[00:00:01]
HAVE VICE CHAIR MARIO CASTILLO, COUNCIL[Budget and Fiscal Affairs on March 3, 2026.]
MEMBER TWILA CARTER, STAFF FROM COUNCIL MEMBER ED POLLARD'S, OFFICE.COUNCIL MEMBER JOAQUIN MARTINEZ, VICE MAYOR, PRO TEM.
AMY PECK, STAFF FROM THE MAYOR PRO TE'S OFFICE.
COUNCIL MEMBER JULIAN RAMIREZ.
STAFF FROM COUNCIL MEMBER M ANN HUFFMAN'S, OFFICE AND STAFF FROM COUNCIL MEMBER ABBY, ABBY CAYMAN'S OFFICE.
ONCE AGAIN, WE HAVE A FULL AGENDA AND WE'RE GONNA GET RIGHT, STARTED WITH, UH, STARTED RIGHT WITH THE, WITH THE MONTHLY FINANCIAL REPORT.
ALRIGHT, UH, GOOD MORNING, MADAM CHAIR AND MEMBERS OF THE COMMITTEE.
THANK YOU FOR THE OPPORTUNITY TO PROVIDE THE FINANCIAL UPDATE FOR THE PERIOD ENDING JANUARY 31ST, 2026.
FOR THE FUND BALANCE, WE'RE PROJECTING AN ENDING FUND BALANCE OF ABOUT 336 MILLION FOR FFY 2026 OR ROUGHLY 13% OF EXPENDITURES LIST DEBT AND PAYGO, THAT'S ABOUT 17.5 MILLION LOWER THAN THE FINANCES ESTIMATES, MAINLY DUE TO A MORE CONSERVATIVE REVENUE PROJECTION FROM THE CONTROLLER'S OFFICE.
WE REMAIN ABOVE THE CITY'S RESERVE TARGET WITH ABOUT 145 MILLION ABOVE 7.5% OF TOTAL EXPENDITURES, EXCLUDING DEBT SERVICE AND PEGO.
WITH THAT CONTEXT, REVENUES AND EXPENDITURES REMAIN UNCHANGED THIS MONTH.
SO I MOVE ON TO THE ENTERPRISE FUNDS WITH AVIATION.
NON-OPERATING REVENUES INCREASED BY 20.2 MILLION DUE TO LAND SALES.
AS A RESULT, OPERATING TRANSFERS TO THE AIRPORT IMPROVEMENT FUND INCREASED BY THE SAME AMOUNT WE'RE PROJECTING NO CHANGES FROM THE PREVIOUS MONTH'S REPORT IN THE OTHER ENTERPRISE FUNDS TO MOVING ON TO COMMERCIAL, UH, PAPER AND BONDS.
THE CITY'S PRACTICE HAS BEEN TO MAINTAIN NO MORE THAN 20% OF THE TOTAL OUTSTANDING DEBT FOR EACH TYPE OF DEBT AND A VARIABLE RATE STRUCTURE, WHICH IS IN LINE WITH THE RATING AGENCY'S GUIDANCE OF 25% FROM TIME TO TIME.
THE CITY'S ENTERPRISE CREDITS HAVE EXCEEDED THIS THRESHOLD ON AN INTERIM BASIS AS THEY HAVE UNDERTAKEN LARGE CAPITAL IMPROVEMENT PROJECTS OR MAJOR EXPANSIONS.
THIS IS SEVEN PARTS FIVE FINANCIAL REPORT FOR THE PERIOD ENDING JANUARY 31ST, 2026.
PROJECTIONS ARE BASED ON SEVEN MONTHS OF ACTUAL RESULTS AND FIVE MONTHS OF PROJECTIONS FOR GENERAL FUND.
OUR REVENUE RENEWAL PROJECTION IS 41.9 MILLION LOWER THAN THE ADOPTED BUDGET AND REMAIN UNCHANGED FROM PARLIAMENT.
FOR THE SALES TAX RECEIPT FOR THE DECEMBER WERE 88.1 MILLION.
SO IN ORDER TO MEET THE CURRENT ESTIMATE OF 902.3 MILLION, THE REMAINING PERIOD WOULD NEED TO COME IN 8.68% BELOW PER YEAR.
FOR OUR EXPENDITURE PROJECTION IS 9.5 MILLION HIGHER THAN THE, THE ADOPTED BUDGET AND REMAIN UNCHANGED FROM PRIOR MONTH.
WE ARE CURRENTLY PROJECTING THE ENDING FUND BALANCE OF 353.5 MILLION, WHICH REMAIN UNCHANGED FROM PRIOR MONTH AND 13.9% OF ESTIMATED EXPENDITURE LISTED.
THE FUND BALANCE IS 162.3 MILLION ABOVE THE TARGETED 7.5% OF EXPENDITURE, EXCLUDING DEBT SERVICE AND PAY GOAL.
AND WE AGREE WITH THE CONTROLLER PROJECTION FOR AVIATION, THAT NON-OPERATING EXPENSE INCREASED BY 20.2 MILLION DUE TO HIGHER THAN ANTICIPATED LAND SALE.
AS A RESULT, OPERATING TRANSFER INCREASED BY 20.2 MILLION.
I DON'T SEE ANYONE IN THE QUEUE.
THESE, THIS IS PRETTY MUCH UNCHANGED FROM LAST MONTH, SO I REALLY APPRECIATE YOUR COMMENTS.
WE WILL MOVE ON TO THE, TO THE UPCOMING FINANCIAL TRANSACTION.
VERA ALTRA WHO WILL BE PRESENTING FOR US.
ALSO LIKE TO WELCOME COUNCIL MEMBER ALEJANDRA SALINAS TO THE HORSESHOE.
MY NAME IS VAR TOROS AND I'M HERE TO PRESENT THE UPCOMING FINANCIAL TRANSACTIONS.
UH, ON BEHALF OF THE FINANCING WORKING GROUP, UH, WE ONLY HAVE ONE TRANSACTION THAT'LL BE TALKING ABOUT TODAY.
UH, THIS TRANSACTION PERTAINS TO THE GENERAL OBLIGATION COMMERCIAL PAPER PROGRAM SERIES K ONE NEXT SLIDE PLEASE.
ON SLIDE THREE GIVES YOU A SUMMARY OF THE GEO VARIABLE RATE EXPOSURE THAT THE CITY HAS.
UH, YOU CAN SEE THE VARIOUS COMMERCIAL PAPER, UH, SERIES THAT
[00:05:01]
WE HAVE THAT ARE BACKED BY THE GENERAL OBLIGATION CREDIT AND THE DIFFERENT CREDIT FACILITIES ALLOW US TO IMPLEMENT THE CAPITAL IMPROVEMENT PLAN FOR THE CITY.TODAY WE'LL BE DISCUSSING THE SERIES K ONE, WHICH HAS A CURRENT SIZE OF 200 MILLION, UH, WITH, UH, RBC BANK AND EXPIRES IN 2030.
WE ALSO HAVE THE SERIES K TWO ALSO FOR 200 MILLION WITH THE SAME PROVIDER AND SAME EXPIRATION DATE.
UH, JUST TO GIVE YOU A LITTLE BIT MORE BACKGROUND ON THE SERIES, K ONE AND, AND K TWO, THEY ARE APPROPRIATION ONLY FACILITIES AND SUPPORT THE D-D-S-R-F PROGRAM FOR THE CITY'S DRAINAGE AND STREET INFRASTRUCTURE.
UM, THEY ALLOW US TO ENTER INTO CONTRACTS WITH VARIOUS VENDORS TO IMPLEMENT THE BUILD HOUSTON FORWARD CAPITAL IMPROVEMENT PLAN, SINCE BUILD HOUSTON FORWARD IS A PASS YOU GO PROGRAM.
THEY ONLY USE, UH, THEY'RE ONLY USED TO ESTABLISH APPROPRIATION CAPACITY.
SO WE CONSIDER THE FUNDS AND MOVE CONTRACT FORWARD.
UH, THEN WHEN THE INVOICES COME IN, WE START PAYING, UM, PAYING THEM CASH.
UH, THE PLAN FOR THE DSRF FUNDING IS FIRST WE ARE TO USE IT TO PAY DOWN EXISTING STREET AND DRAINAGE DEBT THAT WAS USED PRIOR TO THE IMPLEMENTATION OF BUILT HOUSTON FORWARD, PREVIOUSLY KNOWN AS REBUILT HOUSTON.
AND AS WE CONTINUE TO PAY DOWN THE DEBT, WE'RE FREEING UP FUNDING FOR MORE PAY AS YOU GO PROJECTS.
ADDITIONALLY, SINCE THE PROOF OF THE JONES SETTLEMENT, THE GENERAL FUND WILL BE TRANSFERRING APPROXIMATELY, ADDITIONALLY A HUNDRED MILLION, UM, ANNUALLY.
SO AS MORE PROJECTS COME ONLINE, WE ANTICIPATE ADDITIONAL APPROPRIATION CAPACITY WILL BE NEEDED.
UM, WE'RE PURSUING THIS TRANSACTION IN ORDER TO APPEAR BEFORE CITY COUNCIL AND REQUEST YOUR APPROVAL.
UM, I LOST MY PLACE, UM, FOR ADDITIONAL, UM, 300 MILLION INCREASE AND EXTENSION.
WE HAVE REACHED OUT TO A CURRENT LIQUIDITY PROVIDER, UM, RBC AND, UM, REQUESTED THE 300 MILLION INCREASE.
THIS WILL BRING THE K ONE TOTAL TO A CAPACITY OF 500 MILLION.
AND WE ALSO HAVE THE K TWO THAT HAS THE 200 MILLION IN CAPACITY, BRINGING THE TOTAL TO 700 MILLION FOR APPROPRIATION, UH, OF THESE PROJECTS.
AGAIN, THE SERIES FOR THIS, UH, THE SERIES FOR APPROPRIATION PURPOSES ONLY, NO, NO DRAWS HAVE BEEN MADE AND WE DON'T ANTICIPATE DRAWING ON THIS LINE.
IN TERMS OF NEXT STEPS, WE'RE PLANNING ON BRINGING THE RCA TO CITY COUNCIL APPROVAL ON MARCH 18.
AND AGAIN, SINCE WE KNOW OUR STREET AND ED IMPROVEMENTS ARE PAY AS YOU GO, THIS IS JUST SIMPLY FOR THE APPROPRIATIONS.
WE JUST USE THESE, THE COMMERCIAL PAPER FOR APPROPRIATIONS PURPOSES, BUT WE PAY CASH AS WE GO.
OUR NEXT ITEM COLLEAGUES, AS OUR NEXT SET OF DISCUSSIONS ON, UM, THE OPEN SPACE ORDINANCE, WHICH WE FIRST INTRODUCED LAST MONTH.
AND WE'LL BE WORKING THIS ISSUE THROUGH COMMITTEE, UM, THE REVISIONS THROUGH COMMITTEE.
I'D LIKE TO WELCOME PLANNING DIRECTOR VON TRAN, PARKS DIRECTOR KENNETH ALLEN, AND SENIOR ASSISTANT CITY ATTORNEY TAMMY KIM TO PRESENT ON NEXT STEPS RELATED TO THE OPEN SPACE ORDINANCE.
AGAIN, COLLEAGUES, THIS IS AN ORDINANCE THAT WAS CRAFTED IN 2007.
THERE WERE SOME BRIEF CHANGES TO, UH, SECTORS IN 2011 OR 12, BUT OTHER THAN THAT, THIS, THIS ORDINANCE HAS, HAS REMAINED UNTOUCHED SINCE THEN.
SO WE ARE LOOKING TO UPDATE AND IMPROVE THIS ORDINANCE.
AND THE FLOOR IS YOURS, WHOEVER WANTS TO BEGIN.
I AM TRAN FROM PLANNING AND DEVELOPMENT.
AS YOU GUYS KNOW, I'M KENNETH ALLEN, DIRECTOR OF THE HOUSTON PARKS AND RECREATION DEPARTMENT.
AND TODAY WE'RE GONNA TALK A LITTLE BIT, A LITTLE BIT ABOUT PARK SECTOR REVENUE DISPARITY, CHAPTER TWO 12 LGC AND CHAPTER, UH, 42 CODE OF ORDINANCES, UH, THE OVERVIEW AND COMPLIANCE, AND THEN THE PROCESS TO CREATE AMEND FEES ALONG WITH THE TIMELINE.
AS YOU GUYS KNOW, IN OUR LAST PRESENTATION SINCE 2007, OVER $100 MILLION HAS BEEN COLLECTED IN THE PARKS AND RECREATION DEDICATION FORM, UH, FUND ACROSS 21 PARK SECTORS.
NOW, THIS FUNDING HAS BEEN USED TO ACQUIRE LAND AND DEVELOP AND IMPROVE PARK FACILITIES TO MEET THE NEEDS OF OUR GROWING POPULATION.
I WOULD LIKE TO POINT OUT THAT STRUCTURAL IMBALANCE THAT CURRENTLY EXISTS BETWEEN PARK SECTORS.
UM, AND SLIDE FOUR, THE PIE CHART ACTUALLY ILLUSTRATES THAT 53.5% OF TOTAL
[00:10:01]
PARK DEDICATION FUND REVENUE IS GENERATED JUST BY FIVE OUTTA 21 PARK SECTORS.THERE'S ALSO NOTICEABLE DISPARITY AMONG FIVE TOP FIVE SECTORS WITH PARK SECTOR 14 SHOWN IN ORANGE AND THE PIE CHART BRINGING IN $21 MILLION.
NOW, AS COMPARED TO SECTOR THREE OF THE TOP FIVE, WHICH HAS COLLECTED AROUND 7 MILLION EACH, THE FIFTH SECTOR HAS GENERATED MORE THAN $11 MILLION.
YES, YOU KNOW, AS A DEPARTMENT WE WANNA CALL ATTENTION TO THE NEED TO BALANCE PARK INVESTMENT ACROSS ALL 21 SECTORS.
HERE'S A MAP OF THE TOP FIVE EARNING SECTORS.
NOTICE THE LOCATION OF SECTOR SEVEN, UH, EXCUSE ME, NOTICE THE LOCATION OF SECTOR 14 IN ORANGE INNER SOUTH.
AND, UH, THE NEXT HIGHEST EARNING SECTOR SECTOR 12 IS, IT'S IN YELLOW, THE INNER LOOP NORTHWEST AREA.
THE THREE SECTORS GENERATING AROUND 7 MILLION ARE SHOWN IN PINK, PURPLE, AND BLUE.
THE REMAINING 16 SECTORS ARE SHOWN IN GRAY.
THAT REPRESENTS THE HIGHEST OPPORTUNITY TO BRING FORTH PARK SECTOR REVENUE REDISTRIBUTION, WHICH, UH, IT'S A PLAN TO HELP ACHIEVE SYSTEM-WIDE BALANCE.
THIS SLIDE REPRESENTS THE CITY'S PARK LAND NEEDS RELATIVE TO THE NATIONAL BENCHMARK OF 10 ACRES OF PARKLAND PER 1000 RESIDENTS.
THE GREEN AREA INDICATES PARK SECTORS, UH, THAT CURRENTLY MEET OR EXCEED OUR STANDARD OR THE NATIONAL STANDARD.
THE RED AREAS HIGHLIGHT PARK SECTORS WITH THE GREATEST DEFICIENCY ARE CLASSIFIED AS VERY HIGH NEED FOR ADDITIONAL DEVELOPED PARK SPACE.
THE ORANGE AND GREEN AREAS ALSO INDICATE SUBSTANTIAL PARKLAND GAPS DRIVEN BY POP POPULATION, DEMAND UNDERSCORING AREAS WHERE INVESTMENT IS ALSO NEEDED TO ENSURE ADEQUATE ACCESS.
NOW OVERALL, THIS ANALYSIS MAKES CLEAR THE SIGNIFICANT PROGRESS STILL IN NEED.
YOU KNOW, ONLY SIX PARK SECTORS CURRENTLY MEET THE ACCESS STANDARD OF OUR URBAN PARK SYSTEM.
OVERALL PARK DEDICATION FUNDS HAS TRANSFORMED AND EXPANDED HOUSTON'S PARK SYSTEM WITH 47 MILLION ALREADY INVESTED AND AN ADDITIONAL 36 MILLION IN THE PIPELINE AS PROJECTS BECOME SHOVEL READY.
WHILE INVESTMENT HAS BEEN DISTRIBUTED ACROSS ALL COUNCIL DISTRICTS AND TARGETED TOWARD HIGH NEED AREAS WITHIN EACH OF THE 21 PARK SECTORS, FUNDING DISPARITIES REMAIN IN 16 SECTORS, CREATING CONTINUED CHALLENGES FOR SOME OF HOUSTON'S MOST VULNERABLE AND UNDERSERVED COMMUNITIES.
TO ADDRESS THIS STRUCTURAL IMBALANCE, WE RECOMMEND AN AMENDMENT TO CHAPTER 42 THAT WILL PROVIDE UP TO 30% OR MORE OF THE PARK DEDICATION FUND REVENUE TO BE STRATEGICALLY DEPLOYED CITYWIDE.
YOU KNOW, THIS FLEXIBILITY WILL ENABLE THE CITY TO RESPOND TO THE MOST CRITICAL NEEDS, ADVANCED PRIORITY PROJECTS AND ACQUIRE LAND NECESSARY TO DEVELOP PARK FACILITIES.
UM, THIS WILL ENSURE ACCESS TO QUALITY PARKS CITYWIDE.
AND THIS IS DEFINITELY, UM, SOMETHING THAT I'D LIKE TO SEE, UM, SHOWING THOSE DISPARITIES THAT WE CAN TAKE 30% OF THE, UH, RIGHT NOW ALL THE MONIES COLLECTED WITHIN A CERTAIN AREA HAS TO BE SPENT IN THAT AREA.
SO YOU'RE, WHAT YOU'RE SUGGESTING IT WOULD BE BETTER TO, AS WE SAW VERY CLEARLY ON THE MAPS OF AREAS OF NEED AND AREAS THAT GET LESS FUNDING, WE'D BE ABLE TO, UM, TAKE SOME OF THE FUNDING FROM A CERTAIN SECTOR, 30% OF THAT AND, AND SPREAD IT TO AREAS AND, AND MORE NEED.
SO WE OBVIOUSLY DIS UH, LEGAL DETERMINED THAT WAS, THAT WAS VIABLE.
WE CAN MAKE, WE CAN MAKE THAT RECOMMENDATION.
GOOD MORNING, CHAIR ALCORN, VICE CHAIR CASTILLO COUNCIL MEMBERS AND STAFF.
AS YOU KNOW, I'M VON TRAN, DIRECTOR OF THE PLANNING AND DEVELOPMENT DEPARTMENT.
IN THIS SECTION, I WILL COVER KEY PROVISIONS IN CHAPTER TWO 12 OF THE LOCAL GOVERNMENT CODE AND CHAPTER 42 OF THE CITY'S CODE OF ORDINANCES AS THEY RELATE TO PARK FEES FOR MULTIFAMILY AND SINGLE DEVELOPMENT, WHICH ALSO INCLUDES THE FEE SETTING PROCESS.
I WILL ALSO GO OVER STEPS NEEDED FOR COMPLIANCE.
AND THEN FINALLY OUR PROPOSED TIMELINE.
I WOULD LIKE TO WELCOME COUNCIL MEMBER FRED FLICK, ANDER AND COUNCIL MEMBER WILLIE DAVIS AND STAFF FROM COUNCIL MEMBER TIFFANY THOMAS' OFFICE.
[00:15:01]
CHAPTER TWO 12 AND CHAPTER 42.CHAPTER TWO 12 APPLIES TO MULTIFAMILY ONLY.
THE CITY MUST CHOOSE LAND DEDICATION FEE, OR BOTH FEES ARE COLLECTED AT CERTIFICATE OF OCCUPANCY.
THE FIRST ONE IS A HIGHER FEE OPTION EXCEEDING 2% OF THE MEDIAN FAMILY INCOME, WHICH REQUIRES COMPLEX CALCULATIONS AND IS MORE DIFFICULT TO ADMINISTER.
THE SECOND IS A LOWER FEE, MORE STRAIGHTFORWARD CALCULATION OPTION CAPPED AT UNDER 2% OF THE MEDIAN FAMILY INCOME.
CHAPTER 42 APPLIES TO BOTH MULTIFAMILY AND SINGLE FAMILY.
