Closed Caption Log, Council Meeting, 10/07/99

>>MAYOR WATSON: I'LL CALL TO ORDER THE AUSTIN STOUN. THIS IS THE REGULAR MEETING OF THE CITY COUNCILL. OCTOBER 7, 1999 AND WE ARE MEETING AT THE CITY COUNCILL CHAMBERS LOCATED AT 2307 WEST SECOND STREET IN AUSTIN, TEXAS. LET ME READ CHANGES AND CORRECTIONS TO THE AGENDA AND TIME CERTAIN ITEMS. CHANGES AND CORRECTIONS TO THE AGENDA, THERE WILL BE -- ONE OF THE ITEMS IS A SPECIAL CALLED MEETING AND THAT IS ITEM 1 OF THE SPECIAL CALLED MEETING, THAT IS BEING SPONSORED BY COUNCILMEMBER SPELMAN, MAYOR PRO TEM GOODMAN AND COUNCILMEMBER GARCIA. DURING THE REGULAR COUNCIL MEETING, ITEM NO. 63, IT INDICTES IT IS TO BE REVIEWED BY THE ENVIRONMENTAL BOARD. IT WAS RECOMMENDED BY THE ENVIRONMENTAL BOARD. ITEM NO. 65, THE SAME IS TRUE. AND ITEM NO. 66, IT INDICATES RECOMMENDED BY ENVIRONMENTAL BOARD ON 10-6-9. ITEMS SET FOR A TIME CERTAIN, WE WILL HAVE A BRIEFING THIS MORNING ON THE PROPOSED AGREEMENT WITH THE LOWER COLORADO RIVER AUTHORITY CONCERNING WATER, BUT WE WILL SET FOR ACTION AT A TIME CERTAIN OF 2:00 P.M., THOSE ARE ITEMS 66 THROUGH 69. AT 3:30, ITEMS 84 AND 85 RELATING TO THE AUSTIN HOUSING FINANCE CORPORATION. AT 4:00 P.M. ITEMS 86 THROUGH 89 WHICH ARE ZONING ITEMS. AT 6:00 P.M. WILL BE ITEM 91. ITEMS 90 AND 92 WILL BE PULLED FOR POSTPONEMENT. THE FIRST ITEM ON OUR AGENDA IS TO GO TO BRIEFINGS. WE HAVE THREE BRIEFINGS SCHEDULED THIS MORNING. THE FIRST ONE IS THE CAPITAL METRO MOBILITY PLAN. AND I'LL ASK CITY MANAGER DO WE HAVE --.

>>SLUSHER: MAYOR?

>>MAYOR WATSON: YES, KMURB.

>>SLUSHER: THAT HAS BEEN POSTPONED. THERE IS SOME DELAY IN SOME INFORMATION SO THAT IS GOING TO BE PRESENTED TO THE BOARD, METRO BOARD TOMORROW.

>>MAYOR WATSON: I WASN'T AWARE OF THAT. ITEM 2 DISCUSS A WATER SUPPLY AGREEMENT BETWEEN THE CITY OF AUSTIN AND THE LOWER COLORADO RIVER AUTHORITY TO INCREASE THE FIRM YIELD AVAILABLE TO AUSTIN TO 325,000 ACRE FEET A YEAR. WE ARE ALSO POSTED TO HAVE A BRIEFING FROM THE CLEAN AIR TASK FORCE AND WE HAVE THE DIRECTOR OF THE CLEAN AIR TASK FORCE WADE THOMASON HERE AND I'LL GIVE WARNING, WE MAY END POSTPONING THAT BUT I APPRECIATE YOU ALL BEING HERE THIS MORNING. IT'S GOING TO BE LESS THAN 30 MINUTES, ISN'T THAT RIGHT?

>> ABOUT 15.

>>MAYOR WATSON: COUNCIL, IF I DON'T HAVE ANY OBJECTION, WHY DON'T WE GO AHEAD BECAUSE I THINK IT IS IMPORTANT FOR US TO GET A BRIEFING ON THAT. MR. THOMASON, IF YOU WILL COME FORWARD, WE'LL GO AHEAD AND TAKE UP THAT ITEM. COUNCIL, THE PURPOSE OF HAVING THIS BRIEFING IS THAT, AS YOU KNOW, AUSTIN HAS BEEN AT NEAR NON-ATAKENMENT STATUS FOR A COUPLE OF YEARS. THERE IS A LOT THAT NEEDS TO BE DISCUSSED AS FAR AS THAT. THIS SUMMER WE EXCEEDED THE STANDARD, THE THREE YEAR STANDARD, EIGHT HOUR STANDARD IN SUCH A WAY THAT WE ARE TECHNICALLY IN A POSITION TO BE DECLARED A NON-ATTAINMENT AREA. I'M NOT GOING INTO A WHOLE LOT OF DETAIL, I'LL TURN IT OVER TO MR. THOMASON, BUT WE FELT LIKE IT WAS IMPORTANT EVEN TODAY ON AN OZONE ACTION DAY TO BE IN A POSITION TO SPEAK.

>> [INAUDIBLE].

>>MAYOR WATSON: WHY DON'T YOU DO THAT BECAUSE YOU CAN SEE THINGS BETTER AND THE COUNCIL BETTER. WHILE HE IS GOING OVER THERE I'LL SAY ONE OTHER THING. THE COUNCIL IS ALL FAMILIAR WITH THE CLEAN AIR FORCE FOR CENTRAL TEXAS. WE HAVE A NEW DIRECTOR AND THAT IS MR. THOMASON. I THINK WE ARE VERY LUCKY TO BE IN A SITUATION TO HAVE MR. THOMASON SERVING AS DIRECTOR. HE COMES TO THE AIR FORCE WITH A GREAT DEAL OF EXPERIENCE, NOT THE LEAST OF WHICH IS A PUBLIC HEALTH ADVOCATE WITH THE AMERICAN LUNG ASSOCIATION. I CAN SAY THAT I HAD THE PLEASURE OF WORKING CLOSELY WITH HIM BACK WHEN I WAS SERVING AS CHAIR OF THE TEXAS AIR CONTROL BOARD IN CLEAN AIR MATTERS. HE WAS AT THE AMERICAN LUNG ASSOCIATION AT THAT TIME AND WE HAD A GOOD OPPORTUNITY TO WORK TOGETHER AND WE'RE REAL PLEASED YOU ARE HERE AND I'LL TURN IT OVER TO YOU.

>> THANK YOU VERY MUCH, MAYOR, AND GOOD MORNING, CITY COUNCILL MEMBERS. IT'S A PLEASURE TO BE HERE. I APPRECIATE THE OPPORTUNITY TO SPEAK TO YOU THIS MORNING. THIS YEAR HAS BEEN A PARTICULARLY CRITICAL ONE FOR AIR QUALITY IN CENTRAL TEXAS BECAUSE OF MONITORED HIGH LEVELS OF OZONE DURING THE MONTHS OF AUGUST AND SEPTEMBER, IT APPEARS THAT EPA MAY CLASSIFY AS A A NON-ATTAINMENT AREA IN JULY OF 2000. ALTHOUGH THERE IS SOME UNCERTAINTY ABOUT THIS BECAUSE OF A PENDING LAWSUIT, BOTH THE MAYOR AND I FELT IT WOULD BE BENEFICIAL FOR COUNCIL TO RECEIVE AN UPDATE ON THIS ISSUE. AS YOU PROBABLY KNOW, IN 1997, E.P.A. IMPLEMENTED A NEW OZONE STANDARD WHICH WAS AN EIGHT HOUR STANDARD. THE PREVIOUS STANDARD WAS A ONE HOUR STANDARD. UNDER THIS EIGHT HOUR STANDARD, THE STANDARD IS 85 PARTS PER BILLION, AND THE WAY THAT THAT IS MEASURED IS OZONE IS MEASURED ON A DAILY BASIS OVER A THREE YEAR PERIOD. THE FOURTH HIGHEST EIGHT HOUR READING FROM EACH YEAR IS AVERAGED. AND FROM THAT YOU GET YOUR THREE YEAR OZONE. WHICH INDICATES WHETHER YOU ARE IN AAND IMENT OR NON-ATAKENMENT OF THE STANDARD. COMING INTO THIS YEAR, WE HAD BEEN RIGHT AT AND AROUND THE STANDARD, SO THIS BEING OUR THIRD YEAR OF MEASUREMENTS IT WAS AN ESPECIALLY CRUCIAL YEAR FOR US. CAN YOU BRING THAT CHART UP? IF YOU WILL LOOK AT THE CHART, WHAT YOU SEE ARE THE TWO MONITORS FOR THIS AREA, WHICH ARE -- ONE IS IN MURCHISON MIDDLE SCHOOL ON FAR WEST BOULEVARD BOULEVARD OFF OF MOPAC AND THE OTHER IS THE AUDUBON SIDE IN FAR NORTHWEST TRAVIS COUNTY CLOSE TO THE WILLIAMSON TRAVIS COUNTY LINE. WE HAD THE FOURTH HIGHEST READING OF 87 FOR 1997. FOURTH HIGHEST READING OF 81 FOR '98 AND FOR THIS YEAR TO DATE OUR FOURTH HIGHEST READING HAS BEEN 99. NOW, IN ORDER TO REMAIN IN ATTAINMENT, WE WOULD HAVE TO COME IN AT 88 OR BELOW FOR THIS YEAR ON THE AUDUBON SITE. AS YOU CAN SEE, WE WELL EXCEEDED THAT. SO AS A RESULT, OUR THREE YEAR AVERAGE AT THAT SITE, I BELIEVE IS NOW 89 PARTS PER BILLION. YES. 89 PARTS PER BILLION FOR A THREE YEAR AVERAGE, AND THE STANDARD IS 85 PARTS PER BILLION. SO THEREFORE WE ARE WELL INTO WHAT APPEARS TO BE NON-ATTAINMENT STATUS. I MENTIONED -- I MENTION IN MY OPENING THAT THERE IS A LAWSUIT PENDING, AND IN MAY OF THIS YEAR THERE WAS A SPLIT DIGS AT THE DC CIRCUIT COURT. IT WAS A CHALLENGE TO THIS STANDARD WHICH WAS CHALLENGING BASIS OF THE SCIENCE AND E.P.A.'S AUTHORITY TO IMPLEMENT THE STANDARD. AND THE COURT DIDN'T QUESTION E.P.A.'S AUTHORITY -- I'M SORRY, DIDN'T QUESTION THE REASONABLENESS OF THEIR SCIENCE, BUTTS IT DID QUESTION THEIR AUTHORITY TO ENFORCE THE STANDARD. SO WHAT WE HAVE NOW IS THE STANDARD WHICH IS ON THE BOOKS, BUT CURRENTLY CAN'T BE BE ENFORCED. THIS COURT CASE WILL BE HEARD ON APPEAL IN NOVEMBER AND THE OUTCOME OF THAT APPEAL WILL DETERMINE TO A LARGE SFENT WHETHER WE HAVE AN EIGHT HOUR STANDARD IN PLACE NEXT YEAR. NOW, BECOMING A NON-ATTAINMENT AREA IS A SERIOUS ISSUE FOR CENTRAL TEXAS. BECAUSE BEING CLASSIFIED AS NON-ATTAINMENT SETS OFF A SERIES OF EVENTS. KEY AMONG THESE IS THE REQUIREMENT TO FORMULATE A STATE IMPLEMENTATION PLAN OR SIP. AND WHAT THIS SIP DOES IS IT DETAILS THE STRATEGIES THAT THIS AREA WOULD UNDERTAKE TO GET ITSELF BACK INTO ATTAINMENT OF THE OZONE STANDARD. SOME EXAMPLES OF THE STRATEGIES THAT MIGHT BE INCLUDED IN THE STATE IMPLEMENTATION PLAN INCLUDE REQUIREMENTS FOR CLEANER GASOLINE, WHICH WOULD COST AS MUCH AS TWO TO SIX CENTS PER GALLON MORE TO THE CONSUMER. AND ANNUAL VEHICLE INSPECTION MAINTENANCE PROGRAM WHICH AVERAGES ABOUT $15 IN OTHER PARTS OF THE STATE THAT HAVE SUCH A PROGRAM. AND POSSIBLE RETROFITING OF POLLUTION CONTROL TWITIONS FOR AREA SOURCES SUCH AS SMALL BUSINESSES LIKE DRY CLEANER, PRINT SHOPS, AUTO BODY REPAIR SHOPS. IN ADDITION, BECAUSE OF ANOTHER RECENT COURT RULING WHICH INVOLVES THE ISSUE OF TRANSPORTATION CONFORM TI, WE COULD FACE A VERY REAL POSSIBILITY OF A FREEZE ON FEDERAL HIGHWAY DOLLARS. THIS COULD TIE UP AS MUCH AS 850 MILLION FEDERAL HIGHWAY DOLLARS AND WOULD CERTAINLY BE DETRIMENTAL TO OUR FUTURE GROWTH AND ECONOMIC VITALITY. AS YOU CAN EASILY SEE, THERE ARE SOME SERIOUS ISSUED TIED TO AIR QUALITY. AND I WOULD LIKE TO -- I WOULD LIKE TO JUST KIND OF GIVE YOU A QUICK OVERVIEW OF WHAT HAPPENED THIS SUMMER AND WHY WE ARE IN THE POSITION WE ARE IN AT THIS TIME. FIRST I WOULD LIKE TO HAVE THE CONTROL BOOTH ROLL THE TAPE THAT I BROUGHT THAT GIVES YOU A GRAPHIC ON OZONE FORMATION.

>>MAYOR WATSON: CAN WE DO THAT?

>> LEVELS SOAR INTO THE DANGER ZONE. KVUE-24 CHIEF METEOROLOGIST MARK MURRAY IS JOINING US TO TELL US ABOUT WHAT ROLE THE WEATHER PLAYS.

>> AIR QUALITY IN COOLER MONTHS IS USUALLY PRETTY GOOD. IT'S ONLY DURING THE SUMMER WE GET INTO THESE PROBLEMS AND THERE'S A GOOD REASON FOR THAT, IT'S OUR HOT TEXAS SUMMER SUN. WHAT IT DOES, IT TAKES THE NITROUS OXIDES AND THE HYDROCARBONS ALREADY IN THE ATMOSPHERE AND THE TEXAS SUMMER SUN COOKS THEM AND CREATES OZONE. THAT'S THE PROBLEM WE HAVE ON TOP OF THAT, THE VERY LIGHT WINDS, THAT MEANS THE POLLUTION DOES NOT DISSIPATE AND THAT'S WHY WE SEE THESE HIGH OZONE READINGS WE HAVE THIS TIME OF YEAR.

>> SO WHAT HAPPENED THIS SUMMER, WELL, IF YOU WILL RECALL, WE HAD KIND OF STRANGE WEATHER THIS YEAR. WE HAD JUNE AND JULY WAS CHARACTERIZED BY A LOT OF RAINFALL, UNSEASONABLY COOL DAYS, NICE BREEZES BLOWING THROUGH, IT WAS REALLY VERY ENJOYABLE AND UNCHARACTERISTIC OF SUMMERTIME IN AUSTIN. ONE OF THE REASONS WHY I WANTED TO SHOW THAT GRAPHIC IS BECAUSE THE WEATHER PLAYS A PART IN THIS ALSO. AND ON JULY 30TH, OUR FOURTH HIGHEST READING WAS AT 74 PARTS PER BILLION, AND YOU SEE NOW THAT WE'VE HIT 99. WELL, WHAT HAPPENED BETWEEN AUGUST AND OCTOBER? AROUND THE BEGINNING OF AUGUST, WE HIT A STRETCH OF WEATHER THAT -- THAT WAS CHARACTER RITIONED BY EXTREME HEAT, STAGNANT WIND PATTERNS, AND WE HAVEN'T HAD ANY RAIN HERE IN SO LONG I CAN'T EVEN REMEMBER WHEN WE ACTUALLY HAD A DECENT RAINFALL. BUT IN SIX WEEKS OUR FOURTH HIGHEST HAD SHOT UP TO 97 AND IT NOW SITS AT 99. WELL, WHERE ARE -- WHERE IS THE PROBLEM? WHERE IS THIS COMING FROM? RECENTLY A EMISSIONS INVENTORY WAS DONE BY U.T. AND CAMPO AND THE CLEAN AIR FORCE IS ALSO INVOLVED WITH THAT EFFORT, AND I WOULD LIKE TO JUST SHOW YOU QUICKLY, IF YOU WILL RECALL THE TWO COMPONENTS OF OZONE THAT WE'RE MOST CONCERNED WITH ARE VOC'S AND NITROGEN OXIDES. SO LET'S LOOK AT THE SOURCE OF THOSE TWO COMPONENTS. IF YOU LOOK AT THE CHART, YOU WILL FIND SOMETHING THAT IS PRETTY REMARKABLE, AND THAT IS THAT 67% OF THE VOC SOURCES IN THIS AREA COME FROM BUY YO T GENICS, TREES AND PLANT LIFE, AND I FIND THAT TO BE PRETTY REMARKABLE. POINT SOURCES, WHICH ARE YOUR STATION EE EMITTERS ONLY ACCOUNT FOR ONE PERCENT OF THE VOC'S. VOC'S ARE VOLATILE ORGANIC COMPOUNDS OR HYDROCARBONS. THEY ARE EVAPORATEIVE EMISSIONS, BUT THEY ALSO OCCUR NATURALLY IN NATURE AND ARE PRODUCED BY TREES. SO WHAT DOES THAT TELL US? WELL, LET'S LOOK AT THE SOURCES OF NOX. IF YOU LOOK AT THE NITROGEN OXIDE PI CHART, YOU WILL SEE THAT 42% IS CAUSED BY ON ROAD AND 33% BY NON-ROAD AND NON-ROAD ARE THINGS LIKE RECREATIONAL VEHICLES, CONSTRUCTION EQUIPMENT, ANY TYPE OF INTERNAL COMBUSTION EQUIPMENT LIKE LEAVE BLOWERS, LAWN MOWERS AND THINGS OF THAT NATURE. SO WHAT CONCLUSION CAN WE DRAW? WELL, WE CAN'T GO AND CUT DOWN ALL THE TREES TO GET RID OF THE VOC'S. THOSE WERE HERE BEFORE WE WERE. THE THINGS THAT WE CAN ADDRESS ARE THE THINGS THAT ARE MAN MADE.

>>MAYOR WATSON: AND SO WE'RE CLEAR, THOSE VOC'S WOULDN'T BE CAUSING A PROBLEM IN THE ABSENCE OF THE THINGS THAT ARE MAN-MADE.

>> THAT'S CORRECT.

>>MAYOR WATSON: PART OF THE INVENTORY, BUT HE WOULDN'T BE CAUSING THE POLLUTION PROBLEMS IN TERMS OF THINGS LIKE THE NOX AND THE ON ROAD AND OFF ROAD.

>> RIGHT, THE VOC'S CAN'T BE REACTIVE WITHOUT THE NOX WITH WHICH TO BE REACTIVE. SO WHAT DOES THIS TELL US? WELL, OUR PROBLEM IS WITH MOBILE SOURCES, BOTH ON ROAD AND OFF ROAD. OVER 75% OR ABOUT 75% OF THE TOTAL NOX COMES FROM ON ROAD AND OFF ROAD MOBILE SOURCES. THAT TELLS ME THAT SOME CHANGES ARE GOING TO HAVE TO BE MADE IN THIS REGION. HOW DO YOU REDUCE THE NOX FROM MOBILE SOURCES? WELL, YOU TRY TO GET PEOPLE OUT OF SINGLE OCCUPANT VEHICLES AND THAT'S A VERY DIFFICULT CHALLENGE. YOU HAVE TO PROVIDE INCENTIVES FOR PEOPLE TO LOOK AT COMMUTE OPTIONS, ALTERNATIVES TO DRIVING TO WORK IN A SINGLE OCCUPANCY VEHICLE. SOME OF THE THINGS THAT THE CLEAN AIR FORCE HAS BEEN WORKING ON IS WE HAVE AN EARLY OUTREACH PROGRAM AND WE'VE BEEN GOING OUT TO MAJOR EMPLOYERS IN THE COMMUNITY AND WORKING WITH THEM ON WAYS THAT THEY CAN -- THEY CAN HELP REDUCE THE EMISSIONS, AND ANOTHER KEY COMPONENT OF THIS IS TELEWORKING, WHICH IS CITY HAS ADOPTED AS A POLICY. AND TELEWORKING IS WHERE AN EMPLOYEE STAYS AT HOME AND WORKS ON THEIR COMPUTER RATHER THAN COMMUTING INTO WORK AND BACK. AND IF YOU LOOK AT THAT, IF THEY DO THAT ONE DAY A WEEK, THAT ELIMINATES 20% OF THEIR VEHICLE MILES TRAVELED FOR THAT WEEK. IF WE HAD ENOUGH WIDESPREAD PARTICIPATION FOR A PROGRAM OF THAT NATURE, WE COULD REALLY MAKE A SIGNIFICANT IMPACT ON THE CONTRIBUTION OF MOBILE SOURCES TO THE NOX PROBLEM. SOME OF THE OTHER THINGS THAT OUR ORGANIZATION DOES IS YOU PROBABLY ARE WELL FAMILIAR WITH THE OZONE ACTION DAY PROGRAM, AND WE'RE RESPONSIBLE FOR GETTING THE WORD OUT ON THAT AND WORKING WITH EMPLOYERS AND OTHERS ON TAKING -- TAKING ACTIONS ON OZONE ACTION DAYS. WE ALSO IN WORKING WITH THE MAYOR WERE ABLE TO NEGOTIATE WITH COKE INDUSTRIES THIS YEAR TO BRING CLEANER GASOLINE TO THE AREA WITHOUT THE ADDED COSTS BEING PASSED ON TO THE CONSUMER, AND WE'VE HAD LOW READ VAPOR PRESSURE GASOLINE WHICH HAS LESS VOLATILITY AND LESS EMISSIONS, SO THAT CERTAINLY HELPED, BUT WE NEED TO KEEP STRIVING IN THAT AREA AND PUSH FOR LOWER SULPHUR GASOLINE AND CLEANER FUEL THAN WE CURRENTLY HAVE. ANOTHER THING THAT WE'VE BEEN DOING IS WE'RE CONDUCTING A PILOT PROGRAM THIS WEEK USING REMOTE SENSING TECHNOLOGY WHICH IS STATE OF THE ART FOR TESTING VEHICLE EMISSIONS AND WE TESTED OVER 300 CARS OUT AT PALMER AUDITORIUM ON TUESDAY. THIS IS ONLY A BEGINNING.

>>MAYOR WATSON: AND I NOTICE YOU ARE LEAVING OUT THAT MINE PASSED. [LAUGHTER] YOU WERE GOING TO GET TO IT PROBABLY.

>> NO, I WAS GOING TO LET YOU SAY THAT. [LAUGHTER]. BUT LET ME JUST SUM UP BY SAYING THAT WE'VE BEEN VERY FORTUNATE IN CENTRAL TEXAS OVER THE YEARS WITH REGARD TO OUR AIR QUALITY. WE'VE ALSO ENJOYED A LOT OF PROSPERITY AND A BOOMING ECONOMY HERE AND A HIGH QUALITY OF LIFE. AND AIR QUALITY IS SOMETHING THAT WE'VE REALLY TAKEN FOR GRANTED, BUT THE TIME HAS COME AND IT'S OBVIOUS BASED ON THE MONITORING THAT WE HAVE THAT IT'S TIME TO TAKE ACTION, AND THE BEST THING WE CAN DO IS TAKE EARLY VOLUNTARY ACTION BEFORE E.P.A. COMES IN HERE IN A FEW YEARS AND STARTS DICTATING TO US WHAT WE WILL AND WON'T DO. AND WE HAVE A SMALL WINDOW OF OPPORTUNITY OVER THE NEXT THREE YEARS TO REALLY PUT TOGETHER SOME EFFECTIVE VOLUNTARY EARLY ACTION PROGRAMS. AND THAT'S GOING TO BE THE GOAL OF THE CLEAN AIR FORCE IS TO WORK WITH THE GOVERNMENT AND THE BUSINESS COMMUNITY AND LOCAL CITIZENS TO TRY AND DO AS MUCH AS WE CAN ON A VOLUNTARY BASIS. I APPRECIATE YOUR TIME THIS MORNING. I KNOW YOU HAVE A LOT OF PRESSING ISSUES ON THE AGENDA, BUT I THANK YOU FOR ALLOWING ME THIS TIME AND I'LL BE MORE THAN HAPPY TO ANSWER ANY QUESTIONS YOU MIGHT HAVE.

>>MAYOR WATSON: DOES ANYBODY HAVE ANY QUESTIONS? COUNCILMEMBER LEWIS.

>>LEWIS: YES, LET ME ASK YOU, IN '98 WE HAD THE FIRE THAT WAS IN SOUTH AMERICA. WHAT WAS THE FINDING ON THAT? DID THEY ELIMINATE THOSE DAYS FROM THE READING?

>> YES, THE SMOKE DIDN'T COUNT TOWARD OUR NON-ATTAINMENT STATUS.

>>LEWIS: AND YOU MENTION THE FACT OF THE CLEAN FUEL COMING IN. HAVE WE DID ANY PILOT PROGRAMS WITH THE FUEL NOZZLES FOR FOOLING AUTOMOBILES, THE VENT NOZZLES THAT IS NOW ON THE MARKET?

>> WE HAVEN'T DONE THAT YET.

>>LEWIS: WELL, YOU KNOW, BECAUSE I'M LOOKING AT 42% AND, YOU KNOW, I IMAGINE A SMALL AMOUNT OF THAT IS FROM FUELING AUTOMOBILES ON OZONE ACTION DAYS, BUT I THINK THAT IF WE WOULD START THAT PROGRAM AND PATE TRONIZE THE STATIONS THAT DO HAVE THEM, I THINK IT WOULD ENCOURAGE MORE STATIONS TO OBTAIN THOSE NOZZLES. I UNDERSTAND THAT THEY ARE NOT THAT EXPENSIVE, BUT IT IS A COST THAT IS INVOLVED IN CHANGING OUT THE NOZZLES ON GAS PUMPS.

>> THAT'S CORRECT. AND I BELIEVE THERE HAS TO BE SOME OTHER EQUIPMENT ADDED TO CREATE A VACUUM THAT CAPTURES THOSE EMISSIONS.

>>LEWIS: ALL RIGHT. ONE OTHER QUESTION. I KNOW THAT MOST OF THE TIMES IN AUSTIN THE WIND IS FROM THE SOUTHEAST. WHY IS IT THAT THE -- THE MONITORS IS IN NORTHWEST OR IN THE WEST PART OF THE TOWN? IS THAT SO THAT IT CAPTURES ALL OF THE EMISSIONS THAT COMES ACROSS THE CITY -- I MEAN OUT OF THE CITY? AND IF WE PUT THEM ON THE SOUTHEAST OR THE EAST SIDE OF TOWN, WHAT WOULD BE THE DIFFERENCE IN THE MEASUREMENTS?

>> I BELIEVE THE REASON THAT WAS DONE WAS BECAUSE WHEN OZONE FORMS, IT DOESN'T REMAIN STAGNANT IN THE AIR, IF THERE ARE ANY AIR CURRENTS AT ALL, IT CARRIES IT WITH THE PREVAILING WINDS. AND SO BASED ON TNRCC'S HISTORICAL DATA, THEY FELT THAT THAT WOULD BE WHERE WE WOULD FIND THE HIGHEST LEVELS, AND THAT HAS BEEN THE CASE THIS YEAR WITH THE AUDUBON SITE OUT BY NORTHWEST. WHETHER WE WOULD HAVE GOTTEN) HIGHER LEVELS IN EAST AUSTIN, I CAN'T REALLY SAY, BUT ULTIMATELY THE RESULT IS THE SAME. ONE MONITOR IN THIS AREA INDICATES NON-ATTAINMENT, THEN THE ENTIRE AREA GOES INTO NON-ATTAINMENT AND THAT'S GOING TO INCLUDE AT A MINIMUM ALSO WILLIAMSON AND HAYS COUNTIES AND COULD PULL IN TWO OTHER COUNTIES, CALDWELL AND BASTROP.

>>MAYOR WATSON: WHEN YOU ARE MEASURING OZONE, IT'S NOT THE SAME AS WHERE -- WHEN YOU ARE PLACING MONITORS TO MEASURE OZONE, YOU TAKE INTO ACCOUNT TRANSPORTATION OF THE -- THE CONTAMINANTS. AND IT'S NOT THE SAME AS PLACING A MONITOR, SAY, NEXT DOOR TO A POWER FACILITY AND THE ROLE IT WILL PLAY THERE THE WAY YOU MIGHT MONITOR OTHER MATTERS. SO OZONE -- OZONE MONITORS ARE PUT IN SPECIFIC PLACES TO TRY TO GET THE READINGS THAT YOU THINK ARE MORE GRAPHIC FOR THE AREA AND THAT'S WHY THE PLACEMENT OCCURRED AND THERE'S BEEN DEBATE ABOUT THAT FOR THE PAST SEVERAL YEARS.

>>LEWIS: OKAY. JUST ONE OTHER QUESTION. THE -- THE AVERAGE THAT YOU SAID IS A THREE YEAR AVERAGE, RIGHT?

>> YES.

>>LEWIS: SO WHAT -- DID YOU GIVE US THE AVERAGE WITHOUT THIS SMOKE-FILLED DAYS IN '98?

>> YES.

>>LEWIS: OR WAS THEY INCLUDED?

>> NO, THAT WAS NOT INCLUDED. AND THAT SMOKE WOULD BE CHARACTERIZED AS MORE OF A PARTICULATE PROBLEM, WHICH IS THE COMPONENTS OF WHICH ARE MORE LIKE SOOT OR UNBURNED PARTICLE -- CARBON PARTICLES. OZONE IS KIND OF A DIFFERENT ANIMAL BECAUSE IT'S A RESULT OF A CHEMICAL REACTION OF TWO COMPONENTS. SO I DO KNOW THAT A LOT OF THE CURRENT NON-ATTAINMENT AREAS LIKE HOUSTON WERE SCREAMING ABOUT THAT SMOKE, THAT IT SHOULDN'T COUNT TOWARD THEIR NON-ATTAINMENT AND TNRCC AGREED THAT IT SHOULD NOT.

>>LEWIS: ONE FINAL QUESTION. YOU MENTION THAT THE WEATHER HAS A LOT TO DO WITH IT. IN OTHER WORDS, WE HAVE SOME CONTROL, BUT WE DON'T HAVE -- I MEAN THE -- IF HOUSTON HAD A HIGH NON-ATTAINMENT AND THE WIND CAME FROM HOUSTON, REGARDLESS OF WHERE IT COME FROM, ONCE IT GET TO AUSTIN AND WE MEASURE IT, IT'S OURS; IS THAT CORRECT?

>> THAT'S -- I WOULD SAY THAT'S SOMEWHAT CORRECT BECAUSE THE GENERATION THAT WE HAVE HERE WOULD MIX WITH THAT, IT WOULDN'T BE JUST TOTALLY THE CONTRIBUTION FROM HOUSTON, BUT IT WOULD BE A COMBINATION OF THE TWO.

>>LEWIS: BUT I'M SAYING IF IT INCREASED OUR PRESENT READING, IT WOULD STILL BE CHARGED TO US REGARDLESS WHETHER IT CAME FROM HOUSTON OR SAN ANTONIO OR WHERE.

>> THAT'S CORRECT.

>>LEWIS: OKAY.

>>MAYOR WATSON: ANY OTHER QUESTIONS? COUNCILMEMBER GARCIA.

>>GARCIA: THANK YOU VERY MUCH, MAYOR. THE BAD AIR, THE POLLUTION THAT WE HAVE HAS A VERY DETRIMENTAL EFFECT ON RESPIRATORY ILLNESSES, AND I WAS WONDERING WHO -- SHOULD THE CITY BEGIN LOOKING AT THAT PARTICULAR ISSUE? BECAUSE I THINK THAT PEOPLE STILL DO NOT UNDERSTAND THE RELATIONSHIP BETWEEN THEM DRIVING A -- YOU KNOW, A GUZZLER, A VEHICLE, FOR 30 OR 40 MILES COMING INTO AUSTIN EVERY DAY AND GOING BACK IN THE AFTERNOON AND THE -- AND THE AIR QUALITY. IT SEEMS TO ME THAT IF WE START TALKING ABOUT THE FULL EFFECT OF THIS BAD AIR, PARTICULARLY THE EFFECT ON CHILDREN WHO CANNOT BREATHE THIS OZONE AS WELL AS ADULTS AND THE EFFECT ON THE LUNG TISSUES, THAT WE COULD GET MORE PEOPLE TO UNDERSTAND WHAT IS HAPPENING IN THIS REGION.

>> ABOUT THREE OR FOUR YEARS AGO A STUDY WAS PUBLISHED BY THE HARVARD SCHOOL OF PUBLIC HEALTH. IT WAS CALLED A 13 CITY STUDY. AND IT TRACKED DAYS OF HIGH OZONE WITH EMERGENCY ROOM VISITS AND HOSPITAL ADMISSIONS AND ABSENTEEISM ON THE JOB, AND FOUND A CLEAR CORRELATION IN EACH OF THOSE CITIES WITH HIGH OZONE LEVELS AND THOSE OTHER FACTORS. AND I WOULD BE WILLING TO BET, NOT THAT I'M A BETTING MAN, BUT THAT IF WE TRACKED SIMILAR DATA IN THIS AREA, THAT WE WOULD SHOW A CORRESPONDING CORRELATION BETWEEN EMERGENCY ROOM VISITS AND HOSPITAL EMISSIONS ON HIGH OZONE DAYS.

