Werkshop City Council Special-Called Meeting MEETING MINUTES " February 12, 2025, at 5:30 PM - 2801 Ranch RD 1869 Liberty Hill, Texas 78642 4 & Poww. BIG City Council Present: Crystal Mancilla Amanda Young Diane Williams 1 Wade Ashley City Council Absent: Michael Helbing Jacquetta Thayer City Staff Present: Paul Brandenburg, City Manager Mike Etienne, Deputy City Manager Elaine Simpson, City Secretary Jeff Ringstaff, Police Chief Candice Scott, Director of Human Resources Josh Armstrong, Director of Finance Katie Amsler, Director ofCommunications and Community Engagement James Herrera, Interim Director of Public Works McKenzi Hicks, Interim Director of Planning and Development Trey Evans, Water Superintendent Christian Kurtz, Economic Development Department Exec. Director 1) CALL TO ORDER The City Council Special Called meeting was called to order by Mayor Mancilla at 5:33 PM. at the City Municipal Court / Council Chamber at 2801 Ranch Road 1869, Liberty Hill, TX. A quorum was established, and all members were present. 2) REGULAR AGENDA a) Presentation 'Water Rates 101' Zack Stein and Grady Reed with HDR consultants Liberty Hill Water Rates Workshop 2 12 25.pdf City Council Workshop Meeting February 12, 2025 1 Page 1 of 2 Grady Reed with HDR Consultants delivered a PowerPoint presentation. Going slide by slide he explained that the consultants worked with the consultants who did the Wastewater Master Plan study, in order that all the same projections were used for Water. See 'Exhibit A' to these minutes. He explained that growth is expected to occur. It will come as fast as water becomes available. He noted that the Water certificate of convenience and necessity (CCN) (establishing the water service area boundaries) are smaller than the boundaries for Wastewater. The assumed growth rate is 7.5% increasing to 9.5% by Fiscal Year (FY) 2029. The proposed increase for water rates is 9% per year. There are no changes recommended to the rate structure (no addition of tiers, for instance). In the future, there are no plans for transfers from Water Fund to General Fund to support General Fund. In the future, it is recommended that City Council evaluate the rates annually, not just when a new study is done. Mr. Reed fielded some questions and there was a brief discussion of the future use of Franchise Fees and Administrative Services Fees which would take revenue from Water to General Fund. There was also a brief discussion about the items included in the Capital Improvement Plan (CIP) as listed in the study. Mike Etienne and James Herrera will work with city staff to make sure the CIP listed is the correct / updated list with current figures. 3) ADJOURNMENT Given there were no further agenda items and hearing no objections from the Council, Mayor Mancilla adjourned the meeting at 5:57 PM. Approved by City Council at their meeting on the 26th of February 2025, by a vote of y Ayes, 0 Nays and DAbstentions, with a. being absent. oung GuphiPnall Maybr Crystal Mancilla Attest: 225 2077 Elaine Simpson City Secretary a - * * * ) City Council Workshop Meeting February 12, 2025 2 age 2 of 2 Exhibit A a 2.12.2025 Lbamy 2025 Update of Water Rates nn City Council Workshop February 12, 2025 LIBERTY HILL ER SMALL TOWN BIG HEART BACKGROUND - Water o Fund balance has been declining the last few years due to limited growth in revenue and increases in expenses. O While there is some uncertainty in the timing, the utility could experience rapid growth if additional water supplies are secured. o New projects to handle growth will cause expenses debt-service) to rapidly increase in the near-term. O The water utility is a smaller utility (not the same economies of scale) with more limited growth than the wastewater utility. ASSUMPTIONS a Revenue is planned for an "average' year (residential use of 5,500 gallons per month). Revenue can be higher in hot, dry years. a Assumes 1,842 connections for FY25 with a total billed use of 163.6 mg. a Assumed growth rate of 7.5% for FY26 and increasing