[MEETING TO ORDER] [00:00:12] >> GOOD EVENING, WELCOME TO THE BOARD MEETING. PLEASE STAND FOR THE PRAYER AND THE PRAYER -- PLEDGE OF ALLEGIANCE. >> LET US PRAY. WE THANK YOU FOR THIS DAY WE THANK YOU FOR ALL OF THE BLESSINGS OF GRACE AND PROVISION THAT YOU HAVE PROVIDED TO THIS UTILITY AND TO THE CITY AND TO OUR COUNTRY. THANK YOU FOR THESE, THE STAFF AND LEADERS OF THIS UTILITY AND WE PRAY NOW THAT YOU GIVE THEM KNOWLEDGE AND WISDOM FOR ALL OF THE DECISIONS THEY MAKE AND HONOR YOU, GLORIFY YOU AND BE FOR THE MOST GOOD OF RESIDENTS OF OUR SERVICE AREA. WE ASK ALL OF THIS IN JESUS NAME, AMEN. I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA, AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. >> MADAM CLERK PLEASE CALL THE VOTE. I WOULD LIKE TO STATE THAT MR. FEE'S ABSENCE TODAY IS EXCUSED. >> SHOULD WE MAKE A MOTION? >> MAY BE? DO WE NEED A MOTION? CAN WE MAKE A MOTION TO EXCUSE HIM? >> SECOND. >> PLEASE CALL THE ROLL. [A. SET THE AGENDA] GET A MOTION? >> I WILL SET THE AGENDA AS PRESENTED. >> SECOND. >> TODAY? IF SO, YOU HAVE 3 MINUTES TO COME UP AND MAKE YOUR STATEMENT. SEEING NO MOVEMENT, WE WILL MOVE [C. APPROVAL OF MINUTES] ON. APPROVAL OF MINUTES FROM THE LAST MEETING, JULY 22ND, IS% THERE ANYTHING THAT NEEDS TO BE ADJUSTED OR CAN WE GET A MOVE ON? >> I MOVE. >> PLEASE CALL THE ROLL. [D. CONSENT AGENDA] IS THERE ANYTHING THAT NEEDS TO BE PULLED OR ANY OTHER QUESTIONS THAT NEED TO BE MADE? >> I WILL MAKE A MOTION TO APPROVE THE CONSENT AGENDA. >> SECOND. >> PLEASE CALL THE ROLL. [E.1. Garden City Substation Autotransformer (GT3) Replacement - UPDATED] ALL RIGHT, MOVING TO THE REGULAR AGENDA. I WILL MOVE IT OFF. >> MEMBERS OF THE BOARD, GOOD AFTERNOON. THE FIRST ITEM THIS AFTERNOON IS A REQUEST TO APPROVE THE PURCHASE OF AN AUTO TRANSFORMER FOR THE GARDEN STATION. WE ARE REQUESTING THIS WITH 1 OE INTO THE ELECTRIC SYSTEM. THIS TRANSFORMER IS NEAR THE END OF USEFUL LIFE AND LAST YEAR IT DID EXPERIENCE AN UNPLANNED OUTAGE DUE TO FAULTY EQUIPMENT. WE WILL NOW PRESENT THIS ITEM. >> THANK YOU. MADAM CHAIR, BOARD MEMBERS, AS WAS SAID, WE ARE HERE TO TALK ABOUT THE GT THREE REPLACEMENT AT GARDEN CITY. GT3 IS ONE OF THE THREE PRIMARY AUTO TRANSFORMERS SERVING THE ELECTRIC SYSTEM. IT IS CONNECTED TO THE 138-KILOVOLT LINE TRANSMISSION LINE IN THE SYSTEM. IT SUPPLIES APPROXIMATELY 45% OF OUR PEAK LOAD, WHICH LAST YEAR WAS RIGHT AT 126 MEGAWATTS. AS YOU MAY REMEMBER, IN DECEMBER OF 2025, WE HAD A BUSHING FAILURE AT THAT TRANSFORMER. AND IT HIGHLIGHTED, LIKE IT SAYS HERE, THE INCREASED RELIABILITY RISK. IT WAS ACTUALLY THE SECOND PROBLEM WE HAD ABOUT 12 YEARS AGO, WE HAD A TAP CHANGER GO BAD AND FAILED AND LOCK IT INTO ONE POSITION. AND WE GOT WORRIED THEN BUT WE ARE ABLE TO FIX THAT PROBLEM SO NOW WE HAVE TWO PROBLEMS WITH THE TRANSFORMER. IT WAS INSTALLED IN 1992 AND IT IS APPROACHING THE END OF EXPECTED SERVICE LIFE, WHICH FOR THOSE TRANSFORMERS, IS ABOUT 40 YEARS. FROM WHEN THAT ONE WAS BUILT. BY UPGRADING THIS AND REPLACING THIS, WE WILL BE ABLE TO GO FROM [00:05:03] 167 UP TO 200. AS IT SAYS HERE, IT WILL INCREASE THE SUBSTATION CAPACITY TO THE GROWING ELECTRIC DEMAND AND ENHANCE THE SYSTEM RELIABILITY. AND REDUNDANCY. WHEN WE WENT OUT FOR COMPETITIVE PROCUREMENT, THERE WERE 308 VENDORS SOLICITED, SEVEN COMPETITIVE PROPOSALS WERE RECEIVED AND FOUR MET THE REQUIREMENTS. STAFF IDENTIFIED THE UTILITIES AS THE BEST EVALUATED PROPOSAL AND STAFF IS RECOMMENDING AWARDING THE CONTRACT TO IRBA UTILITIES. AND I WOULD BE HAPPY TO ANSWER ANY QUESTIONS BEFORE THERE IS A MOTION. >> QUESTIONS ON THE BOARD? >> WHAT IS A BUSHING FAILURE? >> THOSE ARE THE THINGS THAT STICK OUT OF THE TRANSFORMERS AND HAVE THE INSULATORS COME OUT, THAT IS WHERE IT COMES IN AND OUT OF THE TRANSFORMER. AND IT GOES WAY DEEP INTO THE TRANSFORMER AND CONNECTS TO THE WINDINGS. SO IF IT ACTUALLY EXPLODED INTERNALLY AND TO BE HONEST WITH YOU, MADAM MAYOR, WE WERE VERY LUCKY TO CLEAN EVERYTHING UP AND GET IT BACK ONLINE. SO WE FELT VERY -- >> YOU REPAIRED IT? >> YES, MA'AM, WE REPLACED THE BAD BUSHING AND CLEANED UP INSIDE, DRAINED THE OIL, THEY WENT IN THERE WITH BROOMS AND SWEPT THE PIECES OUT AND REFILTERED THE OIL AND EVERYTHING AND PUT IT BACK ON LINE. >> SO THIS IS A LOT OF MONEY. BUT IT WILL PERFORM MUCH BETTER THAN THE ONE WE HAD BEFORE >> IT'S EVEN BETTER THAN ALL OF THAT. I WILL LET DAVID TALK TO YOU ABOUT THAT ON WHAT A NEWER ONE BUILT IN THIS TIME FRAME, THE LIFE EXPECTANCY, GO AHEAD. >> THOSE TRANSFORMERS BUILT IN THAT TIME FRAME ONLY HAD A LIFE SPAN OF 35-40 YEARS. THESE NEW TRANSFORMERS WITH A NEW TECHNOLOGY ARE GOOD FOR UP TO 60 YEARS. I THINK WE ARE GETTING A BETTER BANG FOR OUR BUCK BY GETTING 20 MORE YEARS OUT OF THIS TRANSFORMER. >> HOW LONG DOES IT TAKE TO GET A TRANSFORMER? >> THIS ONE RIGHT HERE, THEY SAY WE WILL GET THIS THE FOURTH QUARTER OF 2028. WHICH FOR A TRANSFORMER LIKE THIS, WE ARE VERY HAPPY ABOUT IT. THAT WAS PART OF THE PROCESS WHEN WE EVALUATED ALL OF THE ELIGIBLE BIDDERS. >> BELIEVE IT OR NOT, THAT DATA IS ACTUALLY FAST TRACKING A TRANSFORMER THAT SIZE. IT IS ACTUALLY VERY QUICK. >> DECEMBER OF 2028. >> FOURTH QUARTER, YES, 2028. >> I HAVE A QUESTION, CHAIR. THE COST INCURRED IN DECEMBER, WHEN WE HAD THE INCIDENT, DO YOU RECALL? >> YES, I DO. OUT OF POCKET, I WANT TO SAY IT WAS SOMEWHERE IN THE $60,000 RANGE TO BE ABLE TO REPAIR IT. AND THAT WAS ONLY BECAUSE WE HAD A SPARE BUSHING THAT CAME WITH THE ORIGINAL TRANSFORMER. THIS ORIGINAL TRANSFORMER THAT WAS IN THE WAREHOUSE. THEY HAD TO KNOCK THE DUST OUT, CLEAN IT OFF REAL GOOD, IT WAS SITTING IN THE WAREHOUSE AND WE WERE ABLE TO USE IT, WE WERE VERY FORTUNATE. >> WAS IT ANTICIPATED THAT WOULD BE THE ONLY COMPONENT OF THIS SYSTEM? BETWEEN NOW AND THE TIME WE COULD GET THE OTHER INSTALLED?% OR HAVE WE BUDGETED FOR ANY PROBABILITY OF FURTHER EXPENSES AS IT RELATES TO THIS PARTICULAR SYSTEM? >> THIS TRANSFORMER? >> WHAT DO WE HAVE NOW? SO WE HAD OUR ISSUE IN DECEMBER, FROM WHAT YOU WERE SAYING, IT HAS LIVED ITS LIFE. HOW MANY YEARS DO WE GET OUT OF IT? >> SO IT WAS MANUFACTURED -- WE INSTALLED IT IN 1992. SO I BELIEVE IT IS SITTING AT 34 YEARS RIGHT NOW. THE LIFE OF THIS TRANSFORMER, AS WAS SAID, IS 35-40 YEARS. SO WE ARE SITTING AT 34 YEARS. WHAT REALLY CONCERNS US, MA'AM, IS THAT WE HAVE HAD TWO MAJOR THINGS HAPPEN TO THIS TRANSFORMER. EVEN THOUGH THEY ESTIMATE 40 YEARS, WE DON'T KNOW THAT WE ARE GOING TO GET THE WHOLE 40 YEARS OUT OF IT. IT IS AT THE END OF ITS USEFUL LIFE. SO THERE COULD BE THINGS HAPPENING, BUT I BELIEVE AS I MENTIONED EARLIER, WITH WHAT HAPPENED, WE WERE SO FORTUNATE TO BE ABLE TO REPLACE THAT AND GET IT BACK UP. IT COULD HAVE EASILY DONE DAMAGE TO THE WINDINGS ON THE INSIDE AND WITHOUT GETTING TOO TECHNICAL, THERE ARE THINGS INSIDE THAT THE EXPLOSION COULD HAVE DAMAGED AND WE WERE LUCKY THAT IT DIDN'T. >> I THINK SHE IS WONDERING CACTUS 1992 CURRENT TRANSFORMER, WE HAVE ALREADY INVESTED $60,000 TO KEEP IT UP AND RUNNING. I KNOWING NOW THAT WE ARE TWO AND A HALF YEARS OUT BEFORE WE [00:10:01] GET THE NEW ONE, IS THERE ANYTHING BUDGETED OR IS THERE ANY KIND OF REPAIR AND MAINTENANCE THAT HAS TO BE DONE SPECIAL TO THIS TO MAKE SURE IT REMAINS RUNNING WITHOUT ANY HICCUPS? >> THAT IS A GREAT QUESTION. SO WHAT WE DO ON A REGULAR BASIS, WE ARE DOING IT EVERY THREE MONTHS. THE WAY YOU TEST TRANSFORMERS IS TO TEST THE OIL IN THE TRANSFORMERS. WITH THE TESTING WE DO, WE SEND IT ALL FOR EVALUATION. AND WHAT THAT OIL DOES IN THE TRANSFORMER, IS IT LETS US KNOW HOW THE TRANSFORMER IS OPERATING. IT LETS US KNOW THERE IS ARCING GOING ON, IF THERE IS A BREAKDOWN OF THE PAPER AND ALL OF THESE THINGS. IF THERE IS HEATING GOING ON. THEY WILL LET US KNOW THAT AND THEY ARE LOOKING AT THAT. AND AFTER WE BROUGHT IT ONLINE A FEW MONTHS LATER, WE FILTERED IT AGAIN TO MAKE SURE THAT EVERYTHING WAS OKAY, AFTER