Colleagues, I have Vice Chair Mario Castillo, Councilmember Twila Carter, staff from Councilmember Ed Pollard's office, Councilmember Joaquin Martinez, Vice Mayor Pro Tem Amy Peck, staff from the Mayor Pro Tem's office, Councilmember Julian Ramirez, staff from Councilmember Mary Nhuffman's office, and staff from Councilmember Abby Kaman's office.

Welcome all.

And once again, we have a full agenda, and we're going to get right started with uh started right with the with the monthly financial report.

All right.

Uh good morning, Madam Chair and members of the committee.

Thank you for the opportunity to provide the financial update for the period ending January 31st, 2026.

And the general fund for the fund balance, we're projecting an ending fund balance of about $336 million for FY 2026 or roughly 13% of expenditures less debt and pay go.

That's about $17.5 million lower than the finances estimates, mainly due to a more conservative revenue projection from the controller's office.

We remain above the city's reserve target with about $145 million above 7.5% of total expenditures, excluding debt service and paygo.

With that context, revenues and expenditures remain unchanged this month.

So I'll move on to the enterprise funds with aviation non-operating revenues increased by 20.2 million due to land sales.

As a result, operating transfers to the airport improvement fund increased by the same amount.

We are projecting no changes from the previous month's report and the other enterprise funds.

So moving on to commercial paper and bonds, the city's practice has been to maintain no more than 20 percent of the total outstanding debt for each type of debt and a variable rate structure, which is in line with the rating agency's guidance of 25 percent.

From time to time, the city's enterprise credits have exceeded this threshold on an interim basis as they have undertaken large capital improvement projects or major expansions.

Thank you very much, and that concludes my report.

Thank you.

Paula Good morning.

This is seven parts five financial report for the period ending January 31st, 2026.

Fiscal year 2026 projections are based on seven months of actual results and five months of projections.

For general fund, our revenue projection is 41.9 million lower than the adopted budget and remain unchanged from PIOMAN.

For the sales tax receipts for the December will 88.1 million.

So in order to meet the current estimate of 92.3 million, the remaining period would need to come in 8.68 percent below prior year.

For our expenditure projection is 9.5 million higher than the adopted budget and remain unchanged from PIOMED.

We are currently projecting the ending fund balance of $353.5 million, which remain unchanged from higher month, and 13.9 percent of estimated expenditure listed service and pay as you go.

The fund balance is 162.3 million above the targeted seven and a half percent of expenditure, excluding debt service and pay goal.

And we agree with the controller projection for aviation that non-operating expense increase by 20.2 million due to higher than anticipated land sale.

As a result, operating transfer increase by 20.2 million.

That's conclude our report.

Thank you.

Thank you.

I don't see anyone in the queue.

These this is pretty much unchanged from last month.

So really appreciate your comments.

We will move on to the m to the upcoming financial transaction.

Thank you, Deputy Director Jones.

Appreciate your time here.

Welcome Elvira Altaveras, who will be presenting for us.

Also like to welcome Councilmember Alejandra Salinas to the horseshoe.

Is this it's on, yes.

Good morning.

My name is Silvaro Thiberos, and I'm here to present the upcoming financial transactions uh on behalf of the financing working group.

Uh we only have one transaction that we'll be talking about today.

Uh this transaction pertains to the general obligation commercial paper program series K1.

Next slide, please.

On slide three, gives you a summary of the geo-variable rate exposure that the city has.

Uh, with uh RBC Bank and expires in 2030.

We also have the Series K2, also for 200 million with the same provider and same expiration date.

Next slide, please.

Uh just to give you a little bit more background on the Series K1 and K2, they are appropriation only facilities and support the DDSRF program for the city's drainage and street infrastructure.

Um, they allow us to enter into contracts with various vendors to implement the Bill Houston Forward Capital Improvement Plan.

Since Bill Houston Ford is a past you go program, we don't draw on these lines, they only use uh they're only used to establish appropriation capacity, so we can certify the funds and move contract forward.

Uh then when the invoices come in, we start paying um paying them cash.

Uh the plan for DSRF funding is first we are to use it to pay down existing street and drainage debt that was used prior to the implementation of Built Houston Forward, previously known as Rebuilt Houston.

And as we continue to pay down the debt, we are freeing up funding for more pay as you go projects.

Additionally, since the approval of the Jones settlement, the general fund will be transferring approximately additionally $100 million annually.

So as more projects come online, we anticipate additional appropriation capacity will be needed.

Um pursuing this transaction in order to appear before city council and request your approval.

Unless my place.

Um for an additional um $300 million increase and extension.

We have reached out to the current liquidity provider, um RBC and requested the $300 million increase.

This will bring the K1 total to a capacity of $500 million, and we also have the K2 that has the $200 million in capacity, bringing the total to $700 million for appropriation of these projects.

Again, the series for this uh the series for appropriation purposes only, no no draws have been made, and we don't anticipate drawing on this line.

In terms of next steps, we're planning on bringing the RCA to City Council approval on March 18.

Next uh slide, please.

Thank you, Ms.

Altiveras.

And again, you since we know our street and dry improvements are pay as you go.

This is just simply for the appropriations.

We just use these commercial paper for appropriations purposes.

But we pay uh cash as we go.

Yes.

Great.

Correct.

Any questions?

Okay, great.

Thank you very much.

Thank you.

Our next item, colleagues, is our next set of discussions on um the open space ordinance, which we first introduced last month, and we'll be working this issue through committee and the revisions through committee.

I would like to welcome Planning Director Von Tran, Parks Director, Kenneth Allen, and Senior Assistant City Attorney Tammy Kim to present on next steps related to the open space ordinance.

Again, colleagues, this is an ordinance that was crafted in 2007.

There were some brief changes to uh sectors in 2011 or 12, but other than that, this this ordinance has has remained untouched since then.

So we are looking to update and improve this ordinance.

And the floor is yours, whoever wants to begin.

As you guys know, I'm Kenneth Allen, Director of the Houston Parks and Recreation Department.

And today we're going to talk a little bit a little bit about park sector revenue disparity, Chapter 212 LGC and Chapter 42 Code of Ordinances of the overview and compliance and then the process to create amended fees along with the timeline.

As you guys know, in our last presentation since 2007, over 100 million dollars has been collected in the parks and recreation dedication fund across 21 park sectors.

Now this funding has been used to acquire land and develop an improved park facilities to meet the needs of our growing population.

I would like to point out that structural imbalance that currently exists between park sectors.

And slide four, the pie chart actually illustrates that 53.5 percent of total park dedication fund revenue is generated just by five out of 21 park sectors.

That's pretty amazing, 53 percent.

There is also noticeable disparity among five top five sectors with park sector 14 shown in orange in the pie chart, bringing in 21 million dollars.

Now, as compared to Sector 3 of the top five, which has collected around 7 million each.

The fifth sector has generated more than 11 million dollars.

Yes.

You know, as a department, we want to call attention to the need to balance park investment across all 21 sectors.

Slide five.

Here's a map of the top five earning sectors.

Notice the location of Sector 7 of the location of Sector 14 and orange, inner South, and the next highest earnings sector, Sector 12, is it's in yellow, the inner loop northwest area.

The three sectors generating around $7 million are shown in pink, purple, and blue.

The remaining 16 sectors are shown in gray.

That represents the highest opportunity to bring forth park sector revenue redistribution, which uh it's a plan to help achieve system-wide balance.

Slide six, please.

This slide represents the city's parkland needs relative to the national benchmark of 10 acres of parkland per 1,000 residents.

The green area indicates park sectors uh that currently meet or exceed our standard or the national standard.

The red areas highlight park sectors with the greatest efficiency or classified as very high need for additional developed park space.

The orange and green areas also indicate substantial parkland gaps driven by population demand, underscoring areas where investment is also needed to ensure adequate access.

Overall, this analysis makes clear the significant progress still in need.

You know, only six park sectors currently meet the access standard of our urban park system.

Slide seven, please.

Overall, park dedication funds has transformed and expanded Houston's park system with 47 million already invested and an additional 36 million in the pipeline as projects become shovel ready.

While investment has been distributed across all council districts and targeted toward high need areas within each of the 21 park sectors, funding disparities remain in 16 sectors, creating continued challenges for some of Houston's most vulnerable and underserved communities.

To address this structural imbalance, we recommend an amendment to Chapter 42 that would provide up to 30 percent or more of the park dedication fund revenue to be strategically deployed citywide.

You know, this flexibility will enable the city to respond to the most critical needs, advanced priority projects, and acquire land necessary to develop park facilities.

This will ensure access to quality parks citywide.

Thank you.

Thank you, Director.

And this is definitely something that I would like to see showing those disparities that we can take 30 percent of the right now, all the money is collected within a certain area has to be spent in that area.

So you're what you are suggesting, it would be better to, as we saw very clearly on the maps of areas of need and areas that get less funding, we would be able to take some of the funding from a certain sector, 30 percent of that and spread it to areas in more need.

Yes, 30 percent or more.

So we obviously legal determined that was that was viable.

We can do that.

We can make we can make that recommendation.

Correct.

Okay.

Great.

Okay, Ms.

Tran.

Thank you, Director Allen.

Good morning, Chair Alcorn, Vice Chair Castillo, Council Members and staff.

As you know, I am Von Tran, Director of the Planning and Development Department.

In this section, I will cover key provisions in Chapter 212 of the local government code and Chapter 42 of the City's Code of Ordinances as they relate to park fees for multifamily and single development, which also includes the fee setting process.

I will also go over steps needed for compliance, and then finally our proposed timeline.

Next slide, please.

I would like to welcome Councilmember Fred Fleckinger and Councilmember Willie Davis and staff from Council Member Tiffany Thomas' office.

Okay.

This slide compares Chapter 212 and Chapter 42.

Chapter 212 applies to multifamily only.

The city must choose land dedication, fee, or both.

Fees are collected at certificate of occupancy.

There are two fee options.

The first one is a higher fee option exceeding 2 percent of the median family income, which requires complex calculations and is more difficult to administer.

