* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.
          [00:00:21]
          SO NOW I'LL CALL THIS, UH, MEETING OF THE BAYTOWN CITY COUNCIL WORK SESSION ORDER. 
          IT'S THURSDAY, MAY 13. 
          IT IS 5 0 3. 
          WE ARE IN BAYTOWN CITY ALL COUNCIL CHAMBERS. 
          WE DO HAVE A QUORUM. 
          OUR FIRST ITEM 
          [a.  Discuss the City of Baytown Utility Rate Study and Impact Fee Study.]
IS, UH, ITEM ONE A, DISCUSS THE CITY OF BAYTOWN UTILITY RATE STUDY AND IMPACT FEE STUDY, MR. WOODERY. 
          ALRIGHT, GOOD EVENING, MAYOR AND COUNCIL. 
          UH, SO THIS IS A COUPLE MONTHS IN THE COMING IN THE, IN THE MAKING. 
          AND, UH, A LOT OF WORK HAS GONE ON BEHIND THE SCENES. 
          UM, AS YOU KNOW, WE HIRED, UH, COLO TO DO NOT ONLY OUR WATER AND SEWER RATE STUDY, BUT ALSO IMPACT FEE STUDY. 
          IT'S THE FIRST TIME THE CITY HAS DONE BOTH OF THOSE STUDIES AT THE SAME TIME, AND IT'S REALLY CRITICAL THAT WE'VE DONE IT THAT WAY. 
          AND YOU'LL, YOU'LL KIND OF HEAR WHY AS THEY GO THROUGH THE PRESENTATION. 
          UM, COROLLA IS, IS A NATIONAL LEADER IN, IN WATER AND WASTEWATER. 
          SO WE'RE, WE'RE VERY THANKFUL THAT THEY'VE DONE THIS FOR US. 
          THEY'VE DONE A GREAT JOB. 
          UM, AND OUR STAFF THAT'S HERE TONIGHT FROM FINANCE, PUBLIC WORKS AND ENGINEERING UTILITY BILLING HAS PUT IN A LOT OF TIME TO GET THIS WHERE IT'S AT. 
          AND WE STILL HAVE A LITTLE BIT MORE WORK TO DO AFTER TONIGHT, BUT, UM, THEIR WORK HAS, HAS HELPED MAKE THIS A REALLY SUCCESSFUL STUDY. 
          UM, JUST KIND OF A, A LEAD IN FOR YOU. 
          THE LAST TIME THE CITY DID A, A FULL WATER AND SEWER RATE STUDY WAS BACK IN 2010. 
          THE LAST IMPACT FEE STUDY WAS IN 2017. 
          SO WE DO HAVE TO UPDATE THAT EVERY FIVE YEARS, THE IMPACT FEE STUDY. 
          UM, BUT IT'S BEEN A WHILE ON THE WATER AND SEWER RATE STUDY. 
          SO, UM, THE TIMING IS, IS REALLY CRITICAL FOR A LOT OF REASONS. 
          JUST SO YOU KNOW, THE, THE PRESENTATION IS, UH, IT'S GOT A LOT AND THAT'S WHY WE, WE PROGRAMMED SOME EXTRA TIME TONIGHT. 
          AND JUST TO KIND OF GIVE YOU A LITTLE BIT OF A BOTTOM LINE UP UPFRONT, UM, BECAUSE I'M SURE YOU'RE GONNA BE KIND WAITING FOR IT, YOU WILL NOT SEE LIKE, PROPOSED RATES TONIGHT. 
          AND THAT'S DONE FOR A COUPLE REALLY CRITICAL REASONS. 
          ONE, WE'RE GONNA TALK BE TALKING ABOUT IMPACT FEES. 
          SO DEPENDING ON WHERE COUNCIL KIND OF WANTS TO GO ON IMPACT FEES, IF THOSE ARE LOWERED, FOR INSTANCE, THAT MIGHT, THAT WOULD CORRELATE IN HIGHER RATES TO OUR RATE PAYERS. 
          SO WE NEED SOME FEEDBACK ON THAT. 
          AND THERE'S ALSO A LOT OF OTHER WORK KIND OF GOING ON BEHIND THE SCENES WITH WHO WE CHARGE THE REVENUE INCREASES TOO. 
          AND YOU'LL, YOU'LL SEE THAT THROUGHOUT THE PRESENTATION. 
          UM, THERE'S SOME PROPOSED PROJECTS KIND OF IN THE WORKS THAT WE NEED TO FACTOR IN. 
          SO THAT'S WHY YOU'RE NOT GONNA SEE ACTUAL RATES PROPOSED TONIGHT. 
          WE WANTED TO PRESENT THE BACKGROUND INFO, INFO TO YOU, GET YOUR FEEDBACK, AND THEN WE WILL COME BACK, UM, PROBABLY SOMETIME OVER THE NEXT MONTH WITH AN ACTUAL PROPOSED RATE STRUCTURE. 
          UM, BECAUSE IN THIS CASE WE'RE NOT JUST SAYING WE NEED TO INCREASE RATES BY A CERTAIN PERCENT, WE'RE ACTUALLY CHANGING THE, THE TOTAL STRUCTURE. 
          SO SINGLE FAMILY, MULTIFAMILY, NON-RESIDENTIAL, THAT WHOLE MODEL WOULD WOULD CHANGE, UM, THIS NEXT FISCAL YEAR. 
          SO WITH THAT INTRO, UM, I'M GONNA, UH, BRING UP CODY BERG WITH COROLLA. 
          UM, ALSO WITH HIM TONIGHT IS MIRA VICTOR AND JENNIFER IVY AND THEY'RE GONNA KIND OF SPLIT SOME OF THE PRESENTATION. 
          SO WITH THAT, I WILL WELCOME UP CODY, THANKS SO MUCH. 
          PLEASURE TO BE HERE TODAY. 
          UH, I'M GONNA LET JENNIFER TALK, UH, ABOUT THE IMPACT FEES AND WE'LL KIND OF, UH, MOVE ON FROM THERE AND WE'LL MOVE ON TO RATES. 
          UH, SO FOR RIGHT NOW, I'LL LET HER TALK ABOUT THAT SPECIFICS, THEN I'LL TALK WITH YOU HERE IN A MINUTE. 
          ALRIGHT, SO, UM, AS CODY SAID, WE'RE GONNA KICK THIS OFF WITH THE IMPACT FEE DISCUSSION. 
          UM, BEFORE WE GET INTO THE ACTUAL DETAILS OF THE IMPACT FEE CALCULATION, UH, WE'RE GOING TO TALK A LITTLE BIT ABOUT THE DIFFERENT REVENUE SOURCES THAT THE UTILITY HAS AND, AND WHY IT'S SO IMPORTANT TO CONSIDER THE IMPACT FEE REVENUE AT THE SAME TIME AS THE THE RATE STUDY. 
          OKAY, SO THE TWO PRIMARY SOURCES OF REVENUE FOR THE UTILITY ARE THE IMPACT FEES, UM, WHICH ARE ONE-TIME CHARGES. 
          UM, THESE ARE CHARGES THAT ARE ASSESSED WHEN A NEW CUSTOMER, UM, CONNECTS TO THE SYSTEM. 
          THEY'RE OFTEN PAID BY DEVELOPERS. 
          SO THIS IS NOT A CHARGE THAT RATE PAYERS ARE PAYING ON A MONTHLY BASIS OR EVEN ON AN ANNUAL BASIS. 
          THIS IS JUST 
          [00:05:01]
PAID ONE TIME AND THEN THAT'S IT FOR THAT PARCEL. 
          OKAY? ON THE OTHER HAND, THE UTILITY BILLS, THE WATER AND SEWER PORTION ON THE MONTHLY UTILITY BILLS. 
          THAT IS SOMETHING THAT THE RATE PAYERS ARE GONNA PAY, UH, EVERY MONTH, UM, BASED ON THE AMOUNT OF WATER THAT THEY'RE USING AND THE AMOUNT OF WASTEWATER THAT THEY'RE CONTRIBUTING TO THE SYSTEM. 
          AND SO THE, THE WAY THAT THESE TWO PLAY OFF OF ONE ANOTHER, WE HAVE TO DETERMINE WHAT IS THE ESTIMATED REVENUE THAT WE WILL GET FROM IMPACT FEES, AND THEN THAT GETS SUBTRACTED FROM THE TOTAL REVENUE THAT WE NEED TO BRING IN IN ORDER TO FUND ALL OF THE UTILITIES, UM, OPERATING AND MAINTENANCE EXPENSES AND CAPITAL EXPENSES. 
          AND WHAT'S LEFT HAS TO BE RECOVERED THROUGH THE WATER AND SEWER RATES. 
          SO THE IMPACT FEES, UH, WHAT WE RECOMMEND FOR THE IMPACT FEES AND WHAT GETS ADOPTED FEEDS INTO OUR ESTIMATED REVENUE FROM THOSE, WHICH THEN FEEDS INTO THAT RATE STUDY. 
          SO THAT'S WHY IT'S CRITICAL, CRITICAL TO CONSIDER THEM TOGETHER. 
          UM, SO AS I SAID, THE THE UTILITY BILLS IS BASED ON MONTHLY USAGE. 
          IT'S PAID BY EXISTING CUSTOMERS AND IT'S FUNDING THE O AND M, THE OPERATING AND MAINTENANCE EXPENSES OF THE UTILITY. 
          IT'S ALSO FUNDING THINGS LIKE, UM, REPLACEMENTS OR REPAIR AND, AND REHABILITATIONS OF THE EXISTING INFRASTRUCTURE WHILE THE IMPACT FEES ARE GONNA PAY FOR NEW INFRASTRUCTURE OR THE PORTION OF THE EXISTING INFRASTRUCTURE THAT'S AVAILABLE FOR NEW CUSTOMERS TO USE. 
          OKAY. 
          SO THOSE ARE SOME, UM, IMPORTANT DISTINCTIONS TO MAKE AS WE GO THROUGH THIS PRESENTATION. 
          SO I'M GONNA START US OFF, LIKE I SAID, TALKING ABOUT IMPACT FEES. 
          THE IMPACT FEES, UH, ARE IN THE STATE OF TEXAS. 
          UH, THE, THEY'RE GOVERNED BY THE TEXAS LOCAL GOVERNMENT CODE CHAPTER 3 95. 
          OKAY. 
          SO THIS LEGISLATION TELLS US, UM, THAT EVERY FIVE YEARS YOU HAVE TO LOOK AT YOUR LAND USE ASSUMPTIONS AND UPDATE THAT PLAN. 
          AND THE LAND USE ASSUMPTIONS IS WHERE WE LOOK AT PROJECTED GROWTH AND WE ESTIMATE HOW MANY NEW CONNECTIONS OR NEW SERVICE UNITS DO WE EXPECT TO COME ONLINE IN THE NEXT 10 YEARS. 
