City Council Workshop or Special Called Meeting

CITY COUNCIL WORKSHOP MEETING WEDNESDAY - JANUARY 22, 2025 - 5:30 PM Notice of AGENDA City Council Chamber/Municipal Courtroom 2801 Ranch Road 1869 Liberty Hill, TX 78642 Diane Williams Jacquetta Thayer Crystal Mancilla Wade Ashley Amanda L Young Michael Helbing LIVE VIDEO ACCESS AND RECORDINGS The live video link will be on the City's Facebook page. Following the meeting, the link for the live meeting will be removed. The recording of the meeting will be placed on the City's webpage: www.libertyhilltx.gov PLEASE SILENCE YOUR CELL PHONES 1) CALL TO ORDER AND ESTABLISH QUORUM 2) REGULAR AGENDA a) Wastewater Rates Presentation Alex Doody, P.E. CDM Smith Engineering Liberty Hill WWMP Rate Workshop 3) ADJOURNMENT 1 The City Council, Boards, and Commissions reserve the right to reconvene, recess, realign, change the order of business, or adjourn into Execu ve Session at any me during the course of the mee ng, prior to adjournment, to discuss any item listed above, as authorized by Texas Government Code Sec on §551.071 (Consulta on with A orney), §551.072 (Delibera ons about Real Property), §551.073 (Delibera ons about Gi s and Dona ons), §551.074 (Personnel Ma ers), §551.076 (Delibera ons about Security Devices), and §551.087 (Development). In compliance with the Americans with Disabili es Act, the City of Liberty Hill will provide reasonable accommoda on for persons a ending mee ngs. To be er serve you, requests need to be received 48 hours prior to the meeting. Contact the City Secretary at 512-778-5449 – Extension 125. POSTING CERTIFICATION: I, ELAINE SIMPSON – CITY SECRETARY – CITY OF LIBERTY HILL certify that the attached notice of meeting was duly posted on the bulletin board at City Hall located at 926 Loop 332, Liberty Hill, Texas 78642 and on the City website (www.libertyhilltx.gov) on the ______ day of ____________________, 202_ at ______. Elaine Simpson – City Secretary. REMOVAL CERTIFICATION: I ELAINE SIMPSON – CITY SECRETARY – CITY OF LIBERTY HILL certify that the attached notice of meeting was removed from the bulletin board at City Hall located at 926 Loop 332, Liberty Hill, Texas 78642 on the ______ day of __________________, 202_ at _______. INITIALS _______ 2 CITY COUNCIL WORKSHOP CITY COUNCIL WORKSHOP MEETING WEDNESDAY - JANUARY 22, 2025 2801 Ranch Road 1869 - Liberty Hill AGENDA ITEM 2.a Wastewater Rates Presentation Alex Doody, P.E. CDM Smith Engineering 3 Liberty Hill Wastewater Collection and Treatment Systems Master Plan Master Plan Recommendations and Introduction to Wastewater and Sewer Rate Study Alex Doody, PE / CDM Smith Matthew Garrett / NewGen January 22, 2025 4 Agenda 1. Wastewater Master Plan ‐ Growth Projections ‐ Projects Requiring new Debt to be Issued within 5 years 2. Wastewater and Sewer Rate Analysis 3. Next Steps 5 2 Growth Projections and Recommended CIPs 6 10-Year Growth Projections ▬ Within 10 years, assumed buildout: ‐ All committed projects in LUE Tracking Sheet provided by City staff ‐ All vacant lots in existing subdivisions ‐ One vacant lot = one LUE ‐ Two high-density mixed-use developments in accordance with City’s Comprehensive Plan: ‐ Frontage area along US-183 and SH-29 ‐ Parcels near Larkspur to west of LS 31B Purple – Existing Parcels Orange - 10-Year ▬ Projected additional LUEs from 2024 to 2034 is 24,152 7 4 20-Year Growth Projections – Extent of Development ▬ Growth after 10-Year was established assuming City would only provide service to the Infill and Enhance and Controlled Growth areas in the 2040 Comprehensive Plan. ▬ Any parcels in these areas not already built in first 10 years will be built out within 20 years 8 5 20-Year Growth Projections – Density Assumptions ▬ The following assumptions were made for projecting LUEs: ‐ Within Liberty Hill Water CCN: Used HDR-developed water projections ‐ Within Leander Water CCN: Used LUEs from City-provided tracking sheet ‐ Within Georgetown