[00:00:53]
          >> MAYOR JONES: GOOD AFTERNOON. THE TIME IS NOW 20 FIEM P.M. ON FEBRUARY 4TH, 2026. THE SAN ANTONIO CITY COUNCIL B SESSION IS NOW CALLED TO ORDER. MADAM CLERK, PLEASE CALL 
          ROLL. >> CLERK: 
          >> MAYOR JONES: GREAT. THANKS, MADAM CLERK. THIS AFTERNOON WE'LL HEAR FROM THE SAN ANTONIO WATER SYSTEM, AND I UNDERSTAND WE HAVE SOME BOARD MEMBERS HERE AS WELL. AS WE KNOW, YOU KNOW, THE ABILITY TO OWN OUR UTILITIES IS A STRATEGIC ADVANTAGE. 
          WE ALSO HAVE THE RESPONSIBILITY TO ENSURE THAT WE HAVE UTILITIES THAT ARE MEETING THE DEMAND, NOT ONLY TODAY AND INTO THE FUTURE. 
          THIS IS A TIMELY DISCUSSION, AS YOU WILL HEAR, GIVEN THE LARGE NUMBER OF CAPITAL PROJECTS THAT NEED TO BE ADDRESSED TO ENSURE THAT WE ARE PROVIDING THAT SERVICE TO THE COMMUNITY AND REMAINING ECONOMICALLY COMPETITIVE. BUT WE ALSO RECOGNIZE UNFORTUNATELY, THE ECONOMIC ENVIRONMENT WHERE WE WILL SEE, FOR EXAMPLE, THE IMPLEMENTATION OF THE ONE BIG BEAUTIFUL BILL, CUTS TO MEDICAID/MEDICARE, CHIP AND SNAP. SO WE ARE COGNIZANT OF ANY RATE INCREASE EITHER BY THIS UTILITY OR BY CPS THAT WOULD IMPACT THE MOST VULNERABLE AND OF COURSE WE LOOK AT EACH OF THESE -- THE PRESENTATION TODAY THROUGH THAT LENS. OKAY. ERIK, OVER TO YOU TO GET 
          US STARTED. THANK YOU. >> WALSH: THANK YOU, MAYOR. GOOD AFTERNOON, MAYOR AND COUNCIL. 
          SO AS THE MAYOR LAID OUT, SAWS HAS BEEN GOING THROUGH THEIR OWN DISCUSSIONS IN ADVANCE OF COUNCIL DISCUSSION REGARDING THEIR 2026 BUDGET AND POTENTIAL IMPACT ON SAWS RATES. YESTERDAY THE SAWS STAFF -- SAWS BOARD HAD A MEETING AND -- IN RESPONSE TO A NUMBER OF THE ISSUES THAT THERE ARE QUESTIONS THAT THE BOARD HAD FROM THEIR JANUARY MEETING. AND TODAY'S MEETING IS REALLY -- IT'S A LONG PRESENTATION, BUT FULL OF A LOT OF IMPORTANT INFORMATION. 
          AND THEY'LL PRESENT AND LAY OUT TO YOU ALL THE 2026 BUDGET AMENDMENT AND POTENTIAL RATE IMPACTS, AND THEY'VE ALSO INCORPORATED WITHIN THE PRESENTATION RESPONSES TO THE MEMORANDUM THAT WERE SUBMITTED BY COUNCILMEMBERS GAVITO, SPEARS AND WHYTE. THE SAWS BOARD IS STILL IN THEIR GATHERING INPUT PHASE, AND I THINK THAT'S ONE OF THE REASONS WHY THE -- MANY OF THE BOARD MEMBERS ARE HERE TODAY. WITH THAT, I'M GOING TO TURN IT OVER TO JALIN JAMESON, THE CHAIR, TO START US OFF. 
          >> GOOD AFTERNOON. I'M JALIN JAMESON AND I WANT TO OPEN BY THANKING YOU THE OPPORTUNITY TO BE HERE TODAY, BUT I'D FIRST LIKE TO THANK COUNCILWOMAN CASTILLO FOR COMING TO THE BOARD MEETING ON YESTERDAY. 
          WE WERE ABLE TO APPROVE TWO PILOTS, PILOT PLUMBERS TO PEOPLE AND OUR SEWER LATERAL PROGRAM, TO HELP CUSTOMERS WITH MUCH-NEEDED LATERAL AND SEWER SUPPORT FOR THEIR HOMES. 
          SO THANK YOU FOR BEING WITH US ON YESTERDAY. WE LOOK FORWARD TO THE SUCCESSFUL IMPLEMENTATION OF BOTH OF THOSE PROGRAMS. AND, OF COURSE -- BOARD OF TRUSTEES. OUR VICE CHAIR, ED BELMARES IS HERE, OUR SECRETARY OF THE BOARD, MARY LOU REYNA, BOARD MEMBERS GREGMAN, TERESA RODRIGUEZ, TRUSTEE ADRIANA ROCHA GARCIA COULD NOT BE WITH US TODAY, AND, OF COURSE, OUR MAYOR IS ALSO ON OUR BOARD OF TRUSTEES, SO THEY'RE ALL HERE TO HEAR THE QUESTIONS AND CONCERNS FROM ALL OF YOU, ALONG WITH US IS OUR CEO, MR. PUENTE, HE IS HERE, BUT NOT MOVING VERY QUICKLY. HE HAD KNEE REPLACEMENT SURGERY EARLY THIS WEEK, 
          [00:05:03]
SO WE'RE GOING TO ALLOW HIM TO SIT AND LISTEN AND IF WE HAVE TO BRING AN OCCASIONAL MIC OVER THERE, WE WILL. BUT I THINK HE COULD PROBABLY PROJECT. ALSO JOINING ME THIS AFTERNOON IS OUR CHIEF FINANCIAL OFFICER DOUG EVAN SON AND ANDREA MIMAN, OUR CHIEF OPERATING OFFICER. THOSE TWO WILL PRIMARILY BE PRESENTING TO YOU THIS AFTERNOON. AND WE HAVE OTHER MEMBERS OF THE STAFF HERE AS WELL. I ASKED THE BOARD OF TRUSTEES TO JOIN ME TODAY SO THAT WE COULD HEAR COLLECTIVELY THE INPUT FROM THE CITY COUNCIL. 
          ADDITIONALLY, I WANTED TO TAKE THIS OPPORTUNITY TO SHARE WITH YOU THE ACCOUNTABILITY MEASURES AND THE TRANSPARENCY MEASURES THAT WE UNDERTAKES A APPOINTED MEMBERS TO THE SAWS BOARD FOR THE OPERATIONAL AND FINANCIAL SUSTAINABILITY OF SAWS. IN THE AREA OF ACCOUNTABILITY, THE BOARD OF TRUSTEES HAS TWO COMMITTEES. 
          THE FIRST IS THE MISSION EXCELLENCE AND ALIGNMENT COMMITTEE, WHICH IDENTIFIES STRATEGIC FOCUSED AREAS TO MEASURE AND MONITOR, AS WELL AS CEO COMPENSATION AND ADMINISTRATION OF THE ANNUAL PERFORMANCE PLAN. 
          THAT COMMITEE IS CHAIRED BY YOURS TRULY. THE SECOND BOARD COMMITTEE IS OUR AUDIT COMMITTEE, AND IT IS CHAIRED BY OUR SECRETARY OF THE BOARD, MARY LOU REYNA. THE CEO SCORE CARD HAS THREE SECTIONS. WE HAVE FINANCIAL GATING METRICS WHICH INCLUDE THE SENIOR BOND RATING, DAYS CASH ON HAND AND DEBT COVERAGE. 
          ADDITIONALLY, WE IDENTIFY 10 TIER 1 METRICS WORTH 65% OF THE SCORE CARD. 
          THEY ARE PRESENTED ON THE SLIDE, AND I KNOW IT MAY BE HARD TO READ. 
          I HAVE THEM INDIVIDUALLY, SHOULD YOU HAVE ANY QUESTIONS. 
          THE ADDITIONAL SECTION OF THE SCORE CARD IS WORTH 25%, AND THEY ARE DEDICATED TO FIVE KEY INITIATIVES, WHICH INCLUDES RESILIENCY, RELIANCE AND READINESS, SUSTAINABLE BUSINESS DEVELOPMENT, SAFETY CULTURE, WATER STEWARDSHIP AND CUSTOMER EXPERIENCE AND DATA MANAGEMENT. AND ANOTHER 10% OF THE SCORE CARD IS RESERVED FOR A LEADERSHIP ASSESSMENT CONDUCTED BY THE BOARD OF TRUSTEES. 
          THE CEO IS EVALUATED ON A YEARLY BASIS. THE METRICS ARE VALIDATED BY AN OUTSIDE CONSULTANT. PRESENTLY THAT CONSULTANT IS WILLIAMS CONSULTING, WHICH IS USED TO GUIDE THE COMMITTEE IN OUR BENCHMARKING EXERCISES AND YEAR OVER YEAR PERFORMANCE FOR EACH OF THE BUSINESS UNITS AND TIER 1 METRICS. IF THE GATING M METRICS ARE NOT MET, NO ONE PARTICIPATES IN PERFORMANCE REWARDS. 
          ALL OF THE SCORING IS VALIDATED BY AN OUTSIDE CONSULTANT IN THE MARCH/APRIL TIME FRAME, SO WE ARE BEGINNING THAT PROCESS FOR OUR 2025 PERFORMANCE PERIOD, AND THE PERFORMANCE SCORES ARE THEN CALCULATED AND THE PERFORMANCE AWARD IS DEPOSITED INTO A PERFORMANCE RECOGNITION PLAN FOR THE CEO, WHICH IS A NONQUALIFIED TAX DEFERRED ACCOUNT, AND MANAGED BY THE BOARD OF TRUSTEES UNTIL THE VESTING REQUIREMENTS ARE MET BY THE CEO. THE OVERALL STAFF HAS 10% OF ITS ANNUAL SCORE CARD TIED TO CEO PERFORMANCE. MUCH OF THIS WORK IS DEVELOPED AND MONITORED BY THE MISSION EXCELLENCE AND ALIGNMENT COMMITTEE. THE CONSULTANT CONTRACT THAT I MENTIONED, WILLS CONSULTING, -- WILLIAMS CONSULTING HAS RECENTLY BEEN EXPANDED TO INCLUDE THE AREAS IN NEED OF FURTHER EVALUATION OR REVIEW. THE AREAS OF CONCERN CAN EITHER BE RECOMMENDED BY THE AUDIT COMMITTEE AS A RESULT OF ONE OF THE INTERNAL REVIEWS CONDUCTED BY OUR INTERNAL AUDIT TEAM, OR IT CAN BE AN AREA DETERMINED BY THE MISSION ALIGNMENT COMMITTEE THAT NEEDS FURTHER REVIEW. 
          THE FIRST ENGAGEMENT THAT THIS CONSULTANT WILL TAKE ON WILL BE TO ANALYZE THE EFFICACY AND EFFICIENCY OF THE RECENTLY APPROVED MOU WITH THE CITY OF SAN ANTONIO FOR CAPITAL PROJECT DELIVERY. THE AUDIT COMMITTEE CHAIRED BY THE SECRETARY OF THE BOARD, IS TRUSTY REYNA, THAT BOARD PROVIDES OVERSIGHT OF THE ANNUAL AUDIT AND THE RISK REVIEW PROCESS CONDUCTED BY SAWS STAFF. THE COMMITTEE RECENTLY HAD ITS FIRST MEETING FOR FISCAL YEAR 2026, AND IN THE COMING MONTHS THE BOARD OF TRUSTEES IS EXPECTED TO CONSIDER THE 2026 AUDIT WORK PLAN, WHICH WILL IDENTIFY IN ALIGNMENT WITH STRATEGIC FOCUS AREAS, AS WELL AS ELEVATED RISK INITIATIVES TO REVIEW FOR THE 2026 PERFORMANCE YEAR. I'M GOING TO TRANSITION A BIT AND TALK A LITTLE BIT ABOUT OUR BENCHMARKING ACTIVITY. 
          HI PERFORMING WATER UTILITIES  ARE RECOGNIZED FOR DATA-DRIVEN DECISIONS, SUSTAINABILITY AND RESILIENCE, MANAGING RESOURCES WITH A FOCUS ON CONSERVATION AND DROUGHT PREPAREDNESS, PROACTIVE INFRASTRUCTURE INVESTMENT ADDRESSING AGING INTO REDUCE WATER LOSS AND SYSTEM FAILURES AND STRONG FISCAL MANAGEMENT BALANCING CAPITAL INVESTMENTS WITH 
          [00:10:04]
SUSTAINABLE RATE STRUCTURES. SAWS USES DATA FROM THE AMERICAN WATER WORKS ASSOCIATION TO EVALUATE KEY BUSINESS AREAS AND MEASURE AND COMPARE THE ORGANIZATION'S PERFORMANCE. 
          IT IS A NATIONWIDE SURVEY OF CORE WATER UTILITY SERVICES. 
          HERE'S A SAMPLING OF THE PARTICIPATING UTILITIES. THE SURVEY COVERS WATER AND WASTEWATER STATISTICS, WATER PRODUCTION AND DISRUPTIONS, METER INFRASTRUCTURE, AFFORDABILITY MEASURES, OUR UPLIFT PROGRAM CONTINUES TO BE A MODEL ACROSS THE COUNTRY, WATER SOURCING AND STAFFING TRENDS. WHILE THE SURVEY RESULTS ARE COMPOSITE RESULTS, THEY ARE NOT INDIVIDUAL UTILITY PERFORMANCE. 
          IT IS STILL USEFUL TO THE STAFF FOR COMPARISON. THE INFORMATION TODAY THAT WE'RE PROVIDING IS JUST AN EXAMPLE OF HOW SAWS' RATES, AMONG UTILITIES, WITH MORE THAN 500,000 CONNECTIONS. SO YOU CAN SEE THESE ARE THE RESULTS THAT WE PULLED FROM THE AMERICAN WATER WORKS ASSOCIATION. 
          WE KNOW THAT WE HAVE MUCH WORK TO DO WITH THE STAFF IN TERMS OF BENCHMARKING FOR MORE DIRECT UTILITY INFORMATION, UTILITIES THAT LOOK A LOT LIKE OUR SAWS UTILITY. BUT I WANTED TO SHARE THIS BENCHMARKING INFORMATION WITH YOU THIS AFTERNOON. I'M GOING TO TURN OVER SOME SLIDES -- TURN OVER THE PRESENTATION TO DOUG EVANSON, HE WILL SHARE OUR RATE STRUCTURE, OUR OPERATIONAL CHALLENGES THAT WE'VE EXPERIENCED SINCE 2020, A FINANCIAL OVERVIEW OF THE RECENTLY UPDATED COST OF SERVICE STUDY IDENTIFYING THE REVENUE REQUIRED FOR OUR SYSTEM TO CONTINUE TO SERVE OUR CUSTOMER BASE. THAT FINANCIAL REVIEW WILL INCLUDE CUSTOMER BILL PROJECTIONS AND CONSUMPTION AND OPERATING EXPENSES. 
          AFTER DOUG FINISHES, ANDREA BEAMER WILL PROVIDE AN OVERVIEW  OF THE PLANNING AND PRIORITIZATION PROCESSES FOR OUR WATER AND WASTEWATER SYSTEM, AND SHE WILL THEN FORECAST THE CAPITAL NECESSARY TO AVOID SYSTEM FAILURES. AND FINALLY, WE WILL ALL BE HERE SEEKING CITY COUNCIL FEEDBACK AND INPUT SO THAT THE STAFF CAN USE THIS INFORMATION TO MAKE AN INFORMED RECOMMENDATION FOR AN AMENDED BUDGET FOR 2026 AND A RATE PLAN TO ADDRESS THE SYSTEM OPERATIONAL AND CAPITAL NEEDS. THE BOARD OF TRUSTEES REQUESTS THIS FEEDBACK, SO WE CAN MAKE INFORMED DECISIONS AS WE CONSIDER THIS RECOMMENDATION BEFORE IT IS PRESENTED TO YOU AND CITY STAFF FOR FINAL CONSIDERATION. 
          AND WE'RE CERTAINLY HERE TO ANSWER YOUR QUESTIONS. 
          DOUG? >> OKAY. THANK YOU, JALIN. 
          AND GOOD AFTERNOON TO ALL OF YOU. MY NAME IS DOUG EVERSON, AND I HAVE BEEN THE CFO AT SAWS NOW FOR ALMOST 21 YEARS. 
          GIVEN THAT LONGEVITY, AND I GUESS THAT'S A PLEASANT WAY OF SAYING I'M GETTING KIND OF OLD, I WOULD LIKE TO PROVIDE EACH OF YOU SOME HISTORICAL PERSPECTIVE ON SAWS' RATE HISTORY AS WELL AS TO BEGIN TO DISCUSS SOME CURRENT CHALLENGES THAT WE FACE WHICH ARE LIKELY TO HAVE CUSTOMER BILL IMPACTS IN THE NEAR FUTURE. BEFORE WE BEGIN TALKING ABOUT 2026 AND BEYOND, I WANT TO TAKE YOU BACK A LITTLE MORE THAN A DECADE AGO WHEN SAWS SOUGHT TO AND CITY COUNCIL THANKFULLY UNANIMOUSLY APPROVED THE ENTRY INTO A WATER TRANSMISSION AND PURCHASE AGREEMENT FOR THE VISTA RIDGE WATER SUPPLY PROJECT. A YEAR LATER IN 2015, IN ORDER TO ACHIEVE FINANCIAL CLOSE ON THIS PROJECT, WE CAME BACK IN FRONT OF COUNCIL SEEKING THE RATE SUPPORT NEEDED TO ACHIEVE THAT FINANCIAL CLOSE ON THIS MORE THAN $1 BILLION CONTRACT. AS YOU CAN SEE ON THE SLIDE REPRODUCED HERE FROM 2015 ON THE LEFT-HAND SIDE, AT THAT TIME SAWS SOUGHT AND COUNCIL ONCE AGAIN SUPPORTED APPROVAL FOR FIVE YEARS WORTH OF WATER SUPPLY FEE INCREASES WITH THE FIRST 2016 INCREASE SHOWN IN GREEN BEING A PERCENTAGE CERTAIN AMOUNT, WITH THE SUBSEQUENT YEARS ADJUSTMENTS FOR 2017 TO 2020 SHOWN IN PURPLE BEING UP 2 RATE PERCENTAGE INCREASES SUBJECT TO REVIEW AND APPROVAL BY THE CITY'S PUBLIC UTILITIES OFFICE OVERSEEN BY BEN GORZELL. 
          AT THAT TIME, IN ADDITION TO THE WATER SUPPLY ADJUSTMENTS, SAWS ALSO RECEIVED APPROVAL FOR TWO YEARS WORTH OF WASTEWATER AND WATER DELIVERY RATE ADJUSTMENTS WITH THE 2016 AMOUNT AGAIN BEING A PERCENTAGE CERTAIN INCREASE WHILE THE 2017 WAS AGAIN AN UP TO PERCENTAGE INCREASE SUBJECT TO REVIEW. THE SLIDE ON THE RIGHT THEN SHOWS THE SUBSEQUENT RATE ADJUSTMENT REQUESTS WHICH WAS BROUGHT FORTH TWO YEARS LATER, SO IN 
          [00:15:01]
2017, WE BROUGHT THIS FORWARD. AND WE REDUCED THE REQUESTED LEVEL OF WATER SUPPLY FEE INCREASES FOR BOTH 2018 AND '19, WHILE ALSO SEEKING OUT ADDITIONAL WATER DELIVERY AND WASTEWATER INCREASES. THESE INCREASES FOR WATER DELIVERY AND WASTEWATER WERE THE LAST INCREASES REQUESTED FOR THESE TWO UNITS, SO WE HAVEN'T REQUESTED A WATER DELIVERY AND/OR WASTEWATER INCREASE SINCE 2019. JUST TO CLOSE OUT THIS SLIDE, SAWS DID IMPLEMENT THE FINAL 9.9% INCREASE ASSOCIATED WITH THE VISTA RIDGE PROJECT WHICH CAME ONLINE, AGAIN, MID 2020. AS NOTED, THIS PROJECT WAS AND STILL IS THE LARGEST NONEDWARDS SOURCE OF WATER SUPPLY AND HAS REALLY BEEN KEY IN COPING WITH THE EFFECT TION OF THIS RECORD-SETTING DROUGHT THAT WE FIND OURSELVES IN, WHICH WE ARE CURRENTLY IN AND WHICH IS NOW ENTERING ITS SEVENTH YEAR. WHILE NOT HAVING HAD A RATE INCREASE FOR THE AVERAGE RESIDENTIAL CUSTOMER SINCE 2020, SAWS DID, IN FACT, IMPLEMENT A CHANGE IN ITS RATE STRUCTURE WHICH SERVED TO REDUCE THE COST OF OUR AVERAGE RESIDENTIAL BILL EFFECTIVE JANUARY 1, 2023, WHEN WE WERE FINALLY ABLE TO COMPLETE THE COST OF SERVICE AND RATE STUDY ANALYSIS THAT HAD BEEN INTERRUPTED BY COVID-19. WITH AFTERNOON PROVE L OF THE RECOMMENDED  RATE STRUCTURE WHICH SHIFTED MORE COST TO BUSINESSES AND HIGH-USE RESIDENTIAL CUSTOMERS, THE SAWS BILL FOR THE AVERAGE RESIDENTIAL CUSTOMER DECLINED FROM $66.68 TO $60.88, A REDUCTION OF $5.80 OR ALMOST 9%. SIMULTANEOUSLY, SAWS IMPLEMENTED A NEW UP LIFT ASSISTANT RATE STRUCTURE WHICH SAW THE AVERAGE UPLIFT CUSTOMER'S BILL DECLINE BY A MINIMUM OF 40%. SO WHAT ELSE HAS HAPPENED WHICH HAS IMPACTED SAWS AND ALL OF US IN THE MORE THAN SIX-YEAR PERIOD BEGINNING IN JANUARY 2020 AND CARRYING THROUGH TO TODAY? THE AFOREMENTION COVID-19 IMPACTED OBVIOUSLY THE DAILY LIVES OF EACH AND EVERY ONE OF US IN A NUMBER OF WAYS. IN ORDER TO GET THROUGH THIS VERY CHALLENGING PERIOD, SAWS ATTEMPTED TO DO ITS PART BY SUSPENDING ALL SERVICE DISCONNECTIONS DUE IN LARGE PART TO THE INCREASE IN SAWS UNCOLLECTIBLE ACCOUNT BALANCES RESULTING FROM THIS PRACTICE, THIS EVENT COST SAWS MORE THAN $40 MILLION. 
          SUPPLY CHAIN DISRUPTIONS AND OVERALL INFLATION, THIS IMPACTED THE CARRYING OUT AN COST OF A NUMBER OF OUR OPERATIONAL AND CAPITAL COSTS. 
          LOOKING AT THE DATA SINCE THE END OF 2020, OVERALL INFLATION IS MEASURED BY THE CONSUMER PRICE INDEX HAS INCREASED BY NEARLY 25% WHILE CONSTRUCTION COSTS AS MEASURED BY THE MORTONSON CONSTRUCTION COST NATIONAL INDEX HAS RISEN MORE THAN 43%. IN ORDER TO KEEP PACE AND ENSURE OUR EMPLOYEES CONTINUE TO EARN A LIVING WAGE, WE HAVE HAD TO RAISE OUR RATE OF PAY IN ORDER TO RETAIN OUR WORKFORCE. ALONG WITH ALL OF OUR FELLOW SAN ANTONIO RESIDENTS, WE HAD TO DEAL WITH WINTER STORM URI AND ITS AFTERMATHS, WHICH IN OUR CASE HAD A $340 MILLION PRICE TAG IN THE FORM OF NEW GENERATORS TO BE INSTALLED AT OUR MAJOR PUMP STATIONS. AS YOU'LL HEAR IN A FEW MINUTES, THESE RESILIENCY IMPROVEMENTS ARE ONGOING. IN ADDITION TO STATE MANDATES SUCH AS WE JUST DISCUSSED FOR WINTER STORM URI, SAWS IS ALSO SUBJECT TO FEDERAL MANDATES SUCH AS THE EPA'S LEAD AND COPY RULES WHICH REQUIRES SAWS TO INVENTORY THE ENTIRETY OF OUR MORE THAN 8,000 MILES OF WATER DISTRIBUTION MAINS AS WELL AS THE LINE TAKING POTABLE WATER FROM OUR MAIN TO THE CUSTOMER'S RESIDENCE TO ENSURE THAT NO LEAD LINES ARE PRESENT. WHILE SAWS DOES NOT BELIEVE THAT LEAD IN OUR LINE IS PREVALENT WITH NO LEAD LINES CONDUCTED TO DATE, THE COST TO DO THE INVENTORY COULD BE IN THE TENS OF MILLIONS OF DOLLARS. 
          DURING THIS TIME, WE'VE ALSO BEGUN AS JALIN ALLUDED TO A BOARD-DRIVEN INITIATIVE TO LOWER OUR LOST WATER. WHILE YOU CAN NEVER ELIMINATE LEAKS, JUST LIKE POTHOLES, WE MUST AND CAN DO BETTER. 
          MANY OF THE PROVEN SOLUTIONS DO COST MONEY. WE RECENTLY COMPLETED OUR INSTALLATION OF OUR CONNECTH2O ELECTRONIC METERS. 
          THIS INVESTMENT COST SAWS $200 MILLION, BUT WILL HELP US IN OUR EFFORTS TO REDUCE SAWS' WATER LOSS AS WELL AS TO PROVIDE OUR CUSTOMERS MORE TIMELY DATA REGARDING THEIR USAGE AND POSSIBLE WATER LEAKS. 
          SAWS HAS ALSO INVESTED APPROXIMATELY $80 MILLION -- 
          [00:20:05]
AUDIO] -- BOND PROGRAM FROM 2022 THAT HAD A SIGNIFICANT EMPHASIS ON STREETS AND BRIDGES. AND WE'VE BEEN ABLE TO DO ALL THIS WHILE AS PREVIOUSLY MENTIONED LOWERING THE RATES FOR MORE THAN 80% OF THE BILLS ISSUED OVER THE COURSE OF A YEAR. ALL OF THIS HAS BEEN ACHIEVED WHILE DEALING WITH THE WORST DROWBILITY THAT THIS REGION HAS EXPERIENCED SINCE THE 1950S. CHANGING GEARS A LITTLE BIT, JALIN MENTIONED THE RATE STUDY, WHILE PROUD OF OUR ACCOMPLISHMENTS AND OUR ABILITY TO NOT IMPLEMENT ANY INCREASES TO POTABLE WATER RATES SINCE 2020, OUR WASTEWATER RATES SINCE 2019, WE KNOW  THAT EVENTUALLY WE WILL NEED TO SEEK OUT RATE ADJUSTMENTS. 
          IN ORDER TO ASSIST US IN DETERMINING OUR REVENUE REQUIREMENTS, AS WELL AS THE ALLOCATION OF THESE REQUIREMENTS TO OUR VARIOUS CUSTOMER CLASSES, WE ENGAGE COROLLO ENGINEERS, AN ENGINEERING FIRM DEDICATED EXCLUSIVELY TO THE WATER AND WASTEWATER INDUSTRIES. 
          SPECIFICALLY, WE ASKED THEM TO HELP US QUANTIFY OUR ANNUAL REVENUE REQUIREMENTS FOR THE UTILITY AS A WHOLE. WE ALSO ASKED THEM TO DETERMINE THE EQUITABLE ALLOCATION OF THESE REQUIREMENTS TO EACH OF SAWS' EXISTING CUSTOMER CLASSES, AND FINALLY, WE ASKED THEM TO CALCULATE THE REQUIRED COST TO SERVICE BASED RATE ADJUSTMENTS FOR BOTH WATER AND SEWER AND TO BREAK THESE DOWN BY CUSTOMER CLASS. 
          WE'RE GOING TO SHARE SOME OF THAT INFORMATION WITH YOU HERE IN A BIT. 
          FIRST, WHILE THE REPORT THAT THEY HAVE ISSUED IS STILL IN DRAFT FORM, IT IS VERY DETAILED AS EVIDENCED. I HAVEN'T COUNTED THE NUMBER OF PAGES, BUT IT'S WELL IN EXCESS OF 50 PAGES. 
          THIS SLIDE SIMPLY TRIES TO SUMMARIZE THE GENERAL TAKEAWAYS FROM THE CAROLLO RATE STUDY FINDINGS. CAROLLO HAS REACHED THE SAME CONCLUSION FOR BOTH WATER AND WASTEWATER AND THAT IS THE CURRENT RATES ARE NOT SUFFICIENT TO MEET THE IDENTIFIED REVENUE REQUIREMENTS OF THE WATER OR WASTEWATER SYSTEM, WHILE ALSO MAINTAINING THE FISCAL HEALTH OF EACH SYSTEM. AS A RESULT, CAROLLO RECOMMENDS A TOTAL OF ALMOST 30% INCREASES IN POTABLE WATER RATE REVENUE OVER THE NEXT FIVE YEARS WHILE RECOMMENDING MORE THAN 35% IN CUMULATIVE WASTEWATER REVENUES DURING THE PERIOD OF 2026 TO 2030. 
          THESE ARE NOT FINAL RATE RECOMMENDATIONS, JUST A SUMMARY OF THE RATE STUDY FINDINGS. AS I KNOW THE FIGURES ON THE LAST SLIDE MAY BE A BIT OF A SHOCK, I DO WANT TO CIRCLE BACK ONE MORE TIME TO DISCUSS WHAT HAS HAPPENED BOTH SAWS RATES AS WELL AS THOSE FROM THE OTHER FOUR LARGEST TEXAS CITIES SINCE 2020. AS I ALREADY SHARED WITH YOU, AND AS ONCE AGAIN SHOWN ON THIS CHART AS A RESULT OF THE 2023 RATE RESTRUCTURING, SAWS COMBINED WATER AND SEWER BILL FOR A CUSTOMER USING 6,000-GALLONS PER MONTH OF BOTH WATER AND SEWER SERVICE HAS DECLINED BY MORE THAN $6 PER MONTH OR ALMOST, AGAIN, 9%. OVER THAT SAME TIME PERIOD, AUSTIN'S COMBINED COST FOR THE SAME SERVICE HAVE INCREASED BY 26.6%. DALLAS HAS INCREASED THEIR RATES, COMBINED WATER AND SEWER RATES BY 14.4%. 
          FORT WORTH HAS INCREASED THEIR RATES BY 6.3%. AND HOUSTON HAS INCREASED THEIR RATES BY 71.1% AS A RESULT OF THE EPA CONSENT DECREE THAT THEY'VE ENTERED INTO THAT WE ARE JUST NOW FINALIZING ON SAWS' BEHALF. 
          COMBINED, THOSE FOUR UTILITIES HAVE INCREASED ON AVERAGE $24.26 OR 31%. THIS NEXT SLIDE SIMPLY SHARES WITH YOU THE CURRENT 2025 TO 2029 BUDGET PROJECTIONS AFTER TAKING INTO ACCOUNT CAROLLO'S COST OF SERVICE FINDINGS. AS YOU CAN SEE THE GREATEST DRIVE OF INCREASES IS CURRENTLY PROJECTED TO BE DEBT SERVICE FOLLOWED BY O & M EXPENSES. WE WILL DRILL DOWN INTO EACH OF THESE COST COMPONENTS IN JUST A FEW MINUTES. 
          BEFORE WE DIVE DEEPER INTO SAWS' FORECAST O & M LEVELS FOR 2026, I WANT TO SPEND JUST A FEW MINUTES EXPLAINING OUR PROJECTIONS FOR FUTURE USAGE PATTERNS FOR BOTH WATER AND SEWER, AND THEN TALK BRIEFLY ABOUT SAWS' EXISTING RATE STRUCTURE. DURING THE LAST 10 YEARS, SAWS HAS EXPERIENCED STRONG PATTERNS OF CUSTOMER GROWTH, WITH CUSTOMER ACCOUNTS INCREASING IN A RANGE OF 1.2% A YEAR TO ALMOST 3% PER YEAR. 
