6. RESOLUTION REAPPOINTING GARY A. SLAGEL TO THE AGGREGATED POSITION OF REPRESENTATIVE TO THE DALLAS AREA RAPID TRANSIT AUTHORITY (“DART”) BOARD OF DIRECTORS, WHICH FRACTIONAL ALLOCATION MEMBERSHIP IS SHARED WITH THE CITY OF UNIVERSITY PARK AND THE TOWN OF ADDISON.

[6. RESOLUTION REAPPOINTING GARY A. SLAGEL TO THE AGGREGATED POSITION OF REPRESENTATIVE TO THE DALLAS AREA RAPID TRANSIT AUTHORITY (“DART”) BOARD OF DIRECTORS, WHICH FRACTIONAL ALLOCATION MEMBERSHIP IS SHARED WITH THE CITY OF UNIVERSITY PARK AND THE TOWN OF ADDISON. ]

BARRIOS VOTING AGAINST. ALL RIGHT. WE WILL MOVE ON TO ITEM NUMBER SIX, WHICH IS A RESOLUTION REAPPOINTING GARY A SLAGLE TO THE DALLAS AREA RAPID TRANSIT AUTHORITY DART BOARD OF DIRECTORS, WHICH FRACTIONALLY. ALLOCATION MEMBERSHIP IS SHARED WITH THE CITY OF UNIVERSITY PARK AND THE TOWN OF ADDISON. MR. MAGNER, THANK YOU, MAYOR, MAYOR AND COUNCIL. AS YOU WELL KNOW, EVERY OTHER YEAR THIS CONSIDERATION COMES UP BEFORE YOU FOR ACTION. I WILL LET YOU KNOW THAT I HAVE VISITED WITH THE MANAGERS IN BOTH UNIVERSITY PARK AND ADDISON, AND THEY'LL BE TAKING A SIMILAR ACTION AT THEIR COUNCIL MEETINGS HERE IN THE NEXT COUPLE OF WEEKS, AS THE APPOINTMENT NEEDS TO BE SUBMITTED TO DART BY JULY 1ST. THANK YOU. ALL RIGHT. IS THERE ANY DISCUSSION ON THIS ITEM? OKAY, MAYOR PRO TEM HUTCHENRIDER, IF THERE'S NO DISCUSSION, I'D LIKE TO MAKE A MOTION TO REAPPOINT GARY SLAGLE TO THE AGGREGATED POSITION OF REPRESENTATIVE TO THE DALLAS AREA RAPID TRANSIT AUTHORITY BOARD OF DIRECTORS. COUNCIL MEMBER GRIFFIN, I SECOND IT. ALL RIGHT, I I'LL HAVE SOME DISCUSSION ON THIS MOTION. AND IF THERE'S ANY OTHER DISCUSSION, I'M HAPPY TO HEAR IT AS WELL. I WANT TO START OFF BY THANKING YOU, MAYOR SLAGLE. IT'S BEEN A WHOLE LOT OF YEARS THAT YOU'VE BEEN GIVING TO OUR CITY, AND I CANNOT THANK YOU ENOUGH FOR THAT. I HAD TO GO BACK DOWN THE HALLWAY, WHICH I DO ACTUALLY QUITE OFTEN, AND I LOOK AT ALL THE PICTURES OF THE FORMER COUNCIL MEMBERS AND MAYORS AND HOPE THAT SOME WISDOM CAN BE GRANTED UPON ME AS I WALK BY THEM. AND I GET TO WALK BY YOUR FACE, PERHAPS MORE THAN ALMOST ANY OF THE OTHER FACES ALONG THAT STRETCH. BY MY COUNT, 24 YEARS AS EITHER MAYOR OR COUNCIL MEMBER. I DON'T KNOW IF THAT'S UNMATCHED, BUT I BELIEVE IT'S UNMATCHED OR AWFUL CLOSE TO IT. AND I CAN TELL YOU THAT FOR SURE. YOUR FINAL TWO YEARS WERE INCREDIBLY REASSURING YEARS TO A YOUNG COUNCIL MEMBER THAT GOT ELECTED BACK IN 2009, SAT WITH YOU AND TRIED TO DETERMINE WHETHER OR NOT THERE WOULD BE A PLACE FOR AN OVERACTIVE COUNCIL MEMBER TO BE ABLE TO DO SOME FUN THINGS WITH TREES AND OTHER STUFF. AND SO I AM SUPER THANKFUL FOR ALL YOUR SERVICE. THAT'S JUST COUNCIL AND MAYOR 15 YEARS SO FAR AS AS OUR DART REPRESENTATIVE, SOMETHING THAT I GOT AN OPPORTUNITY TO VOTE ON BACK IN 2011 AND WAS PROUD OF AT THAT TIME ASELL. I'M SAYING ALL THIS BECAUSE I WANT TO MAKE SURE THAT IT'S VERY CLEAR THAT MY VOTE AGAINST THIS PARTICULAR ITEM WILL HAVE NOTHING TO DO WITH ANY OF THOSE OTHER ELEMENTS, HAS NOTHING TO DO WITH WHAT I THINK OF YOUR SERVICE, HOW MUCH I RESPECT YOU, AND HOW MUCH I RESPECT YOUR SERVICE. I'LL BE VOTING NO IN THIS PARTICULAR CASE, BECAUSE I BELIEVE THAT THE IMPORTANCE OF TERM LIMITS IS INCREDIBLY CRITICAL, ESPECIALLY AS WE LOOK TO TRYING TO CONTINUE TO BRING UP YOUNGER LEADERS AND OTHER LEADERS TO COME IN AND BE ABLE TO SERVE WITH US AS WELL. AND SO I AM THANKFUL FOR EVERYTHING YOU'VE DONE. YOU ROSE TO THE CHAIR POSITION. YOU SAW THE SILVER LINE THROUGH, AND NOW YOU'LL BE ABLE TO SERVE AS PAST PRESIDENT. SO THANK YOU SO MUCH. OR PAST CHAIR, I SHOULD SAY SO.

THANK YOU VERY MUCH FOR YOUR SERVICE. I SEE THAT COUNCIL MEMBER BARRIOS HAS HIS LIGHT ON, SO I'LL LET HIM SAY WHAT HE NEEDS TO SAY AS WELL. GARY, THANK YOU SO MUCH FOR YOUR SERVICE. I THINK ANYBODY THAT KNOWS YOU AND I PROBABLY CAN REALIZE WE WE WE MAY DISAGREE PROBABLY IN SOMETIMES MORE THAN WE AGREE ON. BUT ONE THING I THINK YOU AND I BOTH AGREE ON IS HOW MUCH WE LOVE THE CITY. AND I HAVE NO DOUBT ABOUT THAT. I HAVE NO DOUBT ABOUT HOW MUCH YOU LOVE RICHARDSON, HOW THE VALUE YOU'VE BROUGHT TO DART. SO FOR THAT I WILL GLADLY VOTE FOR THIS TO TO BECAUSE I THINK YOU'VE YOU'VE BEEN GREAT ON DART AND AS PAST CHAIR, YOU OBVIOUSLY HAVE A GREAT WEALTH OF KNOWLEDGE TO REPRESENT RICHARDSON AND THE OTHER CITIES ALSO INVOLVED. SO THANK YOU FOR YOUR SERVICE, NOT JUST AS MAYOR, BUT ON THE DART BOARD. AND THANK YOU FOR TWO MORE YEARS. APPRECIATE IT. COUNCIL MEMBER JUSTICE. THANK YOU, MAYOR.

MAYOR SCHLEGEL, I'M SUPER PROUD OF WHAT YOU'VE DONE WITH DART. IT'S BEEN A PHENOMENAL GROWTH THAT THE SYSTEM HAS SEEN. THE PART OF THE ARCH WENT UP THIS WEEKEND AND THAT WAS SUPER

[00:25:05]

EXCITING. JUST REALLY, REALLY AMAZING PROGRESS. I'M SUPER GRATEFUL FOR THE WORK ON THE SILVER LINE. I'VE USED IT SEVERAL TIMES, GOING TO THE AIRPORT AND CONNECTING US TO THE WORLD. MY HUSBAND AND I HAD THE OPPORTUNITY TO TRAVEL TO EUROPE EARLIER THIS YEAR, AND I SENT YOU A PICTURE OF US PROUDLY RIDING, RIDING THE SILVER LINE ON THE WAY TO THE AIRPORT BECAUSE IT IS SUCH AN INCREDIBLE ASSET TO OUR CITY. YOU'VE DONE EXACTLY WHAT THIS COUNCIL HAS ASKED OF YOU. YOU'VE RISEN THROUGH THE RANKS. YOU'VE SECRETARY, VICE PRESIDENT, PRESIDENT, AND NOW YOU'RE SERVING AS PAST PRESIDENT. I THINK YOU DESERVE THE THE ABILITY TO SERVE OUT THAT TERM AS PAST PRESIDENT, BECAUSE YOU'VE WORKED REALLY HARD TO GET THERE AND YOU'VE DONE EXACTLY WHAT WE'VE ASKED YOU TO DO. SO I JUST WANT TO SAY THANK YOU, AND I ABSOLUTELY SUPPORT YOUR CONTINUED SERVICE ON THE BOARD. COUNCIL MEMBER CORCORAN. THANK YOU, MAYOR. MAYOR SCHLEGEL, YOU AND I HAD JUST WE'VE BEEN IN THE TRENCHES TOGETHER IN AUSTIN FOR SURE. AND, YOU KNOW, I THINK THAT YOU HAVE SERVED YOUR TIME AS CHAIR WITH WITH GRACE AND AS A STATESMAN AND REALLY WITH WITH A SKILL AND DIPLOMACY THAT I THINK IS STILL MUCH NEEDED ON THE BOARD. YOU STILL HAVE WORK LEFT IN FRONT OF YOU. I'M HAPPY TO VOTE YES, TO HAVE YOU SEE THAT WORK THROUGH. SO I'M EXCITED FOR YOU. THANK YOU. ALL RIGHT. IF THERE'S NO OTHER DISCUSSION. ALL IN FAVOR OF THE MOTION? ANY OPPOSED? ALL RIGHT.

THAT PASSES 6 TO 1 WITH MAYOR OMAR VOTING NO. MOVING ON TO AND THANK YOU FOR YOUR SERVICE AND YOUR CONTINUED SERVICE. MAYOR SCHLEGEL, MOVE ON TO ITEM NUMBER SEVEN, WHICH IS THE

[7. PRESENTATION OF THE URBAN LAND INSTITUTE 2026 INNOVATION IN DEVELOPMENT PRACTICE AWARD TO CATALYST URBAN DEVELOPMENT FOR THE BELT & MAIN PROJECT IN RICHARDSON’S CORE DISTRICT ]

PRESENTATION OF THE URBAN LAND INSTITUTE 2026 INNOVATION AND DEVELOPMENT PRACTICE AWARD TO CATALYST URBAN DEVELOPMENT FOR THE MAIN BELT AND MAIN PROJECT IN RICHARDSON'S CORE DISTRICT.

MR. MAGNER, THANK YOU, MAYOR, MAYOR AND COUNCIL. VERY EXCITED TONIGHT TO HAVE PARIS RUTHERFORD WITH CATALYST URBAN DEVELOPMENT HERE TONIGHT. YOU KNOW, THE WORD PARTNER IS THROWN AROUND AN AWFUL LOT IN MANY CONTEXTS. BUT I WANT TO I WANT TO SAY TO YOU AND TO THE COMMUNITY THAT PARIS AND REESE AND HIS WHOLE TEAM HAVE BEEN TRUE PARTNERS TO THE CITY OF RICHARDSON. MANY PEOPLE DON'T REALIZE THAT THE BELT, THAT MAIN PROJECT THAT NOW IS AT THE CENTER OF OUR REDEVELOPMENT, REALLY STARTED BACK IN 2016. IT WENT THROUGH MANY ITERATIONS.

IT WENT THROUGH SOME UPS AND DOWNS ASSOCIATED WITH THE MARKET AND OTHER FACTORS. BUT TODAY IT STANDS AS A TESTAMENT TO WHAT WE CAN DO WHEN IT COMES TO REDEVELOPMENT AND REVITALIZATION OF OUR COMMUNITY. AND SO I WILL LET YOU KNOW THAT THIS WAS PARIS'S IDEA TO COME TO YOU TONIGHT AND SHARE A LITTLE BIT ABOUT A REALLY, REALLY NEAT RECOGNITION THAT HE RECEIVED. AND SO, PARIS, WE REALLY JUST HONOR AND APPRECIATE THE THE WORK THAT YOU'VE DONE FOR US HERE IN RICHARDSON SO MUCH AND REALLY APPRECIATE YOU REACHING OUT AND, AND OFFERING TO COME AND MAKE THIS PRESENTATION. AND ALSO IF YOU IF YOU CAN, WE'D LOVE TO HAVE YOU INTRODUCE YOUR TEAM THAT'S HERE AS WELL. THANK YOU. ABSOLUTELY. THANK YOU. DON, MAYOR AND COUNCIL MEMBERS, IT'S A PLEASURE TO BE HERE. I'M JOINED BY TIM HERNANDEZ AND LAURA BENNETT OF OUR TEAM. OBVIOUSLY, IT TAKES A BIG GROUP OF PEOPLE TO MAKE A SUCCESSFUL PROJECT HAPPEN. WE'RE ONLY HALF THE EQUATION. YOU ALL AND STAFF ARE THE OTHER HALF, SO I'LL TELL YOU THAT. I'M ALSO HERE ON BEHALF OF TAMALA THORNTON, WHO'S THE EXECUTIVE DIRECTOR OF THE NORTH TEXAS ULI. SHE IS GETTING READY FOR THEIR BIG ANNUAL EVENT, THE BIG CONFERENCE TOMORROW CALLED WHAT'S NEW, WHAT'S NEXT DOWN IN FAIR PARK. SO FOR THOSE OF YOU THAT DON'T KNOW, URBAN LAND INSTITUTE IS REALLY THE THE WORLD'S LEADING INSTITUTE ON REAL ESTATE. IT'S A RESEARCH INSTITUTE THAT PRACTICES BASICALLY WHAT TO DO, RIGHT, IN CREATING ENVIRONMENTS THAT ARE FOR PEOPLE THAT CREATE ECONOMY, THAT CREATE COMMUNITIES AND SO FORTH AND SO ON. THEY'VE BEEN AROUND FOR QUITE A WHILE, AND THEY'RE REALLY THE CREAM OF THE CREAM FROM AN ORGANIZATIONAL STANDPOINT, VERY WELL RESPECTED ACROSS THE WORLD, CERTAINLY HERE IN TEXAS. SO THEY PUT TOGETHER A PROGRAM WHERE THEY CANVAS THE MARKET FOR PROJECTS THAT THEY FEEL BEST EXEMPLIFY THE BEST OF DEVELOPMENT, THE BEST PRINCIPLES OF DEVELOPMENT, THE BEST PARTNERSHIPS IN DEVELOPMENT, BASICALLY CELEBRATING THOSE THAT GET IT RIGHT. AND THIS AWARD WAS GIVEN TO US, BUT ACTUALLY TO YOU ALL AS WELL. AND WE APPRECIATE THE CITY MANAGER AND TEAM COMING DOWN TO BE A PART OF THAT CEREMONY. SO THAT AWARD PROGRAM IS CALLED THE IMPACT AWARD. AND IN THIS CASE, THE CATEGORY IS FOR INNOVATION AND DEVELOPMENT.

AND AS THE CITY MANAGER SAID, THERE WAS A LONG KIND OF ROAD LEADING UP TO THIS MOMENT. AND, YOU KNOW, TAKING AN AREA TOOK VISION ON THE CITY'S PART, PLANNING VISION, THEN DEVELOPMENT SERVICES, VISION TO KIND OF GO FORWARD, WORK WITH US IN THE PRIVATE SECTOR TO

[00:30:02]

COLLECTIVELY REINVEST AND REINVIGORATE THE HISTORIC CENTER OF THE COMMUNITY. SO THAT IS THEIR BELT. AND MAIN IS JUST ONE PHASE OF MULTIPLE. YOU HAVE OTHER PHASES THAT HAVE STARTED, AND WE'RE SUPER EXCITED TO SEE THAT. SO WITH THAT, I WOULD LOVE TO PRESENT TO YOU TO THE CITY THIS AWARD, WHICH IS THE IMPACT AWARD FOR INNOVATION AND DEVELOPMENT PRACTICE BUILT IN MAINE IN THE CORE DISTRICT OF RICHARDSON, TEXAS. AND THIS IS TO THE CITY FROM US AS WELL. THANK YOU, MR. RUTHERFORD. I THINK ANYBODY. YES, MAYOR PRO TEM HUTCHENRIDER PARIS. I JUST WANTED TO SAY I'M ACTUALLY ONE OF THE PEOPLE. I THINK MAYBE I MIGHT BE THE ONLY PERSON ON COUNCIL THAT ACTUALLY CAME TO THE TAVERN ON MAIN WHEN YOU WHEN YOU DID THE ORIGINAL PRESENTATION WAY BACK IN 2016, I MY LUNGS MAY NEVER BE THE SAME, BUT THAT'S A DIFFERENT STORY FOR A DIFFERENT DAY. BUT I'M JUST SO HAPPY TO SEE THAT, YOU KNOW, WE'VE BEEN ABLE TO START THE REDEVELOPMENT. AND I THINK THAT THE BELT AND MAIN. I WAS VERY PROUD WHEN WE TOURED, GOSH, WHENEVER THAT WAS ON THAT SATURDAY MORNING LOOKING AT THE PROJECT. SO I JUST WANT TO SAY THANK YOU VERY MUCH AS TO SOMEBODY WHO SAW IT FROM ITS INFANCY TO ALL THE WAY TO THE IMPACT AWARD TODAY. YOU KNOW, PEOPLE SAY ALL THE TIME, WELL, DOES DO THINGS HAPPEN? DO YOU KNOW? AND SOMETIMES THEY'RE A LITTLE BIT GLACIAL. I'LL BE THE FIRST ONE TO ADMIT IT. YOU KNOW, TEN YEARS. THAT'S A I'M NOT A LIFETIME BY ANY STRETCH, BUT IT'S CERTAINLY A AMOUNT OF AMOUNT OF TIME. BUT JUST VERY PROUD TO SEE THAT, THAT WE WERE ABLE TO SEE IT ALL THE WAY THROUGH. AND NOW WE RECEIVED THIS IMPACT AWARD. SO I JUST WANT TO SAY THANK YOU TO YOU AND YOUR ENTIRE TEAM AND HAVE YOUR TEAM STAND UP. I DIDN'T SEE WHO IT WAS THAT WAS ON YOUR TEAM. SO THANK YOU ALL VERY MUCH. APPRECIATE YOU. SO THANK YOU. YEAH, PARIS, I'LL JUST SAY, AND I THINK WE'RE GOING TO GET AN OPPORTUNITY TO TAKE A PHOTO WITH YOU AND THAT LOVELY AWARD.

BUT IN ORDER TO TEST YOUR STRENGTH AND SEE HOW MUCH LONGER YOU CAN HOLD THAT UP THERE, I'LL JUST SAY THAT I'VE REALLY ENJOYED BEING ABLE TO FREQUENT THE RETAIL ESTABLISHMENTS YOU'VE GOT THERE AT THE BOTTOM. I THINK THEY REALLY ADD QUITE A BIT TO WHAT'S GOING ON DOWNTOWN AND THE VIBRANCY AND EVERYTHING ELSE THAT'S GOING THERE. I KNOW YOU AND I HAVE MET DOWN THERE, AND I JUST REALLY APPRECIATE YOUR HISTORY AND ALL THE THINGS THAT YOU'VE BEEN A PART OF THAT HAVE MADE A DIFFERENCE. AND I'M SO EXCITED ABOUT THE DIFFERENCE THAT YOU'RE ALREADY STARTING TO MAKE DOWNTOWN. SO THANK YOU FOR THAT. AND IF THERE AREN'T ANY OTHER COMMENTS, WE'LL GET A PHOTO WITH YOU, IF THAT'S ALL RIGHT. YEP. KETTLESTEAM COME UP AS WELL. YEAH. THANK YOU VERY MUCH. ALL. YOU GUYS REALLY. CONSTRUCTION. ALL RIGHT. ALL RIGHT. BIG SMILES RIGHT HERE. GIVE US A FEW TIMES. SMILES AND SMILES. PERFECT. THANK YOU. ALL RIGHT. THANK YOU, THANK YOU. LOVING THE AIR CONDITIONING. PROBABLY HASN'T HEARD OF THE HEAT. THAT'S YOU'RE GOOD. YOU'RE GOOD. WELL ALL RIGHT, WE WILL MOVE ON NOW TO ITEM EIGHT,

[8. REVIEW AND DISCUSS A COMPREHENSIVE REVIEW OF THE CITY’S RETAIL WATER AND SEWER RATE STRUCTURE]

WHICH IS TO REVIEW AND DISCUSS COMPREHENSIVE REVIEW OF THE CITY'S RETAIL WATER AND SEWER RATE STRUCTURE. MR. MAGNA THANK YOU, MAYOR, MAYOR AND COUNCIL, VERY EXCITED TONIGHT TO WELCOME DAN JACKSON WITH WILLDAN. AND DAN, IF YOU WOULD BE SO KIND TO ADVANCE ONE SLIDE, MAYOR AND

[00:35:06]

COUNCIL, BEFORE I TURN IT OVER TO DAN, I JUST WANTED TO PROVIDE A LITTLE CONTEXT FOR YOU AND FOR THE COMMUNITY ON WHO WE'RE WORKING WITH. AS YOU CAN SEE, WILLDAN HERE IS ONE OF THE PREMIER RATE ANALYSIS AND STUDY COMPANIES IN THE UNITED STATES. WE FIRST HAD AN OPPORTUNITY TO WORK WITH WILLDAN BACK AROUND 2016 OR SO. AS WE WERE LOOKING AT OUR RATE STRUCTURE AT THAT TIME AND OPPORTUNITIES FOR IMPROVEMENT, THAT QUICKLY EVOLVED INTO, DAN, WHAT WAS PROBABLY A 6 OR 7 YEAR ENGAGEMENT THROUGHOUT THE PUC CASE THAT RICHARDSON, PLANO, MESQUITE AND GARLAND FILED BACK IN DECEMBER OF 2016, DAN AND HIS TEAM WERE AT THE FOREFRONT OF WORKING WITH THE NON-GROWING CITIES, THE FOUR CITIES TO HELP CREATE THE DATA SETS, AND THE ANALYSIS THAT ULTIMATELY RESULTED IN WHAT MANY THOUGHT WAS IMPOSSIBLE, WHICH WAS ELIMINATING THE 50 PLUS YEAR TAKE OR PAY SYSTEM AND CREATING A MODERN, CONTEMPORARY FIVE YEAR ROLLING AVERAGE THAT WILL SAVE RICHARDSON ALONE TENS OF MILLIONS OF DOLLARS IN THE DECADES TO COME. AND SO WHEN YOU GAVE US THIS ASSIGNMENT TO DO A COMPREHENSIVE WATER AND WASTEWATER STUDY, THERE WAS REALLY NO ONE THAT CAME TO MIND OTHER THAN DAN. IN ADDITION TO HIS MBA FROM THE UNIVERSITY OF CHICAGO, DAN IS A PROUD RICHARDSON HIGH SCHOOL GRADUATE.

