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I'D LIKE TO WELCOME YOU TO THIS SPECIAL MEETING OF THE BAYTOWN AREA WATER AUTHORITY.
CALL THE MEETING TO ORDER AND ANNOUNCE THAT WE HAVE A QUORUM.
OUR FIRST ITEM OF BUSINESS WILL BE CITIZEN COMMENTS.
DO WE HAVE ANY CITIZENS WISHING TO SPEAK? ALRIGHT, OUR NEXT ORDER
[a. Consider approving the minutes of the Baytown Area Water Authority Special Meeting held on May 7, 2025. ]
OF BUSINESS WILL BE TO CONSIDER APPROVING THE MINUTES OF THE AUTHORITY SPECIAL MEETING HELD ON MAY 7TH, 2025.ARE THERE QUESTIONS OR DISCUSSION? HEARING NONE.
[a. Receive and discuss the Baytown Area Water Authority Fiscal Year 2025-26 Proposed Budget.]
NOW RECEIVE AND DISCUSS THE BAYTOWN AREA WATER AUTHORITY FISCAL YEAR 20 25, 26.UM, THIS IS THE PROPOSED BUDGET FOR FY 26.
UM, OUR BEGINNING WORKING CAPITAL IS 8.9 MILLION.
WE HAVE A TOTAL OF PROPOSED REVENUE OF 22.3 MILLION AND THAT INCLUDES A 6.7% INCREASE THAT YOU WILL HEAR ABOUT SHORTLY.
UM, WE ALSO HAVE AS OUR OPERATING EXPENSES, 13.9 MILLION.
AND THEN WE HAVE TRANSFERS TO DEBT SERVICE BY, WITH CIP AND THE GENERAL FUND TOTALING, UM, OUR EXPENDITURES TO 21.2 MILLION WITH THE ENDING WORKING CAPITAL OF 9.9, WHICH IS 260 DAYS OF OPERATING.
AND I'M HAPPY TO ANSWER ANY QUESTIONS.
WHAT HAPPENED WITH THE, UH, THE ESTIMATED AND THE BUDGET, UM, OF SALE OF WATER? OTHER 'CAUSE IT'S, WE, WE ESTIMATED 1.9 MILLION AND IT CAME IN AT 1.6.
WHAT? OH, BECAUSE THAT'S A PRECIPITOUS DROP.
IS IT A CITY? I THINK THAT'S THE, UH, DID YOU SAY THE SALE OF WATER OR SALE OF WATER? THERE'S BAYTOWN AND THEN THERE'S THE OTHER CATEGORY.
YOU TALKING ABOUT OTHER CUSTOMERS? I'M SO, UM, THERE WAS A DROP IN THAT ONE.
YOU WANNA LOOK AT THE, DO YOU HAVE THE SHEET? WHAT I'M SEEING WHERE, SO, SO THE 1.65 IS JUST THE ESTIMATION THAT WE'RE BASING IT OFF OF WITH ACTUALS RIGHT NOW.
SO WE COULD POTENTIALLY COME IN HIGHER, UM, AT THE END OF THE YEAR.
THAT'S JUST PROPOSING WHAT WE ARE ESTIMATING FOR THE 4 25.
BECAUSE WE ESTIMATED MUCH HIGHER EARLIER, I GUESS YES.
WHEN WE DID THE BUDGET, SO MM-HMM
THERESA IS, IS THAT, UM, PRIMARILY DUE TO JUST, UM, LESS DEMAND, UM, FROM SOME OF THE WHOLESALE CUSTOMERS? UM, POTENTIALLY.
I MEAN, 'CAUSE WE ARE BASING IT OFF OF OUR ACTUALS CURRENTLY.
SO YOU DON'T HAVE THE LAST FEW MONTHS IN IT OR MAYBE, OR NO, WE HAVE, YEAH, RIGHT FOR THE END OF THE FISCAL YEAR.
'CAUSE THIS IS JUST A PROJECTION FOR THE END OF 25, WHICH IS THE END OF SEPTEMBER.
SO THAT'S ACTUALS THEN, THAT THERE'S NO PROJECTION FOR THE LAST THREE MONTHS POTENTIALLY? N NO, WE HAVE THE PROJECTION FOR THOSE THREE MONTHS IN THERE.
THERESA, IF THE NUMBERS WERE TO HOLD PER YOUR ESTIMATES, THAT WOULD EQUATE TO, UH, LESS DEMAND AND LESS PURCHASING FROM SOME OF OUR WHOLESALE CUSTOMERS? CORRECT.
ALRIGHT, DOES ANYONE ELSE HAVE A QUESTION OR DISCUSSION? ALRIGHT, THANK YOU VERY MUCH.
UM, NEXT WE WILL, UM, CONSIDER A RESOLUTION TO SET A PUBLIC HEARING FOR THE, UH, FISCAL YEAR 20 20, 20 25, 26 PROPOSED BUDGET.
UH, MADAM PRESIDENT, WE WERE ALSO GOING TO PRESENT THE RATE STUDY AS PART OF THE BUDGET.
SO, UH, IF I COULD PULL UP THAT PRESENTATION.
AND, UH, COLO ENGINEERS HAS DONE OUR RATE STUDY FOR THIS YEAR, AND I HAVE, UH, JENNIFER IVY HERE FROM COLO TO PRESENT THE
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RATE STUDY.UM, SO I'M GONNA GO THROUGH OUR STUDY ASSUMPTIONS AND THEN PRESENT A THREE YEAR FINANCIAL FORECAST.
SO YOU JUST SAW, UH, THE 2026, UH, BUT WE'RE GONNA SHOW YOU 25 THE WAY WE PROJECT IT TO END THROUGH 27.
SO YOU CAN ALSO SEE WHAT'S COMING POSSIBLY NEXT YEAR BASED ON OUR ASSUMPTIONS.
AND THEN WE'LL TALK SPECIFICALLY ABOUT FISCAL YEAR 26 AND OUR RATE INCREASE THAT WE'RE RECOMMENDING.
SO WE'RE ASSUMING THAT DEMAND WILL GROW AT 2% PER YEAR.
THIS, THIS IS BASED ON LOOKING AT SOME HISTORIC PROJECTIONS.
UM, IT HAS BEEN A LITTLE BIT UP AND DOWN, BUT, SO WE'RE LOOKING, FOCUSING REALLY ON THE TREND.
WE'RE ALSO ASSUMING GENERAL INFLATION OF 3% PER YEAR.
MINIMUM OPERATING RESERVE IS 60 DAYS OF O AND M, SO WE'RE MAKING SURE THAT WE'RE MAINTAINING THAT LEVEL OR HIGHER.
AND FOR OUR DEBT SERVICE COVERAGE, WE'RE TARGETING 1.05 TIMES, MEANING FOR OUR NET REVENUE TO EXCEED DEBT SERVICE BY AT LEAST 5%.
THE LEGAL MINIMUM IS JUST 1.0 TIMES.
SO WE'RE LOOKING TO HAVE A LITTLE BIT OF A BUFFER THERE.
THE DRIVERS FOR THE INCREASE, PRIMARILY WE'RE LOOKING AT THE DEBT SERVICE COVERAGE.
SO WE ALSO HAVE A $69 MILLION, UH, PLANT EXPANSION PROJECT IN FY 26.
UH, WE ARE USING A TEXAS WATER DEVELOPMENT BOARD LOAN, UM, TO FINANCE THAT.
AND SO THAT INCREASED DEBT SERVICE PAYMENT IS CAUSING US TO HAVE TO RAISE RATES IN ORDER TO MEET THAT MINIMUM COVERAGE.
UM, WE ALSO WILL NEED SOME ADDITIONAL DEBT LATER ON, UH, IN FY 27, ABOUT $8 MILLION JUST TO CONTINUE WITH THE PROJECTS THAT ARE IN THE CIP CURRENTLY.
AND THAT'S ABOUT $41 MILLION IN OTHER PROJECTS ON TOP OF THAT $69 MILLION PLANT.
SOME OF THOSE PROJECTS INCLUDE, UH, THE LIST HERE, RAW WATER REHAB BACKWASH AND DECAMP PUMP REPLACEMENT, GROUND STORAGE, TANK REHAB FILTER, SCOUR IMPROVEMENTS, AND THEN THE PFAS REGULATORY TREATMENT PROJECT.