          SO EVEN THOUGH WE DO HAVE TO LOOK AT THIS EVERY FIVE YEARS, THE THE LAW SAYS THAT YOU HAVE A 10 YEAR WINDOW. 
          SO IT'S SORT OF LIKE A ROLLING 10 YEAR WINDOW EVERY FIVE YEARS. 
          WE UPDATE IT FOR THE NEXT 10 YEARS. 
          OKAY? SO THE LAND USE ASSUMPTIONS WE TOOK A LOOK AT, AT THE GROWTH PROJECTIONS FOR THE CITY, WE DETERMINE THAT ON THE WATER SIDE WE EXPECT TO ADD 7,619 SERVICE UNITS. 
          AND A SERVICE UNIT IS DEFINED AS IT'S ONE EQUIVALENT DWELLING UNIT, WHICH MEANS IT'S THE DEMAND THAT WE EXPECT ONE SINGLE FAMILY RESIDENTIAL HOME TO PUT ON THE SYSTEM. 
          SO IF YOU HAVE A NON-RESIDENTIAL CUSTOMER THAT'S GONNA CONNECT, THAT'S A LARGER, UH, CUSTOMER, WE'RE GONNA TRY TO ESTIMATE, WELL, HOW MANY, WHAT'S THE EQUIVALENT IN SINGLE FAMILY HOMES? SO THAT'S HOW WE ASSESS THESE FEES. 
          ON THE WASTEWATER SIDE, WE EXPECT TO ADD 7,597 SERVICE UNITS IN THAT 10 YEAR PERIOD. 
          SO THAT'S THE FIRST PIECE. 
          THE SECOND PIECE OF THE CALCULATION, UM, THAT THE LEGISLATION REQUIRES IS CALLED THE CAPITAL IMPROVEMENTS PLAN, WHICH CAN BE CONFUSING BECAUSE YOU ALREADY HAVE A CAPITAL IMPROVEMENTS PLAN THAT SAYS WHAT THE UTILITY NEEDS TO BUILD IN THE NEXT SEVERAL YEARS. 
          SO THIS IS SEPARATE FROM THAT IN THAT, UM, THIS CAPITAL IMPROVEMENTS PLAN, WE HAVE TO, IT'S A SUBSET OF YOUR OTHER CAPITAL IMPROVEMENTS PLAN, OKAY? WE'RE TRYING TO FIND OUT WHAT OF THAT LARGER CIP IS FOR CAPACITY THAT WILL SERVE THESE NEW CUSTOMERS THAT WE EXPECT TO COME ONLINE. 
          SO YOU CAN'T JUST TAKE THE TOTAL AMOUNT OF THE CIP THAT YOU'VE ALREADY SEEN FROM THE UTILITY AND PUT THAT INTO THIS CALCULATION. 
          WE HAVE TO LOOK AT EACH PROJECT AND SAY, WELL, WHAT PORTION OF THIS PROJECT IS GOING TO SERVE THESE CUSTOMERS WHO ARE COMING ONLINE IN THIS 10 YEAR PERIOD? OKAY? SO THAT'S AN IMPORTANT DISTINCTION. 
          THE CAPITAL IMPROVEMENTS PLAN FOR THE PURPOSE OF IMPACT FEES CAN ALSO LOOK AT INFRASTRUCTURE THAT YOU'VE ALREADY BUILT. 
          IF IT HAS CAPACITY THAT'S AVAILABLE THAT'S UNUSED RIGHT NOW AND THEREFORE IS AVAILABLE TO SERVE NEW CUSTOMERS THAT ARE GONNA COME ONLINE. 
          SO THE LEGISLATION RECOGNIZES THAT THESE NEW CUSTOMERS, YOU DON'T BUILD EVERY UNIT THAT THEY NEED JUST BEFORE THEY COME ONLINE. 
          YOU, 
          [00:10:01]
YOU BUILD LARGE, UM, FACILITIES WAY AHEAD OF TIME, AND THEN THE NEW CUSTOMERS GRADUALLY COME ONLINE AND START USING THAT. 
          SO YOU ARE ALLOWED TO LOOK BACKWARDS, BUT ONLY TO PUT IN THE COST OF THAT EXISTING INFRASTRUCTURE THAT'S GOING TO SERVE THE NEW CUSTOMERS. 
          YOU CAN'T INCLUDE ANY OF THE COSTS FOR THE EXISTING INFRASTRUCTURE THAT SERVES EXISTING CUSTOMERS. 
          SO, AND THE SAME THING CAN BE SAID FOR THE, THE CIP PROJECTS, ONLY THE PORTION THAT'S GONNA SERVE THE NEW CUSTOMERS, NOTHING THAT'S GONNA IMPROVE CAPACITY THAT'S BEING USED BY EXISTING CUSTOMERS. 
          SO WHEN WE LOOK AT THAT, WE LOOK AT THE EXISTING INFRASTRUCTURE, WE LOOK AT THE PROJECTS IN THE CIP THAT ARE GONNA SERVE THE NEW CUSTOMERS. 
          WE IDENTIFIED $13 MILLION WORTH OF WATER PROJECTS OR WATER EXISTING INFRASTRUCTURE THAT IS ELIGIBLE TO BE INCLUDED IN THIS CALCULATION. 
          AND ON THE WASTEWATER SIDE, WE IDENTIFIED $50 MILLION OF, UH, CAPITAL COSTS THAT WE CAN INCLUDE. 
          SO TO CALCULATE THE IMPACT FEE, IT'S VERY SIMPLE. 
          YOU JUST TAKE THOSE COSTS THAT YOU IDENTIFIED AS BEING ELIGIBLE IN THAT CAPITAL IMPROVEMENTS PORTION. 
          YOU DIVIDE IT BY THE NUMBER OF SERVICE UNITS THAT YOU EXPECT TO ADD FROM THE LAND USE ASSUMPTIONS, AND THAT GIVES YOU THAT CALCULATED IMPACT FEE. 
          NOW THEN THE STATE OF TEXAS REQUIRES YOU TO MAKE AN ADJUSTMENT TO THAT CALCULATED IMPACT FEE BECAUSE THEY RECOGNIZE THAT A CUSTOMER, A NEW CUSTOMER, COULD PAY THE IMPACT FEE, THEN THEY BECOME A RATE PAYER AND THEY START PAYING RATES THROUGH THEIR MONTHLY BILLS. 
          AND THERE THERE'S A POSSIBILITY THAT A COST THAT WE PUT IN THE IMPACT FEE COULD THEN STILL BE FUNDED THROUGH RATES, AT LEAST A PORTION OF IT. 
          SO THEY WANNA MAKE SURE THAT THERE'S NO CHANCE THAT A CUSTOMER PAYS AN IMPACT FEE AND THEN STARTS PAYING RATES AND PAYS FOR SOMETHING TWICE. 
          AND SO BECAUSE OF THIS, YOU EITHER HAVE TO DO A CALCULATION TO CALCULATE A RATE CREDIT OR YOU CAN REDUCE THE IMPACT FEE THAT CALCULATED IMPACT FEE BY 50%. 
          AND SO WE'RE RECOMMENDING THE 50%, UM, BE APPLIED TO THAT CALCULATED IMPACT FEE, AND THAT GIVES US THE MAXIMUM ALLOWABLE IMPACT FEE. 
          SO WHEN WE PUT ALL OF THIS TOGETHER FOR WATER AND WE TAKE THAT $13 MILLION, WE DIVIDE IT BY THE 7,619 SERVICE UNITS, OUR CALCULATED IMPACT FEE IS $1,715. 
          AND WHEN WE APPLY 50% TO THAT, IT COMES OUT TO BE $857 PER SERVICE UNIT. 
          NOW YOU CAN SEE THERE THAT CURRENTLY YOU'RE CHARGING 1080 $7 PER SERVICE UNIT. 
          SO THAT IS A REDUCTION AND THAT IS NOT UNCOMMON. 
          UM, WE DO SOMETIMES SEE THIS, WE, THE NATURAL LIFE CYCLE OF IMPACT FEES KIND OF HITS A PEAK AND THEN STARTS TO COME DOWN. 
          AND THE REASON FOR THAT IS THAT AS YOU START TO GET TO THE POINT WHERE YOU'VE BUILT MOST OF YOUR INFRASTRUCTURE AND YOU'RE NOT PLANNING TO ADD A LOT OF CAPACITY TO THE SYSTEM, THEN THAT COST STARTS TO COME DOWN BECAUSE NOW YOU'VE GOT THE, THE INFRASTRUCTURE IN THE GROUND AND IT'S STARTING TO DEPRECIATE. 
          SO YOU DON'T EXPECT A CUSTOMER WHO'S GONNA COME ONLINE TODAY TO PAY THE SAME PRICE AS SOMEBODY WHO CAME ONLINE FIVE YEARS AGO BECAUSE THEY'RE PAYING FOR INFRASTRUCTURE THAT'S NOW FIVE YEARS OLDER. 
          OKAY? SO THAT IS PART OF THE EXPLANATION OF WHY WE'RE NOT SURPRISED TO SEE THAT THIS FEE IS COMING DOWN SOME. 
          OKAY, SO WHEN WE DO THE SAME CALCULATION ON THE WASTEWATER SIDE, NOW ON WASTEWATER, THE UTILITY IS MAKING A LOT OF INVESTMENT STILL. 
          SO WE HAVE $50 MILLION DIVIDED BY 7,597 SERVICE UNITS. 
          AND SO THAT CALCULATED FEE IS $6,630 PER SERVICE UNIT. 
          WHEN WE APPLY 50%, IT COMES OUT TO BE $3,315 PER SERVICE UNIT. 
          SO THAT IS AN INCREASE, UM, FROM THE CURRENT FEE OF $2,437. 
          SO THAT IS FOR ONE SERVICE UNIT, UM, WHICH IS EQUIVALENT TO, UH, YOUR SMALLEST METER SIZE OF FIVE EIGHTS INCH BY THREE QUARTER INCH METER. 
          AND WE CAN DETERMINE WHAT THE IMPACT FEE SHOULD BE FOR THE LARGER METER SIZES USING WHAT WE CALL THE SAFE MAXIMUM OPERATING CAPACITY THAT YOU CAN PUT THROUGH THE DIFFERENT METERS. 
          AND THESE, UM, OPERATING CAPACITIES, THIS IS PUBLISHED BY THE AMERICAN WATERWORKS ASSOCIATION. 
          IT'S BASED ON 
          [00:15:01]
TESTING THROUGH THE METERS TO SEE WHAT IT'S SAFE TO PUT THERE. 
          SO WE USE THAT INFORMATION TO DEVELOP THESE RATIOS AND THAT WE APPLY THOSE RATIOS THAT YOU SEE WHERE IT SAYS SERVICE UNIT EQUIVALENT TO THAT CALCULATED MAXIMUM FEE OF $857. 
          AND THAT IS HOW WE GET THE, THE FEE FOR THE LARGER METERS. 
