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>> GARCIA: WE WANT TO GET STARTED WITH THE MUNICIPAL UTILITIES COMMITTEE, FEBRUARY 25, 2025. A WONDERFUL DAY AND EVERYONE HERE TO LISTEN TO THE PRESENTATION. WE'LL START WITH THE ROLL CALL.
MUCH. WE'LL START OFF WITH THE APPROVAL OF THE MINUTES FOR JANUARY 28 FOR THE MUNICIPAL UTILITIES COMMITTEE. I'LL ENTERTAIN A MOTION.
>> I'LL MAKE A MOTION TO APPROVE THE MINUTES OF JANUARY 28.
>> GARCIA: THERE IS A MOTION AND A SECOND. ALL IN FAVOR SAY AYE.
ANY OPPOSED? MOTION CARRIES. WE'LL GO ON WITH PUBLIC COMMENT. WE HAVE THREE PEOPLE TODAY TO SPEAK ON ITEMS 3 AND 4.
ANA TREVINO, FOLLOWED BY DARBY RILEY. THE FLOOR IS YOURS.
>> HI, HELLO. MY NAME IS NAN IN A ANA TREVINOI WORK WITH TEXAS RISING.
WE ARE AN ORGANIZATION THAT IS HELPING TO BUILD POWER WITH YOUNG PEOPLE ACROSS COLLEGE CAMPUSES. AS AN ORGANIZATION WE ARE CONCERNED ABOUT SAFEGUARDING THE ENVIRONMENT AND HOW UTILITIES SAFEGUARD YOUR COMMUNITY.
I'M HERE TO TALK ABOUT ITEM 3 AND 4. FIRST I UNDERSTAND THAT CPS ENERGY WILL BE TALKING ABOUT THE UPCOMING YEAR OF 2026. WE ASK THAT THEY DO NOT INCREASE THE RATES OF RESIDENTS FOR THE UPCOMING FISCAL YEAR.
MANY YOUNG PEOPLE, LOW INCOME AND WORKING FAMILIES, STRUGGLE TO KEEP UP WITH THEIR UTILITY BILLS AS RATES INCREASE, WHICH CAN IMPACT THEIR HEALTH AS THEY MAY BE FACED WITH DECIDING TO PAY FOR ELECTRICITY AND MEDICINES AND FOOD.
I DO NOT THINK WE SHOULD RAISE THE ELECTRIC RATES THAT COULD MAKE MORE AND MORE PEOPLE FACE THOSE DECISIONS. CONCERNING AGENDA ITEM NUMBER 4, WE SUPPORT ELIMINATING WATER DISCONNECTIONS FOR APARTMENT RESIDENTS IN GOOD STANDING AND URGE COMMITTEE MEMBERS TO INCLUDE THE ELIMINATION OF ELECTRICITY DISCONNECTIONS FOR APARTMENT RESIDENTS IN GOOD STANDING AS WELL. IT'S RIDICULOUS THAT RESIDENTS PAY THEIR DUES AND STILL RECEIVE PUNISHMENT FROM PUBLIC SERVICES AT THE FAULT OF CORPORATIONS.
AS A COLLEGE STUDENT, THIS HAS BECOME A MORE RECENT FEAR OF MINE.
MANY OF MY PEERS AND I LIVE AT APARTMENTS OR STUDENT HOUSING LIKE ROSE LAWN APARTMENTS, AND COULD POTENTIALLY FAIL TO MEET THEIR PAYMENTS AND IMPACT ALL THE APARTMENT RESIDENTS. ENACTING A POLICY THAT CONSIDERS BOTH WATER AND ELECTRICITY UTILITIES WILL PREVENT ANOTHER OVER STEP BY PUBLIC UTILITIES LIKE THIS FROM HAPPENING IN THE FUTURE. THANK YOU.
>> GARCIA: THANK YOU SO MUCH, ANA. DARBY RILEY FOLLOWED BY RYAN
BALDWIN. >> GOOD MORNING. I'M DARBY RILEY, A MEMBER OF THE SIERRA CLUB HERE IN SAN ANTONIO. I'VE PROVIDED A HANDOUT FOR THE COUNCIL MEMBERS BASICALLY TO REMIND PEOPLE THAT THE COUNCIL HAS MORE POWER THAN PEOPLE REALIZE WITH CPS ENERGY. AND THAT'S SHOWN IN THE BOND ORDINANCE OF SEPTEMBER OF 2020 AND ALL THE PREVIOUS BOND ORDINANCES.
THAT'S WHERE CPS GETS ITS POWERS IS FROM THOSE BOND ORDINANCES.
AND IN THERE I'VE PROVIDED YOU JUST THE PAGE, IT'S A 72 PAGE ORDINANCE, BUT ON PAGE 40 IT SAYS THE BOARD OF TRUSTEES IN EXERCISING THE MANAGEMENT POWERS GRANTED HEREIN, WILL ENSURE THAT POLICIES ADOPTED AFFECTING RESEARCH, DEVELOPMENT AND CORPORATE PLANNING WILL BE CONSISTENT WITH CITY COUNCIL POLICY, AND POLICIES ADOPTED BY THE BOARD OF TRUSTEES PERTAINING TO SUCH MATTERS WILL BE SUBJECT TO CITY COUNCIL REVIEW. THE SIERRA CLUB HAS BEEN DOING A QUESTIONNAIRE TO CANDIDATES FOR COUNCIL AND MANY OF THEM DO NOT REALIZE THAT THE CITY COUNCIL HAS ANY AUTHORITY OVER CPS ENERGY. I'VE BEEN IN A LITIGATION REPRESENTING PEOPLE AGAINST THE CITY FOR FOUR YEARS NOW BECAUSE THE CITY BLOCKED A CHARTER AMENDMENT THAT ATTEMPTED TO GIVE AND MAKE SURE THAT COUNCIL EXERCISE MORE POWER OVER CPS ENERGY. THAT WAS BLOCKED BY THE CITY IN A SECRET ELECTION THAT IS NOW ON APPEAL IN AUSTIN. SO THAT'S THE POINTED OF MY STATEMENT, THANKS.
>> GARCIA: THANK YOU, MR. RILEY. RYAN BALDWIN.
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>> I AM RYAN BALDWIN AND I AM HERE TO GIVE REMARKS ABOUT ITEM NUMBER 4, THE CCR TO ELIMINATE WATER DISCONNECTIONS AT MULTI-FAMILY COMMUNITIES.
THE SAN ANTONIO APARTMENT ASSOCIATION IS A NON-PROFIT TRADE ASSOCIATION COMPOSED OF DIVERSE GROUPS REPRESENTING AND SERVING MULTI-FAMILY RENTAL HOUSING INDUSTRY PROFESSIONALS WHOSE PURPOSE IS TO PARTICIPATE IN THE LEGISLATIVE PROCESS, PROMOTE PROFESSIONAL THROUGH COMMUNICATION, PROVIDE COMMUNICATION TO OUR MEMBERS AND SUPPORT THE SURROUNDING COMMUNITIES. WE ARE COMPRISED OF OVER 1900 PROPERTY OWNERS, MANAGEMENT COMPANIES AND MULTI-FAMILY COMMUNITIES REPRESENTING OVER 260,000 RENTAL HOUSING UNITS IN THE SAN ANTONIO AREA.
OUR MEMBERSHIP INCLUDES OVER 400 SUPPLIER COMPANIES PROVIDING PRODUCTS AND SERVICES TO OUR INDUSTRY. WE AGREE THAT IT IS CRITICAL TO KEEP WATER ON FOR ALL SAN ANTONIO RESIDENTS, HOWEVER, THE SAN ANTONIO APARTMENT ASSOCIATION STRONGLY DISAGREES WITH THE CCR'S DIRECTION THAT THE PROACTIVE APARTMENT INSPECTION PROGRAM NEEDS TO BE AMENDED TO ACCOMPLISH THIS GOAL.
OUR ASSOCIATION BEGAN WORKING WITH SAWS DIRECTLY IN SEPTEMBER OF 2024 TO LEARN ABOUT THEIR SHUTOFF PROCESSES, TO BECOME A PARTNER AND A LINE OF COMMUNICATION FOR THEM WHEN IT COMES TO DELINQUENT RENTAL HOUSING COMMUNITIES.
AT THE TIME SAWS HAD A LIST OF 15 BLINK WENT PROPERTIES THAT WERE IN THE LARGER SCALE THAT WERE STRUGGLING TO MAKE CONTACT AND MAKE PAYMENT PLANS.
AS BOARD PRESIDENT AT THE TIME, I PERSONALLY MADE AND EFFORT TO VISIT EACH OF THOSE COMMUNITIES AND WORKED WITH THOSE COMMUNITIES TO MAKE PAYMENT ARRANGEMENTS AND FIND A PROCESS FORWARD. SINCE THEN SAWS HAS TAKEN SEVERAL STEPS TO IMPROVE THEIR OUTREACH AND NOTIFICATION PROCESSES IN AN EFFORT TO MAKE SURE THE ACCOUNT HOLDER AND MANAGEMENT FOR THE DELINQUENT PROPERTIES IN QUESTION ARE CONTACTED APPROPRIATELY. WE FEEL THESE IMPROVEMENTS -- WITH THESE I AM AS THAT WATERSHED SHUTOFF WILL NOT TAKE PLACE AT LARGER MULTI-FAMILY PROPERTIES. CURRENTLY WITH A THE CURRENT PROGRAM CODE ENFORCEMENT CAN ISSUE A NOTICE OF VIOLATION TO A PROPERTY IF WATER HAS BEEN SHUT OFF AND RESIDENTS DO NOT HAVE RUNNING WATER. AND DEVELOPMENT SERVICES CAN REVOKE A BUSINESS' CERTIFICATE OF OCCUPANCY IF THERE'S NO RUNNING WATER.
EVEN THE THREAT OF REVOKING A PROPERTY CERTIFICATE OF OCCUPANCY COULD BE ENOUGH TO HELP MANAGEMENT COME INTO COMPLIANCE. THESE ARE EXISTING TOOLS THAT DEVELOPMENT SERVICES DEPARTMENT CAN USE FOR ENFORCEMENT WITHOUT THE NEED TO AMEND THE PROACTIVE INSPECTION PROGRAM. THE APARTMENT ASSOCIATION SUPPORTS USING THESE ALREADY AVAILABLE TOOLS FOR ENFORCEMENT.
THE APARTMENT ASSOCIATION DOES NOT SUPPORT THE ORDINANCE TO PUNISH RENTAL HOUSING COMMUNITIES AND OWNERS FOR BEING SIMPLY LATE ON A UTILITY BILL.
SAWS PAYMENT HISTORY SHOULD NOT BE TIED TO THE PROACTIVE APARTMENT INSPECTION PROGRAM. FOR A PROPERTY STRUGGLING TO PAY SAWS' BILLS, FORCING THEM ON TO A PROGRAM THAT COST THEM $100 PER UNIT PER YEAR, FOR EXAMPLE AN UNIT WITH 200, THAT'S 20,000, WOULD FURTHER EXACERBATE THE FINANCIAL STRUGGLE TO PAY BILLS, PROVIDED NEEDED MAINTENANCE TO THE PROPERTY AND RESIDENTS IMPACTED.
>> GARCIA: THANK YOU SO MUCH, MR. BALDWIN. ALL RIGHT.
WE WILL MOVE ON TO ITEM NUMBER 2, WHICH IS AN UPDATE ON CPS ENERGY'S GENERATION
PLAN. CORRIE, IT'S ALL YOURS. >> THANK YOU.
I WILL DO THIS AGENDA ITEM AND THEN ROLL INTO THE BUDGET UPDATE AS WELL.
SO WITH ME HERE TODAY I DO HAVE SEVERAL OF THE LEADERSHIP TEAM.
WE ALSO HAVE OUR BOARD CHAIR MR. ROMERO AS WELL. WHILE I WILL BE DOING THE PRESENTING FOR THE Q&A WE'LL HAVE A FULL SQUARE FOOT OF OUR TEAM MEMBERS HERE TO ANSWER ANY QUESTIONS. WE'LL START WITH THE GENERATION UPDATE.
I'LL GIVE A LITTLE BIT OF BACKGROUND AND KIND OF ZOOM OUT ON A LOOK AT TEXAS AND THEN A RECAP OF HOW WE APPROACHED OUR GENERATION PLAN THAT WE'VE BEEN EXECUTING TO AND THE PROGRESS ON THAT. SO AS MANY OF YOU KNOW, ERCOT IS THE MARKET THAT WE AT CPS ENERGY IN SAN ANTONIO OPERATE WITHIN, AND THERE CONTINUES TO BE HEADLINES ABOUT TEXAS EXPERIENCING SIGNIFICANT GROWTH AND WHETHER OR NOT WE AS A STATE WILL HAVE ENOUGH GENERATION TO MEET THAT CHALLENGE.
AND IN THE MOST RECENT ERCOT REPORTS, THEY REFLECT THERE COULD BE POTENTIAL SHORTAGES STATEWIDE AS SOON AS NEXT YEAR IN A WORST CASE SCENARIO.
NOW, THERE ARE SEVERAL ASSUMPTIONS IN THAT REPORT AND, YOU KNOW, WAYS THAT THEY LOOK AT PARTICULAR RESOURCES, BUT I THINK REGARDLESS OF THE METHODOLOGY WE SAW THE WRITING ON THE WALL AND WE BEGAN OUR WORK IN 2022 BUILDING OUR VISION 2027. AND ULTIMATELY LAUNCHED INTO A COMMUNITY-INVOLVED EFFORT TO BUILD THIS MIDTERM GENERATION PLAN TO ENSURE THAT SAN ANTONIO AT LEAST
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AND OUR CUSTOMERS HAVE THE POWER THAT THEY NEED, AND THEY WILL WITH THIS PLAN THAT WE'LL SPEAK ABOUT. SO IF YOU RECALL, THE RATE ADVISORY COMMITTEE, THE RAC, WAS SET UP AND IT WAS CHAIRED BY REED WILLIAMS AND FOR MOST OF 2022 THE RAC AS I'LL CALL IT, WENT THROUGH A PRETTY INTENSE AND THOROUGH PROCESS TO EVALUATE MULTIPLE OPTIONS TO ADDRESS BOTH THE GROWTH IN OUR COMMUNITY AND THE AGING GENERATING ASSETS THAT WE SPOKE ABOUT THAT ARE NEAR RETIREMENT. THOSE ARE TWO CHALLENGES.WE ALSO BROUGHT IN SOME THIRD-PARTY TO ASSIST THE RATE ADVISORY COMMITTEE IN THEIR ANALYSIS AND AS A RESULT OF THAT EFFORT, A RECOMMENDATION CAME OUT OF THE RAC AND THAT WAS SHARED WITH OUR BOARD OF TRUSTEES THAT OUTLINED A FAIRLY BLENDED VARIETY OF GENERATING OPTIONS TO MEET OUR COMMUNITY NEEDS.
AND IN JANUARY OF 2023 OUR BOARD OF TRUSTEES APPROVED THE CURRENT GENERATING PLAN THAT WE HAVE BEEN EXECUTING TO EVER SINCE. KEY COMPONENTS ARE NOTED ON THE SLIDE THERE OF THAT PLAN, RETIRING OR CONVERTING OUR EXISTING COAL PLANTS.
CHANGING OTHER PLANTS AND ADDING WIND, SOLAR STORAGE AND GAS, THE TECHNOLOGIES THAT WE KNOW EXIST TODAY. SO ON THE NEXT SLIDE THIS IS A VISUAL DEPICTION THAT WE HAD USED FOR WHAT WAS BACK THEN IN JANUARY 2023 THEN IN JANUARY 2023 ANTICIPATED TIMELINE OF THE VARIOUS RETIREMENTS AND ADDITIONS.
WITH THE REQUIREMENTS BEING ON THE BOTTOM THERE AND THE ADDITIONS BEING ON THE TOP THROUGH 2030. AND ON THE LEGEND YOU CAN SEE THE QUANTITY OF WHAT'S BEING ADDED AND SUBTRACTED. AND WHAT JUMPS OFF THE PAGE IS WE HAVE NEARLY 10,000 MEGAWATTS COMING ONLINE DURING THIS TIME PERIOD TO 2030 AND A LITTLE LESS THAN 3,000 MEGAWATTS RETIRING. THAT ILLUSTRATION JUST REINFORCES THE NET GROWTH IN OUR COMMUNITY THAT WE ARE EXPECTING.
I THINK FROM THIS PAGE, AND JUST TO BE VERY CLEAR, ANY PLAN FORWARD THAT WE ARE GOING TO HAVE TO PUT TOGETHER A COUPLE OF YEARS AGO WAS GOING TO HAVE TO REQUIRE SIGNIFICANT INVESTMENT BASED ON THE AMOUNT OF UNITS THAT WE'RE RETIRING AND BASED ON THE EXPECTED GROWTH WE SAW COMING.
SO THE QUESTION WAS HOW DO WE ACCOMPLISHIS THIS, NOT DO WE DO IT OR NOT DO IT, AND THAT'S THE BLENDED APPROACH AND PLAN THAT I'LL SPEAK TO. SO IF WE LOOK AT THIS NEXT SLIDE HERE, YOU FAST FORWARD FROM JANUARY OF 2023 TO TODAY.
AND YOU CAN SEE THAT WE'VE MADE MUCH MORE PROGRESS THAN WE HAVE PLANNED AND WE'RE WELL AHEAD OF SCHEDULE AND YOU CAN SEE THE DIFFERENT GENERATION TYPES ON THE LEFT-HAND SIDE. BUT THE BIG TAKEAWAY REALLY IS ON THE RIGHT-HAND SIDE OF THIS SLIDE. OUR GOAL THROUGH LAST YEAR, THE END OF 2024, BASED ON THE ORIGINAL PLAN, WAS TO HAVE ABOUT 830 MEGAWATTS NEW CAPACITY ONLINE.
AND WE SURPASSED THAT AND ACHIEVED A LITTLE OVER 2500 MEGAWATTS SO FAR.
THAT HAS PROVED TO BE VERY, VERY POSITIVE FOR OUR COMMUNITY.
A SUBSET OF THIS SLIDE IS A SIGNIFICANT ACCOMPLISHMENT THAT YOU SEE AROUND THE NATURAL GAS PROFILE THAT WE'VE ADDED. AS YOU MAY RECALL, WE HAD AN OPPORTUNITY LAST YEAR TO ENGAGE IN A PROCESS TO BUY APPROXIMATELY 1700 MEGAWATTS OF NATURAL GAS POWER PLANTS THAT EXISTED HERE IN THE STATE OF TEXAS.
AND I WANT TO UNPACK THAT A LITTLE BIT FOR THOSE LISTENING.
THE GENERATION PROFILE OF THE POWER PLANTS THAT WE BOUGHT GENERALLY MATCH THE ENVIRONMENTAL PROFILE OF OUR PLAN. IN OTHER WORDS, WE HAD NATURAL GAS BUILD THAT WAS IN OUR EXISTING PLAN FROM JANUARY OF '23.
