Dec 15, 2021 BAYTOWN AREA WATER AUTHORITY MEETING

MOTION CARRIED UNANIMOUSLY.

OPPOSED? LIKE, SIGNED.

NEXT, WE'LL CONSIDER APPROVING THE

[b. Consider approving the minutes of the Baytown Area Water Authority Special Meeting held on November 3, 2021.]

MINUTES OF THE AUTHORITY.

SPECIAL MEETING HELD ON NOVEMBER.

CAN'T READ, UH, THIRD 2021.

MOTION.

DID I HAVE A SECOND? YES, MA'AM.

I HAVE A SECOND.

OH, THANK YOU.

UH, QUESTIONS.

DISCUSSION, UH, HEARING NONE.

MOTION CARRIES UNANIMOUSLY.

OPPOSED? LIKE, SIGN.

NEXT, WE WILL CONSIDER A RESOLUTION,

[a. Consider a resolution repealing Resolution No. 2021-17, which selected J.P. Morgan Chase Bank as the depository for the Baytown Area Water Authority and selecting Cadence Bank, N.A., as the depository for the Baytown Area Water Authority and authorizing the City of Baytown to negotiate and enter into a Depository Services Agreement with Cadence Bank, N.A., on behalf of the Baytown Area Water Authority.]

REPEALING RESOLUTION NUMBER 2 0 2 1 DASH SEVEN, WHICH SELECTED JP MORGAN CHASE BANK AS A DEPOSITORY FOR THE AUTHORITY AND SELECTING CADENCE BANK IN NA AS THE DEPOSITORY FOR THE AUTHORITY AND AUTHORIZING THE CITY OF BAYTOWN TO NEGOTIATE AND ENTER INTO A DEPOSITORY SERVICES AGREEMENT WITH CADENCE BANK IN NA.

ON BEHALF OF THE AUTHORITY.

THANK YOU, MADAM PRESIDENT.

AS YOU REMEMBER, EARLIER THIS YEAR, I LET YOU KNOW THAT THE CITY'S CURRENT BANKING CONTRACT WAS UP FOR RENEWAL.

WE WENT THROUGH THE COMPETITIVE PROCESS FOR THAT AND SELECTED JP MORGAN CHASE, WHO WERE OUR CURRENT BANKERS.

IN THE INTERIM OF THE STATE LEGISLATURE, INSTITUTES AT NEW REQUIREMENTS FOR ANY, UH, PRIVATE SECTOR ORGANIZATION CONTRACTING WITH ANY STATE AGENCY, INCLUDING MUNICIPALITIES.

UM, JP MORGAN WERE UNWILLING TO, UH, SIGN THE DECLARATIONS REQUIRED BY THE STATE.

UH, THEREFORE WE HAD TO PART COMPANY WITH THEM.

UH, WE REBID THE CONTRACT AND CADENCE WERE SUCCESSFUL, UH, IN THAT, AND WE CAME TO THEM VIA HARRIS COUNTY.

SO WE ARE GETTING CADENCE BANK WITH ALL THE, UH, DISCOUNTS AVAILABLE TO THE COUNTY, WHICH ARE NOT INSIGNIFICANT.

UH, I'D RECOMMEND THAT, UH, YOU APPROVE THE RESOLUTION.

ALRIGHT, THANK YOU.

DO I HAVE A MOTION? I MOVE.

I HAVE A MOTION AND A SECOND.

UM, DO, DO WE HAVE QUESTIONS? YEAH.

UM, DID YOU SAY WHAT, WHAT WAS IT THAT, UH, CHASE WOULDN'T SIGN? UH, THERE WERE, UH, SO THE STATE HAS REQUIRED DECLARATIONS TO INCLUDE RECOGNITION OF THE STATE OF ISRAEL, WHICH HAS BEEN IN PLACE FOR SOME TIME.

UH, ANOTHER DECLARATION, UH, NOT TO DISCRIMINATE AGAINST ARMS MANUFACTURERS AND NOT TO DISCRIMINATE AGAINST COMPANIES IN THE OIL AND GAS INDUSTRY AT JP MORGAN CHASE.

AND THEY'RE NOT ALONE.

UH, A NUMBER OF OTHER, UH, INSTITUTIONS HAVE SIMILARLY DECLINED TO EXCEED TO THAT.

AND WE HAVE ACTUALLY, VICTOR, WE'VE ACTUALLY LOOKED AT GOING AWAY FROM THEM BEFORE FOR OTHER REASONS.

SO THIS ISN'T THE FIRST TIME THAT WE LOOKED AT MOVING AWAY FROM CHASE.

SO, NO, I, I, I'M MIGHT PUT IT THIS WAY.

UH, MADAM PRESIDENT, MY HEART IS NOT BROKEN.

YES.

EDITORIAL COMMENT THERE, BUT THANK YOU.

DOES ANYONE ELSE HAVE QUESTIONS? NO, MA'AM.

HEARING NONE? ALL THOSE IN FAVOR SAY AYE.

AUTHORIZING AN INTERLOCAL AGREEMENT WITH THE CITY OF BAYTOWN REGARDING THE OPERATION AND MAINTENANCE OF WATER TREATMENT FACILITIES.

OPPOSED? LIKE, SIGN MOTION CARRIES UNANIMOUSLY.

UH, WE WILL CONSIDER A RESOLUTION

[b. Consider a resolution authorizing an interlocal agreement with the City of Baytown regarding the operation and maintenance of water treatment facilities.]

THANK YOU.

OUR PREVIOUS AGREEMENT DATES BACK TO 1980 AND IT INCLUDED A LOT OF DATED LANGUAGE AND DID NOT INCLUDE THE FACT THAT WE NOW HAVE TWO PLANTS PRODUCING WATER.

SO WE UPDATED IT TO REFLECT THAT WE MADE OTHER CHANGES AS WELL.

AND, UH, IT BASICALLY NOW REFLECTS THE CURRENT PRACTICE.

IT DOES HAVE A, A FINANCIAL PROVISION FOR COST THAT IS 5% FOR ADMINISTRATIVE THINGS.

UH, VICTOR COULD SPEAK TO MORE ON THAT IF YOU HAVE ANY QUESTIONS ON THAT PORTION OF IT.

WITH THIS AGREEMENT? THOSE FEES ARE, UM, SET BY ORDINANCE AND SO THEY'RE NOT PART OF THIS AGREEMENT.

UM, LET ME HAVE A MOTION I MOVE AND A SECOND SECOND, AND THEN WE'LL HAVE QUESTIONS AND DISCUSSION.

I, I'VE GOT QUESTIONS.

SO, A WHILE BACK WE TALKED ABOUT, UH, WE WERE GONNA BE UPDATING SOME OF THE FEES TO SOME OF THE BUSINESSES BASED ON SIZE AND TO GET IT MORE IN LINE WITH, UM, SAY LIKE THE CITY OF HOUSTON, FOR EXAMPLE, AND SOME OF THE OTHER WATER DISTRICTS.

UM, WILL THIS AGREEMENT, WILL WE BE GETTING MORE MONEY AS BAWA FROM THE, WELL, YOU KNOW, HOW'S THAT GONNA WORK

[00:05:01]

THIS IS STRICTLY FOR THE OPERATION OF THE PLANTS.

AND THE, AND THE MAINTENANCE.

CORRECT.

DOES ANYONE ELSE HAVE A QUESTION? O OTHER, OTHER THAN UPDATING TO HAVING TWO PLANTS AND UPDATING SOME OF THE OUTDATED REFERENCES IN THE LEGISLATION, WHAT MATERIAL DIFFERENCES ARE THERE BETWEEN THIS AND OUR EXISTING AGREEMENT? WELL, THE, THE PREVIOUS AGREEMENT AT, AS WE SAID, IT'S 40 YEARS OLD, IT REALLY DIDN'T REFLECT OUR CURRENT PRACTICES AT ALL.

THIS ONE DOES REFLECT OUR CURRENT PRACTICES AND THAT'S NOT TO SAY IT SAID DIFFERENT THINGS, IT JUST DIDN'T SPEAK ON OUR CURRENT PRACTICE.

