* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. BUT I LEFT MY GOOD [00:00:01] PEN. IT WRITES SO SMOOTH. YOU KNOW, IT HURTS SOUR, SO THEY DON'T NORMAL STUFF. I NOW CALL [ CITY OF BAYTOWN NOTICE OF MEETING CITY COUNCIL WORK SESSION THURSDAY, JUNE 26, 2025 5:00 P.M. COUNCIL CHAMBER, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ] TO ORDER THE CITY COUNCIL WORK SESSION FOR THURSDAY, JUNE 26TH, 2025. COUNCIL CHAMBER, CITY HALL, BAYTOWN, TEXAS, AN ANNOUNCEMENT OF QUORUM AT 5:05 PM WE'RE GONNA START OFF WITH, UM, CITIZEN COMMENTS. DO WE HAVE ANYONE? WELL, THERE BEING NO ONE DESIRED TO SPEAK. WE NOW IN THIS PORTION [a. Receive a presentation on the Proposed Fiscal Year 2025-2026 Utility Rates.] OF THE AGENDA, WE'RE MOVING ON TO DISCUSSIONS. RECEIVE A, A PRESENTATION ON A PROPOSED FISCAL FISCAL YEAR 20 25, 20 26. UTILITY RATES. MR. SEMINO. GOOD AFTERNOON, UH, MAYOR AND COUNCIL. UM, AS YOU SAID, UH, WE ARE HERE TO DISCUSS, UH, UTILITY RATES FOR THE UPCOMING YEAR. UH, WE WILL NOT BE ASKING FOR A VOTE OR, UH, ANY, UH, DECISION TONIGHT. THIS IS, YOU KNOW, FREE INFORMATION AND, UH, TO DISCUSS, UH, WHAT WE PRESENT. UM, TO DO THIS, WE HAVE, UH, WE HIRED A ENGINEERING FIRM WHO, UH, DID OUR RATE STUDY. UH, THAT'S, UH, COROLLA ENGINEERS. AND, UH, I WILL HAVE, UH, JENNIFER IVY WITH, UH, COROLLA COME UP AND PRESENT. UM, I DO WANT TO KIND OF EXPLAIN SOME OF THE PROCESS THAT WE'RE GOING THROUGH THIS YEAR. UM, WE, OF COURSE, YOUR, YOUR PROJECTS, YOU KNOW, AND PROJECT COSTS AS WELL AS YOUR OPERATING COSTS GO INTO, UH, THE REVENUES YOU NEED TO GENERATE AND THE RATES THAT YOU CHARGE TO GENERATE THOSE REVENUES. SO, UM, WE ARE TRYING TO, UM, DO A, UH, WE'RE WE'RE DOING A CONDITION ASSESSMENT ON OUR PLANTS, BOTH, UH, WATER AND WASTEWATER PLANTS, UH, SO THAT WE HAVE A LONG-TERM PLAN AS TO WHAT, YOU KNOW, UH, IMPROVEMENTS NEED TO BE MADE TO BOTH KEEP UP WITH THE CONDITION AND, UH, YOU KNOW, THE OPERATING CONDITION AS WELL AS THE CAPACITY. SO, UM, WE JUST STARTED THIS, UM, CONDITION ASSESSMENT EARLY THIS YEAR, UH, AND IT TAKES TIME TO GET THROUGH ALL THAT SO WE'RE NOT COMPLETELY THROUGH THE, UH, CONDITION ASSESSMENT. UM, HOWEVER, WE DO HAVE ENOUGH COSTS PUT IN THERE TO, UM, LOOK AT THE RATES. UM, WHAT WE'RE GONNA DO IS COMPLETE THE CONDITION ASSESSMENT, SO IT COVERS A 10 YEAR PLAN, AND THEN WE'LL COME BACK LATER THIS YEAR AND PRESENT MAYBE A FULL FIVE YEAR PLAN FOR RATES. SO, UH, TONIGHT IS JUST GONNA TALK ABOUT, UH, TWO YEARS. AND, UM, I SAY THESE ARE THE INITIAL, UH, COSTS AND, UH, PROJECTS THEY HAVE IDENTIFIED WITHIN THAT CONDITION ASSESSMENT. SO I'LL LET, UH, JENNIFER WALK YOU THROUGH THE RIGHT STUDY AND IF YOU HAVE QUESTIONS, WE'LL UH, ANSWER THOSE. ALRIGHT, THANK YOU. UH, THANK YOU FOR HAVING ME HERE TONIGHT. SO WE'RE GONNA TALK FIRST ABOUT THE ASSUMPTIONS THAT GO INTO THE STUDY AND THEN WE'LL LOOK AT A THREE YEAR FINANCIAL FORECAST. I KNOW FRANK MENTIONED WE'LL LOOK AT TWO YEARS OF RATES, UM, BUT IN THAT THREE YEAR FORECAST, WE'RE ALSO INCLUDING THE CURRENT YEAR. SO YOU CAN SEE HOW WE'RE PLANNING TO END THE CURRENT YEAR AND THEN GOING INTO FISCAL YEAR 26 AND FISCAL YEAR 27. AND THEN WE'LL COVER THE RECOMMENDATION THAT WE HAVE FOR FISCAL YEAR 26 