BUT THIS PURCHASE CAME WITH SEVERAL KEY STRATEGIC ADVANTAGES, AND I'LL LIST A FEW OF THEM. THE FIRST ONE, WHICH IS OBVIOUS FROM THAT PAGE, IS IT COSTS ABOUT HALF AS MUCH AS WE HAD EXPECTED IN OUR PLAN FOR THE YEAR EQUIVALENT MEGAWATTS. SO YOU CAN SEE WE ANTICIPATED 1.8 BILLION FOR THE SAME MEGAWATTS. THAT WAS TWO YEARS AGO. THAT WOULD PROBABLY BE HIGHER AS WE STARTED EXECUTING THE BUILD. THAT WAS SIGNIFICANT FOR OUR COMMUNITY. SECONDLY WE NOW HAVE ADDITIONAL MEGAWATTS THAT WE CAN SELL IN THE NEAR TERM INTO THE BROADER ERCOT AND TEXAS MARKET UNTIL WE OF COURSE GROW INTO IT HERE LOCALLY. SO THAT'S REALLY ENABLED SIGNIFICANT WHOLESALE REVENUES FROM THE STATE TO COME INTO OUR COMMUNITY AND THAT OBVIOUSLY BENEFITS OUR CUSTOMERS HERE LOCALLY. THIRDLY, WE'VE TAKEN THE SUPPLY CHAIN RISK, THE INFLATION RISK, THE CONSTRUCTION RISK OFF THE TABLE WITH THIS PURCHASE. AND MOST INTERESTINGLY AND I THINK SERIN DIP THUSLY, THE LIFE FOR MOST OF THIS FLEET IS APPROXIMATELY 2050, SO THAT HELPS US GET A REALLY
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GOOD JUMPSTART ON OUR CAP GOALS AND WHEN WE GET TO 2050 WE'LL BE ABLE TO TRANSITION FROM THESE PLANTS INTO WHATEVER THE NEWER TECHNOLOGIES ARE AT THAT TIME. SO THAT'S THE FIRST PART THERE.IN TERMS OF EXECUTING ON THE REST OF OUR PLAN, AS YOU CAN SEE ON THE SLIDE HERE, THE SOLAR AND WIND PORTIONS OF THE PLAN WE'VE BEEN EXECUTING ON ARE SEEING COSTS COME IN BETTER THAN PLAN BY ABOUT EIGHT PERCENT, SO IT'S MORE MODEST THAN WHAT WE WERE SEEING FROM THE NATURAL GAS PROFILE ASSETS, BUT NONETHELESS THE COMBINATION OF EVERYTHING WE'VE EXECUTED ON OVER THE LAST TWO YEARS HAS REALLY BEEN AN IMPROVEMENT TO PLAN AND THAT'S THE MAIN POINT. WE PUT THIS PLAN OUT HERE AND OUR GOAL FROM AN EXECUTION STANDPOINT IS TO SEE WHERE WE CAN PIVOT OR JUST IMPROVE UPON THAT PLAN. SO AS PART OF CONTINUING THAT EXECUTION ON A GO-FORWARD BASIS, SOME OTHER NOTEWORTHY STATUS UPDATES, WE HAD A TWO PERCENT ADDITIONAL PURCHASE OF OUR SOUTH TEXAS NUCLEAR PROJECT. WE HOPE TO CLOSE ON THAT THIS YEAR. AGAIN, THAT'S CARBON-FREE ASSET THAT WE'RE ADDING TO OUR FLEET. WE HAVE COMMUNITY SOLAR AND MORE WIND ALSO IN CURRENT NEGOTIATIONS. AS WE EMBARK ON THIS YEAR AND THE BUDGET THAT I'LL SPEAK TO, THERE IS DOLLARS SPENT FOR BEGINNING TO PROCURE FOR OUR CONVERSION OF SPRUCE 2 COAL PLANT TO NATURAL GAS AND BEGINNING -- PROCURING PARTS AND EQUIPMENT FOR THE BUILDING OF THE ADDITIONAL NATURAL GAS PEAKERS THAT WE HAD IN OUR ADDITIONAL PLAN FOR OUR COMMUNITY. WE'RE ALSO ON TRACK WITH OUR UNIT RETIREMENTS. OBVIOUSLY THERE'S BEEN SOME HEADLINE WITH THE BRAUNING UNITS WE WANT TO MAKE OFFLINE. BUT IF ERCOT WANTS US TO RUN ANY OF THOSE ASSETS THAT WOULD BE BORNE BY THE COST OF ERCOT, NOT OUR LOCAL CUSTOMERS, SO WE ARE PROTECTED THERE. IN TERMS OF ACHIEVING OUR CAP GOALS, THIS PLAN HAS ALWAYS BEEN A LUNCHING OFF POINT.
WE'RE CURRENTLY POSITIONED TO ACHIEVE THE 2030 GOALS AND REALLY CLOSE TO 2040 GOALS AS YOU CAN SEE FROM THIS CHART. HOWEVER, IT WAS ORIGINALLY CONTEMPLATED AND IT STILL REMAINS TRUE THAT TO GET OVER THE FINAL GOAL IN 2050, THERE'S GOING TO BE NEW TECHNOLOGY ADVANCEMENTS NECESSARY THAT NEED TO TAKE SHAPE AND BECOME COMMERCIALLY VIABLE TO KIND OF PUSH US OVER THE EDGE THERE. IN ANY CASE, THIS IS THE ILLUSTRATION WE DEMONSTRATE IN TERMS OF OUR PROGRESS RELATIVE TO THAT GOAL. SO GIVEN THAT GREAT PROGRESS SO FAR, THERE ARE MANY VARIABLES AND INJECTS THAT CAN OCCUR TO MOVE THE NEEDLE IN EITHER DIRECTION. SOME OF THE HEADWINDS THAT YOU SEE ON THE SLIDE HERE INCLUDE THE SPEED OF LOW GROWTH. IT CONTINUES TO BE A FACTOR THAT HAS AN ELEMENT OF UNCERTAINTY AND WE ARE WORKING THROUGH THAT.
SUPPLY CHAIN CONTINUES TO BE AN ELEMENT OF RISK. TRANSMISSION CONSTRAINT BOTH ON JUST THE FLOW OF POWER AND TO THE EXTENT THAT WE ARE TRANSMISSION POWER, THE CONSTRUCTION THAT WE MAY HAVE TO DO IN GETTING SOME OF THESE PROJECTS DONE SOONER THAN LATER. OBVIOUSLY REGULATORY UNCERTAINTY IS A BIG ONE AND WE CAN LEAVE IT AT THAT. AS I MENTIONED EARLIER, THE PACE OF TECHNOLOGY ADVANCING AND BECOMING COMMERCIALLY VIABLE IS A HEADWIND AND WE WILL NEED TO SEE MORE PROGRESS IN SOME OF THOSE TECHNOLOGIES. GIVEN THAT, THAT WE STILL HAVE A LOT GOING FOR US, THE ACQUISITION OF GENERATING ASSETS WAS HUGE AS I MENTIONED FOR US. THE FACT THAT WE GOOD HAVE A COMMUNITY LED IN PROCESS FOR THIS GENERATION PLAN IS SOMETHING THAT WE CAN STAND BEHIND AND BE PROUD OF.
AND OUR LEADERSHIP TEAM AND MANAGEMENT TEAM HAS BEEN FORMING INDUSTRY PARTNERSHIPS THROUGHOUT THE ORGANIZATION AND THAT'S VERY HELPFUL IN TERMS OF UNDERSTANDING WHAT NEW TECHNOLOGIES ARE OUT THERE, FORMING PILOTS TO THE EXTENT WE WANT TO TEST THINGS OUT. AND ACCESS TO THE CAPITAL MARKETS, IE BEING ABLE TO BORROW MONEY, IS A HUGE TAILWIND FOR US AND ALLOWS US TO BORROW THE DOLLARS WHEN YOU ADD AFFORDABLE COSTS. AND THIS COUNCIL HAS PROVEN OVER THE LAST THREE CAREERS THAT TO THE EXTENT THAT THE COUNCIL IS NEEDED WE'LL GO THROUGH THE PROCESS WE NEED, BUT PROVIDING THAT FINANCIAL SUPPORT TO EXECUTE ON THIS PLAN HAS BEEN EXECUTED ON. AND THE LAST PART AROUND TRANSACTION AGILITY, THIS IS A NEW MUSCLE, BUT THIS IS HOW WE WERE ABLE TO ACQUIRE THE ASSETS THAT WE DID AND NOW THAT WE HAVE THAT STILL AND TEAM THAT CAN PIVOT AND DO DUE DILIGENCE WHERE NECESSARY, THIS IS A BENEFIT BECAUSE WE WOULD ONLY DO THIS IF IT BENEFITS AND IMPROVES UPON THE PLAN THAT WE'VE LAID U FOR OUR CUSTOMERS.
SO AS WE CONTINUE TO LOOK AHEAD, I CAN'T STRESS ENOUGH HOW WE CONTINUE TO LOOK FOR OPPORTUNITIES TO IMPROVE NOT JUST ON THE TYPE OF GENERATION, BUT A CHIEF SAVINGS PLAN AND TO THE EXTENT THAT WE CAN IMPROVE ON THE CAP GOALS, WE WILL.
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MY LAST POINT AROUND BENCHMARKING SUCCESS TO THIS COMMUNITY LED BOARD APPROVED PLAN IS IT REALLY SHOULD BE MEASURED AGAINST THE FORECAST THAT WE HAVE LAID OUT IN 2023. AND SO AS I WRAP UP THIS CONVERSATION TO THE EXTENT THAT ANY OF THESE HEADWINDS NECESSITY A CHANGE AND TO THE EXTENT ANY OF OUR REVISED FORECAST THAT WE DO ON AN ANNUAL BASIS REQUIRE US TO MAKE ANY CHANGES TO THIS PLAN, WE'LL COMMUNICATE WITH OUR BOARD OF TRUSTEES, WE'LL COMMUNICATE WITH THE COMMUNITY AND COUNCIL AND SUCH, BUT AT THE END OF THE DAY WE'VE MADE SIGNIFICANT PROGRESS TO THIS GENERATION PLAN AND EXCEEDED OUR MEGAWATT TARGET TO DATE AND WE'VE EXCEEDED THE EXPECTED FINANCIAL OUTCOMES FROM THE PLAN AND WE SIGNIFICANTLY MITIGATED OUR CONSTRUCTION RISK AND SUPPLY RISK AND INFLATION RISK THUS FAR.SO I WILL PAUSE THERE AS I SWITCH OVER TO THE BUDGET REVIEW, AND CHAIR, IF YOU'RE ALL RIGHT, I CAN KEEP ROLLING INTO THE NEXT SLIDES.
ALL RIGHT. SO THAT SERVES AS A SEGUE TO THIS DISCUSSION AROUND OUR ANNUAL BUDGET. AS I MENTIONED, IT WAS APPROVED BY OUR BOARD OF TRUSTEES AT THE JANUARY BOARD MEETING. IT INCLUDED AS A SUBSET OF THIS BUDGET IS ALL THE WORK ON THE GENERATION PLAN THAT I JUST SPOKE ABOUT.
AS WE GET INTO IT, SOME OF THE BROADER THEMES OTHER THAN GENERATION THAT ARE IN OUR BUDGET INCLUDE TRANSITION, THAT'S A SIGNIFICANT HEADLINE TOPIC AND IT'S A SIGNIFICANT AREA OF WORK THAT WE ARE PUTTING IN OUR BUDGET.
AS I MENTIONED BEFORE THAT TRANSMISSION SPEND AND RATE RECOVERY IS COVERED BY THE PUC, NOT LOCAL, BUT NONETHELESS IT'S IN THE NUMBERS AND YOU WILL SEE IT THERE. DISTRIBUTION, THE ONGOING INVESTMENT INTO OUR LOCAL ELECTRIC AND GAS SYSTEMS CONTINUES. SO THIS IS JUST THE HARDENING OF OUR SYSTEM, THE INVESTMENT INTO THE ASSETS THERE, AND OF COURSE TECHNOLOGY. WE'VE SPOKEN AT LENGTH ABOUT THE EFFORT WE'VE BEEN PUTTING IN TO GET OUR NEW ENTERPRISE RESOURCE SYSTEM IN PLACE AND THE COMPLEXITY INVOLVED IN THAT IS SIGNIFICANT, WHICH IS WHY IT'S A MULTI-YEAR EFFORT AND MULTI-MILLION, $100 MILLION PLUS INVESTMENT. SO IF WE GET INTO THE ACTUAL NUMBERS, THIS IS A SLIDE THAT WE USE WITH OUR BOARD. THIS IS A SIMILAR TEMPLATE WE'VE USED IN YEARS PAST TO TALK TO THE COUNCIL AS WELL. OUR CAPITAL BUDGET THAT WE'RE LOOKING TO EXECUTE ON IS 1.5 BILLION. IT'S A BIG NUMBER, BUT WE'RE DOING BIG THINGS. THE LARGE PORTION OF OUR SPEND, OVER 40% IS AROUND THE INVESTMENT IN OUR INFRASTRUCTURE. AND THESE ARE THINGS THAT TOUCH YOUR CUSTOMERS AND IMPROVE RELIABILITY. I MENTIONED TRANSMISSION.
A SUBSET OF THAT 638 MILLION, ALMOST 3 HUN MILLION OF THAT IS TRANSMISSION. SO WHILE IT'S INCLUDED IN THIS NUMBER IT'S RECOVERED THROUGH A DIFFERENT SET OF RATES. BUT THINGS YOU CAN TALK TO YOUR CUSTOMERS ABOUT. THIS IS INVESTMENT IN CABLE REHABILITATION, NEW FEEDER DISCUSS, RECLOSERS FOR CIRCUIT RELIABLE, POLE REPLACEMENTS, REPLACING STEEL GAS LINES WITH PLASTIC UNDERGROUND. THESE ARE ALL THINGS WE ARE INVESTING IN TO ENSURE RELIABILITY AND RESILIENCY AND THAT'S WHY IT'S A LARGE BUCKET. OBVIOUSLY CUSTOMER GROWTH CONTINUES IN OUR COMMUNITY.
WHILE THIS IS AN EXPENSE, THESE ARE NEW CUSTOMERS THAT ARE ADDED TO OUR SYSTEM.
SO THERE'S REVENUE ON THE OTHER SIDE OF CONNECTING THESE CUSTOMERS.
WE SPOKE ABOUT THE GENERATION PLAN AT LENGTH. THAT 368 MILLION AS A SUBSET IS IN PART NEARLY HALF OF THAT EXECUTING TOWARDS OUR GENERATION PLAN, WHETHER IT BE THE CONVERSION OF SPRUCE 2 TO NATURAL GAS BEGINNING OR THE INVESTMENT IN SOME OF OUR NEW PEAKER PLANTS THAT WE ANTICIPATE PROCURING AND BUILDING.
AND THE REMAINDER OF THOSE DOLLARS IS REALLY JUST IN THE INVESTMENT OF MAINTAINING THOSE ASSETS THAT WE DO FOR THE DURATION OF THEIR REMAINING LIFE.
AND OBVIOUSLY WE HAVE THE SMALLER COMPONENTS OF OUR CAPITAL BUDGET, BUT WITHIN THAT 136 MILLION, NEARLY 70 MILLION OF A THAT IS FOR THE ENTERPRISE RESOURCE SYSTEM THAT WE'VE TALKED ABOUT GOING TOWARDS THAT. THE REMAINDER INCLUDES JUST CONTINUED INVESTMENT INTO OUR I.T. INFRASTRUCTURE, FIBER, UNDERGROUND AND SECURITY RELATED TO THOSE I.T. INVESTMENTS. SO THERE'S A LOT THERE IN OUR CAPITAL BUDGET THAT WE COULD GO ON AND ON ABOUT, BUT IT'S CONSISTENT WITH THE THEMES THAT WE'VE DISCUSSED OVER THE LAST THREE OR FOUR YEARS WITH OUR BOARD AND OUR COUNCIL. SO THAT'S OUR CAPITAL BUDGET THAT OUR BOARD APPROVED.
AND THEN ON THE O&M SIDE YOU HAVE NEARLY HALF OF OUR O&M IS LABOR, 46%.
THAT'S PRETTY CONSISTENT WITH HISTORICAL NORMS, SO LARGE NUMBER, BUT CONSISTENT WITH WHAT YOU'D EXPECT AS A PERCENTAGE SPLIT. THE REMAINING
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AUDIO], SIMILAR CATEGORIES, WE HAVE INVESTMENT INTO THE GENERATION FLEET ON THE O&M SIDE OF IT. A LITTLE LESS THAN HALF OF THAT IS ACTUALLY ATTRIBUTABLE TO STP DOWN IN BAY CITY, AND THE REMAINING INVESTMENT OF O&M IS HERE FOR OUR LOCAL PLANTS. AGAIN SAME THINGS WITHIN TECHNOLOGY AND SECURITY, AN ELEMENT OF THAT IS GOING TOWARDS THE INVESTMENT, BUT I WOULD SAY ABOUT 40% OF THAT IS ALSO GOING TOWARDS JUST KIND OF MAINTENANCE FEES OF ALL OF OUR INFORMATION THAT WE MIGRATE TO CLOUD. THAT IS A NEW PART OF OUR BUSINESS AND IT IS AN ONGOING EXPENSE. BUT NONETHELESS THERE ARE SIGNIFICANT POSITIVE REASONS WHY YOU WOULD WANT TO DO THAT.AND THEN OBVIOUSLY ROUNDING OUT THE INVESTMENT IN RELIABILITY FOR THE ELECTRIC AND GAS SYSTEM. THAT'S ONLY EIGHT PERCENT BUT THESE ARE THE THINGS YOU HEAR US TALK ABOUT THAT ARE MEANINGFUL. VEGETATION MANAGEMENT IS WITHIN THIS BUCKET HERE. THE MAINTENANCE FOR OUR GAS INFRASTRUCTURES WHEN WE DO LOCATE, REDO LEAK SURVEYS, LEAK REPAIR. ALL THAT EXPENSE IS WITHIN THE BUCKET OF RELIABILITY ON THE O&M SIDE. SO THERE'S A LOT THERE, A LOT OF NUMBERS. I WILL PIVOT AND LEAVE THAT AND KIND OF HIGHLIGHT OUR FINANCING PLAN. AND THAT'S RELEVANT BECAUSE THIS UNDERPINS AND SUPPORTS THE BUDGET THAT WE APPROVED. AND YOU'RE GOING TO SEE THE FINANCING PLAN THURSDAY AT THE FULL COUNCIL FOR APPROVAL, IT WILL BE ON THE CONSENT AGENDA, AND IT IS FOR THE MOST PART ROUTINE TRANSACTIONS, BUT I'LL MAKE A FEW POINTS ABOUT OUR FINANCING PLAN THAT ARE GENERALLY TRUE. IT'S GOT THREE MAIN GOALS.
THE FIRST ONE IS TO SUPPORT THE CAPITAL PLAN AND THE REGULAR OPERATIONS, WHICH YOU'VE JUST SEEN ME TALK ABOUT. AND THAT'S KIND OF LINE ITEM 1 THERE, SUPPORTING OUR CAPITAL PLAN OF 1.5 BILLION. THE SECOND GOAL IS REALLY TO ENABLE FISCAL FLEXIBILITY AND THAT REALLY IS TO ALLOW US TO BE NIMBLE, TO GO AFTER ANY OPPORTUNITIES LIKE WE JUST DID WITH OUR CORPUS CHRISTI AND LAREDO ASSETS.
PAPER AND INCREASES OUR CAPACITY BY AN ADDITIONAL 250 MILLION.
THEN THE LAST GOAL OF THE FINANCING PLAN IS TO SAVE MONEY THROUGH REFINANCING, REFUNDINGS OR OTHER SIMILAR TOOLS, SO THREE BILLION AT THE BOTTOM SECTION THERE'S A LARGE NUMBER AND IT LOOKS LIKE A LARGE AMOUNT THAT WE'RE LOOKING FOR APPROVAL ON. THESE REALLY AN AMOUNT THAT WE'RE LOOKING TO ACHIEVE SAVINGS ON. IT'S NOT NEW DEBT BEING ADDED TO OUR PORTFOLIO.
SUE THAT'S A BRIEF SUMMARY OF WHAT WE'RE BRINGING TO THE COUNCIL ON THURSDAY.
I THINK THE LAST POINT I'D MAKE ABOUT THIS FINANCING PLAN IS AS YOU SEE THESE NUMBERS THESE ARE ALL BAKED INTO THIS VERY LAST SLIDE THAT I HAVE IN TERMS OF OUR FINANCIAL METRICS. ONE THING I'LL MENTION IS IN OUR LAST FISCAL YEAR INSTEAD OF SETTING A STATIC TARGET, FINANCIAL TARGET, WE INSTEAD MOVED TO A PHILOSOPHY TO TARGET A RANGE WITHIN EACH FINANCIAL METRIC THAT WE STILL BELIEVE WILL MAINTAIN OUR CURRENT CREDIT STANDING AND THUS NOT IMPACT THE INTEREST RATES WE HAVE TO BORROW AT. SO THE WEIGHTED AGGREGATION OF THE ITEMS ON THIS PAGE MAKE UP WHAT WE CALL A FINANCIAL RESILIENCY SCORE WHICH YOU SEE NOTED ON THIS SLIDE AND THAT WE REPORT OUT ON TO OUR BOARD OF TRUSTEES ON A QUARTERLY BASIS.
