that every Yeah. All right. Okay. Good morning everyone. Um, thank you for joining us uh for our water workshop. I'd like to call this meeting to order. Uh, Miss Box, would you please uh call the role? Mayor Paulardo, >> present. Council members Roland Barrera >> here. >> Sylvia Compos >> here. >> Eric Kau is absent. Gil Hernandez >> here. >> Kaitlin Paxton is running late. Uh, Ever Roy >> here, >> Mark Scott >> here, >> Carolyn Vaughn is absent, city manager Peter Zenoni >> present >> and city attorney Miles Rzley >> here. >> Mayor and council Aora the council and charter officers are present to conduct the meeting. >> Miss Fox, Mr. Ku just walked in just for the record. >> Okay, great. Thank you so much. >> U, thank you. So today we will be proceeding uh with an overview of the inner the first part of this work uh workshop will be an overview of the inner harbor water treatment campus alternate project delivery options. Um after we'll have question and answer and discussion after this presentation and then we'll move on to uh an update on water our water supply projects. Go ahead. Okay, Brett Van Hazel. Um, and as you mentioned, Mayor, we will also have uh Sergio, who is our uh director of finance and procurement, and then we'll have Nick Wkelman come up and uh present on the water supply update. So, again, I'm going to be presenting on the alternate delivery options for the Inner Harbor project. Uh Sergio will touch on the update for the Texas Water Development Swift loans and then Nick Winkleman will give an update on the water supply project updates. So just a quick recap um while we're here today. At our last scheduled council meeting on September 23rd, there were a number of council members who uh expressed interest in holding a workshop to talk about alternate delivery options for the Inner Harbor project. So, we put this together. Uh we have a number of options to present. Um also, we've had a number of questions regarding the Kwick contract. So, the Kiwick contract has not been terminated. If you remember, we had suspended the contract uh starting August 1st um after the decision on July 29th's council meeting uh to postpone a decision on amendment five was made. So, we issued a suspension of work uh and we later extended it uh in September after our council meeting. So, we've extended it for the full 90 days that the contract allows. So on October 30th uh the suspension will end and the contract will expire. Um I also want to point out that um the project is fully permitted. We we have all our permits from TCQ. The core we also have uh the um power a uh has already um locked in an agreement with us. They're going to be providing the power to the site. We also have a land agreement that is still active and has uh extension options and we also have deliverables that Kwit has produced over the last uh eight months. All of which is available um for all of the options that are going to be presented either in uh part or whole. So as we work through the different options um we I'll I'll point out what's available and what we um what will be shared for each option. So option number one that we have today is we could transition to the number two ranked design build team which is Axiona. So Axiona is a is a large company. They're very experienced in water treatment and specifically seawater desalination. So they were planning to team up with Masttec in a joint venture. Masttec is a is another large firm who has uh significant experience in infrastructure projects and they had a a large supporting team and the and the uh companies that I highlighted here are local firms that do uh work with the city on a regular basis but there's many more that are captured in the uh org chart. They have a they have a strong team um and they are uh they have we've met with them and they have said that they are willing to continue this project if the city uh chooses to do so. Um so under this scenario the city would continue to own and operate the plant. The design build team would be headed up by Axiona and the joint venture between them and uh Masttec. So the first actions that we would have to take if we chose to move forward with this option would uh be to terminate the contract with Kwit. We would not terminate the contract or we would not recommend terminating the contract with Frieza Nickels as the owner's agent. We would recommend continuing with them given their uh vast experience on this project. We would work with Axiona uh to update the contract and negotiate because we have a number of uh new information uh and updates to the project. We would want to update the contract accordingly. In addition, the Axiona team probably has some changes to their key personnel and and other conditions they might want to discuss. So, we'd work through that and then we would come back to city council uh for approval to move forward with design and at a later date uh construction. The timeline is estimated at 45 months and that would be from the date of approval to actually delivering water. And that timeline consists of approximately 3 months of us negotiating and finalizing the agreement with Axiona. And then we'd have um about 12 months of planning and design and then 30 months of construction. That's consistent with the timeline that we had with Kwit. the swift loans would be available under this option and we would be able to request additional state funding. Uh and if we were unable to get the additional state funding, we could utilize utility revenue bonds. So option number two, we could move forward with U G Coast Authority or we could uh work with G Coast Authority. You've recently seen them here um with Ardura talking about reuse. So um they were in person, so I'm sure you're familiar with some of this information, but they are a political subdivision of the state. They u they come in and help um government uh perform local needs and um functions. It's um and delivering a water treatment facility like this fits into their mission. So their primary um their primary mission has been focused on wastewater treatment. They are uh able to do water treatment and they're willing to work with us um on this project. So under this scenario, GCA would be the owner operator of the plant. It would uh continue as a progressive design build. So, uh what we would what we would propose is to um either transfer, sell or lease the permits, the land and the power. And then on the contract documents and uh the contracts themselves could be administratively transferred to GCA, but all of the other items would need to uh receive approval to do one of those things. transfer seller lease in uh in this agreement. Uh we would have to obviously negotiate with GCA on the details and we'd also have to uh negotiate a taker pay contract with them. That would we're I'm projecting about 42 months for this. Now, about six months of this is tied to um negotiating the um the agreement with GCA. It could take longer. That's that's just an estimate right now. 6 months. I think GCA said 6 months is doable. It could take a little bit longer. And then we'd have approximately uh 6 months of planning and design and then 30 months of construction. The reason for the shorter planning and design is because in this uh scenario, Kiwit's contract would be transferred so we wouldn't lose the uh progress they've made to date. So they would be able to pick up from where they left off and continue on. So it's a little bit less uh planning and design effort. Uh another uh item to mention here is because GCA is not for profit, they uh all the costs are are truly passed through. The only additional fee that would be added on is a management fee. So it would really be the overhead for GCA which would be similar to what if we managed it would be similar. Uh we would have an overhead cost to that. So that is one benefit of uh working with GCA because they're also a government entity. They can also um utilize our swift loans and we can request additional uh state funding to support this. Now, given that this is a transition away from the city performing the project and it's a little bit different uh delivery method than originally proposed, we would need to go back to TWWDB to make sure that they're okay with this option. Um, but I I think it's a good discussion and I think it's something that is doable. In addition, we could work with GCA to come up with additional uh financing options for consideration. So option number three is we could forego the progressive design build process and proceed with a uh design bid build uh delivery process which is what we traditionally do for our projects here in the city. So in this scenario we would own and operate the plant. Uh the designer and contractor is uh to be determined. we'd go out for solicitation uh to get them. So step one under this option is to terminate the contract with both Kwit and Frieza Nichols. We would develop an RFQ for design. We would select a designer and then we would come back to city council for approval of the design. When the design was complete, we would put out a request for proposals. we would get u the bids back in. We would uh we traditionally select the low bidder and then we would come back to city council for approval on the construction contract. The timeline for this is estimated at 62 months. The um we've got about four months for the RFQ for the design. I've got 18 months design. uh the the the main reason for the extension on the design side is because we would have to do the pilot as part of the design whereas right now we're doing uh design and pilot and construction somewhat uh overlapping in the progressive design build process. Uh we don't have that flexibility under design bid build. So we have about 18 months design. Uh when that's all complete, we would do a fourmonth approximately four months for the RFP uh for construction and then we'd have approximately 36 months of construction. Uh and the construction is a little bit longer than the other options mainly because we don't have the ability to do early work packages under this scenario. So I'm estimating some additional time for some of those long lead items. we would be able to utilize Swift loans and we could request additional uh funding from the state on this option. And again, because this is a different delivery option than what was originally proposed, uh we would need to get with TWWDB to make sure that they're okay with this. And if we were unable to secure additional funding, we could utilize uh utility revenue bonds. So option number four again we would forego the uh design a progressive design build delivery option and we could proceed with a public private partnership of P3. So under this scenario the uh P3 entity would be the owner and operator. Uh the designer and contractor would be uh determined at a later date by the P3 entity. Um, under this scenario, we would again terminate the contracts with QIT and Frieza Nickels. We would need to adopt uh the Texas Governmental Code U chapter 2267 which talks to P3 because we currently do not have that adopted and then we would need to work on a agreement with the P3 entity. uh we would need to go out and uh bid it out, select a partner, and then we'd have to come back to city council uh for approval. The estimated timeline is 60 months. The 60 months is built up of about 12 months of the city developing the actual agreement and the RFP. We'll have about nine months for the biders uh you know for advertising uh for them to actually do a design and come up with uh a proposed cost. Once they're on board we'll have about 9 months of planning and design and then we'll have um I'm estimating 30 months of construction which is consistent with the other the other projects. Under this scenario, we would uh we would anticipate private financing from the P3. So there wouldn't be any funding uh provided by the city. So this just captures everything that uh was discussed across the four options. So the the two uh options where the city would continue to own and operate are the options one and three and then options two and four they would be uh owned and operated by others. So that's all that's everything I have on the delivery options. Mayor, are we okay with having Sergio do his slides first before Okay. Uh the next slide here is a uh a nice uh snapshot of information on the Texas Water Development Board loans the city has. Uh so starting with the table of it's labeled Swift loans. The city was approved a total of $760,325,000 of loans. Uh today we've borrowed $235,225,000. Uh funds available to the city to continue to borrow is $525,100,000. Um next table over is our borrowed funds in the state escrow account. Uh the cash balance in that account as of September is 212,578,411. Uh this cash balance in the escrow account is uh is subject to state approval for withdrawals. uh that is not cash on hand we have in our bank or easily available to us. Any draws from these escrow require state approval. Uh lastly we have our outstanding swift debt. Uh so that's the we have a total of 231,145,000 of outstanding principal. Uh with that principal we have interest of 1358,688 uh for a combined total of about 366 million. Um so the next steps uh to to be considered is we would need direction from council on how to proceed with the loan proceeds uh and the swift loans. Uh once we have direction we would consult with our bond council uh our financial adviserss and meet with Texas Water Development Board on how the what the road map would look like moving forward. uh if defecence is considered uh we would have to run an analysis to find out what that cost would be and then lastly return to council with options and recommendations. That's it for my slides. >> Okay. Right. So, we'll go and take um discussion questions um before we move on to the um the our project update, I guess. And maybe we can start um Peter with you giving us an update since we're talking about the uh Swift loan status on on some of the meetings you've had here recently. >> Right. Yeah. So, uh, two days ago, we met with the Texas Water Development Board, uh, with Brian McMath and and a lot of his team members that have been working for the city. So, it's, um, the short of it is until this until we until we have a firm affirmity from the city council, it's hard to know how to proceed, uh, with the loan that we've taken out. And as Sergio said, it's a little bit more complex since we don't have the money in our bank of that 200 some odd million we already borrowed. it's in the state's escrow account of sorts. So, the topic of defeasance because the bonds can't be can't be uh sold, so to speak, or paid off until a 10-year period. Uh generally what you do in this case is is enter into a defeasement as they call it situation uh where we put money into a interestbearing account for that 10-year period with the hope that that interest helps to generate enough interest income to pay for the the debt uh interest that's that's on the loan. Uh but Texas Water Development Board admitted and our I was looking out there early to see if our financial adviserss here from um our barn council I should say. Uh they were with us but it's a little complex and that this has never been experienced before uh from the state. So it's going to be a first time. So we it's going to have to be incremental first. We need to tell the state are we do we want any more of this swift loan? Yes or no? If the answer is no, then we'll move to the next step, which is then how do we defease it over a 10-year period. And since there's no precedent at the state level with the Swift loan program, uh it has to be developed. And so we'll have to work closely with the Texas Water Development Board team. And really the they're deferring to our uh bond council uh uh Norton uh full Norton Rose Fulbright, uh Stephanie Liebe, who's a strong professional. she'll give us good advice and direction. So, but until we make a the next step, the city council, I should say, uh then it then there's not much work being done. So, there's options for the city council and for the city and uh we'll have more affirmity as we provide more affirmity. I should say just to make it clear, Brett said it, but the last action by the city council was to not fund uh not to continue funding Kiwit. uh the when we started down that path, we put a 90-day hold on their contract and uh that 90th day is October 30th when the contract would expire. We have not we have not with certainty told Kiw we're terminating terminating your contract and we hope that input from the council today will give us direction one way or another to either uh keep it open through the to Octo 30th or terminate it officially in writing. Uh they'll need that. We have a the city council, not this one, but the prior city council entered into a legal legal contract with Kiwit. And so there's legal provisions in that contract that guide it. And one of those is is terminating it either by it expiring by October 30th or us telling them in writing that we're going to terminate your contract. So that's another important step that we hope to get today from the city council. Uh one, do we want to keep the contract open to at least the 30th? Or two, do we want to terminate it? And so while there's no vote, we'll be listening to the council and we'll make uh that next step based on the input we hear today. >> Okay. >> Thank you, Peter. >> Okay. >> Yeah. Council, >> if I could just make one comment. Uh could you tell us in plain words what does defeasement mean? >> Yeah. It means that um because we can't pay >> one word. >> One word. You can't do it in one word. >> Cancel. It means cancel. Defement means that we have a 10year No, this defeasement doesn't equal cancel. It's it's that we have a legal obligation to pay back debt and you can't pay it all off in one day. Uh because the investors made a commitment to pledge their money and get a return. At a minimum, we have to pay interest for 10 years. That's something that's already >> So, so you're can we're cancelelling >> if the council wants to canceling the debt, the feesman. >> Yeah. Well, we can't really cancel the loan we took out because we have a commitment to keep it 10 years. >> But the actual loan, we will figure out how we're going to pay it, but it would be actually making the steps to cancelling the loan. >> It would make Yeah, I think maybe what we could say is this, Councilwoman, the total there was a slide up there that showed the total loan approval of 757 or so. So, we would cancel any more issuances of debt, but that first couple of issuances uh that equal about 235 million, we have to pay that back. >> I understand we have to pay that back, but it would actually mean that we would be cancelling any more any >> right. Yeah, the the term defe Yeah, that's Yeah, >> Councilwoman, the defeasence, what it does, it it'll take the debt off our books. Um but it will sit in an escro account and we move that pot of money to earn interest so that it can uh fund itself. >> Uh what we don't know is is there enough principle and interest to fund those payments for the next 10 years and so there may be additional costs to the city to make sure there's enough pot of money in that account that's funding the future debt payments. Um and there has to be enough money in that account. So these are bonds that are going to be callable in 10 years. So at the 10 year those bonds are what's called called and so we pull those bonds back and then we have to pay out all the investors at year 10. >> Okay. But we had a plan to pay it even if we right we had a plan. >> Uh we had a plan to service debt >> to serve the debt. So it's not anything that we didn't know that we had to do. >> The difference would be servicing the debt with revenue from the utility system that's being earned from the rates versus having this pot of money with no revenue gener revenue generated. based slowly on interest earned. And so that there there is a difference there um because you can always adjust rates to make sure those debt service is met versus you really have to have experts calculate how much money needs to be in that account to generate enough funds to pay the principal and interest plus to do the payout at year 10. >> But we wouldn't be generating any money for at least three, four, five years or if not longer. I mean because I mean we just were presented with uh the length of the project. So, how was it going to get paid to begin with? >> So, the debt that we've incurred, we're already servicing that debt. So, that's already factored in through the rates. And so, the revenue being earned now is servicing the debt. >> Okay, we'll leave it at that and let's see what the others have to say. >> Councilman Scott, >> so what's this is interesting to me. Um, so normally we go out and we'll sell $100 million in bonds and we get the $100 million and we put it in our escro account. Is that how that normally works? >> Yeah, we put it in our bank account. >> All right. And then it's we're spending I don't know $10 million a month for 10 months and uh but the other 90 sitting in an account generating some interest. Is that >> generates interest? >> Yep. That I got. But in this instance, the state's like, "No, no, no, no. We hold the account and we dole out poor choice words the money as you need it. That's really >> they they they don't do they we submit uh we submit for reimbursement and they reimburse us with actual proof of expenditure. >> That's a better way to say yeah but my point was we >> it's we don't have the normal ability to to generate interest in in that debt while we're waiting to use it. this instance it's that's I did not know >> it's an estate account so speak and the swift is yeah so it makes it a little more complex and sure what Sergio said to councilwoman compos's comment is that that we have to make sure there's enough money in that account if you do this defeasements >> in the state one thing they did tell us is we're not putting money in if you need to put more money into the escrow account to defease it we have to do that >> and so that that sets up that's one of those steps that has to take place with our bond council how much additional money does the city have to put into this escrow account to make the diffusions work. >> And in this instance, because we're not generating new water, the debt would be repaid by inside city limit customers. >> That's what the opinion is of our legal council. Yes. >> And if you but if you create water, you you distribute that cost over the whole rate system >> over all of our customer