Feb 08, 2024 BAYTOWN FINANCE COMMITTEE

SO I'LL CALL THIS MEETING

[00:00:01]

[ CITY OF BAYTOWN NOTICE OF MEETING BAYTOWN FINANCE COMMITTEE THURSDAY, FEBRUARY 8, 2024 4:00 P.M. BAYTOWN CONFERENCE ROOM, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ]

WE'RE IN THE BAYTOWN CONFERENCE ROOM.

WE DO HAVE A QUORUM.

SO, ITEM ONE A

[a. Consider the approval of minutes for the Finance Committee meeting held February 2, 2024.]

MOTION TO APPROVE.

SECOND.

HAVE A MOTION.

SECOND.

ALL IN FAVOR, PLEASE SAY AYE.

AYE.

AYE.

ANY OPPOSED? ALL RIGHT.

MOTION CARRIES.

ITEM TWO

[a. Discuss City of Baytown FY24 Debt Issuance.]

WOO.

ALL RIGHT.

UH, COMMITTEE MEMBERS, I'M GONNA TURN THIS OVER TO FRANK AND TERESA HERE IN JUST A SECOND.

UM, I, I HAD PUSHED FOR THIS MEETING TO HAPPEN TODAY.

UM, I KNOW WE WEREN'T ABLE TO MEET YESTERDAY, BUT I WANTED TO PUSH TO FOR IT TO HAPPEN THIS WEEK.

UH, ONE BECAUSE WE DON'T HAVE A LOT OF TIME, UH, TO TALK ABOUT THINGS.

AND I WANTED TO GIVE THIS GROUP ENOUGH TIME TO TALK ABOUT, UH, THE, THE ISSUANCE AS MUCH AS YOU WOULD LIKE, BECAUSE THERE IS A NOTICE OF INTENT PLANNED TO GO ON FEBRUARY 22ND.

IS THAT STILL CORRECT? ALRIGHT.

SO THE NOTICE OF INTENT WILL GO TO COUNSEL FOR CONSIDERATION ON FEBRUARY 22ND, AND IF WE WAITED UNTIL NEXT WEEK, YOU REALLY ONLY HAVE ONE WEEK AFTER THAT TO REALLY FINE TUNE ANYTHING WITH THE, WITH THE NUMBERS.

ON TOP OF THAT, I'D ASK FRANK AND HIS TEAM TO BE HERE TO REALLY NOT GO THROUGH EVERY SINGLE PROJECT IN THE CIP, BUT TO KIND OF EXPLAIN THE, THE, UH, THE REASONING BEHIND HOW IT'S SET UP, ALL THE WORK THAT THEY'VE DONE, ANY, UM, UH, HOW IT'S ALL COORDINATED FOR THIS YEAR, THE FOLLOWING YEARS AND THE YEARS FORWARD.

IN ADDITION TO THAT, UM, ANY PUSHING OR REDUCTION IN MONIES, THE IMPACTS OF THAT SO THAT Y'ALL CAN UNDERSTAND THAT NOT TRYING TO PERSUADE ANYBODY, JUST TRYING TO UNDERSTAND DO YOU HAVE ALL THE DATA IN FRONT OF YOU TO MAKE THE BEST DECISION THAT YOU CAN, UM, ON TOP OF THAT, TO IDENTIFY ANY POSSIBLE SQUISH THAT'S IN THE BUDGET SO THAT THE FINANCE COMMITTEE CAN ULTIMATELY DOESN'T HAVE TO BE TODAY, THAT THE FINANCE COMMITTEE CAN MAKE A RECOMMENDATION ON THE NUMBER YOU'RE OKAY WITH, UH, GOING TO THE CITY COUNCIL FOR THE TOTAL DEBT ISSUANCE AND HOW THERESA WILL TALK ABOUT HOW THAT WILL ALSO BE BROKEN DOWN AT THE CITY COUNCIL SO THAT PEOPLE UNDERSTAND IT'S HOW IT'S, UH, DIVVIED UP AND IT'S NOT JUST $92 MILLION OR $97 MILLION.

WITH THAT, DO YOU HAVE ANYTHING, THERESA? UH, NO.

YOU CAN GO AHEAD FIRST.

OKAY.

UM, SO, UH, LAST, UH, CFP COMMITTEE MEETING, WE MADE A PRESENTATION ABOUT ASSET MANAGEMENT AND HOW THAT CORRELATES TO, UH, OUR INVESTMENT LEVEL IN OUR, IN OUR INFRASTRUCTURE.

SO I THOUGHT IT WAS WORTH GOING THROUGH JUST A SUMMARY OF THAT PRESENTATION, UH, TO TALK ABOUT INVESTMENT LEVEL IN OUR INFRASTRUCTURE.

UM, AND THEN AFTER THAT, I'LL KIND OF GIVE YOU, UM, GO INTO EACH PROGRAM AND TALK ABOUT OUR HISTORICAL OR CURRENT INVESTMENT IN THAT PROGRAM, AND LOOK, COMPARE TO WHAT WE SHOULD BE INVESTING IN THAT.

AND THEN WE WILL GO THROUGH THE FY 24, UH, DEBT ISSUANCE.

SO, UH, THAT'S KIND OF THE AGENDA.

JUST DESCRIBE, UH, SO FIRST, JUST BRIEFLY, UH, TALK ABOUT ASSET MANAGEMENT.

ASSET MANAGEMENT IS A SYSTEMATIC APPROACH TO DETERMINING YOUR MOST EFFICIENT, UH, MAINTENANCE AND REPLACEMENT, YOU KNOW, UH, TIMING ON YOUR ASSETS.

AND, UM, SO WHY IT'S IMPORTANT IS THAT IT ALLOWS US TO BETTER PLAN, YOU KNOW, UH, REPLACEMENT OF INFRASTRUCTURE.

IT PREVENTS, UM, YOU KNOW, CATASTROPHIC FAILURES THAT LEAD TO, YOU KNOW, LARGE ONE TIME OR, OR, YOU KNOW, UM, UNEXPECTED INVESTMENTS YOU CAN SAY, AND JUST ALLOWS US TO BUDGET BETTER.

UM, THE GOALS OF ASSET MANAGEMENT, UH, THAT WE'RE WORKING TOWARDS IS TO BE PROACTIVE IN, IN OUR PLANNING AND, UH, FOR OUR INFRASTRUCTURE ASSETS, UH, TO PLAN OUR BUDGET AND RESOURCES, UM, SO THAT THEY'RE USED EFFICIENTLY AND TO MINIMIZE OUR LIFECYCLE COSTS.

UH, SO THE BASIC PROCESS THAT WE'VE GONE THROUGH, UM, IS THAT FIRST WE, UH, DEFINED OUR ASSETS THAT WE WANT TO TRACK.

WE, UH, DEVELOPED AN INVENTORY OF ALL THOSE ASSETS, AND THEN, UH, WE PLACE A VALUE ON THE ASSETS AND ESTIMATE THEIR USEFUL,

[00:05:01]

SO ONCE YOU DO THAT, YOU CAN DETERMINE, YOU KNOW, WHAT SHOULD BE YOUR AVERAGE INVESTMENT IN, IN YOUR INFRASTRUCTURE.

SO I COULD, UH, GIVE YOU AN ANALOGY.

SO IF YOU HAD, YOU KNOW, 10 VEHICLES IN YOUR FLEET AND YOU EXPECT THEM TO, TO LAST 10 YEARS ON AVERAGE, YOU KNOW, UM, ON AVERAGE YOU SHOULD BE REPLACING LIKE ONE VEHICLE PER YEAR SO THAT YOU DON'T GO 10 YEARS, THEN HAVE TO REPLACE 10 VEHICLES IN ONE YEAR.

YOU KNOW, AND CORRESPONDINGLY, YOU COULD, YOU KNOW, IF YOU, IF YOU DELAY YOUR MAINTENANCE AND REPLACEMENT, YOU COULD, UM, YOU KNOW, TRY TO GET LONGER SERVICE ON 'EM, TAKE 'EM 12 YEARS, 15 YEARS.

BUT THEN WHEN YOU DO THAT, YOUR LEVEL OF SERVICE GOES DOWN.

SO YOU'RE, YOU'RE DRIVING, YOU KNOW, UH, A VEHICLE IN WORSE CONDITION, AND YOU'RE PUTTING MORE MAINTENANCE INTO THAT VEHICLE.