          AND SO YOU CAN SEE THEY'RE ALL GONNA GO DOWN SOME JUST BASED ON THAT CALCULATED MAXIMUM THAT WE HAVE. 
          AND FOR WASTEWATER, WE DO THE SAME THING FOR WASTEWATER. 
          UM, IT'S BASED ON THE WATER METER SIZE. 
          AND YOU CAN SEE THERE THE FEES FOR THE ALL THE METER SIZES THAT ARE SHOWN HERE. 
          AND THEN WHEN YOU PUT THEM TOGETHER, THIS IS THE COMBINED FEE. 
          SO WHEN, IF SOMEBODY COMES IN AND THEY NEED TO PAY WATER AND SEWER IMPACT FEES, THIS IS WHAT THEY WOULD PAY. 
          AND YOU CAN SEE THAT WHEN YOU COMBINE THEM TOGETHER, THAT COMBINED FEE IS INCREASING. 
          AND SO THEN FINALLY WE HAVE A CHART THAT SHOWS, UH, THE, WE SURVEYED WATER AND WASTEWATER IMPACT FEES FOR SOME OF THE OTHER UTILITIES IN THE AREA. 
          UH, WE LOOKED AT LEAGUE CITY, MISSOURI CITY AND PER LAND, YOU CAN SEE THE BLUE PORTION OF THESE BARS IS THEIR WATER IMPACT FEE. 
          THE PURPLE PORTION IS WASTEWATER. 
          AND THEN AT THE TOP YOU SEE THE, THE SUM, THE THE COMBINED IMPACT FEE FOR ONE SERVICE UNIT. 
          AND SO WE HAVE THE TWO BARS ON THE FAR RIGHT ARE BAYTOWN WHAT WE'RE PROPOSING, AND THEN WHAT BAYTOWN IS EXISTING. 
          OKAY? SO THAT IS OUR RECOMMENDATION FOR IMPACT FEES. 
          UM, CODY'S GONNA COME UP NEXT AND, UH, TALK ABOUT THE FIRST PORTION OF THE RATE STUDY. 
          UM, BUT REMEMBER THAT WHAT THE FINAL RECOMMENDATIONS WILL BE FOR THE RATE STUDY IS DEPENDENT ON WHAT ACTION IS TAKEN, NOT TONIGHT, BUT WHAT ACTION IS EVENTUALLY TAKEN ON THE IMPACT FEES. 
          OKAY? AND, AND THE OTHER PIECE OF THIS REAL QUICK, UM, BECAUSE I THINK IT WAS A MEETING OR TWO AGO, WE APPROVED COROLLA TO DO A, A BAWA, UH, IMPACT FEE STUDY. 
          AND THIS CHART IS A PERFECT INDICATOR OF OF WHY WE WANTED TO DO THAT. 
          SO IF YOU SEE THE BLUE, THAT'S THE WATER IMPACT FEES. 
          UM, AND SO THOSE DO NOT, UM, THAT CIP FOR THE WATER SIDE DOES NOT COUNT ANYTHING ON THE BWA SIDE. 
          SO THAT'S, YOU KNOW, $60 MILLION PLUS INVESTMENT WE MADE FOR BWA EAST. 
          NONE OF THAT IS BEING CAPTURED IN ANY IMPACT FEE. 
          NOW FROM, FROM NEW DEVELOPMENT, IT'S ALL PAID BY RATE PAYERS. 
          SO, AND YOU CAN SEE, YOU KNOW, YOU LOOK AT LIKE A LEAGUE CITY AT 5,000 ON THE WATER SIDE, THEY'VE PROBABLY GOT SOME OF THOSE EXPENSES, UH, OR CAPITAL COSTS IN THEIR WATER IMPACT FEE. 
          SO, UM, AND CODY CAN TALK WHEN HE COMES UP, THEY'VE, THEY'VE STARTED THAT ANALYSIS AND HAVE SOME KIND OF INITIAL THINKING ON WHERE THAT BAWA IMPACT FEE MIGHT END UP. 
          UM, AND EVEN WITH THAT ADDED ON STILL VERY, I WOULD SAY, SIGNIFICANTLY BELOW, YOU KNOW, THREE OTHER VERY FAST GROWING CITIES IN THE REGION. 
          SO JUST WANTED TO MENTION THAT REAL QUICK BEFORE WE, UH, MOVED ON. 
          THANKS NICK. 
          UM, JUST AS A ORDER OF MAGNITUDE, THE BAWA FEE IS COMING IN AROUND $500 AS OF RIGHT NOW. 
          STILL HAVE SOME TWEAKS TO, UH, WORK THROUGH WITH STAFF, BUT WE EXPECT IT TO BE IN THAT NEIGHBORHOOD OF AROUND $500. 
          SO IF YOU ADDED ANOTHER $500 TO THE WATER FEED, YOU'RE AROUND 1357, UM, FOR A TOTAL ALL IN WATER AND WASTEWATER OF AROUND 4,640 $700, UM, WHICH YOU CAN SEE THE SPREAD TO YOUR NEAREST COMPETITOR THERE AT PEARLAND, ABOUT 1800 BUCKS. 
          SO NOW THAT WE'VE ADDRESSED THE IMPACT FEE PORTION OF THE PRESENTATION, WE'RE GONNA START TALKING ABOUT, UM, THE FIRST COUPLE PORTIONS OF THE RATE STUDY COMPONENT. 
          UM, TONIGHT WE'RE GONNA FOCUS ON THE REVENUE REQUIREMENTS, THEN WE'LL MOVE INTO THE COST OF SERVICE, AND THEN WE'RE GONNA HAVE PLENTY OF TIME FOR QUESTION AND ANSWERS. 
          BUT PLEASE, AS I GO ALONG HERE, IF ANYTHING DOESN'T MAKE SENSE OR YOU HAVE QUESTIONS, PLEASE STOP ME AS WE GO. 
          SO, IN A RATE STUDY, WE REALLY TAKE A STEP-BY-STEP APPROACH. 
          YOU CAN SEE HOW THE IMPACT FEES ARE GONNA BE BUILT ON, UH, WHAT THE RATE STUDY NEEDS AS FAR AS YOU KNOW, THE DATA AND THE INPUT ON THAT FINANCIAL BALANCING ACT THAT WE'RE GONNA HAVE. 
          UH, WHAT WE DID IS WE TOOK A EXHAUSTIVE DATA REQUEST LIST, WORKED WITH STAFF AS NICK ALLUDED TO, UM, TO GATHER AS MUCH INFORMATION AND DATA AS WE CAN. 
          WE WANNA MAKE SURE WE'RE ADHERING TO ANY POLICIES THAT YOU MAY HAVE. 
          WE ALSO WANNA MAKE SURE THAT WE'RE IN ALIGNMENT WITH CONTRACTS THAT YOU MAY HAVE 
          [00:20:01]
'CAUSE WE DON'T WANNA RECOMMEND SOMETHING THAT'S OUT OF BOUND ON THOSE. 
          UM, AS FAR AS THOSE ITEMS ARE CONCERNED. 
          WE ALSO WANT TO EVALUATE AND REVIEW YOUR EXISTING RATE STRUCTURE. 
          WE NEED TO KNOW WHERE WE'RE AT CURRENTLY, SO WE KNOW WHERE WE'RE GOING AND WHERE WE WANT TO GO. 
          NEXT, WE GO INTO THE REVENUE REQUIREMENT ANALYSIS. 
          UH, I WANT YOU TO THINK OF THIS AS HOW MUCH DO WE NEED TO GET. 
          SO ON THE WATER SIDE, WE'RE GONNA SEPARATE IT OUT AND SAY, OKAY, HOW MUCH DO WE NEED TO GET FROM ALL OF OUR WATER CUSTOMERS IN TOTAL? SIMILAR, UH, EXERCISE IN WASTEWATER. 
          WE WANNA FIGURE OUT HOW MUCH WE NEED TO GET FROM ALL OF OUR WASTEWATER CUSTOMERS, AND THAT WILL DETERMINE KIND OF OUR OVERALL REVENUE INCREASE THAT WE NEED TO MAKE SURE WE'RE PAYING THE BILLS. 
          THE DEMAND ANALYSIS IS, UH, EXTREMELY IMPORTANT TO THE REVENUE REQUIREMENT ANALYSIS BECAUSE IT HELPS US UNDERSTAND HOW MUCH REVENUE YOU'RE CURRENTLY BRINGING IN UNDER YOUR EXISTING RATE STRUCTURE. 
          SO WE'VE DONE, UH, A LOT OF ANALYSIS WITH A HUGE, LARGE, UH, DATA DUMP FROM YOUR SYSTEM. 
          UM, WITH THE HELP OF MARCUS AND ZUBER, UH, WE WERE ABLE TO TIE WITHIN, YOU KNOW, A PERCENT OR TWO OF YOUR ACTUAL BUDGETED REVENUE. 
          SO WE FEEL REALLY GOOD THAT THE DATA THAT WE WERE GIVEN IS CAPTURING THE EXISTING RATE STRUCTURE ACCURATELY. 
          THOSE DEMANDS ALSO FEED INTO OUR COST OF SERVICE. 
          SO REMEMBER I SAID THE REVENUE REQUIREMENT ANALYSIS, IT TELLS US HOW MUCH WE NEED TO GET. 
          OKAY, WELL IF I KNOW HOW MUCH I NEED TO GET, NOW I NEED TO FIGURE OUT WHO DO I NEED TO GET IT FROM? DO I NEED TO GET IT MORE OF IT FROM MY SINGLE FAMILY CUSTOMERS OR DO I NEED TO GET MORE OF IT FROM MY NON-RESIDENTIAL CUSTOMERS? THAT'S KIND OF WHAT THE COST OF SERVICE TELLS US. 
          AND THE WAY WE GO ABOUT DOING THAT IS, IS WE SEPARATE THOSE COSTS OUT INTO BUCKETS. 
          SO IT'S NOT ONLY ABOUT HOW MUCH WATER A PARTICULAR CUSTOMER USES, BUT IT'S ALSO HOW THEY USE IT. 
          ARE THEY TURNING EVERYTHING ON AT ONE TIME AT 5:00 PM WHEN THEY GET HOME, THEY'VE GOT THE SPRINKLERS RUNNING, THEY'VE GOT THE SHOWERS GOING, THEY'VE GOT THE DISHWASHER RUNNING. 
          THAT'S REALLY HIGH PEAKING AND THAT'S MORE EXPENSIVE. 
          SO THAT'S WHAT THE COST OF SERVICE HELPS US DO. 
          RATE DESIGN ANALYSIS IS KIND OF THE FINAL PIECE THAT TELLS US, OKAY, HOW ARE WE GONNA GET THAT MONEY THAT WE NEED TO GET FROM EACH ONE OF THOSE CLASSES? ARE WE GONNA GET IT THROUGH A MAJORITY OF THE FIXED CHARGE, WHICH FOR BAYTOWN IS THE CUSTOMER CHARGE, WHICH IS ON A PER BILL BASIS AND A BASE FACILITY CHARGE. 
