Closed Caption Log, Council Worksession
Wednesday, August 21, 2002

Note: Since these log files are derived from the Closed Captions created during the Channel 6 live cablecasts, there are occasional spelling and grammatical errors. These Closed Caption logs are not official records of Council Meetings and cannot be relied on for official purposes. For official records or transcripts, please contact the City Clerk at (512) 974-2210.

... . RATHER THAN TO OUR BUDGETED EXPENDITURES FOR 2002, PARTICULARLY IN THE GENERAL FUND DEPARTMENTS. REMEMBER WHY WE ARE DOING THAT. WE ARE DOING THAT BECAUSE WE WANT TO FOCUS ON COMPARING OUR 2003 PROPOSAL WITH THE ACTUAL BUDGET WE WERE ABLE TO IMPLEMENT IN 2002. NOT THE APPROVED BUDGET THAT WE WERE NEVER ABLE TO IMPLEMENT BECAUSE OF THE SAVINGS GOALS. SECOND, WE SET THE GOAL OF OPERATING AS LEAN AS POSSIBLE ADMINISTRATIVELY. THIS WAS DONE TO DEMONSTRATE TO THE COMMUNITY THAT WE WOULD FIRST CUT ADMINISTRATION AND MANAGEMENT BEFORE CUTTING DIRECT SERVICES. ALTOGETHER WE CUT OVER 17 MILLION IN ADMINISTRATIVE AND MANAGEMENT COSTS. ONCE AGAIN, YOU WILL SEE THIS REFLECTED IN THE PRESENTATIONS THAT YOU WILL HEAR TODAY. ONCE AGAIN, PARTICULARLY IN THE GENERAL FUND DEPARTMENTS. WHEN YOU SEE THE TYPE OF EXPENDITURE REDUCTIONS THAT WERE USED TO CLOSE THE GAP, A CONSCIOUS DECISION WAS MADE TO FOCUS ON THE ADMINISTRATIVE REDUCTIONS WE WILL DETAIL. THIRD, REQUIRING EACH DEPARTMENT TO WORK MORE EFFICIENTLY. THIS INCLUDES PROCESS IMPROVEMENTS, CONSOLIDATIONS, AUTO NATION, MAKING SURE -- AUTO AUTOMATION MAKING SURE THAT WE ARE MAXIMIZING SERVICE DELIVERY. I POINT THAT OUT BECAUSE EACH PRESENTATION WILL ALSO HIGHLIGHT KEY PROCESS IMPROVEMENTS THAT WE WILL USE TO CLOSE THIS GAP. ADDITIONALLY, WE WILL HIGHLIGHT AREAS, ONCE AGAIN IN, PARTICULARLY IN THE GENERAL FUND DEPARTMENTS, WHERE WE HAVE BEEN ABLE TO LEVERAGE COMMUNITY RESOURCES AND THE USE OF VOLUNTEERS TO AUGMENT OUR SERVICE LEVELS. THIS IS PART OF OUR JOINTS PARTNERSHIP WITH THE CITIZENS OF THIS CHOWN TEE AS WE GO THROUGH -- COMMUNITY AS WE GO THROUGH THIS PROCESS. FOURTH AND FINALLY, I WANTED TO BALANCE THE BUTT WITHOUT LAYOFFS -- BALANCE THE BUDGET WITHOUT LAYOFFS, WE WERE ABLE TO ACHIEVE THAT GOAL. NO EMPLOYEES WERE LAID OFF NOR DID ANY EMPLOYEE TAKE A PAY CUT. WE WERE ABLE TO DO THIS WITHOUT A TAX RATE INCREASE FOR THE CITIZENS OF AUSTIN. ONE LAST NOTE, ONCE AGAIN, PARTICULARLY WHEN WE GET TO THE GENERAL FUND DEPARTMENT, YOU WILL MOW SOME DISCUSSION OF THE CITIZENS -- YOU WILL NOTICE SOME DISCUSSION OF THE CITIZENS SURVEY. WE DO THIS IN THE SCORE CARD PART, HIGHLIGHTING THE AREAS WE WANT TO CHANGE IN THE CITIZENS SURVEY. IN ORDER FOR US TO BETTER DEFINE COMMUNITY PRIORITIES AND TO ACTUALLY SURVEY CUSTOMERS OF THE SERVICE AS OPPOSED TO A RANDOM SURVEY OF CITIZENS. SO THERE ARE A NUMBER OF THINGS THAT WE ARE GOING TO HIGHLIGHT FOR YOU THAT WE THINK ARE WEAKNESSES IN OUR DATA, IN OUR CITIZEN SURVEY THAT WE INTEND TO WORK ON IN '03 TO HAVE BETTER INFORMATION IN '04. WITH THAT I WILL TURN IT OVER -- JOE, ARE YOU GOING TO DO THE KICKOFF FOR US?

GOOD MORNING, I'M JOE CANALES, THE DEPUTY CITY MANAGER, THIS MORNING I'M PRESENTING AUSTIN ENERGY, WATER AND WASTEWATER AND PUBLIC WORKS. WITH ME TODAY IS MR. JUAN GARZA, MR. CHRIS LIPPY, MR. PETER REIKE. FIRST OF ALL, LET ME JUST POINT OUT SOME HIGHLIGHTS WITH RESPECT TO WHAT WE WILL BE SUBMITTING TO YOU THIS MORNING. THESE THREE DEPARTMENTS REPRESENT 61% OF OUR PROPOSED BUDGET FOR FISCAL YEAR '02-'03. THEY ALSO FULFILL THREE DISTINCT ROLES FOR OUR ORGANIZATION AND COMMUNITY. FIRST OF ALL, THEY PROVIDE BASIC SERVICES. AS YOU ALL KNOW THE TREATING OF WATER AND WASTEWATER, THE PROVIDING OF RELIABLE ELECTRIC SERVICE, AND MAINTAINING OUR STREETS ARE VERY IMPORTANT AND FULFILL THEIR CORE MISSIONS. SECONDLY, THEY ALSO SERVE AS PARTNERS WITH OUR BUSINESS COMMUNITY. WE REALIZE HOW WE CONDUCT OUR BUSINESS IMPACTS OUR CUSTOMERS, NOT JUST THROUGH THE QUALITY OF SERVICE WE PROVIDE, BUT THE COST EFFECT THAT WE HAVE ON OUR OPERATIONS. FINALLY, COMBINED, THESE DEPARTMENTS SERVE AS A MAJOR CONTRIBUTOR TO THE MAJOR ECONOMIC -- A MAJOR ECONOMIC CONTRIBUTOR. LAST YEAR WE PUMPED $140 MILLION INTO THE LOCAL AUSTIN M.S.A. THROUGH OUR CONSTRUCTION PROJECTS. THIS YEAR WE ESTIMATE THAT $149 MILLION OF CONTRACTS WILL BE RELEASED INTO OUR AREA. WE RECOGNIZE THE MAGNITUDE OF OUR RESPONSIBILITIES IN EACH OF OUR ROLES, THE BUDGETS THAT YOU WILL SEE THIS MORNING REFLECT A CAREFULLY CRAFTED EFFORT BY THE CITY MANAGER AND HER STAFF TO SUBMIT A BUDGET THAT NOT ONLY SUPPORTS OUR BASIC SERVICE REQUIREMENTS, BUT ALSO CHALLENGES US TO CAPTURE GREATER COST SAVINGS AND EFFICIENCIES. THESE DEPARTMENTS ARE POSITIONED TO ENTER THE NEW FISCAL YEAR EMPHASIZING GREATER EMPHASIS ON PROCESS IMPROVEMENTS, QUALITY ENHANCEMENTS AND IMPROVED MEANS OF DEPLOYING OUR STAFF. ALL THIS WE HOPE WILL TRANSLATE INTO LOWER OPERATING COSTS THAT CAN BENEFIT EVERYONE. NOW I AM PLEASED TO INTRODUCE MR. JUAN GARZA, WHO ALONG WITH THE OTHER DIRECTORS, WILL PROVIDE MORE DETAIL ON THEIR BUDGETS AND THE VARIOUS INITIATIVES WE PLAN FOR NEXT YEAR.

Futrell: LET ME JUMP IN FOR JUST A SECOND. YOUR HARD COPY HANDOUT IS A LITTLE OUT OF ORDER. IN CASE ANYONE IS CONFUSED, IF YOU WILL TAKE YOUR PACKAGE THAT STARTS WITH PUBLIC WORKS AND GO TO THE LAST SECTION, IN THERE, YOU WILL FIND THE AUSTIN ENERGY BEGINNING PRESENTATION.

IS EVERYBODY THERE? MAYOR AND MEMBERS OF THE COUNCIL, THANK YOU, GOOD MORNING. I'LL JUST GO REAL -- QUICKLY THROUGH THE SLIDES THAT WE HAVE BEFORE YOU. ESSENTIALLY OUR BUDGET IS FORMULATED AROUND FOUR BUSINESS GOALS, THAT'S RATE, STABILITY AND DEBT MANAGEMENT, SYSTEMS LIABILITY WHEN I'M FINDING MORE AND MORE IS THE ONE THING THAT OUR CUSTOMERS REALLY FOCUS ON; CUSTOMER SERVICE AND THEN CONCERN FOR THE ENVIRONMENT BEING GOOD STEWARDS OF OUR ENVIRONMENT. WE ARE PROPOSING NO INCREASE TO THE BASE RATE THIS YEAR. WE ARE PROPOSING SOME FEE INCREASES AND AN ADJUSTMENT TO THE FUEL CLAUSE, I WILL GET TO THAT LATER. WE EXPECT TO IMPROVE OUR POSITION WITH RESPECT TO OUR DEBT FUND AND THAT SHOULD PUT US IN GOOD POSITION TO -- FOR A RATE DECREASE BASICALLY A FOCUSED RATE DECREASE. WE ARE FOCUSING AGAIN TO FURTHER REDUCE OUR DELINQUENCIES AND IMPROVE ON OUR BAD DEBT COLLECTIONS. AND OF COURSE THE FOCUS IS OUR RETURN ON INVESTMENT TO THE COMMUNITY IN THE FORM OF THE TRANSFER TO THE GENERAL FUND. WITH RESPECT TO SYSTEM RELIABILITY, WE ARE FOCUSING GREAT EFFORTS ON THE SYSTEM MAINTENANCE, THE DATA ONE PROJECT THAT YOU ALL HAVE HEARD ABOUT AND FUNDED IN THE PAST, IS COMING TO A -- TO A COMPLETION. OUR IMPROVEMENTS TO THE SCDA, SYSTEM CONTROL AND DATA -- E.M.S. DOES NOT STAND FOR PARAMEDIC, ELECTRO MANAGEMENT SYSTEM, IT'S A NERVE CENTER OF THE UTILITY. WHEN THOSE ARE IN WE SHOULD KNOW PRECISELY WHERE OUTAGES ARE OCCURRING, WE SHOULD BE ABLE TO DEPLOY OUR RESOURCES A LOT QUICKER TO RESPOND AND KEEP OUR SYSTEM UP AS MUCH AS WE CAN. WE ARE IMPROVING WITH RESPECT TO CUSTOMER SERVICE, OUR RELIANCE ON THE INTERNET TO PROVIDE SERVICES TO OUR CUSTOMERS, ESPECIALLY THINGS SUCH AS LOAD MONITORING IN THE COMPLEX BUILDING THAT'S A PART OF IT. WE DO HAVE OPTIONS FOR OUR CUSTOMERS TO PAY THEIR BILLS BY USING THE INTERNET. IT'S SOMETHING THAT OUR -- THAT OUR FOLKS HAVE BEEN ASKING FOR. WITH RESPECT TO THE ENVIRONMENT, WE CONTINUE TO HAVE SOME OF THE BEST PROGRAMS IN THE NATION. OBVIOUSLY, THIS FURTHER REDUCES THE NEED FOR A -- FOR NEW PLANTS. THIS IS OUR PLANNING MISSION. PLANT EMISSIONS. JUST A QUICK OVERVIEW ON THE BUDGET ITSELF, ON SLIDE 3. REVENUES ARE EXPECTED TO BE SLIGHTLY DOWN THIS COMING YEAR. NOW, THIS IS PRIMARILY A FUNCTION OF THE WEATHER. THE -- WE DON'T EXPECT THIS KIND OF WEATHER TO CONTINUE INTO THE FUTURE. THIS SUMMER HAS BEEN A VERY, VERY UNUSUAL SUMMER. IT MORE THAN LIKELY WILL HAVE A MILD WINTER, SO WE ARE PROJECTING A VERY SLIGHT DECREASE IN REVENUES FOR NEXT YEAR. WE ARE ALSO PROJECTING, OBVIOUSLY BECAUSE OF THE LOWERED REVENUES, A -- A SMALLER OPERATING BUDGET FROM $848 MILLION THIS YEAR DOWN TO 829 FOR THE COMING YEAR. THE CAPITAL SPENDING PLAN, ON THE OTHER HAND, WE EXPECT THAT THEY WILL MOVE UP A LITTLE BIT BY ABOUT ACTUALLY $6 MILLION FROM 198 TO $204. IN TERMS OF OUR FULL-TIME EQUIVALENTS. EVEN THOUGH WE ARE FACING THE OPENING OF THE HOLLY -- I'M SORRY COMBINED CYCLE PLANT AT SAND HILL, ALSO THE OPENING OF OUR RISK MANAGEMENT PROGRAM, WE HAVE NOT ADDED ANY FULL-TIME EQUIVALENTS TO DEAL WITH THAT. ON SLIDE 4, JUST A QUICK LOOK AT OUR SOURCE OF FUNDS. AS YOU ALL KNOW, WE GET MOST OF OUR MONEY FROM THE RETAIL SALES, ELECTRICITY, THAT ACCOUNTS FOR $721 MILLION. WE DO GET SOME OTHER REVENUES. INTEREST EARNINGS, 10% INCOME, ENERGY SALES OUTSIDE THE SYSTEM, THOSE KINDS OF THINGS. BUT THEY ACCOUNT FOR $94 MILLION. LOOKING AT THE -- AT THE EXPENDITURE SIDE, THE USE OF FUNDS OVERALL, $829 MILLION, BY FAR THE BIGGEST CHUNK OF THE PIE THERE IS OPERATIONS AND MAINTENANCE. NOW, A BIG PART OF THE OPERATIONS AND MAINTENANCE BUDGET IS FUEL, WHICH WE HAVE NOT DISCLOSED IN RECENT YEARS FOR COMPETITIVE REASONS. AS YOU LOOK AT THAT PIE CHART, THE BIG COMPONENTS ARE THE CAPITAL PROGRAM, THE -- THE TRANSFER TO THE GENERAL FUND DEBT SERVICE AND O AND M. THE -- YOU MIGHT HAVE NOTICED THAT THE CAPITAL SPENDING PLAN WAS $204 MILLION, WHILE THIS SHOWS $117 MILLION TRANSFER. THIS IS THE CASH TRANSFER THAT WE ARE MAKING TO THE -- TO THE CAP IMPROVEMENT PROGRAM. THE CAPITAL IMPROVEMENT PROGRAM IS FUNDED BY DEBT, CASH TRANSFERS, INTEREST EARNINGS AND THEN SOME -- SOME CARRYOVER FROM PROJECTS THAT ARE COMPLETED AND HAVE LEFT SOME MONEY ON THE TABLE. ON PAGE -- ON SLIDE 6, SOME OF THE OPERATING BUDGET HIGHLIGHTS, AGAIN NO INCREASE TO THE BASE RATES, WE ARE -- WE DO HAVE THE TRANSFER TO THE GENERAL FUND AT $72.9 MILLION AT 9.1% AS PRESCRIBED BY THE CITY COUNCIL. WE HAVE OUR $117 MILLION TRANSFER TO THE CAPITAL PROJECT FUND IN LIEU OF ISSUING DEBT. OUR ENERGY CONSERVATION PROGRAMS CONTINUE TO TAKE UP A GOOD CHUNK OF OUR BUDGET, $23.4 MILLION. THERE. FURTHER HIGHLIGHT THE SECURITY MONITORING SYSTEM THAT -- THAT IS THE RESULT OF THE 9-11 INCIDENT LAST YEAR, WE CONTINUE TO SPEND MONEYS BOTH IN TERMS OF PEOPLE AND -- AND CAPITAL EQUIPMENT THAT WE NEED TO MORE CLOSELY MONITOR THE SAFETY AND SECURITY OF OUR INSTALLATIONS. ON THE CAPITAL BUDGET ON SLIDE 7, JUST TO POINT OUT, WE HAVE THE GREATER SHARE OF THE MONEY GOING TO THE COMBINED CYCLE PLANT AT SAND HILL IT'S $50 MILLION. 11.4 MILLION FOR HOLLY CLOSURE ACTIVITY. ESSENTIALLY THOSE ARE IMPROVEMENTS IN THE TRANSMISSION GRID TO ENSURE THAT WHEN WE SHUT DOWN UNITS ONE AND TWO FOR HOLLY, THAT WE WILL BE 100% ABLE TO DO THAT AND TO ENSURE FURTHER ON DOWN THE LINE FOR THE FUTURE, AS LATE AS 2009 WHICH IS WHAT THE CURRENT PLAN CALLS FOR, WE WILL BE PREPARED TO HANDLE THAT CLOSURE AND THERE SHOULD BE NO REASON WHY THE SYSTEM CANNOT HANDLE IT. I WON'T GO INTO THE OTHER ITEMS EXCEPT THAT AGAIN TO MENTION THE SCADA SYSTEM, SYSTEM CONTROL AND DATA ACQUISITION, IMPROVEMENTS THAT WE ARE MAKING. WHEN THOSE ARE IN PLACE, WE TRULY WILL HAVE A MUCH BETTER FEEL FOR WHAT'S HAPPENING OUT THERE WITH THE SYSTEM. THAT'S A NERVE CENTER OF WHAT WE DO. WE SHOULD BE ABLE TO DISPATCH OUR CREWS A LOT QUICKER THAN WE ARE CURRENTLY DURING THE EXISTING -- USING THE EXISTING SYSTEM THAT WE HAVE. OBVIOUSLY PROVIDE BETTER SERVICE TO OUR CUSTOMERS. JUST TO FOCUS ON THE RATE AND FEE CHANGES ON SLIDE 8. NO INCREASE TO THE BASE RATES. WE ARE PROPOSING AN ADJUSTMENT TO THE FUEL CHARGE AS ALLOWED US UNDER SENATE BILL 7. AND THIS ESSENTIALLY IS FOR COLLECT -- TO COLLECT MONEYS FOR FEES CHARGED TO OUR UTILITY BY ERCOT. NOW, WE HAVEN'T BEEN CHARGING THAT BECAUSE THESE FEES WERE ESSENTIALLY MINUSCULE IN THE PAST, HOWEVER THEY HAVE INCREASE UNDERSTAND RECENT YEARS. BEFORE REGULATION THE ERCOT BILL USED TO BE $2 MILLION A YEAR. IT HAS GROWN NOW TO $70 MILLION A YEAR. JUST YESTERDAY, WE WERE INFORMED THAT THE INTENT TO RAISE THE FEE FROM 22 CENTS BY -- UP TO 357 CENTS, POSSIBLY 42 CENTS. IT'S -- IT'S ESSENTIALLY GOING TO DOUBLE. AND SOMETHING WE NEED TO BEGIN TO CONTEND WITH IN OUR FEE STRUCTURE AND WE ARE PROPOSING THAT THAT BE INCLUDED IN THE FUEL CHARGE. AGAIN IT'S ALLOWED BY ERCOT. RIGHT NOW WE ESTIMATE THAT TO BE OUR SHARE, 5.3 MILLION DOLLAR A YEAR. WHICH COULD GO UP. THAT WE INTEND -- WE EXPECT THAT IT WOULD IMPACT THE CUSTOMERS BY 50 CENTS ON AN AVERAGE RESIDENTIAL BILL OF A THOUSAND KILOWATT HOURS PER MONTH. THE -- THE OTHER FEES HAVE TO DO WITH WHAT WE CHARGE FOR RETURN CHECKS, THE BANK DECLINES ON UTILITY FUND TRANSFER, BANK DECLINES ON CREDIT AND DEBIT CARDS. WE WANT TO CHANGE THAT FROM $20 TO $25. AS YOU GO SHOPPING AND YOU WILL NOTICE WHAT -- WHAT THE BUSINESSES CUSTOMARILY CHARGE OUT THERE. THE $25 CHARGE IS BECOMING MORE CUSTOMARY THAN THE $20 THAT WE ARE -- THAT WE ARE CHARGING CURRENTLY. LASTLY, THE RESEARCH LOCATION FEE, THIS IS BRAND NEW, AS YOU ALL ARE AWARE, THERE IS A ONE CALL SYSTEM IN THE STATE. IF YOU ARE ABOUT TO DO CONSTRUCTION, YOU CALL OUT TO LOCATE ALL UNDERGROUND UTILITIES. WE ARE REQUIRED TO RESPOND IMMEDIATELY TO THOSE AND WE DO. THIS SERVICE IS SOMETHING THAT SOMETIMES DESIGNERS CALL FOR. THEY DON'T HAVE CONSTRUCTION IN MIND. THEY WANT US TO GO LOCATE OUR UTILITIES FOR THE PURPOSE OF PLANNING. IT TAKES RESOURCES AWAY FROM OUR ABILITY TO RESPOND TO OUR CONTRACTORS WHO ARE WAITING ON US. AND IT'S ESSENTIALLY A NUISANCE. WE WOULD LIKE FOR THEM TO RELY ON THE FUND FOR THIS SERVICE. WE WILL PROVIDE IT, BUT WE WOULD LIKE TO CHARGE THEM A FEE OF $250 FOR THE FIRST TWO HOURS, AN ADDITIONAL [INAUDIBLE] HOURS PER HOUR THERE ON. ESSENTIALLY SOMETHING THAT WE ARE PLEASED TO DO, BUT IT DOES TAKE AWAY FROM OUR RESOURCES TO HANDLE FOLKS WHO ARE WAITING FOR CONSTRUCTION. JUST GETTING INTO SOME OF OUR KEY PERFORMANCE MEASURES. YOU MAY HAVE HEARD OF SOMETHING CALLED SYSTEM AVERAGE INTERRUPTION FREQUENCY INDEX, SAIFI, THAT'S THE NUMBER OF OUTAGES PER CUSTOMER PER YEAR. WE HAVE BEEN OPERATING AT 1.2. THE NATIONAL INDUSTRY AVERAGE I -- YOU MAY IS 1 -- YOU MAY RECALL THE 1.2 IS STRICTLY A FUNCTION WHERE WE HAD THAT VERY SEVERE ICE STORM BACK IN FISCAL YEAR 2001, WE HAD VERY SEVERE WEATHER THIS CURRENT YEAR. WE ARE EXPECTED TO COME DOWN TO 1 AND WE ARE SHOOTING TO BRING IT FURTHER DOWN, BUT OBVIOUSLY IF WE CAN STAY THERE AT ONE OR BELOW, WE ARE DOING WELL. THE SAIDI INDEX, WHICH YOU ALSO HEAR ABOUT WITH RESPECT TO THE POWER INDUSTRY, SYSTEM AVERAGE INTERRUPTION DURATION INDEX, ESSENTIALLY IT MEASURES THE AVERAGE LENGTH OF THE OUTAGES. WE OPERATE PRETTY WELL BELOW, IT'S A TESTAMENT TO OUR CREW, WE GET OUT THERE QUICKLY AND GET THE SYSTEM BACK ON. WE ARE AT 98.1 MINUTES. THE AVERAGE INDUSTRY TIME IS 120 MINUTES. WE EXPECT TO GO DOWN TO 75 NEXT YEAR. THE DATA ONE SYSTEM WILL HELP US IMPROVE ON THAT BECAUSE OF OUR QUICKER RESPONSES. TREE TRIMMING, WE FINDING TREE TRIMMING BY FAR AFFECTS THE SYSTEM OUTAGES MORE THAN ANYTHING ELSE THAT WE CAN DO. WE CAN KEEP OUR LINES CLEAR OF TREE LIMBS, WE CAN KEEP OUR SYSTEM MORE RELIABLE. THIS DOESN'T GIVE US A REAL GOOD IMAGE IN THE COMMUNITY. WE UNDERSTAND THAT. BUT WE DO HAVE MONEYS BUDGETED FOR THE URBAN HEAT ISLAND PROGRAM HERE AND IT'S SOMETHING THAT WE EXPECT TO CONTINUE BUDGETING FOR IN THE FUTURE. AS WE WANT TO DO SOMETHING TO MITIGATE THE EFFECTS OF OUR TREE TRIMMING PROGRAM FOR OUR RESIDENTS. YOU UNDERSTAND THAT AUSTINITES LOVE TREES, WE LOVE TREES, ALSO. BUT A FOUR TO FIVE YEAR TRIM CYCLE IS MUCH MORE EFFECTIVE IN KEEPING OUR LINES FREE. WE HAVE BEEN OPERATING ON LIKE A 10 YEAR TRIM CYCLE, WHICH IS ESSENTIALLY INEFFECTIVE. REGARDING OUR DEBT TO EQUITY RATIO ON SLIDE 11. WE HAVE BROUGHT THAT DOWN FROM A HIGHWAY OF 1994 OF 79% DOWN TO A CURRENT 58%. WE EXPECT TO KEEP IT THERE. WE HAVE DONE THIS BECAUSE OBVIOUSLY THIS MAKES US MUCH MORE COMPETITIVE. TO SOME DEGREE OR PAY DOWN ON THE SOUTH TEXAS NUCLEAR PROJECT IS HELPING THAT, BUT WE ALSO HAVE VERY CONSCIOUSLY DECIDED TO FUND OUR NEW GENERATIONS IN CASH, SO THAT'S HAVING AN EFFECT ON THE DECLINE ON OUR DEBT TO EQUITY RATIO. VERY GOOD DECISION FOR AUSTIN ENERGY. REGARDING OUR MONTHLY BILL COMPARISONS WITH OTHERS IN THE STATE, WE CONTINUE AT A THOUSAND KILOWATT HOURS PER HOUR, CONTINUE TO BE VERY COMPETITIVE. AS YOU CAN SEE ON THE CHART. WE -- EL PASO WITH THE HIGHEST RATE AT A THOUSAND KILOWATT HOURS PER MONTH, ALSO HAS THE LOWEST AVERAGE BILL BECAUSE THEIR CONSUMPTION IS SO MUCH LOWER THAN THE REST OF THE STATE. NOW, OUR AVERAGE BILL IS ALSO AMONG THE LOWEST. IN FACT I THINK IT'S ONLY BEATEN BY EL PASO. AGAIN BECAUSE OUR CONSUMPTION IS FAIRLY LOW, WE CAN -- BECAUSE OF OUR CONSERVATION PROGRAM. ON SLIDE 14, ENERGY CONSERVATION, WE WANT TO POINT THAT OUT BECAUSE WE BELIEVE SINCE ITS INCEPTION BACK IN 1982, WE HAVE OFFSET OR PUT OFF THE BUILDING OF A 480-MEGAWATT POWER PLANT. WHICH COSTS $500 PER MEGAWATT. YOU ARE LOOKING AT $240 MILLION EXPENDITURE , ESSENTIALLY, THAT'S BEEN DEFERRED. THESE ARE NOT CUMULATIVE. THESE ARE ACTUALLY I AM RIEWVMENTS THAT WE EXPECT TO MAKE THIS YEAR AND OF COURSE THE COMING YEAR. IMPROVEMENTS. ON SLIDE 15, KEY PERFORMANCE MEASURE, I WILL TALK ABOUT THE GOOD ONES FIRST, I WILL TALK ABOUT THE FIRST ONE LAST THERE. REGARDING OUR [INAUDIBLE] RESTORATION, WE HAVE A REALLY GOOD FAVORABLE RESPONSE FROM OUR CUSTOMERS OF 88%, ELECTRONIC DISCONNECTS, 90%, ENERGY CONSERVATION FAVORABLE, 90%. THOSE REAL GOOD AREAS. WE HAVEN'T DONE AS WELL ON THE PERCEIVED VALUE, EVEN THOUGH THIS CURRENT YEAR WE JUMPED UP TO 65% FAVORABLE FROM 56 THE YEAR BEFORE. WE ARE CONTINUING TO LOOK AT THAT. WE SURVEY OUR CUSTOMERS. OBVIOUSLY PRICE IS A VARIANT ON THAT. RELIABILITY HAS A BIG BEARING ON THAT. OUR IMAGE WITH RESPECT TO OUR [INAUDIBLE] PROGRAM HAS SOME BEARING ON THAT. AS WE INVEST MORE MONEY ON [INAUDIBLE] PLACEMENT, MITT GAYS. SOMETHING WE WILL FOCUS ON AS WE SURVEY OUR CUSTOMERS IN THE HOPES OF IMPROVING ON THAT MEASURE. SOME THINGS THAT WE ARE DOING TO IMPROVE OUR PROCESSES. SOMETHING THAT HE WE CALL PRESCRIPTIVE MAINTENANCE. NOT LONG AGO, WE WOULD GET THE CALL, FIX THE PROBLEM, COME BACK, GO TO THE NEXT ONE. NOWADAYS YOU WANT TO KNOW EXACTLY WHAT CAUSED THE OUTAGE. THEN YOU WANT TO KNOW IF IT CAN HAPPEN AGAIN ELSEWHERE IN THE SYSTEM AND YOU GO FIX IT BEFORE IT HAPPENS. IF IT MEANS THAT WE HAVE GOT -- WE HAVE BOUGHT TECHNOLOGY THAT HAS FLAWS IN IT, WE GO BACK TO THE MANUFACTURER AND EXPECT THEM TO CORRECT IT. IF IT MEANS THAT WE HAVE GOT STUFF THAT WE BASICALLY BOUGHT AND ARE NOW OWNERS OF, WE HAVE TO REPLACE THOSE, WE REPLACE THOSE ON A PROGRAM BASIS. ESSENTIALLY IT'S LOOKING AT WHAT THE SYSTEM IS TELLING YOU AND THEN GOING OUT AND FIXING IT BEFORE IT HAPPENS AGAIN. THE SCADA SYSTEM, THE DATA ONE SYSTEM, SHOULD HELP US AGAIN IN -- IN EARMARKING THOSE AND IN DOING SOMETHING ABOUT THEM. THE CONTRACT MANAGEMENT, SOMETHING OF PARTICULAR CONCERN TO ME, FOR EVERY SINGLE CONTRACT THAT WE HAVE, I WANT TO MAKE SURE THAT EVERY SINGLE DELIVERABLE IS IN FACT DELIVERED, THAT WE ARE WITHIN BUDGET, THAT THE WORK IS DONE ON TIME, THAT THE CONTRACTS ARE USED ONLY FOR THE PURPOSE FOR WHICH THEY WERE INTENDED SO WE INTEND TO CENTRALIZE CONTRACT ADMINISTRATION. IN FACT HAVE DONE THAT WORK, ARE IN THE PROCESS OF REALIGNING OUR PEOPLE NOW WITHIN EXISTING RESOURCES SO WE CAN GET A BETTER HANDLE ON ALL OF OUR CONTRACTS. WE EXPECT THAT TO SAVE US MONEY INTO THE FUTURE. FLEET UTILIZATION. WE DON'T WANT TO HAVE A SINGLE VEHICLE THAT'S NOT BEING USED OR PROPERLY USED. WITH INSURABLE VEHICLES, THAT MEANS MONEY SAVED FOR THE UTILITY, WE INTEND TO DO THAT. WE ARE IN THE PROCESS OF COMPLETING THAT INVENTORY, WORKING WITH THE CITY'S FLEET MANAGEMENT PROGRAM TO IMPROVE THAT. SOMETHING THAT YOU WILL BE HEARING OF THAT WILL INVOLVE YOU DIRECTLY WILL INVOLVE THE CITY MANAGER AND THEIR STAFF DIRECTLY, THAT IS LONG-TERM PLANNING. WENEED TO BE AWARE OF WHAT'S HAPPENING IN THE INDUSTRY, WHAT'S COMING AT US IN THE FAR FUTURE. BEGINNING TO DO THINGS RIGHT NOW THAT CAN PREPARE US TO COMPETE FAVORABLY IN THAT FUTURE. AGAIN, USING EXISTING RESOURCES, I INTEND TO SET UP A STRATEGIC LONG-RANGE PLANNING TEAM THAT WILL WORK WITH YOU, THE CITY MANAGER AND OTHERS TO COME UP WITH A LONG-RANGE PLAN FOR THE UTILITY AND TO UPDATE IT ANNUALLY AND KEEP IT UP EVERY YEAR. WE DO PROVIDE EXCEL -- TO CONTINUE TO PROVIDE EXCELLENT SERVICES TO OUR CUSTOMERS. THAT CONCLUDES MY PRESENTATION, IF YOU HAVE ANY QUESTIONS I WOULD BE GLAD TO ANSWER THEM.

