City Council - Special Meeting

Welcome to this City of Fairlands City Council special meeting on Monday, June 22nd. I'd like to call this meeting to order at 4 p.m. I have a roll call, and it looks like we have six.

Altamir Patel stepped out, and then Mayor Pro Tem Chavarria is not here today.

In case, moving on to citizen comments to comply with any provisions of the Texas Open Meeting Act. City Council may not deliberate on the item listed. However, City Council will listen to public comment. And during this comment, the public shall comply with the council's rules of decorum. I'm not sure

We don't have anybody here.

So moving on to new business discussion regarding fiscal year 2027-2031 capital improvement plan, CIP workshop and budget update. I'd like to turn this over to Mr. Epperson.

Thank you, Mayor, and good afternoon, Council. As the Mayor said, this is our five-year capital improvement program budget workshop. Really kind of gets us kicked off and rolling into budget as we'll continue to have budget workshops through July and August. So, what we're gonna cover in tonight's agenda is both for general fund and the enterprise fund portions of the capital improvement program. We'll touch base on our ongoing projects, new projects for fiscal year 27, as well as the associated funding sources and the proposed CIP for the next five years. Just as a reminder, we adopt the five-year CIP the first year in that, so fiscal year 27 will be adopted as part of our actual FY27 budget, and then the remaining four years are planning years. And then I want to emphasize the decisions we make tonight on the FY27 capital improvement program. And what those do is they impact our debt payments actually in fiscal year 2028. So, essentially, our ongoing work approved as part of the current FY26 budget is what locks in our debt payment for FY27. We also need to start making decisions on the speed with which we complete the 2023 bond program and the impacts that that has on managing the tax rates and the timing of a future bond program, which was planned or had been talked about being planned as early as the 2028 election cycle. But you'll see throughout that as we get into the back end of the five-year program, we're showing a lot of those potential projects for a 2028 bond package as unfunded GEO projects. Both of these, you know, the speed of completing the 2033 packet as well as a future bond package have to be looked at in light of the end of TERS 2 as well. So we're gonna wanna have some decision points on some of those things and relate those to the end of TERS 2 as well when we'll have some additional capacity on our debt side. So with that, I'm going to hand it off to our assistant director of our capital projects, Fabiola DiCarvola, to start walking us through the projects. Thank you.

Thank you, Mr. Epperson. Good afternoon, mayor and council members. I'll be presenting on the projects funded by the general fund on this and the next slides. I will now go over the list of projects. More details on the funding needs will be presented later by the Office of Management and Budget. I would like to highlight from this slide The veterans drainage, which is currently at 60% design, and construction is expected to start next year. Other projects listed on the slide have either started the design phase or are in contract negotiations to restart the design phase. And a few are planned for future years. In total, we have 15 projects we are recommending funding for fiscal year 27 through 31. Most of these projects are GEO bond funded, a total of 10 drainage projects. Out of the 10 GEO bond funded projects, three are in design, four others will start designing this fiscal year, and three others will start designing the fiscal year 27. These are projects that the voters approved to receive funding for the 2023 GEO bond funds, and all the drainage projects will meet city's intent to have this project started in the five years from when this bond passed. And here are the 11 facilities projects that we are recommending funding for fiscal year 27 to 31. We recently approved a professional services contract for the Reflection Bay Fuel Island project and design phase has started. Another project to highlight on the facility side is the public safety building roof replacement. A thermal scan of the roof was done in March to assess the current condition of the roof. This assessment determined that the roof condition is good and replacement would not be necessary. The roof will still need to be rehabilitated through coatings and other minor repairs, but the budget can be reduced from approximately $2.6 million to approximately $1.3 million. This represents a significant project budget reduction. The facilities division team did a great job looking at this asset and being diligent to ensure the right investment is done at the right asset and at the right time. There are seven parks projects we recommend in funding for fiscal year 27 to 31. This list includes design and construction of two full segments of Clear Creek Trail, segments four and five. Segment four limits are from Berry Rose Water Reclamation Facility to University of Houston Clear Lake. And segment five limits are from Village Trail to Dixie Farm Park. Clear Creek Trail is a result of Trails Master Plan recommendations. There is also another trail improvement, which is included in the Sports Black Shadow Creek Improvement Project, PK2702. This portion of the trail, Segment 1, includes the limits from Kingsley to the West Palin Library. Another project I would like to highlight is the Independence Park Phase 2. Based on the prioritization exercises conducted by the 2020 Parks, Recreation, Open Spaces, and Trails Master Plan, The Independence Park is highly utilized and Phase 2 enhancements are a top priority. This project will also receive funding contributions from the Forever Parks Foundation's fundraising, in addition to funding from the 2023 Geobond package. The conceptual plan was developed last year and will start the design phase this fiscal year. There are 20 street projects in the five-year CIP. Some of these are already in the design phase and others will start either in the 27 or beyond. Concrete sidewalk gaps and replacement has ongoing construction. We are now doing a gap assessment to start the efforts on connecting the sidewalk gaps. On this slide, we are also showing two new projects that will be reimbursed by the TURS. The TR2605, the bridge replacement at Kingsley at Clear Creek, and TR2606, Broadway Street Expansion at Kirby Drive to Half Moon Bay. The Kingsley Drive Bridge and the Broadway expansion projects are both in the design phase. Another project to highlight is the Traffic Signal at Kingsley County Road 48 project, which is currently in design and funding has 50-50 split contribution between city and Brazoria County. We have other projects shown on this list that we have identified as needed projects. However, they are unfunded at this time and will require voter approval. The TR2705, a preliminary engineering report for future bond referendum project, which is planned to start in fiscal year 28, will include an assessment of the existing road conditions and provide a scope of the repairs and more accurate costs on these projects. And here's the rest of the list of the street projects. I'll now pass the presentation to Ms. Weekly, Senior Capital Analyst, to continue with the presentation.

