Richardson City Council Work Session June 5th, 2023
OPENING
All councilmembers are present as well as City Manager Don Magner and City Secretary Aimee Nemer.
One public speaker is present. As Don Magner reads the advisory for public speakers, he states that speakers now have 5 minutes to address the council. This is an increase from the previous administration’s 3-minute limit. The speaker criticizes the city’s water deposit requirement for landlords. He requests the city waive water deposit requirements for clean-and-show permits.
Next, committee and board liaison assignments are discussed. Mayor Dubey announces that the former Retail Committee will now be called the Business Committee. Don states that considerations for adding any new committees or boards will be discussed at the budget discussion and council goals sessions. Handouts are passed around to councilmembers to declare interests and conflicts. It sounds like assignments will be announced at the next city council meeting.
NTMWD
The lengthiest discussion of the evening is an update from the NTMWD (Water District). NTMWD Executive Director Jenna Covington starts by introducing the two appointed directors from Richardson, former City Councilman John Sweeden and former CPC Chairman Randy Roland. These are the folks representing our interests on the water district board, and it is important that they hear from citizens. Yet, neither has any contact info listed on the board’s website. What is listed, is a conflict-of-interest statement filed by John Sweeden listing a business relationship with the Weisz family for “investments”. The Weisz family own approximately 156 acres near the new Bois D’Arc Lake. 106 of those acres were rezoned to retail/commercial use in 2019. Fun Fact: The tax bill for all 156 acres combined was only $1,262.97 for 2022. How much were your property taxes on your half-acre residential lot last year?
Deputy Director Billy George continues the presentation and provides a general overview of regional projects and facilities. Asst. Deputy Director R.J. Muraski continues, presenting an overview of Richardson-specific facilities and future water supply plans. Approximately 55,000 people are moving to the NTMWD service area every year. They estimate that a new water source will be needed by 2036 in order to meet capacity needs. Current capacity is just under 500 million gallons daily. Estimates show the area’s demand exceeding 700 million gallons daily by the 2060s. R.J. explains that they do have planning strategies to meet those future needs. (JN: I wish they would break out commercial vs. residential use to show where conservation efforts are needed most. The city already confirmed in a previous meeting that increased water usage is being driven by commercial data centers.) He highlights 25 potential future options for increasing water capacity across Northeast Texas. These include new reservoirs, pursuing rights to existing reservoirs, potential groundwater sources, wetlands, aquifer storage & recovery, and conservation efforts. He also highlights some of the conservation outreach programs. These programs are marketed to schoolchildren and homeowners across the city and metroplex. I didn’t see any programs marketed towards commercial users draining our water resources.
Deputy Director Jeanne Chipperfield continues the presentation on the NTMWD’s financial plans. They plan to issue $1.2B in debt over the next year. Interest rates on that debt have also risen an approximate 25%. Construction costs are estimated to increase by at least 17%. They are also experiencing high costs for chemicals they use to treat systems. Therefore, they have decided to increase the cost to members at an even higher rate than previously expected. Over the next five years, water rates will now increase an approximate 80% instead of the originally estimated 30%. For wastewater, the rates are now expected to increase 85% over the next 6 years instead of the originally estimated 50%. The Upper East Fork Interceptor system is described as a part of the wastewater system, but it has its own separate rate. That rate is now expected to increase than 100% over the next 6 years instead of the originally estimated 70%. For solid waste, Jeanne explains that the rates are more stable due to revenue from external customers as well as revenues from landfill gas rights.
With the presentation concluded, Mayor Dubey invites Richardson-appointed Directors Sweeden and Roland to address the council. John Sweeden describes his experience since starting with the NTMWD in 2001 as “fun”. (JN: I’m sure that business relationship with the Weisz family is VERY “fun”. I hope we find his replacement soon.) He suggests that we should try to reduce our water use as much as possible to combat the rate increases. Randy Roland describes his first year with the organization as overwhelming. He implies that the executive staff typically make most of the decisions and ask the board to trust them. (JN: Neither of these appointees seem like experts in water conservation. Are there no better options for our city? We have one who tries his best, but admittedly doesn’t really know what he’s doing. The other seems to be in it for the “fun” benefits. I would much rather have appointees who can hold their own against tax-funded executives. Maybe even some appointees who can fight to lower executive salaries?)