Mayor Garcia: QUESTIONS FOR MR. GARZA? COUNCILMEMBER WYNN?

Wynn: THANK YOU, MAYOR. I'M SORRY, CITY MANAGER, ARE WE GOING TO SORT OF ALLOCATE SOME TIME FOR THIS OR DO YOU WANT TO TRY TO BREAK IT UP BETWEEN THE TWO DAYS --

Futrell: ACTUALLY, BECAUSE WE NOW HAVE EXTRA TIME, IT'S DOUBLE POSTED FOR BOTH DAYS, HOW WE THOUGHT THAT WE WOULD TRY, JUST GO TO EACH DEPARTMENT AND OPEN IT UP FOR YOUR Q AND A, WHEN YOU ARE READY TO MOVE ON WE WOULD GO ON THE NEXT. WHATEVER WE DON'T FINISH TODAY WE ARE ABLE TO PICK UP TOMORROW MORNING. I THIS THINK BETWEEN THE TWO DAYS WE ARE FINE. I HOPE THAT THIS WILL GIVE US THE -- THE QUALITY AND QUANTITY OF TIME THAT YOU NEED TO GET YOUR QUESTIONS ON THE TAIL.

Wynn: THANK YOU. ON THE CAPITAL SPENDING PLAN, THE $200 MILLION, THAT SEEMS TO BE A TYPICAL NUMBER OVER THE PAST FEW YEARS. THAT'S BOTH CONSTRUCTION PROJECTS AND LIKE ACQUISITION OF EQUIPMENT, THINGS LIKE THAT, CORRECT?

NO. ESSENTIALLY CONSTRUCTION PROJECTS. THE -- THE FLEET, FOR EXAMPLE, THAT'S A CAPITAL OUTLAY THAT'S HANDLED SEPARATELY THROUGH SEPARATE PART OF THE BUDGET. THE CAPITAL IMPROVEMENT PROGRAM ESSENTIALLY DEALS WITH LONG-TERM CAPITAL INVESTMENTS OF THE UTILITY.

OKAY.

PLANTS, IMPROVEMENTS TO THE DISTRIBUTION SYSTEM, THE TRANSMISSION SYSTEM, TRANSFORMERS, THOSE KINDS OF THINGS.

Wynn: SO OF THAT, I MEAN, IS ALL OF THAT WHAT I WOULD CALL THIRD PARTY CONSTRUCTION? THAT IS WE ARE OUT CONTRACTING WITH --

YES, SIR.

Wynn: CONTRACTORS AROUND THE COMMUNITY OR STATE AND/OR -- HOW MUCH CONSTRUCTION DO WE TRY TO HANDLE IN-HOUSE, IF ANY? DO YOU ACTUALLY HAVE -- YOU KNOW, CONSTRUCTION CREWS THAT DO --

WE HAVE REPAIR CREWS. WE SEND OUT. OUR CREWS FOCUS ON MAKING CERTAIN THAT WHEN WE START OUT JUST AS QUICKLY AS THEY HAPPEN. BUT ESSENTIALLY WE CONTRACT OUT MOST OF OUR CONSTRUCTION.

OKAY.

Wynn: OKAY. THANK YOU. ON THE $23 MILLION ENERGY CONSERVATION PROGRAM. CAN WE SEE JUST A BREAKDOWN OF WHERE WE SPEND -- I GUESS SOME OF THAT IS -- IS ENERGY AUDITS WITH -- WITH BUSINESSES AND HOME, I GUESS, SOME OF IT IS EQUIPMENT REBATES, PERHAPS. I WOULD JUST LIKE TO SEE, YOU KNOW, HOW WE SPEND THOSE. AND I -- AND IT'S VERY -- REALLY GOOD TO SEE THIS ANALYSIS OF THE DIRECT MEGAWATT SAVINGS SORT OF PER YEAR. DO WE TRY TO TRACK THAT ON A -- ON A PRODUCT BASIS, THAT IS DO WE TRY TO FIGURE OUT OF THE $23 MILLION WE ARE SPENDING ON CONSERVATION, YOU KNOW, WHICH -- WHICH DOLLARS BUY MORE MEGAWATT SAVINGS THAN OTHERS? DO WE HAVE --

YES, SIR, WE TRACK ABOUT FIVE OR SIX DIFFERENT CATEGORIES, GENERAL CATEGORIES IN THAT REGARD.

OKAY. I WOULD LIKE TO SEE THAT IF WE COULD. NEXT THE -- THE SCADA PROGRAM, IS THERE -- ANY POTENTIAL SYNERGY WITH OTHER CITY DEPARTMENTS? I GUESS A BIG PIECE OF THIS IS YOUR ALL'S DISPATCHING CAPABILITY. IS THERE ANY SORT OF PIGGYBACKING WITH -- YOU KNOW, WITH PUBLIC WORKS OR -- OR OTHER DEPARTMENTS THAT -- THAT EVEN SOLID WASTE OR SOMEBODY THAT WE DO A LOT OF DISPATCHING, IS THERE A -- SOME SYNERGY BETWEEN OTHER DEPARTMENTS OR IS THIS JUST A STAND ALONE --

WE ARE -- WE ARE LOOKING AT A PROJECT TO CONSOLIDATE SOME OF ACTIVITIES, ESPECIALLY IN THE -- IN THE PUBLIC WORKS CONTRACT MANAGEMENT AREA AND WE CAN PROBABLY BEGIN TO -- AS PARTS OF AN OFFSHOOT OF THAT COMMITTEE MAYBE LOOK INTO THAT IF THERE ARE SOME SYNERGIES THAT WE TAKE ADVANTAGE OF THEM.

Wynn: OKAY. AND THEN LASTLY, ON THE -- I NOTICE THAT YOU HAVE A RELATIVELY SMALL LINE ITEM FOR SHHH 130 POWER LINE RELOCATIONS. THERE'S A PRETTY SIGNIFICANT MOVEMENT AFOOT OF REALLY FOCUSING ON SH 130 AS A SCENIC PARKWAY VERSUS JUST SORT OF A TYPICAL BYPASS. AN ELEMENT OF THAT WILL BE POWER LINES, YOU KNOW, FROM BILLBOARDS, POWER LINES, YOU KNOW, LANDSCAPING, ARCHITECTURAL TECHNIQUES ON OVERPASSES, THINGS LIKE THAT. AS PARTS OF THIS POWER LINE RELOCATION, ARE WE -- WHAT IS IT? ARE WE ACTUALLY MOVING POWER LINES, YOU KNOW, OUTS OF THAT RIGHT-OF-WAY COMPLETELY? OR ARE WE BURYING THEM, WHAT WILL BE THE PRODUCT?

WE WOULD RELOCATE THEM WITHIN OUR EXISTING ROUTE. I'M TALKING ABOUT THE ROUTE FOR THE POWER LINES THEMSELVES, TO ACCOMMODATE THE CONSTRUCTION OF THE HIGHWAY, OF THE -- THE HIGHWAY DEPARTMENT WILL TELL US ESSENTIALLY WHERE THE POWER LINES WILL GO. WE WILL WORK IT OUT WITH THEM TO MAKE SURE THAT IT SUITS OUR NEEDS. BUT WE ARE TALKING POWER LINES. WE WERE NOT TALKING, FOR EXAMPLE, BURYING THEM OR RELOCATING THEM TO ANOTHER PART OF THE CITY.

Wynn: BUT IT SEEMS TO ME, THAT SH 130 RIGHT-OF-WAY DOESN'T EXIST YET. SO REMIND ME, IT'S NOT LIKE WE ALREADY HAVE A POWER LINE RIGHT-OF-WAY THAT THE HIGHWAY IS GOING TO FOLLOW.

CRIS-CROSSING IT.

THESE ARE ACTUALLY CROSSINGS OF THE RIGHT-OF-WAY.

RIGHT.

SO IN THEORY WE WILL EITHER COORDINATE THEM --

WE WILL PROBABLY HAVE TO -- TO RAISE THE LINES BIT OR SOMETHING TO -- DEPENDING ON THE DESIGN THAT OCCURS, WE WILL HAVE TO DO SOME ADJUSTMENT TO THE HEIGHT OF THE LINES, PERHAPS EVEN THE LOCATION.

ALL RIGHT.

BUT -- I'M NOT SURE THAT WE HAVE THOSE SPECIFICS. I WAS NOT AWARE OF THE EMPHASIS ON THE SCENIC QUARTER, WHICH MAY IMPACT WHAT WE DO THERE. IN FACT I'M SURE IT WOULD IMPACT WHAT WE DO.

Wynn: ALL RIGHT. OKAY, THAT'S ALL FOR NOW, MAYOR, THANK YOU.

Mayor Garcia: FURTHER QUESTIONS?

Goodman: YES, MAYOR.

Mayor Garcia: MAYOR PRO TEM?

Goodman: I NEED A COUPLE OF BREAKOUTS AS WELL AND THAT WAS HOLLY AND THE METER READING. SOME KIND OF GENERALIZED BREAKOUT OF THE 3.5 MILLION FROM METER READING. AND I WANTED TO ASK, IT MAY NOT BE A HIGHLIGHT THAT'S STILL IN THE SCHEDULE, DO WE HAVE ANY UNDERGROUND LINES, PUTTING ANY LINES UNDERGROUND SCHEDULED FOR THIS YEAR?

YES, WE DO. I WILL BE DELIGHTED TO GET THAT FOR YOU. I DON'T REMEMBER SPECIFICALLY THE BIG PROJECT THAT WE HAVE ON THE BOOKS. I'M SURE THE STAFF CAN PROVIDE IT FOR ME IMMEDIATELY IF YOU WANT IT RIGHT AWAY.

OKAY.

Goodman: THANKS.

Mayor Garcia: COUNCILMEMBER ALVAREZ?

IF I CAN ADDRESS THE METER READING JUST QUICKLY. THAT HAS TO DO WITH OUR AUTOMATIC -- AUTOMATED METER READING PROGRAM THAT WE ARE INSTALLING. ESSENTIALLY IN APARTMENT COMPLEXES. SOME SINGLE FAMILY RESIDENTIAL IN THE AREAS WHERE THE APARTMENT COMPLEXES ARE OCCURRING. IT'S A PROGRAM THAT WAS APPROVED BY COUNCIL A COUPLE OF MONTHS AGO.

Goodman: YEAH, I JUST WANTED TO SEE WHAT IT WAS COMING DOWN TO GENERALLY AND INDIVIDUAL COSTS.

Alvarez: MR. GARZA, I HAD A COUPLE OF QUESTIONS AND I WAS JUST LOOKING AT PAGE 3, WHERE IT DETAILS THE REVENUES AND OPERATING EXPENSE AND WHERE IT -- I MEAN, IT SHOWS THAT THERE'S MORE EXPENSE THAN THERE IS REVENUE. WHAT IS THE -- WHAT IS THE DIFFERENCE THERE? I MEAN, THERE'S OTHER SOURCES OF FUNDING OR --

WE ESSENTIALLY ARE PROPOSING THAT WE USE FUND BALANCE FOR THIS COMING YEAR.

Alvarez: THAT'S WHAT I WAS ASSUMING.

BECAUSE WE JUST DO NOT BELIEVE THAT THIS WEATHER WILL PERSIST. WE HAVEN'T HIT THE 100 YET THIS SUMMER. IT'S SO UNUSUAL FOR THIS PART OF TEXAS.

Mayor Garcia: NOBODY IS COMPLAINING ABOUT THAT, EXCEPT YOU GUYS. [ LAUGHTER ]

YOU ARE RIGHT, SIR, WE ARE NOT EXPECTING, WE WILL -- WE ARE NOT COMPLAINING, WE WILL MAKE ADJUSTMENTS IS WHAT WE WILL DO.

Alvarez: I DID, NOTICE, ALSO IN A DECREASE IN OPERATING EXPENSE, SO IF YOU COULD DETAIL -- IF WE SPEND $848 MILLION THIS YEAR, ONLY 829 MILLION, WHERE EXACTLY WE CUT IN TERMS OF THE OPERATING EXPENSES.

WE -- I ASKED THE STAFF ESSENTIALLY TO CUT ACROSS THE BOARD. AS WE -- AS WE PUT THIS BUDGET TOGETHER BECAUSE OBVIOUSLY WE COULDN'T BRING BACK A BUDGET FOR 848 MILLION. THEY SPENT LIKE A WEEK DECIDING WHERE -- WHERE THEY WOULD MAKE THOSE ADJUSTMENTS WITH THE IDEA THAT -- THAT WE WOULD NOT SACRIFICE SAFETY OF OUR EMPLOYEES OR SYSTEM RELIABILITY. SO IT WASN'T AN EASY TASK, BUT THEY LOCKED THEMSELVES IN A ROOM ESSENTIALLY IN THAT BIG ROOM UP ON THE FIFTH FLOOR AND DIDN'T COME OUT UNTIL THEY CAME UP WITH A PLAN. I AM CAN HE VFT IN THE -- CONFIDENT IN THE PLAN THEY PUT TOGETHER FOR US.

