Jul 14, 2026 Workshop

[1.A Employee Recognition - Years of Service - June 2026]

[00:00:05]

GOOD AFTERNOON. WELCOME TO THIS MEETING OF CITY GEORGETOWN CITY COUNCIL. I'M GOING TO CALL US TO ORDER. AND WE'RE GOING TO GET ROLLING ON OUR WORKSHOP, STARTING WITH OUR EMPLOYEE RECOGNITION. GO AHEAD MA'AM.

MY APOLOGIES. GOOD AFTERNOON, MAYOR AND COUNCIL. TODAY, I HAVE THE HONOR OF RECOGNIZING THREE EMPLOYEES FOR THEIR YEARS OF SERVICE WITH THE CITY WHO HIT THEIR MILESTONE IN JUNE. THESE INDIVIDUALS ARE THE ONES THAT ENSURE OUR COMMUNITY RECEIVES EXCELLENT CUSTOMER SERVICE. THANK YOU FOR YOUR PASSION, YOUR HARD WORK, AND YOUR DEDICATION TO CUSTOMER SERVICE. MAYOR AND COUNCIL, IF YOU WILL COME DOWN TO CONGRATULATE THEM AND TAKE A PICTURE WITH EACH ONE.

THANK YOU VERY MUCH. WE'RE GOING TO RECOGNIZE APRIL PATTERSON WITH PARKS AND RECREATION. SHE IS NOT HERE TODAY, BUT SHE HAS SERVED HERE FIVE YEARS. MOLLY RITTER IS WITH PUBLIC WORKS. SHE HAS ALSO SERVED FIVE YEARS AND IS NOT PRESENT TODAY, BUT WILL AIR CLAP HER. AND THEN SAMUEL MAGIERA WITH WATER SERVICES, WHO IS ALSO NOT HERE, BUT THEY HAVE SERVED AND WORKED FOR THE CITY FOR FIVE YEARS. THAT'S OKAY. SO THANK YOU FOR THEIR SERVICE, BUT NOT TO BE FORGOTTEN. WE HAVE ONE EMPLOYEE WHO IS CELEBRATING TEN YEARS OF SERVICE AND HE IS PRESENT. MALCOLM BROWN WITH CODE COMPLIANCE. OH YES. YOU GET TO STAND UP FRONT AND GET YOUR PICTURE TAKEN. YEAH. TO CELEBRATE TEN YEARS. YEAH. ONE.

THANK YOU. I AM NOW GOING TO ASK CHIEF KRINKIE TO COME DOWN TO RECOGNIZE ANTHONY LITTLE FOR 20 YEARS OF SERVICE WITH FIRE, AND THEY'RE GOING TO TALK ABOUT HIM WITH HIM NOT BEING IN THE ROOM. SO THIS OUGHT TO BE FUN. IS RECORDED. I'M HERE TO SAY A FEW WORDS ABOUT ANTHONY LITTLE.

HE UNFORTUNATELY COULDN'T BE HERE TODAY, BUT ANTHONY HAS BEEN WITH US FOR 20 YEARS. HE SERVED ON OUR HAZMAT TEAM. HE'S CURRENTLY WITH OUR WILDLAND TEAM. HE HAS MULTIPLE CERTIFICATIONS. BUT THE BIGGEST DEAL ABOUT ANTHONY IS IS HIS HEART. HE'S GOT A HEART OF GOLD.

HE'LL DO ANYTHING FOR ANYBODY. ALWAYS MAKES PEOPLE LAUGH, MAKES THEM FEEL GOOD. THE ONE THING THAT HE WANTED ME TO MENTION IS THAT HE HAS FOUR RESCUE CATS. THAT'S WHAT HE WANTS YOU TO KNOW. THAT HE HAS FOUR RESCUE CATS. AND THAT'S JUST ANTHONY. HE'S. HE'S THERE TO HELP NOT ONLY OUR CITIZENS, BUT ANIMALS AND EVERYTHING ELSE. BUT HE IS A MENTOR FOR OUR NEW PEOPLE. HE HE GUIDES THEM IN THE RIGHT DIRECTION AND JUST ALL AROUND GOOD GUY THAT IS PROUD TO WORK HERE FOR THE CITY. AFTERNOON. I'M ROBERT GORDON, I'M ANTHONY'S BATTALION CHIEF, AND I'M HONORED HERE. I'M HONORED TO BE HERE TODAY TO RECOGNIZE ANTHONY FOR HIS 20 YEARS OF SERVICE TO THE CITY. THROUGHOUT HIS CAREER, ANTHONY HAS CONSISTENTLY SET THE STANDARD FOR CUSTOMER SERVICE. HE APPROACHES EVERY INTERACTION WITH PROFESSIONALISM, RESPECT, AND GENUINE DESIRE TO HELP OTHERS. THESE QUALITIES HAVE MADE A LASTING IMPACT ON BOTH HIS COWORKERS AND THE COMMUNITY HE SERVES. ANYONE THAT KNOWS ANTHONY ALSO KNOWS HE HAS A GREAT SENSE OF HUMOR, AND HE'S A TRUE ANIMAL LOVER. IN FACT, THERE WERE TIMES IT SEEMED WE HEARD MORE STORIES ABOUT HIS DOG, FRANK, THAN WE HEARD ABOUT ANYONE ELSE IN HIS LIFE. IT ALWAYS GAVE US A GOOD LAUGH. THOUGH ANTHONY HAS BEEN A VALUED MEMBER OF OUR DEPARTMENT, AND WE'RE GRATEFUL FOR HIS DEDICATION AND FRIENDSHIP AND THE POSITIVE EXAMPLE HE SET OVER THE PAST TWO DECADES. CONGRATULATIONS, ANTHONY. 20 YEARS OF OUTSTANDING SERVICE

[00:05:01]

[1.B Patience Ranch MUD Request]

TYPICALLY THAT WILL REQUIRE A FOLLOW UP WORKSHOP UNLESS YOU JUST GIVE US GUIDANCE TO MOVE FORWARD TODAY. FROM THAT, WE WILL DEVELOP A MUD TERM SHEET THAT WILL BE FINALIZED BASED ON YOUR FEEDBACK, AND THEN FEEDBACK FROM CITY STAFF. WE WOULD THEN WORK ON THE ACTUAL MUD CONSENT AGREEMENT, WOULD DEVELOP THAT AND THEN BRING IT FORWARD TO COUNCIL FOR FORMAL APPROVAL, SINCE THIS WOULD BE OUTSIDE THE CITY LIMITS, THERE WOULDN'T BE ZONING IN PLACE.

THE AGREEMENT WOULD LAY OUT A LAND PLAN AND OR DESCRIPTIONS OF OF WHAT AND HOW MUCH CAN BE DEVELOPED ON THE LAND, AND THEN WHERE THE DEVELOPMENT IS REQUIRED TO EXCEED THE THE CODE, OR WHERE VARIANCES TO THE CODE HAVE BEEN APPROVED BY COUNCIL. ONCE THAT HAPPENS, ONCE THAT AGREEMENT IS APPROVED, THE DEVELOPMENT WOULD FOLLOW THE THE UNIFIED DEVELOPMENT CODE UNLESS OTHERWISE STATED IN THE AGREEMENT. SO A LITTLE BACKGROUND ON THE LOCATION AND THE FUTURE LAND USE FOR THIS AREA. IT'S ROUGHLY 363 ACRES LOCATED IN THE ETJ. IT IS EAST OF GAREY PARK, WHICH YOU SEE IN GREEN ON THE SCREEN NORTH OF THE ESCALERA NEIGHBORHOOD, WHICH IS TO THE SOUTH WEST OF PARKSIDE, ON THE RIVER WHICH IS EAST OF THIS PROPERTY, AND THEN IT IS DIRECTLY SOUTH OF THE SOUTH FORK SAN GABRIEL RIVER. THE FUTURE LAND USE DESIGNATION FOR THIS AREA IS NEIGHBORHOOD, WHICH CALLS FOR PRIMARILY SINGLE FAMILY RESIDENTIAL, WHICH IS WHAT YOU'LL SEE BEING PROPOSED TODAY. JUST A QUICK OVERVIEW OF THE PLAN THAT'S BEING PRESENTED. THE DEVELOPER'S TEAM WILL COME UP AND PRESENT MANY MORE DETAILS ON THE PROPOSAL, BUT JUST KIND OF WANTED TO SHARE, AGAIN, GENERALLY WHERE THIS IS SITUATED AND THEN WHAT'S BEING PROPOSED. YOU'LL HEAR THIS A LITTLE BIT LATER, BUT THE THE DARK ORANGE LINE ON THE SCREEN ARE ACTUAL COLLECTOR ROADS INTERNAL TO THE PROJECT. AND THEN YOU'LL SEE IT KIND OF DEAD END ON THE, THE EAST SIDE OF THE SCREEN THERE, WHICH IS AN EXISTING COLLECTOR ROAD CALLED HIGH GLORY. AND THAT THAT CONNECTS DIRECTLY TO PARKSIDE PARKWAY, WHICH IS AN ARTERIAL ROADWAY. SO JUST SOME HIGH LEVEL. AND AGAIN, WE'RE, WE'RE EARLY IN THE PROCESS. SO WE HAVE NOT, YOU KNOW, WORKED THROUGH ALL THE DETAILS OF THE

[00:10:01]

YOUR FIRE AND RESCUE IS FROM SOMEBODY ELSE. SO YOU'RE GETTING NONE OF THE CITY BENEFITS, BUT PAYING ALMOST THREE TIMES THE THE TAX OF A CITY. AND THAT JUST SEEMS A VERY HIGH AMOUNT TO ME. SO THAT'S WHAT I'M LOOKING FOR AS WE GO THROUGH WHAT JUSTIFIES A 95 CENT PER HUNDRED TAX. OKAY. YEAH. THAT'S UNDERSTANDABLE. AND ONE THING YOU MAY NOT ALWAYS SEE WHEN WE LOOK AT THE POLICY AND HIT, YOU KNOW, ARE THEY HITTING CERTAIN PARTS OF YOUR POLICY THAT MIGHT MIGHT NOT ALWAYS NECESSARILY SHOW YOU WHERE THEIR COSTS ARE. AND THEY MIGHT BE ABLE TO EXPLAIN THAT A LITTLE BIT BETTER WHEN THEY'RE UP HERE IN TERMS OF, YOU KNOW, WHAT GOES INTO THAT NEED FOR HAVING A MUD, WHAT EXACTLY DOES IT PAY FOR? IT'S NOT ALWAYS THOSE THINGS THAT ARE THAT ARE GOING ABOVE AND BEYOND. SOMETIMES IT MAY, BUT THEY MAY BE ABLE TO EXPLAIN THAT A LITTLE BIT, A LITTLE BIT BETTER TOO, WHEN THEY'RE UP HERE, JUST WHAT GOES INTO, YOU KNOW, THE NEED FOR THE MUD AND THE NEED FOR THAT, THAT TAX RATE TO COVER THE COSTS. SO THE NEXT CATEGORY OF THE MUD POLICY IS THE CITY WOULD BE THE EXCLUSIVE PROVIDER IN ALL THE WAYS THAT WE CAN BE. WE WOULD BE HERE. SO THE CITY WOULD BE THE PROVIDER

[00:15:05]

AND THEN SPEAKING OF ANNEXATION. SO THIS AGREEMENT WOULD SPECIFY THE TERMS OF FUTURE ANNEXATION OF THE LAND INTO CITY LIMITS. THERE ARE SOME REQUIREMENTS IN STATE LAW HOW WE HANDLE THIS.

AND THEN WHEN THE TRIGGERS ARE MET IN THE AGREEMENT, THE CITY WOULD HAVE THE SOLE RIGHT TO DETERMINE WHETHER TO ANNEX THE LAND. SO EVEN ONCE THOSE TRIGGERS ARE MET AND WE'RE TALKING PROBABLY, YOU KNOW, DECADES FROM NOW, BECAUSE A CERTAIN PERCENTAGE OF THE MUD DEBT HAS TO BE PAID OFF. IT WOULDN'T REQUIRE THE CITY TO TO ANNEX, BUT IT DOES GIVE THE CITY THE RIGHT TO ANNEX AT THAT POINT. AND THEN WHAT WE WOULD ALSO INCLUDE IS SOME SOME MECHANISMS THAT WE'VE STARTED INCORPORATING INTO THE AGREEMENTS THAT WOULD PROVIDE THE CITY A WAY TO, TO COLLECT PAYMENTS FROM RESIDENTS FOR ANY REMAINING MUD DEBT WHEN THE LAND IS ANNEXED. SO IF A COUNCIL 30 YEARS FROM NOW DECIDES WE WANT TO ANNEX THIS LAND, BUT LET'S SAY ONLY 90% OF THE MUD DEBT IS PAID OFF, BUT YOU WANT TO ANNEX IT AT THAT POINT. WE'VE GOT A MECHANISM THAT'S BEEN ESTABLISHED IN HERE WHERE WE COULD BASICALLY COLLECT THOSE PAYMENTS ON THE UTILITY BILLS FOR THE REMAINING PORTION OF THE DEBT THAT'S THAT'S LEFT. OKAY. WITH THAT, THE DEVELOPERS GOT A COUPLE REPRESENTATIVES THAT ARE GOING

[00:20:04]

AND WITH THAT, I'LL JUMP IN. FIRST, I'LL INTRODUCE THE CURRENT LANDOWNER AND DEVELOPER, KAPLAN DEVELOPMENT. THEY'VE BEEN IN BUSINESS IN THIS AREA FOR QUITE SOME TIME. FORMERLY KNOWN AS HARRISON STRAUB, THEY HAVE A COUPLE OF GEORGETOWN COMMUNITIES THAT OUR FIRM ALSO DESIGNED, OAKS AT SAN GABRIEL AND RIVERVIEW THAT YOU MAY BE FAMILIAR WITH. I'M ALSO KIND OF IN THE NORTHWESTERN QUADRANT BAR W RANCH, WHICH IS IN LEANDER, RAGANS OVERLOOK, WHICH IS AN ACRE LOT DEVELOPMENT, AND THEN AN EXTENSIVE LIST OF OTHER PROJECTS. THEY'VE BEEN WORKING IN THIS AREA FOR OVER 40 YEARS AND HAVE OWNED THIS PROPERTY AS KIND OF A FAMILY RECREATIONAL RANCH FOR QUITE SOME TIME. OAKS AT SAN GABRIEL IS ONE OF THEIR KIND OF PREEMINENT PROJECTS IN THE GEORGETOWN AREA. WE HAVE A COUPLE PICTURES HERE 400 ACRES, OVER 1000 HOMES, 100 ACRES OF OPEN SPACE, SEVEN MILES OF NATURE TRAILS, BEAUTIFUL AMENITY CENTER. AND SIMILAR TO THIS, SOME EXECUTIVE HOUSING RIVERVIEW AND ALSO RIGHT ALONG THE RIVER. 278 ACRES, 600 HOMES, 100 ACRES OF OPEN SPACE, GREAT AMENITY CENTER CURRENTLY UNDER DEVELOPMENT AND HOME BUILDING RIGHT NOW. AND AFTER THIS PROJECT IS APPROVED, THERE WILL BE ONE BUILDER FOR THIS, WHICH IS TOLL BROTHERS. THEY'RE ACTIVELY DEVELOPING THROUGHOUT THE AUSTIN METRO AREA, INCLUDING SOME PROJECTS UP IN THE NORTHWESTERN QUADRANT. NOTHING CURRENTLY ACTIVE IN GEORGETOWN, WHICH IS. THE PLAN HERE IS TO BRING TOLL BROTHERS AND THEIR EXTREMELY HIGH QUALITY DEVELOPMENT TEAM UP HERE TO GEORGETOWN, A COUPLE OF THEIR COMMUNITIES THAT THEY'RE BUILDING IN CURRENTLY ARE LISTED, AND THEY'RE CO-DEVELOPERS ON ON SEVERAL, SPECIFICALLY TREVISO. AND THIS IS AN EXAMPLE OF WHAT THEY'RE DOING IN SANTA RITA RANCH. AND I'M SURE MOST OF YOU HAVE BEEN THROUGH THAT PROJECT, WHICH IS EXTREMELY EXTENSIVE. SOME OF THE AMENITIES THEY'VE WORKED ON IN BOTH THEIR AGE TARGETED AGE RESTRICTED PORTIONS AND THEIR THEIR MARKET RATE PORTIONS. AGAIN, BEAUTIFUL AMENITIES. AN EXAMPLE OF WHAT THEY'VE DONE IN THE TREVISO PROJECT OVER THERE AT THE EDGE OF LEANDER, PICKLEBALL COURTS, TENNIS COURTS, COMMUNITY POOL. HIGH END HOUSING. ON TWO PATIENTS. RANCH. NICK GAVE A LITTLE BIT OF EXAMPLE OF WHERE THIS PROJECT IS. I'LL DRILL DOWN A LITTLE BIT FURTHER NORTH OF 2243, AND THE PRIMARY ACCESS FOR THIS PROJECT, AS NICK MENTIONED, WILL BE FROM PARKSIDE. THERE'S AN ARTERIAL THAT'S EXISTING IN PARKSIDE PARKWAY, AND THEN HIGH GLORY PARKWAY IS COMPLETE NOW, WHICH IS A COLLECTOR THAT TIES IN TO THE EASTERN SIDE OF PATIENTS RANCH. THE NORTHERN BOUNDARY IS THE SOUTH FORK OF THE SAN GABRIEL RIVER. THIS IS THE HIGH BANK OF THE SAN GABRIEL RIVER. SO YOU'RE UP THERE ON TOP OF THE CLIFF, LOOKING OUT OVER THE SAN GABRIEL. IT'S ONE OF THE MOST BEAUTIFUL VISTAS YOU COULD EVER WANT TO SEE ALONG THE RIVER THERE EXISTING HOMES AROUND THE PROJECT. AND WE'LL GET INTO THIS A LITTLE MORE IN THE FUTURE. BUT THE THE COMPREHENSIVE PLAN ALLOWS FOR UP TO FIVE UNITS PER ACRE IN.