          THOSE ARE KIND OF YOUR FIXED COSTS NO MATTER HOW MUCH YOUR CUSTOMER USES IN WATER, THAT IS ALWAYS KIND OF FLAT. 
          THEN YOU HAVE THE VOLUMETRIC CHARGE, WHICH IS AN INCREASING RATE BLOCK FOR YOUR SINGLE FAMILY, RESIDENTIAL CUSTOMERS FOR INSTANCE. 
          WHEREAS THE MORE WATER THEY USE, THE MORE EXPENSIVE IT GETS. 
          SO THAT'S KIND OF WHAT RATE DESIGN IS. 
          WE'RE NOT REALLY GONNA TALK ABOUT THAT RIGHT NOW 'CAUSE THIS IS PLENTY, UH, OF FOR US TO, TO BITE OFF IN, IN ONE GO HERE. 
          BUT WE WILL START MOVING DOWN THE LINE AT THAT, UH, LATER MEETING WHERE WE START FIGURING OUT WHAT KIND OF RATE STRUCTURE DO WE WANT TO MAKE GOING FORWARD? IS THE CURRENT ONE DOING WHAT WE NEED IT TO DO? AND IF IT'S NOT, THAT'S FINE. 
          LET'S EVALUATE HOW WE CAN MOVE INTO WHAT YOU WANT AND THEN HOW THAT'S GONNA AFFECT YOUR CUSTOMERS AT THE END OF THE DAY WHEN THEY LOOK AT THEIR BILL. 
          AND THEN LAST, AND, AND SOMETIMES I'VE FORGOTTEN, ART IS THE PUBLIC OUTREACH AND MESSAGING. 
          UH, WE CAN DO THE GREATEST RATE STUDY IN THE WORLD, BUT IF WE CAN'T ACCURATELY AND EFFECTIVELY COMMUNICATE THAT TO YOUR CUSTOMERS, CUSTOMER SERVICE IS GONNA BE FLOODED WITH CALLS GONNA BE A LOT OF CONFUSION. 
          SO WE WANNA MAKE SURE AT THE END OF THE DAY THAT EVERYBODY UNDERSTANDS WHAT WE DID, WHY WE DID IT, AND THE NEED FOR WHY THEIR RATES ARE GOING WHERE THEY'RE GOING. 
          SO NOW WE'RE GONNA START, UH, TALKING ABOUT THE INDIVIDUAL FUNDS, MEANING THE WATER UTILITY FUND AND THE WASTEWATER UTILITY FUND. 
          AND THEN THERE'LL BE A SLIDE WHERE WE COMBINE THEM AND LOOK AT 'EM TOGETHER. 
          SO THIS IS PART OF THE REVENUE REQUIREMENT ANALYSIS. 
          UM, JUST AS A A BRIEF PRIMER, THE STACKED BARS ON YOUR LEFT HAND SIDE UNDER THE FINANCIAL FORECAST GRAPH, THOSE REPRESENT ALL OF YOUR COSTS. 
          ANYTIME YOU SEE THOSE STACKED BARS EXCEEDING THE BLUE LINE WITH THE BLACK DOTS, THAT INDICATES THAT YOU'RE PULLING DOWN ON SOME OF YOUR SAVINGS ACCOUNT, YOUR CASH RESERVES THAT YOU HAVE IN ORDER TO UM, ACCOMMODATE THOSE FLUCTUATIONS. 
          YOU CAN SEE THAT WE ARE PREDICTING A 4%, UH, 4.5% REVENUE INCREASE IN TOTAL FOR FISCAL YEARS 22 THROUGH 26. 
          WHAT THAT'S GONNA ALLOW YOU TO DO IS USE THOSE RESERVES TO HELP SMOOTH OUT THOSE REVENUE INCREASES. 
          UH, YOU COULD, UH, IN CERTAIN INSTANCES USE A LARGER REVENUE INCREASE INSTEAD OF THE FOUR AND A HALF IN FISCAL YEAR 22, YOU COULD GO 5, 6, 7 AND IT WOULD CHANGE THE REST OF THOSE INCREASES LATER DOWN THE ROAD. 
          HOWEVER, WE WANTED TO MAKE SURE THAT IT WAS KIND OF A STEADY AS YOU GO AND WHAT WE CALL A SMOOTH INCREASE. 
          THAT WAY IT'S A LITTLE BIT MORE PREDICTABLE AND UNDERSTANDABLE FOR YOUR CUSTOMERS. 
          THE RESERVE FUND BALANCE IS, IS KIND OF INTERTWINED WITH THAT FINANCIAL FORECAST GRAPH THAT YOU SEE THERE. 
          WE'RE STARTING OUT WITH A, A LOT OF CASH RESERVES IN WHAT YOU SEE AS FISCAL YEAR 20 AND 21. 
          REALLY THAT'S UNSPENT BOND PROCEEDS THAT YOU HAVE LAYING OUT THERE THAT WE'RE STILL USING 
          [00:25:01]
FOR, YOU KNOW, CAPITAL IMPROVEMENT PROJECTS. 
          UM, AND WE ALSO HAVE, UM, SOME CASH BALANCES THAT WE'RE STILL TRYING TO WORK THROUGH, BUT IT'S JUST THE STARTING POINT. 
          AND YOU CAN SEE OVER THE COURSE OF THE FISCAL YEARS AS WE MOVE INTO FISCAL YEAR 2026, WE DRAW THOSE DOWN INTO THE MORE REALISTIC AND REASONABLE LEVELS. 
          THE, UH, DAYS, UH, METRIC THAT YOU SEE ON THAT CHART ON THE RIGHT, THAT JUST REPRESENTS YOUR ORANGE BAR, THAT'S YOUR OPERATING RESERVE. 
          SO IT'S JUST YOUR CASH THAT'S IN THE BANK, IN YOUR OPERATING FUND ALONE THAT HAS ENOUGH MONEY IN CASE SOMETHING GOES WRONG. 
          WE WERE TARGETING 90 DAYS IN TOTAL FOR THAT. 
          UM, YOU CAN SEE IT DOES FALL, UH, A A LITTLE BIT SHORT, UM, JUST WITH THE OPERATING FUND IN FISCAL YEAR 23 AND 24. 
          BUT YOUR TOTAL BALANCE, IF WE ADDED UP ALL OF IT, NOT JUST THE OPERATING FUND BUT THE CAPITAL FUND AND IMPACT FEE FUND, IT IS ADEQUATE SO THAT IF SOMETHING HAPPENS, YOU DID HAVE ENOUGH CASH AVAILABLE TO DO WHAT YOU NEEDED TO DO. 
          THIS IS LITERALLY IDENTICAL, IDENTICAL GRAPH WITH, UH, SOME UPDATED NUMBERS FOR THE WASTEWATER UTILITY. 
          AGAIN, WE'RE LOOKING AT IT INDEPENDENTLY BECAUSE WE DON'T REALLY WANT WATER CUSTOMERS TO SUBSIDIZE WASTEWATER CUSTOMERS AND VICE VERSA. 
          EVEN THOUGH A LOT AND PROBABLY THE VAST MAJORITY OF YOUR SYSTEM, YOU HAVE CUSTOMERS THAT ARE BOTH, WE JUST WANNA MAKE SURE THAT THEY'RE OPERATING, YOU KNOW, STRICTLY ON THEIR OWN. 
          SO FOR THE WASTEWATER, UM, UTILITY, WE ARE FORECASTING THE 4% REVENUE INCREASES. 
          AND YOU CAN SEE THAT IN A COUPLE OF THOSE YEARS, FISCAL YEAR 23 AND 24, WE ACTUALLY HAVE A LITTLE BIT OF A REVENUE SURPLUS. 
          SO WE'RE BUILDING UP SOME CASH BALANCES THAT YOU CAN SEE ON THE GRAPH ON THE RIGHT, BUT THEN AGAIN, WE START, YOU KNOW, UP UPGRADING SOME OF OUR RATE FUNDED CAPITAL AND PULLING THOSE BALANCES DOWN WHERE THE OPERATING FUND IS MEETING OUR 90 DAY GOAL. 
          AND THEN WE HAVE A LITTLE BIT OF CUSHION IN THE CAPITAL FUND AND OPERATE OR THE, UH, IMPACT FEE FUND FOR SOME UNEXPECTED THINGS THAT WE MAY NEED MONEY FOR, UM, IN ORDER TO BUILD OUT. 
          SO THEN, UM, AFTER TALKING WITH STAFF, WE SAID, OKAY, WHAT DOES THIS LOOK LIKE ON A COMBINED BASIS? BECAUSE OUR CUSTOMERS, THEY SEE THE BILL ON A COMBINED BASIS, RIGHT? SO, AND, AND, AND IT'S ALSO KIND OF RUN AS A COMBINED, UM, ENTERPRISE FUND ON THE WATER AND WASTEWATER COMBINED. 
          SO WE DID A WEIGHTED AVERAGE OF THE REVENUES THAT YOU ARE EXPECTED TO RECEIVE FROM THE 4.5% ON WATER AND THE 4% IN WASTEWATER. 
          AND IT DOES COME OUT TO ABOUT 4.3% REVENUE INCREASE IN TOTAL ON THE BALANCES. 
          AND AGAIN, YOU CAN SEE THE RESERVE FUND BALANCES, UM, AS THEY ARE COMBINED BETWEEN WATER AND WASTEWATER AS WELL. 
          SO THAT'S THE REVENUE REQUIREMENT ANALYSIS. 
          AND I WANT TO ASK YOU TO FOCUS ON FISCAL YEAR 22 JUST FOR NOW. 
          SO REMEMBER WE HAVE THAT FOUR AND A HALF PERCENT NUMBER ON WATER AND WE HAVE THE 4% NUMBER IN WASTEWATER. 
          SO KEEP THOSE IN MIND 'CAUSE THAT'S ALL INTERTWINED. 
          AND ONCE WE MOVE THROUGH COST OF SERVICE HERE, SO WE KNOW HOW MUCH WE NEED TO GET NOW, NOW WHO DO WE NEED TO GET IT FROM? WHICH ONE OF OUR CUSTOMER CLASSES DO WE NEED TO GET MORE FROM? WHO DO WE NEED TO GET LESS FROM? BEFORE I START ON THAT, I WANT TO TALK A LITTLE BIT ABOUT THE COST OF SERVICE PRINCIPLES THAT WE'RE GUIDED BY IN ORDER TO HELP CONDUCT THIS TYPE OF STUDY. 
          THE FIRST THING WE WANT TO DO IS MAKE SURE THAT WE ARE RECOVERING COSTS ADEQUATELY SO THAT THE UTILITY MAINTAINS ITS FINANCIAL VIABILITY. 