RATES AND WHAT THAT WOULD MEAN TO THE CUSTOMERS ON THEIR BILLS AND THEN HAVE TIME FOR QUESTIONS. SO FOR OUR STUDY, WE ASSUMED THAT WE HAVE ANNUAL ACCOUNT GROWTH OF 1.3%. SO MEANING YOU'RE ADDING 1.3% OF CUSTOMER ACCOUNTS EVERY YEAR. UM, IN ADDITION TO THAT, WE'RE ASSUMING ANNUAL DEMAND GROWTH OF 2%. SO WE'RE SEEING CUSTOMERS USING MORE WATER EACH YEAR, AND THAT'S BASED ON A HISTORICAL LOOK BACK OF THE USAGE. WE TOOK THE TOTAL USAGE, WE LOOKED AT THE TOTAL NUMBER OF ACCOUNTS AND THEN DETERMINE WHAT'S THE AVERAGE USAGE PER ACCOUNT AND HOW IS THAT TRENDING. SO THERE'S SOME UP AND DOWN FROM YEAR TO YEAR, BUT WE FOCUSED ON THE TREND OVER THAT PERIOD. WE'RE ALSO ASSUMING 3% ANNUAL INFLATION. UM, THAT'S MOSTLY FOR THE OPERATING COSTS. UM, AND THEN WE HAVE A MINIMUM OPERATING RESERVE OF 60 DAYS OF O AND M. SO THAT'S OUR MINIMUM CASH BALANCE THAT WE NEED TO MAINTAIN. UM, SO THAT'S ONE METRIC THAT WE LOOK AT TO DETERMINE [00:05:01] WHAT RATE INCREASE WE NEED. THE SECOND METRIC IS DEBT SERVICE COVERAGE, AND OUR TARGET IS 1.3 TIMES. SO OUR NET REVENUE NEEDS TO BE AT LEAST 1.3 TIMES THAT DEBT SERVICE PAYMENT THAT WE HAVE IN EACH YEAR. THE LEGAL MINIMUM IS 1.25 TIMES. SO OUR TARGET GIVES US A LITTLE BIT OF A CUSHION, UM, BUT, BUT NOT A HUGE CUSHION SO THAT WE'RE NOT GONNA HAVE, UM, YOU KNOW, HUGE INCREASES JUST TO, TO ADD A CUSHION THERE. SO THE DRIVERS BEHIND THE INCREASES THAT WE'RE LOOKING AT ARE PRIMARILY TO MEET THAT OPERATING RESERVE TARGET, THE 60 DAYS OF O AND M. SO WE START OFF WITH A, A HEALTHY BALANCE, BUT WE'RE GONNA SPIN THAT DOWN ON CAPITAL PROJECTS TO TRY TO OFFSET BORROWING COSTS. UM, SO WE'LL SPIN THAT DOWN AND THEN WE'VE GOT TO STILL MAINTAIN THAT 60 DAYS. SO THAT'S GOING TO DRIVE SOME OF THESE RATE INCREASES. UM, WE ALSO HAVE OVERALL SOME DECREASED CONSUMPTION, UM, WITH SOME OF THE CUSTOMERS. SO EVEN THOUGH WE'RE SEEING INDIVIDUAL CUSTOMERS USING MORE, WE'RE STILL SEEING SOME DECREASED CONSUMPTION THAT IS IMPACTING THE RATES. AND THEN WE HAVE, UM, THE CAPITAL PROJECTS. SO IN THE THREE YEAR PERIOD, 25 THROUGH 27, UH, WE HAVE ALMOST 60 MILLION IN WATER CAPITAL PROJECTS AND WE ARE GOING TO BORROW OR PROJECTING TO BORROW $47.3 MILLION, UM, TO FINANCE THOSE CAPITAL PROJECTS. THE REST WOULD BE FINANCED MAINLY WITH CASH, UM, FROM THE RESERVES AND FROM THE REVENUE THAT WE'RE GENERATING. UM, SOME A A SMALL PORTION MIGHT BE FROM GRANTS, SOME IS ALSO WITH BOND PROCEEDS FOR BONDS THAT HAVE ALREADY, UM, BEEN ISSUED. THEN ON THE SEWER SIDE, UH, THE CAPITAL IMPROVEMENT PLAN IS MUCH LARGER, UM, BECAUSE OF COURSE WE'VE GOT TREATMENT PLANTS ON THE SEWER SIDE. UH, AND SO THAT'S $238.1 MILLION IN PROJECTS OVER THE THREE YEAR PERIOD. AND WE EXPECT TO ISSUE $163.2 MILLION IN DEBT TO FINANCE THOSE PROJECTS. SO THIS IS A SUMMARY OF THAT THREE YEAR PLAN. UM, BY THE END OF 25, WE PROJECT THAT WE'LL HAVE 8.6 MILLION IN OPERATING RESERVES. SO THAT'S EQUAL TO ABOUT 75 DAYS. OUR DEBT SERVICE COVERAGE IS AT 1.88 TIMES SO MUCH HIGHER THAN OUR TARGET OF 1.3 TIMES. BUT THEN IF WE DON'T RAISE RATES AT ALL, THE TOP SECTION SHOWS THAT PROJECTION OF WHAT WOULD HAPPEN TO THOSE TWO METRICS. SO IF WE DON'T ISSUE ANY, OR IF WE DON'T RAISE RATES AT ALL IN FISCAL YEAR 