>>GARCIA: I THINK, MAYOR, THAT WE OUGHT TO CONSIDER DOING THAT TO OUR HEALTH DEPARTMENT. I THINK IT'S ENORMOUSLY IMPORTANT THAT PEOPLE UNDERSTAND THAT -- AND I THINK THAT STUDY OR OTHER STUDIES THAT WERE DONE BY ECLI POINT TO THE FACT THAT PARTICULARLY IN THE CENTRAL PART OF THE CITY THE -- THE URBAN ISLANDS HAVE THE EFFECT OF CREATING OZONE AND AFFECTING CHILDREN IN THOSE AREAS MORE THAN IN OTHER AREAS. SO I WOULD LIKE FOR US TO CONSIDER LOOKING AT THAT TO MAKE SURE THAT WE UNDERSTAND WHAT IS HAPPENING. IT'S NOT JUST THE HAZY AIR THAT WE LOOK OUT THERE, HAZY ATMOSPHERE, BUT IT IS ACTUALLY AFFECTING THE HEALTH OF THE CHILDREN. AND I WOULD LIKE TO KNOW HOW IT AFFECTS BOTH THE ADULTS AND THE CHILDREN BECAUSE IT SEEMS TO ME THAT MORE AND MORE PEOPLE ARE SAYING THAT MY CHILDREN ARE SUFFERING FROM RESPIRATORY ASTHMA.

>>MAYOR WATSON: YOU RAISE A REAL GOOD POINT BECAUSE A LOT OF PEOPLE ASSUME THAT THE LUNGS OF CHILDREN ARE JUST SMALLER ADULT LUNGS, BUT THE FACT IS THAT THEY ARE DEVELOPING LUNGS. AND WHAT WE SEE WHEN YOU ARE BREATHING IN THOSE CONTAMINANTS IS IT HAS A GREATER IMPACT ON THE LUNGS OF CHILDREN BECAUSE THEY ARE DEVELOPING. AND I DON'T THINK IT'S A COINCIDENCE THAT, YOU KNOW, WE HEAR PEOPLE ALL THE TIME SAYING THINGS LIKE YOU KNOW, TEN YEARS AGO I DIDN'T HAVE ALLERGIES. AND NOW I'VE GOT REAL BAD ALLERGIES. I HAVE REAL DIFFICULTY BREATHING AND I HAVE ASTHMA AND THINGS LIKE THAT. FACT IS YOU PROBABLY WERE AJERNIC TO POLLUTION BACK THEN, WE JUST DIDN'T HAVE THAT KIND OF POLLUTION. SO IT PLAYS A BIG DIFFERENCE AND YOU RAISE A GOOD POINT. WHEN WE TALK -- THE FEDERAL CLEAN AIR ACT AND EVEN THE TEXAS CLEAN AIR ACT AND WE ALL TEND TO FALL INTO THE HABIT OF GETTING REAL TECHNICAL. WE TALK ABOUT NON-ATTAINMENT. WHAT -- AND WE TALK ABOUT THE IMPACT IT WILL HAVE ON TRANSPORTATION DOLLARS OR ON THE ABILITY TO EXPAND BUSINESS AND THINGS LIKE THAT, BUT ONE OF THE INTERESTING THINGS IS WHAT THAT MEANS REALLY IS THAT WE HAVE FAILED TO ATTAIN THE HEALTH STANDARDS THAT ARE SET OUT, AND SO ONE OF THE BIG REASONS YOU WANT TO CLEAN UP THE AIR, ONE OF THE BIG REASONS THAT THE CLEAN AIR FORCE IS BEING SO AGGRESSIVE IN DIFFERENT TYPES OF PROGRAMS AND WILL NEED TO BE MUCH MORE AGGRESSIVE IS BECAUSE IT'S GOING TO IMPACT THE HEALTH AND PARTICULARLY IN A CITY LIKE AUSTIN WHERE WE HAVE LOVED AND CONTINUE TO LOVE BEING OUTSIDE. THAT'S PART OF WHAT DEFINES THIS PLACE SO WELL IS OUR ENJOYMENT OF BEING OUTDOORS. BUT WADE MAKES A GOOD POINT THAT WE HAVEN'T REALLY THOUGHT ABOUT AIR IN THE SAME WAY. WE'VE BEEN A WATER CITY. EVEN UP TO AND INCLUDING DISCUSSIONS ABOUT WHETHER WE OUGHT TO HAVE MORE WATER, NOT EVEN GET INTO ALL THE ISSUES ABOUT CLEAN WATER, AND -- BUT IT'S ALSO NOW TIME FOR US TO DO SOME FOCUSING ON THE AIR TOO.

>>GARCIA: THANK YOU.

>>MAYOR WATSON: COUNCILMEMBER SLUSHER.

>>SLUSHER: I AGREE WITH YOU WE NEED VOLUNTARY ACTIONS ON THE LOCAL LEVEL ARE EXTREMELY IMPORTANT, ALTHOUGH AS OPPOSED TO WHAT WATER -- OPPOSED TO WATER QUALITY, I THINK WATER QUALITY THAT IS SOMETHING THAT IS MORE -- YOU CAN HAVE MORE IMPACT ON IT ON THE LOCAL LEVEL THAN AIR QUALITY. YOU CAN HAVE QUITE A BIT, BUT I THINK UNTIL WE GET CLEANER FUELS, MUCH CLEANER THAN JUST THE GASOLINE THAT WE ARE ABLE TO SAY IT'S A GOOD STEP FORWARD, BUT UNTIL THEN WE'RE NOT GOING TO HAVE THE KIND OF IMPACT WE REALLY NEED TO HAVE H.. THAT WOULD HAVE TO COME FROM THE FEDERAL LEVEL. WHAT I WANTED TO ASK YOU WAS YOU TALKED ABOUT THE KIND OF PENALTIES, SANCTIONS, WHATEVER YOU WANT TO CALL THEM THAT THE FEDERAL GOVERNMENT HAS THE AUTHORITY TO IMPOSE WHEN YOU GO INTO NON-ATTAINMENT, BUT HOW MANY OF THOSE ACTIONS OR SANCTIONS HAVE ACTUALLY BEEN TAKEN? BECAUSE WHAT I'VE READ IS CITIES AROUND THE COUNTRY GO INTO ATTAINMENT, EITHER THE LOCAL OR STATE OFFICIALS SEEK TO GET THAT PUT OFF, GET THOSE ACTIONS PUT OFF AND THE FEDERAL GOVERNMENT OFTEN COMPLIES. COULD YOU HE LUBE RATE ON THAT? -- ELABORATE THAT.

>> GENERALLY AREAS HAVE BEEN GIVEN NUMEROUS CHANCES TO COMPLY. SOME HAVE BEEN MORE RETICENT THAN OTHERS IN THAT REGARD. I THINK E.P.A. IS A LITTLE HESITANT TO REALLY CRACK DOWN ON A CITY AS OPPOSED TO TRYING TO WORK WITH THEM AND FIND SOME WORKABLE SOLUTION, BECAUSE ULTIMATELY WE'RE ALL TRYING TO ACCOMPLISH THE SAME THING, BUT THEY DO HAVE THE AUTHORITY TO WITHHOLD FEDERAL GRANT FUNDS FOR THINGS LIKE PUBLIC WORKS PROJECTS, AND I BELIEVE THAT HAS HAPPENED IN ATLANTA. I THINK -- I THINK WHAT IS REALLY ENCOURAGING TO ME ABOUT AUSTIN IS WE ARE ALREADY PRO ACTIVELY INVOLVED IN TRYING TO DO SOMETHING ABOUT THIS PROBLEM, AND I THINK THE CHALLENGE THAT I SEE FOR THE CLEAN AIR FORCE IS TO BRING THIS REGION TOGETHER IN A UNIFIED FRONT BECAUSE IT'S GOING TO BE A REGIONAL DESIGNATION, IT'S NOT JUST GOING TO BE TRAVIS COUNTY OR THE CITY OF AUSTIN, AND SO AS PART OF THAT IN ADDITION TO BEING HERE WITH YOU TODAY, I'VE SPOKEN TO ROUND ROCK CITY COUNCIL, I'VE BEEN TO COMMISSIONERS COURTS IN ALL THREE OF THE COUNTIES. I'VE BEEN DOING A LOT OF PUBLIC EDUCATION AND OUTREACH WORK WITH THE MEDIA, BUT MY HOPE IS THAT WE CAN POSTURE OURSELVES IN SUCH A WAY THAT THERE WON'T EVEN BE ANY CONSIDERATION FOR PENALTIES FROM THE GOVERNMENT, AND IN FACT WE MAY GET MORE FLEXIBILITY FROM THEM BECAUSE OF THE EFFORT WE'RE SHOWING IN THIS AREA.

>>SLUSHER: OKAY. IS ATLANTA THE ONLY ONE YOU KNOW WHERE FEDERAL FUNDS HAVE BEEN WITHHELD?

>> YES, BUT I'M NOT GOING TO SAY THAT THAT -- THAT I KNOW THAT FOR CERTAIN.

>>SLUSHER: DO YOU KNOW WHAT KIND OF FUNDS WERE WITHHELD THERE?

>> WELL, I KNOW ON THE ISSUE OF TRANSPORTATION CON FORMENT THAT THEIR HIGHWAY PROJECTS WERE FROZEN AND WHAT THAT IS IS WHEN YOU BECOME NON-ATTAINMENT, ANY ROAD PROJECTS THAT YOU HAVE HAVE TO DEMONSTRATE THEY ARE NOT GOING TO BRING ADDED EMISSIONS INTO THE AIRSHED AND IF THEY DO, THOSE EMISSIONS HAVE TO BE OFF SET IN ANOTHER SOURCE. AND THIS IS SOMETHING THAT DALLAS AND HOUSTON ARE FACING RIGHT NOW, WHICH WE WOULD ALSO FACE THREE YEARS FROM NOW. SO THAT'S A VERY REAL THREAT AND IT'S NOT REAL ATHREAT, IT'S JUST THAT DUE TO RECENT LAWSUIT, THEY ARE REQUIRED TO FOLLOW THE LETTER OF THE LAW NOW AND SO IF YOU CAN'T DEMONSTRATE CONFORM TI, THEN YOUR ROAD PROJECTS ARE ESSENTIALLY FROZEN UNTIL YOU CAN DO SO.

>>SLUSHER: OKAY. TELL ME WHAT HAPPENED IN HOUSTON, BECAUSE -- IN RELATION TO THIS. I SAW IN THE PAPER THIS MORNING THAT HOUSTON IS NOW PASSED L.A. AS THE NO. 1 SMOG CITY IN THE U.S. IT SEEMS LIKE WHATEVER EFFORTS THERE HAVE NOT REALLY TAKEN HOLD OR DONE A LOT OF GOOD.

>> WELL, THE PROBLEM THERE IS -- IS SO DIFFERENT FROM OURS, BUT WHAT HOUSTON IS LOOKING AT IS IN NOVEMBER THEY WILL HAVE WHAT IS CALLED A CONFORMITY LAPSE WHERE THEY CAN'T DEMONSTRATE TRANSPORTATION CONFORMITY AT THIS TIME AND THAT'S GOING TO PUT A FREEZE ON ALL THEIR HIGHWAY PROJECTS OTHER THAN THOSE DEEMED FOR PUBLIC SAFETY OR FOR CON DESTRUCTION -- I'M SORRY, FOR MAINTENANCE. PART OF THE PROBLEM THERE AND A BIG PART OF THE PROBLEM THERE ARE THE STATIONARY SOURCES ALONG THE PETROCHEMICAL COAST AND THE FACT THAT THEY HAVE SO MANY GRANDFATHERED FACILITIES WHICH ARE ALLOWED TO POLLUTE ABOVE THE LEVELS THAT -- THAT MOST FACILITIES WOULD HAVE TO CONFORM TO. OUR PROBLEM IS SO MUCH DIFFERENT BECAUSE WE DON'T HAVE THOSE HEAVY INDUSTRIAL POLLUTING POINT SOURCES. OUR PROBLEM IS SO TRANSPORTATION RELATED THAT WE DON'T HAVE THAT OTHER PART OF THE PIE TO DRAW UPON TO MAKE THOSE EMISSIONS REDUCTIONS.

>>SLUSHER: RIGHT. THEIR AIR POLLUTION IS GRANDFATHERED, OTHER WATER POLLUTION IS GRANDFATHERED, YOU MIGHT SAY. OKAY. WELL --

>> I CAN'T COMMENT ON THAT.

>>SLUSHER: THAT'S ALL RIGHT. THAT WAS A STATEMENT NOT A QUESTION. BUT I DO REALLY APPRECIATE YOUR EFFORTS AND I THINK IT DOES NEED TO TAKE PLACE AS MUCH AS POSSIBLE ON A LOCAL LEVEL TO KEEP US FROM GETTING TO THE SITUATION OF HOUSTON OR ATLANTA OR CITIES LIKE THAT AND I KNOW THAT WE ARE GETTING TOO CLOSE FOR MY -- FOR MY TASTE AND I THINK YOU ARE RIGHT, IT'S A REGIONAL PROBLEM. AND I KNOW THE CLEAN AIR FORCE IS ALSO WORKING WITH CAPCO, WHICH IS A 10 COUNTY REASON SO I THINK THAT'S REAL GOOD AND THANKS FOR COMING DOWN.

>> AND I KNOW YOU ARE ON CAPCO'S BOARD SO I WOULD APPRECIATE YOUR SUPPORT ANY TIME I'M UP THERE MAKING A PITCH FOR ONE OF OUR PROGRAMS.

>>SLUSHER: OKAY. NO PROBLEM.

>> THANK YOU. [ONE MOMENT, PLEASE, WHILE CAPTIONERS CHANGE].

>>GARZA:: HOW THAT IMPACTS WHAT ASSUMPTIONS HE USE, WHY WE HAVE A LITTLE BIT OF A DIFFERENT OPINION. RANDY IS GOING TO BE DEALING WITH SOME OF THE ISSUES RELATED TO SOME OF THE QUESTIONS WE HAVE GOTTEN IN TERMS OF THIS CONTRACT AND HOW IT WILL AFFECT OUR YOU'LL. SO LET ME TURN IT OVER TO RANDY TO BE ABLE TO OUTLINE THOSE QUESTIONS AND BE ABLE TO GET INTO SOME OF THE SPECIFIC QUESTIONS.

>> WELL, THANK YOU, MR. CITY MANAGER, MAYOR AND CITY COUNCILMEMBERS, ACTUALLY THAT WAS INTRODUCTION, SO WE WILL GO THROUGH THOSE THREE ITEMS, TALK A LITTLE BIT ABOUT SOME OF THE QUESTIONS THERE'S BEEN ABOUT THE HYDRO RIGHTS, WHAT THAT MEANS IN THE '87 AGREEMENT. BETTIE WILL DISCUSS AGAIN OUR FINANCING OPTIONS, AND THEN I WILL CLOSE UP SPECIFICALLY GOING OVER THE ITEMS THAT'S ON THE AGENDA TODAY OR THIS AFTERNOON AT 2:00 IN TERMS OF WHAT THOSE ITEMS WILL BE. SO WITH THAT, I WOULD LIKE TO ASK JOHN PITS TO COME UP TO GO THROUGH THAT PRESENTATION.

>> GOOD MORNING. I'M JOHN PITTS OF AKIN-GUMP. WE HAVE HEARD A LOT ABOUT THE TERM HYDRO RIGHTS, I WANT TO SPEND A FEW SECOND ABOUT WHAT THAT IS. HYDRO RIGHT IS A WATER RIGHT THAT ALLOWS THE CITY TO HAVE A CALL TO PASS THROUGH OUR DAM WATERS THAT WOULD BE SUFFICIENT TO PROVIDE FOR 3,045 CUBIC FEET A SECOND. THAT TRANSLATES INTO 2,200,000 ACRE FEET A YEAR, WHICH HAS BEEN LIMITED BY THE TNRCC TO BE A,700,000 ACRE FEET A YEAR. THAT AMOUNT OF WATER FLOWS THROUGH THE RIVER ABOUT 8% OF THE YEAR. 1,700,000 ACRE FEET A YEAR. THAT IS WHAT -- IT IS NOT A CON SUMMIT ACTIVE WATER RIGHT, CONSUMPTIVE WATER RIGHT, IT'S A PASS-THROUGH WATER RIGHT. LET ME TAKE A SIDESTEP. UNDER THE 1987 AGREEMENT AND PROVISIONS THAT CONTINUE IN THIS, I THINK IT'S IMPORTANT FOR YOU TO HEAR THAT THIS IS A FIRST AMENDMENT TO THAT 1987 SETTLEMENT AGREEMENT, NOT A NEW CONTRACT. IT'S A FIRST AMENDMENT. THE CONSIDERATION THAT WAS GIVEN UNDER THE 1987 AGREEMENT CONTINUES UNDER THIS FIRST AMENDMENT. AND I WOULD LIKE TO JUST GO THROUGH THAT CONSIDERATION AGAIN THAT'S BEING GIVEN. CONSIDERATION GIVEN BY THE CITY TO THE LCRA. THE CITY AGREED THAT THE LCRA WATER RIGHTS IN THE HIGHLAND LAKES SHOULD BE SET AT 1,500,000 ACRE FEET. THE CITY AGREED THAT IT WOULD PAY TO LCRA ITS WATER RIGHT FOR WATER USED ANNUALLY IN EXCESS OF 150,000 ACRE FEET. WHAT THE CITY RECEIVED: LCRA AGREED THAT WATER USAGE BY THE SNOW MUNICIPAL PURPOSES UP TO 150,000 ACRE FEET COULD BE DIVERTED BY THE CITY WITHOUT COMPENSATION PAID TO THE LCRA. THE LCRA AGREED THAT THE CITY'S MUNICIPAL WATER RIGHTS SHOULD BE SET AT 250,000 ACRE FEET AND THAT THE LCRA AGREED TO FIRM UP AND/OR SUPPLEMENT THE CITY'S INDEPENDENT WATER RIGHTS UP TO THAT 250,000 ACRE FEET. AND THE LCRA AGREED NOT TO CHARGE A RESERVATION FEE. THE LCRA AGREED TO RELEASE STORED WATER FROM THE HIGHLAND LAKES FOR THE CITY'S USE WHEN THE CITY DOES NOT HAVE SUFFICIENT WATER UNDER ITS RUN OF THE RIVER RIGHTS. THE LCRA AGREED TO RELEASE SUFFICIENT WATERS FROM THE HIGHLAND LAKES SO THAT LAKE AUSTIN WOULD BE A CONSTANT LEVEL LAKE, THE LCRA AGREED TO MAKE WATER AVAILABLE WITHOUT CHARGE FOR COOLING AT TOWN LAKE AND AT DECKER LAKE AND LASTLY LCRA AGREED THAT THE CITY'S PRIORITY DATE WITH RESPECT TO LCRA IS NOVEMBER THE 15TH, 1900, AND THAT ALL LCRA PRIORITY DATES EITHER THAT THE LCRA HAD AT THAT TIME OR WOULD ACQUIRE IN THE FUTURE WOULD BE JUNIOR TO THE CITY'S PRIORITY DATE. WE HAVE BEEN ASKED THE QUESTION DID -- DID -- WHAT VALUE WOULD THE SUBORDINATION OF THE SUB NATING THE HYDRO-ELECTRIC WATER RIGHTS WOULD HAVE. THE VALUE TO THE LCRA, VALUE TO THE CITY. I HAVE ASKED OUR ENGINEERS AND HYDROLOGISTS WE'VE HAD EMPLOYED IN THAT MATTER TO SPEAK TO YOU ABOUT THIS THIS MORNING SO I CALL ON RAY SCHULL.

>> THANK YOU, GOOD MORNING. I'M RAY SCHULL WITH ASSOCIATED CONSULTING ENGINEERS. WE WERE ASKED TO WORK WITH THE CITY AND EVALUATE THE HYDROLOGICAL ASPECTS OF THIS ISSUE. DR. MICHAEL SULLIVAN WITH MICHAEL SULLIVAN & ASSOCIATES ALSO ASSISTED US ON THIS. AS MR. PITTS SAID, THE HYDRO-ELECTRIC RIGHT THAT THE CITY HAD PRIOR TO 1987 AGREEMENT WAS FOR 3,045 CFS. AND AS JOHN PITTS ALSO SAID, THAT WAS LIMITED BY THE AGREEMENT OR BY THE TNRCC TO 1.7 MILLION CFS OF ANNUAL MAXIMUM DIVERSION RATE. AND HE ALSO INDICATED THAT TYPICALLY YOU CANNOT DIVERT THAT MUCH WATER BECAUSE IT COMES IN SHORT INTEGRALS AND AS THE WATER GOES PAST, IT'S A PASS-THROUGH RIGHT. YOU CAN'T DIVERT STORED WATER, YOU MUST ONLY UTILIZE FOR THAT HYDRO RIGHT WATER THAT PASSES THROUGH THE INTAKE STRUCTURES OF THE DAM. IN REALITY, BASED UPON THE HYDRO-ELECTRIC DATA THAT WE LOOKED AT, THE AVERAGE FLOW CONDITIONS FOR THE LAST 25 YEARS, THAT EQUATED TO AN ANNUAL DIVERSION PASS THROUGH AMOUNT OF ABOUT 520,000 ACRE FEET. AND IF YOU TAKE THE AVERAGE DROUGHT CONDITIONS, THAT IS LIMITED ONLY TO 270,000 ACRE FEET. AND IF IN THE WORST HERE OF THE DROUGHT OF RECORD, THE PASS-THROUGH AMOUNT WAS ONLY 97,000 ACRE FEET. SO THAT WAS THE AMOUNT THAT WAS AVAILABLE IN THAT YEAR FOR THESE HYDRO-ELECTRIC FLOW DIVERSION RIGHTS. OUR ASSESSMENT WAS ALSO THAT THE SUBORDINATION OF THESE RIGHTS INCREASED THE FIRM YIELD OF THE HIGHLAND LAKES SYSTEM TO LCRA BY 145,000 ACRE FEET PER YEAR. THAT'S THE VALUE THAT THAT SUBORDINATION ESSENTIALLY MEANT TO LCRA. THEY ARE LIMITED TO WHAT THEY CAN GUARANTEE WATER AS A FIRM YIELD OUT OF THE HIGHLAND LAKES TO THE FIRM YIELD OF THOSE LAKES. PRIOR TO SUBORDINATION IT WAS APPROXIMATELY 300,000 ACRE FEET PER YEAR. WITH THAT SUBORDINATION, IT INCREASED THAT TO 145,000 ACRE FEET TO 445,000 ACRE FEET. SO IN OUR OPINION THAT'S PROBABLY THE BEST ESTIMATE OF THE VALUE OF THAT SUBORDINATION. ARE THERE ANY QUESTIONS THAT I CAN ANSWER?

>>GOODMAN: COULD I ASK YOU TO REPEAT THE WORST DROUGHT AND THE NUMBER OF ACRE FEET THAT YOU HAD AS AN AVERAGE THERE.

>>SLUSHER: MAYOR PRO TEM, WE DON'T HAVE A QUORUM. I'M SORRY, WE DO, I APOLOGIZE. I'M SORRY. WE BARELY DO.

>> YES. IN THE WORST DROUGHT YEAR OF RECORD, IN THE LAST 25 YEARS, THE AVAILABLE PASS-THROUGH WATER WAS 97,000 ACRE FEET IN THAT YEAR.

>>GOODMAN: WHAT YEAR WAS THAT?

>> 1954.

>>GOODMAN: THANK YOU.

>>SLUSHER: I HAVE A QUESTION.

>>GOODMAN: COUNCILMEMBER?

>>SLUSHER: SIR, WHEN DID YOU BEGIN LOOKING AT THIS FOR THE CITY?

>> APPROXIMATELY TWO WEEKS AGO.

>>SLUSHER: TWO WEEKS AGO. OKAY. AND THE 145,000, THAT'S THE SAME FIGURE THAT THE LCRA CAME UP WITH. IS THE FIGURE THEY TOLD ME YESTERDAY. IS THERE A SCIENTIFIC WAY THAT WE ENDED UP AT THE EXACT SAME FIGURE?

>> WE LOOKED AT THEIR MODELING RESULTS, WHICH RESULTED IN THAT AMOUNT AND LOOKED AT THE INPUT PARAMETERS AND THE MODELING PROCEDURES THAT WERE RUN AND WE CONCURRED WITH THEIR BASIC ASSUMPTIONS THAT WENT INTO THAT.

>>SLUSHER: THAT'S THE WAY YOU CAME TO IT WAS BY LOOKING AT THEIR FIGURES AND JUDGING IF YOU AGREED WITH THEM OR NOT?

>> THAT'S CORRECT. NOW, OUR OPINION ON THAT IS THAT THE 145,000 IS THE BEST CASE. IT'S PROBABLY SOMEWHERE LESS THAN THAT BECAUSE OF SOME OF THE ASSUMPTIONS THAT THEY MADE. BUT THAT'S IN THE BEST CASE IS WHAT THAT SUBORDINATION RESULTED IN INCREASING THE FIRM YIELD TO THE LAKES.

>>SLUSHER: THANK YOU. I'M CURIOUS WAS TO WHY WE ONLY BEGAN LOOKING AT THIS ABOUT TWO WEEKS AGO IN THAT'S THE CASE.

>> I'M NOT SURE OF THE ONE --.

>>SLUSHER: THAT'S NOT A QUESTION FOR YOU. THE MANAGER CAN FIELD IT OR DELEGATE IT.

>>GARZA: IN TERMS OF THE HYDRO RIGHTS, I BELIEVE THAT IN TERMS OF WHAT ADDITIONAL YIELD IT WAS, IT WAS THE -- IN EFFECT WHEN THE ISSUE WAS RAISED, WE WENT BACK AND DID SOME RESEARCH, WE ASKED -- AS PART OF THAT WORK THAT WE HAVE DONE, THE CONCLUSION THAT WE HAVE DRAWN IS THAT PART OF THE AGREEMENT IN '87 AND CERTAINLY ITS CONTINUATION TO 2050, CONSIDERATION HAS BEEN RECEIVED. IN TERMS OF THE MODELING, IT'S BECAUSE THERE WAS A LAID CLAIM THAT THAT SUBORDINATION MAY HAVE INCREASED THE YIELD TO THE SYSTEM BY AS MUCH AS 500,000 ACRE FEET. IT WAS WHEN THOSE CLAIMS WERE MADE, WHICH WE BELIEVED WERE TOTALLY UNFOUNDED, WITHOUT ANY BASIS IN TERMS OF HOW THE DATA GETS DONE IN THESE MODELS, IS WE DID HIRE THE ENGINEERING FIRM TO COME BACK AND EVALUATE. WE ASKED LCRA AND WHEN WE MODELED THAT OUT IT CAME OUT TO -- LCRA CAME OUT BETWEEN 120 AND 145 AND THE WORK THAT'S DONE BY THE ENGINEERING FIRM REPRESENTED BY THIS GENTLEMAN SHOWS THAT DURING THAT RECORD IT COULD BE AS LOW AS 97.

>>SLUSHER: DID THE CITY UNDERTAKE ANY EFFORT SINCE THE '87 AGREEMENT TO TRY TO FIGURE OUT THE -- THIS NUMBER BEFORE WE HIRED THESE GENTLEMEN HERE?

>>GARZA: RANDY MAY HAVE SOME ADDITIONAL INFORMATION. NOT TO MY KNOWLEDGE.

>> NO. WE HIRED THESE PEOPLE TO ANSWER SOME OF THESE QUESTIONS TO VERIFY SOME OF THE INFORMATION THAT WAS OUT THERE. THE MODEL IS THE MODEL OF THE -- THE MODEL THE LCRA HAS BEEN USED BY THE STATE AND OTHER ENTITIES. WE GOT A COPY OF THAT MODEL HERE DURING THE LAST YEAR DURING NEGOTIATIONS AND HAVE BECOME COMFORTABLE WITH THAT. BUT WE FEEL THAT IT'S IMPORTANT TO HAVE A THIRD PARTY TAKE A LOOK AT THIS AND TO VERIFY THE NUMBERS THAT WE HAVE SEEN IN THE MODEL ITSELF.

>>SLUSHER: HOW LONG DID YOU HAVE THE MODEL, APPROXIMATELY?

>> OH, WE HAVE PROBABLY HAD THIS IN THE LAST SIX MONTHS. LET'S SEE, JOE? YEAH, ABOUT SIX MONTHS, I GUESS.

>>SLUSHER: OKAY. THANK YOU, THAT'S ALL OF MY QUESTIONS FOR NOW.

>>MAYOR WATSON: ANY OTHER QUESTIONS AT THIS POINT? COUNCILMEMBER SPELMAN?

>>SPELMAN: LET ME SEE IF I CAN NAIL THIS DOWN. YOU ARE SAYING THAT THE FIRM YIELD TO THE LCRA, THE INCREASE IN THE FIRM YIELD AVAILABLE TO THE LCRA DUE TO OUR SUBORDINATION OF OUR HYDRO RIGHTS WAS 145,000 ACRE FEET.

>> THAT'S CORRECT.

>>SPELMAN: SOME YEARS THEY CAN SELL MORE, SOME YEARS THEY CAN SELES. BUT IN THE LONG RUN THEY COULDN'T COUNT ON SELLING MORE THAN 145,000 ACRE FEET.

>> THEY CAN'T SELL ANY MORE AS FIRM YIELD THAN THAT. THEY CAN SELL MORE WATER, BUT NOT AS FIRM WATER.

>> AT THE CURRENT RATE OF $105 PER ACRE FOOT, I WORKED THAT OUT AT $15 MILLION IN SMALL CHANGE.

>> THAT'S CORRECT.

>>SPELMAN: DO WE HAVE AN ESTIMATE FOR -- LET ME MAKE SURE I UNDERSTAND ON THE OTHER SIDE. THAT'S THE LCRA'S VALUE, FROM OUR.OF VIEW THE VALUE OF THE HYDRO RIGHTS THEMSELVES ARE EQUAL TO THE AMOUNT OF ELECTRICITY THAT WE CAN GAIN BY PUMPING THE -- BY LETTING THE WATER FALL THROUGH OUR TURBINES, RIGHT?

>> THAT'S LITTLE THE REVENUE THAT WATER WOULD GENERATE.

>>SPELMAN: HOW MUCH WATER COULD WE GENERATE WITH WHAT WAS IT? 520,000 IN AN AVERAGE YEAR, 270,000 IN THE AVERAGE DROUGHT OR 97,000 IN THE WORST POSSIBLE YEAR?

>> PROBABLY THE BEST WAY TO I GUESS GET AROUND THAT IS WHAT REVENUE LCRA HAS BEEN ABLE TO GENERATE OVER THE PAST SEVERAL YEARS AND MY UNDERSTANDING IS THAT ON AN AVERAGE BASIS THEY GENERATE ABOUT 1.4 MILLION PER YEAR.

>>SPELMAN: IS THAT TAKING ADVANTAGE OF THE SAME KIND OF HYDRO RIGHTS AS WE ARE TALKING ABOUT HERE, THOUGH? IS THAT TAKING ADVANTAGE OF 520,000 ACRE FEET?

>> IT'S PROBABLY A DIFFERENT OPERATIONAL SCENARIO BECAUSE THEY CAN TAKE ADVANTAGE OF THE STORED WATER RELEASES, WHEREAS IF THE CITY WAS OPERATING IT SOLELY UNDER THEIR HYDRO RIGHT, IT WOULD BE PASSED ON THE PASS-THROUGH FLOWS IN THE SYSTEM. THAT THEY COULD CALL FROM LCRA WHETHER LCRA WANTED TO RELEASE THOSE OR NOT.

>> PRESUMABLY IF WE COULD CALL ON LCRA TO MAKE MORE RELEASES THAN THEY ARE CURRENTLY DOING, WE WOULD BE ABLE TO MAKE MORE MONEY OUT OF THAT PLANT ATOM MUELLER THAN THE -- AT TOM MILLER THAN THE LCRA IS CURRENTLY MAKING.

>> OR IF RELEASING MORE, YOUR REVENUE WOULD BE LESS.

>>SPELMAN: IS THERE SOMEBODY FROM LCRA WHO COULD ADDRESS THIS ISSUE.

>> YOU CAN START WITH ME AND THEN GET MORE TECHNICAL.

>>SPELMAN: OKAY.

>> WHAT'S THE CORRESPONDENCE, MARK, BETWEEN THOUSANDS OF ACRE FEET GOING OVER THE TURBINES AND DOLLARS OF REVENUE.

>> WELL, I THINK YOU WERE ON THE RIGHT PATH AND I THINK YOU WOULD BE HARD PRESSED TO COME UP WITH A VALUE, AS I SAID THE OTHER DAY WHEN I TALKED ABOUT THIS, MUCH MORE THAN AN ON AVERAGE AMOUNT. KEEPING IN MIND THAT WHEN YOU LOOK AT OUR HYDRO RIGHTS AND OUR GENERATION OF HYDRO AND SOME INTERNAL EQUATIONS, I DON'T KNOW THAT THAT EQUATION EVEN WAS NECESSARILY DONE ON A REAL MARKET VALUE. OUR HYDRO RIGHTS FRANKLY ARE A LITTLE BIT HIGHER THAN SOME OF OUR OTHER WHOLESALE RATES. SO I THINK YOU WOULD BE GOOD TO GET TO THAT, DOING WELL TO GET TO THAT $1.4 MILLION A YEAR ON AVERAGE. I DOUBT VERY SERIOUSLY THAT THE COST BENEFIT ANALYSIS TO PUT IN THOSE HYDRO UNITS WOULD PAN OUT, BUT CLEARLY WE HAVEN'T DONE IT. BUT WITH THOSE KIND OF NUMBERS, IF YOU COULD EVEN GET A PERMIT AND I DON'T THINK THAT YOU COULD GET IT PERMITTED BECAUSE HYDRO RIGHTS ARE NOT --.

>>SPELMAN: SURE. IT'S ALL FICTITIOUS.

>> IF, IF, AND IF, I WOULD BE REAL SURPRISED IF THAT COST BENEFIT ANALYSIS REALLY PANNED OUT FOR THE CAPITAL COSTS THAT YOU WOULD HAVE TO DO TO PUT IN THOSE UNITS TO GENERATE THAT LEVEL. I WOULD BE REAL SURPRISED THIS THAT WORKED OUT.

