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HomeMy WebLinkAboutAgenda_GWUAB_07.09.2020Notice of Meeting for the Georgetown Water Utility B oard of the City of Georgetown July 9, 2020 at 2:00 P M at Georgetown P ublic L ibrary, 402 W. 8th. St., Georgetown, T X. 78626 T he C ity of G eorgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require as s is tance in partic ipating at a public meeting due to a disability, as defined under the ADA, reas onable as s is tance, adaptations , or ac commodations will be provided upon request. P leas e c ontact the C ity S ec retary's O ffic e, at leas t three (3) days prior to the sc heduled meeting date, at (512) 930-3652 or C ity Hall at 808 Martin Luther King Jr. S treet, G eorgetown, T X 78626 for additional information; T T Y users route through R elay Texas at 711. “P lease note that a quorum of the Ge orge town Wate r Utility Advisor y B oard may not all be pr esent at the same physic al location. Some membe rs may inste ad participate in this mee ting fr om one or mor e r emote locations in an effor t to advanc e the public health goal of limiting face to fac e mee tings and to c ontain the spr ead of C O V I D-19. In addition, ther e may be oc casions whe n the audio transmission may not be c le ar or may be inte rr upted. In those instance s, the mee ting will continue so long as a quor um is still pr esent. With the Gove rnor’s O r de r, all City B uildings are following the se pr oce dure s: M asks are re quir ed P hysical distancing; 6 fee t be twe en you and anyone not in your household P r actice good hygie ne and wash your hands If any of the se apply, do not visit: known close contact with C O V I D -19 P e rson, fever gre ater or e qual to 100.0 degr ee s F ahre nheit, diffic ulty bre athing or shortness of br eath, cough, loss of taste or smell, sore throat, c hills, headache, diar rhea or musc le pain. “ Regular Session (T his R egular S es s ion may, at any time, be rec es s ed to c onvene an Exec utive S es s ion for any purpose authorized by the O pen Meetings Act, Texas G overnment C ode 551.) A C all to O rder T he Board may, at any time, recess the R egular S es s ion to convene in Executive S ession at the request of the C hair, a Board Member, the C ity Manager, As s is tant C ity Manager, Direc tor of Water Utilities , C ity C ounc il Member, or legal counsel for any purpose authorized by the O pen Meetings Act, Texas G overnment C ode C hapter 551, and are subject to ac tion in the R egular S ession that follows . Page 1 of 146 B Direc tors R eport - G lenn Dishong, Director of Water Utilities P ublic Wishing to Address the B oard O n a s ubjec t that is posted on this agenda: P lease fill out a speaker regis tration form whic h can be found at the Board meeting. C learly print your name, the letter of the item on which you wish to speak, and pres ent it to the S taff Liais on, preferably prior to the start of the meeting. You will be c alled forward to speak when the Board cons iders that item. O n a s ubjec t not posted on the agenda: P ersons may add an item to a future Board agenda by filing a written request with the S taff Liais on no later than one week prior to the Board meeting. T he reques t must include the s peaker's name and the spec ific topic to be addres s ed with sufficient information to inform the board and the public . F or Board Liaison c ontact information, pleas e logon to http://government.georgetown.org/c ategory/boards -commissions /. C P ublic Wishing to Address the Board O n a subject that is posted on this agenda: P leas e fill out a s peaker registration form which c an be found on the table at the entrance to the Board Meeting. C learly print your name and the letter of the item on whic h you wis h to s peak and pres ent it to the S taff Liais on, prior to the start of the meeting. You will be called forward to s peak when the Board c onsiders that item. O nly persons who have delivered the speaker form prior to the meeting being called to order may speak. O n a subject not posted on the agenda: P ers ons may add an item to a future R egular sc heduled Board agenda by filing a written reques t with the S taff Liaison no later than one week prior to the Board meeting. T he request mus t inc lude the speaker’s name and the spec ific topic to be addres s ed with sufficient information to inform the board and the public. Only those persons who have submitted a timely request will be allowed to speak. F or Board Liais on contac t information, please logon to http://georgetown.org/boards commissions / -- At time of pos ting, there were no request to address the Board Regular Agenda D R eview and pos s ible ac tion to approve the minutes from the regular joint Electric and Water Board meeting held on June 18, 2020. - Tina Davis , Board Liais on Adjournment Ce rtificate of Posting I, R obyn Densmore, C ity S ecretary for the C ity of G eorgetown, Texas, do hereby c ertify that this Notic e of Meeting was posted at C ity Hall, 808 Martin Luther King Jr. S treet, G eorgetown, T X 78626, a plac e readily acc es s ible to the general public as required by law, on the _____ day of _________________, 2020, at __________, and remained s o posted for at leas t 72 c ontinuous hours prec eding the s cheduled time of said meeting. __________________________________ R obyn Dens more, C ity S ec retary Page 2 of 146 Page 3 of 146 City of Georgetown, Texas Water Utility Board July 9, 2020 S UB J E C T: C all to O rder T he Board may, at any time, rec es s the R egular S ession to c onvene in Exec utive S es s ion at the reques t of the C hair, a Board Member, the C ity Manager, Assistant C ity Manager, Director of Water Utilities, C ity C ouncil Member, or legal c ouns el for any purpos e authorized by the O pen Meetings Ac t, Texas G overnment C ode C hapter 551, and are s ubjec t to action in the R egular S es s ion that follows. IT E M S UMMARY: F IN AN C IAL IMPAC T: . S UB MIT T E D B Y: twd Page 4 of 146 City of Georgetown, Texas Water Utility Board July 9, 2020 S UB J E C T: Directors R eport - G lenn Dis hong, Direc tor of Water Utilities IT E M S UMMARY: P res entation Utility R eport by G lenn Dis hong May 2020 C I P Update by Daniel Havins F IN AN C IAL IMPAC T: . S UB MIT T E D B Y: G lenn Dis hong; Direc tor of Water Utilities AT TAC H ME N T S: Description Type Water Services-Water Rate Study 8.13.20 Final Backup Material Fiscal and Budgetary policy 2018 Final Backup Material 2018 WWS Rate Study Backup Material Water Utility Advis ory Board Presentation 8.13 DRAFT Backup Material Page 5 of 146 Water Services Brief History and Looking Forward Page 6 of 146 OVERVIEW •Policy •Background •2018 Rate Study •Water Planning •Capital Improvement Projects Page 7 of 146 FISCAL AND BUDGETARY POLICY •A rate study will be conducted every 3 years to review rate methodology and ensure revenues will meet future needs. All enterprise rates will be based on standardized cost of service methodologies and conservation goals. •Working capital reserves should be 25% or ninety (90) days of operating expenses, net debt service and long‐term water contract costs. •Also we are required by policy to have 90 days contingency for operating costs •Bond Coverage Ratio –1.5x coverage of self-supported debt •Last rate study was in 2018 Page 8 of 146 BACKGROUND- Chisolm Trail Special Utility District CTSUD approached the City of Georgetown about the possibility to merge the 2 systems 2011 Board voted to merge the 2 water systems 2013 Public Utility Commission of Texas approved the merger, Chisolm Trail SUD customers became COG customers and Chisolm Trail SUD employees became COG employees 2014 Merger and transfer of service area was approved by the PUC 2015 Chisolm Trail SUD dissolved in accordance with Senate Bill 248 2019 Page 9 of 146 Prior to CTSUD •23,500 customers •~75 square miles of utility coverage CTSUD Acquired •Gained 7,633 customers •Gained 375 square miles of utility coverage CUSTOMERS Page 10 of 146 WATER UTILITY COVERAGE Page 11 of 146 •On average ~3,000 number of new connects per year TRENDS 21,967 33,030 35,903 38,486 40,870 44,166 46,771 - 10,000 20,000 30,000 40,000 50,000 60,000 2014 2015 2016 2017 2018 2019 2020 Meter Count Ch i s o l m T r a i l A c q u i s i t i o n Page 12 of 146 CONSERVATION AND WATER PLANNING Page 13 of 146 WATER RATE OVERVIEW •Considerations and Inputs •Advancement of CIP Plan •Promote efficient water use via tiers •Water Rate Breakdown •Base Charges •75% of fixed costs recovered in base rate •Volumetric Charges •25% of fixed costs recovered in first tier •Second through fourth tiers covers •Oversizing and acceleration •Conservation initiatives •Fifth tier for excessive use Page 14 of 146 CURRENT RATES –WATER RESIDENTIAL •Base Rates (effective 01/01/2014) •¾ inch meter •$23.00 inside city •$27.50 outside city •Volumetric Rates (effective 01/01/19)*Cost is per 1,000 gallons (1,000 gallons)Volumetric Rate 0-10 $1.75 11-20 $2.40 21-40 $4.00 41-60 $6.50 61 and above $8.50 Page 15 of 146 CURRENT RATES –WATER NON-RESIDENTIAL Non-Residential Volumetric Water Rates (effective 01/01/19)*Cost is per 1,000 gallons Meter Size Tier 1 Rate Tier 2 Rate Tier 2 Threshold Small Commercial <2″$2.40 $6.50 300,001 gallons Large Commercial 2″$2.40 $6.50 600,001 gallons Large Commercial 3″$2.40 $6.50 900,001 gallons Large Commercial 4″$2.40 $6.50 4,000,001 gallons Large Commercial 6″$2.40 $6.50 6,000,001 gallons Large Commercial 8″$2.40 $6.50 8,000,001 gallons Manufacturing <8″$2.40 Municipal Interruptible $2.40 Restaurant $2.40 Evaporative Cooling $2.40 Fire Flow $2.40 Irrigation Only $4.00 $8.50 500,001 gallons Page 16 of 146 CURRENT RATES –WASTEWATER Wastewater Rate Schedule (effective October 1st, 2019) Customer Charge Inside (per month) Volumetric Chg (per 1000 gals) Customer Charge Out (per month) Volumetric Chg (per 1000 gals) Residential Service Single family / Domestic use only $32.00*N/A $36.75*N/A Small Commercial Service 4″ sewer line / 3/4″ wtr mtr / 10 fixtures or less / must be requested in writing $32.00 N/A $36.75 N/A Commercial Service 6″ or smaller sewer line $48.40 $2.75 $55.65 $3.15 Large Commercial Service 8″ or larger sewer line $85.95 $2.75 $98.85 $3.15 High Strength Commercial BOD over 250 / food processing or high level of oil or chemicals in the discharge $48.40 $4.50 $55.65 $5.20 Multi-Family Service Residential housing with three or more individual dwelling units per water meter $114.95 $2.75 $132.20 $3.15 *Residential low-income discount of 20% is available to customers who can provide us with verifiable proof of participation in the Medicaid Program by a permanent resident in the household. Page 17 of 146 WATER PLANNING •Water Resources Planning •Supply •Surface Water •Ground Water •Conservation •Infrastructure •Lake Georgetown •BRA Pipeline •Wells •State Water Plan •Updated every 5 years •50-year planning horizon •System Capacity Planning •Priorities •Domestic use •Fire flow •Outdoor use •Infrastructure •Treatment Plants •Pumps •Water Lines •Storage Tanks •Water Master Plan •Updated every 5 years •20-year planning horizon •Outlines CIP needs Page 18 of 146 WATER PLANNING •Current Resources and Capacity •Water Supply –53,795 ac/ft of raw water •Surface Supply -45,707 ac/ft •Lake Georgetown –6,720 ac/ft •Lake Stillhouse Hollow –38,987 ac/ft •Groundwater Supply –6,888 ac/ft (Edwards Aquifer) •Water Treatment Capacity –47mgd •Lake WTP –28.6mgd •Park WTP –6.2mgd •Southside WTP –3.2mgd •Domel WTP –3.0mgd •Round Rock Interconnection –3.0mgd •(Additional 3mgd available w/ infrastructure improvements) Page 19 of 146 WATER PLANNING 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Ac r e -Fe e t Water Resource Availability Total Water (ac/ft)Blanchard Water Agreement Average Demand Average Demand w/Conservation Blanchard Contract 2042 -Add'l Supply Needed 2,500 Connections/year Page 20 of 146 WATER USE TRENDS •Summer Impacts •Continued to see high growth •Nearly 3,300 new metered water connections / 7.95% growth •High temperatures through September prolonged high use •Entered into Drought Contingency Plan •Treatment capacity threshold met 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Acre Feet Water Supply 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MGD Treatment Capacity Expected at 160 GPCD Page 21 of 146 WATER USE TRENDS 0 5 10 15 20 25 30 35 40 45 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Av e r a g e P r o d u c t i o n ( M G D ) Average Domestic Use Average Outdoor Use Max Production (MGD) Capacity is sized to serve peak demand Page 22 of 146 Water Conservation in Georgetown •Conservation is a source of future water supply. •More cost-effective than developing new surface or groundwater resources. •TWDB projects by 2030, 8.1% of new water resources in Williamson County will come from conservation efforts. •Long term we need to use less water per person than we do today. Surface Water, 75.4% Groundwater, 14.6% Municipal Conservation, 8.1% Other Conservation, 1.9% Share of Water Resources Page 23 of 146 2018 WATER RATE STUDY Page 24 of 146 2018 RATE STUDY •Key Issues Identified •Descending Financial Performance –Rates will not keep up with costs without adjustments •Wholesale Supplier Cost Increases •Rapid Growth, Capital Projects and New Debt Service –$195M in Capital Project needs between FY 2019 and FY 2023 Page 25 of 146 2018 RECOMMENDATIONS REVENUE SUFFICIENCY MINIMIZE RATE SHOCK TO CUSTOMERS BY PHASING IN RATES POTENTIAL RATE DESIGN ALTERNATIVES Page 26 of 146 2018 COMBINED REVENUE PERFORMANCE – CURRENT RATES Page 27 of 146 2018 PROPOSED RATE INCREASES •Water •Rate increases adjust both minimum and volumetric rates across all customer classes by the % above•Proposed Rate Design changes effective FY 2019 yields an estimated 17% increase in rate revenues •Irrigation Block •Base Rate multipliers •Possibly offset with behavior changes •Wastewater •Rate increases adjust both minimum and volumetric rates across all customer classes by the % above Page 28 of 146 2018 COMBINED REVENUE PERFORMANCE – PROPOSED RATES Page 29 of 146 2018 COMBINEED FUND PERFORMANCE- CURRENT RATES VS. PROPOSED RATES 2018 Current Rates 2018 Proposed Rates Page 30 of 146 WATER PROPOSED FIXED RATE DESIGN METER EQUIVALENCIES Page 31 of 146 WATER PROPOSED VOLUMETRIC RATE DESIGN COMMERCIAL (LESS THAN 3”) Page 32 of 146 WATER PROPOSED VOLUMETRIC RATE DESIGN COMMERCIAL (4”, 6”, 8”) Page 33 of 146 2018 WASTEWATER PROPSED FIXED RATES Page 34 of 146 2018 WASTEWATER PROPOSED FIXED AND VOLUMETRIC RATES Page 35 of 146 2018 Implementations •The residential rate structure was not affected and did not change. •The monthly charges for the commercial rate structures increased for meters greater than 1.5 inches. •Irrigation rate tiers (blocks) were added to commercial customers to recover peak increases related to commercial irrigation usage. •The non-potable rate increased to $1.25 per 1,000 gallons and the rate for meters on fire hydrant connections for non-irrigationwater use increased to $8.50 per 1,000 gallons. •These rates became effective in January 2019. •Previous adjustments were in 2014. Page 36 of 146 LOOKING FORWARD •Water Conservation •Water Treatment Capacity •Maintaining the Utility •Infrastructure and increased operating costs •Increase in cost of water contracts •Every 3 years or so new rates are implemented Page 37 of 146 PREPARING FOR 2020 AND BEYOND •Current Projects •Sun City 2 MG Water EST -Complete •Braun 3.5 MG Water EST -Complete •Ronald Reagan 30” Water Line -Complete •Cedar Breaks to Pastor Dedicated 24” Water Line –Substantially Complete •Lake WTP Raw Water Intake & Pump Station Improvements –Complete •Pastor Pump Station –Substantially Complete •West loop 24” Waterline Improvements –Substantially Complete •Round Rock Interconnect –1 MGD –Complete •Leander Customer Transfer 1200 customers +/-1.5 MGD •Future Projects •2020 •Lake 980 High Service Pump Station •2021 •CR 255 Water Line •Leander Interconnect 3 MGD •Shell Road Water line •South West Bypass Water Line Improvements •2022 •Round Rock Interconnect –3 MGD •North Lake Water Treatment Plant Exp –8.8 MGD •2025 •South Lake Water Treatment Plant –22 MGD Page 38 of 146 Aquifer Storage and Recovery Study •Ph 1-Assessment •Seasonal Utilization •Long term water Supply •Available reservoir •Recharge Availability •Hydrogeologic review •Water quality Compatibility •Ph 2 –Conceptual Scenarios •Planning level costs and ranking vs traditional water supply •Ph 3 –Pilot Testing •Ph 4 –Exploratory Well drilling •Ph 5 –Design and Permitting •Ph 6 -Implementation Groundwater Resource Study •Opportunities previously marketed by various groups •BRA Collaboration between BRA, Georgetown, Round Rock •Development of additional water resource regional and long -term solutions •Williamson county 2070, <162,000 acft/yr> •Georgetown (65,467) acreft/yr •Round Rock (16,566) acreft/yr •Future Phases implementation of long - term water supply solutions BRA INITIATIVES Page 39 of 146 CIP COSTS-WATER Page 40 of 146 CIP COSTS-WASTEWATER Page 41 of 146 CHANGES •Transfer of customers to Leander ~1,200 accounts •FY22 -Liberty Hill Customer Transfer ~ up to 3,500 accounts Page 42 of 146 QUESTIONS? Page 43 of 146 1   FY2018 Annual Budget  Fiscal and Budgetary Policy Adopted: September 12, 2017 Contents I. PURPOSE............................................................................................................................................ 