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>> MAYOR NIRENBERG: GOOD MORNING, EVERYONE. NOW THAT DISTRICT 8 IS BACK, WE'LL GO AHEAD AND START OUR MEETING A LITTLE BIT LATE. 10:06 A.M. ON THE 18TH DAY OF OCTOBER 2023. WE'LL CALL OUR GOVERNANCE COMMITTEE MEETING TO ORDER.
MADAME CLERK, COULD YOU READ THE ROLL?
>> CLERK: MAYOR, WE HAVE A QUORUM. >> MAYOR NIRENBERG: ALL RIGHT. WELCOME, EVERYBODY TO OUR CITY COUNCIL GOVERNANCE COMMITTEE
[Approval of Minutes ]
MEETING. WE HAVE ONE ITEM FIRST TO START THE MEETING, WHICH IS THE APPROVAL OF THE MINUTES FROM OUR MEETING IN OCTOBER. I'M SORRY.AUGUST 30, 2023. I'LL ENTERTAIN A MOTION FOR THOSE.
OKAY. THERE'S A MOTION. WAS THERE A SECOND? ALL RIGHT. THERE'S A MOTION AND A SECOND FOR APPROVAL OF THE CITY COUNCIL GOVERNANCE COMMITTEE MEETING MINUTES OF AUGUST 30, 2023.
ANY DISCUSSION? HEARING NONE, ALL IN FAVOR SAY AYE.
>> MOTION CARRIES. ALL RIGHT. THE SECOND ITEM IS THE PROCESS
[Briefing and Possible Action on ]
OF SCHEDULING AND CONSIDERING CITY COUNCIL CONSIDERATION REQUESTS.THIS IS A PROCESS THAT BEGAN WITH COUNCILMEMBER WHYTE, WHO IS HERE.
IN COLLABORATION WITH MY OFFICE AND THE CITY ATTORNEY'S OFFICE.
ANDY, I THINK YOU'RE GOING TO GIVE US A PRESENTATION? >> SEGOVIA: YES, MAYOR.
GOOD MORNING, MAYOR. GOOD MORNING, COMMITTEE MEMBERS.
IF YOU DON'T MIND, MAYOR, I'LL GIVE THE PRESENTATION FROM THIS VANTAGE POINT.
>> MAYOR NIRENBERG: WE WOULD PREFER YOU AT THE PODIUM. NO, YOU'RE THE ATTORNEY.
YOU CAN DO WHATEVER YOU WANT. [LAUGHTER] >> SEGOVIA: I'LL BE HAPPY TO JUMP UP THERE, MAYOR. AS YOU STATED, MAYOR, THIS IS A PROCESS THAT BEGAN WITH COUNCILMAN WHYTE WAS MAKING SOME SUGGESTIONS IN TERMS OF UPDATING OUR PROCESS.
AND WE HAD SEVERAL DISCUSSIONS WITH YOUR OFFICE, THE CITY MANAGER'S OFFICE, MY OFFICE.
WHAT I'M PRESENTING TODAY IS WHAT CAME OUT OF THOSE DISCUSSIONS.
AND OBVIOUSLY, YOU KNOW, THE GOVERNANCE COMMITTEE WILL CONSIDER THE PROPOSAL AND SEE WHETHER WE HIT THE MARK OR NOT. SO FIRST SLIDE, JUST SOME BACKGROUND. THE LAST TIME OUR CCR ORDINANCE -- THIS IS BY ORDINANCE, THE CCR PROCESS. IT WAS UPDATED IN 2007. THE ORIGINAL ONE WAS IN 2003.
THE 2007 UPDATE PRIMARILY CHANGED THE NUMBER OF SIGNATURES THAT WERE REQUIRED FOR A CCR. PREVIOUSLY IT WAS SIX. IN 2007 IT WAS CHANGED TO FIVE. OBVIOUSLY FOR COMPLIANCE WITH THE OPEN MEETINGS ACT, NOW IT'S FIVE AND IT HAS BEEN FIVE SINCE 2007. THE PROCESS OUTLINED IN 2007, AS COUNCILMAN WHYTE SOON POINTED OUT TO US, IT DIDN'T NECESSARILY MATCH WHAT HAS EVOLVED IN TERMS OF THE PRACTICE FOR SCHEDULING CCRS ONCE THEY HAVE BEEN SUBMITTED TO THE CLERK. AND FRANKLY THERE WAS SOME AMBIGUITY IN THE ACTUAL 2007 ORDINANCE. FOR EXAMPLE, IT TALKED ABOUT TIMELY SCHEDULING.
AND THEN THERE WAS ANOTHER PROVISION THAT TALKED ABOUT SCHEDULING AT THE NEXT AVAILABLE GOVERNANCE COMMITTEE. THERE WAS SOME AMBIGUITY THERE. WORKING WITH COUNCILMAN WHYTE, WE TRIED TO CORRECT SOME OF THAT, MAKE WHAT WE'RE GOING TO PROPOSE MORE -- OR ACTUALLY MATCH WHAT WE'RE CURRENTLY DOING AND ADDING SOME NUANCES TO IT IN TERMS OF TIMING AND WHAT ACTIONS YOU THE GOVERNANCE COMMITTEE CAN TAKE OR COUNCIL COMMITTEES IN WHICH THE ITEM IS REFERRED TO.
SO THERE'S THE STRONGER FOCUS NOW ON TIMING AND WHAT ACTIONS CAN BE TAKEN, BOTH AT GOVERNANCE AND THE COUNCIL COMMITTEES. I'LL HIGHLIGHT JUST SOME THINGS THAT ARE CARRYOVERS. THE CCR NEEDS TO BE SIGNED BY FIVE COUNCIL MEMBERS.
WE HAVE KEPT THE NOTION THAT A SIGNATURE ON THE CCR DOESN'T NECESSARILY MEAN THAT THAT PARTICULAR COUNCILMEMBER IS GOING TO BE SUPPORTIVE OF WHATEVER IS ULTIMATELY PUT BEFORE COUNCIL. AND IT'S SUBMITTED TO THE CLERK FOR FILING AND TRACKING.
ONE THING WE DID ADD WAS THE SPONSORING COUNCILMEMBER FIRST MUST NOTIFY THE CITY MANAGER'S OFFICE OF THE CCR THAT'S GOING TO BE SUBMITTED. THE PRIMARY PURPOSE FOR THIS, AS STATED IN THE DRAFT ORDINANCE THAT WE HAVE ATTACHED, IS SO THE CITY MANAGER CAN ALERT THAT COUNCILMAN IF THERE IS AN ACTION OR PROGRAM THAT IS DIRECTLY TIED TO THE CCR THAT IS EITHER BEING IMPLEMENTED OR ABOUT TO BE IMPLEMENTED SO THAT, FRANKLY, THE COUNCILMEMBER THEN DOESN'T HAVE TO DO A CCR.
BECAUSE ACTUALLY THE CITY MANAGER ALREADY HAS PLANS TO IMPLEMENT THAT ACTION OR PROGRAM. SO THAT'S ONE OF THE ADDITIONS WE'VE ADDED TO THIS UPDATED PROCESS. TIMING. HERE'S A KEY THING THAT WE'VE
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ADDED IN TERMS OF TIMING. THE CCR, ONCE SUBMITTED TO THE CLERK, WILL BE PLACED ON A GOVERNANCE COMMITTEE SCHEDULE WITHIN 60 DAYS OF BEING SUBMITTED OR AT THE SECOND GOVERNANCE COMMITTEE AFTER SUBMITTED. THE REASON WE HAVE THE 60 DAYS AND THAT BIFURCATION BETWEEN THE SECOND SCHEDULE AND THE 60 DAYS IS WE TRIED TO ACCOUNT FOR THE JULY MONTH WHERE WE HAVE A FULL MONTH WHERE COUNCIL AND THE GOVERNANCE COMMITTEE DOESN'T MEET. WE WANTED TO HAVE THAT APPLY. SO MOST OF THE TIME YOU WOULD HAVE -- MY EXPECTATION WOULD BE THAT ONCE SUBMITTED IT WILL BE SCHEDULED NO LATERAUDIO] AFTER A CCR IS SUBMITTED. >> COURAGE: ANDY, YOU SKIPPED
ONE OF THE PAGES. >> SEGOVIA: I'M SORRY, COUNCILMAN.
SOMETIMES I THINK ON YOUR TABLET THEY WERE IN -- THERE WAS ONE SLIDE THAT WAS AHEAD OF ANOTHER. IF YOU JUMP TO THE NEXT SLIDE ON YOUR TABLET, YOU'LL SEE THIS
ONE. >> COURAGE: THANK YOU. >> SEGOVIA: BECAUSE THE TIMING ONE IS CRITICAL. THAT'S THE ONE THAT DICTATES WHEN SOMETHING WILL BE SCHEDULED. SO THAT'S A KEY ADD FROM THIS PROPOSAL.
AND WHAT HAPPENS WHEN THE GOVERNANCE COMMITTEE HAS A CCR, WE'VE OUTLINED FOUR THINGS THAT THE GOVERNANCE COMMITTEE WILL DO. ONE IS MANY CCRS WILL REQUIRE EITHER FINANCIAL, LEGAL, OR OTHER DEPARTMENT ANALYSIS TO PROVIDE WHAT WE CAN DO FROM BOTH A RESOURCE STANDPOINT, A LEGAL STANDPOINT, OR IF IT REQUIRES INTERACTION WITH OTHER GOVERNMENT ENTITIES OR REQUIRES CROSS-DEPARTMENTAL COOPERATION.
IT WILL REQUIRE SOME ANALYSIS SO THIS PROVIDES TIME FOR THAT ANALYSIS AND IT REQUIRES THAT ITEM, ONCE THAT ANALYSIS IS COMPLETE, TO BE BROUGHT BACK TO THE GOVERNANCE COMMITTEE.
THE OTHER THING THE GOVERNANCE COMMITTEE CAN DO IS VOTE TO ASSIGN THE CCR, AS IT NORMALLY DOES, TO A COUNCIL COMMITTEE FOR FURTHER CONSIDERATION. THAT'S A HOLDOVER FROM OUR CURRENT PROCESS. NUMBER THREE IS YOU CAN VOTE TO REFER THE CCR TO THE CITY MANAGER'S OFFICE SO THAT IT BECOMES THEN PART OF THE NEXT BUDGET PROCESS.
THERE ARE A -- THE REASON WE HAVE THAT IS THERE ARE A NUMBER OF CCRS THAT OBVIOUSLY HAVE SIGNIFICANT BUDGETARY CONSIDERATIONS THAT HAVE TO BE TAKEN INTO ACCOUNT.
AND SO MANY OF THE ITEMS THAT ARE ON CCRS SHOULD NATURALLY FLOW INTO THEN THE BUDGET PROCESS. AND SO THAT ALLOWS THE GOVERNANCE COMMITTEE TO IDENTIFY THOSE AND THEN REFER THEM TO ERIK SO THEY CAN THEN BE INCORPORATED INTO OUR BUDGET PROCESS. LAST BUT NOT LEAST, OBVIOUSLY THE GOVERNANCE COMMITTEE CAN DECIDE AS A COMMITTEE NOT TO FURTHER CONSIDER THE CCR ANYMORE.
AND I'LL GET INTO WHAT REASONS THE GOVERNANCE COMMITTEE CAN DO THAT.
SO REASONS FOR REMOVING AN ITEM FROM CONSIDERATION IS -- ONE IS IF THE ITEM HAS ALREADY BEEN ENACTED BY STATE OR FEDERAL LAW. WE'VE HAD THAT HAPPEN ALREADY RECENTLY WHERE THE STATE LEGISLATURE DID PASS A PROHIBITION ON DISCRIMINATION BASED ON HAIRSTYLES. COUNCILMAN MCKEE-RODRIGUEZ HAD SUBMITTED A CCR ON THAT AND BECAUSE THAT WAS ALREADY ENACTED UNDER STATE LAW, THAT WOULD FALL UNDER THIS NUMBER ONE CATEGORY. THE SECOND IS IF A CCR HAS BEEN PREEMPTED BY STATE OR FEDERAL LAW. IF THE PROCESS OR PROGRAM OUTLINED IN THE CCR HAS ALREADY BEEN ENACTED BY THE CITY MANAGER'S OFFICE OR IS CURRENTLY BEING IMPLEMENTED BY THE CITY MANAGER'S OFFICE. THE FOURTH ONE IS FOR POLICY REASONS THIS BODY DETERMINES THE CCR SHOULD NO LONGER BE CONSIDERED. OBVIOUSLY, THIS BODY HAS THE OPPORTUNITY TO DO THAT. WHAT IS NOT STATED IN THE NEW PROPOSED ORDINANCE BUT WHICH IS THE PHILOSOPHY TO BE CARRIED FORWARD IS THAT ONCE AN ITEM IS REFERRED TO A COUNCIL COMMITTEE, IT'S NOT GOING TO SIT IN ABEYANCE. THE COUNCIL COMMITTEE WILL TAKE ACACTION . AS MANY OF YOU KNOW, COUNCIL MEMBERS, ONCE IT GETS TO COMMITTEE IT COULD BE AT A COMMITTEE MEETING TWO OR THREE TIMES, DEPENDING ON FURTHER INFORMATION THAT'S REQUIRED. DEPENDING ON PUBLIC OUTREACH. DEPENDING ON WHETHER THE STATE LEGISLATURE, FOR EXAMPLE, IS GOING TO ACT ON SOMETHING. WE DIDN'T WANT TO ASCRIBE ANY TIMING BECAUSE THEY'RE ALL VERY DIFFERENT AND WE'VE HAD SOME ITEMS THAT ARE ACTIVELY BEING CONSIDERED BY COMMITTEE FOR SOMETIME. BUT, AGAIN, THE SENSE IS THAT ONCE IT GETS TO COMMITTEE, IT'S GOING TO BE CONTINUALLY ACTED UPON AND CONSIDERED BY THAT COMMITTEE. SO THAT'S ALL I HAVE, MAYOR, IN TERMS OF WHAT THE PROPOSAL IS.
UNLESS YOU OR ERIK WANT TO ADD ANYTHING. WE DO HAVE A DRAFT ORDINANCE ATTACHED THAT INCORPORATES ALL THE ITEMS THAT I BRIEFED THIS COMMITTEE ON.
SO UNLESS YOU HAVE ANY QUESTIONS OR FURTHER DISCUSSION, I THINK WE'RE --
>> MAYOR NIRENBERG: ANDY, SO YOUR RECOMMNDATION IS THAT WE FORWARD THIS TO THE CITY
COUNCIL FOR APPROVAL? >> SEGOVIA: THAT'S CORRECT. >> MAYOR NIRENBERG: THE DRAFT
ORDINANCE AND EVERYTHING. >> SEGOVIA: BECAUSE IT'S AN ORDINANCE, IT WOULD REQUIRE THE
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FULL COUNCIL TO APPROVE IT. >> MAYOR NIRENBERG: OKAY. I WANT TO GO AHEAD AND ENTERTAIN A MOTION THERE'S A MOTION AND A SECOND FOR FORWARDING THIS PROPOSAL TO THE FULL CITY COUNCIL FOR CONSIDERATION ON THE NEXT AVAILABLE A SESSION. SO I WANT TO THANK COUNCILMEMBER WHYTE FOR INITIATING THIS PROCESS. YOU KNOW, HE DISCUSSED WITH ME AND MY OFFICE CONCERNS ABOUT MAKING SURE THAT WE'RE EFFICIENTLY MOVING THROUGH THE CCRS. YOU KNOW, IN ACCORDANCE TO THE ORDINANCE THAT WAS DRAFTED IN 2007. AS YOU KNOW IN COMMITTEES THIS ONE AND ALL THE OTHER COMMITTEES, SOME THINGS ARE DONE THROUGH LITERAL INTERPRETATION OF ORDINANCES AND THEY EVOLVE OVER TIME THROUGH COUNCIL CUSTOM. SO COUNCILMEMBER WHYTE WANTED TO MORE SPECIFICALLY SCRIPT OUT THE PROCESS THAT CCRS WOULD BE HEARD, INITIALLY.
AND SO HERE'S MY PERSPECTIVE. ALL OF THE CCRS GENERALLY GET HEARD TIMELY.
WHERE SOME THINGS TAKE A LITTLE BIT OF TIME IS THAT STAFF NEEDS TO DO REVIEW.
OFTENTIMES FOR BUDGETARY REASONS. MANY TIMES FOR LEGAL REASONS.
AND IN SOME CASES THERE ARE PROCESSES ALREADY MOVING THROUGH THAT ARE RELEVANT OR TOTALLY ENCOMPASS WHAT A CCR IS ABOUT. AND SO THOSE THINGS NEED TO BE RECONCILED BY STAFF BEFORE THEY COME TO THE CITY COUNCIL GOVERNANCE COMMITTEE.
AND USUALLY BEFORE WE ACTUALLY AGENDIZED ONE OF THOSE CCRS IT WOULD GO THROUGH THAT PROCESS. IN THIS CASE, THE MAJOR CHANGE THAT I INTERPRET THROUGH THE DRAFT ORDINANCE IS THAT THAT PROCESS WON'T BEGIN UNTIL GOVERNANCE COMMITTEE BASICALLY MOVES IT THROUGH THE GATE. AND THIS ORDINANCE NOW WILL SPECIFY A PERIOD OF TIME IN WHICH THAT GATE WILL -- CLEARANCE WILL OCCUR. SO WITHIN 60 DAYS OR WITHIN THE NEXT TWO SCHEDULED MEETINGS. SO, YOU KNOW,I DON'T SEE IT AS A MATERIAL CHANGE, IT'S MORE EFFECTIVELY GOING TO PREDICT US BEING ABLE TO MOVE THROUGH CCRS AND BE A LITTLE BIT MORE CLEAR, TRANSPARENT FOR THE PUBLIC IN TERMS OF TIMING OF HOW CCRS ARE GOING TO GET HEARD. THIS WILL ALSO ENSURE THAT EVERY CCR GETS ITS PROPER HEARING AT THE GOVERNANCE COMMITTEE BEFORE THINGS HAPPEN.
THAT'S MY INTERPRETATION. WORKED AGAIN WITH COUNCILMEMBER WHYTE ON THIS.
THANK HIM FOR HIS OPEN MINDEDNESS AND THE GOOD BACK AND FORTH THAT WE HAD TO COME UP WITH THIS DRAFT ORDINANCE. WITH THAT, COUNCILMEMBER COURAGE.
>> COURAGE: THANKS, MAYOR. I CONCUR. I THINK THIS IS A WISE WAY OF EXPRESSING THE WILL OF THE GOVERNANCE COMMITTEE. AND I THINK IT HELPS CLEAR UP THE CONFUSION OR THE LACK OF UNDERSTANDING THAT SOME COUNCIL MEMBERS HAVE ABOUT WHERE'S MY CCR, IT HASN'T COME FORWARD. IT SHOULD MAKE IT EASIER FOR US TO UNDERSTAND THE PROCESS GOING FORWARD. I THINK IT'S A VERY GOOD CLARIFICATION.
