* 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. SO, [00:00:01] ALL RIGHT, WELCOME [ BAYTOWN AREA WATER AUTHORITY NOTICE OF MEETING BAYTOWN AREA WATER AUTHORITY SPECIAL MEETING WEDNESDAY, DECEMBER 10, 2025 5:00 P.M. BAYTOWN CONFERENCE ROOM, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ] EVERYONE. UM, I'D LIKE TO CALL THIS MEETING TO ORDER AND ANNOUNCE THAT WE DO HAVE A QUORUM. OUR FIRST ITEM OF BUSINESS WILL BE CITIZEN COMMENTS. DO WE HAVE ANY CITIZENS DESIRING TO SPEAK? NO, THEY'RE ALL IN THE OTHER MEETING. THEY'RE IN THE OTHER. UM, NEXT WE WILL CONSIDER, UH, TO APPROVE THE MINUTES OF THE AUTHOR'S REGULAR MEETING HELD ON SEPTEMBER THE 17TH, 2025. DO YOU HAVE A MOTION? I MAKE A MOTION. MOTION. SECOND MOTION AND SECOND QUESTIONS OR DISCUSSION? HEARING NONE. ALL THOSE IN FAVOR SAY AYE. A. AYE. OPPOSED? LIKE, SIGN. MOTION CARRIES UNANIMOUSLY. NEXT, WE WILL CONSIDER APPROVING THE MINUTES OF THE AUTHORITY SPECIAL MEETING HELD ON OCTOBER THE EIGHTH, 2025. SO MOVED. SECOND MOTION. AND SECOND, UH, ANY QUESTIONS? DISCUSSION? I HAVE ONE QUESTION. UH, FRANK, WAS THIS THE MEETING THAT WE DISCUSSED SALES TAX ON THE ONE INVOICE, OR DID I MISS IT AND IT'S THE WRONG MONTH? I DON'T REMEMBER WHICH MEETING THAT, BUT WE, WE TOOK CARE OF THAT PROBLEM, RIGHT? WE DID, WE DETERMINED THAT IT WAS PROPER TO CHARGE THE SALES TAX. UM, I FORGET, DO YOU REMEMBER? I, I'M DRAWING A BLANK ON THE WHOLE THING, SO I'M JUST, I'M TRYING TO JOG MY, UM, I DON'T REMEMBER THE ITEM IT WAS ON, BUT WE WENT TO COUNCIL AND THEN WE HAD RESEARCHED IT IN THE MEANTIME. WHICH, AND THE SALES TAX WAS APPROPRIATE. I DON'T REMEMBER. OKAY. ALRIGHT. ANY OTHER QUESTIONS? DISCUSSIONS. 'CAUSE I THINK IT WAS, UH, MATERIALS THAT WERE NOT GOING TO BE A PERMANENT PART OF THE, UH, PROJECT. SO IF THEY'RE THINGS THAT WILL BE REMOVED, YOU HAVE TO PAY SALES TAX ON LIKE FORMS. LIKE FORMS. IF THEY'RE REMOVED, YOU CAN'T, THEY'RE, THEY'RE SUBJECT TO SALES TAX. SALES TAX NUMBERS ARE JUST CRAZY, BUT, OKAY. YEAH, IT WAS ON, IT WAS JUST A FEW HUNDRED DOLLARS. YEAH. YEAH. THANK YOU. ALRIGHT, ANYTHING ELSE? ALRIGHT, ALL THOSE IN FAVOR SAY AYE. A AYE. THOSE LIKE SIGN MOTION CARRIES UNANIMOUSLY. WE'LL NOW CONSIDER A RESOLUTION AUTHORIZING AMENDMENT NUMBER ONE TO THE PROGRESSIVE DESIGN BUILD AGREEMENT WITH BAYTOWN WATERWORKS PARTNERS, THE MCCARTHY AND COROLLA JOINT VENTURE FOR THE AUTHORITIES EAST SURFACE WATER PLANT PHASE TWO EXPANSION PROJECT AT A GUARANTEED MAXIMUM PRICE. GOOD EVENING. UH, UH, PRESIDENT AND DIRECTORS, I'LL GIVE YOU A, JUST A BRIEF INTRODUCTION ABOUT THIS ITEM. AND THEN I HAVE, UH, LINDSEY KOVAR HERE WITH BGE, WHO'S OUR OWNER'S ADVISOR SHOULD GO THROUGH A MORE DETAILED, UH, EXPLANATION. UH, IT'S KIND OF, UH, IN THE FORMAT OF OUR REGULAR, UH, ABOUT WHAT EACH UPDATE. UH, WE'LL DO IT DURING THIS ITEM BECAUSE IT HAS A LOT OF INFORMATION ABOUT THE GUARANTEED MAXIMUM PRICE. UH, SO AS YOU SAID, THIS IS A PROPOSED RESOLUTION FOR AMENDMENT ONE TO THE, UH, DESIGN BUILD AGREEMENT, UM, FOR THE EXPANSION PROJECT. PROJECT IS DIVIDED INTO TWO PHASES. PHASE ONE IS THE CURRENT PHASE, UH, WE'RE IN. IT INCLUDES, UH, DESIGN ESTIMATING AND PRE-CONSTRUCTION SERVICES. AND, UH, THAT EFFORT HAS LED TO A, UH, GUARANTEED MAXIMUM PRICE, WHICH, UM, THEY HAVE PROVIDED TO US. AND THIS AMENDMENT WILL ADOPT THAT, UH, GUARANTEED MAXIMUM PRICE. UM, THE CURRENT PHASE ONE CONTRACT TOTAL IS $6,000,496,709. AND THIS AMENDMENT ADDS THE, THE PHASE TWO GMP IN THE AMOUNT OF $63,286,152, BRINGING THE TOTAL PROGRESSIVE DESIGN BILL CONTRACT TO 69,000,708 $2,861. PHASE ONE SERVICES COVERED A DURATION OF, UH, 455 DAYS. PHASE TWO SERVICES COVER 869 DAYS. UM, AMENDMENT ONE ESTABLISHES THE CONSTRUCTION SCOPE FOR PHASE TWO. THIS AMENDMENT WILL IF APPROVED TONIGHT, WE'LL GO BEFORE, UH, STATE COUNCIL TOMORROW, UH, FOR FINAL APPROVAL. SO NOW I'LL LET, UH, LINDSEY GO THROUGH PRESENTATION AND I THINK I'LL PROBABLY CUT THE LIGHT. WE'LL TRY TO CUT THE LIGHT, SEE IF IT'S NOT TOO DARK. THAT'S ALSO WHY I PRINTED COPIES 'CAUSE I WAS TOLD SOMETIMES IT COULD BE A LITTLE HARD TO SEE, YOU KNOW, ON THIS. WE GOOD? ALL RIGHT, I'M NOT GONNA USE MY NOTES, SO THAT'S OKAY. [00:05:01] UM, SO FRANK ALREADY, YOU KNOW, WENT OVER THIS A LITTLE BIT, BUT I KNOW PROGRESSIVE DESIGN BUILD IS NEW. WE'VE TALKED ABOUT, YOU KNOW, THE PROCESS OF IT A LITTLE