Jul 27, 2026 Public Utilities Board on 2026-07-27 9:00 AM

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NOBODY HAS HEARD THAT HE ISN'T COMING. YEAH. HOW ABOUT TWO MINUTES? 902. WE'LL START AT

902 IF HE DOESN'T. >> YEAH. TWO MINUTES. >> WHAT'S UP?

>> SO I. >> OKAY. OKAY. GOOD MORNING AND WELCOME TO THE REGULARLY SCHEDULED PUBLIC UTILITIES BOARD MEETING FOR THE CITY OF DENTON. TODAY IS MONDAY, JULY 27TH. IT IS 9:01 A.M. AND THE MEETING IS CALLED TO ORDER. OUR FIRST ITEM OF BUSINESS IS PRESENTATIONS FROM MEMBERS OF THE PUBLIC. ARE THERE ANY PRESENTATIONS FROM MEMBERS OF

[2. CONSENT AGENDA]

[A. PUB26-127 Consider Approval of the July 13, 2026 minutes]

[B. PUB26-061 Consider recommending adoption of an ordinance of the City of Denton, Texas, establishing the rates for Wastewater service; providing for a repealer; providing for a severability clause; and, providing an effective date.]

CONSIDER RECOMMENDING ADOPTION OF AN ORDINANCE OF THE CITY OF DENTON, ESTABLISHING WATER RATES OR SORRY RATES FOR WASTEWATER SERVICE, AND WE WILL ALSO OPEN ITEM H. CONSIDER RECOMMENDING APPROVAL OF THE WASTEWATER FUND. FISCAL YEAR FY 272627 SO WE CAN HAVE ONE

PRESENTATION ON THESE TWO ITEMS. >> MORNING BOARD CHAIR SETH HARRELL, INTERIM BUDGET MANAGER, HERE TODAY SEEKING APPROVAL TO PRESENT THE FY 2020 627 PRELIMINARY UTILITY RATES AND BUDGETS. YOU READ. APOLOGIES. I'LL START WITH WATER WASTEWATER. WAS IT THE WATER OR

WASTEWATER? >> WASTEWATER, I BELIEVE WAS THE FIRST ONE.

>> APOLOGIES.

SO STARTING WITH WASTEWATER UTILITY. SO SOME OF THE FINANCIAL ASSUMPTIONS HERE.

NO CHANGES FROM WHAT WE SAW LAST TIME WE MET. 9% OVERALL RATE INCREASE EXPECTING TO RECEIVE THE WIFIA AND TEXAS WATER DEVELOPMENT BOARD FUNDING. SOME OTHER ASSUMPTIONS THAT ARE INCLUDED IN THIS PRESENTATION FROM LAST TIME WE MET WAS A 2% MERIT INCREASE FOR EMPLOYEES IS INCLUDED IN THE FORECAST TMRS RATE UPDATES. IT'S. THAT RATE IS LOWERED FROM 18.6 TO 18.28%.

THIS INCLUDES THE HEALTH INSURANCE INCREASE OF 4% FROM THE CITY'S CONTRIBUTION, AND

VACANCIES ARE BUDGETED AT THE LOW END. YES, SIR. >> COULD YOU REFRESH MY MEMORY?

>> WHAT IS TMRS? >> THAT'S THE TEXAS MUNICIPAL. IT'S THE RETIREMENT SYSTEM FOR CIVIL SERVICE. YES, SIR. AND VACANCIES BUDGETED AT THE LOW END OF THE PAY BAND. SO LOOKING AT THE WASTEWATER PROFORMA FOR FY 27, WE HAVE REVENUES OF 51.2 MILLION AND EXPENDITURES OF 51.8 MILLION, WITH THE USE OF RESERVE OF $540,143 AND A 9% RATE INCREASE. LOOKING AT THEIR FIVE YEAR CAPITAL PLAN, NO CHANGES HERE FROM LAST TIME WE MET. TOTAL OF $147 MILLION IN CAPITAL IMPROVEMENTS, 143.8 MILLION OF THAT DEBT FUNDED AND 3.5 MILLION FOR REVENUE.

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THOSE SO YOU CAN SEE NO REAL CHANGE. >> SO GO AHEAD SIR. AFTER YOU.

I JUST WANTED TO ASK IT DOESN'T INDICATE IF THIS IS THE MONTHLY CHARGE. THE ANNUAL CHARGE I'M

ASSUMING MONTHLY, BUT IT DOESN'T. >> SHOW THE ANNUAL CHARGE, SIR.

WHAT'S THAT? ANNUAL. >> THANK YOU. >> SO I JUST LOOKING AT THESE CITIES. I GET THE FEELING EVERYTHING ON THE LEFT IS ESTABLISHED CITIES THAT ARE KIND OF FULLY BUILT OUT, WHILE CITIES ON THE RIGHT APPEAR TO BE CITIES THAT HAVE RECENTLY EXPERIENCED A LOT OF GROWTH OR ARE EXPERIENCING A LOT OF GROWTH. IS THAT A IS THAT A FAIR WAY TO SAY IT? THIS IS ONCE ALL THE INFRASTRUCTURE IS BUILT AND THIS IS WHENEVER

CITIES ARE BUILDING INFRASTRUCTURE. >> I MEAN, IT'S HARD TO

SPECULATE, BUT BUT. YES, SIR. >> OKAY. >> THANK YOU. AND JUST FOR THE RECORD TO CORRECT THIS IS MONTHLY, NOT ANNUAL. SORRY. OKAY. FOR A PROPOSED RESIDENTIAL RATE COMPARISON FOR THE CHANGE. THIS IS WHERE WE ARE FOR PROPOSED. AND THIS WILL BE THE COMMERCIAL. CURRENT COMMERCIAL, CURRENT AND PROPOSED RATE. AND THIS IS THE CHANGE BETWEEN THOSE. SO AGAIN STAYING THE SAME IN THE LINEUP. BUT WE ARE SEEING AN OVERALL INCREASE. SOMETHING TO ALSO POINT OUT HERE IS THESE CITIES HAVE NOT GIVEN OUT THEIR. WE DON'T KNOW WHAT THEIR PROPOSED RATE IS GOING, BUT WE. WE ASSUME THAT THEY'RE ALSO GOING TO BE INCREASING THEIR RATES AS WELL. SO THIS IS A COMPARISON TO CURRENT RATES.

>> YES. A QUICK QUESTION FOR YOU. I'LL MOVE ON TO THIS SLIDE. SO WOULD I PRESUME THAT A RESIDENTIAL AND A COMMERCIAL FACILITY WOULD HAVE ROUGHLY THE SAME AMOUNT OR THE SAME 6000

GALLONS A MONTH? >> YES, SIR. >> INTERESTING.

>> THE BASIS. YES, SIR. SO LOOKING AT THE PRELIMINARY RATE CHANGES OF 9%, WE HAVE THE RESIDENTIAL SERVICE AT 9%. AND THIS IS FOR INSIDE AND OUTSIDE OF THE CITY LIMITS. FOR THE MOBILE HOME PARK SERVICE. THE 9% CHANGE, BOTH INSIDE AND OUTSIDE OF THE CITY LIMITS.

EXCUSE ME FOR COMMERCIAL AND INDUSTRIAL. A 9% CHANGE FOR INSIDE AND OUTSIDE THE CITY LIMITS. FOR COMMERCIAL AND INDUSTRIAL, METERED AND SUB METERED SEPTAGE AND CHEMICAL TOILET AND THE RESTAURANT AND FOOD ESTABLISHMENTS. THIS IS SHOWING A 9% INCREASE. FOR SALE OF TREATED EFFLUENT, WHOLESALE, AND DENOTE A INCREASE OF 9%. AND THEN I'LL STAND FOR

QUESTIONS. >> LET'S GO BACK TO SLIDE 42. SO I'M CURIOUS AS TO WHAT THE RATE INCREASES. IT DECLINES. CAN YOU SHARE OR REFRESH MY MEMORY WHY THAT WOULD BE

HAPPENING. >> WELL, AS WE CAN, IF WE CAN USE MORE IMPACT FEES AND FUND BALANCES POSSIBLE. THAT'S WHAT WE DO TO TRY TO KEEP THE RATE AS LOW AS POSSIBLE FOR.

>> AND SO YOU SEE A DECLINE EACH YEAR BASED ON IMPACT FEES AND AND.

>> JUST USE OF FUND BALANCE GROWTH. YES, SIR. >> OKAY. IF I MAY, MR. CHAIR, COULD YOU GO SLIDE 45 FOR ME? TYING BACK WITH I THOUGHT THAT WAS VERY ASTUTE AS FAR AS ESTABLISHED BUSINESSES, CITIES AGED VERSUS THE NEW FLASH GLOWING. COULD YOU GO BACK TO 44? I THINK THAT'S THE WATER. NO. 46. EXCUSE ME. I HOPE YOU ALL DON'T GET DIZZY AS WE DO THIS. BUT ANYWAY. I WAS JUST LOOKING AT THE CITIES. HOW WHO SWITCHES? WHO DOESN'T? SO IF WE LET'S GO WITH THE PREMISE. IF IF WE CAN OF ESTABLISHED VERSUS GROWTH. ARE WE IN THE GROWTH OR ARE WE IN THE ESTABLISHED. ARE WE CAUGHT IN THE MIDDLE? BECAUSE IF WE'RE ESTABLISHED, WE DON'T LOOK GOOD. YEAH. OKAY. I JUST WANT TO MAKE SURE YOU AND I WERE I WAS THINKING WHAT

YOU MIGHT HAVE BEEN SAYING WHEN YOU GO TO. YES. >> I THINK. OKAY. CONTINUE.

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>> 48, PLEASE. ON THESE COMMERCIAL RATE SEWERS, DO APARTMENTS. ARE THEY UNDER

COMMERCIAL OR RESIDENTIAL? >> I WOULD ASSUME COMMERCIAL. >> INDIVIDUAL APARTMENT UNITS ARE. CHRIS TO FOSTER CUSTOMER SERVICE MANAGER. INDIVIDUAL APARTMENT UNITS ARE RESIDENTIAL.

SO THE TENANTS THAT LIVE THERE ARE PAYING A RESIDENTIAL RATE. >> SO THESE COME. OH PARDON ME.

SO THESE WE'RE SEEING A LOT OF APARTMENT GROWTH COMING UP 400 600 UNITS AND SUCH. SO THESE AS THEY COME UP THEY FALL UNDER A RESIDENTIAL RATE NOT A COMMERCIAL RATE AT ALL.

>> CORRECT. >> OKAY. THANK YOU VERY MUCH. >> YOU'RE WELCOME.

>> I THINK THAT'S ALL I HAVE RIGHT NOW, MR. CHAIR. THANK YOU. >> ANY OTHER QUESTIONS RIGHT

NOW? >> WELL, YOUR QUESTION POSES A QUESTION. SO HOW DO YOU BREAK DOWN THE RATE FOR AN APARTMENT UNIT WHEN THE ENTIRE COMPLEX IS CONNECTED TO THE TO THE

FACILITIES, TO THE SERVICES, BOTH WATER AND SEWAGE? >> ALL ALL SEWER IS BASED ON WATER USAGE. SO IT'S BASED ON YOUR WATER METER WITH A FORMULA THAT'S THAT'S THAT TRIES TO AVOID CHARGING FOR SUMMER LANDSCAPE WATERING. SO EVERYBODY PAYS ON BASICALLY ON THE SAME FORMULA. SO IF YOU LIVE IN AN APARTMENT OR YOU LIVE IN A HOUSE, YOUR SEWER

RATE IS CALCULATED OFF YOUR. >> WATER, RIGHT OFF THE WATER METER. SO IF THE IF THE INDIVIDUAL APARTMENTS HAVE WATER METERS, THEN THEY CAN HAVE INDIVIDUAL, THEY CAN BE ACCOUNTED FOR. BUT IF THE COMPLEX HAS THE BILL, THEN HOW DO THEY ACCOUNT FOR IT.

>> WHEN YOU'RE TALKING ABOUT THOSE LARGE. AND IF I MAY, TALKING ABOUT THOSE LARGE COMPLEXES, THERE'S ONE WATER METER. THOSE IN THOSE UNITS AREN'T INDIVIDUAL WATERING

THEIR INDIVIDUAL ELECTRIC METERED. >> I THINK BY STATE LAW, ANY NEW RESIDENTIAL UNIT BUILT IN A LONG TIME, 15 OR 20 YEARS HAS TO HAVE AT LEAST A SUB METER

FOR WATER USAGE, I BELIEVE. I DON'T WANT TO I FEEL LIKE. >> I'M GETTING OFF TOPIC. I

APOLOGIZE, BUT I WOULD JUST RAISE A GOOD QUESTION. >> IT. IS THAT TRUE?

>> SORRY. >> THE SUB METER. >> IT REALLY DEPENDS ON ON WHICH APARTMENT COMPLEXES. SOME APARTMENT COMPLEXES ARE ALL ALL BILLS PAID. RIGHT. AND THERE'S SOME THERE'S AN ALLOCATION THAT'S DONE BY THE INDIVIDUAL APARTMENT BASED ON SQUARE FOOTAGE OR, OR WHAT HAVE YOU, THE SIZE OF THE APARTMENT AND OTHER APARTMENTS. THEY ARE

INDIVIDUALLY METERED, RIGHT. SO IT JUST KIND OF VARIES ACROSS. >> AND IT'S THANK YOU BECAUSE IT'S A DELICATE BALANCE. AS WE GET THIS, WE'RE ALSO LOOKING AT YOU'VE GOT PROPERTY OWNERS, THESE BIG COMPLEXES, THE EXPENSES ARE GOING TO BE TAKEN CARE OF BY THE RENTERS WITH INCREASED RENT AS IT COMES ALONG. WE ALL REALIZE THAT THAT'S JUST THE REGION. THE GROWTH GOES THAT WAY. BUT I THINK IT'S A GOOD POINT IN THAT IF WE THESE APARTMENTS SEEM TO BE A BEAST OF THEIR OWN, WHERE YOU CAN EASILY JUST FIND A COMMERCIAL OR AN INDUSTRIAL BUILDING, BUT THE APARTMENTS ARE A LITTLE BIT DIFFERENT. AND I'M NOT TALKING ABOUT RENTAL HOUSES. I'M TALKING ABOUT THESE LARGE COMPLEXES THAT WE HAVE. AND THAT WAS GOOD TO KNOW ABOUT THE SUBMETERING, BECAUSE I THOUGHT IT WAS JUST STILL THE ONE BIG METER WATER WISE. AND AND THEN OF COURSE, ELECTRIC INDIVIDUAL, BECAUSE THEN THEY CAN USE AS MUCH WATER AS THEY

WANT, CAN'T THEY? THANK YOU. I'M SORRY FOR THE DRIBBLE. >> SO THAT CONCLUDES THE

PRESENTATION FOR WASTEWATER. >> I DO HAVE A I DO HAVE ONE MORE QUESTION ON THE CIP5 YEAR COST. I THINK THIS TO ME THIS SLIDE SAYS WE'RE IN THE GROWTH CATEGORY. WE'RE EXPECTING TO SPEND $1 BILLION ON PLANT UPGRADES AND NEW PLANTS. AND I KNOW THERE'S A LOT OF CONTROVERSY ON THE NORTH SIDE OF TOWN OR EVEN IN SANGER, ABOUT NEW SUBDIVISIONS GOING IN AND HOW THEY'RE GOING TO HANDLE THEIR WASTEWATER. AND THE CITY OF DENTON IS TRYING TO APPROACH THAT BY BUILDING A NEW WASTEWATER TREATMENT PLANT TO SERVE THE NORTH SIDE OF DENTON.

