RuralWaterCon 2024 Handouts Booklet

RURALWATERCON 2024 RURALWATERCON 2024

HAndouts Booklet Handouts Booklet

How To Navigate This Digital Booklet

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RURALWATERCON 2024 Schedule

TUESDAY MARCH 26

7:00 a.m. - 5:00 p.m.

Convention Registration............................Hall 1 Foyer

12:00 p.m. - 5:00 p.m.

Exhibitor Hall Open............................................Hall 1

12:00 p.m. - 5:00 p.m.

Credentials Committee Table....................Hall 1 Foyer

1:00 p.m. - 2:30 p.m.

Opening General Session - Room 225

2:30 p.m. - 2:45 p.m.

Break in Exhibit Hall...........................................Hall 1

2:45 p.m. - 3:45 p.m. - Concurrent Sessions

Sensible Cybersecurity.................................................................................221A

Boil Water Notices.....................................................................................221B

Dealing with Growth and Developers ......................................................221C

Fiduciary Responsibilities & Sound Financial Practices.........................221D

3:45 p.m. - 4:00 p.m.

Break in Exhibit Hall...............................................Hall 1

4:00 p.m. - 5:00 p.m. Concurrent Sessions

TCEQ/PUC Rule Update.....................................................................221A

Algal Blooms: Taste & Odor in Drinking Water....................................221B

Defending Against De-Certification...........................................................221C

Rules & Responsibilities of Board Members............................................221D

5:00 p.m. - 6:30 p.m.

Welcome Reception..............................................Hall 1

WEDNESDAY MARCH 27

7:00 a.m. - 5:00 p.m.

Convention Registration........................... Hall 1 Foyer

7:00 a.m. - 8:00 a.m.

Exhibit Hall Viewing & Breakfast.......................Hall 1

8:00 a.m. - 5:00 p.m.

Ask the Experts Table................................Hall 1 Foyer

8:00 a.m. - 9:00 a.m.

Second General Session - Room 225

9:00 a.m. - 9:30 a.m.

Break & Demo from RAFA Systems....................Hall 1

9:30 a.m. - 10:30 a.m. - Concurrent Sessions

Women of Water.................................................................................220

Water Distribution System Analysis Involving Elevated Storage...221B

Antidegradation in TPDES Permitting........................................221C

Best Practices for Compliance with the TPIA................................221D

10:30 a.m. - 11:00 a.m.

Break & Demo from Silversmith Data.................Hall 1

11:00 a.m. - 12:00 p.m. Concurrent Sessions

Employee Engagement & Retention Panel....................................221A

PFAS/Emerging Contaminants....................................................221B

High Growth Roundtables..................................................................220

Grant & Funding Opportunities Panel.........................................221C

12:00 p.m. - 1:30 p.m.

Lunch, Game Show & Taste Test Prelims...........Hall 1

1:00 p.m. - 1:30 p.m.

Annual Business Meeting..............................220 Room

1:30 p.m. - 2:30 p.m. - Concurrent Sessions

Workforce Development Through Apprenticeship..........................221A

Operations Roundtables.......................................................................220

Leveraging the Broad Potential of Artificial Intelligence................221C

Open Meetings Act..........................................................................221D

2:30 p.m. - 3:00 p.m.

Break & Demo from Wellntel, Inc........................Hall 1

Silent Auction Close

3:00 p.m. - 4:00 p.m. - Concurrent Sessions

Technology as the Carrot for Recruiting the New Workforce..........221A

Master Meter Accounts & RV Parks Panel.................................221B

Navigating Easements, Right-of-Wats & Expansion...................221C

Board Roundtables...............................................................................220

5:00 p.m. - 6:00 p.m.

Pre-Banquet Reception.................Stars at Night Foyer

6:00 p.m. - 9:00 p.m.

President’s Banquet (Ticketed).....Stars at Night Ballroom

THURSDAY MARCH 28

7:00 a.m. - 11:00 p.m.

Convention Registration............................Hall 1 Foyer

7:00 a.m. - 8:00 a.m.

Exhibit Hall Viewing & Breakfast.......................Hall 1

8:00 a.m. - 8:45 a.m.

District Caucuses

District 1.................221C Room

District 2..................221D Room

District 3.....................225 Room

District 4.....................220 Room

District 5.....................222 Room

District 6.....................223 Room

District 7..................301A Room

8:45 a.m. - 9:30 a.m.