          AT THE END OF THE DAY, WE WANT TO BE ABLE TO BUILD WHAT WE NEED TO BUILD, WE WANT TO BE ABLE TO OPERATE IT AND WE WANNA BE ABLE TO MAINTAIN IT AND REINVEST IN IT. 
          THAT IS ANYTIME SOMETHING'S BREAKING OR ANYTIME SOMETHING NEEDS TO BE UPDATED, WE NEED TO MAKE SURE THAT WE'RE PROVIDING RELIABLE SERVICE TO OUR CUSTOMERS AND MAKE SURE WE HAVE CASH ENOUGH CASH IN THE BANK, BUT NOT TOO MUCH IN ORDER TO MEET THOSE UH, OBJECTIVES. 
          THE SECOND THING IS WE WANNA MAKE OUR RATE STRUCTURE SPECIFICALLY, WE WANNA MAKE IT EASILY, EASILY UNDERSTOOD AND WE WANNA MAKE IT AS SIMPLE AS POSSIBLE WHILE ALSO MEETING OUR OBJECTIVES. 
          I CAN CREATE A SUPER COMPLICATED RATE STRUCTURE FOR YOU, BUT IF WE CAN'T REALLY EXPLAIN IT TO OUR CUSTOMERS, YOU GET A LOT OF CONFUSION, YOU GET A LOT OF FIGHT, AND UH, WHENEVER THERE'S A LACK OF UNDERSTANDING, IT JUST, IT MAKES FOR A TOUGH DAY FOR EVERYBODY. 
          UM, THE NEXT THREE ITEMS ARE REALLY INTERTWINED. 
          WHAT WE WANNA DO IS WE WANNA MAKE SURE THAT EVERYTHING'S FAIR AND EQUITABLE. 
          MEANING IF IT'S COSTING YOU A CERTAIN AMOUNT TO SERVE THAT CUSTOMER CLASS, WE WANNA MAKE SURE THAT THEY'RE PAYING THAT AMOUNT AND NOBODY ELSE IS PAYING MORE THAN WHAT THEY SHOULD OR LESS THAN WHAT THEY SHOULD. 
          SO THAT GETS INTO THE AVOIDANCE OF, UH, UNDER DISCRIMINATION OR SUBSIDIES AS WE LIKE TO CALL IT. 
          AND THEN IF WE DO ALL OF THESE THINGS, WE WANNA MAKE SURE IT'LL ENSURE THAT WE ARE DOING THINGS CORRECTLY SO THAT THEY'RE LEGALLY AND DEFENSIBLE AND WE'RE TYING EVERYTHING TO WHAT WE CALL A RATIONAL COST NEXUS. 
          MEANING YOU ARE PAYING WHAT IT COSTS YOU, UH, FOR US TO SERVE YOU. 
          SO ONE LAST GRAPH HERE, UM, JUST TO KIND OF DRIVE HOME OUR POINT ABOUT WHAT COST OF SERVICE IS. 
          IF YOU LOOK AT THIS GRAPHIC HERE, ALL OF THOSE I, I'LL CALL THEM SKITTLES FOR NOW, UH, MY KIDS AND I LIKE TO SEPARATE 'EM OUT LIKE THIS ANYWAY, 
          [00:30:01]
SO IT'S A GOOD SEGUE. 
          UM, THE COSTS ARE ALL BUCKETED TOGETHER, RIGHT? THAT'S THAT REVENUE REQUIREMENT ANALYSIS WE TALKED ABOUT. 
          WE SAID, OKAY, HOW MUCH DO WE NEED TO GET? THESE ARE THE NUMBER OF SKITTLES WE NEED TO GET. 
          NOW WE NEED TO SEPARATE THOSE SKITTLES BY COLORS AND EACH ONE OF THOSE COLORS REPRESENTS A DIFFERENT COMPONENT, WHICH TELLS US HOW OUR CUSTOMERS ARE USING THE COSTS THAT ARE INCURRED FOR THOSE PARTICULAR SERVICES. 
          SO WE SEPARATE OUT THE REDS INTO, YOU KNOW, YOUR CUSTOMER BILLING COMPONENTS, UM, AND ANY COSTS THAT ARE ASSOCIATED WITH THAT. 
          THE CAPACITY IS JUST, HEY, HOW MUCH CAPACITY DO WE HAVE TO BUILD IN THE SYSTEM SO THAT WE CAN PROVIDE YOU WITH ON DEMAND SERVICE AT YOUR TAP, BUT ALSO PROVIDE YOU WITH SAFETY AND PROTECTION FOR FIRE PROTECTION? THEN YOU HAVE KIND OF THAT STANDARD BASE FLOW, WHICH IS JUST US DOING OUR EVERYDAY, UM, ITEMS THAT WE NEED. 
          AND THEN WE ALSO HAVE PEAK SUPPLY, RIGHT? WHICH IS THOSE TIMES IN WHICH EVERYBODY'S TURNING ON THEIR IRRIGATION OR SPRINKLERS OR TAKING SHOWERS AND DOING DISHES AND THINGS OF THAT NATURE. 
          ALL OF THOSE COSTS GET KIND OF SEPARATED OUT AND APPLIED TO EVERYBODY EQUITABLY, MEANING THE COST TO SERVE THEM IS THE COST THEY'LL PAY. 
          SO AFTER WE CHOPPED ALL OF THIS UP INTO DIFFERENT BUCKETS, WE COME UP WITH WHAT WE REFER TO AS THE WATER UTILITY COST OF SERVICE RESULTS. 
          NOW I WANT TO WALK YOU THROUGH THIS GRAPH, UM, A LITTLE BIT SLOWER THAN I WILL THE NEXT ONE BECAUSE THE NEXT ONE'S IDENTICAL, IT JUST APPLIES TO WASTEWATER. 
          THE FIRST COLUMN THERE IS YOUR CUSTOMER CLASSES. 
          NOW WE HAVE INSIDE CITY AND WE HAVE OUTSIDE CITY AND FURTHERMORE WE HAVE A COUPLE DIFFERENT BREAKDOWNS. 
          WE HAVE THE SINGLE FAMILY AND IRRIGATION CLASS, WHICH IS KIND OF TIED TOGETHER AND WE'LL TALK MORE ABOUT THAT AT A DIFFERENT MEETING ABOUT UH, THE RATE DESIGN PORTION THERE. 
          AND THEN WE HAVE A MULTIFAMILY CLASS, WHICH UM, JUST FOR REFERENCE ALSO INCLUDES COUNTRY MEADOWS, WHO'S A BIG MASTER METER CUSTOMER OF YOURS. 
          AND THEN WE ALSO HAVE A NON-RESIDENTIAL CLASS, WHICH REALLY COMPRISES QUITE A FEW. 
          YOU'VE GOT COMMERCIAL GOVERNMENT INDUSTRIAL IN THERE, YOU'VE GOT BYPASS IN THERE. 
          AND AGAIN, THIS IS KIND OF WHAT WE'VE ALL WRAPPED UP AND LEARNED FROM YOUR BILLING DATA AND HOW YOU'RE CHARGING YOUR CURRENT CUSTOMERS. 
          SO THAT NEXT COLUMN OVER TO THE RIGHT CALLED REVENUE UNDER EXISTING RATES, WHAT THAT TELLS YOU IS HOW MUCH ARE YOU GETTING CURRENTLY TODAY FROM ALL OF YOUR CUSTOMERS? AND AS YOU CAN TELL FROM JUST AS AN EXAMPLE THAT INSIDE CITY SINGLE FAMILY SLASH IRRIGATION CLASS, YOU'RE GETTING ABOUT $8.9 MILLION CURRENTLY UNDER YOUR EXISTING RATE STRUCTURE FROM THAT CLASS. 
          AND YOU CAN SEE THE SUBSEQUENT CLASSES AS WELL. 
          IN TOTAL YOU'RE GETTING ABOUT 20.5, $20.6 MILLION, UM, UNDER YOUR EXISTING RATE STRUCTURE. 
          AFTER WE DID THAT REVENUE REQUIREMENT ANALYSIS, IF YOU RECALL, WE SAID WE WERE GONNA NEED A 4.5% INCREASE, RIGHT? SO THE DIFFERENCE BETWEEN THAT COST OF SERVICE COLUMN, WHICH IS THE NEXT COLUMN OVER ON THE RIGHT IN IN TOTAL IT SHOWS THE 21.48 MILLION. 
          THE DIFFERENCE BETWEEN 21.48 MILLION AND THE 20.56 MILLION IS EXACTLY THE 4.5% THAT YOU SEE OVER THERE ON THE RIGHT HAND SIDE OF THE REVENUE INCREASE. 
          SO AGAIN, I WANT YOU TO, TO TRY TO SEPARATE IF YOU CAN IN TOTAL FROM THE WATER UTILITY, WE NEED TO GET REVENUES UP FOUR POINT A 5%, BUT THIS CHART TELLS US WHO DO WE NEED TO GET THAT FOUR POINT A HALF PERCENT FROM, RIGHT? SO WE NEED TO GET ABOUT $460,000 MORE FROM THAT SINGLE FAMILY SLASH IRRIGATION CLASS, WHICH EQUATES TO ABOUT 5.2%. 
          SO YOU CAN KIND OF SEE HOW THAT ALL GETS CHOPPED UP AND THIS IS JUST WHAT THE COST OF SERVICE IS TELLING US, RIGHT? OUR RATE DESIGN WILL TELL US KIND OF HOW WE GET THERE AND WHO NEEDS TO PAY WHAT AS FAR AS USAGE IS CONCERNED. 
          SO WE'LL TALK ABOUT THAT AT A LATER DATE, BUT I DON'T WANT YOU TO THINK THAT THAT FOUR POINT A HALF PERCENT REVENUE INCREASE THAT YOU SAW APPLIES EQUALLY TO ALL YOUR CUSTOMER CLASSES BECAUSE THAT'S WHAT COST OF SERVICE TELLS YOU IS WHO WE NEED TO GET THAT FOUR POINT A HALF PERCENT FROM. 
          SO THIS IS, UH, LITERALLY A, A, A COPYCAT OF THE SLIDES YOU JUST SAW, UM, BUT IT APPLIES TO THE WASTEWATER AND YOU CAN SEE, IF YOU RECALL, OUR OVERALL REVENUE INCREASE ON THE FAR RIGHT AT THE BOTTOM THERE IS THAT 4% THAT WE NEED TO GET. 
          SO WE NEED TO INCREASE OUR TOTAL WASTEWATER REVENUES BY ABOUT $771,000, BUT WHO DO WE NEED TO GET THAT 777, UH, $771,000 FROM? UM, AND YOU CAN SEE THAT, UH, AS IT APPLIES TO EACH ONE OF THOSE CUSTOMER CLASSES FOR THE WASTEWATER. 
          SO I KNOW WE DIDN'T STOP FOR ANY QUESTIONS AND ANSWERS, BUT I WOULD LIKE TO GIVE THE OPPORTUNITY TO, UH, ALLOW YOU TO CLARIFY ANYTHING. 