THIS PROJECT IS A REALLY LOW DENSITY PROJECT, 1.5 UNITS PER ACRE, EXECUTIVE TYPE HOUSING.

AND WITH THAT, I'M GOING TO HAND IT OFF TO SHANE. HE'S GOING TO WALK THROUGH A LITTLE BIT OF THE PROJECT LAYOUT, LOT SIZES, ARCHITECTURE, AND THEN I'LL JUMP BACK IN TO TALK ABOUT THE MUD HERE IN JUST A COUPLE OF MINUTES. THANK YOU. SHANE RVI PLANNING AND LANDSCAPE ARCHITECTURE. THANK YOU, COUNCIL, MAYOR AND AUDIENCE FOR THIS OPPORTUNITY TO PRESENT A LITTLE BIT ABOUT PATIENCE RANCH. FOR THOSE OF YOU WHO DON'T KNOW, JUST OVER 360 ACRES, AS WE DISCUSSED, BEAUTIFUL PIECE OF PROPERTY ROLLING FROM ABOUT 975 DOWN TO 775 AT THE SAN GABRIEL CREEK OR RIVER, EXCUSE ME. SO IT PROVIDES SOME INTERESTING TOPOGRAPHY THAT WAS IN CONSIDERATION. THERE'S A COUPLE EXISTING PONDS, AS YOU CAN SEE ON SITE, JUST A REALLY BEAUTIFUL PROPERTY, PROPERTY, HEAVILY TREED, AND OFFERS A LOT OF OPPORTUNITY FOR REALLY SITE SPECIFIC DEVELOPMENT VERSUS JUST KIND OF THE, THE SCRAPE DEVELOPMENT THAT MIGHT HAPPEN

[00:25:04]

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

SHANE. TO SUMMARIZE THE DEVELOPMENT, I'M GOING TO WALK THROUGH A LITTLE BIT OF THE CITY'S MUD POLICY AND DESCRIBE WHY THIS PROJECT WOULD BENEFIT FROM HAVING AN ETJ MUD. THESE LOT SIZES, AGAIN, ARE SIGNIFICANTLY ABOVE ALMOST EVERY PROJECT THAT WE'RE WORKING ON. OUR FIRM IS CURRENTLY WORKING ON TENS OF THOUSANDS OF LOTS, AND THIS IS OUR LARGEST LOT PROJECT THAT WE'RE WORKING ON IN THE ENTIRE MSA RIGHT NOW. THE

[00:30:05]

ONCE BONDS ARE PAID OFF, THE CITY WOULD HAVE THE UNILATERAL RIGHT TO ANNEX THE PROJECT.

THERE'S A COUPLE OF ITEMS THERE, MAYBE THE ONLY ONE I'LL CONSIDER. WE'VE TALKED TAX RATE.

BOND MATURITY IS JUST THE POLICY. BUT THE 15 YEARS IN TERMS OF TOTAL TIME FROM ISSUANCE OF THE FIRST BOND TO THE LAST BOND, THIS PROJECT, ABSORPTION OF OF HOUSES IN THIS PRICE RANGE JUST TAKES A LITTLE BIT LONGER. SO YOU CAN EXPECT TO SEE DEVELOPMENT OF A PROJECT WITH HOUSES IN THIS PRICE RANGE. IT'S NOT GOING TO FLY THROUGH LIKE 40S WILL. SO THAT'S THE POINT OF HAVING A SLIGHTLY LONGER DURATION MOVING FROM 10 TO 15 YEARS TRAFFIC AND PHASING.

AS SHANE MENTIONED, IT WOULD BE IN THREE PHASES. THE GOAL OF THE ROADWAY WAS TO HAVE THE PRIMARY ACCESS THROUGH PARKSIDE ON THE COLLECTOR ROAD AND THE EXISTING ARTERIAL ROAD, WHICH AGAIN WILL HAVE A FUTURE BRIDGE CROSSING OVER THE SOUTH FORK. THAT PHASE ANTICIPATED TO BREAK GROUND IN 28 SECOND PHASE AND 30 ONE THIRD PHASE, NOT SCHEDULED UNTIL 34. THE THOUGHTFUL PLANNING HERE AND COMPLIANCE WITH THE UDC. ALL THIS CONNECTIVITY MEETS THE REQUIREMENTS FOR THE UDC, EVEN THOUGH IT'S IN AN ETJ SCENARIO. SO EVERYTHING WE'RE DOING HERE IN TERMS OF PLANNING AND ENGINEERING COMPLIES WITH GEORGETOWN STANDARDS. THERE MIGHT BE SOME SLIGHT VARIANCES ON GRADES HERE AND THERE, SOME SOME MINOR THINGS. BUT THIS ISN'T A REQUEST FOR ANY KIND OF WHOLESALE VARIANCES. WITH THAT I'M GOING TO HAND IT BACK TO NICK. HE'S GOING TO PROVIDE A SUMMARY. AND THEN WE'LL BE AVAILABLE TO ANSWER ANY QUESTIONS. OKAY. I GUESS BEFORE WE GET INTO GATHERING FEEDBACK AND DIRECTION, WERE THERE ANY QUESTIONS THAT COUNCIL HAD THAT I CAN ANSWER? THE DEVELOPERS TEAM CAN ANSWER, YES, SIR. YEAH.

LET'S START DOWN HERE. GO AHEAD MAN. SO. WHAT I'M LOOKING FOR IS WHAT JUSTIFIES SUCH A HIGH RATE. I REALIZE THAT YOU SAY YOU ADD THESE THINGS, THESE THINGS TOGETHER, AND IT'S THE MUD ACTUALLY, THE MUD, THE MUD AND THE CITY TAXES ARE NOW DOWN TO $0.90, NOT 95. BUT THAT'S A SMALL DIFFERENCE. BUT MY UNDERSTANDING IS MUDS WERE SET UP TO PUT INFRASTRUCTURE THAT NEEDED TO GO OUT TO PLACES THAT WERE OUTSIDE THE CITY, AND YOU NEEDED TO PUT IN BIGGER WASTEWATER PIPES, BIGGER WATER PIPES TO CONNECT THAT AREA TO A ROAD THAT WOULD NEED TO GO IN.

AND THE CITY WASN'T READY TO PAY FOR IT YET. AND SO WE DEVELOPED MUD SO THAT THEY COULD PAY FOR THAT. IS THERE ANY INFRASTRUCTURE OUTSIDE OF THE OUTLINE OF THE DEVELOPMENT THAT THE CONTRACTOR IS PAYING FOR THAT WOULD JUSTIFY PART OF THE COSTS OF THE MUD? WE'LL LET SETH ANSWER THAT. I'M NOT 100% SURE ON THE INFRASTRUCTURE OFF SITE. THANK YOU. THE OFFSITE INFRASTRUCTURE ON THIS PROJECT IS RELATIVELY LIMITED. I WOULD SAY MAYBE THE MAIN PURPOSE OF MUDS IS TO REIMBURSE INFRASTRUCTURE THAT'S CONSTRUCTED WITHIN THEIR BOUNDARIES. MUDS ARE ALLOWED TO REIMBURSE INFRASTRUCTURE, WATER AND WASTEWATER SPECIFICALLY OUTSIDE OF THEIR BOUNDARIES. BUT I WOULD SAY THAT THE MAIN PURPOSE OF MUDS IS, IN FACT, TO

[00:35:01]

AND THAT THAT TAX RATE IS, IS THE MAXIMUM ALLOWED, WHICH WOULD THEN TAPER DOWN AS BONDS ARE PAID OFF. SO I UNDERSTAND YOUR INTERPRETATION, BUT WHEN I LOOK AT THE PURPOSE OF THE MUD POLICY HERE, THAT THE THE CITY OF GEORGETOWN FINDS THAT THE PURPOSE OF THE MUNICIPAL UTILITY DISTRICT MUD IS TO ASSIST IN THE CLOSING THE FINANCIAL GAP. WHEN A DEVELOPMENT IS SEEKING TO EXCEED MINIMUM CITY STANDARDS, PROVIDE A ROBUST PROGRAM OF AMENITIES AND ARE WHERE SUBSTANTIAL OFFSITE INFRASTRUCTURE IMPROVEMENTS ARE REQUIRED THAT WOULD SERVE THE MUD AND SURROUNDING PROPERTIES. SO IT DOESN'T LOOK LIKE WE'RE DOING ANYTHING OFFSITE, EXCEEDING THE MINIMUM STANDARDS IN A ROBUST PROGRAM OF AMENITIES. YOU HAVE SOME, BUT I'M NOT SURE THAT WOULD JUSTIFY $0.95. COULD YOU GET BY AT $0.45 $0.50? IS THERE A SMALLER AMOUNT THAT WOULD NOT MAKE THIS SO SUCH A HIGH TAX RATE? THE SECOND I'M ASSUMING IT'S GOING TO BE THE SECOND HIGHEST TAX RATE. AND OH BY THE WAY, YOU GET HOME STATE EXEMPTIONS BUT NOT ON THE MUD. YOU GET OVER AGE 65 EXEMPTIONS NOT ON THE MUD. YOU GET DISABILITY EXEMPTIONS BUT NOT ON THE MUD. SO PEOPLE MOVE IN THINKING THAT, OH YEAH, I'M GOING TO GET THESE EXEMPTIONS WHEN I MOVE IN. BUT THAT DOESN'T COUNT FOR THE MUD.

THE MUD IS GOING TO BE $0.95 AND I'M GOING TO BE PAYING $0.35. IF I WAS LIVING IN THE CITY, I'D BE PAYING $0.35 AND I'D GET EXEMPTIONS FOR HOMESTEAD. I GET EXEMPTIONS FOR OVER 65. AND ALL OF A SUDDEN THE THE PERSON MOVING IN GETS A BILL AND THEY'RE SAYING, THAT IS NOT WHAT I WAS EXPECTING. SO IS THERE A WAY IF WE WANT TO GO HIGHER, IS THERE A WAY THAT WE CAN MAKE SURE WE HAVE TRANSPARENCY AND PUT UP BIG SIGNS AND SAY, YOU'RE YOU'RE MOVING INTO A MUD. BE AWARE THAT YOU'RE PAYING THREE TIMES, ALMOST THREE TIMES WHAT IT WOULD COST TO LIVE IN A CITY PLACE BECAUSE YOU'RE PAYING FOR INFRASTRUCTURE THAT WAS IN THE PAST, PAID FOR, ROLLED INTO THE COST OF THE HOUSE. BUT NOW WE'VE ROLLED IT INTO TAXES SO THAT YOU CAN CAN PAY IT OFF OVER TIME. BUT UNLIKE YOUR MORTGAGE, WHICH OVER TIME YOU PAY LESS AND LESS INTEREST, YOUR MUD IS GOING TO GO, YOUR MUD TAX IS GOING TO GO UP AS THE PROPERTY VALUE GOES UP UNTIL THE MUD IS PAID OFF, AND 25 YEARS DOWN THE ROAD, IT'LL BE PAID OFF. YOU'LL BE GOOD. CAN WE PUT UP BIG SIGNS THAT SAY SOMETHING LIKE THAT? EFFECTIVELY WE DO. SO IT'S IN THE PAPERWORK, BUT THERE'S SO MUCH PAPERWORK, NOBODY PAYS ATTENTION TO ALL THE PAPERWORK. I'M LOOKING FOR TRANSPARENCY SO THAT WHEN PEOPLE MOVE IN, YOU KNOW, THEY'VE MAY HAVE LIVED IN ONE HOUSE FOREVER AND NOW THEY'RE MOVING TO THEIR FINAL HOME AND THEY AREN'T THINKING ABOUT THEY'RE THINKING ABOUT CITY TAXES, COUNTY TAXES, MAYBE A ROAD TAX, A SCHOOL TAX. AND THEY FIND OUT THE BIGGEST TAX ON THEIR BILL IS GOING TO BE THE MUD TAX, WHICH THEY DIDN'T EVEN THINK ABOUT THAT. THAT'S THAT'S WHERE I'M COMING FROM.

I'M TRYING TO FIND A WAY TO SOLVE THAT PROBLEM. THANK YOU. I THINK IT ISN'T REALLY A PROBLEM AT THE THE RANGE OF HOUSE. I THINK THESE PEOPLE ARE SAVVY BUYERS THAT ARE COMPARING WHAT THEY'RE BUYING. I LIVE IN A MUD AND MY TAX RATE HAS DROPPED. I THINK EVERY YEAR SINCE I'VE MOVED IN. THE MUD IS A LITTLE OVER 25 YEARS OLD AT THIS POINT. THIS IS MY INDUSTRY.

BUT IT WASN'T, YOU KNOW, WHEN I FIRST BOUGHT THE HOUSE. SO I, I THINK I'VE LEARNED, BUT IT'S ONE OF THOSE THINGS THAT YOU SIGN UP, IT'S PRINTED ON YOUR PLAT IN A FONT THAT'S ABOUT THE SIZE OF WHAT YOU'RE SEEING HERE IN FRONT OF YOU, SO THAT IT SHOWS UP IN YOUR MORTGAGE DOCUMENTS, YOU KNOW, AT 24 FONT BY THE TIME YOU SHRINK IT DOWN. I JUST THINK THE BUYERS AT THIS PRICE POINT REALLY UNDERSTAND WHAT THEY'RE GETTING INTO. THEY'RE COMPARING DEVELOPMENTS.

AND THEN FRANKLY, PROJECTS OF THIS QUALITY ARE NOT BEING CONSTRUCTED WITHOUT MUD. YOU'RE NOT SEEING TEN AND $12 MILLION AMENITY CENTERS. YOU'RE NOT SEEING TRAIL PACKAGES, BEAUTIFULLY LANDSCAPED BOULEVARDS, ALL OF WHICH MY COMMUNITY HAS AS WELL. UNLESS YOU HAVE A DISTRICT TO BACK THAT YOU END UP WITH RELATIVELY COOKIE CUTTER TYPE DEVELOPMENT WITHOUT A DISTRICT, AND YOU CAN END UP WITH THAT WITH A DISTRICT AS WELL. BUT A QUALITY COMMUNITY OF THIS SCALE GENERALLY ALWAYS HAS A MUD ASSOCIATED WITH IT, BECAUSE CITIES DON'T BUILD THE INFRASTRUCTURE THEMSELVES. JUST TO FOLLOW UP, MY SISTER IN LAW CAME UP TO LOOK AT SOME HOUSES, AND SHE WAS AMAZED WHEN SHE COMPARED AN EXISTING HOUSE IN THE CITY WITH ANOTHER HOUSE THAT WAS NOT VERY FAR AWAY. AND THE TAX DIFFERENCE? SHE HAD NO IDEA. AND SHE IS NOT A UNINFORMED PERSON, BUT SHE HAD NO IDEA THAT THAT WAS OUT THERE

[00:40:06]