          THE OVERALL AVERAGE OVER THAT 10-YEAR PERIOD HAS BEEN ABOUT 1.9% PER YEAR. PROJECTIONS GOING FORWARD HAVE THIS GROWTH RATE SLOWING TO ABOUT 1.6% PER YEAR; HOWEVER, WE ARE ALSO PROJECTING A CONTINUED DECLINE IN USE PER BILL OF .6% RESULTING IN WATER SALES GROWTH OF 
          [00:25:01]
ABOUT 1% PER FAIRLY UNIQUE BUSINESS MODEL, WE ASK PEOPLE TO USE LESS OF OUR PRODUCT AND WE'RE PRETTY DARN CONVINCING AND THEY DO RESPOND. AND WE'VE SEEN THAT OVER HISTORY AND WE ANTICIPATE THAT IT WILL CONTINUE. ON THE SEWER SIDE, WE ARE PROJECTING THE SAME LEVEL OF CONNECTION GROWTH; HOWEVER, WE'RE ALSO FORECASTING THE CONTINUATION OF THE MORE RAPID DECLINE IN SEWER USE PER BILL SINCE THE RESET ACHIEVED WITH THE ROLLOUT OF THE NEW CONNECTH2O METERS. 
          YOU CAN SEE THAT IN 2025, WE ACTUALLY HAD A SLIGHT INCREASE IN THE USE PER BILL, PARTICULARLY ON THE WASTEWATER SIDE, BUT NOW WE'RE PROJECTING IT TO LEVEL OUT AGAIN AND ACTUALLY YOU CAN SEE BETWEEN '26 AND '27, THERE IS NO INCREASE AT ALL. THE BILLED USAGE GOES FROM 57.3 BILLION-GALLONS TO 57.3 BILLION-GALLONS. TOTALLY OFFSETTING THE POPULATION GAINS AND LARGELY OFFSETTING THEM IN BOTH 2028 AND 2029. 
          REDUCED USAGE PER BILL DOES REDUCE REVENUE WHILE COST CONTINUE TO ESCALATE WITH GROWTH AND SYSTEM EXPANSION. I SHOWED THE BOARD YESTERDAY A CHART THAT SHOWS THAT WE HAVE THE THIRD LARGEST SYSTEM IN TERMS OF TOTAL MILES OF WATER AND WASTEWATER MAIN OF ANY UTILITY IN THE COUNTRY. ONLY NEW YORK AND LA ARE BIGGER THAN WE ARE. 
          AS MANY OF YOU WEREN'T HERE IN 2022 WHEN COUNCIL APPROVED FAIRLY SIGNIFICANT CHANGES TO SAWS' RATE STRUCTURE, I DO WANT TO REVIEW IT BRIEFLY. WHILE WE DO TIE OUR RATES TO COST OF SERVICE BY CLASS OF CUSTOMER, DURING THE LAST RATE STUDY, THERE WAS A STRONG DESIRE OF THE RATES ADVISORY COMMITTEE MEMBERS TO ENSURE AFFORDABILITY FOR ALL CUSTOMERS FOR ESSENTIAL USES OF WATER. THOSE INDOOR USES SUCH AS COOKING, CLEANING, BATHING, ET CETERA. THIS WAS ACHIEVED BY KEEPING THE FIRST TWO BLOCKS OF WATER, THOSE FIRST TWO -- YOU LOOK AT THE CHART ON THE LEFT, 2.64 -- $2.64 PER THOUSAND GALLONS FOR THE FIRST 4,000-GALLONS AND THEN $4.80 FOR THE NEXT 3,000-GALLONS OF USAGE. 
          SO YOU CAN SEE THAT WATER -- EACH CUSTOMER GOES THROUGH EACH AND EVERY TIER OF THE BLOCK, BUT THEY ONLY -- AND THEN ANY INCREMENTAL AMOUNTS GETS CHARGED AT THAT HIGHER RATE. YOU CAN SEE THAT INCREMENTALLY AS YOU USE MORE WATER, IT GETS MORE EXPENSIVE. 
          THAT WAS IMPORTANT TO THE RATES ADVISORY COMMITTEE. 
          ON THE RIGHT-HAND PORTION OF THE GRAPH, YOU CAN SEE THE TOTALLY SEPARATE RATE STRUCTURE, WHICH APPLIES TO CUSTOMER THAT QUALIFY FOR OUR UPLIFT WATER RATE STRUCTURE. COMPARING THE TWO STRUCTURES, YOU CAN SEE THAT ONE OF THE KEY DIFFERENCES IS THERE'S NO FIXED CHARGE OR ANY VOM METRIC CHARGE FOR THE -- VOLUMETRIC CHARGE FOR THE RATE STRUCTURE. 
          SO IF YOU QUALIFY FOR THAT PROGRAM AND YOU USE VERY LITTLE WATER, YOU CAN BASICALLY GET YOUR WATER FOR FREE IF YOU STAY UNDER THAT 2,000-GALLON THRESHOLD. IF THE CUSTOMER'S USAGE DOES EXCEED 2,000, THE FIXED CHARGE IS ONLY $3 FOR THAT UPLIFT CUSTOMER, SIGNIFICANTLY LESS THAN THAT FOR NONUPLIFT CUSTOMERS, WHICH YOU CAN SEE IS EITHER $9 OR $11, DEPENDING ON YOUR USAGE. IF IT GOES ABOVE 4,000-GALLONS AS A NONUPLIFT CUSTOMER, YOU DO PAY THAT HIGHER AMOUNT, THAT HIGHER RATE. THE REMAINING FOUR RATE BLOCKS IN THE UPLIFT STRUCTURE ALSO PROVIDE DISCOUNTED RATES ENABLING LOW-INCOME FAMILIES WITH LARGE HOUSEHOLDS TO HAVE A MUCH LOWER BILL THAN UNDER OUR PREVIOUS AFFORDABILITY DISCOUNT PROGRAM. LAST POINT I WOULD MAKE IS THAT SAWS' TOP TIER WATER RATES FOR NONUPLIFT CUSTOMERS ARE UP THERE AMONG THE HIGHEST IN THE STATE, ALONG WITH HOUSTON AND AUSTIN. 
          THIS GRAPH JUST SHOWS OUR EXISTING WASTEWATER RATE STRUCTURE AND THEN COMPARES IT TO THE UPLIFT -- THERE DIFFERENCES. THERE'S NO FIXED CHARGE FOR SEWER SERVICE AND NO VOL METRIC CHARGE FOR THE FIRST 2000-GALLONS UNDER THE AFFORDABILITY -- AGAIN, THE UPLIFT STRUCTURE. IF THE CUSTOMER'S USAGE DOES EXCEED 2,000-GALLONS OF USAGE, THE VOL LIEU METRIC CHARGE IS ONLY $2.76 PER THOUSAND WHICH IS APPROXIMATELY EQUAL TO THE RATE FOR NONAFFORDBILITY CUSTOMERS THAT THEY WAY FOR THEIR FIRST 4,000-GALLONS, SO... A LITTLE SIMPLER ON THE WASTEWATER SIDE. 
          JUST IN ORDER TO PROVIDE YOU WITH A FRAME OF REFERENCE FOR SAWS' RESIDENTIAL USAGE PATTERNS, THIS CHART AND THE NEXT CHART SHOW THE PERCENTAGE OF BILLS THAT END IN EACH BLOCK. THIS FIRST ONE IS SHOWING JUST RESIDENTIAL CUSTOMERS EXCLUSIVE OF THE AFFORDABILITY OR 
          [00:30:02]
UPLIFT CUSTOMERS. SO THIS IS NONUPLIFT RESIDENTIAL CUSTOMERS, AND YOU CAN SEE HERE -- YOU CAN SEE IT BROKEN DOWN BY BLOCK. 
          BLOCK 1 THAT'S THE USAGE BELOW $4,000. THE FIRST SET OF GROUP SHOWS THE PERCENTAGE OF BILLS FOR THAT YEAR THAT DID NOT EXCEED 4,000-GALLONS OF WATER USAGE. OVERALL IN 2023 TO 2025, AS YOU CAN SEE, 45.4% OF SAWS' BILLS DID NOT EXCEED 4,000-GALLONS. 
          AND, THEREFORE, WOULD HAVE PAID THE LOWEST VOLUMETRIC RATE AS WELL AS A REDUCED FIX RATE OF THE 56ED CHARGE. AS YOU CAN SEE, SINCE THE INCEPTION OF THIS RATE STRUCTURE IN 2023, THE RESULTS HAVE BEEN PRETTY CONSISTENT WITH ROUGHLY 45% OF SYSTEM BILLINGS NEVER EXCEEDING THAT BLOCK 1. AND ANOTHER 28% OF BILLINGS EXCEEDING 4,000-GALLONS, BUT BEING LESS THAN 7,000-GALLONS. SO WITHIN THOSE FIRST TWO BLOCKS COMBINED, ALMOST THREE QUARTERS OF SAWS' BILLS ARE FOR 7,000-GALLONS OR LESS OF WATER USAGE, WHILE MORE THAN 90% OF BILLS HAVE WATER USAGE OF LESS THAN 12,000-GALLONS.  ON AVERAGE ABOUT 2.5% OF BILLS ISSUED IN THE LAST THREE YEARS WAS FOR 20,000-GALLONS OR MORE, WITH THIS AMOUNT HAVING TO CLIMB TO 2.4% IN 2024, AND FINALLY 2.1% IN 2025. FINALLY, IN 2025, THE RESIDENTIAL CLASS USED IN TOTAL 35.75 BILLION-GALLONS OF WATER THROUGH THE ISSUANCE OF 6.258 MILLION BILLS, RESULTING IN AVERAGE METERED USAGE OF 5,712-GALLONS PER MONTH. LOOKING AT SOME OF THAT SAME INFORMATION, YOU CAN SEE A SLIGHTLY DIFFERENT RATE STRUCTURE FOR OUR UPLIFT CUSTOMERS, THE FIRST BLOCK ONLY GO -- FALL WITHIN THAT RANGE. THE NEXT BIGGEST CLUMP IS 2,000 TO 6,000-GALLONS WHICH IS ABOUT 48%.  SO IN TOTAL, YOU CAN SEE UPLIFT CUSTOMERS STILL -- THEY DO USE ABOUT 5% MORE WATER ON AVERAGE THAN DO OTHER RESIDENTIAL CUSTOMERS, THIS LIKELY STEMS FROM, AS I MENTIONED TO THE BOARD, ONE OF TWO THINGS: LARGER FAMILY SIZES IS LIKELY THE MOST LIKELY REASON WITHIN THE HOME, OR LESS EFFICIENT WATER APPLIANCES AND/OR LEAKS. 
          WE DON'T BELIEVE THAT IT'S LEAK BASED UPON OUR REVIEW OF THE MOST RECENT DATA THAT WE GET FROM OUR AMI SYSTEM. STILL, 64% OF THE BILLS ARE WITHIN THE FIRST TWO BLOCKS. AGAIN, WHICH THE FIRST TWO BLOCKS HERE END AT 6,000-GALLONS AS OPPOSED TO SEVEN. 
          AND ALMOST 87% OF BILLS BEING FOR 10,000-GALLONS OR LESS UNDER THE UPLIFT STRUCTURE. AGAIN, WE'RE EXCITED THAT WITH THE DATA FROM OUR RECENTLY DEPLOYED CONNECTH2O METERS AND WE'VE BEEN WORKING WITH GAVINO AND HIS TEAM TO MAKE SURE WE REACH OUT TO THOSE CUSTOMERS THAT ARE EXCEEDING 10,000 OR 15,000-GALLONS RESPECTIVELY AND FIGURING OUT IF WE CAN FIGURE OUT WAYS TO DRIVE THAT NUMBER DOWN. 
          I NEXT WANT TO SPEND JUST A FEW MINTS DIVING A LITTLE DEEPER INTO OUR OPERATING AND MAINTENANCE EXPENSE BUDGETS AS COMPARED TO OUR HISTORICAL SPEND LEVELS DURING THE LAST THREE YEARS. 
          THIS IS BEING DONE TO BE AS TRANSPARENT AS POSSIBLE CONCERNING OUR O & M EXPENSE BUDGET. I WANT TO START IN LOOKING AT THE -- BEFORE WE DIVE INTO THE CURRENT YEAR BUDGET DETAIL, I THOUGHT I WOULD TRY TO PLAY SAWS' BUDGETED HEAD COUNT INTO HISTORICAL PERSPECTIVE. 
          AS YOU CAN SEE DURING MY FIRST YEAR HERE AT SAWS AS THE CFO BACK IN 2005, THE TOTAL BUDGETED PAYROLL WAS 1,087 EMPLOYEES. 
          AT THAT SAME TIME, YOU CAN SEE AMOUNTS DETAILED FOR THE YEAR-END CUSTOMER CONNECTION SERVED THE MILES OF WATER AND SEWER MAINS THAT WE WERE NEEDING TO SERVICE, SAWS NET CAPITAL ASSETS IN WATER AND SEWER SERVICE AREA. I'VE THEN REPLICATED EACH OF THESE FIVE -- EACH OF THESE DATA POINTS IN FIVE-YEAR INCREMENTS THROUGH 2025 AND SHOWED PROJECTION LEVELS FOR 2026. THE FINAL COLUMN, SIMPLY CALCULATES THE PERCENTAGE INCREASES FROM 2005 TO 2026 IN EACH OF THESE CATEGORIES. THE TAKEAWAY IS THAT WHILE SAWS HAS ADDED TO ITS BUDGETED HEAD COUNT, AND YOU CAN SEE THERE PARTICULAR LYSINS 2020, THIS GROWTH HAS BEEN SIGNIFICANTLY OUTPACED BY OTHER GROWTH MEASURES SUCH AS CUSTOMER CONNECTIONS AND MILES OF WATER AND SEWER MAINS THAT REQUIRE MAINTENANCE AND REPLACEMENT. WITH THAT IN MIND, LET'S BEGIN UNPEELING OUR OVERALL O & M BUDGET. AS YOU CAN SEE, OUR O & M 
          [00:35:01]
BUDGET CONSISTS OF FOUR BROAD CATEGORIES, SALARIES AND FRINGE BENEFITS, CONTRACT SHALL SERVICES, MATERIALS AND SUPPLIES AND FINALLY OTHER CHARGES. THE BULK OF THOSE RESIDE IN THE FIRST TWO CATEGORIES, SALARIES AND FRINGE BENEFITS WHICH ACCOUNTS FOR A LITTLE LESS THAN 40% TOTAL O & M AND CONTRACTUAL SERVICES WHICH REPRESENT A LITTLE MORE THAN 52% OF O & M EXPENSES. IF WE BREAK THESE BROAD CATEGORIES DOWN INTO THE GENERAL LEDGER ACCOUNTS THAT WE RECORD OUR MONTHLY ACTIVITY INTO AND IS CONSISTENT WITH HOW WE BUDGET, YOU CAN SEE THAT LAID OUT HERE. BROKEN DOWN INTO SALARIES, YOU CAN SEE OVERTIME PAY, ON-CALL PAY, EMPLOYEE INSURANCE, RETIREMENT, PERSONALLY, BUYBACK, ET CETERA. EACH OF THESE SLIDES SHOW FOR 2023, 2024, AND 2025, AND THEN THE BUDGETED LEVEL AS PER THE PROPOSED AMENDED BUDGET FOR 2026 SHOWN IN THE COLUMN TO THE FAR RIGHT. WHILE I'VE LISTED EACH OF THE ACCOUNTS HERE, I PARTICULARLY WANT TO FOCUS ON THOSE THREE ACCOUNTS -- OR THOSE ACCOUNTS HIGHLIGHTED IN GREEN AS THEY REPRESENT MORE THAN 93.5 -- MORE THAN 93% OF THE 2026 SALARIES AND FRINGE BENEFITS TOTALS. THEY'VE ALSO GROWN FROM THE 2023 ACTUAL TO 2026 AMENDED BUDGET WITH SALARIES HAVING GROWN ALMOST 30% OVER THAT PERIOD, EMPLOYEE INSURANCE, 22.7, AND RETIREMENT, 14.9. 
          HOWEVER, IT'S IMPORTANT TO NOTE THAT EACH OF THESE ACCOUNTS HAS IMPACTED NOT ONLY BY THE COST PER EMPLOYEE BUT ALSO BY THE ABSOLUTE NUMBER OF EMPLOYEES, AND THAT'S WHAT I'VE TRIED TO SHOW YOU ON THIS NEXT SLIDE, IS THAT TAKING INTO CONSIDERATION THE AVERAGE NUMBER OF EMPLOYEES EITHER EMPLOYED OR THE AVERAGE NUMBER FACTORED INTO THE BUDGET FOR 2026, YOU CAN SEE THAT THE AVERAGE SALARY PER EMPLOYEE AS WELL AS THE HEALTH INSURANCE AND RETIREMENT COSTS FOR EMPLOYEE FOR EACH OF THE LAST THREE YEARS ACTUAL COMPARED TO THE 2026 BUDGET. 
          SOME FIGURES OF NOTE ARE THAT THE AVERAGE SALARY FOR A SAWS' EMPLOYEE IN 2023 OF JUST MORE THAN $70,000 IS PROJECTED TO GROW IN 2026 TO ALMOST 79,000, WHICH IS A THREE-YEAR GROWTH PERCENTAGE OF 12.3%, WHICH EQUATES TO APPROXIMATELY 4% PER YEAR. 
          AT THE SAME TIME, PER EMPLOYEE INSURANCE COSTS ARE PROJECTED TO GROW ONLY 6.1% OVER THAT THREE-YEAR PERIOD, WHILE PER EMPLOYEE RETIREMENT COSTS ARE ACTUALLY PROJECTED TO GO DOWN OVER THIS PERIOD, REFLECTING THE STRONG FINANCIAL PERFORMANCE THAT WE'VE SEEN WITHIN OUR RETIREMENT PLANS AND THE MOVEMENT OF EMPLOYEES OUT OF OUR MORE EXPENSIVE DEFINED BENEFIT PLAN. WE CLOSED THAT PLAN TO NEW EMPLOYEE ENTRANTS SEVERAL YEARS BACK AND NOW NEW EMPLOYEES ALL GO INTO BASICALLY A 457 PLAN, WHICH IS LIKE A 401-K. NEXT CONTRACTUAL SERVICES IS THE CATEGORY WITH THE MOST GL ACCOUNTS, I JUST SAY THAT BECAUSE DOWN IN THE SECOND LINE FROM THE BOTTOM, I'VE KIND OF GROUPED SEVERAL ACCOUNTS TOGETHER, BUT THE BREAKOUT IS AVAILABLE IF YOU SHOULD SO DESIRE IT. 
          BUT THIS JUST SHOWS YOU A BREAKDOWN OF OUR CONTRACTUAL SERVICES. 
          I'M NOT GOING TO SPEAK TO THIS ENTIRE SLIDE. IT'S GOT A LOT OF INFORMATION HERE. THE ONLY THING I REALLY WANT TO POINT OUT IS THAT GROWTH IN THAT WATER OPTIONS, AS YOU CAN SEE, THE WATER OPTIONS HAS BEEN CONSISTENTLY 125, 124, 128 MILLION. AND NOW IT'S BUDGETED AT 144 MILLION. THAT HAS TO DO WITH A COUPLE THINGS. 
          FIRST OFF IS A CONTRACT THAT WE INHERITED FROM BEXAR MET WHERE WE'RE REQUIRED TO PAY FOR IF THEY MAKE IT AVAILABLE WATER THAT COMES OUT OF THE TRINITY AQUIFER. WE'VE BUDGETED $8 MILLION FOR THAT IN 2026, EVEN THOUGH WE MAY BE ON THE HOOK FOR AS MUCH AS 17 MILLION. 
          GIVEN THE LEVEL OF THE AQUIFER BEING SO LOW, THEY HAVE BEEN RESTRICTED FROM PUMPING IT AND WE HAVEN'T HAD TO PAY FOR IT. 
          IF THEY DON'T -- WE NEGOTIATED WHERE THEY DON'T MAKE IT AVAILABLE, WE DON'T HAVE TO PAY FOR IT. SO THAT'S T THE BIGGEST DRIVER OF THAT INCREASE. MATERIALS AND SUPPLIES, I'M NOT GOING TO SPEND MUCH TIME THERE. AGAIN, WE HAVE SEEN SOME SIGNIFICANT PRICE INCREASES IN SOME OF OUR CHEMICALS. CHLORINE PRICES THAT WE USE A LOT OF IS UP 41% PER TON SINCE 2023, AND THE PRICE OF FERROUS SULFATE WHICH IS USED IN OUR WASTEWATER SYSTEM QUITE EXTENSIVELY IS ALSO UP. WE'VE SEEN A PRICE INCREASE OF 25% PER POUND. EVEN WITH THOSE INCREASES, YOU CAN SEE THAT OVERALL PROPOSED MATERIALS AND  SUPPLIES BUDGET IS LESS THAN THE HISTORICAL THREE-YEAR AVERAGE SPEND. FINALLY ON OTHER CHARGES AND CAPITALIZED COST, YOU CAN SEE THAT THE BIG THING HERE IS REALLY THE COSTS ARE PRETTY NOMINAL, YOU KNOW, FOUR TO $5 MILLION FOR THE MOST PART, AND THE CHARGES -- OTHER CHARGES TOTAL. THE BIG ITEM IS ON 
          [00:40:01]
CAPITALIZED COST WITH THE CESSATION OF EMPLOYEES WORKING ON THE ROLLOUT OF OUR CONNECTH2O PROGRAM, WE'RE GOING TO HAVE LESS OF THOSE COSTS THAT ARE BEING ABLE TO BE CAPITALIZED TO OUR CAPITAL PROGRAM. 
          AND THEY'RE GOING TO RESIDE IN O AND M. WITH THAT, I WANT TO TURN IT OVER TO ANDREA TO TALK A LITTLE BIT ABOUT OUR PROPOSED CAPITAL 
          IMPROVEMENTS. >> THANK YOU, DOUG. THANK YOU, COUNCIL. 
          SO I HAVE THE OPPORTUNITY TODAY TO TALK TO YOU ABOUT OUR CAPITAL PROGRAM. THIS IS THE SLIDE THAT'S NOT IN YOUR PACKET, AND I APOLOGIZE FOR THAT. IT WAS A LATE EDITION, BUT WE WANTED TO PROVIDE THE COUNCIL WITH SOME CONTEXT IN REGARD TO OUR CAPITAL IMPROVEMENT PROGRAM BEFORE I GO INTO DETAILS ON THE PROGRAM ITSELF. 
          THE PRIORITIZATION OF PROJECTS WITHIN THE CIP IS BASED UPON NUMEROUS MASTER PLANS FOR EACH OF OUR SYSTEMS, WHICH WERE DEVELOPED BY A TEAM OF NATIONAL EXPERTS WHO ASSESSED OUR INFRASTRUCTURE, CONDUCTED CAPACITY ANALYSIS, AS WELL AS HYDRAULIC MODELING, ANALYZED CHANGING REGULATORY REQUIREMENTS WITH TCEQ AND EPA AMONG OTHER ISSUES. THIS IS IN ADDITION TO THE 2025 WATER MANAGEMENT PLAN WHICH WAS APPROVED BY THE SAWS BOARD LAST YEAR AND PRESENTED NUMEROUS TIMES TO COUNCIL. THE PROJECTS IN OUR CIP ARE ALSO BALANCED WITH OUR REGULAR SYSTEM REQUIREMENTS THAT FUND REPLACEMENTS -- PROGRAM. DOUG MENTIONED THE CITY BOND PROGRAM. 
          THESE SUPPORT THE CITY AS WELL. GIVEN THE CAPITAL INTENSIVE NATURE OF SAWS' BUSINESS, IT'S NO SURPRISE THAT SAWS MAINTAINS A LARGE ANNUAL CAPITAL SPENDING BUDGET. AS CAN BE SEEN, SAWS CAPITAL PLANS FOR THE NEXT FIVE YEARS TOTAL MORE THAN 3.2 BILLION. 
          AS DOUG MENTIONED, WE ARE ONE OF THE LARGEST WATER AND SEWER SYSTEMS IN THE COUNTRY, BEHIND JUST NEW YORK CITY AND LOS ANGELES. 
          WE HAVE TO MAINTAIN OVER 14,000 MILES OF COMBINED PIPE. 
          IN ADDITIONS TO THE PIPELINES WE MAINTAIN, WE HAVE SIGNIFICANT INFRASTRUCTURE NEEDS AT OUR WASTEWATER TREATMENT PLANTS, ALSO CALLED WATER RECYCLING CENTERS. OUR NEWEST PLANT WAS BUILT IN 1987. 
          TECHNOLOGY HAS CHANGED A LOT SINCE 1987. ENVIRONMENTAL REGULATIONS HAVE BECOME MORE STRINGENT SINCE 1987, AND OUR POPULATION HAS GROWN SIGNIFICANTLY, WHICH MEANS THE FLOWS COMING TO OUR PLANTS HAVE INCREASED SIGNIFICANTLY SINCE 1987. ALL OF THESE ARE KEY FACTORS IN THE MUCH-NEEDED INVESTMENTS WE NEED TO MAKE IN OUR TREATMENT PLANTS. OVER THE NEXT FEW SLIDES I'LL TALK MORE ABOUT THE DRIVERS FOR THESE HEIGHTENED C IV CIP LEVELS. 
          I WANT TO START WITH OUR MOST FUNDAMENTAL ONGOING INVESTMENT NEEDS, AND THAT'S REGULAR REPLACEMENT OF OUR WATER DISTRIBUTION AND SEWER COLLECTION MAINS. THIS IS A FUNDAMENTAL MAINTENANCE REQUIRED FOR ANY WATER AND WASTEWATER UTILITY, AND WHILE NOT AS ATTENTION-GRABBING AS SOME OF THE OTHER MORE HIGH-PROFILE PROJECTS THAT NEED TO BE DONE, IT'S VITAL IN THE PERFORMANCE OF A HEALTHY WATER AND SEWER SYSTEM. 
          AS YOU WILL RECALL, SAWS MAINTAINS ABOUT 8,000 MILES OF WATER MAIN. OF THESE WATER MAINS, YOU SEE 22% OF THEM, ROUGHLY 1,765 MILES OF THEM, ARE GREATER THAN 50 YEARS IN AGE, AND EVERY YEAR THAT PASSES, MORE OF THEM MEET THIS CRITERIA. WHILE SOME OF THESE WATER MAINS ARE IN PERFECTLY FINE CONDITION, OTHERS NEED TO BE REPLACED. 
          AS THESE REPLACEMENT TARGETS ARE NOT NECESSARILY BASED JUST ON AGE, BUT WE HAVE FACTORS SUCH AS THE PIPE MATERIAL, THE SOILS THAT THEY'RE IN, THE PRESSURE, THE AMOUNT OF STRESS THAT THOSE PIPES ARE UNDER. 
          THIS ONGOING REPLACEMENT IS CRUCIAL TO OUR WATER STEWARDSHIP INITIATIVE. 
          SO WE DISCUSSED WITH THIS COUNCIL WE'RE WORKING VERY HARD TO ADDRESS OUR NONREVENUE OR LOST WATER. WE HEARD THE MESSAGE FROM YOU LOUD AND CLEAR THAT THE LEVEL WE'RE AT IS NOT ACCESACCEPTABLE AND WE AGREE. I WANT TO SHARE SOME KEY FINDINGS OF OUR PROGRAM WITH YOU. IN 2024, THERE WERE OVER 2,500 BREAKS THAT WERE BASED ON WATER MAIN CONDITION FAILURE. THE X AXIS ON THIS GRAPH SHOWS THE WORST 10% BRACKET AS DEFINED BY OUR AI PREDICTION MODEL. 
          THE TOP 10% CATEGORY MAKES UP ABOUT 80 MILES OF PIPE, WHERE THE MODEL SAYS THESE ARE THE WORST OF THE WORST. AND OF THAT, 1,749 OF OUR 22500 BREAKS OCCURRED ON THESE 10% OF PIPES. THESE ARE THE WATER MAINS THAT WE NEED TO FOCUS ON. SO OVER THE NEXT FOUR YEARS ALONE, WE'RE PROGRAMMED TO REPLACE ABOUT 56 MILES OF THESE PROBLEMATIC WATER MAINS. AND WE'RE CONTINUING TO FINE-TUNE OUR AI MODEL TO 
          [00:45:03]
GET AHEAD OF MAIN BREAKS AND PRIORITIZE THE REPLACEMENT OF THE WORST PIPELINES IN OUR SYSTEM. I WAS BEFORE YOU IN OCTOBER TO PROVIDE AN UPDATE ON OUR WATER STEWARDSHIP, NONREVENUE WATER PROGRAM AND I DISCUSSED OUR GOAL TO DRIVE DOWN WATER BREAKS, WATER MAIN BREAKS OVER THE NEXT 10 YEARS. WE WANT TO REDUCE OUR TOTAL WATER LOSS IN HALF OVER THAT PERIOD. AND AS I SAID, IT'S GOING TO TAKE INNOVATION, MANPOWER AND RESOURCES TO ACHIEVE THIS GOAL. THE THREE PRIMARY FOCUSES ARE CREWS FOR FASTER RESPONSE AND REPAIR TIME, ENHANCED LEAK DETECTION STAFFING, AS WELL AS INCREASING THAT WATER MAIN REPLACEMENT LEVEL. 
          TOGETHER THESE INTERVENTIONS FORM A COMPREHENSIVE APPROACH TO MANAGING WATER LOSS. WHILE WE'RE INVESTING SIGNIFICANT RESOURCES ON WATER MAIN REPLACEMENT, WE CANNOT FORGET ABOUT THE SEWER COLLECTION SYSTEM. AS JUST DISCUSSED THE ONGOING REPLACEMENT OF SEWER MAINS WITHIN OUR WASTEWATER COLLECTION SYSTEM IS ONE OF THE CORE FUNCTIONS OF ANY WASTEWATER UTILITY. WE HAVE JUST SPENT 1.3 BILLION ON THE REPLACEMENT OF SEWER MAINS IN CONNECTION WITH OUR COMEERLY COME PLEELTED CONSENT DECREE WITH THE EPA, BUT WE KNOW THERE'S STILL MORE WORK TO BE DONE. AS YOU CAN SEE ABOUT 19% OF OUR MORE THAN 6,000 MILES OF COLLECTION SYSTEM IS ALSO MORE THAN 50 YEARS OLD. WE HAVE AN EXTENSION CONDITION ASSESSMENT PROGRAM THAT USES WHAT WE CALL CCTV, REMOTE CONTROLLED CAMERAS THAT ARE PUT INSIDE OUR PIPES TO EVALUATE THE CONDITION OF THE SEWER MAINS. 
          AND BASED ON THIS INFORMATION, WE'VE IDENTIFIED ABOUT 400 MILES OF SEWER MAIN THAT REQUIRE REPLACEMENT DUE TO CONDITION. 
          THIS IS A SNAPSHOT OF OUR SEWER CONDITION ASSESSMENT RESULTS. 
          IT'S ON A GRADING SCALE, A BEING THE BEST PIPE, D AND E BEING THE WORST PIPES THAT WE NEED TO REPLACE. AND AS YOU SEE, ABOUT A LITTLE OVER 6% OF OUR SYSTEM FALLS IN THOSE D AND E CATEGORIES THAT ARE AT HIGH RISK FOR FAILURE. AND AS WE GO ON EVERY YEAR, WE HAVE MORE PIPES THAT START TO FALL INTO THAT CATEGORY. 
          SO THESE TWO ISSUES, WATER AND SEWER REPLACEMENT, ARE CRITICAL TO OUR ABILITY TO PROVIDE SAFE WATER SERVICE TO OUR CUSTOMERS. 