accounts over the seven counties. Correct. That's a that's an important uh note, right? I don't think I don't think a lot mean I I if I weren't in this room, I wouldn't have paid much attention and wouldn't have understood that. But if if you're watching, so the difference is if if we have to pay it back inside city limit customers would have to pay it back if we do something and create water, then the system allows us to to spread that cost through the whole seven county or all of our customers, >> right? all the customer accounts. >> Let me first apologize. I'm in the I'm blaming you, by the way, Kaylin. I've had a sinus infection for two weeks and so and she was she had sinuses three weeks ago. So, I'm just kidding, of course, but I apologize for just the state of my physical being. Um um here here are my thoughts. I think first of all, I think it's important for the state to know that that we appreciate them. You know, I I think that we didn't get here alone, right? It's a partnership. Uh, and if we have a different position today than we did yesterday, that doesn't diminish our appreciation uh to TCEQ, Texas Water Development Board, the governor's office. Um, and so I just wanted at least as a council member, and I think on behalf of the city, we want to recognize the work that our partners in Austin have done, uh, and and to some extent the federal government who's trying to figure out ways to help us. Um, and that's significant, you know, because we're we're having these conversations and sometimes it it it it can be conveyed that we don't appreciate u their working with us. And so, at least on behalf of the Scott family, we appreciate the state. Um, I do think the public wants us to be in this room. I'm comfortable that uh as I I said to somebody, they want us back in the ring trying to figure out um uh how to fix this. I think the fact that we have uh two we have a project that's fully permitted uh and I think I think the state wants us I mean the city wants us back in. I think this is an and uh conversation. I said that on when I was sworn in in January. I think water is an and not an or. And so I maintain an interest in uh implementing the fully permitted project uh that we have before us. U I voted for Kiwit. That was yesterday. the council I don't think is interested in pursuing that avenue and I I respect that. Um I um I do believe that the Axiona uh and the Gulf Coast authority uh merit additional interest in review. Um I don't Peter I don't know if you if you terminate Kwit now or not. I don't know that it would matter to me you know personally whether that happens today tomorrow or or you extend it if you could. Um, I like Axiona because they have local contractors. I think that's a good thing. I think local contractors have the local community in its best interest. Um, I think what I heard is that we can we don't we don't throw away we don't we don't we will not have wasted the 50 million spent already if we picked an axion or would they we would I guess have they would start over? >> I think there is work product that's been uh done by Kwit that could be utilized. Okay. >> So, I don't think it's a full loss, but I do think that Axiona in their due diligence is want to going to want to go through everything and make sure that everything's appropriate. So, there is some rework. Absolutely. >> All right. Okay. Uh, and is is there an ICE component to an Aiona? >> We would have an independent cost estimator in that scenario just like we do on the current one. >> Okay. I have always thought that the the backs stop was this acronym ICE independent >> uh cost estimator which is new words for Mark. Um but to me that I've always said that those are those strange people that sitting in the back of the room just kind of waiting with their you know notepads and their calculators and that eventually they're going to come in and and that's when stuff gets real right. They're going to say no it really is $10. And so it's important to me that there's an ICE component. I understand there was with is with the Keywood project and you're telling me there is there would be with an Axiona project. That's important. Um I'm I'm interested in the Gulf Coast Authority. I've never heard of GF Coast Authority before uh Dan brought them a couple weeks ago. They they seem interested to me and I'd like to pursue that opportunity. Also, >> mayor, if you don't mind, can I just follow up on a couple things? So, one, um the Brett went over four options for the city council this morning, but there's a fifth one, which is do nothing. do none of the five. And based on the council input today, we we do we have two business decisions to make. I do as a CEO of the city. So, while there's no vote today, we're going to move I'm going to move forward with with uh with actions in two areas. One, the legal Kiwick contract >> uh because we can't just string it along and it will terminate on the 30th. So either we with certainty terminate it so they can know to move on and we can know we don't have a a legal risk keeping a contract open uh that has requirements to fulfill. And then two, and probably more importantly, the Texas Water Development Board loan. Uh they they have m they have money in that account that we talked about. They talked to us about we could take the cash and relo it to some other entity. And the 535 million that remains, that could be if we don't if we don't reuse it, they don't let us reuse it, then they can use that for some other city or or entity trying to develop water project. So, we'll make a decision there as well with the Texas Water Development Board loan either to to keep it uh going in in its application form or to begin that defeasements process. So, there's two business decisions that have to be made and um and based on the input today, we we'll help make those uh for the city. >> Okay. Thank you, Peter. Uh Councilman Kentu. >> Thank you, Mayor. Um what's a cost per thousand gallons for each option? Do you have that yet? No, it's too too early to say. >> Okay. >> Just want to verify I got like three text messages asking that question. Um and just to elaborate just let's elaborate on it, Councilman. So, u the the two that we go back out and do a whole brand new process. This obviously we don't know who the vendor is, who the firms are. >> So, that's very unknown. The Axiona one, they have told us that um and they're here. our representative from Maxiona Efron Rodriguez is here. Uh he said that they think they could probably get the plant build at a lesser value than the 1.2 billion. So you would think that would would make the prices go down. A lot of the price for the water is based on the technology that's used, the processing, you know, the reverse osmosis and um and so that so that's unknown as well. We just we don't have the the business development for any one of those other three options developed. So it's not that we don't want to do it. It's just the data is not there. understand. >> Yeah. >> Um are you next time you come in with slid slidesh shows and stuff like this, can you put the dates instead of the months just for the public to understand it more like the year month, you know? Um I would appreciate that. Um and then also um what is the GCA's ex uh expertise in del? So I I don't I I don't believe GCA has necessarily expertise in DESAL. They're similar to say the city. Okay. >> We don't we don't have expertise in diesel, but what they do is they bring in people who do. So they would have in this scenario they would have >> Kwit, they would have say Frieza nickels and they could bring on either additional uh um support to manage the project or if they have personnel within GCA that can manage it. But again, just like us, they hire experts to perform the work. >> Okay. And then from wastewater and now being a water provider, that's within a couple weeks. Um, >> did it tell did they tell you anything about that? >> I mean, how they wanted to take care of wastewater, now they want to be a water provider. So I think what what they want to do is help governments uh entities any way they can and they've been uh they have the ability to do water treatment management >> and they're looking to do that. >> Okay. >> And they believe they have the um >> they believe they have what they need to provide that they've already done so in in the uh wastewater treatment arena and they believe they can carry that over into the water treatment arena. >> Got it. My last question is um on the farfield study that uh QIT did um when can that be public to be reviewed independently? >> Are we are we talking about just the data that was provided? >> Correct. We >> wasn't there a farfield study done? So they they they took the data that was collected and they put it into their model and they generated the results. So again as I mentioned before the model itself that they created that's proprietary we wouldn't share but we could we could get the data and we could share that >> and if we decided >> get the other data right >> if we talking about >> the initial data is something that's more readily available. It's information they collect from Noah and and other sources. >> The output is something that nobody has seen and that's something we would work with Kwit to provide. >> Okay. >> Now, if we canceled, if we did terminate their contract, that could be a deliverable from Kwit. >> Okay. Um that is it for now. I appreciate it. Thank you, >> Councilman Betta. All right. It's okay. Thank you, Mayor. Um, what's the Is there any additional costs associated with uh uh terminating the Keywood contract? >> Additional costs? No. I mean, we would we uh we have closed every agreement we could. We've returned all the, you know, temporary equipment. Um, so the only thing that's really open right now are um rental agreements that were already uh going to go well beyond the termination date. So those are still open, but if we terminated today, there shouldn't be additional costs from Kwit. >> But uh and so what's the cost of the rental equipment? And how much have we we expended about 50 million so far or or the total? So through through the end of uh July, we're at 43 million, but we still have to finalize all the other u uh agreements through August. So I anticipated up to 50 million was the estimated uh total expenditure for the project. >> Okay. Um Okay. So you're estimating 50 million and in addition to that's inclusive of the rental agreements, >> correct? That'll include once we close everything out, it'll be in the 50 million range. >> Y >> Okay. Um now, uh I guess at what point so at what point would we run a defeasence analysis? I mean >> um after today's decisions uh that that work can begin. And Stephanie Libey's here with Liebe is here with us from our bond council Norton Rose Fulbright. She was with us. She was with us the other day when we met with the Texas Water Development Board. Uh but there's a lot of critical analysis and our financial adviser Victor Kyoga from Specialized Finance would also uh assist in that. But as he said, Stephanie can probably best answer it. There's a lot of an a lot of critical analysis that has to take place. Financial analysis. Stephanie. >> Morning mayor, council members. My name is Stephanie Liebe. with Norton Rose fullbrite where serve as bond counsel to the city. So, as Peter said, I was with them Wednesday when we met with water development board. And the complicating factor associated with this is that we're dealing with two series of bonds. And so, the city of Corpus Christie issued their bonds to fund the loan from the water development board, but at the same time, water development board issued a larger series of bonds to fund multiple loans to local governments throughout the state. So the question that we have pending with the Texas Water Development Board is in addition to the city having to defease its bonds, does water development board also have to defease a portion of their bonds? And if the answer to that question is yes, what does that defease defeasement look like? Because we only have one pot of money. And so there's only available proceeds in an amount sufficient to fund one escrow fund. And so is that a city of Corpus Christie escrow fund or is it a Texas water development board escrow fund? So that's the question that we're currently working through with water development board. They're working with their bond council with their tax attorneys. When we get an answer to that question, Victor and his team at Specialized Public Finance will be able to give more concrete answers. In conjunction with the Swift loan, the state is subsidizing the interest rate to the city of Corpus Christiey's loan. So, it's going to be more expensive to defease the Texas Water Development Board bonds than it would be to defease the City of Corpus Christiey's bonds. So, I'm happy to answer any questions. It it's a it's a complicated subject matter. This is the first time that water development board is facing this question. So there is a lot of first impressions and legal research that's going on to answer these in the best interest of both the city and the state. >> Okay. So then I mean I guess we probably don't have an answer to how much was it that the interest again the interest that the state was buying down and so if that's the case then would that we'd have to we'd also since we're defeasing not the state then we'd have to would we have to pay that additional interest? I think that that's an open question that we'll have to discuss with water development board. >> Um and then when we met with Fitch and Moody um defeasement would do what to our bond rating. >> Um you know it was less the the issue for we also on Wednesday we met with Fitch rating that was a second rating agency we met with Moody's a few weeks ago. Their issue is really two Fitch's issues was really summarized into two issues. One is excuse me, one is long-term water security and then the second one is having large uh customers uh for which we don't have a take or pay contract in place and we recognize that's a legacy issue that we need to address. our new rate modeler identified that that being uh some of our large customers use lots of water and uh but we don't have a contract with them to keep them as a customer and so if we put money in if we invest into water uh projects uh water production projects and the big customer leaves and everybody else pays for that investment. So those were Fitch's two two biggest issues. Uh similar with Moody's, it was more about water security and um and the ability to to uh continue uh advancing the city at least with water. >> Now, we do have a taker contract with Exxon correct? >> We do have one with G Coast Growth Ventures. Yes, sir. >> Yeah. Okay. G Coast G Coast Ventures. And I know there's been another there's another um industri uh industrial user that that is has requested that they have one as well. >> Right. That's something we're going to work on these next three months. So, how about and this is probably a question for Victor, but um I know of two other municipalities that are issuing debt uh because they um they're they obviously their council has lost confidence that Corpus Christie is going to solve the problem. So, how does since does this also affect their bond rating because we're affecting their long-term water security? It it could potentially. It could potentially. I mean, the the availability of water and the impact that water has on an economy is definitely a factor that rating agencies will look at for both cities, general obligation, credit rating, and utility system ratings. >> Yeah, I know of one that their budget's only 12 million, and they they're issuing 35 million in bonds to uh establish some wells. Um okay so um what if and uh is there a probability of well let's say G Coast Authority um would >> I I guess my question is that could they apply for their own permits? I mean the the the our science the science is public information. >> Yeah. The so G Coast Authority uh was a state enabled uh body. They're a subdivision of the state. The board the governor appoints their board. They were created in 1969 for wastewater management from uh industry primarily then in Galveastston and in the Houston area. Uh in 19 uh in 2015, I mean the legislature expanded their authority to be in the water business as well. So they're a legal entity legal state subdivision uh entity of the state that can apply for permits. So the answer is yes. So just wanted to give you that background. >> Just like the Noises River Authority could >> correct. Well, >> yeah. Well, they have they are Yeah. >> They also have a gubanatorial appointed board that could say, you know what, the technology has already been done. It's public information. We could apply for those permits and we could sell the water to Corpus Christie. >> That's correct. >> So, that option is not on here. I mean, I don't know that I know John's there. And I'm not I don't mean to ask him or put him in a spot. I'm not going to do that. But there there could be another authority that basically says, "Okay, um, Corpus Christie, you could have a take or pay contract with GCA. Uh, they could obtain their own financing through Swift Lond it's probable. It's it's possible that the Noises River Authority could adopt this project and then we we remove ourselves completely from it and they could either sell the water directly to industry or they could sell it to us as a customer." >> Right. Yeah, we we have not asked that question to Noasis River Authority, but um but that's an option. >> Okay. But we but when we had our conversation with G Coast Authority, did we enter into that option? >> That's the option that's on the table, which is that uh we Excuse me. Go ahead. >> Well, the option that I saw here was that we're going to >> um we're going to we would assign the contracts to them >> and then we would sell, >> but they could have the opportunity to do this on their own. They could make an arrangement with uh could they make an arrangement with um Flynn Hills to buy the land, purchase the land from us, purchase the easements from us? So, we could do any combination of the um we have a number of items, right? So, we have their contract documents, the contracts, the land, the power, the permits. So, we could choose to not assign the contracts and the documents and maybe we want to sell them the land, the power, the permits and then let them go do their own thing. That is an option. So, really under this scenario, we're just saying that we have all this available. So, you could choose how we kind of move forward and it could be any combination. >> Yeah. Yeah, but Councilman, you're saying you could throw everything out and they independent of the city council could go talk to Flint Hills or any other land owner, buy land, apply for permits, say, "I'm I'm going to get in the water business and and city, do you want to buy water from us?" Or industry, do you want to buy water from us? That's possible. it would be out of the council or city's control in terms of >> if that's the case then how would that impact our I guess we haven't done any >> well what we do know is if if right now in a good word the city is a monopoly when it comes to water and so that helps our rate payers and that um we have everybody at the table helping to pay into the system if we lose a uh if we lose a customer classification if we lose a city if we lose a certain customer account like a large volume user that means the system still has the same cost more or less um fixed cost especially but now we have less revenue uh to pay the bills and so you have to divide the cost by fewer rate payers which means the price goes up so that's what we're mindful of that's why we're we're working closely with John Bram from the Noasis River Authority and he respects that and his board chair respects that that business uh notion or construct uh because we care we care about the rate payers we care about residents businesses and large volume users in this region And we want the price of water to be favorable for every account. But when you start having additional water providers, uh what can happen is price can go up for the rate payers, all classifications residential commercial, and large volume >> and wholesale providers as well. >> Yeah, I I would agree. I mean, our overhead it runs for I mean it's what capacity 40 million gallons a day. >> Yeah. But in the summertime 130 million gallons. >> Yeah. Yeah. But the but the overhead for the the the system >> probably. So yeah. So yeah, >> less customers even even if we're we get to the point of curtailment and we only have available 70 to 80 gallons million gallons a day. Well, the overhead is still the same for for to run the facility. >> Yeah, correct. >> Reasonably. >> Yeah, that's correct. >> So the rates will still go up even though we have less water, >> right? and then if we lose customers. But I would think also that even though this process is expensive, the blended rates make it more attractive for that organization to sell to us. >> We agree on that. That's when some that's what we have talked to John Byron about which is that we know del seawater desalinization is the most expensive water source right now at least in our portfolio of of water if if we had that water. uh however when you blend it with uh surface water and groundwater it becomes a more favorable rate and one that you can afford more easily right so uh if you just sold del water to rate payers that's going to be expensive water but if you take the cost to make that water and blend it with very inexpensive water sources some of which we have then the rate is favorable or it's you know it's it's a one that a business can afford and a residential customer can afford. Um and then one other question for bond council. Um so um private equity there's a cost associated with it. So what any idea of what that interest would be in comparison to I mean this is a victor question really what that interest would be in comparison to the u Texas water development board rate. Well, I think it's that that is going to be dependent upon somewhat the Texas Water Development Board, right? Especially if you have if we're talking about GCA and GCA's ability to go to water development board to get either a Swift loan or some other loan through a water development board program. That certainly could be an option, but that is an open issue that would be subject to both staff recommendation at Waterboard and Waterboard approval. If you're talking about true private equity, as