BIT, BUT THIS IS JUST KIND OF A REMINDER FOR Y'ALL. AS YOU SAID, WE ARE GETTING TOWARDS THE END OF PHASE ONE, WHICH ESSENTIALLY GOT US THROUGH 90% DESIGN AND THEY PRICED EVERYTHING OFF OF A 75, I'M SORRY, A 70% DESIGN SET. UM, AND I'LL GO OVER A LITTLE BIT HOW THEY, THEY PRICED THAT HERE IN A MINUTE. SO IF APPROVED, THEN WE GO INTO PHASE TWO AND PHASE TWO THEY WILL FINISH THE DESIGN AND THEN THEY WILL DO ALL OF THE CONSTRUCTION AND, AND PROCURE ALL OF THE MATERIALS AND EQUIPMENT AND SUCH. UM, IF YOU COULD GO TO THE NEXT SLIDE, PLEASE. SO THIS IS NOT SHOWING VERY WELL, SO I'M NOT GONNA SAY ON THIS, THIS JUST, AGAIN, IT KIND OF TALKS THROUGH THE PROCEDURE. SO WHAT HAPPENED IS, UM, THEY PROVIDED BWP PROVIDED US A PRICE AT 70% AT THE END OF OCTOBER. UM, IT HAD, UM, NOT JUST THEIR COST, BUT IT ALSO HAD ALL THEIR ASSUMPTIONS, THEIR CONTINGENCIES, THE BIDS, HOW THEY GOT TO WHERE THE COST THAT THEY GOT TO, UM, WHO ALL THE SUBCONTRACTORS ARE GOING TO BE, WHO DID ALL THE BIDS. SO IT WAS, IT WAS A LOT OF INFORMATION THAT WE GOT IN ON OCTOBER 31ST. SINCE THEN, UM, WE HAVE BEEN WORKING WITH THEM, REVIEWING THE COSTS, NEGOTIATING SOME OF THE CONTRACT PARAMETERS, UM, AND JUST HAVING A LOT OF WORKSHOPS AND A LOT OF MEETINGS. SO THERE'S BEEN A LOT OF REVIEW, YOU KNOW, ON THIS WORK TO DATE. AND THAT'S KIND OF SHOWN IN THIS, THIS FIGURE UP HERE IS THAT WHO'S WITH US HERE TODAY? THAT IS WHO'S WITH US HERE TODAY. AND IF YOU GO TO THE NEXT SLIDE, I ACTUALLY HAVE UP HERE, THIS IS, UM, MOSTLY THE TEAM. UH, THIS IS THE ONE THAT, UM, WHEN THEY PROPOSE TO WIN THIS WORK, THEY PROVIDED, YOU KNOW, WHO KIND OF THE KEY PERSONNEL WE'RE GONNA BE IN PHASE ONE AND PHASE TWO. AND THIS IS PHASE TWO, SO TURN THE LIGHTS ON IT. SOME OF THESE NAMES ARE WASHED OUT. I DON'T KNOW IF YOU NEED TO READ ALL THE NAMES YOU KNOW UP THERE, BUT KIND OF THE INTENTION OF THIS IS TO REMIND YOU THIS, UM, BAYTOWN WATER WORKS PARTNERS IS Y'ALL'S TEAM HERE. THEY ARE A JOINT VENTURE BETWEEN MCCARTHY AND COROLLO, WHICH IS WHO WE HAVE BACK HERE IN CASE THERE'S ANYTHING I CAN'T ANSWER, THEY'RE GONNA HELP ME ANSWER IT. PHASE ONE WAS, WHILE LED BY MCCARTHY WAS, UH, VERY HEAVILY COROLLO AS THEY'RE THE ENGINEER, THEY DID THE DESIGN WORK. PHASE TWO IS GOING TO BE MORE HEAVILY MCCARTHY AS THE CONTRACTOR, YOU KNOW, OUT HERE. RUSSELL HAS BEEN TO MANY OF Y'ALL'S BOARD MEETINGS. I'LL PROBABLY HAVE SEEN HIM BEFORE. UM, HE'S GONNA CONTINUE TO LEAD THAT TEAM IN PHASE TWO. UM, AND IF YOU CAN GO TO THE NEXT SLIDE, JUST KIND OF WANNA RUN. ONE OF THE REASONS Y'ALL ORIGINALLY SELECTED THEM IS BECAUSE OF THEIR EXPERIENCE, NOT ONLY WITH ALTERNATIVE DELIVERY, BUT ALSO WITH WATER PROJECTS IN GENERAL. I LISTED UP HERE JUST A FEW. UM, THEY HAVE WORKED ON, UH, THIS PLANT BEFORE COROLLA HAS EXPERIENCE WITH THIS PLANT. UM, THEY'VE ALSO WORKED ON MCCARTHY'S, WORKED ON YOUR CITY OF, UH, BAYTOWN WASTEWATER PLANTS. THEY'VE DONE THE CITY OF HOUSTON NORTHEAST PLANT. UM, AND I JUST LISTED A FEW OTHERS, 10, 15, 30 MGD. SO IT'S VERY COMPARABLE EXPERIENCE. THE LIST COULD HAVE BEEN LONGER. I JUST PICKED UP, YOU KNOW, KIND OF A FEW EXAMPLES. SO IT'S A GREAT TEAM. THEY'VE BEEN GREAT TO WORK WITH. YOU KNOW, SO FAR IT'S BEEN VERY HARMONIOUS. YOU KNOW, US AWA, YOU KNOW, AND THE TEAM TO DATE. AND THIS IS, THIS IS NOTHING NEW FOR Y'ALL. THIS IS WHERE THE DESIGN THAT, WHERE YOU'RE MOVING FORWARD WITH, WITH A FEW, A FEW ADJUSTMENTS. THIS, THIS LAST PICTURE AND I, I DIDN'T HAVE AN UPDATED ONE FOR HERE, BUT IN GENERAL, THIS IS WHAT Y'ALL ARE PROVING. THIS IS WHAT Y'ALL ARE PAYING THE $60 MILLION BILLED. UH, NEXT SLIDE. UH, IT'S THE SAME. AND YOU CAN GO AHEAD AND GO TO THE NEXT. ALL RIGHT, SO HERE'S WHAT WE'RE HERE TO TALK ABOUT TODAY. AND THAT IS THE GMP PROPOSAL. SO A REMINDER, GMP MEANS GUARANTEED MAXIMUM PRICE. SO THE WAY IT WORKS WITH PROGRESSIVE DESIGN BUILD IS, UM, THEY BID OUT 10 DIFFERENT PACKAGES, DO THIS WORK. THE PACKAGES WERE THINGS LIKE CIVIL, UM, ELECTRICAL INSTRUMENTATION, THE GST ARCHITECTS, SO KIND OF TRADE SPECIFIC, YOU KNOW, PACKAGES. AND THEY PUT THAT OUT TO MARKET AND THEY PUT THAT OUT TO BID. AND THEN JUST SIMILAR TO A DESIGN BID BUILD, BIDDERS WOULD COME IN, BUT THEY'RE BIDDING TO THAT TEAM INSTEAD OF DIRECTLY TO Y'ALL ON THOSE PACKAGES. THEY THEN COLLECTED THAT INFORMATION AND THEN FROM THAT INFORMATION, UM, PICKED