Alvarez: I'M MORE INTERESTED, MAYBE THE LARGER ITEMS, LIKE, YOU KNOW, I'M PARTICULARLY INTERESTED IN MAINTENANCE, YOU KNOW, HOW WE ARE TREATING THAT NEXT YEAR AS WELL AS CONSERVATION, YOU KNOW, ARE WE CUTTING OR IS IT LEVEL OR IS IT -- AND -- BUT I WOULD LIKE TO AT LEAST SEE WHERE THE BIGGEST OF THOSE CUTS WERE AND WHAT AREAS TO TELL HIM, JUST TO HAVE AN IDEA, WHAT ARE WE DOING TO MAKE UP THE GAP BECAUSE OF THE CONDITIONS THAT WE ARE SEEING, AT LEAST THUS FAR.

Mayor Garcia: COUNCILMEMBER?

Slusher: MR. GARZA, SINCE THIS IS A SMALL INCREASE ON THE ERCOT FEE, BUT I THINK IT MIGHT BE INTERESTING TO MEMBERS OF THE PUBLIC THAT ARE GOING TO BE PAYING IT TO GET A LITTLE MORE DETAIL ON THE -- ON WHY THAT CHARGE IS THERE, WHAT WE ARE PAYING FOR. I'LL GET THAT FOR YOU, COUNCILMEMBER, JUST TO -- GOING TO A LITTLE BIT MORE RIGHT NOW. THE -- THE SYSTEM THAT WAS SET UP BY ERCOT IS -- IS -- IS MANAGED BY THEM. THE SWITCHING AS OPPOSED TO HAVING THE INDIVIDUAL UTILITIES HANDLE THE SWITCHING OF CUSTOMERS, THEY HAVE -- IN THIS DATE WE HAVE DECIDED TO DO IT THROUGH ERCOT. THEY HAVE HAD TREMENDOUS PROBLEMS WITH SOME CUSTOMERS EVEN NOW NOT YET GETTING BILLS FROM THEIR NEW PROVIDER. IT'S JUST BEEN A HUGE MESS. THEY HAVE INVEST ADD LOT OF MONEY, NOW THEY NEED TO INVEST MORE. THEY HAVE EXPERTS IN THAT ARE TRYING TO HELP THEM GET IT SORTED OUT. IT'S COSTING A LOT MORE MONEY THAN THEY EVER EXPECTED IT WOULD COST THEM.

Slusher: YOU ARE TALKING ABOUT PART OF SETTING UP OR IMPLEMENTING DEREGULATION.

YES, SIR, TO DEREG -- FOR DEREC. IN THE OLD DAYS, SOMEBODY CALLED -- CAME INTO THE HOUSE, CALL UP THE UTILITY, IT WOULD BE CONNECTED, THERE WOULD BE TOO MUCH OF A PROBLEM. NOWADAYS YOU HAVE TO DO WITH ERCOT, THE OLD UTILITY, THE NEW PROVIDER, A WHOLE -- YOU HAVE NO DEAL WITH ALL OF THOSE, IT HAS TO ALL BE ORCHESTRATED BY ERCOT. THE SWITCHING IS SOMETHING THAT JUST -- THAT NOWADAYS THEY ARE SIMPLY CONNECTING YOU, THEY ARE WORKING OUT THE BILLING PROBLEMS AS THEY CAN AND THEY HAVE NOT YET WORKED THEM OUT. SO THEY ARE HAVING TO INVEST A LOT MORE MONEY.

Slusher: SO IT WOULD BE FAIR TO SAY IN THIS INSTANCE DEREGULATION IS CAUSING MORE REGULATION.

YES, SIR, IT IS. IN FACT IT'S COSTING MORE MONEY. IN THIS INSTANCE, WE WERE PAYING $2 MILLION A YEAR IN ERCOT FEES, IT'S UP TO 7 0RBGS IT'S GOING TO GO -- 70, UP TO 90 NEXT YEAR. WE WERE JUST INFORMED THAT IT COULD ACTUALLY DOUBLE. KOOG FROM THE UNITS PRICE OF -- COULD GO FROM THE UNIT PRICE OF 22 CENTS UP TO 42 CENTS, WHICH IS ESSENTIALLY GOING TO MEAN INSTEAD OF PAYING 5.3 IT WILL BE MORE LIKE 10 MILLION, OUR SHARE OF IT. THAT'S A MONUMENTAL PROBLEM THAT THEY HAVE TO ADDRESS.

Slusher: TREMENDOUS INCREASE IN COST AND INCREASE IN REGULATION AS PART OF DEREGULATION.

THAT'S CORRECT. AND NO DECREASE IN THE PRICE. THEY DROPPED THE PRICE BY THAT 6%, THEY MADE IT THE PRICE TO BEAT ACROSS THE STATE FOR ALL UTILITIES. NO ONE HAS FURTHER DECREASED THAT PROVIDES FOR RESIDENTIALS. THE BIG WINNERS IN DEREG SO FAR HAVE BEEN REALLY, REALLY BIG BUSINESS. THEY HAVE -- YOU HAVE SEEN THE MOST SWITCHING AMONG THE REALLY LARGE CUSTOMERS THROUGHOUT THE STATE. RESIDENTIALS AND -- KIND HAVE BEEN LEFT ALONE.

Slusher: THANK YOU FOR THAT INFORMATION.

Dunkerly: MAYOR?

Mayor Garcia: COUNCILMEMBER DUNKERLY?

Dunkerly: ON PAGE 3, I WAS CURIOUS, I KNOW THAT YOU HAVE GOT A BUDGET FOR THIS YEAR OF ABOUT $822 MILLION. WE KNOW THE WEATHER HAS BEEN BAD. HOW LOW DO YOU EXPECT THAT REVENUE TO BE? ACTUALLY BY THE END OF SEPTEMBER.

WE ARE -- WE ARE MONITORING THAT NOW ON A DAILY BASIS. IT COULD BE AS -- AS MUCH AS 18, 20 MILLION, AS LITTLE AS 14, 15 MILLION, BUT IT'S GOING TO BE IN THE MILLIONS OF DOLLARS.

SO IT'S GOING TO BE CLOSE TO -- TO 800 MILLION, YOU THINK, OR --

NO, COMPARED TO THE 848. I'M SORRY. THE -- DUPG DID YOU THINK NO, NO, NO, I'M TALKING ABOUT THE REVENUE. SO THAT'S WHY YOU ARE COMING ONE THE 815 NEXT YEAR BECAUSE OF THE WEATHER CYCLE? THEN ON THE OPERATING EXPENSES, PROBABLY I THINK THAT INCLUDES YOUR FUEL, SO PROBABLY ONE OF YOUR BIG COMPONENTS THERE OF THAT DECREASE IS AN ADJUSTMENT DOWN IN THE FUEL COST SINCE YOU ARE EXPECTING A LOT LESS REVENUE MAYBE. THE OTHER QUESTION THAT I HAD OR -- OR DATA THAT I WOULD LIKE TO GET, WE STILL HAVE A SUBSTANTIAL CONSERVATION PROGRAM THAT WE ARE ALL VERY, VERY PROUD OF. I KNOW FROM TIME TO TIME WE HAVE COMPARED THAT TO OTHER CONSERVATION PROGRAMS IN THE STATE. WE HAVE ALWAYS FAR OUT EXCEEDED, FAR EXCEEDED OTHER UTILITIES. DO YOU HAVE THAT DATA MOW? ARE WE STILL DOING A LOT BETTER JOB THAN OUR COMPETITORS IN THE STATE?

YES, WE DO HAVE THAT DATA. I WILL SHARE IT WITH YOU. IT IS BY FAR THE BEST IN THE STATE. AND AMONG THE VERY BEST IN THE COUNTRY.

Mayor Garcia: COUNCILMEMBER THOMAS?

Thomas: THANK YOU, MAYOR. MR. GARZA, ON PAGE 6, YOU [INAUDIBLE] SECURITY MONITORING SYSTEM, THEN YOU HAVE ON PAGE 71.4 MILLION FOR SECURITY. -- ON PAGE 7, 1.4 MILLION FOR SECURITY. GIVE ME A BACK DROWN, JUST THE INFORMATION FOR SECURITY REASON FOR THE MONTH.

GIVE THAT TO ME. ALSO -- IT'S PROBABLY THE BUDGET BOOK MANUAL OF -- I MEAN YOUR VOLUME, BUT ALSO I WOULD LIKE TO SEE MONEY THAT YOU ARE CONTRIBUTING TO DIFFERENT PROGRAMS IN THE CITY, LIKE SOCIAL SERVICE, YOUTH PROGRAMS, WHATEVER.

THANK YOU.

YOU BET.

Mayor Garcia: THIS MAY HAVE BEEN MENTIONED WHEN I WAS GETTING UP, ON PAGE 5 CONSERVATION 22.2 MILLION, PAGE 6, 23.4. DO YOU KNOW WHICH ONE IS ACCURATE? 23.4 INCLUDES THE BEGINNING FUND BALANCE -- IS THAT CORRECT?

Mayor Garcia: HOW MUCH DOES THAT MEAN, 22.2 OR 23.4.

WE EXPECT THE SPEND THE 22.2 FOR NEXT YEAR.

Mayor Garcia: OKAY.

I WILL CLEAR THAT UP FOR, MAYOR, MAKE CERTAIN.

Mayor Garcia: LET'S SEE. ON PAGE 12, ON THE RESOLUTIONS THAT HAVE BEEN PASSED WITH REGARD TO DEBT TO EQUITY RATIOS AND THAT CAME OUT OF THAT VISIT TO NEW YORK, WHAT WAS OUR GOAL?

63%.

52?

63.

62?

63, SIR.

62.

62, YOU ARE RIGHT.

I HEARD 63.

WE HAVE ALL GIVEN THREE NUMBERS.

IT'S 62.

62 62.

Mayor Garcia: SO PROJECTED FOR '02 IS GOING TO GET US BELOW THAT?

YES, SIR.

Mayor Garcia: AND --

WE SEE THAT 62 AS AN UPPER LIMIT, MAYOR. PREAGHT BELOW IT OR -- OPERATING BELOW IT IS HEALTHY.

'03 WHAT DO YOU EXPECT?

WE EXPECT TO SAY THERE AT 58.

Mayor Garcia: THAT'S ALL OF THE QUESTIONS THAT I HAVE. ANY OTHER QUESTIONS FOR ENERGY -- AUSTIN ENERGY?

THANK YOU VERY MUCH.

THANK YOU, MAYOR. WE ARE GOING TO GO TO PUBLIC WORKS, MAYOR. THAT WAY WE CAN START AT THE TOP OF THE PAGE.

YOU ALWAYS LIKE TO BE SO ORDERLY, JOE.

Futrell: WE TOLD HIM BREAK OUT OF YOUR BOX, START AT THE END JUST ONCE.

GOOD MORNING, MAYOR AND COUNCIL, PETER REIKE DIRECTOR OF PUBLIC WORKS, PLEASED TO BE HERE THIS MORNING TO PRESENT TO YOU THE BUDGET FOR THE PUBLIC WORKS DEPARTMENT. OUR BUDGET CAN BE FOUND IN VOLUME 1, PAGES 29 THROUGH 100. AND IN THE POLICY BUDGET PAGES 101 TO 104 AND THE CAB TALL BUDGET FOR PUBLIC -- CAPITAL BUDGET FOR PUBLIC WORKS, VOLUME 4, PAGES 394 AND ON. ON SLIDE 2 OUR PROPOSED SOURCES OF OPERATING FUNDS ARE PRIMARILY THE ENDING BALANCE FORWARD, TRANSPORTATION USER FEE, WHICH GOES INTO THE TRANSPORTATION FUND, C.I.P. PROJECTS, THE GENERAL FUND WITH ONLY 1.8 OUT OF THE TOTAL 41 MILLION, AND FEES FOR SERVICES AND OTHERS AND SINCE THIS IS A FAIRLY LARGE NUMBER, JUST SO YOU KNOW WHAT'S INCLUDED THERE, THOSE FEES INCLUDE UTILITY CUT PERMITS, REAL ESTATE FEES, SUBDIVISION CONSTRUCTION INSPECTION FEES, PROPERTY SALES, TRANSFERS FROM OTHER DEPARTMENTS FOR SERVICES, AND INTEREST INCOME. SLIDE 3, THE PROPOSED USERS OF OPERATING FUNDS, SHOW YOU -- UM -- THE VARIOUS PARTS THAT WE HAVE, PUBLIC WORKS BASICALLY HAS TWO MAJOR FUND COMPONENTS. THE CAPITAL PROJECT MANAGEMENT FUND THAT DEALS WITH CAPITAL INFRASTRUCTURE THAT THE CITY BUILDS AND DEVELOPS AND MAINTAINS AND THEN RIGHT-OF-WAY, MAINTENANCE AND MANAGEMENT. THE -- THE CAPITAL -- THE PRIMARY AREAS OF USING OUR FUNDS IS FOR CAPITAL PROJECT DELIVERY AND FOR STREET REPAIR. AND THEN THE NEXT LARGER PORTION IS FOR TRANSFERS AND OTHERS. I WILL BE HAPPY TO ANSWER ANY QUESTIONS IF YOU WANT TO GET INTO DETAILS. THE GOAL OR THE PRIMARY GOAL FOR PUBLIC WORKS IS TO MAINTAIN 70% OF THE STREET INVENTORY IN FAIR TO EXCELLENT CONDITION. THE -- WE ASSESS THE CONDITION OF THE STREET NETWORK ON AN ANNUAL BASIS. WE ACTUALLY USE A TECHNOLOGY THAT -- THAT CHECKS THE RIGHT COMFORT INDEX AND OTHER DATA THAT DETERMINE THE CONDITION OF THE STREET -- RIDE COMFORT INDEX. AND DO THIS FOR 50 PERCENT OF THE NETWORK ANNUALLY, EVERY TWO YEARS WE HAVE A FULL AND COMPLETELY UNDERSTANDING ABOUT THE CONDITION AND THAT ASSESSMENT GOES INTO -- INTO DETERMINING WHICH CONDITION CLASS STREETS FALL INTO. WE EXPECT THAT WE WILL BE ABLE TO CONTINUE TO MAINTAIN 73% OF THE CITY'S STREET NETWORK IN FAIR TO EXCELLENT CONDITION. WE ACCOMPLISH THAT THROUGH PREVENTIVE STREET MAINTENANCE. AND THE SLIDE NUMBER 5 SHOWS YOU THE MIX OF PREVENTIVE MAINTENANCE OPERATIONS, BASICALLY THREE CRACKED SEALING, SEAL COAT, OVERLAY AND WE -- AND WE ARE PLANNING TO PERFORM PREVENTIVE MAINTENANCE OF THIS KIND ON A TOTAL OF 545 LANE MILES OF CITY STREETS. IN TERMS OF HOW THAT RELATES TO A PERCENTAGE OF THE TOTAL ROAD NETWORK, THE GOAL THAT WE HAVE FOR ALL PREVENTIVE MAINTENANCE IS 10% OF THE ENTIRE NETWORK ANNUALLY. HOWEVER, WE ARE HOLDING OUR FEE, THE TRANSPORTATION USER FEE, WHICH PAYS FOR THE PREVENTIVE MAINTENANCE AT THE LEVEL THAT IT IS CURRENTLY AT. AND SO WE ARE REDUCING OUR PREVENTIVE MAINTENANCE OPERATIONS FROM 10% TO 8% FOR THIS YEAR AS WELL AS FOR NEXT YEAR. THE SECOND GOAL FOR THE DEPARTMENT IS TO IMPLEMENT CAPITAL IMPROVEMENT PROJECTS ON TIME AND WITHIN BUDGET, WITH RESULTS REPORTED AND MONITORED MONTHLY. I WOULD LIKE TO POINT OUT THAT THESE ARE NOT JUST PUBLIC WORKS CAPITAL IMPROVEMENT PROJECTS, BUT THAT THEY ARE PROJECTS THAT AFFECT ALL DEPARTMENTS, SUCH AS LIBRARIES, POLICE, WATER AND WASTEWATER, ET CETERA. AND I'M VERY PLEASED TO SAY THAT -- THAT WE HAVE BEEN ABLE AND PROJECT TO DELIVER PROJECTS, CONTINUALLY, WITHIN THE BUDGET THAT HAS BEEN ESTABLISHED FOR THEM AND TO -- AND WE ARE EXPECTING CURRENTLY THAT WE WILL FINISH 75% OF PROJECTS ON TIME AND WE ARE LOOKING TO DO SO -- I MEAN, WE ARE LOOKING AT 80% FOR NEXT YEAR. THE THIRD GOAL THAT WE HAVE IS A RESULT OF -- OF A CITY AUDITOR'S REPORT AND SOME LENGTHY DISCUSSIONS AND SUBSEQUENT INSTRUCTIONS BY COUNCIL, THAT IS TO REDUCE A PERCENTAGE OF UTILITY CUTS IN NEW STREETS. WHAT WE ARE DOING IN ORDER TO BE ABLE TO DO SO IS WE ARE PLANNING TO CREATE OR WE ARE PROPOSING TO CREATE A RIGHT-OF-WAY MANAGEMENT PROGRAM WHICH FOCUSES ON THE RIGHT-OF-WAY AND THOSE KIND OF ISSUES. AND WE ARE PROPOSING A MEASURE THAT MEASURES THE SQUARE YARD OF NEW STREETS CUT TO THE TOTAL NUMBER OF LANE MILES CLASSIFIED A NEW STREET. JUST VERY BRIEFLY I WANT TO SAY THAT ANY STREET THAT HAS BEEN RECONSTRUCTED, HAS BEEN IMPROVED, FOR INSTANCE, SUCH AS BARTON SPRINGS ROAD OR HAS RECENTLY BEEN OVERLAID, WHICH IS THE MOST EXTENSIVE PREVENTIVE MAINTENANCE METHOD, IS CONSIDERED TO BE A NEW STREET. AND THERE IS A MORE TOMORROW ON THERE BY ORDINANCE AS FAR AS UTILITY CUTS, HOWEVER, THERE ARE CERTAIN CONDITIONS UNDER WHICH UTILITIES ARE ALLOWED TO CUT. AND SO WE ARE TRYING TO WORK WITH THEM TO FIND ALTERNATIVES TO THE CUT. AND ONLY IF IT'S UNAVOIDABLE WILL THAT BE PERMITTED AND THIS IS THE RATIO THAT WE ARE LOOKING FOR. WE ARE STILL GATHERING A FULL YEAR OF DATA THIS YEAR. THAT'S WHY WE DON'T HAVE ANY PAST EXPERIENCE RELATIVE TO WHERE WE ARE WITH RAILROADED TO THIS GOAL PREVIOUSLY -- WHERE WE ARE RELATED WITH REGARD TO THIS GOAL PREVIOUSLY. WHAT WE ARE ALSO HOPING FOR IS TO CONTINUE TO BECOME MORE EFFICIENT IN OUR BUSINESS ON THE C.I.P. SIDE. THE CAPITAL IMPROVEMENT PROGRAM SIDE. ONE PROCESS THAT WE ARE IMPLEMENTING IS TO -- TO ENHANCE OUR TECHNOLOGY APPLICATIONS IN ENGINEERING SERVICES. WE ARE DOING THIS WITH AN INVESTMENT OF 79,000 FOR HARDWARE AND SOFTWARE IN THE FIRST YEAR AND EXPECT SAVINGS OF ABOUT 500,000 IN THE SAVINGS -- AND THE SAVINGS ARE ACTUALLY EFFICIENCY SAVINGS MUCH WE DON'T HAVE TO SPEND AS MUCH TIME TO DESIGN A PROJECT AND THEREFORE CAN USE THE SAME RESOURCES ON MORE PROJECTS DURING THE SAME AMOUNT OF TIME. WHICH MEANS THAT WE ARE REDUCING THE CHARGES TO ANY GIVEN C.I.P. FOR WHICH WE PROVIDE DESIGN SERVICES. THE SECOND MAJOR PROCESS IMPROVEMENT IS AN INITIATIVE THAT THE CITY MANAGER HAS INDICATED TO YOU IN THE FIRST PRESENTATION OF THE POLICY BUDGET. AND THIS INCLUDES THE CONSIDERATION OF -- OF STANDARDIZING PROJECT MANAGEMENT SERVICES THROUGHOUT THE CITY ORGANIZATION, THE INTENT IS TO COMPLETE A CITY-WIDE STUDY AND REVIEW OF HOW THIS CAN BE ACCOMPLISHED AND WHAT IT WOULD YIELD WITHIN -- WITHIN THE NEXT FISCAL YEAR AND TO -- TO IMPLEMENT ANY RECOMMENDED SOLUTIONS FOR STANDARDIZATIONS WITHIN FISCAL YEAR 2004. AS FAR AS OUR PROPOSED CAPITAL BUDGET IS CONCERNED, WE ARE ASKING FOR NEW APPROPRIATION OF 14.6 MILLION, THAT BREAKS DOWN IN STREET RESURFACING OF 100,000, THE NUMBER SHOWN SEPARATELY BECAUSE THAT'S ACTUALLY COMING FROM THE STREET DAMAGE RECOVERY FEE, WHICH IS THE FEE WE CHARGE FOR UTILITY CUTS AND LONG-TERM DAMAGE THAT THEY MAY BE CAUSING. AND THEN -- THEN THE REMAINDER IS EARMARKED FOR STREET RECONSTRUCTION OUT OF THE 98 BONDS. THE LAST SLIDE, NUMBER 11, SHOWS YOU SOME REPRESENTATIVE PROJECTS THAT WILL BE FUNDED OUT OF THE $14.5 MILLION IN CAPITAL -- IN NEW CAPITAL APPROPRIATIONS. WITH THAT, I'M -- I'M HAPPY TO RESPOND TO ANY QUESTIONS THAT YOU MAY HAVE.

Mayor Garcia: WHO HANDLES THE CAPITAL METRO STUFF, THE CAPITAL METRO REVENUE THAT --

THE REVENUE IS MANAGED THROUGH TRANSPORTATION PLANNING AND SUSTAINABILITY. AND --

[INAUDIBLE]

NO. ONLY TO THE EXTENT THAT -- THAT WE DESIGN AND CONSTRUCT, FOR INSTANCE, RECONSTRUCTION PROJECTS WITH SOME FUNDING ALLOCATIONS FROM THE PROGRAM WE ARE INVOLVED IN GETS TRANSFERRED INTO OUR BUDGET.

Mayor Garcia: BUT IS IT IN THIS BUDGET?

NO.

Mayor Garcia: WHICH BUDGET WOULD THAT BE?

TRANSPORTATION BUDGET.