Thank you, Fabiola, and good afternoon, Mayor and Council. Now we will review the funding portion of the FY27-31 Capital Improvement Plan, or CIP. With the five-year CIP, this slide indicates the future debt issuances based on the proposed funding for FY27-31. The permanent improvement bonds listed on this slide is comprised of the 2023 voter-approved bond election. With the summary of bond proceeds, amounting to $199 million over the five-year planning period. This forecast does not include any future unfunded geobond projects. This graphic depicts funding flows. We have our current FY27 funding estimates, and any changes to the FY27 debt issuance directly affects the FY28 debt service rate. Debt issued in FY27 for CIP projects will begin repayment in FY28. The current debt obligations for FY27 includes all projects approved for the recently approved debt sale. The potential impact on future debt rate is a result of projects approved and debt sold in FY27. Now we'll review the estimated capital cost for funding for the general fund projects for FY27 through 31. The next few slides outline what will be presented to council for adoption in September. The CIP is a five-year plan with the first year formally adopted each September. Projects scheduled for FY28 through 31 are included for planning purposes. While they are part of the approved plan, they are not authorized or fully funded until the budget for that fiscal year is adopted. Capital costs for general fund projects by fiscal year, including drainage, facilities, parks, and streets, are shown here. For FY27, total capital costs are an estimated $126 million, driven by projects such as Orange Street Service Center Phase 2 and veterans drainage improvements. For FY28, the capital costs are an estimated $128 million, driven by drainage projects, including Fight Road from Cullen to Harkey and Harkey Road Broadway to Mary's Creek. For FY29 through 31, capital costs reflect continued investment in city's drainage and street improvement programs. The majority of the FY29 through 31 projects are future unfunded geobond projects. This slide shows the capital costs by fiscal year and project type. For FY27, Orange Street Center Phase II, parks land acquisition, Veterans Drainage Improvements, and Harkey Road Drainage Broadway to Mays Creek. For FY27, we have McCowell Road Widening, Clear Creek Trail, and Fite and Harkey Road Drainage Improvement Projects. In FY29 and 30, key projects include Wood Creek Subdivision Improvements, the Reed Boulevard Extension from Hughes Branch Road to McCard, and the Drainage Improvement program, all of which have been identified as future unfunded geobond projects. In FY 31, we have Fire Station 7 being funded by the FY 23 voter-approved election. Also, the drainage improvement plans and the public safety training facility are identified as future unfunded geobond projects. Shown here are the planned funding sources for projects over the five-year period. Funding is primarily sorted supported by general fund resources, along with existing bond authorizations, certificates of obligation, cash funding, and anticipated future bond capacity. When possible, we pursue alternative funding sources, such as grants, to help reduce the need for debt. I'll highlight a few of the projects for FY27 through 31 planning period. In FY27, the 2023 GO bond funds several drainage projects, including Pine Hollow, and veterans orange street service center phase two is funded by ceos and pdc is funding several parks projects in fy28 the 2023 geo bonds will fund harkey and fight road drainage projects while ceos will fund the makawa roadwork road widening project and some facilities and drainage In FY29 and 30, the unfunded GO bond package for drainage and street improvement programs are the majority of the funding component during these years. The difference in the FY27 funding compared to capital costs reflects HDAC funding. Fire Station 7 is a 2023 GO bond project scheduled for FY31. Here we see the drainage projects capital costs included in the FY27 through 31 CIP. Historical amounts shown on this slide and other slides are capital costs that have been approved through FY26. This slide is a continuation of the capital costs for the drainage projects. And we can note that the drainage improvement program projects are in FY29 through 31, and their estimated costs, which are based on a three-year average of similar projects in terms of size and scope. These projects are included for planning purposes and forecasting purposes and may be refined as project details are further developed. Projected future funding for drainage projects over FY27 to 31 planning period is $191 million and includes the unfunded future geobond package. The total budgeted amount on this slide reflects a difference of the historical budget included in the capital cost for drainage. FY27 projects include the 2023 GO bond funded projects such as Veterans, Pine Hollow, and Isla Drive drainage improvement. In FY28, the 2023 GO bond funded projects include White Road, Cullen to Harkey, and Harkey Road drainage improvement. The CO-funded projects for FY28 include Fight Road, Parkett to McLean, and Tranquility Lakes Detention Pump Station Rehabilitation and Generator. FY29 through 30, there is a drainage improvement program as funded by Unfuture as Unfunded Future GeoBonds. And this chart is a depiction of the previous slide. This slide details the facility projects for FY27 through 31 and includes historical capital costs. Two of the more noticeable projects for facilities for the planning period are Orange Street Phase 2 and the Public Safety Training Complex, which is an unfunded Future Geobond project. Amounts shown through FY26 in the historical column for the Public Safety Training Complex were COs, whereas the amounts for the planning period is fully funded by unfunded future GO bonds. Funding sources for the facility projects are shown on the slide. Water sewer certificates of obligation listed on this slide are for Orange Street Phase II, as it supports both parallel water as well as engineering and public works. And this chart is a depiction of the previous slide where Orange Street Phase 2 is visualized in FY27. Fire Station Number 7 appearing as a 2023 geobond project in FY31. And the Public Safety Training Complex as a future unfunded geobond project in FY31. Here we see the FY27 through 31 capital cost projects for parks that include historical costs. For FY27, we have Clear Creek Trail Segment 4 and the Sportsplex at Shadow Creek Ranch and Clear Creek Trail Segment 1.2 trail improvements. Funding is shown for the FY27 through 31 parks projects on this slide. As you may notice, the parks projects are primarily funded by PEDC, and the difference in the capital cost and funding for parks is a parks project that has HGAC funding, shown as historical. This chart shows the funding sources by fiscal year and highlights the funding sources allocated to the parks projects. FY27 PDC is the large funding contributor and FY28 is mostly the 2023 geo bond approved projects. The following is a list of streets projects and with their perspective capital costs for FY27 through 31. These streets projects planned for FY28 through 30 include Reed Boulevard Extension, Hughes Road to McCard, North Corrigan, and Springfield Street Reconstruction, which are currently listed as unfunded future GEO bond projects. The future funding for FY27 through 31 projects for streets is shown here. The variance in capital costs and funding results in the inclusion of the historical capital cost figures. Funding sources by fiscal year for the streets project is presented on the slide. In FY27, we have the concrete sidewalk gaps replacement funded by the 2023 GO bond. In FY28, we have the Makawa road widening project being funded by certificates of obligation. There are several projects that are either deferred or appearing as unfunded future GO bond package projects for FY29 through 31, including Reed Boulevard Extension, North Corrigan Street Reconstruction, and Springfield Street Reconstruction. Now I'll pass the presentation to Mr. Epperson for input from council.

Thank you. So back one slide. So, this concludes the portion that's general funded. Before we get into discussion or the presentation on the enterprise fund, I wanted to pause here and just, you know, a couple of things where we want input tonight is that for the 2023 bond package, there was a commitment to have all those projects started with at least their design within five years. and we are on track to meet that commitment. However, we could introduce some flexibility on the timing of the construction into those, just to spread out some of those commitments over additional years. And then, in the same vein, we believe a future bond package can potentially wait a little bit longer than previously planned in 2028. You do see throughout the presentation that when we get into the out years of our bond program, You know, we have very few funded projects at this point. But we could look at some flexibility there as well. And that would allow, you know, our naturally declining debt service side of the tax rate to create some capacity that could pay for a future bond package. So, both of these should also be looked at with the end of TERS 2 coming. which is the end of 2028, which means the value of the TERS comes into the tax rolls for tax year 29, and then our fiscal year 2030. So with that, I'll turn it back over to you, Mayor, for any questions on the general fund portion of that and any input we have on the schedule of the 23 package and the timing of a future bond election. And then when we conclude that, we'll move into the enterprise bond.

Thank you. Any questions or comments? Council Member Cade?

On slide seven. This is the first, the first two numbers are the year, right? First one is TRO six.

Yes.

So if it's five years, even this one's just,

having trouble getting fixed?

I mean, it was fixed a long time ago.