The second is a lower fee, more straightforward calculation option capped at under 2 percent of the median family income.

Chapter 42 applies to both multifamily and single family.

It requires parkland dedication or fee in lieu.

Fees are collected at permit, and the fee is $700 per unit.

Next slide.

This is the process to create or amend fees.

Chapter 212 requires a public hearing to classify areas of the city as suburban, urban or central business district.

It also requires notice to appraisal districts, calculating average land value and setting dwelling unit and density factors.

These steps are mandatory to maintain authority to impose fees.

Chapter 42 requires annual reports to the Planning Commission, fee adjustments to be based on land value, public hearing and commission recommendation, as well as City Council approval.

Next slide.

To stay aligned with state law, we must update Chapter 42.

We recommend adopting the lower fee, the more straightforward calculation option for multifamily, considering a fee-only approach for multifamily, and extending the three-year obligation window.

And this is in addition to the recommendation that was proposed by Director Allen.

Next slide, please.

This is the proposed timeline for amending Chapter 42.

Produce the final red line of the ordinance by April 23rd.

Presentation to the Planning Commission on April 30th.

Hold a public hearing on May the 14th with an option for another presentation to this committee again on June the second, then finally forward to City Council.

Next slide.

This concludes my presentation.

We are happy to answer any questions.

Thank you.

Director Tran, fees collected at permit.

When is that exactly?

When would fees be collected?

So currently in Chapter 42, when a project applies for a permit, part of their permit process and application fees include the parks fees.

So when they are applying, when they are getting applying for their permit, that's when that would be paid.

Yes.

And I think the timeline answered how long the initial requirements will take.

Talk to me about no no a fee only dedication, fee only no parkland dedication for multifamily.

What does that mean?

I I thought if you had like a apartment building and a pro a park like on in your within your apartment building, that would count.

Are you saying that's not going to count or so currently Chapter 42 allows discretion of the director, Alan, director of the parks to accept park dedication land or a fee?

Like a pub, like he can accept public like public fee.

You know, if they have some property near one of our parks, that could be accepted into our park system.

Which would be a substitute for paying the fee.

Correct.

Okay.

Correct.

And then what about a private park?

Currently, they can also dedicate and count private parks as part of the requirement.

So the private park would count instead of paying the fee in lieu.

Correct.

So what does it mean explore fee only and no dedication of land for multifamily?

Yes.

So chapter 212, which Tammy can also expand on, has a provision where if a developer dedicate land, we would also need to do an appraisal of that land, and if they were to dedicate whether it is a private park or a public park, the appraisal amount of the land and the fee are compared.

The city would need to take care of the delta.

And we know land is going to be a lot more expensive than the fee.

Right.

And so that puts us in a not advantageous position.

That makes sense.

So there would still be the option to dedicate land, but if there is too much of a discrepancy, we would perhaps charge the fee instead.

Correct.

Okay.

Got it.

Councilmember Martinez.

Thank you, Chair.

And it was kind of in the same same line of questioning.

I think for me, what is that breakdown?

How many folks actually say, hey, I want to pay the fee in lieu of, right?

Do you all have that specific number?

We do have that number.

And I can't pull it out of my head just to point out as a significant amount of fee paid in lieu of land, because the fees that are charged are half of what other cities charge across the U.S.

And I I guess the reason why I asked that is because if if folks are already paying the fee, you know, just making sure that we are being cognizant of that when we are talking about the ordinance, because then y'all are saying now that possibly there wouldn't be an option to put private green space on the on the property and now you would have to pay the fee.

Is that what we are trying to push towards?

No.

If there is private, if there is a private park within that development in lieu of a fee still counts.

Okay.

It sounds like we are just going to if that if the value of the land is usually going to be more.

Sure.

Maybe if I use a real life example, for 100 units of a multifamily at $700 per unit, they will be paying $70,000 in fees.

If they were to dedicate one acre, 1.8 acre, that is the requirement right now in Chapter 42 for 100 units, it would need to be 1.8 acres.

That 1.acres potentially could be worth upwards of 150 or more.

So that is like double the amount of the fees they would pay.

Under Chapter 212, the City would need to compensate the developer for the difference between the fees, the fee that we charge and the value of the land.

So if our fee is currently at $700,000 or $700 and the land is worth 150,000, we would need to pay the developer the difference of $80,000.

The other question I had, and it looks like the 30 percent is I I agree.

I think there is definitely different parts of the city that uh might not be seeing as much development as well.

The lines that we have now for each of these park sectors, are they just set up?

You know, have y'all ever thought about like will we go through redistricting when you start seeing more development, more population, to seeing how y'all could better fit that model, or is this just an easier route to just do 30 percent or more?

We have we have discussed that potential to redraw the sector lines.

I mean, another example is in Sector 5, from a development standpoint, we have collected $80,000, right?

But in Sector 14, we have we have collected $21 million.

Um either the ability to spend the money across sectors or redrawing the sectors from an echo from an economic standpoint, um we are talking about it now, and that will probably come down a little bit later as we as we continue to meet.

Okay.

And I just appreciate the timeline so that we can make sure stakeholders are engaged as well.

I am sure there is gonna be some feedback from folks.

So thank you.

Councilmember Flickinger.

I have got a question.

You talked about extending the time to obligate the funds.

Is that just essentially saying you have got longer to spend it or decide how to spend it?

Correct.

And currently we have to spend it within three years of that 100 million, uh we have about 14 million left to spend over the next three years.

And you guys know how development is between design, permitting, and construction.

That is two-year process.

So a time a timelines are really crunched.

We would like more time.

Okay.

Are we still looking at increasing these fees?

No.

We are not proposing that.

Okay.

So they are going to remain the same?

Okay.

Correct.

Thank you.

Well, we are going to be discussing that.

Another reason for extending the timeline is the disparity in the fees being collected, so some of the sectors do not collect enough funds to even do anything with it.

So right now, so there is not enough revenue to actually pay for anything.

Correct.

Okay.

Okay.

Thank you.

Councilmember Ramirez.

Thank you, Madam Chair.

Thank you both for the presentation.

Good to see you all.

I want to go to slide six, which deals with park sector disparity.

This map of the city has sectors broken down according to it looks like highways in some instances.

How did you all define the rest of the sectors?

What criteria did you all use to define them?

The 21 sectors 2007 were created from a previous administration and director.

And I think we at that time we use the 610 loop to help find how the sectors would be divided within.

I might have to go back and get the specifics on it.

But in terms of in terms of this slide and the property and the park space, we got that from our park master plan.

In terms of where we're parked for or park rich, so to speak.

Okay.

And this shows how many acres per 1,000 residents we currently have in those various sectors.

Is that right?

That's correct.

What population figures are we using?

The most recent or is there a baseline or what?

I'll have to get that answer to you.

We generally use the census report that came out.

Okay.

All right.

Let me ask you about some of the other slides.

And if we can go to let's go to slide 11.

Um three recommended bullet points there.

The first one is pursue low-fee option for multifamily.

Do you have a feel for whether that would be revenue neutral or would it result in in more revenue or less revenue for the city at this point if if this gets adopted?

I we have not done the full calculation, but gut check, I would say it wouldn't be less than what we are collecting right now.

If anything, potentially it could be more.

Okay.

So we don't have a specific feel for that one way or another at this point.

I will say currently it is almost 50-50.

Between single family and multifamily in terms of revenue collected.

Okay.

So it just depends on the development, to be honest, in a type of development.

All right.

And at this point in the process, have we have we sought input from business stakeholders?

Not yet.

We will uh we plan to also make the same presentation to the public.

And obviously, you saw in the timeline a part of the process is public hearing.

So we will bring this forward to the Planning Commission for public hearing.

We have on the schedule potentially for two public hearing.

Okay.

Last year.

And Councilmember Ramirez, I certainly have been in touch with Greater Houston Builders Association, Houston Real Estate Council, Department Association, and have meet had meetings about that.

And they are in the audience and have been invited to everything we are discussing.

Okay.

I will go back in the queue.

Councilmember Flickinger.

Just want to confirm my understanding.

These funds are only to be used for the acquisition of a new park or for a rehabilitation of a park, but cannot be used for maintenance.

Is that correct?

No, not for routine maintenance.

For replacement.

Let's just take lighting.

You know, we have old lighting in parks and we need LED lighting, something new.

We can use it for that.

But your regular schedule of mowing the park and that type of stuff, these funds can't be used for that.

Correct.

Okay.

Thank you.

Right.

This is capital improvements or acquisition.

Both are allowed and with a limit, and then you have got legal fees and environmental fees, appraisals, those are limited to 5 percent.

And I will say on the fee question, especially when we are talking about this, the the you know, the delta and what could be the land value.

Another, you know, we as this as this fee, as this ordinance was established in 2007, there was supposed to be an annual appraisal each year.

We didn't do that because there was no intention to raise the fee.

Nobody was looking to raise the fee.

This was right at the downturn 2007, you know, things were down.

But part of the ordinance in in 250 42-253C says that parks planning director and parks director shall report to the planning commission on the amount of fees in lieu of dedication received expended or encumbered during the preceding 12 months.

The report shall also include an analysis of changes in the taxable value of land within the city as certified by each respective county appraisal district.

The director and the parks director may recommend an increase in the fee lieu of dedication based on increases in appraised value.

So obviously appraised value has increased over the last 20 years.

Thank you, Chair, and thank you both for the presentation.

I just wanted to clarify for Chair Alcorn's first question that she asked about the private park versus the public park dedication.

When you say um explore fee only and no dedication of land, we're talking about the private park land.

Is that correct?

I was a little confused on that.

Private and part.

Okay.

Okay.

So that for the explorer fee for fee only is for both private and public.

Correct.

Okay.

Got it.

Thank you.

Yeah, and I'm not really interested in paying a huge delta, you know, in in you know, if the appraised value has gone up so much and we're still charging $700, we're going to owe a bunch of developers a bunch of money.

