City Council Workshop or Special Called Meeting

CITY COUNCIL WORKSHOP MEETING MONDAY - APRIL 7, 2025 - 5:00 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) PUBLIC COMMENTS Regarding items not on this agenda/Public Comments: Those desiring to speak on a topic not listed on the agenda, please complete a speaker form and present to the City Secretary before the meeting. Speakers will have three minutes each to speak, this time cannot be transferred or shared. Council members may not take action during this item and any responses will be limited to factual statements, recitation of existing policy, or request for the topic to be placed on a future agenda. Regarding topics listed as an agenda item/During specific agenda item: Council requests that speakers complete a speaker form, indicate which agenda item they are interested in speaking about, and submit form to the City Secretary before the agenda item is addressed. Speaker forms may be emailed to the City Secretary before the meeting at esimpson@libertyhilltx.gov. 3) REGULAR AGENDA a) Presentation about/Discussion of proposed Ordinance regarding modifying the city's 1  Wastewater Rates, based upon the recently adopted Wastewater Master Plan. (J. Herrera, M. Etienne) Matthew Garrett with NewGen will present the Presentation on Wastewater rates. Liberty Hill Rate Study Council Presentation_NewGen_2025-04_07 Final.pdf b) Discussion/Presentation of proposed Ordinance regarding modifying Water Rates, based upon the recently adopted Water Master Plan. (J. Herrera, M. Etienne) Grady Reed, representative of HDR, Inc., will give a presentation on these proposed rate updates. City Council will consider adoption of updated Utility Rate Ordinance(s) at their April 23, 2025, Regular Called City Council meeting. Liberty Hill Workshop 4_7_25 Grady Reed Water Rates FINAL 4.2..pdf 4) ADJOURNMENT 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 MONDAY - APRIL 7, 2025 2801 Ranch Road 1869 - Liberty Hill AGENDA ITEM 3.a Presentation about/Discussion of proposed Ordinance regarding modifying the city's Wastewater Rates, based upon the recently adopted Wastewater Master Plan. (J. Herrera, M. Etienne) 3 April 7, 2025 WASTEWATER & SEWER RATE STUDY CITY OF LIBERTY HILL, TX 4 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC  • 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) OBJECTIVES • Fund capital improvements of $260 million over five years OF THIS • Ensure utility financial policies are met, including debt service coverage RATE STUDY 5 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 22  • 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 6 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 33  • 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 PROJECTIONS $20M Existing Debt Service $18.2 M Franchise Fees $15.3 M O&M $15M $13.3 M $10M $5M $0M 2025 2026 2027 2028 2029 7 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 44  • Projected debt servicing costs reflect planned capital projects of $260 million over five years (including inflation) • Capital listed is consistent with City’s CIP Planning Documents Capital Projects by Fund $90M CAPITAL PLANS $80M $75.0 M $75.4 M Sewer - COSTS $70M Wastewater $60M $50M $43.5 M $40M $35.7 M $30.3 M $30M $20M $10M $0M 2025 2026 2027 2028 2029 8 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 55  • 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 $80M $75.0 M $75.4 M CAPITAL PLANS $70M Impact Fee Revenue New Debt - FUNDING $60M $50M $43.5 M $40M $35.7 M $30.3 M $30M $20M $10M $0M 2025 2026 2027 2028 2029 9 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 66  • 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 Assumed Connection Growth (Living Unit Equivalents, or LUEs) CONNECTION Area / Customer Type Current LUEs Annual Growth in Connections GROWTH Georgetown – Residential 10,676 2025 1,506 2026 1,506 2027 1,506 2028 1,506 2029 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 10 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 77  FINANCIAL PLAN OUTCOMES WITH NO RATE CHANGES • Current rates are projected to be insufficient to meet minimum financial targets from FY 2028 onward 11 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 8  • 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 ESTIMATED $ per LUE 2025 2026 2027 2028 2029 RATES Liberty Hill – Residential Inside $62.58 6.5% 6.5% 6.5% 6.5% 6.5% 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% 12 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 99  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 13 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 10  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 $54.35 Rowlett $52.48 Rockwall* $45.75 Kyle* $43.31 Keller* $43.31 Cedar Park* $36.20 Mansfield $29.48 * Uses winter average Leander* $28.78 14 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 11 11  • The estimated rate increases reflect several key 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. RISKS AND • If available, using fund balances to pay for capital projects UNCERTAINTY would reduce future debt service costs, and hence reduce the required 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. 