in they go out and get a commercial loan for a facility of this size, then I think you're looking at a substantial um increase in the interest rate as compared to the interest rate that the city currently has through the Swift loan. Okay. Thank you, >> Councilman Hernandez. >> Okay. I'm I'm glad you're up there because it this kind of I want to understand how this loan bond process works considering the Texas Water Development Board and then them buying our bonds. So, >> when the state sold the bonds, was it specific to our project? >> Your project was one of many that was selected for inclusion in their bond program. So their bond when they sold their bonds, it was many projects. Was it was it assigned based on what was approved by them or was it done just by the region end plan? >> No, it was based on projects selected by the board. And so the series of bonds that water development board sold to fund loans in that year was somewhere between$1 to$1.2 billion. >> Okay. But it was not completely specific to our >> it was not completely specific to Corpus Christie. Okay. But walking through the loan program and the application process at milestones within that process, water development board will reach out to the city's financial advisor. So they reached out to Victor and Victor's team to get the interest rates and to get the repayment schedule for the city of Corpus Christiey's debt. >> Okay. So >> okay with with that >> the swift swift loans are the Texas Water Development Boards buying our bonds specifically. So they are the complete owner of our bonds. >> Yes. >> Okay. So the defeasence would be paid to them to the Texas Water Development Board. There's no it wasn't like it was sold on the open market to uh you know for sale for >> correct >> for institutionalized purchasers. Right. So it it's really the Texas Water Development Board that is taking those payments. >> Correct. >> Okay. With that in mind, there was some aspect within the letter they sent us that talked about uh public um utility authorities that could be utilized for that. Did we take a look into any of those in there because it's not in your presentation about public utility authorities, PUAs? >> Uh we have we uh we've talked about it internally, Councilman Councilman. We didn't we don't have it on on a list here, but the last letter that the development board sent was pretty specific on the monies could only be used for that the inner harbor del project at that location. So we could go and if we wanted to do some other project, we would just go back out and reapply. So that's what that's I think would be the answer that if a public utility was created that the legislature enabled the creation of in this last session >> then that could be created uh it could develop a project and it could also apply for new Texas Water Development Board loan funding. >> Yeah. And I think something that maybe doesn't get discussed is the competitive nature of the Swift program. Texas Water Development Board has multiple programs that they offer loans to local governments through. The Swift program offers the highest interest rate subsidy. So, it is like the premier program that you would want to loan from if you are a local government. They have uh clean water revolving fund, drinking water revolving fund. Those may or may not offer um interest rate subsidies or some type of principal deferment. def fund that is operated through the development fund that's operated through the water development board offers no interest rate subsidies and basically you're just getting the interest rate that water development board gets when it comes to assigning a swift loan commitment to another local government or to another entity that would issue bonds even if it's for the same project water development board at a staff level will not say whether or not they would recommend that because for the Swift program they rank these projects. They rank the projects based upon the region. They based they rank the projects based upon the benefit that's provided to the community. They cannot say that they would offer a swift loan for the same project without knowing who the customers of that project would be because they wouldn't want to commit the state to that same interest loan subsidy without that additional information. So the same project, the same physical project may not rank the same way through their application process based upon the financing structure and who the issuer of those bonds would be. >> You know, the benefit of having a PUA or even working through another government entity like either the Noise River Authority or the or GCA is that the debt would be on their books and not ours. Correct. Well, the debt would be on their books from an accounting perspective. The obligation to repay would still be on the city's books, >> right? We would still have to pay. It's just a matter of where that debt sits. >> Yeah. The debt uh so let's say GCA, for instance, um they have that conduit debt, but there is a financing agreement which would then put long-term liabilities on our books. So, there's no way around the debt. There is no offbalance sheet debt accounting. Uh Gazsby requires us to book whether it be a bond debt which is long-term or long-term financing or a financing agreement. Uh that debt will go on our books. Uh there's no way around that. >> Right. Can and you know I went and looked at GCA in terms of how much debt they actually carry right now and they they carry $102 million in debt. Um nowhere near the kind of project size this would be. uh you know, you know, not to say that they're not a a good organization. They're just not I just don't think they have the the the experience or capacity to manage a a program this size or a project this size. I could be wrong. I don't know them personally. >> I I don't know GCA personally, but I have looked up the amount of their outstanding debt and I believe that's accurate figure, >> right? um you know there you know we haven't explored the option of of transferring some of this to another approved um process through the water development board and we haven't asked them the the whether that they would be willing to do something like that correct >> the PUA councilman >> no no um we have other region end approved projects right >> right >> and so we haven't actually formally said okay we're not doing this we're doing these other projects Can we transfer those? >> No. Yeah, we asked them that. So, the last letter that was sent and we talked to Brian Mcmath about that on Wednesday. They have they in that last letter that was sent to the city council, it was very clear in the letter that this that the >> but the board has not approved anything. Right. >> I'm just going to finish then I'll answer that second question. So, they said the loan that we have today can only be applied to the project at hand, which is the inner harbor desolization project off Newasis Bay Boulevard. That's it. If we don't want to do that project, then we can reapply for some of the site, some of the projects. Okay, that's clear. >> So, we have not applied to the Texas Water Board to have an actual approval or disapproval >> of a of a of using the same loan for a different project. >> These are just conversations with the Texas Water Development Board staff. It has not gone to the board for their approval or disapproval. We we've been told by staff that it would not be staff recommendation for the board to approve. So has an application been made to the board >> to reassign the commitment? No, that formal application has not been made. >> Okay, I understand. But we've been told by staff >> the reason I the reason I say that is because we get recommendations from staff all the time and sometimes we go with it and sometimes we don't. So we have not actually had the opportunity to ask that formally in a formal way to the Texas wateredman to get absolute certainty. >> Right. That's correct. If you want us to do that, we can councilman. What they do have is what we did send them in writing is a request to delay the installation of the next loan u tranch till next year. And what they told us Wednesday is that will go to the board in either November or December. That answer from the board. So, if the council wants us to ask them officially in writing so they can place it on their board, we can we can do that. >> Okay. Thank you very much. >> Okay. Um you know I think that we're we're going around a whole lot of different um things uh regarding this very important topic you know which is what happens here which this is a very very big deal in terms of what direction we go into and how it affects us how it affects you know I hadn't thought about that somebody asked the question about how it affects those that we that we deliver water to and and can it and the answer is most likely I think you said um you know but at the end of the day we're looking at options and I think it's very important and there must be a sense of urgency because we're dealing with the second part of it which is how does this affect us financially? How does this affect our bond writing? How does it affect our neighbors? Um but what we're trying to do here is secure a long-term water supply and and I think we need to stay extremely focused on that. And today is the opportunity. We must do something. We we we did something. The majority of this council did something and and that's respected because that's the way the process works. But today we have options before us to move forward something that has been moving forward that is going to be a uh solution to a long-term water source. And and the clock is ticking. And so they've given I'm going to ask whoever's laughing and and making noises to please stop. If you don't agree, that's okay, but please don't be disruptive. um the options before us. We we must give staff direction in one way or the other so that we can actually move forward in how we are going to address this because there has to be a solution. if we don't move forward with with something u that's on you know that's been presented to us today which to me you know a P3 doesn't really make sense to me because you would go to a P3 if you don't have the upfront capital you don't have the capability to build it or to operate it and or the provider is able to to build it for much lower than what we can and and we check all those boxes it. That's not something in my opinion um that benefits the city or the rateayer. Um option two, which is one we were talking about with GCA, um seems to make more sense to me, but I'm very open and I'd really like to hear from everyone um to to supporting something that the whole council can agree on in terms of moving forward. Councilman Mory, >> thank you. Um, so I I want to kind of regress and go back a little bit in terms of um my position as far as um del the inner harbor you know um at the last vote that we had I voted no. I voted no and I stated the reason why I voted no is because unfortunately whether QIT is a good organization or um nothing personal but I I lost um faith in their ability to partner with us for several reasons. Um, as I mentioned before, we went through this entire process when we were looking at the 10% 30% 60% and trying to judge what the cost would be. And maybe that was incorrect. And I and and when I look at staff and how staff directed us to basically sit through two two-hour meetings with that individual that sat down and explained us what would happen and it just didn't go down that way. Um, and I think that's where in my opinion the train got off the tracks. Uh, and and so I look at um what's the next step because we have to have a a next step here. I think it's important. I want to use an analogy which I think I hope everybody understands, but when we talk about great basketball players, Michael Jordan, um, Kobe Bryant, we always call them a triple threat, right? Well, the city, if we're going to be a great city, we have to be what I call a triple threat. We we've already we we hung our hat on surface water. We've done the most that we can in terms of trying to make surface water uh work for us and meet our needs. That take pay contract that we have right now. We're short. So we actually I think staff went through and and got us another 10 MGD through Formosa. Is that the right company? >> Yes. >> So we we got creative. We've been creative. Now we stepped up and we've looked at groundwater and we bought 23,000 or we're in the process of looking at 23,000 acres. We have 250 acres. We've got some other wells along the new Oasis. So, we explored that. And with that, there's some positives and there's some negatives. And we're starting to see some of the negative parts of putting our eggs in that groundwater basket. Right now, it comes to the Inner Harbor project and Delaw. That that's another aspect that um gives us the ability, I believe, to be well-rounded. and be a triple threat. For the most part, we spent an inordinate amount of time going through and working and talking with the public about whether or not it would harm the environment. And I think most of council felt like we were briefed adequately on that. So now we're at this decision point where we've got to go ahead and move forward. And um this might be an accounting question, it might be a business question, but in my opinion, in my world, when it comes to assets, and I definitely look at option number one and three as being a favorable asset uh or or direction because we own it. I I think it's a little bit and I think this is what this the our our raiders are saying is that we take the risk of getting involved in something and we don't own it. We rent it for a period of time. And yes, I know that sometimes when I look at contracts and I say, "Okay, they have a lease agreement in place that's long-term that I'll consider that as an asset, but it's not as strong as if you own it." Um, at the end of the day, when you buy a car and you lease it or you lease it, you got to give it back at some point. So options to me options one and three are are the options that I'm looking at. I feel that um it's important and I've been asking since we convened in that last meeting to come back and take a look at who was in the second position. So that's pretty simple for me. Um that's where I think where I'm headed. Uh, I think we need to continue to try and and we're so far along with this process that we need to be able to to to complete it. And so with that, again, I'm strongly my because I think we're here to to give our opinion and talk about what are we going to do? And my option is one and three. So I want to thank everybody for their time and I I would like to explore those opportunities more. Uh, I'm not for option five, which is to do nothing. I I think at this point doing nothing could hurt us. >> Thank you. >> Thank you, Councilman. Councilwoman Vaughn. >> Okay. You said that we had spent $43 million and that you expected to spend the whole 50. Correct. >> Up to 50 million. Yes, ma'am. >> So, what's left to spend if you've already let go or y'all aren't doing anything with Kiwit freezing nickels? What's left to spend? I'm trying to figure out what that other seven billion's. >> So, we still have a, as an example, with our Nigh House, which was our um pilot plant uh provider, we have a six-month lease on all that equipment that we haven't completely built out. >> So, there's other elements tied to that uh pilot plant that we still have to demobilize, send stuff back. So, I don't know what that cost looks like yet. It's going to be under 50, but um that's a good placeholder right now. But >> when's that lease up? That six-month lease that you had? >> I want to say it was November. Um November December. >> And you don't remember what you leased what the lease was? I'm just curious. I >> Well, we we we received it in May >> time frame, May, June time frame, and it's a six-month lease, so it's around >> But you don't know what the lease amount was? >> I don't have it on hand, ma'am. I I'd like I'd like to know that. I'd like to know that. I'm I'm just trying to figure out what these other costs are. >> That's important to me. And the other thing I want to ask is GF Coast, you know, when we talked to them, they were going to we were going to be talking about wastewater reuse. So, how did they get involved in this? Who initiated them to come in and partner is my understanding with Kwit? Who initiated that? So they they had uh I've been in some of the meetings with the reuse and they uh they had reached out to us and we had reached out to them regarding the um their interest in this project and u they expressed that they were wanting to uh transition or they were interested in transitioning and into water treatment. Mhm. >> So, um I had a meeting with the GCA team just to talk about the project and what their thoughts were and they expressed an interest. So, then we've had uh follow-up meetings to just talk about how that relationship might work similar to how we met with Axiona to to gauge their interest and continuing as well as uh other individuals just to see what they think. >> Okay. As far as freezing nickels goes, I have a really bad taste in my mouth on freezing nickels. So, I really don't care if you eliminate that contract. I'm just saying it. Nobody else may say it, but I'm going to say it because I think that's one of the reasons we're in the position we are now because we didn't get the real cost. >> Here's my problem. These look like some good options actually, but here's my problem. We still don't know the cost. We're still the same place we were before when I said I want to know what the cost is. Is it going to be $1.2 billion? because our rateayers are not going to know what they're going to pay. We don't have any contracts with industry. Industry wants it. They haven't stepped up and said, "Hey, I want it. Let me do a contract. So, we're going to go get this water. We're not going to have anybody to sell it to. If we if it's ours, we're going to have to pay for it." And it falls back on our citizens every time. And that's my concern. I'm not saying no. I'm just saying there's answers that aren't answered. Questions that aren't answered, Mr. Cone. >> Right. Because we Right. we we don't have the information to answer them. It's not that we're not trying to, but it's just >> like if we went to number two bidder Axiona, that's one of the uh default that's one of the uh issues there is we still don't know what the cost is. >> No, we have no clue. >> Could be the same or more or less. Yeah. Yeah. >> We have no clue. The only Huh. design build, >> right? And this and the process the council chose and that we recommended and the council selected the last term was this progressive design build. And that's different than the design bid build. If we if there was a choice to go the other way, it would have taken longer to produce the product. But the that's how we do our roads and and other smaller buildings. So, it's designed there's a there's a professional engineers estimate. We put it out for bid. The bid pricing comes in and generally it's within that engineer's estimate or less. That's not the process we used here. >> Yeah. >> And so, that's where we're at. >> Well, and it's for me, I don't care if the city owns it. That doesn't matter to me. Yeah. >> And I certainly do not want them to operate it. I'm just being honest. They want our opinion. So, we should all be saying, "Do we want them to operate it?" I do not. I think you have enough on your plate already. And the cost for operating it. We're guessing that, too. And to look at the other plants around the states, it is very expensive to operate and maintain these del plants. Very. I mean, there was one that was had to the state had to give them money. I think it was California. Maybe it was Carl'sbad. We saw it in the news a couple weeks ago. So, that's a real concern for me. I'm not being a Debbie Downer. I'm just saying my concern is the cost that has not changed, Brett. It hadn't changed. So, I mean, we don't we don't have a clue what it is. We still don't. >> We don't You're correct. Yeah, that you're right. And you and I have talked about that before, the other part, which is the city doesn't have to own and operate and run all the water projects. Uh many cities, many water authorities buy >> through take a pay contracts uh water. So it's um some of those other options are ones that are that have merit which is we just do a take or pay contract for water and then we're not in that operating business. So >> no, >> we don't know if the cost is cheaper or more expensive because we we don't have a proposal in front of us >> right now. Um but it's an option. >> Okay. And the other thing is, you know, I keep hearing you say Newasis River Authority. What were y'all wanting Newasis River Authority to do with any of these projects? I I think Noasis River Authority, similar to GCA, is another uh entity that could in theory uh take over the contracts, take over the permits, land, and and perform the work. >> I can't I I can't speak for them, but I can't imagine with the big project they've got, Harbor Island, that they would even want to do that, but I just wanted to ask that question. >> Yeah, Councilwoman earlier I said we weren't sure, but Nick reminded me that Nick did speak with John Byum, who's here today with us. Both are John and Nick. And they said they would and they would consider it. I don't think he said um heck yeah, but he said they'd consider it. They consider evaluating it, meaning they could take over the the project. We could turn everything over to them and they >> Yeah, considering it and saying heck yeah are two different things. I say I'm going to consider a lot of stuff, >> right? >> Um I guess that's I'm I'm without words here because to me it's the same thing. I don't know what the cost is. I don't even have an idea what it's going to be. And I'm worried about our rateayers. I'm not worried about the industry. They got lots of money, you know, but I am worried about our rateayers. Okay. Thank you, Councilwoman. Um, so I guess I I'm not sure why you're not saying this. I'm not sure why you're not saying this, but when I hear that and and I I under it's it's funny. I understand. I think we're we all have a concern for the cost, but we have to go down one of these paths to find that cost. So why why aren't y'all saying that? I mean, in other words, you don't have a this isn't a, you know, catalog of let me open it up and and and see what is deselination cost. We just learned to your