>>SPELMAN: BUT YOU ARE ALREADY GENERATING SOME ELECTRICITY WITH THE UNITS THAT ARE ALREADY IN PLACE?

>> I WILL GIVE GIVE YOU THE BEST CASE ANALYSIS, OUR UNITS THERE, OUR ABILITY TO USE OUR STORED WATER, GIVING YOU THE BENEFIT OF THAT, WE CAME UP WITH THAT ON AVERAGE NUMBER OF 1.4. YOU ARE GOING TO BE, WE THINK, MUCH LESS THAN THAT, BUT THAT'S YOUR HIGH SIDE. WE ALSO AS HE POINTED OUT, 145,000 ACRE FEET IS THE BEST ESTIMATE OF OUR INCREASE IN YIELD. THERE ARE SOME SCENARIOS IN WHICH EVEN CONSIDERING THE DROUGHT ASSUMPTIONS, OUR YIELD IS LESS THAN 145, BUT IN THE ANALYSIS WE HAVE TAKEN THE HIGH SIDE OF THAT OR THE CONSERVATIVE SIDE OF THAT AS WELL. SO THE MAXIMUM BENEFIT THAT WE COULD -- WE COULD FIND WAS 145,000 INCREASE IN OUR YIELD.

>> WOULD YOU FEEL ANY QUALMS ABOUT ACTUALLY SELLING A FIRM YIELD OF 145,000?

>> WE WILL, WE HAVE UNDER THIS AGREEMENT. WE HAVE GIVEN IT TO YOU FOR FREE, THAT'S YOUR CONSIDERATION FOR 100 YEARS, I AM REAL GLAD YOU ASKED THAT. BECAUSE THOSE TWO FACTS HAVE TO BE MATCHED UP. THAT'S THE CONSIDERATION. THAT'S THE BOTTOM LINE.

>>SPELMAN: I UNDERSTAND YOUR POINT. ABOUT HOW MANY THOUSANDS OF ACRE FEET FLOW THROUGH TOM MILLER NOW ON AN AVERAGE YEAR?

>> PAUL?

>> WELL, SOMEWHERE AROUND A MILLION, TWO MILLION.

>> SOMEWHERE A MILLION TO TWO MILLION ACRE FEET A YEAR I GUESS FLOW THROUGH. PAUL THORNHILL.

>> THE FLOW IS VERY -- IT VARIES DRAMATICALLY FROM A YEAR TO YEAR. A MILLION TO TWO MILLION, UNDER THE HYDRO RIGHT ABOUT 520,000 ACRE FEET OVER A 25 YEAR AVERAGE. HOWEVER THAT'S ONLY UNDER THE HYDRO RIGHTS, THERE ARE OTHER FLOWS THAT COME DOWN THE RIVER THAT CAN BE PASSED THROUGH THOSE UNITS OCCASIONALLY. SO THOSE OBVIOUSLY CONTRIBUTE TO THE GENERATION OF ELECTRICITY, ALSO. IT'S NOT JUST THE CITY'S HYDRO RIGHTS THAT CONTRIBUTE TO THAT.

>>SPELMAN: YOU CAN GENERATE NOT JUST OFF THE CITY'S HYDRO RIGHTS --

>> DON'T LEAVE, FRIEND. IF YOU TAKE ALL OF OUR HYDRO RIGHTS AT ALL OF OUR HYDRO FACILITIES AT ALL OF THE DAMS, THAT'S 239 MEGAWATTS, 240 MEGAWATTS TOTAL.

>>SPELMAN: OKAY.

>> OUR TOTAL INCOME CONSIDERING ALL OF OUR PRAYINGS IN FLOODS AND ALL IS -- OFF OF HYDRO IS WHAT?

>> ABOUT 14 MILLION.

>> ABOUT $14 MILLION FOR THE WHOLE KIT APPEARED KABOODLE. IF YOU WERE TO ASK ME TODAY IF I WOULD PUT IN THE INFRASTRUCTURE TO MAKE THAT INCOME THE ANSWER IS ABSOLUTELY NOT. IN FACT WE HAVE LOOKED REALLY HARD AT EVEN MAINTAINING IT. BUT BECAUSE WE USE IT FOR SOME OTHER THINGS, SUCH AS RESERVE, BLACK SISTER FOR TEXAS, SOME OTHER BENEFITS, WE HAVE MADE -- BLACK STAR FOR TEXAS, SOME OTHER THINGS, WE HAVE MADE ADVANCEMENTS TO MODERNIZE OUR HYDRO, WE HAVE LOOKED AT IT VERY, VERY CAREFULLY. I JUST DON'T KNOW OF ANYONE WHO WOULD REALLY ON AN INVESTMENT BASIS PUT IN A HYDRO FACILITY EXCEPT ON A VERY SMALL SCALE. I MEAN, SO -- THAT'S THE WHOLE KIT AND KABOODLE, MANSFIELD, ALL OF OUR FACILITIES. YOU WOULD BE SOMEWHERE LESS THAN THAT IF YOU TOOK TO DO THE ANALYSIS.

>>SPELMAN: THE TURBINES AT TOM MILLER ARE A RELATIVELY SMALL PROPORTION OF THE TOTAL SYSTEM.

>> I KNOW THE CITY HAS LOOKED AT THAT IN THE PAST BECAUSE I REMEMBER WHEN I WAS IN THE -- WHEN I WAS ON THE COUNCIL, WE DID A STUDY, I AM LOOKING AT YOU BECAUSE IT'S THE ONLY FACE -- SORRY, THE ONLY CONNECT I CAN MAKE -- BUT I REMEMBER AN ANALYSIS BEING DONE ON LOOKING AT LONGHORN DAM AND SOME OTHER PLACES AND THE COST BENEFIT ANALYSIS SIMPLY DIDN'T PAN OUT.

>>SPELMAN: OKAY.

>> SO THERE MAY BE SOMETHING IN THE RECORD GOING BACK. I REMEMBER THAT BEING LOOKED AT WHEN I WAS ON THE COUNCIL RELATIVE TO LONGHORN DAM AND PASS-THROUGHS AND WHY NOT DOING A FEW THINGS. IT DOESN'T PAN OUT. THERE ARE A FEW SMALL HYDRO PROJECTS IN TEXAS, BUT I CAN TELL YOU EVEN WITH THE WATER BEING FREE, THE OPERATIONAL COSTS ARE SO HIGH THE DOWN TIME IS SO HIGH, THEY ARE REALLY STRUGGLING TO MAKE IT AND IN MOST CASES ARE AT A SUBSIDIZED RATE.

>> YOU ARE SAYING THAT 1.4 MILLION THAT YOU ARE ACTUALLY GETTING OUT OF TOM MILLER DAM IS PROBABLY A HIGHER ESTIMATE, MORE THAN WE WOULD BE ABLE TO MAKE OUT OF TOM MILLER DAM WITH OR WITHOUT HYDRO RIGHTS.

>> YES, SIR.

>>SPELMAN: OKAY. THANKS.

>>MAYOR WATSON: COUNCILMEMBER GRIFFITH?

>>GRIFFITH: YES. I NEED A TRANSLATION. IN THE LAST FEW DAYS WE HAVE BEEN TALKING A LOT ABOUT OUR 3,045 CUBIC FEET PER SECOND RIGHTS. CAN YOU TELL ME -- I'M TRYING TO GET A FEEL FOR HOW MUCH THAT IS BECAUSE IT'S A NEW THING FOR MY HEAD. CAN YOU CONVERT THAT TO -- LIKE WHAT'S THE AVERAGE ON A DAILY BASIS THAT -- IN TERMS OF CUBIC FEET PER SECOND, HOW MUCH WATER WOULD GO OVER? HOW BIG IS THAT?

>> ALL RIGHT.

>>GRIFFITH: HOW MUCH?

>> 3,045 CFS, THAT'S A RATE OF WATER

>>GRIFFITH: OKAY. THAT'S A RATE OF WATER.

>> IF YOU WERE OBTAINING THAT RATE 24 HOURS A DAY, 365 DAYS A YEAR, THAT'S --

>>GRIFFITH: HOW MANY ARE GOING OVER IN TERMS OF CUBIC FEET PER SECOND? IN SAY A DAY? HOWEVER YOU WANT TO EXPRESS IT. HOW MANY ARE GOING OVER, SAY, PER SECOND NOW?

>> THAT VARIES SO --

>>GRIFFITH: I AM TRYING TO GET A PERCENTAGE OF HOW MANY PER SECOND ARE GOING OVER THAT WE WOULD HAVE SOME CLAIM ON. YOU KNOW HOW MANY CUBIC FEET --

>> THE --

>>GRIFFITH: PER SECOND GO OVER IT NOW.

>> IT'S MORE OF THE --

>>GRIFFITH: ON ANY GIVEN SECOND.

>> THE CITY'S HYDRO-ELECTRIC RIGHT HA-HA BEEN SUB BORED NATED IS A PASS THROUGH -- SUBORDINATED IS A PASS THROUGH RIGHT, BASED ON THE FLOWS INTO, NOT BASED ON THE FLOWS OUT OF

>>GRIFFITH: DO WE KNOW HOW MANY CUBIC FEET PER SECOND ARE GOING OVER TOM MILLER NOW.

>> THAT VARY SO MUCH --

>>GRIFFITH: THE WHOLE THING.

>> NO. IT'S NOT A WAY WE NORMALLY LOOK AT THAT SITUATION BECAUSE IT'S LOOKED AT ON AN ANNUAL BASIS AND IT'S DETERMINED BY THE AMOUNT OF RAINFALL THAT YOU HAVE THAT YEAR AND BECAUSE THOSE FLOWS DURING RAINFALL EVENTS ARE TREMENDOUS, YOU KNOW, THOUSANDS OF CFS, BUT WHEN IT'S NOT RAINING THERE'S NONE.

>>GARZA: WHAT MAY BE HELPFUL, YESTERDAY WHEN YOU WENT AND DID YOUR CHART, AND YOU JUST WALKED THROUGH, WHAT IN THE IDEAL SENSE THIS WOULD EQUAL TO IN A GROSS AMOUNT AND HOW YOU WOULD BEGIN TO NET THAT OUT AS YOU DO IN THE BUSINESS IN TERMS OF WHAT CAN BE LIKELY BE PRODUCED MIGHT BE HELPFUL FOR THE COUNCILMEMBER TO UNDERSTAND. YOU TALKED EARLIER ABOUT AN -- IT'S AVAILABLE 8% OF THE TIME. OUT OF A 365 DAY YEAR. I THINK THAT WOULD BE HELPFUL FOR PEOPLE TO UNDERSTAND WHAT THAT QUANTITY COULD EVENTUALLY BE.

>> WHILE HE'S DOING THAT, LET ME ADD TWO THINGS. ONE, I THINK IF WE LOOK AT TODAY, WE ARE PASSING THROUGH ABOUT A THOUSAND CUBIC FEET PER SECOND TODAY

>>GRIFFITH: OVER TOM MILLER. THROUGH THE SYSTEM. THE OTHER THING IS A QUICK CORRECTION. TWO THING WE TRY NEVER TO DO, ONE IS USE THE WORDS DAM AND FAILURE IN THE SAME SENTENCE, THE WATER ALWAYS GOES THROUGH THE DAM, NOT OVER IT.

>>GRIFFITH: THROUGH, I'M SORRY, I WILL NEVER DO IT AGAIN.

>> WHEN IT GOES OVER IT WE ARE DEALING WITH ANOTHER PRESS CONFERENCE. [LAUGHTER].

>>GRIFFITH: OKAY. THANK YOU. THAT'S VERY HELPFUL, SO THAT CONVERTS IT TO ACRE FEET A YEAR.

>> THAT'S CORRECT

>>GRIFFITH: GOOD MOVE.

>>GARZA: JUST TALK, THEY WILL GET YOUR VOLUME.

>> AGAIN, IF IT'S WORKING 24 HOURS A DAY, 365 DAYS A YEAR, THAT'S THE VOLUME OF WATER THAT COMES THROUGH THAT YEAR. THE AMOUNT THAT THE CITY COULD ACTUALLY DIVERT LEGALLY IS LIMITED TO 1.7. MILLION ACRE FEET PER YEAR. BUT BECAUSE IT COMES BY IN LARGER QUANTITIES, THAN THE INSTANTANEOUS RATE, IF THERE'S 6,000 CFS COMING BY, UNDER THE CITY'S RIGHT THEY ARE LIMITED TO THAT AMOUNT. SO ON THE AVERAGE BASIS, BASED UPON THE RAINFALL RECORD AND PASS-THROUGH FLOWS OF THE PAST 25 YEARS, THE MOST THAT'S AVAILABLE IS 520,000 ACRE FEET PER YEAR. IF YOU TAKE IN THE AVERAGE DROUGHT CONDITIONS, NOT THE WORST YEAR, BUT AVERAGE DROUGHT CONDITIONS, THAT DROPS TO 270,000. WHEN WE LOOKED AT THE WORST YEAR IN THE DROUGHT, 1954, THE PASS-THROUGH FLOWS THAT WERE AVAILABLE THAT WAS 97,000 ACRE FEET. NOW, THERE WERE MORE FLOWS THAN THAT IN THE RIVER OR IN THE SYSTEM THAT YEAR, BUT AGAIN THAT CAME IN SUCH SHORT INTEGRALS WHEN THEY CAME THEY WERE OVER THIS AMOUNT. INTERVALS. THIS WAS THE MAXIMUM AMOUNT THAT THE CITY COULD HAVE USED FOR GENERATION THAT YEAR.

>>GRIFFITH: THAT'S VERY HELPFUL TO CONVERT THOSE AND RELATE THOSE. THANKS.

>>MAYOR WATSON: ANY OTHER QUESTIONS AT THIS TIME?

>>GARCIA: YES.

>>MAYOR WATSON: COUNCILMEMBER GARCIA.

>>GARCIA: YOU PROBABLY HAVE EXPLAINED THIS BEFORE, BUT MAYBE YOU CAN EXPLAIN IT TO ME AGAIN SO I CAN UNDERSTAND IT. ONE OF THE ISSUES HAS BEEN THAT THE CITY GET FAIR CONSIDERATION WHEN THEY GIVE UP THOSE RIGHTS. WHAT FORMULAS DID YOU ALL USE, WHAT ASSUMPTIONS DID YOU ALL USE TO DETERMINE IF THE RIGHTS THAT THE CITY RECEIVED THE CONSIDERATION RECEIVED WHEN THEY GAVE UP THOSE RIGHTS WAS ADEQUATE?

>> WHAT WE LOOKED AT IS FIRST THE GENERATION CAPABILITY AND THE REVENUE THAT THAT WOULD RESULT IN, IN THE BEST CASE I THINK IT'S EQUIVALENT TO THE 1.4 MILLION PER YEAR. THAT DOESN'T TAKE INTO ACCOUNT THE IMPROVEMENTS THAT WOULD BE NEEDED TO TOM MILLER DAM TO CAPTURE THAT REVENUE, SO THAT NEEDS TO BE IN THAT EQUATION. THEN WE WENT AND LOOKED AT WHAT THE VALUE OF THAT SUBORDINATION REALLY MEANT TO THE HIGHLAND LAKES SYSTEM, WAS IT INCREASED THE FIRM YIELD OF THE ENTIRE SYSTEM. THAT ALLOWED MORE WATER TO BE SOLD ON A FIRM BASIS AND THE AMOUNT OF THAT INCREASE IN THE FIRM YIELD WAS THE 145,000 ACRE FEET PER YEAR THAT WAS THEN AVAILABLE FOR SALE. AGAIN, THAT -- IN OUR EVALUATION, THAT WAS THE BEST CASE, THAT WAS THE OPTIMIZED SITUATION. IT'S PROBABLY SOMEWHAT LESS THAN THE 145,000 ACRE FEET PER YEAR. BUT IT COULD BE AS MUCH AS THAT.

>>THE.

>>GARCIA: WHAT THE CITY GOT IN EXCHANGE WAS THE FREE 150,000 ACRE FEET, CORRECT?

>> THE CITY RECEIVED 150,000 ACRE FEET PER YEAR FREE, THEY RECEIVED A NUMBER OF OTHER CONSIDERATIONS AS A PART OF THAT AGREEMENT, TOO. SO IT WAS ALL BALLED UP IN THE ENTIRE AGREEMENT.

>>GARCIA: OKAY. AND WERE YOU ABLE TO QUANTIFY THOSE VALUES FLOWING EITHER WAY?

>> WELL, THE CITY RECEIVED 150,000 ACRE FEET PER YEAR FREE. THEY RECEIVED ANOTHER 100,000 ACRE FEET PER YEAR --.

>> I UNDERSTAND.

>>GARCIA: I UNDERSTAND THAT. WHAT I AM SAYING IS DID YOU PUT IT ON PAPER SO WE COULD LOOK AT FAIR CONSIDERATION FLOWING BOTH WAYS. I SEE MR. PITTS STANDING BEHIND YOU.

>> WE DIDN'T DO A FINANCIAL EVALUATION OF THAT, NO.

>>GARZA: JOHN?

>>GARCIA: THAT'S BEEN ONE OF THE ISSUES IS DID THE CITY GET A GOOD DEAL, FAIR CONSIDERATION FOR WHAT WE SURRENDERED?

>> I BELIEVE WE DID. I THINK THAT YOU HAVE TO LOOK AT THIS IS AN ENTIRE DEAL, NOT JUST LOOK AT EACH LITTLE PART OF IT, SAY DID WE GET ADEQUATE CONSIDERATION FOR THIS PART, THIS PART. BUT TO LOOK AT THE ENTIRE DEAL. AS I WENT THROUGH EARLIER THE CONSIDERATION GIVEN BY THE CITY TO THE LCRA AND THAT THE CITY RECEIVED FROM THE LCRA AND JUST BRIEFLY I WILL TOUCH ON THAT AGAIN. THE FIRST 150,000 ACRE FEET FREE, THE NEXT 100,000 ACRE FEET ALSO WITHOUT ANY RESERVATION FEE. THE FULL 250,000 ACRE FEET OF WATER WOULD BE FIRMED UP BY THE LCRA AND WE HAVE A CALL ON THAT WHEN OUR RUN OF THE RIVER RIGHTS WOULD NOT BE SUFFICIENT TO PROVIDE THAT AMOUNT OF WATER THAT WE WOULD NEED.

>>GARCIA: ARE YOU SAYING THEN THAT IT WOULD BE DIFFICULT TO QUANTIFY WHAT THOSE RIGHTS MEANT IN TERMS OF SPECIFIC VALUE?

>> WELL, I THINK IT'S IMPORTANT THAT OUR NUMBER -- I BELIEVE IN 1987, WHEN THAT AGREEMENT WAS BEING NEGOTIATED, THERE WAS -- THE NEGOTIATORS DID NOT HAVE AN EXACT NUMBER AS TO WHAT THAT QUANTIFICATION WOULD BE. SO WHAT WE -- IN TALKING TO PEOPLE THAT HAVE -- WERE INVOLVED AT THAT TIME, THEY SAID WELL, WE GUESSED, WE FIGURED THAT IT WOULD BE ABOUT 150,000 ACRE FEET THAT THE CITY WOULD RECEIVE FREE. SO THAT'S 150,000 ACRE FEET AS I JUST WENT THROUGH THE CONSIDERATION GIVEN AT THAT TIME TO THE CITY. WE WOULD BE ABLE TO RECEIVE THAT 150,000 ACRE FEET FREE. THE LCRA WOULD ALSO PROBABLY HAVE SOME KIND OF A RESPONSE TO THAT AS A VALUE THAT THEY FEEL TO THEM.

>> WE WERE ASKED THE QUESTION ABOUT COUNCILMEMBER GRIFFITH --.

>>GARCIA: YOU WERE ON THE COUNCIL AT THAT TIME WEREN'T YOU. I DON'T THINK IT'S HARD TO QUANTIFY AT ALL FROM BOTH PARTIES. 150,000 ACRE FEET FREE WATER TODAY IS WORTH $15 MILLION A YEAR. AT THE TIME WE DID THE DEAL, OUR RATE WAS PROBABLY $68 AN ACRE FOOT, SO 150,000 ACRE FEET TIMES 68 THEN. AND THAT WAS DISCUSSED, THAT WAS TREMENDOUS CONSIDERATION BECAUSE THE ISSUE WAS DO YOU LIVE IN THIS SWING, TO GET WATER NOT FOR DRINKING PURPOSES, BUT ONLY FOR THE PURPOSES OF MAKING ELECTRICITY. THIS IS NOT A CONSUMPTIVE RIGHT, THIS IS FOR ELECTRICITY, WHICH NOBODY WANTS YOU TO DO ANYWAY, INCLUDING THE STATE OF TEXAS, BECAUSE THE SUBORDINATION ISSUE CAME FROM THE TWC. IT CAME FROM THE REGULATORY AGENCY, NOT LCRA AND THE CITY OF AUSTIN, WE HAD TO SUBORDINATE OUR RIGHTS AT THE SAME TIME. THAT IS BECAUSE THEY DIDN'T WANT US CONTINUING TO DEPEND ON WATER FOR ELECTRICITY. AND THEY WANTED ALSO TO TAKE CARE OF THE UPSTREAM INTERESTS AS WELL. BECAUSE AS HAS BEEN POINTED OUT, TO SUBORDINATE LEAVES MORE WATER IN THE RIVER, IT INCREASES THE YIELD. SO THEREFORE THE VALUE TO US FOR THE CITY OF AUSTIN HAVING SUBORDINATED ITS HYDRO RIGHTS IS ZERO. WAS ZERO THEN, IS ZERO TODAY. IF WE WERE IN A FREE MARKET SITUATION AND YOU CAME TO ME AND YOU SAID, "WELL, WHAT'S THE VALUE OF DOING THAT" MY RESPONSE TO YOU IS "I WOULDN'T GIVE YOU REALLY ANYTHING FOR THAT" BECAUSE WHAT IT IS THAT WE DO? WE SELL WATER BY LAW ON A COST OF SERVICE BASIS. WE HAVE LESS WATER YOUR COSTS ARE HIGHER. IF WE HAVE TO GO REPLACE THAT 145,000 ACRE FEET FROM SOMEWHERE ELSE, THE USER PAYS FOR IT. THAT'S JUST FUNDAMENTALLY THE WAY THE SYSTEM WORKS. IT'S THE WAY THIS SYSTEM WORKED BACK THEN, IT'S THE WAY THE SYSTEM WORKS NOW. AND UNLESS WE GO TO A MARKET BASED OR A COMMODITY BASED PRICING OF WATER ON THE RAW LEVEL, WHEN WE ARE NOT AT, THEN WE DIDN'T PUT A PRICE TAG ON THAT IN 1987 FOR YOU, NOR DID WE NECESSARILY PUT A PRICE TAG ON IT FOR US. WE WOULD HAVE HAD 300 SOMETHING,000 ACRE FEET TO MANAGE OR WE HAVE 500,000 ACRE FEET TO MANAGE. THEN WE USE THAT, AS YOU KNOW, IN ACCORDANCE TO THE LAW. THE PRIORITY OF THE LAW. SO WHEN WE HAVE THOSE DISCUSSIONS BACK THEN, THERE WERE SPECIFIC DISCUSSIONS ABOUT CONSIDERATION GIVEN AND IT'S SUBSTANTIAL. THIS WAS VIEWED AT THE TIME AND I WAS THERE, AS YOU SAID, COUNCILMEMBER, THIS WAS VIEWED AT THE TIME, I REMEMBER THE PRESENTATION TO OUR BOARD, I REMEMBER BOARD MEMBERS QUESTIONING WHETHER OR NOT GIVING THIS AMOUNT OF WATER FOR FREE FOR THIS PERIOD OF TIME WAS THAT NOT A HUGE CONSIDERATION ON OUR PART IN 1987. THERE WAS SOME OTHER EXPECTATIONS. THERE IS OTHER CONSIDERATION AS WELL. ALSO A PART OF THIS AGREEMENT IS AN AGREEMENT TO KEEP LAKE AUSTIN AS CONSTANT LEVEL. IT DOESN'T MEAN A BIG FLOOD CAN'T COME SOME DAY AND RISE TO THAT LEFT. IT MEANS WE MAKE UP THE DIFFERENCE AND AUSTIN DOESN'T HAVE TO PAY FOR THAT. THAT'S ABOUT ANOTHER 6,000 OR SO ACRE FEET A YEAR. OBVIOUSLY IF YOU DIDN'T HAVE THAT AND YOU WANTED TO USE HYDRO AT TOM MILLER, THEN YOU ARE GOING TO KEEP LAKE AUSTIN LOOKING MORE LIKE MONTOPOLIS OR YOU ARE GOING TO BUY WATER TO PRODUCE HYDRO AND SO YOU ARE GOING TO PAY 6,000 TIMES 105, YOU GET ALL OF THAT FOR FREE. YOU GET TOWN LAKE HELD CONSTANT LEVEL FOR FREE. THAT IS REAL MONEY, THAT IS VALUE, THAT IS CONSIDERATION. WAS GIVEN IN 1987, WAS DISCUSSED IN 1987, WAS DISCUSSED AT LENGTH DURING OUR NEGOTIATIONS, AND CONTINUES ON NOW FOR THE NEXT 100 YEARS IF YOU WANT IT TO. THAT'S A HUGE VALUE. BUT --.

>>GARCIA: SURE. THE REASON THAT I ASKED THE QUESTION --

>> IT'S THE QUESTION.

>>GARCIA: THAT'S ONE OF THE ISSUES THAT HAS BEEN BROUGHT UP IN THE DISCUSSION.

>> YES, SIR.

>>GARCIA: THAT THE CITY MAY NOT HAVE RECEIVED ADEQUATE VALUE FOR THAT SPECIFIC SURRENDERING OF THE RIGHTS.

>> YES, SIR AND YOU DID IN MY OPINION.

>>SLUSHER: MR. ROSE?

>>SLUSHER: COUNCILMEMBER SLUSHER?

>>SLUSHER: I WANT TO MAKE SURE THAT I UNDERSTAND ONE THING THAT YOU SAID. THE SUBORDINATION BY THE CITY HAD NO -- HAS NO VALUE TO LCRA IN YOUR OPINION?

>> IN THE TERMS THAT YOU ARE DISCUSSING, WHAT WOULD WE GIVE YOU FOR YOU DOING THAT, WE GAVE YOU A LOT. BUT IN TERMS OF WHAT WOULD WE PAY CERTAINLY ABOVE AND BEYOND THAT. THERE ARE OTHER REASONS WE GAVE THAT CONSIDERATION AS WELL OTHER THAN JUST THE HYDRO. I DOUBT VERY SERIOUSLY IF THE ONLY ISSUE ON THE TABLE, IF THE ONLY ISSUE ON THE TABLE IN 1987 HAD BEEN SUBORDINATION OF YOUR HYDRO RIGHTS, NO, SIR, WE WOULD HAVE NOT GIVEN YOU THE VALUE PACKETS THAT YOU GOT IN THE '87 AGREEMENT, NO, SIR.

>>SLUSHER: ARE YOU SAYING BY HAVING THE FIGURE 145,000 ACRE FEET, THAT -- ADDITIONAL THAT'S IN THE LAKES, BECAUSE OF THAT SUB BOARD NATION, -- SUBORDINATION, BECAUSE IT'S NOT FLOWING THROUGH, YOU ARE SAYING THAT HAS NO VALUE?

>> LET ME GO AT IT THIS WAY. YOU WANT TO TAKE IT.

>>GARZA: A COUPLE OF THINGS HAPPENED HERE COUNCILMEMBER SLUSHER. IN '87, THE STATE OF TEXAS -- IN FACT AS A MATTER OF POLICY IN 197 A THE STATE OF TEXAS PASSED A PIECE OF LEGISLATION SUBORDINATING LCRA'S RIGHTS TO UPSTREAM USERS. IN ESSENCE WHAT MARK JUST SAID A MINUTE AGO. IN EFFECT THE STATE SAID WE WANT TO REDUCE RELIANCE ON THAT BECAUSE WATER IS GOING TO BE NEEDED. IN 1987, WHEN WE DID OUR AGREEMENT, THE STATE AS BASICALLY A CLEANUP ITEM SAID THIS IS SOMETHING THAT NEEDS TO HAPPEN. WE NEED TO SUBORDINATE THAT RIGHT. MARK INDICATED A MINUTE AGO, THIS WAS SOMETHING WHEN WE CAME TO THE TABLE, THE STATE BASICALLY IMPOSED IT ON US, SAID THAT NEEDS TO HAPPEN. THERE'S NO QUESTION THAT THE '87 DEAL THAT THE COUNCIL AUTHORIZED AND THE BOARD OF DIRECTORS OF LCRA APPROVED OR BOTH ENTITIES APPROVED WAS A SWEET DEAL FOR THE CITY OF AUSTIN. IT WAS A SEAT DEAL IN A VARIETY OF WAYS. ONE IS WE HAD AN ISSUE OF MULTIPLE PRIORITY DATES. SOME THAT WERE VERY, VERY JR. IN FACT WE WERE ABLE TO SECURE SECURE -- THEY WERE LIKE FOUR. WE WERE ABLE TO SECURE THE MOST SENIOR DATE AS A MATTER OF STATE POLICY. THE CITY OF AUSTIN WOULD BE RIGHT BEHIND GARWOOD BY A MATTER OF 15 DAYS.

>>MAYOR WATSON: IF I COULD INTERRUPT YOU, MADE IT SENIOR IN PERPETUITY TO THE LCRA WHICH WAS A BIG DEAL.

>> I UNDERSTAND YOUR POINT. I THINK WHAT YOU ARE LOOKING AT, IS IT A FACT THAT BY DOING THIS THE FIRM YIELD OF THE RESERVOIR WAS INCREASED? AND, YES, SIR, THAT IS A FACT. WHO OWNS THE WATERS OF THE STATE OF TEXAS? THE STATE OF TEXAS DOES. THAT WAS A STATE-WIDE POLICY DONE FOR ENVIRONMENTAL REASONS, A WHOLE HOST OF OTHER REASONS -- REASONS ACROSS THE BOARD. WHAT I AM TRYING TO SAY TO YOU IF THAT HAD BEEN THE ONLY ISSUE THAT WAS ON THE TABLE, OR WERE THAT TO BE THE ONLY ISSUE ON THE TABLE TODAY, THERE'S NO WAY IN THE WORLD WE WOULD GIVE YOU THE VALUE PACKAGE THAT WAS GIVEN TO YOU IN '87 OR EXTEND IT FOR THE NEXT 100 YEARS, THERE'S NO WAY BECAUSE THE FACT WOULD BE WE ARE MANAGING 300,000, 350,000 ACRE FEET PLUS OR MINUS INSTEAD OF 500. THAT'S THE CONSEQUENCE TO THE REGION. WE HAVE MORE WATER, THAT'S THE BENEFIT TO THE REGION.

>>GARZA: IF I COULD JUST ADD ONE THING. IN TERMS OF THE POLICY, WE WOULD HAVE TO CONVERT THAT RIGHT FROM A PASS-THROUGH TO CONSUMPTIVE RIGHT. THAT'S A WHOLE SERIES OF HURDLES THAT YOU HAVE TO GO THROUGH.

>>SLUSHER: MY QUESTION HAD TO DO WITH THE VALUE OF THE LCRA NOT TO THE CITY OF HAVING THAT FLOW THROUGH.

>>GARZA: DID WE GET YOUR QUESTION ANSWERED.

>>SLUSHER: THAT'S FINE.

>>MAYOR WATSON: I THINK THERE WAS A QUESTION FOR YOU.

>>SPELMAN: THANKS, MAYOR. WE HAVE BEEN TALKING ABOUT 150,000 ACRE FEET FOR FREE AS THOUGH THAT'S THE ONLY WATER WE WOULD BE GETTING. I KNOW WE HAVE SOME RUN OF THE RIVER RIGHTS. I AM WONDERING IF YOU OR ONE OF THE ENGINEERING -- ONE OF THE ENGINEERS AVAILABLE COULD TALK TO US ABOUT WHAT WE COULD EXPECT ON AN AVERAGE YEAR OR A DROUGHT YEAR OUT OF OUR RUN OF THE RIVER RIGHTS.

>> LET ME CALL UPON THEM TO GET THE EXACT NUMBERS, BUT I THINK IT'S BEEN EXPRESSED IN THE PAST THAT TO HAVE RUN OF THE RIVER RIGHTS EVEN THOUGH WE HAVE A GOOD QUANTITY, 270 SOME ODD THOUSAND RUN OF THE RIVER RIGHTS WITHOUT STORAGE, THEY HAVE -- THEY DON'T HAVE A WHOLE LOT OF MEANING TO US, ESPECIALLY IN THE MIDDLE OF THE SUMMER DURING THE DROUGHT. LET ME CALL UPON RAY TO MAYBE GO THROUGH SOME OF THOSE NUMBERS IN THAT WE LIKE IN THIS SUMMER, FOR EXAMPLE, FOR THE LAST COUPLE OF MONTHS, WE WOULD HAVE HAD NO WATER, IF WE ONLY DEPEND UPON FULL RUN OF THE RIVER RIGHTS. SO STORAGE IS VERY IMPORTANT. THAT'S WHY THE '87 DEAL, AS WELL AS THIS DEAL IN TERMS OF HAVING FIRM SUPPLY IS VERY CRITICAL TO THE FUTURE OF AUSTIN. SO, RAY, DO YOU WANT TO --.

>>SLUSHER: BEFORE YOU, COUNCILMEMBER COULD I INTERRUPT. MR. GOSS, COULD YOU DEFINE WHAT YOU MEAN BY NO WATER?

>> IF THERE'S NO WATER COMING INTO THE RESERVOIRS, IF YOU ASSUME THAT YOU TAKE LAKE AUSTIN OR TOWN LAKE AND USE ALL OF THE STORAGE THAT'S IN THERE, THERE'S NO WATER TO TAKE OUT TO PUT INTO YOUR TREATMENT PLANT. I MEAN, IT'S -- IT'S A MATTER OF WHAT'S COMING INTO THE RIVER, IN FLOW. IF THAT'S THE ONLY RIGHT THAT YOU HAVE TO TAKE THAT OUT, IT'S NOT THERE, THERE'S NOTHING TO TREAT. NOW, THERE IS THE WATER THAT'S STORED UP IN THE LAKES, YOU CAN USE THAT IF YOU HAVE A DEAL TO BE ABLE TO USE THAT.