UNFORTUNATELY, IT MIGHT NOT BE ABLE TO LIKE. IF IT'S IF THE DEVELOPMENTS ARE IN SANGER, THEN, YOU KNOW, WE DON'T HAVE ANY CONTROL OF THAT. BUT THEY WILL BE DISCHARGING INTO THE CREEKS THAT RUN THROUGH OUR CITY. SO SO I FEEL LIKE THIS INDICATES THAT A LOT OF THIS COST IS GROWTH RELATED, YOU KNOW, AND I, I ALWAYS FEAR A $0 INCREASE, A COMPLETELY FLAT RATE, ESPECIALLY FOR LONG PERIODS OF TIME BECAUSE SALARIES GO UP, YOU KNOW, COST OF MATERIALS GO UP. INFLATION IS REAL. AND, AND WE OFTEN TRY TO HOLD THE RATE AS FLAT AS

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AND ALLOWING THAT TO INCREASE OUR BUDGET SOME. BUT I THINK MOST OF THIS 9% IS RELATED TO

THIS CAPITAL IMPROVEMENT. >> THAT'S CORRECT. YES, SIR. >> YEAH.

>> SO IF I COULD A GOOD POINT WITH WE JUST HAD A SUBDIVISION GOT APPROVED WITH THE STATE WITH THEIR OWN SEWER SYSTEM, AND IT WILL HAVE RUNOFF INTO OURS, I WOULD THINK. AND I DON'T KNOW IF THEY ARE, I CAN'T REMEMBER IF IT'S A TRADITIONAL KIND OF SEWER SYSTEM OR WHAT, BUT IT WAS APPROVED. AND SO WE'RE HAVING TO DEAL WITH THESE NORTH OF US, OUT OF OUT OF OUR JURISDICTION, BUT YET THEY STILL COME AND SHOP HERE, AS I PUT IT, WITH THEIR RUNOFF. AND

SO WE HAVE TO DEAL WITH THAT. YOU'RE CORRECT. YEAH. >> AND I'D JUST LIKE TO JUMP IN ON THIS. OUR CAPITAL IMPROVEMENTS NOT ONLY INCLUDE A NEW FULL FACILITY, BUT ALSO UPGRADE AND MODERNIZATION OF EXISTING FACILITIES AND A LOT MORE NEW TRANSPORT LINES AND PUMPING STATIONS. SO IT'S A IT'S $1 BILLION. IT'S AN ENORMOUS AMOUNT OF

INFRASTRUCTURE IMPROVEMENT. >> TO THE CHAIRS PREVENTIVE MAINTENANCE PROGRAM, AS IT WERE.

SO WE DON'T GET CAUGHT FLAT FOOTED TRYING TO PENNY PINCH. AND THEN ALL OF A SUDDEN WE'VE GOT TO DRASTICALLY SPEND MONEY THAT WE SHOULD HAVE DILIGENTLY JUST INCREASED. AND, AND I THINK IN A NOMINAL WAY TO MAKE EVERYTHING RUN SMOOTHLY. THANK YOU.

>> SO IF THERE ARE NO FURTHER QUESTIONS, I THINK WE WE NEED TWO MOTIONS, ONE FOR ITEM B AND

ONE FOR ITEM H. >> I'LL MOVE FOR B. >> WE HAVE A MOTION TO ADOPT AN ORDINANCE RECOMMENDING THE. ESTABLISHING THE RATES FOR WASTEWATER SERVICE. SECOND AND SECOND. ALL IN FAVOR SAY AYE. ANY OPPOSED? SIGN THE SAME MOTION CARRIES UNANIMOUSLY. AND FOR ITEM H WE HAVE A MOTION FOR H SECOND AND A SECOND. ALL IN FAVOR SAY AYE. AYE. MOTION

[C. PUB26-063 Consider recommending adoption of an ordinance of the City of Denton, Texas, establishing the rates for Electric service; providing for a repealer; providing for a severability clause; and, providing an effective date.]

BUDGET. AND I THINK AGAIN, WE HAVE ONE PRESENTATION. >> THAT'S CORRECT. SO OUR BUDGET MANAGER HERE TO PRESENT THE DENTON MUNICIPAL ELECTRIC RATES AND BUDGET FOR FISCAL YEAR 2027. SO THE FINANCIAL ASSUMPTIONS FOR ELECTRIC INCLUDE INCLUDE INCLUDE A 3% BASE RATE INCREASE. AND JUST AS A REMINDER, THE E, C, A, AND T, C, F ARE ADJUSTED QUARTERLY AND PASS THROUGH TMRS RATE RATES FROM 18.6 TO 18.28. IT'S NOT LISTED HERE. APOLOGIES, BUT THIS ALSO INCLUDES THE 4% FOR HEALTH AND THE 2% MERIT INCREASE FOR EMPLOYEES. BUDGET CHANGE FOR 2027 BEING PROPOSED IS TO CREATE A NEW ELECTRIC PLANNING AND INSPECTIONS BUSINESS UNIT. SO LOOKING AT THE PROFORMA WE HAVE PROPOSED FOR FISCAL YEAR 27, 499.9 MILLION IN REVENUE, 487.5 MILLION IN EXPENDITURES. AND JUST AS A REMINDER, THIS WILL BE ON AN UPDATED SLIDE THAT YOU SHOULD HAVE RECEIVED A LITTLE LATER IN THE WEEK. AND THE ONLY MAJOR CHANGE FROM JULY 13TH WHEN WE MET IS AN ADJUSTMENT TO THE PURCHASE POWER FORECAST.

AND INCLUDES 3% INCREASE THERE. SO LOOKING AT THE DME GROWTH EXCUSE ME, GROWTH PROJECTIONS IN 2026, WE ARE SHOWING 8%. AND FOR THE OUT YEARS 27 AND ON ABOUT 3%. EXCUSE ME. LOOKING AT THE FIVE YEAR CAPITAL PLAN FOR DME, NO CHANGES FROM LAST TIME WE MET 67.9 MILLION. SORRY. IN CAPITAL 59.4 MILLION OF THAT IS REVENUE FUNDED. EXCUSE ME. DEBT FUNDED, 3.5 MILLION IN REVENUE

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ATHLETIC FIELD FACILITY DEMAND AND USAGE OF 3%. STREETLIGHTING FACILITY AND TRAFFIC LIGHTING METERED AND UNMETERED 3%. ON METERED SCHOOL ZONE. UNMETERED SECURITY CAMERAS. UNMETERED WI-FI DEVICES 3%. OTHER LIGHTING, METERED AND UNMETERED AND SECURITY LIGHTING FACILITY OF 3%. NON STANDARD STREET WIRELESS NODE AND ELECTRIC VEHICLE CHARGING 3%.

>> MAY I ASK WHAT IS A WIRELESS NODE? >> OKAY.

>> AND THAT IS NOT AS POPULAR AS THEY WERE A COUPLE OF YEARS AGO. BUT IF YOU REMEMBER THE 5G ROLLOUT, THOSE ARE THE NODES THAT WERE INSTALLED ACROSS THE CITY.

>> IS THAT LIKE FOR SOMEONE IN THEIR HOME THEY CAN GET ONE? OR IS THIS FOR LIKE ON A PUBLIC

STREET CORNER OR. >> YEAH, I'M NOT SURE WHAT THE OFFERING IS BY, BY THE DIFFERENT CARRIERS. BUT YEAH, BUT IT'S TO SUPPORT THE 5G WIRELESS.

>> LIKE THIS IS FOR THEM TO GET THEIR SERVICE. YES. CORRECT. FOR VERIZON OR WHATEVER. OKAY.

>> YEAH. THERE'S POWER TO, TO THOSE NODES. >> OKAY. THANK YOU.

>> AND NOW LOOKING AT THE MUNICIPALITY. MUNICIPALITY MUNICIPALITY OWNED COMPARISON FOR UTILITIES. THIS IS SHOWING THE CURRENT RATE. YOU CAN SEE THE AVERAGE RATE THERE. AND OUR PROPOSED RATE OF 137.57. THIS IS MONTHLY. IT'S BASED ON 1000 KILOWATT HOURS. AND THIS IS ALSO THE ANNUALIZED RATE. WHEN COMPARED TO 100% RENEWABLE ON A FIXED 12 MONTH RETAIL RATE THAT

DIDN'T. PROPOSED RATE IS RIGHT ABOVE THE AVERAGE. YES, SIR. >> COULD YOU GO BACK ONE SLIDE, PLEASE? THANK YOU. IT'S LIKE A MOMENT TO ABSORB THE INFORMATION. DOESN'T SEEM TO BE

RIGHT HERE IN THE COPY WE HAVE IN THE PRESENTATION. THANK YOU. >> AND JUST THIS IS A

COMPARISON OF OTHER MUNICIPALLY OWNED. >> YES. YES, SIR. BUT IT WENT BY WAY TOO FAST. AND I WENT TO LOOK HERE AND I DON'T HAVE IT. SO THANK YOU.

>> SO NEXT IS COMPARISON ON 100% RENEWABLE ON A FIXED 12 MONTH RETAIL RATE. NEXT IS 100% RENEWABLE ON A 24 MONTH RETAIL RATE. AND YOU SEE PROPOSED THERE JUST UNDER THE AVERAGE.

LOOKING AT NONRENEWABLE FIXED 12 MONTH RATE COMPARISON, WHERE WE WHERE DME WOULD BE JUST BELOW THE AVERAGE OF 139.51. AND THEN IF COMPARED TO NONRENEWABLE ON A FIXED 24 MONTH RATE. SO THE AVERAGE FOR PROPOSED. LOOKING AT OUR COMPARISON FOR GENERAL SMALL SERVICES, THE DME PROPOSED RATE IS 183.5. THIS IS BASED ON 1101 KILOWATT HOURS. YES, SIR.

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>> I HAVE A QUESTION. I'D LIKE TO DIRECT IT TO TONY. IF YOU COULD JUST REMIND ME WHAT

GENERAL SMALL SERVICE IS, I'D APPRECIATE IT. >> YEAH. JUST TO BE KIND OF YOUR SMALLER, YOU KNOW, RETAILERS KIND OF MOM AND POP SHOPS, YOU KNOW, SOME OF THE STORES KIND OF AROUND THE SQUARE PROBABLY FIT INTO INTO THIS CATEGORY HERE. SO A

BARBERSHOP, SMALL CONVENIENCE. >> TYPICAL STOREFRONT STRIP CENTER.

>> PROBABLY PROBABLY THE BULK OF OUR OF OUR COMMERCIAL. SECTOR.

>> SO THANK YOU. >> THIS IS A COMPARISON FOR THE GENERAL SERVICE MEDIUM RATE COMPARISON. PROPOSED. AND THEN MOVING ON TO GENERAL SERVICE LARGE RATE COMPARISON.

AND THAT'S THE PRESENTATION FOR DME BUDGET AND RATES. I'LL STAND

FOR DIRECTION. >> COULD YOU GO TO SLIDE 22 FOR ME. I WAS CURIOUS WITH THE SMALL AND I APPRECIATE THE DEFINITION BECAUSE THAT HELPS A LOT. IS IT FAIR TO SAY THAT THAT IS A, A A HIGH DEMAND? GROUP COMPARED TO, LET'S SAY THE SLIDE 23, WHICH IS THE MEDIUM. I'M JUST CURIOUS. THEIR NUMBER IS SO HIGH. I WAS A LITTLE SURPRISED WITH THAT.

COMPARED TO SOME OF THE OTHERS. IT. IS THERE A THOUGHT FROM YOU AS TO WHY THAT IS?

>> YEAH, I THINK, I THINK WHEN YOU'RE LOOKING AT THIS CHART, EACH ONE OF THOSE ENTITIES KIND OF HAS A DIFFERENT APPROACH WITHIN THEIR SYSTEM ON HOW THEY'RE GOING TO TREAT, YOU KNOW, SMALL COMMERCIAL CUSTOMERS, RIGHT? THERE'S SOME RATE DESIGN DIFFERENCES BETWEEN SOME OF THOSE UTILITIES AND KIND OF WHERE WE STAND FROM A, FROM A SERVICE STANDPOINT, THESE, THESE CUSTOMERS TEND TO BE VERY VARIABLE. SO IT'S VERY KIND OF UNPREDICTABLE IN HOW WE, HOW WE MANAGE FROM A COST OF SERVICE STANDPOINT. THEY TEND TO HAVE A HIGHER COST OF SERVICE THAN SOME OF THESE OTHER KIND OF LARGER COMMERCIAL ENTITIES. I THINK THE CONVERSATIONS WE'VE, WE'VE HAVE ON THE COMMUNITY WITH DIFFERENT PERSPECTIVE CUSTOMERS IN KIND OF ALL CATEGORIES IS THAT WHILE WE DO THIS COMPARISON TO OTHER AREAS, WHEN YOU REALLY COMPARE THEM TO TO THE COMPETITIVE ENVIRONMENT, THE RATES ARE STILL VERY COMPETITIVE. AND SO,

BUT YEAH. >> I THINK GO TO 23, IF YOU PLEASE. SO. AND I WOULD I WOULD APPRECIATE AND I AGREE WITH YOU THAT THE THE MAINTENANCE, AS IT WERE, FOR THOSE SMALLER UNITS BECAUSE OF THE NUMBERS, IF NOTHING ELSE, AND THE MEDIUM IS A LITTLE BIT MORE SUBTLE BECAUSE THEY'RE LARGER. AND SO THAT'S THE CASE. BUT. DID YOU HAVE THE SAME CONVERSATION WITH THE MEDIUM RATES AS YOU DID WITH THE THE SMALLER ONES AS TO THE DIFFERENT SERVICES PRICES

AND SUCH? >> YEAH, THE, THE, THE BIG DIFFERENCE HERE IS THAT, YOU KNOW, THIS IS KIND OF A MIDDLE CLASS, RIGHT? AND SO THIS IS THE FIRST CLASS OF, OF COMMERCIAL CUSTOMERS WHERE WE INTRODUCED THE CONCEPT OF A DEMAND CHARGE, RIGHT. AND SO.

>> THERE'S THE DEMAND CHARGE. >> YEAH. CORRECT. AND SO, SO THAT'S KIND OF WHAT DIFFERENTIATES THE MEDIUM. AND THE LARGE RIGHT IS THAT THOSE HAVE DEMAND CHARGES. AND MANY TIMES THE KIND OF THE SMALL CUSTOMERS ARE TRYING TO STAY AWAY FROM KIND OF THOSE DEMAND CHARGES BECAUSE THERE'S A POTENTIAL THAT, THAT THEIR RATES COULD ACTUALLY BE EVEN, EVEN HIGHER. AND HOW, HOW THEY'RE MANAGING THEIR USAGE. BUT YEAH, THAT'S THE ONE BIG DIFFERENCE HERE FROM THE, FROM THE SMALLER THE DEMAND CHARGES WHERE IT STARTS.