          IT'S A CRITICAL COMPONENT OF OUR CIP. THIS CHART SUMMARIZES OUR PROJECTED LEVEL OF SPEND FOR OUR ESSENTIAL WATER AND SEWER REPLACEMENTS. 
          WATER IS SHOWN IN THE BLUE BARS TOTALING 683 MILLION, ROUGHLY 140 MILLION PER YEAR. AND ESSENTIAL SEWER MAINS ARE SHOWN IN GREEN AT 422 MILLION, OR ROUGHLY 85 MILLION PER YEAR. THESE ARE ESSENTIAL UTILITY NEEDS; HOWEVER, WE HAVE SEVERAL MAJOR PROJECTS IDENTIFIED FROM OUR MASTER PLANS THAT ALSO NEED TO BE ADDRESSED DUE TO RISK. 
          AS I MENTIONED BEFORE, WE CLASSIFY PROJECTS THAT COST OVER 35 MILLION AS MAJOR PROJECTS. I'M GOING TO HIGHLIGHT THE MAJOR PROJECTS OVER THE NEXT FOUR YEARS AND DISCUSS THE PROJECT NEED AND THE RISK OF DELAY. 
          IN 2026, WE'RE HIGHLIGHTING THREE PROJECTS ALL AT OUR WASTEWATER TREATMENT PLANTS. OUR LEON CREEK FACILITY WAS CONSTRUCTED IN 1965. THIS PROJECT WILL INSTALL NEW FLOW DIVERSION STRUCTURES AS WELL AS PIPING BETWEEN CLARIFIERS, FILTERS AND DISINFECTION BASINS. WHAT HAPPENS IF WE PUSH OFF THIS PROJECT? WE WILL NOT BE ABLE TO MEET OUR PERMITTED TWO-HOUR PEAK FLOW CAPACITY, WHICH WILL RESULT IN SYSTEM VIOLATIONS WITH THE TCEQ. OUR STEVEN MEMORIAL DAY CLAUSE FACILITY WAS CONSTRUCTED IN 1987. WE HAVE ORIGINAL BIOSOLIDS EQUIPMENT AT THIS PLANT. BIOSOLIDS TECHNOLOGY HAS CHANGED A LOT SINCE 1987. AND WHAT WE HAVE TODAY IS INEFFICIENT AND SOME OF THE PARTS ARE OBSOLETE. RIGHT NOW WE HAVE RENTAL EQUIPMENT ON SITE IN ORDER TO MEET OUR TREATMENT REQUIREMENTS. BUT THIS PROJECT WILL PROVIDE US WITH A MORE EFFICIENT SYSTEM WITH NEW TECHNOLOGY AND WILL ELIMINATE AS WELL OUR COST FOR RENTAL EQUIPMENT. 
          WE HAVE OUR STEVEN M. CLOUSE REHAB PHASE 1 IMPROVEMENT PROJECT. 
          THIS IS AN IMPORTANT PROJECT TO OUR BIOLOGICAL PROCESSES AT THE PLANT. 
          IT WILL REPLACE AGING INFRASTRUCTURE INCLUDING OUR RAZ POINTS, BOILERS 
          [00:50:03]
AND FILTERS. THIS EQUIPMENT IS ALL AT THE END OF ITS USEFUL LIFE. MOVING TO 2027, WE'LL START WITH THE GENERATOR PROJECT, WHICH DOUG MENTIONED BRIEFLY. THIS PROJECT IS A MANDATE IN ACCORDANCE WITH 2021 SB 3 RESULTING FROM WINTER STORM URI. 
          SAWS IS INSTALLING 35 GENERATORS ACROSS OUR WATER SYSTEM TO MEET MINIMUM PRESSURE REQUIREMENTS AFTER A 24-HOUR POWER OUTAGE. 
          SAWS HAS ALREADY COMMITTED MORE THAN 220 MILLION ON THIS PROGRAM. WE REQUIRE ROUGHLY ANOTHER 120 MILLION TO MEET FULL BUILDOUT. OUR SALADO CREEK SEWER MAIN PROJECT WILL REPLACE MAINS THAT ARE 40 AND 50 YEARS OF AGE AND ARE LARGE DIAMETER. 
          DELAYS OF THIS PROJECT COULD RESULT IN PIPE FAILURE AND SEWER SPILLS. OUR STEVEN M. CLOUSE PRIMARY TREATMENT EXPANSION B, THE KEY HERE IS AGING INFRASTRUCTURE AT OUR TREATMENT PLANTS. 
          AND OUR LEON CREEK FLOW MANAGEMENT UPGRADES IS REALLY DRIVEN BY GROWTH. 
          WE HAVE MORE FLOW COMING TO THE PLANTS AND WE NEED TO BE ABLE TO ADDRESS IT. IN 2028, WE HAVE THE LAST PACKAGE OF OUR RESILIENCY PROGRAM. WE HAVE AN UPGRADE TO OUR WATER PRODUCTION FACILITY IN PRESSURE ZONE 1295, 1400 EAST -- A TANK AS WELL AS INFRASTRUCTURE THAT IS AT THE END OF ITS USEFUL LIFE. WE HAVE [INDISCERNIBLE] REHAB IMPROVEMENTS PHASE 1. THIS PLANT WAS CONSTRUCTED IN 1972. 
          WE NEED TO UPGRADE THE HEAD WORKS SOLID TRANSFER AND DISINFECTION, WHICH ARE ALSO BEYOND ITS USEFUL LIFE. AND WE HAVE OUR ASR PLANT EXPANSION. THIS WILL INCREASE OUR PLANT CAPACITY FROM 30 TO 60 MGD. THIS WILL ACCOMMODATE THE PLANT AT LOCAL CARRIZO EXPANSION AND MAXIMIZE THE USE OF OUR ASR. THIS IS VERY IMPORTANT PARTICULARLY WHEN WE'RE IN DROUGHT CONDITIONS. 2029, WE HAVE OUR STEVEN M. CLOUSE SIDE STREAM PHOSPHATE HARVESTING. THE CONSTRUCTION OF A PHOSPHATE HARVESTING REACTOR IS IMPORTANT TO THE MAINTENANCE AT THE PLANT. IT WILL REMOVE PHOSPHORUS FROM OUR SOLIDS PROCESSING WHICH LEADS TO BUILDUP OF STREW VIT IN MANY OF OUR KEY COMPONENTS  BUT BEYOND THAT OPERATIONAL ASPECT, THIS IS WHAT'S SEEN AS COMING FROM A NUTRIENT LIMIT FROM TCEQ WITH OUR PERMIT RENEWAL. 
          AND IT'S THE SAME THING WITH THE STEVEN M. CLOUSE [INDISCERNIBLE] WE'RE ANTICIPATING TCEQ IS GOING TO BE COMING WITH THIS CHANGE. 
          OUR WETLANDS PROJECT ADDRESSES A FORMER TREATMENT FACILITY THAT'S NOW A STORMWATER FACILITY. WE WILL CONSTRUCT ABOUT 80 MILES OF WETLANDS TO IMPROVE WATER QUALITY. THIS PROJECT IS REQUIRED IN OUR MS4 PERMIT WITH THE STATE. AND THEN FINALLY OUR EXPANDED LOCAL CARRIZO PROJECT.  THIS IS IMPORTANT TO MEET WATER SUPPLY FOR OUR COMMUNITY. WE WILL EXPAND FROM ROUGHLY 9,000-ACRE FEET, WE I'LL BUILD ANOTHER 14-ACRE FEET TO EXPAND OUR NONEDWARDS SOURCES. SO I KNOW I HAVE GONE OVER A LOT OF PROJECTS, I THINK IN SUMMARY, I'D LIKE TO SAY THESE PROJECTS OVERALL ARE IMPORTANT TO OUR COMMUNITY TO MEET ENVIRONMENTAL STEWARDSHIP, TO MEET WATER STEWARDSHIP AND TO MEET THE LEVEL OF SERVICE OUR COMMUNITY EXPECTS. I'LL TURN THINGS BACK OVER TO DOUG. 
          >> I JUST WANT TO WRAP UP BY SHARING WITH YOU A COUPLE LAST SLIDES. 
          THIS FIRST ONE IS ANOTHER TABLE THAT WAS TAKEN DIRECTLY FROM THE CARLLO RITE STUDY REPORT. THIS SHOWS BY CUSTOMER CLASS, RESIDENTIAL COMPARED TO GENERAL CLASS CUSTOMER COMPARED TO IRRIGATION CLASS, ET CETERA. AND THEN IN CLOSING, I JUST OBVIOUSLY -- ON TREE YEAH JUST TALKED ABOUT THE IMPORTANCE OF THESE PROJECTS TO OUR COMMUNITY, I CAN TELL YOU HAVING WORKED AT SAWS AS A CFO FOR 21 YEARS, IT'S A LONG PROCESS TO GET -- TO ACHIEVE A RATINGS UPGRADE FROM THE BOND RATING AGENCIES. YOU CAN SEE THAT FOR BOTH MOODY'S AND S & N, AND S & P WE GOT UPGRADED AT OUR JUNIOR LANE LEVEL, THAT'S OUR PRAISING LANE 
          [00:55:06]
LEVEL TO AA PLUS BACK IN 2002, AND WE RECEIVED A SIMILAR UPGRADE FROM MOODY'S TO AA1 IN 2024. IT TAKES A LONG TIME TO GET THOSE UPGRADES. 
          WE'VE BEEN WORKING AT IT FOR A LONG TIME. AND IT DOESN'T TAKE VERY LONG FOR THEM TO GO THE OTHER DIRECTION, UNFORTUNATELY. 
          SO, AGAIN, WE'RE PROUD OF OUR RATINGS. THESE ARE THE HIGHEST WE'VE EVER HAD. AND IT WOULD NOT TAKE A LOT FOR SAWS TO RECEIVE A RATINGS DOWN GRADE WHICH IN TURN WOULD DRIVE UP THE COST OF OUR LONG-TERM BORROW WANS. YOU CAN READ THESE FACTORS FOR YOURSELF, BUT FACTORS THAT COULD LEAD TO NEGATIVE RATING ACTION, THEY SPECIFICALLY TALK ABOUT CIP COST INCREASES NOT SUPPORTED BY ADEQUATE RATE ADJUSTMENTS, THEY TALK ABOUT WEAK OPERATING PERFORMANCE THAT DRIVES DOWN KEY METRICS, AND FINALLY S & P TALKS ABOUT HOW THEY'RE EXPECTING IT TO HAVE SUSTAINED OR FINANCIAL PERFORMANCE SUSTAINED, ROBUST FINANCIAL PERFORMANCE AND IT'S MOSTLY DEBT FINANCE CAPITAL PLAN. 
          SO WE NEED TO BE -- THEY HAVEN'T PUT US ON -- WE'RE NOT ON CREDIT WATCH NEGATIVE OR ANYTHING LIKE THAT, BUT IF WE DON'T GET RATE SUPPORT AT SOME POINT IN TIME, I THINK THEY WILL TAKE SOME ACTION. 
          SO WITH THAT, I THINK WE ARE LOOKING FOR INPUT FROM CITY COUNCIL. 
          SO, I DON'T KNOW, ROBERT, OR YOU OR JALEN HAVE ANYTHING ELSE YOU WANT TO 
          CLOSE WITH? >> MAYOR JONES: THANK YOU, DOUG, ANDREA, CHAIR. BEN, WOULD YOU LIKE TO ADD ANYTHING BEFORE WE GO INTO COMMENTS? OKAY. SOKOL LSO SMS COLLEAGUE TION AS YOU CAN SEE, WE'RE DEALING WITH UNFORTUNATELY LOTS OF DELAYED PROJECTS. AND AS YOU KNOW, WITH ANY DELAY YOU RISK THE INSTANCE WHERE THOSE BECOME MORE EXPENSIVE THAN WHAT THEY WOULD HAVE BEEN HAD WE ADDRESSED THEM SOONER, UNFORTUNATELY. 
          BUT WE ARE HERE, AND AS WE LOOK AT WHAT HAS BEEN DESCRIBED AND OUTLINED HERE, A COUPLE OF THINGS TO CONSIDER:  THE REAL IMPACTS OF TARIFFS, INFLATION, IMMIGRATION-RELATED STRESSES ON LABOR, ONE THING THAT WASN'T BROUGHT OUT TODAY BUT WAS SHARED WITH THE BOARD YESTERDAY, IS OUR FIVE-YEAR CAPITAL PLAN, 2016 TO 20, DOUG, THAT WAS ONLY 2 BILLION, 
          CORRECT? >> 2 BILLION. >> MAYOR JONES: CORRECT. 
          SO WITH THIS ONE, '26 TO 2030, WE FIND OURSELVES AT 3.2 BILLION. 
          SO YOU CAN SEE THE SIGNIFICANT INCREASE IN THE COST THERE ALONE. 
          I ALSO WANT TO FOOT STOMP AS WE'RE HAVING THIS DISCUSSION, THE POINT THAT WE HAVE THE THIRD LARGEST AND THIRD GREATEST NUMBER OF MILES OF PIPE TO MAINTAIN, AND SO THERE ARE CERTAINLY DISCUSSION -- I MEAN, LA IS THREE TIMES AS LARGE AS US, NEW YORK IS EIGHT TIMES AS LARGE AS US, AND SO WE HAVE, IN PART, KIND OF DONE THIS TO OURSELVES WHEN WE LOOK AT THE AMOUNT OF SPRAWL THAT WE ARE NOW HAVING TO MAINTAIN. 
          SO PART OF THE CONVERSATION THAT WE DID HAVE YESTERDAY IS WHAT ARE SOME POLICY APPROACHES THAT CAN BE HELPFUL AS WE THINK ABOUT THE ONGOING MAINTENANCE COST, JUST OF WHAT WE HAVE NOW. 
          AND IF WE WANTED TO MITIGATE THOSE MOVING FORWARD. 
          SO I UNDERSTAND WE'RE, YOU KNOW, LOOKING AT WHAT WE'VE GOT TO MAINTAIN NOW, BUT THERE ARE OPPORTUNITIES TO HELP OURSELF MOVING FORWARD. 
          I THINK WHAT -- AS WE ARE LOOKING AT THIS, AND THEN ALSO UNDERSTANDING THAT CPS WILL COME TO US LATER, SIMILARLY, WITH A RATE INCREASE AND A JUSTIFICATION, DOUG, CAN YOU LAY FLAT FOR THE BODY HERE THAT YOU'RE USING THE SAME PLANNING ASSUMPTIONS AS CPS WHEN IT COMES TO GROWTH, 
          CORRECT? >> YES. I THINK OUR GROWTH PROJECTIONS ARE VERY SIMILAR. AGAIN, WE HAVE A MEETING NEXT WEEK WITH BEN AND CPS TO TALK ABOUT WHAT WE TALKED ABOUT THE OTHER DAY ABOUT LARGE VOLUME IN PARTICULAR DATA-CENTER GROWTH, MAKE SURE WE'RE ALL ON THE SAME PAGE. THEY HAVE A SLIGHTLY DIFFERENT SERVICE TERRITORY THAN WE DO, SO THEY MAY BE IMPACTED TO A DEGREE THAT WE ARE NOT, BUT WE DO NEED TO MAKE SURE THAT WE'RE -- WE HAVE THOSE CONSISTENT 
          PROJECTIONS, BUT RIGHT NOW, YES. >> MAYOR JONES: OKAY. 
          THANK YOU. ONE THING ALSO THAT YOU MIGHT BE THINKING ABOUT, I WAS THINKING ABOUT IT AS WE WERE LISTENING TO THE BRIEFING, AND FRANKLY, IN SOME OF THE OTHER BOARD MEETINGS, THERE'S THE COST OF SERVICE STUDY THAT WAS CONDUCTED, AND THAT IS HELPFUL TO UNDERSTAND, YOU KNOW, WHAT IS THE COST OF PROVIDING SERVICE, THAT'S ONE THING. THE OTHER THING, THOUGH, AS WE'VE TALKED ABOUT, IS THE IMPORTANCE OF CONSIDERING WAYS WE MIGHT MODIFY BEHAVIOR IN THE INTEREST OF CONSERVATION, ET CETERA, RIGHT? SO THIS IS SOMETHING THAT I RAISED WITH THE BOARD YESTERDAY IN TERMS OF HOW WE MIGHT -- HOW WE MIGHT IDENTIFY WHAT THAT APPROACH LOOKS LIKE, AND MAYBE IT LOOKS DIFFERENT 
          [01:00:02]
THAN WHAT SOME OF THE RECOMMENDATIONS ARE OUT OF THE COST OF SERVICE. 
          AGAIN, THAT SENSITIVITY ANALYSIS THAT HELPS US UNDERSTAND, YES, CUSTOMER X, WHETHER THEY BE RESIDENTIAL OR COMMERCIAL, MAY BE PROVIDING -- OR CONSUMING THIS LEVEL OF WATER, BUT WHAT IS THAT -- WHAT IS THAT NUMBER OR WHAT IS THAT COST, RATHER, THAT INCENTIVIZES THEM TO CHANGE THEIR BEHAVIOR, WHICH IS THEN ULTIMATELY BETTER FOR US IN THE LONG RUN IF THEY'RE CONSERVING, AND FRANKLY, PUTTING LESS STRAIN ON OUR ENTIRE INFRASTRUCTURE. I DID NOT GET AN ANSWER IN TERMS OF WHEN WE WOULD GET THAT, BUT I KNOW THE SAWS TEAM IS WORKING TO HELP US UNDERSTAND WHAT THAT MIGHT LOOK LIKE. CORRECT, DOUG? 
          >> YES. >> MAYOR JONES: OKAY. I APPRECIATE IT. 
          THANKS. AND JUST TO LEVEL SET WITH EVERYBODY ELSE, AS WE LOOK AT KIND OF OPTIONS HERE, RIGHT, OBVIOUSLY THERE'S THE FIVE-YEAR PLAN, 3.2 BILLION. I DID ASK YESTERDAY FOR AN APPROACH THAT ALLOWS US TO -- IF WE WANTED TO, JUST LOOK AT WHAT ARE THOSE THINGS ASSOCIATED WITH FULFILLING MANDATES, ONE. 
          AND THEN, TWO, ADDRESSING THOSE MOST AT-RISK PROJECTS, RIGHT? IT DOESN'T JUMP OUT AT YOU AT THE -- FROM THE PRESENTATION, BUT IF WE THINK -- I THINK WE HAD AN UNDERSTANDING OF THE FLOOR, THEN WE COULD -- THAT WOULD HELP US AS WE UNDERSTAND, OKAY, SO THIS IS THE MINIMUM. 
          WHAT DOES IT THEN LOOK LIKE OVER TIME. AND CERTAINLY, AS WE ARE DEALING WITH TODAY NOT SIGNING OURSELVES UP POTENTIALLY FOR A LONGER COMMITMENT GIVEN WE'RE DEALING WITH SOME OF THE WORST ECONOMIC FACTORS, IF WE HAD AN IDEA OF WHAT IS ABSOLUTELY NECESSARY AND THEN THE SHORTEST AMOUNT OF TIME COMMITTING OURSELVES TO THAT, I THINK THAT GIVES US THE GREATEST FLEXIBILITY AS WE TRY TO GET MORE CERTAINTY ABOUT WHAT THE ECONOMY'S GOING TO LOOK LIKE MOVING FORWARD. I THINK AS WE ALSO HAVE DISCUSSED, THINKING ABOUT THIS IN THE CONTEXT OF OUR LEGISLATIVE AGENDA, AS YOU HEARD, DOUG MENTIONED WE WERE ON THE HOOK FOR THE IMPLEMENTATION OF SB 3 WHICH WAS THE NEED TO PROVIDE GENERATORS, 340 MILLION. AND AS A RESULT OF THAT, SOME OF THE PROJECTS THAT WOULD HAVE BEEN ADDRESSED CAME OUT OF THAT FUND, THAT THAT 340 MILLION CAME OUT OF OUR CAPITAL FUND, SO, YOU KNOW, NO ONE'S SAYING THAT RESILIENCE IS A BAD THING, BUT UNDERSTANDING THAT WE MAY GET THESE THINGS THAT IMPACT OUR ABILITY TO DO THE PROJECTS AT THE SCOPE, ON THE TIMELINE THAT WE INITIALLY FORECASTED, BUT NOW SOME OF THOSE PROJECTS THAT WERE BUMPED, WE'RE HAVING TO DO THEM AT A TIME AS MENTIONED WHEN COSTS ARE MUCH HIGHER THAN WE WOULD HAVE EXPECTED. 
          OKAY. I'LL TURN TO SOME OF MY COLLEAGUES. 
          AND, AGAIN, THANK YOU FOR GOING SO IN DEPTH. I MEAN, THIS IS OBVIOUSLY SOMETHING THAT WAS PRESENTED TO THE BOARD AND WOULD HAVE BEEN PART OF, YOU KNOW, ANY PRESENTATION BEFORE THIS BODY ABOUT A RATE INCREASE, SO REALLY APPRECIATE YOU GOING A LITTLE BIT DEEPER THAN YOU TRADITIONALLY HAVE IN THE PAST, AS WE'RE ALL CONCERNED WITH THE ECONOMIC PICTURE FOR OUR MOST VULNERABLE. OKAY. 
          >> GAVITO: THANK YOU, MAYOR. I'M REALLY QUICK GOING TO AGREE. I THINK WHEN WE'RE LOOKING AT THE RATE INCREASES, THE LAST COUPLE OF SLIDES SEEING WHAT IS KIND OF BARE BONES NEEDED, I THINK WILL BE HELPFUL FOR US. IT'S NO SURPRISE THAT MY ISSUE IS WATER LEAKS. 
          AND FOR ME I'M NOT INHERENTLY OPPOSED TO RATE INCREASES. 
          BUT THEY NEED TO BE WARRANTED. AND SO SOMETIMES THAT'S DIFFICULT TO DO WHEN WE'RE SEEING, IN DISTRICT 7 WE'RE SEEING WATER UP AND DOWN OUR STREETS. AND SO, YOU KNOW, WE KNOW THAT IN 2024, SAWS LOST ALMOST 20 BILLION GALLONS OF WATER IN WATER LEAKS. I THINK COUNCILMAN WHYTE AND I WERE TALKING ABOUT A TEXAS TRIBUNE ARTICLE. I THINK WE'RE THE SECOND HIGHEST MAJOR CITY IN TEXAS WITH WATER LOSS. DO Y'ALL KNOW THAT? 
          >> DONOVAN HEADS UP OUR WATER SUPPLY. >> THE TRIBUNE ARTICLE I THINK YOU'RE REFERENCING WAS FROM 2023. WE HAVE HAD OVER A 10% DECREASE IN THOSE NUMBERS AND WE HAVE DONE A WHOLE LOT BETTER OVER THE LAST COUPLE OF YEARS. THOSE OTHER CITIES AREN'T FACING THE DROUGHT AND IT'S 
          REALLY THE DROUGHT THAT HAS DRIVEN THAT. >> GAVITO: I THINK ABOUT THIS AND MAYBE Y'ALL HAVE THE ANSWER. IF WE HAD BILLED FOR THOSE 20 BILLION GALLONS OF WATER, COULD WE HAVE POTENTIALLY OFFSET THIS CUSTOMER RATE INCREASE? IT'S A LITTLE BIT RHETORICAL BUT A LITTLE BIT PUSHING FOR AN ANSWER. YOU KNOW, ALL OF US ARE ACCOUNTABLE TO OUR RESIDENTS AND WHEN WE'RE SEEING THAT MUCH WATER LOSS ON OUR STREETS AND THEN ASKING 
          [01:05:01]
RESIDENTS TO ESSENTIALLY PAY FOR IT, THAT, YOU KNOW, SOMETHING IS NOT SITTING 
          RIGHT. >> WELL, IF WE HAD BUILT -- WE HAVEN'T DONE THAT ANALYSIS. I DON'T HAVE ANY IDEA WHAT IT WOULD HAVE TAKEN. 
          WE NOR IS ANY CITY EVER GOING TO GET TO ZERO IN TERMS OF WATER LOSS. 
          ESPECIALLY WHEN YOU HAVE OVER 600,000 CUSTOMER CONNECTIONS ON OUR WATER SYSTEM. IF WE HAD BUILT FOR THAT, OBVIOUSLY OUR CIP WOULD HAVE NEEDED TO HAVE BEEN GREATER IN PRIOR YEARS WHICH PROBABLY WOULD HAVE CAUSED OUR RATES TO BE HIGHER THAN THEY ARE TODAY. WE MIGHT NOT HAVE HAD THE RATE INCREASE BUT THE RATES WOULD PROBABLY ALREADY BE ESCALATED IN TODAY'S 
          DOLLARS. >> GAVITO: RIGHT. I KNOW Y'ALL AREN'T GOING TO GET TO ZERO BUT WE'RE ASKING SAWS TO BE BETTER. AGAIN, WE SEE THE WATER GOING UP AND DOWN OUR STREETS. IT IS A SCARCE RESOURCE AND IT BECOMES A VERY FRUSTRATING NARRATIVE FOR DISTRICT 7 RESIDENTS AND I THINK OTHER PARTS OF THE CITY SEE AND FEEL IT TOO. WE'RE SEEING WATER LEAKS -- SOMETIMES IN THE PAST IT TOOK UP TO TWO WEEKS TO FIX. AND WATER IS A SCARCE RESOURCE. AND SO ASKING RESIDENTS TO PAY FOR SOMETHING WHEN IT'S LITERALLY FLOWING DOWN OUR STREETS, IT JUST BECOMES TOUGH AND IT'S UPSETTING. 
          AND WE HEAR ABOUT IT CONSTANTLY AT MONTHLY COFFEES WITH THE COUNCILWOMAN. DID YOU WANT TO SAY SOMETHING? 
          >> WHAT I WANTED TO SAY WAS, NUMBER ONE, WE AGREE WITH YOU. 
          WE AGREE WE CANNOT AFFORD TO LOSE THIS WATER. WE CAN'T AFFORD, FROM A WATER SUPPLY PERSPECTIVE, FROM WHAT WE'RE ASKING FOR OUR CUSTOMERS. 
          >> MAYOR JONES: PLEASE PAUSE THE TIME. THANKS. 
          >> BUT ALSO JUST WHAT I WANTED TO ADD IS OUR TARGETS. 
          YOU ASKED ABOUT WHERE WE WERE. IN 2023, WE WERE IN TERRIBLE SHAPE. IT WAS A TERRIBLE DROUGHT. WE DIDN'T HAVE ENOUGH CREWS SO YOUR POINT ABOUT TWO WEEKS, ABSOLUTELY. WHERE WE ARE TODAY IS IT'S TAKING TWO DAYS TO RESPOND. AND FOR PRIORITY ONE, THEY'RE THERE WITHIN AN HOUR. AND IN TERMS OF OUR TARGET, WE WERE AT 20, WE'RE CUTTING THAT NUMBER IN HALF WITHIN THE NEXT TEN YEARS, IF NOT SOONER. 
          >> GAVITO: YEAH, AND THANK YOU. THANK YOU FOR THAT INFORMATION. AGAIN, I'M GLAD TO SEE THE PROGRESS. 
          AND I AGREE THAT WE NEED TO CONTINUE IN THE RIGHT DIRECTION. 
          BUT OUR RESIDENTS ARE FEELING THE SQUEEZE AND IT'S HARD TO RECONCILE THEM FEELING MORE OF A SQUEEZE WHEN WE'RE SEEING, AGAIN, A SCARCE RESOURCE UP AND DOWN OUR STREETS. I GET THAT WE'RE NEVER GOING TO GET AT ZERO BUT WE ABSOLUTELY NEED TO DO AND BE BETTER, ESPECIALLY IF WE'RE ASKING RESIDENTS TO PAY FOR IT. THE OTHER THING I THINK OF IS I KIND OF SEE IT AS A DOUBLE WHAMMY BECAUSE NOT ONLY ARE WE HAVING THE SCARCE RESOURCE UP AND DOWN OUR STREETS, BUT, YOU KNOW, I THINK ABOUT DISTRICT 7. WE HAVE SOME OF THE HIGHEST F-RATED STREETS IN THE CITY. AND SO THEN YOU'RE THINKING ABOUT, OKAY, IF THESE WATER LEAKS ARE CONSTANTLY ON OUR STREETS AND WE'RE CONSTANTLY HAVING TO FIGHT EACH OTHER FOR INFRASTRUCTURE DOLLARS TO FIX THESE STREETS, YOU KNOW, I'M KIND OF CURIOUS HOW MUCH MONEY THE CITY IS INVESTING IN OUR STREETS TO FIX IT BECAUSE WATER IS ON OUR STREETS. ERIK, IT IS A LITTLE BIT RHETORICAL -- SORRY. 
          BEN. YOU KNOW, I'M CURIOUS HOW MUCH MONEY PUBLIC WORKS IS SPENDING ON OUR STREETS TO CONSTANTLY FIX THESE STREETS THAT WATER'S ON. 
          >> GORZELL: WE HAVE TO FOLLOW UP. I DON'T HAVE THE ANSWER TO YOUR QUESTION. YOUR QUESTION SPECIFICALLY IS THE WATER LEAK CAUSING 
          DAMAGE TO THE INFRASTRUCTURE THAT WE'RE REPAIRING? >> GAVITO: THE QUESTION IS WE KNOW THAT WATER DOES CAUSE DAMAGE ON OUR STREETS. AND SO NOT ONLY ARE WE LOSING THE VALUE OF THE WATER ON OUR STREETS, BUT WE'RE ALSO CAUSING DISREPAIR TO OUR STREETS ON A MUCH MORE FREQUENT BASIS. IT WOULD BE INTERESTING IF WE CAN QUANTIFY THAT. I'M NOT SURE WE CAN BUT THAT'S AN IMPORTANT POINT WE NEED TO TAKE INTO CONSIDERATION. NOT ONLY ARE WE LOSING THE VALUE OF THE WATER ON OUR STREETS AND NOT BEING ABLE TO SELL OR BILL FOR THAT BUT WE'RE ALSO WREAKING HAVOC ON OUR STREETS. I THINK THAT NEEDS TO BE TAKEN INTO CONSIDERATION AS WELL. YOU KNOW, I'LL JUST LEAVE IT AT THAT. CONVINCING RESIDENTS OF A RATE INCREASE, AGAIN WHEN EVERYONE IS FEELING THE SQUEEZE, IS A TOUGH SELL, ESPECIALLY WHEN WE'RE SEEING RESIDENTS DRIVE ON BUMPY STREETS AND WATER ON THEM. THAT, AGAIN, IS A DAILY OCCURRENCE FOR RESIDENTS IN DISTRICT 7. I'M JUST GOING TO LEAVE IT AT THAT. THOSE ARE ALL MY COMMENTS. THANKS. 
          >> MAYOR JONES: DO YOU WANT TO ADD ANYTHING, DOUG? IN CASE IT HELPS INFORMS 
          [01:10:02]
ANYONE ELSE'S COMMENTS. BEN, CAN YOU SPEAK TO -- DOUG TALKED ABOUT THE POTENTIAL IMPACT TO OUR RATINGS, IF SOMETHING IS NOT IMPROVED AS A RESULT OF THE CIP THAT IS PUT FORWARD. AND THAT POTENTIALLY NOT PASSING. 
          BUT A DING TO SAWS' RATING DOES WHAT TO THE CITY'S RATING? 
          >> GORZELL: WELL, I THINK IT DEPENDS ON WHAT CAUSED THAT IMPACT TO SAWS' RATING BUT IT COULD IMPACT OUR RATING AS WELL. SO IN A SCENARIO WHERE A BUSINESS CASE HAS BEEN PRESENTED TO THE CITY AS THE OWNER OF THE UTILITY, THE BUSINESS CASE IS THERE TO SUPPORT SOME LEVEL OF RATE INCREASE TO ADDRESS CRITICAL INFRASTRUCTURE NEEDS FOR THE UTILITY. IF THAT WERE NOT APPROVED AND WE DIDN'T HAVE A STRONG REASON FOR WHY THAT'S NOT GETTING APPROVED, THAT COULD 
          PERMEATE AND IMPACT US AS WELL. >> MAYOR JONES: COUNCILMAN 
          WHYTE. >> WHYTE: THANK YOU, MAYOR. 