OKAY. OTHER THAN THE RATE, IS THERE ANYTHING OTHER DIRECTION YOU WANT TO GIVE ON THIS ONE? I WILL BACK UP. IT DOES LOOK LIKE A GREAT PLACE. I REALLY I REALLY DID LIKE IT. SO OTHER THAN THE RATE YOU'RE GOOD WITH, WITH EVERYTHING ELSE THAT'S BEEN PRESENTED, WE'RE JUST TRYING TO GET SOME GOOD FEEDBACK HERE. YEAH, I THINK WE HEARD YOU ON THE RATE. THANK YOU. OKAY. GO AHEAD. AMANDA. YEAH. THANKS FOR THE PRESENTATION. AND I'M FINE WITH EVERYTHING EXCEPT FOR JUST HAVE A QUESTION ABOUT YOUR LOT SIZE. SO I'VE HEARD YOU SAY EXECUTIVE HOUSING A FEW TIMES. LOVE THAT. AND YOU ARE ABSOLUTELY RIGHT THAT I THINK, AS NICK EXPRESSED, YOU KNOW, SOME SOME OF US ON COUNCIL HAVE BEEN INTERESTED IN SEEING MORE OF THOSE TYPE OF HOUSING. ALSO, I THINK WHERE THIS IS LOCATED, THIS IS A PERFECT FIT FOR THAT TYPE OF HOUSING. THE DEVELOPMENTS THAT ARE AROUND THAT ARE VERY IN TUNE WITH THE SAME TYPE DEVELOPMENT. THE 60 FOOT LOT CONCERNS ME A LITTLE BIT. I'M NOT SURE THAT EXECUTIVE THAT I WOULD CONSIDER EXECUTIVE HOUSING GOING ON A 60 FOOT LOT. NOT THAT IT'S NOT A LOVELY HOME, I'M SURE, BUT WOULD YOU ALL CONSIDER, YOU KNOW, A LITTLE BIT DIFFERENT SPREAD THERE? I MEAN, I KNOW THAT THE NUMBERS ARE NOT YOU KNOW, YOU EXPRESSED THAT THE GENTLEMAN SITTING BEHIND YOU THAT RIGHT NOW, YOU SAID 50% AT THE 60 FOOT AND THEN 20% AT THE 100. I DON'T THINK YOU EXPRESSED WHERE THE 80 IS THAT WOULD LEAVE THAT AT, YOU KNOW, 25 ISH, SOME ODD PERCENT. WOULD THERE BE A WAY TO CONSIDER MAYBE MOVING A LITTLE BIT MORE OUT OF THAT 50%, 60 FOOT INTO WHAT I CONSIDER A BIT OF A LARGER LOT SIZE AND MORE IN TUNE WITH THAT EXECUTIVE HOUSING. YEAH, I THINK THERE'S STILL THINGS TO WORK OUT, BOTH IN, IN PHYSICAL WORK WITH THE PLANS AND THE LAYOUT. AND THEN THE 50% IS A MAX. SO IT'S NOT 50% 60 OUT THE GATE. AND I THINK THAT ALSO GOES BACK TO THE MARKET AND, AND THE CLIENT AND THE BUILDER WANTING TO MAKE SURE THAT SOME OF THIS IS MOVING TO KEEP THINGS ROLLING. I THINK CONSIDERATION OF LOT SIZES IS STILL VERY MUCH ON THE TABLE. OKAY. YEAH. SO THAT WOULD BE SOMETHING. AND SO WHAT WOULD YOU SAY YOUR PRICE POINTS ARE STARTING AT AND THEN POTENTIALLY RISING TO? IS THERE A, YOU KNOW, WHERE YOU'RE WANTING TO BE FROM A MINIMUM TO A MAX? I DON'T THINK I'M PREPARED TO ANSWER THAT. RIGHT. OKAY. THAT'S OKAY. SO YEAH, THAT WOULD BE SOMETHING THAT I WOULD LIKE US TO LOOK AT IF WE COULD, YOU KNOW, LOOK AT A LITTLE BIT LARGER LOT SIZES. I THINK THIS TOPOGRAPHY IS SO BEAUTIFUL AS WELL THAT, YOU KNOW, I KNOW THAT YOU ALL ARE CONCERNED ABOUT YOUR, YOUR PRICE POINTS AND MAKING SURE THAT YOU HAVE MULTIPLE PRICE POINTS. AND I RESPECT THAT. BUT I ALSO WANT TO BE ABLE TO SAVE AS MUCH OF THE BEAUTIFUL LANDSCAPE THAT YOU HAVE HERE. AND LARGER LOT SIZES ALSO TRANSLATE TO MORE TREES ON THE LOT AND, YOU KNOW, MORE BEAUTIFUL TOPOGRAPHY. SO LOVE TO SEE YOU CONSIDER THAT. YEAH, DEFINITELY. AND ONE OF THE THINGS I FAILED TO MENTION EARLIER, EXCUSE ME, IS WE HAVE MOST OF THESE LOTS ARE 130 FOOT MINIMUM DEPTH, AS OPPOSED TO MORE TRADITIONAL 115 TO 120. AND ON SEVERAL OF THE LOTS AS THE GRADE. AS THE GRADE ROLLS DOWN, WE'VE ADDED EXTRA DEPTH IN THERE FOR TO MINIMIZE THE GRADING AND, YOU KNOW, POTENTIALLY TO SAVE TREES AS WELL. AND SOME OF THE LOT LAYOUT AND ROADWAY LAYOUT WAS DEFINITELY LARGER. TREES WERE TAKEN INTO CONSIDERATION. OKAY. WELL, THANK YOU FOR THAT. I THINK OTHERWISE THIS LOOKS GREAT. I APPRECIATE YOU. YOU KNOW, I THINK YOU'RE ALMOST IN COMPLIANCE WITH MOST OF THE POLICIES, WHICH WE APPRECIATE YOU, YOU KNOW, STARTING FROM THAT STANDPOINT, I THINK WE CAN TALK ABOUT SOME OF THE MORE NUANCED THINGS MOVING FORWARD.

I ALSO, YOU KNOW, I WHEREAS I UNDERSTAND THAT THE TAX RATE CONCERN, I THINK THAT, YOU KNOW, THAT'S REALLY, YOU KNOW, FOR THE HOMEOWNER TO DO THAT DUE DILIGENCE ON, ON WHAT THEY ARE PURCHASING. AND I DO CONCUR THAT IN THIS DEVELOPMENT, WHAT IT LOOKS LIKE YOU'RE PUTTING OUT THERE, I THINK IT IT IS PROBABLY GOING TO LEND TO PEOPLE WHO UNDERSTAND THOSE COST DIFFERENCES. SO APPRECIATE THE PRESENTATION. THANK YOU. I'M FINE. BEN, I DON'T KNOW WHAT YOU'RE TALKING ABOUT. TAX RATE. I'VE LISTENED TO OUR GOVERNOR, LIEUTENANT GOVERNOR SAY CITIES ARE THE PROBLEM WITH TAX RATES. THEY'RE THE HIGHEST ONE AND JUST BLEEDING EVERYBODY OUT OF MONEY. NOT ANYTHING ELSE. SO. ON THE THE LOT SIZE, OBVIOUSLY YOU'RE GOING TO BE BETWEEN TWO DIFFERENT DEVELOPMENTS. ONE IS A LITTLE MORE DENSE THAN THE OTHER. SO HAVING A LITTLE BIT SMALLER WHERE YOU KIND OF PHASE INTO IT AND MAKE MAKE SENSE GIVEN THE FLEXIBILITY, I'VE GOT NO ISSUE. I LIKE THE LOWER DENSITY COMPARED TO WHAT WE'VE SEEN IN

[00:45:03]

AND THE CITY'S DEVELOPMENT STANDARDS WOULD NOT APPLY AT THAT POINT. OKAY. NO MASTER DEVELOPMENT FEE, OBVIOUSLY THEY WOULD STILL HAVE TO AT THAT POINT, THEY'D HAVE THEIR OWN WASTEWATER TREATMENT. THEY WOULD NOT BE ABLE TO CONNECT WASTEWATER. YEAH. SO THEY WOULD NEED YEAH, THEY WOULD NEED TO FIGURE OUT WASTEWATER. AND THEN WE WOULD STILL BE THE WATER PROVIDER BECAUSE IT'S WITHIN OUR CCN. CORRECT. OKAY. AND THEN THE TAX RATE, IF THEY WERE TO GO THAT ROUTE, WOULD BE SET BY WHATEVER THEY DECIDE TO DO WITH AN ELECTION THAT THEY WILL HAVE, THAT THEY WOULD HAVE AT SOME POINT WHERE THEY WOULD LIKELY SOMEONE WOULD PLOP A SOME TYPE OF STRUCTURE ON THE PROPERTY AND LIVE IN IT AND VOTE TO SET THE RATE AT WHATEVER THEY WANTED TO SET IT AT. YEAH, THEY WORK WOULD WORK DIRECTLY THROUGH TCDC AT THAT POINT. AND SO YEAH, THEY WOULDN'T BE LIMITED TO $0.95. THEY DO STILL HAVE TO JUSTIFY THAT IT'S NEEDED. AND SO IT'S NOT LIKE THEY CAN JUST HAVE CARTE BLANCHE. YEAH. HEY, KEVIN, YOU MIND? BECAUSE I'VE HAD THIS CONVERSATION WITH SETH ABOUT THIS, AND I THINK SETH CAN GIVE US SOME WORST CASE SCENARIO INFORMATION. SETH, WHAT IS THE WHAT'S THE MAXIMUM RATE IF THEY GO THROUGH TCDC OR THE STATE CURRENTLY $1.25 IN WILLIAMSON COUNTY. AND THEN I'M ASKING YOU FOR A BACK OF THE NAPKIN NUMBER. WHAT WHAT SORT OF DENSITY DO YOU THINK YOU COULD GET ON THIS PROPERTY IF YOU WERE TO HANDLE WASTEWATER OR NOT? I KNOW YOU AND YOUR GROUP WOULD NOT DO THAT. WHAT SORT OF DENSITY COULD SOMEONE GET ON THIS PROPERTY UTILIZING A DISCHARGE PERMIT? A LITTLE OVER A THOUSAND UNITS. SO IN THAT LOW 1000 TO 1200 TYPE TYPE RANGE.

SO MORE THAN DOUBLE WOULD BE EASILY ACHIEVABLE. OKAY. IN TERMS OF LOT COUNT. WELL, THE,

[00:50:07]

SO WHAT DO YOU THINK MARKET IS FOR THIS. I MEAN OBVIOUSLY, YOU KNOW THE HIGHER THAT RATE IS THE LOWER YOU HAVE TO PRICE THE HOME. WHAT DO YOU THINK THE MARKET IS FOR THE MUD RATE ON A PROJECT LIKE THIS? I THINK KEEPING IT UNDER A DOLLAR IS A GREAT MARKET VIABILITY OPTION THERE. AND THERE ARE CURRENTLY TAX RATES IN THE MSA WHERE PEOPLE ARE MAXING IT OUT. YOU KNOW, TC STATE LAW MAXIMUM. THE MARKET'S NOT QUITE AS HOT AS IT HAS BEEN THE LAST FEW YEARS.

THAT'S THAT'S A TOUGH PLACE TO BE RIGHT NOW. SO I THINK YOU'RE SEEING FOLKS KIND OF, YOU KNOW, TUNE THOSE TAX RATES TO MAKE SURE THAT SELLING HOUSES IS VIABLE, WHICH IS THE BUSINESS OF TOLL BROTHERS. THEY'RE NOT TRYING TO PRICE THEMSELVES OUT OF A MARKET BY BY ANY STRETCH.

AND THEY'LL BE THE BUILDER AND DEVELOPER, WHICH IS KIND OF A UNIQUE SITUATION WHERE THEY'RE NOT, YOU KNOW, INFLICTING BEING, HAVING A TAX RATE INFLICTED ON THEM. THEY ARE REIMBURSING.

WHAT IS THE DIRECT COST TO BUILD THE SUBDIVISION, WHICH IS A LITTLE DIFFERENT SCENARIO THAN YOU SEE IN A LOT OF GEORGETOWN DEVELOPMENTS. WELL, SO LET ME BRING THAT UP. LET ME ASK YOU A QUESTION. SO WE SEE A LOT OF MUDS THAT HAVE COME THROUGH HERE LATELY AND ALL OVER THE COUNTY STARTING TO LOOK LIKE HARRIS COUNTY. HERE IN WILLIAMSON COUNTY, THERE ARE PLENTY OF DEVELOPMENTS THAT HAVE OCCURRED IN IN AND AROUND GEORGETOWN OR ETJ, SOME OF WHICH ARE NOW ACTUALLY, YOU KNOW, THEY WERE OUT IN THE COUNTRY WHEN THEY WERE ORIGINALLY DEVELOPED, BUT THEY'RE NOW SURROUNDED BY CITY LIMITS, SEVERAL VERY NICE DEVELOPMENTS THAT ARE NOT IN THE CITY LIMITS BUT WERE NOT USED. MUDS WERE NOT USED TO DEVELOP THOSE OUT. WHAT HAS CHANGED AND WHY? WHY DO WE SEE MORE MUDS VERSUS JUST REGULAR DEVELOPMENT OUTSIDE OF THE CITY LIMITS WITHOUT USING A MUD? AND YOU MAY NOT KNOW THE ANSWER TO THAT QUESTION, BUT IT SEEMS LIKE MUDS ARE THE WAY EVERYBODY'S GOING. BUT THAT DIDN'T USED TO BE THE CASE. SURE. I THINK THE COST OF MANY THINGS IS EXCEEDING INFLATION.

SO IF YOU LOOK AT THE COST OF BUILDING A WASTEWATER TREATMENT PLANT THAT HAS ESCALATED, I'VE BEEN DOING THIS 20 YEARS, 21 THIS YEAR THAT HAS ESCALATED WAY ABOVE INFLATION IN MY CAREER. AND IT'S WILD TO SEE SOME OF THE NUMBERS THAT YOU SEE OUT THERE. CITY OF OTTAWA BUILDING $180 MILLION WASTEWATER TREATMENT PLANT. IF YOU'D TOLD ME THAT WHEN I WAS 23, I WOULD HAVE FALLEN OUT OF MY CHAIR. IT'S JUST AN UNBELIEVABLE AMOUNT OF MONEY.

SO I THINK YOU'RE SEEING INFRASTRUCTURE COSTS EXCEEDING INFLATION. AND THIS IS A MECHANISM THAT ALLOWS DEVELOPMENT TO PAY FOR ITSELF. SO I THINK GENERALLY THAT'S WHAT YOU'RE SEEING IS THAT DEVELOPMENT COSTS ARE RISING AND IT'S EVEN EXCEEDING INFLATION, WHICH IS ALREADY TOUGH. AND I THINK THAT'S WHAT IS REALLY DRIVING THE DEVELOPMENT OF MUDS AND OVERALL LARGER COMMUNITIES. SO SOME OF THOSE PROJECTS YOU MENTIONED, VERY FEW WERE OVER 1000 LOTS. THAT WAS PRETTY UNCOMMON 20 YEARS AGO TO SEE A 1000 LOT COMMUNITY. WE'RE CURRENTLY WORKING ON 34 OF THEM AT OUR FIRM THAT ARE MORE THAN 1000 LOTS. SO THAT'S KIND OF THE NEW STANDARD. DEVELOPMENT AT THAT SCALE GENERALLY REQUIRES A DISTRICT, WHEREAS, YOU KNOW, DEVELOPING 100 OR 200 LOTS AT A TIME CAN BE DONE JUST AT A, YOU KNOW, CITY TAX RATE. OKAY. THANK YOU SIR. I DON'T REALLY HAVE ANYTHING NEW THAT HASN'T BEEN SAID ALREADY. I THINK IT'S A GREAT PRODUCT. I THINK IT'S AN ASSET TO THAT AREA. AS HAS BEEN MENTIONED BEFORE, I THINK MY ONLY CONCERN IS THE $0.95, WHICH SEEMS A LITTLE HIGH, BUT I UNDERSTAND SO. QUICK QUESTION ON THE IMPACT FEES ASSESSED AT FINAL PLAT. ON THE CITY SIDE, WE'RE SAYING THAT YOU'RE NOT DEVIATING FROM THAT. BUT WHEN I LOOK AT YOUR DOCUMENTATION AT THE BOTTOM, IT SAYS YOU WANT TO PAY IMPACT FEES AT BUILDING PERMIT, WHICH IS IT'S THE INTENT. YEAH. SO WHAT THEY'RE SAYING IS PAID AT BUILDING PERMIT, I BELIEVE WE'RE NOT REALLY SAYING A DIFFERENT THING. IT WAS JUST WRITTEN DIFFERENTLY ON THEIR SLIDES. SO THEY WOULD BE ASSESSED AT FINAL PLAT. I THINK THEY WERE INDICATING PAYMENT AT BUILDING PERMIT.

RIGHT. SO ON THEIR SLIDE THEY SAY IMPACT FEES ASSESSED AT BUILDING PERMIT ON THE PATIENT RANCH SLIDE. YEAH. I BELIEVE THE INTENT, EVEN ON THEIR SIDE, IS FOR IT TO BE ASSESSED AT FINAL PLAT. UNLESS I'M MISTAKEN. CORRECT. YEAH. OKAY. PAID IT. PAID AT BUILDING PERMIT. YEAH.