Mayor Garcia: TRANSPORTATION BUDGET. ALSO WHEN I LEFT THE COUNCIL IN THE YEAR 2000, WE WERE TALKING ABOUT A PROCESS FOR STREET CUTS, A POLICY, I DON'T KNOW IF THAT WAS PASSED AFTER I LEFT. I KNOW THAT WE HAVEN'T DEALT WITH IT SINCE I HAVE COME BACK. IT HAD TO DO WITH -- WITH SEVERAL THINGS, ONE WAS COORDINATION, THE OTHER ONE WAS A NON-REPRESENTATIVE, -- NON-REPETITIVE WHERE YOU GO IN AND CUT AND THE MINIMUM THEY FINISH THEY GO IN AND CUT BEGIN. AND THE THIRD ASPECT HAD TO DO WITH -- WITH THE QUANTITY OF THE -- OF THE RECONSTRUCTION SO THAT THE LIFE OF THE STREET WOULD NOT BE SHORTENED AS A RESULT OF THE STREET CUT. CAN YOU SPEAK A LITTLE BIT TO THOSE THINGS?

YES, SIR. WHAT YOU ARE REFERRING TO IS AN AUDIT THAT WAS PERFORMED BY THE CITY AUDITOR AND PRESENTED TO THE CITY COUNCIL. I'M VERY PLEASED TO SAY THAT ALL OF THE AUDIT COMMENTS EITHER HAVE BEEN COMPLETED OR ARE WELL UNDERWAY. I THINK THE MAJOR STEP THAT THE CITY HAS TAKEN WHILE YOU WERE OUT OF OFFICE IS TO PASS AN ORDINANCE THAT GOVERNS EXCAVATION IN THE RIGHT-OF-WAY. IT'S CONSIDERED ONE OF THE MOST EXTENSIVE AND TOUGHEST ORDINANCES IN THE COUNTRY. AND IT HAS GIVEN US A LOT MORE CONTROL OVER WHERE CUTS OCCUR, WHEN CUTS OCCUR, HOW MUCH IS BEING CUT, WHETHER IT'S ACTUALLY A CUT OR WHETHER IT'S BORED OR TUNNELED UNDER THE STREET AND -- AND WE ARE ALSO -- WE ALSO HAVE -- MADE CHANGES TO THE REQUIREMENTS OF REPAIRING STREET CUTS. YOU WILL SEE THAT WE ARE NOW MORE FREQUENTLY HAVE FULL LANE WIDTH REPAIRS RATHER THAN JUST THE -- THE BASIC EXCAVATION OF THE CUT ITSELF AND WHAT WE HAVE INCLUDED AGAIN IN THE BUDGET IN THE PROPOSED BUDGET, THE RIGHT-OF-WAY MANAGEMENT GROUP, IS INTENDED TO PUT FURTHER FOCUS AND STRENGTH BEHIND THE ORDINANCE AND BEHIND COUNCIL'S DESIRE TO REDUCE STREET CUTS AND IF THEY ARE UNAVOIDABLE TO MAKE SURE THAT THEY ARE REPAIRED AND -- IN THE MOST DURABLE WAY POSSIBLE.

Mayor Garcia: IS COLORADO STREET BETWEEN 9TH AND 10TH EVER GOING TO BE FINISHED?

EVENTUALLY, I --

IT --

WE ARE LOOKING FOR A DOWNTOWN PROGRAM. CERTAINLY WITH THE NEXT BOND ELECTION WE HAVE SOME MONEY IN THE RECONSTRUCTION, BUT IN THE RECONSTRUCTION FUNDS EARMARKED FOR DOWNTOWN STREETS, I THINK IT IS PROBABLY WHAT WE WOULD WANT TO DO IS TIE IT IN WITH THE GREAT STREETS PROGRAM SO WE DON'T RECONSTRUCT THE STREET AND THEN WE IMPLEMENT GREAT STREETS, CHANGE THE GEOMETRY OF THE ROAD AND UNDO PART OF WHAT WE JUST HAVE DONE. SO WE ARE WORKING AND LOOKING AT THE GREAT STREETS PROGRAM AND MAKE SURE THAT ULTIMATELY WE MAKE THIS A COORDINATED AND CONCERTED EFFORT TO MAKE IT EFFICIENT IN TERMS OF THE USE OF FINANCIAL RESOURCES.

Mayor Garcia: QUESTIONS FOR MR. REIKE? COUNCILMEMBER SLUSHER?

SLUSHER: MR. REIKE, YOU HAD SAID YOU ARE GOING DOWN ON THE PERCENTAGE OF STREETS THAT YOU RECEIVE MAINTENANCE, YOU ARE GOING UP SOME ON THE RECONSTRUCTION? WHAT IS THE LONG-TERM IMPACT BOTH IN TERMS OF COST AND CONDITIONS OF THE STREETS OF -- OF DOING A LITTLE LESS THIS YEAR.

THERE IS NOT LIKELY GOING TO BE AN IMMEDIATE IMPACT. I THINK WHAT WE WILL HAVE TO WATCH OVER THE NEXT YEARS IS HOW THE RATIO BETWEEN STREETS IN FAIR TO EXCELLENT CONDITION TO STREETS IN POOR AND FAIR CONDITION MAY BE AFFECTED BY IT. I THINK WITH 8% WE ARE SCRAPING THE BOTTOM IN TERMS OF WHAT IS A PRUDENT APPROACH TO PREVENTIVE MAINTENANCE. BUT I DON'T -- I THINK, YOU KNOW, WE CAN HOLD OUR OWN FOR THE MOMENT FOR -- FOR A YEAR OR TWO AND THEN WE PROBABLY WOULD HAVE TO SAY -- MAYBE TO CHANGE OUR MIX OF PREVENTIVE MAINTENANCE ACTIVITIES TO STRETCH OUR DOLLARS FURTHER AND THEN WE WOULD HAVE TO START LOOKING AT POSSIBLY MORE FEES OR OTHER SOURCES OF FUNDING TO DEAL WITH PREVENTIVE MAINTENANCE.

Slusher: OKAY. I UNDERSTAND IT'S A TIGHT BUDGET. YOU KNOW WHAT I'M DRIVING AT, WE DON'T WANT TO GET IN A SITUATION LIKE WE ARE JUST NOW STARTING TO CATCH UP FROM WHERE STREET MAINTENANCE WAS CUT PRETTY DRAMATICALLY DURING THE LATE '80'S. AND THEN THAT -- CAUSED THE STREETS TO GET IN BAD CONDITION AND COSTS MORE TO FIX THEM. WHEN WE DID.

WE ALSO ARE ACTUALLY LOOKING AT SOME EFFICIENCY IMPROVEMENTS WITHIN STREET AND BRIDGE BY -- THROUGH POSSIBLE SCHEDULE CHANGES THAT ALLOW US TO INCREASE EFFICIENCY AND GET MORE WORK DONE IN THE SAME AMOUNT OF TIME, BEING PERFORMED ON SATURDAY RATHER THAN DURING WEEKDAYS IN ORDER TO STREET THE -- STRETCH THE AMOUNT OF FUNDING THAT WE HAVE.

Slusher: OKAY, THANK YOU, SIR.

Mayor Garcia: FURTHER QUESTIONS FOR MR. REIKE? COUNCILMEMBER WYNN?

Wynn: THANK YOU, MAYOR. MR. REIKE ON SLIDES 2 AND 3, IT SHOWS THE SUMMARY OF SOURCES AND USES OF YOUR FUNDS. HELP ME UNDERSTAND HOW -- HOW YOUR ANNUAL BUDGET CAN CHANGE RELATIVELY DRAMATICALLY BASED ON OTHER DEPARTMENTAL PUBLIC WORK PROJECTS? YOU KNOW, LIKE FOR BUILDING A BRANCH LIBRARY OR A POLICE STATION OR A FIRE -- A POLICE SUBSTATION OR A FIRE STATION OR SOMETHING. HOW WHERE WOULD THAT SHOW UP IN YOUR SOURCES AND USES? BECAUSE REMIND ME, ULTIMATELY YOU ALL TAKE -- SOME OF YOUR FUNDS CAME COME FROM A PORTION OF THE G.O. BONDS AS AN EXAMPLE, PASSED TO BUILD A LIBRARY, HOW DOES THAT SHOW IN YOUR -- IN YOUR PIE CHART HERE?

REIKE: IN THE PIE CHART IT IS SHOWN AS C.I.P. PROJECTS, 31% AT [INAUDIBLE], ON SLIDE 2 WHERE WE SHOW THE SOURCES OF FUNDS. AND IN -- IN -- IN PROPOSED USES OF OPERATING FUNDS, IT'S SHOWN AS A 28% CAPITAL PROJECTS DELIVERY. WITH 11.3 MILLION. THE REST GOES INTO, FOR INSTANCE, A TRANSPORTATION FUND FOR PROJECTS THAT WE REPAIR OR WORK ON WITH OUR STREET CREWS. IF -- IF WE -- WE MANAGE PROJECTS FOR ALMOST ALL CITY DEPARTMENTS THAT HAVE CAPITAL IMPROVEMENT PROJECTS, INCLUDING WATER AND WASTEWATER AND AUSTIN ENERGY. AND IF THERE WERE A -- A REDUCTION IN FUNDING FOR CAPITAL PROJECTS, WE WOULD HAVE TO MAKE CORRESPONDING REDUCTIONS TO BOTH OUR SPENDING LEVELS AS WELL TO OUR STAFFING LEVELS.

Wynn: SO AS PART OF THE -- OF THE LARGER ANALYSIS THAT WE ALL DO ABOUT -- ABOUT WHICH BOND PROJECTS ARE COMING FORWARD ON AN ANNUAL BASIS, I GUESS IN THEORY PART OF THAT IS BASED ON -- ON YOUR SHOP AND YOUR WORKLOAD AND YOUR STAFFING, ET CETERA, RIGHT?

REIKE: WELL, TO MAKE IT -- TO GIVE YOU THE BIG PICTURE ON THIS, WHEN WE PREPARED FOR THE '98 BOND ELECTION, THE CITY MANAGER AT THE TIME ASKED THE PUBLIC WORKS DEPARTMENT TO PREPARE ALL PROJECT ESTIMATES OR REVIEW ALL PROJECT ESTIMATES. AND FOR THE MOST PART, WE WERE IN [INAUDIBLE] WITH THEM. WE HAVE A SPECIFIC APPROACH AS TO HOW WE ESTIMATE THOSE PROJECTS, WHICH INCLUDES INTERNAL PROJECT MANAGEMENT COST, ANY SPECIFIC PROGRAMS THAT THE CITY WOULD INCLUDE IN THOSE KIND OF PROJECTS THAT ARE NOT INCLUDED IN THE PRIVATE SECTOR, SUCH AS ART IN PUBLIC PLACES. AND SIMILAR THINGS. AND SO THE PROJECT BUDGETS THAT WERE DEVELOPED AND WENT INTO THE '98 BOND ELECTION PACKAGE ALREADY INCLUDED ESTIMATES FOR ALL OF THOSE COSTS. SO THEY ARE AN INTEGRAL PART OF THE PROJECT BUDGET FOR EACH PROJECT.

Wynn: OKAY. BUT AGAIN FOR ME TO UNDERSTAND THIS -- THIS ON CHART 2 YOUR SOURCES, SO THAT -- SO THAT -- ACTUALLY, LET'S GO TO CHART NUMBER 3. WE SHOW THE CAPITAL PROJECTS DELIVERY OF 28% OR 11.3 MILLION, THAT'S -- THAT IS ENTIRELY MADE UP OF -- OF WHAT I CALL A NON-PUBLIC WORKS C.I.P., I MEAN, THAT'S NOT -- THAT'S NOT STREET RESURFACING AND OTHER PROJECTS THAT YOU ARE DOING, THAT'S ALL OTHER DEPARTMENTAL WORK THAT ESSENTIALLY, YOU KNOW, HIRES THE PUBLIC WORKS DEPARTMENT TO --

REIKE: WELL, IT BREAKS DOWN ACTUALLY IN SEVERAL COMPONENTS. IT INCLUDES C.I.P. INSPECTIONS WITH -- IN OTHER WORDS FOR WATER AND WASTEWATER PIPELINES OR ROAD CONSTRUCTION WE HAVE CITY INSPECTORS THAT DO PROVIDE FOR QUALITY ASSURANCE. AS AS REMOVAL AND MANAGEMENT, FEDERAL -- ASBESTOS REMOVAL AND GET, FIRST ONE, SECOND ONE 300,000. PROJECT MANAGEMENT SERVICES THEMSELVES ARE THE KIND THAT YOU REFER TO ABOUT -- ABOUT 4.6 MILLION. ENGINEERING SERVICES, WHERE WE DESIGN FACILITIES, ABOUT 2.6 MILLION. AND REAL PROPERTY ACQUISITION, WHICH IS PART OF THIS PROCESS AS WELL, IS ABOUT 1.5 MILLION.

Wynn: OKAY.

SO IT'S A NUMBER OF DIFFERENT COMPONENTS. JUST AS -- TO FINISH MY PART OF THIS, WE ARE ORGANIZED LIKE A PRIVATE COMPANY IN THE SENSE THAT WE -- THAT WE -- WE NEGOTIATE SERVICE AGREEMENTS WITH OUR CLIENT DEPARTMENTS. SO WE DON'T HAVE A FIXED FEE OR WHATEVER. WE -- WE CUSTOM TAYLOR OUR SERVICES AND -- CUSTOM TAILOR OR SERVICES THEREBY THE REVENUE BASED ON THE SPECIFIC PROJECT NEEDS OF ANY GIVEN PROJECT THAT WE ASSIST IN MANAGING OR PROVIDE SERVICES FOR.

Wynn: OKAY. THANK YOU, MAYOR. [ONE MOMENT PLEASE FOR CHANGE IN CAPTIONERS] THEY ACTUALLY HAVE CITY PEOPLE WHO BUILD THOSE?

UNDER CERTAIN CIRCUMSTANCES, CITY PERSON MAY ACTUALLY CONSTRUCT THEM LIKE THE A.D.A. COMPATIBLE SIDEWALK AT LCRA. WE BUILT THAT WITH FUNDS FROM CPSD. TYPICALLY THE WORK IS PERFORMED BY CONTRACTORS AND SOME OF THE WORK IS DESIGNED IN-HOUSE, SOME OF IT IS DESIGNED BY CONSULTANTS.

Goodman: AND LATER ON, NOT TODAY, IS IT POSSIBLE TO GET THE ESTIMATED BEGINNING AND COMPLETION DATES FOR THE STREET RECONSTRUCTION PROJECT?

YES, MA'AM.

Goodman: AND THE LAST THING I WOULD SAY IS EVEN THOUGH WE'RE GOING BACK TO 1999 LEVELS ON STREET MAINTENANCE, STILL EIGHT PERCENT THIS YEAR IS -- I LOST MY CHART.

THE PREVIOUS PAGE.

Goodman: EIGHT PERCENT IN '99 WAS 437 MILES. AND IN 2003 IT'S 545. SO WE ARE KEEPING UP IN ONE CONTEXT AND I WANTED TO MAKE SURE THE PEOPLE KNEW THAT.

Mayor Garcia: AND JUST IF I MAY, PART OF THE REASON WHY THE PREVENTIVE MAINTENANCE IS DROPPING IS NOT ONLY BECAUSE WE'RE NOW SETTING MORE MONEY ASIDE FOR SIDEWALK, MAINTENANCE AND REPAIR, BUT WE'RE ALSO SETTING MORE MONEY ASIDE FOR BRIDGE MAINTENANCE AND REPAIR, WHICH IS ANOTHER PROGRAM THAT WE NEED TO START FOCUSING ON. AS YOU KNOW, THE SHOAL CREEK BRIDGE, FOR INSTANCE, THE PROBLEMS WE HAD WITH THE FLOODS LAST NOVEMBER, WE ARE LOOKING AT MORE EXTENSIVELY PREEMPTIVELY WORKING ON BRIDGE ISSUES THAN WE HAVE BEEN ABLE IN THE PAST, WHICH THESE SET ASIDES HAVE REDUCED PREVENTIVE MAINTENANCE SOMEWHAT.

Mayor Garcia: COUNCILMEMBER ALVAREZ?

Alvarez: YES. I JUST HAD A COUPLE OF QUESTIONS. I HAVEN'T HAD A CHANCE TO LOOK AT THE FIVE-YEAR CIP PLAN, BUT AS I WAS LOOKING AT THE CAPITAL BUDGET AND I JUST HAD A QUESTION ABOUT THE LEVELS OF FUNDING FOR A COUPLE OF THE CATEGORIES. ONE IS A.D.A. RAMPS AND SIDEWALKS, WHICH IS LISTED AT 250,000, BUT I THOUGHT WE WERE INVESTING MORE THAN THAT. THAT'S IN THE CAPITAL BUDGET.

WELL, THAT WOULD BE IN THE CAPITAL BUDGET FOR TRANSPORTATION, PLANNING AND SUSTAIN ABILITY, NOT IN THE PUBLIC WORKS BUDGET.

Futrell: AND COUNCILMEMBER, I DON'T HAVE THE EXACT NUMBER WITH ME, BUT WE HAD UNSPENT, UNALLOCATED DOLLARS OF SOMETHING LIKE 1.2 MILLION, PLUS 250,000 OF NEW DOLLARS. SO WE HAD A TOTAL THAT WE'RE GOING TO BE ABLE TO --

[ INAUDIBLE ]

Futrell: AND NEN IN ADDITION TO THAT WE HAD 500,000 FOR THE MASTER PLAN, WHICH IS ACTUALLY SOMETHING THE MAYOR'S COMMITTEE FOR SOME TIME AS LISTED AS A NUMBER ONE PRIORITY FOR THEM. SO WE SAT DOWN WITH THE DIFFERENT INTERESTS AND ADVOCACY GROUPS AND WALKED THROUGH THOSE DOLLARS, BUT YOU HAVE 1.4 PLUS MILLION THAT WILL GO INTO ACTUAL STREET AND SIDEWALK CURB WORK.

Alvarez: I GUESS I WAS JUST WONDERING BECAUSE I HEARD THERE WAS A GREATER SUM AND THEN YOU LOOK AT THE CAPITAL BUDGET AND IT HAS A VERY SMALL SUM. AND WHERE IS THAT OTHER SUM REFLECTED IN THE BUDGET?

Futrell: IT'S IN ANOTHER -- PETER IS GOING TO GET A BUDGET AWARD FOR HAVING TO KNOW TWO DIFFERENT BUDGETS AT EVERY -- PETER IS ANSWERING QUESTIONS THAT WE WILL BE ABLE TO ANSWER FOR YOU AS PART OF THE TRANSPORTATION PRESENTATION. THIS IS REALLY AN AUSTIN SHOP, BUT PRIMARILY WHAT THEY'RE LISTING ARE THE NEW DOLLARS.

Alvarez: THE NEW PART. BUT WITH THE FIVE-YEAR -- BECAUSE I'VE NOT SEEN A PLAN THAT HAS LAST YEAR WITH X AMOUNT AND THEN SO MUCH WAS USED, SO MUCH WASN'T USED, AND THEN THIS YEAR A CERTAIN AMOUNT, ADDING TO WHATEVER THE ENDING BALANCE WAS.

WE'RE GOING TO GET YOU THE FIVE-YEAR SPENDING PLAN SO YOU CAN SEE EXACTLY HOW THE DOLLARS HAVE BEEN DISBURSED OVER THE YEARS.

Alvarez: SO SPECIFIC QUESTIONS ON THESE CATEGORIES WE SHOULD WAIT FOR TRANSPORTATION.

Futrell: I DON'T KNOW. WE COULD TRY TO STUMP PETER. HE'S DOING A PRETTY GOOD JOB OF THIS SO FAR. I DON'T KNOW, BETTY IS READY TO GO TOO.

> Alvarez: THE LAST FEW YEARS I WAS TALKING TO PETER JUST GETTING USED TO THE NEW WAY OF DOING THINGS HERE, BUT MAINLY YOU CAN ADDRESS IT OR WE CAN HAVE MR. LA BROCK ADDRESS IT, BUT THE OTHER THING I WANTED TO SEE WAS JUST A BREAKDOWN OF WHERE THE MONIES ARE BEING SPENT GEOGRAPHICALLY. I KNOW LAST YEAR WE DID HAVE A BREAKDOWN, SO SOME OF THE MAIN CATEGORIES I'M INTERESTED IN IS THE STREET RECONSTRUCTION, TSM, WHICH I DON'T SEE IN THE CAPITAL BUDGET. I DON'T KNOW IF THAT MEANS WE'RE NOT DOING ANY NEW TSM. AND THEN SIDEWALKS. SPECIFICALLY JUST TO SEE WHERE THE MONEY IS GOING AND IF WE HAVE ANY HISTORICAL DATA ALSO TO PREPARE THAT.

Mayor Garcia: LET ME SAY, PETER, THAT -- AND COUNCILMEMBER ALVAREZ, THAT THE AUDITOR IS DOING AN AUDIT OF WHERE THE MONEY IS BEING SPENT. THEY HAVE A MAP OF THE CITY THAT SHOWS THE DIFFERENT AREAS.

FOR THE PUBLIC WORKS PROJECTS, WE HAVE -- WE MAKE A VERY CONSCIENTIOUS EFFORT TO ADDRESS THE MAINTENANCE NEEDS AS EVENLY AS POSSIBLE OVER THE SIX-YEAR PROGRAM AS FAR AS STREET RECONSTRUCTION FUNDS ARE CONCERNED. AND OVER A TWO OR THREE CYCLE ACROSS THE CITY BECAUSE IT'S -- BY THE WAY WE DO MAINTENANCE, IT'S NOT ALWAYS POSSIBLE TO DO SOMETHING EFFICIENTLY IN VARIOUS PARTS OF THE TOWN IN THE VERY SAME YEAR, BUT IF WE WORK IN SOUTH AUSTIN THIS YEAR, WE MAKE SURE THAT WE WORK IN NORTH AUSTIN THE NEXT YEAR AND IN EAST AUSTIN. SO I THINK YOU WILL FIND FROM THE AUDITOR'S REPORT THAT IT IS VERY WELL SPREAD OUT AND EQUALLY DISTRIBUTED OVER ALL PARTS OF THE CITY.

Futrell: AND WE'LL WORK ON GETTING SOME SUMMARY DATA TO YOU IN THE KEY AREAS THO SHOW BOTH PENNED SPENDING PLAN AND GEOGRAPHIC DISBURSE. SO YOU CAN SEE HOW IT BALANCES OVER TIME.

Alvarez: THANK YOU.

Mayor Garcia: COUNCILMEMBER THOMAS?

Thomas: THANK YOU. MR. RIEK, COULD YOU JUST -- IN THE CONCRETE REPAIR OF THE SIDEWALK, WHAT ARE YOU ACTUALLY DOING WHEN YOU DO THAT? ARE THOSE COMPLAINTS FROM CITIZENS ON THE REPAIR OF SIDEWALKS?

UH-HUH. YES, SIR. PRIMARILY THEY ARE BASED ON REPORTS FROM CITIZENS THAT BRING BROKEN OR DEFECTIVE SIDEWALKS TO OUR ATTENTION.