AND SO WE ALWAYS LOVE WHEN WE HAVE THAT KIND OF A CONNECTION. SO DAN, APPRECIATE ALL THAT YOU'VE DONE TO GET THE PRESENTATION TO PREPARE FOR TONIGHT. I ALSO WANT TO RECOGNIZE BOB AND CAMERON FROM OUR BUDGET OFFICE, WHO'VE BEEN SHEPHERDING THIS WITH DAN AND ERIC ROBISON HERE AS WELL. YOU KNOW, ERIC PRESENTED LAST WEEK OUR CAPITAL PLAN FOR THE FOR THE NEXT FIVE YEARS. AND WE TALKED A LOT ABOUT METERS AND OTHER IMPORTANT THINGS THAT WE'LL TALK ABOUT TONIGHT. AND SO THANK YOU, EVERYBODY FOR BEING HERE. YOU ONLY DO ONE OF THESE STUDIES ONCE EVERY 5 OR 10 YEARS. AND SO WHEN YOU DO, YOU WANT TO REALLY MAKE SURE THAT YOU GET IT RIGHT AND YOU SET THE COURSE FOR THE NEXT DECADE TO BE SUCCESSFUL. SO, DAN, LET ME TURN IT OVER TO YOU FOR FURTHER BRIEFING. THANK YOU VERY MUCH, MAYOR. MEMBERS OF THE COUNCIL, I AM DAN JACKSON, VICE PRESIDENT OF WILLDAN FINANCIAL SERVICES, AND I DO REALLY APPRECIATE THE OPPORTUNITY TO COME BEFORE YOU TONIGHT AND DISCUSS THIS RATHER COMPLICATED ISSUE. YOU KNOW, I VALUE ALL OF MY CLIENTS AND MY 40 YEARS OF DOING THIS, BUT I'M PARTICULARLY PRIVILEGED BEING HERE TONIGHT BECAUSE, AS MR. MAGNER INDICATED, YOU KNOW, I'M WITH RICHARDSON WAS MY CHILDHOOD HOME. I LIVED IN RICHARDSON FOR SEVERAL YEARS, WENT AND GRADUATED FROM RICHARDSON HIGH SCHOOL. AND SO THE OPPORTUNITY TO COME HERE AND GIVE BACK TO THE COMMUNITY THAT I SPENT SO MANY WONDERFUL YEARS OF MY CHILDHOOD AT IS REALLY A PRIVILEGE FOR ME. SO I REALLY APPRECIATE THE CHANCE TO BE HERE TONIGHT. WE WERE ENGAGED ABOUT SIX MONTHS AGO TO DO A COMPREHENSIVE WATER AND WASTEWATER RATE STUDY, AND I'M GOING TO PRESENT TO YOU THE RESULTS OF THAT STUDY TONIGHT AND SOME RECOMMENDATIONS FOR A NEW WATER AND WASTEWATER RATE PLAN GOING FORWARD. I'M GOING TO START BY TALKING A LITTLE BIT ABOUT RATES IN GENERAL, BECAUSE I THINK IT'S VERY IMPORTANT FOR DECISION MAKERS LIKE YOURSELVES TO UNDERSTAND WHAT'S GOING ON IN THE INDUSTRY AND WHAT AND WHAT IS MOTIVATING AND WHAT A LOT OF THE INFLUENCES ARE IN WATER AND SEWER RATES. THEN I'M GOING TO TALK ABOUT YOUR CUSTOMERS AND YOUR VOLUMES AND YOUR COST OF SERVICE. IN OTHER WORDS, HOW MUCH WATER ARE YOU PRODUCING AND HOW MUCH DOES IT COST YOU TO PRODUCE IT? AND THEN I'LL PRESENT TO YOU SOME ALTERNATIVE RATE PLAN SCENARIOS, BECAUSE THERE IS NO ONE RIGHT ANSWER WHEN IT COMES TO WATER AND SEWER RATE DESIGN. YOU CAN HAVE A HUNDRED DIFFERENT RATE STRUCTURES THAT WILL GET YOU THE REVENUES THAT YOU NEED TO FUND YOUR SYSTEM. THE QUESTION BECOMES, WHAT IS THE MOST FAIR, JUST AND REASONABLE RATE PLAN? ANOTHER MOTIVATION OF THIS STUDY IS TO TRY TO ANSWER THE QUESTION, WHY ARE RATES GOING UP? BECAUSE I THINK THAT'S A LEGITIMATE QUESTION. AFTER ALL, WATER IS THE SAME TODAY AS IT WAS, YOU KNOW, 50 YEARS AGO. I MEAN, JUST LIKE IN 1997, IF YOU GO TO YOUR TAP AND TURN THE WATER, YOUR TURN IT ON, WATER IS GOING TO COME OUT OF IT. SO WHY SHOULD IT COST MORE? WELL, THE REASON IS VERY SIMPLE.

WATER IS A BUSINESS. YOU PRODUCE A PRODUCT, YOU KNOW, A, A GALLON, A THOUSAND GALLONS OF WATER IS NO DIFFERENT FROM A MCDONALD'S HAMBURGER OR A GALLON OF GASOLINE OR ANYTHING ELSE. YOU, AS A CITY, INCUR COST IN PRODUCING THIS PRODUCT AND MAKING IT AVAILABLE TO YOUR CITIZENS. AND ALL YOU ARE ASKING YOUR CITIZENS TO DO IS PAY YOU WHAT IT IS COSTING YOU TO PROVIDE THAT SERVICE. YOU ARE NOT. YOU'RE A NONPROFIT ENTITY. YOU'RE NOT IN THIS TO MAKE MONEY. YOU'RE JUST IN IT TO RECOVER YOUR COSTS. AND LIKE ANY OTHER BUSINESS, WHEN COSTS GO UP, YOU'VE GOT NO CHOICE BUT TO PASS THOSE COSTS THROUGH TO YOUR ULTIMATE RATEPAYER. SO I'D LIKE ALL OF YOU TO KEEP THAT IN MIND TONIGHT AS WE GO THROUGH SOME OF THESE NUMBERS. AS I SAID, I WANTED TO START THIS OFF BY TALKING A LITTLE BIT ABOUT THE INDUSTRY IN GENERAL,

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BECAUSE I THINK IT'S A VERY IMPORTANT TOPIC. WATER IS A PRECIOUS, VALUABLE AND DIMINISHING NATURAL RESOURCE. IT IS SOMETHING THAT WE LITERALLY CANNOT LIVE WITHOUT.

HOWEVER, WATER IS BECOMING INCREASINGLY EXPENSIVE, NOT ONLY HERE IN RICHARDSON, BUT ACROSS TEXAS, ACROSS THE UNITED STATES AND ALL ACROSS THE WORLD AS WELL. ONE OF THE REASONS FOR THAT IS THE FACT THAT THERE ARE 7 BILLION PEOPLE ON THE PLANET TODAY. THERE ARE 1 BILLION PEOPLE 100 YEARS AGO, BUT WE HAVE THE EXACT SAME AMOUNT OF FRESH WATER. AND SO FOR THAT REASON, WATER RESOURCES BECOME MORE STRAINED AND MORE EXPENSIVE. OTHER UTILITIES ARE FACING THE SAME PROBLEM. THE AVERAGE WATER AND SEWER UTILITY AROUND THE COUNTRY IS RAISING THE RATES 5 TO 6% EVERY YEAR TO DEAL WITH THESE INCREASING COSTS. AND THE AMERICAN WATER WORKS ASSOCIATION RECOMMEND OR HAS, HAS FORECAST THAT WATER AND SEWER RATES ACROSS THE COUNTRY ARE GOING TO TRIPLE IN THE NEXT 15 YEARS. NOW, THE GOOD NEWS IS THAT THERE WILL STILL BE WATER RESOURCES AVAILABLE FOR US, BUT THE CHALLENGE IS THE FACT THAT IT'S JUST SIMPLY GOING TO BECOME MORE EXPENSIVE. FOR EXAMPLE, YOUR PROVIDER IS NORTH TEXAS MUNICIPAL WATER DISTRICT. THEY PROVIDE ALL THE WATER TO YOU. THEY HAD TO BUILD A NEW LAKE TO SERVICE DEMAND, BUT THE RESERVOIR, IT COST THEM $1 BILLION WITH A B TO BUILD THAT RESERVOIR. BUT THE GOOD NEWS IS IT'S GIVING US A WATER RESOURCE. THE BAD NEWS IS IT'S VERY EXPENSIVE AND SOMEBODY HAS TO PAY FOR IT. NOW, WHY ARE RATES GOING UP? WELL, I ALLUDED TO THAT A LITTLE BIT EARLIER. WELL FIRST OF ALL, COST OF EVERYTHING GOES UP 3 TO 4% A YEAR JUST DUE TO INFLATION. AND, YOU KNOW, AS A BUSINESS, YOU'RE, YOU'RE CERTAINLY NOT IMMUNE TO THE, TO THE PRESSURES OF INFLATION. SECONDLY, IF YOU LOOK AT A WATER SYSTEM, A WATER SYSTEM, YOU HAVE TO INVEST A LOT OF MONEY IN A WATER SYSTEM TO KEEP IT OPERATING PROPERLY.

IT COSTS YOU MILLIONS OF DOLLARS TO BUILD THOSE LINES, BUILD THOSE LIFT STATIONS, AND BUILD THAT NETWORK SO THAT ANY TIME OF THE DAY OR NIGHT, SOMEBODY WANTS TO GO AND TURN THEIR TAP ON OR FLUSH THEIR TOILET, IT WILL HAPPEN. WELL GUESS WHAT? LIKE ANY SYSTEM, IT WEARS OUT OVER TIME. AND SO THE PRUDENT UTILITY HAS TO CONTINUE TO INVEST IN THAT SYSTEM TO ENSURE THAT YOU HAVE A ACCEPTABLE LEVEL OF SERVICE. I WORK FOR SOME UTILITIES THAT HAVE INCREDIBLY LOW RATES, BUT THEY HAVE VERY, VERY LOW RATES BECAUSE THEY'RE NOT PUTTING ANY MONEY INTO THEIR SYSTEM. THEY'RE NOT DOING ANY MAINTENANCE, THEY'RE NOT DOING ANY REPLACEMENT. AND SURE, THEIR WATER RATES ARE LOW. IT'S SORT OF LIKE SAYING, I CAN, I CAN SAVE $100 BY NOT CHANGING THE OIL IN MY CAR. YEAH, YOU CAN, BUT A YEAR LATER, YOUR ENGINE IS GOING TO BLOW OUT. AND SO WHILE KEEPING LOW IS A VALUABLE AND WORTHY GOAL, THE BEST RUN UTILITY CAN PROPERLY BALANCE THE DESIRE TO KEEP RATES LOW WITH THE NEED TO INVEST IN YOUR SYSTEM. AND AS YOU'RE GOING TO SEE FROM THIS RATE PLAN, THIS RATE PLAN WILL ENABLE YOU TO DO A SIGNIFICANT AMOUNT OF INVESTMENT IN YOUR FUTURE SYSTEM. AND ONE FINAL THING. I'M GOING TO SHOW YOU A RATE COMPARISON AND SHOW WHAT PEOPLE HERE IN RICHARDSON PAY COMPARED TO OTHER UTILITIES. BUT WHEN YOU LOOK AT THIS, KEEP IN MIND THAT 30 TO 40% OF UTILITIES IN THE UNITED STATES RIGHT NOW CHARGE RATES THAT DO NOT COVER THEIR COSTS. SO JUST BECAUSE SOMEBODY IN A NEIGHBORING TOWN HAS A RATE THAT IS LOWER THAN YOURS, THAT MIGHT MEAN THAT THEIR THAT THEIR GENERAL FUND IS SUBSIDIZING THEIR WATER AND SEWER FUND. WELL, IT'S NOT ILLEGAL TO DO THAT, BUT THAT'S NOT NECESSARILY GOOD PRACTICE.

SO THAT'S ANOTHER IMPORTANT THING TO KEEP IN MIND. OKAY. WE'VE TALKED A LITTLE BIT ABOUT WHAT'S GOING ON IN THE COUNTRY. NOW LET'S TALK ABOUT RICHARDSON. AND SPECIFICALLY, YOU DID A RATE ADJUSTMENT IN NOVEMBER OF LAST YEAR. LIKE MOST CITIES, YOU KIND OF TRY TO EXAMINE AND AND REVISE YOUR RATES ON AN ANNUAL OR BI ANNUAL BASIS. SINCE THAT TIME, YOU KNOW, INFLATION HAS CONTINUED TO GO UP YOUR YOUR WHOLESALE COSTS ARE ALSO GOING UP BECAUSE AS I SAID EARLIER, YOU BUY ALL YOUR WATER FROM NORTH TEXAS MUNICIPAL WATER DISTRICT, AND YOU SEND MOST OF YOUR SEWAGE TO NORTH TEXAS. ALSO, THEY'RE RAISING THEIR RATES. AND SO WHEN THEY RAISE THEIR RATES, YOU HAVE TO PASS THOSE COSTS THROUGH TO YOUR RATEPAYERS.

YOU'VE GOT A VERY, VERY YOU'VE GOT A COUPLE OF VERY LARGE MANUFACTURERS HERE, AND THEY PLAN ON REDUCING THEIR WATER PURCHASES OVER THE NEXT FEW YEARS. WATER IS A CLASSIC BULK COMMODITY. THE MORE YOU PRODUCE, THE LESS YOU HAVE TO CHARGE TO EVERYBODY. IT DOESN'T COST YOU TWICE AS MUCH TO PRODUCE 2 BILLION GALLONS OF WATER AS IT DOES TO PRODUCE 1 BILLION GALLONS. SO AS YOU SELL MORE WATER, YOU DON'T HAVE TO CHARGE AS MUCH TO EVERYBODY ELSE. BUT UNFORTUNATELY, THE OPPOSITE IS TRUE. ALSO, IF YOU SELL LESS WATER, THEN YOU HAVE TO CHARGE MORE TO EVERYBODY ELSE. AND ONE OF YOUR BIGGEST MANUFACTURERS IS LOOKING AT REDUCING SOME OF THEIR WATER USAGE IN THE NEXT FEW YEARS. AND THEN FINALLY, YOU'RE LOOKING AT ABOUT 80 TO $85 MILLION OF INVESTMENT IN YOUR SYSTEM TO ENSURE THAT THAT THE QUALITY OF SERVICE REMAINS ACCEPTABLE. ALL OF THOSE FACTORS TOGETHER ARE LEADING YOU TO THE NEED TO DEVELOP A NEW LONG TERM RATE PLAN. OKAY. LET'S TALK JUST BRIEFLY ABOUT YOUR RATES RIGHT NOW. HOW DO

[00:45:07]

PEOPLE PAY FOR WATER AND SEWER SERVICE HERE IN THE CITY? WELL, THEY PAY FOR WATER. THEY PAY TWO WAYS. THEY PAY A MONTHLY CHARGE, AND THEN THEY PAY A CHARGE FOR EVERY THOUSAND GALLONS OF WATER THAT THEY USE. YOU HAVE A VERY LOW MONTHLY CHARGE. YOU CHARGE $8 A MONTH AS YOUR BASE CHARGE, AND THEN YOU CHARGE PER THOUSAND GALLONS BASED ON WHAT'S KNOWN AS AN INVERTED BLOC. THE MORE PEOPLE USE, THE MORE THEY PAY. THE INTENT OF THAT IS TO GET PEOPLE TO CONSERVE WATER USAGE BY PROVIDING A FINANCIAL DISINCENTIVE FOR THEM TO USE GREATER AMOUNTS OF WATER. THAT'S EXACTLY WHAT YOU'RE DOING HERE ON THE WASTEWATER SIDE, YOU ALSO HAVE AN $8 A MONTH CHARGE AND A SIMILAR INVERTED BLOCK RATE STRUCTURE AS WELL. KEY QUESTION MOST PEOPLE ASK IS HOW MUCH DO I PAY A MONTH FOR SERVICE? AND HOW DOES THAT COMPARE TO WHAT OTHER PEOPLE ARE PAYING? WELL, THIS CHART RIGHT HERE IS INTENDED TO ANSWER THAT QUESTION. THE AVERAGE RESIDENTIAL FAMILY HERE IN THE CITY USES ABOUT 8400 GALLONS OF WATER AND WASTEWATER SERVICE A MONTH. THAT'S A PRETTY TYPICAL THAT'S FOR A LOT OF OTHER CITIES, BOTH IN THE DFW AREA AND ACROSS TEXAS. SO WHAT WE DID HERE IS WE DID A COMPARISON OF MONTHLY CHARGES FOR 10,000 GALLONS OF WATER AND 5000 GALLONS OF WASTEWATER.

THAT IS A VERY TYPICAL USAGE LEVEL PER MONTH. AS YOU CAN SEE, A RICHARDSON CUSTOMER PAYS $121.35 FOR THAT. NOW, THAT DOESN'T INCLUDE GARBAGE, SANITATION, TAXES, AND OTHER CHARGES THAT SOMETIMES SHOW UP ON UTILITY BILLS. IT'S JUST BASIC WATER AND SEWER SERVICE.

BUT AS YOU CAN SEE, THAT COMPARES VERY FAVORABLY TO A LOT OF OTHER CITIES HERE IN THE YOU'RE A LITTLE HIGHER THAN CITIES LIKE DALLAS AND ADDISON AND ROCKWALL, BUT YOU'RE LOWER THAN MOST OF THE OTHER CITIES IN THE DFW AREA. NOW, THE IDEA OF THIS CHART IS NOT TO SAY, WELL, HECK, OUR RATES ARE LOWER THAN A LOT OF OTHER PEOPLE, SO LET'S GO RAISE THEM. THAT'S NOT THE IDEA. THE IDEA IS TO ANSWER A VERY FUNDAMENTAL QUESTION ARE WHAT WE CHARGE OUR CUSTOMERS HERE IN RICHARDSON DISPROPORTIONATE TO WHAT PEOPLE PAY FOR WATER SERVICE IN NORTH TEXAS? AND CLEARLY THE ANSWER IS NO. YOU'RE RIGHT ABOUT WHERE YOU WOULD EXPECT TO BE. YOU'RE HIGHER THAN SOME. YOU'RE LOWER THAN OTHERS. IN OTHER WORDS, YOU HAVE A VERY FAVORABLE AND YOU HAVE A VERY COMPETITIVE WATER AND SEWER RATE RIGHT NOW. OKAY, LET'S TALK ABOUT YOUR CUSTOMERS REAL BRIEFLY. YOU'VE GOT ABOUT 34,815 CUSTOMERS. TO NO GREAT SURPRISE, THE VAST MAJORITY OF THEM ARE RESIDENTIAL. AND YOU'VE GOT ABOUT 30,000 WASTEWATER CUSTOMERS. YOU HAVE ABOUT 6800 SENIOR ACCOUNTS THAT WOULD QUALIFY AS SENIOR CITIZEN ACCOUNTS. AND WE'LL GET BACK TO THAT STATISTIC A LITTLE BIT LATER. ONE OF THE INTERESTING THINGS ABOUT THE CITY OF RICHARDSON IS WHEN YOU COMPARE ACCOUNTS AND USAGE NOW, WELL, IT'S INTERESTING WATER NERDS LIKE ME, HOPEFULLY IT'S INTERESTING TO YOU TOO, BUT THIS CHART RIGHT HERE SHOWS THE AMOUNT OF WATER THAT THE CITY SOLD HAS SOLD IN THIS PAST YEAR.

THE CITY OF RICHARDSON SOLD 8.5 BILLION GALLONS OF WATER. OF THAT TOTAL, WHILE. WHILE RESIDENTIAL ACCOUNTS ARE 90% OF THE TOTAL, RESIDENTIAL CUSTOMERS ONLY USE 36%. YOUR SPECIAL MANUFACTURERS USED ALMOST A QUARTER OF ALL OF THE WATER THAT YOU PRODUCED AND SOLD, AND YOU HAVE A VERY VIBRANT COMMERCIAL CLASS, TOO. THEY USE ABOUT 37%. SO UNLIKE MANY OTHER COMMUNITIES WHERE RESIDENTIAL USAGE IS PREDOMINANT, YOU HAVE A VERY STRONG NONRESIDENTIAL CLASS. AND THAT'S A FACTOR THAT MAYBE SHOULD BE TAKEN INTO CONSIDERATION. WHEN YOU LOOK AT SOME OF THESE RATE ALTERNATIVES. OKAY, THIS CHART RIGHT HERE IS A FORECAST OF WHAT YOUR WATER USAGE IS GOING TO BE OVER THE NEXT DECADE. NOW, WATER USAGE IS GOING TO VARY BASED ON WEATHER PATTERNS. OF COURSE. OBVIOUSLY IN WET YEARS, PEOPLE ARE GOING TO BUY LESS WATER AND DRY YEARS ARE GOING TO BUY MORE. IT'S IT'S NOT ROCKET SCIENCE.

THE ONLY THING THAT'S CHALLENGING IS FIGURING OUT WHAT YEARS ARE GOING TO BE WET AND WHICH YEARS ARE GOING TO BE DRY. WEATHER FORECASTERS CAN'T EVEN TELL THAT FOR TOMORROW.