HOPEFULLY THE WHOLE COUNCIL WILL AGREE. THANKS, MAYOR.
>> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER COURAGE. COUNCILMEMBER CABELLO HAVRDA.
>> HAVRDA: THANK YOU, MAYOR. THANK YOU TO COUNCILMAN WHYTE FOR BRINGING THIS TO US.
I HAD A QUESTION ABOUT NOTICE. WHAT CONSTITUTES NOTICE TO THE CITY MANAGER'S OFFICE?
>> WALSH: I DON'T THINK THAT'S DEFINED BUT I'LL TELL YOU HOW IT KIND OF WORKS NOW.
SOMETIMES IT'S WHEN, IN OUR MONTHLY MEETINGS, SOMETIMES THEY'RE KNOWN CALLS.
SOMETIMES IT'S OUTREACH THROUGH THE CITY ATTORNEY'S OFFICE ON ASSISTANCE.
FILING, RIGHT? >> WALSH: YES. >> HAVRDA: TRADITIONALLY I THINK WHAT WE DO NOW THE CITY CLERK FILES IT AND THEN OF COURSE YOU GET IT, RIGHT?
>> WALSH: PROBABLY A GOOD HALF OF THE COUNCIL ENGAGED THE MANAGER'S OFFICE AHEAD OF TIME AND SOME DON'T. IT REALLY DEPENDS ON THE ISSUE.
BUT THERE'S A LACK OF CONSISTENCY AND PART OF WHAT ANDY TALKED ABOUT IN THE PRESENTATION ABOUT THE STEPS FOR GOVERNANCE IS THAT BECAUSE THERE WILL BE A LITTLE BIT MORE CERTAINTY ON THE TIMING OF WHEN IT GETS PLACED ON THE GOVERNANCE AGENDA.
YOU KNOW, THE WAY IT WORKS NOW, THERE'S A FAIR AMOUNT OF STAFF WORK THAT GOES IN TO THE FRONT END BEFORE IT GETS TO GOVERNANCE. IF IT'S GOING TO COME HERE WITHIN TWO MONTHS OR WITHIN A MONTH, IF THERE IS A FINANCIAL, LEGAL, OR ANY SORT OF OTHER DEPARTMENTAL REVIEW, THEN GOVERNANCE WILL SEND IT OVER THERE SO THAT WE CAN DO THOSE ASPECTS AND BRING IT BACK WITHIN A CERTAIN AMOUNT OF TIME.
>> HAVRDA: OKAY. SO ON THAT SAME SLIDE, I'M JUST MAKING SURE THAT THE
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COUNCILPERSON, ONCE THEY GET ADVICE FROM CITY MANAGER, CITY ATTORNEY ABOUT WHAT WE'RE ALREADY DOING OR WHAT WE COULD DO, THEY STILL HAVE THE AUTONOMY TO PUSH THE CCRTHROUGH? >> SEGOVIA: THAT'S CORRECT, COUNCILWOMAN.
IF I MAY, IT WAS NOT INTENDED TO FILTER ANY CCR. IT TRULY WAS INTENDED TO SAVE TIME, IF INDEED A CCR, A COUNCILMEMBER WANTED TO DO A CCR.
AND IF ERIK TOLD THE COUNCILMEMBER WE'RE GOING TO DO IT IN MAY OR WE'RE GOING TO DO IT IN MARCH, IT WOULD SAVE TIME FOR THAT COUNCILMEMBER TO MAYBE NOT SUBMIT IT.
THAT'S PURELY THE REASON WE HAVE THAT. AND IT WASN'T INTENDED TO BE A FORMAL NOTIFICATION. IT COULD JUST BE A DISCUSSION OR AN E-MAIL OR SOMETHING LIKE
THAT. >> HAVRDA: OKAY. AND THEN THE -- ON SLIDE 4, KIND OF THE ROUTES THAT A CCR CAN TAKE. IF IT'S NOT AN ORDINANCE, DOES IT FROM GOVERNANCE HAVE TO GO TO A COMMITTEE OR FULL COUNCIL?
IS THERE AN ALTERNATE ROUTE OR CAN IT BE IMPLEMENTED? >> SEGOVIA: IF I UNDERSTAND THE QUESTION, COUNCILWOMAN, IS MOST CCRS REQUIRE IN OTHER WORDS OR SOME ACTION BY THE CITY MANAGER. SO YOUR QUESTION CAN IT GO FROM GOVERNANCE TO ERIK?
IMPLEMENT. >> SEGOVIA: I WOULD IMAGINE THERE MIGHT BE SOME SITUATIONS
WHERE THAT COULD HAPPEN, YES. >> HAVRDA: THANK YOU. THAT REALLY IS WHAT I'M EXCITED ABOUT WITH THIS CCR IS THE CHANGES TO THE PROCESS I THINK MAKE OUR DECISION MAKING MORE NIMBLE. I REALLY LIKE THE IDEA OF TALKING WITH DEPARTMENTS.
WHEN A LOT OF US DO A CCR, WE FIRST FIGURE OUT WGUHAT IS GOING ON, WHAT CAN WE IMPROVE ON.
SO TO HAVE KIND OF A FORMALIZED PROCESS I THINK IS BENEFICIAL. OUR COMMUNICATIONS, OUR BUSINESSES, OUR FINANCES ARE MOVING FASTER. EVERYTHING IS MOVING SO FAST THESE DAYS. TO HAVE A PROCESS LIKE THIS I THINK IS ONLY BENEFICIAL.
ON THE OTHER HAND OF THAT, I UNDERSTAND THAT GOVERNMENT PROCESSES ARE PURPOSEFULLY SLOW. WE WANT TO BE DELIBERATE. WE WANT TO TAKE TIME TO THINK THROUGH THINGS AND THAT'S INTENTIONAL AND WISE. BUT I THINK, BECAUSE GOVERNANCE DECISIONS CAN BE SERIOUS CONSEQUENCES SO THIS IS HELPFUL WITHOUT DELAYING GOOD IDEAS.
BEING NIMBLE AND DELIBERATE ARE NOT MUTUALLY EXCLUSIVELY. I THANK YOU AGAIN, COUNCILMEMBER WHYTE FOR BRINGING IT TO US AND LOOK FORWARD TO REVIEWING IT AT FULL
COUNCIL. THANK YOU. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER CABELLO HAVRDA. COUNCILMEMBER ROCHA GARCIA.
>> GARCIA: THANK YOU, MAYOR. I APPRECIATE COUNCILMAN WHYTE. THANK YOU FOR BEING HERE AND FOR TRYING TO MOVE THIS PROCESS FORWARD. IN MY REVIEW I HAVE AUTHORED OR CO-AUTHORED 11 CCRS AND I HAVE 51 I HAVE SIGNED ON TO. WE HAVE A BEAUTIFUL COLOR-CODED SHEET OF ALL OF THE CCRS WHERE THEY ARE, WHERE THEY'RE NOT, WHERE THEY HAVE MOVED.
18 OF THEM HAVE NOT BEEN HEARD. SOME OF THEM ARE ROLLING OFF BECAUSE OF THINGS THAT WE DISCUSSED EARLIER WOULD BE APPROPRIATE, LIKE MAYBE A COUNCILMEMBER IS NOT HERE ANYMORE. MAYBE OTHER THINGS CHANGED, ET CETERA. I APPRECIATE THAT WE'RE SAYING THIS.
ITEM NO. 4 THAT YOU HAD -- MY APOLOGIES. I WAS ACTUALLY ON THE PHONE WITH MY DAD'S DOCTOR. I WAS ON HOLD SO I DIDN'T WANT TO LOSE THAT.
I STEPPED OUT DURING ANDY'S PRESENTATION. I CAN'T PINPOINT THE SLIDE NUMBER BUT IT WAS A SLIDE THAT SAYS GOVERNANCE DETERMINES, FOR POLICY REASONS, THAT ADMINISTRATION SHOULD NOT BE -- THERE IT IS. THAT THE ACTION SHOULD NOT BE RECOMMENDED. CAN YOU EXPLAIN THAT A LITTLE BIT MORE? I'M SO SORRY. MY APOLOGIES AGAIN TO YOU, ANDY.
>> SEGOVIA: CCRS AND, AS I SAID, EITHER REFER THEM TO COUNCIL SUBCOMMITTEES OR THE FULL COUNCIL OR DECIDE, BASED ON COUNCIL PRIORITIES OR POLICY THAT IT'S NOT SOMETHING THAT SHOULD BE FORWARDED TO THE FULL COUNCIL. THAT'S WHAT THAT NO. 4 IS
ACKNOWLEDGING. >> GARCIA: TO THE COUNCILWOMAN'S POINT EARLIER, IF I UNDERSTOOD CORRECTLY, THEN THE CITY MANAGER HAS THE ABILITY NOW TO SAY WE CAN DO THIS. LET'S MOVE FORWARD WITH ONLY FIVE SIGNATURES.
ESSENTIALLY? >> SEGOVIA: THAT'S CORRECT. IF IT'S SOMETHING THAT THE CITY MANAGER IS ALREADY IMPLEMENTING. IT WAS REALLY MEANT, COUNCILWOMAN -- WE HAVE HAD CCRS THAT ASK FOR ACTION THAT THE CITY MANAGER HAD ALREADY
EITHER -- IT'S ALREADY MOVING FORWARD. >> GARCIA: OKAY.
GOT IT. I WAS ABOUT TO ASK WHO IS THE POLICYMAKER IN THIS SITUATION?
>> WALSH: I'LL ALSO SAY -- I CAN FORESEE ANOTHER POTENTIAL SCENARIO WHERE IT IS A
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RELATIVELY -- MAYBE IT'S NOT SOMETHING THAT IS IN PROCESS OR GOING TO BE KICKED OFF BUT IS CONSISTENT WITH THE COUNCIL'S PREVIOUS ACTIONS. I'M GOING TO PICK ON COUNCILMAN PELAEZ. HE DID A CCR ON HOMELESS ENCAMPMENT NOTIFICATION.WE JUST GOT THROUGH TALKING ABOUT DOING A WHOLE BUNCH MORE IN TERMS OF ENCAMPMENT AND COMMUNICATION. I CAN SEE THAT AS ALMOST SOMETHING THAT WILL HAVE AN INITIAL CONVERSATION HERE AND DEPENDING ON THE STAFF PRESENTATION, WE MAY BE ABLE TO GET MOVING QUICKLY. BUT I THINK IT DEPENDS ON THE SCENARIO.
SOMETHING NEW PROBABLY IS GOING TO REQUIRE FULL COUNCIL OR AT LEAST COMMITTEE WORK.
>> GARCIA: GOT IT. AND THAT'S KIND OF WHAT I WAS GETTING AT AND I JUST WANT TO MAKE SURE -- THERE'S FIVE OF US AND I SIGNED ON TO 51 OF THESE WITH FOUR COLLEAGUES.
BUT THERE'S A LOT MORE I DIDN'T SIGN ON TO AND THE MAJORITY OF MY COUNCIL COLLEAGUES DID NOT SIGN ON TO THOSE IDEAS SO I WOULD BE WARY OF WHERE WE'RE GOING.
I WOULD ALSO LIKE TO CONSIDER THAT ANYTHING THAT HAS TO DO WITH OUR UTILITIES, FOR INSTANCE, HAS AN EXTRA LEVEL, AN ADDED LEVEL. DID YOU TALK ABOUT THAT OR MAYBE CONSIDER THAT? AND THE ONLY REASON THAT I'M ASKING IS BECAUSE I FEEL THAT THAT AFFECTS A LOT MORE PEOPLE. AND SO I WANT TO MAKE SURE
WE'RE CAUTIOUS. >> WALSH: SO IT MAKES THE CITY MANAGER WARY AS WELL.
ANYTHING INVOLVING MAJOR LEGAL ASPECTS OF THIS CORPORATION WOULD NOT BE ONE OF THOSE THINGS THAT WOULD BE JUST DONE. IT WOULD STILL REQUIRE THE STRUCTURE OF GOVERNANCE AND THE STRUCTURES THAT THE MAYOR SET UP AND THAT POLICY-LEVEL DISCUSSION IN ADVANCE OF A FULL COUNCIL WOULD NEED TO REMAIN -- WE'RE TALKING ABOUT VERY LOW-HANGING FRUIT. THE ANIMAL CARE STRATEGIC PLAN LAST YEAR IS AN EXAMPLE.
WE HAD ALREADY ANNOUNCED IN THE BUDGET IN THE SUMMER OF '22 THAT WE WERE REDOING THE STRATEGIC PLAN. A CCR CAME OUT A COUPLE MONTHS LATER SAYING DO A STRATEGIC PLAN. WE BOTH GOT TO THE SAME SPOT BUT THAT'S AN EXAMPLE I CAN
GIVE YOU. >> GARCIA: OKAY. >> SEGOVIA: IF I MAY, COUNCILWOMAN, AGAIN I WANT TO REITERATE ANYTHING THAT REQUIRES AN ORDINANCE HAS TO GO TO FULL COUNCIL. IF WE TRULY ARE TALKING ABOUT THE EXCEPTIONS, NOT THE RULE.
>> GARCIA: I JUST WANTED TO CLARIFY THAT. I WAS WORRIED ABOUT THAT.
AND ALSO -- AND SO MY INITIAL THOUGHTS ON THIS IS LET'S HAVE A DASHBOARD, BECAUSE WE LOVE DASHBOARDS AT THE CITY. BUT I THINK DEBBIE AND HER TEAM HAVE DONE A REALLY GOOD JOB.
I THINK IT WAS DEBBIE BUT SHE HAS LIKE A WHOLE ONLINE WHERE YOU CAN CHECK ALL OF THE CCRS. I REALLY APPRECIATE THAT BECAUSE TIME AND TIME AGAIN I'M LIKE DIDN'T I SIGN SOMETHING LIKE THAT ALREADY WITH COUNCILMAN PELAEZ? OR DIDN'T WE TALK ABOUT THIS? SO THAT'S VERY HELPFUL. BUT I DO APPRECIATE THE FACT THAT WE'RE WORKING ON THIS. BECAUSE SOMETIMES IT TAKES A LITTLE BIT OVER A YEAR.
AND SO SOMETIMES THINGS THAT CAN BE DONE FASTER. FULL DISCLOSURE, I HAVE HAD COLLEAGUES COME UP WITH ME WITH CCRS AND I SAY WE'RE ALREADY DOING THIS OR DID YOU ASK ERIK? HE CAN DO THIS ADMINISTRATIVELY.
I THINK SOMETIMES CCRS ARE USED FOR OTHER PURPOSES, RIGHT? AND SO I JUST WANT TO -- THOSE 51 I MIGHT HAVE SIGNED ON TO ONE THAT MIGHT HAVE BEEN FOR OTHER PURPOSES, ET CETERA. SO I UNDERSTAND. SO I APPRECIATE THAT WE ARE LOOKING FOR THAT. THE OTHER SUGGESTION FOR BUDGET CONSIDERATION -- SO THE BUDGET REQUEST ONE. ON THIS, SOMETHING MAYBE MORE OF A POLICY CHANGE OR SOMETHING COULD TURN INTO A SMALLER LINE ITEM. IF THERE'S AN EXISTING PROGRAM BUDGET, RIGHT? ERIK, THAT'S KIND OF WHAT YOU WERE SAYING. SO I APPRECIATE THAT.
WHO FOLLOWS BACK UP, THOUGH? SO WHEN ARE WE TOLD, AS A GOVERNANCE COMMITTEE -- LIKE IF WE NEVER HEAR THEM, IS SOMEBODY GOING TO FOLLOW UP WITH THE GOVERNANCE COMMITTEE AND SAY
HERE'S WHAT WAS DONE? >> WALSH: SO IF WE FOLLOW THE PROCESS OF A CCR THAT HAS A -- THAT NEEDS A FINANCIAL REVIEW AND WE COME BACK TO GOVERNANCE AND IT IS NOT CONSISTENT OR NOT POSSIBLE WITHOUT CHANGING PRIORITIES, THEN THE SUGGESTION ON NO. 3 THERE ON THAT SLIDE IS THAT ITEM GO TO THE NEXT BUDGET GOAL-SETTING SESSION SO THE COUNCIL CAN WEIGH IN ON THE ISSUE. SO THE RELATIVE EXPENSE OF THAT WILL WEIGH INTO IT.
WE'LL CREATE A NEW PROCESS TO SAY, YOU KNOW, NEXT APRIL WHEN WE DO BUDGET WORK SESSION, YOU
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KNOW, A SLIDE THAT SAYS HERE ARE CCRS FROM THE LAST NINE MONTHS THAT HAVE BEEN PRODUCED, THAT HAD A SIGNIFICANT FINANCIAL IMPACT. AND THEN THE COUNCIL CAN WEIGHIN THERE IN ADVANCE AND DURING BUDGET WORK SESSION. >> GARCIA: GOOD.
>> WALSH: IF IT'S SOMETHING THAT IS NEW, HAS A SIGNIFICANT FINANCIAL IMPACT, IS A MAJOR CHANGE AND SIGNIFICANT CHANGE FROM OUR CURRENT SPENDING PRIORITIES, THEN THAT'S WHERE IT WOULD BE. WE WOULD KEEP TRACK OF THAT AND WE WOULD REPORT IT LIKE THAT IN
A NEW CATEGORY WITH THE BUDGET. >> GARCIA: I LIKE THAT BECAUSE RIGHT NOW I THINK IT'S ONLY ON THE B SESSION FORECAST UNDER "GOVERNANCE" BUT I FEEL LIKE SOME OF THEM FALL OFF AND I'M LIKE WHERE DID THIS GO? BUT IT HAD GONE THROUGH A PROCESS. I'M GLAD Y'ALL ARE PUTTING IT INTO THE BUDGET GOAL SETTING.
THOSE ARE ALL MY COMMENTS. THANK YOU SO MUCH. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER ROCHA GARCIA. COUNCILMEMBER PELAEZ.
>> PELAEZ: THANK YOU. I GET IT. I THINK IT'S IMPORTANT TO HAVE RULES AND TO BE ABLE TO PROVIDE US WITH SOME ABILITY TO FORESEE WHAT HAPPENS AFTER A CCR IS TURNED IN. I'LL TELL YOU PHILOSOPHICALLY I THINK NO. 4 ON THIS SLIDE IS A MISTAKE. AND I DON'T LIKE IT. I THINK -- IT OFFENDS MY SENSE OF FAIRNESS. I DON'T THINK THAT THIS COMMITTEE'S JOB SHOULD BE TO KILL A CCR AND TAKE IT AWAY FROM COUNCIL'S FULL CONSIDERATION OR TO TAKE IT AWAY FROM A COUNCIL COMMITTEE FROM CONSIDERING IT. IT'S BEEN DONE TO ME, BECAUSE REALLY IT DOESN'T REQUIRE THIS COMMITTEE TO DO IT, IT JUST REQUIRES THREE PEOPLE ON THIS COMMITTEE TO KILL A CCR. SO THREE PEOPLE KILLED A CCR OF MINE MY FIRST YEAR HERE.