2  II. FUND STRUCTURE AND BASIS OF BUDGETING ....................................................................................... 2  III. OPERATING BUDGET ........................................................................................................................... 3  IV. REVENUE MANAGEMENT .................................................................................................................... 6  V. EXPENDITURE MANAGEMENT .............................................................................................................. 9  VI. STAFFING AND COMPENSATION ......................................................................................................... 13  VII. FUND BALANCE POLICIES ................................................................................................................... 14  VIII. LONG‐TERM LIABILITY RESERVES ........................................................................................................ 15  IX. BUDGET CONTINGENCY PLAN ............................................................................................................ 15  X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET ............................................................................... 16  XI. CAPITAL MAINTENANCE AND REPLACEMENT ....................................................................................... 17  XII. ACCOUNTING, AUDITING AND FINANCIAL REPORTING .......................................................................... 19  XIII. ASSET MANAGEMENT ....................................................................................................................... 20  XIV. DEBT MANAGEMENT ........................................................................................................................ 22  XV. OTHER FUNDING ALTERNATIVES ........................................................................................................ 25  XVI. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS .................................................................. 26  XVII. INTERNAL CONTROLS ........................................................................................................................ 29  Page 44 of 146 2   FY2018 Annual Budget  I. PURPOSE    The City of Georgetown is committed to financial management through integrity, prudent stewardship, planning,  accountability, full disclosure and communication.  The broad purpose of the Fiscal and Budgetary Policies is to  enable the City and its related component units, including the Georgetown Transportation Enhancement  Corporation (GTEC) and the Georgetown Economic Development Corporation (GEDCO), to achieve and maintain  a long‐term stable and positive financial condition, and provide guidelines for the day‐to‐day planning and  operations of the City’s financial affairs.      Policy scope generally spans areas of accounting, operational and capital budgeting, revenue and expenditure  management, financial reporting, internal controls, investment and asset management, debt management and  forecasting.  This is done in order to:    A. Demonstrate to the citizens of Georgetown, the investment community, and the bond rating agencies that  the City is committed to a strong fiscal operation;    B. Provide precedents for future policy‐makers and financial managers on common financial goals and  strategies;    C. Fairly present and fully disclose the financial position of the City in conformity to generally accepted  accounting principles (GAAP); and    D. Demonstrate compliance with finance‐related legal and contractual issues in accordance with the Texas Local  Government Code and other legal mandates.    These policies will be reviewed and updated annually as part of the budget preparation process.    II. FUND STRUCTURE AND BASIS OF BUDGETING    The budgeted funds for the City of Georgetown include:     Governmental Funds: General Fund which accounts for all financial resources except those required to  be accounted for in another fund, and include basic governmental services, such  as Street Maintenance, Planning and Development, Police, Fire, Parks, as well as  Solid Waste Management.     Special  Revenue  Funds (SRF) account for specific revenues that are legally  restricted for specified purposes.  The City currently budgets 26 SRF Funds and  includes Tourism, Parkland Dedication, Library Donations, Animal Services  Donations, and Street Maintenance Sales Tax.    Debt Service Fund is used to account for the payment of general long‐term debt  principal and interest.    Capital Project Funds are used to account for the acquisition or construction of  major capital facilities other than those financed by enterprise activities.    Page 45 of 146 3   FY2018 Annual Budget  Proprietary Funds: Internal Service Funds account for goods or services provided by one internal  department to another.  The City uses this system to recognize cost for fleet  replacement and maintenance, facility maintenance, computer replacement  and maintenance and employee health insurance costs.    Enterprise Funds include the City’s “business like” activities including all the  utility funds and the airport.    Basis of Accounting and Basis of Budgeting    The City accounts and budgets for all Governmental Funds using the modified accrual basis of accounting.   This basis means that revenue is recognized in the accounting period in which it becomes available and  measurable, while expenditures are recognized in the accounting period in which they are incurred.  Because  the appropriated budget is used as the basis for control and comparison of budgeted and actual amounts,  the basis for preparing the budget is the same as the basis of accounting.  Exceptions to the modified accrual  basis of accounting include:     Encumbrances, which are treated as expenditures in the year they are encumbered, not when expended   Grants, which are considered revenue when awarded, not received   Principal and interest on long‐term debt, which are recognized when paid.    General government funds include the General Fund, special revenue funds, debt service fund and general  capital project funds.      Proprietary Funds, which include the enterprise and internal service funds are accounted and budgeted using  the full‐accrual basis of accounting.  Under this method, revenues are recognized when they are earned and  measurable, while expenses are recognized when they are incurred regardless of timing or related cash  flows.  The basis for preparing the budget is the same as the basis of accounting except for principal payments  on long‐term debt and capital outlay which are treated as budgeted expenses.  Exceptions include:     Depreciation which is not budgeted   Non‐budgeted accruals such as compensated absences.    III. OPERATING BUDGET    Budgeting is an essential element of the financial planning, control and evaluation process of municipal  government. The operating budget is the City’s annual financial operating plan.  The annual budget includes all  of the operating departments of the General Fund, proprietary funds, debt service funds, special revenue funds,  and capital improvement funds of the City.    A. Form of Government – The Charter (Section 1.03) established a “Council‐Manager Government” wherein the  City vests power in the City Council to “enact legislation, adopt budgets, determine policies, and appoint the  City Manager who shall execute the laws and administer the government of the City.”    B. Comprehensive Plan – The Charter (Section 1.08) requires that the City Council “establish comprehensive  planning as a continuous and ongoing governmental function in order to promote and strengthen the existing  Page 46 of 146 4   FY2018 Annual Budget  role, processes and powers of the City of Georgetown.” The current comprehensive plan is the 2030 Plan  adopted in 2006.     C. Preparation – The Charter (Section 6.02) requires “a proposed budget prepared by the City Manager and  submitted to the City Council at least thirty days prior to the end of the fiscal year.  The budget shall be  adopted not later than the twenty‐seventh day of the last month of the fiscal year.  No budget will be adopted  or appropriations made unless the total estimated revenues, income and funds available shall be equal to or  in excess of such budget or appropriations, except otherwise provided.”      1. Proposed Budget – A proposed budget shall be prepared by the City Manager with participation of  all of the City’s Directors within the provision of the Charter and the 2030 Plan.    a. The budget shall include four basic segments for review and evaluation:     Revenue   Personnel Costs   Operations and Maintenance Costs   Capital and other non‐project Costs    b. The budget review process will include City Council participation in the development of each  segment and allow for resident participation in the process, and will allow for sufficient time to  address policy and fiscal issues by the City Council.    c. A copy of the proposed and approved budgets will be filed with the City Secretary when it is  submitted to the City Council and will be available on the City’s website.      2. Adoption – Upon finalization of the budget appropriations, the City Council will hold a public hearing,  and subsequently adopt by Ordinance the final budget as amended.  The budget will be effective for  the fiscal year beginning October 1st.      The Annual Budget document will be submitted annually to the Government Finance Officers  Association (GFOA) for evaluation and consideration for the Distinguished Budget Presentation  Award.    D. Balanced Budget – The goal of the City is to adopt and maintain a balanced operating budget using  sustainable funding sources that are expected to continue to be available in subsequent fiscal years.   Excess balances in operating funds from previous fiscal years shall remain in the fund in which they were  appropriated until either such excess balances are proposed and adopted pursuant to Section III. C.  Preparation of this policy; until they are used to reduce outstanding debt obligations of the City; or both.     The Charter (Section 6.04) requires that an operating deficit created in any fiscal year shall be paid off  and discharged during the following year.  In practice, deficit has been interpreted to mean City funds as  a whole.  The City Council may choose from time to time to allow individual funds to have a negative  balance as long as Operating Reserve requirements for the City as a whole are maintained.    E. Planning – The budget process will be coordinated so that major policy issues are identified prior to the  budget approval date.  This will allow City Council adequate time for consideration of appropriate  decisions and analysis of financial impacts.    Page 47 of 146 5   FY2018 Annual Budget  F. Reporting – Summary financial reports will be presented to the City Council quarterly.  These reports  will be in a format appropriate to enable the City Council to understand the overall budget and financial  status.       G. Control and Accountability – Each Director, appointed by the City Manager, will be responsible for the  administration of his/her departmental budget.  This includes accomplishing the Goals and Objectives  adopted as part of the budget and monitoring each department budget for compliance with spending  limitations.  Directors may transfer funds up to $20,000 within the operations and maintenance or  capital line items within a departmental budget category without additional approval.  All transfers from  or to the Personnel line items require approval of the Finance Director and City Manager. All other  transfers of appropriation or budget amendments require either City Council or City Manager approval  as outlined in Section III.H Budget Amendments and Section V.C.4 Use of Excess Salary Savings.    H. Budget Amendments – The Charter (Section 6.04) provides a method to amend for budget amendments  and emergency appropriations.  The City Council may authorize with a majority plus  one vote, an  emergency expenditure as an amendment to the original budget.  This may be done in cases of grave  public necessity to meet an unusual and unforeseen condition that was not known at the time the  budget was adopted.  In practice, this has been interpreted to include revenue‐related expenses within  the enterprise funds and timing differences on capital improvement projects.  The following criteria will  be used in evaluation of budget amendments:     Is the request necessary?   Why was the item not budgeted in the normal budget process?   Why can't a transfer be done within the Division to remedy the condition?    The Finance Director must certify availability of revenues or funding sources prior to adoption.     The City will amend the budget at year end, if needed, for revenue based expenditures that exceeded  budgeted amounts due to increased revenue and recognize any grant funded expenditures for  grants received after the budget was adopted or last amended.  The City will also amend the budget  if necessary for any capital project timing adjustments from prior year, as well as, any other known  adjustments needed and approved at that time.     I. Contingency Appropriations – The budget may include contingency appropriations within designated  operating department budgets.  These funds are used to offset expenditures for unexpected  maintenance or other unanticipated expenses that might occur during the year. Currently, the City  maintains contingency appropriations for insurance deductibles, unexpected legal expenses and  equipment repairs.    J. Use of Unanticipated and Unappropriated General Fund Balances – Within 90 days after fiscal year end,  staff will report the projected General Fund balance to Council.  In the event that unexpected,  unbudgeted amounts are determined to be available in the General Fund after year end, these funds  may be used for any of the following purposes, as approved by the City Council:  1. to fund capital projects;   2. to fund equipment purchases in lieu of issuing debt;  Page 48 of 146 6   FY2018 Annual Budget  3. to reduce outstanding City debt, including bonded indebtedness and unfunded pension liabilities;  4. to fund contingent liabilities such as the benefit payout reserve, cemetery trust fund, and similar  obligations of the City;   5. to take other steps to reduce property tax rates or mitigate any future increases;   6. to hold those funds in reserve for future commitments or contingencies that may be pending,  and/or;  7. to fund an Economic Uncertainty Reserve of annual General Fund operating expenditures according  to Section XVI, A, 2, b, Economic Uncertainty Reserve.    IV. REVENUE MANAGEMENT    A. Characteristics – The City will strive for the following optimum characteristics in its revenue system:    1. Simplicity – The City, where possible and without sacrificing accuracy, will strive to keep the revenue  system simple in order to reduce compliance costs for the taxpayer or service recipient.    2. Certainty – A knowledge and understanding of revenue sources increases the reliability of the  revenue system.  The City will understand its revenue sources and enact consistent collection policies  to provide assurances that the revenue base will materialize according to budget.    3. Equity – The City shall make every effort to maintain equity in its revenue system; i.e., the City should  seek to minimize or eliminate all forms of subsidization between entities, funds, services, utilities,  and customer classes, and ensure an on‐going return on investment for the City.    a. The City will make every effort to recognize the benefit that City tax payers contribute to City  programs and services.    b. The annual Parks and Recreation residential membership rates are established at 75% of non‐ residential rates plus or minus 10% at the discretion of the Parks and Recreation Director in  keeping with the targeted market cost recovery.     4. Revenue Adequacy – The City should require there be a balance in the revenue system; i.e., the  revenue base will have the characteristics of fairness and neutrality as it applies to cost of service,  willingness to pay, and ability to pay.    Overall Operational Cost Recovery for Parks and Recreation for the Recreation and Tennis Centers is  targeted to be between 50 – 60%, with some variance in individual programs.      5. Realistic and Conservative Estimates – Revenues will be estimated realistically, and conservatively,  taking into account the volatile nature of various revenue streams.    6. Administration – The benefits of a revenue source should exceed the cost of levying and collecting  that revenue.    Page 49 of 146 7   FY2018 Annual Budget  7. Diversification and Stability – A diversified revenue system with a stable source of income shall be  maintained.  This will help avoid instabilities in two particular revenue sources due to factors such as  fluctuations in the economy and variations in the weather.    B. Other Considerations – The following considerations and issues will guide the City in its revenue policies  concerning specific sources of funds:    1. Cost/Benefit of Incentives for Economic Development – The City will use due caution in the analysis  of any incentives that are used to encourage development.  