NONETHELESS, THE NEXT DECADE. SO WHAT YOU DO WHEN YOU DO FORECASTING IS YOU TEND TO AVERAGE IT OUT. IF YOU LOOK AT THIS CHART HERE, YOU SEE THAT YOU YOU HAD A FAIRLY STEADY ABOUT 8 TO 8.5 BILLION GALLONS OF WATER SOLD. AND THAT'S WHAT WE'RE KIND OF PROJECTING FOR THIS CURRENT YEAR. BUT THAT NUMBER, WE DO THINK IT'S GOING TO DROP A LITTLE BIT IN THE NEXT FEW YEARS AS YOUR COMMERCIAL AND SPECIAL MANUFACTURING CLASS RATCHET BACK THEIR USAGE A LITTLE BIT, THAT IS GOING TO DEPRESS YOUR USAGE A BIT, AND THAT IS GOING TO FACTOR INTO A LONG TERM RATE PLAN. OKAY, WELL, LET'S TALK ABOUT YOUR COSTS. SO WE'VE TALKED ABOUT YOUR CUSTOMERS. WE'VE TALKED ABOUT YOUR WHAT THEY'RE BUYING. NOW LET'S TALK ABOUT HOW MUCH IT'S COSTING YOU TO PRODUCE IT. WELL, WHAT WE'VE DONE FOR THE CITY IS WE HAVE DEVELOPED A TEN YEAR, A 5 TO 10 YEAR FORECAST OF YOUR REVENUES AND YOUR EXPENSES. NOW, A

[00:50:06]

FORECAST IS NOT A GUARANTEE. IT'S A PREDICTION BASED ON A SERIES OF REASONABLE ASSUMPTIONS ABOUT THE FUTURE. SO WHAT ARE SOME OF THE ASSUMPTIONS THAT WE USED IN DOING THIS FORECAST? WELL, OUR FIRST ASSUMPTION IS THAT MOST OF YOUR PERSONNEL AND OPERATING COSTS ARE GOING TO GO UP BY ABOUT 3% A YEAR. COST OF EVERYTHING GOES UP. SO IT'S REASONABLE TO ASSUME THAT THOSE COSTS ARE GOING TO RATCHET UP A LITTLE BIT OVER THE OVER THE YEARS. NOW, THINK ABOUT THE WATER INDUSTRY IS THAT THERE ARE SOME FACTORS, THERE ARE SOME EXPENSES THAT ARE GOING TO GO UP AT A GREATER RATE THAN INFLATION, LIKE CHEMICALS, ELECTRICITY, INSURANCE, WORKERS COMPENSATION. AND SO OUR MODEL HAS THE ABILITY TO FORECAST EVERY SINGLE LINE ITEM IN THE CITY'S BUDGET AND FORECAST. IT'S A RATE OF GROWTH. AND SO WE FACTORED IN THE FACT THAT SOME EXPENSES ARE PROBABLY GOING TO GO UP AT HIGHER RATES THAN OTHERS. NOW, ANOTHER BIG FACTOR IS NORTH TEXAS. NORTH TEXAS MUNICIPAL WATER DISTRICT JUST RELEASED THEIR THE LATEST FORECAST OF WHAT THEIR RATES THAT THEY'RE GOING TO CHARGE TO YOU ARE GOING TO BE. YOU'RE LOOKING AT ABOUT A 9% INCREASE THIS YEAR FROM NORTH TEXAS.

FURTHERMORE, YOU'RE LOOKING AT 12% INCREASES IN 2028 AND 2029. AND SO NORTH TEXAS IS PUTTING YOU ON NOTICE THAT THEY'RE GOING TO BE DOING FAIRLY SIGNIFICANT INCREASES IN THE NEXT FEW YEARS. NOW, IN NORTH TEXAS DEFENSE, THIS IS NOT A SURPRISE. THEY'VE BEEN THEY'VE BEEN SAYING THIS IN THE PAST. THEY'VE BEEN SAYING THAT THEIR COSTS ARE GOING TO GO U BY THIS AMOUNT. AND AS A MATTER OF FACT, THEIR LATEST FORECAST IS A LITTLE LESS THAN WHAT THEY THOUGHT IT WAS GOING TO BE LAST YEAR. BUT IT'S STILL A LOT HIGHER. AND THOSE COSTS HAVE TO BE RECOVERED SOMEHOW. BUT ANOTHER KEY FACTOR IN THIS ANALYSIS IS YOUR CAPITAL IMPROVEMENT PLAN. AGAIN, I CAN'T EMPHASIZE THIS ENOUGH. THE CAPITAL IMPROVEMENTS THAT YOU THAT YOU MAKE ARE GOING TO NOT ONLY BENEFIT YOU, BUT THEY WILL BENEFIT FUTURE GENERATIONS OF RICHARDSON RESIDENTS BECAUSE YOU'RE GOING TO BE BUILDING ASSETS THAT ARE GOING TO BE IN THE GROUND FOR LIKE THE NEXT 50 TO 60 YEARS. YOU PUT A WATER LINE IN THE GROUND, IT'S GOING TO BE THERE FOR THE NEXT HALF CENTURY. AND SO THAT MAKES IT WORTHWHILE FOR YOU TO MAKE THE INVESTMENT NECESSARY TO ENSURE THAT THAT ASSET WILL FUNCTION AT A PROPER LEVEL. AND AS YOU SAID, YOU DON'T YOU DON'T WANT A SITUATION WHERE YOU'RE NOT MAKING THESE REPAIRS BECAUSE YOU COULD END UP WITH A CATASTROPHIC FAILURE AND YOU DON'T WANT THAT AT ALL. THE CITY OF RICHARDSON HAS ALWAYS BEEN VERY AGGRESSIVE IN MAKING THE CAPITAL IMPROVEMENTS THAT ARE NECESSARY TO HAVE A GOOD QUALITY OF SYSTEM. BELIEVE ME, I'VE SEEN ENOUGH CITIES THAT AREN'T TO TELL YOU THAT YOU GUYS DO A VERY GOOD JOB OF THAT, BUT THAT $85 MILLION OF INVESTMENT HAS TO BE ACCOUNTED FOR. AND AS I SAID, THE GOOD NEWS IS IT'S MONEY THAT GOES DIRECTLY BACK INTO THE STREETS AND ALLEYWAYS OF THE CITY OF RICHARDSON. AND AS YOU CAN, OH, I ALSO WANTED TO POINT OUT ON THIS SLIDE THAT IT TOOK ME 12. IT TOOK ME 13 SLIDES TO GET TO A PICTURE OF THIS RICHARDSON HIGH SCHOOL. YOU CAN SEE RIGHT THERE. SO ANYWAY, SO HOW ARE YOU GOING TO DO. WELL OBVIOUSLY YOU DON'T HAVE $85 MILLION. SO WHAT DO YOU HAVE TO DO? YOU HAVE TO GO OUT AND BORROW IT. AND SO WE'RE ASSUMING THAT YOU'RE GOING TO BORROW BETWEEN 15 AND $20 MILLION A YEAR TO BUILD THE CAPITAL ASSETS NECESSARY FOR THE WATER AND SEWER SYSTEM OVER THE NEXT FIVE YEARS. WELL, WHEN YOU BORROW MONEY, YOU GOT TO PAY IT BACK.

AND SO YOU HAVE TO SET RATES AT A LEVEL WHERE YOU WHERE YOU HAVE THE ABILITY TO PAY IT BACK.

AND SO THAT MEANS THAT AS YOU ISSUE MORE DEBT, YOU'RE GOING TO HAVE TO RATCHET UP YOUR RATES A LITTLE BIT MORE. YOU'RE LOOKING AT ABOUT $40 MILLION OF WATER DEBT AND ABOUT $43 MILLION OF WASTEWATER DEBT. NOW, CAPITAL IMPROVEMENT PLANS AFFECT RATES IN THREE WAYS. HOW MUCH YOU HAVE TO SPEND, WHEN DO YOU HAVE TO SPEND IT AND HOW DO YOU FINANCE IT? WE KNOW WE'VE ANSWERED TWO OF THOSE QUESTIONS ALREADY. YOU HAVE TO FIND SPEND $85 MILLION. IT'S GOING TO BE FAIRLY STEADY OVER THE NEXT FIVE YEARS. AND THEN WE'RE LOOKING AT 15 TO $20 MILLION BONDS RIGHT NOW. WE'RE ASSUMING WE'RE TAKING A VERY CONSERVATIVE ASSUMPTION OF A 5% INTEREST RATE. LET'S KEEP OUR FINGERS CROSSED AND HOPE THAT RATES COME DOWN A LITTLE BIT.

THAT COULD CERTAINLY BENEFIT YOU OVER THE NEXT COUPLE OF YEARS. BUT WE IT'S BETTER TO BE SAFE THAN SORRY. AND SO THAT'S WHY WE USE A 5% FACTOR. AND THIS IS NORTH. THIS IS THE FORECAST OF NORTH TEXAS COSTS RIGHT NOW. IT'S THEY'RE CHARGING YOU $4.14 PER THOUSAND GALLONS. THAT AMOUNT IS EXPECTED TO HIT 450 IN 2027. AND AS YOU CAN SEE, IT'S GOING TO RATCHET UP TO ALMOST $8 PER THOUSAND GALLONS BY 2035. NOW, THE GOOD NEWS, AS MR. MAYNOR INDICATED IN HIS OPENING STATEMENT, IS THAT YOUR TAKE OR PAY LEVELS ARE PROJECTED TO COME DOWN OVER THE NEXT 5 TO 10 YEARS, BECAUSE THE WAY IT USED TO BE IS YOU'D HAVE TO PAY, YOU'D HAVE TO YOU'D HAVE TO PAY FOR WATER USED IN YOUR PEAK YEAR. AND SO IF YOU DIDN'T USE THAT MUCH WATER IN A SUBSEQUENT YEAR, YOU STILL HAD TO PAY FOR IT ANYWAY. AND NOW YOU HAVE A

[00:55:02]

NEW SYSTEM WHERE IF YOU DON'T USE AS MUCH WATER, YOU DON'T HAVE TO PAY FOR IT. AND SO THAT'S GOING TO BE PARTICULARLY IMPORTANT FOR THE CITY IN THE NEXT COUPLE OF YEARS. IF YOU START HAVING SOME OF YOUR LARGE MANUFACTURERS CUT BACK THEIR USAGE. THE BOTTOM LINE, THOUGH, IS THAT THE NEW CONTRACT IS GOING TO SAVE YOU A SIGNIFICANT AMOUNT OF MONEY OVER WHAT IT WOULD HAVE BEEN HAD THE CONTRACT NOT BEEN REVISED. THE BAD NEWS IS, IS THAT THE MAGNITUDE OF NORTH TEXAS INCREASES ARE SO MUCH THAT YOU'RE STILL GOING TO HAVE TO DO RATE ADJUSTMENTS TO YOUR RETAIL RATEPAYERS. THIS IS YOUR TOTAL FORECAST COST OF SERVICE.

IT'S COSTING YOU ABOUT $120 MILLION TO RUN YOUR WATER AND SEWER SYSTEM THIS YEAR BY 2035.

WE'RE PROJECTING THAT'S GOING TO HIT ALMOST $200 MILLION. THIS BAR CHART IS BROKEN DOWN INTO OPERATING EXPENSES, WHICH IS BLUE CAPITAL OUTLAYS DEBT SERVICE. BUT THE MOST IMPORTANT ELEMENT IS THAT GREEN PART OF THE BAR THAT'S NORTH TEXAS COSTS. SO YOU CAN SEE NORTH TEXAS IS $77 MILLION TODAY. IT'S EXPECTED TO HIT OVER 135 MILLION BY 2035. SO THAT'S WHY WHEN THEY DO ADJUSTMENTS, YOU HAVE NO CHOICE BUT TO PASS THOSE THROUGH TO YOUR RATEPAYERS. OKAY. LET'S GET TO THE LET'S GET TO THE RATE RECOMMENDATIONS. AS I SAID EARLIER, THERE'S A LOT OF DIFFERENT WAYS THAT YOU CAN DO THIS. RATE MAKING, I'VE OFTEN SAID, IS AS MUCH AN ART AS IT IS A SCIENCE. I MEAN, RATE MAKING IS NOT JUST A FINANCIAL DECISION. IT'S A SOCIAL AND A COMMUNITY DECISION AS WELL. THE MOST FAIR, JUST AND REASONABLE RATE IS THE ONE THAT YOU DECIDE AS A COMMUNITY IS THE MOST FAIR, JUST AND REASONABLE RATE. THAT GIVES YOU A LOT OF LEEWAY TO DECIDE WHAT IS THE BEST POLICY TO IMPLEMENT. SO WITH THAT IN MIND, I'M GOING TO PRESENT TO YOU A COUPLE OF DIFFERENT ALTERNATIVES. I ALSO WANT TO KEEP IN MIND THAT WE'RE NOT ASKING FOR ANY DECISIONS TONIGHT. WE KNOW WE'RE HITTING YOU WITH A LOT OF INFORMATION HERE. AND SO IT'S GOOD. IT'LL BE GOOD FOR YOU TO TAKE SOME TIME TO DIGEST THIS. BUT I WANTED TO INTRODUCE YOU TO OUR WAY OF OUR THOUGHTS. WE SPEND A LOT OF TIME WITH STAFF GOING OVER A LOT OF DIFFERENT ALTERNATIVES. AND WE COLLECTIVELY HAVE SORT OF SETTLED ON THESE THREE DIFFERENT ALTERNATIVES FOR YOU TO CONSIDER. THE FIRST SCENARIO IS WHAT I CALL THE STATUS QUO. IN OTHER WORDS, DON'T MAKE ANY CHANGES TO YOUR RATE PLAN THE WAY YOU THE WAY YOU CHARGE FOR SERVICE. JUST DO A SERIES OF PERCENTAGE INCREASES IN YOUR RATES. OKAY. THE IDEA IS THAT IS THAT WHATEVER SOMEBODY'S RATE IS TODAY, IT WOULD BE X PERCENT MORE NEXT YEAR AND EVERYBODY WOULD HAVE THE SAME PERCENTAGE INCREASE, WHETHER THEY'RE A LARGE COMMERCIAL COMPANY OR A SMALL RESIDENTIAL HOUSEHOLD. SO YOU'RE LOOKING AT UNIFORM PERCENTAGE. WE WOULD RECOMMEND A THREE YEAR RATE PLAN WITH EACH ADJUSTMENT COMING IN NOVEMBER OF OF THE FIRST ADJUSTMENT COMING IN NOVEMBER OF 2026, THE SECOND ADJUSTMENT NOVEMBER OF 2027, AND THE THIRD ADJUSTMENT IN 20 IN NOVEMBER OF 2028. IT WOULD BE AUTOMATIC INCREASES EACH OF THE THREE YEARS. THERE WOULD BE A HIGHER ACTUAL INCREASE TO THE WASTEWATER RATES THAN THERE WOULD BE TO THE WATER RATES.

JUST SIMPLY BECAUSE WASTEWATER RATES ARE GOING UP A LITTLE BIT HIGHER. BUT THE BOTTOM LINE IS THAT ADJUSTMENTS ARE NECESSARY IN ORDER TO FUND ALL THESE ADDITIONAL COSTS. THE AVERAGE RESIDENTIAL USER WOULD SEE A 10% INCREASE IN THEIR WATER AND SEWER CHARGES UNDER THIS PLAN FOR EACH OF THE NEXT THREE YEARS. 10.3% IN 2026, 10.4% IN 2027 AND 10.4% IN 2028. LESSER ADJUSTMENTS ARE FORECAST FOR THE PERIOD AFTER THAT, BUT GIVEN THE MAGNITUDE OF THE CHANGES AND THE CAPITAL IMPROVEMENT PLAN, WE WOULD STRONGLY RECOMMEND THAT AFTER THREE YEARS, YOU REVISIT YOUR RATE PLAN ACCORDINGLY. BUT UNDER THE FIRST PLAN, IT WOULD BE A UNIFORM PERCENTAGE INCREASE. NOW THIS IS THE ACTUAL RATES. I'M NOT GOING TO SPEND A LOT OF TIME ON TRYING TO DIGEST ALL THESE NUMBERS. BUT BASICALLY, AS YOU CAN SEE, YOU DO LIKE A 70 TO 80 CENT INCREASE IN THE $8 MINIMUM CHARGE, AND THEN YOU DO AN INCREASE IN EACH OF THE VOLUME BLOCKS, THE MORE, THE MORE, AND THIS IS THE WASTEWATER INCREASE.

THE WASTEWATER INCREASES WOULD BE A LITTLE BIT HIGHER UNDER THIS SCENARIO. BUT THIS IS THE CHART THAT EVERYBODY NEEDS TO FOCUS ON BECAUSE THIS IS THE IMPACT ON AN AVERAGE CUSTOMER, THAT AVERAGE CUSTOMER WHO USES 10,000 GALLONS OF WATER AND 5000 GALLONS OF WASTEWATER, WHO PAYS $121 FOR SERVICE TODAY, WOULD SEE THEIR BILL GO TO $133 IN NOVEMBER. THAT'S A $12 INCREASE, 10%. THEY WOULD SEE ABOUT A $13 INCREASE IN 2027 AND A $15 INCREASE IN 2028, WITH LESSER INCREASES IN 2029 AND 2030. NOW, COMMERCIAL CUSTOMERS ARE A LITTLE HARDER TO TO TO ILLUSTRATE BECAUSE A COMMERCIAL BUSINESS CAN BE ANYTHING FROM A MOM AND POP FLOWER SHOP TO HOW A SOFTWARE FACTORY. SO, SO IT'S REALLY HARD TO KIND OF SHOW YOU WHAT

[01:00:01]

THE IMPACT IS. BUT THE BOTTOM LINE IS THAT THIS THAT THE 10 TO 11% INCREASE WOULD BE ACROSS THE BOARD FOR EVERYBODY UNDER THIS SCENARIO. OKAY. LIKE I SAID, IT'S AN ART, NOT A SCIENCE. ONE OF THE THINGS ABOUT YOUR RATE PLAN THAT IS THAT I THOUGHT WAS FAIRLY UNIQUE IS THAT YOU HAVE AN INCREDIBLY LOW BASE CHARGE. YOUR, YOUR, YOUR MONTHLY CHARGE OF $8 IS, IS REALLY, REALLY LOW. ALSO, YOU CHARGE THE SAME $8 TO EVERY CUSTOMER, WHETHER THEY'RE A WALMART OR A SMALL FAMILY OR A FLOWER SHOP. SO EVERYBODY PAYS $8 A MONTH AS A BASE CHARGE. THAT'S NOT HOW MOST UTILITIES DO IT. WHAT MOST UTILITIES DO IS THEY CHARGE A BASE CHARGE BASED ON THE METER THAT IS SERVICING THAT PARTICULAR CUSTOMER. MOST RESIDENTIAL CUSTOMERS USE SOMETHING CALLED A THREE QUARTER INCH METER STANDARD RESIDENTIAL METER. WATER GOES THROUGH IT AND AND IT GOES TO THE HOUSEHOLD. BUT IF YOU'RE A LARGE MANUFACTURING FACILITY, YOU'RE USING A SIX INCH METER OR AN EIGHT INCH METER OR A TEN INCH METER. AND THAT IS A HECK OF A LOT MORE VOLUME THAT GOES THROUGH THAT. AND EVERY METER SIZE HAS TO MEET A CERTAIN STATE STANDARD OF CAPACITY IN THE SYSTEM. SO FOR THAT REASON, MANY CITIES IMPLEMENT A HIGHER MONTHLY CHARGE FOR A LARGER METER. NOW THAT $8 A MONTH CHARGE, AS YOU CAN SEE, IT'S FOR WATER CUSTOMERS. IT'S ABOUT THE LOWEST IN THE AREA. MOST MOST CITIES IN THE DFW AREA HAVE A WATER MINIMUM CHARGE OF SOMEWHERE BETWEEN 20 AND $30 A MONTH. YOUR CHARGE IS $8. SO AS YOU CAN SEE, YOU'RE YOU'RE YOU'RE THE LOWEST AROUND FOR THAT ON THE WASTEWATER SIDE. BASICALLY THE SAME THING IS TRUE. DALLAS IS A TAD LOWER THAN YOU AT $7.13. BUT ONCE AGAIN, FOR MOST CITIES THEY'RE THREE QUARTER INCH BASE CHARGE IS SIGNIFICANTLY HIGHER. IT'S 20 TO 30 TO $35 A MONTH. SO THE IDEA OF THIS SECOND ALTERNATIVE IS MAYBE WHAT YOU DO IS A COMBINATION OF INCREASING THAT BASE CHARGE A LITTLE HIGHER AND IMPLEMENTING HIGHER CHARGES FOR LARGER METERS. IF YOU DO THAT, YOU'RE RECOVERING MORE REVENUE FROM THE BASE AND LESS REVENUE FROM THE VOLUME CHARGE. AND WHAT THAT IS GOING TO MEAN IS MANY OF YOUR CUSTOMERS ARE GOING TO PAY A LITTLE LESS UNDER THIS ALTERNATIVE. IF YOU DO THAT, IF YOU IMPLEMENT THIS METER, WHAT WE CALL IT A METER EQUIVALEY CHARGE, IT MEANS THAT YOUR AVERAGE RESIDENTIAL CUSTOMER, INSTEAD OF SEEING A 10% INCREASE, WE'RE ONLY SEEING 8% INCREASE EACH YEAR FOR THE NEXT THREE YEARS. THAT'S BECAUSE WHAT YOU'RE DOING IS YOU'RE PUSHING MORE OF YOUR COSTS ONTO YOUR COMMERCIAL CUSTOMERS UNDER THIS PLAN. IN ADDITION, YOUR, YOU KNOW, YOUR TOP WATER TIER IS GOING TO GO UP A LITTLE BIT HIGHER TOO UNDER THIS PLAN. AND WHAT THAT DOES IS THAT PROVIDES AN ADDITIONAL INCENTIVE FOR PEOPLE TO USE LESS WATER. SO THIS CHART RIGHT HERE SHOWS WHAT THE IMPACT OF IMPLEMENTING THIS CHARGE WOULD BE. LOOK AT THE BASE CHARGE FOR YOUR RESIDENTIAL AND COMMERCIAL CUSTOMERS. IT STARTS OUT AT $8. IT GRADUALLY HITS $20 BY NOVEMBER OF 2030. BUT LOOK AT THE HIGHER METERS. THE HIGHER METERS SEE GRADUALLY HIGHER CHARGES. THAT'S BECAUSE THESE METER THESE CHARGES ARE SET BASED ON WHAT'S KNOWN AS A METER EQUIVALENCY. A TWO INCH METER IS THE EQUIVALENT OF FIVE THREE QUARTER INCH METERS. THE VOLUME THAT GOES THROUGH A TWO INCH METER IS EQUIVALENT OF FIVE THREE QUARTER INCH METERS. SO WHAT MANY CITIES DO IS THEY SET THE MINIMUM CHARGE FOR A TWO INCH METER AT FIVE TIMES WHAT THE MINIMUM CHARGE OF A 5/8 INCH METER IS. AND WHAT THIS DOES IS THIS DOESN'T AFFECT IT IMMEDIATELY, BECAUSE ONCE YOU GET INTO EIGHT AND TEN INCH METERS, WE'RE TALKING ABOUT LIKE 150 TIMES GREATER.