SO THOSE ARE THE FIVE LARGEST PROJECTS WITHIN THAT $41 MILLION TOTAL.
SO LOOKING AT THE THREE YEAR FINANCIAL PLAN, UM, WE HAVE TWO DIFFERENT SCENARIOS HERE TO SHOW YOU.
UM, THE FIRST IS IF YOU DO NOTHING, IF YOU DON'T RAISE RATES, UM, FOR FISCAL YEAR 26 OR 27, THEN WHAT HAPPENS WITH THE YEAR END RESERVES? UM, YOU KNOW, AS, AS THERESA SHOWED YOU, UH, THERE IS, THERE ARE HEALTHY RESERVES CURRENTLY.
UM, BUT THAT WOULD START TO DROP BECAUSE WE WOULD BE USING THOSE RESERVES TO FINANCE O AND M AND CIP.
SO IT WOULD DROP TO 167 DAYS AT THE END OF FISCAL YEAR 26 WITHOUT THE INCREASE, BUT THEN IT WOULD DROP TO NEGATIVE IN FISCAL YEAR 27.
SO WE REALLY NEED THESE RATE INCREASES THAT WE'RE PROPOSING IN ORDER TO KEEP THOSE RESERVES UP AT AT LEAST 60 DAYS.
THE DEBT SERVICE COVERAGE WOULD ALSO DROP DOWN TO 1.06 TIMES IN FISCAL YEAR 26, BUT DOWN TO 0.74 TIMES IN FISCAL YEAR 27, MEANING YOU'RE NOT ABLE TO MAKE THOSE DEBT SERVICE PAYMENTS.
UM, SO THAT'S WHY WE NEED THESE INCREASES.
SO WE'RE PROPOSING 6.7%, AS THERESA MENTIONED, FOR FISCAL YEAR 26.
AND THEN WE WE'RE PROJECTING THAT THAT WOULD BE FOLLOWED BY A SECOND 6.7% INCREASE IN FISCAL YEAR 27.
UM, WITH THOSE TWO INCREASES, YOU CAN SEE THAT THE OPERATING RESERVES STAY VERY HEALTHY, UM, WELL ABOVE THE 60 DAY MINIMUM.
AND AS I MENTIONED, IT'S REALLY THE DEBT SERVICE COVERAGE THAT'S DRIVING THESE INCREASES.
SO WHILE THE COVERAGE IS STILL WELL ABOVE THE 1.05 TIMES IN FISCAL YEAR 26, IT DROPS DOWN TO THAT 1.05 TIMES IN FISCAL YEAR 27.
UM, AND THAT'S BECAUSE THAT WATER DEVELOPMENT BOARD LOAN, THE FIRST INTEREST PAYMENT IS DUE IN FISCAL YEAR 26, BUT THEN FISCAL YEAR 27 IS WHEN THE FULL PAYMENT HITS THE PRINCIPAL PLUS THE TWO INTEREST PAYMENTS.
AND SO THAT'S WHY WE WANTED TO BE SURE WE LOOKED OUT BEYOND JUST 26.
WE WANTED TO LOOK AT WHAT DOES THAT DO FOR YOU IN 27 SO WE COULD SMOOTH OUT THOSE RATE INCREASES AND NOT HAVE A HUGE INCREASE COME
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TO YOU IN 27.SO WE'RE GONNA SELL BONDS WHEN WE DO THIS EXPANSION.
WHY WOULD WE NOT SELL BONDS INSTEAD OF BEING FORCED INTO RAISING RATES BY THIS FREE MONEY OR THIS, THIS LOAN FROM THIS AGENCY? BECAUSE 6%.
SO WHEN WE ORIGINALLY, UM, LOOKED AT THE EXPANSION PROJECT, WE COMPARED SCENARIOS OF ISSUING, UH, BONDS VERSUS GETTING A WATER DEVELOPMENT BOARD LOAN.
AND THE BONDS WERE MORE EXPENSIVE.
THE RATE IS HIGHER ON THE BONDS, BUT YOU HAVE A LONGER TERM TO PAY IT OFF.
YOU, YOU'RE NOT FORCED INTO WITHIN A YEAR.
THE THESE, THIS WATER DEVELOPMENT BOARD LOAN IS 30 YEARS, CORRECT? YES.
THIS IS A, THIS IS A 30 YEAR LOAN BASICALLY.
AND THE BOND REPAYMENT ALSO TYPICALLY STARTS RIGHT AWAY.
UM, ACTUALLY IT'S USUALLY THESE LOANS THAT YOU'RE ABLE TO DELAY REPAYMENT.
THIS ONE WE'RE NOT DELAYING REPAYMENT, BUT SOME OF THE LOANS ARE, YOU CAN ACTUALLY DELAY REPAYMENT FOR A FEW YEARS.
SO IF WE WERE USING BONDS TO FINANCE THIS, THE SITUATION WOULD LIKELY BE WORSE BECAUSE YOUR INTEREST RATE WOULD BE HIGHER.
YOU'RE STILL GONNA HAVE THOSE DEBT SERVICE PAYMENTS DUE RIGHT AWAY AND YOU'RE STILL GONNA HAVE THIS COVERAGE REQUIREMENT.
AND, UH, IS IT, AND THIS HAS NOTHING TO DO WITH THE EXPANSION, THIS IS JUST THIS $41 MILLION THAT YOU MENTIONED OF CAPITAL IMPROVEMENT.
IS THAT WHAT THIS IS COVERING? THIS IS COVERING BOTH THE CAPITAL IMPROVEMENT, THE 41 MILLION PLUS, THE $69 MILLION EXPANSION.
BUT IT, IT IS THE AND ALL AND, AND THE, AND THE CAPITAL EXPANSION, ALL THE CAPITAL, THAT'S ALL NECESSARY.
'CAUSE THAT'S A, THAT'S, THAT'S WHAT WE BUILT THE, THE, THE BEAST FOR.
YOU KNOW WHAT I MEAN? JUST A HANDFUL OF THINGS SEEMS, SEEMS LIKE A LOT OF MONEY REALLY QUICK.
WELL ALSO, I JUST WANNA POINT OUT TOO THAT THE $41 MILLION THAT'S OVER THE NEXT FIVE YEARS.
THAT'S, SO THAT GOES TWO YEARS BEYOND THIS FORECAST.
BUT WE'VE CONSIDERED IT TO MAKE SURE THAT WE'RE NOT MISSING ANOTHER SPIKE THAT MIGHT BE COMING, BUT I'LL LET STERLING SPEAK TO THE PROJECTS.
SO TO ADDRESS YOUR QUESTION ABOUT ARE THE PROJECTS NECESSARY THOUGH, ALL THE PROJECTS THAT ARE IN THERE ARE PROJECTS THAT WE WOULD CONSIDER TO BE NECESSARY.
UM, THERE'S VARIOUS DIFFERENT COMPONENTS.
YEAH, THERE'S VARIOUS DIFFERENT COMPONENTS, YOU KNOW, WITH, WITH THE TREATMENT PROCESS.
AND SO, YOU KNOW, WE'RE NOT ABLE TO ADDRESS EVERYTHING ALL IN ONE YEAR.
SO WE TRY TO STAGGER IT AND, AND PLANT ACCORDINGLY.
UM, ESPECIALLY WITH THE, UM, THE MAIN PLANT, THE ORIGINAL FRESH LAND PLANT.
THAT PLANT IS, YOU KNOW, BUILT, STARTED IN 1979, GOING ONLINE IN 81.
SO, YOU KNOW, SOME OF THOSE INFRASTRUCTURE COMPONENTS ARE THINGS IN WHICH THAT WE HAVE, UH, ESSENTIALLY HELD TOGETHER SO THAT WE CAN GET IT TO A POINT WHERE WE CAN ADDRESS IT.
SO THAT'S PRIMARILY WHERE THE 41 MILLION IS COMING FROM IS, IS GETTING THAT PLANT UP TO SPEED, THAT THAT'S PRIMARILY, AND THEN THERE ARE SOME REGULATORY REQUIREMENTS THAT WE HAVE, UM, THAT ARE NEWER REGULATORY REQUIREMENTS THAT WE HAVE TO IMPLEMENT IN ORDER TO STAY COMPLIANT WITH THE FUTURE CHANGES.