THIS PHILOSOPHY ALLOWS US TO HAVE THAT TRANSACTIONAL AGILITY THAT I SPOKE ABOUT EARLIER. IT DOESN'T COMMIT YOU TO A STATIC NUMBER.
IF YOU NEED A FLEX ON ONE TO MOVE THE NEEDLE OPERATIONALLY YOU CAN IF YOU HOLD THE OTHERS IN PLACE. THAT'S REALLY THE GOAL OF HAVING THAT FLEXIBILITY AND SETTING RANGES. EVERYTHING THAT I'VE SPOKEN TO YOU ABOUT, OUR OVERALL FINANCIAL POSITION ULTIMATELY FALLS WITHIN THESE METRICS AND I THINK THAT'S KIND OF THE MAIN POINT I WANTED TO ADDRESS. AS YOU LOOK AT IT, ADJUSTED THAT SERVICE COVERAGE RATIO, OUR METRICS ARE ANTICIPATED TO STAY WITHIN THOSE RANGES ALL THE WAY DOWN THE LIST. I THINK WHAT'S ALSO IMPORTANT IS TO LOOK AT THE R AND R FUND ADDITIONS AT THE BOTTOM. THEY CONTINUE TO BE HIGH AND I THINK THAT'S A REFLECTION OF THE STRONG REVENUE WE ANTICIPATE NOT JUST FROM THE ORGANIC GROWTH THAT WE SEE IN OUR COMMUNITY, BUT FROM THE WHOLESALE REVENUE GROWTH THAT WE'RE SEEING, AND THOSE ARE DOLLARS THAT GET REINVESTED INTO OUR CAPITAL PLAN. SO AT THE END OF THE DAY I'LL WRAP UP WITH WE'RE DOING WELL, WE APPRECIATE THE SUPPORT FROM CONTINUES TO EXECUTE ON THE GENERATION PLAN AND IT SUPPORTS ALL THE INFRASTRUCTURE INVESTMENT THAT WE'VE DISCUSSED, IT
[00:30:03]
SUPPORTS THE ERP AND THE TECHNOLOGY INVESTMENTS AND IT ACCOMPLISHES IN A MANNER CONSISTENT WITH OUR GOALS. SO I HAVE TALKED ENOUGH, MY MOUTH IS GETTING DRY, SO I'LL TURN IT OVER TO YOU, CHAIR, IF YOU HAVE QUESTIONS.>> GARCIA: THANK YOU, CORRIE. AND BEFORE WE GO ON TO QUESTIONS, IF MY COLLEAGUES ARE OKAY WITH IT, ONE OF OUR COLLEAGUES WANTED TO GIVE PUBLIC COMMENT ON THE ITEM NUMBER 4 AND SHE'S HERE AND SHE NEEDS TO LEAVE SO IF Y'ALL ARE OKAY WITH IT, CAN WE HEAR FROM COUNCIL MEMBER GAVITO.
COME ON UP. >> THANK YOU, CHAIR AND THANKS FOR ALLOWING ME IT TO GO REALLY QUICK. THIS IS ON THE ITEM ABOUT THE SAWS CCR.
I WANT TO PROVIDE BACKGROUND ON WHY I BROUGHT THIS FORWARD.
COUNCILMAN MCKEE-RODRIGUEZ AND I ARE FOCUSED THAT ENSURING THAT SAN ANTONIO RESIDENTS ARE NOT CAUGHT FROM SAWS FOR PAYMENTS FOR NEGLIGENT LANDOWNERS THAT ARE RESPONSIBLE FOR THE DELINQUENCIES. LAST SUMMER MANY SAN ANTONIANS ANWERE WITHOUT WATER DUE TO LANDLORDS NOT PAYING BILLS.
HOWEVER THE TENANTS HAD FULFILLED THEIR OBLIGATIONS AND PAID THEIR BILLS.
OUR PROPOSITION IS STRAIGHTFORWARD, THE LANDLORDS MUST BE REQUIRED TO PAY THEIR UTILITY BILLS. THIS IS NOT CONTROVERSIAL. AND WE'RE NOT REFERRING TO SITUATIONS THAT WERE DUE TO COVID. WE'VE ALREADY SEEN CASES SUCH AS WITH PEE CO-UNION FOR RENT STATEMENTS THAT WERE MISUSED FOR EXPENSES UNRELATED TO TENANT SERVICES. TO PRESENT TENANTS FROM BEARING THE CONSEQUENCES OF THESE DELINQUENCIES, WE PROPOSE PENALTIES FOR LANDLORDS WHO CONSISTENTLY AND REPEATEDLY FAIL TO PAY THEIR SAWS BILLS.
COUNCILMAN MCKEE-RODRIGUEZ AND CHAIR ROCHA GARCIA AND I ALSO BELIEVE THAT IMPROVING COMMUNICATION WITH TENANTS IS ESSENTIAL SO THEY'RE INFORMED WHEN THESE ISSUES ARISE AND IT IS SOLELY THE RESPONSIBILITY OF SAWS. SO I APPRECIATE MY COLLEAGUES' ATTENTION TO THIS MANNER AND I LOOK FORWARD TO WORKING TO ENSURE A FAIR AND EFFECTIVE APPROACH. THANKS SO MUCH.
>> GARCIA: THANK YOU, COUNCILWOMAN AND THANK YOU TO MY COLLEAGUES FOR ALLOWING HER TO SPEAK UP. CORRIE, YOU CAN COME BACK UP.
THANK YOU FOR THE PRESENTATION. I'LL START OFF WITH SOME QUICK COMMENTS. I'M GLAD THAT WE'RE MOVING FORWARD WITH OUR COMMUNITY GOALS AND INCLUDING SOLAR AND WIND AND THE STORAGE AND EVERYTHING THAT WE'RE DOING.
I HAVE A QUESTION ON SLIDE 3. WE HAVE THE PROJECTED POTENTIAL SUPPLY SHORTFALL. AND SO IF YOU COULD HELP ME, OUT WILL THIS IMPACT THE DEMAND IN YOUR OPINION? I SEE THE DIFFERENCES IN THE GENERATIONAL -- IN THE GENERATION PLAN, BUT WILL IT AFFECT IT EVEN MORE? WHAT IS YOUR OPINION ON IT?
>> I'LL GIVE A QUICK TWO CENTS AND THEN TURN IT OVER TO BENNY.
THE MAIN TAKEAWAY ON THIS SLIDE IS THIS IS A REFLECTION OF THE STATE POTENTIALLY BEING SHORT. WITHIN SAN ANTONIO I THINK WE ARE WELL POSITIONED, HOWEVER AS WE'VE TALKED ABOUT TO THE EXTENT THE STATE DOES HAVE A SHORTFALL, THERE COULD BE IMPACTS TO ALL CITIES, NOT JUST SAN ANTONIO.
BUT IN TERMS OF -- IS MAN ANY BEHIND ME. I'LL LET HIM TALK.
>> THANK YOU AND GOOD MORNING. I GUESS WHAT I WOULD SAY IS ERCOT HAS ADJUSTED THE WAY THEY PREPARE THEIR CDR PROGRAM AND THEY'RE LOOKING AT NOT ONLY THOSE THINGS THAT THEY KNOW ARE GOING TO OCCUR, BUT THAT ARE LIKELY TO OCCUR. WE'VE GOT A SIGNIFICANT INCREASE IN LARGE LOAD CUSTOMERS, THE DATA CENTERS, AI, YOU ALL HEARD ABOUT THAT.
I KNOW YOU'RE FAMILIAR WITH IT. SO THERE'S MORE OF THAT INVOLVED. SO THIS IS A DEFINITE MAYBE AND THAT'S WHY WE STARTED MOVING A NUMBER OF YEARS AGO TO GET OUR PROGRAM IN PLACE WITH YOU ALL.
REED WILLIAMS LED THE PROGRAM. WE HAVE A GOOD PLAN IN PLACE TO DO EVERYTHING WE CAN, AND IN FACT, I BELIEVE YOU KNOW THAT WE JUST EXECUTED A RELIABILITY MUST RUN AGREEMENT WITH ERCOT. SO WE'VE DUPONT ABOVE AND BEYOND I BELIEVE TO PROTECT OURSELVES, OUR CUSTOMERS FROM THE POTENTIAL OF THIS
OCCURRING, BUT IT'S A POTENTIAL. >> GOT IT.
OKAY. THANK YOU. CORRIE, CAN YOU ELABORATE
MORE ON THE DISPATCHABLE RESOURCES? >> SO MANY OF THESE ARE GENERATION. ARE YOU TALKING ABOUT THIS SLIDE?
>> WE'VE CONTINUED TO ADD SOLAR, WIND AND STORAGE AS NOTED THERE.
STORAGE IS DISPATCHABLE TO THE EXTENT THAT IT IS CHARGED WHEN WE NEED IT.
NATURAL GAS IS TRULY DISPATCHABLE, SO WE'VE CONTINUED TO ADD THERE.
AS CORY INDICATED, WE SAW AN OPPORTUNITY TO PURCHASE ASSETS AT A SIGNIFICANTLY REDUCED COST, AND SO WE MOVED ON THAT. IT GAVE US A LOT OF
[00:35:02]
ADDITIONAL ENERGY FASTER THAN WE ANTICIPATED, AND IT'S ALSO ALLOWED US TO PRODUCE ADDITIONAL WHOLESALE REVENUE TO SERVE THE COMMUNITY.>> GARCIA: AND I APPRECIATE THAT YOU ALL MOVED SO QUICKLY ON THAT AND I -- I THINK THAT IT ALIGNS DEFINITELY WITH OUR CLIMATE ADAPTATION PLAN AND SO THAT WAS VERY HELPFUL. I ALSO APPRECIATE THAT YOU ALL WERE ALREADY THINKING ABOUT THE 65 EMPLOYEES AND THAT EVENTUALLY THEY COULD IF THEY WANTED TO APPLY AND BECOME CPS EMPLOYEES. SO THANK YOU FOR YOUR THOUGHTFULNESS ON THAT.
I FEEL LIKE WIND POWER IS SIGNIFICANTLY BEHIND ON OTHER SOURCES OF ENERGY, SO I THINK I UNDERSTAND THE CHALLENGES WITH WIND POWER, ESPECIALLY HERE, BUT HOW -- WHY ARE -- WHY WOULD YOU SEE OTHER THAN LIKE THE OBVIOUS HOW CAN WE SEE SOME
ADDITIONAL INCREASE IN THAT AREA? >> SO WE CURRENTLY HAVE A COUPLE OF CONTRACTS UNDER NEGOTIATION. WE'VE CONTINUED TO SEEK WIND THAT'S COMPLIMENTARY TO OUR NEEDS AS MUCH AS POSSIBLE, SO THOSE ARE THE WIND FACILITIES WE'RE FOCUSED ON. WHILE WE COULD GO TO THE MARKET AND JUST GET WIND, WE'RE LOOKING FOR THOSE THAT DELIVER THE MOST VALUE, THAT IS TO SAY GIVE US POWER IN THE TIMES WE REALLY NEED IT. SO WE'RE BEING A LITTLE MORE SELECTIVE THERE, BUT WE DO HAVE LINE OF SAYING ON ACCOMPLISHING THAT OBJECTIVE WELL WITHIN OUR TIME HORIZON. WE'RE IN YEAR THREE OF EIGHT YEARS.
>> GARCIA: THANK YOU SO MUCH. ON THE COMMUNITY SOLAR PROGRAM, THAT WAS A VERY POPULAR PROGRAM. WILL YOU ALL ROLL OUT A NEW
PROGRAM AND INVITE PEOPLE TO BE A PART OF IT? >> PLEASE.
PHONE A FRIEND SO THEY KNOW. >> ELENA BALL WITH CPS ENERGY.
YES, WE ACTUALLY ARE IN THE PROCESS OF EVALUATING AN RFP THAT WE ISSUED LAST YEAR FOR COMMUNITY SOLAR, SO IN THE UPCOMING WEEKS AND MONTHS YOU WILL SEE THE PROGRAM CONTINUE TO EXPAND, POTENTIALLY WITH SOME NEW OFFERINGS.
>> GARCIA: WONDERFUL. THANK YOU SO MUCH. THE NEXT ITEM THAT I WANT TO FOCUS ON IS THE TREE MAINTENANCE ALONG UTILITY LINES.
I ASK THIS BECAUSE IT CONTINUES TO BE A CONCERN FOR SOME RESIDENTS. IN FACT,IC WE CALLED YOUR OFFICE YESTERDAY ABOUT A RESIDENT THAT HAD THAT PROBLEM. WHAT CATEGORY OF FUNDING WILL WE SEE A LINE ITEM ON SPECIFICALLY FOR TREE MAINTENANCE ALONG THESE UTILITY LINES?
>> YES. SO VEGETATION MANAGEMENT IS A HUGE ISSUE FOR OUTAGES DURING STORMS AND ICING EVENTS. AND SO THE HEAVY FOCUS ON THAT AREA, SO WE HAVE RAMPED UP YEAR OVER YEAR WE'RE AT 23 MILLION IN THE BUDGET FOR TREE TRIMMING. THAT WILL GIVE US ABOUT 1,000 MILES OF TREE
TRIMMING, WHICH ON AN 8,000-MILE SYSTEM. >> GARCIA: OKAY.
GOT IT. THANK YOU SO MUCH. AND HOW DID WE DO LAST YEAR VERSUS THE YEAR BEFORE? SPECIFICALLY ON SELLING ENERGY TO OTHER MARKETS? I WAS TRYING TO TIE IT TO MY OTHER QUESTION ABOUT HOW DO WE SEE THE CHANGES, LIKE EVEN WITH OUR -- WITH US HAVING TO SELL TO OTHER MARKET.
SO TELL ME HOW THE YEAR OVER YEAR, I GUESS, '23-'24. >> GOOD QUESTION.
THIS PAST YEAR WE'RE GOING TO COME IN CLOSE TO 240 MILLION OVER OUR PLAN, 250 OVER OUR PLAN, GIVE OUR TAKE, WHICH WAS SIMILAR TO LAST YEAR, BUT THIS WAS A FUNCTION OF US HAVING MORE LENGTH AND THERE WAS LESS PRICE SCARCITY IN THE MARKET THAN WE SAW IN THE YEAR PRIOR. THE YEAR PRIOR WE HAD SIMILAR KIND OF OVERSHOOTING OF OUR FORECASTS, BUT IT WAS A FUNCTION OF OUR FLEET PRIOR SO THAT CORPUS CHRISTI, LAREDO ASSETS, BUT THERE'S A LOT MORE PRICING OPPORTUNITIES THAT WE TOOK ADVANTAGE OF. SO WHILE THE NUMBERS ARE KIND OF SIMILAR YEAR OVER YEAR, HOW WE GOT THERE IS DIFFERENT, BUT WHAT HAS CHANGED ON A GO FORWARD BASIS IS IN THE YEARS PAST WE HAD ESTIMATED 40, $50 MILLION NET OF FUEL FROM THE WHOLESALE MARKETS. THAT'S RELATIVELY SMALL COMPARED TO THE THREE PLUS BILLIONS OF REVENUE. IN THE METRICS YOU SAW WE'RE EXPECTING 300 PLUS MILLION IN A GO FORWARD BASIS IN AT LEAST THE NEXT THREE TO FIVE YEARS GIVE OR TAKE AND THAT IS A FUNCTION OF US ACKNOWLEDGING THAT WE DO HAVE THE LENGTH AND A WE WANT TO BAKE THAT IN APPROPRIATELY.
SO WE'VE TAKEN STRATEGIES TO LOCK IN SOME OF THAT FUTURE REVENUE FROM A RISK MITIGATION PERSPECTIVE, BUT WE'LL STILL HAVE SOME LENGTH AS WELL JUST KIND OF IN THE SPOT MARKET TO TAKE ADVANTAGE OF ANY PRICING SPIKES SPECIFICALLY AROUND THE SUMMER TIMES IS TYPICALLY WHEN IT HAPPENS. SO TO THE EXTENT THAT WE'RE ABLE TO LOCK IN THE FUTURE REVENUES,IC THERE'S STILL PROBABLY UPSIDE TO THE EXTENT THERE'S STILL NEAR TERM SCARCITY WITHIN TEXAS THAT WHAT WE DO HAVE AVAILABLE CAN BE OPPORTUNISTIC, AND THAT'S ALL EXTRA FOR OUR LOCAL
OPPORTUNITY. >> GARCIA: GOT IT. THANK YOU.
I KNOW YOU ALL STRESSED A FEW TIMES THAT THE NEW COUNCIL MEMBER BUDGET POLICY WOULD NOT GUARANTEE A NOT HAVING A RATE INCREASE, BUT IS THERE A SLIDE OR ANY
[00:40:03]
ADDITIONAL INFORMATION ON HOW THAT NEW POLICY HAS RETURNED SOME MONEY TO CPS AND HOW IT'S AFFECTED YOUR BUDGET AND THE NEED TO PROPOSE A RATE INCREASE?>> YEAH. WE DON'T HAVE ANY NEW MATERIALS PER SE.
WHAT EXISTED BEFORE WAS THE MEMORANDUM OF UNDERSTANDING THAT OUTLINED IT AND THEN THE SLIDES THAT I SHARED I GUESS IT WAS BACK IN DECEMBER ON KIND OF WHAT WE ANTICIPATED WHERE WE WOULD SPEND. AND THOSE TWO ITEMS THAT WE HAD TALKED ABOUT BACK THEN WERE REPLACING OUR BOILER WITHIN OUR SPRUCE 2 COAL PLANT, DIDN'T ORIGINALLY HAVE THAT IN THE PLAN, BUT THAT IS OBVIOUSLY THE ASSET WE WANT TO CONVERT TO NATURAL GAS THAT WE'RE STARTING THIS YEAR, SO THAT SEEMED LIKE A REALLY GOOD KIND OF AND THEN WE TALKED ABOUT RECLOSERS AND KIND OF CONTINUING TO INVEST EVEN STRONGER IN THAT PARTICULAR TECHNOLOGY. BUT BROADLY SPEAKING THERE'S NOTHING NEW, BUT $26 MILLION I THINK I MENTIONED AT THE LAST MEETING, IT IS SIGNIFICANT. SO TO THE EXTENT THAT THESE METRICS REFLECT OUR SPEND THAT 26 IS BAKED IN THERE. WHAT I DIDN'T TELL YOU AND WHAT I TOLD THE BOARD WAS THAT BUDGET THAT WE HAVE FOR FISCAL '26 DOES NOT ANTICIPATE A RATE INCREASE, BUT WHAT WE SAID TO THE BOARD AND OUR COMMUNITY IS AS FAR AS FISCAL 27 GOES WE'LL WAIT UNTIL WE GET THROUGH OUR SUMMER MONTHS OF THIS YEAR LIKE WE HAVE IN THE SUMMERS PAST TO REFRESH OUR FORECAST TO SEE WHAT IT LOOKS LIKES AND OUR LOCAL PERFORMANCE. BUT THOSE ARE HUGE FACTORS IN BOTH THE TIMING AND THE AMOUNT OF WHAT THAT LOOKS LIKE. SO ANYWAYS, IT'S NOT A DIRECT ANSWER BECAUSE IT'S HARD TO BE DIRECT ABOUT A ONE-TIME INJECTION OF MONEY FOR DOLLARS IN PERPETUITY, BUT IT IS HELPFUL AND CAN HELP DAMPEN ANY IMPACT.
>> GARCIA: THANK YOU SO MUCH, CORY. I'LL QUESTIONS WITH QUESTIONS FROM MY COLLEAGUES. COUNCILMAN WHYTE?
>> WHYTE: THANK YOU, CHAIR. I'LL PICK UP WHERE YOU LEFT OFF BECAUSE YOU STOLE MY QUESTION, BUT WELL DONE THERE.
I WAS GOING TO ASK THE SAME THING. WE PUT THIS NEW POLICY INTO PLACE AND I WAS JUST MENTIONING TO BEN, ONE OF THE SPECIFIC STATED REASONS WAS TO OFFSET OR MITIGATE THE NEED FOR FUTURE RATE HIKES.