YOUR MAINTENANCE COSTS GO UP WHEN YOU DO THAT.

UM, SO I THINK WHAT I'M TRYING TO GET TO IN ALL THESE PROGRAMS IS THAT THERE SHOULD BE AN AVERAGE, UH, INVESTMENT LEVEL IN EACH OF OUR PROGRAMS. AND WE REALLY HAVEN'T HISTORICALLY LOOKED AT WHAT SHOULD WE BE INVESTING BASED ON OUR USEFUL LIFE AND THE SERVICE LEVEL THAT WE EXPECT.

SO, LIKE I SAY, YOU CAN CHANGE YOUR USEFUL LIFE AND TRY TO DRAG IT OUT MORE, BUT THAT LOWERS YOUR SERVICE LEVEL THAT YOU'RE GETTING.

SO, UH, JUST KIND OF KEEP THAT IN MIND AS WE GO THROUGH THIS.

UM, SO THEN AFTER WE DID THAT, WE'VE, UM, BEEN KIND OF IN THE MAINTENANCE, UH, PART OF OUR ASSET MANAGEMENT PROGRAM.

WE'VE BEEN CAPTURING OUR OPERATIONS AND MAINTENANCE COSTS, AND, UH, WE USE THAT WE TO DETERMINE, UM, WHICH THAT, WHICH ASSETS NEED TO BE REPLACED WHEN, SO LOOKING AT, YOU KNOW, OLDER ASSETS AND, UH, THE ONES WITH HIGHER MAINTENANCE COSTS, LIKE IF YOU'RE LOOKING AT WATER LINES, THE ONES THAT HAVE THE HIGHEST NUMBER OF WATERLINE BREAKS THAT WE HAVE TO KEEP GOING BACK AND REPAIRING, YOU KNOW, THOSE ARE THE ONES WE JUST NEED TO REPLACE.

AND THAT'S KIND OF WHAT ASSET MANAGEMENT DOES.

UM, AND THEN YOU PROGRAM YOUR MAINTENANCE AND REPLACEMENT.

SO I'VE, UH, WE'VE DEFINED OUR ASSETS, UH, TO CORRESPOND TO THE WAY WE HAVE OUR CIP PUT TOGETHER.

AND WE'VE GOT, YOU KNOW, UH, FACILITIES, TRANSPORTATION, WHICH INCLUDES THE ROADWAYS, THE SIDEWALKS, THE TRAFFIC SYSTEMS, YOU KNOW, THE LIGHTS AND ALL THAT.

UH, STORM WATER, THAT'S OUR DRAINAGE SYSTEM OF OUR DITCHES AND STORM PIPES, UH, WATER TREATMENT AND TRANSMISSION, THAT'S, UH, BWA.

SO, UM, AND THEN WATER DISTRIBUTION, UH, WASTEWATER TREATMENT AND WASTEWATER COLLECTION.

SO, JUST KIND OF A BRIEF OVERVIEW OF EACH PROGRAM, TELL YOU, YOU KNOW, WHAT, WHAT STAGE WE'RE AT WITHIN THE ASSET MANAGEMENT.

YOU KNOW, GROWTH PHASE IS, UM, FIRST LOOKING AT FACILITIES.

SO, UM, IN 2021, WE DID A FACILITIES MASTER PLAN, WHICH WAS REALLY A CONDITION ASSESSMENT OF ALL OF OUR BUILDINGS.

AND IT CAME BACK WITH, UM, I THINK OVER $50 MILLION IN RECOMMENDED IMPROVEMENTS.

BOTH, YOU KNOW, LIFE, HEALTH, SAFETY IMPROVEMENTS, JUST, UM, CONDITION IMPROVEMENTS THAT ARE NOT MAYBE LIFE HEALTH SAFETY THAT HAD A DA, UH, ISSUES.

SO JUST A VARIETY OF THINGS THAT WERE CAPTURED WITHIN THAT.

UM, NOW FACILITIES, I'M GONNA TELL YOU, IT'S, IT'S A LITTLE BIT MORE DIFFICULT BECAUSE, UM, YOU KNOW, IT'S HARDER TO DETERMINE THE USEFUL LIFE OF A FACILITY BECAUSE, YOU KNOW, A BUILDING, YOU REPLACE THE ROOF REGULARLY.

THE, YOU KNOW, THE, THE GUTS OF IT, THE HVAC MAINTAIN THE ELECTRICAL SYSTEM.

UM, YOU KNOW, YOU CAN GET A LONG LIFE OUT OF IT.

SO IT'S HARD TO SAY THAT WE'RE ONLY GONNA GET 50 YEARS OR 70 YEARS OUT OF A BUILDING WHEN WE, WE CAN MAINTAIN IT AND, YOU KNOW, HAVE IT LONGER USEFUL LIFE.

SO, SO IN THIS PROGRAM, IT'S HARDER FOR ME TO JUST GET THE, THE VALUE AND THE USEFUL LIFE AND THEN SAY, OKAY, THIS IS HOW MUCH WE SHOULD INVEST.

BUT I WILL TELL YOU, UM, WE HAVE BEEN INVESTING MORE IN OUR FACILITY MAINTENANCE.

SO, UM, STARTING PROBABLY TWO YEARS AGO, WE, UM, YOU KNOW, THAT, THAT, UH, PROGRAM MOVED UNDER PUBLIC WORKS, AND WE MADE A CONSCIOUS DECISION TO PUT MORE MONEY INTO, UH, ROOF REPLACEMENTS AND HVA SYSTEM SYSTEMS. SO YOU, I'M SURE YOU'VE SEEN SOME OF THOSE,

[00:10:01]

UH, YOU KNOW, JAY REYNOLDS HAS DONE SOME OF OUR ROOFING STUFF.

YOU'LL SEE THAT ON PROBABLY THE 22ND AGENDA, AN ANNUAL THING FOR THAT.

UH, WE'VE HAD SOME LARGE HVA SYSTEM REPLACEMENTS, UM, CITY HALL, I THINK COMMUNITY CENTER, THE LIBRARY, BAWA.

SO WE ARE, WE HAVE STARTED INVESTING MORE IN, INTO OUR FACILITIES IN THE MAINTENANCE OF THE FACILITIES.

SO THAT, THAT'S BEEN A GOOD THING.

UM, JUST LOOK AT SOME OF THE OVERALL INVESTMENT WE'VE MADE.

UM, YOU KNOW, UH, WE HAVE SOME MONEY IN THE CIP THIS YEAR THAT WE PLAN TO DO FOR, UM, YOU KNOW, NEW FACILITIES OR RENOVATE FACILITIES.

ONE WAS THE ENVIRONMENTAL HEALTH DEPARTMENT, WHICH, YOU KNOW, IS A DIRE NEED OF EITHER REHAB OR, YOU KNOW, UH, REPLACEMENT.

UH, SO WE HAVE SOME MONEY FOR THAT.

WE'VE GOT SOME MONEY FOR A DA COMPLIANCE, BECAUSE THAT IS, YOU KNOW, THAT'S, UM, A LAW THAT WE'RE GONNA HAVE TO COMPLY WITH.

UH, WE, WE HAD TO PUT TOGETHER A PLAN FOR A DA COMPLIANCE, AND WE'RE GONNA, WE'RE STARTING TO IMPLEMENT THAT PLAN WITH, WITH, UH, IMPROVEMENTS.

AND THAT'S GONNA GO IN BOTH, YOU KNOW, FACILITIES AND IN TRANSPORTATION WHERE YOU'LL SEE THAT IN THE SIDEWALKS THAT WE NEED TO IMPROVE.

UM, AND THEN YOU'LL SEE THE OPERATIONS AND MAINTENANCE COSTS IS ABOUT 2.3 BILLION.

SO THIS, THIS MONEY WE PUT INTO OUR OPERATING BUDGET TO, YOU KNOW, REPLACE OR REPAIR YOUR ROOFS, YOUR HPAC, ELECTRICAL, PLUMBING, THINGS LIKE THAT.

SO THAT NUMBER HAS WENT UP SIGNIFICANTLY IN THE LAST COUPLE YEARS, AND THAT'S WHAT IT'S BEEN.

SO I, I FEEL LIKE, YOU KNOW, WE HAVE DONE BETTER IN THIS AREA.

