[0:34] Test test Test test.
[13:07] And let's go ahead and say it is 6:30.
[13:11] We are going to go ahead and call this
[13:13] meeting to order. And first we'll begin
[13:17] with roll call. We can go ahead and take
[13:19] care of roll call.
[13:28] here.
[13:34] » Present.
[13:35] >> All right. Thank you, ma'am. Appreciate
[13:37] that. Okay. Let's go ahead and stand and
[13:40] let's go ahead and do our pledge of
[13:41] allegiance.
[13:42] >> Okay. Amen.
[13:48] » To the flag of the United States of
[13:50] America and to the republic for which it
[13:53] stands. One nation under God,
[13:56] indivisible, with liberty and justice
[13:58] for all.
[13:59] >> All right. Thank you so much. Appreciate
[14:02] that, council. All right. Let's go ahead
[14:04] and jump into item number three. And
[14:07] this is a presentation, discussion, and
[14:09] direction concerning the budget for
[14:11] fiscal year 2026 to 2027. And the areas
[14:15] that we're going to go ahead and cover
[14:16] are the water and wastewater utility
[14:19] rates, b the tax rate, and c other
[14:23] departmental budget uh changes or
[14:26] challenges. So, let's go ahead and uh
[14:29] start with A with water and wastewater
[14:31] utility rates.
[14:32] >> Yeah. So, um I'm going to just uh
[14:35] introduce you all. I know uh most of
[14:37] youall I think were here last time uh
[14:39] when uh New Jen was here. Uh but um been
[14:42] working over the last I guess couple
[14:44] months again with uh Matthew uh Garrett
[14:47] and his team at New Gen. uh we had a lot
[14:50] of changes uh you know and and I know he
[14:53] will go over that but since the last
[14:55] time uh last year when we um we made
[14:59] utility rate changes obviously as you
[15:01] all know uh we issued new debt uh in the
[15:04] utility uh which does have a factor in
[15:07] uh kind of the utility rates uh and so
[15:10] uh Ivonne and I spoke and we felt like
[15:12] it was really critical to really hone in
[15:15] on where our utility rates need to be. I
[15:17] know there's been a lot of conversations
[15:18] at the council level of what that needs
[15:20] to look like. Uh and and the idea was um
[15:24] let's get somebody in here that um
[15:25] really understands that world uh best
[15:28] practices and the like. Uh and so uh we
[15:32] brought Newgen back in uh and started uh
[15:34] to speak with him and his team. And so
[15:37] Matthew is here to kind of give you a a
[15:39] picture of of where we're at uh with
[15:41] those conversations and uh kind of how
[15:44] we potentially look at proceeding. I
[15:46] know he's got a couple different maybe
[15:47] options to kind of explore. So, I'll
[15:49] turn it over to Matthew to kind of walk
[15:51] through that conversation with y'all.
[15:52] So,
[15:54] >> and that should work. The big
[15:57] >> Yes, sir. Thank you very much. Howdy,
[15:59] mayor, members of council. Matthew
[16:01] Garrett, partner with New Gen Strategies
[16:02] and Solutions. Always good to be back in
[16:04] front of you. Um,
[16:07] so when Zach called us, right, we were
[16:09] going to do a quick update and the quick
[16:11] update turned into we've got a lot going
[16:13] on and then we have a master plan and we
[16:15] have a laundry list of projects and
[16:17] there's no way we could fund them all,
[16:18] but we have one big one and we'll talk
[16:20] about that in a minute. Um, so what does
[16:22] that look like to Lidal going forward?
[16:24] So the good news is you're looking at
[16:26] this beyond one year at a time and
[16:28] that's what we're going to do. Again,
[16:29] we're going to forecast that fiveyear
[16:30] horizon, kind of talk about the needs.
[16:33] Um, a couple things that we're going to
[16:35] talk about. You you do have a little bit
[16:37] of growth coming in. I think we max out
[16:40] at around 180 new connections in 27 and
[16:43] then we level off to 100 and then kind
[16:45] of wayne because we can't be sure of
[16:48] what's coming after.
[16:50] But like most right forecasts, we want
[16:52] to put the known and measurable inputs
[16:54] in and then the further out we get the
[16:56] less we want to bet on the come right.
[16:58] So I think that's a good conservative
[16:59] approach. Additionally, last year we had
[17:02] recommended that that small business
[17:03] rate which is equal to residential
[17:05] effectively be gone. Uh parts of it have
[17:09] remained and so we're again recommending
[17:11] that small commercial just be roped in
[17:13] and charged like all other commercial.
[17:15] Um primary reason is you've already
[17:17] addressed the meter size equivalency,
[17:19] right? So a larger meter can now pay
[17:21] more. And so within your commercial
[17:23] class, you already have segregation or
[17:25] differentiation and who pays based on
[17:29] potential volume, right? Additionally,
[17:31] you also have um volumetric rates which
[17:34] pick up the volume component. So again,
[17:36] no good reason in our mind for that
[17:38] small commercial customer to continue
[17:40] paying a lesser rate, especially in the
[17:42] face of major investments. Um yeah, so
[17:46] that and we are continuing a phase in of
[17:48] that meter equivalency. We'll talk about
[17:49] what that looks like. Important note,
[17:52] last time there was a communication
[17:55] problem and we did not include a debt
[17:58] service which is currently on the books
[18:00] of a half million dollars. Um, so that
[18:02] made things look a little better than
[18:03] they really are. So we've added that in.
[18:05] Additionally, you've since issued debt
[18:07] is 26 issuance 25. Yeah. And that's
[18:11] around 350, 370 uh peranom in principal
[18:15] and interest payments. Um, so we
[18:17] factored that in. You do have a
[18:19] wastewater treatment plant. subject to
[18:22] winning big tonight. Uh you will need to
[18:24] fund it and uh that is a rough roughly a
[18:28] million dollars per year payment even on
[18:30] a 30-year note. And among the many
[18:33] things that Zach and engineers will
[18:35] share around their master plan, we only
[18:36] funded that one in this horizon. So all
[18:40] that to say, it's not we aren't
[18:43] packaging up the wish list. We're
[18:44] putting in the need and the need is
[18:46] still a big jump at a $19 million clip,
[18:49] right? Across 2,000 connections, maybe
[18:52] 2,300 2400 by the end of this. Uh that's
[18:55] a pretty good jump.
[18:58] That said, your your cost will grow from
[19:00] 2.7 million to over 4 million. So that's
[19:02] the hill we have to climb. That's an
[19:05] average annual increase of cost alone of
[19:07] 10 and a half%. Now, here are the costs
[19:09] that make that up. your O andM like a
[19:11] lot of operations and maintenance
[19:13] expenses your people other than
[19:17] well we don't have any major jumps right
[19:19] so you're not adding 10 staffers and so
[19:21] your on andm your operations line is a
[19:24] pretty steady growth uh in accordance
[19:26] with inflation
[19:28] your capital outlays are anticipated in
[19:30] that yellow line or yellow yellow middle
[19:33] bar excuse me so you do have some cash
[19:36] capital each year uh and lastly that
[19:38] projected debt service. Um,
[19:42] so the yellow line is very faint, but
[19:44] you have your existing layer of debt
[19:45] service. Again, that's around 900,000.
[19:47] You add again another million once that
[19:50] wastewater treatment plant debt comes
[19:53] on. And that'll first affect you in 29
[19:56] if you issue in 28. Okay.
[20:00] So again, currently uh the residential
[20:03] and small commercial rates are identical
[20:05] uh except for the asterric which is that
[20:08] your residents pay a volumetric winter
[20:10] quarter average. Um additionally another
[20:13] footnote, you do have multi-unit billing
[20:15] and so that will affect each unit build
[20:18] like a single family equivalent uh at
[20:21] the 5/8 inch base rate. Pretty common
[20:23] approach. Uh that said, your minimum
[20:26] charges are between $20 and $83. Uh
[20:29] there aren't many residents with a
[20:30] 4-inch meter, probably zero, actually.
[20:33] Uh we may have a couple larger inch and
[20:34] a half meters out there. Um I'm sure
[20:37] they may have approached Zach and talked
[20:39] about what to do if they want to get a
[20:40] smaller one. U but this mostly is
[20:43] affecting your small commercial today.
[20:45] Um you do have an inclining block rate
[20:47] as discussed before. That is a good uh
[20:50] opportunity to send a price signal. If
[20:53] you do not have some conservation price
[20:55] signal, you would very likely have to
[20:57] build additional capacity, more storage,
[20:59] more elevated storage to pressurize your
[21:01] system just for July through September,
[21:04] right? Just for the big piece when it's
[21:06] 104 outside and people are watering. Um,
[21:09] so to that end, this is a good approach.
[21:12] One thing before we leave this slide,
[21:13] I'll recommend in the future, we are in
[21:15] the industry and in Texas kind of going
[21:17] away from included volumes. your minimum
[21:20] charge is already pretty low and then
[21:22] you are effectively including 3,000
[21:24] gallons in the minimum. There are other
[21:26] ways to to handle different customer
[21:29] types. Um we haven't suggested that
[21:32] change today, but again as we have a
[21:35] pretty steep hill to climb, you have
[21:37] other rate strategies you can employ in
[21:39] the future and this is one that probably
[21:41] warrants a review
[21:45] with that. Uh same is true on um sewer,
[21:49] $22. Uh and then you have an inclining
[21:51] block rate right there.
[21:54] Commercial rate structure. Again, just
[21:55] want to point out we do have uh the
[21:58] meter equivalency starting in. So that
[22:00] was at about 20% of the industry
[22:03] standard. We did that because we didn't
[22:05] want to expression rip the band-aid.
[22:07] didn't want to have a major rate shock
[22:09] to our commercial customers, but we do
[22:11] anticipate phasing them in to the full
[22:15] additional cost of having a large meter.
[22:17] Again, that principle is that a large
[22:19] meter puts additional demand on your
[22:21] system and as a result, its minimum is
[22:24] higher to represent your fixed cost
[22:26] which are higher for those larger
[22:27] meters.
[22:30] So, my doomsday chart and I apologize
[22:32] for it. It is the burning platform. It
[22:34] just says we can't stay here. If you do
[22:36] nothing with rates and you need to spend
[22:38] what we have according to plan, it
[22:39] doesn't work right. So, as the dashboard
[22:41] goes, your expenses are in that gold or
[22:43] orange bar, revenues, uh, they're at
[22:46] around 2 million. Don't keep up. Um,
[22:48] because your growth's not enough to to
[22:50] pull it over, uh, the additional burden.
[22:53] Your debt service coverage, the bond
[22:55] community will not like it if you're not
[22:56] making your notes. Uh, and so you miss
[22:58] on that mark. And then we literally go
[23:01] negative. And so uh I share it only to
[23:04] show you the impetus. We we do have to
[23:07] do something about rates. Um as proposed
[23:11] again
[23:12] to say one more time, we are planning to
[23:15] increase the commercial rate phasing in
[23:18] up to that 40% of meter equivalency.
[23:22] Again, meter equivalency is sort of an
[23:23] industry standard. uh there are basic
[23:26] metrics that say this meter is two
[23:28] times, four times, eight times the
[23:31] capacity. Uh and that's why these rates
[23:34] are now moving up. You'll see that 1 in,
[23:36] 2 in, and 4 in have a little bit bigger
[23:38] steps than they did before because we're
[23:40] implementing a 40% equivalency factor.
[23:43] Meanwhile, the rate goes up from 20 to
[23:45] 27. Uh on the residential base bill,
[23:48] we've left the 3,000 gallons included
[23:50] for the time being, trying not to do too
[23:52] much at once. Um it's a lot to explain
[23:55] uh if we do too much at once. Uh again,
[23:58] the sewer rate was 22 before. We're
[24:00] recommending 2970
[24:03] going into 2027. And you'll see the
[24:05] other rates have some increases along
[24:08] the way. No change to the winter average
[24:11] policy,
[24:12] but we have assumed that this new
[24:14] residential chart does not apply to a
[24:16] small commercial customer. Right? So
[24:19] we've taken them off this slide. small
[24:21] commercial now is going to live with
[24:22] other commercial pay their if they're
[24:25] small lower minimum charge and pay
[24:27] volumes just like a commercial customer
[24:29] would. Um so again the rate
[24:32] differentials here um we have increased
[24:37] right the equivalency up to 40%. Uh that
[24:41] puts that commercial rate at 38.48
[24:44] uh and you see the associated changes
[24:46] kind of rowby row. I don't want to read
[24:48] the detail to you. Any questions though
[24:50] on the the residential changes to rates?
