[00:00:20]
I'D LIKE TO WELCOME YOU TO THIS, UH, MEETING OF THE BAYTOWN AREA WATER AUTHORITY.
CALL THE MEETING TO ORDER AND ANNOUNCE THAT WE HAVE A QUORUM.
[a. Consider approving the minutes of the Baytown Area Water Authority Regular Meeting held on May 17, 2023. ]
WILL BE TO CONSIDER APPROVING THE MINUTES OF THE AUTHOR'S REGULAR MEETING HELD ON MAY 17TH, 2023.DRAW A MOTION, MOVE TO APPROVE.
MOTION TO SECOND QUESTIONS OR DISCUSSION, HEARING NONE.
[a. Receive and discuss the Baytown Area Water Authority's Fiscal Year 2023-24 Proposed Budget.]
RECEIVE AND DISCUSS THE AUTHORITIES FISCAL YEAR 20 23, 24.BOARD, I, LET ME FIRST START BY SAYING THAT, UH, THERE WAS A MIX UP, AND IT IS COMPLETELY MY FAULT.
UM, I MISUNDERSTOOD, UH, THE DOG ATE MY HOMEWORK IS THE BOTTOM LINE.
AND, UM, I AM PRESENTING THE BUDGET, BUT I DO NOT HAVE A PRESENTATION FOR YOU.
I'M GONNA GO OVER WHAT IS IN YOUR PACKET.
UM, BUT IT'S STILL THE BUDGET.
UM, IF YOU NEED ME TO PUT ANYTHING IN A POWERPOINT AND SEND IT TO YOU SEPARATELY, I CAN DEFINITELY DO THAT.
UM, BUT, UH, UH, MY EXCUSE IS THAT THE DOG GET TO HOMEWORK, AND THIS IS JUST COMPLETELY MY FAULT AT THIS POINT.
UM, CAN Y'ALL SEE IT ON YOUR, NO.
YOU JUST HAVE TO KEEP GOING DOWN.
IT SHOULD BE PAGE 17, UH, SORRY, PAGE, UH, 19 IN YOUR PACKET.
SO, SO, UM, WE ARE STRUCTURALLY BALANCED, WHICH IS A FANTASTIC THING.
IT LOOKS, UH, PAUL, IT LOOKS LIKE IT'S IN AN OKAY PLACE WITH A, UM, UH, TOTAL REVENUE OF APPROXIMATELY 16.5 MILLION.
UM, THAT IS, UH, AN INCREASE FROM 15.3 FROM THE PREVIOUS YEAR.
UH, EXPENDITURES, UM, HAVE GROWN OR HAVE ACTUALLY GONE DOWN BUDGET WISE, UH, FROM 16.5 MILLION IN 23 DOWN TO 16 MILLION IN, UH, 24 PROPOSED, UH, WITH A ENDING WORKING CAPITAL, UH, WHICH YOU CAN SEE GROWS FROM 1.4 MILLION OR 1.5 MILLION UP TO 4.2 MILLION, UM, AT THE END OF THE YEAR, PROPOSED FOR FY 24 WITH DAYS OF OPERATION EXPENDITURES, UH, 156 IN THE RESERVES.
SO OVERALL, IT'S IN A VERY GOOD SPOT.
UM, I WOULD TELL YOU THAT THE GROWTH IN THE REVENUE IS, IS GREAT TO SEE AS WE DO HAVE EXPENSES COMING UP.
UH, BUT OUTSIDE OF THAT, IF WE WANT TO JUMP INTO MORE OF THE DETAILED PIECES, THOSE ARE ON THE FOLLOWING PAGES, WHICH I DON'T MIND JUMPING INTO AT THIS POINT.
UM, BUT THAT'S ALL THAT I HAVE FOR THE BOARD AT THIS POINT.
IF YOU, DO YOU WANT TO GO AHEAD WHERE, WHERE'S THE BRITISH GUY, VICTOR? YEAH, HE IS.
NO, HE, THERESA IS THE DIRECTOR OF FINANCE, AND, UH, SHE OVERSEES ALL THE FINANCIALS.
AT THIS POINT, THIS WAS THE MIX UP WAS THAT WE HAD THREE PRE BUDGET PRESENTATIONS GOING ON THIS WEEK.
THE, UH, IT WAS A MISUNDERSTANDING ON WHICH WAS BEING PRESENTED, WHICH IS THE MISUNDERSTANDING IS ON MY PART.
AND I DID NOT PREPARE THESE SLIDES FOR THIS, UH, PRESENTATION.
THAT IS JUST THE TRUE MIX UP AT THIS POINT, BECAUSE I, I DON'T THINK I GOT AN EMAIL, BUT ALL IT HAD WAS LIKE THIS PIECE, IT WAS JUST A TITLE PAGE.
IT WASN'T A PACKET OR ANYTHING.
I DIDN'T SEE ANY OF THE BUDGET OR ANYTHING.
CAN YOU MAKE IT A LITTLE EASIER FOR US IN THE FUTURE, PLEASE? MM-HMM
IT'S JUST SOMETIMES IF THE, IF THE PACKAGE IS TOO LARGE, I CAN'T EMAIL IT TO YOU.
SO THAT'S WHY WE PROVIDE THE LINK.