WE HEATED EVERYTHING UP. AND SO FAR EVERYTHING STILL LOOKS GOOD FOR THAT TRANSFORMER. BUT WE ARE TESTING IT EVERY THREE MONTHS TO SEE IF ANYTHING IS STARTING TO HAPPEN. >> ANY WARRANTS COMING WITH REPRESENTATION? >> WARRANTY? >> WITH THE NEW TRANSFORMER? >> WITH THE OLD ONE. >> THE WARRANTY EXPIRED. IT'S ONLY GOOD FOR 3-5 YEARS. >> BUT THIS HAPPENED WITH THIS PURCHASE? >> THE 3 MILLION WILL HAVE A FIVE YEAR WARRANTY FOR THE FIRST FIVE YEARS OF ITS LIFE. ONCE IT GETS OVER FIVE YEARS, THEN YOU ARE KIND OF ON YOUR OWN. IT'S KIND OF LIKE A CAR, ONCE YOU GO PAST YOUR 100,000 MILES ON YOUR OWN, AT THAT POINT IF IT BREAKS DOWN OR WHATEVER -- >> BUT WE WILL BE DOING THE SAME TESTING, WE WILL BE TESTING THE OIL TO SEE WHAT IS GOING ON. AND LIKE I SAID, THEY ARE BUILDING IT NOW AND THE LIFE EXPECTANCY IS 50-60 YEARS ON THE NEWER ONES. >> SO WITH THESE SEVEN BIDS THAT YOU RECEIVED, AMONGST THE POPULATION OF INTEREST, WITH THOSE SEVEN BIDS, HOW DID WE STAND AS FAR AS HAVING SUFFICIENT WARRANTY? HOW DID THEY STACK IN THAT REGARD? >> THEY ALL CAME WITH FIVE YEAR WARRANTIES. THAT IS THE INDUSTRY STANDARD NOW. FIVE YEARS. >> WHAT MADE THIS PARTICULAR COMPANY STAND SEPARATE AND APART FROM THE OTHERS? >> IT WAS BASICALLY THE COST IN CONJUNCTION WITH THEIR NAME AND THE MANUFACTURING PROCESS TO GIVE US A GOOD TRANSFORMER. >> WE HAD A SPECIFICATION FOR THIS TRANSFORMER AND BECAUSE OF THE IMPORTANCE OF IT. AND THE STAFF COMPARED OUR SPECS AND HOW THEY MET OUR SPECS AND ALSO WENT OUT AND LOOKED AT PRICE AND AVAILABILITY TO, HOW FAST THEY CAN GET IT HERE. THAT'S WHY WE LOOKED AT THE WHOLE PROCESS AND THAT'S HOW THEY CAME UP WITH THIS ONE AS THE NUMBER 1. >> WITH THIS COMPANY, WHEN WE LOOKED AT WHAT THEY WERE OFFERING, WHAT WAS THE DIFFERENCE IN THE PRICE -- FIRST OF ALL, HAVE WE USED THEM BEFORE? >> NO, WE HAVE NOT USED THIS TRANSFORMER COMPANY BEFORE. THEY ARE RANKED NUMBER 2 IN THE WORLD FOR TRANSFORMERS FOR RELIABILITY AND BUILDING. >> OKAY. NOW, THE WARRANTY ON THE OTHER ONES, IT WAS FIVE YEARS. DID ANY ONE TRY TO NEGOTIATE MORE YEARS FOR THE WARRANTY TO SEE WHAT THE OTHER BIDS OR -- I KNOW THE STANDARD IS FIVE YEARS. BUT DID ANYONE SAY COULD YOU OFFER MORE YEARS OF WARRANTY ON THE EQUIPMENT? >> NO. THAT DID NOT CROSS OUR MINDS. YOU CAN PROBABLY GET AN EXTENDED WARRANTY BUT IT WILL BE EXTRA MONEY AT THAT POINT. BUT WE DID NOT PURSUE THAT AVENUE. WE JUST WENT WITH THE INDUSTRY STANDARD. >> AND EVERYBODY WAS THE SAME? IT ALL CAME OUT TO THE WARRANTIES. IT'S JUST LIKE ANYTHING NEW. THERE IS NO GUARANTEES. BUT WHAT I CAN TELL YOU WHEN IT COMES TO SOMETHING LIKE THIS, IF SOMETHING WILL GO WRONG, IT'S GOING TO GO WRONG IN THE FIRST FIVE YEARS. AND THERE'S SO MANY VARIABLES COMING INTO PLAY THAT IS WHY IT WOULD BE HARDER TO GET MUCH MORE THAN THAT WITHOUT HAVING TO PAY SOME AMOUNT OF MONEY FOR THAT. >> ALSO, I NOTICED THE OLD ONE LASTS 40 YEARS, THIS ONE WILL LAST 60 YEARS, RIGHT? THE DIFFERENCE IN THE PRICE IS, AND THE PRICE OF 40 YEARS VERSUS 60 YEARS, DO WE LOOK ATTT ANY [00:15:03] YEARS AND HOW MUCH DID IT COST US MORE? AND NEGOTIATE ON THAT? OTHER COMPANIES? >> I THINK I WILL GIVE THAT A SHOT. TRANSFORMERS THAT ARE MADE TODAY ARE NOT MAKING THEM FOR 30 YEARS ANYMORE, THEY ARE MAKING THEM AS A MINIMUM STANDARD, FOR 60 YEARS OR 55, 50-60. THE NEW STANDARD IS NO LONGER 30 YEARS, THE NEW STANDARD IS A HIGHER LIFE EXPECTANCY. >> I HAVE TWO FOLLOW UP QUESTIONS BUT HOPEFULLY THEY ARE EASY. DARE I ASK IF WE KNOW HOW MUCH THE 19921 COST US? >> LESS. [LAUGHS] >> JUST OUT OF CURIOSITY, WE HAD TO ASK THAT. AND THEN I THINK MY OTHER QUESTION WAS ALSO ANSWERED. A LIFE EXPECTANCY OF 55-60. >> YOU HOPE THEY LAST A FULL LIFE EXPECTANCY. >> AND IT SOUNDS LIKE IF WE ARE DOING THIS MAINTENANCE TO CHECK THE OIL AND WE WILL KNOW IF THERE IS SOMETHING THAT IS GOING IN THERE, PRIOR TO IT ACTUALLY HAVING AN ISSUE SO HOPEFULLY WE DON'T ENCOUNTER THAT. ARE THERE FURTHER QUESTIONS? >> ONE MORE COMMENT. THIS SUBSTATION, THE TRANSFORMER GETS TESTED BUT THE ENTIRE SUBSTATION GETS INFRARED CAMERAS SO THEY CAN SEE HOT SPOTS. NOT ONLY CAN YOU SEE WHAT'S HAPPENING ON THE INSIDE, YOU CAN SEE WHAT HAPPENS ON THE OUTSIDE. SO WE'VE SEEN THAT ONCE A YEAR, THE INFRARED. IN THAT LOCATION THEY ARE DOING IT ONCE A MONTH. SO THAT ANSWERS THE QUESTION ABOUT WHAT OTHER THINGS WE ARE DOING TO MAKE SURE WE STAY AHEAD OF IT. >> I'M SORRY, WERE YOU DONE? >> YES, MA'AM,. >> SO WE ARE REALLY DOING IT ONCE A MONTH BECAUSE OF THE STATE OF THE CURRENT TRANSFORMER, OKAY. I WANTED TO PIGGYBACK ON A QUESTION MISS BENNETT ASKED. AND YOU MADE A POINT, WITH REGARDS TO EXTENDED WARRANTIES. SO WE ARE TALKING A 60 YEAR LIFE, WHICH SOUNDS GREAT. WE ARE ALSO TALKING $3 MILLION. AND WE ARE TALKING ABOUT FIVE YEAR WARRANTY ON A $3 MILLION PURCHASE. OUR EXTENDED WARRANTIES AVAILABLE? >> I HAVE NO IDEA, MA'AM. >> WE CAN CIRCLE BACK WITH YOU, WE DON'T HAVE THAT INFORMATION WITH US RIGHT NOW. >> THANK YOU. >> ANY FURTHER QUESTIONS? >> PLEASE CALL THE ROLL. [E.2. Resolution UA 2026-20 Purchasing Policy Manual] THANK YOU. >> THANK YOU GENTLEMEN. MADAM CHAIR, MEMBERS OF THE BOARD, THE NEXT ITEM IS A REQUEST TO APPROVE THE FIRST OFFICIAL PURCHASING POLICY MANUAL. THE STAFF HAS HOSTED TWO WORKSHOPS WITH THE BOARD AND BASED ON THE FEEDBACK WE ARE HERE TO FINALIZE THIS NEW POLICY. AS A REFRESHER, FPU HAS DISCUSSED MULTIPLE RESOLUTIONS THAT HAVE BEEN DEVELOPED OVER THE PAST FEW DECADES THAT PROVIDE GUIDELINES FOR HOW STAFF PURCHASES FOR OUR UTILITY ORGANIZATION. THIS POLICY THAT WE ARE PROPOSING TODAY PUTS ALL OF THOSE GUIDELINES INTO A SINGLE DOCUMENT WITH THE LATEST BEST PRACTICES TO STAFF, WITH DIRECTION AND OVERSIGHT, WE WILL PRESENT THIS ITEM. HE'S ALREADY UP HERE AT, BUT I'D LIKE TO THANK DANNY, STEPHANIE, ANDY AND THE ENTIRE PROCUREMENT TEAM BECAUSE THEY WORKED HARD PUTTING THIS DOCUMENT TOGETHER. IT IS A JOB WELL DONE. >> THANK YOU. GOOD AFTERNOON MADAM CHAIR. TODAY WE ARE BRINGING FORTH RESOLUTION 2026-20, WHICH IS A PROCUREMENT POLICY MANUAL FOR YOUR CONSIDERATION AND ADOPTION. PLEASE ALLOW ME A FEW MINUTES TO PROVIDE A BRIEF BACKGROUND ON THE TOPIC TO REFRESH YOUR ME MEMORY. FPUA HAS NEVER ADOPTED A COMPREHENSIVE PURCHASING OR PROCUREMENT POLICY OF OUR OWN. WE HAVE FOLLOWED THE CHARTER AS WELL AS THE POLICY OF THE CITY OF FORT PIERCE. BUT OUR NEEDS ARE DIFFERENT FROM THE CITY, AND WE DETERMINED IT WOULD BE MOST APPROPRIATE FOR FPUA TO HAVE ITS OWN POLICY TO ADDRESS THE PECULIARITIES OF A FIVE SYSTEM UTILITY AUTHORITY. [00:20:01] THIS POLICY WAS DRAFTED IN CLOSE COLLABORATION WITH A GENERAL COUNSEL. THIS POLICY WAS REVIEWED BY ALL OF OUR DIRECTORS. FINALLY, THIS POLICY MANUAL WAS PRESENTED AND DISCUSSED IN A BOARD PROCUREMENT WORKSHOP ON MAY 19TH OF THIS YEAR. OUR PRESENTATION WAS DETAILED AND YOU ASKED MANY PROBING QUESTIONS. WE CLOSED THAT PROCUREMENT WORKSHOP WITHOUT ASKING FOR A VOTE. RATHER, WE ASKED YOU TO CONTINUE YOUR REVIEW OF THE POLICY AND FORWARD ANY QUESTIONS OR CONCERNS SO THEY COULD BE PROPERLY ADDRESSED. SINCE THEN, WE HAVE BEEN DEVELOPING A PROCESS AND PROCEDURE GUIDE TO ACCOMPANY THIS POLICY. WE HAVE ALSO HELD TWO TRAINING EVENTS FOR KEY STAFF ACROSS ALL DEPARTMENTS. NOW WE BRING THIS SAME POLICY FORTH AND ASK FOR YOUR APPROVAL. SO IN CLOSING, STAFF RECOMMENDS. >> SO MADAM CHAIR, IT HAS BEEN A WHILE SINCE MAY OR WHATEVER IT WAS, BUT I REMEMBER YOU GOING OVER THAT VERY THOROUGHLY. AND WE DID HAVE A LOT OF QUESTIONS. AND YOU ADDRESSED THEM. ONE OF THE THINGS WE WERE MOST CONCERNED ABOUT AS WE ALWAYS ARE, IS THAT WE HAVE A FIDUCIARY RESPONSIBILITY TO MAKE SURE THAT NOBODY DOES ANYTHING WRONG FINANCIALLY. SO I THOUGHT YOU DID AN EXCELLENT JOB PRESENTING IT, I THINK IT IS AN EXCELLENT START AND I THINK ONE OF THE THINGS WE ALL AGREED IS THAT IF WE FOUND OUT THINGS THAT WEREN'T WORKING, WE WERE ALWAYS WILLING TO REVIEW THEM