IT REQUIRES PARKLAND DEDICATION OR FEE IN LIEU.
FEES ARE COLLECTED AT PERMIT AND THE FEE IS $700 PER UNIT.
THIS IS THE PROCESS TO CREATE OR AMEND FEES.
CHAPTER TWO 12 REQUIRES A PUBLIC HEARING TO CLASSIFY AREAS OF THE CITY AS SUBURBAN, URBAN, OR CENTRAL BUSINESS DISTRICT.
IT ALSO REQUIRES NOTICE TO APPRAISAL DISTRICTS CALCULATING AVERAGE LAND VALUE AND SETTING DWELLING UNIT AND DENSITY FACTORS.
THESE STEPS ARE MANDATORY TO MAINTAIN AUTHORITY TO IMPOSE FEES.
CHAPTER 42 REQUIRES ANNUAL REPORTS TO THE PLANNING COMMISSION FEE, ADJUSTMENTS TO BE BASED ON LAND VALUE, PUBLIC HEARING AND COMMISSION RECOMMENDATION AS WELL AS CITY COUNCIL APPROVAL.
TO STAY ALIGNED WITH STATE LAW, WE MUST UPDATE CHAPTER 42.
WE RECOMMEND ADOPTING THE LOWER FEE, THE MORE STRAIGHTFORWARD CALCULATION OPTION FOR MULTIFAMILY CONSIDERING A FEE ONLY APPROACH FOR MULTIFAMILY AND EXTENDING THE THREE YEAR OBLIGATION WINDOW.
AND THIS IS IN ADDITION TO THE RECOMMENDATION THAT WAS PROPOSED BY DIRECTOR ALLEN.
THIS IS THE PROPOSED TIMELINE FOR AMENDING CHAPTER 42, PRODUCED THE FINAL RED LINE OF THE ORDINANCE BY APRIL 23RD, PRESENTATION TO THE PLANNING COMMISSION ON APRIL 30TH.
HOLD A PUBLIC HEARING ON MAY THE 14TH WITH AN OPTION FOR ANOTHER PRESENTATION TO THIS COMMITTEE AGAIN ON JUNE THE SECOND.
THEN FINALLY FORWARD TO CITY COUNCIL.
THIS CONCLUDES MY PRESENTATION.
WE ARE HAPPY TO ANSWER ANY QUESTIONS.
DIRECTOR TRAN FEES COLLECTED AT PERMIT.
WHEN IS THAT EXACTLY? WHEN, WHEN WOULD FEES BE COLLECTED? SO CURRENTLY IN CHAPTER 42, WHEN A PROJECT APPLIES FOR A PERMIT, PART OF THEIR PERMIT PROCESS AND APPLICATION FEES INCLUDE THE PARTS FEES.
SO WHEN THEY'RE APPLYING, WHEN THEY'RE, UM, GETTING, APPLYING FOR THEIR PERMIT, THAT'S WHEN THAT WOULD BE PAID.
AND I THINK YOU THE TIMELINE ANSWERED HOW LONG THE INITIAL REQUIREMENTS WOULD TAKE.
TALK TO ME ABOUT NO, NO, ONLY A FEE ONLY DEDICATION, UH, FEE ONLY, NO, NO PARKLAND DEDICATION FOR MULTIFAMILY.
WHAT DOES THAT MEAN? I I THOUGHT IF YOU HAD LIKE A APARTMENT BUILDING AND A, A PARK LIKE ON IN YOUR, WITHIN YOUR APARTMENT BUILDING, THAT WOULD COUNT.
ARE YOU SAYING THAT'S NOT GOING TO COUNT OR, SO CURRENTLY CHAPTER 42 ALLOWS DISCRETION OF THE DIRECTOR, ALAN, DIRECTOR OF THE PARKS TO ACCEPT PARK DEDICATION, LAND OR A FEE LIKE A PUB.
LIKE HE CAN ACCEPT PUBLIC, PUBLIC, PUBLIC LIKE FEE.
YOU KNOW, IF THEY HAVE SOME PROPERTY NEAR ONE OF OUR PARKS THAT COULD BE ACCEPTED INTO OUR PARK SYSTEM.
WHICH WOULD BE A SUBSTITUTE FOR PAYING THE FEE.
AND THEN WHAT ABOUT A PRIVATE PARK? CURRENTLY THEY CAN ALSO DEDICATE AND COUNT PRIVATE PARKS AS PART OF THE REQUIREMENT.
SO THE PRIVATE PARK WOULD COUNT INSTEAD OF PAYING THE FEE IN LIEU? CORRECT.
SO WHAT DOES IT MEAN EXPLORE FEE ONLY AND NO DEDICATION OF LAND FOR MULTIFAMILY? YES.
SO CHAPTER TWO 12, WHICH TAMMY CAN ALSO EXPAND ON, HAS A PROVISION WHERE IF A DEVELOPER DEDICATE LAND, WE WOULD ALSO NEED TO DO AN APPRAISAL OF THAT LAND.
AND IF THEY WERE TO DEDICATE, WHETHER IT'S A PRIVATE PARK OR A PUBLIC PARK, THE APPRAISAL AMOUNT OF THE LAND AND THE FEE ARE COMPARED THE CITY WOULD NEED TO TAKE CARE OF THE DELTA.
[00:20:01]
LAND IS GONNA BE A LOT MORE EXPENSIVE THAN THE FEE.AND SO THAT PUTS US IN A NOT ADVANTAGEOUS POSITION.
SO THERE WOULD STILL BE THE OPTION TO DEDICATE LAND, BUT IF THERE IS TOO MUCH OF A DISCREPANCY, WE WOULD PERHAPS CHARGE THE FEE INSTEAD.
UM, COUNCIL MEMBER MARTINEZ, THANK YOU CHAIR.
AND IT WAS KIND OF, UH, IN THE SAME, UH, SAME LINE OF, UH, QUESTIONING I THINK, UH, FOR ME, WHAT IS THAT BREAKDOWN? HOW MANY FOLKS ACTUALLY SAY, HEY, I WANNA PAY THE FEE IN LIEU OF RIGHT.
DO Y'ALL HAVE THAT SPECIFIC NUMBER? WE, WE DO HAVE THAT NUMBER AND I CAN'T PULL IT OUT IN MY HEAD.
BUT THERE'S A SIGNIFICANT AMOUNT OF FEE PAID IN LIEU OF LAND BECAUSE THE FEES THAT ARE CHARGED ARE HALF OF WHAT OTHER CITIES CHARGE ACROSS THE US.
AND I, I GUESS, UM, THE REASON WHY I ASK THAT IS 'CAUSE IF, IF FOLKS ARE ALREADY PAYING THE FEE, YOU KNOW, JUST MAKING SURE THAT WE'RE BEING COGNIZANT OF THAT WHEN WE'RE TALKING ABOUT THE ORDINANCE.
UH, BECAUSE THEN Y'ALL ARE SAYING NOW THAT POSSIBLY THERE WOULDN'T BE A, UM, AN OPTION TO PUT PRIVATE GREEN SPACE ON THE, ON THE PROPERTY AND NOW YOU WOULD HAVE TO PAY THE FEE.
IS THAT WHAT WE'RE TRYING TO PUSH TOWARDS? NO, IF, IF THERE'S PRIVATE, IF THERE'S A PRIVATE PARK WITHIN THAT DEVELOPMENT IN LIEU OF A FEE STILL COUNTS.
IT SOUNDS LIKE WE'RE JUST GONNA, IF THAT, IF THE VALUE OF THE LAND IS, IS IS OKAY, IS USUALLY GONNA BE MORE YES.
MAYBE I, IF I USE A REAL LIFE EXAMPLE, FOR 100 UNITS OF A MULTIFAMILY AT $700 PER UNIT, THEY WILL BE PAYING $70,000 IN FEES.
IF THEY WERE TO DEDICATE ONE ACRE, 1.8 ACRE, THAT'S RE THE REQUIREMENT RIGHT NOW IN CHAPTER 42.
FOR A HUNDRED UNITS, IT WOULD NEED TO BE 1.8 ACRES.
THAT ONE POINT ACRES POTENTIALLY COULD BE WORTH UPWARDS OF 150 OR MORE.
SO THAT'S LIKE DOUBLE THE AMOUNT OF THE FEES THEY WOULD PAY UNDER CHAPTER TWO 12.
THE CITY WOULD NEED TO COMPENSATE THE DEVELOPER FOR THE DIFFERENCE BETWEEN THE FEES, THE FEE THAT WE CHARGE, AND THE VALUE OF THE LAND.
SO IF OUR FEE IS CURRENTLY AT 700,000 OR UM, $700 AND THE LAND IS WORTH 150,000, WE WOULD NEED TO PAY THE DEVELOPER THE DIFFERENCE OF $80,000.
UH, THE OTHER QUESTION I HAD AND, AND IT LOOKS LIKE THE THE 30% IS, UM, I, I AGREE.
I THINK THERE'S DEFINITELY D DIFFERENT PARTS OF THE CITY THAT, UH, MIGHT NOT BE SEEING AS MUCH DEVELOPMENT AS WELL.
THE, THE LINES THAT WE HAVE NOW FOR EACH OF THESE PARK SECTORS, ARE THEY JUST SET UP, YOU KNOW, IS, HAVE Y EVER THOUGHT ABOUT LIKE WHAT WE GO THROUGH REDISTRICTING, WHEN YOU START SEEING MORE DEVELOPMENT, MORE POPULATION TO SEEING HOW Y'ALL COULD BETTER FIT THAT MODEL? OR IS THIS JUST AN EASIER ROUTE TO JUST DO 30% OR MORE? WE'VE, WE'VE DISCUSSED THAT POTENTIAL TO REDRAW THE SECTOR LINES.
I MEAN, ANOTHER EXAMPLE IS IN SECTOR FIVE FROM A DEVELOPMENT STANDPOINT, WE'VE COLLECTED $80,000, RIGHT? MM-HMM
BUT IN SECTOR 14 WE'VE, WE'VE COLLECTED $21 MILLION.
UM, SO EITHER THE ABILITY TO SPEND THE MONEY ACROSS SECTORS OR REDRAW THE SECTORS FROM AN, FROM AN ECONOMIC STANDPOINT, UM, WE'RE, WE'RE TALKING ABOUT IT NOW AND THAT'LL PROBABLY COME DOWN A LITTLE BIT LATER AS WE, AS WE CONTINUE TO MEET.
AND, AND I JUST APPRECIATE THE TIMELINE SO THAT WE CAN MAKE SURE STAKEHOLDERS ARE ENGAGED, UM, AS WELL.
I'M SURE THERE'S GONNA BE SOME FEEDBACK FROM FOLKS.
SO, THANK YOU COUNCIL MEMBER FLICKINGER, I'VE GOT A QUESTION.
YOU TALKED ABOUT EXTENDING THE TIME TO OBLIGATE THAT FUNDS.
IS THAT JUST ESSENTIALLY SAYING YOU'VE GOT LONGER TO SPEND IT OR DECIDE HOW TO SPEND IT? CORRECT.
AND CURRENTLY WE HAVE TO SPEND IT WITHIN THREE YEARS OF THAT 100 MILLION.
UH, WE HAVE ABOUT 14 MILLION LEFT TO SPEND OVER THE NEXT THREE YEARS.
AND YOU GUYS KNOW HOW DEVELOPMENT IS BETWEEN DESIGN PERMITTING AND CONSTRUCTION? THAT'S TWO YEAR PROCESS.
SO OUR TIME, OUR TIMELINES ARE REALLY CRUNCHED.
ARE, ARE WE STILL LOOKING AT INCREASING THESE FEES? NO, WE'RE NOT PROPOSING THAT.
SO THEY'RE GONNA REMAIN THE SAME.
WELL, WE'RE GOING TO BE DISCUSSING THAT
SO SOME OF THE SECTORS DO NOT COLLECT ENOUGH FUNDS TO EVEN DO ANYTHING WITH IT.
SO RIGHT NOW, SO THERE'S NOT ENOUGH REVENUE TO ACTUALLY PAY FOR ANYTHING, RIGHT? CORRECT.
THANK YOU BOTH FOR THE PRESENTATION.
[00:25:01]
UM, I WANT TO GO TO SLIDE SIX, WHICH DEALS WITH PARK SECTOR DISPARITY.THIS, UM, THIS, UH, MAP OF THE CITY HAS, UH, SECTORS BROKEN DOWN ACCORDING TO IT LOOKS LIKE, UH, HIGHWAYS IN, IN SOME INSTANCES.
UM, HOW DID Y'ALL, UH, DEFINE, UH, THE, THE REST OF THE SECTORS? WHAT, WHAT CRITERIA DID Y'ALL USE TO DEFINE THEM? THE 21 SECTORS 2007 WERE CREATED, UH, FROM A PREVIOUS ADMINISTRATION AND DIRECTOR MM-HMM
AND I THINK WE, AT THAT TIME, WE, WE USED THE SIX 10 LOOP TO HELP DEFINE HOW THE SECTORS WOULD BE DIVIDED WITHIN.
I'M GONNA HAVE TO GO BACK AND GET THE SPECIFICS ON IT.
UM, BUT IN TERMS OF, IN TERMS OF THIS SLIDE AND THE, AND THE PROPERTY AND THE PARK SPACE, WE GOT THAT FROM OUR PARK MASTER PLANT, UH, IN TERMS OF WHERE WE'RE PARKED FOR OUR PARK RICH, SO TO SPEAK.
AND, UM, THIS SHOWS HOW MANY ACRES PER 1000 RESIDENTS WE CURRENTLY HAVE IN THOSE VARIOUS SECTORS, IS THAT RIGHT? THAT'S CORRECT.
UM, WHAT POPULATION FIGURES ARE WE USING THE, THE MOST RECENT? OR IS THERE A BASELINE OR, OR WHAT? I'LL, I'LL HAVE TO GET THAT ANSWER TO YOU.
WE GENERALLY USE THE CENSUS REPORT, UH, THE LAST ONE THAT CAME OUT.
LET ME ASK YOU ABOUT SOME OF THE OTHER SLIDES AND IF WE CAN GO TO, LET'S GO TO SLIDE 11, UM, THREE RECOMMENDED, UM, BULLET POINTS THERE.
THE FIRST ONE IS PURSUE LOW FEE OPTION FOR MULTIFAMILY.
UM, DO YOU HAVE A FEEL FOR WHETHER THAT WOULD BE, UH, REVENUE NEUTRAL OR WOULD IT RESULT IN IN MORE REVENUE OR LESS REVENUE FOR THE CITY AT THIS POINT? IF, IF THIS GETS ADOPTED, I, WE HAVE NOT DONE THE FULL CALCULATION, BUT GUT CHECK, I WOULD SAY IT WOULDN'T BE LESS THAN WHAT WE'RE COLLECTING RIGHT NOW MM-HMM
IF ANYTHING, POTENTIALLY IT COULD BE MORE.
SO WE DON'T HAVE A SPECIFIC FEEL FOR THAT ONE WAY OR ANOTHER AT THIS POINT.
UM, I WILL SAY CURRENTLY IT'S ALMOST 50 50 BETWEEN SINGLE FAMILY AND MULTIFAMILY IN TERMS OF REVENUE COLLECTED.
SO IT JUST DEPENDS ON THE DEVELOPMENT TO BE HONEST AND A TYPE OF DEVELOPMENT.
AND AT THIS POINT IN THE PROCESS, HAVE WE, HAVE WE SOUGHT INPUT FROM, UM, BUSINESS STAKEHOLDERS? NOT YET.
WE WILL, UH, WE PLAN TO ALSO MAKE THE SAME PRESENTATION, UM, TO THE PUBLIC.
AND OB OBVIOUSLY YOU SAW IN THE TIMELINE A PART OF THE PROCESS IS PUBLIC HEARING.
SO WE WILL BRING THIS FORWARD TO THE PLANNING COMMISSION FOR PUBLIC HEARING.
UH, WE HAVE ON THE SCHEDULE POTENTIALLY FOR TWO PUBLIC HEARING.
AND COUNCIL MEMBER RAMIREZ, I CERTAINLY HAVE BEEN IN TOUCH WITH, UM, GREATER HOUSTON BUILDERS ASSOCIATION, HOUSTON REAL ESTATE COUNCIL, UH, DEPARTMENT ASSOCIATION, AND HAVE HAD MEETINGS ABOUT THAT AND THEY'RE IN THE AUDIENCE AND HAVE BEEN INVITED TO EVERYTHING WE'RE DISCUSSING.
COUNCIL MEMBER FLICKINGER, JUST WANNA CONFIRM MY UNDERSTANDING, THESE FUNDS ARE ONLY TO BE USED FOR THE ACQUISITION OF A NEW PARK OR FOR A REHABILITATION OF A PARK, BUT CANNOT BE USED FOR MAINTENANCE.
IS THAT CORRECT? NO, NOT, NOT FOR ROUTINE MAINTENANCE.
FOR REPLACEMENT, LET'S JUST TAKE LIGHTING.
YOU KNOW, WE HAVE OLD LIGHTING IN PARKS AND WE NEED LED LIGHTING SOMETHING NEW.
BUT YOUR REGULAR SCHEDULE OF MOWING THE PARK AND THAT TYPE OF STUFF, THESE FUNDS CAN'T BE USED FOR THAT? CORRECT.
THIS IS CAPITAL, UM, IMPROVEMENTS OR ACQUISITION.
BOTH ARE ALLOWED AND WITH A LI AND THEN YOU'VE GOT LEGAL FEES AND ENVIRONMENTAL FEES, APPRAISALS, THOSE ARE LIMITED TO 5%.
AND I WILL SAY ON THE, THE FEE QUESTION, ESPECIALLY WHEN WE'RE TALKING ABOUT THIS, THE, THE, YOU KNOW, THE DELTA AND WHAT COULD BE THE LAND VALUE.
ANOTHER, YOU KNOW, WE AS THIS, AS THIS FEE, AS THIS ORDINANCE WAS ESTABLISHED IN 2007, THERE WAS SUPPOSED TO BE AN ANNUAL APPRAISAL EACH YEAR.
WE DIDN'T DO THAT 'CAUSE THERE WAS NO INTENTION TO RAISE THE FEE.
NOBODY WAS LOOKING TO RAISE THE FEE.
THIS WAS RIGHT AT, AT THE DOWNTURN, 2007, YOU KNOW, THINGS WERE DOWN.
BUT PART OF THE ORDINANCE IN, IN 2 50, 2 42, 2 53 C UH, SAYS THAT, UM, PARKS PLANNING DIRECTOR, PARKS DIRECTOR SHALL REPORT TO THE PLANNING COMMISSION ON THE AMOUNT OF FEES IN LIEU OF DEDICATION RECEIVED, EXPENDED
[00:30:01]
OR ENCUMBERED DURING THE PROCEEDING 12 MONTHS.THE REPORT SHALL ALSO INCLUDE AN ANALYSIS OF CHANGES IN THE TAXABLE VALUE OF LAND WITHIN THE CITY AS CERTIFIED BY EACH RESPECTIVE COUNTY APPRAISAL DISTRICT.
THE DIRECTOR AND THE PARKS DIRECTOR MAY RECOMMEND AN INCREASE IN THE FEE LIEU OF DEDICATION BASED ON INCREASES IN APPRAISED VALUE.
SO OBVIOUSLY APPRAISED VALUE HAS INCREASED OVER THE LAST 20 YEARS.
AND, AND, AND THAT'S, YOU KNOW, THAT'S, THAT'S WHAT I THINK I'D LIKE MY COLLEAGUES TO CONSIDER AS WE'RE DISCUSSING THE FEES.
THANK YOU BOTH FOR THE PRESENTATION.
UM, I JUST WANTED TO CLARIFY FOR CHAIR ALCORN'S FIRST QUESTION THAT SHE ASKED ABOUT THE PRIVATE PARK VERSUS THE PUBLIC PARK DEDICATION.
WHEN YOU SAY, UM, EXPLORE FEE ONLY AND NO DEDICATION OF LAND, WE'RE TALKING ABOUT THE PRIVATE PARK LAND.
IS THAT CORRECT? I WAS A LITTLE CONFUSED ON THAT.
IS IT IS BOTH PRIVATE AND PUBLIC? BOTH PRIVATE AND PART PUBLIC.