15 © 2025 NEWGEN STRATEGIES AND SOLUTIONS, LLC 12 12 THANK YOU MATTHEW GARRETT PARTNER AND MANAGING DIRECTOR 972-675-7699 MGARRETT@NEWGENSTRATEGIES.NET 16  CITY COUNCIL WORKSHOP CITY COUNCIL WORKSHOP MEETING MONDAY - APRIL 7, 2025 2801 Ranch Road 1869 - Liberty Hill AGENDA ITEM 3.b Discussion/Presentation of proposed Ordinance regarding modifying Water Rates, based upon the recently adopted Water Master Plan. (J. Herrera, M. Etienne) 17  2025 Update of Water Rates City Council Workshop April 7, 2025 18 ASSUMPTIONS  Total water budget of $3.6 million for FY25  Water expenses are projected to increase to $8.4 million in FY29 ($4.8 million or 135%)  Future expenses are being driven by increased debt service  No transfer to the General Fund in FY25 or future years  Updated Capital Improvement Plan ($64 million to $72 million)  Use of Impact Fee funds to pay for debt service beginning in FY26 ($750,000 in FY26 increasing to $2,250,000 in FY29)  $3.0 million of impact fee funds remain for future use 19 CAPITAL IMPROVEMENT PLAN Source Five-Year of Estimated Project Cost by Year CIP Project Name Funding 2025 2026 2027 2028 2029 Total W RR 1869 Fire (WL-1) Fees $ - $ - $ - $ - $ 2,084,126 $ 2,084,126 W Hickman St Fire (WL-2) Debt $ - $ - $ - $ - $ 500,044 $ 500,044 W Downtown Fire (WL-3) Cash $ - $ - $ - $ - $ 9,733 $ 9,733 W Seward Junction Loop (WL-4) Debt $ - $ - $ - $ 18,902,575 $ - $ 18,902,575 W SH-29 to Well Site 4 (WL-5) Debt $ - $ - $ - $ - $ 7,995,843 $ 7,995,843 W EST Loop Closure E (WL-6) Debt $ - $ - $ - $ - $ 2,844,534 $ 2,844,534 W Prop School Service (WL-7) Debt $ - $ 617,594 $ - $ - $ - $ 617,594 W Butler Farms EST Water Line (WL-8) Debt $ - $ - $ 530,939 $ - $ - $ 530,939 W SH 29 to Bulter Farms (WL-9) Fees $ - $ - $ - $ 2,289,413 $ - $ 2,289,413 W Butler Farms EST (WT-1) Debt $ - $ 21,594,144 $ - $ - $ - $ 21,594,144 W Georgetown Connection Upgrades (WS-1) Fees $ 946,500 $ - $ - $ - $ - $ 946,500 W Various water line replacements Debt $ - $ 2,850,000 $ - $ - $ - $ 2,850,000 W Water AC Line Replacement - Phase 2 Debt $ - $ 2,600,000 $ - $ - $ - $ 2,600,000 W Water AC Line Replacement - Phase 3 Debt $ - $ - $ 2,600,000 $ - $ - $ 2,600,000 W Water AC Line Replacement - Phase 4 Debt $ - $ - $ - $ 2,600,000 $ - $ 2,600,000 W $ 3,946,500 $ 27,661,738 $ 3,130,939 $ 23,791,988 $ 13,434,280 $ 71,965,445 ** CIP is consistent with City’s CIP planning document 20  RATE RECOMMENDATIONS  10.5% Across the Board rate increase through FY29 o $8.59/month for 7,500 gallons of use in first year Sample Monthly Bill Change % Change Class Monthly Use 2024 2025 2026 2027 2028 2029 2024-2025 2024-2025 Residential w/ 3/4" meter 2,500 $ 54.53 $ 60.26 $ 66.60 $ 73.59 $ 81.30 $ 89.83 $ 5.74 10.5% 5,000 $ 68.00 $ 75.16 $ 83.07 $ 91.79 $ 101.40 $ 112.03 $ 7.16 10.5% 7,500 $ 81.48 $ 90.06 $ 99.55 $ 109.99 $ 121.50 $ 134.23 $ 8.59 10.5% 10,000 $ 94.95 $ 104.96 $ 116.02 $ 128.19 $ 141.60 $ 156.43 $ 10.01 10.5% 12,500 $ 117.40 $ 129.76 $ 143.42 $ 158.46 $ 175.05 $ 193.38 $ 12.36 10.5% 15,000 $ 139.85 $ 154.56 $ 170.82 $ 188.74 $ 208.50 $ 230.33 $ 14.71 10.5% 20,000 $ 184.75 $ 204.16 $ 225.62 $ 249.29 $ 275.40 $ 304.23 $ 19.41 10.5% Commercial w/ 1" meter 5,000 $ 129.57 $ 143.20 $ 158.25 $ 174.86 $ 193.20 $ 213.46 $ 13.63 10.5% 10,000 $ 156.52 $ 173.00 $ 191.20 $ 211.26 $ 233.40 $ 257.86 $ 16.48 10.5% 15,000 $ 201.42 $ 222.60 $ 246.00 $ 271.81 $ 300.30 $ 331.76 $ 21.18 10.5% 25,000 $ 304.62 $ 336.60 $ 371.95 $ 410.96 $ 454.05 $ 501.61 $ 31.98 10.5% 50,000 $ 596.12 $ 658.60 $ 727.70 $ 803.96 $ 888.30 $ 981.36 $ 62.48 10.5% 100,000 $ 1,062.52 $ 1,173.80 $ 1,296.90 $ 1,432.76 $ 1,583.10 $ 1,748.96 $ 111.28 10.5% 21 250,000 $ 2,928.12 $ 3,234.60 $ 3,573.70 $ 3,947.96 $ 4,362.30 $ 4,819.36 $ 306.48 10.5% WATER UTILITY SUMMARY 22 WATER UTILITY FUND 23 RESIDENTIAL BILL COMP. 24 COMMERCIAL BILL COMP. 25 NEXT STEPS  Conduct a rate study in FY26 to focus on: o Rate tiers to be more conservation oriented o Rate tiers to be more equitable between high and low users o Other rate structure changes as needed 26 QUESTIONS? 27 RESIDENTIAL BILL COMP. 28 COMMERCIAL BILL COMP. 29