UH, I CAN'T REALLY GIVE YOU A NUMBER OF WHERE WE SHOULD BE INVESTING, BUT THAT'S ONE THING WE NEED TO DO IS MAKE SURE WE'RE, WE'RE MAINTAINING THE, AT MINIMUM, THE STRUCTURE OF THE BUILDINGS SO THEY DON'T AGREE IN LOOKING AT TRANSPORTATION, AS I SAID, THAT INCLUDES SIDEWALKS, UM, TRAFFIC SYSTEMS, ROADWAYS, AND, UM, AND WE DID A, UH, PAVEMENT CONDITION INDEX THAT KIND OF GAVE US A, UH, ANALYSIS ON HOW GOOD OUR, UH, ROADWAY SYSTEM IS.

AND THAT'S A, THAT'S THE PCI, UH, SCALE.

IT WAS RUN IN 2020 LAST TIME.

UH, WE CAME BACK WITH A, A SCORE OF 74, AND THAT'S MEASURING FROM ZERO TO 100, 100 BEING THE BEST.

LIKE, UM, IT JUST MEASURES THE RIDE OF THE ROAD.

SO IF IT'S A SMOOTH ROAD, IT GETS, YOU KNOW, 100, IF IT'S GOT POTHOLES, CRACKS, THINGS LIKE THAT.

IT, IT DEGRADES THE, THE SCORE.

UM, AND, YOU KNOW, OUR SCORE OF 74 IS REALLY NOT BAD.

UM, WE WOULD LIKE TO MAINTAIN THAT OR GO UP A FEW POINTS.

MAYBE 76, 78 WOULD BE REALLY GOOD, GOOD SCORE.

UM, THE COMPANY THAT RUNS THE PCI FOR US ALSO DOES AN ANALYSIS, AND THEY TELL US, UH, WHICH MAINTENANCE, UH, TREATMENTS WE NEED TO DO ON EACH, EACH SEGMENT OF ROADWAY TO MAINTAIN THAT SCORE AT 74.

THEN THEY TELL US HOW MUCH THAT COSTS, AND YOU KNOW, HOW MUCH THAT, UH, MAINTENANCE TRANSLATES INTO DOLLARS.

UH, SO IN 2020, THEY SAID WE HAD TO INVEST $28.3 MILLION ANNUALLY TO MAINTAIN, UH, 74 PCI.

UM, NOW WE DO MAKE SOME INVESTMENTS.

WE MAKE A LOT OF INVESTMENTS IN OUR MAINTENANCE.

UM, WE'VE GOT, I THINK WE HAVE HERE IS ABOUT $9 MILLION IN O AND M.

AND THAT THAT'S GONNA, A LOT OF THAT COMES FROM STREET MAINTENANCE, SALES TAX.

IT GOES TO OUR CONCRETE CREWS.

WE HAVE TO GO OUT AND REPLACE, YOU KNOW, CONCRETE PANELS.

WE'VE GOT POTHOLE CREWS THAT GO OUT AND FIX POTHOLES.

WE'VE GOT CRACK SEAL CREWS THAT, YOU KNOW, WHEN THEY HAVE, OR WHEN THE PAVEMENT GETS A CRACK IN, THEY, THEY SEAL THAT SO IT DOESN'T, YOU KNOW, FURTHER DEVELOP.

WE DO THINGS, ALL KINDS OF TREATMENTS, MICRO PAVING, UH, SLURRY SEAL, UH, MILL AND OVERLAY.

THAT'S WHERE ALL THAT, THAT MONEY GOES.

AND, AND I THINK WE USE THAT WISELY, AND THAT HELPS TO MAINTAIN THAT.

PCI.

THEN WE HAVE, THERE'S CAPITAL PROJECTS THAT, UM, ARE COMPLETED.

THINGS LIKE, UM, SO RIGHT NOW WE'RE WORKING ON LANTER PARK, REPLACING ALL THE STREETS WITHIN LANTER PARK.

SO THAT'S A CAPITAL PROJECT

[00:15:01]

SO DO YOU AGREE WITH THEIR, I MEAN, THE 28 I DO.

SO WE'RE FALLING BEHIND, RIGHT? IF WE CONTINUE 16, DO YOU? WE'RE, SO IF YOU LOOK AT, UH, SOME OF THE THINGS WE HAVE PLANNED FOR THIS YEAR, SO GARTH ROAD IS A BIG INVESTMENT, AND WE'RE LEVERAGING SOME GRANT DOLLARS FOR THAT FEDERAL DOLLARS.

SO YOU SEE, UM, OTHER THAN CEDAR BAY, LYNCHBURG, WHICH IS RIGHT AWAY COSTS, THAT'S $4 MILLION.

SO WE REALLY ARE SCHEDULED TO, TO, UM, INVEST OVER $50 MILLION THIS YEAR INFRASTRUCTURE.

BUT THAT, THAT IS ADDRESSING SOME OF THE, THE BIGGER LONG-TERM NEEDS LIKE ARTHUR ROAD AND MARKET STREET IS ON THERE.

UM, AND WE'RE LEVERAGING GRANT DOLLARS.

SO THAT INCLUDES SOME OF THE GRANT DOLLARS THAT WE'RE LEVERAGING, UH, THAT CAN HELP US, YOU KNOW, REACH THAT TARGET INVESTMENT LEVEL.

AND THAT'S THINGS WE PLAN ON DOING IN THE FUTURE.

UM, THINGS LIKE BAKER ROAD NEEDS TO BE REHABBED.

WE'RE DOING A ENGINEERING STUDY ON THAT SO THAT WE CAN USE THAT TO GET, UH, GRANT DOLLARS.

UM, BUT WE JUST NEED TO BE MINDFUL THAT, YOU KNOW, A LOT OF THE MAINTENANCE COSTS ARE REQUIRED TO GO INTO THAT, TO MAINTAIN THAT, THAT PCI, YOU KNOW, UH, STORM WATER SYSTEM THAT INCLUDES OUR DITCHES, OUR DRAIN PIPES.

UM, WE DID A MASTER PLAN IN 2020, AND I, I THOUGHT THAT WAS A VERY GOOD PLAN.

UM, WHAT IT DID WAS IT RECOMMENDED SPECIFIC, UH, PROJECTS THAT WE NEEDED TO DO TO, UM, BRING THE, UH, DRAINAGE SYSTEM TO A CERTAIN LEVEL WHERE, YOU KNOW, UH, HOUSES WOULD FLOOD IN A HUNDRED YEARS.

AND IT, THERE WAS ONLY, UH, THREE, UH, CRITICAL, UH, PROJECTS OUT OF THAT MASTER PLAN THAT WAS, UH, DANINA EAST JAMES AND, UM, BAYTOWN, OKLAHOMA, WHICH IS PART OF THE WEST BAYTOWN, UH, PROJECT.

UM, SO WE ACTUALLY GOT ALL THREE OF THOSE PROJECTS FUNDED, UH, WITH, UH, GRANTS.

SO THAT'S PART OF THAT, UM, HARRIS COUNTY PARTNERSHIP PROJECT THAT WE DID.

UM, THOSE ARE 50% GRANTS, BUT THOSE ARE HUGE PROJECTS.

AND, UM, SO LIKE, UH, DANINA, JUST THE FIRST PHASE IS, UM, I KNOW IT'S GONNA BE OVER 20 MILLION, YOU KNOW, UM, AND WEST BAYTOWN IS SIMILAR.

IT'S GOT TWO PHASES, AND THEY'RE JUST VERY BIG PROJECTS.

SO AGAIN, WE ARE, AND WE ISSUE DEBT, YOU KNOW, OUT OF THE STORM WATER FUND TO FINANCE OUR MATCH IN THAT GRANT.

UH, AND THEN WE'VE GOT THE GRANT, WHICH LEVERAGES OUR INVESTMENT.

SO, UM, WE ARE MAKING INVESTMENTS IN THIS, WHICH ARE RECENT.

UM, YOU CAN SEE WHAT WE HAVE PLANNED FOR, UH, THIS YEAR.

UM, I DID TAKE DANIEL BINA OUT OF FY 24.

THE PROJECT IS BEING MANAGED BY HARRIS COUNTY, AND THE DESIGN IS NOT GONNA BE READY UNTIL LATE SUMMER, SO WE PROBABLY WON'T MAKE THAT PAYMENT UNTIL FY 25, EARLY IN F FFY 25.