          DO WE HAVE A WATER SHORTAGE HERE? >> NO. 
          NO. >> WHYTE: OKAY. SO SEEING AS WE DON'T HAVE A 
          WATER SHORTAGE -- >> MAYOR JONES: TECHNICALLY WE'RE IN A 
          DROUGHT. >> BUT WE'RE MANAGING IT. >> WHYTE: WE DON'T HAVE A 
          WATER SUPPLY SHORTAGE. RIGHT? >> CORRECT. 
          >> WHYTE: WHAT ARE WE DOING TO MAXIMIZE ALL OF OUR REVENUE HERE? AND LET ME BEGIN WITH VISTA RIDGE. HOW MUCH WATER ARE WE 
          SELLING? >> FROM VISTA RIDGE? >> WHYTE: YEAH. 
          >> ZERO. >> WHYTE: NONE. >> WE'RE USING IT ALL. 
          >> WHYTE: WE'RE USING IT ALL. >> EVERY DROP. 
          SOMETIMES IT DOESN'T EVEN GET OUT OF STONE OAK. >> WHYTE: WHAT DOES IT 
          COST US TO OPERATE VISTA RIDGE? >> SO VISTA RIDGE IS A P3 AND SO IT'S A LITTLE BIT DISCONNECTED. A COMPANY RUNS IT, A PRIVATE-SECTOR COMPANY RUNS IT. WE HOLD OUT OUR CUP AND WE PAY FOR WHATEVER WATER THEY PUT IN THE CUP. IT COSTS US $2150 PER ACRE FOOT. THEY SEND ABOUT 50,000 ACRE FEET PER YEAR. 
          SO THE COST IS ROUGHLY -- I FORGET THE -- ROUGHLY IN THE $100 MILLION. 
          >> IT'S IN THAT WATER OPTIONS CATEGORY THAT WE CITED, THAT $144 MILLION IN WATER OPTIONS. THE SINGLE LARGEST CHUNK OF THAT IS VISTA RIDGE. 
          THEN WHEN THERE'S SOME UTILITY COSTS, SOME OTHER COSTS ASSOCIATED WITH IT. 
          BUT THAT IS $100 MILLION OF IT RELATES TO VISTA RIDGE. >> WHYTE: IT COSTS US IN 
          THE NEIGHBORHOOD OF $100 MILLION. >> YES, ON AN ANNUAL BASIS. 
          >> WHYTE: DO WE HAVE THE REVENUE FROM THERE TO COVER THAT? 
          >> YES. YES. YES. 
          RIGHT NOW WE HAVE A DEBT COVERAGE RATIO OF 1.8 TIMES. WE HAVEN'T GOT OUR FINAL YEAR-END RESULTS, BUT IT SHOULD COME OUT AROUND 1.8 TIMES. 
          OUR TARGET IS NO LESS THAN 1.7 TIMES. >> WHYTE: WHAT ABOUT CASH ON HAND? HOW MUCH CASH ON HAND DO WE HAVE? 
          >> WE HAVE -- WHEN YOU LOOK AT OUR YEAR-END FINANCIAL STATEMENTS, WE SHOWED A STATEMENT TO THE BOARD THE OTHER DAY -- OR SLIDE TO THE BOARD. 
          WHICH SHOWS AT THE END OF NOVEMBER -- WE DON'T HAVE DECEMBER. 
          WE JUST GOT IT CLOSED. I HAVEN'T SEEN THE RESULTS YET. 
          SO THE END OF NOVEMBER OF 2025, WE HAD BASICALLY $1.5 BILLION WORTH OF CASH. 
          OF THAT, ABOUT $1.1 BILLION OF THAT IS COMMITTED. WE EITHER HAVE TO BE -- WHEN WE TAKE A PROJECT TO OUR BOARD, JUST LIKE WHEN YOU BRING A PROJECT TO COUNCIL TO GET APPROVAL, A CAPITAL PROJECT, YOU EITHER NEED TO HAVE THE FUNDS IN THE BANK OR YOU NEED TO HAVE AVAILABLE CAPACITY TO DRAW ON YOUR COMMERCIAL PAPER PROGRAM. WE HAVE ABOUT $1.1 BILLION WORTH OF PROJECTS THAT NEED TO GET FUNDED. SO THAT LEAVES ABOUT $300 MILLION OF CASH THAT WE HAVE. THAT WE CAN APPLY TOWARDS ADDITIONAL 3.2 BILLION OF THOSE COMING UP IN THE NEXT FIVE YEARS. YOU CAN EITHER USE THAT $300 MILLION OF CASH TO INCREASE YOUR CASH FUNDING FOR CIP OR YOU CAN USE IT TO PAY DOWN DEBT, WHICH WE HAVE DONE OVER THE LAST SEVERAL YEARS. 
          >> WHYTE: WE HAVE BEEN TALKING ABOUT THE BOND AGENCIES. 
          WHAT DO THEY LOOK FOR IN TERMS OF HOW MUCH CASH ON HAND THEY WOULD LIKE TO SEE? 
          >> I THINK MY SLIDE I HAD ON --E SLIDE RIGHT BEFORE? 56? 
          [01:15:09]
SO THAT MOODY'S RATING, IF WE GO BELOW THAT THEY'RE SAYING HERE'S SOMETHING THAT COULD LEAD YOU TO GET DOWNGRADED. SO WE'RE AT 1.8. 
          WE'VE BEEN TRENDING -- WE HAVE BEEN ABOVE 2 AND WE'RE TRENDING DOWNWARD. 
          IF WE DON'T GET A RATE ADJUSTMENT THIS YEAR AND EXECUTE THE CAPITAL PROGRAM THAT ANDREA LAID OUT, I THINK WE WOULD FALL SHORT OF THAT 1.7 TIMES. 
          >> WHYTE: BACK TO MY ORIGINAL QUESTION. WITH THAT AS A BASE, WHAT ARE WE DOING TO MAXIMIZE REVENUE, IN TERMS OF DO WE SELL -- ARE WE SELLING WATER 
          ANYWHERE ELSE? ANYTHING WE'RE DOING? >> WE DON'T HAVE THE ABILITY, LIKE CPS DOES, TO SELL WATER. THERE'S NOT A SEPARATE GRID. 
          >> WHYTE: EVERY DROP WE'VE GOT WE ARE USING. >> USING OR STORAGE INTO OUR AQUIFER STORAGE AND RECOVERY PROJECT. RIGHT NOW WE'RE IN A POSITION WHERE WE'RE DRAWING DOWN ON THE AQUIFER STORAGE AND RECOVERY. 
          IT'S GOT ABOUT 120,000 ACRE FEET IN IT RIGHT NOW. BUT WE WERE UP LIKE 200,000 
          A COUPLE OF YEARS BACK. SO WE'VE BEEN DRAWING DOWN. >> WHYTE: AND YOU 
          ATTRIBUTE THAT TO THE DROUGHT? >> 
          YEAR? ALMOST 40% LAST YEAR. >> WHYTE: IF WE GO TO THE CAROLLO PRESENTATION NOW. I THINK IT'S SLIDE 26, RIGHT? CAROLLO SAYS, LISTEN, CURRENT RATES AND CHARGES AREN'T SUFFICIENT TO MEET THE REVENUE REQUIREMENT NEEDS. IF YOU GO BACK A SLIDE TO 25, WHEN YOU BRING THIS COMPANY IN TO DO THAT, THEY'RE IN PHASE 1. 
          WHAT ARE THE ANNUAL REVENUE REQUIREMENTS? YOU GUYS GIVE CAROLLO THAT 
          INFORMATION. >> 
          >> WHYTE: RIGHT. BUT YOU GUYS HAD TO TELL CAROLLO HERE ARE THE 
          REQUIREMENTS FOR THEM TO DO THE STUDY. >> YEAH. 
          THEY EVALUATED OUR -- AGAIN, WE PUT FORTH THIS IS WHAT WE THINK. 
          YOU LOOK AT IT AND DETERMINE WHETHER OR NOT YOU THINK IT'S REASONABLE. 
          >> WHYTE: WELL, YOU SAID HERE'S WHAT OUR REQUIREMENTS ARE, WHAT WE WANT TO DO. 
          AND THEN BASED ON THAT, THEY LOOK AT YOUR FINANCIALS AND EVERYTHING AND DETERMINE 
          WHETHER OR NOT THE RATES ARE -- >> CORRECT. THEY ARE NOT EVALUATING 
          WHETWHETHER OR NOT THIS CIP PROJECT NEEDS TO GET DONE. >> WHYTE: IT'S BASED ON WHAT YOU TELL THEM IS COMING. THAT'S WHAT I WANT TO MOVE TO -- AND THE MAYOR TOUCHED ON IT A BIT, AS DID COUNCILWOMAN ALDERETE GAVITO. BUT REALLY WE NEED TO LOOK AT THE NEEDS VERSUS THE WANTS. AND I'LL TELL YOU THAT A LOT IN THAT CAPITAL PROGRAM, TO ME, LOOKED LIKE IT WAS REALLY DEFERRED MAINTENANCE. IS THAT ACCURATE? 
          >> WELL, I WILL SAY THAT WE HAD A VERY LARGE -- THE MAYOR TALKED ABOUT THE CAPITAL PROGRAM. BUT WE HAD BOTH THE APA CONSENT DECREE, THE VISTA RIDGE, AS WELL AS BRACKISH DESAL. I TOLD THE BOARD YESTERDAY I THINK THERE MAY HAVE BEEN SOME OPPORTUNITIES WHERE THINGS GOT SQUEEZED OUT. 
          SO THEY GOT DEFERRED. OUR WASTEWATER TREATMENT PLANTS, WE DID NOT SPEND THE MONEY BECAUSE WE WERE INVOLVED IN A $1.3 BILLION CONSENT DECREE WITH RESPECT 
          TO OUR COLLECTION SYSTEM. >> WHYTE: I HEAR YOU ON THAT AND I APPRECIATE THE BACKGROUND. BUT, AGAIN, IS IT FAIR TO SAY -- I THINK A LOT OF WHAT I SAW IN THE CAPITAL PROGRAM, IT'S ON THE MAINTENANCE SIDE. 
          IF NOT ALL. >> IT'S REPLACEMENT. REPLACING AGING EQUIPMENT. 
          >> WHYTE: RIGHT. AND SO I GUESS WHERE I'M GOING IS I WOULD LIKE TO SEE US MOVE TO A MORE PROACTIVE APPROACH HERE WHERE WE CAN START -- AND YOU'RE NODDING 
          YOUR HEAD. >> WE WOULD LOVE THAT. WE WOULD LOVE THAT. 
          >> WHYTE: I KNOW -- AND I'VE TALKED WITH JOANN AND ROBERT ABOUT THIS CPS ENERGY OPERATIONAL EFFICIENCY REVIEW THAT THEY DID A FEW YEARS AGO. 
          AND IN THE EXECUTIVE SUMMARY ONE OF THE LINES THAT THIS COMPANY FOUND THAT -- CPS ENERGY FOUND A UTILITY MOVING OUT OF A REACTIVE AND INTO A PROACTIVE APPROACH. 
          [01:20:03]
AND SO MY POINT IS IT LOOKS LIKE WE'RE DOING A LOT OF CATCH-UP HERE AND THIS CATCH-UP IS NOW CAUSING US TO GO TO THE CITIZENS AGAIN AND ASK THEM TO PAY MORE. 
          WHEREAS IF WE WERE BEING MORE PROACTIVE, IF WE COULD GET TO A SPOT WHERE WE WERE SELLING WATER, LET'S SAY, WE WOULDN'T HAVE THESE REVENUE NEEDS THAT NOW AGAIN ARE CAUSING US TO GO TO THE CITIZENS AND ASK THEM TO PAY MORE. 
          TO RAISE THEIR RATES. LET ME ASK YOU THIS, AS MY TIME'S RUNNING DOWN. 
          SENATE JOINT RESOLUTION 7 , THIS WATER FUND THAT THE STATE IS PUTTING TOGETHER. 
          HAVE WE LOOKED AT ACCESSING THAT FOR SOME OF THE PROJECTS HERE? 
          >> WE WILL. THAT IS COMING AND IT WILL BE IN A FEW YEARS. 
          THAT'S IN TWO TRANCHES. THERE IS A SMALL TRANCHE OF IT THAT'S HAPPENING OVER THE NEXT YEAR. WE'RE ACTUALLY MAKING COMMENTS. 
          TODAY WE'RE MAKING COMMENTS ABOUT THE RULES. AND SO WE WILL LOOK AT THOSE FUNDS WHEN THEY BECOME AVAILABLE. IT'S A LITTLE BIT DIFFICULT. 
          SOME OF THOSE HAVE A LOT OF STRINGS. SOMETIMES THEY INCREASE THE COST OF A PROJECT AND INCREASE THE TIMELINES. SOMETIMES IT'S DIFFICULT BUT THAT IS CERTAINLY A SOURCE OF FUNDS THAT WE'LL CONTINUE TO LOOK AT. 
          >> COUNCILMAN, SO WE DO HAVE THE ABILITY TO DO WHOLESALE REQUIRE BUT THAT WOULD REQUIRE US TO GET A PIPE TO TAKE THAT ENTITY THAT WE WOULD SELL TO . 
          WE WOULD BE BACK HERE COMING FOR A CAPITAL PROGRAM TO CREATE THE STRUCTURE TO SELL THAT WATER TO THOSE COMMUNITIES. OTHER THAN THAT, WE SELL TO 
          OUR CUSTOMERS. >> WHYTE: AGAIN, THESE ARE THE KIND OF CAPITAL PROJECTS 
          THAT I WOULD LOVE TO SEE US LOOKING AT. >> WE WOULD LOVE TO BE THERE AS WELL EXCEPT WE HAVE A SYSTEM THAT'S VERY OLD AND IS IN NEED OF REPLACEMENT, WHICH IS WHAT WE'RE BRINGING FORWARD TO YOU TODAY AFTER THESE ITEMS HAVE BEEN PRIORITIZED IN THE VARIOUS MASTER PLANS FOR ALL OF THE SYSTEMS. 
          WATER AND WASTEWATER. >> WHYTE: AND SO THE PROJECTS THAT WERE LISTED ON THE SLIDES THAT WE DON'T HAVE BUT THAT Y'ALL ADDED, THOSE ARE TOP PRIORITY FOR 
          THIS RATE HIKE. >> GENERATED FROM THE VARIOUS MASTER PLANS FOR EITHER WATER OR WASTEWATER. 
          AND THEN WHAT WE'RE SHOWING YOU ARE THOSE MAJOR PROJECTS --E 35 MILLION WAS THE THRESHOLD --E MAJOR. WE'RE SHOWING YOU THE MAJOR ONES PER YEAR IN ADDITION TO THE ANNUAL CIP THAT'S REQUIRED TO MEET ALL OF THOSE MASTER PLANS TO KEEP 
          THE SYSTEM FROM FAILURE. >> WHYTE: IN THAT PROPOSED FOUR-YEAR MODEL THAT WAS TALKED ABOUT IN THE MEDIA, IF THAT WERE TO GO FORWARD, WHAT'S THE TOTAL DOLLAR AMOUNT IN REVENUE YOU'RE LOOKING TO CREATE? WHAT'S THE DOLLAR AMOUNT 
          YOU'RE LOOKING TO CREATE THROUGH THE RATE HIKE? >> HE'S ASKING FOR THE COMPARABLE REVENUE, AFTER WE MAKE THE FOUR-YEAR CAPITAL, WHAT IS THE REVENUE PROJECTION FOR THAT FOUR-YEAR PERIOD, WITH THE CUSTOMER GROWTH ASSUMPTIONS? 
          WE CAN GET THAT NUMBER. >> MAYOR JONES: COUNCILMAN WHYTE, IF YOU HAVE ADDITIONAL QUESTIONS, GO IN THE SECOND ROUND. COUNCILMEMBER 
          MCKEE-RODRIGUEZ. >> MCKEE-RODRIGUEZ: THANK YOU FOR THE PRESENTATION. 
          YOU GOT THROUGH IT A LOT FASTER THAN I THOUGHT YOU WOULD. 
          I WANT TO FIRST CONVEY I APPRECIATE THE BOARD COMING TO US WITH THIS REQUEST AND WITH THIS PLAN. I CAN DEFINITELY APPRECIATE THE GRAVITY OF THE NEED THAT YOU'VE EXPRESSED TODAY. AND I TAKE VERY SERIOUSLY EVERY PROPOSED RATE INCREASE THAT COMES BEFORE US. AND AT ANY GIVEN TIME WE'RE WEIGHING A NUMBER OF FACTORS, INCLUDING CURRENT ECONOMIC CONDITIONS FOR OUR RESIDENTS AND FOR RATEPAYERS. WE'RE ALSO THINKING ABOUT THE NEED AND HOW DO WE BEST PROTECT AND SERVE THEM. THAT BEING SAID, THERE ARE A FEW THINGS THAT COME TO MIND WHEN I THINK ABOUT SAWS. AND SEVERAL YEARS AGO I THINK WE WERE IN A VERY DIFFERENT PLACE, I THINK. I WOULD HAVE CONSIDERED CPS THE NAUGHTY CHILD AND SAWS TO BE THE GOOD ONE. I THINK WE'VE SEEN WITH CPS A LOT OF CHANGES, ESPECIALLY WITH THE CHANGE IN LEADERSHIP. I THINK THEY'RE MOVING IN A VERY DIFFERENT DIRECTION THAN THEY ONCE WERE. WITH SAWS, WHEN I THINK ABOUT THESE PAST FEW YEARS THAT I HAVE BEEN ON COUNCIL, I THINK ABOUT A LOT OF CONFLICT AND A LOT OF UNNECESSARY TURMOIL. SO I THINK ABOUT THE COORDINATION OF PROJECTS THAT LEADS TO COMPLICATIONS, DELAYS, AND COLLAPSE OF TRUST, SPECIFICALLY AS IT RELATES TO OUR BOND PROGRAM. I KNOW THE COUNCIL MEMBERS HAVE BROUGHT FORWARD A NUMBER OF POTENTIAL SOLUTIONS AND IDEAS AS IT RELATES TO COORDINATION WITH SAWS AND HOW WE IDENTIFY UTILITIES AND THE LIKE. 
          [01:25:05]
I ALSO THINK ABOUT THE SHUT DOWN OF WATER IN APARTMENT COMPLEXES THAT IMPACTS RESIDENTS MORE THAN IT DOES THE PROPERTY MANAGEMENT COMPANIES. 
          THAT WAS A CONFLICT THAT I HAD VERY DIRECTLY WITH ROBERT PUENTE. 
          AND I ALSO THINK ABOUT SOMETHING THAT WE'RE GOING THROUGH RIGHT NOW. 
          IT WAS SO INTERESTING TO HEAR COUNCILMEMBER ALDERETE GAVITO BRING THIS UP. 
          BUT AT GOVERNMENT HILL RIGHT NOW WE'RE DEALING WITH THIS WATER LEAK THAT'S LEADING TO ENDLESS WATER BEING WASTED AND YOU HAVE A DEVELOPER THAT WANTS TO RESOLVE THE SOLUTION, HAS AN IDEA AND A PROPOSAL FOR SUCH. AND IT FEELS LIKE THEY'RE BEING BATTLED EVERY STEP OF THE WAY. AND THROUGH ALL OF THESE THINGS IT FEELS AS THOUGH SAWS' LEADERSHIP HAS BEEN UNWILLING TO COMPROMISE AND COME TO SOLUTIONS TO ADDRESS SOME OF THESE ISSUES. AND SO WHEN I THINK OF WHAT IT WOULD TAKE TO GET ME TO SUPPORT A RATE INCREASE, I THINK IT COMES DOWN TO LEADERSHIP. A CHANGE IN PHILOSOPHY OR PRACTICE. 
          I DON'T KNOW, BUT RIGHT NOW I STRUGGLE WITH THE CONFLICTS THAT I'VE HAD WITH SAWS' LEADERSHIP AND THAT RESIDENTS AND DEVELOPERS AND THE BUSINESS COMMUNITY, THE VERY REAL CONFLICTS WE HAVE HAD THAT HAVE LED TO NOT JUST THREE ISSUES THAT I 
          NAMED, BUT A SUITE OF OTHERS THAT GO UNNAMED TODAY. >> COUNCILMAN, I'M AWARE OF THE GOVERNMENT HILL ISSUE. I WOULD BE HAPPY TO SPEAK WITH YOU THIS AFTERNOON ABOUT THAT OR AT A TIME THAT'S CONVENIENT FOR YOU. THE BOARD HAS BEEN BRIEFED ON THAT SITUATION. THE REST OF YOUR COMMENTS, WE HEAR YOU. 
          >> THANK YOU. THANK YOU, MAYOR. >> MAYOR JONES: THE SHORT 
          OF IT IS THAT'S NOT SAWS' WATER, IS OUR ANALYSIS. >> OUR ANALYSIS IS IT'S GROUNDWATER. IT'S BEEN TESTED A NUMBER OF TIMES AND IT IS NOT THE TREATED WATER THAT SAWS PROVIDES TO OUR CUSTOMERS. BUT WE CAN CERTAINLY TALK 
          WITH YOU MORE ABOUT THAT. >> MCKEE-RODRIGUEZ: CAN YOU ADDRESS THE FLUORIDE AND OTHER CHEMICALS THAT HAVE BEEN FOUND. THE WATER IS TREATED IN SOME 
          WAY. >> DONOVAN COULD PROBABLY SPEAK TO THIS BETTER, BUT JUST IN OUR GROUNDWATER, FLUORIDE IS PRESENT IN OUR GROUNDWATER BEFORE IT'S DELIVERED BY SAWS. THOSE CHEMICALS ARE NORMALLY FOUND IN OUR GROUNDWATER 
          SOURCES. >> MCKEE-RODRIGUEZ: IT IS MY UNDERSTANDING ALSO THAT THE DEVELOPER HAS APPROACHED SAWS WITH IDEAS IN HOPES TO BE ABLE TO CONNECT. 
          AND THAT'S BEEN DENIED. WE CAN TAKE THIS OFFLINE BUT THE SHORT OF IT IS THAT THERE'S CONFLICT THAT GOES BEYOND THIS ONE THING. IT'S CONSISTENT. 
          >> GIVEN THAT IT'S GROUNDWATER, WE PROBABLY NEED ANOTHER PARTNER AT THE TABLE AND THAT'S PROBABLY GOING TO INVOLVE THE CITY OF SAN ANTONIO, SAWS, AND THAT 
          OWNER. >> MAYOR JONES: COUNCILWOMAN VIAGRAN. 
          >> VIAGRAN: THANK YOU, MAYOR. THANK YOU FOR THE PRESENTATION. THANK YOU FOR BEING HERE. MARY LOU FOR REPRESENTING OUR SIDE OF TOWN. AND THEN TO OUR NEWEST BOARD MEMBERS, TERESA, GREG, AND ADRIANNE, THANK YOU FOR JUMPING IN. I THINK THE CITY NEEDS TO BUILD A COALITION TO ADDRESS KEY TOPICS REGARDING WATER INFRASTRUCTURE NEEDS . 
          I THINK AS WE LOOK GLOBALLY AND NATIONALLY, WATER AND WATER CONSERVATION IS KEY. 
          WE KNOW THAT IT IS A RESOURCE THAT WE NEED TO TAKE CARE OF. 
          WE HAVE SEEN THAT BECAUSE WE FACE A DROUGHT. BUT I THINK THIS IS SOMETHING THAT IS THROUGHOUT OTHER COMMUNITIES. AND THAT OTHER COMMUNITIES SEE WHAT WE DO IN TERMS OF THE AQUIFER LEVEL, WHAT DAYS WE HAVE THAT WE ARE GETTING THIS PAID ATTENTION TO. SO BUILDING EFFECTIVE PARTNERSHIPS WITH EFFECTIVE COMMUNICATION WITH THE STATE AND COUNTY SHOULD BE PRIORITY FOR THE CITY REGARDING THE FUTURE OF OUR WATER RESOURCES. I WANT TO GO AND DIG INTO SOME OF THE SLIDES. I APPRECIATE THAT Y'ALL ARE -- 2018, 2019 WAS THE LAST ASK FOR A RATE HIKE. IN 2023 WE DID SEE A RATE RESTRUCTURING AND SOME BILLS WENT UP FOR PRIMARILY BUSINESSES. WHILE I HEAR MY COUNCIL MEMBERS SAYING RATE HIKE, I THINK WE CAN LOOK AT THIS AS A RATE RESTRUCTURING IF WE TAKE OUR TIME AND LOOK AT THE POSSIBILITIES WE HAVE TO HELP INCENTIVIZE PEOPLE CONSERVING WATER BECAUSE I THINK THAT IS GOING TO BE KEY. 
          BECAUSE AS I MOVE ON -- LET ME FIND THE SLIDE. AS WE MOVE ON TO THE ELECTRIC METERS, WHICH ARE VERY HELPFUL, I WANT TO MOVE ON TO THE SLIDE REGARDING 
          [01:30:04]
THE USAGE, WHICH WAS -- I HAVE IT AS PAGE 30. I DON'T KNOW IF IT'S A DIFFERENT SLIDE. AS WE LOOK AT THIS FOR THE EXISTING RESIDENTIAL WATER, IF WE HAVE A HOME THAT IS USING MORE THAN 18,000 GALLONS, I'M READY TO CHARGE THEM MORE. 
          LIKE TO SEE. WHAT IS OUR EXPECTATION FOR A FAMILY OF FOUR IN TERMS OF WATER USAGE? I THINK Y'ALL HAVE DONE A GOOD JOB OF THAT. 
          IF YOU ARE USING MORE THAN THAT, IS THAT BECAUSE INSTEAD OF BUYING THE ENERGY-EFFICIENT DISHWASHER OR APPLIANCES YOU BOUGHT THE LUXURY APPLIANCES THAT USE MORE BECAUSE THEY OFFER MORE SERVICES? AND IF THAT IS YOUR CHOICE, THEN I THINK YOU SHOULD PAY MORE FOR WATER. AND THEN AS WE LOOK AT THE UPLIFT USES, I APPRECIATE -- THIS HAS GONE ON FOR THREE YEARS, SINCE 2023. 
          WHY WE HAVE PEOPLE IN OUR UPLIFT PROGRAM USING MORE THAN 10,000 GALLONS, WE NEED TO FIGURE THAT OUT. THAT'S TOO MUCH. AND THIS IS PAGE 33. 
          UPLIFT RESIDENTIAL WATER BILL FREQUENCY. AND I UNDERSTAND THAT YOU'RE SAYING, OH, THEY MAY HAVE APPLIANCES THAT DON'T WORK OR THEY'RE LARGER HOUSEHOLDS. WE NEED TO FIGURE THAT OUT. WHAT THAT COMMUNICATES TO ME IS THERE MAY BE SOME LEAKS THERE THEY ARE NOT ADDRESSING. 
          I APPRECIATE COUNCILWOMAN CASTILLO AND HER PLUMBERS TO PEOPLE PROGRAM BUT WE NEED TO ADDRESS THAT BECAUSE THAT IS 35% RIGHT THERE. AND THAT'S UNACCEPTABLE. 
          TO BE ON A RESIDENTIAL PROGRAM AND THEN TO BE BASICALLY WASTING WATER LIKE THAT. SO I WANT TO MAKE SURE THAT WE PRIORITIZE THAT AS WE 
          MOVE FORWARD. >> YESTERDAY WE DISCUSSED THAT AT THE BOARD MEETING. 
          GAVINO'S TEAM, NOW THAT ALL OF OUR METERS HAVE BEEN DEPLOYED, WE NOW CAN SEE THOSE CUSTOMERS WITH HIGH USAGE. GAVINO'S TEAM WILL BE REACHING OUT TO THAT CUSTOMER BASE TO ASK THEM IF THEY WOULD LIKE TO -- FOR US TO TAKE A LOOK AT THE POTENTIAL FOR LEAKS AND MAKE THOSE PROGRAMS AVAILABLE TO 
          THEM. >> VIAGRAN: I WOULD LIKE YOU TO COMMUNICATE WITH US IN TERMS OF DISTRICT-WISE HOW WE CAN HELP. DISTRICT 3, IN PARTICULAR, THE MAJORITY OF HOUSES ARE PIER AND BEAM AND OVER 100 YEARS OLD. 
          THERE'S GOING TO BE PROBLEMS THERE AND I WANT TO MAKE SURE WE'RE ADDRESSING IT. 
          BECAUSE ASKING MY RESIDENTS -- AND THAT'S WHY I'M LIKE WE HAVE A RATE RESTRUCTURE. IF WE TELL THEM THIS IS WHAT YOU'VE BEEN DOING WRONG BUT IF YOU START DOING IT RIGHT AND REDUCE IT, AT THE END OF THE MONTH YOU GET A REBATE FOR COMING IN LOWER THAN WHAT WAS EXPECTED. I WOULD LIKE TO SEE US LOOK AT THAT. I WOULD ALSO, ON THE SALARIES AND BENEFITS PER EMPLOYEE ON PAGE -- FOR ME IT'S 38. I'M NOT SURE WHAT IT IS ON THE SLIDE. I WOULD LIKE -- AND YOU CAN GET THIS TO ME LATER. 
          THE LOWEST PAID AND THE HIGHEST PAID EMPLOYEE. I APPRECIATE THE AVERAGE SALARY BUT I WOULD LIKE THE LOWEST AND HIGHEST-PAID EMPLOYEE. 
          AND I WOULD LIKE TO SEE WHERE DID THE MAJORITY OF EMPLOYEES SIT. 
          I HAVE THE TEAM THAT COMES INTO MY OFFICE ONCE A WEEK AND WORK WITH MY RESIDENTS TO HELP WITH THEIR BILLS. AMAZING GROUP. AND I WOULD LIKE TO SEE -- I'M HOPING THEY'RE WELL COMPENSATED AND THAT WE SEE THAT TEAM GO HIGHER. 
          GAVINO KNOWS EXACTLY WHO I'M TALKING ABOUT. AND THEN THE CONTRACTUAL SERVICES, AS WE LOOK AT THIS AND WE TAKE ANY SORT OF RATE RESTRUCTURING OUT TO THE PUBLIC, I THINK IT'S IMPORTANT THAT WE TELL THEM THESE ARE CONTRACTUAL SERVICES THAT WE ANTICIPATE HAPPENING IN THE FUTURE. WHETHER IT'S LEGAL, WHETHER IT'S MAINTENANCE BECAUSE OF THE TEMPERATURES, THE EXTREME HEAT. 
          I THINK WE NEED TO TAKE THEM OUT THERE. BECAUSE WHAT I WANT MY RESIDENTS AND THE RESIDENTIAL RATEPAYERS TO SEE IS REAL ACTUAL GROWTH AND REAL ACTUAL TANGIBLE THINGS THAT IMPROVE THEIR LIFE. 
          SAWS WENT IN TO SOUTHCROSS, BECAUSE THEY WERE PUTTING IN NEW PIPES, THEY FIXED THE 
          [01:35:01]
STREET. EVERYBODY IN THE NEIGHBORHOOD NOTICED THAT. 
          WE WERE GETTING NEW WATER MAINS AND THE STREET WAS FIXED IN THE MEANTIME. 
          SO THEY CAN APPRECIATE THAT. IF IT'S TOO TECHNICAL WHERE IT'S LIKE, OH, THIS IS THE FANCY THING WE PUT OVER HERE TO MONITOR IT, THEY'RE NOT GOING TO THINK IT'S WORTH THAT RATE INCREASE OR THAT RATE RESTRUCTURING. THE OTHER THING IN TERMS OF CIP -- ANDREA, I DON'T KNOW IF YOU CAN COME UP AND ANSWER THIS QUESTION. 
