City Council - Packet - briefing

Good morning. First of all, let me apologize for being late and delaying the meeting. Thank you all for being here. I'll call the 737 packet briefing to order. And please call the roll.

Mayor Morgan, Mayor Pro Tem Montgomery.

Here.

Council Member Lee.

Here.

Council Member Flores. Here. Council Member Fleming. Council Member Ortega? Here. Council Member Stephens? Here.

Looks like we have one card for citizens communication. Do we have? Mr. Snyder? Please come down, sir. Good morning.

Hey, how's it going? I know y'all can't answer questions, but I talk a lot, and I was just curious if y'all could give me any advice. If that's not allowed, I got something kind of vaguely planned, but like, you know, Councilmember Lai, if you have any advice on life, food to eat, bars to go to, something. No? No? OK. Nobody? All right. Well, excuse me. I guess I don't know how much time I have left. Well, 2.25 on the clock. But I don't know how much time we all have left in life. So I just wanted to use this time to thank people that I love and do it publicly because I haven't done it before. And so one of them, I want to start with women. And I guess sometimes men can have a problem with women, their mom, their wife, sisters. But I wanted to thank the first female hero that I know is my mother, just an amazing woman. And I'm sure y'all can cook really well. Y'all can't cook like my mama. She's the best cookies, best spaghetti, just awesome. And even when she makes mistakes, it's out of love. Some things don't go right, but it's because I love you so much that I made this mistake. And then secondly, I guess my big sister, I won't say her name because I think she hates me, but I actually asked her to come speak At one of these meetings, like the August 27, 6 PM meeting, I asked her, hey, could you come back up your brother? I need help. And you wouldn't believe the excuse that she made. It's something about going to watch Jeopardy in Bakersfield, California. We can all check whether she's a liar or not, because she's going to see her friend Evelyn. And also, Evelyn once saved me. I was stopped by the cops in West University Houston for green lights or something. I don't know. And I call all my friends, and I say, hey, the cops said that you can come get me if, like, you know, whatever. No one answers. I call Evelyn. She's a math major. She's actually at, she's going to be on Jeopardy. the August 27th showing. And so she came and got my car, parked it. Cops said goodbye. And that was that story. I guess also women basketball players. I don't really like the WNBA, but I love women's basketball. It's so amazing. I've seen some incredible players. I'd even just shout out to TSU, TSU women's basketball. I was actually on the practice team. I scored six points. And it doesn't sound like much, but all of them stopped the game. Coaches started yelling. Players gave me high fives.

Thank you. So for Thursday, it looks like we have a staff presentation from Human Resources. And Do we have any items that need to be considered from the consent agenda? OK, moving on. G1, the resolutions. Consider a resolution authorizing the execution of an engagement letter with Herrera Law and Associates PLLC, for the appeal to the district court of the PUCT final order and PUCT docket number 48836.

This is in regards to the mud rate case.

This is an engagement letter with the same law firm that's represented us throughout the course of this. This has gone through the PUC. The muds have appealed to district court. And so this engagement letter just takes us through the duration of the appeal. I'm happy to answer any questions.

Are there any questions? Thank you.

G2.

Consider a resolution authorizing the mayor to execute quantity adjustment change order number one with AP Gulf States, Inc., DBA, Adolphson, and Peterson Construction for the Public Safety Training Center Phase 2 project.

Good morning, Mayor Pro Temp and Council. We've got a change order request for Public Safety Training Center with Adolph Peterson. It is for the amount of $923,988.25. Let's talk about what's driving this. Mother Nature was not kind to construction, but good for our lakes, not for construction. So we had to regrade our EVOC track that was all ready to go. And we had poured it a little bit, but we didn't. The rain, unfortunately, caused us to have to regrade the whole entire track. So that's one of the drivers. Another one is existing tilt wall. There's some imperfections in the existing tilt wall for Public Safety Training Center. So what we're going to do is we're going to go ahead and fix those and then recoat the entire existing facility. Third is the master meter installation. So when we built that project, we metered the building, but we never metered the backside of the facility for when fire trains and uses all this water. We're not tracking it. So we worked with Michael and his crew to kind of mitigate that and be able to track the usage that they use on the backside of the facility. They're awesome and working together with us to mitigate those costs and bring them down. So what's going to happen is that we have an owner betterment inside the contract that we were using this for. So what we're going to do is we have a reserve contingency outside the contract that's going to replenish our owner betterment inside the contract. So with that, I'd be happy to answer any questions.

Thank you. Are there any questions? Yes. Council Member Stephens. Of course.

I can't open anything up, so I think we're both lost here. Yeah, I see it. Now it is. Thank you. It is in Exhibit A what the change is. Nope. Oh, yeah, up there in the justification. Sorry, we're working with the iPads that are down a little bit. Okay, that was my question is just if you had a breakdown of it, but I think this is it here in Exhibit A. Okay, no questions. Thanks. Council Member Flores.

The tilt wall correction or repair, was that our error or mistake? Or how are we paying for that?

I guess my question. So there were some imperfections. There was some aggregate that's kind of exposing and coming through during normal construction on the original project. We just feel it's not... It just makes the facility look better. So it's not our fault. It's not really the design's fault. It just happens on a tilt wall project from time to time.