So, 06 would have been when we did our original preliminary engineering work on the McCowell Road project, and then the 2007 bond package funded a portion of that with the expectation we would pursue and get federal and state funding, matching funds, which we did many years later. And so, now that project's been under design for a few years now. The designs, progressed well. We're about at 90% design. We've got to complete the land acquisition, which is scheduled to be completed by the end of this year, calendar year. Then we would go into the utility relocation work, which should take 12 to 18 months. And then TxDOT is actually going to bid and manage the construction since this is multi-jurisdictional. It goes through Houston, Brookside Village as well as Pearland. So that's where the schedule is on that. But a lot of that was, in 2007, we didn't fund the entirety of the project. We funded a portion so we could pursue state and federal matching funds.

Thank you, I appreciate it.

Yes, ma'am.

Any other comments? Council Member Colson?

Thank you, Mayor. So on slide number four, I have a constituent that is highly interested in Dr. 2601. I know we're under design. That's the Isla Galveston Cheryl. We still on target as far as the design and actual construction starting in FY 27. Or where do we stand on that?

So the DR-2601 and DR-2602 have been combined. We are finalizing negotiations with a professional services agreement to start the design phase. And we should be bringing that to your consideration and authorization very soon, the next month or so.

All right. And then are we still looking at FY27 as far as doing the first start in the construction?

I believe that will be early, more realistic will be 28 or late 27.

Late 27 to early 28. Okay. And then on slide number five. We have fire station number seven on Bailey Road.

I know we've talked about that, needing it, not needing it.

I know we didn't get the one, I forget, grant that we call it. But where do we stand on, are we looking at still doing that, not doing it?

So, we're, I believe, preparing and close to ready to put out an RFP, looking at Chad, for our standards of coverage service, standards of coverage study for the fire department, which, you know, when the last one was done and determining the location here was done was pre the change in the annexation laws, so we want to look at that again, and then, Once we have that information, making sure where that location is is right, or do we need to look at it a little differently, and then also looking at the operational cost that bringing on that station brings with it, just timing that to where that matches up better with our capacity or ability to take on those operating costs. So we did push it out significantly in the five-year CIP to work through all those things, but next year, once we have uh the data and the information on all that we can re-look at what year um and see if we need to pull it forward or exactly where we place that okay so it's still up in the air we've yes sir that's just on the list that could kind of fall in the unfunded maybe maybe not I would consider it funded because it was part of that 2023 bond package. But whether we pull the trigger on it is still up to us.

Well, I mean, if it's deemed not necessary, then it would fall by the wayside. Correct. All right. That's what I was curious there. And then on slide seven, Member Cade covered McHale Road. In the Broadway expansion, we have that going on right now from 288 to Old Chocolate Bayou, Cullen, whatever you want to call it. As far as Phase 2 from Old Chocolate Bayou to McLean, what is the status? Does the state still kind of have that on the range to do, or has it kind of been put on hold? I've heard both, so I was just kind of curious what you all know.

It's moving forward. They are back engaged on land acquisition. We had a meeting with them a couple weeks ago, and I believe they've got, looking at Valerie Marvin, they've got the first phase slated for bidding and starting construction a year from this fall, so like fall of 27. And then the segment you just asked about, Member Koza, from Cullen to McLean, they've got that scheduled to go to bids in the fall of 28.

All right, and you say bids, that's for the actual construction or is it? Yes, sir. Okay, so fall of 27 is the first phase or section that they're on right now?

First phase and fall of 28 would be the second phase.

Okay, and one thing that we tend to get a lot of questions about, we have different types of bonds, GOs, COs, PIBs, revenue bonds. Would you kind of give the public a little definition of what each one of those means and why one over the other?

Absolutely. So PIB, public improvement bonds, and your general obligation bonds or GO bonds, those are gonna be voter approved as part of a bond election. So like a lot of our drainage projects, a lot of our transportation facilities and parks projects have all been part of either the 2019 or the 2023 bond package. And so those go to the voters, those are approved by the voters. The COs are certificates of obligation. Those do not go, but those in our financial policies are generally reserved to go in as matching funds on a project. So if there's a project we get state or federal funding for, then we would, instead of putting that in front of the voters, or oftentimes we don't have a bond election when we find out we can get, when we apply for, we get state and federal funds, the matching funds would be the COs. And then even internally, we've got the project for the Orange Street complex is that we've got another funding source through our water and sewer fund to build out those facilities. And so the half coming from the general fund is through certificates obligation. We've got some pretty stringent requirements on when we use those certificates of obligation that are in our financial policies, and they generally fall along those lines. Is there anything else, Victor, that allows CO uses that is notable? So I think that covers it.

Okay. And then as far as the revenue bonds, that's normally when it gets into the enterprise fund, is that correct?

Revenue bonds is what we historically, until I believe about the last three years, maybe four years, we used for the water and sewer projects and the enterprise fund. We made a change in policy about three years ago to move to certificates of obligation on the water and sewer side because the borrowing costs are lower than revenue bonds. And in addition to that, some of the reserve requirements are lower than revenue bonds. So that moving into COs on the water and sewer side has helped out on moderating some of our rate increases or reducing some of the required rate increases for water and sewer.

Okay, so what I heard there is basically we look at revenue bonds versus COs, you know, because it's a cost savings that we're...

Yes, sir. COs backed by water and sewer revenues are a better, lower cost for the city to do those projects. Yes, sir.

Okay. Because we get questions about that on a regular basis. What's this? What's that? Why do you use this over that? Thank you for that. Then you said that you were interested in, as far as a 28 bond, possibly pushing that out. What horizon are you looking at to change that to?

So I think, you know, initial look, probably that sweet spot is looking to when the TERS rolls off. So that is going to be actually fiscal year 2030. So you're looking at pushing it two years? I mean, we're looking for input as to whether, you know, we want to. I mean, there's a possibility we could still do an election in 29, but we don't really kick off and start spending dollars until, you know, So I think we're just trying to, with all the moving parts and the pressure on our debt service side of the tax rate and wanting to bring the tax rate in as low as we can, and get everything done we need to get done that that's one of the things we can look at is we've got because the 2023 package was a pretty sizable bond package we're going to continue to see the impacts of you know finishing out that package over the next two to three to four years, and then that's when we'll start seeing the debt service rate naturally drop from paying off existing debt and growth and the taxable value. So looking at kind of that kind of timeframe and just making sure that as we plan this and we start moving projects around and looking at what's gonna, we're gonna present as a final five-year package as part of the budget, that that's, that council's on board with those things.

Okay, I was just, you had talked about, you know, you were interested in what our input was, and you didn't say what the, I was just kind of curious to know what that is. And then my final question, I've always been told when asked, when the TERS does dissolve, that we, you know, should see a sizable impact to our tax rate. Are we still looking at a rough 10 cent drop? Is that still within the cards, or has anything changed along that line?