District 8................301B Room

District 9................301C Room

District 10.............302A Room

District 11.............302B Room

District 12.............302C Room

District 13...............221A Room

District 14.............221B Room

Break in the Exhibit Hall................................... Hall 1

9:30 a.m. - 11:00 a.m.

Third General Session - Room 225

11:00 a.m. - 11:15 a.m.

Passing Break

11:15 a.m. - 12:15 p.m.

Closing Luncheon (Ticketed)...Stars at Night Ballroom

Emerging Leaders Graduation & Water Taste Test Finals

BALLROOM LEVEL (3rd Floor)

Presidents Banquet Reception in Stars at Night Foyer

Presidents Banquet & Closing Luncheon in Stars at Night Ballroom

MEETING LEVEL (2nd

Floor)

General Sessions in 225

Breakout Sessions in 221A | 221B | 221C | 221D

Roundtables & Annual Business Meeting in 220

STREET LEVEL (1st Floor)

Registration in Hall 1 Foyer

Exhibit Hall in Hall 1

RURALWATERCON 2024

Floor Plans

Platinum Sponsors

Gold Sponsors

Silver Sponsor

Bronze Sponsors

RURALWATERCON 2024

Sponsors

Welcome Reception Sponsors

Conference Bag Sponsors

President’s Banquet Sponsor

Cocktail Reception Sponsor

Engineering Conference Luncheon

Engineering Conference Breakfast

Women of Water Roundtables

Game Show Sponsor

RWC Breakfast Sponsor

Awards of Excellence Sponsors

Water Station Sponsors

Charging Station Sponsor

Taste Test Sponsor

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Abdul Althebaity – Shearman & Sterling LLP

Abdul Althebaity is an associate in the Litigation practice in Shearman & Sterling LLP’s office in Austin. He is a chemical engineer and registered patent attorney, whose principal area of practice is intellectual property litigation, with a focus on patent litigation.

Andrew McBride – Schertz-Sequin Local Government Corporation

Andrew McBride is the General Manager of the Schertz-Sequin Local Government Corporation. He has almost 25 years of public utilities experience; including environmental laboratory, heavy equipment, water/wastewater treatment operations, capital improvement, programs and fiscal management. Andrew earned a Bachelor of Science in Biology and a Master of Science in Environmental Management, while holding the highest levels of water and wastewater treatment operator licensing in the state.

Brooke Paup – Texas Water Development Board

Brooke Paup has served as a Board member of the Texas Water Development Board since February 2018 and Governor Abbott designated her as Chairwoman in April 2021. In September 2022, Governor Abbott appointed her to the Environmental Flows Advisory Group. Prior to her board appointment, she served as the Director of Legislative affairs for the Texas Comptroller of Public Accounts. Brooke is formerly the Deputy Division Chief of Intergovernmental Relations and Special Assistant for Policy & Research for the Office of the Attorney General, where she worked on legislative issues, special litigation, and public finance.

Bruce Alexander – East Medina SUD

Bruce Alexander is the Superintendent of East Medina County Special Utility District. Bruce has more than 40 years of experience operating a public water system. He retired as the Director of Public Works for the City of Castroville before joining East Medina in 2008. Bruce currently serves as President of TRWA’s Board of Directors and is a member of the Board for the Edwards Aquifer Authority. He is also an EAA appointed member of the EAHCP Committee representing all municipal initial regular permit holders west of Bexar County and serves on San Antonio Water System’s ASR Regional Advisory Committee.

Carlos Febus – SS WSC

Carlos Febus was appointed General Manager of S.S. Water Supply Corporation by the Board of Directors in May 2020 after serving as Assistant General Manager for one year. Before this, he served for more than 26 years in the United States Navy At SSWSC, he presided over a near-doubling in size of the water system from 2019-2023 and oversees $26M+ in assets Carlos holds a Bachelor of Science degree from Excelsior College and an Associate’s Degree from Monterey Peninsula College. He also holds Class C Groundwater and CSI licenses and is a graduate of TRWA’s Emerging Leaders Program (ELP) and also serves as an ELP Coach.

Celia Eaves – PUC

Celia Eaves joined the Public Utility Commission of Texas in February of 2020 in the Division of Utility Outreach. Celia holds a Bachelor of Science in Chemistry and a Biology minor and is a licensed Class B Surface Water Operator. Celia has over 25 years of experience in the water and sewer industry. Before joining the PUC, Celia worked at Texas Rural Water Association where she served as Environmental Services Director and Training Director; where she provided compliance, training, treatment, and regulatory guidance and assistance to retail public utilities. She has served as a committee member on the Water Conservation Advisory Council and the Water Utility Operator Licensing Advisory Committee.