SO NOTHING, NOTHING ON A DAY-TO-DAY INTERACTION BETWEEN THE CITY AND BAWA.

THAT'S GONNA CHANGE DRASTICALLY BECAUSE OF THIS.

NO, THAT'S WHAT I WANNA MAKE SURE OF.

DOES ANYONE, ANYONE ELSE HAVE A QUESTION? HEARING NONE.

AWARDING A CONSTRUCTION CONTRACT TO LIM CONSTRUCTION COMPANY, INCORPORATED FOR THE AUTHORITIES FRITZ LANHAM WATER TREATMENT, PLANT FILTER, AIR SCOUR IMPROVEMENTS PROJECT.

OPPOSED? LIKE, SIGN MOTION CARRIES UNANIMOUSLY.

UM, WE WILL NOW CONSIDER A RESOLUTION

[c. Consider a resolution awarding a construction contract to LEM Construction Company, Inc., for the Baytown Area Water Authority's Fritz Lanham Water Treatment Plant Filter Air Scour Improvements Project.]

GOOD AFTERNOON.

THIS PROJECT, UH, WAS INCLUDED IN YOUR BUDGET AND WAS THE FIRST PROJECT THAT WE HAVE BID VIA THE COMPETITIVE SEAL PROPOSAL PROCESS.

SO I JUST WANNA SPEAK FOR JUST A SECOND ABOUT WHAT THAT PROCESS INCLUDES.

AND THAT IS, UH, SHOWN ON YOUR, UM, ON THE ITEM, THERE'S COST AS WELL AS QUALIFICATIONS.

SO 75% OF THE CONSIDERATION AND EVALUATION IS ON COST, BUT ABOUT 25% IS THEN DIVIDED UP AMONGST SOME CATEGORIES.

AND WE RATE THE CONSULTANTS PROPO, PARDON ME, THE CONTRACTOR'S PROPOSAL.

SO THEY'RE TURNING IN INFORMATION SUCH AS THEIR SAFETY, THEIR EXPERIENCE, THEIR PROJECT TEAM, HOW MANY YEARS THEY'VE DONE BUSINESS TOGETHER AS, AS A TEAM, BUT ALSO WITH THEIR SUBCONTRACTORS AND THE MAJOR SUBCONTRACTORS THAT WOULD PLAY A ROLE IN THIS PROJECT.

AND SO WE WENT THROUGH THAT EVALUATION RATING WITH STAFF.

WE ALSO INTERVIEWED ALL THREE CONTRACTORS.

AND THE BEST QUALIFIED FIRM IS WHO WE HAVE BROUGHT TO YOU TODAY, WHICH IS LEM CONSTRUCTION.

SO LEMS HISTORY WITH THE CITY AND BOTH WITH BOWA WAS ALSO CONSIDERED.

AND THEY WERE, UM, THE CONTRACTOR FOR THE CENTRAL DISTRICT WASTEWATER TREATMENT PLANT.

AND MOST RECENTLY THEY WERE THE CONTRACTOR FOR THE CHEMICAL FEED IMPROVEMENT PROJECT.

SO THEY HAD A VERY GOOD RESPONSE TO US EVEN AFTER THE MAJOR FREEZE WHERE EVERYTHING THAT HAD JUST BEEN INSTALLED, YOU KNOW, JUST ABOUT CAME TO ITS KNEES AND PIPES BURST.

AND THEY WERE THERE RIGHT AFTER THAT TO PUT EVERYTHING BACK TOGETHER.

UH, SO THAT WAS A VERY GOOD HISTORY THAT THEY HAD WITH WORKING WITH OUR OPERATION STAFF, WHICH IS VERY, VERY KEY.

THIS PROJECT IS, UM, HAS A HIGH RISK BECAUSE IT IS INVOLVING OUR FILTER MEDIA AND THAT IS WHAT CLEANS OUR WATER AND TAKES ALL THE, UH, KIND OF THE RIVER SEDIMENT OR WHAT'S COMING OUT OF THE CANAL AND, AND BASICALLY CLEANS ALL THAT.

SO THIS PROJECT WILL BOTH RENEW ALL THAT FILTER MEDIA.

WE ARE GETTING A NEW GRID SYSTEM AND COMPLETELY NEW MEDIA.

SO AFTER 30 YEARS, THIS MEDIA HAS BEEN, YOU KNOW, WORKING AND WORKING, WORKING AND IT GETS REPLENISHED A LITTLE BIT AT A TIME, BUT THIS IS GONNA BE A TOTALLY NEW FILTER SYSTEM.

SO WE WANTED TO MAKE SURE THAT OUR CONTRACTOR THAT WE HAVE IS VERY, VERY QUALIFIED AND CAN RESPOND QUICKLY IF THERE'S AN EMERGENCY, BECAUSE IT'S GONNA BE VERY IMPORTANT TO HAVE, YOU KNOW, BASICALLY VERY, VERY CLEAR AND LOW TURBIDITY WATER, WHICH IS WHAT THE FILTER DOES.

SO THAT'S ONE OF THE REASONS WHY WE HAVE, UM, REALLY BROUGHT THEM FORWARD.

AND SO THE PROJECT, UH, TOTAL IS 4.9 UH, MILLION.

AND JUST, UH, TO NOTE THE BUDGET, THIS IS WITHIN OUR BUDGET AND WE ARE ELECTING TO CHOOSE BOTH ALTERNATIVES, UH, SO THAT WE CAN MAKE THE PROJECT WHOLE.

SO WE RECOMMEND APPROVAL.

ALRIGHT, THANK YOU.

DO I HAVE A MOTION MOVE FOR APPROVAL? GO AHEAD.

I'LL SECOND.

I HAVE A MOTION AND A SECOND.

QUESTIONS, DISCUSSION? HAVE ANY HEARING NONE.

AGENDA AND DISCUSS A FUTURE EXPANSION OF THE BWA EAST SURFACE WATER TREATMENT PLAN.

I OPPOSED LIKE, SIGN MOTION CARRIES UNANIMOUSLY.

UH, WE'LL MOVE TO SECTION THREE OF THE

[a. Discuss future expansion of BAWA East Surface Water Treatment Plant.]

AND, UH, EXPLAIN TO YOU OUR RATIONALE FOR, UH, BRINGING THIS FORWARD AT THIS TIME.

UH, GOOD AFTERNOON, MADAM PRESIDENT AND BOARD.

UH, IT'S REALLY HARD TO BELIEVE THAT WE'RE TALKING ABOUT EXPANDING A PLANT THAT WE JUST FINISHED, UH, COMMISSIONING.

BUT, UH, WE ARE HERE AND, UH, I'D LIKE TO WALK YOU THROUGH, UH, SOME OF THE, UH, DATA THAT WE'VE, UH, BEEN ANALYZING

[00:10:01]

SO THIS IS THE AGENDA THAT I HAVE FOR US, UM, SHOULD NOT TAKE TOO LONG.

UM, SO FIRST I JUST WANT TO MENTION WHAT OUR CURRENT, UH, RATED CAPACITY IS FOR BOTH PLANTS.

THE MAIN PLANT HAS, UH, JUST SHY OF 26, UH, MGD MILLION GALLONS PER DAY.

THE EAST PLANT IS RATED AT SIX MGD, SO THAT GIVES US A TOTAL CAPACITY OF 31.878 MILLION GALLONS PER DAY.

NOW, THE RULES, UH, CONCERNING CAPACITY, UH, IT IT'S A LITTLE BIT DIFFERENT FOR WATER VERSUS WASTEWATER.

UH, ON THE WATER SIDE, YOU'RE DEALING A LOT MORE WITH, UH, CONTRACTS AND CONTRACT CAPACITY.

UH, SO THE TCQ SAYS THAT ONCE YOU REACH 85% OF YOUR CAPACITY, YOU HAVE TO SUBMIT A PLANNING REPORT TO THEM TO EXPLAIN HOW YOU'RE GONNA MEET YOUR CAPACITY, UH, AS YOU GROW.