THE, UM, THE CONTRACTORS TO LEAD THAT BASICALLY PROVIDED THE BEST VALUE, YOU KNOW, TO THE PROJECT. YOU KNOW, HERE. AND THEN FROM THOSE 10 DIFFERENT BID PACKAGES THEY CAME UP, THEY HAVE THESE COSTS. SO [00:10:01] THE DIRECT CONSTRUCTION COST IS AROUND $47 MILLION. THE ALLOWANCES THAT HAVE BEEN AGREED ARE UH, 425,000. SO WHAT AN ALLOWANCE IS, IS IT'S BASICALLY AN AREA WHERE AT THE TIME WE HAD JUST MAYBE SOME QUESTIONS ON EXACTLY WHAT WOULD BE DONE. SO AN EXAMPLE THERE IS THE ADDITIONAL GROUNDWATER DEWATERING SCOPE. WE HAVE GEOTECH. WE GENERALLY KNOW WHAT THE, THE GROUNDWATER LEVEL WOULD BE IN HERE. BUT THAT'S JUST ONE OF THOSE THINGS UNTIL YOU START BUILDING, YOU KNOW, THERE SOMETIMES IT'S JUST ADDITIONAL GROUNDWATER DEWATERING YOU WOULDN'T HAVE, UM, ANTICIPATED. SO WE'RE ACCOUNTING FOR THAT ALREADY IN THIS COST. IF IT IS NOT USED, YOU DO NOT SPEND IT. THAT'S THE WAY AN ALLOWANCE WORKS. IT'S ACCOUNTED FOR IN THE COST, BUT IF THEY DON'T NEED IT, YOU DON'T SPEND THAT MONEY. UM, THE THREE DIFFERENT AREAS, WE HAVE A PRETTY GOOD HANDLE ON THIS. WE DIDN'T THINK WE NEEDED A LOT OF ALLOWANCES HERE, BUT THE THREE DIFFERENT AREAS WE IDENTIFIED IS GROUNDWATER, DEWATERING, UM, ADVERSE WEATHER CONDITIONS, UM, AND THEN PRE-TREATMENT SHORING, GST BAFFLES AND EXISTING OPERATING SUPPORT. WHAT THAT LAST ONE IS, IS IF THEY, AN EXAMPLE WOULD BE IF THEY GO OUT THERE AND TURN A VALVE TO ISOLATE A PIPE TO BE ABLE TO CONNECT TO AND THAT VALVE IS NOT WORKING, THEN THEY'RE GONNA REPAIR THAT. AND THAT WILL BE COVERED IN THAT, THAT COST RIGHT THERE. BUT THAT'S AN IF NEEDED, YOU KNOW, IF YOU DON'T NEED IT, Y'ALL DON'T PAY FOR IT. IN ADDITION TO THAT, WE HAVE CONTINGENCIES AT ABOUT 3.8 MILLION. THIS IS AGAIN, A LITTLE DIFFERENT IN ALTERNATIVE DELIVERY VERSUS A DESIGN BID BUILD. UM, BECAUSE THERE'S CONTINGENCIES HERE, THEY, UM, ARE FOR BOTH DESIGN CONTINGENCIES AND CONSTRUCTION CONTINGENCIES. THE DESIGN CONTINGENCIES COVER, IT WAS BID AT A 70%, NOT A HUNDRED PERCENT. SO THERE MAY BE SOME DIFFERENCES BETWEEN THE 70 AND A HUNDRED UM PERCENT AND THAT WOULD COVER THERE. THERE'S ALSO JUST, AGAIN, THINGS THAT WHILE THEY DID THEIR BEST TO FIND WHAT THEY COULD AND AS THEY WERE DESIGNING IT, THERE JUST MAY BE SOME THINGS THEY RUN INTO. AND SO THIS IS MEANT TO COVER THAT THIS IS IN A DESIGN BID BUILD. LIKE WHEN YOU CONTRACTORS BID THIS ON A TRADITIONAL, IT'S BUILT INTO IT. SO IT'S NOT THAT THIS IS REALLY DIFFERENT, IT'S JUST IN HERE YOU'RE SEEING WHAT YOU'RE ACTUALLY PAYING FOR. ONE HERE, UM, PHASE TWO DESIGN AND CONSTRUCTION ADMIN, UM, THAT IS THEIR ENGINEERS, YOU KNOW, TIME AND TO ADMINISTRATE THE PROJECT BONDS AND INSURANCE. I DON'T THINK I HAVE TO EXPLAIN THAT. UM, DESIGN BUILD YOUR FEE, ALL PROGRESSIVE DESIGN BUILD CONTRACTS HAVE A PERCENTAGE, UH, THAT Y'ALL HAVE ALREADY AGREED TO WHEN Y'ALL HIRED BWP. AND THAT'S WHAT THAT IS COVERING. AND THEN THE PHASE ONE SERVICES IS, WHICH Y'ALL HAVE ALREADY APPROVED FOR THEM. SO WHEN YOU TOTAL ALL OF THAT UP, IT IS, UH, $69.8 MILLION. SO THAT'S, IS THAT A MAXIMUM PRICE? THAT IS, UNLESS THERE IS, UM, LIKE AN UNFORESEEN CONDITION OR FORCE MAJEURE OR JUST ONE OF THOSE KIND OF TYPICAL CHANGE ORDER ITEMS. SO LIKE IF, YOU KNOW, SO HAVE A HURRICANE COMES UP, COMES IN, AND SO THAT'S PROBABLY WHAT WE'RE GONNA PAY NO MATTER WHAT. WE'RE NOT. IF EVERYTHING WORKS SMOOTHLY, THEY'RE NOT, IT'S NOT GONNA COME IN AT 3.8 MILLION LESS FOR THE CONTINGENCY NUMBER, PROBABLY LESS. NO. 'CAUSE THAT'S IT. YES, THEY'RE GONNA, ANY, IF THERE'S NO CONTINGENCIES AND THAT'S JUST PROFIT TO THE BANK, THEY TAKE, IF THEY DON'T USE THE CONTINGENCIES, IT'S CONSIDERED A LINE ITEM SAVING AND IT IS SHARED WITH THE YOUNGER. SO, BUT TO YOUR POINT, I THINK IT'S BEST TO EXPECT TO PAY THIS AMOUNT OF MONEY. THE ALLOWANCES, IF THEY'RE NOT USED, THEY COME A HUNDRED PERCENT BACK TO BYLAW. THE CONTINGENCIES ARE SHARED. IS IT? SO WE ORIGINALLY BOUGHT THIS LAND THE RIGHT OF WAY. WE RUBBED IT, WE FINISHED IT, WE BUILT EVERYTHING OUT THERE, GOT ELECTRICITY, GOT ALL THE AGREEMENTS, AND THAT WAS 60 MILLION. AND NOW WE'RE JUST HAVING THIS LITTLE EXPANSION AND THAT'S WAY OVER THE ORIGINAL COST OF THE LAND AND EVERYTHING. SO WHERE, WHERE'S THE BIG, WHERE'S THE BIG, I DON'T THINK INCLUDED THE LAND, LINDSAY'S GOT A, A SLIDE THAT SHOWS COMPARISON TO PHASE ONE. IS IT, IS IT, IS IT MATERIALS