WELL, UH, BASED ON WHAT YOU'RE SAYING AND, AND WHAT WE'RE LOOKING AT HERE WITH THE PAPERWORK, IS THERE ANYTHING, I REALIZE YOU DON'T HAVE A QUOTE UNQUOTE PRESENTATION PRESENTATION, CORRECT.
BUT IS THERE ANYTHING, UH, OUT OF THE ORDINARY, GLARING, UH, SOMETHING UNUSUAL THAT YOU THINK YOU NEED TO BRING TO OUR ATTENTION? NO.
BUT IF, UH, UH, HONESTLY, IF YOU GO BACK TO PAGE 19 OF, OF THE, THE PACKET, UM, I'M HOPING EVERYBODY CAN SEE IT ON THEIR SCREEN.
UM, THE, THE, THE NICE PART IS THAT STERLING AND HIS TEAM HAVE DONE A VERY GOOD JOB OF KEEPING EXPENDITURES FLAT, KNOWING THAT WE HAVE A LOT OF CAPITAL EXPENDITURES AHEAD OF US AT THIS POINT.
SO YOU CAN SEE THAT PERSONNEL STAYED STEADY AT THIS POINT IN TIME.
UM, AND IF I'M MISSING SOMETHING ELSE, PLEASE STEP IN AT THIS AT ANY POINT.
[00:05:02]
UM, CAN HIT THE LITTLE ARROW AT THE TOP, MAYBE.UM, LLOYD, ARE WE ABLE TO GET THE, THE PRESENTATION UP ON THE BIG SCREENS? NO, I DON'T SEE THAT.
SO THE, UH, EXPENDITURES HAVE STAYED FLAT.
AND IN FACT, THE OPERATING EXPENDITURES, WHEN IT COMES DOWN TO PERSONNEL AND SERVICES HAVE DECREASED FROM FY 23 TO FY 24 FROM 10.3 MILLION TO 9.9 MILLION.
AND THEN THE, UH, UH, CAPITAL, UH, EXPENDITURES HAVE DECREASED FROM 16.48 DOWN TO 16.
AND SO WE ARE SEEING A DECREASE OR A FLATNESS IN EXPENDITURES OVERALL, WHICH IS CONTRIBUTING TO A HEALTHIER FUND BALANCE, UH, WHEN IT COMES DOWN TO IT.
UH, WHICH IS WHY WE'RE STAYING AT 156 DAYS, UH, IN RESERVES AT THIS POINT.
AND SINCE THIS ITEM WAS JUST A, UH, ITEM TO RECEIVE AND DISCUSS, WE DON'T NEED TO TAKE ANY THAT'S CORRECT.
AND I WILL DO A BETTER JOB ON MAKING SURE THEY HAVE A POWER POINT AT THE NEXT MEETING.
SO, WE'LL, ARE WE EXPECTED TO PASS IT OR NO? THE NEXT MEETING? NO, IT'S, IT'S A DISCUSSION AT THIS POINT.
SEE IF YOU HAVE ANY CONCERNS OR THINGS THAT Y'ALL WOULD LIKE TO TALK ABOUT.
CAN YOU GO OVER WHAT'S ON PAGE 18? UM, THE CAPITAL IMPROVEMENT PROGRAM, THE CIP? YEAH.
'CAUSE THAT'S PART OF THE BUDGET TECHNICALLY, ISN'T IT? IT IS PART OF THE BUDGET, YES, SIR.
SO, UM, THESE ARE JUST THE TECHNICAL NOTES THAT GO WITH EVERYTHING.
UH, THE FIRST ONE UP THAT YOU'LL SEE UP THERE IS THE BOTTLE OF BACKWASH AND, UH, AND, UH, DECAMP PUMP REPLACEMENT.
AND SO WHAT, WHAT IS HAPPENING HERE IS STERLING IS OUTLINING ALL THE PIECES THAT ARE GONNA BE, UH, THE CIP IS GOING TO ADDRESS.
UH, THE BIGGEST ONE THAT'S YOU'LL SEE ON THERE IS THE WA UH, RAW WATER REHABILITATION FOR 13.7 MILLION.
AND THEN THE, THE BEAST, UH, WATER PLANT PHASE TWO EXPANSION FOR 5.9 MILLION.
AND I SHOULD HAVE, HERE'S STERLING.
AND, AND I'M GOING TO INTERJECT THAT ALL, ALL FOUR OF THESE THINGS ARE ONGOING AT THE PRESENT TIME.
NO, LLOYD, I DON'T THINK YOU HAVE IT ON THAT PACKET.
THAT'S THE, UH, PACKET THAT THEY HAVE.
SO, UM, AND FEEL FREE TO STOP ME IF YOU HAVE ANY SPECIFIC QUESTIONS ABOUT THE, THE PROJECTS.
UM, BUT THE, THE ITEMS IDENTIFIED ARE, UM, ITEMS PLANNED FOR, UH, FYI 23, UM, OR FY 24, I'M SORRY.
UM, THE, UH, BACKWASH, DECAMP PUMP, UM, REPLACEMENT, UM, IS A PROJECT, UH, RELATED TO THE CURRENT BACKWASH PUMPS.