SO, UH, THAT KIND OF LOWERED THE INVESTMENT LEVEL.

BUT, UH, YOU CAN SEE WE'RE STILL DOING A LOT OF, UH, PROJECTS AND THEY'RE ALL LEVERAGED BY GRANTS.

UM, YOU KNOW, UH, THERE'S WEST TEXAS AVENUE, WHICH THE CDBG, UH, GRANT AND A HARRIS COUNTY GRANT THAT WE GOT BOTH FOR THAT PROJECT, UH, SOUTH MAIN AND REPUBLIC.

SO THE FIRST PHASE WAS OF THAT PROJECT WAS FUNDED BY CDBG.

THE SECOND PHASE WAS, UM, A HARRIS COUNTY GRANT.

THEN THE SAN JACINTO REGIONAL DETENTION THAT'S GONNA BE FUNDED THROUGH THE TURS.

SO WE ARE LEVERAGING DIFFERENT WAYS TO, TO INVEST IN OUR INFRASTRUCTURE.

AND, YOU KNOW, UH, I THINK AT LEAST ON THE STORMWATER, WE'VE ATTACKED THE CRITICAL PROJECTS ALREADY.

THERE STILL ARE, YOU KNOW, THE, THE MASTER PLAN DIVIDED THE PROJECTS INTO, YOU KNOW, THE HIGH NEED, THE MODERATE NEED, AND THE, AND WE STILL HAVE A LOT OF MODERATE NEEDS PROJECTS.

UM, I THINK ALEXANDER AREA IS ONE THAT WE'VE TRIED TO APPLY FOR GRANTS AND WE DIDN'T GET IT.

SO WE'LL KEEP APPLYING FOR THE GRANTS FOR THOSE PROJECTS LIKE THAT.

UM,

[00:20:01]

BUT I WILL TELL YOU THAT, UM, WE ARE MAKING INVESTMENT IN THE WATER CAPACITY BY EXPANDING THE, THE EAST PLANT.

WE HAVE PLANS TO, WE'VE ALREADY STARTED, UM, PLANS FOR HIRING A, A DESIGN BUILD CONTRACTOR TO, UM, EXPAND THE EAST PLANT.

AND THAT'S SO THAT WE CAN MAKE SURE WE ARE, UM, HAVE ADEQUATE WATER CAPACITY FOR OUR DEVELOPMENT.

SO WE'RE, WE CONTINUE TO GROW, ESPECIALLY ON THE EAST SIDE WHERE, YOU KNOW, THE, THE IMPROVEMENT DISTRICTS ARE ADDING MORE USERS AND, UM, AND OUR, YOU KNOW, JUST THE GROWTH IN BAYTOWN IN GENERAL IS GOING UP.

SO IT'S USING THAT WATER CAPACITY AND WE HAVE TO EXPAND OUR PLANT TO, TO KEEP UP WITH THAT IF WE DON'T DO THAT.

LIKE WHEN DO YOU FORESEE KIND OF, WHAT'S THE DATE WHERE IT LOOKS LIKE OUR, IT, IT, IT HAS BEEN, UM, UPDATED RECENTLY WITH SOME CHANGES TO OUR GROWTH PROJECTIONS.

UM, ORIGINALLY JUST AS A FEW, COUPLE OF MONTHS AGO, I WAS PROJECTING LIKE 2028, WE WOULD BE OUT OF WATER CAPACITY.

UH, RIGHT NOW IT'S LOOKING LIKE MAYBE 2026.

AND SO IT REALLY IS CRITICAL.

YEAH.

UM, YOU KNOW, THE, THE, THE NIAGARA BOTTLING PLANT THAT CAME IN TO CCI ONE TOOK, YOU KNOW, HALF OF OUR ORIGINAL LEASE PLANTS CAPACITY, AND THAT RIGHT OFF THE BAT KIND OF PUT US BEHIND THE, BEHIND THE CURB.

UM, I MEAN, THEY'RE A GOOD CUSTOMER.

IT WOULD'VE BEEN BETTER IF THEY WOULD'VE BEEN IN THE CITY.

UM, BUT BEING, UH, IN THE CCID, UH, THEY STILL, THEY PAY OUT OF CITY RATES.

SO, UM, WE'RE COLLECTING REVENUES FOR THAT.

BUT IT, IT JUST KIND OF PUTS US, UM, IN A PINCH POINT WITH GETTING, ENSURING THAT WE HAVE THAT WATER CAPACITY.

SO WE'RE LOOKING AT SOME OTHER ALTERNATIVES TO MAKE SURE WE DON'T HAVE TO PAUSE ANY DEVELOPMENT THAT MIGHT WANT TO COME IN DURING THAT TIME.

YOU KNOW, UM, WE'RE LOOKING AT POSSIBLY DOING SOME WELLS TO HELP SUPPLEMENT OUR CAPACITY, BUT IT, THAT IS A BIG ISSUE.

AND WE DON'T WANT TO EVER TELL DEVELOPMENT THAT YOU CAN'T COME 'CAUSE WE DON'T HAVE WATER.

AND, AND, UH, I THINK THAT WAS THE CASE, YOU KNOW, AT ONE POINT IN BAYTOWN.

UM, IT WAS ON THE WASTEWATER SIDE ACTUALLY, BUT, UM, RIGHT AT ONE POINT WE TALKED ABOUT A, A POSSIBLE DES SALINIZATION PLANT.

SO WHAT WOULD WE NEED TO START KIND OF SQUIRRELING AWAY FOR THAT? BECAUSE THOSE ARE HIGH DOLLAR PROJECTS, SO, RIGHT, RIGHT.

UM, SO THE EAST PLANT IS SET UP IN POSITION TO, UH, DO DESALINIZATION.

IT, IT, IT, IT'S NOT BUILT TO DO DESALINIZATION RIGHT NOW, BUT IT'S RIGHT NEXT TO THE CANAL THAT HAS A BRINE CANAL WHERE IT COULD TAKE, UH, BRINE WATER.

UH, AND THE, THE LONG TERM PLAN IS FOR IT TO DO DESALINIZATION.

HOWEVER, THAT PROCESS IS A LOT MORE EXPENSIVE THAN THE NORMAL PROCESS.

THE NORMAL TREATMENT.

I JUST SAW CORPUS CHRISTI DID A DESAL PLANT OKAY.

SAW.

AND, UM, THEIR COSTS PER MILLION GALLONS PER DAY IS ABOUT 25 MILLION.

SO IT'S $25 MILLION PER MGD OUR PLANT WE'RE, UH, ESTIMATING AT LIKE $10 MILLION PER MGD.

SO DESAL IS GOOD IF YOU HAVE TO DO IT, BUT IT'S MORE EXPENSIVE.

GOT IT.

AND, YOU KNOW, I DON'T THINK WE'RE AT THAT COST BENEFIT YET.

OKAY.

UM, NOW WATER DISTRIBUTION, YOU KNOW, WE'VE DONE A FAIR AMOUNT OF ANALYSIS ON THIS.

WE'RE STILL REFINING IT, BUT, UM, JUST ASSUMING THAT WATER PIPE LASTS 50 YEARS, UM, YOU KNOW, WE'VE, UH, DEVELOPED THE, THE COST ON, ON WHAT OUR SYSTEM IS.

AND, UM, YOU KNOW, IF WE REPLACE 2% OF OUR SYSTEM THAT'S, YOU KNOW, THAT ONE 50TH, WE'RE LOOKING AT ABOUT $12 MILLION PER YEAR.

AND, UH, THIS IS ONE, THIS IS AN AREA WHERE WE HAVE NOT BEEN INVESTING, UH, AS MUCH AS WE SHOULD.

AND THE, THE WATER DISTRIBUTION SYSTEM DOES CONCERN ME.

UM, WE HAVE A LOT OF THE LARGER, UH, ASBESTOS CEMENT LINES, UH, THEY WERE PUT IN IN THE LATE SEVENTIES AND EIGHTIES.

AND IT'S A

[00:25:01]

SO YOU TRY TO FIX IT AND ANOTHER PART BREAKS AND .

SO YOU'RE KIND OF, IT, IT, IT'S, IT'S NOT A GOOD MATERIAL.

WE NEED TO REPLACE THAT.

IT'S PROBABLY GETTING TO, TO THE END OF ITS USEFUL LIFE.