So like we've got to look at that fee to make it more in line with the price values, in my opinion.

We don't have any kickback because the fees are so low right now.

Right.

And and and considerably low if you look at last month's um look considerably lower than other cities in Texas if you look at last month's presentation.

Uh Councilmember Ramirez.

And uh Madam Chair, this is probably more a question for you.

If if you know, I'm looking at this timeline for action on this uh particular ordinance.

How does how does this fit in with uh our budget schedule?

Our meetings on the budget and votes on the budget.

Well, right around when it this comes to uh the when this comes to city council will be right around when we are passing the budget.

It is my hope that we this is considered as as uh budgets are prepared.

Um you know that they're not proposing an increase in fee, and perhaps there might be a budget amendment or some other measure.

I don't I'm not sure.

I'm not sure how it all fits in.

I don't run the show, but but the budget sh the budget vote will be the day after this comes to BFA.

Okay, great.

Thank you.

And by by the way, if this schedule needs to be adjusted, we can't adjust it.

We're just saying this is the minimum time line.

I like the schedule.

I think y'all are have are pushing on this, and I I appreciate that.

I know it's a lot of work to get in line with the State.

Yes, and I appreciate your work on it.

So I think the timeline looks good.

Okay, great.

Thanks so much for your presentations and for taking a hard look at this ordinance and really excited about the 30 percent.

Um, Kenneth, that's that's gonna be great.

Or more.

We're moving.

We're moving in the right direction.

Okay.

Thank you.

Next.

And I I'm I'm so sorry, I forgot to say we have staff from Councilmember Tarsha Jackson's office, and she has been here the whole time.

All right.

Uh we now have our next presentation.

We'll welcome back the controller's office, Deputy Director Will Jones to provide a presentation on understanding Houston's electricity exposure.

Thank you, Will.

Thank you.

Okay.

Let's go ahead to the next slide, please.

Okay.

So really the reason I want to give this presentation is that, you know, like most Houstonians, myself, you all, we are paying more for electricity.

We have been paying more since uh, you know, the impact of uh winter storm Ure.

Uh but the City of Houston itself, we also are, you know, we purchase electricity, so we are also impacted by that.

So I thought it was important to kind of lay out how that looks for the city, especially as we're getting ready for the budget cycle coming up.

So in this presentation, we'll take a look um at the Texas market, what makes Texas Texas unique.

Uh we'll look at uh the existing contract that we have, um, look at the budgetary impact, and then just uh leave you with some takeaways on that.

So next slide, please.

Okay, so I do before I get into all the budget information, did kind of want to just take a look at Texas and what makes us unique from you know the rest of the United States.

Um the structure of the Texas market, we are essentially um an energy island, uh, if you will.

So, you know, the the majority of the rest of the the States are kind of under Federal control and they're kind of interconnected.

Uh but we are kind of on our own.

So the 90 percent of the uh electricity load in Texas is managed by ERCOT.

Um so that's important to note.

Um and then also uh like I said, with the the rest of the United States, most of them are under uh you know federal regulation, right?

Um managed by the Federal Energy Regulation Council, so they have oversight.

Um so with Texas, we uh we have state oversight with the PUCT, so that's how we are regulated.

Um and then also with with Texas, we are a uh energy only market.

So in the for the majority of the other states, they pay other power generators to have capacity on hand in Texas.

We pay for the power that we use.

And one of the the biggest things about Texas is our uh competitiveness.

We are deregulated, so it's a very competitive market.

Uh you have the power to choose uh your electricity provider.

There's no set fixed rate across uh you know in Texas.

And then also with uh with that competition also comes you know innovation.

Uh so because of you know the competitive competitive nature of Texas, uh we we are one of the most uh the leaders when it comes to renewable energy, particularly wind, uh we're number one across all the states.

So that is a benefit of us having that competitive market, it forces uh innovation.

Um but also as uh a competitive market, you as a a resident uh as a city, you also take on some risk when you uh take on these contracts.

Uh so some of the the risk kind of falls on you.

Uh but really the the highlight or I really want to point out is the the the energy island uh that we are that we have here in Texas because we saw during Winterstorm Urie uh how that really impacted us.

We don't have the ability to draw power from other areas.

Next slide.

So as a result of uh Winterstorm Urie, there were new laws passed that to helps help secure our grid, right?

So a lot of uh the default securitization, uh uplift securitization, all of these these different laws that pass, I'm gonna read through all of them, but the whole point was to help stabilize the grid, help maintain um you know the grid so that we don't repeat uh what happened with winter storm Urie.

But with those costs, uh those costs are passed on uh to the customers, whether you're residents or the city of Houston.

Uh so as a result of that, that is helping to drive uh the cost.

And these are what we call non-bypassable costs.

So if you switch to another uh retail provider, these costs will exist no matter where you go.

So that those we have to pay those costs.

Um so that's important to note us uh when we start talking about uh the impact to the budget and to the city.

Okay, on the next slide.

So let's kind of take a look at uh our current contract.

Um so the the current contract is a sixty six hundred and forty million dollar uh contract with Reliant for up to seven years.

So you can see that is a significant financial commitment, right?

And so uh again the the terms where it was a five-year term contract with two one-year options, um, and we are currently in that first one year option.

So of that uh 640 million, we have about a hundred and ten million uh spend authority left in that contract.

Um and again, the when we entered into this contract, it was uh the first time when we did a hundred percent renewable energy.

Houston was recognized uh nationally for um our contribution and being leaders in the renewable energy market, so it was a very big deal.

Next slide, please.

Okay, so since we've had the contract, there have been uh several amendments and modifications to the contract.

Uh when you look at that first one, that that's a that was a no cost, that was a good uh amendment to to have where we would you know during peak times working with Reliant, we can see where we can reduce uh to to kind of save and get credit.

So that was a that was a positive amendment.

So then you see the second amendment where it says fixed street light pricing.

Uh so to understand our our electricity structure, we have what we call general operations, which are our facilities, and then we have our street lights.

So one of the things that we learned during winter storm Uri, our um our general operations was on a fixed price.

So we had no impact uh in terms of uh we had a fixed rate.

So when when prices went crazy, uh we were good with our uh facilities.

However, our street lights, we were on a variable rate.

Uh we had we have always been up until that point uh because it was more beneficial.

We had no one saw winter storm Ure coming, so uh all of the recommendations were to keep that structure.

But once winter storm Uri happened um and prices spiked thousands of percent to millions of dollars, it was costing us for our street lights alone.

So uh we got with our consultants and uh I back in 2021, I presented to council about um uh you know the need to fix the street lights.

So that and that so that's what we did, so that we have that budget stability.

Um so that was that amendment, and then in 2023, amendment three, we had um another amendment because again, as I just walked through, we had all the the different changes in law that impacted the cost.

Um and so we had to amend our contract uh to be able to pass those costs on to the city.

Um so now looking at where we are now, we are in our first uh renewal option, right?

And so to also understand the contract, the first five years we were on that fixed rate.

Um when you get to the renewal options, then you have to revisit uh the price.

So as you can see there in our renewal option, uh the the price is up about 90 percent from where we were with that fixed rate.

And again, uh to understand when we when we entered into this contract, and I'll talk a little bit about that later, we entered into this contract right before Winterstorm Ure happened.

So for the majority of that time, we've been kind of shielded from what the rest of the markets were experiencing because of that.

Now that we're in the renewal option, um now we have some exposure to the reality of what everyone else has been paying for a while.

Um and so and at the same time we went ahead and exercised the renewal, the second option so that we'll the contract will carry through 2027.

Next slide, please.

Um and this is just kind of walks you through uh what we've spent or encumbered on the contract.

So today we spent about 530 million.

Uh again, we're in FY26, and you can see going from 25 to 26, a significant increase in what we had to encumber to be able to uh you know for the for the year.

Uh but like I said, we have 110 million remaining.

And I wanted to highlight the slide because when we get to FY27, if we're spending 123 million this year, uh that 110 million may not be enough, and so they may have to add some uh more spend authority spend authority to the contract so that we can make it through the uh the the total term of the contract.

But we have spent about 530 million uh to date.

Next slide.

Uh no, this slide is very important as well because I wanted to really highlight what are the different components of electricity costs.

And if you look at your own bill, you'll see some similar components.

Um and the big the big story here is about almost half of the the cost are related to pass-through cost, not directly related to the energy that we use.

Um and like I said, if you look at your own bill, you'll see um you know the the transmission and distribution cost.

Um you will see some of the uh the ERCOT costs.

Um but about 50 percent is is based on uh the usage plus whatever the negotiated rate, and then you have uh the transmission and distribution.

So this one is very important.

That's the the center point cost.

Um and again that is a straight pass through uh from center point.

And if you look at in terms of cost rising, the same way you know we talked about you know what happened after Winterstorm Urie, we we're also seeing growth in the transmission and distribution.

You know, we had Hurricane Barrel, we had the Derecho, um Center Point is going to recover those costs, and those costs will be passed on to us.

And so I you you won't see that cost go down.

We may even see the transmission and distribution allocation grow.

Um, and then of course we talked about ERCOT and then the other taxes.

So one important, and I put it in the footnote below, when we did the renewal um that we added a lot of those ERCOT costs to the fixed rate, which is also what contributed to you seeing such a 90 percent.

Um so the the distribution you see here is based on the average of 24 and 25, but starting in 26, those ERCOT costs, the majority are a part of the the fixed rate, but it's still essentially you know a non-bypassable cost, but that that's just the way they're capturing it.

Next slide, please.

So just kind of looking at the budget, um, about sixty-one percent of the costs are are in the enterprise funds.

The general fund makes up about 17%, and the special funds about 22 percent.

And it is important to note in the general fund we do have contingency about 6.5 million that's added to that bucket.

Um, but it's important to kind of see the distribution, and I'll talk more about the recent changes in the past couple of years with the general fund.

So next slide, please.

Okay, so this this slide is also very important so that you can really see kind of the changes.

Uh so what I wanted to highlight and um starting in fiscal year 21.