AND, AND, AND MY CONCERN IS, YOU KNOW, I DON'T KNOW ANYBODY THAT'S GETTING 6% RAISES THESE DAYS AND, YOU KNOW, TO ASK THAT OF OUR PEOPLE, WE DON'T HAVE JUST A, WE'RE NOT SUPER WEALTHY TOWN HERE AND WE'RE JUST ASKED, WE'RE, WE'RE PUTTING A BIG BURDEN ON A LOT OF PEOPLE AND I WANNA MAKE SURE THAT IT IS ABSOLUTELY NECESSARY BECAUSE I ALREADY HAVE PEOPLE TELL ME BAYTOWN HAS THE HIGHEST WATER PRICES.
YOU KNOW, AND I HEAR THAT ALL THE TIME.
SO THIS IS NOT GONNA HELP ME IN THAT ARGUMENT.
SO, AND I DO KNOW OUR COSTS ARE GOING UP.
I KNOW HARRIS COUNTY GOES UP EVERY YEAR BY ON OUR WATER INTAKE, BUT STILL, YOU UNDERSTAND MY CONCERN.
MAYBE THERE'S A POINT OF CLARIFICATION.
UM, IS THAT WHAT WE THINK OUR FINANCE CHARGES WILL BE FOR GETTING THIS MONEY OR IS THAT PART OF OUR, UM, JUST OUR DEBT SERVICE COVERAGE MULTIPLIER OR THE, WHICH I SEE HERE IS 1.05.
WELL, THE, THE 6.7% IS THE RATE INCREASE THAT WE'RE RECOMMENDING FOR RIGHT.
UM, THE, THE LOAN, I'M NOT SURE WHAT THE INTEREST RATE IS ON THAT.
BUT I WOULD EXPECT IT'S LOWER THAN 6% MUCH.
I THINK FINANCING RIGHT NOW WE,
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I DON'T KNOW, FOUR TO FIVE DEPENDING ON FOR BONDS.AND THIS IS SUPPOSED TO BE LOWER THAN WHAT OUR BOND RATE WOULD NORMALLY BE.
YEAH, WE'RE THINKING IT'S TWO POINT A HALF TO 3%.
UM, I JUST WANNA MAKE SURE I, I HEAR YOU WELL.
I, I JUST SAW WHEN I, WHEN I READ THIS, IT SAYS 6% IN THE BUDGET FOR SALES AND OTHER CUSTOMERS AND, AND THAT'S WHY I WASN'T EXPECTED 6.7 'CAUSE THAT'S NOT EVEN WHAT'S IN THE BUDGET.
RIGHT? INITIALLY WE WERE LOOKING AT 6%, THAT WAS OUR, OUR INITIAL LOOK AT IT AND WE, UM, YOU KNOW, LIKE I SAID, WE'RE TRYING TO LOOK BEYOND JUST THIS YEAR, UH, TO MAKE SURE THAT IF WE WENT FORWARD WITH 6%, WE'RE NOT GONNA END UP COMING BACK TO YOU NEXT YEAR WITH 10%.
UM, SO WE'RE TRYING TO SMOOTH IT OUT BECAUSE WE DO RECOGNIZE THAT VERY SIGNIFICANT RATE SPIKES ARE DIFFICULT FOR CUSTOMERS TO TAKE ON ALL AT ONCE.
SO BY SMOOTHING IT OUT AND DOING TWO 6.7%, YOU KNOW, THAT HELPS TO KEEP ANY FUTURE RATE SPIKE DOWN.
SO THE RATE, THE TWO RATE INCREASES, AT WHAT TIME ARE, ARE YOU GOING RECOMMEND THOSE? THOSE WOULD BE AT THE BEGINNING OF THE FISCAL YEAR.
AND THEN THE NEXT OCTOBER WE'LL SEE ANOTHER ONE.
UM, SO I WAS JUST GONNA GIVE A LITTLE BACKGROUND ON, UH, THE PROJECTS.
UM, WE HAD, YOU KNOW, 10 YEARS OR SO AGO A STUDY DONE BY CONSULTING FIRM THAT PRODUCED A 10 YEAR, UM, PLAN FOR PROJECTS AT THE PLANT, UH, TO MAKE SURE THAT, YOU KNOW, WE KEEP THE PLANT IN GOOD OPERATING CONDITION.
UH, SO WE CAME TO THE END OF THAT 10 YEAR PLAN, UM, BASICALLY LAST YEAR.
AND SO WE COMMISSIONED, UH, COROLLA TO LOOK AT OUR PLANTS, UH, THIS YEAR FOR CONDITION, DO A CONDITIONED ASSESSMENT AND PRODUCE A NEW 10 YEAR PLAN FOR OUR CAPITAL PROJECT.
UM, WE'RE NOT QUITE FINISHED WITH THE 10 YEAR PLAN, BUT THEY DID COME UP WITH, UH, A FEW PROJECTS THAT ARE INITIALLY NEEDED.
AND SO WE HAVE THE FIRST COUPLE OF YEARS OF THAT AND THAT THOSE WENT INTO THIS RATE STUDY.
UH, BUT WE HAVEN'T APPROVED ANY OF THAT THOUGH.
THE 10 YEAR PLAN? NO, NO, BECAUSE WE'RE NOT COMPLETE ON THAT.
BUT LIKE I SAY, WE'RE TRYING TO SQUEEZE IT IN TO, YOU KNOW, HAVE THAT DONE AND THEN THE RATE STUDY, UM, WE'LL USE THAT INFORMATION, BUT, YOU KNOW, IT'S, IT'S HARD TO DO THAT WITHIN THE COMPRESSED TIMELINE OF, YOU KNOW, HAVING THE RATE STUDY HAVE TO GO INTO THE BUDGET AT THIS TIME.
SO WE ARE GONNA COMPLETE THAT, UH, 10 YEAR PLAN AND WE'LL BE PRESENTING THAT LATER THIS YEAR.
BUT JUST TO LET YOU KNOW, THOSE PROJECTS ARE COMING OUT OF OUR NEXT, UH, YOU KNOW, 10 YEAR PLANNING CYCLE OF THE CONDITION ASSESSMENT OF THE PLANT.
AND THE 6% WAS AN INITIAL ESTIMATE.
UM, LIKE I SAY, WE JUST GOT THE FIRST COUPLE YEARS, UH, DATA FOR THE CONDITION ASSESSMENT AND SO THAT BUMPED IT TO 6.7%, WHICH IS JUST TO MAINTAIN, UM, ALL OF OUR MINIMUM COVERAGES THAT, UH, JENNIFER TALKED ABOUT.
AND THEN FOR THE, THE PROJECT ESTIMATES ABOUT, YOU KNOW, HOW MUCH EACH, EACH OF THEM WILL COST THAT EACH TOOK INTO CONSIDERATION INFLATION OVER THE NEXT FIVE YEARS TO DETERMINE THE COST OF THE PROJECTS OR YOU USING THE COST OF THE PROJECTS TODAY, THEY USE A, UM, CONTINGENCY FACTOR AND THE FARTHER OUT IT IS, THE HIGHER THE CONTINGENCY MM-HMM
SO IT'S TOTAL, I'M JUST TRYING TO UNDERSTAND HOW REAL THE 41 MILLION IS.
AND WITHIN THE 41 MILLION, THE LAST ITEM ON THE LIST IS THE PFAS, UH, PROJECT.
IT WAS MY UNDERSTANDING FROM PREVIOUS MEETINGS THAT THERE COULD POSSIBLY BE SOME GRANT MONEY AVAILABLE FOR THAT.
SO, UM, WE DID APPLY FOR A GRANT AND WE DID NOT RECEIVE THE GRANT, UH, FOR THIS YEAR.
UM, HOWEVER, WE DID HAVE SOME GOOD NEWS IN THAT EPA HAS DELAYED THE IMPLEMENTATION OF, YOU KNOW, THE REQUIREMENTS.