Thomas: AND DO WE ACTUALLY GO OUT AND REMOVE THE CONCRETE? HOW ARE WE DOING THE REPAIRS? I KNOW IT SAYS CONCRETE HERE.

IT DEPENDS, BECAUSE IN THE PAST WE'VE HAD VERY LITTLE MONEY EARMARKED FOR THESE PROGRAMS, WE PRIMARILY HAVE TRIED TO REMOVE ANY AS HAZARDS THAT MAY BE ASSOCIATED WITH BROKEN SIDEWALKS OR WE MAY NOT HAVE REMOVED THE CONCRETE AND RECONSTRUCTED IT, BUT WE MAY HAVE LEVELED ANY KIND OF UNEVENESS, FOR INSTANCE, WITH ASPHALT RATHER THAN USING CONCRETE. WE'RE LOOKING AT IMPROVING THE PROGRAM IN TERMS OF THE WAY WE ARE DOING THESE REPAIRS, BUT IT, AGAIN, IS A SUBJECT FOR DRASING THE NEED VERSUS THE FUNDING AVAILABLE AND WE WANT TO MAKE SURE IF NOTHING ELSE WE ELIMINATE ANY POSSIBLE SAFETY HAZARDS.

Thomas: THE REASON I WAS ASKING IS I GET SEVERAL COMPLAINTS ABOUT THAT, THAT THE ASPHALT IS FINE, BUT IT'S CONTINUING TO PUT PRESSURE ON THE PIPES. THAT DOESN'T BOTHER YOU AS FAR AS WASTEWATER. SO THOSE ARE THE AREAS. AND IF I CAN GET A LIST OF WHERE YOU'RE GETTING THE MOST COMPLAINTS.

OKAY.

Thomas: THANK YOU.

Futrell: COUNCILMEMBER, FOR A PERIOD OF TIME WE ACTUALLY EVEN TRIED TO HAVE A MATCHING PROGRAM WHERE -- BECAUSE PART OF THE PROBLEM IS WHERE YOU FOCUS ON SIDEWALK REPAIRS. OBVIOUSLY ALONG THE ARTERIALS AND NEIGHBORHOOD COLLECTORS ARE WHERE WE WOULD FOCUS FIRST, BUT EVEN THE SIDEWALKS IN THE NEIGHBORHOOD STREETS TAKE QUITE A BEATING. SO THERE ARE A NUMBER OF THINGS WE TRIED TO DO OVER TIME TO IMPROVE HOW WE HANDLE IT. ALSO THE A.D.A. MASTER PLAN, THE 500,000 THAT IS PART OF OUR QUARTER-CENT, THAT'S GOING TO HELP MAP ON THE KEY SIDEWALK AREAS ALL OVER TOWN WHERE THOSE BIG BREAKS OR BARRIERS ARE. SO IT WILL HAVE A DUAL PURPOSE FOR US.

TOM.

Mayor Garcia: ONE FINAL QUESTION, PETER. THE MEDIA HAS REPORTED THAT PFLUGER BRIDGE HAS SERIOUS STRUCTURAL PROBLEMS. READING THE ARTICLES AND LISTENING TO THE NEWS, YOU WOULD THINK THAT THAT BRIDGE IS GOING TO BE COMING DOWN RELATIVELY SOON. CAN YOU SPEAK TO THAT?

Futrell: BEFORE THAT COULD WE ASK ALL THE MEDIA TO STAND UP IN THE ROOM? THAT'S A JOKE, I'M SORRY. [ LAUGHTER ]

I'M VERY CONFIDENT TO SAY THAT THERE ARE NO STRUCTURAL ISSUES WHATSOEVER THAT WE ARE AWARE OF. THE ISSUE THAT HAS BEEN RAISED IN THE MEDIA DEALS WITH A CONCRETE TOPPING LAYER THAT'S ON TOP OF THE STRUCTURAL CONCRETE. AND THAT HAS SHOWN CRACKS. CONCRETE IS A VERY FICKLE MATERIAL AND WE ARE TRYING AT THE -- WE'VE ALREADY MADE SEVERAL ATTEMPTS AND USED DIFFERENT METHODOLOGIES TO FIX IT, SO FAR WITHOUT LASTING SUCCESS. WE ARE TRYING TO FIND A PERMANENT SOLUTION THAT WILL REPAIR THE TOPPING AND REDUCE THE NUMBER OF CRACKING, BUT I CAN TELL YOU WITH A STRAIGHT FACE THAT THERE'S ABSOLUTELY NO PROBLEM IN TERMS OF SAFETY OR OTHERWISE. IT'S AN AESTHETIC PROBLEM AND WE ARE WORKING TO FIX IT. AND OBVIOUSLY, DEPENDING UPON WHERE THE ISSUES LIE, WE'LL LOOK AT THE APPROPRIATE FUNDING ALLOCATIONS FROM THAT SOURCE.

Mayor Garcia: IS THAT COVERED BY WARRANTY?

IT'S PART OF THE WARRANTY WORK AND IT'S -- IT'S UNCLEAR WHETHER THIS IS A WORKMANSHIP ISSUE OR WHETHER IT'S A DESIGN ISSUE, SO IT DEPENDS ON ULTIMATELY WHAT WE FIND OUT BASED ON THE FIX THAT WILL ULTIMATELY ADDRESS IT.

Mayor Garcia: CONSTITUENT'S NOT GOING TO PAY FOR THE REPAIRS?

I THINK THAT ULTIMATELY WILL BE BROUGHT TO COUNCIL IN THE FORM OF A SETTLEMENT OR DISCUSSION WHEN WE HAVE FOUND OUT WHAT ALL THE ISSUES ARE. I DON'T SEE WHERE THE CITY HAS A DIRECT CAUSE IN ANY OF THESE PROBLEMS, BUT I'M NOT PREPARED TO ANSWER THAT.

Futrell: BUT ELABORATE ON THAT A LITTLE BIT BECAUSE WE HAVE TAKEN A LOT OF HEAT ABOUT THIS, PEOPLE QUESTIONING WHETHER OR NOT -- IN FACT, ONE OF THE LANGUAGE WAS WHETHER OR NOT THE LIGHTS WERE BRIGHT AT CITY HALL. OBVIOUSLY WE HAVE WARRANTIES THAT ARE TAKEN OUT ON ALL THE WORK, BUT YOU HAVE TO FIRST DETERMINE THE SOURCE OF THE PROBLEM AND THEN PROVE IT IN ORDER TO ACCESS THE WARRANTY. AND THAT'S THE STAGE WE'RE IN RIGHT NOW.

Mayor Garcia: CORRECT.

Futrell: SOMEONE USED AN ANALOGY OF IT'S LIKE GOING TO BUY A CAR AND YOU SHOULD JUST RETURN THE CAR AND TELL THEM TO FIX IT. AND IN OUR CASE IT'S NOT THAT SIMPLE. THERE ARE MULTIPLE PRODUCTS AND PEOPLE INVOLVED IN A CONSTRUCTION PROJECT AND YOU HAVE TO ISOLATE THE SOURCE BEFORE YOU CAN GO AFTER THE WARRANTY.

Mayor Garcia: FURTHER QUESTIONS?

Goodman: MAYOR, NOT A QUESTION, BUT A COMMENT. IT WOULD ALSO BE GOOD IF PEOPLE REMEMBERED TO DO A LITTLE RESEARCH BEFORE THEY PRESUME TO KNOW SOMETHING AND TO TELL OTHER PEOPLE INSTEAD OF THINKING IT'S AN ABSOLUTE.

Mayor Garcia: I THINK EVERYBODY AGREES WITH YOU ON THAT, MAYOR PRO TEM.

Futrell: PETER, WERE YOU GOING TO MOVE THROUGH OUR CAPITAL PROJECTS NEXT?

WE HAVE HIGHLIGHTS ON THAT.

Futrell: OKAY.

WE QUICKLY WANT TO TALK ABOUT THE 1998 GENERAL OBLIGATION BOND PROGRAM. WE HAVE TO GIVE YOU AN UPDATE ON THIS. THE HIGHLIGHTS OF THE PROGRAM, AS YOU MAY RECALL, THE VOTERS AUTHORIZED A TOTAL OF ABOUT 340 MILLION IN BOND AUTHORIZATION IN NOVEMBER OF 1998. WE COMMITTED THAT THIS PROGRAM WOULD BE TAKEN CARE OF WITHIN A SIX-YEAR TIME PERIOD. FISCAL YEAR 2003 IS THE FOURTH YEAR OF THAT SCHEDULE. AS FAR AS THE GENERAL OBLIGATION BONDS ARE CONCERNED, THERE WERE FIVE PROPOSITIONS, TRANSPORTATION AS PROPOSITION NUMBER ONE, PARKS, PUBLIC SAFETY, LIBRARIES AND CULTURAL CENTERS, AND FLOOD, EROSION AND WATER QUALITY CONTROL AS PROPOSITION NUMBER 5. THE NEXT CHART SHOWS CURRENT APPROPRIATIONS AND EXPENDITURES FOR THE VARIOUS PROPOSITIONS. AS YOU CAN SEE AT THE BOTTOM OF THE CHART YOU HAVE P-1, WHICH IS PROPOSITION 1, TRANSPORTATION. P-2, CONVERSELY PROPOSITION 2 FOR PARKS. AND YOU CAN SEE FOR EACH OF THOSE WHAT THE CURRENT AMOUNT OF PROPOSITIONS AND THE CURRENT LEVEL OF EXPENDITURES ARE. THE NEXT SLIDE SHOWS THE SPECIFIC APPROPRIATION AND EXPENDITURES FOR FISCAL YEAR 2003. AND THESE ARE CUMULATIVE. THEN THE SLIDE NUMBER 4 GETS INTO THE DETAILS OF THE VARIOUS PROPOSITIONS. PROPOSITION NUMBER 1, TRANSPORTATION, A TOTAL OF 152 MILLION, WAS AUTHORIZED. PROJECTS THAT ALREADY HAVE BEEN COMPLETED ARE THE TRAFFIC SIGNAL SYSTEM UPGRADE. WE HAVE RECONSTRUCTED 41 LANE MILES OF STREETS. AND THE SOUTH FIRST STREET EXTENSION AND RURTSDZ FORD STREET IMPROVEMENT PROJECT. HIGHLIGHTS FOR THE COMING BUDGET YEAR IS A TOTAL OF 19.2 MILLION IN NEW APPROPRIATIONS, WHICH WOULD INCLUDE 28 LANE MILES OF RECONSTRUCTION AND THEN WORK ON BARTON SPRINGS ROAD, DITTMAR, DORSETT AND LOYOLA. AT THIS POINT IN TIME, PROPOSITION NUMBER 1 SHOULD BE COMPLETE WITHIN THE SIX YEARS, THE YEAR 2005. PROPOSITION NUMBER 2, PARKS, A TOTAL OF 75.9 MILLION WERE AUTHORIZED. COMPLETED PROJECTS INCLUDE THE ACQUISITION OF 1,343 AIBLGERS OF DESTINATION PARKS AND GREEN WAYS. THE JOINT USE FACILITY WITH AISD, THE MONTOPOLIS BALL FIELD EXPANSION. HIGHLIGHTS FOR 23 ARE 17.1 MILLION IN NEW PROPOSITIONS WORK ON THE CASWELL -- COMPLETION OF THE CASWELL TENANT CENTER, MABEL DAVIS PLAYSCAPE, THE CONSTRUCTION OR CONTINUED CONSTRUCTION OF THE CANTU PAN AM REC CENTER, CHESTNUT PARK DEVELOPMENT AND THE SOUTH SOCCER COMPLEX. AND AS FAR AS DESIGN IS CONCERNED, THE COLORADO RIVER PARK, THE COLONY PARK RECREATION CENTER AND THE GUS GARCIA RECREATION CENTER. AGAIN, THE PARKS PROJECTS ALSO ARE ON TRACK TO COMPLETE BY 2005.

Mayor Garcia: I WORK WITH THEM ALL THE TIME.

PROPOSITION NUMBER 3, PUBLIC SAFETY, A TOTAL OF 54.7 MILLION WERE AUTHORIZED TO COMPLETE THE PROJECT AS YOU KNOW, RECENTLY, THE AUSTIN E.M.S. HIGHLIGHTS OF 2003 INCLUDES CONTINUED CONSTRUCTION ON THE COMBINED EMERGENCY CENTER, CENTRAL EAST SUBSTATION AND FORENSIC CENTER. E.M.S. STATIONS AND THE FAR SOUTHEAST E.M.S. STATION. AND NOT ONLY CAN I SAY THAT THIS WILL BE COMPLETED BY THE YEAR 2005, IF YOU LOOK AT THE CHART ON PAGE NUMBER 3, YOU WILL SEE THAT WE ARE ALMOST COMPLETELY DONE BY THE END OF FISCAL YEAR 2003 WITH APPROPRIATIONS AND EXPENDITURES FOR THE PUBLIC SAFETY PROPOSITION. SO THEY'RE ALMOST COMPLETE WITH THAT PART OF THE '98 BOND ELECTION. THE FOCUS WAS CLEARLY ON PUBLIC SAFETY. POP SITION NUMBER 4, LIBRARIES AND CULTURAL CENTERS, 46-POINT 4 MILLION AUTHORIZED. HIGHLIGHTS FOR 2003, COMPLETION OF THE RUIZ BRANCH LIBRARY. CONTINUATION OF CARVER MUSEUM AND LIBRARY CONSTRUCTION AND DESIGN FOR THE SPICEWOOD SPRINGS LIBRARY AND THE MEXICAN AMERICAN CULTURAL CENTER. AND AGAIN, WE'RE ON TRACK. AND LASTLY, PROPOSITION NUMBER 5 FOR FLOOD AND EROSION CONTROL AS WELL AS WATER QUALITY MEASURES, A TOTAL OF 10.8 MILLION WERE AUTHORIZED. COMPLETED PROJECTS INCLUDE THE EAST 11th AND 12TH STREET STORM DRAIN IMPROVEMENTS AND THE PURCHASE OF 38 HOMES AS PART OF THE ONION CREEK BUYOUT. HIGHLIGHTS FOR THIS YEAR IS TO BEGIN CONSTRUCTION ON THE CREEK BEND FLOOD CONTROL PHASE 2, WHICH TIES IN WITH THE LOYOLA STREET IMPROVEMENT PROJECT. AND AGAIN, WE ARE ON TRACK WITH THESE PROJECTS. OVERALL SINCE 1999 THE CITY HAS EXPENDED A TOTAL OF ABOUT $1.62 BILLION FOR CONSTRUCTION SERVICES, CONSULTANT SERVICES, EQUIPMENT FURNISHINGS, MATERIALS AND LAND. OF THE CONSTRUCTION DOLLARS, ABOUT 64% HAVE GONE TO FIRMS THAT ARE LOCATED IN THE AUSTIN MSA, AND THAT REPRESENTS ABOUT 584 MILLION. AND WE ARE LOOKING AT $607 MILLION IN EXPENDITURES OF THIS KIND IN FISCAL YEAR 2003. AND I THINK IT GIVES YOU AN IDEA AS TO THE MAGNITUDE AND THE IMPACT THAT THE SPENDING, THE CAPITAL PROGRAM SPENDING THAT THE CITY OF AUSTIN HAS ON THE LOCAL ECONOMY. AND THAT CONCLUDES MY PRESENTATION.

Mayor Garcia: QUESTIONS FOR MR. RIEK? COUNCILMEMBER THOMAS?

Thomas: MR. RIEK, ON PAGE 5 ON THE PROPOSITION 2, YOU HAVE 17.1 MILLION IN NEW FOR THE PARKS. IF YOU COULD JUST GIVE ME A BREAKDOWN LATER ON ON EACH ONE OF THE PARKS. AND ALSO I NEED TO ASK YOU A QUESTION ON -- NO, THAT'S IT.

Mayor Garcia: COUNCILMEMBER WYNN?

Wynn: THANK YOU. MR. RIEK, ON PAGE 5 THAT COUNCILMEMBER THOMAS TALKED ABOUT, WE SHOW THE PLAYSCAPE TO BE COMPLETED. DO YOU KNOW THE STATUS OF THE ENVIRONMENTAL CLEANUP AT MABEL DAVIS?

NO, BUT I'LL BE HAPPY TO GET YOU THAT INFORMATION. IT'S ONGOING, BUT I DON'T KNOW WHAT THE COMPLETION DATE IS AT THIS POINT IN TIME.

Wynn: SO THE PLAYSCAPE IS OBVIOUSLY SEPARATE AND NOT ASSOCIATED WITH THE SITE THAT HAS THE CONTAMINATION?

THAT'S MY UNDERSTANDING, BUT WE WILL VERIFY THAT FOR YOU.

Wynn: OKAY. AND THEN SECONDLY, AGAIN, WALK ME THROUGH PAGE 2 ESSENTIALLY, THE GRAPH THAT SHOWS THE FIVE PROPOSITIONS. WHAT EXACTLY IS THIS SAYING? ARE WE SAYING THAT AS AN EXAMPLE ON TRANSPORTATION, P-1, ARE WE SAYING THAT 32% OF THAT TOTAL PROPOSITION IS BEING -- WILL BE SPENT IN FISCAL YEAR '03?

HAS BEEN SPENT ALREADY OR WILL BE SPENT BY THE END OF THIS YEAR. AND PAGE 3 WILL ACTUALLY SHOW YOU WHAT WE EXPECT TO HAVE SPENT BY THE END OF FISCAL YEAR 2002-2003, THIS COMING FISCAL YEAR. AND SO WE EXPECT BY THAT -- BY THE END OF THAT YEAR TO HAVE SPENT 59%. SIN.

Wynn: SO THE DIFFERENCE BETWEEN APPROPRIATIONS, THE DARK SHADED GRAPH BAR AND EXPENDITURES, IS WHAT?

WELL, IF WE LET A CONSTRUCTION CONTRACT, LET'S SAY IT'S A 2-MILLION-DOLLAR CONTRACT, AT THE TIME WHEN YOU APPROVE IT, THE MONEY IS APPROPRIATED. IT'S APPROPRIATED IN PART OF THE BUDGET AND IT'S ENCUMBERED, BUT WE HAVEN'T EXPENDED IT YET UNTIL WE GET THE INVOICES FROM THE CONTRACTOR. SO THE ACTUAL EXPENSE DEPENDS ON THE CONSTRUCTION, BUT THE APPROPRIATION IS ALREADY ON THE BOOKS, SO THAT'S WHERE THE DIFFERENCE COMES FROM.

Futrell: ANOTHER WAY TO TALK ABOUT IT MIGHT BE TO LOOK AT APPROPRIATION AS A WAY OF SHOWING THAT THE PROJECT IS IS UNDERWAY BECAUSE IT WOULDN'T BE UNDERWAY WITHOUT THE MONEY HAVING BEEN APPROPRIATED.

Wynn: OKAY. THANK YOU.

Mayor Garcia: FURTHER QUESTIONS ON THE CAPITAL BUDGET?

Thomas: IF I CAN GO BACK, MAYOR, I FORGOT. ON PAGE 4 ON THE 19.2 MILLION IN NEW APPROPRIATION ON THE ROADS, BARTON SPRINGS AND DITTMAR AND THE REST OF THEM, THEN ON LOYOLA, IS THAT THE SECOND PHASE OR THE THIRD ON THE LOYOLA IMPROVEMENT?

LOYOLA LANE, THAT'S -- I THINK THAT'S THE SECOND PHASE AND THE THIRD PHASE IS STARTING. SO WE ARE BASICALLY HAVING TWO PROJECTS ON LOYOLA DURING THE NEXT FISCAL YEAR.

> Thomas: AND IF YOU COULD GIVE ME BARTON SPRINGS AND THE OTHER ONE.

BARTON SPRINGS IS SCHEDULED TO BE COMPLETED AT THIS POINT IN TIME IN NOVEMBER. DITTMAR ROAD IS GOING TO START NEXT YEAR AND HOPEFULLY COMPLETE. DORSETT ROAD IS I THINK GOING TO START JUST AT THE BEGINNING OF THE FISCAL YEAR.

Thomas: OKAY. THANK YOU.

I WILL CONFIRM ALL THAT INFORMATION.

Thomas: OKAY.

Mayor Garcia: FURTHER QUESTIONS FOR MR. RIEK? THANK YOU, MR. RIEK. OKAY. WE GO NOW TO WATER AND WASTEWATER.

MR. CHRIS LIPPE.

Mayor Garcia: WELCOME.