UM, THEY ARE, THERE'S, THERE'S TWO UNITS.
THEY'RE, UH, UH, REACHED PAST THEIR USEFUL LIFE AND IN NEED OF REPLACEMENT.
AND THE DECAMP PUMP STATION IS, UM, WE HAD A STUDY DONE, UM, EARLIER IN THE, UH, RAW WATER, UH, REHAB PLANNING PHASE IN THE PER.
UM, AND THAT'S CALLING FOR, UH, UPSIDES OF THE DECAMP PUMP STATION.
UM, WE HAVE A, A ISSUE WHERE THE SLUDGE, UM, BASICALLY BUILDS UP OVER TIME AND CAUSES, UM, ISSUES WITH THE PUMPS AT THE DECANT PUMP STATION.
UM, THIS IS THE WATER THAT'S IN THE LAGOONS THAT ARE DECANTED OFF TO GO BACK INTO THE PROCESS TO BE RETREATED.
UM, AND SO, UM, THIS IS PLANNED TO START DESIGN AND FY 24 IS THE SCOPE OF THAT PROJECT.
UM, THE BALLER ADMIN BUILDING IS A, UM, SOME MINOR REMODELING WORK RELATED TO THE LOCKER ROOM.
UM, THE LOCKER ROOM IS NOT, NEVER BEEN UPDATED, SO IT'S ALL ORIGINAL.
UM, AND THE HVAC, UM, HAS, UM, CAUSED SEVERAL REPAIRS IN RECENT YEARS AND IN NEED OF REPLACEMENT.
SO THAT'S WHAT THE WORK SCOPE IS IN THAT PARTICULAR PROJECT.
UM, THE RAW WATER, UH, REHABILITATION PROJECT IS THE PROJECT, UM, THAT WE ALLOCATED FOR DESIGN IN THIS CURRENT YEAR.
SO IT'S GONNA GO TO CONSTRUCTION AND FY 24, UM, THAT'S REPLACEMENT OF THE DECANT, I'M SORRY, THE, UH, UH, CANAL AND THE FOUR BAY PUMP STATION PUMPS AT, AT BOTH PUMP STATIONS.
UM, AND THEN THE BALL EAST SURFACE WATER, UH, PLAN TWO EXPANSION.
[00:10:01]
PREVIOUS MEETINGS, WE HAVE A OWNER'S ADVISOR NOW, UM, AND WE'LL, YOU KNOW, START THE PROCESS AS FAR AS COMING WITH THE NEGOTIATING WITH THE DESIGN BUILD TEAM, UM, AND FY 24 AS WELL.SO THAT'S WHAT THIS ALLOCATION IS RELATED TO.
AND ONE OF THE ASPECTS WITH ALL THESE, AND, AND I BELIEVE ALL THIS IS FUNDED THROUGH DEBT SERVICE, CORRECT.
AND SO THERE'S A DEBT SERVICE, UH, PLAN TO ADDRESS ALL THE DEBT THAT WE HAVE WITH BA OVER THE NEXT, UM, UH, FIVE YEAR PLAN, I BELIEVE.
AND IT'S THREE YEARS WITH BAWA, OR THAT MIGHT, I MIGHT BE CONFUSING WITH WATER AND WASTEWATER, THE DEBT, BECAUSE I THINK 70 MILLION WITH BA OVER THE NEXT FIVE YEARS TOTAL, I BELIEVE IT'S THREE YEARS.
SO NOT RELATED TO THIS, BUT, UM, REMEMBER THAT WINTER THAT GOT REALLY COLD? YEAH, WE WERE GONNA MAKE A LOT OF IMPROVEMENTS TO THE PLANTS, BUT WE SAID, HEY, WE'RE NOT, WE DON'T WANNA SPEND OUR MONEY, WE WANNA APPLY FOR GRANTS AND THAT KIND OF THING SO WE CAN REALLY UPDATE AND MAKE IT MORE RELIABLE.
I NEVER HEARD ANYTHING ABOUT WHAT HAPPENED WITH ANY OF THAT GRANT WRITING THAT WE DID.
SO THE GRANTS THAT CAME OUT, ACTUALLY, UM, A LOT OF THOSE WERE RELATED TO, UM, LIKE LOW INCOME AREAS.
SO WITH BALL BEING A WHOLESALER, UM, IT, IT WASN'T ANY GRANTS AT LEAST THAT CAME OUT THAT WE WERE, UH, AVAILABLE TO APPLY FOR IN RELATION TO THAT ROUND OF FUNDING THAT WE HAD PREVIOUSLY SPOKEN OF.
WE HAD HAD HOPES THAT WE WOULD BE ELIGIBLE, BUT ONCE WE GOT INTO, UM, THE DETAILS, UM, WE FOUND THE BALL WASN'T GONNA BE ELIGIBLE, WASN'T GONNA SCORE HIGH ENOUGH TO BE ELIGIBLE FOR THE FUNDS.
SO IF, IF THAT'S THE CASE, THERE WAS A, A PEG LIST OF THINGS THAT WE HAD WANTED TO IMPROVE ON.