SO THAT, FOR THE EXPLORER FEE FOR FEE ONLY IS FOR BOTH PRIVATE AND PUBLIC? CORRECT.
YEAH, AND I'M NOT REALLY INTERESTED IN PAYING A HUGE DELTA, YOU KNOW, IN, IN, IN, YOU KNOW, IF THE APPRAISED VALUE HAS GONE UP SO MUCH AND WE'RE CHARGED STILL CHARGING $700, WE'RE GONNA OWE A BUNCH OF DEVELOPERS A BUNCH OF MONEY.
SO LIKE, WE'VE GOTTA LOOK AT THAT FEE TO MAKE IT MORE IN LINE WITH APPRAISED VALUES, IN MY OPINION,
AND, AND, AND, AND CONSIDERABLY LOW.
IF YOU LOOK AT LAST MONTH'S, UM, LOOK CONSIDERABLY LOWER THAN OTHER CITIES IN TEXAS.
IF YOU LOOK AT LAST MONTH'S PRESENTATION, UH, COUNCIL MEMBER RAMIREZ, AND, UH, MADAM CHAIR, THIS IS PROBABLY MORE A QUESTION FOR YOU.
IF, IF, YOU KNOW, I'M LOOKING AT THIS TIMELINE FOR ACTION ON THIS, UH, PARTICULAR ORDINANCE, HOW DOES, HOW DOES THIS FIT IN WITH, UH, OUR BUDGET SCHEDULE, OUR MEETINGS ON THE BUDGET AND VOTES ON THE BUDGET? WELL, RIGHT AROUND WHEN IT, THIS COMES TO, UH, THAT, WHEN THIS COMES TO CITY COUNCIL WILL BE RIGHT AROUND WHEN WE ARE PASSING THE BUDGET.
IT IS MY HOPE, UM, THAT WE, THIS IS CONSIDERED AS, AS, UH, BUDGETS ARE PREPARED.
UM, UM, YOU KNOW, THAT THEY'RE NOT PROPOSING AN INCREASE IN FEE AND PERHAPS THERE MIGHT BE A BUDGET AMENDMENT OR SOME OTHER MEASURE.
I DON'T, I'M NOT SURE, I'M NOT SURE HOW IT ALL FITS IN.
BUT THE BUDGET, THE BUDGET VOTE WILL BE THE DAY AFTER THIS COMES TO BFA.
AND BY, BY THE WAY, IF THIS SCHEDULE NEEDS TO BE ADJUSTED, WE CAN'T ADJUST IT, WE'RE JUST SAYING THIS IS THE MINIMUM TIMELINE THAT WE NEED.
I THINK Y'ALL ARE HAVE, ARE PUSHING ON THIS AND I, I APPRECIATE THAT.
I KNOW IT'S A LOT OF WORK TO GET IN LINE WITH THE STATE.
AND I APPRECIATE YOUR WORK ON IT.
SO I THINK THE TIMELINE LOOKS GOOD.
THANKS SO MUCH FOR YOUR PRESENTATIONS AND FOR TAKING A HARD LOOK AT THIS ORDINANCE AND REALLY EXCITED ABOUT THE 30%.
UM, KENNETH, THAT'S, THAT'S GONNA BE GREAT.
OR MORE WE'RE MOVING, WE'RE MOVING IN THE RIGHT DIRECTION.
NEXT, AND I, I'M, I'M SO SORRY, I, I FORGOT TO SAY WE HAVE A STAFF FROM COUNCIL MEMBER AT TARSHA JACKSON'S OFFICE AND SHE HAS BEEN HERE THE WHOLE TIME.
UH, WE NOW HAVE OUR NEXT PRESENTATION.
WE'LL, WELCOME BACK, UM, THE CONTROLLER'S OFFICE DEPUTY DIRECTOR WILL JONES TO PROVIDE A PRESENTATION ON UNDERSTANDING HOUSTON'S ELECTRICITY EXPOSURE.
OKAY, LET'S GO AHEAD TO THE NEXT SLIDE, PLEASE.
SO REALLY THE REASON I WANT TO GIVE THIS PRESENTATION IS THAT, YOU KNOW, LIKE MOST HOUSTONIANS, MYSELF, YOU ALL, WE ARE PAYING MORE FOR ELECTRICITY.
WE HAVE BEEN PAYING MORE SINCE, UH, YOU KNOW, THE IMPACT OF, UH, WINTER STORM URI.
UH, BUT THE CITY OF HOUSTON ITSELF, WE ALSO ARE, YOU KNOW, WE PURCHASED ELECTRICITY, SO WE ARE ALSO IMPACTED BY THAT.
SO I THOUGHT IT WAS IMPORTANT TO KIND OF LAY OUT HOW THAT LOOKS FOR THE CITY, ESPECIALLY AS WE'RE GETTING READY FOR THE BUDGET CYCLE COMING UP.
SO IN THIS PRESENTATION, WE'LL TAKE A LOOK, UM, AT THE TEXAS MARKET, WHAT MAKES TEXAS, TEXAS UNIQUE.
UH, WE'LL LOOK AT, UH, THE EXISTING CONTRACT THAT WE HAVE, UM, LOOK AT THE BUDGETARY IMPACT, AND THEN JUST LEAVE YOU WITH SOME TAKEAWAYS ON THAT.
SO I DO, BEFORE I GET INTO ALL THE BUDGET INFORMATION, DICK KIND OF WANT TO JUST TAKE A, A, A LOOK AT TEXAS AND WHAT MAKES US UNIQUE FROM, YOU KNOW, THE REST OF THE UNITED STATES.
UM, SO THE STRUCTURE OF THE TEXAS MARKET, WE ARE ESSENTIALLY, UM, AN ENERGY ISLAND, UH, IF YOU WILL.
SO, YOU KNOW, THE MAJORITY OF THE REST OF THE, THE STATES ARE KIND OF UNDER FEDERAL CONTROL AND THEY'RE KIND OF INTERCONNECTED.
UH, BUT WE ARE KIND OF ON OUR OWN.
SO 90% OF THE, UH, ELECTRICITY LOAD IN TEXAS IS MANAGED BY ERCOT.
UM, SO THAT'S IMPORTANT TO NOTE.
[00:35:01]
UH, LIKE I SAID, WITH THE, THE REST OF THE UNITED STATES, MOST OF THEM ARE UNDER, UH, YOU KNOW, FEDERAL REGULATION, RIGHT? UM, MANAGED BY THE FEDERAL ENERGY REGULATION COUNCIL.UM, SO WITH TEXAS, WE, WE HAVE STATE OVERSIGHT WITH THE PUCT.
SO THAT'S HOW WE ARE REGULATED.
UM, AND THEN ALSO WITH, WITH TEXAS, WE ARE A, UH, ENERGY ONLY MARKET.
SO IN, FOR THE MAJORITY OF THE OTHER STATES, THEY PAY OTHER POWER GENERATORS TO HAVE CAPACITY ON HAND.
UM, IN TEXAS, WE PAY FOR THE POWER THAT WE USE.
AND ONE OF THE, THE, THE, THE BIGGEST THINGS ABOUT TEXAS IS OUR, UH, COMPETITIVENESS.
SO IT'S A VERY COMPETITIVE MARKET.
UH, YOU HAVE THE POWER TO CHOOSE, UH, YOUR ELECTRICITY PROVIDER.
THERE'S NO SET FIX RATE ACROSS, UH, IN TEXAS.
AND THEN ALSO, UM, WITH, UH, WITH THAT COMPETITION ALSO COMES, YOU KNOW, INNOVATION.
UH, SO BECAUSE OF, YOU KNOW, THE COMPETITIVE COMPETITIVE NATURE OF TEXAS, UH, WE, WE ARE ONE OF THE MOST, UH, THE LEADERS WHEN IT COMES TO RENEWABLE ENERGY, PARTICULARLY WIND, UH, WE'RE NUMBER ONE ACROSS ALL THE STATES.
SO THAT IS A BENEFIT OF US HAVING THAT COMPETITIVE MARKET.
UM, BUT ALSO AS A, A COMPETITIVE MARKET, AS A, A RESIDENT, AS A CITY, YOU ALSO TAKE ON SOME RISK WHEN YOU, UH, TAKE ON THESE CONTRACTS.
UH, SO SOME OF THE, THE RISK KIND OF FALLS ON YOU.
UH, BUT REALLY THE, THE HIGHLIGHT WHERE I REALLY WANT TO POINT OUT IS THE, THE, THE ENERGY ISLAND, UM, THAT WE ARE, THAT WE HAVE HERE IN TEXAS.
'CAUSE WE SAW DURING WINTER STORM, YURI, UH, HOW THAT REALLY IMPACTED US.
WE DON'T HAVE THE ABILITY TO DRAW POWER FROM OTHER AREAS.
SO AS A RESULT OF, UH, WINTER STORM URI, THERE WERE NEW LAWS PASSED THAT TO HELP, HELP SECURE OUR GRID, RIGHT? SO A LOT OF, UH, THE DEFAULT SECURITIZATION, UH, UPLIFT SECURITIZATION, ALL OF THESE, THESE DIFFERENT LAWS THAT PASSED, I'M GONNA READ THROUGH ALL OF THEM, BUT THE WHOLE POINT WAS TO HELP STABILIZE THE GRID, HELP MAINTAIN, UM, YOU KNOW, THE GRID SO THAT WE DON'T REPEAT, UH, WHAT HAPPENED WITH WINTER STORM URI.
BUT WITH THOSE COSTS, UH, THOSE COSTS ARE PASSED ON, UH, TO THE CUSTOMERS, WHETHER YOU ARE RESIDENTS OR THE CITY OF HOUSTON.
UH, SO AS A RESULT OF THAT, THAT IS HELPING TO DRIVE, UH, THE COST.
AND THESE ARE WHAT WE CALL NON BYPASSABLE COSTS.
SO IF YOU SWITCH TO ANOTHER, UH, RETAIL PROVIDER, THESE COSTS WILL EXIST NO MATTER WHERE YOU GO.
SO THOSE, WE HAVE TO PAY THOSE COSTS.
UM, SO THAT'S IMPORTANT TO NOTE AS WHEN WE START TALKING ABOUT, UH, THE IMPACT TO THE BUDGET AND TO THE CITY.
OKAY, ON THE NEXT SLIDE, SO LET'S KIND OF TAKE A LOOK AT, UH, OUR CURRENT CONTRACT.
UM, SO THE, THE CURRENT CONTRACT IS A 60 $640 MILLION, UH, CONTRACT WITH RELYING FOR UP TO SEVEN YEARS.
SO YOU CAN SEE THAT AS A SIGNIFICANT FINANCIAL COMMITMENT, RIGHT? AND SO, UH, AGAIN, THE, THE TERMS WHERE IT WAS A FIVE YEAR TERM CONTRACT WITH TWO ONE YEAR OPTIONS, UM, AND WE ARE CURRENTLY IN THAT FIRST ONE YEAR OPTION.
SO OF THAT, UH, 640 MILLION, WE HAVE ABOUT 110 MILLION, UH, SPEND AUTHORITY LEFT IN THAT CONTRACT.
UM, AND AGAIN, THE, WHEN WE ENTERED INTO THIS CONTRACT, IT WAS, UH, THE FIRST TIME WHEN WE DID A HUNDRED PERCENT RENEWABLE ENERGY.
HOUSTON WAS RECOGNIZED, UH, NATIONALLY FOR, UM, OUR CONTRIBUTION AND BEING LEADERS IN THE RENEWABLE ENERGY MARKET.
SO SINCE WE'VE HAD THE CONTRACT, THERE HAVE BEEN, UH, SEVERAL AMENDMENTS AND MODIFICATIONS TO THE CONTRACT.
UH, WHEN YOU LOOK AT THAT FIRST ONE, THAT THAT'S A, THAT WAS A NO COST, THAT WAS A GOOD, UH, AMENDMENT TO, TO HAVE WHERE WE WOULD, YOU KNOW, ADJOURN PEAK TIMES, WORKING WITH RELIANT, WE CAN SEE WHERE WE CAN REDUCE, UH, TO, TO KIND OF SAVE AND GET CREDIT.
SO THAT WAS A, THAT WAS A POSITIVE AMENDMENT.
SO THEN YOU SEE THE SECOND AMENDMENT WHERE IT SAYS FIXED STREET LIGHT PRICING.
UH, SO TO UNDERSTAND OUR, OUR ELECTRICITY STRUCTURE, WE HAVE WHAT WE CALL GENERAL OPERATIONS, WHICH ARE OUR FACILITIES, AND THEN WE HAVE OUR STREETLIGHTS.
SO ONE OF THE THINGS THAT WE LEARNED DURING WINTER STORM URI, OUR, UM, OUR GENERAL OPERATIONS WAS ON A FIXED PRICE.
SO WE HAD NO IMPACT, UH, IN TERMS OF, UH, WE HAD A FIXED RATE.
SO WHEN, WHEN PRICES WENT CRAZY, UH, WE WERE GOOD WITH OUR FACILITIES.
HOWEVER, OUR STREETLIGHTS, WE WERE ON A VARIABLE RATE.
UH, WE HAD, WE HAVE ALWAYS BEEN UP UNTIL THAT POINT, UH, BECAUSE IT WAS MORE BENEFICIAL.
WE HAD NO ONE SAW WINTER STORM URI COMING, SO ALL THE RECOMMENDATIONS WERE TO KEEP THAT STRUCTURE.
BUT ONCE WINTER STORM URI HAPPENED, UM, AND PRICES SPIKED THOUSANDS OF PERCENT TO MILLIONS OF DOLLARS, IT WAS COSTING US FOR OUR STREETLIGHTS ALONE.
SO, UH, WE GOT WITH OUR CONSULTANTS
[00:40:01]
AND, UH, I, BACK IN 2021, I PRESENTED TO COUNSEL ABOUT, UM, YOU KNOW, THE NEED TO FIX THE STREET LIGHTS.SO, AND THAT, SO THAT'S WHAT WE DID SO THAT WE HAVE THAT BUDGET STABILITY.
UM, SO THAT WAS THAT AMENDMENT.
AND THEN IN 2023 AMENDMENT THREE, WE HAD, UM, ANOTHER AMENDMENT.
BECAUSE AGAIN, AS I JUST WALKED THROUGH, WE HAD ALL THE, THE DIFFERENT CHANGES IN LAW THAT IMPACTED THE COST.
UM, AND SO WE HAD TO AMEND OUR CONTRACT, UH, TO BE ABLE TO PASS THOSE COSTS ON TO THE CITY.
UM, SO NOW LOOKING AT WHERE WE ARE NOW, WE ARE IN OUR FIRST, UH, RENEWAL OPTION, RIGHT? AND SO TO ALSO UNDERSTAND THE CONTRACT, THE FIRST FIVE YEARS WE WERE ON THAT FIXED RATE.
UM, WHEN YOU GET TO THE RENEWAL OPTIONS, THEN YOU HAVE TO REVISIT, UH, THE PRICE.
SO AS YOU CAN SEE THERE IN OUR RENEWAL OPTION, UM, THE, THE PRICE IS UP ABOUT 90% FROM WHERE WE WERE WITH THAT FIXED RATE.
AND AGAIN, UH, TO UNDERSTAND WHEN WE, WHEN WE ENTERED INTO THIS CONTRACT, AND I'LL TALK A LITTLE BIT ABOUT THAT LATER.
WE ENTERED INTO THIS CONTRACT RIGHT BEFORE WINTER STORM URI HAPPENED.
SO FOR THE MAJORITY OF THAT TIME, WE'VE BEEN KIND OF SHIELDED FROM WHAT THE REST OF THE MARKETS WERE EXPERIENCING 'CAUSE OF THAT, NOW THAT WE'RE IN THE RENEWAL OPTION, UM, NOW WE HAVE SOME EXPOSURE TO THE REALITY OF WHAT EVERYONE ELSE HAS BEEN PAYING FOR A WHILE.
UM, AND SO AT AT THE SAME TIME, WE WENT AHEAD AND EXERCISED THE RENEWAL, THE SECOND OPTION, SO THAT, WE'LL, THE CONTRACT WILL CARRY IT THROUGH 2027.
UM, AND THIS IS JUST KIND OF WALKS YOU THROUGH, UH, WHAT WE'VE SPENT OR ENCUMBERED ON THE CONTRACT.
SO TODAY WE SPENT ABOUT 530 MILLION.
UH, AGAIN, WE ARE IN FY 26 AND YOU CAN SEE GOING FROM 25 TO 26, A SIGNIFICANT INCREASE IN WHAT WE HAD TO ENCUMBER TO BE ABLE, UH, YOU KNOW, FOR THE, FOR THE YEAR.
UH, BUT LIKE I SAID, WE HAVE 110 MILLION REMAINING.
AND I WANTED TO HIGHLIGHT THIS SLIDE BECAUSE WHEN WE GET TO FY 27, IF WE'RE SPENDING 123 MILLION THIS YEAR, UH, THAT 110 MILLION MAY NOT BE ENOUGH.
AND SO THEY MAY HAVE TO ADD SOME, UH, MORE SPEND AUTHORITY, SPEND AUTHORITY TO THE CONTRACT SO THAT WE CAN MAKE IT THROUGH THE, UH, THE, THE, THE TOTAL TERM OF THE CONTRACT.
BUT WE HAVE SPENT ABOUT 530 MILLION, UH, TO DATE.
UH, NOW THIS SLIDE IS VERY IMPORTANT AS WELL.
UM, 'CAUSE I WANTED TO REALLY HIGHLIGHT WHAT ARE THE DIFFERENT COMPONENTS OF THE ELECTRICITY COSTS.
AND IF YOU LOOK AT YOUR OWN BILL, YOU'LL SEE SOME SIMILAR COMPONENTS.
UM, AND THE BIG, THE BIG STORY HERE IS ABOUT ALMOST HALF OF THE, THE COSTS ARE RELATED TO PASS THROUGH COSTS, NOT DIRECTLY RELATED TO THE ENERGY THAT WE USE.
UM, AND LIKE I SAID, IF YOU LOOK AT YOUR OWN BILL, YOU'LL SEE, UM, YOU KNOW, THE, THE TRANSMISSION AND DISTRIBUTION COST.
UM, YOU WILL SEE SOME OF THE, UH, THE ERCOT COSTS.
UM, BUT ABOUT 50% IS, IS BASED ON, UH, THE USAGE PLUS WHATEVER THE NEGOTIATED RATE.
AND THEN YOU HAVE, UH, THE TRANSMISSION AND DISTRIBUTION.
SO THIS ONE IS VERY IMPORTANT.
THAT'S THE, THE CENTER POINT COST.
UM, AND AGAIN, THAT IS A STRAIGHT PASS THROUGH FROM CENTER POINT.
AND IF YOU LOOK AT IN TERMS OF COST RISING, THE SAME WAY, YOU KNOW, WE TALKED ABOUT, YOU KNOW, WHAT HAPPENED AFTER WINTER STORM, YURI, WE'RE ALSO SEEING GROWTH IN THE TRANSMISSION AND DISTRIBUTION.
YOU KNOW, WE HAD HURRICANE BARREL, WE HAD THE DERECHO CENTER POINT IS GONNA RECOVER THOSE COSTS, AND THOSE COSTS WILL BE PASSED ON TO US.
AND SO I, YOU WON'T SEE THAT COST GO DOWN.
WE MAY EVEN SEE THE TRANSMISSION AND DISTRIBUTION ALLOCATION GROW.
UM, AND THEN OF COURSE WE TALKED ABOUT ERCOT AND THEN THE OTHER TAXES.
SO ONE IMPORTANT, AND I PUT IT IN THE FOOTNOTE BELOW, WHEN WE DID THE RENEWAL, UM, WE ADDED A LOT OF THOSE ERCOT COSTS TO THE FIXED RATE, WHICH IS ALSO WHAT CONTRIBUTED TO USING SEEING SUCH A 90%.
UM, SO THE, THE, THE DISTRIBUTION YOU SEE HERE IS BASED ON THE AVERAGE OF 24 AND 25 OF STARTING IN 26.
THOSE ERCOT COSTS, THE MAJORITY ARE A PART OF THE, THE FIXED RATE, BUT IT'S STILL ESSENTIALLY, YOU KNOW, A NON BYPASSABLE COST.
BUT THAT, THAT'S JUST THE WAY THEY'RE CAPTURING IT.