A cost/benefit (fiscal impact) analysis  will be performed as part of the evaluation.    2. Non‐Recurring Revenues – One‐time or non‐recurring revenues should not be used to finance  current ongoing operations.      3. Sustainable Revenues – “Sustainable" means revenue that is consistently available year after year,  and includes revenues realized subsequent to adopted projections.     4. Property Tax Revenues – All real and business personal property located within the City will be valued  at 100% of the fair market value for any given year based on the current appraisal supplied by the  Williamson Central Appraisal District.     Conservative budgeted revenue estimates result in a projected ninety‐eight percent (98%) budgeted  collection rate for current ad valorem taxes.  Two percent (2%) of the current ad valorem taxes will  be projected as the budget for delinquent ad valorem tax collection.  For budgeting purposes, the  City will forecast the proposed property tax rate using the effective maintenance & operations  (M&O) rate plus the interest & sinking (I&S) rate needed to fund tax supported debt service.   Increases to the M&O rate will be deliberated and determined by the City Council.      5. Interest Income – Interest earned from investments will be distributed to the funds in accordance  with the equity balance of the fund from which the monies were provided to be invested.    6. User‐Based Fees and Service Charges – For services associated with a user fee or charge, the direct  or indirect costs of that service will be offset by a fee where possible.  The City will review fees and  charges no less than once every two years to ensure that fees provide adequate coverage for the  cost of services.  The City Council will determine how much of the cost of a service should be  recovered by fees and charges.    7. Enterprise Fund Rates – The City will review and adopt utility rates as needed to generate revenues  required to fully cover operating expenses, meet the legal requirements of all applicable bond  covenants, and provide for an adequate level of working capital.  Utility rates will be reviewed  annually as part of the budget process.   A rate study will be conducted every 3 years to review rate  methodology and ensure revenues will meet future needs.  All utility rates will be based on  standardized “cost of service” methodologies.     Water Rates will recognize at least 75% of the “fixed” cost of service, including debt  payments and ROI costs, within the monthly “base charge” determined by meter size.   “Volumetric charge” will recognize the balance of fixed costs not included in the base rate,  plus all variable costs associated with procuring and treating water.   .  Page 50 of 146 8   FY2018 Annual Budget   Wastewater Rates are “flat and equal” for all residential customers based on the cost of  providing services.  Commercial customer rates are varied depending on size and  specifications of each commercial customer.     Electric Rates include 100% of fixed costs within the base rate, with all variable costs included  in the kWh rate.      Stormwater Drainage Fees are based on a mathematical calculation using impervious cover  and applied in compliance with State Law.      A restricted Power Contract Credit Reserve has been established to provide financial assurances to  the City’s wholesale power contract providers as fiscal surety against any potential risk on the City’s  behalf and will be maintained as “restricted” fund balance on the City’s financial statements.    A Rate Stabilization Reserve (RSR) Account has been established in the Electric Fund to offset and  mitigate potential impacts to customer rates due to increased fuel costs or other external factors  that may negatively impact Electric Rates.  The Rate Stabilization Reserve (RSR) may provide funding  for:     Deferring or minimizing the rate impact of future cost increases   Costs associated with providing additional power supply   Filling contractual obligations   Balancing of annual power costs     RSR funds will be monitored monthly to ensure the electric rate is being managed per the Policy.   Increases to RSR are made through the Power Cost Adjustment rate as determined by the fund, at  the recommendation of the General Manager for Utilities.      8. Internal Cost Recovery Fees – Additionally, enterprise activity rates will include transfers to and  receive credits from other funds as follows:    a. General and Administrative Charges – Administrative costs should be charged to all funds for  services of general overhead, such as administration, finance, customer billing, legal and other  costs as appropriate.  These charges will be determined through an indirect cost allocation  following accepted practices and procedures and reviewed annually by the City’s external  auditors.    b. Payment for Return on Investment – The intent of this transfer is to provide a benefit to the  citizens for the ownership of the various utility operations they own.  For all utilities except for  Electric:     In‐Lieu‐of‐Franchise‐Fee.  This transfer, currently 3% of operating revenues generated inside  the City, is consistent with the franchise rates charged to investor owned utilities franchised  to operate within the City.       Return on Investment.   The return on investment (ROI) transfer for In‐City utility customers  is currently calculated at 7% of operating revenues for all utilities.  ROI for water and sewer  Page 51 of 146 9   FY2018 Annual Budget  customers outside the City is 10% of operating revenues. There is no ROI calculated on solid  waste revenues.    The Franchise and Return on Investment for the Electric Utility is derived from the base rate and  kWh sold.  The base rate revenue is multiplied by 7% for all customers. For customers inside the  City, a $0.0102 charge per kWh, equivalent to the 3% and 7% paid by other utility customers,  will be included in the cost per kWh.  For customers outside the City, a $0.007253 charge per  kWh, equivalent to the 7% ROI paid by utilities, will be included in the cost.     9. Intergovernmental Revenues – All potential grants will be examined for matching requirements and  must be approved by the City Council prior to making application of the grant.  It must be clearly  understood that operational requirements (on‐going costs) set up as a result of a grant program  could be discontinued once the term and conditions of the program have been completed.    10. Revenue Monitoring – Received revenues will be regularly compared to budgeted revenues and  variances will be investigated, and any abnormalities will be included in the quarterly report to the  City Council.      V. EXPENDITURE MANAGEMENT  A. Appropriations – The point of budget control is at the department level budget for all funds.  The Charter  (Section 6.03) provides that any transfer of appropriation between funds must be approved by the City  Council and that the City Manager, without City Council approval, is authorized to transfer appropriations  among departments, within the same operational division and fund.  The City Manager may also authorize  transfer of salary adjustment monies between funds that are budgeted in a citywide account.    B. Expenditure Monitoring – Expenditures and encumbrances will be regularly compared to budget, variances  will be investigated, and any abnormalities will be included in the quarterly report to the City Council.  Projected year‐end expenditures will be reported in the annual budget.    C. Personnel Costs – Costs related to salaries and benefits are budgeted at 100% total costs, assuming open  positions are filled throughout the fiscal year.  New positions that are added during the budget process may  have staggered hire dates with appropriate costs reflected in the budget.    1. Vacancy Factor – Funds with Personnel Budgets greater than $4 million will include a vacancy factor  of at least 1% of total fund salaries and related benefits (retirement, FICA, Medicare) to offset salary  savings within the budget.  The vacancy factor will be budgeted as a negative expense within the  fund.  This factor will be reduced throughout the year as vacant positions are recognized within the  department budget.    Compliance Status – General Fund and Joint Services Fund FY2018 in compliance.    2. Benefit Payout Reserve – The City will establish a benefit payout reserve equal to 15% of the accrued  benefit liability for employees in the General and Joint Services Funds who are currently eligible to  retire. Only terminating employee benefit expenses may be paid from this reserve. This reserve shall  be funded as an offset to the vacancy factor.       Compliance Status – Benefit payout reserve FY2018 in compliance.  Page 52 of 146 10   FY2018 Annual Budget    3. Position Control – The annual budget includes a set number of positions within departments when  approved and adopted by City Council.  Additional positions cannot be added without approval of  the City Council.  The City Manager may approve the transfer of authorized positions between  departments if funds are available within the department.    4. Use of Excess Salary Savings – Departmental savings generated due to open positions or other salary  line item savings cannot be spent by the department unless previously approved by the City Manager  and validated by Finance as “excess funds.”    D. Special Purpose Funding – In order to support community assistance programs, the City designates specific  funding for special purposes, including Social Services, Children’s Programs, and Public Art.  The City reserves  the ability to cap this special purpose funding when necessitated by budget contingency or compliance  issues, such as revenue shortfalls, or other reasons as determined by City Council.     1. Strategic Partnerships for Community Services – The City of Georgetown values partnerships with  organizations that are committed to addressing our communities’ greatest public challenges and has  identified key priorities in the following areas:     Public Safety   Transportation   Housing   Parks & Recreation   Veteran Services   Safety Net    The City has targeted funding for these programs to be $5.00 per capita, which may be adjusted to  offset the effects of general inflation based upon Consumer Price Index.  If previous funding levels  are higher than the targeted amount, and to avoid significant reductions in levels of funding, the City  Council shall seek to attain this target chiefly through population growth. These funds will be  allocated and paid according to the City Council’s guidelines for such programs.     Compliance Status – FY2018 in compliance.    2. Public Art Funding – The City will annually allocate funding for Public Art on a year to year basis  depending on the availability of funds in an amount to be determined at the discretion of the City  Manager.  Funding priority will be given to projects that include a matching donation, including  contributions from local organizations and sponsors. Any unspent funds will accumulate and be  reallocated in the following budget year.  Disbursement of these funds will be determined by the  City Council at the recommendation of the City’s Arts & Culture Advisory Board.      Every effort will be made to include public art funding in future City facilities whose primary purpose  is for public use.  These projects will include a reasonable allowance for public art that fits the scope  and purpose of the building so long that it does not negatively impact the project cost beyond the  original budget.  In the event there is cost savings in the construction of City Facilities, the City Council  may consider utilizing that savings on the purchase of public art for the facility.     Page 53 of 146 11   FY2018 Annual Budget  E. Purchasing – The City will maintain and regularly review a written Purchasing Policy.  All City purchases of  goods or services will be made in accordance with the City’s Charter, current Purchasing Policy and with  State law.      The following table shows a summary of requirements for purchases of goods and services.      Dollar Limits: Procurements: Requirements:  Under  $3,000  Under the small purchase  limit  No competitive bids and City credit  cards may be used.  $3,000  up to  $49,999  Within informal bid limit A minimum of three informal  competitive bids required unless  exempted; Historically Underutilized  Business (HUB) requirements apply in  accordance with state law.  $50,000  and above  In excess of the informal bid  limit  Formal solicitations, which includes  public notices, required unless  exempted.  Advisory board review and  recommendation may be  required.  Council approval required.      Common exemptions to the formal solicitation process include the procurement of professional services, the  purchase of goods or services from a sole source provider, and purchases for public health emergencies.    In addition to the above, all purchases must be approved according to preapproved limits within each  department as directed and approved by the City Manager.    F. Contracts and Change Orders – Contracts and related change orders must follow the City Purchasing Policies   and State Law.  In accordance with State Law, change orders are limited to 25% of the total contract amount.    Change orders greater than $50,000 require the same advisory board review and Council approvals as the   original contracts.    G. Prompt Payment – All invoices approved for payment by the proper City authorities shall be paid within thirty   (30) calendar days of receipt of goods or services or invoice date, whichever is later in accordance with State   law.  The City will take advantage of all purchase discounts, when possible.    H. Risk Management – The City will pursue every opportunity to provide for the Public’s and City employees’   safety and to manage its risks.  The goal shall be to minimize the risk of loss of resources through liability   claims with an emphasis on safety programs.    I. Retirement Benefits – Proposals to revise benefits administered and provided by the Texas Municipal   Retirement System shall include a written description, and, detailed and summary numerical assessments of   the changes that would result from the proposed benefit revision.      1. The numerical assessments shall include the following:    Page 54 of 146 12   FY2018 Annual Budget  a. The estimated change to the TMRS contribution rate that would result from the   proposed change in benefits, expressed as a percentage of employee pay and as an   annual dollar amount to the General Fund and to each City fund.    b. The estimated change to the City’s unfunded pension liability, expressed as a dollar   amount.    c. The estimated change to the City’s actuarial funding ratio.    2. The description and numerical assessments must be provided to the City Council at least 72  hours prior to consideration and approval, and must be read aloud to the Council prior to Council  consideration.    3. The estimated changes to the City’s contribution rate and the unfunded pension liability  presented pursuant to the section must be based on information provided by the TMRS actuary  or by a professional actuary authorized by the TMRS to provide such information.    4. Proposals to revise TMRS benefits must be voted on individually as part of the City Council’s  legislative agenda.    5. The City will amortize any unfunded actuarial liability (UAAL) over a period not to exceed the  amortization period used by the TMRS actuary. The City may amortize its UAAL more quickly by  making contributions to TMRS in excess of the rate specified by TMRS.     6. The City may elect to pay a higher contribution rate than required by the TMRS, to reduce the  City’s unfunded pension liability. Such payment will be approved and authorized by the City  Council as part of the City's annual budget process.    J. Retirement Cost‐of‐Living Adjustment    1. Within 60 days of when the TMRS annual funding update becomes available each year, staff will  review and prepare a summary of costs and options for potential cost‐of‐living adjustment (COLA)  for City of Georgetown retirees.  2. Consistent with state statutes governing the Texas Municipal Retirement System, the City may  provide an automatic COLA for members of the TMRS who are retired from the City of Georgetown  and receiving a monthly retirement benefit from the TMRS.   3. The City Council may adjust the COLA provided to city retirees based upon the funding level of the  City’s pension plan, as calculated by the TMRS, as follows:     Page 55 of 146 13   FY2018 Annual Budget    When the funding level of the City’s  pension plan is    The COLA  should be    Less than 70.0%    Zero  70.0% to 79.9%    0.3% of CPI  80.0% to 89.9%    0.5% of CPI  90.0% and greater    0.7% of CPI    4. Adjustments made pursuant to subsection b. should reflect the effect of the prospective change in  the COLA on the funding level of the City’s pension plan.  K. Deferred Compensation Benefits – In addition to the retirement benefit administered by the TMRS, the City   will sponsor a Deferred Compensation 457 plan, which is a supplementary individual retirement savings plan.    