NOW, UH, B'S CAPACITY, UH, THE 31.878 IS, UH, DIVIDED AMONGST TWO, UH, MAJOR GROUPS OF CUSTOMERS.

SO YOU HAVE, UH, B'S WHOLESALE CUSTOMERS, AND THOSE ARE ONES THAT ARE, ARE DIFFERENT MUDS THAT HAVE FIXED CONTRACTS.

UM, THOSE MUDS ARE MOSTLY BUILT OUT, SO WE DON'T EXPECT A LOT OF GROWTH IN THOSE, UH, SEPARATE CONTRACTS FOR BAWA.

UM, SO THAT, THAT'S ONE COMPONENT.

THE OTHER COMPONENT IS THE CITY OF BAY TOWN'S CONTRACT WITH POWELL.

AND THE CITY OF BAY TOWN'S, UH, CAPACITY REQUIREMENTS ARE MAINLY, UH, TWOFOLD.

UH, FIRST CITY OF BAYTOWN HAS SEPARATE FIXED CONTRACTS WITH WHOLESALERS.

SO YOU HAVE THE DIFFERENT, UH, UM, IMPROVEMENT DISTRICT OR INDUSTRIAL DISTRICTS.

UH, THEY HAVE SOME MUDS AND, UH, OTHER ENTITIES THAT THE CITY HAS WHOLESALE CONTRACTS WITH.

AND SO THOSE, WHATEVER THE CONTRACT SAYS, UH, THE CITY HAS TO BE ABLE TO PROVIDE THAT MUCH CAPACITY.

THE OTHER COMPONENT OF THE CAPACITY FOR THE CITY IS WHAT WE CALL THE ALTERNATE CAPACITY REQUIREMENT.

AND THAT IS THE DEMAND BASED ON OUR, UH, RETAIL CONNECTIONS.

AND ORDINARILY, TCEQ REQUIRES THAT A, UH, RETAILER PROVIDE 0.6, UH, GALLONS PER MINUTE PER CONNECTION OF CAPACITY FOR EVERY CONNECTION.

AND, UM, BUT WE WENT THROUGH, YOU MAY REMEMBER, UH, WELL THE CITY WENT THROUGH, UH, WHAT'S CALLED AN A CR TO LOWER THAT REQUIREMENT.

SO, UH, WE WERE SUCCESSFUL.

AND SO NOW OUR REQUIREMENT IS 0.37 GALLONS PER MINUTE PER CONNECTION.

AND OUR CURRENT NUMBER OF CONNECTIONS IS, UH, 34,631 CONNECTIONS.

UH, I MEAN, THAT WAS AS A COUPLE WEEKS AGO.

IT CHANGES EVERY DAY, OF COURSE.

UM, BUT THAT'S THE NUMBER THAT I'M USING AS, UH, STARTING, UH, OF 2022 AND WHAT GOES INTO THE REQUIREMENTS.

SO, SAYING ALL THAT, WE'VE, UH, PREPARED A CHART HERE.

I'M GONNA WALK YOU THROUGH, UH, WHAT THIS CHART IS TELLING YOU.

SO ON THE TOP ROW YOU HAVE WHAT I EXPLAINED AS A TOTAL CAPACITY THAT WE HAVE, YOU KNOW, ON GROUND 31.878, THAT'S WHAT WE'RE, YOU KNOW, UM, RATED TO PRODUCE.

UH, AND THEN I HAVE IT DIVIDED INTO THE DIFFERENT YEARS, BUT I'M GONNA REALLY JUST FOCUS ON 2022 RIGHT NOW AND, AND ASSUME THAT, YOU KNOW, WHERE WE'RE NOW IS RIGHT AT, UH, JANUARY, 2022, UH, I MENTIONED THE, UH, CITY OF BAY TOWN'S.

UH, AND THE FIRST SECTION THERE IN BLUE IS, UH, RELATED TO THE CITY OF BAY TOWN'S CONTRACT.

SO THE CITY OF BAY TOWN'S, UH, A CR BASED ON THAT, YOU KNOW, 34,000 AND CHANGE, UH, NUMBER OF CONNECTIONS AND THE 0.37 GALLONS PER MINUTE PER CONNECTION, THAT TRANSLATES INTO 18 AND A HALF MILLION GALLONS PER DAY OF REQUIRED CAPACITY.

SO THAT'S WHAT THE CITY HAS TO HAVE TO MEET ITS OBLIGATIONS BASED ON JUST THE RETAIL CONNECTIONS.

THEN YOU GET INTO THE CONTRACTS THAT THE CITY HAS, AND STARTING IN JANUARY OF 2022, THE CITY WILL BE REQUIRED TO HAVE JUST UNDER 7 MILLION GALLONS PER DAY.

[00:15:01]

OKAY? SO THAT YOU TOTAL THERE IS JUST OVER 25 MGD THAT THE CITY IS REQUIRED TO HAVE BA'S OTHER CUSTOMERS ABOUT TWO AND A HALF MGD.

AND YOU CAN SEE AS YOU GO ACROSS TIME, THAT'S ASSUMED TO BE FAIRLY CONSTANT.

NOW, THE CITY'S, UM, CONTRACTS, AS I SAID THERE, THERE'S ONE IN PARTICULAR THAT HAS, UH, WE'VE AGREED TO INCREASE IT, UH, BASED ON A, A WATER BOTTLING PLANT THAT'S COMING ONLINE, STARTING IN, UH, YOU KNOW, IN 2022.

AND SO YOU'LL SEE AS YOU GO TO 2023, THE NUMBER INCREASES A LITTLE BIT.

AND THEN SAME THING IN 24 AND 25.

AND SO, UH, THAT'S BASED ON WHAT WE CURRENTLY ARE OBLIGATED TO PROVIDE AS A CITY.

AND IN TURN, YOU KNOW, ONE OF BAS CUSTOMERS, SO GOING BACK TO THE 2022 COLUMN, YOU'LL SEE THAT THE TOTAL CAPACITY REQUIRED IS 27 POINT, UH, NINE MGD.

AND THAT LEAVES US A BALANCE OF ABOUT FOUR MGD.

UM, SO THAT IS ABOUT 87% OF OUR PRODUCTION CAPACITY.

SO YOU CAN SEE WE'RE AT THE POINT WHERE WE NEED TO START PLANNING FOR AN EXPANSION, UH, BASED ON THE TCEQ RULES OF 85%.

AND AS WE TAKE OUT THESE, UH, YOU KNOW, THE, THE GROWTH IN THE NUMBER OF CONNECTIONS THAT'S ASSUMED TO BE 1.3%, THAT WILL INCREASE YOUR, UH, THE A CR REQUIREMENTS.

AND LIKE I SAY, THE, THE CONTRACTS FOR THE CITY OF BAYTOWN WILL INCREASE SOMEWHAT.

SO AS THINGS STAND TODAY, WE'RE LOOKING AT REACHING OUR CAPACITY IN, YOU KNOW, SIX TO SEVEN YEARS.

AND SO WE REALLY DO NEED TO START, SINCE IT TAKES, YOU KNOW, THREE TO FIVE YEARS TO BRING A PLANT ONLINE, WE REALLY NEED TO START PLANNING FOR AN EXPANSION.

BUT THIS ISN'T A WHOLE NEW PLANT, SO IT SHOULDN'T TAKE NEAR THAT LONG.

CORRECT.

UH, AND, AND WE BELIEVE THAT IT, IF WE USE AN ALTERNATE DELIVERY METHOD, UH, SUCH AS DESIGN BUILD, THAT WILL SHORTEN THAT TIMELINE TO, LIKE I SAY, MAYBE THREE YEARS.

UH, BUT WE BELIEVE THAT WE NEED TO START PLANNING FOR IT RIGHT NOW.

UH, SO I WANT TO GET INTO, YOU PROBABLY HAVE QUESTIONS ABOUT, YOU KNOW, WHETHER WE CAN AFFORD TO DO THIS, HOW MUCH IS THIS GONNA COST? UM, SO I DO WANT TO ADDRESS SOME OF THOSE.

