ok
. Good
afternoon. Thank you
for joining us
here today at
this Pflugerville City
Council
workshop. Uh
, calling us
to
order at 5
P.M. On Tuesday
,
AUGUST 25th
, uh, the
first item
on our agenda is
public
comment
I
do
have a request. This looks
like
it's for
. The
7
o'clock
meeting and I have
Les who is
waiting for
. The item to
come
forward, is there anyone
wishing to speak during
public
comment at this time
, not
related to 9
. That
will move
forward
to item 3a, that is to
conduct a presentation on
the
Pflugerville Community
Development Corporation fiscal
year 26
, 3rd quarter financial
reports. How come that guy
gets
to sit in the back while she's
giving a presentation
. Thank
you
. So
, good evening
. Um
, this
report went to
the pcdc board
on AUGUST 19th
. Um
, just to
review of
where
we
are as of
JUNE 30th
. Um
, total revenue is
at
63%
sales taxes, their
largest revenue
, and that it's
at 73%. A a little
bit
behind
,
um, where we would
have
budgeted
, um, we're trending
fiscal year today
, 1.2% year
over year
. Um
, interested
income
is also behind budget,
um, as
we've
seen
interest
slowly
ticked down over the
last
several months, and
other
revenue just
like to point that
out, it's um
The water
park
payment and we, we get that
in
SEPTEMBER
, so we wait all year
to get that
. That one bit of
revenue
in SEPTEMBER
. There's
just
a
peek at the sales
tax
trend
. I
will say that you
can
tell from JUNE
and JULY
. Um
,
we're looking better, so we'll
see how
that looks over the
next couple of months
to finish
out
our
fiscal year
, um, but
Um
I think JULY
was 13% year over
year
. On
the
expense
side
, 56%
um spent of
the budget of
, of
personnel
, 61%
operating 69%
development incentives are
at
62%
. Um
, the
majority of these,
uh, are
paid out at the end
of
the, of
the year, so it'll be
in quarter 4 that you'll see
the rest of those
incentive
payments
. Capital projects is
at 51%. Um, we did
get or hear
a report that the two main
projects
Impact
way
and Helios
right in and
right out should
be
final in
, in SEPTEMBER, so
we should
be
able
to
um find
out those
projects by the end
of the fiscal year
, um, debt
payments
are
57%. Um
, this
was
before
the
AUGUST
payments hit,
and so you will
see that jump
up in the 4th quarter as well
.
Any questions
? Based on where
we
are
here at this
point
, uh,
do you think we're going to get
pretty close
to
100% on
everything, or do you think
we're going to end up
Below on
anything I if we're
below
on
revenues or expenditures
, which
ones and how much? I
think
sales
tax will come in a little
short, just like we're
projecting
in general fund
. Um
,
I, I mean, we're
at 56% of
budget
on expenses. I think
there's some expenses that will
come in in the 4th quarter
, but
I think we'll be below
on
expenses
. Ok
, and personnel in
particular should be low. Well,
I mean, we had
vacancies for a
good bit of the year, yeah
.
APRIL of this year? Um
, Yeah
,
it's about timing around that
area
. Yeah, yeah, so we
, we
should expect personnel to
come
in low
. Sales tax
to come
in
low. Um, other than
that
,
everything looks like it's
about on
target
. Am I
understanding this correctly I
think
most categories on the
expense
side are behind budget
.
I mean, we would
be
at
75% at
this point in time if
you
just
do math
, but as you pointed
out
uh, uh, many of the, the
large
expenditures
come
in and the
debt
. I
would expect us
below
75% at this
point
. So assuming
that
everything goes
according
to plan
. We're
going to end up
at
105
or
95. You would expect
for us to be
below 75% at this
point
. If
you have a
majority
of expenditures, yeah, because
most
of
the large portion of
the expenditures
happen in the,
in the 4th quarter of every
year
. But she said that the
only one that's
like perfect is
debt service because we know
those numbers ahead of time
,
otherwise everything
else is
turning below on
debt services
a semiannual
. It is
. Usually
semiannual, but there's like
another
one off that's in a
different month. I think they
have one, bond that gets paid
in OCTOBER
, so
they're not
perfect
. FEBRUARY and
AUGUST
anymore. Some of the
new ones
are actually
off
cycle and the
water park is
off cycle, the
water park revenue is off cycle
The
water
park expenses, I
assume, are
those monthly? That
no, those
are all
they're twice
a year
, semiannual, but they're
not on the regular bond
schedule
, so we have to keep up
with all the
. A different so so
it
sounds
like quarterly
. We're
roughly in line, but it's not
going to be linear
. Um, on the
debt, well
, on
the expenses
It's gonna be, I think
gonna be
I think be be, I think below
budget
. Uh
, any other
.
Questions for this, uh, counsel
?
Right
, Tracy
, don't go
too
far
, um, item 3b
is
discussions
regarding water
and
wastewater
rate
study recommendations
. Uh
I believe we
also have uh
Jessica Lynch with Baker Tilly.
So she found
a friend thank you
for joining
us
again
Yeah, so
,
um, hopefully this
will be our
last presentation on our water
and wastewater study
. Um, but
we wanted to kind of touch
some
different
things now we've
provided you with the full
, um,
final reports on the water and
the wastewater
, and so
, um,
we're prepared
to
field some
questions that MAY have come up
with that review
of
those
reports, um, but we're
gonna
start out
with just going
over
some assumptions that were
built into the report
. Yeah
. So
first just on the
revenue
requirements schedule
, um, most
of these amounts were given to
us
by Tracy and
her team
, um,
but specifically those
assumptions that
were
built
into their
for
the revenue side
for water
, um, annual customer
growth
of
2%
for all
the
classes except
for Lakeside mud
5, which had
7.45%
annual
growth
, um, wastewater
is 3%
growth in fiscal year
. 2027,
but
then 2%
for
the phases
after that
through 2031
. Um
,
another a question
on that. We
both looked at each other, to
be fair. I
, I
assume
that's
because, uh, oh, go
ahead, go
ahead. Well, obviously when
you're projecting revenue
, you
generally tend to be
more
conservative, but
our
wastewater master plan that we
did
approve had closer to
an 8%
annual growth
over the next 10
years
, so we're
using 3%
growth
in the next year
and 2%
growth
in the next 4
years
after
that.
So I just wanted
to
highlight
that, um, that that
is
a
major
reduction
in
growth projections
that we had in our master plan
that we just approved. I don't
know what
the
master
plan
growth
percentage drives that I
know with this and with
the
model that I worked
here
last
year
, the percentage just
drives
how much um
. More units
are going
to be
considered when
we're doing the
billing
and 8%
would not
, it
would
have
calculated
way more new
units
that we see
year
over
year. So
yeah
, so and and
as
you
conveyed numerous times, we go
back and we check
. What that
actually looks like to make
sure that it's actually in line
and which goes to
a
conversation that Melody had
or
COUNCILMAN Ryan had a while
ago
too as well, so
. Cool
. Ok
, um,
and then also based on input
from
Tracy's team
, including
contributions from impact fees
to help
with lowering some of
those
revenue requirements for
water
, uh
, $4 million annually
.
And then
for wastewater, it's
$4 million in the
first two
years, fiscal year 27 and 28,
and then
5 million29 and
then
$6 million in 2030
and 20931
to
help reduce those rate
increases needed
, um, for debt
service also
some contributions
from
cash
reserves
, um, based
on where we were seeing just
the straight revenue
requirements in the across the
board percentage increases
coming in. We
have
25% being
contributed in the
first two
phases for
. Water
and
75%
um
for the first two phases
for
wastewater
, and
then
replacements and
improvement.
Can you explain that a little
bit
debt
, the
debt
service
contributions fund balance that
we're using that was put into
the debt
service fund and so
we're
basically buying down the
rate by using some of those
funds toward debt. Ok, so we
can, we can
do that and
Wifia
rate
. Covenant or
the
revenue
requirement, we can
use
reserves to, to
help
stabilize
the. Yeah, you can use it to
pay your
debt service, but
you'll still have to show
the
full payment for like your
coverage
requirements. Yes,
it's
, it's
, it's working
it
into the
rate calculations so
that you're not being
hit with
the
full
debt coming out of
rates. That's why we're
putting
the impact fees toward it.