AND SO WHAT WE WOULD RECOMMEND UNDER THIS PLAN IS YOU PHASE IT IN OVER A FIVE YEAR PERIOD, BUT YOU'RE RECOVERING MORE REVENUE FROM YOUR BASE CHARGE AND YOU'RE RECOVERING MORE REVENUE FROM YOUR COMMERCIAL CUSTOMERS. SO YOU RECOVER A LITTLE LESS REVENUE FROM YOUR RESIDENTIAL CUSTOMERS. YOU WOULD DO IT UNDER BOTH WATER AND WASTEWATER. AND AS YOU CAN SEE, THE IMPACT IS YOU'RE STILL GOING TO NEED RATE ADJUSTMENT FOR ALL YOUR CUSTOMERS. I MEAN, THERE'S NO GETTING AROUND THAT. BUT THE RESIDENTIAL RATE WOULD GO UP A LITTLE BIT LESS UNDER THIS SCENARIO. ONLY ONLY INSTEAD OF $12 A MONTH, IT WOULD ONLY GO UP BY $9.63 A MONTH. SO INSTEAD OF 12 TO $13 A MONTH INCREASES EACH YEAR, IT'S ONLY 9 TO $11 A MONTH. SO BUT YOU CAN ALSO SEE THAT THE INCREASES ARE GREATER ON THE COMMERCIAL CUSTOMERS. NOW THE COMMERCIAL CUSTOMERS ARE GOING TO BE VERY WIDELY IMPACTED ON SOME COMMERCIAL CUSTOMERS WHO HAVE FOUR, SIX, EIGHT INCH METERS ARE GOING TO SEE BIGGER INCREASES. AND ONE FINAL THING, IT ALSO GIVES

[01:05:06]

THESE COMMERCIAL CUSTOMERS AN INCENTIVE TO USE A METER THAT'S NO BIGGER THAN WHAT THEY ACTUALLY NEED. BECAUSE YOU KNOW WHAT? IF YOU'RE PAYING $8 A MONTH, NO MATTER WHAT METER SIZE YOU HAVE, HECK, GO OUT AND GET A TWO INCH METER, GET ALL FOUR INCH, GET AN EIGHT INCH METER. WHAT DO YOU CARE? BUT IF YOU'RE PAYING 50 TIMES MORE A MONTH FOR AN EIGHT INCH METER, YOU'RE GOING TO THINK TWICE ABOUT WHETHER OR NOT YOU REALLY NEED AN EIGHT INCH METER. AND IF YOU USE HAVE LESSER METERS, THAT'S LESS CAPACITY THAT THE CITY HAS TO HAVE AND LESS COST TO THE CITY. SO THAT'S INCENTIVE TWO. DAN, IF I COULD JUST I JUST WANT TO REMIND THE COUNCIL AND ERIC PROVIDED SOME GREAT EXAMPLES. IT'S THE CAPACITY THAT WE HAVE TO PROVIDE FOR, BUT IT'S ALSO THE COST OF THAT INFRASTRUCTURE. I MEAN, WE WERE LOOKING AT, ERIC, 30 YEAR PAYBACK AT $8 A BASE RATE FOR SOME OF THE COMMERCIAL METERS. WE WERE LOOKING AT A 30 YEAR PAYBACK. WE'VE ALREADY REPAIRED OR REPLACED THE METER BEFORE WE WE GET TO ANY KIND OF REASONABLE RETURN ON THE INVESTMENT. SO IT'S BOTH THE CAPACITY THAT WE HAVE TO BE MINDFUL OF BECAUSE OF THE METERS, HOW MANY LARGE METERS WE HAVE OUT THERE. BUT IT'S THE ACTUAL COST OF THAT INFRASTRUCTURE. AND HOW DO WE RECUPERATE THAT IN A REASONABLE AMOUNT OF TIME? NOW THERE'S ONE MORE SCENARIO I'D LIKE TO GO OVER REAL, REAL BRIEFLY, AND THAT IS THE POTENTIAL IMPLEMENTATION OF A SENIOR CITIZENS RATE. THIS, ONCE AGAIN, IS SOMETHING THAT MANY CITIES DO. WHAT THEY DO IS THEY PROVIDE A BREAK OR A BENEFIT TO CUSTOMERS THAT QUALIFY AS SENIOR CITIZENS. NOW, WHAT IS THE DEFINITION OF A SENIOR CITIZEN? ONCE AGAIN, IT'S WHATEVER YOU WANT IT TO BE. MOST CITIES IS 65. SOME CITIES IMPLEMENTED AT 60. IT JUST SORT OF DEPENDS ON WHAT POLICY YOU'D LIKE TO DO. AS I INDICATED AT THE BEGINNING OF THIS PRESENTATION, ABOUT 6800 RESIDENTIAL CUSTOMERS IN THE CITY WOULD ARE 65 AND OLDER AND QUALIFY FOR A SENIOR DISCOUNT UNDER YOUR CURRENT SANITATION RATES. AND SO A THIRD POTENTIAL WOULD BE TO IMPLEMENT A SENIOR CITIZEN'S RATE. AND DIFFERENT CITIES DO IT DIFFERENT WAYS. BUT THE MOST COMMON WAY, AT LEAST IN MY EXPERIENCE THAT I'VE SEEN CITIES DO IT, IS WHAT THEY DO IS THEY FREEZE THE BASE CHARGE AT. AND THEY DO NOT INCREASE THE BASE CHARGE FOR SENIOR CITIZENS. SO IT STAYS AT $8 A MONTH IF YOU'RE A SENIOR CITIZEN. THE REASON IS THAT BY AND LARGE, SENIOR CITIZENS TEND TO USE LESS WATER THAN THAN OTHER HOUSEHOLDS. I MEAN, THEY'RE EMPTY NESTERS. THEY'RE OLDER, YOU KNOW, SO THAT, YOU KNOW, IT'S NOT 100% TRUE, OF COURSE, BUT IT IS VERY COMMON. AND SO IF YOU HAVE A LOWER BASE CHARGE FOR THEM THAT CAN BENEFIT THOSE SENIOR CITIZENS. NOW THERE ARE ADVANTAGES AND DISADVANTAGES TO IT. THE ADVANTAGE IS IT GIVES A REAL BENEFIT TO A SENIOR CITIZEN CUSTOMER. THE ONLY DISADVANTAGE IS THAT IF YOU SET IT WHERE ANYBODY WHO'S 65 AND OLDER GETS A BREAK, THEN IF BILL GATES BOUGHT A HOUSE IN RICHARDSON, YOU KNOW, HE'D GET THE SENIOR CITIZEN RATE. SO THERE ARE, YOU KNOW, THERE ARE ADVANTAGES AND DISADVANTAGES OF EVERY SINGLE RATE STRUCTURE. BUT UNDER THIS SCENARIO, WHAT WE'VE DONE IS WE HAVE WE HAVE ASSUMED THAT YOU FREEZE THE $8 SENIOR CITIZEN, $8 MINIMUM CHARGE FOR SENIOR CITIZENS. THE VOLUME RATES WOULD STILL BE THE SAME FOR EVERYBODY. NOW, THE OTHER THE IMPACT OF THIS IS THAT THERE'S A VERY SIMPLE PRINCIPLE. IF YOU GIVE A BREAK TO ONE GROUP OF CITIZENS, YOU HAVE TO CHARGE A LITTLE BIT MORE TO OTHER CITIZENS. SO IF YOU DID THAT, YOU WOULD HAVE A SLIGHTLY HIGHER RATE ADJUSTMENT FOR YOUR REMAINING RESIDENTIAL CUSTOMERS INSTEAD OF A 7.9, LIKE INSTEAD OF A 7.9% INCREASE, YOU'RE LOOKING AT LIKE 8.3%. SO IT'S ABOUT A HALF PERCENT HIGHER FOR YOUR OTHER RESIDENTIAL CUSTOMERS EACH YEAR. IF YOU DID IMPLEMENT THIS SENIOR CITIZENS RATE, THIS IS THIS IS THE RATE DESIGN. IT'S VERY SIMILAR ON WATER, A LITTLE HIGHER ON WASTEWATER. AND HERE IS THE SENIOR RATE. IF YOU'RE A SENIOR CITIZEN AND YOU HAVE A THREE QUARTER INCH METER, YOU WOULD PAY AN $8 RATE. BUT IF YOU'RE A SENIOR CITIZEN, YOU HAVE A LARGER METER. YOU WOULD PAY THE SAME RATE AS EVERYBODY ELSE. BECAUSE THE THEORY IS, IF YOU'RE A SENIOR CITIZEN, YOU'VE GOT A LARGER METER. YOU PROBABLY DON'T. YOU KNOW, YOU'RE A LARGE WATER USER. AND SO THE CITY HAS AN INCENTIVE TO ENSURE THAT YOU ARE USING WATER IN A PRUDENT MANNER. AND SO THEREFORE, YOU WOULD PAY THE SAME AS OTHER RESIDENTIAL CUSTOMERS. SO LIKE I SAID, THERE'S A LOT OF DIFFERENT WAYS THAT YOU CAN DO THIS, A LOT OF DIFFERENT WAYS TO CUT TO, TO CUT THIS. AND SO THESE ARE THE THREE ALTERNATIVES THAT WE HAVE PROVIDED TO YOU. AS YOU CAN SEE, IF YOU IMPLEMENT A SENIOR CITIZEN CUSTOMER AND YOU'RE A SENIOR CUSTOMER WHO ONLY USES 3000 GALLONS A MONTH, AND THAT'S NOT UNCOMMON FOR, FOR, FOR A SENIOR COUPLE LIVING AS EMPTY NESTERS, THEN THEIR RATE ADJUSTMENT WOULD ONLY BE 5% A YEAR. IT'S STILL AN ADJUSTMENT, BUT IT'S LESS THAN 8%, AND IT'S CERTAINLY LESS THAN 10%. BUT THE OTHER CUSTOMERS WOULD SEE A NOMINALLY HIGHER INCREASE. SO THAT'S THE THAT'S THE CALCULUS YOU LOOK AT IN COMPARING THESE DIFFERENT ALTERNATIVES. SO I JUST WANT TO JUST I'M JUST

[01:10:06]

ABOUT I'M JUST ABOUT DONE WITH THIS. SO I'M SURE EVERYBODY'S HAPPY TO HEAR THAT. BUT I JUST WANT TO PROVIDE JUST A COUPLE OF OTHER SUMMARIES HERE. THIS IS A COMPARISON OF A 3000 GALLON USER UNDER EACH OF THE SCENARIOS. AS YOU CAN SEE, IF YOU'RE A 3000 GALLON USER, YOU KNOW, YOU'RE, YOU'RE, YOU'RE INCREASE IS GOING TO BE ABOUT THE SAME UNDER ANY SCENARIO, EXCEPT IF YOU'RE A SENIOR CITIZEN. AS YOU CAN SEE, THE, THE BROWN BAR IS THE SENIOR CITIZEN RATE. AND AS YOU CAN SEE, THEY, THEY GET A GENUINE BENEFIT. I MEAN, BY, BY 2029, THEY'RE PAYING ABOUT $12 A MONTH LESS THAN A CUSTOMER WHO USES 3000 GALLONS A MONTH WHO IS NOT A SENIOR CITIZEN. SO THERE IS DEFINITELY A BENEFIT THERE. IF YOU'RE A 10,000 GALLON USER, YOU CAN SEE THAT THE GRAY BAR IS SCENARIO ONE, THE STATUS QUO. IT'S THE HIGHEST RATE. SCENARIOS TWO AND THREE ARE PRETTY SIMILAR. YOU CAN SEE THAT THERE. YOU KNOW, IT IS LESS THAN SCENARIO ONE, BUT TWO AND THREE ARE PRETTY MUCH EQUIVALENT. THERE'S ONLY, YOU KNOW, THERE'S, I MEAN, THERE'S BARELY A DIFFERENCE BETWEEN THE TWO LESS THAN A DOLLAR. BUT IF YOU'RE, BUT IF YOU'RE A SENIOR CITIZEN WHO USES 10,000 GALLONS, YOU ONCE AGAIN GET A BREAK. IF YOU'RE A COMMERCIAL CUSTOMER, YOU CAN SEE THAT THERE ISN'T REALLY AS MUCH OF A DIFFERENCE BETWEEN THE THREE SCENARIOS AS YOU THINK THERE MIGHT BE. IT ALL DEPENDS ON WHAT SIZE THE METER THE COMMERCIAL CUSTOMER IS, AND THERE'S A WHOLE BUNCH OF DIFFERENT METERS THAT THEY'RE OUT THERE. SO IT'S REALLY, REALLY HARD TO GIVE YOU A STRAIGHT COMPARISON ON WHAT THE IMPACT IS GOING TO BE ON COMMERCIAL CUSTOMERS. IN EACH OF THESE SCENARIOS ALLOW YOU TO MEET YOUR BASIC FINANCIAL STANDARDS, ONE OF WHICH BEING A 90 DAY OR GREATER FUND BALANCE. SEE, THAT'S THE THING ABOUT RATE DESIGN. I MEAN, THESE RATE DESIGNS ARE ALL WHAT WE CALL REVENUE NEUTRAL. THEY'RE ALL DESIGNED TO TO RECOVER ABOUT THE SAME AMOUNT OF REVENUE. THE DECISION YOU AS A COUNCIL HAVE IS WHO DO YOU GET THE REVENUE FROM? AND THAT COMES DOWN TO WHAT THE DIFFERENT SCENARIOS TURN OUT TO BE. FINALLY, ONE QUESTION THAT WAS ASKED WAS, WHAT IF WE JUST DID A 5% INCREASE ACROSS THE BOARD EACH YEAR? HECK, 5% IS GREATER THAN INFLATION. WELL, UNFORTUNATELY, 5% JUST ISN'T GOING TO BE GOOD ENOUGH, PARTICULARLY IF YOU WANT TO ISSUE $80 MILLION IN DEBT. IT'S NOT GOING TO ALLOW YOU TO ISSUE THAT DEBT, AND IT'S NOT GOING TO ALLOW YOU TO MEET ALL OF YOUR EXPENSES. SO I KNOW IT'S NOT EASY TO ASK RATEPAYERS TO PAY MORE, BUT IT IS NECESSARY NOT ONLY TO FUND THE WATER AND SEWER SYSTEM, BUT ALSO TO CONTINUE TO PROVIDE A SUPERIOR LEVEL OF SERVICE HERE FOR THE CITY. DAN, IF YOU COULD JUST PAUSE THERE FOR A SECOND. KENT B B PLEASE ADD ON IF YOU WANT. SO I ASKED THIS QUESTION. WE'VE BEEN HOVERING AROUND THAT 5% AND TRYING TO MAKE THAT WORK FOR THE LAST SEVERAL YEARS. 2027, THE BOND RATING AGENCIES START TO GET VERY NERVOUS, START TO KIND OF REALLY QUESTION, HOW DO YOU LOSE 20 DAYS OF FUND BALANCE IN ONE YEAR BY 2028? PROBABLY OUR TRIPLE A BOND RATING IS PROBABLY IN JEOPARDY BECAUSE YOU'VE ESSENTIALLY EATEN AWAY AT HALF OF YOUR FUND BALANCE. SO AND THAT'S WITH A 5% YEAR AFTER YEAR INCREASE IN THE RATES. AND SO WHAT DAN IS, IS DEPICTED HERE IS EXTREMELY IMPORTANT. I MEAN, I'M READING SOME OF THE BODY LANGUAGE. I'M READING SOME OF THE BODY LANGUAGE IN THE IN THE AUDIENCE. THIS IS NOT A GOOD MESSAGE WHAT WE'RE SHARING WITH YOU, BUT IT IS AN ESSENTIAL MESSAGE THAT WE HAVE TO TAKE VERY, VERY SERIOUSLY BECAUSE THIS CHANGES A LOT OF DIFFERENT THINGS FROM FOR OUR CITY WIDE FINANCES. IF WE GO IN A ROUTE LIKE THIS. I JUST WANT TO WRAP UP MY PRESENTATION BECAUSE I'M JUST ABOUT TO MY LAST SLIDE JUST BY SAYING THAT, AS I SAID EARLIER, IT'S NEVER EASY TO ASK ANYONE TO PAY MORE FOR A SERVICE.

NOBODY WANTS TO PAY MORE FOR ANYTHING AT ANY TIME, FOR ANY REASON. BUT AS I'VE TRIED TO INDICATE IN THIS PRESENTATION, THERE ARE BENEFITS TO THE CITY OF IMPLEMENTING THIS PLAN. YOU MIGHT SAY, WHAT WHAT POSSIBLE BENEFIT COULD THERE BE FROM RAISING WATER AND SEWER RATES? WELL, ONE BENEFIT IS THAT IF YOU DO THIS, YOU WILL ENSURE THAT YOUR RATES ARE COVERING ALL THE COSTS YOU'RE INCURRING. THESE COSTS ARE GOING TO BE INCURRED BY YOU, WHETHER YOU RAISE YOUR RATES OR NOT. AND SO ALL YOU'RE ASKING YOUR RATEPAYERS TO DO IS REIMBURSE YOU FOR THE COSTS THAT YOU ARE INCURRING. YOU ARE NOT MAKING MONEY OFF OF THIS SYSTEM. YOU ARE NOT MAKING A PROFIT. YOU'RE NOT PAYING STOCKHOLDERS DIVIDENDS OR ANYTHING LIKE THAT.

ALL YOU'RE TRYING TO DO IS RECOVER YOUR COSTS. SECONDLY, YOUR HAND HAS BEEN FORCED BY NORTH TEXAS. NORTH TEXAS IS DOING 9 TO 12% RATE INCREASES EACH YEAR FOR THE NEXT THREE YEARS. THEY'RE GOING TO DO IT WHETHER YOU RAISE YOUR RATES OR NOT. THIRD, IF YOU DO THIS, YOUR FUND BALANCE WILL CONTINUE TO BE VERY HEALTHY. YOU HAVE A HEALTHY FUND BALANCE. YOU'VE GOT A STRONG FINANCIAL UTILITY RIGHT NOW, BUT STRONG UTILITIES CAN BECOME WEAK VERY QUICKLY IF THESE COSTS ARE NOT STAYED ON TOP OF. AND FINALLY, AND PROBABLY MOST IMPORTANTLY, IF YOU IMPLEMENT THIS, IT WILL ENABLE YOU TO DO $84 MILLION OF INVESTMENT IN THE FUTURE OF THE

[01:15:05]

CITY OF RICHARDSON. NOW, I'VE, I'VE DONE A LOT OF THESE PRESENTATIONS, AND I'VE NEVER HAD ANYBODY COME UP TO ME AFTERWARDS AND SAY, THANK YOU FOR RECOMMENDING THAT WE RAISE OUR RATES. BUT WHAT I HAVE HAD IS PEOPLE SAY, I DON'T LIKE IT, BUT I UNDERSTAND WHY IT NEEDS TO BE DONE. AND THIS IS AN UNFORTUNATE BUT INEVITABLE FACT OF LIFE. SO I JUST HAVE THIS FINAL CHART RIGHT HERE THAT I JUST I'LL JUST LEAVE UP HERE THAT HAVE JUST THAT OUTLINE, SORT OF THE ADVANTAGES AND THE DISADVANTAGES OF EACH OF THE SCENARIOS. TO RECAP, IF YOU DO THE STATUS QUO SCENARIO, JUST RAISE EVERYBODY'S RATES THE SAME AMOUNT. THE ADVANTAGE IS THAT EVERYBODY GETS THE SAME PERCENTAGE. INCREASE. YOUR BILLING METHODOLOGY REMAINS CONSISTENT. PEOPLE ARE FAMILIAR WITH IT. THE CHALLENGE IS THAT IT IS. IT MEANS YOUR RESIDENTIAL RATEPAYERS WILL PAY MORE UNDER THIS SCENARIO THAN THEY DO UNDER ANY OTHERS. AND ALSO YOU WILL CONTINUE TO UNDER RECOVER FROM YOUR COMMERCIAL CUSTOMERS. IF YOU GO WITH SCENARIO TWO, THE METER EQUIVALENCY, THAT THE ADVANTAGES ARE THAT IT'S CONSISTENT WITH WHAT MANY, MOST, IF NOT ALL OTHER UTILITIES DO. IT'LL HAVE MORE GUARANTEED REVENUE BECAUSE YOU'RE GETTING MORE MONEY FROM FIXED CHARGES, AND IT LESSENS THE IMPACT ON YOUR RESIDENTIAL CUSTOMERS, THE DISADVANTAGES THAT CERTAIN COMMERCIAL CUSTOMERS ARE GOING TO SEE HIGHER INCREASES AND CERTAIN LOW USE RESIDENTIAL CUSTOMERS MIGHT SEE A NOMINALLY HIGHER INCREASE. ALSO, IN THE THIRD SCENARIO, ALL THE SAME, ALL THE SAME BENEFITS OF SCENARIO TWO, WITH THE BENEFIT OF DOING EVERYTHING YOU CAN TO LESSEN THE IMPACT ON YOUR SENIOR CITIZENS. BUT THE BIG CHALLENGE OF SCENARIO THREE IS THAT IT MEANS THAT YOU HAVE TO HAVE A NOMINALLY HIGHER INCREASE FOR RESIDENTIAL CUSTOMERS. SO THOSE ARE THE SCENARIOS WE'VE OUTLINED. I REALLY APPRECIATE YOUR YOUR PATIENCE AS I DRONE ON THROUGH ALL THIS, AND I'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE AT THIS TIME. MAYOR, IF YOU DON'T MIND. JUST TWO QUICK THINGS. ONE, I JUST WANT TO REMIND YOU OR ERIC OR CHARLES CAN REMIND ME THE EXACT NUMBER, BUT THE $83 MILLION IS A REDUCTION OF $20 MILLION OVER THE FIVE YEARS VERSUS WHAT WE HAD ORIGINALLY PLANNED. AND SO WE HAVE WE HAVE REDUCED OUR PROPOSED DEBT PLAN FOR THE NEXT FIVE YEARS BY JUST SHY OF 20% ALREADY. WHAT YOU SEE IN THAT DEBT PLAN IS LARGELY DRIVEN BY THE PROGRAM THAT'S BEEN MANDATED UPON US BY THE EPA, AS WELL AS CRITICAL WATER FACILITY PROJECTS, AS WELL AS WATER AS DESCRIBED. SO THE THE. I BELIEVE THAT REDUCING THE DEBT, REDUCING THE DEBT PLAN ANY FURTHER WOULD BE REALLY GETTING INTO A LEVEL OF CUTS THAT I DON'T THINK WE WOULD BE COMFORTABLE WITH. THE SECOND THING, DAN, IF YOU COULD JUST MENTION THIS, I KNOW THERE'S BEEN A QUESTION ABOUT OUR. IS OUR RATE STRUCTURE A CONSERVATION ORIENTED. AND DAN, IF YOU COULD MENTION IN SCENARIOS TWO AND THREE HOW THE HIGHEST. THE INCREASES FROM CATEGORY TO CATEGORY START TO DISPROPORTIONATELY GET LARGER FOR THE LARGEST USERS. YES. YEAH. YEAH THEY DO. YOU CAN SEE FROM THIS RIGHT HERE, YOU KNOW, EVEN EVEN UNDER THE SCENARIO THREE, WITH THE SENIOR RATES, YOU CAN SEE THE HIGHEST BLOCK AT 60,000 GALLONS. AND ABOVE YOU SEE THOSE INCREASES ARE SIGNIFICANTLY LARGER THAN THEY ARE FOR THE OTHER CLASSES. THE ONLY A VERY, VERY SMALL PERCENTAGE OF YOUR CUSTOMERS USE MORE THAN 60,000 GALLONS A MONTH. VIRTUALLY NO RESIDENTIAL CUSTOMERS USE MORE THAN THAT. I MEAN, I'M SURE THERE ARE A FEW, BUT YOU KNOW, IF THERE'S MORE THAN 50, I'D BE SURPRISED. BUT THESE ARE MOSTLY COMMERCIAL CUSTOMERS. AND ONCE AGAIN, INVERTED BLOCK RATES LIKE THIS ARE VERY SUCCESSFUL IN GETTING PEOPLE TO LIMIT WATER USAGE.