>> THANK YOU. THANK YOU, MR. CHAIR. >> ANY OTHER QUESTIONS? COULD YOU RETURN TO THE I BELIEVE THE THIRD SLIDE IN THIS PRESENTATION WITH THE KIND OF THE PRO FORMA. SO I THINK THERE'S BEEN A LOT OF DISCUSSION IN THE COMMUNITY AND ONLINE REGARDING KIND OF DATA CENTERS, OUR LARGE LOAD CUSTOMERS AND WHAT KIND OF COST IMPACT THEY'RE GOING TO HAVE ON THE CITY AND OTHER CUSTOMERS. AND, AND THERE, I'VE SEEN A LOT

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$10 MILLION TO 26. WHAT IS IN ADMINISTRATIVE COST? >> SO THE ADMINISTRATIVE COST IS THE PIECE OF REVENUE THAT THE GENERAL FUND RECEIVES AND ROI AND FRANCHISE FEE FROM DME.

>> AND SO OUR FRANCHISE FEE IS 5% 5%. YES. AND SO THE FRANCHISE FEE IS CHARGED TO ALL UTILITIES CITY OWNED OR NOT. AND THAT'S JUST ON KIND OF THE GROSS REVENUE THAT 526 MILLION

OR THAT THE DARK LINE AT THE TOP TOTAL REVENUE. >> THERE'S AN EXACT FORMULA

THERE, BUT APPROXIMATELY. YES, SIR. >> YEAH. AND SO 5% OF THAT TOTAL REVENUE, DME PAYS THAT IN A FRANCHISE FEE AND GOES TO THE GENERAL FUND TO SUPPORT JUST

GENERAL BUSINESS, GENERAL GOVERNMENT OPERATIONS. >> THAT'S CORRECT. YES, SIR.

>> THAT'S POLICE, FIRE STREETS, BOND, DEBT REPAYMENT, ANY WHATEVER, GENERAL PURPOSE. OKAY.

AND. WHAT IS THE ROI? >> THAT'S THE RETURN ON INVESTMENT. AND IN SOME CAPACITIES IT'S THOUGHT OF AS A TAX PAYMENT IN LIEU OF TAXES BECAUSE IT'S CITY OWNED AND IT'S, IT'S PROPERTY THAT WE CAN'T DEVELOP ON. WE CAN'T TAX. AND SO WE HAVE OUR UTILITIES

PAYING A RETURN ON INVESTMENT AS WELL. AND DME IS 6%. >> 6% ROI. YES, SIR. AND THAT

IS APPROXIMATELY ON TOTAL REVENUE. >> YES, SIR.

>> SO 5% PLUS 6% IS 11% OF TOTAL REVENUE. THAT'S CORRECT. OKAY. AND AND AGAIN, THAT'S THAT GOES TO GENERAL FUND, WHICH SUPPORTS JUST GENERAL GOVERNMENT FUNCTIONS.

>> YES, SIR. >> OKAY. AND SO. OBVIOUSLY LIKE. LOOKING FROM HERE OVER TO CITY COUNCIL, BECAUSE WE DON'T DEAL WITH THE GENERAL FUND, OBVIOUSLY $10 MILLION IN ADDITIONAL MONEY. THE GENERAL FUND IS IS BENEFICIAL TO THE COMMUNITY. THAT'S NOT EXTRA TAXES, NOT EXTRA PROPERTY TAXES, NOT EXTRA FEES ON CITIZENS. BUT THEY NEED TO BE CAREFUL WHEN THEY PLAN. THEY DON'T WANT TO THEY DON'T WANT TO FUND POLICE OUT OF THAT. BECAUSE IF IF SOMETHING HAPPENED IN THIS REVENUE DROPPED, WE DON'T WANT TO HAVE A SHORTFALL FOR FUNDING SOMETHING LIKE POLICE OR FIRE OR ESSENTIAL SERVICES, BUT THAT $10 MILLION CAN DO A LOT FOR DEBT SERVICE OR OTHER PROGRAMS WHILE THE DATA CENTERS EXIST. AND WHILE THOSE CUSTOMERS ARE ARE GENERATING THAT REVENUE. I NOTICED THAT WE DID NOT WHEN THAT $200 MILLION IN REVENUE DID NOT MATERIALIZE IN 25, WE DIDN'T INCUR LIKE A MAJOR DEBT. YOU KNOW, IT DIDN'T DIDN'T HAVE A LOT OF COST THERE, IS THERE. WHAT ARE THE RISKS TO DME IF LARGE LOAD CUSTOMERS GO AWAY OR CEASE TO OPERATE? AND WE IN SOME FUTURE YEAR 27, 28, 29 IS THERE A BIG FINANCIAL RISK TO

DME? >> WELL, I THINK I THINK THE FIRST THING THAT I'LL SAY IS.

SO IN THE ELECTRIC FUND, ANY NET INCOME FROM THE FROM THE DATA CENTER IS NOT BEING USED

[00:35:05]

WE'RE BUYING POWER TWO AND THREE YEARS OUT. IF AT SOME POINT THAT THAT DATA CENTER WERE TO WERE TO GO AWAY, WE WOULD CERTAINLY BE LOOKING TO LIQUIDATE THAT POWER INTO THE MARKET. NOW, WE WOULDN'T KNOW UNTIL THAT POINT CAME WHETHER WHETHER THOSE TRANSACTIONS ARE IN THE MONEY, RIGHT OR OUT OF THE MONEY. RIGHT. AND SO CERTAINLY WHAT WE WOULD DO IS WE WOULD APPROACH IT FROM A, YOU KNOW, FROM WHAT'S CALLED, YOU KNOW, DOLLAR COST AVERAGING, RIGHT? WE WERE GOING TO, YOU KNOW, YOU KNOW, SYSTEMATICALLY, STRATEGICALLY TRY TO LIQUIDATE THOSE POSITIONS TO TRY TO GET US INTO A MORE FAVORABLE POSITION. OBVIOUSLY, IF THEY'RE IN THE MONEY RIGHT AWAY, WE'RE GOING TO TRY TO MONETIZE THEM AS SOON AS POSSIBLE. THE OTHER THING, TOO, IS THAT AS WE LOOK AT THOSE TRANSACTIONS, THERE MIGHT VERY WELL BE A NEED FOR US TO SHIFT SOME OF THOSE TRANSACTIONS TO SERVE OUR NATIVE LOAD. WE, YOU KNOW, WE WE HANDLE THE DATA CENTER LOAD SEPARATE FROM OUR NATIVE LOAD. AS YOU GUYS KNOW, WE HAVE A SEPARATE E, C A FOR LARGE LOADS AND ONE FOR NATIVE LOAD. AND SO AGAIN, WE WOULD BE LOOKING AT THAT AS WELL TO TRY TO MINIMIZE ANY POTENTIAL LOSS IF THERE'S EVEN A LOSS. RIGHT. CERTAINLY IF THOSE POSITIONS ARE IN A FAVORABLE FAVORABLE POSITION, WE WOULD LIQUIDATE THEM. AND THEN THAT BENEFIT WOULD INURE BACK TO THE TO THE NATIVE CUSTOMERS. AND SO AGAIN, BUT WE WOULD APPROACH, AS I MENTIONED, ON A DOLLAR COST AVERAGING APPROACH.

>> SO SO YOU TALKED ABOUT THE FUTURE PURCHASE POWER. THE LARGE LOAD ALSO HAS A TARGET

FUND BALANCE OF 20 TO $40 MILLION POSITIVE. RIGHT. >> IT'S IT'S 0 TO $20 MILLION CURRENTLY. AND ALSO MENTIONED THERE'S ALSO A COLLATERAL REQUIREMENT THAT THE COMPANY IS, IS BUILDING UP AS THEY CONTINUE TO RAMP UP. ULTIMATELY, THAT AMOUNT WILL WILL COVER ABOUT ONE MONTH'S WORTH OF WORTH OF POWER EXPENSES THAT COULD BE SUBSTANTIAL. SO, SO WE HAVE A, A COUPLE OF POTS OF MONEY THAT WE WOULD ULTIMATELY BE LOOKING AT. CERTAINLY IT WOULD IT WOULD DEPEND ON, ON THE NATURE OF, OF WHY THE FACILITY WERE TO SHUT DOWN. RIGHT. CERTAINLY, YOU KNOW, YOU CAN RECALL IN 2022, THERE WAS A THERE WAS A BANKRUPTCY, THERE WAS SOME LIMITATIONS ON ACCESS TO TO THE SECURITY. WE DON'T BELIEVE THAT THAT WOULD APPLY TO ANY BALANCE THAT WE WOULD HAVE ON THE SIDE THAT WE CONTINUE TO BUILD UP. SO AGAIN, A LOT OF DIFFERENT FACTORS ON HOW WE WOULD APPROACH IT ONCE, IF, WHEN, IF THAT WERE EVER TO HAPPEN, OBVIOUSLY OUR HOPE IS THAT THAT DOESN'T HAPPEN, BUT CERTAINLY WE WOULD MANAGE THAT.

>> OKAY. SO SO THE ECA HAS ITS OWN FUND, AND WE ALSO HAVE COLLATERAL TO MITIGATE SOME RISK ON ON THAT FUTURE POWER PURCHASE. AND YOU ALSO MENTIONED I'VE HEARD THIS REPEATED ONLINE. OF COURSE, SCIENTIFIC WENT INTO BANKRUPTCY IN 2022 OR 23. DID THEY STOP

PAYING THEIR ELECTRIC BILL? >> NO, SIR. THEY HAD A COUPLE OF MONTHS, I BELIEVE, OF POWER THAT THEY THAT THEY DID NOT PAY THAT WAS CAUGHT UP IN INTO THE BANKRUPTCY, BUT THEY CONTINUED TO OPERATE AND THEY CONTINUE TO PAY THEIR BILL. ULTIMATELY, ALL ANYTHING THAT THAT WAS THAT

[00:40:04]

AMENDMENTS TO THE PPA. >> OKAY. SO SO EVEN THOUGH THERE WAS A BANKRUPTCY, THEY STILL GENERATED REVENUE TO THE CITY, THEY STILL PAID THEIR BILLS, ALL THAT. AND THERE WAS, THERE WAS SOME COURT STUFF THAT STILL HAD TO HAPPEN BECAUSE OF THE BANKRUPTCY. BUT MONTH TO

MONTH THEY WERE OR WEEK TO WEEK THEY WERE PAYING THEIR BILLS. >> YES, SIR. AND THE OTHER THE OTHER THE OTHER THING THAT I FAILED TO MENTION IS THAT AS AS YOU LOOK AT THIS FORECAST, WE CONTINUE TO BUILD THAT FUND BALANCE. THAT FUND BALANCE IS PRIMARILY BEING BUILT UP BY THAT NET INCOME, RIGHT? SO THERE'S ALSO A PORTION OF THAT FUND BALANCE THAT WAS CONTRIBUTED TO BY CORE SCIENTIFIC THAT WE WOULD ALSO THEN BE LOOKING AT, IF WE WERE IN A NEGATIVE POSITION TO, TO, TO TRY TO KEEP THE NATIVE LOAD CUSTOMERS FROM, FROM ANY IMPACT.

>> SO BASICALLY, THEY'RE PUTTING IN A SUBSTANTIAL AMOUNT OF MONEY INTO THAT RESERVE, JUST LIKE WE'RE PUTTING IN MONEY TO THAT RESERVE WITH OUR BILL EVERY MONTH. SO THAT

RESERVE COULD COVER ANY UNEXPECTED COST ON EITHER SIDE. >> YES. YES, SIR. SO IF YOU LOOK AT THOSE AT THOSE RATE INCREASES THAT ARE HERE, IF IF THE PROJECTED NET INCOME FROM CORE WAS NOT HERE, THOSE RATE INCREASES WOULD LIKELY BE DOUBLE.

>> OKAY. SO IF IF WE DIDN'T HAVE THE EXISTING CONTRACTS WITH THE TWO DATA CENTERS, WE WOULD EXPECT TO SEE A HIGHER RATE INCREASE THAN WE'RE SEEING TODAY.

>> YEAH. I MEAN, OBVIOUSLY THE THE PURCHASE POWER NUMBERS WOULDN'T BE AS HIGH. SO SO THE FUND BALANCE WOULDN'T BE AS HIGH. BUT AGAIN, THE GOAL IS HERE, YOU KNOW, CONTINUES TO BE TO GET TO 200 MILLION BECAUSE THAT WAS THE MAXIMUM EXPOSURE THAT WE HAD DURING WINTER STORM URI. AND THAT WAS REALLY THE THE IMPETUS FOR HAVING THAT $200 MILLION TARGET.

>> OKAY. AND AND YOU ALSO MENTIONED YOU'RE NOT PAYING PAYROLL OFF OF THIS EXCESS REVENUE. YOU'RE DOING THINGS LIKE PAYING DOWN DEBT OR PAYING CASH FOR CAPITAL INSTEAD OF DEBT SERVICE FOR CAPITAL. THAT'S LIKE, SO THERE ISN'T A RISK TO DME OF LAYOFFS IF, IF A

LARGE CUSTOMER CEASES OPERATION. >> CORRECT. AND WE DID THAT BY DESIGN TO, TO AGAIN, TO FUND ONE TIME STUFF, ONE TIME ITEMS IN THIS CASE, RIGHT? WE'RE FUNDING THE FUND BALANCE. AND

THEN AFTER THAT, THOSE DOLLARS WOULD GO TO FUND CAPITAL. >> OKAY. AND THEN ONE LAST QUESTION IS, WAS THERE A MAJOR CAPITAL EXPENDITURE TO BRING THE DATA CENTERS ONLINE DID BY

DME? NOT, NOT. OR WHO PAID FOR IT, I GUESS? >> NO, SIR. ALL INTERCONNECTION COSTS AND THE INFRASTRUCTURE THAT NEED TO BE BUILT, THEY PAID 100%. IN FACT, PORTIONS OF THAT INFRASTRUCTURE THAT THEY BUILT WAS ACTUALLY DEEDED TO THE CITY. AND SO WE WE WILL WE OUTRIGHT OWN SOME OF THOSE ASSETS. SO ANYTHING THAT'S INTERNAL TO THEM, THEY OWN, BUT ANY INTERCONNECTION INTO THEIR FACILITY, THEY BUILT AND DEEDED IT TO US.