ARE WE TACKLING A FEW OF THOSE ISSUES IN THIS BUDGET EACH YEAR UNTIL WE CAN, YOU KNOW WHAT I'M SAYING? NOT, MAYBE NOT DO 'EM ALL, BUT, SO THE, THE ISSUES RELATED TO THE FREEZE SPECIFICALLY.
UM, ONE OF THE MAJOR ONES WERE, UM, THE VALVES ON THE GROUND STORAGE TANKS.
UM, IF YOU RECALL, UH, WITH THE FILTER SC PROJECT, WE DID A CHANGE ORDER IN THAT PROJECT, UM, TO INCO INCORPORATE, UH, TWO OF THE TANKS.
AND SO THAT WORK HAS, HAS BEEN DONE, UM, FOR TWO OF THE THREE TANKS, UM, ALREADY.
SO WE WERE, UM, STILL PROACTIVE IN TRYING TO GET THE, UH, THE ISSUES ADDRESSED PROMPTLY.
AND I THINK SOME CHEMICAL BLINDS FROZE UP TOO, IF I'M NOT.
AND IF YOU RECALL, DURING THAT TIME, WE HAD THAT, WE HAD A CHEMICAL FEE PROJECT THAT WAS GOING ON, SO A LOT OF THAT WAS TAKEN CARE OF AT THE TIME.
'CAUSE WE HAD A CONTRACTOR ON SITE, AND SO WE WERE STILL, YOU KNOW, IN WARRANTED.
WE HADN'T ACCEPTED THAT WORK YET.
SO THAT ACTUALLY A LOT OF THAT FELL ON THE, THE CONTRACTOR TO REPLACE.
AND SO DID WE, DID WE LIKE ENCASE IT INSIDE OF A BUILDING OR WHATEVER TO KEEP IT OUTTA THE WEATHER OR, SO WHAT WE DID WAS WE END UP WRAPPING, UH, THE LINES, SO THEY'RE ALL LIKE INSULATED, PUT THE FOAM INSULATION AROUND THE LINES, UM, INSULATED THE, THE TROUGHS WITH HAY, UM, TO TRY TO, YOU KNOW, PROTECT FROM COLD TEMPERATURES.
SO WHEN THE NEXT EVENT CAME, ONE OF THE MOST RECENT, WE DIDN'T HAVE ANY ISSUES WITH FROZEN LINES.
SORRY TO BRING, BE DREDGING UP TO PASS, BUT MM-HMM.
ALRIGHT, DOES ANYONE ELSE HAVE ANY QUESTIONS OR CONCERNS? UM, WE DID HAVE ONE OTHER, UH, ITEM TO, I GUESS, UH, BRING TO YOU GUYS IN RELATION TO WHAT JASON WAS PRESENTING ON THE BUDGET.
UM, WHEN YOU ARE ABLE TO GO THROUGH IT, YOU WILL SEE THAT THERE IS A PROPOSED, UH, 6% RATE INCREASE, UM, FOR THOSE THAT, THAT WERE NOT HERE PREVIOUSLY, WE DID A RATE STUDY BACK IN 2020, UH, WITH COROLLA ENGINEERS.
UM, AT THAT TIME THEY LOOKED AT ALL OF THE, UM, ALL OF THE EXPENDITURES REVENUES AND MADE A, A RECOMMENDATION ON, UM, A RATE INCREASE TO, UH, COVER THE, THE DEBT SERVICE AND, AND THE, UH, PENDING BALL EAST PROJECT, ET CETERA.
UM, AND SO I HAVE A FEW SLIDES HERE JUST TO KIND OF REFRESH EVERYBODY'S MEMORY, UM, ON THAT PARTICULAR, UH, PRESENTATION.
SO, UM, WHAT WE'LL GO, GO OVER, UM, REFRESH WAS THE ASSUMPTIONS AT THE TIME, UM, THE GOALS, UH, THE FINANCIAL PLAN, UH, THE PROPOSED RATES FOR THIS YEAR AND, UM, YEARS COMING,
[00:15:01]
AND THE, UH, THE BILL IMPACTS OF THE, UH, RATE INCREASE.AND THEN ANY, UH, VARIABLES FOR YOU TO CONSIDER.
SO YOU HAVE, YOU KNOW, ALL INFORMATION.
UM, SO THIS WAS THE METHODOLOGY THAT, UH, COROLLO USED, UM, AT THE TIME.
I WON'T GET HEAVILY, UM, INTO THIS, BUT THIS IS THE, THE MODEL IN WHICH THAT THEY USE WHEN THEY'RE FORMULATING A, A, A RATE STUDY AND, AND ALL THE VARIABLES AND FACTORS THAT THEY HAVE TO ACCOUNT FOR.
UM, SO THE ASSUMPTIONS THAT WERE MADE WAS THAT WE WOULD HAVE, UH, ANNUAL GROWTH AT ABOUT 1%, UM, THAT WE WERE GONNA HAVE COST ESCALATION AND, UH, GEN DUE TO GENERAL LABOR AND INFLATION.
UM, WE ASSUMED THAT RAW WATER COST WAS GONNA BE 2.8% ANNUALLY, UM, PRIOR TO THAT TIME AND PRIOR TO THE PANDEMIC, THAT WAS CONSISTENT WITH WHAT WE HAD SEEN, UH, AS FAR AS RAW WATER COSTS FROM THE CITY OF HOUSTON.