AND $26 MILLION IS A LOT OF MONEY AND WHO KNOWS WHAT IT WILL BE THIS YEAR.
SO I WOULD SAY THAT IT IS MORE IMPORTANT THAN EVER AT THIS POINT IN TIME FOR CPS TO MAKE SURE THAT THEY ARE BEING AS EFFICIENT AS POSSIBLE WITH OUR MONEY.
AND I KNOW YOU'LL SAY WE ARE. >> WE ARE AND WELL.
>> WHYTE: WE ARE AND WE WILL, BUT I JUST KNOW BECAUSE I CAN SEE A FUTURE CONVERSATION AROUND THIS TABLE OR WITH THE ENTIRE COUNCIL AND THE ECONOMY IS GOING TO BE -- THE QUESTION IS GOING TO BE WE'RE GIVING MILLIONS AND MILLIONS OF DOLLARS FROM OUR GENERAL FUND BACK TO CPS ENERGY AND NOW YOU GUYS ARE COMING AND ASKING FOR MORE MONEY IT FROM OUR CITIZENS. THAT'S HOW THE CONVERSATION'S GOING TO GO. SO MY HOPE IS THAT WE ARE BEING AS EFFICIENT AS POSSIBLE, WE ARE USING THIS MONEY THAT WE'RE GIVING BACK AS BEST WE CAN SO THAT WE DON'T NEED TO COME BACK AND AGAIN ASK FOR MORE MONEY FROM OUR CITIZENS BECAUSE I CAN'T TELL YOU -- THERE IS PROBABLY NOT A COMMUNITY MEETING THAT GOES BY IN MY DISTRICT WHEN I DON'T HEAR FROM RESIDENTS ABOUT, MAN, WE'RE BEING ASKED TO PAY MORE FOR THIS OR THAT OR WHATEVER IT MAY BE, AND SO I DON'T WANT TO SEE US PUT MORE BURDEN ON THE BACK OF OUR TAXPAYERS. SO I'LL LEAVE IT AT THAT.
JUST A COUPLE OF QUESTIONS. SOME OF THE BIGGEST CHALLENGES IN RETIRING THE
COAL AND THE GAS PLANTS, WHAT ARE WE SEEING THERE? >> I THINK THE BIGGEST CHALLENGE WITH OUR GAS PLANT WAS KIND OF THE CONVERSATION WE HAD WITH ERCOT, BUT I DON'T KNOW IF, BEN, YOU WANT TO SPEAK TO ANY OF THE TECHNICAL ELEMENTS OF IT AS
YOU SEE IN YOUR FORECAST. >> SO IN TERMS OF THE BIGGEST CHALLENGES WE'RE SEEING? HONESTLY, AS WE TAKE GENERATION OUT WE'VE GOT TO BRING GENERATION BACK. AND WE'RE SEEING SIGNIFICANT CHALLENGES IN THE PROCUREMENT SPACE BECAUSE OF LONG DELAYS AND GETTING MATERIALS, EQUIPMENT SUCH AS TRANSFORMERS, ELECTRICAL SWITCH GEAR AND SUCH. THERE'S A HUGE BUILDING BOONE IN THE ELECTRICAL INDUSTRY ACROSS THE COUNTRY AND THERE'S A LOT MORE DEMAND THAN THERE HAS BEEN PREVIOUSLY. SO NOW A TRANSFORMER FOR A LARGE PROJECT MAY TAKE FOUR TO FIVE YEARS TO OBTAIN. THE SAME WITH SWITCH GEAR.
SO THAT IS CAUSING US TO TAKE A LOOK AT THOSE RETIREMENTS AND SEE IF THERE'S ANYTHING WE SHOULD BE TALKING TO COMMUNITY ABOUT THERE.
BUT THE CHALLENGE FOR US IS GETTING ADDITIONAL GENERATION TO REPLACE THAT
[00:45:04]
THAT WILL BE LEAVING IN THE NEXT FEW YEARS. >> WHYTE: OKAY.
AND DO WE THINK BASED ON WHAT YOU'VE SEEN THUS FAR THAT WE'LL BE ABLE TO DO
THAT IN A TIMELINE THAT'S APPROPRIATE? >> I ABSOLUTELY KNOW WE WILL BE ABLE TO RETIRE THE GOAL UNITS AND REPAIR WITH GAS. WE'RE WORKING ON SPRUCE 2 NOW. IT'S ABSOLUTELY DOABLE AND IT'S IN FLIGHT.
IN TERMS OF THE SOMERS UNITS, FOR EXAMPLE, THAT'S A LITTLE OVER 1100 MEGAWATTS OF CAPACITY. WE NEED TO SEE THAT WE'VE GOT LINE OF SIGHT SO WE CAN MEET CUSTOMER DEMAND. SO IT MAY BE THAT ADDITIONAL INVESTMENT IS REQUIRED DO THAT, BUT IT WOULD BE AT A MUCH LOWER COST THAN WE HAD ORIGINALLY PLANNED.
SO THAT'S SOMETHING WE'RE GOING TO HAVE TO HAVE A CONVERSATION ABOUT IS AS WE GET CLOSER AND WE WORK THROUGH SOME ADDITIONAL ANALYSIS.
>> IF WE COULDN'T MEET THE CURRENT DEMAND WOULD WE SLOW DOWN ON RETIRING SOME OF
THESE PLANTS. >> BASICALLY THAT'S WHAT I'M SAYING.
IF WE CAN'T MEET THE NEEDS OF OUR COMMUNITY WITH OUR CURRENT PLAN WE'LL HAVE TO ADJUST THE PLAN AND WE'LL OF COURSE BRING YOU ALL INTO THE CONVERSATION.
>> WHYTE: OKAY. WHAT ABOUT LONG-TERM PLANS FOR CPS WITH NUCLEAR ENERGY.
WHAT ARE WE LOOKING AT THERE? >> DEFINITELY WE'RE BULLISH ON NUCLEAR ENERGY. WE SEE A LOT OF POTENTIAL IN THE FUTURE.
AS YOU KNOW -- HEIGHT WHITE WHAT'S THE FUTURE? SORRY TO INTERRUPT.
WHAT ARE WE TALKING ABOUT? >> MID 30S, I WOULD SUSPECT, BEFORE WE SEE LARGE SCALE REDEPLOYMENT BASED ON WHAT WE'RE SEEING TODAY. AS YOU KNOW WE HAVE A NEW PARTNER AT OUR STP PROJECT, CONSTELLATION ENERGY, THEY'RE A MAJOR PLAYER IN THE INDUSTRY. WE'VE PICKED UP A LITTLE BIT OF EXTRA CAPACITY OUT OF THAT SITE SERGEANT OF THIS. AND THEY'RE LOOKING FORWARD AROUND ADDING SMALL MODULAR NUCLEAR, I THINK YOU'VE HEARD ABOUT THAT, AND THERE'S THE MIGHT CO- REACTORS. WE'VE BEEN TO FACILITIES, WE'VE BEEN TO COMPANIES THAT DO BOTH OF THOSE. WE HAVE A TRIP COMING UP IN A COUPLE OF WEEKS TO ANOTHER ONE, SO WE ARE ABSOLUTELY ENGAGED WITH THOSE PEOPLE IN THE INDUSTRY AND WE'RE WORKING TOWARDS UNDERSTANDING THE OPPORTUNITIES WE HAVE.
OF COURSE YOU PROBABLY KNOW THAT JBSA IS ALSO HEADING THAT DIRECTION.
SO WE'RE SEEING A LOT OF OPPORTUNITY THERE, IT'S JUST NOT THERE YET.
>> WHYTE: OKAY. I'M GLAD WE'RE LOOKING AT THAT.
AND CHAIR, I DID WANT TO SAY THANK YOU TO YOU AND CORY AND RUDY AND EVERYBODY ON YOUR TEAM FOR OUR MEETING THE OTHER DAY WITH ALL OF US AND COUNCILMAN GO VOTE TOW,
I THINK THAT WAS PRODUCTIVE. THAT'S IT. >> GARCIA: THANK YOU,
COUNCILMAN. COUNCILMAN COURAGE? >> COURAGE: THANK YOU, CHAIR. I THINK YOU'VE ANSWERED TO A CERTAIN EXTENT SOME OF THE QUESTIONS I WAS THINKING ABOUT. I APPRECIATE THE QUESTIONS THE OTHER COMMITTEE MEMBERS HAVE ASKED. I GUESS I WANT TO START WITH AN OBSERVATION. WE'VE ADDED A LOT OF EXTRA CAPACITY WITH WHAT WE PURCHASED LAST YEAR OR THE YEAR BEFORE. AND I THINK THAT'S VERY VALUABLE. I THINK THAT IS CONTRIBUTED TO THE FUNDING THAT HAS COME IN OVER AND ABOVE THE EXPECTATIONS THAT WE MAY HAVE HAD OVER THE LAST COUPLE OF YEARS, BUT A LOT OF THAT CAPACITY IS STILL JUST NEW FOSSIL FUEL-BASED ENERGY. AND FOSSIL FUEL-BASED ENERGY STILL PRODUCES POLLUTION AND WHEN WE TALK ABOUT NATURAL GAS THERE'S BEEN A LOT OF COST VARIABLES OVER THE YEARS. WE THINK ABOUT WHAT WE HAD TO PAY WHEN WE HAD THE FREEZE, BUT WE CAN LOOK AT SOMETIMES WHEN THE PRICE HAS FALLEN SO LOW THAT SOME OF THE PRODUCERS ARE WONDERING SHOULD WE CONTINUE TO PRODUCE AND WOULD THAT THEN AGAIN CAUSE PROBLEMS. SO I APPRECIATE WHAT YOU JUST TALKED ABOUT, WHAT WAS JUST SPOKEN ABOUT, LOOKING AT THE SMALL MURAL NUCLEAR OR THE MICROREACTERS.
I'M GLAD TO HEAR THAT WE'RE EXPLORING THOSE, BUT I'M WONDERING WHAT OTHER TYPES OF FUTURE DEVELOPMENT ARE WE LOOKING AT? WHAT ARE OTHER ALTERNATIVES?
AND MAYBE SOMEBODY CAN TELL US WHAT'S BEING LOOKED AT. >> THOSE ARE THE MAIN TWO.
BENNY SPOKE ABOUT IT AT OUR BOARD MEETING YESTERDAY, AND GEO THERMAL IS ANOTHER ONE OUT THERE, BUT NONE OF THESE ARE REALLY COMMERCIALLY VIABLE RIGHT NOW, SO THAT'S WHY YOU KEEP GETTING THE SAME ANSWER. THE PLAN IS THE PLAN THAT WE HAVE WITH THE TECHNOLOGY THAT WE KNOW. AND THE CAP GOALS WE SHOWED EARLIER ARE WHAT WE THINK WE CAN ACHIEVE WITH THE TECHNOLOGY WE KNOW.
AND SO NONE OF THE ASSETS THAT WE'VE BOUGHT ARE NECESSARILY EXTRA.
THEY'RE STILL FITTING WITHIN THE CONFINES OF THIS PLAN. SO I DON'T KNOW IF ELENA OR BENNY HAVE ANY OTHER KIND OF OPINION ON FUTURE TECHNOLOGIES.
>> THANK YOU FOR THE QUESTION. THERE ARE A NUMBER OF TECHNOLOGIES THAT ARE LOW OR ZERO CARBON EMITTING THAT WE ARE LOOKING AT.
[00:50:01]
AS CORY MENTIONED, MANY OF THE TECHNOLOGIES HAVE NOT YET REALLY BEEN ABLE TO COMPETE WITH TRADITIONAL TECHNOLOGIES. YOU KNOW, TRADITIONAL NUCLEAR POWER IS CERTAINLY ONE OF THE AREAS. WE'RE ALSO VISITING WITH DIFFERENT COMPANIES RELATIVE TO LONG DURATION ENERGY STORAGE SO YOU CAN THINK ABOUT NOT LITHIUM, BUT OTHER TYPES OF INDUSTRIES WHERE YOU CAN STORE ENERGY AND DISPATCH IT OVER MANY DAYS VERSUS A FEW HOURS. AND EVEN TRADITIONAL FORMS OF STORAGE. I DO WANT TO SHARE I KNOW THIS IS A CONCEPT THAT THIS BODY COMPLETELY UNDERSTANDS, BUT IN THE SPACE OF ENERGY MARKETS, DIVERSITY REALLY MATTERS. EVERY TYPE OF RESEARCH HAS ITS PROS, CONS, DAYS WHEN IT SHOWS UP WELL AND DAYS WHEN IT DOESN'T. SO WE'RE GOING TO CONTINUE TO VIEW THE PORTFOLIO THROUGH THAT LENS ULTIMATELY TO HELP MITIGATE PRICE ANDRELIABILITY RISK FOR OUR CUSTOMERS. >> COURAGE: YOU KNOW, I'VE HEARD MORE ABOUT BATTERY STORAGE AND I NO HE THAT WE UNDERTOOK A RELATIONSHIP WITH SOUTHWEST RESEARCH TO EXPLORE IMPROVING BATTERY STORAGE.
HAS THAT INDUSTRY DEVELOPED TO BE EVEN MORE EFFICIENT AND MORE EFFECTIVE, OR ARE
WE STILL AT A PLATEAU WHEN IT COMES TO BATTERY STORAGE? >> THE TECHNOLOGIES RELATIVE TO LITHIUM CHEMISTRY I WOULD SAY ARE COMMERCIALLY DEVELOPED.
THEY ARE ON PAR WITH NATURAL GAS TECHNOLOGIES. THERE ARE LIMITATIONS IN JUST HOW MUCH LITHIUM EXISTS IN THE WORLD, BUT THE CHARACTERISTIC OF THOSE RESOURCES ARE COST COMPETITIVE. THEIR DURATIONS NOW NOW ARE PRETTY LIMITED. WE HAVE BOTH TWO-HOUR AND FOUR-HOUR TECHNOLOGIES OPERATING ON OUR SYSTEM. IN AN IDEAL WORLD WE WOULD BE ABLE TO DISPATCH A STORAGE OVER A LONGER PERIODS OF TIME DURING EXTREME WEATHER EVENTS.
AS I MENTIONED, THERE ARE SOME INTERESTING NEW COMMENCEMENTS, NON-LITHIUM THAT DEMONSTRATE THOSE CAPABILITIES. THEY'RE JUST NEEDING TO COME
DOWN IN COST. >> COURAGE: THANK YOU. ANOTHER CONCERN THAT WE'VE HEARD ABOUT AND I THINK IT WAS ADDRESSED, WAS TRANSMISSION PROBLEMS. AND I UNDERSTAND THAT THERE'S A LOT OF ENERGY SOUTH OF SAN ANTONIO TRYING TO MAKE ITS WAY NORTH. AND WE RUN INTO PROBLEMS WITH THE CAPACITY OF TRANSMITTING ALL THAT ENERGY IS LIMITED. AND I HEARD THE DISCUSSION THAT THE STATE IS GOING TO ASSUME THE COST THAT CPS MAY TAKE ON TO EXPAND THAT TRANSMISSION CAPACITY, IS THAT CORRECT? IS THAT 100%?
>> YEAH. I'LL SHARE A LITTLE BIT ABOUT THE COST AND THEN PASS IT OFF TO RICHARD TO TALK ABOUT THE REGIONAL CHALLENGES.
TRANSMISSION IN THE STATE OF TEXAS IS A SOCIALIZED SYSTEM.
SO ALL MARKET PARTICIPANTS THAT -- [BUZZER] -- RECEIVE RECEIVE -- THAT OPERATE ON THE TRANSMISSION SYSTEM AND RECEIVE LOAD FROM THE TRANSMISSION SYSTEM PAY THEIR SHARE OF THAT COST. SO FOR US IN SAN ANTONIO IT'S BETWEEN SIX AND SEVEN PERCENT OF THE TOTAL TRANSMISSION COSTS, WE BEAR AS A LOAD-SERVING ENTITY.
SO RELATIVE TO THE CONGESTION WE'RE EXPERIENCING I'LL PASS IT
OFF TO RICHARD. >> HI. THANK YOU FOR THE QUESTION.
AND YES, THERE ARE CONSTRAINTS AND ERCOT HAS PUT OUT NOTICES AS FAR AS THE RELIABILITY OF SOME OF THOSE DISCUSS. SO WHAT HAPPENS IS WHEN ALL THE POWER -- SOMETIMES WHEN THE WIND IN THE WEST STOPS BLOWING THERE'S A LOT MORE WIND AND SOLAR POWER AND GENERATION COMING FROM THE SOUTH.
IT CONSTRAINS THE LINES SO IF THERE'S AN ISSUE ON ANOTHER LINE IT MAKES THE SYSTEM A LITTLE BIT UNSTABLE. SO ERCOT IS IDENTIFIED SEVERAL PROJECTS AND THEY REACHED OUT TO US AND SAID, HEY, WE NEED THIS ONE LINE THAT CPS OWNS ALONG WITH AEP AND STECK AND THEY'RE LIKE WE NEED TO REBUILD THIS LINE SOONER THAN THE INITIAL FORECAST WAS TO HAVE THIS CONSTRUCTED BY 2029.
SO THEY REACHED OUT AND SAID, HEY, WE REALLY NEED TO FOCUS ON THIS LINE.
SO OUR TEAMS HAVE JUMPED ON THAT AND WE PUT OUT AN RFP TO GET THIS LINE REBUILT IN 18 MONTHS, 18 MONTHS TO TWO YEARS. SO WE'RE GOING TO INCREASE THE CONSTRUCTION OF THAT PROJECT A LOT SOONER. SO THERE'S A LOT OF -- ERCOT HAS A LOT OF PROJECTS ALL SOUTH TO GET ALL THE POWER FROM THE SOUTH UP.
>> COURAGE: DOES THAT MEAN THAT ALL THE ERCOT MEMBERS PAY FOR THAT ADDITIONAL
COST? >> THAT'S CORRECT. >> COURAGE: THANK YOU.
THANK YOU, CHAIR. >> GARCIA: THANK YOU, COUNCILMAN.
COUNCILWOMAN HAVRDA. >> HAVRDA: YOU MENTIONED YOU WERE REPLACING STEEL WITH PLASTIC. WHY IS PLASTIC BETTER THAN STEEL FOR THE
INFRASTRUCTURE? >> DO YOU WANT TO ANSWER THAT?
>> YEAH. AND SOME OF THE OLD GAS INFRASTRUCTURE YEARS AGO STEEL WAS THE TYPE OF PIPE THAT WAS USED IN THE GAS INDUSTRY.
WE STILL USE STEEL PIPES, BUT PLASTIC, THE MATERIALS ARE A LOT BETTER NOW AND SO THEY'LL LAST 50 YEARS. SO WE'RE REPLACING SOME OF THE OLD STEEL PIPES WITH
PLASTIC. >> HAVRDA: THANK YOU. I WAS JUST CURIOUS.
DO YOU GUYS EVER WORK WITH MPO? WE TALK ABOUT AIR QUALITY AT
[00:55:05]
MOP AND WE'RE ALWAYS IN NON-ATTAINMENT. DO YOU GUYS WORK WITH MPO AT ALL WHEN WE TALK ABOUT AIR QUALITY? OUR ALAMO AREA MPO.>> WE CERTAINLY DO WORK WITH ALAMO AREA GOVERNMENT ENTITIES AND THAT IS A KEY CONSIDERATION RELATIVE TO OUR GENERATION PLAN AS WELL AS PLANNING IN THIS REGION.
SO WE'RE VERY ATTUNED TO NON-ATTAINMENT FOR OZONE AND ARE WATCHING PM2.5 VERY
CLOSELY AS WELL. >> NOT ACOT, I'M TALKING ABOUT OUR METROPOLITAN
PLANNING ORGANIZATION. >> I'M NOT CERTAIN. THAT MIGHT BE AN OPPORTUNITY
FOR US. >> HAVRDA: I INVITE YOU TO DO THAT.
WE TALK A LOT ABOUT THAT AND WE TALK ABOUT FUNDING OF COURSE AT MPO, SO IT MIGHT
BE SOMEHOW WE CAN PARTNER TOGETHER. >> OKAY, THANK YOU.
