed to when we did 357 00:27:44,570 --> 00:27:50,090 this in 2023, and while the Board hasn't yet posted an updated fact sheet for this election, 358 00:27:50,250 --> 00:27:56,910 we expect that they will shortly. The two margin ads will point to votetexas.gov, 359 00:27:57,490 --> 00:28:01,350 which provides information on registering to vote and how to vote. 360 00:28:02,470 --> 00:28:17,160 Next slide. This slide just shows screenshots of what the campaign looked like in 2023 on mobile devices with additional updated slides for the dates for this election. 361 00:28:19,460 --> 00:28:19,980 Next slide. 362 00:28:23,490 --> 00:28:29,970 And similarly this slide is what the campaign looked like two years ago on the websites of local newspapers. 363 00:28:29,970 --> 00:28:34,570 In addition to our member and customer city's specific newspapers, 364 00:28:35,150 --> 00:28:39,210 we will also be purchasing ads in the community impact newspaper, 365 00:28:39,930 --> 00:28:46,030 the Dallas Morning News, as well as the North Texas E-News, which covers Fannin County. 366 00:28:47,310 --> 00:28:51,630 In 2023, we spent $10,000 on this campaign. 367 00:28:51,630 --> 00:28:58,450 Due to the turnover in our communications firm, we have unspent funds in our budget for this year. 368 00:28:58,590 --> 00:29:03,150 And we are proposing to increase the budget for this campaign to $15,000. 369 00:29:04,750 --> 00:29:14,030 And that will enable us to do more on social media using some what's called wheels, 370 00:29:14,930 --> 00:29:20,970 kind of like small video ads that just run through the carousel as well as place ads in the Dallas Morning News. 371 00:29:20,970 --> 00:29:29,870 So that's what I have on the proposed awareness campaign for the constitutional election and I'm happy to take your questions, Mr. Chairman. 372 00:29:30,330 --> 00:29:38,050 Okay. Thank you, David. David, as we discussed the other day, voter turnout is so low on these type of elections. 373 00:29:38,750 --> 00:29:44,250 And part of the problem is the ballot language. So really commend you for this. 374 00:29:44,250 --> 00:29:45,930 Because I have one question though. 375 00:29:46,710 --> 00:29:52,490 Our policy organizations in Texas, a lot of them are going to weigh in on these constitutional 376 00:29:52,490 --> 00:29:53,010 amendments. 377 00:29:53,770 --> 00:29:57,530 I actually saw one the other day and I didn't bring my phone in. 378 00:29:57,690 --> 00:29:59,410 I was going to give you the name. 379 00:29:59,410 --> 00:29:59,530 Thank you. 380 00:30:00,000 --> 00:30:17,160 You probably have already seen it. But do we reach out, and they were against one of our water amendments, but do we reach out to any of these policy organizations just to make sure they fully understand what it is that we're voting on? 381 00:30:18,880 --> 00:30:29,320 Yes, sir. No, we don't engage with those policy organizations. The ones who oppose constitutional 382 00:30:29,320 --> 00:30:35,540 amendments like this are generally very small government associations, generally very conservative, 383 00:30:36,280 --> 00:30:42,540 and they are going to take those positions absent of anything we could say about it. 384 00:30:42,540 --> 00:30:52,420 I will say that we do engage with a number of other entities that are supporting the 385 00:30:52,420 --> 00:30:53,340 proposition. 386 00:30:54,420 --> 00:30:56,780 There will be large statewide efforts. 387 00:30:57,740 --> 00:31:04,840 Last time we participated in an effort with the Texas Oil and Gas Association and the 388 00:31:04,840 --> 00:31:10,680 other water associations that we are involved in engage with those groups. 389 00:31:10,680 --> 00:31:10,760 groups. 390 00:31:11,260 --> 00:31:17,700 So this is limited just to our service area and communicating with those who take our 391 00:31:17,700 --> 00:31:20,080 water through our members and customers. 392 00:31:21,220 --> 00:31:27,640 And in general, we don't engage with those in opposition to the proposition. 393 00:31:28,820 --> 00:31:29,520 Okay. 394 00:31:29,740 --> 00:31:30,280 Thank you, David. 395 00:31:31,220 --> 00:31:34,260 Any comments or questions from committee members? 396 00:31:37,150 --> 00:31:40,350 Director Crowley has a – oh, I'm sorry, I'm not a committee member. 397 00:31:40,350 --> 00:31:46,270 That's alright. Hey, I'll tell you what, you're so special, Director Crowley, we'll let you go ahead. 