All right. Thank you.

Thank you, Corey. Yes, ma'am. G3, consider a resolution approving and adopting financial policies related to the budget for FY2026 to 2027. Good morning.

This resolution adopts and approves our financial policies fiscal year. Our financial policies are adopted annually by the city council in conjunction with the annual operating budget. Thursday night I will have a brief presentation kind of walking through some of the policies. One very minor change recommended for this year on page 11 of the red line agreement attached to the agenda. We are changing the capital replacement account amount for the Sports Center Fund from $3 million down to $1 million to better align with the perceived potential liability of that facility. Again, we will keep cash in fund balance. This just will reduce the amount reserved for capital replacement to give us some flexibility in the future. The financial policies cover things like fund structure, basis of accounting, budget, community investment program, our accounting, auditing, financial reporting, internal control processes. I think on Thursday evening I'll have a brief presentation and kind of walk through some of this just as a reminder and to put forth what strong financial policies we have. Happy to answer any questions you may have.

Are there questions? Yes, Council Member Flores.

I'm glad you pointed out the red line because I looked three times for that. It's a small one. I didn't see it, so thank you. Page 11.

Additional questions? Thank you. G4. Consider a resolution authorizing the Brushy Creek Regional Utility Authority to execute a financing agreement with the Texas Water Development Board.

This is the first of two items on this Thursday night's agenda related to issuing debt for utility systems. Both of these have been included in our long-range financial planning. They're in our long-range debt plan, and they're accounted for in our utility rate models. This item itself, this is a resolution authorizing the Brushy Creek Regional Utility Authority, or BCRUA, to issue an executive finance agreement with the Texas Water Development Board. Going back to April 2023, the City Council authorized a submission of an application to the Texas Water Development Board for funding through the State Infrastructure Implementation Fund of Texas, or SWIFT funds. We have drawn down some of that funding two times in the past. This is the third. of four phases of financing. This one will be $12.2 million to, again, this is a debt instrument to issue debt to fund the city's costs for the deep water intake project as that continues towards completion. Happy to answer any questions you may have.

Thank you. Are there questions? Thank you, Kevin. G5 consider a resolution authorizing the mayor to execute a real estate contract with every ranch company LTD for the purchase of eight point zero eight five acre parcel required for construction of the proposed Kenny Ford Boulevard segment five roadway project Good morning mayor pro tem and council This is for Kenny Ford Boulevard segment five

This project will extend a six-lane roadway from Old Settlers right here, come up this direction all the way through here, and then tie in at County Road 112. Kenney Fort Segment 6 will then take it from there all the way through John Nelson's property up to University. So the item before you is acquiring additional right-of-way, that area in blue right here. We're acquiring A little over eight acres, $2.8 million from the Averys so that we can continue to. We're in design work right now. There's a few more parcels that we need to acquire as part of this Kenneyport Segment 5, but it's moving along well. This project has some funding from Campo for construction. Williamson County and the City of Round Rock. So we'll be working on that as we get through the design work moving ahead. But before today, approval of right-of-way acquisition of eight acres. Recommend approval.

Are there questions? Council Member Ortega?

Real quick. On the next phase north of County Road 112 up that way, we're already working on the easements for that at this moment.

Yes, sir. It's under design, and there's just one property owner. The Nelson family owns that entire property. So yes, we are in discussions with the Nelsons already on that as well.

All right. Thank you.

Thank you, Michael. G6. Consider a resolution approving the action of the Round Rock Transportation and Economic Development Corporation in amending the Transportation Capital Improvement Program, TCIP.

This item will be going before the Type B board on Thursday night as well. We're adding cost for right-of-way for two projects. The two projects here are Kenney Fort 5 and 6 and Wyoming Springs Extension. We just talked about Kenney Fort 5 and 6 right there. That goes from Old Settlers, as I mentioned, all the way to University. And then the second project is Wyoming Springs, which we're completing the Wyoming Springs Extension up to San Bas today. That project is nearing completion. It's already built through Barron's ranch, so this extension is really on the north side of Barron's ranch that will extend north up to 1431 so that's the piece of right-of-way that we will be we're in getting appraised now we're in discussions with the sneeds for this property and So what we need for the amendment is Kenney Fort, we already have $2 million for right-of-way for that item. We need to add $10 million. So it'll be a total of $12 million for right-of-way acquisition for those projects. And then Wyoming Springs, we have $2 million allocated and approved for that already. But because we're in the appraisal process, we need to add additional money. So that brings that to $7.5 million total. So for the amendment, we're adding $10 million and $5.5 million for a total of $15.5 million out of the Type B fund to be able to fund the right-of-way acquisition for those two projects. It'll go before the board on Thursday and then come before council following that.

Do we have any questions? Council Member Flores.

Michael, these are planned to ask. I mean, we knew that we were going to need extra funding at some point in the future to acquire this right away. So is it the thought that this 15-5 will get us where we need to be, or are there future planned asks that we are planning for?

These should cover it. When we first started, we got $2 million approved a while back. Everything's gotten more expensive. Appraisals are coming in. So this is the estimate based on what we believe we need to be able to get us to the end. Things happen, but we feel good about these numbers.