          I KNOW YOU HAVE THE OVER-50 PIPES. DO YOU HAVE, ESPECIALLY IN THE SOUTHSIDE FROM THE WEST TO THE EAST, WE STILL HAVE PEOPLE ON SEPTIC TANKS AND WE STILL HAVE PEOPLE THAT ARE -- AND THIS IS PERSONAL EXPERIENCE. 
          MY MOM HAD A WELL ON ONE OF OUR PROPERTIES OUT IN WHAT WE CALLED THE COUNTRY. 
          BUT OUT BY LOSOYA. DO WE HAVE A LIST OF AREAS THAT ARE WITHIN THE CITY LIMITS OR WITHIN THE CUSTOMER SERVICE AREAS OF SAWS THAT ARE STILL ON SEPTIC TANKS OR STILL ON, YOU KNOW, USING WELL SERVICE AND NOT CONNECTED TO A LINE. 
          DO WE HAVE THAT SOMEWHERE IN OUR DATA AND INFORMATION? >> WE HAVE INFORMATION ON CUSTOMERS WHO HAVE A WATER ACCOUNT AND NOT SEWER AND THEY'RE ON SEPTIC. 
          WE HAVE BEEN WORKING WITH THE COUNTY TO GET A BETTER UNDERSTANDING. 
          IF YOU'RE ON SEPTIC, YOU'RE SUPPOSED TO GET A PERMIT THROUGH THE COUNTY. 
          TO GET MAYBE SOME INFORMATION FROM THE COUNTY OF THE FOLKS THEY HAVE ON 
          SEPTIC. >> VIAGRAN: AS WE ANNEX IN -- AO WANT THEM TO USE LESS. 
          BUT AT THE SAME TIME WE WANT MORE CUSTOMERS, YOU KNOW, TO UTILIZE OUR SEWER AND OUR WATER SYSTEM. SO I THINK THAT'S IMPORTANT TO SEE, TO UNDERSTAND WHERE WE DON'T HAVE THE INFRASTRUCTURE. THAT IF THE INFRASTRUCTURE WAS THERE, WE COULD HAVE SOMEBODY BUILD. I KNOW WE HAVE OUR DEVELOPERS GO IN AND DO THAT. BUT IF WE HAD IT MORE EASILY ATTAINABLE IN SOME OF OUR RURAL AREAS -- I CALL IT THE RURAL AREAS BECAUSE WE HAVE IT ALL. BUT IN DISTRICT 3 AND 4, IN PARTICULAR, WHERE PEOPLE COULD BUILD AND REALLY WHAT WOULD BE THE EASIEST WAY FOR THEM TO GET INTO THE WASTEWATER AREAS. AND I KNOW THAT WE TALKED ABOUT SOME OF THE PROJECTS GOT PUSHED AWAY BECAUSE OF WASTEWATER. BUT I THINK THAT'S KIND OF ALL RIGHT BECAUSE THE TECHNOLOGY HAS MOVED. THAT WHERE WE CAN GO IN OUR WASTEWATER AND HOW WE TREAT WATER OPPORTUNITY THERE. SO MAYBE THIS IS THE OPPORTUNITY THAT WE INVEST IN THAT TOO. BUT I THINK PART OF IT IS GETTING PEOPLE THAT AREN'T CONNECTED HOOKED UP INTO THE SYSTEM. IF WE COULD GET THAT, START LOOKING AT THAT, I WOULD APPRECIATE IT. THANK YOU. 
          THANK YOU, MAYOR. >> MAYOR JONES: COUNCILWOMAN SPEARS. 
          >> SPEARS: THANK YOU, MAYOR. THANK YOU VERY MUCH FOR THE PRESENTATION. I DID FIND IT PRETTY THOROUGH. 
          THERE WERE SEVERAL THINGS IN OUR MEETING ON THE 21ST I THOUGHT WE WERE GOING TO GET IN ADVANCE. I WISH I HAD MORE TIME TO REALLY STUDY THOSE DOCUMENTS, BUT WE DIDN'T REALLY GET THOSE. I DO APPRECIATE WHAT YOU DID HERE TODAY. I TOO WAS SURPRISED IT WENT SO QUICKLY. 
          IS THERE A WAY WE CAN GET A COPY OF THE CAROLLO STUDY, THE ACTUAL STUDY? 
          >> ISSUED IT TO THE PUBLIC UTILITY STAFF. BUT WE COULD CERTAINLY DO 
          THAT. >> GORZELL: COUNCILWOMAN, I HAVE THAT DOCUMENT. 
          WE HAVE RECEIVED IT BUT IT IS IN DRAFT SO I'LL COORDINATE WITH SAWS IN 
          GETTING THAT OVER TO YOU. >> SPEARS: OKAY. GREAT. 
          I THINK THAT WOULD BE REALLY HELPFUL. A LOT OF WHAT I WANT TO SAY TODAY ARE THINGS THAT I'VE HEARD DIRECTLY FROM MY CONSTITUENTS. 
          AND I'M JUST GOING TO RELAY THEIR CONCERNS TO YOU. A LOT OF THEM ARE THE SAME CONCERNS I HAVE. I EXPECTED REALLY TO SEE SOME TANGIBLE EXPECTATIONS AND METRICS OF WHAT WE'RE GOING TO BE SEEING WITH THIS RATE INCREASE. 
          MEANING MAPS. WHAT DOES THIS PROJECT LOOK LIKE? HOW LONG WILL IT TAKE? WHEN WILL IT BE EXECUTED? WHERE ARE THESE LEAKS? HOW ARE WE GOING TO ADDRESS THEM? WHAT CONTRACTORS ARE WE USING? BECAUSE A LOT OF THE TIMES I GET COMPLAINTS ABOUT THE PROJECTS AND THE CONTRACTORS THAT ARE BEING USED NOT FINISHING ON TIME AND ON 
          [01:40:02]
BUDGET AND GETTING INTO LITIGATION. AND THEY ARE UPSET AND THEY CALL ME BECAUSE THEY ALSO DON'T KNOW IT'S A SAWS PROJECT, WHICH IS ANOTHER THING. I WOULD LIKE TO SEE BETTER SIGNAGE SO THEY KNOW THIS IS SAWS AND THIS IS WHAT THEY'RE DOING. THEY'RE BLINDSIDED, THEIR ROADS ARE SHUT DOWN. WHAT SHOULD HAVE TAKEN THREE MONTHS, SIX MONTHS IS TAKING 
          TWO YEARS. >> SO WE HAVE NOT BID ANY OF THESE PROJECTS. 
          WE DON'T HAVE ANY CONTRACTORS ON BOARD. THE PROJECTS FOR 2026 HAVE BEEN DESIGNED GREAT AND I THINK EVERYONE WANTS TO SEE THIS. CERTAINLY MY RESIDENTS. 
          AND YOU'RE WELCOME TO COME AND PRESENT AND DO THAT. I KNOW ROBERT SAID HE WOULD COME AND SHOW THEM. BUT THAT'S WHAT THEY'RE ASKING ME FOR. 
          YOU KNOW, BEFORE WE ASK PEOPLE TO PAY MORE MONEY, WE JUST REALLY HAVE TO BE VERY CLEAR ABOUT WHAT THEY'RE GOING TO BE GETTING IN RETURN. 
          BECAUSE, YOU KNOW, IF THEY'RE SEEING ALL THIS WATER LOSS, THEY'RE THINKING THAT THEY'RE JUST PAYING FOR THAT WATER LOSS. AND WHAT COUNCILWOMAN ALDERETE GAVITO WAS SAYING IS EXACTLY WHAT I'M HEARING AS WELL. 
          WE HAVE TO BE ABLE TO EXPLAIN THIS. I KNOW THAT WE'VE DONE A LOT OF CAPITAL INVESTMENT, WHICH IS ANOTHER QUESTION. DO YOU HAVE A LOT OF FLEXIBILITY THERE ON THE CAPITAL IMPROVEMENT SCHEDULE? 
          CAN THEY BE MOVED AROUND AT ALL, BASED ON NEED? >> TOTAL OR ON WATER 
          REPLACEMENT? >> SPEARS: TOTAL. >> WE HAVE VERY LITTLE FLEXIBILITY. JUST DUE TO THE AGE OF THE INFRASTRUCTURE. 
          >> SPEARS: I NOTICED TOO THAT THERE WASN'T A LOT OF TALK ABOUT GENERAL CLASS USAGE HERE. A LOT ABOUT RESIDENTIAL. MY RESIDENTS ARE TELLING ME THAT THEIR RATES HAVE GONE WAY UP WITH THE SMART METERS GOING IN. 
          THEIR BILLS HAVE GONE UP. THEY WANT TO SEE TANGIBLE RESULTS, MEASURABLE RESULTS ABOUT -- AND THEY WANT TO BE ABLE TO GIVE FEEDBACK TOO. BECAUSE THEY'RE UPSET AND THEY DON'T KNOW HOW TO GIVE FEEDBACK ABOUT THEIR SMART METERS AND WHY ALL OF THEIR BILLS HAVE GONE UP. AND ALSO, ARE WE TRACKING THAT AT ALL? I KNOW IT WAS A HUGE INVESTMENT BUT THAT'S ONE OF THE BIGGEST COMPLAINTS I GET IS THAT THEY'RE GETTING HIGHER WATER BILLS EVER SINCE THE METER WENT IN. 
          >> WE HAVEN'T SEEN AN OVERALL SIGNIFICANT INCREASE. 
          WE HAVE SEEN A SLIGHT UPTICK IN USAGE. I THINK I SHOWED ONE SLIDE WHERE WE SHOWED THE USAGE PER YEAR. AND WE SAW A SLIGHT UPTICK IN USAGE, 1% OR 2%. BUT NOWHERE -- SOMETIMES PEOPLE HAD A SICK METER AND NOW THEY HAVE A METER THAT'S FUNCTIONING. MAYBE THEY WERE USING THAT 
          WATER ALL ALONG AND -- >> SPEARS: IT COULD BE. >> AND NOW THEY ARE SEEING THE RESULTS OF A MORE ACCURATE READ ON THAT METER. SYSTEMWIDE, WE'RE TALKING 1% 
          TO 2%. >> SPEARS: THAT COULD BE TRUE BUT I DON'T KNOW HOW TO EXPLAIN THAT TO MY RESIDENTS. WHEN THEY WERE TOLD THIS IS GOING TO BE ACCURATE. THIS IS GOING TO BE BETTER FOR YOU. 
          AND THEN, BOOM. YOUR BILL GOES WAY UP. >> YOU CAN SEE, IF YOU FLIP ON THE IRRIGATION SYSTEM, YOU CAN SEE THE USAGE, HOW MUCH WATER THAT'S USING EACH TIME YOU RUN THAT IRRIGATION SYSTEM. SO YOU HAVE A BETTER IDEA IF I USE 10,000 GALLONS OR 15,000 GALLONS, WHAT DID YOU USE THAT FOR. 
          >> I KNOW WE MET WITH JAQUELINE KLEIN FROM YOUR DISTRICT, AND SHE GAVE US SPECIFIC CUSTOMERS. WE WERE ABLE TO WALK THROUGH. 
          UNFORTUNATELY ON THEIR SIDE IT WAS A CUSTOMER LEAK. IF YOU GIVE US ANY NAMES AND IF THEY WANT TO REACH OUT TO US -- I KNOW WE GAVE THEM MY INFORMATION. 
          WE HAVE GIVEN HER ALL THE INFORMATION. IF THEY HAVE ANY INFORMATION THAT WE COULD LOOK AT IN THEIR ACCOUNT, MOST OF THE TIME WE COME OUT AND LOOK, IT'S A CUSTOMER-SIDE LEAK. WE CAN HELP PINPOINT IT. WE HELP PINPOINT INSIDE AND OUTSIDE LEAKS. WHETHER IT'S A WATER HEATER, WATER SOFTENING, IRRIGATION SYSTEM LEAK. WE HAVE EXPERTS THAT CAN HELP PINPOINT IT. 
          IF YOU GIVE US ANY INFORMATION FROM ANY COUNCIL DISTRICT, WE WILL COME IN 
          AND LOOK. >> SPEARS: I HEAR THAT. I APPRECIATE THAT. 
          AND I DO WANT TO COME PRESENT THAT TO THE RESIDENTS. 
          I JUST THINK IF THERE'S A WAY TO EXPLAIN THIS TO THEM THAT THIS IS SOMEHOW BETTER. 
          BECAUSE IT'S AN OVERALL SENTIMENT ABOUT IT. >> AGAIN, IF YOUR RESIDENTS, IF WE HAVE CURRENT CONTACT INFORMATION, THEY ARE RECEIVING THESE CONTINUOUS USAGE ALERTS. AGAIN, ANY LEAK, THEY WOULD BE NOTIFIED. 
          THEY NEVER WERE NOTIFIED BEFORE UNTIL THEY GOT THEIR BILL. 
          SO 30, 40 DAYS INTO IT WHEN THEY ACTUALLY OPENED THEIR BILL, THEY WOULD SEE THE ISSUE. WITHIN 48 HOURS WE ARE LETTING THEM KNOW WHEN THEY HAVE A LEAK. AS LONG AS WE HAVE BEEN GIVEN A CURRENT CONTACT 
          INFORMATION. >> 
          [01:45:08]
704-SAWS. YOU CAN ALWAYS CONTACT GAVINO. 
          AGAIN, THEY CAN COME THROUGH GAVINO. WE WILL GET YOU AN ANSWER. 
          >> SPEARS: SO I WANT TO -- THAT LEADS ME INTO I WANT TO DOUBLE DOWN ON WHAT COUNCILWOMAN VIAGRAN SAID ABOUT IF THERE ARE PEOPLE ON THE UPLIFT PROGRAM AND THEY ARE GOING OVER THE AVERAGE, I THINK WE DO NEED TO ADDRESS THAT. 
          BECAUSE IT'S JUST NOT FAIR TO EVERYONE ELSE. OKAY. 
          YEAH. BACK TO THE GENERAL CLASS USE. 
          SO THEIR RATES ARE MEASURED IS IT BY PRIOR-YEAR USAGE? >> YEAH. 
          THERE'S A DIFFERENT RATE STRUCTURE. BUSINESSES ARE SO DIVERSE. 
          WE HAVE LITTLE MOM AND POP THAT USES VERY LITTLE WATER. AND YOU HAVE VALERO OR MICROSOFT OR WHOMEVER THAT USES A LOT OF WATER. AND SO WE LOOK AT YOUR USAGE AND IF YOU USED 5 MILLION GALLONS LAST YEAR, 6 MILLION GALLONS, YOU KNOW, THAT EQUATES TO $500,000 A MONTH. THAT'S WHAT YOUR BASE IS AND 
          ANYTHING ABOVE THAT BASE GETS CHARGED A HIGHER RATE . >> SPEARS: DO YOU HAVE DATA YOU CAN SHOW SO THAT THE RESIDENTIAL -- IS THERE A GAP BETWEEN OVERALL REVENUES ACCEPTED FROM RESIDENTIAL VERSUS GENERAL CLASS? 
          A DISPARITY THERE. >> EACH CLASS COVERS THEIR COST OF SERVICE. 
          AND THAT'S IN THAT CAROLLO RATE STUDY. THAT'S ONE OF THE THINGS THEY GO THROUGH AND ANALYZE. MAKE SURE EACH CLASS PAYS THEIR FAIR SHARE OF THE COSTS OF THE SYSTEM AND THE COSTS THAT THEY BURDEN THE SYSTEM WITH. 
          BUT THERE ARE DIFFERENCES -- AGAIN, IN OUR RESIDENTIAL CLASS YOU SAW THAT TIERING. 
          WE DO HAVE HIGHER TIERS FOR PEOPLE WHO USE HIGHER AMOUNTS OF WATER. 
          WE'RE TRYING TO ENCOURAGE PEOPLE TO USE LESS OUT IN THOSE HIGH VOLUMES. 
          THAT REALLY PUTS A STRESS ON THE SYSTEM. JUST LIKE COMING HOME AND FLIPPING ON YOUR AIR-CONDITIONING AT THE SAME TIME AT 6:00 AT NIGHT. 
          IF EVERYBODY TURNS ON THEIR IRRIGATION SYSTEM AT THE SAME TIME, IT DRAINS OUR TANKS AND WE HAVE TO BUILD BIGGER INFRASTRUCTURE IN ORDER TO MANAGE THAT DEMAND. 
          >> SPEARS: I THINK WHAT I'M THINKING ABOUT IS IF I'M IN AN APARTMENT AND I DON'T REALLY SEE MY BILL, RIGHT? IT'S SORT OF UNDER A COMMERCIAL RATE. 
          IT'S HARD TO THINK ABOUT AS MUCH CONSERVATION AS IF I'M IN A HOME AND I HAVE TO THINK ABOUT MY APPLIANCES. IT'S JUST A DIFFERENT THOUGHT PROCESS, RIGHT? 
          >> IT IS. >> SPEARS: DO YOU KNOW WHERE I'M GOING WITH THAT? 
          >> THAT IS ONE OF THE CHALLENGES WE HAVE IS THAT OUR APARTMENTS, WE HAVE ONE MASTER METER FOR THE APARTMENT. AND SO THERE MIGHT BE 200 TENANTS IN THAT APARTMENT. THEY CAN MAKE CHANGES IN THEIR BEHAVIOR AND THEY 
          DON'T FEEL LIKE IT BENEFITS THEM. >> SPEARS: RIGHT. 
          I MEAN, THERE'S PROBABLY A LOT OF WAYS WE CAN ADDRESS THAT. 
          >> WE LOOKED AT SPLITTING THAT CLASS OUT AS A SEPARATE CLASS OF CUSTOMERS BUT THAT WAS GOING TO CAUSE THEIR RATES TO GO UP FOR THOSE PEOPLE THAT LIVE IN APARTMENTS. AND SO WE DECIDED NOT TO DO THAT. 
          >> SPEARS: SO KIND OF MY LAST THING. I STILL THINK AN OUTSIDE EFFICIENCY OPERATIONAL AUDIT WOULD BE HELPFUL. I WOULD LIKE US TO SEE WHERE WE CAN CUT. IF WE'RE GOING TO ASK FOR MORE, I'D LIKE TO SEE CUTS AND I'D ALSO LIKE TO SEE ALL ABOUT THE SALARIES AND BENEFITS FOR OUR EXECUTIVE MANAGEMENT TEAM AND HOW THOSE COSTS HAVE CHANGED OVER TIME . 
          SO THOSE ARE JUST A COUPLE OTHER THINGS I'M LOOKING AT. I AGREE. 
          WE CAN FIND SOME OTHER BUCKETS OF MONEY AS WELL, IF WE DO THIS AUDIT, AND LOOK 
          FOR MORE CUTS. THANK YOU. >> MAYOR JONES: 
          COUNCILWOMAN MEZA GONZALEZ. >> GONZALEZ: THANK YOU. THANK YOU FOR THE PRESENTATION. I GUESS I'LL JUST START KIND OF WITH THE GENERAL QUESTION. WHAT HAPPENS IF THIS RATE INCREASE IS NOT APPROVED? 
          WHAT HAPPENS TO THE HEALTH OF OUR WATER? >> WELL, WE WOULD HAVE TO GO BACK AND DECIDE, YOU KNOW, WHAT WE WOULD ADJUST. BECAUSE WE WOULD NEED TO MAKE SOME ADJUSTMENTS. I SAID WE WERE GOING TO STRUGGLE TO MEET OUR TARGETED DEBT COVERAGE. WE WOULD HAVE TO CONSIDER, AS PART OF THAT WE NEED TO THINK ABOUT, OKAY, ARE WE GOING TO GET A POTENTIAL -- I DON'T THINK WE WILL GET A DOWNGRADE RIGHT AWAY BUT WE COULD GET SOMETHING -- YOU COULD BE PUT ON CREDIT WATCH 
          NEGATIVE OUTLOOK. >> I WOULD ADD FROM THE BOARD'S POINT OF VIEW, I WOULD BEGIN TO QUESTION THE STAFF BRINGING FORWARD UTILITY SERVICE AGREEMENTS. 
          [01:50:03]
BECAUSE WHAT THEY DO FROM THE DEVELOPMENT COMMUNITY IS JUST CONTINUE TO ADD CUSTOMERS. IF WE WERE NOT IN A POSITION TO HAVE A RATE STRUCTURE TO SUPPORT GROWTH, I WOULD REALLY BEGIN TO CHALLENGE SOME OF THE UTILITY SERVICE AGREEMENTS THAT ARE BROUGHT FORWARD TO SAWS ASKING FOR MORE CUSTOMERS. 
          >> GONZALEZ: UNDERSTOOD. THANK YOU. AND ON SLIDE 26, I THINK YOU 
          SAID YOU WERE GOING TO PROVIDE THE -- EXCUSE ME? >> YEAH, THE REPORT. 
          >> GONZALEZ: THE REPORT. I WANTED SOME BACKGROUND MORE ON PHASE 2 OF THAT REPORT. BUT THAT WILL BE IN THAT FULL REPORT THAT YOU'RE PROVIDING. SO I WON'T ASK THAT. BUT ON SLIDE 26, CAN YOU KIND OF SHARE MORE ABOUT KIND OF THE STAGGERED RATE APPROACH VERSUS JUST A FLAT RATE ACROSS THE BOARD OF 6% ACROSS THE BOARD FOR THE NEXT FIVE YEARS? 
          >> WHICH WAS THE SLIDE? >> GONZALEZ: 26. >> OKAY. 
          SO THIS IS WHAT THEY DEFINED AS THE REVENUE REQUIREMENTS IF WE HAD 6% A YEAR. 
          WE COULD FIGURE OUT HOW TO MAKE THAT WORK. BUT I'M NOT SURE I'M 
          ANSWERING YOUR QUESTION. >> GONZALEZ: I'M JUST TRYING TO UNDERSTAND THE STAGGERED APPROACH OF STARTING HIGH, ESSENTIALLY AT THE 7.9 VERSUS A FLAT 
          RATE ACROSS THE BOARD EVERY YEAR. >> VERY SIMILAR, CAROLLO ALSO DID THE LATEST HOUSTON RATE STUDY AS WELL. AND THEY CAME UP WITH A VERY SIMILAR APPROACH. IT'S A FIVE-YEAR ANALYSIS. AND FOR HOUSTON, THEY DIDN'T WANT THE UP AND DOWN FOR THEIR CUSTOMERS EITHER. AND SO THEY DID A SMOOTHED-OUT APPROACH. NOW THE 7.9% FOR RESIDENTIAL FOR 2026 IS BASED ON, AS DOUG SAID, OUR REVENUE REQUIREMENTS. SO EVERYTHING THAT IF WE DIDN'T GET THE 7.9% FOR RESIDENTIAL IN 2026, IT'S A HIGHER NUMBER FOR 2027. 
          AND SO ON AND SO FORTH. SO THE 2.8% IN 2030 IS DEPENDENT UPON THE FOUR PREVIOUS RATES GOING INTO PLAY. SO ALL OF THOSE RATES WOULD NEED TO BE ADJUSTED IF WE DON'T GET THE 2026 OR '27, IT JUST GETS BIGGER AS WE GO 
          LATER DOWN. >> GONZALEZ: OKAY. THANK YOU FOR THAT. 
          ON SLIDE 47, IT SHOWS THE -- IS THERE A SCHEDULE TO GET THOSE WATER -- I THINK IT'S THE WATER MAINS THAT ARE MORE THAN 50 YEARS OLD, UPGRADED? 
          >> THERE IS A SCHEDULE TO REPLACE THE WATER MAINS THAT ARE BASED ON -- WE HAVE AN AI MODEL WHO LOOKS AT THE VULNERABILITY OF THOSE MAINS. 
          SO NOT ALL OF THEM ARE THE 50-YEAR-OLD MAINS BUT THEY'RE THE ONES THAT WE 
          KNOW ARE AT RISK FOR BREAK. >> GONZALEZ: DO YOU HAVE A GENERAL -- HOW MANY MILES 
          WOULD BE UPGRADED IF THERE WAS AN INCREASE? >> 56 MILES OVER THE NEXT 
          FOUR YEARS. >> GONZALEZ: AND THEN IF YOU'RE LOOKING THROUGH THE PROJECT DRIVERS, SLIDE 51 THROUGH 53, IT READS LIKE THERE IS -- WHETHER IT'S NEW STATE LAW OR REQUIREMENTS THAT ARE REQUIRING THESE CHANGES. 
          IS THERE ANY WAY THAT YOU CAN MAYBE PROVIDE A LIST OF WHAT'S REQUIRED NOW AS NEW STATE LAWS, NEW STATE REGULATIONS? I GUESS THROUGHOUT THIS PRESENTATION, IT'S AN INABILITY TO COMPLY WITH SB 4, POTENTIAL FAILURE RESULTING IN REGULATORY VIOLATIONS. NUTRITION LIMITS IMPOSED BY TCEQ. INABILITY TO COMPLY WITH MS-4. 
          IS THERE A WAY YOU CAN KIND OF PULL OUT THOSE THAT ARE COMING TO US BECAUSE OF NEW 
          STATE REGULATION OR TCEQ REQUIREMENTS? >> ABSOLUTELY. 
          AND SOME OF THESE -- JUST TO CLARIFY. IF WE DIDN'T DO THEM, WE WOULDN'T BE MEETING OUR EXISTING PERMIT WITH THE TCEQ. 
          BUT WE CAN SPECIFY THAT. YES. >> GONZALEZ: I THINK THAT WOULD BE HELPFUL BECAUSE I THINK IT DOES -- THERE ARE PROJECTS THAT ARE DELAYED BUT SOME OF THESE ARE ALSO BECAUSE OF NEW REQUIREMENTS, CORRECT, BY STATE LAW? 
          >> YES. >> GONZALEZ: AND THEN RELATED TO SB 3 -- I'M SORRY. THE TEXAS WATER DEVELOPMENT BOARD. 
          HAVE WE LOOKED AT ANY GRANT OPPORTUNITIES WITH THEM? >> AND WE HAVE -- WE SUBMIT 
          TYPICALLY EVERY YEAR. >> GONZALEZ: I WOULD HIT ON ANY OF THESE PROJECTS. 
          >> I DON'T KNOW IF WE SUBMITTED ON ANY THIS YEAR. BUT, YES, WE ARE ALWAYS LOOKING EVERY YEAR AT WHAT PROJECTS ARE A GOOD CANDIDATE TO MEET TWDB 
          [01:55:03]
          FUNDING. >> GONZALEZ: DO YOU HAVE A COLUMN IN THIS LIST OF 
          PROJECTS? >> WE CAN ADD THAT. >> GONZALEZ: YEAH, IF YOU CAN ADD THAT. STATE REGULATIONS, TCEQ REQUIREMENTS, ANY TEXAS 
          WATER DEVELOPMENT BOARD. >> THOSE ARE LOANS. THEY'RE NOT GRANTS. 
          >> GONZALEZ: EXCUSE ME. YOU'RE RIGHT. THEY'RE LOANS. 
          YOU'RE RIGHT. AND IF WE DID APPROVE THIS RATE, WOULD WE BE ABLE TO INCREASE ANY BOND CAPACITY FOR EDWARDS AQUIFER PROTECTION PROGRAM? 
          >> I'M GOING TO HAVE DOUG ASWER THAT. >> GORZELL: IT WOULD NOT IMPACT OUR CAPACITY ON THE EDWARD'S PROTECTION PROGRAM IF WE INCREASED SAWS RATES. 
          >> GONZALEZ: IT WOULDN'T ALLOW US TO BOND FOR MORE? >> GORZELL: NO. 
          THE SECURITY FOR THAT DEBT THAT WE USE IS THE SAWS TRANSFER. 
          THAT'S HOW WE GET TO THE LEGAL STATUTE IN TERMS OF HOW WE CAN ISSUE THAT DEBT. 
          BUT IT'S ESSENTIALLY COMING OUT OF THE GENERAL FUND. SO WE PROGRAMMED IN $100 MILLION OVER A TEN-YEAR PROGRAM . WE WOULDN'T BE LOOKING TO INCREASE THAT CAPACITY FOR THAT PROGRAM BASED ON AN INCREASE HERE. 
          >> GONZALEZ: THAT'S AGAIN FOR THE PRESENTATION. I THINK MOST OF MY COLLEAGUES HAVE SAID THIS, THAT THIS IS A TOUGH ASK FOR RESIDENTS. 
          WE ALL KNOW WHAT IT COSTS TO MAINTAIN OUR HOMES AND WE MAINTAIN AND THEN WE PLAN FOR THE FUTURE. EVERY ONE OF US DOES THIS IN SOME CAPACITY. 
          SO MAKING SURE THAT RESIDENTS REALLY UNDERSTAND I KNOW WE HAVE A TOWN HALL TOMORROW IN MY DISTRICT. AND I'VE TALKED TO MY COLLEAGUES ABOUT THIS. IF YOU CAN GET YOUR RESIDENTS TO GO ON A RAIN TO DRAIN TOUR, I'M PLANNING A SECOND ONE. BUT WE HAD 45 RESIDENTS COME OUT AT THE FIRST ONE. REALLY IMPACTFUL FOR RESIDENTS TO SEE CLOSE UP WHAT SAWS DOES EVERY DAY. AND SO I HIGHLY RECOMMEND THAT FOR RESIDENTS. 
          SAWS TAKES CARE OF ALL OF IT, ALL THE WORK. IT WORKED OUT FOR US. 
          BUT REALLY RECOMMEND THAT. THANK YOU AGAIN FOR THE PRESENTATION. 
          >> MAYOR JONES: COUNCILMAN GALVAN. >> GALVAN: THANK YOU, MAYOR. THANK YOU FOR THE PRESENTATION TODAY. 
          I KNOW IT'S A BIG ONE. I'M GOING TO PICK UP WHERE COUNCILMEMBER SPEARS AND VIAGRAN LEFT OFF, TALKING ABOUT THE GENERAL CLASS RATES. 
          I KNOW WE FOCUSED ON RESIDENTIAL ONES HERE. I WANTED TO ASK A QUICK QUESTION ON SLIDE 32, WHICH WOULD BE THE RESIDENTIAL WATER BILL FREQUENCY. 
          I JUST WANT TO MAKE SURE I'M UNDERSTANDING THIS SLIDE CORRECTLY, GIVEN THAT THE RESIDENTS ARE PAYING 45% -- RESIDENTIAL CUSTOMERS MAKE UP 45%  OF THE 4,000 GALLON 
          TIER. >> 45% OF OUR RESIDENTIAL CUSTOMER BILLS ISSUED OVER 
          THIS THREE-YEAR PERIOD NEVER GOT ABOVE 4,000 GALLONS. >> GALVAN: RIGHT. 
          >> THIS IS JUST RESIDENTIAL CUSTOMER BILLING. >> GALVAN: DO WE HAVE A 
          GENERAL CLASS ONE SIMILAR TO THIS? >> WE WOULD BUT IT'S A COMPLETELY DIFFERENT RATE STRUCTURE SO IT'S NOT 4,000 GALLONS. 
          BASE ACCESS RATE STRUCTURE. I COULD TELL YOU HOW MUCH GOT BILLED AT BASE BUT EACH ENTITY HAS A DIFFERENT BASE, DEPENDING ON HOW MUCH THEY USED IN THE PRIOR YEAR. 
          AGAIN, IF THEY USED 6 MILLION GALLONS IN THE PRIOR YEARS, THEIR BASE IS 
          500,000 GALLONS A MONTH. >> GALVAN: IS THERE A REASON WE DO YEAR BY YEAR 
          VERSUS MONTH BY MONTH? >> BECAUSE YEAR BY YEAR -- WE TRY TO FIGURE OUT IF THEY'RE PEAKING. IF THEY'RE PEAKING -- SO IF THEY USE 500,000 ONE MONTH BUT THEY USE 2 MILLION THE NEXT MONTH, THAT'S DIFFICULT FOR OUR SYSTEM. 