AND CHANGE THEM. >> THANK YOU. WE ACTUALLY BUILT IN THE POLICY, IF I MAY, A PROMISE TO YOU THAT WE WILL REVIEW THIS POLICY AT LEAST ANNUALLY. IF WE FIND DEFICIENCIES, IF CIRCUMSTANCES CHANGE, IT CAUSES US TO REVIEW THE POLICY. IT IS BUILT INTO OUR PROCESS AND WERE WE TO CHANGE IT, WE WOULD COME BACK FOR THE BOARD APPROVAL. >> GOOD, THANK YOU. >> QUESTIONS? >> I JUST WANT TO COMMENT, IT IS GOOD TO KNOW -- I REALIZE THAT WE ARE IMPLEMENTING SOME SCENES THAT WILL GRANT SOME EXTENDED AUTHORITY BEYOND THAT, WHICH WILL BE EXERCISED THROUGHOUT THE YEARS. AND WITH THAT, I WOULD HOPE THAT WE WOULD APPLY ALL CAUTION OR JUST LEAN UPON EACH OTHER WHEN WE NEED TO TAKE ACTION THAT MAY NOT BE WHAT WE ARE ACCUSTOMED TO, TO SHOW THAT IT ALIGNS ITSELF WITH THAT PARTICULAR SECTION OF THE PROCUREMENT POLICY AND EVERYTHING. AND I GUESS I WOULD WANT EVERYONE TO HAVE CONFIDENCE IN THAT. BUT I WOULD SAY THAT AT SOME POINT IN TIME, I DON'T KNOW IF THERE IS A COMMITTEE THAT HAS BEEN WORKING TOGETHER TO MAKE THIS HAPPEN COMFORTABLY AMONGST -- YOU ALL HAVING THE DELEGATED AUTHORITY QUANTIFIED SOMEWHAT AS IT RELATES TO BEING ABLE TO ACT AS A DEPARTMENT VERSUS JUST REQUIRING THE CEO'S APPROVAL. I CAN PUT IT IN A NUTSHELL, I DON'T LIKE STATING THINGS IN A WAY WHEREBY IT APPEARS TO BE QUESTIONING THE INTEGRITY OF ANY ONE. BUT I WOULD SAY THAT WHENEVER YOU ARE TAKING ANY ACTION YOU ARE UTILIZING YOUR INDIVIDUAL AND DEPARTMENTAL AUTHORITY, PLEASE HAVE A SUITABLE PAPER TRAIL AVAILABLE TO ASSURE THAT ALL TRANSPARENCY IS THERE TO AVOID ANY QUESTIONS OF LACK OF INTEGRITY TO CREATE THE ASSURANCE GOING FORWARD THAT THIS IS SOMETHING THAT WE CAN LIVE WITH WITHOUT UNNECESSARY MODIFICATIONS. BECAUSE WE DON'T SEEM TO WELL DOCUMENT OUR ACTIONS AND THAT IS THE PIECE THAT GOES HAND-IN-HAND WITH HAVING THINGS -- I. HAVE SEEN MANY INSTANCES WHERE THERE ARE WELL WRITTEN AND OUTLINE NO GAPS POLICIES. BUT WHEN WE IMPLEMENT THOSE POLICIES OR TAKE THOSE ACTIONS, WE HAVE A TENDENCY TO RELY UPON [00:25:02] THE HISTORY OF THE INDIVIDUAL IN POSITION AND THE DECISIONS THAT HAVE BEEN MADE IN THE PAST THAT WERE GREAT AND COHERENT AND WORKED WELL FOR THE ORGANIZATION SO WE ARE NOT QUESTIONING IT, SO WE WILL NOT BOTHER WITH THAT PIECE. I GUESS WHAT I'M SAYING IS JUST MAKE SURE WHATEVER YOU DO, UTILIZES THE AUTHORITY THAT YOU DO IT WELL DOCUMENTED AND EXPECT THAT OF EACH OTHER. >> THANK YOU. AND IF IT ADDS CONFIDENCE TO THE BOARD, PLEASE KNOW THAT THE FINANCE DEPARTMENT, WHO WILL WE HEAR FROM SHORTLY, DISCUSSING THE BUDGET, SCRUTINIZES EVERY SINGLE DOCUMENT THAT COMES ACROSS OUR DESK. EITHER VIRTUALLY OR IN HARD COPY. AND THEY DON'T MISS ANYTHING. YOU HAVE GROWN CONFIDENT IN THEIR SKILLS OVER THE YEARS, JUSTLY SO. WE PUT THE POLICY TOGETHER, THEY WILL BE MAKING SURE THAT WE FOLLOW THE POLICY. WE AS AN ORGANIZATION. YOU CAN BE CERTAIN OF THAT, AND I'M SURE THEIR CFO WILL TESTIFY UNDER THE SAME. >> AND I CONCUR WITH EVERYTHING YOU JUST SAID. I WOULD JUST HOPE THAT THE SAME INDIVIDUALS ARE IN THOSE ROLES AS POLICY MOVES FORWARD. SO THAT IS WHY I SAY, CREATE IN CONJUNCTION WITH HAVING THE WRITTEN POLICY, HAVE A PRACTICE THAT COMPLEMENTS IT SO THAT IT REALLY DOESN'T MATTER WHO IS IN THAT CHAIR, THERE IS NO ROOM TO QUESTION INTEGRITY. >> YES, MA'AM, HEAR YOU LOUD AND CLEAR. YOU'RE ABSOLUTELY RIGHT. THE PURPOSE OF THIS POLICY IS TO DO EXACTLY THAT. WE HAVE HAD SOME LEGACY WALK OUT THE DOOR AND THEY CARRIED A LOT OF LOAD AND WE ARE TRYING TO FIGURE IT OUT AS WE GO. THIS POLICY DOES EXACTLY THAT FOR US, YOU ARE SPOT ON. WE AGREE WITH YOU. >> TO ECHO THAT, FOR THOSE OF YOU THAT HAVEN'T REVIEWED THIS, WHOEVER IS WATCHING, THERE ARE MANY LAYERS OF APPROVALS WITHIN THIS. AND I THINK THAT THIS LAYS OUT A VERY CLEAR PROCESS AND THAT THERE IS NO LESS THAN TWO PEOPLE LOOKING AT THE LOWEST THRESHOLD. SO FOR ME IT GIVES GREAT CONFIDENCE IN KNOWING THAT THE DEPARTMENT HAD -- THE DEPARTMENT DELEGATE, THE PURCHASING PERSON, FINANCE, THAT IS EVEN AT THE $5999 MARK. THERE IS FOUR DIFFERENT GROUPS THAT ARE NOT ATTACHED, LOOKING AT THIS THAT HAVE TO APPROVE EVERYTHING THAT GOES THROUGH. SO WITH THAT, IT GIVES ME CONFIDENCE AND I THINK JUST TO ECHO THAT, WE DON'T KNOW NECESSARILY WHAT THE ACTUAL FLOW OF THE PAPER TRAIL IS. SO KNOWING THAT THOSE APPROVALS HAVE TO BE MET, BUT MAYBE NOT KNOWING HOW THEY ARE ACTUALLY SIGNED OFF ON ALONG THE WAY IS MAYBE WHAT HER INTENT IN SAYING THAT IS, MAKING SURE THAT IT IS VERY TIGHT. AND POTENTIALLY AN INTERNAL AUDIT OR WHATEVER GOING FORWARD. I KNOW ALSO PURCHASING WAS LOOKING FOR THAT. SO I THINK YOU GUYS DO A REALLY GOOD JOB AT MAKING SURE THAT ALL OF THE CHECK MARKS ARE MET AND THAT WE HAVE FOLLOWED ALL OF THE GUIDELINES. AND I THINK THIS PUTS IT IN A VERY CLEAR FORMAT SO THAT THERE IS NO QUESTION ABOUT WHO NEEDS TO SEE WHAT AND WHAT THRESHOLD GOES TO EVERYBODY, INCLUDING US. SO THIS IS MUCH CLEARER, I THINK, THAN IT WAS IN THE PAST. AND THANK YOU VERY MUCH FOR THAT. >> IT'S A TEAM EFFORT. >> I THINK ALSO WHAT I HEAR EVERYBODY SAYING IS IT IS REALLY FINE TO HAVE A MANUAL AND WELL THOUGHT OUT AND EVERYBODY AGREES TO IT, BUT IT IS REALLY THE IMPLEMENTATION AND FOLLOWING, MAKING SURE PEOPLE FOLLOW THE MANUAL. I THINK THAT IS WHAT MISS PEARL IS TALKING ABOUT. THAT IT IS NOT JUST JUSTIFICATION, IT IS THE RIGHT THING TO DO AND THE RIGHT THING TO DO IT AND IT CAN WITHSTAND ANY AUDIT OR OVERSIGHT, EVERY SINGLE ACTION. THE ACTUALOT JUST THE MANUAL, BUT EVERYONE FOLLOWING IT. >> WITH THAT, CAN WE HAVE THE RESOLUTION READ? >> RESOLUTION NUMBER UA2026-20, A RESOLUTION BY THE FORT PIERCE UTILITIES AUTHORITY, FORT PIERCE, FLORIDA, ADOPTING AND IMPLEMENTING THE PURCHASING MANUAL AND REPEALING ALL PRIOR VERSIONS AND POLICIES REGARDING [00:30:02] THE SAME SUBJECT MATTER. INCLUDING RESOLUTION 2025-13, FORMAL SEALED BIDS AND RESOLUTION 2021-05, PUBLIC PRIVATE PARTNERSHIP P3 PROCUREMENT POLICY, PROVIDING FOR SCRUTINY AND EFFECTIVE DATE. >> CAN I GET A MOTION? >> MOTION TO APPROVE. >> SECOND. >> PLEASE CALL THE ROLL. [E.3. Resolution UA 2026-18 FY 2027 Annual Budget] >> THANK YOU. >> THANK YOU. >> THANK YOU. >> THANK YOU. MADAM CHAIR, MEMBERS OF THE BOARD, THE LAST ITEM THIS AFTERNOON IS A REQUEST TO APPROVE FY27 BUDGET. ON JULY 22ND, WE HOSTED A BUDGET WORKSHOP WITH THE BOARD. BASED ON THAT FEEDBACK WE ARE HERE TO FINALIZE THE BUDGET. I WOULD LIKE TO TAKE ANOTHER MOMENT TO THANK THE ENTIRE FPUA TEAM FOR THEIR HARD WORK, ESPECIALLY THE FINANCE TEAM. THEY HAVE BEEN WORKING A LOT OF LATE NIGHTS FOR QUITE SOME TIME. I THINK MICHELLE IS SCHEDULED FOR A VACATION AFTER THIS. [LAUGHS] >> WE HEARD ABOUT THAT. >> MICHELLE WILL PRESENT THIS ITEM. >> GOOD AFTERNOON, THANK YOU. THANK YOU FOR ALLOWING ME THE OPPORTUNITY TO COME PRESENT THE FPUA ANNUAL BUDGET AND AMENDING THE FISCAL YEAR '26. FOR TODAY'S AGENDA, WE WILL JUST BRIEFLY GO OVER THE BUDGET PREPARATION PROCESS. THINGS THAT CAME OUT SUCH AS THE BUDGET STRENGTHS, WEAKNESSES, CHALLENGES, OPPORTUNITIES AND THREATS. WE WILL GO OVER A BRIEF FINANCIAL OVERVIEW AND THEN GO INTO THE BUDGET REVENUES, BUDGET EXPENSES, CAPITAL IMPROVEMENT PLAN AND CURRENT OPTIONS. THE BUDGET PREPARATION PROCESS IS ALL YEAR ROUND. THIS YEAR'S KICKOFF HAPPENED IN MARCH, WHERE FINANCE HOLDS A KICKOFF MEETING WITH DEPARTMENT HEADS AND DIRECTORS AND WE KIND OF DEVELOP A TIMELINE AND LAUNCH SOME STANDARDIZED TEMPLATES. AND THROUGH JULY IS WHERE MOST OF IT IS, DEPARTMENTS WILL SUBMIT THEIR REQUESTS, WE WILL HOLD BUDGET REVIEW COMMITTEE MEETINGS, THAT IS WHERE MEMBERS OF FINANCE MEET WITH THE OTHER DEPARTMENTS TO TALK ABOUT THEIR OPERATIONAL AND FINANCIAL NEEDS. WITH BUDGET CONSTRAINTS OR WHAT THEY NEED BUDGET PLANNING FOR, HOW WE CAN HELP FINANCIALLY IN ORDER TO GET THE JOB DONE. ALSO WHAT CAME OUT OF THIS YEAR'S MEETINGS WERE A LOT OF THINGS WITH OUR SWOT ANALYSIS, STRENGTHS IN THE AREAS, OPPORTUNITIES, WHERE