[24:55] Any of my
[24:57] opinions on a design?
[24:58] >> Go back to the commercial.
[25:00] >> Yes sir.
[25:01] >> So Pete, how many just on top of your
[25:05] head, how many of our small businesses,
[25:08] you know, start falling into the 2 in
[25:11] and above?
[25:13] When you look at the small businesses,
[25:17] » we have kind of like I have an idea.
[25:20] >> I don't I don't know. I do have the
[25:22] data. Didn't we move all the 2 inch and
[25:24] above to normal commercial or do we have
[25:26] a few left in small?
[25:29] >> I think most of them.
[25:31] >> Okay. So, so we're looking at the
[25:36] >> but that was there's still some like
[25:39] have a situation where
[25:44] Ivon and I were looking the other day.
[25:46] We we pulled like the top 10 users,
[25:48] commercial users, right? I'm just going
[25:50] to point an example, not to like point
[25:52] any of our users out, but like AutoZone
[25:56] for instance, is listed in our system as
[25:58] a small business commercial. That's just
[26:01] because originally it was based on meter
[26:04] size, but a national brand probably
[26:06] doesn't make sense to be listed as a
[26:08] small business commercial. So I think
[26:11] with the idea behind us moving to that
[26:14] meter equivalency is why we felt like
[26:16] it's probably doesn't make sense anymore
[26:19] to
[26:21] keep the two distinguishing small
[26:23] business and commercial and just have
[26:25] them just switch to commercial because
[26:27] they're already going to be paying less
[26:29] based on their need. So
[26:32] that's why we have that. That's just one
[26:34] example. I think I think that's where
[26:36] the shop might be or you might get a
[26:38] little bit but those businesses totally
[26:40] agree with you in a sense but I'm just
[26:42] looking at say just even the one inch
[26:45] right now with a small business if they
[26:47] they're paying you know local business
[26:49] it's like 2267 and we're going to jump
[26:52] all the way to 4874
[26:54] until
[26:56] you know small business that goes along
[26:58] with that
[26:59] >> and we do have I know we have the data
[27:01] on who's listed there
[27:03] >> yeah I mean I have my laptop. I assume
[27:05] you didn't want me to pull it out and go
[27:06] deep, but I can if we actually want to
[27:08] talk about detail.
[27:10] >> I was just wondering how many fell in
[27:11] there. Oh, yes,
[27:12] >> that was basically it. We had enough.
[27:15] >> Yeah. The good news is we are not only
[27:18] increasing the minimum equivalency. So,
[27:20] the bigger ones are going to feel share
[27:23] in in the pain and the burden. but also
[27:25] to that same commercial customer
[27:27] politely as a council, you can say, "Our
[27:29] residents are going up $7 on the minimum
[27:32] and you're going up 12 or or whatever
[27:34] that delta was. I forgot the reference,
[27:36] but um yeah, there there is a a shared
[27:41] uh it's not like we're just doing this
[27:42] to commercial. We're not we're not
[27:45] paying the bills off of rates only that
[27:47] they're affected by. So, but we can
[27:50] provide that data. We can follow up uh
[27:51] as well to council if that would help in
[27:53] decision making. I'm sorry I didn't have
[27:54] it with me.
[27:56] >> A few a few of the residents. Yeah.
[27:58] Especially, you know, those that are
[28:01] very very limited, but I know the big
[28:03] jump is going to be for those small
[28:05] business just we did have a few
[28:08] residents after we
[28:11] see this last year that were on higher
[28:15] meters that have come in and said, "I
[28:18] want to go down to a lower meter." So,
[28:20] we did have a few of those that went
[28:21] down to a lower meter. They probably
[28:24] didn't realize they were on a higher
[28:26] obviously
[28:28] be on a higher side. So
[28:31] >> yeah. So we have had some changes and
[28:33] fluctuations
[28:35] not.
[28:39] » Thank you.
[28:40] >> Oh yes sir.
[28:43] » All right. So with the proposed rates
[28:45] sort of in hand um we go back to the
[28:48] dashboard. Right. We've tinkered. We've
[28:50] retoled. And now we can make uh the
[28:54] bills, right? We were able to pay for
[28:56] our increasing expenses over time. We're
[28:59] able to hit a debt service coverage rate
[29:01] of better than one. Uh right now, I
[29:04] don't believe we have a bond covenant
[29:05] that requires that red line there, that
[29:08] 1.1. Um that's a target, not a mandate
[29:11] at the moment.
[29:12] um should your financial advisor or the
[29:14] next debt issuance have a hard and fast
[29:17] line then we we can't accept less than
[29:21] right so if 1.1 becomes the new floor
[29:23] we'll have to do a little more in 29 if
[29:26] all my other assumptions hold but I'm
[29:28] not assuming that at the moment uh
[29:30] especially if you're doing taxbacked
[29:32] debt uh oftentimes it doesn't carry that
[29:34] additional pledge because you have the
[29:36] full faith and credit of your taxing
[29:37] ability should you ever need to right
[29:40] and so um on a CO or certificate of
[29:43] obligation, it's very common that you
[29:45] would not have to have an additional
[29:46] revenue pledge above and beyond paying
[29:49] for operations and paying for the debt,
[29:51] right? Because you've got this backing
[29:53] of your tax ability, not that you plan
[29:56] to use taxes. Additionally, right now,
[29:59] uh, because we're on plan and because
[30:00] we're hitting debt service coverage and
[30:02] we're phasing in meters, you do see that
[30:05] in years three, four, and five, we start
[30:08] to actually build a little bit of a cash
[30:10] balance, right? We're not really
[30:12] trucking along. Our target there is 90
[30:14] days. So, it's not like
[30:16] we're not living paycheck to paycheck
[30:18] anymore, but we're also not playing bank
[30:20] and have two years of cash in the bank.
[30:22] That said, it's my full expectation by
[30:25] probably the end of next year and
[30:27] certainly by the end of 2030, uh, you,
[30:30] the engineers in your system, will
[30:32] probably have another need. Remember,
[30:34] I've only put in one big capital
[30:35] project. And the list is pretty
[30:38] substantial, 30 to 40 projects. They
[30:40] aren't all required today, but in the
[30:42] next three years, something else I
[30:44] assume will be identified. And so what I
[30:46] didn't do is I didn't lowball the
[30:48] outyear rate impacts because there's a
[30:50] good chance something's going to fill
[30:52] the additional surplus that that has. So
[30:55] again, you're not making decisions I
[30:57] think this year for 5 years later,
[30:58] probably just thinking 27 uh in this
[31:01] current budget. And so with a bit of a
[31:03] focus there, um but the plan as shown
[31:06] does work. We do continue to phase in uh
[31:08] the meter equivalency until we get to
[31:10] 100% in this plan.
[31:13] Um, so that's another uh next year if if
[31:16] it's me or Zach or team, that's the next
[31:19] step that's already on plan here is to
[31:21] continue phasing in our meter
[31:22] equivalency.
[31:28] With that, what does that mean to our
[31:29] resident, right? And and I can't talk
[31:31] about rate increases without thinking
[31:33] about your resident. Um, we feel for
[31:35] them. We know it hits hard, but your
[31:37] budget is taking a pretty big hit as
[31:40] well. Uh currently that typical bill at
[31:42] 55 5500 gallons is paying 5130 and we'll
[31:47] show you here in a bit that that's
[31:48] pretty low compared to the market
[31:50] already. Um and moving up to 69.26 is an
[31:55] increase of 1796,
[31:57] right? So roughly it's not technically
[31:59] $8 per service. Um so it's about 10 more
[32:02] on wastewater
[32:04] um and a little shy of that on water.
[32:08] But all in, it's a total bill impact of
[32:10] $18. And that's what most residents
[32:11] think about. What's my total change
[32:14] monthtomonth? The increases do level off
[32:17] a bit in the outy years. You see, we did
[32:19] bring those increases down. $11 yet
[32:22] again in 28, 1285, and 29. That is
[32:26] consistent with the year we have to make
[32:28] that first million dollar debt payment.
[32:31] uh and then we're able to taper off
[32:32] because we will have kept up with the
[32:34] debt but the rates we needed in place uh
[32:38] even with these smaller amounts you saw
[32:39] we we were able to build a little cash
[32:41] right
[32:43] so that's the residential rate impact
[32:45] commercial bill impact uh this is a
[32:48] substantial water user a 2-in meter and
[32:51] 75,000 gallons per month right so this
[32:54] isn't small commercial um that said
[32:57] currently they're paying about $926
[33:00] that goes up 357 about a 38% jump.
[33:04] Uh and we have some comparison slides on
[33:06] residential to go over. But
[33:09] >> if if we build wastewater based on water
[33:13] consumption, why isn't the increase
[33:15] proportional?
[33:18] >> And I'm sorry, if we build wastewater
[33:21] I'm sorry,
[33:21] >> based on water consumption, why is the increases why are they not
[33:26] proportional as you go up? Well, we
[33:28] actually put a little bit more on
[33:29] wastewater and in your rate design.
[33:32] >> When you look at the commercial, the
[33:34] wastewater, the green bar does not
[33:36] increase in the same proportion as the
[33:38] blue.
[33:39] >> Right. So, a couple things are
[33:40] different, right? We have different rate
[33:42] design. For starters, we're starting to
[33:44] charge in commercial for the first 3,000
[33:46] gallons. So, that's off the top. And
[33:48] then the unit rates vary. The next
[33:51] >> My understanding is the wastewater
[33:53] charge is based on the water
[33:55] consumption.
[33:56] >> It is. It is.
[33:57] >> So then why would it not be equal all
[33:59] the way across?
[34:00] >> Oh, and I think this is it, right? So
[34:02] you're taking Yes, sir. One key part of
[34:05] the formula is the consumption. But then
[34:07] that consumption goes through these
[34:09] scales which differ dramatically, right?
[34:11] No charge for the first three on the
[34:13] left, 81 cents on the right, 243 on the
[34:16] left for the next seven.
[34:17] >> So the waste water does not follow that
[34:19] same schedule.
[34:20] >> So in water, we're giving the first
[34:24] at the base rate. sewer.
[34:28] So,
[34:30] >> so the green bar should be larger than
[34:32] the blue bar
[34:38] because those are proportions
[34:41] at on the initial that's that's
[34:43] residential. You go to commercial.
[34:45] >> Yes, sir.
[34:46] >> So, if you look at the uh the green bar,
[34:48] it's less than the blue bar. yet we're
[34:51] given a 3,000galon credit for the blue.
[34:55] Why would the green not be larger?
[34:58] >> So it doesn't read this chart wrong.
[35:01] That's that's what I see.
[35:02] >> You are not, sir. But but if I were to
[35:04] put the two rates and and I
[35:06] unfortunately they're not parallel,
[35:07] right? I can't they don't line up well.
[35:09] But if you were to cross reference 0 to
[35:10] three on the left at nothing to 81
[35:13] cents.
[35:13] >> However, we do charge for sewage.
[35:15] >> You do per waste water.
[35:16] >> You do. And then 243 for the next seven,
[35:19] but then less for the next seven in
[35:21] wastewater. 8.91 for the next 15 and
[35:24] only 486.
[35:25] >> We do the same thing for residential.
[35:27] >> Yeah.
[35:30] >> The the the higher the water, the less
[35:32] the the waste water.
[35:33] >> Yeah.
[35:35] >> I mean, if we're doing that the same the
[35:37] same for residential
[35:40] >> that we're doing for commercial.
[35:41] >> Yeah. Well, residential and commercial
[35:44] are the same type,
[35:48] » right? But we're talking about
[35:50] discounts. You're saying that once they
[35:52] get to a certain point, it's less.
[35:55] That's what you just said.
[35:56] >> No. So, it's an inclining block rate.