So, like I said, when we got into this agreement with Reliant um in July of 2020, uh that same fiscal year is when um uh the winter storm year happened in February of 2021.

So when when the when we started the contract, like I said, it was 100% renewable.

So about 11 million.

You can see the drop from 94 that we spent in in uh FY 2020 to 2021.

And so we were expecting to save a significant amount uh with this contract, uh just so happened winter storm year hit that same fiscal year.

And then uh as I mentioned, our uh our general operations were fixed, so we were shielded from any fluctuation, uh but again our street lights uh were variable until we fixed it.

So you can see you know a spike in 2023.

Um then as you walk along and you see where we are looking in 2026, about a 40 percent increase uh because again caught the the fixed rate is about 90 percent higher than what it was.

Um and it's also important to note that on this particular slide the electricity costs include all electricity costs.

We do have a 20-year purchasing power agreement, uh solar uh agreement, and there does a very, very small um entry uh contract.

But the majority of this is uh related to our our reliant contract.

Um next slide, please.

So as I mentioned, I want I did want to touch base on the general fund because you will see some significant changes that happen around fiscal year 2024.

Uh so the general fund uh used to house our street light costs.

Um so you can see starting in FY 2024, those costs were shifted to the dedicated drainage street renewal fund uh to be covered by the general mobility funds.

So uh previously uh it represented about sixty-five percent of the general fund costs when you look at electricity.

So that was a big uh uh big savings in the general fund.

And so you can see going forward, uh now those costs are are not impacting the general fund, but you can see our general operations.

We are still seeing growth there.

Um but it is important to highlight that shift of of the streetlight cost to the dedicated drainage fund.

Okay, so um key takeaways uh just to kind of wrap it up.

So as as I said, uh under the renewal, uh the rate did increase 90 percent, which is a significant.

Um the remaining contract capacity uh may not be enough.

Uh we have 110 left.

We're projected to spend 123 this year, so that's something we may need to be on the lookout for in FY 2027.

Uh beyond that, um, so looking at FY 2027, though some decisions will have to be made.

Are we going to go out uh to to do uh another RP for a new uh contract?

I did put this note state law doesn't require uh electricity contracts to be competitively bid, but the city has always done we like I said, Texas is a competitive market, the city has always done that to try to ensure we get the best price.

Um and it does take a while to uh for that procurement process.

The city of Houston is a very complex uh electricity profile, it's about 1.3 billion kilowatts annually.

Um we have that 20-year purchasing power agreement.

Um our billing process is not very simple.

Uh so it's a very uh it takes a while to do that to go through that RP process.

Um long-term considerations, as I mentioned, uh the the impact of winterstorm Urie and the the need to stabilize the Texas grid, we're gonna be paying for that for a while.

Um and again with the transmission and distribution costs uh through center point, you know, again with Hurricane Burrell and uh the Derecho, those costs we're going to be paying for that for a while.

So this is not a uh a a one one and done type impact.

We're gonna be dealing with this for uh quite a while.

Um and so that I believe wraps up my report and happy to take any questions.

Thank you very much.

Very informative.

I appreciate your deep dive into this.

Any questions, colleagues?

Councilmember Flickinger.

Thanks for the presentation.

Um slide 15.

Street lights.

You show from 2016 to 2023 about a 20 percent decrease.

Yeah, the the costs were going down because uh keep in mind in 2020 is when we uh we got into the agreement with Reliant and the costs were lower.

So we were projecting to go down.

Okay, so all that was due to the new contract.

I mean, that's a huge savings.

Yeah, starting in 2020.

Yeah.

Okay.

Okay.

2021, I'm sorry, yeah.

The other thing I'm curious, it says we use 100 percent renewables?

Correct.

I mean, we know sometimes the sun doesn't shine and the wind doesn't blow, but we still use electricity.

Right, right.

So there they have two what they call renewable energy credits.

Uh again.

Okay.

So we actually use fossil fuels, but they are swapped out with the credit for some other thing they have done.

Something like that.

But we we it is 100 percent renewable, and that is certifiable in in terms of that.

Right.

Thank you.

Vice Chair Castillo.

Thank you, Chair.

Thank you, Director, for the presentation.

Um the last slide, one of the bullet points remaining contract capacity may be insufficient to fully cover FY 2027 costs.

Do you have a projection on what that potential gap would be?

Yeah, it it could potentially be about 10 to 20 million.

Like I said, we we have 110 million remaining, and we are looking at spending about 123 million this year.

Um so it that may be a gap of uh uh uh 10 to 20 million potentially.

Okay, thank you.

Thank you very much.

Deputy Director, Deputy Controller, Deputy.

Deputy Will.

Thank you very much.

Oh, Councilmember Davis, sorry.

Thank you, Madam Chair, thank you for your presentation.

Does that the the rate that we agreed to, does that also include the Airport?

Yeah, it includes all enterprise for all operations for the city.

Okay, good.

I just wanted to make sure I knew it was saying with theirs.

Okay.

Thank you.

Thank you very much.

And I apologize, colleagues.

I I meant to call the public speakers on the open space ordinance, so I am going to do that now.

Um we have some people signed up to speak on open space.

The first one being Laura Gallier.

She is not online.

Does not appear, she is online.

Mike Dishberger, I do see.

Welcome, Mike.

Thank you.

I'll sneak.

Can I just stand?

All right.

The chair will move.

I uh thanks, Council, for letting me speak today.

Um my name is Mike Dishberger.

I own San Castle Homes, been a builder in Houston forever.

Uh inner city stuff, and I am uh representing uh Great Houston Builder Association today.

And so uh the presentation was good, but I heard Sal uh Councilmember Alcorn mentioned that word increase.

Uh we can, you know, I think we can get behind some sort of increase.

But first, I think we have been violating the rules since 2007.

I didn't even know what parks we bought.

Uh and it just is very apparent.

We are supposed to be doing this every year.

We just need more transparency.

Just a list of what parks you bought, and I had that same question about the maintenance.

We are not paying for mowing the grass, but replacing a gazebo or a basketball court.

Right.

Those are those are fine things too.

So I think first of all, we need to get that done.

Uh it seems like that should be fairly simple to do.

The parks director probably has all that information.

Uh just as an aside, I think the uh maybe you look at read redistributing those district lines, having 21 of them may be too many, knock it down to five.

And that way the money gets, you know, take that uh inner city 610 where I built a lot of stuff and mix it in with uh, you know, North Side or something.

Just talk about why you have 21.

Yeah, I have talked some to the administration about that.

And and my sense is they that there they want there was not an interest in redrawing right now, um, rather redistributing the 30 percent, but we can dig more into that.

And your request for specific information on what has been done with these funds, absolutely.

That that is that is important, and we can make sure you get that.

Councilmember Ramirez.

Oh, I wasn't quite finished.

Oh, you are done.

Keep going.

Keep going.

You hopped in there, you took my time.

Okay.

Anyway, uh we come to council not very often, but and a big word in the United States today, and even in Houston.

Affordability, affordability, affordability.

This really, you are charging new home buyers in Houston.

You are not charging the entire city of Houston.

And so this fee goes to the home buyer, and we like to be nice builders, but we pass it on.

And there is it's a margin thing.

So you it's a little bit more than what the number is.

And uh I could I could see something where you I don't know why they didn't put it on an inflation adjusted every year to inflation, that would have probably been a great deal.

But some big increase, again, I'll share this number.

Every $1,000 of uh increase in uh costs is another 2400 families can't can't afford a home in Houston.

Because it's like it's only this, it's only this, it is only this.

You'll hear us say that all the time.

Because it's only this, and it sounds like a really good deal.

I love parks.

I live near a park.

I think parks are fantastic.

But I but I think, you know, quite frankly, it probably should be spread around the people of Houston, but that's not how we do it.

We are doing a fee here.

And I also would never ever want to be Austin.

I talked to them last week about they are dealing, they don't even reply because the park fee is 23,000.

So they had I think they had three replats last year for single family.

No one can afford to live in Austin.

I don't want us to become that city.

It's just a leakfrog effect.

And the other thing is, don't worry.

Don't worry.

We're not going to 23K.

I don't that I don't think so.

So uh anyway, that's that's my comments.

No, not not lost on me.

We certainly want to be cognizant of affordability.

I just want to make sure we talk about that because there's a lot of things.

Absolutely, and that's why you're here.

So thank you very much.

Councilmember Ramirez.

Uh thank you, Madam Chair.

Mike, thank you for being here and appreciate your observations and um I agree with you.

Uh we we need transparency.

We've had requests from the from the community from from residents uh wanting to know how is this money been spent?

Has it gone to new parks?

Has it gone to maintenance?

What what have we done with it?

And so I think those are those are valid questions.

Um, you know, I asked about what at what point in this process will will we consult uh business stakeholders, and so that's that's gonna be an important part of this as well.

But appreciate your observations.

Thank you for coming.

And by the way, we did hear about this was not like this is a prize.

That's why I'm here today.

I knew I remember talking to you about this at a cocktail party.

A holiday cocktail party.

So uh all good.

Thank you.

Okay, thank you.

Um Ethan Michelle Gance.

All right.

Taylor Valley Presley with SEER.

Welcome, Taylor.

Good morning, uh budget and fiscal affair committee members.

I'm Taylor Valley Presley, the parks equity analyst and advocate for the coalition for environment equity and resilience.

During the last budget cycle, the Houston Parks and Recreation Department lost significant funding for maintenance and operations of city parks.

The loss of funding for HPART places significant burden on park staff to manage more with fewer resources.

Sear and our partners would like to see the City of Houston develop additional funding streams to support Houston parks and the many benefits they provide to residents.

The equitable dis distribution of park funding is extremely important and necessary for ensuring that all parks around Houston, no matter the neighborhood or size, have a fun, safe environment and area to meet exercise and play.

Unfortunately, the way the open space ordinance is written has the funds going back to the park sector in which the development has taken place.

This is in conjunction with how many with how the boundaries are currently drawn, leads to inequities within this system.