          UH, AGAIN, I KNOW IT'S A LOT TO TAKE IN RIGHT NOW. 
          UM, SO TAKE YOUR TIME AND I'M HERE FOR YOUR QUESTIONS. 
          ALRIGHT, COUNSEL, ANY ANY QUESTIONS AT THIS POINT? UM, JUST ONE CLARIFYING. 
          YES. 
          UM, SO JUST STRAIGHT VISUAL IN TERMS OF THE RATES AND RESIDENTIAL VERSUS 
          [00:35:01]
NON-RESIDENTIAL, UH, AT FIRST I FOUND IT KIND OF HARD TO BELIEVE THAT A SINGLE FAMILY IS USING MORE THAN A MULTI-FAMILY OR NON-RESIDENT. 
          SO IS THAT BECAUSE ON THE NON-RESIDENT THEY'RE NOT OPEN 24 7 OR I'M JUST FINDING IT HARD TO, TO I GUESS UNDERSTAND THAT RECONCILE, RIGHT. 
          SO YEAH, SO THAT, THAT'S A GREAT QUESTION AND I THINK A LOT OF THE DISCONNECT BETWEEN UNDERSTANDING THAT HAS TO DO WITH IT, IT'S NOT NECESSARILY ABOUT THE QUANTITY THEY'RE USING. 
          OFTENTIMES YOU'LL SEE NON-RESIDENTIAL CUSTOMERS USING A LOT MORE, BUT IT'S HOW THEY'RE USING IT, RIGHT? SO IF THEY HAVE THAT TAP, JUST FOR ARGUMENT'S SAKE, IF THEY JUST HAVE IT ON STEADY, BELIEVE IT OR NOT, EVEN THOUGH THEY'RE USING MORE WATER, THEY'RE NOT USING QUITE AS MANY OF YOUR FACILITIES FOR PUMPING OR STORAGE OR ANYTHING BECAUSE IT'S KIND OF THAT STEADY AS YOU GO. 
          IT'S WHEN EVERYBODY IN THAT SINGLE FAMILY CLASS CRANKS EVERYTHING ON, WELL NOW I HAVE TO PULL DOWN WATER FROM MY STORAGE TANKS, I HAVE TO PUMP WATER HERE, I HAVE TO MOVE WATER THERE. 
          SO THEY'RE USING MORE OF THE ITEMS THAT ARE IN YOUR SYSTEM THAT COST MORE TO RUN. 
          I MEAN IT MAKES SENSE WHEN YOU SAY IT, BUT , I'M STILL  RATIONALIZING IT IN MY HEAD. 
          I COMPLETELY UNDERSTAND. 
          YEAH, I CAN'T SEE THAT. 
          BUT UM, AND ALTHOUGH AGAIN, WHEN I'M SHOWING THE RATES, THERE ARE A COUPLE THINGS I WILL SAY THAT YOU WILL SEE FOR SURE ONCE YOU SEE THE RATES. 
          ONE IS THAT THE, THE VERY LOWEST TIER THAT THE CITY HAS CURRENTLY IS BEING CHARGED LESS THAN THE CITY IS EVEN CHARGED FROM BAWA FOR THE WATER. 
          SO THAT LOWEST TIER IS, IS ABSOLUTELY TOO LOW AT THIS POINT. 
          UM, AGAIN, WE'RE LOOKING AT WHAT THE, THE RIGHT LEVEL IS, UM, 'CAUSE THAT THAT IS A, A BIT OF A CHALLENGE, BUT FOR SURE IT'S, IT'S, IT'S TOO LOW AT THIS POINT. 
          SO THAT'S ONE THING YOU'LL SEE. 
          SO LEMME ASK NICK. 
          SO WHEN YOU TALK ABOUT TIERS, SO YOU TALKING ABOUT LIKE THE KIND OF THE FIRST CATEGORY, LIKE THE ZERO TO 2000 GALLON USER, ZERO TO 2000, RIGHT? SO LEMME ASK IN AND WHEN Y'ALL LOOK, WHEN WE LOOK AT TIERS AND RATES, I KNOW WE'VE TALKED ABOUT, I KNOW WHEN WE SET RATES A WHILE BACK, IT WAS, IT WAS DURING, THERE WAS A LOT OF DROUGHT, THERE WAS, THERE WAS REASONS WHY THE COUNCIL SET KIND OF THE CONSERVATION BASED RATES. 
          SO I WANNA MAKE SURE THAT WE, WE DO LOOK AT ALL OPTIONS. 
          WHERE IS THAT? IS THAT THE CASE THAT WE NEED TO STAY WITH CONSERVATION RATES? DO WE NEED TO KIND OF MAYBE HAVE LESS TIERS, BUT, BUT TRYING TO TRY TO CAPTURE SOMETHING, AS YOU SAID, NO, NOBODY PAYING MORE THAN THEY NEED TO, BUT NEITHER LESS. 
          UM, YOU KNOW, I DON'T, YES, YOU'RE, YOU'RE SPOT ON. 
          SO WE NEED, WE HAVE PROBABLY TOO MANY TIERS AND WHEN WE BRING BACK THE RECOMMENDATION, THERE WILL BE, THERE'S FIVE TIERS RIGHT NOW. 
          OKAY, THERE WILL BE LESS THAN FIVE. 
          UM, SO THAT ABSOLUTELY, BUT THERE DOES NEED TO BE TIERS. 
          THERE DOES NEED TO BE A, UH, A DISINCENTIVE TO USE TO OVERUSE WATER. 
          SO, AND, AND SO WHEN WE DO, RIGHT, I MEAN I UNDERSTAND KIND OF, KIND OF A SENSE THE MORE YOU USE AND THEN KIND OF AFTER YOU GET TO THE NEXT TIER OF USAGE, THEN YOU KNOW, THERE'S A LITTLE HIGHER RATE. 
          UM, IT DOES SOUND BETTER THAT, YOU KNOW, I REALLY WANNA MAKE SURE THAT WE TRY TO, UH, ACCOUNT FOR MOST FAMILIES, YOU KNOW, SINGLE FAMILY HOME TYPE USAGE, SOMETHING THAT'S VERY FAIR AND THEN IT'S WHEN PEOPLE GET EXCESSIVE, RIGHT? SO COROLLO HAS STUDIED ALL OF THE USAGE AND, AND WE CAN LOOK BACK NOW THAT WE'VE GOT THE LAST NUMBER OF YEARS OF, OF DATA AND REALLY SEE WHAT MAKES SENSE FOR THOSE TIERS. 
          I DUNNO IF YOU WANT YEAH, IF I COULD JUST SHARE SOME STATISTICS WITH YOU ON YOUR EXISTING, UM, RATE STRUCTURE, UM, THOSE FIRST, YOU KNOW, COUPLE TIERS THAT YOU HAVE, THE WAY THEY'RE CURRENTLY STRUCTURED, YOU'RE CAPTURING ABOUT 39% OF YOUR ACTUAL USAGE FOR SINGLE FAMILY IN THAT FIRST 2000. 
          BUT THEN AFTER YOU DROP OFF YOUR FIRST 2000 IN THERE AND YOU MOVE INTO THAT SECOND BLOCK, YOU'RE CAPTURING ANOTHER 43%. 
          SO JUST IN THOSE FIRST TWO BLOCKS, WHICH, YOU KNOW, IF YOU COMBINE THEM FROM ZERO TO 6,000 GALLONS, YOU'RE ENDING UP CAPTURING, I MEAN, YOU KNOW, OVER ALMOST 80% OF YOUR USAGE, RIGHT? THEN WHEN YOU START MOVING INTO THOSE HIGHER TIERS, LIKE THOSE TOP TWO TIERS, THE THE FOURTH TIER AND THE FIFTH TIER, YOU'RE LITERALLY CAPTURING LESS THAN 5% OF YOUR USAGE THERE. 
          WHICH KIND OF INDICATES TO ME THAT CUSTOMERS ARE KIND OF STAYING OUT OF THERE AND THE ONES THAT ARE IN THERE, THEY DON'T REALLY CARE WHAT THAT RATE'S GONNA BE. 
          THEY WANT THEIR GREEN GRASS, THEY WANT TO USE THE WATER THE WAY THEY WANT TO USE IT. 
          SO THOSE ARE THINGS THAT WE NEED TO CONSIDER BECAUSE THE COST OF SERVICE ONLY TELLS YOU HOW MUCH YOU NEED TO GET FROM THAT CUSTOMER CLASS. 
          THE RATE DESIGN WILL TELL YOU, OKAY, AM I GONNA GET, YOU KNOW, IS THE, THE THE PERSON ON SO, SO-AND-SO STREET, ARE THEY USING 3000 GALLONS? HOW'S THAT GONNA AFFECT THEM? WELL, THAT'S WHERE WE START TALKING ABOUT RATE DESIGN AND CUSTOMER BILL IMPACTS BECAUSE DEPENDING ON YOUR USAGE WILL DEPEND ON WHO YOU'RE GETTING IT FROM WITHIN THAT CLASS, RIGHT? SO WE'RE TAKING THAT HUGE SUBSET AND WE'D KIND OF WHITTLE IT DOWN. 
          ALRIGHT. 
          YES SIR. 
          , I GUESS MY ONLY COMMENT WOULD BE AS FAR AS THE COMPARISONS GO, YOU KNOW, IT IT IT, IT'S HARD JUST FOR ME TO LOOK AT THREE 
          [00:40:01]
OTHER CITIES AND AND SAY, YEAH, OKAY, YOU KNOW, WE'RE A LITTLE LOWER THAN THOSE OTHER THREE. 
          BECAUSE IF YOU LOOK AT 'EM, YOU KNOW, LEAGUE CITY IS A A 0.51 TAX RATE. 
          MISSOURI CITY'S A 0.63 PARA'S A A 0.72, WE'RE WE'RE WE'RE 0.795 OR THEREABOUTS. 
          SO SOME WOULD ALSO MAKE THE ARGUMENT THEY HAVE CLEANER AIR, BETTER SCHOOLS, BETTER AESTHETICS, AND MAYBE LESS CRIME. 
          SO THERE'S A LOT OF DIFFERENT THINGS THAT GO INTO IT. 
          FOR ME, I JUST LOOK AT IT WHAT BAYTOWN NEEDS AND WHAT WE NEED TO DO, NOT NECESSARILY THE COMPARISONS. 
          SURE. 
          YEAH. 
          AND THAT'S FAIR. 
          I I THINK THE, AND WHY WE WANTED TO HAVE BOTH CONVERSATIONS TOGETHER IS THEY DO PLAY IN, SO IF WE WENT BELOW THAT RECOMMENDED UH, IMPACT FEE, UH, RATE, WE STILL ARE GONNA HAVE THOSE SAME CAPITAL EXPENSES. 