point that the cost that was given to us was very high, right, compared to other things. So, if we want a cost, we've got to we've we've got to choose like one of these options to look at. And and to your point, Councilwoman, if you're interested, it sounds like in something the city wouldn't be owning, right? Which is option two and four. >> I don't care. >> Hold on, >> mayor. I It doesn't matter to me. Does It really doesn't matter. That's not a big issue for me, but I'm wondering, can you not go to a cost not to exceed amount? Would you look at that? Can we do that? >> Yeah, that would be Would that be a uh CM construction manager at risks? >> We could even do that under progressive design bill where we set a a cost threshold, >> but we have to be flexible in the scope because if we if we dictate a certain uh let's say just keep it as a 30 million gallon day plant and we set a not to exceed amount, they may or not be be able to achieve that. So, we have to be flexible. They may come back and say, "We can do it for this price, but maybe we only get 25 million gallons a day." >> Well, right. But you're still setting a cost. You're still setting a limit, a ceiling. >> That's absolutely available under the existing progressive design bill. And >> well, because you think about it, we all have costs not to exceed. There's only so much money we can spend as families. Government should not be any different. They entrust us to spend their money. We should not be any different than that. It's just a question, just an option. Well, and keep in mind too that u the capital cost upfront doesn't necessarily dictate your cost to the rateayer. So the operational expenses also play into that. So usually if you go in, let's just say into a not to exceed amount and you maybe get lesser quality products, you reduce the facility size and type and materials etc. You may compromise some of those. So you may pay more operational expenses over time. So you it doesn't necessarily equate to lower cost to the rateayer. So um just keep that in mind. Setting a not to exceed doesn't necessarily equal less money over time. >> And I get that. But the last thing I want to do is go do a del plant and get products that aren't up to par because you're going to pay for it in the future. I know that. So that's not what I'm saying. I'm just saying there can be an amount. I mean, we shouldn't just say, "Hey, spend whatever you want." That's basically what we did with with Kiwit 1.2 and it's probably be more than that. >> Were you going to say something? >> No. I mean, that that wasn't the case, but I understand the the sentiment. Yes, ma'am. >> Okay. So, Councilwoman, you said you're not necessarily against city owning and operating. Um, it's okay. I'm not put you down for this, >> right? Councilman Bonetta, >> am I gonna get to speak again because of on the other part of the presentation? >> Yes. Thank you. >> So, um, we also don't know or we haven't been able to determine the cost of option number five. >> Uh, that's correct. That's a big go. That could be a big cost. >> Okay. >> I'll do nothing, you know, but we do have later in the presentation, we're going to show you alternate water projects that are in development. Um so >> but yeah and we don't know we haven't determined what the cost is of any of the alternate water to projects. >> Uh we have we some of them have better estimates yes than others >> but they're estimates. >> Um yeah but like I said some of them are more uh if you just take say for instance the um evangeline project we're getting better information to be able to determine what that project will cost. >> But it's an estimate. >> That's right. >> Yeah. It's an estimate. >> Yeah. >> Right. >> So we don't we Yeah. That's my point. We don't but we don't we haven't determined >> the the cost of option number five which would have no rate impact on industry. >> I mean other defeasement is not going to have any rate impact on industry. Anybody that has an IDA >> uh because they're outside the city limits based on the legal input we're getting that would be correct. >> So the rateayers of the citizens of Corpus Christi are going to have to bear the cost of defement. I just want to repeat that. Yeah, that's well based on the legal advice that's correct. >> Okay. So, in addition, um the I hate the timer going off when I'm when I'm stubb stuttering. The in addition the cost for producing 80 million gallons a day. I guess the the cost is going to remain consistent or the cost is going to increase because if even if employee even if individuals are curtailing the co the and I'm going to say that again the cost of the overhead remains the same example is that when we brought on GC G coast Gross Ventures everybody's rates went down >> that's correct because they bought so much water that uh you know we brought in more revenue and then everybody else's rates went down >> everybody's rates went down so now we do know that if we do nothing and we go into curtailment, everybody's rates are going to go up. >> Well, the way curtailment works is just that is that you force reduction in water use by higher pricing. >> There's no val. We're not turning off valves and and not delivering water. We don't have that tech. We don't have that in our system. >> U there's no valves to turn off people's water, but you do it by higher pricing. So, we'd work with the city council to set a new price for water. Uh, hoping the market and market pressures would drive reduction in use because there's no valves. We're not we can't turn off your water or >> Exxon's water or you know, Waterburgers's water. >> And we've talked to the military that they said that curtailment would be very very difficult for them as well as the escalating cost. >> Can you repeat >> the army depot? Yeah, it would be they it would be a problem from them for them as well, >> you know. So I I understand that the army had basically stated that the escalating costs would be very very difficult for them to continue to operate. >> Yeah. But it would probably be the same for many businesses. Correct. In industry. >> So um well the residents I choose to live here so I'm going to go ahead and pay whatever it is. So I might if I have to pay $70 then I'm going to pay $70 because I choose to live here. But as far as a a um a as far as in a capitalist society, if a industry decides to invest here and there's a escalating charge of co with using less less uh uh less product, then they're going to personally make a decision to leave. including the military, including the companies that manufacture ibuprofen, including the companies that manufacture uh medical equipment, medical prostesis, then so so all of those uh would have to consider move moving somewhere else. Okay. Thank you, >> Councilwoman. Uh Compos. Oh, well, I was waiting because I've already spoken once, but can I go ahead and let Councilman Paxton go before I do? >> Sure. Go ahead. >> Thank you. So, um I was very curious to see what the presentation today was going to be about because when we visited this last uh we were told basically if we didn't move forward with amendment five it would it would have some pretty serious consequences like finalizing contracts we wouldn't move forward with these. So I was interested to see the information with that being the previous understanding. Um, what I don't see in any of these slides is a big departure from the scope, cost, and basic elements of the project. And how could we really because it's the same project. Um, and so I would argue, I've heard some colleagues say that we don't, you know, um, I think the mayor said it a moment ago that the only way we could determine the cost is to actually pursue one of them. And I would argue that, you know, once upon a time, I I had to buy a piece of equipment and I had three sellers offered to sell me that equipment. And what I discovered was all those costs were a little bit different, but when I went to the actual manufacturer, the true cost of that product was the same. They were just passing on their cost to me. So this project has a reasonable parameter for which it will cost. So regardless of who offers to sell it to us, it will be the same reasonable parameter for this project. So whether that's option one, two, three, four, we are still basically going to pay the same exemplance of the same cost that previously in the last several weeks we have said was too high. I think we all you know several of us have said that's just too high only now because we did make a decision we did say that's too high. we would like to pursue other options. Now all those same costs are even higher because now we have this old debt. Now we have fragments of a project that we stopped. So I think we could all reasonably say project options 1 through 4 is going to be the same or higher than what we said no to previously. If another group wants to come in and ask to take it over completely, that's up to them. But then they'd have to find the customers. And that's a problem because what we did, Mr. Zenon, after we made a decision, we said that cost was too high for the for the benefit that we were getting. And when I say we, I say the majority, it was a vote. Um what we did was we very quickly earnestly focused on all the other projects and skipping ahead in the in the book here in the presentation that has given us a pretty decent yield of almost 70 million gallons of water that we that we're ready to take. We have moved efforts towards that. So now we're putting us ourselves in a position where we have focused our efforts on these other projects and we are going to reap the water that we need from these other projects. Now are we looking at spending the same money that's too high for water we've already secured? We don't have customers at this point yet. And I say that tentatively. I think on our next council meeting we have an action item that's going to secure a longterm sustainable feasible reliable project for marine del. We all know that that's the future but we don't have to be the ones to pay for it and the overhead. So I would argue we know the costs of option one through four. We may not know it to the exact dollar but we know it's above the budget that we've wanted to to pay for. and we have made incredible progress. And the one thing that I don't see in these presentations is the fact that none of these options prevent curtailment. So that shouldn't actually be no offense um what was said a minute ago from Mr. Barrera. These don't these don't prevent curtailment. That's the reality. We are talking about a long-term water supply which we're going to take action on. one of those options next week on Tuesday. So, for me, I I I'm I'm interested because this is new information, but none of it actually changes the project. And as far as setting a cost uh not to exceed, we could set a dollar amount. And you said we'd have to have some flexibility on that. But if I was to say I'm willing to pay 600700 million for a marine del plant, I would not want them to come back and say okay I can do that but for 10 maybe 20 million gallons a day because now my cost willingness is going to decrease. So I don't think that it's wise to even try to put an unrealistic expectation on a project because I don't want to be a bad partner with these vendors. I don't want to walk up to Q it uh Noises River GCA anybody and say I insist on you meeting this cost when I know you can't. That's not good business. >> Councilman uh Roy, >> I think it's >> Oh, you were next. Yeah. Let me go back to you, Councilman Goples. Thank you. >> Okay. All right. So, um you know, we're still getting information. uh just up to last night uh we were asked about the independent um far uh farfield modeling and what the modeling was done. So no, it's not conclusive. Um, and we still don't know that. Um, so the other thing is, let me get this straight. So when we applied for the loan, we did not have any guaranteed way to pay this. We didn't have I mean, you know, obviously we didn't have a pay or go contract with our indust industrial users because it's again it's back on the water users. So whatever we're doing right now, we have to pay. The heavy industrial uses that uses more on on the water department's terms is 51% of our water. 51 based on on y'all. I I believe it's way more than that. But we're going to go ahead and base it on what the water department says right now, which is industry uses about 51, if not more percent of our water. But yet the bottom line is that the cost goes back to us, the 300,000 customers, residential customers that are here. Um so anyway, I I still feel that the um the place where uh the inner harbor is, you know, uh being looked at still needs an independent review. uh I don't think we we have concluded with that. I also cannot again uh believe that we don't have a take or pay water contract except for the one that we had with Exxon and then they came back and renegotiated because I believe it was 25 MGD. Then they just came back last year and lowered it to half. So again, we go back, we make these contracts, and then we say, "Okay, you're excused, you know, or else um they would have been continuing to pay the 25 MGD just like we have a contract with our residents." We don't go back and say, "Oh, well, you know, uh since uh you know, industry is paying more, we're going to let you pay less." Until just now. But right now, as a matter of fact, I'm I'm looking at at some of the um um the people out there, and even to this day, to this day, we still have I think at least three uh industries still fighting their their water utility rates. And you know why? Because they're outside the city limits. Again, not fair, not right. One of them is London Basil. They're right here. and they are still petitioning their water rates. Uh so they may have you know all this money but yet because they do have the right and I don't blame them. They have the right to petition which they are but again it it becomes unfair to the water user. So uh I'm still a no on this. We still don't have a final amount and thank God that we did move because of our councilman Vaughn moving on pretty quickly on these groundwater ve uh wells that we are getting a whole bunch of water at a fraction of the cost. So, and it was because of her direction and uh and us as a council agreeing. So, again, we've already voted on this. We already said no. It was 6 to1. So, I don't even understand what we're here for. >> Um, so I'm I'm sorry. Can y'all please stop? >> Thank you. Um, so the reason we're back here, Councilwoman, is because multiple people said, "We're not against Del and and and those were people that voted took the same vote and we respect that, but but it was said multiple times by multiple council members. We're not against Del, but maybe the price. I'm not against Del, but whatever location or or what have you, but that's why it's back. And and we're here to make we have to make a decision. Not today, but we're here to give direction. We have to move forward and and there must be a solution. If we do not move forward with one of these options, we're we are responsible for the long term. That is our job. So, so it's part of this this conversation. So, but that's that is why. >> Yes. >> Okay. And I do I do want to also make a a statement about our our water situation. The reason that we are, you know, the state and uh you know, everyone else is looking at us. It's because for one thing, we never stated what we actually needed in water. We keep saying we're running out of water. We're running out of water. But what does that mean? I mean, I believe Councilman Baretta just mentioned that our water department is based on 140 MGD that it can take 140 MGD to process. Is that correct? >> Yeah. So, anyway, I is that correct? >> Uh Nick Wkelman, interim chief operating officer, CCW. Uh Councilwoman, one thing that that we need to look at, we've got to look at both treated water, right, and and raw water. So treated water today Owen Stevens produced about 84 million gallons a day. Raw water sales uh typically it's in that 20 to 25 MGD right improvements. Our strategic plan at Owen Stevens >> was to get to improve the plant to be at a point to have a reliable treatment capacity of 135 MGD. >> Okay. And that number is uh so PE Dawson did a water master plan for us. That number is included in that master plan. One thing that number didn't include it included residential growth. It didn't include >> and what is that number? What is the number that is our goal to reach? Because I asked you that last week. I asked you what is the goal of Corpus Christie water department? our water goal. >> So the the short-term goal is to have enough water where we can meet the demand >> the amount. No, I need >> to avoid level one water emergency. >> Okay. But it is but but Nick, isn't it based on what the Western Reservoir uh fills? That's what or what is it? >> Yeah, Councilwoman, let's have fun real quick. >> Okay. The issue >> but but that's what it is. It's because we're basing it on the Western Reservoir, not on the actual amount that we need for our area. >> No, we Well, let me So, the issue is what's our firm yield? How much water should we have to let businesses operate to let us water our lawns to maybe bring on a new customer or two and we have that number. This is the maximum amount of water we should always have. That's called the firm yield. And what's that amount Estabbon? >> 189,000 acre feet of water. So, that >> that's about how many MGDs about then? 185 or so. >> Yes. >> So, we need somewhere between 185 190 MGD available every day to where we're not in this predicament. We wouldn't have any water restrictions. Businesses wouldn't be worried about that's called the firm yield. That's when I first started there six years ago, that was discussed a lot uh because we were in the process of advancing this project or not. So, uh today we're much less than that. Right. Because the western reservoirs are Yeah. are down to about 12 13%. Right. We're we're much less than that. And aren't we are we using only between 120 uh 125 MGD? I mean, >> you know, it varies like we've been discussing between 130 today around 113 depending upon the season. the uh the temperature raises that the part uh to your question of a level one water emergency it focuses the emergency focuses on what we've been talking about to meet our demands not so that that is the key point at 180 180 days uh of not meeting our demand is when we enter into a level one water emergency issue is and this is what I've been preaching for a long time is that the reservoir system is so large it it makes up a lot of our supply. We can't all these uh other supplies are needed to add to the system. We talked about this Councilman Scott made a good point. We're saying the and these projects that we're bringing on such as seawater desalination at the time was to give a backbone to our entire system so that we can make it through these tough tough times. This is unprecedented where we stand with our drought. And I have to be one to stand up and and say that this is unprecedented to what we've seen throughout the entire state. This is kind of like when I was a water master in the 2011 2013 drought of record. Other communities from North Texas was fighting this and they didn't know what to do. But the city of Corpus Christie learned from that and started planning that all the way up into the 2017 2016 time with seawater desalination being the backbone. Now we've moved from that to try to diversify our system and that is the importance from a water resource point of view and you can see that through the entire state of Texas with other cities the same size. It's the diversification, right? And so that and point was one of the best things that was coming out of the council at the time is to diversify our system. >> Okay. But the big difference for Corpus Christi or the Coastal Band is our water customers. No one else around the state of Texas has over 50% of their water being used by industry. And the Okay, let me just finish. Okay. So, it's happening all over Texas because we are getting lots of industry that uses an excessive amount of water. It's not the residents. It's not people using the water. It is industry that uses the water. And it does, it's not having, you know, heavy, you know, I'm talking about all, you know, we're talking about, you know, these um uh >> Councilwoman, we I know the >> Oh, it went off. Anyway, I I'm just saying that there's a big difference in our area and it's not just residents because it's not for the growth. >> Thank you, Councilwoman. Who do we have here? Councilman Scott, did you have your light on? >> I got >> Okay. All righty. Okay. So, I I think we're I think we're good now. >> Okay. Okay. Right. Councilman Scott, >> multitasking poorly. All right. Here are my thoughts. Uh, I think it's a wonderful time to pass on negotiating take or pay contracts when we may not have any water to provide the take or pay contract. But I do think it'd be an interesting conversation to tie these take or pay contracts into a new water supply. You know, right? Hey, we're going to we're going to provide a drought proof water supply system and we need we need you guys to step up to the plate and sign a contract that'll provide it u uh security to be able to repay that. So, that's my thought. Um number two, um how much how much the the general thought is how much is the uh Harbor Island water going to be? >> Uh John Byum is probably similar to the price we were estimating for this one. So about 11 $12. >> Yeah. I think John when he presented last said it was but he said it'd be in the range between 10 and 15 I think is what would he said was kind of worldwide. Yeah. >> Range. >> I'm I'm fascinated by the concept to provide $2.7 million for an opportunity to buy $15 water. I'm using the high end because it helps my cause when we we have a project that can make $9 water. So, I also I'm deeply concerned about what I believe to be uh unrealistic expectations on new water timelines. So, I'd ask us to be very sensitive to that. I'd like to see what we think those times timelines are, not what the developers are. Man, what a we uh here are my thoughts. I I would desperately avoid saddling the rateayers with $8 a month for 10 years. Um I think that's a bad deal and I think our rate payers would be very unhappy with that. Um, I would prefer to own. I don't know about operate. I just think that it's good to have an asset on your books. Um, I would use to the best of our ability an attempt