1 00:00:00,090 --> 00:00:15,200 [Music] citizens of havlock thanks for watching 2 00:00:13,200 --> 00:00:18,240 this video I want to take a second or two and just kind of let you know what 3 00:00:16,520 --> 00:00:23,760 you're about to watch and why we've got this video up on our website for you to 4 00:00:20,080 --> 00:00:28,560 check out so this video is actual footage from a workshop that we just 5 00:00:25,880 --> 00:00:33,320 recently had where a third party which was the the UNCC School of government 6 00:00:30,759 --> 00:00:38,160 environmental Finance group came in took our data looked at the health of our 7 00:00:35,559 --> 00:00:42,360 water and sewer systems and our finances associated with those and then put 8 00:00:40,039 --> 00:00:46,239 together a bunch of data points for us so that the board can start using that 9 00:00:44,239 --> 00:00:51,000 data to look at the future and review our system and maybe what the future 10 00:00:48,160 --> 00:00:55,680 path might be for rate structure uh deferred maintenance uh things like that 11 00:00:54,120 --> 00:00:58,719 so what we decided before that meeting started was man this is going to be 12 00:00:57,039 --> 00:01:02,920 really good information for our citizens especially those you who have been 13 00:01:01,120 --> 00:01:06,760 obviously uh very interested in your utility bill and this is two components 14 00:01:05,000 --> 00:01:10,759 of that both the water and the sewer so we recorded the actual meeting so what 15 00:01:08,680 --> 00:01:15,680 you will you're about to see is this group from the UNCC School of government 16 00:01:12,640 --> 00:01:19,320 giving us their objective information on the data that we provided them and so 17 00:01:18,040 --> 00:01:25,320 you'll see things in there like quick ratios and cash on hand and depreciation 18 00:01:23,119 --> 00:01:28,640 versus income and things like that and that data was meant to give the Board of 19 00:01:27,079 --> 00:01:32,360 Commissioners as clear a picture of possible on what the current rate 20 00:01:30,520 --> 00:01:36,360 structure will do based on the future health of our system and how we'll stay 21 00:01:34,560 --> 00:01:40,320 at the ratios that we really need to stay at for both the health of the 22 00:01:37,960 --> 00:01:43,399 system and to stay within the parameters of the local government commission and 23 00:01:42,079 --> 00:01:47,880 the state of North Carolina for our financial health for those Enterprise 24 00:01:45,040 --> 00:01:51,479 systems it's a lot of information and I understand that after you watch this 25 00:01:49,079 --> 00:01:55,360 video if you've got more questions we'd love to answer them feel free to contact 26 00:01:53,119 --> 00:01:58,680 us through our email on the website call us up at City Hall set a meeting up to 27 00:01:57,360 --> 00:02:03,280 sit down with me we'd be happy to go over the information with you 28 00:02:00,960 --> 00:02:07,439 also there'll be a lot more to follow on this over the next year so um please 29 00:02:05,640 --> 00:02:10,440 join us at Future workshops or board meetings where we're talking about water 30 00:02:08,679 --> 00:02:13,200 and sewer rates and trying to figure out what that looks like for the future and 31 00:02:11,640 --> 00:02:16,080 how we're taking care of our system enjoy your video and thank you for 32 00:02:14,879 --> 00:02:18,560 taking the time to learn a little bit more about your 33 00:02:24,280 --> 00:02:35,319 city appreciate it so I'm going to speak tonight um about the utility needs in 34 00:02:30,879 --> 00:02:39,840 general um uh I I think what I share is going to shock too many of is here 35 00:02:37,760 --> 00:02:45,360 tonight we just I think it's a good summary before we get the other folks up 36 00:02:42,159 --> 00:02:49,480 to talk about funding and whatnot so a couple of key topics that I'm going to 37 00:02:47,159 --> 00:02:52,319 hit on is your treatment capacity it's your waste water and your water plant a 38 00:02:50,920 --> 00:02:56,760 little bit about what that picture looks like and maybe uh when you need to be 39 00:02:54,400 --> 00:03:00,040 thinking about something there uh I'm going to headit on the criticality being 40 00:02:58,319 --> 00:03:05,200 sure that the facilities that we do do have continue to run at their intended 41 00:03:02,120 --> 00:03:08,840 service level um going to talk a little bit about prioritizing The wasteboard 42 00:03:06,879 --> 00:03:13,200 Collection needs that'll be a little bit of a a couple of refresher slides from 43 00:03:11,080 --> 00:03:17,400 earlier this year but I think an important message to remind us of here 44 00:03:15,840 --> 00:03:21,599 um I will hit briefly on water distribution considerations because 45 00:03:19,280 --> 00:03:25,599 quite frankly other than extensions that's not too media of a topic and then 46 00:03:23,879 --> 00:03:30,680 I'll talk a little bit about extensions and and water and waste waterer system 47 00:03:28,400 --> 00:03:35,159 expansions all right let's start with the plant stuff uh I am not going to 48 00:03:33,239 --> 00:03:40,040 read this to you the only thing you need to conclude from this is that the 49 00:03:37,760 --> 00:03:44,319 administrative code in our state provides some guidance on when you need 50 00:03:41,879 --> 00:03:50,239 to expand your waste water plant based on um flows okay and so that's what this 51 00:03:48,439 --> 00:03:54,599 says you can go back and read the Gory details but I'm going to summarize it 52 00:03:52,079 --> 00:04:01,560 here and even better in a graph in just a second so your current Wastewater 53 00:03:57,280 --> 00:04:05,879 Plant capacity is 2.25 MGD so that is the average on any month you can't 54 00:04:03,599 --> 00:04:12,079 you're not supposed to exceed that what the state says is that if you if if your 55 00:04:09,480 --> 00:04:21,160 annual average gets to be 80% of that which which is 1.8 MGD then they can 56 00:04:15,879 --> 00:04:25,639 halt growth until you get a plan uh underway uh they go on to say that if 57 00:04:23,479 --> 00:04:29,960 you're annual average gets to be 90% of your permanent capacity they can ha 58 00:04:28,000 --> 00:04:34,520 growth until you get Construction permits and what not done and so um 59 00:04:32,720 --> 00:04:39,360 those are that's the meat and the requirements that the state has in place 60 00:04:36,880 --> 00:04:48,080 so we know when we have to be uh investing in expanded Wastewater 61 00:04:43,600 --> 00:04:52,919 capacity so this graph is a graph of your Wastewater flow and a few more 62 00:04:50,479 --> 00:05:00,039 things for the last 10 years this goes through counter gear 63 00:04:55,560 --> 00:05:05,759 23 and what you see in the the dark line there is that's the annual 64 00:05:03,400 --> 00:05:11,360 average waste waterer flow going to your Wastewater Plant 65 00:05:08,039 --> 00:05:16,560 okay the top orange line is what your plant is permitted to 66 00:05:13,680 --> 00:05:20,280 treat and then you got your 90% line and your 80% line which we just talked 67 00:05:20,319 --> 00:05:29,360 about the points on this greenish line light blue whatever this is those are 68 00:05:26,280 --> 00:05:35,080 your Maxim month flows and so basically it if you were to have one of those 69 00:05:31,560 --> 00:05:39,800 Peaks go up and exceed or approach 2.25 MGD then you're at your permanent 70 00:05:36,880 --> 00:05:44,680 capacity for that month and so what we see from this graph and we don't need to 71 00:05:41,880 --> 00:05:51,000 you know get too lost in all the lines here is that you know so far we've been 72 00:05:48,199 --> 00:05:56,360 operating well under the 80% Mark for your annual averages we had a couple of 73 00:05:53,680 --> 00:06:00,199 couple of events a years a few years ago that approached it and certainly below 74 00:05:58,759 --> 00:06:03,479 90% the other thing that I would point out 75 00:06:01,840 --> 00:06:07,639 here is that for the last couple of years your flows have been relatively 76 00:06:05,280 --> 00:06:14,080 low and one of the things that we're watching closely here is is that real or 77 00:06:11,280 --> 00:06:20,360 is that a function of some drier weather or just getting lucky on a few storms so 78 00:06:18,280 --> 00:06:25,039 I mean because if this is becoming sort of the new norm and these things are 79 00:06:22,919 --> 00:06:29,000 behind us then you got more you got some growing room which would be fantastic 80 00:06:26,560 --> 00:06:34,560 news because I will tell you that when we think about funding and expenditures 81 00:06:31,960 --> 00:06:41,720 Wastewater capacity is super expensive and it would be by far the thing that 82 00:06:37,880 --> 00:06:47,759 shows up shines the brightest in your uh future Capital expenditures when the 83 00:06:44,080 --> 00:06:53,440 time comes so I mean the good news here is that even in the absence of this 84 00:06:50,280 --> 00:06:57,319 little these couple of years here you're you're certainly not in a bad bad place 85 00:06:55,560 --> 00:07:03,520 from your waste water capacity perspective um and and quite frankly um 86 00:07:01,080 --> 00:07:08,960 you know as you add houses here there I mean things things are are not likely to 87 00:07:05,960 --> 00:07:12,599 change uh very quickly if we and we'll talk more about this later but when we 88 00:07:10,280 --> 00:07:18,599 start thinking about future expansion or future growth you start thinking about 89 00:07:14,919 --> 00:07:22,759 the West End or or out on Lake Road and and inducing some growth that's when we 90 00:07:20,680 --> 00:07:26,759 got to start asking okay how much do we really have and do we have room and when 91 00:07:25,160 --> 00:07:32,360 do we need to do something about it all right so not a bad picture here here um 92 00:07:31,000 --> 00:07:36,360 again we'll keep an eye on and then see what happens but um it looks like you 93 00:07:34,680 --> 00:07:41,199 might have a little bit of Runway here before you really have to go do 94 00:07:37,919 --> 00:07:47,000 something significant uh we'll see that's good news any questions about 95 00:07:43,479 --> 00:07:49,159 Wastewater Plant capacity before I move all 96 00:07:50,400 --> 00:07:58,440 right switching the water don't need to read this either the same message is 97 00:07:56,520 --> 00:08:03,960 that um the state gives us some guidelines on when you need more water 98 00:08:00,479 --> 00:08:09,599 plant um capacity and so I don't have the same cool chart for that but I'll 99 00:08:06,360 --> 00:08:16,879 just review the numbers to with you so over at your water plant you've got uh a 100 00:08:13,400 --> 00:08:23,720 capacity of 2.8 million gallons a day all right um you still got a very 101 00:08:19,680 --> 00:08:29,680 similar 8090 rule for that so if you approach 2.24 or 2.52 it starts to 102 00:08:27,360 --> 00:08:34,880 trigger that you need to do some things uh what we see here for recent uh 103 00:08:32,479 --> 00:08:41,680 demands everything's under 2 MGD uh and your annual average is like 104 00:08:37,919 --> 00:08:46,640 one and a qu MGD so a symol restory on the water side which is you got some 105 00:08:43,640 --> 00:08:52,800 capacity there now I would say this this is true for the waste quarter plan as 106 00:08:49,200 --> 00:08:58,279 well um you your your permitted capacity is adequate okay but this second bullet 107 00:08:56,200 --> 00:09:01,560 is important that the facilities that you do have it's important that they 108 00:08:59,920 --> 00:09:07,880 continue to perform at their rated capacities right and so we build it and 109 00:09:05,440 --> 00:09:12,200 if certain things decline in their capacity or we have a few things that 110 00:09:10,279 --> 00:09:17,720 aren't working like they used to then all of a sudden it may be rated for 2.8 111 00:09:14,480 --> 00:09:22,200 or in the case of waste were 2.25 but if we don't take care of it and keep it 112 00:09:19,360 --> 00:09:27,120 working then then then maybe we can't realize that so it's Absolut imperative 113 00:09:24,880 --> 00:09:32,040 that our our RNR our rehab and rehabilitation program keep up with the 114 00:09:29,920 --> 00:09:37,920 facilities that we have and then the last bullet which is true again for both 115 00:09:34,279 --> 00:09:42,360 plants is that the timing of growth is going to really dictate your expansion 116 00:09:40,320 --> 00:09:48,160 needs and again we saw think about that waste water chart if the West End uh 117 00:09:45,560 --> 00:09:51,600 happens tomorrow afternoon and Lake Road happens Friday afternoon we have a lot 118 00:09:50,440 --> 00:09:56,200 of growth we're going to have to deal with if those things don't happen for 12 119 00:09:53,760 --> 00:09:59,920 15 years then the story is different right so that I mean it's the timing of 120 00:09:58,480 --> 00:10:04,640 those types of things is going to be a big factor in how 121 00:10:02,399 --> 00:10:11,160 quickly you have a real need for expansion all right 122 00:10:08,399 --> 00:10:17,640 um I'm going to switch gears off of the plants for a second but before I do uh 123 