>>SLUSHER: YOU ARE SAYING PEOPLE WOULD TURN ON THE FAUCET AND THERE WOULD BE NO WATER THERE?

>> THAT'S CORRECT. YOU REMEMBER THE PICTURE I HAD ABOUT THE GUY STRADDLING THE RIVER. OUR INTAKE STRUCTURES ALSO ON LAKE AUSTIN AND TOWN LAKE ONLY GO DOWN SO FAR. WE WOULD NOT BE ABLE TO USE THE ENTIRE CAPACITY OF LAKE AUSTIN EVEN, SO THAT WOULD LIMIT US EVEN MORE IN TERMS OF UTILIZING SOME OF THE STORED WATER WE HAVE ARRIVED TO IN TOWN LAKE OR LAKE AUSTIN ASSUMING THAT THE POLICY WOULD BE THAT WE WOULD WANT TO DROP THAT LAKE PRETTY FAR. THAT ASSUMPTION IS SOMETHING THAT WE HAVEN'T CONSIDERED THAT WE WOULD THINK THAT THE POLICY WOULD CERTAINLY WANT TO BE TO CONTINUE TO KEEP TOWN LAKE AND LAKE AUSTIN AT A CONSTANT LEVEL.

>>SLUSHER: HOW MANY DAYS THIS WE'RE WOULD WE HAVE BEEN IN THAT SITUATION IF WE DIDN'T HAVE THE AGREEMENT THAT LASTS THROUGH 2023?

>> YOU WANT TO -- YOU WANT TO GIVE US -- I KNOW THEY HAVE A CHART HERE. TRY TO ADDRESS THAT.

>> YEAH. I WOULD LIKE TO ADDRESS THE NUMBERS THAT ARE INVOLVED AND THEN GET BACK TO YOUR QUESTION ABOUT THE NUMBER OF DAYS.

>>SLUSHER: OKAY. AUSTIN HAS A RUN OF THE RIVER RIGHT OF 271,000 ACRE FEET PER YEAR. APPROXIMATELY, IT'S A LITTLE BIT OVER THAT. AS MR. GOSS INDICATED, THAT'S A RUN OF THE RIVER WATER RIGHTS. YOU CAN ONLY WITHDRAW THAT WATER WHEN OUR INFLOWS TO THE RIVER SYSTEM THAT -- FROM THAT WATER BY YOUR INTAKES. SO SINCE -- WITHOUT STORAGE, WHEN THERE'S NO INFLOW TO THE RIVER SYSTEM, YOU DON'T HAVE THE RIGHT TO WITHDRAW WATER. SO WE LOOKED AT HOW MUCH YIELD THE CITY COULD GET FROM THAT RUN OF THE RIVER RIGHT BY USING LAKE AUSTIN AND TOWN LAKE AS STORAGE AND UNDER THE BEST CASE CONDITIONS, ASSUMING THAT YOU COULD TAKE LAKE AUSTIN AND TOWN LAKE ALMOST COMPLETELY DRY, IN THE FIRM YIELD WHICH IS DURING THE DROUGHT YEAR OF RECORD, THIS 271,000 GOES DOWN TO APPROXIMATELY 90,000 ACRE FEET. DURING THAT YEAR. THAT'S WHAT THIS RUN OF THE RIVER RIGHT WOULD RESULT TO THE CITY OF AUSTIN. NOW, THAT'S TECHNICALLY LIMITED BY THE ELEVATIONS OF THE WATER INTAKES AT THE THREE WATER PLANTS. AND THE OUTFLOW STRUCTURES OF THE TWO DAMS. SO FEASIBLY, WITHOUT SOME CHANGES TO THOSE PIECES OF EQUIPMENT, YOU WILL ONLY GET 73,000 ACRE FEET PER YEAR. WE DIDN'T REALLY THINK IT WAS FEASIBLE TO DROP LAKE AUSTIN AND TOWN LAKE TO THOSE LIMB, THAT'S NOT JUST ONCE A YEAR, THAT'S AS YOU NEED THEM AS THE INFLOWS COME IN, SO WE DID AN ANALYSIS IF YOU ONLY ALLOWED TOWN LAKE AND LAKE AUSTIN TO BE LOWERED FIVE FEET AND THEN RAISE IT BACK UP AS THE INFLOWS INCREASE, THAT WOULD RESULT IN A YIELD OF 44,000 ACRE FEET. SO DURING DROUGHT CONDITIONS THAT'S WHAT YOUR RUN OF THE RIVER WATER RIGHT RESULTS AS FIRM YIELD TO THE CITY OF AUSTIN.

>>SPELMAN: YOU ARE TALKING ABOUT OUTFLOW OF THE DAM AND INTAKE STRUCTURES TO THE WATER. OUR WATER PIPES UNDERNEATH LAKE AUSTIN AND TOWN LAKE. HOW MUCH COULD WE FEASIBLY DROP THOSE -- WHY ARE THEY WHERE THEY ARE? THAT MIGHT BE SOMETHING RANDY CAN ANSWER.

>> I'M SURE THE ELEVATION WAS SELECTED AT THE MOST OPTIMUM OPERATING LEVEL SO YOU HAVE SUFFICIENT COVERAGE FLOODING OF THOSE INTAKES DURING THE EXPECTED ELEVATIONS OF THE LAKE, THEY ARE PROBABLY ABOUT AS DEEP AS THEY CAN GO, I WOULD ASSUME THERE WOULD BE NO REASON TO BUILD THEM ANY DEEPER THAN YOU COULD.

>> IF I COULD ADD TO THAT, THERE'S A COUPLE OF ISSUES THERE. ONE IS THE QUANTITY OF THE WATER THAT WOULD BE SUCKED THROUGH THERE OR PUMPED THROUGH THERE, YOU WANT TO BE ABLE TO HAVE A GOOD HEAD ON THE BACK OF THAT TO BE ABLE TO PUSH THAT THROUGH THERE. THE QUALITY OF THE WATER IS ANOTHER ISSUE. AND WE HAVE THAT CONCERN EVEN NOW WHEN WE LOWER THE LAKE FIVE FEET TO HAVE THE DOCKS IN THE -- IN THE DUCK WEED AND SO FORTH WORKED ON IN THAT IT CONCENTRATES ANY KIND OF A SEDIMENT OR TURBIDTY IN THE WATER AND THAT'S DIFFICULT TO TREAT. WE WOULD HAVE CONCERNS ABOUT USING THE LAKE, USING THE FULL CAPACITY OF IT JUST FROM THOSE TWO ASPECTS.

>>SPELMAN: 9 ON,000 ACRE FEET IS THE MOST THAT YOU COULD PUT IN THE LAKES AND PULL OUT. BUT WE COULDN'T PULL OUT THE KIND OF CLEAN WATER THAT WE ARE PUTTING OUT,000 IF WE DROPPED THOSE INTAKE STRUCTURES SO THE POINT WHERE WE COULD ACTUALLY GET THAT 90,000 ACRE FEET.

>> THAT'S CORRECT. WE WOULD RUN INTO QUALITY PROBLEMS, NOT JUST QUANTITY PROBLEMS THAT WE ARE TALKING ABOUT. GREG LEWIS WORKING WITH THE HYDROLOGIST, TOO, I WOULD LIKE FOR HIM TO EXPLAIN A LITTLE BIT ABOUT WHY -- I THINK TO GET TO COUNCILMEMBER SLUSHER'S QUESTIONS, WHY SOMETIMES DURING THE YEAR, EVEN THOUGH, WE WOULD NOT HAVE WATER AVAILABLE IF WE JUST HAD RUN OF THE RIVER RIGHTS.

>> THERE'S TWO ISSUES ASSOCIATED WITH RUN OF THE RIVER WATER RIGHTS. ONE IS THE ACTUAL FLOW IN THE STREAM, THE OTHER IS THE SENIORITY. THERE ARE SUBSTANTIAL WATER RIGHTS DOWNSTREAM OF AUSTIN THAT HAVE PRIORITY OVER OUR -- LCRA HAS GRANTED US A PRIORITY IN OUR ASSOCIATION WITH THEM, THE CITY'S ASSOCIATION WITH THE LCRA OF NOVEMBER 15TH 1900. BUT IN THE EYES OF THE TEXAS WATER COMMISSION, AND THE TNRCC EXCUSE ME, OUR PRIORITY DATE IS 1914. THERE ARE SENIOR RIGHTS DOWNSTREAM THAT HAVE FIRST CALL ON THAT WATER, SO EVEN IN THE DRY TEAMS TIMES OF THE YEAR, DURING THE CRITICAL DROUGHTS OR DURING THE DROUGHT OF RECORD, WHEN THERE WAS FLOW IN SOME INSTANCES AUSTIN WOULD NOT HAVE BEEN ABLE TO DIVERT BECAUSE THE SENIOR RIGHTS WOULD HAVE HAD TO HAVE BEEN HONORED FIRST. WHEN WE ARE ABLE TO GET WATER WITH RUN OF THE RIVER, IT IS TYPICALLY IN THE NON-SUMMER MONTHS WHEN THE DEMANDS ARE HIGHER FOR IRRIGATION USES AND OTHER WATER USES IN THE STREAM. ALSO THE STREAM FLOWS ARE TYPICALLY HIGHER IN THE NON-SUMMER MONTHS, AND SO WHEN WE ARE ABLE TO MEET OUR DEMANDS WITH RUN OF THE RIVER, IT IS USUALLY IN THE OCTOBER THROUGH APRIL PERIOD. TYPICALLY WHEN WE CAN MEET OUR DEMANDS. THE OTHER PARTS OF THE YEAR WE NEED TO RELY ON STORAGE. WITHOUT LAKE AUSTIN AND TOWN LAKE, WE HAVE TO RELY ON LCRA FOR STORAGE THROUGH AGREEMENT BECAUSE OUR WATER RIGHTS DO NOT HAVE A STORAGE COMPONENT OTHER THAN LAKE AUSTIN. IF YOU ARE WILLING TO FLUCTUATE THE ELEVATIONS OF LAKE AUSTIN AND TOWN LAKE, THEN WE CAN DIVERT A FIRM YIELD DURING THE DROUGHT PERIOD OF AROUND 90,000 ACRE FEET UNDER BEST CONDITIONS, PROBABLY CLOSER TOS SOMEWHERE AROUND 70,000 ACRE FEET. OUR DEMANDS RIGHT NOW ARE ALMOST 150,000 ACRE FEET A YEAR, WE WOULD HAVE A SERIOUS SHORTFALL IF ANOTHER DROUGHT OF RECORD WERE TO OCCUR RIGHT NOW. IF WE WERE ENTERING A DROUGHT OF RECORD AT THIS POINT, A COUPLE OF YEARS DOWN THE ROAD WE WOULD BE IN SERIOUS SHAPE IF WE DIDN'T HAVE THE LCRA AGREEMENT BACKING UP THE -- THE 150,000 ACRE FEET PLUS THE ADDITIONAL 150,000 ACRE FEET FEET OF STORAGE THAT THEY WOULD HAVE FOR FUTURE DEMANDS.

>>MAYOR WATSON: ANY OTHER QUESTIONS? COUNCILMEMBER GRIFFITH?

>>GRIFFITH: YES. MR. ROSE, I HAVE A QUICK COMMENT FOR YOU BY WAY OF TRYING TO EXPLAIN WHY, I'M SURE IT'S WITH BORING REGULARITY, THAT THE QUESTION OF HOW MANY DOLLARS ARE THE HYDRO RIGHTS WORTH THAT HAPPENED IN '87. I THINK THE REASON THAT KEEPS COMING UP IS THAT THERE'S SOME FOLKS WHO WERE -- WHO CLAIM TO HAVE BEEN AROUND AND INVOLVED IN '87, WHO SAY, NO, THOSE WEREN'T CONSIDERED. THERE ARE OTHERS LIKE YOURSELF WHO WERE DEEPLY INVOLVED WHO SAID THEY WERE. AND THE THEME OF IT DOESN'T REALLY MATTER HOW MANY DOLLARS THEY ARE WORTH BECAUSE IT'S USED UP ANYWAY IS A PROBLEM IF YOU ARE NOT POSITIVE BECAUSE IT WASN'T ON TAPE AS TO WHETHER OR NOT THERE WERE OR WERE NOT USED AND IF SO TO WHAT EXTENT. SO I JUST WANTED TO SAY THAT'S WHY THAT KEEPS COMING UP.

>> WELL, I FULLY UNDERSTAND THAT. AND APPRECIATE IT. AND WE HAVE EVERYONE HERE TODAY ON LCRA'S SIDE, WHETHER THEY WERE OUTSIDE COUNSEL OR WERE EMPLOYEES WHO WERE HERE IN '87. I THINK THE SEQUENCE OF HOW THIS HAPPENED DOES LEND ITSELF TO SOME DISCUSSIONS, TO THE DISCUSSIONS THAT HAVE BEEN HAD. BUT THEY ALSO PROVIDE THE ANSWER. BECAUSE IT IS TRUE. WE PRETTY WELL HAD GRORBTED A BIG PART OF THE DEAL -- NEGOTIATED A BIG PART OF THE DEAL. WE GET TO THE TWC. THE TWC ON BEHALF OF THE STATE RAISES THIS ISSUE FOR BOTH OF US, IT WAS IMPOSED ON US. IT WAS DONE BECAUSE THE TWC SAYS THIS IS FOR THE BENEFIT OF TEXAS. BECAUSE ON A REGIONAL BASIS IT INCREASES THE YIELD. IT'S LIKE MAKING MORE WATER. OKAY? SO THEY DIDN'T SAY DO YOU THINK YOU OUGHT TO DO THIS. THEY DIDN'T SAY YOU GUYS GO OFF IN A ROOM AND SEE IF THIS IS FAIR. THEY SAID DO IT. AND WE LOOKED AT IT AT THE TIME AND WITH ALL DUE RESPECT TO ANYONE ELSE WHO WAS REPRESENTING ANYONE ELSE, I DO KNOW THE LCRA PERSPECTIVE AND WE LOOKED AT IT AND DID THE QUICK CALCULATIONS AND CAME TO THE CONCLUSION THAT MORE THAN AMPLE CONSIDERATION ALREADY EXISTED IN THE AGREEMENT FOR THE ENTIRE AGREEMENT, INCLUDING THIS PROVISION. WE STILL FEEL THAT WAY TO SEE. SO I UNDERSTAND WHY WE ARE HAVING THE CONVERSATIONS. BUT I THINK THE ANSWERS ARE STILL KIND OF THE SAME IN TERMS OF WHAT HAPPENED.

>>GRIFFITH: THANK YOU.

>>MAYOR WATSON: MR. GOSS?

>> MAYOR AND COUNCILMEMBERS, THE NEXT ITEM WE WANTED TO DISCUSS WAS TO GO OVER THE FINANCING OPTIONS THAT WE PRESENTED IN THE PAST. BETTIE DUNKERLY HAS BEEN WORKING VERY HARD ON THIS IN TRYING TO COME UP WITH A PLAN AS WE INDICATED LAST WEEK IS DIFFERENT THAN THE INITIAL PROPOSAL, WHICH WAS TO USE THE LCRA FINANCING METHOD AND I WOULD LIKE FOR THEORY EXPLAIN A LITTLE BIT ABOUT THAT FINANCING AS WELL AS WHAT THE VALUE OF THIS MEANS TO US.

>> THANK YOU, RANDY, I AM BETTIE DUNKERLY THE CITY'S CHIEF FINANCIAL OFFICER. AND I HOPE IN A SOME OF THE THINGS THAT I SAY, ALTHOUGH PROBABLY NOT VERY TECHNICAL IN NATURE, WILL AT LEAST LEAD TO A LITTLE BETTER UNDERSTANDING. BECAUSE THIS HAS BEEN A VERY COMPLEX AND COMPLICATED TRANSACTION WITH LONG -- WITH A LONG NEGOTIATION PERIOD. I THINK THAT LAST WEEK WE HEARD SOME ALTERNATE PROPOSALS TO THE WATER AND WASTEWATER PROPOSAL AND THEIR STAFF HAVE REALLY GONE TO GREAT EXTENT TO PROVIDE YOU A DETAILED ANALYSIS OF THE PROS AND CONS OF THOSE PRESENTATIONS. I HAVE REVIEWED THAT TECHNICAL ANALYSIS AND I THINK THAT IT'S -- THAT IT'S A VERY GOOD JOB. TY I THINK ALL OF YOU WOULD ENJOY READING THAT RESPONSE. HOWEVER, I AM GOING TO SPEAK ON A MORE NON-TECHNICAL LEVEL. AND I WANTED TO DISCUSS PROBABLY THREE OR FOUR THINGS WITH YOU. THIS CONCEPT OF THE -- OR THE IDEA OF THE DISCOUNT, SOME OF THE ASSUMPTIONS THAT WE HAVE USED IN OUR ANALYSIS AND THEN FINALLY THE -- THE TYPES OF FINANCING THAT WE ARE GOING TO RECOMMEND TO MAKE THIS THE LOWEST COST OPTION FOR THE RATEPAYERS IN THIS COMMUNITY. YOU SHOULD HAVE TWO HANDOUTS PLACE AROUND YOUR PLACE THAT THE -- AT THE DIAS. ONE SHOWS A CHART THAT IS CALLED THE PROPOSED LCRA WATER AGREEMENT CONTRACT VALUES. IT'S A ONE PAGE LIKE THIS. AND THE OTHER IS A TWO PAGER THAT SHOWS THE STAFF RECOMMENDATIONS AND SOME OF THE ALTERNATE PROPOSALS WE HAVE LOOKED AT WHERE I HAVE SUMMARIZED THE BASIC ASSUMPTIONS ON THE COST SIDE AND ON THE DEMAND SIDE. SO THAT PERHAPS WE CAN GET A LITTLE MORE CLEARLY IN OUR MIND EXACTLY WHAT WE ARE TALKING ABOUT. I THINK THAT WE MADE A REALLY BASIC MISTAKE WHEN WE STARTED PRESENTING THIS TRANSACTION TO YOU. BECAUSE WE FOCUSED ON SIMPLY THE PREPAYMENT OF THE RESERVATION FEE FOR 50 YEARS, THESE TOP TWO ITEMS ON THIS SHEET, THE PREPAYMENT OF THE RESERVATION FEE AND THE PREPAYMENT OF THE WATER. AND FROM THE BEGINNING, WE HAVE SAID THAT THOSE TWO VALUES ARE ABOUT 107 MILLION AND ABOUT 40 MILLION OR ABOUT 148 MILLION DOLLARS. WHAT WE NEVER PRESENTED TO YOU AND THAT'S PART OF WHAT WE HAVE DISCUSSED THIS MORNING IS THE VALUE OF THE REST OF THE THINGS THAT ARE INCLUDED IN THIS AGREEMENT. NOW, IN FACT SOME OF THEM I WASN'T AWARE OF UNTIL I HEARD THEM TALK ABOUT IT THIS MORNING. SO IN THE SECOND GROUP OF THINGS, WE HAVE TAKEN THE CURRENT CONTRACT AND ASSUMED, YOU KNOW, WHAT WOULD BE THE VALUE OF THIS IF EVERYTHING DISAPPEARED AND WE HAD TO GO OUT AND BUY THIS STUFF, WHAT WOULD BE THE VALUE OF EXTENTING THE CURRENT CONTRACT. NOT ONLY THE FIRST 50 YEARS, BUT THE NEXT 50 YEARS. IF YOU WILL GO OVER THOSE ITEMS, ITEM NO. 3 WOULD BE THE EXTENSION OF FREE WATER USE FOR THE 150,000 ACRE FEET FOR 50 YEARS, THAT'S ABOUT 53 MILLION DOLLARS. ITEM 4, THE EXTENSION OF THAT FREE WATER USE FOR THE NEXT 50 YEARS. THAT'S ABOUT 51 MILLION DOLLARS. THE EXTENSION OF THE NO RESERVATION COSTS FOR THE 100,000 ACRE FEET, WE HAVE NOW, THAT'S ABOUT 85 MILLION DOLLARS. AND THEN FINALLY, TREATMENT PLANT NUMBER 4, NOW THE FOLKS THAT PUT THIS TOGETHER WERE SORT OF AN OPTIMISTIC, SAID, WELL, IF WE HAD TO BUILD THAT RIGHT NOW, THAT WOULD BE ABOUT $280 MILLION. WELL, EVEN IF WE DIDN'T BUILD IT, WE COULD GET THAT ISSUE RESOLVED, PROBABLY WE WOULDN'T GET IT RESOLVED WITHOUT SOME LITIGATION COSTS. SO WHATEVER NUMBER YOU WANT TO PLUG IN THERE FROM ZERO TO 280 MILLION STILL REPRESENTS A VALUE. IF YOU WILL COME DOWN AT THE VERY BOTTOM OF THE PAGE, THERE'S SOME THINGS THAT I DIDN'T KNOW HOW TO BEGIN TO PUT A VALUE ON. AND ONE OF THOSE IS THE BANK -- THE WATER BANK. THE REVENUES THAT WE COULD GENERATE OFF OF THAT. ANOTHER WOULD BE THE AIKT OF THE UTILITY -- THE ABILITY OF THE UTILITY TO REDUCE THE AMOUNT OF WATER THAT WE NEEDED IF OUR ASSUMPTIONS ARE OFF. SO WHAT KIND OF VALUE DO WE PUT TO THAT OPPORTUNITY? AND THEN LASTLY I HEARD A FEW MINUTES AGO THAT THERE IS A VALUE TO KEEPING OUR LAKES CONSTANT. SO ALL OF THOSE VALUES TOGETHER, AND CHANGING THE PARTICULAR VALUE YOU WANT TO PUT ON ANY GIVEN ONE, IT REALLY WILL AMOUNT TO SOMETHING BETWEEN 350 MILLION AND 600 MILLION OF VALUE THAT YOU ARE GETTING FOR A PRICE OF 100 MILLION DOLLARS. SO WHETHER WE TALK ABOUT A DISCOUNT ON ANY ONE OF THESE ITEMS, I THINK IF YOU LOOK AT THE TRANSACTION AS A WHOLE, THAT YOUR COMMON SENSE WILL TELL YOU THAT THERE IS VALUE HERE OVER AND ABOVE WHAT WE ARE ACTUALLY PAYING IN DOLLAR AMOUNTS. I THINK LAST WEEK, TOO, THE STAFF AND I AS WE SAT THROUGH AND LISTENED TO OUR ANALYSIS BEING DISCUSSED, WE WERE MAYBE A LITTLE BIT OFFENDED AT TIMES WHEN THEY KEPT CALLING OUR ASSUMPTIONS BETS AND THEIR ASSUMPTIONS ASSUMPTIONS. BUT NEVERTHELESS I WANTED TO MAKE SURE THAT -- THAT YOU UNDERSTAND THAT ALL OF THESE ASSUMPTIONS ARE BETS. AND ONCE I SORT OF THOUGHT ABOUT THAT, I THOUGHT MY GOODNESS, WE COME TO YOU EVERY WEEK WITH ASSUMPTIONS, ALMOST EVERY RECOMMENDATION WE MAKE TO YOU, WHETHER IT'S ON A PROCUREMENT, ON A BUDGET OR WHATEVER, ON A BOND DEAL, BASED -- IT'S BASED ON ASSUMPTIONS. IF I GIVE YOU SOME EXAMPLES. LAST MONTH YOU APPROVED OUR 2.1 MILLION CAPITAL AND OPERATING BUDGET. IN THAT BUDGET WE HAD A PROJECTION OF WHAT SALES TAX REVENUE WAS GOING TO DO NEXT YEAR. WE ARE PREDICTING OR WE ARE GUESSING OR WE ARE BETTING THAT IT'S GOING TO GO UP 9.5% ABOVE WHAT IT IS THIS YEAR. THAT DOLLAR AMOUNT IS $117 MILLION. MORE THAN THIS ENTIRE TRANSACTION. NOW, WE DIDN'T JUST GUESS AT THIS. WE HAD BEHIND THE SCENES A VERY GOOD ANALYSIS DONE OF WHAT THE POPULATION TRENDS ARE DOING, WHAT SALARIES AND WAGES ARE DOING, WHAT JOB GROWTH IS DOING AND WHAT CONSUMER CONFIDENCE MIGHT BE IN THE NEXT FEW YEARS. SO WHEN WE COME TO YOU WITH THESE ASSUMPTIONS AND THESE GUESSES, WE DON'T DO SO LIGHTLY. WE DO IT BASED ON A LOT OF GOOD ANALYTICAL WORK, I MIGHT HAVE TO SAY SOME COMMON SENSE. WE STAND HERE DAY AFTER DAY. FOR EXAMPLE, OUR INTEREST REVENUES PROJECTIONS IN THAT SAME BUDGET HAD TO BE BASED ON AN ASSUMPTION OF WHAT INTEREST RATES ARE GOING TO DO OVER THE NEXT YEAR. THAT'S FOOLISH TO PROBABLY DO FROM DAY TO DAY, MUCH LESS A YEAR OR FIVE YEARS OR 50 YEAR. IT'S ALSO BASED ON PROPER SWREXS -- PROJECTIONS OF HOW MUCH CASHER WE GO GOOD TO HAVE TO INVEST ON ANY SINGLE DAY. THOSE TWO ASSUMPTIONS AND PROJECTIONS COMBINED LET US MAKE TO YOU A VERY PROFESSIONAL RECOMMENDATION OF WHAT WE THINK INTEREST RATES ARE GOING TO DO. WE DO THE SAME THING WITH ELECTRIC REVENUE. WE LOOK AT WHAT CONSERVATION IS GOING TO DO, WHAT THE FUEL PRICE IS GOING TO DO, WHAT POPULATION, WHAT USAGE, ALL, MANY FACTORS. THAT PARTICULAR NUMBER IS SOME 730 MILLION DOLLARS EVERY YEAR. WE GO ONE STEP FURTHER. WE ASK YOU TO NOT ONLY ACCEPT THESE ASSUMPTIONS, BUT WE ASK YOU TO GO AHEAD AND APPROPRIATE AND AUTHORIZE THE EXPENDITURE OF THOSE MONIES. AND WE HAVE TO HOPE AND WE HAVE TO BET THAT THAT MONEY IS GOING TO BE THERE WHEN WE ARE READY TO SPEND IT. WHEN WE DO OUR CAPITAL PROGRAM, WE LOOK OUT FIVE YEARS AND MAKE ALL KINDS OF PROJECTIONS THERE. WHEN HE WITH DO A BOND REFUNDING -- WHEN WE DO A BOND REFUNNING, WE ONLY GET ONE SHOT. IF INTEREST RATES DROP WE HAVE TO BE VERY CAREFUL TO PICK OUR TIME WHEN WE WANT TO DO THAT LE FUNDING TO CAPTURE SOME SAVINGS. EVERY TIME WE BRING ONE TO YOU, WE ARE BETTING THAT INTEREST RATE IS NOT GOING TO DROP NEXT WEEK OR MONTH OR YEAR TO SUCH A LARGE EXTENT THAT THIS WOULD HAVE BEEN A BAD DEAL FOR YOU. SO I AM REALLY VERY COMFORTABLE BRINGING YOU ASSUMPTIONS AND PROJECTIONS BECAUSE THAT'S WHAT MY JOB AND MY WORK IS BASED ON. AND -- BUT I DO THINK THAT YOU KNOW WHEN I COME TO YOU THEY ARE USUALLY CONSERVATIVE, USUALLY BASED ON A LOT OF GOOD, HARD, TECHNICAL DATA AND ANALYSIS. I THINK THE OTHER THING THAT WE DID LAST WEEK, I GOT REALLY CONFUSED AND THE DIFFERENT ASSUMPTIONS THAT OUR STAFF WERE MAKING AND THE OTHER FOLKS WERE MAKING ABOUT PRICING AND ABOUT DEMAND. SO LET'S LOOK AT THIS LITTLE SHEET, THE FIRST SHEET, THE FIRST PAGE DEALS WITH THE PRICING. AND LET'S LOOK AT WHAT I THINK THE TWO PROPOSALS REALLY ARE. [ONE MOMENT PLEASE FOR CHANGE IN CAPTIONERS]

>> WE'VE MADE AN ASSUMPTION THAT WE WANT TO PRE PAY THE RESERVATION FEE FOR 50 YEARS AND RAW WATER USAGE UP TO 201,000 SQUARE FEET. THE ALTERNATE PROPOSAL WAS THAT THERE WOULD BE NO PREPAYMENT OF WATER USAGE OTHER RESERVATION FEE. WHAT THIS DOES, IF WE GET THIS PREPAYMENT, WE STABILIZE THOSE RATES. WE MITIGATE THE RISK OF RATES RISING. ON THE ALTERNATE PROPOSAL, THOSE RATES ARE GOING TO RISE AND FALL, THEY ARE GOING TO FLOAT WITH WHATEVER THE MARKET IS. OUR PROPOSAL GUARANTEED A WATER SUPPLY OF UP TO 325,000 ACRE FEET. THE ALTERNATE PROPOSAL INCREASES THE RISK THAT THAT WATER WILL NOT BE AVAILABLE FOR OUR CITIZENS WHEN WE NEED IT. THE ANNUAL RESERVATION FEE GUANANTEES THAT WATER FOR ONLY ONE YEAR AT A TIME. I THINK THAT IS A BIG RISK TO TAKE. WE HAVE A DISCOUNT FACTORED INTO OUR ANALYSIS, NOW, WHETHER OR NOT YOU USE THIS TOTAL VALUE, WHICH IS WHAT I LIKE TO USE, VERSUS THE DISCOUNT OFF OF THESE INDIVIDUAL ELEMENTS, THERE IS STILL A DISCOUNT THERE AND THAT DOES NOT OCCUR IN THIS ALTERNATE PROPOSAL BECAUSE WE'RE PAYING WHATEVER THE MARKET RATES ARE. ON THE SECOND PAGE, WE'VE ESTIMATED OUR DEMAND AT ABOUT 325,000 ACRE FEET BY THE YEAR 2050. AND APPARENTLY FROM WHAT I READ IT LOOKED LIKE THE ALTERNATE PROPOSAL PROBABLY AGREED WITH THAT SAME DEMAND. HOWEVER, IT IS IN THE RISK FACTORS ASSOCIATED WITH MAKING A MISTAKE IN THAT DEMAND. FOR EXAMPLE, THE RISK WE HAVE IF WE UNDERSTATE THE DEMAND IS THAT -- AND WE REALLY ARE GOING TO BE USING MORE, THEN WE RUN THE RISK OF HAVING TO START PAYING SOONER AND MORE ON THE WATER DEAL THAN THE ALTERNATE PROPOSAL WOULD. BUT YOU KNOW THAT'S ALL RIGHT BECAUSE WE HAVE THE ABILITY TO MITIGATE THAT RISK BY THE RATE APPEAL PROCESS, WHICH WE'VE NOW GOTTEN INTO THE PROPOSAL. ON THE SECOND -- THE SECOND WAY WE CAN BE WRONG IS WHAT HAPPENS IF WE'VE OVERSTATED THE DEMAND? WHAT HAPPENS IF WE'VE ACQUIRED MORE THAN WE'RE GOING TO NEED? WELL, THAT IN EFFECT IS BENEFICIAL BECAUSE EACH YEAR THAT WE CAN POSTPONE USING THAT ADDITIONAL WATER, THE CITY IS GOING TO GET A BENEFIT EQUIVALENT TO ABOUT 11 AND A HALF MILLION DOLLARS BECAUSE THAT'S WHAT WE'LL HAVE TO PAY APPROXIMATELY FOR WATER WHEN WE GO OVER THAT MAGIC MARK. SO I THINK FOR ALL OF THESE REASONS THAT YOU ARE GOING TO SEE THAT FOR EVERY ASSUMPTION THAT WE MADE WHERE THERE IS A SIGNIFICANT RISK, WE'VE TRIED TO BACK DOUBT THAT WITH SOMETHING TO MITIGATE THAT RISK, SO I REALLY THINK THAT THIS IS A GOOD CONSERVATIVE ANALYSIS AND I THINK IT'S A SAFE WAY TO CONSIDER THE TRANSACTION. AS FAR AS THE FINANCING IS CONCERNED, FROM THE VERY BEGINNING I'VE LOOKED AT LITERALLY DOZENS OF DIFFERENT WAYS TO FINANCE THIS TRANSACTION. AND I'VE COME DOWN TO THE ONE THAT I THINK GETS YOU THE MOST WATER AT THE LEAST PRICE WITH THE LEAST IMPACT ON YOUR RATEPAYERS. AND THAT OPTION IS TO USE COMMERCIAL PAPER FOR APPROXIMATELY TWO YEARS AND THEN ROLL THAT INTO A SUBORDINATE LIEN BOND FOR THE NEXT 40 YEARS. THAT TRANSACTION WILL DO TWO THINGS. WE'LL HAVE 42 YEAR FINANCING PERIOD WHICH HELPS TO ANSWER THE INTERGENERATIONAL ARGUMENT OF THE ALTERNATE PROPOSAL. OVERALL THE CUMULATIVE TEN YEAR EFFECT ON OUR RATEPAYER WILL BE 1.5%. THAT IS I THINK THE LOWEST PRICE, THE LOWEST IMPACT ON THE RATEPAYERS THAT WE HAVE IN ANY OF THE OPTIONS THAT ARE AVAILABLE TO US. SO IN CLOSING, I WOULD LIKE TO RECOMMEND THIS TRANSACTION TO YOU. AGAIN, IT'S -- I THINK IT GIVES YOU THE MOST WATER AT THE LEAST PRICE WITH THE LOWEST IMPACT ON YOUR RATEPAYERS. I BELIEVE ANYTHING ELSE YOU DO IS GOING TO HAVE A GREATER IMPACT ON YOUR RATEPAYER. SO I THINK THAT WE HAVE ADEQUATELY COVERED THE UPSIDE RISKS AND THE DOWNSIDE RISKS AND I WANT TO RECOMMEND THAT YOU APPROVE -- CONSIDER APPROVING THIS TODAY.