I'M NOT BITTER ABOUT IT. I GOT OVER IT. MY THERAPIST AND I TALKED ABOUT IT AT LENGTH. [LAUGHTER] BUT THE REALITY IS THAT'S ALL IT TOOK. AND FIVE COLLEAGUES SIGNED ON TO A DOCUMENT.
WE SUBMITTED IT AND ONLY THREE PEOPLE WERE ABLE TO KILL A CCR.
I THINK THAT FLIES IN THE FACE OF COLLABORATIVE GOVERNMENT. AND I'D LIKE TO SEE THIS GO ON WITH US STRIPPING NO. 4 OUT OF THERE. TODAY, COUNCILWOMAN, WE'RE HEARING ONE OF YOUR ITEMS AND ALL WOULD BE REQUIRED TO KILL IT IS THREE OF US SAYING NO.
FOR EITHER GOOD REASONS OR CYNICAL REASONS. AND THAT WOULD BE UNFAIR TO YOU. AND, YOU KNOW, SAME GOES FOR ALL OF US WHO HAVE SIGNED CCRS. I DON'T SEE WHY WE NEED TO PRESERVE THE TOOL TO -- FOR THIS COMMITTEE TO BE THE JUDGE AND THE JURY AND THE EXECUTIONER OF A CCR WHEN REALLY IT'S MORE APPROPRIATE FOR THE COMMITTEES TO GO DO THE VETTING AND DO THE WORK.
ANYWAY, THAT'S WHERE I AM ON THAT AND I'M NOT GOING TO DIE ON THE HILL TODAY OVER IT, UNLESS I HEAR OTHERWISE THAT YOU GUYS ARE WILLING TO STRIP NO. 4 FROM IT, I'LL VOTE IN FAVOR OF IT. BUT I DO THINK THAT ONE CAN SAY, WELL, THAT'S RARE.
WELL, IN THOSE RARE INSTANCES I THINK IT'S WRONG. I THINK IT'S REALLY UNFAIR TO OUR COLLEAGUES THAT SUBMIT CCRS TO US. I'LL LEAVE IT AT THAT.
>> SEGOVIA: THE ONLY THING I WOULD MENTION, COUNCILMAN, AND OBVIOUSLY THAT'S A POLICY CONSIDERATION FOR THIS GOVERNANCE COMMITTEE AND THE FULL COUNCIL.
BUT THE REASON WE HAVE THAT THERE IS THAT'S ESSENTIALLY THE SAME AUTHORITY, FOR LACK OF A BETTER WORD, THAT THE COUNCIL COMMITTEES HAVE. WHEN THIS GOVERNANCE COMMITTEE ASSIGNS THINGS TO COUNCIL COMMITTEES FOR CONSIDERATION, THEY DETERMINE WHETHER IT GETS FORWARDED TO FULL COUNCIL OR NOT. I WANTED TO MATCH -- THAT WAS
THE REASON FOR IT. >> PELAEZ: I UNDERSTAND BUT THIS COULD TURN -- WHAT IT FELT LIKE BACK THEN AND WHAT I IMAGINE IT FELT LIKE TO OTHER FOLKS TO WHOM THIS HAPPENS, IT MUST FEEL THE SAME WAY AS IT FEELS TO SEE ONE OF YOUR BILLS DIE AT CALENDARS IN THE LEGISLATURE. IT'S WRONG TO HAVE A CALENDAR KILL YOUR COMMITTEE THAT NEVER
GOT THE MERITS OF THE BILL HEARD. >> MAYOR NIRENBERG: I'LL JUST RESPOND. I AGREE WITH WHAT YOU SAID, ANDY.
THE DIFFERENCE BEING HERE OF COURSE THAT THE PURPOSE OF THIS ORDINANCE TO BEGIN WITH AND THE REVISION I THINK WE'RE LOOKING AT IS TO MAKE SURE THAT EVERY CCR DOES GET A HEARING.
AND THAT'S REALLY WHY THE GOVERNANCE COMMITTEE EXISTS IS TO PROVIDE HEARING FOR THOSE POLICY RECOMMENDATIONS. WHAT I HAVE TRIED TO DO -- AND THIS WILL BE A DISCRETION OF THE MAYOR MOVING FORWARD -- IS TO MAKE SURE THAT THE MEMBERS OF THIS COMMITTEE REPRESENT THE CHAIRS, THE MAJOR COMMITTEES THAT EXIST HERE. SO THE CONVERSATION ON THE MERITS OF A PROPOSAL, ONCE IT'S READY TO HAVE THAT CONVERSATION, IS REALLY THAT MEATY POLICY DISCUSSION THAT EVERY CCR DESERVES. I WOULD ALSO SUGGEST THAT EVERY
[00:30:01]
COUNCIL COMMITTEE, INCLUDING THIS ONE, NEEDS TO HAVE DISCRETION.AND SO IF WE'RE GOING TO SCRIPT OUT HOW EVERY PROPOSAL GETS HEARD AND EVERY METHOD IN THIS COMMITTEE, YOU REMOVE THE DISCRETION OF THE MEMBERS AROUND THIS TABLE.
AND WHEREAS THIS BODY REPRESENTS THE SENIOR MEMBERS OF COUNCIL, I WOULD PREFER NOT TO DO THAT. SO, AGAIN, I THINK THIS IS A GOOD CLARIFICATION OF THE EXISTING PROCESS AND I'M WILLING TO SUPPORT IT TODAY AND MOVE IT TO COUNCIL.
COUNCILMEMBER COURAGE. >> COURAGE: THANK YOU, MAYOR.
I EMPATHIZE WITH WHAT YOU'VE JUST SAID, COUNCILMAN. I UNDERSTAND THAT EVERYBODY WHO PUTS TOGETHER A CCR WOULD LIKE TO HAVE IT GET THE FULL CONSIDERATION.
BUT A LOT OF TIMES SITUATIONS CHANGE OVER TIME. I'VE SIGNED A CCR WITH A CERTAIN UNDERSTANDING. AND THEN OVER THE WEEKS THAT IT MAY GO THROUGH A PROCESS, I FIND OUT, WELL, THAT'S NOT EXACTLY WHAT I THOUGHT AND I'M NOT GOING TO TAKE MY SIGNATURE OFF. I'M GOING TO RELY ON THE SYSTEM TO SAY WHAT I THINK AND OTHERS TO HAVE SOME INPUT INTO IT. SO I THINK IT'S STILL A GOOD THING TO HAVE AS A STOP WHEN WE UNDERSTAND SITUATIONS ARE SOMEWHAT DIFFERENT THAN WHAT WE EXPECTED WHEN IT WAS WRITTEN A MONTH AGO OR TWO MONTHS AGO OR WHATEVER. BUT I'LL ALSO SAY THIS: THERE'S NEVER BEEN AN ISSUE I HAVEN'T BEEN WILLING TO SIT DOWN AND DISCUSS.
AND I THINK THAT'S REALLY WHAT'S MOST IMPORTANT WITH THIS COUNCIL IS THAT WE'RE ALL WILLING TO SIT DOWN AND TALK ABOUT JUST ABOUT ANYTHING THAT'S BROUGHT UP TO US.
AND HAVE AN UNDERSTANDING OF ALL SIDES. ANYWAY, THAT'S MY COMMENT ON
THAT. >> MAYOR NIRENBERG: ALL RIGHT.
ANY FURTHER DISCUSSION? THERE IS A MOTION AND A SECOND TO MOVE THIS PROPOSAL FORWARD.
ERIK, DID YOU WANT TO SAY SOMETHING? >> WALSH: I'LL JUST ADD, IF APPROVED BY THE GOVERNANCE COMMITTEE, THEN WE WILL PLACE IT ON THE NOVEMBER 2 AGENDA,
THE ORDINANCE. >> MAYOR NIRENBERG: OKAY. GREAT.
HEARING NO FURTHER DISCUSSION, ALL IN FAVOR SAY AYE. >>
>> MAYOR NIRENBERG: ANY OPPOSED? MOTION CARRIES.
WE'LL GO NOW TO ITEM NO. 3. I THINK ONE OF THE CLIP ART IMAGES FROM ACS SLIPPED ITS WAY INTO THIS PRESENTATION, ERIK. WHO'S GOT THE PRESENTATION? OH, BEN.
YOU'RE UP. >> GORZELL: GOOD MORNING, MAYOR AND COUNCIL MEMBERS.
THIS MORNING I WANT TO COVER SOME INFORMATION ON CPS ENERGY.
I'M GOING TO COVER A COUPLE DIFFERENT AREAS. I WANT TO TALK ABOUT OUR OWNERSHIP OF CPS ENERGY. I'LL THEN TALK A LITTLE BIT AND SUMMARIZE THE CITY COUNCIL CONSIDERATION REQUEST AND THEN I'M GOING TO WRAP UP WITH AN ALTERNATIVE APPROACH THAT WE HAVE DEVELOPED THAT WE WANT TO PUT FORWARD FOR CONSIDERATION. SO, AGAIN, LET ME START WITH SOME BACKGROUND ON CPS ENERGY. THE CITY HAS OWNED THE UTILITY SINCE 1942 AND UNDER OUR OWNERSHIP MODEL, THE COMMUNITY AND THE GREATER SAN ANTONIO AREA HAVE BENEFITED TREMENDOUSLY. THE BENEFITS THAT THE COMMUNITY INCLUDE A UTILITY WITH A STRONG TRACK RECORD ON RELIABILITY AND ON COMPETITIVE ENERGY RATES. AND THEN WE HAVE THAT COUPLED WITH A RETURN TO THE CITY THROUGH A GENERAL FUND TRANSFER THAT SUPPORTS BASIC SERVICES FOR THE CITIZENS OF SAN ANTONIO. WHO IN THIS CASE ARE THE OWNERS OF THE UTILITY. REGARDING THE TRANSFER TO THE CITY, LET ME TALK A LITTLE BIT ABOUT THAT. UNDER THE BOND INDENTURE WITH CPS, THE CITY CAN RECEIVE UP TO 14% OF THE GROSS REVENUES OF THE UTILITY. THIS PAYMENT FROM CPS ENERGY IS REALLY COMPARABLE TO A PRIVATE UTILITY FROM A NUMBER OF DIFFERENT PERSPECTIVES.
ONE, IF CPS ENERGY WERE A PRIVATE UTILITY, THEY WOULD BE PAYING THE CITY FOR USE OF THE PUBLIC RIGHT OF WAY. IF THEY WERE A PRIVATE UTILITY, THEY WOULD BE PAYING PROPERTY TAXES ON ALL OF THEIR ASSETS TO INCLUDE THEIR GENERATION ASSETS.
PART OF THE PAYMENT REPRESENTS A PAYMENT IN LIEU OF TAXES. AND THEN THE THIRD COMPONENT IS A RETURN TO THE SHAREHOLDERS AND IN THIS CASE THOSE ARE THE CITIZENS OF SAN ANTONIO.
SO THAT RETURN COMES BACK TO THE CITY VIA THE GENERAL FUND TRANSFER SO RATHER THAN A PROFIT BEING GENERATED FOR PRIVATE INVESTORS, WE'VE GOT A RETURN TO SHAREHOLDERS OF THE UTILITY, THE CITIZENS IN THE FORM OF BASIC CITY SERVICES. IT'S REALLY A STRONG MODEL THAT WAS PUT IN PLACE MANY, MANY YEARS AGO. LET ME JUST SUMMARIZE THE CITY
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COUNCIL CONSIDERATION REQUEST. SO IN SUMMARY, THE CCR TALKS ABOUT RETURNING A PORTION OF OUR CITY PAYMENTS. SO REDUCING THE CURRENT 14% OF GROSS REVENUE TRANSFER, THAT RATE DOWN TO EITHER 12% OR 11%. IF YOU WERE REDUCING IT BY 2% OR 3%, RETURNING THOSE FUNDS TO CPS ENERGY AND THEY WOULD USE THOSE TO FUND RESILIENCY AND RELIABILITY PROJECTS WITHIN CPS ENERGY. THE CCR ALSO HAD THE GOAL OF TRYING TO STAVE OFF RATE INCREASES FOR A MINIMUM OF AT LEAST FIVE YEARS.WHEN WE TALK ABOUT RATE INCREASES FROM CPS ENERGY, IF THEY'VE COME FORWARD AND THEY'RE ASKING FOR A RATE CASE, WHAT THEY'RE LOOKING FOR IS RECURRING REVENUE SUPPORT FOR THE BUSINESS REQUIREMENTS OF THE UTILITY. IT'S GOING TO BE IN THE FORM OF INCREASED OPERATIONS AND MAINTENANCE COSTS. IT COULD BE CHANGES IN THE CAPITAL PROGRAM. AND WHEN WE'RE GOING TO THAT BUSINESS CASE, WE WILL PRESENT THAT TO YOU ALONG WITH THE UTILITY. WHAT'S DRIVING THE NEED FOR THE RATE INCREASE. IT COULD BE A NUMBER OF DIFFERENT FACTORS BUT WE TRY TO OUTLINE THAT. I THINK THE KEY POINT IS THE MAJORITY OF THE TIME IT IS GOING TO BE LOOKING FOR LONG-TERM RECURRING RATE SUPPORT.
SO IF YOU WERE TO DO SOMETHING LIKE THIS, IT WOULD NEED TO BE SOMETHING PERMANENT AND RECURRING FOR A LONG DURATION OF TIME. THE LAST RATE CASE THAT WAS SUBMITTED BY CPS ENERGY THAT WE LOOKED AT WAS IN THE FALL OF 2021.
THE COUNCIL DID APPROVE A RATE INCREASE IN JANUARY OF JANUARY 2022 AS WE CAME OUT OF THAT PROCESS. I WANT TO USE A LITTLE BIT OF THE FORECAST THAT WAS PRESENTED AT THAT POINT IN TIME TO TALK ABOUT THE CCR A LITTLE BIT. SO AT THAT POINT IN TIME, CPS WAS PROJECTING A 5.5% RATE INCREASE IN ITS FISCAL YEAR 2025.
AND IN THEIR FISCAL YEAR 2027. SO BOTH OF THOSE AT 5.5%. EACH OF THOSE WOULD GENERATE AN ADDITIONAL $110 MILLION FOR THE UTILITY. JUST TO CLARIFY, WHEN I TALK ABOUT THE CPS FISCAL YEAR 2025 YEAR, IT'S CONFUSING BECAUSE THEIR YEAR RUNS FEBRUARY 1 TO JANUARY 31ST SO THEIR FISCAL YEAR IS GOING TO START FEBRUARY 1 OF 2024.
IT'S COMING UP. THAT'S RIGHT AROUND THE CORNER HERE.
BUT I WANT TO USE THAT RATE FORECAST OF 5.5% OF THOSE TWO YEARS TO TALK ABOUT THE CCR BUT I ALSO WANT TO BE CLEAR THAT WAS THE FORECAST FROM 2021 AS WE WENT TO THAT RATE CASE.
OUR TEAM IS WORKING WITH THE CPS ENERGY TEAM ON A POTENTIAL RATE INCREASE.
THAT WORK IS ONGOING. THERE ARE A WHOLE NUMBER OF UPDATES BEING MADE ON ASSUMPTIONS, FINANCIAL MODELS, BUDGET. WE'RE EARLY ON IN THAT PROCESS. ALSO LOOKING AT, YOU KNOW, CPS ENERGY WAS ABLE TO GET SOME ADDITIONAL REVENUES IN THE WHOLESALE MARKET AS WELL AND ADDITIONAL REVENUES OVERALL.
WE'RE WORKING WITH THEM ON HOW TO, IN A VERY STRATEGIC WAY, DEPLOY THOSE RESOURCES IN AN EFFICIENT MANNER. SO WE'RE LOOKING AT DIFFERENT SCENARIOS AND OPTION WITH THEM. IF THAT RATE CASE COMES FORWARD, THAT WOULD BE PART OF THE DISCUSSION WE HAVE WITH THE MAYOR AND FULL COUNCIL. WHEN WE TALK ABOUT A REDUCTION IN CITY PAYMENT IN THE RATE OF 2% OR 3%, 2% IS EQUIVALENT TO ABOUT $60 MILLION IN RECURRING REVENUE. 3% IS ABOUT $90 MILLION IN RECURRING REVENUE.
IN ORDER FOR US TO STAY BALANCED, WE WOULD NEED A RECURRING REDUCTION IN GENERAL FUND SERVICES OR EXPENSES IN AN EQUIVALENT AMOUNT. I TALKED ABOUT THE 5.5% IN EACH OF THOSE TWO YEARS, '25 AND '27. EACH OF THOSE WOULD BE GENERATING $110 MILLION. IF YOU WENT TO AN 11% GENERAL FUND TRANSFER, THAT WOULD SHIFT $90 MILLION BACK TO CPS. WOULD NOT FULLY OFFSET THAT 5.5% RATE INCREASE, ASSUMING THAT'S WHAT IT WAS. I'M NOT SAYING THAT TODAY. THAT WAS AN OLDER FORECAST.
IT WOULD NOT FULLY OFFSET THAT ONE OR BEGIN TO ADDRESS THE ONE IN 2027.
THINGS DRIVING UP RATES AND WE'LL HAVE THAT CONVERSATION AS PART OF THAT RATE CASE IF THAT GETS SUBMITTED AND WE MOVE FORWARD WITH THAT. WHEN WE TALK ABOUT A REDUCTION IN GENERAL FUND EXPENSES, IF THE COUNCIL WERE TO DO THIS -- I'M GOING TO USE THIS SLIDE TO TALK ABOUT IT. YOU HAVE ALL SEEN THIS MANY, MANY TIMES.
THIS IS THE INFAMOUS SPINNING WHEEL THAT WE LIKE TO PUT IN THE BUDGET THAT TALKS ABOUT OUR MAJOR REVENUE SOURCES ON THE OUTSIDE OF THIS GRAPHIC. ON THE INSIDE OF THIS GRAPHIC IT SHOWS OUR MAJOR EXPENSE OR SERVICES CATEGORIES. WHEN YOU LOOK AT THE GENERAL FUND FOR FY2024 IT'S $1.6 BILLION. IT HAS 8,537 POSITIONS FUNDED IN IT. 4,482 OF THOSE ARE PUBLIC SAFETY, OR ABOUT 52%.