>> OKAY. I THINK THOSE ARE ALL THE QUESTIONS I HAD ON. >> COMMENT ON THIS DISCUSSION, WHICH IS SINCE THE STRUCTURE IS BUILT AND ALL THE INTERCONNECTION IS AVAILABLE, IF FOR SOME REASON THIS PARTICULAR CUSTOMER WERE TO GO AWAY IN THIS ENVIRONMENT, I'M QUITE CERTAIN THAT FACILITY WOULD BE IMMEDIATELY SEIZED ON, GOBBLED UP, TAKEN OVER BY ANOTHER ENTITY THAT WANTED TO OPERATE, BECAUSE ALL OF THAT INFRASTRUCTURE HAS BEEN CREATED

AND THE FACILITY IS ALREADY THERE. IS THAT TRUE OR FALSE? >> WELL, WHAT I CAN SAY IS THAT, YOU KNOW, THERE'S THERE'S ABOUT 350GW OF DATA CENTER DEMAND THAT WANTS TO INTERCONNECT INTO THE ERCOT GRID. SO I THINK CERTAINLY THERE'S, THERE WOULDN'T BE A SHORTAGE OF, OF FOLKS THAT WOULD BE LOOKING AT THAT FACILITY AGAIN. BUT IT'S A LITTLE, LITTLE SPECULATIVE FOR ME TO SAY THAT DEFINITIVELY. RIGHT. BUT BUT CERTAINLY I THINK THAT BOTH THE COMPANY AND CERTAINLY WE WOULD BE WORKING WITH THE COMPANY TO TRY TO MAKE SURE THAT WE HAVE AS LITTLE DOWNTIME IN BETWEEN PROSPECTIVE OPERATORS OF THAT FACILITY OR, OR SOME OTHER USE OF THAT

FACILITY. >> AND WOULD WE ALSO CONTINUE TO USE THE SAME TYPE OF STRUCTURING OF AGREEMENT WITH NEW DATA CENTERS THAT WOULD WANT TO COME IN TO OUR SERVICE

AREA? >> YEAH, I THINK I THINK WE'VE HAD A LOT OF CONVERSATIONS ABOUT THAT. CERTAINLY THE COUNCIL IS GOING TO BE TAKING UP THIS ISSUE ON AUGUST 4TH.

AND SO WE'RE GOING TO BE KIND OF LOOKING TO TO THAT THAT DIRECTION. BUT I THINK CURRENTLY IN THE FACT THAT WE DON'T HAVE A SPECIFIC TARIFF RATE FOR THESE LARGE LOADS, I THINK A PPA IS, IS, YOU KNOW, REALLY THE ONLY OPTION AT THIS POINT. OBVIOUSLY, THE COUNCIL COULD ALWAYS SAY NO TO A PPA, BUT AGAIN, THAT'S WHAT WE'LL BE LOOKING TO DIRECTION ON AUGUST 4TH ON HOW WE THEN PROCEED WITH WITH CREATION OF A, OF A, OF A LARGE LOADING TARIFF. NOW ONCE

[00:45:09]

>> THANK YOU. >> MR. RAINER. >> SO THE $200 MILLION FUND

BALANCE IS STARTED ROUGHLY IN 21, IS THAT CORRECT? >> YES, SIR. IT WAS AFTER AFTER

WINTER STORM URI. >> OKAY. AND SO DID WE HAVE A TARGET DATE TO REACH THAT 200

MILLION, OR IS IT JUST KIND OF A FLUID? >> NO, NO REAL TARGET. WE JUST RECOGNIZED THAT THAT WAS THAT THAT WAS AN EXPOSURE THAT WE HAD. AND, YOU KNOW, COUNCIL OPTED TO TO BASE IT ON 48% OR 46% OF, OF THE BUDGETED EXPENSES. AND CERTAINLY THOSE, THOSE EXPENSES CONTINUE TO GROW. THAT TARGET, YOU KNOW, BECOMES KIND OF, YOU KNOW, EASIER OR EASIER TO GET TO. BUT AGAIN, THERE WAS NO SPECIFIC TIME FRAME TO, TO BUILD THAT 200

MILLION. >> AND COUNCIL, IS IT PERMISSIBLE TO ASK HOW MUCH WE HAVE IN OUR TARGET BUFFER FUND RIGHT NOW? IS IT IS THAT IS THAT THIS.

>> IF YOU LOOK AT THE 2425 COLUMN, WE ENDED THAT YEAR AT 126 MILLION. AND ACTUALLY FOR THAT PARTICULAR YEAR, WE WERE ACTUALLY ABOVE THE MINIMUM OF 121 MILLION FOR THE FISCAL YEAR 2526, WE'RE PROJECTING TO BE AT 146 MILLION ENDING FUND BALANCE, AND ALSO ABOVE THE MINIMUM OF

143. >> I APPRECIATE I DIDN'T KNOW WHERE THAT LINE WAS, SO IF I MAY ASK, THEN YOU SAID AFTER WE GET THE 200, THEN THE EXCESS AT THAT POINT, SORT OF LIKE THE OVERFLOW WILL GO TOWARDS CAPITAL. THAT WAS A CONVERSATION THAT WE HAD HAD

AND SUCH IS THAT, YES. >> I THINK THAT'S KIND OF THE PRELIMINARY KIND OF VIEWPOINT, I THINK, FROM FROM STAFF WE ARE WORKING WITH WITH MATCH GROUP, THE CITY'S FINANCE DEPARTMENT, ON SOME FINANCIAL POLICIES. AND SO THAT IS SOMETHING THAT WE WOULD LIKE TO ADDRESS.

CERTAINLY, THE UTILITY CONTINUES TO GROW. AND, YOU KNOW, TODAY THAT EXPOSURE MIGHT BE DIFFERENT. AND SO WE NEED TO ASSESS THAT. AND SO THAT $200 MILLION TARGET MIGHT VERY WELL BE WOULD NEED TO BE HIGHER. BUT AGAIN, THAT'S SOMETHING THAT WE'LL BE WORKING WITH MATT AND HIS IN HIS GROUP TO TRY TO BRING BACK A RECOMMENDATION. ONCE WE HAVE THOSE FINANCIAL

POLICIES READY. >> I APPRECIATE THAT, BECAUSE THAT WAS GOING TO DOVETAIL WITH MY QUESTION. THEN ROUGHLY 2829, WE'D BE AT THAT 200 MILLION MARK. BUT I THINK RIGHTFULLY SO.

WE SHOULD LOOK AND SEE IF THAT'S GOING TO BE ENOUGH TO PAY FOR ALL THE GROCERIES, AS IT WERE. AND AT WHAT POINT DO WE NEED TO BE LOOKING AT, BESIDES TALKING, BUT ACTUALLY PRESENT TO THE COUNCIL AN IDEA OF OF A NEW NUMBER? I'M JUST CURIOUS IF THAT'S I KNOW THAT'S PROBABLY IN THE WORK. IF NOT, IT'S BEEN THOUGHT OF. I JUST WANT TO SAY IT OUT LOUD.

>> YEAH. AND I DON'T WANT TO SPEAK FOR MATT, BUT I THINK MATT ULTIMATELY WANTS TO WILL BE BRINGING THOSE FINANCIAL POLICIES SPECIFIC TO THE UTILITIES HERE TO THE BOARD FOR CONSIDERATION AND OBVIOUSLY RECOMMENDATION BACK TO THE COUNCIL. AND THAT'LL BE THE

OPPORTUNITY TO. >> DO THAT. I LOOK FORWARD TO SEEING THAT. THANK YOU.

>> AND ONE LAST QUESTION ON THE FUND. THE RESERVE FUND, DOES IT ACCRUE INTEREST OR SOMETHING?

>> YES, SIR. AND SO ANY ANY INTEREST ON THE OPERATING RESERVE COMES IN AS A AS A REVENUE INTEREST REVENUE WITHIN THAT NON RATE REVENUE CATEGORY. SO IT DOES THAT DOES GO TO TO

FUND ONGOING OPERATIONS JUST LIKE ANY OTHER REVENUE. >> THE AMOUNT STAYS THE SAME.

THE EXTRA FOR THE INTEREST GOES FOR THE OPERATION. SO THAT'S THAT 158 IS A TRUE NUMBER.

WITHOUT THE INTEREST THEN WOULD THAT BE CORRECT. THAT'S CORRECT. OKAY. THANK YOU.

>> ANY FURTHER QUESTIONS ON THE ELECTRIC BUDGET OR ELECTRIC RATES. AND SO I THINK WE NEED

[00:50:05]

[D. PUB26-064 Consider recommending adoption of an ordinance of the City of Denton, Texas, establishing the rates for Solid Waste service; providing for a repealer; providing for a severability clause; and, providing an effective date.]

TIME I EVERY TIME I LOOK AT THE AGENDA. >> OH MY GOD. SETH. BUDGET MANAGER PRESENTING THE 2627 SOLID WASTE AND RECYCLING. PRELIMINARY BUDGETS AND RATE.

SO THE ASSUMPTIONS FOR SOLID WASTE, THERE'S NO RATE INCREASE FOR 2027. THERE IS A CHANGE IN PERMIT FEE. THAT WAS. AND WE'LL HAVE SOME MORE INFORMATION ON THIS IN A LATER SLIDE FOR THE LIQUID AND SOLID WASTE FOR SPECIAL WASTE AND RECYCLABLES TO COME OUT OF THE WASTEWATER ORDINANCE OVER TO THE SOLID WASTE ORDINANCE, A RATE CONTRIBUTION OF 18.28 TO 18.6.

THIS INCLUDES A UP TO $1 MILLION IN GAS SALES, WHICH IS A NEWER PROGRAM THAT WE WILL

HAVE IN 27. YES, SIR. >> GAS IS THAT METHANE GAS? >> IT'S RENEWABLE.

>> GOOD MORNING. BRANT, SOLID WASTE AND RECYCLING DIRECTOR. THAT'S THE RENEWABLE NATURAL GAS PROJECT. SO THAT IS WE ARE CAPTURING THE METHANE OUT OF THE LANDFILL. THEY ARE CLEANING THAT UP, PUTTING IT TO CLEAN PIPELINE QUALITY GAS AND SELLING THAT AS RENEWABLE

NATURAL GAS. >> SO IT IS NATURAL GAS. >> YES, SIR.

>> FROM METHANE. THAT'S CORRECT. AS A BYPRODUCT. >> THAT'S CORRECT.

>> ALL RIGHT. VERY GOOD. THANK YOU. YEAH, WE'VE ATTEMPTED. >> THAT BEFORE.

>> RIGHT. WE'VE DONE THAT BEFORE. >> OUT THERE.

>> WE WE HAVE MANY, MANY YEARS AGO. THIS IS YEAH, THIS IS A WAY DIFFERENT AGREEMENT. YEAH.

THIS IS A PERCENTAGE OF THEIR ROYALTY. SO THE MORE MONEY THEY MAKE, THE MORE MONEY WE MAKE.

AND THAT'S A SLIDING SCALE. >> OKAY. SO THIS IS A THIRD PARTY OUT THERE OPERATING.

>> IT IS. >> AND WE'RE JUST GETTING A CUT TO LET THEM USE OUR.

>> THEY'RE SPENDING ALL THEIR MONEY UP FRONT TO EXCUSE ME, IMPROVE MUST BE SOMETHING ABOUT THE MICROPHONE STUFF TO IMPROVE THE GAS COLLECTION SYSTEM, TO BUILD ALL THE PLANT, TO MAKE THAT CONVERSION FOR THE PIPELINE GOING INTO THE SALES LINE, THAT THAT IS ALL THEIR INFRASTRUCTURE, THEIR EXPENSE. WE JUST GET THE REVENUES ON TOP OF THAT.

>> OKAY. >> SO THERE'S NO COST TO THE CITY. CORRECT. BUT THERE IS

REVENUE. >> THERE'S PARTS OF THAT THAT ARE IN THERE THAT ARE SOME OF OUR THAT WE GET TO. WE GET THE FIRST RIGHT OF REFUSAL ON WHETHER WE WANT TO DO THAT OR NOT. AND THEN WE TAKE SOME OF THOSE. BUT MOST OF THAT PLANT INFRASTRUCTURE IS THEIR EXPENSE.

>> VERY GOOD. THANK YOU. YOU'RE WELCOME. >> WONDERFUL NUMBER. HOW MUCH

DID THEY MAKE A. >> IT'S. WE GET ABOUT 22% ON THE MAXIMUM END. SO YOU CAN DO THE MATH THE OTHER WAY. THEY GET ABOUT 78% OF THAT REVENUE. SO THEY'RE MAKING REAL GOOD

MONEY. >> YEAH THEY ARE. YEAH THEY ARE. >> THAT'S WHY THEY'RE FOOTING

THE BILL FOR ALL THE. >> AND THAT'S ALL CONTRACTUAL. IS THAT CORRECT?

>> THAT'S CORRECT. YES. >> WHEN DOES THAT RENEWAL COME? >> IT'S A 20 YEAR CONTRACT.

>> AND WE'RE IN >> WHAT? >> THIS IS THE FIRST YEAR.

>> OH, GOODY. >> ASSUMPTIONS ARE. HEALTH INSURANCE INCREASE OF 4% IS INCLUDED. VACANCIES. BUDGET AT THE LOW END OF THE PAY BAND AND 2% AVERAGE MERIT INCREASE.

MAJOR CHANGES FOR THE BUDGET FOR 27 DO INCLUDE SUPPLEMENTAL. AND THIS IS FOR INCREASED DEMAND TO THE DEVELOPMENTS COMING ON LANDMARK HUNTER AND COAL. FOR THOSE SERVICES THAT

[00:55:01]

THE FIVE YEAR FORECAST. >> SO THAT $8 MILLION SPENT OUT OF THE RESERVE FUNDS IS JUST

NOT, EXCUSE ME, IS DEBT SERVICE NOT KIND OF OPERATIONAL COST? >> YEAH. WELL, IT WOULD BE IN

LIEU OF SO WE DON'T HAVE TO DEBT FUND. YES, SIR. >> RIGHT. OKAY. SO JUST AGAIN LOOKING FOR THAT, LOOKING FOR AN OVERHANG WHERE WE'RE USING RESERVES, IF WE'RE USING RESERVES TO RUN SALARIES AND FUEL AND STUFF LIKE THAT, THEN THAT COMES A PRICE SHOCK.

>> YES, SIR. >> YEAH. OKAY. THANK YOU. >> THIS IS JUST INFORMATION ON THE SUPPLEMENTAL REQUEST FOR THE GROWTH RESIDENTIAL COLLECTION, COMMERCIAL ROLL OFF AND FRONT LOAD SERVICE, AND THE COST OF THE SUPPLEMENTAL REQUEST. AND AGAIN, THE VEHICLES FOR THIS REQUEST WILL BE PURCHASED FROM THE FUND BALANCE. SO THESE ARE THE FTES.

LOOKING AT SOLID WASTE GROWTH PROJECTIONS. WE'RE SEEING ABOUT 8% GROWTH IN LANDFILL CUSTOMERS 3.5% GROWTH YEAR OVER YEAR GENERALLY IN RESIDENTIAL CUSTOMERS. BUT WITH THE NEW DEVELOPMENTS COMING ON, WE'LL SEE THAT DOUBLE TO CLOSER TO 7% WITH LANDMARK 2% GROWTH IN THE COMMERCIAL FRONT LOAD SIDE LOAD SERVICES AND 3% GROWTH IN ROLL OFF SERVICES.

>> SO THE LIGHT GREEN IN THE CHART IN THE LINE IS THE 7% INSTEAD OF THE 3.5% GROWTH.

>> LIGHT GREEN. >> THIS KIND OF THE THREE COLORS OF GREEN. YEAH. WELL, IN

THE LIGHTER COLOR. >> WE WANTED TO SEPARATE. WHAT WE'RE SEEING TRADITIONALLY IS RESIDENTIAL GROWTH YEAR OVER YEAR. AND THEN THAT GROWTH FROM DEVELOPMENT PRESSURES SEPARATE.

SO THAT LINE ABOVE THE RESIDENTIAL CUSTOMER LINE, THERE IS JUST THAT DEVELOPMENT GROWTH THAT WE'RE SEEING ON TOP OF OUR NORMAL 3 TO 3.5% RESIDENTIAL GROWTH.