26, THAT RESERVE BALANCE WOULD DISAPPEAR AND YOU WOULD ACTUALLY BE NEGATIVE OVER $30 MILLION. UM, AND THE COVERAGE WOULD COME DOWN, BUT WOULD STILL BE ABOVE THE TARGET. SO AGAIN, IT'S REALLY THE RESERVES THAT ARE DRIVING THE NEED FOR INCREASES. AND BY 27, IF YOU STILL DIDN'T RAISE RATES, YOU WOULD BE MORE THAN A HUNDRED MILLION NEGATIVE ON THE RESERVE BALANCE AND YOU WOULD BE BELOW YOUR TARGET OF 1.3 TIMES, YOU'D ACTUALLY BE BELOW YOUR LEGAL MINIMUM OF 1.25 TIMES FOR THE COVERAGE. SO THAT JUST EXPLAINS THE NEED FOR SOME RATE INCREASES. OKAY. THE NEXT SECTION OF THIS TABLE SHOWS YOU THE INCREASES THAT WE ARE RECOMMENDING IN ORDER TO MAINTAIN OUR TARGET OR MINIMUM FOR THOSE TWO METRICS. SO FOR WATER, WE'RE RECOMMENDING TWO 4.5% INCREASES. SO ONE IN 26, 1 IN 27. AND THEN FOR SEWER, BECAUSE WE HAVE SUCH A LARGE CIP, WE'RE RECOMMENDING 14.6% IN EACH OF THOSE TWO YEARS. AND SO THE COMBINED, IF YOU LOOK AT THE WEIGHTED AVERAGE, UM, COMBINED INCREASE IS 8.7%, 8.8%. AND SO AS YOU SEE, THAT WOULD MAINTAIN THAT 60 DAYS OF OPERATING RESERVES IN THOSE TWO YEARS, AND YOUR COVERAGE WOULD STILL BE IN VERY GOOD SHAPE, WELL ABOVE THE 1.3 TARGET. SO IF WE LOOK AT THIS GRAPHICALLY, THIS IS GOING BACK TO THE WHAT, WHAT DOES THIS LOOK LIKE IF YOU DON'T RAISE RATES? SO YOU CAN SEE THE CHART HERE ON THE LEFT IS THE CASH FLOW, THE YELLOW LINE IS THE REVENUES. AND SO THE BARS ARE THE EXPENSES. SO YOU CAN SEE THAT IN THE TWO YEARS COMING UP, THE [00:10:01] EXPENSES ARE WELL ABOVE THE REVENUE. AND THEN THE MIDDLE GRAPH SHOWS THE YELLOW LINE IS THE RESERVE BALANCE, THAT CASH BALANCE, AND YOU CAN SEE THAT IT GOES NEGATIVE, UH, VERY STEEPLY. AND THEN FINALLY THE COVERAGE CHART. THE YELLOW LINE IS YOUR, UH, YOUR TOTAL REVENUES. THE GREEN SHOWS YOUR OPERATING EXPENSE. THE PURPLE-ISH COLOR SHOWS THE DEBT SERVICE. AND SO OUR REVENUES, UM, WOULD PAY FOR THAT. AS I SAID, YOU KNOW, THE DEBT SERVICE COVERAGE IS IN GOOD SHAPE, SO THE REVENUES WOULD COVER THAT, UH, DEBT SERVICE AND THE O AND M IN TOTAL, BUT IT'S REALLY THE CASH BALANCE THAT'S A PROBLEM. AND SO THIS IS THE SCENARIO THAT WE ARE RECOMMENDING. UM, YOU CAN SEE THAT THE CASH FLOW LOOKS GOOD. UM, YOU'VE GOT THE TARGET RESERVES THAT ARE COMING DOWN TO MEET THOSE GREEN BARS, THE 60 DAY TARGET. UM, AND THEN THE COVERAGE. YOU DO HAVE A BUFFER THERE WITH THE COVERAGE AS IT IS HIGHER THAN, UM, THE O AND M AND DEBT SERVICE COMBINED. AND SO THE TABLE BELOW AGAIN, SHOWS THOSE INCREASES THAT ARE RECOMMENDED. IT ALSO SHOWS THE DEBT THAT WE ARE RECOMMENDING OR THAT WE ARE PROJECTING THAT WE WOULD BORROW IN ORDER TO FUND THE CIP. AND SO YOU CAN SEE HOW MUCH DEBT WOULD BE ISSUED IN EACH OF THOSE THREE YEARS. SO WHAT DOES THIS MEAN FOR CUSTOMERS? UH, SO THIS IS A SINGLE FAMILY RESIDENTIAL CUSTOMER INSIDE THE CITY, UH, THAT USES 5,000 GALLONS OF, OF WATER. AND SO THEIR BILL IS SHOWN HERE. UM, THIS IS FOR WATER ONLY. UH, THE GREEN IS THEIR BASE CHARGE. IT WOULD GO FROM 7 98 TO 8 34 PER MONTH. THE PURPLE IS THE CUSTOMER CHARGE. IT WOULD INCREASE FROM 3 84 TO 4 0 1 PER MONTH. AND THEN THE GALLONAGE CHARGE IS THERE IN BLUE. AND THAT FOR FIVE, 5,000 GALLONS OF WATER WOULD GO FROM 28. SO THE TOTAL BILL WOULD INCREASE BY A DOLLAR 77 FROM 