Water CCN: Assumed densities established for each land use type in Liberty Hill Comprehensive Plan Purple: Existing Orange: Red: 10-Year 20-Year ▬ Projected additional LUEs from 2034 to 2044 is 20,570 9 6 Summary of LUE Growth Projections for CIP Planning Existing LUEs 10-year LUEs 20-year LUEs Liberty Hill 1,173 4,616 10,297 Georgetown 7,041 25,688 39,017 Leander 952 3,014 4,574 TOTAL 9,166 33,318 53,888 Existing LUEs were estimated based on existing flow rate divided by 245 GPD (of wastewater) per LUE (in accordance with standards adopted by City of Liberty Hill) 10 7 WWTP Expansion Growth Scenarios ▬ Expansion of South Fork WWTP is recommended to be phased into two 3 mgd projects ▬ CIP project costs are based on “Scenario for Recommended Plan” ▬ Alternate scenario should be considered for operational flexibility pending further discussions with Santa Rita and TCEQ about feasibility to expand TPDES permit at North Fork WWTP. Also allows for avoding cost to expand the AWPF for additional growth beyond initial 5 mgd construction 11 8 Advanced Water Purification Facility ▬ 5 mgd AWPF recommended for receiving treated effluent from the South Fork WWTP ▬ Located at a separate property ▬ Infrastructure includes: ‐ AWPF including Reverse Osmosis, UV Disinfection, and Oxidation ‐ Brine Disposal Injection Wells ‐ Storage Tanks and Pumps for blending AWPF effluent with existing water supplies 12 9 Wastewater CIP Debt Funding within next 5 years 13 10 Wastewater and Sewer Rate Study 14  ▬ Focus on Wastewater (regional) and Sewer (city) systems ▬ Ensure rate revenue is sufficient to meet rising operating costs over the next five years (FY 2025 – 2029) OBJ ECTIVES OF THIS ▬ Fund capital improvements of $260 million over five years RATE STUDY ▬ Ensure utility financial policies are met, including debt service coverage 15 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 12 12 LLC  ▬ Liberty Hill maintains separate Wastewater and Sewer Funds ▬ Wastewater revenues primarily comprise sales to Georgetown and Leander customers ▬ Sewer revenues are primarily sales within Liberty Hill’s service area ▬ Over-recovery in FY 2025, but rising costs are anticipated Projected Expenditure & Revenue FY 2025 CONTEXT $18M Assumes current Wastewater & Sewer rates $16.3 M $16M Expenditure $14M $13.3 M $13.3 M $12.4 M Revenue $12M $10M $8M $6M $4M $3.0 M $2M $0.8 M $0M Wastewater Fund Sewer Fund Combined 16 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 13 13 LLC  ▬ Total expenses are projected to more than double by FY 2029 ▬ Cost pressures mostly reflect the cost of financing new capital projects (‘Projected Debt Service’), as well as inflation and customer growth Expenditure Projections $30M $27.6 M COST $25M $21.6 M Projected Debt Service PROJ ECTIONS $20M $18.2 M Existing Debt Service Franchise Fees $15.3 M O&M $15M $13.3 M $10M $5M $0M 2025 2026 2027 2028 2029 17 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 14 14 LLC  ▬ Projected debt servicing costs reflect planned capital projects of $260 million over five years (including inflation) Capital Projects by Fund $90M $80M $75.0 M $75.4 M Sewer CAPITAL $70M Wastewater PLANS - COSTS $60M $50M $43.5 M $40M $35.7 M $30.3 M $30M $20M $10M $0M 2025 2026 2027 2028 2029 18 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 15 15 LLC  ▬ These projects are assumed to be fully debt funded, other than a portion paid for from new Impact Fee revenues. ▬ Currently not assuming any use of existing funds. Capital Projects by Funding Source $90M CAPITAL $80M $75.0 M $75.4 M Impact Fee Revenue PLANS - $70M New Debt $60M FUNDING $50M $43.5 M $40M $35.7 M $30.3 M $30M $20M $10M $0M 2025 2026 2027 2028 2029 19 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 16 16 LLC  ▬ Rate increases are mitigated by projected growth in the number of sewer and wastewater connections ▬ Based on conservative growth assumptions by City staff and engineers under a scenario