>> HAVRDA: THANK YOU, CHAIR. >> GARCIA: THANK YOU, COUNCILWOMAN. AND THEN CORY, ONE LAST QUESTION.
WHERE DO YOU EXPECT THE NEW REVENUE FROM THE SALES TO GO? OH, I'M SORRY, I SEE COUNCILMAN COURAGE HAS ANOTHER QUESTION, THE NEW
REVENUE FROM SALES TO GO? >> I'M SURE I WOULD SAY IT AS NEW, BUT THE SALES GO TO OUR BROADER FINANCIAL PICTURE. SO ALL THE METRICS I SHOWED
YOU IT'S ALL REFLECTED IN THERE. >> GARCIA: GOT IT, THANK YOU. WE'LL GO TO COUNCILMAN COURAGE.
>> COURAGE: THANK YOU, CHAIR. A BUDGET QUESTION I HAD, YOU PUT UP ON THE SCREEN THAT YOU'RE GOING TO BE REFUNDING HALF A BILLION DOLLARS, I BELIEVE IT WAS, $500 MILLION, WORTH OF CURRENT DEBT.
>> 5 BILLION. >> COURAGE: I'M SORRY, 5 BILLION.
HOW MUCH WILL THAT REFUNDING SAVE CPS ENERGY? >> I DON'T HAVE THOSE OFF THE TOP OF MY HEAD, BUT IT IS SUBSTANTIALLY IN THE MILLIONS.
I'LL HAVE THAT NOTE ON THURSDAY OR I CAN FOLLOW UP WITH YOU OFFLINE ACTUALLY.
BUT IT'S MULTIPLE MILLIONS THAT WE SAVE OVER TIME FOR ALL OF THOSE.
SOME OF THOSE ARE UNKNOWN RIGHT NOW BECAUSE IT DEPENDS ON WHAT THE MARKET IS AT THE
MOMENT WE GO OUT. >> COURAGE: OKAY. IT WOULD BE INTERESTING TO
HEAR THAT. ALSO -- >> DO YOU KNOW WHAT, I DID HAVE THE NUMBER ON THE SLIDE. 13 TO 79 MILLION.
>> COURAGE: THAT'S A WIDE GAP, BUT STILL SIGNIFICANT. >> AND THAT'S A FUNCTION OF WHATEVER THE MARKET MAY BE ON THE TIME BUT IT'S A WIDE RANGE.
THANK YOU, ELENA. >> COURAGE: WHAT ABOUT THE DATA CENTERS? HOW IS -- WHAT IS GOING TO BE THE IMPACT ON NORMAL OPPORTUNITIES SUPPLYING ENERGY TO OUR OWN CITY AS WELL AS HOW WILL THAT AFFECT THE STATE AND WHAT IS GOING ON TO TRY AND I GUESS LIMIT THE CONTINUED GROWTH OF THOSE.
AS FAR AS I'M CONCERNED WE DON'T NEED THEM IN SAN ANTONIO.
SEND THEM SOMEWHERE ELSEWHERE THEY'RE NOT SUCKING ALL OUR ENERGY AND ONLY CREATING A DOZEN JOBS FOR THESE BIG DATA CENTERS. IF WE WANT ECONOMIC GROWTH, WE WANT TO HAVE HUNDREDS OF JOBS, GOOD-PAYING JOBS THAT AREN'T GOING TO SUCK EVERYBODY ELSE'S ENERGY. SO THAT'S MY VIEW ON THAT, BUT HOW ARE WE LOOKING AT THAT AND TRYING TO ADDRESS THAT CONCERN AND WHAT ARE WE HEARING AT THE STATE LEVEL
ABOUT THAT? >> I REALLY APPRECIATE THE QUESTION.
OUR INDUSTRY GLOBALLY IS EXPERIENCING TREMENDOUS GROWTH RELATIVE TO DATA CENTERS SPECIFICALLY TIED TO ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING.
WE ALSO AS A STATE ARE SEEING SIGNIFICANT GROWTH IN OUR METROPOLITAN AREAS AS WELL AS THE PERMIAN BASIN REGION. SO ERCOT IS CURRENTLY PEAKS AT ABOUT 85,000 MEGAWATTS, AND THEY EXPECT BY THE END OF THIS DECADE, 2030, TO POTENTIALLY BE AS HIGH AS 140,000 MEGAWATTS. SO A SIGNIFICANT INCREASE.
SAN ANTONIO IS NO DIFFERENT. OUR SYSTEM PEAKS AT ABOUT 6,000 MEGAWATTS AND WE'RE CONTINUING TO SEE INTEREST IN LARGE BUSINESSES AS YOU MENTIONED, MANUFACTURERS COMING TO OUR REGION, AS WELL AS TECHNOLOGY COMPANIES.
WE WORK WITH ALL CUSTOMERS ON A NON-DISCRIMINATORY BASIS, SO WE AS A PROVIDER HAVE AN OBLIGATION TO SERVE AND SO WE WORK COOPERATIVELY WITH ALL OF OUR CUSTOMERS RELATIVE TO THEIR NEEDS. TO YOUR POINT THERE ARE PHYSICAL LIMITATIONS TO HOW QUICKLY WE CAN BRING ON THE LARGE LOADS. JUST SPECIFIC LI TO THE GENERATION THAT WE'RE RETIRING AND ALL THE TRANSMISSION WORK THAT WE'VE GOT GOING ON IN ORDER TO BE ABLE TO IMPORT ADDITIONAL POWER TO OUR REGION.
SO AGAIN, WE'RE WORKING VERY COOPERATIVELY WITH ALL OF THE HYPER SCALERS, WHICH ARE THE GROUPS THAT ARE BRINGING IN THESE LARGE LOADS. AT THE STATE LEVEL WE'RE VERY ACTIVE. WE WORK NOT ONLY IN ERCOT'S WORKING GROUPS AROUND LARGE LOAD, WE'RE WATCHING A BILL THAT WAS RECENTLY FILED, SENATE BILL 6, THAT
[01:00:06]
ADDRESSES THE VERY CONCERN THAT YOU'RE BRINGING UP RELATIVE TO COST RECOVERY, SUFFICIENCY AND ENSURING THAT THESE LOADS AS THEY COME INTO ERCOT, INTO THE SYSTEM, CAN SUPPORT RELIABILITY FOR THE LONG-TERM.SO WE'LL BE ACTIVE ON THAT BILL AND WE'LL PROVIDE COMMENTS AND SUPPORT TO THE AREAS THAT WE BELIEVE ARE NECESSARY TO PROTECT OUR CUSTOMERS.
[BUZZER]. >> COURAGE: THANK YOU. THANK YOU, CHAIR.
>> GARCIA: THANK YOU, COUNCILMAN. ANYBODY HAVE ANY OTHER QUESTIONS? ALL RIGHT. WONDERFUL.
THANK YOU SO MUCH TO CORY AND THE TEAM AND BEN, I DIDN'T KNOW IF YOU WANTED TO ADD ANYTHING. SORRY I SKIPPED OVER YOU. OKAY, WONDERFUL.
THANK YOU SO MUCH. THAT CONCLUDES OUR DISCUSSION ON ITEM NUMBER 3.
AND WE'LL MOVE ON TO ITEM NUMBER 4. AND I DO WANT TO THANK DR. FRAN SEEN ROMERO FOR BEING HERE AND ALL OF THE CPS TEAM AND LOOKING FORWARD TO MORE DISCUSSIONS. ITEM NUMBER 4 IS NOW A CCR REQUEST FROM COUNCILMAN MCKEE-RODRIGUEZ AND GAVITO TO PREVENT WATER DISCONNECTIONS.
I WANT TO SAY THAT WE HAVE THE DIRECTOR OF SAWS HERE AND YOU'VE BEEN SITTING PATIENTLY FOR AN HOUR. THANK YOU FOR BEARING WITH US HERE.
MIKE SHANNON WILL GO THROUGH THIS REALLY QUICKLY SO WE CAN GET YOU OUT OF HERE.
THANK YOU, GO AHEAD. >> THANK YOU, CHAIR, COUNCIL MEMBERS.
THIS WILL BE A TWO-PART PRESENTATION. I'LL GO THROUGH A FEW SLIDES AND ASK SAWS TO COME UP AND TALK ABOUT THEIR PART OF THIS PROCESS.
AS MENTIONED THIS WAS A CCR BACK IN AUGUST WITH COUNCIL DISTRICTS 2 AND 7 CO-AUTHORED AND ASKED US BOTH CITY STAFF AND SAWS TO WORK TOGETHER TO LOOK AT ESSENTIALLY HOW CAN WE DO MORE TO PREVENT THE POSSIBLE DISCONNECTION AT APARTMENT COMPLEXES OF WATER? SO THAT SIGNIFICANTLY AFFECTS A LOT OF PEOPLE, SO SINCE THEN WE'VE BEEN WORKING CERTAINLY WITH SAWS, WE HAVE BEEN WORKING WITH SAWS, CITY STAFF AND WHAT WE COULD POSSIBLY DO AND I'LL GO THROUGH THAT A LITTLE BIT HERE.
SO I THINK I WENT TOO FAR. SO ONE OF THE ITEMS THAT WAS ADDRESSED OR TALKED ABOUT IN THE CCR WAS LOOKING AT THE ORDINANCE THAT YOU ALL APPROVED TWO YEARS AGO, WHICH IS OUR PROACTIVE APARTMENT INSPECTION PROGRAM.
SO I'LL GIVE A VERY QUICK OVERVIEW OF THAT. YOU HAVE ALL SEEN IT, HEARD IT. WE'VE WORKED THROUGH THE PCDC COMMITTEE ON SIGNIFICANT DETAILS, ALONG WITH A LOT OF OUR PARTNERS LIKE THE APARTMENT ASSOCIATION, TENANTS RIGHTS ADVOCATES AS WELL AS MULTIPLE CITY DEPARTMENTS.
BUT IT IS WORKING. AND I'M GOING TO SHOW YOU SOME INFORMATION ABOUT HOW IT WORKS AND SOME OF THE RESULTS AND THEN TALK ABOUT SOME OF THE THINGS IDENTIFIED IN THE CCR IN RELATION TO THIS CURRENT ORDINANCE.
SO BIG PICTURE ORDINANCE OVERVIEW HERE, REMEMBER THE GOAL OF THE PROGRAM WAS TO INCENTIVIZE GOOD PROPERTY MANAGEMENT AT APARTMENT COMPLEXES, MULTI-FAMILY UNITS FIVE OR MORE, DOESN'T MATTER IF IT'S FIVE UNITS OR 500 UNITS, WE HAVE THEM ALL OVER THE CITY. WE WANT TO MAKE SURE THAT THESE APARTMENTS PROVIDE VERY GOOD HEALTH, SAFETY, WELFARE TO THEIR RESIDENTS AND IT WOULD INCREASE ACCOUNTABILITY TO PROPERTY OWNERS THAT WERE NOT -- WE SAW A LOT OF GRAY, WE STILL DO SEE MOSTLY GRAY PROPERTY MANAGERS THAT DO IT WELL. WE HAVE SOME THAT DON'T.
AND THOSE OUTLIERS, THIS IS REALLY ADDRESSED. IT ALSO SIGNIFICANT IN AUDIO] WAS WE WANT QUICKER COMPLIANCE. SOME OF THESE APARTMENT COMPLEXES THEY'RE GOING TO HAVE CODE ISSUES. WHAT WE'RE SEEING WAS THAT THEY WEREN'T GETTING RESOLVED QUICKLY, SO IF WE GIVE THEM AN APPROPRIATE AMOUNT OF TIME TO COMPLY WITH A SIGNIFICANT DEADLINE, WE WANTED MORE COMPLIANCE IN A QUICKER MANNER. SO IT APPLIES TO FIVE OR MORE UNITS.
IF YOU DON'T DO IT WELL, IF YOU GET WE CALL THEM THREE DESIGNATED CITATIONS WITHIN SIX MONTHS, I REFER TO THEM AS THREE STRIKES JUST BECAUSE IT MAKES SENSE TO ME. THEY WOULD BE PUT IN THIS PROGRAM AND THEN THEY WOULD BE REQUIRED TO PAY FOR SOME ADDITIONAL CITY SERVICES AT $100 PER COUNT PER YEAR.
WE CREATED A FIVE-PERSON APARTMENT INSPECTION TEAM THEY PROACTIVELY GO OUT.
WE DON'T WAIT FOR CALLS ON THOSE AND WE TRY TO GET BETTER COMPLIANCE ON THOSE.
SO THAT BEING SAID, SO THIS SLIDE IS OUR DASHBOARD. THIS IS AN INTERACTIVE DASHBOARD THAT WE HELPED CREATE AT THE DIRECTION OF SOME OF YOU.
I THINK IT CAME DIRECTLY FROM THE CHAIR THROUGH WORKING WITH THE PCDC COMMITTEE ON THE DEVELOPMENT, BUT THIS TELLS THE RESULTS AND WHAT I WANT TO SHARE WITH YOU IN TWO YEARS, JUST UNDER TWO YEARS, WE'VE DONE OVER 47,000 INSPECTIONS BY OUR TEAM. MOST OF THEM, YOU KNOW, INCLUDED BOTH INITIAL, WE HAD SOME REACTIVE, PROACTIVE, 25,000 REINSPECTIONS, BUT THE RESULTS ARE ON THE BOTTOM THERE. WE'VE BEEN TO OVER 1800 APARTMENT COMPLEXES HERE IN CONSTITUENT, ALL AROUND TOWN, EVERY COUNCIL DISTRICT. WE GET CALLS ON, AND WE FOUND 14,000 VIOLATIONS.
[01:05:03]
AND THE KEY ISSUE THAT I WANT TO SHOW YOU THERE IS THOSE ISSUES ARE ALL ADDRESSED QUICKLY. MOST OF THEM HAD TO BE DONE IN 10 DAYS.THAT'S WHAT THE ORDINANCE SAYS. IN 10 DAYS YOU HAVE TO FIX IT. SOMETIMES IT'S A LITTLE BIT QUICKER IF THAT WAS HIGHER LIFE SAFETY, BUT 10 DAYS. AND YOU CAN SEE WE ONLY HAD TO ISSUE 2500 CITATIONS BECAUSE THE OTHER 12,000 WERE ALL CORRECTED QUICKLY. AND THAT WAS THE GOAL OF THE ORDINANCE. OF THE 1800 COMPLEXES THAT WE'VE BEEN AT SINCE APRIL OF 2023, ONLY 39 OF THOSE COMPLEXES, TWO PERCENT, HAVE HAD TO REGISTER INTO THIS PROACTIVE PROGRAM. AND I THINK THAT WAS -- I THINK THAT'S AN IMPORTANT POINT. SO WE ARE GETTING QUICKER COMPLIANCE OF THESE ISSUES
AT MOST OF THE COMPLEXES? >> %, ONLY A COUPLE PERCENT OF THEM HAD TO COME INTO THE PROGRAM. AND I WILL SHARE WITH YOU THAT THAT 39 NUMBER THERE, THAT SINCE INCEPTION, HOW MANY HAVE HAD TO REGISTER WITH US AND GO THROUGH PROACTIVE INSPECTIONS, PAY THE FEE, ET CETERA. OF THOSE 39, 18 HAVE ACTUALLY GRADUATED, MEANING THROUGH THE PROACTIVE PROGRAM WE INCENTIVIZED, HEY, MAYBE YOU'RE NOT GOOD AT PROPERTY MANAGEMENT, MAYBE YOU'RE NOT GOOD AT THIS RIGHT NOW. YOU NEED TO DO BETTER AND IF YOU DO BETTER OVER TIME YOU CAN ACTUALLY GRADUATE AND GET OFF THE LIST. SO THAT 39 CAPTURES EVERYBODY, BUT CURRENTLY THERE'S ONLY 21 PROPERTIES IN THE PROGRAM.
AND WE ARE PROACTIVELY GOING OUT WHETHER WE GET A CALL OR NOT ON THOSE CURRENTLY.
NONE OF THOSE 18 HAVE HAD TO REPEAT BACK INTO THE PROGRAM YET.
THERE IS A PROVISION IN THERE SO WE'RE CLOSELY MONITORING THAT.
SO THAT PROGRAM HAS BEEN WORKING FOR TWO YEARS. WE'VE ADJUSTED, WE'VE WORKED WITH OUR PARTNERS, WE'VE WORKED WITH APARTMENT OWNERS, RESIDENTS, WE'VE POLICED SOME THINGS, BUT IT IS WORKING. THE CCR THAT WE'RE LOOKING AT HERE SPECIFICALLY ASKED US TO LOOK AT A FEW THINGS AND THAT'S THE PURPOSE OF THE DISCUSSION TODAY ALONG WITH WHAT SAWS IS GOING TO TALK ABOUT.
BUT THERE WAS SOME SPECIFIC REQUESTS THAT THE CCRS LOOKED AT WAS ONE SHOULD WE MODIFY THE ORDINANCE, THE PROACTIVE APARTMENT INSPECTION ORDINANCE, TO INCLUDE THE FOLLOWING. SO SHOULD WE INCLUDE APARTMENTS THAT ARE CONSISTENTLY LATE ORDINANCE. NOW, ONE NOTE HERE IS WE COULD DO THIS, BUT IT WOULD BE TIED NOT TO A LATE BILL, IT WOULD BE TIED TO KIND OF TOWARDS THE END OF THEIR PROCESS WHEN SAWS ISSUES WHAT WE CALL A FINAL NOTICE OR A NOTICE OF TERMINATION OF WATER DISCONNECT OR SOMETHING LIKE THAT. THAT'S A COUPLE OF MONTHS INTO IT AND THEY'LL WALK THROUGH THAT. WE WOULD HAVE TO TIE IT THERE. BUT WE COULD DO THAT AND THE DIRECTION FROM THE COUNCIL WAS TO LOOK AT MODIFYING THAT, THEN WE WOULD HAVE TO FIGURE OUT WHAT THAT LOOKS LIKE, WHETHER THAT BECOMES ONE OF THOSE STRIKES I TALKED ABOUT OR AN ESCALATED VIOLATION THAT TRIGGERS IT INTO THE PROGRAM. SO THAT'S ITEM NUMBER ONE.
NUMBER TWO WAS ASKING OR REQUIRING LANDLORDS AND/OR PROPERTY MANAGERS TO NOTIFY RENTERS IF THEY GET INTO A SAWS PAYMENT PLAN DUE TO OVER PAYMENT SO THAT COULD PHYSICALLY BE WRITTEN INTO THE ORDINANCE. A LITTLE BIT CHALLENGING FOR THE CITY TO PROACTIVELY ADDRESS THAT. WE WOULD PROBABLY BE REACTIVE. WE WOULD GET CALLS AND WE WOULD HAVE TO INVESTIGATE WHAT WOULD HAPPEN, WE'D WORK WITH SAWS ON THOSE. THEN CERTAINLY REQUIRE DELINQUENT COMPLEXES, THOSE THAT ARE HAVING TROUBLE PAYING SAWS BILLS, THEY'RE TAKING THE MONEY THROUGH MASTER'S METERS, BUT NOT PAYING IT, LIKE WAS DESCRIBED EARLIER, BUT FOR THEM TO BE MANAGED BY SOMEONE ELSE, A THIRD-PARTY THAT DOES IT BETTER. AGAIN, THAT'S SOMETHING WE COULD ADD TO THE ORDINANCE.
IT WOULD BE A LITTLE TRICKY. WE DON'T REALLY HAVE THAT ONE FLESHED OUT.
NOT SURE HOW IT WOULD WORK YET, BUT IF THAT'S WHAT WE WANT TO DO WE COULD CERTAINLY ADD THAT TO THE ORDINANCE. BUT THAT ONE IS A LITTLE TRICKY. ADDITIONALLY LOOKING AT PUBLICLY DISPLAYING APARTMENTS THAT ARE ADOLESCENT, THAT MAY BE A CHALLENGING ONE.