30 80 TO 41 57 PER MONTH FOR THE SEWER. UM, WE SEE THE BASE CHARGE AGAIN IN GREEN WOULD INCREASE FROM 8 62 TO 9 88. CUSTOMER CHARGE FROM FOUR 14 TO 4 6 4 74. AND THE GALLON EDGE CHARGE WOULD INCREASE FROM 27 98 TO 32 POINT OF SEVEN. SO THE TOTAL INCREASE FOR SEWER WOULD GO FROM $40 AND 74 CENTS TO 46 69. SO ALMOST $6 INCREASE. AND THEN WHEN WE COMBINE THE TWO, YOU CAN SEE THAT THERE ON THIS LAST CHART, UH, THE COMBINED BILL WOULD INCREASE FROM $80 AND 81 CENTS PER MONTH TO $88 AND 26 CENTS PER MONTH. WE LOOKED AT SOME OTHER UTILITIES IN THE AREA. UM, THESE ARE SOME THAT WE HAVE COMPARED TO, UM, IN THE LAST FEW RATE STUDIES. AND SO YOU SEE BAYTOWN IS CURRENTLY RIGHT IN THE MIDDLE. UM, THE POSITION FOR BAYTOWN WOULD NOT CHANGE AMONG THESE UTILITIES. UM, IT WOULD JUST SIMPLY INCREASE BUT STILL STAY IN BETWEEN PEARLAND AND DEER PARK. UM, AND THEN THESE ARE ALL CURRENT RATES FOR THESE CITIES SHOWN. UM, I WILL NOTE THAT LEAGUE CITY HAS, UM, RECENTLY ADOPTED EARLIER THIS YEAR, A FIVE YEAR RATE PLAN. UH, SO THEY WILL BE RAISING RATES. THEY HAVE ALREADY PASSED A RATE INCREASE, UM, FOR THE UPCOMING YEAR. UM, AND I BELIEVE IT WAS AROUND MAYBE 6%. SO JUST TO GIVE YOU SOME ADDITIONAL INFORMATION. BUT THEY HAVE ALREADY ADOPTED RATES FOR THE NEXT FIVE YEARS. WITH THAT, I'LL TAKE ANY QUESTIONS. YOU HAVE COMMENTS OR QUESTIONS? I HAVE A QUESTION. UM, I I WAS, I GUESS SURPRISED TO SEE THAT ONE, UM, CONTRIBUTING FACTOR BEING THE DECREASED CONSUMPTION. I'M CURIOUS LIKE WHAT'S CONTRIBUTING TO THAT? I MEAN, IF, IF ACCOUNTS ARE CONTINUING TO, TO INCREASE IN USERS ARE INCREASING, DO WE JUST HAVE SOME LARGE, LARGE USERS THAT ARE, I DON'T KNOW, BUSINESSES THAT ARE NO LONGER IN TOWN OR WHAT'S THE, WHAT'S THE DRIVER FOR DECREASED CONSUMPTION? YEAH, THAT'S, THAT'S POSSIBLE. I CAN'T SAY SPECIFICALLY. UM, WE LOOKED AT [00:15:01] A, A SUMMARY OF THE BILLING INFORMATION OVER A FEW YEARS. UM, BUT WE CAN CERTAINLY DIG INTO THAT MORE AND TRY TO COME UP WITH AN EXACT ANSWER. OKAY. I HOPE IT'S, WE'RE JUST DOING SO MUCH BETTER AT FINDING LEAKS. IS THAT WHAT IT IS? FRANK , SAME THING. UM, I, I WOULD LIKE TO SAY THAT , UH, WE ARE, UM, DOING SOME WORK TO TRY TO, YOU KNOW, IDENTIFY UM, AND RESOLVE OUR NON, NON-REVENUE WATER. SO WATER THAT WE'RE PRODUCING BUT NOT GETTING PAID FOR. AND YOU KNOW, WE'RE TRYING TO HIRE A CONSULTANT TO HELP US WITH THAT. OKAY. AND, UH, I THINK SOME OF THAT WILL WOULD DEFINITELY HELP OUR REVENUES IF WE CAN IDENTIFY SOURCES OF NON-REVENUE WATER. THANK YOU. YES, MA'AM. UH, YEAH, OF THE CITY, SHE'S SHOWN ON THE LAST GRAPH, UM, WHICH OF THESE WOULD ARE MORE COMPARABLE TO BAYTOWN? AS FAR AS CONSUMPTION? CONSUMPTION? YEAH. I, OR YOU KNOW, IT'S WHERE, WHICH, WHICH ONE OF THESE CITIES ARE MORE COMPARABLE? I GUESS IT SEEMS LIKE, OKAY. HOUSTON, IT'S A BIGGER CITY. PEARLAND, I DON'T KNOW IF SAME SIZE OR NOT. WELL, YOU KNOW, THEY, THEY MIGHT, EVERY CITY IS DIFFERENT AND UM, EACH CITY MIGHT HAVE SOMETHING THAT IS IN COMMON WITH, UH, BAYTOWN. FOR INSTANCE, CITY OF HOUSTON IS, UH, GOING THROUGH A CONSENT DECREE AS WELL AS, YOU KNOW, BAYTOWN IS IS AS WELL. THE OTHER CITIES ARE NOT, UM, YOU KNOW, UH, I THINK MOST OF THEM, WELL, SOME OF THEM WOULD HAVE SURFACE WATER