00:10:14,720 --> 00:10:22,640 I'm going to go back to the RNR and some of the other things that we need to be 124 00:10:20,040 --> 00:10:28,320 thinking about uh for the facilities and I I know this might be a little bit of a 125 00:10:25,000 --> 00:10:33,800 maybe a sore spot for some folks but like on the waste waterer side like skaa 126 00:10:32,000 --> 00:10:37,279 and control and some automation I mean those are the kind of things that in 127 00:10:35,519 --> 00:10:40,839 spite of the fact thankfully we don't looks like we don't need to Russ into an 128 00:10:38,720 --> 00:10:44,079 expansion tomorrow with a Wastewater Plant those are the kind of things we 129 00:10:42,519 --> 00:10:47,839 need to be thinking about investing in though so that we can be sure that that 130 00:10:46,120 --> 00:10:52,760 thing continues to run like it needs to run and we can monitor and it can be 131 00:10:49,600 --> 00:10:56,200 reliable so there are um I I don't want to paint the picture that there's not 132 00:10:54,200 --> 00:11:00,320 some needs of these facilities that are that are not insignificant there are 133 00:10:58,000 --> 00:11:04,160 needs um and we need to be thinking about those and prioritizing those and 134 00:11:02,040 --> 00:11:09,040 we've talked some about how to how to do that uh but jumping out there with an 135 00:11:07,120 --> 00:11:12,040 expansion is not the same a similar thing on the water plant are some wells 136 00:11:10,839 --> 00:11:15,200 I understand that there's some wells that maybe aren't performing like they 137 00:11:13,800 --> 00:11:18,760 once did we need to think through that and see what we need to do so there's 138 00:11:17,079 --> 00:11:23,720 stuff to do there to take care of these things and be sure they're reliable uh 139 00:11:21,240 --> 00:11:30,399 but not necessarily the expansion right now any questions about water or waste P 140 00:11:26,440 --> 00:11:33,399 plant capacity stuff before us move on to 141 00:11:36,800 --> 00:11:46,079 collection you all saw uh this slide um earlier this year when we were in for 142 00:11:43,560 --> 00:11:50,800 the retreat John st came in talk about asset management and some of the tiered 143 00:11:48,120 --> 00:11:55,120 approaches to help deal with um with the waste B collection and I just put two of 144 00:11:53,000 --> 00:12:00,079 those flies up here tonight just to remind us um kind of a teered approach 145 00:11:58,279 --> 00:12:04,839 this this high level box you may remember the dashboard we talked about 146 00:12:02,720 --> 00:12:09,279 uh that that work is underway that is going to be really just 147 00:12:07,200 --> 00:12:15,199 facilitate us understanding how the system is performing and so that's not a 148 00:12:11,360 --> 00:12:21,480 huge lift and that work uh is is underway there's a flow metering uh uh 149 00:12:19,160 --> 00:12:25,720 item that we suggested so we can start to understand where the flow's coming 150 00:12:23,320 --> 00:12:30,880 from when we do have wet weather flows is it coming from over here or over 151 00:12:27,760 --> 00:12:37,880 there and and and what is it magnitude that is something that we do um uh 152 00:12:35,399 --> 00:12:42,480 recommend and will be very important here in the 153 00:12:39,600 --> 00:12:48,760 coming really six months or so to try to get our arms around I I will say that 154 00:12:46,720 --> 00:12:54,480 you know we admittedly really didn't want to do much of that work until we 155 00:12:50,639 --> 00:12:59,760 got the current ongoing project in in service because we wanted to capture 156 00:12:57,360 --> 00:13:04,079 that flow metering quite frankly uh with the with the new system 157 00:13:01,680 --> 00:13:08,800 components and so we're there now actually within the last few days I 158 00:13:05,639 --> 00:13:16,959 think had the piece tied in there so um we're teed up to do uh get that going 159 00:13:11,760 --> 00:13:21,839 here hopefully um before too many months we get into targeted inspections okay 160 00:13:19,160 --> 00:13:27,040 this is CCTV stuff this is uh you all have your CCTV truck you go out you 161 00:13:23,920 --> 00:13:32,519 inspect sewers you you find problems and and and that is the nature of this but 162 00:13:29,519 --> 00:13:38,480 what this really is is a more routine systematic a larger scale program that 163 00:13:35,519 --> 00:13:43,079 that that that um that will insect larger chunks of the system than you 164 00:13:40,440 --> 00:13:47,120 than you can do with your own staff but again we get on our program we get ahead 165 00:13:45,399 --> 00:13:52,279 of the game and then we start making some inroads and then you have a data 166 00:13:49,600 --> 00:13:58,519 review and it ends up being sort of a a a cycle this slide right here is another 167 00:13:55,839 --> 00:14:04,120 slide that you saw earlier in the year and the just here is that we're sitting 168 00:14:00,839 --> 00:14:08,600 back here at 2024 right and and we're still playing a little bit of catchup 169 00:14:06,199 --> 00:14:12,759 here on our asset management but if we'll continue to implement those things 170 00:14:10,480 --> 00:14:16,560 that we talked about doing then we can start the learn the system we can 171 00:14:14,560 --> 00:14:20,360 identify some urgent repairs we can start to be a little bit more more 172 00:14:18,240 --> 00:14:26,320 proactive and then when you get out here in years really uh 3 four five and six 173 00:14:24,160 --> 00:14:33,959 you know the idea is that we're being a lot more proactive a lot less reactive 174 00:14:30,160 --> 00:14:38,600 now back to the funding piece um when we start looking for problems we will find 175 00:14:36,440 --> 00:14:47,279 them right and so we just got to be prepared for that and and and funed um I 176 00:14:43,880 --> 00:14:54,519 I will say though that um I the the area of the sewer that over 177 00:14:52,880 --> 00:15:00,880 the last couple of years has been replaced over there um in that um sort 178 00:14:58,199 --> 00:15:06,320 of parallel to 7 everybody Jo branch is in a pretty undesirable spot from a from 179 00:15:03,560 --> 00:15:13,639 a wet condition so I I'm really cautiously optimistic that that low 180 00:15:09,120 --> 00:15:17,240 lower flow that we saw in the um in that first graph is something that'll ring 181 00:15:15,680 --> 00:15:22,240 crew here for time to come we're going to see but um I'm I'm cautiously 182 00:15:20,560 --> 00:15:29,079 optimistic that we're going to see some some nice data um there again uh there's 183 00:15:26,480 --> 00:15:34,319 there's plenty to do and invest in to to maintain the system for sure and we're 184 00:15:31,880 --> 00:15:37,440 trying to get our arms on that I do not have a slide for the water system 185 00:15:35,920 --> 00:15:41,880 because quite frankly the water system is a slightly different animal um there 186 00:15:40,160 --> 00:15:47,000 are certainly needs and you get in the line breaks and stuff like that but it's 187 00:15:44,240 --> 00:15:49,959 it the RN our needs on the water system at least so far don't appear to be 188 00:15:48,519 --> 00:15:54,079 anywhere close to what we have on the sewer system and so for right now 189 00:15:52,279 --> 00:16:00,920 fortunately that's not something that we're having to spend too much time 190 00:15:55,600 --> 00:16:00,920 trying to identify uh needs for 191 00:16:01,120 --> 00:16:10,800 all right and then the last two slides I got and then we'll hand it over uh to 192 00:16:06,000 --> 00:16:18,319 others um this is a a a master planning map that you can see of the entire city 193 00:16:14,199 --> 00:16:22,279 um that we did some years ago uh this is the waste waterer system and the water 194 00:16:20,480 --> 00:16:26,399 system map right behind it doesn't look terribly different the bottom line is I 195 00:16:24,720 --> 00:16:31,839 alluded to this is that you know we've got some infill opportunities and some 196 00:16:28,680 --> 00:16:38,079 great and stuff here but your your real expansion of of 197 00:16:34,440 --> 00:16:43,079 service is out to the west and out to to Lake Road and so I mean I've already 198 00:16:40,440 --> 00:16:48,440 said it this is just a picture of it the same is true for the water side the uh 199 00:16:46,120 --> 00:16:55,360 the little the little bulbs run out on there as well but you know what happens 200 00:16:51,319 --> 00:17:02,240 here and what happens here by and large are going to drive the timing for when 201 00:16:57,480 --> 00:17:06,520 you have to spend big money on expansion 202 00:17:03,799 --> 00:17:10,880 right and we' got some ideas based on information we've heard from each of 203 00:17:07,919 --> 00:17:15,799 these folks in years past but you know we've also been talking about this for 204 00:17:13,039 --> 00:17:20,520 years and traing 38 has been uh different sizes over the years and so 205 00:17:18,079 --> 00:17:24,720 when the rubber hits Roo and folks ready to do something we'll we'll size up what 206 00:17:22,720 --> 00:17:28,600 the needs are and what they what what they plan to bring to us and we can 207 00:17:27,039 --> 00:17:30,840 start to see what that's going to do to us 208 00:17:31,960 --> 00:17:38,440 all right any questions about that before I head off to the I was look 209 00:17:36,320 --> 00:17:45,120 forward to the West End being first but now with i42 and the fly over there that 210 00:17:42,000 --> 00:17:50,200 puts them the farthest away from us CU they can't they can't develop that 211 00:17:47,080 --> 00:17:56,919 property until do finishes their curly cues going across the highway 212 00:17:52,480 --> 00:18:02,000 there rounds yeah no the no the other stately Pines so I I would say 213 00:18:00,280 --> 00:18:06,400 that Craven 38 probably going to come quicker because the bypass of that is 214 00:18:04,039 --> 00:18:12,400 90% done yeah yeah and 215 00:18:09,280 --> 00:18:17,919 Engineers um need to stay in engineering and not in like preferences or opinions 216 00:18:14,799 --> 00:18:24,080 for the most part but that is a that's a that's certainly a more favorable spot 217 00:18:20,760 --> 00:18:31,159 to try to serve by the city um than the West End U so if they're coming first I 218 00:18:28,159 --> 00:18:37,200 that wouldn't break my heart T so you say that some you already 219 00:18:34,600 --> 00:18:41,679 have some flow meters actually installed we do we do not have flow 220 00:18:39,760 --> 00:18:46,120 meters installed we do not have flow that's right we we will now that this 221 00:18:44,080 --> 00:18:50,559 the line project is done okay when we get to a good wet season this got some 222 00:18:48,640 --> 00:18:54,600 reliable wet weather we would be advocating to put some flow metors in so 223 00:18:52,360 --> 00:18:59,080 we can see what's cing okay all right and that is the plan yeah all right so 224 00:18:56,760 --> 00:19:03,640 Tom we've done flow meters before yes and you have all that data is is that 225 00:19:01,400 --> 00:19:07,840 scrap data now or will you compare that to what you gather with the new pipe 226 00:19:06,200 --> 00:19:10,559 yeah that's a good question we'll put some meters back in some of the same 227 00:19:09,280 --> 00:19:15,440 locations that we've had them in the past and compare before and after uh so 228 00:19:13,480 --> 00:19:20,760 we can see kind of what the bottom line flows are uh that will be of interest 229 00:19:18,600 --> 00:19:25,360 but I mean that's probably a couple of three but there's some other flow meters 230 00:19:22,840 --> 00:19:29,600 Upstream that we would want to put in uh back up closer to Pine VI maybe up 231 00:19:27,919 --> 00:19:36,440 towards Brown to see kind of what's going on there but I would say that yeah 232 00:19:33,039 --> 00:19:41,159 so this is pretty interesting and we have um the dashboard we talked about 233 00:19:38,559 --> 00:19:46,840 earlier the dashboard is going to take your Pump Station onetime data and it'll 234 00:19:44,799 --> 00:19:51,760 it'll help us to understand how those pump stations react to wet weather I 235 00:19:48,640 --> 00:19:57,679 mean it's very revealing in in in most of your systems most of this system is 236 00:19:55,240 --> 00:20:03,120 served by pump stations and so while they don't have meter on them it's 237 00:20:00,919 --> 00:20:07,360 really pretty revealing what happens in Rain by just looking at the response 238 00:20:05,360 --> 00:20:15,039 okay just just a relative response very very helpful this part of your system is 239 00:20:11,600 --> 00:20:19,600 is the gravity part of the system that we don't have that pump station 240 00:20:16,559 --> 00:20:24,360 signature for and so this down in here uh is where we would scatter out the 241 00:20:21,360 --> 00:20:29,320 meters to try to understand within that gravity system where do we have some bad 242 00:20:26,320 --> 00:20:34,039 actors so good thought on that all right other 243 00:20:31,520 --> 00:20:34,039 questions for 244 00:20:34,440 --> 00:20:40,960 Tom no all right Tom all right secured for 245 00:20:39,640 --> 00:20:44,119 now thank you [Applause] 246 00:20:46,679 --> 