          WE TRY TO BLEND THAT OUT AND ANY TIME YOU HAVE THAT PEAK USAGE, THEY PAY MORE. 
          JUST LIKE A RESIDENTIAL CUSTOMER WOULD. >> GALVAN: THE PEAK USERS YEAR BY YEAR? IF THAT ONE IS HIGHER, IT'S GOING TO BE THEIR LOCKED 
          RATE? >> IF YOU DID IT MONTH BY MONTH, THEY WOULD BE VERY DIFFICULT TO BILL BECAUSE WE WOULD BE HAVING TO CHANGE THE BASE EVERY CYCLE. 
          SO THEIR BILL WOULD BE VERY UNPREDICTABLE. IF THEY USED 500,000 ONE MONTH, 2 MILLION THE NEXT. THE BASE IS 500,000. THEY USE 2 MILLION AND THEN THE BASE RESETS TO 2 MILLION AND THEY'RE BACK DOWN TO 500,000. 
          IT WOULD GET AWKWARD. >> GALVAN: BECAUSE THE RATE STRUCTURE IS SET FOR 
          DIFFERENT -- WHAT'S THE SPECIFIC RATE FOR THE BASE? >> WELL, THE BASE -- AND RESIDENTIAL CUSTOMERS, WE LOOK AT THIS AND, AGAIN, WE MAKE SURE, FROM A COST OF SERVICE PERSPECTIVE, THAT EACH CLASS IS COVERING ITS COST. 
          SO THEIR COSTS NEED TO COVER. WE TAKE THE TOTAL USAGE AND 
          [02:00:05]
FIGURE OUT, YOU KNOW, HOW MANY BILLS THEY HAVE BEEN ALLOCATED. 
          AND THAT HELPS DETERMINE WHAT THE BASE LEVEL IS. THAT BASE WOULD BE SOMEWHERE AKIN TO WHAT THE RESIDENTIAL CUSTOMERS ARE PAYING IN THOSE KIND OF FIRST TWO OR THREE BLOCKS. SO IF YOU LOOK AT BLOCK ONE USAGE FOR RESIDENTIAL, IT'S LOWER THAN THE BASE USAGE FOR GENERAL CLASS OR BUSINESS CLASS CUSTOMERS. 
          BUT BLOCK TWO WOULD BE CLOSER TO AVERAGE. AND THEN BLOCKS FOUR AND FIVE WOULD BE HIGHER ON THE RESIDENTIAL SIDE THAN THE BASE. 
          I CAN GET THE EXACT FIGURES FOR YOU, IF YOU WOULD LIKE. >> GALVAN: THAT WOULD BE GREAT. WHAT'S THE THOUGHT PROCESS FOR THE LOWER RATES FOR GENERAL CLASS -- SORRY. THE LOWER RATES ON THE BASE AS THEY CONTINUE TO INCREASE? WHAT'S THE THOUGHT PROCESS FOR THAT? GIVEN THE FACT THAT THEY'RE USING MORE WATER, I WAS WONDERING WHAT'S THE THOUGHT PROCESS OF REDUCING THEIR RATE COMPARED TO AN EQUIVALENT RATE FOR 
          RESIDENTIAL? >> DO YOU HAVE WHAT THE LOWEST GENERAL CLASS BASE 
          IS? >> YEAH. THE LOWEST WOULD BE 280 
          RIGHT NOW. THIS IS RECOMMENDED. >> IS THAT WATER DELIVERY 
          AND WATER SUPPLY? >> $5.80 FOR BOTH WATER DELIVERY AND WATER SUPPLY. 
          >> $5.80 PER THOUSAND. THAT'S THE LOWEST BLOCK FOR RESIDENTIAL WAS $2.64. 
          AND I THINK THE SECOND BLOCK WAS $4.80, FROM MY MEMORY. SO IT'S SOMEWHERE IN THE THIRD BLOCK FOR RESIDENTIAL IS THE EQUIVALENT RATE THAT THE GENERAL CLASS IS PAYING 
          AT BASE. >> THE REASON THAT IS IS BECAUSE ROUGHLY 80 TO 82% WAS BILLED IN 100%. THEY'RE ALWAYS BILLED IN THAT FIRST TIER FOR GENERAL CLASS. MOST GENERAL CLASS, 80% OF THEM STAY VERY, VERY 
          CONSISTENT YEAR AFTER YEAR WITH THEIR USAGE. >> GALVAN: I SEE. 
          FOR THE OUTLIERS, WE'RE HAVING THEM -- OR THEIR RATE IS A LITTLE BIT LESS. 
          ARE A FEW OF THEM DOING IT? >> YES. AGAIN, 175% WHEREAS RESIDENTIAL, AS DOUG SAID, THE HIGHEST RATE FOR RESIDENTIAL IS ROUGHLY $17 PER THOUSAND GALLONS FOR RESIDENTIAL. IT'S A LITTLE OVER $10 FOR GENERAL CLASS. SO WE UNDERSTAND THAT JUST BECAUSE YOU'RE USING A LOT OF WATER, H-E-B, WE SHOULDN'T BE PENALIZING YOU BECAUSE YOU'RE USING A LOT OF WATER. BUT YOU SHOULD BE PAYING MORE THAN SOMEBODY WHO USED 
          MORE THE PREVIOUS YEAR . >> GALVAN: I APPRECIATE THAT. 
          WATER THAT THEY SHOULD BE PAYING A LOWER RATE FOR THE MAJORITY OF FOLKS. 
          I DON'T THINK IT'S A PENALIZING. I THINK IT'S PART OF THE BUSINESS PLAN BUT I ASSUME ANYONE USING THAT MUCH WATER, ANY GENERAL CLASS CUSTOMER, WOULD BE ABLE TO PRODUCE AN EQUIVALENT AMOUNT OF REVENUE IN TO HOPEFULLY PAY FOR SOMETHING SIMILAR. WE CAN DISCUSS THIS GOING FORWARD. 
          IT JUST SEEMS TO ME THAT A LARGE INDUSTRIAL USER, A LARGE OFFICE USER THAT'S PROBABLY MAKING A SIGNIFICANT AMOUNT OF PROFIT WITH THE FACT THEY NEED A LARGE SPACE, I WOULD ASSUME, CAN AFFORD TO PAY A SIGNIFICANT AMOUNT FOR WATER. I THINK THAT'S SOMETHING WE SHOULD BE ENCOURAGING. 
          IF OUR EMPHASIS IS CONSERVATION, I DON'T UNDERSTAND WHY WE WOULD 
          CHARGE A LOWER RATE IF THEY'RE USING LESS WATER. >> BUT THEY'RE MORE CONSISTENT USERS. SO THEY'RE NOT PEAKING. SO WE'RE NOT HAVING TO BUILD A BIGGER INFRASTRUCTURE BECAUSE OF THEM. BECAUSE THEY'RE USING CONSISTENT USAGE THROUGHOUT THE YEAR. WHEREAS RESIDENTIAL AND IRRIGATION USERS, RESIDENTIAL IRRIGATION -- AGAIN, GENERAL CLASS IS INDEPENDENT. BECAUSE A GENERAL CLASS USER HAS TWO METERS. 
          THEY HAVE THEIR REGULAR DOMESTIC METER AND THEY HAVE THEIR IRRIGATION METER. 
          SO WE'RE TALKING ABOUT TWO DIFFERENT THINGS. BUT PEOPLE WHO DO PEAK IS THE REASON WHY WE HAVE TO BUILD A BIGGER INFRASTRUCTURE. 
          >> GALVAN: CAN YOU GO INTO A LITTLE BIT OF WHAT THE DIFFERENCE IS THERE? I GUESS MY THOUGHT PROCESS IS IF YOU'RE USING CONSISTENTLY THE HIGHEST AMOUNT OF WATER IN THE ENTIRE SYSTEM, THAT'S A LOWER RATE THAN FOLKS WHO HAVE OCCASIONAL PEAKS. BUT YET HAVE A LOWER TOTAL AMOUNT, TYPICALLY, OF WATER 
          USAGE. >> RIGHT. WE WOULD JUST HAVE ONE BIG PIPE. I KNOW WE DID NOT HAVE THE VISUALIZATION. 
          BUT IT'S USUALLY YOU HAVE ONE BIG PIPE TO SAY FOR BASE USAGE YOU HAVE ONE BIG PIPE. 
          YOU HAVE TO ADD IN LAYERS FOR -- >> GALVAN: IN CASE THERE'S 
          MORE. >> FOR PEAKING. IT'S SPECIFICALLY FOR THE PEAKERS IS WHY WE HAVE TO HAVE A LARGER PIPE AND HAVE MORE INFRASTRUCTURE BUILT AND WHY WE HAVE MORE MAIN BREAKS, BECAUSE WE'RE PUTTING PRESSURE ON THE 
          [02:05:03]
          SYSTEM. >> GALVAN: THANK YOU FOR THAT. 
          I FEEL A LITTLE BIT OF A REACTION THAT ANY SIGNIFICANT USE OF WATER WITH THE HIGHEST VOLUME USERS SHOULD STILL BE PAYING THE HIGHEST RATE. 
          THAT'S SOMETHING I CONSISTENTLY FEEL SHOULD BE TRUE. 
          I KNOW WE TALKED EARLIER ABOUT BREAKING -- OR THERE WAS A THOUGHT ABOUT BREAKING OUT APARTMENTS FROM THE GENERAL CLASS. WAS THERE ANY OTHER THOUGHTS ON BREAKING THOSE OUT AT ALL? DO YOU ANTICIPATE THEY WILL 
          STAY IN THEIR SAME GROUPING? >> WE DID LOOK AT THAT IN CONNECTION WITH THE LAST RATE STUDY THAT WAS DONE. THE RESULTS GOT ROLLED OUT IN 2023. 
          APARTMENT USERS WERE GOING TO SEE AN INCREASE, SO WE DECIDED TO LEAVE IT WITHIN 
          THE GENERAL CLASS BECAUSE WE DIDN'T WANT THAT TO HAPPEN. >> GALVAN: I SUPPORT THAT. 
          RENTERS, INCLUDING MYSELF, ARE STILL RESIDENTS. I GUESS MY POINT IS DO WE ANTICIPATE ANY OTHER PORTIONS OF THE GENERAL CLASS, WHETHER IT'S LOOKING AT LARGE INDUSTRIAL USERS? EVEN CERTAIN COMMERCIAL USERS THAT ARE EMPLOYING 10,000-PLUS PEOPLE. JUST DIVVYING OUT 
          >> THERE ARE SOME UTILITIES, AUSTIN BEING ONE, THAT HAS SUPERUTILITY USER RATES. 
          I KNOW AS WE GO THROUGH OUR DISCUSSIONS WITH RESPECT TO THESE DATA CENTERS, WE'VE GOT TO DETERMINE IS THERE A SEPARATE RATE THAT WE SHOULD BE CHARGING THESE DATA CENTERS. I'VE READ THAT'S SOMETHING YOU HAVE A LITTLE BIT OF 
          INTEREST IN. >> GALVAN: [INDISCERNIBLE] I'M JUST KIDDING. 
          I APPRECIATE THAT. I THINK THAT'S THE BIGGEST COMPONENT THERE. 
          MY FOCUS IS THE HIGH-END USERS, MAKING SURE THEY'RE PAYING THEIR FAIR SHARE. 
          I KNOW IT'S PART OF THE ANALYSIS DONE BUT IT IS CRITICAL IN THESE CONVERSATIONS THAT WE ARE BEING CLEAR ON WHAT EVERYBODY IS PAYING. 
          WHAT EVERYBODY'S SHARE IS. YEAH. I'LL LEAVE IT THERE. 
          THANK YOU SO MUCH. THANK YOU, MAYOR. >> MAYOR JONES: 
          COUNCILWOMAN CASTILLO. >> CASTILLO: THANK YOU, MAYOR. 
          THANK YOU, DOUG FOR THE PRESENTATION, AS WELL AS THE CHAIRWOMAN, PRESIDENT, AND BOARD MEMBERS WHO ARE PRESENT TODAY. YESTERDAY WE DID HAVE OUR DISTRICT 5 UTILITY TOWN HALL. THANK YOU, DOUG, GAVINO, NORMA JEAN AND ALL THOSE PRESENT LAST NIGHT. WE DID HAVE CPS AND THERE WAS LOTS OF VALUE IN HAVING CPS AND SAWS PRESENT AT THE SAME TIME. 
          WITH DOUG, HE LAID OUT THE ARGUMENT AND THE NEED OF WHY THERE'S THE OPPORTUNITY AND THE NEED TO EXPLORE WHAT A RATE INCREASE CAN LOOK LIKE. WHAT WE HEARD TIME AND TIME AGAIN ESSENTIALLY WAS WHAT THE COMMUNITY VALUED IS THAT THE SAWS' RATE STRUCTURE IS DESIGNED TO PROVIDE A BALANCE BETWEEN RESIDENTIAL AND BUSINESS RATES. 
          AND STRENGTHEN CONSERVATION PRICING FOR ALL WATER USERS. AS DOUG MENTIONED IN THE PRESENTATION AND LAST NIGHT, SAWS' TIERED STRUCTURE THAT THE LESS WATER USED THE LOWER THE RATE PAID. NOW SOME OF THE COMMENTS THAT DISTRICT 5 RESIDENTS DID HAVE WERE CONCERNS AROUND DROUGHTS. WHAT TYPE OF REBATE PROGRAMS, IF ANY, WERE AVAILABLE TO HELP REMOVE GREEN SPACE AND HELP ALLEVIATE THE NEED TO WATER THEIR GRASS. BUT ULTIMATELY, WHAT DISTRICT 5 RESIDENTS WERE ASKING WAS, HEY CPS ENERGY. HOW CAN YOU REPLICATE SAWS' RATE STRUCTURE. MY TEAM AND I WERE SURPRISED BUT FOUND A LOT OF VALUE IN HAVING BOTH IN TERMS OF LAYING OUT THE NEED AND OF COURSE THE REQUEST FOR POTENTIAL RATE INCREASE. NOW THE MEETING DID END WITH ARACELY. 
          SHE'S AN ACTIVE SAN ANTONIO RESIDENT. I DON'T THINK SHE LIVES IN DISTRICT 5 BUT SHE COMES TO A LOT OF DISTRICT 5 EVENTS. SHE CLOSED IT H OUT IN SPANISH. SHE SAID PEOPLE THROUGHOUT THE CITY OF SAN ANTONIO ARE EXPERIENCING ECONOMIC INSECURITY, STAGNANT WAGES, AND JUST INCREASED COST OF LIVING. AND THIS IS SOMETHING THAT COUNCIL AND BOARD MEMBERS THAT WE NEED TO GROUND OURSELVES IN. THAT THERE'S A LOT OF MOVING PIECES WITH FAMILIES' FINANCIALS AND SHE HOPES WE KEEP THAT IN CONSIDERATION. 
          AGAIN, SOMETHING THAT WE ALSO HAVE TO KEEP IN MIND IS THE AGING INFRASTRUCTURE. 
          I ALSO SHARED THE CONCERN OF THE LEAKS. THIS IS SOMETHING THAT -- WHAT WE DIDN'T HEAR LAST NIGHT I DO HEAR IN NEIGHBORHOOD ASSOCIATION MEETINGS ABOUT THE RESPONSE TIME. HOWEVER, IN REVIEWING THE SAWS' WATER MANAGEMENT PLAN, MY UNDERSTANDING IS IN 2026 Y'ALL INTENDED TO -- OR HAVE ALREADY HIRED ADDITIONAL CREWS. SIX FIELD UTILITY COORDINATORS TO ASSESS LEAKS MORE QUICKLY AND SCHEDULE REPAIRS. 
          ALSO IN 2026 SAWS WILL HIRE ADDITIONAL FIELD CREWS TO RESPOND TO LEAK REPAIRS FOR A TARGET OF 3,000 ACRE FEET A YEAR FOR SAVINGS. WITHIN THE MANAGEMENT PLAN, IT HAS SEVERAL OTHER BULLET POINTS OF IMPROVEMENTS IN 2026. 
          SO I'M HOPEFUL THAT THAT WILL HELP ALLEVIATE SOME OF THOSE CONCERNS THAT WE'RE 
          [02:10:01]
HEARING IN TERMS OF INFRASTRUCTURE AND RESPONSE TIME. 
          NOW SOMETHING THAT CAN BE HELPFUL MOVING FORWARD AS WE CONTINUE TO DIGEST THIS PRESENTATION IS I WOULD LIKE TO UNDERSTAND IF THERE IS NOT A RATE ADJUSTMENT, WILL WE POTENTIALLY SEE SOME OF THOSE RECOMMENDATIONS IN THE WATER MANAGEMENT PLAN DISSOLVE OR NOT FULLY IMPLEMENTED. I THINK SO MUCH, AS THE COUNCILWOMAN ASKED, WHAT IMPACT WILL WE SEE IN TERMS OF SERVICES IF THERE ISN'T A RATE RESTRUCTURE. THOSE ARE A COUPLE OF THINGS THAT I WOULD LIKE TO SEE. 
          WITH THE RECORD DROUGHT AND THE MANAGEMENT PLAN, IT AFFECTS SOIL SO WE WILL SEE MORE LEAKS. I THINK THIS IS GOING TO TAKE A MULTI-PRONGED APPROACH WITH THE CITY AND CPS ON HOW WE IMPLEMENT THINGS SUCH AS AN URBAN TREE CANOPY. IT IS GOING TO GET HOTTER. THESE DROUGHTS ARE GOING TO CONTINUE AND HAD WE PLANNED FOR THE FUTURE TO HELP ALLEVIATE POTENTIAL PIPES BREAKING -- BECAUSE THEY ARE GOING TO HAPPEN. HOW DO WE ALLEVIATE IT BASED OFF OF THE CHANGING ENVIRONMENTAL CLIMATE? NOW, WITH THE UPLIFT PROGRAM, I HEAR THE COMMENTS ABOUT THE FOLKS THAT ARE EXCEEDING A SPECIFIC AMOUNT OF GALLONS. BUT MY UNDERSTANDING IS 9,000 TO 12,000 GALLONS IS TYPICALLY LIKE A FOUR TO FIVE-PERSON HOUSEHOLD. I WANT TO ENSURE THAT WE'RE BEING MINDFUL WHEN WE'RE TALKING ABOUT ADJUSTMENTS TO THE UPLIFT PROGRAM. 
          IN MY DISTRICT WE HAVE A LOT OF MULTIGENERATIONAL HOUSEHOLDS SO THERE ARE UP TO SEVEN-PLUS FOLKS IN ONE HOUSEHOLD. YOU WILL SEE THAT AMOUNT OF WATER AND THE NEED TO PARTICIPATE IN PROGRAMS LIKE UPLIFT. 
          SIMILAR TO A COUPLE OF MY COLLEAGUES, IN TERMS OF THE PRIORITIZATION OF PROJECTS -- OF COURSE I KNOW THIS IS THE SAME SHARED VALUE WITH THE BOARD. 
          OF COURSE THOSE WITH THE URGENT NEEDS. THOSE THAT ARE MANDATED BY THE STATE SHOULD REMAIN PRIORITY. THAT'S A PRIORITY WE ALSO SHARE AS WELL. BUT I DO ALSO BELIEVE WHAT WOULD BE OF VALUE -- AND IT'S BEEN REQUESTED AS WELL -- WITH THE WATER COLLECTION SYSTEM AND THE PIPES THAT ARE 50 YEARS OR OLD. I WOULD LIKE TO UNDERSTAND WHERE FOR THE CITY THOSE PIPES ARE. I THINK I HAVE A GENERAL UNDERSTANDING BUT I'M ASSUMING THAT IT MAY OVERLAP WHAT WE'RE HEARING THAT THERE'S A LOT OF BREAKS. HOW CAN THE RATE ADJUSTMENT POTENTIALLY HELP US ADDRESS THOSE 50-YEAR-OLD PIPES WITHIN A 5, 10-YEAR PLAN. AND THEN THE QUESTIONS HAVE ALREADY BEEN ASKED AROUND THE BOND IMPACT. LASTLY, JUST WANT TO THANK THE SAWS BOARD, AS THE CHAIRWOMAN MENTIONED, YOU ALL APPROVED AN ITEM FOR A PILOT PROGRAM THAT WAS INITIATED THROUGH A COUNCIL CONSIDERATION REQUEST. 
          SO GRATEFUL TO MY COLLEAGUES BENEFIT FOLKS ALL THROUGHOUT THE CITY. I KNOW MY SOUTHSIDE COUNCIL MEMBERS EXPERIENCE THE SAME INFRASTRUCTURE NEEDS. WE'RE ALSO ON SEPTIC TANKS, AREN'T CONNECTED TO SEWER LINES. JUST GRATEFUL THAT THE BOARD SAW THE NEED AND THE VALUE TO SUPPORT THAT. I LOOK FORWARD TO GETTING AN UNDERSTANDING ABOUT THE INCREASE OF SUPPORT FOR THE ISSUES THAT I MENTIONED WITHIN THE WATER MANAGEMENT PLAN. AND LASTLY, AS THE MAYOR MENTIONED, IN THE PLAN IT EMPHASIZES SPRAWL AND HOW WE NEED A PLAN IN TERMS OF ADDING MORE NEED. 
          MY CONCERN, WHEN WE HAVE SOMETHING LIKE ON THE AGENDA, I'M THINKING ABOUT OF THE MAINTENANCE OF THE INFRASTRUCTURE FOR THE STREETS AND SIDEWALKS WHILE WE HAVE SUCH A HIGH NEED. INTERESTED TO SEE WHAT TYPES OF POLICIES COUNCIL CAN CO-CREATE IN TERMS OF HOW TO ALLEVIATE THAT SPRAWL AND ANNEXATION. 
          WHAT I REALLY VALUE ABOUT THIS PRESENTATION -- AND I WAS SHARING WITH COUNCILMEMBER MUNGIA -- Y'ALL INCLUDE THE WAGES AND BENEFITS OF YOUR EMPLOYEES. 
          I THINK AS THE CONSTITUENT MENTIONED YESTERDAY, WAGES ARE STAGNANT AND I THINK IF THIS RATE ADJUSTMENT'S GOING TO PROVIDE AN OPPORTUNITY TO INCREASE WAGES AND BENEFITS FOR SAWS' EMPLOYEES, I'M HOPEFUL THAT THAT'S SOMETHING THIS COUNCIL WILL TAKE INTO CONSIDERATION. BECAUSE IT'S GETTING EXPENSIVE FOR EVERYBODY. 
          AND I'M JUST GRATEFUL THAT Y'ALL INCLUDED THE BREAKDOWN FOR EMPLOYEES. 
          MY LAST QUESTION IS WITH SOME OF THE PROJECTS, THEY OVERLAP WITH LEON VALLEY. 
          DOES THE CITY OF LEON VALLEY CONTRIBUTE IN ANY WAY TO THOSE PROJECTS OR IS IT SIMILAR TO THE CITY OF SAN ANTONIO, LIKE SAWS PROJECTS WITHIN THE CITY OF SAN ANTONIO THAT SAWS ABSORBS THE ENTIRE COST? CAN YOU HELP ME UNDERSTAND 
          THAT RELATIONSHIP WITH LEON VALLEY, FOR EXAMPLE? >> IF WE DID A PROJECT IN LEON VALLEY, THEY WOULD NOT PARTICIPATE WITH US SINCE WE WOULD JUST BE WORKING ON OUR INFRASTRUCTURE. IF ANYTHING, WE MAY TRY TO WORK WITH THEM ON THE PAVING REQUIREMENTS ON THE RESTORATION. BUT THAT MAY BE THE ONLY 
          AREA WHERE THEY WOULD HELP. AND TYPICALLY THEY DON'T. >> CASTILLO: THANK YOU FOR 
          THAT UNDERSTANDING. THANK YOU, MAYOR. >> MAYOR JONES: COUNCILMAN 
          [02:15:05]
          MUNGIA. >> MUNGIA: I DO WANT TO START OFF BY SAYING THANK YOU TO A COUPLE OF REMARKABLE EMPLOYEES THAT YOU HAVE. 
          CECILIA PICASSO, WHO I SAW SOMEWHERE IN THE BACK THERE. AND THEN THE OTHER TERRY CASTILLO WHO WORKS IN UPLIFT, NOT THE ONE SITTING NEXT TO ME. 
          THEY ARE FANTASTIC. I WAS JUST TALKING TO MY STAFF EARLIER. 
          WE HAVE AT LEAST ONCE A WEEK A RESIDENT COMING IN WITH A SAWS' BILL ISSUE. 
          NOT TO MENTION OTHER SAWS-RELATED ISSUES. THEY ARE ALWAYS HELPFUL. 
          WITH TERRY ON THE TEAM, WE HAVE BEEN ABLE TO PUT A LOT OF FOLKS ON THE UPLIFT, WHICH IS SAVING THEM A LOT OF MONEY. THAT'S IMPORTANT WORK THEY DO. I KNOW IT'S NOT ALWAYS EASY WORKING WITH MY TEAM BUT I APPRECIATE Y'ALL DOING THAT. IN A GOOD WAY. YOU HAD A SLIDE HERE ABOUT THE AGE OF WATER MAINS AND THE SIGNIFICANT AMOUNT OVER 50 YEARS OLD. 
          AND ALSO SOME OF THE SEWER MAINS. DO YOU HAVE THAT BY GEOGRAPHIC LOCATION OR ON A MAP WHERE THE OLDEST ONES ARE LOCATED? 
          >> WE CAN PROVIDE THAT. >> MUNGIA: I WOULD APPRECIATE THAT. 
          AND, YOU KNOW, IT'S BEEN MENTIONED EARLIER BUT SOME AREAS OF MY DISTRICT DO NOT HAVE SEPTIC, INCLUDING -- THEY HAVE SEPTIC AND THEY'RE NOT ON THE WASTEWATER. 
          THAT ACTUALLY INCLUDES MY FIELD OFFICE. WE'RE ON A SEPTIC TANK OVER THERE. SOME PLACES DON'T EVEN HAVE CONNECTION TO THE WATERLINE. 
          I THINK THAT'S BECAUSE, ESPECIALLY SOUTH OF 410, THERE WAS A LOT OF LARGE TRACTS SO THE SYSTEM WASN'T SET UP FOR THE DEVELOPMENT THAT WE HAVE NOW. 
          AND WE CAME TO AN ISSUE A FEW YEARS BACK WHERE WE HAD A BUSINESS OWNER, THAT DOES A LOT OF CONTRACT FOR THE CITY ON ZARZAMORA, DIDN'T HAVE THE WATERLINE GOING TO THEIR AC BUSINESS. THEY'RE ON A WELL. AND IN ORDER TO CONNECT, IT WAS THREE PROPERTIES DOWN. THEY WOULD HAVE TO PAY FOR THAT LINE EXTENSION. 
          THEY WOULD HAVE TO PAY FOR THE ROADWORK ON THEIR OWN. AND ANOTHER, YOU KNOW, A FAMILY FRIEND REACHED OUT AND SAID WE'RE BUILDING A HOUSE ON THE SOUTHSIDE, INDIVIDUAL HOME. AND THEY ASKED ME, YOU KNOW, YOU'RE A COUNCILMAN. 
          WHY DO I HAVE TO BRING THE WATERLINE ALL THE WAY UP TO MY HOUSE FROM THE MAIN STREET? WOULD THAT BE SAWS' RESPONSIBILITY? I HAD TO TELL THEM NO. YOU AS AN INDIVIDUAL HOME BUILDER ARE CLASSIFIED THE SAME WAY AS D.R. HORTON. YOU ARE A DEVELOPER AND HAVE TO BRING THAT LINE. 
          I THINK IT'S WORTH MAKING DISTINCTIONS THERE. I DON'T THINK EVERYBODY THAT IS TRYING TO GET A WATERLINE SHOULD BE TREATED THE EXACT SAME WAY. 
          AND I DON'T THINK Y'ALL CURRENTLY HAVE PLANS TO CHANGE THAT. 
          IS THAT CORRECT? >> WE DON'T. WE CAN CERTAINLY LOOK AT THESE SPECIFIC EXAMPLES. WE HAVE A FEW TOOLS IN THE TOOLBOX, LIKE A LOCAL BENEFIT EXTENSION. BUT WE CAN CERTAINLY LOOK AT THESE SPECIFIC INSTANCES. 
          >> MUNGIA: ESPECIALLY BECAUSE THAT MAY EXIST ON MY SIDE OF TOWN. 
          AS RESIDENTS ARE PAYING MORE THEY'RE GOING TO ASK ME WHAT'S HAPPENING IN DISTRICT 4 IN OUR AREA, WHICH EXCLUDES THE WASTEWATER TREATMENT PLANTS THAT I ACTUALLY HAVE IN MY DISTRICT. AND SO CAN YOU TALK TO ME A LITTLE BIT ABOUT THE RATE INCREASES THAT YOU ALL HAD FROM 2016 TO 2020? 
          >> IF YOU COULD PULL BACK UP --T SLIDE WE SPOKE TO THAT ON. SLIDE 10. 
          SO YOU CAN SEE THERE WE HAD A 7.5% OVERALL INCREASE TO THE AVERAGE RESIDENTIAL BILL IN 2016. 2017, WE ACTUALLY CAME IN, AS OPPOSED TO THE 7.9 ON THE SLIDE, IT CAME IN AT 6.8%. AND THEN I THINK I CITED IN 2018 AND 2019 YOU CAN SEE THE PERCENTAGES ON THE SLIDE AT THE RIGHT THERE. WE HAD A 5.8% INCREASE. 
          AND THEN A 4.7% INCREASE IN 2019 TO THE AVERAGE RESIDENTIAL BILL. 
          AND THEN FINALLY IN 2020 WE DID HAVE THE 9.9% INCREASE THAT, AGAIN, IS CITED OVER 
          ON THE LEFT-HAND PORTION. >> MUNGIA: IF YOU CAN DO THE MATH. 
          WHAT'S THE TOTAL RATE BETWEEN FOUR YEARS? >> 7.5 -- I DIDN'T BRING MY CALCULATOR. 24 -- I WANT TO SAY IT WAS JUST LESS THAN 30%. 
          >> MUNGIA: OKAY. ABOUT 30% OVER FOUR YEARS. >> OVER THE FIVE-YEAR 
          PERIOD. '16 TO 2020. >> MUNGIA: WALK ME BACK. 
          WHAT WAS THE REASONING FOR THIS ALMOST 30% RATE FOR FIVE YEARS? 
          [02:20:01]
          >> >> THE BIG DRIVER AS YOU CAN SEE THERE IS THE VISTA RIDGE WATER SUPPLY PROJECT. WE WERE CERTAINLY IN THE MITD MISDMIDST OF THE EPA CONSENT DECREE. 
          >> MUNGIA: THAT DOESN'T INCLUDE ANY FEDERAL FUNDING THAT Y'ALL 
          RECEIVED. >> WE DIDN'T RECEIVE ANY FEDERAL FUNDING. 
          >> MUNGIA: YOU DIDN'T RECEIVE ANY ADDITIONAL MONEY FOR THE CONSENT 
          DECREE? >> NOT FOR THE CONSENT DECREE, NO. 
          >> MUNGIA: OKAY. I JUST WANTED TO MAKE SURE. 
          AND WE'RE OUT OF THE CONSENT DECREE? >> WE HAVE TWO PROJECTS THAT WE ARE STILL WRAPPING UP. WE HAVE A DEADLINE OF 2027. WE GOT A FOUR-YEAR EXTENSION FOR A COUPLE OF 
          PROJECTS. >> MUNGIA: THAT'S GREAT. AND VISTA RIDGE IS 100% 
          COMPLETE. >> VISTA RIDGE IS 100% COMPLETE. 