We therefore support the 7030 suggestion that allows 30 percent of the collected revenue from the parkland dedication and loo fees to go towards any priority park project in the city, despite this the park sector.

Another important piece to this that we want to emphasize is funds to go towards expanding park acreage, as it is written in the ordinance.

In the spirit of transparency, we ask for HPAR to share the amount of funds that have gone to our land acquisition thus thus far per park sector and for park expansion to be made a priority in the future.

Thank you.

Thank you very much for your comments.

Cody Miller, also with Greater Houston Builders Association.

Good morning.

It's still morning.

Good morning.

Um I'm gonna just echo a lot of Mike's I'm Cody Miller.

I'm with the Greater Houston Builders Association.

I'm gonna echo a lot of Mike's comments.

I think in order for uh for us to be agreeable to a fee increase, I think that we would love to see a lot more transparency on what the fees have been spent on over the years, um, have more annual reporting and just be a lot more transparent about it.

Um also on the affordability on the affordability piece.

Um in the Greater Houston region, about 40,000 homes a year are built um in our region, and only about 10 percent of those are within the city city limits, and there's a lot of reasons for that.

But one of those is because it's so much more expensive to build homes in the city of Houston.

Um again for a number of different reasons.

Uh but even if it's a nominal fee increase from 700 to 1200, that those types of things still add up when you it when you have permitting fees, inspections, impact fees, all that goes towards um increasing the cost of housing in Houston.

And so, like what we like to say it's it's death by a thousand paper cuts.

Um so while this might not be an significant increase, it uh it adds up all the time.

So I appreciate um you all bringing this, and um I I look forward to working with you.

We we look forward to working with you all on this.

Thank you, Cody.

Good to see you.

Cody used to be one of us.

All right.

Uh Pastor Deb Bonario, Martin.

And I believe you're online, Pastor Deb.

Can you hear me?

Yes, go ahead.

Thank you.

Thank you so much and blessing to the council members and speakers.

I'm uh Pastor Deb Denario Martin.

I'm the newly elected president of Super Neighborhood 45.

I represent 60,000 uh stakeholders today in District H and our territory is halfway between downtown and Bush Airport, situated between I-45 and Hardy, uh, from around 610 cross timbers uh to West Mount Houston.

We remain a long-standing parks in Arts and Desert.

Our stakeholder engagement has been abysmal due to 20 plus years without representation of a super neighborhood.

So both chronically underserved and uninformed.

I'd like to question the criteria also used to create the park sector disparity chart with 10 acres per thousand residents.

And I wasn't exactly completely satisfied with the answers to that question of how this criteria was put together.

As um our territory is designated uh moderate, not higher, very high need.

And um and I uh dispute that, and I believe we should uh maybe have a meeting with our parks and arts uh um committee, and I'd like to request that today uh with Council Member Castillo and the outlarge uh members to meet with the parks and our super neighborhood parks committee because we have 20 years of catching up to do, and the apartments we have up and down 45 are mostly run down in blight, and we have a lot of trailer park uh communities up and down airline.

Uh so that's all I have to say today.

I don't know a lot about uh the ordinances and so forth.

I'm here just speaking from the grassroots from a super neighborhood that came from the residents, and we need more information about these sectors, and I really believe the parks needs to put out another survey and uh do a better job of breaking down these sectors.

I know y'all hate to return to cutting out a whole clock, but uh in my opinion, um the disparities in the disparity chart.

Thank you so much.

Thank you, Pastor Deb.

Always great to hear from you.

Councilmember Castillo has a a comment for you.

Thank you, Chair, and thank you, Pastor Deb for chiming in and for all your leadership out there in the North Line area getting the super neighborhood re-established.

Um my office will be in touch with you about facilitating that meeting between parks and and arts and your super neighborhood.

Fantastic.

Thank y'all so much.

Have a blessing.

Thank you.

You too.

And we have um uh Bill Kelly.

Or does anybody else want to speak about open space ordinance?

Okay.

If if not, we'll hold till are you speaking about open space?

Okay, we'll hold till uh the the last after the last presentation.

Appreciate all the public comment, and we will move now to our last and final presentation on the East Water Purification Plant.

And we have Deputy Director Samir Solanke.

I see the public works director, Randy Mackay, here as well.

And yeah, do you want to stand or or okay?

Standing's fine.

Let's let's hear about how we're gonna spend these billions of dollars.

All right, good morning, Chair, uh, council members and representatives.

Uh my name is Samir Salonke, I'm the deputy director and chief financial officer for City of Houston Public Works Department.

Let's go on to the next slide.

Today we're gonna talk about the East Water Purification Plant, and we uh uh name it EWPP.

Um we came uh to council with the presentation la April of last year and talked about the East Plant, so this is just a follow-up uh on this.

Let's go to the next slide, please.

So we talked about this before.

The East plant is the backbone of the Houston's drinking water system.

Um it treats majority of the Houston area.

It keeps the medical center, Port of Houston, other things like that downtown uh running.

So it is a significant part and the bloodline for the city of Houston.

Next slide, please.

And if you take a look, originally the plant was built in the 1950s, and it's been plants one and two, and it's been serving the Houston region for over 70 years.

Uh plant three was built in the 1980s, and as you can tell, just from an aging perspective, um it has a lot of deferred maintenance and needs a lot of work.

Next slide, please.

Back in 2021, uh, we had AE Common Engineering firm do a condition assessment and evaluation on the plants.

And when you look at some of these numbers, they're they're quite shocking.

Um less than one percent of assets at all three plants are estimated to be operational in 20 years.

Let me repeat that.

Less than one percent of assets at all three plants are estimated to be operational in the next 20 years.

And this makes it even more challenging considering that this assessment was done five years ago.

So we're moving down the road here.

The majority of the assets were recommended to be replaced five years ago, and this was based on the work in 2021.

So essentially the entire facility is living on borrowed time as assets will most likely continue to fail.

Next slide, please.

The rated capacity for the east plant is to produce about 362 million gallons of water per day.

It's never produced that much.

Average production is roughly about 239 with maximum production at 292 million gallons per day.

That's a significant difference and kind of shows you how much the plants have aged.

Next slide.

The good news is that in your aware, we are proceeding with a new Eastwater Purification Plant.

It's an enhancement project, as well as the rehabilitation of the three existing plants as well.

For the new plant, the decision was made to procure the uh EWPP enhancement project via what's called a CMAR delivery method, and that stands for construction manager at risk.

The CMAR delivery method offers early project delivery and scheduled savings.

Construction inproof from the CMAR during design to reduce risk.

It gives us an earlier cost certainty.

The CMAR has the ability to do a cost model based on the market and allow the design to be adjusted along the way in response to different cost considerations.

This also allows us to increase market interest for major contractors that will show stronger interest when projects are delivered, delivered through a collaborative method such as CMAR.

This will consolidate the existing plan through rehab projects under the CMAR umbrella, and we will request some additional WIFIA funding, and I'll talk about what that is in just a second.

This will allow for more subcontracting opportunities since CMAR will divide up the work into multiple packages and the city has input into that process as well.

Next slide, please.

So we're looking at, well, what are we building?

New facilities.

We're looking at building a 360 million gallon per day facility with that capacity.

It'll be state of the art facilities, similar to the city's Northeast water purification plant.

In addition, existing plan three will also be rehabilitated, and the construction will also be through a CMAR process.

So the combined capacity, with the new being at 360 MGD, and the plan three rehab will provide us with 180 million gallons per day.

The combined cap uh capacity will be at 540 million gallons per day.

This will meet the city's water need demands for the next 40 years.

The existing plants 102 are currently in design to be rehabilitated to sustain us until 2032.

These projects are within our current existing CIP.

So plants one and two will include things like mechanical, electrical, and structural improvements, including high service pump station, chemical feed system improvements, and other things.

We're expecting this infrastructure will last longer than 40 years, uh potentially between 50 and 100 years.

Next slide, please.

And this is sort of an outline of what the current plant looks like.

On the right side, you see plants one and two.

On the bottom uh left, you're looking at the new facility that will uh produce 360 million gallons per day.

And on the top is plant three, which once rehabilitated will produce 180 million gallons per day.

And once we're done, plants one and two will be decommissioned.

Let's move on to the next slide, please.

This is just in calendar overview.

Some of the main things to note is that we are looking at uh 180 million gallons per day to be operational by April of 2032, and then the total 360 million gallons per day uh to be operational by August of 2033, with the final completion slated to be in January of 2034.

We've selected a project advisor technical consultant.

Um pre-construction services start from 2026 to 2028.

The early GMP or the uh gross maximum price packages include equipment procurement, deep foundation work, and other critical path work.

Let's go on to the next slide, please.

So here's the project budget, and these are numbers that you're already familiar with.

Uh, we're looking at again projects one and two.

The estimated CMAR costs of those projects are 2.2 billion and 1 billion respectively.

Then we have city recovery administrative costs, engineering permitting, and things like that, which is about 700 million.

So the opinion currently of the probable project costs is at about 3.9 billion total with the B.

Um, then also we have financing costs and contingencies for budgeting, which we're estimating about 300 million dollars.

So for the total budget for the enhancement, now this is the enhancement for the new plant, is about 4.2 billion.

Um, and I'd mentioned before that we're also working on rehabilitating plant three.

That cost will be about 250 million dollars for that plant.

So the total budget for the enhancement and the rehabilitation for plant three, we're looking at 4.45 billion.

Next slide, please.

So this is the proposed funding structure.

And I'm excited to share that since we have such a great relationship with the Texas Water Development Board.

Uh, we were able to secure 966 million dollars in SWIFT funding, uh, which is very significant.

And not only that, we're doing something a little more innovative this time around.

We're working on the water infrastructure finance and innovation act program through the federal government, or as we call it the WIFIA program.

And we were able to secure a little over $2 billion in financing for this plant as well.

The other funding sources, which will be roughly about $1.176 billion, that will come from a combination of cash and open uh market financing as well.