[00:40:04]
AND THEN WHEN YOU LOOK AT THAT $1.6 BILLION, $1.1 BILLION IS FOR PERSONNEL AND BENEFITS COSTS. SO OBVIOUSLY A LARGE PART OF US DELIVERING SERVICES TO THE COMMUNITY ARE POSITIONS, PEOPLE, SALARIES, AND BENEFITS ARE A LARGE PIECE OF THAT.IF WE WERE TO LOOK AT THE INNER CIRCLE THERE AND TALK ABOUT THE BASIC CITY SERVICES THAT ARE BEING FUNDED THERE AND I WERE TO MAKE SOME ASSUMPTIONS ABOUT SOME OF THE PRIORITY AREAS THAT YOU ALL HAVE TALKED ABOUT THE LAST SEVERAL BUDGET SESSIONS AND START TO GO AROUND THAT WHEEL, LET'S SAY WE'RE NOT GOING TO DO A REDUCTION IN THE POLICE, FIRE, AND PUBLIC SAFETY. THAT'S $967.1 MILLION. WE DIDN'T DO A REDUCTION IN PUBLIC WORKS AND WE DIDN'T DO A REDUCTION IN PARKS OF $68.6 MILLION, THAT WOULD LEAVE THE OTHER DEPARTMENTS AT $440.3 MILLION. IF WE WERE TO DO A $60 MILLION CUT OUT OF THERE, THAT'S ABOUT 13.6%. IF WE WERE TO DO $90 MILLION, THAT'S ABOUT 20%. BUT THOSE OTHER DEPARTMENTS ALSO INCLUDE AREAS THAT WE HAVE MADE INVESTMENTS IN BASED ON THE PRIORITIES THAT YOU ALL HAVE SET.
LIKE ANIMAL CARE SERVICES, LIBRARIES, HUMAN SERVICES, DELEGATE AGENCIES.
YOU CAN SEE AS THE PIE STARTS TO GET SMALLER, THAT BECOMES MORE AND MORE CHALLENGING.
THE TAKEAWAY IS IF THIS WAS SOMETHING THAT A MAJORITY OF THE COUNCIL WANTED TO PURSUE, I THINK WE WOULD HAVE TO BE TALKING ABOUT CUTTING WHOLE PROGRAMS OR DEPARTMENTS.
THAT'S SOMETHING THAT COULD KIND OF DO ACROSS THE BOARD. WE WOULD NOT REALLY BE IN A POSITION WHERE WE COULD FUNCTION IF WE GOT DOWN TO A SMALLER POOL OF DOLLARS THAT WE WERE TRYING TO REDUCE THIS CUT FROM. IF THIS IS SOMETHING THE COUNCIL WANTED TO PURSUE, THEN CITY STAFF WOULD REQUEST A B SESSION WHERE WE COULD GET FEEDBACK FROM THE FULL COUNCIL ABOUT THE AREAS THAT YOU WOULD LIKE TO EITHER ELIMINATE OR SUBSTANTIALLY REDUCE IN ORDER TO IMPLEMENT THE CCR. NOW LET ME PIVOT FROM THE CCR TO AN ALTERNATIVE APPROACH. SO AS WE LOOKED AT THE OBJECTIVES IN THE CCR, THERE ARE A COUPLE THERE. TRYING TO SUPPORT THE BUSINESS REQUIREMENTS OF CPS ENERGY TO INCLUDE FUNDING RESILIENCY AND RELIABILITY PROJECTS. IT TALKS ABOUT REINVESTING A PORTION OF OUR CITY PAYMENT IN THOSE KINDS OF PROJECTS. BUT DOING SO IN A WAY THAT DOESN'T SIGNIFICANTLY IMPACT CITY SERVICES. AND THEN ALSO LOOKING AT WAYS THAT WE COULD TRY TO LOWER FUTURE RATE INCREASES. SO WE TRY TO LOOK AT THOSE OBJECTIVES AND IN COLLABORATION WITH COUNCILWOMAN CABELLO HAVRDA, WE TALKED ABOUT DEVELOPING AND EXPLORING OPTIONS AND DEVELOPED THIS ALTERNATIVE APPROACH.
THE ALTERNATIVE APPROACH IS REALLY TO TAKE ONE OF OUR EXISTING FINANCIAL POLICIES AND AMEND IT. AND IT IS THE ONE RELATED TO OUR PAYMENT FROM CPS ENERGY.
SO JUST AS A REMINDER, THIS IS THAT CURRENT FINANCIAL POLICY. IT WAS SOMETHING THAT YOU ADOPTED AS PART OF THE FY '24 BUDGET BUT IT WAS SOMETHING THAT WE TALKED WITH Y'ALL ABOUT AS PART OF THE GOAL-SETTING SESSION BACK -- I WANT TO SAY APRIL OF LAST YEAR.
AND IT WAS REALLY COMING OFF OF FY '22 THAT THERE WAS A LOT OF CONVERSATION ABOUT THE ADDITIONAL REVENUE THAT WAS GENERATED ABOVE THE ADOPTED BUDGET AND ABOUT COUNCIL HAVING THE ABILITY TO HAVE INPUT INTO THAT. IN PRACTICE, WE'VE ALWAYS TRIED TO BE VERY CAREFUL WITH THE REVENUES COMING IN FROM CPS ENERGY, TO MAKE SURE WE TRY TO UNDERSTAND WHAT'S DRIVING THAT AND NOT BILL THINGS THAT ARE ONE-TIME IN NATURE, UNUSUAL OF THE ORDINARY IN OUR BASE BUDGET AND CREATE OUR OWN FISCAL CHALLENGES BY DOING SO .
WE HAVE HAD POLICIES IN PLACE THAT HAVE HELPED US MANAGE THAT AND PRACTICES.
THIS TOOK ONE OF THOSE, FORMALIZED IT, AND WENT FURTHER AND SAID IF WE'VE GOTTEN TO THE POINT WHERE WE'RE GENERATING MORE THAN 10% ABOVE THE ADOPTED BUDGET FOR OUR REVENUES FROM CPS ENERGY, THAT PORTION ABOVE 10%, WE'RE GOING TO SET IT ASIDE AND HAVE AN ADDITIONAL CONVERSATION WITH THE COUNCIL AND GET YOUR INPUT BEFORE WE MAKE ANY RECOMMENDATION OF HOW THOSE FUNDS COULD BE USED. THE -- JUST TO GIVE A CLEAR EXAMPLE OF THAT, FOR FY '24, THE ADOPTED BUDGET FOR OUR TRANSFER FROM CPS ENERGY IS $421 MILLION.
SO WITH THIS POLICY, THE FIRST $42.1 MILLION, OR 10%, STAYS WITHIN OUR BASE BUDGET.
THAT'S HOW WE MANAGE THE FLUCTUATIONS FROM YEAR TO YEAR.
WE TALKED ABOUT THE FACT THAT WE'RE TRYING TO SMOOTH OUT THE PEAKS AND VALLEYS, NOT ONLY IN OUR REVENUES FROM CPS ENERGY BUT ALL OF OUR REVENUES. AND I'LL USE THE ANALOGY I KIND OF USED BACK WHEN WE WERE DOING THE BUDGET SESSION BACK IN SEPTEMBER.
WE'RE TRYING TO SMOOTH OUT THE PEAKS AND VALLEYS. IT'S ALMOST LIKE WE'RE BUILDING A ROAD IN FRONT OF US. THE ROAD IS OUR OPERATIONAL EXPENSES.
WE'RE TRYING TO INVEST IN THE PRIORITY AREAS BUT WE'RE TRYING TO SMOOTH OUT THE PEAKS AND VALLEYS AND MAKE THEM MORE LIKE HILLS, BUMPS, LITTLE DIPS IN THE ROAD.
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THIS POLICY ALLOWS US TO DO THAT. SO THE 10% PIECE IS IMPORTANT BECAUSE SOME YEARS WE CAN BE JUST A LITTLE BIT OVER BUDGET. SOME YEARS WE CAN BE UNDER BUDGET AND SOME YEARS WE CAN BE A LOT OVER BUDGET. $42MILLION, ASSUMING WE GENERATED THAT MUCH, STAYS WITHIN THE BASE BUDGET, DOESN'T CHANGE.THE PORTION THAT'S ABOVE 10% WOULD THEN GO AND BE SET ASIDE.
WE WOULD HAVE FURTHER CONVERSATION WITH THE COUNCIL AND GET YOUR INPUT BEFORE WE MADE A RECOMMENDATION. THE RECOMMENDED APPROACH TAKES THAT POLICY AND FURTHER REFINES IT. IT SAYS RATHER THAN SETTING THOSE DOLLARS ASIDE, ONCE WE HIT THAT 10% THRESHOLD, WE'RE GOING TO ALLOCATE OR DESIGNATE WHERE THAT MONEY GOES WITH THIS POLICY. IT'S BROKEN OUT HERE ON THE SLIDE.
80% OF THAT AMOUNT OVER THE 10% WOULD GO BACK TO CPS ENERGY TO HELP THEM FUND RESILIENCY AND RELIABILITY PROJECTS. THE OTHER 20% WOULD GO INTO THE CITY'S REES FUND AND THAT WOULD BE THE BREAKDOWN IN TERMS OF HOW WE WOULD SPLIT THAT AMOUNT OVER THE 10%.
JUST TO GIVE YOU A LITTLE BIT OF CONTEXT, WE TOOK IT AND SAID IF THIS POLICY HAD BEEN IN PLACE FOR THE LAST 20 YEARS, A TOTAL OF $137.6 MILLION WOULD HAVE BEEN ABOVE THAT 10% THRESHOLD OF THE ADOPTED BUDGET AND WOULD HAVE BEEN SPLIT BETWEEN CPS ENERGY RESILIENCY AND RELIABILITY PROJECTS AND THE REES FUND. OF THAT TOTAL, $61.1 MILLION IS FROM THE LAST TWO FISCAL YEARS. THE LAST TWO YEARS IS FY '22 AND FY '23. THAT $61.1 MILLION ALSO INCLUDES OUR ACTUAL CITY PAYMENT FOR THE MONTH OF SEPTEMBER. WE DID GET THAT FROM CPS ENERGY AND THAT IS -- IT DID COME IN OVER THE ESTIMATE WE BUILT INTO THE BUDGET AND IT IS INCLUDED IN THAT $61.1 MILLION YOU SEE LISTED HERE ON THIS SLIDE. OUR OTHER FINANCIAL POLICIES WOULD REMAIN INTACT, ONE OF THOSE BEING THAT WE WOULD CONTINUE TO DO MAD RATTILY CONSERVATIVE REVENUE PROJECTIONS. THAT DOESN'T MEAN WE DON'T TAKE INTO CONSIDERATION WHAT'S HAPPENING BUT IT DOES MEAN WE HAVE TO MANAGE OUR RISK , TO SOME DEGREE, GIVEN OUR LEVEL OF RESERVES, GIVEN OUR FINANCIAL POSITION, WE'VE GOT TO STAY IN THAT MODERATELY CONSERVATIVE REVENUE SPACE. SOME OF WHAT WE HAVE SEEN -- AND WE'VE TALKED ABOUT THIS. OFF-SYSTEM SALES, TWO REALLY HOT SUMMERS.
IS REALLY TRYING TO FIGURE OUT WHAT IS SOMETHING THAT WE CAN RELY ON FOR THE BASE BUDGET AND WHAT IS MAYBE A LITTLE BIT UNUSUAL THAT'S GOING TO FLUCTUATE MORE FROM YEAR TO YEAR. WE CAN'T RELY ON THAT ADDITIONAL PART THAT'S FLUCTUATING ANY MORE THAN CPS ENERGY CAN. THEY'RE NOT GOING TO COME IN WITH A BUNCH OF AGGRESSIVE PROJECTIONS ABOUT SOME OF THAT STUFF REPEATING, LIKE OFF-SYSTEM SALES. THAT'S OUT OF OUR CONTROL. WE CAN HAVE IT READY TO SELL TO THE MARKET BUT IF THE MARKET IS NOT THERE, THAT'S NOT GOING TO HAPPEN.
IT GOES BACK TO THE PREDISABILI PREDICTABILITY.
THIS POLICY FITS INTO THAT MANAGEMENT. ON THE LAST SLIDE HERE, I'LL TALK ABOUT SOME OF THE BENEFITS OF AMENDING THAT FINANCIAL POLICY.
AGAIN, CABELLO HAVRDA TO DO THAT AND COMING UP WITH THIS ALTERNATIVE APPROACH.
TO THE EXTENT THERE ARE FUNDS THAT GET GENERATED ABOVE THE 10% THRESHOLD AND GO BACK TO CPS ENERGY, THEY COULD ASSIST IN LOWERING THE LEVEL OF POTENTIAL FUTURE CPS RATE INCREASES. AND I'M GOING TO PAUSE THERE FOR A SECOND ALSO TO TALK ABOUT WHEN YOU TALK ABOUT THE 10% THRESHOLD, IT IS IMPORTANT FOR US BECAUSE WE WANT TO MAINTAIN THE BASE BUDGET. WE DON'T WANT TO IMPACT BASIC CITY SERVICES.
BUT IF WE'RE HITTING THAT THRESHOLD, THAT MEANS THERE'S PROBABLY SOMETHING LIKE OFF-SYSTEM SALES OR SOMETHING DRIVING THAT THAT'S UNUSUAL. IF IT'S NOT FUEL -- BECAUSE FUEL IS A PASS-THROUGH FOR CPS, IT ALSO MEANS CPS IS PICKING UP ADDITIONAL REVENUE.
IF YOU TAKE THE PIECES THAT WERE OVER PLUS WHAT WE HAVE AND YOU COMBINE THOSE AND YOU'RE STRATEGIC ABOUT YOU DEPLOY THOSE RESOURCES, THAT'S WHERE YOU CAN HAVE AN IMPACT ON THE LEVEL OF FUTURE RATE INCREASES. IT WILL OBVIOUSLY DEPEND ON WHAT HAPPENS IN THE FUTURE AND HOW OUR BUDGETS PERFORM, THEIRS AND OURS, BUT I WANTED TO HIGHLIGHT THAT PIECE. I HAVE ON HERE NO SIGNIFICANT TO THE GENERAL FUND.
I GOT ASKED ABOUT IT THE OTHER DAY AND I WANT TO BE CLEAR. WE DON'T ANTICIPATE ANY IMPACT IN RECURRING CITY SERVICES. WHAT IT DOES DO IS CHANGES A LITTLE BIT OF OUR BUDGET
[00:50:04]
PROCESS. I CAME IN IN SEPTEMBER. WE TALKED ABOUT THE FACT THAT WE HAD JUST PICKED UP A LOT OF ADDITIONAL REVENUE IN OFF-SYSTEM SALES.YOU ALL HAD THAT AS PART OF YOUR BUDGET AMENDMENT PROCESS. IN THIS CASE, IT WOULD BE ALREADY DESIGNATED IN TERMS OF WHERE THOSE DOLLARS WOULD GO. IF WE'VE HIT THAT THRESHOLD.
I BELIEVE THE CHANGE WOULD BE VIEWED FAVORABLY BY THE THREE MAJOR RATING AGENCIES, AS WE DID THE CPS ENERGY POLICY LAST SPRING. TALKED WITH THEM IN THE SUMMER. I THINK THAT WAS VIEWED FAVORABLY BY THEM.
THIS JUST FURTHER REFINES THAT AND TALKS ABOUT HOW WE DEPLOY RESOURCES ONCE WE HIT THAT 10% THRESHOLD. I THINK THEY WOULD VIEW THAT AS A POSITIVE THING.
I MENTIONED THE FACT THAT WHEN WE HAVE AND ARE GOING THROUGH THE BUDGET PROCESS, IT DOES HELP DEFINE AND PUTS A LITTLE MORE RIGOR AROUND IF WE'RE GOING TO GET HIGH AUDIO] AT THE END OF THE FISCAL YEAR, IT DOES PUT A FRAMEWORK IN PLACE THAT ALLOWS US TO TALK ABOUT HOW TO DEAL WITH THOSE ADDITIONAL DOLLARS. TO PUT IN CONTEXT FOR FY '23, WE ENDED UP -- THE AMOUNT THAT WE WERE OVER THE ADOPTED BUDGET, 70% OF THAT WE EARNED IN THE LAST THREE MONTHS OF THE FISCAL YEAR. I MEAN, SO WHEN YOU TALK ABOUT WE WERE -- IF YOU TAKE OUT THE ONE-TIME PROPERTY SALES THROUGH JUNE, WE WERE AT ABOUT 3.6% OF THE ADOPTED BUDGET IN TERMS OF THE VARIANCE. THAT'S ABOUT WHERE I'D LIKE TO BE, SOMEWHERE IN THAT 3% TO 5%. BUT IT JUST REALLY CHANGED DRAMATICALLY AT THE END OF THE SUMMER AND OF COURSE WE BROUGHT THAT FORWARD AS PART OF THE BUDGET PROCESS. I WANT TO GO BACK AND JUST TOUCH ON RATING AGENCIES JUST REAL QUICK. WE'VE GOT EXCELLENT GENERAL OBLIGATION BOND RATINGS.
AAA RATINGS WITH MOODY'S, STANDARD AND POOR'S. WE HAVE BEEN AA FOR SEVERAL YEARS WITH FITCH. WE HAVE BEEN WORKING ON TRYING TO GET THAT BACK TO AAA.
WE GOT A LITTLE BIT OF MOVEMENT IN THE SUMMER BECAUSE THEY CHANGED OUR OUTLOOK FROM STABLE TO POSITIVE. WHICH MEANS THERE'S A POSSIBILITY OF GETTING THAT MOVED UP. THOSE ARE OUR PARENT RATINGS. WHEN YOU TALK ABOUT I'M GOING TO USE ONE OF ANDY'S ANALOGIES. WHEN YOU TALK ABOUT A BIG CORPORATION AND WE'VE GOT SUBSIDIARIES, THE GO IS LIKE THE PARENT RATING AND WE TALK ABOUT THE AIRPORT, THAT'S A SUBSIDIARY. WE OWN THE AIRPORT.
WHILE THERE'S NOT A LEGAL PLEDGE OF OTHER REVENUES WHEN WE TALK ABOUT THE AIRPORT, THAT PARENT RATING HELPS. IT HELPS US DRIVE DOWN THE INTEREST COST BUT IT HELPS WHEN WE TALK ABOUT STRUCTURING BOND ISSUES AND DOING THINGS THAT WE'RE TRYING TO DRIVE DOWN THE COST ON. SO FROM OUR PERSPECTIVE THE RATINGS ARE REALLY IMPORTANT.
WE HAVE THE HIGHEST RATINGS OF ANY CITY WITH A POPULATION -- TOP TEN CITIES BY POPULATION.
ACTUALLY, WE HAVE A HIGHER RATING THAN THE FEDERAL GOVERNMENT RIGHT NOW.
SO WE'RE ALSO GOING THROUGH A PERIOD OF HIGH CAPITAL INVESTMENT.
WE HAVE ABOUT $840 MILLION, APPROXIMATELY, TO ISSUE FROM THE 2022 BOND ELECTION.
WE'VE GOT A PLANNED -- WE WILL BE PLANNING FOR A 2027 BOND ELECTION AS WELL.
I KNOW, MAYOR, YOU ASKED TROY DURING THE WORK SESSION WHAT THAT NUMBER WAS.