          >> MUNGIA: SO WE'RE KIND OF THROUGH THAT CAPITAL INVESTMENT AND YOU'VE HAD THIS 30% INCREASE, YOU'RE NEEDING ADDITIONAL ON TOP OF THAT TO CONTINUE WITH MAINTENANCE COST, EVEN THOUGH THOSE THINGS THAT YOU ASKED FOR THAT RATE 
          INCREASE FOR ARE MORE OR LESS COMPLETED? >> SO, AGAIN, YOU'RE NEVER COMPLETED. WE SHOWED ON THE WASTEWATER. 
          WE NEED TO CONTINUE TO SPEND MONEY ON THE COLLECTION SYSTEM, BUT THE TWO THINGS THAT AREN'T UP THERE THAT ARE REALLY DRIVING THE RATES NOW ARE WASTEWATER TREATMENT PLANTS, AND YOU SAW ANDREA WENT THROUGH THE BULK, THOSE WERE THE BIGGEST EXPENDITURE ITEMS, PARTICULARLY IN 2026, THERE'S 350 PLUS MILLION DOLLARS DEDICATED TO THOSE THREE PROJECTS IN OUR WASTEWATER TREATMENT PLANTS. AND THEN THIS WATER STEWARDSHIP INITIATIVE TO REPLACE AGING WATER MAINS, WHICH, AGAIN, WASN'T NECESSARILY ONE OF THE BIG PIECES OF THESE RATE INCREASES HERE. 
          >> MUNGIA: OKAY. SO OF THIS 30% INCREASE YOU'VE HAD IN FIVE YEARS, YOU'RE SAYING THAT YOU STILL NEED ADDITIONAL TO DO ADDITIONAL WORK, THAT THIS IS NOT HELPING COVER THE WORK THAT YOU STILL NEED TO DO? 
          >> THERE ARE -- THERE ARE ADDITIONAL NEEDS OF THE SYSTEM, YES, ON TOP OF 
          WHAT WE DID HERE.  YEAH. >> MUNGIA: I THINK -- YOU KNOW, I'D APPRECIATE MAYBE GOING IN A LITTLE DEEPER, AND MAYBE, BEN, YOU CAN HELP ME ON THIS. 
          WE'VE GOTTEN THE 30% SINCE 2020, NOW WE'RE '25, '26, ASKING FOR ANOTHER. SO THAT EXTRA RATE'S FROM 2016, WHERE IS THAT KIND OF FEEDING INTO NOW WHEN THESE PROJECTS HAVE BEEN COMPLETED? 
          >> GORZELL: COUNCILMAN, IF I UNDERSTAND YOUR QUESTION, THE -- SO, FOR EXAMPLE, VISTA RIDGE, THAT RATE PLAN WAS PUT IN PLACE TO ALLOW THEM TO ENTER INTO THAT CONTRACT, HAVE THAT THIRD PARTY DELIVER THAT WATER TO THE SAWS SYSTEM. THAT RATE INCREASE IS COVERING THAT COST OF ACQUIRING THAT WATER EVERY YEAR. SO THE PROJECT GOT DONE, BUT YOU STILL NEED THE RATE SUPPORT, BECAUSE WE'VE GOT TO ACQUIRE THE WATER. THE WASTEWATER AND WATER DELIVERY PROJECTS THAT THEY FUNDED THERE ON THE CAPITAL SIDE, THEY CONTINUE TO FUND TODAY, BECAUSE THEY I'VE ISSUED LONG-TERM DEBT. SO THOSE RATE INCREASES COVERED WHAT THEY NEEDED FOR THOSE PROJECTS, BUT IT DIDN'T END ONCE THE 
          PROJECT WAS COMPLETED, IF THAT MAKES SENSE. >> MUNGIA: OKAY. 
          SO THOSE PROJECTS THAT YOU'RE WORKING ON STILL CONTINUE TO USE THAT 30% 
          INCREASE OF INVESTMENT. >> GORZELL: RIGHT. AND THERE MAY BE SOME -- THAT'S WHY WE GO THROUGH THE FULL REVIEW AND LOOK AT ALL OF THOSE CHANGES, BUT FOR THE MOST PART, THEY'RE STILL PAYING FOR PROJECTS THAT THEY DID 
          DURING THAT TIME FRAME. >> MUNGIA: OKAY. THANK YOU. 
          THAT'S HELPFUL. AND THEN ALSO I'VE TALKED ABOUT THIS BEFORE, BUT THE PURPLE PIPE PROGRAM, ARE Y'ALL LOOKING AT EXPANDING THAT AT ALL? 
          >> WE'RE LOOKING INTO OUR SYSTEM LOOKING AT DIFFERENT WAYS YOU CAN EXPAND IT. THERE ARE WAYS YOU HAVE TO LOOK AT THE WATER SOURCE, THE PIPES, THE PUMPS. A LOT OF THE THINGS THAT WE ARE LOOKING AT, BUT, YES, WE'RE LOOKING AT THE EXPANSION OF THAT. 
          IT DEPENDS ON HOW MUCH SOME OF THE BIG USERS, SOME OF THE BIG WATER USERS WILL NEED OUT OF THAT SYSTEM AND HOW MUCH IS LEFT OFF OF IT. 
          BUT TO DO THAT, WE NEED TO MAKE SURE THAT OUR RATES -- THE RECYCLED WATER RATES COVER ANY EXPANSIONS THAT WE LOOK AT. 
          AND ALSO JUST FIXING THE SYSTEM, RIGHT? MAKING IT A REDUNDANT SYSTEM SO THAT IT'S NOT -- IT DOESN'T HAVE MAIN BREAKS AND THAT SORT 
          OF THING AS WELL. >> MUNGIA: RIGHT. AND ALSO, I GUESS, TRYING TO MAKE SURE THAT THAT WATER IS STILL CHEAPER THAN REGULAR WATER, OTHERWISE YOU LOSE THE INCENTIVE ON THAT. I THINK THAT'S IMPORTANT. AND ARE Y'ALL ABLE TO SEND US, YOU KNOW, YOUR -- I'M NOT SURE HOW -- I THINK IT'S PUBLIC INFORMATION, RIGHT, BUT LIKE YOUR TOP 25 COMMERCIAL USERS OF WATER? 
          >> WE COULD DEFINITELY SEND THAT TO YOU. WE HAVE A PAGE IN OUR ANNUAL COMPREHENSIVE FINANCIAL REPORT THAT LISTS OUR TOP 10 USERS 
          FOR BOTH WATER AND WASTEWATER SERVICES. >> MUNGIA: THAT WOULD BE GREAT. YEAH, THANK YOU. APPRECIATE IT. 
          [02:25:01]
SO I THINK FOR ME THE NEXT CONVERSATION IS GOING TO HAVE TO BE WHAT YOUR PROPOSED PROJECTS ARE GOING TO LOOK LIKE, IF YOU ARE TO GET THIS RATE INCREASE, RIGHT? AND SO THAT'S IMPORTANT. YOU MY DISTRICT HAS A LOT OF OLDER INFRASTRUCTURE, SO IF A LOT OF WORK IS NOT GOING TO BE DONE IN OUR AREA OF TOWN, OUR RESIDENTS ARE GOING TO SAY, WHY AM I GOING TO PAY MORE TO NOT REALLY GET A DIRECT BENEFIT IN OUR GENERAL AREA FROM THAT. I KNOW SYSTEM WIDE, THAT'S AN IMPROVEMENT THAT EVERYBODY GETS THAT, BUT, AGAIN, MY RESIDENTS ARE GOING TO LOOK AT 
          WHAT'S HAPPENING IN OUR GEOGRAPHIC LOCATION. >> I UNDERSTAND THAT. 
          I'VE LISTED THE LIST OF PROJECTS FOR SEVERAL OF YOU THAT HAVE COMMENTED, AND I UNDERSTAND THAT. AND OUR FLEXIBILITY, WHILE IT IS NOT AS GREAT AS, SAY, THE CITY HAS WHEN THEY LOOK AT THEIR STREET MAINTENANCE SCHEDULE AND YOU CAN LOOK AT THE STREETS BEING PROPOSED IN YOUR PERSPECTIVE DISTRICTS AND YOU CAN MOVE THEM AROUND, WE DON'T HAVE THAT LEVEL OF FLEXIBILITY, BECAUSE TO THE DEGREE THAT YOU LOOK AT A PROJECT THAT MAY FALL IN YOUR DISTRICT, IT MAY OR MAY NOT -- IT WILL IMPACT THE UPSTREAM AND DOWNSTREAM OF THE SYSTEM A LITTLE DIFFERENTLY. 
          >> MUNGIA: OF COURSE. >> SO I JUST WANTED TO SAY THAT. 
          I UNDERSTAND HOW STREET MAINTENANCE PROJECTS AND BOND PROJECTS ARE CREATED AND PRESENTED TO YOU FOR CONSIDERATION. WE ARE HAPPY TO GIVE YOU THE LIST OF PROJECTS THAT FALL IN YOUR COUNCIL DISTRICTS, BUT I WOULD JUST ASK ALL OF YOU TO REMEMBER THAT IT'S PART OF A LARGER SYSTEM, AND THE FLEXIBILITY ISN'T NECESSARILY THERE THAT YOU HAVE WITH MOVING THOSE PROJECTS AROUND BECAUSE THEY ARE CONNECTED TO THE OVERALL 
          SYSTEM. >> MUNGIA: RIGHT. A BAD TYPE I PIPE IS A BAD PIPE NO MATTER WHERE IT IS. EVERY RESIDENT DESERVES THAT. IF WE WERE TO INCREASE THE RATE, THAT IS ALL OF 
          THE SAWS CUSTOMERS? >> THE RATE APPLIES TO ALL OF SAWS CUSTOMERS, DEPENDING ON WHAT CLASS YOU'RE IN, CUSTOMER CLASS. 
          >> MUNGIA: AND I KNOW Y'ALL THINK ABOUT THIS, AND I'LL JUST REITERATE IT, SOME OF MY COLLEAGUES HAVE ALREADY MENTIONED, THE CURRENT WAGES IN SAN ANTONIO ARE DEFINITELY A CONCERN TO ME AS WELL. 
          IT'S NOT YOUR FALL DIRECTLY THAT WAGES ARE STAGNANT, BUT AT SOME POINT IT DOES BECOME ALL OF OUR PROBLEMS IF THAT IS THE CASE HERE, SO I JUST WANT TO MENTION THAT. THANK YOU. 
          COUNCILWOMAN KAUR? >> KAUR: THANK YOU, MAYOR. 
          THE BENEFIT OF GOING LAST IS YOU GET TO SAY WHAT EVERYBODY ELSE SAID. 
          BUT THERE'S A COUPLE OF THINGS THAT I WANT TO REALLY DOUBLE DOWN ON THAT FOLKS HAVE ALREADY SHARED. SO, ONE, I WANTED TO SHOUT OUT COUNCILWOMAN CASTILLO FOR THE PLUMBERS TO PEOPLE PROGRAM. 
          AND ALSO COUNCILMEMBER MUNGIA SAID CECILIA AND TERI WORK REALLY CLOSE WITH OUR TEAM. WE HAD AN 80-YEAR-OLD RESIDENT WHOSE PARTNER WAS ON AN OXYGEN TANK, HAD A MASSIVE WATER LEAK AND IT WASN'T MASSIVE IN THE SENSE THAT IT WAS EASY TO FIX, BUT THE BILL -- HIS BILL GOT UP TO $3,000. AND THEY HAD TO WORK REALLY CREATIVELY TO EVEN BE ABLE TO MOVE THE WASHER AND DRYER TO EVEN HELP THEM. 
          IT'S A REALLY IMPORTANT PROGRAM I THINK WE SHOULD CONTINUE TO INVEST AND MAKE SURE THAT THE BARRIERS THAT PEOPLE DO FACE IF THEY HAVE ANY WITH THE PROGRAM THAT WE ADDRESS THEM AS WELL. SO I JUST WANTED TO START WITH THAT. I HAVE SOME QUESTIONS, JUST ON THE SLIDES, SO I'M GOING TO GO THROUGH THEM. AND BEFORE I EVEN START, I SPENT SOME TIME LOOKING AT MY WATER BILL DURING THIS TIME TO TRY TO CALCULATE WHAT THE DIFFERENCES WOULD BE IN PAY IN MY WATER BILL, AND IT'S -- I DIDN'T -- I WASN'T ABLE TO DO IT. AND I LIKE NUMBERS, AND SO I JUST THINK WHAT THE MAYOR SAID, WHAT WOULD BE HELPFUL IN THAT IF YOU COULD SHOW US THE EXAMPLE WATER BILL FOR DIFFERENT TYPES OF CUSTOMERS, IT WOULD BE HELPFUL FOR US TO BETTER CONTEXTUALIZE THE DATA THAT YOU ARE SHOWING. AND THEN ALSO BE ABLE TO USE THAT FOR THE WASTEWATER SYSTEM AS WELL. SO I'LL START OFF ON SLIDE 8 AS THE COMPARISON, THIS WAS AN INTERESTING SLIDE TO ME BECAUSE WE HAVE -- IN YOUR LATER ON SLIDES, THERE'S A LOT OF DATA REGARDING THE AMOUNT OF WASTEWATER WORK THAT NEEDS TO BE DONE AND COST INCREASING FOR THAT, BUT WE'RE ACTUALLY PRETTY GOOD ON LOWERING THE COST FOR OPERATING AND MAINTENANCE SERVICES, WHY ARE WE BETTER AT THAT 
          THAN REGULAR WATER SERVICES? >> A LOT OF THAT IS GOING TO BE RELATED TO THE SIZE OF OUR INFRASTRUCTURE. SO THERE'S SOME SAVINGS AND COSTS, BECAUSE OF THE AMOUNT OF WATER THAT WE TREAT. 
          WE HAVE PURPOSELY CENTRALIZED OUR SOLID HANDLING AT ONE PLANT, WHILE MANY OTHER CITIES HAVE MULTIPLE PLANTS WITH MULTIPLE, I WOULD SAY SOLID HANDLING FACILITIES, SO WE WORKED REALLY HARD TO STREAMLINE AS MUCH AS WE CAN. BUT WHERE WE ARE, AND WE EXPECT OUR NUMBERS TO GO UP, IS OUR EQUIPMENT IS INEFFICIENT. AND WE WANT TO BRING IN MORE EFFICIENT EQUIPMENT, PARTICULARLY FROM AN ENERGY PERSPECTIVE, A 
          CHEMICAL PERSPECTIVE, A MANPOWER PERSPECTIVE. >> KAUR: UNDERSTOOD. 
          [02:30:02]
          >> BUT WE'VE WORKED TO CENTRALIZE IS THE SHORT OF IT. 
          >> KAUR: YEAH. JUST BASED ON THE PERCENTAGE DIFFERENCE BETWEEN O & M FOR WATER AND WASTEWATER, YOU WOULD THINK THAT THE NEED COSTS ARE SIMILAR, THE PERCENTAGE DIFFERENCE WOULD BE SIMILAR, BUT 
          THEY'RE NOT. >> RIGHT. THAT'S BECAUSE OUR WATER SYSTEM IS NOT CENTRALIZED. WE HAVE 50 PLUS PUMP STATIONS THROUGHOUT OUR SYSTEM AND THEY'RE VERY ENERGY INTENSIVE. 
          >> KAUR: OKAY. I DIDN'T QUITE UNDERSTAND, BUT THAT MIGHT BE OVER -- I GUESS WHAT I'M ASKING IS IF YOU COULD GO TO THE SLIDE IN YOUR CIP -- BEFORE YOUR CIP THAT SHOWS THE DIFFERENCE IN, LIKE, MAINTENANCE COST THAT YOU NEED FOR WATER AND WASTEWATER -- LET ME FIND IT. DO YOU REMEMBER WHICH SLIDE I'M TALKING ABOUT? 
          BECAUSE IT'S NOT IN MY... >> TALKING ABOUT THE OPERATIONAL COST? 
          >> >> KAUR: I'LL HAVE TO FOLLOW-UP WITH YOU, BECAUSE I DON'T REMEMBER WHERE I WAS LOOKING AT IT. 
          OH, RIGHT HERE. SO SLIDE 49 IN COMPARISON TO -- SO THIS IS HOW MUCH OF THE WATER AND SEWER MAIN REPLACEMENT PROGRAMS THAT YOU WOULD NEED. 
          SO -- OH, I HAVE A DIFFERENT SLIDE 49. I THINK IT'S THE NEXT 
          ONE. >> IT'S 50, I THINK. >> KAUR: OKAY. 
          SO THIS, I WOULD HAVE EXPECTED THE PERCENTAGE CHANGE FOR WATER AND WASTEWATER TO BE SIMILAR TO WHAT THE PERCENTAGE DIFFERENCE IS BETWEEN 
          O & M FOR EACH. >> WELL, THIS IS SHOWING OUR CAPITAL INVESTMENT FOR THE REPLACEMENT OF PIPES. SO IT'S NOT RELATED TO 
          THE FACILITIES. >> KAUR: YEAH. OKAY. 
          IT'S JUST THE -- ALL RIGHT. I'LL MOVE ON FROM THAT. 
          COUNCILMEMBER WHYTE AND ALDARETE GAVITO ASKED ABOUT THE WATER LOSS. 
          WHY DOES DROUGHT AFFECT -- WHY DOES DROUGHT AFFECT IT? 
          DOES IT DAMAGE PIPES? >> OUR PIPES ARE -- WE'RE USING MORE WATER, CECILIA TALKED ABOUT THAT PEAK RATE. SO AT NIGHT -- 
          >> KAUR: GOT IT. >> OUR MAINS GET STRESSED IN PARTICULAR. 
          WHEN THOSE WATERING HOURS COME ON, OUR TANKS ARE DROPPING, OUR PUMPS ARE GOING FULL BLAST, AND THAT PUTS A LOT OF STRESS ON OUR PIPES. 
          AND WHEN -- ESPECIALLY IN AREAS WITH SOIL CONDITIONS THAT ARE POOR, THAT ARE CLAY SOILS AND YOU HAVE METAL PIPE, IT'S -- WE SEE MAIN 
          BREAKS. >> KAUR: OKAY. ON SLIDE 35, WHAT ARE THE POSITIONS THAT YOU'RE PROJECTING THAT IS AN INCREASE? BECAUSE I UNDERSTAND -- AND I KNOW JALEN MADE THE COMMENT OF WE WOULDN'T WANT TO SERVE -- WE WOULDN'T -- MAYBE THAT'S BETTER -- BE ABLE TO SERVE ADDITIONAL PEOPLE. WHAT ARE THOSE ADDITIONAL 37 POSITIONS AND WHERE DO YOU REACH ECONOMIES OF SCAI WHERE YOU'RE CREATING -- SCALE WHERE YOU'RE SERVICING WATER AFTER THE PIPES ARE CREATED? 
          >> SO THE BULK OF THESE POSITIONS, AS WE TALKED ABOUT, WE NEED TO RESPOND TO LEAKS FASTER, SO WE PUT MORE CREWS INTO RESPONDING TO LEAKS FASTER AND ACTUALLY IN-HOUSE CONSTRUCTION CREWS TO WORK ON REPLACING AGED WATER MAINS. THE OTHER BIG AREA THIS YEAR FOR 2026 IS THAT LEAD AND COPPER RULE THAT I TALKED ABOUT, WE'VE GOT TO CONDUCT THAT INVENTORY, SO I THINK THERE'S 12 OR 13 PEOPLE THAT ARE ADDED RELATIVE TO THAT LEAD AND COPPER PROGRAM, HELPING US GET THE DATA THAT WE NEED TO GET TO COMPLETE THAT INVENTORY OF THE LEAD AND 
          COPPER SERVICE LINES. >> KAUR: SO IT'S NOT ACTUALLY DIRECTLY RELATED 
          TO SYSTEM EXPANSION, IT'S MORE SO MAINTENANCE? >> WELL, IT'S -- I DON'T KNOW THAT IT'S DIRECTLY RELATED, BUT THE SYSTEM GROWS WHETHER YOU ADD PEOPLE OR NOT, AND YOU CAN SEE IT GREW A LOT WHILE WE WEREN'T ACTUALLY -- WE WERE REDUCING PEOPLE BETWEEN 2005 AND 2015, AND THE SYSTEM GREW A LOT. SO THERE'S NOT A DIRECT CONNECTION, BUT IT DOES -- THAT'S WHY WE SAW 14 DAYS RESPONDING TO WATER MAIN LEAKS AS OPPOSED TO TWO DAYS NOW. SO THERE IS AN IMPACT TO YOU AFTER A WHILE IF YOU 
          DON'T ADD ENOUGH POSITIONS. >> AS WE ADD MILES. 
          AS WE ADD WATER MILES AND WASTEWATER MILES, YOU NEED CREWS TO MAINTAIN THAT. FROM A BOARD STANDPOINT, WHEN THEY PRESENT THEIR ANNUAL BUDGET, WE DO LOOK AT THAT BENCHMARK OF CUSTOMER AND EMPLOYEE 
          RATIO TO MAKE SURE WE'RE IN THE RIGHT SPACE. >> KAUR: AND KIND OF DOWN THE LINE THAT COUNCILMAN GALVAN WAS GOING DOWN, ONE THING WE'VE BEEN TALKING ABOUT RECENTLY WITH WATER IS SPRAWL, AND THAT SPRAWL ADDS AN ADDITIONAL COST OF SERVICES. SO I DO THINK WHEN WE HAVE FOLKS COMING TO DEVELOP IN FAR OUT, WHERE WE HAVE TO GO DEVELOP SIGNIFICANT AMOUNTS OF MILES, THAT THEY SHOULD BE PAYING MORE THAN -- 
          [02:35:01]
LIKE, AGREEMENTS THAT WE SET WITH DEVELOPERS OF, YOU KNOW, WE KNOW IF WE'RE BUILDING YOU 20 MILES OF -- WHICH I KNOW -- I'M EXAGGERATING, BUT 20 MILES OF MAIN WATERLINE, THIS IS HOW MUCH YOUR ESCALATING COSTS WILL BE, BECAUSE IN 30 YEARS WE'RE GOING TO HAVE TO REPLACE THOSE 
          MILES? >> GENERALLY SPEAKING -- YOU WANT TO SPEAK TO IT? 
          >> WELL, I WILL SAY IN TERMS OF IMPACT FEES, IF YOU'RE FURTHER AWAY FROM OUR SYSTEM, IF YOU'RE FURTHER AWAY FROM OUR WATER PRODUCTION ZONES, 
          YOU'RE PAYING MORE IN IMPACT FEES. >> KAUR: I H HEAR 
          THAT, BUT THAT'S A ONE-TIME IMPACT FEE. >> YES. 
          IN TERMS OF RATES AT THIS POINT IN TIME -- >> THE ONLY RATE DIFFERENTIAL WE DO HAVE, IF YOU'RE OUTSIDE OF CITY LIMITS WE CHARGE THOSE CUSTOMERS A 30% PREMIUM ON THEIR WATER DELIVERY RATE AND A 20% PREMIUM ON THEIR WASTEWATER RATE. SO ANY CUSTOMERS THAT RESIDE OUTSIDE OF CITY 
          LIMITS. >> KAUR: YEAH, I WOULD THINK OF SOME OTHER WAY TO BE ABLE TO, LIKE, GET THE -- AND I DON'T KNOW WHAT THE RIGHT PROCESS IS FOR THE DEVELOPERS, BUT MAYBE WE THINK OF SOME CREATIVE WORK FOR THEM TO HELP SUPPORT THE MAINTENANCE. BUT -- OKAY. 
          WHY DO WE HAVE A DIFFERENT FEE STRUCTURE FOR WATER VERSUS 
          WASTEWATER? >> WELL, FIRST OFF, WATER, WE ARE ABLE TO MEASURE EACH AND EVERY MONTH. WE HAVE TO ESTIMATE YOUR WASTEWATER USAGE, AND THAT'S BASED UPON HOW MUCH WATER YOU USE DURING THIS TIME OF YEAR, DURING THE WINTERTIME, SOMETIME BETWEEN NOVEMBER 15TH, WE LOOK AT THREE CONSECUTIVE MONTH BILLINGS BETWEEN NOVEMBER 15TH AND MARCH 15TH AND WE DETERMINE HOW MUCH WATER YOU USE DURING THAT PERIOD. AND THEN THAT CARRIES FORWARD, THAT'S YOUR 
          WINTER AVERAGE FOR THE ENTIRE YEAR. >> KAUR: YEAH, I UNDERSTAND WHAT IT IS, BUT I JUST DIDN'T UNDERSTAND WHY. 
          LIKE DO WE SEE A HIGHER OR A LOWER IMPACT TO RESIDENTS WHEN WE DO THAT? OR DOES IT ACTUALLY JUST AVERAGE -- TRULY AVERAGE OUT OVER TIME. BECAUSE IF YOU'RE USING AN AVERAGE EVERY MONTH, WOULDN'T YOU END UP PAYING HIGHER THAN IF YOU JUST PICKED THE SAME FEE 
          STRUCTURE AS THE WATER USAGE? >> JUST PICKED THE SAME 
          RATES? >> KAUR: THAT WAS CONFUSING QUESTION. 
          >> I'M NOT SURE I UNDERSTAND THE QUESTION. >> YEAH. 
          >> KAUR: SORRY, ROBERT. >> WHAT YOU'RE SAYING IS WHY DO WE CHARGE THIS MUCH FOR WASTEWATER DIFFERENT FROM WATER AND HE WAS EXPLAINING THAT 
          YOU TAKE THE AVERAGE. >> KAUR: YEP. >> WHY DON'T YOU JUST DO IT ACROSS THE BOARD? HOUSTON DOES THAT, BUT CAN YOU IMAGINE WHAT YOUR WASTEWATER BILL WOULD BE IN AUGUST BECAUSE YOU'RE USING SO MUCH WATER, EVEN THOUGH YOU'RE NOT USING IT THROUGH YOUR SINKS, YOUR COMMODES, YOU'RE PUTTING IT ON YOUR LAWN, THEN YOUR WASTEWATER BILL WOULD JUST SKYROCKET. 
          >> KAUR: NO, THE REASON WHY I WAS THINKING WAS THE OPPOSITE, TO USE THE SAME STRUCTURE AS THE WATER, YOUR REGULAR WATER USAGE, WHERE IT'S 1,000, 2,000, THAT WAY THE FOLKS THAT ARE USING LESS WOULD BE ABLE TO PAY LESS IN A CERTAIN MONTH FOR WASTEWATER? DOES THAT MAKE SENSE? 
          >> YES, BUT THEY WOULD PAY MORE IN OTHER MONTHS. 
          >> KAUR: YEAH. OKAY. OKAY. 
          SO IT WILL -- IT WOULD END UP BEING THE SAME FOR WHATEVER -- 
          >> IT WOULD BE WORSE FOR THEM. >> KAUR: YEAH, BECAUSE 
          SUMMERS WOULD HIT THEM HARDER? >> YES. 
          >> KAUR: OKAY. SO FOR -- I THINK SOME OF MY COUNCIL COLLEAGUES -- OH, I'M ALREADY OUT OF TIME. I WILL RING BACK IN. 
          >> MAYOR JONES: SECOND ROUND, COUNCILMAN GALVAN? 
          >> GALVAN: THANK YOU, MAYOR. JUST SOME LAST QUICK QUESTIONS. DO WE HAVE ANY INFORMATION ON HOW MANY CUSTOMERS HAVE UTILIZED CONSERVATION PROGRAMS THAT SAWS HAS, BOTH, YOU 
          KNOW, GENERAL CLASS AND RESIDENTIAL? >> I DON'T HAVE A DIRECT NUMBER FOR THE CONSERVATION PROGRAM, BUT WHAT I CAN GET YOU ARE THE NUMBER OF PROGRAMS THAT HAVE BEEN UTILIZED. SO RATHER THAN A NUMBER -- BECAUSE SOMETIMES A HOUSE WILL USE MORE THAN ONE 
          PROGRAM. >> GALVAN: SURE. >> SO I CAN GET THAT 
          NUMBER FOR YOU. >> GALVAN: THE NUMBER OF -- HOW MANY UTILIZED IS THAT WHAT YOU WERE SAYING? LIKE HOW MANY PROGRAMS 
          HAVE BEEN UTILIZED. >> RIGHT. WE HAVE VARIOUS PROGRAMS, SO ONE HOUSEHOLD CAN USE THREE OR FOUR. SO I'LL GET THAT NUMBER FOR YOU, WHAT'S THE NUMBER OF PROGRAMS THAT HAVE BEEN UTILIZED AND WE CAN TRY TO AVERAGE THAT OUT AMONGST OUR CUSTOMER BASE. 
          >> GALVAN: SO WE DON'T HAVE THE DATA ON HOW EACH CUSTOMER HAS -- WHETHER THEY'VE UTILIZED CONSERVATION PROGRAMS OR NOT UTILIZED. 
          >> YES, WE HAVE THAT AS WELL. >> GALVAN: I THINK I WOULD PREFER THAT, OUT OF 100% OF OUR CUSTOMERS, THIS MANY HAVE USED THIS 
          CONSERVATION PROGRAM AND WE CAN ADD THEM ALL UP. >> I'LL GET THAT 
          INFORMATION FOR YOU. >> GALVAN: THANK YOU. I THINK THEY WILL BE HELPFUL TO TELL US THE STORIES OF HOW MANY PEOPLE ARE ACTIVELY CONSERVING, AND THE DIFFERENCES IN CLASS, WHETHER IT'S RESIDENTIAL OR CUSTOMER, IF YOU CAN BREAK IT OUT MORE FROM THERE, I WOULD PREFER THAT MORE SO. BUT, THANK YOU. THAT COUNCILMEMBER THAT COUNCILMEMBER VIAGRAN MENTIONED TALKING ABOUT THE UPLIFT PROGRAM, BUT I REALLY APPRECIATE, JALEN, YOUR POINT ABOUT THE SMART METERS AND THE KIND OF AUTOMATIC SUPPORT FOR SOME OF -- THE PLUMBERS FOR THE PEOPLE. 
          I'D LIKE TO SEE -- I DON'T KNOW WHETHER IT'S THROUGH THIS RATE 
          [02:40:01]
INCREASE OR NOT -- OR RATE REQUEST, THAT THAT PROGRAM CAN BE EXPANDED UPON SO THAT WAY THERE'S MORE AUTOMATIC ENROLLMENT INTO THOSE PROGRAMS IF WE'RE SEEING THOSE TYPE OF DISCREPANCIES WITH PEOPLE'S BILLS, PARTICULARLY, OF COURSE, OUR LOWER INCOME FOLKS, JUST SO IT'S LESS OF A BURDEN ON THEIR END. I THINK Y'ALL ALREADY ARE -- WOULD THAT BE PART OF ANY KIND OF RATE INCREASE TO EXPAND THAT PROGRAM FURTHER? 
          >> SO ONE OF THE THINGS THAT WE DID, LIKE FIVE, 10 YEARS AGO, YOU VED TO APPLY FOR EVERY PROGRAM IF YOU QUALIFIED FOR OUR UPLIFT PROGRAM. 
          SO WHAT WE DID IS CREATED ONE APPLICATION. AS FAMILIES APPLY FOR THAT, THEY THEN ARE NOTIFIED OF ALL THE DIFFERENT PROGRAMS THEY QUALIFY UNDER THAT UMBRELLA, AND PLUMBERS IS ONE OF THOSE PROBABILITIES, LATERALS, PROJECT AGUA, AND RATHER THAN MAKING THEM COME UP TO EVERY TIME, WE HAVE EMPLOYEES THAT GO INTO THE COMMUNITY. 
          WE WANT TO GO WHERE THEY'RE AT. I KNOW WE'RE AT MANY OF Y'ALL'S OFFICES WITH STAFF. 