to 9.5% in FY29. a Total water budget of $3.6 million for FY25. a Water expenses are projected to increase to $8.4 million in FY29 ($4.8 million or 135%). - Future expenses are being driven by increased debt service. ASSUMPTIONS a Operations and Maintenance fund balance = $1,000,000 Impact Fee Fund Balance = $8,200,000 a No changes to rate structure - rate increases will be 'across the board" E No transfer to the General Fund in FY25 or future years a Use of Impact Fee funds to pay for debt service beginning in FY26 ($750,000 in FY26 increasing to $2,250,000 in FY29) $3.0 million of impact fee funds remain for future use CAPITAL IMPROVEMENT PLAN Source Five-Year of Estimated Project Cost by Year CIP Project Name Funding 2025 2026 2027 2028 2029 Total RR 1869 Fire (WL-1) Fees $ $ $ $ $ 2,084,126 $ 2,084,126 Hickman St Fire (WL-2) Cash $ $ $ $ $ 500,044 $ 500,044 Downtown Fire (WL-3) Cash $ $ - $ $ $ 9,733 $ 9,733 Seward Junction Loop (WL-4) Debt $ $ $ - $ 18,902,575 $ $ 18,902,575 SH-29 to Well Site 4 (WL-5) Debt $ $ $ $ $ 7,995,843 $ 7,995,843 ESTL Loop Closure E (WL-6) Debt $ $ $ $ $ 2,844,534 $ 2,844,534 Prop School Service (WL-7) Debt $ $ 617,594 $ $ $ $ 617,594 Butler Farms EST Water Line (WL-8) Debt $ $ $ 530,939 $ $ - $ 530,939 SH 29 to Bulter Farms (WL-9) Fees $ $ $ $ 2,289,413 $ - $ 2,289,413 Butler Farms EST (WT-1) Debt $ $ 21,594,144 $ $ $ $ 21,594,144 Georgetown Connection Upgrades (WS-1) Fees $ 946,500 $ $ $ $ $ 946,500 Various water line replacements Other $ 2,850,000 $ $ $ $ $ 2,850,000 $ 6,796,500 $ 22,211,738 $ 530,939 $ 21,191,988 $ 13,434,280 $ 64,165,445 RATE RECOMMENDATIONS 9.0% Across the Board rate increase through FY29 O $7.37/month for 7,500 gallons of use in first year Sample Monthly Bill Change % Change Class Monthly Use 2024 2025 2026 2027 2028 2029 2024-2025 2024-2025 Residential w/ 3/4" meter 2,500 $ 54.53 $ 59.44 $ 64.80 $ 70.64 $ 77.00 $ 83.94 $ 4.92 9.0% 5,000 $ 68.00 $ 74.14 $ 80.82 $ 88.11 $ 96.05 $ 104.71 6.14 9.0% 7,500 $ 81.48 $ 88.84 $ 96.85 $ 105.59 $ 115.10 $ 125.49 $ 7.37 9.0% 10,000 $ 94.95 $ 103.54 $ 112.87 $ 123.06 $ 134.15 $ 146.26 $ 8.59 9.1% 12,500 $ 117.40 $ 128.02 $ 139.55 $ 152.14 $ 165.85 $ 180.81 10.62 9.0% 15,000 $ 139.85 $ 152.49 $ 166.22 $ 181.21 $ 197.55 $ 215.36 12.64 9.0% 20,000 $ 184.75 $ 201.44 $ 219.57 $ 239.36 $ 260.95 $ 284.46 16.69 9.0% Commercial w/ 1" meter 5,000 $ 129.57 $ 141.26 $ 153.97 $ 167.85 $ 182.96 $ 199.44 11.69 9.0% 10,000 $ 156.52 $ 170.66 $ 186.02 $ 202.80 $ 221.06 $ 240.99 14.14 9.0% 15,000 $ 201.42 $ 219.61 $ 239.37 $ 260.95 $ 284.46 $ 310.09 $ 18.19 9.0% 25,000 $ 304.62 $ 332.11 $ 361.97 $ 394.60 $ 430.16 $ 468.89 $ 27.49 9.0% 50,000 $ 596.12 $ 649.86 $ 708.22 $ 772.10 $ 841.66 $ 917.39 6 53.74 9.0% 100,000 $1,062.52 $1,158.26 $1,262.22 $1,376.10 $1,500.06 $1,634.99 95.74 9.0% 250,000 $2,928.12 $3,191.86 $3,478.22 $3,792.10 $4,133.66 $4,505.39 f 263.74 9.0% WATER UTILITY SUMMARY Water Revenue Requirement Summary $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 2025 2026 2027 2028 2029 0&M Expenses Existing Debt New Debt Operating Capital Cash Funded Capital Operating Transfers - Total Revenue WATER UTILITY FUND Percent Operating Reserves 45.0% 40.0% - 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2025 2026 2027 2028 2029 Target Operating Reserve Actual Operating Reserve RESIDENTIAL BILL COMP. - Sorted by Residential Bill @ 5,000 Gallons/Month Water Use - WATER City Bill for 5,000 Gallons Liberty Hill (Proposed) $ 74 Pflugerville $ 72 Liberty Hill (Current) $ 68 Kyle $ 66 Leander $ 60 San Marcos $ 52 Hutto $ 51 Bastrop $ 47 Buda $ 47 Lockhart $ 46 Georgetown $ 39 Belton $ 36 Cedar Park $ 33 Round Rock $ 29 COMMERCIAL BILL COMP. - Sorted by Commercial Bill @ 25,000 Gallons/Month Water Use - WATER City Bill for 25,000 Gallons Buda $ 349 Liberty Hill (Proposed) $ 332 Pflugerville $ 321 Liberty Hill (Current) $ 305 Kyle $ 289 Leander $ 249 San Marcos $ 241 Hutto $ 233 Lockhart $ 214 Georgetown $ 145 Cedar Park $ 138 Bastrop $ 138 Belton $ 118 Round Rock $ 106 QUESTIONS?