>>MAYOR WATSON: QUESTIONS? COUNCILMEMBER SPELMAN.

>>SPELMAN: BETTY, I WANT TO TALK ABOUT YOUR CONTRACT VALUES JUST FOR A MINUTE.

>> OKAY.

>>SPELMAN: I'VE BEEN ACCUSED OF SAYING THAT THINGS ARE TOO GOOD -- LOOK TOO GOOD TO BE TRUE WHEN IN FACT THEY REALLY ARE TRUE. I WANT TO BE SURE I KNOW WHAT IS TRUE AND WHAT MIGHT BE A LITTLE STRETCH.

>> COULD I ASK -- COULD I LIKE MARK ROSE ASK MY TECHNICAL PERSON AND ENGINEERS TO STAND UP HERE WITH ME?

>>SPELMAN: SURE.

>> PAVEZ?

>>SPELMAN: LET ME START WITH THE BOTTOM AND WORK MY WAY UP. TOTAL CONTRACT COSTS OF $100 MILLION. WHAT IS THE NET PRESENT VALUE OF THE FINANCING SCHEME WE'RE TALKING ABOUT, THE TWO YEARS OF COMMERCIAL PAPER AND FOUR YEARS OF SUBORDINATE LOOERN BOND, WHAT'S THE COST OF THAT TO US -- OF THAT ASSEMBLING OF FINANCING?

>> THE PRESENT VALUE DISCOUNTED USING 6% DISCOUNT RATE OF THE FINANCING OPTION THAT WE ARE RECOMMENDING IS $190 MILLION.

>>SPELMAN: OKAY. 190 MILLION. SO ONE WAY OF PUTTING THAT IS THE COST TO TAXPAYERS, OBVIOUSLY WE'RE NOT PAYING 190 MILLION, NOW WE'RE PAYING IT IN DRIBS AND DRABS. THE EQUIVALENT COSTS FOR TAXPAYERS TODAY IS $190 MILLION.

>> THAT'S CORRECT.

>>SPELMAN: HOW DOES THAT SQUARE WITH 100 MILLION THAT'S ON THAT TOTAL CONTRACT COST? WHY IS THIS BOTTOM NO. 100 AND NOT 190?

>> THAT'S THE PRICE OF THE CONTRACT. THAT'S THE AGREEMENT. NOW, THE $190 MILLION PRESENT VALUE IS THE TOTAL COST, TOTAL CASH OUTLAY, THE PRESENT VALUE OF THE TOTAL CASH OUTLAY OVER THE 50 YEAR CONTRACT PERIOD. THAT INCLUDES THE PRINCIPAL AMOUNT YOU, THE FINANCING COSTS AND THE RAW WATER COST OVER THE 50 YEAR PERIOD.

>>SPELMAN: COSTS OF RAW WATER COSTS.

>> THAT WOULD BE SORT OF LIKE LOOKING AT YOUR HOUSE MORTGAGE AND GETTING THE PRINCIPAL AND INTEREST PAYMENTS OVER THE LIFE OF THAT MORTGAGE.

>>SPELMAN: THE PRICE MAY ACTUALLY BE -- THE PRITION IS $100 MILLION, BUT IT'S GOING TO COST $190 MILLION TO BUY THAT $100 MILLION HOUSE. OKAY. BOY, I WISH I COULD AFFORD ONE OF THOSE. [LAUGHTER]. LET ME WORK MY WAY UPWARDS HERE.

>> [INAUDIBLE].

>>SPELMAN: GOOD POINT. NO. 6, THAT'S THE CONTRACT ISSUES ABOUT BUILDING A WATER TREATMENT PLANT.

>> THAT'S RIGHT.

>>SPELMAN: I APPRECIATE YOUR INVITATION FOR US TO DISCOUNT THAT CONSIDERABLY.

>> WE'VE HAD -- I'VE HAD ONE OF THE COUNCILMEMBERS SAY I HAVE THAT TOO LOW. THAT IF I HAVE TO GO TO LITIGATION I SHOULD DOUBLE IT. [LAUGHTER].

>>SPELMAN: WOULD WE HAVE TO BUILD TWO IF WE GO TO LITIGATION?

>> I UNDERSTAND THAT COULD BE FROM ZERO TO 280. BUT I THINK THERE IS SOME VALUE THERE. I JUST DON'T KNOW HOW TO DO IT.

>>SPELMAN: I AGREE. THERE'S VALUE IN AVOIDING LITIGATION. SO 280 IS PROBABLY -- IS CERTAINLY THE UPPER END OF THAT RANGE. THAT WOULD PRESUME WE ACTUALLY HAD TO BUY THE THING IN ITS ENTIRETY AND I SUSPECT IF WE EVER CAME DOWN TO IT, WHICH I HOPE WE NEVER DO, WE WOULDN'T ACTUALLY HAVE TO DO THAT. OKAY. NOW, THE NEXT THREE, 3, 4 AND 5, THIS IS WHERE I GET THE HEART OF MY CONCERN I THINK. STARTING WITH 3, EXTENSION OF FREE WATER SERVICE FOR 150,000 ACRE FEET FOR THE 50 YEAR PERIOD THROUGH 2050. BY THE '87 CONTRACT, WE'RE ACTUALLY GETTING THAT UP TO 2022 ANYWAY, AM I RIGHT? SO THIS IS THE NET PRESENT VALUE OF THAT BENEFIT FILTH FROM 2023 OUT TO 2050.

>> IF YOU WERE TO ASSUME THAT THE RUN OF THE RIVER RIGHTS WOULD GIVE US ONLY APPROXIMATELY 100,000 ACRE FEET.

>>SPELMAN: OKAY.

>> FROM YEAR 2023 AND BEYOND BY FIRMING UP 150,000 ACRE FEET WE HAVE GAINED 50,000 ACRE FEET.

>>SPELMAN: OKAY.

>> THE FIRMING OF THAT ADDITIONAL INCREMENTAL 50,000 ACRE FEET OR OVER THE 50 YEAR PERIOD IS THE $54 MILLION IN PRESENT VALUE TERMS.

>>SPELMAN: THAT'S WHERE I WAS GOING. WHAT I WAS HOPING YOU HAD DONE, AND YOU'VE OBVIOUSLY DONE THAT, IS NOT CALCULATE THE TOTAL 150,000 BECAUSE WE WOULD HAVE GOT INA SUBSTANTIAL PORTION THAT HAVE ANYWAY. WE HAVE THAT AS A MATTER OF RIGHT. WHAT YOU HAVE DONE IS CALCULATE THE BENEFIT TO THE CITY OF HAVING THAT ADDITIONAL INCREMENT OF FREE WATER ABOVE OUR RUN OF THE RIVER RIGHTS. THAT'S THE 50,000.

>> THAT'S EXACTLY RIGHT.

>>SPELMAN: SAME IS TRUE WITH ITEM 4, THAT'S THE ADDITIONAL INCREMENT OVER RUN OF THE RIVER.

>> FOR IF NEXT 50 YEARS.

>>SPELMAN: FOR THE NEXT 50 YEARS.

>> RIGHT.

>>SPELMAN: AND SAME THING FOR NO RESERVATIONS FOR 100,000 ACRE FEET. WELL, WE'VE ALREADY TAKEN RUN OF THE RIVER RIGHTS OUT OF THE EQUATION SO THIS IS JUST NET PRESENT VALUE OF WHAT IT COULD COST TO RESERVE THAT 100,000 TO 250 FROM FROM THE YEAR 2023 TO 2051.

>>SPELMAN: OKAY. BY THE SAME TOKEN OF NO. 4 WHERE WE HAVE AN OPTION TO EXTEND THROUGH -- WELL, I GUESS THE PRESUMPTION HERE IS BY 2050 WE'RE USING ALL THAT, WE DON'T HAVE TO PAY A RESERVATION FEE.

>> THAT'S CORRECT.

>>SPELMAN: OKAY. MY CONCERN HERE AND YOU'VE ALREADY ADDRESSED ONE OF MY MAJOR CONCERNS. I HAVE ANOTHER MAJOR CONCERN AND THAT IS IT COULD BE ARGUED AND SOME PEOPLE HAVE ARGUED TO US THAT 3, 4 AND 5, THE BENEFIT OF THIS CONTRACT EXTENSION OUGHT REALLY TO BE ZERO BECAUSE THESE ARE THINGS WHICH SHOULD BE AVAILABLE TO US FOR THE FORESEEABLE FUTURE BECAUSE WE SUBORDINATED OUR HYDRO RIGHTS BACK IN 1987. AND SO THE QUID PRO QUO FOR THAT IS NOT JUST UP UNTIL 2022 BEING ABLE TO GET THE 100,000 ACRE FEET WITHOUT RESERVATION FEE, THE 150,000 FOR FREE, IT'S BE ABLE TO GET THAT FOR THE FORESEEABLE FUTURE PERHAPS UP TO 2100 OR BEYOND. HAVE YOU TAKEN THAT INTO ACCOUNT OR IS THAT SOMETHING THAT YOU'VE BEEN TALKING ABOUT?

>> NO, I HAVE NOT CONSIDERED THAT.

>> WELL, LET ME TELL YOU HOW I CONSIDERED IT. WHEN I WAS TRYING TO GET JUST THE GROSS PRICE OF COST HERE, BECAUSE I THOUGHT IF WE COULD ADD THIS ALL UP, ALL OF THE COMPONENTS THAT I COULD FIND, ALTHOUGH THERE WERE ALLOTTED THAT I DIDN'T, AND THEN LOOK AT WHAT WE WERE PAYING, THAT YOU COULD ALMOST BACK INTO AT LEAST A PORTION OF WHAT THOSE HYDRO RIGHTS MIGHT HAVE BEEN. SO WHEN I LOOK AT THIS DIFFERENCE HERE, I SEE THAT THE DIFFERENCE OF WHAT CASH WE'RE GOING TO PAY AND THE CONSIDERATION THAT WE'VE GIVEN IN THAT '87 CONTRACT CONTINUING.

>>SPELMAN: I THINK THE ARGUMENT IS THAT IF YOU LOOK AT THE CONTRACT, THERE IS A CLAUSE IN THAT CONTRACT, I THINK IT'S THE PHRASE "TO BE GIVEN" WHICH COULD BE ARGUED MEANS THAT NOT ONLY WILL WE GET THE 150 ACRE FEET -- THOUSAND ACRE FEET FOR FREE NOW, BUT WE'RE GOING TO CONTINUE TO GET THAT EVEN AFTER THAT CONTRACT EXPIRES WHEN WE RENEW THE CONTRACT OR SET UP A NEW CONTRACT IN 2023.

>> AND WE WERE JUST TRYING TO PUT A VALUE AS TO WHAT THAT BENEFIT WOULD BE.

>>SPELMAN: OKAY. BECAUSE OBVIOUSLY THAT IS A LEGAL QUESTION THAT WE COULD LITIGATE IF --

>> I THINK MR. GARCIA ASKED IF WE HAD DONE THIS EARLIER, NOW WHAT IS THE VALUE OF THAT CONSIDERATION THAT'S BEEN GIVEN. SO THAT'S PART OF WHAT THIS IS TRYING TO DO TO SHOW YOU IN A DOLLAR AMOUNT WHAT THAT VALUE MIGHT POSSIBLY BE.

>>SPELMAN: AND I GUESS WHAT I'M SAYING IS THAT THAT -- THAT IS VALUE WHICH EITHER THROUGH THIS AGREEMENT -- WELL, THAT'S VALUE WHICH THE CITY NEEDS. AND EITHER WE GET IT THROUGH THIS AGREEMENT BECAUSE WE'RE NOT ENTITLED TO IT BECAUSE WE'VE SUBORDINATED OUR HYDRO RIGHTS OR WE'VE ALREADY GOT IT BECAUSE WE SUB ODD NATD OUR HYDRO RIGHTS. I APPRECIATE YOU PUTTING A FIGURE ON THIS.

>>MAYOR WATSON: I MIGHT ADD IS THAT THERE IS A STIG CAN'T ARGUMENT CAN BE MADE FROM A -- SIGNIFICANT ARGUE CAN BE MADE THE VERY FACT THAT PARAGRAPH IS IN THERE INDICATES IT IT'S NOT THERE FOREVER. THAT IN FACT EACH TIME WE WANT IN A DISCUSSION ABOUT WATER AND THAT KIND OF THING IT WOULD HAVE TO BE DISCUSSED AGAIN SO THERE IS A VALUE TO BE PLACED ON IT.

>>SPELMAN: OKAY. THANK YOU.

>>MAYOR WATSON: OTHER QUESTIONS OF MS. DUNKERLEY AT THIS TIME? DID I SAY MR. PITTS DO YOU AGREE WITH WHAT I JUST SAID ABOUT --

>> I'M SORRY. I DIDN'T HEAR WHAT YOU SAID.

>>MAYOR WATSON: THAT WOULDN'T BE THE FIRST TIME. [LAUGHTER]. THAT'S. I WILL JUST SAY IT, I WAS RIGHT.

>> I WILL AGREE WITH YOU.

>>MAYOR WATSON: MR. GOSS?

>> YEAH, LET ME EXPLAIN THE LAST ITEM I WANTED TO GO OVER WITH YOU AND THAT IS AT 2:00, THE TIME CERTAIN, THERE ARE FOUR ITEMS ON YOUR AGENDA THAT RELATE TO THIS ISSUE. LET ME JUST BRIEFLY GO OVER THAT. ITEM NO. 66 IS TO APPROVE NEGOTIATION AND EXECUTION OF THE AGREEMENT AS YOU HAVE BEFORE YOU. AND THERE ARE THREE OTHER ITEMS. THE ONE ITEM -- ACTUALLY ITEM 69 IS TO AMEND THE OPERATING AND CAPITAL BUDGET FOR THE WATER AND WASTEWATER UTILITY AND THIS WOULD BE FOR THE FUNDING OF THE PROPOSAL, THE $100 MILLION, 27.3 MILLION OF THAT THROUGH EQUITY FINANCING, 72.7 THROUGH THE SALE OF BONDS AS BETTY WAS TALKING ABOUT. THERE ARE A COUPLE OF STEPS IN THERE THAT WE WOULD AMEND OUR OPERATING BUDGET AND ALSO AMEND OUR CAPITAL BUDGET. BASICALLY WE WOULD BE USING APPROXIMATELY $12 MILLION FROM THE OPERATING BUDGET ENDING BALANCE AND $15.3 MILLION FROM THE C.I.P. TO COME UP WITH THE $23.7 MILLION IN EQUITY FINANCING. ON OR ABOUT TWO ITEMS, ONE WOULD BE THE NORMAL ITEM FROM THE REQUIREMENT FROM THE TREASURY DEPARTMENT THAT ASKS THAT WE MAKE SURE WE DECLARE OFFICIAL INTENT TO REIMBURSE. THIS WOULD BE INTENT TO REIMBURSE THE $88 MILLION. THIS INCLUDES THE 72.7 PLUS 15.3 MILLION DOLLARS OF CASH BEING BORROWED. AND THE LAST ITEM IS TO AMEND OUR FINANCIAL POLICIES THAT WOULD ALLOW THIS TYPE OF FINANCING TO BE DONE. IT'S REALLY FOUR ISSUES THERE. ONE IS TO ISSUE THE DEBT FOR THE PURCHASE OF WATER SUPPLY WHICH IS A NEW POLICY FOR THE COUNCIL. TO ISSUE THE DEBT WITH COUNCIL AUTHORIZATION. AND THIS DEBT CAN BE UP TO 40 YEARS WHICH IS DIFFERENT FROM THE 30 YEAR POLICIES WE NOW HAVE. AND ALSO THAT THE DEBT COVERAGE WOULD BE TARGETED AT 1.1 TIMES FOR THIS TYPE OF DEBT AS OPPOSED TO THE ONE AND A HALF TIMES. SO THOSE ARE THE FOUR ITEMS, ITEMS 66, 67, 68 AND 69 THAT WOULD GO AS A PACKAGE WITH THE APPROVAL OF THIS PROPOSAL. I JUST WANTED TO MAKE SURE YOU KNEW THAT WAS ON THE AGENDA.

>>MAYOR WATSON: ANY OTHER PARTS OF YOUR PRESENTATION.

>>GARZA: MAYOR, I DON'T KNOW WHETHER THIS IS THE APPROPRIATE TIME, BUT IF THERE ARE ANY QUESTIONS ON THE AGENDA ITEMS.

>>MAYOR WATSON: WE'VE SET IT FOR A TIME CERTAIN, BUT LET ME JUST ASK IF COUNCIL HAS ANY MORE QUESTIONS AT THIS TIME WITH REGARD TO THIS BRIEFING.

>>SLUSHER: MAYOR, I ACTUALLY MAY HAVE SOME MORE AT THAT TIME, BUT I WANTED TO ASK THE CITY ATTORNEY A QUESTION. HERE HE COMES. THE -- I THINK -- I THINK MS. DUNKERLEY AS USUAL AS DONE SOME REALLY GOOD WORK HERE AND THE BOND FINANCING SAVES THE RATEPAYERS CONSIDERABLE MONEY OVER THE ORIGINAL PLAN FOR THE LCRA TO FINANCE, BUT ALSO OUR CITY CHARTER CALLS FOR THEIR TO BE AN ELECTION ON REVENUE BONDS. AND I WOULD LIKE FOR YOU TO SPEAK TO THAT, MR. CITY ATTORNEY.

>> WELL, THIS ISSUE HAS COME UP BEFORE AND IT HAS IN FACT BEEN THE SUBJECT OF LITIGATION. I WAS OFF THE DAIS TRYING TO GET COPIES OF THE CASES THAT DISCUSSED THIS. BUT BASICALLY STATE LAW PERMITS THE ISSUANCE OF REVENUE BONDS, SETS OUT A PROCEDURE UNDER WHICH IS AG CAN APPROVE THE REVENUE BONDS AND IT DOES NOT INCLUDE ANY REQUIREMENT FOR A LOCAL ELECTION. AUSTIN APPARENTLY IS ONE OF THE FEW CITIES IN THE STATE THAT HAS A CHARTER PROVISION.

>>SLUSHER: BUT OUR CHARTER DOES REQUIRE, WE DON'T UNDER STATE LAW THE CITY CAN ISSUE REVENUE BONDS WITHOUT VOTER APPROVAL, BUT UNDER THE CITY CHARTER, THE CITY CANNOT.

>> YES. AND THE REASON I WAS TRYING TO GET A COPY OF THOSE CASES IS TO SEE -- I KNOW THAT THE REVENUE BONDS IN THE PAST REVENUE BONDS THAT WERE ISSUED WITHOUT VOTER APPROVAL HAVE BEEN THE SUBJECT OF A CHALLENGE AND THE COURT DECISION WAS THAT THOSE BONDS WERE NOT INVALID FOR FAILURE TO HAVE VOTER APPROVAL, BECAUSE THEY DID COMPLY WITH THE STATE REQUIREMENT. SO IN THAT SENSE THE STATE LAW, AS IS THE GENERAL CASE, EVERY HOME RULE CITY OPERATES UNDER ITS CHARTER, BUT THE CHARTER CANNOT CONFLICT WITH THE GENERAL LAWS OF THE STATE OF TEXAS OR FEDERAL OR STATE CONSTITUTIONAL PROVISION. SO IN THIS INSTANCE THAT'S WHY I THINK GETTING A COPY OF THE DECISION IS IMPORTANT TO HELP ANSWER YOUR QUESTION. THE END RESULT OF THAT DECISION WAS THAT THE REVENUE BONDS THAT HAD BEEN ISSUED WITHOUT VOTER RAY PROOFL WERE VALID AND NOT SUBJECT TO A CHALLENGE. SO YOU HAVE THE LEGAL AUTHORITY AND YOU HAVE THE POWER TO ISSUE THESE REVENUE BONDS WITHOUT SENDING IT TO THE VOTERS.

>>SLUSHER: OKAY. ARE WE PROHIBITED FROM SENDING IT TO THE VOTERS BY STATE LAW?

>> THAT'S PART OF THE QUESTION I'M TRYING TO GET AN ANSWER TO.

>>SLUSHER: OKAY. AND THE -- WHAT WAS THE CASE THAT THAT WAS DECIDED ON?

>> AND I'M -- I'VE JUST SPOKEN WITH THE ASSISTANT CITY ATTORNEY WHO DOES KNOW THAT, BUT --.

>>SLUSHER: WE CAN TALK MORE BL THAT THIS AFTERNOON. I APPRECIATE IT.

>>GARZA: IF I COULD ADD TO THAT, BETTY MAY WANT TO ADD AS WELL, THE COUNCIL IN 1994 ADOPTED A SERIES OF FINANCIAL POLICIES, AND EVEN BEFORE THEN, AND I WASN'T -- I WAS NOT THE CITY MANAGER AT THE TIME YOU ADOPTED YOUR COMMERCIAL PAPER PROGRAM, BUT THAT PROGRAM IN ESSENCE WAS AN ATTEMPT TO RECOGNIZE THAT THERE WOULD BE A BETTER WAY OF FINANCING SOME OF OUR VERY BASIC CITY SERVICES WITH RESPECT TO UTILITIES BECAUSE IT WOULD BE CHEAPER FOR THE RATEPAYER AND THE TAXPAYER IN THE LONG RUN. AND THE COUNCIL WHEN THEY CONSIDERED THAT PROGRAM AND CONSIDERED THE AMENDMENTS IN '94 UNDERSTOOD THAT THAT WAS A PREFERABLE WAY TO GO BECAUSE IN THE END IN TERMS OF HOW IT IMPACTS OUR RATES AND HOW IT IMPACTS OUR WAY OF DOING BUSINESS WAS A BETTER WAY OF OPERATING THE CITY. AND IN FACT THAT -- WE RECOGNIZED THAT WITH RESPECT TO CAPITAL IMPROVEMENTS, THE CAPITAL I WANT PROOMENTS IN TERMS OF THE WATER UTILITY -- IMPROVEMENTS IN TERMS OF THE WATER UTILITY, THOSE HAVE GONE TO THE VOTERS FOR -- WE DID THE ULLRICH SYSTEM AND THERE WERE SEVERAL APPROVED IN THIS LAST YEAR'S ELECTION, IN NOVEMBER'S ELECTION. IN ESSENCE THIS IS A DEAL OR THIS PACKAGE IS TO SECURE A SUPPLY OF A COMMODITY OF WATER AND I WOULD SAY THAT IS UNDER -- IT IS A DISTINCTION OF WHAT WE'VE DONE IN TERMS OF TRADITIONAL CAPITAL PROGRAMS. AND THE METHOD OF FINANCING THAT BETTY HAS RECOMMENDED IS ONE THAT IS IN FACT WOULD BE LESS EXPENSIVE FOR THE RATEPAYER AND IT WAS IN ESSENCE BECAUSE OF THE ISSUES THAT WERE RAIDS BY THE CONSUMER ADVOCATE AND THE TIME WE'VE HAD TO DEAL WITH THIS ISSUE, AND SO THAT OUR RECOMMENDATION IS IS THAT WE PROCEED WITH THIS THE WAY WE'VE LAID IT OUT. BUT I THINK THAT THE COUNCIL, WE'VE SET THOSE -- THERE HAVE BEEN SEVERAL THINGS THAT WI DO OVER THE COURSE OF THE LAST FIVE YEARS WHERE WE'VE NOT ALWAYS THROUGH THE COMMERCIAL PAPER PROGRAM DONE FINANCING THAT HAVE GONE FIRST TO THE VOTERS FOR AUTHORIZATION.

>>SLUSHER: AND I'M AWARE OF THAT. FOR EXAMPLE I VOTED FOR THE ONE TEXAS PURCHASE WHERE WE HAD THE -- WE USED THE REVENUES THAT WE WOULD HAVE BEEN USING ON RENTAL OFFICE.

>> YES, SIR.

>>SLUSHER: BUT WHILE YOU ARE LOOKING AT THE OPINIONS, WHAT IS THE LARGEST EXPENDITURE THAT'S BEEN UNDERTAKEN THAT WAY OF REVENUE BONDS WITHOUT VOTER APPROVAL, BECAUSE I THINK THE -- AND I THIS THE CASE ON WHICH THAT WAS DECIDED WAS THE 605 MILLION FOR THE SOUTH TEXAS NUCLEAR PROJECT IN 1984. I BELIEVE IT WAS. MAYBE 8 '83. HE REMEMBERS THAT ONE.

>> BETTY MIGHT HAVE THAT INFORMATION.

>>SLUSHER: BUT YEAH, I WOULD LIKE TO SEE, BECAUSE THIS IS A FAIRLY LARGE AMOUNT. AND ALSO THERE HAD BEEN A VOTE THAT THE COUNCIL RECONSIDERED ABOUT ISSUING WATER AND WASTEWATER BONDS WITHOUT VOTER APPROVAL NOT TOO LONG AGO.

>>GARZA: DO YOU WANT TO ADD SOMETHING?

>> I WANTED TO ANSWER PART OF MR. SLUSHER'S QUESTION ABOUT WHAT WE'VE DONE. YOU ARE RIGHT, THE ONE TEXAS CENTER AT ABOUT 18 OR 19 MILLION WAS NON-VOTER APPROVED DEBT. EACH SEBT YOU ISSUE CONTRACTUAL OBLIGATIONS FOR EQUIPMENT AND YOU SOMETIMES ISSUE CERTIFICATES OF OBLIGATION WHICH DO NOT REQUIRE VOTER APPROVAL. AND THAT IS A ROUTINE MATTER. IN ADDITION TO THAT ON AN ANNUAL BASIS WE ROLL OUT INTO REFUNDING BONDS, REFUNDING REVENUE BONDS PROBABLY 150 MILLION FROM THE COMMERCIAL PAPER PROGRAM. SO THIS REALLY IS NOT A VERY -- 72 MILLION DOLLARS IS NOT-NOT A REALLY LARGE AMOUNT TRANSACTION IN THE SCHEME OF THINGS FOR THE CITY OF AUSTIN. YOU'VE GOT TO REMEMBER THAT YOUR ANNUAL OPERATING AND CAPITAL BUDGETS COMBINED ARE 2.2 BILLION. VERY COMPLEX ORGANIZATION, AND FROM A PRACTICAL SENSE, IF YOU DID NOT HAVE THE ABILITY TO DO THIS, YOU COULD NOT FUNCTION AS A CITY. SO THAT'S WHY I THINK THAT YOU -- I WOULD RECOMMEND THAT YOU USE THIS TYPE OF TRANSACTION BECAUSE EVEN A CASH TRANSACTION IS GOING TO IMPACT YOUR RATEPAYERS MORE THAN THIS ONE IS.

>>SLUSHER: YEAH, I MEAN YOU TALK ABOUT REFUNDING, YOU ARE TALKING ABOUT REFUNDING OF VOTER APPROVED BONDS.

>> NO -- WELL, IN SOME INSTANCES. NOW, FOR ELECTRIC I'M NOT. WE STOPPED DOING VOTER APPROVED BONDS FOR ELECTRIC BECAUSE OF THEIR COMPETITIVE ENVIRONMENT FOUR OR FIVE YEARS AGO. SO ANY BONDS THAT THEY'VE ISSUED THAT THEY'VE USED COMMERCIAL PAPER FOR WE'VE ROLLED THOSE OUT INTO -- INTO REFUNDING BONDS AND BY POLICY WE ARE NOT TAKING THEIR TRANSACTIONS TO THE VOTERS.

>>SLUSHER: I'M AWARE OF THAT. I WAS INTERESTED IN THE SIZE OF THOSE EXPENDITURES.

>> WELL, LIKE I SAID, IN CUMULATIVE ON ANNUAL BASIS WE'RE ROLLING OUT ABOUT 150 MILLION OF CONTRACTUAL -- I MEAN OF COMMERCIAL PAPER INTO REVENUE REFUNDING BONDS. SO THAT'S A PRETTY LARGE TRANSACTION.

>>SLUSHER: OKAY. THANK YOU.

>>GARCIA: MAYOR?

>>MAYOR WATSON: COUNCILMEMBER GARCIA.

>>GARCIA: BETTY, SINCE WE'RE NOT GOING TO ISSUE THE BONDS FOR TWO YEARS AND WE'RE FINANCING IT WITH COMMERCIAL PAPER, IS THE TRANSACTION TO GO WITH COMMERCIAL PAPER IN SOME WAY, SHAPE OR FORM TIED TO US REFUNDING IT OR COULD WE HAVE A INTERVENING PERIOD ELECTION?

>> WELL, WE'RE GOING TO HAVE TO REFUND THOSE EITHER WITH CASH OR WITH REFUNDING BONDS. AND I WOULD -- I GUESS THE QUESTION IS IF YOU PUT -- IF YOU HAVE AN ELECTION AND THEY SAY DON'T ISSUE BONDS WILL THEY MIND IF WE PAY IT OFF IN CASH BECAUSE WE HAVE TO DO IT. AND YOU'VE GOT TO REMEMBER THAT YOU CAN DO THIS AS A CASH OPTION AND ISSUE NO BONDS. IT WILL IN THE SCHEME OF THINGS, THE -- DOING THE COMMERCIAL PAPER AND THE SUBORDINATE LIENS WOULD IMPACT YOUR RATEPAYERS ABOUT 1.5% OVER TEN YEARS. THE CASH OPTION WILL IMPACT THEM ABOUT 3%, SO ABOUT TWICE AS MUCH. THAT'S BECAUSE YOU ARE HAVING TO PAY THIS CASH OFF MORE QUICKLY AND IT PUTS MORE OF A STRESS ON THE SYSTEM. AND THEN FINALLY BOTH OF THOSE OPTIONS ARE SIGNIFICANTLY BETTER THAN -- THAN TAKING UP LCRA'S OFFER OF DOING THE FINANCING BECAUSE THAT WOULD BE 6%. SO YOU HAVE ONE AND A HALF, 3 OR SIX. A WIDE VARIETY OF OPTIONS AND CERTAINLY MY RECOMMENDATION IS FOR YOU TO USE THE COMMERCIAL PAPER.

>>GARCIA: BUT IF IN THE INTERVENING PERIOD BETWEEN THE TIME THAT WE FINANCE THIS WITH COMMERCIAL PAPER AND THEN WE REFUND WITH REVENUE BONDS, IF THE COUNCIL WAS TO DECIDE TO PUT THAT ISSUE BEFORE THE VOTERS, THERE IS NO PROHIBITION IN THE COMMERCIAL PAPER ISSUANCE TO DO THAT.

>> NO.

>>MAYOR WATSON: LET ME MAKE SURE I UNDERSTAND, THE DIFFICULTY WOULD BE YOU HAVE A CONTRACT TO PURCHASE THIS WATER AND IT WOULD CREATE A SITUATION WHERE YOU WOULD EITHER BE IN BREACH OF CONTRACT OR YOU WOULD HAVE TO FINANCE IT WITH CASH?

>> NO, WE'RE GOING TO GO AHEAD AND ONCE YOU ALL APPROVE THE CONTRACT AND IT'S COMPLETED, THE NEGOTIATIONS ARE COMPLETED COMPLETE AND FINALLY SIGNED, WE WILL GIVE LCRA THE $100 MILLION. AND WE WILL ISSUE THE COMMERCIAL PAPER FOR $100 MILLION. AND IF THE VOTERS DON'T APPROVE IT, THEN WE WILL JUST HAVE TO REPAY IT -- USE LIKE THE CASH OPTION THAT I'VE TOLD YOU ABOUT WHICH WILL PUT MORE PRESSURE ON YOUR RATEPAYERS.

>>MAYOR WATSON: YOU ARE RIGHT. OKAY.

>> OKAY.

>>MAYOR WATSON: ANY OTHER QUESTIONS? COUNCILMEMBER GRIFFITH.

>>GRIFFITH: THANK YOU, MAYOR. COULD I ASK MR. ROSE SOMETHING RIGHT QUICK?

>> YES, MA'AM.

>>GRIFFITH: YES, THE PART-AND WE MAY WANT TO DO THIS THIS AFTERNOON IF YOU PREFER. THE PART OF THE CONTRACT THAT I FEEL LIKE IN THE LONG RUN IS GOING TO BE THE MOST IMPORTANT IS THE ONE THAT WE'VE TALKED ABOUT THE LEAST AND THAT IS THE PART BETWEEN 2050 AND 2100.

>> YES, MA'AM.

>>GRIFFITH: AND IN IF LONG RUN "-WHATEVER THE DEAL ENDS UP BEING YOU, THAT PIECE OF IT COULD BE THE BIG ONE. IT WOULD BE THE REALLY MAJOR ONE. SO AT SOME POINT, MAYBE THIS AFTERNOON WOULD BE A BETTER TIME, I WOULD HOPE YOU WOULD BE WILLING TO ON TAPE AND ON RECORD EXPLAIN AND -- IN LAY LANGUAGE SO THAT THE CITIZENS AND I CAN UNDERSTAND WHAT THE PROVISIONS ARE FROM 2050 TO 2100. WOULD YOU PREFER TO DO THAT NOW OR --

>> WHY DON'T I ATTEMPT TO DO IT NOW AND THE FOLKS CAN THINK ABOUT IT AND IF THE ANSWER IS NOT SUFFICIENT WE CAN TALK ABOUT IT AGAIN AT 2:00.

>>GRIFFITH: OKAY. AND I'M REFERRING TO ON CONTRACT PAGE 4 DOWN AT THE BOTTOM OF THE PAGE.

>> YES, MA'AM. I'M VERY FAMILIAR.

>>GRIFFITH: I'M SURE YOU ARE, AND THE REFERENCES GO ON OVER TO I THINK IT'S 13. SO IF YOU CAN GO THROUGH THOSE.