WE'VE LOOKED AT SOME OF THOSE.

THESE ARE JUST, YOU KNOW, PRELIMINARY NUMBERS, UM, BASED ON THE CURRENT, YOU KNOW, CONTRACTING ENVIRONMENT, UH, REALIZE THAT, YOU KNOW, COSTS ARE ESCALATING, YOU KNOW, ON A DAILY AND WEEKLY BASIS.

UM, SO WE'VE TRIED TO, WE USED, UH, YOU KNOW, OUR, OUR CONSULTANT TO HELP US PRODUCE SOME ESTIMATES OF WHAT AN EXPANSION OF THE PLANT WOULD LOOK LIKE.

UH, SO TO EXPAND THE PLANT BY 6 MILLION GALLONS PER DAY, UH, WE WOULD ASSUME THAT THAT WOULD BE ONE MORE TREATMENT TRAIN.

WE WOULD HAVE TO ADD AN ADDITIONAL GROUND STORAGE TANK, UH, BUT NO, UH, ADDITIONAL FORAY LAGOON.

AND THAT PROBABLY WOULD BE AROUND $50 MILLION.

YOU KNOW, I DON'T WANNA SET AN EXPECTATION OF, OKAY, THIS IS WHAT IT'S GONNA BE.

UH, BUT YOU'LL SEE THE NOTES THERE, WHAT WE'VE TRIED TO, YOU KNOW, INCORPORATE INTO THAT ESTIMATE.

THERE IS A ESCALATION FACTOR, THERE'S A CONTINGENCY IN THERE, AND THEN THERE'S AN AMOUNT SET ASIDE FOR ENGINEERING TESTING AND, YOU KNOW, CONTRACT ADMINISTRATION, THINGS LIKE CONSTRUCTION ADMINISTRATION.

SO THERE'S SOME THINGS THAT ARE IN THERE THAT WE FEEL LIKE WOULD COVER THAT COST.

AND THEN THERE'S ALSO PROPRIETARY TREATMENT EQUIPMENT THAT WAS INCLUDED IN THE DESIGN OF THE, UM, BIO EAST PLANT.

IF WE DO, UM, USE THAT EQUIPMENT, WE WILL LIKELY FACE, YOU KNOW, INCREASED COST BECAUSE IT'S PROPRIETARY AND THEY HAVE A NEGOTIATING ADVANTAGE.

SO, UM, THAT WOULD, THAT'S ANOTHER REASON FOR US TO, UH, MAYBE HIRE A CONSULTANT, DO SOME PLANNING SO THAT WE CAN LOOK AT WHAT THE DIFFERENT OPTIONS ARE.

MAYBE WE DON'T STICK WITH THIS SAME PROPRIETARY EQUIPMENT THAT'S, THAT'S THE SUPER PULSATE THAT IS INCLUDED, UH, BY SUEZ, UH, WHICH WAS IN THE FIRST PHASE.

UH, IF WE DO A 12 MGD EXPANSION, THAT WOULD BE TWO TREATMENT TRAINS STILL A GROUND STORAGE TANK, AND WE WOULD HAVE TO ADD A FOUR BAY.

THERE ARE OTHER THINGS THAT WE WOULD ADD, YOU KNOW, UH, CHEMICAL TREATMENT FACILITY,

[00:20:01]

UM, AND ADDITIONAL PUMPS, THINGS LIKE THAT.

SO THIS ESTIMATE IS, YOU KNOW, UH, PRETTY HIGH.

WE'D HAVE TO, UH, DO SOME WORK ON THE, YOU KNOW, FINANCIALS AND MAKE SURE WE COULD AFFORD THIS.

UM, BUT WE WOULD ALSO WANT TO DO IS LOOK AT WHAT OUR DEMAND IS, UM, YOU KNOW, EXPECTED TO BE IN THE COMING YEARS AND SEE WHICH, UM, WHICH ALTERNATIVE WOULD REALLY MAKE THE MOST SENSE.

YOU KNOW, IF WE'RE GONNA REALLY RUN THROUGH THAT 6 MILLION GALLONS IN A COUPLE YEARS, THEN YEAH, WE, WE PROBABLY NEED TO LOOK AT DOING SOMETHING LIKE A 12 OR, OR SOMETHING SIMILAR.

SO THOSE ARE THINGS THAT WE REALLY NEED TO START ANALYZING SOON.

UM, I WANT TO TAKE YOU THROUGH SOME OF THE INITIAL, UH, FINANCIAL IMPACTS THAT WE'VE LOOKED AT TO DETERMINE WHETHER OR NOT WE COULD AFFORD TO DO AN EXPANSION OF THE PLANT.

NOW THIS, UH, ANALYSIS REALLY JUST LOOKS AT THE INCREMENTAL, UH, REVENUES THAT BOTH BAWA AND THE CITY WOULD GET FROM THE WATER BOTTLING PLANT COMING ONLINE.

AND AS I SAID, IT COMES ONLINE IN PHASES, UH, 0.65 MGD PER YEAR UP TO, UH, RIGHT ABOUT TWO MGD AT, AT FULL BUILD OUT.

AND SO IF YOU CONSIDER THAT WE'LL BE SELLING 2 MILLION GALLONS PER DAY TO ONE USER, UH, WITHOUT HAVING TO ADD MORE STAFF, WITHOUT HAVING TO EXPAND THE PLANT.

UM, SO WE'RE GONNA REALIZE CERTAIN AMOUNT OF REVENUES AND THE COSTS ARE REALLY JUST GONNA BE ASSOCIATED WITH THE COST OF THE WATER AND TREATING THAT WATER.

SO WE'VE MADE SOME ASSUMPTIONS BASED ON THE REVENUES THAT IT WERE PRODUCED.

AND YOU'LL SEE THERE, UH, ON THE LAST LINE OF THE, THE MIDDLE CHART, UH, THAT ONCE IT'S PRODUCING, YOU KNOW, THE 1.95 MGD, IT'S GONNA GENERATE, UH, ABOUT $4.7 MILLION IN ANNUAL REVENUES.

THAT'S BASED ON THE, THE, THE OUTTA CITY RATE, BECAUSE THIS IS AN OUTTA CITY FACILITY.

AND WE'VE RECENTLY AS A CITY, UM, PASSED AN ORDINANCE THAT THE OUT CITY CUSTOMERS WOULD PAY AN OUT CITY RATE.

AND SO THAT RATE HAS INCREASED, UM, AND WILL PROVIDE ADDITIONAL REVENUES.

UH, THE COST, AS I SAID, WE ESTIMATED TO BE ABOUT A DOLLAR PER THOUSAND GALLONS.

UH, THE, THE NUMBERS AT THE TOP THERE ARE, UH, DOLLARS PER THOUSAND GALLONS.

AND SO, YOU KNOW, THAT WOULD NET JUST OVER $4 MILLION, UH, ANNUALLY TO BOTH THE BOW, BOW AND THE CITY.

NOW, UM, WITH $4 MILLION ANNUALLY, YOU COULD ISSUE SOME DEBT.

AND WE'VE LOOKED AT, YOU KNOW, HOW MUCH, WHAT WOULD, WHAT KIND OF DEBT WE COULD ISSUE BASED ON THAT, UH, STREAM OF PAYMENTS.

AND, YOU KNOW, FOR, UH, WE COULD ISSUE $50 MILLION IN DEBT FOR 20 YEARS AT 3% AND HAVE A DEBT PAYMENT OF ABOUT 3.3 MILLION.

SO THAT'S JUST TO LET YOU KNOW THAT, YOU KNOW, BROAD BRUSH, WE FEEL LIKE WE CAN'T AFFORD TO EXPAND THE PLANT AT THIS TIME.

UM, WE DO THINK, AND, AND YOU'LL SEE THE, UH, ON THE BIO NET REVENUES AND THE CITY NET REVENUES, UH, THERE'S A LITTLE MORE REVENUE COMING TO THE CITY.