THAT'S COST SO MUCH MORE OR IS IT WHERE SHE'S GONNA GET INTO THAT? OKAY, THERE'S TWO MORE SLIDES THAT I ANTICIPATE THOSE QUESTIONS. YOU DON'T I WAS GONNA ASK IT. YEAH, I KNOW. OKAY. IN THE, IN THE UH, UH, THIS CONTRACT OR WHATEVER THERE, AND I'M SORRY, THIS IS FROM MEMORY, THERE IS A, AN ARTICLE THAT IS DELETED AND REPLACING ITS ENTIRETY AND IT HAD TO DO WITH COST SAVINGS [00:15:03] AND IT HAS A NEW DEFINITION OF SAVINGS. I WISH I, BUT IT SEEMS THAT, IT SEEMS THAT THE WAY THAT'S WRITTEN IN THERE NOW, THERE'S NOT A DEFINITION OF SAVINGS. LET'S SEE, I'M SORRY, I CAN'T TELL YOU AS WORD WHERE IT'S, IT'S SEEMS LIKE IT WAS A SIX POINT SOMETHING HERE. LEMME TURN THE LIGHT. I THINK I RECALL WHAT YOU WAS THAT ABOUT CONTINGENCIES? THAT WAS ABOUT THE CONTINGENCIES. SO I THINK THE REASON THAT WAS DELETED THE WAY IT WAS IS BECAUSE IT WAS WRITTEN TO BASICALLY DEAL WITH THE CONTINGENT. IT WAS, IT WASN'T, IT WAS VAGUE. YEAH. WHEN WE READ IT, WE WERE LIKE, OKAY, WHAT EXACTLY DOES THAT THAT MEAN? SO THE WAY IT WAS REWRITTEN IS BASICALLY TO STATE THAT CONTINGENCIES IS THE LINE ITEM OF SAVINGS AND IF IT IS NOT USED, IT IS SPLIT BETWEEN THE TWO PARTIES. WASN'T CLEAR HOW THE CONTINGENCY SAVINGS WOULD BE HANDLED. SO WE WANTED IT TO BE CLEAR. OKAY. OKAY. IF THAT'S DE WE'RE TALKING ABOUT. YEAH, I BELIEVE IS THAT DETACHMENT, WE GOT THIS RIGHT HERE. IT SAYS IT DELETES THE ARTICLE CALLED SAVINGS AND IT REPLACES IT WITH ALLOWED ITEMS AND ALLOWED VALUES. WE CAN REALLOCATE OVERRUNS FROM ONE ALLOWANCE ITEM TO ANOTHER AND THINK ANOTHER. WE DIDN'T, UH, DEFINE ALL THE ALLOWANCES AND NOW WE'VE DEFINED WHAT ALLOWANCES ARE INCLUDED. YEAH. AND IT FEE. BUT SO IF, IF THE REASON IT WAS DELETED, I THINK BECAUSE THERE'S, THERE'S TWO WAYS THAT YOU WOULD GET SAVINGS ON THIS PROJECT. ONE IS THE CONTINGENCIES WOULDN'T BE USED OR A A ANOTHER FOR INSTANCE IS THEY GET OUT THERE AND THEN THEY DETERMINE THEY'RE NOT GOING TO BUILD THIS, YOU KNOW, FOR WHATEVER REASON THAT WOULD BE, IF THAT HAPPENED, THAT WOULD BE A DEDUCTIVE CHANGE ORDER. THAT WOULDN'T BE A LINE ITEM STATEMENT. SO IT REALLY WASN'T AN INSTANT OTHER THAN THE CONTINGENCY WE SAW THAT YOU WOULD ACTUALLY USE THAT LINE ITEM SAVINGS. AND BECAUSE IT WASN'T DEFINED OR CLEARED, KEEPING IT IN THERE, WE FELT CAUSED SOME CONFUSION. SO NOW IT'S, YOU'RE EITHER SAVING ON THE CONTINGENCIES OR YOU WOULD DO A DEDUCTIVE CHANGE ORDER THE WAY IT IS NOW THAT IN A PERFECT WORLD, IF THERE WAS NO CONTINGENCY THAT FOR WHATEVER REASON THAT LINE WOULDN'T USED AT ALL MM-HMM . THAT WOULD BE SPLIT BETWEEN US AND BUILDER. YES. UM, CAN YOU SEE THIS OR DO YOU WANNA TURN THE LIGHTS OFF? WE HAVE IT RIGHT HERE. OKAY. OKAY. SO THE NEXT THING I WANTED TO JUST GO OVER IS, UM, THIS IS THE GMP. SO THIS FITS WITHIN YOUR PROJECT BUDGET. UM, I'M SORRY, COULD YOU GO TO THE NEXT SLIDE? YEAH, YEAH. OKAY, GREAT. UM, SO THERE'S A FEW OTHER ITEMS, UH, TO DO WITH THIS PROJECT AND I WANTED MAKE SURE Y'ALL HAD A WHOLE PICTURE, YOU KNOW, OF IT. SO THE GMP WE'VE JUST TALKED ABOUT, THERE WILL BE MATERIAL TESTING THAT IS THE OWNER'S, YOU KNOW, RESPONSIBILITY. RIGHT NOW IT'S JUST ESTIMATED AT 1%, SO IT'S AROUND 600,000. UM, THE PULSE BED CLARIFIER, Y'ALL, THIS IS, UM, NEEDED FOR THE PROJECT. TYPICALLY YOU WOULD HAVE THEM BUY THIS, YOU WOULD BID, BUT THIS IS, YOU'RE REPEATING EXACTLY WHAT'S OUT THERE AND SO YOU'RE SOLE SOURCING THIS PIECE. SO THERE IS REALLY NO REASON TO BID IT BECAUSE YOU'RE GOING TO GET ONE COST AND IF YOU HAVE THEM BUY IT, YOU HAVE TO BUY, PAY A MARKUP ON IT. WHEREAS IF Y'ALL BUY THIS PIECE OF EQUIPMENT DIRECTLY, YOU DO NOT HAVE TO PAY A MARKUP ON IT. SO HAVING Y'ALL BUY THAT DIRECTLY IS GONNA SAVE Y'ALL AROUND $200,000. SO THAT IS OUR RECOMMENDATION, YOU KNOW, TO Y'ALL. UM, WE ALSO HAVE A RECOMMENDED OWNER CONTINGENCY ON HERE. UM, THIS IS BASICALLY JUST SAYING PLEASE DON'T SPEND ALL THE MONEY YOU HAVE AND HAVE SOME ALLOCATE, YOU KNOW, MONEY AVAILABLE IN CASE THERE IS LIKE A FORCE MEASURE OR SOMETHING OUT THERE THAT Y'ALL WOULD HAVE TO PAY A CHANGE ORDER ON, UM, FISCAL SERVICES. THAT'S WHICH Y'ALL PAID FOR YOUR BOND, WHICH HAVE ALREADY PAID FOR. AND THEN OWNER'S ADVISORS WITH CONSTRUCTION MANAGEMENT AND INSPECTION, WHICH AGAIN, Y'ALL HAVE ALREADY APPROVED. [00:20:01] SO THAT PUTS THE TOTAL PROJECT BUDGET AT AROUND 78.7. AND JUST A REMINDER, WE ISSUED, UH, DEBT