          THE BARRIER WITH THE CUSTOMER, AT THE SAME TIME LET THEM KNOW EVERYTHING THEY QUALIFY FOR, SO WE CAN HELP THEM ALL AT ONCE RATHER THAN 
          MAKING THEM COME BACK EACH AND EVERY TIME. >> GALVAN: I THINK THAT'S ALSO HELPING US OUT IN DISTRICT SIX, BUT ANY WAY WE CAN TRY AND DO IT IN A BIT MORE OF AUTOMATIC FASHION, WHERE THERE ISN'T EVEN THE NEED TO GO TO DISTRICT SIX FIELD OFFICE DURING THE WEEK TO MEET WITH TERESA, IT'S JUST AN AUTOMATIC, WE SAW YOUR BILL INCREASE DRASTICALLY, IS THERE A 
          WAY THAT WE CAN CHECK ON -- >> WHAT WE DO ESPECIALLY THROUGH THE CONNECTH2O, WE NOW GET NOTIFIERS, AS WE SEE ANY OF OUR CUSTOMERS, NOT JUST UPLIFT, ARE REACHING CERTAIN LIMITATIONS, I GUESS, WE THEN REACH OUT TO THEM AND LET THEM KNOW, HEY, YOU HAVE EITHER CONSTANT USE OR YOU'RE ABOUT TO EXCEED X NUMBER, SO THAT THEY THEN ARE NOTIFIED, AND THEN THEY CAN KNOW THE DIFFERENT PROGRAMS UP TO THEM. BUT A LOT OF THAT IS GOING TO BE INCUMBENT ON THEM UPDATING THEIR INFORMATION WITH US. AS LONG AS WE HAVE A VALID PHONE NUMBER, E-MAIL ADDRESS, THEN WE CAN REACH OUT. 
          BECAUSE WHAT WE TRY TO DO IS REACH OUT VIA E-MAIL OR TEXT MESSAGE AND IF WE CAN'T, THEN WE -- THEN WE'LL SNAIL MAIL SOMETHING, WAIT A FEW MORE DAYS, MAIL SOMETHING AGAIN SO WE FIND EVERY WHICH WAY WE CAN TO GET 
          AHOLD OF THOSE CUSTOMERS. >> GALVAN: GOT IT. 
          I APPRECIATE THAT. THANK YOU. I GUESS ONE OF THE LAST POINTS I WAS GOING TO MAKE WAS WE TALKED ABOUT EARLIER GENERAL CLASS, THE DIFFERENCE BETWEEN THE GENERAL CLASS RATE STRUCTURE VERSUS THE RESIDENTIAL RATE STRUCTURE.  I'D STILL BE SPREED IN FINDING WAYS THAT WE CAN MAKE -- I KNOW WE DID A REALLY GREAT PUSH IN 2023 TO CHANGE THAT, I THINK IT'S WORKING REALLY WELL. I THINK WE SHOULD ALWAYS LOOK AT CONTINUED EFFORTS ON THAT. I KNOW YOU MENTIONED THE DASHBOARD, OTHER CLASS OF CUSTOMERS WE CAN LOOK AT, I THINK THAT WOULD BE WORTH EXPLORING FURTHER. THOSE ARE ALL MY QUESTIONS. 
          COUNCILMAN WHYTE? >> WHYTE: THANKS, JUST A COUPLE OF THINGS. 
          ONE, I'M GLAD A COUPLE OF MY COLLEAGUES BROUGHT UP THE UPLIFT PROGRAM AND THAT EXTRA WATER USAGE. I GUESS I UNDERSTAND THERE MAY BE REASONS FOR IT, BUT IT DOES SEEM TO ME THAT WE NEED TO LOOK AT THAT IF THEY'RE USING SIGNIFICANTLY MORE WATER THAN THE AVERAGE USER, OBVIOUSLY THAT'S COMING -- THAT'S GOING TO ADD COST TO THE GENERATE PAYER, AND SO I DO THINK WE SHOULD CHECK THAT. NUMBER TWO, ON FIXING THE PIPES IN THAT TEXAS TRIBUNE ARTICLE THAT MY COLLEAGUE MENTIONED EARLIER, WE TALKED ABOUT HOWELL PASS SO WAS ON PACE TO STOP THEIR -- THE WATER THEY WERE LOSING BY 44% OVER A CERTAIN PERIOD OF TIME. DO WE HAVE ANY GOAL HERE 
          AS TO WHAT -- I MEAN, HOW MUCH ARE WE TRYING TO -- >> YES. 
          SO AS COUNCILWOMAN GAVITO SAID IN 2023, WE WERE ROUGHLY AT 20 BILLION-GALLONS. OUR GOAL WITHIN THE NEXT 10 YEARS CUT IT BY 50%. 
          WE'D LIKE TO DO IT QUICKER, BUT WE NEED THE RATES TO BE ABLE TO DO 
          SO. >> WHYTE: YOU NEED THE INCREASED RATES TO BE 
          ABLE TO STOP THE WATER LOSS QUICKER? >> SO WE CAN FIX THOSE PIPES THAT ARE PROBLEMATIC, SO WE CAN BRING THOSE CREWS ON TO 
          GET TO THOSE LEAKS FASTER. >> WHYTE: RIGHT. 
          AND SO IS THERE ANY WAY AFTER THIS YOU CAN GET US A COST -- FOR INSTANCE, IF WE AARING, YOU KNOW, 5 MILES OF PIPING, WHAT DOES THAT COST AND HOW 
          MUCH WATER WILL WE THEN BE SAVING? >> YES, SIR. 
          OUR BOARD HAS ASKED US FOR THAT KIND OF DATA, SO, YES, WE CAN PROVIDE 
          THAT. >> WHYTE: AWESOME. THANK YOU. 
          AND THAT'S REALLY -- I MEAN, I GUESS I'LL JUST SAY THAT -- I'LL GO BACK TO WHERE I BEGAN. YOU KNOW, THIS CAROLLO REPORT THAT SAYS YOU NEED TO RAISE RATES, IT'S BASED ON WHAT YOU'RE TELLING THEM THAT YOU WANT, YOU KNOW? AND IT'S LIKE, AGAIN, IF -- IF MARC WANTS A NEW 
          [02:45:01]
LAKE HOUSE, I CAN FIND A FINANCIAL ADVISER TO LOOK AT MY BANK ACCOUNT AND SAY, I'M SORRY, MARC, YOU DON'T HAVE ENOUGH MONEY, SO EITHER GET A JOB THAT PAYS YOU MORE OR GO ROB A BANK, YOU KNOW? AND I MEAN, SO HERE AGAIN, IT'S WHAT YOU'RE TELLING CAROLLO YOU WANT IS HOW THEY'VE COME UP WITH THIS PLAN TO HELP YOU CREATE THE MONEY. AND I'M NOT SAYING, AGAIN, THAT SOME OF THIS ISN'T NEEDED, BUT WHAT I'D LIKE TO SEE, I GUESS, OR UNDERSTAND MORE GOING FORWARD IS EXACTLY WHAT WE'VE GOT TO DO.  AND YOU'VE HEARD THIS ALREADY. WHAT WE HAVE TO DO RIGHT NOW VERSUS WHAT WE WANT TO DO. AND I WOULD LIKE TO SEE SOME SORT OF PLAN GOING FORWARD ON HOW WE CAN MOVE TO A MORE -- WHAT I 
          WOULD CALL, A PROACTIVE APPROACH. >> SURE. 
          SO FIRST OF ALL, I DON'T THINK WE'RE PRESENTING WHAT WE WANT TO DO TODAY. I THINK MAYBE WE HAVEN'T COMMUNICATED FULLY TO YOU, BUT WHAT STAFF IS PRESENTING TO YOU IS A RESULT OF MULTIPLE MASTER PLANS THAT HAVE IDENTIFIED THE STATUS OF THE SYSTEM AND THEY HAVE RANKED AND PRIORITIZED SYSTEM IMPROVEMENTS NECESSARY TO AVOID SYSTEM FAILURE. SO THAT'S WHAT'S BEING PRESENTED TO YOU AS A COMPOSITE. SECONDLY, COST OF SERVICE STUDIES ARE NOT JUST TO VALIDATE YOUR WISH LIST. UTILITY COMPANIES HAVE THEIR REPUTATION RISK AS WELL. AND THEY PULL THE INFORMATION, THEY LOOK AT OUR CUSTOMER BASE, THEY LOOK AT OUR SYSTEM AS A WHOLE, OUR WATER AND WASTEWATER, THE NUMBER OF MILES, HOW WE TREAT THEM, OUR TREATMENT PHILOSOPHIES. YOU KNOW, THERE WAS A VERY GOOD QUESTION EARLIER ABOUT OUR BENCHMARK RATE ON WASTEWATER VERSUS WATER. 
          WELL, WE ARE VERY BLESSED IN THAT THE BIG PLUS WE HAVE ON OUR WASTEWATER SYSTEM IS EVERYTHING FLOWS DOWNHILL. I WON'T USE THE WORD, BUT IT FLOWS DOWNHILL. AND SO WE USE GRAVITY, AND SO THAT CHANGES THE COST -- THE BURDEN COST OF THE COST OF SERVICE FOR OUR WASTEWATER. 
          OUR WATER SYSTEM IS VERY DIFFERENT. OUR SOURCES AND PIPES, THE MAJORITY OF THEM -- THE LARGEST ONE IS ON WURZBACH ROAD. 
          IT'S NORTH. AND SO THE PIPES AND THE ENERGY REQUIRED TO MOVE THAT WATER AROUND THE SYSTEM ADDS TO THAT COST. 
          SO THAT'S A VERY DIFFERENT COST OF SERVICE BURDEN. 
          SO IT'S NOT JUST VALIDATING OUR WISH LIST. 
          IT'S MAINTAINING THEIR REPUTATION AND THEY HAVE AN EXCELLENT REPUTATION TO GO IN AND LOOK AND VALIDATE THE METRICS AND THE PERFORMANCE OF UTILITIES TO DETERMINE THE COST OF SERVICES THAT WE ARE REQUIRED BY STATUTE TO BUILD OUR RATE STRUCTURE AROUND. SO I REALLY -- YOU KNOW, I UNDERSTAND YOUR ROLE, BUT I WANT TO MAKE SURE OUR CUSTOMERS UNDERSTAND THE EFFORT THAT WAS TAKEN TO PRODUCE THAT COST OF SERVICE STUDY, BECAUSE IT IS NOT A RECTAL EXTRACTION. IT IS BASED ON ACTUAL 
          PERFORMANCE METRICS OF THE ORGANIZATION. >> WHYTE: AND I APPRECIATE THAT. AND I'LL FOLLOW UP MORE WITH YOU OFFLINE ABOUT THAT, BUT IN MY LAST 40 SECONDS, I DID WANT TO -- I DID WANT TO CLARIFY SOMETHING I ASKED YOU IN THE FIRST ROUND. SO FROM WHAT YOU'VE SAID, IT'S $100 MILLION IS OUR COST TO OPERATE VISTA RIDGE ANNUALLY? 
          >> NO. IT'S THE COST OF THE WATER -- IT'S THE LINE ITEM FOR WATER OPTIONS, I DO BELIEVE. AND IT'S THE COST FORVIS FOR VISTA RIDGE AND THE OPERATIONAL COST. 
          >> WHYTE: AND THEN I ASKED YOU AFTER THAT, WE HAVE MORE -- WE CREATE MORE THAN $100 MILLION IN REVENUE THROUGH SELLING THAT WATER TO OUR 
          RATEPAYERS? >> WHAT'S OUR OVERALL REVENUE FOR -- CUSTOMER 
          REVENUE? >> OVERALL REVENUE'S AROUND CLOSE TO A BILLION DOLLARS AND WE SELL 250,000-ACRE FEET OF WATER, SO. SO... WE 
          CAN COVER OUR COST FOR SELLING THAT WATER. >> WHYTE: OKAY. 
          >> FOR THAT WATER OPTION. WE COVER THE COST FOR 
          THAT WATER OPTION. >> THE BIGGEST COST -- WE'RE PAYING FOR THE INFRASTRUCTURE OVER 30 YEARS BASICALLY. WE'RE PAYING FOR THAT PIPELINE. THEY HAD TO CONSTRUCT THAT PIPELINE. 
          WE'RE REPAYING FOR IT. WE GET THE PIPELINE AT THE END OF 30 YEARS. 
          >> WHYTE: AND HOW MANY GALLONS OF WATER CAN VISTA RIDGE TAKE IN? 
          DO WE KNOW THAT? >> 50,000-ACRE FEET IS THE EXPECTED DELIVERY. 
          THEY CAN PRODUCE UP TO 53,000 BASICALLY IN A YEAR. 
          COUNCILMAN WHYTE, JUST TO BE RESPECTFUL OF EVERYONE ELSE, IF YOU HAVE FOLLOW I DON-ON QUESTIONS YOU CAN SUBMIT THOSE AND WE'LL MAKE SURE THOSE 
          ANSWERS ARE SHARED WITH THE BODY. >> WHYTE: YEAH, YEAH. 
          THANKS. >> KAUR: I WANTED TO COMMENT ON THE LASES COUPLE OF SLIDES REGARDING THE RATE CHANGE. 
          THE MAYOR I'M SURE WILL SUMMARIZE. SLIDE 45 SCARES US -- OR 46, THERE'S A LOT OF WATERLINES THAT ARE BROKEN IN OUR -- OR OLD 
          [02:50:06]
AND POTENTIALLY GOING TO BE BROKEN IN OUR CITY. IF I COULD NEVER GET A TEXT FROM GAVINO ABOUT AN EMERGENCY LINE BREAK AGAIN, I WOULD BE SO GRATEFUL. AND SO UNFORTUNATELY, IT TAKES MONEY TO PUT IN TO FIGURE OUT HOW TO GET THESE BREAKS DOWN. IT'S THE SAME PROBLEM WE HAVE WITH OUR STREETS AND SIDEWALKS. YOU MENTIONED IT EARLIER, AND WE DON'T REALLY HAVE A GREAT PLAN FOR OUR STREETS AND SIDEWALKS EITHER, SO I DON'T KNOW THAT'S A GOOD COMPARISON, BUT HONESTLY, THIS IS THE CHALLENGE. WE WANT MAPS BECAUSE WE WANT TO KNOW WHERE OUR NEIGHBORHOODS ARE GOING TO BE AFFECTED, WE WANT TO BE ABLE TO HELP PLAN FOR IT, HELP COMMUNICATE, SO THEY KNOW WE'RE GOING TO FIX YOUR WATERLINE, BECAUSE WHAT YOU DON'T WANT TO HAPPEN IS WAKE UP IN THE MORNING AND HAVE A WATERLINE BREAK ON YOUR STREET. SO WE SEE THAT. 
          AND AT THE SAME TIME, WE KNOW THE REALITY THAT SOME OF MY COUNCIL COLLEAGUES ALREADY MENTIONED WITH WHAT IS TRUE ABOUT OUR CITY AND OUR COMMUNITY AND THE RESIDENTS THAT THEY'RE FACING. 
          SO WHAT I THINK WOULD BE REALLY HELPFUL IS MAKING SURE -- AND THE OTHER THING THAT I THINK MOST OF US RECOGNIZE IS WE WANT THE FOLKS THAT HAVE THE ABILITY TO SEE AN INCREASE IN RATE TO TAKE ON THE MAJORITY OF THAT RATE. I THINK IF WE CAN FIGURE OUT  A WAY TO GROW OUR -- THE SUPPORT PLAN THAT YOU HAVE FOR ASSISTANCE AND TRY TO ASSESS THE -- BREAK DOWN THE RATE SO THAT WE CAN SEE WHAT WOULD IT MEAN FOR SOMEONE ON UTILITY ASSISTANCE, WHAT IS THEIR RATE GOING TO INCREASE AS, VERSUS SOMEONE THAT IS USING 10,000-GALLONS A MONTH AND HOW CAN WE ENSURE THAT THE PEOPLE THAT ARE MOST VULNERABLE IN OUR COMMUNITY ARE NOT THE MOST IMPACTED. AND WHEN WE SAY MOST IMPACTED, MOST IMPACTED DOESN'T MEAN THE AMOUNT, RIGHT? BECAUSE IF I AM AT BASIC WAGE, MY MOST IMPACTED A $5 INCREASE A MONTH MIGHT BE MORE THAN -- PROBABLY IS MORE THAN $20 FOR SOMEONE WHO'S MAKING 200,000. 
          SO I JUST THINK WE NEED TO BE REALLY JUDICIOUS ABOUT HOW WE IMPLEMENT THIS. AND I KNOW YOU GUYS -- I MEAN, JALEN, IT IS AM MADING  YOU ARE THE BOARD CHAIR AND YOU PRESENTED AS IF YOU WORK FOR SAWS TODAY. YOU KNEW SO MUCH INFORMATION AND THAT SHOWS THE LEADERSHIP THAT YOU'VE HAD ON THAT BOARD. 
          SO I KNOW YOU GUYS CARE. I CHARGE YOU TO FIGURE OUT AN INCREASE IN STRUCTURE THAT HELPS US ADDRESS THE BIGGEST PROBLEM THAT WE HAVE IN OUR COMMUNITY OF AGING INFRASTRUCTURE AND AT THE SAME TIME DOESN'T IMPACT OUR MOST VULNERABLE POPULATION. THANKS, MAYOR. 
          >> MAYOR JONES: ANYONE ELSE THAT WOULD LIKE TO ENGAGE ON THE SECOND ROUND? OH, SPEARS? COUNCILWOMAN SPEARS? OKAY. WASN'T ON THE LIST. GO AHEAD. 
          >> SPEARS: SORRY. THANK YOU, MAYOR. SO IF I HEARD YOU RIGHT WITH THIS RATE INCREASE, IT WOULD REDUCE THE WATER LOSS BY 50% -- 
          >> NOT WITH THIS RATE INCREASE, THAT TARGET WAS BY 2030. 
          10 YEARS -- I'M SORRY, 50% IN 10 YEARS. THAT WAS THE TARGET. 
          >> SPEARS: SO DO YOU HAVE ZANY OTHER RATE INCREASES PROJECTED RIGHT NOW? HOW ARE WE GOING TO FIX THE REST OF IT. 
          >> WE WANTED TO GET INPUT FROM EVERYONE TODAY. STAFF WILL HAVE TO GO BACK AND PRESENT A RECOMMENDATION TO THE BOARD ON THE ACTUAL CLASS IMPACT, BILL IMPACT, AND THE TERM OF THE RATE. AND THEN THAT -- WE CAN -- WE WILL BE IN A POSITION AT THAT POINT TO ANSWER YOUR QUESTION 
          ABOUT FUTURE RATE INCREASES. >> SPEARS: THAT WOULD BE REALLY HELPFUL. I THINK THAT TRUST IS GOING TO BE SO IMPORTANT HERE, AND THAT COMES WITH TRANSPARENCY FOR OUR RATEPAYERS. 
          >> ABSOLUTELY. >> SPEARS: AND I AM -- AS WE WERE TALKS JUST THIS LAST BIT IS WHEN IT STARTED TO CLICK FOR ME. OKAY, WE'RE TALKING ABOUT NOW, BUT WHAT'S GOING TO HAPPEN IN FIVE, 10 YEARS, 15, 20, TO REALLY FIX IT? BECAUSE THEN EVERYTHING'S CONTINUING TO AGE. 
          I MEAN, WE CAN'T GET RID OF IT ALL, BUT WHAT'S THE REST OF THE PLAN IS WHAT 
          I WANT TO KNOW? >> THE HORIZON ON THE MAJORITY OF THE MASTER PLANS ARE 10 AND 20 YEARS. SO WE, THE BOARD, FEELS 
          YOUR PAIN. >> SPEARS: OKAY. THANK YOU. 
          THANK YOU, MAYOR. >> MAYOR JONES: I THINK THAT WAS THE LAST ONE. 
          OKAY. GREAT. THANK YOU, CHAIR, THANKS, ROBERT, THANKS TO THE TEAM FOR DOING SUCH A GREAT JOB. 
          I'M GOING TO FOLLOW UP ON A COUPLE OF QUESTIONS. AND JUST TO REITERATE, THIS PRESENTATION AND THE POTENTIAL COST INCREASES IS NOT REFLECTIVE OF ANY RESOURCES NEEDED TO MOVE A CHILLED WATER PLANT DOWNTOWN, CORRECT? 
          >> CORRECT. >> MAYOR JONES: OKAY. DOES NOT INCLUDE THAT? OKAY. THE DATA  DATA CENTER'S PIECE, JUST FOR EVERYONE'S EDIFICATION, DURING THE BOARD PRESENTATION, IT WAS INDICATED THAT WE'VE GOT 35,000-ACRE FEET AVAILABLE FOR DATA CENTERS. RIGHT NOW WE'RE CURRENTLY USING 20,000. 
          [02:55:03]
HOW DOES THIS PLAN ACCOUNT FOR, AND AS WAS MENTIONED I THINK BY DONOVAN, SOME OF THE LARGER USERS ARE GOING TO BE AT FIVE. 
          SO YOU DON'T ACTUALLY HAVE MUCH MORE HEAD ROOM AFTER SOME OF THOSE COME ONLINE, SO HOW DOES THIS PLAN CREATE ADDITIONAL CAPACITY IN THAT RESPECT? PUT MORE SIMPLY, WHAT IS NEEDED -- WHAT PART OF THIS PLAN IS NECESSARY -- INTRODUCTION TO THE COMMUNITY, OR INCREASED DEMAND FOR THAT? 
          >> I WOULD SAY IT'S A COMPLEX ANSWER. THE DATA CENTERS, SOME OF THEM ARE USING SOME POTABLE WATER, SOME OF THEM ARE USING RECYCLED. 
          SO SPECIFICALLY TO THE RECYCLED PIECE OF IT, AND, DOUG, YOU'LL HAVE TO HELP ME ON THE RECYCLED RATES, BUT WE ARE ADDRESSING SOME OF THE RECYCLED RATES WHICH ARE SUPPOSED TO PAY FOR ITS OWN SELF, THE RECYCLED SYSTEM. TO THE EXTENT THEY'RE USING POTABLE WATER, AND THE LARGE DATA CENTERS THAT HAVE BEEN PROPOSED, THE LARGE AMOUNTS OF WATER ARE PRIMARILY RECYCLED WATER. SO REALLY IT'S THE RECYCLED WATER RATES THAT ARE GOING TO ADDRESS THE DATA CENTER QUESTION I 
          THINK MOSTLY. >> MAYOR JONES: IF YOU COULD PROVIDE THAT FULL EXPLANATION IN WRITING TO THE COUNCIL, THAT WOULD BE VERY HELPFUL. 
          THANK YOU. >> SURE. >> MAYOR JONES: I MEAN, OUT OF COUNCILMAN WHYTE'S QUESTION ABOUT SELLING WATER MAKES US THINK, OF COURSE, CPS'S MODEL, SO I THINK IT WOULD BE INTERESTING FOR US TO UNDERSTAND ARE THERE OTHER EXAMPLES OF COMMUNITIES THAT ARE GENERATING SO MUCH WATER THEY ARE SELLING IT, AND IS THAT SOMETHING WE HAVE 
          REVIEWED AS AN OPTION? >> I'M NOT AWARE OF ANY COMMUNITIES THAT ARE SELLING LARGE QUANTITIES OF EXCESS WATER. IT WOULD BE -- RIGHT NOW WE HAVE EXCESS WATER IN TIMES WHEN EDWARDS AQUIFER'S A LITTLE HIGHER. AS I MENTIONED EARLIER, WE GOT OUR PERMIT CUT BACK BY ALMOST 40% LAST YEAR AND WE'RE PROJECTING IT TO BE CUT BACK BY, IF WE DON'T GET SOME RAIN, THAT SAME AMOUNT THIS YEAR. 
          AND IF THAT'S THE CASE, WE DON'T HAVE ANY WATER TO SELL. 
          AND IF YOU DON'T HAVE WATER AT TIMES TO SELL EXCESS, PEOPLE DON'T -- ONLY WANT IT WHEN IT'S REALLY DRY. THEY DON'T NECESSARILY WANT IT WHEN IT'S FALLING OUT OF THE SKY AND IT'S COMING FOR FREE, BUT -- SO THAT'S A CHALLENGE. SO I DON'T THINK WE HAVE ANY EXCESS WATER TO SELL. AND I'M NOT AWARE OF ANY MODELS THAT -- WHERE OTHER COMMUNITIES, CERTAINLY IN SOUTH TEXAS, NOBODY'S SITTING ON 
          EXCESS WATER RIGHT AT THE MOMENT. >> MAYOR JONES: OKAY. 
          THANKS FOR THAT CLARIFICATION. WHAT PERCENTAGE OF OUR CUSTOMERS ARE WATER BURDENED? AND DEFINE THAT FOR THE 
          GROUP, PLEASE. >> WE LOOK AT -- WELL, WATER BURDENED, I'M TRYING TO REMEMBER THE EXACT FIGURE, BUT I WANT TO SAY IT'S DEEMED TO BE COMBINED WATER AND WASTEWATER IS LESS THAN 4% OF YOUR INCOME, AND WE -- WE DID HAVE A SLIDE IN HERE. CAN YOU GO TO SLIDE 60 FOR A SECOND. I HAD A COUPLE IN BACKUP. 
          SO 60. SO THIS JUST SHOWS YOU WHERE WE'RE AT AS A PERCENTAGE RESIDENTIAL ANNUAL BILLS, THE PERCENTAGE OF MEDIAN HOUSEHOLD INCOME. I THINK THIS IS SOMETHING THAT I SHARED WITH THE 
          BOARD THE OTHER DAY. >> MAYOR JONES: YEAH. BUT MY QUESTION IS, WHAT PERCENTAGE OF THE USERS ARE WATER BURDENED? I MEAN, I UNDERSTAND HOW MANY PEOPLE ARE IN THE PROGRAM, BUT THAT DOESN'T NECESSARILY MEAN THAT'S REFLECTIVE OF OUR UNDERSTANDING OF WHAT PERCENTAGE OF THE POPULATION OF -- OF THOSE BEING SERVED ARE WATER BURDENED. 
          YOU CAN FOLLOW-UP. THAT WOULD BE HELPFUL. >> I'LL HAVE TO FOLLOW 
          UP. >> MAYOR JONES: CPS HAS THAT NUMBER AND AS WE'RE LOOKING ACROSS, IT WOULD BE HELPFUL FOR US TO UNDERSTAND THAT AS WELL. 
          I WOULD IMAGINE THERE'S QUITE A BIT OF OVERLAP. >> OKAY. 
          >> MAYOR JONES: OKAY. AND SO YOU'VE HEARD A COUPLE OF FOLKS EXPRESS INTEREST IN WANTING TO UNDERSTAND HOW WE CAN HELP OURSELVES WHEN IT COMES TO SPRAWL. I APPRECIATED ACTUALLY SLIDE 35 YESTERDAY AND CERTAINLY TODAY AS WELL. IT'S ON THE BUDGET EMPLOYEES OVER TIME, BUT THERE'S ACTUALLY, WHEN YOU SEE THE -- THANK YOU. 
          WHEN YOU SEE THE INCREASE IN TERMS OF MILES AND OVER HOW QUICKLY THAT HAS HAPPENED, I THINK WHAT WOULD BE HELPFUL FOR US IS IF YOU COULD DO LIKE A CHART, RIGHT, THAT SAYS ON THE BOTTOM, IT'S BY YEAR. 
          AND ON THE Y AXIS, YOU COULD DO MILES THAT AS IT'S INCREASED OVER TIME, AND THEN YOU CAN PLOT ON THAT KIND OF AVERAGE COMMERCIAL, AVERAGE RESIDENTIAL. SO FOLKS CAN VERY CLEARLY SEE IF THERE IS A CORRELATION BETWEEN INCREASED MILES THAT WE NEED TO MAINTAIN AND INCREASES BETWEEN PEOPLE'S BILL, LIKE A REAL QUICK SNAPSHOT. 
          DOES THAT MAKE SENSE? THANKS, DOUG. OKAY. 
          YOU DON'T HAVE TO ANSWER IT IF YOU DON'T HAVE IT NOW, BUT IF YOU WOULD SHARE WITH US, AGAIN, AS YOU HEARD, I THINK A LOT OF CONCERN ABOUT FOLKS 
          [03:00:03]
THAT ARE PO 10 SALLY GOING TO QUALIFY FOR UPLIFT, EVEN IF THEY DON'T CURRENTLY AS WE LOOK AT THINGS LIKE THE IMPLEMENTATION OF THE ONE BIG BEAUTIFUL BILL, SO IF YOU HAVE SOME PLANNING ASSUMPTIONS THAT YOU ALL ARE OPERATING OFF OF AS YOU LOOK AT EVEN THE NEXT 18 MONTHS ABOUT THE ASSISTANCE NEEDED IN THAT PROGRAM, THAT WOULD BE VERY HELPFUL FOR US TO UNDERSTAND. OKAY. SO, YOU KNOW, NOT SURPRISINGLY, NOT UNLIKE A LOT -- OH, ACTUALLY, ONE MORE THING. 
          YOU DIDN'T SHOW IT HERE, BUT IT WAS HELPFUL IN THE DISCUSSION YESTERDAY WHEN YOU LOOKED AT THE AVERAGE COMMERCIAL MONTHLY BILL AND WE ARE MUCH ON THE MUCH LOWER END AS COMPARED TO AUSTIN AND HOUSTON. 
          AND YOU TALKED ABOUT THEIR DIFFERENCES IN APPROACH WHEN IT COMES TO IMPACT FEES AND ET CETERA, BUT I THINK AS YOU HEARD HERE, THERE'S A LOT OF INTEREST IN MAKING SURE THAT WE ARE, IN FACT, CHARGING OUR COMMERCIAL CUSTOMERS AN APPROPRIATE RATE. THAT IS -- ALLOWS FOR OTHER THINGS, BUT I THINK ALSO IS REFLECTIVE OF THEIR CAPACITY TO PAY. 
          SO, AGAIN, THIS GOES BACK TO WHAT I WAS ASKING FOR EARLIER, IT'S NOT JUST THE COST OF SERVICE, BUT ALSO COST OF CONSERVATION, BUT ALSO AN EQUITABLE APPROACH TO THEIR BILL. OKAY. 
          NOT UNLIKE THE BOARD MEETING -- GERCH, AS YOU HEARD HERE, BETTER FIDELITY ON THE PROBABILITIES, THE TIMING AND THE  SCOPE AND THE PRIORITIZATION THAT WAS ALSO ASKED FOR YESTERDAY, SO WE LOOK FORWARD TO THAT, CLARITY ON SOME OF THOSE UNFUNDD MANDATES THAT ARE IMPACTING THE WORK, SO WE UNDERSTAND, AGAIN, WHAT A MINIMUM LEVEL OF INVESTMENT IS NECESSARY AND AS WAS MENTIONED THE COST OF SERVICE VERSUS KIND OF A COST OF CONSERVATION, IS WHAT I'LL CALL IT AT THIS POINT. 
          I THINK WE RECOGNIZE THE NECESSARY INVESTMENT TO INSURE THAT THESE FACILITIES ARE OPERATING IN A WAY THAT THEY NEED TO TODAY AND IN THE FUTURE, BUT YOU COULD, OF COURSE, HEAR THE CAUTION AND CONCERN TO MAKE SURE WE'RE PAYING THE MINIMUM AMOUNT IN LIGHT OF SOME OF THE OTHER -- IN LIGHT OF THE OTHER INVESTMENTS THAT WE NEED TO MAKE. SO THANK YOU VERY MUCH, 
          AND WE LOOK FORWARD TO THE FOLLOW-UP. >> OKAY. 
          >> MAYOR JONES: THE TIME IS 5:07 P.M. ON WEDNESDAY, FEBRUARY 4TH, AND THIS MEETING IS ADJOURNED. WE DO HAVE PUBLIC COMMENT, 47 INDIVIDUALS FOR PUBLIC COMMENT. 
* This transcript was compiled from uncorrected Closed Captioning.