UM, ONCE THE PANDEMIC HIT, WE ACTUALLY RECEIVED HIGHER RATE INCREASES THAN WHAT WAS, UH, ORIGINALLY PROJECTED.
SO JUST KIND OF WANTED TO, UM, HIGHLIGHT THAT ON THE, THE NEXT.
UM, SO WE RECEIVED A, A 12 POINT, UH, 2% INCREASE, UM, ON SEPTEMBER 21ST.
I MEAN SEPTEMBER OF 2021, I'M SORRY, UH, A 5.9% INCREASE IN APRIL OF 2022.
AND THEN THIS YEAR WE RECEIVED A 9.2% INCREASE, UM, FOR 2023.
UM, THE FINANCIAL TARGETS, UM, THAT CITY OR BALL STRIVES FOR AS A 90 DAY RESERVE, UM, AND THE CAPITAL RESERVE AS WELL.
AND THE DEBT SERVICE RATIO AT THE 1.25% OR ONE 1.25 RATE.
UM, SO THE, UH, STUDY EVALUATED THESE THREE, UH, FINANCIAL PERFORMANCE METRICS, UM, AND THAT'S WHAT THE, THE BULK OF IT IS, IS BASED OFF OF.
UM, SO THIS WAS THE PREVIOUS, UM, THE SLIDE FROM THE PREVIOUS YEAR WHEN THEY PRESENTED, UM, JUST TO KIND OF SHOW YOU THE, THE TWO THINGS THAT WE DISCUSSED, WHICH WAS TO DO NOTHING AND WHAT THE IMPACT OF DOING NOTHING WAS VERSUS DOING A 6% AND WHAT THE IMPACT OF DOING THE 6% IS.
SO THAT'S WHAT YOU SEE, UH, MENTIONED ON THIS SLIDE.
UM, AS YOU SEE IN, IN FY 26, UM, IT, IT WAS GOING NEGATIVE.
SO FY 23, UM, THROUGH 27 IS WHAT THE, THIS IS THE PROJECTED, OR THE RECOMMENDED, I SHOULD SAY, UH, REVENUE INCREASES, UM, THAT ARE NEEDED.
AND IT ALLOWS YOU TO SEE WHAT THE FINANCIAL FORECASTS ARE RELATED TO THOSE ITEMS OR TO THOSE PERCENTAGES I SHOULD SAY.
SO HERE'S A MORE, UM, CLOSER LOOK AT WHAT WE'RE CHARGING NOW TO BWA AND OTHER DISTRICTS AND WHAT THE PROPOSED FOR 20 23, 24 WOULD BE, UH, WITH THE 6%.
UM, SO FOR ALL OTHER, UM, DISTRICTS, THEY'RE CURRENTLY PAYING 3 46, IT WOULD GO TO, UM, 360 7 AND, UH, CITY OF BAYTOWN WAS PAYING 3 26, IT WOULD GO TO 3 44.
AND THEN THIS IS THE SAME SLIDE, BUT IT ALSO SHOWS WHAT IT WOULD BE FOR, UM, FY 25 AS WELL.
DO YOU HAVE ANY INFO FOR THE PRIOR COUPLE OF YEARS FROM THIS, SAY 20 AND 21? YES.
UH, I DIDN'T HAVE IT PREPARED IN, UH MM-HMM.
UM, BUT CAN, BUT YOU SAID, YOU SAID THERE WAS A, THERE WAS A 12%, A 5.9 AND A 9.2, OR THAT WAS, OH, YOU, YOU, YOU'RE REFERRING TO THE CITY OF HOUSTON? YEAH, BUT WHAT, WHAT THE RATES WERE WE, DID WE MOVE BASED ON THAT OR HAVE WE HELD, UM, PRIOR TO 2020, WE HAD NOT RAISED THE RATES.
UH, FOR, FOR SEVERAL YEARS MM-HMM
UM, AND SO WE INITIALLY DID A 3%, UM, INCREASE, AND THEN THE SIX, THE, THE FIRST YEAR OF THE 6% WAS LAST YEAR.
IF YOU, IF YOU READ THE CONTRACT FROM THE CITY OF HOUSTON, IT'S BASED ON, AND, AND IT, IT'S A FORMULA BASED ON INFLATION MM-HMM
SO WHEN YOU HAVE INFLATION GOING CRAZY, THEN OUR RATES GO UP SURE.
THERE'S NO NEGOTIATION, RIGHT? YEAH.
AND THEY'RE SO FAR TO GET THAT WATER SO FAR OUTSIDE THE CITY OF HOUSTON.
[00:20:01]
UM, THIS IS JUST USING LIKE A, A AVERAGE AUGUST MONTH, WHICH IS TYPICALLY GONNA BE THE PEAK, UM, AS FAR AS HOW MANY GALLONS, UH, EACH INDIVIDUAL USER OR EACH INDIVIDUAL CUSTOMER USES, UH, WHAT THE CURRENT RATE IS AND WHAT THE PROPOSED RATE WOULD BE.UM, SO THAT'S WHAT YOU'LL SEE IN THIS, UH, ACTUAL SLIDE.