That's why we're putting some
of
the available fund balance
toward it
. Ok. And then
I had
a
question that
came up with the
budget when I
was looking at
this as well, so I guess I'm
gonna ask
it
here, um, in
the
budget
we
had
$10
million in
impact fees. I thought
, or
somewhere mentioned, um, but
here it's
8 million, so I
was
just wondering
what was the
the
determination of how
much we
put towards
, I think you're
getting
some
roadway impact
fees in your total
. Because I
believe that these are
the
numbers that were put into the
budget
for
water for
the entire
if you were looking
and the
all
fund summary, it's gonna, it's
gonna include roadway impact
fees. Ok, thank you
. Now
, uh,
obviously our wastewater area
is much greater than
our water
area, and as
much less
developed
. Um
, what
is the
basis for assuming the
Increase
in the in
the wastewater
.
Impact fees year
It's based on
It's based on the death of
those big projects, so
i
basically
looked at the debt
for like the
wastewater
treatment plant
. And how much
we would
be able to
take
from
impact fees
to
debt
, and so as
that debt grew, that's why
they
contribution from the impact
fees
grew the
way the water was
a little flatter
. So my
question is, where are the
impact trees coming from
?
They're being
collected in the
service
area
and
they're
collecting that much more in
the impact fees in the out
years
. I mean
, that's what I'm
trying to understand. I mean
,
that's a projection
. I, I
don't
have a crystal ball as to how
much we're
gonna get in those
years, but we
are
trending this
year
. We've collected over
our
budget
. Ok
, so
that
, that looks
like
, um, fy 28, we're looking
at a
a 25%
increase
over
fy 27
.
Does that seem
like a
realistic
growth projection
? I believe so
based on the
, the
subdivisions
that, I mean, I have
all the
information of the memos that
we
have for the subdivision.
There's, there's quite a
few.
Ok, so we're going to
grow
25%
in that area
. It's a projection
And, and, and I, and I, and
to
me, based on, yeah, I know
, but
but I, I want to give him
credit for to his
point
, so
he's wondering, ok, what that
looks like regarding our
wastewater area and obviously
our ccn
there is much greater
than it is our water
. Um
, if
you go out there
, even
just
going on
Cameron Road
, which
pretty much 3/4 of the
city
doesn't even know exists. I
mean
, it's
insane. Over here as
well
. You see a
significant
amount of increase regarding
these actual subdivisions
coming in and when
they're
coming online, what I
anticipate
and what I
understand the staff is working
with
the developers, seeing
when these units are actually
coming online
. What's the
development schedule, and then
making
the
actual
summation on
that, and
I know that given the
fact that some of the other
things
that are happening in
that
. Area
, including ut
University of Texas
at Taylor,
as well as
what's
happening
growing at 290
and 973
, you're
pressuring more units and
more
areas to come into in the
growth area
for that pattern.
That's why we always have the
conversation, to
your point
about 973
because we know
that
that is going to be
the
next
major zone
that
again free for
service citizens have no idea
about, but that's where the
growth is coming from. Let me
,
let me ask you a question and
make sure I
understand the
impact feline on this table.
The
Uh
, the impact fees here
,
is that what
we anticipate
collecting from
new development
or is that how much we
have
in
and call it reserves in
our
fund that we are
applying
towards the the rates
it, it
,
it's
not reserves
, it's
basically what we
When we
get
impact fees in, we can
do
2
things
we
can spend it on debt
or we can spend
it
on
projects
.
We've
identified this
amount
from
would
bring
in to, to
put
it
towards debt so that we
can
factor it
into these
calculations. The
rest of the
money that we
would receive
over
these amounts
would be
, um
put towards projects
. Ok. And
when I see 5 million
in
fiscal
year 2029. I mean, that's
a
projection that's to more than
2 years
out right now. Is that
a projection of what
we
anticipate we will collect or
how much
we will have that how
much we
are
setting aside for
Got you. Thank you. I think
that's an
important distinction
and I don't think, uh, I don't
think I was hearing that
earlier. I appreciate that. So
I
, um, found where I saw
the 10
million for the impact fees.
It's in
the
utility capital
fund
. And
so
based on
the
, the
explanation you just gave
. It
looks like
we're projecting
or
proposing that we're going to
receive
$10
million. So that's
revenue
. Yes
, but
this is
what
we just, what we just discussed
here, that is
how much
of our
impact fees that
we
have
collected that we are going
to
apply towards the debt, not,
not
our
revenue projection for
how much we would collect,
right
, correct. So
then my
question is
. How did
we
determine that of the 10
million we were going to
use 8
towards
the debt and
2 for, I
guess, projects. Why
not use we
were trying to use as much as
we could
to
death based
on
the
debt on the schedule
, I mean, I
have to be
careful because I
have to be able to identify
this impact fee is paying for
this
bond payment
, and so I was
trying
to
identify those bond
payments that were
100
100%
related to these big
plant
projects, so
That
was my kind
of
my justification
for like I
can pinpoint here's the
amount
I'm bringing in and here's the
bond payment that's
related to
that new
asset
. And why is it
important that you have to
identify that
? Because it's
restricted. I
, I can only use
those funds for those
, those
items. Ok, so what you're, so
what I'm
hearing is
you've
identified
$8 million of debt
payments that can
be
applied
towards impact fees for new
growth. And
the
other 2 million
that we
are expecting, um
.
There's not
enough debt to use
it all
. For
. There's not enough
I mean there is, but you would
start
piecemealing it
across
bonds, and I
was trying to just
be very clean with
my
projections
. And
we've
already
committed some
projects to
impact fees, so I need
to be
able to have a little bit
of
flexibility
to
finish out
those
projects
that we've said we're
going to use Imp impact fees on
But we could
borrow debt
for
those projects and then use
. I
,
I mean, there's, there's a
couple of
different ways
. I'm
just
, um, uh, well, ok, yeah
yeah all right, so, all
right
,
so there's
there's possibly
10
million in debt payments that
are
related to
growth projects
that are
on
our impact fee list
but
they're not
cleanly in
a
specific um
And the
and the
10
million is an estimate as well
,
so I would
want to box
myself
in. Can, can you
clarify if
those are congruent, um
. Is
this 8 million
coming out of
that $10 million or is this 8
million some
that has already
been collected
. Uh, no, it
would be out of
the purely out
of the estimate of what we're
gonna bring in
, yes. All right,
thank you. Do we
have balances
in our
impact fees for water
and wastewater that
We
collected in the past that
could also be used
. We've
already transferred what's
available
. We've already
allocated all that, yes, ok, so
we've
used all
of
our impact
fees that have
been
collected
already
assigned to projects
.
All right
, thank you
. Sorry
about that. Where were
we
? Ok
,
no problem. And I think the
only other item on this slide
is
just the replacements and
improvements
, um, I do believe
there
were some questions as
far as where those amounts on
the revenue
requirement
schedule came from, so
those
aren't specifically tied to any
budget number
that is the line
item that
we use
, um, because
when we saw the
straight budget
items for each phase
, the
amount of
the rate increase
varied dramatically from year
to year
, from face to face, so
we use
. That
line
item to be
able to smooth
out that rate
increase so that you saw for
the
water side an
even 5%
per
phase, and for the wastewater,
and
even 16.5% per
phase
. So,
if we would make it to
be
actual capital projects
, then
the
first days would
be a
lot
lower, but
then you're going to
have, you know, for water
, for
example, you'll have like an 8%
in phase two
and then maybe a,
you know, 10%
in
phase 3 and we
tried to make
it equal amongst
the phases. It's also building
in
. To
the rate
. Some funds
for
capital improvement, so it
serves
both purposes, yeah
.
Yeah, we start with like the
minimum
that you need
and then
work our way to smooth
over the
increases. I just wanted to and
when you
say minimum, what
we
need, what do you
mean by
minimal what we need
? Um
, so
for
capital projects, just for
whatever is in the budget
, um,
historically what you've spent,
we look at a number of
different factors, what you've
spent historically and what's
budgeted for the future. I'm
This is
a
very interesting
competition for a lot of
two
people online and everybody
else will look later
on on
this
so that's why I was saying that
I want to make sure
they
understood what you meant by
that
. If that makes any sense
.