AND WE UNFORTUNATELY DO HAVE, UM, A FAIR AMOUNT OF AC LINES.

AND SO THOSE ARE PROJECTS THAT WE'RE TRYING TO PROGRAM IN.

WE'VE TRIED FOR SEVERAL YEARS, BUT WE'VE DEFERRED THE PROJECTS BECAUSE WE TRY TO MEET OUR REVENUES, YOU KNOW, OUR BUDGET.

WE'RE BUDGETING TO THE REVENUES, BASICALLY NOT BUDGETING TO WHAT WE SHOULD BE INVESTING, YOU KNOW, SO THAT'S BEEN THE CATCH 22.

UM, YOU KNOW, WE BUDGET TO THE REVENUES AND THEN WE SAY, WELL, WE NEED MORE REVENUES.

BUT THEN WE ALWAYS COME IN, YOU KNOW, ON BUDGET.

SO WE SAY, WELL, YOU DON'T NEED ANYMORE 'CAUSE YOU'RE ON BUDGET, SO .

SO THAT, THAT'S THE PREDICAMENT.

AND, AND I, I DO WORRY ABOUT THAT MORE ON THE WATER SYSTEM BECAUSE IT'S, IT HAS BEEN HISTORICALLY UNDERFUNDED.

UM, AND YOU CAN GET INTO SOME BIG PROJECTS THAT WOULD BE COSTLY.

UM, AND ALSO ON THE WATER SYSTEM, SINCE WE HAVE A COMBINED WATER AND SEWER FUND, YOU KNOW, AND WE HAVE THE, THE SSO LITIGATION, THERE'S A RISK THAT WE'RE FORCED TO INVEST IN OUR WASTEWATER COLLECTION SYSTEM.

AND THAT'S GONNA BE TO THE DETRIMENT OF THE WATER DISTRIBUTION SYSTEM.

.

THAT, THAT'S MY CONCERN.

AND, YOU KNOW, WE'LL, WE'LL LOOK AT THAT MORE.

I JUST WANT Y'ALL TO BE AWARE OF THAT.

IS THAT TYPICALLY A COMBINED FUND, OR DO OTHER CITIES HAVE IT DIVIDED OR, I THINK IT IS TYPICALLY, YOU SEE IT BOTH WAYS, BUT MORE LENDED FUND.

UM, SO THIS JUST LISTS, UH, SOME OF THE PROJECTS WE HAVE AND, AND OUR FY 24 PLANNED INVESTMENT, YOU CAN SEE MM-HMM .

WHERE SIX, A LITTLE OVER 6 MILLION.

AND THAT'S, UM, UNDER OUR, YOU KNOW, TARGET INVESTMENT FOR SURE.

BUT WE DO HAVE, YOU KNOW, UH, THE, THE BAYWAY TRANSI WATERLINE, SO THE TRANSI PIPES ARE THE ASBESTOS SEMEN PIPES.

THAT'S JUST A SAME, SAME TERM ARE ARE SAME PIPE.

UH, SO WE'RE, WE'RE DOING DESIGN THIS YEAR, UM, ON THAT FIRST PROJECT, SO THAT IT WILL BE A LARGE PROJECT, UM, YOU KNOW, PROBABLY IN THE 16 TO $20 MILLION RANGE BECAUSE, UH, ALSO WE NEED TO DO THE STREET BAYWAY, YOU KNOW, THE, THE ROADWAY NEEDS TO BE DONE AS WELL.

WE'RE GONNA COMBINE THE TWO AND TRY TO GET THAT FUNDED IN INTO ONE PROJECT.

UH, AND TALKING ABOUT WASTEWATER COLLECTION, I MENTIONED WE HAVE THE SSO LITIGATION.

WE'VE, UM, I THINK HISTORICALLY UNDERFUNDED, UH, THE WASTEWATER SYSTEM AS WELL.

UM, WE ARE, UH, IN NEGOTIATIONS WITH THE FEDERAL AND STATE GOVERNMENT TO DETERMINE OUR, OUR INVESTMENTS SO THAT WE WILL, UM, AT LEAST MINIMIZE, YOU KNOW, OUR SSOS.

AND, UM, SO THERE'S MORE OF THIS COMING.

WE DO HAVE SOME, WHAT WE CALL EARLY ACTION, UH, PLAN PROJECTS THAT ARE BEING IMPLEMENTED SO THAT WE CAN SHOW PROGRESS.

UH, LIFT STATIONS ARE PART OF THE WASTEWATER COLLECTION SYSTEM.

THEY PUMP THE WASTEWATER, YOU KNOW, UH, WHENEVER WE CAN'T CARRY IT BY GRAVITY.

UH, AND BEING A FLAT AREA HERE, WE HAVE A LOT OF LIFT STATIONS.

YOU KNOW, WE'VE GOT ABOUT 86, UH, IT SAYS 82, SOMEWHERE IN THE, IN THE MID EIGHTIES WE HAVE, WHICH IS A LOT FOR THE CITY OF OUR SIZE.

YOU KNOW, WHAT'S LIKE THE AVERAGE OF CITY OUR SIZE YOU NORMALLY HAVE? WELL, UM, IT DEPENDS ON YOUR, YOU KNOW, UH, LIKE IN COLLEGE STATION, THEY WORK THERE.

THEY HAVE LESS, LESS, IT DOES THE SAME, BUT IT'S BIGGER GEOGRAPHICALLY.

JUST MORE FALL.

YEAH, YOU GET MORE FALL, YOU CAN PUT YOUR TREATMENT PLANTS AT THE BOTTOM, YOU KNOW, UH, SO THAT EVERYTHING FLOWS TO THE TREATMENT PLANT ADVANTAGE FLAT.

HERE WE GOT, YOU KNOW, HOUSTON HAS A LOT MORE TO DO TO SHARE OVER .

UH, BUT THEY, THEY, UH, ARE MAINTENANCE INTENSIVE.

UH, YOU KNOW, YOUR PUMPS WEAR OUT, UM, YOU'VE GOTTA REHAB THOSE,

[00:30:01]

SO, UM, YOU KNOW, BASED ON OUR LIFE EXPECTANCY, WE SHOULD BE INVESTING ABOUT 15 MILLION IN OUR LIFT STATIONS.

UM, AND YOU CAN SEE THAT, YOU KNOW, WE'RE NOT DOING THAT FOR FY 24.

WE HAVE BEEN FORCED TO DO THAT SOMEWHAT AS, UM, UNDER OUR AGREED ORDER WITH TCQ.

UM, HOWEVER THAT CAME TO AN END.

AND NOW, WE'LL, WE'LL GET THE, WE'RE GONNA GO INTO WHAT'S CALLED A CONSENT DECREE WITH, UH, THE EPA.

AND, UM, THEY WILL TELL US, YOU KNOW, WHICH LIFT STATIONS NEED TO BE.

WE HAVE WHEN, AND SO THAT PROGRAM IS, IS COMING OUT, UH, WASTEWATER TREATMENT.

WE DON'T HAVE, YOU KNOW, UH, AN ASSESSMENT OF HOW MUCH WE SHOULD INVEST ANNUALLY.

HOWEVER, WE, WE, THIS IS AN AREA WE'VE ALSO LEVERAGED SOME GRANT MONEY.

UM, OUR EAST DISTRICT SUPPORT TREATMENT PLANT WENT UNDERWATER AND HARVEY.

AND SO WE'VE GOT, UH, TWO GRANTS TO, UH, MITIGATE THAT AND HELP IMPROVE THE PLANT.

UH, ONE OF THE GRANTS WAS, UH, I THINK 6.6 MILLION.

THE OTHER ONE'S 32 MILLION.

SO, UH, THOSE HAVE BEEN GOOD, UH, FOR OUR SYSTEM.

AND, UH, WE'RE, WE'RE LEVERAGING THOSE, THE SAME THING, UM, WITH OUR CENTRAL DISTRICT PLANT THAT WENT UNDER WATER AND HEIGHT.

AND SO WE GOT A GRANT AFTER THAT AND, AND SOME IMPROVEMENTS THERE.

UM, WE'RE PUTTING A LOT OF OUR ARPA FUNDS INTO OUR WASTEWATER SYSTEM UNTIL THE PRIMARY USE OF THOSE ARPA FUNDS IS GONNA BE INTO A DATA SYSTEM, WHICH IS THE REMOTE MONITORING AND, UM, UM, ADJUSTMENT OF THE LIFT STATIONS AND THE TREATMENT PLAN.