SO JUST KINDA LOOKING AT THE BUDGET, UM, ABOUT 61% OF THE COSTS ARE, ARE IN THE ENTERPRISE FUNDS.
THE GENERAL FUND MAKES UP ABOUT 17%, AND THE SPECIAL FUND'S ABOUT 22%.
AND IT IS IMPORTANT TO NOTE IN THE GENERAL FUND, WE DO HAVE CONTINGENCY ABOUT 6.5 MILLION THAT'S ADDED TO THAT BUCKET.
UM, BUT IT'S IMPORTANT TO KIND OF SEE THE DISTRIBUTION.
AND I'LL TALK MORE ABOUT THE RECENT CHANGES IN THE PAST COUPLE OF YEARS WITH THE GENERAL FUND.
SO THIS, THIS SLIDE IS ALSO VERY IMPORTANT SO THAT YOU CAN REALLY SEE KIND OF THE CHANGES.
UH, SO WHAT I WANTED TO HIGHLIGHT IN, UM, STARTING IN FISCAL YEAR 21.
SO LIKE I SAID, WHEN WE GOT INTO THIS AGREEMENT WITH RELIANT, UM, IN JULY OF 2020, UM, THAT SAME FISCAL YEAR IS
[00:45:01]
WHEN, UM, THE WINTER STORM URI HAPPENED IN FEBRUARY OF 2021.SO WHEN, WHEN THE, WHEN WE STARTED THE CONTRACT, UH, LIKE I SAID, IT WAS A HUNDRED PERCENT RENEWABLE WAS REALLY THE FIRST TIME THAT THE RENEWABLE COST WAS LOWER THAN YOUR TRADITIONAL, UH, ENERGY COST.
AND SO WE WERE PROJECTING TO SAVE ABOUT 50 MILLION FROM WHERE WE WERE.
SO ABOUT 11 MILLION, YOU CAN SEE THE DROP FROM 94 THAT WE SPENT IN, IN, UH, FY 2020 TO 2021.
AND SO WE WERE EXPECTING TO SAVE A SIGNIFICANT AMOUNT, UH, WITH THIS CONTRACT.
UH, JUST SO HAPPENED WINTER STORM URI HIT THAT SAME FISCAL YEAR.
AND THEN, UH, AS I MENTIONED, OUR, UH, OUR GENERAL OPERATIONS WERE FIXED.
SO WE WERE SHIELDED FROM ANY FLUCTUATION.
UH, BUT AGAIN, OUR STREETLIGHTS, UH, WERE VARIABLE UNTIL WE FIXED IT.
SO YOU CAN SEE, YOU KNOW, A SPIKE IN 2023.
UM, AND THEN AS YOU WALK ALONG AND YOU SEE WHERE WE ARE LOOKING IN 2026, ABOUT A 40% INCREASE.
UH, 'CAUSE AGAIN, THE CO THE, THE FIXED RATE IS ABOUT 90% HIGHER THAN WHAT IT WAS.
UM, AND IT'S ALSO IMPORTANT TO NOTE THAT ON THIS PARTICULAR SLIDE, THE ELECTRICITY COSTS INCLUDE ALL ELECTRICITY COSTS.
WE DO HAVE A 20 YEAR PURCHASING POWER AGREEMENT, UH, SOLAR UH, AGREEMENT.
AND THERE DOES A VERY, VERY SMALL, UM, ENTERGY, UH, CONTRACT.
BUT THE MAJORITY OF THIS IS, UH, RELATED TO OUR, OUR RELIANT CONTRACT.
SO, AS I MENTIONED, I WANT, I DID WANNA TOUCH BASE ON THE GENERAL FUND 'CAUSE YOU'LL SEE SOME SIGNIFICANT CHANGES THAT HAPPENED AROUND FISCAL YEAR 2024.
UM, SO THE GENERAL FUND, UH, USED TO HOUSE OUR STREETLIGHT COSTS.
UM, SO YOU CAN SEE STARTING IN FY 2024, THOSE COSTS WERE SHIFTED TO THE DEDICATED DRAINAGE STREET RENEWAL FUND, UH, TO BE COVERED BY THE GENERAL MOBILITY FUNDS.
SO, UH, PREVIOUSLY IT REPRESENTED ABOUT 65% OF THE GENERAL FUND COSTS WHEN YOU LOOK AT ELECTRICITY.
SO THAT WAS A BIG, UH, UH, BIG SAVINGS IN THE GENERAL FUND.
AND SO YOU CAN SEE GOING FORWARD, UH, NOW THOSE COSTS ARE, ARE NOT IMPACTING THE GENERAL FUND, BUT YOU CAN SEE OUR GENERAL OPERATIONS, WE ARE STILL SEEING GROWTH THERE.
UM, BUT IT IS IMPORTANT TO HIGHLIGHT THAT SHIFT OF, OF THE STREETLIGHT COST TO THE DEDICATED DRAINAGE FUND ONE.
SO, UM, KEY TAKEAWAYS, UH, JUST TO KIND OF WRAP IT UP.
SO AS, AS, AS I SAID, UH, UNDER THE RENEWAL, UH, THE RATE DID INCREASE 90%, WHICH IS A SIGNIFICANT, UM, THE REMAINING CONTRACT CAPACITY, UH, MAY NOT BE ENOUGH.
UH, WE HAVE 110 LEFT, WE'RE PROJECTED TO SPEND 123 THIS YEAR.
SO THAT'S SOMETHING WE MAY NEED TO BE ABLE TO LOOK OUT FOR IN FY 2027, UH, BEYOND THAT.
UM, SO LOOKING AT FY 2027, THOUGH SOME DECISIONS WILL HAVE TO BE MADE ARE, WE'RE GONNA GO OUT, UH, TO, TO DO A ANOTHER RFP FOR A NEW, UH, CONTRACT.
I DID PUT THIS NOTE, STATE LAW DOESN'T REQUIRE, UH, ELECTRICITY CONTRACTS TO BE COMPETITIVELY BID, BUT THE CITY HAS ALWAYS DONE WE, LIKE I SAID, TEXAS IS COMPETITIVE MARKET.
THE CITY HAS ALWAYS DONE THAT TO TRY TO ENSURE WE GET THE BEST PRICE.
UM, AND IT DOES TAKE A WHILE TO, UH, FOR THAT PROCUREMENT PROCESS.
THE CITY OF HOUSTON IS A VERY COMPLEX, UH, ELECTRICITY PROFILE.
IT'S ABOUT 1.3 BILLION KILOWATTS ANNUALLY.
UM, WE HAVE THAT 20 YEAR PURCHASING POWER AGREEMENT.
UM, OUR BILLING PROCESS IS NOT VERY SIMPLE.
UH, SO IT'S A VERY, UH, IT TAKES A WHILE TO DO THAT, TO GO THROUGH THAT RFP PROCESS.
UM, SO LONG TERM CONSIDERATIONS, AS I MENTIONED, UH, THE, THE, THE IMPACT OF WINTER STORM YURI AND THE, THE NEED TO STABILIZE THE TEXAS GRID, WE'RE GONNA BE PAYING FOR THAT FOR A WHILE.
UM, AND AGAIN, WITH THE TRANSMISSION AND DISTRIBUTION COSTS, UH, THROUGH CENTER POINT, YOU KNOW, AGAIN, WITH HURRICANE BARREL AND, UH, THE DERECHO, THOSE COSTS, WE'RE GOING TO BE PAYING FOR THAT FOR A WHILE.
SO THIS IS NOT A, UM, A, A ONE ONE AND DONE TYPE IMPACT.
WE ARE GONNA BE DEALING WITH THIS FOR QUITE A WHILE.
UM, AND SO THAT I BELIEVE WRAPS UP MY REPORT AND HAPPY TO TAKE ANY QUESTIONS.
THANK YOU VERY MUCH, VERY INFORMATIVE.
I APPRECIATE YOUR DEEP DIVE INTO THIS.
ANY QUESTIONS, COLLEAGUES, COUNCIL MEMBER, FLICKINGER, THANKS FOR THE PRESENTATION.
YOU SHOW FROM 2016 TO 2023 ABOUT A 20% DECREASE.
UH, THE, THE COSTS WERE GOING DOWN BECAUSE, UH, KEEP IN MIND IN 2020 IS WHEN WE, UH, WE GOT INTO THE AGREEMENT WITH RELIANT AND THE COSTS WERE LOWER, SO WE WERE PROJECTING TO GO DOWN.
SO ALL THAT WAS DUE TO THE NEW CONTRACT.
I MEAN, THAT'S A HUGE SAVINGS.
THE OTHER THING I'M CURIOUS, IT SAYS WE USE A HUNDRED PERCENT RENEWABLES,
[00:50:01]
CORRECT? I MEAN, WE KNOW SOMETIMES THE SUN DOESN'T SHINE AND THE WIND DOESN'T BLOW, BUT WE STILL USE ELECTRICITY.SO THEY, THEY HAVE TO WHAT THEY CALL RENEWABLE ENERGY CREDITS, UH, AGAIN, OKAY.
SO WE ACTUALLY USE FOSSIL FUELS, BUT THEY'RE SWAPPED OUT WITH THE CREDIT FOR SOME OTHER THING.
THEY'VE DONE SOMETHING LIKE THAT.
BUT WE, WE, IT IS A HUNDRED PERCENT RENEWABLE AND THAT IS CERTIFIABLE IN, IN TERMS OF OKAY.
THANK YOU DIRECTOR FOR THE PRESENTATION.
UM, ON THE LAST SLIDE, ONE OF THE BULLET POINTS, REMAINING CONTRACT CAPACITY MAY BE INSUFFICIENT TO FULLY COVER FY 2027 COSTS.
DO YOU HAVE A PROJECTION ON WHAT THAT POTENTIAL GAP WOULD BE? YEAH, IT, IT COULD POTENTIALLY BE ABOUT 10 TO 20 MILLION BECAUSE LIKE I SAID, WE, WE HAVE 110 MILLION REMAINING AND WE'RE LOOKING AT SPENDING ABOUT 123 MILLION THIS YEAR.
UM, AND SO THAT MAY BE A GAP OF, UH, UH, 10 TO 20 MILLION POTENTIALLY.
THANK YOU FOR YOUR PRESENTATION.
DOES THAT THE, THE RATE THAT WE AGREED TO, DOES THAT ALSO INCLUDE THE AIRPORT? YEAH, IT INCLUDES ALL, ALL ENTERPRISE FOR ALL OPERATIONS FOR THE CITY.
I JUST WANTED TO MAKE SURE IF I KNEW THE SAME BUT THEIRS.
AND I APOLOGIZE COLLEAGUES, I, I MEANT TO CALL THE PUBLIC SPEAKERS ON THE OPEN SPACE ORDINANCE, SO I'M GOING TO DO THAT NOW.
UM, WE HAVE SOME PEOPLE SIGNED UP TO SPEAK ON OPEN SPACE.
THE FIRST ONE BEING LAURA GALLAGHER ONLINE DOES NOT APPEAR.
BEEN A BUILDER IN HOUSTON FOREVER, UH, INNER CITY STAFF.
AND I AM, UH, REPRESENTING, UH, GREATER HOUSTON BUILDER ASSOCIATION TODAY.
AND SO, UH, THE PRESENTATION WAS GOOD, BUT I HEARD SAL, UH, COUNCIL MEMBER ALCORN MENTION THAT WORD INCREASE.
UH, WE CAN, YOU KNOW, I THINK WE CAN GET BEHIND SOME SORT OF INCREASE, BUT FIRST I THINK WE'VE BEEN VIOLATING THE RULES SINCE 2007.
I DIDN'T EVEN KNOW WHAT PARKS WE BOUGHT.
UH, AND IT JUST, IT'S VERY APPARENT WE'RE SUPPOSED TO BE DOING THIS EVERY YEAR.
WE NEED MORE TRANSPARENCY, JUST A LIST OF WHAT PARKS YOU BOUGHT.
AND I HAVE THAT SAME QUESTION ABOUT THE MAINTENANCE.
WE'RE NOT PAYING FOR MOWING THE GRASS, RIGHT? WE'RE REPLACING A GAZEBO OR A BASKETBALL COURT.
THOSE ARE, THOSE ARE FINE THINGS TOO.
SO I THINK FIRST OF ALL, WE NEED TO GET THAT DONE.
IT SEEMS LIKE THAT SHOULD BE FAIRLY SIMPLE TO DO.
THE PARKS DIRECTOR PROBABLY HAS ALL THAT INFORMATION.
UH, JUST AS AN ASIDE, I THINK THE, UH, MAYBE LOOK AT RE REDISTRIBUTING THOSE DISTRICT LINES, HAVING 21 OF 'EM, MAYBE TOO MANY.
KNOCK IT DOWN TO FIVE AND THAT WAY THE MONEY GETS, YOU KNOW, TAKE THAT, UH, INNER CITY SIX 10 WHERE I BUILD A LOT OF STUFF AND MIX IT IN WITH, UH, YOU KNOW, NORTH SIDE OR SOMETHING.
JUST YEAH, I'VE TALKED SOME, I DUNNO WHY YOU HAVE 21.
YEAH, I'VE TALKED SOME TO THE ADMINISTRATION ABOUT THAT.
AND, AND MY SENSE IS THEY, THAT THEY'RE, THEY WANT, THERE WAS NOT AN INTEREST IN REDRAWING RIGHT NOW.
UM, RATHER REDISTRIBUTING THE 30%.
BUT WE CAN DIG MORE INTO THAT.
AND YOUR REQUEST FOR SPECIFIC INFORMATION ON WHAT HAS BEEN DONE WITH THESE FUNDS.
THAT, THAT IS, THAT IS IMPORTANT.
AND WE CAN MAKE SURE YOU GET THAT.
ANYWAY, UH, WE COME TO COUNCIL NOT VERY OFTEN, BUT, AND A BIG WORD IN THE UNITED STATES TODAY.
AND EVEN IN HOUSTON, AFFORDABILITY, AFFORDABILITY, AFFORDABILITY.
THIS REALLY, YOU'RE CHARGING NEW HOME BUYERS IN HOUSTON.
YOU'RE NOT CHARGING THE ENTIRE CITY OF HOUSTON.
AND SO THIS FEE GOES TO THE HOME BUYER AND GOT, WE LIKE TO BE NICE BUILDERS, BUT WE PASS IT ON AND THERE'S, IT'S A MARGIN THING.
SO YOU, IT'S A LITTLE BIT MORE THAN WHAT, WHAT THE NUMBER IS.
AND, UH, I, I COULD SEE SOMETHING WHERE YOU, I DON'T KNOW WHY THEY DIDN'T PUT IT ON AN INFLATION ADJUSTED EVERY YEAR DO INFLATION.
THAT WOULD'VE PROBABLY BEEN A GREAT DEAL.
EVERY A THOUSAND DOLLARS OF INCREASE IN, UH, COST IS ANOTHER 2,400 FAMILIES.
CAN'T, CAN'T AFFORD A HOME, HOME IN HOUSTON BECAUSE IT'S LIKE, IT'S ONLY THIS, IT'S ONLY THIS, IT'S ONLY THIS.
YOU'LL HEAR US SAY THAT ALL THE TIME.
'CAUSE IT'S ONLY THIS AND IT SOUNDS LIKE A REALLY GOOD DEAL.
I THINK PARK'S FANTASTIC, BUT I, BUT I THINK, YOU KNOW, QUITE FRANKLY PROBABLY SHOULD BE SPREAD AROUND PEOPLE OF HOUSTON.
AND I ALSO WOULD NEVER, EVER WANNA BE AUSTIN.
I TALKED TO THEM LAST WEEK ABOUT, THEY'RE DEALING, THEY DON'T EVEN REPL BECAUSE THE PARK FEE IS $23,000.
SO THEY HAD, I THINK THEY HAD THREE REPLANTS LAST YEAR FOR SINGLE FAMILY.
NO ONE CAN AFFORD TO LIVE IN AUSTIN.
I DON'T WANT US TO BECOME THAT CITY.
'CAUSE WE'RE TRYING TO MATCH OTHER CITIES.
[00:55:01]
JUST A LEAPFROG EFFECT.AND THE OTHER CITIES DON'T WORRY, DON'T WORRY.
SO, UH, ANYWAY, THAT'S, THAT'S MY COMMENTS QUESTION.
WE CERTAINLY WANNA BE COGNIZANT OF AFFORDABILITY.
I I JUST WANNA MAKE SURE WE TALK ABOUT THAT BECAUSE THERE'S ABSOLUTELY A LITTLE ABSOLUTELY.
MIKE, THANK YOU FOR BEING HERE AND APPRECIATE YOUR OBSERVATIONS.
WE'VE HAD REQUESTS FROM THE, FROM THE COMMUNITY, FROM FROM RESIDENTS, UH, WANTING TO KNOW HOW HAS THIS MONEY BEEN SPENT? HAS IT GONE TO NEW PARKS? HAS IT GONE TO MAINTENANCE? WHAT, WHAT HAVE WE DONE WITH IT? AND SO I THINK THOSE ARE, THOSE ARE VALID QUESTIONS.
UM, AND, UM, YOU KNOW, I ASKED ABOUT WHAT, AT WHAT POINT IN THIS PROCESS WILL, WILL WE CONS CONSULT, UH, BUSINESS STAKEHOLDERS? AND SO THAT'S, THAT'S GONNA BE AN IMPORTANT PART OF THIS AS WELL.
BUT APPRECIATE YOUR OBSERVATIONS.
AND BY THE WAY, WE DID HEAR ABOUT THIS, SO IT'S NOT LIKE THIS A SURPRISE.
I KNEW, I REMEMBER TALKING TO YOU ABOUT THIS AT A COCKTAIL PARTY.
YOU'RE, YOU'RE TALKING ABOUT RAISING THE FEE.
TAYLOR VALE PRESLEY WITH SEER WELCOME TAYLOR.
I'M TAYLOR VALLEY PRESLEY, THE PARKS EQUITY ANALYST AND ADVOCATE FOR THE COALITION FOR ENVIRONMENT EQUITY AND RESILIENCE.
DURING THE LAST BUDGET CYCLE, THE HOUSTON PARKS AND RECREATION DEPARTMENT LOST SIGNIFICANT FUNDING FOR MAINTENANCE AND OPERATIONS OF CITY PARKS.
THE LOSS OF FUNDING FOR HPR PLACES SIGNIFICANT BURDEN ON PARK STAFF TO MANAGE MORE WITH FEWER RESOURCES.
SIERRA AND OUR PARTNERS WOULD LIKE TO SEE THE CITY OF HOUSTON DEVELOP ADDITIONAL FUNDING STREAMS TO SUPPORT HOUSTON PARKS AND THE MANY BENEFITS THEY PROVIDE TO RESIDENTS.
THE EQUITABLE DIS DISTRIBUTION OF PARK FUNDING IS EXTREMELY IMPORTANT AND NECESSARY FOR ENSURING THAT ALL PARKS AROUND HOUSTON, NO MATTER THE NEIGHBORHOOD OR SIZE, HAVE A FUN, SAFE ENVIRONMENT AND AREA TO MEET, EXERCISE, AND PLAY.
UNFORTUNATELY, THE WAY THE OPEN SPACE ORDINANCE IS WRITTEN HAS THE FUNDS GOING BACK TO THE PARK SECTOR IN WHICH THE DEVELOPMENT HAS TAKEN PLACE.
THIS IS IN CONJUNCTION WITH HOW MANY, WITH HOW THE BOUNDARIES ARE CURRENTLY DRAWN, LEADS TO INEQUITIES WITHIN THIS SYSTEM.
WE THEREFORE SUPPORT THE 70 30 SUGGESTION THAT ALLOWS 30% OF THE COLLECTED REVENUE FROM THE PARKLAND DEDICATION IN LIEU FEES TO GO TOWARDS ANY PRIORITY PARK PROJECT AND THE CITY, DESPITE THE, THE PARK SECTOR.
ANOTHER IMPORTANT PIECE TO THIS THAT WE WANNA EMPHASIZE IS FUNDS TO GO TOWARDS EXPANDING PARK ACREAGE AS IT IS WRITTEN IN THE ORDINANCE.
IN THE SPIRIT OF TRANSPARENCY, WE ASK FOR HPR TO SHARE THE AMOUNT OF FUNDS THAT HAVE GONE TOWARD LAND ACQUISITION, THUS, THUS FAR PER PARK SECTOR AND FOR PARK EXPANSION TO BE MADE A PRIORITY IN THE FUTURE.