And
how often do you actually
get a counselor really
interested in
talking
about
this. I
love talking
about
numbers
. Me
too
. What? I know
we're
all shocked
. Um
, and then
so
this is just
. In general,
there are
some for the water
side of a cost of
service study
um, this gets
a little into the
weeds, but the
cost allocations
their, for
a
water
system
is,
um, you apply, if you look in
the
awwa manual, what's called
capacity factors
, so
you're
deterrent, it helps
you
determine what customers are
putting more of a stress on
your system than other
customers, and
these factors
help to
allocate those
costs so
that the customers that
are
putting more stress on your
system are the ones paying
. For
that. And so these are
the
assumptions
, um, mainly
based
on all the billing data
that we
received
from Tracy's team
, so
we analyze all that for the
test
here
, um, and looking at
those
. Highest months what
the
usage was for each
customer
class
, um, so in each, each of
these
customer classes, the
ones
we were able
to adjust
, um
we threw out
the highest,
highest month because it
was
a
significant outlier
compared to
the 2nd highest and 3rd
highest
month
, um, for residential and
commercial, and then also, and
then we compare that
to the
average so that you can see
what goes into
your flow, and
then who you need
excess
capacity for because they're
,
they're causing
strain on the
system from those peak demands
.
Um, and then
the
number other
things that go into that
calculation for
those factors
or the days of
water that
is
used per week, and then the
hours of water
per day
, um, and
then just noting
on
here that
because of the
agreement the
city has
with Manville
, um, we
show what
the cost to
serve
Manville are based on the
cost
of
service allocation. However
,
that agreement
, um, specifies
that their rate cannot change,
um, and
I think
it's
for 40
years, so
. So
, um, they are
customers that are
subsidizing
the costs for
them, and so then
we show in the report
how that
got allocated to the other
classes
. Um, and then just
for
residential from that
allocation of Manville's
revenue
being below the
costs
it
is
to serve them
. How that
was allocated to the
other
customer classes based on input
from
management was to help
.
Reduce the impact to the
residential customers
, so more
of that
was allocated to the
other customer classes in a
smaller
percentage was
allocated to residential
. So
,
on that, because I
was
surprised when I
saw that. Um
um
. Is
that
subsidy
been
consistent
in
previous years,
the, the way that it's
being
allocated
. Mostly it's
a
commercial and not to
residential, or
was
the
allocation in
this year changed
from how we did it before
. So
that
I would
, I did not
do
the
prior
? Manville was built into
the rave model. I don't
know
that there was a specific, I
mean it
. Um
, We were running
the model with all the
information in it
, and then
setting the rates
to get
us
to
a revenue
requirement that we
needed. I don't know that it
was specifically allocated the
way that Baker and Tilly did it
but
, and without doing a cost
of
service study
, you
wouldn't
necessarily see that that's how
much they've been subsidizing
,
so you'd have to go back and
see the last time
the
city
actually did a full cost
of
service study for allocating
those costs
to
see
what that
um
subsidization was
. So
do you
see this in
other cost of
service
studies
you
do
. We do a
lot
, especially in
growing
communities where the customer
base
is changing quite a
bit
that and haven't had one in
years
from when maybe their
initial
rate structure
, um, was
outlined. So if
it's been a
, a
long time since the cost of
service study is done. We see a
lot of
that subsidization and
trying to true up those rates
so
that the costs are being
paid by the customers that are
putting
the biggest
impact on
the
system. How recent of a
trend is that
? It varies
from
community
to community, but
We
do see it
very
often. So
how
often
would you
recommend that
a
city
updates their cost of
service study
every month
. So
like 5
years
, 10 years, I
would
say probably at least
5 years,
uh, if you're a growing
community, especially
and you
know that those customer class
spaces are the the amount of
customers
in one class
or
another has changed
significantly, then I would
recommend doing it. Ok
, so
like
if you see
a
large increase
in
multi-family
. That
might be a
trigger to, to look at it again
And
here multi-family rate
design
is being classified as
commercial. Yes
. Thank you
. No
.
Um, and
then just on the
wastewater side, the way costs
are allocated, um, this is
based specifically on the
monthly
reports of operations
from your wastewater
treatment
plant
, um, so those
, uh, flow
,
the flow
, and
what it's costing
more to treat
that flow based
on your excessive
strength
surcharges, and so that's the
allocation between
just your,
your flow
, your
, um, phosphorus
your
um biosolids, your
suspended solids, those, those
different items, it's just how
that
. It's allocated, um, and
then
for wastewater
specifically
, the
wholesale
customers based on their
agreement, the rates
cannot be
increased, so we
did
not show
an increase to any of
their
rates
. And
then again
, also did
a, there's a
slight
subsidization between
residential
and
commercial just
to
help offset an increase for
an
average residential user, um
but it's minimal
. And
that was
based on
the input from
utility
management to
, to
minimize the
impact to
residential
customers
So
, but previously
with
the
wastewater and how the rates
were scheduled
. Was there
a
subsidy of commercial
from
residential. Yes
. Yeah. And it
was
. Quite significant. Yeah,
so I
, I wasn't sure because the
number and the
report
was
almost
5
million and I wasn't,
you know
, but
that
was based on
this year's usage and the, you
know, in
the
current rates, but
not, I didn't know if it
changed a lot
from the previous
year and
that
was similar to
what it would have been in the
last
few years
. So specifically
based on
um the question that
you had sent earlier today
, the
um, that
last schedule, it's
kind of an apples to oranges
because it's prepared
, it's
comparing
the proposed
.
Structure to
the
existing
rights, but when I apply
the
across the
board percentage
increase
to
the
existing rates.
It's still
, that gives you like
a true cost of
like in
our
projections, what the
subsidy
,
what commercial would be
residential would be subsidized
and commercial
, um, if the rate
structure didn't change and it
was
, I, I think it was
about
4.5 million
. I wrote it, so it
was
4.9 with the existing rate
structure, but if you increase
the rates by the
. Increase
needed across the board, then
it's 4.5
. So that's, that's
pretty large
, so
. This change
in the
rate structure that
we're, that's being proposed is
going to, I mean, we, we, you
know
, felt it, right, but now
we have some numbers of
how
much
was actually being
subsidized by residential, and
now it's more
equitable based
on usage
based on, on
the
pressures that each class is
putting on
your system
. So you
,
so I updated that for we at
least believe that because
remember we had that
conversation about what's going
to happen with
. Apartment
complex. Yeah, so, yeah
, so
then
this might have been, it
might have
changed as
the
housing or as the mix
of
customers classes
changed with
more and I and I think
chewing
up the so that not
. Every
customer meter size
has the
same base charge as what's
helping to even more align the
costs
with the customer
. Thank
you. You're welcome
. And then I
think you've seen all these
before, but
again, we just have
the present and proposed rates
.
Here, so
that's a
, if you want
us to go through all of them,
we can
. Did anything change
from the last, because when
I
looked at the last one
and
the
costs there were, it seemed
like there might have been some
minor changes
, or is
this the
same as what
was
left from when
you were here in
the
rates did
not
change
. The yeah, the only
rate
that changed
was Lakeside
mud
, um, but it did not end the
change so that we
netted out
,
um, what
was
paid to Anville
for that community
and the
revenues since they're since
.
Lugerville just
serves as kind
of a pass through and
collecting the revenues for
that community
, um, so it
changed their rate slightly,
but it
did not impact any of
the other rates
. That's really
all
we
have
for presentation
.
Let me, let me ask you about
that. You mentioned Manville
and
the
pass-through rates. Uh,
is there a
risk factor built
into that? Is there a
collection factor
built into
that
? Um
, I guess I don't know
how the collection site, like
when you pay it out
, if you
just look at
the
collections we
build or are we paying out what
we were supposed to collect or
we
paying out what
we actually
my
question if you just pay out
what you
actually collected or
if you
paid
out of
folks
who
didn't pay their bill
. I'm
not
familiar with that. I
don't
personally do that building. Um
I know there's
a fee
that
we
collect as part
of
just doing
the
service and my
understanding is the rest of it
is a
pass
through, so we're
able to keep
. The
portion
that's
um in the
agreement for
us
. That's
that's encouraging
.