WE CURRENTLY DON'T HAVE THAT.

UM, AND THAT IS, UM, SOMETHING THAT KIND OF HINDERS US.

WE, WE DON'T GET NOTICE, LIKE IF A PUMP FAILS UNTIL WE GO OUT AND LOOK AT IT, YOU KNOW, SO THAT, THAT IS SOMETHING WE FELT VERY CRITICAL AND, AND WE REALLY WANT TO USE THOSE R FUNDS BECAUSE IT WAS SUCH A BIG PROJECT.

WE KEPT, YOU KNOW, WE COULDN'T FIGURE OUT HOW TO FUND IT.

AND WHEN, WHEN WE GET THAT FUNDING FRAME, WE SAID, WELL, THIS IS THE TIME TO DO.

AND IT'S GONNA BE, I THINK IT'S, UH, 12 MILLION.

WE GOT A TOTAL OF 16 MILLION FROM OUR, I THINK WE'RE USING ABOUT 12 TO DO THE SC YOU DON'T HAVE, YOU DON'T HAVE SCADA AT JUST WASTEWATER.

DO YOU HAVE IT AT WATER TREATMENT? UH, IT'S THAT WATER AND THE BOTTLE PLANT.

UM, BUT THE WATER DOESN'T HAVE, YOU KNOW, THE, THE PUMP STATIONS THROUGHOUT THE SYSTEM, RIGHT.

WE'VE GOT THE EIGHT TWO ROOF STATIONS, YOU KNOW, THROUGHOUT THE WASTEWATER SYSTEM AND YOU KNOW THAT, SO WE HAVE TO PHYSICALLY GO TO NO FEEDBACK FROM THOSE.

YEAH.

WOW.

MOST OF THOSE WE DON'T HAVE, YOU KNOW, REMOTE MONITORING.

WOW.

SO YEAH.

THAT, THAT'S A PROBLEM.

YEAH, IT'S HUGE.

IT'S A LOT OF TIME DRIVING AROUND CONSTANTLY.

IT IS.

WE GO TO EVERY LIFT STATION EVERY DAY, SO, WOW.

SO THEY'RE NOT ELECTRONICALLY MONITORED OR ANY LIFT? THERE'S A FEW, THERE'S PROBABLY A HANDFUL, BUT FOR MOST PART, OUTTA 82, OUTTA 82 GATOR'S GOT A FINITE LIFE TOO WITH TECHNOLOGY.

AND SECURITY'S A BIG DEAL WITH SCADA NOW AS WELL.

SO THE SYSTEMS, A LOT OF SYSTEMS THAT ARE 10 YEARS OLD UP TO BE COMPLETELY RIPPED OUT AND ENGINEERED BECAUSE THEY'RE VERY ACCESSIBLE FROM SOMEBODY WANTS TO HACK IT.

SO YEAH.

YOU'RE LUCKY TO GET 10 YEARS.

YEAH.

SO THAT, THAT'S KIND OF A OVERVIEW OF EACH PROGRAM.

I WANTED TO JUST GO THROUGH THE DEBT, UH, PROPOSAL WE HAVE, JUST TO SHOW YOU HOW IT RELATES TO THE DIFFERENT PROJECTS AND THE DIFFERENT PROGRAMS. AND YOU KNOW, I KNOW WE WERE WORKING WITH 92 OR 97 MILLION.

WE WERE ABLE TO REDUCE THAT THIS YEAR BECAUSE, UH, AS I SAID, DANINA PROJECT WILL NOT BE UNTIL LATE SUMMER.

AND SO THE PAYMENT WILL BE MADE IN THAT Y 25 AND WE CAN, WE CAN PUT OFF THAT DEBT UNTIL 25.

SO, UM, THE DEBT CURRENTLY IS BROKEN DOWN INTO 23 MILLION FOR BAWA.

AND THAT'S REALLY TWO PROJECTS.

THAT'S THE RAW WATER REHAB, WHICH IS REPLACING A LOT OF THE PUMPS THAT DRAW THE WATER FROM THE CANAL.

AND THIS SET THE MAIN PLANT INTO, UH, OUR TREATMENT SYSTEM.

UH, THOSE PUMPS ARE AT THE END OF THEIR USEFUL LIFE AND THEY NEED TO BE REPLACED SO THAT

[00:35:01]

AND THEN THE EAST PLANT EXPANSION, WE HAVE $10 MILLION, AND THAT'S JUST TO DO THE FIRST PHASE OF THE CONTRACT.

SO IT COVERS DESIGN AND MAYBE SOME EARLY, UH, WORK PACKAGES.

THEN WE'LL GO OUT FOR THE, THE LARGER DEBT, UM, IN A, IN ABOUT A YEAR.

AND THAT'LL BE, UM, OVER $50 MILLION THAT WE NEED FOR THAT.

SO THE, THE WHOLE PROJECT IS ESTIMATED AT ABOUT 62 MILLION.

SO, UM, THE NEXT, UH, SEGMENT IS GENERAL FUND DEBT, AND WE'VE GOT, AS I MENTIONED, ENVIRONMENTAL HEALTH, UH, SOME FACILITY IMPROVEMENTS THAT WE HAVE.

UM, GARTH ROAD IS PLANNED TO, UH, BID SOMETIME THIS SUMMER.

SO, UH, WE WANT TO MAKE SURE WE HAVE OUR MATCH FOR THAT, THAT THAT'S ONE OF THE ITEMS UP THERE.

UH, MARKET STREET IS ABOUT TO BID OR MAYBE ADVERTISE FOR BIDDING RIGHT NOW.

UH, WE'RE, WE'RE GONNA AGAIN HAVE TO, WE KNOW, UH, PAY OUR SHARE OF THAT GRANT AND SO WE WANNA MAKE SURE THOSE FUNDS ARE AVAILABLE.

UH, WE'VE GOT, YOU KNOW, JUST SOME STREET IMPROVEMENTS AND SIDEWALK IMPROVEMENTS.

UM, AND THEN THE ANNUALS, ASPHALT STREET, THAT'S BASICALLY THE MILL AND OVERLAY TRACK.

UM, PART OF THAT, ME TOO.

THEN WE GET INTO, UM, STRONG WATER.

AS I SAID, WE DELAYED DANINA, HOWEVER, WEST BAYTOWN, WEST TEXAS AVENUE AND SOUTH MAIN DRAINAGE WOULD MOST LIKELY BE THIS YEAR BEFORE, UM, AND NEED THE MONEY BEFORE OCTOBER.

SO, UM, THOSE PROJECTS ARE NEEDED.

AND THEN UNDER THE TURS WE HAVE THE SAN JA CINO REGIONAL DETENTION AND THEN, UH, WATER AND SEWER.

WE'VE GOT, UH, I 10 LIFT STATION IS A VERY LARGE, UH, LIFT STATION NORTH MY 10.

IT BASICALLY, UM, PUMPS ALL THE WASTEWATER FOR THE AREA NORTH OF I 10 AND THE SAN JACINTO AREA.

SO AS THAT SAN JACINTO AREA DEVELOPS, I 10 LIFT STATION WILL BE OVERTAXED AND WE NEED TO IMPROVE THAT, UH, LIFT STATION.

SO THE $2 MILLION IS JUST TO DO THE RIGHT OF WAY COSTS ASSOCIATED WITH THE FORCE PAINT.

UM, AND THEN IT'LL BE A LARGER DEBT ISSUANCE IN FY 25 ONCE WE ACQUIRE THE RIGHT OF WAY THAT WE NEED FOR THAT.

UM, SOME OF THE OTHER PROJECTS ARE RELATED TO EITHER THE, THE, UM, SSO MITIGATION, WHICH THE TRUNK LINE SEWER EVALUATION THAT'S RELATED TO OUR SSO UH, PROGRAM.

UM, YOU'LL SEE THE ARPA SCADA, UH, UPGRADES.

WE HAVE, YOU KNOW, WE HAVE TO SUPPLEMENT THAT ARPA, UH, FUNDING FOR THOSE AS WELL AS A COUPLE OF OTHER TREATMENT PLANT PROJECTS AND TRANS WATERLINE, UH, WE WANT TO GET THAT STARTED THIS YEAR.