THREATS WERE AND OPPORTUNITIES IN EACH OF THEIR AREAS. WHEN WE GET THOSE REQUESTS BACK FROM THE DEPARTMENTS, FINANCE COMPILES THE COMPLETE DATABASE AND WE SENT IT TO OUR RATE CONSULTANT. SO WE HAVE THE OPPORTUNITY TO MEET MR. HAMILTON DURING OUR BUDGET WORKSHOP. HE DOES OUR ANNUAL RATES EFFICIENCY. HE TAKES ALL OF THAT DATA, HE KNOWS THAT WE ARE GOING TO TRY TO IMPLEMENT ANNUAL INDEXES, YOU HAVE ANNUAL ADJUSTMENTS WITH THE INDEX. SO HE TAKES THOSE REVENUES AND HE MATCHES THEM UP WITH THE BUDGETS AND SAYS OKAY, CAN YOUR BUDGET HOLD WITH RATE ADJUSTMENTS WITH THE INDEX? SOME YEARS HE WILL COME BACK AND SAY YOUR BUDGET IS TOO HIGH, YOU WILL HAVE TO MASSAGE IT A LITTLE BIT. SO I'LL START OFF BY SAYING THIS YEAR'S BUDGET THAT IS BEING PRESENTED WILL HOLD, OVER THE NEXT FIVE YEARS, WITH THE ANNUAL ADJUSTMENTS, WITH THE ANNUAL INDEX, EVEN WITH A POTENTIAL RETURN. THAT IS THE RESULT OF THIS YEAR'S FINANCIAL RATES EFFICIENCY AND YOU HAD THE OPPORTUNITY TO HEAR THAT THROUGH HIM THIS YEAR. AND THEN WE HAD THE BUDGET WORKSHOP IN JULY WHERE YOU HAD THE OPPORTUNITY FOR FEEDBACK APPRECIATE THAT. EVERYTHING BEING PRESENTED TODAY, NONE OF THE NUMBERS HAD CHANGED FROM THE WORKSHOP SO EVERYTHING THAT YOU HEARD AT THE WORKSHOP IS BEING PRESENTED TO YOU AGAIN TODAY. AND AFTER BOARD APPROVAL, POSSIBLE BOARD APPROVAL TODAY, NEXT MONDAY WE WILL BE PRESENTING TO THE CITY COMMISSION. AND THEN THROUGHOUT THE ENTIRE YEAR, AS ALSO DISCUSSED HERE WITH THE PROCUREMENT POLICY, MEMBERS OF FINANCE ARE CONSTANTLY LOOKING FOR COMPLIANCE AND ALSO DOING THAT WHEN IT COMES TO FINANCIAL, PROCUREMENT, INVENTORY SPEND, BUDGET TRANSFERS, EVERYTHING LIKE THAT. WE ARE CONSTANTLY MONITORING YOUR BUDGET VERSUS ACTUALS. WE'RE PREPARING BUDGET TRANSFERS, WORKING WITH THE DEPARTMENTS TO SAY YOU'RE 50% OF THE YEAR -- HALFWAY THROUGH THE YEAR, YOU'VE ALREADY SPENT 70% OF YOUR FUNDS. WHERE CAN WE HELP? WHERE ARE THERE OTHER AREAS THAT YOU MAYBE AREN'T SPENDING MONEY WE CAN TRANSFER MONEY FROM THERE? WE ARE ALSO REVIEWING PURCHASE ORDERS, WHICH IS ALSO PART OF PROCUREMENT. PURCHASE ORDERS WILL NOT NEED THE DEPARTMENT OF FINANCE IF THEY DON'T HAVE THE BUDGET MONEY FOR IT. IT IS PART OF OUR INTERNAL CONTROLS. WE WILL MAKE SURE THERE ARE NO PURCHASE ORDERS THAT COULD POTENTIALLY SPEND BEYOND THEIR BUDGET. IT IS PART OF OUR PROCESS THAT WE DO. DOES ANYBODY HAVE ANY QUESTIONS ON THAT? SO SOME RESULTS THAT CAME OUT OF [00:35:04] THE BUDGET REVIEW COMMITTEE'S MEETINGS THIS YEAR, WE KIND OF ASKED EVERYBODY IN THEIR AREAS WHERE THE STRENGTHS WEAKNESSES OPPORTUNITIES AND THREATS AND TRY TO CORRELATE IT WITH THE BUDGET, WITH THE ANNUAL BUDGET. STRENGTHS THAT WE HAVE SEEN ACCORDING TO OUR BUDGET WOULD BE THE FACT THAT WE DO THE ANNUAL ADJUSTMENTS PER THE INDEX EVERY SINGLE YEAR. THAT HAS PUT US, BY FAR, ONE OF THE NUMBER 1 THINGS IN A HEALTHY POSITION THIS YEAR. ALONG WITH THE IMPLEMENTATION OF THE DARK PROGRAM SINCE 2022, WHICH IS US MAINTAINING A HEALTHY AMOUNT OF CASH, MINIMAL PCA ADJUSTMENTS, HEALTHY RATE STABILIZATION FUND AS WELL AS GRANTS. I KNOW THAT WE MENTIONED IT AND I WILL HAVE A SLIDE LATER ON THAT TALKS ABOUT THE FACT THAT THE PUBLIC AFFAIRS GROUP ALONG WITH THE DEPARTMENTS IN EACH OF THE AREAS HAVE RAISED -- BEEN AWARDED OVER $100 MILLION IN GRANTS. THAT IS SOMETHING THAT IS DEFINITELY A STRENGTH. AS FAR AS BUDGET OPTIMIZATION, IT IS JUST HOW WE ARE COMMUNICATING WITH THE DEPARTMENTS ALL YEAR ROUND ON THEIR BUDGETS. SOME OF THE CHALLENGES THAT WE SEE WE ARE INCURRING IS CONTINUITY OF PERSONNEL. AS WE HAD MENTIONED IN A WORKSHOP, WE DO HAVE MORE THAN A HANDFUL OF LEADERSHIP MANAGEMENT PERSONNEL THAT ARE RETIRING. IT IS ALWAYS A CHALLENGE, BUT IT IS NOT SOMETHING THAT IS UNPLANNED. WE KNOW THAT THESE ARE HAPPENING AND WE ARE PLANNING FOR THEM. WE HAVE MANAGEMENT TRAINING, WE HAVE BUDGETS, OUR TRAINING BUDGET HAS INCREASED 28%. SO WE ARE IDENTIFYING THIS AND TRYING TO IDENTIFY THOSE INDIVIDUALS THAT CAN MOVE INTO THOSE ROLES AND MAKE SURE THAT THE TRANSITION IS SEAMLESS. DIGITAL TRANSFORMATION, WE MENTIONED SOMETHING ABOUT LEGACY SYSTEMS, WE ALSO HAVE LEGACY PROCEDURES. SAME THING, WE MAY HAVE SOME SYSTEMS THAT WE MIGHT HAVE BEEN USING FOR 20 YEARS THAT MIGHT BE SOMETHING IN FINANCE WE ARE USING, SOMETHING IN HUMAN RESOURCES AND NOW WE ARE WORKING TOGETHER, WHENEVER WE ARE TRYING TO IMPLEMENT NEW SOFTWARE. THE DEPARTMENTS ARE REALLY COLLABORATING WITH EACH OTHER AND SAYING, IS THERE SOMETHING WE CAN BOTH BENEFIT AND BUILD EFFICIENCIES SO THAT WE ARE NOT JUST KIND OF ADDING ON NEW SOFTWARE? AGING INFRASTRUCTURE, THE NATURE OF THE UTILITY INDUSTRY, AGING INFRASTRUCTURE AND THE SALES TAX DRIVES SOME OF OUR GOVERNMENT AND OTHER REQUIRED PROJECTS BUT THEN IF YOU COORDINATE WITH THE CITY, IT CAN ALSO REDUCE COSTS. SO IT IS KIND OF A CHALLENGE BUT IT IS ALSO A STRENGTH AS WELL. AND GROWTH. GROWTH IS GREAT, IT IS INCREASING YOUR CUSTOMER BASE, THAT IS WONDERFUL BUT IT CAN ALSO PUT A STRAIN ON CAPACITY IN SOME OF THE AREAS. THE OPPORTUNITIES THAT WE IDENTIFIED WITH THE DEPARTMENTS FOR SYSTEM EXPANSION AND INFILL, OBVIOUSLY WE WANT TO EXPAND BUT THERE ARE SOME AREAS THAT IF WE HAVE SOME LINES THAT ARE GOING PAST THE NEIGHBORHOODS, WE HAVE MORE AND HOW CAN WE GET THEM TO BE CUSTOMERS? WE ALSO ADDRESSED OUR INVESTMENT POLICY, WE HAVE BEEN HAVING SOME VERY WELL INVESTMENT EARNINGS BUT WE HAVE BEEN WORKING WITH OUR FINANCIAL ADVISOR TO IDENTIFY AREAS WE CAN IMPROVE. SO NEXT YEAR WE WILL BE SEEING SOME INCREASED INVESTMENT EARNINGS. AND BUSINESS CULTURE SHIFT. JUST AS THE PRESENTATION BEFORE WITH THE PROCUREMENT POLICY, ESPECIALLY WITH HAVING AN IN-HOUSE GENERAL COUNSEL, IT HAS REALLY BEEN HELPFUL TO HAVE THOSE DEPARTMENTS THAT HAVE A DIRECT LINE OF CONTACT, TO NOW GETTING APPROVED THE NEW PROCUREMENT POLICY. LET'S SEE. I'VE GOT A LIST. OVERALL PROCUREMENT, THE WAREHOUSE PROCUREMENT THE APPROVED LESS THAN A YEAR AGO HAS REALLY STREAMLINED PURCHASING OF INVENTORY. WHAT THAT HELPED -- HOW THAT HELPS THE BUDGET IS THAT SOME OF THE PROCUREMENT WAS TAKING A LONG TIME TO PASS THROUGH MANY HANDS. SO INTERNAL CONTROLS IS GREAT BECAUSE YOU HAVE SEVERAL EYES BUT INTERNAL CONTROLS CAN ALSO HOLD UP A PROCESS. SO WHAT WAS HAPPENING WITH SOME OF THE INVENTORY AREAS IS BY THE TIME THE WAREHOUSE GOT THAT PURCHASE ORDER, THE QUOTE HAD ALREADY EXPIRED SO WE HAD TO GO BACK. SO HAVING THAT POLICY APPROVED BY THE BOARD HAS SIGNIFICANTLY HELPED REDUCE OUR BUDGET. FPUA TERMS AND CONDITIONS, WE HAVE A STANDARD TEMPLATE FOR THAT. WHICH ALSO SPEEDS UP TIME TO GET THINGS THROUGH THE SYSTEM AND AT THE STANDARD TERMS AND CONDITIONS. AND IMPLEMENTATION OF THE CONTRIBUTION AND AID POLICY. SO WE HAD THAT SEVERAL MONTHS AGO WHERE DEVELOPERS ARE GOING TO BE RESPONSIBLE -- THE COST OF EXPANSION. THAT WILL DEFINITELY HAVE A POSITIVE IMPACT ON OUR BUDGET. SOME OF THE THREATS THAT WE IDENTIFIED IN THIS YEAR'S BUDGET, OBVIOUSLY LEGISLATION CHANGES, THE ONE THAT WE WILL IN THE NEAR FUTURE IS THE ELIMINATION OF THE WATER AND WASTEWATER OUTSIDE SERVICE CHARGE. BUT ALSO THERE ARE THINGS THAT THE FEDERAL LEVEL THAT CAN AFFECT US, SUCH AS FEMA. GENERAL COUNSEL IS ALWAYS SENDING US THINGS TO LOOK OUT FOR. SO WE ARE ALWAYS ON TOP OF THAT. [00:40:01] AND EVEN THOUGH WE IMPLEMENT THE INDEX ANNUALLY, IT IS JUST ALWAYS CONSTANTLY A LITTLE STEP BEHIND INFLATION. SO IF WE ARE RAISING REVENUES WITH THE ANNUAL INDEX BUT OUR COSTS ARE GOING UP A LITTLE BIT MORE, WE ARE ALWAYS JUST A BIT BEHIND. SO A FINANCIAL OVERVIEW BEFORE I GO INTO THE DETAILS, HOW WE ARE PERFORMING FIDUCIARY, IT IS THE PSC INDEX SINCE 2022, THE DART PROGRAM, THE PCA IS CURRENTLY AT $4. I DID A LITTLE ANALYSIS, WE HAVE ONLY ADJUSTED IT ONCE THIS YEAR. SO SINCE THE IMPLEMENTATION OF THE DART PROGRAM, EACH YEAR, WE HAVE ONLY ADJUSTED IT ONCE IN 24, IN 25 IT WAS TWICE AND THIS YEAR IT WAS ONCE. I TOOK A