[00:55:05]

THEY'RE MEETING THE REQUIREMENTS ON THAT, ON THAT ITEM. YES. PERFECT. YEAH. OTHER THAN THAT, LIKE I SAID, I LOVE THE IDEA OF MORE HIGH END DEVELOPMENT, ESPECIALLY IN THE AREA THERE. SO I'VE GOT NO PROBLEM WITH THAT. AGAIN, I THINK THE $0.95 PER $100 ASSESSED VALUE, I THINK THAT'S A DECISION FOR THE HOMEOWNER. IF THEY LOOK AT THIS, THEY WANT TO SIGN ON IT. SO BE IT. IF IT'S WHAT MAKES YOUR PROJECT PENCIL OUT, I THINK IT'S A GREAT DEVELOPMENT. THANK YOU. YEAH, I ECHO EVERYTHING THAT'S BEEN SAID. I MEAN, ONE, I THINK WE NEED TO GO CHANGE OUR MUD POLICY TO REFLECT, YOU KNOW, KIND OF CURRENTLY WHERE WE'RE AT. AND I THINK WE'RE PROBABLY RIGHT. $0.95 IS WHERE WHERE IT'S AT. IF WE'RE GOING TO BE DOING MUD CONSENTS, YOU KNOW, WE'RE NEVER GOING TO SEE SOMEONE COME IN AT, YOU KNOW, WHERE OUR CURRENT POLICY IS AND UNDERSTAND BEN'S ARGUMENT. WELL, THAT'S THE POLICY. BUT I THINK THIS IS ANOTHER GOOD INDICATION THAT WE'VE SEEN SEVERAL OF THESE LATELY, THAT WE NEED TO GO AND UPDATE THE POLICY TO REFLECT KIND OF WHERE THE MARKET'S AT. BUT YEAH, OTHER THAN THAT, I THINK THIS IS, YOU KNOW, A GREAT PRODUCT FOR THAT LOCATION. YOU KNOW, I HATE TO SAY IT, BUT COULD BE A LOT, LOT WORSE. AND SO, YOU KNOW, I THINK WE WANT TO PURSUE THIS AND TRY TO MAKE THIS WORK. BUT BEFORE WE MOVE ON, WE DO HAVE FOLKS SIGNED UP TO SPEAK ON THIS. I WANT TO GIVE THEM AN OPPORTUNITY TO DO SO RIGHT NOW. SO FOLKS, WHEN I CALL YOUR NAME, IF YOU'LL COME UP TO THE MIC, JUST STATE YOUR NAME AND YOU'LL HAVE THREE MINUTES. AND I DO HAVE ONE PERSON WHO HAS HAD SOMEONE ELSE SEE THEIR THREE MINUTES. SO THEY'LL HAVE A TOTAL OF SIX MINUTES. BUT WE'RE GOING TO START WITH GABE YOUNG. HI GABE YOUNG 27 YEARS IN THE AREA, 14 YEARS IN ESCALERA RANCH. I'D LOVE TO COMMENT ON ROAD ADEQUACY. I KNOW CITY MAPS SAY THAT THE ESCALERA RANCH ROADS CAN TOLERATE THE SORT OF MUD CONSTRUCTION. I'VE GOT 14 YEARS IN THE NEIGHBORHOOD THAT SAYS EVERY TIME THERE'S AN 18 WHEELER TRUCK OR A LARGE TRUCK THAT GOES IN THE FRONT OF THE NEIGHBORHOOD, IT GETS STUCK. SO THE ROAD ADEQUACY IS NOT THERE.

WE BUILT THE NEIGHBORHOOD OR THE NEIGHBORHOOD WAS BUILT BASED ON THE CONCEPT OF RURAL ROADS. THE FACT THAT THAT IT'S IMPACTED BY CONSTRUCTION. ALSO FIRE APPARATUS IS GOING TO BE AN ISSUE. SO I WOULD LOVE TO SEE AN ADEQUACY TEST NOT DONE BASED ON DIGITAL FILES THAT ARE HERE, BUT SOMEBODY OUT IN THE NEIGHBORHOOD WITH A TAPE MEASURE TRYING TO DRIVE AN 18 WHEELER TRUCK THROUGH THERE. SECOND OF ALL, OUR ROADS WERE HAVE BEEN MAINTAINED WITH CHIPSEAL AND KIND OF A RURAL NEIGHBORHOOD. THE CONSTRUCTION AT THIS LEVEL WILL DAMAGE OUR ROADS, THERE'S NO DOUBT ABOUT IT. SO I WOULD LOVE TO SEE A PROACTIVE, ADVANCED MANAGEMENT OF THESE ROADS. AND THEN ALSO BUDGETING FOR THE FUTURE. ADDITIONALLY, I WOULD LOVE TO SEE THE FIRE DEPARTMENT AND EMERGENCY COME THROUGH AND VALIDATE WHAT YOU HAVE IN TERMS OF MAPS. WE NEED TO MAKE SURE THAT THEY'RE SIGN OFF FOR EVERYTHING THAT'S GOING TO BE DONE. AND THERE SHOULD BE A A TRAFFIC IMPACT ANALYSIS DONE AS WELL. FINALLY, WE NEED TO DETERMINE WHO'S GOING TO PAY FOR THE WEAR AND TEAR ON THESE ROADS. WE NEED TO MAKE SURE WE'VE GOT BUDGET FOR IT AND THOSE ELEMENTS. SO I'M GOING TO MAKE A PROCEDURAL REQUEST THAT WE CONFIRM THE STANDARDS AND THAT THE RESIDENTS HAVE THE OPPORTUNITY TO REVIEW THOSE STANDARDS BY THE END. THANK YOU FOR YOUR TIME. THANK YOU SIR. NEXT UP WE HAVE DEBORAH QURAISHI. AM I SAYING THAT CORRECT? AND THEN YES. AND YOU? OH, OKAY. SHE'S REFERRING TO YOU. I THOUGHT IT WAS THE OTHER WAY AROUND. ALL RIGHT THEN, YOU'RE UP, SIR, AND I'M SORRY.

IS IT GARY KRIEGEL? PRONOUNCING YOUR NAME CORRECTLY? I'M FROM TAYLOR. MAYOR COUNCIL. THANK YOU FOR GIVING ME THE OPPORTUNITY TO SPEAK TO YOU TODAY. MY NAME IS GARY KRIEGEL.

I'M A HOMEOWNER IN ESCALERA RANCH, AND I'M ALSO THE PRESIDENT OF THE ESCALERA RANCH OWNERS ASSOCIATION. MY WIFE AND I LIVE AT THE CORNER OF CLOVIS AND MONTELL, WHICH BACKS UP DIRECTLY TO THE PATIENT'S RANCH. WE'VE BEEN THERE FOR TEN YEARS. WE PURCHASED THIS PROPERTY AND BUILT OUR HOMES THERE BECAUSE OF ITS BEAUTY, THE BEAUTY OF THE SURROUNDING AREA, AND THE PEACE AND QUIET THAT WE DESIRED WHEN WE PURCHASED THE PROPERTY YEARS AGO, SEVERAL YEARS AGO, THAT CHANGED WHEN THERE WAS A PROPOSED SUBDIVISION THAT SOME OF YOU MAY BE AWARE OF THAT WAS PROPOSED AND TREES WERE TORN DOWN TO ACCOMMODATE THIS PROPOSED DEVELOPMENT. I REMEMBER THAT DAY THEY HAD HEAVY EQUIPMENT COME IN AND DESTROYED TREES. I'VE GOT A

[01:00:02]

WE HAVE US. WE'RE ABOUT 107 IN OUR IN OUR NEIGHBORHOOD RIGHT NOW. THE CURRENT VIEW FROM OUR BACKYARD IS A LOT OF OAKS AND WILDLIFE. DEER, TURKEY, MR. STRAUB'S CATTLE. WE APPRECIATE LOOKING AT THE COWS AND EVERYTHING THERE. WE EVEN HAVE A BOBCAT THAT WE THAT WE SEE EVERY NOW AND THEN. SO IT'S A IT'S A GREAT PLACE. IT'S JUST GOING TO BE HARD TO SEE THESE TREES REPLACED BY ROOFTOPS. THAT'S THE EMOTIONAL PART. SO LET ME GET TO THE PRACTICAL PART. AND I ECHO WHAT WHAT GABE SAID AND A LOT OF THINGS, THE SAME THING THAT I HAVE CONSIDERED INCREASED TRAFFIC ON ESCALERA PARKWAY. ESCALERA PARKWAY IS IT DOESN'T HAVE CURB AND GUTTER. IT HAS A RIBBON, A 12 INCH 12 INCH RIBBON ON EACH SIDE. THERE'S NO SIDEWALKS.

THERE'S A LOT OF WALKERS. WITH THE INCREASED TRAFFIC OF PARKSIDE ON THE RIVER, IT CAN BE DANGEROUS AT TIMES. WHEN I WALK, I WALK OFF THE ROAD, OFF THE RIBBON BECAUSE THERE'S PEOPLE THAT COME THROUGH THERE. THE TRAFFIC IS REALLY INCREASED QUITE A BIT. I KNOW THE DEVELOPER IS COMMITTED TO HAVING NO CONSTRUCTION TRAFFIC GOING THROUGH ESCHLER RANCH, AND WE APPRECIATE THAT. BUT QUESTION I WOULD HAVE IS HOW IS IT GOING TO BE MONITORED AND CONTROLLED? WE KNOW THAT CONSTRUCTION TRUCK DRIVERS ARE GOING TO TAKE THE PATH OF LEAST RESISTANCE, AND IF THEY CAN GET THROUGH ESCALERA RANCH AND THROUGH THE PARKWAY TO GET TO THE PROPERTY, THEY'LL PROBABLY TAKE ADVANTAGE OF THAT. SO I'D LIKE TO UNDERSTAND HOW IS IT GOING TO BE MONITORED AND HOW IS IT GOING TO BE CONTROLLED. LIKE GABE SAID, THERE'S A SHARP TURN ON THE INTERSTATE PARKWAY RIGHT OFF OF 2243, AND WE'VE SEEN SEVERAL TRUCKS GET STUCK, GET STUCK, LONG TRUCKS GET STUCK. AND IT'S A IT'S A PROBLEM. OBVIOUSLY, WE CAN'T GET INTO OR OUT OF THE PROPERTY WHEN THAT WHEN THAT HAPPENS. A COUPLE OTHER QUESTIONS I'D LIKE TO SEE YOU CONSIDER AND HAVE INVESTIGATED IS WHERE IS THE WATER AND SEWER LINE IS GOING TO BE ROUTED? ARE THEY GOING TO COME THROUGH PARKSIDE? THEY'RE GOING TO COME THROUGH ESCALERA RANCH. IT'S GOING TO BE A WATER TOWER THAT'S GOING TO BE CONSTRUCTED. I DON'T KNOW MUCH ABOUT MUDS OR WHAT THEY'RE GOING TO WHAT THE PURPOSE OF OF THEM AND WHAT THE INFRASTRUCTURE IS GOING TO LOOK LIKE. BUT IS THERE A WATER TOWER GOING TO BE CONSTRUCTED? WHAT ABOUT THE ELECTRIC SERVICE? I KNOW THE PSC IS GOING TO PROVIDE THE SERVICE, BUT WHERE IS THE PHYSICAL LINE IS GOING TO BE ROUTED AGAIN? IS THAT GOING TO GO THROUGH PARKSIDE ON THE RIVER, THROUGH PARKSIDE PARKWAY, THROUGH ESCALERA? WHEREVER THAT'S GOING TO BE? IS THE MUD INFRASTRUCTURE GOING TO AFFECT ANY OF THE ROADS THROUGH ESCALERA RANCH? AND IN MY CASE, SPECIFICALLY ON CLOVIS, THEY'RE GOING TO BE ANY WATER LINES COMING UP THROUGH CLOVIS OR ANYTHING LIKE THAT. SO I'D LIKE TO GET A BETTER CLARIFICATION ON THAT AND HAVE YOU INVESTIGATE THAT FOR US. WE TALKED ABOUT FIRE SAFETY. THERE WAS A FIRE STATION THAT WAS PROPOSED AT ON 2243, RIGHT AT THE BORDER BETWEEN LOST QUARRY AND PARKSIDE ON THE RIVER. AND I THINK THAT THAT HAS CHANGED. THERE WAS OTHER SITES THAT WERE DECIDED UPON, AND THIS WAS NOT GOING TO BE ONE OF THE SITES. BUT WILL THERE BE A FIRE STATION? I KNOW WE TALKED ABOUT OR HEARD EARLIER IN THE PRESENTATION THAT THERE PROBABLY WASN'T GOING TO BE.

THAT'S SOMETHING THAT NEEDS TO BE CONSIDERED BECAUSE OF INSURANCE RATES AND SO ON.

WE'RE ALL CONCERNED ABOUT PROPERTY VALUES. IS THIS GOING TO DECREASE OUR PROPERTY VALUES? THAT'S HARD TO SAY FOR RIGHT NOW. BUT THAT'S A CONCERN THAT WE AS AS RANCH HOMEOWNERS ARE CONCERNED ABOUT. I'D LIKE TO UNDERSTAND BETTER ABOUT THE THE PHASE ONE BEGINNING IN 2028, IS THAT THE COMMENCEMENT OF THE INFRASTRUCTURE OR IS THAT COMMENCEMENT OF THE HOME BUILDING? IF IT'S FOR THE HOME BUILDING, THEN WHEN WILL THE MUD DEVELOPMENT START? IS THE MUD INFRASTRUCTURE GOING TO BE DONE IN PHASES OR FOR THE ENTIRE PROJECT ALL AT ONCE? AND ARE THE CONSTRUCTION DATES FOR PHASE TWO AND THREE FIRM? THAT'S PROBABLY HARD TO ANSWER, BUT ARE THEY FIRM? ARE THEY VARY BASED UPON CONSUMER DEMAND? I'D LIKE TO UNDERSTAND HOW MANY HOMES ARE BEING PLANNED FOR PHASE ONE, TWO AND THREE. AND I KNOW THAT THEY'RE SPREAD OUT FOR 28, 31 AND 34. BUT I'D LIKE TO UNDERSTAND BETTER WHAT THEIR WHAT THEIR APPROACH IS FOR THE NUMBER OF HOUSES THERE AND WHAT IS THE AREA OF DEVELOPMENT FOR THE LIMITED RETAIL AND SERVICE USES? WHERE IS IT GOING TO BE LOCATED? ACCORDING TO THE FUTURE LAND MAP? AND IF YOU COULD GIVE US SOME SENSE FOR WHAT THE TIMING OF THIS WHOLE PROCESS IS, ONCE YOU DECIDE THAT YOU WANT TO MOVE FORWARD AND THE NEGOTIATIONS ARE COMPLETE, HOW LONG DOES THAT TYPICALLY TAKE BEFORE ANYTHING GETS DONE? I KNOW 2028 IS IS A DATE THAT'S BEEN DISCUSSED, BUT I'D LIKE TO UNDERSTAND A LITTLE BIT BETTER ABOUT WHEN THAT'S ALL GOING TO HAPPEN. BUT THAT'S ALL I HAVE. AGAIN, PART OF MOTION, PART PRACTICAL, AND I APPRECIATE YOUR TIME. THANK YOU.

THANK YOU SIR. APPRECIATE IT. LAST UP WE HAVE THOMAS ARTHUR. I'M THOMAS ARTHUR. I LIVE IN

[01:05:08]

CLASSIFICATION CLASSIFICATION OF ESCALERA PARKWAY WAS IMPROPERLY CLASSIFIED AS A COLLECTOR. AND IT'S NOT. AND SO THERE IS NOT TWO ACCESS POINTS TO THIS TO THIS NEIGHBORHOOD AND WHICH WOULD BE PART OF THE CODE. SINCE. THERE'S. PARDON ME. SO THE THE ROAD FROM THE THE. I ALSO WANT TO SAY SOMETHING ABOUT. WE FOUND OUT THERE WAS NO APPEAL OF THINGS THAT ARE DECISIONS MADE ON A FINAL APPROVAL OF A PLAT. AND SO WE WOULD WANT TO MAKE SURE WE GET PLENTY OF, OF OPPORTUNITY FOR NEIGHBORHOOD FEEDBACK. THAT'S ALL I HAVE TO SAY. THANK YOU SIR. APPRECIATE IT. MAYOR, CAN I ASK A FEW QUESTIONS, NICK? OR MAYBE BOTH, I DON'T KNOW. WE'LL SEE. NICK. THE ESCALATOR ROAD THAT THE NEIGHBORHOOD THERE. THOSE AREN'T PRIVATE ROADS.

THOSE ARE COUNTY ROADS. CORRECT. SO THE COUNTY MAINTAINS THE ROADS? YES. OKAY. THAT'S WHAT I THOUGHT. THE WHAT IS THE CONSTRUCT? PLANNED CONSTRUCTION ACCESS FOR THE FOR THIS DEVELOPMENT. ONCE IT OCCURS, SETH CAN CAN DESCRIBE IT AGAIN. I THINK THEY HAD IT ON THE SCREEN THAT THEY WOULD BE USING PARKSIDE AS THEIR ACCESS POINT FOR CONSTRUCTION, BUT I'LL LET HIM ADD ANYTHING ON THAT. CORRECT THAT THE ANSWER THERE ON CONSTRUCTION ACCESS WAS TO TAKE CONSTRUCTION ACCESS FROM HIGH GLORY THROUGH PARKSIDE, NOT THROUGH ESCALERA. IT IS SOMETIMES A CHALLENGE TO GET TRUCK DRIVERS TO DO THE RIGHT THING, GRAVEL DELIVERIES. BUT WE CAN TALK TO CONTRACTORS. CITY INSPECTORS CAN BE THERE, WE CAN BE THERE. THAT'S SOMETHING WE CAN CERTAINLY WORK ON. AND THEN HIGH GLORY IS, IN FACT, UNDER CONSTRUCTION RIGHT NOW. I'M NOT TRYING TO ARGUE THAT POINT, BUT IT WILL CERTAINLY BE COMPLETE BY THE TIME CONSTRUCTION STARTS ON THIS PROJECT. WE HAVE A LOT OF ROAD HERE AHEAD OF US IN TERMS OF PRELIMINARY PLAN, CONSTRUCTION PLAN, FINAL PLOTS AND BREAKING GROUND. SO YOUR UNDERSTANDING IS HIGH GLORY WILL BE COMPLETED BY THE TIME YOU START CONSTRUCTION. CORRECT.