398 00:31:48,030 --> 00:32:08,750 Thank you, sir. David, when you put the slides up on the screen a few minutes ago, were those in fact the slides that will be used on social media and in our advertisements? 399 00:32:10,170 --> 00:32:20,550 Yes, sir. Pending potential small adjustments, we expect that that will be exactly what is – what goes forward. 400 00:32:21,010 --> 00:32:27,110 As I said, we do have a new communications firm on board that this is actually the first project they're working on. 401 00:32:27,470 --> 00:32:32,550 There may be design changes, but I don't anticipate verbiage changes. 402 00:32:33,290 --> 00:32:42,010 I may just not see it, but what I was wondering, and these people are much better at this certainly 403 00:32:42,010 --> 00:32:49,970 than I am in terms of how to do these things, but I was just hoping to see a slide that 404 00:32:51,810 --> 00:32:59,730 above all else quickly says no tax increase, but the potential to add water, and that 405 00:32:59,730 --> 00:33:06,590 And it doesn't just pop out at me, maybe it shouldn't, maybe this is a better way to approach it. 406 00:33:06,690 --> 00:33:11,070 But I just wanted to bring that up and I'll let you guys do with it whatever you think is best. 407 00:33:12,710 --> 00:33:20,090 Okay. Thank you. And I will communicate that with our communications team and we'll continue to work on this. 408 00:33:21,950 --> 00:33:24,710 Okay. Any other directors? Questions? 409 00:33:29,360 --> 00:33:32,720 If not, we'll move on to our next discussion item. 410 00:33:33,080 --> 00:33:38,820 And just, David, again, this is, I think, very valuable what you're going to be doing here, 411 00:33:39,320 --> 00:33:46,060 getting the word out. But discussion item C, legislative consultant contracts review. David? 412 00:33:47,820 --> 00:33:53,740 Okay. So I would like to take a moment to just review where we stand currently with the various contracts 413 00:33:53,740 --> 00:33:56,040 that we have with legislative consultants. 414 00:33:56,780 --> 00:33:59,320 I'll start by reviewing the contracts we have currently 415 00:33:59,320 --> 00:34:02,860 and then discuss where we are planning to go with this 416 00:34:02,860 --> 00:34:03,720 as we move forward. 417 00:34:04,520 --> 00:34:06,240 Currently, as the committee is aware, 418 00:34:06,500 --> 00:34:10,200 I am sitting in the offices of Hillco Partners in Austin. 419 00:34:10,800 --> 00:34:13,020 They are the only legislative consulting firm 420 00:34:13,020 --> 00:34:14,580 we currently employ in Austin, 421 00:34:15,020 --> 00:34:17,480 and we hired them in January of 2024. 422 00:34:18,220 --> 00:34:20,580 We previously had longstanding relationships 423 00:34:20,580 --> 00:34:25,280 with two firms in Austin and made the decision to move forward with Hillco 424 00:34:25,280 --> 00:34:31,740 after an RFP-like process that involved multiple rounds of interviews with several firms, 425 00:34:32,080 --> 00:34:35,680 including both of those who had previously represented us. 426 00:34:36,660 --> 00:34:40,620 I have to take a moment now to say how happy I am and the district is 427 00:34:40,620 --> 00:34:43,340 with the services Hillco provided to us this session. 428 00:34:44,400 --> 00:34:49,240 As you all know well, this was a particularly difficult and busy session 429 00:34:49,240 --> 00:34:54,900 with many broad water related issues and issues specific to the district and our water supplies. 430 00:34:55,720 --> 00:35:00,680 Hillco was excellent in representing us and extremely responsive whenever we needed them. 431 00:35:01,400 --> 00:35:07,420 Jay Howard is the lead for Hillco and unfortunately he's not with us today because he's in Italy with his family, 432 00:35:07,780 --> 00:35:11,880 but Shay Pearson is also on the team as well as Eddie Solis. 433 00:35:11,880 --> 00:35:19,860 Shae focuses on environmental issues and TCEQ and Eddie focuses on economic development 434 00:35:19,860 --> 00:35:24,520 issues and was very helpful to us with the Governor's Office's session. 