BECAUSE IF YOU KNOW, YOU'RE GOING TO HAVE TO PAY DISPROPORTIONATELY MORE, IF YOU USE MORE WATER, MAYBE Y'RE ONLY GOING TO WATER YOUR LAWN TWICE A WEEK INSTEAD OF FOUR TIMES A WEEK. YOU KNOW, MAYBE YOU'RE GOING TO GET YOUR LEAKS FIXED. MAYBE YOU'RE GOING TO DO WHAT YOU CAN TO CONSERVE WATER USAGE. SO YES, WE HAVE TRIED TO BUILD THAT INTO THE RATE PLAN.

I THINK ABOUT REMIND ME IF I SAY THIS WRONG, BUT FROM THE SECOND HIGHEST TO THE HIGHEST RANGE NOW IS ABOUT 5%. IT GROSSED ALMOST 25%. IS THAT RIGHT, BOB? RIGHT. SO IT'S A IT'S REALLY STARTING TO IMPACT THE HIGHEST USERS AND TRYING TO INCENT SOME CONSERVATION ON THEIR PART. THE LAST THING I'LL SAY BEFORE, AND DAN'S ABSOLUTELY RIGHT, WE'RE NOT ASKING FOR ANY KIND OF DECISION TONIGHT. OUR RECOMMENDATION IS, IS, IS OPTION THREE. STAFF'S RECOMMENDATION IS OPTION THREE. BUT WE WOULD REALLY LIKE TO DO IS ANSWER QUESTIONS, SEE IF THERE ARE ANY ADDITIONAL HOMEWORK ITEMS. I PLAN ON SETTING THIS FOR YOUR JUNE 22ND MEETING. WE HAVE A LOT OF IMPORTANT WORK TO DO IN ADVANCE OF YOUR BUDGET RETREAT, WHICH IS THE FIRST MONDAY AND TUESDAY IN AUGUST. IN ADDITION, ANY DIRECTION THAT YOU WOULD GIVE

[01:20:01]

US WITH RESPECT TO A METHODOLOGY, WE NEED TO BEGIN, YOU KNOW, BY BY THAT MID-JULY, AUGUST TIME FRAME IN PROGRAMING THAT SO THAT WHEN NOVEMBER BILLS GO OUT, WE'RE CERTAIN THAT THE METHODOLOGY IS, IS, IS BEING APPLIED APPROPRIATELY. AND SO THOSE ARE KIND OF OUR, OUR DRIVERS FOR YOUR DECISION. BUT AGAIN, NOT LOOKING FOR A DECISION TONIGHT, REALLY WANT TO ALLOW YOU TO REFLECT ON THIS FOR A COUPLE OF WEEKS. IF WE NEED TO DO BRING BACK ADDITIONAL INFORMATION, WE'LL DO THAT. BUT LOOKING TO SET IT AGAIN FOR JUNE 22ND FOR A FOLLOW UP AND HOPEFULLY THEN A CONSENSUS. ALL RIGHT. WE'LL START WITH COUNCILEMBER DORIAN. THANK YOU. THANK YOU, MAYOR. MR. JACKSON, THANK YOU FOR THE PRESENTATION. THAT WAS VERY, VERY INFORMATIVE, AND I APPRECIATE THAT. IT HELPED ME UNDERSTAND IT SO MUCH BETTER. I HAVE TO AGREE WITH YOU. I DON'T THINK ANYONE WANTS TO SEE AN INCREASE IN UTILITY RATES ACROSS THE BOARD, BUT IT'S INEVITABLE THAT WE TAKE CARE OF OUR INFRASTRUCTURE. AND, YOU KNOW, ALSO I WANT TO SAY THAT I FEEL LIKE THIS ALSO BRINGS MORE ATTENTION TO THE SUSTAINABILITY ASPECT THAT WE ALWAYS PUSH FOR DEVELOPMENTS AND INFRASTRUCTURE AND INFILL AS WE MOVE FORWARD, AS IF PEOPLE CAN UNDERSTAND OR THE RESIDENTS CAN UNDERSTAND, THAT WE ARE GOING TO HAVE THESE OR FACE THESE ISSUES MOVING FORWARD. I THINK IT ALLOWS US TO PUSH FORWARD IN THOSE AREAS OF EXPERTISE. JUST A QUICK QUESTION, A CURIOSITY. YOU MENTIONED A THREE QUARTER INCH LINE VERSUS THE TWO, AND MOST RESIDENTS HAVE A THREE QUARTER INCH LINE WITH THAT TWO INCH RESIDENTIAL WATER LINE. BE SOMEONE THAT HAS LIKE A LARGER PROPERTY OR POTENTIALLY WHAT, WHERE WOULD THAT BE INCORPORATED? IT WOULD BE VERY RARE FOR A RESIDENTIAL PROPERTY TO HAVE A TWO INCH LINE. IT WOULD HAVE TO BE A MANSION. YEAH. AND IT WOULD BE NOT ONLY A MANSION, BUT A MANSION THAT HAS A VERY LARGE ACREAGE OF TO WATER. DO WE HAVE ANY TWO INCH LINES THAT ARE RESIDENTIAL? YES. I DON'T THINK WE DO. A TWO INCH LINE IS GOING TO BE COMMERCIAL.

OKAY. WELL, YOU MENTIONED EARLIER, LIKE IT COULD RUN ANYWHERE FROM THREE QUARTER TO TWO INCH. AND I JUST THOUGHT, WELL, I CAN'T, I CAN'T RECALL A TIME I'VE SEEN HIM, I'VE SEEN HIM IN THE PAST, BUT IT'S PRETTY RARE. OKAY. WELL, THAT MAKES THAT MAKES SENSE. WELL, YOU KNOW, I HAVE TO AGREE THAT, WELL, THERE'S TWO THINGS. ONE, I WOULD LIKE TO SUPPORT OUR SENIOR CITIZENS HERE IN RICHARDSON. AND I KNOW YOU MENTIONED EARLIER THAT THE MAJORITY OF OUR POPULATION IS AGING IN PLACE. AND I DO WANT TO, YOU KNOW, I DO WANT TO PROTECT THAT ASSET WHERE, YOU KNOW, IT'S AFFORDABLE FOR THEM TO MAINTAIN THEIR, THEIR LIVING ENVIRONMENT AND, AND AGE IN PLACE IF AT ALL POSSIBLE. SO, YOU KNOW, KEEPING WATER RATES FOR SENIOR CITIZENS, I'M HOPING THAT WE CAN POTENTIALLY POTENTIALLY LOOK AT THAT AS A KEY OPTION. AND THEN LASTLY, I DO SUPPORT SCENARIO THREE. I WAS KIND OF GOING BACK AND FORTH ON TWO AND THREE, BUT AFTER REVIEWING THEM AGAIN, I DO THINK THAT NUMBER THREE WOULD PROBABLY MORE BE BENEFICIAL. THANK YOU, COUNCILMEMBER JUSTICE. THANK YOU MAYOR. MR. MAYOR, I JUST WANT TO THANK YOU AND THE TEAM FOR BRINGING WILLDAN IN TO DO THIS STUDY. IT'S AN EYE OPENING IN SO MANY WAYS, BUT IT'S ALSO REALLY GREAT TRANSPARENCY FOR FOLKS TO SEE THE CHALLENGES THAT WE FACE WITH RESPECT TO THIS PARTICULAR UTILITY AND PROVIDING THIS SERVICE. SO THANK YOU FOR FOR THAT. I HAD ONE QUESTION FOR YOU ON OPTION ONE, YOUR SLIDE 19. IT SHOWS THAT THE RATE WOULD REMAIN BASICALLY THE SAME FOR 26, 27, AND 28. AND THEN THERE WOULD BE A SIGNIFICANT DROP OFF IN 29 AND 30. I DON'T KNOW. AND ALL THE NUMBER TALK IF I JUST MISSED IT. BUT WHY DO WE ANTICIPATE THERE WOULD BE SUCH A SIGNIFICANT DROP OFF IN 29 AND 30? AND MY UNDERLYING CONCERN WITH THAT QUESTION IS THAT, YOU KNOW, WE'LL WE'LL SEE THAT IN MODELS FOR LIKE THE WATER DISTRICT AS AN EXAMPLE.

AND, YOU KNOW, WE WE'RE PROJECTING IT OUT LIKE THIS, AND THEN IT DROPS OFF. AND THEN INEVITABLY, WHEN WE GET TO 29, WE'RE DOING A SIMILAR PRESENTATION AND SAYING, JUST KIDDING. WE THINK WE NEED TO MAINTAIN THE 10% OR GO TO 12%. SO WHY IS THE MODEL ASSUMING THAT, IF I RECALL CORRECTLY, THE BIGGEST REASON IS THAT NORTH TEXAS IS PROJECTING LESSER INCREASES AFTER 29. AND SO BY THE TIME YOU GET TO 29, YOU'RE TO THE POINT WHERE YOU CAN ABSORB THOSE INCREASES AND THE LESSER INCREASES ARE WOULD BE PASSED THROUGH. NOW, THAT'S A BIG CAVEAT, THOUGH, BECAUSE NORTH TEXAS HAS BEEN KNOWN TO CHANGE THEIR RATE RECOMMENDATIONS. IF THEY ANNOUNCE A NEW PROJECT, IT'S LONG BEEN RUMORED THAT THEY MIGHT BUILD ANOTHER LAKE. IF THEY DECIDE TO BUILD ANOTHER LAKE, THEN ALL BETS ARE OFF.

BUT RIGHT NOW THEY'RE THEY'RE CLAIMING THAT AFTER 29, IT'S GOING TO SLACKEN OFF A BIT.

OKAY, SO THIS MODEL ASSUMES THAT THE DISTRICT'S NUMBERS DROP OFF. WE USE WE DUMP THEIR NUMBERS RIGHT INTO OUR MODEL. OKAY. YEAH. THAT'S HELPFUL. YEAH. I THINK WE'VE SEEN EVERY TIME WE GET A PRESENTATION THAT IT SORT OF MAINTAINS AND GOES UP, AND THEN THERE'S ALWAYS A DROP OFF EVENTUALLY. BUT IT SEEMS LIKE THAT DROP OFF SHIFTS OUT YEARS AGO. SO I WOULD BE CONCERNED WITH THIS, THAT THAT WE WOULD FACE A SIMILAR ISSUE. I KNOW YOU'RE NOT LOOKING FOR

[01:25:05]

DIRECTION AND I DON'T REALLY HAVE ANY FOR YOU TONIGHT BECAUSE THIS IS A LOT OF INFORMATION. AND SO I KNOW YOU'RE PUTTING IT BACK ON. YOU SAID IN A COUPLE OF WEEKS. AND SO I, I WANT TO STUDY IT OVER THE NEXT COUPLE OF WEEKS. YOU KNOW, I AGREE WITH THE SENTIMENTS THAT COUNCILMAN DORIAN, YOU KNOW, STATED ABOUT MAKING SURE THAT WE'RE PROTECTING SENIORS AND THOSE SORTS OF THINGS. BUT THIS IS A LOT TO DIGEST. SO I'LL BE PREPARED TO GIVE YOU A RECOMMENDATION ON THE 22ND, BUT I REALLY WANT TO SORT OF SIT WITH THIS AND HEAR FROM FOLKS WHO ARE HEARING ABOUT IT FOR THE FIRST TIME AS WELL. THANK YOU, COUNCILMEMBER BARRIOS. THANK YOU, MAYOR, AND THANK YOU, COUNCILMAN DORIAN, FOR ASKING THAT QUESTION, BECAUSE I WAS REAL CURIOUS ABOUT THAT MYSELF. I WAS A LITTLE LOST ON THAT.

CAN WE GO TO SLIDE 44? I WANT TO MAKE SURE I UNDERSTAND THIS. I IN ALL HONESTY, I'M STRUGGLING TO KIND OF DIFFERENTIATE SOME OF THE DIFFERENCES BETWEEN 2 AND 3 HERE. I REALLY WISH WE KIND OF SAW THEM NEXT TO EACH OTHER, NOT JUST THE BENEFITS AND THE CHALLENGES, BUT IF SCENARIO THREE INCORPORATES ALL THE BENEFITS OF SCENARIO TWO. BUT WITH THE ADDED SENIOR DISCOUNT, IS THAT CORRECT? THAT'S CORRECT. OKAY, SO IF SCENARIO THREE ASSUMES THE BENEFITS OF SCENARIO TWO, IS IT FAIR TO ASSUME THAT SCENARIO THREE ASSUMES THE CHALLENGES OF SCENARIO TWO? YES. OKAY. SO THE HIGHER MONTHLY CHARGES FOR COMMERCIAL CUSTOMERS WILL EXIST IN BOTH SCENARIO TWO AND SCENARIO THREE. YES, I PROBABLY SHOULD HAVE ADDED THAT BULLET POINT. CORRECT. SO THE CHALLENGES ARE ASSUMED INTO SCENARIO THREE PLUS. JUST LESSER OF A INCREASE FOR OUR NON OUR. A HIGHER. IT'S I GUESS A LITTLE BIT MORE OF AN INCREASE FOR NON SENIOR CUSTOMERS. THERE COULD BE UNDER CERTAIN CIRCUMSTANCES IF YOU'RE A RESIDENTIAL CUSTOMER USING 3 TO 4000 GALLONS A MONTH, YOU'RE GOING TO SEE YOUR MINIMUM CHARGE GO UP DISPROPORTIONATELY OVER THE NEXT FIVE YEARS. AND YOU MIGHT SEE A 1 TO $2 ADDITIONAL INCREASE. THAT'S ONLY BECAUSE OF THE ABSORPTION OF THE DISCOUNT OF THE SENIOR. CORRECT. OKAY. WHICH. OKAY. ALL RIGHT. I JUST WANT TO MAKE SURE I WAS LOOKING AT THAT CORRECTLY. AND, YOU KNOW, THERE'S A LOT OF CUSTOMERS. THEY ALL USE WATER DIFFERENTLY. AND SO THERE'S GOING TO BE DIFFERENT IMPACTS FOR DIFFERENT CUSTOMERS. SO WE TRY TO WE TRY TO PRESENT THIS IN AS EASILY AND UNDERSTANDABLE WAY AS POSSIBLE. NOW, DON, AND THIS MAY, ERIC, I DON'T KNOW IF THIS IS A YOU QUESTION, BUT YOU MENTIONED IN THE DISCUSSION AROUND TWO INCH, THREE QUARTER INCH AND AROUND RESIDENTIAL AND TALKING ABOUT PLANNING AND I GUESS PREPARING TO BE ABLE TO PROVIDE FOR THE VOLUME OF THE VARIOUS INCHES OF PIPES. CAN YOU KIND OF SPEAK A LITTLE BIT MORE TO THAT AND WHAT THAT MEANS FOR US AS A CITY WHEN IT COMES TO. KIND OF BEING ABLE TO FORECAST OR PROVIDE OR, OR WHAT WAS THE TERM YOU USED? SO, SO THE HIGHER NUMBER OF LARGER VALVES AT ANY GIVEN TIME, WE COULD BE REQUIRED TO PROVIDE MORE WATER. SO IT'S, IT'S MAKING SURE THAT WE HAVE A HIGHER CAPACITY AT ANY GIVEN TIME. IF YOU HAVE THE HIGHER NUMBER OF LOWER VALVES, THERE'S LESS, YOU KNOW, OVERALL LESS WATER THAT'S GOING TO BE ABLE TO GET THROUGH TO 1000 VALVES, RIGHT? IF YOU HAVE A 1000 THREE QUARTER INCH VALVES, THERE'S ONLY A CERTAIN AMOUNT OF WATER THAT'S GOING TO GET THROUGH.

TAKE 900 THREE QUARTERS AND ADD, YOU KNOW, 102 INCH. YOU HAVE TO YOU HAVE TO ACCOUNT FOR AND BE PREPARED TO DELIVER THAT ADDITIONAL WATER, THAT ADDITIONAL CAPACITY. AND SO WHAT WE'RE LOOKING AT IS BEING ABLE TO HOPEFULLY HELP CUSTOMERS RIGHT SIZE, BECAUSE THERE IS A FINANCIAL BENEFIT TO NOT HAVING A LARGER THAN YOU NEED VALVE. WE CAN WE CAN REDUCE THE SIZE OF VALVES, WHICH WILL REDUCE THE OVERALL CAPACITY AT ANY GIVEN TIME WE MIGHT HAVE TO PROVIDE. AND WHEN WE'RE TALKING CAPACITY, WE'RE TALKING ABOUT NOT JUST, I GUESS, THE BACKUP PARTS, BUT YOU'RE TALKING ABOUT TOWER TOWER CAPACITY. YOU'RE TALKING ABOUT, YOU KNOW, YEAH, A 46 INCH VERSUS 72 INCH OR IT'S EVERYTHING. IT'S PUMPS, IT'S GROUND STORAGE. IT'S ELEVATED STORAGE. RIGHT. ERIC. I MEAN, IT'S LITERALLY EVERYTHING THAT REQUIRES TO GET SOME MORE. YEAH. IT'S IMPORTANT TO NOTE TO THE WATER MASTER PLAN, THE MODEL WE JUST WENT THROUGH LOOKED AT THOSE SCENARIOS. SO A LOT OF THE $40 MILLION IN WATER IS POINTING DIRECTLY TO THAT, RIGHT? SO IF YOU HAVE LARGER DEVELOPMENTS AND YOU HAVE SMALLER PIPES, YOU'VE GOT TO INCREASE THE SIZE OF THE PIPE. SO THE VELOCITY INCREASES SO THAT IT CAN PROVIDE THE AMOUNT OF WATER USE AND THE DEMAND THAT'S IN THAT AREA. THE SMALLER PIPES YOU HAVE, YOU CAN HAVE THE DEMAND, BUT YOU'RE GOING TO HAVE INCREASED VELOCITY, WHICH LEADS TO LOWER PRESSURE. SO IN ORDER TO GET MORE WATER DOWN THERE, TO PROVIDE ADEQUATE PRESSURE FOR ST SANITARY REASONS, BUT ALSO FIREFIGHTING, YOU HAVE TO INCREASE THAT SIZE OF THE WATER LINE TO TO MAKE UP FOR THE DEMANDS OF THE NEW DEVELOPMENT THAT'S COMING. SO THAT'S, THAT'S KIND OF A WAY TO LOOK AT IT. THEY NEED LARGER METERS. SO

[01:30:04]

I JUST LOOKED AT THE DATA SET THAT WE HAVE FOR THIS KIND OF DISCUSSION. SO TO ANSWER YOUR QUESTION COUNCILMAN, WE HAD SIX RESIDENTIAL TWO INCH METERS. WHAT ARE THOSE. WE'D HAVE TO DIVE INTO IT. BUT THAT'S NOT VERY MANY. BUT WE HAVE A LOT OF MULTI-FAMILY TWO METERS, RIGHT.

SO YOU NEED A LOT MORE VELOCITY FOR A LOT MORE WATER USE. SO IT REALLY JUST DEPENDS ON WHAT DEVELOPMENTS COMING, WHAT ARE THE DEMANDS IN THAT AREA GOING TO BE AND WHAT TYPE OF INFRASTRUCTURE UPGRADES DO WE HAVE TO PERFORM AND BE PREPARED TO MEET THAT DEMAND WHEN IT'S THERE? YEAH, IT'S I MEAN, YOU HEAR THE WATER DISTRICT TALK ABOUT PEAK DEMAND A LOT, RIGHT? AND SO IT'S THE SAME PRINCIPLE. IT'S WHEN YOU'RE BUILDING A SYSTEM TO DELIVER THE MOST WATER THAT YOU COULD POTENTIALLY HAVE TO BE REQUIRED TO PROVIDE AT A GIVEN TIME.

IT'S A REALLY INEFFICIENT WAY BECAUSE YOU'RE BUILDING FOR A, YOU KNOW, YOU'RE BUILDING FOR THE, YOU'RE BUILDING FOR THE OUTLIER, NOT BUILDING FOR. AND SO THE BETTER WE CAN HAVE RESIDENTS AND BUSINESSES CALIBRATE THE SIZE OF THEIR METER TO WHAT THEIR ACTUAL USE IS AND BRING DOWN THE OVERALL KIND OF POTENTIAL PEAK DEMAND, THE BETTER, THE BETTER OUR SYSTEM WILL BE. AND IT'LL OPERATE BETTER, ACTUALLY. SO SO I MEAN, IN ALL HONESTY, I HAVE NO IDEA. I ASSURE YOU IN THE NEXT COUPLE OF DAYS, I'M GOING TO TRY TO FIGURE IT OUT. WHAT SIZE, YOU KNOW, PIPE I HAVE. I'M ASSUMING LIKE MOST RESIDENTS, BUT LET'S SAY I DISCOVER IT IS I'M ONE OF THE SIX WHO HAVE A TWO INCH METER. THAT'S I PROBABLY DON'T KNOW.

I'M SURE I DON'T, BUT LET'S SAY IT'S THE WRONG SIZE. HOW DOES ONE GO ABOUT. IS THAT A JUST. I MEAN, IT'S A CITY METER. IS THAT A PLUMBER SOMEBODY CALLED. I MEAN, YEAH, IT'S A LITTLE MORE COMPLICATED THAN THAT AS WELL. IF YOU HAVE A TWO INCH METER, YOU HAVE THE INFRASTRUCTURE TO PROVIDE WATER TO THAT TWO INCH METER. SO YOU'D HAVE TO LOOK AT, YOU KNOW, IF YOU, LET'S SAY YOU WANTED TO DOWNGRADE TO A THREE QUARTERS, THAT'S WHAT YOU'RE ULTIMATELY ASKING, RIGHT? YOU'D HAVE TO ULTIMATELY DOWNGRADE THE SERVICE LINE TAP TO THE MAIN.