THANK YOU VERY MUCH FOR YOUR COMMENTS.
CODY MILLER, ALSO WITH GREATER HOUSTON BUILDERS ASSOCIATION.
UM, COMMITTEE, I'M GONNA JUST ECHO A LOT OF MIKE'S.
I'M WITH THE GREATER HOUSTON BUILDERS ASSOCIATION.
I'M GONNA ECHO A LOT OF MIKE'S COMMENTS.
I THINK IN ORDER, UH, FOR US TO BE AGREEABLE TO A FEE INCREASE, I THINK THAT WE WOULD LOVE TO SEE A LOT MORE TRANSPARENCY ON WHAT THE FEES HAVE BEEN SPENT ON OVER THE YEARS.
UM, HAVE MORE ANNUAL REPORTING AND JUST BE A LOT MORE TRANSPARENT ABOUT IT.
UM, ALSO ON THE AFFORDABILITY, ON THE AFFORDABILITY PIECE, UM, AND THE GREATER HOUSTON REGION, ABOUT 40,000 HOMES A YEAR ARE BUILT, UM, IN OUR REGION.
AND ONLY ABOUT 10% OF THOSE ARE WITHIN THE CITY, CITY LIMITS.
AND THERE'S A LOT OF REASONS FOR THAT.
BUT ONE OF THOSE IS BECAUSE IT'S SO MUCH MORE EXPENSIVE TO BUILD HOMES IN THE CITY OF HOUSTON.
UM, AGAIN, FOR A NUMBER OF DIFFERENT REASONS.
UH, BUT EVEN IF IT'S A NOMINAL FEE INCREASE FROM 700, 1200, THAT THOSE TYPES OF THINGS STILL ADD UP WHEN YOU, WHEN YOU HAVE PERMITTING FEES, INSPECTIONS, IMPACT FEES, ALL OF THAT GOES TOWARDS, UM, INCREASING THE COST OF HOUSING IN HOUSTON.
AND SO, LIKE WHAT WE LIKE TO SAY, IT'S, IT'S DEATH BY A THOUSAND PAPER CUTS.
UM, SO WHILE THIS MIGHT NOT BE AN IN SIGNIFICANT INCREASE, IT, IT ADDS UP ALL THE TIME.
SO I APPRECIATE, UM, YOU ALL BRINGING THIS AND, UM, I, I LOOK FORWARD TO WORKING WITH YOU.
WE, WE LOOK FORWARD TO WORKING WITH YOU ALL ON THIS.
UH, PASTOR DEB, BONO MARTIN, AND I BELIEVE YOU'RE ONLINE, PASTOR DEB, CAN YOU HEAR ME? YES, GO AHEAD.
THANK YOU SO MUCH AND BLESSINGS TO THE COUNCIL MEMBERS AND SPEAKERS.
I'M, UH, PASTOR DEB BERIO MARTIN.
I'M THE NEWLY ELECTED PRESIDENT OF SUPER NEIGHBORHOOD 45.
I REPRESENT 60,000, UH, STAKEHOLDERS TODAY IN DISTRICT H, AND OUR TERRITORY IS HALFWAY BETWEEN DOWNTOWN AND BUSH AIRPORT, SITUATED BETWEEN I 45 AND
[01:00:01]
HARDY, UH, FROM AROUND SIX 10 CROSS TIMBERS, UH, TO WEST MOUNT HOUSTON.WE REMAIN A LONGSTANDING PARKS AND ARTS AND DESERT.
OUR STAKEHOLDER ENGAGEMENT HAS BEEN ABYSMAL DUE TO 20 PLUS YEARS WITHOUT REPRESENTATION OF A SUPER NEIGHBORHOOD, SO BOTH CHRONICALLY UNDERSERVED AND UNINFORMED.
UH, I'D LIKE TO QUESTION THE CRITERIA ALSO USED TO CREATE THE PARK SECTOR SEVERITY CHART WITH 10 ACRES PER A THOUSAND RESIDENTS.
UH, AND I WASN'T EXACTLY COMPLETELY SATISFIED WITH THE ANSWERS TO THAT QUESTION OF HOW THIS CRITERIA WAS PUT TOGETHER.
UH, AS, UM, OUR TERRITORY IS DESIGNATED, UH, MODERATE, NOT HIGH OR VERY HIGH NEED, AND, UM, AND I, UH, DISPUTE THAT AND I BELIEVE WE SHOULD, UH, MAYBE HAVE A MEETING WITH OUR PARKS AND ARTS, UH, UM, COMMITTEE.
UH, I'D LIKE TO REQUEST THAT TODAY, UH, WITH COUNCIL MEMBER CASTILLO AND THE OUT LARGE, UH, MEMBERS TO MEET WITH THE PARKS AND OUR SUPER NEIGHBORHOOD PARKS COMMITTEE, UH, BECAUSE WE HAVE 20 YEARS OF CATCHING UP TO DO, AND THE APARTMENTS WE HAVE UP AND DOWN 45 ARE MOSTLY RUN DOWN AND BLIGHT, AND WE HAVE A LOT OF TRAILER PARK, UH, COMMUNITIES, UP AND DOWN AIRLINE.
UH, SO THAT'S ALL I HAVE TO SAY TODAY.
I DON'T KNOW A LOT ABOUT, UH, THE ORDINANCES AND SO FORTH.
I'M HERE JUST SPEAKING FROM THE GRASSROOTS FROM A SUPER NEIGHBORHOOD THAT CAME FROM THE RESIDENTS, AND WE NEED MORE INFORMATION ABOUT THESE SECTORS, AND I REALLY BELIEVE THE PARKS NEEDS TO PUT OUT ANOTHER SURVEY AND, UH, DO A BETTER JOB OF BREAKING DOWN THESE SECTORS.
I KNOW Y'ALL HATE TO RETURN TO CUTTING OUT A WHOLE CLOTH, BUT, UH, IN MY OPINION, UM, THE DISPARITIES IN THE DISPARITY CHART, THANK YOU SO MUCH.
THANK YOU PASTOR DEB, ALWAYS GREAT TO HEAR FROM YOU.
COUNCIL MEMBER CASTILLO HAS A A COMMENT FOR YOU.
THANK YOU CHAIR, AND THANK YOU PASTOR DEB FOR CHIMING IN AND, AND FOR ALL YOUR LEADERSHIP OUT THERE IN THE NORTHLINE AREA, GETTING THE SUPER NEIGHBORHOOD REESTABLISHED.
UM, MY OFFICE WILL BE IN TOUCH WITH YOU ABOUT FACILITATING THAT MEETING BETWEEN PARKS AND AND ARTS AND YOUR SUPER NEIGHBORHOOD.
AND WE HAVE, UM, UH, BILL KELLY ON THE, OR DOES ANYBODY ELSE WANNA SPEAK ABOUT OPEN SPACE ORDINANCE? OKAY.
ARE YOU SPEAKING ABOUT OPEN SPACE? OKAY, WE'LL HOLD TILL, UH, THE, THE LA AFTER THE LAST PRESENTATION, APPRECIATE ALL THE PUBLIC COMMENT AND WE WILL MOVE NOW TO OUR LAST AND FINAL PRESENTATION ON THE EAST WATER PURIFICATION PLANT.
AND WE HAVE DEPUTY DIRECTOR SAMIR SLANKY.
I SEE THE PUBLIC WORKS DIRECTOR, RANDY MACKEY HERE AS WELL.
YOU WANT ME TO LOWER AND YEAH.
DO YOU WANNA STAND OR, OR SIT? I CAN STAND IS FINE.
LET'S, LET'S HEAR ABOUT HOW WE'RE GONNA SPEND THESE BILLIONS OF DOLLARS.
ALRIGHT, GOOD MORNING CHAIR COUNCIL MEMBERS AND REPRESENTATIVES.
I'M THE DEPUTY DIRECTOR AND CHIEF FINANCIAL OFFICER FOR CITY OF HOUSTON PUBLIC WORKS DEPARTMENT.
LET'S GO ON TO THE NEXT SLIDE.
TODAY WE'RE GONNA TALK ABOUT THE EAST WATER PURIFICATION PLANT, AND WE, UH, UH, NAME IT EWPP.
UM, WE CAME, UH, TO COUNCIL WITH THE PRESENTATION LA APRIL OF LAST YEAR AND TALKED ABOUT THE EAST PLANT.
SO THIS IS JUST A FOLLOW UP, UH, ON THIS.
LET'S GO TO THE NEXT SLIDE, PLEASE.
SO, WE TALKED ABOUT THIS BEFORE.
THE EAST PLANT IS THE BACKBONE OF THE HOUSTON'S DRINKING WATER SYSTEM.
UM, IT TREATS MAJORITY OF THE HOUSTON AREA.
IT KEEPS THE MEDICAL CENTER, PORT OF HOUSTON, OTHER THINGS LIKE THAT DOWNTOWN, UH, RUNNING.
SO IT IS A SIGNIFICANT PART AND THE BLOODLINE FOR THE CITY OF HOUSTON.
AND IF YOU TAKE A LOOK, ORIGINALLY THE PLANT WAS BUILT IN THE 1950S AND IT'S BEEN PLANTS ONE AND TWO, AND IT'S BEEN SERVING THE HOUSTON REGION FOR OVER 70 YEARS.
UH, PLAN THREE WAS BUILT IN THE 1980S, AND AS YOU CAN TELL, JUST FROM AN AGING PERSPECTIVE, UM, HAS A LOT OF DEFERRED MAINTENANCE AND NEEDS A LOT OF WORK.
BACK IN 2021, UH, WE HAD A E COMMON ENGINEERING FIRM DO A CONDITION ASSESSMENT AND EVALUATION ON THE PLANTS.
AND WHEN YOU LOOK AT SOME OF THESE NUMBERS, THEY'RE, THEY'RE QUITE SHOCKING.
UM, LESS THAN 1% OF ASSETS AT ALL THREE PLANTS ARE ESTIMATED TO BE OPERATIONAL IN 20 YEARS.
LESS THAN 1% OF ASSETS AT ALL THREE PLANTS ARE ESTIMATED TO BE OPERATIONAL IN THE NEXT 20 YEARS.
AND THIS MAKES IT EVEN MORE CHALLENGING CONSIDERING THAT THIS ASSESSMENT WAS DONE FIVE YEARS AGO.
SO WE'RE MOVING DOWN THE ROAD HERE.
THE MAJORITY OF THE ASSETS WERE RECOMMENDED TO BE REPLACED FIVE YEARS AGO, AND THIS WAS BASED ON THE WORK IN 2021.
SO ESSENTIALLY THE ENTIRE FACILITY IS LIVING ON BORROWED TIME AS ASSETS WILL MOST LIKELY CONTINUE TO FAIL.
THE RATED CAPACITY FOR THE EAST PLANT IS TO PRODUCE ABOUT 362 MILLION GALLONS OF WATER
[01:05:01]
PER DAY.IT'S NEVER PRODUCED THAT MUCH.
UM, AVERAGE PRODUCTION IS ROUGHLY ABOUT 239 WITH MAXIMUM PRODUCTION AT 292 MILLION GALLONS PER DAY.
THAT'S A SIGNIFICANT DIFFERENCE.
IT KIND OF SHOWS YOU HOW MUCH THE PLANTS HAVE AGED.
THE GOOD NEWS IS THAT, AND YOU'RE AWARE, WE ARE PROCEEDING WITH A NEW EAST WATER PURIFICATION PLANT INCIDENT ENHANCEMENT PROJECT, AS WELL AS THE REHABILITATION OF THE THREE EXISTING PLANTS AS WELL FOR THE NEW PLANT.
THE DECISION WAS MADE TO PROCURE THE, UH, EWPP ENHANCEMENT PROJECT VIA WHAT'S CALLED A CA DELIVERY METHOD, AND THAT STANDS FOR CONSTRUCTION MANAGER AT RISK.
THE CM A DELIVERY METHOD OFFERS EARLY PROJECT DELIVERY AND SCHEDULE SAVINGS CONSTRUCTION IMPROVE FROM THE CMAR DURING DESIGN TO REDUCE RISK.
UM, IT GIVES US AN EARLIER COST CERTAINTY.
THE CM A HAS THE ABILITY TO DO A COST MODEL BASED ON THE MARKET AND ALLOW THE DESIGN TO BE ADJUSTED ALONG THE WAY AND RESPOND TO DIFFERENT COST CONSIDERATIONS.
THIS ALSO ALLOWS US TO INCREASE MARKET INTEREST FOR MAJOR CONTRACTORS THAT WILL SHOW STRONGER INTERESTS WHEN PROJECTS ARE DELIVERED, DELIVERED THROUGH COLLABORATIVE METHODS SUCH AS CA.
THIS WILL CONSOLIDATE THE EXISTING PLAN THROUGH REHAB PROJECTS UNDER THE CMAR UMBRELLA, AND WE WILL REQUEST SOME ADDITIONAL WFI FUNDING, AND I'LL TALK ABOUT WHAT THAT IS IN JUST A SECOND.
THIS WILL ALL ALLOW FOR MORE SUBCONTRACTING OPPORTUNITIES SINCE CMAR WILL DIVIDE UP THE WORK INTO MULTIPLE PACKAGES AND THE CITY HAS INPUT INTO THAT PROCESS AS WELL.
SO WE'RE LOOKING AT, WELL, WHAT HAVE WE BEEN BUILDING? NEW FACILITIES? WE'RE LOOKING AT BUILDING A 360 MILLION GALLON PER DAY, UH, FACILITY.
WITH THAT CAPACITY, IT'LL BE STATE OF THE ART FACILITIES SIMILAR TO THE CITY'S NORTHEAST WATER PURIFICATION PLANT.
IN ADDITION, EXISTING PLAN THREE WILL ALSO BE REHABILITATED AND THE CONSTRUCTION WILL ALSO BE THROUGH A CMAR PROCESS.
SO THE COMBINED CAPACITY WITH THE NEW BEING AT 360 MGD AND THE PLANT THREE REHAB WILL PROVIDE US WITH 180 MILLION GALLONS PER DAY.
THE COMBINED CAP, UH, CAPACITY WILL BE AT 540 MILLION GALLONS PER DAY.
THIS WILL MEET THE CITY'S WATER NEED DEMANDS FOR THE NEXT 40 YEARS.
THE EXISTING PLANS ONE AND TWO ARE CURRENTLY DESIGNED TO BE REHABILITATED TO SUSTAIN US UNTIL 2032.
THESE PROJECTS ARE WITHIN OUR CURRENT EXISTING CIP.
SO PLANS ONE AND TWO WILL INCLUDE THINGS LIKE MECHANICAL, ELECTRICAL AND STRUCTURAL IMPROVEMENTS INCLUDING HIGH SERVICE PUMP STATION, CHEMICAL FEED SYSTEM IMPROVEMENTS AND OTHER THINGS.
WE'RE EXPECTING THIS INFRASTRUCTURE WILL LAST LONGER THAN 40 YEARS, UH, POTENTIALLY BETWEEN 50 AND A HUNDRED YEARS.
AND THIS IS SORT OF AN OUTLINE OF WHAT THE CURRENT PLANT LOOKS LIKE.
ON THE RIGHT SIDE, YOU SEE PLANTS ONE AND TWO ON THE BOTTOM, UH, LEFT.
YOU'RE LOOKING AT THE NEW FACILITY THAT WILL, UH, PRODUCE 360 MILLION GALLONS PER DAY.
AND ON THE TOP IS PLANT THREE, WHICH ONCE WE HABILITATED, WE'LL PRODUCE 180 MILLION GALLONS PER DAY.
AND ONCE WE'RE DONE PLANS ONE AND TWO WILL BE DECOMMISSIONED.
LET'S MOVE ON TO THE NEXT SLIDE, PLEASE.
THIS IS JUST A CALENDAR OVERVIEW.
SOME OF THE MAIN THINGS TO NOTE IS THAT WE ARE LOOKING AT, UH, 180 MILLION GALLONS PER DAY TO BE OPERATIONAL BY APRIL OF 2032, AND THEN THE TOTAL OF 360 MILLION GALLONS PER DAY, UH, TO BE OPERATIONAL BY AUGUST OF 2033.
WITH A CO FINAL COMPLETION SLATED TO BE IN JANUARY OF 2034, WE'VE SELECTED A PROJECT ADVISOR TECHNICAL CONSULTANT.
UM, PRE-CONSTRUCTION SERVICES START FROM 2026 TO 2028.
THE EARLY GMP OR THE, UH, GROSS MAXIMUM PRICE PACKAGES INCLUDE EQUIPMENT PROCUREMENT, DEEP FOUNDATION WORK, AND OTHER CRITICAL PATH WORK.
LET'S GO ON TO THE NEXT SLIDE, PLEASE.
SO HERE'S A PROJECT BUDGET, AND THESE ARE NUMBERS THAT YOU'RE ALREADY FAMILIAR WITH.
UH, WE'RE LOOKING AT, AGAIN, PROJECTS ONE AND TWO.
THE ESTIMATED CMAR COSTS OF THOSE PROJECTS ARE 2.2 BILLION AND 1 BILLION RESPECTIVELY.
THEN WE HAVE CITY RECOVERY, ADMINISTRATIVE COSTS, ENGINEERING PERMITTING AND THINGS LIKE THAT, WHICH IS ABOUT 700 MILLION.
SO THE OPINION CURRENTLY OF THE PROBABLE PROJECT COST IS AT ABOUT 3.9 BILLION TOTAL WITH A B.
UM, THEN ALSO WE HAVE FINANCING COSTS AND CONTINGENCIES FOR BUDGETING, WHICH WE'RE ESTIMATING ABOUT $300 MILLION.
SO FOR THE TOTAL BUDGET FOR THE ENHANCEMENT, NOW THIS IS THE ENHANCEMENT FOR THE NEW PLANT IS ABOUT 4.2 BILLION.
UM, AND I HAD MENTIONED BEFORE THAT WE'RE ALSO WORKING ON REHABILITATING PLANT THREE.
THAT COST WILL BE ABOUT $250 MILLION FOR THAT PLANT.
SO THE TOTAL BUDGET FOR THE ENHANCEMENT AND THE REHABILITATION FOR PLANT THREE, WE'RE LOOKING AT 4.45 BILLION.
SO THIS IS THE PROPOSED FUNDING STRUCTURE AND I'M EXCITED TO SHARE THAT SINCE WE HAVE SUCH A GREAT RELATIONSHIP WITH THE TEXAS WATER DEVELOPMENT BOARD, UH, WE WERE ABLE TO SECURE $966 MILLION IN SWIFT FUNDING, UH, WHICH IS VERY SIGNIFICANT.
[01:10:01]
DOING SOMETHING A LITTLE MORE INNOVATIVE THIS TIME AROUND.WE'RE WORKING ON THE WATER INFRASTRUCTURE FINANCE AND INNOVATION ACT PROGRAM THROUGH THE FEDERAL GOVERNMENT, OR AS WE CALL IT THE WIA PROGRAM.
AND, UH, WE WERE ABLE TO SECURE A LITTLE OVER $2 BILLION IN FINANCING FOR THIS, UH, PLANT AS WELL.
THE OTHER FUNDING SOURCES, WHICH WILL BE ROUGHLY ABOUT 1.176 BILLION, THAT WILL COME FROM A COMBINATION OF CASH AND OPEN, UH, MARKET FINANCING AS WELL.
THEN ON THE PLAN THREE CMAR, WE WERE ABLE TO SECURE $123 MILLION IN FINANCING, AND ABOUT 127 MILLION WILL BE, AGAIN, A COMBINATION OF CASH AS WELL AS OPEN, UH, MARKET FINANCING.
WE'RE GONNA CONTINUE TO LOOK FOR NEW PROGRAMS FOR WATER PROJECTS, UH, THAT MAY SURFACE IN THE LATER YEARS AS WELL.
LET'S GO TO THE FUNDING DETAILS ON THE NEXT SLIDE.
AGAIN, UH, TWDB, UH, SOME OF YOU MAY BE AWARE WITH SOME OF THE BENEFITS.
UM, THE SWIFT LOAN IS AT A SUBSIDIZED INTEREST RATE, WHICH WE ENJOY 14% DISCOUNT FROM THE MARKET RATE.