TREATMENT PLANTS. UM, SO I THINK, UH, PEARLAND DOES EVERYBODY, EVERYBODY EXCEPT LEAGUE CITY WOULD HAVE SURFACE WATER TREATMENT, WHICH IS MORE EXPENSIVE. UM, THEN ON THE SEWER SIDE, YOU KNOW, WITH UH, BAYTOWN BEING VERY FLAT AND SPREAD OUT, WE HAVE A LOT OF LIFT STATIONS, UH, AND LIFT STATIONS OR, YOU KNOW, EXPENSIVE TO MAINTAIN. SO, YOU KNOW, I WOULD HAVE TO LOOK AT WHICH ONE. YOU KNOW, I THINK MAYBE DEER PARK IS PROBABLY A LITTLE MORE CONDENSED. UM, SO MAYBE THEY DON'T COMPARE. WELL, I KNOW HOUSTON DOES HAVE A LOT OF LIFT STATIONS AS WELL. THEY HAVE OVER 480. WE, YOU KNOW, WE HAVE 85 OR SO FOR, FOR OUR SIZE. THAT'S A LOT. MM-HMM . UM, SO, SO WE'RE KIND OF USING, I I I WAS JUST CURIOUS OF HOW THIS LIST WAS, HOW WE CAME TO THESE SIX CITIES, OR WHAT, I'M SORRY, FOUR, FIVE CITIES. THERE ARE CITIES IN THE AREA THAT, YOU KNOW, IT'S BASED ON THE RATE THOUGH, RIGHT? LIKE YEAH, WELL HOW DID WE COMPILE THIS LIST? WHAT ARE, WHAT'S THE, WHY ARE WE COMPARING THESE CITIES? WE DID THIS LIST A FEW YEARS AGO AND, YOU KNOW, UH, I THINK COUNCIL HAD SOME FEEDBACK AS TO WHICH ONES THEY WANTED TO SEE. OKAY. IF YOU WANNA SEE DIFFERENT ONES, WE CAN ADD DIFFERENT ONES. OKAY. YEAH, I, IT'D BE INTERESTING TO SEE CITIES THE SIZE OF BAYONE, RIGHT? YEAH. THE POPULATION WAS SIMILAR OF, I KNOW YOU'RE RIGHT, YOU, NOT ALL CITIES ARE THE SAME, BUT KIND OF SEE SOMETHING THAT'S COMPARABLE. IT'D BE INTERESTING TO SEE HOW WE MEASURE UP WHEN IN THAT STRATA OF CITIES, WHICH ONES CITIES AT ROUGHLY OUR SIZE WITH MAYBE THE X AMOUNT, SAME AMOUNT OF LIFT STATIONS AND MAINTENANCE NEEDS. UH, I THINK YOU'RE PROBABLY, YOU KNOW, AS FRANK POINTED OUT, THE LIFT STATIONS IS REALLY A FACTOR OF IT BEING SO FLAT. SURE. SO CITIES IN THE HOUSTON AREA ARE GOING TO HAVE A SIMILAR, UM, YOU KNOW, SYSTEM. THEY'RE ALL TRYING TO PUMP, UH, WASTEWATER. SO MOST OF THESE ARE GONNA BE SURFACE WATER TREATMENT PLANTS. YEAH. BUT SOME OF THEM AREN'T AS SPREAD OUT. LIKE, UH, LIKE I SAY, THE, THE MORE YOU GET SPREAD OUT, THE MORE LIFT STATIONS, RIGHT. YOU HAVE TO HAVE, UM, I WOULD JUST SAY IF THERE'S SOME OTHER CITIES YOU WANT TO COMPARE TO, LET US KNOW AND WE CAN REACH OUT TO THEM. SMELL. UM, CAN WE GO BACK TO SLIDE EIGHT FOR ME? EIGHT? YEAH. . OH, I JUST WANTED SOME CLARITY. I WAS NOTICING WHERE, UM, THE WATER RATE INCREASE WAS 4.5, SEWER WAS 14.6, BUT THEN YOU SAID COMBINED WAS 8.7. I I WASN'T FOLLOWING HOW THAT'S COMBINED. 'CAUSE IT'S NOT ADDITIVE. IT'S, IT'S MORE LIKE AN AVERAGE. YES. SO, SO IF YOUR WATER BILL GOES UP BY 4.5% AND YOUR WASTEWATER BILL GOES UP BY 14.5%, YOUR TOTAL BILL COMBINED IS GOING UP BY ABOUT 8.7%. THE, THE WHOLE BILL. OKAY. AND THEN WHAT DID YOU MEAN BY, UH, MR. SEMINO WHEN YOU WERE TALKING TO COUNCILMAN POWELL? [00:20:01] WHAT DID YOU MEAN BY UH, WATER THAT WE'RE PRODUCING? CAN YOU GIMME AN EXAMPLE OF NON-REVENUE WATER THAT WE PRODUCE? SO, UM, THAT'S WATER THAT WE DON'T, YOU KNOW, THAT WE'VE PRODUCED AND WE HAVEN'T, YOU KNOW, WE'RE NOT COLLECTING REVENUE FOR, SO IT WOULD BE WATER THAT'S LOST THROUGH, UH, LEAKS THROUGH, UH, LIKE FLUSHING OUR HYDRANTS, UM, AND WATER THAT, YOU KNOW, UH, IS NOT METERED CORRECTLY. SO, YOU KNOW, IT'S ANYTHING THAT'S NOT, YOU KNOW, THAT WE PRODUCE BUT