SO IT WOULD BE A MUCH MORE INVOLVED PROCESS TO, TO REDUCE THAT. SO WHAT KIND OF WE WERE SPEAKING TO EARLIER AT SOME TIME, MAYBE SOMEBODY THOUGHT THEY WERE GOING TO BUILD A HUGE PASTURE ON YOUR PROPERTY 30 YEARS AGO. SO THEY WENT AHEAD AND GOT THAT TWO INCH METER BECAUSE THERE WAS NOTHING TO INCENTIVIZE THEM NOT TO. SO THAT'S WHY YOU HAVE THAT INFRASTRUCTURE THERE, BUT YOU'RE NOT QUITE USING IT. DOES THAT MAKE SENSE? OKAY. WELL, THAT GIVES ME A BETTER HOLISTIC IDEA. THANK YOU, COUNCILMEMBER CORCORAN. THANK YOU MAYOR. SO HOW MANY DO WE KNOW? HOW MANY BUSINESSES IN RICHARDSON EVEN HAVE, LIKE THE 10 INCH OR 8 INCH METERS? YEAH. GO AHEAD ERIC, WE PROVIDED THAT LAST WEEK IN THE PRESENTATION. YEAH.

OH IS IT ALREADY IN THERE SOMEWHERE? LAST WEEK I JUST IT WAS, IT WAS THE, IT WAS BASICALLY A CHART THAT SHOWED THE METER SIZES AND HOW MANY INCHES AND THEN WHAT IT WOULD ULTIMATELY COST TO REPLACE THAT METER. I CAN'T TELL YOU EXACTLY WHO THEY ARE, BUT WE HAVE VERY FEW TENANTS. I THINK THE MATH IS LESS THAN 1% OF ALL THE METERS IN THE SYSTEM WERE 3IN TO 10IN. SO TWO INCHES LOWER IS GOING TO BE THE VAST MAJORITY OF YOUR SYSTEM. BUT THE AMOUNT OF WATER THAT GOES THROUGH THOSE TEN INCH METERS, AND IF SOMETHING FAILS, THE AMOUNT IT COST TO REPLACE THAT TEN INCH METER, RIGHT NOW THEY'RE PAYING $8 A MONTH. SO WE WANT THAT TO BE MORE PROPORTIONATELY CHARGED TO HELP US REIMBURSE THAT COST IF WE HAVE TO REPAIR THOSE LARGER METERS. OKAY, ANOTHER COST JUST TO FACTOR INTO THIS DISCUSSION. YOU KNOW, ALL THESE LARGE MEALS ARE TESTED ANNUALLY, RIGHT? SO THERE'S A COST THAT GOES INTO THOSE MAINTENANCE ANNUALLY THAT WE DO THIS TEST BEFORE IF THERE'S ANY REPAIRS THAT NEED TO BE DONE. SO RIGHT NOW WE'RE IN OUR OPERATIONS BUDGET. WE'RE ABOUT A 30 TO $50,000 LINE ITEM JUST FOR THE MAINTENANCE OF LARGE METERS. SO LESS THAN 1% OF OUR METERS ARE TAKEN 30 TO $50,000 OF OUR OPERATIONAL DOLLARS. SO THAT'S ANOTHER WAY TO LOOK AT THAT, THAT COST THAT WE COULD REALLY RECOUP FROM THOSE USERS. YEAH, COUNCILMAN, WE HAVE TEN. I'M SORRY. WE HAVE 510 INCH METERS, 12 EIGHT INCH AND 29 SIX INCH. SO ABOUT 0.13% OF OUR ENTIRE SYSTEM IS SIX INCH OR LARGER.

OKAY. YEAH. NO, THAT'S HELPFUL. AND THEN I, I APOLOGIZE FOR NOT REMEMBERING THAT FROM. NO, NO, I WAS JUST HOPING SOMEBODY WOULD HELP ME BRING IT UP. YEAH. NO THANKS. THAT'S HELPFUL. AND I CAN GO REFERENCE THAT AS I'M GOING BACK THROUGH THIS. AND I'M STILL, I FEEL LIKE I'M THE ONLY ONE UP HERE THAT DOESN'T THAT DOESN'T UNDERSTAND THESE TABLES ON SLIDE 27 AND THE PRECEDING SLIDE AS WELL. I MEAN, I THOUGHT THE IDEA OF SCENARIO TWO WAS THAT WE'RE CHARGING GENERALLY COMMERCIAL CUSTOMERS WITH THE LARGER METERS, MORE SO THAT THAT FINAL FORECAST FOR LIKE THE SMALLER THREE QUARTER INCH BASE CHARGE WOULD BE SMALLER. BUT SOMEHOW IT'S LIKE WAY BIGGER THAN IN SCENARIO ONE. AND I DON'T UNDERSTAND MAYBE LIKE HOW THE TABLES ARE SUPPOSED TO LINE UP ON THAT. WELL, IT'S A COMBINATION OF TWO THINGS. IT DOES INCREASE THE BASE CHARGE ON THE THREE QUARTER INCH METERS HIGHER THAN IT DOES UNDER SCENARIO ONE. IT DEFINITELY DOES THAT. YEAH. UNDER THE RECOGNITION THAT YOUR BASE CHARGE IS EXTRAORDINARILY LOW FOR A FOR A CITY YOUR SIZE, OKAY. BUT IT ALSO COMPOUNDS IT BY DOING AN EVEN LARGER INCREASE ON THE LARGER METERS. SO IT'S A, IT'S A COMBINED EFFECT. SO THE IDEA IS YOU'RE GETTING, YOU'RE GETTING MORE REVENUE FROM YOUR BASE CHARGE. AND SO WHAT THAT ALSO MEANS IS YOUR VOLUMETRIC INCREASES, YOUR VOLUMETRIC RATES ARE LOWER UNDER THIS SCENARIO THAN THEY WERE UNDER SCENARIO ONE. BUT IT IS A TWO PRONGED EFFECT. WE'RE NOT WE'RE NOT USING THE EXTRA

[01:35:04]

REVENUE FROM THE BASE CHARGES FOR THE HIGHER METERS TO LOWER THE BASE CHARGE FOR THE THREE QUARTER INCH METER, WE'RE CHARGING MORE TO EVERYBODY. OKAY, OKAY. I'M SORRY, I THINK I FUNDAMENTALLY MISUNDERSTOOD WHY WE WOULD DO SCENARIO TWO. THEN OVER SCENARIO ONE, IS IT TH OPERATION LIKE YOU WERE SAYING, ERIC? LIKE THE RECOUPING, I GUESS THE OPERATIONAL CHARGE TO SERVICE ALL THE LARGER METERS MORE EFFECTIVELY? I MEAN, I SPEAK TO HOW IT'S DONE, BUT I THINK THE IDEA IS JUST MAKING SURE THAT THE METERS ARE PAYING FOR THEMSELVES ON A MORE PROPORTIONATE BASIS. OKAY. RIGHT. SO THAT YOU'RE, YOU KNOW, SENIOR OR NON SENIOR THAT'S GOT A THREE QUARTER INCH METER IS PAYING $8 A MONTH. YOUR TEN INCH METER, EIGHT INCH METER, SIX INCH METER IS NOT ALSO PAYING $8 A MONTH, RIGHT? SO THEN THE SYSTEM AS A WHOLE IS HAVING TO RECOUP THE COST OF THE TOTAL OVERALL MAINTENANCE.

WE'RE NOT INCREASING THE AMOUNT OF MAINTENANCE DOLLARS WE'RE RECEIVING. WE'RE JUST WE'RE JUST KIND OF SHIFTING IT TO WHERE IT'S MORE APPROPRIATELY CHARGED. I THINK THAT SAFE TO SAY, YEAH, JOE, IF YOU IF YOU LOOK, IF YOU TAKE 20 SLIDE 24 AND 27 IN CONTEXT, IN 5 IN 5 YEARS, ON 27, WE WOULD BE AT A BASE CHARGE OF $20. THAT'S STILL PUTS US AS THE, AS THE THIRD LOWEST NORTH TEXAS MUNICIPAL WATER DISTRICT CITY. LOOK AT WHERE $20 IN FIVE YEARS.

NOW THAT ASSUMES NOBODY ELSE CHANGES ON 24. RIGHT? SO IN FIVE YEARS, WE WOULD LIKELY BE STILL THE LOWEST OR SECOND LOWEST BASE CHARGE FOR NORTH TEXAS MUNICIPAL WATER DISTRICT CITY. SO JUST HELP ME UNDERSTAND. SO SCENARIO ONE IS THE SCENARIO WHERE OUR BOND RATING GOES DOWN BECAUSE WE'RE DIGGING INTO RESERVES. NO, NONE OF THESE THREE SCENARIOS. NO.

THAT WAS IF WE THAT WAS IF WE TAKE A REALLY BLUNT INSTRUMENT LIKE WE'VE BEEN DOING IN THE PAST AND JUST SAYING, LET'S INCREASE IT BY 5%, 5% THIS YEAR, 5% NEXT YEAR, AND NOT TAKE INTO CONSIDERATION ANY OF THE MODELING THAT DAN'S PROVIDED. BUT JUST ON THE ON THE ON THE BASE CHARGE YOU WERE ASKING, IT DOES IT DOES GO UP FROM $8 TO $20 IN FIVE YEARS, RIGHT? THAT'S NOT THE EQUIVALENT OF THE RATE INCREASES THAT WE'RE PREDICTING. BUT WHAT WE'RE TRYING TO DO IS JUST GET IT TO SOME KIND OF A REASONABLE LEVEL BY THE END OF THE FIVE YEAR PERIOD. AND AGAIN, ASSUMING NONE OF THESE OTHER CITIES CHANGE THEIR BASE RATE OVER THE NEXT FIVE YEARS, WE WOULD STILL BE ONE OF THE LOWEST NORTH TEXAS MUNICIPAL WATER DISTRICT CITY BASE RATES. AND SO THAT'S YOU CAN KIND OF SEE WE'D STILL BE TO THE LEFT OF THE CHART.

AND AGAIN, THAT'S IF NO ONE ELSE CHANGES FOR FIVE YEARS. AND SO WE WERE, YOU KNOW, WE COULD, YOU COULD ARGUE, WE COULD HAVE KIND OF EVEN BEEN MORE AGGRESSIVE TO TRY TO GET TO ABOUT $25, ASSUMING SOME OTHER CITIES MIGHT RAISE THEIRS OVER THE NEXT FIVE YEARS. BUT WE TOOK A MORE CONSERVATIVE APPROACH AND TRIED TO KEEP IT AT THAT $20, $20 BASE AFTER FIVE YEARS. SO, YOU KNOW, MAYBE THIS IS SOMETHING WE TALK ABOUT OFFLINE. MAYBE I NEED A LITTLE MORE TUTORING THAN WE CAN PROVIDE IN THIS MEETING. MAYOR PRO TEM HUTCHENRIDER THANK YOU.

MAYOR, A COUPLE OF COUPLE OF POINTS, A COUPLE OF QUESTIONS. NUMBER ONE IS DON AND ERIC, I DON'T GET THE SENSE THAT WE HAVE A LOT OF WHAT I'M GOING TO CALL RUNAWAY PIPE SIZING, BECAUSE AT LEAST WHEN I'VE EVER BEEN INVOLVED WITH OUR DOING PLAN REVIEW AND OTHER THINGS LIKE THAT WITH BRANT AND OTHERS IN THE CITY, ENGINEERS ARE REQUIRED TO COME IN WITH THEIR CALCS. AND THEN IT'S LOOKED AS DOUBLE CHECKED. SO I MEAN, I DON'T. ERIC, DO YOU REALLY HONESTLY FEEL WE HAVE A LOT OF WHAT WHAT THE CONSULTANT WAS SAYING AS FAR AS WHAT I WOULD WHAT I WOULD CALL RUNAWAY PIPE PIPE SIZING, I DON'T KNOW, RUNAWAY PIPE SIZING, BUT I, YOU KNOW, WELL METER SIZING BECAUSE YEAH, METERS GO INTO THE PIPES. OBVIOUSLY, I DON'T HAVE ANY DATA TO QUANTIFY THAT. I CAN TELL YOU THAT IN MY EXPERIENCE, WE HAVE HAD, YOU KNOW, BUSINESSES SAY, HEY, I WANT A TWO INCH, EVEN THOUGH ONE INCH MAY HAVE BEEN SUFFICIENT. AND SO WE'VE WE'VE CONCEDED AND GONE WITH A TWO INCH METER. WHETHER THAT'S BECAUSE THEY THOUGHT A HYPOTHETICAL EXAMPLE MIGHT BE, I PLAN ON EXPANDING MY RESTAURANT OVER THE NEXT FIVE YEARS. SO WHY WOULD I? YOU KNOW, I NEED TO INVEST IN THAT INFRASTRUCTURE NOW. SO THEY MAKE THAT DECISION NOW AND THEN THEY DON'T. MAYBE THEY DON'T LAST AND THEY MOVE ON. SO NOW YOU HAVE A FLOWER SHOP THAT HAS A TWO INCH METER, RIGHT? SO IT'S REALLY HARD TO A KNOW THE STORY 100% OF THE TIME. WE JUST, WE KNOW, WE KNOW HOW MANY WE HAVE. AND THEN WE CAN DO SOME ANALYTICS, IF YOU WILL, OF WHAT, WHO THOSE ARE POSSIBLY AND VENTURE INTO THOSE MORE. BUT I BELIEVE IT'S MORE, YOU KNOW, JUST LIKE OUR WATER PLANT, WE'RE BUILDING OR DEVELOPING BASED OFF THE COMP PLAN AND WHAT WE THINK IS GOING TO COME INTO THE CITY, WE PUT THAT IN THE GROUND, AND THEN THAT CHANGES OR POTENTIALLY CHANGES. WE STILL HAVE TO LIKE WE STILL HAVE TO MAKE THE INVESTMENT WHAT WE ASSUME IS COMING. RIGHT. BUT BUT I AGREE, I DON'T THINK IT'S A IT'S A RUNAWAY PROBLEM. BUT, BUT CERTAINLY THERE'S, THERE ARE THOSE POCKETS THAT PROBABLY DO EXIST. OKAY. AND THEN CAN YOU GO TO YOUR CHART WHERE YOU SHOWED THE. I THINK IT'S OPTION THREE FOR THE FOR SENIOR BECAUSE I HAD A QUESTION ON THIS, THIS CHART. NO, GO BACK ONE. OKAY. YEAH, I THINK THAT'S THE CHART. IF WE'RE DOING THIS FOR SENIORS THAT ARE

[01:40:11]

ON FIXED INCOME. AND I CERTAINLY AGREE WITH EVERYTHING COUNCILWOMAN JUSTICE AND AND COUNCILMAN BARRIOS AND DORIAN SAID, AS FAR AS 100% SUPPORTING OUR SENIORS. BUT WOULDN'T WE ONLY WANT TO DO THAT ON THE THREE QUARTER INCH LINE? BECAUSE THAT WOULD BE THOSE ARE THOSE ARE WOULD BE THE PEOPLE WE WOULD MAKE THE ASSUMPTION OR MORE ON THE FIXED INCOME, THE ONES WHO NEED THE ASSISTANCE. SO WOULD WE NOT EXCUSE ME. WE HAVE SENIOR ACCOUNTS. ANYTHING OVER THAT THREE QUARTER INCH. WOULDN'T WE WANT TO PUT SOME FACTOR ON THERE RATHER THAN LEAVING IT AT THE $8 LIKE WE'RE GOING TO DO TO ALL EVERYONE ELSE? YEAH. IF I'M UNDERSTANDING WHAT YOU'RE SAYING. SO IS THAT THAT CHART'S NOT CORRECT I GUESS IS WHAT I WOULD ASK ACTUALLY, ACTUALLY THAT'S EXACTLY WHAT THE RECOMMENDATION IS. YOU SEE, IT'S $8 ACROSS THE BOARD FOR THE THREE QUARTER INCH METER. BUT IF YOU'RE A SENIOR AND YOU HAVE A ONE INCH METER OR A 1.5IN METER, YOU'RE PAYING THE SAME RATE AS EVERYBODY ELSE DOES. OKAY, OKAY. I'M SORRY. I DIDN'T SEE THAT. THAT WASN'T CLEAR TO ME. YEAH, IT'S A LOT OF NUMBERS. IT'S HARD TO DIGEST THEM ALL. OKAY. SO SO WE'D ONLY DO THE THREE QUARTER INCH FOR THE. I'M SORRY, WE ONLY DO THE $8 FOR THE THREE QUARTER INCH. OKAY. ALL RIGHT. THAT'S WHAT I JUST WANTED TO MAKE SURE OF IN THAT REGARD. AND THEN LASTLY, I PLEASE, I DON'T I DON'T MEAN THIS. I REALIZE YOU'RE COMING IN. I'VE BEEN ON COUNCIL NOW FOR EIGHT YEARS. I THINK I'VE LOOKED BACK AS FAR AS I CAN POSSIBLY LOOK BACK. NORTH TEXAS HAS NEVER DROPPED TO THE LEVELS THAT YOU'RE PROPOSING IN 29 OR 30, WHATEVER ELSE LIKE THAT. I DON'T. REALLY I REALLY DON'T THINK THAT'S ANYTHING WE CAN BANK ON. I STILL HAVE THE OVERARCHING CONCERN, AND I'LL CONTINUE TO HAVE THIS EVERY YEAR, IS THAT WHILE WE TRY TO BE INCREDIBLY TRANSPARENT WITH ALL OF OUR COSTS AND WHAT WE'RE SHOWING AND WHAT WE'RE DOING, AND WE HAVE THESE OPEN MEETINGS, NORTH TEXAS IS STILL THERE IS NO TRANSPARENCY. WE JUST WE ACCEPT EVERY YEAR THEY COME IN AND THEY TELL US NINE, TEN, 11, 12, 12%, EXCUSE ME, RATE INCREASES. AND WE REALLY HAVE NOTHING TO BASE THAT ON. AND SO I REALIZE THAT'S NOT SOMETHING. BUT BUT AS LONG AS I'M ON THIS COUNCIL, I'M GOING TO CONTINUE TO PUSH THAT THAT WHAT THEY DO TO US AND WHAT THEY DO TO OUR CITIZENS IS COMPLETELY INAPPROPRIATE AS FAR AS THEY'RE JUST THEY JUST PASS ON INCREASES AND IT'S LIKE, WELL, THERE THEY ARE. AND WE HAVE NO, NO LEVERAGE. I MEAN, WE FINALLY, WE FINALLY GOT THE, THE NEW CONTRACT IN PLACE, WHICH WAS A STEP FORWARD. NO, NO ARGUMENT THERE AT ALL. BUT, YOU KNOW, NOWHERE ELSE DOES ANYBODY JUST GET TO SLAM IN 12, 13, TEN, 11, 12, WHATEVER PERCENT INCREASES WITHOUT SOME LEVEL OF JUSTIFICATION. SO I JUST I DON'T I DON'T BELIEVE THOSE. I FORGET WHAT SLIDE YOU HAD IT ON WHERE YOU SAID IT WAS GOING TO SIGNIFICANTLY DROP. I JUST I DON'T BUY IT. I DON'T BELIEVE IT. SO SORRY. AND I REALIZE YOU'RE YOU'RE COMING IN WITH WITH, WITH GOOD INTENTION OF SHOWING THAT I HOPE YOU ARE RIGHT AND I'M WRONG. I MEAN, ACTUALLY, NO, I HOPE YOU'RE RIGHT AND I'M WRONG FROM THE STANDPOINT OF OF OUR CITIZENS NEED TO GET A AT SOME POINT, AT SOME POINT IN TIME, BECAUSE IT'S JUST CONTINUES TO, TO INCREASE. SO, YOU KNOW, BASED ON WHAT I'M SEEING TONIGHT, I.

DEFINITELY WOULD WOULD UNLESS SOMETHING COMES OUT, I DEFINITELY WOULD SUPPORT THE SCENARIO. THREE THE SENIOR DISCOUNT. I JUST WAS CONCERNED. I DIDN'T SEE THAT WHEN YOU WENT THROUGH IT THE FIRST TIME, THAT IT WAS JUST FOR THE THREE QUARTER INCH LINE. BECAUSE OBVIOUSLY IF SOMEONE HAS SOMETHING MUCH, MUCH LARGER, THEN, THEN I WOULDN'T THINK THAT THEY WOULD BE IN THE SAME SCENARIO AS MOST ALL OF OUR SENIORS. SO. OKAY, GREAT. THANK YOU VERY MUCH. THANK YOU. MAYOR PRO TEM COUNCIL MEMBER. THANK YOU, MR. MAYOR. THANK YOU FOR YOUR PRESENTATION. THANK YOU. IT'S A LOT OF NUMBER THERE. IT'S NOT JUST AN AUDITOR ENGINEER. STRUGGLE WITH THE NUMBERS. I'LL NEED SOME TIME TO GO OVER ALL THESE THINGS, BUT I DO HAVE SOME QUESTIONS. I DO HAVE SOME COMMENTS. NUMBER ONE COMMENTS. YOU KNOW, THIS IS NOT REALLY THE SAME BUSINESS AS MCDONALD'S BECAUSE, YOU KNOW, THIS IS MUCH MORE LIKE ESSENTIAL BUSINESS. WE CAN'T SURVIVE WITHOUT THIS. SO WE JUST NEED TO AND EVERYBODY USES THE WATER. SO I THINK WE NEED TO DO OUR BEST. TRY TO KEEP THIS THING AS LOW AS POSSIBLE.

SO WE DON'T MAKE MONEY OFF OF OFF OF IT. AND ALSO, WE DON'T NEED TO SUBSIDIZE BUSINESSES.