Then on the plan three CMAR, we were able to secure $123 million in financing, and about $127 million will be again a combination of cash as well as open uh market financing.

We're going to continue to look for new programs for water projects uh that may surface in the later years as well.

Let's go to the funding details on the next slide.

Again, uh TWDB, uh some of you may be aware with some of the benefits on the SWIFT loan, is at a subsidized interest rate, which we enjoy 14% discount for the market rate.

This is very significant because this can add up to tens and tens of million of close to 100 million dollars of savings just because the TWDB subsidies subsidizes these interest rates for us.

Um this is a three-year multi-year commitment to the city of Houston.

Um we have already closed on a $350 million uh loan in November of 2025.

Uh we're looking at closing another $300 million in the fall of 2026, and the balance, which is remaining about $316 million, will be secured on an as-needed basis.

On the WIFIA side, it can finance up to 49% of the total anticipated project cost.

Uh the great part about this is it allows us to defer any payments five years after the substantial completion for the project.

So it gives us a uh a huge flexibility in terms of a payback period.

Um the WIFIA commitment can be used as an appropriation facility as well.

Um and also we were granted a Build America by America waiver, which also has significant cost savings up to 25% for us as well.

And then plan uh three CMAR qualifies uh for WiFIA, which we talked about, which is the 250 million dollars, and it will be out added to the final application once we submit the final application for WIFIA financing.

Let's go on to the next slide, please.

So on the project one, we have a design engineer where the selection has been made, which is CDM Smith, and the 94 million is to provide phase one and phase two services.

The phase three services, uh engineering services during construction will be appropriated separately in the future.

On the project one, CMAR, uh QWIT uh selection was made, and the funding is to provide pre-construction services.

On project uh two engineering design is currently in procurement, and uh we'll come back to counsel uh um as time progresses.

And the project two CMAR is also to be determined, it's currently procurement, and this will provide pre-construction services.

And the project one pre-gross maximum price uh um early packages include deep foundations, procurement, and others, and QWIT was selected for that.

Next slide, please.

So what are the next steps?

Um the WIP we are working on negotiating an award to CMAR and design contracts for project one.

Uh we need to procure, select, negotiate, and award CMAR and designer for project two, and then we're looking to submit the application to WIFIA.

Now the WIFIA process can take up to a year.

Processing has been a bit slow due to the government shutdown.

Um there is hope that this will pick up.

Uh this will be a collaborative effort with finance, the project management team, and our technical advisor Carolo.

We will also utilize Master Masterson Advisors and Bond Council to optimize what the debt structure is going to look like to pay for this project.

And that concludes my presentation.

Open any questions.

Great information, Sameir.

Vice Chair Castillo.

Thank you, Chair.

Thank you very much for the presentation.

You mentioned plant one and two being decommissioned after a certain number of years.

Is there any potential future use for those facilities at all?

You know, uh, and I'm I can let some of the engineers answer this question, but you know, we've done a thorough analysis, and this is the best approach forward is to decommission plants one and two.

Just because of the significant aging of the project.

Well, uh new information.

Actually, uh very recently, as that evaluation has gone through, we're not going to decommission plants one and two.

Samir didn't know about that.

So that's not his fault.

Uh that's very, very fresh for us, but we're we're actually not going to do that.

We do find that there's going to be some value as we go through the rehab efforts there to make sure that in the event of unlikely catastrophes, that there's still some extra uh redundancy and resiliency.

That I appreciate that, and that's one of the things that I was thinking.

If we're putting dollars in now to extend the life, we're only going to extend the life for just a handful of years and then it they go away.

But that's good to know.

Um my other question on slide 10, the targeting completion by 2034.

So what work is currently being done right now at the purification plant so currently, and I'll ask Marcus to step up here.

Currently, as my understanding, we are a couple of things that are going on.

We're looking at um analyzing the the the new facilities, for example.

We're working with our project advisor technical consultant to see how we're going to build out this new facility.

But also at the same time, contemporaneously, we're working on the rehabilitation for plant three, so that and also plants one, two, and three, excuse me.

So that kind of gets us through the timeline where it keeps the plant running until the new facilities are delivered.

So uh Marcus, if you want to jump in really quick.

Thank you.

Yeah.

Currently, uh Marcos Maddisha.

Assessant director, Houston Public Works.

Uh to answer your question, on the rehab side, we are currently designing plant one and two in plant three as well.

And plant one and two is going to be ready for construction sometimes within six months.

That's the timeline for the rehab on the enhancement.

We are going to be negotiating with CDM SMEs, and we are hoping that's going to be on the council next month.

Got it.

So the work, the work that is being done now, is this is this part of the lawsuit that we're in over what's going on with the purification plan?

That is separate.

That is set up.

That's separate, correct.

Okay.

So that doesn't impact this at all.

No.

Got it.

Thank you.

Councilmember Ramirez.

Thank you, Madam Chair.

Uh Director, thank you for the presentation.

Uh I think you all presented last year on the state of this particular project.

Are there any significant changes in your mind from what was presented last year to this year?

No significant changes.

I think uh what we communicated last time, but we have been trying to communicate is the significant need of uh of a new plant and the risk that we're in that stays the same.

And I think we presented a cost structure that said it will be from this to the to this, the cost structure has stayed the same.

Our approach has stayed the same.

There's some you know some um um um other decision making that take place again.

I just found out about plans one and two, it's going to be continue to be operational.

Uh but other than that, no.

Uh uh what we have stated before uh significantness of this project has stayed the same.

And and last year I think there was discussion about possibly coming back to counselor for council for consideration of water rate increases.

Is that is that right?

As far as this plan is concerned, yes.

Uh so we are undergoing a cost of service study right now.

Uh and more than likely this project will increase the cost of service or the rates uh to the ratepayers.

But the good news is this is a long-term project that's slated to be completed by 2034.

And using innovative financing such as WIFIA allows us to structure the financing in such a way so that it doesn't create a rate shock for the ratepayers.

It kind of pushes over a longer period of time.

Okay.

And do you know at what point y'all might come back for for council consideration of that?

So again, this is gonna be based on phases.

So we have, you know, up to the next uh uh three to four years, we're currently doing cost of service study right now, and some of the costs and the financing cost of the Eastwater Purification Plan will be included in this cost of service study.

And I believe we're gonna be coming back to council in 2000 early 2027 to consider a uh new proposed rate structure.

All right.

Yeah, and there's there was discussion earlier about in in our C US we have about 1.3 billion dollars.

Is that correct?

1.3 billion dollars.

Uh and I want to do clarify that.

Uh a lot of that we have internal requirements for cash reserves, we have uh financing that's set aside for bond and debt service payments, and that's what makes up that total amount, yes.

Okay.

And and part of the discussion was that we lack the capacity, in other words, the personnel to spend down that money.

Is that correct or do I have that wrong?

Um not sure if that's the issue.

I think um we we have a holistic plan to address a lot of the needs of the infrastructure within the utility, and that's the plan to do so over the next several years.

And again, it um you know having less personnel that's been an issue across the city.

Um and so we're looking at we've actually been hiring quite a few more people to deliver some of these projects.

But um and also there have been challenges with some of the contractors uh to get on board to do some of the pipe replacement work and things like that, but we're making headway on that, and we're fully committed to delivering those projects over the next several years.

Glad to hear that.

And and I would like to know is any of that 1.3 billion slated for this particular project?

The uh and I would put it this way the the the 1.3 billion, I mean it's a combination of you know, things that are appropriated for different projects that includes consent decree, that includes pipe replacement, various different things within the combined utility system.

Uh and I will tell you that we did it build into the prior rate structure a certain amount for the Eastwater Purification Plant, and we're coming back and building the additional amounts as we have better information.

So there's a portion that's been built in.

All right, I'll go back in the queue.

Did I hear you say early 2027?

You are coming back with the right study, customer service information.

Correct.

We are doing the yes.

Okay.

Councilmember Martinez.

Thank you, Chair.

Um just since we are on that topic.

Um already um constituents have already seen a double increase on their water bill because of the consent decree.

Um we're already attacking a lot of those projects.

I had asked the question a year or so ago.

Now that we're not going to be doing as much uh upgrade, right?

We do still have maintenance.

Will there be a lower uh uh will we would be able to lower the the uh the water the the fee for water?

I was told no.

And now we are looking at another increase.

So uh my hope is that y'all are definitely taking consideration where we are now.

Um and hopefully it's not another double increase on what they have right now, because folks that were paying 30 to 40 are now close to 100 dollars now.

And so those are real concerns that constituents have.

Um the uh the other uh thing I wanted uh uh speak to.

You mentioned that the there is going to be uh packages for subcontractors.

Do you know what that average you know package would probably be, making sure that as subcontractors small businesses that they also have an opportunity to participate?

Um and the other along with that, it would be great for the prime to make sure that they are out and proactively uh having conversations with uh our our subcontractors as well.

Yeah, just to add on that, you know, this is uh uh the CMAR delivery, which is construction manager at risk.

Yes, the contractor is gonna package uh a portion of the work, you know, uh sometimes you know early on the design.

Yes, those packages are going to be out, and the contracting communities have will have the opportunity to be it based on the type and the size of the project.

So it's hard to really kind of put a number to what the average number is going to be, it just depends on the type of work that's being done, the type of work that is needed, and what the subcontracting committee can provide.

So it is hard to say this is what the number is going to be.

But there will be plenty of opportunities for subcontractors to bid on the related work uh to the CMAR.

And I think for me, it's I just want to make sure that uh and I get it, there's mid-level companies as well, but that those very small businesses that can participate, that they also participate, especially if they are Houston base.

Recycling those dollars are important um for me, just to make sure that those are the really the backbone of our communities.

They hire the folks in the neighborhood.

So just want to make sure that we are cognizant of that as well.

Absolutely.

And and Councilmember, let me just add on this.

It is so hard to sit on the edge of the seat, right?

But um uh one of the beauties of the CMAR delivery is that it is actually greatly improves our procurement methodology that will open up the pool to more folks, right?