[35:58] Um, and so, so again, on screen, the
[36:01] volumetric rates only go up. The more
[36:03] you use, the more you pay per unit.
[36:06] However,
[36:08] the current rate schedule and the
[36:10] proposed rate schedule, for instance, at
[36:12] the 50 to75 on water, you're paying 1134
[36:16] per unit. But in wastewater, that same
[36:20] amount is only 810 per unit,
[36:23] right? That's something that could be
[36:25] changed. But the one reason that could
[36:29] be the case is that the principle around
[36:31] peaking, right? The fixed infrastructure
[36:34] you have to build for high volumes of
[36:36] water is different than it is for
[36:39] wastewater. Wastewater really is general
[36:41] flow. Other than high strength
[36:43] customers, if you had any industrial
[36:44] customers with, you know, really bad
[36:46] waste water, it's actually a function of
[36:49] most flows are similar. But on the water
[36:52] side, as people get into those higher
[36:54] uses for any given day, you hit a peak
[36:58] day. And at some point, TCEQ says, "You
[37:01] have too much peak in your system.
[37:04] You're not supplying enough. You could
[37:05] even have pressure issues. I know the
[37:07] group back here could tell you better
[37:08] than I could because I've never been an
[37:09] operator." But at some point, you have
[37:11] to build additional capacity to meet
[37:14] that peak.
[37:15] >> So, pull up the commercial.
[37:16] >> Yes, sir.
[37:19] So this is doing the same thing.
[37:21] >> Yes sir. You are paying more for every
[37:23] unit of consumption but the rate for
[37:26] each K gallon or thousand of gallons is
[37:30] different between sewer and water. We
[37:31] could put those lock step but the the
[37:35] reasoning around that peak pricing for
[37:37] water is because it has a clearer
[37:42] relationship to the system demand.
[37:44] >> What comes in goes out.
[37:45] >> What's that?
[37:46] >> What comes in goes out.
[37:47] >> Yeah. Well, there's that
[37:48] >> theoretically.
[37:48] >> Yes, sir.
[37:49] >> Uh, okay. I mean, I'm just saying as
[37:52] long as they are the same, right? But
[37:54] when you look now, go to your your
[37:56] graph.
[37:56] >> Oh, yes, sir.
[37:57] >> Your bar chart. There you go.
[37:59] >> Commercial.
[37:59] >> If you start off with the commercial,
[38:01] the residential.
[38:02] >> Yes, sir.
[38:03] >> You see how the green is increasing more
[38:06] than the blue. Right now, you go to
[38:09] commercial. Look at that. It's not
[38:12] changing. Wastewater is not changing in
[38:14] comparison to the blue. It's also
[38:17] >> it's not it's not the same proportion.
[38:19] >> True. But if I were to scale this down,
[38:21] >> well, I'm just saying this does not look
[38:23] fair. That that's what I'm getting at.
[38:24] >> Okay. You just think wastewater should
[38:26] pay more.
[38:26] >> No, I'm just saying we should be paying
[38:28] the same thing because if you look at
[38:29] this graph here,
[38:30] >> look at residential versus
[38:32] >> the visual.
[38:33] >> Yeah. From a visual standpoint, it looks
[38:35] like res
[38:37] >> on on the on the wastewater.
[38:40] >> Okay. So, it's it's just how I'm going
[38:42] to take the money from your wallet. Am I
[38:44] going to take it, you know, directly
[38:45] from the front pocket or am I reach
[38:47] around for the for the wallet? And and
[38:50] when you look at the at the drawing, you
[38:53] know, the the wastewater is what I'm
[38:54] getting at.
[38:56] >> It's not in the same ratio as when you
[38:59] look at the commercial.
[39:00] >> You also have four res,
[39:04] >> but either way, it's still it's still
[39:06] who's paying the burden. It should be
[39:08] equal,
[39:09] >> right? If I were to
[39:10] >> If not, commercial should be actually it
[39:12] should be the opposite. commercials to
[39:13] be paid more than
[39:16] >> I mean we could come up with different
[39:17] commercial rates that
[39:19] >> I'm just trying right now I'm just
[39:20] trying to be fair based on what's being
[39:22] presented and I don't see that as being
[39:24] fair across the commercial versus the
[39:27] residential right
[39:28] >> taking into say could it also be that
[39:31] there are more residential than there
[39:32] are commercial
[39:33] >> absolutely
[39:34] >> that's why there there's higher green
[39:36] >> no that would the portions are still the
[39:39] same
[39:39] >> the ratio will not change based on the
[39:41] number of customers it's still the same.
[39:43] >> Yeah. The big difference is we're
[39:44] showing you a 75,000galon wastewater
[39:47] customer and then we're comparing it to
[39:49] a resident who's only got 5500 gallons
[39:52] of consumption. So if I wanted to show
[39:54] you more like for like on the green
[39:56] versus blue, then I could go to maybe
[39:59] it's AutoZone, maybe their usage is
[40:00] 5,500, right? Couple flushes and some
[40:03] cleanup. Um but if you had a commercial
[40:05] user with a 5/8 inch meter, they're
[40:08] still paying more, right? on their base
[40:11] charges.
[40:12] >> Not according to your chart.
[40:14] >> Well, that's a it's a
[40:16] >> different that's I mean I'm gonna get
[40:17] stuck on that. It's that scale. That's
[40:20] exactly what it's telling me.
[40:21] >> I wish you I wish you can move forward,
[40:23] but
[40:24] >> but here's Yeah, I know. I'm trying to I
[40:26] wish that it was it was in a different
[40:28] way. But here's here's in my math book.
[40:31] So look at take away the graphs. Okay.
[40:34] >> Take away the the the the Well, not not
[40:37] you per I mean just in here. Okay. I was
[40:40] like, "Okay, great."
[40:40] >> So, you're looking at this. Go ahead and
[40:42] put this one here. Go ahead res
[40:45] put it on there.
[40:46] >> Okay. And do the gap analysis so you can
[40:49] kind of figure out. Once again, I'm
[40:51] thinking in my head, and that could be
[40:52] dangerous, but I'm looking at the gap
[40:55] difference that you actually have
[40:56] between the two. So, when you look
[40:58] proportionally, look at the the the
[41:00] spread that you have. You're looking at
[41:02] about a $5, you know, in in the
[41:05] different increments, right?
[41:06] >> Mhm.
[41:07] >> You with me?
[41:08] >> Mhm.
[41:09] >> Okay. So now go ahead and put the
[41:10] commercial on there.
[41:11] >> Yes, sir.
[41:12] >> So when you do the analysis and now
[41:14] you're doing the spread, look at the
[41:15] difference between the spread.
[41:17] >> Right.
[41:19] >> So that's where it skews the it skews
[41:22] the the actual bar chart.
[41:25] >> So it's more about the gap and the
[41:27] spread. So I know what he's talking
[41:30] about.
[41:30] >> Sure.
[41:31] >> But just doing it I that's what you need
[41:34] to pay attention to. So you actually
[41:36] have a bigger spread. That's where the
[41:38] commercial side is going to be because
[41:41] of the gap.
[41:42] >> But based on our billing system, we
[41:44] don't look at that. Based on our billing
[41:46] system is what comes in goes out. That's
[41:49] the way it should be and that should be
[41:51] represented.
[41:53] >> But it shouldn't be that way. It's based
[41:54] on on volume.
[41:56] It's like we're like we're comparing a
[41:59] resident that uses 5500 compared to
[42:02] someone a user that's using 75,000. So I
[42:05] mean it's like if we'd have to find a
[42:07] commercial user that uses 5500 or closer
[42:10] to 5500 to really show a bar graph that
[42:12] makes sense.
[42:13] >> But that's the purpose of the visual bar
[42:15] graph is to show you the ratio the the comparison
[42:22] » look at it this way.
[42:23] >> Yeah. No, I I see the numbers there, but
[42:25] still it's it's if you look at the
[42:28] wastewater, it's not being built
[42:30] proportionate to the the water when you
[42:33] compared to the residential.
[42:35] >> Yeah.
[42:36] >> And that's what I'm getting at. It
[42:37] should be the same.
[42:38] >> Yeah. But that's that's what changed,
[42:41] >> right?
[42:42] >> But the volunte
[42:44] is the same.
[42:45] >> Yeah. I mean it is I mean
[42:46] >> but not the building part of it
[42:48] >> changing where nothing has changed
[42:51] what's being charged to the res.
[42:54] >> Yeah. We'll look we'll look at the the display. Okay. We'll come back. But
[43:00] >> yeah, you might need to get a fair
[43:01] analysis of of the difference between
[43:03] commercial and residential.
[43:04] >> Yeah. Let's just look at the display and
[43:06] just look at the gap analysis and do it
[43:09] as a proportional
[43:10] >> as close as you can get it.
[43:12] >> Yeah. Yeah.
[43:13] >> Just just look at that. I think we'll get what you know in a sense a
[43:17] little bit more better visual by being
[43:18] able to do that.
[43:19] >> Yeah. So
[43:20] >> be able to do Y.
[43:25] >> Okay.
[43:25] >> All right. Let's go ahead and uh let's
[43:28] go ahead and keep going.
[43:29] >> Yes, sir.
[43:30] >> Well, this is this is the one I kind of
[43:32] like in some ways, but not in other
[43:34] ways, but it's it's good.
[43:36] >> Fair. I think the residential regional
[43:38] comparison just so because this is where
[43:42] some of us as we go through this process
[43:44] are going to get approached by our
[43:45] residents and they're going to be asking
[43:47] >> and this is a good one where you can
[43:50] look and say hey let me tell you about
[43:52] folks around us and how we tie into that
[43:55] so
[43:56] >> absolutely right so currently we are
[43:59] winning quote I don't know we're we're
[44:01] at the bottom of the chart
[44:03] >> that's winning
[44:04] >> I say I say it in how you look at it
[44:06] Yeah, right.
[44:09] >> What are we doing?
[44:12] » Yeah. Sorry for the joke. I was kind of
[44:15] >> trying to playing off what the mayor
[44:16] said. Like this is a kind of a
[44:17] double-edged sword. We we aren't maybe
[44:20] charging enough for this service. And
[44:21] that was evidenced when we looked at the stability of the fund if we don't
[44:26] change rates. Period. And we have
[44:28] substantial increases coming. Million
[44:31] dollars more in debt on top of the
[44:32] 800,000 we already have. We've got to do
[44:35] something about that. Even with the
[44:38] proposed rate change in 27, now again, I
[44:40] had more rate increases proposed in the
[44:42] out years, but if this one change takes
[44:45] you from the bottom of this chart to the
[44:48] middle of the pack, and it's an
[44:50] important note, this is reflecting their
[44:52] current rates. San Antonio has already
[44:54] posted their proposed rates for the
[44:56] coming year. I didn't use them because
[44:58] it's not acted on yet. It's not adopted.
[45:00] And so you can go to their website, you
[45:02] can look up their rate schedule and you
[45:04] can find what they're going to charge
[45:05] next year. A lot of these communities
[45:07] may be looking at the same thing. A
[45:10] number of them as well, right? Helotees,
[45:12] Terrell Hills, and not Leon Valley,
[45:16] Castle Hills maybe. Oh yeah. Yeah,
[45:17] because they're all the same are the
[45:19] outside San Antonio rates. So they too
[45:21] will go up lock step. At least that's my
[45:24] understanding. I wasn't able to confirm
[45:25] with those cities, but they are outside
[45:27] the city and they're served by saws.
[45:32] Yeah. And and we did use the saws
[45:34] outside city rates.
[45:36] >> Yeah. Yeah.
[45:39] >> They don't have their own water. So they
[45:43] saw
[45:47] » Yeah. And some of those are already
[45:49] locked in. They can't grow anymore.
[45:53] Yeah. They're already limited. So, you
[45:55] know, in the sense of any
[45:57] infrastructure, it would just be the
[45:59] replacement. It wouldn't be for
[46:00] expansion
[46:02] >> as the other two. But you know the
[46:04] unique thing about it if you look and
[46:06] you look at the colors
[46:09] >> the same.