So I know that number's been tossed around. I don't know that we've ever said that was the number or committed to a number like that. I think we will know a lot more this fall. So one of the things we've committed to is is we've been running our tax worksheet, state tax worksheet, every year when we run that for the fiscal year that we're working on the budget for. We're running a parallel one that looks at, well, what if the TERS ended this year? We've done that two years. We want to do that again when we run them this year. And then we have planned for a workshop in October to review that and really, I think at that point, we'll, with some more confidence, be able to kind of pinpoint where we think that potential drop.

So in the last two years, what parallel, what'd you come up with as far as the difference?

I don't know if I know off the top of my head. Yeah, I think we can put that information together. I don't remember off the top of my head.

That's fine. If you could email that to us, I'd appreciate it. Sure. All right, thank you.

Any additional questions? Councilman Koza, you good? Okay. Councilmember Echols.

Thank you, Mayor. Thank you, staff. On the debt service and debt pay down versus the unfunded bond elections, monies that we're spending, 27, 28, Were we on the progressive chart of cutting debt down, or are we staying flat with debt service versus new debt?

So can we go forward a couple of slides? There's a chart right there. So, you know, based on the 2023 bond package and a couple of the projects that are in the works, we're still, you know, adding debt. One of the things we didn't quite have ready yet is what that looks like on our tax rate. We're still running those numbers, and we'll have those back in front of you when we get into the budget itself. But yes, with the program we have right now and the existing voter-approved bond programs, it, you know, It is still pushing upward pressure on our debt service rate. The piece, you know, that we can't always predict is, as assessed value increases, that pushes that number down. So, we'll have a lot better picture of that when we get deeper into our budget workshops.

Okay, thank you.

Councilmember Patel?

Thank you, Mayor. Trent, just some feedback. I know when Tony was here, we talked about these projects are listed on our website, correct?

Yes.

So I thought we had discussed you guys hyperlinking some of this. So whether it be council or anybody else could click on this and kind of go read about the status of this. So I think that would be helpful for us. I don't know if you guys would possibly be able to do that, but I would strongly urge you guys to be able to do that.

Sure, so I don't know that we do it in the PowerPoint presentation, but I think when we do publish out the budget itself, it can go to the individual project pages, correct?

Yes, but then those project pages do not link to the transparency pages for projects that are currently in progress, but we could arrange for that.

Yeah, I think it would just kind of help. And then I guess going back, what I was trying to ask one of my council members You have these projects listed, for example, on page 16. And we know where the sources are, overall sources. But do we know, if I want to know whether this specific project was going to be a bond or a CO, is there a way you guys break it down by project? And if so, where is it on our slide? Am I missing it?

It is not broken down by project on the slides when we publish the CIP with the proposed budget. It will be broken down by project there.

Yeah, and I guess the reason I'm asking, let's assume we don't know what our tax rate is going to be, but if we wanted to say we want to cut some of these fundings, or we say, hey, if it's a bond-approved project, we want to fund it. If it's a CEO project, we want to kind of hold back on it. Which of these projects would be impacted by it? How would I be able to tell?

The existing individual project pages show the funding sources, correct?

But it's not on this deck, right?

Not in this deck.

So how can we include that going forward, that all these projects actually have an individual funding source, not in a lump sum? Does that make sense? Okay. So let me real quickly... On page 17, the last three, it says drainage improvement programs. Again, I was just a little bit confused. We haven't identified anything in 29, 30, or 31 capital costs. These are just placeholders, I'm assuming?

These are placeholders. We're working on our master drainage, or between now and then, we'll have worked on our master drainage plan update to help identify what priority projects may or may not be part of a future bond package.

Okay, so this could be another 100 million plus bond package that we go to the voters for. Okay, on page, let's see, 20. Let's talk about this. This is a heartburn for me personally. The public safety training complex. So we're putting a placement holder of 63 million. I know we're going to talk about some stuff, but the land acquisition was more than what we anticipated, and that's just starting today. You guys are putting a placement holder of almost $55 million for future. So I guess the question I have, and I've asked this question multiple times, and I guess I'm getting nowhere with that question, so I'm going to put it out in public. $55 million is the cost today. We don't know what it looks like. We don't know what the operating cost will be of this. And what I know, I've asked this question as well, are we funding the training for other agencies at our taxpayers' dollars, right? And that's been the burn for me, is to say, I certainly want our first responders to have the highest quality training and equipment, but at the same time, our taxpayers should not, should not, be funding other agencies that come to train. And this is where you guys are going to have to kind of sharpen your pencil and explain to me where there's $55 million in fiscal year 29, fiscal year 30. And what do you envision that you guys are placing this kind of money? And are you sure that's going to be enough? And as we get closer, this number doesn't rise.

So these numbers are based on the preliminary work we did. I'm sure as we approach this, if we move ahead with a similar scope project, we'll have to update those costs, revisit exactly what the scope is, the timing, the phasing, and all those different things. So this is just a placeholder based on the work we've done to date. The exact project and the timing of that, I think we've got, you know, that's what we'll have to sort out as we move towards a potential future GO bond or a bond election to determine exactly how do we want to phase this, do we want to do it, and all those sort of things.

So I guess this, in fiscal 27, that money is really for the acquisition of the land, correct?

Right.

So the 10 million and 29, can you tell me what that is about?

That would be starting the design work and preliminary work on whatever we would end up building. Again, I know I'm not answering your question very directly, but again, I think we've got a lot of options in the future and figuring out exactly how we approach it and what we build and how we phase it. We've got a lot of work to do.

Okay. And on slide 21, it says unfunded future geobond, which I'm assuming this $55 million is for that specific project. It's very important. I know I may not be here by the time you guys get around to it. It's important that the council remembers that this is supposed to go to the public. Am I correct?

Yes, anything designated as future GO bond packages would be, at this point, intended to go to the voters, yes.

All right, thank you, sir. On slide 23, there is a $12 million land park acquisition. Which one is that?

So that's the one that we added through tears to what the most recent amendment to the tears plan. So it's some of that land that is adjacent to and around the library are existing Park of the nature Park along clear Creek okay. And it's funded by believe we've got the etc basically pre financing it may be be reimbursed through the tears.

The career Creek I guess segment five segment four So remind me how long is that trail I

The entirety of the trail?

I guess segment four and segment five.

Oh, so segment four is basically from where Hughes Road or where the Berry Rose wastewater treatment plant is to the U of H Clear Lake Pearland campus, so that's maybe a mile and a half or two miles. That project is, we got federal and state funding for that, so we're paying for about 20% of that project. And then the Clear Creek Trail Segment 5 is from our current trailhead and pedestrian bridge off of Pearland Parkway all the way to Dixie Farm Road. And that project is a partnership project with Precinct 5. I'm sorry, Precinct 2, Harris County Precinct 2, where we're splitting the cost basically 50-50.

So this $10 million that you have here, that's just the cost, but that's not the true funding?