The City will encourage employee participation in this plan.    VI. STAFFING AND COMPENSATION    City Council and Management recognize the importance of attracting, hiring, developing, and retaining the best  people, and compensating them for the value they create.  Our outstanding and innovative City employees work  diligently to bring the Vision of Council to life and deliver exceptional services to our customers while  exemplifying our Core Values. The following programs are subject to available funding in the annual operating  budget.      A. Adequate Staffing – Staffing levels will be adequate for the fiscal functions of the City to operate effectively.   Workload allocation alternatives will be explored before adding additional staff.    B. Competitive Compensation – In order to maintain a competitive pay scale, the City has implemented a  Competitive Employee Compensation Maintenance Program to address competitive market factors and other  issues impacting compensation.   The program consists of:    1. Annual Pay Plan Review – To ensure the City’s pay system is accurate and competitive within the  market, the City will review its pay plans annually for any potential market adjustments necessary  to maintain the City’s competitive pay plans.    2. Pay for Performance – Each year the City will fund performance based pay adjustments for regular  non‐public safety personnel.  This merit‐based program aids in retaining quality employees by  rewarding their performance.  Pay for Performance adjustments are based on the employee’s most  recently completed performance evaluation.      3. Public Safety Steps – Each year the City will fund anniversary step increases for public safety sworn  personnel consistent with public safety pay scale design.  Page 56 of 146 14   FY2018 Annual Budget    C. Self‐Insurance Program – The City is committed to providing quality healthcare insurance that offers the most  flexibility in health benefits and options to its employees.  In order to provide the most cost effective solution,  the City has determined that establishing a self‐funded health insurance plan offers the greatest opportunity  to mitigate future cost increases while offering quality health care services to its employees.  The City has  established a mechanism to manage the accounts and payments associated with this program. Per GASB  Statement No. 66, such funding should be accounted for as an Internal Service Fund (ISF).    1. Employee Health Insurance ISF – This fund contains premium contributions from employees and  budgeted health insurance contributions included in the City’s annual budget process. To maintain  stable revenue to this fund, and to clearly set expenditure expectations for departments, any  budgeted appropriations for employee health insurance that are unused at the end of each fiscal  year will be transferred back to the self‐insurance fund.    2. Self‐Insurance Reserves – Annually through the budget process, staff and the City’s Health Benefit  Consultant firm will evaluate and recommend to Council the appropriate funding levels for both a  rate stabilization reserve as well as an incurred but not reported (IBNR) reserve.    Compliance Status – Both reserves FY2018 in compliance.    3. Employee Premiums – Annual premiums will be recommended to City Council through a  collaborative process between the City’s Employee Benefit Committee and external Health Benefits  consulting firm using historical data and other analytic analysis.    VII. FUND BALANCE POLICIES    The City’s Fund Balance is the accumulated difference between assets and liabilities within governmental funds,  and it allows the City to meet its contractual obligations, fund disaster or emergency costs, provide cash flow for  timing purposes and fund non‐recurring expenses appropriated by City Council.  This policy establishes limitations  on the purposes for which Fund Balances can be used in accordance with Governmental Accounting Standards  Board (GASB) Statement Number 54.     The City’s Fund Balance will report up to five components:    A. Non‐spendable Fund Balance – includes inherently non‐spendable assets that will never convert to cash, as  well as assets that will not convert to cash soon enough to affect the current financial period.  Assets included  in this category are prepaid items, inventory and non‐financial assets held for resale.  B. Restricted Fund Balance – represents the portion of fund balance that is subject to legal restrictions, such as  grants or hotel/motel tax and bond proceeds.  C. Committed Fund Balance – describes the portion of fund balance that is constrained by limitations that the  City Council has imposed upon itself, and remains binding unless the City Council removes the limitation.    D. Assigned Fund Balance – is that portion of fund balance that reflects the City’s intended use of the resource  and is established in a less formal method by the City for that designated purpose.   E. Unassigned Fund Balance – represents funds that cannot be properly classified in one of the other four  categories.       Page 57 of 146 15   FY2018 Annual Budget    VIII. LONG‐TERM LIABILITY RESERVES    The City of Georgetown recognizes certain long‐term unfunded commitments and contingencies that will require  substantial funding at some point in the future.  The City is committed to addressing these commitments in a  fiscally prudent method by acknowledging their future financial impacts and developing strategies and  designated reserve funds to mitigate those future impacts.    A. The Finance Director will maintain a list of unfunded liabilities. The list will be included in the quarterly financial  report to Council.    IX. BUDGET CONTINGENCY PLAN    This policy is designed to establish general guidelines for managing revenue shortfalls resulting from local and  national economic downturns that adversely affect the City's revenue streams.    A. Immediate Action – Once a budgetary shortfall is projected, the City Manager will take the necessary actions  to offset any revenue shortfall with a reduction in current expenses.  The City Manager may:     Freeze all new hire and vacant positions except those deemed to be a necessity.   Review all planned capital expenditures.   Delay all "non‐essential" spending or equipment replacement purchases.    The City Manager shall report in a timely manner to the City Council the projected shortfall and the  actions taken to resolve it.    B. Further Action – If the actions identified in subsection A are insufficient to offset the projected revenue deficit  for the current fiscal year, the City Council may approve the following actions, in the order listed:    1. Apply unspent, unobligated surplus funds from prior fiscal years to fund one‐time costs in the current  fiscal year budget.    2. Authorize the use of the General Fund Economic Uncertainty Reserve pursuant to Section XVI.A.2.b.  Economic Uncertainty Reserve.    3. Notwithstanding Section XVI.A.2.a. Base Level Reserve of this policy, authorize a reduction in the  unobligated fund balance in the General Fund, pursuant to Section XVI.A.2.a. Base Level Reserve of  this policy, from 90 to 75 days.     4. Direct other reductions in services, including workforce reductions.    C.  Replenish Fund Balance – As soon as practical, without placing undue strain on City services, the City Council  shall increase the unobligated fund balance in the General Fund, up to the 90‐day amount required in Section  XVI.A.2.a. Base Level Reserve of this policy and shall restore the General Fund Economic Uncertainty Reserve  as required in Section XVI.A.2.b of this policy.      Page 58 of 146 16   FY2018 Annual Budget  X. CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET    The City’s goal is to maintain City facilities and infrastructure in order to provide excellent services to the  customers within the community, meet growth related needs, and comply with all state and federal regulations.    A. Preparation – The City annually updates and adopts a five‐year Capital Improvement Program (CIP) schedule  as part of the operating budget adoption process. The plan is reviewed and adjusted annually as needed, and  year one is adopted as the current year capital budget.  The capital budget will include all capital projects,  capital resources, and estimated operational impacts.     Needed capital improvements are identified through system models, repair and maintenance  records and growth demands.     Economic development projects that have capital infrastructure needs must be reviewed and  approved for funding by the City no later than March 1 to be included in the annual CIP process.  Any  economic development project approved for funding after March 1 will be included in the following  year CIP process unless otherwise authorized by City Council.     A team approach will be used to prioritize CIP projects, whereby City staff from all operational areas  provide input and ideas relating to each project and its effect on operations.      Citizen involvement and participation will be solicited in formulating the capital budget through  neighborhood meetings, public hearings and other forums.     Capital infrastructure necessary to meet the requirements of the City’s Annexation Plan will be  identified separately within the CIP plan, so that funding alternatives can be developed if needed.    Prior to Council adoption, the following Advisory Boards will review the Capital Projects budget:    Georgetown Utility  Systems Advisory  Board   (GUS)  Georgetown  Transportation Advisory  Board (GTAB)  General Government and  Finance   Advisory  Board    (GGAF)      Parks Advisory  Board  Electric  Water  Wastewater  Streets  Stormwater Drainage  Airport  Facilities  Other General  Government Capital  Parks and  Recreation       B. Control – All capital project expenditures must be appropriated in the capital budget.   Availability of  resources must be identified and then reviewed by the Finance Division before any CIP contract is presented  to the City Council for approval.       Page 59 of 146 17   FY2018 Annual Budget    Prior to presentation to Council, the following Advisory Boards will review:    Georgetown Utility Systems   Advisory Board   (GUS)  Georgetown Transportation  Advisory Board   (GTAB)  General Government and  Finance   Advisory  Board (GGAF)  All utility contracts and  other  utility expenses  greater than $50,000  All Transportation,  Stormwater Drainage and  Airport expenditures and  contracts greater than  $50,000  All General Government  non‐routine contracts and  expenditures greater than  $50,000      C. Financing Programs – Where applicable, assessments, impact fees, pro rata charges, or other fees should be  used to fund capital projects which have a primary benefit to specific identifiable property owners.      Recognizing that long‐term debt is usually a more expensive financing method, alternative‐financing sources  will be explored before debt is issued.  When debt is issued, it will be used to acquire major assets with  expected lives equal or exceeding the average life of the debt issue.    Short‐term financing including Capital Leasing and other tax‐supported obligations can be used to fund  vehicles, computers and other operating equipment provided the impact to the tax rate is minimal.    Caution should be used in replacing assets with short‐term, tax‐supported obligations due to the repetitive  nature of the replacements.  The total amount of I & S (interest and sinking) portion of the tax rate dedicated  to fund short‐term debt for equipment replacement will not exceed $0.04.        XI. CAPITAL MAINTENANCE AND REPLACEMENT    The City recognizes that deferred maintenance increases future capital costs.  Therefore, a portion of all  individual funds with infrastructure should be budgeted each year to maintain the quality within each system.      A. Infrastructure Maintenance — On‐going maintenance and major repair costs are included as capital expense  within the departmental operating budgets.  These costs are generally considered system repairs and are  not capitalized for accounting purposes.  They include such items as park and recreation facility repairs, street  seal coat, water line repairs and other general system maintenance.    B. Modified Approach — Pavement Condition Index (PCI) — Governmental Accounting Standards Board  Statement # 34 provides for an alternative approach to depreciation for measuring the value of infrastructure  assets and the related costs incurred to maintain their service life at a locally established minimum standard.   The City has elected to implement this modified approach in maintaining its non‐enterprise fund  infrastructure assets. In order to adopt this alternative method, the City has implemented an asset  management system that determines if the minimum standards are being maintained.  This measurement  system will be updated at least every 3 years.  The City has elected to use this alternative method for  reporting its street infrastructure assets.    Page 60 of 146 18   FY2018 Annual Budget  The City uses the CarteGraph PavementView Pavement Management Information System to track the  condition levels of each of the street sections.  The condition of the pavement is based on the following factors:        Type of Distress   Amount of Distress   Severity of Distress   Deduct Values (function of first three)  The Pavement Condition Index (PCI) is a measurement scale is based upon a condition index ranging from  zero for a failed pavement to 100 for pavement with perfect condition.  The condition index is used to  classify pavement in the following conditions:                 The City’s administrative policy is to achieve an average PCI level of 85.  An 85 PCI is considered maintaining  the streets in a “good” condition.  Staff will prepare a street maintenance budget that meets this target for  Council’s consideration during the budget process. The PCI level as of 2014 was 87.30.    C. Internal Service Funds Capital Maintenance & Replacement – The City currently utilizes internal service funds  to maintain and replace existing assets.  Assessments are made to the using funds for the use of equipment  currently in use and to be purchased during the year.  In this way, suitable funds are available for the purchase  of operational assets without the issuance of debt.    1. Fleet Maintenance and Replacement – The City has a major investment in its fleet of cars, trucks,  tractors, and other equipment.  The City will anticipate replacing existing equipment, as necessary  and will establish charges that are assigned to the using departments to account for the cost of that  replacement.  Vehicle maintenance is also allocated in this manner.     2. Technology – It is the policy of the City to plan and fund the maintenance and replacement of its  computer network and other technology systems. A reserve will be established within the ISF for  replacement of major systems and will be funded over time through excess revenues within the  Fund.  While cash funding is preferred, major IT systems and projects may require debt that is  amortized over a shorter useful life appropriate for the software or hardware.     Compliance Status – IT replacement reserve FY2018 in compliance.    3. Facilities Maintenance – The City has established an on‐going maintenance program, which includes  major repairs, equipment, as well as contracts for maintaining City facilities. The City has anticipated  a useful life of such equipment and established a means of charging those costs to the various  departments in order to recognize the City’s continuing costs of maintaining its facilities.   Determination for facility repairs is based on useful life of the various elements of each facility.  A  proportional cost for each element is expensed within the budget for capital replacement.  An  additional unscheduled repair reserve equal to 10% value of annual internal service funding is also  budgeted.    PCI Rating  100  –  85 Good  85  –  45 Fair  45  –  0 Poor  Page 61 of 146 19   FY2018 Annual Budget    Compliance Status – Facilities repair reserve FY2018 in compliance.    D. Departmental Capital Maintenance & Replacement – The City also utilizes department capital maintenance  and replacement schedules for specialized assets and equipment necessary to provide services.     1. Parks and Recreation – As part of the City’s on‐going maintenance program, the City also  recognizes the need to regularly maintain and replace grounds, equipment and facilities that are  part of  the City’s Parks and Recreation system.  Separate replacement and maintenance schedules  will be maintained for these items including, but not limited to, playground equipment, buildings,  sport courts, trees and grounds, and restroom facilities.  The City’s goal is to provide level on‐going  funding to ensure safe, well‐maintained facilities for its citizens.    2. Public Safety Equipment – As part of the City’s on‐going maintenance program, the City also  recognizes the need to regularly maintain and replace specialized equipment in Police and Fire.   