>> AND ARE THOSE IN TONS OR HOUSES? >> THOSE ARE HOUSES OKAY? YES,

SIR. >> SO THAT NUMBER IS VARIABLE BASED ON WHEN THE DEVELOPMENTS ACTUALLY COME ONLINE AND ACTUALLY PUT THE UNITS UP FOR SALE.

>> IT IS. AND THEY'RE ACTUALLY AHEAD OF SCHEDULE. SO WHAT WE'VE GOT MOST OF WE'VE TALKED WITH ALL THE BUILDERS AS DEVELOPERS ARE SELLING THOSE LINES TO THE BUILDERS. EACH OF THEM ARE PROJECTING ABOUT 500 HOMES PER YEAR. SO YOU'VE GOT HUNTER THIS YEAR, COAL NEXT YEAR, CRAVER THE FOLLOWING YEAR THAT ARE ALL JUST ADDING ONE ON TOP OF THE OTHER. THANK YOU.

>> AND THEN SO YOU'VE MENTIONED THE KIND OF SOUTHWEST DEVELOPMENTS, ALL THOSE BIG DEVELOPMENTS. HAVE YOU TALKED TO THE DEVELOPERS KIND OF ACROSS THE NORTH SIDE OF TOWN?

ARE THEY ARE THEY NOT YET TO THE POINT OF. >> WE'RE PICKING THAT UP IN

CRAVER THAT'S OUT IN OUR OUT YEARS. >> OKAY. CRAVERS IN THE NORTH.

OKAY. I WAS THINKING. >> AND THEN WE'VE GOT THE ETJ AND THE MUDS THAT WE'RE ALSO SERVICING. AND WE'RE DOING THOSE TYPICALLY WITH DEVELOPMENT AGREEMENTS THROUGH

THROUGH DEVELOPMENT SERVICES. >> OKAY. YEAH. THANK YOU. THAT'S A LOT OF GROWTH.

>> YES, SIR. >> SO MOVING ON. I'LL MENTION THE DETAILS FOR THE CAPITAL IMPROVEMENT PLAN AND NO CHANGES SINCE LAST TIME WE MET 12.5 MILLION EXPECTED FOR THE 2027 BUDGET, WITH 5 MILLION OF THAT DEBT FUNDED AND 7 MILLION OF THAT FOR VEHICLES REVENUE

FUNDED. TO SPEAK TO. THERE'S NO. YES, SIR. >> SORRY, SIR. COULD YOU GO BACK? THANK YOU. THANK YOU. TO.O CHANGES IN THE BASE RATE, BUT THERE ARE SOME CHANGES TO THE RATE ORDINANCE, CORRECTIONS TO THE LANGUAGE, CORRECTING SOME SPELLING AND GRAMMAR ERRORS.

AND THEN AS I PREVIOUSLY MENTIONED, THE PERMIT FEE FOR THE SPECIAL WASTE AND RECYCLABLES THAT EXIST ON THE WATER WASTEWATER RATE ORDINANCE. CURRENTLY, SOLID WASTE IS

[01:00:03]

>> DO WE HAVE ANY QUESTIONS? OKAY. LOOKS LIKE WE DON'T HAVE ANY QUESTIONS.

>> CONSIDER QUESTION, MR. CHAIRMAN. SO WHERE WE ARE HERE LOOKING AT THE PDF VERSION. SO WE HAVE FINISHED THIS PORTION AND WE PREVIOUSLY REVIEWED THAT PORTION. THE RATE SUMMARY.

>> YEAH I THINK SO. OUR. >> SO WE DID THIS FIRST AND NOW WE'RE FINISHING UP. THANK YOU.

JUST TRYING TO FIGURE OUT WHERE I'M AT HERE WITH THAT REVIEW. >> YEAH. OUR PRESENTATIONS ARE JUST SLIGHTLY DIFFERENT. I THINK WITH ALL THE BUDGET, LIKE I KNOW A LOT OF BUDGET STUFF IS IN FLUX. SO YEAH. THANK YOU. WE NEED A MOTION TO FOR ITEM D RECOMMENDING ADOPTION FOR ESTABLISHING OF AN ORDINANCE ESTABLISHING RATES FOR SOLID WASTE SERVICE. WE HAVE A MOTION AND A SECOND. ALL IN FAVOR SAY AYE. AYE. ANY OPPOSED. MOTION CARRIES UNANIMOUSLY. AND THEN A MOTION FOR RECOMMENDING APPROVAL OF THE SOLID WASTE FUND FISCAL YEAR 2627.

OPERATING AND CAPITAL BUDGET MOTION. I'LL SECOND. ALL IN FAVOR. SAY AYE. ANY OPPOSED? MOTION CARRIES UNANIMOUSLY. OKAY. OUR NEXT TWO ITEMS ARE ITEM E. CONSIDER RECOMMENDING

[E. PUB26-115 Consider recommending adoption of an ordinance of the City of Denton, Texas, establishing the rates for Water service; providing for a repealer; providing for a severability clause; and, providing an effective date.]

>> SO BUDGET MANAGER TO PRESENT THE WATER UTILITY 2027 BUDGET AND RATES. SO FINANCIAL ASSUMPTIONS AGAIN 3% OVERALL INCREASE TO WATER. THIS IS DIFFERENT FROM THE 5% PREVIOUSLY SHOWN AND THE FUNDING THAT WE'RE EXPECTED TO RECEIVE IN 2027. 2% MERIT INCREASES FOR EMPLOYEES. TMRS RATE UPDATE FROM 18.6 TO 18.28. ALSO HERE, THE HEALTH INSURANCE OF 4% AND VACANCIES BUDGETED AT THE LOWER END OF THE PAY BAND, AND FOR MAJOR CHANGES TO THE BUDGET. HERE IS JUST THE IMPLEMENTATION OF THIS DATA SYSTEM. LOOKING AT THE WATER PROFORMA. SO THE FISCAL YEAR 27 PRELIMINARY IN REVENUES, WE HAVE 61.5 MILLION AND 64.7 MILLION, EXCUSE ME, 61.5 MILLION IN REVENUE AND 64.7 MILLION IN EXPENDITURES. THE EXPECTED USE OF FUND BALANCE OF 3.1 MILLION. AND THAT'S AT A LOWER RATE THAN WAS SHOWN LAST TIME WE MET. IT WAS FIVE. AND NOW WE'RE WE'VE REDUCED THAT DOWN TO THREE. AND JUST TRYING TO USE MORE FUND BALANCE AS POSSIBLE AND SMOOTH OUT THE RATE THAT WE WERE SHOWING IN THE FIVE YEAR FORECAST GOING FORWARD. SO THIS IS THE THE NEW PROJECTIONS FOR YOUR DIRECTION.

FIVE YEAR CAPITAL PLAN IS UNCHANGED AT SINCE LAST TIME WE MET AT 107.9 MILLION IN FY 2027, 107.8 OF THAT IS DEBT FUNDED AND 58,000 FOR REVENUE FUNDED. AND AGAIN, AS WE MENTIONED WITH WASTEWATER, MUCH OF THIS IS ALL DUE TO GROWTH FOR CAPITAL AND PAYING FOR DEBT SERVICE FOR THESE RATE INCREASES. LOOKING AT THE PRELIMINARY RATE CHANGES, WE HAVE RESIDENTIAL WATER SERVICE INSIDE THE CORPORATE LIMITS AND CORPORATE WATER SERVICE INSIDE CORPORATE LIMITS OF 3%. RESIDENTIAL WATER SERVICE OUTSIDE AND COMMERCIAL COMMERCIAL WATER SERVICE OUTSIDE OF 3%. RESIDENTIAL IRRIGATION INSIDE CORPORATE LIMITS AND COMMERCIAL

[01:05:02]

HYDRANTS WHOLESALE, RAW AND WHOLESALE TREATED AT 3%. >> I NOTICE THE FIRE HYDRANT METER DEPOSIT WENT UP SUBSTANTIALLY. IS THAT JUST THE COST OF THOSE METERS, OR DID

SOMETHING CHANGE? I DON'T KNOW. >> GENERAL MANAGER WATER UTILITIES AND STREET OPERATIONS.

THAT'S TO ENSURE FULL COST RECOVERY OF THE METERS. >> DID THE COST GO UP OR ARE WE

JUST ADJUSTING OUR RATE TO MATCH THE. >> ADJUSTING OUR RATE TO MATCH

WHAT THE ACTUAL COST OF THE METERS ARE? >> OKAY. THANK YOU.

>> THANK YOU. >> METER FEES AND LOCATION FEES. RELOCATION FEES AT 3%. FIRE HYDRANT INSTALLATION 3%. AND THEN LOOKING AT A COMPARISON OF OUR CURRENT RESIDENTIAL RATE BASED ON 9000 GALLONS. AND THEN PROPOSED. I'LL SHOW YOU THAT AGAIN. CURRENT RESIDENTIAL RATE AND THEN PROPOSED. AND THEN THE CURRENT COMMERCIAL RATE COMPARISON. AND OUR PROPOSED.

THE CURRENT COMMERCIAL. AND PROPOSED. AND I'LL STAND FOR QUESTIONS AND DIRECTION.

>> MR. RAYNER. >> I CAN'T REMEMBER THE SLIDE. GO BACK AND I'LL TELL YOU WHEN.

WELL, SO THE LAST I REMEMBER NOW THE. NO. ONE MORE, PLEASE. THE ONE MORE. I'M ALMOST THERE.

OKAY, SO OUTSIDE CORPORATE VERSUS INSIDE, IS THAT A COMPETITIVE. I MEAN, THESE OUTSIDE CORPORATE LIMITS WHERE THEY'RE GETTING THEIR WATER IF THEY DON'T GET IT FOR US.

>> THIS IS THE RATE THAT REFLECTS IF THEY GET THE WATER FROM US, IF THEY DON'T GET THE WATER FROM US, THEY CAN THEY CAN EITHER DRILL WELLS OR THEY CAN WORK WITH ANOTHER UTILITY,

BUT THERE'S NOT MANY OPTIONS OUT THERE FOR THEM. >> AND WHY I ASK THIS, AND I'M SORRY, THIS MAY BE CONSIDERED A SNIDELY WHIPLASH COMMENT, BUT WHY COULDN'T WE BUMP THEM 1 OR

2% VERSUS INSIDE. >> ABOUT 15% MORE THAN WHAT OUR RESIDENTIAL RATE IS FOR SOMEONE WITHIN THE CORPORATE LIMITS. AND WE CAN'T JUST BUMP THEIR RATE, WE HAVE TO ACTUALLY DO A

COST OF SERVICE STUDY TO DEFEND WHAT THAT RATE ACTUALLY IS. >> WOULD YOU BE WILLING TO

DEFEND THAT? >> THE 15% TODAY? WE CAN WE CAN DEFEND, BUT WE HAVEN'T DONE AN UPDATED COST OF SERVICE STUDY, WHICH WOULD WOULD JUSTIFY AN ADDITIONAL COUPLE PERCENTAGE

POINTS. AND THAT TAKES SOME TIME TO DO. >> JUST ASKING. YEAH, I'D LIKE

TO SEE IT. BUT YOU KNOW. >> WELL, IT IS PLANNED. WE HAVE A WE HAVE ANOTHER COST OF SERVICE STUDY PLAN FOR NEXT YEAR. IT IS. YEAH. SO NEXT YEAR WE'LL BE DOING ANOTHER COST OF

SERVICE STUDY WHICH WILL LOOK AT THAT OUTSIDE CITY RATE. >> THAT'D BE GREAT. I

APPRECIATE IT. >> YOU'RE WELCOME. >> YEAH.

>> ANY FURTHER QUESTIONS? OKAY. SO WE ARE LOOKING FOR A MOTION ON ITEM E AND ITEM J. WE HAVE A MOTION FOR ITEM E RECOMMENDING ADOPTION OF ORDINANCE ESTABLISHING RATES FOR WATER SERVICE. AND A SECOND. ALL IN FAVOR, SAY AYE. MOTION CARRIES UNANIMOUSLY. NOW WE'LL MOVE ON TO. J. IS THAT WHAT IT. NO, WAIT. HOLD ON, G G YEAH WE HAVE ALL RIGHT. WE HAVE A MOTION FOR

[G. PUB26-117 Consider recommending approval of the Water Fund Fiscal Year 2026-27 Operating and Capital Budget.]

[01:10:09]

[I. PUB26-119 Consider recommending approval of the Drainage Fund Fiscal Year 2026-27 Operating and Capital Budget.]

OPERATING AND CAPITAL BUDGET. >> SO. BUDGET MANAGER TO PRESENT THE DRAINAGE FUND FISCAL YEAR 2027. BUDGET AND RATES. SO FINANCIAL ASSUMPTIONS FROM LAST TIME WE MET WERE 12%.

THAT'S BEEN ADJUSTED DOWN TO 5% FOR THE RATE INCREASES. THIS INCLUDES ALSO A 2% INCREASE FOR EMPLOYEES, AN ADJUSTMENT TO THE RATE FROM 1806 TO 18.28, HEALTH INSURANCE INCREASE OF 4%, AND VACANCIES BUDGETED AT THE LOW END OF THE PAY BAND. MAJOR CHANGES FOR THE BUDGET HERE ARE.

THE WATERSHED OPERATIONS HAVE BEEN MOVED OUT OF THE DRAINAGE FUND INTO ENVIRONMENTAL SERVICES. SO LOOKING AT THEIR FIVE YEAR FORECAST, THE PRELIMINARY FY 27 BUDGET, WE SHOW 5.9 MILLION IN REVENUE AND 5.9 MILLION IN EXPENDITURES. NO USE FUND BALANCE AND SMOOTHING OUT THAT FOR YOUR DIRECTION. WE'RE LOWERED THAT TO 5% FOR THE FIVE YEARS INSTEAD OF WE WERE SHOWING 12 AND 27 AND ZERO IN THE OUT YEARS. YOU'LL ALSO NOTICE THAT THE GENERAL FUND TRANSFER. THAT'S BECAUSE THE WATER WATERSHED HAS MOVED OUT AND AN INTERNAL SERVICES THAT WAS GENERAL FUND TRANSFER. AND THE INSPECTION FEE, THE REVENUES FOR THAT AS WELL.

THAT'S WHY THERE'S YOU'RE SEEING THAT GO AWAY IN THE OUT YEARS. FOR DRAINAGE CAPITAL, WE HAVE $4 MILLION AND IT'S FULLY REVENUE FUNDED. AND THIS IS PART OF WHAT THE RATE IS HELPING US TO INCREASE OUR FUND BALANCE SO THAT WE CAN REVENUE FUND ALL THE PROJECTS FOR

DRAINAGE. >> I HAVE A QUESTION. COULD YOU GO BACK TO THE PRO FORMA? YES.

I NOTICED THE INTERFUND TRANSFERS HAVE JUMPED UP QUITE A BIT. I WAS WONDERING IF YOU

COULD GIVE SOME BACKGROUND ON THAT. >> YEAH. SO FOR THE FOR THE TRANSFERS INTO THE DRAINAGE FUND HERE, THIS IS GOING TO BE FROM COST OF SERVICE. AND THE OVERALL INCREASE IS. I'D HAVE TO GET MORE INFORMATION FOR THE DETAIL ON THAT, THAT, THAT

INCREASE THAT WE'RE SEEING YEAR OVER YEAR. >> I WOULD APPRECIATE THAT.