So
these have been
communicated
out
the informal direction I
received at our
last meeting
,
um, so residents are aware
they're
on notice of
these of
these changes
. So if there's
I
did have a couple other
questions
that I sent in
the
email that I don't think
think
covered
, um, in the
, the water
cost of service
. The
net
revenue requirements
? Were
um
different than what is
in our
budget, so it
was
like 37.5
million, but our
budget is 35
.
So
, um, just, but
the
wastewater matched exactly, so
I wasn't sure
the reason
. I
mean, obviously it's better
. So
what the number that
you're
saying matched was the
net
revenue requirements
, not
necessarily the
total
annual
revenues that
we
would
project.
So when you look
at the water
.
The 35 7 is
the
total revenue
that this
is generating that
this rate
study is
generating.
So we're
already projecting
that we're going to be under
.
Collected
. So
the
357 is what
we put in the
budget or close
to it, because there's a just
there's a
difference between
what the
rates will collect and
what wholesale we'll collect
.
Um, on
the
wastewater side, I
mean, I did
use
a
judgment. If
if I would have put
the 22.4
that's in this, in this
, um
.
Study, we would have
been
going
backwards a couple of million
.
Um
, So I kind
of made the
assumption that we might be
able to make up some of this
gain between the total
revenue
requirement and the total
annual revenues, it's still
a
budget
, you know, we MAY not
make it to the 26th
1, but that
was kind of my
justification
for not
going all the way back
down to the 224
. I mean
, we're
even projecting, I
think 26
this year
. Oh, I
, I
thought the
net revenue requirements
was
what was being used the
bottom
one
, not the top one. It's
the
bottom number
, the
total
revenues available. Ok
. I
thought that was the one we had
to use or that was
being used
as saying this is what we need
to
. Well, I guess
from the
net
revenue requirement, so I
thought
that's what we were
they're phasing it
in so
they're not assuming
that in
year one we're going to
collect
everything
we
need
. They're
phasing that in
over 5
years. I
think on the
water side
because
the way we
use
the replacements
and
improvements to help smooth
out those
rate
increases
. We
made
, we increased the
replacements and increased
improvements line items, so
that's why it's at
the 37
million rather than
. 35 million
so
that we could do
the
annual
5%
per year instead of
only
having 2% in phase one
and 8%
in phase two
. Ok, that makes
sense. Well, cause that was one
of my questions
was what is,
what is
this? Yeah
, that's why
it
was the, the goal
of
phasing
those increases or
making
those
increases we're phasing it in
this
in the study, but we're
not
actually phasing. We're not
actually
. Collecting higher
revenue for that in our budget
.
You'll collect higher revenue
,
but you'll set it aside to be
used for future years
. Ok
.
It'll offset those and
then
increases needed
. I
was unsure
of how
like the
, the
terminology of what was used in
this study and how it
related
to
our budget
with franchise
fee expense and transfer to
general funds
, and so I was
trying to add them up and
compare them to
the budget to
see
. Um
, if
I
could
understand
how, how this
is flowing to
our
budget
. The transfer to General
Flynn is the same
. The
franchise
fee was a little
bore
in the
study
than what
we
actually put in the fiscal
27
budget
, um, because
this
, that
what the
, the
revenue
requirement that they were fed
to do the
study off of was the
fiscal 26th budget
. And the
fiscal
2016 budget franchise
fee was higher. It was
like 2.7
That's what these numbers are
based on
. But
as we were
trying
to balance the budget, we were
trying to
reduce that franchise
fee a little bit
. Ok
, and then
.
We have cost allocation in the
budget
. Is that
what is, so I
was aligning them
accurately
and as
far
as
, but um
. Ok
. All
right, counsel, what other
questions do you have
? I was
going to ask the exact same
ones that
Melody's been talking
about. Yeah, I know she
took
mine
too
. You're
just
going
online, I do have, I
do
have
one question, uh, for you
, so
,
uh, the way
we adopt
these
rates is through the budget
process and you
go
into
effect
OCTOBER 1st
with the, with our
annual budget. Is that accurate
? Yep
, your masterpiece
schedule is a part of your
budget. All right
, and it will
come back as a
separate
ordinance, um, and it'll have
two readings. All right, and
that ordinance
. Will be the
master feet
ordinance
or
masterpiece. So I, I
did
have
another question
on
the
um rate
coverage
with
the
wifia
requirement and
the
125% and
what
we
need to
, to collect
, um
because some of
the
calculations
in
there were
different than
what
I
was
understanding how the
calculation worked with talking
with
staff previously, which is
always why I
like to see it in
the numbers and not just
describe. But
. But, um, so
in
there, it, it, it looks like
.
The
revenue requirements in
this plan are higher
. Than what
we need for
the the rate
coverage for Wo because we're
at 137% or 100
. 48%
, which
is
higher than what we need
for
125%
. So, um
, So that
I'm
just
wondering, is that an
opportunity to have
Great
relief if
This is higher
than
what we need for the debt
.
That's it
. Yes, please
go
ahead
I was, so I was going to say,
well
, just
because for
the
2026
with the t3 since
that that
service isn't actually known
yet. We did build
in some
cushion to allow some
flexibility with that
for
those
coverages, but
then also
um the
function of again
. Um
,
fluctuating that replacements
and improvements number to
smooth out the rate
increases
is what's going to make
those
coverage percentages be higher
than what's
actually required
because you're smoothing it out
over the
different years
instead
of having
just what you
exactly you
needed phase one,
phase 2
, and phase 3
, so it'll,
it'll vary
from year to year.
They're also not apples
and
apples because when you're
trying to calculate your
revenue requirement
. You're
looking at
different factors,
and then when
you're trying to
take those numbers and just do
the calculation to make sure
you're covered
on your
debt
coverage. They, those are
two
separate calculations
. So
, if
we were to
reduce the rates and
reduce the revenue, then
we're
not meeting our
revenue
requirements on the
other page.
I mean, they, they're
just
not
comparable sometimes they
both
have to
be
calculated
, but they
do run separately as far
as,
you know, what you're doing on
the
. Revenue Department is
different than what you're
doing for the
debt
coverage, at
least
we're meeting our
, we
are
exceeding our debt
coverage,
which is good news
. So
, you run
the risk if you
take just
looking at
that
coverage
calculation and think that
you
can
reduce your, um, the
million dollars, you MAY not be
meeting all your
revenue
requirements
. Even though
you're meeting that coverage
funds from
or using funds from
Fund Balance like we're going
to
be using 2
. 7
or 2.3
somewhere somewhere from fund
balance
. Towards that
, that
does that
Get
calculated in the
rate coverage or does that get
calculated in the
revenue or so
your coverage calculation
is
specifically what
you've earned
in that year
, so you can't
use
cash reserves towards
calculating that rate coverage
or that debt service
coverage,
the debt service for
the 125%
.
But you can use it for your
revenue
requirements, correct
.
Can we have
? Clear
as mud. So
thank you
. There are a lot of
moving
pieces, yeah
yeah,
they're all intermixed. I have
a better understanding now.
Thank you. You're welcome
.
Thank you, counsel. Any other
questions
? I
appreciate it, MS.
Lynch. Thank you for being
here
and for that detailed
explanation
. I'm gonna, uh, and
of course uh Tracy, always glad
to hear finances from
you. It
seems like we're always doing
better when you're
up here. Uh,
that'll take us
to
item 3c.
This is discussion regarding
a
resolution of the city of
Pflugerville, Texas
, adopting
standards for secure,
accountable, fair
, and
explainable technology use
directing
the implementation
and providing an
effective date
I think we've got some
.
Language
from our
regular
agenda item on there this is
discussion during the
work
session
. James, yeah, I just
want to explain the documents
you have in front of you
. You
have
two versions, the one with
the draft watermark is the one
that
was attached, um, to the
agenda as drafted
by council
member Kaufman
. The other
version
is
a
revised
version
prepared by cast
member Matteer
Yeah, and, and let
me explain.