I'M NOT GOING TO GIVE YOU THE NUMBER. WE HAVE TO GET CLOSER TO THAT DATE BEFORE WE CAN PUT THAT NUMBER UP. WE KNOW THE EXPECTATION IS THE COMMUNITY IS GROWING AND THERE ARE A LOT OF NEEDS OUT THERE AND WE NEED TO CONTINUE TO HAVE A SUSTAINED CAPITAL INVESTMENT THAT SUPPORTS THE COMMUNITY AND THAT WE'RE GOING TO DO IT IN A RESPONSIBLE WAY. LOTS OF TIMES PEOPLE HEAR THE WORD DEBT AND IT BECOMES A NEGATIVE CONNOTATION. IT'S JUST A TOOL THAT WE USE TO OFFICIALLY DEPLOY RESOURCES.
IF YOU DO IT IN A RESPONSIBLE WAY, IT CAN BE VERY EFFECTIVE. WE'VE GOT AIRPORT PROGRAM, TERMINAL DEVELOPMENT PROGRAM AND ENABLING PROJECTS. WE'RE GOING TO ISSUE SOMEWHERE IN THE NEIGHBORHOOD OF $2 BILLION IN BONDS TO SUPPORT THAT PROJECT.
REALLY IMPORTANT PROJECT. OUR PARENT RATINGS, WHILE THEY'RE NOT DIRECTLY TIED TO THE AIRPORT, ALL OF THIS HELPS. OUR NAME IN THE MARKET HELPS DRIVE THINGS THAT HELP KEEP THE COST DOWN. LASTLY, WE ARE ALSO -- WE WILL BE COMING TO TALK TO YOU ABOUT POTENTIAL EXPANSION OF THE CONVENTION CENTER.
MAYBE RENOVATION OF THE DOME. I KNOW WE NEED TO HAVE MORE CONVERSATION ON THAT.
BUT ALL OF THESE AREAS WE'RE ABLE TO USE THOSE BOND RATINGS TO TRY TO KEEP OUR COSTS AS LOW AS WE CAN AND REALLY CREATE MORE CAPACITY FOR PROJECTS AT THE END OF THE DAY.
WITH THAT, MAYOR AND COUNCIL, THAT WRAPS UP MY PRESENTATION AND I WOULD BE HAPPY TO ANSWER
ANY QUESTIONS. >> MAYOR NIRENBERG: THANK YOU FOR THE PRESENTATION, BEN.
AND SO THE RECOMMENDATION IS ON THE STAFF ALTERNATIVE? >> GORZELL: YES, SIR.
THAT'S CORRECT. >> MAYOR NIRENBERG: WHY DON'T I GO AHEAD AND ENTERTAIN A MOTION FOR THAT AND WE'LL GET INTO OUR DISCUSSION. WE'LL START WITH COUNCILMEMBER
CABELLO HAVRDA. >> HAVRDA: I MOVE -- SO MOVE.
[00:55:05]
>> MAYOR NIRENBERG: LET ME GET A SECOND. THERE'S A MOTION AND A SECOND FOR FORWARDING THE STAFF RECOMMENDATION TO FULL CITY COUNCIL.
COUNCILMEMBER CABELLO HAVRDA. >> HAVRDA: THANK YOU, MAYOR. THE INTENT OF THE PROPOSAL, THE CCR, WAS TO START A CONVERSATION ABOUT WHAT CPS AND RELIABILITY. TO THAT END, I'M VERY PLEASED WITH THIS OPTION.
MY GOAL WAS TO FIGURE OUT HOW TO USE THE TOOLS WE HAVE TO MAKE SURE OUR POWER GRID IS RELIABLE. WE DON'T WANT A REPEAT OF OUR RESPONSE TO WINTER STORM URI POWER OUTAGES. WE CANNOT CLAIM WE HAVE BEEN CAUGHT OFF GUARD.
SO NEXT TIME WE HAVE TO BE READY. WE ALSO DON'T WANT TO COME CLOSE TO ROLLING POWER OUTAGES LIKE WE DID THIS PAST SUMMER. THE CITY AND CPS HAVE COME A LONG WAY SINCE URI AND WE'RE MORE PREPARED TO TAKE CARE OF THE PEOPLE THAT WE REPRESENT.
BUT THIS PROPOSAL WAS ABOUT DOING BETTER. WE CAN ALWAYS BE BETTER.
THERE'S NO SUCH THING AS BEING OVERPREPARED. GIVEN ALL THAT, HOW DO WE KEEP OUR UTILITY AFFORDABLE WHEN WE KNOW WE'LL SOON BE FACING A RATE INCREASE? I THINK YOU ADDRESSED THAT WELL TODAY, BEN. I APPRECIATE THAT.
SO I STARTED WITH A BOLD, MAYBE UNCOMFORTABLE IDEA. A PROPOSITION TO CHANGE THE WAY CPS ENERGY SHARES ITS REVENUE WITH THE CITY. THE GOAL WAS ALWAYS RELIABILITY AND AFFORDABILITY BUT KICKED UP A NOTCH. IT WAS A SIMPLE IDEA, HOW DO WE MAKE OUR POWER SOURCE MORE RELIABLE? GAINING SUPPORT FROM RATEPAYERS AND THE BUSINESS COMMUNITY. THERE WERE OTHER CONSIDERATIONS TAKEN INTO ACCOUNT AND, BEN, YOU ADDRESSED THE RATE ISSUE TODAY -- I'M SORRY. THE BOND RATING ISSUE TODAY.
HOW COULD THIS CHANGE AFFECT BOTH CPS AND THE CITY'S BOND RATING? SO AFTER DISCUSSIONS WITH ERIK AND HIS STAFF, AS WELL AS THE MAYOR, WE FOUND AN ALTERNATIVE WAY TO PROVIDE THAT RELIABILITY AND AFFORDABILITY AND NOT AFFECT THE BOND RATING IN A NEGATIVE WAY. AS A MATTER OF FACT, IT SOUNDS LIKE IT COULD ACTUALLY HELP US. IT COULD ACTUALLY MAKE A CASE FOR MORE CERTAINTY AND STABILITY FOR THE BOND RATING AGENCIES. IT HAS ADDITIONAL BENEFITS.
FUTURE BUDGET ONE FALLS IN SURPLUSES AS AN INVESTMENT INTO OUR GRID'S RELIABILITY.
INSTEAD OF COUNCIL SCRAPPING AT THE TABLE FOR LAST-MINUTE PIECEMEAL PROJECTS.
I HAVE TALKED TO MANY COUNCIL MEMBERS ABOUT THIS ISSUE AND MOST AGREE THAT'S NOT AN IDEAL SITUATION. WHEN WE HAVE A WINDFALL, US SCRAPPING AT THE TABLE IS SEEN FROM THE COMMUNITY AS SELFISH. WE'RE NOT ABLE TO GIVE BACK TO THE CITY AS A WHOLE.
AND I THINK WE HAVE TO START THINKING NOT JUST ABOUT LITTLE AREAS OF TOWN BUT THE ENTIRE CITY AS A WHOLE. THIS IS, AGAIN, PART OF THAT. SLIDE 9 POINTS OUT ALL THE BENEFITS. 20% GOING TO THE REES FUND IS CONGRUENT WITH THE GOAL AND I THANK THE MAYOR FOR THAT SUGGESTION. THANKFUL TO THIS COMMITTEE AND THE MAYOR FOR YOUR INPUT TO THIS ALTERNATIVE. ERIK AND BEN, OF COURSE.
THIS COMMITTEE AND WITH CITY STAFF IT'S ALL BEEN A PRODUCT OF COLLABORATION.
MY ORIGINAL ONE WAS RECEIVED WELL BY MOST FOLKS, NOT SO MUCH ERIK, BUT I GET IT.
AGAIN, IT'S UNCOMFORTABLE AND CHANGE ISN'T EASY BUT HERE WE ARE.
IT SPARKED CONVERSATIONS WE AS A COMMUNITY HAD NOT HAD BEFORE.
IT SPARKED INNOVATIONAL THINKING BY ALL PARTIES INVOLVED.
MOST IMPORTANTLY, IT SPARKED THIS IDEA WHICH WILL MAKE OUR CITY AND OUR UTILITIES STRONGER, MORE RELIABLE, AND MORE AFFORDABLE. I'LL TELL YOU THIS IS JUST THE BEGINNING OF A MUCH LARGER CONVERSATION. SO I'M THANKFUL FOR THIS FIRST STEP AND I HOPE THAT MY COLLEAGUES AGREE TODAY. THANK YOU, MAYOR.
>> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER CABELLO HAVRDA.
COUNCILMEMBER COURAGE. >> COURAGE: THANK YOU, MAYOR.
I THINK THIS IS A GOOD ALTERNATIVE TO THE ORIGINAL PROPOSAL.
I WAS RELUCTANT TO SAY THAT WE SHOULD CHANGE AN AGREEMENT THAT'S BEEN IN EFFECT FOR QUITE A FEW YEARS AND THAT HAS DONE A LOT OF GOOD FOR THE CITY OF SAN ANTONIO AS WELL AS CPS ENERGY.
SO I THINK THIS ALTERNATIVE PROVIDES A FRAMEWORK THAT AS A COUNCIL WE CAN CONTINUE TO LOOK AT THE REVENUE THAT COMES IN FROM CPS ENERGY AND BE RESPONSIBLE IN HOW WE DEAL WITH THAT REVENUE TO MEET THE NEEDS THAT THE CITY HAS. BUT, AT THE SAME TIME, IF THERE ARE EXTRAORDINARY CONDITIONS THAT OCCUR, THAT CPS HAS AN OPPORTUNITY TO TAKE ADVANTAGE OF THAT EXTRAORDINARY REVENUE AND PUT IT TO GOOD USE, AS I THINK MY COLLEAGUE HAS SAID, TO MAINTAIN AFFORDABILITY AT CPS FOR ALL OF OUR CUSTOMERS. BUT I THINK WE ALSO NEED TO
[01:00:01]
RECOGNIZE THE EXTRAORDINARY CIRCUMSTANCES THAT CPS ENERGY HAS GONE THROUGH IN THE LAST FOUR OR FIVE YEARS. WHEN YOU GO ALL THE WAY BACK TO THE PANDEMIC AND THE LARGE NUMBER OF PEOPLE IN THIS CITY WHO SIMPLY COULD NOT AFFORD TO PAY THEIR UTILITY BILLS.AND CPS IS SADDLED WITH OVER $200 MILLION WORTH OF UNPAID BILLS FOR SEVERAL YEARS NOW.
AND THEN WE LOOK AT WINTER STORM URI AND WE GET ANOTHER $1 BILLION BILL, SO TO SPEAK, FROM ERCOT AND FROM THE ENERGY SUPPLIERS. IT'S EXTRAORDINARY THAT THEY'RE STILL PROVIDING SOME OF THE MOST ECONOMICAL ENERGY IN THIS STATE FOR THE PEOPLE OF SAN ANTONIO AND THE SURROUNDING COMMUNITIES. SO I THINK THIS IS A GOOD COMPROMISE THAT WILL ALLOW US TO MEET THE NEEDS THAT CPS ENERGY HAS AND, AT THE SAME TIME, MEET THE NEEDS THAT THE PEOPLE IN THE COMMUNITY EXPECT ON BEING RESPONSIBLE FOR ANY ADDITIONAL REVENUE THAT COMES IN. AND NOT GOING CRAZY WITH IT.
YOU KNOW, AS COUNCIL MEMBERS SOMETIMES WE SAY, OH, THERE'S MORE MONEY.
WHAT CAN WE DO WITH THAT? LET'S BE AS RESPONSIBLE AS WE SHOULD BE.
AND I THINK THIS HELPS US MOVE IN THAT DIRECTION. I'M VERY SUPPORTIVE OF IT.
THANK YOU, MAYOR. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER COURAGE.
COUNCILMEMBER ROCHA GARCIA. >> GARCIA: THANK YOU. AND USUALLY I DON'T HAVE ANY QUESTIONS OF ANYTHING THAT BEN PRESENTS. HOWEVER, I HAVE A WHOLE LOT TODAY SO Y'ALL BEAR WITH ME HERE BECAUSE IT'S MORE OF UNDERSTANDING.
AND SO FIRST -- AND THANK YOU. WE TALKED ABOUT THIS SINCE 2022.
ACTUALLY, I THINK EVEN BEFORE THAT, LIKE WHAT HAPPENS. SO MY FIRST QUESTION IS IN MONEY, TELL ME AN AMOUNT, HOW MUCH WOULD WE HAVE SENT BACK TO CPS IF THE 80/20 SPLIT WAS IN
PLACE THIS YEAR, FOR INSTANCE? >> GORZELL: SO A COUPLE OF THINGS HERE.
ON THE BOTTOM OF THIS SLIDE, WE WENT BACK AND SAID IF THIS HAD BEEN IN PLACE FOR THE PAST 20
YEARS, SO GOING BACK 20 YEARS -- >> GARCIA: I'M TRYING TO FIGURE OUT FOR THIS YEAR. 2023. I JUST WANT A CONCRETE EXAMPLE. I JUST WANT TO KNOW MONEY. HOW MUCH MONEY AM I TALKING ABOUT, FOR INSTANCE THIS YEAR, WHICH IS TOP OF MIND FOR ME? AND IF YOU WANT TO DO THAT MATH, I FIGURED I WOULD ASK YOU -- YOU'RE THE RIGHT PERSON TO DO THAT MATH.
>> GORZELL: $22.5 MILLION. >> GARCIA: THAT'S $22.5 MILLION LESS THAN WE WOULD HAVE BEEN ABLE TO BUDGET. AND THEN ALSO WHEN -- SO WHEN WE'RE TALKING ABOUT THE CCR AS PROPOSED, ORIGINALLY, AND THE CCR AS NOW, DID YOU ALL -- NOT THE CCR. THE CCR AS PROPOSED ORIGINALLY IS NO LONGER ON THE TABLE.
WAS THAT IN CONSULTATION WITH CPS? AND THAT'S STAFF THAT'S PROPOSING THIS. IS THAT IN CONSULTATION WITH CPS ENERGY?
WHAT DID THEY SAY? >> GORZELL: NO. THIS IS TALKING ABOUT HOW WE MANAGE OUR FUNDS ON OUR SIDE. SO THIS IS OUR -- THE 14% TRANSFER IS REALLY WHAT WE'RE
TALKING ABOUT. >> GARCIA: SO WE DIDN'T ASK THEM HOW IT WOULD IMPACT THEM
OR HOW THEY WOULD SPEND IT? LIKE FOR A PLAN OR ANYTHING? >> WALSH: WELL, AFTER THE FACT WE TALKED TO THEM ABOUT THE POTENTIAL FOR IF THIS BECOMES A PART OF OUR FINANCIAL POLICY THAT THE EXPECTATION WOULD BE THAT THE USE OF THAT 80% WOULD BE ON ONE-TIME RESILIENCY AND RELIABILITY-TYPE PROJECTS THAT WILLED UNDOUBTEDLY HAVE TO BE REPORTED TO THE CITY, THE OWNER, THE COUNCIL ON THE USE OF THOSE DOLLARS AND HOW IT IMPACTS POTENTIAL FUTURE RATE ISSUES. SO AFTER THE FACT, WE TALKED ABOUT HOW -- I THINK HOW PART OF THE CONVERSATION IS -- AND PART OF THE RECOMMENDATION IS THAT 80% DOESN'T GO TO RECURRING EXPENSES AT CPS. IT GOES TO HELPING OFFSET AND IMPROVE THE RESILIENCY AND RELIABILITY OF THEIR SYSTEM. WHETHER THAT IS TREE TRIMMING OR WHETHER THAT IS PLANT
MAINTENANCE OR WHAT HAVE YOU. >> GARCIA: SO IF WE MOVE FORWARD WITH AN ALTERNATIVE PROPOSAL THAT YOU ALL ARE PROPOSING, THAT STAFF IS PROPOSING, THAT DOES NOT GUARANTEE THAT CPS ENERGY IS NOT GOING TO ASK FOR A RATE INCREASE IN THE FUTURE?
>> GORZELL: I'M SORRY. SAY YOUR QUESTION AGAIN. >> GARCIA: IF WE DO MOVE FORWARD WITH YOUR RECOMMENDATION TODAY, DOES THAT GUARANTEE THAT CPS ENERGY IS
NOT GOING TO ASK FOR A RATE INCREASE IN THE FUTURE? >> GORZELL: NO, IT DOES NOT.
ACTUALLY, WE'RE WORKING WITH THEM NOW ON A POTENTIAL RATE CASE.
>> GARCIA: THEY'RE STILL GOING TO COME AND ASK US FOR A RATE INCREASE? I JUST WANTED TO MAKE SURE. BECAUSE THAT I WOULD IMAGINE WOULD AFFECT OUR CREDIT
[01:05:07]
RATINGS? >> GORZELL: THE CREDIT RATING FROM THE PERSPECTIVE OF IF THEY
COME? I DIDN'T FOLLOW THE QUESTION. >> GARCIA: I'M SORRY.
SO IF SOMEBODY SAYS I AM COMMITTING TO NOT INCREASING RATES OVER THE NEXT FIVE YEARS. LIKE, I DON'T UNDERSTAND HOW A BUSINESS WOULD BE ABLE TO DO THAT. THAT'S KIND OF MY QUESTION, RIGHT? THEY CAN'T REALLY COMMIT TO DO THAT, RIGHT? CAN THEY?
>> GORZELL: FROM A RATING PERSPECTIVE OR FROM A BUSINESS PERSPECTIVE, IF YOU WERE TO PUT THAT KIND OF PLAN IN PLACE, IT'S GOT TO BE GROUNDED IN SOME TYPE OF BUSINESS PLAN THAT ALLOWS YOU TO ACHIEVE THAT.
ARBITRARILY TELL THE UTILITY I DON'T WANT YOU TO COME FORWARD WITH RATE CASES.
IF THEY HAVE NEEDS AND A BUSINESS CASE, THEY NEED TO BRING FORWARD AND SUBMIT THAT.
WE NEED TO CONSIDER IT AND THEN YOU ALL NEED TO CONSIDER WHETHER YOU SHOULD APPROVE THAT
OR NOT. >> GARCIA: AND THEY TECHNICALLY DO HAVE A BUSINESS CASE IF THEY HAVE A NEED FOR ADDITIONAL RESILIENCY, ET CETERA.
>> GORZELL: THEY, AS PART OF THE 2021 RATE CASE, THEY HAD A RATE FORECAST THAT WAS INCLUDED THAT WE PRESENTED THAT WE WORK WITH THEM ON. IT REFLECTED A 5.5% RATE INCREASE IN 2025 AND ANOTHER 5.5% IN 2027. ALL OF THAT IS BEING UPDATED, SO WE'RE GOING THROUGH THAT WITH THEM. ASSUMPTIONS, BUDGETS, CAPITAL PLANS. YOU KNOW, SALES, OFF-SYSTEM SALES.