to to use the $50 million you've already spent. Uh, and I'm I don't disagree. It's time to go get a price. I think it takes a little more money to get a price and little is relative, right? Um, and I want to avoid losing customers. I think at some point if if our large rate payers, our large water users do leave the system, uh that's um that that's really bad uh to the rest of us. We're all going to have to pay more. Uh so if you were looking for direction from Mark, I will re reiterate uh and I think it's good to continue this conversation. I think we have an obligation to rateayers to flesh out all these alternatives. Um I like I would encourage options one and two. I think they uh they deserve to be reviewed further. I think they I think our rateayers are going to want us to look that look at those very closely before walking or moving on and and if it takes 30 60 90 days to do that. I think it behooves us as you know keepers of the water uh to to evaluate. So, if it were me, mayor, I would I would ask that we uh continue to evaluate uh options number one and number two. And I understand council member Roy says three. I I don't I don't have any any heartburn on the other one either. I just think one and two are the ways to go and deserve a lot of time and energy that will eventually gets get us to a price. I did have one question. Um the curtailment search charge that can be used for what? Not the curtailment. What's what's the search charge? >> Oh, the the one that the industry pays the 31 cents per thousand gallons that's uh self, you know, they self-imposed it on their bills, but that's that can be used for construction of a new water project. >> Construction. >> My sense or my understanding it's only drought proof, >> right? Well, that was in the language. Uh it it's say a droughtp proof water source and um we believe a groundwater that's um 8,000 ft down been there. >> All right. So it's the city's position that groundwater meets the guidelines of the contract signed with those industrial sources. >> Yes. >> My sense is they would disagree, but that's a that's >> Yeah. The capital cost of it. Yes. >> Yeah. I get it. That's an argument for another day. All right. Mayor, I would pursue one and two. I'd spend some time and energy looking at the Axiona operate opportunity, the Gulf Coast Authority. I don't know why we wouldn't uh other than, you know, if we're done, we're done. But I think it does behoove us as a body to look at those and then if if others have three, um I would certainly understand. Thank you. >> All right. Thank you, Councilman. Councilman Roy. >> Yeah, I just wanted to clarify one thing. Um, you know, uh, Councilwoman Vaughn when she brought up, uh, the point about, um, whether we own or don't own, as I stated earlier, I I I look and I like options one and three, but at the same time, I think option four, um, I don't I don't know GF Coast authority, and it sounds like some of the council members talk about what their scope has been in the past and what they've done. Um, so I can't really speak to that. I don't have enough information, but um at the end of the day, it it goes back to I think every council member here has made a comment about the cost. And that's what that's where we ended up hitting a brick wall before was not really understanding or or having the comfort to be able to go far enough based on the cost. Uh, so I definitely think and and and one of the things I, you know, I've heard you say and and and me personally, I would be careful about this is that when it comes to trying to nail down a cost, you're saying, okay, if we try and say that it's going to be 900 million, well, we got to be careful because maybe we only get 27 MGD or something of that nature. But when we look at the way the city operates on a normal basis, we've done that before. You know, when we go out there and we look at that we're going to spend a lift station or whatever we're going to do, we generally we have that cost in mind. We manage to that cost. You guys manage to that cost. I don't understand the rationale on why you want the wiggle room. I mean, I I I know it's it's hard to define it down to a penny, you know, as far as this is what the cost is going to be, but we certainly should have an idea um what it takes. And I mean historically looking at the other projects that have taken place, just looking at everything that has happened, I again I said this before, I don't want to be the city that paid more for a project than anybody else in the world. And that does concern me. So again, I'd be really careful about sitting there saying that you don't think that you could put that onus on the builder, whether it be option um number one, they should know that, okay, we think we can build this thing for x amount. And if there's something that comes up, we're reasonable. This council's reasonable. And we've always agreed with that. We have it. It happens all the time when you guys come back and say, "Okay, yeah, we ran into an issue with that lift station on Williams and it's going to take extra money and we've laid those extra dollars out because we have an understanding and there's there's a um a a reason behind asking for those additional dollars." So, that's all I'm asking. We got to be good stewards. We I I really believe we can get this thing that we can take the next step, but everybody has to be prudent in terms of the way that we look at this project. And I again, I want to stress the point that I think that we can come up with a dollar amount and and and at least target that a little bit better than what we've done before. But every time we nail that down to sit there and say, "Yeah, but we don't know." That's where we got ourselves in this place in the first place because it went I mean I don't have to remind everybody what the cost went from. But when we're sitting there at the end of the day and somebody's going well you know what another council member said they had a conversation it could be up to 1.5 to 1.8 billion. That's not the type of um communication that we need to have and that's it's going to be difficult to get behind a project when we can't even get in the ballpark for that. So thank you. So Brett, clearly the number one issue regardless of option is cost and and and setting a ceiling I think is something that we could start with and should start with, you know, with whatever we do in whatever direction we go in and and then work from there, you know, but if that is stated, you know, in a contract or the agreement, what have you, um, then at least we we we know where we're what we're working towards and and not over. So, Councilman Vaughn, >> just a couple of things. You know, we keep saying $8 for defeasement, the rateayer is going to go up. Yeah, it probably will, but if you go 1.2 billion or more, your rate's going to go up, too. And nobody keeps talking about that. And the curtailment thing, you know, we need to quit scaring the public. This has been such a divisive issue that we need to quit scaring the public. It has nothing to do with the del on curtailment. We are in a drought and until we get about out of that and get more water sources, which we are doing. Thank you, Mr. Senon. The other thing is um Sylvia, thank you for bringing up the firm yield. Has 189,000 acre feet always been what we strived for. >> Uh in the six years I was here that it was set six years ago. Did it go up a little bit then when we we did some work my first couple of months here? But ESA, can you answer the question? I think we raise it a little bit or did we decrease it back then? >> Yes. So you can decrease a firm based upon volutric surveys we do every 5 years with the Texas water development board. They evaluate our sources drought of records can uh such as the Colorado River in 2011 and 2013 drove the firm yield down. So as we've been describing we are a one source a surface waterbased uh system no matter if it's a reservoir a runner the river rights or the contracts we have from Lake Texana those go into the firm yield analysis and those can be uh decreased because of droughts and uh volumetric surveys on our reservoir. So it has decreased >> I'm just trying to find out if this is what it's been for the last 5 years. Did it change? It has been for the last 5 years 180. It's been the same for the last 5 years. But but 6 years ago, did we drive it? Did we reduce it or increase it? >> 2016 when we got back to we decreased it. So >> we decreased it. >> Decreased it. >> Decreased. So it was higher at one point. Now it's a little lower >> and those come from the volumetric survey. So you know what's in your in your reservoir. So then that goes to your your firm yield, what you can expect in a drought of record. >> Okay. I just wanted to know if this was a new figure or we've been working with this the whole time. Correct. It will and it will change as we get data in and over time the number can change because we're a surface waterbased system. >> Okay. And I just want to make sure industry is important. You know some things have been said we do want industry here. We need it here. So to think that it's not important and I know they use most of the water but that's just the way it is. And and if we want to grow in economic development we have to have industry and we don't want to lose jobs. So it is important. Thank you >> Councilman. um Hernandez and then we're going to move on to page 15. >> Okay, that was actually what I was about to suggest uh is moving on to the next subject because we need to focus on the items that would help us avoid curtailment. None of the options that associated with diesel and the inner harbor would help us avoid curtailment because it doesn't deliver in this in the amount of time that we need it for. So really the two projects I see that that are most that can get us water in the quickest amount of time are the Evangeline water aquifer and wastewater reuse. >> Right. And our own wells on the wastes river. >> Well I understand those wells but that water is not great. >> Correct. >> And I and I'm concerned that because there's no groundwater control district in Nois County that I think it's unrealistic to expect we can get 30 million gallons a day from 150 acres of of land. >> That's 250 acres. Councilman. Sorry. 250 acres. >> Correct. >> Okay. We're looking at 25 million gallons a day >> from 23,000 acres. >> Correct. >> That's correct. >> Which complies with the groundwater control district's requirements. >> Correct. >> Currently could change, right? >> But currently it it meets those demands. >> Correct. >> It it seems >> unrealistic to expect that more water from less land. We're going to council, not to interrupt, but we're going to have our hydro geologist, Steve Young, make a presentation to city council. That was my next question. >> Yeah, he's going to come and present. So, we're not the experts at that. He is, and he's on our team to advise us. So, he'll tell you the answer to that question, >> right? And it's not great water. >> That's that's public knowledge, right? It has high TDS or salt. >> Okay. So I I I just want to make sure we need to focus this these options with the with the des harbor. Okay. We need to put that to the side and focus so we don't get in into curtailment. >> That's correct. >> Because I mean aside from the residents and I appreciate what uh Councilwoman is talking about in terms of residents, but you know we need we we made these deals with industry. They're here. They're our customers. We need to take care of them. >> Yeah. industry rate payers as well just like a residential account. >> Yeah. But they're here. There is an expectation. We have a contract in some cases. In some cases, we don't, but they're here. We need to take care of it. >> The important thing is to make sure we don't go into curtailment. >> Correct. >> Let's focus on those things. Let's not worry about things. We can we can push off those things. We can ask water development board for some leniency. And I think they'll give it to us if we can avoid curtailment. >> Uh not. Okay. >> Okay. If if you put if you put it to the Texas Water Development Board saying we need this money for these projects because it'll help us avoid curtailment. >> Okay. I see. >> Okay. Do you see what I'm saying? >> Yeah. No, I do. Yes, sir. >> Okay. Thank you. >> Okay. Mayor, so let's go on. Yeah. >> Yeah. Before just to kind of summarize, so I I've been taking notes and listening, but I think we we have clear direction to terminate the contract with Keywit. Uh and we need certainty so we can move forward. the Swift loan. Unless council objects, we're going to do what Councilman Hernandez recommended, which is put a request in to see if officially to the board. Can we reuse the Swift loan for an Evangeline for CC polymers for um for wastewater reuse? Right. So, we'll put that request into the board. As I mentioned, the board's going to take up your request to defer the next installment to next year. They'll tell us yes or no. that board uh meeting will be in either November or December and we'll know 8 days before the board meeting uh the recommendation from the director the executive director Brian McMath. Um just other two other points. The whole reason we're here just making sure we get clear direction is we have permits that have been issued and they have value. We're not here just cuz we love this project but there's certain things that have happened to include we have been issued permits so we can put those on in the back burner for now. They have a 5-year uh life. one of them does. And then thirdly, we haven't talked about it yet here this morning, but we do have an option on the land that does expire in July of 26 with the option to extend the right to purchase the property in easements for two more years with Flint Hills. So that's another kind of a just something that has a time to it. Uh so right now the the option to purchase the land uh is through July of 26. We already paid like a escrow an amount. There's no more money due. that legal contract will continue until 2026. So I think that's a good summary of how we'll move forward and then uh we're ready mayor to talk about the second part of this which is the additional water projects that we have been working on and I do appreciate Councilman Hernandez and a recent news story acknowledging that we've been working on many of these for for many years to include Evangeline. We've been studying it. We've been uh we've had numerous options we're moving that's the number one project that we're focused on and as Nick will go go over to make sure we don't head into curtailment and we did have to and it's been beneficial to go talk to the rating agencies uh because I think even they thought the del project would get us out of curtailment next November and uh it's not it would have been a longer lead project but uh the projects that Nick's going to talk to us about are really going to help to bring calm calm to the community calm to the council which is we are not going to run out of water. We're we're doing everything we can do uh including working seven days a week to make sure we're going to be okay. So, with that, we can turn it back over to you, Mayor, or to Nick. >> Yes, you have comment. Council, one second, Councilwoman Paxton. >> Thank you, Mayor. Um, quick question. Well, first I would like to make a statement. Um, I've, you know, in just tracking the progress over this project. I truly appreciate, Peter, that you've been going to the Capitol as a good advocate for this progress to to help rewrite that narrative and give a better description to our state partners that these efforts are to avoid curtailment. And I think we're seeing the benefits of that good message you're bringing. So, thank you for being a good representative there. Um on that note, similarly in negotiations with the water development board, is there um what are the parameters if we were to seek someone who could sort of facilitate as a representative to help these conversations that has lots of experience working with them, someone very specific that knows these things in and out. You know, there's got to be a representative. And and I'm not I'm not, you know, saying anything to slight our team. I'm just saying we've got to be laser focused and intentional on these talks. >> And correct. And we do have several advocates that are on the team, including our our lobbyist uh team. Uh Snapper and his associate are ready to go to the water development board and advocate. Uh we've used some other uh individuals as excuse me, as well uh that'll help us uh when we need that uh that input to the water development board. >> Okay. >> Yeah. just someone that you know >> understands those ins and outs >> has our best interest and can bridge that gap really well you know again nothing to slide our teams just someone with that very good >> and we do have that Ryan our intergovernmental relations director and I just talked about this yesterday and making sure they they're following us step by step because we're going to need their their uh >> their influence and guidance to help provide the best information to the Texas Water Development Board on our on our behalf. >> Thank you. I just want to make sure we're sending that best message. >> Right. >> Um you you touched on the land purchase. Um >> regardless of whether we determine to extend that or not, we own the permitting for the project, >> right? The permits are sight specific. So, um the the sites we own the permits, we don't own the property. Uh we have it under legal contract to buy it right now. That goes until July 26. But if we didn't purchase, we would retain the permit. >> Say it again. Sorry. >> If we didn't purchase, we would retain the permit because it was technically issued to the city. >> Right. No, the permits of the cities uh they're not they're not the uh partners. They're not Flint Hills. They do belong to the city. The issue is the site specific. >> Sure. >> And so and the and the tied to the land, which is not ours. It's we have it under option contract to buy. >> Sure. it just to be, you know, it >> I just wanted to make sure that was ours. >> That's that's a good point. The contracts the I think the discharge contract the discharge permit is a five-year permit. The intake permit is in perpetuity. So there's there's four years or so left in the on the you know the discharge permit. >> Okay. Thank you very much, Peter. Councilman Vaugh, >> Mr. to piggy back off of that. We do need somebody that understands the Texas Water Board and you and I have talked about that. But what we keep forgetting is we have our state representatives. They have said there they will reach out for us and we have um Senator Henosa's representative out here right now and they will reach out for us. We have Todd Hunter, Denise Philos, Chewy Henosa. So they will reach out for us. Yeah, that's correct. Keep that in mind. >> Yeah, good point. I should have mentioned that as that's why when we were at the capital on Wednesday, we did go see Chairman Hunter. >> Yes. >> Just to touch base with them, tell them what we're working on and and uh so and we know we have other delegation members. So they are they're probably step they're probably the first in terms of advocacy. And then we have our uh lobbyist team uh that knows our business well and will help us as well. We also have individuals like Carlos Ruben, excuse me, Carlos Rubenstein that used to work for TCQ. >> Yes. He would actually be, excuse me, a really good one to get on board. >> Yeah, correct. He is. He's under contract with us today. >> He is. Okay. >> Yes, he is. >> Thank you. >> Okay, >> Councilman Kentu. Um I think I think still we're at the same point um with the price tag of um the inner harbor diesel plant and um I just want to make something clear on my decision on me voting no on this project. A week before we voted on this project, I was already at a no because of the price tag and because of the repairs, paying a lot more extra um for water. I know that this is a good project. I know that it's it's a bulletproof water source and I like it. I really do. But um you know there's been a lot of talk lately still to this day that why didn't city council just went ahead and approved this to 60%. So going to cost $50 million and that $1.2 billion price tag that everyone was hearing before the vote. Some of my colleagues here kept on saying it's not going to be $1.2 billion. Let them do the 60%. Well, me and Councilwoman Vaughn met with Qitt, the contractor, a week before the vote, and they told us in plain English, if you're going to vote yes at 60%, don't think that the price tag will go down. It's going to be even more. their own words. And then I said, "What bothers me the most is that there's so many loud people fighting for this project." And it disturbs me because I'm not stupid. I have common sense. I know there's a lot of people have special interests of making money off this project. And I'm talking about current elected officials and I'm talking about past elected officials. They're making money off this project. That's why this project got killed. And you know what their exact words was when they told when I told them that? They said "Yeah I say that you're right." That's what they told me and Councilwoman Vaughn, and she's my witness. So, we need to get something done, but we also need to stop and remember why we got voted in is to protect the people, to protect the tax dollar, not be self- serving. And that's pretty much it. Thank you. Okay, let's move on to page 15, our water supply projects update. >> Thank you, mayor. Uh Nick Wkelman, interim chief operating officer. Uh as as all of you know, uh we've working on a number of water supply projects. Uh this is the the list or summary of the projects that we are working on. I have a uh project page for each of the projects which we'll go through and then there's uh a summary at the at the end of the table as well. First project we'd like to talk about is our newasis groundwater well project. This project is ongoing. As you know, we received a bed and banks permit for the wells located on our eastern wellfield. Eight total wells have been drilled and that's all the wells that are planned for the eastern wellfield. Currently we are discharging approximately up to 8 million gallons a day with the goal of discharging ideally 11 million gallons a day. So right now we've done and and it's it's been in my weekly water supply update memo. We've done a little bit of work on well one to improve the total dissolved