LOOK BACK OVER THE LAST PROBABLY DECADE, THERE WERE TIMES THAT WE CHANGED THE PCA NINE TIMES. EIGHT TIMES, FOUR TIMES. SO THE RATEPAYERS ARE REALLY GETTING THE BENEFIT OF THAT DART PROGRAM AS FAR AS PREDICTABILITY IN THE RATES. THE RATE STABILIZATION FUND, THE FACT THAT WE HAVE A FLOOR OF 8 MILLION AND A CEILING OF 12 MILLION IS ALSO HELPING THAT REDUCE THE NUMBER OF TIMES THAT WE HAVE TO INCREASE THE PCA OR DECREASE, MAINTAINING A HEALTHY AMOUNT OF CASH WITH IN EXCESS OF 90 DAYS. AND INCREASING OUR EMERGENCY FUND, WHICH IS CURRENTLY AT 900,000 TO TRY TO INCREASE THAT UP TO 5 MILLION. THAT WE ARE NOT SO RELIANT ON FEMA AND WE CAN BECOME MORE SELF-RELIANT. WE DID HAVE TWO CREDIT RATINGS SURVEILLANCES THIS YEAR. FITCH WAS IN FEBRUARY AND WE MAINTAINED OUR POSITIVE WHICH SAYS THAT THERE IS A POTENTIAL FOR US TO HAVE AN INCREASE IN RATING IN THE FUTURE. AND S&P MAINTAINED RATE STABLE WHICH MEANS THEY ARE NOT EXPECTING ANY KIND OF SIGNIFICANT CHANGE IN THE FUTURE. OUR FIVE YEAR CAPITAL IN O&M PLAN WHICH CAME OUT OF THE BUDGET REVIEW COMMITTEE WAS ABOUT 75-100 YEARS. OUR TOP PRIORITIES THAT CAME OUT OF THOSE MEETINGS WAS HOW WE HANDLED GROWTH AS FAR AS CAPACITY AND MAINTAINING OUR GOALS. WHAT CAME OUT OF THE WASTEWATER AREA WAS THE MAIN PROJECT TO JUST COMPLETE THE CONVEYANCE FROM THE ISLAND TO THE MAINLAND PLANT AND MAINTAINING MANHOLES. AND THE BIGGEST COMPONENT CHANGE TO THE O&M WAS THE SUBSCRIPTION AS A SERVICE MODEL, WHICH WE TALKED ABOUT. WHICH IS WHERE YOU CAN HAVE A SOFTWARE, BYE BYE IT, USE IT FOR TEN YEARS AND ALL OF A SUDDEN THE WHOLE MODEL IS COMPLETELY CHANGING EVERYWHERE. WE ARE GOING TO TALK ABOUT THE 2026 TAX EXEMPT REVENUE BONDS. IT WILL BE FOR 75 MILLION. THE AREAS THAT WILL PROBABLY USE THOSE PROCEEDS WILL BE THE WASTEWATER CONVEYANCE, THE -- ANY PROJECTS THAT DO WITH THE ELECTRIC CAPACITY ENHANCEMENTS, FIBER EXPANSION AND STORM HARDENING OF THE S. THE 27 CAPITAL RATE FUNDED BUDGET IS ABOUT $16 MILLION, OUR EIGHT YEAR AVERAGE IS ABOUT 12. BUT THERE WAS SOME FLUCTUATIONS, THERE WERE SOME HIGHS AND LOWS JUST BASED ON TODAY'S DOLLAR VALUE. 16 IS WHERE WE WANT TO LAY. OUR RATE FUNDED IS 152, SLIGHTLY HIGHER THAN NORMAL. THE MAIN DRIVERS OF THE INCREASE OVER THE AVERAGE IS PURCHASES FOR RESALE, PROPERTY INSURANCE, SUBSCRIPTION AS A SERVICE, BOND INTEREST. WE HAVE BUILT IT INTO THIS BUDGET. SO THERE WILL BE NO SURPRISES THROUGHOUT THE YEAR. WE HAVE INCLUDED THE PRINCIPAL, WE INCLUDED THE INTEREST PAYMENTS, WE KNOW HOW THAT WILL AFFECT OUR DEBT SERVICE. DEPRECIATION IS GOING TO INCREASE. JUST BUILT A $150 MILLION PLANT, SO WE ARE GOING TO START SEEING THE DEPRECIATION ON THAT, THAT IS IN SERVICE. AND AS USUAL, WE BUDGET OUR PERSONNEL TO EVERY POSITION FILLED ON OCTOBER FIRST. ANY QUESTIONS SO FAR? >> I HAD A QUESTION ON THE PREVIOUS SLIDE. >> THAT'S OKAY. >> YOUR WEAKNESSES/CHALLENGES, THE HALF CENT SALES TAX. TALK TO ME ABOUT THAT. ARE YOU SAYING THAT SHOULD IT NOT BE APPROVED AT THE NEXT ELECTION NEXT YEAR? >> BECAUSE IT DRIVES SOME OF OUR ENGINEERING PROJECTS OF WHICH WE DON'T HAVE CONTROL OVER. SO MAYBE -- >> YOU WERE DOING GREAT. >> IT IS BECAUSE WE DON'T CONTROL IT. BASICALLY WE HAVE ANOTHER AGENCY THAT IS GOING TO DRIVE OUR SPEND. SO THAT IS A CHALLENGE. BECAUSE WE COULD ALL OF A SUDDEN HAVE A PROJECT THAT IS NOT OURS AND WE MIGHT HAVE HAD FUNDING FOR A PROJECT THAT WE WANT TO DO, BUT WE HAVE TO TAKE THE FUNDING FROM THAT PROJECT AND THEN SPEND IT ON THIS. [00:45:01] THE POSITIVE ON THAT IS THAT IF WE DO COORDINATE AND WE ENDED UP HAVING TO DO THAT A COUPLE YEARS LATER, WE WOULD PROBABLY BE SAVING MONEY. >> AND I WOULD LIKE TO ADD, A REASON WE WOULD SAVE MONEY IS BECAUSE WE WOULD NOT BE DOING THE ROADWAY WORK. THE ROAD WORK IS BEING DONE BY THE CITY. AND WE HAVE TO DO ROAD WORK, ASPHALT OVERLAYS, IT IS VERY COSTLY. IT'S USUALLY MORE EXPENSIVE THAN THE ACTUAL UTILITY WORK. THE ROADWAY WORK IS VERY COSTLY. ALSO FOR OUR 27 BUDGET, THE HALF CENT SALES TAX WILL STILL BE IN THERE BECAUSE THAT WOULDN'T GO AWAY UNTIL 2028. IF IT IS NOT VOTED. WE ARE STILL IN THAT CYCLE OF THE SALES TAX BY THE NEXT TWO YEARS. >> I GUESS THAT'S WHY I WAS WONDERING FOR THE 2027, IF THEY TREAT IT AS A CHALLENGE, IT'S NOT SEPARATE AND APART FROM THE AGING INFRASTRUCTURE AND IT GOES HAND-IN-HAND. HOW'S THE HALF CENT SALES TAX GOING TO AFFECT YOUR 2027 BUDGET IN AN ADVERSE WAY, POSSIBLY? >> WE PRIORITIZE -- IT IS GOING TO REPRIORITIZE -- WE HAVE OUR OWN LIST OF PRIORITIES TO REHAB OR REPLACE CERTAIN ASSETS. THOSE ASSETS MAY NOT LINE UP WITH THE CITY OR THE COUNTY OR THE HALF CENT SALES TAX PLAN. SO WE WOULD HAVE TO PRIORITIZE THEIR ROADWAY PROJECT BECAUSE WE ARE IN THE RIGHT OF WAY BY PERMIT. SO WE HAVE TO RELOCATE, WE HAVE TO PRIORITIZE THOSE PROJECTS FIRST. AS MICHELLE MENTIONED, WE TRY TO WORK CLOSELY WITH THOSE AGENCIES, SPECIFICALLY THE CITY SO THAT WE CAN ALIGN THOSE PROJECTS TOGETHER. SO WHEN THEY ARE FIXING THE ROAD, WE'RE ALSO TRYING TO PRIORITIZE THE UTILITIES THAT ARE THE HIGHEST PRIORITY FOR US. >> SO IN THAT SENSE, YOU ARE SAYING THAT WHAT YOU MAY HAVE ALLOCATED THE USE OF FUNDS FROM THE HALF CENT SALES TAX, MAY NOT NECESSARILY GO TOWARDS THOSE PARTICULAR PROJECTS BECAUSE IT DOESN'T ALIGN WITH THE CITY? >> I DON'T THINK THAT WE NECESSARILY GET THE MONEY FROM THE HALF CENT SALES TAX, THAT GOES TO THE CITY AND THE CITY IS SAYING WE WILL DO THESE FIVE ROADS WITH THAT HALF CENT AND THEN THEY COME TO US AND THEY'RE LIKE HEY WE ARE GOING TO DO THESE ROADS AND WE ARE LIKE OH, WE CAN'T DO THESE PROJECTS WE WERE PLANNING ON BECAUSE NOW WE NEED TO SHIFT AND WE NEED TO DO THOSE PROJECTS SO THAT WE CAN SAVE OURSELVES SOME MONEY. EVEN THOUGH THE OTHER FIVE WERE OUR PRIORITY. WE HAVE TO MAYBE NOT DO THEM AND FOCUS ON THE ONES SO THAT WE CAN SAVE FUNDS IN THAT WAY. >> SO IT LIKELY CAN ADVERSELY AFFECT YOUR BUDGETARY INTENT? >> BECAUSE WE DON'T RECEIVE THE REVENUE FROM THE TAX SALES BUT IT DRIVES THE PROJECTS THAT THE CITY DOES. >> AND YOU HAVE TO BE ALIGNED WITH WHATEVER THE CITY INTENDS TO DO AS FAR AS THE USE OF THOSE FUNDS AS A PRIORITY TO WHAT YOUR INTENTIONS WERE? >> WE MIGHT HAVE TO MOVE SOME OF OUR INFRASTRUCTURE. >> YES, MA'AM. THAT IS A GOOD POINT. WE DON'T GET ANY REVENUE FROM THE SALES TAX. SO WE HAVE TO FUND THAT THROUGH RATES. >> AND I GUESS THE OTHER QUESTION -- THE INVESTMENT POLICY, ARE YOU REWRITING AN INVESTMENT POLICY? >> WE WILL CLARIFY SOME STUFF IN THERE. >> OKAY, ALL RIGHT. YOU ARE SAYING MAXIMIZE INVESTMENT EARNINGS AND I JUST SEE NEON LIGHTS SPELLING "RISK, RISK, RISK." SO I WANT TO BE SURE WE ARE NOT, YOU KNOW -- >> OUR POLICY IS GOING TO STILL DO SAFETY AND LIQUIDITY YIELD IN THAT ORDER. IT IS JUST A LITTLE OUTDATED. IT CAN BE A LITTLE BIT MORE CLEAR, IT COULD BE A LITTLE BIT MORE PROACTIVE IN ITS INVESTING ALONG THE PROCESS. >> SO MAYBE MORE STRATEGICALLY INVEST -- BE A LITTLE BIT MORE STRATEGIC WITH YOUR INVESTMENTS? AS IT RELATES TO YOUR ANTICIPATED EARNINGS? >> STRATEGIC BUT NOT RISKY. >> IT JUST MAKES ME NERVOUS. >> I PROBABLY WROTE THAT. [LAUGHS] >> IT JUST MAKES ME NERVOUS. >> YES, MA'AM, I COMPLETELY UNDERSTAND. AND ADDITIONALLY, THIS POLICY WOULD BE COMING BEFORE THE BOARD FOR APPROVAL. SO YOU WOULD SEE THE POLICY BEFORE IT CHANGES. >> THANK YOU. >> MADAM CHAIR, ISN'T THAT INVESTMENT POLICY SOMETHING THAT WE SHOULD BE LOOKING AT ALL THE TIME? >> IT IS. I BELIEVE IT -- AN UPDATE WAS GIVEN TO THE BOARD WHEN IT FIRST RETIRED, YOU WERE DUE FOR A PRESENTATION ANYWAY WHICH LED [00:50:03] INTO US LOOKING AT THE POLICY AND LOOKING AT OUR INVESTMENTS. SO WE DO REVIEW IT ANNUALLY. >> AS A MATTER OF FACT, I THINK WE WERE GOING TO PRESENT SOMETHING TWO MONTHS AGO OR SO, MAYBE LONGER. PRIOR TO THAT, MICHELLE CONNECTED WITH OUR FINANCIAL ADVISOR ABOUT OPPORTUNITIES AND THAT IS WHY WE ARE NOT PRESENTING IT BECAUSE WE ARE PROPOSING A CHANGE THAT WOULD