COORDINATING WITH CPS ON. >> GARCIA: BUT JUST TO BE CLEAR, THEY CAN'T SAY, BASICALLY, THAT THEY'RE NOT GOING TO ASK FOR A RATE INCREASE?
>> GORZELL: FROM THEIR PERSPECTIVE -- FROM THE UTILITY'S PERSPECTIVE, IF THERE'S A BUSINESS CASE THERE THAT THEY NEED A RATE INCREASE, THEN THEY REALLY SHOULD BRING
THAT FORWARD FOR CONSIDERATION BY THE COUNCIL. >> GARCIA: OKAY, GOOD.
WE COULD POTENTIALLY GIVE THEM MORE MONEY AND THEY'RE STILL GOING TO ASK US FOR MORE
MONEY? >> GORZELL: THAT'S CORRECT. AT THIS POINT I DON'T KNOW WHAT THIS POLICY IS GOING TO GENERATE SO -- BUT AS WE MOVE FORWARD, WE CONTINUE TO UPDATE. AS I MENTIONED, THE POLICY IN PLACE, DEPENDING ON WHAT HAPPENS BETWEEN NOW AND 2027, THERE COULD BE SOME IMPACT THERE.
BUT IT'S REALLY JUST ABOUT CONTINUING TO DO ITERATIONS AND UPDATES AS WE MOVE FORWARD.
>> GARCIA: WHAT'S THE PLAN IF THEY DON'T GET EXCESS? DO THEY HAVE A PLAN IF THEY DON'T HAVE EXCESS? I GUESS I HAVEN'T SEEN IT? HAVE YOU SEEN IT?
HAS BEN GORZELL SEEN THE PLAN? >> GORZELL: WE HAVE THE FORECAST.
WE HAVE THE PLANS. WE'RE GOING THROUGH ALL OF THAT.
BUT MUCH LIKE WE TALKED ABOUT ON OFF-SYSTEM SALES OR THINGS THAT HAVE BEEN REALLY UNUSUAL, ONE-TIME THINGS THAT HAVE HAPPENED THE LAST COUPLE OF FISCAL YEARS, WE, THEY ARE NOT GOING TO BUILD THAT INTO A MODEL GOING FORWARD. WE'RE NOT GOING TO ASSUME WE'RE GOING TO GET A HUGE OFF-SYSTEM SALES NUMBER IN AUGUST AND SEPTEMBER.
WHEN YOU LOOK AT LAST SUMMER, LAST SUMMER BEING '22, NOT '23, IT WAS ALSO VERY HOT.
A LOT OF 100-DEGREE DAYS THE STARS KIND OF HAVE TO ALIGN TO HAVE THAT HAPPEN. SO WE'RE NOT GOING TO GO FORWARD AND ASSUME THAT THAT'S GOING TO REPEAT ITSELF. THERE'S A HIGH RISK THERE THAT THEY COULD END UP BEING SHORT AND THEN WE HAVE ADDITIONAL CHALLENGES GOING FORWARD.
WHAT THIS DOES IS, AGAIN, AS WE GO FORWARD, TO THE EXTENT IT DOES GENERATE ADDITIONAL DOLLARS, THOSE ARE THINGS WE WOULD TAKE INTO CONSIDERATION IN THE FUTURE.
>> GARCIA: SO I FLOATED AROUND A QUESTION ABOUT CAN CPS GO OUT FOR A BOND TO IMPROVE, RIGHT? AND I WAS TOLD NO, SPECIFICALLY.
I BELIEVE IN THE PAST I HAD ASKED SOMETHING LIKE THAT AND I ASKED SPECIFICALLY ABOUT THE IMPACT TO OUR BOND RATING OR OUR CAPACITY FOR FUTURE BOND PROGRAMS. AND I WAS TOLD THAT IT MIGHT HAVE AN UNINTENDED CONSEQUENCE BECAUSE OF THE SPECIFICALLY THOSE WHO PURCHASED CITY BONDS, OF THESE CHANGES.
TELL ME HOW THAT WOULD AFFECT THE SHAREHOLDERS WHO --
>> GORZELL: THIS CHANGE? >> GARCIA: YES. >> GORZELL: THERE WOULD BE NO RANGE YOU'RE -- NO CHANGE. YOU AS A COUNCIL HAVE THE DISCRETION TO SET THE POLICIES FOR THE CITY. AS WE CHANGE THOSE FINANCIAL POLICIES, THAT'S HOW WE MANAGE THE ORGANIZATION. COULD WE DO SOMETHING IN THE FUTURE THAT IMPACTS A BOND RATING, OF COURSE. THAT'S PART OF THE FINANCIAL MANAGEMENT PART. BUT -- THE BONDS WE HAVE, FOR EXAMPLE, GENERAL
[01:10:03]
OBLIGATION BONDS, THERE'S A PROPERTY TAX PLEDGE. NONE OF THIS IS CHANGING THAT. THIS IS SIMPLY TALKING ABOUT AN INTERNAL POLICY, A GUIDE, IF YOU WILL, IN TERMS OF HOW WE'RE GOING TO HANDLE THIS SPECIFIC SITUATION.>> GARCIA: I LOVE IT. THANK YOU. AS YOU CAN SEE, I'M WEIGHING MY PROS AND CONS HERE. I WANT TO MAKE SURE WE GET ON THE RECORD.
IS IT FAIR TO SAY THAT THE FINANCIAL -- WE MAY HAVE FINANCIAL IMPLICATIONS BEYOND THE GENERAL FUND? AURORA BOREALIS FOR IMPLEMENTING THIS, I DON'T ANTICIPATE ANY BEYOND THE GENERAL FUND. THE GENERAL FUND, THIS POLICY IS ALREADY IN PLACE AND WAS ALREADY IN PLACE, WE TALKED TO THE RATING AGENCIES IN THE SUMMER. THE ONLY THING YOU'RE DOING IS ON THAT PORTION THAT'S ABOVE THE 10%, RATHER THAN SAYING WE'RE GOING TO GET TOGETHER WITH YOU ALL AND THE COUNCIL AND GET INPUT, YOU ARE NOW SAYING WE WANT TO TAKE THAT ADDITIONAL PIECE AND WE WANT THE PUT IT INTO RESILIENCY AND RELIABILITY PROJECTS AT CPS ENERGY AND AT THE CITY. THE GOAL AT CPS ENERGY IS DEPENDING UPON HOW MUCH IT GENERATES AND HOW WE USE THEM IN CONJUNCTION WITH OTHER THINGS, HOW THAT MIGHT BE ABLE TO AFFECT RATES IN THE FUTURE. I DON'T HAVE THAT ANSWER BECAUSE I DON'T KNOW HOW THE BUDGET IS GOING THE PERFORM AS WE GO FORWARD, BUT IT'S A POLICY AND PUTS ADDITIONAL RIGGER AROUND HOW WE HANDLE THOSE SITUATIONS.
>> GARCIA: IN THE MEMO IT STATES A -- IS SEEKING RECURRING ADDITIONAL REVENUE TO SUPPORT THE BUSINESS NEEDS OF CPS ENERGY SYSTEM. THE BUSINESS CASE OUTLINES THE JUSTIFICATION FOR RATE CASE WHICH CAN BE DRIVEN BY MANY FACTORS SUCH AS OPERATIONAL COSTS, CAPITAL INVESTMENT LEVELS, INFLATIONARY PRESSURES, FINANCIAL METRICS AND MANY OTHER FACTORS. AND SO I HAVE NOT YET HEARD A COMPELLING REASON, RIGHT, TO CHANGE THIS OR TO MAKE THIS RECOMMENDATION.
BUT I ALSO KNOW THAT THEY ARE A $1.7 BILLION CORPORATION.
WHEN WE HAVE CORPORATIONS, BUSINESSES HAVE PLANS FOR CAPITAL, FOR INCREASED SERVICES WHEN WE HAVE ADDITIONAL. I'M JUST WORRIED THAT I HAVEN'T SEEN SO MUCH. I KNOW THERE'S A LOT OF PLANS.
I DON'T KNOW IF THEY ARE CARRIED OUT. BUT HOW DO YOU FEEL ABOUT THE POTENTIAL OF CPS ENERGY BEING ABLE TO PREPARE FOR THE FUTURE WITHOUT THIS 2 TO
3% INCREASE? >> GORZELL: SO I THINK THAT, AGAIN, WHEN WE'RE TALKING ABOUT WORKING WITH CPS ENERGY ON A BUSINESS CASE, I'M GOING TO REMOVE THIS CCR REQUEST A LITTLE AWAY FROM THAT AND JUST TALK ABOUT WHEN WE WORK WITH CPS, LIKE WE DID IN 2021, WE'RE LOOKING AT THEIR OPERATIONS AND MAINTENANCE BUDGET.
WE'RE LONGING AT A LONG-RANGE CAPITAL PLAN. WE'RE LOOKING AT THE EFFECT OF THE BAD DEBT THEY WERE EXPERIENCING BECAUSE OF THE PANDEMIC.
WE'RE LOOKING AT THEIR FINANCIAL METRICS OR FINANCIAL POSITION, THEIR GENERATION PLANS, POLICY ISSUES THAT HAVE COME IN CONVERSATIONS WITH YOU ALL.
AFFORDABILITY, THE AFFORDABILITY PROGRAM. THE ECONOMIC FORECAST.
WE'RE TRYING TO LOOK AT ALL THAT WITH THEM. WHEN YOU THINK ABOUT UPDATES IN 2021, PART OF WHAT WE TALKED ABOUT WAS THE FACT THERE WERE SOME UNKNOWNS.
THERE WAS THE WINTER STORM URI COSTS, WE'RE STILL WORKING OUR WAY THROUGH THAT. THE GENERATION PORTFOLIO DECISION HAD NOT BEEN MADE AND SO THERE WERE THINGS IN THE CAPITAL PLAN THAT KIND OF MAINTAIN, I'M GOING TO CALL IT THE STATUS QUO FOR LACK OF A BETTER WORD, UNTIL THE WORK OF THE RAC COULD BE COMPLETED, UNTIL THE BOARD COULD CONSIDER THAT AND YOU ALL WERE BRIEFED AFTER THAT.
THIS PLAN WE'RE WORKING ON HOW IT NOW HAS THAT GENERATION PLAN BUILT INTO IT, P2, BUT THAT VERSION IS BUILT INTO THE PLAN. AS WE GO THROUGH ITERATIONS OF BUSINESS CASES, WE'RE LOOKING AT ALL THAT DATA FROM CPS, AND FROM OUR PERSPECTIVE, OUR RESPONSIBILITY AS STAFF IS MAKE A RECOMMENDATION TO YOU ALL ON THAT BUSINESS CASE. IS THERE A BUSINESS CASE THERE THAT SUPPORTS THE REQUEST TO INCREASE THE RATE. THAT'S PART OF THE WORK
WE'RE DOING NOW WITH CPS ENERGY. >> GARCIA: GOT IT.
THANK YOU. I FEEL LIKE IT GOES HAND IN HAND AND THE FACT THIS DOES NOT GUARANTEE A PROJECTED RATE INCREASE SHOULD BE ALARMING TO EVERYONE.
REIMBURSEMENT -- PROJECTS COULD ASSIST IN LOWERING LEVEL OF POTENTIAL FUTURE CPS RATES AND SHOULD BE FAVORABLE. I'M NOT REALLY COMFORTABLE WITH THE SHOULD AND COULD BECAUSE COULD HAVE, SHOULD HAVE.
BUT ALSO I KNOW THAT COUNCILMEMBERS, WE ARE RESPONSIBLE FOR OUR ACTIONS ON THE DAIS. AND I DON'T KNOW IF ANYBODY HAS WATCHED THE LAST FEW CPS ENERGY MEETINGS, BUT THERE IS -- THEY ARE INTERESTING SO I'LL HIGHLY RECOMMEND YOU
[01:15:07]
WATCH THE U TUBE VIDEOS. I HAVE MY STAFF REVIEWING EVERY CPS ENERGY FOR THE LAST TWO YEARS AND POINT OUT KIND OF LIKE SOME OF THE THINGS THAT HAVE BEEN SAID THAT MAYBE HAVE NOT BEEN DELIVERED ON, ET CETERA. AND SO I'M SAYING THAT BY THE NEXT TIME WHEN THIS COMES UP TO THE FULL COUNCIL, I'M PRETTY SURE I'LL BE FULLY PREPARED, RIGHT, TO LOOK AT THAT AND DOUBLE-CHECK ON THAT.BUT I ALSO FEEL THAT AS A MUNICIPAL PALLY OWNED UTILITY, THEY HAVE A LOT MORE FUNDINGS OPTIONS THAN THE AVERAGE HOUSEHOLD IN SAN ANTONIO TO COVER THE EXPENSES THAT ARE ASSOCIATED WITH RESILIENCY AND RELIABILITY.
THEIR $1.7 BILLION -- THEY HAVE A $1.7 BILLION OPERATING BUDGET AND I'M AFRAID TO GIVE UP, BECAUSE THESE ONE-TIME PROJECTS BENEFIT ALL US.
THERE'S SIDEWALKS ALL OVER THE CITY THAT WE REINVESTED, THAT WE CAN REINVEST IN.
THERE'S SENIOR CENTERS ALL OVER THE CITY. IT'S NOT JUST IN MY DISTRICT. RIGHT NOW I FEEL LIKE THAT RESILIENCY, THAT RELIABILITY BY CPS ENERGY IS ON CURRENT ENERGY SOURCES. I DON'T FEEL LIKE THEY ARE DOING ANYTHING -- WHAT ARE THEY DOING TO LOOK AT INNOVATIVE PRACTICES, THE FUTURE OF ENERGY. AND SO I'M ALSO WORRIED ABOUT THAT, RIGHT, INVESTING ABOUT IN CURRENT INSTEAD OF INVESTING IN THINGS THAT COULD BE POTENTIALLY IN THE FUTURE. SO -- BUT AGAIN, THAT'S WHY I'M HESITANT.
IT'S NOT ON BEN GORZELL. I APPRECIATE, I HAVE THE QUESTIONS JUST FOR THE SAKE OF DISCUSSION BUT MORE IMPORTANTLY TO BE PREPARED AND FOR CPS ENERGY TO BE PREPARED TO ANSWER THESE QUESTIONS AT A LATER DATE. THANK YOU FOR BEARING WITH ME. I APPRECIATE THE DISCUSSIONS.
BUT AGAIN, YOU SAW I VOTED AGAINST THE LAST TWO CPS ENERGY PROPOSALS AND THAT WAS BECAUSE THE PLANS THEY HAD IN PLACE NEVER AFFECTED MY QUADRANT.
IT'S BEYOND A DISTRICT, IT'S TWO QUADRANTS ALMOST LEFT OUT.
I WANT TO MAKE SURE I HAVE ANSWERS BEFORE I MOVE FORWARD AND APPRECIATE THIS.
>> MAYOR NIRENBERG: COUNCILMEMBER PELÁEZ. >> PELÁEZ: THANK YOU.
I APPRECIATE THE HARD WORK YOU ALL HAVE PUT INTO THIS AND COUNCILMEMBER CABELLO HAVRDA, I APPRECIATE THE HARD WORK YOU PUT INTO THIS. I THINK OUR RESPONSIBILITY AS THE GOVERNORS, IF YOU WILL, OF CPS ENERGY, AS THE ULTIMATE OWNERS IS TO MAKE SURE THAT WE PROVIDE FORESEEABILITY, NOT JUST TO THE UTILITY, TO THE RATING AGENCIES. AND I THINKNK THIS STRENGTHENS THAT FORESEEABILITY AND GIVES SOME -- GIVES OUR FORECASTING MORE CREDIBILITY, IF YOU WILL, RIGHT? AND I THINK THAT'S HEALTHY AND THAT'S OUR JOB.
I THINK ALSO OUR JOB IS TO MAKE SURE THAT OUR UTILITY IS AS HEALTHY AS IT POSSIBLY CAN BE FROM AS IT RELATES TO RELIABILITY AND RESILIENCY SO THEY CAN PROVIDE ENERGY ON DEMAND TO ALL OF OUR CUSTOMERS. I KNOW THAT RELIABILITY AND RESILIENCY IS THREATENED, YOU KNOW, WE ALL KNOW HOW, WE ARE DEPENDENT UPON THE EBB SEN FLOWS OF THE -- AND FLOWS OF THE TEXAS GRID AND EVEN THOUGH EVERYTHING WE'RE DOING LOCALLY IS RIGHT AND WE PROVIDE ENOUGH ENERGY TO WHERE OUR CONSTITUENTS, YOU KNOW, AND RATEPAYERS AREN'T SUPPOSED TO HAVE BLACKOUTS AND BROWNOUTS, BUT BECAUSE ERCOT MANAGES THE WAY IT MANAGES, WE ARE SUBJECT TO THEIR POOR MANAGEMENT DECISIONS. AND THE BRITTLENESS OF THE TEXAS GRID, RIGHT? I GET THAT. AND I THINK THAT THIS HELPS INOCULATE US A LITTLE BIT AGAINST THOSE FLUCTUATIONS. I ALSO THINK THAT -- AND COUNCILMAN WHYTE IS SITTING BACK THERE, HE AND I BOTH FEED OUR CHILDREN BECAUSE MEGA STORMS ARE THE NEW NORMAL. THAT'S JUST THE REALITY. AND HIS LAW FIRM AND MINE, WE BOTH DEAL IN MEGA STORM LITIGATION, RIGHT? I'LL BE HONEST WITH YOU, YOU CANNOT DELAY, I MEAN THERE IS NO DEBATE, IT'S TRUE, MEGA STORMS ARE THE FUTURE THAT UTILITIES ARE GOING TO HAVE TO GRAPPLE WITH IN WAYS THEY'VE NEVER HAD TO IN THE PAST. AND SO I THINK REINVESTING THIS MONEY INTO CPS'S ABILITY TO WITHSTAND THOSE ACUTE SHOCKS AND DEAL WITH THOSE ACUTE SHOCKS IS ALSO A RESPONSIBILITY. AND SO MY CONCERN IS NOT WITH THE SUBSTANCE OF THE
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CCR OR THE VOTE. I'M GOING TO SUPPORT IT TODAY.MY CONCERN IS THE DEFINITION OF THE WORD RESILIENCY AND HOW WE'RE GOING TO PICK AND CHOOSE WHICH PROJECTS FIT OUR DEFINITION OF RESILIENCY VERSUS CPS'S DEFINITION OF RESILIENCY. I'M NOT SAYING THEY ARE GOING TO BE CYNICAL OR CUTE WITH HOW THEY ALLOT THE MONEY. WHAT I'M SAYING IS THAT TEN YEARS AGO THE WORD RESILIENCY MEANT SOMETHING AND TODAY THE WORD RESILIENCY MEANS EVERYTHING. AND WHEN IT MEANS EVERYTHING, IT MEANS NOTHING. AND NOW THE WORD IS SO OVERUSED AND ABUSED AND IT'S REALLY FLUFFY AND FUZZY THESE DAYS. THE ONE THING NOBODY HAS EVER ACCUSED BEN GORZELL OF IS BEING FLUFFY OR FUZZY. I'M SAYING THAT BECAUSE I'M SURE YOU ALSO WANT A CLEAR DEFINITION OF WHAT IS A RESILIENCY PROJECT OR A RELIABILITY PROJECT.