UM, WE'VE DISCUSSED THIS AS A STAFF AND BELIEVE THAT, UM, IT WOULD BE PRUDENT TO MAKE SOME KIND OF, UH, TRANSFER FROM THE CITY TO BWA TO ACCOUNT FOR, YOU KNOW, OUR, TO HELP FINANCE THE, UM, EXPANSION OF THE PLANT.

SO THAT COULD BE A SEPARATE AGREEMENT THAT WOULD BE, YOU KNOW, A DISCREET TIMELINE.

AND, UM, I THINK THAT WOULD BE SOMETHING THAT WOULD BE PART OF THE EXPANSION OF THE PLANT.

UM, NOW THAT KIND OF BRINGS ME TO THE RECOMMENDATIONS.

UM, FIRST, SINCE WE'RE, UH, RIGHT AT THE POINT OF THE 85% CAPACITY, I BELIEVE WE NEED TO FILE THE REQUIRED REPORT WITH TCEQ, UH, PLANNING OUR PLAN TO EXPAND THE PLANT, UH, WITHIN THE NEXT, YOU KNOW, FIVE YEAR WINDOW, FIVE TO SEVEN YEARS, UH, AND THEN START THE PLANNING PROCESS.

AND WE WOULD LIKE TO DO A SEPARATE CONTRACT, A SMALLER CONTRACT, JUST, UH, WITH AN ENGINEERING FIRM TO, UH, STUDY THE OPTIMAL SIZE THAT THE PLANT SHOULD BE EXPANDED TO.

UH, AND THAT WOULD BE

[00:25:01]

BASED ON, YOU KNOW, UH, EXPECTED GROWTH IN DEMAND.

THAT'S GONNA BE, YOU KNOW, UH, BROAD BRUSH.

THERE WOULD BE, YOU KNOW, RESIDENTIAL GROWTH, NORTH OF I 10.

THERE'S, UH, THE INDUSTRIAL GROWTH ON THE EAST SIDE, AND THEN THERE'S POSSIBLE RESIDENTIAL GROWTH IN THE EVERGREEN AREA THAT WE'RE STARTING TO SEE INTEREST IN.

SO, UH, WE NEED TO LOOK AT ALL THESE, UH, EXPECTED DEMANDS AND, UM, SEE WHAT'S THE BEST SIZE PLANT TO EXPAND AND THEN DETERMINE A DELIVERY METHOD.

LIKE SAY THERE'S A DESIGN BUILD, WHICH CAN SAVE, YOU KNOW, TIME.

UM, THERE ARE DIFFERENT METHODS OF DESIGN BUILD.

SO WE'D LIKE TO, YOU KNOW, ANALYZE THAT AND THEN DETERMINE A FINANCING STRATEGY, LOOK AT YOU, WHAT, UH, OUR RATE WE, WE WILL RECOMMEND, WHAT KIND OF RATE STUDY, UM, AND JUST THE DIFFERENT OPTIONS FOR DEBT, UH, AND DIFFERENT PROGRAMS. THERE'S, YOU KNOW, TEXAS WATER DEVELOPMENT BOARD HAS SOME, UH, LOAN PROGRAMS AND JUST SEEING WHAT THEIR, UH, CRITERIA IS, WHAT THE RESTRICTIONS ARE, UH, AND WHAT THE, YOU KNOW, BENEFITS ARE TO DOING THAT.

SO WE'D LIKE TO START THIS AND TRY TO GET YOU SOME, UH, YOU KNOW, BETTER DATA AND, AND, AND BETTER RECOMMENDATIONS IN THE COMING MONTHS.

UH, THAT'S ALL I HAVE FOR YOU.

I'M SURE YOU HAVE QUESTIONS.

SO, UH, WELL, ONE QUESTION.

UM, WE'VE DESIGNED THE EAST PLANT TO GO UP TO 24.

MGD.

RIGHT? SO, AND WE'RE AT SIX NOW.

SO WE'VE GOT EASILY CAPACITY TO DO THE SIX OR THE 12.

WE, WE HAVE LAND TO DO THAT.

GOTCHA.

WHAT, WHAT DID OUR ORIGINAL PLANT COST? WHAT DID IT, WHAT WAS THE FINAL ALL IT WAS JUST UNDER 50 MILLION.

IT WAS 49 POINT SOMETHING, 49.6.

AND THAT INCLUDED THE LAND.

UH, IT DID.

AND IT FOR TO DOUBLE THAT YES.

WITHOUT THE LAND IS 50 MILLION.

AND, AND, AND LIKE I SAY, THAT'S JUST THE, THAT'S OUR PRELIMINARY ESTIMATE BASED ON THE ENVIRONMENT WE'RE IN.

SO WHEN WE SAY 6,000 GALLONS PER DAY, OR MILLION SIX ME, WHERE ARE WE AT OUR ACTUAL CAPACITY? WHAT ARE WE PUTTING OUT? SO WHAT WE'RE ACTUALLY PRODUCING? YEAH, THAT'S, WE, WE AVERAGE ABOUT 14 MILLION GALLONS PER DAY ON AN AVERAGE DAY.

UH, OH, ON THE EAST PLANT YOU MEAN? YEAH.

UH, IT'S TWO, 2.4 RIGHT NOW ON THE EAST PLAN.

COULD WE GO TO SIX IF WE NEEDED TO? WE CAN.

IT'S JUST, THERE'S NOT THE DEMAND.

I UNDERSTAND.

YEAH.

THE DEMAND, BUT EVERYTHING'S YES.

WORKED OUT.

BECAUSE I KNOW THERE WERE SOME THINGS AT THE BEGINNING THAT NEEDED TO BE WORKED OUT.

RIGHT, RIGHT.

AND, AND IT, IT'S FULLY FUNCTIONAL NOW.

SO GO BACK TO THAT BOTTLING PLANT.

I DON'T KNOW WHERE I'VE BEEN, BUT IT, SO IT, IT'S PART OF, UH, WHAT IS THAT, WHAT IS THAT REFERRING TO? THE INDUSTRIAL DISTRICT? IT'S, SO IS THIS, IS THIS OUR BOTTLING PLANT? NO.

OR ANOTHER, OR SOME OF OTHER, OTHER COUNTRIES? IT'S, OR COMPANIES? IT'S THAT BOTTLE IN FRONT OF YOU.

IT'S NIAGARA.

THERE, THERE IS, UH, IT'S NI UNDER, UNDER CONSTRUCTION WITHIN, UH, THE INDUSTRIAL DISTRICT.

THERE IS, THEY'RE BUILDING A WATER BOTTLING FACILITY.

FAIR ENOUGH.

BUT THAT'S NOT, 'CAUSE THAT'S NOT US DOING THAT.

NO.

AND, AND, AND IT IS A CITY, UH, CUSTOMER.

WELL, THE INDUSTRIAL DISTRICT, CCID ONE IS ONE WHERE IT'S LOCATED, THAT IS A CUSTOMER OF THE CITY OF BAYTOWN.

AND SO THAT'S PART OF THAT, UH, CITY OF BAYTOWN CONTRACT OBLIGATION THAT I, I TALKED ABOUT EARLIER.

NO, I UNDERSTAND THAT.

I, I JUST KNOW THAT THE CITY OF HOUSTON YEARS AGO WAS GONNA START MAKING BOTTLED WATER, AND THERE WAS A BIG JOKE ABOUT THAT, RIGHT? NO, WE'RE NOT DOING IT AS, UH, IT IS NOT BWA OR THE CITY OF BAYTOWN.

IT'S A PRIVATE, UH, COMPANY, BUT WE HAVE THE CONTRACT OBLIGATION TO PROVIDE THEM RAW WATER OR TREATED WATER, AND THEN THEY FURTHER RIGHT.

TREAT IT AND BOTTLE IT.

COMPLETELY SEPARATE, YES.

I, I HAVE A WHOLE BUNCH OF QUESTIONS.

GOOD.

THAT MAY BE MORE APPROPRIATE FOR, I KNOW I'VE BEEN ON THIS BOARD FOR A LONG TIME, BUT SOME ORIENTATION TYPE STUFF.

UM, SO I KNOW WE'RE TIED IN WITH THE CITY.