So
, uh, I
I
want to thank
um
Jonathan early
on specifically
came to me talking about this
idea and this policy and what
we're working on
, um, we talked
about how staff was looking at
these things as a whole in
their
totality. What should we
do? How should
look at this
game like a good opportunity to
go
and
do so
. Um
, Jonathan then
went to
um start talking to
David, COUNCILMAN Rogers about
it
, and
as we've heard from
mayor pro tem
, Kimberly
numerous times
. I get a little
nervous about when all of us
are all
. Discussing everything
else happened from that as well
so
I
stepped back
, um, they
worked on
their version, the
version has the
the draft on it
It also has a good um
. Summary
as well with that as well, and
then I
asked specifically, I
asked our attorney Mike
to send
me what their
draft was and
then based on what their draft
was, I created
a draft where I
saw, ok, listen, there's
,
there's some
things where we
need some clarity or some
other
aspects in my opinion, some of
the things that we add on
, some
things that, um, you know
, help
buttress
what
they're getting
at right there
. And so the
policy that you see
from
me is
about
. 18 pages
. But uh, which
covers the, yeah, I know
, right
which I expect each
and every
one of you to sit right here
,
you
You know, I have a judge
who don't
get me started,
that's exactly how he does in
these documents
. Um
, that I, I
would like for y'all to
, you
know, take back and look at
, um
we don't have
a
subcommittee,
so I would say have
Jonathan,
David, and I go back and
talk.
We don't have that, but
, um,
just what your thoughts are for
like, for example, one of the
things that, you know, there's
some cleanup items
. Um
, for
example
. Rudy
, before
you,
before you dig real deep into
that, I do
have one person
signed up for public comment on
this
item
. So I wanted to go
ahead and call forward
, uh, Mr
.
Les Wall
. Les
, uh, I know you
signed up to
, uh, to
comment on
this item
3c. Uh
, I'll give you
uh, 3 minutes
, uh, to address
us. Hey, thank you. Get
my
glasses out, so
. Yeah
, safe
technology use
. There are those
who argue there is no such
thing
as safe technology
, but
uh that's a discussion for
another day
, um, whether we're
looking at biometrics
, whether
you're looking at surveillance,
whether you're looking
at ai
,
um, the bottom line is
I don't
think it he
didn't understand
human reasoning
. It's
only as
good
as what the programmers
can put into it and what
comes
out of it
. So
where does the
public trust fit into this
? Um
,
many are skeptical
. Um
, and
one
of
the
things that I looked
at
was low, moderate, and high
risk
. Um
, there are
those in
the tech world that would say
they're all high risk
. The
only
system
that is closed
. Can't be
hacked in. That's the one that
can't
be
compromised. If you
allow an email, if you allow
data
to go out of that place or
come into that place
, it's
open
And so from that standpoint,
I'm
glad you guys are
addressing this from the
standpoint of
If we don't, the
legislature probably will, and
we know they addressed it last
session. I
bet they're going to
do something this session
as
well
, um, one of the things
would be
the
National League of
Cities
reported 68% of
employees for a city
. Use
ai
on
personal
platforms
and 57%
input sensitive data from the
city
. Um, I'm guilty of that as
well
, taking things home and
working on it and then coming
back, but um
From
that
standpoint
, the National League
of
Cities says Chet
bt Clive,
they are not safe
. So if we're
allowed access to all of that
,
they're definitely recommended
don't do
it, um
. Staff limits
cannot
be
replaced by ai
. If
we're cutting staff, thinking
ai is going to replace
human
intervention. That's not going
to happen. In fact
, you MAY end
up having more
it people
to try
and manage what we're working
on
, um
. And
uh the
Roosevelt
Institute states that ai can
be
a burden for public workers. It
can comprehend or make their
work
harder cause it'll come
out with information that's not
accurate. They
got to go in and
fix it
. And I
know
Harris
County Houston's
problem
on
engineering projects. They
would
put the
information in.
It'll spit out a project number
that
is not the number they're
working on
. They'll correct it.
It spits out the wrong number
again in the wrong data
. Uh
, so
they've
already experienced
that, so the
only thing I
would
say is I'm glad you guys are
addressing this because it's
going
to continue to be
a
burdening issue
. And there's
those that are going to fight
it
and there's those that are
going to try and work
with it,
and we really can't fight it
very
well because it's out
there for all of us to
use, so
I do appreciate you guys
addressing this
, uh, hopefully
before the legislature drops
the hammer
on cities
, but from
that
standpoint
, um, let's just
try and be as safe as
we can
with it because
public
trust
sometimes
is compromised
,
especially from third parties.
And if
we
give data to a
third
party
and
it leaks out, what
are their punishments
? What are
their penalties? If we have
a
contractor, if we have a
consultant come in and take our
data
and then all of a sudden
goes to
another party and they
start using it
. What
ramifications do we have
? I
appreciate your
time
. Thank you
Thank you, MR. Wallace
. All
right
, yeah, now I, I was about
to say I think one of the
things
that he said, which I
think is critical in this
conversation, but
I have a
slightly different perspective
on
this
is
that we're having to
do this
because nobody else is
.
Flat out
, let's just be honest
,
that's what's happening here
is
that pretty much this is the
wild wild
west and folks don't
want to step
in
. They don't
want to have to make
decisions
and
so
consequently
citizens,
you know
, suffer
privacy
suffers
. I
, I
, I understand and
I hear what you
said about
um
Chachi bt
and um, oh, you know,
anything generated of ai
. And
it's a reality that folks are
using them right there as well,
but the reality of the
fact is,
is that
. This council
is
stepping up in a way to
actually go ahead and help
address it and deal with these
issues. Yeah, i
think
just to talk a little bit
about
that, I think one of the, one
of
my overarching goals with
this was to
create
a framework
so that we don't end up like
what a
lot of
other cities are
doing where they've got an
alpr
policy. They've got
a
generative
ai
policy. They've
got a drone
policy, right
, and
all of these things
, um, and so
I, I think that the hope of
having
a framework versus a
very specific
Piece by piece
,
you
know
, definition of these
things is that's really the
intent, right, is to get
something that
can
be durable
and last
. We MAY not know what
the technology is that's going
to need to
be governed 3 years
from now, but we should be able
to speak
to and staff should be
able
to understand the
expectations and the guardrails
of counsel from a
policy
perspective in
terms of not
what a company is marketing
a
product or a functionality as,
but
it's
actual usage and how
it gets
applied in the
real
world, um, so I just wanted to
add that in because I think
We're absolutely in alignment
on
that. And to
that point,
that's
one of the reasons why
if you look at my document, for
example, if you look
at
Section
2, the definition, you see
, you
see me specifically denote
the
difference between
ai systems
and
generative ai because those
two things
aren't necessarily
the same, and
you see
what
I
articulated regarding
what
covered systems are. That
means
that works
for that as
well
, um
some of
the things
, uh, for
example
, consequential decision
making
. Some verbiage over
there as well
, I
added
meaningful human reviews. These
are things
that I've looked
at
regarding what I'm advising our
clients
are, so in the private,
I mean, David, I'm sure you're
doing the
same thing, you know,
your clients, hey
, listen,
these are things that you want
in your policies to work
for
that. The
question becomes
ultimately
is
that
what's
adaptable and this is why we
have
a
great attorney like Mike
who can tell us, ok
, what
, and
James is our
city manager
. What
makes sense
? What's
adaptable
for a public
entity as opposed
to a private entity
. Right
there as well
, but I think that
having
that flexibility as
you're talking about
that
malleability to work to make
sure that we have
a system in
place that works, that's
great
.
My biggest concern
. Has
been
and continues to be that
. Not
only what
Jonathan said about
what folks, the
nice
shiny new
car or whatever the heck folks
are advertising for folks
to
grab in from that, but
the
reality of the
situation is
that how do we go ahead
and
address this in an
area where
no one's really addressing it.
Like
it's just so
, so
ultimately we come up
with a
policy and some ideas right
there
. Someone thinks they have
a great on deer on it
, and then
we, how many times have we sat
on this dice over
the years
where you have something from
the legislature or from the
federal government that
has
serious
unintended consequences
in what they're
doing from
there as well
, so we
know
enough for what
we deal with
our cities and how they adapt
that and move
that forward. I
do want to say
that one of the
things I want to pray, I want
to appreciate Mike
for is that
I did look at the city
of
Arlington
, and I thought that
was
a
very interesting policy
and how they deal with some
things, so I try to adapt some
of those aspects to it
. There.