solids from well one. So that that well is will not be operating again until next week. The pictures on the right are all from the eastern well field. The picture on the top left is well 4 and that's at a site that's located directly adjacent to the river. You see the well discharges directly into rip wrap or rocks. The water goes over that rip wrap. It picks up dissolved oxygen which is a benefit which we want to do as it as it before it enters the river. The the picture just below it so bottom left that is well two. So that is a completed well. that well dis it discharges flows into a common water line which then goes to a a common outfall location. So the pictures on the right we have six wells that discharge through that pipe and through that outfall location. You can see the top right is the water coming out of that common water line that's 24 in in diameter and you can see the water rolls over the rip wrap and enters the river. That's the bottom right picture. Our um hydrogeeologist Steve Young with Interra has stated that the sustainable pumping from the eastern wellfield is 11 million gallons a day. And I just uh I had to check my phone while we were talking. So, uh as Peter said with the goal is to to have him come and make a work with council, make a presentation to council. Uh latest news, he's available on the 21st. So, I'll work with the city manager to to try and get that set up. >> Right. That'll be good. Nick, >> um the western wellfield currently we have three wells that are completely drilled. And I I'd like to point out that we they are numbered sequentially. So even though we talk about well nine on the western well field, that's really well one on the western well field. So there's the eight on the east and then we start up a lot is that just operational clarity uh helps us in the future. So well nine has been drilled. It has been test pumped. Uh water quality samples have been taken. The TDS from well from well 9 has been it's it's in the 1700s approximately 1760 total dissolved solids. Well 10 has been drilled. Uh we completed the test pumping this week and we took the water quality samples. We're awaiting that data to come in. Well number 11, the drilling is complete. Crews are developing that well. What you do is you develop the well further to bring in the sign the the fines and the sand to make that well as efficient as possible. Test pumping. We'd probably be test pumping water quality sampling that uh start that within a week or so. The data provided so far to interra has suggested that the sustainable pumping there is approximately 17 MGD. One thing I want to be very clear about is as data is obtained through these water quality and pumping tests that's shared with intera so that they can further update the model. So when that number change or shifts with with updated data we'll update all of you. So I I will adjust that number as per any feedback from Intera. Um the the estimated capital cost and I share that in the weekly memo. So the Eastern Wellfield we've spent these are cash out the door expenditures. It's about $15.5 million to date. The Western field we're about $2.6 million right now. The other thing I do want to um point out is we do have a $30 million grant for our newasis well program and uh in fact when we met with TWWDB this week we brought that up and uh they they've already shared correspondence on the next steps on to to ensure get that money into into our bank account as quick as possible. Next project we'd like to talk about is the evangelene groundwater project. During the September 23rd council meeting, uh the council approved moving forward with a term sheet which is the basis of the contract. We are currently working diligently with Evangelene uh to move forward and bring that contract to council for approval as soon as possible. Our goal is October 14th. Uh we're working to make sure we have all those deliverables in hand. If something would slip, we would notify you and and maybe it have to go on the 21st, but like I said, we're not we want to get it to you for review as soon as possible. Couple of key items with that term sheet. So, it's a purchase of uh $7,437 for 22,789 acres of groundwater rights. What is that number? It's approximately $169 million. There will be a million earnest and option payment for 120day inspection or due diligent period with an additional 3.25 million to be escrowed at the end of the inspection period. Uh this body approved various contracts during that council meeting so that we can proceed with pre-engineering and um uh also our due diligence and inspection period. As part of those those contracts, uh our chief engineer, which is Pape Dawson, they will provide a schedule for the improvements completion for the well field and also an opinion of probable construction cost. One thing I do want to underscore is that just like in our own well field, as well come online, the goal is to provide water as soon as possible. So, we are looking at partial delivery first and uh the city manager and myself are pushing for partial delivery by November of 2026. We are looking towards PE Dawson to confirm and pro and uh work towards that goal. As part of this agreement, the seller is to provide clean uh and indefeasible title to groundwater rights. They are also to provide um the required permits for this project as well. The these would be permits that are nonappealable uh and it would include uh 22 wells and uh including the production as well. Another big part of the of the project is the assignment of surface use agreements. So the property is owned by different landholders. the seller has negotiated surface use agreements with those uh property owners to allow for well drilling uh water line installation. Um you know we'll need a a uh pump station as well. So we've got to work through all that in the engineering phase. Next project is the Newasis River Authority the the Harbor Island seawater desalination project. We have an item on the council agenda agenda for next week. It is an item to regarding a reservation or an option fee for an amount of water to be produced from that plant. The I on this page the bottom right we've provided the uh the amounts of the water and their associated reservation fee. Just to be clear, the amounts shown, this would be a one-time fee, and it would secure our right to that water once the project is built and producing water. The NRA has stated that they would be producing water by Dece. However, the agreement uh it's a non-refundable agreement. It doesn't um it doesn't confirm construction timelines, water delivery, and it's not a guarantee of final price either. The um there are a number of permits required. Um per the NRA, there's there's been quite a bit of progress made on those permits. Uh they have a draft permit from the Army Corps of Engineers and they are expecting draft permits from the TCQ regarding their intake and discharge permits next month or this month, excuse me, October 2025. There's a lot happening with our reuse alternatives, as you know. And and and just to be clear, there's uh Garver Engineering is working on uh uh reviewing uh con effluent conveyance uh aquifer storage and recovery and direct portable reuse. Garver is nearing completion on a preliminary technical memo and we hope to have that within the next couple of weeks and I ideally we'd like to uh present that to to council as well to share that information. Uh, additionally, uh, CCW staff met with our Dura Engineering this week. We met on Wednesday, uh, morning and the goal of that meeting was to identify, um, projects that can be moved quickly to better use our effluent. And then the third part of all of that is CCW is meeting with specific entities to talk about uh to enter into contracts to purchase effluent from our from specific plants as well. So information on that will be forthcoming. Uh there's a lot of work happening there. CC polymers. Um we have looked at this equipment and as you know uh the latest uh concept was the city to purchase uh the desalination equipment outright and to operate that equipment. The we we do have we have a draft proposal for um the equipment and process assessment. We've got to work through that with our partner CDM Smith. As you know, uh any purchase of uh equipment, just like any house, you need to understand its current condition. One thing I do want to uh reiterate, the plant has never fully operated. It's not complete. So, there is uh cost that is required to complete the plant. Additionally, the design of the plant is 9.4 million gallons a day. What CC Polymers has told us is that they require uh 7 MGD. So that's got to be reserved for them. The good news is a plant can be expanded. Uh permits would there would be a lot of permit work that would have to be done and the permit or the plant could potentially be ext expanded to 30 or 31 MGD which subtract the seven and that would leave us with uh 24 or so. South Texas Water uh Authority. We've we've all been in contact with them. Their their last presentation to council is stated that they are uh they they're currently pursuing a project uh to develop a supply for 3 MGD. However, they're willing to talk to the city about upsizing that project to 13 MGD, which would give 10 to the city of Corpus Christi and they would retain three. I would like to say that the South Texas Water Authority currently purchases water from the city of Corpus Christi. Uh their contract expires December 31st and we actually met with them yesterday to work on the renewal of that contract. The other the other key point is uh the STWA team said that that plant can be expanded in 10 MGD increments. Uh the focus of our discussions with uh STWA per their request has been on their current contract first. They want to make sure that that is that is taken care of. Again, the contract end date on that is December 31st. EV Ranch. Uh this is a project that's been uh that's been around. Uh the city manager and myself met with representatives of them on September 22nd. They said they had details regarding a new proposal for us and that they would come back in midocctober to meet with us further and go over those details of that project. Um, one thing to remember that it, you know, that project it's, I think it's 40 to 50 miles away from the city. It would require an extensive uh, pipeline. Initially, their proposal was to construct the wells, treat the water and pump treated water to us. believe their their latest proposal is and we need more details but is for uh the city would actually uh step forward and do the capital investment to construct the wells and treat the water and then be responsible for pumping to the city. I would like to say that there's been no test well drilled on EV Ranch. We don't have representative water quality. Uh there's quite a few unknowns there. It's a lot a lot going on. Uh so I do want to summarize uh all of those projects in the in the table. Um with special attention here. So we've got projected supply, right? That is our current estimate of volume of water provided project delivery date. So again, that that's going to have to be updated and and changed, but that's with the current information that we have. And then the last column will be comments or items for consideration. As we talked about last council meeting, there are a number of um there are a number of projects that uh uh every project has certain considerations that need to be taken into account. So the first project are newasis groundwater project. So if you got sustainable pumping, 11 from the eastern wellfield, 17 from the western wellfield, that's a total of 28 MGD. It's an ongoing project, so we're partially uh producing some of that water right now. Full production, right, we are estimating May of 2026. Some of those consideration items that I wanted to bring up is we are there will be a second bed and banks permit required. It's different discharge location than our first bed and banks permit. We're going to have to work with TCQ on that. I would like to say that we are um working very diligently regarding the river. Uh we have uh Corollo engineers. They are doing additional study and analysis on the river. Some of the things that are uh interesting to note and uh may some of you may have known but a couple of weeks ago we shut down our well production for two days so we could do that sampling. So we've identified a number of springs and uh along the river that contribute to the river. Uh the TDS of one of those springs was 10,000 parts per million. The river itself is a very complicated system. We are learning more and more about it every day. But I'm thankful to our professional partners who are diligently working to analyze the river. We are also working very closely with um Noasis County WCID number three. Met with them this week and we continue to work closely with them to keep them updated on our progress. The dates shown for the newis groundwater project are without treatment. uh this is fully to deliver the water uh into the river using the river as our conveyance system. One thing to note there there is uh uh we call it a carriage loss carrying loss in the river that's estimated at approximately 7%. Second project Evangelene Lagona again uh the total volume for that project 24 million gallons a day. The goal is November 2026 for partial delivery of that water. The uh again the the contract calls for an inspection due diligence period. That period is uh 120 days. Uh the contract conditions, those permits and and the other items like the surface use agreements, those are all conditions to close. So they need to be uh in hand before we close. Um the the partnership of Angeline Lagona has told us that they will work uh start working on permits immediately. So that would be the same time that inspection period starts. And also just a reminder pre-engineering has started and uh also survey work has started. So there's a lot of things ongoing right now. Effluent reuse uh total could be anywhere from 10 to 16 million gallons a day. Just a clarification that is using our effluent water which ideally would reduce portable water demand on our system. We are working with uh professional partners uh Garver and Ardur on these projects and then uh CCW and the city. We are also negotiating um in trying to better understand uh specific contracts with various entities. NRA Harbor Island um one of the options for the reservation fee is 50 million gallons a day. Again, the NRA has stated that they would be producing water in December of 2029. I would like to remind everyone that that's producing water. the city still requires a uh conveyance line to get the water to where we want it. So, that's another project that will have to happen. One thing uh during our conversations and with John Byron, he stated that if we do uh have our reservation fee, the city could have input on their conveyance line so that some um uh some benefits could be made by both parties on the exact location where we would connect. South Texas Water Authority. Again, that's 10MGD. Uh there is a memor memorandum of understanding in place. We are working per that memorandum of understanding and STWA will continue to furnish uh the the data identified in that memorandum. And as we continue, we did receive water quality report from STWA on their first test well. And then EV Ranch U, they've they've expressed that the total could be 28 MGD. Uh they've also expressed it could be more. Again, there's been no test well drilled. Uh we don't really have much data on there. And that's why you see there's a lot of blanks on that on that slide. And that that concludes the the update on our water supply projects. Uh I would like to say you know the uh the concept of having a diversified supply is is critical. Uh a number of of the council has brought that up. The city, you know, we we're truly a surface water dependent system. The city has done a terrific job of diversifying the surface water system. And I say that because of the Mary Rose pipeline, because of taking water from Colorado. Um they've done a terrific job of that. However, we know today that we really need to have other water supply in our portfol portfolio that is more than just surface water. With that, I'll I'll stand by for questions. >> Can I just add two things, man, real quick? Just if you put that last chart back up. So, we were asked on Wednesday by pitch ratings, how much water do you need to not go into a level one emergency? And the answer is about 60 million gallons. If we look at our water dashboard, that assumes um uh that 60 million and right now is coming from the western reservoirs. And so in the summertime at peak production, you need about 60 million from that those two sources to meet the total supply uh to meet the demand. So 60 million is the answer and that's if you look at um we we're pretty close to being there with uh with the emergency water wells and and the evangeline it's it's pretty close and then if you throw if you put in the reuse we we we can probably get there. That's why I was saying earlier we're working pretty hard to make sure we don't enter into that level one emergency. Um so that's point number one is that the the how much water do we need? And recently, I think yesterday, a former council member, Greg Smith, sent an email to the council, and the council has asked the same questions, which is, well, how much water do we need and what's going to be the price? And that'll be a presentation coming soon to city council. We're going to work with Nick and and Estabbon and and uh and Brett to be more clear on that, which is we see all these projects, but are we going to do them all? Are we going to, you know, so how much water do we need? What is the rate impact? That presentation will be coming in these next uh before before the end of the year with the city council. But we know that these are kind of lined up here on this chart as uh the projects that's most progressing is at the top um and so on. So you can see by the evidence here that we're working hard to not get into that level one emergency. 60 million is the amount of water we need not to get there. That's just based on supply demand and our metrics over the over the past couple of years and that water dashboard. And then finally, one other comment on this chart and on the new Asus groundwater wells. We we really and I was talking to several council members about this recently and Councilwoman Vaughn especially has brought it up, which is that this this was seen as an emergency source uh over the decades when we've been in this predicament of being in extreme drought. >> And as Hernandez says, it's a smaller track of land, 250 acres. Evangeline with uh similar production amounts is on 22,000 acres. So I think we have to continue to talk about the newasis groundwater as an emergency source so that once the emergency's over i.e. we get rain and the western reservoirs have more water in them. These wells get shut down. Nobody is saying we're going to keep these on indefinitely forever and every day. And they're really an emergency project. Uh it's just to do what the city has done since the 50s which is use wells of similar nature and similar location. And as Councilman Hernandez brought up again today, we know the water quality is not the best, but through blending uh it becomes usable, uh for our customers. So, uh those are just two additional points in the next presentation. >> Right. Thank you, Peter. And and that's a great uh segue into a couple of things I'd like to say and ask. Um so, what's planned? What what what would be if if something doesn't go forth? Does it move forth as planned? Then where are we? Because right now you're taking 60 deficit minus 28 for uh the well fields uh which leaves 32. Then you take 24 mgd off of that which would be evangeline. And then you have eight which we actually have on the property line at countis ranch. The eight those eight wells that we're going to drill, >> right? So, I mean, in theory that works out perfectly, but uh that's in theory. Um and and so we don't know exactly, right? This this isn't for certain. >> Uh >> can we say absolutely without a doubt? Um >> that evangeline effluent reuse uh even even Harbor Island, you know, I I I don't know because you're just talking about we must we're going to have to build a conveyance >> a conveyance system for that. I don't know if that is taken into account in terms of this December of 29 um date, but but my point is is >> what happens if if if we don't get online with some of these as stated, >> do we have that plan? >> Yeah. Uh that's what we're going to be bringing to you over these next couple of months. But the newis groundwater uh wells is certain that water is producing. We're already doing 10 million gallons and we have on the new the new the western wellfield as we call it, we have three wells drilled. So >> that is there's high confidence in that one. It's actually ongoing right now about 10 MGD a day. >> Evangeline will be coming to council. Everything's in order except for the the land survey. >> No, I understand that. But what I'm saying, Peter, is it there's two projects here, for example, that that must abide by anou. So if they do not, we have to have we have to be looking at what else right we can do. So you can see in the list I mean we have the effluent reuse is another one that would be less than a year I think is what we're saying here. Uh we have South Texas Water Authority at 10MGD another groundwater project uh which we we're moving pretty quickly on our own wells project. So it's we have demonstrated it doesn't take years to produce the water from those groundwaters >> right >> uh CC polymers are probably a little little more long lead. >> Yeah. >> So I think that >> well and I think this is great work. I think the staff has done amazing work because the immediate as was mentioned earlier, you know, curtailment is real and and and that is now we're up a month right from uh to November of 26. Um so we need short-term solutions and we also need desalination which is the longer term otherwise we come right back to where we are without uh having that solution right for the future. Um, so I think it's important that all of the pieces fit together and and curtailment has everything to do with with with the short term, which is what we're working on. And I do believe that the groundwater I think there are some risks there that we've all heard about that have come forth recently. Um, and that is concerning uh with the Evangeline project. Um, I I hope