Thank you.

Other questions? Thank you, Michael. Moving on to ordinances. H1. Consider an ordinance amending chapter 44, article 6, section 44-149 and section 44-151 code of ordinances, 2018 edition, regarding environmental services fees. First reading.

As you know, the city owns a water and wastewater laboratory. It's located out near our water plant, one of very few cities in central Texas that has their own laboratory. This laboratory receives a lot of business from many of the other utilities around the region. So it's a very good lab. We have about five staff people that work in the lab. This is an amendment to the ordinance just to make some adjustment to some of the fees. When folks bring in water samples, we require head space. That's air in the bottle. If they come in without that, we can either reject it or we can transfer it to another container. So it's just a small amendment of $10 to do that because we want to have good customer service. We don't want to push them away. So that's just one minor change. On the surcharge program, That's businesses, restaurants that discharge wastewater into the system that has higher levels of biological BOD and TSS. We charge them a surcharge fee. We're amending how we charge them because it gets placed under their utility bill each month. We used to just charge them and we'd sample and charge them for six months, come back and sample six months later and charge them again. We're doing once a year sampling now. So we're amending how the ordinance is stated. So we sample once a year for those facilities, determine what the surcharge fees are, and then it'll be divided out over 12 months for the rest of the year. So just the semantics there. And then there's one analysis that we do not do anymore, so we're removing that from the fee schedule. So that's the changes to the ordinance for the environmental lab. Just a very, very great lab. Happy that we have it in the past. I'm glad the city decided to have the lab because it's really convenient for us. but it also makes money for the city. So happy to answer any questions.

Are there questions? Council Member Stephens?

Michael, just for my clarification, that surcharge is only for commercial businesses, you said? Yes, ma'am. OK. And then also, do we offer our laboratory services to other municipalities, or is it Round Rock only?

No, it's for, we, it's open to anybody that wants to bring in. So today I can tell you all the surrounding cities, Cedar Park, Georgetown, all the surrounding cities, all the surrounding utilities, Jonah Water, Brushy Creek Mud, all of those bring their samples to us and we analyze them for them.

And how do their rates compare to what we're charging?

They don't have, you're talking about laboratory rates or are you talking about?

Their fees that they.

So they don't have a laboratory. Right. Okay, so they take their samples for their water system or wastewater system and bring it to us. They may have a surcharge. But we bill them for the use of our laboratory? Yes. Okay. So they sample their water system, for example, that you're required to by the state. They do the sampling. They bring their samples all the way to us, and we analyze for them. So we're a NELAC certified laboratory with the state. But these other utilities don't have a way to analyze their samples. So they bring them to us for analysis. And then we charge them for that. And that's what runs that program.

Thanks. Council Member Flores.

Michael, just a quick follow up. So if they didn't come to us, where do they go?

Just to private laboratories? City of Austin has a laboratory. LCRA has a laboratory. and Round Rock. But there are private laboratories. DHL Analytical is one. It's in Round Rock. It's a private company as well.

And then on the second part of that, about the businesses and the testing for them. whatever you're testing for. How do you identify those businesses? Is that just based on the nature of the business that we identified or they self-identify? I'm just curious what that looks like.

So this is wastewater. So there's two different methodologies. So if you're an industrial facility in Round Rock and you create high metals and high concentrations of constituents that we do not want into the wastewater system to go treat at the wastewater plant, that's called a pretreatment program. We identify those industrial users. They need to pre-treat their waste at their facility. We sample it to make sure it's in the limits we want. And we charge them for all that extra work. We help with them. Then they discharge the waste into the wastewater system to go to the wastewater plant. The other deal is called surcharge. A lot of these are restaurants and things like that. A normal house, the BOD, biological oxygen demand, is about 250 milligrams per liter. Your TSS, total suspended solids, is about 250 milligrams per liter for a normal house. That's what we expect our treatment plant to be able to treat. That's what it's designed for. Anything above that, there is a fee we charge because we're having to treat more chemicals at the wastewater plant to treat that. So there's a surcharge fee for anything a restaurant discharges that's higher than your normal household waste. That's what I'm adjusting here is the surcharge, the way we handle that. We're just going to sample once a year for that restaurant. That takes composite samples, but we check it once a year to determine their fee for the whole 12 months. So two different wastewater programs.

Yeah. So we can figure out where the source of those

Comes from, I mean. We work with the utility building. We know all the commercial accounts in the city. We identify who we need to check on for surcharged. We identify who we need to check on for pretreatment. Thank you.

More questions? Council Member Ortega?

With your explanation and why they check everything out, why then from six months to 12 months? Because it seems like you want to catch something early rather than wait a year.

It's a composite sample. They have these sampling units that is collecting data. So it's collecting data all the time. And then we take a composite sample and come up with a number for the year. Just from a staffing and being more efficient, we feel like our experience, we haven't seen a lot of changes when we do it every six months. So we just combine it into one.

All right. Thank you.

Thank you. Michael, if we do determine, I guess, during that 12-month period, if there are changes from the previous year, we can go back to a more frequent testing process, right?

We always have that right. Once we get that sample each year, we recalculate and adjust what the surcharge fee is. But we can go at any time. If we think that there's something crazy going on or we're just not sure, we can go back and take samples whenever we need to. Yes, ma'am.