00:20:53,120 Tom hey everybody I'm Justin Nolan um The Project Director over at the UNC 247 00:20:51,159 --> 00:20:56,400 environmental Finance Center um come out to talk to you a little bit about the 248 00:20:54,840 --> 00:21:01,600 finances that we've seen going on in havlock I want to let you guys know we 249 00:20:58,600 --> 00:21:05,240 talk to towns all over North Carolina uh this is a conversation we are having 250 00:21:03,159 --> 00:21:09,000 with dozens and dozens of towns at any given time so a lot of what you guys are 251 00:21:07,000 --> 00:21:13,080 seeing is pretty Universal which you may already know but I thought it was worth 252 00:21:10,919 --> 00:21:16,240 verbalizing uh so we're going to look at six different pieces first the current 253 00:21:14,840 --> 00:21:19,320 hurdles I just want to talk to you guys I mean 254 00:21:17,320 --> 00:21:22,640 reemphasize uh the unique position that havlock finds itself in as a Coastal 255 00:21:20,880 --> 00:21:25,840 Community uh from a financial perspective grunning water utility uh 256 00:21:24,400 --> 00:21:29,080 we're walk through the Financial Health assessment which is kind of an overview 257 00:21:28,200 --> 00:21:34,240 of where H block utilities Finance water 258 00:21:31,600 --> 00:21:38,120 utilities finances are right now uh and what we kind of are projecting based on 259 00:21:35,799 --> 00:21:41,799 the current Year's budget uh Alicia is going to talk a little bit about the 260 00:21:39,000 --> 00:21:44,480 rates analysis um kind of looking at you the changes you've made to rates where 261 00:21:42,960 --> 00:21:48,760 we think that the Deb that's going to make talk a little bit about Community 262 00:21:46,559 --> 00:21:53,000 Trust building uh some future funding opportunities and just the significance 263 00:21:51,000 --> 00:21:57,760 of this conversation overall so um start out with talking 264 00:21:55,960 --> 00:22:00,919 about the situation uh havlock is in a unique position because like I said it's 265 00:21:59,159 --> 00:22:05,760 a Coastal Community uh Coastal communities across North Carolina facing 266 00:22:03,360 --> 00:22:11,880 uh more intense weather um increase rainfall uh we blessedly this year has 267 00:22:08,880 --> 00:22:15,840 been a low hurricane year uh but it's a uniquely low 268 00:22:13,760 --> 00:22:20,799 hurricane uh I know it might not feel like it um but you know we're seeing 269 00:22:19,120 --> 00:22:23,159 increased number of hurricanes basic take away from that is you know water 270 00:22:22,000 --> 00:22:27,320 utilities are always going to feel the direct impact of significant rain events 271 00:22:25,640 --> 00:22:32,960 and Hurricanes produce significant rain events um 272 00:22:29,039 --> 00:22:36,919 so you have a water utility that has over half and when I say reached the end 273 00:22:35,400 --> 00:22:40,520 of its useful life I'm saying you know from a financial perspective so over 274 00:22:38,440 --> 00:22:44,400 half of havock water and wastewater infrastructure has reached the end of 275 00:22:41,720 --> 00:22:49,799 its useful life as determined by it it's depreciation as an asset um the 276 00:22:47,000 --> 00:22:53,640 infrastructure that does exist wasn't built in a 277 00:22:51,279 --> 00:22:56,960 context uh that you are experiencing in other words the infrastructure that is 278 00:22:54,919 --> 00:23:00,000 in the ground right now was most of it was built in a context where you weren 279 00:22:58,679 --> 00:23:04,159 getting this many hurricanes every year and you weren't experiencing this many 280 00:23:01,360 --> 00:23:07,760 significant rainfall eventss and like I said there's an increased precipitation 281 00:23:05,679 --> 00:23:10,960 so what that means is you're running a business and that business the cost of 282 00:23:09,200 --> 00:23:15,400 running that business has escalated dramatically um and and you guys are 283 00:23:13,679 --> 00:23:18,440 kind of having to adapt to that reality and very little of that is under your 284 00:23:17,200 --> 00:23:22,159 control because you don't control the weather uh but it's it's not not it's 285 00:23:20,679 --> 00:23:25,240 not unique to you guys we've seen the state and the federal government roll 286 00:23:23,559 --> 00:23:29,320 out several programs acknowledging that all of these things are realities and 287 00:23:27,120 --> 00:23:33,520 we'll talk a little bit more about that so I just want to go through where this 288 00:23:31,640 --> 00:23:36,600 where this Le has left you financially from a perspective of the utility uh 289 00:23:35,760 --> 00:23:39,159 we're going to start with the water utility then we're going to talk about 290 00:23:37,600 --> 00:23:42,919 the Wastewater utility we're keeping their finances separate because arguably 291 00:23:41,640 --> 00:23:49,320 the water utility is in a better place financially than those is um so we're 292 00:23:47,039 --> 00:23:51,840 going to break this down by uh in key performance indicators in this case 293 00:23:50,799 --> 00:23:57,200 we're going to start with operating ratio and the big idea here is just you 294 00:23:54,600 --> 00:24:00,600 know on a very basic level are we making enough money at the water utility to key 295 00:23:58,679 --> 00:24:04,679 the Li on now this graph is showing you from 2019 to 296 00:24:02,679 --> 00:24:08,640 2023 that's based on the audited financials that we've received so this 297 00:24:06,720 --> 00:24:14,320 is you know verified the experiences and overall from this period from 2019 298 00:24:11,240 --> 00:24:18,960 2023 uh you guys were doing fantastic um St above board we look for a 1.0 we'd 299 00:24:16,320 --> 00:24:23,559 like to see 1.2 and you guys are we're even nailing that unfortunately when we 300 00:24:21,600 --> 00:24:27,320 bounce over to the projected operating ratio of the water utility based on the 301 00:24:25,279 --> 00:24:32,360 the current budget uh you're going to fall below that line of 1.0 so 302 00:24:30,679 --> 00:24:36,440 historically havlock has had a really good operating ratio uh but operating 303 00:24:35,000 --> 00:24:40,039 expenses are expected to increase significantly in this current fiscal 304 00:24:37,880 --> 00:24:44,039 year which is going to result in you know a situation where you guys are in 305 00:24:42,159 --> 00:24:47,559 the absence of significant changes and I think you've already started making 306 00:24:44,919 --> 00:24:50,880 those changes um and have a situation where you're not making enough making as 307 00:24:49,120 --> 00:24:54,720 much money as you're spending on a very basic level again when you see that word 308 00:24:53,120 --> 00:24:59,000 projected at the upper right that's that's me talking about budget not 309 00:24:56,600 --> 00:25:02,840 audited financials uh from a Debt Service ratio let me 310 00:25:01,320 --> 00:25:07,039 pause anybody have any questions on operting 311 00:25:03,880 --> 00:25:10,720 ratio all right uh our second indicator is The Debt Service ratio we're looking 312 00:25:08,720 --> 00:25:15,320 at you know can we cover the debts that we have again historically havlock has 313 00:25:13,520 --> 00:25:18,640 been extraordinarily good the highl water utility has been extra 314 00:25:16,520 --> 00:25:22,799 extraordinarily good in this department um you guys well Above The Debt Service 315 00:25:21,000 --> 00:25:27,200 cover ratio but again we find ourselves in a situation where uh projected debt 316 00:25:25,559 --> 00:25:31,200 service coverage ratio drops precipitously um um a lot of this just 317 00:25:29,559 --> 00:25:34,679 has to do with that expenses again if you're spending if you're having to 318 00:25:32,440 --> 00:25:38,360 spend more money the ratio of how much you're having to spend versus how much 319 00:25:35,880 --> 00:25:42,640 debt you have is going to change that's what you're going to be seeing here um 320 00:25:40,760 --> 00:25:46,159 so the rate recent rate rate increases are going to definitely amarate this to 321 00:25:44,320 --> 00:25:49,440 a certain extent but we also have to think about exactly what he was just 322 00:25:47,559 --> 00:25:52,679 talking about is any Capital project that you guys want to engage in going 323 00:25:50,880 --> 00:25:56,799 forward is going to push it the opposite direction so rates increases are going 324 00:25:54,559 --> 00:26:00,279 to help but when you start trying to fix the fact that a lot of your water 325 00:25:58,320 --> 00:26:04,559 utility is getting really really really old that's going to make it worse so 326 00:26:02,480 --> 00:26:08,039 that's going to shift in the opposite direction any questions about de service 327 00:26:06,640 --> 00:26:13,279 C ratio okay um the quick ratio is can we 328 00:26:11,880 --> 00:26:16,120 play our pay bills with the money we have on hand that's a really just 329 00:26:14,640 --> 00:26:22,600 looking at the the money that the utility has built up in case of Crisis 330 00:26:18,360 --> 00:26:25,919 situations again healthy and in a pretty good position so this is even taking 331 00:26:24,440 --> 00:26:31,080 into account the projections going into 2024 the quick ratio looks pretty good 332 00:26:29,080 --> 00:26:35,000 I want to ship this over though the days cash on hand which is how many days can 333 00:26:33,279 --> 00:26:40,559 we operate with the money we have right now that one is going to decline a you 334 00:26:38,600 --> 00:26:44,520 know you guys have been in an extremely healthy place with your days cash on 335 00:26:42,600 --> 00:26:47,919 hand I can't tell you across North Carolina there are very few water 336 00:26:45,640 --> 00:26:51,320 utilities that are in this position but you guys have had to spend a lot of 337 00:26:49,679 --> 00:26:54,840 unexpected money on dealing with sanitary sewer overflows and various 338 00:26:53,559 --> 00:26:59,480 other crisis obviously that's not going to affect the water side as much but uh 339 00:26:57,760 --> 00:27:02,120 you are dealing with a lot of unexpected expenses because of these high rainfall 340 00:27:00,919 --> 00:27:05,960 events because of other things that are going on with your utility which is 341 00:27:03,799 --> 00:27:10,679 diminishing the day's cash on hand if that Trend continues and you hit that 342 00:27:08,080 --> 00:27:14,320 point uh at 200 that's where you're you're looking at you know we can't keep 343 00:27:12,120 --> 00:27:19,000 our lights on for 200 days if we're in a particularly bad situation so uh that's 344 00:27:17,120 --> 00:27:23,679 something to keep an eye on um all right this is the last big 345 00:27:21,799 --> 00:27:26,640 indicator and this is the capital assets depreciated this is what I was talking 346 00:27:25,159 --> 00:27:31,679 about earlier when I said the end of their useful life so expect to useful at 347 00:27:29,360 --> 00:27:36,279 any piece of your infrastructure any piece of the water infrastructure is 348 00:27:34,159 --> 00:27:40,159 going to have a cost value associated with it obviously when is brand new the 349 00:27:38,000 --> 00:27:45,159 cost value is just the thing but just like a car loses its value as soon as it 350 00:27:42,000 --> 00:27:49,960 drives off a lot your utilities pieces are going to depreciate over time and on 351 00:27:47,760 --> 00:27:54,640 a very basic level that can be used as a measurement of how old the stuff that's 352 00:27:51,799 --> 00:28:01,399 in the ground is how old is the utility itself we like to see water utilities 353 00:27:57,519 --> 00:28:05,640 stay around 30% 35% depreciated assets meaning just over a third of all of 354 00:28:03,600 --> 00:28:10,960 their stuff has reached the end of it its useful life in the case of havlock 355 00:28:08,000 --> 00:28:13,919 water that is closer to 50% and obviously the projection isn't nearly as 356 00:28:12,440 --> 00:28:17,080 dire in that situation because what that just is going to equate to is just 357 00:28:15,200 --> 00:28:21,480 another year of age you don't have a bunch of stuff that's suddenly way older 358 00:28:20,080 --> 00:28:26,440 um but it is moving in the wrong direction so again what that means is 359 00:28:24,799 --> 00:28:30,679 you're going to need to spend money to replace that stuff which affects all the 360 00:28:28,880 --> 00:28:33,960 other things we're talking about and this isn't because you know there's any 361 00:28:32,519 --> 00:28:38,279 mistake that's been made it's just literally these things are are old and 362 00:28:35,640 --> 00:28:45,039 have to be repl after turn about of time um so just considering that you know 363 00:28:43,039 --> 00:28:49,840 anything above 30% is considered suboptimal and you guys are pushing 60% 364 00:28:47,640 --> 00:28:54,960 for 2024 where 2third of the stuff that you guys got going on is going to be 365 00:28:52,600 --> 00:28:57,880 appreciated switching over well before I go any further any questions on the 366 00:28:56,240 --> 00:29:04,360 Water Utility and finances I'm sure you guys Fair familiar with these 367 00:28:59,880 --> 00:29:09,240 numbers all right waste utility um kind of