>> YES, MA'AM. I THINK YOU HAVE PROVIDED A VERY SIGNIFICANT SUMMARY TO EVERYTHING THAT WE'VE TALKED ABOUT AND THAT YOU ALL HAVE TALKED ABOUT TODAY BECAUSE MOST OF THE CONVERSATION TODAY HAS BEEN ABOUT VALUE, VALUE TO LCRA, VALUE TO THE CITY OF AUSTIN. MOST OF THE CONVERSATION TODAY HAS BEEN ABOUT IS CONSIDERATION BEING GIVEN, HAS CONSIDERATION BEEN GIVEN. AND WE'VE ALWAYS TAKEN THE POSITION IN THIS VERY COMPREHENSIVE AGREEMENT THAT THERE IS A SIGNIFICANT CONSIDERATION BEING GIVEN TO THE CITY OF AUSTIN FOR ENTERING INTO THIS AGREEMENT AND THAT THERE ARE ALSO SOME BENEFITS TO THE LCRA. [ONE MOMENT, PLEASE, WHILE CAPTIONERS CHANGE].

>> I AM GOING TO BEHAVE MYSELF. MOVING ON. IN FACT AFTER LAST WEEK'S SESSION, I PUT MY STAFF THROUGH A VERY PAINFUL LUNCH IN WHICH WE LEFT THIS BUILDING AND WENT OVER AND HAD LUNCH, I SAID TO MY CREW, "YOU TELL ME ONE MORE TIME WHY WE ARE DOING THIS FOR THIS LENGTH OF TIME." BECAUSE LISTENING TO YOUR CONSULTANTS TALK TO YOU ABOUT ALL OF THE AVAILABLE OPTIONS AND THE RESOURCE BASE, IT REALLY CRYSTALLIZED WHAT THIS IS ALL ABOUT. THAT'S THE POINT THAT I THINK YOU HAVE RAISED. THERE IS NO OTHER RESOURCE BASE OTHER THAN THE WATERS THAT ARE IN LCRA'S STEWARDSHIP. AND THERE ARE NO OTHER OPTIONS THAT THE WATER DEVELOPMENT BOARD OR ANYONE ELSE COULD IDENTIFY THAT EVEN COME CLOSE TO THIS PRICE RANGE. CORPUS CHRISTI AT 300 SOMETHING MILLION, SAN ANTONIO LOOKING AT 6 TO 800 MILLION. PLUS WE HAVE A DIALOGUE BEGINNING IN TEXAS TODAY IN WHICH WATER IS GOING TO BE SOLD AT A MARKET BASIS. I DON'T HAVE ANY DOUBT THAT -- I DO NOT HAVE ANY DOUBT, I WILL MAKE THIS PREDICTION, THAT WITHIN THIS NEXT 100 YEAR PERIOD THAT THIS CONTRACT COVERS WE ARE GOING TO SEE A SIGNIFICANT INCREASE IN THE COST OF WATER, WE ARE GOING TO SEA WATER BEING SOLD ON A DIFFERENT BASIS, WE ALL JUST WENT THROUGH ELECTRIC RESTRUCTURING. AND MUCH OF THAT DISCUSSION IS NOW HEADED INTO THE WORLD OF WATER. SO WHAT THAT MEANS, COUNCILMEMBER, IS THAT THE LCRA HAS GRANTED TO THE CITY OF AUSTIN THE USE OF THIS WATER FOR 100 YEARS. WE FULLY UNDERSTAND THAT. MY BOARD UNDERSTANDS THAT. MY BOARD CHAIR IS HERE, MY BOARD VICE CHAIR WAS HERE. THAT IS AN EXPECTATION THAT IF AUSTIN WANTS TO RENEW THAT FOR ANOTHER 50 YEARS, THEY CAN DO THAT. FROM THE DAY YOU VOTE TO DO THIS, THAT WATER IS RESERVED FOR THE SOLE USE OF THE CITIZENS OF AUSTIN WHO HAPPEN TO ALWAYS BE CITIZENS OF THE COLORADO RIVER BASIN. THAT MEANS IT'S AN OBLIGATION, THAT MEANS WE PROTECT IT AS FIERCELY AS WE HAVE PROTECTED ALL OF OUR OTHER WATER RIGHTS FOR THE LAST 65 YEARS. IT MEANS WE TAKE THE BURDEN AND THE OBLIGATION OF KEEPING THAT WATER THERE FOR YOU. THAT MEANS IF IT'S A RESTRUCTURED MARKET, IT'S OUR OBLIGATION TO PROTECT THAT. JUST LIKE WE PROTECTED OUR LONG-TERM CONTRACTS IN THE ELECTRIC REINSTRUCTURING DEBATE, WE WOULD PROTECT OUR LONG-TERM OBLIGATIONS IN ANY FUTURE DEBATE ABOUT WATER. SO IN SUMMARY, ON THE RECORD, THAT IS THE BIGGEST CONSIDERATION, IT COVERS ALL FACETS OF THIS AGREEMENT. AND WE FULLY INTEND TO HONOR THAT COMMITMENT.

>>GRIFFITH: DID CAN WE REVIEW THE TERMS THAT ARE ON PAGE 4 AND PAGE 13.

>> YES, MA'AM. MY CREW NEEDS TO HAND ME A CONTRACT.

>>MAYOR WATSON: HOW DO YOU WANT TO DO THAT?

>>LEWIS: CAN I ASK --.

>>MAYOR WATSON: COUNCILMEMBER LEWIS?

>>LEWIS: I WILL WAIT.

>>MAYOR WATSON: HOW DO YOU WANT TO DO THAT COUNCILMEMBER? SUMMARIZE --

>>GRIFFITH: SUMLIZE -- SUMMARIZE WOULD BE FINE. IT'S THREE PARAGRAPHS IS ALL IT IS.

>>MAYOR WATSON: DO YOU WANT HIM TO READ IT INTO THE RECORD, GO THROUGH A SUMMARY, WHAT?

>>GRIFFITH: WHETHER IT'S BULLET FORM, I THINK --

>> I THINK 3.2 A WHICH SAYS THAT THE CITY AND LCRA AGREE TO THE TERM OF THE YOU 6 AGREEMENT, IT IS AMENDED TO JANUARY 1 OF 2051. THEN IT SAYS THAT IF THE CITY ELECTS TO EXERCISE ITS OPTION, WE -- IT GIVES US THE RIGHT TO EXERCISE SOME OPTIONS RELATIVE TO THE DAM. AND THE PROPERTY OVER THERE. AND IT ALSO GIVES YOU -- GIVES YOU THE RIGHT TO EXTEND IT FOR AN ADDITIONAL 50 YEARS UNTIL JANUARY 1,2101. THAT IS -- THAT -- THAT IS IN THE AGREEMENT, A CENTRAL PART OF THE AGREEMENT AND FULLY UNDERSTOOD BY THE LCRA.

>>GRIFFITH: AND THEN THERE'S A PAGE 13 REFERENCE THAT IS THEN GIVEN THAT WE PROBABLY BETTER CLARIFY, ALSO. ONE AND TWO ON PAGE 13.

>> YES, MA'AM. WHAT THAT PAGE DOES IS, YOU KNOW, LAYS OUT THE DIFFERENCE BETWEEN THE 150,000 ACRE FEET BEING USED TO BACK UP WHAT IS THEN THE 250, I WILL ALSO SAY, BUS WE TALKED ABOUT THIS EARLIER, WHAT COUNCILMEMBER SPELMAN WAS TALKING ABOUT, IT IS VERY, VERY IMPORTANT AND CLEARLY UNDERSTOOD AND NEEDS TO BE SAID ON THE RECORD. WHEN THE LCRA SAID UNDER CONTRACT THAT IT WILL GIVE YOU 150,000 ACRE FEET OF STORED WATER, THAT IS FOR CONSUMPTIVE PURPOSES. WHEN YOU SAY YOU HAVE THOSE OTHER WATER RIGHTS, THOSE ARE NON-CONSUMMATIVE PURPOSES. THE LCRA IS SAYING WE HAVE PROVIDE YOU THE ACRE FEET FOR BACKING UP YOUR MUNICIPAL WATER RIGHT OF 250, THAT'S LAID OUT ON PAGE 13 CLEARLY UNDERSTOOD

>>GRIFFITH: YOU HAVE AGAIN AFFIRMED THE PART OF THIS CONTRACT THAT DEALS WITH 2050 TO 2100, THEY ARE AFFIRMED BY YOU TO BE RIGHT HERE ON PAGE 4 AND PAGE 13 AND THAT'S THE DEAL.

>> YES, MA'AM.

>>GRIFFITH: OKAY. THANK YOU.

>>MAYOR WATSON: THANK YOU, MR. ROSE.

>>LEWIS: I HAVE A QUESTION.

>>MAYOR WATSON: COUNCILMEMBER LEWIS.

>>LEWIS: MR. ROSE, YOU MADE SOME STATEMENTS THERE SO LET ME JUST CLARIFY ONE THING. WE ARE NOT GOING TO COME BACK -- YOU ARE NOT GOING TO COME BACK AFTER A SEVEN YEAR DROUGHT, SAY, WELL, WE DON'T HAVE THE WATER.

>> NO, SIR. IN FACT THAT'S A VERY, VERY IMPORTANT POINT. THAT I WOULD WANT TO MENTION. AGAIN, LET'S TALK -- WHAT HAPPENS IN A DROUGHT. WE HEARD SOME ASSUMPTIONS EARLIER, LIKE IF YOU ADOPT DO THIS THAT YOU WILL KEEP LAKE AUSTIN AT FIVE FEET. DURING A DROUGHT. I DON'T KNOW THAT THAT'S POSSIBLE. BECAUSE LAKE TRAVIS WILL -- LAKE TRAVIS AT 614, LAKE AUSTIN ONLY FIVE FEET DOWN, I DON'T KNOW THAT THE LCRA WOULD BE IN A POSITION TO SAY TO AUSTIN, WELL, OKAY, YOU CAN DO THAT FOR BASICALLY RECREATIONAL PURPOSES WHILE WE ARE TAKING, YOU KNOW, LAKE TRAVIS DOWN.

>>LEWIS: I AM NOT TALKING ABOUT THAT, I AM TALKING ABOUT CONSUMPTION.

>> THAT IS MY POINT. MY POINT IS THIS THEN, THAT WE CLEARLY UNDERSTAND THAT WE HAVE AN OBLIGATION DURING THAT DROUGHT TO HAVE THE WATER THERE FOR DRINKING WATER AHEAD OF RECREATION, FARMING OR ANYTHING ELSE.

>>LEWIS: WE CAN ALWAYS USE IT LIKE THEY DO THE RIVER IN MONTERREY, ALWAYS MAKE SOCCER FIELDS OUT OF IT UNTIL IT RAINS.

>> WE WILL HAVE THE DRINKING WATER THERE, EVEN IF IT MEANS THE LAKE WON'T BE.

>>GRIFFITH: YES. MR. ROSE, ONE OF THE REASONS THAT THERE'S BEEN A LOT OF QUESTION IS BECAUSE SOME OF US FEEL LIKE THE FARTHER OUT AN ESTIMATE MAYBE THE LESS THE -- ITS VIABILITY. AND THE CLOSER TERM IT IS, THE HIGHER THE ODDS OF VALIDITY. SO I JUST WANTED YOU TO KNOW THAT'S WHY THERE HAVE BEEN SOME QUESTIONS ABOUT ASSUMPTIONS THAT ARE MADE, DECADE INTO THE FUTURE, ON THREE OR FOUR INTERACTIVE PLANES. IF THERE'S ANYTHING WE CAN DO TO COMPENSATE FOR THAT KIND OF LOSS OF VALIDITY, THEN THAT MIGHT BE A GOOD THING TO INCLUDE.

>> I WOULD SAY TWO THINGS VERY BRIEFLY ON THAT. ONE, I THINK YOUR CONTRACT DOES THAT. I THINK THE EXPECTATIONS ARE CLEARLY LAID OUT. I WILL ALSO TELL YOU THAT AS AN ORGANIZATION, THE LCRA HAS A 65 YEAR HISTORY, INCLUDING THE -- INCLUDING OF GOING THROUGH THE DROUGHT OF RECORD OF HONORING THOSE COMMITMENTS. WE WOULD NOT MAKE A COMMITMENT THAT WE DON'T THINK WE CAN MEET. SO YOU ARE RIGHT. THESE ARE STRONG COMMITMENTS THAT ARE BEING MADE. WE HAVE PUT A LOT OF THOUGHT, OUR STANDARD CONTRACT IS 25 YEARS FOR A VERY GOOD REASON. SO PLEASE BELIEVE ME WHEN I SAY WE PUT A LOT OF THOUGHT IN IT FROM OUR PERSPECTIVE ABOUT WHY WE WOULD DO THIS, WHAT IT MEANS AND AS COUNCILMEMBER LEWIS SAID A MINUTE AGO, THE OBLIGATION. THIS MEANS RICE FARMERS DON'T GET WATER DURING A SEVERE DROUGHT, THIS MEANS THIS WATER DOESN'T LEAVE THE BASIN, THIS MEANS LAKE TRAVIS GOES DOWN TO 614 IN THE NEXT DROUGHT. IT MEANS WE HONOR OUR COMMITMENT FOR MUNICIPAL DRINKING WATER TO THE CITY OF AUSTIN. YOU ARE ABSOLUTELY RIGHT.

>>GRIFFITH: THAT'S GOOD. HAVE YOU THOUGHT ABOUT, GIVEN THE ODDS THAT SOME OF THE ASSUMPTIONS MAY IN LATER DECADES NOT PROVE TO BE DEAD SOLID PERFECT, IS THERE A WAY THAT WE COULD DO IN-COURSE CORRECTIONS THROUGHOUT THE LIFE, ESPECIALLY IF IT'S 100 YEARS, ON THESE ASSUMPTIONS?

>> I THINK THOSE ARE COVERED IN THE CONTRACT. AND I THINK THAT YOU HAVE SOME OPTIONS ALONG THOSE LINES. PARTICULARLY SAYING -- THINKING THAT IF YOU GO AS FAR AS WE ARE TALKING ABOUT, THERE IS GOING TO BE SOME GROWTH. THERE IS A SIGNIFICANT QUESTION AS TO WHETHER OR NOT YOU HAVE EVEN RESERVED ENOUGH WATER AT ALL. IT MIGHT BE BEST TO LET YOUR STAFFING THROUGH THAT.

>>MAYOR WATSON: THERE'S BEEN SOME DISCUSSION ABOUT THAT.

>> YES. THE PROVISION, TWO PARTS TO YOUR QUESTION. ONE, MR. ROSE HAS JUST ADDRESSED, THAT IS THE OPTION WE WOULD NOT HAVE TO EXERCISE THAT OPTION IN 2050 TO HAVE THAT ADDITIONAL WATER. SECONDLY, WE WOULD HAVE -- WE HAVE A PROVISION IN THE INSTRUMENT THAT ALLOWS THE CITY FROM YEAR FIVE THROUGH YEAR 20, SO A 15 YEAR WINDOW OF OPPORTUNITY, TO LOOK AT THIS AND SAY, WELL, OUR CONSERVATION EFFORTS HAVE BEEN VERY, VERY SUCCESSFUL, OUR REUSE EFFORTS HAVE BEEN VERY, VERY SUCCESSFUL. WE DON'T NEED AS MUCH WATER, WE CAN USE THAT AMOUNT BY 25,000 ACRE FEET. SO TO A TOTAL OF 50,000 INSTEAD OF THE 75,000. AND THEN THERE -- WE WOULD ENTER INTO NEGOTIATIONS WITH THE LCRA AT THAT TIME AS TO THAT REDUCTION, BUT WE DO HAVE A THAT RIGHT FOR THAT IN-COURSE CORRECTION.

>>MAYOR WATSON: THANK YOU, ALL. MR. GOSS, ARE YOU DONE? COUNCIL, WHAT I WILL DO RIGHT NOW IS I WILL ENTERTAIN A MOTION -- THAT CONCLUDES ALL OF THE BRIEFINGS, I WILL ENTERTAIN A MOTION TO RECESS THE -- THE COUNCIL MEETING OF THE AUSTIN CITY COUNCILL AND WE WILL GO INTO EXECUTIVE SESSION. THE PURPOSE OF THE EXECUTIVE DISCUSSION WILL BE TO ENGAGE IN A PRIVATE CONSULTATION WITH OUR ATTORNEY PRUDENT TO 551.071 OF THE GOVERNMENT CODE AND TO ENGAGE IN A REAL PROPERTY DISCUSSION PRUDENT TO SECTION 551.072. WE WILL DISCUSS ACQUISITION OF AND SALE OF REAL PROPERTY RELATED TO THE BARTON SPRINGS CLEAN DRINKING WATER PROJECT WHICH MANY PEOPLE KNOW AS THE MAY 2ND, 1998 BOND PROPOSITION NUMBER TWO ITEM. PURCHASE OF PROPERTY FOR GREEN WAYS IN DESTINATION PARK. WE WILL DISCUSS LEGAL ISSUES REGARDING IMPLEMENTATION OF HOUSE BILL 1777; DISCUSS LEGAL ISSUES AND CONTRACT STATUS REGARDING THE MEET AND CONFER PROCESS WITH THE AUSTIN PROFESSIONAL FIREFIGHTERS ASSOCIATION; DISCUSS LEGAL ISSUES RELATED TO AN APPLICATION FOR A LIMITED ADJUSTMENT FROM S.O.S. WATER QUALITY REGULATIONS FOR THE PAISANO PLACE SUBDIVISION, THIS LITIGATION CONCERNS DEVELOPMENT REGULATIONS APPLICABLE IN THE BARTON SPRINGS ZONE; DISCUSS LEGAL ISSUES CONCERNING CHAPTER 245 OF THE TEXAS LOCAL GOVERNMENT CODE; LEGAL ISSUES CONCERNING THE NORTHERN BOUNDARY LINE OF THE SAND BEACH RESERVE TRACT ON THE NORTH SIDE OF TOWN LAKE AT LAMAR BOULEVARD; CIRCLE C LAND CORPORATION VERSUS CITY OF AUSTIN, CAUSE NUMBER 97-13994, 53RD JUDICIAL DISTRICT OF TRAVIS COUNTY; LEGAL ISSUES RELATING TO UTILITY SERVICE TO THE HEEP RANCH AND A PENDING APPLICATION BY CREEDMORE MAHA WATER SUPPLY CORPORATION BEFORE THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION TO AMEND ITS CERTIFICATE OF CONVENIENCE AND NECESSITY; CITY OF AUSTIN VERSUS LS RANCH, LIMITED, ET AL, CAUSE NUMBER 039800542-CV IN THE THIRD COURT OF APPEALS, AUSTIN, TEXAS. THIS LITIGATION CONCERNS DEVELOPMENT REGULATIONS APPLICABLE IN THE BARTON SPRINGS ZONE; F.M. PROPERTIES OPERATING COMPANY VERSUS CITY OF AUSTIN, CAUSE NUMBER 98-0685 IN THE SUPREME COURT OF TEXAS, THIS HITTATION -- THIS LITIGATION CONCERNS DEVELOPMENT REGULATIONS APPLICABLE IN THE BARTON SPRINGS ZONE. I WILL ENTERTAIN A MOTION TO GO INTO -- MOTION MADE BY COUNCILMEMBER GARCIA, SECONDED BY COUNCILMEMBER SLUSHER. IS THERE ANY DISCUSSION? HEARING NONE, ALL THOSE IN FAVOR SAY AYE. OPPOSED SAY NO. MOTION CARRIES, WE WILL BE RECESSED INTO EXECUTIVE SESSION. LET ME SAY A COUPLE OF THINGS BEFORE WE LEAVE THE DIAS. WE WILL COME BACK OUT PROMPTLY AT 1:30 SO THAT WE WILL BE ABLE TO TAKE THIS MATTER UP THAT WE HAVE BEEN HAVING THE BRIEFING ON THIS MORNING AT 2:00. WE WILL MOVE THROUGH THE PROCLAMATIONS VERY QUICKLY, WE WILL TAKE THIS ITEM UP AT 2:00, EVEN IF THAT MEANS WE MOVE GENERAL CITIZENS COMMUNICATIONS. SO IF PEOPLE ARE WATCHING AND THEY ARE PLANNING ON COMING DOWN FOR GENERAL CITIZENS COMMUNICATION, I WOULD RECOMMEND THAT YOU WAIT AND SEE WHERE WE ARE BECAUSE WE WILL TAKE UP THE LCRA CITY OF AUSTIN PROPOSED WATER AGREEMENT AT 2:00. WE ARE IN RECESS TO GO INTO EXECUTIVE SESSION. TEST TEST TEST

>> WELCOME, EVERYBODY. WE'RE GOING TO START OFF OUR PROCLAMATIONS TODAY WITH CZECH HERITAGE MONTH AND THAT EXPLAINS OUR FRIENDS. BE IT KNOWN THAT I KIRK WATSON MAYOR OF THE CITY OF AUSTIN TEXAS DO HEREBY PROCLAIM OCTOBER 1999 AS CZECH HERITAGE AND CALL ON ALL CITIZENS IN RECOGNIZING THAT THE CZECH POPULATION IN TEXAS WHICH NUMBERS APPROXIMATELY ONE MILLION PEOPLE TRACES ITS ROOTS TO THE 19TH CENTURY OF THEIR ANCESTORS FROM WHAT WAS THEN THE AUSTRIAN HUNGRY EMPIRE. IN ACKNOWLEDGING THAT CZECH TEXANS AS AN ETHNIC GROUP HAVE CONTRIBUTED GREATLY TO THE STRENGTH AND VITALITY OF OUR NATION AND RECOGNIZING THE PROUD ANCESTRY OF THE CITIZENS AND IN COMMENDING THE CZECH HERITAGE SOCIETY FOR ITS EFFORTS TO PROMOTE AND PRESERVE FOR FUTURE GENERATIONS THE HERITAGE, CULTURE, GENEOLOGY AND LANGUAGE OF CZECH TEXANS, AND IT'S SIGNED BY ME, KIRK WATSON, THE MAYOR OF THE CITY OF AUSTIN AND I'M HAPPY TO PROVIDE THAT TO THE MEMBERS OF OUR CZECH COMMUNITY. [APPLAUSE]. WHY DON'T YOU COME ON UP? IS SARAH HERE? I'M GOING TO LET YOU INTRODUCE YOURSELF BECAUSE I WILL KILL YOUR LAST NAME. [LAUGHTER].

>> THANK YOU. THANK YOU. MY NAME IS RICHARD POVALACE SKFMENT, A NATIVE BORN TEXAN AND I AM A MEMBER OF THE TRAVIS WILLIAMSON COUNTY CZECH HERITAGE SOCIETY AND I HAVE WITH ME TED AND SARAH VITECK, GILBERT AND VLASTA, EILEEN, EDWIN AND MARTHA, LYNN JOHNSON AND WE MAY HAVE SEVERAL OTHERS THAT HAVE COME IN LATER. I WOULD LIKE TO MAKE A BRIEF STATEMENT. AS PRESIDENT OF THE TRAVIS, WILLIAMSON COUNTY CZECH HERITAGE SOCIETY ON THIS OCCASION I WOULD LIKE TO THANK THE AUSTIN CITY COUNCILL AND THE MAYOR FOR THEIR OPPORTUNITY TO REMEMBER OUR CZECH ANCESTORS WHO SETTLE UNDERSTAND TEXAS AROUND THE 1850'S. WE REMEMBER THEIR DETERMINATION AND HARD WORK TO BUILD LIVES FOR THEMSELVES AND THEIR FAMILIES. WE ALSO REMEMBER THEIR LOVE FOR COMMUNITY AND REMEMBER THEIR FAITH IN GOD. AND AS MEMBERS OF THE AMERICANS OF CZECH ANCESTRY, WE'RE PROUD OF THE CONTRIBUTIONS THAT OUR PARENTS, GRANDPARENTS AND GREAT GRANDPARENTS MADE TO AMERICA AND SOCIETY AS A WHOLE. ON THIS DAY WE WANT TO REMIND AUSTIN AND TEXAS OF OUR HERITAGE TO THE CELEBRATION OF CZECH HERITAGE MONTH. AND I MIGHT ADD THAT A NUMBER OF US WILL BE GOING TO THE PUBLIC SCHOOLS DURING THIS CZECH HERITAGE WEEK ACROSS THE STATE OF TEXAS, WE'LL BE GIVING PROGRAMS TO SEVERAL OF THE SCHOOLROOM, CLASSROOMS IN ELEMENTARY, MIDDLE SCHOOL AND HIGH SCHOOLS. ALSO I WANT TO BRING OUT THE FACT THAT AFTER THE CZECHES REGAINED THEIR FREEDOM, A NUMBER OF US HAVE BEEN BECOME MANY TIMES. IN FACT, I'VE BEEN BACK 12 TIMES BACK TO THE OLD COUNTRY TO REESTABLISH THE RELATIONS WITH THE CZECHES AND AMERICANS. AS YOU KNOW, THE CZECHES AND AMERICANS ARE NOW UNITED IN NATO AND WE ARE VERY HAPPY FOR THAT. WE THINK IT'S GOING TO MAKE A MORE PEACEFUL EUROPE AND PROBABLY A WORLD TO COME. AGAIN, MAYOR WATSON, THANK YOU VERY MUCH, AND THANK YOU FOR LISTENING, FOLKS. [APPLAUSE].

>>MAYOR WATSON: I DON'T MEAN TO TELL YOU HOW TO DO YOUR BUSINESS, I'M NOT TRYING TO TELL YOU HOW TO DO YOUR BUSINESS, BUT IT LOOKS TO ME LIKE YOU HAVE SOME KOLACHES THERE THAT I WANT.

>> WE WANT TO SAVE THAT FOR HER.

>> HERE ARE SOME CZECH KOLACHES TO YOU AND CITY COUNCIL FROM US SO THEY ARE THE TRUE CZECH KOLACHES.

>>MAYOR WATSON: THANK YOU VERY MUCH FOR BEING WITH US.

>>MAYOR WATSON: I WASN'T ABOUT TO TRY TO PRONOUNCE HIS NAME, IN THE GREAT DIRTY HARRY MOVIE WHEN THE MAN GETS BLOWN UP, YOU HAVE TO KNOW YOUR LIMITATIONS. BE IT KNOWN BY THESE PRESENTS -- IS LINDA BAKER HERE? BE IT KNOWN BY THESE PRESENTS THAT I KIRT, MAYOR OF THE CITY OF AUSTIN, TEXAS, DO HEREBY PROCLAIM OCTOBER 1999 AS TRAINING AND DEVELOPMENT MONTH IN AUSTIN AND CALL ON ALL CITIZENS TO JOIN ME IN RECOGNIZING THAT THE 350 MEMBERS OF THE AUSTIN CHAPTER OF THE AMERICAN SOCIETY FOR TRAINING AND DEVELOPMENT ARE PROFESSIONALS IN THE FIELD OF WORKPLACE LEARNING AND PERFORMANCE, IN RECOGNIZING THAT PROPER TRAINING PROVIDES COMPANIES A COMPETITIVE ENCH AND THROUGH EFFECTIVE TRAINING WE CAN INCREASE PRODUCTIVITY AND ACHIEVE ORGANIZATIONAL GOALS IN A TIGHT LABOR MARKET AND JOIN ME IN CONGRATULATING THE AUSTIN CHAPTER OF ASTD, SIGNED BY ME, KIRK WATSON, MAYOR OF THE CITY OF AUSTIN, TEXAS AND I'M PROUD TO PRESENT THIS TO LINDA BAKER AND THANK YOU FOR THE HELP YOU HAVE PROVIDED US AS A FACILITATOR FOR THE H.I.V. PLANNING COUNCIL. THANK YOU VERY MUCH. [APPLAUSE].

>> THANK YOU, MAYOR. ON BEHALF OF THE AUSTIN CHAPTER OUR PRESIDENT KENNEDY CATES, OUR BOARD OF DIRECTORS, THE STEERING COMMITTEE, I WANT TO THANK THE MAYOR AND COUNCILMEMBERS FOR RECOGNIZING OUR CHAPTER AND HONORING OUR PROFESSION WITH THIS PROCLAMATION. FOR THE PAST 25 YEARS OUR MEMBERS HAVE BEEN INVOLVED THIS TRAINING AND DEVELOPMENT IN A WIDE VARIETY OF INDUSTRIES IN AUSTIN AND WE'VE REALLY CONTRIBUTED SUBSTANTIALLY TO INCREASED WORK RELATED COMPETENT, PERFORMANCE AND FULFILLMENT IN OTHERS AND OUR CHAPTER WORKS TO PROMOTE THE PROFESSIONAL DEVELOPMENT OF THE PEOPLE WHO ARE ACTUALLY AFFECTING LIVES OF MANY OTHER PEOPLE IN OUR COMMUNITY. WE WANT TO INVITE YOU ALL WHO ARE HERE PRESENT IN COUNCIL CHAMBERS AS WELL AS THOSE OF YOU WHO ARE LISTENING TO LEARN MORE ABOUT OUR CHAPTER BY VISITING OUR WEBSITE, WHICH IS WWW.AUSTIN-ASTD.ORG. WE INVITE YOU TO CALL ON, 448 AND LEARN MORE ABOUT THE TRAINING AND DEVELOPMENT PROFESSION. WE'RE PARTICULARLY INTERESTED IN INVITING TO YOU CELEBRATE OUR 25TH ANNIVERSARY THIS MONTH, TWO WEEKS FROM TONIGHT, WHEN WE WILL BE JOINED BY THE JAZZ PHAROS, COMEDY PLAYERS AND FORMER TV NEWS ANCHOR AND ASTD MEMBER NOW BOB KARSTENS WHEN WE HONOR OUR CHAPTER AT THE METROPOLITAN CLUB. LAST BUT NOT LEAST I WANT TO HONOR AND THANK THE VISIONARY LEADERS IN BOTH THE PUBLIC AND PRIVATE SECTORS WHO HAVE VALUED THE TRAINING AND DEVELOPMENT PROFESSION AND RECOGNIZE THE VALUE THAT TRAINING AND DEVELOPMENT PROVIDES ULTIMATELY TO THE PRODUCTS AND SERVICES THAT THEY PROVIDE. IT IS THROUGH THEIR EFFORTS AND THEIR WORK THAT THOUSANDS OF INDIVIDUALS AND BUSINESSES BENEFIT EVERY DAY. SO THANK YOU. [APPLAUSE].

>>GOODMAN: FOR THE NEXT PROC, IF I COULD ASK RANDY RUSSELL TO COME FORWARD. AS WE SAY SO OFTEN THERE ARE A LOT OF GREAT FOLKS THAT WORK FOR THE CITY AND A LOT OF WONDERFUL FACILITIES THAT MAKE THIS A SPECIAL PLACE, AND SO FOR TODAY I WOULD LIKE TO READ THIS PROCLAMATION. BE IT KNOWN BY THESE PRESENTS THAT I, KIR, MAYOR OF THE CITY OF AUSTIN, TEXAS, DO HEREBY PROCLAIM OCTOBER 7TH, 1999 AS HANCOCK GOLF COURSE CENTENNIAL DAY IN AUSTIN. AND CALL ON ALL CITIZENS TO JOIN US IN RECOGNIZING THAT THIS MUNICIPAL COURSE IN THE HEART OF OUR CITY ORIGINATED AS AUSTIN COUNTRY CLUB IN 1899. AND STANDS TODAY AS THE OLDEST GOLF COURSE IN TEXAS. THAT THE COURSE IS NAMED FOR LEWIS HANCOCK WHO ESTABLISHED THE SPORT OF GOLF HERE IN AUSTIN AND THAT NOTED GOLF INSTRUCTOR HARVEY PENIC STARTED HIS CAREER AT THIS COURSE. WE CALL ON ALL CITIZENS TO CELEBRATE THE CULTURAL AND HISTORIC VALUE OF HANCOCK GOLF COURSE -- WHY DO I HAVE TROUBLE WITH THAT? -- HANCOCK GOLF COURSE HOLDS FOR AUSTIN AND TO TAKE ADVANTAGE OF ITS BEAUTY AND CHALLENGES DURING THIS 100TH ANNIVERSARY YEAR. THIS IS SO AUSTIN! RANDY. THANK YOU. [APPLAUSE].

>> THANK YOU. THANK YOU. I'M RANDY WITH PARKS AND RECREATION. I WOULD LIKE TO INTRODUCE NANCY GUTMAN, BARBARA HOLMES WITH THE GOLF OFFICE AND DELNO AND HE IS GOING TO SAY A FEW WORDS ABOUT HANCOCK SINCE HE'S THE CLOSEST ONE WE HAD TO 100. [LAUGHTER].

>>MAYOR WATSON: YOU GET TO FOLLOW HIM SO YOU GET -- [INAUDIBLE].

>> THANK YOU VERY MUCH AND WE CERTAINLY APPRECIATE THE -- MAYOR WATSON AND THE COUNCIL'S SUPPORT FOR CONTINUED GOLF IN AUSTIN, TEXAS. THE HANCOCK GOLF COURSE, ALTHOUGH I DIDN'T PLAY THE FIRST ROUND THERE IN 1899, I DID GROW UP CLOSE TO THAT GOLF COURSE, AND IT HAS BEEN VERY SPECIAL TO A LOT OF PEOPLE. IT'S NOW USED AS OUR JUNIOR ACADEMY FOR GOLF, WHICH IS A VERY POPULAR SPORT AND STILL CONTINUING TO GROW IN AUSTIN. WE APPRECIATE YOUR SUPPORT. IT WAS TAKEN OVER BY THE CITY IN 1950, BUT THE FIRST GOLF BALL WAS ACTUALLY STRUCK ON THAT GOLF COURSE IN TEXAS IN 1899, AND WE'RE VERY PROUD OF THAT FACT AND WE JUST WANT TO THANK YOU FOR YOUR SUPPORT AND WE'RE VERY EXCITED ABOUT BEING PART OF THE 100TH ANNIVERSARY. THANK YOU VERY MUCH. [APPLAUSE].

>>MAYOR WATSON: HEY, FOLKS, COME ON, LET'S GET A PICTURE REAL QUICK. COME ON, MAYOR PRO TEM, GET IN HERE.