FOR $10 MILLION INITIALLY AND THEN THE TEXAS WATER DEVELOPMENT BOARD LOAN IS FOR 69 MILLION. SO THIS FITS WITHIN THE EXISTING BUDGET OF THE DEBT WE ISSUED PREVIOUSLY AND THE WATER DEVELOPMENT BOARD OF ALL BY ACQUIRING THAT, UH, UH, MOST BID BOTH THE CLARIFIER DIRECTLY. UM, IS THERE ANY, ANY, UH, CHANGE IN WARRANTY OR, YOU KNOW, IS NO, WE'RE GOING TO BASICALLY WORK, WE'VE ALREADY WORKED WITH THEM SO THAT WHEN Y'ALL SIGN THE AGREEMENT FOR IT, IT HAS THE SAME TYPE OF LANGUAGE IN THERE. SO IT'LL BE THE SAME WARRANTY AND THEY'LL BE INSTALLING IT. SO IT'LL BE, IT'LL BE COVERED. SO WE, WE, WE ASK ALL THOSE SAME QUESTIONS TOO. OKAY. SO THIS IS FRANK'S SLIDE. I I HAVE ONE. SO IT'S PROPRIETARY, THEREFORE THERE'S ONLY ONE SUPPLIER, IS THAT CORRECT? THAT CORRECT, YES. AND THAT IS WHAT YOU HAVE ON THE, THE ORIGINAL PLANT WAS DESIGNED. SO THAT'S IN, IT'S IN LINE WITH WHAT WE ALREADY HAVE. YEAH, IT'S SEPARATE THING. EXACTLY. AND YOUR OPERATORS REALLY LIKE IT. AND THAT IS IMPORTANT. THAT IS IMPORTANT BECAUSE THERE WAS ANOTHER PIECE OF EQUIPMENT Y'ALL HAD OUT THERE WE CHOSE NOT TO REPLACE. EXACTLY. WE'VE TALKED ABOUT THAT ONE BEFORE BECAUSE YOUR OPERATORS DO NOT LIKE IT. IT DOES, IT WORKS FINE, BUT IT'S VERY DIFFICULT TO OPERATE. IT'S VERY DIFFICULT TO MAINTAIN. SO WE'RE, WE'RE DOING SOMETHING YOU SAID THERE WERE GONNA BE SOME TWEAKS THAT MM-HMM . TO MAKE IMPROVEMENTS, CORRECT? YES. ANY OTHER QUESTIONS ON THIS? OKAY, SO THIS FRANK ASKED ME TO PUT TOGETHER, UM, THIS SLIDE. UM, I THINK ANTICIPATING FRANK'S QUESTION KIND OF COMPARING THE ORIGINAL COST AND SCHEDULE TO WHAT WE'RE ASKING Y'ALL TO APPROVE TONIGHT. SO IF YOU LOOK AT THE ORIGINAL PLANT CONSTRUCTION, IT HAD A DESIGN START DATE OF 2014 WITH AN ORIGINAL BUDGET OF ROUGHLY 30 MILLION. UM, THAT INCLUDES THE DESIGN COSTS AND MATERIAL TESTING AND THE CONSTRUCTION COST. IT DOESN'T INCLUDE LAND. UM, AND I DON'T THINK IT INCLUDES INSPECTION AND STUFF IN THERE EITHER. I THOUGHT ABOUT THAT THAT LATER. BUT, UM, IN ITALICS THAT IS TAKING THAT NUMBER AND PUTTING IT IN TODAY'S DOLLARS. SO WITH ALL THE ESCALATION FROM THEN PUTTING IT IN TODAY'S DOLLARS SO WE CAN COMPARE IT. IT WAS JUST A FEW YEARS AGO, WASN'T IT? WELL, IT STARTED IN 2014 AND IT ENDED IN 2021. AND THAT, THAT IS IMPORTANT BECAUSE I ACTUALLY, WHEN I SAW THE NUMBER COMPARISONS TO THOSE TO THE DAYS COST, I WAS LIKE, NO. BUT THAT IS WHEN YOU HAD VERY HIGH ESCALATION COSTS IN 20 19, 20 AND 21. LIKE I THINK ONE OF 'EM WAS AROUND 12% ESCALATION ON THAT THAT YEAR. SO THAT, THAT DOES ANSWER PART OF YOUR QUESTION AS TO WHY IT WAS A COST I THINK ARE TODAY VERSUS WHAT THEY ARE. THEN SOME OF THAT IS THOSE ESCALATION NUMBERS OUT THERE AND I THINK THIS KIND OF REFLECTS THAT. SO YOU DESIGNED IT IN 2014, YOU BID IT IN 2017 AND BASICALLY THE PRICE DOUBLED AND I JUST REALIZED MY FIGURE GOT CUT OFF, BUT, AND THEN WHEN THE PRICE DOUBLED, YOU VALUED ENGINEERED IT, GOT IT DOWN TO 51 MILLION AND THEN STILL ENDED UP AROUND 50. THIS IS WITH DESIGN AND EVERYTHING IN THERE TOO. YEAH. SO YOU ENDED UP AT AROUND 55 MILLION, WHICH IN TODAY'S DOLLARS WOULD BE ABOUT 78 MILLION. SO, AND THAT TOOK YOU ROUGHLY SEVEN YEARS. WHILE I WASN'T A PART OF IT, MY UNDERSTANDING, UM, IT WAS A VERY DIFFICULT AND VERY CONTENTIOUS SEVEN YEARS ESSENTIALLY. YEAH. EVERY TIME WE CAME IN IT WAS, YES. UH, THE WHOLE PROCESS WAS, UH, I WOULD SAY ADVERSARIAL BETWEEN THE OWNER, THE DESIGNER AND THE CONTRACTOR. AND THERE WAS A LOT OF AMENDMENTS TO THE DESIGN THERE. CHANGE ORDERS, YOU KNOW, WE, WE GOT A BID AT 52 MILLION WE VALUE ENGINEERED, WHICH WAS CUTTING OUT A LOT OF NECESSARY THINGS, VALUE, ENGINEERED IT DOWN TO, UH, 46 AND THEN WE HAD ABOUT THREE AND A HALF MILLION DOLLARS IN CHANGE ORDERS. WE ENDED UP AT LIKE 49.5. SO NOW WE'RE JUST TAKING OUR LUMPS AT THE BEGINNING PRETTY MUCH. SO, YES, UH, I MEAN I WOULDN'T SAY WE'RE TAKING OUR LUMP AND, AND LINDSAY'S GONNA TALK ABOUT HOW THIS COMPARES TO OTHER PRODUCT, OTHER PROJECTS BEING CONSTRUCTED TODAY. UH, WHAT'S THE COST PER [00:25:01] MGD AND I THINK WE COMPARE FAVORABLY. WE DO, YEAH. SO THE NATIONAL AVERAGE FOR THESE IS, YOU KNOW, ROUGHLY EIGHT TO $13 PER, UM, 13 MILLION. SORRY, YEAH, I SAID THAT WRONG. 