THANK YOU, MAYOR AND COUNCILMEMBERS. GOOD MORNING. MY NAME IS CHRIS LIPPE. I'M THE DIRECTOR OF THE WATER AND WASTEWATER UTILITY. IT'S A PLEASURE THIS MORNING TO PRESENT TO YOU THE PROPOSED 2002-2003 BUDGET FOR THE WATER AND WASTEWATER UTILITY. LET ME JUST TAKE A MOMENT TO RECOGNIZE THE EXECUTIVE TEAM THAT'S HERE WITH ME. A LOT OF WORK HAS GONE INTO THIS VERY CHALLENGING BUDGET AND LET ME INTRODUCE. RENAL DOUGH, WHO IS THE ASSISTANT DIRECTOR OF ENGINEERING. ANDY KOVAR, JANE, DAVID JUAREZ OVER THE FIELD OPERATIONS PROGRAM, AND OUR CHIEF FINANCIAL OFFICER AND ASSISTANT DIRECTOR IS HERE. WE HAVE BUILT THIS BUDGET AROUND A NUMBER OF BUSINESS PLAN GOALS, AND TO ACCOMPLISH OUR MISSION. FIRST IN THE AREA OF WATER AND WASTEWATER QUALITY, OUR GOALS ARE TO ENSURE PROTECTION OF PUBLIC HEALTH AND THE ENVIRONMENT, TO PROVIDE RELIABLE WATER SUPPLY AND ESSENTIAL SEWER SERVICES, AND DO THESE THINGS MEETING AND EXCEEDING REGULATORY STANDARDS AND REQUIREMENTS. OUR SECOND MAJOR GOAL AREA IS TO STRENGTHEN CUSTOMER SATISFACTION IN THE AREA OF SMART GROWTH, WE'LL CONTINUE TO IMPLEMENT STRATEGIES THAT SUPPORT CITYWIDE SMART GROWTH INITIATIVES IN THE DESIRED DEVELOPMENT ZONE. AND LET ME JUST COMMENT AT THIS POINT THAT LOOKING BACK OVER THE LAST FIVE YEARS, CURRENTLY 70% OF ALL SERVICE EXTENSION REQUESTS ARE IN THE DESIRED DEVELOPMENT ZONE. I THINK THAT PROGRAM IS -- THOSE INCENTIVES ARE SUCCESSFUL. FINALLY, OUR RATE STABILITY AND DEBT MANAGEMENT GOALS ARE TO MAINTAIN RATE STABILITY, ENSURE FINANCIAL COMPETITIVENESS AND DEFER RATE INCREASES UNTIL ABSOLUTELY NECESSARY. THIS NEXT SLIDE, PAGE 3, GIVES YOU A BUDGET OVERVIEW COMPARING CURRENT YEAR TO PROPOSED BUDGET. REVENUES AND TRANSFERS IN ARE DECREASING BY $15 MILLION AND THE OPERATING BUDGET REQUIREMENTS ARE ALSO DECREASING BY ALMOST $25 MILLION. BOTH OF THESE DECREASES ARE DUE PRIMARILY TO A ONE-TIME USE IN CURRENT YEAR OF CAPITAL RECOVERY FEE FUND. AND SO BY COMPARISON, THAT ONE-TIME TRANSFER IN AND USE WILL NOT BE PRESENT IN THE PROPOSED BUDGET. THE OPERATING BUDGET IS FURTHER REDUCED BY A 7-MILLION-DOLLAR REDUCTION IN DEBT SERVICE ACHIEVED THROUGH OUR DEBT MANAGEMENT PROGRAM FOR THE COMING YEAR. YOU SEE OUR CAPITAL BUDGET IS $13 MILLION LESS IN THE PROPOSED BUDGET FOR APPROPRIATIONS. AND THEN OUR FULL TIME EQUIVALENT NUMBER OF EMPLOYEES REMAINS CONSTANT AT 1,044. THE NEXT SLIDE LOOKS -- IS THE PIE CHART LOOKING AT SOURCES OF FUNDS. AGAIN, OUR REVENUE PROJECTION IS $267 MILLION. YOU'LL SEE THAT THE GREAT MAJORITY, 89% OF THE REVENUE, COMES FROM WATER AND WASTEWATER SERVICE REVENUES. THE OTHER COMES FROM MISCELLANEOUS FEES AND TRANSFERS IN FROM CAPITAL RECOVERY FEES. ON THE USES OF FUNDS, OUR 258 MILLION-DOLLAR BUDGET, WHAT I'D LIKE TO DO IS LOOK AT KIND OF THE RIGHT-HAND SIDE AND YOU WILL SEE FOUR MAJOR AREAS. OUR FOUR BASIC SERVICES OF WATER TREATMENT, WASTEWATER TREATMENT, DISTRIBUTION SYSTEM AND COLLECTION SYSTEM. AND THOSE ARE ALL IN THE APPROXIMATELY SEVEN PERCENT EACH OF OUR OPERATING BUDGET IN THE 17 TO 20-MILLION-DOLLAR RANGE. SUPPORTING THOSE ARE SUPPORT SERVICES. WE ALSO HAVE CONSERVATION AND REUSE AT $4.7 MILLION, BILLING AND CUSTOMER SERVICE AT $12 MILLION, AND THEN OTHER REQUIREMENTS. ALONG THE BOTTOM LEFT IS DEBT SERVICE, AND THAT'S 37% OF OUR OPERATING BUDGET. IT'S $95 MILLION. HOWEVER, THIS IS, AS I MENTIONED EARLIER, A SEVEN-MILLION-DOLLAR REDUCTION FROM THE CURRENT YEAR FOR DEBT SERVICE. AND FINALLY WE HAVE 18% OF THE BUDGET IS TRANSFERS OUT. AND I'LL ELABORATE ON THOSE IN JUST A MINUTE. IN FACT, THE NEXT SLIDE HIGHLIGHTS THE PROPOSED OPERATING BUDGET. TO BEGIN WITH, ON THE O AND M SIDE OF OUR -- ONE OF OUR MOST CHALLENGING PROGRAMS AND ISSUES FOR THE YEAR IS THE AUSTIN CLEAN WATER PROGRAM, WHICH IS THE OVERFLOW ABATEMENT PROGRAM FOR THE WASTEWATER COLLECTION SYSTEM. AND WE'RE INCLUDING FIVE AND A HALF MILLION DOLLARS ON THE O AND M SIDE OF THE BUDGET FOR MANAGING AND DOING PREVENTIVE MAINTENANCE AND CLEANING IN-HOUSE. JUST FOR YOUR INFORMATION ON THE CIP SIDE, WE'RE PROPOSING $38 MILLION ON THE CIP SIDE FOR THE AUSTIN CLEAN WATER PROGRAM JUST FOR THE COMING YEAR. ANOTHER NOTEWORTHY HIGHLIGHT IS THE ONE MILLION DOLLARS FOR THE FIRST FULL YEAR OF THE BALCONES CANYON LAND PRESERVES AND WATERSHED LAND MANAGEMENT PROGRAMS. OTHER HIGHLIGHTS, $4.7 MILLION IN CONTINUED FUNDING FOR CONSERVATION AND REUSE PROGRAMS. WE HAVE $24 MILLION IN CURRENT REVENUE TRANSFERS TO FUND CAPITAL PROJECTS. ABOUT $10 MILLION OF THAT IS FROM CAPITAL RECOVERY FEES. WE HAVE 19 $19 MILLION IN TRANSFERS TO THE GENERAL FUND. AND A TWO AND A HALF-MILLION-DOLLAR FUNDING, CONTINUED FUNDING FOR SUSTAIN ABILITY FUND. ON THE CAPITAL BUDGET SIDE, OUR HIGHLIGHTS ARE -- WE'RE PROPOSING 160-MILLION-DOLLAR NEW APPROPRIATION NEEDED FOR TREATMENT PLANT IMPROVEMENTS, REHABILITATION, RESERVOIRS, LIFT STATIONS, DISTRIBUTION AND COLLECTION, SERVICE ANNEXED AREAS AND OTHER IMPROVEMENTS. A COUPLE OF EXAMPLES OF OUR TREATMENT PLANT IMPROVEMENTS, WE HAVE THE YOU WILL RICK WATER TREATMENT PLANT EXPANSION AND SAFE WATER DRINKING PLANT IMPROVEMENTS THAT ARE MOVING FORWARD AND THE SOUTH AUSTIN REGIONAL TREATMENT PLANT EXPANSION. REHABILITATION AGAIN, 38 MILLION OF THAT REHAB DOLLARS IS FOR THE CLEAN WATER PROGRAM. AND THEN WE HAVE SOME OF THAT IS ALSO ON THE WATER SIDE OF THAT $48 MILLION NEW APPROPRIATION. RESERVOIRS, PUMP STATIONS, LIFT STATIONS, REALLY IS PART OF THE CLEAN WATER, -- AUSTIN CLEAN WATER PROGRAM. WE'RE UPGRADING AND RELIEVING A NUMBER OF WASTEWATER LIFT STATIONS, SO WE'RE NEEDING SOME ADDITIONAL FUNDING FOR THAT. AND THEN I GUESS AN EXAMPLE OF THE ANNEXED AREA PROGRAMS, DEL VALLE IS IN FULL SWING AT THIS POINT. THIS NEXT SLIDE SUMMARIZES THE BUDGET AND ITS EFFECT ON RATES AND FEES. WE ARE PROPOSING NO CHANGES TO FEES AND OTHER CHARGES, NO CHANGES TO WATER AND WASTEWATER RATES FOR RESIDENTIAL, MULTI-FAMILY, COMMERCIAL, INDUSTRIAL CUSTOMERS. THERE IS WHOLESALE CUSTOMER RATES ARE SET INDIVIDUALLY AND THERE IS AN ANNUAL ADJUSTMENT COST OF SERVICE ANALYSIS THAT'S PERFORMED INDIVIDUALLY FOR EACH WHOLESALE CUSTOMER. SO THE RESULT OF THAT THIS YEAR IS AN AVERAGE WHOLESALE WATER RATE INCREASE OF 2.2% AND AN AVERAGE WHOLESALE WATER RATE INCREASE OF 1.6%. I'D LIKE TO GO OVER A FEW OF OUR PERFORMANCE MEASURES AT THIS POINT. THE FIRST TWO ARE RELATED TO WATER QUALITY. THE FIRST IS OUR DRINKING WATER QUALITY. AND ONE OF THE KEY PARAMETERS IS TURPIDTY. A NOTE ABOUT THIS GRAPH, THIS IS NOT AVERAGE, AVERAGE NUMBERS, AVERAGE OF SAMPLES, THIS IS CLOSER TO THE MAXIMUM ALLOWABLE. THE STANDARD, THE FEDERAL AND STATE STANDARD HAS DECREASED FROM .5 NTU'S TO .3 NTU'S. SO OVER THE LAST FEW YEARS THROUGH CAPITAL PROJECTS AND JUST CONTINUOUS IMPROVEMENT OF OPERATOR TRAINING AND CONTINUOUS IMPROVEMENT PROCESSES, WE'VE DECREASED OUR NTU'S DOWN TO LESS THAN HALF OF THE REQUIRED POINT APPROXIMATE. AND AGAIN, -- .3. AND AGAIN, THIS IS 95% OF THE TIME THE SAMPLES ARE LESS THAN THESE NUMBERS SHOWN. SO IT'S VERY RELIABLE, VERY HIGH QUALITY AT OUR DRINKING WATER PLANTS. SIMILAR ON OUR WASTEWATER TREATMENT, ONE OF THE KEY PARAMETERS IS BIOCHEMICAL OXYGEN COMMAND IS A MEASURE OF THE -- HOW WELL TREATED THE WASTEWATER IS AT OUR PLANTS. THE PERMIT LIMIT IS 10 MILLIGRAMS PER LITER AND WE ARE ONE-FIFTH OF THAT AMOUNT, SO AGAIN, IT'S A VERY HIGH QUALITY, VERY RELIABLE TREATMENT. AND THAT THEN PROVIDES US WITH A HIGH QUALITY RECLAIMED WATER FOR OUR RECLAIM AND REUSE PROGRAMS. IT ALSO HAS RESULTED IN AN UNUSUAL RANKING OF THE WATER QUALITY IN THE COLORADO RIVER DOWNSTREAM OF AUSTIN. THERE ARE ONLY A FEW RIVER SEGMENTS, AS DEFINED BY TNRCC, THEY ARE CLASSIFIED AS AN OUTSTANDING WATER QUALITY SEGMENT. AND DOWNSTREAM OF AUSTIN IS SO RANKED AND IT'S ONLY ONE OF THE ONLY SEGMENTS DOWNSTREAM OF A MAJOR CITY THAT HAS SUCH HIGH QUALITY. SO I THINK ALL OF AUSTIN CAN BE PROUD OF THAT. THE THE NEXT PERFORMANCE MEASURE IS -- AGAIN, THIS IS THE -- ONE OF OUR CHALLENGES FOR THE NEXT FEW YEARS. WE'RE TRACKING WASTEWATER OVERFLOWS FROM THE COLLECTION SYSTEM. SO THIS GRAPH SHOWS THE REDUCTION IN VOLUME OF OVERFLOWS OVER THE LAST FEW YEARS, BUT ANOTHER OF THE MEASURES IS THE NUMBER OF OVERFLOWS. AND I HAVE TO TELL YOU THAT THE NUMBER OF OVERFLOWS HAS REMAINED FAIRLY CONSTANT. IT'S GOING TO TAKE SOME CAPITAL PROGRAMS WHICH ARE PROPOSED AS WELL AS MORE ATTENTION AND MORE RESOURCES ON THE O AND M SIDE TO BRING THE NUMBER OF OVERFLOWS DOWN, BUT I BELIEVE THAT THIS GRAPH SHOWING THE VOLUME DECREASE, WE DO BELIEVE THAT THIS REFLECTS RESPONSE TIMES AND CONTAINMENT METHODS, JUST THE INCREASED FOCUS THAT WE HAVE ON THIS PROBLEM. AGAIN, IT'S NOTEWORTHY BECAUSE IT'S A CHALLENGING AND FAIRLY SIGNIFICANT PART OF OUR BUDGET THIS YEAR. ANOTHER OF OUR KEY PERFORMANCE MEASURES IS THE VALUE OF SERVICES FOR CITIZENS AND COMMERCIAL CUSTOMERS. WE DO A SURVEY EVERY YEAR AND WE'RE UP 65 TO 70% SATISFACTION RANGE, WHICH WE'D LOVE TO BE HIGHER. WE UNDERSTAND THAT WHEN THE -- WE HAVE A NUMBER OF OTHER MEASURES ON SATISFACTION WITH EMERGENCY RESPONSE AND TASTE AND ODOR AND SOME OTHER THINGS. AND WE ARE IN THE 80% RANGE, 85% RANGE ON THOSE. ON THE VALUE, PEOPLE THINK OF WRITING THAT BILL, IT'S A LITTLE HARDER TO GET THE HIGHER NUMBER FOR THE VALUE -- SATISFACTION WITH THE VALUE OF SERVICES. BUT WHAT WE PLAN TO DO IS CONTINUE TO WORK ON STAYING COMPETITIVE, KEEP OUR COSTS DOWN, AS WELL AS INCREASE PUBLIC EDUCATION ABOUT WHAT ALL WATER AND WASTEWATER UTILITY IN THE CITY OF AUSTIN DOES THAT MIGHT GO ABOVE AND BEYOND AND HELP PEOPLE UNDERSTAND THAT IT IS A VALUE FOR THEIR MONEY. THE NEXT -- THE NEXT MEASURE IS SOMETHING THAT WE DO EVERY YEAR, WE COMPARE AUSTIN'S AVERAGE RATES TO A NUMBER OF OTHER CITIES. IT'S ACTUALLY AUSTIN'S RATE CALCULATED ON AVERAGE WATER USE AND AVERAGE WASTEWATER RETURNED TO THE SYSTEM. AND THEN WE USE THOSE SAME VOLUMES IN OTHER CITIES AND GET A COMPARISON. I GUESS IT NEEDS TO BE NOTED THAT RATE STRUCTURES IN THESE OTHER CITIES CAN VARY GREATLY. SOME MAY HAVE A DECLINING RATE, SOME AN INCLINING RATE, OTHERS JUST A CONSTANT RATE. IT OFTEN HAS AN INCLINING BLOCK RATE TO ENCOURAGE CONSERVATION. SO AGAIN, THIS IS AT THE 8,000-GALLON NUMBER, WE COMPARE. AND YOU'LL SEE A NUMBER OF TEXAS CITIES KIND OF LUMPED IN THE MIDDLE WITH AUSTIN. ON THE LOW SIDE SAN ANTONIO. SAN ANTONIO HAS NO WATER TREATMENT PLANTS AT THIS POINT IN TIME, SO THAT'S OBVIOUSLY A BIG SAVINGS FOR THAT CITY. SLIGHTLY HIGHER THAN AUSTIN WOULD BE SOME OF THE LOCAL TOWNS AND CITIES IN CENTRAL TEXAS. THE NEXT SLIDE IS A KEY PERFORMANCE MEASURE, NUMBER OF CUSTOMERS PER F.T.E. AND WHAT THIS SHOWS IS THAT WE'VE HELD A FAIRLY STEADY NUMBER OF EMPLOYEES OVER THE LAST 10 YEARS IN THE FACE AFTERNOON INCREASING NUMBER OF CUSTOMERS -- FACE OF AN INCREASING NUMBER OF CUSTOMERS, MILES OF PIPELINE AND NUMBER OF PUMP STATIONS AND CHEMICALS AND POWER USED IN TREATING WATER AND WASTEWATER. SO I SEE THIS AS A GOOD SIGN, A GOOD TREND ON PRODUCTIVITY IMPROVEMENTS IN THE UTILITY. WE'VE BEEN USING CONTINUOUS IMPROVEMENT AND PROCESS IMPROVEMENT TEAMS FOR A NUMBER OF YEARS, AND I GUESS THAT POINTS TO THE NEXT SLIDE WHERE WE'RE GOING TO CONTINUE THAT. AND A FEW OF THE KEY PROJECTS THAT WE'VE SELECTED THAT WE'RE WORKING ON AND WE'LL WORK ON FOR NEXT YEAR, WE'VE CHOSEN A VARIETY OF PROJECTS THAT COVER SOME OF OUR BIG COSTS, LABOR, CAPITAL, TECHNOLOGY, EQUIPMENT, AND, AGAIN, CAPITAL AND CUSTOMER SERVICE. AND WE BELIEVE THAT THESE PROJECTS OFFER OPPORTUNITIES FOR EFFICIENCY AND CUSTOMER SERVICE IMPROVEMENTS. LET ME JUST WALK THROUGH THESE. FIRST WOULD BE IMPROVED JOB PLANNING AND OPTIMIZED CREW SIZING. AND THIS AGAIN, WE'RE HOPING TO FIND A LABOR SAVINGS AS WELL AS AN IMPROVEMENT IN CUSTOMER SERVICE. AT THIS POINT WE'RE ALREADY SEEING SIGNS THAT THERE'S -- THERE'S NOT MUCH MORE PRODUCTIVITY WE CAN SQUEEZE OUT. WE'RE AT THE POINT WHERE WE'RE SEEING HIGHER OVERTIME, INCREASING BACKLOG, SO WE BELIEVE THAT THE WORK DEMAND IS THERE AND IT'S REAL. IN FACT, FOR THIS -- WE FOCUSED ON ONE AREA OF THE UTILITY AND RATHER THAN REQUIRING A CERTAIN NUMBER OF VACANCIES TO MANAGE THE BUDGET IN THAT GROUP, WE'RE GOING TO USE THE OVERTIME THAT THEY OTHERWISE WOULD BE PAID AND WE'RE GOING TO PUT SOME ADDITIONAL CREWS TO GET THE BACKLOG DOWN AND TO IMPROVE THE RESPONSE TIME. BUT IT WILL BE PAID FOR WITH WHAT WOULD OTHERWISE HAVE BEEN BUDGETED OVERTIME. SO WE BELIEVE THAT'S A GOOD TRADE-OFF. OUR PLANNING AND PRIORITIZATION, WE HAVE SUCH A MAJOR CIP PROGRAM AND IT'S A MAJOR PART OF OUR BUDGET, SO WE'RE GOING TO PUT SOME ADDITIONAL ATTENTION AND IMPROVEMENTS INTO THE WAY THAT WE PRIORITIZE AND PLAN PROJECTS SO THAT WE'RE DOING ONLY THOSE PROJECTS AT THE RIGHT SCOPE, AT THE RIGHT TIME TO OPTIMIZE OUR CIP PROGRAM. ANOTHER OPPORTUNITY WE HAVE IS TO IMPROVE MAPPING TOOLS THROUGH GIS. AND WE'RE UNDERWAY WITH THAT. ON THE FLEET UTILIZATION, IT WILL BE PART OF THE CITYWIDE PILOT PROJECT TO IMPLEMENT COST SAVINGS IN THE WAY WE UTILIZE OUR COMPLETE. AND FINALLY WE'RE GOING TO BE LOOKING AT SERVICE EXTENSION REQUEST PROCESS TO TRY TO TIE THAT REVIEW INTO MORE CITYWIDE ISSUES AND GET THE TIMING OF REVIEWS OF THOSE ISSUES TO LINE UP BETTER SO THAT WHEN WE COME TO CITY COUNCIL FOR APPROVALS OF THE SERVICE EXTENSION THAT WE'LL HAVE MORE INFORMATION AND BE ABLE TO MAKE RECOMMENDATIONS TO COUNCIL. THAT CONCLUDES THE PRESENTATION, AND I'D BE HAPPY TO ANSWER ANY QUESTIONS.

Mayor Garcia: QUESTIONS FOR MR. LIPPE? MAYOR PRO TEM.

Goodman: CAN WE GO TO JUST CLARIFYING AND THE REVENUES AND TRANSFERS IN. WE HAVE MORE CUSTOMERS, BUT LESS REVENUE. SO WHERE IS THAT CLARIFIED IN HERE OR IN THE BOOK?

WELL, WE'VE SEEN IN THIS LAST YEAR, WE'VE BEEN IMPACTED BY A SLOWDOWN IN GROWTH BECAUSE OF THE ECONOMY. AND WE'VE BEEN ALSO IMPACTED ON THE WASTEWATER REVENUE SIDE BY WET WEATHER IN THE WINTER, SO THAT THERE WAS EVEN LESS IRRIGATION. WE DO A WINTER AVERAGING METHOD, SO THAT'S -- AND WE PROJECT THAT BECAUSE OF THE SLOWDOWN AND THE GROWTH IN THE ECONOMY THAT WE'RE GOING TO SEE, AGAIN, A SLIGHTLY -- SLIGHT REDUCTION THERE. BUT THE REVENUE, AGAIN, A BIG PORTION OF THAT REVENUE IS A REDUCTION IN THE ONE-TIME TRANSFER OF WHAT WAS A CAPITAL RECOVERY FEE FUND FOR A ONE-TIME TRANSFER TO OUR CIP PROGRAM.

Goodman: IS THERE ROOM IN THIS BUDGET FOR SOMETHING THAT WE'VE TALKED ABOUT BEFORE AND HAVEN'T REALLY MOVED FORWARD BECAUSE WE GOT CAUGHT UP IN A NUMBER OF MAJOR INITIATIVES. BUT THAT WAS -- SOME TIME AGO WE WERE LOOKING TO SEE WHAT KIND OF ALTERNATIVE WASTEWATER TREATMENT WE COULD ADD INTO OUR SYSTEM SO THAT IN MANY CASES WE WEREN'T GOING TO HAVE TO SEND OUTLINES AND DO A -- ESPECIALLY IN ENVIRONMENTALLY SENSITIVE AREAS, WORRY ABOUT HOW WE GET THE LINES IN THAT KIND OF TERRAIN WITHOUT HURTING ANYTHING. SO IS IT POSSIBLE FOR US TO CHECK AND SEE IF THERE'S ROOM FOR A FEASIBILITY STUDY TO I AM PATE DATE WHAT WE -- UPDATE WHAT WE ALREADY HAD ON HAND AND THEN FIGURE WITH SOME OF THE OPPORTUNITIES WE MAY HAVE RIGHT NOW IF WE CAN MAYBE INTRODUCE A CLUSTER PILOT PROGRAM OR SOME KIND OF EXPLORATORY IMPLEMENTATION IN A LARGE ENOUGH SCENARIO THAT WE CAN TELL WHETHER THAT'S SOMETHING WE WANT TO GO WITH OR NOT?

WE CAN TAKE A LOOK AT THAT, MAYOR PRO TEM.

Goodman: GREAT, THANKS.

Futrell: I THINK AS PART OF THAT WHY DON'T WE ALSO SHARE WITH THE COUNCIL AND THE MAYOR PRO TEM WHAT WE HAVE TO DATE BECAUSE I KNOW WE DID THAT EXTENSIVE THREE-YEAR LOOK AND WE DID START THAT ONE CLUSTER SYSTEM PILOT. SO MAYBE ONE THING WOULD BE WHAT'S OUR CURRENT STATE? WHERE ARE WE? AND THEN LET'S SEE WHAT ELSE WE HAVE TO DO.

Slusher: MAYOR? YES, MR. LIPPE, IN THE 5.5 MILLION FOR THE AUSTIN CLEAN WATER PROGRAM, THAT'S THE PROGRAM TO FIX THE SEWER PIPES?

THAT'S CORRECT, YES.