So that would be the full cost on the segment four, Rachel, and then basically 80%. The way the advanced funding agreements typically work, like this one does, is that we have to front the dollars and then as we spend the dollars we are able to request reimbursement so on those we typically show the entirety of the cost and then the funding sources would show the 20% matches our cost and the 80% is outside or other funding sources through HGAC or

Yeah, and I guess, Trent, I'm trying to give you feedback, because I guess it's hard, even, I've been here three years, and I can't remember all these projects. Unfortunately, I have a day job. But I guess the problem I'm having is, if we are telling a constituency to go look at it, they're going to say, we're paying for a two-mile trail $10 million. Well, that's not really true. I mean, we are paying $10 million, but we're not. we're getting some grant funding. How do we put some kind of notations or notes that actually explains that somehow a little bit better?

So it is in the full CIP, and of course, this is just a representation of what's in the full CIP for presentation purposes. So it is notated in there where the additional funding sources are coming from and what share of it is ours.

So I guess the hyperlinks would help, right, if we were able to go back and click on it. And I guess now that you open that, the other question is, if it's two miles, we're paying $10 million, what are we doing? That's a hell of a trail.

So I don't know exactly the details of it. Maybe somebody can help me out on the scope. But there's pedestrian bridges over Clear Creek. I believe one of them potentially ties in over to a Precinct 2 park. And then we've got to cross underneath Pearland Parkway.

Okay. And again, it's just hard for me to digest without seeing those details. Okay. And then on 24, the 2023 geo bond for 14 million that we're going to sell, is that the second half of the parks bond or is that the first? That's Independence Park. Okay. Okay. That's not for the max road portion.

The sports complex? Yeah. No, that's shown at the bottom there in 27 in the EDC funding source because we're not doing that with GO bonds.

Okay. Thank you, sir. That's it. Thank you, Mayor.

Councilman Fernandez.

Thank you, Mayor. Um, Trent, this may be a Chad question or a chief question. But just clarifying on the public safety training complex on page 20. Currently, we have a police academy. And yes, we do have other cities come. Can someone share with everyone, there are fees that are associated, or we charge the department a certain amount for each cadet to use our facility. Is that correct?

Yes, that's correct.

Okay. So we do have some revenue. Do we know how much, you off top of your head, do you know how much we charge for a cadet?

I think the next round is $3,500. I think it was $3,000 for the current academy. We base that on what the competitive analysis is of other academies. Okay.

And how often do you all look at that as we're moving forward? I guess, you know, kind of piggybacking off of Member Patel's concerns, when we start to think of even if we were to break it up into phases for this complex, other facilities, other cities that perhaps have a shooting range or a driving track, they charge. So instead of our monies going to them, we may have the opportunity to charge departments that choose to use

facility if we were to get to that point so there could be a revenue source no one has a crystal ball but just comments we there is a revenue source that could be looked at when that time comes yes that's correct we would anticipate that if that facility was built that there would be charging to other agencies for things like use of a shooting range sim house driving track that sort of facility

How often are we looking at our rates? Is that a yearly thing? Is that a couple-year thing? How often are we looking at that just to make sure that we are capturing a fair amount each year as the cadets are deciding to come or the departments are choosing to use us to train their cadets?

So I can't speak to a specific timeline, but I'll tell you the rate for the previous rate had been that way since we started the academy, and we've been talking about increasing it. And I know there was a recent study done within the last several months as far as different academy rates. So I don't have an exact timeline, but I can tell you it's something that we continue to discuss as far as what other academies and organizations are charging for training and things like that in the area.

Okay, thank you. And the reason I'm asking, kind of piggybacking off of, because, you know, Member Patel does bring up good points as far as how are we going to pay for this. Is this something, you know, and he's, you know, correct. Obviously, we don't want to sit there and provide training in that charge to other departments. You know, we don't want our taxpayers to have that burden. But I think it's important for us as we're looking ahead to see what type of revenue we can get and how much we've already collected over the past X amount of years since this program, since that building was built, since the academy started. So thank you.

Councilman Barr. Thank you, Mr. Mayor. I'll try to be quick. Most of the things I wrote down have already been asked. I did want to ask about, I didn't hear anything on here about the road drainage and water and sewer in Shadycrest. I know we're well underway on that. I was just seeing an update on where we're at with that. We just had a workshop a few months ago with the neighborhood just

Yes, we opened bids last week, and we're just evaluating the bids right now. So we should be bringing that contract for construction, I would say, in the next month or so for your authorization.

Okay, great. And when you were going through the facilities project, you mentioned one that had a pretty dramatic decrease in projected cost. Can you talk about that one again? I couldn't quite follow you.

The public safety building, the roof replacement, originally we had thought that we were going to have to replace the whole roof, but the facilities division did an assessment of the whole roof, so the roof is not as in bad condition, actually is in good condition, so rehabilitation would still be necessary and some additional repairs, and that's the reason why the budget got reduced significantly.

Well, great job on that. That's the kind of thing that will help us as we might to keep our tax rate down. So thank you for that.

Yeah, the facilities division did a great job.

Yeah, where are you guys? Y'all are floating around in here somewhere. Over there. Well, thank you. I appreciate that. Thank you for looking into that. As far as feedback on your slide number 30, your two questions that you asked, as I know that we're getting more and more pressure from the state on what we can and can't do with our tax rate and things are just getting tighter and tighter and tighter. I would say as far as the 23 bond package goes, let's meet our obligation to the citizens as long as we possibly can. We said five years, let's keep pushing for five years unless something comes up that says we just can't, then we can address the community and let them know why. Timing of future bond elections, in my opinion, I think we need to wait until we see exactly how the TERS is going to impact us. So I'm perfectly fine with pushing anything that might have been thought about in 28. Let's push it out to 29, 30. Give us an opportunity to get some of our debt paid off and have a much more flexible environment on that. I said I'd be quick, and that was quick. So that's it.

Appreciate you, Council Member. I know we still haven't talked about the enterprise fund yet, so I just want to... Council Member Patel, yes, sir.

Thank you, Mayor. Just a follow-up question to Trent Chadd or Chief Dunham. How long has it been since we've launched the academy? And I believe, if my memory serves me right, the first... A couple training courses, it was just parallel before we started to introduce other agencies. So can I have an overall how long have we had it launched and when did we, how long ago since we started accepting other departments?

Well, definitely time flies, so I don't remember exactly, but we're somewhere around year five, maybe year six. The first two academies were Pearland only. I think it was Academy three that we started to let some additional agency personnel from other agencies. this particular class and actually the last class we actually have more personnel from outside agencies than we do our own so the revenue that kind of comes in on that is kind of an offset i mean we have to have the same number of instructors there whether we've got 20 people in the class or just our five so we are at least getting a little bit of return on that okay thank you

That was Council Member Fernandez. Council Member Patel.

Thank you, Mayor. Real quick, Trent, on slide 28, it shows, is it 28 for you? 28 and 29, or 27, sorry. 27 shows $206 million of capital projects. And then I guess on slide 28, it shows 171. I guess there's a short of $35 million Where is this funding coming from? How come you guys don't have this allocated? If you guys have $206 million of projects showing, the funding's only 171, so.

Yes, sir, that 35 million is in historical.