Separate replacement and maintenance schedules will be maintained for these items including but  not limited to for Fire:   SCBA’s and other firefighting equipment and protective gear; and for Police:  bullet proof vests, armaments and other tactical equipment.  The City’s goal is to provide level on‐ going funding to ensure proper protection for employees and citizens.      E. Surplus Property    1. From time to time it is necessary to dispose of certain vehicles or equipment that have been procured  with City funds and used in City services.  Individual surplus property items with expected sales value  in excess of $50,000 must be approved by the City Council prior to disposition.      2. City staff will maintain reports and records of all surplus property dispositions in accordance with  good internal controls.        XII. ACCOUNTING, AUDITING AND FINANCIAL REPORTING    A. Accounting – The City is solely responsible for the recording and reporting of its financial affairs, both  internally and externally.  The Finance Director is responsible for establishing the structure for the City’s  Chart of Accounts and for assuring that procedures are in place to properly record financial transactions and  report the City’s financial position.    B. General Government and Finance Advisory Board (GGAF) – The City may establish a subcommittee consisting  of at least 2 City Council members and not more than 3 citizens that may meet monthly to provide additional  oversight to the City’s Finance operations.  This subcommittee will also review general government items  that are not reviewed by another City advisory board before being presented to City Council. The City’s  Finance Director will be the liaison for this subcommittee.    C. Audit of Accounts – In accordance with the Charter, an independent audit of the City accounts will be  performed every year.  The auditor is retained by and is accountable directly to the City Council.  The auditing  firm will serve for up to 5 years, at which time, the City will re‐bid these services and changing firms if deemed  necessary by GGAF and City Council.    Page 62 of 146 20   FY2018 Annual Budget  D. External Reporting – Upon completion and acceptance of the annual audit by the City’s auditors, the City  shall prepare a written Comprehensive Annual Financial Report (CAFR) which shall be presented to the City  Council within 180 calendar days of the City’s fiscal year end.  The CAFR shall be prepared in accordance with  Generally Accepted Accounting Principles (GAAP) and shall be presented annually to the Government  Finance Officer Association (GFOA) for evaluation and consideration for the Certificate of Achievement in  Financial Reporting.      E. Internal Reporting – The Finance Department will prepare internal financial reports, sufficient to plan,  monitor and control the City’s financial affairs.    XIII. ASSET MANAGEMENT    A. Cash Management and Investments – The City Council has formally approved a separate Investment Policy  for the City of Georgetown that meets the requirements of the Public Funds Investment Act (PFIA), Section  2256 of the Texas Local Government Code.  This policy is reviewed annually by the City Council and applies  to all financial assets held by the City and applies to all entities (component units) included in the City’s  Comprehensive Annual Financial Report (CAFR) and/or managed by the City.    1. Statement of Cash Management Philosophy – The City shall maintain a comprehensive cash  management program to include the effective collection of all accounts receivable, the prompt  deposit of receipts to the City’s depository, the payment of obligations, and the prudent investment  of idle funds in accordance with this policy.    2. Objectives – The City’s investment program will be conducted as to accomplish the following listed  in priority order:     Safety of the principal invested   Liquidity and availability of cash to pay obligations when due   Ensure public trust through responsible actions as custodians of public funds   Maximize earnings (yield) to the greatest extent possible consistent with the City’s investment  policy.  3. Safekeeping and Custody – Investments may only be purchased through brokers/dealers who meet  the criteria detailed in the investment policy, which also addresses internal controls related to  investments.    4. Standard of Care and Reporting – Investment will be made with judgment and care, always  considering the safety of principal to be invested and the probable income to be derived.  The  Finance Director is responsible for the overall management of the City’s investment program and  ensures all investments are made in compliance with the investment policy.  An investment report,  providing both summary and detailed information, will be presented to the City Council quarterly.     5. Authorized Investments – The City can currently invest in the following:     Certificates of Deposit   U.S. Treasury and Agency securities   Investment Pools that meet the requirements of the PFIA  Page 63 of 146 21   FY2018 Annual Budget   No‐load Money Market Mutual Funds   Fully collateralized  Repurchase Agreements   Obligations of Municipal Issuers in Texas rated not less than A or its equivalent   Other investments as approved by City Council and not prohibited by law.    B. Fixed Assets – These assets will be reasonably safeguarded and properly accounted for, and prudently  insured.     1. Capitalization Criteria – For purposes of budgeting and accounting classification, the following  criteria must be met in order to be capitalized:     The asset owned by the City   The expected useful life of the asset must be longer than one year, or extend the life of an  identifiable existing asset by more than one year   The original cost of the asset must be at least $5,000   The asset must be tangible   On‐going repairs and general maintenance are not capitalized.    2. New Purchases – All costs associated with bringing the asset into working order will be capitalized  as part of the asset cost. This will include startup costs, engineering or consultant type fees as part  of the asset cost once the decision or commitment to purchase the asset is made.  The cost of land  acquired should include all related costs associated with its purchase.    3. Improvements and Replacement – Improvements will be capitalized when they extend the original  life of an asset or when they make the asset more valuable than it was originally.  The replacement  of assets components will normally be expensed unless they are a significant nature and meet all the  capitalization criteria.    4. Contributed Capital – Infrastructure assets received from developers or as a result of annexation will  be recorded as equity contributions when they are received.    5. Distributions Systems – All costs associated with public domain assets, such as streets and utility  distribution lines will be capitalized in accordance with the capitalization policy.  Costs should include  engineering, construction and other related costs including right of way acquisition.    6. Reporting and Inventory – The Finance Division will maintain the permanent records of the City’s  fixed assets, including description, cost, department of responsibility, date of acquisition,  depreciation and expected useful life.  Periodically, random sampling at the department level will be  performed to inventory fixed assets assigned to that department.  Responsibility for safeguarding  the City’s fixed assets lies with the department supervisor or manager whose department has been  assigned the asset.     Page 64 of 146 22   FY2018 Annual Budget    XIV. DEBT MANAGEMENT    The City of Georgetown recognizes the primary purpose of capital facilities is to provide services to the  community.  Using debt financing to meet the capital needs of the community must be evaluated according to  efficiency and equity.  Efficiency must be evaluated to determine the highest rate of return for a given investment  of resources.  Equity is resolved by determining who should pay for the cost of capital improvements.  In meeting  demand for additional services, the City will strive to balance the needs between debt financing and “pay as you  go” methods.  The City realizes that failure to meet the demands of growth may inhibit its continued economic  viability, but also realizes that too much debt may have detrimental effects on the City’s long‐range financial  condition.    The City will issue debt only for the purpose of acquiring or constructing capital assets for the general benefit of  its citizens and to allow it to fulfill its various purposes as a city.     A Debt Condition Update report will be provided annually.    A. Usage of Debt – Long‐term debt financing will be considered for non‐continuous capital improvements of  which future citizens will be benefited.  Alternatives for financing will be explored prior to debt issuance and  include, but not limited to:     Grants   Use of Reserve Funds   Use of Current Revenues   Contributions from developers and others   Leases   Impact Fees    When the City utilizes long‐term financing, it will ensure that the debt is soundly financed by  conservatively projecting revenue sources that will be used to pay the debt.  It will not finance the  improvement over a period greater than the useful life of the improvement and it will determine that  the cost benefit of the improvement, including interest costs, is positive to the community.    The City may utilize the benefits of short‐term debt financing to purchase operating equipment provided  the debt doesn’t extend past the useful life of the asset and the potential impact to the tax rate is within  policy guidelines.  The I & S (interest and sinking) portion of the tax rate cannot exceed $0.04 for short‐ term debt (3‐10 years).    B. Types of Debt     1. General Obligation Bonds (GO’s) – General obligation bonds must be authorized by a vote of the  citizens of Georgetown.  They are used only to fund capital assets of the general government and  are not to be used to fund operating needs of the City.  The City’s ad valorem taxing authority backs  general obligation bonds.  Conditions for issuance of general obligation debt include:     When the project will have a significant impact on the tax rate;     When the project may be controversial even though it is routine in nature; or  Page 65 of 146 23   FY2018 Annual Budget     When the project falls outside the normal bounds of projects the City has typically done.    For debt programs that include multiple projects that will be issued over multiple years at the  discretion of the City Council, the City may approve a Contract with the Voters to manage future  property tax rate impacts. The Contract with the Voters will be included in educational information  for all applicable GO Bond elections, and will include a maximum annual tax rate increase and a  cumulative total per bond authorization maximum tax rate increase. The City will include these  impacts in its annual Debt Condition report.    The City Council will carefully manage the unissued GO Bond authorization through annual review of  related projects to ensure full disclosure on future timing of projects included in the bond package.   Timing of authorized projects and related bond issuance will be included in the Annual Budget and  published on the City’s website.  Any changes to this schedule require specific Council authorization.      2. Revenue Bonds – Revenue bonds will be issued to provide for the capital needs of any activities  where the capital requirements are necessary for the continuation or expansion of a service.  The  improved activity shall produce a revenue stream to fund the debt service requirements of the  necessary improvement to provide service expansion.  The average life of the obligation should not  exceed the useful life of the asset(s) to be funded by the bond issue, and will generally be limited to  no more than twenty (20) years. An exception can be made for plant expansions or related system  expansions whose useful life is in excess of 30 years. A cost benefit analysis will be done to fully  disclose the impacts of extending debt beyond 20 years.    3. Certificates of Obligation, Contract Obligations (CO’s) – Certificates of obligation or contract  obligations may be used to fund capital requirements that are not otherwise funded by general  obligation or revenue bonds.  Debt service for CO’s may be either from general revenues (tax‐ supported) or supported by a specific revenue stream(s) or a combination of both.  Typically, the City  may issue CO’s when the following conditions are met:     When the proposed debt will have minimal impact on future effective property tax rates;     When the projects to be funded are within the normal bounds of City capital requirements, such  as for roads, parks, various infrastructure and City facilities and equipment; and     When the average life of the obligation does not exceed the useful life of the asset(s) to be  funded by the issue.    Certificates of obligation will be the least preferred method of financing and will be used with  prudent care and judgment by the City Council.  Every effort will be made to ensure public  participation in decisions relating to debt financing.    4. Self‐supporting General Obligation Debt – Refers to certificates of obligation issued for a specific  purpose and repaid through dedicated revenues other than ad valorem taxes.  The annual debt  requirements are not included in the property tax calculation.  Both the Airport and Stormwater  Drainage funds will issue this type of debt. In addition, the Electric and Water Services Funds can  utilize this method of funding non‐system capital assets. The City also issues debt on behalf of the  Georgetown Transportation Enhancement Corporation (GTEC) and the Georgetown Economic  Page 66 of 146 24   FY2018 Annual Budget  Development Corporation (GEDCO) whom then pledge 4A and 4B sales tax revenue for the  repayment of that debt.     5. Internal borrowing between City Funds – The City can authorize use of existing long‐term reserves  as “loans” between funds.  The borrowing fund will repay the loan at a rate consistent with current  market conditions.  The loan will be repaid within ten (10) years.  The loan will be considered an  investment of working capital reserves by the lending fund.    6. Other Short‐term Borrowing – The City may authorize the issuance of Public Property Finance  Contractual Obligations (PPFCO) which is short‐term obligations for the acquisition of personal public  property, such as equipment. PPFCOs are payable from either ad valorem taxes or another dedicated  revenue stream.  Each issuance will be assessed to ensure cost effectiveness and the repayment  schedule will not exceed the useful life of the asset.  Multiple equipment acquisitions can be grouped  in a single PPFCO issue in order to develop economies of scale.      C. Method of Sale – The City will use a competitive bidding process in the sale of bonds unless conditions in the  bond market or the nature of the issue warrant a negotiated bid.  In such situations, the City will publicly  present the reasons for the negotiated sale.  The City will rely on the recommendation of the financial advisor  in the selection of the underwriter or direct purchaser.  The financial advisor must meet all licensing  requirements and comply with all Municipal Securities Rulemaking Board (MSRB) regulations.  The City’s  financial advisor will not act as the underwriter on any City bond issue.     D. Disclosure – Full disclosure of operating costs along with capital costs will be made to the bond rating  agencies and other users of financial information.  The City staff, with assistance of the financial advisor and  bond counsel, will prepare the necessary materials for presentation to the rating agencies and will aid in the  production of the Preliminary Official Statements.  The City will take responsibility for the accuracy of all  financial information released.    E. Federal Requirements – The City will maintain written procedures to follow post issuance compliance rules,  arbitrage rebate and other Federal requirements.     Post issuance tax compliance rules will include records retention, arbitrage rebate, use of  proceeds, and     Continuing disclosure requirements under SEC Rule 15c2‐12, MSRB standards, or as may be  required by bond covenants or related agreements.     F. Debt Structuring – The City will issue bonds with an average life of twenty (20) years or less, not to exceed  the useful life of the asset acquired.  The structure should approximate level debt service unless operational  matters dictate otherwise. Market factors, such as the effects of tax‐exempt designations, the cost of early  redemption options and the like, will be given consideration during the structuring of long term debt  instruments.  Exceptions to the 20 year average life include debt issues for major system expansions, such as  water, sewer or electric plants, in which case the City may issue debt greater than 20 years since the average  life of the asset exceeds 30 years.  A cost benefit analysis indicating the impacts of extending debt beyond  20 years will be completed.    