435 00:35:25,780 --> 00:35:30,900 In addition to Hillco, we are part of the Texas Water Supply Partners, which is a group 436 00:35:30,900 --> 00:35:35,820 of two other wholesale water suppliers, the Opportunity Regional Water District and 437 00:35:35,820 --> 00:35:40,260 the San Jacinto River Authority, as well as the Texas Business Leadership Council, 438 00:35:40,260 --> 00:35:43,240 which is an association of large company CEOs 439 00:35:43,240 --> 00:35:44,680 with a presence in Texas. 440 00:35:45,580 --> 00:35:47,900 This group comes together to split the costs 441 00:35:47,900 --> 00:35:50,380 of a consultant who is Heather Harward. 442 00:35:50,980 --> 00:35:53,240 This has also been a longstanding partnership 443 00:35:53,240 --> 00:35:54,840 that we are very happy with. 444 00:35:55,840 --> 00:35:58,940 In Oklahoma, we have contracts with two firms 445 00:35:58,940 --> 00:36:01,340 that we hired in 2022 to help us 446 00:36:01,340 --> 00:36:03,440 with the Red River Boundary Commission issue 447 00:36:03,920 --> 00:36:05,580 and our Lake Texoma pump station. 448 00:36:06,280 --> 00:36:08,960 These contracts were particularly for that issue 449 00:36:08,960 --> 00:36:13,540 And, of course, we were ultimately successful in completing that process in Oklahoma. 450 00:36:14,540 --> 00:36:18,940 As we look at the political landscape in Oklahoma and based on our experience there 451 00:36:18,940 --> 00:36:24,200 over the course of almost a decade in working on the boundary issue, we assess that the 452 00:36:24,200 --> 00:36:29,240 conversation about purchasing water from Oklahoma is extremely sensitive and does 453 00:36:29,240 --> 00:36:34,280 not appear favorable towards selling water to entities in Texas in the near future. 454 00:36:35,240 --> 00:36:40,300 There are multiple laws in Oklahoma that prohibit the export of water outside of the state, 455 00:36:40,540 --> 00:36:44,280 and we would have a very long and uphill battle to repeal those laws. 456 00:36:45,000 --> 00:36:48,880 As such, we feel it is best to move on from these contracts. 457 00:36:49,400 --> 00:36:55,020 We are deeply grateful for the work provided by Greg Payett and Sidney Hill and Brian 458 00:36:55,020 --> 00:36:56,840 Freed at Amber Integrated. 459 00:36:57,180 --> 00:37:01,680 They did an awesome job for us, and we made a great decision in hiring them. 460 00:37:02,980 --> 00:37:14,800 We also recognize that it's important for us to keep our ear to the ground in Oklahoma in case the situation there becomes more favorable in presenting an opportunity for pursuing water supplies there. 461 00:37:15,560 --> 00:37:25,580 Staff maintain several touch points in the state including membership in the Red River Valley Association, which includes representation from all of the states bordering the Red River. 462 00:37:25,580 --> 00:37:30,960 We also will be sending SAF to the Oklahoma Governor's Water Conference in December. 463 00:37:31,720 --> 00:37:36,600 Finally, we are engaged with the Red River Compact Commission and its work managing the 464 00:37:36,600 --> 00:37:41,000 water rights that each party state has in Lake Texoma and the Red River. 465 00:37:41,500 --> 00:37:48,240 So there are multiple ways that we can continue to remain engaged in Oklahoma without full-time representation. 466 00:37:49,800 --> 00:37:54,740 We also think that this may be the right time to refocus on federal opportunities for 467 00:37:54,740 --> 00:37:57,460 water supply that may have more potential than Oklahoma. 468 00:37:58,340 --> 00:38:03,620 For a long time until 2019, the district did have representation in Washington, D.C. 469 00:38:03,700 --> 00:38:05,260 with several issues at play. 470 00:38:05,840 --> 00:38:10,940 These included work with the Corps of Engineers and Congress on our 404 permit for Bodark 471 00:38:10,940 --> 00:38:16,160 Lake as well as the federal issues surrounding the Lake Texoma Pump Station and the exemption 472 00:38:16,160 --> 00:38:17,220 to the Lacey Act. 473 00:38:17,220 --> 00:38:24,760 That work decreased significantly after those problems were solved and we have not had a consultant there since 2019. 474 00:38:25,660 --> 00:38:28,780 We believe that there may be opportunities with the Corps of Engineers. 475 00:38:29,440 --> 00:38:41,920 For example, reallocation of flood pool to water supply in reservoirs like Wright-Patman and with Congress through the Water Resources Development Act reauthorization, which occurs every two years. 