H2, consider an ordinance amending Chapter 44, Article 2, Section 44-32, 44-33, and 44-34. Code of Ordinances 2018 Edition regarding water rates, reuse water rates, and sewer rates. First reading.

All right, Mayor Pro Tem and Council, this is the discussion of our utility rates. We've talked this summer about the rate changes. Every three years, we update our rate model. And we bring that before you. We've had discussions this summer. So this morning, I'm going to summarize kind of our goals of the rate making process and kind of the rates that we are proposing and how we compare to our surrounding utilities as well. We'll go through this presentation. Our goal is we're always forward thinking outward. We don't just look at what the rates we need for today. It's a 10-year plan. We're looking out into the 10 years of what we need to be planning for, because that's planning for future capital projects, et cetera. So it's not for short-term needs. We don't like rate shock. So before you, we're going to propose a three-year rate increase so that we level it out over the three years and not just have a one-year increase. So that's what we've done over the years, and it's worked well for us. We want to balance the rate structure. There's different customer classes. You have retail versus wholesale. Retail is customers that are in the city limits of Round Rock. If you live in Round Rock, you have a business in Round Rock, that's a retail customer in Round Rock. And then wholesale, we have 12 wholesale customers. That's the municipal utility districts mostly. That's wholesale. They have a different rate structure. Residential versus commercial, we treat those differently as well. I'll kind of talk about that. Discretionary, there's lawn watering and non-discretionary is indoor use. We want to make sure the rates are set where we're capturing the revenue we need to run the business, but not be too high on the rates where you just have normal to live, cleaning, cooking. Discretionary where you're watering yard, you choose to do that. So that rate, that's where those get in those higher tiers. Impervious versus pervious, that's for stormwater. We're not adjusting the stormwater rates here. And in water, we want to make sure, because it's weather dependent so much how much revenue we bring in, we have to make sure the structure is set so that on wet years, we are bringing in enough money to run the business. In dry years, obviously, we bring in more money. We are a cost of service utility. What that means is the rates are set for what it costs to run this business. So when we're running efficient in what we do, our rates are going to be reflected in that. And our citizens are going to see lower rates. That's why we take so much pride in trying to be efficient because our customers are our citizens. And then I mentioned we update our rate model every three years. A little background. I've already talked about the 10-year outlook for both of them. The last time we did a study was in 2024. And you're probably going to say, well, that's only two years ago. And I just said we do it every three years. Because we were in a rate case with the wholesale customers, we went through the rate model, and we only had retail rate adjustments in the summer of 2024 that council adopted for FY25, FY26, FY27. In that FY24 rate study, we did not adjust the wholesale customer class because we were in the middle of litigation. So we chose not to do that. Well, in FY25 is when the case was closed with the Public Utility Commission. They ruled that our rates are just and reasonable. We're following the letter of the law. We calculate our rates based on state methodology. We realized then, let's go ahead and update our model this summer, FY26. We did it a year sooner because we wanted to make sure that we adjust the wholesale customers for their cost of service as well. So during this presentation, you will see that you all approved a rate for FY27, which starts November 1 in the rates. We're not going to honor that. We're going to show you the new rates we're proposing for FY27 with this new model. Then it also puts in their rates for wholesale customers for FY27, FY28, FY29. We want all the customer classes to pay their fair share of what it takes to deliver service to them. And we feel good about this model. When you're in a rate case, sometimes we have to make decisions that we weren't able to do that. So that's why we did not have a rate increase for wholesale at that time. Water rates. We talk about water conservation and reuse. Summertime is when we really get hammered with water demand. It's peaks. It's the peaks time. We have to have the infrastructure to be able to treat that water, have the capacity in the wastewater plant, the water plants to be able to treat that capacity during the August 15th or right now when it's hot, right? We're treating a lot of water. So we have this tiered structure, and that's why we have that. We want to try to... a conservation tool to be able to reduce that demand so that we don't have to build that extra capacity up there that you only need for a short time of the year. Commercial rates are different. They're pretty consistent because they're running a business. So that's why we have a uniform rate for commercial, not tiered rates. And that's why that's different. All right, the results of our current rate model. Just real briefly, we need $4.6 million more at the end of the FY29. So we're looking at that model we're projecting out for the next three years. How much revenue do we need to cover all of our expenses? On the water side, we need 4.6 million. And in wastewater, we need 2.3 million. And these are the percentages. So you'll see these percentages split out over the next three years. We're not going to have a 16.2% increase today. It's going to be more about 4% or 5% or 6% each year to get to these totals. What are the drivers of these increases? As you can imagine, operations and maintenance salaries The raw water that we buy from Brazos River Authority and Lower Colorado River Authority, they go up every year. So that's included in the model. Chemicals, our electrical contract is expired, so we're renewing that. All of those costs are included in there. We spend a lot of money on our existing system and rehabilitation and rehab. We try to balance new infrastructure and rehab infrastructure. Round