THERE ARE SOME STATE RULES ON WHAT YOU CAN PUT OUT THERE IN TERMS OF DELINQUENT. I KNOW SAWS CAN PROBABLY TALK A LITTLE BIT ABOUT THAT, BUT THAT WOULD BE A LITTLE BIT OF A CHALLENGE PUTTING PEOPLE THAT OWE MONEY TO SAWS ON A LIST PUBLICLY DISPLAYED. NUMBER FIVE AND SIX, I HAD A LITTLE CHECK MARK THERE BECAUSE NUMBER FIVE YOU'LL HEAR FROM SAWS, SHARING CUSTOMER DATA WITH COSA. WHEN THIS ISSUE COMES UP, WHEN THERE'S A POTENTIAL FOR WATER DISCONNECT, THEY ALREADY DO AND I THINK SIGNIFICANTLY MORE NOW WITH OTHER DEPARTMENTS WE'VE BEEN WORKING COLLABORATIVELY OVER THE LAST SEVERAL MONTHS EVEN BEFORE THE CCR, BUT MORE SO NOW. IT'S ALL HANDS ON DECK.
WE ALL WORK TO RESPOND AND COORDINATE FOR THE TENANTS TRYING TO GET PAYMENT BEFORE DISCONNECTION, ET CETERA. AND THEN WE'RE CONSTANTLY LOOKING TO UPDATE OUR POLICIES AND PROCEDURES. SOME OF THEM HAVE BEEN DONE ALREADY THAT WE CAN LOOK AT TO ENSURE THE PROPER NOTICE AND DOCUMENTATION. ALL THOSE STEPS BEFORE ANY POTENTIAL DISCONNECTION. SO THAT'S WHAT THE CCR IS, SO WE'LL BE ABLE TO ANSWER
[01:10:02]
ANY QUESTIONS, GET SOME DIRECTION FROM YOU ALL AS WE GO THROUGH THIS PRESENTATION, BUT I'M GOING TO HAND IT OFF NOW TO SAWS TO COME UP I THINK BEFORE -- IS THAT OKAY, CHAIR, BEFORE QUESTIONS? OKAY.THANK YOU. >> GARCIA: MR. FUENTE, COMING UP?
>> AS CECILE A I CECELIA COMES E WILL BE GIVING THE PRESENTATION.
COUNCIL MEMBERS MCKEE-RODRIGUEZ AND GAVITO, WE UNDERSTAND WHAT'S GOING ON. WHAT WE DID THIS PAST YEAR IS THE FIRST YEAR WE'VE REALLY DONE THIS AND IT'S THE FIRST TIME IT'S HAPPENED.
YOU'VE BEEN THE LONGEST, COUNCILMAN COURAGE, IT HASN'T, AND IT HAPPENED BECAUSE OF COVID. AND HOPEFULLY ONCE IN A GENERATIONAL KIND OF THING, BUT WE DO DEFINITELY, ALL THE THINGS THAT MIKE TALKED ABOUT, ALL OF THE RESOLUTIONS THAT Y'ALL HAD BEFORE YOU, WHATEVER Y'ALL DECIDE, THAT'S OBVIOUSLY IN YOUR PURVIEW. WE WILL WORK WITH THAT, BUT WE DO ASK THAT THIS TOOL BE LEFT IN THE TOOLBOX OF POTENTIAL DISCONNECTION WHENEVER THE TIME COMES.
>> GOOD MORNING. THANK YOU FOR THE OPPORTUNITY TO PROVIDE YOU WITH AN UPDATE REGARDING OUR DELINQUENT APARTMENT PROCESS.
AS A REMINDER, HERE IS OUR NORMAL BILL PROGRESSION. ON DAY ZERO, BILL NUMBER 1 IS MAILED AND 15 DAYS LATER THAT BILL IS DUE. 30 DAYS AFTER THAT BILL WAS MAILED AND PAYMENT IS NOT MADE ACCORDING TO THE CITY'S ORDINANCE, THE ACCOUNT WOULD BE ELIGIBLE FOR COLLECTION. HOWEVER, SAWS IS BILL NUMBER 2 WITH A PAST DUE MESSAGE FOR BILL NUMBER 1. ON DAY 46, A SEPARATE LETTER WITH THE FINAL NOTICE MESSAGE IS MAILED. ON DAY 61, BILL NUMBER 3 IS MAILED WITH THE FINAL NOTICE MESSAGE FROM BILL NUMBER 1. 60 DAYS AFTER BILL NUMBER 1 IS MAILED, THE ACCOUNT IS REVIEWED FOR POTENTIAL SERVICE DISCONNECTION, HOWEVER WE WE PROVIDE AN ADDITIONAL SEVEN-DAY REMINDER BEFORE THE EARLIEST POTENTIAL DISCONNECTION DATE. DAY 67 IS THE EARLIEST POINT IN TIME WE WOULD ACTUALLY DISCONNECT SERVICE FOR RESIDENTIAL AND COMMERCIAL CUSTOMERS.
HOWEVER, APARTMENTS FOLLOW THE SAME PROCESS AND RECEIVE THE SAME FINAL NOTICES, BUT ARE NOT AT RISK OF POTENTIAL SERVICE DISCONNECTION AT DAY 67.
WE UNDERSTAND THE ESSENTIAL CIRCUMSTANCES SURROUNDING APARTMENT COMPLEXES, THESE MESSITER METERED ACCOUNTS, SO WE REVIEW THESE SEPARATELY.
EACH MONTH WE IDENTIFY 10 TO 25 DELINQUENT ACCOUNTS. WE REACHED OUT OR THEY HAVE NEVER REACHED OUT TO US, NEVER CREATED A PAYMENT ARRANGEMENT, WE'VE NEVER GOTTEN ANY KIND OF RESPONSE FROM THEM. THEN WE WILL WORK WITH THE OWNERS IF WE CAN MAKE CONTACT AS WELL AS THE PROPERTY MANAGEMENT COMPANIES FOR A PERIOD OF FIVE TO SIX WEEKS BEFORE POTENTIAL SERVICE DISCONNECTION. WE'VE ALSO FOCUSED ON SMALLER COMPLEXES THAT CREATE AN ACCOUNTS AND NEVER MADE A PAYMENT. WE WORK WITH THE SAN ANTONIO APT INFORMATION AND THEY PROVIDE THAT TO THEIR MEMBERS. BASED ON INPUT WE RECEIVE FROM THE MUC AND THE CITY WE HAVE UPDATED OUR OUTREACH AND COLLECTIONS PROCESSES.
OUR PROCESS HAS BEEN EXTENDED TO PROVIDE AGENCY PARTNERS AT LEAST 30 DAYS ADVANCE NOTICE OF POTENTIAL SERVICE DISRUPTION. ONCE AN ACCOUNT HAS BEEN IDENTIFIED IN OUR PROCESS, WE ALSO PROVIDE A CERTIFIED LETTER TO OUR OWNER.
WE ALSO USE THE COUNTY CLERK'S PROPERTY RECORDS TO IDENTIFY CURRENT DEED INFORMATION. IN WEEK 2, WE'VE ADDED ADDITIONAL -- WE'VE ADDED MULTIPLE SITE VISITS TO PROVIDE THE DISCONNECTION TIME LINE TO PROPERTY MANAGER. AND WE HAVE COMMITTED TO THE CITY THAT IF WE ARE ABLE TO MAKE CONTACT DURING THE SITE VISIT, WE WILL DETERMINE THE NUMBER OF OCCUPIED UNITS AT THE COMPLEX. WHILE WE ARE ON SITE, WE ALSO PLACE THE DOOR HANGERS ON THE PROPERTY OFFICE DOORS. IN WEEK 3, IF NO PAYMENT IS MADE, WE WOULD PLACE DOOR HANGERS WITH DATE AND TIME NOTED.
THIS GIVES TWO WEEKS' NOTICE TO THE TENANTS AT THIS TIME. IN THE ADDED FOURTH WEEK, WE'VE PLACED THE DOOR HANGERS ON THE TENANTS' DOVE GIVING A ONE-WEEK NOTICE.
THEN IN WEEK 5, AFTER SEVERAL OUTREACH ATTEMPTS, STILL NO PAYMENT, WE WOULD
[01:15:01]
PLACE THE THIRD DOOR HANGER GIVING ONE DAY NOTICE IN ADVANCE.IF NECESSARY, WE WOULD DISCONNECT SERVICE AND THEN STAY ON SITE AT EACH OF THOSE APARTMENT COMPLEXES FOR AT LEAST TWO HOURS SO WE CAN RESTORE SERVICE IMMEDIATELY IF A PAYMENT IS MADE. WE ARE WORKING WITH THE CITY TO ADD ADDITIONAL TENANTS' RIGHTS INFORMATION ALONG WITH OUR DOOR HANGERS.
IN ADDITION TO THE PROCEDURAL UPDATES, WE'VE INCREASED OUR COORDINATION AND COMMUNICATION WITH THE CITY'S NEIGHBORHOOD AND HOUSING SERVICES DEPARTMENT AS WELL AS ESTABLISHED A PARTNERSHIP WITH THE SAN ANTONIO APARTMENT ASSOCIATION. WE MEET OFTEN TO SHARE OUR LISTING OF DELINQUENT APARTMENTS. THEY HELP IDENTIFY WHICH COMPLEXES ARE MEMBERS AND THEY PROVIDE ADDITIONAL POINTS OF CONTACT, AND THEY DO ASSIST WITH COLLECTION EFFORTS, GOING ON SITE MAKING THEIR OWN SITE VISITS.
WE'VE ENHANCED INTERNAL EFFORTS TO REACH CUSTOMERS WHO ARE THE LANDLORDS AND PROPERTY MANAGERS. WE UTILIZE THE COUNTY CLERK'S RECORDS, MAKE MULTIPLE SITE VISITS TO ENSURE THE PROPERTY MANAGERS ARE UNDERSTANDING OF THE ENTIRE TIME LINE, ANSWER THEIR QUESTIONS. WE HAVE CONTINUED TO EXPAND OUR PAYMENT OPTIONS BECAUSE MOST OF THESE ARE LARGE PAST DUE BALANCES FROM COVID TIME PERIOD. AS REQUESTED, SAWS AND THE CITY REACHED OUT TO SEVERAL CITIES ACROSS THE UNITED STATES TO DETERMINE IF THESE UTILITIES ACTIVELY DISCONNECT FOR NON-PAVEMENT. THE OVERWHELMING MAJORITY CONDUCT SIGNIFICANT OUTREACH EFFORTS AND THEY WILL DISCONNECT SERVICE IF PAYMENT IS NOT RECEIVED.
OUT REACH EFFORTS INCLUDE SIMILAR TO US, PHONE CALLS, LETTERS, POSTCARDS, EMAILS AND TEXT MESSAGES. SIMILAR TO OUR FIELD EFFORTS, THEY UTILIZE DOOR HANGERS TO NOTIFY TENANTS OF POTENTIAL SERVICE DISCONNECTION.
OUT OF THE 18 CITIES RESEARCHED, IN TEXAS, OKLAHOMA, CALIFORNIA, KANSAS AND ARIZONA, THE CITY OF ARLINGTON WAS THE ONLY CITY THAT CURRENTLY DOES NOT DISCONNECT APARTMENTS FOR NON-PAVEMENT, HOWEVER, IT IS ALLOWED IN THEIR CITY ORDINANCE. REGARDING THE EFFECTIVENESS OF SERVICE DISCONNECTIONS, WE WANTED TO PROVIDE THE HISTORICAL TREND OF APARTMENTS THAT WERE ELIGIBLE FOR DISCONNECTION AND OUR CURRENT STATUS OF OUR DELINQUENT CUSTOMERS.
THIS CHART PROVIDES THE NUMBER OF ACCOUNTS ELIGIBLE FOR DISCONNECTION IN THE BLUE BARS AND PERCENTAGE ELIGIBLE IN ORANGE. STARTING PRE-COVID IN 2019, WE HAD LESS THAN 120 APARTMENTS ELIGIBLE FOR DISCONNECTION.
WHEN COVID HIT, WE PAUSED DISCONNECTIONS AND ALL OF OUR DELINQUENT BALANCES INCREASED INCLUDING APARTMENTS. IN MAY OF 2021, WE HAD ALMOST 440 APARTMENTS ELIGIBLE FOR DISCONNECTION. IN BETWEEN MAY OF 2021 AND MAY OF 2022, THE NOVELLIBLE APARTMENTS DECREASED MAINLY DUE TO FEDERAL AND STATE ASSISTANCE PROGRAMS. EVEN THOUGH WE DID START DISCONNECTING RESIDENTIAL AND COMMERCIAL CUSTOMERS IN OCTOBER OF 2021, WE DID NOT DISRUPT ANY APARTMENTS AT THAT TIME. ONCE THE PROGRAM, ASSISTANCE PROGRAMS ENDED, WE SAW THE NOVELLIBLE APARTMENTS INCREASE TO OVER 450 APARTMENTS IN MAY OF 2024 WHICH EXCEEDED OUR COVID PEAK. WE REFOCUSED ON AMOUNT COLLECTIONS. WE WENT THROUGH OUR MULTI-WEEK PROCESS IN JUNE OF 20234. AS YOU CAN SEE THE NOELLIBLE IN JANUARY OF 2025. FOR COMPARISON, MAY OF 2019, THERE WERE 88 ACCOUNTS ELIGIBLE FOR DISCONNECTION AND OWED $200,000. JANUARY 2025, THE 380 ACCOUNTS THAT ARE ELIGIBLE FOR DISCONNECTION OWE $2.9 MILLION.
EVEN THOUGH WE HAVE MADE PROGRESS, WE BELIEVE OUR PROCESS HAS BEEN EFFECTIVE.
WE NEED TO BE ABLE TO HAVE THIS TOOL IN OUR TOOL BELT AND BE ABLE TO UTILITY LIES CYST ADVICE DISCONNECTS AS A TOOL. AT THE END OF 2025, OUT OF 5091 ACCOUNTS, WE HAVE ALMOST 90,000 DELINQUENT ACCOUNTS.
FOCUSING JUST ON APARTMENTS, WE HAVE 632 DELINQUENT AMOUNTS.
THEY HAVE OVER 4,800 IN PAST DUE BALANCES AND 380 ARE ELIGIBLE FOR DISCONNECTION.
[01:20:02]
WE UNDERSTAND THE SPECIAL CIRCUMSTANCES REGARDING APARTMENT DISCONNECTIONS AND WE ARE COMMITTED TO WORKING WITH THE CITY, THE COUNTY AND CPS WITH OUR COLLECTION EFFORTS AND I'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE.>> GARCIA: THANK YOU AND THANK YOU TO PUENTE AND THE TEAM AND VERONICA.
I KNOW THAT COUNCILMEMBER ALDERETE GAVITO AND COUNCILMEMBER MCKEE-RODRIGUEZ PUT TOGETHER THE CCR AND I WANT TO THANK THEM AS WELL FOR IT. I THINK IT WAS IN JUNE OR SOMETHING THERE WAS AN APARTMENT COMPLEX THAT WAS GOING TO BE DISCONNECTED OFF OF 90 AND ALSO THE ALARM THAT THERE WOULD BE FOUR POSSIBLE DISCONNECTIONS, AND SO AT THE TIME I GATHERED SAWS AND DSD AND NHSD, CITY ATTORNEY'S OFFICE AND THEN ALSO THE RIO GRANDE LEGAL AID TO SEE WHAT IT IS THAT WE COULD DO TO HELP AND I WANTED TO LEARN ABOUT THE PROCESS BECAUSE I DIDN'T KNOW ABOUT IT. AND SO I ORGANIZED THAT MEETING SO THAT WE COULD FIGURE OUT HOW TO IMPROVE THE PROCESS AND THEN I APPRECIATE THE COUNCILMEMBERS WHO DID THE CCR TO FOLLOW UP A LITTLE BIT MORE AND GET SOME ADDITIONAL QUESTIONS AND SEE IF THEIR IDEAS COULD ALSO BE IMPLEMENTED. SO THANK YOU FOR IMPROVING YOUR OUTREACH TIME LINE.
IT'S ALREADY BETTER THAN WHEN IT WAS WHEN WE MET OVER THE SUMMER IN A FIRST TIME.
AND SO I THINK DEFINITELY YOU ALL TOOK SOME OF THOSE CONSIDERATIONS RIGHT AWAY.
I ALSO WANT TO THANK THE APARTMENT ASSOCIATION FOR BEING HERE AND BEING SO INVOLVED. I GOT A CALL LAST WEEK FROM ALLISON ALERTING ME ABOUT A POTENTIAL DISCONNECTION SO I WAS ABLE TO KIND OF WORK ON IT SO I KNOW THEY'VE BEEN ACTIVELY INVOLVED. WHEN IT COMES TO CODE COMPLIANCE, HOW DOES THE CURRENT PROCESS, MIKE, WORK FOR WATER DISCONNECTION? I'M ASKING BECAUSE I'M WONDERING IF WE COULD FOLD IN SOME OF THE PROCESS OR IF THAT WOULD BE YOUR RECOMMENDATION WITHOUT NECESSARILY -- LIKE HOW CAN WE FOLD IT INTO THE PROCESS
ESSENTIALLY? >> SHANNON: SIMPLY PUT, POTENTIAL FOR WATER DISCONNECT IS NOT A CODE VIOLATION RIGHT NOW. IT IS WHEN THE WATER IS TURNED OFF, THAT IS A VIOLATION AND WE START THAT PROCESS, WE WILL ISSUE NOTICE, THEY HAVE A CERTAIN TIME TO FIX IT. IF THEY DON'T, THEY WILL GET ONE OF THAT'S STRIKES ARREST MULTIPLE STRIKES THAT COULD LEAD THEM INTO THE PROGRAM.
A FEW OF THE APARTMENTS THAT WERE ALREADY IN THIS PROCESS HAD OTHER CODE ISSUES LIKE BROKEN STAIRS OR STUFF INSIDE THE UNITS THAT WEREN'T PER CODE.
THEY ARE ALREADY IN THE PROGRAM. BUT WE WOULD NOT -- WOULD NOT BE ABLE TO ISSUE A NOTICE OF VIOLATION ON THAT RIGHT NOW.
WE WOULD HAVE TO CHANGE THE ORDINANCE. I WILL SAY A LITTLE BIT TO YOUR POINT IS NOT ONLY BEFORE THIS BUT I THINK THROUGH THAT -- SOMETIME IN THE SUMMER AND THROUGH A LOT OF THE COORDINATION WITH CELIA AND SEVERAL SAWS MEMBERS, DSD AND APARTMENT TEAM IS INVOLVED EVEN BEFORE WE HAVE TO WRITE THAT CITATION, HOPING THAT WE DON'T. SO WE ARE ENGAGED AS THAT KIND OF MULTIPLE RESOURCE ANSWERING QUESTIONS, HELPING PEOPLE KNOW, TELLING THE APARTMENT OWNER THAT NOT ONLY DO YOU OWE MONEY, BUT YOU COULD BE POTENTIALLY GETTING CITATIONS IF THE WATER DOES TURN OFF. WE ARE VERY MUCH INVOLVED BUT RIGHT NOW IT'S NOT A VIOLATION UNTIL THE WATER IS SHUT OFF.
>> GARCIA: DO WE MAKE RESOURCES AVAILABLE ON OUR WEBSITE FOR PEOPLE WHO COULD BE IN THIS? ONE OF THE THINGS WE TALKED ABOUT WAS THE FOOD BANK BE READY TO GO WITH WATER OR EVEN LIKE I MENTIONED TEXAS RIO GRANDE LEGAL AID.
DO WE HAVE THAT SOMEWHERE WHERE THEY COULD FIND THEM? I KNOW WE TRY TO DO SOMETHING ON THE DOOR HANGER, BUT THAT MIGHT HAVE BEEN TOO MUCH INFORMATION TO SQUEEZE ALL IN. WHAT ARE WE DOING TO MAKE SURE WE HAVE ACCESS -- OH,
THE OTHER VERONICA. >> HIDING BEHIND THE PILLAR. >> GARCIA: THANK YOU.
>> WE DO HAVE RESOURCES, AN ENTIRE RENTERS RESPONSIBILITY AND RESOURCES WEB PAGE WITH INFORMATION. WE HAVE HARD COPIES OF RENTERS [INAUDIBLE].