IS, IS WE'RE NOT RECEIVING THE REP AS WELL AS, YOU KNOW, WHAT THE CITY USES ITSELF. DO YOU KNOW WHERE WE'RE AT ON, UM, I KNOW WE'VE TALKED A LOT ABOUT, UM, GETTING ALL THE NEW METERS OR GETTING ALL THE OLD METERS REPLACED WITH NEW RIGHT. DO WE KNOW WHERE WE'RE AT ON THAT RIGHT NOW? ON THE NON-REVENUE WATER? SO, UM, NO. ON REPLACEMENT OF THE METERS. OH, REPLACEMENT OF THE METERS. YEAH. UM, WELL WHAT, UH, MAYBE THERESA COME UP THAT PART OF UTILITY BILLING PROJECT, UM, BECAUSE IF IT TIES INTO SOME OF THE LOST REVENUE, THEN IT YES, YES. RIGHT. UM, THE METER PROGRAM IS ON THE CO THAT WE'RE ISSUING THIS YEAR THAT WE'LL BE BRINGING TO YOU, UM, THE PARAMETER SALE ON JULY 10TH. AND SO THAT WILL COVER REPLACING ALL THE METERS SO THAT CUSTOMERS CAN, UM, REVIEW THEIR CONSUMPTION ONLINE, UM, HOURLY OR DAILY OR WHENEVER. SO THAT IS A PART OF THAT PROGRAM AND THAT SEAL. OKAY. THAT'S ALL I HAD. THANK YOU. ANYONE ELSE? UH, I GOT TERESA, SORRY. SHE, SHE BROUGHT SOMETHING UP AND I JUST WANNA CLARIFY. SO THE CO THAT, THAT WE'RE GONNA BE LOOKING AT, WE'RE GONNA GET ALL OF THE METERS REPLACED. YES, SIR. SO WE, 'CAUSE WE'VE BEEN LED TO BELIEVE THAT BEFORE AND THEN WE FIND OUT THAT ONLY 50 OR 60% HAD BEEN DONE. SO NOW WE'RE TALKING 2200 ACCOUNTS OR 22,000 ACCOUNTS. YES SIR. ALL OF THEM. YES. OKAY, I'M GOOD WITH THAT. AND MAYOR AND COUNSEL, BOTH OF Y'ALL REAL QUICK. SO LIKE THIS IS A BIGGER DISCUSSION. I BELIEVE IT'S ONE OF THE THINGS THAT WE ARE TRACKING THROUGH INVISIO. IS WATER LOSS FRANK OR IS THAT INTERNAL THAT WE'RE STARTING TO TRACK NOW? YES, YES. I WAS GONNA MENTION, I I THOUGHT THAT WAS COUNCIL MEMBER GRAHAM'S QUESTION BUT GO AHEAD, GO AHEAD. MY QUESTION . SO WE ARE TRACKING, UM, NON-REVENUE WATER ON INVISIO. UM, IT DOES FLUCTUATE, UH, IN DIFFERENT MONTHS. SO THERE'S BOTH ACCOUNTABLE NON-REVENUE WATER AND NON-ACCOUNTABLE NON-REVENUE WATER. THE ACCOUNTABLE IS THE ONE WE KNOW ABOUT, LIKE THE FLUSHING AND THE LEAKS WE KNOW ABOUT. THERE ARE LEAKS WE DON'T KNOW ABOUT OR, YOU KNOW, UH, WATER THEFT OR IMPROPERLY METERED OR IMPROPERLY BUILD WATER. SO, UH, THAT'S THE ONE WE DON'T KNOW ABOUT AND THAT'S THE ONE THAT CONCERNS ME. UM, THE, THE ACCOUNTABLE NON-REVENUE WATER STAYS PRETTY, UM, CONSISTENT ABOUT 5% OR SO. THE NON-ACCOUNTABLE NON-REVENUE WATER IS FLUCTUATING A LOT. IT, IT GOES FROM, YOU KNOW, MAYBE FIVE TO 8%, UM, ONE MONTH AND NEXT MONTH IT MIGHT BE, YOU KNOW, 18 20%. SO IT, IT IS A BIG DIFFERENCE AND THAT'S WHY WE'VE TALKED TO THIS, UH, CONSULTING FIRM WHO WOULD, UM, HELP US IDENTIFY THE SOURCES OF THE NON-REVENUE WATER AND HELP HELP US, UH, MAKE SURE WE'RE COLLECTING EVERYTHING WE SHOULD BE THAT CORRECT. AND THAT'S, SO IT, IT, IT IS A BIG ISSUE AND RIGHT. YOU KNOW, WE'RE TRYING TO TAKE A HOLISTIC APPROACH. 