>>MAYOR WATSON: KNOW ALL MEN BY THESE PRESENTS THAT I KIRT WATSON, MAYOR OF THE CITY OF AUSTIN, TEXAS, HEREBY PROCLAIM OCTOBER 4 THROUGH 8, 1999 AS WALK OUR CHILDREN TO SCHOOL WEEK IN AUSTIN AND CALL ON ALL CITIZENS TO JOIN ME IN RECOGNIZING THAT BECAUSE OUR CHILDREN ARE WALK TO GO AND FROM NEIGHBORHOOD SCHOOLS OFTEN IN THE BUSIEST TIMES OF THE DAY THAT MANY LIVES COULD BE SAVED IF WE MAKE PEDESTRIAN SAFETY A PRIORITY. PARENTS AND CAREGIVERS SHOULD TEACH CHILDREN ABOUT PEDESTRIAN SAFETY AND WORK TOWARD IMPROVING THE SAFETY OF PEDESTRIANS THIS WEEK AND EVERY WEEK AND IT'S SIGNED BY ME, KIRK WATSON, MAYOR OF THE CITY OF AUSTIN. I KNOW THAT SEVERAL MEMBERS OF THE COUNCIL HAD THE OPPORTUNITY THIS WEEK TO GO TO VARIOUS SCHOOLS THROUGHOUT THE CITY AND WALK KIDS TO SCHOOL AND IN FACT CHARLIE GANGY AND I HAD THE OPPORTUNITY TO WALK TOGETHER. CHARLIE, THANK YOU, I'M HAPPY TO PRESENT THIS TO YOU. [APPLAUSE].

>> THAT WAS THE EARLIEST WE'VE BEEN UP IN A WHILE, ISN'T IT, KIRK? IT'S MY UNDERSTANDING --.

>>MAYOR WATSON: MAYBE YOU, BUT -- [LAUGHTER].

>> COUNCILMEMBERS BEVERLY GRIFFITH, BILL SPELMAN, WILLIE LEWIS AND OF COURSE THE MAYOR WAS INVOLVED IN THAT WALK OUR KIDS TO SCHOOL EVENT YESTERDAY WHICH WAS A CONSCIOUSNESS RAISING EFFORT THAT I THINK WAS OVERALL VERY SUCCESSFUL. WE DID LEARN SOME LESSONS ALONG THE WAY. WE LEARNED THAT KIDS TAKE UNNECESSARY RISKS OR RISKS THAT WE DIDN'T TAKE NOW THAT WE'RE ADULTS THAT -- THAT IF OUR CONSCIOUS IS RAISED TO THAT, IF WE'RE AWARE OF THAT WE WOULD FIND IT APPALLING. THE FACT THERE AREN'T SIDEWALKS WITHIN A SHORT RANGE OF SCHOOLS SO THAT KIDS CAN ACTUALLY WALK TO SCHOOL WITHOUT MIXING IT UP WITH TRAFFIC, THE FACT THAT TRAFFIC THE MOVING TOO FAST THROUGH THESE NEIGHBORHOODS, AND IT'S OFTENTIMES THE PARENTS THAT ARE TRYING TO GET THEIR KIDS TO THE SCHOOL BECAUSE THEY ARE AFRAID TO LET THEM WALK TO SCHOOL. WE LEARNED THAT SOMETIMES THESE CROSSWALKS ARE INVISIBLE AND NOBODY IS PAYING ATTENTION TO THEM, BUT IF WE BUILT THEM CORRECTLY, THEY WOULD BE SAFER. SO WE LEARNED THAT THERE IS -- AND THERE'S NOT ANY TECHNICAL PROBLEMS TO THIS. AS KIRK KNOWS, I SPEND MY TIME AS CONSULTANT AROUND THE COUNTRY HELPING TO BUILD SAFE CROSSWALKS AND SAFE SIDEWALKS AND TRAFFIC CALMING TO SLOW TRAFFIC TO APPROPRIATE SPEEDS IN NEIGHBORHOODS. AND I'M HAPPY TO REPORT THAT AUSTIN IS SQUARELY IN THE MIDDLE OF A TREND IN THE NATION TO TAKE BACK THE STREETS AND TO SLOW THEM DOWN WHERE APPROPRIATE IN NEIGHBORHOODS. I'M REALLY GLAD TO SEE THOSE COUNCILMEMBERS AND MAYOR WATSON PARTICIPATE IN THIS. IT WAS VERY MEANINGFUL NOT ONLY TO OUR KIDS BUT ALSO TO PARENTS WHO SAW THIS, AND I HOPE THEIR CONSCIOUSNESS IS RAIDS. MAYOR, THANK YOU VERY MUCH.

>>MAYOR WATSON: THANK YOU. [APPLAUSE].

>>MAYOR WATSON: DO YOU WANT TO COME ON UP? BE IT KNOWN BY THESE PRESENTS THAT I, KIRK WATSON, MAYOR OF THE CITY OF AUSTIN, TEXAS, DO HEREBY PROCLAIM OCTOBER 7, 1999, AS THE GREATER AUSTIN COMBINED CHARITIES CAMPAIGN DAY IN AUSTIN. AND I CALL ON ALL CITIZENS TO JOIN ME IN RECOGNIZING THAT CHARITIES PROVIDE A VEHICLE THROUGH WHICH CONTRIBUTORS, VOLUNTEERS AND COMMUNITY AGENCIES CAN WORK TOGETHER TO SUPPORT A COMPREHENSIVE SYSTEM OF HEALTH, EDUCATION AND SERVICE PROGRAMS FOR THE CENTRAL TEXAS COMMUNITY. IN RECOGNIZING THAT THE COMBINED CHARITIES CAMPAIGN HAS RAISED MORE THAN $1,344,000 FOR THE COMMUNITY SINCE 1994 AND IN ENCOURAGING ALL CITY EMPLOYEES TO MAKE A VISIBLE DIFFERENCE BY JOINING THEIR FELLOW PUBLIC SECTOR EMPLOYEES IN THE SPIRIT OF GIVING BY CONTRIBUTING GENEROUSLY TO THE CHARITABLE AGENCIES OF THEIR CHOICE AND IT'S SIGNED BY ME AS MAYOR OF THE CITY AND I'M HAPPY TO PRESENT THIS TO DAVID LOURI AND CHUCK MANNING. [APPLAUSE].

>> WE RECOGNIZE AND APPRECIATE THE FACT THAT CITY OF AUSTIN EMPLOYEES CONTRIBUTE TO THE COMMUNITY ON A REGULAR BASIS. BUT THIS CAMPAIGN OFFERS A WONDERFUL OPPORTUNITY TO GIVE BACK TO THE COMMUNITY IN A VERY MEANINGFUL WAY. WHETHER YOUR INTERESTS ARE IN HEALTH AND HUMAN SERVICES OR THE ENVIRONMENT OR CULTURAL ACTIVITIES, THERE ARE MANY, MANY OPTIONS TO CHOOSE FROM AND IT IS A COMBINED CHARITIES CAMPAIGN SO WE HAVE A NUMBER OF FEDERATIONS THAT ARE INVOLVED, HUNDREDS OF AGENCIES AND ORGANIZATIONS THAT PEOPLE CAN CHOOSE FROM. LAST YEAR 2900 CITY OF AUSTIN EMPLOYEES CONTRIBUTED $360,000 TO THIS CAMPAIGN. THAT WAS A 34% INCREASE OVER THE PREVIOUS YEAR. A PHENOMINAL IMPROVEMENT. BUT WE THINK WE CAN CONTINUE TO DO MORE BECAUSE IN FACT ONLY ABOUT 30% OF OUR WORKFORCE ARE PARTICIPATING AND WE BELIEVE BY GIVING GOOD INFORMATION ABOUT THIS OPPORTUNITY, THE CAMPAIGN, THE IMPORTANT NEEDS THAT ARE ADDRESSED, THAT MANY MORE EMPLOYEES WILL CHOOSE TO PARTICIPATE. THE EASIEST WAY TO PARTICIPATE OF COURSE IS PAYROLL DEDUCTION AND THIS YEAR WE'RE OFFERING A LONE STAR GIFT PARTICULARLY FOR NEW FOLKS WHO ARE THINKING ABOUT CONTRIBUTE, JUST CHECK OFF THE LONE STAR BOX AND AUTOMATICALLY ONE HOUR OF PAY PER MONTH IS CONTRIBUTED TO THE CAMPAIGN. I WOULD LIKE TO RECOGNIZE A COUPLE OF FOLKS WHO ARE INVOLVED VERY MUCH SO IN THE CAMPAIGN. CHUCK MAN, WHO IS THE CO-CHAIR THIS YEAR FROM AUSTIN ENERGY AND WILL BE THE CHAIR NEXT YEAR. HE IS ALSO COORDINATING THE LEADER SHIP GIVING CAMPAIGN WHICH RELATES TO THOSE INDIVIDUALS WHO GIVE A THOUSAND DOLLARS OR MORE INDIVIDUALLY TO THE CAMPAIGN. LAST YEAR WE INCREASED THAT PARTICIPATION FROM SIX INDIVIDUALS TO 39, AND THIS YEAR WE EXPECT TO HAVE EVEN MANY MORE SERVING AS LEADERSHIP GIVERS. ALSO GREG BOWLS AND BEN ORNELIS ARE COORDINATING THE CAMPAIGN CITYWIDE AND WE HAVE OVER 300 VOLUNTEERS FROM THROUGHOUT THE CITY THAT ARE INVOLVED AND I WANT TO EXPRESS OUR APPRECIATION TO ALL OF THEM AND ASK ALL OF OUR EMPLOYEES TO BE AWARE OF THE CAMPAIGN, GIVE IT SERIOUS CONSIDERATION, WE NEED YOUR HELP TO BE SUCCESSFUL AND WE APPRECIATE ALL OF WHAT YOU DO FOR THE CITY OF AUSTIN. THANK YOU. [APPLAUSE].

>>MAYOR WATSON: THANK YOU, GUYS. GREAT TO SEE YOU. BE IT KNOWN BY THESE PRESENTS THAT I, KIRK WATSON, MAYOR OF THE CITY OF AUSTIN, TEXAS, DO HEREBY PROCLAIM OCTOBER 21, 1999, AS FARIA ''DAY AND CALL ON ALL CITIZENS TO JOIN ME IN RECOGNIZING THAT THIS PROVIDES WORKSHOPS FOR SMALL BUSINESSES, STUDENTS IN THE COMMUNITY. THAT FEATURED TOPICS INCLUDING HUB PROCUREMENT, HUB CONSTRUCTION, M.B.E., W.B.E. CERTIFICATION, FINANCE, EMPLOYMENT AND ACADEMIC ADMISSIONS AND THE HISPANIC CHAMBER OF COMMERCE OF AUSTIN-TRAVIS COUNTY ARE TO BE COMMENDED FOR PROVIDING THIS CAREER DEVELOPMENT FAIR FOR OUR FINE CITIZENS AND IT'S SIGNED BY ME AND THANK YOU FOR ALL YOU DO IN OUR COMMUNITY. REALLY APPRECIATE IT. [APPLAUSE]. 6.

>> THANK YOU VERY MUCH, MR. MAYOR. THANK YOU COUNCILMEMBERS AS WELL AS MR. CITY MANAGER. WE HOPE THAT ALL CITIZENS IN AUSTIN, PARTICULARLY THE MINORITY AND WOMEN POPULATION TAKE ADVANTAGE OF THE BUSINESS AND CAREER DEVELOPMENT OPPORTUNITIES AVAILABLE AT THIS EVENT ON OCTOBER 21ST. THE EVENT WILL BE FROM 11:30 TO 6:00 AS THE MAYOR INDICATED. THERE IS MANY OPPORTUNITIES TO TALK ABOUT PROCUREMENT, TALK ONE ON ONE WITH EMPLOYERS, CAREER ADVISORS. SO WE REALLY HOPE EVERYONE TAKES ADVANTAGE OF THE OPPORTUNITIES. ADMISSION IS FREE. THERE ARE SEVERAL WORKSHOPS THAT WILL BE OCCURRING THAT DAY AND ADMISSION TO ALL THOSE WORKSHOPS ARE FREE. IT IS OPEN TO THE PUBLIC. AGAIN, IT IS ON OCTOBER 21ST FROM 11:30 TO 6:00 AT PALMER AUDITORIUM. WE APPRECIATE ALL OF YOUR SUPPORT AND ON BEHALF OF THE BOARD WE THANK YOU ALL. [APPLAUSE].

>>MAYOR WATSON: THANK YOU, GUYS. WHEN WE TALK ABOUT LEADING CORPORATE CITIZENS IN THE CITY, ONE OF THOSE CORPORATE CITIZENS IS H.E.B. AND IT'S ALWAYS AT THE FOREFRONT. H.E.B. STEPS UP HUNDREDS OF TIMES EACH YEAR FOR VARIOUS COMMUNITY CAUSES AND TODAY WE GET THE GREAT OPPORTUNITY -- COME ON UP -- TO TIP OUR HATS ONCE AGAIN TO OUR VALUED PARTNERS. H.E.B. DIDN'T FLINCH WHEN APPROACHED WITH THE IDEA OF DOING SOMETHING FOR OUR LIBRARIES IN AUSTIN. KVUE-24, CHANNEL 24 DIDN'T FLINCH WHEN WE NEEDED A MEDIA SPONSOR SO WE HAD A VERY SUCCESSFUL BUCKS FOR BOOKS CAMPAIGN AS A RESULT OF PEOPLE BEING WILLING TO STEP ON. SO ON BEHALF OF THE CITY, ASBESTOS MAYOR WANT TO THANK YOU ALL -- I AS MAYOR WANT TO THANK ALL YOU AND I WILL INTRODUCE KATE BROWN FROM H.E.B. TO MAKE A VERY SPECIAL PRESENTATION TO OUR LIBRARIES AND I'LL HAVE THE DIRECTOR AND J. J. BASKIN, THE PRESIDENT OF THE AUSTIN LIBRARY FOUNDATION STEP UP TOO. THANK YOU.

>> THANK YOU, MAYOR WATSON. I CAN'T STRESS REALLY THAT H.E.B. WHILE WE DID OUR PART FOR THIS, THIS WAS REALLY OUR CUSTOMERS WHO DID THIS BY -- DURING THE MONTHS OF AUGUST AND SEPTEMBER THEY TORE OFF ONE, TWO OR THREE DOLLAR COUPONS TO RAISE THESE FUNDS WHICH WILL HELP INCREASE THE HOLDINGS PARTICULARLY IN THE CHILDREN'S AREAS AT PUBLIC LIBRARIES THROUGHOUT AUSTIN AND CENTRAL TEXAS. SO ON BEHALF OF OUR CUSTOMERS AND OUR 7,000 PARTNERS HERE IN AUSTIN AREA, WE WOULD LIKE TO PRESENT THIS CHECK FOR $30,000 TO THE --. [APPLAUSE].

>> -- TO THE AUSTIN PUBLIC LIBRARY FOUNDATION.

>> I AM VERY PLEASED TO ACCEPT THIS CHECK ON BEHALF OF THE AUSTIN PUBLIC LIBRARY AND THE OTHER CENTRAL TEXAS LIBRARIES WHO PARTICIPATED. THERE ARE SEVERAL PEOPLE WHO CONTRIBUTED TO THIS EFFORT AND I WOULD LIKE TO TAKE JUST A MOMENT TO ACKNOWLEDGE THEM. TO KATE BROWN AND THE MANAGE H.E.B. FOR HOFPTING THE BUCKS FOR BOOKS CAMPAIGN, WHICH IS USE ONE OF THE MANY EXAMPLES OF H.E.B.'S LEADERSHIP IN CORE OPERATE PHILANTHROPY. KVUE-24, THAD ROSENBROOK, MARK MURRAY. IT WAS BEAUTIFULLY DONE. TO DAVE MATUSTIC OF THE CITY OF AUSTIN PUBLIC INFORMATION OFFICE WHO MADE SURE THAT A CONVERSATION THAT HE HAD WITH KATE BROWN DURING AUSTIN CITY LIMITS BECAME A REALITY AND TURNED INTO SOMETHING WONDERFUL FOR LIBRARIES IN CENTRAL TEXAS. TO THE MORE THAN 40 VOLUNTEERS WHO VISITED THEIR NEIGHBORHOOD H.E.B. TO MAKE SURE THAT THE BUCKS FOR BOOKS COUPONS WERE AVAILABLE AND READY FOR CHECK OUT AT THE CHECKOUT STANDS. AND TO THE THOUSANDS OF H.E.B. CUSTOMERS WHO ADDED A LITTLE TO THEIR GROCERY BILL EVERY WEEK BECAUSE THEY BELIEVE THAT BOOKS IN LIBRARIES ARE IMPORTANT TO THEIR COMMUNITY. THANK YOU. [APPLAUSE].

>> PHILANTHROPY IS REALLY AT THE HEARTED OF OUR LIBRARY SYSTEM. WE HAVE A LIBRARY DAY BECAUSE THE AMERICAN ASSOCIATION OF WOMEN DONATED BOOKS TO AUSTIN AND TODAY PHILANTHROPY IS THE HEART OF MAKING OUR LIBRARY GREAT. THREE WEEKS AGO WE ANNOUNCED THE LARGEST DONATION IN THE HISTORY OF THE AUSTIN PUBLIC LIBRARY, $A 500,000 FROM SUSAN AND MICHAEL DELL. TODAY WE ARE ANNOUNCES THE MOST INDIVIDUAL CONTRIBUTION WHERE OVER 10,000 PEOPLE GHAF AT THE CHECKOUT STAND. THESE DOLLARS WILL BE THE FIRST MATCHING DOLLARS TOWARDS THE LIBRARY FOUNDATION'S EFFORT TO RAISE $500,000 FOR BOOKS TO MATCH THE CONTRIBUTION THAT THE DELLS HAVE DONE AND ALSO THE PARTNERSHIP THAT THE CITY HAS DONE IN CREATING THE WIRED FOR YOUTH CENTERS THREE WEEKS AGO DURING THE BUDGET. SO THANK YOU ON THE MAYOR AND COUNCIL FOR MAKING THAT POSSIBLE AND TO STAFF AS WELL. TO H.E.B., KVUE-24 AND ALL THE GENEROUS SHOPPERS, THANK YOU VERY MUCH. [APPLAUSE].

>>MAYOR WATSON: BEFORE WE GO TO OUR MUSIC, I WANT TO RECOGNIZE A COUPLE OF SPECIAL GUESTS WE HAVE HERE TODAY. WE HAVE SOME KIDS THAT ARE HERE ON A FIELD TRIP AND I WANTED YOU ALL TO STAND UP, EVERYBODY THAT IS HERE, THESE FOLKS ARE WITH US TODAY FROM THE LEGACY OAKS CHRISTIAN SCHOOL AND WE REALLY APPRECIATE YOU BEING WITH US AND SPENDING TIME WITH US. [APPLAUSE]. THANK YOU ALL. AND NOW IT IS TIME FOR A LITTLE MUSIC. TODAY WE HAVE A GREAT HONOR, WE HAVE THE HONOR OF LISTENING TO AN ARTIST THAT MANY CONSIDER TO BE THE GOD MOTHER OF AUSTIN ROCK. SUSAN PERSKIN HAS BEEN A PART OF THE AUSTIN MUSIC SCENE FOR OVER 30 YEARS. SHE AND HER HUSBAND SANG ON THE FIRST MAJOR LABEL RECORDING BY AN AUSTIN GROUP, TAKE ME TO THE MOUNTAINS, RELEASE UNDERSTAND 1970 ON CAPITAL RECORDS. IN THE SUMMER OF 1970, SHE HELPED CO-FOUND THE WORLD FAMOUS ARMADILLO WORLD HEADQUARTERS HERE IN AUSTIN, TEXAS AND SHE CONTINUES TO SPREAD HER MUSICAL WEALTH THROUGH THE AUSTIN AREA AS A VERY ACTIVE VOCALIST AND SONG WRITER SO I'M PLEASED TO HAVE YOU HELP ME WELCOME SUSAN PERSKIN. [APPLAUSE]. WHILE THEY WERE SETTING UP, I AM PROUD TO PROCLAIM OCTOBER 7TH, 1999, AS SUSAN PERSKIN DAY IN AUSTIN AND CALL ON ALL CITIZENS TO JOIN ME IN RECOGNIZING THE MANY OUTSTANDING CONTRIBUTIONS BY THE LOCAL MUSIC COMMUNITY TOWARD THE DEVELOPMENT OF AUSTIN, SOCIAL AND CULTURAL DIVERSITY AND RECOGNIZING THE DEDICATED EFFORTS OF ARTISTS WHICH FURTHER AUSTIN'S STATUS AS THE LIVE MUSIC CAPITAL OF THE WORLD AND IT'S SIGNED BY ME, KIRK WATSON, MAYOR OF THE CITY OF AUSTIN, LADIES AND GENTLEMEN, SUSAN PERSKIN AND HER HUSBAND SPANNED SPENCER. (music) (music) (music) (music) [APPLAUSE].

>>MAYOR WATSON: LET US KNOW WHERE YOU WILL BE PLAYING SO PEOPLE CAN COME HERE YOU.

>> [INAUDIBLE].

>> YEAH, WE'RE WORKING ON A CD, IT'S GOING TO BE CALLED TEMPLE OF ROCK AND ROLL, SHOULD BE OUT SOON, ASAP.

>>MAYOR WATSON: WELL, THANK YOU ALL FOR BEING WITH US TODAY. [APPLAUSE].

>>MAYOR WATSON: WILL YOU PLEASE RISE AND JOIN WITH US IN THE DELIVERY OF OUR INVOCATION, DELIVERED BY THE REVEREND CLYDE GRUBS OF THE FIRST UNITARIAN UNIVERSALIST CHURCH. THANK YOU FOR BEING WITH US.

>> OH, MYSTERIOUS SOURCE OF LIFE AND LOVE, WE SEEK YOU IN THE DEPTHS OF OUR HEARTS. YOU WHO HAVE BEEN CALLED BY MANY NAMES, YOU WHO LOVE THE GIVERS OF ALL THOSE NAMES, WE ASK THAT HEARTS BE OPENED TO YOU. WHEN THE TROUBLES OF THIS WORLD WEIGH HEAVILY ON OUR MINDS, WHEN WE HEAR HARD NEWS, THE REVELATIONS THAT SHOCK AND DISCOMFORT US, LET US BE PRESENT, BECAUSE ONLY BY KNOWING THE TRUTH CAN WE KNOW THAT YOU ARE WITH US IN THOSE TIMES. MAY YOUR GIFT OF COURAGE REMAIN WITH US. MAY YOUR GIFT OF LOVE RENEW AND COMFORT US IN THAT TIME OF GROWING AND MAY WE KNOW MORE AUTHENTIC AWARENESS SO THAT OUR THOUGHTS INDEED UNITE IN YOUR SERVICE. MAY THIS MAYOR AND THIS COUNCIL BE GUIDED IN WISDOM AND MAY THE WORK OF THESE GOOD PEOPLE BE BLESSED BY THE GRACE THAT IS THE GIFT OF LEADERSHIP. MAY THEY ALWAYS BE RENEWED IN FAITH IN WHICH GOOD AND NOBLE IN ALL OF THE PEOPLE OF THIS GREAT CITY. AND LET US BE GUIDED IN THEIR WORK FOR THE COMMON GOOD. MAY THEY HAVE HOPE IN THE FUTURE OF THIS COMMUNITY AND MAY THAT HOPE GROW SO THAT THE QUALITY OF LIFE OF ALL OF THE PEOPLE IS BLESSED. MAY THE LOVE THAT HAS BEEN GIVEN TO THEM BECOME MANIFEST IN ALL OF THEIR DELIBERATIONS. LET US EMBRACE THE SILENCE WITH THE PRAYERS OF OUR HEARTS. AMEN.

>>MAYOR WATSON: AMEN. REVEREND, THANK YOU VERY MUCH FOR BEING WITH US TODAY.

>>MAYOR WATSON: I'LL CALL BACK TO ORDER FOR THE PUBLIC SESSION OF OUR COUNCIL MEETING THE COUNCIL MEETING OF -- THE REGULAR MEETING OF THURSDAY, OCTOBER 7, 1999. LET ME ASK A QUESTION. BECAUSE OF THE HOUR OF THE DAY, LET ME ASK, I'M GOING TO CALL OUT -- I'M BASICALLY GOING TO CALL ROLL AND SEE IF SOME FOLKS ARE HERE. RICHARD TROXELL, I SAW HIM HERE. BETTY DAVIS. GOOD. CLARE BERRY. MIKE ALEXANDER. JIM WALKER. LORENE MOORE. DIANE KANTOR. JOHN KUNKEL. PATRICK GOETZ. GOETZ. GOETZ. PATRICK BROTHERS. COUNCIL, ALTHOUGH I SAID WE WOULD PROBABLY GO STRAIGHT TO THE WATER AGREEMENT, BECAUSE WE HAVE SO MANY OF THESE PEOPLE HERE, I'M GOING TO BACK OUT OF THAT AGREEMENT AND WHAT I WILL DO IS WE'LL GO TO GENERAL CITIZENS COMMUNICATIONS FIRST AND LET THESE FOLKS SPEAK. MR. TROXELL, FOLLOWED BY BETTY DAVIS AND THEN CLARE BERRY.

>> GOOD AFTERNOON. MY NAME IS RICHARD TROXELL. I AM --. [BUZZER SOUNDS]. -- PRESIDENT OF HOUSE THE HOMELESS. [LAUGHTER] DOES THE MAYOR HAVE SOMETHING TO SAY DIRECT TLI TO ME?

>>MAYOR WATSON: NO.

>> I AM NOT SURPRISED. TODAY I WOULD LIKE TO SPEAK DIRECTLY TO MY FELLOW CITIZENS HERE IN AUSTIN. I WOULD LIKE TO SHARE A SINGLE THOUGHT WITH YOU. AND THAT THOUGHT IS THAT HOMELESSNESS DESCRIBES A CURRENT LIVING CONDITION ONLY, NOT A PERSON'S CHARACTER OR THEIR MORAL VALUES. NOT A PERSON'S CHARACTER OR THEIR MORAL VALUES. JUST A LIVING CONDITION. UNDERSTAND THAT THE FEDERAL MINIMUM HOURLY WAGE WILL NOT GET YOU INTO HOUSING IN AUSTIN. IN AUSTIN THERE ARE NOT ENOUGH AFFORDABLE HOUSING RESOURCES FOR THOSE WHO SEEK THEM. WE MUST REPEAL THE NO CAMPING ORDINANCE FOR IT ONLY SERVES TO PUNISH PEOPLE FOR THEIR ECONOMIC STATUS. AND ACTS ONLY TO WORSEN THE CURRENT LIVING CONDITIONS OF THESE CITIZENS. IN THE BRAVE WORDS OF CITY COUNCILMEMBER GUS GARCIA, I ADMIT IT, I MADE A MISTAKE, THE NO CAMPING ORDINANCE HASN'T WORKED. WE THE CITIZENS OF AUSTIN SAY THAT IT MAKES NO SENSE TO GO TO THE CHURCH AND HEAR THE WORDS OF GOD ON SUNDAY ONLY TO PASS LAWS AGAINST OUR FELLOW CITIZENS LIKE THIS ONE ON THURSDAY. REMEMBER, HOMELESSNESS DESCRIBES ONLY A CURRENT LIVING CONDITION, NOT A PERSON'S CHARACTER OR THEIR MORAL VALUES. PLEASE REPEAL THE NO CAMPING ORDINANCE. HOUSE THE HOMELESS.

>>MAYOR WATSON: THANK YOU, MR. TROXELL. [APPLAUSE].

>>MAYOR WATSON: BETTY DAVIS. BETTY DAVIS.

>> HERE I AM.

>>MAYOR WATSON: OKAY. THANK YOU. MR. ALEXANDER IF YOU WILL GO AHEAD AND MAKE YOUR WAY TO THE MICROPHONE. I HAVEN'T SEEN MS. BERRY, BUT IF SHE COMES IN I'LL CALL ON HER.

>> TO THE MAYOR AND COUNCIL WOMEN, TODAY HEIM HERE, I WAS TO TALK ABOUT THE BANNING OF THE CITIZENS OVERSIGHT COMMITTEE. I DO UNDERSTAND AT THIS TIME THAT YOU ALL HAVE APPOINTED A GROUP, LIKE A TASK FORCE SO TO SPEAK, AS TO COME BACK AND REPORT TO YOU AS TO WHETHER OR NOT THEY FEEL THAT THIS OVERSIGHT COMMITTEE SHOULD BE BANNED. WELL, IN LIGHT OF THE THINGS THAT HAVE HAPPENED WITH THE AUSTIN POLICE DEPARTMENT AND THEIR INVESTIGATORS AND THE DISTRICT ATTORNEY'S OFFICE AND THE -- AND NOW THE FEDERAL AND COUNTY AGENCY, FAR BE IT FOR ME TODAY TO SHINE ANY NEGATIVE LIGHT ON THE AUSTIN POLICE DEPARTMENT, BUT I DO -- WOULD LIKE TO LEAVE YOU WITH THIS THOUGHT AND EVEN WHEN THEY DO -- WHEN THAT COMMITTEE DOES COME BACK BEFORE YOU ON OCTOBER 27TH, THAT IN ORDER FOR YOU TO BAN A CITIZENS GROUP THAT WILL OVERSEE ITS CITIZENS, WHERE THEY WILL HAVE A VOICE TO GO AND PLACE COMPLAINTS IN REFERENCE TO THE AUSTIN POLICE DEPARTMENT, AND WHERE THEIR CIVIL RIGHTS WILL BE PROTECTED IN ORDER FOR YOU TO BAN SUCH A COMMITTEE OR GROUP, IT WOULD BE A TRAVESTY. THANK YOU. [APPLAUSE].

>>MAYOR WATSON: THANK YOU, MA'AM. CLARE BERRY. MR. ALEXANDER, IF YOU WANT TO GO AHEAD.

>> CAN I PASS THESE OUT? MY NAME IS MIKE ALEXANDER. I'VE TALKED TO YOU ALL BEFORE ABOUT NOISE, I'VE HAD AN UNUSUAL NOISE PROBLEM NEXT TO MY HOUSE I WANTED SOME HELP ON CONCERNING VEHICLES. IN ONE UNINTENTIONAL CASE A COMMERCIAL DELIVERY TRUCK MIGHT ARRIVE AT 7:30 IN THE MORNING TO A NEARBY RESTAURANT AND SIT THERE WITH ITS ENGINE RUNNING FOR AN HOUR OR HOUR AND A HALF WAITING FOR THE STORE TO OPEN FOR DELIVERIES. IT MAKES IT IMPOSSIBLE TO SLEEP, OF COURSE, AND IRONICALLY I SAW THE DRIVER TRYING TO SLEEP IN THE CAB. BUT IN ANOTHER ACTUAL AND APPARENTLY INTENTIONAL CASE, A NEARBY STORE THAT I HAVE BEEN HAVING SOME PROBLEMS WITH AND HAVE TALKED TO YOU BEFORE THEY ARE PARKING A REFRIGERATION TRUCK DIRECTLY IN FRONT OF MY HOUSE AND LEAVE THE REFRIGERATION UNIT RUNNING AND WALK AWAY FROM IT. THESE UNITS ARE AS LOUD AS SEVERAL LAWN MOWERS COMBINED. SURPRISINGLY IN THIS CASE THE POLICE GAVE THEM A PRETTY GOOD SCARE, BUT THEY COULDN'T ACTUALLY CITE THAT PARENT ACTION OF HARASSMENT AGAINST THEM SO I WANTED TO ASK FOR A POTENTIAL ORDINANCE THAT WOULD ADDRESS THIS IN THE FUTURE. THERE'S A TRAFFIC ORDINANCE 165-10 REQUIREMENTS FOR COMMERCIAL DELIVERY VEHICLES, I WANTED TO ASK THE FOLLOW PARAGRAPH MIGHT BE CONSIDERED THE SEX OR SOME VARIATION OF IT, THAT NO COMMERCIAL DELIVERY VEHICLE SHALL BE LEFT PARKED WITH ITS ENGINE OR EQUIPMENT RUNNING THAT DISTURBS THE PEACE OF A NEARBY RESIDENCE UNLESS THE VEHICLE IS CURRENTLY MAKING A DELIVERY TO A DESTINATION CURRENTLY OPEN TO ACCEPT DELIVERIES. YOU SHOULDN'T JUST HAVE TRUCKS SITTING AROUND RUNNING AND IN THE CASE WHERE IT'S USING THE TOOL FOR HARASSMENT AS IT SEEMED IN THIS CASE IT WOULD GIVE THE POLICE MORE POWERFUL AND DIRECT TOOL TO ADDRESS THAT KIND OF PROBLEM. AND JUST ON THE SIDE AS A GENERAL POINT OF INTEREST, I'VE BEEN RESEARCHING NOISE ACROSS VARIOUS CITIES AND I FOUND IN THE CITY CODES OF 15 CITIES IN THE STATE OF TEXAS A VERY INTERESTING STATEMENT I THOUGHT, IF I COULD READ IT TO YOU, IT'S A ONE SENTENCE LINE. IT SAYS ANY NOISE OF SUCH CHARACTER, INTENSITY AND CONTINUED DURATION WHICH SUBSTANTIALLY INTERFERES WITH THE COMFORTABLE ENJOYMENT OF PRIVATE HOMES BY PERSONS OF ORDINARY SENSIBILITIES IS HEREBY DECLARED TO BE A NEW SAN ANSWER IS HEREBY PROHIBITED. YOU CAN FIND THE SENTENCE VERBATIM IN ABOUT 15 CITIES INCLUDING FORT WORTH, WEST LAKE HILLS, CORPUS CHRISTI, NEW BRAUNFELS AND OTHER VARIOUS CITIES. RELEASE ON THIS -- JUST AS A POINT OF INTEREST BECAUSE THE AUSTIN CODE IS NOT PARTICULARLY STRONG IN THE CASE OF NOISE AT THE MOMENT, POLICE ON THIS ONE CASE OF COMMERCIAL DELIVERY VEHICLE NOISE, WHICH IS VERY UNNECESSARY, I WANTED TO ASK YOU TO CONSIDER AN ORDINANCE TO ADDRESS THAT IN THE FUTURE. THANKS.