UM, SO WE KIND OF ANTICIPATED, YOU MAY HAVE SOME QUESTIONS ABOUT WHAT, WHAT ARE A 6% INCREASE AND, YOU KNOW, WHAT VARIABLES OR FACTORS DO WE NEED TO CONSIDER, UM, HOW DOES IT AFFECT B OR HOW DOES IT AFFECT THE CITY OF BAYTOWN? SO WE JUST PUT ALL THAT INFORMATION ON THIS PARTICULAR SLIDE, UM, WHICH JUST KIND OF EXPLAINS WHAT THE TOTAL IMPACTS OF THE, THE 6% IS.
SO, UM, CURRENTLY THE B EAST EXPANSION, UM, COST IS ESTIMATED AT A LITTLE OVER $68 MILLION.
UM, HOUSTON HAS INCREASED, UH, RAW WATER RATES, UH, MUCH HIGHER AFTER THE PANDEMIC.
UM, AS PREVIOUSLY NOTED, UM, BALL HAS GOT CURRENT CONTRACTUAL OBLIGATIONS, UM, THAT IT, IT NEEDS TO FEEL, UM, AND THE IMPACT ON BALA'S ABILITY TO FUND THE CURRENT AND THE FUTURE PROJECTS.
SO OUTSIDE OF BWA EAST OVER THE NEXT FIVE YEARS, IT'S ESTIMATED AROUND 26 MILLION, UM, FOR THE, THE CAPITAL PROJECTS.
AND THEN, YOU KNOW, ANY IMPACTS ON BALL'S, OTHER, OTHER CUSTOMERS AS FAR AS, UM, YOU KNOW, WITH A RATE INCREASE, UM, AS FAR AS THE CITY OF BAYTOWN, UM, ITS IMPACTS ON ITS CURRENT AND, UH, FUTURE CITY WATER AND SEWER RATES, UM, PENDING, UH, LEGAL ORDER, UH, THAT IS UPCOMING RELATED TO SANITARY SEWER OVERFLOWS, UM, THAT YOU MAY HAVE SEEN IN THE, THE NEWS.
UM, AND THEN THE, UH, IMPACTS ON ITS CUSTOMER, CUSTOMER BASE AND THEN THE, UH, THE CITY'S CURRENT CONTRACTUAL OBLIGATIONS.
SO ON THIS PARTICULAR SLIDE, THIS KIND OF GIVES YOU A, UH, PROJECTION FORWARD AS FAR AS WHAT BALL'S CONTRACTUAL, UH, CAPACITY IS AND WHAT WE'RE, WHAT OUR COMMITMENTS ARE.
UM, SO IF YOU PICK UP IN, IN 2023, UM, THE CITY OF BAYTOWN, UM, NEEDS ABOUT 26.9, UH, MGD OF CONTRACTUAL, UH, CAPACITY OF THE 31.878, WHICH IS SHOWN AT THE TOP.
AND THAT'S BETWEEN BOTH FACILITIES.
SO THE MAIN BALL PLANT AND BALL EAST.
UM, BALLS, OTHER CUSTOMERS EQUATE FOR 2.38 MGD, UH, AS WELL, WHICH TOTALS TO 29 POINT, UH, TWO EIGHT 5 MILLION GALLONS, WHICH LEAVES US A LITTLE OVER TWO AND A HALF MILLION GALLONS A DAY OF, OF CONTRACTUAL CAPACITY.
UM, THE CITY HAS SOME ADDITIONAL, UM, UH, COMMITMENTS ALLOCATED FOR FUTURE YEARS.
AND SO WHAT YOU'LL SEE AS THE YEARS GO OUT IS THAT THE CITY'S OBLIGATION GOES HIGHER.
SO FROM 23 TO 29, UM, IT GOES UP, UM, LOW, LOW UNDER 3 MILLION, UM, PER DAY AS FAR AS THE CITY'S, UH, NEEDED CAPACITY.
UM, AND THAT'S ASSUMING THAT ALL BALL UP CURRENT CUSTOMERS REMAIN FLAT.
UM, NOBODY ELSE NEEDS ADDITIONAL WATER OR, OR ANYTHING OF THE SORT.
UM, AND THAT ONCE WE GET TO 2029, UH, WE ONLY HAVE LIKE 200,000 GALLONS OF CONTRACT CAPACITY REMAINING.
UM, SO HENCE THE WHOLE BALL EAST EXPANSION IN OUR, IN OUR TIMELINE ASSOCIATED WITH THAT.
SO THAT'S ALL WE, UH, HAVE TO COVER.
JUST WANTED TO PROVIDE YOU ALL THE INFORMATION TO BE ABLE TO MAKE, UM, INFORMED DECISION STAFF'S.
UH, RECOMMENDATION IS, IS THE 6% AS, UM, SENT IN YOUR, IN YOUR PACKET? THAT'S CORRECT.
AND, AND THIS IS GERMANE TO THE PROPOSED BUDGET BECAUSE THE 6% RATE INCREASE WOULD INCREASE OUR REVENUES AS PROPOSED IN THE BUDGET.