of slow, managed growth ▬ Total growth in connections of around 48% by FY 2029 Assumed Connection Growth (Living Unit Equivalents, or LUEs) ASSUMED Annual Growth in Connections CONNECTION Area / Customer Type Current LUEs 2025 2026 2027 2028 2029 GROWTH Georgetown – Residential 10,676 1,506 1,506 1,506 1,506 1,506 Georgetown – Commercial 39 0 0 0 0 0 Leander – Wholesale 1,903 Data unavailable at time of analysis Leander – Retail (Rancho Sienna) 1,546 0 0 0 0 0 Liberty Hill – Residential 2,339 44 100 120 140 160 Liberty Hill – Commercial 524 14 22 22 22 22 Total 17,027 1,564 1,628 1,648 1,668 1,688 20 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 17 17 LLC  FINANCIAL PLAN OUTCOMES WITH NO RATE CHANGES • Current rates are projected to be insufficient to meet minimum financial targets from FY 2028 onward 21 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 18  ▬ The City currently charges a fixed monthly amount per LUE ▬ Annual rate increases of 6.5% would generate sufficient revenue over five years, and smooth the impact of rate changes ▬ Assumes that existing differentials for customers inside and outside city limits would be maintained CURRENT AND Area / Customer Type Current Rate Annual Change in Rates 2025 2026 2027 2028 2029 ESTIMATED $ per LUE Liberty Hill – Residential Inside $62.58 6.5% 6.5% 6.5% 6.5% 6.5% RATES Liberty Hill – Residential Outside $67.94 6.5% 6.5% 6.5% 6.5% 6.5% Georgetown – Residential $67.94 6.5% 6.5% 6.5% 6.5% 6.5% Leander – Retail (Rancho Sienna) $67.94 6.5% 6.5% 6.5% 6.5% 6.5% Liberty Hill – Commercial Inside $76.69 6.5% 6.5% 6.5% 6.5% 6.5% Liberty Hill – Commercial Outside $95.87 6.5% 6.5% 6.5% 6.5% 6.5% Georgetown – Commercial $95.87 6.5% 6.5% 6.5% 6.5% 6.5% Leander – Wholesale $39.54 0.0% 0.0% 0.0% 0.0% 0.0% 22 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 19 19 LLC  FINANCIAL PLAN OUTCOMES – AS ESTIMATED • The estimated rate plan, based on annual increases of 6.5%, would meet financial targets over the five-year study period 23 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 20  Sewer Bills FY 2025 Assumes 5,000 gallons of water use Pflugerville* $85.50 Hutto* $68.96 Liberty Hill (Proposed) $66.65 Liberty Hill $62.58 Wylie $61.10 BILL Cedar Hill* $60.10 COMPARISON Georgetown Rowlett $54.35 $52.48 Rockwall* $45.75 Kyle* $43.31 Keller* $43.31 Cedar Park* $36.20 Mansfield $29.48 * Uses winter Leander* $28.78 average 24 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 21 21 LLC  ▬ The estimated rate increases reflect several impactful assumptions, including future growth in wastewater / sewer connections. ▬ Growth estimates are intentionally conservative and based on the best available information at the time of the study. ̶ All else being equal, faster growth in connections would reduce the required increase in rates. ▬ If available, using fund balances to pay for capital projects would RISKS AND reduce future debt service costs, and hence reduce the required UNCERTAINTY rate increases. ▬ Projections are based on assumed Impact Fee revenues, which could fluctuate based on developer agreements and the maximum assessable fee adopted by the City. ▬ NewGen recommends that rapidly-growing communities review rates every year due to the pace of development and evolving capital investment needs. 25 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, 22 22 LLC THANK YOU MATTHEW GARRETT PARTNER AND MANAGING DIRECTOR 972-675-7699 MGARRETT@NEWGENSTRATEGIES.NET 26 Next Steps 27 Next Steps Date Meeting Agenda J anuary 22 Wastewater and Sewer Rates Workshop Council Meeting (Today) Public Hearing regarding Impact Fee Revise Rate assumptions and as needed per Workshop comments today February Council Meeting Set schedule for adoption of new Water and Wastewater Rates TBD Council Meeting Finalize Updated Impact Fee Assessments and Date for Adoption TBD Council Meeting Finalize Rates and Date for Adoptoin 28 25 listen . think. deliver. 29