13. EIGHT TO 13 MILLION PER MILLION GALLONS. Y'ALL AT AROUND 11.7. YOU KNOW, THERE. SO YOU'RE RIGHT IN LINE. THERE ARE SOME THINGS THAT MAKE THIS A LITTLE MORE COMPLICATED, WHICH IS WHY IT'S A LITTLE ON THAT HIGHER SIDE. THE BIGGEST IS, IS THAT YOU ARE CONSTRUCTING IN AN OPERATING PLANT AND NOT ONLY ARE YOU CONSTRUCTING IN AN OPERATING PLANT, YOU ARE CONSTRUCTING RIGHT NEXT TO AN OPERATING PLANT. SO THEY HAVE TO BE VERY CAREFUL. THEY'RE GOING TO HAVE TO HAVE MORE PEOPLE OR INSPECTORS TO MAKE SURE THEY IN NO WAY DISRUPT YOUR CURRENT OPERATIONS. UM, AND, AND, AND IT HAS TO REMAIN IN OPERATION DURING CONSTRUCTION. SO WHILE THEY'RE TYING IN TO DIFFERENT, YOU KNOW, UM, PARTS OF THE PROCESS, WE HAVE TO KEEP OPERATING PLAN THAT DOES ADD COMPLICATIONS TO, I I THINK MY FRUSTRATION WITH THE FIRST PROJECT THE MOST WAS WE SELECTED AN ENGINEERING FIRM WITH A MILE LONG RESUME OF SUCCESSFUL PROJECTS AND IT WAS ALMOST LIKE THEY'D NEVER BUILT A PLANT. IT WAS, IT WAS TERRIBLE THE WAY, FROM MY PERSPECTIVE, THEY TALK MORE OFFLINE OVER A BEER. YES. SO I'M, THIS IS NOT, I'M NOT SPEAKING TO YOU AND THIS, I'M NOT SPEAKING TO YOU AT THIS, FRANK, I'M, I'M SPEAKING TO THESE GUYS THAT I'M HOPING YOU GUYS COME IN AND, AND NAIL THIS THING THE FIRST TIME AND HAVE THE EXPERTISE. I HAVE MUCH MORE CONFIDENCE IN THIS TEAM THAN ANY OTHER TEAM WE COULD HAVE SWAY. AND I'LL SAY THAT I THINK THAT'S ALSO A LITTLE REFLECT. THE SECOND ONE IS JUST KIND OF HOW WE'VE BEEN ON THIS PROJECT TO DATE. SO Y'ALL GAVE NOTICE TO PROCEED TO THIS TEAM SEPTEMBER OF 2024. UM, OUR CURRENT SCHEDULE IS TO END JULY, 2028. SO FOR THE SAME MGD YOU'RE GOING TO DO IT IN THREE YEARS LESS THAN WHAT YOU DID THE LAST GO ROUND. THEY PROVIDED A BASELINE COST WITH ALL THE OTHER FEES LIKE WE HAD UP TO A PROJECT THAT EQUALED ABOUT 78.8 AND WE ENDED UP RIGHT NOW AT ABOUT 78.7. SO WE ARE FROM THE BEGINNING, WE HAVE MAINTAINED THAT COST WASN'T A BIG, WASN'T A BIG PART OF THAT. JUST ALL THE, THE, UH, PERMITS AND EVERYTHING THAT WE'RE CONSTANTLY HAVING TO GET IN THE FIRST PROJECT. AND THOSE ARE ALREADY OBTAINED AT THIS POINT. WE HAD, UH, WE HAD A WETLANDS ISSUE. WE THOUGHT WE HAD A WETLANDS ISSUE AND WE DIDN'T, UH, WE BOUGHT CREDITS THAT WE DIDN'T NEED. UH, THAT WAS A WHOLE LONG LIST. MM-HMM . OF, YOU KNOW, I, IF YOU GO BACK AND LOOK AT THE ORIGINAL PRESENTATION OF THE ENGINEER, THEY SAID THEY COULD DELIVER THE FINISHED PRODUCT WITHIN THREE YEARS, INCLUDING DESIGN. MM-HMM . SO THAT DIDN'T HAPPEN. AND HERE, YOU KNOW, I WOULD SAY THEY'VE DELIVERED ON EVERYTHING. UM, YOU KNOW, WE DIDN'T TALK ABOUT REALLY THE TIME, BUT WE GAVE THEM A DEADLINE BECAUSE WE'RE GONNA BE OUT OF CONTRACT WATER CAPACITY IN 2028. SO THAT WAS OUR MARK ON THE WALL TO MEET THAT. UM, THEY GAVE US A PRICE OF 78.8 ORIGINALLY AND YOU KNOW, THEY TOLD US THEY'RE PRETTY GOOD AT ESTIMATING THESE THINGS AND I THINK THEY ARE. SO IT'S ALL I NEED BACK THERE. YEAH, THEY, THEY, THEY'VE DONE EVERYTHING THEY SAID THEY WERE GONNA DO. I WILL HELP. ALRIGHT. I, THEY WILL FOLLOW THROUGH IF YOU WANNA TALK SCHEDULE THOUGH A LITTLE BIT. SO THEY HAVE PROMISED EVERYTHING, THE ONE THING THAT IS STILL POTENTIALLY GONNA AFFECT YOUR SCHEDULE IS APPROVALS RIGHT NOW, UM, LUCKILY I HAD ON HERE, YOU STILL NEED A TCQ APPROVAL. WE GOT THAT YESTERDAY ACTUALLY. SO I COULD COME IN HERE WITH GOOD NEWS AND SAY THAT HAPPENED. OR MAYBE IT WAS MONDAY. IT, IT HAPPENED THIS WEEK. UM, WHAT Y'ALL STILL NEED IS TEXAS WATER DEVELOPMENT BOARD APPROVAL. SO THAT IS WHERE YOU'RE GETTING YOUR MONEY, YOU HAVE YOUR MONEY, UH, YOU WERE ASKING THIS EARLIER. UM, BUT YOU HAVE TO GET A SERIES OF APPROVALS FOR THEM TO BE ABLE TO USE THAT MONEY AND THAT IS WHAT WE ARE WORKING THROUGH RIGHT NOW. UM, THE BIGGEST THING THAT'S HOLDING IT UP IS THE ENVIRONMENTAL REVIEW. UM, IT WAS SUBMITTED BACK IN JULY AND WE DON'T HAVE THAT YET. AND THAT IS, THEY JUST DON'T HAVE STAFF TO DO THESE THINGS VERY QUICKLY. SO WE GOT SOME QUESTIONS FROM THEM, UM, A FEW WEEK, LIKE ABOUT A MONTH AGO. WE ANSWERED IT WITHIN THE WEEK AND WE'RE LIKE, PLEASE APPROVE THIS. THE ONE THING THEY WANTED US TO DO, WE'RE STILL WAITING ON IS TRY NOT TO GET INTO THE WEEDS TOO MUCH, BUT BASICALLY WE SAID Y'ALL HAVE A CATEGORY EXCLUSION ON THIS PLANT BECAUSE IT IS AN [00:30:01] ISOLATED, IT'S AN ISOLATED PLANT Y'ALL HAVE ALREADY DEVELOPED ON IT. UM, YOU DON'T HAVE TO DO LIKE EVERYTHING ENVIRONMENTALLY THAT YOU SHOULD HAVE TO DO. AND THE TWBX IS THE ONE THAT TOLD US THAT THAT'S