SO WE HAVE A COUPLE MORE YEARS TO PREPARE.
UM, AND SO NEXT YEAR WE'LL APPLY FOR A GRANT AGAIN AND HOPEFULLY CAN GET THAT THE, UH, THE, I THINK THE COSTS THAT ARE INCLUDED HERE ARE TO DO THE ENGINEERING STUDY, UH, FOR THE IMPROVEMENTS THAT ARE REQUIRED.
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AND WE'RE DELAYING THE ENGINEERING STUDY YEAR.WE WE'RE NOT GONNA DO IT THIS, THIS, UH, IN FY 26 BECAUSE THE IMPLEMENTATION HAS BEEN DELAYED AND WE WE'RE GONNA APPLY AGAIN FOR THE GRANT.
AND SO HOPEFULLY IF WE GET THE GRANT, IT, YOU KNOW, MIGHT COVER ENGINEERING AND CONSTRUCTION AND WE CAN LOWER OUR COSTS THERE.
BUT WE DO HAVE SOME COSTS INCLUDED, UH, IN CASE THAT IS NOT RECEIVED.
SO BACK TO, UH, WHAT WAS SPOKEN ABOUT, UH, THE 6.7, SO THE 6.7 IS ACTUALLY 13.4% AFTER TWO YEARS.
6.7 IN 27, CORRECT? WELL, WELL JUST MORE THAN BECAUSE CLARIFY ON TOP OF THE SIX SEVEN, RIGHT? IT'S, IT'S COMPOUNDED, RIGHT, EXACTLY RIGHT.
SO CAN YOU, CAN YOU SPEAK AND, AND I, I REALIZE WE'RE ASKING YOU QUESTIONS IN THE MIDDLE OF YOUR PRESENTATION AND THAT'S FINE.
I APOLOGIZE FOR THAT BECAUSE YOU MAY BE ADDRESSING THIS LATER, BUT I'M GOING TO ASK IT ANYWAY.
CAN YOU, UM, TELL US WHAT 6.7%, UH, MEANS IN DOLLARS TO THE AVERAGE TO THE QUOTE UNQUOTE AVERAGE PERSON'S, UH, WATER BILL? SO, UM, I MEAN, BA DOESN'T HAVE RETAIL CUSTOMERS.
I DO HAVE THE, UM, ACTUAL COSTS INCLUDED ON THE SCREEN HERE.
UM, SO THERE'S DIFFERENT RATES FOR THE CITY AND FOR THE OTHER CUSTOMERS.
ACTUALLY, YOU RAISE A GOOD POINT.
SO ACTUALLY WE ARE TALKING ABOUT A RATE INCREASE THAT WILL BE CHARGED TO THE CITY OF BAYTOWN, CORRECT? CORRECT.
AND THEN THE CITY OF BAYTOWN WILL CHARGE ITS CUSTOMERS.
THE CITY DECIDES WHATEVER IT DECIDES, DECIDE DECIDES ITS RATES, WHATEVER IT DECIDES.
'CAUSE IT INCLUDES, DECIDES, YOU KNOW, BOTH WATER AND SEWER WITHIN THE SAME FUND.
AND SO THEY HAVE TO CONSIDER BOTH.
SO IT'LL PROBABLY MORE THEN
UM, IT, IT WILL PROBABLY BE MORE, YES.
IS THERE ANY CONCERN OR THOUGHT THAT, THAT ARE OUTSIDE CUSTOMERS, THE COMMUNITIES AROUND HERE THAT BUY WATER FROM US, THAT THEY MAY SAY, WELL, WE DON'T WANNA PAY $4 AND 14 CENTS PER THOUSAND AND GO ELSEWHERE.
DO THEY HAVE ANY ALTERNATIVE? ARE THEY BASICALLY HELD CAPTIVE BY US? YEAH, THEY'RE UNDER CONTRACT.
YEAH, I'LL LET STERLING SPEAK TO THAT.
YEAH, THEY'RE, THEY'RE UNDER CONTRACT.
SO IF THEY WERE, YOU KNOW, IF THEY ELECTED THAT THEY WANTED TO, YOU KNOW, GET OUT OF THAT, UM, MOST OF THOSE TERMS GO TO AROUND 2040.
SO THERE MAY BE A A, A COUPLE HERE AND THERE, THERE'S ONE THAT'S ON THE, ON THE AGENDA FOR TODAY, UM, THAT REQUESTED A, A INCREASE IN CAPACITY AND WE IN TURN ALSO EXTENDED THAT AGREEMENT, THE LENGTH OF THE AGREEMENT.
UM, SO, BUT THE MAJORITY OF THOSE CONTRACTS ARE SEVERAL YEARS OUT.
UM, THEY WOULDN'T, THEY WOULDN'T HAVE A IMMEDIATELY AVAILABILITY TO BE ABLE TO DO SOMETHING LIKE THAT.
SO THEY DON'T HAVE AN OPT OUT CLAUSE IN THEIR CONTRACT WHERE THEY CAN SAY, GIVE IT, GIVE YOU 30 DAYS NOTICE AND WE WANT OUT, OR SOMETHING OF THAT NATURE.
YOU'RE SAYING THAT THEY HAVE COMMITTED THAT THEY WILL BUY WATER FROM US UNTIL 2040? WE, WE COULD ASK LEGAL TO CHECK THE CONTRACT.
UM, I, I WOULD SAY, YOU KNOW, BUYING FROM BIO IS FOR THE MOST PART GONNA BE THEIR BEST OPTION.
YEAH, I, I WOULD THINK SO, BUT I CAN SEE HOW IF THEY DID BULK AT IT AND THEY HAD AN OPT OUT, THEY COULD SAY, WELL, I'M NOT PAYING THAT.
AND THAT WOULD THEN IN TURN AFFECT OUR BOTTOM LINE BECAUSE WE WEREN'T GETTING THAT REVENUE.
SO THAT, THAT WAS WHY I ASKED THE QUESTION.
WELL, YOU HAVE TO ALSO REMEMBER THOSE, THE COMBINATION OF ALL THOSE CUSTOMERS IS LESS THAN 10% OF, UH, THE WATER THAT BA SELLS.
THE CITY OF BAYTOWN IS OVER 90%.
SO IT PROBABLY WOULDN'T HAVE A HUGE IMPACT.
AND, AND TO THAT POINT, THEY WOULD BE LIMITED WITH THE, THE OPTIONS AVAILABLE TO THEM.
UM, WITH THE, WITH THE, WELL ALL THESE ARE, UH, OTHER CUSTOMERS ARE WITHIN HARRIS COUNTY, THEY WOULDN'T BE UNDER THE SUBSIDENCE, YOU KNOW, REQUIREMENTS.
UM, SO THEY'RE GONNA BE LIMITED IN HOW MUCH THAT THEY CAN PULL AND FOR THEM TO BUILD THEIR OWN TREATMENT PLANT AND TREAT WATER ON THEIR OWN.
AS WE SEE WITH BOW EAST, THAT'S VERY, VERY HIGH CAPITAL COST AND IT'S PROBABLY NOT COST ADVANTAGEOUS FOR THEM TO PURSUE.
IT'S UNLIKELY, BUT I WANTED TO PURSUE THAT.
SO SECOND, UM, I HAVE ONE LAST QUESTION.
THIS ONLY GOES OUT FOR THREE YEARS.
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THE CONCERN WOULD BE IN FISCAL YEAR 28 AND BEYOND, BECAUSE WE WERE DROPPING THAT, UH, DEBT SERVICE COVERAGE TO 1.05, JUST BARELY OVER THE LEGAL MINIMUM OF 1.0.DOES THAT MEAN WE SHOULD EXPECT ANOTHER INCREASE COMING? 28 20? SEE WHAT I'M SAYING? UH, SO LIKE I SAID, I'D LIKE TO FINISH THE CONDITION ASSESSMENT THAT WE'RE DOING AND UM, THEN HAVE ALL THAT DATA GO INTO THE REVISED RATE STUDY THAT WOULD GO OUT, SAY FIVE YEARS, AND THEN I THINK WE COULD COME BACK BEFORE THE END OF THIS YEAR WITH THAT AND, AND DO A PRESENTATION FOR YOU.