that that's not going to be something that sets it back. Um but I think all everything including del um includes some risk and Peter what what I'd like to do is ask that um staff bring back maybe at the next uh your briefing next week I would imagine um that we get a full overview of the risks associated with each of these options. In other words, you know, if this you know what is a risk, right, with certain every single one of them really, even our wells, I mean, our wells have risks also. Um, because we just need to make sure we know and understand that, you know, if 12 MGD can't come on without building a pipeline, without an RO system after 24 MGD, are we why isn't the RO system part of this discussion? the um on the Evangeline one, >> right? Because I thought we had talked about putting 24 MGD into the river is not I mean it's going to cause some problems in terms because of the the uh >> yeah right now so the the new the newis groundwater um it could turn into a RORO project. Uh but if we look at it as an emergency short-term use then you don't need to spend a couple hundred million for an RO system. Um the evangeline we're working with our our contractors now um and and ones that we've used before. We're thinking you can put put the whole 24 million into the system and we don't need to reverse osmosis any of it. So uh that's so that that's um that's the update on that one. >> And the pipeline is able to >> well that's same thing. So the pipeline is is our consultants are saying you probably you might not need a secondary pipeline right now. And so what we're trying to do with Evangeline is have the lowest cost uh impact to the rateayer, >> right? >> And that is u and we're listen I'm not making it up, but I'm listening to engineers of record, some that have worked on this project since the pipeline was built. >> They're telling us and we're going to be sitting down with them next week. That's right. >> Uh they're telling us we don't need to do a secondary pipeline. We don't need to do treatment. And so we trust the experts first. >> Yeah. So we're trusting the experts. So on that one, >> it's the cost for the water, right? and the production of the wells and and the pumping to get it to the pipeline and then from there it's there's no additional charge >> right >> except for treatment at the plant >> correct okay so that's why RORO is not >> yeah no RORO for evangeline the water TDS is 800 is public record so today newasis river that western reservoir system the TDS can range from 6 to 800 so 800 TDS is not unusual in our water system >> right >> what was the water you you mentioned mentioned the water quality for the um the well that was drilled with South Texas water. What was that? >> Oh, so they uh so a couple of things. First thing I want to say is the the the parameters that were identified that were over the maximum contaminant levels they are removed by reverse osmosis. But some of those parameters that were over the MCL, our maximum contaminant level, that was arsenic, it was uranium, it was gross alpha. Those are radiouculides that are um uh naturally found in in geologic formations and in groundwater, but all of those are removed by the reverse osmosis treatment system. >> Okay. All right. Thank you, Councilman uh Hernandez. >> Okay. Thank Thank you, mayor. Um being fully aware that the noise groundwater thing is a temporary thing and and we are also looking at possible del down in the future with groundwater brackish water del. But it seems like you can combine some of these things uh with South Texas Water Authority and not have to build multiple locations for brackish water del contract with >> with them to u you know kind of align >> and I don't know maybe maybe you look at the opportunity for PUA with this you know with South Texas Water Authority. So there's if the concern is not long-term ownership, well then there's maybe a possibility of negotiating something different and utilizing uh similar options. I'm sure that would make our state representative happy since he sponsored that that uh that legislation. Also, um, with effluent reuse, uh, I know it would be a lot faster to try and get this into some sort of industrial water, >> right, >> project as opposed to making it portable. >> So, because then you'd have to go through all these TCQ hoops that you that you wouldn't need to for >> for industrial effluent, you know, and I've had some conversations with our industrial partners that that, you know, that could be a solution so they can avoid curtailment. >> Yeah, Nick was saying that earlier. That's the le of the options that are available. That's the leading one right now. That's the preferred one. >> I think it's something we should consider because we don't have to send all that. We don't have to build the convenience all the way to the noises room. >> We're not only considering it, we're we're developing it. We're develop we're looking at that option to send it to an industrial customer as option number one. >> That's with you and that's why I'm saying it here on the dock. >> I know. Good. >> So, I'm in concurrence with you there. >> Okay. Good. >> Yes. Uh, and I would I would fully endorse that option. If if we could do that um sooner rather than later, maybe we can beat this timeline that you have of of 2027 fourth quarter. >> Correct. >> Okay. So, if we could do that sooner, that gets us in a better position. Uh, looking at those first three, uh, you get us in the situation where we don't have to go to curtailment. It can can meet those needs. And then you have your midterm solutions which is the the groundwater desalination with I don't think it'll be the 28 million gallons a day maybe 10 12 um depending on what you know our intera determines uh what that looks like in the future. Um and then also South Texas Water Authority whatever that looks like as well. So I think there's a good plan for short-term and midterm and then maybe Harbor Island more of a long term. I, you know, don't get me wrong, I think 29 is ambitious, but might be a little I'm not going to hold you to make it to that 29. I just don't think that's I mean, with a project that size, it it seems like that'd be I'm not going to be heartbroken if it doesn't make it in 29. But um uh and then some of these other things could be extra. But I think all these things could be in place and and prevent us from going there and then looking forward to getting projects in place so we don't so we can start to grow again. >> Yeah. Okay. >> All right. >> Thank you. >> Councilwoman Vaughn, >> several things. First off, what you guys have done out there at the river is amazing. It y'all have done a great job. It's very impressive. I was really impressed when I saw it. I mean, you're really up there. No oil rig's got anything on you, I'll tell you. It was really nice. And if you guys haven't seen it, y'all should go out and look. Um, thank you, Mr. Cen, for reiterating. It's an emergency. That's what those wells are because we have got a lot of people right now talking. There was a story done on TV on it where they're very upset. And um, I've been told that the TCQ is going to come down here and check our water quality. And I shared that with you guys. Um, someone called and gave me that information. If it's true, I don't know, but feels pretty sure it is. So what I'm asking you is how are you testing your water quality? Do you have what are you doing? >> Right. So f first we communicate with TCQ frequently on the project as well. So as as part of the um our protocol in the Ben & Banks permit, we have a water quality measuring device located upstream of our the first discharge of our well. Right. And then there was one another device located after the first discharge. There's a third device located after the second discharge. There's there's two wells that discharge directly into the river and then there's that larger outfall which I showed a picture of and there's another device located uh after that outfall. So we can measure it measures the total dissolved solids of the river. So we know what the river is ahead of our well discharge and we know what it is after. and and then we also have further devices downstream and there's one located at our intake at Owen Stevens. I I will tell you this just in the last couple of months I've seen the river uh vary anywhere from 800 TDS to,200 to,300 TDS. Um we've also seen where the total dissolved solids um towards you know that last one after our wellfield was 980 TDS. Further downstream it was 1,200 TDS. So again it's it's a comp system. Uh we're learning about it every day. We're doing the study doing an analysis and we're watching it closely. >> Well hopefully we're in compliance. Hopefully. >> Yeah. Mhm. >> Okay. I'm counting that on that we are in compliance and with our bed and banks um permit as well, right? >> That's correct. Those are Yeah, that's correct. >> Um mayor, you mentioned something about the countest ranch eight wells. Um I don't think any in here has heard about that and I Mr. Cone, >> can you say that again? Counciloman, >> the countest ranch, eight wells. That's the first we've heard of that. eight more wells that we're drilling >> on the Southerntherland prop property, >> I guess. So, I don't think the council heard about that. >> Well, so the there's two tracks of land. The the first well field, which we call the eastern wellfield on the Newasis River, has eight wells and then uh we brought to city council a proposal to purchase 250 acres of land >> and on that site would be a total of 12 wells. So, there's 12 in the second site, the Southerntherland Ranch. It was higher at one point. I think Drew had talked about 16 wells. >> It was We've worked with Entra and it's a current target is 12 well LS on the 250 acres. >> I would like to say that that number could change as we drill more wells. It could maybe go to 11, but right now the current estimate is 12. >> So, we're not in talks with anybody else to do any wells on anyone else's land out there? >> No, that's it. There was some talk about using a a budding property owners uh property, but we we're not pursuing that. >> Okay. Just making sure. I just wanted to >> Yeah, just 12 on the 250 acres, no more than 12. And as um Nick just said, it could be less. >> Okay. And because of what is going on out in that community, they're really concerned about us. I think it's so important that we be a good neighbor. >> Yeah. >> I wish y'all would consider going out there maybe having a town hall explaining to them because things go wild when you hear rumors and that I think is what's going on out there right now. They're concerned about their water as they should be. >> Yeah. So, just an idea. >> No, that's good. You and I have talked about that before and we'll have that that's on our work plan to go out to the Blancha area and have a town hall to explain from our from us, the ones that are doing the work, what's really going on. >> And so, we'll be doing that. >> Okay. Good. Thank you. Um, the Adura, I mean, that was presented to us a few weeks ago. Yeah. >> Couple weeks ago, maybe. Do you have any idea when that's going to be brought back? I know you said you had some work to do back to council. >> Correct. Yeah. and staff met with our Dura, we'll call it a workshop meeting that was on Wednesday morning. Uh they made some good progress. I will say I was not there. I wasn't able to attend. We were we were in Austin meeting with the TWWDB. Yeah, exactly. So there was there were some good action items from that and there's still some more work to do to to flush that out. Uh I do want to reiterate I mean we we are very excited about uh potential agreements with specific entities to to utilize that effluent. We think that can be real quick and um that those dates, you know, on that chart would be adjusted as we have more information. >> So we don't have anything huge or anything that's holding that up. >> I think we're all we're all working very diligently on that. there's there's a number of avenues at play and we're working very diligently and once we have something better defined then we can come back to council and um another thing councilwoman I we are talking with uh other land owners for our conveyance or discharge line to the river from the southerntherland wellfield that will contain the water line the >> Well, I will say y'all did a lot of improvements out there that everyone around you should be very happy about because you tore some old houses and If you've not been out to the river, it's worth going to look. So, y'all did some really good things from there. Um, Harbor Island, I guess that's going to be a discussion we're going to be having as well. And to me, I also want to know at least close what the cost of water is going to be when we do a reservation fee on that. I I want some a little bit more information on that. Um, what's happened? Did we just Mayor, I think you were kind of involved in this. Barney Davis, have we just scrapped that? Because to me, that was a really good project. >> Right. So Barney Davis is still being discussed. I think there's a meeting soon not to meet with CPS Energy who owns that power plant. >> Okay. >> Yeah. >> All right. Thank you. Uh Councilman Paxton. >> Thank you, Mayor. Um I first want to say thank you for the presentation. Really great information and the format was very user friendly. So thank you for that. Um also um there was a question about going deeper into uh risks associated with each project and and I think that at the end of the day we know what the risk is and and I I like the track that we're on that's that's really publicly celebrating and saying you know despite risks we're making it work. We're overcoming those risks. So I would caution us to maintain you know that transparency that yes we understood that when we pursued the western well um project. One of the challenges is the conveyance you know the pipeline to get it from the wells into the actual river but we tred forward and now look at this as one of our leading projects on this list. So, I' I'd like us to maintain the conversation and we understand there's risks and this is how we're mitigating them and still being successful. So, that's my two cents on that note. Um, I agree wholeheartedly that those western wells should be a temporary solution and I do and I have probably from the beginning been a very loud advocate in favor of a long-term solution like Harbor Island as getting us past that. Um, in the same token though, I believe previous presentations said that we could actually take a little more out of the western wealth. And I bring that up only to say there's a little time lapse between when we anticipate having the full um volume from Evangelene or the full potential actually coming online. And I think that delta could help us carry into that as a very short term if that makes sense. Is that still a possibility? So like I said earlier as we drill each well we are test pumping the well collecting the data that gets uh then intera inputs that into the model and they update the model. So there there's we need to be be cognizant of um long-term pumping and short-term pumping right. So if if recommendations that we can do something shortterm we we'll we'll follow their recommendations. Okay, that makes sense. I would say as we continue to progress in the Evangelene project, as we look at um I'm glad that we got the report that that looks like we're pretty in a good spot to add that full capacity to the Merry Roads. >> Um so, as we move into that, if that looks like it's going to take the longer end of those forecasts, maybe we continue those conversations to get to get a higher volume from the West for a short amount of time. I really do want to stress that and I and I like to hear that there's potentially a town hall out there. We we really have to stay good communicators with our with our neighbors. So, I'm I'm glad to hear that. Um on the western wells, it says that we're running about 8 million gallons. Could go up to 11. >> That's that's correct. Yeah. And remember, we're doing that additional work on uh well one. And then additionally, we had a little bit of an electrical issue at well 7. A breaker had failed. So, our electricians are are fixing that. So, I try every week I try and give you the most updated uh procedure. I I would like to to to just stress and maybe reiterate that there's eight wells. Doesn't mean we're pumping them all at the same time. There's an operations plan. We try we we have to meet the Ben & Banks protocol, right? So, these wells are not we turn them all on at the same time and forget about it. There's redundancy built in. So that there's uh day-to-day operational decisions that our staff makes and and we're really good at it. Um so so I just I just want to sort of reiterate that there you know operation of a wellfield isn't uh you turn the the pump on and and and walk away. We're monitoring that every day. >> Okay. I appreciate that. Um, on the same note with the Mary roads integrating Evangelene at potentially full capacity into that pipeline, have we done any sort of preliminary evaluations or work to prepare that line because where they converge, we're going to have to basically there'll be some technology that makes those work. >> Yeah. I'd like to say and the the city manager stated earlier, but we have we have a meeting on Monday and that's with multiple entities to look at the integration of Evangelene into the Mary roads pipeline. So, it's with HDR who of course did our condition assessment who modeled that pipeline. It's with Pape Dawson and then it's also Hansen Engineerings who they're a subcontractor of Pape Dawson will be involved. Additionally, we're we're looking for some input from the LNR. Uh, as you know, the Mary Rose pipeline is a very complicated system, and I don't ever want to downplay how complicated it is because there's multiple pump stations that have to operate in unison. So, we need to make sure that the integration of any additional water is done correctly so we don't put the pipeline at risk. The one thing that that I do want to say is is if you remember that condition assessment showed that there were pressure exceedences when we operated at lower pumping schedules, those exist. So if you put evangelene water into the MRP and you're operating at lower pumping schedules, they still exist. They don't go away. So the goal is to continue to do this at schedule 4. And that's one of the things that we need to talk about and we'll continue to do so. >> I know that we had several of our industry partners step up to the table as great partners. Um we we definitely prioritize them in this whole conversation. Um but they basically, you know, told us that they're very interested and willing if their skill sets or their tools could be useful that they'd like to be considered. And I know that was in a context for Inner Harbor, but I think pipelines are something they're very familiar with. So throwing that out there, if there is any kind of like, hey, we're curious on this. You guys have, you know, applicable experience with these large pipeline type things all over. Maybe that's something we we look at because I I had some industry members call and they said, you know, we've done work on similar and here's how we handle, you know, a routine shutdown to do inspections or clean that type of thing. And and and I'm not discrediting your team. I think the world of you guys truly, but if that's something helpful, I I'd like us to still consider it because I do think they're partners. >> That that's a great comment. Uh I personally have talked to many of those partners and we've talked specifically about the MRP. Uh they've made that same uh comment to me uh specifically regarding what we would do on a shutdown. I do want to remind everyone we we can't shut it down. This situation we are in. I' I've got to keep the Mary Rose pipeline running every single day. And um it it we can't even I don't even want to go back to schedule three. Uh, additionally, there's improvements that we still have to make at Bloomington and Woodsboro, but we can't make those because I don't want to go back down to schedule three. I want to stay at the 72 MGD. That complicates things an awful lot. >> And that goes back to that diversification uh conversation. >> I I appreciate that. >> Yeah. >> Um, >> I I wanted to really quick I noticed on our reuse slides here, we didn't actually include the GCA. Um, but it sounds like you guys are are going to meet with them again and and bring some more information on a timeline for that. Um, uh, Peter, I know we talked several times about, uh, the drought contingency plan and how we actually quantify our drought, but I had a quick question on that. Um, the way that it's written is the CM with council of course, but the CM basically can say we need to enter these stages. >> That's correct. >> That's that's the trigger point. You use the data to say why you're recommending to enter into a different stage, but ultimately the decision is with the city management. And so my curiosity is um is there or has there been a mechanism in place where we're still recognizing you know that western reservoir but as we're moving away from reliance on it maybe there's a second tier that we acknowledge that we're still heavily you know because we're responsible for it >> a second tier to drive how do we make that decision that we could put in that plan and utilize >> there the there would Councilwoman, we can look at that. Um, right now the the city manager has the authority to declare certain stages. However, the emergency uh emergency stage one, which would have a rate impact, only council can adjust rates. So, the council would be enga I can't decide to go into level one emergency without the council's uh endorsement or approval, a majority approval because that one would include adjustments to rates and only council can do that. Um we are looking at Councilman Hernandez and I talked about it a year ago um analysis to say what if there are no western reservoirs anymore. What does that mean uh for this city and for the region? Uh this drought is is crippling and severe and as Esteban said maybe the drought of record but uh we do need to look at that what happens in our drought contingency plan. What happens with water planning if we have to in include that as a as a a reality. So, I think the answer is yes to that and we can come back and provide that to council at some point. >> Okay. >> Yeah. >> Uh, Councilwoman Compos. >> Uh, thank you, Mayor. Okay. Well, first