Historical.

On the capital cost chart.

So the historical cost before the FY27 shows the previous cost on all these projects up to date, up through FY26. I got you.

So those are bonds not sold?

They're already allocated. So then 27 through 31, what you're seeing on slide 28, is what we have not funded yet. Okay, all right, thank you. That's what's not funded yet. We haven't sold yet. What the other one shows is what we've sold previously plus what's planned.

Okay, thank you. Yes, sir.

All right, so I'll just do things. Thank you for the presentation and the information. I think what you've probably observed is there's probably some opportunities that we can add some additional information to the slides. For just clarity's sake, I think the information is there. It's just a matter of accessing that. For example, on slide number four, I believe it had the projects. If there's some way here, I heard it verbalized, if it could just be maybe a color or some kind of denotation, hey, these are in design, these are not funded, or whatever the case is, just as a visual or something on the page to communicate to council as we're working through to not, or just to perhaps guide some of the questions as to some of these projects. And just also to my colleagues here, I just, I want to put this out. These projects all cost, and they come at some particular cost to taxpayers and all of us. And I would just hesitate to matching a dollar for dollar for public safety. I mean, it will depend, I think, heavily on our residents and the quality of life I think we all are asking for. And at that particular time, I think residents will have to come to a decision as to how we move forward with these projects. And so while I do understand that there's some training and some revenue that can be taken from this facility, I would just hesitate to say that we should be able to look for 68 million and revenue from training or other avenues because, you know, public safety is, can't just be measured on a dollar for dollar. And I think these projects, as we move into strategic priorities, we can set some milestones all to help us understand how we're going to prioritize these projects. One last question, Mr. Epperson, and I promise we'll move on to enterprise. is when we talk about the TERS, if you could, at that particular point in time, help us to understand what the triggers will be with revenue or debt services as to how we move forward in either calling for a bond or scheduling future projects. I think you mentioned that's going to be a point of of interest for us based on how we're going to decide what our tax rate, as Council Member Koza mentioned, will be. And I know we can't quantify that now, but if we can at least put some emphasis on what the triggers will be to help us make some decisions as far as projects or reductions or increases based on that information. So just a point there.

I think that That will be part of the workshop we do in October. Yes.

Perfect. If there are no other questions, please, Mr. Epperson, please do move us on to the Enterprise Fund portion.

All right, so I did hear that as far as timing of future bond elections, we've got some leeway there to manage our tax rate. We do want to keep the 23 bond packages moving forward with the commitment of getting them started. There may be some things on the tail end with completing construction we can work on that'll help us out there without slowing any of the projects down, but we'll keep that rolling. So moving on to the enterprise.

Sorry, can I just ask a question to Lawrence? Lawrence, if these bonds we're talking about, capital projects, how does that work for TERS that because of Shadow Creek Ranch, we're talking about when to sell the bonds. Do they get to vote on the bonds technically if we sell it before?

We wouldn't sell any bonds before the voters vote on it.

No, but I guess if they're not paying for the bonds, if the TERS is not, if the TERS is still there in place and we sell city bonds, do they actually vote on the bonds?

The people that live within the TERS? Yeah. Yes, they always have. Anyone within our city limits votes on our bond elections.

So they're, and I'm just trying to understand this, because they're not really helping us pay for those bonds, but they get to vote on the bonds. Right? Right. Your head's spinning, I can see that.

Yeah, that's a very complicated question. So.

How are people who don't pay for the bonds get to vote on the bonds?

Because they live within the city.

But their tax dollars aren't going towards their tax dollars.

Their incremental tax dollars go into the TERS and then about two-thirds of that is remitted back to the city in an administrative fee.

But not for the bond payment?

That's true, but if you look at two-thirds of it going towards the operating fund, whereas it almost has been, until very recent history, almost the flipped opposite on the remainder of our taxpayers, where two-thirds of theirs is going to the debt service and only a third of theirs is going to the operating fund. You know, we've gotten that back closer to 50-50, 60-40 is what we're kind of targeting. So we're matching closely with what the TERS does when the TERS ends. So, I mean, it's a little more nuanced than just saying they don't, I think.

Yeah, because I guess, but on the front end, it was heavily subsidized by people outside the TURS. It's only recently become where Member Patel is talking about, and what you all just talked about, where it's more 50-50, 60-40, whatever it might be, correct?

So hold on one second, because we want to make sure we get this. So could you reframe your question, Council Member Patel?

Sure, so I guess it's just a legal question, Lawrence, and maybe you can explain it later. If the bonds are being sold for the city, but a group that's within the city doesn't pay towards those bonds, how are they allowed to vote for those bonds? Does that make sense? If the TERS city tax is not going towards the bond, because they're paying their TERS, how are they getting to vote on a bond package?

I apologize, I'm not sure I understand the question.

It seems that the people inside the TERS, as city, as property tax, as property taxpayers, also get to vote on the bonds that the city's selling. So everybody in the city gets to vote on bonds that are municipal bonds, including people who are in the TERS.

But none of the TERS dollars right now would help pay for those bonds.

So I think technically there is some that does go to that, because the incremental value is what goes into the TERS. So whatever the base number was, and I know that's very low, There is a small amount.

Like a million, two million, three million, whatever it was back in 1995.

Right, and then at the same time, the money going into the TURS, right, for the last several years is all going to pay for city projects that if it had not been for the TURS would have had to have been bond projects like the library, like Fire Station 8, like the second phase of the Shadow Creek Ranch Sports Complex, and all the intersection and road improvements that are going on out there right now. have been paid for by the TERS without having to impact the city's debt service rate.

And that's a valid point, but all those projects you listed were within the TERS. Right. Right? So they're paying for their own project. And again, it's just... We'll go offline. That's fine.

I think that would be wise. Thank you, Councilman Patel. Appreciate the questioning. Mr. Everson, would you please move to the Enterprise Fund?

Absolutely. So, if we can jump to the next slide. So, similarly, the Enterprise Fund and the associated water and sewer rates that we can impact based on this five-year CIP that we're looking at are for FY28 and beyond. So, in that light, we've scrutinized the Enterprise Fund CIP for projects that are not tied to regulatory commitments or other ongoing projects to try to help work through and mitigate those peak rate increases that we've seen in our rate projections the last several years. So, with that, we're going to work through this again. a lot much like the general fund side of things and we have to We have some work to do yet to bring a debt service tax rate to you We're going to cover some of the the history on the water and sewer rates and projections But we haven't got to the point where we can actually propose a rate at this point so we'll be bringing that back and The second meeting in July will be our enterprise fund detailed operating budget and take a look at the rates. So this is just the CIP portion of that, which has an input to that, but really all we can impact at this point is FY28 rates with the CIP. The 27 is locked in based on the current projects we have ongoing and the debt we've sold to date. So with that, I'll hand it over to Fabiola to continue. Thank you.