          SO IF WE CHARGE A LOWER IMPACT FEE THAT HAS TO BE FUNDED THROUGH HIGHER RATES. 
          YEAH. 
          SO IT'S UNDERSTAND WHAT YOU'RE SAYING, BUT WE HAVE TO, WE'RE GONNA BE SPENDING THE MONEY NO MATTER WHAT. 
          YEAH. 
          IT'S A MATTER WHO WE'RE GONNA CHARGE IT TO. 
          LEMME ALSO ADD, SO, SO ONCE WE DECIDE, MAKE A DECISION ON, ON HOWEVER EVERYTHING FALLS, SO DO WE RE DO WE HAVE TO, WE HAVE TO REPORT THE, OUR STUDY OR I GUESS WHAT WE'RE GOING TO DO, WE, WE, WE REPORT IT AS YOU SAID, THIS IS, THIS IS REGULATED, RIGHT? SO WHO'S REPORT THEY HAVE TO ACCEPT, I GUESS OUR, OUR POSITION, OUR, OUR RESULT OR OUTCOME? WELL WE'VE, WE'VE USED, YOU HAVE TO USE IT IN ENGINEER AND THAT'S WHY WE'VE HIRED COROLLA. 
          OKAY. 
          SO THERE'S A FORMAL PROCESS THAT WE GO THROUGH. 
          THIS IS THE VERY FIRST STEP OF THE IMPACT FEES. 
          YEP. 
          UM, THERE'S A FORMAL PROCESS, PUBLIC HEARINGS, BUT ULTIMATELY THEY GET ADOPTED BY CITY COUNCIL. 
          RIGHT? THEY, THEY GO THROUGH P AND Z FIRST. 
          AS LONG AS YOU MEET THE, I GUESS THE STATUTE, THEN YOU'RE, YOU'RE GOOD. 
          YEAH. 
          OKAY. 
          A QUESTION. 
          YES MA'AM. 
          SO NICK, REGARDING THE PROCESS, I KNOW THIS, YOU SAID THIS IS THE FIRST STEP. 
          SO WHEN WOULD YOU EXPECT TO BE BRINGING THE DECISION PORTION TO US? UM, IN A COUPLE MONTHS AT THE END OF THE YEAR ON THE RATES THEMSELVES? YEAH. 
          UM, I WOULD SAY WITHIN THE NEXT COUPLE OF MONTHS BECAUSE WE NEED TO, UH, HOPEFULLY WITHIN THE NEXT MONTH WE NEED TO BUILD THE NEW RATE MODEL INTO NEXT YEAR'S BUDGET. 
          YEAH. 
          SO PRETTY SOON, PRETTY FAST. 
          AND THAT'S WHY WE WANTED TO GET A, A FEELING ON THE IMPACT FEES. 
          YOU'RE NOT ADOPTING ANYTHING TONIGHT, BUT IF THERE'S A FEELING THAT YOU KNOW, YOU'RE GONNA WANT TO COME IN LOWER, THEN THAT'S GOING TO START IMPACTING THE RATE SIDE OF THINGS. 
          SO, SO, UM, YOU'RE SCIENCE IS SOUND, I MEAN, I COULDN'T ARGUE IT EVEN IF I KNEW HALF OF WHAT YOU WERE TALKING ABOUT, BUT THE, UM, PUBLIC PERCEPTION OF OUR RATES IS GOING TO BE EXTREMELY NEGATIVE. 
          AND SO CONSIDERING THE COMPRESSED TIMELINE WE'RE LOOKING AT, I HOPE Y'ALL HAVE SOME KIND OF PLAN OR STRATEGY TO GET THIS INFORMATION OUT AND TRY TO MAKE A GOOD CASE WITH THE COMMUNITY ON WHY WE NEED TO RAISE THE RATES. 
          UM, I KNOW WE'VE, YOU KNOW, TRIED TO COMMUNICATE IT PUBLICLY BEFORE AND IT'S NEVER REALLY WELL RECEIVED. 
          UM, I MEAN, NEXT TO THE MALL ON GARTH ROAD, IT'S ONE OF THE TOP THINGS PEOPLE COMPLAIN ABOUT. 
          SO I HOPE WE HAVE SOME CREATIVE COMMUNICATION STRATEGIES TO TRY TO GET THE COMMUNITY ON BOARD WITH WHAT YOU'RE TELLING US. 
          AND WE, AND THAT'S PARTLY WHY YOU DIDN'T SEE ANY RATES TONIGHT. 
          WE ARE DOING EVERYTHING WE CAN COROLLA AND CITY STAFF DOING EVERYTHING WE CAN TO GET THE RATES DOWN AS MUCH AS POSSIBLE. 
          SO IT'S, I MEAN, WE'VE REFINED THE CIP WE'VE, WE'VE DONE A WHOLE LOT BEHIND THE SCENES TO TRY AND GET THAT DOWN. 
          WE WANNA DO A LITTLE MORE WORK TO TRY AND TRY AND DO THAT. 
          UM, I THINK NO MATTER WHAT THERE'S, IT'S GONNA CALL FOR SOME SORT OF INCREASE. 
          WE'RE TRYING TO MITIGATE THAT AS MUCH AS WE CAN. 
          MAYBE A FUTURE DISCUSSION COULD BE DIFFERENT FINANCING OPTIONS WE COULD CONSIDER, YOU KNOW, MAYBE SOMETHING CREATIVE OR OUT OF THE BOX AND HOW IT COMPARES TO JUST A STRAIGHT RATE INCREASE. 
          I MEAN, I KNOW, I KNOW I'VE BEEN SHOT DOWN BEFORE WHEN I'VE SUGGESTED JUST USING SOME OF THE GENERAL FUND AND, AND SO WE HAVE, I KNOW, BUT IT, IT WOULD JUST BE NICE IF WE COULD JUST KIND OF SEE WHAT'S LEGALLY AVAILABLE TO US AND JUST HAVE A, A DISCUSSION ABOUT IT. 
          SURE. 
          SO, AND A COUPLE OF THINGS. 
          WE'VE DONE ALREADY THIS CURRENT YEAR THAT THIS PAST YEAR COS DID UTILIZE SOME GENERAL FUND DEBT FOR THE WATER AND SEWER FUND. 
          SO, UM, WE'VE DONE THAT ALREADY. 
          UM, IT'S A POSSIBILITY. 
          I THINK ONE THING MOVING FORWARD AND WE'RE GONNA HAVE, HAVE SOME FUTURE DISCUSSIONS ON THIS IS HOW WE HANDLE OUTOF CITY CUSTOMERS. 
          UM, THERE'S SOME DIFFERENT THINGS WE COULD LOOK AT THERE, WHICH MIGHT HAVE SOME IMPACTS. 
          UM, ONE THING WE DIDN'T, DIDN'T TALK ABOUT IN HERE THAT HAS ALREADY HAD AN IMPACT IS THE FEDERAL MONEY THAT'S COMING IN. 
          UM, THIS MODEL HAS ASSUMED, UH, $15 MILLION OF FEDERAL MONEY COMING IN TO BE USED FOR WATER AND SEWER. 
          WE ARE HEARING THAT THERE'S A LOT MORE WATER AND SEWER MONEY COMING OUT IN THE FUTURE. 
          [00:45:01]
SO IF WE GET MORE OF THAT, IT BASICALLY BUYS DOWN WHAT WE WOULD'VE TO PASS ON THE RATE PAYERS. 
          SO I THINK WE HAVE FLEXIBILITY AND I THINK WHAT YOU SEE WHEN WE BRING IT TO YOU IS GONNA BE A WORST CASE SCENARIO. 
          SO THANK YOU. 
          ALRIGHT, THANK YOU MAYOR. 
          YES, SIR. 
          COULD WE ALSO CONSIDER A STAIR STEP IN IT, MAYBE NOT DOING IT ALL AT ONE TIME IN THE SAME YEAR? SO THERE'S A COUPLE DIFFERENT OPTIONS THERE. 
          UM, ONE THING TO CONSIDER IS WHAT, WHAT YOU'RE REFERRING TO IS WHAT'S WE CALL A PHASE END COST OF SERVICE, RIGHT? MM-HMM . 
          SO WE'LL, WE WILL TRY TO FIGURE OUT IS THAT A THREE YEAR PERIOD? IS THAT A FIVE YEAR PERIOD? BUT WE DO STILL NEED TO GET, AT THE END OF THE DAY, THE AMOUNT OF REVENUE WE NEED TO GET. 
          SO, UM, IT IS POSSIBLE AND IT'S SOMETHING WE COULD LOOK AT AS WE GET INTO THAT RATE DESIGN PROCESS. 
          LAURA? UM, SO FIRST I, I AGREE WITH COUNCIL, UH, COUNCILWOMAN BETTEN COURT IN TERMS OF THE PUBLIC PERCEPTION. 
          AND I THINK NOT ONLY GETTING THEM USED TO THE NEW RATES, BUT ALSO MAYBE BEING PROACTIVE ON SOME, UM, WAYS THAT THEY CAN CONSERVE WATER. 
          UM, I KNOW JUST IN MY MEETING TODAY WITH OUR NEW PR, UM, DIRECTOR, WE, WE TALKED ABOUT SOCIAL MEDIA STRATEGY AND HOW WE CAN UTILIZE THAT TO REALLY, UM, I GUESS CREATE AWARENESS OVER OUR, OUR SYSTEMS AND NOT JUST SEWER AND WASTE, BUT UM, ALSO WATER CONSERVANCY. 
          SO I, I WOULD, I WOULD DEFINITELY WANT TO HAVE THAT AND IT KIND OF GOES ALONG WITH OTHER THINGS THAT WE'VE BEEN TALKING ABOUT. 
          WELL, IT'S NOT JUST TELL THEM THEY CAN'T DO THIS OR, OR THEY'RE GONNA, WE'RE GONNA DO THIS, BUT ALSO GIVE THEM RESOURCES THAT COULD HELP THEM. 
          UM, AND THEN I KNOW THAT WE DID THE, THE TIERED APPROACH WHEN WE DID THE GARBAGE MM-HMM . 
          THE NEW RATES. 
          AND SO I, I LIKE THAT IDEA AS WELL, THE PHASE PHASING IN IT, THE PHASING THE RATES. 
          MM-HMM . 
          CHRIS, SO ALSO I CAN SPEAK CORRECT. 
          OKAY. 
          SO, UM, KIND OF ALONG THE SAME LINES AS THE GENERAL FUND, BUT A A LITTLE DIFFERENT SLANT. 
          YOU, YOU KNOW, I KNOW WE, WE'VE RENEGOTIATED THE IDAS BEFORE AND WE, WE'VE INCREASED THOSE RATES AND THAT WAS VERY BENEFICIAL FINANCIALLY. 
          I MEAN, ARE THERE OTHER THINGS WE CAN DO AND, AND OTHER STRATEGIES? I MEAN, I, I APPRECIATE THE COMMUNICATION AND THE AWARENESS, BUT THE BOTTOM LINE IS THE RATES STILL GO UP AND PEOPLE DON'T LIKE IT. 