let me just clarify something. I've lived here all my life, so I have lived with industry all my life. I've have family members that work in industry, so it's not like I'm totally against industry. Just to make sure I got that clear. Um, and as a matter of fact, I just want to say shout out to Flint Hills. I didn't go to the solar panels, but hey, I I applaud you for that. Um, okay. So, um, I'm also happy to hear about the level 160 MGD that that's our goal cuz that's the other thing that that you did state to for us to reach to level one, we need to at least get up to 60 MGD, >> right? We need to bring on 60 MGD more. >> Okay. Right. >> So, so that's good. And I'm also uh grateful that uh Councilman Vaughn and some of the others are willing or are wanting to do a town hall, you know, out there in Blendser to to give the residents some information. I that also triggered me with a town hall because for the residents here like you know you mentioned and we I don't think anyone I I I know personally I had heard this in the dis but what is our our our true goal you know for for our area? I never heard never heard 185 to 190 million gallons a day. That's our goal. I never heard that. So, I'd like to discuss why we have that goal and and I believe um uh Mr. Zenoni, you said that it would be based on additional customers. So, I'm just saying we need a conversation about that, like you know, what is it that would suffice our area? Uh how much are we willing to pay for the water? Um but I also am um grateful uh about the TDS the the water that we are getting from our groundwater that it is still safe. We don't need to do any kind of reverse osmosis or anything right now that it's blending well right with our our water right now. So that's I'm I'm just wanting to make sure that that you know the people that are around you know fishing and doing whatever that it's not going to be affecting any of that. Right. So, right. So, again, it's it's it's challenging. It's challenging because of the newasis river. Uh, as part of our bed and banks permit, uh, we did do aquatic life monitoring as well and determined that there weren't going to be issues there. Um the the river itself, that section of the river before any of this had already been designated by TCQ as an impaired water body primarily because of the the TDS and some of the impacts of uh of uh seawater. So >> okay, I did not know that. >> It's an it's it's yeah, >> it's an interesting conversing conversation. >> Okay. >> Right. Well, uh, again, and I am also grateful that at least, like you say, it's imperative that we get keep the Mary Roads pipeline fully operational. So, I just want to make sure that we are spending our, you know, our water rate waters, I mean, our our uh our water um, and being able to keep up with that, you know, our our our money. Um because like you said it's you know that's basically that you know that we just make sure that we upkeep our mayor roads pipeline and that you know we're doing everything possible to to keep it going and to um >> yeah we have anything we have a staff assigned to that there are and even beyond that there are many of us who work every day to ensure it runs as efficiently as possible. Um, >> yeah. So, anyway, >> it's on my mind every day. >> Oh, well, good. It's It's on everyone's mind. Uh, and also I'm I'm also grateful to hear that uh industry is hopefully uh talking about uh getting that water that we're uh trying to get from Evangelene and hopefully taking that off our hands uh and using them using that water to um help their you know their water usage but to off to help us you know actually in the long run. So again, um I I think that's that's really all I had to say. I just want to make sure that you know that the residents know that we are looking out uh for them and that we're making sure that whatever we do pay that it is fair and equitable that I hope that in the in the future that whenever we have to we that we have to raise these water rates that it is because it's everybody all the water customers having to do it and that you know that they hopefully um will not challenge those water rates. because what'll happen is it comes back to us. So again, please be mindful of that. Thank you. >> Thank you, Councilwoman and Councilman Beda. >> Here, just real quick, um, have we factored into the timeline or let me just let me I I I know I um please factor into the timeline that Evangeline's 22 permits may be contested. So, please be cognizant of that. You don't have to respond. I'm just I'm just asking that, you know, uh my father used to say, and I'm sure he stole it from somebody else, you plan for the worst and hope for the best. Uh what is it? Uh and then uh with regard to the reservation fee, I'd like to know with regard to NRA if with that and it can be discussed in close session or it doesn't matter, but I'd like to know who who else that they have reservation rights with before I make a decision. So that's all I have. Thank you. Okay. And and that was to my point, Councilman. Um well, I'd like to add what Councilman GMPOS uh requested into next week's briefing, the discussion. Uh she wanted a discussion on the firm yield. So, y'all can add that to the water. >> Well, uh so we because we knew we were doing this briefing today and it would only be uh one business day between now and Tuesday. We did we did not put on the next Tuesday's a water briefing because we're doing it. Yeah. just to be mindful of the council's time. So, >> the next one. >> Yeah, the next one. That's that that is a big topic to handle. Mayor, I don't know if we're ready to do that right now. We I'm trying to keep the team focused on bringing more water. >> That's something we can definitely do, but I would recommend uh it would take a couple of weeks to develop that. >> That's fine. And I think you're fine with it as long as as long as we can get it in there, you know, something that interests me as well. Um um but but to Councilman's um comment just now um I think that that's the point is just just providing us with and and you and I had this conversation. I may have had it with both Steon and and you Nick is we have to be real about what we're discussing that is not a negative on these options. What we're doing is amazing. You guys have been Drew prior to you, but the team that is still here and has been, y'all have been amazing in what has happened here, bridging the gap, you know, starting with the Mary Roads. Mary Road should be listed here, by the way, because it is a it was where it all began, you know, increasing that that water and and there's a risk there, too. There is a risk there, too. If something happens to that, you know, we're in trouble. We can't I mean, we're we we could have a an issue there. But but anyway, y'all have done an amazing job because we're sitting here trying to beat the timeline, but we cannot assume that everything here is going to work out perfectly and and we have to have that plan B. If 12 MGD can't be brought on in 6 to 8 months, and we're counting on that, what are we literally the people sitting right here? you, Nick, sit behind that podium, Peter, behind that desk. What are we going to do then? We have to look at that now. And I know it it could be it seems it may seem impossible because we're trying to beat November of 26, but we have to look at that. We just do. And that's why I want that list of a column of, you know, what is the risk associated um with adding more water to the to Mayor Road's pipeline? What's the risk associated with the wells? We have them. people came here and told us, "We're not giving you these permits." I don't know how true that is. I don't know how political that can be, but they told us already. Um, there are people already complaining about the water and how it tastes and we're saying is off the table. That's what I heard, Peter. So, I'm just saying it's y'all already know these things can happen because we're putting a lot of water in that river. So, I'm just trying to be a realist. I'm I'm not I think what we're doing I think we're going to achieve it. We're going we're going to beat this. Um but I think we need a plan very wisely. So, let's make sure that this body is very aware of the reality of what a risk can do to the timeline because that is what we're trying to beat here is timeline. So, I I um Oh, we've got more comments. Okay, Councilwoman Paxton, he's going to wrap it up. >> Thank you. Um, calm on risk. Sure. I'm still going to reiterate since it was reiterated. We need to keep the conversation that this is effective. What's the best way to to ensure that something succeeds? Don't let it fail. That's what this team has been working on really hard. And all of the information brought today is a testament to that. And our community deserves it. For us to explain to them, this is going to succeed. We'll figure it out. that kind of that kind of topic needs to be the overarching branch there. I did have a question. I saw it posted um I don't know a couple days ago um that there was a a decrease in our inflows basically the water coming into the lake has decreased from 2024 and I was curious do we um our science our data is that indic indicative of the reduction of actual rain water or is there an increased draw north of us is there what's kind of pointing to that decrease Sure. So the NA, you know, again, we meet with the National Weather Service weekly and they had a great graphic and I shared it uh at the last council meeting. So that's primarily due to the lack of rainfall. It's the lack of rainfall in our um in our watershed, right? And again, it's it's uh very historic. Um, and it's, you know, you talk to the the state climatologist and and and we always talk, we're also concerned about rainfall over Lake Texana and the Colorado River. And unfortunately, uh, where our reservoirs are at, it has not been good, as you all know, over the last couple of years, and we're trying to catch up. And the hard thing is normal uh, precipitation doesn't help us. We need extraordinary precipitation to help us. You know, it's it's in order to catch you got to catch up from a huge deficit. >> Yeah. >> So, if that's flowing, if I'm not mistaken, that's uh I don't know 30 40 million gallons a day that's coming into the lake. If that lake were to drop to zero, does that water continue to flow through? You know, there will always be a trickle supplying the the river coming towards us. what happens and I guess maybe that's part of the discussion that you were um referencing Peter is what happens if that goes to zero is that no longer an option completely because that river I would imagine will continue even if diminished >> yeah the river will absolutely continue to diminish uh and that's that's one of the reasons why those newasis groundwater wells make sense to supplement that flow >> but it will absolutely diminish and then you know our partners um utilizing water. I mean, they they're working on their own emergency projects >> or like city of Matthysse. They're they're working on their own projects to mitigate that. >> Okay. All right. Thank you, Councilman Scott. >> Hey, Peter. Um so, there was a presentation recently. You gave optimistic timelines and then I think it was realistic timelines. There were different there were different timelines for each project, you know, and and so I'd like to continue to see that. I'd like you all to articulate how they change and why they change. I think my sense is, hey, we met with, you know, three engineering firms and they showed us that we can we can do something at the same time and that's why the realistic timeline is is it is moving from December of next year to summer of next year. I think that's what I'm that's what I'm I think I articulated earlier. That's that's not a risk conversation. That's a that's a knowledge conversation. and and you gave us that pre may have been you may have been >> Garver Garver gave a a very detailed presentation. I actually have it here. They gave it on uh July 29th. >> Yeah. >> And they talked about expedited timelines and uh realistic timelines. >> Well, I think that's that's what I'm interested in. And so that if we don't make a timeline, we can say well that was an optim optimistic and say the realistic is my sense is the timeline you gave in today's presentation are very optimistic timelines. I understand I don't disagree with council member Paxton that we want to we want to make those right but I'd like to know you know my my my hesitancy is I I I think we'd like to work on the realistic timelines and then articulate how we're moving that timeline up. So that's my two cents. I' I'd like to see that again. I'd like you to articulate why it's different today than it was on July the 29th. Um uh when it comes to NRA next week, uh I had specifically asked for documentation when you were last year uh showing us examples how the water development board does fund P3 projects. I never got it. I'd like that. I don't I don't want to ask about it again. I'd like it. Uh and you and I was told I was going to get it. I was told I was going to get it some time back. The second part is I'd like to see a business plan. And Peter, I don't want you to think I'm just in a bad mood because I'm not feeling well, but I'm gonna hold you to it. You're the guy that's recommending that we make this this um this com financial commitment. And so I'm assuming that you've looked at the business plan that shows we're going to get these funds and these tanches and then our expenses are going to flow around such that we're going to have enough money, you know, to get the project done. I think it is unwise of us to make a $2.7 million contract a commitment uh especially this early in the process uh without really comfort and I think the banker in the room would say that that that there's a business plan and I hope there is. I assume there is and I assume you're going to show it to us next. >> No, I'm just going to save time now. There is none. We don't have they're developing it. But the reservation fee would be to be part of this business plan development. The reservation B says this this city wants to be part of this project and wants to reserve, >> but we don't know that there's going to be enough money at the end to fully fund the engineering necessary to get to the P3 contract. >> I would say that's a correct statement. Yeah. >> Well, I'm going to ask you to say it again next week so be prepared because that's that's a pretty big statement that >> we don't have a business plan that we're going to be asked to contribute to >> um very shortly and and that I think that's uh makes me nervous. Also, if you kind of work through present to us, I would like to see the Harbor Island those those those periods. It's the option period. It's the development period. I think that would be good to know. So, we have a sense of all right, we're putting 2.7 million. When are we going to feel like the project's real? Um, yeah. When are we going to feel like the project's real? That that those are my two cents. Thank you. Thank you, Mayor. >> Thank you, Councilman Councilman Roy. So, uh, thank you for the presentation. Um, you know, I want to thank the audience that has attended today. Also, I received a lot of phone calls and had a lot of one-on- ones with people in the community that had a lot of questions about where we're at and uh, I've had a lot of really good feedback. Um, so I just want to encourage everybody to continue to communicate with us. Uh I want to thank council. This was uh we do these workshops. I think one of the benefits of this um is that it does give us an opportunity to kind of be a little bit more laser focused on and and stay on track as far as looking at a particular issue or issues. So again, thank you council um for everybody willing to do this. Uh this is important. Um, you know, one of the things I can't help but thinking about is that if we didn't do the things that we've done already to enhance the Mary Roads pipeline and some of the other projects that we're working on, where will we be right now with that date? Because that date could really be coming up pretty quick if we hadn't put some of the other things in place to get to to utilize this um the water effectively right now. So, uh, just keep doing what you're doing. Um, and uh, I I really do believe we're going to get through this and we're going to learn. I think there's a lot of lessons that we can learn from this and hopefully that um, history will not repeat itself. You know, we've been fighting droughts and in Texas for years and u hopefully we can turn the page and and um, have it where we can eliminate the risk or at least lessen the risk in the future. So again, thank you very much. Coun uh Councilman Hernandez. >> Thank you, Mayor. Um you know, on some of the some of these issues, and we got the W CCW working on a lot of things, but really should focus on the the the items that'll help us avoid curtailment. And I'll say that I wanted to say that again for emphasis. And I think those two projects are Evangelene Laguna and Effluent Reuse for the immediate needs, right? All the other stuff is great and we need to spend time on them. But the the two main focuses are the ones that are getting the waters to us the quickest so we can avoid that curtailment. I know uh Councilman Betta identified in a very distinct way about the the concerns with curtailment, right? So, we want to make sure that we we focus on those uh very clearly laser focused on it. And that means communication with San Patricio um county commissioners as well as the city of Cinton. If that requires us to also do a backup with them, uh, feeding off the Merry Roads pipeline for the to their water treatment plant, then we need to, you know, negotiate those deals so we can give them reassurances that we're not going to be uh impacting them negatively, right? So I I I just think that if we do those things and be partners and have a win-win situation in these discussions with them um and you know realize that San Patricio does take a lot of water from us and if we run out of water they run out of water >> right >> yes >> is that >> it's 40 million gallons a day they get from so if we run out of water San Patricio runs out of water too >> yes >> right >> okay so I want to make sure that we're we're doing the correct uh discussions So we don't, you know, we don't put them in a situation where they're afraid that we're taking their water and we're not. We're we're in compliance with the groundwater control district with what the requirements are. We you know, you know, let's give them the assurances that they need and and get this water and and move as quickly as possible. I think that will help the groundwater control district because I think at their last meeting they had more people there than they had their entire existence. >> Uh >> yeah, at the at the board at the ground Yeah. Right. So, we we need to give them the tools and the information that they need to be comfortable with the decisions of making us to giving us those transfer permits. >> Right. >> Um uh just I want to make sure that's the case. And if you need help from us, >> Yeah. >> please ask. >> Well, we will. So, Councilman, we I met recently with John Hobson, the city manager of Cinton and also the mayor of Cinton. And um one of the things I promised them but council will have to approve it is just what you said which is that uh we are one going to uh take care of any uh we're going to remedy any situation that could happen to their existing three wells meaning we will be responsible for the engineering and the and the payment to fix that. And then secondly that we'll give them an interconnect to our water supplies whether it's the evangel uh the Mary Rose pipeline or our evangeline wells. This is in in the event something happens to their pumping unrelated to our wellfield. They'll have the opportunity to tie into our system for 60 days free. Uh we have a draft um in a local agreement. Uh this is where you'll all come in where I'm going to present it to uh the city manager of Cinton next week if we can get on his calendar and then we'll bring that to this council and then he'll bring it to his city council for that approval. uh that has really um helped them tremendously to to know that we're partners with them and that we're not going to impact Cinton. Secondly, we'll be meeting with a smaller groundwater district there, the St. Paul St. Paul water district. We'll be meeting with them hopefully next week with a similar message. And um recently I did meet with the city manager as I said and the mayor of Cinton, Judge Krebs, and then we met with Mayor Skaro and city manager Wright in Portland, uh the biggest city, second to Corpus in the region. So, uh, we're doing just what you said and we're going to continue to do that. We did promise Judge Krebs a presentation to the full commissioners in an upcoming meeting. They meet, um, I think he said every, uh, they meet frequently. So, we we're going to get on their agenda to do a formal presentation on our project uh, in these next couple of months. >> Okay. So, that that that helps with that, >> right, >> that answer. The other side is wastewater reuse. Um, you know, we need to get off the snide on that one and and move as f fast as we can go on that, especially if we can get it to to industrial partners. >> We do. And Ardora, he Dan Linuk is here. So, you may recall there was an initial uh we were talking Ardora GCA. Uh, GCA is is still a potential partner. Uh, Dan though with Line Decker is still with Adora, I should say, is still the lead on this helping the city. And I understand that, but and and I understand that GCA likes treating water and Garver is looking into direct reuse. >> Yeah, we're not looking at that. >> If we can avoid all that, that'll take a lot of time out of it. Maybe it's just our Dura doing their work. >> That's that's exactly what we're doing. >> Okay. >> Yeah. >> Okay. Thank you. >> Thank you, Nick. Thank you. This is going to conclude our water workshop. And again, thank everybody for being here. Staff, thank you so much for all the work behind this. Um we have a couple of follow-up items, but I think that um like I mentioned earlier, uh there is absolutely hope that we will bridge this gap and hopefully work towards um you know the I keep calling it the immediate need is bridging the gap and the short term is the one to threeyear solution. So um thank you all very much. Thank you Dan for being here as well. All right, workshop adjourned.