Do you have a red
line version
?
I do
. And what I can
do is
, is
send the red line
version. Yeah
I
think
that just
skimming
over
it
, um, what's actually
kind
of
funny is
that uh probably about
a month ago when our
city
attorney and city manager and I
started working on
the draft
that I sent
over
. I think mine
was 19 or 20
pages long. Uh,
and over the course of the
last
30 days or so as we've been
talking
about enforceability
and how to
actually
operationalize a policy like
this, was able to sort of
Simplify it
and trim it
down
,
mostly by things
that you are
added into yours, so I don't
,
so I don't disagree, but
there's a balance there that I
think we're going
to have
to
strike of
. Having everything
truly defined out to the letter
which I love
and appreciate
,
but I've also had the
conversations
around how do we
get
this entire
organism
, um,
to understand
and
fully gra,
you know, what is
, what's
expected. So one of the things
you'll notice
in here is
that
it's
, it's
less prescriptive
,
um, regarding the flexibility
for
city manager and
city
staff
because
one of the things is
that I don't want to be too
prescriptive on what you're
actually going and working for
.
But anything that's
actually,
you know, you know
, citizen
facing citizen data, I mean,
that's
. That's a lie and that's
a wall
. And so what do we do
?
What procedures, what other
aspects do
we put in that? So
Rudy, is there anything, I mean
I
, I really
, um, agree
with
COUNCILMAN Kaufman's assertion
that, you know, he's
consolidated it quite a bit and
I know, you know, I appreciate
all
the work you did
. Is there
anything in
your version that
you really
feel it needs to be
in Jonathan's version, so
. It
a
lot
attorney wording
hyphens
and
everything else, so
vendor,
vendor
data
use, right
? Like
what do we
have specifically on
there for any vendors that
we
got
Agenic ai
, um, what can it
be used to send or go in and
contact
information. What
generate ii be
utilized
for
employees
, um, but are those
things that we really need now,
or
are they things that we
could add as we're
moving
forward in this. It's a work
in
progress
. I would say that
these are things that if I
,
well, I mean, I think you know
me well enough and I've been
doing
this long enough where
it's, it's um
Everything that
I've
been advised this is
probably going about 3, and
this has
been an issue for
about
3.5 years
and actually I
want to give credit. She's not
here
Mimi Stiles
years ago
, um,
we had
a
conversation and
we
started talking about it and
let me tell you what the
impetus for
me
was
, was that I,
I know all too
well in the
legal profession that
cross-racial identification is
a real issue. That is
a
significant issue that happens
across the border and a
variety
of different aspects. When I
started
to realize kind of what
Les said
is
um regarding the
fact that
we're
training ai
models and ai systems
. On
flawed data
. And if we're
having the flaws in those days
in
the specific data itself,
then what we're inputting, what
are you garbage in
garbage out
.
So over the last, I mean, what
you're gonna
see, Caesar, is
that this is developed over
3
,
what is it
? 2026
, 3.5 years.
This is, this is me
working
through with
clients going
through information CLEs,
everything else. These are
things I'm saying, ok, this is
what I
think needs to
be to
rock bed in here with that. I,
I
, I mean, what I'd like to do
is that, if possible, is
to go
back
with Jonathan and go back
with David and
have a
conversation about that, but
we've
got
to decide that as a
council because
. We
don't have
a subcommittee on this. Right
.
Well, let me
say, first of all,
I want to
Jonathan for doing
the heavy lifting on this
. And
the
first draft is always the
hardest draft
, and
, and he, he,
he put
a lot
out
there. One
of
the things that I looked
for
specifically
in
your version,
Rudy
, because Jonathan and i
had talked
about it
as
something that
is
actually
missing, uh, and that we think
needed
to
be added was
an
audit
feature. I know you have
one
paragraph where you speak to
audits, but I
think we might
want to
strengthen that, um
.
And uh I think
you're right
there, there are
a
few
areas
where
where Jonathan and I want
to make
, I think we've agreed
on
some
additional edits some
that were, you know
, not
100%
. On
board with and we
want
to talk
about those, I
think in
in some detail
. Um
, But
I
, I, I
hear where
Councilmaniz is
coming from, you know, let's
,
let's
get
something in place
,
and then we
can, we can tweak
it later
. And the one
of the
questions I
have
, um, and I
,
and this counsel to be question
for
the
whole council is
, do
we
want
to
wait to pass
something
until
we
have
a
strong audit
provision
. Or do
we
want
to
pass something and
come
back
and do an
audit provision as a
as an
add-on later
, and I'm,
I'm agnostic
about
that. Uh, I
think we can do it. We can do
it
either way
, um, but
i think
that the
, the auditing of the
system
. One of the
Things that
has
but recently
, is that
a
very
Um
, I'm searching for
an
adjective, and
I'm coming up
short. Let's just
say it
, an
audit
, uh, can reveal
. Uh
The
Substantial problems
with
these
technologies and I think we
need to make sure that we have
a system in place
. Um
, regular
,
uh, perhaps outside as well as
inside to
make
sure that
we
don't, we don't MISS
These
things because Uh
, you know
, um
it's new to all of us
. Um
, even
the
people who are
doing it
don't really understand what
it
does
. Um
, and at least on the
bleeding edge
of it
, um, and
,
uh, you know, we need
to make
sure that the
Um
, we
have not
that we have a
performance
audit of what it, what
it does
,
and we need to
We would need to
use the technology, but we need
to make sure that
technology
doesn't trip us up
. So, yeah
,
to your point
, and you just
said it
yourself. If you look
at page 9, there's
a reason why
I put so
much
regarding vendor
data use
. Because I think one
of the concerns, one of the
issues is that
the totality of
what's being
utilized
, no
outside party receives an
independent right to
train
or
improve the
model developed on
unrelated product types, etc
.
Right there as well. You see
that list and talks about
the
specific contracts
the the
vendor disclosements
, the
non-compliance, which I think
is a key portion to that
and
working for there. You
also
feed
right
into
required vendor
contractual obligations
.
Pre-existing ip ai output
ownership, third party infringe
city
funded
deliverables,
liability
and
insurance. Um,
those are
things
that literally
there weren't, they weren't in
the previous copy and like I
said, Jonathan's saying
that
were in some iteration, and
that's why I'm
. Go back for
,
but I, I mean, you're a lawyer.
You don't
, you don't just, you
know, you bet, you know, we
don't, we don't
tell clients to
just pass something to go ahead
and in the subset, it's like do
the best you can right
now from
the onset and then go from
there as well. Well
, I
, um, I
guess
. It
would be how
much
time are we
saying would
be
between versions. If
we're
saying, ok
, let's
wait
2
weeks
until we can get something
that
is more substantial and covers
everything versus, ok, well, we
need to do something
that's
gonna take a year to, to do
that. I, I
, I'd rather wait the
two weeks and get it done
first
and you know, and then
reevaluate it in a year rather
than
I have college football
this weekend
um, otherwise I
don't see why we
can't be done
.