THANK YOU. YES, SIR. >> PROBABLY CONTINUE TO THE. >> LOOKING AT THE RATE CHANGES, THE DETAIL HERE. IT'S BASED ON SQUARE FOOTAGE OF, YOU KNOW, SHOWING THE CURRENT AND PROPOSED AND THE CHANGES FOR 5%. THIS IS MEASURED BY SQUARE FEET OF IMPERVIOUS SURFACE COVER.

AND THEN HERE'S A CURRENT RESIDENTIAL DRAINAGE BILL BASED ON 1500FT■!S. AND THE PROPOSED.

AND JUST AS A REMINDER, WE HAVE NOT UPDATED THE DRAINAGE FEES SINCE WE IMPLEMENTED THEM. AND IT WAS A, I DON'T KNOW THE EXACT YEAR, BUT A LONG TIME. HERE'S OUR CURRENT COMMERCIAL RATE FOR DRAINAGE AND THE PROPOSED COMMERCIAL RATE FOR DRAINAGE. AND WE'LL STAND FOR

QUESTIONS AND DIRECTION. >> ARE THERE ANY QUESTIONS? DID YOU NEED TO SEE THE DETAILS OF

THAT TRANSFER BEFORE APPROVAL OR DO YOU. >> CAN YOU IS THERE ANYONE HERE

COULD AT LEAST SPEAK TO THE QUESTION? >> I BELIEVE THE QUESTION IS

THE. >> THE TRANSFER HAS JUMPED QUITE A BIT, LIKE ALMOST DOUBLE.

>> CATHOLIC CHIEF STRATEGIC OFFICER. SO THAT INCLUDES A TRANSFER FOR COST ALLOCATION

[01:15:01]

>> SO INTERNAL ENGINEERING FUND OR EXTERNAL CONSULTANTS. IS THAT AS A RESULT OF THE

PROJECTS THAT ARE UNDERWAY? >> THAT IS CORRECT. THAT IS A RESULT OF THE WORK THAT THEY

ARE DOING TO SUPPORT THIS UTILITY. >> VERY GOOD. THANK YOU SO MUCH.

THANK YOU FOR ASKING. >> ANY FURTHER QUESTIONS. THEN I WILL ENTERTAIN A MOTION ON ITEM I RECOMMENDING APPROVAL OF DRAINAGE FUND FISCAL YEAR 2627 OPERATING AND CAPITAL BUDGET.

SO MOVED. WE HAVE A MOTION AND A SECOND. ALL IN FAVOR, SAY AYE. AYE. MOTION CARRIES UNANIMOUSLY.

OUR NEXT ITEM FOR INDIVIDUAL CONSIDERATION IS MANAGEMENT REPORTS. OH OH CUSTOMER SERVICE.

[K. PUB26-121 Consider recommending approval of the Customer Service Fund Fiscal Year 2026-27 Operating and Capital Budget.]

>> BUDGET MANAGER TO PRESENT THE 27 CUSTOMER SERVICE PRELIMINARY FUND. SO THE MAJOR CHANGES FOR THE BUDGET FOR CUSTOMER SERVICE THIS YEAR IS THE IMPLEMENTATION OF THE CREDIT CARD PROCESSING FEES, WHICH WILL BEGIN. TEN 126 IT'S A PERCENTAGE OF ALL THE ONLINE PAYMENTS FOR RESIDENTIAL COMMERCIAL CUSTOMERS, AND IT RESULTS IN UP TO APPROXIMATELY A $1 MILLION SAVINGS TO THE DEPARTMENT. LOOKING AT THE CUSTOMER SERVICE PROFORMA FOR 27, WE HAVE $9.9 MILLION IN REVENUE AND $9.9 MILLION IN EXPENDITURES. JUST ALSO, AS A REMINDER, THIS IS AN INTERNAL SERVICE WITHIN THE BUDGET. AND SO IT IS IT ALLOCATES ITS COST OUT TO THE VARIOUS DIFFERENT FUNDS THAT IT PROVIDES SERVICES FOR. AND THOSE ARE LISTED HERE.

>> DO WE HAVE ANY IS THAT IS IT THE LAST SLIDE? >> YEAH, IT'S A COMPREHENSIVE

SUM FOR OVERALL. DO WE. >> ARE THERE ANY QUESTIONS ON THE CUSTOMER SERVICE BUDGET.

>> THAT'S IT. >> SO I KNOW WE'VE BEEN TALKING ABOUT THIS. I FEEL LIKE FOR ABOUT A YEAR, THE, THE, THE FEE FOR CREDIT CARD PROCESSING BECAUSE CREDIT CARD PROCESSING IS A SIGNIFICANT COST IN OUR TRANSACTIONS. AND, YOU KNOW, IT'S, THIS ISN'T JUST A FEE TO CHARGE A FEE, IT IS POSSIBLE FOR RESIDENTS TO CHANGE TO ECHECK OR DIFFERENT FORMS OF PAYMENT TO AVOID INCURRING THAT COST FOR THE CITY, WHICH WE NOW KIND OF CHARGE BACK. SO I THINK IT'S REALLY IMPORTANT TO SAY THAT THIS ISN'T JUST A FEE THAT'S GOING TO EFFECTIVELY BE A RATE INCREASE ACROSS THE BOARD. IT'S PRETTY SIMPLE FOR RESIDENTS TO CHANGE THEIR PAYMENT METHOD TO AVOID THE FEE AND SO AND LOWER THE COST TO THE CITY AT THE SAME TIME.

THAT'S ALL. THAT'S MY SOAPBOX. I'LL ENTERTAIN A MOTION, ENTERTAIN A MOTION FOR ITEM K.

>> I HAVE A FEW MORE SLIDES JUST FOR COMPREHENSIVE TO LET YOU SEE THE TOTAL RATE CHANGE AND THE IMPACT TO THE RESIDENTIAL CUSTOMER BILL. SO NO, NO CHANGE IN SOLID WASTE.

WE HAVE THE ANNUALIZED ELECTRIC RATE WATER WASTEWATER DRAINAGE. AND THIS IS BASED ON TWO CART SERVICE FOR SOLID WASTE OF TRASH AND ONE CART TRASH. ONE CART RECYCLING THE BASIS OF 1000 FOR KILOWATTS FOR RESIDENTIAL, 1.1KW FOR SMALL COMMERCIAL WATER, 9000 GALLONS.

WASTEWATER 6000 GALLONS AND DRAINAGE. SORRY, THIS SHOULD BE 1000 1500FT■!S OF IMPERVIOUS PO.

NINE GALLONS. >> I'M SORRY, WAS THE DRAIN. YOU'RE SUPPOSED TO BE 1500FT■!S.

YES. OKAY. THANK YOU. >> AND THEN A HISTORICAL UTILITY RATE. JUST AN UPDATE HERE THAT WE WERE ERRONEOUSLY SHOWING A 3% INCREASE FOR ELECTRIC AND 2024. THAT WAS NOT THE CASE. SO WE'VE REMOVED THAT. BUT HERE ARE THE HISTORICAL UTILITY RATE SUMMARY CHANGES.

AS YOU CAN SEE NOT MUCH AND OR HAVEN'T HAD ANYTHING FOR DRAINAGE. AND IN 2027 WE ARE ASKING DIRECTION FOR 3% AND ELECTRIC 3% WATER, 9% WASTEWATER, NO CHANGE IN SOLID WASTE AND 5% IN DRAINAGE. AND THEN NEXT STEPS, WE WILL HAVE AN AUGUST 4TH CAPITAL BUDGET PRESENTATION WITH COUNCIL, THE AUGUST 8TH BUDGET WORKSHOP WITH COUNCIL WORKSHOP FOLLOW UP WITH

[01:20:05]

AND THEN ADOPTION ON THE 22ND. AND THAT IS IT. >> ANY FURTHER QUESTIONS AT

THIS TIME? >> I'M PREPARED TO TAKE ACTION ON K IF YOU ARE. YES. SO MOVE.

>> WE HAVE A MOTION AND A SECOND. ALL IN FAVOR, SAY AYE. AYE. MOTION CARRIES UNANIMOUSLY.

[L. PUB26-126 Management Reports 1. 2026-039 AI Data Facilities 2. Future Agenda Items 3. New Business Action Items]

NOW WE WILL MOVE ON TO ITEM L MANAGEMENT REPORTS. >> MR. CHAIR, SO DID PROVIDE TO YOU AN INFORMAL STAFF REPORT THAT I THINK WAS AN ATTEMPT TO TRY TO ANSWER A QUESTION FROM MR. RAYNOR. BUT THIS THIS ISR WE CALL THEM ICERS, WAS SUBMITTED TO THE AGENDA COMMITTEE IN RESPONSE TO COUNCIL MEMBER STEVENS TWO MINUTE PITCH REGARDING DATA CENTERS AND MORATORIUMS. THE AGENDA COMMITTEE THEN MOVED TO PLACE AN ITEM WORK SESSION ITEM ON THE COUNCIL'S AGENDA, WHICH I ALREADY MENTIONED WILL BE AUGUST 4TH. AND SO AT THAT MEETING, THERE WILL BE A CONVERSATION WITH THE COUNCIL ABOUT ALL THINGS UTILITY RELATED ITEMS RELATED TO A DEBT DEVELOPMENT, DEBT DEVELOPMENT CODE, AND ALSO A POTENTIAL MORATORIUM AND PROVIDE KIND OF THE BACKGROUND FOR HOW THAT CAN BE DONE. SO THAT'S KIND OF THE STATUS THAT THAT I BELIEVE WAS MAYBE WHERE MR. RAYNOR WAS HEADED. IF THAT'S THAT'S THE CASE, PLEASE LET US KNOW. BUT WITH THAT, HAPPY TO ANSWER ANY QUESTIONS, YOU KNOW, RELEVANT

TO THE PUB ON THIS I SR. >> ANY FURTHER QUESTIONS? >> I'M GLAD TO HEAR THAT THE COUNCIL IS GOING TO ADDRESS THIS AND CHEW ON IT MORE THAN WE COULD, BUT I THINK WE JUST NEED TO HAVE FACTUAL INFORMATION WHICH IS PRESENTED TO US REGULARLY, SO WE CAN PRESENT IT TO THE PUBLIC. THE PUBLIC IS JUST THEY'RE PICKING UP ERRONEOUS OR EXAGGERATED INFORMATION AND AND WE JUST NEED TO BE ABLE TO BRING THEM BACK INTO THE FOLD OF WHAT WE'RE ACTUALLY DOING, WHAT'S ACTUALLY GOING TO BE HAPPENING. AND THIS HYSTERIA, PARDON? IT MAY BE A BIT EXTREME STATEMENT, BUT I'LL CALL IT THAT OUT IN THE CITY IS JUST UNMERITED.

>> WELL, AND TO CHIME ON TO THAT, I THINK THAT THE KINDS OF THINGS THAT THE DMV IS CURRENTLY DONE WITH DEALING WITH VERY LARGE LOAD, NEW LOAD WITH THE CORE SCIENTIFIC HAS BEEN EXCELLENT, BUT I THINK TOO FEW PEOPLE OUTSIDE OF HERE IN THE COUNCIL REALLY HAVE A GOOD HANDLE ON IT. SO MY QUESTION IS ACTUALLY, SO DID COUNCILMAN STEVENS ACTUALLY REQUEST AN ORDINANCE FOR ELIMINATING ANY FUTURE DATA CENTERS, OR WAS IT JUST A GENERAL QUESTION ABOUT

WHERE WE WOULD GO WITH THAT? >> YEAH, I THINK I THINK THAT'LL BE PART OF THE DISCUSSION. ULTIMATELY, YOU KNOW, WE'LL, YOU KNOW, WE'LL BE LOOKING FOR COUNCIL FOR DIRECTION ON ALL THE ASPECTS OF THE PRESENTATION, WHETHER IT'S A MORATORIUM, DDC, OR ANY TYPE OF CHANGES THAT THEY MAY WANT TO LOOK AT WITHIN SOME OF THE UTILITIES.

>> THANK YOU. >> SO THE OTHER TWO ITEMS ARE NEW BUSINESS ACTION ITEM MATRIX.

YOU HAVE A WORK SESSION ITEM TODAY. FOLLOWING THIS ON THE WATER SIDE AND KEEPING KIND OF THEIR QUARTERLY UPDATES. AND THEN REALLY ON THE FUTURE BUSINESS, BUSINESS ACTION ITEMS, NO OTHER BUDGET STUFF THAT TENDS TO BE KIND OF THE, THE, THE BIG LIFT HERE. I REALLY APPRECIATE YOUR DIRECTION AND ALL YOUR COMMENTS RELATED TO THAT AND REALLY APPRECIATE AMY AND MATT AND THEIR STAFF AND, AND PUTTING TOGETHER ALL THAT INFORMATION FOR YOU. BUT THAT'S, THAT'S ALL I HAVE FOR YOU UNLESS YOU HAVE ANY QUESTIONS OR NEED ANYTHING ELSE.

>> ANY MORE ITEMS FOR NEW BUSINESS. >> NO ITEM FOR NEW BUSINESS. I WANT TO JUST AMPLIFY THE COMPLIMENTS TO STAFF ABOUT. THEY DID A GOOD JOB AND I THINK GAVE US PLENTY OF INFORMATION TO LOOK AT AND TO PREPARE FOR. THANK YOU.

[A. PUB26-109 Receive a report and hold a discussion regarding the quarterly project update from the Water Utilities Planning and Engineering Division.]

>> WITH THAT, OUR OPEN MEETING IS CONCLUDED AND WE'LL MOVE INTO WORK SESSION TO RECEIVE A REPORT AND HOLD A DISCUSSION REGARDING QUARTERLY PROJECT UPDATES FROM WATER UTILITIES PLANNING AND ENGINEERING.

>> GOOD MORNING. >> I'M KYLE PEDIGO, PLANNING AND ENGINEERING DIVISION MANAGER FOR WATER UTILITIES. I'M HERE TODAY WITH ONE OF OUR PROJECT MANAGERS, JASON DONNELL,

[01:25:05]

>> GOOD MORNING. JASON DONALD, WATER UTILITIES. >> PROJECT MANAGER. AS KYLE STATED, WE WILL START WITH PROJECTS NEARING COMPLETION, THE FIRST ONE BEING THE MILL CREEK BASIN, WHICH CONSISTS OF CONSOLIDATING TWO LIFT STATIONS INTO A SINGLE SITE AND THE REPLACEMENT OF 20,000 LINEAR FEET OF SANITARY SEWER. THIS IS DUE TO THE EXPANSION OF INTERSTATE 35 AND WITH SOME CONFLICTING INFRASTRUCTURE WITH TXDOT. THIS PROJECT BEGAN IN JUNE OF 25 AND THE ESTIMATED TO COMPLETE BY THE END OF THIS YEAR. THE BUDGETARY INFORMATION IS IN THE BOTTOM RIGHT CARD FOR REFERENCE. THIS IMAGE SHOWS THE INSTALLATION OF THE 12 INCH FORCE MAIN, WHICH IS NOW COMPLETE. 85% OF THE GRAVITY MAIN IS COMPLETE. THE LIFT STATION STRUCTURE IS NEAR COMPLETION AND THEY ARE RECEIVING ELECTRICAL AND MECHANICAL COMPONENTS. GEARING UP FOR INSTALLATION. THIS IS AN AERIAL VIEW. TO THE RIGHT IS NORTH AND WHERE THE GREEN AND YELLOW LINES MEET. THAT IS THE LIFT STATION THAT IS UNDER CONSTRUCTION AT GANDER AND I-35. THE YELLOW LINE ON THE BOTTOM IS THE COMPLETED FORCE MAIN, AND THE GREEN LINE IS THE 85% COMPLETED GRAVITY LINES. QUESTION SIR. YES, SIR.