'CAUSE OUR AGENDA ITEM IS FOR, TO DISCUSS THE PROPOSED, I WOULD HAVE TO ASK FINANCE IF THE 6%
[00:25:01]
IS INCLUDED IN THE REVENUE AT THIS POINT.SO IT WOULD ACTUALLY INCREASE YOUR REVENUE PIECE ON HERE.
UM, WHEN YOU GO BACK TO, UM, PAGE 19, ARE YOU ABLE TO SWITCH STER? YEAH.
SO CAN YOU BLOW IT UP STERLING? YEAH.
DO YOU MIND? SO YOU CAN SEE THAT THE REVENUE IS CONSIDER CONSIDERABLY MORE, UH, THAN WHAT WAS BUDGETED FOR FY 23 ALREADY.
UM, AND UM, IT WOULD INCREASE IT MORE THAN THAT.
BUT WHEN YOU LOOK DOWN AT THIS, YOU CAN SEE THAT WE'RE ONLY TRANSFERRING 1.3 MILLION OUT OF THIS.
THAT'S AT THE VERY BOTTOM OF THE SHEET TO TRANSFER OUT CAPITAL IMPROVEMENT, WE'RE TRANSFERRING 1.3 MILLION OUT.
AND SO ANY ADDITIONAL REVENUE THAT WE CAN GATHER CAN BE USED FOR OTHER CAPITAL IMPROVEMENT PROJECTS THAT WE HAVE.
UH, ONE TO EITHER REDUCE THE DEBT, UH, CAPACITY THAT THAT IS NEEDED BECAUSE THERE WILL BE A DEBT ISSUANCE TO COVER SOME OF THIS AS WELL.
UM, OR, UH, IT CAN JUST BE HELD IN RESERVES FOR FUTURE, UH, CFP PROJECTS THAT WE HAVE TO HAVE, THAT WE WILL NEED TO ADDRESS, UH, IN THE FUTURE.
UM, AS THE GENERAL MANAGER OF BAWA, AS STERLING SAID, IT IS, IT IS IMPERATIVE THAT WE CONTINUE WITH THE, WITH WHAT THE ENGINEERS ARE RECOMMENDING OR THE CONSULTANTS ARE RECOMMENDING TO KEEP UP WITH OUR CAPITAL INFRASTRUCTURE NEEDS, UH, THROUGH TIME.
OTHERWISE, UH, WE ARE GONNA BE PLAYING CATCH UP AND, UH, HAVE SPORADIC YEARS OF UP AND UPS AND DOWNS, UH, TO ADDRESS THE INFRASTRUCTURE THAT IS NECESSARY.
UH, IF Y'ALL LOOKED AT WHAT STERLING HAD ON THE OTHER SLIDE, YOU, WE REACHED CAPACITY, I THINK IT WAS 2029, UH, OF THE 31 POINT.
UM, THAT'S SECOND TO LAST SLIDE THERE.
WE'RE 0.2 AWAY FROM REACHING CAPACITY BY 2029.
AND, UM, SO WE'RE REALLY STRESSING THE SYSTEM AND IT'S IMPERATIVE THAT, THAT THE TEAM HAS THE, THE RESOURCES NECESSARY TO START ADDRESSING ALL THE INFRASTRUCTURE OVER THERE AND VIS-A-VIS THE, THE 6% RATE INCREASE THAT'S BEING, UH, PROPOSED OR CONSIDERED WHAT WILL BE OUR NEXT ACTIONS AS A BOARD TO, SO YOU'RE GONNA SET THE PUBLIC HEARING, UH, FOR THE BUDGET, UH, AFTER THIS ITEM, AND THEN FROM THERE WE WILL HAVE THE PUBLIC HEARING ON THE BUDGET.
WE WILL CONSIDER THE BUDGET, AND THEN THE BOARD WILL LOOK AT ADOPTING THE BUDGET.
AND IF THAT INCLUDES THE RATE PERCENTAGE INCREASE, IS THAT WHAT YOU'RE ASKING? YEAH.
I WAS ASKING IF THE PROPOSED INCREASE IS GERMANE TO THIS BUDGET, IF IT'S GOING TO BE REFLECTED IN THESE NUMBERS, IT WILL REFLECT IN THE NUMBERS, IT WILL BE REFLECTED IN IN THE PUBLIC HEARING AS WELL? THAT'S CORRECT.
I'M SPEAKING FOR FINANCE, BUT YES.
DOES ANYONE HAVE ANY OTHER QUESTIONS OR DISCUSSION? YEAH, SO ON THE 6%, THAT'S BASICALLY BECAUSE OF THE INCREASE IN THE, THE CITY OF HOUSTON WATER, WELL, LET'S SAY IT DROPS BACK DOWN TO 2.8% OR 2%, WOULD YOU CONSIDER DOING THE 6% INCREASE EVERY YEAR? THE, THE 6% WAS, WAS BASED UPON A 2.8% INCREASE ALREADY.
SO THE, THE DOUBLE DIGITS AND THE NINE PERCENTS, UM, YEARS, THOSE WERE NOT PROJECTED.
UM, AND SO YOU'RE, SO YOU'RE SAYING THAT'S MAKING UP FOR, FOR WHAT WE ALREADY ARE.
I'M, I'M SAYING THAT'S HIGHER THAN WHAT WAS PROJECTED WHEN THE, WHEN THE MODEL WAS PUT TOGETHER.