AND, UM, THERE'S ALSO A PROJECT FOR WATER METER REPLACEMENT THAT'S A TWO YEAR PROJECT, I THINK TOTAL OF ABOUT 4.2 MILLION.

IS THAT RIGHT? AND UH, AND THEN THE LEAD SERVICE LINE IS REALLY TO HELP US IDENTIFY, THAT'S A, A REQUIREMENT I THINK I'VE SPOKE ABOUT BEFORE, WHERE, UM, WE HAVE TO GO THROUGH AND IDENTIFY ALL THE, THE LINES WITHIN OUR PUBLIC SYSTEM AS WELL AS ON THE PRIVATE SIDE THAT HAVE LEAD IN.

AND SO WE HAVE UNTIL OCTOBER OF THIS YEAR TO DO THAT AND WE STARTED THAT, BUT UH, WE NEED TO SUPPLEMENT THAT CONTRACT SO WE CAN MAKE SURE WE GET IT DONE BEFORE THE DEADLINE.

UM, SO THAT, UH, INCLUDES ALL THE DEBT WE HAVE PLAN AND THAT, UH, TOTAL 75 MILLION.

IT IS REDUCED BECAUSE OF THE DANINO GOT TAKEN OFF FOR THIS YEAR.

BUT WE DO FEEL LIKE, YOU KNOW, THOSE ARE ALL PROJECTS THAT ARE NECESSARY, YOU KNOW, THAT HAS TO BE CUT SOMEHOW.

THEN WE, WE'D LIKE TO DISCUSS, YOU KNOW, HOW MUCH TO CUT AND, AND WHAT PROJECTS.

SO, UM, I WOULD LIKE TO ADD TWO THINGS JUST BEFORE YOU START HAVING THE CONVERSATION.

UM, REMEMBER WHEN WE TALKED ABOUT THE PROPERTY TAX CALCULATION AND HOW IT IMPACTS THE DEBT? THIS 15 MILLION, BECAUSE IT WAS APPROVED IN THE BUDGET, WAS A PART OF OUR PROPERTY TAX CALCULATION CURRENTLY.

SO THOSE DEBT SERVICE PAYMENTS WERE INCLUDED

[00:40:01]

UM, THE SECOND PIECE IS YOU, UH, VOICE CONCERNS ABOUT, UM, ISSUING THE DEBT ALTOGETHER EVEN THOUGH IT'S BROKEN OUT.

AND TYPICALLY THEY WOULD DO LIKE A ONE CO AND THEN IT WOULD HAVE TAX SUPPORTED, UTILITY SUPPORTED.

IT WOULD HAVE IT BROKEN OUT FOR US.

WE'LL HAVE THAT ONE CO AND THEN WE'LL HAVE A REVENUE ONE FOR BAWA.

UM, I DID TALK TO THE FINANCIAL ADVISOR AND WE CAN BREAK THEM ALL OUT IF YOU WOULD LIKE, WE COULD HAVE THREE DIFFERENT COS AND THAT WOULD BE LIKE WATER AND SEWER AND DRAINAGE.

WE CAN HAVE ONE FOR TURS AND THEN WE COULD HAVE ONE FOR STORM WATER, UM, AND A GENERAL FUND.

SO WATER AND SEWER AND DRAINAGE WOULD BE TOGETHER, GENERAL FUND, AND THEN YOU WOULD HAVE STONE, UH, TURS AND THEN YOU COULD HAVE YOUR REVENUE BOND FOR BWA.

THE ONLY DIFFERENCE THERE IS YOU LOSE, UH, ECONOMIES OF SCALE THERE BECAUSE YOU HAVE TO PAY MORE IN, UM, THAT COST OF ISSUANCE, RIGHT? LIKE TO HAVE THAT BROKEN OUT.

AND IT WAS ABOUT, UM, HE ESTIMATED IT WOULD BE ABOUT 60 TO $65,000 MORE IF YOU BROKE IT OUT.

BUT YOU CAN, SO YOU HAVE THAT OPTION.

UM, YOU GO WITH DOING THE ONE CO WE STILL COULD DEMONSTRATE IN THE PRESENTATION THAT IS BROKEN OUT AND THESE ARE SUPPORTING OTHER SOURCES EVEN THOUGH IT'S PROPERTY TAX BASED.

BUT THEY STILL WOULD BE, UH, BACKED BY PROPERTY TAX REGARDLESS BECAUSE THEY'RE SALES.

I GUESS Y'ALL HAVE ANY QUESTIONS? DISCUSSION? IF YOU, IF WE TAKE DANIEL BINA OUT NOW, WE'RE STILL GONNA HAVE TO ISSUE IT NEXT YEAR.

YES.

RIGHT.

AND SO, UM, AND THEN WE START TO GET INTO THE WHOLE WONKY THING WE TALKED ABOUT WITH THE RETREAT.

YES, WE'RE GONNA HAVE, WE'RE GONNA HAVE MORE MONEY NEXT YEAR, UH, WHEN THE TAX RATE, IF WE KEEP THIS TAX RATE 72, WHICH STAYS THE SAME, WE WILL HAVE MORE MONEY.

UM, THAT'S GONNA LOOK LIKE THERE'S MORE GENERAL FUND MONEY TO SPEND, BUT NOT REALLY.

YOU HAVE THE NO NEW MAINTENANCE AND UH, THE NO NEW RATE FOR MAINTENANCE AND OPERATION.

AND SO IF YOU LOOK AT WHAT IT WOULD BE THIS YEAR COMPARED TO WHAT IT WOULD BE NEXT YEAR, THAT WOULD BE OFF KILTER A LITTLE BIT.

UM, SO IT'S JUST A CONSIDERATION POINT.

IT'S UP TO Y'ALL IF Y'ALL WANT TO BORROW THE 90 MILLION AT THIS POINT, IF YOU HAD DANINA BACK IN, IF YOU DON'T WANT TO GET READY TO ADD THAT ONTO THE, IS IT 86 MILLION THAT'S DUE NEXT YEAR? I THINK IT'S WHAT WE HAVE PRELIMINARY, PRELIMINARY FOR THE FOLLOWING YEAR, I THINK WAS 86 MILLION.

AND SO THAT'D BE OH, FOR THE TOTAL? YES, FOR TOTAL WOULD BE A HUNDRED, 1 MILLION THAT YOU ISSUE IN NEXT YEAR.

UM, IT'S, THEY ALL PLAY TOGETHER AND SO WE JUST WANNA KIND OF OPEN UP THE DISCUSSION AND, AND THAT'S AS LONG AS WE DON'T ADD ANY NEW PROJECTS THOUGH.

'CAUSE THESE ARE CURRENT PROJECTS THAT'S IN THE CIP.

SO, UH, JUST TO MAKE SURE I'M CLEAR, YOU SAID THE BYLAW PORTION WOULD BE REVENUE BONDS AND THE REST OF THESE ARE COS MM-HMM .

OKAY.

AND I DO WANT TO CLARIFY ONE THING HERE, AND I DON'T KNOW IF WE TALKED ABOUT IT, BUT WE, WE NEED TO BE VERY TRANSPARENT.

SO THIS DANINA STORMWATER ACTUALLY THAT NEEDS TO BE ADDED IN HERE.

THE DANNY BE, NEEDS TO BE ADDED? NO, THE STORM WATER? NO, WE JUST, THE 7 MILLION ADVANCED FUNDING.

WAS THAT WEST BAYTOWN? YES.

WEST BAYTOWN.

NO, THAT WAS STORM WATER.

OH, I TALKED TO JOE ABOUT THAT AS WELL.

WHICH IS WHAT? SO I LOOKED AT THE FUND BALANCE.

IT'S REALLY A NEGATIVE.

LET'S SAY, UH, I CAN'T REMEMBER AS OF TODAY OR THE DAY I SPOKE TO HIM, IT WAS 1 MILLION SOMETHING AND HE'S, YOU KNOW, BECAUSE WE'RE GOING TO DO SIX, IT WAS 1.6.

UM, AND BECAUSE WE HAVE TO DO OUR BUDGET CLEANUP, UH, BUDGET CLEANUP FOR THE AUDIT, RIGHT? SO IT WOULD BE CLEAN FOR THE END OF THE YEAR OF THE AUDIT.

MM-HMM .