G. Debt Coverage Ratio – Refers to the number of times the current combined debt service requirements or  payments would be covered by the current operating revenues net of on‐going operating expenses of the  City’s combined utilities (Electric, Water, and Wastewater). The City will maintain a minimum debt service  Page 67 of 146 25   FY2018 Annual Budget  coverage ratio of 1.5 times for these utilities as a whole. The bond ordinances allow the City to forego a debt  reserve fund for its utility debt if the coverage is maintained at 1.35 times or better. A coverage ratio of 1.5  times will also be required for all funds issuing self‐supporting debt.     Compliance Status – Debt coverage ratio FY2018 in compliance.    H.  Bond Reimbursement Resolutions – The City may utilize bond reimbursements as a tool to manage its debt  issues, due to arbitrage requirements and project timing.   In so doing, the City uses its capital reserve "cash"  to delay bond issues until such time when issuance is favorable and beneficial to the City.    The City Council may authorize a bond reimbursement resolution for General Capital projects that have a  direct impact on the City's ad valorem tax rate when the bonds will be issued within the term of the existing  City Council.  In the event of unexpected circumstances that delay the timing of projects, or market  conditions that prohibit financially sound debt issuance, the approved project can be postponed and  considered by a future council until circumstantial issues can be resolved.    The City Council may also authorize revenue bond reimbursements for approved utility and other self‐ supporting capital projects within legislative limits.  Currently revenue bonds must be issued within 18  months after an eligible bond funded project is begun.    The total outstanding bond reimbursements may not exceed the total amount of the City’s reserve funds.    XV. OTHER FUNDING ALTERNATIVES    When at all possible, the City will research alternative funding opportunities prior to issuing debt or  increasing user‐related fees.      A. Grants – All potential grants will be examined for any matching requirements and the source of those  requirements identified. A grant funding worksheet, reviewed by Finance, that clearly identifies funding  sources, outcomes and other relevant information will be presented and approved by the City Council prior  to any grant application being submitted.  It must be clearly understood that any resulting operation  requirements of the grant could be discontinued once the term and conditions of the project have been  terminated.   The City Council must authorize acceptance of any grant funding.    B. Use of Reserve Funds – The City may authorize the use of reserve funds to potentially delay or eliminate a  proposed bond issue.  This may occur due to higher than anticipated fund balances in prior years, thus  eliminating or reducing the need for debt proceeds, or postpone a bond issue until market conditions are  more beneficial or timing of the related capital improvements does not correspond with the planned bond  issue.  Reserve funds used in this manner are replenished upon issuance of the proposed debt.    C. Developer Contributions – The City will require developers who negatively impact the City's utility capital  plans offset those impacts.  These policies are further defined within the City's utility line extension policy  and other development regulations.    D. Leases – The City may authorize the use of lease financing for certain operating equipment when it is  determined that the cost benefit of such an arrangement is advantageous to the City.    Page 68 of 146 26   FY2018 Annual Budget  E. Impact Fees – The City will impose impact fees as allowable under state law for both water and wastewater  services.  These fees will be calculated in accordance with statute and reviewed at least every three years.   All fees collected will fund projects identified within the Fee study and as required by state laws.     XVI. FINANCIAL CONDITIONS, RESERVES, AND STABILITY RATIOS     The City of Georgetown will maintain budgeted minimum reserves in the ending working capital/fund balances  to provide a secure, healthy financial base for the City in the event of a natural disaster or other emergency,  allow stability of City operations should revenues fall short of budgeted projections and provide available  resources to implement budgeted expenditures without regard to actual timing of cash flows into the City.    A. Operational Coverage – The City’s goal is to maintain operations coverage of 1.0 (one), such that operating  revenues will at least equal or exceed current operating expenditures. Deferrals, short‐term loans, or one‐ time sources will be avoided as budget balancing techniques. Reserves will be used only for emergencies or  non‐recurring expenditures, except when balances can be reduced because their levels exceed guideline  minimums as stated below.    1. Operating Reserves – The City will maintain reserves at a minimum of seventy‐five (75) days (20.83%)  of net budgeted operating expenditures.  Net budgeted operating expenditure is defined as total  budgeted expenditures less interfund transfers and charges, general debt service (tax supported),  direct cost for purchased power and payments from third party grant monies.  The amount of these  funds are allocated within the following operating funds and using the following guidelines to  maintain the fund balance, working capital and retained earnings (reserves) of the various operating  funds at levels sufficient to protect the City’s creditworthiness, as well as, its financial position from  unforeseeable emergencies.    Compliance Status – Total reserves FY2018 in compliance.    2. General Fund – The fund balance reserve in the General Fund should equal ninety (90) days or 25%  of annual budgeted General Fund operating expenditures.  Reserves are allocated as follows:    a. Base Level Reserve – will equal ninety (90) days of current year budgeted operating expenditures  which will be designated for emergency use only. If the Base Level Reserve is used during the  fiscal year, the balance must return to the ninety (90) day requirement within the following fiscal  year’s adopted budget.    Compliance Status – General Fund Reserve FY2018 in compliance.    b. Economic Uncertainty Reserve – will equal up to 6% of current year budgeted operating  expenditures. The reserve will be designated to temporarily offset a decline in any General Fund  revenue source during the current fiscal year or in planning the future budget year. The reserve  may be used when growth in any General Fund revenue source from one fiscal year to the next  is below zero. The reserve will be available to support only existing programs approved in a prior  fiscal year. Used funds shall be restored up to the 6% reserve as soon as practical.    Compliance Status – General Fund Reserve FY2018 at 2%.    3. Tourism Fund – A minimum sixty days (60) or 16.67% of operating expenditures will be reserved  within the fund balance.  These funds are designated to be used to offset any potential revenue  Page 69 of 146 27   FY2018 Annual Budget  shortfall that occurs during the fiscal year and should be replenished in the following fiscal year’s  budget.    Compliance Status – Tourism Fund Reserve FY2018 in compliance.    4. Water Services Fund – Working capital reserves should be 25% or ninety (90) days of operating  expenses, net debt service and long‐term water contract costs.  These reserves are designated to be  used to offset potential revenue shortfalls or fund unexpected or emergency expenses that occur  during the fiscal year.  These reserves should be replenished in the following budget cycle.    Compliance Status – Water Fund Reserve FY2018 in compliance.      5. Stormwater Drainage Fund – $250,000 for unforeseen emergencies or other potential revenue  shortfalls.    Compliance Status – Stormwater Fund Reserve FY2018 in compliance.    6. Electric Fund – The remaining balance to meet the citywide requirement of seventy‐five (75) days of  reserve funds will be maintained within this fund.  It can be used for unforeseen emergencies and  expenditures.  The Rate Stabilization Account and the Power Contract Credit Reserve are not  included in this Contingency Reserve.    Compliance Status – Electric Fund Reserve FY2018 in compliance.    7. Airport Fund – A contingency reserve of 75 days of operating expenses will be maintained in the  fund. The 75 day reserve will represent all operating expenses minus fuel costs and any transfers.     Compliance Status – Airport Fund Reserve FY2018 in compliance.      For all other non‐enterprise funds, the fund balance is an indication of the balance of each particular fund at  a specific time.  The ultimate goal of each such fund is to have expended the fund balance at the conclusion  of the activity for which the fund was established.    Reserve requirements will be calculated as part of the annual budget process and any additional required  funds to be added to the reserve balances will be appropriated within the budget.      Funds in excess of the minimum reserves within each fund may be expended for City purposes at the will of  the City Council once it has been determined that use of the excess will not endanger reserve requirements  in future years.  This action requires an amendment to the City’s Annual Budget and is outlined in Section III.  J. Use of Unanticipated and Unappropriated General Fund Balances.    B. Liabilities and Receivables – Procedures will be followed to maximize discounts and reduce penalties offered  by creditors.  Current liabilities will be paid within 30 days of receiving the invoice.  Accounts Receivable  procedures will target collection for a maximum of 30 days of service.   The Finance Director is authorized to  write‐off non‐collectible, non‐utility accounts that are delinquent for more than 180 days, and utility  accounts delinquent more than 180 days, provided proper delinquency procedures have been followed, and  include this information in the annual report to the City Council.  Page 70 of 146 28   FY2018 Annual Budget    C. Capital Project Funds – Every effort will be made for all monies within the Capital Project Funds to be  expended in a timely manner preferably within thirty‐six (36) months of receipt.  The fund balance will be  invested and income generated will offset increases in construction costs or other costs associated with the  project.  Capital project funds are intended to be expended totally, with any unexpected excess to be  transferred to the Debt Service fund to service project‐related debt service.    D. General Debt Service Funds – Revenues within this fund are stable, based on property tax revenues. Balances  are maintained to meet contingencies and to make certain that the next year’s debt service payments may  be met in a timely manner. Fund balance should not fall below 45 days annual debt service requirements, in  accordance with IRS guidelines.    Compliance Status – Debt Fund Reserve FY2018 in compliance.    E. Investment of Reserve Funds – The reserve funds will be invested in accordance with the City’s investment  policy.  Existing non‐cash investment would be exempt through retirement of the investment.     F. Ratios/Trend Analysis – Ratios and significant balances will be incorporated into both the mid‐year and annual  reports to the City Council.  This information will provide users with meaningful data to identify major trends  of the City's financial condition through analytical procedures.  The following ratios/balances will be used as  key financial indicators:     Fund Balance/Equity:    Assets ‐ liabilities  FB/E AL (Acceptable level) minimum reserve requirement     Working Capital:   Current assets less current liabilities  CA ‐ CL    AL minimum reserve requirement     Current Ratio:    Current assets divided by current liabilities  CA/CL    AL > 1.00     Quick Ratio: "Liquid" current assets divided by current liabilities   Liquid CA/CL   AL > 1.00     Debt/Assessed AV Taxes :  Debt divided by assessed Ad Valorem value  D/AV    AL < 5     Debt Ratio: Current liabilities plus long‐term liabilities divided by total  assets   CL +LTL/TA    AL < 1     Enterprise Operating Coverage:  Operating revenue divided by operating expense   OR/OE    AL > 1.25     Times Coverage Ratio: Operating revenue less operating expense divided by  annual debt service   (OR‐OE)/DSV    AL > 1.5    Page 71 of 146 29   FY2018 Annual Budget  The City will develop minimum/maximum levels for the above ratios/balances through analyzing of City  historical trends and future projections.  These ratios will also be compared to other similar or regional  municipalities for further analysis.        XVII. INTERNAL CONTROLS    A. Written Procedures – Wherever possible, written procedures will be established and maintained by the  Finance Director for all functions involving cash handling and/or accounting throughout the City.  These  procedures will embrace the general concepts of fiscal responsibility set forth in this policy statement.    B. Internal Audit Program – An internal audit program will be maintained by the Finance Director to ensure  compliance with City policies and procedures and to prevent the potential for fraud.      1. Departmental Audits – departmental processes will be reviewed to ensure dual control of City assets  and identify the opportunity for fraud potential, as well as, to ensure that departmental internal  procedures are documented and updated as needed.    2. Employees or Transaction Review – Programs to be audited include Petty Cash, City Credit Card  accounts, time entry, and travel.  All discrepancies will be identified, and the employee’s Director  will be notified.   The City Manager will also be notified depending on the seriousness of the  infraction.    3. The Finance Director and City Manager will present an annual audit plan to the General Government  and Finance board. Results of all internal audits will be provided to the GGAF and City Council at  year‐end.     C. Directors Responsibility – Each Director is responsible for ensuring that good internal controls are followed  throughout their department, that all Finance Division directives are implemented and that all independent  auditor internal control recommendations are addressed.  Departments will develop and periodically update  written internal control procedures.      Page 72 of 146 Georgetown City Council Workshop June 26, 2018 Georgetown Water, Wastewater and Reuse Rate Study Update Page 73 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Agenda •Key Issues •Fund Performance Under Current and Proposed Rates •Draft Rate Adjustments •Discussion and Next Steps 2 Page 74 of 146 Current Fund Performance Page 75 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Key Issues •Descending Financial Performance –Rates will not keep up with costs without adjustments •Wholesale Supplier Cost Increases •Rapid Growth, Capital Projects and New Debt Service –$195M in Capital Project needs between FY 2019 and FY 2023 4 Page 76 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CIP Funding Forecast Water & Wastewater Combined 5 $195M funded*: 46.7% Cash & Impact Fees 53.3% Debt *Avg funding % over 5 years 2019 2020 2021 2022 2023 Debt $36.35 $26.39 $29.99 $13.26 $42.03 Impact Fees $14.25 $13.55 $16.54 $15.82 $16.36 Cash $1.935 $0.070 $0.46 $0.47 $0.31 Total CIP $52.53 $40.02 $47.00 $29.55 $58.70 $52.53 $40.02 $47.00 $29.55 $58.70 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Co s t ( M i l l i o n $ ) CIP Funding Page 77 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Combined Revenue Performance – Current Rates 6 $35 $40 $45 $50 $55 $60 2019 2020 2021 2022 2023 Co s t ( M i l l i o n $ ) Fiscal Year Over/Under Recovery ($)Revenues Under Current Rates Revenue Requirement Page 78 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Combined Revenue Performance – Proposed Rates 7 $35 $40 $45 $50 $55 $60 $65 2019 2020 2021 2022 2023 Co s t ( M i l l i o n $ ) Fiscal Year Combined Utility Revenue Performance Under Proposed Rates Over/Under Recovery ($)Revenues Under Proposed Rates Revenue Requirement Page 79 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Combined Fund Performance (Ending Balance) – Current Rates 8 2019 2020 2021 2022 2023 Available Fund Balance $24.66 $20.19 $9.08 $1.81 $(5.52) Contingency $6.00 $6.00 $6.00 $6.00 $- 90 Day Reserve Target $8.18 $8.47 $8.76 $8.99 $9.33 $(10.00) $(5.00) $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 Ba l a n c e ( M i l l i o n s $ ) Page 80 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Combined Fund Performance (Ending Balance) – Proposed Rates 9 2019 2020 2021 2022 2023 Available Fund Balance $23.68 $18.37 $14.38 $11.46 $11.30 Contingency $6.00 $6.00 $6.00 $6.00 $6.00 Reserve Target (90 days)$8.19 $8.48 $8.80 $9.05 $9.42 $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 Ba l a n c e ( M i l l i o n s $ ) Fund Performance Under Proposed Rates Page 81 of 146 Overview of Recommendations Page 82 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Revenue and Rate-Setting Objectives 1.Revenue sufficiency 2.Minimize rate shock to customers by phasing in rates and utilizing combined fund performance 3.Potential rate design alternatives 11 Page 83 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Proposed Rate Increases •Water –Rate increases adjust