I KNOW WE'RE, WE'RE, BUT WE'RE A COMPLETELY SEPARATE BUDGET.

TRYING TO FIGURE OUT HOW WE'RE GONNA PAY FOR ALL THIS STUFF.

DISTRICT IS A CUSTOMER OF THE CITY, NOT OF BAWA.

AND SO IT WOULD SEEM TO ME THAT THE CITY IS TAKING ALMOST 7 MILLION GALLONS THAT WE'RE PRODUCING AND TURNING AROUND AND SELLING IT TO END USERS AT A HIGHER RATE THAN WE WOULD SELL IF WE WERE DIRECTLY SELLING TO THOSE USERS.

CORRECT.

WITHOUT GETTING INTO ALL THE, WHY WOULD WE NOT, WHY IS IT BECAUSE WHY IS IT THAT THE CITY WOULD TAKE $7 MILLION OR 7 MILLION GALLONS AND RESELL THAT? 'CAUSE THE INDUSTRIAL

[00:30:01]

AND WHY THEY THEY HAVE CONTRACTS WITH THE CITY TO, FOR THE CITY TO PROVIDE WATER.

AND SO WHY WOULDN'T THAT BE, AGAIN, THIS IS ORIENTATION, BASIC LEVEL STUFF.

AND I ACKNOWLEDGE THE STUPIDITY OF EVERY QUESTION I'M ASKING.

NO.

WHY WOULD THAT NOT BE A CONTRACT THAT BAWA WOULD HAVE? WHETHER WE PROVIDE IT AT A LOWER COST OR AT THE SAME COST.

IS, IS THE CITY SELLING IT BASED ON THE SLIDE WITH THE, THE BOTTLED WATER FACILITY? IT LOOKS LIKE THE CITY IS MARKING IT UP AND THEN SELLING IT UNDER THEIR CONTRACT.

WE'RE HERE NOT REPRESENTING THE CITY SPECIFICALLY.

WE'RE HERE FOR BAWA.

WHY ARE WE OKAY WITH CONTRACTING WITH THE CITY TO SELL WATER? AND I UNDERSTAND EVERYONE THAT'S LOOKING AT ME RIGHT NOW, MANY WORDS, WORDS FOR THE CITY, BUT WHY WOULD WE NOT SOLICIT INDUSTRIAL DISTRICTS OR MUDS OR WHOEVER THE, THE SECONDARY USERS ARE? WHY WOULD BAWA NOT HAVE THOSE AND GET ADDITIONAL REVENUE SO THAT WE CAN AFFORD TO PAY THE PLANT? SO THAT WAY WE'RE NOT TRYING TO DO THIS AFTER THE FACT TRANSFER OF MONEY FROM THE CITY TO BAWA.

I, KAREN, DID YOU UNDERSTAND THAT THAT QUESTION COMES FROM RIGHT.

SO, SO BALA IS A, A WHOLESALE SUPPLIER AND DOESN'T REALLY SUPPLY INDIVIDUAL CUSTOMERS.

IT SUPPLIES, UH, TO, TO MUDS AND DIFFERENT THINGS LIKE THAT.

UM, THE, UM, ALSO THE, THE ISSUE IS THE DISTRIBUTION LINES.

SO THE LINES, TYPICALLY THE CITY HAS LINES THAT CAN SERVE THE CUSTOMERS.

'CAUSE THEY'RE, THEY'RE, THEY'RE IN THE BUSINESS OF SERVING CUSTOMERS.

RETAIL, NOT WHOLESALE LIKE BA IS.

SO THAT'S THE MAJOR DISTINCTION.

JUST DELIVERY TYPE, I'M SORRY, DELIVERY MORE THAN ANYTHING ELSE.

BEING ABLE TO DELIVER TO THE CUSTOMER AND INVOICE AND BILL AND RIGHT.

NO, I GET IT.

I, I'M JUST, YOU KNOW, LOOKING AT THE NUMBERS, IT LOOKS LIKE THE CITY MAKES TWO TO ONE ON, AND THEY'RE NOT EVEN, THEY'RE NOT EVEN MAKING THE WATER.

THEY'RE JUST FLIPPING IT.

AND, AND I'M, AGAIN, I'M NOT CRITICIZING, I'M JUST ASKING DUMB QUESTIONS OF, YOU KNOW, I'M, I'M LOOKING AT THE CITY TAKING ABOUT ANYWHERE FROM A, A THIRD TO A HALF OF WHAT, UH, WHAT THEY NEED AND FLIPPING IT TO WHOLESALE CUSTOMERS THAT THAT IS JUST THAT ONE CONTRACT.

AND, AND RIGHT.

YOU CAN'T LOOK AT THAT ONE CONTRACT IN AN ISOLATED, UH, WELL, BUT, AND, AND THE CONTRACTS WITH THE INDUSTRIAL DISTRICTS, YOU KNOW, UH, I'M NOT SURE HOW FAR BACK THEY GO, BUT THEY GO BACK PROBABLY TO THE INCEPTION OF THE INDUSTRIAL DISTRICTS.

I UNDERSTAND THAT.

I'M JUST TRYING TO GET A BETTER UNDERSTANDING OF, OF, I'M LOOKING OUT FOR TRYING TO GET MORE MONEY INTO BAWA SO THAT WE CAN DO THINGS LIKE THIS RATHER THAN HAVING TO RIGHT.

REACH SOME.

AND, AND, AND I'M REPRESENTING BAWA AS WELL.

I KNOW, I KNOW.

I, AND THAT'S WHY WE DISCUSSED HAVING A TRANSFER RIGHT.

FROM THE CITY TO BWA TO AFFORD THIS.

SO INSTEAD OF HAVING TWO DIFFERENT ORGANIZATIONS TO OPERATE AND MAINTAIN, YOU TAKE THE SYNERGY OF ONE STAFF.

AND SO TO YOUR POINT, WHEN THERE'S SOMETHING THAT NEEDS TO BE DONE LIKE THAT, YOU CAN MAKE A TRANSFER, BUT YOU'RE STILL TAKING THE SYNERGY OF THE ONE STAFF AS OPPOSED TO BUILDING AN ENTIRE OTHER ORGANIZATION JUST TO SUPPORT BWA.

MY THOUGHT, JUST LOOKING AT IT WAS NET REVENUE WAS PRETTY, THERE WAS PRETTY GREAT DISCREPANCY BETWEEN THE TWO ORGANIZATIONS.

AND, AND AS KAREN SAID, THE CITY HAS, YOU KNOW, THE, THE RETAIL CUSTOMERS AND WE HAVE ALL THE DISTRIBUTION, UM, YOU KNOW, THE ELEVATED STORAGE TANKS, THE FIRE HYDRANTS, THE PIPES, EVERYTHING TO SUPPORT RETAIL DISTRIBUTION THAT BOW DOESN'T HAVE.

YEAH.

UM, MOVING ON FROM THAT, AND AGAIN, MAYBE THIS SHOULD BE AN ORIENTATION THAT WE HAVE JUST SO WE CAN FUNDAMENTALLY UNDERSTAND OUR RELATIONSHIP WITHIN THE CITY OF BAYTOWN AND, AND ALL OF THAT.

'CAUSE I, I'VE BEEN ON THIS A LONG TIME AND IF THERE'S ALWAYS BEEN A MURKY LINE OF, OF THAT, BUT LOOKING AT THE NUMBERS, AND MY MATH STINKS, BUT IT LOOKS LIKE, UM, YOU ON THE SLIDES, WE WERE AT 97%.

IF WE BUMP UP SIX MGD, WE'RE STILL GONNA BE 81, 80 2% EVEN, YOU KNOW, WITHIN THIS TIMEFRAME WITH NO OTHER CUSTOMERS COMING IN.

AND IF AT 85, THAT'S THE TRIGGER TO START FILING WITH TCEQ MM-HMM .

THAT SEEMS BIG TIME PROBLEMATIC.