similar um although operating ratio 368 00:29:06,799 --> 00:29:13,279 for the SE utility which has had a little bit more struggle than the water 369 00:29:10,600 --> 00:29:16,480 utility has been on the was on was on the correct Trend was on the upward 370 00:29:14,760 --> 00:29:20,600 Trend uh but recent projections are going to put it um deeply underneath 371 00:29:18,840 --> 00:29:27,120 that line of making that money to stay open again this is correlated with 372 00:29:22,840 --> 00:29:32,000 Rising expenses for the sewer um again current rate changes should should help 373 00:29:30,039 --> 00:29:34,720 um but this is where you're this is where you headed without you know 374 00:29:33,440 --> 00:29:38,679 without any changes made this is just based on the 375 00:29:35,760 --> 00:29:43,320 budget um debt service coverage ratio you guys obviously paid off some debt on 376 00:29:40,919 --> 00:29:45,600 the Wastewater side from9 2020 you got pretty much to the point where you are 377 00:29:44,320 --> 00:29:50,880 in a pretty comfortable position uh however the debt service 378 00:29:48,840 --> 00:29:53,880 coverage ratio again is is likely to decline and that goes back to again the 379 00:29:52,519 --> 00:30:01,600 same factors that affect the water utility just expenses um quick rati IO 380 00:29:59,399 --> 00:30:05,840 still staying pretty fluid it's healthy but the fluidity is reducing uh they're 381 00:30:03,919 --> 00:30:11,279 having they have less less money to play with right now than they have before uh 382 00:30:08,240 --> 00:30:17,440 D's cat on hand you guys are seeing a trend right now so again um the recent 383 00:30:15,600 --> 00:30:21,320 projections put you guys at a position where you know if if you weren't taking 384 00:30:19,640 --> 00:30:26,440 in any money more any more money the sewer utility would only have about 100 385 00:30:23,760 --> 00:30:31,840 days of Runway which is super unsustainable in the long run 386 00:30:29,320 --> 00:30:35,960 uh and then the percent C Capital assets depreciated uh this one's even more 387 00:30:34,519 --> 00:30:42,200 significant than the other side of things we have um 50% 2019 by 2024 I 388 00:30:40,799 --> 00:30:47,240 apologize for the the graph flipping upside down but again it's approaching 389 00:30:44,640 --> 00:30:51,960 60% it's probably a little bit older than the water utility um which will 390 00:30:50,559 --> 00:30:58,120 again require Capital Improvement projects to fix so uh I know I've said a 391 00:30:55,360 --> 00:31:02,320 whole lot of stuff here uh but the big takeway that I really want you to get 392 00:30:59,360 --> 00:31:07,000 from all these just Financial numbers is the last year or so has significantly 393 00:31:05,039 --> 00:31:13,480 derailed the financial position of both the water and wastewater utility um 394 00:31:10,240 --> 00:31:18,159 havlock is existing in a geographic space that has become a more extensive 395 00:31:16,159 --> 00:31:21,440 Geographic space to want run a water utility and is dealing with unique 396 00:31:20,039 --> 00:31:25,840 pressures that other parts of the state and other part of the country just don't 397 00:31:22,799 --> 00:31:30,639 have to deal with um you know pick your hazard hurricanes increase rainfall 398 00:31:28,039 --> 00:31:34,679 saltwater intrusion across the board all those things cost money and we we'll 399 00:31:32,360 --> 00:31:39,559 require you guys to be proactive exactly as the engineering team has talked about 400 00:31:36,760 --> 00:31:43,120 um and rates will likely need to be steadily increased over the next 10 401 00:31:41,279 --> 00:31:48,720 years to combat you guys are are fighting both inflation and depreciation 402 00:31:46,240 --> 00:31:52,600 so just the general cost of things being more expensive and also the fact that 403 00:31:51,200 --> 00:31:57,320 the water utilities getting older and falling apart both those things have to 404 00:31:54,360 --> 00:32:00,840 be dealt with you also have severely dented your utility fluidity in other 405 00:31:59,399 --> 00:32:06,039 words you spend a lot of your cash on hand to deal with urgent crisis moments 406 00:32:04,000 --> 00:32:08,919 and you would like to get back to a position where you can deal with other 407 00:32:07,559 --> 00:32:12,440 crisis moments if you're going to have to deal with them yeah and you need to 408 00:32:10,919 --> 00:32:15,799 update your infrastructure and it might not be as big as you know a whole 409 00:32:13,880 --> 00:32:20,080 wastewater treatment facility kind of upate your infrastructure but certainly 410 00:32:17,320 --> 00:32:26,080 getting ahead of the problems instead of constantly Happ on a general rule of 411 00:32:22,519 --> 00:32:30,679 thumb reactivity is a lot more expensive than proactivity it doesn't always feel 412 00:32:28,600 --> 00:32:35,799 like it but you end up spending much more money on the back end so before we 413 00:32:33,600 --> 00:32:42,120 get to the race analysis any questions about just the general state of water 414 00:32:38,559 --> 00:32:48,000 and wastewater finances you board any questions all right I have I had a few 415 00:32:44,320 --> 00:32:53,120 For You Justin before we jump on yeah so on the just for context purposes since 416 00:32:50,799 --> 00:32:57,360 you guys look at this stuff in multiple places the the capital assets 417 00:32:55,720 --> 00:33:03,080 depreciation that you see in water and sewer I guess one question for both of 418 00:32:59,519 --> 00:33:07,360 them is is being off that threshold pretty common I mean I feel like most 419 00:33:04,760 --> 00:33:13,240 systems around us are at 50 60 or better not that we like no a great question so 420 00:33:10,519 --> 00:33:20,120 yes uh across North Carolina very few systems we're kind of 421 00:33:16,880 --> 00:33:23,200 had a reckoning point right now we're like I said we work with dozens of 422 00:33:21,240 --> 00:33:27,279 programs does the systems many of them are desperately 423 00:33:25,639 --> 00:33:31,919 trying to deal with the consequences of having to the point where they're at 50 424 00:33:28,840 --> 00:33:36,399 or 60% yeah that's very common uh it's but in every situation the reason 425 00:33:33,480 --> 00:33:41,679 they've called us in is because having gotten to that point uh they have really 426 00:33:39,799 --> 00:33:45,320 bad problems you know they have increased flooding they have you know 427 00:33:43,519 --> 00:33:50,159 unsustainable levels of ey and ey they have which pick your poison uh and it 428 00:33:48,440 --> 00:33:55,000 all comes back to we didn't want to raise rates for 15 or 16 years so now we 429 00:33:53,320 --> 00:33:59,799 either have to jump this huge rates increase or we have to scramble to find 430 00:33:57,799 --> 00:34:04,519 funding or whatever please help us find funding which is luckily I mean that's 431 00:34:01,519 --> 00:34:09,079 what we do but the point is like that is a yes it's common but it's common in 432 00:34:07,480 --> 00:34:12,359 like the worst possible way and it's part of the reason why the bipartisan 433 00:34:10,280 --> 00:34:15,440 infrastructure law was put in place was because America's infrastructure is 434 00:34:14,320 --> 00:34:18,560 getting old I was going to say it's not just North Carolina either no no 435 00:34:17,000 --> 00:34:23,599 absolutely not we work with the entire Southeast so this is this is everywhere 436 00:34:21,879 --> 00:34:27,359 and I would so to the board I just I asked that question as context not as an 437 00:34:25,960 --> 00:34:30,639 excuse to say oh we're like everyone else we can let that go cuz I think you 438 00:34:29,079 --> 00:34:35,280 guys still have to set a standard for what you want or what your priority is 439 00:34:32,919 --> 00:34:39,240 your level of service so staff can can Implement to that level U but I I did 440 00:34:37,720 --> 00:34:43,320 want to put that in context because as you guys know at every listening session 441 00:34:40,760 --> 00:34:47,000 for the last two years I have told all the public that we are no different than 442 00:34:45,000 --> 00:34:50,879 every else boards in the past have kicked this can down the road because 443 00:34:49,359 --> 00:34:54,240 believe it or not contrary to popular belief among our citizens we toil a lot 444 00:34:52,679 --> 00:34:58,240 over what to charge for water and sewer and we're consistently undercharging in 445 00:34:56,280 --> 00:35:01,720 order not to affect your citizens and then this is where you end up it's easy 446 00:35:00,320 --> 00:35:05,040 cuz the infrastructure is hidden you don't have to look at it right and so 447 00:35:03,280 --> 00:35:08,800 you can say out of out of mind it still works we can ignore it the other 448 00:35:06,800 --> 00:35:12,400 question so I understand yes please one thing I just 449 00:35:10,839 --> 00:35:17,480 want to also add to that is that you guys like I kind of alluded to 450 00:35:15,079 --> 00:35:23,400 you guys more than everybody else also deal with unique weather hazards 451 00:35:21,440 --> 00:35:28,040 that make kicking it down the road like even more of a potential issue and can 452 00:35:25,960 --> 00:35:32,480 make when things start to get really old they can make those glaring issues like 453 00:35:29,920 --> 00:35:36,000 very obvious very abruptly right like I mean I and I is a great example right I 454 00:35:34,200 --> 00:35:41,240 and I if you're in a dry area of the state not a big deal I and I if you get 455 00:35:38,240 --> 00:35:45,680 it here um you know one one hurricane event that shows up like 456 00:35:43,079 --> 00:35:50,560 a water getting your pipes the other thing that I just want to add too is 457 00:35:47,079 --> 00:35:55,960 that so when I look at this so your days cash on hand you guys are s like for the 458 00:35:53,400 --> 00:35:59,440 Last 5 Years right 19 to 23 you guys are super high and some some cases I 459 00:35:58,200 --> 00:36:02,800 actually look at that I'm like you actually have too much cash I want to 460 00:36:01,119 --> 00:36:06,400 see you guys spending that cash on your infrastructure because of this very 461 00:36:04,920 --> 00:36:11,560 thing right that your assets are depreciated but because you're having to 462 00:36:08,480 --> 00:36:16,119 spend this money in a reactive way as thisa cash on hand is going down your 463 00:36:14,400 --> 00:36:21,040 assets aren't going down right like you're not actually able to do those 464 00:36:18,440 --> 00:36:24,440 improvements so if if I had seen the cash go down but this jump up because 465 00:36:23,040 --> 00:36:28,680 you've replaced some of those things that need replacing I'd be like yep A++ 466 00:36:27,000 --> 00:36:32,480 right youve used that cash in a productive way to get those assets back 467 00:36:30,480 --> 00:36:36,440 to kind of less depreciated because you'd be replacing things but since I'm 468 00:36:34,200 --> 00:36:40,280 not seeing that that's what causes the the bigger flag right is that you're 469 00:36:38,000 --> 00:36:43,760 having to react and spend more money on the reactivity than the productivity but 470 00:36:42,000 --> 00:36:48,560 you're right this isn't uncommon we see this all over the place unfortunately 471 00:36:46,359 --> 00:36:55,079 I'm tracking on that the last I think my last question right now is so on the 472 00:36:51,680 --> 00:36:59,280 Wastewater one I completely understand the comment of operating expenses or 473 00:36:57,599 --> 00:37:02,680 expected to increase significantly over the next year and as a result you know 474 00:37:00,960 --> 00:37:08,359 we're going to see those quick ratios and operating R ratios change on the 475 00:37:05,079 --> 00:37:12,000 Water System though we haven't I mean while our numbers have changed in a 476 00:37:10,000 --> 00:37:17,520 downward Trend minor over the last few years what is driving like on that I 477 00:37:15,560 --> 00:37:20,520 think it's the it might be your first slide where it's operating expenses are 478 00:37:19,160 --> 00:37:24,520 expected to increase significantly during this fiscal year which is showing 479 00:37:22,560 --> 00:37:29,599 our operating ratio projected to drop below that that one threshold what 480 00:37:28,200 --> 00:37:32,400 what's driving that was that something we gave them or was that something you 481 00:37:30,920 --> 00:37:34,480 guys saw that we did because a water system that hasn't been something that's 482 00:37:33,520 --> 00:37:37,680 been raising alarm that was the only thing that caught my 483 00:37:35,720 --> 00:37:42,440 attention all right so our numbers are purely the result of looking at the the 484 00:37:39,880 --> 00:37:47,079 projected expenses on the budget so you mean like cost of chemicals even or you 485 00:37:44,560 --> 00:37:53,720 talking about Rising inflation costs or this would just be so the the 19 to 23 486 00:37:50,359 --> 00:37:59,160 are using your audited financials so these like accountants have already gone 487 00:37:55,400 --> 00:38:03,000 through versus 24 this projected year is using kind of estimated numbers so it 488 00:38:01,599 --> 00:38:06,920 could be that those numbers are going to shift a little bit once the auditor 489 00:38:04,520 --> 00:38:11,040 finishes the audit okay so I'm making sure that we take those numbers BR to 490 00:38:08,960 --> 00:38:14,160 Sal that's kind of what I was getting at can I take them I mean and I I wouldn't 491 00:38:12,800 --> 00:38:18,240 say totally take them with the great Sal but they they definitely might not be as 492 00:38:16,079 --> 00:38:21,839 severe as we want to give you the worst case scenario okay well that that's what 493 00:38:20,200 --> 00:38:26,079 we're used to and that's why I asked that because I mean that is kind of what 494 00:38:23,760 --> 00:38:31,160 we expect of our of our staff when they we talking about the financial things is 495 00:38:28,119 --> 00:38:35,680 our revenue is is always underestimated and our expenses we always try to look 496 00:38:32,880 --> 00:38:38,800 at the worst case scenario so understood say when we were getting 497 00:38:37,560 --> 00:38:42,520 those numbers when we were in that budg of time we were anticipating the 498 00:38:40,800 --> 00:38:46,359 department spending the amount that they had because they still had so much year 499 00:38:44,240 --> 00:38:49,040 left to go and we didn't know exactly where we were going to end up okay 500 00:38:47,839 --> 00:38:53,119 understood that was the only thing that jumped out at me as a little bit like I 501 00:38:51,000 --> 00:38:55,720 wasn't expected so no we but we definitely want to put I mean this first 502 00:38:54,359 --> 00:38:59,200 indicator is the first indicator for a reason right like operting ratio is 503 00:38:58,040 --> 00:39:02,240 and that's every if you're running a lemonade stand and you're not making as 504 00:39:00,760 --> 00:39:05,319 much money as you're spending you're not going to stay open for long so we 505 00:39:03,920 --> 00:39:08,319 definitely put it out front and worst case scenario we're wrong and you guys 506 00:39:06,520 --> 00:39:11,880 are in better shape that would be great okay other any other questions y'all 507 00:39:10,520 --> 00:39:16,079 follow up while we were running through those and as soon as the audit is done 508 00:39:14,440 --> 00:39:20,960 we can update these numbers too so you have a better sense of fiscal year 24 509 00:39:18,920 --> 00:39:25,319 okay and if you don't know we do our audit really really fast we might have 510 00:39:22,319 --> 00:39:30,119 those numbers in like very soon right oh yeah we're we're early Auditors 511 00:39:27,880 --> 00:39:34,000 man we don't we don't mess around that's great all right so I'm just going to 512 00:39:31,359 --> 00:39:38,400 touch touch space on um the race analysis that we did um all right so 513 00:39:36,760 --> 00:39:41,400 just as some background knowledge just putting up the number of customers you 514 00:39:39,920 --> 00:39:45,920 guys have that were included in the rat analysis um you guys do track your 515 00:39:43,440 --> 00:39:49,480 residential commercial and institutional users but you're not charging based on 516 00:39:47,640 --> 00:39:55,040 that you're charging based on the PPE size um so just highlighting your inside 517 00:39:52,079 --> 00:39:59,280 3 and a/4 that's your biggest um group of folks there with about 5,000 those 518 00:39:57,680 --> 00:40:04,560 other there are there if you want to reference them at any point um so you 519 00:40:02,640 --> 00:40:09,160 guys did do some rate increases isn't 2025 which I know can be hard on the 520 00:40:06,640 --> 00:40:13,040 public side and we can talk through some of those challenges and how we can do 521 00:40:11,000 --> 00:40:19,240 communication with the the public and community so that there's some um better 522 00:40:15,680 --> 00:40:22,880 understanding um but you did do the 10% increases on both base and volum metric 523 00:40:21,599 --> 00:40:27,480 and that was under the water and it was 25% on the sewer I didn't put that in 524 00:40:25,440 --> 00:40:32,319 there sorry um and then your current steps you guys have an allowance of th 525 00:40:30,040 --> 00:40:36,920 um no we decided that was not the case I'm so sorry um I need to change that 526 00:40:35,119 --> 00:40:41,280 and get that back to you guys um but then you have these other other steps at 527 00:40:38,560 --> 00:40:46,880 3,000 6,000 9,000 gallons um so those are just how the the race structure is 528 00:40:43,920 --> 00:40:52,560 changing you guys have increased um volumetric charges at those greater 529 00:40:49,839 --> 00:40:57,920 Downs um and so for everybody up here if you don't remember the average house is 530 00:40:54,800 --> 00:41:03,560 in that 3,000 to1 to 6,000 range yeah you're single your people that live by 531 00:41:00,520 --> 00:41:08,160 themselves or maybe just a couple um might be under that 3,000 more 532 00:41:05,839 --> 00:41:12,240 constantly but our average is 5,000 so most people with the family are in the 3 533 00:41:09,520 --> 00:41:16,720 to 6,000 that second year great thank you for that that helpful um okay so I 534 00:41:14,760 --> 00:41:24,040 did pull up some cons consumption histograms so what this is just showing 535 00:41:19,680 --> 00:41:28,520 is is this the green the the little any that's the one that blows it all up yeah 536 00:41:26,240 --> 00:41:31,880 yeah um okay so the consumption histograms is basically showing um like 537 00:41:30,599 --> 00:41:36,319 you were just indicating right like maybe I'm a household of four I'm 538 00:41:34,240 --> 00:41:39,839 consuming 4,000 and so I'm actually in this like four to 5,000 so this is the 539 00:41:38,280 --> 00:41:43,839 number of customers that are falling within each of these buckets of 540 00:41:41,280 --> 00:41:48,359 consumption per month so you see here on this 3/4 inch which is most likely to be 541 00:41:46,040 --> 00:41:53,280 residential you've got kind of this 0 to 1,000 a good chunk of folks here the 542 00:41:50,720 --> 00:41:56,839 biggest chunk is you know the 1,000 to 3,000 um and then kind of gradually 543 00:41:55,560 --> 00:42:00,440 dropping off right you don't have as many folks folks that are using more 544 00:41:58,000 --> 00:42:04,720 than 12,000 gallons a month in that User Group um on the 1 to 6 in rate which is 545 00:42:03,359 --> 00:42:08,720 going to be more likely to be your commercial institutional folks you still 546 00:42:07,119 --> 00:42:13,560 have some here at this lower level but you're you've got a lot more users that 547 00:42:10,640 --> 00:42:18,280 are coming in at that 12,000 a month um and then your sewer only I 548 00:42:15,839 --> 00:42:22,960 popped up here cuz you do have 100 folks in there um and you can see this is 549 00:42:20,559 --> 00:42:27,480 pretty similar here with the the 3/4 inch r that you've got most folks are 550 00:42:25,280 --> 00:42:30,720 using at that lower level not the reason I wanted to throw this in here is 551 00:42:28,760 --> 00:42:34,119 because if at any point one of the things that we do is we come in and show 552 00:42:32,760 --> 00:42:37,760 you like this is what you're doing but if you want to make any changes if 553 00:42:35,760 --> 00:42:41,319 you're trying to focus on affordability or business friendly practices or 554 00:42:40,000 --> 00:42:45,480 conservation right there's different ways that you can structure your rates 555 00:42:43,559 --> 00:42:49,839 right you just did a 10% increase and 25% I'm not going to tell you to change 556 00:42:47,359 --> 00:42:53,680 them right now CU but if you if there are other things you guys want to focus 557 00:42:51,559 --> 00:42:56,760 on want to prioritize we can run through all these different scenarios and the 558 00:42:54,960 --> 00:43:01,559 tools that we have to show you other options right so if we're concerned 559 00:42:58,800 --> 00:43:05,359 about your um bringing in some additional money to be able to pay for 560 00:43:03,520 --> 00:43:08,480 some of these infrastructure challenges it might make sense for you guys to 561 00:43:06,760 --> 00:43:12,160 switch because you guys have are tracking residential commercial 562 00:43:10,200 --> 00:43:16,440 institutional it might make sense to switch and instead of charging by the 563 00:43:14,200 --> 00:43:20,880 pipe size to instead charge by the user type so you can see here residential is 564 00:43:18,680 --> 00:43:25,559 falling very much in that 3/4 inch that same kind of display right where we've 565 00:43:23,119 --> 00:43:29,319 got one of 3,000 is most common and very few here above 12,000 but if you jump 566 00:43:28,040 --> 00:43:33,319 over to the commercial and the institutional which is just 18 folks so 567 00:43:31,440 --> 00:43:38,319 just making sure you realize the sample size is much smaller here but you have 568 00:43:35,880 --> 00:43:42,200 much greater usage at these high categories right so if you're concerned 569 00:43:39,960 --> 00:43:45,280 about conservation at all um if you're concerned about trying to bring in some 570 00:43:43,480 --> 00:43:48,920 more money it could be that you're changing your rate structure to try to 571 00:43:47,040 --> 00:43:52,760 get you know some additional funds from this high bracket um maybe from the 572 00:43:51,240 --> 00:43:56,200 commercial institutional side that can afford it um rather than some of the 573 00:43:54,640 --> 00:44:00,440 residential folks or folks that are on limited income so just just throwing 574 00:43:58,599 --> 00:44:03,559 that out there as things to be thinking about as you're looking at rates not 575 00:44:02,240 --> 00:44:07,079 saying you should do this it's really up to you guys but just just something that 576 00:44:05,400 --> 00:44:11,319 I observe when I was looking at I don't think we've ever done it that way before 577 00:44:08,680 --> 00:44:15,599 have we no not as long as I've ever I'm interesting which is interesting because 578 00:44:13,319 --> 00:44:20,680 most I would say most folks that we work with split it on like the type of user 579 00:44:18,440 --> 00:44:24,880 so resal commercial instead of the tiered rate for just gallons and size of 580 00:44:23,040 --> 00:44:27,920 pipe you would have a different price set for your commercial a different 581 00:44:26,359 --> 00:44:32,880 price set for your institutional based on gallon yeah I would even just like 582 00:44:30,720 --> 00:44:37,599 remove the pipe size completely just drop all that just do like residential 583 00:44:35,520 --> 00:44:41,920 commercial institutional or even just commercial institutional as one um and 584 00:44:40,079 --> 00:44:46,200 then like inside outside tends to be the other denominator that we see if just 585 00:44:44,359 --> 00:44:50,680 cuz it's you're closer proximity it's easier to get it's you know easier to 586 00:44:48,559 --> 00:44:54,040 get water and collect waste water from folks that are within the boundary so 587 00:44:52,440 --> 00:45:00,960 those are those tend to be the two that we see um breakdowns most often 588 00:44:58,520 --> 00:45:05,680 some food for a thought for you guys um okay so the analysis that we did um uses 589 00:45:03,599 --> 00:45:10,160 11 months of billing data August of 23 to June 24 um I just want to highlight 590 00:45:08,400 --> 00:45:14,319 that we're likely underestimating the consumption which means that we're 591 00:45:11,480 --> 00:45:19,760 actually underestimating the revenue um because we're missing key warmth warm 592 00:45:16,839 --> 00:45:23,440 month of July right so um with 12 months a day we get a little bit more uh 593 00:45:21,559 --> 00:45:26,720 picture but just highlighting that this revenue is probably a little bit lower 594 00:45:25,000 --> 00:45:32,400 because people are consuming a little bit more in July typically um I did 595 00:45:29,200 --> 00:45:35,599 build in a 5% increase year over-year um just to try to show kind of what that 596 00:45:33,960 --> 00:45:39,720 would look like and then a few assumptions that we include in our tool 597 00:45:37,200 --> 00:45:44,800 is um this 2% of uncollected bills per year um some folks have more around one 598 00:45:42,480 --> 00:45:49,720 but we try to again kind of buffer to expect a little bit worse of a scenario 599 00:45:47,920 --> 00:45:54,119 uh we do build in a negative um average consumption per year 600 00:45:52,559 --> 00:45:57,680 so that's a change so you think about people putting in more efficient um 601 00:45:56,480 --> 00:46:01,880 washers dishwashers those sorts of things are 602 00:45:59,200 --> 00:46:06,359 going to just kind of generally decrease consumption um we also put in a 603 00:46:03,839 --> 00:46:11,400 reduction so ative 3% it's a reduction sorry with a 10% increase in rates so 604 00:46:08,920 --> 00:46:15,319 what we've seen is that if you build up rates you know keep boosting them up 605 00:46:13,559 --> 00:46:19,040 people are likely to be going to be conserving a little bit more so we build 606 00:46:16,960 --> 00:46:23,200 in a little bit of that negative um consumption to account for that kind of 607 00:46:20,760 --> 00:46:27,920 conservation even within their own home um and