OKAY. UTILITIES ENTERING THE SITE. I'M ASSUMING THEY'D BE COMING THROUGH PARKSIDE BECAUSE ESCALERA DOESN'T HAVE WASTEWATER HAS OUR WATER. SO I GUESS THERE COULD BE A STUB FOR THE WATER. DO YOU KNOW WHERE THE UTILITIES WILL ACCESS THE SITE? YEAH, THROUGH PARKSIDE.

THE WASTEWATER LINE IS ACTUALLY DOWN IN THE RIVER. SO THAT WOULD GO DOWN THE HILL TO THE RIVER, AND THEN WATER WOULD LIKELY BE LOOPED TO ESCALATOR. BUT THERE'S NO NEED FOR OVERSIZE. WE ALREADY HAVE AN SER THAT THAT CONFIRMS THAT. GOT IT. THE I GUESS LAST THING IS HAVE YOU OR THE DEVELOPMENT TEAM OR OWNERS MET WITH THE HOA OF ESCALERA? BY ANY CHANCE? SEVERAL OF THE QUESTIONS THAT WERE PRESENTED WERE WOULD BE PRETTY EASY QUESTIONS TO ANSWER.

I WOULD ASSUME FROM YOUR STANDPOINT. I MEAN, A COUPLE OF THEM I JUST ARTICULATED FOR THEM. BUT HAS THERE BEEN ANY COMMUNICATION BETWEEN THE TWO TO ANSWER SOME OF THOSE QUESTIONS? THERE HAS NOT BEEN A RECENT MEETING WITH THE HOA AT ESCALERA. OKAY, WELL, IF Y'ALL COULD JUST FIND TIME TO JUST ANSWER SOME OF THEIR SIMPLE QUESTIONS OR GET AN EMAIL TO

[01:10:01]

AND THIS MAY BE FOR NICK AND BOTH OF Y'ALL. AND WE COULD PUT THE, THE, YOU KNOW, WHAT Y'ALL HAVE PROMISED TO DO ON THE CONSTRUCTION TRAFFIC COMING THROUGH PARKSIDE. WE COULD PUT THAT AS A PROVISION IN THE AGREEMENT OR THE MUD CONSENT, WHICH COULD BE ENFORCED LIKE ANY OTHER, YOU KNOW, FACTOR WITHIN THAT, WHETHER IT'S THE LOT SIZE OR WHATEVER, THAT. AND IF THEY FAILED TO DO THAT, WE CITY COULD HAVE SOME AUTHORITY TO FORCE THEM TO CORRECT IT.

YES, SIR. AND, YOU KNOW, THE CONSTRUCTION IS GOING TO BE IF IF IT'S A IF IT'S IN THE CITY'S ETJ, THE PERMITTING WILL COME TO THE CITY. SO IF IT'S THEIR THEIR CIVIL WORK, THAT'S, THAT'S BUILDING THE ROADS AND INFRASTRUCTURE, YOU KNOW, THAT COMES THROUGH A CITY TEAM THAT WILL HAVE PERMITTING AND INSPECTIONS. AND IF THEY'RE NOT FOLLOWING, IF THEY'RE NOT COMPLYING, THEN, YOU KNOW, WE CAN, YOU KNOW, WE CAN WE CAN STOP THE WORK. SAME ON THE, WHEN THE, WHEN THE HOMES ARE BEING CONSTRUCTED, YOU KNOW, WE'VE GOT THE BUILDING PERMITS AND INSPECTIONS THERE THAT CAN BE HELD UP IF NEEDED. GREAT. ALL RIGHT. THANK YOU. NICK.

ANYTHING ELSE YOU NEED FROM US? NO, THE ONLY THING I WILL JUST CLARIFY IS THE CITY DOES OWN A FIRE STATION SITE ON 2243 AT LOST QUARRY. WE DO OWN THAT SITE. AWESOME. THANK YOU. ALL RIGHT, ALL RIGHT, DANIEL, WE'RE UP SIR. GOOD AFTERNOON, MAYOR AND COUNCIL. YOU. GOOD

[1.C Energy Resource Plan]

SO TODAY I'M SHYAM SIDDIQUI. I'M WITH CRESCENT POWER CONSULTING HERE TO PRESENT THE ELECTRIC RESOURCE PLAN FOR THE CITY OF GEORGETOWN. SO TODAY WE'LL BE GOING OVER THE RESULTS AND ACTION PLAN. FEEL FREE TO STOP ME AT ANY TIME IF YOU HAVE ANY QUESTIONS OR IF I USE AN ACRONYM THAT YOU'RE NOT FAMILIAR WITH. SO WITH THAT, I'LL GET STARTED. SO I GUESS A LITTLE BACKGROUND ON CRESCENT POWER CRESCENT HAS BEEN WORKING WITH THE CITY OF GEORGETOWN FOR MANY YEARS NOW. WE HELPED, YOU KNOW, WE WORKED WITH DANIELS GROUP AND HELPED WITH PORTFOLIO MANAGEMENT. EVERYTHING FROM LONG TERM PROCUREMENT TO DAY TO DAY OPTIMIZATION OF YOUR PORTFOLIO. SO WE HELP MANAGE YOUR YOUR RISK IN THE ELECTRIC ON THE ELECTRIC SIDE FOR YOUR ELECTRIC PORTFOLIO. WE'VE HELPED WITH, YOU KNOW, RESOLVING CONSTRAINT ON SOME OF YOUR MAJOR ASSETS, LIKE YOUR PPA WITH THE SOLAR PROJECT, BUCKTHORN SOLAR. SO WE HELPED RESOLVE THAT, WHICH WAS CAUSING A LOT OF COST TO THE CITY. SO WE HAVE WE'VE HAD A LONG RELATIONSHIP AND I THINK A VERY FRUITFUL RELATIONSHIP WITH THE CITY. JUST WANTED TO PROVIDE THAT AS A BACKGROUND. SO WITH THAT, WHAT IS OUR ERP AND WHY DO WE NEED IT? THE ELECTRIC RESOURCE PLANNING PROCESS REALLY FOCUSES ON MEETING YOUR INCREASING DEMAND FOR ELECTRICITY OVER THE MID TO LONG TERM, WITH RESOURCES THAT ARE COST EFFECTIVE AND COMPLEMENT EXISTING PORTFOLIO OF RESOURCES. SO, YOU KNOW, YOU'RE MANAGING YOUR PORTFOLIO DAY TO DAY. USUALLY YOU DON'T HAVE THE TIME TO LOOK AT IT ON A LONGER TERM BASIS. AND THERE ARE A LOT OF OPPORTUNITIES AS WELL AS CHALLENGES. WHEN YOU LOOK AT IT ON A LONGER TERM BASIS. ERP IS A GOOD UTILITY PRACTICE THAT INVOLVES A COMPREHENSIVE APPROACH TO ELECTRIC PORTFOLIO PLANNING, CONSIDERING DEMAND GROWTH AND SUPPLY SIDE RESOURCES, STAKEHOLDER ENGAGEMENT, AND LONG TERM SYSTEM GOALS, ERP IS NECESSARY TO INVESTIGATE THE POSSIBLE BENEFITS OF LONGER TERM RESOURCES, SUCH AS ACQUIRING OR ENTERING INTO LONG

[01:15:04]

SO THE SUM OF THE TWO IS AT THE TOP LEVEL. SO YOU'RE SEEING A SIGNIFICANT AMOUNT OF PEAK LOAD GROWTH. I GUESS IT'S MORE EVIDENT FROM THIS GRAPH. YOU'LL SEE THAT IT HAS A LITTLE BIT OF HISTORY IN THIS GRAPH, WHICH SHOWS IT ALL THE WAY FROM 2023 TO 2030. AND YOU SEE THAT, YOU KNOW, ALL THESE YEARS WE WERE GROWING AT A LOWER RATE. AND NOW WE SEE FROM 26 ONWARD A HIGHER RATE OF GROWTH, ESPECIALLY IN ENERGY, BECAUSE EVEN THOUGH PEAK CAPACITY MIGHT NOT BE GROWING AS FAST AS IT LOOKS FOR THE ENERGY, THE ENERGY IS GROWING FASTER BECAUSE THESE LARGE LOADS ARE HIGH, WHAT WE CALL HIGH LOAD FACTORS. THAT MEANS THEY CONSUME MORE MEGAWATT HOURS PER MEGAWATT OF THE LOAD. SO THE ORGANIC LOAD CONSIDERS WHAT WAS ON THE GROUND. I GUESS AS OF 23 OR THE YEAR BEFORE, WHEREAS THE YELLOW LINE IS. WELL, I GUESS IT'S NOT NECESSARILY NEWER STUFF, BUT I GUESS MORE NEW COMING ONLINE IS WHY YOU'RE SEEING SUCH A BUMP UP. YEP. SO I GUESS IF YOU GO BACK A FEW MORE YEARS, THERE WOULDN'T BE A YELLOW LINE. BUT FROM 2023, WE'VE SEEN SOME ADDITIONS OF THESE LARGE LOADS. SO THE ORGANICS, NOT JUST RESIDENTIAL, IT'S EVERYTHING THAT WAS KIND OF HERE BEFORE. FOR THE MOST PART. YES. STUFF THAT'S BEEN NEW. OKAY. THANK YOU. SO HOW DOES GEORGETOWN CURRENTLY MANAGE ITS RISK THIS VOLATILITY RISK. SO WE LOOK AT, YOU KNOW LOAD HEDGES THE NATIVE AND VERY LARGE COMMERCIAL INDUSTRIAL LOAD HEDGES. THEY CONSIST OF FIRM PRODUCTS PURCHASED IN STAGGERED VOLUMES OVER THE MONTHS BASED ON SOME TARGET PERCENTAGE OF THE HOURLY LOAD BY EACH MONTH. SO THESE ARE CALLED LOAD HEDGE TARGETS. THIS POLICY REQUIRES THE CITY TO HEDGE LOAD FOR EACH TEMPORAL PERIOD IN EACH MONTH. FOR THE PLANNING HORIZON OF THE POLICY, WHICH IS ALSO NOT A VERY LONG TERM, YOU KNOW, SO THE HERE IN THE ERP, WE'RE LOOKING AT A FIVE YEAR TERM. THIS IS LOOKING AT A SHORTER TERM AND TRYING TO MANAGE THAT. THE EXPOSURE IN

[01:20:03]

[01:25:01]

DISPATCHABLE IS LIKE THE NATURAL GAS RESOURCES AND STUFF LIKE THAT THAT YOU CAN ACTUALLY THAT'S NOT DEPENDENT ON WEATHER THAT YOU CAN ACTUALLY DISPATCH UNDER YOUR CONTROL. SO THIS THIS IS A PROBLEM WHEN YOU HAVE LONG DURATION, LIKE A WINTER STORM LIKE URI, WE HAD, YOU KNOW, WHERE YOU NEED ENERGY, JUST NOT FOR A FEW HOURS, BUT FOR DAYS AT A TIME. AND SO THAT'S WHY THERE'S A PUSH TO MAYBE ENCOURAGE, PROVIDE SOME ADDITIONAL PAYMENTS TO THEM TO GET THESE BUILT. REAL TIME OPTIMIZATION IS SOMETHING THAT WENT IN LAST YEAR, LATE LAST YEAR, WHICH HAS BEEN HAS A SIGNIFICANT IMPACT ON ENERGY AND ANCILLARY SERVICE PRICES.

SO THIS IS A GOOD THING FOR THE CITY. IT REALLY BROUGHT DOWN THOSE PRICES QUITE SIGNIFICANTLY. IT SORT OF MADE THE MARKET MUCH MORE EFFICIENT. AND THEN THE YET TO BE DESIGNED DISPATCHABLE RELIABILITY RESERVE SERVICE. THIS IS THE PAYMENT I WAS TALKING ABOUT TO

[01:30:01]

YOU'RE PROBABLY FAMILIAR WITH THESE. THEY DON'T HAVE ANY FORCE MAJEURE PROVISION. AND THE ONLY THING YOU REALLY NEED TO BE COGNIZANT OF IS, YOU KNOW, WHETHER THE ENTITIES YOU'RE CONTRACTING WITH ARE CREDITWORTHY, BECAUSE THIS IS REALLY A FINANCIAL CONTRACT AND IT NEEDS TO BE A VERY CREDITWORTHY ENTITY COUNTERPARTY THAT PROVIDES YOU THIS HEDGE. BUT THIS HEDGE DOES NOT HEDGE AGAINST YOUR WHAT'S CALLED ANCILLARY SERVICES, ANCILLARY SERVICES, LIKE ABOUT 10% OF YOUR OF YOUR PEAK LOAD, YOU HAVE TO BUY AS ANCILLARY SERVICE OR ANY D, S, D S COST EXPOSURE. SO IT DOESN'T HEDGE THOSE. BUT IT'S VERY GOOD AT HEDGING ENERGY EXPOSURE. AND THEN YOU HAVE NATURAL GAS PEAKERS. THESE ARE LONGER TERM GREATER THAN FIVE YEAR PPAS WITH QUICK START NATURAL GAS PEAKERS THAT IS NOT UNIT CONTINGENT, WHICH MEANS WE WOULD PREFER THEM TO BE DAY AHEAD CALL OPTIONS WITH A STRIKE PRICE BASED ON THE THE RESOURCES HEAT RATE AND THE NATURAL GAS PRICE. SO ESSENTIALLY, WE DON'T WANT TO TAKE ON THE RISK OF THE RESOURCE NOT BEING THERE ON OUTAGE OR SOME SORT OF, YOU KNOW, DURATION. THE SELLER WOULD TAKE THAT RISK ON. AND THIS HEDGE IS BOTH YOUR ENERGY RISK EXPOSURE AS WELL AS SOME OF THE ANCILLARY SERVICES, NOT ALL OF THEM, BUT JUST TWO OF THEM ECRS AND NON SPIN. AND THEN IF DRS COMES INTO PLAY THEN IT DOES DOES HEDGE AGAINST DRS THE FRONT OF THE METER BATTERY ENERGY STORAGE SYSTEM.

THESE ARE AGAIN WE LOOKED AT THEM AS LONGER TERM PPAS FOR FRONT OF THE METER BATTERY SYSTEMS. IN REAL TIME. THEY CAN BE OPTIMIZED EVERY FIVE MINUTES FOR CHARGING AND DISCHARGING AND PROVIDING ANCILLARY SERVICES TO THE ERCOT MARKET. SO THIS HEDGE IS THE CITY'S ENERGY EXPOSURE, COST EXPOSURE, AS WELL AS POTENTIALLY ALL THE ANCILLARY SERVICES AND SOME PORTION OF DRS, IF THAT COMES INTO PLAY. AND THEN YOU HAVE THE BEHIND THE METER BATTERY ENERGY STORAGE SYSTEMS. SO THESE ARE AGAIN LONGER TERM PPAS FOR BEHIND THE METER BATTERIES. SO THIS HEDGES YOUR ENERGY COST EXPOSURE AS WELL AS YOUR FOR CP COSTS. FOR CP COSTS ARE YOUR CHARGES FROM ERCOT FOR USING THE TRANSMISSION GRID. THIS IS CHARGED TO ALL DISTRIBUTION ENTITIES BASED ON YOUR FOUR COINCIDENT PEAKS IN THE SUMMER MONTHS. YOU KNOW, AND THIS IS A VERY LARGE BILL ON YOUR ON YOUR ELECTRIC PORTFOLIO. SO ROUGHLY, TO GIVE YOU AN IDEA, IT'S LIKE $65,000 PER MEGAWATT PER YEAR THAT YOU PAY ON THESE FOR CP. SO REDUCING THESE FOR CPS HAS A HUGE BENEFIT FOR THE CITY. A LOT OF OTHER MUNI'S AND CO-OPS DO CHASE THIS FOR CP AND REDUCE THAT COST. ANOTHER ADDED BENEFIT OF BEHIND THE METER BATTERY IS THESE WOULD BE, YOU KNOW, LOCATED LIKE AT YOUR SUBSTATIONS OR AT CUSTOMER LOADS. AND THEY PROVIDE RESILIENCY. WHAT THAT MEANS IS, YOU KNOW, IF THERE'S ANY SORT OF TRANSMISSION OR DISTRIBUTION OUTAGES THAT YOUR LOAD GETS DISCONNECTED, THESE BATTERIES CAN ACTUALLY KEEP RUNNING AND KEEP PROVIDING THAT LOAD, EVEN THOUGH IT'S DISCONNECTED FROM THE GRID. SO THIS IS ADDED RELIABILITY AND RESILIENCY THAT YOU CAN PROVIDE TO YOUR CUSTOMERS WITH THESE KIND OF ASSETS. WE DID NOT CONSIDER ADDITIONAL SOLAR AND WIND RESOURCES SINCE THE CITY'S PORTFOLIO IS SO HEAVILY, ALREADY HAS A SIGNIFICANT AMOUNT OF INTERMITTENT SUCH INDEPENDENT RESOURCES. AND, YOU KNOW, GIVEN THE LARGE PENETRATION OF SOLAR AND WIND IN THE MARKET, THE OUTPUT OF SOLAR AND WIND ASSETS IS ACTUALLY NEGATIVELY CORRELATED WITH WITH MARKET PRICES, WHICH MEANS WHENEVER YOUR WIND OR SOLAR IS PRODUCING A LOT, EVERYONE ELSE'S WIND OR SOLAR IS ALSO PRODUCING A LOT. AND THE MARKET PRICES TEND TO BE LOW DURING THOSE HOURS. SO IT'S NOT A VERY GOOD CORRELATION FOR PRICE HEDGING. SO THAT'S WHY WE DIDN'T CONSIDER ADDITIONAL WIND OR SOLAR. SO AFTER GOING