WELL, YOU HAVE TO FILE A PLAN, RIGHT? AND SO IF WE LOOK AT IT AND WE SAY, WELL, WE'RE GONNA KIND OF BE BUILT OUT BY THEN AND WE'RE NOT GONNA APPROACH A HUNDRED PERCENT FOR 20 YEARS, YOU KNOW, THEN IT, WE JUST FILE A PLAN AND SAY, WE'RE NOT EXPECTED TO REACH A HUNDRED PERCENT, YOU KNOW, DURING THIS TIMEFRAME.

AND SO WE DON'T PLAN ON EXPANDING UNTIL THIS TIME.

YOU JUST HAVE TO FILE A PLAN.

NOT, NOT SAYING YOU'RE ACTUALLY GONNA DO IT, BUT JUST SHOW THAT YOU'RE LOOKING AHEAD.

YOU REALIZE YOU'RE AT, AT OR ABOVE 85% AND YOU'RE AT THE POINT THAT YOU SHOULD BE YES.

SHOW THAT

[00:35:01]

LOOKING AT THIS.

SO YOU RECOGNIZE THE WORLD THAT YOU'RE LIVING IN.

THAT'S THE, THE VALUE OF HIS CHART THAT GOES TO 2028.

HE STILL SHOWS YOU'RE NOT AT QUITE, AT A HUNDRED PERCENT, BUT YOU'RE CLOSE ENOUGH THAT WE ABSOLUTELY NEED TO BE TALKING EXPANSION.

I'M, I'M JUST, YOU KNOW, LOOKING AT IT THAT THERE'S STANDARD GROWTH FACTORED IN THERE.

I MEAN, OBVIOUSLY WE PROBABLY WON'T HAVE ANOTHER BOTTLED WATER FACILITY COME ONLINE.

WELL, BUT NO MEAN, I'M NOT GONNA SAY THAT WE HAVE, I MEAN, MY THING IS WE, I I I SHOULD HAVE ADDED THAT.

WE, WE HAVE HAD DISCUSSIONS AND INTEREST IN, UH, FURTHER EXPANSION OF THAT PLANT.

AND SO, UH, THAT WAS MY, I DID HAVE A LITTLE NOTE ON THE BOTTOM OF THAT, UH, SLIDE THAT, UH, IT, SO THE FIRST NOTE, IT DOES NOT INCLUDE GROWTH IN THE CITY OF BAYTOWN CONTRACTS.

AND THESE ARE, AS THE TITLE SAYS, EXISTING CONDITIONS.

WE HAVE TO REALLY HAVE FRANK DISCUSSIONS WITH THE INDUSTRIAL DISTRICTS TO GET AN IDEA OF WHAT CUSTOMERS THEY'RE COURTING AND TRYING TO BRING IN.

BECAUSE THEY HAVE TOLD US THERE ARE HIGH DE HIGH WATER DEMAND USERS THAT ARE, YOU KNOW, POTENTIAL FOR THIS AREA.

SO, RIGHT.

SO THIS IS THE EXISTING CASE.

IF THEY BRING IN ANOTHER HIGH DEMAND USER, YOU KNOW, WE'RE AT THREE YEARS, WE'RE OUTTA WATER.

SO THAT'S, AND I, I KNOW THAT'S BUILT INTO ALL OF THE CALCULATIONS INTERNALLY.

THIS JUST CAN'T FACTOR THAT IN BECAUSE WE DON'T KNOW THAT.

I HAVEN'T PUT THAT IN.

SO YOU'RE GIVING US KIND OF A BASE CASE, BUT THAT, THAT'S PART OF MY RECOMMENDATION IS TO LOOK AT THOSE DEMANDS AND HAVE THE DISCUSSIONS WITH THE INDUSTRIAL DISTRICTS, UH, ABOUT THEIR CUSTOMERS.

I'M GLAD YOU PUT THIS SLIDE BACK UP.

UH, WHY 1.3%, UH, ASSUMED GROWTH.

WHERE'S THAT, WHERE'D THAT COME FROM? 1.2? UH, THAT CAME FROM OUR, UH, THE A CR STUDY THAT WE DID.

THEY, THEY HAD TO ASSUME A CERTAIN GROWTH.

UM, OR MAYBE WAS THAT IN THE MASTER PLAN? IT WAS, IT WAS BASED ON YOUR MASTER PLAN THAT COME TO THE MICROPHONE, PLEASE.

THAT YEAH.

YEAH.

THANK YOU.

IT WAS, IT WAS IN THE MASTER PLAN.

UH, WE HAD A WATER MASTER PLAN THAT WAS DONE.

AND, AND, AND, SORRY, THIS IS, UH, ME, VICTOR, SHE WAS, UH, COROLLA ENGINEER.

SHE HELPED PUT TOGETHER THE COST ESTIMATES FOR US.

SO I ASSUME THAT'S HISTOR BASED ON HISTORICAL, HISTORICAL DATA AS WELL? YES.

AND THE PROJECTION OF WHAT YOU DID PREVIOUSLY.

AND THAT'S HOW 1.3 WAS CALCULATED.

THERE'S ALWAYS GONNA BE ASSUMPTIONS IN LIFE, BUT THAT'S, THAT'S A, UH, ASSUMPTION BASED ON WHAT WHAT SHE JUST SAID.

AND, AND WE DO WANT TO RE-LOOK AT THAT BECAUSE LIKE I SAID, WE, WE ARE HAVING INCREASED GROWTH NORTH OF I 10 AS WELL AS IN EVERGREEN.

UM, AND SO WE WANNA TAKE INTO ACCOUNT THOUGH, AND WE WANNA REFINE THAT NUMBER THAT THAT WAS AN ESTIMATE LIKE, UH, TWO YEARS AGO.

AND SO, YOU KNOW, WE NEED TO UPDATE AND VALIDATE THAT.

AND THAT'S, THAT'S WHAT I WANT TO, YOU KNOW, DO SOME MORE PLANNING, UH, ANALYSIS.

GO, GO TO THE NEXT SLIDE WITH THE BOTTLING THING.

NOW THAT I UNDERSTAND.

SO ARE THEY, IN, WHAT PHASE ARE THEY IN? THEY ARE, THEY'RE UNDER CONSTRUCTION.

THEY HAVE NOT, UH, COME ONLINE YET.

I I THINK THEY'RE STILL A COUPLE OF, MAYBE TWO, THREE MONTHS AWAY FROM COMING ONLINE WITH THE FIRST FOR PHASE ONE.

WITH PHASE ONE? CORRECT.

AND THEN, AND THEN, AND THEY, THIS IS THEIR PLAN OVER THE NEXT COUPLE YEARS.

THIS IS, THIS IS AS OF JANUARY 1ST AND EACH YEAR THEIR PLAN, RIGHT? THIS, THIS IS THE CONTRACT WE HAVE WITH THEM RIGHT NOW.

OR WITH CCID ONE.

AND REMIND US AGAIN, THIS IS NIAGARA.

IS THAT THE NAME OF THE COMPANY? AND, AND, UM, THIS IS AT UNOFFICIALLY.

IS THIS IN THE TGS COMPLEX, RIGHT? YES.

WE DON'T WANT TO HINDER DEVELOPMENT BY NOT HAVING WATER AVAILABLE.

THE ONE YOU COULDN'T FIND .

NO, I KNOW WHERE TGS IS.

I JUST COULDN'T FIND THE PLANT.

I APPRECIATE YOU PUTTING THIS ALL TOGETHER AND APPRECIATE ALL THE WORK YOU GUYS DO.

I JUST WANNA MAKE THAT CLEAR.

I, I DON'T OFTEN ASK QUESTIONS AS Y'ALL KNOW.

AND SO I, I, I, UH, I KNOW THIS IS A LOT, UH, TO TAKE IN AND, UM, IT, IT'S A SIGNIFICANT, UM, YOU KNOW, UNDERTAKING.

SO LIKE I SAY, WE JUST OPENED THE PLANT AND, UH, NOW WE'RE TALKING ABOUT EXPANDING.

SO IT'S, AND, AND FOR ME, HAVING BEEN HERE ALMOST 50 YEARS, THIS IS EXCITING IN SO MANY WAYS ON THE MACRO SCALE FOR OUR CITY.

