[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.

08.12.2026 Special City Council Meeting

Agenda

Transcript