Charles Perry – Senator

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

State Senator Charles Perry is a life-long West Texan and a practicing CPA from Lubbock. He was elected to the Texas Senate in 2014, after serving two terms in the Texas House of Representatives. Sen. Perry currently chairs the Senate Committee on Water, Agriculture, and Rural Affairs and is Vice-Chair of the Senate Health and Human Services Committee. He also sits on the Senate Committees for Finance, Redistricting, State Affairs, Transportation, and Sunset Commission, and he co-chairs the State Water Implementation Fund for Texas (SWIFT) Advisory Committee and the Texas Infrastructure Resiliency Fund (TIRF). Governor Abbott appointed him to the Southwestern States Water Commission and the Western States Water Council.

Chris Sosnowski – Waterly

Chris Sosnowski is a licensed Civil/Environmental Engineer through the Illinois Department of Financial & Professional Regulation with water planning, design, SCADA, Controls, Automation, Operational Technology/Cybersecurity planning, integration, and commissioning experience. Chris has served as the CEO of Waterly Software since 2017, which was founded to make water managers' lives easier and water operation smarter by eliminating double data entry, seeing trends in real-time, managing non-revenue water goals, and submitting monthly regulatory operating reports. After working to grow Waterly, he started WaterClick in 2021 to provide small and mid-sized utilities an easier path to the benefits of digitization by reducing complexity, simplifying offerings, and handling data integration. Chris holds a BS in Civil Engineering from the University of Illinois Urbana-Champaign with an emphasis in Environmental Engineering & Water Resources and a MS in Civil & Environmental Engineering from the University of Wisconsin-Madison

Clovis Boatright – Garfield WSC

Clovis Boatright was hired as the General Manager of Garfield Water Supply in November of 2014 by the Board of which he had previously served for 10 years. Prior to his water career, Clovis served as a CPA at the Texas State Comptroller’s Office, where he oversaw finding new technology to manage the rapid growth in Texas and more efficiently handle tax collections and processing of tax data. In 1996, the National Federation of Tax Administrators presented him with the Award for Leadership and Service. Clovis is a graduate of the University of Texas.

Dacy Cameron – Aqua WSC

Dacy Cameron is a licensed Professional Engineer and the Interim General Manager for Aqua WSC in Bastrop. She graduated from the University of Texas with a B.S. in Civil Engineering and has been managing and consulting for water utilities since 2014.

Dave Yanke – NewGen Strategies & Solutions, LLC

Dave Yanke is President & CEO of NewGen Strategies & Solutions, LLC. He has conducted water and wastewater cost of service and rate design studies, CCN valuations, and feasibility studies for over 30 years. Dave has had the pleasure of presenting at TRWA Conferences since 1994.

David Stanley – STV, Inc.

David Stanley is an Associate of STV, Inc. and is a licensed Professional Engineer in Texas, practicing consulting engineering for over 10 years. Much of his experience is in the rural water industry; having served as design engineer on water treatment, pumping, transmission, and distribution projects for rural entities. David has a Bachelor of Science degree in Engineering, Civil Concentration from LeTourneau University and a Bachelor of Arts in Political Science from the University of Texas at Austin.

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Doug Short – Trinity River Authority of Texas

Doug Short is the Chief Information Officer and Chief Information Security Officer for the Trinity River Authority of Texas. He previously served in the USAF, where held positions leading inspection teams for the National Security Agency and Air Intelligence Agency, command of the Air Force Cyber Operations School, and on the Joint Staff providing policy for the protection of critical infrastructure. He holds BS and MA degrees in information technology and is a Certified Information Security Manager and Certified Government Chief Information Officer.

Emily Westridge Black – Shearman & Sterling LLP

Emily Westridge Black is a partner in Shearman & Sterling LLP’s litigation practice based in Austin. Her practice focuses on representing corporate clients in high-stakes investigations, litigation, and arbitrations across a broad range of subject matters, including anticorruption/FCPA, products liability, cybersecurity, fraud, environmental, and breach of fiduciary duty. Emily’s work has been recognized by Chambers USA and The Legal 500, and she was named “Attorney of the Year” by the Texas Lawyer in 2019.