Slusher: AND HOW IS THIS GOING TO BE STRUCTURED AS FAR AS THE FUNDING IN THE FUTURE YEARS? THAT'S GOING TO HAVE TO GO UP QUITE A BIT, WON'T IT?

YES, SIR. WE BELIEVE THAT NEEDS TO BE INCREASED AS THE PROGRAM GETS UP TO FULL SPEED. AGAIN, THERE'S A CAPITAL SIDE OF THIS, SO THERE'S A NUMBER OF PROJECTS THAT ARE COMING OUT OF STUDIES OF CITYWIDE SYSTEM. AND THAT'S THE ESTIMATED 150-MILLION-DOLLAR CAPITAL PROGRAM, BUT YET THERE'S AN O AND M SIDE OF THAT AS WELL AND THAT'S WHAT THE FIVE AND A HALF MILLION DOLLARS IS.

Slusher: WHAT'S THE CAPITAL PORTION FOR THIS YEAR?

IT'S 38 AND A HALF MILLION DOLLARS. ISSUE.

Slusher: SO A LITTLE MORE THAN 20% THIS YEAR. AND WHAT'S OUR DEADLINE FOR THAT?

2007.

Slusher: OKAY. THANKS.

THERE'S A NUMBER OF INTERNAL DEADLINES. THERE'S THREE MAJOR DEADLINES IN THE CITY. ONE DEADLINE IS 2005 COMING UP FIRST FOR NORTH AUSTIN. AND THEN THERE'S 2006. AND THEN THE FINAL BASIN IS 2007.

Slusher: AND I APPRECIATE IT. THE STAFF HAS BEEN REAL THOROUGH IN THE BRIEFINGS TO COUNCIL ON THAT. I APPRECIATE IT.

Wynn: THANK YOU, MAYOR. A FEW QUESTIONS. I'M AFRAID TO ASK THIS. WHAT IS AN NTU ON THE DRINKING WATER ANALYSIS?

IT'S NESE METRIC TURPIDTY UNIT. IT'S A MEASURE OF THE WATER.

Wynn: ARE THOSE THE ACTUAL OVERFLOWS AT TREATMENT PLANTS OR DOES THAT CAPTURE SPORADIC LINE BREAKS OR SOMETHING ELSE ALONG THE SYSTEM?

THIS IS THE LINE BREAK PORTION OF IT, IN FACT. THIS IS NOT TREATMENT PLANTS.

Wynn: DO WE HAVE OVERFLOWS EVER AT OUR TREATMENT PLANTS?

THEY ARE RARE AND THEY'RE A MAJOR EVENT AND IT'S RARE AND IT'S REPORTED IN A DIFFERENT WAY. THIS IS THE COLLECTION SYSTEM NUMBER OF OVERFLOWS.

OKAY. ON YOUR BILL COMPARISON ANALYSIS, THE 8,000 GALLONS THAT YOU'RE USING, IS THAT THE ACTUAL RESIDENTIAL AVERAGE IN AUSTIN?

IT'S VERY CLOSE TO THAT. IT SEEMS TO BE DROPPING, SO WE'RE GOING TO CONSIDER CHANGING THE AVERAGE FOR THE COMING YEARS, BUT IT'S -- YES, 8,000 IS AN ANNUAL AVERAGE. OF COURSE, IT'S MUCH HIGHER IN THE SUMMER, LOWER IN THE WINTER. IN FACT, WE KIND OF HAVE TO BUILD THE RATE BLOCKS AROUND SINGLE PATTERNS, ESPECIALLY THAT BLOCK THAT'S AIMED AT THE TYPICAL IRRIGATION CUSTOMER WHERE WE DON'T -- WE DON'T WANT TO PENALIZE IRRIGATION, BUT THEN THERE'S A VERY HIGH END OF IRRIGATION AND SO THAT'S THE HIGHEST BLOCK. WE'VE BUILT THOSE BLOCKS WITH VARIOUS SINGLE WATERING PATTERNS IN MIND. 8,000 IS AN ANNUAL AVERAGE, THOUGH.

Wynn: SO BY AVERAGE WE MEAN ESSENTIALLY A DETACHED SINGLE-FAMILY HOME SORT OF AVERAGE OR -- HOW DOES IT ALSO TAKE INTO ACCOUNT MULTI-FAMILY PROJECTS?

THIS IS RESIDENTIAL. THIS WOULD BE SINGLE-FAMILY. IT'S RESIDENTIAL, NOT MULTI-FAMILY.

Wynn: OKAY. --I NOTICE ON YOUR EARLIER CHARTS IN THE SUMMARY OF YOUR USES CHART YOU SHOW THE CONSERVATION AND REUSE PROJECTS AT 4.7 MILLION. APPROXIMATELY HOW MUCH OF THAT IS THE ACTUAL REUSE LINE AND PROJECT THAT WE ESSENTIALLY ARE FINISHING OVER IN EAST AUSTIN NOW?

THIS IS THE O AND M SIDE, SO REALLY THAT COST WOULD NOT BE IN THIS OPERATING BUDGET. THAT WOULD BE ON THE CAPITAL SIDE.

Wynn: OKAY. BUT REMIND ME. WHEN YOU DRIVE BY MORRIS WILLIAMS GOLF COURSE, YOU SEE THE RESERVOIR OR SOMETHING THAT'S BEING BUILT THERE. SO SORT OF THE COST TO OPERATE THAT LINE AND GET THAT REUSE WATER UP TO MORRIS WILLIAMS IS JUST SOMEWHERE IN THIS 4.7-MILLION-DOLLAR FIGURE?

ACTUALLY, THAT'S IN -- THAT'S ROLLED INTO THE WASTEWATER TREATMENT COSTS. RIGHT NOW WE HAVE NOT SEPARATED OUT THE OPERATION -- THE OPERATION OF THE PUMP STATIONS THAT ARE AT THESE TREATMENT PLANTS. IT'S A SMALL ENOUGH SYSTEM AT THIS POINT WHERE THAT'S THE -- THAT'S PRIMARILY THE COST IS OPERATING THESE TREATMENT PLANTS AT BOTH WALNUT CREEK AND SOUTH AUSTIN REGIONAL. THERE'S REALLY NO LINE MAINTENANCE TO SPEAK OF YET. WE'RE GETTING TO THAT POINT, THOUGH. , AND AT SOME POINT WE'LL NEED TO CREATE A SEPARATE COST CENTER, BASICALLY A THIRD UTILITY THAT'S BASICALLY A RECLAIM WATER UTILITY AND WE'LL BE TRACKING AND SHOWING THESE THINGS IN A DIFFERENT WAY. RIGHT NOW THAT O AND M COST YOU'RE REFERRING TO WOULD BE ROLLED INTO THE TREATMENT PLANT CATEGORY. AND THE COST THAT'S IN THE REUSE HERE IS REALLY JUST THE ENGINEERING STAFF THAT'S MANAGING THESE PROJECTS AND DEVELOPING THESE PROJECTS.

Wynn: WHEN WILL MORRIS WILLIAMS COURSE BEGIN TO BE IRRIGATED WITH REUSE WATER?

I BELIEVE EVERYTHING'S IN PLACE. I'M NOT SURE IF THE GOLF COURSE ENTERPRISE FUND ITSELF STILL NEEDS TO DO SOME IRRIGATION IMPROVEMENTS. I'LL HAVE TO GET YOU A STATUS REPORT ON THAT.

Wynn: BUT -- SO BACK ON YOUR SOURCES OF REVENUE, HAVE WE MADE ANY ASSUMPTIONS OR IS THERE ANY REVENUE ASSUMPTIONS YET AS TO THE REUSE PROJECT?

I WOULD HAVE TO CHECK ON THAT.

Wynn: BECAUSE WHAT I'M GETTING TO IS I'M CURIOUS ALSO WHETHER -- I DO WANT TO UNDERSTAND SORT OF THE INTERNAL ISSUE OF SELLING REUSE WATER TO OUR GOLF COURSES AND OUR PARKS DEPARTMENT. HAVE WE -- DO WE HAVE A PROGRAM TO TRY TO PROMOTE PRIVATE SECTOR USE ON THAT LINE? THERE'S SORT OF ONE OBVIOUS THIRD-PARTY GROUP, THE FIRST TEE ORGANIZATION THERE NEXT TO THE Y I GUESS LIKELY WILL BE THE FIRST POTENTIAL, YOU KNOW, PRIVATE SECTOR OR THIRD-PARTY PURCHASER OF OUR RERUE Y2KVUE. DO WE HAVE ANY SORT OF PROMOTIONAL PROGRAMS TO GET PEOPLE -- FROM AN ENVIRONMENTAL STANDPOINT OF PROMOTING THE I CAN'T UNDERSTAND ALSO JUST SORT OF ECONOMICALLY TRYING TO PROMOTE MORE CUSTOMERS ON THAT LINE.

RIGHT. WE'RE AT THE THIRD PHASE OF OUR RECLAIM PROGRAM. AND WE HAVE A PLAN FOR THE NORTH SYSTEM AND A PLAN FOR THE SOUTH SYSTEM. NORTH IS WALNUT CREEK, SOUTH WOULD BE OUT OF SOUTH AUSTIN REGIONAL. THERE'S STILL SOME CONSTRUCTION GOING ON IN SOUTH AUSTIN REGIONAL FOR AN SPRANGSSPRANGS THERE. SO WE PICKED UP THOSE BIG CUSTOMERS OF THE GOLF COURSES. WE WE'RE READY TO MOVE ON TO THE NEXT PHASE AND IT DEPENDS SO MUCH ON HAVING CUSTOMERS OUT THERE, SO WE'VE BEEN TALK TO SOME OF THE MAJOR INDUSTRIALS, MOTOROLA, AMD, FOR EXAMPLE, HAVE THIS POTENTIAL. THERE'S A NUMBER OF CAMPUS-TYPE SETTINGS THAT COULD DO A LOT OF IRRIGATIONS. THE UNIVERSITY OF TEXAS HAS BEEN INTERESTED. IT'S STILL A STRETCH TO GET FROM THE MORRIS WILLIAMS AREA ALL THE WAY TO U.T., BUT COOLING TOWERS AND LANDSCAPE IRRIGATION, THE UNIVERSITY OF TEXAS IS VERY INTERESTED IN. SO WE'RE AT THIS POINT. THIS IS ONE OF THOSE YEARS WE'RE GOING TO BE DOING SOME ADDITIONAL PLANNING FOR THE NEXT PHASE. WE ARE LOOKING AT MARKETING APPROACHES. EAR WEERCH LOOKING AT APPROACHES OF -- WE'RE EVEN LOOKING AT APPROACHES OF HOW TO FUND AND PAY FOR THESE THINGS. WE MAY -- WE'RE CLOSE TO THE POINT WHERE WE COULD CONSIDER A SERVICE EXTENSION APPROACH WHERE RATHER THAN THE CITY OF AUSTIN GUESSING OR UP FRONT FUNDING SOME OF THESE PROJECTS AND BUILDING THEM OUT, WE BASICALLY NEGOTIATE WITH CUSTOMERS WHO ARE INTERESTED AND TALK ABOUT THAT CUSTOMER DOING THE PAYMENT FOR THE EXTENSION OF THE LINE. OR IF WE WANTED TO OVERSIZE IT OR IF IT'S A MAIN LINE THAT'S PART OF OUR FUTURE PROGRAM, THEN WE CAN TALK TO THEM ABOUT WORKING TOGETHER, POSSIBLY REIMBURSING JUST LIKE SERVICE EXTENSIONS FOR WATER AND WASTEWATER.

Wynn: I GUESS MY POINT IS NOW THAT THAT LINE IS IN PLACE, I WOULD LIKE TO SEE US BE PRETTY AGGRESSIVE IN COMING UP WITH SOME PROGRAMS TO GET A COUPLE OF THIRD-PARTY USERS ON THAT LINE AS SOON AS PRACTICAL. WHETHER THAT MEANS A SIGNIFICANT, YOU KNOW, LONG-TERM CONTRACT THAT'S EVENTUALLY DISCOUNTS EARLY YEARS TO GET QUICK BUY-IN, WE SHOULD DO IT. I MEAN, THE WASTEWATER IS THERE AND IT'S A BIG PROMOTIONAL OPPORTUNITY FOR US.

Futrell: I THINK KIND OF THE SHORT ANSWER THERE IS AS YOU START PHASE 3 THAT IS WHERE WE WILL HAVE TO START DOING SOME VERY TARGETED MARKETING AND PROBABLY LINKING UP WITH THE DEVELOPMENT REVIEW SO AS PROJECTS COME IN THEY CAN POINT OUT WHERE THEY'RE CLOSE TO A REUSE PLIEN AS A POSSIBILITY. ALSO WE HAVE A RESIDENTIAL PILOT. NOW, THAT'S REALLY MOVING INTO ANOTHER PHASE OF THIS THAT WE DID THROUGH ONE OF OUR ANNEXATION AREAS. THAT WILL BE THE FIRST TIME THAT'S A POSSIBILITY. WHERE YOU COULD WATER YOUR YARD AND PAY LESS FOR THE WATER THAT YOU'RE USING. SO THIS IS THE PHASE NOW, MOVING INTO PHASE 3, THAT IT BECOMES ACCESSIBLE TO OTHERS, NOT JUST GOLF COURSES AND PRIMARY EMPLOYERS.

THAT'S A GOOD POINT. WE TALKED ABOUT THE TWO MAJOR PLANS AS A SOURCE, BUT WE HAVE A NUMBER OF PACKAGE PLANS. IN FACT, COUNCIL APPROVED JUST A MONTH AGO THE PURCHASE OF THE ONION CREEK PACKAGE PLANT IN SOUTH AUSTIN. SO WE HAVE A NUMBER OF PLANTS THAT ARE -- THERE'S A NEIGHBORHOOD PROGRAM THAT'S PART OF ONE OF THE ANNEXATION AREAS.

Mayor Garcia: FURTHER QUESTIONS? THANK YOU.

Futrell: I SAY LET GO ON AND KNOCK AT LEAST ONE MORE OUT. LISA WILL GIVE YOU THE OVERVIEW. AND DO WE WANT TO START WITH NEIGHBORHOOD PLANNING AND ZONING, LISA? APPROACH IN TERMS OF THE NEIGHBORHOOD PLANNING AND ZONING BUDGET ONCE IT WAS REORGANIZED LAST YEAR. WE LOOKED AT PROCESSES TO IMPROVE THE NEIGHBORHOOD PLANNING PROCESS. AS WE PRESENTED TO YOU LAST YEAR, THE PROCESS WAS STREAMLINED, AND WE STARTED BY CLUSTERING THE PLANNING AREAS, KNOWING THAT ADJACENT AREAS IMPACT EACH OTHER. SO WE -- WE HAD THE AREAS GROUPED IN TWO TO THREE NEIGHBORHOOD PLANNING AREAS AND WE HAD TWO WORKSHOPS WHICH ENCOURAGED PARTICIPATION. ADDITIONALLY, WE IDENTIFIED SERVICE GAPS AT THE BEGINNING OF THE PROCESS, AND ALIGNED THE CITY'S C.I.P. PROGRAM WITH THE DEPARTMENTAL BUDGETS. UNDER THE NEW PROCESS, STAFF HAS BEEN ABLE TO COMPLETE 8 PLANS AND 10 REZONINGS AND TWO OF THOSE REZONINGS WERE CATCH-UP REZONINGS, MEANING THAT THEY HAD NEIGHBORHOOD PLANS THAT HAD ALREADY BEEN APPROVED AND WE WENT BACK AND DID THE REZONING. ALL OF THESE PLANS WERE IN NINE MONTHS OR LESS, THAT IS A SIGNIFICANT IMPROVEMENT IN OUR PROCESS BECAUSE AS YOU KNOW WE HAD 18 MONTHS OR MORE OF PLANNING PRIOR TO THE NEW PROCESS. NEIGHBORHOOD PLANNING ALSO FACILITATED SIMULTANEOUS NEIGHBORHOOD PLAN AND THE REZONINGS, WHICH IS ONE OF THE EFFICIENCIES THAT GAINED US TIME. ALSO HAD CROSS TRAINED THE STAFF TO PREPARE THE ZONING RECOMMENDATIONS, SO WE USED STAFF MORE EFFICIENTLY AND ALSO COLLAPSED THE PROCESS. IN THE AREA OF HOUSING AND ZONING CODE COMPLIANCE, THE STAFF DEVELOPED INNOVATIVE WAYS TO INCREASE PUBLIC EDUCATION AND VOLUNTEER PARTICIPATION THROUGH OUR BANDIT SIGN PROGRAM. THE COMMUNITY SERVICE -- THE COMMUNITY SCORE CARD USUALLY HAS MEASURES ON CUSTOMER SATISFACTION AND WE DID NOT HAVE A MEASURE FOR NEIGHBORHOOD PLANNING AND ZONING SINCE THE DEPARTMENT WAS IN -- WAS ESTABLISHED LAST YEAR. HOWEVER, FOLLOWING THE RESORTIONS, ONE OF THE -- REORGANIZATIONS, ONE OF THE GOALS WAS TO MEASURE CUSTOMER SATISFACTION. SO AS PART OF THE PLANNING AREAS, LAST YEAR WE SURVEYED BOULDIN, CENTRAL EAST AUSTIN, HOLLY, NORTH LOOP AND THE ROSEWOOD PLANNING AREAS. AS YOU CAN SEE, THE FEED BACK-WAS EXCELLENT. WE HAD VERY GOOD IN TERMS OF THE PROCESS FOR 24% OF POND DEPENDS AND GOOD FOR -- RESPONDENTS AND GOOD FOR 54% OF THE RESPONDENTS. I THINK ALL OF THE COUNCIL HAS BEEN AT THE MEETING WHERE THEY HAVE COMPLIMENTED STAFF ON THE PROCESS AND HAVE BEEN VERY PLEASED WITH THE RESULTS OF THEIR PLANNING PROCESS. MS. GLASGO IS GOING TO DISCUSS OTHER REFINEMENTS THAT WE HAVE MADE THROUGHOUT THE YEAR AND WE UPDATED THE PROCESS AND ALSO PLANNING FOR OTHER AREAS THAT WE HAVE PREPARED FOR THE FY '03 BUDGET. ALICE?

GOOD MORNING, MAYOR AND COUNCILMEMBERS AND CITY MANAGER. MY PRESENTATION STARTS OFF ON -- WITH SLIDE NUMBER 4. THANK YOU, MS. GORDON. THE MISSION OF NEIGHBORHOOD PLANNING AND ZONING DEPARTMENT IS TO PROVIDE COORDINATED LAND USE AND BASIC SERVICE DELIVERY PLANNING, EDUCATION AND CODE COMPLIANCE FOR AND IN PARTNERSHIP WITH NEIGHBORHOOD STAKE STAKEHOLDERS IN ORDER TO IMPROVE THEIR ECONOMIC VITALITY, ENVIRONMENTAL SUSTAINABILITY AND SOCIAL EQUITY. AS PROPOSED, THE NEIGHBORHOOD PLANNING AND ZONING DEPARTMENT WILL INCLUDE THREE PROGRAMS IN FISCAL YEAR '03. ONE, NEIGHBORHOOD PLANNING, TWO, CODE COM PLIEPS AND THREE ZONING CASE MANAGEMENT. THE THREE DEPARTMENTAL PROGRAMS MAY BE VIEWED AS INTERCONNECTED COMPONENTS OF OUR WORK WITH AUSTIN NEIGHBORHOODS. TWO WAS CODE COMPLIANCE.

SLIDE NUMBER 5 SHOWS YOU OUR REQUIREMENTS AND TOTAL EMPLOYEES. THE TOTAL REQUIREMENT FOR THE DEPARTMENTS FOR PROGRAMS FOR NEXT YEAR TOTAL $4.0 MILLION. AND THE BREAKDOWN IS AS FOLLOWS: NEIGHBORHOOD PLANNING PROGRAM HAS $1.6 MILLION, ZONING CASE MANAGEMENT PROGRAM FOR A TOTAL OF $.7 MILLION, CODE COMPLIANCE PROGRAM, 1.5 MILLION, SUPPORT SERVICES $.2 MILLION. OUR PROPOSED BUDGET FOR FISCAL YEAR '03 REFLECTS A NET INCREASE OF $400,000. THIS INCLUDES AN OVERALL BUDGET REDUCTION OF $100,000. HOWEVER, IT ALSO INCLUDES THE REALLOCATION OF $500,000 AND SIX POSITIONS TO OUR BUDGET FROM [INAUDIBLE] DEPARTMENT THAT WAS JUST DISSOLVED. THE DEPARTMENT HELD 14 POSITIONS FROZEN DURING FISCAL YEAR '02. DURING OUR FISCAL YEAR '03 PLANNING PROCESS, WE REVIEWED THESE VACANCIES AND SAW THAT ON AVERAGE THESE POSITIONS HAD BEEN VACANT FOR 13 MONTHS OR LONGER. SOME HAD BEEN VACANT FOR AT LEAST 20 MONTHS OR LONGER. HOWEVER, WE KNEW AT THAT TIME THAT WE COULD ELIMINATE THESE POSITIONS FROM OUR BUDGET WITHOUT IMPACTING OUR SERVICE LEVELS. IN FISCAL YEAR '02, THE DEPARTMENT HAD 63 F.T.E.'S. WE PROPOSED TO ELIMINATE THE 14 FROZEN POSITIONS FOR FISCAL YEAR '03, AND THEN RECEIVED SIX F.T.E.'S FROM THE DISSOLVED I.S.S. GROUP. THEREFORE, AS PROPOSED, THE DEPARTMENT WILL HAVE A TOTAL OF 55 F.T.E.'S FOR FISCAL YEAR '03.

Mayor Garcia: 63 SHOULD BE LIKE -- LIKE 49?