>> IF I MAY, ONE BACK SLIDE AND I APOLOGIZE, SIR. ONE MORE. SO WITH THE HISTORY THAT WE'VE HAD WITH TEXDOT AND 35 AND SUCH, IS THAT ESTIMATED COST STILL CORRECT, OR HAVE WE HAD TO DO A

LOT OF CHANGES BECAUSE OF I-35 OR TEX DOT'S THOUGHTS? >> THIS. THIS IS THE ESTIMATED CONSTRUCTION COST. THE MOST RECENT INFORMATION WE HAVE AND WOULD INCLUDE ANY CHANGES IN

THE PAST. >> I DON'T THINK THAT'S WHAT I ASKED, BUT. SO THE ESTIMATED COST IS THAT WITHIN THE RANGE THAT WE. WE'VE THOUGHT OF ORIGINALLY.

>> YES. >> OKAY. THAT'S. THANK YOU. >> IF I LOOK TO THE LEFT, I'M

GETTING ANSWERS BECAUSE SOME OF THESE ARE NOT MY PROJECTS. >> YEAH, THEY'RE BEHIND ME. I'M

JUST LOOKING AT YOU. >> ANY MORE QUESTIONS ON THEM? >> JUST. SORRY. I CAN'T LOOK AT A MAP WITHOUT TRYING TO INTERPRET IT. SO YELLOW FORCE MAIN IS BASICALLY PUMPING BACK

TO THE NORTH, WHERE THE GRAVITY FLOWS INTO SOME. >> BASICALLY IT WILL BE LIFTED AND THIS LIFT STATION WILL CONNECT TO THE FUTURE CLEAR CREEK INTERCEPTOR, WHICH YOU'LL

SEE LATER AND CONNECT TO THE NEW PLANT COMING. >> AND SO BASICALLY IT'LL

CONNECT RIGHT THERE KIND OF AT THAT LOOP, 288 ISH LOCATION AND. >> FURTHER NORTH, THAT'S GANZER

TO THE RIGHT SIDE. THERE WILL BE THE FORCE ME. >> THAT'S WHERE IT WILL BE AT

THE FAR RIGHT. >> THAT'S TO THE NORTH. >> OKAY, SO IT'S PUMPING BACK SOUTH TO 288 AND THAT'S WHERE OKAY, WHAT, WHAT IS THE YELLOW LINE AGAIN? SORRY, SEAN. THE

CAPITAL PROJECTS P M SO. >> THE YELLOW LINE IS THE FORCE. SO WHAT WE'RE DOING IS WE'RE ACTUALLY CHANGING THE DIRECTION. SO EVERYTHING CAME UNDER 35 ALONG 77 AND DOWN. SO WHAT WE'RE DOING IS WE'RE NOW TAKING UP THE GREEN LINE AND WE'RE GOING TO COME BACK DOWN THE FORCE MAIN. WE'RE PUMPING IT DOWN BACK INTO THE SYSTEM. SO BASICALLY JUST CREATING MORE CAPACITY IS WHAT WE'RE DOING HERE. AND THEN YES, EVENTUALLY THE CLEAR CREEK WILL TAKE FROM THE GANZER LIFT STATION. THAT'LL GO AWAY AND IT'LL ACTUALLY GO NORTH ALL THE WAY

AROUND TO THE EAST TO THE CLEAR CREEK. OKAY. >> SO EFFECTIVELY, I MEAN, SO THE YELLOW LINE IS EFFECTIVELY TEMPORARY. TEMPORARY MIGHT BE 5 OR 10 YEARS OR SOMETHING. YES.

[01:30:02]

BUT IN THE FUTURE, WHEN THAT CLEAR CREEK INTERCEPTOR IS COMPLETED, THE LIFT STATION WILL KIND OF GO AWAY. IT DOES. YEAH, IT WILL COMPLETELY GO AWAY AND IT'LL JUST GRAVITY

FEED. >> SO WE'RE GOING FROM LEFT TO RIGHT.

>> YES. >> THAT'S ALL I CARE. WE'RE JUST GOING LEFT TO RIGHT.

>> CORRECT. WE START RIGHT. WE TAKE IT UP AND WE COME BACK DOWN. AND THEN LATER WE WILL GO

EVERYTHING FROM FROM LEFT ALL THE WAY TO RIGHT. YES. >> ENGINEERS AT THEIR BEST.

>> WHAT CAN I SAY? >> I LOVE IT. THANK YOU. >> ANY MORE QUESTIONS ON. NEXT IS THE ROBSON RANCH WASTEWATER IMPROVEMENTS, WHICH CONSISTED OF REPLACING PUMPS, PIPING AND CONTROLS AT THE EAST LIFT STATION LOCATED ON ROBSON RANCH AND CONNECTING TO A GRAVITY LINE THAT RUNS ALONG ROBSON ROAD. WE ALSO DID A RECOATING ON THE EXISTING WET WELL TO PREVENT ANY LEAKS AND REPLACE THE UV DISINFECTION SYSTEM AT THE PLANT OUT ON ROBSON THAT STARTED IN Q3 OF 24, AND IT IS FINISHING UP THIS QUARTER. THIS IS AN IMAGE OF THE UV MODULES THAT WERE PULLED OUT THERE ON YOUR RIGHT. THE NEW ONES ARE INSTALLED THERE ON YOUR LEFT WITH THE LITTLE BLUE LABELS ON THEM. IT HAS BEEN SUBSTANTIALLY COMPLETED SINCE MAY OF THIS YEAR, AND WE'RE WORKING ON SCHEDULING A WALKTHROUGH FOR NEXT MONTH WITH THE CONTRACTOR,

SO WE CAN GET THIS CLOSED OUT. >> GREAT. >> THE HOBSON LIFT STATION ELECTRICAL IMPROVEMENTS. WE HAD AN ONGOING CORROSION ISSUE, SO WE CONSTRUCTED AN ELEVATED ELECTRICAL PAD, RELOCATED ALL ELECTRICAL EQUIPMENT UP ON TOP OF THE PAD, COVERED IT WITH A CANOPY TO PROTECT IT FROM SUN. AND THERE WAS AN OLD WET WELL OUT THERE THAT WE HAD DEMOLISHED AS PART OF THIS THAT NEEDED TO BE CLEANED UP. THIS BEGAN IN Q3 OF 24, AND IT IS ALSO FINISHING UP THIS QUARTER. HERE IS A IMAGE OF THE ELEVATED STRUCTURE WITH THE EQUIPMENT INSTALLED. AS OF LAST MONTH, DME HAD FINISHED INSTALLING THE TRANSFORMER CONNECTING THE ELECTRICITY, AND OUR CONTRACTORS FULLY COMMISSIONED ALL ELECTRICAL COMPONENTS. WE ARE SUBSTANTIALLY COMPLETE AND BEGINNING CLOSEOUT PROCEDURES, WHICH IS ADMINISTRATIVE DOCUMENTATION. AT THIS POINT, WE HAVE TWO PROJECTS CURRENTLY UNDER CONSTRUCTION. YOU CAN SEE THEM LOCATED ON THE MAP THERE ON YOUR RIGHT, THE FIRST BEING A CONCRETE WATER RECLAMATION PLANT. IT WILL BE A BRAND NEW FACILITY THAT WILL CONSIST OF A 69 MILLION GALLON PER DAY HEADWORKS, ALONG WITH 30 MILLION GALLON PER DAY TREATMENT CAPACITY. IT WILL BE OUR FIRST SHOT AT MEMBRANE BIOREACTOR FILTRATION, WHICH IS MICRO PORES THAT THE WATER IS FORCED THROUGH ABOUT A THOUSAND TIMES SMALLER THAN A HUMAN HAIR. IT BLOCKS ALL SUSPENDED SOLIDS, BACTERIA, MOST VIRUSES, ANYTHING THAT DOES GET THROUGH WILL BE TREATED WITH ULTRAVIOLET DISINFECTION. AND THE NEXT STEP, WHAT THIS GIVES US IS NEAR DRINKING WATER QUALITY EFFLUENT WATER LEAVING THE PLANT. IT GIVES THE CITY NEAR MAXIMUM ENVIRONMENTAL PROTECTION ON HALF THE FOOTPRINT OF THE CURRENT STANDARD PLANT, LEAVING US ROOM FOR EXPANSION WITHOUT HAVING TO PURCHASE REAL ESTATE IN THE FUTURE. THIS PROJECT BEGAN BACK IN MARCH OF 2024 AND IS ESTIMATED TO COMPLETE BY THE END OF 2031.

>> QUESTION. YES, SIR. I'M INTRIGUED WITH MAYBE MORE REAL ESTATE, IF POSSIBLE. WHAT SIZE

TRACK IS THAT ON? >> WE ARE CURRENTLY USING 40 ACRES FOR THE CURRENT TREATMENT PLANT JUST SOUTH OF IT. WE ARE FILLING IN SOME DRYING BEDS AND BUILDING ON THAT. IT'S ABOUT 18 ACRES. IT WILL HAVE. THE CURRENT PLAN IS 21 MGD. THIS WILL BE 30, SO A LITTLE LESS THAN HALF THE FOOTPRINT. WE WILL HAVE THE EXISTING 40 ACRES LATER TO BUILD ON FOR EXPANSION.

>> SO 40 ACRES AVAILABLE. BUT YOU'RE ACTUALLY WORKING ON 18 NOW. YES, SIR. OKAY.

>> THANK YOU. THAT 18 IS SEPARATE FROM THE 40. THE CURRENT PLANT IS NOT AVAILABLE.

IT'S ON THE 40. WE HAD 18 AVAILABLE SOUTH OF IT, WHICH THIS FITS ON.

>> IS IT ADJACENT TO. >> IT'S RIGHT NEXT JUST SOUTH OF IT. 50 YARDS. YES SIR.

>> OKAY. WHO'S IN BETWEEN THE 50 YARDS. >> A BERM. THANK YOU. YES, SIR.

>> AND THIS IS ALL OUT NEAR THE LANDFILL. >> THIS IS ON THE SAME AREA AS THE LANDFILL? YES, SIR. HERE'S AN IMAGE SHOWING THE CURRENT EXCAVATION. THIS IMAGE IS A FEW WEEKS OLD AS PART OF THE FIRST PACKAGE, WHICH IS CALLED GUARANTEED MAXIMUM PRICE ONE OR GMP ONE. IT INCLUDES ALL THE EXCAVATION OF THE HEADWORKS, THE BNR BASINS AND YARD PIPING.

INSTALLATION. GMP TWO IS CURRENTLY IN BID SELECTION AND WILL COME THROUGH PUB AND COUNCIL SOMETIME IN SEPTEMBER. NEXT WILL BE GMP THREE, WHICH WILL BE WHICH WILL BE ADVERTISING THROUGH AUGUST, COMING TO PUB AND COUNCIL IN NOVEMBER TIME FRAME. ANY QUESTIONS ON THE CONCRETE? NEXT WE HAVE THE NORTH MARSH BRANCH SANITARY SEWER. THIS WAS A

[01:35:01]

YOU'LL NOTICE ON THE BUDGET INFORMATION IS A LITTLE DIFFERENT. THE. THE DESIGN WAS PAID FOR BY PRIVATE DEVELOPMENT RATHER THAN THE CITY ON THIS ONE. THIS IS A PICTURE OF THEM INSTALLING THE 21 INCH SANITARY SEWER LINE AND ASSOCIATED FIBERGLASS AND PRECAST MANHOLES.

NEXT, WE MOVE INTO PROJECTS THAT ARE IN DESIGN, THOSE BEING THE HICKORY CREEK INTERCEPTOR, WHICH WILL BE THE INSTALLATION OF 9000FT OF NEW SANITARY SEWER WITH ASSOCIATED MANHOLES. THERE WILL BE SOME CONCRETE REMOVED AND REPLACED AS PART OF THIS PROJECT. IT BEGAN IN Q1 OF 2026 AND ESTIMATED TO COMPLETE BY THE END OF THIS YEAR. THE DESIGN CONSTRUCTION WILL BE LATER IN 2027. THEY'RE CURRENTLY ABOUT 30% DESIGN, FINISHING THAT UP NEXT MONTH, AND THEY'RE IN PRELIMINARY DISCUSSIONS WITH THE AFFECTED LANDOWNERS FOR EASEMENT ACQUISITIONS. NEXT IS THE CLEAR CREEK INTERCEPTOR, WHICH COMES OFF OF THAT MOWLEM LIFT STATION WE SPOKE OF. IT'S IT WILL RUN SEVEN AND A HALF MILES TO THE EAST AND CONVEY ACROSS MULTIPLE SIZES OF PIPE FROM 30 UP TO 54 INCH. IT WILL ALSO PROVIDE A CONNECTION FOR THE FUTURE CRAVER RANCH, LOCATED NORTH OF TOWN, UP BY THE LAKE, AND OTHER CONNECTIONS THAT WILL ALLOW US TO GO FROM GRAVITY AND REMOVE SOME OF OUR LIFT STATIONS, WHICH IS ALWAYS A GOOD THING.

THIS IS EXPECTED TO BEGIN IN Q1 OF 27 AND FINISHED BY THE END OF 2028.

>> AND SO THAT THIS SLIDE, PROBABLY THE MAP IS THE BEST VIEW. THIS IS THIS IS SIZED, YOU SAID 30 TO 54IN. THIS IS SIZED FOR BASICALLY THE ENTIRE BASIN TO BE FULLY BUILT OUT

WITH RESIDENTIAL AND SO FORTH. >> AND CAPACITY FOR FUTURE BUILD OUT.

>> NOT JUST WHAT'S NOT JUST WHAT'S IN IN PERMITTING OR PLANNING RIGHT NOW, BUT LIKE

THE ENTIRE. CORRECT TENS OF THOUSANDS OF ACRES UP THERE. >> IT'S BASED ON THE PREVIOUS MASTER PLAN, MOST RECENT MASTER PLAN. THIS IMAGE SHOWS AN AERIAL ON THE FAR LEFT. IT IS WEST. IT'S ACTUALLY ORIENTED CORRECTLY ON THIS ONE THAT IS GANZER ROAD AND I-35, WHERE THE LIFT STATION IS CURRENTLY BEING CONSOLIDATED. AND TO THE RIGHT WILL BE THE AREA WHERE THE NEW CLEAR CREEK WATER RECLAMATION PLANT IS TO BE BUILT ON THE PROPERTY JUST NORTH OF HARTLEY FIELD ROAD. THAT CLEAR CREEK WATER PLANT WILL BE A 20 MILLION GALLON WATER RECLAMATION PLANT. IT WILL ALSO UTILIZE THE MBR TECHNOLOGY FILTRATION THAT I DISCUSSED EARLIER. IT WILL CLOSELY MIMIC THE PLANT WE'RE BUILDING AT PYCON CREEK. THIS GIVES US THE BENEFIT OF STAFF TRAINING. THEY WILL BE ABLE TO OPERATE EITHER PLANT, MOVE BACK AND FORTH BETWEEN THE TWO. IT WILL HELP SAVE US MONEY ON SPARE PARTS LISTS. WE WON'T HAVE TO CARRY SO MANY AND POTENTIALLY SOME SAVINGS ON BULK BUYING OF THE FILTRATION SYSTEMS AS NEEDED.