'CAUSE LIKE ONE OF THE THINGS WE WILL TALK ABOUT TOMORROW WITH THE BUDGET MEETING IS ANOTHER ASPECT OF, UM, WITH UTILITY BILLING JUST IN GENERAL, RIGHT? AND IT GOES TO NON COLLECTING OR JUST REVENUE COLLECTION. SO RIGHT NOW, UM, LESS THAN 85% OF THE RESIDENTS OF BAYTOWN PAY THEIR WATER BILL ON TIME. AND SO THAT'S A PRETTY LARGE DELTA THAT ARE NOT PAYING THEIR WATER BILL. AND SO WE HAVE, UM, A LOT OF LOST REVENUE BUILT INTO THAT CATEGORY THAT WE HAVE TO LOOK AT. AND IT'S BEEN SOMETHING THAT WE'RE TRYING TO LOOK AT ALL THESE DIFFERENT PIECES THAT ARE PLAYING INTO THE REVENUE PORTIONS OF WHAT WE HAVE, UH, LOST WATER REVENUE COLLECTION, JUST LOOKING AT THROUGH THE ENTIRE SYSTEM AND TRYING TO WORK TO REBUILD THAT, UH, THROUGH OVER TIME AS WELL. AND SO IT'S JUST ONE MORE THING THAT WE WILL TRY TO LIKE HIT ON WITH Y'ALL TO REALLY TALK ABOUT, UH, POLICIES AND FEES THAT GO WITH WITH HOW THIS IS BUILT. YES, MA'AM. UM, WITH THESE NEW RATES OR, OR PROPOSED RATES, I KNOW CURRENTLY WE HAVE A SMALL DISCOUNT FOR SENIOR 65 AND OVER. UM, SO WILL THOSE DISCOUNTS APPLY TO THESE NEW PROPOSED RATES OR [00:25:01] IS EVERYONE GONNA BE RAISED? UM, WE HAVEN'T DISCUSSED THAT SPECIFICALLY. I, IT WAS, I GUESS MY ASSUMPTION THAT THEY WOULD STILL, THEY WOULD STILL CONTINUE. WE, WE WEREN'T PROPOSING TO END ANY SENIOR DISCOUNTS. OKAY. SO THAT WAS MY QUESTION. THANK YOU. YEAH, I ACTUALLY HAVE TWO MORE, MAYOR COUNSEL. WE'RE HOPING Y'ALL SPENT, WE, WE BOOKED, WE KNEW THAT THIS WAS GONNA BE, UH, A LOT TO TAKE IN. SO WE BOOKED LIKE AN HOUR AND A HALF TONIGHT TO TALK ABOUT THIS AND THEN LEADING INTO THE BUDGET DISCUSSION TOMORROW. SO I'M HOPING TO LIKE SUPER ENGAGE AS MUCH AS WE CAN WITH QUESTIONS. IT'S BEEN GOOD TO HAVE. SO THE CITIES THAT WE USE AS COMPARISONS, UM, ARE THEY ALL GETTING THEIR WATER FROM BAWA AS WELL? UH, NO. NO, THEY, THEY'RE NOT. SO THE OTHER CITIES WOULD, MOST OF THEM GET, UH, THEY'RE, THEY'RE PRODUCING THEIR OWN WATER, BUT UM, THEY WOULD BE BUYING RAW WATER FROM CITY OF HOUSTON AS WELL. MM-HMM . THEY'RE RAW WATER. MM-HMM . UH, EXCEPT FOR LIKE LAKE CITY. SO I, I THINK OUR LAKE CITY HAS THEIR OWN, LAKE CITY IS AN OWNER. UH, THEY'RE PART OF THE CLEAR LAKE CITY WATER AUTHORITY. THEY OWN, THEY OWN THE WATER LIKE THE CITY OF HOUSTON. SO THEY, LIKE OTHER CITIES SELL THEIR WATER, THEY HAVE THE ABILITY TO SELL THEIR WATER. I'M NOT SURE IF THEY DO, BUT THEY OWN THE WATER. I WAS GOING TO, UH, COUNCIL MEMBER GRIFF'S POINT I, WHEN WE'RE LOOKING AT COMPARISONS AND I, I DON'T KNOW CITIES TO ASK FOR, TO COMPARE, I WOULD HAVE TO GO RESEARCH IT FIRST. BUT JUST KNOWING HOW WE GET OUR WATER VERSUS OTHER CITIES, I THINK THAT THAT ALSO PLAYS A ROLE IN OUR INCREASES VERSUS OTHER COMMUNITIES. UH, AND THEN MY, I THINK IT'S GONNA BE MY LAST QUESTION. UM, I KNOW Y'ALL DID ALL THE CHARTS FOR US FOR THE 5,000 GALLONS, BUT DID Y'ALL GO UP TO THE NEXT TIER, UH, FOR USAGE? AND DO Y'ALL HAVE ANY COMPARISONS OF HOW THOSE BILLS WOULD CHANGE? UH, WE DON'T HAVE SLIDES, BUT WE HAVE IN THE PAST DONE, UM, I'VE DONE 2000 GALLON USER, A 5,000 GALLON USER MM-HMM . AND I THINK A 12,000 GALLON USER. YEAH, I REMEMBER. SO IF THERE'S THE 12,000, I WOULD LIKE TO SEE DIFFERENT LEVELS YOU LIKE TO SEE. I, WE CAN SEND THOSE OUT, YOU KNOW, AFTERWARDS. ALRIGHT. IS IT 12,000 USER? YEAH, 12,000 WILL WORK. I JUST WANT TO LOOK AT ONE OF THE OTHER HIGHER TIERS. YEAH. OKAY. AND I WOULD JUST ADD THAT, UM, THE INCREASE IS BEING APPLIED TO ALL RATES EQUALLY. MM-HMM . SO ALL BILLS, NO MATTER WHAT THE CONSUMPTION IS, WOULD GO UP BY THAT PER SAME PERCENTAGE. UM, THE ONLY, THE POINT AT WHICH YOU WOULD, THAT WOULD CHANGE WOULD BE WHEN YOU HIT THE SEWER CAP AND