          SO, UH, YOU KNOW, IT, IT'D BE NICE IF WE WOULD THINK OUTSIDE THE BOX AND MAYBE CONSIDER SOME OTHER STRATEGIES TO, TO HELP OFFSET THE, THE BURDEN ON THE, ON THE EXISTING HOMEOWNERS AND RESIDENCE. 
          WE ARE. 
          AND WE'RE GONNA, WE'RE GONNA BRING YOU SOME OF THOSE OKAY. 
          IDEAS. 
          YEAH. 
          HAVING SAID THAT, CAN WE TOTALLY MITIGATE IT? PROBABLY NOT. 
          JUST 'CAUSE COSTS DO INCREASE AND WE KIND OF FUNNEL DOWN THE CITY OF HOUSTON TO BAWA TO THE CITY, SO THERE WILL BE INCREASES NEEDED, BUT I THINK WE DO HAVE SOME STRATEGIES TO, TO MITIGATE IT AS MUCH AS POSSIBLE. 
          OKAY. 
          YEAH, I THINK WE SHOULD LOOK AT THAT. 
          YEAH. 
          ANYONE ELSE? HAVE WE LOOKED AT GOING MORE TO A, UM, PER GALLON RATE? MM-HMM . 
          INSTEAD OF THE BLOCK? I MEAN, I FEEL LIKE IF, IF YOU'RE PAYING FOR EVERY SINGLE GALLON, THERE MAY BE MORE INCENTIVE FOR PEOPLE TO TRY TO CONSERVE, UM, WHICH WOULD, YOU KNOW, OVERALL DECREASE THE DEMAND ON THE SYSTEM. 
          SO YOUR CUSTOMERS CURRENTLY ARE PAYING FOR EVERYTHING WITH THE INCREASING BLOCK. 
          UM, I I, I GUESS I'M A LITTLE CONFUSED ON WHAT YOU MEAN BY THAT BECAUSE WELL, WE PAY, YOU PAY IN, YOU FALL IN A RANGE, RIGHT? WE'RE NOT PAYING. 
          SO, SO INSTEAD OF PAYING FOR A THOUSAND, PAYING, IF YOU, IF YOU USE GALLON GALLON 1,367, YOU PAY FOR THAT INSTEAD OF FOR THE THOUSAND OR 2000. 
          GOTCHA. 
          IS THAT'S WHAT YOU'RE ASKING, RIGHT? THAT'S WHAT I WAS ASKING. 
          YEAH. 
          HAVE WE LOOKED AT GOING TO PER GALLON? SO THERE'S SOME INCENTIVE TO, TO IT. 
          IT'S A, IT'S A GREAT QUESTION THAT'S COME UP BEFORE. 
          I THINK THE ISSUE IS, IS CAN YOUR METERS DO IT? UM, SOMETIMES METERS AREN'T CAPABLE OF DOING IT. 
          SOMETIMES THE BILLING SYSTEM'S NOT CAPABLE OF CAPTURING IT. 
          SO YOU HAVE TO BE A LITTLE BIT CAREFUL ABOUT THAT. 
          BUT IT'S SOMETHING THAT COULD BE CONSIDERED, OKAY, CHARLES, CAN THE METERS DO IT? YES SIR. 
          THE METERS CAN DO IT. 
          BUT, UM, REALLY IF YOU'RE A CUSTOMER OVER, YOU KNOW, ANY PERIOD OF TIME, WHATEVER, YOU DON'T USE THAT FIRST MONTH, YOU'RE GONNA GET BILLED ON THE SECOND MONTH. 
          IT EVENS OUT MONTH TO MONTH. 
          YOU KNOW, IT, IT REALLY IS NOT GONNA MATTER. 
          YOU KNOW, IF YOU, IF YOU SAY DON'T GET CHARGED FOR 400 GALLONS THIS MONTH, BUT YOU PAY THE THOUSAND GALLONS NEXT MONTH, YOU KNOW, IF YOU USE 1400 GALLONS, YOU GET, WELL, LET'S SAY 2,400 GALLONS, YOU GET PAID, YOU'RE GONNA PAY FOR 2000. 
          THEN THE NEXT MONTH WHEN YOUR METER TURNS OVER TO THE 3000, YOU'RE GONNA PAY FOR THAT 
          [00:50:01]
THOUSAND. 
          THEN, SO YOU'RE GONNA PAY FOR IT OVER A PERIOD OF TIME, THE SAME AMOUNT. 
          IT DOESN'T MATTER IF IT'S BILLED INCREMENTALLY OR PER THOUSAND. 
          SO IT'S NOT LOOKING AT THE, THE START THAT NUMBER WHEN IT WAS READ. 
          YOU'RE NOT LOOKING AT THAT. 
          YOU'RE LOOKING AT, IT'S A TOTAL, SO IT, IT, IT CONTINUES. 
          OKAY. 
          AND SO IF YOU DON'T GET BILLED FOR THAT, YOU KNOW, THAT SMALL PIECE, YOU DIDN'T U OR YOU USED A CERTAIN AMOUNT, YOU'RE NOT GONNA GET BILLED FOR IN ONE MONTH. 
          YOU'RE GONNA GET BILLED FOR THE NEXT MONTH. 
          OKAY. 
          IT'S GONNA WORK OUT OVER A PERIOD OF TIME, SAY MONTH TO MONTH. 
          OKAY. 
          YOU'RE GONNA, YOU'RE GONNA PAY FOR THE SAME AMOUNT OVER A YEAR THAT YOU WOULD IF YOU BILLED IT PER GALLON. 
          OKAY. 
          THANK YOU. 
          OKAY. 
          ANYONE ELSE? NICK, ANY FINAL COMMENTS? YEAH, I, I DID WANNA SAY ONE, ONE OTHER THING THAT IS GOING TO BE IN THE PROPOSAL FOR SURE IS THE WASTEWATER TIER. 
          SO WE DO HAVE, I GUESS YOU COULD CALL IT A CAP. 
          NOW THERE'S, AT A CERTAIN TIER YOU STOP PAYING FOR WASTEWATER. 
          AND IF YOU JUST THINK ABOUT IT LOGICALLY, ESPECIALLY WHEN YOU SEE THE EXPENSE THAT WE HAVE IN THE WASTEWATER SIDE, THERE'S NOT A TON OF LOGIC TO THAT. 
          YOU'RE STILL USING WATER AND PUTTING IT INTO THE WASTEWATER SYSTEM, BUT AT SOME POINT YOU STOP PAYING FOR IT CURRENTLY. 
          SO THE PROPOSAL THAT WE WERE LOOKING TO BRING BACK THAT WE'VE DEVELOPED SO FAR WOULD REMOVE THAT. 
          SO EV EVERY TIER OF WASTEWATER WOULD HAVE A COST TO IT. 
          MIKE, I, I GOT SOMETHING TO SAY ON THAT, NICK. 
          AND WE HAVE TO BE CAUTIOUS WITH THAT BECAUSE A, A LOT OF THAT, MY UNDERSTANDING IN THE PAST IS TAKEN INTO ACCOUNT IRRIGATION. 
          YOU KNOW, I MIGHT USE A THOUSAND GALLONS FOR MY HOUSEHOLD THAT'S GOING DOWN THE SANITARY SEWER AND I'M USING 2000 GALLONS FOR MY GREEN GRASS. 
          BUT AN IRRIGATION METER DOES NOT CHARGE NO. 
          HAVE A WASTE. 
          NO, I DON'T HAVE TWO METERS. 
          I GOT ONE METER. 
          OKAY, YOU GOT ONE METER COMING AND THAT'S WHERE THE ADJUSTMENT HAS COME IN. 
          SO WE, WE NEED TO BE AWARE AND CAUTIOUS THAT IT'S, IT'S NOT JUST EVERY GALLON I USE IS NOT GOING DOWN THE SANITARY SEWER PROBABLY 60, 70% PROBABLY SO. 
          BUT A LOT OF THE NEWER HOMES, BIGGER HOMES AND SO FORTH AND SO ON, THEY'VE GOT IRRIGATION SYSTEMS AND THEY HAVE ONE METER. 
          VERY FEW OF 'EM HAVE TWO METERS. 
          YOU KNOW, THE, THE NEWER SYSTEMS TYPICALLY DO BECAUSE IT'S, THEY PAY A DIFFERENT RATE FOR IRRIGATION. 
          SO IT, IT'S BENEFICIAL THAT WAY. 
          BUT A LOT OF THE OLDER HOMES JUST HAVE ONE METER MM-HMM . 
          AND THAT IRRIGATION ISN'T GOING DOWN THE SANITARY SEWER. 
          SO WE HAVE TO, AND AGAIN, THAT MAKES IT EVEN MORE DIFFICULT TO CALCULATE WHAT IS THAT PERCENTAGE. 
          BUT WE HAVE TO BE CAREFUL. 
          WELL LET'S JUST TAKE THAT CAP OFF OF THERE. 
          'CAUSE MY UNDERSTANDING IN THE PAST THAT'S, THAT'S WHY THE CAP WAS THERE WAS THE AVERAGE HOUSEHOLD USES TYPICALLY X ANYTHING MORE THAN THAT IS SOMETIMES ASSUMED TO, TO BE IRRIGATION. 
          SO WE JUST NEED TO BE CAUTIOUS WITH THAT STEP. 
          SO THAT'S ALL I GOT. 
          ANY OTHER COMMENTS? NO, MA'AM. 
          ALRIGHT. 
          WE'LL MOVE ON 
          [b. Discuss any or all of the agenda items on the City Council Regular Meeting Agenda for May 13, 2021, which is attached below.]
TO ITEM ONE B. 
          DISCUSS ANY OR ALL OF THE AGENDA ITEMS ON THE CITY COUNCIL REGULAR MEETING AGENDA FROM MAY 13TH, 2021. 
          DOES ANYONE HAVE ANYTHING? NO. 
          OKAY. 
          UH, OKAY. 
          FRANK, SO ON UH, ITEM, I THINK IT WAS SEVEN D THERE WAS JUST A TYPO. 
          IT, IT WAS RELATED TO THE, UH, FIRE TRAINING CENTER CHANGE ORDER. 
          THE, IN THE PREFACE, ONE OF THE PARAGRAPHS IT SAYS CHANGE ORDER SIX, IT SHOULD SAY CHANGE ORDER SEVEN. 
          OH. 
          SO IT, IT DOESN'T AFFECT THE, THE CONTENT OF IT IS JUST A TYPO ONE. 
          OKAY. 
          THANK YOU. 
          ALL RIGHT. 
          WITH ALL ITEMS ON THE AGENDA HAVING BEEN ADDRESSED, THIS MEETING IS NOW ADJOURNED. 
          THE TIME IS 5:56 PM.
* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.