[46:10] >> No, look at the disproportionately go
[46:12] ahead and look at how much you actually
[46:14] have between the water and the
[46:15] wastewater. I mean look at the one on
[46:18] the top divine and and look which one is
[46:20] bigger than the others and you go down
[46:22] and compare the others. So that that
[46:24] also shows you where some of the other
[46:27] communities are having to spend a lot
[46:28] more money in one compared to the other.
[46:32] >> So it depends on their needs are what
[46:35] they express their capital.
[46:37] >> Yeah.
[46:38] >> So it's interesting to look at that and
[46:40] then look at our proposed one and you're
[46:44] like okay we're we're that's right in
[46:47] the middle and then in a sense it's kind
[46:48] of balanced a little bit you know based
[46:50] on the needs that we actually have. Um,
[46:54] so just a food for thought and a sense
[46:56] of consideration to try to take care.
[46:58] But
[46:59] >> would the average customer bill go up?
[47:05] >> Uh, we have that
[47:06] >> $7.
[47:08] >> Yeah. Yeah, we have that.
[47:10] >> Yeah. See, when I look at this graph, I
[47:12] see something different.
[47:12] >> Well, it' be it'd be more like $18
[47:15] total. Um, so that the question as to
[47:18] the typical
[47:19] >> Let's see what I see.
[47:21] >> There we go. I see income per capita.
[47:23] That's what I see. The differences
[47:26] >> income per capita.
[47:29] >> You're talking about Natalia versus
[47:31] Castle Hills. And and it's true. They are landlocked. They can't expand
[47:36] beyond, you know, their current
[47:38] boundary.
[47:39] >> Yeah. But some but hills, Castle Hill,
[47:42] all those are made by salt.
[47:45] >> Yeah.
[47:45] >> They are salt. So they are
[47:48] >> which is the other side of that factor.
[47:50] Yeah. So
[47:53] 6.5%.
[47:59] » Yeah.
[47:59] >> No, I mean I agree that the it needs to
[48:02] come up. I I I agree with with being for
[48:05] the proposed part is it's just I had
[48:08] said in a previous meeting the opposite
[48:10] is when I see that number and I'm
[48:13] deciding where to live is going to be my
[48:15] choice
[48:16] >> because they have a lower utility bill
[48:18] than say Castle Hill or or Natalia, you
[48:22] know, any of the other surrounding
[48:23] areas.
[48:24] >> Sure.
[48:24] >> But that doesn't mean that makes us
[48:27] uh efficient
[48:29] >> to say.
[48:30] >> Yes. Yeah. So, just back to Alderman
[48:32] Martinez's question, the the typical
[48:34] impact is $18 or $1796 more precisely
[48:37] when you do the water and the wastewater
[48:39] bill difference. Um, and then sort of
[48:42] dovetailing what San Antonio plans to
[48:44] do, you're off by what, 6 32 cents right
[48:47] now for Terrell Hills, Helert, and
[48:49] Castle Hills. If they go up by that
[48:51] 6.9%, you're immediately going to beat
[48:53] three other cities on this comparison.
[48:55] >> When everybody else recalibrates the 27,
[48:58] your 27 will be contrasted to theirs.
[49:00] And those three are likely going to be
[49:01] above you. Again, um we're still we're
[49:04] still in a lot. I mean, I don't want to
[49:06] get into other stuff, but don't I could
[49:09] easily say, let's compare ourselves with
[49:11] our property taxes. San Antonio to us,
[49:14] it's 98,
[49:15] >> right,
[49:15] >> in our tax rate. So, you can make it up
[49:18] in other ways to be able to say that
[49:19] this is a good place to live. The last
[49:21] thing I want to put on this and and the
[49:23] council I want to say take the time to
[49:25] say thanks to public works to Zach uh
[49:28] all of our folks in here because don't
[49:31] forget that before we could get here and
[49:34] Matthew being able to help us out with
[49:35] this is we were dealing with that there
[49:40] was no way we could figure this out
[49:42] unless we took care because we didn't
[49:44] know how much water we were actually
[49:47] using and the consumption and
[49:49] everything. Now, now we're close. Now we
[49:53] can figure it out. And if people ask,
[49:55] hey, we worked on it. Now we have, it
[49:58] would be hard for us to make a decision
[50:00] and be very gray. Now we're a lot more
[50:02] black and white. So, this is a perfect
[50:04] time for us to go ahead and and start
[50:06] looking at this based on what we have in
[50:08] front of us.
[50:10] Great. And then while I showed this
[50:13] comparison, if you needed to be the top
[50:14] of this chart to provide safe and
[50:17] reliable clean water to your residents,
[50:19] I'd recommend you be at the top of this
[50:20] chart. Right? Comparisons aside, you got
[50:23] to do for your community what you have
[50:24] to do because they won't come if the
[50:26] rates low and the water's brown. All
[50:28] right? Uh so so that's your paramount
[50:31] responsibility is to make sure that
[50:33] you're providing safe and reliable water
[50:36] and wastewater services and and your
[50:38] team is doing that. So I'm not saying
[50:39] there's a problem. I'm just saying
[50:42] I think I think they'd be more upset
[50:44] with problems in your system than the
[50:46] increase needed which puts them back in
[50:48] parody with the rest of the community
[50:50] for similar services. So, it's not a
[50:52] great story to say we have an increase
[50:54] coming. It does help to show that we
[50:55] were behind and and to echo the mayor
[50:58] kudos to the team for effectively
[50:59] operating a barebones ship and keeping
[51:01] it afloat
[51:03] um and and doing so gracefully.
[51:09] anything else on the comparisons or the
[51:11] rate plan?
[51:13] Because the next slide really just kind
[51:15] of gets into some other things that you
[51:17] might consider. Um, this is now very
[51:19] forward-looking. It's not even the rate
[51:20] plan for 27. I've already said this
[51:23] once, maybe stop including volumes in
[51:26] the base.
[51:28] So, you'd start charging for those 3,000
[51:29] gallons. Um, you could reduce the number
[51:32] of tiers, maybe simplify a little bit.
[51:36] nothing you have to do. It's not that
[51:37] you're wrong today. These are just other
[51:39] rate design options. Um, and then you
[51:42] could mirror the commercial differential
[51:43] in the water minimums that you have in
[51:45] wastewater minimums. And I have a number
[51:47] of communities throughout the state that
[51:49] charge commercial more, not just because
[51:51] their meters are bigger, right? That
[51:54] that's equal, right? If you have a big
[51:55] residential meter, you're paying more,
[51:56] but because commercial can pay a little
[51:58] more. Um, and so I have more and more
[52:01] communities looking at that and making a
[52:04] decision to charge a differential. One
[52:06] presented this week was a 5%
[52:08] differential. All rates need to be 5%. I
[52:11] have another community that charges a
[52:12] 20% differential,
[52:15] right? And they have $2 billion in their
[52:18] CIP.
[52:20] So they're going to need the money and
[52:23] it's a huge community as you imagine,
[52:25] right? Um but there is a differential
[52:28] today on the rates and we're going to
[52:29] maintain that for commercial. So again
[52:31] we're not saying you have to do those
[52:32] things but to the point of the balloon
[52:35] how who pays what proportionality we
[52:38] need the same amount of money to operate
[52:40] the system safely. We could squeeze a
[52:42] little bit right and shift a little more
[52:44] of the burden to our commercial
[52:46] customers perhaps without breaking the
[52:47] bank for them which might ease the
[52:49] burden on our residents. That's a tough
[52:52] decision you'll make, but I can analyze
[52:54] it. If if you instruct Zach and team to
[52:56] look at it, we'll come back uh with some
[52:58] of those options in in future years. So,
[53:01] again, I wanted to paint a picture. This
[53:03] isn't the only plan.
[53:04] >> No, sir. This is these are some other
[53:06] things to consider in the future to
[53:07] mitigate the continued increases I've
[53:10] showed you.
[53:11] >> Uh past that, just want to say thank
[53:13] you. Uh but I'm happy to entertain any
[53:16] other questions or go back to slides
[53:18] that
[53:19] >> So I want to break down the uh the
[53:22] increase.
[53:23] >> Sure.
[53:23] >> Um
[53:25] what I don't see is I don't see numbers
[53:27] for the on and m in comparison to our
[53:31] current rates.
[53:34] » Do you mean the actual cost per year of
[53:37] your operating cost?
[53:38] >> Okay, I have that.
[53:43] anybody wants. I just don't have it all.
[53:45] I apologize. Let me grab that.
[53:49] I should have I could have shown that
[53:51] perhaps here on your cost projections.
[53:57] » So the rates that should keep take but
[54:00] just so the rates that we're actually
[54:01] adopting this is starting the next the
[54:03] next fiscal year.
[54:05] >> Yeah.
[54:05] >> So it go 27.
[54:11] » Yeah.
[54:13] be able to do that.
[54:17] >> So, your cost uh your operating cost in
[54:21] 2026 I show as being from a budget
[54:24] basis. Um included some onetime items
[54:26] about 1.9 million. Some of those onetime
[54:29] items are coming off. So 27 I'm showing
[54:31] 1.8 million.
[54:33] Uh so 1.845 845 in 2028, 1.906
[54:40] in 2029, 1.968
[54:43] in 2030, and 2.038.
[54:47] So, it's approximately $125,000
[54:50] more
[54:52] um
[54:53] than the 26 budget because you had some
[54:55] one-time monies, right? Uh the average
[54:58] rate of growth, again, we've already
[55:00] kind of discussed where those are.
[55:01] average increase all in is about 10.5%
[55:04] inclusive of debt but your on& and M is
[55:06] growing very slowly. Um I didn't go into
[55:08] all the the various factors but we could
[55:11] talk about the inflation factors applied
[55:13] a little bit if you want.
[55:14] >> No I want to focus on the debt service.
[55:17] So the comment was that because of the
[55:20] debt service is the
[55:23] emergency state of having to increase
[55:26] especially over the next 5year period.
[55:29] Uh this debt service the debt service
[55:32] was incurred to
[55:35] work on existing infrastructure or did
[55:39] it include future?
[55:42] >> You're talking about the one that was
[55:43] >> whatever debt service is being talked
[55:45] about as being part of the reason we
[55:48] have to increase the rates.
[55:49] >> Yeah. So the the increase uh the the
[55:53] increase that we just had was for the
[55:55] new well
[55:56] >> right. So that was the 5 million that we
[55:58] issued in 26. That's
[56:00] >> right. That's for future growth.
[56:02] >> Yes, that's for the future growth. Okay.
[56:05] Uh the 17 million that I think he that
[56:08] Matthew built in 1617 million that's
[56:11] shown on there uh is the projected debt
[56:14] service that is for the wastewater
[56:17] treatment plan.
[56:17] >> So if you notice that
[56:19] >> that's now that's going to be for
[56:21] enhancements of our current
[56:22] >> that is for to make the the growth
[56:25] that's the
[56:27] plans for but don't have.
[56:28] >> So when we took out these these debts,
[56:31] did we tell the taxpayer we were going
[56:33] to charge them on their utility to be
[56:35] able to pay these off?
[56:36] >> No. So when well the original the debt
[56:38] that we just um debt that we just issued
[56:42] was uh obviously under a co. So it was
[56:46] the idea that um it could be covered
[56:49] without distribution taxes but
[56:52] >> that and and and connection fees or
[56:55] whatever those tap fees
[56:58] >> right
[56:58] >> impact impact
[56:59] >> impact. There you go. Thank you. So
[57:00] which are only paid by the developers of
[57:03] new development
[57:04] >> but that's the purpose of the impact fee
[57:06] is to pay for any future growth
[57:09] >> which should not be a burden of the
[57:11] current citizens.
[57:12] >> That's great.
[57:12] >> Right.
[57:13] >> So this debt service that I keep hearing
[57:15] about this is debt service that we're
[57:18] incurring because of the the growth of
[57:20] lid
[57:21] >> but yet we're having our current utility
[57:23] customers paying this.
[57:25] >> Yeah.
[57:26] Right. So 12in line CO
[57:30] >> that was CO
[57:31] >> that should have been installed when HB
[57:32] came along
[57:33] >> right but when we took out these these
[57:36] certificates of of debt or whatever it's
[57:38] called
[57:39] >> we did not inform the the general public
[57:42] that it was going to be taken out of the
[57:43] utility that they were going to have to
[57:45] pay for through the utility.