ANY, ANYONE ELSE? ALRIGHT, THANK YOU VERY MUCH.
[b. Consider a resolution calling for a public hearing regarding the Baytown Area Water Authority Fiscal Year 2023-24 Proposed Budget.]
CONSIDER A RESOLUTION CALLING FOR A PUBLIC HEARING TO BE HELD ON JULY 19TH, 2023 REGARDING THE AUTHOR'S FISCAL YEAR 20 23, 20 24 PROPOSED BUDGET.DO I HAVE A MOTION? I'LL MAKE THE MOTION.
QUESTIONS OR DISCUSSION? HEARING NONE.
OPPOSED? LIKE, SIGNED MOTION CARRIES UNANIMOUSLY.
[a. Receive the Baytown Area Water Authority Quarterly Financial and Investment Reports for the Quarter Ending December 31, 2022.]
REPORT SECTION WHERE WE WILL RECEIVE THE QUARTERLY FINANCIAL AND INVESTMENT REPORTS FOR THE QUARTER ENDING DECEMBER 31ST, 2022 FOR THE AUTHORITY.UM, I WANNA, BEFORE I START, UH, PIGGYBACK OFF OF SOME A QUESTION THAT WAS ASKED WHEN STERLING WAS HERE.
SOMEONE ASKED ABOUT THE HISTORICAL RATES AND I BELIEVE THERE'S A HISTORICAL RATES IN THE BUDGET PACKET THAT YOU RECEIVED, SO YOU MAY BE ABLE TO SEE IT IN THERE.
UM, ALSO, I WOULD LIKE TO APOLOGIZE FOR THE BUDGET PRESENTATION THAT YOU RECEIVED THIS EVENING.
UM, ALTHOUGH, UM, THERE WAS A MISUNDERSTANDING AND I'M GRATEFUL THAT THE CITY MANAGER WAS WILLING TO TAKE OWNERSHIP.
[00:30:01]
RESPONSIBILITY OF FINANCE TO ALWAYS BE PREPARED.SO ALSO I WOULD LIKE, I MEAN, WHAT I'M HERE TO THIS EVENING TO DO IS TO PRESENT THE FINANCIAL REPORT FOR PERIOD ENDING DECEMBER 31ST, 2022.
UM, THE REVENUE SO FAR IS 4.177 MILLION.
THE EXPENDITURES IS 2.7 MILLION, AND WE HAVE A GOOD WORKING CAPITAL BALANCE OF 4.2 MILLION FOR OUR CAPITAL IMPROVEMENT PROGRAM.
WE HAVE ONLY BROUGHT IN ABOUT 250,000, AND OUR CIP PROJECTS ARE 3.5 MILLION, LEAVING US STILL A GOOD WORKING CAPITAL BALANCE OF POINT, 0.4, $0.6 MILLION.
UM, OUR BUDGET RECEIVED SO FAR IS ABOUT 27%.
UM, WE'VE SPENT ABOUT 16% OF THE BUDGET, AND OUR BOOK VALUE FOR OUR INVESTMENTS IS $4.4 MILLION, AND WE BROUGHT IN $37,800 IN INVESTMENT EARNINGS.
IF YOU HAVE ANY QUESTIONS, I'M HAPPY TO ANSWER ANY QUESTIONS.
[a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, July 19, 2023, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. ]
US TO THE MANAGER'S REPORT.UH, I, I DON'T HAVE ANYTHING EXCEPT THAT OUR NEXT MEETING IS JULY 19TH, WHICH, UH, IS ALSO THE PUBLIC HEARING AND, UH, AT 4:30 PM HERE AT THE CITY HALL.
UM, HAD THERE BEEN A BUDGET PRESENTATION MM-HMM
WHAT WOULD WE HAVE? I MEAN, WHAT, WHAT DID WE MISS? NOTHING.
SO, I MEAN, IT SEEMS TO ME THAT WE SAW THE BUDGET, WE SAW THE NUMBERS, WE ASKED QUESTIONS.
SO I, UM, I THINK THAT'S A VERY GOOD QUESTION, AND THANK YOU FOR THAT.
ACTUALLY, I THINK WE HAD THE PRESENTATION.
WE JUST MAY NOT HAVE HAD SOME PRETTY POWERPOINTS TO GO WITH IT.
IS THAT A SUMMATION OF THE THAT'S TRUE.
WE WERE JOKING ABOUT MAYBE JUST DOING STICKY NOTES AROUND AND A SCAVENGER HUNT TO SEE IF Y'ALL COULD FIND THE NUMBERS THAT WAY.
UM, I'M JUST BRINGING LEVITY TO IT.
UH, I DO APPRECIATE THE QUESTION.
SO WE LOOKED AT ALL THE NUMBERS.
SO WE, WE WE DIDN'T MISS ANYTHING.
WE JUST DIDN'T HAVE A SLICK, PARDON ME.
POWERPOINT WITH THE DIAGRAMS AND GRAPHS.
AND I, AND I APPRECIATE EVERYONE'S CANDOR.
UH, AS THERE IS NO OTHER, UH, BUSINESS ON OUR AGENDA, I WOULD ENTERTAIN A MOTION TO ADJOURN.