THEN THE PERCENTAGE INCREASE FOR THOSE BILLS THAT HAVE HIT THE SEWER CAP WOULD START TO COME DOWN FROM THAT 8.7% DOWN TOWARDS THE 4.5% FOR THE WATER. WELL, AND I MAY BE GETTING TOO MUCH INTO THE TRENCHES WITH THIS, BUT HAVEN'T WE HAD PEOPLE QUESTION BEFORE THAT THEY MIGHT BE CONSUMING THE WATER BUT NOT NECESSARILY USING THE SAME AMOUNT OF SEWAGE, BUT THE WAY OUR BILLING IS, IS THAT ONCE YOU HIT THAT CAP, YOU, WHETHER YOU USE THAT SEWAGE OUTPUT OR NOT. SO FOR ME, I, I STILL THINK THAT NEEDS TO BE WORKED ON. SO I DON'T KNOW HOW WE WOULD GO ABOUT THAT. I GUESS SINCE THE CAP, THE CAP MEANS THEY'RE NOT BILLED ABOVE THAT LEVEL MM-HMM . SO ABOVE 12,000 GALLONS, THEY'RE NOT BILLED. THEY'RE NOT BILLED THAT. AND WE, WE HAD THAT I THINK DISCUSSION LAST YEAR. YES. YEAH. WE PUT THE CAP BACK ON . I REMEMBER. ALRIGHT, THANK YOU MAYOR. SO IN RELATION TO THAT, IF I'M NOT MISTAKEN, WE WERE TOLD, LIKE, I KNOW I HEAR A LOT THAT UM, HEY, I AM WATERING MY YARD AND WHY ME, WHY AM I BEING CHARGED FOR SEWER? BECAUSE I'M ONLY WATERING MY YARD. BUT THERE IS NO WAY FOR US TO DISTINGUISH NO. BETWEEN THE TWO. RIGHT? BECAUSE I, I KEEP HEARING IT THAT WE, WE SHOULD BE ABLE TO KNOW HOW TO DISTINGUISH OR THAT WE DO KNOW, BUT WE ACTUALLY DON'T. IS THAT CORRECT? NO, WE, WE DON'T METER THE SEWER, SO WE DON'T, WE DON'T HAVE AN ACCURATE, YOU KNOW, UH, COUNT OF THE SEWER MM-HMM . THEY CAN GET AN IRRIGATION METER MM-HMM . WHICH WOULD SEPARATE AND THEY WOULD NOT GET CHARGED FOR SEWER IF THEY HAVE AN IRRIGATION METER. OKAY. SO THAT, THAT WOULD BE A SEPARATE METER THAT IS ONLY FOR IRRIGATION. AND IN THAT CASE THEY WILL NOT BE CHARGED FOR SEWER. BUT THE, THE REGULAR HOUSEHOLD WHO, YOU KNOW, JUST HAS ONE METER MM-HMM . AND THEY'RE WATERING, UM, WE DON'T KNOW HOW MUCH THEY'RE WATERING. UH, YOU KNOW, CONVERSELY YOU HAVE TO ALSO KNOW THAT THEY MAY HAVE, YOU KNOW, UH, PROBLEMS WITH THEIR PRIVATE SEWER LINE THAT IS GETTING INFLOW AND INFILTRATION. YEAH. AND SO WE'RE TREATING MAYBE MORE, UH, WASTE WASTEWATER THAN WHAT [00:30:01] THEY'RE ACTUALLY USING IN WATER SOME MONTHS. AND WE, WE DO SEE THAT AT THE PLANTS. SO DURING RAINY SEASON, YOU KNOW, OUR RAINY TIMES WE'RE TREATING MORE WASTEWATER THAN WE HAVE WATER THAT WE'VE PRODUCED DUE TO THE RUNOFF. YEAH. BECAUSE THERE'S FLOW AND INFILTRATION. RIGHT, RIGHT. SO IT'S KIND OF BOTH SIDES OF THE ISSUE. MY SECOND QUESTION, MAYOR, UM, IF LAKE CITY, UM, ALSO SELLS, 'CAUSE I KNOW THAT THEY'RE A, A BIGGER POPULATION THAN EVEN WE ARE, THEY'RE OVER A HUNDRED THOUSAND. SO WOULD WE EVER CONSIDER LOOKING AT BUYING FROM SOMEONE ELSE OTHER THAN THE HOUSTON OR, OR GOING THROUGH BAWA OR THE, THE PROBLEM WOULD BE TRANSPORTATION COSTS. GOT IT. YOU'D HAVE TO HAVE A PIPELINE TO GO FROM LAKE CITY TO, FROM THE REROUTING AND THAT WOULD BE VERY EXPENSIVE. OKAY. THANK YOU. YEAH. OKAY. NOTHING ELSE. THANK YOU. OKAY, THANK YOU. NOW WE WILL [b. Receive information regarding the Bayou Bowl. ] MOVE ON TO TWO B RECEIVED INFORMATION REGARDING, REGARDING THE BAYOU BALL. IS MR. OLAND HERE? NOT HERE. OKAY. WELL, SINCE HE'S NOT HERE, WE'VE ADJOURNED EVERYTHING ON THIS AGENDA. SO I'LL NOW CLOSE THIS MEETING AT 5 36. OKAY. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.