Rock's going to be here for another 1,000 years. We need to make sure we maintain our infrastructure. And then as you see, we've had these large projects we're working on right now, $266 million in regional projects over the next five years. We've issued debt on many of those regional projects, and that's all wrapped into the rate model as well. And with this, because the rate case is over, You could argue that retail is subsidizing right now, wholesale some. So we're going to get that adjusted so that wholesale's paying their fair share, retail's paying their fair share. Let's see. Here's our recommendations. And I'll go through some charts that'll probably. Let's talk about this right here. There's no change to the five-tier structure. We have a five-tier structure. And there'll be no change to the first tier on the residential water rate for your volume. Those are the folks that aren't using a lot of water. They have a base charge, and they have a volumetric charge. We didn't want to impact those folks, because they're not the ones that are causing us to have these dead increases with new capacity. So we're not changing that. I'll talk about that in a chart. And we're leaving the commercial as a uniform rate. Wholesale, here's what we're recommending. There's different percentages for the wholesale, 9.3% to 15.1% per year for water for the wholesale customers. They have different peaking factors. They use a different amount of water. So the model calculates a different rate for each one of them for water. Wastewater, each wholesale customer is getting a 4.8% increase for the next three years. All right. I wanted to show this slide because In summer of 24, right between the middle of these two, 23 and 25, we implemented that fifth tier. Y'all remember that? And then we adjusted these guys right here. This is the volume in each tier. Wanted to show this. How did that fifth tier impact usage? So if we had that fifth tier in the summer of 23, this is what it would have looked like. So 8% of our customers would have used 27% of our residential water. In 24, we implemented that fifth tier. And this last summer, 4% used 17% of the water. What I'm going to take away from this is that less people are falling into that fifth tier. That means they're conserving. So it's working like we wanted it to work. The tiers are working. Everybody is using less water, and they're staying in a lower tier. I just thought that was interesting. When you add these tiers, how is it impacting and how are people reacting as a whole? And you've heard me say this. Our overall water uses on a daily basis is not much different today than it was 10 years back. And I think that's a reflection on conservation programs, it's reuse programs, all of those programs, landscape ordinance changes. All those factors are helping keep our total water demand pretty level, even though the city continues to grow. All right, here's the recommendation for the residential water rates. Everybody gets a base charge. This is based on a 5 1⁄8-inch water meter, which pretty much every residential house has. Today, it's $18.21. The adopted rate I mentioned earlier that we adopted last time would have taken it to here. We're going to cancel these. So the new rate would go to $19.60, a 5.9% increase for base charge. And then here's the next two years. Tier one, I talked about that. The volume rate is $2.57. It's not changing for that first tier. And then the next tiers are changing for this first year. And then year two and three, everything's going to be 5% and 5% for water. There's a lot of numbers there. You'll get to hear me Thursday night again. So if you have any questions that you can't think of this morning. What does that mean at a residential water bill for the 10,000? If you use 10,000 gallons at your house, your water bill is going to go from $43.91 to these three numbers over the next three years if you use the same exact amount of water each month. 3.2% total, five and five. What does that mean when you compare it to cities around us? Here's our current rates today. If you use $10,000 gallons at your house, you'll pay $43.91 that I just showed you. Council approves the rate changes for next year. It'll be $45.30. Here's our surrounding cities. All these guys are also looking at their rates. This chart will change over the next several months. So we're looking pretty good there. If you use 45,000 gallons a month, here's just another analogy. If you use a lot of water in a month, your bill would go from $254, which you pay today, then $285, $299, $314 over the next three years. That's in that fifth tier, that 45,000 gallons. So you pay for the amount of water in each tier, and then that 8,000 gallons there, you pay for that next rate, et cetera, as you go down. Here's the rate comparison of surrounding cities. Sugar Land, it looks like they probably don't have such a tiered setup that we do, because they weren't on the bottom on that 10,000 gallons, but then they lowered on the 45,000 gallons. OK, that's the residential water rate recommendations. Now we're going to go to commercial water rate discussion. They do not have a tiered structure, as I mentioned. They're pretty uniform, so we have a uniform rate. Many commercial customers have separate, bigger properties have a separate irrigation meter that does have tiers. So we don't want to impact their normal business, and then the watering outside will go under a separate irrigation meter. Also, it's important on wastewater, because we do wastewater winter averaging. So if you're a business with just a meter, whatever wastewater you use in those winter months That's how we calculate your wastewater bill for the rest of the year. So if you don't want that, then you would get a separate irrigation meter so that it wouldn't affect your wastewater rates, if that makes sense. Let's see. Talked about all that. OK, for commercial, here's your base charges. So right now, sorry, here's your base charges. They're going to go up 5.9%, 5% and 5%. $3.02 is the current volumetric rate for commercial property. And then 6.2% increase to $3.21, then a 5% and a 5%. So that's what your per 1,000 gallons you would pay for at a commercial property. Slots in there around that between that first and second tier on a residential. Just an example of a commercial property in Round Rock versus another surrounding city. If