Gabriel Cantu – Green Valley SUD

Gabriel Cantu is currently the Construction & Inspection Manager at Green Valley SUD and has been in the role since December of 2021. He previously worked at the City of San Marcos as an Engineering Inspector for almost 5 years. Gabriel attended Texas A&M Engineering Extension Service’s Water, Recycled Water, and Wastewater Utilities program and has been a dual Certified Water Professional since March of 2020. He also holds an Inspector Certification from NASSCO, Inc. since November of 2015

Garrett Heathman – TCEQ

Garrett Heathman is the Team Leader for the Drinking Water Technical Review Team at TCEQ overseeing the Data Support and Right-to-Know groups. In 2014, he joined TCEQ as an intern and contractor in the Water Supply Division, while pursuing a Bachelor of Science in Chemistry from the University of Texas. In 2016, Garrett joined the Waste Permits Division as a Project Manager working primarily with compost and recycling operations, and later serving as a Management Analyst for the division.

Jacquelyn Knobloch – Texas Rural Water Association

Jacquelyn Knobloch joined TRWA in August of 2023 as the Apprenticeship Program Manager. She started her career in the water industry in 2014 and over the years, has obtained CSI and Back Flow Prevention Assembly Tester licenses. She has filled various roles within water utility companies, most recently prior to TRWA at Mountain WSC

Jason Hill – J.T. Hill, PLLC

For almost 20 years, Jason T. Hill has dedicated his legal practice to the niche field of Texas water law. Over the course of that time, he has represented clients in various water-related permitting matters before the Texas Commission on Environmental Quality, the State Office of Administrative Hearings, District Court, courts of appeals, and the Supreme Court of Texas. Jason is the founder of J.T. Hill, PLL, and he serves as Counsel to Allensworth in the firm’s Water Resources group. He is a graduate of Baylor Law School.

Jason Knobloch – Texas Rural Water Association

Jason Knobloch has been in the water industry since 2003 He served in various management roles for rural utilities before joining TRWA in 2017; where he now serves as the Deputy Executive Director. In addition to leading TRWA’s Membership and Financial, Managerial, & Technical Assistance Departments and the USDA Source Water Protection Program; he plays a lead role in emergency response efforts. Jason holds a bachelor’s degree in Management, an associate’s degree in Information Technology, plus multiple licenses through TCEQ.

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Jason Vreeland – Trihydro Corporation

Jason Vreeland is a senior civil engineer with Trihydro Corporation. His experience includes regulatory permitting, water and wastewater treatment design, water distribution and wastewater collection systems design, rate studies, funding assistance, water modeling, hydrologic and hydraulic modeling, and roadway design. Jason has worked in the engineering and surveying industry for 19 years and performs many functions including utility planning and design, construction administration, funding acquisition, feasibility studies, rate analysis, and development design reviews.

Jennelle Crane – TCEQ

Jennelle Crane currently serves as an Assistant Deputy Director in the TCEQ Water Supply Division where she assists in overseeing the Division. Jennelle has worked for the Texas Commission on Environmental Quality for the past 17 years, including work as an environmental investigator in the Harlingen, DFW, and Abilene Regions and in various positions with the Water Supply Division. She has a Bachelor of Science in Biology with a Minor in Chemistry and a Master of Science in Environmental Management.

Joel Klumpp – TCEQ

Joel Klumpp is the Manager of the Plan & Technical Review section in TCEQ’s Water Supply Division. Joel joined TCEQ in 2003, and also has experience in the Water Quality and Water Rights Programs. Joel received his Bachelor of Science in Biology from the University of Tulsa, and a Master of Science in Environmental Science, and a Master of Public Affairs from Indiana University.

John Deluca – CoBank

John DeLuca is Vice President & Senior Relationship Manager in CoBank’s Water Infrastructure Division where he provides credit and financial solutions to rural water and wastewater systems in a number of states, with a primary focus on Texas. Prior to joining CoBank in 2016, he was a Senior Director of Business & Relationship Management at Fitch Ratings for five years and Senior Vice President of Market Development at Radian Asset Assurance Inc. for more than 15 years. John earned a bachelor's degree in Marketing from Hofstra University.

John O’Connell – NRWA Board President

John O’Connell is the current Board President of the National Rural Water Association since being elected to the role on September 27, 2022. During his 10+ year’s tenure on the National Rural Water Association Executive Board, he also served as Chairman of the Regulatory Committee. John is a Board Member for the New York Rural Water Association and has been in the water and wastewater industry serving small rural communities for over 35 years as a Certified Water/Wastewater Systems Operator. John is also an active farmer in upstate New York.