We we have within the city um some restrictors that make it harder for especially the smaller companies in terms of bond requirements and so forth.

The CMAR, literally the construction manager at risk by taking on some of that risk also is able to make sure that their pool is bigger, and that's been one of the big desires we have had all along.

Is this a great opportunity to get more people engaged in city work, help them cut their teeth?

Uh prove to us, in fact, in a lot of areas that they will be able to do other stuff beyond just these particular projects and and also make sure that the whole thing goes a lot faster.

I appreciate that.

Thank you.

Councilmember Fleckinger.

Thank you.

Kind of picking up on Randy's comments there.

Um I met with a construction company, I think about a year, year and a half ago, and we had a discussion about this project.

And part of the discussion was that this project is so large, there wasn't a lot of companies in the country that were able to do it, especially given the bonding capacity and whether or not they had another project somewhere else.

So whatever help we can get with that, that that would be great.

Um slide number five.

In 2021, we said 48 percent needed to be replaced within five years.

How much has been replaced?

Uh as I mentioned earlier, we have three packages currently in design, and one of the packages approaching to go to construction.

Yes, we have not replaced any uh significant you know equipment yet, but we are on track to do that.

Okay.

So zero has been replaced.

And this isn't, I mean, this goes back to 2021.

So I mean, this isn't all at you know, the doorstep here, but it certainly shows how far behind the eight-ball we are right now.

Yeah, the nature of the procurement takes some time and also the design process takes you know two to two to three years, that's typical.

I think I believe you know we are approaching the to go to construction on one of the packages, yeah.

Okay.

Thank you.

Did he with Mayor Pro Tem's office?

Thank you, Chair, and Chief Solanke, thank you for the presentation.

Mayor Pro Tim, Cassix Tatum is listening online and ask this question.

Um, how will how will the MWBE participation of these billions of dollars uh of allocation?

How will that work?

That is a great question, especially with what is going on in the State.

I think the focus has kind of been a little bit more on the small business enterprise.

Um so there will be a uh I believe a portion of the contra cut.

Portion of the contracts that will be aborted from that perspective.

I can't speak on the NWBE participation because there are so many changes that are happening uh uh directly from the State.

Um I would have to defer that question to SPD uh to get a better information on that.

Okay.

And will you keep her abreast um of the resolution?

Council members.

Thank you.

Councilmember Davis.

Thank you, Madam Chair.

Thank you for the presentation, and it's good to hear that we are moving in a direction with condition of that water plant, uh, though the ones who went out to visit it is definitely in dire straight.

Uh question um, Councilmember um Martinez was asking about the rates, the particular early 27th.

And of course, we do know that water bills and questionable water bill rates is always almost relevant concern.

What is the number listing of businesses that do bottom water?

That's uh that list is approximately how many is it now?

Um I I can well I can tell you that the when the way we look at it is uh where the majority of the revenues are collected.

I can tell you that single family is about 70 percent to 80 percent of the usage um on the on the on the water side, and roughly about 20 percent is the commercial, industrial and other users.

Okay.

20 percent of the industrial side, right?

Correct.

Okay.

So the adjoining areas who use get our water speaking the areas outside of the Houston place, right?

Did they fall in that 20 percent or the 80 percent?

So the we have different um agreements of the folks that are outside uh some of the other cities, League City, other, you know, uh friends with we have a contractual agreement with them, and so there is a different cost structure because they share in the plant.

And so we have a contract in terms of how much uh the cost sharing takes place with those outside entities, if that makes sense.

It is a separate contract.

Okay, it does.

So does that contract run out in a period of time during the construction uh of all of this?

Is those contracts come to an end or close to an end or we may have amendments on those contracts from time to time, but again, I'm gonna give you an example of the Southeast Water Purification Plant.

We have a lot of uh different entities that enjoy it.

So we have a certain percentage ownership in the plant that provides water to the City of Houston, uh, and the other percentage you know provides water to these separate different entities, and that is all based on contractual uh agreements and how the cost is shared for that particular plant.

Um, for the Northeast Water Purification Plant, for example, we enjoy 32 percent ownership in the plant, and so we take 32 percent of the water, the other rest of the cost belongs to the other entities that share in uh uh the water production of that plant.

Okay.

So in the northeast, and then I'll in mind here, the northeast that covers the area where is the cutoff?

Because I know the the east, the one we would visit, that goes all the way west.

Right.

Yeah, the Eastwater plant covers the majority of the city.

How much?

Majority of the I can say 85 percent of the water is correct from Eastwater.

Right.

Nor is primarily providing water to adjacent authorities, North Harris, West Harris, and we do receive uh somewhere around 16 to 20 percent of water from Northeast as well.

Okay.

And I misspoke earlier, I apologize.

I believe the Northeast part we have a 16 percent share in that.

16.

Yeah, 16 percent, not 32, I misspoke.

Okay.

All right.

Good deal.

Thank you.

Thank you.

And and the the beauty of the CMAR right is you get the guaranteed maximum price, right?

And we used a CMAR in the Northeast.

We we use a was it a design build or something.

Did we do design?

What do we do on the Northeast?

Progressive design bill is used for the same thing.

Provide some design bill.

Because that cost kept going up and up and up and up and up.

And and the guaranteed we probably pay a little extra because we're the the this type of contract is is taking on that risk of that guaranteed maximum.

That is correct.

Okay.

It gives us you know uh sort of a certainty of cost as well and um early delivery that outweighs the additional cost.

Right.

And on the chart with the AECOM, kind of along the lines of Councilmember Flickinger's questions, you there has been some work done there in the last five years out at I mean we have approved work, you know, we have approved stuff.

So that but that just wasn't associated with these projects.

It was just like band-aid kind of stuff that we were doing.

There is always band-aid activity within the plant.

Yes, there are some you know active contracts currently going on.

But this had the three packages, plant one, two, and three, those have the project we identified once after this assessment is complete in 2021.

Okay, great.

And Samir, really um proud of you guys for getting the SWIFT loan and how creative you are being on that.

That's that's been such a good program for the City of Houston.

And on the WIFIA, this is a new deal, right?

And it we have it in the bag, but we are still applying for it.

Yeah, we we got some preliminary approvals and commitments from Wi-Fi, and now we just need to go through the formal process of submitting an application.

Okay.

But we we we are counting on that.

Absolutely.

Great.

Um, Councilmember Romares.

Thank you, Madam Chair.

And um so the situation right now is is a bit on the precarious side.

Does the city have a plan uh in case of a failure of this plant?

You know, what would we do in in that event?

That's uh Marcus.

No.

Okay.

No, and I think um, you know, it's important for us to present the financials so that you are all aware of what it is going to cost, but there isn't this is not an optional project like at all.

Uh the risk is if the East plant fails, it's not we have a boil waters, we have no water, right?

That's literally it.

You know, East uh is sixty percent of our daily production everywhere.

It includes the medical center, includes all of industry.

So it is actually not even a Houston problem, it is really actually a national problem because of the impact that you have to industry alone uh across there.

So um the band-aids that we continue to put on there, they're the strongest ones that we can find, and we are as expeditious as we can be.

But uh when folks ask me what keeps me up at night, this is it.

Um literally, this is the one thing that that keeps me up at night.

And so CMAR for us, uh yeah, there's some extra costs, but speed is the name of the game here because we already know that we're starting from behind the curve and we have got to get there as fast as we possibly can.

Um we don't have 10 years to build this.

We're so all haste, and that is the name of the game for us.

Correct.

You know, if we'd have done this 10 years ago, and and a lot of people talked about it, right back then, but um it's a big project, and it is a challenging project, and it's a complicated project.

Well, the time is now, so we're gonna do it.

Yeah, and and I think everybody at this table understands this is not optional.

You know, we we have to do this in as quickly as we can.

So we should all be praying every night that that this uh this holds up.

Um I my understanding is that we might be further along in the design process.

Is that correct?

I wouldn't say that we are further along in the design process.

What I will say is that we are moving at a speed that we have never moved at before.

And and that it is both refreshing, uh, it is exciting, it's a little bit scary, um, but it requires a lot of extra work on this.

Your question previously about, you know, at least to to the existing C US fund balance on capacity.

Yeah, there is still a lot of truth to that, right?

We're in the process that we have got to make sure that we have internal folks that are able to handle portions of the project as they go along.

Marcos can't do it all by himself for sure.

Um that is why, in fact, we split this into two different CMARs, the project being as large as it is.

And we have had a lot of uh conversations about what that would look like.

But um, you know, this is the great opportunity.

You never let a good crisis go to waste.

And for us, that is what this has been.

It is a great opportunity to retool our operations, look at how we approach process, procedure, make sure that we are as efficient as we can be.

We have got the right people, we engage the right partners, we inform all of the stakeholders.

We want to be as ahead of everything that we possibly can be.

And if we do get ahead of schedule, that is wonderful.

But right now, if we can just stay on schedule, I think we will be okay.

Yeah.

And if we do get ahead of schedule in design, would we be able to start construction earlier?

There's a lot of different elements in there, right?

So you could have design completed, but you know, we still have to go through things like permitting with the Army Corps and others.

Some of those things are not totally within our control.

Um, but at any opportunity we have to move ahead, we will take advantage of that opportunity.

I appreciate that.

All right, I'll go back in the queue.

You are in.

It's me.

Okay.

Well, Director Mackay, since you are up.

So you we have been talking about water rates and uh the prospect of additional water rate increases.

And you and I have spoken before about the long-term contracts we have to provide water for folks who live outside the city.

Yeah.

I if I recall, you know, city of 2.3 million residents, but we provide water for more than five million people.

Really, really more than six million.

More than six million.

You know, we have a service area.

If you were to consider how far does Houston water go, so you know, you are looking at 2400 square miles.

It's it's an absolutely enormous area of people that in one shape, form, or fashion receive their water from the City of Houston, whether it's treated or whether it's raw water to another uh you know distributor.

Um we're very sensitive to this particular rate study that's going on right now, and we're having very cautious conversations about some of the expectations, particularly because we know of what the expenses coming up are.