they use 40,000 gallons, what's their water bill? That's where they would stack up in Round Rock versus our surrounding cities. All right, wastewater. Wastewater is a little bit different. Here is where we're proposing on wastewater. Base charge is also based on your water meter size. So for a house, it's $14.91 today. So if you're not home all month, Your wastewater bill is going to be $14.91 because you're not using any water or wastewater. Well, yeah, wastewater winter averaging, but in general. Your base charge, you get billed every month. Volumetric charge for wastewater would go to $16.20, which is an 8.7% increase year one, then a five and a five for the second and third years for the base charge. And then here's your volumetric increase, 328, 339, 351. What does the bill look like? So 6,000 gallons is pretty close to what the average wastewater winter average is for a house in the city. So right now you're paying $34.17 a month for your wastewater service in your house. If you're the average, it would go to 35, 88, and 27, 37, 38 here over that three-year period. If you use more gallons, then here's your changes right here. How does that compare to other cities? Wastewater, 6,000 gallons a month. We're down here. Leander's right there. And then Round Rock's current. And then Round Rock's proposed at that point. If you combine that water and wastewater that I mentioned earlier, if you put those both together, then here's where Round Rock stacks up current and proposed. The utility bill, you get water, waste water, storm water, trash. We try to kind of show as a whole how a customer or a citizen in Round Rock's bill is going to change as a whole. So today, if all these rates were approved that we're talking about, your bill is about $109.55 for the month for all those services. Garbage and recycling are taxed, so that's where that tax is based on the garbage recycling number. Water, waste water, and storm water are not taxed. So here's kind of the increase you would see over the next three years for all those services in Round Rock. The stormwater, $6.75 per house per month. We set that as a five-year rate. So that will carry out through this three-year cycle. If approved, the only thing. And then the garbage recycling, we estimated based on CPI what that would change. And that's the only real estimate that could change a little bit over the next three years with the taxes associated with that. And then the last couple of slides are the wholesale. I mentioned them earlier. Here we have 12 total wholesale customers, 10 on the water side, 10 on the wastewater side. And the reason they're not the same, Fern Bluff is our wholesale water customer, but they're not on wastewater because they're part of the regional wastewater system. And then, let's see, Aqua Texas is Tonqua Springs over here on San Bas. They have septic systems out there, so they're just a water wholesale customer. On the other side, on the wastewater, and then Siena mud is not on the water because they're with Jonah water, but they're on the wastewater. So that's why there's not 12 and 12 for water. Wastewater is 10 and 10. As a whole, there's your percentage increases. But then per year for three years, here's kind of the water increases that we're talking about for their fixed charges. That's that 9% to 10%. And then here's their volumetric charges for the wholesale customers. We have met with all of these wholesale customers individually over the last month or so, shared these costs with them. So they're aware of what's going on. We're trying to keep good relations with our wholesale customers. We let them know in January that we were kicking off this rate study. Came back in July and showed them what the rates were, showed them our schedule that we're bringing to council. That's the water. And then the wastewater. Everybody has the same rate. So here's the rate increase we're showing for the wastewater. There's no base charge. It's just a volumetric charge for wastewater. Wholesale and retail, you're probably saying, well, how do they compare to retail? It's just different. On the wholesale, we deliver water at a meter, and then we're done. So the pipes and everything in the meters in the mud are managed by another entity, or the mud manages it. So they have to add cost on to the rates we charge them And that's what the citizens in the mud will see, because they do their own utility billing. They have to do maintenance on their infrastructure and do the meter reading and all that. So that's why it's hard to do apples to apples. But when we're efficient in this utility here, both retail and wholesale customers do benefit from that. On the horizon, the five wholesale customers, as Ms. Sundry mentioned earlier, have already filed another rate appeal to the PUC. Our case is over, but the MUDs didn't like the results, so they filed a case against the Public Utility Commission. Our attorney, that was the item before, he's going to be an adjoiner, so to speak, if that's the right word, Stephanie. He's going to be there in case we need him, but we're not in that case. But we need to be there because that was all part of the overall picture. Debt payments will be increasing. I mentioned that earlier. That's what's on the horizon. So we'll be issuing debt for the expansion that's going on at BCRUA and the wastewater plant, the next expansion. Kevin mentioned that earlier. City of Georgetown contract, we deliver three to four million gallons a day to Georgetown right now. That contract ends in FY 31. We're helping Georgetown out. We're making money on it. So if that does not get renewed, and that can go either way, we may choose not to renew it. It all depends on how comfortable we are with our capacity. Georgetown may not want to renew it either. But that could end in 31. And then the power contract expired to 3.8 cents per kilowatt hour to 6.3 for most of the utility. And then we have a different contract for the water plant. But kilowatt cost is going up for electricity. And then there's our schedule. We're right here on August 27th for our first reading. If approved, we'll go to the second reading at the next council meeting in September. And these rates will be effective starting November 1st for all of our customers. And if approved, it'll be set for the next three years. That's our presentation. I'd be happy to answer any questions.