MY PERSPECTIVE I'LL GIVE AN EXAMPLE. COMING OFF OF WINTER STORM URI, WE TALKED A LOT ABOUT THE CPS GRID AND CIRCUITS. AND, YOU KNOW, WHEN THEY TRIED TO IMPLEMENT THEIR ROLLING OUTAGES, IT WAS AFFECTING FAIRLY LARGE AREAS. AND THEN IT WAS THIS WHOLE DISCUSSION ABOUT WHO IS A CRITICAL CUSTOMER, HOSPITALS, BUT THEN THE CIRCUIT WAS LARGE AND THERE WERE LARGE SUBDIVISIONS THAT WEREN'T BEING IMPACTED. SO THEY RELOOKED AT ALL OF THAT, AND ONE OF THE WAYS THAT THEY IMPROVED HOW THEY HANDLE THAT SITUATION IS THEY WENT INTO THESE LARGERS CIRCUITS, AND THERE'S THREE DIFFERENT CATEGORIES.
THE CRITICAL HOSPITALS, YOU DON'T WANT TO TOUCH THOSE. THERE'S A -- GOING OFF MEMORY, UNINTERRUPTIBLE, THERE'S A DIFFERENT WORD FOR IT, BUT ONE -- A SET OF CIRCUITS SITTING THERE MANAGING THE FREQUENCY THAT IF SOMETHING GOES WRONG THEY TRIP TO MAKE SURE WE DON'T LOSE THE WHOLE GRID. THEN THOSE SUBJECT TO THESE OUTAGES. THEY TOOK EACH ONE OF THOSE, LOOKED AT THE CIRCUIT AND THEY WERE IMPLEMENT CLOSURES AND WE TALKED ABOUT THAT DURING THE LAST RATE CASE.
IT IS A CIRCUIT THAT ALLOWED THEM TO BREAK THE BIGGER CIRCUIT DOWN IN SMALLER PIECES. SO IF WE HAVE TO SHED LOAD OR THEY HAVE TO SHED LOAD, WE HAVE A LOT MORE CUSTOMERS TO SPREAD THAT OVER THEREBY HOPEFULLY BEING IN A POSITION NOBODY IS OUT FOR MORE THAN 15 MINUTES. THAT I THINK FROM MY PERSPECTIVE IS RESILIENCY. IT HELPS THEM, IN SOME CASES THEY HAD A HARD TIME BRINGING SOME CIRCUITS UP BECAUSE OF THE AMOUNT OF LOAD SITTING THERE, BUT THE
RECLOSURES MADE THEM MORE MANAGEABLE. >> PELÁEZ: YOU AND I ARE BOTH ON THE SAME PAGE. THAT IS AN EXAMPLE OF A RESILIENCY.
MY DEFINITION IS WHAT IS A RESILIENCY PROJECT. DO WE GET TO PICK OR ARE WE JUST SENDING THE MONEY OVER AND THEY GET TO PICK WHAT IS AND IS NOT A RESILIENCY
PROJECT. IS THAT A FAIR QUESTION? >> GORZELL: ABSOLUTELY.
YOU CAN TALK ABOUT RELIABILITY COMPONENTS OR RESILIENCY COMPONENTS.
I WOULD ENVISION ALL, ERIK, CRIME IN HERE, WE WOULD WORK WITH THE UTILITY IF WE THINK
THE MONEY SHOULD BE SPENT ON THIS. >> WALSH: AND I'LL ADD IN IF WE FIND OURSELVES IN THAT POSITION, IT WOULD BE SOMETHING THAT IS EXPLAINED TO THE COUNCIL BEFORE THAT CHECK IS SENT OVER THERE. SO THAT WE ALL KNOW.
SO THAT THE COUNCIL UNDERSTANDS HOW THEY WILL UTILIZE THOSE DOLLARS AND MEET THE DEFINITION OF RESILIENCY AND RELIABILITY, WHICH WAS, YOU KNOW, ONE OF THE MAJOR CORE CORNERS OF THE ORIGINAL CCR. AND SO, YOU KNOW, IF WE POSITION 12 MONTHS FROM NOW OR 24 MONTHS FROM NOW, IT WOULD BE WITH A REQUEST OF
WE'RE GOING TO UTILIZE THIS MONEY FOR THIS. >> PELÁEZ: I'M WONDERING ABOUT THE ORDER OF OPERATIONS HERE. IS IT THAT THEY CALL AND SAY, ALL RIGHT, WE WOULD LIKE TO DRAW DOWN ON THOSE FUNDS, PLEASE SEND A CHECK OVER FOR $20 MILLION SO WE CAN CLOSE SOME CIRCUITS OR UPGRADE CIRCUMSTANCE IT'S? OR DO WE JUST SEND OVER THAT TOTAL DOLLAR AMOUNT THAT IS REPRESENTED BY TODAY'S
DECISION? >> WALSH: THE ORDER OF OPERATION WOULD BE IF WE TRIGGERED OVER THE 10% AND THERE'S A DOLLAR AMOUNT, IT IS SITTING WITH THE CITY.
THERE WOULD BE A 1:00 THURSDAY BRIEFING WITH THE COUNCIL FROM CPS OR WE COULD DO IT AT B SESSION, BUT THERE WOULD BE SOME REPORT AND PLAN BEFORE WE
SEND THAT MONEY OVER. >> PELÁEZ: THAT ABS MY QUESTION, PERFECT, THANK
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YOU. >> THE GENERAL PRESENTATION. WE TALK ABOUT HITTING THAT 10% THRESHOLD, WE'RE TALKING THROUGH THE ENTIRE FISCAL YEAR, THROUGH SEPTEMBER. IF WE'RE JUST BARELY ABOVE IN JULY OR AUGUST, WE'LL BE TALKING TO CPS, BUT WE'RE GOING TO CLOSE THE FISCAL YEAR OUT BEFORE WE TALK ABOUT WHAT THAT DOLLAR VALUE IS.
AS WE'VE SEEN THE LAST TWO YEARS THING, I THINK THIS IS ALSO THE ELEGANT DECISION TO THE SCRAPPING THAT YOU MENTIONED, COUNCILWOMAN. I QUITE HONESTLY DIDN'T LIKE THE SPECTACLE OF US PLAYING HUNGRY HIPPOS WITH $20 MILLION THIS LAST TIME AROUND WITH SUCH SHORT NOTICE. I MEAN IS THAT THE DOLLAR AMOUNT WE ALL WERE FIGHTINGÚOVE? FOR, YOU KNOW, THE WINDFALL IS WHAT WE'RE CALLING IT. I THINK THAT'S A BAD WAY OF CREATING POLICY. WITH VERY SHORT AMOUNT OF TIME TO VET SOME OF THESE PROJECTS AND WE FIND OURSELVES PUTTING YOU AND ERIK AND MARIA IN A POSITION OF HAVING TO RECOMMEND, YOU KNOW, PROJECTS THAT, YOU KNOW, SOME OF THEM WERE JUST KIND OF OUT OF -- JUST OUT OF THIN AIR WE SORT OF PLOPPED ON THE LIST AND SAY WE WANT THIS. I DON'T THINK THAT, YOU KNOW, MAKING ANY HASTY DECISION AS RELATES TO POLICY IS EVER GOING TO BE A SMART DECISION.
I THINK THAT REMOVES THE TEMPTATION TO PLAY HUNGRY, HUNGRY HIPPOS THE WAY WE DID LOOSE -- LAST TIME AND MAKE SURE THE MONEY PROVIDES VALUE TO RATE HOLDERS.
YOU GOT MY SUPPORT. THANK YOU. >> MAYOR NIRENBERG: THANK YOU. COUNCILMEMBER CABELLO HAVRDA.
>> HAVRDA: THANK YOU, MAYOR. THERE'S BEEN SOME CONFUSION.
JUST TO BE CLEAR, THE ALTERNATIVE IS NOT GUARANTEEING AN ELIMINATION OF A RATE INCREASE. INITIALLY MY CCR WAS PROPOSING THAT.
THERE ARE A LOT OF, YOU KNOW, CAN AND SHOULD, BUT BEN, YOU ARE AMAZING, BUT YOU ARE NO WIZARD. YOU ARE USING BEST ACCEPTED PRACTICES TO FORECAST WHAT WE'VE GOT AND SO WE HAVE TO BE SOMEWHAT NIMBLE AGAIN, AMBIGUOUS IN THE LANGUAGE NOT TO PREDICT OR PROMISE SOMETHING THAT IS NOT A DEFINITE.
THE 80% GOING TO CPS IS TO BE ONLY FOR INFRASTRUCTURE IMPROVEMENT AND MAINTENANCE.
THANK YOU, COUNCILMEMBER PELÁEZ, FOR THAT CLARIFICATION.
I THINK THAT'S IDEAL SITUATION TO COME BACK TO US.
THE ALTERNATIVE ONLY COMES INTO PLAY IF THERE'S OVER AN EXCESS -- AN EXCESS OVER THE 10%. IF IT DOES NOT, WE RELY ON OUR CURRENT POLICIES.
THIS ONLY TRIGGERS IF IT'S OVER 10%. THE ALTERNATIVE IS DOING NOTHING AND FOLLOWING THE STATUS BOW AND THAT'S NO LONGER ACCEPTABLE.
TO SAY CPS -- IS TO EXCUSE CPS OF BEING IRRESPONSIBLE AND TOO SIMPLISTIC.
REMEMBER THIS BILLION DOLLAR COMPANY IS A PUBLIC UTILITY OWNED BY THE PUBLIC, USED BY 2 PUBLIC, ACCOUNTABLE TO THE PUBLIC. THE ULTIMATE ARGUMENT FOR THIS CHANGE IS MAKE CPS MORE RELIABLE FOR THE PEOPLE WE REPRESENT, INVESTING IN OUR OWN UTILITY AND KEEPING RATES AFFORDABLE. I DON'T KNOW WHAT COULD BE A MORE COMPELLING CASE THAN THAT AND I'M THANKFUL FOR THE SUPPORT OF THIS COMMITTEE, BUT I REALLY AM EXCITED TO SEE THIS HAPPEN AND SEE THE COMMUNITY
BENEFIT. THANK YOU, MAYOR. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER CABELLO HAVRDA. COUNCILMEMBER COURAGE.
>> COURAGE: THANK YOU, MAYOR. I THINK ALL OF US KNOW WHAT I'M ABOUT TO SAY HERE IN THIS ROOM, BUT I THINK WE'VE GOT A BROADER AUDIENCE, THE GENERAL PUBLIC. I THINK IT'S IMPORTANT TO REMIND PEOPLE THE CITY OF SAN ANTONIO CITY COUNCIL IS VERY LIMITED IN WHAT IT CAN DO WHEN IT COMES ON OUR UTILITIES. WHEN WE TALK ABOUT CPS ENERGY, WE DON'T MANAGE THAT OPERATION. WE CAN'T TELL THEM HOW TO RUN CPS ENERGY.
NOW, WE DO HAVE A VOICE IN APPOINTING COMMITTEE MEMBERS TO SIT ON THE BOARD.
WE HAVE A VOICE WHEN IT COMES TO RATE INCREASES AND WHAT WE WOULD APPROVE AS A COUNCIL. WE HAVE A VOICE IN THEIR DEBT WHEN THEY GO TO BORROW MONEY BECAUSE IT IS TO A CERTAIN EXTENT IN THE NAME OF THE CITY OF SAN ANTONIO.
BUT WE CAN'T TELL THEM HOW TO RUN THEIR DAY-TO-DAY OPERATION.
WHEN THEY SEND MONEY TO US, THEY CAN'T TELL US HOW TO SPEND IT.
HOWEVER, IF WE'RE MAKING A SPECIAL ACOME EDUCATION AND SAYING MONEY IN EXCESS OF A CERTAIN THING AND SAYING WE'RE GOING TO RETURN THAT TO YOU, I THINK WE HAVE THE AUTHORITY TO SAY HOW WE EXPECT YOU TO USE THAT FUNDS AND WHERE THAT MONEY SHOULD GO TO, AGAIN, LET THEM OPERATE MORE EFFICIENTLY, EFFECTIVELY AND KEEP THE
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RATES DOWN. SO I THINK IT'S IMPORTANT FOR US TO KIND OF REMIND OURSELVES OF THAT AND LET THE PUBLIC KNOW THAT. BECAUSE I DON'T WANT THEM COMING ALONG AND SAYING WHY AREN'T YOU TELLING THEM WHAT TO DO.WE ARE LIMITED IN WHAT WE CAN DO, BUT I THINK WE'RE EFFECTIVE IN HOW WE USE THAT
AUTHORITY. SO THANK YOU, MAYOR. >> MAYOR NIRENBERG: THANK
YOU, COUNCILMEMBER COURAGE. COUNCILMEMBER ROCHA GARCIA. >> GARCIA: THANK YOU, MAYOR. AND BEN, AND COUNCILMEMBER PELÁEZ BROUGHT UP AN EXCELLENT POINT AND IT WAS WHAT IS RESILIENCY, RIGHT? AND SO LIKE FOR INSTANCE THEY ARE COMING TO US WITH SOME ADDITIONAL REQUESTS FOR SOFTWARE.
OR I BELIEVE THAT'S ONE OF THE THINGS THEY ARE SAYING FOR THE NEXT RATE INCREASE, IT'S TO TAKE CARE OF SOFTWARE. WOULD THAT BE CONSIDERED RESILIENCY TO YOU? I GUESS IN YOUR OPINION OR WHO DECIDES IS IT RESILIENCY
OR NOT RESILIENCY. >> GORZELL: WE SAY THERE'S X AMOUNT OF DOLLARS AVAILABLE, WE WOULD SIT DOWN AND IDENTIFY RESILIENCY, RELIABILITY PROJECTS WE THINK FIT WELL AND THEN WE WOULD ADVISE THE COUNCIL THIS IS WHAT WE'RE INVESTING IN. THE COMPUTER SYSTEM OR THE SOFTWARE SYSTEM YOU ARE TALKING ABOUT IS THE ERP SOLUTION. IT IS A MASSIVE CHANGE OF THE CORE FINANCIAL SYSTEM. PLUS I CAN'T REMEMBER, MAYBE LIKE 40, 50 ADDITIONAL SYSTEMS THAT TIE INTO THAT. IT IS REALLY MOST OF THE OPERATING SYSTEMS OUTSIDE OF THE SYSTEMS THAT RUN THE POWER PLANTS, SO IT IS A HUGE CHANGE.
DOES THAT FIT INTO RESILIENCY? I PROBABLY WOULD SAY NOT.
IT'S A COMPUTER CHANGEOUT, IT'S IMPORTANT FOR THE UTILITY, BUT THERE ARE A LOT OF THINGS WHEN YOU TALK ABOUT RESILIENCY AND RELIABILITY THAT THAT UTILITY HAS TO DO ON AN ONGOING BASIS ALL THE TIME. I DON'T FEEL LIKE WE'RE GOING TO HAVE ANY ISSUE IDENTIFYING PROJECTS TO MEET THAT DEFINITION THAT WE CAN THEN ADVICE COUNCIL IF WE GET TO THIS POINT WHERE THERE'S DOLLARS AVAILABLE
HOW WE COULD USE THOSE DOLLARS. >> GARCIA: MY FINAL QUESTION IS, SO AS WE TAKE -- AND I HATE TO USE THE WINDFALL, BUT THAT'S WHAT PEOPLE RECOGNIZE IT AS. AS WE RECOGNIZE THE -- OR THE USE OF THIS WINDFALL OR WE CONSIDER IT, COUNCILMEMBER PELÁEZ BROUGHT UP SO LITERALLY WILL YOU BRING US PROJECTS TO CHOOSE FROM SHOULD THIS GO ON? OR TELL ME HOW THAT WOULD WORK. HOW WOULD YOU ENVISION THIS PROCESS?
>> GORZELL: AGAIN, IF WE GOT TO THE END OF THE FISCAL YEAR AND WE HAD X AMOUNT OF DOLLARS THAT WERE ABOVE THIS 10% THRESHOLD, I THINK WE WOULD MEET WITH CPS AND WE WOULD IDENTIFY A PROJECT OR PROJECTS THAT WE THINK WE SHOULD INVEST IN.
AND THEN WE WOULD ADVICE THE COUNCIL THAT -- ADVISE THE COUNCIL THIS IS -- WE'RE SENDING THE MONEY BACK TO CPS AND IT'S FOR THIS PROJECT OR THESE PROJECTS.
AGAIN, I THINK IT'S SOMEWHAT OPEN TO DISCUSSION. YOU CAN TALK ABOUT -- I'LL GO BACK TO THE COMPUTER SYSTEM. SOMEBODY COULD ARGUE THAT IS RESILIENCY BECAUSE OF THE WAY SOME OF THAT FUNCTIONS. BUT I THINK THERE ARE A LOT OF -- THEY HAVE A BIG CAPITAL PLAN AND A BIG OPERATING BUDGET IN TERMS OF THE WORK THAT THEY'VE GOT TO DO. I FEEL CONFIDENT THAT WE WOULD BE ABLE TO IDENTIFY THINGS THAT FIT INTO THAT DEFINITION THAT YOU ALL ARE TALKING ABOUT. AND WE WOULD BE ABLE TO COME UP WITH THAT AND THEN ADVISE
THE COUNCIL OF THAT INVESTMENT. >> WALSH: AND I THINK AS YOU ENVISION THAT PRESENTATION TO COUNCIL, THE EXPECTATION THAT I THINK WE WOULD MAKE SURE THAT CPS IS PREPARED FOR IS THAT THE COUNCIL IS GOING TO LOOK FOR A CLEAR LINE OF SIGHT ON RELIABILITY, RESILIENCY, POTENTIAL IMPACTS TO FUTURE RATE ISSUES THAT THEY WILL NEED TO BE PREPARED FOR AS THEY ANSWER THE QUESTIONS FROM COUNCILMEMBERS ABOUT, YOU KNOW, THIS RESILIENCY PROJECT OR THIS RELIABILITY PROJECT. BUT THE KEY WILL BE DEFINING THE CLEAR LINE OF SIGHT FOR THE COUNCILMEMBERS ON HOW THIS POTENTIAL USE OF MONEY HELPS IMPROVE THOSE THINGS.