WHAT WE SHOULD APPLY FOR THAT, THAT IT FIT. SO WE PUT IN ALL THE FORMS THAT MATCHED IT AND ONE OF THE THINGS WE STATED IS YOU DO NOT NEED A CORE PERMIT. OUR EXPERT SIGNED OFF ON THAT. BASICALLY THEY CAME BACK AND SAID, WE NEED YOU TO HAVE THE CORE CONFIRM THAT FOR Y'ALL. THAT IS THE ONLY THING WE ARE WAITING ON RIGHT NOW. AND THE CORE IS WORKING WITH US. I THINK WE'RE GOING TO GET THAT SOON, BUT THE SHUTDOWN SLOWED THEM DOWN LAST MONTH BECAUSE THEY, THEY'RE FEDERAL SO THEY WERE NOT AROUND. SO THE ONLY THING THAT WE ARE CONCERNED RIGHT NOW WITH POTENTIALLY, UM, INTERRUPTING THE SCHEDULE IS THAT APPROVAL. BUT WE DON'T NEED THAT FOR TODAY. WE NEED THAT FOR THEM TO START CONSTRUCTION. SO THERE IS STILL TIME, YOU KNOW, TO GET THAT. IN FACT, PREFERABLY I'D HAVE IT ALL BEFORE NOTICE TO PROCEED. I THINK THERE'S SOME THINGS WE COULD DO IF WE DON'T, THEY COULD, THEY COULD DO SUBMITTALS, YOU KNOW, THEY COULD DO THINGS, THEY JUST CAN'T TOUCH THE GROUND ESSENTIALLY. THEY CAN'T DO ANY CONSTRUCTION PRIOR TO THOSE APPROVALS. SO I WILL KEEP THAT IN MY REPORT TO Y'ALL ON HOW THAT'S, THAT'S GOING. BUT UM, IT IS DISAPPOINTING. WE DON'T HAVE IT HERE GIVEN WE SUBMITTED IT SO LONG AGO, YOU KNOW, TO THEM I'M STILL HOPEFUL. I'M JUST, I JUST WANNA BE OPEN AND HONEST ABOUT THE POTENTIALS, YOU KNOW, HERE AND THEY WON'T APPROVE ANYTHING ELSE UNTIL THEY HAVE THAT ENVIRONMENTAL APPROVAL. TWB YOU THINK TRUMP WOULD GET RID OF ALL THAT ENVIRONMENTAL STUFF? , I THINK OUR GOVERNOR WOULD TOO, BUT IT HASN'T HAPPENED YET. SO WE WE'VE SPENT $382,000 TO GET THIS MONEY THAT WE CAN'T SPEND. YES, BUT YOU WOULD'VE PAID MORE IF YOU WOULD'VE GONE TO OPEN MARKET. YOU DARE. WELL THEY LOWERED INTEREST RATES AGAIN TODAY. SO DID THEY? YES, THEY DID. ONLY A QUARTER POINT, BUT, UM, I THINK THAT WAS MY LAST SLIDE. SORRY. YES. UM, ARE THERE ANY OTHER QUESTIONS Y'ALL HAVE ON THE PROJECT? I'LL GET IT TO YOU. ALRIGHT. DO I HAVE A MOTION TO APPROVE THE RESOLUTION? DID YOU HAVE A QUESTION FIRST? WELL, I DUNNO WHETHER THE QUESTION COMES BEFORE OR AFTER THE MOTION. I'M GONNA ASK THE QUESTION BEFORE. SO IF WE DON'T DO THIS RESOLUTION, WHERE WOULD WE BE? WELL, THERE'S TWO PATHS. SO IF YOU DIDN'T APPROVE IT TODAY, BUT YOU STILL WANTED TO EVENTUALLY APPROVE THEM, UM, WHAT YOU'RE RISKING BY NOT APPROVING IT TODAY IS THE BIDS THEY RECEIVE TO PUT THIS TOGETHER HAVE A SHELF LIFE. SO THEY'RE ONLY GOOD FOR 120 DAYS. SO IF YOU DON'T APPROVE IT TODAY AND COUNCIL DOESN'T APPROVE IT TOMORROW, THEY, YOU MAY RUN OUTTA SHELF LIFE. WE SORT OF, WE JUST SORT OF START ALL OVER AGAIN. THEY MAY END UP HAVING TO RAISE THEIR COSTS BECAUSE THEY HAVE TO GO BACK AND GET BIDS IF YOU COMPLETELY OFF RAMP THEM. UM, RIGHT NOW WHAT YOU WOULD DO IS YOU WOULD PAY THEM TO FINISH THE DESIGN TO GET IT TO A HUNDRED PERCENT AND THEN YOU WOULD GO PUBLICLY BID IT. SO YOU'RE, YOU'RE PROBABLY THREE TO SIX MONTHS OUT THEN TO ACTUALLY THEN GO GET THE BIDS AND WHAT YOU RISK IS IT BEING A HIGHER COST AT THAT TIME AND YOU CAN'T PUT QUALIFICATIONS INTO THAT. SO YOU ALSO RISK GETTING, UM, A NOT AS QUALIFIED CONTRACTOR, WHICH WILL COST YOU MORE MONEY AS WELL. BUT IF WE APPROVE EVERYTHING AND THE CITY COUNCIL APPROVES IT AND YOU CAN'T GET THE COURT TO SIGN OFF ON IT, WE'RE STILL AT RISK OF THE 120 DAYS FOR THESE BIDS. YOU ARE THAT CORRECT? YES, YES YOU ARE. BUT IT, LIKE I SAID, I THINK THAT'S LESS OF A RISK AT THE MOMENT BECAUSE WE'VE HEARD FROM THE COURT THEY UNDERSTAND WE HAVE A DEADLINE. I THINK THEY'RE GONNA WORK WITH US TO GET IT FIRST AND SECOND. I DO THINK THERE ARE THINGS BECAUSE WE'VE BEEN WORKING TOGETHER WE COULD WORK WITH TO ALLOW THEM TO, TO DO SOMETHING, YOU KNOW, WHILE WE'RE WAITING. I THINK WE COULD WORK THROUGH THAT COULD, BUT THERE, THERE IS A RISK. YES, BUT IT'S SURE THEY CAN PROCURE. I'LL MAKE THE MOTION TO APPROVE. ALL RIGHT. I HAVE A MOTION TO APPROVE. I SECOND IT. ALRIGHT, NOW QUESTIONS? DISCUSSION ABOUT APPROVING THE RESOLUTION. I THINK I HAVE ANY. I'M DONE. OKAY. ALL THOSE IN FAVOR SAY AYE. AYE. OPPOSED? LIKE SIGN. MOTION CARRIES UNANIMOUSLY. THANK YOU. UM, NEXT WE WILL CONSIDER A RESOLUTION AUTHORIZING THE FIRST AMENDMENT TO THE TREATED WATER SUPPLY CONTRACT WITH CEDAR WHITE PARK UTILITY DISTRICT. GOOD EVENING. ALL. UM, I STATED THE ITEM BEFORE YOU IS FOR, [00:35:01] UH, MEETING THE CURRENT, UH, WATER SUPPLY AGREEMENT