Otherwise, I mean, I don't see
why this can't get
done
seriously over the weekend. So
the other thing that
needs to,
that needs to be done
is the um
is
the ordinance for
a
resident
advisory committee as well,
which is not included
, I think
in either one of these, but
we've
talked about and we've
talked about it and we've
agreed to it
, so everyone on
the council were all on the
same page, and I, and I bring
that
up partially because I
don't this topic isn't
going
away and we know we have to do
the work on that piece of
it
as
well, and
so, you know, while
I
think it's important that we
get something
in place rather
quickly
because we're already
tripping over ourselves in some
of this stuff
, um
. You know
,
I'm
, I'm open to waiting
, but
to Melody's point, I think we'd
need to figure it out pretty
quick
, especially because our
city attorney and city manager
are gonna have to get
comfortable with a whole
new
version again real quick, which
is going to take time
. For them
beyond just
our
counsel's input
So I
want to be mindful of that
as
well. Um
, so
I would, I
wouldn't say I
disagree with us
tripping over ourselves over
this. I do agree that we do
need to
, uh, I, I think
honestly, I think 2
weeks is
way too long. Like I said, I
think this is something that we
can
go
ahead and, I mean
, you
you've, you
do this for a
living, we're, we should be
able to go ahead and
get this
done and knocked out
. We can't
get it approved until the next
meeting. Well, I, I want to be,
I wanna be clear with that
. We,
we want to get it
. Drafted, but
we need
the professional review
of
our attorney and our
city
manager to ensure that what any
changes are
in
fact
implementable, um. Because I
don't
want us to go say, hey,
these are all the things we
want to do
, and then we look at
it and we're like, well, that
doesn't make
any sense in our,
in our use case
, right
? That
uh
that's something that
would
require 3 new headcounts that
aren't in the budget
, right? So
I want to make sure that
. Not
only are we getting
if we
, if
we are getting
it updated, that
we're getting
a
reviewed and
solid
and that I
. That
feels
like it's
gonna take more than
2 weeks to me. So if we do it
this weekend, Mike, how long
would it take for us to be able
to go ahead and send it to you
on Monday. Can I, can I jump in
? How much free time do you
have
in
your schedule to review
another version
? Sorry
, that's
uh let let's
James uh jump in
real
quick. So this is
I've
spent
so much time on this
document, like over
the last 6
weeks, there's been
, I don't
know how many emails we've gone
back and
forth
, um i
feel like
we've
gotten it to a place
where I know that I can deliver
on it
. And
that took a
lot
of
time, a lot of time. I think
it's good. I think
. I think
it'd be easy
to adopt this
and
then also provide direction
that I add a
provision about an
audit section. I can
continue
to work
with whomever to add
that in there, but I know I can
deliver on
the policy as the
way that it stands, and it took
a lot of time to get there
.
What all that
. Well
, I do want
to a provision and I would like
Time to, I
, I don't know if
this
was
delivered
electronically and
I missed
it
or the first time, this
, yeah,
this is the first
, this was
sent
to them. I always get, you
know, I don't want to
send
anything to y'all in
general
,
ok, I mean
, I
, um, some of
the things you pointed out
, I
think are important, I
guess
,
if they
were in a
draft before
and taken out, then that's one
thing that
they were never in
the draft originally, you know
,
like, uh, you know, like I
think
. Someone who wants to
look
at
it
and
have input or
or
whatever, um, you know, can
have time to
do
so. I mean,
we'll have to use
some ai to
look at the
different versions.
He says he's got a
red light
you got a red
line already, it
already did that. So I
, I mean,
I don't know, but I mean like
some of
the things I, I think
are critical, you know
, and if
James thinks
. I
just don't
know
what else besides
the
audit,
you know, that, I mean
,
obviously Rudy
, you felt like a
number of these things were
critical
to go
ahead and data,
data privacy
and governance. I
mean, for
example, I think I
think that's addressed in here.
So part of this, one of the
deliverables
is that I'll work
with Mike
and we'll put
together some sort of a
a rider
that goes on top of. So when
these contracts come up
for
renewal, whether they're low
,
moderate, or high risk
, we
will
apply that to that
. And if it's
I
think it's if
it's moderate
or high risk
. And
they don't
accept it, then I would bring
it for discussion at high risk,
high risk
for sure only comes
to counsel moderate, though,
what we
, what
we decided on
was
basically at the
city
attorney's
discretion
that what
the vendor has
proposed
is
materially
. That's the same
or
covers the
same risks. I think,
I think the other
thing too is
like we could go back
and add
an audit thing. Personally, I
don't need
a
policy to
have
direction to do
an audit, right
? If I, if I'm
I'm looking
around and if I see 4 that say
I want to do, honestly
, I'm
gonna do it
anyways after
recent
events
, um, particularly
with our high use one
. I'm
gonna do that anyway, so you'll
need to direct me to do that.
I'm just gonna
do
it
. Um
, so I
think I'm
very comfortable with
the way the policy
reads right
now. I know I can deliver on it
and I will
most certainly make
sure to do audits
. On our high
risk stuff. I think it does
make sense
to memorialize some
of those things. I
do have one
question. I'm not sure if
this
is attorneys
being
attorneys
,
but, uh, top of page
5 on, on
,
uh, the
, the
draft watermarked
version, existing contracts
shall be brought into
conformity at
renewal extension
material change
, or
the
earliest
lawful opportunity
. I
don't know if
earliest lawful
opportunity
is
there intended
to mean
before those things or
after those things because it's
Seems like
those
things
renewal
extension, material change
should
all
be
appropriate times
to make changes. I, I
can't
imagine any other
. Scenario, so
I'm
trying to understand if
that's an earlier or
a later,
you know, because I don't wanna
I don't wanna say
, oh well, the
renewal is not for 5 years
, but
there's
a
lawful
opportunity
tomorrow so let's do it
right
after it then, and then what's
a lawful attorney and I mean
there's a couple of those
things
that's
what that's the
only one that really
struck
stuck out to me, and I don't
know if
. Yeah, I thought that
too. I
was like ok
, but
, but I
,
I do wanna are
we waiting
5
years? Yeah
. I mean
, and and
what lawful, you know
, it's
.
It's
Those are the
things that
they have the little things I
didn't mention there's
things
that can be cleaned up
, but
, um
I'm really concerned about some
of
the
privacy and some
of
the
um vendor use and not
being
prescriptive with that because
of what I've seen in
my own
client's lawsuits
. Like
it's
the
uh like there's nothing in
here. Let's put it this way.
Like I said
, I've
had 3.5
years
to develop
this. Nothing is in
here that I haven't
had
experience somewhere down the
line
, sure. So you think you
can do it in 2 weeks
? Bring it
back in 2 weeks I think I can
do it, so I'm
. Oh, I'm, I'm
gonna, I'm
gonna ask, well,
first of all, Jonathan, I know
you put a lot
of time and
effort
in
with
city
staff
. I
would ask that we expend no
more than
4
additional staff
hours on
it
, so if
we can
get a
i think
, I
think that that'd be
that'd be my
limiting factor
for y'all coming together and
meeting and knocking it out and
whatever you got at the
end is
done because you know, I'm a
big fan of
at
95% solution that
we
. Can
actually implement
and
has buy-in is a whole lot
better than 100% solution that
no one wants
to do, I think I
can, I
think that
. I could
mitigate
. Pretty substantial
amount of time because I know
how these
guys are thinking
about it, but that's not
going
to
reduce their
time
to it's
it's aggressive for them
to
like really dig into it and
understand it
. It's I don't
know what
a reasonable amount
of
in
their opinion
, but
I do
think some of
it
is you had to
estimate how many hours
you
spent on this already
? What
.
Sorry, I'm
, I'm
60. I've been
in consulting, so I
, I mean
that
it's probably been, I've
probably sat down, you know,
less
than 10 times and spent a
couple of hours on it. Ok
. Oh
.
Yeah, we're
We're, we're at a
substantial amount
of
staff
investment already
. Mike, I
assume you're probably in that
range as well
. I
So I, that was
a, that was a yes
. Yes
. I'm
sorry. Yes, sir. Yeah
. Just,
just
. For
the city for the
court for the
court reporter
.
So I really don't want
us to,
to take a
huge step back
and
then
uh our staff has a
lot of
work to get done. We've got a
lot of
demands on, on their
time. I
don't think anything
in
here undercuts what it is
. I
think what it is is buttresses
or
ads weren't concrete
enforcement on some of these
things, but, and I
think that's
the key is that, and then like
some parts that, like I said
that
. I
, I'm telling
y'all
this
like I
. Causes
me heartache
like the suspension
and
termination clause in there. I
mean, these are
things where
Mhm
. I've seen
bad stuff we
also have our
contract isn't
written well
to
cover you, then
well, yeah, and I mean
, but it
goes well, but is this
, is
this
a discussion, Rudy
, on, on
our
,
uh, standard template for
contracts
. Boy
, that because I
know we've got a standard
template for PSAs and
a
standard template for
construction, right? I don't
know, Mike
, whatever, what,
what other
templates we have
,
but uh it sounds
like, you know
a lot of what I see in there is
is
something that we MAY just
need to adopt as
a standard
I
mean, I
would hope some of it's
just
easy
to up and
lift
because um you know, just like
when we did, um
. We
changed
the
definition regarding act of
GOD
after the
pandemic, and that
was a huge
deal because we just
we need no one had defined
it
the way it should, and after
that we had
to
Following up
on
that same thread
. Is
there
anything that you
would say is
Like material to the policy
that
counsel would
. Adopt or
that
changes the
direction of
something that is in the
current agreement. And I ask
partially to
what the mayor was
saying is
If we're
, if
there's
a decent
number of
changes or
updates that we need to make to
various templates, documents
,
policies. We probably could
come back and either do a
separate resolution or just a
council directive
to implement
.