UM, I DON'T THINK SHE WAS FINISHED WITH HER PRESENTATION.
SO, UM, YOU WANNA, SO MOST OF THIS, IT'S REALLY THE SAME INFORMATION WE PRESENTED ON THE PREVIOUS SLIDE, BUT JUST SOME PEOPLE LIKE CHARTS AND GRAPHS.
UM, SO THIS IS AGAIN, THAT SCENARIO IF WE DO NOTHING, UH, AND YOU CAN SEE THE CASH FLOW, YOU KNOW, YOUR EXPENSES AND THOSE BARS ARE HIGHER THAN YOUR REVENUE, WHICH IS THE YELLOW LINE.
YOU SEE THE YELLOW LINE IS YOUR RESERVES IN THE MIDDLE GRAPH, IT'S JUST GOING DOWN AND THE GREEN BAR REPRESENTS THE LEVEL THAT WE NEED IT TO BE AT TO MEET THE 60 DAYS.
AND THEN FINALLY THE COVERAGE IS THE YELLOW IS THE 1.05, OR NO, SORRY, THE YELLOW IS THE REVENUE AND THE GREEN AND PURPLE REPRESENTS THE O AND M PLUS THE DEBT SERVICE.
SO IN THAT LAST YEAR, YOU CAN SEE THAT THAT EXCEEDS THE REVENUE LINE THAT WE HAVE.
UM, AND THERE YOU SEE IN 25 IN THE, UM, TABLE BELOW, THAT'S THE 69 MILLION, UH, TWDB LOAN.
UH, SO THAT'S THE ONLY DEBT THAT WE HAVE IN THIS THREE YEAR PERIOD, UM, THAT WE'RE LOOKING AT UNDER THIS SCENARIO.
NOW, IF WE GO FORWARD WITH THE RATE INCREASES, THEN YOU CAN SEE HERE THAT THE CASH FLOW, UM, LOOKS GOOD IN THE FIRST COUPLE OF YEARS WE'RE EATING INTO THE RESERVES.
UM, BUT THEN BY, UH, FISCAL YEAR 27, UH, WE NOW HAVE THE CASH FLOW IS MEETING THE, OR THE REVENUE IS MEETING THE EXPENSES.
UM, AND THEN YOU SEE THE RESERVES COME DOWN, BUT THEN WE CAN START BUILDING THEM BACK UP.
UM, AND THEN THE COVERAGE IS RIGHT AT THAT 1.05 IN YEAR SEVEN.
UM, WE DO HAVE THE $69 MILLION LOAN AND THEN 8.3 MILLION, UH, THAT WE'VE ASSUMED WOULD BE A BOND SALE IN FISCAL YEAR 27.
BUT CERTAINLY, YOU KNOW, WE WOULD LOOK AT OTHER OPTIONS THAT MIGHT BE BETTER FINANCIALLY.
UM, WE DID WITH THE CIP THAT WE HAVE NOW, YOU KNOW, WE HAVE LOOKED BEYOND THE PERIOD BECAUSE LIKE I SAID, WE DO WANNA MAKE SURE THAT WE'RE NOT MISSING SOME RATE SPIKE.
UM, SO, YOU KNOW, WE, WE FEEL COMFORTABLE WITH IT AS THE CIP STANDS NOW, BUT OF COURSE WE'LL ADD IN ANYTHING FROM THE CONDITION ASSESSMENT AND SEE WHAT THAT GIVES US.
BUT JUST WANTED TO REASSURE YOU THAT, THAT WE HAVE LOOKED BEYOND THIS POINT.
WHAT'S YOUR ASSUMPTIONS ON INTEREST RATES OVER THE NEXT COUPLE YEARS? DID YOU KEEP IT FLAT OR DID YOU ASSUME THAT THEY COME OFF? UM, WE HAVE ASSUMED, I BELIEVE IT WAS ABOUT FOUR POINT A HALF PERCENT AND SO WE JUST KEPT IT FLAT.
YOU KNOW, I, I DON'T HAVE A CRYSTAL BALL, SO WE JUST HAVE TO ASSUME SOMETHING.
UM, WE TRY TO MONITOR THE INTEREST RATES AND CERTAINLY, UM, WHEN WE LOOK AT THIS AGAIN, YOU KNOW, TOWARD THE END OF THE YEAR AFTER WE HAVE THE CONDITION ASSESSMENT, IF WE FEEL LIKE ANY OF OUR ASSUMPTIONS NEED TO BE UPDATED, WE'LL GO AHEAD AND UPDATE THOSE.
UM, AND THEN, YOU KNOW, WE DID SHOW YOU THIS QUICKLY, UM, BUT TO ADDRESS THE QUESTION OF, YOU KNOW, WHAT'S THE IMPACT ON A TYPICAL CUSTOMER, EVEN THOUGH BALDWIN DOESN'T HAVE RETAIL CUSTOMERS.
UM, IF YOU THINK ABOUT THE CITY OF BAYTOWN RESIDENTIAL CUSTOMERS TYPICALLY ARE USING ON AVERAGE ABOUT 5,000 GALLONS PER MONTH.
UM, AND SO AT 24 CENTS, UH, PER THOUSAND GALLONS, YOU KNOW, IT'S ABOUT A DOLLAR 20 IS WHAT THAT WOULD ADD TO THE AVERAGE MONTHLY BILL FOR A RESIDENTIAL CUSTOMER.
JUST FROM THIS BAWA INCREASE ALONE, I'M NOT SPEAKING TO THE REST OF THE CITY'S BUDGET.
WE WILL ADDRESS THAT TOMORROW.
SO, UM, AND THEN OF COURSE OTHER BAWA CUSTOMERS IS A LITTLE BIT HIGHER 26 CENTS.
[00:30:01]
ASSUMING THAT THEIR TYPICAL RESIDENTIAL CUSTOMERS AROUND THE SAME, THEY WOULD SEE A LITTLE BIT HIGHER INCREASE IN THEIR MONTHLY BILL.ARE THERE ANY OTHER QUESTIONS? ALRIGHT, ANYONE HAVE ANYTHING? NO.
IS THERE ANYTHING ELSE WE NEED TO DISCUSS CONCERNING AGENDA ITEM THREE A, WHICH WAS TO RECEIVE AND DISCUSS THE PROPOSED BUDGET? NO.
[b. Set a public hearing for the Baytown Area Water Authority Fiscal Year 2025-2026 Proposed Budget.]
WE WILL CONSIDER A RE A RESOLUTION TO SET A PUBLIC HEARING FOR THE PROPOSED BUDGET AND THE, UH, PROPOSED DATE IS JULY 16TH.WILL THE, WILL THE BUDGET BE UPDATED FOR THE 6.7%? UM, THE CURRENT BUDGET YOU HAVE IN FRONT OF YOU IS UPDATED WITH THE 6.7.
I THINK YOU'RE LOOKING IN THE VERBIAGE IN THE WRITING.
UM, I BELIEVE WE HAVE A RESOLUTION TO APPROVE.
DO I HAVE A MOTION TO APPROVE THE RESOLUTION TO SET THE PUBLIC HEARING? I MAKE THE MOTION.
ARE THERE QUESTIONS OR DISCUSSION CONCERNING THIS RESOLUTION? HEARING NONE.
OPPOSED? LIKE, I MOTION CARRIES UNANIMOUSLY.
[a. Consider a resolution authorizing the First Amendment to the Treated Water Supply Contract with Harris County Fresh Water Supply District 1-B, to increase contract quantity.]
CONSIDER A RESOLUTION TO AUTHORIZE THE FIRST AMENDMENT TO THE TREATED WATER SUPPLY CONTRACT WITH HARRIS COUNTY FRESHWATER SUPPLY DISTRICT ONE B.AND THE PURPOSE IS TO INCREASE CONTRACT QUANTITY.
UM, AS STATED, THIS ITEM IS FOR HARRIS COUNTY FRESHWATER SUPPLY DISTRICT ONE B, UM, WHICH IS, UH, JUST NORTH OF THE BAWA.
UM, FRITZ LANUM TREATMENT PLANT IS THEIR SERVICE AREA.
UM, THIS IS A SMALL, UM, CUSTOMER BASE.