THIS IS VERY SIGNIFICANT BECAUSE THIS CAN ADD UP TO TENS AND TENS OF MILLION OF CLOSE TO A HUNDRED MILLION DOLLARS OF SAVINGS JUST BECAUSE THE TWDB SUB SUBSIDIZES THESE INTEREST RATES FOR US.
UM, THIS IS A THREE YEAR MULTI-YEAR COMMITMENT TO THE CITY OF HOUSTON.
UM, WE HAVE ALREADY CLOSED ON A $350 MILLION, UH, LOAN IN NOVEMBER OF 2025.
UH, WE'RE LOOKING AT CLOSING ANOTHER $300 MILLION IN THE FALL OF 2026, AND THE BALANCE, WHICH IS REMAINING BY 316 MILLION, WILL BE SECURED ON AN AS NEEDED BASIS.
ON THE WE SIDE, IT CAN FINANCE UP TO 49% OF THE TOTAL ANTICIPATED PROJECT COST.
UH, THE GREAT PART ABOUT THIS IS IT ALLOWS US TO DEFER ANY PAYMENTS FIVE YEARS AFTER THE SUBSTANTIAL COMPLETION FOR THE PROJECT.
SO IT GIVES US A, A, A HUGE FLEXIBILITY IN TERMS OF A PAYBACK PERIOD.
UM, THE WIA COMMITMENT CAN BE USED AS AN APPROPRIATION FACILITY AS WELL.
UM, AND ALSO WE WERE GRANTED A BUILD AMERICA BY AMERICA WAIVER, WHICH ALSO HAS SIGNIFICANT COST SAVINGS UP TO 25% FOR US AS WELL.
AND THEN PLAN, UH, THREE CMAR QUALIFIES, UH, FOR WFI, WHICH WE TALKED ABOUT, WHICH IS THE $250 MILLION.
AND IT'LL BE ADDED, ADDED TO THE FINAL APPLICATION ONCE WE SUBMIT THE FINAL APPLICATION FOR WIA FINANCING.
LET'S GO ON TO THE NEXT SLIDE PLEASE.
SO ON THE PROJECT ONE, WE HAVE A DESIGN ENGINEER WHERE THE SELECTION HAS BEEN MADE, WHICH IS CDM SMITH, AND THE 94 MILLION IS TO PROVIDE PHASE ONE AND PHASE TWO SERVICES.
THE PHASE THREE SERVICES, UM, ENGINEERING SERVICES DURING CONSTRUCTION WILL BE APPROPRIATED SEPARATELY IN THE FUTURE ON THE PROJECT ONE CMAR, UH,
AND, UH, WE'LL COME BACK TO COUNCIL, UH, UM, AS TIME PROGRESSES.
AND THE PROJECT TWO C MARS ALSO TO BE DETERMINED IT'S CURRENTLY PROCUREMENT AND THIS WILL PROVIDE PRE-CONSTRUCTION SERVICES AND THE PROJECT ONE PRE GROSS MAXIMUM PRICE.
UH, UM, EARLY PACKAGES INCLUDE DEEP FOUNDATIONS, PROCUREMENT, AND OTHERS, AND QIT WAS SELECTED FOR THAT.
SO WHAT ARE THE NEXT STEPS? UM, THE W WE WORKING ON NEGOTIATING AND AWARD THE CMAR AND DESIGN CONTRACTS FOR PROJECT ONE.
UH, WE NEED TO PROCURE, SELECT, NEGOTIATE AWARD, CMAR AND DESIGNER FOR PROJECT TWO.
AND THEN WE'RE LOOKING TO SUBMIT THE APPLICATION TO WIA.
NOW, WIA PROCESS CAN TAKE UP TO A YEAR.
PROCESSING HAS BEEN A BIT SLOW DUE TO THE GOVERNMENT SHUTDOWN.
UM, THERE'S HOPE THAT THIS WILL PICK UP.
UH, THIS WILL BE A COLLABORATIVE EFFORT WITH FINANCE, THE PROJECT MANAGEMENT TEAM AND OUR TECHNICAL ADVISOR, COROLLO.
WE WILL ALSO UTILIZE MASTER MASTERON ADVISORS AND BOND COUNSEL TO OPTIMIZE WHAT THE DEBT DEBT STRUCTURE IS GOING TO LOOK LIKE TO PAY FOR THIS PROJECT.
AND THAT CONCLUDES MY PRESENTATION.
THANK YOU VERY MUCH FOR THE PRESENTATION.
YOU MENTIONED PLANT ONE AND TWO BEING DECOMMISSIONED, UM, AFTER A CERTAIN NUMBER OF YEARS, IS THERE ANY POTENTIAL FUTURE USE FOR THOSE FACILITIES AT ALL? YOU KNOW, UH, AND I, I CAN LET SOME OF THE ENGINEERS ANSWER THIS QUESTION, BUT YOU KNOW, WE'VE DONE A THOROUGH ANALYSIS AND THIS IS THE BEST APPROACH FORWARD US TO DECOMMISSION PLANTS ONE AND TWO, JUST BECAUSE OF THE SIGNIFICANT AGING OF THE PROJECT.
UH, NEW INFORMATION, ACTUALLY, UH, VERY RECENTLY AS THAT EVALUATION'S GONE THROUGH, WE'RE NOT GOING TO DECOMMISSION PLANTS ONE AND TWO SAMIR TO KNOW ABOUT THAT.
UH, THAT'S VERY, VERY FRESH FOR US, BUT WE'RE, WE'RE ACTUALLY NOT GOING TO DO THAT.
WE DO FIND THAT THERE'S GONNA BE SOME VALUE AS WE GO THROUGH THE REHAB EFFORTS THERE TO MAKE SURE THAT IN THE EVENT OF UNLIKELY CATASTROPHES, THAT THERE'S STILL SOME EXTRA, UH, REDUNDANCY AND RESILIENCY THAT I, I APPRECIATE THAT.
AND THAT'S ONE OF THE THINGS THAT I WAS THINKING IF WE'RE PUTTING DOLLARS IN NOW TO EXTEND THE LIFE, CORRECT, WE'RE ONLY GONNA EXTEND THE LIFE FOR JUST A HANDFUL OF YEARS AND THEN THEY GO AWAY.
UM, MY OTHER QUESTION ON SLIDE 10, THE TARGETING COMPLETION BY 2034.
[01:15:01]
SO WHAT, WHAT WORK IS CURRENTLY BEING DONE RIGHT NOW AT THE PURIFICATION PLAN? SO CURRENTLY, AND I, I'LL ASK MARCUS TO STEP UP HERE PLEASE.CURRENTLY, AS MY UNDERSTANDING, WE ARE A COUPLE OF THINGS THAT ARE GOING ON.
WE'RE LOOKING AT, UM, UM, ANALYZING THE, THE, THE, THE, THE NEW FACILITIES.
FOR EXAMPLE, WE'RE WORKING WITH OUR PO UH, PROJECT ADVISOR TECHNICAL CONSULTANT TO SEE HOW WE'RE GONNA BUILD OUT THIS NEW FACILITY, BUT ALSO AT THE SAME TIME, CONTEMPORANEOUSLY, WE'RE WORKING ON THE REHABILITATION FOR PLANT THREE.
SO THAT, AND ALSO PLANTS ONE, TWO, AND THREE, EXCUSE ME.
SO THAT KIND OF GETS US THROUGH THE TIMELINE WHERE IT KEEPS THE PLANT RUNNING UNTIL THE NEW FACILITIES ARE DELIVERED.
SO, UH, MARCOS, IF YOU WANNA JUMP IN HERE REALLY QUICK.
CURRENTLY, UH, MARCO MADIA, ASSISTANT DIRECTOR, HOUSTON PUBLIC WORKS.
UH, TO ANSWER YOUR QUESTION ON THE REHAB SIDE, WE ARE CURRENTLY DESIGNING PLANT ONE AND TWO AND PLANT THREE AS WELL.
AND PLANT ONE AND TWO IS GONNA BE READY FOR CONSTRUCTION SOMETIMES WITHIN SIX MONTHS.
THAT'S THE TIMELINE FOR THE REHAB ON THE ENHANCEMENT.
WE ARE CURRENTLY NEGOTIATING WITH CDM SMITH AND WE ARE HOPING THAT'S GONNA BE ON COUNCIL NEXT MONTH.
SO THE WORK, THE WORK THAT'S BEING DONE NOW, IS THIS, IS THIS PART OF THE LAWSUIT THAT WE'RE IN OVER WHAT'S GOING ON WITH THE PURIFICATION PLAN? THAT IS SEPARATE? THAT IS SEPARATE.
SO THAT DOESN'T IMPACT THIS AT ALL? NO, NO.
UH, DIRECTOR, THANK YOU FOR THE PRESENTATION.
UH, I THINK Y'ALL PRESENTED LAST YEAR ON, ON THE STATE OF THIS PARTICULAR PROJECT.
ARE THERE ANY SIGNIFICANT CHANGES IN YOUR MIND FROM WHAT WAS PRESENTED LAST YEAR TO THIS YEAR? NO SIGNIFICANT CHANGES.
I THINK, UH, WHAT WE COMMUNICATED LAST TIME, WHAT WE'VE BEEN TRYING TO COMMUNICATE IS THE, THE SIGNIFICANT NEED OF, UH, OF A NEW PLANT AND THE RISK THAT WE'RE IN THAT STAYS THE SAME.
AND I THINK WE PRESENTED A COST STRUCTURE THAT SAID IT'LL BE FROM THIS TO THE, TO THIS.
THE COST STRUCTURE HAS STAYED THE SAME.
OUR APPROACH HAS STAYED THE SAME.
THERE'S SOME, YOU KNOW, SOME, UM, UM, UM, OTHER DECISION MAKING THAT TAKE PLACE.
AGAIN, I JUST FOUND OUT ABOUT PLANS ONE AND TWO, IT'S GOING TO BE CONTINUE TO BE OPERATIONAL.
UH, UH, WHAT WE'VE STATED BEFORE, UH, SIGNIFICANT OF THIS PROJECT HAS STAYED THE SAME.
AND, AND LAST YEAR I THINK THERE WAS DISCUSSION ABOUT POSSIBLY COMING BACK TO COUNCIL FOR COUNCIL FOR CONSIDERATION OF WATER RATE INCREASES.
IS THAT, IS THAT RIGHT? AS FAR AS THIS PLANT'S CONCERNED? YES.
UH, SO WE'RE UNDERGOING A COST OF SERVICE STUDY RIGHT NOW.
UH, AND MORE THAN LIKELY THIS PROJECT WILL INCREASE THE COST OF SERVICE OR THE RATES, UH, TO THE RATE PAYERS.
BUT THE GOOD NEWS IS THIS IS A LONG-TERM PROJECT THAT'S SLATED TO BE COMPLETED BY 28 34 AND USING INNOVATIVE FINANCING SUCH AS WIA ALLOWS US TO STRUCTURE THE FINANCING IN SUCH A WAY SO THAT IT DOESN'T CREATE A RATE SHOCK FOR THE RATE PAYERS.
IT KIND OF PUSHES HER OVER A LONGER PERIOD OF TIME.
AND DO YOU KNOW AT WHAT POINT Y'ALL MIGHT COME BACK FOR, FOR COUNCIL CONSIDERATION OF THAT? SO AGAIN, THIS IS GONNA BE BASED ON PHASES.
SO WE HAVE, YOU KNOW, UP TO THE NEXT, UH, UH, THREE TO FOUR YEARS, WE'RE CURRENTLY DOING COST OF SERV SERVICE STUDY RIGHT NOW.
AND SOME OF THE COSTS AND THE FINANCING COSTS OF THE EAST WATER PURIFICATION PLAN WILL BE INCLUDED IN THIS COST OF SERVICE STUDY.
AND I BELIEVE WE'RE GONNA BE COMING BACK TO COUNCIL IN 2000, EARLY 2027 TO CONSIDER A, UH, NEW PROPOSED RATE STRUCTURE.
AND THERE WAS, THERE WAS DISCUSSION EARLIER ABOUT IN, IN OUR CUS WE HAVE ABOUT $1.3 BILLION, IS THAT CORRECT? $1.3 BILLION.
UH, AND I WANTED TO CLARIFY THAT, UH, A LOT OF THAT WE HAVE INTERNAL REQUIREMENTS FOR CASH RESERVES.
WE HAVE, UH, FINANCING THAT'S SET ASIDE FOR BOND AND DEBT SERVICE PAYMENTS.
AND THAT'S WHAT MAKES UP THAT TOTAL AMOUNT.
AND, AND PART OF THE DISCUSSION WAS THAT WE LACK THE CAPACITY, IN OTHER WORDS, THE PER PERSONNEL TO SPEND DOWN THAT MONEY.
IS THAT CORRECT OR DO I HAVE THAT WRONG? UM, NOT SURE IF THAT'S THE ISSUE.
I THINK, UM, WE, WE HAVE A HOLISTIC PLAN TO ADDRESS A LOT OF THE NEEDS OF THE INFRASTRUCTURE WITHIN THE UTILITY, AND THAT'S THE PLAN TO DO SO OVER THE NEXT SEVERAL YEARS.
AND AGAIN, IT, UM, YOU KNOW, HAVING LESS PERSONAL, THAT'S BEEN AN ISSUE ACROSS THE CITY.
UM, AND SO WE'RE LOOKING AT IT, WE'VE ACTUALLY BEEN HIRING QUITE A FEW MORE PEOPLE TO DELIVER SOME OF THESE PROJECTS.
BUT, UM, AND ALSO THERE HAVE BEEN CHALLENGES WITH SOME OF THE CONTRACTORS, UH, TO GET TO ON BOARD TO DO SOME OF THE PIPE REPLACEMENT WORK AND THINGS LIKE THAT.
BUT WE'RE MAKING HEADWAY ON THAT AND WE'RE FULLY COMMITTED TO DELIVERING THOSE PROJECTS OVER THE NEXT SEVERAL YEARS.
AND, AND I'D LIKE TO KNOW IS ANY OF THAT 1.3 BILLION SLATED FOR THIS PARTICULAR PROJECT? THE, UH, AND I WOULD PUT IT THIS WAY, THE, THE 1.3 BILLION, I MEAN, IT'S A COMBINATION OF, YOU KNOW, THINGS THAT ARE APPROPRIATED FOR DIFFERENT PROJECTS THAT INCLUDES CONSENT DECREE, THAT INCLUDES PIPE REPLACEMENT, VARIOUS DIFFERENT THINGS WITHIN THE COMBINED UTILITY SYSTEM.
UH, AND I WILL TELL YOU THAT WE DID BUILD INTO THE PRIOR RACE STRUCTURE A CERTAIN AMOUNT FOR THE EAST WATER PURIFICATION PLANT, AND WE'RE COMING BACK AND BUILDING THE ADDITIONAL AMOUNTS AS WE HAVE BETTER INFORMATION.
SO THERE'S A PORTION THAT'S BEEN BUILT IN.
ALRIGHT, I'LL GO BACK IN THE QUEUE.
DID I HEAR YOU SAY EARLY 2027 YOU'RE COMING BACK WITH THE RIGHT STUDY
[01:20:01]
CUSTOMER SERVICE INFORMATION, CORRECT? WE'RE DOING THE, YES.UM, AND I'LL JUST, JUST SINCE WE'RE ON THAT TOPIC, UM, SO ALREADY, UM, SITU HAVE ALREADY SEEN A DOUBLE INCREASE ON THEIR WATER BILL BECAUSE OF THE CONSENT DECREE.
UM, WE'RE ALREADY ATTACKING A LOT OF THOSE PROJECTS.
I HAD ASKED A QUESTION A YEAR OR SO AGO NOW THAT WE'RE NOT GONNA BE DOING AS MUCH, UH, UPGRADE.
RIGHT? WE DO STILL HAVE MAINTENANCE.
WILL THERE BE A LOWER, UH, UH, WELL, WE WOULD BE ABLE TO LOWER THE, THE, UH, THE WATER, THE, THE FEE FOR WATER.
AND NOW WE'RE LOOKING AT ANOTHER INCREASE.
SO, UM, MY HOPE IS THAT Y'ALL DEFINITELY TAKE IN CONSIDERATION WHERE WE ARE NOW.
UM, AND HOPEFULLY IT'S NOT ANOTHER DOUBLE INCREASE ON WHAT THEY HAVE RIGHT NOW.
'CAUSE FOLKS THAT WERE PAYING 30 TO 40 ARE NOW CLOSE TO A HUNDRED DOLLARS NOW.
AND SO THOSE ARE REAL CONCERNS THAT CONSTITUENTS HAVE.
UM, THE, THE OTHER, UH, THING I WANTED TO, UH, SPEAK TO, YOU MENTIONED THAT THE, THERE'S GONNA BE, UH, PACKAGES FOR SUBCONTRACTORS.
DO YOU KNOW WHAT THAT AVERAGE, YOU KNOW, PACKAGE WOULD PROBABLY BE? MAKING SURE THAT AS SUBCONTRACTORS, SMALL BUSINESSES, THAT THEY ALSO HAVE AN OPPORTUNITY TO PARTICIPATE.
UM, YOU KNOW, AND THE OTHER, ALONG WITH THAT, IT'D BE GREAT FOR THE PRIME TO MAKE SURE THAT THEY'RE OUT AND PROACTIVELY, UH, HAVING CONVERSATIONS WITH, UH, OUR, OUR, OUR SUB SUBCONTRACTORS AS WELL.
JUST TO ADD ON THAT, YOU KNOW, THIS IS A, UH, A CMAR DELIVERY, WHICH IS CONSTRUCTION MANAGER AT RISK.
THE CONTRACTOR IS GONNA PACKAGE, UH, A PORTION OF THE WORK.
YOU KNOW, UH, SOMETIMES, YOU KNOW, EARLY ON THE DESIGN, YES, THOSE PACKAGES ARE GONNA BE OUT AND THE CONTRACTING COMMUNITIES HAVE, WILL HAVE THE OPPORTUNITY TO BE IT BASED ON THE TYPE AND THE SIZE OF THE PROJECT.
SO IT'S HARD TO REALLY KIND OF PUT A NUMBER TO WHAT THE AVERAGE NUMBER'S GONNA BE, JUST DEPENDS ON THE TYPE OF WORK THAT'S BEING DONE, THE TYPE OF WORK THAT'S NEEDED, AND WHAT THE SUBCONTRACTING COMMITTEE CAN PROVIDE.
SO IT'S HARD TO SAY THIS IS WHAT THE NUMBER'S GOING TO BE, BUT THERE'LL BE PLENTY OF OPPORTUNITIES FOR SUBCONTRACTORS TO BID ON THE RELATED WORK, UH, TO THE CMAR.
AND I THINK FOR ME IT'S, I JUST WANNA MAKE SURE THAT, AND I GET IT, THERE'S MID-LEVEL COMPANIES AS WELL, BUT THAT THOSE VERY SMALL BUSINESSES THAT CAN PARTICIPATE, THAT THEY ALSO PARTICIPATE, ESPECIALLY IF THEY'RE HOUSTON BASE RECYCLING, THOSE DOLLARS ARE IMPORTANT, UM, FOR ME JUST TO MAKE SURE THAT, YOU KNOW, THOSE ARE THE REALLY THE BACKBONE OF OUR COMMUNITY IS THEY HIRE THE FOLKS IN THE NEIGHBORHOOD.
SO JUST WANNA MAKE SURE THAT WE ARE COGNIZANT OF THAT AS WELL.
AND, AND COUNCIL MEMBER, LET ME JUST ADD ON THIS.
IT'S SO HARD TO SIT ON THE EDGE OF THE SEAT, RIGHT? BUT, UM, UH, ONE OF THE BEAUTIES OF THE CMAR DELIVERY IS THAT IS ACTUALLY GREATLY IMPROVES OUR PROCUREMENT METHODOLOGY THAT WILL OPEN UP THE POOL TO MORE FOLKS, RIGHT? WE, WE HAVE WITHIN THE CITY, UM, SOME RESTRICTORS THAT MAKE IT HARDER FOR, ESPECIALLY THE SMALLER COMPANIES IN TERMS OF BOND REQUIREMENTS AND SO FORTH.
THE CMAR LITERALLY THE CONSTRUCTION MANAGER AT RISK BY TAKING ON SOME OF THAT RISK ALSO IS ABLE TO MAKE SURE THAT THEIR POOL IS BIGGER.