>> GARCIA: SURE, AND I GUESS THE REASON I KEEP ASKING ABOUT THIS, SPECIFICALLY I STILL DON'T KNOW WHAT THEIR PLAN IS FOR RELIABILITY AND RESILIENCY PRACTICES. SO I'M STILL HESITANT TO SEE WHAT I HAVEN'T SEEN, RIGHT, LIKE EXACTLY WHAT THEY ARE DOING. AND SO I'M TRYING TO SEE, I KNOW AND WE HAVE A PARKING LOT OF ISSUES, WE JUST DISCUSSED THIS IN THE PREVIOUS ITEM, RIGHT, THERE'S CCRS THAT TECHNICALLY WE COULD BUDGET THIS MONEY TO. WE DON'T HAVE TO SCRAP, WE DON'T HAVE TO PLAY HUNGRY,
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HUNGRY HIPPOS. SO THAT'S WHY I WAS ASKING. WHAT ARE THE ALTERNATIVES.LIKE CAN WE -- I'M TRYING TO GET -- BUT I ALSO WAS WONDERING IF WE'RE GOING TO HAVE A COMMUNITY PROCESS TO DISCUSS THIS. BECAUSE ONE OF THE THINGS THAT I'D LOVE TO HAVE A COMMUNITY PROCESS TO DISCUSS THIS.
AS WELL. AND WHAT DO YOU SEE BEING THE NEXT STEP IN A COMMUNITY
BUILDING PROCESS? >> GORZELL: I'M GOING TO RESUME RISE THE RECOMMENDED APPROACH, HOW I THINK IT WOULD WORK AND WHAT WE ARE DOING AND MAYBE WHAT WE'RE NOT DOING. SO WHEN I TALKED ABOUT THE RECOMMENDED APPROACH, I PIVOTED FROM THE ORIGINAL CCR. WE WORKED IN COLLABORATION WITH THE COUNCILWOMAN TO COME UP WITH THIS ALTERNATIVE APPROACH.
SO THIS SLIDE, 8, IS ALL THIS RECOMMENDED APPROACH IS DOING.
IT IS GOING TO SAY IF WE HAVE AN AADOPTED BUDGET FOR CPS, IF WE EXCEED IT MORE THAN 10%, THE AMOUNT OVER THE 10%, 80% OF THAT MONEY IS GOING BACK TO CPS FOR RESILIENCY AND RELIABILITY PROJECTS AND 20% IS GOING TO GO INTO THE REES FUND.
WE'RE GOING TO MAKE THAT DECISION, BUT THAT'S ALL WE'RE DOING.
THE RATE CASES WILL STILL MOVE FORWARD FROM CPS BASED ON WHATEVER THEIR REQUIREMENTS ARE. AND OUR JOB, MY JOB, CPS'S JOB, IF WE -- IF A RATE CASE COMES FORWARD, OUR JOB IS TO MAKE SURE THAT IT IS A SOLID BUSINESS CASE, IT'S JUSTIFIED AND IT'S NEEDED. AND WE'RE GOING TO HAVE TO LAY THAT OUT TO YOU ALL AND MOVES FORWARD. THAT WILL BE THE JOB TO -- WE CAN CERTAINLY HIGH LIE RESILIENCY AND RELIABILITY PROJECTS. WITH THIS CHANGE, IF WE GET TO THE END OF THE FISCAL YEAR AND WE'VE GOT DOLLARS ABOVE THE 10%, WE TALK TO CPS, AGAIN WE HAVE THEIR PLANS, WE KNOW WHAT THOSE LOOK LIKE.
WE WOULD IDENTIFY RESILIENCY, RELIABILITY PROJECTS THAT I THINK MORE CLEARLY MEET THE DEFINITION OF WHAT PEOPLE TALK ABOUT. BECAUSE I THINK THERE ARE A LOT OF THINGS THAT COULD MEET RESILIENCY TODAY. THAT DEFINITION HAS GOT EVEN PRETTY BROAD. WE WOULD TRY TO IDENTIFY THINGS WE FEEL WOULD MOVE THE NEEDLE IN THOSE AREAS AND SAY TO CPS, HERE'S X DOLLARS, YOU CAN HAVE THOSE DOLLARS, BUT YOU ARE GOING TO HAVE TO SPEND THEM ON THESE PROJECTS.
WE WOULD WATCH THAT, REPORT BACK TO COUNCIL. I THINK IN PRACTICE THAT'S HOW IT WOULD WORK IF WE GOT TO THAT POINT. OR WHEN WE GET TO THAT
POINT. >> GARCIA: THANK YOU, BEN. THANK YOU, MAYOR.
>> CHAIR: THANK YOU, COUNCILMEMBER ROCHA GARCIA. ANY FURTHER DISCUSSION ON THIS PROPOSAL? I'LL JUST SAY A COUPLE THINGS.
FIRST, BEN, THIS IS ABOUT WHEN CPS REVENUE COMING BACK TO THE CITY EXCEEDS 10% OF YOUR FORECAST. YOUR BUDGET FORECAST. SO THIS IS REALLY COMING INTO PLAY IN FULL DISPLAY OVER THE LAST COUPLE YEARS, WHICH IS WHY WE HAVE THAT CONVERSATION ABOUT 10%. LAST YEAR AS IT RELATED TO THE EXCESS REVENUES RELATED TO THE GAS SURCHARGE. DO WE HAVE A REVENUE ESTIMATE ON SEPTEMBER THIS
YEAR ALREADY? >> GORZELL: SEPTEMBER OF '23? YES, WE HAVE -- ACTUALLY WE DON'T HAVE AN ESTIMATE, WE NOW HAVE THE ACTUAL PAYMENT
FROM CPS ENERGY. >> MAYOR NIRENBERG: WHAT IS THAT?
>> GORZELL: IT CAME IN AT -- IT CAME IN AT $51.1 MILLION.
OUR REESTIMATE THAT WAS INCLUDED IN BUDGET $43.6 MILLION, SO IT CAME IN $7.5 MILLION OVER THAT ESTIMATE. RELATIVELY SPEAKING, NO OFF-SYSTEM SALES, I THINK IT WAS AT ONE POINT 2 MILLION, WHICH IS WITHIN THE RANGE WE TIPPED TYPICALLY SEE SO IT WAS NOT OFF-SYSTEM SALES. THAT ADDITIONAL 7.5 MILLION IN SEPTEMBER KIND OF HIGHLIGHTS SOME OF WHAT WE HAVE BEEN SEEING IN TERMS OF THE UNPREDICTABILITY YOU CAN VARIABILITY WE'VE BEEN DEALING WITH.
IF YOU WENT THROUGH SEPTEMBER OF '23 THROUGH JUNE, WE WERE ONLY UP OUTSIDE OF SOME PROPERTY SALES, WE WERE UP ABOUT 3.6% ON THE BUDGET.
WITH THIS 7.5 MILLION, WE'RE AT 15.75% OF THE ADOPTED BUDGET.
SO IT CHANGED RAPIDLY IN A PERIOD OF ABOUT THREE MONTHS.
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WHEN YOU LOOK AT THE SUMMER OF '22 VERSUS THE SUMMER OF '23, VERY HOT SUMMERS, A LOT OF DAYS OVER 100 DEGREES, RELATIVELY SPEAKING NOTHING OUT OF THE ORDINARY IN OFF SYSTEM STALES IN 2022. OBVIOUSLY A LOT IN 2023 IN ONE MONTH, IN AUGUST.WE STARTED THE SUMMER WITH JUNE OF THIS YEAR, FORGET ABOUT THE BUDGET, JUNE OF THIS YEAR COMPARED THE JUNE OF '22, $10 MILLION LESS. THAT AGENTS HUGE VARIANCE ON A MONTHLY NUMBER. I GET TO SEPTEMBER, THIS NUMBER IS HIGHER IF YOU TAKE OFF THE OFF-SYSTEM SALES IN AUGUST. SO THERE'S SOME TRENDS THAT WE HAVEN'T REALLY SEEN BEFORE. IT'S SOMETHING OBVIOUSLY WE'LL HAVE TO CONTINUE TO WATCH, BUT I THINK THE UNPREDICTABILITY WILL BE THERE. IT'S GOING TO BE HOW DO WE MANAGE IT.
>> MAYOR NIRENBERG: RIGHT. AND SO THERE'S NO DOUBT THAT THE REVENUE COMPARED TO MAYBE TEN YEARS AGO IS A LOT MORE VOLATILE. OBVIOUSLY THAT'S BECAUSE OF WEATHER EVENTS AND THE EXTREMES THAT WE'RE SEEING. IT'S ALSO RELATED TO THE ENERGY INDUSTRY TRANSITION ITSELF. IT'S RELATED TO THE FACT THAT AS COUNCILMEMBER PELÁEZ STATED, THERE'S A SEVERE SHIRKING OF RESPONSIBILITY HAPPENING AT THE LEGISLATURE WITH REGARDING TO MANAGING THE ASSETS ON THE TEXAS ENERGY GRID WRIT LARGE. WHAT I WOULD JUST LIKE TO SAY, NUMBER ONE, THIS IS AN ORDINANCE. SO UNLIKE, SAY, WE WERE PUTTING FORWARD A CONSTITUTIONAL AMENDMENT, CITY COUNCIL WILL HAVE THE OPPORTUNITY IN YEARS LATER TO TAKE A LOOK AT IS IT PERFORMING THE WAY WE WANT TO.
AND FRANKLY, FROM ONE YEAR TO THE NEXT IF THERE'S SOME -- I'M LOOKING FOR THE RIGHT WORD, EXTENUATING CIRCUMSTANCES THAT REQUIRES US TO TAKE A DIFFERENT LOOK, WE COULD DO THAT. BUT IT DOES PROVIDE SOME GUARDRAILS IN TERMS OF HOW WE WOULD DEAL WITH EXCESS REVENUE THAT EXCEEDS WHAT THE BEST CFO IN MUNICIPAL GOVERNANCE IS TELLING US IS PROBABLY GOING TO COME IN IN TERMS OF CPS REVENUE, ENERGY REVENUE. WHICH GIVEN THE VOLATILITY, I'M COMFORTABLE WITH THAT BECAUSE, BEN, YOU'VE DONE A GREAT JOB AND I ASSUME YOUR MODELING OF THE REVENUE IS GOING TO GET MORE REFINED AS WE DEAL WITH THIS NEW REALITY, THE TRUTH IS I DON'T THINK WE'RE GOING TO SEE CONSISTENTLY YEAR AFTER YEAR SUCH HIGH EXCESS HE HAVE REVENUES THAT FALL OUTSIDE OF YOUR FORECAST. I WOULD JUST LIKE TO SAY A COUPLE OTHER THINGS, THOUGH, RELATED TO CPS BECAUSE THERE'S BEEN A LOT OF DISCUSSION ABOUT CPS, HOW IT'S PERFORMING. I AGREE, COUNCILWOMAN, EVERYBODY SHOULD WATCH THOSE MEETINGS. THEY ARE VERY INTERESTING.
IT'S YOUR UTILITY SO YOU THUD TAKE ACTIVE INTEREST IN IT.
I DO WANT TO SAY GIVEN WITH WHERE WE HAVE BEEN WITH WINTER STORM URI WHICH WAS PRECEDED BY A PANDEMIC IN WHICH A COMMUNITY LIKE OURS THAT HAS MANY COSTS-BURDENED FAMILIES HAS CONTRIBUTED TO AN AMOUNT OF BAD DEBT WE'RE STILL WORKING OUR WAY THROUGH, THIS IS A PUBLIC UTILITY. WE HAVE A RESPONSIBILITY ALMOST LIKE A -- WELL, NOT ALMOST LIKE, WE CAN'T CUT PEOPLE OFF WHEN IT'S 105 DEGREES OUTSIDE. WE CAN'T CUT PEOPLE OFF WHEN IT'S BELOW 30 DEGREES OUTSIDE. WE'RE A PUBLIC UTILITY. IT WOULD BE COMPLETELY IRRESPONSIBLE FOR US TO DO THAT SO WE DON'T AND THAT'S CONTRIBUTED TO SOME OF THIS DEBT THAT WE'VE GOT TO WORK OUR WAY THROUGH. GIVEN ALL THOSE CIRCUMSTANCES, CPS LEADERSHIP IS DOING A WONDERFUL JOB IN MANAGING AND BALANCING THESE ISSUES. THERE IS A SUSPECT PORTED TRANSITION HAPPENING.
I THINK IT'S P2 OR P9, BUT WE'RE WORKING THROUGH AN ENERGY TRANSMISSION.
THERE IS NEED TO UPGRADE THE ELECTRONICS SYSTEM WHICH IS PART OF THEIR DEMAND MANAGEMENT'S AS WELL AS CYBERSECURITY AND ALL THAT. THEY'VE DONE MORE TREE TRIMMING WHICH RELATES TO RESILIENCY THAN IN THE PAST TWO DECADES.
THERE'S A LOT OF INVESTMENT HAPPENING IN CPS ENERGY, I THINK PUTS THEM ON GOOD FOOTING. I DO AGREE IN THE BEST OR IN MOST CIRCUMSTANCES I WOULD WANT THIS COUNCIL TO HAVE AS MUCH DISCRETION ON THE GENERAL FUND REVENUE THAT COMES INTO THE CITY AS POSSIBLE TO BE RESPONSIVE TO OUR CITIZENS.
BUT IT'S PRETTY CLEAR THAT WHEN YOU HAVE EXCESSIVE REVENUE RELATED TO WHAT'S HAPPENING ON THE ENERGY GRID AND WHAT'S HAPPENING WITH OUR OWN COMMUNITY, WE WANT TO ADDRESS THE ISSUE THAT CAUSED IT. AND SO I DO FEEL COMFORTABLE WITH SAYING THAT A PORTION OF THAT IS GOING TO GO BACK TO CPS ENERGY WITH
[01:45:02]
DISCUSSION FROM THE COUNCIL ABOUT HOW IT'S GOING TO BOLSTER RELIABILITY AND RESILIENCY, AND A PORTION IS ALSO KEPT AT THE CITY TO DO THE SAME THING UNDER OUR PURVIEW WITH THE ACTIVITIES THAT ARE IN THE REES FUND. SO I DO THINK THIS IS A GOOD ALTERNATIVE. THAT BEING SAID, I THINK IT'S GOING TO BEAR SOME WATCHING AS IT PERFORMS IN COMING YEARS, BUT THAT'S GOING TO BE A RESPONSIBILITY THAT WE ALL SHARE. SO I'M GOOD WITH THE ALTERNATIVE AND UNLESS I AM HEARING ANYTHING DIFFERENT, WE'RE GOING TO MOVE THIS TO THE FULL CITY COUNCIL ON THE NEXT AVAILABLE AGENDA. IS THAT HOW IT'S GOING TO WORK?>> WALSH: MAYOR, WE'LL NEED TO BRIEF COUNCILMEMBERS, BUT WE WOULD ADD THIS TO -- BECAUSE THIS IS AN ADJUSTMENT TO OUR FINANCIAL POLICY THAT GETS ADOPTED ONCE A YEAR. AND SO WE WOULD INCORPORATE IT WITHIN THE APRIL BUDGET WORK SESSION AS THE FINANCIAL POLICY, BUT BETWEEN NOW AND THEN, I MEAN LIKE BEGINNING NEXT WEEK OR THIS WEEK, WE NEED TO GO TALK TO THE REST OF THE COUNCILMEMBERS. OBVIOUSLY THIS HAS BEEN A HIGH-PROFILE ISSUE AND I
THINK WE OUGHT TO DO THAT POST HASTE. >> MAYOR NIRENBERG: WE CAN ALSO WORK TO DEFINE THE PARAMETERS OF WHAT RESILIENCY MEANS.
>> WALSH: I HAD THE SAME THOUGHT. WE SHOULD BE PREPARED ON WHAT IS THE ORDER OF OPERATIONS SO IT'S CLEARLY DELINEATED FOR BOTH US AND
CPS. >> PART OF THE BUDGET. >> MAYOR NIRENBERG: AND LAST THING I'LL SAY SINCE I COMPLIMENTED CPS LEADERSHIP, WE DO HAVE LIMITED RESPONSIBILITIES AT THE CITY COUNCIL IN TERMS OF HOW WE SHARE THAT BURDEN OF MANAGEMENT. YOU KNOW, FOUR THINGS RIGHT AWAY, DEBT ISSUANCE, RATE APPROVAL AND THEN THE BOARD ITSELF. BUT THIS COUNCIL AND PREVIOUS ITERATION THROUGH THE CHALLENGES WE'VE SEEN HAS GIVEN THEM THE TOOLS AND HAS EXHIBITED A LOT OF LEADERSHIP IN GETTING CPS ENERGY ON THE RIGHT FOOT -- OR BACK ON ITS FEET, I SHOULD SAY. SO MY COMPLIMENTS TO MY COLLEAGUES AROUND THE TABLE AND THE REST OF THE CITY COUNCIL AS WELL.
THAT'S A SHARED RESPONSIBILITY GETTING CPS TO BE THE ENVY OF THE UTILITY INDUSTRY AS FAR AS PUBLIC ENTITIES GO NATIONWIDE, WHICH IS NOT THE CONVERSATION WE WERE HAVING EVEN THREE YEARS AGO. SO GREAT JOB EVERYBODY AND I THINK THIS HAS BEEN A GOOD CONVERSATION. DID WE NEED ACTION, ERIK, TO
MOVE IT TO THAT BUDGET? >> WALSH: YES, SIR. >> MAYOR NIRENBERG: SO
THERE IS A MOTION AND A SECOND. >> GARCIA: SO THE ACTION ITEM AS STATED STATES IT'S GOING TO GO TO FULL COUNCIL. DO WE NEED TO AMEND THAT
BECAUSE -- >> MAYOR NIRENBERG: AS FAR AS THE BUDGET CONVERSATION.
>> WALSH: BUDGET. >> GARCIA: AND YOU ARE OKAY WITH THE TIME LINE?
I GUESS THAT'S WHAT MY QUESTION IS. >> WALSH: IF THE GOVERNANCE COMMITTEE IS SUPPORTIVE OF THE ALTERNATIVE APPROACH, THAT GIVES US THE FINANCIAL SECURITY OR ANSWERS THOSE QUESTIONS NOW, THAT MOVES US INTO PREPARING -- BRIEFING ALL THE REST OF THE COUNCILMEMBERS AND PREPARING
FOR THAT LARGER FULL COUNCIL CONVERSATION IN APRIL. >> MAYOR NIRENBERG: PERCENT MARGIN ALREADY EXISTS. NOW WE'RE DEFINING HOW WE
DISTRIBUTE THAT 10. >> WALSH: JUST THAT AND A LITTLE MORE RIGGER TO IT.
>> MAYOR NIRENBERG: SO THERE'S A MOTION AND A SECOND.
LET ME GO AHEAD AND CALL THE COMMITTEE. ALL THOSE IN FAVOR SAY AYE.
>> MOTION CARRIES. ANY FURTHER ITEMS? I THINK THAT'S IT.
GREAT JOB, EVERYBODY. GREAT DISCUSSION. TIME IS 11:54
* This transcript was compiled from uncorrected Closed Captioning.