[57:47] >> So a portion of it from the utility but
[57:50] a portion of it in a sense
[57:51] >> but is that what we what we expressed to
[57:53] them when when we had the the public
[57:55] meetings? Yes,
[57:56] >> we told them that these these debts that
[57:59] we're incurring are going to be part of
[58:00] your utility bill.
[58:01] >> So, just think about it. I mean, what
[58:03] are we actually
[58:03] >> No, I I know how we can come about
[58:06] paying for it. But what I'm getting at
[58:09] is that we should not be taxing our
[58:13] residents for future growth. That needs
[58:16] to come through
[58:18] uh
[58:19] >> I I guess budgeting.
[58:20] >> So, I don't think here here's the thing.
[58:22] I don't think we obviously I wasn't here
[58:24] when we issued the original scale and
[58:27] that was for the 12 inch line the
[58:29] elevated tank
[58:31] >> right the booster station that right um
[58:34] I I can't say that we probably
[58:37] explicitly sat here as a council or the
[58:39] council at that time said hey be
[58:42] prepared your rates are going to
[58:43] increase because of this like normally
[58:44] that doesn't happen we didn't I know for
[58:47] a fact we didn't do that with the de
[58:49] just issue but I think it's uh We we
[58:52] notice that we send out notifications
[58:54] send out you know we have a you know
[58:57] that hey we're issuing these projects
[58:59] this debt is being issued it's kind of a
[59:01] >> right and that's why we took out bonds.
[59:03] >> Yeah I mean
[59:04] >> but the bonds were not going to be t
[59:06] they weren't earmarked to be paid by the
[59:09] utility bills
[59:10] >> but
[59:11] >> so let me let me just hold on and just
[59:13] so we can go ahead and take care of this
[59:15] stuff uh because we got to do that. So,
[59:17] just an example, here's the table.
[59:21] For years and years and years and years,
[59:24] water-wise, we've been down here.
[59:28] >> The city has been covering the gap from
[59:30] here to here,
[59:31] >> right now. We need to make up for that.
[59:33] That's that's that's without being said.
[59:34] >> Yeah.
[59:35] >> We have to make up for that.
[59:36] >> So, all those that we've been there. So,
[59:40] two of these projects directly fall into
[59:43] that being able to do that. the rates
[59:46] that we were charging and that we've
[59:48] been here in a sense where the council
[59:50] said, "Well, we don't want to burden the
[59:53] folks and we stayed down here." The next
[59:56] thing that came up was, "Well, we don't
[59:58] know how much of a gap it is. Let's
[1:00:00] figure that one out before we decide
[1:00:01] where the line is and we got to start
[1:00:03] going above it." So, for years and
[1:00:06] years, we've been down here and we've
[1:00:08] never elevated ourselves. So technically
[1:00:12] some of this this CO is things that we
[1:00:14] should have done down here. We should
[1:00:17] have actually if if we would have
[1:00:19] increased our rates at at this timeline
[1:00:22] we would have never had the cos
[1:00:26] >> because it would have been increasing
[1:00:27] year
[1:00:29] but I mean I'll express it as finance
[1:00:38] » you're
[1:00:40] coming these meetings for 27 years
[1:00:43] >> and u I've heard this,
[1:00:47] you know, over and over again that we
[1:00:49] need to increase our rates and uh and
[1:00:53] then normally we we don't ever go along
[1:00:55] with whatever whatever company. That's
[1:00:58] just my opinion as a citizen, not but we don't go along with whatever we we
[1:01:02] say, well, we're going to do a little of
[1:01:04] and then several years later, we're
[1:01:06] right back in the same boat. I just I
[1:01:08] mean, I could pretty much give this same
[1:01:10] thing without his numbers for what he's
[1:01:12] talking about. So I So like as the mayor
[1:01:14] was saying, this has been ongoing.
[1:01:18] It's it's it's just never really we kind
[1:01:20] of not y'all, not us. You've done it to
[1:01:23] protect people like me, the people
[1:01:24] paying the bill, but it's really we're
[1:01:27] just being kicking the can down the
[1:01:29] road. That's just my input is, you know,
[1:01:32] from being here and listening.
[1:01:33] >> Makes sense. I mean, he's the president,
[1:01:34] right?
[1:01:36] >> Yeah. But the resident should not be
[1:01:37] paying for future grill. That's that's
[1:01:39] what I'm getting at.
[1:01:41] and and and I don't know if it's legal
[1:01:43] or not if we can actually charge a a
[1:01:46] current utility customer for future
[1:01:49] growth.
[1:01:49] >> So, let me let me ask I'm going to turn
[1:01:51] it around. I'm going to put my other hat
[1:01:52] on. So, how can the city go back and ask
[1:01:57] for the residents to cover all this when
[1:02:00] they never made?
[1:02:02] >> Yeah, but where
[1:02:02] >> I mean that that's that that was my
[1:02:04] original question based on and M where
[1:02:06] are we at? And then we need to also go
[1:02:08] over like at least 5% or whatever the
[1:02:11] percentage is go over that to make sure
[1:02:13] we have enough money to cover current
[1:02:15] infrastructure.
[1:02:16] >> I guess my my question would be for that
[1:02:18] debt payment right for the principal and
[1:02:20] interest on those cos like next year and
[1:02:23] we were going to get into it with the water but I mean that's even next
[1:02:27] year alone it's just shy of a million
[1:02:29] dollar payment for princip and what I'm
[1:02:31] getting at pay that out of
[1:02:33] >> this increase is not uncalled for. Yeah.
[1:02:36] >> Okay. And and no in no time did I say we
[1:02:39] should not do this increase. Yeah. What
[1:02:41] I'm getting at is that this utility rate
[1:02:44] increase should be based on what the
[1:02:46] mayor is saying,
[1:02:47] >> based on what our our future
[1:02:49] infrastructure, current infrastructure
[1:02:51] needs to be able to maintain it, but it
[1:02:54] should not include paying debt. That's
[1:02:56] something that we took out in order to
[1:02:59] bring in these new subdivisions. But
[1:03:02] they're
[1:03:02] >> and we never told the the the general
[1:03:04] public that your utility bill is going
[1:03:06] to go up to be paying for these.
[1:03:07] >> But our current customers are going to
[1:03:09] be benefiting off of the new
[1:03:10] >> they won't and everything.
[1:03:12] >> The thing is they won't benefit from
[1:03:14] that.
[1:03:14] >> It's not going to the same sewer. It's
[1:03:16] all going the booster pumps. They're
[1:03:18] going to be more water.
[1:03:20] >> It's actually going to handle the the
[1:03:21] additional customer population.
[1:03:23] >> I know. So So they're going to be
[1:03:25] benefiting off the same thing. So yes,
[1:03:27] they should have to
[1:03:29] pay for, you know, bigger and better
[1:03:32] growth of vital because they're going to
[1:03:34] be benefiting off the same stuff that
[1:03:36] everybody else is. If you're a new
[1:03:37] customer or not or a new resident or
[1:03:39] not, everybody's benefiting off the same
[1:03:41] thing. So it it all falls into one like
[1:03:44] one big hat because everybody is g
[1:03:47] again, everybody's benefiting off the
[1:03:48] same. If we put a new booster plant, if
[1:03:50] we put a bigger sewer, you know, it's
[1:03:52] not, oh, the old customer sewer is going
[1:03:54] to go to the left and then who's going
[1:03:55] to go to the right. It all goes to the
[1:03:57] middle. So, they're going to be
[1:03:58] benefiting off of that.
[1:04:00] >> Isn't it implied by calling yourself a
[1:04:02] city resident that uh any bills like
[1:04:06] this you pay are for the general good
[1:04:09] >> of everybody,
[1:04:09] >> both now and in the foreseeable future.
[1:04:12] I mean, what is our
[1:04:13] >> we if we do nothing and we need to put
[1:04:15] in a new water tower all of a sudden and
[1:04:18] in the future it's going to be $8
[1:04:20] million
[1:04:21] our model.
[1:04:23] >> So you want to grow, right?
[1:04:24] >> Yeah, we're on the grow. So I think it's
[1:04:26] implied in being a resident that
[1:04:28] residents help with the growth and
[1:04:30] development of the city
[1:04:32] >> and and we have more we have more
[1:04:34] commercials coming in, right? We have
[1:04:36] that's going to help also
[1:04:38] >> the developers do pay their portions,
[1:04:40] >> right? And they should only pay I mean
[1:04:43] it's only going to pay for that specific
[1:04:45] impact you know for that elequ
[1:05:02] » if you're putting the soap box there I
[1:05:04] will stand on
[1:05:04] >> you go ahead former finance director
[1:05:08] >> but see I don't know where you stand
[1:05:09] with your engineers and your impact
[1:05:10] process. Of course, Zach had to listen
[1:05:12] to this at a conference and he had to
[1:05:14] listen to it at a conference call, but
[1:05:16] I'm going to just quickly I say educate
[1:05:18] you because I don't know if you know the
[1:05:20] depth of the impact fees, but if you're
[1:05:22] looking at impact fees and if you as a
[1:05:24] council say growth should pay for
[1:05:26] growth, impact fees are governed by
[1:05:28] local government code chapter 395. In
[1:05:30] that it says you need an engineer, not
[1:05:32] Matthew, not New Jen because I'm not
[1:05:33] one, to give you land use assumptions
[1:05:35] and CIP, right? You stack them up
[1:05:37] differently. You've got a numerator of
[1:05:38] CIP over units of growth. It then says
[1:05:42] you have to give them a credit equal to
[1:05:44] 50% of that. So inherently the statute
[1:05:47] says growth can't pay for all of growth.
[1:05:50] However, and this is not a purposeful
[1:05:52] commercial, but one thing I do in Austin
[1:05:56] and Fort Worth and McKenna and a number
[1:05:57] of other communities is a credit
[1:05:59] calculation. And the credit calculation
[1:06:02] in statute says you can do 50% of their
[1:06:05] cost, the growth cost, or you can do a
[1:06:08] financial calculation that allows you to
[1:06:10] achieve better than 50% from growth. So
[1:06:14] in all my communities that are growing
[1:06:16] and blowing and have the sentiment that
[1:06:18] I've heard from you,
[1:06:20] >> better than 50%.
[1:06:21] >> Well, actually just the opposite because
[1:06:24] the the 50% method cuts you at half. A
[1:06:27] finance credit calc usually lands you at
[1:06:29] growth paying for more like 60 to 75%.
[1:06:33] Right? And so didn't mean it to be a
[1:06:35] commercial, but I want you to know in
[1:06:36] the statute, you're not limited to a 50%
[1:06:39] of the impact fee. That's one of two
[1:06:42] credit methodologies.
[1:06:44] And should you want during that study to
[1:06:46] look at a credit calculation, we can
[1:06:48] bolt on to most any engineer and do
[1:06:50] that. Um, and without knowing everything
[1:06:53] you're doing, are you doing roadway?
[1:06:56] So, just water and waste water. So, I
[1:06:58] could do that probably for $25,000. Come
[1:07:01] present on it.
[1:07:02] >> And honestly, it pays for itself in the
[1:07:05] first 25 homes.
[1:07:07] Um, so again, it it sounds like a
[1:07:10] commercial. You have to update every 5
[1:07:12] years, but I have so many communities
[1:07:14] and so many councils that don't
[1:07:15] understand that part of the statute that
[1:07:17] they blindly accept 50% when they could
[1:07:19] be getting near twothirds of the cost
[1:07:21] paid by growth. So, thank you. Sorry,
[1:07:23] stepping down. Um, we presented this
[1:07:26] soap box went away.
[1:07:27] >> Yeah. Yeah,
[1:07:28] >> that soap box is taken away.
[1:07:30] >> Sorry. Sorry. Kicked it.
[1:07:31] >> So, I know we have a lot and we got
[1:07:34] different things. Um, let's go ahead and save some of the thoughts and let's
[1:07:38] go ahead and continue on and let's
[1:07:39] finish up with the other stuff. Sure.