AND THAT'S BEEN ONE OF THE BIG DESIRES WE'VE HAD ALL ALONG, IS THIS IS A GREAT OPPORTUNITY TO GET MORE PEOPLE ENGAGED IN CITY WORK, HELP THEM CUT THEIR TEETH, UH, PROVE TO US, IN FACT, IN A LOT OF AREAS THAT THEY'LL BE ABLE TO DO OTHER STUFF BEYOND JUST THESE PARTICULAR PROJECTS AND, AND ALSO MAKE SURE THAT THE WHOLE THING GOES A LOT FASTER.
KIND OF PICKING UP ON RANDY'S COMMENTS THERE.
UH, I MET WITH A CONSTRUCTION COMPANY I THINK ABOUT A YEAR, YEAR AND A HALF AGO, AND WE HAD A DISCUSSION ABOUT THIS PROJECT, AND PART OF THE DISCUSSION WAS THAT THIS PROJECT IS SO LARGE, THERE WASN'T A LOT OF COMPANIES IN THE COUNTRY THAT WERE ABLE TO DO IT, ESPECIALLY GIVEN THE BONDING CAPACITY AND WHETHER OR NOT THEY HAD ANOTHER PROJECT SOMEWHERE ELSE.
SO WHATEVER HELP WE CAN GET WITH THAT, THAT THAT'D BE GREAT.
IN 2021, WE SAID 48% NEEDED TO BE REPLACED WITHIN FIVE YEARS.
HOW MUCH HAS BEEN REPLACED? WHAT, UH, AS I MENTIONED EARLIER, WE HAVE THREE PACKAGES CURRENTLY IN DESIGN AND ONE OF THE PACKAGES APPROACHING TO GO TO CONSTRUCTION.
YES, WE HAVE NOT REPLACED ANY SIGNIFICANT, YOU KNOW, EQUIPMENT YET, BUT WE ARE ON TRACK TO DO THAT.
SO ZERO HAS BEEN REPLACED AND, AND THIS ISN'T, I MEAN, THIS GOES BACK TO 2021.
SO I MEAN, THIS ISN'T ALL AT, YOU KNOW, THE DOORSTEP HERE, BUT IT CERTAINLY SHOWS HOW FAR BEHIND THE EIGHT BALL WE ARE RIGHT NOW.
THE NATURE OF THE, THE PROCUREMENT TAKES SOME TIME.
AND ALSO THE DESIGN PROCESS TAKES, YOU KNOW, TWO, TWO TO THREE YEARS.
I THINK, I BELIEVE, YOU KNOW, WE ARE APPROACHING THE, TO GO TO CONSTRUCTION ON ONE OF THE PACKAGES.
THANK YOU, DIDI, WITH MAYOR PRO TE'S OFFICE.
THANK YOU CHAIR AND CHIEF SLANKY, THANK YOU FOR THE PRESENTATION.
MAYOR PRO TEM TEX TATUM IS LISTENING, UM, ONLINE AND ASK THIS QUESTION.
WILL, HOW WILL THE MWBE PARTICIPATION OF THESE BILLIONS OF DOLLARS, UM,
[01:25:01]
OF ALLOCATION, HOW WILL THAT WORK? THAT IS A GREAT QUESTION.UH, ESPECIALLY WITH WHAT'S GOING ON IN THE STATE.
I THINK THE FOCUS HAS KIND OF BEEN A LITTLE BIT MORE ON THE SMALL BUSINESS ENTERPRISE.
UM, SO THERE'LL BE A, UH, I BELIEVE A PORTION OF THE CON CON PORTION OF THE CONTRACTS THAT WILL BE ABORTED.
FROM THAT PERSPECTIVE, I CAN'T SPEAK ON THE NWBE PARTICIPATION BECAUSE THERE'S SO MANY CHANGES THAT ARE HAPPENING, UH, UH, DIRECTLY FROM THE STATE.
UM, I WOULD HAVE TO DEFER THAT QUESTION TO SPD, UH, TO GET A BETTER INFORMATION ON THAT.
AND WILL YOU KEEP ABREAST, UM, OF THAT INFORMATION? ABSOLUTELY.
AND COUNCIL MEMBERS, THANK YOU.
THANK YOU FOR THE PRESENTATION.
AND IT'S GOOD TO HEAR THAT WE ARE MOVING, UM, IN A DIRECTION WITH CONDITION OF THAT WATER PLANT.
UH, THOSE OF US WHO WENT OUT TO VISIT IT IS, YEAH, DEFINITELY IN DIRE STRAY.
A QUESTION, UM, COUNCIL MEMBER, UM, MARTINEZ WAS ASKING ABOUT THE RATES THE PARTICULAR EARLY 27TH, AND OF COURSE WE DO KNOW THAT WATER BILLS AND QUESTION OF WATER BILL RATES IS ALWAYS ON MOST OF RESIDENTS CONCERN.
WHAT IS THE NUMBER LISTING OF BUSINESSES THAT BUY THE WATER? THAT'S, THAT LIST IS APPROXIMATELY HOW MANY IS IT NOW? UM, I I I CAN TELL FROM HOUSTON, WELL, I CAN TELL YOU THAT THE, THE WAY WE LOOK AT IT IS WHERE THE MAJORITY OF THE REVENUES ARE COLLECTED.
I CAN TELL YOU THAT SINGLE FAMILY IS ABOUT 70% TO 80% OF THE USAGE, UM, ON THE, ON THE, ON THE WATER SIDE.
AND ROUGHLY ABOUT 20% IS THE COMMERCIAL, INDUSTRIAL, AND OTHER USERS.
20% ROUGHLY OF THE INDUSTRIAL SIDE, RIGHT? CORRECT.
SO THE ADJOINING AREAS, WHO YOU GET OUR WATER SPEAKING THE AREAS OUTSIDE OF THE HOUSTON PLACE, RIGHT.
THAT THEY FALL IN THAT 20% OR IN THE 80%? SO THE, WE HAVE DIFFERENT, UM, AGREEMENTS OF THE FOLKS THAT ARE OUTSIDE, UH, SOME OF THE OTHER CITIES, LEAGUE, CITY, OTHER, YOU KNOW, UH, FRIENDSWOOD, WE HAVE A CONTRACTUAL AGREEMENT WITH THEM MM-HMM
AND SO THERE'S A DIFFERENT COST STRUCTURE BECAUSE THEY SHARE IN THE PLAN.
AND SO WE HAVE A CONTRACT IN TERMS OF HOW MUCH, UH, THE COST SHARING TAKES PLACE WITH THOSE OUTSIDE ENTITIES, IF THAT MAKES SENSE.
SO DOES THAT CONTRACT RUN OUT IN A PERIOD OF TIME DURING THE CONSTRUCTION? UH, OF ALL OF THIS IS THOSE, THOSE CONTRACTS COME TO AN END OR CLOSE TO AN END, OR WE MAY HAVE AMENDMENTS ON THOSE CONTRACTS FROM TIME TO TIME.
YEAH, BUT AGAIN, I'M GONNA GIVE YOU AN EXAMPLE OF THE SOUTHEAST WATER PURIFICATION PLANT.
WE HAVE A LOT OF, UH, DIFFERENT ENTITIES THAT ENJOY IT.
SO WE HAVE A CERTAIN PERCENTAGE OWNERSHIP IN THE PLANT THAT PROVIDES WATER TO THE CITY OF HOUSTON.
UH, AND THE OTHER PERCENTAGE, YOU KNOW, PROVIDES WATER TO THESE SEPARATE DIFFERENT ENTITIES.
AND THAT'S ALL BASED ON CONTRACTUAL, UH, AGREEMENTS AND HOW THE COST IS SHARED FOR THAT PARTICULAR PLANT.
UM, YOU KNOW, FOR THE NORTHEAST WATER PURIFICATION PLANT, FOR EXAMPLE, WE ENJOY 32% OWNERSHIP IN THE PLANT.
AND SO WE TAKE 32% OF THE WATER.
THE OTHER REST OF THE COST BELONGS TO THE OTHER ENTITIES THAT SHARE IN, UH, UH, THE WATER PRODUCTION OF THAT PLANT.
SO THE NORTHEAST, AND THEN I'LL END MINE HERE.
THE NORTHEAST THAT COVERS THE AREA.
WHERE'S THE CUTOFF? 'CAUSE I KNOW THE, THE EAST, THE ONE WE WENT TO VISIT, THAT GOES ALL THE WAY WEST.
RIGHT? THE SUPPLY OF WATER'S GOING ALL THE WAY TO THE WEST SIDE OF THE CITY.
YEAH, THE EAST WATER PLANT COVERS MAJORITY OF THE CITY.
AND HOW MUCH MAJORITY OF THE, I CAN SAY 85% OF THE WATER IS COMING FROM EAST WATER.
AND NORTH IS PRIMARILY PROVIDING WATER TO ADJACENT AUTHORITIES.
AND WE DO RECEIVE, UH, SOMEWHERE AROUND 16 TO 20% WATER FROM NORTHEAST AS WELL.
AND I MISSPOKE EARLIER, I APOLOGIZE.
I BELIEVE THE NORTHEAST PLANT, WE HAVE A 16% SHARE IN THAT 16 YEAH, 16%, NOT 32.
AND, AND THE, THE BEAUTY OF THE CMAR RIGHT, IS YOU GET THE GUARANTEED MAXIMUM PRICE, CORRECT? CORRECT.
AND WE USED A CMR IN THE NORTHEAST.
WE, WE USE A, WAS IT A DESIGN BUILD OR DESIGN BUILD? DID WE DO DESIGN? WHAT DID WE DO ON THE NORTHEAST? PROGRESSIVE DESIGN.
PROGRESSIVE DESIGN BUILD IS USED NORTHEAST PROGRESS DESIGN BUILD.
'CAUSE THAT COST KEPT GOING UP AND UP AND UP AND UP AND UP AND, AND THE GUARANTEED WE PROBABLY PAY A LITTLE EXTRA BECAUSE WE'RE THE, THE, THIS TYPE OF CONTRACT IS, IS TAKING ON THAT RISK OF THAT GUARANTEED MAXIMUM? THAT IS CORRECT, YES.
IT GIVES US, YOU KNOW, SORT OF A CERTAINTY OF COST AS WELL.
AND, UM, EARLY DELIVERY THAT OUTWEIGHS THE ADDITIONAL COST.
AND ON THE CHART WITH THE AECOM, KIND OF ALONG THE LINES OF COUNCIL MEMBER FLICKINGER QUESTIONS, THERE HAS BEEN SOME WORK DONE THERE IN THE LAST FIVE YEARS OUT AT, I MEAN, WE'VE APPROVED WORK, YOU KNOW, WE'VE APPROVED STUFF.
[01:30:01]
SO THAT, BUT THAT JUST WASN'T ASSOCIATED WITH THESE PROJECTS? NO, IT WAS JUST LIKE BANDAID KIND OF STUFF THAT WE WERE DOING.THERE IS ALWAYS BANDAID, RIGHT? ACTIVITY WITHIN THE PLANT? UH, YES, THERE ARE SOME, YOU KNOW, ACTIVE CONTRACTS CURRENTLY GOING ON, BUT THESE ARE THE THREE PACKAGES, PLANT ONE, TWO, AND THREE.
THOSE ARE THE PROJECT WE IDENTIFIED ONCE AFTER THIS ASSESSMENT IS COMPLETE IN 2021.
AND SAMIR, REALLY, UM, PROUD OF YOU GUYS FOR GETTING THE, THE SWIFT LOAN AND, UH, CREATIVE, YOUR BEING ON THAT.
THAT'S, THAT'S BEEN SUCH A GOOD PROGRAM FOR THE CITY OF HOUSTON.
AND ON THE WIA, THIS IS A NEW DEAL, RIGHT? IT IS NEW AND IT, WE HAVE IT IN THE BAG, BUT WE'RE STILL APPLYING FOR IT OR
YEAH, WE, WE, WE GOT SOME PRELIMINARY APPROVALS AND COMMITMENTS FROM WIA AND NOW WE JUST NEED TO GO THROUGH THE, THE, THE FORMAL PROCESS OF SUBMITTING AN APPLICATION.
BUT WE, WE WE'RE COUNTING ON THAT, GETTING THAT ABSOLUTELY A HUNDRED PERCENT.
AND, UM, SO, SO THE SITUATION RIGHT NOW IS, IS A BIT ON THE PRECARIOUS SIDE.
DOES THE CITY HAVE A PLAN, UH, IN CASE OF A FAILURE OF THIS PLANT? YOU KNOW, WHAT WOULD WE DO IN, IN THAT EVENT? THAT'S, UH, MARK WHAT YOU WANNA
YEAH, NO, AND I THINK, UM, YOU KNOW, IT'S IMPORTANT FOR US TO PRESENT THE FINANCIALS SO THAT YOU'RE ALL AWARE OF WHAT IT'S GOING TO COST.
BUT THERE ISN'T, THIS IS NOT AN OPTIONAL PROJECT, LIKE AT ALL.
UH, THE RISK IS IF THE EAST PLANT FAILS, IT'S NOT, WE HAVE A BOIL WATERS, WE HAVE NO WATER, RIGHT? THAT'S LITERALLY AT THE EAST, UH, IS 60% OF OUR DAILY PRODUCTION EVERYWHERE.
IT INCLUDES THE MEDICAL CENTER, INCLUDES ALL OF INDUSTRY.
SO IT'S ACTUALLY NOT EVEN A HOUSTON PROBLEM.
IT'S REALLY ACTUALLY A NATIONAL PROBLEM BECAUSE OF THE IMPACT THAT YOU HAVE TO INDUSTRY ALONE, UH, ACROSS THERE.
SO, UM, THE BANDAIDS THAT WE CONTINUE TO PUT ON THERE, THEY'RE THE STRONGEST ONES THAT WE CAN FIND.
AND WE'RE AS EXPEDITIOUS AS WE CAN BE.
BUT, UH, WHEN FOLKS ASK ME WHAT KEEPS ME UP AT NIGHT, THIS IS IT.
UM, LITERALLY THIS IS THE ONE THING THAT, THAT KEEPS ME UP AT NIGHT.
AND SO CMAR FOR US, UH, YEAH, THERE'S SOME EXTRA COSTS, BUT SPEED IS THE NAME OF THE GAME HERE BECAUSE WE ALREADY KNOW THAT WE'RE STARTING FROM BEHIND THE CURVE AND WE'VE GOTTA GET THERE AS FAST AS WE POSSIBLY CAN.
UH, WE DON'T HAVE 10 YEARS TO BUILD THIS.
WE'RE SO ALL HASTE AND THAT'S THE NAME OF THE GAME FOR US.
WE SIMPLY HAVEN'T PAID EXTRA THAT BECAUSE CORRECT.
YOU KNOW, IF WE'D HAVE DONE THIS 10 YEARS AGO AND, AND A LOT OF PEOPLE TALKED ABOUT IT RIGHT BACK THEN, BUT, UM, IT, IT'S A BIG PROJECT AND IT'S A CHALLENGING PROJECT AND IT'S A COMPLICATED PROJECT.
WELL, THE TIME IS NOW, SO WE'RE GONNA DO IT.
AND, AND, AND I THINK EVERYBODY AT THIS TABLE UNDERSTANDS THIS IS NOT OPTIONAL.
YOU KNOW, WE, WE HAVE TO DO THIS AND AS QUICKLY A AS WE CAN, SO WE SHOULD ALL BE PRAYING EVERY NIGHT THAT, THAT THIS I DO THIS, UH, THIS HOLDS UP.
UM, I, MY UNDERSTANDING IS THAT WE MIGHT BE FURTHER ALONG IN THE DESIGN PROCESS.
IS THAT CORRECT? I WOULDN'T SAY THAT WE'RE FURTHER ALONG IN THE DESIGN PROCESS.
WHAT I WILL SAY IS THAT WE'RE MOVING AT A SPEED THAT WE'VE NEVER MOVED AT BEFORE MM-HMM
AND, AND THAT IT'S BOTH REFRESHING.
UH, IT'S EXCITING, IT'S A LITTLE BIT SCARY, UM, BUT IT REQUIRES A LOT OF EXTRA WORK ON THIS.
YOUR QUESTION PREVIOUSLY ABOUT, YOU KNOW, AT LEAST TO, TO THE EXISTING CUS FUND BALANCE ON CAPACITY.
THERE'S STILL A LOT OF TRUTH TO THAT, RIGHT? WE ARE IN THE PROCESS OF, WE'VE GOTTA MAKE SURE THAT WE HAVE INTERNAL FOLKS THAT ARE ABLE TO HANDLE PORTIONS OF THE PROJECT AS THEY GO ALONG.
MARCOS CAN'T DO IT ALL BY HIMSELF FOR SURE.
UM, THAT'S WHY IN FACT WE SPLIT THIS INTO TWO DIFFERENT C MARS, THE PROJECT BEING AS LARGE AS IT IS.
AND WE'VE HAD A LOT OF CON UH, CONVERSATIONS ABOUT WHAT THAT WOULD LOOK LIKE.
BUT, UM, YOU KNOW, THIS IS THE GREAT OPPORTUNITY.
YOU NEVER LET A GOOD CRISIS GO TO WASTE.
AND FOR US, THAT'S WHAT THIS HAS BEEN.
IT'S A GREAT OPPORTUNITY TO RETOOL OUR OPERATIONS, LOOK AT HOW WE APPROACH PROCESS, PROCEDURE, MAKE SURE THAT WE'RE AS EFFICIENT AS WE CAN BE.
WE'VE GOT THE RIGHT PEOPLE, WE ENGAGE THE RIGHT PARTNERS, WE INFORM ALL OF THE STAKEHOLDERS WE WANT TO BE AS AHEAD OF EVERYTHING THAT WE POSSIBLY CAN BE.
AND IF WE DO GET AHEAD OF SCHEDULE, THAT'S WONDERFUL.
BUT RIGHT NOW, IF WE CAN JUST STAY ON SCHEDULE, I THINK WE'LL BE OKAY.
AND IF WE DO GET AHEAD OF SCHEDULE IN DESIGN, WILL WE, WOULD WE BE ABLE TO START CONSTRUCTION EARLIER? THERE'S A LOT OF DIFFERENT ELEMENTS IN THERE, RIGHT? SO YOU COULD HAVE DESIGN COMPLETED, BUT YOU KNOW, WE STILL HAVE TO GO THROUGH THINGS LIKE PERMITTING WITH THE ARMY CORPS AND OTHERS.
SOME OF THOSE THINGS ARE NOT TOTALLY WITHIN OUR CONTROL.
UM, BUT AT ANY OPPORTUNITY WE HAVE TO MOVE AHEAD.
WE WILL TAKE ADVANTAGE OF THAT OPPORTUNITY.
ALRIGHT, I'LL GO BACK IN THE QUEUE YOU'RE IN.
WELL, DIRECTOR MACKAY, SINCE YOU'RE UP.
SO WE'VE BEEN TALKING ABOUT WATER RATES AND, UH, THE PROSPECT OF ADDITIONAL WATER RATE INCREASES.
AND YOU AND I HAVE SPOKEN BEFORE ABOUT THE LONG TERM CONTRACTS.
WE HAVE TO PROVIDE WATER FOR FOLKS WHO LIVE OUTSIDE THE CITY.
I, IF I RECALL, YOU KNOW, CITY OF 2.3 MILLION RESIDENTS, BUT WE PROVIDE WATER FOR MORE THAN 5 MILLION PEOPLE.
REALLY, REALLY MORE THAN 6 MILLION.
YOU KNOW, WE HAVE A SERVICE AREA.
IF YOU WERE TO CONSIDER, HOW FAR DOES HOUSTON WATER GO? SO, YOU KNOW, YOU'RE
[01:35:01]
LOOKING AT 2,400 SQUARE MILES.IT'S, IT'S AN ABSOLUTELY ENORMOUS AREA OF PEOPLE THAT IN ONE SHAPE, FORM OR FASHION RECEIVE THEIR WATER FROM THE CITY OF HOUSTON.
WHETHER IT'S TREATED OR WHETHER IT'S RAW WATER TO ANOTHER, UH, YOU KNOW, DISTRIBUTOR.
UM, WE'RE VERY SENSITIVE TO THIS PARTICULAR RATE STUDY THAT'S GOING ON RIGHT NOW, AND WE'RE HAVING VERY CAUTIOUS CONVERSATIONS ABOUT SOME OF THE EXPECTATIONS, PARTICULARLY BECAUSE WE KNOW OF WHAT THE EXPENSES COMING UP ARE.