IT WILL ALSO COME WITH ODOR CONTROL BEING DESIGNED INTO IT DUE TO ITS PROXIMITY TO A FEW NEIGHBORS AROUND. WE WANT TO CONTROL THAT AND THE ASSOCIATED BUILDINGS WILL CONTROL THE CONTROL OF THE BUILDING, UV SYSTEM, ETC. IT BEGAN IN JUNE OF 2026, SO JUST LAST MONTH, AND IT IS EXPECTED TO COMPLETE BY THE END OF 2031. HERE'S A RENDERING OF THE LAYOUT CONCEPTUAL LAYOUT BY THE ENGINEERS. AS MENTIONED, IT WAS DESIGN WAS AWARDED IN 2026. WE ARE CURRENTLY IN SELECTION FOR THE CONSTRUCTION MANAGER AT RISK. THAT SHOULD GO TO COUNCIL IN OCTOBER, AND WE ARE ESTIMATED TO BE TO BEGIN CONSTRUCTION BY THE END OF 2027.

ONE THING TO NOTE IS YOU WILL SEE SOME TRAILS JUST TO THE EAST ON THIS PICTURE. THAT IS THE MOUNTAIN BIKE TRAIL PROPERTY. WE HAVE ADDED TO OUR SCOPE FROM OUR ENGINEER TO ENSURE THAT THOSE TRAILS ARE PROTECTED, REDESIGNED, AND THAT THE TRAIL WILL BE BETTER AND LONGER THAN IT IS AFTER WE LEAVE OUT OF THERE. THEY HAVE BUDGETED TIME FOR PUBLIC MEETINGS AND TO WORK WITH PARKS AND RECREATION ON THAT TRAIL. YES, SIR.

>> JUST A QUICK QUESTION. SINCE WE'RE NOT STARTING CONSTRUCTION UNTIL THE END OF NEXT YEAR,

WHAT IS THE PROJECTED TIME FRAME FOR COMPLETION? >> THE PROJECTED TIME FOR COMPLETION IS Q4 2031, ABOUT THE SAME TIME THAT PECAN CREEK COMPLETES. THIS ONE SHOULD BE

COMPLETE. THANK YOU. YES, SIR. >> AND SO TO THAT, DOES THIS CONCEPT SHOW A ROAD TO THE

NORTH, OR IS THAT LIKE A PIPELINE HAD HAD. >> THAT'S THE OUTFLOW INTO THE CREEK OF THE EFFLUENT WATER. THE THE ROAD WOULD COME FROM THE SOUTH OFF OF HARTLEY ROAD

UP NORTH. >> SO THAT'S KIND OF ON THE ON THE LEFT SIDE OF THE.

>> YES, THAT GRAY LINE THAT'S HEADED TO THE BOTTOM OF THE SCREEN THAT THAT WILL BE THE

THE ROAD COMING IN OFF OUR FIELD. >> OKAY.

[01:40:02]

>> THANK YOU. NEXT, OUR DEPARTMENT HAS STARTED A MULTI YEAR REHAB OF SOME LIFT STATIONS, A CONDITION ASSESSMENT THAT WAS FINISHED UP IN 2024, IDENTIFIED THOSE MOST IN NEED OF REHAB. WE CHOSE THE WORST FIVE OF THOSE BEING THIS ROUND TO START THE REHAB ON THAT BEGAN IN DECEMBER OF 2025. WE ARE ESTIMATED TO COMPLETE THAT BY THE END OF 27 WITH CONSTRUCTION. HERE ARE THE FIVE LIFT STATIONS SOUTH FORK, SUNDOWN RANCH, BEN OAKS VACATION VILLAGE AND COOPER CREEK. AGAIN, THIS ASSESSMENT WAS COMPLETED IN 2024 BY KIMLEY-HORN. IT WAS A SYSTEM WIDE ASSESSMENT TO IDENTIFY OUR MOST CRITICAL STATIONS IN NEED.

LOCKWOOD, ANDREWS AND NEWMAN IS CURRENTLY EVALUATING THOSE TO SEE WHAT EXACTLY NEEDS TO BE DONE TO THEM. THEY ARE THE ENGINEER RECORD FOR THIS REHAB. IN THE FUTURE, WE'LL DO

ADDITIONAL LIFT STATIONS AS BUDGET ALLOWS. >> QUESTION. YES, SIR. AND I APPRECIATE THE FIVE YOU MENTIONED. WHAT IS THE TOTAL NUMBER THAT WE HAD? WHAT WAS

THE POOL THAT THAT FIVE CAME OUT OF. >> 30 I BELIEVE IT'S 33 LIFT

STATIONS THROUGHOUT THE CITY. >> THAT NEED ATTENTION. >> THEY ARE RANKED FROM WORST TO BEST. NOT ALL OF THEM NEED ATTENTION. SOME OF THEM ARE NEWER LIFT STATIONS.

>> SO THESE FIVE ARE THE WORST. >> THESE ARE THE WORST. YES, SIR.

>> OKAY. THANK YOU. >> NEXT WE HAVE THE ROBESON WEST LIFT STATION, WHICH WILL BE A 13 MILLION GALLON PER DAY LIFT STATION AND ASSOCIATED FORCE AND GRAVITY MAINS. THIS INFRASTRUCTURE WILL CONVERT THE EXISTING ROBINSON RANCH TREATMENT PLANT INTO A LIFT STATION, AND IT WILL GO AWAY. IT WILL ALSO CONNECT TO THE ROURKE BRANCH INTERCEPTOR JUST TO THE EAST, AND CONVEY DOWNSTREAM INTO TOWN. IT BEGAN IN DECEMBER OF 25, AND IT IS EXPECTED TO COMPLETE QUARTER FOUR OF 2028. THIS IS THE IMAGE OF THE CURRENT SEQUENCING SEQUENCING BATCH PLANT, THE TREATMENT PLANT AT ROBSON RANCH THAT WILL GO AWAY. WE'RE CURRENTLY IN DESIGN. THE CONSULTANT IS EVALUATING THE ALIGNMENT OF THAT FORCE, MAIN AND GRAVITY TO TRANSFER EAST ACROSS ROBSON RANCH, AND THEY ARE COORDINATING WITH THEM ON

EASEMENT ACQUISITIONS. >> IF I MAY ASK. YES, SIR. WHEN YOU SAY GO AWAY, I'M LOOKING AT ESTHETICS AND SUCH. SO DOES THAT JUST RAISED BECAUSE WE'VE GOT THE LIFT STATIONS MUCH

SMALLER. IS THAT HOW THAT THE FOOTPRINT ITSELF. >> YES, SIR. PART OF THIS PROJECT, IT WILL BE DECOMMISSIONED AND TURNED OFFLINE. I NEXT PROJECT, ONCE THE BUDGET IS ALIGNED FOR THAT IT WILL BE DECOMMISSIONED AND DEMOLISHED. YES, SIR.

>> THANK YOU. >> SO 13 MGD IS A PRETTY BIG LIFT STATION. I GUESS RIGHT NOW THIS BATCH PLANT DOES NOT HAVE THE CAPACITY TO TREAT 13 MGD. YES SIR. AND SO CURRENTLY DO

YOU KNOW ABOUT HOW BIG THIS ONE IS? >> I BELIEVE IT'S JUST AROUND ONE MGD. I THINK IT CAN PEAK AT THREE MGD. THE 13 MGD IS TO TAKE FLOWS FROM NEWER MUDS COMING IN AND TEX MIX AND THINGS LIKE THAT WILL ALSO GET RID OF THE EAST LIFT STATION AND CONVEY IT HERE AND THEN LIFT IT AND PUSH IT BACK ACROSS. SO THAT'S ANOTHER LIFT STATION THAT WE GET TO GET RID OF, WHICH IS BENEFICIAL TO THE SYSTEM.

>> SO WE'RE GOING TO REMOVE THIS PLANT THAT IS KIND OF AT CAPACITY AND WON'T SUPPORT FUTURE GROWTH. YES, SIR. AND THEN WE'LL REMOVE ANOTHER LIFT STATION AND INSTALL A SINGLE KIND OF CENTRAL LARGER LIFT STATION. AND RIGHT NOW, DOES THIS PLANT DISCHARGE JUST INTO A CREEK, OR DOES IT GO TO A PIPELINE AND GET CONVEYED SOMEWHERE?

>> IT DISCHARGES TO THE CREEK RIGHT NEXT TO THE PLANT, JUST ON THE I BELIEVE IT'S THE WEST

SIDE OF THE PLANT. >> OKAY. AND SO BY WHAT KIND OF CONSOLIDATE ALL OF OUR DISCHARGES? LIKE WE'LL REMOVE THIS LITTLE BATCH DISCHARGE OVER HERE, AND ALL THIS WATER WILL GO DOWN TO PECAN CREEK AND BE TREATED THERE. SO THE DISCHARGE WILL BE ONE MORE.

>> IT'LL TRANSFER ACROSS THE HICKORY CREEK BASIN TO PECAN CREEK EVENTUALLY.

>> HOW MANY OF THESE LITTLE BATCH FACILITIES TREATMENT FACILITIES DO WE HAVE IN THE

CITY? >> ONE. THIS IS IT. THIS IS IT. YES, SIR.

>> AND I KNOW THERE'S TALK OF ANOTHER TEMPORARY ONE FOR A FUTURE DEVELOPMENT ON THE NORTH SIDE OF TOWN UNTIL THE CONCRETE COMES IN PLACE. BUT IN GENERAL, I GUESS WE WE WOULD PREFER NOT

TO HAVE A BUNCH OF THESE LITTLE PLANTS ALL OVER TOWN. >> YEAH. SO WHAT YOU'RE REFERRING TO IS THIS CLEAR CREEK PROJECT. WE'RE TRYING TO BUILD A LIFT STATION IN THE FIRST PHASE FOR CRAVER RANCH. IF THAT'S NOT POSSIBLE, THERE MAY BE A MODULAR PORTABLE PLANT IN PLACE TEMPORARILY, BUT NOT ACTUALLY A STRUCTURE IN GROUND. WE'RE LOOKING AT OPTIONS FOR

PORTABLE BATCH PLANTS. >> OKAY, SO I DIDN'T REALIZE. I THINK WHENEVER WE HEARD IT, I THOUGHT IT WAS THEY WERE GOING TO PUT IN THE LITTLE PORTABLE PLANT. BUT THERE'S AN

OPPORTUNITY. MAYBE THEY'LL JUST BE A LIFT STATION THERE. >> YES, THE LIFT STATION WILL

BE FIRST PHASE AND IT WILL CONVEY IT DOWNSTREAM. OKAY. >> SO WHAT YOU'RE REFERENCING IS FOR SUNDOWN RANCH FOR THE TEMPORARY PORTABLE PLANT. JUST DUE TO THE TIMELINE, THIS CLEAR

[01:45:06]

AN OPTION, BUT IT MAY NOT COME TO FRUITION. >> OKAY. THANK YOU.

>> OKAY. >> THANK YOU. THANK YOU. >> SO I'LL MOVE ON TO JUST A BRIEF OVERVIEW OF THE FIVE YEAR CAPITAL IMPROVEMENTS THAT WE'LL BE ADDING TO THIS LIST. SO HERE ARE THE MAJOR PROJECTS WE'RE ADDING OVER THE NEXT FIVE YEARS THROUGH THE CAPITAL IMPROVEMENT PROGRAM. WE HAVE A SIMPLE CHART WITH THE OVERALL ESTIMATE OF COMPLETION FOR THE PROJECT, FOLLOWED BY A REPRESENTATION OF THE SCHEDULE OF THE YEARS THAT WE PLAN THESE TO BE CONSTRUCTED IN. SO SIX OF THESE PROJECTS WERE IDENTIFIED THROUGH THE WASTEWATER MASTER PLAN. THOSE HAVE THE W, WMP ABBREVIATION IN FRONT, FOLLOWED BY THE PROJECT NUMBER THAT CORRESPONDS TO THE PROJECT IDENTIFIED AND THE MASTER PLAN, AND THEN THE PROJECT NAME. AND TWO OF THESE PROJECTS WERE IDENTIFIED BY OUR ASSET MANAGEMENT EFFORTS AND WERE BEING ADDED. ADDED AS WELL.

THAT INCLUDES THE COLLECTIONS LINING AND THE HOBSON LIFT STATION FORCEMAIN REPLACEMENT.

SO THIS TOTALS TO ROUGHLY $84.8 MILLION OF ADDITIONAL WORK ADDED OVER THE NEXT FIVE YEARS.

THAT ISN'T HASN'T BEEN INITIATED INTO DESIGN. SO FOR SUMMARY, WE HAVE $21.5 MILLION OF INFRASTRUCTURE NEAR COMPLETION THAT'S ESTIMATED TO BE COMPLETED THIS YEAR. $553.2 MILLION OF PROJECTS THAT ARE IN ACTIVE CONSTRUCTION. AGAIN, THE MAJORITY OF THAT IS WITH THE PECAN CREEK PLANT, $658 MILLION OF PROJECTS THAT ARE IN DESIGN. AND AGAIN, THIS IS ANCHORED BY THE CLEAR CREEK PLANT AND THE CLEAR CREEK INTERCEPTOR, AND $84.8 MILLION OF PROJECTS TO BE ADDED OVER THE NEXT FIVE YEARS. THIS TOTALS ROUGHLY $1.3 BILLION OF INFRASTRUCTURE WORK

FOR THE WASTEWATER SYSTEM. ANY QUESTIONS? >> I JUST HAVE A COMMENT. THIS IS REALLY AWESOME PRESENTATION, VERY DETAILED, LOTS OF INFORMATION, AND WE ARE SPENDING OVER $1 BILLION. SO I THINK IT'S USEFUL FOR US TO HAVE A BETTER OVERALL PICTURE

OF THE WORK THAT'S IN PROGRESS. SO THANK YOU. >> THANK YOU.

>> YEAH. I'LL ECHO THE, THE, THE WAY THE PROJECTS ARE LAID OUT, KIND OF WITH THE PROJECT CARD AND THEN BACK UP. IT MADE IT VERY READABLE AND VERY MUCH EASIER TO UNDERSTAND THAN THERE ARE A LOT OF PROJECTS ALL OVER TOWN. LITTLE BIG REHAB, NEW CONSTRUCTION. SO BEING ABLE TO

SEE IT LIKE THAT REALLY HELPS. >> WILL MAINTAIN THIS FORMAT. THEN FOR OUR NEXT QUARTERLY

UPDATE, WHICH WILL GO BACK TO THE WATER PROJECTS. >> ALL RIGHT. THANK YOU, THANK

YOU. >> I THINK THAT'S ALL WE HAVE TODAY. AND WE

* This transcript was compiled from uncorrected Closed Captioning.