UM, THE ORIGINAL CONTRACT WAS FOR 50,000 GALLONS PER DAY.
UM, THEY ARE, UH, CURRENTLY IN A SITUATION WHERE THEY DO NOT HAVE ENOUGH, UH, WATER CAPACITY FOR THE CONNECTIONS THAT THEY HAVE.
AND THE MINIMUM AMOUNT THAT THEY, UM, NEED IS 216,000, UM, GALLONS PER DAY UNDER CONTRACT AS OPPOSED TO 50,000 GALLONS PER DAY.
SO THIS CONTRACT IS TO, UM, MEET THAT REQUEST.
UH, WHAT WE HAVE ASKED FROM THEM IN RETURN IS THAT THEY COMPLETE A A CR, UH, ALTERNATIVE CAPACITY REQUIREMENT STUDY TO DETERMINE IF THAT NUMBER IS ACCURATE.
UM, THE 216 IS ESSENTIALLY THE, THE RUBBER STAMP NUMBER THAT TCEQ ASSIGNS BASED ON YOUR CONNECTION COUNT, UM, WHICH IS THE 0.6 GALLONS PER MINUTE PER CONNECTION.
AND THAT'S HOW THEY, UM, FORMULATE TO THAT NUMBER.
UM, NEVERTHELESS, UM, WE, WHAT WE HAVE ASKED IS THAT THEY COMPLETE A A CR, UH, WITHIN A CERTAIN AMOUNT OF TIME.
AND BASED UPON THAT A CR WHAT WE WOULD ANTICIPATE IS THAT THEIR REQUEST SHOULD COME DOWN.
UM, IT CANNOT COME DOWN UNTIL THAT STUDY IS COMPLETE.
UM, SO THIS, UH, ITEM, WHAT WE WOULD PROPOSE NOW IS THAT THEY WOULD GET THE REQUEST AS THE, THE NUMBER REQUESTED AND THEN UPON THE COMPLETION OF THE A CR, THAT NUMBER WILL COME BACK FOR REVIEW AND MODIFICATION.
SO WITH THAT BEING SAID, STAFF RECOMMENDS APPROVAL, BUT DID I UNDERSTAND YOU TO SAY THAT THEY CURRENTLY HAVE NOMINALLY 50,000 GALLONS AND THEY'RE ASKING FOR TWO HUNDRED, TWO HUNDRED AND SIXTEEN, TWO HUNDRED 16,000? YES.
SO HAS THERE BEEN SIGNIFICANT DEVELOPMENT? THEY HAVE HAD A, UM, A SMALL AMOUNT OF DEVELOPMENT.
ACTUALLY THE, THE ACTUAL DRIVER BEHIND THIS IS THAT THEY RECEIVED A TCQ INSPECTION AND WERE DEEMED IN VIOLATION.
AND SO THE REQUEST IS TO GET THEM BACK COMPLIANT.
SO THEY HAVE, THEY CURRENTLY HAVE TOO MANY CONNECTIONS, THEY DO NOT HAVE ENOUGH, THEY FLOOD ENOUGH ON RESERVE.
THEY, THEY DON'T HAVE ENOUGH, UH, WATER RESERVED RIGHT.
FOR THE NUMBER OF CONNECTIONS THAT THEY HAVE.
SO THEY'RE DRAWN MORE THAN 50,000 A DAY NOW, RIGHT? THEY'RE USING ABOUT 50,000 A DAY NOW IS WHAT, IS WHAT THEY'RE USING.
BUT TCEQ REQUIRES THEM TO HAVE, UH, EXCESS OF THAT FOR HIGH PEAK TIMES.
WHERE IS, UM, WHAT IS, UM, DISTRICT ONE B? WHERE DOES IT, WHAT LOCALE, WHERE IS IT? SO, UM, JUST AT, UH, THOMPSON AND JONES ROAD MM-HMM
IS, UH, WHERE THEIR CONNECTION POINT IS.
UM, SO RIGHT AT, AT THAT INTERSECTION AND, UM, IT, IT GOES OVER,
[00:35:01]
UH, A A FEW BLOCKS.UM, IT'S, IT'S NOT A VERY BIG AREA.
SO THIS IS JUST, WE'RE SELLING A MORE, ESSENTIALLY, WELL, THEY'RE, UH, IN, IN ESSENCE, BUT WHAT THEY'RE ESSENTIALLY GETTING IS, IS A RESERVATION AMOUNT AND THIS WILL NOT IMPACT OUR, OUR QUANTITY.
NO, NO, IT IS, IT HAS, ALTHOUGH IT SOUNDS LIKE A LOT.
RIGHT? UM, SO IT HAS VERY LITTLE IMPACT AS FAR AS WITH OUR SHORT AND LONG TERM IMPACTS FOR WATER RATE CAPACITY.
DOES ANYONE ELSE HAVE A QUESTION? ALL RIGHT.
UM, ALL THOSE IN FAVOR SAY AYE.
NEXT, WE WILL CONSIDER A RESOLUTION AUTHORIZING CHANGE ORDER NUMBER ONE TO THE PROGRESSIVE DESIGN BUILD AGREEMENT WITH BAYTOWN WATERWORKS.
ANYONE? I DON'T KNOW THAT ANYONE MOTIONED? OH YES, SORRY.
OH, WE DIDN'T, I THOUGHT THE SAME THING.
YES, I NEED A MOTION IN A SECOND.
UH, IF THERE'S ANY, ARE THERE ANY OTHER QUESTIONS? NO, NOW WE'LL TAKE A VOTE.
OPPOSED? LIKE SIGN NOW THE MOTION CARRIED UNANIMOUSLY.
[b. Consider a resolution authorizing Change Order No. 1 to the Progressive Design-Build Agreement with Baytown Waterworks Partners, a McCarthy Building Companies, Inc., and Carollo Engineering, Inc., joint-venture, for the Baytown Area Water Authority (BAWA) East Surface Water Plant Phase 2 Expansion Project.]
UM, WE WILL CONSIDER THAT THIS NEXT RESOLUTION WHICH WOULD AUTHORIZE CHANGE ORDER NUMBER ONE TO THE PROGRESSIVE DESIGN BUILD AGREEMENT WITH BAYTOWN WATERWORKS PARTNERS, A MCCARTHY BUILDING COMPANIES INCORPORATED AND COLO ENGINEERING INCORPORATED JOINT VENTURE FOR THE BAYTOWN AREA WATER AUTHORITY, E-SERVICE WATER PLANT PHASE TWO EXPANSION PROJECT.UH, THIS IS A, AN AMENDMENT TO THE CONTRACT FOR, UM, OUR DESIGN BUILD FIRM WHO IS, UH, DESIGNING AND BUILDING THE, UM, EAST, UH, SURFACE FLOOR TREATMENT PLAN EXPANSION.
THE, UM, PHASE ONE CONTRACT THAT WE HAVE IN PLACE TAKES THE DESIGN TO UH, 60%, UM, AND THIS AMENDMENT WOULD ALLOW THEM TO TAKE THE DESIGN TO 90%.
AND THE REASON WE'RE DOING THAT IS BECAUSE, UM, THEIR, UH, TCQ IS REQUIRING A VARIANCE, UH, FOR THE SUPER PULSATE, UH, COMPONENT OF THE PLANT.
UH, EVEN THOUGH, UH, AND THIS WAS NOT SOMETHING THAT WE ANTICIPATED IN THE ORIGINAL SCHEDULE BECAUSE THE, THE, UM, ORIGINAL PLANT HAS THE SUPER PULS, BUT, UM, THEY'RE REQUIRING US TO SUBMIT A VARIANCE FOR THIS, UM, DIFFERENT TECHNOLOGY.
AND, UM, SO THEY'VE LET US KNOW THAT IT'S GONNA DELAY THE, THE PROGRESS BY ABOUT A HUNDRED DAYS.
AND RATHER THAN, YOU KNOW, HAVING THE, UH, DESIGNER JUST KIND OF SIT ON THE DESIGN, WAIT, WE WANTED TO KEEP THEM GOING ON THE DESIGN AND PROGRESS IT TO 90%.