YES.

AND WE'VE JUST GOT A JOB TO DO ALONG WITH THE CITY, RIGHT.

AND, AND TO PROVIDE THE WATER AND, AND THIS WATER SUPPORTS DEVELOPMENT OF THE ENTIRE AREA, SO, RIGHT.

UH,

[00:40:01]

AND THAT THAT'S THE PRIMARY.

AND, AND YOU KNOW, WITH 99 BEING BUILT OUT THERE AND RIGHT, THAT WHOLE, ALL THE, I SUSPECT THIS 1.3 MAY BE A LITTLE LIGHT, HONESTLY.

'CAUSE YES.

AND AND THAT'S WHY WE WANNA LOOK AT IT CLOSER AND LOOK AT IT NOW, LIKE I SAY, THE LAST ESTIMATE WAS A COUPLE YEARS AGO.

SO WILL YOU BE COMING TO US WITH A, UH, PROPOSAL TO ENGAGE AN ENGINEER OR DOES THIS FALL BELOW OUR THRESHOLD? UM, I, I DON'T HAVE A PROPOSAL YET.

IF IT'S, UH, IF IT'S MORE THAN 50,000, THEN I'LL COME TO YOU.

UH, IF IT'S LESS, THEN I WON'T HAVE TO, UH, I, I JUST WANTED TO GET YOUR CONCURRENCE THAT THIS IS THE DIRECTION YOU WANT TO GO IN AND, AND SO IF IT'S LESS THAN 50,000, THEN I COULD JUST START THAT, YOU KNOW, UH, RIGHT AWAY.

BUT WE WOULD COME TO YOU ONCE WE HAVE SOME RESULTS OF THAT STUDY.

AND I DON'T THINK IT WOULD TAKE THAT LONG.

IT WOULD BE A MATTER OF MONTHS, YOU KNOW.

SO DO YOU HAVE, DO YOU HAVE MY CONCURRENCE FOR WHAT IT'S WORTH? GO AHEAD.

DO WHO SUPPLIES MONT BELLEVUE? ALL OF MONT BELLEVUE? IS IT, DO WE DO ALL OF IT OR WE JUST DO A PIECE OF IT? WE DON'T.

OH, THEY'RE ON A SEPARATE SYSTEM ON WELL WATER.

IT'S NOT, THEY'RE NOT OUR CUSTOMER.

SO THEIR GROWTH IS NOT GONNA AFFECT ANY OF THIS THINGS? NO.

NO.

VOLUNTEERS ARE DIFFICULT.

DOES ANYONE ELSE HAVE ANY QUESTIONS? WELL, AS THIS WAS JUST A DISCUSSION ITEM, I DON'T BELIEVE THERE'S ANY ACTION TO BE TAKEN.

AND SO WE'LL MOVE ON.

THANK YOU VERY MUCH.

AND WE'LL MOVE TO THE LAST ITEM ON THE AGENDA.

THE MANAGER'S

[a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, January 19, 2022, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. ]

REPORT.

MADAM PRESIDENT AND DIRECTORS, A HANDFUL OF THINGS BEFORE I GET TO OUR NEXT MEETING, IF YOU WILL.

FIRST OF ALL, WE TALKED ABOUT YOUR INCREDIBLE SALARIES, UM, BEFORE THE MEETING STARTED.

AND SO I HAVE TO START BY THANKING ALL OF YOU FOR SERVING AND ACTUALLY THE HISTORY THAT YOU BRING TO IT WHEN FRANK GETS INTO THE DETAIL AND WE GET INTO THE FINANCES AND THE OPERATIONAL ISSUES.

OBVIOUSLY WHEN YOU GET ALL THAT, THE NUMBERS ARE BIG AND WE HAVE TO, BUT IT COMES RIGHT DOWN TO WE NEED TO FILE A REPORT AND WE NEED TO STUDY AND PLAN FOR THAT.

BUT IMAGINE IF WE DIDN'T HAVE PEOPLE SUCH AS YOURSELF THAT HAVE BEEN DOING IT FOR AS LONG AS YOU HAVE.

SO I NEVER WANT TO TAKE THAT FOR GRANTED THAT WE'VE GOT, VOLUNTEERS ARE DIFFICULT, WHETHER THEY'RE OUR BOARDS OF COMMISSIONS, YOUR CHURCH, OR WHEREVER IT IS.

SO I DO WANT TO THANK EACH AND EVERY ONE OF YOU FOR YOUR SERVICE.

UH, YOU MIGHT NOTICE I'M NOT NICK AND, UM, I, I DO WANT TO THANK NICK FOR ALL THAT HE'S DONE FOR OUR CITY, ACROSS OUR CITY, OUR COMMUNITY.

NOT JUST, UH, HERE ON THE STAFF, BUT WHAT HE DID, UNITED WAY ROTARY AND MANY THINGS.

THE WORK THAT HE DID WITH FINANCE AND PWE BAWA AND THE BOARDS THAT HE SET.

I, I DO WANNA STOP AND, AND THANK HIM AND, AND WISH HIM WELL IN GEORGETOWN.

HE STARTED THERE DECEMBER 6TH.

I HEARD A RUMOR.

THIS IS YOUR LAST MEETING, KAREN? YES.

IS IT WHAT? WOW.

WHO WROTE IT FOR THAT? THIS IS KAREN'S LAST BAWA MEETING, AS WELL AS SHE MOVES ON TO BE THE CITY ATTORNEY IN FRIENDSWOOD.

AND SO WE WANT TO THANK HER AGAIN FOR ALL THAT SHE HAS DONE ACROSS THE BOARD, WHICH IS A LOT, YOU KNOW, FOR ALL OF OUR BOARDS AND FOR ALL OF OUR CITIES.

SO, K KAREN, THANK YOU SO MUCH.

YES.

THANK YOU FOR EVERYTHING.

WE DON'T COLLECTIVELY FOR BAWA.

WE CAN'T DO THE THINGS THAT WE DO FOR YOU WITHOUT THE STAFF AND, AND I DON'T THINK YOU WANT TO CREATE ANOTHER STAFF FOR BAWA TO DO THE THINGS THAT WE HAVE.

THERE'S A LOT TO IT.

BUT FRANK, TO YOU AND YOUR PWE CREW AND UH, VICTOR FOR YOU AND THE FINANCE CREW THAT'S OUT THERE, KAREN, TREVOR, THE LEGAL CREW, OUR CITY CLERK, ANGIE, THANK Y'ALL SO MUCH FOR WHAT Y'ALL DO.

YOU MAKE THE CITY LOOK VERY, VERY WELL.

THANK YOU FOR THE SUPPORT THAT Y'ALL GIVE.

BAWA STERLING TOLD ME BEFORE THE MEETING AND I JUST WANT TO, UH, LET YOU KNOW THAT THERE WE HAVE A BA SUPERINTENDENT THAT'S AGREED TO COME ON BOARD.

HIS NAME IS MICHAEL GAY.

HE STARTS JANUARY 10TH.

HE HAS A TEXAS LICENSE.

HE'S BEEN HERE LICENSED, HE'S IN NEW YORK RIGHT NOW.

SO HE'S COMING BACK AND WE WELCOME HIM BACK 'CAUSE IT'S REAL COLD UP THERE.

SO WE'RE LOOKING FORWARD TO, TO MICHAEL JOINING THE TEAM.

WE WISH ALL OF YOU A VERY MERRY CHRISTMAS AND A HAPPY NEW YEAR.

IF WE'RE BUSY, IT'S HARD TO SLOW DOWN IN CITIES AND ENJOY THE HOLIDAYS, BUT WE WISH FOR YOU AND YOUR FAMILY'S MOST JOY DURING THIS SEASON OF THE YEAR.

AND WITH THAT, OUR NEXT MEETING IS SCHEDULED FOR WEDNESDAY, JANUARY 19TH, 4:30 PM HERE IN THE COUNCIL CHAMBERS.

MADAM PRESIDENT, THAT'S ALL I HAVE.