WATER FROM THE RESIDENTIAL SIDE EITHER. RIGHT NOW, THAT'S WHAT PROBABLY HAPPENING IF YOU HAVE LARGER METER. AND OF COURSE, IT TAKES MORE MONEY TO DELIVER THE WATER INTO THE BUSINESS THAN THE THREE QUARTER INCH PIPE. IT'S BEEN VERY CLEAR WHAT YOU SAID, AND THAT'S NOT SOMETHING NEW. IT'S LIKE THEY SHOULD BE PAYING THEIR WATER AND NOBODY IS ASKING THAT. I'M GOING TO BE PAYING SOMEBODY A BUSINESS NEED TO PAY MY WATER. I'M NOT SAYING THAT NO RESIDENTS WANT THAT EITHER, BUT BUSINESS SHOULD PAY THEIR WATER REGARDLESS. SO I THINK THAT THAT MODEL CHANGE

[01:45:33]

THAT WAS, I THINK, WAY OVERDUE. IT'S TIME WE WE DO THAT. AND SOMETIMES IF WE CAN REALLY COMMUNICATE WITH OUR CITIZEN PROPERLY, I DON'T WANT THEM TO THINK THAT, YOU KNOW, WE'RE NOT TRANSPARENT, BUT IT'S OUR FAULT. DEFINITELY NOT COMMUNICATING TRANSPARENT WAY. SO, SO, YOU KNOW, WE NEED TO DO OUR BEST TO COMMUNICATE PROPERLY SO THAT ALL EVERYONE UNDERSTANDS WHAT'S GOING ON. AND ALSO THE SAME TIME, LIKE SENIOR CITIZEN, WE ARE NOT REALLY DOING THEM A FAVOR ALL THE TIME. I MEAN THESE THINGS BY REDUCING THE RATE. I WOULD SUPPORT THAT BECAUSE, YOU KNOW, IF THEY HAVE SOME EXTRA MONEY, I THINK THEY ARE THE ONE PROBABLY DONATE TO THE COMMUNITY MOST VERSUS THE YOUNG FAMILY. NOT SAYING THAT YOUNG FAMILY DOES NOT DONATE MORE THAN SENIOR, SENIOR, BUT SENIOR. IF THEY HAVE SOME EXTRA MONEY, THEY WILL BE DONATING BACK TO THE COMMUNITY. BUT IF THEY NEED SOMETHING TO SURVIVE, I THINK THEY'VE BEEN HERE A LONG TIME, I THINK, AND WE SHOULD DO OUR BEST TO GIVE THEM SOME BREAK WHENEVER IT'S POSSIBLE. NOW, REGARDING THE ONE INCH VERSUS THREE, THREE QUARTER INCH, YOU KNOW, METER SIZE FOR THE SENIOR, SOME HOUSES IS VERY COMMON TO HAVE ONE INCH WATER, NOT IN RICHARDSON, BUT OTHER CITIES. ONE INCH IS PRETTY MUCH STANDARD. WHENEVER THEY REPLACE NEW OLD PIPE, THEY PUT ONE INCH METER. SO I THINK THAT ONE INCH VERSUS THREE QUARTER INCH SHOULD NOT BE AN ISSUE FOR THE SENIOR CITIZEN. IF SOMEONE HAS ONE INCH WATER AND THAT BECOMES SENIOR CITIZEN, EVEN IF IT IS A BILL GATES, I'LL BE YOU KNOW, I'LL NOT DISCRIMINATE THAT THREE QUARTER VERSUS ONE INCH. OF COURSE, IF BILL GATES COME, HE'S GOING TO BE DONATING $3 MILLION TO THE COMMUNITY. SO SO MATH REALLY END OF THE DAY, MATH WORKS REALLY GREAT. BOTH ALL THE WAY. NOW, MY QUESTION ABOUT THE MODEL THAT YOU HAVE, HAVE YOU IF I MISS THAT, I DON'T KNOW IF I MISS THAT THE POPULATION GROWTH, IS IT BUILT IN? YES, YES. AND IT'S VERY NOMINAL. I DON'T BELIEVE WE ADDED I THINK WE FORECAST ON MAXIMUM OF LIKE 500 NEW ACCOUNTS OVER THE NEXT DECADE, WHICH COMES OUT TO 50 ACCOUNTS A YEAR, WHICH IS JUST MINIMAL POPULATION GROWTH. OKAY. NOW I SEE THE MODEL SOMEWHERE ELSE IS MUCH MORE THAN THAT. SO IS THERE ANY WAY WE COULD SEE ANOTHER SCENARIO WITH THE FORECAST THAT I KNOW IT'S PROBABLY 10,000, PROBABLY NEXT 20 YEARS ACCOUNT WILL BE INCREASED. IT COULD BE LIKE MULTI-FAMILY SINGLE FAMILY, OR THERE WOULD BE SOME NUMBER CHANGE. SO THAT NUMBER, I THINK WE NEED TO LOOK AT THAT CAREFULLY. I WILL ADD THAT NOT TO INTERRUPT YOU, BUT WE DID.

THE WATER MODEL PLAN WAS FACTORED INTO THIS. ALL THE RATES AND THE IMPROVEMENTS THAT WE NEED. THE NEXT I THINK IT WAS 20 MILLION FOR WATERSHED. SO ALL THAT GROWTH THAT WE ARE PROJECTING WAS INCLUDED INTO THE RATE STUDY. SO I'D LIKE TO SEE THIS THING IS LIKE HERE ALSO LIKE NOT DEFINITE ANSWER THAT IT IS WHAT IT IS SO THAT WE KNOW EXACTLY WHAT WAS USED.

I'D LIKE TO SEE THAT IN THE REPORT. I MEAN, WE DID LOOK, I APOLOGIZE FOR INTERRUPTING, BUT WE DID LOOK AT WHEN WE HAD 50 ACCOUNTS AND SOME OF MULTI USE. WE DID MEET WITH DEVELOPMENT SERVICES AND PUBLIC SERVICES TO FORECAST OUT THE GROWTH. AND YOU KNOW, A, A, AN ACCOUNT BEING A MULTI-FAMILY THAT'S DIFFERENT THAN JUST A SINGLE FAMILY. SO WE DID FACTOR IN, WE WENT WITH THE FIVE YEAR FORECAST ON PLANNED DEVELOPMENTS, ONES THAT ARE EITHER, WELL SHOVEL READY, I GUESS YOU'D SAY THE ONES THAT WERE MOST RELIABLE, WE DIDN'T INCLUDE ONES THAT MAY HAPPEN. THESE ARE ONES WE WERE PRETTY CERTAIN OF HAPPENING, BUT WE DID LOOK AT THE GROWTH AND THAT IS FACTORED INTO THE THE THE WE CAN IN ADVANCE OF THE 22ND, WE'LL PROVIDE THE ACTUAL DATA TO YOU SO THAT YOU CAN SEE THE. BECAUSE IF I HEAR THE QUESTION YOU'RE LOOKING FOR THE ACTUAL INCREASE IN POPULATION THAT WE USED IN THE MODEL. WE'LL PROVIDE THAT TO YOU VIA PACKET WELL IN ADVANCE OF THE 22ND. THAT WAY, WHEN YOU COME ON THE 22ND, YOU'LL HAVE ALL THAT CONTEXT. IS THAT. YES, YES, I THINK THAT'S EXACTLY AND THE SAME THING, LIKE THE RATE INCREASE THAT YOU HAVE ASSUMED FOR THE NORTH TEXAS, ALL THIS JUST TO NEED TO HAVE A LIST THAT WHAT WAS ASSUMED SO THAT WE KNOW WHAT ELSE COULD HAPPEN.

YEAH. BECAUSE THERE IS SOME NUMBER THAT WE DON'T KNOW WHAT COULD HAPPEN. SO WE DON'T HAVE CONTROL OVER AS LONG AS WE CLARIFY THAT. AND SO IF I, IF I CAN, SO YOU'RE ASKING, I THINK WHAT IT MIGHT BE HELPFUL IS IF WE KIND OF IDENTIFY THE MAIN ASSUMPTIONS THAT WE MADE IN THE MODELING AND JUST PROVIDE YOU WITH THE DATA FOR EACH OF THOSE, EACH OF THOSE INPUTS, IF YOU WILL, EXACTLY THAT, YOU KNOW, IN THE FUTURE, YOU KNOW, THE FUTURE COUNCIL OR EVEN THE STAFF CAN UNDERSTAND THAT WHAT CHANGE, WHAT THINGS? THE OTHER THING IS THAT, YOU KNOW,

[01:50:01]

INTERESTINGLY, WE HAVE SEEN THAT OUR THE WATER USAGE HAS GONE DOWN RECENTLY, LAST FEW MONTHS. AND, AND I DON'T THINK I HAVE CHANGED MY HABIT. MY WATER USAGE HAS GONE DOWN. I LOVE IT, IT'S DOWN. THAT'S THE MAIN THING. BUT I THINK WE NEED TO IDENTIFY THAT EXACTLY WHY THAT'S HAPPENING. AND I THINK THIS WILL HAVE YOU IS THAT HAVE ANY IMPACT THAT I TO YOUR MODEL HERE AS A GENERAL TREND, WATER USAGE IN THE CITY HAS DECLINED PER CAPITA OVER THE LAST 10 TO 20 YEARS. BUT THAT BEING SAID, ON A MONTH TO MONTH BASIS, IT VARIES WIDELY AND IT'S ALL DUE TO WEATHER. IF IT RAINS TEN DAYS IN A MONTH, YOU'RE GOING TO HAVE LOW WATER USAGE. AND IF IT DOESN'T RAIN AT ALL, YOU'RE GOING TO HAVE HIGH WATER USAGE. THAT'S VERY GENERAL STATEMENT, AND I DO UNDERSTAND THAT. BUT THE THING IS THERE IS TWO FACTORS. YOU HAVE TO YOU NEED TO LOOK AT THE LAST YEAR DATA VERSUS THIS YEAR DATA. WE HAVE NEW WATER METER THAT INSTALLED ALSO RECENTLY. SO IF YOU I DON'T KNOW IF THIS COULD BE PART OF THIS REPORT OR ANOTHER REPORT THAT IF WE CAN GET THE VOLUME IN AND VOLUME OUT LAST YEAR VERSUS THIS YEAR, WHICH WHAT I MEAN BY IN AND OUT IS THAT WE ARE BUYING, PURCHASING THIS MUCH WATER AND IT WAS DELIVERED TO US. AND THEN VERSUS HOW MUCH IS THE COMBINED USAGE THIS TIME, YOU KNOW, SOME DATA SO THAT WE CAN SEE. AND THEN THE WASTEWATER VOLUME, HOW MUCH WE ARE PAYING. SO IF YOUR WASTEWATER VOLUME IS THE SAME, WHATEVER WE HAD LAST YEAR AND YOUR WATER IS USAGE IS LESS THAN LAST YEAR, SOMETHING THE DELTA, THERE IS SOMETHING ELSE IS HAPPENING. SO WE NEED TO SEE.

YEAH, I DON'T KNOW. I THINK I'M GOING A LITTLE MORE DETAIL. I JUST WANT TO SEE SOME DATA SO THAT I UNDERSTAND WHAT REALLY CAUSING WHAT. HAPPY TO DO THAT. I WILL TELL YOU THE LAST YEAR COMPARING YEAR OVER YEAR OR EVEN YEAR OVER TWO YEARS AGO RIGHT NOW IS A LITTLE BIT TRICKY. AND IT'S BECAUSE WE HAVE A SUBSTANTIAL USER OF WATER AND A DISCHARGE OF WASTEWATER THAT HAS BEEN RAMPING UP TO FULL CAPACITY AT A SEMICONDUCTOR MANUFACTURING PLANT. AND SO, YOU KNOW, WE CAN EVEN, ERIC, I THINK WE CAN EVEN POTENTIALLY MAYBE TRY TO CONTROL FOR THAT OR BOB, WE CAN TRY TO CONTROL FOR THAT. BUT IF I'M HEARING YOU RIGHT, THE ADDITIONAL DATA YOU'RE LOOKING FOR IS THE AMOUNT OF WATER THAT WE'RE TAKING FROM NORTH TEXAS VERSUS WHAT WE'RE METERING, AND THEN THE AMOUNT OF WATER THAT WE'RE DISCHARGING AND BEING METERED FOR TO OUR THREE WASTEWATER DISCHARGE TREATMENT PROVIDERS. OKAY. YEAH, WE CAN PROVIDE THOSE DATA. I THINK AT LEAST IF WE HAVE CONTINUOUSLY MONITORED THAT DATA, YOU DON'T HAVE TO BE AN ENGINEER TO UNDERSTAND WHAT'S GOING ON. YOU WILL SEE THAT THERE IS SOME DELTA CHANGING, AND THERE COULD BE SOME THING TO THINK ABOUT IT. AND YEAH, I THINK OTHER THAN THAT, I THINK THIS IS GREAT. WE JUST NEED TO LOOK AT MORE INFORMATION AND THEN COMMUNICATE PROPERLY WITH OUR RESIDENTS SO THAT THEY DON'T THINK THAT THAT SOMETHING IS NOT TRANSPARENT LIKE THE NORTH TEXAS HAS DONE. SO ANYWAY, THANK YOU. THANK YOU, COUNCILMEMBER. COUNCILMEMBER BARRIOS. THANK YOU, MAYOR DON. NORMALLY WHEN WE WHEN WE DISCUSS RATE CHANGES OR ANYTHING, WE LOOK AT, YOU KNOW, TOTAL REVENUE IMPACT, RIGHT.

AND I KNOW ON SLIDE 43, THE LAST BULLET POINT SAYS WILL ENABLE CITY TO INVEST 83.89 MILLION IN MAINTAINING REPAIRING EXISTING SYSTEM. WHAT I'M NOT SEEING IS HOW BECAUSE EARLIER IT WAS MADE THAT I THINK THE COMMENT I FORGET THE PERCENTAGE, BUT IT WAS THROWN OUT THAT YEAH, THE MAJORITY OF OUR OF OUR USERS IN THE CITY USE A SMALLER PIPE. AND IN REALITY, THE BIG PIPE USERS ARE VERY LITTLE. SO I DON'T HELP ME UNDERSTAND HOW WE GET TO 83.89 MILLION, BECAUSE I'M NOT QUITE UNDERSTANDING HOW I UNDERSTAND THE STRUCTURE. I AGREE WITH OPTION THREE. I LIKE THE STRUCTURE. IT MAKES SENSE. I'M JUST NOT SEEING THE DOTS CONNECT TO 83.89. YEAH, THERE'S NO DOT 2 TO 2 TO CONNECT THERE. THE THE CAPITAL, THE $84 MILLION CAPITAL PLAN IS COMPLETELY INDEPENDENT OF ANY CONSIDERATION RELATED TO THIS.

THAT IS OUR MANDATES FROM THE EPA ON OUR PROGRAM. AND IT'S THE IT'S THE ROUTINE MAINTENANCE AND REHABILITATION OF OUR WATER FACILITIES, TANKS, STORAGE, GROUND STORAGE TANKS, ELEVATED TANKS, AND SOME. HONESTLY, FOR AS MUCH PIPE AS WE HAVE SOME PRETTY MODEST MAIN REPAIRS IN THE BIG PICTURE, RIGHT, ERIC? I MEAN, IT'S NOT THERE'S NOT A LOT OF THAT. AND SO YOU'RE NOT YOU'RE ABSOLUTELY RIGHT. YOU'RE NOT. THERE IS NO DOT TO CONNECT THERE. THE, THE CHANGING OF POTENTIALLY THE PIPE, THE RIGHT SIZING, IF YOU WILL, OF THE, I'M SORRY, THE

[01:55:04]

RIGHT SIZING, IF YOU WILL, OF THE METER IS A IS A TINY, TINY NUMBER COMPARED TO THESE OTHER NUMBERS. YEAH. SO SO WHAT IS THE IMPACT OF CHANGING THE STRUCTURE? THE REVENUE IMPACT OF CHANGING, OF GOING TO A METER EQUIVALENCY. RIGHT. THEN DO YOU HAVE DO YOU HAVE A SENSE OF. WELL, NOT NECESSARILY THE, THE SO NOT THE CHANGE OF THE PRICE OF THE METER SIZE. TALK ABOUT JUST OVER RATE. WE'RE GOING TO COVER, I GUESS THE ALL OF THESE MODELS. I UNDERSTAND, I'M SORRY. ALL OF THESE MODELS ARE ESSENTIALLY ESSENTIALLY REVENUE NEUTRAL. IT'S JUST HOW DO YOU GET THERE AND WHO PAYS. RIGHT. RIGHT. YEAH. YEAH. OKAY. YOU MENTIONED THAT IN SCENARIO TWO, YOU COMBINE HIGHER MINIMUM CHARGES WITH LESSER INCREASES IN THE VOLUME RATE. YOU END UP WITH PROJECTED THE SAME AMOUNT OF REVENUE. YEAH. SO ALL THREE ALL THREE SCENARIOS WILL GET YOU THE SAME AMOUNT OF REVENUE. RIGHT. IT'S JUST WHO WHO DO YOU GET IT FROM. OKAY. AND THEY WILL ASSUMING THAT THE THE AS MAYOR PRO TEM MENTIONED, YOU KNOW, HE'S NEVER SEEN IT DECREASE. AND I HAVE NO REASON TO DISAGREE WITH THE MAYOR PRO TEM SAID THERE. I THINK I HAVE THAT LENS AS HE DOES. WILL IT KEEP UP WITH. IF THESE CONTINUE IF WE DON'T SEE THE DROP OFF.

WELL, OUR NEW STRUCTURE. KEEP UP WITH THAT. IT WILL, BECAUSE I MEAN, IT'S GOING TO BE UPDATED ON ANNUALLY BY BOB. I MEAN, YOU KNOW, IN TERMS OF THE WATER DISTRICT, I MEAN, I AGREE THAT, YOU KNOW, I MEAN, IT'S HARD TO PIN WHAT WE DON'T KNOW, I GUESS. EXACTLY. I MEAN, WE WE FEEL LIKE THE THREE YEAR. AND DAN SAID THAT INITIALLY, RIGHT? I MEAN, WE'RE MODELING FIVE YEARS, BUT WE'RE REALLY FOCUSED ON THREE YEARS EVEN IN SOME OF OUR OWN, YOU KNOW, MODELING. I MEAN, ONCE YOU GET BEYOND THREE YEARS, SO MANY THINGS ARE CHANGING SO FAST. IT'S REALLY HARD. I THINK WE ALL KNOW THAT, YOU KNOW, YOU SEE THAT IN YOUR OWN BUSINESSES. AND SO WHAT WE'RE LOOKING AT IS THE THREE YEARS. WE'RE WE'RE CONFIDENT THAT THE WATER DISTRICT'S NUMBERS ARE ACCURATE FOR THOSE THREE YEARS OR, OR THEY'RE THEY'RE ESTIMATING AS ACCURATELY AS THEY CAN. ONCE YOU GET BEYOND THAT, DAN MENTIONED IT. I MEAN, SO MANY THINGS THAT COULD HAPPEN THAT COULD IMPACT. THEY COULD HAVE A MAJOR FAILURE. I MEAN, THERE'S ALL KINDS OF THINGS THAT COULD NECESSITATE A LARGER CAPITAL, YOU KNOW, INVESTMENT THAN THEY'RE PROJECTING NOW. OR, YOU KNOW, WE COULD SEE, YOU KNOW, SOME OF THESE, YOU KNOW, WORLD EVENTS COULD CHANGE OVERNIGHT AND INFLATION COULD, YOU KNOW, INCREASE. I MEAN, REMEMBER WHAT HAPPENED JUST THREE YEARS AGO AROUND CHEMICALS AND HOW THAT IMPACTED THEM. AND SO WE'RE TAKING A THREE YEAR VIEW BEYOND THAT. DAN'S DONE THE VERY BEST JOB THAT THAT ANYONE COULD DO.

ESTIMATING BASED ON WHAT DATA WE HAVE FROM THE DISTRICT. OKAY. THANK YOU. THANK YOU, COUNCILMAN BARRIOS. AND THANK YOU, DAN, I APPRECIATE IT. THANK YOU VERY MUCH. ALL RIGHT.

WHAT WE'RE GOING TO DO IS WE'RE GOING TO TAKE A FIVE MINUTE RECESS BEFORE WE GET TO OUR PUBLIC HEARING ITEMS. IT IS CURRENTLY 757. WE'LL BE ALL RIGG COUNCIL BACK INTO SESSION AT

[9. PUBLIC HEARING, ZONING FILE ZF 26-06, AND CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF RICHARDSON, TEXAS, AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND ZONING MAP TO GRANT A SPECIAL PERMIT FOR A COMMERCIAL AMUSEMENT CENTER (INDOOR GOLF SIMULATOR) IN AN EXISTING APPROXIMATELY 3,000-SQUARE-FOOT LEASE SPACE AT 1920 N. COIT ROAD, SUITE 220, ON THE EAST SIDE OF COIT ROAD, SOUTH OF CAMPBELL ROAD, AND CURRENTLY ZONED LR-M(2) LOCAL RETAIL.]

803. AND WE WILL MOVE ON TO ITEM NUMBER NINE, WHICH IS A PUBLIC HEARING ZONING FILE, ZF26-06. AND CONSIDER ADOPTION OF AN ORDINANCE AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND ZONING MAP TO GRANT A SPECIAL PERMIT FOR A COMMERCIAL AMUSEMENT CENTER. INDOOR GOLF SIMULATOR AT 1920 NORTH POINT ROAD. MR. MAYOR, THANK YOU, MAYOR, MAYOR AND COUNCIL.

CHRISTINE ROSS, OUR PLANNER TWO IS GOING TO LEAD THIS BRIEFING FOR US TONIGHT. I ALSO WANT TO RECOGNIZE TINA AND ANDREW, OUR DIRECTOR AND ASSISTANT DIRECTOR OF DEVELOPMENT SERVICES HERE IN SUPPORT. THE APPLICANT IS HERE AND IS, I DON'T BELIEVE HAS A PRESENTATION, BUT WE'LL BE AVAILABLE FOR QUESTIONS AFTER CHRISTINE'S BRIEFING. SO THANK YOU FOR PUTTING THIS TOGETHER.