>>MAYOR WATSON: THANK YOU. [APPLAUSE].

>>MAYOR WATSON: JIM WALKER. FOLLOWED BY LORENE MOORE.

>> HI, THANK YOU ALL FOR LETTING ME GRAB A COUPLE SECONDS OF YOUR TIME. THE HAT I'M WEARING RIGHT NOW IS ACTUALLY CHAIR OF THE STEERING COMMITTEE OF THE CHERRYWOOD NEIGHBORHOOD ASSOCIATION, AND I WANTED TO LET YOU KNOW AND GERARD IS GOING TO HAND OUT SOME PACKETS HERE TO LET YOU KNOW ABOUT THE KIND OF DOCUMENTED HISTORY. OUR ORIGINAL INTENT OF SIGNING UP FOR THIS CITIZENS COMMUNICATION WAS TO PERHAPS OPPOSE AN ELECTRICAL SUBSTATION THAT WAS GOING ON IN OUR NEIGHBORHOOD. I'M PLEASED TO SAY THAT OUR INITIAL REACTION TO THAT, AS YOU WILL SEE IN THE PAPERS, AUSTIN ENERGY RESPONDED TO AND WAS SENSITIVE TO AND ESPECIALLY JUDY FOWLER AND MARIO ESPINOZA, I WOULD LIKE TO MENTION THEM AND THEY HAVE MET WITH US AND ARE WORKING WITH US TO FIND WHERE MIGHT BE A GOOD LOCATION IN OUR NEIGHBORHOOD FOR A NEW ELECTRICAL SUBSTATION OF A NEW DESIGN AS WELL, MORE APPROPRIATE FOR URBAN NEIGHBORHOODS. SO WHAT WE'RE SAYING IS NOT -- WE'RE NOT SAYING NOT IN OUR NEIGHBORHOOD, BUT WE'RE ALSO NOT SAYING PUT IT ANYWHERE YOU WANT, IF THAT MAKES ANY SENSE. SO I JUST WANTED TO LET YOU ALL KNOW WHERE THAT WAS AT. WE'RE ACTUALLY HAVING ANOTHER MEETING WITH THEM THIS AFTERNOON AND WE'RE STILL WORKING ON THE CRITERIA THAT THEY HAVE AND THE CRITERIA WE THE NEIGHBORHOOD HAS FOR WHERE THAT MIGHT GO. I APPRECIATE THE TIME AND LOOK FORWARD TO GIVING YOU AN UPDATE ON IT AT SOME POINT IN THE FUTURE. THANKS A LOT.

>>MAYOR WATSON: THANK YOU. LORENE MOORE. DIANE IN A KANTOR. IF YOU WILL MAKE YOUR WAY TO THIS FIK PHONE.

>> THANK YOU, MR. MAYOR AND CITY COUNCILLMEMBERS FOR THIS OPPORTUNITY TO ADDRESS YOU ON AN ISSUE THAT CONCERNS MANY OF US. MY NAME IS LORENE MOORE AND FOR THE PAST THREE YEARS I'VE BEEN A CITIZEN HERE OF AUSTIN. I'LL BE SPEAKING ABOUT THE PROPOSED BAN ON EXOTIC ANIMAL ACTS IN AUSTIN. IN CONTRAST TO THE -- BY THE WAY, MY INFORMATION IS TAKEN FROM A WEBSITE, THAT'S CIRCUS, WWW.CIRCUS.COM. IN CONTRAST TO THE GLITTER ASSOCIATED WITH CIRCUMSTANCE US, PERFORM NG ANIMALS LIVES ARE PRETTY MISERABLE. BECAUSE ANIMALS DO NOT NATURALLY RIDE BIKES, JUMP THROUGH RINGS OF FIRE, WHIPS AND OTHER TOOLS ARE OFTEN FORCED TO MAKE THEM PERFORM T SMALLER THE CIRCUS THE MORE LIMITED THE ANIMAL'S ACCESS MAY BE TO FOOD, WAER AND VETERINARY CARE. BUT WHATEVER THE SIZE OF THE CIRCUS THE ANIMALS INEVITABLY SUFFER. SIZE AND STRENGTH OF ELEPHANTS, MOST TRAINERS RELY ON CHAINS AND FEAR TO MAKE THEM OBEY. SOME ELEPHANTS SPEND ALMOST THEIR WHOLE LIVES IN CHAINS. THE WELL KNOWN DUMBO HAD CHANCE THAT RAN FROM HIS TUSK TO HIS FEET. IN THE WILD THE LIFE EXPECTANCY OF ELEPHANTS IS THE SAME AS OURS. IN THE CIRCUS MANY OF THEM DIE PREMATURELY OF DISEASE AND THE STRESS OF CONFINEMENT. ELEPHANTS AND CIRCUMSTANCE KUSZ ARE REBELG IN ATTEMPT TO ESCAPE THEIR SAD EXISTS. SINCE 1990, ELEPHANTS HAVE KILLED AT LEAST 39 AND INJURED MANY MORE. ONE ELEPHANT KILLEDDER TRAINER AND INJURED SPECTATORS BEFORE BEING GUN DOWN IN DOWNTOWN HONOLULU. IN 1994, AN OFFICER WHO HAD TO SHOOT 47 ROUNDS INTO JANET, AN ELEPHANT WHO CHARGED OUT OF THE GREAT AMERICAN CIRCUS ARENA NOTED I THINK THESE ELEPHANTS ARE TRY TO TELL US ZOOS AND CIRCUMSTANCE US ARE NOT WHAT GOD REAID US FOR. BUT WE ARE NOT LISTENING. MANY COMMUNITIES ARE REALIZING THAT NO PLACE IN THE CIRCUS. BECAUSE OF THIS AND INHERENT RISK TO SAFETY MANY TOWNS ARE CONSIDERING BANS ON ANIMAL ACTS. CURRENTLY THERE ARE MANY BANS ON ANIMAL ACTS IN THE UNITED STATES. CALIFORNIA HAS SEVERE RYE STRIXZ AS DOES DELLA WEAR. STATEWIDE THERE IS NO CONTACT BETWEEN ANIMAL AND PEOPLE. NO ELEPHANT, CAMEL RIDES OR PHOTO OPSN FLORIDA THERE IS NO STATEWIDE NO PUBLIC CONTACT BETWEEN BIG CATS AND PEOPLE, NO PHOTO SHOOTS N GEORGIA, NO PUBLIC CONTACT BETWEEN ANIMALS AND PEOPLE. MA MAINE, SAME, STATE WHITE, NO PUBLIC CONTACT BETWEEN ANIMALS AND PEOPLE. THE SAME GOES FOR MASSACHUSETTS, MISSISSIPPI, MISSOURI, NEW JERSEY. IN NEW YORK THERE IS A PROHIBITION OF THE USE OF ELECTRIC PRODS, SHOCKING DEVICES, NRANTION OR BUCKING STRAPS, SHARPENED SPURS OR BULL WHIPS. IN SOUTH CAROLINA THERE IS STATEWIDE PUBLIC DISPLACE OF CAPTIVE DOLPHINS. IN VIRGINIA --. [BUZZER SOUNDS].

>> THANK YOU FOR CONSIDERING THIS ISSUE AND WE URGE YOU TO VOTE FOR THE PROPOSED BAN OF EXOTIC ANIMAL ACTS IN AUSTIN.

>>MAYOR WATSON: THANK YOU VERY MUCH. [ONE MOMENT, PLEASE, WHILE CAPTIONERS CHANGE].

>> EXCITED WELL MEANING SPEC STAIRTS STARTLE THE ANIMALS. I HAVE WITNESSED TRAINERS HITTING THE ANIMALS BECAUSE THEY HAVE FRIGHTENED. IF THIS IS WHAT THEY DO WHEN HUNDREDS OF PEOPLE ARE WATCHING, I CAN'T IMAGINE WHAT THEY DO WHEN THEY WERE ALONE. THIS SUMMER WRING LINK BROTHERS HAD A CHILD OF 10 OR 13 WALKING A CHILD HIMSELF. IS THIS CHILD GOING TO PROTECT THE PUBLIC? LIVING CONDITIONS ARE PITIFUL, IF THEY ARE AREN'T PERFORMING THEY ARE CHAINED OR IN ANYONE TEE CHANGES. EXCEPT WHEN THEY PERFORM THEY LITERALLY CAN BARELY MOVE. THEY STAND IN THEIR OWN FECES AND URINE AND NEVER HAD A FREE STEP. WRINGLING IS ONE OF THE BETTER SITUATIONS, THE REST GET WORSE. THIS CAN CAUSE GREAT THREAT TO PUBLIC USE AND SAFETY. IT HAS LED TO MANY ANIMAL ATTACKS. IN THE LAST 10 YEARS THERE HAVE BEEN 37 DOCUMENTED CAPTIVATED ELEPHANT ATTACKS IN THE U.S. 12 CIRCUS ELEPHANTS HAVE DIED FROM UNNATURAL CAUSES. THEY ARE ENTERING OUR CROWDED CITIES THROUGHOUT THE YEARS. THEY SHOULD BE IN LARGE SANCTUARIES WITH PROFESSIONALS TO CARE FOR THEM AWAY FROM POPULATED AREAS. THEY ARE NOT EDUCATIONAL FOR CHILDREN. CHILDREN VIEW ANIMALS IN UNNATURAL, UNCLEAN CONDITIONS PERFORMING TRICKS THAT GO AGAINST THEIR NATURE. THEY TEACH CHILDREN A LACK OF RESPECT FOR WILDLIFE. TO TEACH THEIR CHILDREN ABOUT ANIMALS PARENTS CAN TURN ON PBS, DISCOVERY OR TAKE THEM TO THE AUSTIN ZOO, BLACK BEAUTY RANCH OR OTHER SANCTUARIES HERE IN TEXAS. MANY OTHER CITIES, STATES, EVEN COUNTRIES ARE BANNING THESE CRUEL DANGEROUS ANIMAL SHOWS. AUSTIN HAS A PROUD REPLICATION FOR BEING A FORWARD THINKING CITY, WE NEED TO CONTINUE TO BE A LEADER IN BANNING THREATS TO PUBLIC HEALTH AND SAFETY. THANK YOU.

>>MAYOR WATSON: THANK YOU, MA'AM. JOHN KUNKEL AND THEN PATRICK BROTHERS.

>> THANK YOU, MY ORIGINAL INTENT WAS TO TALK TO YOU ABOUT A SUBJECT OF WHICH I HAVE SPOKEN BEFORE, NAMELY THE RESIDENTIAL ALARM SYSTEM. I AM GOING TO DEFER THAT, THOUGH, UNTIL THE FOURTH BECAUSE WHAT YOU ARE ABOUT TO DISCUSS IS A WHOLE LOT MORE IMPORTANT THAN ALARM SYSTEMS. RELATIVE TO THE WATER SUPPLY FOR OUR CHILDREN AND GRANDCHILDREN. LET ME INSTEAD TAKE AN OPPORTUNITY TO TAKE A PAGE ON THE MAYOR'S BOOK AND BALANCE SOME OF THE CRITICISM THAT I HAVE DIRECTED YOUR WAY WITH RECOGNITION TO TWO OF YOU FOLKS ON THE DIAS. I WOULD DIRECT MY FIRST REMARK TO COUNCILMEMBER GARCIA WHOM I UNDERSTAND IS LEAVING THE COUNCIL. I JUST WANT TO SAY, GUS, YOU AND I MET DURING THE ANNEXATION HEARINGS WHEN YOU CONVINCED ME THAT YOU ARE REALLY ARE A LOT OLDER THAN I AM. I MUST CONFESS THAT I HAVE DISAGREED WITH SOME OF YOUR POSITIONS, PARTICULARLY ONE ON RECONSIDERING APPOINTMENTS TO COMMITTEES. ON THE OTHER HAND, I WANT TO GIVE YOU CREDIT, SIR. AND THAT IS IN AN ERA OF VOTER AND CITIZEN APATHY, YOU HAVE AT LEAST TAKEN THE TIME TO EXPRESS YOUR VIEWS FOR THE THINGS YOU BELIEVE IN, YOU HAVE INVESTED THE TIME, I CONGRATULATE YOU FOR THAT. I MIGHT ALSO SAY THAT I AM GOING TO WELCOME YOU TO THE 3 MINUTE SIDE OF THE DIAS WHEN YOU STEP DOWN. THE SECOND COMMENT --.

>>MAYOR WATSON: LET ME SAY IF I HAPPEN TO BE MAYOR AT THE TIME I AM GOING TO REALLY WELCOME WHEN THE BUZZER GOES OFF WHEN HE'S TALKING ABOUT.

>> AS A MATTER OF FACT MY SECOND COMMENT IS DIRECTED TO YOU, MR. MAYOR.

>> HURRICANES ON.

>> I WANTED TO SAY ON BEHALF OF OUR NEIGHBORS, WE APPRECIATE YOU COMING TO OUR FIRE STATION OPENING.

>>MAYOR WATSON: SURE.

>> IT IS IN FACT A FINE BUILDING. NOT ONLY DO WE APPRECIATE YOUR ATTENDING, I HAVE LEARNED SINCE YOUR ATTENDANCE DID THERE THAT YOU TOOK A PERSONAL INTEREST IN ENSURING THE PROJECT WAS DONE ON TIME IN AN APPROPRIATE FASHION. I THINK IT WILL BE A CREDIT TO OUR COMMUNITY, I WANT TO THANK YOU FOR YOUR PERSONAL INVOLVEMENT ON BEHALF OF MYSELF AND OUR NEIGHBORS. I WILL TALK TO YOU AGAIN SOME OTHER TIME ABOUT HOME ALARM SYSTEMS.

>>MAYOR WATSON: THANK YOU, MR. KUNKEL, YOU STILL HAVE A MINUTE 10, IF YOU ARE ON THIS KIND OF A ROLL YOU PROBABLY OUGHT TO TAKE IT UP. THANK YOU VERY MUCH FOR BEING HERE. PATRICK BROTHERS. PATRICK BROTHERS? CLAIRE BARRY. CLAIRE BARRY? ALL RIGHT. LET ME ASK, IS THERESA REAL HERE? I SEE MR. PFEIFFER THERE, THE CHAIR OF THE RESOURCE MANAGEMENT COMMISSION, IF YOU WILL COME FORWARD AND DO THE BOARD AND COMMISSION REPORT FOR THE RESOURCE MANAGEMENT COMMISSION.

>> THANK YOU, MAYOR WATSON AND COUNCILMEMBERS. I PROBABLY HAVEN'T BEEN UP HERE FOR A FEW MONTHS, IT'S DIFFICULT COMING DURING THIS TIME. BUT I THINK THE ONLY TWO ISSUES THAT I HAVE TO REPORT TO YOU CONCERN BOTH THE LCRA WATER AGREEMENT AND THE SOUTHERN UNION GAS' TAKING OVER OF THE APPLIANCE REBATE PROGRAMS AS THEY RELATE TO GAS CONSUMING APPLIANCES. LET'S TALK ABOUT THAT ONE TO START OFF. THE COMMISSION CAUTIOUSLY AGREES WITH THE CON ACCEPT OF LETTING SOUTHERN UNION GAS TAKE OVER THE -- CONCEPT OF LETTING SOUTHERN UNION GAS TAKE OVER THE GAS REBATE PROGRAMS. WE WOULD LIKE THEM TO COME BACK TO US, SOUTHERN UNION GAS WITH A FEW MORE DETAILS ON HOW THEY ARE GOING TO MAINTAIN THE FREE WEATHERIZATION PROGRAM. MY REPORT TO YOU IS TO SAY THAT WE CAUTIOUSLY AGREE WITH THAT PENDING MORE STUDYING OF THE DETAILS. THE COMMISSION REGARDING THE LCRA WATER AGREEMENT DOES FEEL THAT THERE ARE ENOUGH QUESTIONS STILL THAT WE DON'T FEEL COMFORTABLE RECOMMENDING THAT AGREEMENT. AND WE WOULD AT THIS POINT NOT WHOLEHEARTEDLY DISAGREE WITH IT, BUT WE KNOW THAT THERE IS AN OPTION OF ONE YEAR MORE TO BUY SOME WATER RIGHTS TO PRESERVE THIS ISSUE FOR ANOTHER YEAR AND I KNOW WE ALL DON'T WANT ISSUES TO BE GOING ON AND ON AND ON, I JUST WANT TO REPORT TO YOU THAT WE ARE NOT IN WHOLEHEARTEDLY IN SUPPORT OF IT RIGHT NOW.

>>MAYOR WATSON: THANK YOU, MR. PFEIFFER. APPROXIMATE.

>>MAYOR WATSON: WELL, COUNCIL, WHAT I WILL DO IS WE DIDN'T MAKE IT EXACTLY THE TIME WE SET FOR A TIME CERTAIN, BUT WHY DON'T WE GO AHEAD AND TAKE UP THE PROPOSED AGREEMENT -- I TELL YOU WHAT, LET'S DO THE CONSENT AGENDA FIRST, THAT WAY IF WE HAVE ANY STAFF PEOPLE HERE ON THE CONSENT AGENDA WE CAN LET THEM GO BACK TO WORK. THE CONSENT AGENDA THAT I HAVE IS ITEM 32, 33, 34, 35, 36, 37, 39, 41, 42, 43, 44, 46, 47, 48, 50, 51, 52, 53, 54, 55, 56, 57, 58, AND THAT ITEM MIGHT BE PULLED, BUT I TELL YOU, WHAT LET'S PULL IT, WE WILL TAKE IT UP REAL QUICKLY, 57, 59, 60, 61, 62, 63, 64, 65, 71, 72 ON SECOND AND THIRD READING, 73 ON SECOND AND THIRD READING, 74, MAYOR PRO TEM, DO YOU STILL WANT TO PULL 74? I HAVE A NOTE HERE SOMEBODY SAYS IT'S BEEN WORKED OUT AND CAN NOW GO BACK TO CONSENT.

>>GOODMAN: WE JUST NEED TO REFER TO THE AGREEMENT THAT'S BEEN REACHED.

>>MAYOR WATSON: OKAY. THAT'S WHAT WE WILL DO. 74 WILL ALSO BE ON CONSENT. 75, 77 ON SECOND AND THIRD READING.

>>GARCIA: MAYOR. ON 76, WE COULD PUT THIS ON CONSENT FOR POSTPONEMENT.

>>MAYOR WATSON: OKAY POSTPONEMENT WILL BE UNTIL WHEN? NOVEMBER 4TH?

>>GARCIA: THAT WOULD BE FINE.

>>MAYOR WATSON: ALL RIGHT. POSTPONEMENT UNTIL NOVEMBER 4TH ON ITEM NO. 76, THE CONSENT MOTION. 77 WILL BE CONSENT ON SECOND AND THIRD READING, 78, 7779, 80, 81, 82, 83 CAN BE ON CONSENT, BUT THERE ARE A COUPLE OF CHANGES THAT NEED TO BE MADE, I WILL CALL ON THE MAYOR PRO TEM TO MAKE THOSE ITEMS.

>>GOODMAN: CAN WE GO BACK TO 75 FOR A SECOND?

>>MAYOR WATSON: YES, MA'AM.

>>GOODMAN: I HAD ASKED TWO QUESTIONS THAT WERE GOING TO BE LOOKED INTO, BUT WE NEEDED TO GET AHOLD OF THE APPLICANT AND I DON'T HAVE THE ANSWERS YET. CAN WE PUT IT ON HOLD?

>>MAYOR WATSON: WHO DO WE NEED TO --.

>>GOODMAN: I DON'T KNOW THE LEGALITIES OF THIS. TANGLE WOOD.

>>MAYOR WATSON: WE WILL COME BACK -- I AM GOING TO GO AHEAD AND PULL ITEM 75. 81, 82, 83 WITH THE CHANGES THE MAYOR PRO TEM IS GOING TO READ INTO THE RECORD. THEN ITEM NO. 94, BOARD AND COMMISSION APPOINTMENTS, ARTS COMMISSION MAXINE BARKIN,DY ANIAN HENDRICKS, BY SPELMAN, SHELBY KING BY COUNCILMEMBER GARCIA, ROBE RAMIREZ BY MAYOR PRO TEM GOODMAN. WE WILL COME BACK, WE HAVE A COUPLE OF ITEMS -- 15, 16, 17, WILL ALSO BE TAKEN UP ON CONSENT, BUT I AM GOING TO NEED TO DOUBLE CHECK. OKAY. ITEM NO. 125, IN THE AMOUNT NOT TO EXCEED $2 MILLION, BUT I AM GOING TO ASK THAT WE HAVE A BRIEF PRESENTATION OF WHAT THAT IS SINCE IT WAS DISCUSSED IN EXECUTIVE SESSION, SAME ON 16 AND 16. ANY -- 16 AND 17. ANY ITEMS THAT NEED TO BE ADDED OR TAKEN OFF THE CONSENT AGENDA?

>>SPELMAN: MAYOR, I WOULD LIKE TO REMIND YOU THAT WE HAVE TWO ITEMS WHEN WERE -- WHICH WERE SUBMITTED ON MONDAY FOR A SPECIAL CALLED MEETING. THEY COULD NOT BE ADDED TO THIS AGENDA FOR REASONS THAT I DO NOT FULLY UNDERSTAND. I BELIEVE IT'S ITEM 1 READY FOR A VOTE, ITEM 2 WE DON'T HAVE NAMES FOR THOSE TWO APPOINTMENTS YET. WE COULD HANDLE ITEM 1. I DON'T KNOW WHETHER WE COULD DO IT ON CONSENT.

>>MAYOR WATSON: I WILL CAME TO -- HAVE TO CALL TO ORDER THE SPECIAL CALLED MEETING. ANY OTHER ITEMS THAT CAN BE ADDED OR NEED TO BE TAKEN OFF THE CONSENT AGENDA?

>>GOODMAN: ON 75?

>>MAYOR WATSON: YES.

>>GOODMAN: I JUST WAS GIVEN INFORMATION ABOUT SOMETHING THE NEIGHBORHOOD PRESIDENT HAD TALKED ABOUT EARLIER, SO IT'S OKAY TO GO BACK.

>>MAYOR WATSON: OKAY.

>>SLUSHER: RUE WEED -- WOULD YOU READ THEM AGAIN?

>>MAYOR WATSON: YES. I WILL ASK FOR A MOTION THEN. 15, 16, 17, 32, 33, 34, 35, 36, 37, 39, 41, 42, 43, 44, 46, 47, 48, 50, 51, 52, 53, 54, 55, 56, 57, 58 AND WE ARE GOING TO NEED TO MAKE A MOTION ON WHO THOSE TWO MEMBERS ARE AS PART OF ITEM NO. 58, I AM ASSUMING THE MOTION WILL BE FOR THE REAPPOINTMENT OF COUNCILMEMBER SLUSHER AND COUNCILMEMBER GRIFFITH.

>>SLUSHER: I WAS GOING TO MOVE FOR YOU.

>>MAYOR WATSON: YOU MAY NOT BE RECOGNIZED ON THAT MATTER. [LAUGHTER]. BUT I NEED TO MAKE SURE WE ARE CLEAR ON THAT BEFORE I CALL FOR THAT MOTION. 59, 60, 61, 62, 63, 64, 65, 71, 72, 73, 74, I AM GOING TO CALL ON THE MAYOR PRO TEM IN A MOMENT TO MAKE AMENDMENTS, 75, 76 IS A POSTPONEMENT TO NOVEMBER 4TH, 77, 78, 79, 80, 81, 82, 83, AND I WILL ALSO CALL ON THE MAYOR PRO TEM ON THAT ITEM. THEN 94. COUNCILMEMBER GARCIA?

>>GARCIA: ON ITEMS 15 AND 17 FOR SURE, I DON'T KNOW ABOUT 16, THERE'S SOME AMOUNTS, DID YOU READ THOSE INTO THE RECORD?

>>MAYOR WATSON: I HAVE NOT DONE THAT YET TO FOLLOW MY UNOFFICIAL POLICY SINCE WE DISCUSSED THAT IN EXECUTIVE SESSION, I WANT TO HAVE A BRIEF PRESENTATION ABOUT EXACTLY WHAT IS OCCURRING IN THAT REGARD. AND THEN THE AMOUNTS WILL BE READ AS PART OF THAT MOTION.

>>LEWIS: MAYOR? I -- ON ITEM 38 AND 40, I WOULD LIKE TO MAKE A STATEMENT ON THOSE.

>>MAYOR WATSON: IS THERE A MOTION TO APPROVE THE CONSENT AGENDA AS I READ IT. MOTION MADE BY COUNCILMEMBER GARCIA, SECONDED BY COUNCILMEMBER SPELMAN. NOW LET'S GO TO DISCUSSION. MUZ PLUMBER. ON ITEM NO. 15, --.

>>SLUSHER: MAYOR I HAD A QUESTION ABOUT SOMETHING CALLED ON THE CONSENT AGENDA. NUMBER 71, LIMITED ADJUSTMENT FROM S.O.S. ORDINANCE, THAT'S ON CONSENT?

>>MAYOR WATSON: I MAY HAVE READ IT BUT IT'S MY UNDERSTANDING THAT ITEM WAS PULLED. IF I READ IT I APOLOGIZE.

>>SLUSHER: I THINK YOU DID. I WAS JUST CHECKING.

>>MAYOR WATSON: LET ME MAKE SURE FOR PURPOSES OF THE RECORD, WHATEVER I READ, COUNCILMEMBER GARCIA IF I READ ITEM NO. 71, DO YOU AGREE IT'S A FRIENDLY AMENDMENT TO PULL THAT ITEM.

>>GARCIA: SURE.

>>MAYOR WATSON: COUNCILMEMBER SPELMAN?

>>SPELMAN: SURE.

>>MAYOR WATSON: WITH THAT, ITEM NO. 15 IS AN ITEM THAT RELATES TO THE NOVEMBER '98 BOND PROPOSITION NUMBER 2, WHICH PEOPLE WILL REMEMBER WAS DISCUSSED GENERALLY AS THE DESTINATION PARKS TRAILS AND GREEN WAYS AND MS. PLUMBER IF YOU WOULD BRIEF DESCRIBE WHAT THIS ITEM DOES.

>> THIS ACQUISITION IS A DESTINATION PARK, IN THE SOUTHEAST AREA. IT -- WITH THIS ACQUISITION OF 227 ACRES IT WILL PUT TOGETHER A -- ABOUT A 600 ACRE DESTINATION PARK ALONG ONION CREEK. THIS TRACT IS LOCATED ON KNUCKLES CROSSING, WE ARE ACQUIRING IT FROM A LIMITED PARTNERSHIP KNOWN AS LA CADEUA IN THE AMOUNT OF $2 MILLION.

>>MAYOR WATSON: MOTION TO APPROVE. COUNCILMEMBER GARCIA, COUNCILMEMBER SPELMAN, IS IT CLEAR THAT YOUR MOTION IS FOR $2 MILLION?

>>GARCIA: YES.

>>MAYOR WATSON: ITEM NO. 16, MS. PLUMBER.

>> ITEM NO. 16 IS IN REGARDS TO YOUR MAY 2ND, 1998 BOND PROPOSITION KNOWN AS BARTON SPRINGS CLEAN DRINKING WATER IN THE AMOUNT OF $550,000 TO THE NATURE CONSERVANCY, WE ARE CONTINUING OUR RELATIONSHIP WITH THEM. THIS IS IN ADDITION TO THE AUTHORIZATION THAT WAS APPROVED AUGUST OF '98. THIS WILL ALSO ALLOW THE NATURE CONSERVANCY TO CONTINUE WORKING WITH US ON THE SALES OF THE LANDS THAT WILL HAVE CONSERVATION EASEMENTS WITH THEM.

>>MAYOR WATSON: ITEM NO. 17.

>> ITEM NO. 17. THIS IS A CONSERVATION EASEMENT. IT IS FROM THE -- IT'S ABOUT 396 ACRES. IT IS LOCATED ON CIRCLE DRIVE. THIS HAS GREAT CREEK ON IT. IT IS A SIGNIFICANT CONSERVATION EASEMENT FOR US. IT WILL HAVE A MANAGEMENT PLAN AND A DEVELOPMENT PLAN. THE DEVELOPMENT PLAN WILL CALL FOR FIVE PARTITIONS AT MOST, BUT ONLY TWO RESIDENTIAL DWELLINGS, 55,000 SQUARE FEET OF IMPERVIOUS COVER IS THE LIMIT, THEY ARE ABLE TO RESTORE A POLE BAR, CAR BIN, -- CABIN, ADJACENT TO EXISTING PARKLAND -- NOT PARKLAND, I'M SORRY WATER QUALITY.

>>MAYOR WATSON: ALL RIGHT. VERY GOOD. THOSE ARE -- JUST TO MAKE SURE WE ARE CLEAR FOR THE RECORD, THAT WOULD BE ON THE CONSENT AGENDA AS PRESENTED, COUNCILMEMBER GARCIA?

>>GARCIA: YES. GIVE ME THAT AMOUNT ON 17 AGAIN.

>> 17, 1,157,000.

>>MAYOR WATSON: ON 16 THE AMOUNT IS 550,000 DOLLARS.

>>GARCIA: THAT'S FINE.

>>MAYOR WATSON: MAYOR PRO TEM I WILL RECOGNIZE YOU ON ITEM NO. 74.

>>GOODMAN: I --.

>>MAYOR WATSON: DO YOU HAVE A COMMENT?

>>GOODMAN: MR. GUERNSEY HAS SOME AGREEMENT LANGUAGE THEY CAME TOGETHER ON SIGN, THE SQUARE FOOTAGE OF THE SIGN. MAYBE WE COULD READ THAT INTO THE RECORD.

>> MAYOR PRO TEM, AND COUNCIL, THERE WAS AN AGREEMENT THAT WAS MADE BY THE APPLICANT ON 74, AND THE NEIGHBORHOOD ASSOCIATION THAT AGREED TO LIMIT A SIGN TO A MAXIMUM AREA OF 128 SQUARE FEET WITH NO SIDE EXCEEDING 64 SQUARE FEET OF AREA, THAT WOULD BE A V-TYPE SIGN. THAT IT WOULD BE NO HIGHER THAN 8 FEET IN HEIGHT. THAT THERE SHALL BE DESIGNED AS A SOLID WALL TYPE AND THAT IT -- THERE'S SOME REFERENCES TO A BERM, I THINK WE CAN INCORPORATE THAT INTO AN ORDINANCE. THAT IS BEFORE YOU AS A -- AS A YELLOW SHEET ITEM IN YOUR PACKET.

>>MAYOR WATSON: ALL RIGHT. THAT WILL BE READ IN THE RECORD AND PART OF THE MOTION. IS THAT CORRECT, COUNCILMEMBER GARCIA?

>>GARCIA: RIGHT.

>>MAYOR WATSON: COUNCILMEMBER SPELMAN? ITEM NO. 83, MAYOR PRO TEM?

>>GOODMAN: YOU SHOULD HAVE A RESOLUTION THAT SAYS NUMBER 83 REVISION NUMBER TWO AT THE TOP ON YELLOW. I WOULD LIKE TO DRAW YOUR ATTENTION TO THE THIRD WHEREAS ON THE THIRD PAGE AND THE -- FIRST PAGE, SECOND WHEREAS AS WELL. THE REFERENCE IS TO CHILD CARE TRUST FUND. THIS AMENDMENT REMOVES THE WORD "TRUST" BECAUSE ALTHOUGH IT WAS BEING USED A LITTLE MORE EUPHEMISTICALLY, THERE ARE THINGS THAT GO WITH TRUST FUND AND THE WORD CAPITAL. WE ARE DELETING THE WORD TRUST AND WE WOULD ALSO LIKE TO ADD IN THE SECOND LINE OF THE FOURTH WHEREAS "INTENDS TO WORK WITH A QUALIFIED CONSULTANT," WE WOULD LIKE TO INTERJECT "DEVELOPMENT AND FUNDRAISING CONSULTANT", SO THAT IT WILL BE VERY CLEAR FOR SOME WHO WEREN'T WELL ACQUAINTED WITH THE DEFINITIONS WE WERE USING FOR THE BUDGET AMENDMENT. AND THIS CLEARS UP FOR THEM WHAT IT IS THIS PERSON IS SUPPOSED TO DO.

>>MAYOR WATSON: COUNCILMEMBER GARCIA DO YOU CONSIDER THAT A FRIENDLY AMENDMENT.

>>GARCIA: YES COUNCILMEMBER SPELMAN? THAT WILL BE A FRIENDLY AMENDMENT. COUNCILMEMBER LEWIS DID YOU HAVE A COMMENT ON THE CONSENT AGENDA?

>>LEWIS: ITEM 38 I PULLED AND ITEM 40. WE CAN LEAVE THEM OFF SINCE WE ALREADY HAVE A MOTION AND A SECOND.

>>MAYOR WATSON: IT WOULD BE EASY TO AMEND IF IT'S A FRIENDLY AMENDMENT.

>>LEWIS: I JUST WANTED TO MAKE A STATEMENT.

>>MAYOR WATSON: IF YOU WILL DO THAT. ON ITEMS NUMBER 38 AND 40, COUNCILMEMBER GARCIA IS THAT A FRIENDLY AMENDMENT.

>>GARCIA: I DIDN'T HEAR IT.

>>MAYOR WATSON: COUNCILMEMBER LEWIS IS INDICATING 38 AND 40 CAN BE PUT BACK ON. COUNCILMEMBER SPELMAN? I WILL RECOGNIZE COUNCILMEMBER LEWIS FOR A COMMENT.

>>LEWIS: THANK YOU. IN READING THE BACKUP, IT'S -- THERE'S A COUPLE OF THINGS ON ITEM NO. 38. ONE ITEM IN PARTICULAR THAT THE -- THAT BOTHERED ME WAS THAT THE BID WASN'T A SOLE