UM, IN MANY INSTANCES WE'RE ALSO MAKING SURE THAT WE'RE NOT JUST LOOKING AT HOW MUCH WE'RE CHARGING, BUT HOW ARE WE CHARGING THAT TO FOLKS, RIGHT.
FOR INSTANCE, ONE OF THE THINGS THAT DRIVES ME NUTS AND HAS BOTHERED ME FROM DAY ONE IS THAT I, I THINK IT'S REALLY DIFFICULT FOR THE AVERAGE, UH, CUSTOMER TO RECREATE THEIR BILL ON THEIR OWN.
UM, THE, THE EXISTING FORMULA AND THE STRUCTURE IN THERE MAKES IT HARD FOR YOU TO SAY, WELL, I USE THIS MANY GALLONS.
HOW MUCH IS IT GOING TO BE? THERE'S A ALGORITHM THAT YOU'VE GOTTA FIGURE OUT HOW TO PROCESS.
AND SOMETIMES EVEN THE ONLINE CALCULATOR DOESN'T QUITE GET IT RIGHT.
WE NEED TO TAKE A ADVANTAGE OF MAKING SURE THAT BILLING MAKES SENSE AND IT'S FAIR AND IT'S TRANSPARENT, AND THAT WE ARE ADDRESSING THE RIGHT USERS IN THE RIGHT WAY.
AND THAT INCLUDES TO COUNCIL MEMBER DAVIS' QUESTION, YOU KNOW, UM, FOLKS IN INDUSTRY, FOLKS THAT ARE COMMERCIAL, THEY MAY NOT MAKE UP A HUGE PORTION OF THE AMOUNT OF WATER THAT THEY TAKE, BUT BECAUSE THEY TAKE WATER IN SUCH HUGE VOLUMES AT A TIME, IT PUTS ADDITIONAL STRAIN SOMETIMES ON THE DISTRIBUTION SYSTEM ITSELF.
SO PERHAPS THERE'S OPPORTUNITIES FOR US TO DO THAT.
'CAUSE A LOT OF THOSE ARE INDIVIDUAL CONTRACTS AND THOSE CONTRACTS ARE SOMETIMES REALLY LONG TERM, 20, 30 YEAR TERMS. BUT IF THERE'S OPPORTUNITIES FOR THE CITY TO MAKE SURE THAT WE ARE NOT REALLY JUST FLOATING IT FOR EVERYBODY ELSE, ESPECIALLY THOSE THAT MAY BE IN A BETTER POSITION TO, UH, PAY FOR THAT WATER, WE WANT TO DO THAT WHILE WE'RE ESPECIALLY SENSITIVE TO OUR SINGLE FAMILY AND MULTIFAMILY RESIDENTS.
WELL, I'M, I'M GLAD YOU'RE THINKING ABOUT THAT.
I HOPE WE DON'T GET TO THE POINT WHERE HOUSTON RESIDENTS PAY MORE THAN FOLKS WHO LIVE OUTSIDE THE CITY.
'CAUSE I THINK IF YOU LIVE OUTSIDE THE CITY, THEN YOU SHOULD BE BEARING A CO A, A PORTION OF THIS $4.5 BILLION COST AS WELL.
UM, AND, AND I HOPE YOU GUYS WILL, WILL KEEP THAT IN MIND.
UM, LAST THING I'LL COVER IS, SO, SO THE LOW INTEREST LOANS, WE'RE GONNA GET, UH, $1 BILLION OR JUST UNDER $1 BILLION FROM THE STATE, UH, THROUGH THE TEXAS WATER DEVELOPMENT BOARD, IS THAT RIGHT? CORRECT.
IS THAT PRETTY MUCH A SURE THING? YES.
AND THEN WE'RE, AGAIN, IT'S A MULTI-YEAR COMMITMENT.
WE'VE ALREADY SECURED THE FIRST PART OF IT AND WE'RE CLOSING ON THE NEXT PORTION AND, UH, BY NOVEMBER AND THEN IT'LL BE AT THE THIRD OPTION, WHICH IS GONNA BE ON AN NNA BASIS IS YES, THAT IS SECURED.
AND THEN THE WIA, WHICH IS $2 BILLION, THAT'S FEDERAL FUNDING, IS THAT RIGHT? THAT IS CORRECT.
AND THAT'S A COMPETITIVE PROCESS, I WOULD IMAGINE? UH, YEAH.
YOU GOTTA APPLY OTHERS IN, YOU GOT, YOU GOTTA GO THROUGH THE PROCESS.
UM, CURRENTLY WHAT WE HAVE IS A, A LETTER OF INTEREST THAT WAS APPROVED THROUGH WY.
AND SO WE WERE INVITED TO, UH, FORMALLY APPLY FOR THE APPLICATION.
AND SO WE HAD TO SUBMIT A LOT OF INFORMATION ABOUT THE PROJECT AND THINGS LIKE THAT BEFORE WE GOT APPROVED.
BUT THE LETTER OF INTEREST, BUT MY, MY POINT IS OTHER AREAS OF THE, OF THE COUNTRY PROBABLY WANT THE SAME YES.
FUNDING FOR THEIR THAT'S CORRECT.
FOR THEIR WATER SITUATION, CORRECT? YES.
AND AND IS THAT A SURE THING OR, OR NOT? IT IS, IT IS.
WE, AGAIN, WE HAVE THE OFFICIAL LETTER OF INTEREST THAT WAS APPROVED.
NOW THE ONLY NEXT STEP IS JUST THE PROCESS OF FORMAL APPLICATION AND THEY'RE LOOKING AT WHEN THIS FUNDING WILL BE APPLIED THROUGHOUT THE LIFE OF THE PROJECT.
I APPRECIATE EVERYTHING Y'ALL ARE DOING.
UH, I KNOW A LOT OF US HAVE TOURED OUT THERE.
I CERTAINLY HAVE, AND THIS IS WELCOME NEWS THAT WE'RE GETTING STARTED ON ALL THIS.
UM, WE'RE GOING TO FINISH UP WITH PUBLIC SPEAKING.
I HAVE DOUG SMITH, FIRST AND FOREMOST.
UM, SOME QUESTIONS ON THE MOST RECENT, UH, PRESENTATION THAT WAS DONE HERE.
I REMEMBER COMING TO THESE MEETINGS OVER THE LAST FEW YEARS AND HEARING ABOUT TONS OF, I MEAN, MILLIONS OF DOLLARS, MAYBE BILLION DOLLARS ON THE NORTHEAST WATER TREATMENT PLANT.
AND I WAS SHOCKED TO HEAR WE ONLY GET 16% OF OUR WATER FROM THERE.
ALL THE REST OF IT GOES TO THE OTHER ENTITIES THAT WE PROVIDE WATER FOR.
AND THE QUESTION THAT COMES TO MIND IS, WHY WERE WE FOCUSING ON THAT AND NOT FOCUSING ON THE EAST PLANT, WHICH SEEMS TO HAVE A LOT MORE PROBLEMS THAN, UH, WE WOULD LIKE TO DEAL WITH.
UH, SECONDLY, THE WIA SAYS THAT IT'S FOR FIVE YEARS.
UH, AND I'M WONDERING WHAT HAPPENS.
I'M WONDERING WHAT HAPPENS AFTER THE FIVE YEARS THAT'S NOT ADDRESSED, UH, IN, IN THE, UH, REPORT.
YEAH, SAMIR, I WAS KIND OF WONDERING THAT TOO, IF YOU DON'T MIND ANSWERING
[01:40:01]
THAT.UH, WE CAN DEFER PAYMENT FOR FIVE YEARS AND THEN, THEN WHAT, HOW IS IT STRUCTURED? AND I THINK THAT'S STILL BEING WORKED OUT.
YEAH, AND AND THAT'S A, THAT'S A GREAT QUESTION.
UM, ON THE, THE WAY IT WORKS IS YOU COMPLETE YOUR PROJECT.
LET'S SAY YOU GET TO A POINT IN SUBSTANTIAL COMPLETION, 2034, FOR EXAMPLE.
THEN IT ALLOWS US TO PUSH OUR PAYMENTS, THE PAYMENTS THAT ARE DUE FIVE YEARS, UP TO FIVE YEARS, AND THEN WE PAY ON THE LOAN OVER 30 YEARS.
THAT'S ALL Y'ALL ARE GONNA NEGOTIATE THAT REPAYMENT UPFRONT ON, ON WHAT THOSE PAYMENTS WILL BE AND ALL OF THAT.
IT, IT JUST DEPENDS ON, ON THE TOTAL LOAD AMOUNT THAT WE END UP TAKING OUT.
SO THEN THAT'LL BE JUST A SCHEDULE OF PAYMENTS OVER 30 YEARS.
SO IT'S JUST THAT AFTER SUBSTANTIAL COMPLETION, IT GIVES US SOME FLEXIBILITY TO PUSH OUT OUR PAYMENTS ANOTHER FIVE YEARS BEFORE WE START PAYING ON THE LOAN, WHICH WILL BE ANOTHER 30 YEARS.
AT WHAT INTEREST RATE? UM, IT DEPENDS ON THE MARKET INTEREST RATE AT THE TIME.
UM, I WILL TELL YOU THAT THE INTEREST RATE ENVIRONMENT RECENTLY HAS BEEN GOING DOWN AND I PRAY THAT IT CONTINUES TO DO SO.
BUT WE'LL FIND OUT AS WE MOVE, UH, CLOSER TO, UH, ACTUALLY TAKING DOWN THAT FUNDING SO THAT INTEREST RATE SET AT WHEN YOU START TAKING DOWN THE CORRECT.
UH, REGARDING THE DISCUSSION CAME UP ABOUT THE $1.3 BILLION SURPLUS THAT THE DEPARTMENT HAD, AND THEY TALKED ABOUT HOW IT WAS GONNA BE USED FOR THIS AND IT'S ALLOCATED.
CAN WE GET A DETAILED ACCOUNTING OF HOW THAT IS ALLOCATED AT THIS POINT? I THINK IT'S IMPORTANT 'CAUSE THEY, THEY THREW OUT SOME POSSIBILITIES OF WHERE IT HAD TO GO, LIKE BOND COVENANTS AND VARIOUS THINGS LIKE THAT.
I THINK WE'RE REQUIRED, UM, TO HAVE A 1.2 DEBT COVERAGE.
AND WE'RE AT 2.0 1.2 AND WE'RE AT 2.0.
BUT YES, WE CAN WORK ON GETTING YOU A BREAKDOWN OF THE DETAIL.
THOSE, AND IN THAT REGARD, PRESERVE DEPARTMENTS REGARD RELATIVE TO THE PARKS DEPARTMENT.
SOME OF THE OTHER PRESENTA UH, PRESENTERS, UH, MENTIONED THIS.
I THINK THAT A VERY DETAILED, BECAUSE I'VE HAD A DEVELOPER THAT I TALKED TO JUST LAST WEEK THAT IS CONCERNED ABOUT THAT.
WHERE DID THE PARK DEDICATION FEE MONEY GO? I THINK THERE SHOULD BE A DETAILED REPORT.
HERE'S HOW MUCH WE GOT AND HERE ARE THE VARIOUS PARKS OR, UH, THINGS.
AND THEY DID AN OVERVIEW OF THAT IN THE FIRST TIME, BUT WE'RE GONNA ASK FOR A MORE DETAILED PRESENTATION ON THAT.
AND THEN RELATIVE TO THE MOFA, UH, ON PAGE FOUR, UH, I'M CURIOUS, HOW DID THE, UH, BUDGETED, UH, UH, FUND BALANCE AT THE BEGINNING OF THE YEAR JUMP A HUNDRED BILLION DOLLARS? IT WENT FROM 380 MILLION, EXCUSE ME, TO 480 MILLION.
UH, WHAT HAPPENED, UH, TO THAT, I THOUGHT I WAS SEEING THE, THE IN THE MOFA REPORT AROUND, IT'S ON PAGE 4, 3 36 OR THREE, UH, THE WELL ON PAGE THE BUDGET EXPECTED WAS $380 MILLION.
UH, THAT WAS IN THE 26 BUDGET AND ACTUAL PROJECTION NOW IS $480 MILLION.
WHERE DID THAT EXTRA A HUNDRED MILLION DOLLARS COME FROM? OH, I SEE WHAT YOU'RE SAYING.
SO THAT'S JUST A QUESTION DIFFERING FROM WHAT THAT, WHAT WAS IN THEIR, UM, LETTER.
WE'LL GET, WE'LL GET YOU AN ANSWER ON THAT.
AND THEN, UH, THE LAST TIME I WAS HERE, I THOUGHT I WAS COMING TO HERE, BUT THE D-D-S-R-F AND IT WAS THE STORM WATER INSTEAD, I STILL WOULD LIKE TO SEE IF WE COULD HAVE A REPORT AS TO WHY WE END THE YEAR WITH $500 MILLION UNSPENT, UH, IN THOSE ACCOUNTS.
I HEARD ONE COMMENT, UH, THAT THE, UH, CAPACITY, UH, OF THE DEPARTMENT, BUT IF THAT'S THE CASE, THEN PERHAPS THEY NEED TO HIRE OUTSIDE CONTRACTORS TO FIX ALL OF THE WATER BREAKS AND ALL OF THE THINGS THAT WE HAVE.
BUT I THINK A DETAILED PRESENTATION ON THAT WOULD BE WELCOME, CERTAINLY BY ME.
UH, LET ME, CAN I SAY ONE MORE THING? SURE.
UH, FROM YOUR, UH, REPORT THAT YOU SENT OUT, I WAS REALLY HAPPY TO HEAR THAT TRANQUILITY PARK IS A SOME WORK YES.
BEFORE WE ARE ALL THRILLED ABOUT TREAD QUALITY PARK.
VALE KELLY, THANK YOU VERY MUCH.
I REALLY WAS APPRECIATIVE OF THE PRESENTATION ON ELECTRIC PRICES, UM, BY THE CONTROLLER'S OFFICE AND, AND THANK UH, TO WILL ON THAT.
MY SINGLE BIGGEST DISAPPOINTMENT FROM HAVING WORKED HERE AT CITY HALL WAS THE POLICY THAT OUR STATE PASSED AFTER WINTER STORM URI ON, UH, BASICALLY DE DEPRIORITIZING THE CITY OF HOUSTON'S ROLE IN HELPING RATE PAYERS AND BEING ABLE TO FIGHT FOR THOSE INCREASES.
RECENTLY, CENTER POINT, UH, SUBMITTED A PLAN FOR $3.2 BILLION.
[01:45:01]
NOW Y'ALL ARE DEALING WITH WATER PURIFICATION PLANTS.DID YOU GUYS HAVE A HEARING ON THAT? NO.
AND IT WAS BECAUSE CENTER POINT PASSED LEGISLATION THAT ALLOWED THEM TO GO DIRECTLY TO THE PUBLIC UTILITY COMMISSION TO GET THAT 3.2 BILLION APPROVED INITIALLY, AND YOU CAN LOOK IT UP.
HOW DID IT DECREASE? WHAT WERE THE METRICS? NOW, SENATOR POINT SPENT A LOT OF MONEY PUTTING IT ON TV AND LETTING, YOU KNOW, DON'T WORRY, WE'VE GOT IT ALL TAKEN CARE OF.
BUT THAT DOESN'T HELP RATE PAYERS.
AND WE'RE TALKING ABOUT AFFORDABILITY WITH WATER RATES.
TINA PEZ PROBABLY HAS SAVED HOUSTONIANS MORE MONEY THAN ANY OTHER INDIVIDUAL BECAUSE OF THE WORK THAT SHE DOES IN THOSE RATE HEARINGS.
IF YOU HADN'T HAD A CHANCE TO SIT DOWN WITH HER TO BE ABLE TO TALK THROUGH WHAT THEY DO, UH, IN FIGHTING FOR HOUSTONIANS ON THAT, AGAIN, YOU SAW IT WAS 28% OF OUR BILL.
RIGHT? IT IS, IT IS SO FRUSTRATING TO SEE A FOR-PROFIT CORPORATION BE ABLE TO USE OUR MONEY THAT WE PAY.
YOU DON'T GET A CHOICE ON WHETHER YOU HAVE CENTERPOINT OR NOT, RIGHT? IT'S THEIR, OUR TDU, THEY USE OUR MONEY TO HELP PAY FOR THOSE LOBBYISTS TO GO UP AND NEGATE OUR ACCOUNTABILITY HERE LOCALLY.
AND WHEN YOU TALK ABOUT REAL PRICES AND AFFORDABILITY FOR FOLKS, PEOPLE REMEMBER THE GENERATORS THAT THEY PURCHASED AFTER, UH, THAT WERE COMPLETELY UNUSED IN, UH, HURRICANE BARREL, I BELIEVE RIGHT? WAS $800 MILLION.
PEOPLE DON'T KNOW THAT TINA P IS' TEAM MADE SURE THEY WON IN COURT AT OUR INITIAL RATE HEARING.
THOSE WERE DENIED REIMBURSEMENT.
BUT CENTER POINT THEN APPEALED TO THE STATE OF TEXAS AND THE PUC THEN DECIDED, NOPE, THAT'S A GOOD COST.
I JUST REALLY WANT TO MAKE A POINT OF EMPHASIS WHEN YOU'RE LOOKING AT ELECTRIC RATES AND AFFORDABILITY THAT YOU LOOK AT TINA'S SHOP AND THE OUTSTANDING WORK SHE HAS DONE, AND TO OUR CENTER POINT FRIENDS THAT HAVE PASSED THIS LEGISLATION THAT HAS TAKEN A GREATER AUTHORITY AWAY FROM YOU ON THEIR RESILIENCY PLANNING.
IT, IT IS A BIG, BIG, BIG RED FLAG WHEN PEOPLE DON'T WANT ACCOUNTABILITY.
RIGHT? I MEAN, THAT, THAT, THAT REALLY SHOULD COME UP.
SO I, I HADN'T PLANNED ON SPEAKING, BUT THAT LITERALLY KEEPS, WHEN YOU TALK ABOUT KEEP YOU UP AT NIGHT ON THE DEAL, WHEN YOU SEE THOSE ELECTRIC BILLS AND YOU SEE WHAT YOUR TDU COST IS CONSISTENTLY DOING THAT TO, UH, COUNCIL MEMBER FLICKINGER POINT, SOLAR ENERGY SHOULD BE A LOT MORE INEXPENSIVE THAN IT HAS BEEN.
RIGHT? WE, WE GOT A FIXED RATE PRICE IN 2020.
WE, WE SHOULD HAVE A FIXED RATE PRICE THAT THAT'S, YOU KNOW, OKAY, I GET INFLATION WITH IT, BUT IT SHOULDN'T BE GOING UP 90% WHEN YOU LOOK AT THE INCREASE OF TDU COST IS A PERCENTAGE OF OVERALL COST INCREASE.
SO AS, AS YOU'RE LOOKING AT THAT, IF YOU HADN'T HAD A CHANCE YET TO GET WITH TINA TO BE ABLE TO SEE EXACTLY WHAT THEY DO, HIGHLY, HIGHLY ENCOURAGE YOU TO DO IT.
THE AMOUNT OF MONEY THAT THEY HAVE SAVED IS, IS REALLY REMARKABLE.
SO THANK YOU FOR INDULGING ME ON THAT AS, UM, I I REALLY BELIEVE THIS POLICY NEEDS TO CHANGE AT THE STATE OF TEXAS AND FRANKLY WANNA THANK THE HOUSTON CHRONICLE FOR THE COVERAGE THAT THEY DID ON BEING ABLE TO EXPOSE HOW A LOT OF THIS STUFF WORKED.
SO, UM, THANK YOU VERY MUCH, CHAIR ALCORN, I'LL GET OFF MY SOAPBOX.
ALWAYS APPRECIATE YOUR COMMENTS.
ANY OTHER PUBLIC SPEAKERS? OKAY.
THANK YOU COLLEAGUES FOR HANGING IN.
AND OUR NEXT, UH, BUDGET AND FISCAL AFFAIRS MEETING WILL BE TUESDAY, MARCH 31ST, NOT AT THE BEGINNING OF THE MONTH, BUT THE END.
MARCH 31ST AT 10:00 AM THIS MEETING IS ADJOURNED.