SO THIS AMENDMENT ESSENTIALLY TAKES MONEY FROM, UH, THE PHASE TWO CONTRACT THAT HAS NOT BEEN EXECUTED YET AND MOVES IT INTO THE PHASE ONE SO THAT THEY CAN KEEP WORKING AND, UM, MAKE PROGRESS.
UM, WE DON'T ANTICIPATE ANY ISSUES WITH THE, UH, VARIANCE REQUEST AND WE ARE ACTUALLY MAKING A TRIP TO, UH, AUSTIN NEXT WEEK TO, UH, DISCUSS WITH TCEQ.
UM, SO REALLY THIS IS NOT INCREASING OUR TOTAL COST, IT'S JUST MOVING COSTS FROM PHASE TWO TO PHASE ONE AND, UM, IN ESSENCE KEEPS THE PROJECT MOMENTUM GOING.
SO, UH, THE TOTAL AMOUNT THAT'S BEING MOVED IS UH, $1,473,578 AND STAFF RECOMMENDS APPROVAL.
DO I HAVE A MOTION? I'LL MAKE A MOTION SECOND.
ALRIGHT, ANY QUESTIONS? I JUST HAVE ONE SMALL QUESTION.
UM, YOU'VE ASSURED US, BUT I JUST WANT IT SAID AGAIN.
SO, SO WE DON'T ANTICIPATE ONCE WE GET INTO PHASE TWO THAT WE WOULD HAVE TO ADD ANY MONEY, ANY ADDITIONAL MONEY SINCE WE'RE JUST BASICALLY SHIFTING PAPERWORK.
ALRIGHT, ANY, ANY QUESTIONS OR DISCUSSION? ALL THOSE IN FAVOR SAY AYE.
[a. Receive the Baytown Area Water Authority Quarterly Financial and Investment Reports for the Quarter Ending December 31, 2024.]
[00:40:01]
NOW RECEIVE REPORTS.OUR FIRST REPORT THAT WE WILL RECEIVE TODAY IS THE QUARTERLY FINANCIAL AND INVESTMENT REPORT FOR QUARTER ENDING DECEMBER 31ST, 2024.
I WOULD LIKE TO PRESENT THE FIRST AND THE SECOND QUARTERLY FINANCIAL REPORTS TO YOU.
BEGINNING WITH THE FIRST QUARTER ENDING DECEMBER 31ST, 2024, THERE WERE TOTAL REVENUES OF 5.2 MILLION.
THIS IS APPROXIMATELY 25% OF THE ANNUAL AMOUNT EXPECTED TO BE RECEIVED.
AND AT THE FIRST QUARTER END IT IS ON TARGET.
THIS AMOUNT IS VERY SIMILAR TO WHERE REVENUES WERE IN 2024.
INVESTMENTS ARE EARNING AROUND 4.5% AND THE QUARTERLY INVESTMENT REPORT FROM THE CITY'S FINANCIAL ADVISOR IS INCLUDED IN YOUR PACKET FOR YOUR REVIEW.
THERE WERE TOTAL EXPENDITURES OF 5.5 MILLION.
THIS IS APPROXIMATELY 28% OF THE TOTAL BUDGETED AMOUNT FOR THE YEAR.
YOU WILL NOTICE A SIGNIFICANT DIFFERENCE BETWEEN CURRENT YEAR AND PRIOR YEAR.
FOR THE LINE ITEM ENTITLED ENTER FUND TRANSFER.
THIS IS DUE TO THE BEGINNING OF PAYMENTS FOR THE 2024 DEBT ISSUANCE.
THAT ISSUE ALONE HAS A FISCAL YEAR PAYMENT OF 1.9 MILLION.
AT THE BOTTOM OF THE PAGE IS THE CAPITAL IMPROVEMENT PROGRAM, WHICH IS SUPPORTED BY TRANSFERS FROM THE OPERATING FUND.
THERE ARE REVENUES OF 1.1 MILLION OFFSET BY EXPENDITURES OF $72,000, LEAVING AN ENDING WORKING CAPITAL OF 3.5 MILLION.
NOW FOR THE SECOND QUARTER REPORT AT MARCH 31ST, 2025 REVENUES WERE 10.6 MILLION OFFSET BY EXPENDITURES OF 11.40.
JUST ON A ROLL, SORRY ABOUT THAT.
[b. Receive the Baytown Area Water Authority Quarterly Financial and Investment Reports for the Quarter Ending March 31, 2025.]
AT MARCH 31ST, 2025 REVENUES WERE 10.6 MILLION OFFSET BY EXPENDITURES OF 11.4.THIS IS A NEGATIVE YEAR TO DATE CHANGE, BUT THE ENDING WORKING CAPITAL IS 10.1 MILLION POSITIVE.
I WANNA CALL YOUR ATTENTION TO THE GRAPHIC ON THE LEFT.
THE NUMBERS ATTACHED TO THE GRAPHIC, WHICH HAS THE DOLLAR SIGN ON IT, THOSE NUMBERS ARE INCORRECT.
AND FROM THE FIRST QUARTER REPORT, THE PERCENTAGE SHOULD BE 57%.
AT THE BOTTOM OF THE PAGE ARE THE NUMBERS FOR THE CAPITAL IMPROVEMENT PROGRAM.
CURRENT REVENUES TOTAL 2.2 MILLION WITH EXPENDITURES OF 983,000, LEAVING A POSITIVE WORKING CAPITAL IN THE FUND OF 3.7 MILLION.
ALSO INCLUDED IN THE PACKET IS THE INVESTMENT REPORT FOR YOUR REVIEW.
IN IT YOU WILL NOTICE THAT BOWER IS RECEIVING A 4.396 RETURN ON ITS INVESTMENTS.
ARE THERE ANY QUESTIONS? THANK YOU.
ALL QUESTIONS? ALRIGHT, THANK YOU VERY MUCH.
AND UH, THAT COVERED ITEM FIVE B OF THE AGENDA AS WELL FOR THE QUARTER ENDING MARCH 31ST, 2025.
[c. Receive a report on the status of the Baytown Area Water Authority East Expansion Project.]
NEXT WE WILL RECEIVE A REPORT ON THE STATUS OF THE AUTHORITIES EAST EXPANSION PROJECT.ALTHOUGH I THINK Y'ALL HAVE ACTUALLY TALKED ABOUT A LOT ALREADY.
ALRIGHT, SO Y'ALL SHOULD BE PRETTY FAMILIAR WITH THESE SLIDES.
UM, AT THIS POINT WE ARE CURRENTLY, AS FRANK SAID EARLIER, IN THAT 60 TO 90, UH, DESIGN PHASE.
WE ACTUALLY JUST GOT THE 60% OF REVIEW SET LAST WEEK.
SO WE AS YOUR OWNER'S ADVISOR AND THE STAFF AT BAWA ARE CURRENTLY COMBING THROUGH ALL THOSE PLANS.
IT'S PLANS, SPECIFICATIONS, SCHEDULE, UM, PERMIT MATRIX, UH, AND THE GEOTECHNICAL AND THE SURVEY STUDIES.
SO WE'RE WORKING THROUGH THAT RIGHT NOW.
AS FRANK SAID, IT'S ABOUT THE TIME THAT WE'RE GONNA SUBMIT TO TCEQ TO DO THE FULL DESIGN REVIEW.
WE WILL ALSO BE SUBMITTING IT TO TEXAS WATER DEVELOPMENT BOARD, BUT WE'RE GONNA BE HAVING A MEETING WITH THEM IN AUSTIN NEXT WEEK TO GO OVER, YOU KNOW, ALL THAT TO MAKE SURE THAT EVERYBODY IS, IS VERY AWARE AND VERY FAMILIAR, YOU KNOW, WITH THE PROCESS.
AFTER THAT, ABOUT A WEEK OR SO AFTER THAT, WE'RE GONNA GET TOGETHER AS A GROUP AND THEN WE'LL GO OVER ALL OF THE COMMENTS THAT WE HAVE FOR BWP ON THAT 60% WE DID THE SAME THING FOR 30%.
WE HAD A LOT OF GOOD CONVERSATION, GOOD QUESTIONS.