Thank you, Michael. Are there questions? Council Member Stephens?

Michael, could you go back? One of the very slides close to the beginning was the residential water use by tier. Getting close. Keep going. That one. So long ago, I'm trying to remember what my question was. Averaged monthly or for the year total?

That is taking August. Let's take August of 23 and August of 25. Generally, the highest use is around August. If you look at the highest water use in any, August 15 would be my guess. But yeah, it's the month of August.

And then the second question. So you had mentioned with the businesses encouraging them to have two separate meters for their indoor use and their outdoor use, basically. What is that cost for them to put that second meter in versus just having one? And how receptive are the businesses to doing that?

So the cost. So right now, you open up a business tomorrow. You're going to come get a water meter. And each water meter is a different cost. So like a 5 1⁄8-inch meter is the smallest. Don't hold me to these numbers. It's like $250. And obviously, you go all the way up to a 12-inch meter, a few thousand dollars.

And those different size meters are based on the size of the business, square footage?

Right. Okay. Number of fixtures in the business, the size of the building, what are they doing? Okay. That's what determines the meter size. You pay for the meter cost, and then you pay an impact fee because each meter has so many LUEs attached to it. Okay. That impact fee we get, and that goes into our capital program to build infrastructure so that we can meet future demands. That's for the normal business meter. Sure. Now... If you're a small business and you have a small grassy area outside, you're going to say, I'm just going to use that meter for indoor and outdoor. It doesn't make sense for me to have extra impact fee cost, extra meter cost, and a separate bill each month. Bigger properties on commercial will elect to go to that meter, that second meter. So you've already bought this meter. Now you have that irrigation meter. You have to go buy that meter. We'll determine what the impact fees are. And so you'll get two bills, basically, each month. But the advantage to them is on the waste. It's different rates. Yeah, the rates, right? There's a tiered structure for irrigation. So they'll be paying more for that versus their normal domestic. There's talk internally with us is that we really want to promote that second irrigation. Sure. Because we can work with them on conservation and all that. And we can determine where our water's going that's discretionary.

And then on top of that, if you throw in reuse as we're trying to promote that out into businesses, would that be an additional meter at that point if we can hopefully get there someday?

That's the challenge. Like if you take a new residential subdivision. Right. that developer has to put in two separate pipelines because the potable system is totally separate from the reuse. Right. And that's the challenge, right? But yeah, if you come up, if you do that, then you're going to have two meters in your front yard, one for potable for your house and one for irrigation, which is reuse.

Okay.

And that's that added cost. That's why it's a challenge to do it on every house. Absolutely, yeah. Businesses, HOAs, common areas, works really well for reuse. Okay. And that's what we're promoting now.

But even for those, it would be a, Potentially a third meter?

Yeah. If you have a business that has its domestic meter for its business, well, you just have two because your irrigation meter would be the reuse.

Okay.

You wouldn't have a portable irrigation. You would use reuse for that.

Perfect. Thank you. I appreciate that.

Additional questions councilmember Flores Michael just want to say thank you.

It's a very thorough presentation lots of work on that And I think I understood some of that so good stuff.

Thank you. I want to recognize it Becca Thibodeau right here She's our public works financial analyst. She analysts. She works well with raft Ellis is our consultant They work together to help put all these numbers together, so I just get up here and talk about it.

They do all the work Any other questions Thank you, Michael. Yes, ma'am. H3, consider public testimony regarding an inordinance adopting the FY2027 annual budget for the City of Round Rock. First reading.