Um in many instances, we're also making sure that we're not just looking at how much we are charging, but how are we charging that to folks, right?

For instance, one of the things that drives me nuts and has bothered me from day one is that I I think it's really difficult for the average uh customer to recreate their bill on their own.

Um the existing formula and the structure in there makes it hard for you to say, well, I use this many gallons, how much is it going to be?

There's an algorithm that you have got to figure out how to process, and sometimes even the online calculator doesn't quite get it right.

We need to take uh advantage of making sure that billing makes sense and it's fair and it's transparent and that we're addressing the right users in the right way, and that includes the Council Member Davis's question, you know, um folks in industry, folks that are commercial, they may not make up a huge portion of the amount of water that they take, but because they take water in such huge volumes at a time, it puts additional strain sometimes on the distribution system itself.

So perhaps there's opportunities for us to do that.

Now that's complicated because a lot of those are individual contracts.

And those contracts are sometimes really long-term, 20, 30 year terms.

But if there's opportunities for the city to make sure that we're not really just floating it for everybody else, especially those that may be in a better position to uh pay for that water, we want to do that while we're especially sensitive to our single family and multifamily residents.

Well, I'm glad you are thinking about that.

I hope we don't get to the point where Houston residents pay more than folks who live outside the city, because I think if you live outside the city, then you should be bearing a c up a portion of this $4.5 billion cost as well.

Um I hope you guys will will keep that in mind.

Certainly.

Um last thing I will cover is so so the low interest loans we are going to get, uh $1 billion or just under $1 billion from the State through the Texas Water Development Board, is that right?

Is that pretty much a sure thing?

Yes.

Okay.

Yes, it is.

And we're again it's a multi-year commitment.

We have already secured the first part of it, and we're closing on the next portion in uh by November.

And then we have the third option, which is going to be on an as in a basis is yes, that is secured.

All right.

And then the WIFIA, which is two billion dollars, that's Federal funding, is that right?

That is correct.

And that is a competitive process, I would imagine.

Yeah, you've got to be able to do that.

You got you've got to go through the process.

Um currently what we have is a a letter of interest that was approved through WIFIA, and so we were invited to uh formally apply for the application.

And so we had to submit a lot of information about the project and things like that before we got approved with the letter of interest.

But my my point is other areas of the of the country probably want the same funding for their water situation.

Yes.

Okay.

And is that a sure thing or not?

It is.

It is we again we have the official letter of interest that was approved.

Now the only next step is just the process of formal application and then looking at when this funding will be applied throughout the life of the project.

Okay, great.

Thank you.

I appreciate everything you all are doing.

Thank you.

Thank you very much.

Uh I know a lot of us have toured out there.

I certainly have, and this is welcome news that we're getting started on all this.

Um we're gonna finish up with public speaking.

I have Doug Smith.

First and foremost, great to see you, Doug.

Good morning, still.

Um questions on the most recent uh presentation that was done here.

I remember coming to these meetings over the last few years and hearing about tons of I mean millions of dollars, maybe billion dollars on the Northeast water treatment plant, and I was shocked to hear we only get sixteen percent of our water from there.

All the rest of it goes to the other entities that we provide water for.

And the question that comes to mind is why were we focusing on that and not focusing on the East plant, which seems to have a lot more problems than uh we would like to deal with.

Uh secondly, the WIFIA says that it's for five years.

Uh and I'm wondering what happens.

It's a five-year loan.

I am wondering what happens after the five years.

That's not addressed uh in in the uh report.

Yes, mayor, I was kind of wondering that too.

If you don't mind answering that, uh we can defer payment for five years and then what?

How is it structured?

And I think that's still being worked out.

And that's a that's a great question.

Um on the WIFIA.

The way it works is you complete your project, let's say you get to a point in substantial completion 2034, for example.

Then it allows us to push our payments, the payments that are due five years, up to five years, and then we pay on the loan over 30 years.

And that's all you all are going to negotiate that repayment up front on how on what those payments will be and all of that.

It just depends on the total load amount that we end up taking out.

So then that will be just a schedule of payments over 30 years.

So it's just that after substantial completion, it gives us a flexibility to push out our payments another five years before we start paying on the loan, which will be another 30 years.

Excuse me, at what interest rate?

Um it depends on the market interest rate at the time.

Um I will tell you that the interest rate environment recently has been going down.

And I pray that it continues to do so, but we will find out as you move uh closer to uh actually taking down that funding.

So that interest rate set at when you start taking down the correct okay, we got it.

Okay.

Uh regarding the discussion came up about the 1.3 billion dollar surplus that the department had, and they talked about how it was going to be used for this, and it's allocated.

Can we get a detailed accounting of how that is allocated at this point?

I think it's important.

Because they they threw out some possibilities of where it had to go, like bond covenants and various things.

Sure.

I think we are required to have a 1.2 debt coverage, right?

And we're at 2.0, 1.2, and we're at 2.0.

But yes, we can work on getting you a breakdown of those.

Again, in that preserve requirement.

Relative to the parks department, some of the other present uh presenters uh mentioned this.

I think that a very detailed, because I've had a developer that I talked to just last week that is concerned about that.

Where did the park dedication fee money go?

I think there should be a detailed report.

Here's how much we got, and here are the various parts or uh things.

Yes, and they did an overview of that in the first time, but we're going to ask for a more detailed presentation on that.

Yes.

And then relative to the MOFAR on page four, uh, I'm curious how did the uh budgeted uh fund balance at the beginning of the year jump 100 billion dollars?

It went from 380 million, excuse me, to 480 million.

Uh what happened uh to that.

I thought I was seeing the the in the MOPA report around.

It's on page 336 or 35 uh the first time.

Well, on page the budget expected was $380 million.

Right.

Uh that was in the 26th budget, and actual projection now is $480 million.

Where did that extra hundred million dollars come from?

Oh, I see what you're saying.

So that's just a question.

Differing from what that what was in their uh letter.

Yeah, we'll get we'll get you an answer on that.

And then uh the last time I was here, I thought I was coming to hear about the DDSRF and it was the stormwater instead.

I still would like to see if we could have a report as to why we end the year with $500 million unspent uh in those accounts.

I heard one comment uh that the uh capacity uh of the department, but if that's the case, then perhaps they need to hire outside contractors to fix all of the water breaks and all of the things that we have.

But I think a detailed presentation on that would be welcome, certainly by me.

Thank you, Doug.

I appreciate your comments.

Uh let me can I say one more thing.

Sure.

Uh uh from your uh report that you sent out.

Uh I was really happy to hear that Tranquility Park is somewhere.

Yes.

We are all thrilled about Tranquility Park.

Thanks.

Yeah.

Okay.

Bill Kelly.

Thank you very much, Chair Alcorn.

I really was appreciative of the presentation on electric prices by the controller's office and thanks uh to Will on that.

My single biggest disappointment from having worked here at City Hall was the policy that our State passed after Winterstorm Ure on uh basically deprioritizing the City of Houston's role in helping ratepayers and being able to fight for those increases.

Recently, Center Point uh submitted a plan for $3.2 billion.

Y'all are dealing with water purification plants, that's in that same ballpark.

Did you guys have a hearing on that?

No.

And it was because Center Point passed legislation that allowed them to go directly to the Public Utility Commission to get that $3.2 billion approved.

Initially, and you can look it up, that plan was $5.7 billion.

How did it decrease?

What were the metrics?

Now, Center Point spent a lot of money putting it on TV and letting you know don't worry, we've got it all taken care of.

But that doesn't help ratepayers, and we're talking about affordability with water rates.

Tina Paez probably has saved Houstonians more money than any other individual because of the work that she does in those rate hearings.

If you hadn't had a chance to sit down with her to be able to talk through what they do uh in fighting for Houstonians on that, again, you saw it was 28% of our bill, right?

It is it is so frustrating to see a for-profit corporation be able to use our money that we pay.

You don't get a choice on whether you have center point or not, right?

It's their our TDU.

They use our money to help pay for those lobbyists to go up and negate our accountability here locally.

It is awful, awful, awful.

And when you talk about real prices and affordability for folks, people remember the generators that they purchased after uh that were completely unused in uh Hurricane Barrel, I believe, right?

Was $800 million.

People don't know that Tina Piaz's team made sure they won in court at our initial rate hearing.

Those were denied reimbursement.

But Center Point then appealed to the state of Texas, and the PUC then decided, nope, that's a good cost.

They're mobile, please.

I just really want to make a point of emphasis when you're looking at electric rates and affordability, that you look at Tina's shop and the outstanding work she has done, and to our center point friends that have passed this legislation that has taken a greater authority away from you on their resiliency planning.

It it is a big, big, big red flag when people don't want accountability, right?

I mean that that that really should come up.

So I I hadn't planned on speaking, but that literally keeps when you talk about keep you up at night on the deal, when you see those electric bills and you see what your TDU cost is consistently doing.

Solar Energy should be a lot more inexpensive than it has been, right?

We we got a fixed rate price in 2020.

We we should have a fixed rate price that that's you know, okay, I get inflation with it, but it shouldn't be going up 90 percent.

When you look at the increase of TDU cost as a percentage of overall cost increase, it is remarkable.

It is remarkable.

So as you're looking at that, if you hadn't had a chance yet to get with Tina to be able to see exactly what they do, highly, highly encourage you to do it.

The amount of money that they have saved is is really remarkable.

So thank you for indulging me on that as um I I really believe this policy needs to change at the state of Texas.

And frankly, want to thank the Houston Chronicle for the coverage that they did on being able to expose how a lot of this stuff worked.

So um thank you very much, Chair Alcorn.

I'll get off my thank you very much, Bill.

Always appreciate your comments.

Any other public speakers?

Okay, seeing none, thank you, colleagues, for hanging in.

And our next uh budget and fiscal affairs meeting will be Tuesday, March 31st.

Not at the beginning of the month, but the end.

March 31st at 10 a.m.

This meeting is adjourned.