I have built in a 5% inflation 608 00:46:25,680 --> 00:46:31,839 also um on the spense side because we need to be realistic that you guys are 609 00:46:30,000 --> 00:46:36,000 facing the same inflation rates that all of us are and actually on the 610 00:46:33,240 --> 00:46:39,720 construction side even more so so I'm making sure that that's 611 00:46:37,839 --> 00:46:43,160 consistent um and then this is just sorry this is the same number of 612 00:46:41,440 --> 00:46:47,400 customers here but I just wanted to show that I have included just mild growth 613 00:46:45,079 --> 00:46:52,280 here and this is based on the numbers of of customers that you guys have seen 614 00:46:48,680 --> 00:46:57,640 over the last year um so we've just got -22% of those inside 3/4 in and then 615 00:46:55,720 --> 00:47:02,079 we've got two positive ones that 1 in and that 2 in um but otherwise it's I've 616 00:47:00,119 --> 00:47:05,640 kept it at zero and this is something if you guys are experiencing growth and you 617 00:47:03,680 --> 00:47:08,559 feel like well let's actually include a little bit more because we think that 618 00:47:06,800 --> 00:47:12,200 we've got more growth or Hang on we're not we don't have that much growth we 619 00:47:10,160 --> 00:47:16,400 can adjust these so that you can kind of see over time what you think is going to 620 00:47:14,000 --> 00:47:19,720 happen um I have not included any connection or late penalty fees so 621 00:47:18,400 --> 00:47:23,400 that's another little bucket that will add a little bit of Revenue um that I 622 00:47:21,960 --> 00:47:29,599 haven't included just to kind of be on the safe side other The Rue I got a 623 00:47:26,280 --> 00:47:33,760 question go Ahad go just so like if you for those cities that actually do the 624 00:47:31,240 --> 00:47:37,920 rat separately than the way we do it do they tend to see and I know this is 625 00:47:35,559 --> 00:47:44,000 generalization but do they tend to see the residential rates be lower or higher 626 00:47:41,160 --> 00:47:48,599 on average than a system like this typically the residential rates would be 627 00:47:46,119 --> 00:47:51,400 lower than the commercial and Industrial because you're TR most of the folks 628 00:47:49,839 --> 00:47:55,520 doing this are trying to think about affordability fixed income right they're 629 00:47:53,839 --> 00:47:59,280 really trying to be cognizant of folks that it's it's harder vers 630 00:47:57,559 --> 00:48:02,480 a business which of course lots of small businesses could still struggle with 631 00:48:00,559 --> 00:48:05,680 budgeting but they're able to adjust you know their annual budgets to try to 632 00:48:04,000 --> 00:48:09,800 account for some of those changes a little bit more easily or some of the 633 00:48:07,319 --> 00:48:13,640 bigger industrial folks um or your schools things like that right there's 634 00:48:11,559 --> 00:48:17,480 there's more creative ways to kind of work with those rates versus a resident 635 00:48:16,200 --> 00:48:21,480 which has a little bit more of a challenge Mr manager can we do a feed 636 00:48:19,480 --> 00:48:23,880 change I I am sorry I'm try to remember can we do a fee change throughout the 637 00:48:22,720 --> 00:48:28,640 year or is this one of the ones that's tied to the budget this is tied to the 638 00:48:25,280 --> 00:48:28,640 budget got 639 00:48:28,800 --> 00:48:33,440 but we can you know if that's something you guys are interested in kind of 640 00:48:31,680 --> 00:48:37,000 playing with that's something that we can easily kind of run a few scenarios 641 00:48:35,599 --> 00:48:40,839 to help show you what what that might look like um especially since you're 642 00:48:39,520 --> 00:48:44,359 already tracking the residential commercial that makes it a lot easier 643 00:48:42,640 --> 00:48:47,839 for me to just go ahead and plug and and see what we can come up with if that's 644 00:48:45,880 --> 00:48:56,559 of Interest right I know I'd be interested okay great um okay so on the 645 00:48:52,119 --> 00:49:00,160 Water Utility side um this is so this is this staying with the existing rates 646 00:48:58,079 --> 00:49:05,720 this is blue and this is if you were to use FIS leader 647 00:49:02,839 --> 00:49:09,680 23 so this is what you guys had already been using not including this new rate 648 00:49:07,760 --> 00:49:13,799 increase that you guys did um and this is if you were just staying with those 649 00:49:11,359 --> 00:49:17,240 existing rates same number of customers all those assumptions that I already 650 00:49:15,079 --> 00:49:23,440 made you know you'd be bringing in right at that kind of break even Point um and 651 00:49:20,240 --> 00:49:27,160 then this is with those new rates um which is good so we're we're seeing 652 00:49:25,040 --> 00:49:31,359 above the expense line with the new rates the increase that you guys just 653 00:49:28,799 --> 00:49:36,240 did um which I love this is this is ideal if I had all my towns like this it 654 00:49:33,720 --> 00:49:41,440 would be great however this is using the expenses from fiscal year 2023 now what 655 00:49:39,440 --> 00:49:44,480 Justin was just showing you is that they're not complete audited financials 656 00:49:43,480 --> 00:49:49,559 right so we have to take with that for the grain salt but if we put in the 657 00:49:47,119 --> 00:49:53,480 expenses from fiscal year 24 which were kind of projected we're now kind of 658 00:49:51,559 --> 00:49:57,520 missing that Mark right there was a big increase in expenses on the water Side 659 00:49:55,200 --> 00:50:01,480 by about a million and a half um so this is where it's like well okay 660 00:49:59,839 --> 00:50:06,040 we don't have audited financials so this isn't exact but seeing this makes me 661 00:50:04,760 --> 00:50:11,119 feel like okay we're still not quite getting there if those expenses are true 662 00:50:08,680 --> 00:50:15,079 and and and you keep in that general direction now if this was kind of a fluk 663 00:50:12,839 --> 00:50:18,599 year and your expenses go back down next year right then we're not going to see 664 00:50:16,559 --> 00:50:22,319 this big of a discrepancy but if if you guys if the expenses kind of keep going 665 00:50:20,480 --> 00:50:27,400 in this Direction that's when it's going to be a bit more of a concern it'd be 666 00:50:24,359 --> 00:50:34,280 hard to believe that it was a fluke with 60% of our you know 60 you got 60% of 667 00:50:32,480 --> 00:50:39,480 you know depreciated assets in the ground so it's not a fluke yeah say it' 668 00:50:37,040 --> 00:50:43,640 be hard I mean we did spend an exorbitant amount of money which you 669 00:50:41,599 --> 00:50:47,760 know hopefully as we've been talking about since the retreat you know we're 670 00:50:45,599 --> 00:50:50,920 changing the trajectory of that right but it's not going to be abrupt right 671 00:50:49,640 --> 00:50:56,920 that trajectory is going to change over a 5 6 8 year period not over a one or 672 00:50:53,640 --> 00:51:02,079 twoe period Josh no you answer my question okay um so yeah so while the 673 00:50:59,480 --> 00:51:06,000 increase does it helps right this this doesn't feel it feels trivial based on 674 00:51:03,839 --> 00:51:11,400 the size of the bars but the increase helps um and like I said this is a 675 00:51:07,799 --> 00:51:16,240 built-in 5% increase over the years so you know if you stick with this kind of 676 00:51:13,599 --> 00:51:20,640 trajectory with the expenses right those 5% increases year-over-year help but um 677 00:51:19,440 --> 00:51:24,440 they're not still quite getting you to the expenses especially if you think 678 00:51:21,920 --> 00:51:27,799 I've built in 5% on inflation right there's that 5% on the increased bills 679 00:51:26,319 --> 00:51:34,440 right there um so that's on the water 680 00:51:31,520 --> 00:51:38,920 side and then on the waste water side we're seeing kind of a similar picture 681 00:51:36,280 --> 00:51:43,520 here um this is basically know the old rates um this is the new rates here 682 00:51:41,280 --> 00:51:49,960 again I love to see this kind of going above the expenses um and then with 683 00:51:46,720 --> 00:51:55,480 those fiscal year 24 projected expenses you know your expenses in 24 were over 4 684 00:51:52,920 --> 00:51:59,559 million more um on the Wastewater side so this is you know this then becomes 685 00:51:57,440 --> 00:52:04,960 kind of a big jump right to go from about 5 million to to almost 10 million 686 00:52:01,839 --> 00:52:09,040 that's a pretty big jump to cover um so again we'll you know once we take a look 687 00:52:06,720 --> 00:52:14,200 at the audited financials this will that'll give us a little bit better 688 00:52:10,520 --> 00:52:19,440 picture um but there's there's some kind of room for concern I would say here 689 00:52:15,920 --> 00:52:26,760 based on the most recent expenses okay oh questions on rates and 690 00:52:23,760 --> 00:52:31,559 this is a functional modifiable tool right so as as many 691 00:52:29,079 --> 00:52:34,680 scenarios as you guys want me to plug in or you guys to fiddle with I'm happy to 692 00:52:33,200 --> 00:52:39,240 do so so this is really kind of an itative process um up to you guys and we 693 00:52:37,040 --> 00:52:42,240 can try to see like can we get closer in this way or change it in this way to try 694 00:52:41,319 --> 00:52:46,680 to get closer so from that 695 00:52:44,960 --> 00:52:50,920 perspective I don't know if there's a cart before the horse so if the if the 696 00:52:48,440 --> 00:52:54,960 board said you know once once we got the 2024 audit done you plug those numbers 697 00:52:53,040 --> 00:53:00,240 in and we can see that a little bit more definitively the board said our goal is 698 00:52:57,839 --> 00:53:04,680 to meet the needs of expenses which technically we should be over that right 699 00:53:03,079 --> 00:53:07,240 but because if you're just meeting needs of expenses and we're not ready for 700 00:53:06,000 --> 00:53:11,200 whatever's about to happen so that's right let's just say the board said we 701 00:53:08,799 --> 00:53:15,000 want to at least hit that red line can you then reverse engineer what that 702 00:53:12,760 --> 00:53:19,520 looks like every year for rate change versus I guess the other side if the 703 00:53:16,880 --> 00:53:24,319 board came in and they said our pallet is I'll just make some up no more than 704 00:53:21,680 --> 00:53:28,400 8% a year period you can do it from that direction too and say well that's where 705 00:53:25,480 --> 00:53:32,960 it lines you up y yeah okay so they can do it from either or both directions 706 00:53:30,200 --> 00:53:38,000 once you've got the final data to say I mean we went through this I don't 20 707 00:53:34,799 --> 00:53:40,559 years ago 15 years ago and it wasn't from both directions so it was like Hey 708 00:53:39,480 --> 00:53:46,359 if you want to meet it here's your number and the number was like everyone 709 00:53:43,160 --> 00:53:51,760 fell out of their chair crazy and and so then what the city did back then was 710 00:53:48,400 --> 00:53:56,160 they said well what's palatable yeah and and we kind of the the board at the time 711 00:53:54,200 --> 00:54:01,680 just picked percentages and and went through that um but it didn't cover the 712 00:53:59,400 --> 00:54:05,440 full Gap right we didn't cuz the Gap was defined here and we weren't willing to 713 00:54:03,040 --> 00:54:10,079 meet the Gap yeah U but I think it would be good to see it both ways if they say 714 00:54:07,760 --> 00:54:13,079 you need to do 12% a year I made that up it could be 18% a year I don't know it 715 00:54:11,559 --> 00:54:19,240 could be 4% a year but whatever won't be 4% whatever it 716 00:54:14,880 --> 00:54:23,799 is um you could say that's untenable what happens if we do this how far are 717 00:54:21,319 --> 00:54:27,119 we off our Mark yeah well and I think once we get those confirmed audit 718 00:54:25,480 --> 00:54:32,280 numbers we can go back to that debt service coverage ratio because for me 719 00:54:28,880 --> 00:54:35,359 when I see when I see you know this and I hear about some of the expenses that 720 00:54:33,880 --> 00:54:39,280 you guys are having that's pushing those expense numbers higher I think about 721 00:54:37,440 --> 00:54:42,799 well is there a way that we can find some funding to cover some of these 722 00:54:41,240 --> 00:54:46,440 bigger projects that's going to reduce your expenses it's very hard typically 723 00:54:44,520 --> 00:54:50,599 to reduce expenses but if you guys are having reacted expenses is there a way 724 00:54:48,839 --> 00:54:54,480 that we can get some funding replace some of these areas where you're having 725 00:54:52,160 --> 00:54:57,640 those reactive expenses and you can cover the debt through rates right 726 00:54:56,119 --> 00:55:02,440 that's going to be much easier to cover that debt payment annual debt payment 727 00:54:59,599 --> 00:55:06,680 through rates versus a $4 million increase in expenses per year that's 728 00:55:04,160 --> 00:55:10,680 going to be much harder to cover 200,000 you can