STRATEGICALLY IMPROVE OUR EARNINGS. >> I THINK SECOND QUARTER LAST YEAR WE GOT SOME KIND OF PRESENTATION FROM THE FORMER C CFO. THANK YOU MICHELLE. >> LET'S GO INTO OUR KEY REVENUE DRIVERS. WE HAD TO KIND OF LOOK AT WHEN DEVELOPING OUR REVENUE BUDGETS. SO IN THIS BUDGET IS BUILT IN RATE ADJUSTMENTS THAT ALIGN WITH THE PSC INDEX OF 4.26 AND OUR BUDGETS ARE BUILT THAT THOSE WILL BE EFFECTIVE MARCH FIRST OF 2027. ALONG WITH THOSE RATE ADJUSTMENTS, WE HAVE TO LOOK AT GROWTH ADJUSTMENTS. HOW MUCH ARE UTILITIES GROWING? CONSUMPTION GROWING, CUSTOMERS GROWING? SO WHAT'S BUILT IN HERE IS ABOUT 1-2% INCREASE IN UNIT SALES AND ALSO INCREASING CUSTOMERS AND BASICALLY ALL SERVICES ACROSS THE BOARD WITH THE EXCEPTION OF FPUA WITH A BUILT IN INCREASE FOR FIBER, AS THROUGH SPENDING AS THEY WILL SPEND THE BOND PROCEEDS TO INCREASE THE NUMBER OF PARCELS PASSED IN ORDER TO GET MORE SUBSCRIBERS. THE CAPITAL IMPROVEMENT CHARGES FOR REVENUE WITH THE INCREASE IN THAT LINE ITEM ALLOWANCE WITH ECONOMIC TRENDS AND CONTINUED DEVELOPMENT OF THE SERVICE TERRITORIES. THOSE NUMBERS ARE DEVELOPED, WE WORK WITH ENGINEERING AND SAY WHAT ARE THE DEVELOPERS THAT HAVE SEEN INTEREST, WHAT SUPPLY AGREEMENTS ARE YOU DEVELOPING? SO THERE IS AN INCREASE IN CAPITAL IMPROVEMENT CHARGES IN THE BUDGET. ALSO IN THE BUDGET IS GRANT REVENUES EXPECTED TO CONTINUE. THE BUDGET FOR GRANTS FOR 27 IS $15.1 MILLION AND IT IS RELATING TO THE CONVEYANCE ELECTRIC GRID RESILIENCY, SEWER CONVERSIONS, CYBERSECURITY AND MORE. ONE OF THE OTHER THINGS ABOUT REVENUE LIKE I TALKED ABOUT EARLIER, WAS THE ELIMINATION OF THE 25% SURCHARGE FOR WATER AND WASTEWATER. THAT IS BUILT INTO OUR BUDGET THAT WE WILL NO LONGER BE CHARGING THAT EFFECTIVE JULY FIRST, 2027. SO IT DIDN'T IMPACT OUR BUDGET FOR 2027 AS MUCH BECAUSE IT IS ONLY THREE MONTHS OUT OF THE YEAR. BUT IN 2028 IS WHEN WE WILL REALLY SEE THAT IMPACT IN THE REVENUES. IF YOU WANT TO LOOK AT OUR GROSS REVENUES BY SYSTEM, FOR 27, OUR REVENUES ARE BUDGETED AT 175 MILLION. OUR FIVE YEAR AVERAGE HAS BEEN ABOUT 170 MILLION IN THE PAST FIVE YEARS. A LOOK AT OUR GROSS REVENUES BY SYSTEM JUST FOR 27, OUR GROSS REVENUES ARE ABOUT 175 MILLION IN FISCAL YEAR 27. YOU WILL NOTICE THAT ELECTRIC IS THE LARGEST AT ABOUT 87 MILLION AT 50% OF OUR GROSS REVENUES. WASTEWATER AT 42 MILLION IS UP 24%, WATER AT 35 MILLION MAKES UP ABOUT 27% OF OUR REVENUES, FOLLOWED BY NATURAL GAS AT 4% AND FIBER AND OTHER IS ABOUT 1% EACH. SO NOW WE LOOK AT THE SAME SCOPE OF THE 175 MILLION SOURCE. GENERAL SALES, COMMERCIAL IS THE HIGHEST AT 77 MILLION, THAT MAKES ABOUT 44% OF OUR GROSS REVENUES. RESIDENTIAL AT 60 MILLION IS AT 34%. NONOPERATING REVENUES ARE AT 12% AND THAT IS BASICALLY YOUR INVESTMENT INCOME, YOUR GRANT REVENUE THAT FALLS UNDER THE CATEGORY OF NONOPERATING. OUR CAPITAL IMPROVEMENT CHARGES OR CONTRIBUTIONS IN AID COMBINED TO ABOUT 7% AND OTHER OPERATING IS 3% OF REVENUES. SO KEY EXPENSE DRIVERS THAT WE HAD TO WORK THROUGH THIS YEAR WITH ALL OF THE DEPARTMENTS, NUMBER 1, PURCHASES FOR RESALE. YOU WILL SEE THAT IN THE LATER CHART, IT MAKES UP 35% OF OUR BUDGET. SO IT IS ONE OF OUR KEY DRIVERS. FOR FISCAL YEAR '26, THE COST IS ONE HOUR FROM PURCHASE POWER WAS 82.73. IT IS PROJECTED IN FISCAL YEAR 27 TO BE BELOW $80 PER MEGAWATT HOUR. THAT WILL REDUCE OUR EXPENSES. BUILT INTO THE BUDGET IS THE ANTICIPATED ANNUAL DEBT SERVICE. THERE IS AN INTEREST PAYMENT THAT IS ALSO BUILT INTO OUR EXPENSES. PROJECTED O&M COSTS RIGHT NOW, STILL OPERATING TWO PLANS BUT WE ARE STILL TRYING TO ACCUMULATE THE COST OF THE NEW PLANT. WE ARE SEEING OH, WE HAVE TO ADD [00:55:02] LANDSCAPING TO A CONTRACT OR JANITORIAL. WE ARE STILL COLLECTING ALL OF THOSE THAT ARE TRANSFERRING FROM THE OLD PLANT TO THE NEW PLANT. JUST LIKE EVERYBODY ELSE, RISING COSTS OF LABOR MATERIALS. WHAT'S BUILT INTO THIS BUDGET IS A 3.5% ANNUAL PERFORMANCE ADJUSTMENT WHICH AMOUNTS TO ABOUT 741,000. LIKE I SAID EARLIER, EVEN THOUGH OUR REVENUES WILL INCREASE 2.46 ON THE INDEX, SOMETHING THAT WE ALWAYS HAVE TO BE MINDFUL OF JUST BE KIND OF PUT IN OUR EXPENSES IS A 3% MULTIPLIER. SO SOME CATEGORIES INCREASE 2.46, SOME ARE INCREASING THREE. SOME ARE INCREASING WELL BEYOND THAT. WE ARE TRYING TO MANAGE THE BUDGET THAT WAY. IN THE MEANTIME IN THE ELECTRIC INDUSTRY, JUST THE KEY THING HERE, THE ELECTRIC INDUSTRY IS RELEASING THE MOST OF THE LEAD TIME PROBLEMS WITH TRANSFORMERS, BREAKERS, SWITCHES AND CABLES. AND HOW THAT IS AFFECTING IT IS JUST WHERE A LEAD TIME COULD BE TWO OR THREE YEARS, IT IS REALLY KIND OF HARD TO GET A CONTRACT OR A PURCHASE ORDER THAT'S GOING TO HOLD THAT PRICING FOR VERY LONG. TO ANSWER ONE OF YOUR QUESTIONS, WE DID LOOK IN 1993, THERE IS AN AUTO TRANSFORMER THAT WAS $1.2 MILLION. SO WE ARE THINKING THAT IS THE PRICE OF THE TRANSFORMER. >> THANK YOU. >> AND SUBSCRIPTIONS AS A SERVICE, THAT IS JUST THE BUSINESS MODEL THAT IS INCREASING THE IT BUDGET. HOW WE ARE TRYING TO MANAGE THAT IS JUST THE NEGOTIATIONS. YOU BROUGHT UP EARLIER THAT WE ARE REALLY TRYING TO NEGOTIATE THESE CONTRACTS. IF THERE ARE ANNUAL ESCALATIONS THAT ARE BUILT IN, THAT ARE BEYOND OUR 3% OR OUR INDEX, WE ARE NOT AFRAID TO SAY THINGS ARE GOING TO MOVE ON. WE SEEM TO BE SUCCESSFUL IN NEGOTIATING THAT. THERE IS JUST NO WAY THAT WE CAN SIGN CONTRACTS THAT HAVE SEVEN, EIGHT, 9% ESCALATIONS WHEN WE ARE BUILDING BUDGET OFF OF 3%. IT IS JUST NOT SUSTAINABLE. SO LEADERSHIP HAS REALLY GOTTEN TOGETHER, PROCUREMENT HAS REALLY DONE A GREAT JOB IN STARTING THESE DISCUSSIONS TO VENDORS. ON TO THE EXPENSE BUDGET. SO OUR O&M CAPITAL BUDGETS COMBINED IS $221 MILLION. OUR FIVE YEAR AVERAGE FOR O&M -- TOTAL O AND M AND TOTAL CAPITAL COMBINED HAS BEEN ABOUT 214 MILLION. SO WHAT THAT IS IS OUR COMPLETE O&M PURCHASE FOR RESALE, IT IS RATE FUNDED CAPITAL AND IT IS OUR FUNDED CAPITAL. SO JUST TO KIND OF CARVE OUT A PIECE OF THAT IS REALLY JUST TO FOCUS ON THE RATE FUNDED, THAT IS THE RATE FUNDED EXPENSES OR WHAT'S GOING TO BE FUNDED BY YOUR RATE PAYERS. YOUR UTILITY BILLS. OUR FIVE YEAR AVERAGE IS ABOUT 137 MILLION FOR FISCAL YEAR 27 IT IS GOING TO BE 149 MILLION WHICH IS ABOUT A 7% INCREASE FROM FISCAL YEAR '26. SO 79 MILLION IS OUR RATE FUNDED O&M OPERATIONS AND MAINTENANCE, PURCHASES FOR RETAIL IS AT 54 MILLION AND OUR RATE FUNDED CAPITAL IS ABOUT 16.6 MILLION. JUST A LITTLE BREAKDOWN OF THE TWO OF THEM COMBINED, YOU WILL SEE OUR OPERATIONS AND MAINTENANCE BUDGET IS 152 MILLION AND OUR CAPITAL BUDGET IS LAYING RIGHT NOW AT ABOUT 69 MILLION. OF THAT TOTAL BUDGET OF 221MILLION, 67% IS FUNDED BY RATES. 10% WILL BE FUNDED NEXT YEAR BY BOND PROCEEDS, NONCASH IS 9% AND THAT IS YOUR DEPRECIATION AMORTIZATION CONTRIBUTION IN AID AND IMPROVEMENT CHARGES WILL FIND 6% AS LONG AS GRANTS WILL FUND 6% OF THE BUDGET AS WELL. ANOTHER LOOK AT OUR OPERATIONS AND MAINTENANCE EXPENSES BY CATEGORY, JUST TO KIND OF SEE WHAT ROLLS UP INTO THAT. SALARIES AND BENEFITS WILL BE THE BLUE BARS DOWN AT THE BOTTOM, PURCHASES FOR RESALE AT 54 MILLION. OTHER OPERATING EXPENSES ARE YOUR CONTRACTUAL SERVICES, YOUR OPERATING SUPPLY, THINGS OF THAT NATURE. THE 45 MILLION. CITY DISTRIBUTION WILL GO UP 3.5%, BUDGETED TO ABOUT 8.3 MILLION FROM THIS YEAR'S 8 MILLION. NONOPERATING EXPENSES, THAT IS YOUR INTEREST EXPENSE, STORM EXPENSES, THINGS LIKE THAT. THAT IS 8 MILLION AND THEN WE HAVE A CONTINGENCY. THIS IS THE CHART I WAS TALKING ABOUT EARLIER, IT IS A GOOD VISUAL TO SEE HOW MUCH PURCHASES FOR RESALE, ACCOUNTS FOR O&M BUDGET, IT IS 35% OF THE BUDGET. PERSONNEL SERVICES AND BENEFITS USUALLY MAKES UP ABOUT 23-25%, IT HAS BEEN THAT WAY FOR 7-8 YEARS AND WE ARE JUST BUSINESS [01:00:02] AS USUAL. I'M TALKING ABOUT PERSONNEL IN FULL TIME POSITIONS. LOOKING AT THIS CHART, YOU CAN DEFINITELY SEE THAT WE JUST OPERATE AT NORMAL LEVELS. THERE ARE YEARS IT KIND OF FLUCTUATES TO, THREE, BUT WE ARE OPERATING AT 297 APPROVED