Good morning again. Good morning. Items H3 and H4 are the public hearings and first readings of the ordinance. for the fiscal year 2027 proposed budget and the 2026 tax year proposed property tax rate. The total proposed budget is $684.1 million. This is made up of $199.4 million for the general fund, which funds most of the city's main operating functions. This is public safety, parks, library, transportation, et cetera. The proposed budget also includes 52 and a half proposed FTEs, or full-time equivalents. 48 of those are for the general fund for public safety. for opening projects funded by the voter-approved 2023 general obligation bonds and a few positions for transportation. Four and a half FTEs are for other funds including our hotel occupancy tax fund, multipurpose complex fund, which is also a voter-approved bond project scheduled to open in FY27, as well as the utility fund. Proposed tax rate of 42.3 cents, which I'll get into later in the presentation, and $141.8 million for the utility fund, which accounts for the water and wastewater services provided to our customers. This chart shows the $684.1 million of the proposed budget by use of funds. So we have $298 million for our community investment program. These are capital expansions and improvements to the roadway system, utility system, trail system, completion of the wastewater treatment plant expansion project, and again, finishing up those voter approved general obligation bond projects. We have $50 million to operate our Parks and Rec Department, our sports tourism departments, as well as the Round Rock Public Library. We have $99 million for public safety, the Round Rock Police Department, and the Round Rock Fire Department, and the myriad of services they provide to our community, and $46 million for operating of our water and wastewater, stormwater, and solid waste systems. Our five-year community investment program, so this is starting in FY27 and looking five years there out, totals $927.7 million in capital improvements and expansion to the systems. Fifty-four percent of this amount is planned to be cash funded. Forty-one percent is planned to be debt funded with the balance coming from the city's partners on that large and expensive expansion of the Brushy Creek Regional Wastewater System East wastewater treatment plant. Back to the proposed property tax rate, it's 42.3 cents. The table here shows the various components. Because we saw a decrease in our total assessed value, the no new revenue rate shown here second to bottom line is 38.5 cents. It's a little higher than our current year rate. The proposed rate of 42.3 cents is an increase of 3.8 cents or 9.8% above that no new revenue rate. The purpose of the increase is shown here in the blue rectangle. We have 9 tenths of a cent for public safety. This proposed budget is adding seven new police officers and one civilian position in the police department, 15 new firefighters and one civilian position in the fire department. That's the assistant emergency management coordinator. A half cent of the increase is for operating and maintenance costs of the voter-approved bond projects opening in FY27. Again, that includes Fire Station 11, which is captioned the public safety number. But this also includes the new athletic performance center scheduled to open in FY27 at Old Settlers Park. There's a total of 20 FTEs for that, 17 in Parks and Recreation, and three for facility maintenance and custodial out of general services. And 2.4 cents of the increase is debt for the voter-approved bond projects This chart shows the median valued home in Round Rock for the upcoming tax year is $370,288. Based on that median assessed value and the proposed rate of 42.3 cents, the median annual tax bill will be $1,566. Monthly, that works out to $131 a month. The increase of that over the no new revenue rate is an increase in $11.64 a month, or $140 for the year. Single family homes make up 92% of the number of parcels in the city, but only make up 48% of the taxable value this year. This is down a little bit because of the decrease in that median residential value. So 48% of our taxable values are made up of single family homes, just showing the contribution that commercial properties have in Round Rock with our unique makeup, helping reduce the burden on residential property taxpayers. And that note down at the bottom, single family homes pay only 18% of general fund revenues needed for city services. This time of year, there's a lot of different publications out there, all of which we are required to give different calculations under state law. So I'm not going to go through these in detail. There is one in the motion that corresponds to the 9.8% increase in the tax rate. There's a different one required for publications and how much more revenues and from property taxes will get in. There's a different one required in the ordinance for the effective increase over the maintenance and operations rate, not including the debt rate. And then a different requirement from the newspaper notice. So again, they're all different. Happy to walk through them if you have any questions. This shows our tax rate comparisons. This chart is very subject to change, as different city councils have different schedules looking at their proposed rates. There on the left, you can see our statewide benchmarks. There on the right, the smaller chart, just our local city comparisons. Each city is different. You know, our rate, the 3.8 cent increase in revenue rate, really is driven by the phase in which we are in our bond cycle. Back with the 2023 voter approved general obligation bonds, we were clear with the public, with the voters who voted on those bonds, that there would be a 6.9 cent increase in the tax rate. Up until this fiscal year, we had used 3 cents of those, leaving 3.9 cents in the table. 2.9 cents of this 3.8 cent increase, if you remember the chart previous, is really for the maintenance and operations as well as the debt service on these bond projects. So our rate has slid up a little bit in the chart, 42.3 cents. You can see how the rest of the benchmark cities are currently. But again, this is subject to change, and we will continue to update this data and keep you informed. This Thursday night will be the second to last item on their budget timeline. August 27th will have the budget and tax rate first readings and public hearings with final adoption scheduled for September the 10th. Looking at public engagement, we've had public meetings back to the August 13th meeting where council set the maximum tax rate and the date of the public hearing for this Thursday. And again, we'll have the September 10th meeting coming as well. Up on the dais, I passed out our one-page budget highlights. On the back, the one-page property tax facts. Also have hard copies in the back. It's also attached to the agenda packet for this meeting and is available on the city's website. We also have a slightly longer document, our fiscal year 2027 budget and brief, also available to the public as well. walks through kind of some highlights of the proposed budget and property tax rates. Again, we have hard copies in the back this morning. We'll also have them available, hard copies available to the public in the back Thursday evening as well. Thursday evening, we will also be showing the fiscal year 2027 budget video. Again, that will be shown Thursday evening on that. I haven't seen it yet, so I'll be looking forward to see it along with you. Our website is up to date. We have the taxpayer websites as required by state law, williamsonpropertytaxes.org and travestaxes.com allow the public to go in and search for their home and see the various proposed rates of the overlapping property tax entities. We have the required publications running on our public access television channel available in hard copy at the Round Rock Library and information out on social media. Happy to answer any questions you may have.

Questions?

Thank you, Kevin.

I'll read H4. Consider public testimony regarding and an ordinance adopting the 2026 property tax rate for the City of Round Rock. First reading. And H5. Consider approval of the sixth supplemental ordinance to the master ordinance establishing the City of Round Rock, Texas Utility Systems Revenue Financing Program. First reading.

As I mentioned earlier, this is now the second of two planned debt issuances. It could be considered Thursday evening. This one is on the wastewater side. So back in 2006, the city council adopted the first master ordinance establishing the city of Round Rock, Texas utility system revenue financing program. This is now we're up to the six supplemental ordinance again This has been planned in our long-range financial planning and a long-range debt plan is accounted for in the utility rate models that you just heard about from Michael this is the issuance of 60 million dollars of Debt to fund the city's portion of that brushy creek regional wastewater systems wastewater treatment plant expansion if council approves this to move forward we'll close on the fund September 23rd and This funding is also coming from the Texas Water Development Board as a previous item, but this is part of their Clean Water Program. Happy to answer any questions you may have.

Questions? Council Member Stevens? I know when we go to issue bonds, it's important to have our bond ratings. Is this one affected by that at all, since it's the Texas?

Yeah, because this is a state program. The bond rating is held by the state, and we're just issuing under their purview.

Okay, thank you.

Additional questions? Thank you, Kevin. The mayor will be here on Thursday evening. If there are no questions or concerns, we stand adjourned.