X, y
, and z changes to
the
contracts
outside of
passing
the
governance framework
today
potentially you make a great
point. Yeah, Rudy, are
your
changes, do you see them as
changing the vector or
just
changing the
uh uh the extent
is this, is it, is it
something
that you wanna
. You say, well,
it's not going the right
direction or it just needs to
go further
. I
think
there's a
it's both because you're
looking at things, for example
,
for what I said about gender of
ai, what that policy is
opposed
to agenic
ai
regarding specific
employees in the utilization
on
it
. I think the
vendor
data use
Like
Oh
. Trust me, I
yeah
,
right there as well, um
.
Required vendor congregation,
some
of these things that you
talked about, you asked about
whether or not some of
these
things can be up and lifted
,
but um
. I, I
Like I said
, I, I
would not be doing my job if I
didn't tell you like
. There's
nothing in here that I did not
think was important. Nothing in
here that
I thought um
. Wasn't
something from
the onset we
have on to set as a standard to
go ahead
and
platform moving
forward. I truly believe like
.
Yes, I think we can
, I think we
can sit down, knock this out.
We can
have something out on
Monday. I don't, I don't think
it should be like how
. Jonathan
put it, um, I don't know if
it's
a
Vulcan Maya mole
, but
um
I understanding how staff and
what
their thoughts are that as
well, but I think that we
can
,
this is not something that's
going to be
too significant for
that, particularly during a
budget season right now, which
I get
. What
was
it
everyone's
expectations that we're going
to see this for the
first time
and
. Approve it
. I'm seeing it
for the first time, so I can
say I didn't have
that
expectation
. I mean, like this
draft because it wasn't
, it
wasn't yeah, because it wasn't
included in
the agenda last
time and then when I
asked
about it
, there
, there was the,
the
desire to, the mayor did
put it on the regular
agenda as
well
, if we, and
this was this
time and
that was in the packet
yeah, yeah
, I'm. Yeah
, Rudy's
draft is brand new, but I'm
just
saying this two
weeks ago
I
didn't
see Jonathan's draft,
so this is new
in
the last few
days
. Yeah
, we're still working
on it two weeks ago, frankly.
Yeah
, that's, that's why that's
my, that's
but
it wasn't, but
it was in
the packet so it was
in the
was in the it was in the
council, it is on the regular
agenda
this evening
, um, it
sounds like we'll
have
some
time to marinate on
that over
the next little bit
, uh, and
I'm, I'm not sure I have
. Clear
consensus
yet but we'll see
what we get in the regular
agenda if we're
passing it
tonight we're
we're postponing
it to uh have some more folks
take a pass
at it. What were
you trying to say
? Well, I
, I
,
it sounds, some of the
discussion sounds like
. It was
an expectation that we
were
going to read
this for this
,
this meeting and approve
it
tonight and not have any
changes, and I'm just wondering
if that's
a
realistic
expectation like I, I would
have
expected that we would
have conversations and
that we
would have something to
change
it
and
that it
would
possibly
make sense to bring back in 2
weeks. So
coming back in 2
weeks is not outside of
my
expectations of what we were
going
to
have and discussing a
policy, especially of this
magnitude
. Which we
have
been
discussing for months, right
?
And so, um
. I
, I understand the
the
time that's been spent, and
I appreciate everyone's
time
and obviously we
wanna finish
it, put a bow on it and
be done
But I think if Rudy has
real
concerns, and I, you know, the
number of things
he's pointed
out, like I agree, you know,
these are
things that I've seen
in the business, you know, like
my clients too, that these
are
critical, um, and if they can
get
together and
, and
understand, you know, what
the
changes are, what's
been talked
about before and come back in
two weeks, then I think that's
the best thing
. To do
. Now did
you have
any
specific
recommendations
? Me, no
,
because I
didn't, you know, I'm
like I'm reading this, I'm
like
everything sounds great, but
this is not my area of
expertise
, which is why
I'm
glad other people on council
have this
area
of expertise.
Absolutely
, absolutely
. I'm
I'm
fine with doing it either way
,
and we could, we could pass it
and then come back and
and
add
the items that Rudy thinks
are
essential later, or
we can
try
to tie it
all
up at
once. If
we're going to tie it all up
at
once, there's no way we can get
that done tonight
. Right? Yeah,
and I think that's what melt
and
I
think possibly
4
weeks
because the, you know, it
, it's
however long it's going to,
once
, once
the
council people
agree
then
it's however long
it
takes
, uh, for the city manager
and the city
attorney to review
it and you know, as you pointed
out
, Mr
. Mayor, they have, they
have
a
full
schedule so it is
,
and, and I apologize. I had the
same perspective as Melody. I
thought we
were just, I thought
we were going to discuss what
was presented tonight for
Jonathan. Right there as well,
so
I
didn't, sorry y'all. No,
we're
, we're discussing, we're
discussing, uh, you're like,
what
is the
deadline that I
have to have a draft or
something, and
that's what
we'll get it. I guess I
, I
haven't heard much more of
Caesar. I
, I
really agree a lot
with, uh, what Melody said
, um,
it's, I'm ok with holding
off
and, and that way it gives us
an opportunity to be
able
to
really fully
read
Rudy's draft
that we just got today and
digest it and
see
if there's,
what, what
changes and how and
.
What we wanna do, so
. I
,
Kimberly
, uh, thank you for
asking
. Um
, of course, um, I
I
am concerned
about
the number
of hours
that have already
been
spent
on this, and then
I
keep
thinking about the priorities
that we set
. Um
, and
how
sometimes us going back and
forth
, this is, and
it's
very
important
, um, how going back
and forth is going
to take
additional time away from some
of
those priorities we
did set,
and it is
budget season. I
am
wondering
if what has already
been worked on
. Could
be
approved and
then
we build
,
right? Um
, I'm just wondering
if. If
we'll be able
to resolve
this. I don't think 4 arms is
actually reasonable. City
manager said
he's
already spent
60 hours. The
city
manager has
said he's
a
city attorney is
about the same, so I just want
to be very realistic about the
time that it's going to take
for us to create
the
document
that satisfies both, and I know
you
were working on it and I
was just sitting here
wondering
why another one was created
. No
cause I didn't want to review
,
oh, maybe I didn't say it from
the beginning
. Once you started
working with David, I did not
want
to have to worry about any
foreign issues or
anything like
that, so I was like, let me
just wait
, get whatever the
final version is, and therefore
that I'll go ahead and
give my
thoughts on the final version.
I
, I
, I mean, and for the
public, that's one
of
our
big
issues if you, and you know
,
and I know Kim brought it up a
couple of weeks ago
. If you, if
you don't hear
from us on
things
. It's
because we worry
about getting sued
. It's just
to be flat out to tell you
right there accordingly
and so
we've got to
be careful about
how we if if
we're
discussing,
we're discussing in
the public
and
we're having these
conversations because we don't
want people to
come back
and
say, explain to
them why
be
sued they remove
the prison
penalty
. That's true. That is
true. We
could actually go to
jail too as well
. Open
open
meetings
a real
thing and
so we
we are
very cognizant of
, very
aware of it, so that's why
you
don't, we're, we're very
particular about
how we operate
and work
. All right
, um, great
point. Any
other, any
other
comments on this item at
this
point? It is on our regular
agenda
. All right
, this time
I'm
gonna take us to
item 3d
.
Uh
, we're gonna retire
to
executive session on this one.
This is
deliberation regarding
real property and economic
development negotiations
pursuant to
Section 551.087 of
the Texas
government
code
related to
Project
Opera
, the
time
is
6:15. We're in
executive session. One
. Evening
It
is
6:32
. We've returned from