[01:35:07]

SO WE HAD THE BASE CASE, WHICH IS SORT OF A NORMAL YEAR. 2023 IS USED BY ERCOT AS A NORMAL YEAR. YOU KNOW, WITH THAT YEAR'S WIND AND SOLAR GENERATION AND, YOU KNOW, SORT OF WE USE THAT TO DETERMINE PRICES GOING FORWARD BASED ON ALL THE ADDITIONS, THE TRANSMISSION ADDITIONS, THE LOAD FORECAST, ALL THE LARGE LOADS COMING IN AND THE NEW RESOURCES BEING BUILT. SO WE DO SORT OF A. WHOLE SIMULATION OF THE MARKET, JUST LIKE ERCOT WAS RUNNING THAT MARKET. SO THIS IS THE SAME KIND OF TOOL THAT ERCOT USES TO DISPATCH THE MARKET. WE USED A SIMILAR TOOL CALLED YOU PLAN TO DO THIS ANALYSIS TO FIGURE OUT WHAT FUTURE PRICES COULD LOOK LIKE. AND THEN SO THAT'S THE BASE CASE. OKAY. SO THAT'S WHAT THE EXPECTED CASE OF THE MARKET IS. BUT WE WANTED TO LOOK AT DIFFERENT SCENARIOS. WHAT IF A CASE LIKE 2019 PRICES WERE TO RECUR OR EVEN 2021 WHERE THE PRICES WERE REALLY HIGH? YOU KNOW, YOU HAD YURI AND YOU HAD A HOT SUMMER TOO. WHAT IF YOU HAD SOMETHING LIKE THAT? SO WE DID. WHAT WE DID WAS WE TOOK THOSE MARKET OUTCOMES AND WE PROJECTED THOSE TO 2026 TO AND

[01:40:02]

SO YOU CAN SEE THAT, YOU KNOW, WE DON'T SHOW PORTFOLIO ONE HERE, BUT THIS IS JUST THE RESULTS FOR PORTFOLIO TWO, WHICH IS OUR RECOMMENDED PORTFOLIO. BUT IF YOU IF WE IF I WERE TO SHOW YOU PORTFOLIO ONE, YOU'D SEE THAT THE RED DOT FOR 2021 WOULD BE WAY UP THERE, LIKE MAYBE AT $160 MILLION RANGE, SOMETHING LIKE THAT. AND THAT'S BECAUSE, YOU KNOW, IF YOU FLOW TO THE MARKET IN 2021 WOULD HAPPEN AGAIN, YOU WOULD BE CAUGHT VERY SHORT. SO THAT'S WHY WE DON'T WANT THAT KIND OF VOLATILITY. AND PORTFOLIO TWO, AS YOU CAN SEE, YOU KNOW, MANAGES WHAT YOU CAN SEE THAT THE SPREAD BETWEEN THE DOTS IS LOW. AND I'LL EXPLAIN WHY THEY'RE HIGHER AS YOU GO OUT. BUT THEY'RE PRETTY TIGHT IN THAT IT HEDGES YOUR PORTFOLIO REALLY WELL GOING OUT, AS I EXPLAINED, YOU KNOW, 20, 28, 29 AND 30, WE'RE NOT FULLY BUYING OR RECOMMENDING THAT YOU BUY TODAY FOR THE LOAD THAT'S PROJECTED TO HAPPEN THOSE YEARS.

THAT'S WHY YOU SEE THAT IT'S NOT FULLY HEDGED. YOU SEE THE VOLATILITY A LITTLE BIT OF VOLATILITY, THE RED DOT BEING HIGHER IN THOSE YEARS. BUT OUR RECOMMENDATION IS AS THOSE LOADS MATERIALIZE YOU WOULD BE BUYING ADDITIONAL AMOUNTS OF THOSE BLOCKS OF ENERGY. SO THIS PORTFOLIO TWO IS AGAIN NOT JUST THE BLOCK OF ENERGY BUT ALSO THE FRONT OF THE METER BATTERIES, WHICH WE THINK WORKS REALLY WELL WITH YOUR PORTFOLIO. AND THIS IS THE SAME LOOK ON A DOLLARS PER MEGAWATT HOUR. SO THIS IS GOING BACK TO YOUR QUESTION EARLIER OF HOW DOES HOW ARE WE HEDGING YOUR EXPOSURE, YOUR CUSTOMERS COST OF ENERGY? SO THIS SORT OF SHOWS THE RANGE OF COSTS YOUR CUSTOMERS COULD SEE UNDER DIFFERENT SCENARIOS. SO WHY DID WE CHOOSE PORTFOLIO TWO. WHY DO WE THINK IT'S OPTIMAL. SO PORTFOLIO ONE AGAIN IT HAS LOW BASE COST BUT HIGHER PORTFOLIO COSTS MUCH HIGHER PORTFOLIO COST VOLATILITY DUE TO LACK OF HEDGES. AND SECONDLY, THE HEDGE POLICY WOULD NOT ALLOW FOR PORTFOLIO ONE ANYWAY. AND ONCE YOU DO THE HEDGE POLICY THE COST PORTFOLIO ONE ACTUALLY GOES ABOVE PORTFOLIO TWO. SO WE DON'T RECOMMEND PORTFOLIO ONE FOR SURE. PORTFOLIO TWO IS THE ONE THAT OPTIMALLY HEDGES USING YOUR SEVEN BY USING SEVEN BY 24 BLOCK ENERGY BILATERALS AND FRONT OF THE METER BATTERY PPAS, POWER PURCHASE AGREEMENTS. IT HAS THE LOWEST EXPECTED COST AND THE LOWEST PORTFOLIO COST VOLATILITY. IT HEDGES ENERGY AND ANCILLARY SERVICE EXPOSURES, SO IT HAS A LOT OF BENEFITS THAT GO WITH IT. DUE TO THE INTRODUCTION OF BATTERIES, THE BLOCK ENERGY AND, YOU KNOW, THE NATURAL GAS PORTFOLIO. THREE, IT HAS A HIGHER EXPECTED COST THAN PORTFOLIO TWO. AGAIN BECAUSE CURRENTLY NATURAL GAS IS MORE EXPENSIVE PER MEGAWATT THAN THE BATTERIES. SO AGAIN, YOU SHOULD KEEP AN EYE OUT ON THIS FOR FUTURE, YOU KNOW, IF IT BECOMES COST EFFECTIVE IN THE FUTURE. BUT RIGHT NOW WE DON'T RECOMMEND YOU ENTERING INTO A NATURAL GAS PEAKER PPA, THE FRONT OF THE METER BATTERIES ONLY IN PORTFOLIO FOUR. AGAIN, EVEN THOUGH IT HAS A LOW COST AND VOLATILITY. BUT GIVEN YOUR GROWTH IN ENERGY, WE DON'T RECOMMEND THIS BECAUSE IT'S AGAIN, TAKING ON SOME ADDITIONAL RISK AND THEN BLOCK ENERGY AND BEHIND THE METER BASE, BECAUSE THESE ARE SMALLER SIZE, IT'S HIGHER COST THAN PORTFOLIO TWO. SO BUT IT DOES HEDGE ENERGY AND TRANSMISSION COST EXPOSURE AND PROVIDES RESILIENCY. SO THERE IS SOME TRADE OFF THERE. SO YOU NEED TO CONSIDER THAT. BUT FOR AS JUST ON A COST BASIS FOR ENERGY HEDGING WE PREFER PORTFOLIO TWO. SO BASED ON THAT THAT ANALYSIS AND THE RESULTS WE GOT SHOWING THAT PORTFOLIO TWO IS IS BEST SUITED FOR THE CITY MOVING FORWARD. YOU KNOW, SO WE THE NEXT IS NEXT STEPS. YOU KNOW, WE SAY THAT EXISTING PORTFOLIO HAS SIGNIFICANT EXPOSURE TO SCARCITY EVENTS AND A SIGNIFICANTLY SHORT CAPACITY DUE TO THE VERY LARGE COMMERCIAL AND INDUSTRIAL LOAD GROWTH, SIGNIFICANT LARGE LOAD GROWTH PRESENTS A NEW CHALLENGE AS WELL AS OPPORTUNITY THAT WE TALKED ABOUT. ERP LONG TERM PPAS MAY PROCURE HEDGE POLICY

[01:45:05]

EVEN THOUGH YOU MIGHT BE LONG IN CERTAIN HOURS, YOU WILL BE SELLING INTO THE MARKET, BUT THE COST IS SIGNIFICANTLY LOWER OF THE SEVEN BY 24 BLOCK. SO THAT'S WHY WE RECOMMEND LOOKING AT THE SEVEN BY 24 BLOCK AS AN OPTION. AND THEN PROCURE ENERGY BLOCKS FOR QUANTITIES IN PORTFOLIO TWO, WHICH ARE LOWER THAN ROUGHLY 50% OF THE QUANTITIES NEEDED IN THE FOUR, 4 TO 5 YEAR OUT TO AVOID OVER PROCURING DUE TO THE UNCERTAINTY IN YOUR LOAD FORECAST. SO WE'RE BEING VERY CONSERVATIVE IN OUR RECOMMENDATION. AND THEN IN FRONT OF THE METER BATTERIES, WE THINK IS A VERY GOOD FIT FOR YOUR PORTFOLIO. IT CAN HEDGE ENERGY AND ANCILLARY SERVICE PRICES. SO WE WOULD SAY THAT YOU NEED TO CONSIDER 1 TO 2 HOUR BATTERY SYSTEMS IN SMALLER INITIALLY TO GAIN IN SMALLER QUANTITIES. SO, YOU KNOW, A GOOD SIZE TO START WITH IS TEN, TEN MEGAWATTS IF YOU JUST WANT TO GET YOUR FEET WET. BUT YOU KNOW, FOR THIS PORTFOLIO, YOU NEED LARGER QUANTITIES THAN THAT TO MEET THE NEEDS OF YOUR PORTFOLIO. SO ON THIS PORTFOLIO TO THE SEVEN BY 24 ENERGY BLOCKS ARE ESSENTIALLY A HEDGE.

WE BUY THOSE. DO YOU BUY LIKE THIS WEEK FOR NEXT WEEK, OR YOU CAN BUY THIS WEEK FOR THREE WEEKS FROM NOW, I GUESS IT. YEAH. SO IN THIS WE'RE SAYING BUY FOR LIKE THIS YEAR, MAYBE FOR THE REMAINDER OF THE YEAR. SO WHOLE STRIP FOR THE YEAR AND MAYBE THE WHOLE STRIP OF NEXT YEAR, YOU KNOW, SO BUY THESE LARGE STRIPS AND YOU CAN ALSO MULTIPLE YEARS, YOU KNOW, YOU CAN GO. SO THE LONGER THE BIGGER STRIP YOU BUY AND NOW YOU CAN AFFORD TO DO THAT BECAUSE OF THE LOAD GROWTH THAT'S THERE. SO YOU WON'T BE THAT LONG ENERGY LIKE PREVIOUSLY. SO YOU CAN BUY THOSE STRIPS IN THE LONGER AND THE GREATER QUANTITY YOU BUY.

OF COURSE THE PRICE COMES DOWN, THE LOWER THE PRICE. SO HOW, HOW DO YOU MAYBE A DUMB QUESTION, HOW DO YOU PAY FOR THOSE? IS THAT YOU PAY FOR THEM UPFRONT WHEN YOU BUY THEM OR YOU'RE PAYING FOR THEM, IT'S A TAKE OR PAY KIND OF DEAL. RIGHT? RIGHT. GOT IT. SO YOU PAY THEM.

YEAH. MR. WHAT WHAT HAPPENS FROM AN OPERATIONAL POINT OF VIEW IS, IS WE HAVE THE RISK MANAGEMENT POLICY AND ONE OF THE SUB POLICIES IN THE RISK MANAGEMENT POLICY IS YOUR HEDGING POLICY. AND IF YOU REMEMBER, WE ACTUALLY IN THE PAST COUPLE OF YEARS, WE CREATED TWO PORTFOLIOS, ONE FOR THE NATIVE LOAD AND ONE FOR THE FOR THE VERY LARGE LOAD. SO THE HEDGING REQUIREMENTS, THE TIMELINES FOR THOSE HEDGES ARE VERY DIFFERENT FOR THE NATIVE LOAD VERSUS THE VERY LARGE LOAD. THE KEY HERE IS TO MAKE SURE THAT WE DON'T MAKE LONG TERM PURCHASES FOR THE VERY LARGE LOAD CUSTOMERS, BECAUSE IT'S SO VOLATILE IN NATURE. SO ON ONE HAND, A SEVEN BY 24 BLOCK OVER MULTIPLE YEARS MAY BE CHEAPER. BUT AT THE SAME TIME, IF FOR SOME REASON THERE IS A SIGNIFICANT DOWNTURN IN THE WHOLE, I. HIGHER AI ACTIVITY, I DON'T WANT TO CALL IT SOMETHING ELSE, BUT ANYHOW, IF THERE IS A DOWNTURN THERE, WE DON'T WANT TO BE IN A LONG POSITION BECAUSE THAT'S THAT'S THE WORST TIME TO BE IN A LONG POSITION.

ALSO, ONE OF THE NEXT TOPICS WE'LL BE TALKING ABOUT IS ADDRESSING SOME OF THE RISKS WITH VERY LARGE LOADS. IS, IS WE CREATED THIS CONCEPT CALLED ENERGY RATE RIDER, WHICH ALLOWS US TO BUY SHORT TERM BLOCKS OF ENERGY FOR THE VERY LARGE LOAD CUSTOMERS. AND THEY JUST, AND THEY JUST, THEY PAY FOR THOSE COSTS. SO WE THE IDEA HERE IS, IS DEVELOP A HIGH LEVEL OVERVIEW OF WHAT WE SHOULD BE DOING AND TEMPER IT WITH BASED ON HOW WE SEE THE, THE LOAD FORECAST COMING IN FROM THE CUSTOMERS. SO THIS IS JUST THE INITIAL PART OF THE STUDY. WE OPERATIONALIZE IT BY INTEGRATING IT WITH OUR RISK MANAGEMENT POLICY, THE HEDGING POLICY. SO THE I WAS JUST TRYING TO MAKE SURE FROM A FINANCIAL STANDPOINT HOW, WHERE THEY WOULD COME FROM IN THE FUNDS. SO IT WOULD BE EVEN IF YOU'RE LOCKING IT UP, SAY, FOR A YEAR OR TWO YEARS, THE COST IS RECOGNIZED AT THE TIME OF WHICH YOU USE THE BLOCK THAT YOU PURCHASED MAYBE A YEAR AGO OR SO. RIGHT? SO YOU'RE PAYING UPFRONT, YOU'RE NOT PAYING UPFRONT FOR TWO YEARS OF ENERGY, BASICALLY. SO BASICALLY WE, WE HAVE THESE VERY COMPLEX

[01:50:05]

AND THOSE CONTRACTS ARE STRUCTURED BASED ON A BALANCE SHEET AND THE STRENGTH OF OUR BALANCE SHEET. SO WE GET INTO THESE MULTIPLE YEAR CONTRACTS. AND ONCE THE OPERATIONAL MONTH HAS PASSED, THAT'S WHEN THE BILL IS AND WE PAY THEM THEN ON ON THE BATTERIES THOUGH, THAT IS A TRUE CAPITAL COST. THAT IS SOMETHING THAT WE WOULD HAVE TO TO BUILD AND NOT NECESSARILY.

MR. PITTS. YEAH, SURE. YEAH. SO AND ALSO, IF YOU WILL, WITH THE SAME QUESTION, TALK ABOUT THE TAX AND INVESTMENT TAX CREDIT AS WELL. RIGHT, RIGHT. SO WE FEEL LIKE, YOU KNOW, FOR THE BATTERIES, OF COURSE, YOU HAVE THE OPTION OF BUILDING IT YOURSELF. YOU KNOW, IN THAT CASE, YOU WOULD INCUR THE CAPITAL COSTS UPFRONT. BUT WE FEEL LIKE, YOU KNOW, BECAUSE THESE ARE COMPLEX TO OPERATE AND STUFF. SO WE FEEL LIKE A PPA MAKES MORE SENSE WHERE YOU WOULD JUST CONTRACT FOR IT. AND THEN YOU DON'T HAVE TO PAY UPFRONT ANYTHING. SO YOU WOULD JUST PAY MONTHLY A PAYMENT JUST LIKE THE BLOCK PURCHASE. SO WITH THE PHYSICAL BATTERIES BE LOCATED IN GEORGETOWN SOMEWHERE, OR THEY COULD BE SOMEWHERE OFFSITE AND IT'S JUST GOING INTO THE GRID JUST LIKE ANYTHING, ANY OTHER PPA OR SOMEWHERE ELSE, THE FRONT OF THE METER CAN BE ACTUALLY ANYWHERE. OKAY. BUT THE BEHIND THE METER STUFF NEEDS TO BE IN THE GEORGETOWN DISTRIBUTION SYSTEM TO GET ALL THE BENEFITS. YEAH. AND THEN THE, THE TAX CREDIT PIECE FOR THE BATTERIES, WHERE DO YOU IS THAT SOMETHING THAT'S MARKETABLE? KIND OF LIKE OUR THE GREEN ENERGY CREDITS, THE, THE CREDITS THAT WE SELL. I KNOW THAT, YOU KNOW, IF LIKE WHEN OTHER PEOPLE, I'M NOT SURE HOW THE MEANING I HAVE TO LOOK INTO THE MUNI LAWS. BUT, YOU KNOW, SINCE WE WERE LOOKING AT PPAS, WE, WE DIDN'T TAKE INTO ACCOUNT THE 30%. SO THAT WOULD MAKE IT EVEN MORE ATTRACTIVE. BUT THEY, THEY, YOU KNOW, TAKE ADVANTAGE OF THE TAX CREDITS AND THEY HAVE, YOU KNOW, EQUITY PARTNERS THAT CAN ACTUALLY MONETIZE THAT TAX CREDIT. OKAY, THAT MAKES SENSE. SO THEY'RE GETTING THE TAX CREDIT ON THEIR SIDE. IF THEY DO A PPA WITH THEM AND THEY BUILD IT, THEY GET THE TAX CREDIT. YES, IT'S BUILT INTO THE PRICE. YES. OKAY.