[1:07:41] So, we can go ahead and
[1:07:42] >> So, he's going to go back right and
[1:07:44] you're going to bring us some more info
[1:07:46] on the wastewater on the he's talking
[1:07:49] about and stuff. So, we'll come back to
[1:07:51] this.
[1:07:51] >> We need some direction. Obviously, we
[1:07:53] need to make some decisions pretty
[1:07:54] quickly to meet some of the, you know,
[1:07:56] the statuto requirements for public
[1:07:58] hearing, that kind of stuff.
[1:07:59] >> So, if he can get what what Councilman
[1:08:01] Rodriguez is asking for, right?
[1:08:03] >> Specifically, the things that y'all are
[1:08:04] wanting to see,
[1:08:06] you know, be happy to to get with
[1:08:08] Matthew.
[1:08:10] Obviously, it's a little cheaper if I go
[1:08:12] ahead and he gives me the presentation
[1:08:14] next time and I can present that to
[1:08:16] y'all or whatever. We can save some cost
[1:08:19] next time.
[1:08:19] >> I'm good. I'm good for that, you know,
[1:08:21] and think, you know, if y'all are
[1:08:23] comfortable with that after we get some
[1:08:25] of that from him. But
[1:08:26] >> the timeline that we actually have to go
[1:08:28] ahead and implement this,
[1:08:30] >> we we're still okay. Uh it probably
[1:08:32] would be um uh we might have to push it
[1:08:35] to the the second one in September, but
[1:08:37] it might come right after the budget,
[1:08:39] you know, which is okay. So hopefully
[1:08:42] >> the decision that you're looking for for
[1:08:44] this is whether or not we want to go
[1:08:46] ahead and do the proposed. I I mean, we definitely want to see if there's any
[1:08:50] additional information that y'all need
[1:08:52] to be able to feel comfortable with the
[1:08:54] rate that's being proposed uh on the
[1:08:57] water and wastewater. Uh if y'all are
[1:08:59] comfortable with that or if you'll need
[1:09:01] any more information so Matthew and his
[1:09:03] team can process that. If not, then
[1:09:05] that's obviously what we're going to
[1:09:06] proceed with and and we'll start working
[1:09:09] on what we do. That's so I'm I'm gonna
[1:09:14] again get him to speak with me. I know
[1:09:15] he asked for some more info, but with
[1:09:17] seeing what he's presented and, you
[1:09:20] know, your example of the bar and being
[1:09:22] below, I I feel that we need to go ahead
[1:09:24] and make a decision to go ahead and
[1:09:26] increase it now versus waiting for
[1:09:29] another two weeks and then trying to get
[1:09:32] it in and rushing and trying to put it
[1:09:35] out for the public to hear. I I I think
[1:09:36] we need to do it now. I mean, it it $18
[1:09:40] for some people, it's a lot of money,
[1:09:42] right? We understand that. But the city
[1:09:44] can't keep taking all of that burden on
[1:09:48] or we're just going to keep falling and falling and never be able to
[1:09:51] catch up or get in.
[1:09:54] >> So,
[1:09:55] uh, special. So, this is So, this is not
[1:09:58] considered a workshop.
[1:10:00] >> Yeah, just I've seen
[1:10:02] >> Yeah. Well, it's not it's they won't
[1:10:04] have it listed as a as a workshop. It's
[1:10:06] listed as a special meeting, right? So,
[1:10:09] I think with that we do need a vote. I
[1:10:12] think we need to go ahead and vote.
[1:10:14] >> So then would I make a motion to go
[1:10:15] ahead and approve the rate increase for
[1:10:18] the new fiscal year for the what is it?
[1:10:21] >> Water.
[1:10:23] >> Yeah, I would say I would say go ahead
[1:10:25] and direct staff because obviously we'll
[1:10:27] have to actually have
[1:10:29] all that kind of stuff. So I would just
[1:10:32] >> go ahead and Yeah, direct staff to go
[1:10:34] ahead and go with the proposed and go
[1:10:35] ahead and mention it. It's a 33.08.
[1:10:38] That's what you're actually looking for.
[1:10:40] uh be
[1:10:41] >> so when he comes back it will resemble
[1:10:43] right kind of more the the nitty-gritty
[1:10:45] the actual charges by type and class.
[1:10:47] >> Okay. Yes sir.
[1:10:48] >> Okay. I just want to make sure.
[1:10:50] >> Yeah.
[1:10:50] >> So you'll have you'll have all different
[1:10:53] rates based on the meter size.
[1:10:55] >> Okay. Got it. Got it.
[1:10:56] >> I would say based on the proposal.
[1:10:59] >> Yeah. Proposed. So go ahead and direct
[1:11:01] staff to go ahead and
[1:11:03] >> start working on what needs to get done
[1:11:05] >> for the rate proposal that was presented
[1:11:08] tonight.
[1:11:08] >> Residential and commercial. residential
[1:11:09] and commercial for the 12th of August.
[1:11:12] >> So if we approve it, there's no way we
[1:11:14] can go lower on it. Um we can when we
[1:11:19] present it.
[1:11:20] >> So let me let me hold off hold up right
[1:11:21] now. We'll go into discussion. Do I have
[1:11:23] another motion? Do I have a second
[1:11:24] motion on that?
[1:11:25] >> I can do it. You said fourth of August
[1:11:28] 12th.
[1:11:30] I was presented today at the 12th of
[1:11:31] August.
[1:11:32] >> Okay. So I got a motion now discussion.
[1:11:34] Here we go. Go ahead.
[1:11:36] >> Oh yeah. I'm just saying if if they
[1:11:38] approve it, but we able to just say for some reason it's too much, we go uh
[1:11:45] so you say the 33, we do 30. Can it
[1:11:49] still be u so when when I when I what
[1:11:54] I'm going to do based on that if that is
[1:11:55] the vote ultimately if if the majority
[1:11:58] passes that direction tonight, I'm going
[1:12:01] to start working on getting it set for
[1:12:04] that proposal and bring it forth. And if
[1:12:06] you all choose at that time after you
[1:12:08] know chewing it over and looking at you
[1:12:10] think hey actually on second thought we
[1:12:12] want to go down a little bit presented
[1:12:14] at that time then that's when we need to knock that down
[1:12:17] >> and and we also have the public hearings
[1:12:19] >> correct
[1:12:20] >> so we would have public hearings
[1:12:21] involved with that.
[1:12:22] >> So the current rate proposal increase is
[1:12:25] 35%.
[1:12:26] >> Yes.
[1:12:29] » Okay. Anything else for discussion?
[1:12:33] Okay. All those in favor?
[1:12:38] » One, two, three, four. Okay. Nace.
[1:12:43] >> Hi.
[1:12:44] >> Got it. Okay.
[1:12:47] So, let's continue our work with that.
[1:12:49] We'll take the next phase and uh
[1:12:55] » thank you for your presentation, sir. Go
[1:12:57] ahead and take the next
[1:13:00] >> the next step. So, we can go ahead and
[1:13:01] further do that. All right. Thank you,
[1:13:04] sir.
[1:13:05] >> Thank you very much.
[1:13:05] >> Appreciate it. Please look at those
[1:13:07] numbers so we can go ahead and get make
[1:13:10] sure that we can take care of the uh the
[1:13:13] uh Mr. Rodriguez's, you know, the the
[1:13:16] proportional portion.
[1:13:17] >> I'll follow if you're up on what we
[1:13:20] need.
[1:13:20] >> Yep.
[1:13:21] >> Okay.
[1:13:21] >> So much.
[1:13:22] >> Appreciate that.
[1:13:23] >> All right, Zach. Tech, here we go.
[1:13:27] >> All right. Uh so the worksheet uh was
[1:13:31] included uh on the dis there for y'all.
[1:13:33] Uh this uh nice little packet here. Uh
[1:13:37] it says 2026 tax rate calculation
[1:13:40] worksheet. Uh I'm really just going to
[1:13:42] call y'all's attention to the very back
[1:13:45] um page which has uh Loretta Holly's uh
[1:13:50] signature on the very back. So last last
[1:13:52] page. Um so you'll see there uh that is
[1:13:57] uh shows the no new revenue tax rate the
[1:14:00] voter approval tax rate and the
[1:14:02] dimminimous tax rate and then
[1:14:08] she left this sheet uh as well maybe in
[1:14:12] color maybe not I don't remember
[1:14:15] >> maybe not yeah okay um and so that just
[1:14:18] shows some additional uh breakdowns of
[1:14:20] what that would look like Um so
[1:14:25] um obviously the uh no new revenue rate
[1:14:30] uh is slightly lower than our uh current
[1:14:34] uh tax rate. Uh and then uh the voter
[1:14:37] approval rate uh is obviously a little
[1:14:40] bit higher um than that. um staff. Uh
[1:14:45] just as we have in the last couple
[1:14:47] years, we are recommending to take it um
[1:14:50] up to uh just right below the voter
[1:14:54] approval rate. Um so that way uh we're
[1:14:58] not going over the voter approval rate.
[1:15:00] Um but uh and that number is what is uh
[1:15:03] currently been built in um to the
[1:15:06] numbers uh within the the changes that
[1:15:08] we've made on the the budget. So that
[1:15:10] would be the uh 485
[1:15:13] Um and that is shown on the
[1:15:15] >> uh
[1:15:16] total
[1:15:17] >> approval
[1:15:18] >> total tax rate here. Uh so the the voter
[1:15:21] approval is
[1:15:22] >> 485025.
[1:15:24] So we're just taking that 025 off
[1:15:26] basically.
[1:15:28] >> Um
[1:15:28] >> so 485.
[1:15:31] >> Yeah.
[1:15:33] >> Um the uh kind of just to go over some
[1:15:36] other numbers on here uh on on the sheet
[1:15:38] that um Ivonne had kind of produced for
[1:15:41] y'all. uh the total taxable number at
[1:15:43] the very top uh corner uh that is the
[1:15:46] total certified value number that uh we
[1:15:49] got from all three tax entities. Um and
[1:15:55] uh then you'll see the the three uh
[1:15:58] again the three current the no new
[1:16:00] revenue the the voter approval rate uh
[1:16:03] what the staff again is recommending and
[1:16:06] then just some breakdowns on uh on some
[1:16:08] home valuations. So, two, you know, on a
[1:16:10] 200,000, $250,000, a $300,000 um
[1:16:14] valuation home, what those um rates
[1:16:18] would look like for those uh homeowners
[1:16:20] uh with those valuations. So, uh which
[1:16:23] is something that um if y'all recall
[1:16:25] last year, we had to the tax
[1:16:29] uh code changed where we have to show
[1:16:31] kind of like a taxpayer statement. Now
[1:16:34] when we produce the agenda when we go
[1:16:36] for budget uh next uh when we adopt the
[1:16:39] budget uh next time we actually have to
[1:16:40] put a taxpayer statement where it shows
[1:16:42] how it would impact homeowners of a
[1:16:45] certain thing. So this is very key
[1:16:47] information uh to to produce out there
[1:16:49] and and it also helps if you know
[1:16:52] depending on which direction council
[1:16:53] takes when you're talking to people if
[1:16:55] you get asked too. So what that would
[1:16:57] look like.
[1:16:59] >> So I'm looking at both but I want to
[1:17:02] make sure. So our current rate is that
[1:17:05] one.
[1:17:05] >> Our current rate is
[1:17:07] >> 43
[1:17:08] >> 439 439.
[1:17:10] >> Okay.
[1:17:11] >> The no new revenue uh is proposed at
[1:17:14] 409. So that would mean that if we
[1:17:16] adopted that that's that's us saying
[1:17:18] we're not bringing in any additional.
[1:17:21] We're not bringing anything more or
[1:17:23] less. We're just
[1:17:24] >> So that's just so you get confused.
[1:17:26] Don't look at the one that is up here on
[1:17:29] the left. Look at down here for the
[1:17:31] current. Okay. So it doesn't confuse you
[1:17:34] with So it's literally So it's a
[1:17:38] 43 going to a 48, right?
[1:17:42] >> That's what staff is recommending, but
[1:17:44] of course that is totally up to council.