IF THERE ARE DOOR HANGERS ON A PROPERTY, THEY CAN ADD A LINK OR QR CODE OR SOME KIND OF OPTIONS TO BE CONNECTED DIRECTLY TO THAT WEBSITE AND PROVIDES INFORMATION ON WHAT DO YOU DO IF YOU DIDN'T PAY YOUR BILL AND YOU ARE DISCONNECT.
WHAT DO YOU DO IF YOU DID PAY YOUR BILL BUT THE LANDLORD'S WAS SHUT OFF THAT DIRECTS THEM TO LEGAL RESOURCES AS WELL AS FOOD BANK OR OTHER UTILITY
ASSISTANCE. >> GARCIA: THANK YOU. IF WE DON'T HAVE THAT QR CODE UP YET, LET'S MAKE SURE MAYBE ON THAT DOOR HANGER WE INCLUDE THAT AS SOON AS POSSIBLE. I THINK IT'S A GOOD RESOURCE.
WE'LL START OFF WITH MY COLLEAGUES WITH QUESTIONS AND SO COUNCILMEMBER
[01:25:05]
COURAGE. >> COURAGE: THANK YOU, CHAIR.
WELL, IT'S APPARENT FROM THE REPORT THAT THE CURRENT EXISTING THREAT TO TURN OFF THE WATER HASN'T WORKED TO THE EXTENT THAT WE'RE OWED $2.8 MILLION IN UNPAID WATER BILLS FROM COMPANIES THAT OBVIOUSLY HAVEN'T FELT LIKE THAT THREAT WAS SIGNIFICANT TO THEM. AND I WOULD NEVER WANT TO SEE THE WATER TURNED OFF FOR THE OCCUPANTS BECAUSE THE COMPANY DIDN'T PAY THE BILL. AND THAT CAN BE I THINK DANGEROUS AT CERTAIN TIMES OF THE YEAR WHEN THAT MAY TAKE PLACE.
I THINK THAT WE NEED TO BE LOOKING AT THE KIND OF ACTION THAT THE CITY OR SAWS IN CONJUNCTION WITH THE CITY COULD TAKE THAT WOULD REALLY FORCE AN OWNER'S HAND.
YOU COULD TURNED OFF THE WATER, BUT THE OWNER STILL DOESN'T HAVE TO PAY.
THEY CAN LET THE PEOPLE SUFFER FOR DAYS OR WEEKS BEFORE THEY DO ANYTHING.
AND THAT'S AN END RESULT OVER A PERIOD OF FIVE OR SIX MONTHS BEFORE YOU EVEN DO THAT. I'M WONDERING IF WE CAN INTERJECT A PROCESS WHERE AFTER A CERTAINLY REASONABLE AMOUNT OF TIME, LET'S SAY AFTER 60 OR 90 DAYS, THAT THE CITY AND SAWS WILL GO AHEAD AND PUT A LIEN ON THE PROPERTY.
WHICH MEANS THAT IN THE FUTURE ANY SALE OF THAT PROPERTY WOULD BE INHIBITED BY A LIEN THAT MAY EXIST. AND SO LET'S SAY SOMEBODY DIDN'T PAY THEIR BILL AND IT WAS $1,500 A MONTH FOR THREE MONTHS, WE PUT A $4,500 LIEN ON THE PROPERTY OFFER THREE MONTHS OR SOMETHING. AND WITH AN UNDERSTANDING AND DOCUMENTATION BE GIVEN TO THE OWNER EVERY MONTH WE'LL ADD AN ADDITIONAL LIEN WHICH WOULD MAKE IT HARDER FOR THEM TO SELL THE PROPERTY DOWN THE LINE. IF SOMEBODY OWES FOUR OR FIVE THOUSAND DOLLARS, THAT MAKES A BIG IMPACT TO SELL THAT PROPERTY AND I THINK THAT MAY COME TO THE ATTENTION OF THE PROPERTY OWNER A LOT MORE THAN THE THREAT THE WATER MIGHT GET TURNED OFF SOMEWHERE DOWN THE LINE.
I'M NOT SAYING THAT WE SHOULDN'T CONTINUOUSING A LOT OF THE PROCESS, BUT I THINK THERE NEEDS TO BE AN EARLIER INTERVENTION THAT IS MORE THREATENING TO THE PROPERTY OWNER'S OPPORTUNITY TO SELL THE PROPERTY, THEIR PROPERTY RIGHTS BEING AFFECTED BY THAT KIND OF LIEN THAT THE CITY OR SAWS AND SOME KIND OF A COOPERATE I HAVE EFFORT CAN PUT INTO PLACE. I'D LIKE SOME RESPONSE TO
THAT. >> COUNCILMEMBER COURAGE, GOOD MORNING.
EVERETT GUZMAN, LEGAL DEPARTMENT, SAWS. CERTAINLY LIENS COULD BE RECORDED ON PROPERTIES. THE CITY WOULD ACTUALLY HAVE TO PASS AN ORDINANCE THAT WOULD ALLOW SAWS AND ALSO CPS TO DO THAT SORT OF ACTIVITY.
AND YOU ARE RIGHT, THERE MAY BE A POTENTIAL IMPACT OF FILING THOSE LIENS.
BUT IT ALSO ALLOWS THE SERVICE TO GO UNPAID. BECAUSE WE COULD CONTINUE TO ADD ON TO THAT LIEN, BUT IT DOESN'T NECESSARILY MEAN THEY ARE GOING TO PAY.
I THINK THERE IS THAT BIT OF, YOU KNOW -- >> COURAGE: I'M NOT SAYING WE WOULDN'T GO THROUGH WITH THE REST OF THE PROCESS, BUT RIGHT NOW IT'S TAKING SIX MONTHS OR LONGER BEFORE YOU EVEN THREATEN TO TURN THE WATER OFF.
BY PRACTICE IT WAS JUST EXPLAINED WE REALLY DON'T TURN THE WATER OFF FOR SIX MONTHS. BUT IF WE LET THEM KNOW AFTER 90 DAYS AND AGAIN AFTER 120 DAYS AND AGAIN AFTER 150 DAYS THAT ANOTHER LIEN HAS BEEN PUT ON THE PROPERTY AND ANOTHER LIEN, IT IS GOING TO CATCH THEIR ATTENTION PROBABLY MORE THAN JUST SAYING, WELL -- THEY KNOW WHAT THE PROCESS IS LIKE.
THEY KNOW OTHER COMPANIES THAT MAYBE ARE IN THE SAME SITUATION, AND I JUST WOULD LIKE TO SEE US USE ANOTHER TOOL TO FORCE THEM SOONER TO BE RESPONSIVE THAN LATER
WITH A TOOL OF TURNING OFF THE WATER. >> SURE, I COMPLETELY UNDERSTAND THAT. AND I THINK WE WOULD WELCOME ALWAYS HAVING ADDITIONAL
TOOLS TO USE TO TRY AND ADDRESS THE SITUATION. >> COURAGE: THANK YOU,
CHAIR. >> GARCIA: THANK YOU, COUNCILMAN.
COUNCILMEMBER CABELLO HAVRDA. >> HAVRDA: THANK YOU, CHAIR. I JUST WANT TO CLARIFY, IS THERE A RECOMMENDATION BEING MADE TODAY? I SEE THE REQUEST FROM THE CCR.
>> SHANNON: I DON'T HAVE ANY SPECIFIC RECOMMENDATION ON ANY ONE OF THOSE AT THAT POINT. I'VE LAID OUT, I THINK, WHAT WE'VE BEEN ASKED, WHAT WE CAN DO. A COUPLE OF THEM HAVE SOME CHALLENGES, BUT ALL OF THEM CAN BE DONE.
[01:30:03]
EACH ONE WHERE THEY CAN LAND. I THINK THIS DISCUSSION WILL HELP US KIND OF EXECUTE WHAT YOU THINK IS APPROPRIATE AND/OR THEN GO BACK AND FILLOUT MAYBE A MORE DETAILED LOOK AT IT. >> HAVRDA: THANKS, MAKE.
I AGREE WITH THE END RESULT THAT I THINK THE CCR IS LOOKING FOR.
I HAVE A REAL CONCERN, LAST SUMMER AN APARTMENT COMPLEX IN MY DISTRICT WATER SHUT DOWN AND WE HAD TO GET EVERYBODY OUT THERE AND MAKE SURE EVERYBODY WAS POTENTIALLY HOUSED AND IT WAS A PRETTY CRAZY SCRAMBLE. I DON'T KNOW THAT MODIFYING THE PROACTIVE APARTMENT INSPECTIONS PROGRAM IS THE WAY TO DO IT.
YOU JUST WENT THROUGH A WHOLE PRESENTATION HOW EFFECTIVE IT IS AND I'M AFRAYED IF WE OPEN THAT DOOR WE RISK JUST CHANGING IT FOR THE WORSE, FRANKLY, RIGHT? IS THERE ANOTHER OPTION TO ACCOMPLISH THE MASTER METER SITUATION WHERE THE APARTMENT COMPLEX IS NOT PAYING THEIR SAWS BILLS BUT THE TENANTS ARE AND THE THEN
THE TENANTS GET SHUT DOWN? >> SHANNON: I THINK THE OTHER OPTIONS ARE STUFF THAT WE STARTED TO DO A LITTLE MORE OF, WORKING WITH THE APARTMENT TEAM THAT WE HAVE THAT WORKS ON THE PROACTIVE APARTMENTS. SO ANY ISSUES THAT WE GET FROM CODE ENFORCEMENT WHETHER THEY ARE ON THE REGISTERED LIST OR NOT, ESPECIALLY ESCALATED ONES WHICH THESE GENERALLY FALL INTO, GET FORWARDED RIGHT TO MY APARTMENT TEAM. THEY DO APARTMENTS ALL DAY EVERY DAY SO THEY ARE WELL VERSED ON OUR PARTNERS, PROCESSES AND SOME OF THESE CHANGES.
RIGHT NOW MAKING SURE INCORPORATED I LONG WITH VERONICA AND HER TEAM THAT HAS BEEN ENHANCED FROM MY STAFF'S NORMAL PROCEDURES. I WOULD SAY RIGHT NOW THAT'S OUR PROPOSAL. IF THE ORDINANCE GETS CHANGED, WE WILL MAKE THAT
AS PART OF OUR TYPICAL PROCESS OF INSPECTIONS. >> HAVRDA: WHAT WHAT'S THE
PROPOSAL? >> SHANNON: WE'VE BEEN MORE INTEGRATED INTO THE SAWS PROCESS MORE EARLY ON. 31 DAYS, 46 DAYS, 60 DAYS, SO WE GET INVOLVED VERY
EARLY ON WHEN WE GET NOTICE OF DELINQUENT ACCOUNT. >> HAVRDA: WHAT LEGAL OR PROCEDURAL MECHANISMS DOES THE CITY HAVE TO ENSURE THE APARTMENT COME PLEX DOESN'T
DO THIS? >> RIGHT NOW PAYING THE UTILITY BILLS IS NOT PART OF
OUR CITY CODE ENFORCEMENT PURVIEW. >> HAVRDA: OKAY.
SO I WANT TO BE CHEER -- >> SEGOVIA: IF I MAY, WE WOULD HAVE TO CHANGE THE ORDINANCE ON THE APARTMENT ORDINANCE TO MAKE THESE CHANGES.
I THINK THAT'S WHAT YOU WERE ASKING. WE WOULD HAVE TO CHANGE OUR
ORDINANCE. >> HAVRDA: THAT'S WHAT I'M SUGGESTING WE NOT DO BECAUSE
THE ORDINANCE IS SO FAR VERY EFFECTIVE, RIGHT? >> SHANNON: I'M SORRY, I MAY HAVE MISSIONED THE QUESTION. JUST TO REITERATE IF AND WHEN THE WATER IS DISCONNECTED THAT'S WHEN WE JUMP IN WITH OUR CITY CODE.
I JUST WANT TO CLARIFY THAT. >> HAVRDA: WE WANT TO PREVENT THAT.
>> SHANNON: EXACTLY. >> HAVRDA: I UNDERSTAND THE CITY CAN JUMP IN AFTER, BUT I'M NOT SEEING OTHER THAN MODIFYING THE ORDINANCE A SOLUTION FOR GETTING TO PREVENTION. I KNOW THAT THERE WAS SOME TALK ABOUT LIKE WHETHER THE CITY COULD REVOKE ON C OF O, EVEN, YOU KNOW, LETTING THE APARTMENT COMPLEX KNOW
THAT'S SOMETHING WE MIGHT DO. >> SHANNON: CERTAINLY, AND THAT'S ACTUALLY PART OF IT. IN OUR BUILDING AND FIRE CODES RIGHT NOW, WHICH WE ENFORCE, IS WHEN THAT WATER IS DISCONNECTED, NOT ONLY WILL WE WORK WITH THE CITATION PROCESS, NOTIFICATION CITATION THROUGH THAT TO ENCOURAGE THEM TO GET THE WATER TURNED BACK ON BY RESOLVING WHAT THEY HAVE WITH SAWS, WE WILL THEN PROCEED WHAT'S CALLED A NOTICE TO VACATE BECAUSE YOU CAN'T LIVE THERE LONG WITHOUT WATER PER CODE, BUT ALL THAT IS INITIATED AT THE TIME OF WATER DISCONNECT.
THERE'S A DEDICATED PROCESS FOR THAT, BUT IT TAKES DAYS AND WEEKS FOR THAT TO FALL
THROUGH. >> HAVRDA: I GUESS I'M GOING TO ASK SAWS DO YOU SEE A DIFFERENT WAY? I APPRECIATE YOUR COMMENTS EARLIER, ROBERT, BUT I'M NOT SUGGESTING WE ELIMINATE THE AVAILABILITY OF THE TOOL YOU SAID TO DISCONNECT, BUT WE WANT TO DO EVERYTHING WE CAN. WE HAVE AS MANY SAFEGUARDS FOR THE TENANTS. IN SO MANY CASES AND THE CASE THAT HAPPENED IN MY DISTRICT, IT WASN'T THE TENANTS NOT PAYING THEIR BILLS, IT WAS THE COMPLEX.
>> AND THEY HAVE STARTED PAYING THEIR BILLS RIGHT NOW AND HOPEFULLY THEY STAY OFF THE LIST. BUT WE'RE HERE TO GET ALL KINDS OF INFORMATION, SEE WHAT IS BEST THAT WE CAN RESOLVE THIS ISSUE. ULTIMATELY WHAT WE ARE
[01:35:05]
CONCERNED ABOUT IS THESE BAD ACTORS IF THEY DON'T PAY, ALL OF YOUR OTHER CONSTITUENTS HAVE TO MAKE THAT UP. THE THINGS LIKE PUTTING ON A LIEN, COUNCILMEMBER COURAGE, I'M GOING TO LOOK TO YOU FOR HELP IN GETTING THAT ORDINANCE PASSED BY CITY COUNCIL. AND THEN THAT WILL BE PART OF THE PRESENTATION THAT WE MAKE THAT WE WILL MAKE THAT ONE OF THE ITEMS THAT WE DO AFTER THREE MONTHS, FOUR MONTHS, WHATEVER IS THE RIGHT TIME TO DO.I APPRECIATE YOUR COMMENT YOU DON'T WANT TO TAKE THE ULTIMATE TOOL AWAY, BUT I DO WANT TO REMIND THIS COMMITTEE AND PEOPLE THAT MAY BE LISTENING IS THAT WHEN WE DID THIS, WE HAD ABOUT 35 APARTMENTS THAT WE STARTED WITH AND ULTIMATELY ONLY FOUR AFTER COMPLETED -- AFTER CONSISTENT NOTIFICATION OF THEM THROUGH EMAIL, THROUGH VISITS, THROUGH ALL KINDS OF COMMUNICATION, PHONE CALLS, ONLY FOUR WERE LEFT THAT WE WERE GOING TO DO THIS WITH. OF THOSE FOUR, ONLY ONE WAS OUT FOR AN HOUR AND 45 -- TWO HOURS AND 45 MINUTES. THAT'S IT.
YES, IT CAUSED A LOT OF ANGST, IT CAUSED A LOT OF CONFUSION OUT THERE.
THE CITY HAD TO FIGURE OUT WHAT THEY WERE GOING TO DO. BUT THIS WILL NOT BE A SITUATION WHERE PEOPLE WILL BE OUT OF WATER DAYS UPON DAYS UPON DAYS.
SOMETHING WILL HAPPEN. EITHER WE WILL TURN THE WATER BACK ON AFTER WE'VE GOTTEN THEIR ATTENTION OR THEY'VE MADE A PAYMENT, BUT WE ARE NOT GOING TO LET THE VICTIMS OF THE BAD PROPERTY OWNER SUFFER THE CONSEQUENCES OF NOT HAVING
WATER FOR AN EXTENDED PERIOD OF TIME. >> HAVRDA: I APPRECIATE THAT YOU PARED IT DOWN, BUT THERE WERE FOUR COMPLEXES AND ONE FOR ALMOST THREE HOURS AND THAT WAS THREE HOURS OF CHAOS AND ANGST. AT THE END OF THE DAY IT'S THE TENANTS DEALING WITH IT, NOT THE COMPLEXES AND EVERYBODY IS SCRAMBLING TO HELP THEM, BUT EVEN THAT IS NOT ACCEPTABLE. I STILL HAVEN'T HEARD A SOLUTION. HOW ARE WE PREVENTING IT FROM GETTING TO THE POINT WHERE THE COMPLEX IS DOING THAT? I DON'T THINK WE SHOULD GOING THE ROUTE OF MODIFYING THE ORDINANCE BUT WHAT HAS BEEN EFFECTIVE AND WORKING
IS NOW OPEN TO ALL KINDS OF CHANGES. >> WHAT HAS BEEN WORKING IS THE CONSTANT PRESSURE THAT WE PUT ON THEM. ONCE THEY GET TO THIS LEVEL, THEY HAVE ALREADY -- THEY ARE ALREADY BEHIND MULTIPLE MONTHS, THEY'VE ALREADY BROKEN PRIOR AGREEMENTS TO PAY. AND NONE ARE BEING ASKED TO PAY THEIR FULL AMOUNT, THEY ARE JUST BEING ASKED TO PAY HALF THEIR AMOUNT AND THE REST BEING PAID IN SOME KIND OF AGREEMENT. THE ONES ALSO THAT ARE BEING PUT ON THIS LIST ARE THE ONES THAT REFUSE TO TALK TO US.
ARE THE ONES THAT REFUSE TO ANSWER EMAILS, REFUSE TO TAKE PHONE CALLS, REFUSE TO BE COOPERATIVE WHEN WE GO OUT TO VISIT THEM AND TELL THEM THE SITUATION THEY ARE IN. THESE ARE TRULY THE WORST ACTORS OF ALL AND THAT'S WHY WE HAD TO ULTIMATELY DO WHAT WE DID. BUT I FULLY UNDERSTAND, AND THIS WAS COUNCILMEMBER MCKEE-RODRIGUEZ'S CONCERN ALSO IS THAT EVEN -- IN HIS DISTRICT WE DIDN'T TURN OFF ANY APARTMENTS, BUT WE DID PUT OUTDOOR HANGERS AND THERE WAS A LOT OF ANGST, A LOT OF WORRY, WHAT AM I GOING TO DO.
THEY DIDN'T KNOW THEY WERE GOING TO BE OUT OF WATER FOR ONE HOUR, ONE DAY OR ONE WEEK AND THEY PAID THEIR BILLS. YES, I'M AT A LOSS AS WHAT IS THE RIGHT THING TO DO AND WE'RE ACTIVELY LOOKING AT OTHER CITIES TO SEE WHAT THEY ARE DOING, BUT ACTUALLY THEY ARE ALSO LOOKING AT US BECAUSE WE ARE A LITTLE AHEAD OF THE GAME AS TO HOW SERIOUS WE'RE TAKING THIS. THIS IS SOMETHING THAT IS GENERATIONAL, HOPEFULLY ONCE IN OUR LIFETIME, IT'S BECAUSE OF COVID.
WE'VE ALWAYS HAD DELINQUENCIES. WE'LL WORK ON IT.
WE WILL TRY TO FIND A SOLUTION. >> HAVRDA: THANK YOU.
>> GARCIA: THANK YOU. COUNCILMEMBER WHYTE. >> WHYTE: THANKS, CHAIR.