cover in your rates right but 4 729 00:55:08,520 --> 00:55:15,040 million is a lot harder and so B we've talked about that with the perspective 730 00:55:12,200 --> 00:55:20,520 of the shot in the arm right if if you identifi these projects just absolutely 731 00:55:18,119 --> 00:55:23,160 if you took these off your plate that would make a huge difference but it's 732 00:55:21,720 --> 00:55:27,400 going to take this much debt service to do that and then what does that look 733 00:55:24,920 --> 00:55:30,559 like so she's saying they can help you know figure that out if you said we 734 00:55:29,079 --> 00:55:34,680 can get this much shot in the arm and what does that look like to our rate and 735 00:55:31,920 --> 00:55:34,680 how does that adjust 736 00:55:38,240 --> 00:55:43,960 it okay so I wanted to talk a little bit about uh just interaction the community 737 00:55:42,760 --> 00:55:48,200 and other funding things that I just wanted to just kind of all inclusive 738 00:55:45,920 --> 00:55:51,640 statement I really like the engineer BM had to say about the long-term Asset 739 00:55:49,960 --> 00:55:54,720 Management plan and the you Capital Improvement plan the idea of getting to 740 00:55:53,079 --> 00:55:56,799 a point where you're thinking about the future and what you're going to need to 741 00:55:55,720 --> 00:56:01,760 do every year to keep your system uh in in a good 742 00:55:59,440 --> 00:56:06,480 position one thing I just want to stress is that like that is information that 743 00:56:04,039 --> 00:56:11,760 would you should if you can be putting out in the public uh as much as you 744 00:56:08,640 --> 00:56:14,319 possibly can um I think that part of this whole problem is that people don't 745 00:56:13,160 --> 00:56:17,480 necessarily associate their water utility with being theirs it's but it's 746 00:56:16,119 --> 00:56:21,520 very much like your schools and your roads this is you know your water and 747 00:56:20,280 --> 00:56:26,480 the quality of your water and you're paying into a pool to keep that water 748 00:56:24,039 --> 00:56:29,280 healthy it's the ownership that I think can sometimes be something it's a 749 00:56:27,720 --> 00:56:33,839 culture of ownership that I think can sometimes really help make these 750 00:56:30,640 --> 00:56:36,880 conversations more palatable um AB you guys are kind of in this thing together 751 00:56:35,400 --> 00:56:40,520 and if it falls apart on you you're in a much worse FL there are places in the 752 00:56:38,400 --> 00:56:44,400 United States where people are straight piping their water into the woods behind 753 00:56:42,359 --> 00:56:48,240 their house because their water utility has fallen apart so much that they just 754 00:56:46,119 --> 00:56:53,280 have nothing to work with so I just wanted to put that out there um raising 755 00:56:51,599 --> 00:56:57,880 rates with intentionality with a particular Target in mind when we talk 756 00:56:55,119 --> 00:57:00,960 to uh you know DEQ Department of Environmental Quality about what they're 757 00:56:59,680 --> 00:57:04,640 looking for what they want to see from utilities what they want to see in order 758 00:57:02,359 --> 00:57:09,000 to you know grant funding they want to see the implementation of these 759 00:57:06,160 --> 00:57:13,079 long-term Improvement plans and that is partially a communication plan that is 760 00:57:10,960 --> 00:57:16,440 partially we're going to explain all the what what are we doing the next 10 years 761 00:57:14,520 --> 00:57:21,680 what is our team go where is our team going uh as a whole Community uh this is 762 00:57:20,000 --> 00:57:25,280 why we're doing that this is what we're seeing that is going to cause that this 763 00:57:23,520 --> 00:57:28,640 is the age of these pieces that is going to cause necessity take that uh they 764 00:57:27,599 --> 00:57:31,000 want to see you know they don't just want to see you make a capital 765 00:57:29,760 --> 00:57:35,119 Improvement plan and then it just hangs out somewhere and then you had it to 766 00:57:32,880 --> 00:57:38,839 check box they want to see how is that working into like the way that you're 767 00:57:36,440 --> 00:57:43,400 changing the way your water utility behaves um you guys more so than other 768 00:57:42,039 --> 00:57:48,079 water utilities North Carina have to be prepared for crisis uh and saving for 769 00:57:46,119 --> 00:57:51,960 Capital Improvement to deal with the climate resiliency and adaptation that 770 00:57:49,720 --> 00:57:54,240 is unique to your area there are Partners In the state which I'm going to 771 00:57:53,119 --> 00:57:57,200 get to in a second there are Partners In the state that will help you with that 772 00:57:55,640 --> 00:58:01,559 so it's not just on your own back but it is something to be considering and the 773 00:57:59,640 --> 00:58:04,720 last piece of this is that you know and this is something you can also be very 774 00:58:02,720 --> 00:58:09,400 real with your customers about is that you know utilities that totally neglect 775 00:58:07,119 --> 00:58:13,079 this sort of process and totally neglect you know get to the point where their 776 00:58:10,440 --> 00:58:18,000 water utilities totally insolvent do get taken over by the state that is that is 777 00:58:15,400 --> 00:58:24,319 a very that's a real reality that we work with on a regular basis um they can 778 00:58:21,400 --> 00:58:27,200 Google it real quick um at which point a municipality now had zero control over 779 00:58:25,880 --> 00:58:31,200 there correct and the first thing that LGC is going to do every single time and 780 00:58:30,160 --> 00:58:34,000 I talk to these gentlemen about ear they're going to raise your rates to the 781 00:58:32,359 --> 00:58:38,079 point where your utility is solving again which is going to be a lot more 782 00:58:35,960 --> 00:58:41,160 abrupt and a lot more painful and a lot more uncomfortable because they don't 783 00:58:39,319 --> 00:58:46,319 have to deal with whether or not they're going to get revoted in they are you 784 00:58:43,280 --> 00:58:50,400 know they are immune to that sort of so the most but the stuff we can solve in 785 00:58:48,599 --> 00:58:55,000 house is going to be the best possible outcome for 786 00:58:51,440 --> 00:58:59,160 everybody um so again towns frequently attempt to avoid raising rates by using 787 00:58:57,520 --> 00:59:03,920 State funding or hoping for political ear marks or finding grants and we will 788 00:59:02,160 --> 00:59:10,000 help you guys do those things and there are grants for you to pursue but it's a 789 00:59:07,680 --> 00:59:13,640 big pie right and part of it is rate increases and part of it is Grants and 790 00:59:11,599 --> 00:59:18,280 part of it is reducing expenses and that whole thing together is what's going to 791 00:59:16,200 --> 00:59:23,720 get you guys where you need to go so it's it's no one piece yes sir so uh on 792 00:59:20,680 --> 00:59:27,760 the on the grants and raising rates got to know the state's not going to have uh 793 00:59:25,319 --> 00:59:32,680 grants with every local local municipality but can the state actually 794 00:59:30,359 --> 00:59:37,240 help carve out like loans for actual municipality to actually apply for 100% 795 00:59:35,599 --> 00:59:41,079 uh and your water utility has applied for some of those and they are 796 00:59:38,799 --> 00:59:44,920 competitive so going back to his question earlier we said you know 797 00:59:43,359 --> 00:59:47,880 communities all across North Carolina have gotten to the point where their 798 00:59:45,880 --> 00:59:51,359 water utility is above 60% to asset appreciation there's a high level 799 00:59:50,079 --> 00:59:55,319 competition which is why it's so important to pull resources and get as 800 00:59:53,720 --> 00:59:58,880 many heads in the game as possible so that when you put for your Grant 801 00:59:56,440 --> 01:00:04,599 application it gets approved but yet uh State revolving fund loan and or grant 802 01:00:01,480 --> 01:00:09,039 money is available um I was talking to uh you know Chris earlier about the rccp 803 01:00:06,760 --> 01:00:13,520 or the uh resilient Coastal communities program which is all the Cana Counties 804 01:00:11,319 --> 01:00:17,079 have access to uh there's a number I mean you could potentially could even go 805 01:00:15,200 --> 01:00:21,319 after a brick one especially with which is a federal loan through FEMA based on 806 01:00:19,799 --> 01:00:26,680 what you've been experiencing in terms of all the coastal Hazard that you guys 807 01:00:23,480 --> 01:00:30,400 deal with and srf will match State revolving fund will match a brick loan 808 01:00:29,119 --> 01:00:33,039 so there's a matching requirement for brick that you could hit there yes sir 809 01:00:31,920 --> 01:00:37,640 and one of the other things that we'll be talking to the board about at a later 810 01:00:35,599 --> 01:00:43,160 date in a little more detail is currently we do a 5year CIP we get zero 811 01:00:40,760 --> 01:00:47,000 points for that on these applications we've got to 812 01:00:44,400 --> 01:00:50,559 get we've got to present to you and talk through what it looks like to do a 813 01:00:48,400 --> 01:00:54,280 10-year CIP I don't know what the total points 814 01:00:52,760 --> 01:00:59,200 is for that but I know it's considerably more points than 10 zero so you got so 815 01:00:58,319 --> 01:01:02,039 yeah if you guys get to the point where you have a 10 year especially Asset 816 01:01:00,440 --> 01:01:06,119 Management plan so you know you're doing the holistic process that is 10 points 817 01:01:04,359 --> 01:01:12,039 to put this in perspective competitive score on a state revolving fund loan is 818 01:01:08,079 --> 01:01:16,680 about 54 all right so 10 points is huge 10 points is a like that's a that gets 819 01:01:13,799 --> 01:01:20,039 you almost a quarter of the way there um it's a significant amount and it will 820 01:01:18,440 --> 01:01:22,720 apply to every single project you undertake so if you guys have a long 821 01:01:21,400 --> 01:01:27,079 list of projects you want to undertake you want to do one every year having an 822 01:01:24,559 --> 01:01:29,480 updated Asset Management plan it's just giving you those 10 points over and over 823 01:01:28,480 --> 01:01:36,119 and over and over and over and over again and it's good practice um you will 824 01:01:33,920 --> 01:01:40,200 never keep up with the costs and issues that you're dealing with just going 825 01:01:37,720 --> 01:01:45,240 after them with political ear marks and great funding so you 826 01:01:42,440 --> 01:01:48,599 know be as commun being as communicative as possible about why rates have to be 827 01:01:46,920 --> 01:01:52,880 raised is excellent people should be all in on the same page and we need to know 828 01:01:50,000 --> 01:01:56,720 what's going on but every single town we found that is in a really bad place 829 01:01:55,079 --> 01:02:00,319 right now financi a lot of it can be tied right back to we 830 01:01:58,559 --> 01:02:06,760 didn't wi to raise rates for a decade or more sure um okay this is what uh Chris 831 01:02:05,599 --> 01:02:09,279 was talking about earlier access to State revolving fund money is directly 832 01:02:08,160 --> 01:02:14,960 connected to having a capital Improvement plan and rates so another 833 01:02:11,960 --> 01:02:17,720 thing that scores you P like points on that funding application is going to be 834 01:02:16,720 --> 01:02:21,880 whether or not your rates are where they're supposed to be so if you are 835 01:02:20,200 --> 01:02:25,559 asking for grant money from the state government and they look at your rates 836 01:02:23,760 --> 01:02:29,520 and they're lower than what the state says that they should be you are going 837 01:02:27,799 --> 01:02:32,160 to lose points there because the first thing they're going to say is well 838 01:02:30,599 --> 01:02:35,240 before you're asking us for money you should be raising rates in your town 839 01:02:33,640 --> 01:02:39,039 sure so having rat set where they're supposed to be also helps you go after 840 01:02:37,079 --> 01:02:43,440 that grand money it's it's again it's a big pie it all works 841 01:02:41,000 --> 01:02:45,880 together I mean if I was a state i' I'd feel the same way if you're not going to 842 01:02:44,599 --> 01:02:50,799 do your part why do you want me to come in and and and fix it for you correct 843 01:02:48,680 --> 01:02:54,880 correct um so any consistent dialogue you guys can 844 01:02:53,440 --> 01:02:58,839 do with the fun or with the public I think is going to be super helpful 845 01:02:56,720 --> 01:03:02,839 um rate increases are totally unavoidable but you know the more we can 846 01:03:01,279 --> 01:03:07,039 communicate why these things are happening the better um a lot of 847 01:03:05,000 --> 01:03:10,400 utilities found a lot of success publicizing their kpis their key 848 01:03:08,599 --> 01:03:13,839 performance indicators the stuff that I gave to you guys earlier the long boring 849 01:03:12,359 --> 01:03:18,319 part of the presentation that was all graphs sending