Now, it’s the council’s turn to ask questions. Councilwoman Justice asks about the cost of chemicals. Billy George answers that some costs have slightly decreased while others have levelled out. They aren’t seeing the price continue to increase currently. Councilman Corcoran’s question about the 8-year draw down period reveals that Richardson has been buying less water than in previous years. It sounds like they are saying the rate increases are okay because we won’t need to buy as much water. Another question from Councilman Corcoran reveals that the projected numbers beyond 5 or 6 years are not, in any way, real numbers. Since capital improvement projects are not yet estimated for those years, none of those potential costs were included. This means that the estimates showing an approximate 100% rate increase over the next decade are actually going to be much higher. (JN: And with that, my trust in the NTMWD goes flying out the window.)
Councilman Hutchenrider asks about the policy regarding new customers/members that will further drain water resources. The executives answer that Bois D’Arc Lake will also be obligated to serve Fannin County’s needs. While those needs aren’t significant now, those needs will grow if/when Fannin County sees a population boom like Collin County’s. This question also reveals the rate difference for an external “customer” and a “member”. Customers are charged only 5 cents more than paying members for their cost per thousand gallons. They are currently evaluating changes to that policy. Jenna seemed eager to potentially add new customers and convert some existing customers to members. Councilman Hutchenrider asks about integrating smart watering systems into the organization’s technology so they could control when residents could water their yards. Bill George answers that they’d love to do that but aren’t there yet. They are working with Texas A&M Agrilife to pursue such a project. (JN: How about instead we get a smart system to limit commercial use and prioritize the needs of residents over other stakeholders?)
Councilman Hutchenrider also expresses major concern over the rate increases. He states that no private business would stay in business with this level of increase, and he implores the NTMWD leadership to prioritize this issue. Councilman Barrios asks about the expected timeline to increase water capacity. The question is essentially dodged, citing “active negotiations”. Councilman Barrios’ second question is about how rate increases compare to other water districts. Jenna claims that they are in a group of only four cohorts. She also claims that they are average among those cohorts for rate increases. (JN: A search on the TCEQ website for active, legislatively created river authorities with the word “municipal” in the name shows 17 river authorities. How many of these are comparable to the NTMWD, and are they indeed average in comparison to other districts’ rate increases? That’ll have to be a project for another day.)
Councilman Dorian asks about the possibility of utilizing native plants to help retain and conserve water. Bill George answers that they don’t have specific numbers on the feasibility of this strategy. He describes current landscaping requirements for commercial developments as potentially harmful since a lot of the landscaping decisions are causing excess watering. He encourages cities to pass ordinances that only allow plants that thrive without excess watering in our climate. (JN: I’m adding that to my list of suggestions for the comp plan update. This further suggests that the commercial side of water usage is the biggest contributor to the drain on our water resources. We should absolutely amend the landscaping policy to only allow native plants that will conserve water use and be better for the environment. We should also help get current commercial developments in compliance with such a policy. Helping residents who want to convert to native lawns would also be wise. So many opportunities here. Great question by Councilman Dorian.)
Mayor Pro Tem Shamsul asks how much of the wholesale rate increases will be passed along to citizens. Don Magner answers that recent increases on the city’s side have been roughly a quarter of the wholesale rate increase. For instance, if the wholesale rate is increasing by 10%, the city has increased their customers’ rates by only 2.5%. If that trend were to continue, residents might expect a roughly 20-25% increase over the next 5 or 6 years. Don mentions, however, that if the wholesale increases maintain current rates, the city will have to raise rates by more than 2.5%. Maintenance and repair costs to the water delivery system will also contribute to increased rates. Residents should expect at least a 2.5% increase next year, but it will probably be more. Mayor Dubey compliments Jenna and her team and moves to the next agenda item.