FULL TIME EMPLOYEES. THAT IS GOING TO BE THE TARGET FOR NEXT YEAR AS WELL. CURRENTLY WE HAVE TEN VACANCIES. THAT FLUCTUATES DAY BY DAY, I THINK WE MAY HAVE JUST HIRED TWO THIS WEEK. SO WE MIGHT BE AT EIGHT YESTERDAY. SO TURNOVER RATIO WAS 9% AND I KNOW OUR 2026 GOAL IS TO BE UNDER 10% WHICH IS VERY GOOD. ONE OF OUR LARGEST COMPONENTS IN OUR O AND M IS THE DISTRIBUTIONS IN THE CITY OF FORT PIERCE. THIS GRAPH SHOWS YOU BACK FROM 2012, HOW MUCH OUR CITY DISTRIBUTION TO THE CITY HAS BEEN CALCULATION IS APPROXIMATELY ABOUT A 6% CALCULATION OFF OF AN ADJUSTED GROSS REVENUE AMOUNT. THIS YEAR WE PAID FOR THE CITY $8,069,000 AND ACCORDING TO OUR BUDGETED REVENUES, THE CITY WILL RECEIVE 8.3.4 DOLLARS. GOING ON TO OUR CAPITAL BUDGET BY SYSTEM, PART OF WHAT YOU WERE PROVING TODAY IS THE CAPITAL BUDGET FOR 27, BUT ALSO KIND OF THE FIVE YEAR CIP THAT HAS BEEN PRESENTED IN THE BOOK AS WELL. IT IS JUST A SIDE BY SIDE LOOK AS TO WHAT IS BEING APPROVED FOR FISCAL YEAR 27 AND THEN OUR GAME PLAN FOR THE NEXT FIVE YEARS. SO YOU REVIEW THE FIVE YEAR BUT ONLY THE FUNDING FOR FISCAL YEAR 27. YOU WOULDN'T BE APPROVING THE 257 MILLION, JUST THIS 60 MILLION. BUT IT IS GOOD TO SEE A SNAPSHOT SIDE BY SIDE AS TO WHAT IS HAPPENING THIS YEAR VERSUS WHAT IS HAPPENING OVER THE NEXT FIVE YEARS. SO YOU CAN SEE IN THE CURRENT YEAR, 46% OF THE CAPITAL BUDGET WILL BE SPENT ON WASTEWATER, WITH 25% FOR ELECTRIC, FOLLOWED BY WATER AND ADMIN BOTH AT 12%. AND WHEN YOU ALIGN THAT WITH THE FIVE-YEAR PLAN, WHERE THE MOST MATERIAL SHIFT IS, YOU WILL SEE LESS IN WASTEWATER AS THE CONVEYANCE SYSTEM GETS COMPLETED AND YOU WILL SEE MORE OF A HEAVY FOCUS IN THE ELECTRIC AREA AS WE START WITH ELECTRIC ENHANCEMENTS, THE TRANSFORMERS, THE GROWTH, THE SUBSTATION, THE ENHANCEMENTS THAT WE NEED TO DO IN THE ELECTRIC SYSTEM. YOU WILL SEE A FOCUS SHIFT. A FEW OF THE CAPITAL TREND BY FUNDING SOURCE, THE YELLOW BARS REPRESENT THE DEBT IN 27, IT WILL FUND 34% WHICH WILL BE FUNDED BY THE BOND PROCEEDS. RATES WILL FUND 24%, CONTRIBUTION AID NCIC FROM OUTSIDE FORCES WILL FUND 20%, ALMOST EVEN WITH THAT IS GRANTS AT 19%. 2% OF THE CAPITAL BUDGET WILL BE FUNDED BY THE SETTLEMENT FUNDS THAT WE HAVE BEEN RECEIVING. YOU WILL SEE MORE OF THAT IN THE FIVE-YEAR PLAN, HOW WE WILL SPEND THOSE FUNDS. TO DATE I BELIEVE WE HAVE RECEIVED 8000000 OUT OF 10000000 IN THE SETTLEMENT FUNDS. AND THEN WE HAVE A SMALL AMOUNT OF CONTINGENCY. YOU WILL NOTICE AS WELL, THE GRANT FUNDING 20% IN FISCAL YEAR 27, JUST DON'T LET THAT OVERSHADOW HOW MUCH THEY FUNDED IN THE 26 BUDGET. THERE HAS BEEN A LOT GOING ON IN THOSE AREAS. SPEAKING OF GRANTS, HERE'S A CHART THAT SHOWS HOW GREAT THE TEAM HAS DONE WITH GETTING GRANTS AWARDED. TO DATE, OVER $100 MILLION. IT IS SOMETHING TO BE COMMENDED, 44 MILLION IN COMPLETED GRANTS, 54 IN ACTIVE AND CONTINUING ONBOARDING AND ABOUT 10 MILLION THAT IS PENDING. SO THAT AMOUNT -- IF WE DIDN'T HAVE THAT $100 MILLION IN GRANTS WE WOULD HAVE EITHER RATEPAYERS OR TAKE ON ADDITIONAL DEBT WHICH WOULD THEN AFFECT THE DEBT SERVICE AND AFFECT THE RATE PAYERS. >> QUICK COMMENT ON THAT FOR REIMBURSEMENT OF THOSE, THAT HAS REALLY HELPED US. SO THANK YOU TO THE TEAM THAT HAS BEEN COLLECTING THIS GRANT MONEY AND BEING ABLE TO PUT IT BACK INTO -- >> THEY WORK VERY TIMELY IN WORKING WITH IT, THE PUBLIC AFFAIRS GROUP WORKS REALLY WELL WITH THE RECEIVING DEPARTMENTS TO GET THAT DOCUMENTATION BACK, THEY HAVE QUARTERLY REPORTS THEY HAVE TO SUBMIT, THEY ARE SUBMITTING THE REIMBURSEMENTS TIMELY, THOSE ARE THINGS THAT WE CAN CONTROL. WE CAN'T CONTROL THE AGENCIES AND HOW FAST THEY ARE REIMBURSING -- OF WHICH WE ARE HAPPY WITH, BUT OUR TEAM IS DOING THEIR DUE DILIGENCE TO MAKE SURE THAT IT IS NOT ON US. THAT THE INFORMATION IS GETTING [01:05:04] THEM TO REIMBURSE TIMELY. AND IT HAS BEEN HELPFUL WITH US NOT HAVING TO TAKE THE LINE OF CREDIT THAT WE HAD, IT HAS BEEN ABLE TO POSTPONE THE DEBT ISSUE A LITTLE BIT LONGER. SO ALL OF THOSE THINGS ARE COMING TOGETHER. SPEAKING OF UPCOMING REVENUE BONDS, UTILITY REVENUE BONDS, IT IS A VERY COMMON PRACTICE IN THE UTILITY INDUSTRY, WE ARE CAPITAL INTENSIVE BUSINESS. SO MUNICIPAL BONDS ARE ISSUED TO FINANCE THE CONSTRUCTION OF IMPROVEMENT OF PUBLIC UTILITIES AND INFRASTRUCTURE. IT IS BACKED BY REVENUE FROM PROJECTS OR SOURCE, SO WHEN WE SAY REVENUE BONDS, IT MEANS THAT IT IS BEING BACKED BY OUR OWN REVENUE SOURCE. PROCEEDS ALLOW UTILITIES TO FUND LARGE CAPITAL PROJECTS WHILST SPREADING COSTS OVER TIME THROUGH ANNUAL DEBT SERVICE PAYMENTS. AND WHAT THAT MEANS IS YOUR CURRENT AND FUTURE RATEPAYERS ARE PAYING FOR IT. SO YOUR CURRENT RATEPAYERS AREN'T PAYING FOR SOMETHING THAT IS GOING TO BENEFIT THE NEXT GENERATION AND THE NEXT GENERATION. WHEN YOU HAVE A BOND SPREAD OVER 30 YEARS, WELL, DIFFERENT GENERATIONS ARE HELPING PAY FOR WHAT THEY ARE BENEFITING FROM. AND IT ALLOWS A GRADUAL, PREDICTABLE AND PLANNED RATE ADJUSTMENT. THESE ARE THE PROJECTS THAT ARE PROPOSED FOR THE DEBT ISSUANCE. SO WE HAVE THE FIRST ROUND IN 2026, BECAUSE WE ARE THINKING IT WILL BE AT THE END OF THIS CALENDAR YEAR, OF 75 MILLION. AREAS THAT WILL BENEFIT FROM THE BOND PROCEEDS WILL BE THE CONVEYANCE SYSTEM, THE ELECTRIC SYSTEM UPGRADES, HARDENING OF THE ESC, COMPLETIONS OF A AND I AND THE WASTEWATER AREA, AS WELL AS AN ADDITIONAL $5 MILLION WHICH IS BASICALLY PART OF OUR 10-YEAR BUSINESS AND FINANCIAL PLAN TO BE ABLE TO EXPAND THE FIBER AS QUICKLY AS YOU CAN AND DO A GOOD JOB. WHAT DOES THAT LOOK LIKE TO DEBT SERVICE? WHAT IS THE FUTURE DEBT ISSUANCE? LOOK TO OUR DEBT SERVICE RATIOS. SO THE BOTTOM LINE RIGHT HERE IN BLUE, THAT IS IF WE DID NOTHING. SO FOR RIGHT NOW, WE ARE IN ABOUT A $12 MILLION ANNUAL DEBT SERVICE, WHICH IS A REMINDER, IS YOUR ANNUAL PRINCIPAL AND INTEREST PAYMENTS COMBINED. SO AFTER 2030, WE WOULD BE AT $8 MILLION. BUT FOR RIGHT NOW WE ARE AT 12. SO THIS MIDDLE BAR IS WHERE WE WILL BE AFTER THE FIRST ISSUANCE IN 2026. IT WILL JUMP UP TO 14 AND BE ABOUT 16 FOR TWO YEARS AND THEN COME BACK DOWN AND HANDLE THE DEBT SERVICE. AND WITH THE FIRST DEBT ISSUANCE, OUR SERVICE RATIO WILL BE AT ABOUT 2.4. >> THANK YOU. >> AND THE NEXT STEPS, I'VE BEEN HEARING ABOUT THIS DEBT ISSUANCE FOR A LONG TIME, WHAT'S GOING ON? WHAT'S THE NEXT STEPS, WHEN ARE YOU GOING TO COME BEFORE US? WE ARE GOING TO START, AGAIN, ENGAGING THE FINANCING TEAM, THE FINANCIAL ADVISOR COUNCIL. TO START COMPILING THAT DATA. WE HAVE TO FINISH WORKING WITH THE DEWBERRY, OUR ENGINEERING REPORT, THEY WORK TOGETHER SO DEWBERRY WILL GET THE ENGINEERING REPORT, THEY HAVE BEEN WORKING TOGETHER WITH ALL OF THE OPERATIONS AND ENGINEERING GROUPS, THEY LOOK AT OUR CIP THAT WE ARE PUBLISHING, THEY LOOK AT ALL OF THE PROJECTS THAT WE HAVE TARGETED AND THEY TAKE AN ENGINEERING SCOPE AND SAY OKAY, WE KNOW YOUR INFRASTRUCTURE, WE KNOW WHAT YOU ARE TRYING TO DO. DOES YOUR CIP MAKE SENSE? BECAUSE THE PROJECTS YOU SAY YOU WERE GOING TO DO, DOES THAT MAKE SENSE ENGINEERING WISE, OPERATION WISE? AND THEN THEY COME IN AND SAY IF THEY WANT TO DO THIS CIP, DO THEY HAVE THE FUNDING FOR IT? DOES THE REVENUE BACK IT TO COLLABORATE AND IT WILL PROVIDE A COMBINED REPORT. THAT WILL BE HAPPENING OVER THE NEXT COUPLE OF MONTHS. BEFORE I GO INTO THE RECOMMENDED MOTION OR ANYTHING, DO YOU HAVE ANY QUESTIONS? AND SO JUST TO REITERATE, AMONG APPROVING THE RESOLUTION, I JUST WANT TO KNOW -- SO YOU KNOW YOU WILL BE APPROVING THE 26 AMENDED O AND M BUDGET, THE 27 O&M BUDGET AND THE 27 CAPITAL BUDGET ONLY, PLUS WHAT HAS ALSO KIND OF BEEN BUILT IN THERE IS YOU ARE APPROVING THE PROJECTS LISTED IN THE CIP. ANY ADMINISTRATIVE BUDGET TRANSFERS, WHICH WE HAVE KIND OF TALKED ABOUT, BUDGET TRANSFERS BETWEEN OPERATING SUPPLIES AND SUBSCRIPTIONS OR THINGS LIKE THAT, AS LONG AS IT IS WITHIN THE BUDGET. APPROVING THE PERSONEL BUDGET COMPONENT OF THIS AND US BEING [01:10:03] ABLE TO DO THE PERFORMANCE