UNDERSTOOD. THANK YOU. SO AGAIN, AS AS DANIEL MENTIONED, THIS ERP PLAN IS VERY MUCH DEPENDENT ON CHANGES TO LOAD FORECASTS. SO THAT'S WHY, YOU KNOW, AS DANIEL WAS SAYING FOR THE BLOCK PURCHASES, THE QUANTITIES WE RECOMMENDING DON'T COVER ALL THE YEARS. WE'RE SAYING THAT, YOU KNOW, WHATEVER YOU CERTAIN IS GOING TO BE THERE FOR SOME TIME, YOU KNOW, BUY IT FOR THAT BECAUSE YOU GET THE BENEFIT INSTEAD OF BUYING MONTHLY IN CHUNKS, IN PIECES, BUYING THESE LARGER BLOCKS WILL GIVE YOU A LOWER COST FOR YOUR PORTFOLIO. AND THEN WE STILL THINK THAT YOU SHOULD BE LOOKING INTO. SO THAT WAS OUR SORT OF RECOMMENDATION, AN IMMEDIATE ACTION PLAN. BUT FOR FUTURE REEVALUATION. REEVALUATION, WE DO THINK THAT YOU STILL NEED TO KEEP LOOKING AT THE 1 TO 2 HOUR BATTERIES BEHIND THE METER BECAUSE OF THE THE TRANSMISSION COST SAVINGS AND THE TRANSMISSION COSTS ARE SKYROCKETING IN ERCOT. YOU KNOW, WE HAVE HUGE AMOUNTS OF TRANSMISSION THAT'S BEING BUILT. THE 765, YOU KNOW, INFRASTRUCTURE THAT'S BEING BUILT OUT, THAT'S GOING TO ALSO SIGNIFICANTLY INCREASE YOUR TRANSMISSION COSTS. SO IT DOES MAKE SENSE TO KEEP LOOKING AT THAT. AND IN ANALYSIS, AGAIN, WE DIDN'T TAKE THE 30% ITC. WE WERE JUST BEING VERY CONSERVATIVE. AND THAT MAKES IT EVEN MORE ATTRACTIVE. AND THAT CAN HEDGE YOUR ENERGY AS WELL AS NOT ALL YOUR ANCILLARY SERVICE, BUT AKERS AND NON SPIN. ANCILLARY SERVICES. NATURAL GAS PEAKER. AGAIN CURRENTLY IT'S NOT ECONOMICAL BUT IT MAY CHANGE IF THERE IS A CHANGE TO THE REGULATION. YOU KNOW, HOW DOES DISPATCHABLE RELIABILITY RESERVE SERVICES IMPLEMENTED. SO WE WOULD SAY JUST MONITOR THAT AND EXPLORE POTENTIAL PPA IF IT BECOMES ECONOMIC IN THE FUTURE. NATURAL GAS IS A LITTLE BIT MORE COSTLY AND TRICKIER, YOU KNOW, SO THE BATTERIES ARE A REALLY GOOD FIT FOR YOUR PORTFOLIO AT THIS TIME. SO THAT'S I THINK ALL I HAD. YEAH. ANY MORE QUESTIONS? WHAT KIND OF TERM DO YOU DO YOU SEE OUT THERE OR WOULD YOU EXPECT OR MAYBE GO LOOK FOR, FOR OUR SITUATION FOR A PPA, FOR THE FOR THE BATTERIES. IS THAT A THREE YEAR TERM, FIVE YEAR TERM, USUALLY MORE THAN FIVE, TEN, 15 ARE THE COMMON TERMS. AND DO THOSE TYPICALLY HAVE. I GUESS THOSE CONTRACTS HAVE VERBIAGE IN THEM ABOUT UPDATING AND TECHNOLOGY BECAUSE I. I WOULD THINK A BATTERY THAT WAS BUILT TODAY USING TECHNOLOGY TODAY AND ALL OF THE RESOURCES BEING PUT INTO TRYING TO IMPROVE THAT 10 TO 15 YEARS FROM NOW WOULD BE A VERY OBSOLETE BATTERY, MOST LIKELY. RIGHT? MAKING AN ASSUMPTION. BUT YEAH, SO TYPICALLY WHAT THEY DO IS, YOU KNOW, THEY'RE GOING TO GUARANTEE YOU SOME AMOUNT OF STORAGE IN THE BATTERIES AND STUFF. SO THEY WILL OVERBUILD IT INITIALLY SO THAT THEY CAN KEEP PROCURING, BUT THEY CAN ALSO REPLACE BATTERY CELLS AS THEY GO ALONG. BUT TYPICALLY YOU WON'T SEE A WHOLESALE, YOU

[01:55:05]

BUT AGAIN, IT'S LOWER. THE MAIN MANUFACTURERS OF BATTERIES, OF COURSE, CHINA AND THEIR COSTS HAVE REALLY GONE DOWN. BUT YOU HAVE IMPORT TAX AND YOU DON'T GET ITC FOR THOSE BATTERIES. SO YOU HAVE A TRADE OFF IF YOU MAKE IF YOU BUY THE US MADE, IT'S GOING TO COST YOU MORE.

BUT YOU GET THE ITC BENEFIT. AMAZON HAS DOUBLE A BATTERIES REALLY CHEAP AND YOU GET A WHOLE BUNCH OF THEM. SO I DON'T KNOW HOW THOSE TOGETHER. THANK YOU. SURE DOES THE WIDE ADOPTION OF LIKE WHOLE HOME BATTERY SYSTEMS LIKE BASE IS ONE OF THEM. TESLA WALL BATTERIES, IF THAT'S WIDELY ADOPTED, DOES THAT HELP OR DOES THAT HURT OUR FORECASTING AS IT FEEDS BACK INTO THE GRID? SO TYPICALLY THOSE BASE POWER DOES CONTROL THEM. YOU KNOW, SO IN THAT CASE, IT DOES BENEFIT YOUR PORTFOLIO. BUT IF A HOMEOWNER IS JUST PUTTING IT ON, I MEAN, THEY'LL GET THE RESILIENCY. YOU KNOW, WHEN THE POWER GOES OUT, THEY'LL HAVE POWER AND STUFF, BUT THEY'RE NOT DESPERATE. LIKE IF THE POWER DOESN'T GO OUT, THEY DON'T DO ANYTHING WITH IT.

IT JUST SITS THERE, YOU KNOW? SO YOU WOULD NEED SOME SORT OF AN ENTITY THAT ACTUALLY CONTROLS IT AND CAN ACTUALLY CHARGE AND DISCHARGE WITHIN THE DAY TO BENEFIT YOUR PORTFOLIO, YOU KNOW, BUT YEAH, JUST PUTTING UP A. LIKE A POWERWALL THING OR, OR A BATTERY, IT WON'T HELP YOUR SYSTEM EXCEPT THE CUSTOMER SPECIFIC. WHEN THE LIGHTS GO OUT, THEY WILL STILL HAVE LIGHTS, YOU KNOW. ANY OTHER QUESTIONS? ALL RIGHT. THANK YOU GUYS. ANY OTHER FEEDBACK Y'ALL NEED FROM US OR READY TO MOVE FORWARD? AWESOME. THANK YOU ALL SO MUCH. OKAY.

THANKS. ALL RIGHT. DAN, YOU'RE STAYING UP FOR THE RIGHT AUDIENCE. YEAH. YOU GUYS ARE NOT TAKING A BREAK.

[1.D Electric Rate Ordinance Updates]

FOR STARTERS, VERY LARGE CNI STANDS FOR VERY LARGE COMMERCIAL AND INDUSTRIAL CUSTOMERS. AND THESE ARE CUSTOMERS WITH INSTALLED CAPACITY OF 10MW TO 50MW. AND WE HAVE CURRENTLY WE HAVE ABOUT THREE CUSTOMERS WHO FALL INTO THAT CATEGORY BEFORE I, I GO INTO THIS AT LENGTH, ABOUT 2 OR 3 YEARS AGO, WE ACTUALLY STARTED IDENTIFYING WHAT ARE THE RISKS ASSOCIATED WITH VERY LARGE LOAD CUSTOMERS. SOME OF THE RISKS THAT. MR. PITTS, YOU WERE TALKING ABOUT, THE OPPORTUNITIES AND THE RISKS. WE'VE ACTUALLY IDENTIFIED THEM AND STARTED WORKING ON THEM. SOME OF THE RISKS ARE ONE FROM A REVENUE CONCENTRATION WAS ONE, THE RECEIVABLES IS ANOTHER RISK. FOR EXAMPLE, AN AVERAGE RESIDENTIAL CUSTOMER MAY PAY THEIR ELECTRIC BILL MAYBE $100 OR $120. THESE CUSTOMERS, THEIR AVERAGE BILL MAY RUN ABOUT HALF $1 MILLION. SO WE WE WANTED TO WE STARTED TAKING A LOOK AT WHAT ARE THE DEPOSIT REQUIREMENTS SO THAT THERE IS NOT A RISK ASSOCIATED WITH THEIR RECEIVABLES. WHAT KIND OF

[02:00:01]

RECOVER THE COST, THE INCREMENTAL COSTS OF HEDGING THE VERY LARGE CNI CUSTOMERS.

AND THE IDEA BEING WE WANT TO BUY ENERGY JUST FOR THEM AND THE COST OF BUYING ADDITIONAL ENERGY TO SERVE THESE CUSTOMERS SHOULD BE PAID BY THESE CUSTOMERS, BY THE VERY LARGE CNI CUSTOMERS. SO THAT'S THE INTENT OF THE OF THE ENERGY RATE RIDER. THE. AND LAST YEAR WHEN WE WE USED A CONSULTANT TO DEVELOP THAT. AND WHEN WE DEVELOPED IT, THE RATE WAS 8.2 CENTS PER KILOWATT HOUR. AND THE. THE IDEA WAS TO CHARGE THIS RATE RIDER BUILD. AN ACCOUNT BALANCE, AND THE ACCOUNT BALANCE WILL BE USED TO OFFSET THE HEDGING COSTS. THIS IS A FORMULA. THIS LOOKS VERY, VERY COMPLEX. BUT ONE YEAR DOWN THE ROAD WHAT WE'VE DONE IS, IS WE WENT BACK AND REVIEWED THE FORMULA TO SEE HOW IT IS PERFORMING. AND WE IDENTIFIED A FEW ISSUES THAT NEEDED TO BE FIXED. FOR STARTERS, WE NEEDED TO REVISE THE ENERGY RATE RIDER FORMULA. PREVIOUSLY IT WAS REVENUES MINUS COSTS. WE WANTED TO CHANGE IT TO COST MINUS REVENUES. THAT ACTUALLY IDENTIFIES THE ADDITIONAL REVENUE THAT IS NEEDED TO RECOVER THE COSTS. THE SECOND BIG CHANGE, AND THIS IS A BIG FUNDAMENTAL CHANGE, WAS LAST YEAR WHEN WE DEVELOPED THE FORMULA. WE WE WORKED OFF THE ASSUMPTION THAT THESE CUSTOMERS WILL BE FED OFF OF THESE BLOCKS OF ENERGY THAT SHAMS WAS TALKING ABOUT. BUT IN PRACTICE, WE DON'T GO AND BUY BLOCKS OF ENERGY JUST FOR THESE CUSTOMERS, OR WE ACTUALLY HAVE PPAS THAT ARE BEING USED, THE WIND FARM AND THE SOLAR FARM AND THE ENERGY FROM THOSE ARE ALREADY BEING USED TO SERVE THESE CUSTOMERS. SO WE STARTED ASSIGNING THE COST OF THESE PPA PPAS TO THESE CUSTOMERS AS WELL. AND THERE WAS AN ISSUE WITH THE FORMULA OF DOUBLE COUNTING THE HISTORICAL DATA. SO WE FIXED THAT AS WELL. SO WE WE SIMPLIFIED THE FORMULA FOR THE SAKE OF THE RATE ORDINANCE ITSELF. NOW THE NEW FORMULA IS GOING TO BE THE INCREMENTAL POWER COST MINUS THE ENERGY REVENUES PLUS THE TARGET BALANCE. THE KEY CHANGES ARE EXPLICIT INCLUDE INCLUSION OF LOAD RATIO, SHARE OF PPA, NET SETTLEMENTS OR COURT FEES, AND MISCELLANEOUS COSTS. SO IN THE EARLIER FORMULA, WE WERE NOT INCLUDING ALL OF THIS ELIMINATION OF DOUBLE COUNTING AND THE CHANGES, WHATEVER CHANGES WE WORKED. ACTUALLY, IT'S MY TEAM, THE SAME TEAM WHICH WORKED ON UPDATING THE FORMULA, BUT AS A PRACTICE OF AS A AS A BEST PRACTICE, WE'VE ASKED TWO SEPARATE CONSULTANTS TO REVIEW OUR WORK AS WELL. SO BASED ON THE NEW UPDATED THE UPDATED ENERGY RATE FORMULA, WHICH ALSO INCLUDED THE NEW COSTS. BECAUSE LAST YEAR TO THIS YEAR, THE FORWARD PRICES HAVE GONE UP, ESPECIALLY WITH ALL THE LOAD THAT IS HAPPENING. SO WE'VE WE'VE UPDATED THE COSTS. AND BASED ON THAT, THE NEW RATE RIDER IS ABOUT 1.1 CENT PER KILOWATT HOUR. THAT'S ABOUT 1.9% INCREASE. THAT WILL RESULT IN ABOUT 1.9% INCREASE IN REVENUE FROM THE VERY LARGE LOAD CNI CUSTOMERS. SO THE TAKEAWAY IS, IS THE ENERGY RATE RIDER, WHICH USED TO BE 8.8.2 CENTS, CORRECT, 8.28.2 MILS OR 0.0.08 $2 PER KILOWATT HOUR, 8.2 MILS. IT WENT UP TO 1.1 MIL. AND THIS IS JUST AN INCREASE ONLY FOR THE VERY LARGE LOAD CNI CUSTOMERS. AND THIS INCREASE WILL ACTUALLY HELP US HAVE THIS THIS ACCOUNT BALANCE TO ACCOUNT FOR ANY MARKET VOLATILITY THAT WE MAY SEE. LET ME STOP HERE AND ASK AND SEE IF THERE ARE ANY QUESTIONS ON THIS. OKAY. THE NEXT THING IS EVERY

[02:05:09]

SO THIS IS A ONE TIME SETUP FEE. IT IT'S GOING UP FROM 25,600 TO 27,300. AND THIS IS NOT A SIGNIFICANT JUMP BECAUSE IT'S JUST THE LABOR COSTS THAT HAVE THAT HAVE GONE UP. ANY QUESTIONS ON THIS. SO THIS NEXT ONE IS THE CREATION OF WHAT IS CALLED A MONTH TO MONTH RATE.