WITH CEDAR BIO PARK UTILITY DISTRICT. UM, THIS IS A SIMPLE ACTION ITEM. ESSENTIALLY THEIR CONTRACT EXPIRES DECEMBER 31ST OF THIS YEAR. UM, THE PROPOSED, UH, AMENDMENT WILL EXTEND THAT CONTRACT OUT TO, TO MATCH THE BOND. I MEAN, UH, THE, UH, FUNDING WHICH WOULD GO THROUGH DECEMBER 31ST, 2055. UM, THERE IS NO OTHER ACTION, UH, IN RELATION TO THIS RESOLUTION. UM, WITH THAT BEING SAID, STAFF, UH, DOES RECOMMEND APPROVAL. UM, AND I DO HAVE, UH, ADDITIONAL TIDBIT JUST, UH, FYI ON THIS DISTRICT. THEY WERE ACQUIRED, UM, MORE LIKE IN THE LAST YEAR OR SO BY, UH, ANOTHER COMPANY. UM, AND THEY HAVE EXPRESSED THEIR DESIRE TO REQUEST ADDITIONAL, UH, WATER CAPACITY, BUT WE TOLD THEM THAT THEY NEED TO PROVIDE US ADDITIONAL DATA PRIOR TO THAT REQUEST. UM, AND WE DON'T KNOW WHAT, WHAT THAT IS AND IF THAT REQUEST WILL COME, BUT I'M JUST GIVING YOU A HEADS UP IN THE EVENT THAT SOMETHING COMES IN THE FUTURE IN, IN RELATION TO THAT. UM, BUT IT'S A SMALL DISTRICT. IT'S, UH, SMALL UTILITY DISTRICT LOCATED RIGHT ACROSS FROM STAR WARS STADIUM, SO IT'S NOT VERY BIG. I CAN'T IMAGINE IT. IF THEY WERE TO REQUEST IT TO BE LARGE, WHAT KIND OF AN ENTITY ACQUIRED THEM? UH, THE NAME OF THE COMPANY IS CALLED TEXAS WATER UTILITIES. UM, AND THEY OWN MULTIPLE WATER SYSTEMS, UM, OR UTILITY SYSTEMS PRIVATE COMPANY? I BELIEVE SO, YEAH. HMM. YEAH, BECAUSE THIS IS A UTILITY DISTRICT AS OPPOSED TO A MUNICIPAL UTILITY DISTRICT. UM, I'VE FORGOTTEN NOW. DID I HAVE A MOTION AND A SECOND? WE DO NOT. I HAVE A MOTION. OKAY. DO I HAVE A MOTION? I'LL MAKE THE MOTION SECOND. I'LL SECOND IT. UM, QUESTIONS DISCUSSION. UH, THIS IS, THIS IS A CONTRACT FOR 50,000 GALLONS A DAY, AS I RECALL FROM THE YES. INFORMATION. YEAH. AND THERE'S NO CHANGE ON A, ON A MONTHLY BASIS. THERE'S, UH, NO CHANGE TO THAT. CORRECT. AND, UH, THE ORIGINAL CONTRACT HAS ESCALATION, PRICE ESCALATION SUCH IF WE NEEDED FOR THE AMOUNT OF WATER WE SUPPLYING THEM AND THAT SORT OF THING. UM, THEY, THEY WOULD BE SUBJECT TO THE RATES, UH, WHAT, WHAT THE CURRENT RATES ARE. OKAY. SO, YOU KNOW, AS YOU APPROVE RATES, THEY WOULD BE SUBJECT TO THOSE RATES. UH, AND WE DON'T KNOW IF THIS NEW ENTITY'S GONNA FOR SURE WANT MORE WATER OR NOT, BUT THAT WOULD BE A WHOLE NOTHER NEGOTIATED DEAL. YEAH. CORRECT. THEY, THEY ESSENTIALLY APPROACHED US AND SAID THAT THEY ARE INTERESTED AND SAID, WELL, YOU NEED TO PROVIDE US SOME ADDITIONAL INFORMATION. AND SO THEY'RE IN THE PROCESS OF DOING THEIR DUE DILIGENCE TO BE ABLE TO PROVIDE THAT INFORMATION TO SEE IF IT'S A, IT'S A REQUEST THAT WE CAN ACCOMMODATE AND ARE WILLING TO ACCOMMODATE. UM, SO WITH THAT BEING SAID, I DON'T KNOW IF IT WILL COME FORWARD OR NOT. I JUST WANTED TO JUST, YOU KNOW, PREPARE YOU IN THE EVENT THAT THEY COME BACK WITH SOMETHING IN THE NEXT COUPLE MONTHS AND YOU JUST SAY, WE JUST APPROVED SOMETHING FOR, THEN YOU'LL HAVE THE BACKGROUND TO UNDERSTAND OF WHERE, WHERE WE ARE. YEP. AND WE SUPPLY THEM FROM THE PLAN AUTOPSY ROAD, RIGHT? CORRECT. MR. MC, I'M SORRY, CAN I JUST GET CLARIFICATION MR. MCKAY ON WHAT YOUR MOTION WAS? JUST FOR PURPOSES OF THE RECORD, YOU JUST SAID I MAKE A MOTION. IS THIS A MOTION TO APPROVE THE ITEM APPROVE? YEAH. CAN YOU, FOR PURPOSE OF THE RECORD, CAN YOU JUST STATE IT FULLY? YOU MAKE A MOTION TO APPROVE? I MAKE THE MOTION TO APPROVE. THANK YOU. THAT'S ALL I NEED. AND I, I'LL SECOND THAT AGAIN IF I NEED TO. ALL RIGHT, THANK YOU. ALL RIGHT. DOES ANYONE ELSE HAVE A QUESTION? ALRIGHT, HEARING NONE. ALL THOSE IN FAVOR SAY AYE. A AYE. OPPOSED? LIKE, SIGN MOTION CARRIES UNANIMOUSLY. UH, NEXT WE'LL RECEIVE A REPORT ON THE AUTHORITIES EAST EXPANSION PROJECT, BUT PERHAPS WE'VE ALREADY RECEIVED THAT. I DON'T HAVE ANYTHING ELSE. THANK YOU. UM, THAT BRINGS US TO THE MANAGER'S REPORT. YES, MA'AM. THE, UH, NEXT SCHEDULED MEETING IS FOR WEDNESDAY, JANUARY 21ST AT, UH, 5:00 PM IN, UH, COUNCIL CHAMBERS. AND, UH, HOPEFULLY BY THEN WE'LL HAVE INFORMATION ABOUT THE, UH, NOTICE TO PROCEED ON THE COURT PERMIT AND HOPING THAT ALL THESE THINGS WILL BE WORKED OUT AND WILL BE OUR INSTRUCTION. UM, AS THERE'S NO FURTHER BUSINESS, I WOULD ENTERTAIN A MOTION TO, I'LL MAKE MOTION TO ADJOURN ISA JOINT BEING HERE AND, UH, I'LL SECOND IT. ALRIGHT, WE'LL SEE YOU ALL IN ALL IN FAVOR. AYE. AYE. UM, WE'LL SEE YOU ALL IN JANUARY. * 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.