Glasgo: WE WILL HAVE, YES, 49 PLUS THE 6 GIVES US 55, THAT'S CORRECT, MAYOR. OUR ESTIMATED REVENUES FOR THE DEPARTMENT FOR FISCAL YEAR '03 ARE APPROXIMATELY $470,000. SLIDE NUMBER 6, FOCUSES ON ADDITIONAL PROCESS IMPROVEMENTS THAT MISS GORDON EXPLAINED TO YOU EARLIER. THROUGHOUT THIS YEAR THE DEPARTMENT HAS CONTINUOUSLY REVISED AND IMPROVED THE NEIGHBORHOOD PLANNING PROCESS TO BUILD UPON THE CHANGES WE PRESENTED TO YOU LAST YEAR. TO THAT END, WE HAVE ADDED FOCUS GROUP MEETINGS IN BETWEEN LARGE WORKSHOPS TO ALLOW NEIGHBORHOOD REPRESENTATIVES TO CONCENTRATE ON SPECIFIC TOPICS WITHOUT SHOWING -- SLOWING DOWN THE PROCESS. WE SHIFTED THE NEIGHBORHOOD ACADEMY EDUCATIONAL SESSIONS TO TAKE PLACE AFTER THE FIRST WORKSHOP SO WE CAN TAILOR THE SESSIONS TO MEET NEIGHBORHOOD NEEDS AND INTERESTS. WE IDENTIFIED MORE EFFECTIVE WAYS TO CUSTOMIZE THE URBAN DESIGN ELEMENT OF THE PROCESS TO COINCIDE WITH THE NEIGHBORHOOD'S CHARACTERS. AND FINALLY, WE ADDED AN OPEN HOUSE TYPE OF FORUM, WHICH BRINGS CITY DEPARTMENTS WHO PROVIDE DIRECT SERVICES TO NEIGHBORHOODS TO OUR PLANNING WORKSHOP WHERE NEIGHBORHOOD REPRESENTATIVES CAN MEET THEM, ASK QUESTIONS AND RESOLVE COMPLAINTS IMMEDIATELY AT THOSE MEETINGS. FOR FISCAL YEAR '03 THE DEPARTMENT WILL KEEP THE BASIC FRAMEWORK THAT WE INITIATED IN FISCAL YEAR '02 WHICH STREAMLINED THE PROCESS TO INCLUDE COMBINED NEIGHBORHOODS, TO ALLOW FOR THE SIMULTANEOUS DEVELOPMENT OF NEIGHBORHOOD PLANS FOR MULTIPLE NEIGHBORHOODS. WE WILL LOOK FOR FURTHER WAYS TO FURTHER REFINE NEIGHBORHOOD PLANNING TO BENEFIT ALL INTERESTED PARTIES. SLIDE NUMBER 7 IS REALLY WHAT TELLS US THE -- YOU THE IMPACT OF THE IMPROVEMENTS THAT WE MADE. YOU CAN SEE THAT -- THAT THE -- THAT THE NEIGHBORHOOD PLANNING PROCESS IN 1998, ONE IN 1999, TWO PLANS IN 2000, THREE PLANS WERE ADOPTED IN 2001, ONE PLAN ADOPTED. HOWEVER, THIS YEAR WE ANTICIPATE THAT WE HAD PROJECTED TO HAVE 8 PLANS ADOPTED, BUT IF ALL GOES WELL, COUNCIL AADOPTS THE THREE PLANS WE HAVE SCHEDULED ON THE SEPTEMBER 26TH AGENDA, WE WILL HAVE NINE PLANS ADOPTED THIS YEAR IN LESS THAN THE NINE MONTH TIME FRAME THAT MS. GORDON SPECIFIED, INCLUDING REZONING, SO UNLIKE THE PREVIOUS PROCESS YOU ADOPT THE PLANS AND DO THE REZONINGINGS LATER. THIS YEAR WE ARE PROJECTING TO HAVE BY SEPTEMBER NINE AREAS PLANNED AND REZONED. WE HAVE ACCOMPLISHED THAT IN LESS THAN NINE MONTHS.

ALICE THAT'S ALMOST STANDING OVATION MATERIAL. JUST IN CASE ANYONE MISSES THE -- THE DIFFERENCE IN THE NUMBER OF PLANS, I MEAN, THAT'S ASTRONOMICAL, AN INCREDIBLE JOB.

Glasgo: THANK YOU. SLIDE NUMBER 8 SHOWS THE COMBINED AREAS THAT WE ARE GOING TO BE LOOKING AT IN FISCAL YEAR '03. THE PLANNING AREAS INCLUDE WEST UNIVERSITY, NORTH UNIVERSITY AND HANCOCK AND BY THE WAY, WE HAVE -- WE HAVE ACRONYMS FOR THIS AREA, FOR THIS AREA WE CALL IT NUNA-WUNA, IF YOU START HEARING THOSE ACRONYMS, WE THOUGHT THAT WAS INTERESTED. NORTH BURNET, GATEWAY, WHICH WILL BEGIN ON OCTOBER OF 2002. THE WEST UNIVERSITY AREA WILL -- WE WILL BEGIN NEXT MONTH. AND FOR WOOTEN-CRESTVIEW THE TARGETED DATE IS NOVEMBER 2002. OUR PRIORITY THIS YEAR HAS BEEN TO COMPLETE PLANS FOR THE NEIGHBORHOODS IN THE EAST AUSTIN OVERLAY ZONE AND WE WILL HAVE DONE SO BY DECEMBER OF THIS YEAR. THIS IS A -- AN INITIATIVE THAT THE MAYOR INITIATED WHILE HE WAS IN OFFICE BEFORE HE LEFT OFFICE. NOW HE'S BACK. AND THE EAST AUSTIN OVERLAY, THAT THE COUNCIL CREATED, REQUIRE THAT WE BEGIN AND CONCENTRATE ALL OF OUR PLANNING EFFORTS FOR THOSE AREAS TO FINISH THE PLANNING IN THAT AREA. WE ARE PLEASED TO ANNOUNCE TO YOU THAT WE ARE WORKING ON A LAST -- ON OUR LAST TWO NEIGHBORHOOD AREAS, GOVALLE AND JOHNSON TERRACE, WHICH WE ANTICIPATE TO BRING TO YOU THIS YEAR FOR ZONING AND NEIGHBORHOOD ADOPTION.

WHAT IS THE TIMING ON THOSE, MLK AND PECAN SPRINGS, THOSE ARE ALTOGETHER?

Glasgo: THOSE ARE ALTOGETHER, MLK, PECAN SPRINGS AND MLK-183, ALL THREE COMBINED, THAT'S GOING TO BE COMING TO COUNCIL IN OCTOBER. AND SOUTHEAST, THE SOUTHEAST AREA IS COMING TO COUNCIL IN SEPTEMBER 26TH FOR THE THREE COMBINED AREAS.

Alvarez: GOVALLE JOHNSTON IN DECEMBER?

DECEMBER, CORRECT.

THANK YOU.

Glasgo: YOU'RE WELCOME. SO COUNCILMEMBERS, OUR FOCUS FOR FISCAL YEAR '03 WILL INCLUDE NEIGHBORHOODS THAT ARE AND YOU LONG THE PROPOSED LIGHT -- ALONG THE PROPOSED LIGHT RAIL CORRIDOR, WHICH WOULD INCLUDE SIGNIFICANT CHANGES SHOULD LIGHT RAIL BE APPROVED IN 2004. SO THAT END WE WANT TO BEGIN WORKING WITH THESE NEIGHBORHOODS TO DEVELOP LONG-TERM LAND USE PLANS BEFORE LIGHT RAIL IS RECONSIDERED. CONTINUING ON A POSITIVE NOTE, BY THE END OF 2003, WE EXPECT 60% OF THE URBAN CORE PLANNING AREAS TO BE COMPLETED WITH ADOPTED PLANS AND REZONINGS. THE MAP IN FRONT OF YOU, THE BIG ONE BEHIND ME, THE COPIES FOR YOU JUST TO GIVE YOU AN IDEA OF OF THE NEW AREAS THAT WE ARE GOING TO BE EMBARKING ON, ALSO WOULD WE ANTICIPATED TO COMPLETE BY THE END OF THIS YEAR. WHAT WE ANTICIPATE TO COMPLETE. SLIDE NUMBER 10 SHIFTS THE FOCUS NOW FROM NEIGHBORHOOD PLANNING TO CODE COMPLIANCE. NO POSITIONS ARE PROPOSED TO BE ELIMINATED FROM THE CODE COMPLIANCE PROGRAM IN FISCAL YEAR '03. HOWEVER, TO FURTHER BOOST PRODUCTIVITY IN THE ACTIVITY OF CODE COMPLIANCE, THE DEPARTMENT WILL DO THE FOLLOWING THINGS: WE WILL FOCUS ON UNRESOLVED CASES THAT HAVE BEEN OPENED FOR MORE THAN 90 DAYS. WE WILL INCREASE COMMUNITY AND INTERAGENCY PARTNERSHIPS IN AN EFFORT TO REDUCE THE NUMBER OF FIRST-TIME VIOLATIONS. WE WILL INCREASE PUBLIC AWARENESS AND EDUCATION REGARDING CODE COMPLIANCE TO REDUCE COMPLAINTS AND FURTHER INCREASE VOLUNTEER INVOLVEMENT TO IMPROVE COMPLIANCE WITHOUT INCREASING STAFF HOURS. AND FINALLY, WE WILL EXPEDITE ENFORCEMENT AGAINST REPEAT VIOLATORS. GOING ON TO NUMBER 7, SHOWS OUR GOALS AND ACCOMPLISHMENTS FOR CODE COMPLIANCE. PROCESS IMPROVEMENTS WILL HELP US REACH OUR GOALS FOR FISCAL YEAR '03. OVER 2,000 CODE VIOLATION COMPLAINTS ARE RECEIVED EACH YEAR, WELL OVER 80% CAN BE RESOLVED THROUGH PROPERTY OWNER EDUCATION AND TECHNICAL ASSISTANCE. IN THE PROPOSED BUDGET, COMPLIANCE GOALS WERE IS IT ESTABLISHED AT -- WERE ESTABLISHED AT 100 DAYS FOR SUBSTANDARD HOUSING AND 120 DAYS FOR CASES RELATED TO ZONING VIOLATIONS. BASED ON THE LEVEL OF FUNDING PROPOSED FOR CODE COMPLIANCE ACTIVITIES, THE DEPARTMENT WILL CONTINUE ITS EFFORTS TO GAIN VOLUNTARY COMPLIANCE AS ITS MAIN FOCUS FOR FISCAL YEAR '03. GOING ON TO THE FINAL SLIDE, NUMBER 12, WE HAVE ALL HEARD ABOUT ILLEGAL SIGNS IN THE RIGHT-OF-WAY. YOU HAVE ALL RECEIVED NUMEROUS E-MAILS IN THE PAST REGARDING THIS PARTICULAR ISSUE. WE ARE GLAD TO REPORT TO YOU THIS HAS BEEN ONE OF THE MOST EXCITING CODE COMPLIANCE PROCESS IMPROVEMENTS THIS YEAR. NAMELY BANDIT SIGNS. BANDIT SIGNS ARE SMALL SIGNS THAT ARE PLACED IN THE RIGHT-OF-WAY ALONG ROADWAYS ON UTILITY POLES, AND ON MEDIANS ACROSS THE CITY. BANDIT SIGNS HAVE BEEN A TROUBLESOME ISSUE FOR SOME TIME, BUT THE MAGNITUDE OF THIS PROBLEM EXCEEDS THE CAPACITY OF OUR CODE COMPLIANCE RESOURCES. THEREFORE IN THE FISCAL YEAR '03 WE HAVE WORKED WITH OTHER CITY DEPARTMENTS TO HELP US COLLECT AND PICK SIGNS FROM THE RIGHT-OF-WAY AND THIS WILL HAVE A DRASTIC REDUCTION IN THE NUMBER OF SIGNS THAT ARE -- THAT ARE GOING TO BE PLACED IN THE RIGHT-OF-WAY. THE DEPARTMENTS THAT HAVE BEEN HELPING US WITH THIS PROCESS SEVERAL MONTHS AGO, ARE BEGINNING TO SEE A SIGNIFICANT IMPROVEMENT IN THE SIGNS THAT ARE IN THE RIGHT-OF-WAY. THE DEPARTMENT WILL ALSO ESTABLISH A VOLUNTEER SIGN RANGER PROGRAM THROUGH WHICH CITIZEN VOLUNTEERS WILL BE TRAINED TO ASSIST THE CITY IN REMOVING ILLEGAL SIGNS AND EDUCATING THE COMMUNITY ABOUT -- ABOUT WHAT CANNOT BE PLACED IN THE RIGHT-OF-WAY. IN ORDER TO MAINTAIN THE PUBLIC RIGHTS OF WAY, THE DEPARTMENT HAS TRAINED RIGHT-OF-WAY CREWS IN 8 OTHER CITY DEPARTMENTS TO HELP US WITH THIS ENDEAVOR. FINALLY, TO PROMOTE AWARENESS AND CITIZEN INVOLVEMENT, THE DEPARTMENT WILL PARTNER WITH KEEP AUSTIN BEAUTIFUL TO LAUNCH THE CITY'S FIRST ANNUAL CITY-WIDE VOLUNTEER CLEANUP EFFORT TO COLLECT THOSE BANDIT SIGNS. THAT CONCLUDES MY PRESENTATION, THANK YOU.

Mayor Garcia: QUESTIONS FOR MS. GLASGO? MS. GLASGO, ON SLIDE NUMBER 11, I GUESS WE HEAR A LOT OF COMPLAINTS THAT -- THAT WE DON'T HAVE ENOUGH INSPECTORS, CODE COMPLIANCE INSPECTORS. LOOKS LIKE -- THIS HAS TAKEN ABOUT 100 DAYS IN THE HOUSING AND 120 DAYS IN ZONING. WE HAVE GOT -- HOW LONG IT TAKES FOR US TO RESOLVE IT, HOW LONG DOES IT TAKE FOR US TO RESPOND?

Glasgo: FOR RESPONSE, WE RESPOND WITHIN -- WITHIN -- WITHIN 48 HOURS. WE HAVE -- WE HAVE RESPONDED --

ADDITIONAL CALLS THAT HAVE COME IN, DO WE HAVE ANY PROACTIVE INSPECTIONS.

Glasgo: NO, MAYOR?

OR STRICTLY COMPLAINT DRIVEN.

Glasgo: IT'S COMPLAINT DRIVEN. GIVEN THE FACT IN ZONING, IN THE ZONING AREA WE HAVE SIX ZONING INSPECTORS, IN HOUSING 11. THE COMPLAINTS ARE -- ARE DRIVEN BY THE CALLS WE GET IN, BUT -- BUT OBVIOUSLY IN AREAS WHERE WE ARE WORKING THROUGH THE NEIGHBORHOOD PLANNING PROCESS WHERE WE -- WHERE WE HAVE CONCERNS THAT ARE RAISED THROUGH THAT PROCESS, THEN WE CAN WORK TOWARDS A PROACTIVE PROCESS BY PARTNERING WITH OTHER CITY DEPARTMENTS TO GET TO THAT POINT. BUT GENERALLY CITY-WIDE IT'S BASED ON COMPLAINTS.

WE HAVE DONE SOME EFFORTS WITH -- WITH THE COMMUNITY CLEANUP, FOR SPECIFIC AREAS, WE TARGETED WITH SOLID WASTE. I THINK SOLID WASTE. I JUST WANTED TO MENTION THAT. THERE HAS BEEN SOME TARGETED NEIGHBORHOOD-WIDE CLEANUPS, PARTNERING WITH SOLID WASTE DEPARTMENT BECAUSE THEY ALSO DO DEBRIS REMOVAL, WASTES. THERE HAVE BEEN TARGETED EFFORTS AS WELL AS MR. RHOADES, MS. GLASGO HAVE BEEN WORKING ON CROSS-TRAINING AND COORDINATION EFFORTS. THEY HAD FOCUS GROUP MEETING WAS THEIR STAFF ON THOSE TWO ISSUES. THOSE ARE THE TWO OTHER EFFORTS THAT I'M AWARE OF FOR MORE OF A PROACTIVE APPROACH AS OPPOSED TO COMPLAINT DRIVE VERY MUCH, BUT THOSE ARE THE ONLY ONES. COMPLAINT DRIVEN, BUT THOSE ARE THE OTHER ONES.

Mayor Garcia: FURTHER QUESTIONS?

Slusher: YEAH. YOU TARGETED SOME, FOR NEIGHBORHOOD PLANS, THE NEIGHBORHOODS WHERE LIGHT RAIL COULD PASS THROUGH, ASSUMING THAT IT'S PASSED. FIRST OF ALL, I'M WONDERING HOW CLOSELY YOU ARE COORDINATING WITH CAPITAL METRO ON THAT, BECAUSE METRO IS LOOKING AT DIFFERENT ROUTES, ALTERNATIVES TO WHAT WAS PUT UP -- PUT BEFORE THE VOTERS LAST TIME.

Glasgo: WE HAVE BEEN WORKING WITH CAPITAL METRO. CAPITAL METRO ACTUALLY CAME TO US A COUPLE OF YEARS AGO, IN FACT RIGHT AFTER THE DEPARTMENT WAS CREATED A YEAR AGO AND ASKED THAT WE BEGIN WORKING WITH THEM, SO WE WILL WORK VERY CLOSELY WITH THEM AND WE SELECTED THE AREAS BASED ON THE ALTERNATIVE ROUTES THAT -- SO WE ARE COVERED EITHER WAY, DEPENDING ON WHETHER A OR B ROUTES GO FORWARD.

Slusher: SO YOU ARE GOING TO LOOK AT THOSE, DIFFERENT ALTERNATIVES AS PART OF THE NEIGHBORHOOD PLAN?

Glasgo: CORRECT. THAT IS CORRECT. THE NEIGHBORHOOD -- THE AREAS THAT WE HAVE SELECTED FOR THE NEXT FISCAL YEAR ARE BASED ON WHAT WE HAVE BEEN WORKING WITH CAPITAL METRO. THAT THEY WOULD BE CONSIDERING.

Slusher: OKAY, OKAY. I JUST WANTED TO MAKE SURE WE DON'T GET IN A SITUATION WHERE THE NEIGHBORHOOD PLAN IS DECIDING SOMETHING THAT THE VOTERS OVERALL WOULD BE DECIDING.

Glasgo: NO. FOR YOUR LAND USE ASPECT -- PURPOSES, WE ARE SIMPLY GOING TO BE AHEAD OF THE GAME IF YOU WILL BY BEGINNING THE NEIGHBORHOOD PLANNING PROCESS BECAUSE LAND USE, AS YOU WELL KNOW, IS A TOUCHY SUBJECT. TO THE EXTENT THAT YOU CAN BEGIN ADDRESSING THAT ASPECT EARLY ON IN THE PROCESS, THEN IN THE EVENT OF THAT -- OF THE LIGHT RAIL PROPOSAL IS RECONSIDERED FAVORABLY, THEN WOULD HAVE BEEN ALREADY FURTHER ALONG IN DEALING WITH THE LAND USE AND THEN CAPITAL METRO WOULD DEAL WITH THE INFRASTRUCTURE.

Slusher: OKAY. METRO PUT SOME FUNDS INTO THAT, IN LAST YEAR'S BUDGET.

THAT WAS MY UNDERSTANDING.

Slusher: OKAY.

THAT'S CORRECT. IN ADDITION, THERE'S CITY STAFF THAT WORKS WITH JOHN ALMAN ON THE LIGHT RAIL PROJECT AND RECENTLY WE HAD A MEETING AND TALKED ABOUT -- THERE ARE SOME STUDIES THAT -- THAT THEY NEED TO CONDUCT THAT WE CAN TRY TO FOLD THEM IN AND WORK TOGETHER. SO WE WILL BE SETTING UP A MEETING WITH JOHN ALMAN AND APPEAR MET AS WELL TO FOLLOW UP. MAKE SURE WE DON'T GO OUT AND DO NEIGHBORHOOD PLANNING, FOCUS GROUPS WITH THOSE CITIZENS AND COME BACK AND DO THEM RIGHT AFTER THAT. SO WE TRY TO INCORPORATE THAT TOGETHER. THAT WAS ONE OF THE ISSUE THAT'S WE HAD RECENTLY DISCUSSED WITHIN THE LAST TWO WEEKS.

Slusher: OKAY. THANK YOU, THAT SOUNDS GOOD.

Mayor Garcia: I DON'T KNOW WHICH DEPARTMENT DOES THIS, BUT YOU MIGHT TELL ME, MS. GORDON. PANHANDLERS, WHO -- OR PEOPLE THAT STAND ON THE CORNERS ASKING FOR MONEY, SOMETIMES THEY APPEAR TO BE LEGITIMATE LIKE UNIVERSITY KIDS, DO THEY GET PERMITS FROM THE CITY? TO STAND AT INTERSECTIONS, 183 AT 35, ON SATURDAYS WE HAVE -- WE HAVE ALL OF THESE PEOPLE. OTHER INTERSECTIONS, FOR 183 AT CAMERON, WE HAVE PEOPLE THAT LOOK LIKE NURSES, YOU KNOW, DRESSED IN WHITE, WHITE CAPS, I DON'T KNOW -- WHO --

I'M NOT AWARE OF PERMITTING HAS WE DO FOR PANHANDLING. I CAN CHECK INTO IT, SEE IF --

Mayor Garcia: WE DON'T PERMIT THOSE?

I'M NOT AWARE OF IT, I'M SAYING I'M NOT AWARE OF IT. I DON'T KNOW IF LEGAL OR ANYONE ELSE IS AWARE OF PERMITTING THAT.

Mayor Garcia: THERE'S INTERSECTIONS WHERE THERE'S LOTS OF THEM. -- YOU KNOW, THEY -- THEY TALK ABOUT DISTRACT MOTORISTS, POTENTIAL DANGER, I MEAN THAT'S --

I CAN CHECK. I WILL FOLLOW UP WITH THE A.P.D. AND WITH OUR PERMITTING AREAS AND SEE IF THERE'S ANYTHING, WE WILL GET BACK TO YOU.

Mayor Garcia: OKAY, FURTHER QUESTIONS FOR MS. GORDON OR MS. GLASGO? THANK YOU.

THANK YOU. COUNCIL, THAT'S -- THAT'S ALL THE ONES THAT WE THINK ARE -- WE ARE GOING TO DO THIS MORNING. WE HAVE -- WE HAVE A FEW OTHERS THAT WE WILL PICK UP TOMORROW. WE ARE MEETING AT 10:00. WE WILL DO -- DEVELOPMENT -- TRANSPORTATION PLANNING AND SUSTAINABILITY, MR. LIBRACH WILL BE THERE. WATERSHED PROTECTION AND DEVELOPMENT REVIEW. MR. HEIGHTS WILL DO THAT ONE TOMORROW AND DEVELOPMENT OF ENVIRONMENT AND TRANSPORTATION SERVICES. WELL, NO, THAT'S THE GENERAL CATEGORY. WE HAVE DONE NEIGHBORHOOD PLANNING AND ZONING. SO WE HAVE -- CORRECT ME IF I'M WRONG, CITY MANAGER, BUT I THINK WE HAVE TWO MORE, TRANSPORTATION PLANNING AND SUSTAINABILITY AND WATERSHED PROTECTION DEVELOPMENT AND REVIEW.

> THAT'S CORRECT, WE WILL GIVE THOSE PRESENTATIONS TOMORROW AT THE BEGINNING OF THE MEETING.

Mayor Garcia: OKAY. OKAY. I WILL ENTERTAIN A MOTION TO ADJOURN.

SO MOVE.

Mayor Garcia: MOTION BY COUNCILMEMBER SLUSHER, SECONDED BY COUNCILMEMBER WYNN. ALL IN FAVOR, SIGNIFY BY SAYING AYE.?

AYE.

Mayor Garcia: MOTION CARRIES ON A VOTE OF 5 TO 0 TO 2 WITH COUNCILMEMBER ALVAREZ AND THOMAS TEMPORARILY OFF THE DAIS, WE ARE ADJOURNED. 11:50 A.M.

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