CITY WATER PLANS
The next item is an overview of the city’s water and wastewater maintenance strategies. Director of Public Services Eric Robison presents. Eric gives an overview of capabilities, infrastructure, and equipment. Proposed maintenance projects for the next fiscal year include repairs/replacements at the Shiloh and Northside Pump Stations, Northstar North Bypass, Renner Tower, and Eastside Sump Vault. The city also plans to test and service 800 hydrants, repairing and replacing as needed. Proposed capital improvement projects include water main replacements on the 2000 block of Portsmouth Dr. and the 1200 block of Dalhart Dr., a valve replacement at Renner & Wyndham, and transitioning to ultrasonic meters for larger, commercial meters.
Engineering Director Jim Dulac then provides an overview of the 825 Pressure Zone Project. Richardson has three pressure zones that correlate to the elevation above sea level. The 825 Pressure Zone covers Northeast Richardson. This project aims to expand the delivery capacity for this zone and the neighboring 767 Pressure Zone due to expected future development. The project will expand the capacity by 15 million gallons daily, add a 5-million-gallon storage tank, add a line from the Northside Pump Station to Alma Rd., and add a NTMWD meter and line from the Northside Pump Station to Custer Rd. Archer Western is the CMAR (Construction-Manager-At-Risk) and completion is expected in 2025. In response to citizen feedback regarding the impact of the project, the city has implemented strategies to mitigate the impact the project will have on the neighborhood and the use of Point North Park. Those strategies include a screening fence and shrubbery screen to reduce noise and visual pollution, replacement shade trees, minimized closure of the park, rerouting the walking path, and reducing the physical above-ground portion of the station. The total cost of the project is estimated at $62M. The funding breakdown is as follows: $17M from reserves, $10M in federal funds, an additional $1M from land sales, and the remaining $34M in certificates of obligation. For FY 23/24 sewer capital projects, the city estimates a $4.3M certificates of obligation issuance for sewer main, lift station, and manhole replacements. The preceding FY 22/23 also saw a $4.3M debt issuance for the same project categories. The city states that the surrounding area on Renner should expect significant impact during the water main construction. Construction on Renner should be completed by the end of the year. The city will work with surrounding residents, businesses, cyclists, and DART to mitigate the impact to residents who frequent the area.
CITY HALL UPDATE
Jim then gives an overview of the plans for designing the new city hall. Don Magner states that a finalized conceptual design should be ready by October. Architexas is the firm that has been contracted for the design. An online public input survey is planned for late June. Open house events are planned for June 27th and July 8th. A final round of open houses is planned for September 12th and 14th to receive input on the preferred, proposed conceptual plan. Though insurance negotiations are ongoing, the city expects negotiations to conclude this summer. Councilman Hutchenrider asks about the cost benefit of hiring additional experts to assist with insurance negotiations. Jim confirms that the experts are working on an hourly basis with no contingency fee agreement. After Councilman Hutchenrider pushes further, Jim clarifies that he doesn’t expect the bill to be over $150k for their services.
LEGISLATIVE UPDATE & CLOSING
The final presentation is a legislative update following the end of the regular session of the 88th Texas Legislature. CFO Kent Pfeil presents. The bill of most consequence is HB 2127, which the city calls a “super preemption” bill. This bill would preempt cities from passing their own regulations in 10 major areas of state code. The Texas Municipal League expects the bill to be challenged as unconstitutional once signed into law. A different bill, SB 929, establishes rights for owners/lessees of businesses who are forced to cease operations due to nonconforming use. It establishes that the owner/lessee of such a business is entitled either to direct compensation for costs associated with closing or additional time to continue the nonconforming use until costs are recovered. This bill has been signed into law by the governor already. Another bill already signed into law is SB 224. This bill increases the criminal penalties for catalytic converter theft. Council wishes the community a happy Pride Month, highlights the Leadership North Texas program and other community events, and the meeting finally adjourns after just over 3 ½ hours.