AND WHAT WE COULD DO IS TALK TO, UM, AND BASED ON WHAT WE ARE PROJECTING TO BRING IN FOR FY 24, WHICH IS ABOUT 4 MILLION, UM, WHEN WE DO OUR BOND POSITIVE, YES.

AND THEN WHEN WE DO OUR BOND RATING, WE COULD BE TRANSPARENT, HEY, THIS IS WHAT WE HAVE, BUT WE KNOW THAT WE'RE GONNA BRING IN $4.2 MILLION, SO WE MAY BE OKAY.

UM, SO HE'S WHERE'S THE NEGATIVE 7 MILLION AT THEN? THE 7 MILLION WE WILL BE REPLACING.

I KNOW, THAT'S WHAT I'M TRYING TO INSURANCE.

THAT'S WHAT I'M TRYING TO TALK ABOUT RIGHT NOW.

NOW, OH, OH, OKAY.

IS THAT THE WEST BAY TOWN AND TEXAS AVENUE? WHERE IS THAT ONE AT? SO THE BOTTOM LINE FOR THE, FOR THE COMMITTEE WEST, THE HARRIS COUNTY WHERE WE PAID THE HARRIS COUNTY MONEY, WEST BAYTOWN PAID WEST BAYTOWN IT, WEST BAYTOWN, WAS IT WEST MAYON? SORRY, WHAT? THAT WE PAID TO HARRIS COUNTY WAS FOR DANINA DAN, IT WAS DANIEL 5.16.

5.60, YES.

YEAH, THAT'S WHAT I WANT TO POINT OUT.

SO WE, THAT NEEDS TO BE ADDED BACK IN HERE.

[00:45:01]

PREVIOUS ADMINISTRATION DECIDED TO NOT GO OUT FOR THE DEBT ISSUANCE TO PAY THAT MONEY BACK.

THEREFORE THERE WAS A NEGATIVE $7 MILLION DEFICIT IN THE, IN THE, UM, BOOK RIGHT NOW.

AND SO WE HAVE TO BORROW THAT 7 MILLION JUST TO PAY THE CITY BACK FOR THAT.

EVEN IF WE DON'T DO THE FULL 15, WE STILL NEED TO BORROW 7 MILLION ON THIS.

WE SHOULD HAVE LOWER IT PAID BACK IN 2022.

OKAY.

I DON'T REMEMBER THAT AT THE CIP MEETING, BUT SO THAT WAS, THAT WAS, THIS IS AS WE'VE TALKED TO COUNCIL ABOUT FINDING DIFFERENT THINGS.

YEAH, THIS IS ONE OF THOSE FINDING DIFFERENT THINGS.

OKAY.

THIS WAS ON THE FINANCE, ON THE FINANCE AND ADMINISTRATION SIDE.

THIS WAS NOT ON PUBLIC WORK SIDE.

OKAY.

PUBLIC WORKS DID THEIR PORTION BY BRINGING THE ADVANCED FUNDING SO THEY COULD DO THE WORK AND PAY HARRIS COUNTY.

IT WAS, IT WAS LOST ON THE FINANCE AND ADMINISTRATION SIDE.

OKAY.

AND THAT'S UNDERSTANDABLE BECAUSE, UM, WITH CIP, AND JUST TO KIND OF LET Y'ALL KNOW, WE DID DO A LOT OF LEGWORK IN TERMS OF LOOKING AT THE PROJECTS THAT ONE HAD GRANT FUNDING MATCHING FUNDS THAT WE KNEW THAT HEY, WE ALREADY GOT A GRANT AND SO WE DON'T WANT TO SCRATCH THOSE.

UM, THEN WE LOOKED AT PROJECTS THAT WERE EITHER ONGOING, WHY WEREN'T THEY FINISHED YET? WE WERE SUPPOSED TO HAVE BEEN FINISHED.

AND SO WE KIND OF STARTED LOOKING AT THOSE AND SO WE, WE REALLY WENT DOWN AND BARE BONE IT.

LIKE, SO WHAT YOU SEE IS, IS WHAT WE FELT NEEDED TO GO THROUGH BECAUSE WE DID ALL THAT CLEANUP DURING THE CIP THAT WILL BRING US UP TO NOW 82.7, SOMEWHERE AROUND THERE WE ADD THAT 7 MILLION.

WE MAKING 7 MILLION.

7 MILLION WAS FOR THE DANINO WHERE WE'VE ALREADY SPENT MONEY IN 20 THAT WE SENT OUT TO UH, HARRIS COUNTY.

OKAY.

AND THAT SHOULD HAVE BEEN REQUESTED FOR THE DEBT ISSUANCE THAT WASN'T DONE.

AND DOES THIS COMMITTEE WANNA BORROW THE OTHER 8 MILLION FOR THE FULL 15? YEAH, I GUESS FOR THAT, I MEAN, WHAT I THINK FINANCE COMMITTEE NEEDS TO DO IS WE'RE, WE'RE GONNA PUT FORWARD A RECOMMENDATION TO THE COUNCIL AS A WHOLE, JUST SAYING WHAT LEVEL ARE WE COMFORTABLE WITH? NOT EVEN REALLY, WE'RE NOT GONNA SCRUTINIZE THIS LIST THAT'S FOR THE OTHER COMMITTEE TO DO, BUT THAT FOR ME TO KNOW KIND OF WHAT, I GUESS I'D LIKE TO SEE WHAT DOES THE FUND LOOK LIKE? WHAT WOULD BE THE ANNUAL PAYMENTS ON THE DEBT? I MEAN, I MEAN YOU SEE THAT THAT NUMBER IS AFFORDABLE ANNUALLY.

I GUESS I MISS DEBT PAYING THESE DEBTS OFF.

SO, UM, I DO NOT, THAT GOES BACK TO YOUR ORIGINAL POINT, THERESA, WHEN YOU STARTED THAT, WHEN THE BUDGET WAS ADOPTED, THIS TAX RATE, THE, THE, THE INS DEBT PORTION OF YOUR, OF YOUR RATE WILL BE CONSISTENT TO PAY THIS AMOUNT OF DEBT.

I BELIEVE HOW JOE SET UP THE, THE, THE FUNDING.

GO AHEAD.

OH NO.

UH, SO I DO HAVE, WHEN WE UM, ARE PROPOSING TO ISSUE DEBT, I HAVE TO GIVE CERTAIN, UM, FINANCIALS TO OUR FINANCIAL ADVISOR AND HE RUNS CAPACITY LEVELS TO SEE IF WE ARE ABLE TO HOLD THE CAPACITY.

SO BECAUSE WE, WE, WE'VE MADE SOME MORE CHANGES, I HAVE TO SEND IT TO HIM AGAIN TO SEE WHERE WE ARE.

OKAY.

SO I DON'T HAVE THE SET NUMBERS ON IT, BUT AT THE TIME OF THE BUDGET WE DID HAVE THE CAPACITY TO ISSUE THE DEBT WE WERE PROPOSING AND THE DEBT PORTION FOR THE TAX RATE ONLY APPLIES TO THE GENERAL FUND CIPF UP THERE.

THAT'S WHAT I WAS GONNA, YES.

YEAH, THAT'S ONLY THE GENERAL FUND.

RIGHT.

SO LIKE TURS, I MEAN I DON'T KNOW WHAT, I DON'T KNOW OFF THE TOP OF MY HEAD.

OBVIOUSLY I DON'T KNOW THE ANNUAL REVENUE FORTS OR ITS ABOUT TWO PAYING THE 0.4 MILLION AND WE GET ABOUT 600,000 FROM UM, HARRIS COUNTY.

I WANT SAY FOR CHAMBERS COUNTY HARRIS, ONE OF THE COUNTIES.

AND WHAT WOULD BE ON SEVEN AND A HALF MILLION? LIKE WHAT WOULD BE OUR ANNUAL? SO I, UH, WHEN WE WERE PROPOSING $11.4 MILLION, IT WAS ABOUT 1.1.

SO NOW WE'VE REDUCED IT.

SO IT'LL BE A LITTLE UNDER A MILLION DOLLARS, FOUR ORDERS OF MAGNITUDE FOR THIS COMMITTEE.

IT'S 1 MILLION FOR EVERY 10 MILLION BORROW.

SO 1 MILLION THAT SERVES A YEAR FOR EVERY 10 MILLION BORROW.

THAT'S GOOD.

OKAY.

THANK,