[1:17:47] Um
[1:17:47] >> well, if we go above that, it needs to
[1:17:49] go out for
[1:17:49] >> if you go above that, which obviously I
[1:17:52] would never suggest to do, uh we'll need
[1:17:55] to go out for a vote. Uh and then I
[1:17:59] don't even know what that even that
[1:18:00] looks like. I've never done that. So,
[1:18:02] um, yeah, unless you're adopting the
[1:18:04] dimminimous rate, which I don't even
[1:18:06] know how to do that either. So, I
[1:18:07] wouldn't even start that process.
[1:18:11] I don't even want to talk about that.
[1:18:13] That's uh Yeah. and you and they're
[1:18:16] recommending this increase because
[1:18:20] >> um well I mean we can get into the
[1:18:22] budget but with the increases that we've
[1:18:24] seen from expenses and things like that
[1:18:28] I mean just overall we're just
[1:18:29] suggesting
[1:18:31] >> um you know we've
[1:18:33] >> I know when we talked about the audit
[1:18:35] this last year and I I know the auditor
[1:18:37] had said you know the general fund took
[1:18:38] a big hit right so um we're we're trying
[1:18:42] to we're trying to replenish the general
[1:18:44] fun. We're trying to get Yeah. I mean,
[1:18:46] there's certain things we're we're
[1:18:47] really trying to replenish, right? Um so
[1:18:50] based on expenses, things are costing a
[1:18:52] heck of a lot more nowadays, right? Um
[1:18:54] and it sucks.
[1:18:56] >> Um salaries. Uh so that's where we we
[1:19:00] think, but um obviously it is a council
[1:19:03] decision. It is something that you know,
[1:19:04] but the other thing is is
[1:19:07] what would happen is we need direction
[1:19:09] to go ahead and propose a tax rate. I
[1:19:11] always suggest going with you can
[1:19:14] propose higher and come down. You can't
[1:19:18] propose lower and go up. So again, kind
[1:19:22] of to the last conversation, but this is
[1:19:24] a little different. You can always
[1:19:25] propose high and go down. So, um I I
[1:19:29] would suggest go ahead and we propose
[1:19:33] the voter approval and then if we come
[1:19:36] to that tax rate setting hearing and we
[1:19:39] s we think, okay, we're actually
[1:19:41] comfortable with something a little
[1:19:42] less, then we can adopt something a
[1:19:44] little less. So,
[1:19:47] >> so with that in mind, council,
[1:19:50] >> do you need a motion on this?
[1:19:51] >> Yes, sir. I'll make a motion that we set
[1:19:54] the tax rate for a year at 0.485.
[1:20:02] » I'll go ahead and may a second. Okay.
[1:20:05] Any discussion on that? We need
[1:20:09] >> this u additional revenues can be used
[1:20:12] to pay off our debts.
[1:20:18] » It goes at general fund. I mean it goes
[1:20:20] I mean it's going to increase general
[1:20:22] fund. Yeah.
[1:20:24] >> A portion a portion is um
[1:20:27] >> a portion of the tax rate is for INS and
[1:20:29] a portion of it is general fund. So a
[1:20:31] portion of the tax rate is debt service.
[1:20:34] So yeah
[1:20:35] >> right it is it is it is
[1:20:37] >> yeah.
[1:20:39] >> Okay. Any other questions? All those in
[1:20:42] favor?
[1:20:43] >> Any opposed?
[1:20:47] Okay. Appreciate that council.
[1:20:51] Okay. Uh let's go ahead and finish the
[1:20:53] last one which is other department
[1:20:56] changes.
[1:20:59] » I'll be start off the conversation with
[1:21:02] if she wants to jump in she can. Finance
[1:21:04] lady.
[1:21:05] >> Finance lady. Um so uh we're primarily
[1:21:10] going to um talk the last three kind of
[1:21:14] sheets here. the the summary and then
[1:21:16] the two kind of other other sheets.
[1:21:19] Yeah, y'alls are probably in maybe some
[1:21:23] >> Got it.
[1:21:23] >> Yeah. Um so again, we we went ahead and
[1:21:27] plugged in the um the tax rate that 485
[1:21:32] uh
[1:21:32] >> for this right here
[1:21:33] >> for this. So this is this is showing
[1:21:36] that 485. Uh we have kept the the 3%
[1:21:41] shown uh still in there.
[1:21:45] um for the salaries. Um and uh
[1:21:50] everything that we had agreed to at the
[1:21:53] last budget meeting um we have stuck
[1:21:57] with any of those unfunded requests were
[1:22:00] not put in. Unless we talked about it
[1:22:02] and agreed to it, we put it in. But
[1:22:06] anything that was not discuss or you
[1:22:08] know was not agreed to or still may
[1:22:10] remained unfunded we we did not put in.
[1:22:14] So generally where that kind of leaves
[1:22:16] you um I'll kind of walk through. So the FY 2627 budget line item or column
[1:22:23] is where I'm going to live on that
[1:22:25] summary page. Uh so your your difference
[1:22:29] in your general fund which again is
[1:22:31] going to make up most of your
[1:22:32] departments. It's your admin, your
[1:22:33] court, police department, parks, the
[1:22:35] newly created public works department,
[1:22:38] animal control, library, community
[1:22:40] center, and um obviously city council.
[1:22:43] Um so based on expenses and projected
[1:22:46] revenues, we are projecting a um a
[1:22:51] positive balance of 321,000.
[1:22:55] So in the positive, which is great. So,
[1:22:59] uh, especially again given where we were
[1:23:01] last year, we expended a lot of money
[1:23:02] out of the general fund and took our
[1:23:04] fund balance down quite considerably.
[1:23:06] So, that's that's a a huge positive.
[1:23:09] Um, debt service, uh, you see there the,
[1:23:14] uh, revenue and expense, a little bit of
[1:23:16] a positive there as well. Hotel, motel,
[1:23:20] uh, even uh, and then we get into kind
[1:23:23] of where we have issues.
[1:23:26] Uh and you know it kind of leads from
[1:23:28] our last conversation. Obviously we when
[1:23:30] it comes to utility um but you have your
[1:23:33] utility fund uh and your sewer fund.
[1:23:36] is doing pretty well.
[1:23:38] Our sewer has always done fairly well.
[1:23:41] Um the expenses stay pretty light
[1:23:44] normally in our sewer. Uh so we are in
[1:23:46] the positive in sewer at 280 or at least
[1:23:49] what we're we're projecting. Um, but our
[1:23:53] utility fund and honestly the largest
[1:23:55] percentage of where that uh in the red
[1:23:59] is coming from is
[1:24:02] that close to a million dollar payment
[1:24:04] from the uh the bond. So we're in the
[1:24:08] whole $1.6 $6 million in
[1:24:11] >> for the CO
[1:24:11] >> water.
[1:24:12] >> And most of that, obviously, a million
[1:24:14] of that is, you know, from the CO
[1:24:17] >> payments uh from uh the principal and
[1:24:21] the interest. Um Ivon and I have
[1:24:25] scratched our heads. We don't really
[1:24:26] know, we don't know what to do. Um, we
[1:24:31] provided both the water fund and the the
[1:24:35] sewer fund and that's what those other
[1:24:37] two are just so y'all can see. Um,
[1:24:39] honestly,
[1:24:41] it's going to come down to um we can
[1:24:44] obviously show um
[1:24:48] uh Ivonne probably won't like me saying
[1:24:49] this, but I don't know that we even said
[1:24:51] this. We can we can probably show um
[1:24:56] uh a um a negative, but the problem is
[1:24:59] going to be that um it it
[1:25:03] I it's going to turn into
[1:25:07] a matter of unless it's an absolute
[1:25:10] necessary purchase,
[1:25:14] it
[1:25:14] >> it's a no. I mean when it comes to the
[1:25:18] water at this point.
[1:25:19] >> So do these calculations include our
[1:25:22] proposed
[1:25:24] >> No, now we didn't have that. So there is
[1:25:26] going to be a little bit of a change in
[1:25:27] >> there is going to be a little bit jump.
[1:25:30] >> Say it's going to take at least one
[1:25:31] year, one cycle to get back in the
[1:25:34] positive.
[1:25:35] >> Yeah.
[1:25:35] >> So
[1:25:35] >> it's going to take a while.
[1:25:37] >> Well, one year after the next year, yes,
[1:25:40] we should be back up.
[1:25:42] So
[1:25:43] >> that's why I wasn't in disagreement with
[1:25:44] the rate increase. Yeah.
[1:25:46] >> Yeah. So, this definitely that will
[1:25:48] actually show on on that. So,
[1:25:52] >> yeah. So, that doesn't because we didn't
[1:25:54] have necessarily that we didn't know
[1:25:56] which direction y'all were going to
[1:25:57] take. So, we didn't have that at the
[1:25:58] time um built in. So, that that will be
[1:26:01] a change.
[1:26:02] >> I can tell you from the commercial side,
[1:26:03] there'll be a few of them that we will
[1:26:05] gain some good
[1:26:06] >> that will be a change. Um
[1:26:07] >> is this going to affect our city rating?
[1:26:10] It could. You talk about like our our um
[1:26:13] >> aa whatever we are.
[1:26:15] >> We were already affected once this last
[1:26:17] year and it very well could.
[1:26:20] >> Um
[1:26:22] it but it it honestly is going to be
[1:26:26] Yeah. I mean, it's going to be a matter
[1:26:27] of I know we we just, you know, talked
[1:26:29] about and I talked with the staff today
[1:26:31] about, you know, we're finally getting
[1:26:32] the credit cards and and it's great and
[1:26:34] all that, but it's honestly going to be
[1:26:36] like they're going to have to ask for
[1:26:38] permission before purchasing anything at
[1:26:40] this point because it's just a matter of
[1:26:43] >> cost. But we pretty much care everything
[1:26:46] for future.
[1:26:46] >> Yeah.
[1:26:49] Five years. Unless it's an
[1:26:51] absolute emergency or we have to have
[1:26:53] it, it's going to be, you know, I'm
[1:26:56] gonna have to tell them no.
[1:26:57] >> And when you think about it, when you
[1:26:59] think of the utility
[1:27:03] from from
[1:27:07] 2022
[1:27:09] to now, we have had some type of water
[1:27:14] project.
[1:27:15] >> Yeah.
[1:27:15] >> Or water.
[1:27:16] >> We pretty much take care of that now. So
[1:27:18] by now November right bush. So so now by
[1:27:24] November of this year technically all of
[1:27:28] our water projects everything that we're
[1:27:30] out there that's going to be taken care
[1:27:32] of. The only one thing that is going to
[1:27:34] be remaining is just going to be the
[1:27:36] waste water
[1:27:36] >> and it's starting.
[1:27:38] >> Yeah. So yeah. So in in some ways we
[1:27:41] have
[1:27:42] >> yeah we did incur but it honestly this
[1:27:45] stuff and once again I I got to
[1:27:48] emphasize especially with two of those
[1:27:49] projects two of those projects should
[1:27:52] have been long time ago. Yeah. You know
[1:27:54] why
[1:27:57] when when did they put the the booster
[1:27:59] stations out there? How many years ago?
[1:28:04] It was way before you. Right. So why why
[1:28:07] did they decide to do three instead of
[1:28:09] four? It's normally paired.
[1:28:12] You know, they went with that and now
[1:28:14] we're the ones having to deal with that.
[1:28:16] You also got to remember how much should
[1:28:18] we spend to cap well number three.
[1:28:20] >> Oh
[1:28:23] >> 150 200 something I don't know. Yeah.
[1:28:25] >> To cap the well
[1:28:27] studies.
[1:28:28] >> The well the well itself the well itself
[1:28:31] should have been capped back since 2009.
[1:28:34] at
[1:28:36] least.
[1:28:37] >> Yeah.
[1:28:38] Should have been capped. We had to
[1:28:40] absorb that, too. So, yeah. Right now,
[1:28:43] when you look at this Yeah. But I like
[1:28:46] to look back and say, "What have I
[1:28:47] done?"
[1:28:48] >> I agree.
[1:28:48] >> And and honestly, you know, I think
[1:28:51] we've done a lot. Yeah. It put us in a
[1:28:54] little bit of a tight spot, but we are
[1:28:56] going to be a lot better in the future
[1:28:57] because we took care of the stuff that
[1:28:59] needed to be done and we don't need to
[1:29:00] worry about asking the finance lady Ivon
[1:29:04] for additional funds to try to figure
[1:29:07] out how to take care of a water project.