I'LL TURN IT OVER TO YOU. OF COURSE. YES. GOOD EVENING, MAYOR AND COUNCIL. MY NAME IS CHRISTINE ROSS. I'M A PLANNER. TWO HERE IN THE DEVELOPMENT SERVICES DEPARTMENT. THIS IS ZONING FILE. 2606 A REQUEST FOR A SPECIAL PERMIT FOR A COMMERCIAL AMUSEMENT CENTER CALLED THE BACK NINE, WHICH IS AN INDOOR GOLF SIMULATOR LOCATED AT 1920 NORTH COAST ROAD. THE SUBJECT SITE IS LOCATED ON THE SOUTHEAST CORNER OF NORTH COUNTY ROAD AND WEST CAMPBELL ROAD AND IS ZONED LRM TWO LOCAL RETAIL. THE APPLICANT IS PROPOSING TO LEASE AN APPROXIMATELY 3000 SQUARE FOOT SUITE SPACE IN THE SOUTHERN BUILDING ALONG NORTH COAST ROAD, ON THE WESTERN BORDER OF THE PROPERTY. I HAVE OUTLINED THAT SPACE IN RED. THEACK NINE IS A MEMBERSHIP BASED INDOOR GOLF TRAINING FACILITY WHERE MEMBERS CAN PRACTICE THEIR GAME OF SKILL OR IMPROVE THEIR THEIR SKILLS, OR JUST HAVE FUN. THEY HAVE OVER 200 LOCATIONS ACROSS THE COUNTRY, AND THE GOLF SIMULATOR USES TECHNOLOGY THAT TRACKS SWING SPEED, BALL SPEED AND LAUNCH ANGLES. THAT TECHNOLOGY COMES IN THE FORM OF SENSORS THAT DO NOT EMIT, DO

[02:00:03]

NOT EMIT ANY SOUNDS, AND PLAYERS HIT THE BALL WITH A CLUB INTO A PROJECTOR SCREEN, WHICH MAKES A SOFT AND MUFFLED THUDDING SOUND. THE SWEET SPACE WILL HAVE FOUR SIMULATOR BAYS, AND UP TO FOUR MEMBERS CAN PLAY IN A BAY AT A SINGLE TIME. NO PERMANENT STAFF MEMBERS WILL BE LOCATED ON SITE, AND MEMBERS CAN ACCESS THE FACILITY USING A SECURE DIGITAL ENTRY SYSTEM, AND THEY ARE PROPOSING TO BE OPEN 24 HOURS A DAY, SEVEN DAYS A WEEK. THE BACK NINE WILL ALSO OFFER GOLF LESSONS WITH PGA TRAINERS, HOST TOURNAMENTS, HOST YOUTH YOUTH CAMPS AND OFFER PRIVATE EVENT RENTALS SUCH AS BIRTHDAY PARTIES OR CORPORATE GATHERINGS. THEY WILL HAVE A FEW A FEW VENDING MACHINES ON SITE, BUT OTHER THAN THAT, NO FOOD OR BEVERAGES WILL BE SOLD OR SERVED ON SITE. MEMBERS CAN, HOWEVER, BRING IN THEIR OWN ALCOHOLIC BEVERAGES IN ACCORDANCE WITH THE TEXAS ALCOHOLIC BEVERAGE COMMISSION. THE STATE OF TEXAS DOES NOT PROHIBIT BUSINESSES THAT DO NOT HAVE A LIQUOR LICENSE FROM ALLOWING CUSTOMERS TO BRING IN THEIR OWN BEVERAGES. THE COMPREHENSIVE ZONING ORDINANCE PROVIDES A DEFINITION OF A COMMERCIAL AMUSEMENT CENTER, AND STAFF IS IN THE OPINION THAT AN INDOOR GOLF SIMULATOR FALLS UNDER THIS DEFINITION. IN 2024, A SPECIAL PERMIT WAS APPROVED FOR ANOTHER INDOOR GOLF SIMULATOR, WHICH IS NOW CALLED 214, WHICH IS LOCATED ON CENTRAL EXPRESSWAY. THAT FACILITY ALSO OPERATES AS A BYOB FACILITY, AND STAFF REACHED OUT TO THE POLICE DEPARTMENT, AND THEY ARE NOT AWARE OF ANY CONCERNS. OTHER COMMERCIAL AMUSEMENT CENTERS INCLUDE AN INDOOR GO KART TRACK ON CAMPBELL ROAD AND AN INDOOR PLAYGROUND LOCATED AT ON LOCKWOOD STREET, AND THIS WAS A RECENT CASE THAT WAS BROUGHT TO THE CITY PLANNING COMMISSION AND THE CITY COUNCIL A FEW MONTHS AGO. HERE'S THE PROPOSED CONCEPT PLAN. AGAIN, I'VE OUTLINED THAT SUBJECT LEASE SPACE IN RED. AND HERE'S THE PROPOSED FLOOR PLAN. THE LEASE SPACE IS APPROXIMATELY 3000FT■S, AND IT IS IN A AN EXISTING APPROXIMATELY 1500 ZERO SQUARE FOOT MULTI-TENANT BUILDING. AND THE EXISTING TENANTS IN THAT BUILDING INCLUDE MULTIPLE RESTAURANTS, A PARCEL SHIPPING STORE, AND A BEAUTY SALON. THERE IS NO ESTABLISHED PARKING RATIO FOR A COMMERCIAL AMUSEMENT CENTER, AND STAFF HAS RECOMMENDED A PARKING RATIO OF ONE SPACE FOR EVERY 100FT■!S OF ACTIVITY AREA. AND THIS MEANS THAT THE APPLICANT MUST PROVIDE 30 PARKING SPACES. THERE ARE A TOTAL OF 974 PARKING SPACES LOCATED ON SITE FOR THE ENTIRE SHOPPING CENTER, AND ALL THE EXISTING RETAIL TENANTS. AND HERE ARE SOME SITE PHOTOS. THE TOP PHOTO IS THE EAST ELEVATION TAKEN FROM THE PARKING LOT, WITH THE SUBJECT SWEET SPACE OUTLINED IN RED AND THE BOTTOM PHOTO IS THE SOUTH ELEVATION, ALSO TAKEN FROM THE PARKING LOT.

AND HERE IS THAT WESTERN ELEVATION. THIS ELEVATION FACES QUITE ROAD. ENVISION.

RICHARDSON DESIGNATES THIS AREA AS PART OF THE COMMUNITY COMMERCIAL PLACE TYPE ENTERTAINMENT AND RECREATIONAL FACILITIES ARE IDENTIFIED AS PRIMARY USES, USE TYPES AND.

THIS REQUEST IS THEREFORE CONSISTENT. AT THE MAY 19TH, 2026 CITY PLANNING COMMISSION MEETING, THE COMMISSION UNANIMOUSLY VOTED TO RECOMMEND APPROVAL OF THE REQUEST. STAFF HAS NOT RECEIVED ANY CORRESPONDENCE REGARDING THIS REQUEST. AND THERE ARE THREE CONDITIONS ASSOCIATED WITH TONIGHT'S REQUEST. THE FIRST CONDITION LIMITS THE OPERATOR AND REQUIRES CONFORMANCE WITH THE CONCEPT PLAN. THE SECOND CONDITION LISTS TERMS FOR EXPIRATION AND TERMINATION OF THE SPECIAL PERMIT, AND THE THIRD ESTABLISHES A PARKING RATIO. AND THAT CONCLUDES MY PRESENTATION. I'M HAPPY TO ANSWER ANY QUESTIONS. AND THE APPLICANT IS ALSO HERE TONIGHT. ARE THERE ANY QUESTIONS OF STAFF COUNCILMEMBER DORIAN? YES THANK YOU. MAYOR, JUST ONE QUESTION. YOU SAID IT'S 24 OVER SEVEN. CORRECT. AND ON THE LEFT HAND SIDE, I BELIEVE THERE'S THE UPS STORE AND WHAT'S ON THE RIGHT HAND SIDE OF BAKERY. OH NO, IT'S CURRY. IT'S A RAMEN CURRY PLACE. SO IT MEANS SO THAT MEANS GREAT CLIPS. JERSEY MIKE'S AND THE BAGELS CAFE WILL GO AWAY. WELL, THEY'RE ON THE OTHER. ON THE OTHER SIDE. OKAY.

GOT IT. YEAH. NEVER MIND. GOT IT. I DON'T KNOW IF I HAVE A QUESTION TO THAT. 24 HOUR SEVEN.

I'M JUST A LITTLE SURPRISED. IT'S OPEN 24 OVER SEVEN, BUT I'LL CIRCLE BACK TO IT. THANK YOU. ALL RIGHT, COUNCILMEMBER JUSTICE, THANK YOU. YEAH, IT WAS MY QUESTION. IT STOOD OUT TO ME WHEN I READ THE PACKET THAT THAT IT WAS 247. AND YOU MENTIONED THAT 214 HAS A BYOB MODEL AS WELL, AND THAT'S HELPFUL. DO THEY OPERATE? 247? ARE YOU AWARE? I BELIEVE THEY DO OPERATE 24 OVER SEVEN AS WELL. YES. OKAY. AND THEY ALSO HAVE THAT DIGITAL SECURE ENTRY

[02:05:06]

SYSTEM. INTERESTING. OKAY. THANK YOU. ALL RIGHT. IF THE APPLICANT IS HERE AND WANTS TO PRESENT. HAPPY TO HAVE HIM. THANK YOU VERY MUCH. MY NAME IS ANDERS HULTMAN, 1920 NORTH COYOTE ROAD. THANK YOU SO MUCH FOR INVITING ME TO SPEAK HERE. AND FIRST OFF, THANK YOU FOR THANK YOU TO CHRISTINE FOR FOR PRESENTING THIS VERY WELL. AND ALSO DEREK AND ANDREW FOR, FOR ASSISTING WITH THIS AS WELL. SO SHE MENTIONED A LOT OF THE THINGS THAT I WAS GOING TO SAY.

SO I'LL TRY AND KEEP IT BRIEF TO AVOID REDUNDANCY. BUT A BRIEF BACKGROUND ABOUT MYSELF.

I GREW UP IN SWEDEN MY FIRST 19 YEARS AND I'M A I'M A GOLFER. I'VE LOVED IT FOR A LONG TIME.

AND THAT'S WHAT BROUGHT ME OVER HERE TO AMERICA. I GOT A FULL RIDE AT A SCHOLARSHIP UP IN OKLAHOMA IN 1998, SO I MOVED OVER THERE AND SPENT FOUR YEARS, GOT MY, GOT MY EDUCATION, AND THEN MOVED DOWN TO DFW AREA. I'VE BEEN HERE EVER SINCE. SO, SO I DID, I DID PLAY PROFESSIONALLY FOR SIX YEARS. TURNS OUT I WASN'T AS GOOD AS I THOUGHT I WAS, SO I HAD TO WORK LIKE, LIKE A LOT OF OTHER PEOPLE AFTER THAT. BUT I FOUND FOUND A SPACE IN, IN THE FRANCHISE WORLD AND OPENED A COUPLE BOUTIQUE FITNESS, BOUTIQUE FITNESS STUDIOS, BASICALLY HOT YOGA, PILATES, HOT BAR, THAT SORT OF THING. REALLY ENJOYED THAT. I LIKE IT WHEN SOMEBODY ELSE COMES UP WITH A BUSINESS PLAN, AND I'D JUST BE THE OPERATOR, BUT I'M OUT OF THAT BUSINESS NOW. AND LAST YEAR I WAS INTRODUCED TO THE INDOOR GOLF BY A FRIEND OF MINE, AND I SAID TO MYSELF, YOU PLAY GOLF OUTSIDE. BUT BUT HE SAID, NO, TRY IT OUT. AND SURPRISINGLY, I DID ENJOY IT. AND I LOOKED INTO THIS PARTICULAR FRANCHISE BACK, BACK NINE. AND THEY ARE THE LEADING FRANCHISE IN THIS SPACE. WHAT WHAT CHRISTINE SAID THEY DO HAVE OVER 500 SITES THAT ARE BEING BUILT. OVER 200 ARE BUILT ALREADY. SO THEY ARE THE THE LEADING FORCE IN THE INDOOR GOLF. AND COMPARE THAT WITH SOME OF THE SOME OF THE COMPETITORS, LIKE GOLF, HAS 120. AND I BELIEVE TOPGOLF HAS 60. AND YES, TO SOME OF THE SOME OF THE COMMENTARY ABOUT 24 OVER SEVEN THAT THAT IS THAT IS SOMETHING THAT HAS BEEN INSTITUTED. AND THE NIGHTTIME HOURS ARE NOT USED VERY WIDELY. SURPRISINGLY, THE ONES THAT TURNED OUT TO USE THEM MORE MORE SO ARE SHIFT WORKERS, LAW ENFORCEMENT, MEDICAL STAFF, THOSE SORT OF PEOPLE. THEY FOUND A LOT OF LOCATIONS HAVE A STANDING MIDNIGHT, YOU KNOW, MIDNIGHT HOUR TO GO AND, AND PLAY SOME GOLF AFTER THEIR SHIFT. SO IT'S BEEN IT'S BEEN INTERESTING. I DO PLAN TO HAVE COACHES THERE AND ALSO A PGA, PGA TEACHER. AND I DO PLAN TO HAVE A LOT OF YOUTH CAMPS TODAY. I SPENT MOST OF THE DAY AT PRESTONWOOD COUNTRY CLUB BECAUSE IT WAS A YOUTH TOURNAMENT THERE ALL DAY, AND WE BROUGHT SOME OF THE TECHNOLOGIES THAT WE USE INSIDE OUR BAYS TO THE DRIVING RANGE, AND THE KIDS LIKE IT, AND, AND THEY LIKE IT EVEN MORE WHEN THEY KNOW EXACTLY HOW MORE EFFECTIVE THEIR TRAINING WILL WILL BECOME. I WOULD HAVE VERY MUCH APPRECIATED THAT WHEN I WAS GROWING UP, TO GET INSTANT FEEDBACK AND DATA ON EACH SHOT AND KNOW WHY AND HOW THE BALL REACTED THE WAY IT DID. SO. SO I THINK THAT'S VERY, VERY, VERY HELPFUL. AND IT'S GOING TO BE INTERESTING TO SEE HOW, YOU KNOW HOW GOOD THESE THESE DFW KIDS ARE GOING TO GET, BECAUSE THEY CERTAINLY HAVE SOME ROLE MODELS IN THE CITY TO LOOK UP TO. AND IT'S KIND OF A NICE WAVE RIGHT NOW WITH THE YOUTH.

SO I THINK THIS, I BELIEVE THIS PROVIDES A LOT OF COMMUNITY BENEFITS YEAR ROUND RECREATIONAL AMENITY, LOW TRAFFIC, LOW NOISE. AND IT'S AN AFFORDABLE OPTION FOR RESIDENTS THAT DON'T NECESSARILY HAVE THE FUNDS TO JOIN A COUNTRY CLUB. AND THE LARGE MONTHLY FEES. SO I'M EXCITED ABOUT IT AND I APPRECIATE APPRECIATE THE INVITE TO SPEAK TONIGHT, AND I WELCOME ANY QUESTIONS AND WE'LL ADDRESS THEM. THANK YOU. MR. HOLTMAN. COUNCIL MEMBER DOYAN, THANK YOU. A COUPLE OTHER QUESTIONS. YOU SAID WOULD IT BE AN OPEN 24 HOURS A DAY? IS DO YOU HAVE TO HAVE LIKE A KEYPAD TO GET IN AFTER HOURS AND OR IS THERE SOMEONE MANNING THE ENTRY?

[02:10:05]

THERE WON'T BE ANYBODY MANNING. SO HOW IT WORKS IS THE THE GOLFERS, THEY RESERVE A TEE TIME AND 15 MINUTES BEFORE THAT TEE TIME OCCURS, THEY GET AN EMAIL AND A TEXT AND THEY CLICK IT TWICE. AND THEN IT OPENS UP THE MAGNETIC LOCK FOR THE DOOR. SO WE KNOW WHO COMES IN AND WHEN THEY REGISTER FOR THE FOR THE SOFTWARE AS WELL, AS WELL AS IF THEY BRING FRIENDS, WE KNOW WHO'S THERE. INTERESTING. OKAY. THANK YOU. ALL RIGHT. IF THERE ARE NO OTHER QUESTIONS FOR THE APPLICANT, WE'LL OPEN THE PUBLIC HEARING AND SEE IF THERE ARE ANY PUBLIC COMMENTS.

MISS NEMER, NO COMMENTS. OKAY. IS THERE ANYONE IN THE AUDIENCE THAT IS LOOKING TO HAVE A COMMENT? ALL RIGHT. SEEING NONE. MAYOR PRO TEM HUTCHENRIDER MAYOR. I'D MAKE A MOTION TO CLOSE THE PUBLIC HEARING. ALL RIGHT. GOT A MOTION, COUNCILMAN DORIAN SECOND. ALL RIGHT. WE HAVE A MOTION AND A SECOND. ALL IN FAVOR? ANY OPPOSED? THAT PASSES UNANIMOUSLY. WE'LL MOVE ON TO COUNCIL DISCUSSION. MAYOR PRO TEM HUTCHENRIDER. IF THERE'S NO DISCUSSION, I'M PREPARED TO MAKE A MOTION. IS THERE ANY OTHER DISCUSSION? ALL RIGHT, COUNCIL MEMBER. FINE. I WAS GOING TO SECOND IT. YOU ARE SECONDING IT. ALL RIGHT. MAYOR PRO TEM HUTCHENRIDER HAS MADE THE MOTION. THERE IS A SECOND BY COUNCIL MEMBER ARFEEN. ALL IN FAVOR? ANY OPPOSED? THAT PASSES UNANIMOUSLY. GO FORTH AND TEACH GOLF. THANK YOU. THANK YOU. ALL RIGHT. WE'LL

[10. PUBLIC HEARING, ZONING FILE ZF 26-08, AND CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF RICHARDSON, TEXAS, AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND ZONING MAP TO GRANT APPROVAL OF A SPECIAL DEVELOPMENT PLAN AND A SPECIAL PERMIT FOR A MOTOR VEHICLE BODY SHOP ON 0.4 ACRES AT 409 AND 411 N. INTERURBAN STREET, AND A SPECIAL DEVELOPMENT PLAN AND SPECIAL PERMIT FOR A MOTOR VEHICLE STORAGE LOT ON 0.2 ACRES AT 407 N. INTERURBAN STREET, ON THE WEST SIDE OF INTERURBAN STREET, NORTH OF JACKSON STREET, SOUTH OF DAVIS STREET, AND CURRENTLY ZONED MAIN STREET/CENTRAL EXPRESSWAY PD PLANNED DEVELOPMENT (INTERURBAN SUB-DISTRICT). ]

MOVE ON TO ITEM TEN, WHICH IS PUBLIC HEARING ZONING FILE ZF2608. AND CONSIDER ADOPTION OF AN ORDINANCE AMENDING THE COMPREHENSIVE ZONING ORDINANCE AND ZONING MAP TO GRANT APPROVAL OF A SPECIAL DEVELOPMENT PLAN AND A SPECIAL PERMIT FOR A MOTOR VEHICLE BODY SHOP AT 409 411 INTERURBAN STREET AND A SPECIAL DEVELOPMENT PLAN AND SPECIAL PERMIT FOR A MOTOR VEHICLE STORAGE LOT AT 407 NORTH INTERURBAN STREET. MR. MAGNA.

THANK YOU. MAYOR DEREK PETERS, OUR SENIOR PLANNER, IS GOING TO LEAD THIS BRIEFING, AND BOTH THE PROPERTY OWNER AND BUSINESS OWNER ARE IN ATTENDANCE TONIGHT AND HAVE A PRESENTATION THAT I'D LIKE TO OFFER FOR YOUR CONSIDERATION. SO WE'LL HAVE THAT FOLLOWING. DEREK HAS IEFING. ALL RIGHT. THANK YOU. THIS IS A REQUEST FOR A SPECIAL DEVELOPMENT PLAN FOR THE PROPERTIES AT 407 409 AND 411 NORTH INTERURBAN STREET, AS WELL AS A REQUEST FOR A SPECIAL PERMIT FOR A MOTOR VEHICLE STORAGE LOT AT 407 NORTH INTERURBAN, AND A REQUEST FOR SPECIAL PERMIT FOR A MOTOR VEHICLE BODY SHOP AT 409 AND 411 NORTH INTERURBAN STREET.

THE SUBJECT SITE IS ON THE WEST SIDE OF INTERURBAN, NORTH OF JACKSON STREET AND SOUTH OF DAVIS STREET, AND IT'S WITHIN THE ZONING DISTRICT OF THE PD PLAN DEVELOPMENT. MAIN STREET.

CENTRAL EXPRESSWAY FORM BASED CODE WITHIN THE INTERURBAN SUB DISTRICT. THE. THE BUILDINGS TO THE NORTH OF THE SUBJECT SITE BETWEEN THE SUBJECT SITE AND DAVIS STREET ARE CURRENTLY VACANT. COMMERCIAL BUILDINGS. TO THE SOUTH OF THE SUBJECT SITE IS AN OFFICE AND A BAKERY.

TO THE EAST. ACROSS INTERURBAN STREET IS AN UNDEVELOPED TRACT, AND TO THE WEST ACROSS THE ALLEY IS BISHOP AVENUE, AND IMMEDIATELY TO THE WEST OF THE SITE IS A VACANT COMMERCIAL BUILDING. HERE'S SOME MORE SITE. HERE'S SOME SITE HISTORY ON THE SITE ITSELF TO PROVIDE SOME BACKGROUND CLASSIC. BMW FIRST OPENED THEIR DEALERSHIP ALONG THIS BLOCK IN 1971. CLASSIC BMW RECEIVED A CERTIFICATE OF OCCUPANCY AT THE SUBJECT SITE, SPECIFICALLY FOR AUTO BODY PARTS STORAGE AT THE AT THE SUBJECT SITE AND AT SOME POINT IN TIME BEGAN OPERATING AS A AS A BODY SHOP AT THE SUBJECT SITE. HOWEVER, THEY DID NOT RECEIVE A CERTIFICATE OF OCCUPANCY FOR A BODY SHOP. THE SUBJECT PROPERTY WAS ZONED INDUSTRIAL AT THE TIME, SO ALL MOTOR VEHICLE USES WERE ALLOWED BY RIGHT UNTIL 2008, WHEN OUR COMPREHENSIVE ZONING ORDINANCE WAS AMENDED TO REQUIRE SPECIAL PERMITS FOR THESE TYPE OF MOTOR VEHICLE USES. THEN, IN 2012, CLASSIC BMW CONTRACTED WITH THE BUSINESS OWNER WHO IS OUR APPLICANT TONIGHT. SOLO GARAGE TO BE A SUBTENANT TO OPERATE A BODY SHOP OUT OF THIS LOCATION. IT'S THE. THEY DID NOT RECEIVE A CERTIFICATE OF OCCUP FOR A BODY SHOP AT THIS TIME EITHER. SOLO GARAGE WAS SELECTED BY CLASSIC BMW TO TO BE A CONTRACTOR FOR THEM BECAUSE THEY ARE AN AUTHORIZED BMW TECHNICIAN. IN 2015, THE PROPERTY WAS REZONED FROM INDUSTRIAL TO THE PD PLANNED DEVELOPMENT FOR THE MAIN STREET CENTRAL EXPRESSWAY, AND THEN MORE RECENTLY OR OR OVER THE YEARS BETWEEN 2015 AND 2021, CLASSIC BMW VACATED THOSE BUILDINGS ALONG THIS BLOCK, AND FINALLY, THEY VACATED THEIR COLLISION CENTER IN 2021. IN 2024, CLAY COOLEY VW WAS APPROVED FOR A SPECIAL PERMIT FOR A BODY SHOP AT THE SUBJECT SITE WITH ASSOCIATED LANDSCAPE ENHANCEMENTS AS A CONDITION OF THAT SPECIAL PERMIT APPROVAL. AT THE TIME, CLAY COOLEY VW