476 00:38:42,560 --> 00:38:52,620 We also believe it is important to have a regular presence there with our delegations so that if there are future needs, we have ongoing relationships rather than trying to scramble at the last minute. 477 00:38:53,340 --> 00:39:05,020 Finally, we know that the regulatory and rulemaking landscape is shifting very quickly under the current administration, and we want to be well positioned to respond or take advantage of opportunities when they present themselves. 478 00:39:06,120 --> 00:39:12,140 We have begun to conduct a process similar to that which we undertook in 2023 to hire 479 00:39:12,140 --> 00:39:12,600 Hillco. 480 00:39:13,100 --> 00:39:17,620 I have met with several potential firms and we have narrowed them to four finalists. 481 00:39:18,220 --> 00:39:23,980 Jenna, Billy and I will be traveling to Washington, D.C. in mid-October to meet with members 482 00:39:24,560 --> 00:39:28,420 and staff from our legislative delegation as well as with these firms. 483 00:39:29,380 --> 00:39:33,420 Two of them are larger firms that have broad-based relationships with members 484 00:39:33,420 --> 00:39:39,500 of our delegation as well as committees, the committees of jurisdiction on water infrastructure issues. 485 00:39:40,260 --> 00:39:45,020 The remaining two are particularly focused on water supply work with the Corps of Engineers, 486 00:39:45,440 --> 00:39:49,280 and both worked on relevant committees in the House and Senate respectively. 487 00:39:50,300 --> 00:39:56,480 So that's the direction we're heading in at this time, and we will keep the committee updated as we move forward. 488 00:39:57,060 --> 00:39:59,140 I'm happy to take your questions. 489 00:40:02,120 --> 00:40:04,840 Okay. Any committee members? Questions for David? 490 00:40:09,230 --> 00:40:13,630 Pascal has one comment. I'd like David to clarify for all of our benefit. 491 00:40:14,050 --> 00:40:28,210 As I recall, most of the various funds that have been allocated by the state go through Texas Water Development Board or similar agencies that basically loan that money out to the local utility providers. 492 00:40:28,210 --> 00:40:32,130 I don't recall much money that's there in the form of a grant. 493 00:40:32,430 --> 00:40:38,410 But if that's the case, the ads need to note that that's the process. 494 00:40:38,610 --> 00:40:47,250 It's loaned out to local water providers, which keeps the state from bearing anything other than the interim cost of carrying the debt. 495 00:40:48,470 --> 00:40:52,810 I don't know if that's a concern for anybody else or not. 496 00:40:53,310 --> 00:40:54,670 It's not a big concern of mine. 497 00:40:54,670 --> 00:41:05,110 I just don't want to mislead people to think that this may just get spent willy-nilly it doesn't by any means of the, you know, imagination. It's very carefully allocated. 498 00:41:08,750 --> 00:41:15,210 Yes, sir. I think that's generally an accurate understanding of the money that goes to the water development board. 499 00:41:15,210 --> 00:41:26,770 It is used by the board to back the bonds that entities take out as we apply for money from the board. 500 00:41:28,050 --> 00:41:36,850 And there is generally not earmarks, you would say, or grants as you mentioned. 501 00:41:36,850 --> 00:41:49,190 We saw some specific projects funded this year, but those, as I mentioned earlier, were already in process and had just bumped up against budget timelines. 502 00:41:49,550 --> 00:41:54,070 So in general, we're not – there are no entities pursuing earmarks in the state budget. 503 00:41:55,170 --> 00:41:59,050 And yes, the money for water infrastructure runs through the Water Development Board. 504 00:42:01,480 --> 00:42:04,480 That's good, David, and I can add a little bit more. 505 00:42:04,480 --> 00:42:13,080 So the discussion that we're having, you know, there's funding, the funding that we get through 506 00:42:13,080 --> 00:42:20,320 the Texas Water Development Board is a combination of joint funding by the federal government 507 00:42:20,940 --> 00:42:25,740 through the Clean Water State Revolving Fund or the Drinking Water State Revolving Fund 508 00:42:25,740 --> 00:42:31,340 that's funded through the EPA in the federal budget and then matched with state funds 509 00:42:31,340 --> 00:42:37,240 at the state level, so that's kind of a combination type effort in state and federal funding. 