both minimum and volumetric rates across all customer classes by the % above –Proposed Rate Design changes effective FY 2019 yields an estimated 17% increase in rate revenues •Irrigation Block •Base Rate multipliers •Possibly offset with behavior changes •Wastewater –Rate increases adjust both minimum and volumetric rates across all customer classes by the % above 12 2019 2020 2021 2022 2023 Water --13.00%-15.38% Wastewater 4.40%-12.50%-16.67% Page 84 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Proposed Fixed Rate Design Meter Equivalencies 13 Meter Size Current Proposed Charge Turbine Factors 5/8”$15.50 $15.50 0.674 3/4”$23.00 $23.00 1.000 1”$38.50 $38.50 1.674 1 ½”$76.50 $76.50 3.326 2”$122.50 $153.34 6.667 3”$245.50 $368.00 16.000 4”$383.50 $644.00 28.000 6”$766.50 $1,410.00 61.304 8”$1226.50 $2,450.00 106.522 *Residential Volumetric Rates remain unchanged* Page 85 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Proposed Volumetric Rate Design Commercial (less than 3”) 14 Small Commercial (<2” Meter)Current Proposed (FY 2019) 0 –300,000 gallons $2.40 $2.40 300,001 + gallons $2.40 $6.50 Large Commercial (2” Meter)Current Proposed (FY 2019) 0 –600,000 gallons $2.40 $2.40 600,001 + gallons $2.40 $6.50 Large Commercial (3” Meter)Current Proposed (FY 2019) 0 –900,000 gallons $2.40 $2.40 900,001 + gallons $2.40 $6.50 Page 86 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Proposed Volumetric Rate Design Commercial (4”, 6”, 8”) 15 Commercial (4” Meter)Current Proposed (FY 2019) 0 –4,000,000 gallons $2.40 $2.40 4,000,001 + gallons $2.40 $6.50 Commercial (6” Meter)Current Proposed (FY 2019) 0 –6,000,000 gallons $2.40 $2.40 6,000,001 + gallons $2.40 $6.50 **Potential Industrial class for one customer Commercial (8” Meter)Current Proposed (FY 2019) 0 –8,000,000 gallons $2.40 $2.40 8,000,001 + gallons $2.40 $6.50 Industrial**Current Proposed (FY 2019) 0+ gallons $2.40 $2.40 Page 87 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Proposed Volumetric Rate Design Commercial Irrigation Meters 16 Commercial Irrigation Current Proposed (FY 2019) 0 –500,000 gallons $4.00 $4.00 500,001 + gallons $4.00 $8.50 Reuse Irrigation Current Proposed (FY 2019) 0+1.05 1.25 Page 88 of 146 17 17 Page 89 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Proposed Volumetric Rate Design Parks/Restaurants/Fire Hydrants 18 Municipal Interruptible (Parks)Current Proposed (FY 2019) 0+ gallons $2.40 $2.40 *Parks department has multiple agreements with commercial customers to subsidize their water use. Expected impact to Parks from commercial rate changes is $7K -$8K per year Restaurants Current Proposed (FY 2019) 0+ gallons $2.40 $2.40 Fire Hydrants Current Proposed (FY 2019) 0+ gallons $2.40 $8.50 Page 90 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Wastewater Proposed Fixed Rates 19 Current 2019 2020 2021 2022 2023 Residential $30.65 $32.00 $32.00 $36.00 $36.00 $42.00 Small Commercial $30.65 $32.00 $32.00 $36.00 $36.00 $42.00 *No Volumetric rates on these customers Page 91 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Wastewater Proposed Fixed and Volumetric Rates 20 Current 2019 2020 2021 2022 2023 Commercial Fixed $46.35 $48.39 $48.39 $54.44 $54.44 $63.51 Volumetric $2.35 $2.75 $2.75 $3.10 $3.10 $3.61 Large Commercial Fixed $82.30 $85.92 $85.92 $96.67 $96.67 $112.78 Volumetric $2.35 $2.75 $2.75 $3.10 $3.10 $3.61 High Strength Commercial Fixed $46.35 $48.39 $48.39 $54.44 $54.44 $63.51 Volumetric $3.70 $4.46 $4.46 $5.02 $5.02 $5.86 Multi- Family Fixed $110.10 $114.95 $114.95 $129.32 $129.32 $150.87 Volumetric $2.35 $2.75 $2.75 $3.10 $3.10 $3.61 Evaporation Cooler Fixed $46.35 $48.39 $48.39 $54.44 $54.44 $63.51 Volumetric $2.35 $2.75 $2.75 $3.10 $3.10 $3.61 Page 92 of 146 Next Steps, Bill and Rate Design Impact, and Rate Comparisons Page 93 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Customer Bill Impact -Residential 22 Residential Current 2019 2020 2021 2022 2023 Water (3/4”)$40.50 $40.50 $40.50 $45.77 $45.77 $52.81 Wastewater $30.65 $32.00 $32.00 $36.00 $36.00 $42.00 Total $71.15 $72.50 $72.50 $81.77 $81.77 $94.81 Variance($)$1.35 -$9.27 -$13.04 Variance (%)1.90%-12.78%-15.95% Residential Current 2019 2020 2021 2022 2023 Water (3/4”)$64.50 $64.50 $64.50 $72.89 $72.89 $84.10 Wastewater $30.65 $32.00 $32.00 $36.00 $36.00 $42.00 Total $95.15 $96.50 $96.50 $108.89 $108.89 $126.10 Variance($)$1.35 -$12.39 -$17.21 Variance (%)1.42%-12.83%-15.81% *10,000 Gallons *20,000 Gallons Page 94 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Total Residential Monthly Bill Comparison (10,000 gallons) * Source: Bill calculated based on lowest meter size obtained from each entity’s website as of 05/07/2018 23 $71.15 $72.50 $88.11 $93.80 $100.43 $101.32 $122.59 $134.47 $162.96 $177.90 $177.93 40.50 40.50 40.94 55.80 46.81 52.32 78.24 91.49 67.86 76.88 107.08 30.65 32.00 47.17 38.00 53.62 49.00 44.35 42.98 95.10 101.02 70.85 Georgetown (Current) Georgetown (Proposed) Round Rock Pflugerville Cedar Park Temple Liberty Hill Leander Taylor Austin Hutto Water Wastewater Page 95 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Total Residential Monthly Bill Comparison (20,000 gallons) 24 $95.15 $96.50 $150.01 $163.30 $178.32 $188.28 $190.89 $212.01 $274.56 $316.73 $423.94 64.50 64.50 68.94 109.80 84.32 94.76 146.54 140.63 112.36 195.28 222.02 30.65 32.00 81.07 53.50 94.00 93.52 44.35 71.38 162.20 121.45 201.92 Georgetown… Georgetown… Round Rock Pflugerville Temple Cedar Park Liberty Hill Leander Taylor Hutto Austin Water Wastewater * Source: Bill calculated based on lowest meter size obtained from each entity’s website as of 05/07/2018 Page 96 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC Next Steps •Need to Increase Revenues –Seeking Council direction on rate changes to be effective January 1, 2019 •Council will review proposed rate changes as part of the proposed budget, and during ordinance readings •Rates Studies continued every 3 years 25 Page 97 of 146 Questions and Discussion Page 98 of 146 DRAFT RESULTS AND RECOMMENDATIONS WATER AND WASTEWATER COST OF SERVICE AND RATE DESIGN STUDY August 13th, 2020 Page 99 of 146 2NEWGEN STRATEGIES AND SOLUTIONS, LLC AGENDA PROJECT TEAM & RESOURCES METHODOLOGY DRAFT STUDY RESULTS QUESTIONS 2 Page 100 of 146 Project Team & Resources Page 101 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC NEWGEN STRATEGIES AND SOLUTIONS (NEWGEN) Management and economic consulting company specializing in municipalities and municipal utilities. Page 102 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC NEWGEN PROJECT TEAM Project Manager Matthew Garrett (Director) (972) 675-7699 mgarrett@newgenstrategies.net Assistant Project Manager Michael Sommerdorf (Senior Consultant) (972) 704-1655 msommerdorf@newgenstrategies.net Lead Analyst Megan Kirkland (Staff Consultant) (972) 432-6218 mkirkland@newgenstrategies.net Analyst Tianna Carnes (Analyst) (615) 800-8916 tcarnes@newgenstrategies.net 5 Page 103 of 146 Study Methodology Page 104 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC •An analysis to equitably allocate the revenue requirements to the various customer classes of service to the utility •Do cost differences exist between the types of customers served? •Facility requirements •Usage characteristics •Test Year (FY 2020) WHAT IS A COST OF SERVICE STUDY? 7 Page 105 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC COST OF SERVICE –WATER 8 Page 106 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC POLICY OBJECTIVES 9 Implementation Equity Customer Conservation Financial Administrative Burden Interclass Affordability Average-Day Savings Revenue Sufficiency Public Understanding Intraclass Economic Development Peak-Season Savings Revenue Stability Political Acceptance Intergenerational Rate Shock / Volatility Peak-Day Savings Rate Stability Implementation Risk Inside/Outside Understandability of Rates/Bill Sustainability Rate Predictability Legal Defensibility Industry Standards Perception of Equity Compliance Financial Risk Page 107 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CURRENT RATES WATER –BASE RATES Base Rates Inside City Outside City 5/8” Meter $ 15.50 $ 18.50 3/4” Meter 23.00 27.50 1” Meter 38.50 46.00 1 1/2” Meter 76.50 91.50 2” Meter 153.50 183.50 3” Meter 368.00 440.00 4” Meter 644.00 770.00 6” Meter 1,140.00 1,686.00 8” Meter 2,450.00 2,929.50 10 Source: City of Georgetown (https://gus.georgetown.org/customercare/rates/) Page 108 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CURRENT RATES WATER –RESIDENTIAL VOLUMETRIC RATES Volumetric Rates Inside/Outside City 0 –10,000 gallons $ 1.75 10,001 –20,000 gallons 2.40 20,001 –40,000 gallons 4.00 40,001 –60,000 gallons 6.50 60,001+ gallons 8.50 11 Source: City of Georgetown (https://gus.georgetown.org/customercare/rates/) Page 109 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CURRENT RATES WATER –NON-RESIDENTIAL VOLUMETRIC RATES Customer Class Meter Size Tier 1 Rate Tier 2 Rate Tier 2 Threshold Small Commercial <2”$2.40 $6.50 300,001 gallons Large Commercial 2”$2.40 $6.50 600,001 gallons Large Commercial 3”$2.40 $6.50 900,001 gallons Large Commercial 4”$2.40 $6.50 4M gallons Large Commercial 6”$2.40 $6.50 6M gallons Large Commercial 8”$2.40 $6.50 8M gallons Manufacturing <8”$2.40 Municipal Interruptible $2.40 Restaurant $2.40 Evaporative Cooling $2.40 Fire Flow $2.40 Irrigation Only $4.00 $8.50 500,001 gallons 12 Source: City of Georgetown (https://gus.georgetown.org/customercare/rates/) Page 110 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CURRENT RATES WASTEWATER Customer Class Base Charge (Inside) Volume Charge (Inside) Base Charge (Outside) Volume Charge (Outside) Residential (Single Family/Domestic) $ 32.00 N/A $ 36.75 N/A Small Commercial (4” Sewer Line/ 3/4” Water Meter) $ 32.00 N/A $ 36.75 N/A Commercial (<6” Sewer Line) $48.40 $2.75 $55.65 $3.15 Commercial (>8” Sewer Line) $85.95 $2.75 $98.85 $3.15 High Strength Commercial (>250 BOD/Food Processing) $48.40 $4.50 $55.65 $5.20 Multi-Family Service (>3 Residential Units per Water Meter) $114.95 $2.75 $132.20 $3.15 13 Source: City of Georgetown (https://gus.georgetown.org/customercare/rates/) Page 111 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC FUTURE CONSIDERATIONS •Postponements to next FY due to timing and data limitations •Cash-Needs/Utility Basis Hybrid Revenue Requirement approach to determine Outside City rate differential •Breakdown by asset type (water vs wastewater) for asset and depreciation details not readily available •System-wide cash needs approach for FY 2021; Explore Utility-Basis option in FY 2022 •Wastewater Cost of Service rates specific to Biological Oxygen Demand (BOD) and Total Suspended Solids (TSS) •City not currently doing grab samples, will revisit in FY 2022 update after identifying and monitoring high strength wastewater customers 14 Page 112 of 146 Draft Study Results KEY DRIVERS FY 2021 COST OF SERVICE FY 2021 –FY 2025 DECISION PACKAGES Page 113 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC KEY DRIVERS FOR FY 2021 AND BEYOND •Residential Customer Growth •2,800 Annual Water Accounts •1,300 Annual Wastewater Accounts •Long-Term Capital Needs •Approximately $192.24M in Water/Wastewater Capital Needs (FY 2021 –FY 2025) •$97.01M Debt Funded •$16.78M Cash Funded •$78.45M Impact Fee Funded •New Program Operations & Maintenance •Future costs associated with growth 16 Page 114 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC LONG-TERM CAPITAL FUNDING FORECAST 17 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Debt $15.4 $36.3 $17.7 $13.5 $14.0 Cash $3.7 $3.0 $5.8 $3.2 $1.2 Impact Fees $10.8 $15.4 $14.4 $28.2 $9.6 Total $29.9 $54.7 $37.9 $44.9 $24.8 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Co s t ( $ M ) Page 115 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC LONG-TERM CAPITAL PROJECT HIGHLIGHTS Water FY Project Description Cost ($M) 21 RR Elevated Storage Tank RR Supply Line Hoover Pump Station $ 3.5M $ 3.2M $ 2.8M 22 S. Lake WTP $ 8.0M 23 -25 S. Lake WTP ($21M/year) $ 62.0M Wastewater FY Project Description Cost ($M) 21 -25 EARZ ($1.5M/year)$6.0M 22 San Gabriel Interceptor $32.5M 23 Interceptor LS Removal & Gravity Main $6.0M 18 Page 116 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC NEW PROGRAM OPERATIONS & MAINTENANCE •Recurring future annual costs associated with new growth (FY 2022 – FY 2025) •New Positions (~114K/year) •Utility Support Manager •Control Center Supervisor •Water Services Tech •I&C Tech •Plant Supervisor •New Vehicles (~140K/year) 19 Page 117 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC TOTAL EXPENSES FORECAST 20 Debt Service: Existing and Projected Total P&I Capital Improvement Projects: Cash-Funded Long-Term Capital Capital: Cash-Funded Short-Term Capital Outlays Operations: Supplies and Maintenance Transfers Allocations (Joint Svc, AMR, General) $- $10 $20 $30 $40 $50 $60 $70 $80 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Mi l l i o n s New Program O&M Debt Service Capital Improvement Projects Capital Operations Personnel Page 118 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC REVENUE REQUIREMENT FORECAST 21 2020 2021 2022 2023 2024 2025 Wastewater $10.77 $13.98 $14.42 $19.74 $17.61 $16.29 Reuse $0.45 $0.46 $0.46 $0.42 $0.39 $0.40 Water $31.31 $34.44 $37.86 $39.04 $41.30 $43.76 Total $42.53 $48.88 $52.73 $59.20 $59.30 $60.45 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Page 119 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC FY 2021 COST OF SERVICE PEAK TO AVERAGE BY CUSTOMER CLASS 22 Per Utility Billing Data Extract (Oct 2018 –Sep 2019)Base/Extra Calculation Profile Assignment Peaking Ratio Avg MGD Max MGD Extra Customer Inside/Outside City Residential (incl Builder)2.08 11.977 24.966 12.989 41,450 Small Commercial 1.39 0.562 0.780 0.218 1,013 Large Commercial 1.26 1.502 1.898 0.396 274 Government 2.06 0.328 0.676 0.348 158 Irrigation 2.11 1.079 2.280 1.201 634 Total System 1.98 15.448 30.600 15.152 43,529 Inside/Outside City Residential (incl Builder)77.5%81.6%85.7%95.2% Small Commercial 3.6%2.5%1.4%2.3% Large Commercial 9.7%6.2%2.6%0.6% Government 2.1%2.2%2.3%0.4% Irrigation 7.0%7.4%7.9%1.5% Total System 100.0%100.0%100.0%100.0% Page 120 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC FY 2021 COST OF SERVICE REVENUE REQUIREMENT ALLOCATION •Residential and Government customer classes currently paying less than class cost of service •Residential:Estimated $2.34M or 8.3% increase in Residential revenues to meet revenue requirement in FY 2021 •Government:Estimated $0.06M or 8.2% increase in Government revenues to meet revenue requirement in FY 2021 23 Allocation of Revenue Requirement ($M)Current Variance Variance Profile Assignment Peaking Ratio Base Extra Customer Total Revenues ($M)($M)(%) Inside/Outside City Residential (incl Builder)2.08 $ 13.39 13.70 1.14 28.22 25.88 (2.34)-8.3% Small Commercial 1.39 0.63 0.23 0.03 0.89 0.98 0.09 10.1% Large Commercial 1.26 1.68 0.42 0.01 2.10 2.37 0.27 12.9% Government 2.06 0.37 0.37 0.00 0.74 0.68 (0.06)-8.2% Irrigation 2.11 1.21 1.27 0.02 2.49 2.80 0.31 12.6% Total System 1.98 $ 17.27 $ 15.98 $ 1.19 $ 34.44 $ 32.71 $ (1.73)-5.0% Page 121 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC FINANCIAL OBJECTIVES •Goals for Combined Utility (Water/Wastewater): •Overall Revenue Sufficient •Meet target financial policies •Current Fiscal Policies: •Debt Service Coverage: 1.50x •Debt Service Coverage is a reflection of a utility’s ability to pay its debt •Days Cash on Hand: 90 Days •Water Monthly Base Charge Fixed Cost of Service Recovery: 75% •“Water Rates will recognize at least 75% of the fixed cost of service, including debt payments and ROI costs, within the monthly base charge determined by meter size.” •Per Fiscal and Budgetary Policy adopted September 24, 2019 24 Page 122 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC PROJECTED COMBINED UTILITY PERFORMANCE UNDER CURRENT REVENUES •Combined utility estimated to not recover revenue required as early as FY 2021 •Days Cash on Hand reserves drop below 90 Days as early as FY 2024 •Water Monthly Base Charge revenues estimated to not recognize Water Fixed Cost of Service as early as FY 2021 25 2020 2021 2022 2023 2024 2025 Wastewater $10.77 $13.98 $14.42 $19.74 $17.61 $16.29 Reuse $0.45 $0.46 $0.46 $0.42 $0.39 $0.40 Water $31.31 $34.44 $37.86 $39.04 $41.30 $43.76 Total $42.53 $48.88 $52.73 $59.20 $59.30 $60.45 Rate Revenues $44.60 $46.06 $47.88 $49.79 $51.88 $54.01 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 FY (Targets)2021 2022 2023 2024 2025 DSC (1.50x)3.82 3.07 2.44 2.27 2.07 Days Cash (90 Days)286 218 128 60 6 Fixed COS (75%)71%68%69%69%68% Page 123 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC DECISION PACKAGE #1: ADJUSTING REVENUES UNDER CURRENT RATE DESIGN •Revenue adjustments driven by first debt payment for San Gabriel Interceptor ($32.M) in FY 2023 •Water rate adjustments targeting Fixed COS metric and to mitigate significant Wastewater rate increases 26 FY (Targets)2021 2022 2023 2024 2025 DSC (1.50x)4.20 3.91 3.47 3.25 3.01 Days Cash (90 Days)310 296 285 294 312 Fixed COS (75%)75%76%81%80%79% 2020 2021 2022 2023 2024 2025 Wastewater $10.77 $13.98 $14.42 $19.74 $17.61 $16.29 Reuse $0.45 $0.46 $0.46 $0.42 $0.39 $0.40 Water $31.31 $34.44 $37.86 $39.04 $41.30 $43.76 Total $42.53 $48.88 $52.73 $59.20 $59.30 $60.45 Rate Revenues $44.60 $48.47 $53.99 $59.20 $61.68 $64.20 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Rate Adjustments 2021 2022 2023 2024 2025 Water (All %)6.45%4.50%4.50%-- Wastewater (All %)7.85%7.85%7.85%-- Page 124 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL CUSTOMER IMPACT UNDER DECISION PACKAGE #1 27 Current FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Wastewater Bill $32.00 $34.51 $37.22 $40.14 $40.14 $40.14 Water Bill $45.00 $47.85 $49.94 $52.22 $52.22 $52.22 Total Monthly Bill $77.00 $82.36 $87.16 $92.36 $92.36 $92.36 Monthly Inc ($)$5.36 $4.80 $5.20 $-$- Monthly Inc (%)7.0%5.8%6.0%0.0%0.0% $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 Residential Inside City User Bill: 15,000 gallons (Water) Page 125 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL VOLUMETRIC RATE DESIGN 28 Georgetown (Current) Georgetown (DP#1) Georgetown (DP#2) Georgetown (DP#3) Austin Cedar Park Round Rock Pflugerville Leander Liberty Hill $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 Vo l u m e t r i c R a t e ( p e r 1 , 0 0 0 g a l l o n s ) Page 126 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL VOLUMETRIC RATE DESIGN •Based on historical customer usage characteristics and feedback from the City, the following Residential alternatives were determined: 29 Current Volumetric Tiers (eff. January 1st, 2019) Decision Package #2: 25,000+ Gallons Decision Package #3: 35,000+ Gallons 0 –10,000 gallons 0 –5,000 gallons 0 –5,000 gallons 10,001 –20,000 gallons 5,001 –15,000 gallons 5,001 –15,000 gallons 20,001 –40,000 gallons 15,001 –25,000 gallons 15,001 –35,000 gallons 40,001 –60,000 gallons 25,001+ gallons 35,001+ gallons 60,001+ gallons Page 127 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC DECISION PACKAGE #2: REVISED RESIDENTIAL TIER DESIGN (25,000+ GALLONS) 30 FY (Targets)2021 2022 2023 2024 2025 DSC (1.50x)4.25 3.95 3.47 3.25 3.01 Days Cash (90 Days)314 302 291 300 318 Fixed COS (75%)75%77%83%82%81% Rate Adjustments 2021 2022 2023 2024 2025 Water (Base $ Only)$1.00 $1.00 $1.00 -- Water (Volumetric)Varies ---- Wastewater (All %)8.89%8.89%8.89%-- 2020 2021 2022 2023 2024 2025 Wastewater $10.77 $13.98 $14.42 $19.74 $17.61 $16.29 Reuse $0.45 $0.46 $0.46 $0.42 $0.39 $0.40 Water $31.31 $34.41 $37.82 $39.01 $41.27 $43.73 Total $42.53 $48.85 $52.70 $59.17 $59.27 $60.42 Rate Revenues $44.60 $48.78 $54.24 $59.17 $61.67 $64.23 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 •Revenue adjustments driven by first debt payment for San Gabriel Interceptor ($32.M) in FY 2023 •Water Base rate adjustments targeting Fixed COS metric and to mitigate significant Wastewater rate increases Page 128 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL CUSTOMER IMPACT UNDER DECISION PACKAGE #2 31 Current FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Wastewater Bill $32.00 $34.84 $37.94 $41.31 $41.31 $41.31 Water Bill $45.00 $51.55 $52.55 $53.55 $53.55 $53.55 Total Monthly Bill $77.00 $86.39 $90.49 $94.86 $94.86 $94.86 Monthly Inc ($)$9.39 $4.10 $4.37 $-$- Monthly Inc (%)12.2%4.7%4.8%0.0%0.0% $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 Residential Inside City User Bill: 15,000 gallons (Water) Page 129 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC DECISION PACKAGE #3: REVISED RESIDENTIAL TIER DESIGN (35,000+ GALLONS) 32 FY (Targets)2021 2022 2023 2024 2025 DSC (1.50x)4.23 3.94 3.47 3.25 3.01 Days Cash (90 Days)312 299 289 298 316 Fixed COS (75%)75%77%83%82%81% Rate Adjustments 2021 2022 2023 2024 2025 Water (Base $ Only)$1.00 $1.00 $1.00 -- Water (Volumetric)Varies ---- Wastewater (All %)9.55%9.55%9.55%-- •Revenue adjustments driven by first debt payment for San Gabriel Interceptor ($32.M) in FY 2023 •Water Base rate adjustments targeting Fixed COS metric and to mitigate significant Wastewater rate increases 2020 2021 2022 2023 2024 2025 Wastewater $10.77 $13.98 $14.42 $19.74 $17.61 $16.29 Reuse $0.45 $0.46 $0.46 $0.42 $0.39 $0.40 Water $31.31 $34.42 $37.84 $39.04 $41.29 $43.76 Total $42.53 $48.86 $52.72 $59.19 $59.29 $60.45 Rate Revenues $44.60 $48.66 $54.15 $59.21 $61.71 $64.27 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Page 130 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL CUSTOMER IMPACT UNDER DECISION PACKAGE #3 33 Current FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Wastewater Bill $32.00 $35.06 $38.41 $42.08 $42.08 $42.08 Water Bill $45.00 $51.55 $52.55 $53.55 $53.55 $53.55 Total Monthly Bill $77.00 $86.61 $90.96 $95.63 $95.63 $95.63 Monthly Inc ($)$9.61 $4.35 $4.67 $-$- Monthly Inc (%)12.5%5.0%5.1%0.0%0.0% $- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 Residential Inside City User Bill: 15,000 gallons (Water) Page 131 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL VOLUMETRIC WATER COMPARISON Georgetown (Current) Georgetown (DP#1) Georgetown (DP#2) Georgetown (DP#3) $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 Vo l u m e t r i c R a t e ( p e r 1 , 0 0 0 g a l l o n s ) 75%50%25%10% Page 132 of 146 35NEWGEN STRATEGIES AND SOLUTIONS, LLC RESIDENTIAL CUSTOMER BEHAVIOR Estimated FY 2021 Water Usage by Tier (Kgals)* ** 35 Current DP#2 (25+)DP#3 (35+) Block 5 23,300 Block 4 56,033 237,347 112,427 Block 3 316,032 348,104 491,778 Block 2 616,968 975,354 975,354 Block 1 1,813,512 1,176,974 1,176,974 Total 2,825,845 2,737,779 2,756,533 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 *Assumes Price Elasticity of Demand (10% increase in rates results in a 2% -6% reduction in consumption) **Residential Inside/Outside, Builder Inside/Outside Page 133 of 146 36NEWGEN STRATEGIES AND SOLUTIONS, LLC COMMUNITY RATE COMPARISONS •Comparisons between communities are very common, but may not tell the whole story •Each system is unique in geography, age of infrastructure, capital maintenance efforts, and typical usage patterns 36 Page 134 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC REGIONAL BILL COMPARISON RESIDENTIAL USER BILL (5,000 GALLONS –WATER; FLAT SEWER*) 37 *The City currently does not charge a variable rate based on billed Sewer flows. Therefore, 5,000 gallons in Sewer flows used for surrounding cities $56.25 $59.54 $60.09 $60.31 $60.31 $62.33 $69.00 $76.63 $95.70 $114.55 24.25 29.32 25.25 25.80 25.25 28.66 34.50 29.99 66.92 64.88 32.00 30.22 34.84 34.51 35.06 33.67 34.50 46.64 28.78 49.67 Georgetown (Current) Round Rock Georgetown (DP#2) Georgetown (DP#1) Georgetown (DP#3) Cedar Park Pflugerville Austin Leander Liberty Hill Water Wastewater Page 135 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC REGIONAL BILL COMPARISON RESIDENTIAL USER BILL (15,000 GALLONS –WATER; FLAT SEWER*) 38 *The City currently does not charge a variable rate based on billed Sewer flows. Therefore, 15,000 gallons in Sewer flows use d for surrounding cities $77.00 $82.36 $86.39 $86.61 $119.04 $139.50 $142.18 $173.24 $175.95 $268.01 45.00 47.85 51.55 51.55 54.92 83.00 68.61 116.06 126.28 130.37 32.00 34.51 34.84 35.06 64.12 56.50 73.57 57.18 49.67 137.64 Georgetown (Current) Georgetown (DP#1) Georgetown (DP#2) Georgetown (DP#3) Round Rock Pflugerville Cedar Park Leander Liberty Hill Austin Water Wastewater Page 136 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC REGIONAL BILL COMPARISON RESIDENTIAL USER BILL (25,000 GALLONS –WATER; FLAT SEWER*) 39 *The City currently does not charge a variable rate based on billed Sewer flows. Therefore, 25,000 gallons in Sewer flows use d for surrounding cities $77.00 $82.36 $86.39 $86.61 $119.04 $139.50 $142.18 $173.24 $175.95 $268.01 45.00 47.85 51.55 51.55 54.92 83.00 68.61 116.06 126.28 130.37 32.00 34.51 34.84 35.06 64.12 56.50 73.57 57.18 49.67 137.64 Georgetown (Current) Georgetown (DP#1) Georgetown (DP#2) Georgetown (DP#3) Round Rock Pflugerville Cedar Park Leander Liberty Hill Austin Water Wastewater Page 137 of 146 NEWGEN STRATEGIES AND SOLUTIONS, LLC CONCLUSIONS •The Water Utility Advisory Board, in cooperation with the City Council, is empowered to have oversight over the City’s Water and Wastewater enterprise ̶Must decide on the best course of action to meet the needs of the enterprise •Guidance is needed to confirm the financial planning objectives to appropriately chart a path forward 40 Page 138 of 146 QUESTIONS MICHAEL SOMMERDORF, SENIOR CONSULTANT (972) 704 -1655 MSOMMERDORF@NEWGENSTRATEGIES.NET MATTHEW GARRETT, DIRECTOR (972) 675 -7699 MGARRETT@NEWGENSTRATEGIES.NET Page 139 of 146 City of Georgetown, Texas Water Utility Board July 9, 2020 S UB J E C T: Public Wishing to Address the Board O n a s ubjec t that is posted on this agenda: P lease fill out a speaker regis tration form whic h can be found on the table at the entranc e to the Board Meeting. C learly print your name and the letter of the item on which you wish to speak and present it to the S taff Liaison, prior to the start of the meeting. You will be called forward to s peak when the Board c onsiders that item. O nly persons who have delivered the s peaker form prior to the meeting being c alled to order may s peak. O n a subject not posted on the agenda: P ersons may add an item to a future R egular s cheduled Board agenda by filing a written request with the S taff Liais on no later than one week prior to the Board meeting. T he reques t must include the s peaker ’s name and the s pecific topic to be addressed with s uffic ient information to inform the board and the public . Only those persons who have submitted a timely request will be allowed to speak. F or Board Liaison c ontact information, pleas e logon to http://georgetown.org/boardsc ommis s ions/ -- At time of posting, there were no reques t to addres s the Board IT E M S UMMARY: F IN AN C IAL IMPAC T: . S UB MIT T E D B Y: T homas G lab; Board C hair Page 140 of 146 City of Georgetown, Texas Water Utility Board July 9, 2020 S UB J E C T: R eview and possible action to approve the minutes from the regular joint Elec tric and Water Board meeting held on June 18, 2020. - Tina Davis, Board Liaison IT E M S UMMARY: R eview, revis e and/or approve the minutes from the joint Electric and Water Board meeting on June 18, 2020. F IN AN C IAL IMPAC T: . S UB MIT T E D B Y: Tina Davis; Board Liaison AT TAC H ME N T S: Description Type WUAB Minutes_06.18.2020 Backup Material Page 141 of 146 Minutes of the Meeting for the Georgetown Electric Utility Advisory Board and the Georgetown Water Utility Board Thursday, June 18, 2020 at 2:00 PM at Georgetown Public Library, 402 W. 8th Street, Georgetown, TX, 78626 Board Members Present: Electric: Bill Sattler – Board Chairman; Mike Triggs, Robert Case, Sam Jones, Rick Woodruff Water: Thomas Glab – Board Chairman, Steve Fought, Stuart Garner, Michael Morrison, Scott Macmurdo Board Members Absent: NONE Staff Present: David Morgan, Laurie Brewer, Skye Masson, Daniel Bethapudi, Glenn Dishong, Leticia Zavala-Jones, Mike Westbrook, Michael Weisner, Chelsea Solomon, David Thomison, Tina Davis, Michael Hallmark, Wesley Wright, Sheila Mitchell, Laura Wilkins Others Present: Via Teleconference: Steve Moffitt, Schneider Engineering; Shams Siddiqi, Crescent Power, Inc. REGULAR SESSION: A. Call to Order – Bill Sattler - Electric Board Chairman and Thomas Glab - Water Board Chairman Meeting of both Boards was Called to Order at 2:00 PM by Sattler and Glab B. Introduction of New Electric and Water Board Members – Bill Sattler - Electric Board Chairman and Thomas Glab - Water Board Chairman All Board Members were introduced and gave a brief statement about their background and experience. C. History and Overview of Board Creation. (Water and Electric Boards) – Daniel Bethapudi – General Manager of the Electric Utility; and Glenn Dishong – Director of Water Utilities Dishong started off with some background on the former GUS Board & explained Council determined it was a good idea to separate the boards to be more effective with a greater level of expertise and Introduced Water team. Bethapudi gave intro of Electric team. Zavala-Jones gave intro of herself and Customer Service team and presented an overview of Customer Statistics. Brewer Introduced herself, her team and presented a basic overview of Electric & Water funds. Westbrook presented Electric System statistics; Performance Metrics; Lineman Program & Awards. Bethapudi discussed Purchased Page 142 of 146 Georgetown Electric Utility Advisory Board and the Georgetown Water Utility Board Agenda for Thursday, June 18, 2020 Page 2 of 5 Power Outlook & Challenges and Opportunities. Brewer spoke about Water Fund financials. Dishong presented Water System statistics, etc. Wright – introduced Engineering staff and spoke about the engineering department functions as it relates to Electric and Water (EARZ & Capital Projects). D. Review Board Meeting Procedures – Laura Wilkins, Executive Assistant and Tina Davis, Administrative Assistant Bylaws Quorum Requirements Attendance Policy Meeting Calendar Info Sheet Wilkins spoke briefly about the documents included in the agenda packet and gave a reminder about Attorney General’s required online presentation, attendance, and quorum requirements. E. Public Wishing to Address the Board regarding the Electric Board – Bill Sattler – Board Chairman No one requested to address the Board F. Public Wishing to Address the Board regarding the Water Board – Thomas Glab – Board Chairman No one requested to address the Board G. General Manager’s Report (Electric Utility Financial and Operations – Daniel Bethapudi – General Manager of the Electric Utility H. Director’s Report (Water Utility Financial and Operations – Glenn Dishong – Director of Water Utilities LEGISLATIVE SESSION: I. Nominations and election of Vice-Chair of the Electric Board. – Bill Sattler – Electric Board Chairman MOTION by Sattler, second by Woodruff to nominate Robert Case as Vice Chairman of the Electric Board. APPROVED 5-0 Page 143 of 146 Georgetown Electric Utility Advisory Board and the Georgetown Water Utility Board Agenda for Thursday, June 18, 2020 Page 3 of 5 J. Nominations and election of Secretary of the Electric Board. – Bill Sattler – Electric Board Chairman MOTION by Woodruff, seconded by Sattler to nominate Sam Jones as Secretary of the Electric Board. APPROVED 5-0 K. Nominations and election of Vice-Chair of the Water Board – Thomas Glab – Water Board Chairman MOTION by Macmurdo, seconded by Morrison to nominate Stuart Garner as Vice - Chairman of the Water Board. APPROVED 5-0 L. Nominations and election of Secretary of the Water Board – Thomas Glab – Water Board Chairman MOTION by Garner, seconded by Fought to nominate Scott Macmurdo as Secretary of the Water Board. APPROVED 5-0 M. Review and possible action related to the date and time of Electric Board meetings. – Bill Sattler – Electric Board Chairman MOTION by Sattler, seconded by Jones to accept the proposed date and time of Electric Utility Advisory Board meetings as the 3rd Thursday of each month at 4:00 PM, at the Georgetown City Council Chambers. APPROVED 5-0 (NOTE: due to the COVID-19 situation, the meeting location may be adjusted to accommodate social distancing requirements) N. Review and possible action related to the date and time of Water Board meetings. – Thomas Glab – Water Board Chairman MOTION by Glab, seconded by Macmurdo to accept the proposed date and time of Water Utility Advisory Board meetings as the 2nd Thursday of each month at 2:00 PM, at the Georgetown City Library. APPROVED 5-0 (NOTE: due to the COVID-19 situation, the meeting location may be adjusted to accommodate social distancing requirements). O. Consideration and possible action to approve and adopt the Bylaws of the Georgetown Electric Utility Advisory Board. – Laura Wilkins, Executive Assistant MOTION by Sattler, second by Case to approve and adopt the Bylaws of the Electric Board as presented. APPROVED 5-0 P. Consideration and possible action to approve and adopt the Bylaws of the Georgetown Water Utility Advisory Board. – Tina Davis, Administrative Assistant. MOTION by Glab, seconded by Macmurdo to approve and adopt the Bylaws of the Water Board as presented. APPROVED 5-0 Page 144 of 146 Georgetown Electric Utility Advisory Board and the Georgetown Water Utility Board Agenda for Thursday, June 18, 2020 Page 4 of 5 Q. Old Business – Council Action NO old Business R. New Business - None MOTION by Fought, second by Garner to Adjourn the Georgetown Water Advisory Board Meeting. APPROVED 5-0 Water Board Meeting Adjourned at: 3:47 PM. S. EXECUTIVE SESSION: of the Georgetown Electric Advisory Board Section 551.086: Competitive Matters MOTION by Sattler, seconded by Case for the Georgetown Electric Advisory Board go into Executive Session. APPROVED 5-0 Electric Board went to Executive Session at 3:47 PM Executive Session called to order at: 3:55 PM by Sattler MOTION by Sattler, seconded by Woodruff to adjourn Executive Session and reconvene in Legislative Session. APPROVED 5-0 Legislative Session reconvened at 5:38 PM T. Action from Executive Session: NO ACTION ADJOURNMENT: MOTION by Sattler, seconded by Woodruff to adjourn the Electric Board meeting. APPROVED 5-0 Electric Board Meeting Adjourned at: 5:40 PM __________________________ _____________________________ Tomas Glab – Board Chair Scott Macmurdo – Secretary _________________________________ Tina Davis - Water Board Liaison Page 145 of 146 Georgetown Electric Utility Advisory Board and the Georgetown Water Utility Board Agenda for Thursday, June 18, 2020 Page 5 of 5 Page 146 of 146