THE VERY LARGE LOAD CUSTOMERS IN ORDER TO PROTECT THE CITY AND THE REST OF THE RATEPAYERS, WE WE REQUIRE THEM TO GET INTO AN ELECTRIC ENERGY SERVICE AGREEMENT. AND. THESE ENERGY SERVICE AGREEMENTS TAKE A LONG TIME TO NEGOTIATE AND TO PUT IN PLACE. BUT IF THERE IS FOR SOME REASON, THERE IS A. IF WE CANNOT GET INTO AN EXECUTE AN ENERGY SERVICE AGREEMENT, WE ARE STILL REQUIRED TO PROVIDE THEM ELECTRIC SERVICE BECAUSE THAT'S THE PURE. SECTION 37.151 REQUIRES THAT WE PROVIDE SERVICE. IF THEY ARE ON OUR CCN, WE ARE REQUIRED TO PROVIDE THEM SERVICE, BUT WITHOUT THE ENERGY SERVICE AGREEMENT, WE DON'T HAVE THE KIND OF PROTECTION THAT WE THAT WE TYPICALLY HAVE THE PROTECTIONS LIKE THEY'RE SUPPOSED TO PROVIDE US. THE ENERGY SERVICE AGREEMENT REQUIRES THEM TO PROVIDE THEM, PROVIDE US WITH A ENERGY FORECAST, THE ENERGY SERVICE AGREEMENT, AND THE RATE ORDINANCE REQUIRES THEM TO POST SIX MONTHS OF COLLATERAL. WITHOUT THIS ENERGY SERVICE AGREEMENT IN PLACE, WE DON'T HAVE THOSE KINDS OF SAFEGUARDS IN PLACE. BUT AT THE SAME TIME, WE WE JUST CANNOT SAY BECAUSE WE DON'T HAVE AN ENERGY SERVICE AGREEMENT. WE CANNOT PROVIDE YOU ELECTRIC SERVICE. SO THAT'S THE REASON WHY WE COME UP WITH WHAT IS CALLED A MONTH TO MONTH RATE. THE IDEA HERE IS, IS THE MONTH TO MONTH RATE WILL HAVE A RISK PREMIUM BUILT INTO THE ENERGY RATE THAT THEY PAY. AND

[02:10:04]

HOPEFULLY THAT'S AN INCENTIVE FOR THE CUSTOMERS TO GET INTO ELECTRIC ENERGY SERVICE AGREEMENT. DANIEL, DO WE HAVE ANY OF THESE. DO WE HAVE ANY VERY LARGE CUSTOMERS UNDER THIS SCENARIO RIGHT NOW? NO WE DON'T, BUT THIS IS JUST THINKING AHEAD. WE DON'T. AND THE THE WAY WE CAME UP WITH THAT RATE WAS TODAY ERCOT'S CAP IS $5,000. THAT'S HOW HIGH THE ENERGY CAN GO UP TO. SO IF IF THEY DON'T PROVIDE US THE. THE ENERGY RATE FOR I MEAN, THE THE FORECAST.

AND IF WE ARE IF WE DON'T HAVE THE ABILITY TO HEDGE ON THEIR BEHALF. AND IF WE DO GET EXPOSED, WHAT IS THE MAXIMUM EXPOSURE WE HAVE? AND USING THAT MAXIMUM EXPOSURE, WE CAME UP WITH THIS RATE. BUT THE GOOD NEWS IS WE DON'T HAVE ANYBODY LIKE THAT. YES, MA'AM. SO THAT'S GOOD NEWS THAT WE DON'T HAVE ANYONE THAT'S NOT WILLING TO DO. THAT'S A BUT I MEAN, WHY WOULD THERE BE SOMEONE WHO WOULD BE WHO WOULD NOT WANT THAT? I MEAN, TO ME, THAT WOULD BE A RED FLAG THAT THEY'RE NOT WILLING TO DO AN S A YEAH, IT IS A RED FLAG. BUT WE JUST CANNOT SAY, HEY, WE HAVE A RED FLAG. WE'RE NOT GOING TO SERVE YOU. RIGHT. SO WE HAVEN'T COME ACROSS A SCENARIO LIKE THAT. BUT THE, THE OUTSIDE COUNSEL THAT WE ENGAGED TO ADDRESS THESE KINDS OF THINGS, THEY SUGGESTED WE HAVE A PROVISION LIKE THIS. OKAY. SO MOST OF THE TIME, HOPEFULLY THEY'RE GOING TO COMPLY. BUT IF NOT, THIS IS OUR THIS IS OUR FAILSAFE. OKAY.

YEAH. AND SOMETIMES IT CAN BE A SITUATION WHERE WE'RE IN THE MIDDLE OF LIKE, WE'VE GOT SERVICE, BUT WE'RE STILL FINALIZING AND NEGOTIATING AN ESA. SO IT IS AN INCENTIVE TO GET, GET THE YEAH, GET THE AGREEMENT DONE. SO THIS IS A GOOD. GOOD INCENTIVE. I DON'T WANT TO USE ANY ANY OTHER WORD WHEN WE SAY, HEY, BY THE WAY, IF YOU DON'T HAVE THIS AGREEMENT IN PLACE BY THE END OF. BECAUSE WE HAVE TO TAKE IT TO THE COUNCIL. IF NOT, WE'LL HAVE TO PLACE YOU ON THIS RATE. ALL OF A SUDDEN, THINGS START MOVING PRETTY QUICKLY WITH THAT COUNCIL. SO WE'VE SEEN THIS WORK. DANIEL, IF ANYBODY WENT THIS ROUTE, WHERE WOULD THIS MONEY GO? BECAUSE THIS IS MONEY TO HEDGE RISK. DO WE HAVE A POT THAT WE PUT IT IN AND SAY, THIS IS OUR RISK HEDGE AMOUNT, BECAUSE THIS PERSON DOESN'T WANT TO SIGN A CONTRACT OR HOW WHERE'S I DON'T WANT A SLUSH FUND. I WANT SOMETHING THAT IS ACCOUNTED FOR. HOW DO WE DO? WE DO THAT? IF SOMEBODY SAYS, I WANT TO PAY THE EXTRA MONEY, IT'S PROBABLY GOING TO GO INTO WHAT IS CALLED THE RATE STABILIZATION RESERVE. WE DO HAVE A RESERVE FOR RATE STABILIZATION, OKAY. BUT THAT'S WHERE IT WILL PROBABLY END UP. OKAY. THANK YOU. THANKS. ANY MORE QUESTIONS ON THE MONTH TO MONTH FOR THE VERY LARGE CNI CUSTOMERS? THIS ONE ALSO IS RELATED TO THE VERY LARGE LOAD CUSTOMERS. WE ARE EXPLICITLY CALLING OUT THAT THESE VERY LARGE LOAD CUSTOMERS, SOMETIMES THEY WANT REDUNDANT FEEDS, FEEDERS, ELECTRIC SERVICE COMING FROM TWO DIFFERENT SUBSTATIONS, IN SOME CASES, SAME SUBSTATION, DIFFERENT TRANSFORMERS. AND WHAT WE ARE EXPLICITLY CALLING OUT IS, IS THE STANDARD SERVICE DOESN'T GUARANTEE THAT IF THEY WANT THAT KIND OF SERVICE, THEY HAVE TO PAY FOR IT. THAT'S WHAT THIS CHANGE IS STATING. CONDITIONS FOR CAPACITY GUARANTEES, ESPECIALLY WITH THE VERY LARGE LOAD CUSTOMERS. AND THIS IS A WHAT WE ARE DOING WITH THESE VERY LARGE LOAD CUSTOMERS. WE ARE LEARNING ON THE FLY AND TRYING TO BE AS QUICK AS POSSIBLE IN MAKING THESE CHANGES. WHAT WE ARE SEEING IS, IS SOMETIMES THEY THE PROCESS STARTS BY. THEY'RE TURNING IN WHAT IS CALLED A LINE EXTENSION APPLICATION, WHERE THEY SAY, WE WANT 50MW OF CAPACITY FROM YOU GUYS AND THEY PAY THE LINE EXTENSION FEE, BUT THEY ARE NOT EXECUTING THE ELECTRIC SERVICE AGREEMENT, OR THEY THINK THAT 50MW OF CAPACITY IS GUARANTEED. SO NOW WHAT WE ARE SAYING IS WE ARE CLEARLY CALLING OUT, WHAT ARE ALL THE CONDITIONS THAT NEED TO BE MET IN ORDER FOR US TO, TO GUARANTEE THEM THAT CAPACITY? BECAUSE IF THERE ARE TWO CUSTOMERS AND IF ONE CUSTOMER MOVES FAST IN EXECUTING EVERYTHING AND ANOTHER CUSTOMER DOESN'T MOVE,

[02:15:05]

[02:20:04]

YES, SIR, I DID ANY. GOOD. YEAH. SO I MEAN, MY QUESTION IS MAYBE LESS RELATED, BUT. SO WHEN WHEN YOU HAVE VERY LARGE LOAD CUSTOMERS WHO ARE DOING THEIR INITIAL. I'M GUESSING WE'RE IF WE'RE UPGRADING INFRASTRUCTURE. FOR THEM, ARE WE CAPITALIZING THAT INFRASTRUCTURE OR ARE WE TYING THAT INTO A COST ASSOCIATED WITH AN IMPACT FEE? IF WE, HOW ARE WE, HOW, HOW ARE WE HANDLING THAT? GOOD. YEAH. INFRASTRUCTURE COST ON THE FRONT END. SO THEY PAY FOR 100% OF THE COST. BUT WHEN WHEN YOU SAY CAPITALIZING, ARE YOU TALKING ABOUT FROM AN ACCOUNTING POINT OF VIEW, I MEAN, ON THE ARE WE ARE WE CHARGING? IF WE'RE UPGRADING A LINE FOR A LARGE LOAD USER OR, YOU KNOW, ADDING A SERIES OF, OF POINTS OF CONNECTIONS AND TRANSFORMERS ARE, IS THAT CUSTOMER PAYING FOR THAT ON THE FRONT END AS THEY'RE GETTING? OKAY. YEAH, ABSOLUTELY. OKAY. AND I THINK THAT'S. I MEAN, WE CAN SAY, I MEAN, WE PUT IN THIS LINE EXTENSION POLICY, WHICH GOVERNS HOW CUSTOMERS ARE CONNECTED TO THE SYSTEM AND HOW THEY PAY FOR THEIR ACCESS TO THIS, TO THE ELECTRIC SYSTEM. AND I WILL SAY FROM 2019 ONWARDS, WHEN WE PUT THE NEW POLICY IN PLACE, ALL CUSTOMERS TILL THIS DAY PAY 100% OF THEIR COST. AND SINCE WE HAD THAT POLICY IN PLACE FOR ALMOST SIX YEARS NOW, AND THAT POLICY WAS RECOVERING 100% OF THE COST OF ALL THE KINDS OF CUSTOMERS, IT WAS NOT A BIG NEW THING THAT WE HAD TO IMPLEMENT THESE LARGE CUSTOMERS, JUST LIKE A SMALL, SMALL CUSTOMER WHO IS JUST BUILDING A ONE LOT THING. IT'S THE EXACT SAME PRINCIPLE. YOU PAY 100% OF YOUR COST OF PROVIDING YOU WITH ALL THE INFRASTRUCTURE THAT IS NEEDED TO PROVIDE SERVICE TO YOU. SO BE IT A RESIDENTIAL, SUBDIVISION, MULTIFAMILY, OR A 50 MEGAWATT MANUFACTURING FACILITY. THE PRINCIPLE IS THE SAME ACROSS. THEY PAY 100% OF THEIR COSTS. OKAY, JUST A QUESTION AROUND. SO I THINK YOU SAID THERE WAS CURRENTLY THREE OF THESE CUSTOMERS. AND I KNOW THAT WE'RE LOOKING AT, YOU KNOW, MULTIPLE OTHER, YOU KNOW, ENTITIES COMING INTO THE CITY.

DO WE ANTICIPATE A NUMBER OF WHO WE SEE JOINING THIS CLASS OF CUSTOMER OR. I THINK RIGHT NOW WE ANY GIVEN TIME, I THINK CAMERON SENDS AT LEAST A COUPLE OF EMAILS A WEEK SAYING THAT SOMEBODY ELSE IS LOOKING AT IT. BUT. THERE ARE SOME OF THE TAIWANESE COMPANIES, THEY HAVE RAMP SCHEDULES THAT WILL ACTUALLY PUSH THEM INTO THIS CLASS. OKAY. AND THEN, YEAH, THERE ARE SOME MORE SOUTH OF TOWN THAT WE ARE LOOKING AT. SO ALL SAID AND DONE, MAYBE ABOUT TEN, 12. OKAY. WITHIN THE NEXT COUPLE YEARS, PROBABLY WE'RE NOT LOOKING AT ADDING, YOU KNOW, LIKE HUNDREDS OF THESE JUST FOR THE RECORD. I MEAN, THERE'S NOT LOTS OF THESE CUSTOMERS, I

[02:25:04]

YOU KNOW, DAVID MENTIONED TO ME YESTERDAY CONSERVATION RATES AND SOME THINGS LIKE THAT. SO I'M HOPEFUL THAT, YOU KNOW, ON THE COMMERCIAL SIDE. YES. THANKS, DAVID. SO, YOU KNOW, JUST SO THAT WE CAN ANSWER SOME OF THESE QUESTIONS AROUND, I THINK CONCERNS THAT, YOU KNOW, PEOPLE ARE EXPRESSING, WHETHER THEY'RE UNFOUNDED. I THINK THERE IS A LOT OF MISINFORMATION OUT THERE RIGHT NOW. AGAIN, THE NUMBERS THAT YOU JUST QUOTED, THERE'S NOT HUGE NUMBERS OF THESE CUSTOMERS COMING INTO THE CITY. BUT I THINK US BEING PROACTIVE ABOUT LOOKING AT BOTH THE WATER AND THE ELECTRIC SIDE AND MAKING SURE THAT, YOU KNOW, THOSE THOSE CUSTOMERS ARE PAYING THEIR FAIR SHARE IS APPRECIATED. SO THANK YOU. THANKS. ANY OTHER NO, NO FURTHER QUESTIONS. I'M GUESSING ON THIS ONE. I THINK WE'RE GOOD. ARE YOU STANDING UP FOR THE LINE EXTENSION POLICY. SORRY. YOU WANT TO GO TO THAT? YEAH. LET'S GO AHEAD AND ROLL.

OKAY. YEAH, SURE. ACTUALLY, THAT'S EVEN MORE SIMPLER. OKAY. YOU WANT TO TAKE A BREAK? NO, I.

I KNOW, AND I CAN'T HANDLE IT TILL TONIGHT. IF YOU WANT TO MOVE IT TO MIDNIGHT TONIGHT.

[1.E Line Extension Policy Updates]

THIS THIS REALLY HELPS US RECOVER OUR COSTS AS FAR AS GROWTH IS CONCERNED. ACTUALLY, ON MAY 26TH, THIS POLICY WAS UPDATED AND APPROVED. BUT WE FOUND ONE ISSUE THAT WE NEEDED TO BRING IT BACK TO YOUR ATTENTION. THE ERCOT MARKET IS CHANGING AS WE SPEAK ON A DAILY BASIS. AND ABOUT THREE WEEKS AGO, ERCOT ACTUALLY STARTING TO REQUIRE FINANCIAL SECURITY AND NONREFUNDABLE INTERCONNECTION FEE FOR THESE VERY LARGE LOAD CUSTOMERS. SO THE FINANCIAL SECURITY IS 50,000 PER MEGAWATT, AND THE NONREFUNDABLE INTERCONNECTION FEE IS 50,000 PER PER MEGAWATT. WHAT THIS IS DOING IS, IS NOW ALL OF US. IN THE PAST, IT WAS NOT A COMPLICATED DECISION FOR A LARGE, VERY LARGE LOAD CUSTOMER TO EITHER CONNECT TO THE TRANSMISSION GRID OF ERCOT OR BUILD A MICROGRID AND HAVE BEHIND THE METER GENERATION.

BUT NOW THEY MAY DECIDE NOT TO CONNECT TO THE TRANSMISSION GRID AND HAVE BEHIND THE METER GENERATION. SO WHAT THE RISK FOR US IS, IS THERE MAY BE A CUSTOMER WHO MAY WANT TO COME AND WANT A 50 MEGAWATT SERVICE. AND WE WERE WE WERE ONLY CHARGING THEM OR PROPOSING TO CHARGE THEM $9,312. AND THEN OR WE WERE GOING TO CHARGE THEM 8800 FOR THE INITIAL MEGAWATT AND 4400 FOR FOR EVERY ADDITIONAL MEGAWATT, WITH THE UNDERSTANDING THAT WHEN THEY COME BACK, WE CAN RECOVER THE REST OF THE COST. BUT WE SEE WE FEEL THAT THERE IS A RISK FOR CUSTOMERS. NOT GOING AHEAD WITH THEIR LINE EXTENSION POLICY ONCE THEY SEE THE COST. SO WE DON'T WE WANT TO FULLY RECOVER THE COST OF INTERCONNECTION STUDIES UPFRONT. WITH THAT IN MIND, WE ARE ACTUALLY TAKING OUT THE DISCOUNT. FOR EXAMPLE, IF IT IS A LET'S SAY, IF IT IS A 2020 MEGAWATT LOAD, EVERY EVERY MEGAWATT, THEY HAVE TO PAY $9,312 FOR THE LINE EXTENSION APPLICATION FEE. THAT IS A BIG CHANGE. THAT IS A SMALL CHANGE, BUT CAN HAVE SIGNIFICANT IMPACT FROM A DOLLARS POINT OF VIEW BECAUSE WE ARE STARTING TO SEE MORE CUSTOMERS COMING IN IN THE 5000 MEGAWATT RANGE, AND WE WANT TO MAKE SURE THAT WE ARE FULLY RECOVERING ALL THEIR COSTS. THAT IS A BIG CHANGE. THAT IS A CHANGE IN THE POLICY THAT I WANTED TO BRING UP. THAT'S THE ONLY CHANGE. THAT'S THE ONLY SLIDE I HAVE ON THAT. ANY QUESTIONS ON THAT? ANY QUESTIONS ON IT? PERFECT. OKAY. THANKS. THANK YOU DANIEL.

[Executive Session]

[02:30:02]