510 00:42:37,900 --> 00:42:43,140 And then all of the SWIFT program funding that we've gotten associated with Bodark Lake 511 00:42:43,140 --> 00:42:46,300 and the Leonard Water Treatment Plant is all only state funding. 512 00:42:47,120 --> 00:42:49,860 So there's a combination of things. 513 00:42:50,540 --> 00:42:53,240 We've historically not gotten significant grants. 514 00:42:53,420 --> 00:42:59,260 The benefit is on an interest rate subsidy, so that's where we get the savings that 515 00:42:59,260 --> 00:42:59,700 we get. 516 00:42:59,700 --> 00:43:05,160 is there's a subsidy related to the interest rate that we're paying that's below the market 517 00:43:05,160 --> 00:43:05,720 value. 518 00:43:06,400 --> 00:43:08,900 So that's how we're able to achieve savings. 519 00:43:10,000 --> 00:43:15,560 David showed a really informative slide as he was talking through the legislative session 520 00:43:15,560 --> 00:43:22,000 that talked about the Texas Water Fund and all the different funds that are under 521 00:43:22,000 --> 00:43:22,660 that umbrella. 522 00:43:23,600 --> 00:43:28,480 For some of those funds, there are greater grant programs, but they're not ones that 523 00:43:28,480 --> 00:43:34,660 we generally participate in, so things like the Rule Water Assistance Fund would have 524 00:43:34,660 --> 00:43:37,720 a greater degree of subsidy through grants. 525 00:43:37,900 --> 00:43:43,740 But that's really not applicable to us, but could be to some of the communities that 526 00:43:43,740 --> 00:43:44,140 we serve. 527 00:43:48,480 --> 00:43:48,900 Okay. 528 00:43:49,860 --> 00:43:51,980 Any other questions or comments? 529 00:43:52,400 --> 00:43:52,900 Any directors? 530 00:43:53,960 --> 00:43:54,540 Yeah, Dr. Kelly. 531 00:43:54,980 --> 00:43:55,960 I have one. 532 00:43:56,680 --> 00:43:57,300 Yes, sir. 533 00:43:57,580 --> 00:43:58,300 Director Mayne? 534 00:43:58,300 --> 00:44:04,360 David, the no funding for lobbyists that they're pushing for cities and 535 00:44:04,360 --> 00:44:09,580 are we affected the district being a district and not being a city or our 536 00:44:09,580 --> 00:44:16,040 county or whatever or will that affect us too? Yes sir well it depends what 537 00:44:16,040 --> 00:44:22,780 version of the bill is passed. The Senate passed legislation this session 538 00:44:22,780 --> 00:44:27,100 in the regular session that that would have included the district and would 539 00:44:27,100 --> 00:44:29,620 have limited our ability to hire contract lobbyists. 540 00:44:30,300 --> 00:44:36,180 That is the version of the bill, the most expansive version of the bill that the Senate 541 00:44:36,180 --> 00:44:40,340 has passed consistently, I believe, for the last four sessions. 542 00:44:42,060 --> 00:44:48,960 Any time this, that bill has advanced in the House, it has always excluded the district. 543 00:44:49,600 --> 00:44:57,000 And so there are various ways that it has been constrained in the past to take 544 00:44:57,000 --> 00:44:59,740 out basically all political subdivisions. 545 00:45:00,000 --> 00:45:05,060 We accept municipalities or to focus specifically on tax issues. 546 00:45:05,980 --> 00:45:13,300 We, as I said up top, we don't anticipate that the House has changed their position on this, 547 00:45:13,800 --> 00:45:21,140 that no legislation moved forward in the regular session in the House. 548 00:45:21,600 --> 00:45:24,180 We don't anticipate that it will at this time. 549 00:45:24,180 --> 00:45:36,720 But if it did, it would be likely that it would be constrained from the Senate version of the bill, which does include us, but has typically been modified to not include us. 550 00:45:37,340 --> 00:45:38,000 Thank you. 551 00:45:40,200 --> 00:45:44,700 Okay. I don't see any other hands raised. Anyone else? 552 00:45:48,260 --> 00:45:50,840 If not, we'll move on to our last discussion item. 553 00:45:51,440 --> 00:45:59,020 Item D is do we have any feedback on the meeting or requests for potential future agenda items? 554 00:46:03,270 --> 00:46:03,650 Okay. 555 00:46:03,650 --> 00:46:13,370 Okay. If there's no feedback, it is now, according to my watch, 3.46 p.m. and the committee meeting is adjourned. 556 00:46:14,030 --> 00:46:16,130 Have a good evening, everyone. Thank you. 557 00:46:16,710 --> 00:46:16,970 Take care. 558 00:46:17,150 --> 00:46:17,410 David. 559 00:46:18,310 --> 00:46:18,910 Great report.