Thank you, Mr. Epperson. Here is the list of the projects to be covered by the Enterprise Fund. There are 27 wastewater projects we are recommending funding for fiscal year 27 to 31. There are a lot of aging infrastructures that we are planning on rehabilitating within the next five years, a total of 19 leave station rehab projects. The city currently owns and operates 72 lift stations. There are three lift stations currently in construction. We decommissioned one lift station this year, and we'll start construction on three other lift stations in the next month. And here's the rest of the wastewater projects. On the water side, there are 26 projects in the five-year CIP. Some of these projects are approaching design completion and will enter into construction in the next fiscal year. These projects represent cities' efforts to replace aging infrastructure, transit water lines, address water production rehab needs, and capacity to meet cities' demands and level of services. And here's a list of the rest of the list for the water projects in the CIP. I will now pass the presentation back to Ms. Wheatley.

Thank you, Fabiola. The Utility Rates Fund's operating costs pays for Enterprise Systems' annual debt service, meets the bond coverage requirement of 1.15 of the annual debt payment, and generates enough revenue to maintain a cash reserve requirement of 15 percent of the current year's appropriation for total operating expenses in the Enterprise Operating Fund. So, what's driving Pearland's water and sewer rates? The model currently assumes that the debt service will increase from $44 million in FY26 to $47 in FY27. In recent years, the city has undertaken almost $525 million in projects to meet regulatory requirements, growth, and aging assets. Some of those projects are listed and include the surface water treatment plant and Barry Rose and Longwood projects. Throughout the history of rate increases for the city, there are several years in the early 2000s with no increases, followed by varying percentage increases in recent years. As stated, as we have started and completed several large projects, we see increases in our water and wastewater rates to support those projects. This chart details the FY26 adopted multi-year rate forecast with our current rate increase of 5.5%. This forecast is being updated and will be presented to council for approval within the coming months during the budget workshops. The future water sewer COs are shown for FY27 through 31, for an estimated total of 331 million for the planning period. This slide shows the last of the Barry Rose and Longwood projects and includes Orange Street's service center phase two. This slide depicts the funding process for the water and sewer funding. We have our current FY27 funding estimates, and any changes in the FY27 debt issuance directly affects the FY28 water and sewer rate. Debt issued in FY27 for CIP projects will begin repayment in FY28. And now we will review the estimated CIP capital costs and funding for enterprise projects for FY27 through 31. Shown on this slide, we see the wastewater and water capital costs by fiscal year. Barry Rose and Longwood are driving the difference between capital costs and funding sources. Funding for these projects is being sold as construction occurs in order to have the lowest rate impact. The funding sources for FY27 through 31 wastewater and water projects is shown here, in total $316 million, with PEDC funding $27 million. The wastewater projects are listed on this slide. In FY27, we have FM 518 wastewater utility relocations, Barry Rose Gravity Sewer, and Sanitary Sewer Longwood Service Area projects. In FY28, there are several green tea lift station rehabilitation projects shown. And these are the wastewater projects capital costs continued with several projects throughout the planning period, including the FM 518 utility relocations, which is PEDC funded. And here are the last of the water projects capital costs with FY 30 and 31 having lift stations and sanitary sewer rehabilitations programs shown. This slide shows the FY 27 through 31 estimated wastewater funding. The variance between the funding sources and capital costs are due to Barry Rose and Longwood service area projects. In FY27, we have Barry Rose water reclamation, facility replacement and expansion, Barry Rose gravity sewer, plumb from Galveston to Barry Rose, and sanitary sewer rehabilitation. In FY28, we have Green T2 lift station rehab, JHEC Odor Control System and belt press and critical lift station electrical hardening improvements. In FY29, we have the Wastewater Treatment Plants Assessment Management Plan, and in FY30, the Sanitary Sewer Rehabilitation Program. And this slide depicts the funding sources associated with the previous slide. Barry Rose is shown in FY27, and PDC is shown as the other funding sources for the 518 wastewater utility relocations. Water projects shown for FY27 through 31 include FM 518 utility relocations, Wood Creek Transite water replacement and water plant chemical containment structures in FY27. And in FY28, we have the Alice Street and surface water treatment plant redundancy improvement projects. Water projects are continued with several projects over the planning period, including the garden well, new ground storage tank, and country place transite water line replacement. Also, we have the water plant facility rehab. And the water projects capital costs that wrap up with the transite water line replacement program and water quality programs for lakes of Edgewater and West Oaks join in future years. For wastewater, the water quality sample station installation is funded by Water Sewer Cash. All other projects are funded by Water Sewer COs and PEDC. PEDC will fund the 518 utility relocation. This slide shows the funding sources by fiscal year as described on the previous slide. Again, other funding sources is PEDC. And with that, I'll pass it back to Mr. Epperson. questions and comments from Council.

I'll pass back to you, Mayor and Council.

Questions or comments?

Council Member Cade? The lift stations, the difference in cost, is it just size or? Size of the lift station, one is four million, 500. The other seven are less than two million.

Yeah, you're gonna see some of the lift stations are regional lift stations and some of them are more just neighborhood, smaller lift stations.

Okay, just making sure.

Any other questions? Council Member Koza?

Thank you, Mayor. On slide 32, WW 2502, 2504, and 2503, I've had constituents ask as far as where we're at in the process on that, what kind of completion we're looking at. Could you shed some light on that, please?

So the lift stations with the green T subdivision, we are doing, we'll be bringing you a contract for professional services agreement to do a feasibility study to see which lift stations, if there's a possibility of decommissioning of any of those lift stations and consolidating those. On the, I think you also mentioned WW2503. That has been combined with 20, WW-2604. And we also are bringing you a professional services agreement for it to start the design phase very soon, the next month or so. Did I miss any other lift stations?

No, it was two, four, and three. So you're putting three and four together, and that's fixing to be in design within a month as far as approval.

So maybe to clarify, you were asking about the green T1, green T3, and green T4?

Correct, the green T, because I know.

Yeah, so those, I think she said that they're looking to bring a contract forward that does an assessment of those, see if there's any opportunity to actually decommission and put those, one or any of those on gravity line and actually get rid of a lift station?

Correct.

Yes, so the feasibility is fixing to happen, is that what understood? Yes, sir. Okay, and then design would be within a month, is that?

Oh, I think the feasibility would probably take longer than that before we.

Okay, so then design would be.

How long is the feasibility study expected to take?

So I would typically say for something like that, I think for green tea, we're looking at four potential lift stations. Feasibility may take you somewhere around four to six months. And then you'd have design efforts based on what the recommendations are from the feasibility study.

So on the design aspect, 6 to 12, if it's 4 to 6 on the feasibility?

Well, it just depends. So if you're looking at design for multiple lift stations, then we would potentially extend that farther out to somewhere. Typically, design is going to take you anywhere from 10 to 12 months. If we're talking about 3 to 4 lift stations, you could be somewhere around 12 to 18 months.

OK, because I know every time we have a storm, it seems that the vacuum trucks are out there opening those lift stations. We've got severe problems out there with that. Because I know back during Borough, we came real close to not being able to have facilities. So anything to help that get along would be appreciated. Then slide 38.