BUT BWP IS, IS LISTENING TO ALL THE COMMENTS THAT WE HAVE AND ADDRESSING THEM IN THE 60% THAT WE HAVE SO FAR.
SO THIS IS JUST, AGAIN, THESE ARE, YOU'VE SEEN THESE BUT THEY'RE FUN.
UH, SO THIS IS THE CURRENT, UM, PROPOSAL FOR THE EXPANSION.
AS YOU CAN SEE, UM, A LOT OF IT IS SIMILAR TO WHAT'S
[00:45:01]
ON THE EXISTING PLANT, BUT THERE ARE A FEW CHANGES.UM, YOU'RE GONNA BE GETTING A, A BIGGER GST IS ONE OF THOSE EXAMPLES WHICH GIVES Y'ALL MORE STORAGE.
Y'ALL GONNA NEED THAT FOR YOUR FUTURE DEMAND.
SO AGAIN, JUST TALKING A LITTLE BIT ABOUT THE SCHEDULE AND WHAT'S UM, BEEN COMPLETED TO DATE.
UH, THE TWDB FULL APPLICATION DID GO IN LAST MONTH.
UM, THAT WAS A GREAT TEAM EFFORT BETWEEN YOUR LEGAL FINANCIAL ADVISORS, US AND BWP.
SO AND TWDB HAS BEEN ASKING US QUESTIONS.
THEY HAVE ALL NOW BEEN ANSWERED.
SO NEXT FOR YOUR TWDB LOAN, WE ARE JUST BASICALLY WAITING FOR TWDB TO FINISH THEIR PAPERWORK ON AND WE WOULD EXPECT NEXT MONTH THAT THEY WOULD HAVE BOARD APPROVAL ON YOUR LOAN AND THEN START WORKING WITH Y'ALL ON THE AGREEMENT FOR THAT LOAN.
THAT WOULD THEN BE PAID OUT AT THE END OF THIS YEAR.
WE ALSO RECEIVED YOUR BASE COST ESTIMATE BACK IN APRIL.
UM, THAT IS SOMETHING WE'RE STILL POURING THROUGH.
IT'S VERY DETAILED AND WE HAVE A LOT OF QUESTIONS AND WE'RE GOING THROUGH IT WITH A FINE TOOTH COMB.
SO, UM, SO THAT IS STILL ONGOING AND AS I MENTIONED, WE'RE CURRENTLY LOOKING AT THE 60% AND THEN WE'LL KIND OF IMMEDIATELY GET INTO YOUR 70 PER 5% DESIGN REVIEW WITH COST MODEL NEXT MONTH AS WELL.
SO CONTINUING TO MOVE THIS FORWARD, WE ANTICIPATE THAT WE'LL GET YOUR GUARANTEED MAXIMUM PI PRICE PROPOSAL IN NOVEMBER.
UM, THIS SCHEDULE'S A LITTLE UPDATED FROM WHAT Y'ALL SAW LAST TIME BECAUSE OF THIS SHIFT WITH THE TCEQ, YOU KNOW, HAVING THAT A HUNDRED DAY REVIEW, WE WERE ABLE TO WORK WITH BWP.
SO WE DON'T ANTICIPATE A FULL HUNDRED DAY DELAY RIGHT NOW.
SO WE'VE SHIFTED SOME THINGS AROUND TO TRY TO KEEP IT GOING AS MUCH AS POSSIBLE.
THE REASON THERE IS A KINDA A THREE MONTH BETWEEN JULY AND NOVEMBER ON THAT GMP PROPOSAL, IT'S 'CAUSE THAT'S THE TIME THEY'RE GONNA GO OUT FOR THEIR BIDS.
THEY'RE ALREADY GETTING PRICES FROM VENDORS BUT THEY'LL GO OUT AND NOT GET ACTUAL BIDS.
THEY'LL ALSO ENGAGE SUB CONSULTANTS, SUBCONTRACTORS TO GET THEM PRICES FOR WORK AS WELL.
THAT'LL ALL INCLUDE IT IN THIS GMP THAT WE WILL SEE IN NOVEMBER.
SO IT TAKES 'EM A LITTLE BIT OF TIME TO DO THAT.
WE ALREADY TALKED ABOUT CHANGE ORDER NUMBER ONE, SO I'M JUST GONNA SKIP RIGHT ON THIS.
UM, AND THEN I DID WANNA MENTION PFAS.
THIS IS THE GRANT THAT YOU WERE ASKING ABOUT EARLIER.
THE FINAL DECISION HASN'T BEEN RELEASED YET, BUT THE DRAFT THAT TICKS IS WATER.
OUR DEVELOPMENT BOARD PUT OUT DID NOT SHOW Y'ALL RECEIVING THAT GRANT MONEY.
THERE WASN'T ANYTHING WRONG WITH YOUR APPLICATION.
THEY JUST ONLY HAVE SO MUCH MONEY, UH, TO GIVE OUT.
AND THE WAY THEY SCORE IT IS THE MORE BASICALLY PFAS ELEMENTS THAT YOU ARE GOING TO EXCEED.
SO ENTITIES THAT HAD MORE PFAS EXCEEDANCE THAN Y'ALL GOT THE MONEY BEFORE Y'ALL.
THEY ALSO SCORED IT BASED ON SIZE.
SO SMALLER ENTITIES WERE SCORED HIGHER THAN Y'ALL AS WELL.
SO THEY JUST BASICALLY RAN OUTTA MONEY BY THE TIME THEY GOT TO Y'ALL.
SO TO TO FRANK'S POINT, WE'RE STILL GONNA WAIT FOR THE FINAL.
I WOULDN'T ANTICIPATE IT CHANGING, YOU KNOW, MUCH FROM WHAT'S THE DRAFT.
UM, SO WE'LL LOOK AT DOING IT THIS YEAR 'CAUSE THE ONES THAT ARE GETTING MONEY WILL MOVE OFF THE LIST AND MAYBE WE'LL HAVE BETTER LUCK NEXT YEAR.
BUT IT'S A VERY COMPETITIVE GRANT OBVIOUSLY, 'CAUSE IT'S GRANT FUNDING.
SO, AND THAT IS WHAT I HAVE TODAY.
CAN YOU, CAN YOU GO BACK TO YOUR, YOUR SITE MAP? SO THIS WAS A 6 MILLION GALLON PLANT AND WE'RE INCREASING IT TO 12, CORRECT? CORRECT.
SO ARE WE STILL GONNA HAVE ROOM FOR THE OTHER 12 IF WE EXPAND BASED ON HOW YOU'VE ENGINEERED THE PLACEMENT OF THE EQUIPMENT? YES.
YEAH, ALL THAT IS STILL TAKEN INTO ACCOUNT TO BE ABLE TO FIT THE 12 MGD ON THERE.
ANY OTHER QUESTIONS? ALL RIGHT, THANK YOU VERY MUCH.
[a. The next Baytown Area Water Authority meeting is scheduled for Wednesday, July 16, 2025, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas 77520. ]
THE MANAGER'S REPORT.UM, YOU KNOW, AS UH, WE DISCUSSED EARLIER, WE'RE IN THE MIDDLE OF THE BUDGET PROCESS, SO, UM, THAT'S ALWAYS A SPECIAL TIME OF YEAR.
UM, WE'LL BE, UH, COMING BACK, UH, TO YOU, UH, YOU KNOW, WITH SOME ADDITIONAL ITEMS. IF IN THE, UM, KIND OF IN BETWEEN MEETINGS YOU ALL HAVE QUESTIONS, UM, OBVIOUSLY SEND THOSE, YOU KNOW, TO STAFF AND WE'LL CERTAINLY GET THOSE READY, GET THOSE BACK TO, UM, TO YOU AND THE ENTIRE BOARD.
UM, MAKE SURE THAT WE GET ALL THE INFORMATION YOU NEED TO MAKE YOUR DECISIONS.
AND, UM, OTHER THAN THAT, WE'LL PLAN ON, UH, SEEING YOU ALL AGAIN, UH, ON WEDNESDAY, JULY 16TH AT FOUR 30, UH, PM HERE IN THIS SAME ROOM.
AS THERE IS NO OTHER BUSINESS ON OUR AGENDA, I WOULD ENTERTAIN A MOTION TO ADJOURN.