those out from time to 850 01:03:16,160 --> 01:03:21,039 time saying like hey guys you know this is how depreciated this is what 851 01:03:19,839 --> 01:03:23,520 depreciation is and this is how depreciated our assets are and this is 852 01:03:22,599 --> 01:03:28,880 why we're going to need to do some projects coming up pretty soon just know 853 01:03:25,799 --> 01:03:33,359 knowing why what's what is going on and why do you need me to pay more money can 854 01:03:31,000 --> 01:03:36,799 sometimes do a lot and not all not every customer can come to a public listening 855 01:03:34,880 --> 01:03:39,839 session so sometimes they they're confined to their house they D 856 01:03:37,920 --> 01:03:45,200 Transportation a number of things can be easier to meet them where they're at um 857 01:03:43,240 --> 01:03:48,039 if your if your utility your utility deals with like I said hazards other 858 01:03:46,799 --> 01:03:51,920 utilties don't deal with if you're spending money to deal with salt water 859 01:03:49,359 --> 01:03:55,279 intrusion let them know hey we're looking at our reservoirs and the amount 860 01:03:53,760 --> 01:03:59,279 of solidity in our Reservoir is going up this is how much it's going up this is 861 01:03:56,880 --> 01:04:02,599 how much that will probably cost a fix letting them know that's a problem you 862 01:04:01,200 --> 01:04:06,440 know because salt water in your Reservoir makes the water unable um if 863 01:04:05,000 --> 01:04:11,680 you have failing Palm stations letting them know that sort of stuff that can 864 01:04:07,799 --> 01:04:15,960 really help um and again many custom we we had a woman come and speak at our big 865 01:04:13,880 --> 01:04:19,839 class last year from a town whose infrastructure was built before their 866 01:04:17,520 --> 01:04:25,440 roads were built so when they went to replace their utility they had wooden 867 01:04:22,039 --> 01:04:28,640 pipes in certain places customers have and somebody men this earlier it's all 868 01:04:26,640 --> 01:04:33,319 under the ground customers have no idea how old they're at Water instruction and 869 01:04:30,039 --> 01:04:36,839 you tell you A lot of people you say hey the pipe that brings water to your house 870 01:04:34,799 --> 01:04:40,680 was built 60 years ago and I want to replace it and that's why you got to pay 871 01:04:38,160 --> 01:04:46,400 $5 extra on your water pill they're receptive because they don't want 872 01:04:42,680 --> 01:04:50,640 60-year-old pipes spring in the water um and these are just some ideas that I 873 01:04:47,760 --> 01:04:53,319 thought you know uh mailers anything on the internet where they can download the 874 01:04:51,920 --> 01:04:56,480 key performance indicators obviously you're already doing Council meetings if 875 01:04:55,200 --> 01:04:59,720 you have a project in somebody's neighborhood having a staff member on 876 01:04:57,880 --> 01:05:02,680 site to explain what's happening what why are we here why are we doing this 877 01:05:01,640 --> 01:05:05,920 and then just Public Service anouncements General I know a lot of the 878 01:05:04,000 --> 01:05:09,319 stuff you guys are already doing but anything that can help build that public 879 01:05:07,200 --> 01:05:14,920 trust is going to make this whole process easier and I just want to 880 01:05:11,680 --> 01:05:19,839 reiterate that one more time is that every water utility in the whole country 881 01:05:16,440 --> 01:05:23,279 is a business uh and that business can't raise its own Reigns it has to ask other 882 01:05:21,520 --> 01:05:26,520 people permission to it can't raise its own prices and they have to be approved 883 01:05:24,680 --> 01:05:31,279 by regulatory Authority and that makes it really difficult for water utilities 884 01:05:28,119 --> 01:05:34,440 to be successful um but unfortunately if they remain unsuccessful for long enough 885 01:05:33,079 --> 01:05:38,240 they lose their autonomy and you guys don't want to lose your autonomy so I 886 01:05:36,720 --> 01:05:41,920 feel like your utility is kind of out a Crossroads you have an excellent 887 01:05:39,880 --> 01:05:48,359 customer base which means you have a lot of options you're not a 500 town of 500 888 01:05:44,240 --> 01:05:51,319 that has none um you building an asset management plan and becoming more 889 01:05:49,440 --> 01:05:53,960 systematic with these issues it's going to help your Public Communication it's 890 01:05:52,720 --> 01:05:57,440 going to help your financial planning and it's going to help forecasting where 891 01:05:55,839 --> 01:06:02,079 your rates need to go over time because you'll know what you need to put in the 892 01:05:59,079 --> 01:06:05,799 ground every year systematically and this is our 893 01:06:03,839 --> 01:06:09,799 information if you'd like to contact us again I'm Justin N this is Al Fraser and 894 01:06:08,359 --> 01:06:15,799 I appreciate you y'all got any more questions for 895 01:06:12,079 --> 01:06:20,440 them yeah so I'll ask you this one thing you did 896 01:06:18,720 --> 01:06:25,200 not cover and I'm sure you've seen a lot of it because we've seen some of in East 897 01:06:22,440 --> 01:06:32,920 North Carolina are municipalities giving up there water and waste water to these 898 01:06:27,720 --> 01:06:36,400 um for profit corporations and and I I'm just going to tell you what we think 899 01:06:34,839 --> 01:06:39,079 that looks like and you can tell us if if you've seen that as the case so 900 01:06:37,680 --> 01:06:43,599 everywhere around us that's happened the rates immediately double triple 901 01:06:41,480 --> 01:06:47,720 sometimes there's examples of four and five times increase because they're 902 01:06:45,440 --> 01:06:53,599 running for as a for-profit corporation um and then we've also um 903 01:06:51,799 --> 01:06:57,680 seen that you give up a lot of your ability for growth because now you're 904 01:06:55,599 --> 01:07:01,599 dependent on them and if you say we've got a craven 38 track like you saw up 905 01:06:59,559 --> 01:07:05,839 here earlier we're going to need capacity for 300 new homes they can just 906 01:07:03,760 --> 01:07:09,079 say no we're not willing to put that money in the infrastructure or yes but 907 01:07:07,760 --> 01:07:12,480 we're going to raise everyone's rates by this amount so is that kind of what you 908 01:07:10,960 --> 01:07:15,520 see or is there anything else you see that we should be aware of and I only 909 01:07:14,240 --> 01:07:19,599 say that because every time we go to Le municipalities conferences those guys 910 01:07:17,279 --> 01:07:23,279 are there and they hit up every commissioner and they want to talk about 911 01:07:21,760 --> 01:07:26,720 what great things they can do for your system and they can run your system 912 01:07:24,760 --> 01:07:30,440 really really well but it just cost a ton of money that's what we've seen so 913 01:07:28,000 --> 01:07:36,279 your thoughts yeah I I mean I think the second thing you said is is huge if my 914 01:07:33,640 --> 01:07:41,000 if a company in my profit share my profit area right is the entire 915 01:07:38,359 --> 01:07:44,520 Southeast right and one small town in the middle of that is really concerned 916 01:07:42,880 --> 01:07:49,000 about its growth and where it wants to develop but we determin that that's not 917 01:07:46,520 --> 01:07:53,119 the best for our profit margins well that town being upset with me that town 918 01:07:51,000 --> 01:07:58,079 you know protesting whatever doesn't really affect my bottom line my bottom 919 01:07:55,000 --> 01:08:03,079 line is out across the entire region right there's no incentive for me to 920 01:08:00,520 --> 01:08:05,760 really prioritize this town's goals but also it's like right now you guys are in 921 01:08:04,279 --> 01:08:10,119 a position where you can come to these meetings and you can hash it out and you 922 01:08:08,520 --> 01:08:14,680 can discuss and you can input and you can elect people and all those things 923 01:08:11,760 --> 01:08:18,239 you can affect all of that if you seed your authority to a private industry 924 01:08:16,719 --> 01:08:21,679 you've immediately got rid of that entire dialogue that doesn't exist 925 01:08:20,000 --> 01:08:28,239 anymore so it's it's kind of a you know worst 926 01:08:24,960 --> 01:08:32,560 case scenario eject button option uh and most of the time when I see it it's in 927 01:08:30,080 --> 01:08:35,080 situations where a town is hit the point where they're Tri Tred to even 928 01:08:33,279 --> 01:08:40,560 regionalized they tried to merge with another utility and other utility said 929 01:08:36,759 --> 01:08:43,719 no and that's that is the it is this or we 930 01:08:41,759 --> 01:08:49,600 dissolve I was say I feel like you guys aren't in a dire enough position where 931 01:08:46,080 --> 01:08:53,799 it's kind of a a worthwhile thing to consider right where I see it successful 932 01:08:51,679 --> 01:08:58,600 is these tiny towns because the companies have ways to make profit off 933 01:08:55,839 --> 01:09:03,640 of other places they can kind of take on some of these smaller towns and slowly 934 01:09:01,080 --> 01:09:08,279 get it to be more you know palatable but they can kind of help that like this is 935 01:09:06,000 --> 01:09:12,279 It's either this or or you all have to go to well and septic right because 936 01:09:09,920 --> 01:09:15,880 they're small enough towns with failing systems that really can't kind of crawl 937 01:09:14,400 --> 01:09:19,799 out on their own but you guys have a customer face right you're big enough 938 01:09:18,000 --> 01:09:24,520 you you've got I mean you guys are in no way failing so you also have some really 939 01:09:22,359 --> 01:09:27,679 interesting potential regionalized uh partnership options 940 01:09:25,960 --> 01:09:32,759 so I mean honestly if I was to create a scale you know developing Partnerships 941 01:09:30,239 --> 01:09:36,400 with close by municipalities to kind of share certain you share certain parts of 942 01:09:34,520 --> 01:09:43,159 our infrastructure is here uh going private is here and and 943 01:09:39,960 --> 01:09:47,799 that's just right above dissolving as a utility uh because it's again it's the 944 01:09:45,359 --> 01:09:51,159 very it's the last resort I'm glad to hear yall say that cuz that's the way I 945 01:09:49,480 --> 01:09:56,560 have thought about it for the last year or two since it became kind of trendy is 946 01:09:53,319 --> 01:09:59,159 to not I say Trend became more common and that's been my thought is we're a 947 01:09:58,080 --> 01:10:02,199 long way from that but you'll occasionally have sens that are just 948 01:10:00,520 --> 01:10:06,800 like you know privatized the system and I don't think they understand the 949 01:10:03,480 --> 01:10:09,520 ramifications of of what that means and I think if you're the kind of community 950 01:10:08,199 --> 01:10:13,480 that really wants to drive what your development looks like that's reason 951 01:10:11,480 --> 01:10:16,760 number one not to privatize your system and then to have zero control over the 952 01:10:15,000 --> 01:10:19,560 rates it sucks to have control over rates sometimes I'm not going to lie 953 01:10:18,040 --> 01:10:23,640 most every time it sucks to have control over the rates but it doesn't mean you 954 01:10:21,760 --> 01:10:26,400 give that up just cuz it sucks I think it's still our responsibility you give 955 01:10:25,080 --> 01:10:31,440 that over somebody else yeah you hit the easy button for you but all of our rates 956 01:10:29,000 --> 01:10:35,000 are going to quadruple in some cases I mean we've seen that in in counties and 957 01:10:33,040 --> 01:10:37,600 municipalities around us so it's good to hear that perspective from you guys 958 01:10:36,120 --> 01:10:42,880 where you see it across a larger region than we do it's a real strong argument 959 01:10:39,640 --> 01:10:45,400 that everybody who has an effect on your water and your water rates and your 960 01:10:44,000 --> 01:10:49,560 water infrastructure has to drink the water yeah they are making those 961 01:10:47,080 --> 01:10:52,840 decisions yeah no I mean that's a great Point too fantastic point I mean those 962 01:10:51,480 --> 01:10:56,280 folks are going to be corporate people sitting in office somewhere about the 963 01:10:54,040 --> 01:11:00,600 quality of your water every single one of us sitting at this table pay you have 964 01:10:58,440 --> 01:11:04,679 to remind that we're paying the same bill drinking the same water and and 965 01:11:02,040 --> 01:11:08,040 using the same um you with the consequen of decisions you make it's the same 966 01:11:06,159 --> 01:11:11,520 thing if you see company in New York City owning a landfill in Mississippi 967 01:11:10,360 --> 01:11:15,800 they don't care what people put in that life that's 968 01:11:12,960 --> 01:11:22,800 right all right other questions Justin Alicia anything else that's great thank 969 01:11:19,600 --> 01:11:29,400 you'all fantastic absolutely appreciate I would expect we'll be 970 01:11:24,600 --> 01:11:29,400 bothering you um a little bit more