ADJUSTMENTS IN OCTOBER. AS WELL AS BUILDING IN THE ROUTINE SPAN, THE $10 MILLION ANNUAL INVENTORY SPEND. AND IN CASE YOU WANTED TO KNOW, AS OF A COUPLE OF WEEKS AGO, WE WERE AT 5.5 MILLION. SO WE ARE MORE THAN HALFWAY THROUGH THE YEAR AND NOT EVEN HALFWAY TO THAT $10 MILLION SPEND. SO THAT PROCESS REALLY SEEMS TO BE WORKING OUT. WE ARE AUDITING THAT AS WELL. SO WE HAVE QUARTERLY AUDITS ON THAT. WITH APPROVING THIS BUDGET COMES ALL OF THAT. >> ONE THING THE PUBLIC MAY NOT KNOW IS WHEN WE ARE APPROVING THIS, WE ARE LOOKING AT THE NUMBERS ALTOGETHER. BUT EACH DIVISION OF THE UTILITY HAS THEIR OWN AND THEY HAVE TO REMAIN WITHIN THAT. THERE IS NO TRANSFERRING BETWEEN DIFFERENT UTILITIES, CORRECT? UNLESS THERE IS AN OVERLAP OF PERSONNEL OR SOMETHING, FOR EXAMPLE. BUT I THINK IT IS IMPORTANT TO MAKE SURE THAT IS NOTED, AS WELL AS ALL OF THIS, TO BE SAID, THAT OUR RATES ARE STILL SIGNIFICANTLY LOWER. AND I KNOW WE ARE ONLY COMPARING ELECTRIC ON THAT, BUT I THINK IT IS IMPORTANT TO SHOW THAT WE ARE REMAINING TO KEEP OUR RATES EXTREMELY LOW AND STILL ABLE TO GET THESE THINGS DONE AND GIVE BACK TO THE COMMUNITY. IT IS IMPORTANT THAT I THINK WE SAY THAT. >> MADAM CHAIR, YOU REMINDED ME THAT OUR GOAL IS ALWAYS TO HAVE EACH SYSTEM'S SUPPORT TO MAINTAIN ITSELF. SELF-SUSTAINING, YES. SO JUST TO BUILD ON WHAT YOU JUST SAID. >> EVEN THOUGH WE ARE ONE UTILITY AS FAR AS BOND OR ONE SYSTEM, WE DO MAKE SURE THAT EACH SYSTEM IS AS SELF-SUFFICIENT AS POSSIBLE. >> SO THAT RATEPAYER CAN SAY I'M PAYING FOR THIS PARTICULAR SERVICE AND IF THEY ARE NOT GETTING ANY OTHER, IF THEY ARE NOT SHARING ANYTHING ELSE, RIGHT? >> IT IS OUR STRUCTURE TO BE SELF-SUFFICIENT FOR THAT UTILITY ONLY. >> ANY FURTHER QUESTIONS? >> I JUST HAVE ONE, JUST A COMMENT. AS IT RELATES TO -- I'VE NOTICED ON SOME OCCASIONS YOU HAVE REFERENCED THAT WE ARE HALFWAY THROUGH THE BUDGETARY YEAR FOR 2026. AND ON A COUPLE OF OCCASIONS YOU MENTIONED THAT WE'VE ONLY UTILIZED LESS THAN HALF THE BUDGETARY AMOUNT. THERE MAY BE INSTANCES IN THE FUTURE -- WHERE YOU MAY EXCEED PROPORTIONATELY BASED UPON THE TIME OF YEAR AND THE ANNUALIZED BUDGET. BUT IT IS WELL SUBSTANTIATED SHOULD WE HAVE BUDGETED FOR SOMETHING, SOME TYPE OF OCCURRENCE THAT IS NOT A RECURRING ON A MONTHLY BASIS, THAT WOULD ABSORB A CERTAIN PORTION THAT MAY DRIVE THAT NUMBER TO BE MORE THAN, SAY, 50% OF WHAT WE WOULD SUBSTANTIATE IN PRESENTATIONS THROUGHOUT THE YEARS, SHOULD WE EXCEED THE TIME TABLE WITH THE ACTUAL DOLLAR AMOUNT. I GUESS I ASK THAT AS YOU MOVE FORWARD INTO THE YEAR. >> VERY GOOD POINT. AS FAR AS THE INVENTORY, YOU MIGHT SEE A BIT OF SPEED UP IN INVENTORY AS WE GET PREPARED FOR STORM. ALL OF A SUDDEN THAT IS VERY SEASONAL, WHERE IT'LL START TO BUY MORE STORM STOCK FOR STORM SEASON. >> JUST SUPPORT IT WITH -- MAKE SURE YOU ARE PROVIDING SOME TYPE OF SUPPORT FOR THE BOARD AND THE UNDERSTANDING OF THE ACTUAL RESIDENTS. >> MADAM CHAIR, ONE OF THE THINGS YOU TALKED ABOUT IS THE INCREASE IN PROPERTY INSURANCE, I THINK. >> WE DID HAVE AN INCREASE IN PROPERTY INSURANCE BECAUSE OF THE NEW WASTEWATER PLANT. >> OF COURSE, THAT MAKES SENSE. BUT ALSO, I UNDERSTAND IF MIT SWEEPS THROUGH AND THEY REEVALUATE STRUCTURES AND WHAT THEY ARE INSURING, THEN THAT IS HAPPENING ALL OVER FLORIDA, THAT IS ONE OF THE REASONS WHY INSURANCE RATES ARE SO HIGH. BUT ALSO IS CYBERSECURITY IN THEIR, IN THAT? >> WE HAVE A CYBERSECURITY POLICY. >> IS THAT A NEW THREAT IN TERMS [01:15:02] OF UTILITIES? >> YES. SO WE TRY OUR BEST TO NOT HIGHLIGHT IT BECAUSE OBVIOUSLY PEOPLE -- >> NEVER MIND. [LAUGHS] >> I WAS TRYING TO FIND BETTER WORDS. BUT, YES, THAT IS A THREAT. THAT IS A THREAT. AND EVERY AGENCY HAS TO DEAL WITH IT. >> OUR IT DEPARTMENT DOES A REALLY GOOD JOB OF TESTING THE EMPLOYEES. >> MADAM CLERK, PLEASE READ THE RESOLUTION. >> THIS RESOLUTION IS BY THE FORT PIERCE UTILITIES AUTHORITY, FORT PIERCE, FLORIDA, ADOPTING A BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER FIRST, 2026, ENDING SEPTEMBER 30TH, 2027. AND AMENDING THE BUDGET FOR THE FISCAL YEAR OCTOBER FIRST, 2025, ENDING SEPTEMBER 30TH, 2026, PROVIDING SEVERABILITY AND AN EFFECTIVE DATE. >> ANYONE WITH THE MOTION? >> MAKE A MOTION TO APPROVE THE ANNUAL BUDGET. >> PLEASE CALL THE ROLL. >> THANK YOU VERY MUCH. >> THAT IS THE LAST ITEM FOR [F. DIRECTOR COMMENTS] STAFF. >> DIRECTOR'S COMMENTS, YOU'RE BACK ON. >> YES, MA'AM. OUR NEXT BOARD MEETING WILL BE AUGUST 18TH AT 4:00 IN THESE CHAMBERS, THAT IS ALL I HAVE FOR THE BOARD TODAY, MADAM CHAIR. [H. BOARD MEMBER COMMENTS] >> ANYTHING FROM OUR ATTORNEY? >> NO, MA'AM,. >> ALL RIGHT, THAT IS ALWAYS GOOD. HOW ABOUT BOARD MEMBERS? ANY UPDATES? >> THE COMMISSION REAPPOINTED MISS BARBOUR LAST NIGHT. IT WAS A HARD-FOUGHT BATTLE. [LAUGHS] SO CONGRATULATIONS. >> THANK YOU. >> I HAVE ONE COMMENT, I JUST WANT TO COMMEND THE STAFF. I HAVE SEEN SUCH A HIGH LEVEL OF ACTIVITIES ON YOUR PART ALL OVER AND IN ALL OF THE DEPARTMENTS. WHEREBY IT APPEARS THAT YOU ARE TRYING TO GET THINGS WHERE THEY NEED TO BE TO PREPARE YOURSELF FOR WHAT IS TO COME, WHICH IS A HUGE? THROUGHOUT EVERY INDUSTRY RIGHT NOW. SO I SEE YOU SEE IT COMING AND I SEE YOU GETTING THINGS IN PLACE SO THAT YOU WILL BE ABLE TO ADDRESS IT AS THE NEW THING YOU NEED TO DO AND MAKE THOSE THINGS IMPORTANT IN YOUR DAY-TO-DAY AND RECURRING TO BE THOSE THINGS THAT ARE NATURALLY TAKEN CARE OF. SO I COMMEND YOU FOR ALL OF YOUR HARD WORK TO CARRY YOURSELF FOR WHAT IS TO COME. AND ALSO THE BUDGET DOES REPRESENT THE FACT THAT WE DO ANTICIPATE SOMETHING JUST BY LEAVING A LITTLE ROOM FOR CHANGE. AND I HAVE TO COMMEND YOU FOR THAT AS WELL. SO THANK YOU SO MUCH FOR ALL YOUR HARD WORK. >> ABSOLUTELY, THANK YOU. AND I CAN ECHO THAT FOR SURE. AND NOT GETTING COMFORTABLE. EVERYONE HAS FOUND A GOOD WAY AT CONTINUING TO DIG IN AND FIND NEW WAYS TO EITHER STREAMLINE OR TO CHANGE EVEN SIMPLE RULES TO MAKE IT SO THAT IT IS EASIER TO PROCESS AND EASIER TO UNDERSTAND AND SAFER FOR US AS A COMMUNITY AND FOR OUR EMPLOYEES, THANK YOU. >> ONE MORE THING. WE ALSO APPROVED LAST NIGHT, GRACE WAY VILLAGE PHASE ONE FOR THE TRANSITIONAL LIVING. SO THAT IS THE NEIGHBOR OF FPUA. SO YOU WILL HAVE SOME CONSTRUCTION, A NEW NEIGHBOR. AND ANOTHER NEW NEIGHBOR AT 3700. >> I SAW THAT LAST NIGHT. 20,000 SQUARE FOOT BUILDING RIGHT AT THE CORNER AT THE OLD PETROLEUM PLACE. >> YOU WILL HAVE SOME NEW NEIGHBORS. NEW NEIGHBORS IN THE NEIGHBORHOOD. >> THAT'S GOOD. >> WHAT'S THE NAME OF THOSE NEIGHBORS? >> GRACE WAY VILLAGE. THEY WERE ALREADY THERE. BUT THERE IS NOW SOME PHASED IN TRANSITIONAL HOUSING FOR FAMILIES WHO ARE UNHOUSED, THAT IS THE NEW WORD, I GUESS. >> THAT IS SO WONDERFUL. >> IT IS SO WONDERFUL. THEY WERE -- WE HAD TO GO THROUGH A VERY PAINFUL HEARING TO GET TO GRACE WAY, BUT ONCE WE GOT THERE WE WERE ALL VERY HAPPY ABOUT DOING IT, EVERYONE WAS VERY HAPPY. >> THAT'S JUST SOMETHING I GUESS [01:20:03] I HAVE FOCUSED ON, NOT FROM AN ACTION STANDPOINT, BUT WHEN I WANT TO ARGUE. I HAVE FOCUSED ON THE FACT THAT WE JUST DO NOT SEEM TO EMBRACE THOSE THAT ARE DISPLACED AND WITH THE STATISTICS OF FORT PIERCE, WE HAVE ALL THE RIGHT NUMBERS TO BE ABLE TO TAKE ADVANTAGE OF SO MUCH. WE FIND OURSELVES ELIGIBLE FROM A NUMBERS STANDPOINT. >> DEMOGRAPHICS. >> SO WHY CAN'T WE GET IT? WHY CAN'T WE GET THERE, YOU KNOW? AND THE NEED IS THERE. THAT IS JUST -- >> IT IS WONDERFUL, FOR FAMILIES, IT IS FAITH BASED AND IT BUILDS ON A SUCCESSFUL MODEL AND GRACE WAY'S ALREADY VERY SUCCESSFUL. WHEN I WAS FIRST MAYOR, IT WAS CATHY WARREN WHO WAS HEAD OF IT AND SHE HAD THIS IN HER HEART, SHE CAME TO SEE ME AND SAID THIS IS WHAT HER VISION WAS TO TRY TO HELP FAMILIES WHO ARE NOT CHRONICALLY HOMELESS, BUT WHO ARE HOMELESS BECAUSE OF SITUATIONS. AND THAT WAS 14 YEARS AGO. SO IT HAS NOW COME TO FRUITION. >> THAT'S WONDERFUL. GLAD TO * This transcript was compiled from uncorrected Closed Captioning.