SO I AGREE, I DON'T THINK WE SHOULD MESS WITH THE ORDINANCE AT THIS POINT.
YOU KNOW, OVERREGULATING IS SOMETHING I'M CONSISTENTLY AGAINST UNLESS WE ABSOLUTELY HAVE TO DO IT. THE IDEA OF A LIEN IS INTERESTING, BUT, AGAIN, DEVIL IS IN THE DETAILS. ARE WE GOING TO LIEN AN APARTMENT COMPLEX FOR FOUR OR FIVE THOUSAND DOLLARS THEY ARE BEHIND AND THEN THEY PAY IT OFF THE NEXT MONTHEN A THEN WE HAVE TO DO --E LIEN PAPERWORK AND WE'RE CREATING A LOT OF ADMINISTRATIVE WORK THERE. CHAIR, I WOULD LIKE TO SEE CITY STAFF COME BACK TO A
[01:40:06]
FUTURE MUC MEETING WITH A RECOMMENDATION. THAT'S WHERE I THINK WE SHOULD GO FROM HERE. BUT I'LL TELL YOU WHAT IT SOUNDS LIKE TO ME, THE SOLUTION NEEDS TO BE SOME SORT OF -- IT NEEDS TO INVOLVE SAWS.AND HOW, I'M NOT QUITE SURE YET. BUT WHEN MR. PUENTE WAS TALKING AND YOU TALKED GOOD THESE COMPLEXES THAT DON'T RESPOND TO EMAILS, CALLS, ET CETERA, ET CETERA, THOSE ARE REALLY THE BAD ACTORS THAT WE'RE LOOKING AT. PERHAPS THERE IS A WAY TO BUILD IN A PROCESS WHERE SAWS CAN DEMONSTRATE THAT THEY HAVE SENT THE LETTER, THEY HAVE SENT THE EMAILS, THEY HAVE MADE THE CALLS, AND THEN WHEN THAT LITTLE PACKET COMES OVER TO THE CITY AND WE SEE THAT, THEN MAYBE SOMETHING CAN BE DONE IN TERMS OF OKAY, WELL, THIS NEEDS TO BE A STRIKE OR TWO OR MORE TOWARDS THIS PROACTIVE ENFORCEMENT PROGRAM. I'M JUST THINKING OUT LOUD. BUT WHEN WE'RE THINKING ABOUT THESE PARTICULAR BAD ACTORS, SOMETHING ALONG THOSE LINES WHICH CAN OCCUR BEFORE DISCONNECTION IS WHAT WE'RE LOOKING TO DO. AND SO MAYBE THERE'S SOME SORT OF COORDINATION THAT WE CAN HAVE WITH SAWS WHERE YOU GUYS CAN SHOW US THAT THIS IS ONE OF THOSE BAD ACTORS, THERE IS THE THREAT FOR DISCONNECTION COMING AND
THEN WE CAN LOOK AT WHAT THAT LOOKS LIKE ON OUR END. >> AND ACTUALLY, IF I MAY, I WAS HOPING YOU WOULD CONTINUE WITH THE COMMENT, COUNCILMAN, WHEN YOU SAID THAT EVERYTHING WOULD BE BROUGHT TO COUNCIL AND Y'ALL WOULD LOOK AT IT, TO ACTUALLY HAVE SOMEWHAT OF A HEARING LIKE THIS BECAUSE EVEN THOUGH THE PRESS MIGHT NOT BE PHYSICALLY HERE, BUT THEY ARE WATCHING, THEY REPORT.
WHAT REALLY WORKED FOR US IS ALL THE OTHER COMPLEXES THAT SAW WE DID CUT FOUR APARTMENT COMPLEXES OFF, THEN THEY STARTED PAYING. THEY KNEW WE WERE SERIOUS.
IF THEY KNOW NOT ONLY SAWS IS SERIOUS BUT COUNCIL, I THINK WE COULD SEE SOME
BENEFITS OUT OF THAT. >> WHYTE: I HOPE, AGAIN, WE CAN -- CHAIR, IT'S CERTAINLY YOUR CALL. I HOPE WE CAN HAVE STAFF BACK AND WE CAN GET A RECOMMENDATION. AND MY HOPE IS THAT THE RECOMMENDATION CAN LOOK AT HAVING SAWS REALLY BE RESPONSIBLE FOR THIS OUTREACH AND THE COMMUNICATION WITH THESE APARTMENT COMPLEXES. AND THEN WHEN THEY CAN DEMONSTRATE TO OUR CITY STAFF THAT WE'VE GOT ONE OF THESE BAD ACTORS THAT IS NOT RESPONDING, THEN STAFF HAS THE AUTHORITY AT THAT POINT TO TAKE WHATEVER THE NEXT
STEP IS. >> SHANNON: THANK YOU FOR THAT FEEDBACK.
CERTAINLY THAT'S AN OPTION AND IF WE DO THAT AND WE'LL MULL ON THAT IF WE WANT TO BRING IT BACK. WHAT YOU ARE JUST DESCRIBING, THAT WOULD REQUIRE US TO GO INTO THAT SECTION OF THAT ORDINANCE. WE WOULD HAVE TO DEFINE -- WE WERE VERY CLEAR AS TO WHAT THOSE CODE VIOLATIONS WERE AND THAT WOULD BE A PRE-WATER DISCONNECT ACTION, TRIGGER, STRIKE, WHATEVER WE WANT TO CALL IT.
BUT WE CAN WALK THROUGH THAT, BUT THAT WOULD BE A CHANGE TO THAT ORDINANCE WE WOULD HAVE TO BRING FORWARD TO MAKE THAT PHYSICALLY HAPPEN.
>> WHYTE: OKAY. >> SHANNON: WE CAN TALK A LITTLE MORE ABOUT THAT, BUT THAT'S HOW I SEE IT RIGHT NOW AND WE WOULD HAVE TO FLESH THAT OUT.
>> WHYTE: AND I RECOGNIZE THERE'S A LITTLE BIT OF ATTENTION IN WHAT I'M SAYING BECAUSE I DON'T WANT TO HAVE TO AMEND THIS ORDINANCE UNLESS WE HAVE TO.
BUT WE DO WANT TO FIND A WAY TO HIT THESE BAD ACTORS WITH SOMETHING THAT WE DON'T GET TO THE DISCONNECTION PHASE. I THINK THAT'S THE CHALLENGE FOR YOU, MIKE, BUT WHO
BETTER TO FIGURE OUT HOW TO DO SO THAT THAN YOU? >>
>> GARCIA: SO ARCH YOU FIGURE OUT THE METAL -- AFTER YOU FIGURE OUT THE
METAL RECYCLEERS. COUNCILMEMBER COURAGE. >> COURAGE: I WOULD LIKE TO REITERATE AGAIN LOOKING AT THE LEGAL PROCESS AND I WOULD SUGGEST THE LEGAL TEAM FROM SAWS AND THE LEGAL TEAM FROM THE CITY LOOK AT HOW A LIEN PROCESS COULD BE IMPLEMENTED SOMEWHERE IN BETWEEN THE FIRST MONTH AND THE SIXTH MONTH WHEN THEY START TAKING SOME KIND OF AN ACTION TO PROVIDE PRESSURE, TO GIVE SAWS AND THE CITY
[01:45:05]
LEVERAGE ON THESE PROPERTY OWNERS TO TAKE SOME IMMEDIATE ACTION.AND THE ACTION DOESN'T HAVE TO BE, AS YOU'VE SAID, PAY OFF THE WHOLE BILL, BUT ENTER INTO AN AGREEMENT TO START TO REPAY WHAT WAS BEHIND AND A COMMITMENT TO CONTINUE TO PAY THE BILLS AS THEY COME DUE. AND I THINK THAT THAT IS SOMETHING THAT WE COULD PUT TOGETHER THAT WOULD INCLUDE -- I KNOW THE CERTIFICATION THAT THE STEPS HAVE BEEN TAKEN, THAT'S EASY.
COPIES OF EMAILS, CERTIFIED MAIL SENT TO THE PROPERTY OWNER LET THEM KNOW THAT THE --A LIEN COULD BE PUT IN PLACE OR THEY ARE BEHIND, WHATEVER.
A LITTLE MORE EXPENSE, YES, BUT IF WE CAN COLLECT $2.5 MILLION MORE OR PREVENT ANOTHER 2.5 FROM BEING OWED, THEN I THINK THAT ADDITIONAL EXPENSE WOULD BE WORTHWHILE.
I WOULD LIKE TO SEE THE TWO LEGAL TEAMS SIT DOWN AND SAY HOW CAN WE PUT TOGETHER A LIEN PROCESS THAT WOULD BE INCLUDED SOMEWHERE IN BETWEEN WHAT WE'RE DOING NOW TO PREVENT THESE SITUATIONS FROM GROWING AND BECOMING MORE EXPENSIVE AND MORE SERIOUS. WHEN WE TALK ABOUT THE INSPECTION PROGRAM, YES, WHEN THE WATER IS NOT WORKING, THAT WAS PART OF THE PROGRAM, BUT IT WAS REALLY BASED ON WELL, IF THE PLUMBING BREAKS AND THE OWNER IS NOT DOING ANYTHING.
THIS IS DIFFERENT FROM THAT. THIS IS WHERE THE OWNERS COMPLETELY IGNORING THEIR FINANCIAL RESPONSIBILITY FOR THE ENTIRE COMPLEX. AND SO I DON'T THINK WE NEED TO ADD THIS TO THAT ORDINANCE RIGHT NOW. I THINK WE NEED TO LOOK AT THIS OTHER TOOL AND MAYBE SO OTHERS THE STAFF CAN COME UP WITH FOR US TO CONSIDER.
I'D LIKE TO SEE THEM COME BACK NEXT MONTH AT OUR NEXT MEETING OR IF THEY THINK IT TAKES 60 DAYS, A COUPLE MONTHS TO COME UP WITH THIS, THEN THAT'S WHAT I WOULD
LIKE TO SEE. THANKS, CHAIR. >> GARCIA: THANK YOU, COUNCILMEMBER COURAGE. I DON'T REMEMBER WHICH ATTORNEY WAS IN THE ROOM WHEN I ASKED ABOUT LIENS IN JUNE AND I JUST WANTED TO SEE IF THAT EVER WAS FOLLOWED UP ON. BECAUSE I KNOW THAT WAS ONE OF THE MECHANISMS THAT -- AND I SEE SOMEBODY WANTS TO TAKE A STAB AT IT ALREADY. GO AHEAD, EDWARD.
>> JUST TO SORT OF FOLLOW UP AND TO COUNCILMEMBER COURAGE'S COMMENT, WE HAVE BEEN DISCUSSING WHAT'S NECESSARY TO GET LIENS AS A TOOL FOR SAWS WITH THE CITY ATTORNEY'S OFFICE. THAT DISCUSSION HAS BEEN ONGOING SINCE OUR MEETINGS LAST SUMMER. SO I THINK IT'S A MATTER OF WORKING OUT DETAILS AND TIMING AND FIGURING OUT WHERE IN THE PROCESS THAT WOULD FIT IN.
SO THAT IS SOMETHING THAT HAS BEEN DISCUSSED. >> SEGOVIA: IF I MIGHT ADD, YES, WE HAVE BEEN DISCUSSING THAT, BUT ULTIMATELY IF WE HAVE A RECOMMENDATION ON THE LIEN PROGRAM, WE WOULD HAVE TO WORK CLOSELY WITH BEN'S OFFICE AND SAWS BECAUSE YOU WILL HAVE TO ADDRESS HOW EFFECTIVELY THAT WOULD
ADDRESS LATE OR NO PAYMENTS. >> CHAIR, I THINK ANDY SUMMED IT UP WELL.
AS ROBERT KIND OF EXPLAINED, YOU GOT A MASTER METER WHERE THE OWNER OF THE PROPERTY IS SUPPOSED TO BE PAYING THE WATER BILL, THE TENANTS ARE -- AND YOU ARE GETTING INTO THE SITUATION YOU GOT DOWN TO FOUR, I DON'T KNOW, WE COULD LOOK AT IT.
I DON'T KNOW IF ADDING THE LIEN INTO THAT PROCESS IS GOING TO MOTIVATE ANYMORE BECAUSE AT THE END OF THE DAY THE LIEN IS NOT GOING TO COMPEL A FORECLOSURE.
IT'S A LITTLE DIFFERENT, IT'S JUST GOING TO BE A LIEN ON THE PROPERTY.
WE'RE GOING TO HAVE TO MANAGE THAT AND THE COST BENEFIT OF DOING THAT.
WE CAN LOOK AND COME BACK TO FUTURE MUC MEETING AND HAVE MORE CONVERSATION AND GET FEEDBACK. IT WAS ASKED EARLIER WHAT'S THE -- HOW DO WE FIX THIS.
I DON'T THINK THIS ONE HAS AN EASY ANSWER. I THINK IN SOME CASES PEOPLE ARE GOING TO CHOOSE NOT TO PAY UP UNTIL, UNFORTUNATELY, THE WATER GETS TURNED OFF.
I THINK THAT FROM LAST SUMMER TO CURRENT TIME CERTAINLY FROM WHERE WE ARE TODAY, THAT PROCESS HAS CHANGED IMMENSELY. THERE'S A LOT OF COORDINATION GOING ON BETWEEN SAWS AND THE CITY AND OUTREACH AND MAKING SURE IF WE GET TO THAT POINT, THERE'S GOING TO BE NOBODY SURPRISED.
SAWS IS GOING TO HAVE GONE THROUGH MULTIPLE LEVELS OF CONTACT, REACHING OUT TO THE OWNERS TRYING TO GET THEM TO RESPOND. AS ROBERT SAID, IT'S NOT ABOUT YOU GOT TO PAY THE FULL BILL. HE'S LOOKING FOR SOME
[01:50:02]
MOVEMENT, HALF THE BILL, GET ON A PAYMENT PLAN, SHOW US YOU ARE GOING TO DO THAT.AND THEN THE COORDINATION WITH OUR NEIGHBORHOOD HOUSING AND SERVICES DEPARTMENT TO MAKE SURE WE'RE OUTREACHING TO TENANTS THAT WE'RE PROVIDING RESOURCES WHERE WE CAN AND COORDINATING WITH SAWS. I THINK THE PROCESS HAS GOTTEN A LOT BETTER. WE CAN GO BACK AND TRY IF THE COMMITTEE WANTS US TO LOOK AT SOME ADDITIONAL OPTIONS AND HAVE ADDITIONAL CONVERSATION IN PROBABLY A MONTH OR TWO IF THAT'S SOMETHING YOU WANT US TO BRING BACK.
>> GARCIA: DEFINITELY, AND COUNCILMEMBER WHYTE HAD A GOOD POINT ON COSTS.
>> WHYTE: I DON'T KNOW THAT I CAN SAY IT BETTER THAN YOU JUST SAID IT, BEN, AND THAT IS MY CONCERN ABOUT THE LIEN PROGRAM. IS HOW EFFECTIVE IS THAT REALLY GOING TO BE, RIGHT? THESE LETTERS GET SENT. IF WE PUT A LIEN ON THEN, THINGS GET PAID 60 DAYS, WE'VE GOT TO RELEASE -- I DON'T KNOW WHAT WE'RE DOING THERE, BUT IT'S AN INTERESTING IDEA AT LEAST TO CONSIDER.
MY QUESTION IS -- BECAUSE YOU ARE RIGHT AND I SEE THIS IN THE LAW ALL THE TIME.
PEOPLE DON'T ACT UNTIL THEY ABSOLUTELY HAVE TO. IT'S UNTIL THEY GET THAT DEMAND LETTER FROM A LAWYER OR IT'S UNTIL THE LAWSUIT IS FILED, THEN THEY PAY WHAT THEY OWE. IT'S JUST -- THAT'S JUST PART OF HUMAN NATURE AND HOW SOME PEOPLE DO BUSINESS, I GUESS. MY QUESTION IS WHEN THE WATER DOES GET SHUT OFF, AT THAT POINT -- WHAT HAPPENS THEN? BECAUSE I THINK -- WHAT ARE THE PENALTIES THERE? IF THEN THEY PAY, THE WATER
COMES BACK ON, RIGHT? >> WELL, WHAT HAPPENEDNE IN THESE CIRCUMSTANCES, WE TURNED IT OFF AND THEY PAID AND WE TURNED IT BACK ON, WITHIN 15 MINUTES.
AND THEY PAID THE AMOUNT WE ASKED WHICH WAS ABOUT HALF. >> WHYTE: I DON'T KNOW WHAT THE PENALTIES ARE RIGHT NOW, BUT I THINK THE PENALTIES NEED TO BE SO SEVERE FOR ONE OF THESE APARTMENT COMPLEXES THAT HAS THE WATER SHUT OFF THAT IT MAKES IT THAT MUCH MORE UNLIKELY THAT THEY WOULD EVER LET IT GET TO THAT POINT. SO, YOU KNOW, WATER GOES BACK ON 15 MINUTES LATER AND THEN WHAT, THE COMPLEX DOESN'T HAVE TO THINK ABOUT IT UNTIL THE NEXT TIME? THAT TO ME CAN'T BE GOOD ENOUGH. THAT NEEDS TO AUTOMATICALLY OBVIOUSLY PUT THEM IN THE PROACTIVE PROGRAM. I THINK THERE NEEDS TO BE SOME SORT OF FINES INVOLVED. YOU KNOW, WHATEVER IT IS, IT NEEDS TO BE HARSHER THAN THE
WATER JUST GOES BACK ON AFTER THEY PAY. >> THE ONLY THING IS TYPICAL
LATE FEE THAT THEY WOULD BE PAYING. >> WHYTE: WHICH IS ABOUT
WHAT? >> AGAIN, IT'S THE LATE FEE PLUS THE ACTUAL REINSTATEMENT FEE. SO IT'S IN AND AROUND 400, $500 DEPENDING ON SIZE OF THE METER. MOST OF THE ONES THAT HAPPENED IN JUNE, THEIR BALANCES WERE OVER $100,000. I UNDERSTAND ADDING AN ADDITIONAL PENALTY, THAT
WOULD HAVE BEEN ADDED TOD THEIR BALANCE. >> WHYTE: MAYBE ONE OF THE THINGS WE CAN THINK ABOUT IS WHAT ELSE WE CAN DO TO PENALIZE ONE OF THESE COMPLEXES THAT GETS TO THE STAGE WHERE THE WATER ACTUALLY GETS CUT OFF.
BECAUSE IT JUST SEEMS CRAZY TO ME THAT THE ONLY PENALTY IS THEY HAVE TO PAY WHAT THEY ALREADY OWE AND THEY GET A SMALL FINE. THERE'S GOT TO BE -- THERE'S GOT TO BE SOMETHING ELSE THAT WE CAN DO TO SAY THIS IS GOING TO BE REALLY, REALLY BAD FOR YOU IF IT EVER GETS TO THIS POINT. THAT'S ALL I GOT.
>> GARCIA: THANK YOU, COUNCILMAN. SO YEAH, ALMOST LIKE A REPEAT OFFENDERS LIST OF SOME SORT. BUT MIKE SHANNON CAN HELP US THINK ABOUT THAT FOR THE NEXT GO-AROUND. BEN, ARE YOU COMFORTABLE WITH ONE MONTH? CAN YOU ALL HAVE SOMETHING BACK IN A MONTH?
>> SCHEDULE FOR THE NEXT MUC MEETING. WE'LL UPDATE THE COMMITTEE
AT OUR NEXT MEETING. >> GARCIA: THANK YOU SO MUCH.
I KNOW IT'S ONLY I DON'T REMEMBER OUTLIERS. IT'S VERY LIMITED.
AGAIN, WE REALLY WANT TO BE PROACTIVE HERE. THANK YOU TO MY COLLEAGUES FOR THE GREAT DISCUSSION. I APPRECIATE YOU ALL AND WE'LL COME BACK NEXT MONTH WITH SOME RECOMMENDATIONS. THANK YOU TO SAWS AND CITY ATTORNEY'S OFFICE AND DSD, EVERYBODY INVOLVED. THANK YOU SO MUCH. THE TIME IS NOW 11:54 AND THE MEETING IS ADJOURNED. THANK YOU.
* This transcript was compiled from uncorrected Closed Captioning.