[1:29:10] >> So, it'll it'll be it'll be it'll be
[1:29:14] better. It's going to be a lot better.
[1:29:15] The other thing I will note, we did uh
[1:29:18] we did remove
[1:29:20] um out of this to help alleviate some
[1:29:23] and I know it doesn't look like it
[1:29:24] because it's still 1.6. Uh but we did
[1:29:28] move um Pete uh Pete's salary into the
[1:29:32] public works budget to help. So that's
[1:29:34] been moved to the general fund. Um so
[1:29:37] his his salary has been moved over
[1:29:39] there. Obviously, we had talked about
[1:29:40] the the new truck
[1:29:42] >> purchase was already moved into the
[1:29:44] general fund because it can it has a
[1:29:45] little more flexibility to help support
[1:29:47] that and obviously we're still in the
[1:29:48] positive as seen as and talked about.
[1:29:51] So, um we've tried to be as strategic as
[1:29:55] possible, but yeah, it's um
[1:29:57] unfortunately it's just um until and and
[1:30:01] we've talked about it, but until some of
[1:30:02] these things that we've, you know, we're
[1:30:04] in negotiation with and we've talked
[1:30:06] about till they hit, we're just going to
[1:30:09] be unfortunately a little bare bones for
[1:30:11] a while and and we're just going to have
[1:30:12] to muddle through. So,
[1:30:14] >> and we'll just take care of be that way,
[1:30:16] but that's the way we got to be
[1:30:18] >> and we'll just be able to just
[1:30:20] >> it'll be okay.
[1:30:21] It'll be it'll be okay.
[1:30:23] >> So,
[1:30:24] >> we stay on top of
[1:30:26] >> Yeah.
[1:30:28] >> So, uh
[1:30:29] >> and you know, and honestly, I mean, I
[1:30:31] know
[1:30:34] I always I always dread the AP, you
[1:30:36] know, conversation at the council
[1:30:38] meeting because I know you're going to
[1:30:38] find something in there and I'm not
[1:30:40] going to have an answer to, but you
[1:30:41] know, call us out if you think there's
[1:30:43] something in there that doesn't make
[1:30:44] sense, you know. So, you know, and I
[1:30:47] know that's always after the fact, but
[1:30:48] still, I mean, it's, you know, things
[1:30:49] that we can
[1:30:50] >> put up
[1:30:53] that
[1:30:54] >> uh well, some some things were already
[1:30:56] going out, right? It's just a matter of
[1:30:59] um depending on what the services are um
[1:31:02] and the timing of it. So, it just I
[1:31:04] mean, if if you're asking something
[1:31:05] specifically, we can get offline and
[1:31:07] figure out and I can I can just little
[1:31:09] expensive talk like
[1:31:12] all that adds up.
[1:31:13] >> Well, we're bringing that in house.
[1:31:14] That's what I'm saying. So all that adds
[1:31:15] up protecting that, right?
[1:31:16] >> Yeah.
[1:31:17] >> You know, there's other little things
[1:31:19] that you know.
[1:31:23] » Yeah.
[1:31:23] >> That ends up also help.
[1:31:25] >> Yeah.
[1:31:27] >> Another I know they probably don't like
[1:31:30] me saying it, but another thing we've
[1:31:31] talked about and really on them about
[1:31:34] getting them tested so we can stop, you
[1:31:36] know, paying some guys, you know, to
[1:31:37] hold licenses, right? And and they're aware of those conversations.
[1:31:42] We've had that. So, I mean, that just
[1:31:43] helps, right? like we're we've had
[1:31:46] those. So, yeah.
[1:31:48] >> Yeah,
[1:31:50] it'll be good.
[1:31:52] >> Council, any questions on the actual
[1:31:56] changes or anything? Was there anything
[1:31:58] since we have the departments here? Was
[1:32:01] there any changes I on what they
[1:32:03] submitted and what they were asking for
[1:32:05] just to make sure we can get their
[1:32:07] input? I think we did we did make we did
[1:32:09] add chief's uh certificate, right?
[1:32:14] >> Oh yes.
[1:32:16] >> And then we looked on there. I think
[1:32:18] when we got the three things we talked
[1:32:21] about moving money
[1:32:25] >> anything that was agreed to council that
[1:32:27] night.
[1:32:31] » So we got we got Cassandra covered. send
[1:32:34] out we'll send out an updated one to
[1:32:38] everybody so they have that
[1:32:39] >> mayor ask you this there's something
[1:32:42] that that I see like hey you know what I don't think his salary
[1:32:48] fits that person or this can we do do I
[1:32:52] have to go and put them on the agenda
[1:32:54] and we talk about it or bring it up and
[1:32:57] say I recommend that you know of course
[1:32:59] I understand we're talking about money
[1:33:00] and we're we're in we're talking about
[1:33:03] But, you know, I think there should be
[1:33:04] an increase on this part or, you know,
[1:33:06] for a certain
[1:33:07] >> what I would what I would think would be
[1:33:08] good is is work it to where get Zach
[1:33:12] involved
[1:33:13] >> and we get an HR expert to come in. You
[1:33:16] know, not not charge a lot. Okay. Just a
[1:33:19] little bit.
[1:33:19] >> Well, I mean, even even going outside
[1:33:21] and seeing what other cities you could,
[1:33:24] you know,
[1:33:25] >> we need to see if we've we've
[1:33:26] participated in some salary surveys
[1:33:29] because other cities normally
[1:33:30] participate in them. And if we
[1:33:32] participate, we we can get they'll send
[1:33:35] us
[1:33:37] >> the results. You get access to the
[1:33:38] results, right?
[1:33:40] >> It goes across everybody,
[1:33:43] >> you know, public works or police
[1:33:44] department, the library. I'm just saying
[1:33:46] in general, just we have a great team.
[1:33:48] >> Yeah.
[1:33:48] >> Across the board with everybody we have,
[1:33:50] you know, and if there's things that we
[1:33:51] can do to help keep keep that going and
[1:33:54] yes, it does cost something high.
[1:33:56] >> Yeah. I do take, you know, from what
[1:33:59] Rich said the other day, you know, about
[1:34:02] >> family medical,
[1:34:03] >> you know, he pays out for family
[1:34:05] medical. I was just like,
[1:34:06] >> yeah,
[1:34:06] >> I was, you know, going on,
[1:34:09] >> you know, so there's just things that I
[1:34:11] would like to
[1:34:12] >> help compensate on some stuff if we can.
[1:34:14] >> Yeah.
[1:34:15] >> Because of items like that.
[1:34:16] >> Yeah. And that speaking of RFPs, like
[1:34:18] that RFP went out today.
[1:34:21] >> So for like the broker, the insurance
[1:34:23] broker. So
[1:34:25] >> it's in the paper. Yeah. So that went
[1:34:27] out today. So to try to find an
[1:34:28] insurance broker to find those options,
[1:34:30] right?
[1:34:31] >> Correct. Yeah. Unfortunately, that's not
[1:34:33] >> But at any point if any council member
[1:34:36] was wondering about pay for somebody, go
[1:34:39] with Zach so we can get the HR involved
[1:34:42] to try to figure out, you know, we might
[1:34:43] already have the data or have access to
[1:34:45] the data or maybe we never talked about
[1:34:47] it and we need to get somebody to kind
[1:34:48] of give us an idea. But either way, it's
[1:34:51] still going to come back to us to go
[1:34:52] ahead and review if we're going to make
[1:34:54] changes and when it's going to be
[1:34:56] appropriate for us to make the changes.
[1:34:58] Uh but yes, it would
[1:35:00] >> and the salaries were provided for
[1:35:02] y'all. We we did give those as another
[1:35:05] sheet. I mean, obviously I we didn't
[1:35:07] necessarily have anything for sure we
[1:35:10] wanted to talk to y'all unless y'all you
[1:35:12] wanted to say anything, but you know,
[1:35:15] but we did we did mention
[1:35:17] >> we did put on there different uh
[1:35:20] percentages.
[1:35:21] >> Yeah. Yeah. Yeah.
[1:35:22] >> Did we did put on there different
[1:35:23] percentages again knowing that right now
[1:35:26] what's in the budget is 3% is built in.
[1:35:30] But um
[1:35:32] >> I just wanted to highlight how much the
[1:35:35] 3% is costing the budget. And at 3% in
[1:35:40] general fund, it's going to cost almost
[1:35:43] 51,000,
[1:35:45] water almost 4,000 and sewer for uh
[1:35:50] 4,800.
[1:35:51] Um
[1:35:53] the one issue that he's talking about
[1:35:56] would be in the police department. And
[1:35:58] you can just kind of look at PD and we have discussed that issue and had
[1:36:07] already planned on coming up with
[1:36:09] something. We'll fix that.
[1:36:12] >> Good. Thank you.
[1:36:13] >> Yes.
[1:36:15] >> I don't know what it is. I don't know
[1:36:16] what the solution.
[1:36:17] >> The good thing is it's general fund.
[1:36:21] So, um
[1:36:23] this basically just tells you how much
[1:36:26] each percentage
[1:36:28] um
[1:36:30] we had talked and thinking,
[1:36:33] but after your comment, maybe not that
[1:36:35] this may not be a good idea this year or
[1:36:38] maybe look at it mid year just because
[1:36:42] funds are so tight. It's not going to
[1:36:46] give us much money, but
[1:36:53] >> it's currently set at three.
[1:36:54] >> Yes. In the budget, it's at 3%.
[1:36:57] >> Y'all
[1:37:00] be good.
[1:37:03] All right.
[1:37:07] Zach, need anything else?
[1:37:09] >> That's it for myself.
[1:37:10] >> Okay. Do you need anything with the
[1:37:12] budget, the changes? I mean,
[1:37:14] >> that was it. I mean, nothing's really
[1:37:16] changed. Like I said, we build those
[1:37:18] things in that we talked about, we'll go
[1:37:19] ahead and send out updated so everybody
[1:37:22] has a copy of that. If there's anything
[1:37:24] that comes out of that um that you see
[1:37:28] if you know, please get with me, let me
[1:37:30] know. Uh you know, but we'll kind of
[1:37:32] proceed accordingly and get the like
[1:37:35] utility stuff working and um prepare for
[1:37:40] getting it adopted. Yeah.
[1:37:43] >> So, what you presented right here, you
[1:37:46] said changes. There are some changes in
[1:37:48] here.
[1:37:48] >> It No, it was mostly to go over.
[1:37:51] >> Okay. So, we don't need to vote because
[1:37:53] Okay. Yeah. I just want to make sure.
[1:37:54] >> You're good.
[1:37:55] >> Okay. I'll be able to do that. All
[1:37:57] right. It was more the opportunity in
[1:37:59] case we needed to.
[1:38:01] >> Got it. Okay. So, I think that one we
[1:38:02] should be okay.
[1:38:03] >> All right. Council, uh, any anything
[1:38:06] else? Anybody has a question? Anything
[1:38:08] dealing with the budget? I I just want
[1:38:10] to reiterate kind of you always say, you
[1:38:12] know, we're not projects now that should
[1:38:14] have been taken care of long time ago.
[1:38:16] Um and I say to public because you know
[1:38:19] they going to see an increase in a lot
[1:38:20] of tax and water and you know um you
[1:38:26] know I've heard some some comments on
[1:38:28] people from my area. Hey, you know my
[1:38:31] water bill is $460, right? And it's
[1:38:34] going to go up again. But but again
[1:38:35] we're doing it for better assistance and
[1:38:38] again things taken care of now.
[1:38:41] So just want to reiterate that that you
[1:38:45] >> Yes sir. Yes sir.
[1:39:04] » Yeah. Along with a few other projects
[1:39:06] too. Hopefully everything lines up for
[1:39:08] us.
[1:39:09] Okay, with that in mind, it is 7:56
[1:39:12] right now. Do I have a motion to
[1:39:14] adjurnn? Got a motion to a second.
[1:39:17] >> All those in favor?
[1:39:19] >> Any opposed? All right. Thank you.
[1:39:22] Appreciate it.