Excuse me, slide 39 first.

So we have this year, y'all are forecasting a 16.7 rate increase. Is that correct, what I'm looking at here?

So this is what we had in last year's forecast. So when we presented the FY26 budget and determined and decided we would go with a 5.5% rate increase for fiscal year 26, then the subsequent years were forecasted at that time. This is where we're starting from. We're working through the process to bring that to the second meeting in July. It'll be lower than 16.7. We're just working on how much further lower.

Yeah, no, I understand.

And then, of course, it's just like last year. When you pull the rate down as far as you can, instead of spreading it out, it has a compounding effect in the future. So when we pulled that... Down to 5.5 last year. That's 16 blew up. So, you know, if we pull 16 way down, you'll probably see 28 and 29 pop up.

Yeah, I mean, it also has to do with how much water we sell can move it up or down.

Yeah, and I'm having trouble selling water this last couple of weeks.

Well, we've had a lot of rain. I understand that. but i mean i i just wanted to ask that question i knew that was a forecast that wasn't anything set in stone and we get something a little better um as far as those rate increases on 30 uh on 38 um it it kind of shows indicative of 10 through 14 we had no increases whatsoever um then all of a sudden a five percent and then boom it pops up i'm sure that's a function of four years, five years of not having a rate increase, followed by if there was any debt sold plus water sales for that, pops it up 16-16. Then we come back 19, 20, and 21, those three years, even though there's a 2% increase. up jumps in 23 and 24, 13 and 14%. Here again, we're having debt sales for our water surface plant. I'm sure impacted those, as well as our Berry Rose and Longwood stations that would impact on the slide that was here before at the 16.7, having impacts there. So as far as water rates and increases, we're not up here just arbitrarily saying, hey, we need to make more money. There are reasons why our water rates fluctuate like that. We have to pay our obligations, we have to do things, or we sit here and turn into cities that don't take care of their infrastructure and let it decay, such as Jackson, Mississippi, that's a similar size city that has let their water system just decay. And then all of a sudden you have a billion plus dollar rework that you have to do. So as far as our water rates, water systems, hopefully in our budget discussions we can have some conversations of what our water system is, how our water system, where our water comes from, you know, how we rate amongst other cities in our area. If you go pull the base rates for Pearland, Alvin and Manville, you'd see a different picture of what the base rates are for what costs are. So I'd kinda like to see some of that comparison as well, so that we can get an in-depth, because I think that one thing our citizens don't know, once we get finished with this Barry Rose and Longwood, our water system we'll be in really good shape. And as far as that goes, I think the impacts from debt for what we're doing will also be a lot less moving forward once we get past this hurdle as well. Is that a fair statement?

Yes, sir. And the things you talked about, we do have plans on making sure we cover all those items when we do our deep dive into the operating fund and the rate model for the enterprise fund budget. The second meeting in July, we will have all those comparisons and all that additional information. Yes, sir.

All right, thank you, because like I said, I think explaining why that is and, you know, that it's not just us sitting up here arbitrarily trying to do this.

Absolutely.

Yes, sir.

Council Member Patel. Thank you, Mayor. I appreciate that. Trent, two questions. One is, I would ask if there's ways to have the EDC sell some bonds and pay for some of this infrastructure. If it can be justified, I would certainly encourage that to keep our water rates lower or through CPI from infrastructure projects. I think there is a opportunity and I think end of the day, those are taxpayers' dollars. Two, I would also tell you to be mindful that interest rates are probably going to go up, as much as we like to hate hearing that, the inflation is being high. I think we've got to find better ways to, if we can, find other sources of funding. Because I think when you go to sell these bonds or COs, I think the interest rate costs are going to come in a lot more higher than we anticipated. Just make sure you play that in your model when you do these costs and the rates. And so I think don't be conservative on that. Thank you.

We do have built into here already over $20 million with EDC funds for the water sewer projects. And then, yeah, we've got pretty conservative estimates on interest rates when we look at future bond sales. And I think the good part there is that since we're on the tail end of the Barry Rose project, our large, very large debt sales should conclude over the next year or so. And then we get into some years where we hope to not need to sell near as much.

Any other questions? Okay, I do have just a comment. I know, Mr. Epstein, we talked about water rates. I know that's not on the discussion tonight, and that will be a robust discussion, the second meeting in July. These slides, most of the slides, comprise of debt and costs and assets. And you and I have also spoken about there's multi pieces that go into the rate. Revenue is one of them. And I would like, if possible, to see an expansion of revenue sources consumers, perhaps rate fluctuations so that we can have a well-rounded discussion on how we land on whatever the final rate will be that we charge to our residents for the water that they are gonna consume and utilize. The other thing is, you mentioned 2027 rates being locked in, I believe, and I just heard that as one, if you could reemphasize that. And then also, real quick, in the discussion for the modeling there's been conversations about locking the rate in in spite of some of the necessary payments to the debt how that will impact us as a city and residents so that if that could be included as well in the next packet of information but back to the other question about the 2027 lock-in

Sure, can we go to that slide that shows kind of a lever that we can pull? So, what I meant is when it comes to the CIP, the debt that we just sold, last couple meetings, That is based on the projects that were authorized for FY27, expenditures to date, progress on those projects, and then results in that debt sale. So that sale's happened. Those debt payments, as you can see on here, begin in, well, so the one we just did, those debt payments begin in 27. So that basically locks in what our debt payments are for fiscal year 27. So when we look at the CIP today, where we can have an impact is how many projects we start and how much debt we sell in 27 next year. So that would actually impact the debt payments in 28. So it's just... Kind of say on the debt side of the equation for both the enterprise fund as well as the general fund, those numbers are kind of locked in as far as the actual payments. So then your other question, I'm not sure I understood.

The other question was that when we approach this conversation, second week in July, if we can have some more information as far as revenue sources, not just pricing increase to residents, but maybe we talked about, and I guess it was offline, but the opportunity for Pearland to transition as a vehicle to sell water to compensate for the cost that we're having and how we would accommodate that going forward in the next 10 to 15 years.

That may be a more in-depth discussion than we have time for when we talk about the budget, but we can definitely have that in the future as well. And part of that we can potentially center around. We do have an upcoming item that we'll bring to you guys that consolidates and renews our contracts with the Gulf Coast Water Authority, which is one of our major sources of water. So in that it does, there's some language in that that does allow us to do some of those sort of things in the future. And there may be an opportunity sooner rather than later, but a lot of those things are gonna really require those in and around us to have the need and the wherewithal to move forward with that. So I think when we get into talking about the budget for next year and even within a three to five year forecast, that kind of revenue source is probably not gonna be there in any kind of substantial way. But longer term, yes.

I just think it should be at least some aspect within the conversation because the plans we're talking about extend beyond the three five-year marks.

Those conversations have been in the works for probably upwards of a decade now.

I just think it's relevant, that's all. Thank you. Any other comments or anything? With that, I'd like to adjourn this meeting at 5.28 p.m.