Jordan Miller – Baker Moran Doggett Ma & Dobbs LLP

Jordan A. Miller is an Equity Partner with the Baker Moran Doggett Ma & Dobbs LLP law firm. He represents condemning authorities and landowners in all facets of right of way acquisition and has been involved in the acquisition of hundreds of tracts of land for electric transmission lines, oil/gas pipelines, roadways/related facilities, water/wastewater pipelines, hike/bike trails, as well as other public projects. Jordan graduated from the University of Central Arkansas with a Bachelor of Science in Political Science and received his MBA and Law Degree from Texas Tech University. He has been named a Texas Rising Star by Thomson Reuters every year since 2018.

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Judy Langford – Langford Community Management Services

Judy Langford is the President & Owner of Langford Community Management Services. She has over 32 years of fullspectrum grant administration experience in grant writing, plan development, and management service. Judy and her team at LCMS are certified through the Texas Department of Emergency Management (TDEM) in Mitigation Plan Development and through the Texas Department of Agriculture (TDA) to be administrators of the TxCDBG Program. LCMS has written and administered millions of dollars in grants and loans from a variety of state and federal agencies. Judy holds a Bachelor of Science degree from the University of Texas.

K. Mallory Brennan – Shearman & Sterling LLP

Mallory Brennan is a litigation partner for Shearman & Sterling LLP. Her practice focuses on representing multinational corporations and global financial institutions in mergers and acquisitions litigation and transactional disputes, securities litigation, derivative actions and other complex commercial disputes; including bankruptcy and antitrust actions. Her expertise has been recognized by Chambers USA and The Legal 500, and she has been honored by Benchmark Litigation, the New York Law Journal and Euromoney Legal Media Group.

Karly A. Houchin – Allensworth

Karly A. Houchin has been an attorney at Allensworth since graduating from St. Mary’s Law School in 2017. Her practice focuses on water territory disputes, construction disputes, and insurance coverage disputes. Karly helps rural water district clients navigate the intricate landscape of water territory disputes in administrative proceedings, and state and federal litigation, with an emphasis on 1926(b) litigation.

Kathryn Thiel - Lloyd Gosselink P.C.

Kathryn Thiel is an associate at Lloyd Gosselink, P.C. where she serves as a member of the Water & Districts Practice Groups. She assists local governmental entities on matters relating to water rights, water supply, permitting, regulatory compliance, and certificates of convenience and necessity. Kathryn also provides legal services regarding organizational governance, conflicts of interest, drafting rules and policies, and compliance with the Texas Open Meetings Act and Texas Public Information Act. Kathryn is admitted to the State Bar of Texas and the District of Columbia Bar.

Kyle Eppler – Wickson Creek SUD

Upon graduation from Texas Tech University in 2010, Kyle Eppler joined Wickson Creek SUD, where he now serves as the General Manager. He serves on several boards, including TRWA’s as the District 10 Director and on the Bluebonnet Groundwater Conservation District Board representing rural water interests for Grimes County. Kyle also serves on the Water Conservation Advisory Council serving as the Rural Water Representative.

Lara Zent – Texas Rural Water Association

Lara Zent is the Executive Director & General Counsel of TRWA. Prior, Lara was a staff attorney at TCEQ where she performed legal work in the areas of water utilities, water rights, industrial hazardous waste permitting, remediation, emergency response, and contracts; representing the agency in numerous administrative hearings pertaining to CCNs, rates, and other utility matters. She also worked on a variety of rule packages and reviewed legislation. Lara is a graduate of the Texas Tech University School of Law and the University of Texas at Austin.

Larry Bell – Texas Rural Water Association

Larry Bell has worked for TRWA since June 1988, as a Circuit Rider and EPA Training Specialist; where his primary focus is on assisting, developing, and presenting training on a wide range of water related regulatory topics. He has served on different TCEQ subcommittees over the past 20 years. Larry’s water career began at Bell & Sons Construction in 1967 where he served as a partner until 1987. He also managed/operated multiple rural water systems in Angelina County and a WSC for eight of those years and he holds an “A Water” license.

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Lauren Evans – East Medina SUD

Lauren Evans has served as the Assistant Business Manager at East Medina County SUD since February of 2020. Prior to joining EMSUD, she worked for over 11 years at Capital Farm Credit where she held the roles of Credit Analyst and Accounting Manager. Lauren holds a Bachelor of Business Administration, Accounting degree from the University of Texas at San Antonio. She currently serves as an Alternate Director on the TRWA Board of Directors.

Lisa Fuentes – PUC

Lisa Fuentes has been with the Public Utility Commission of Texas since September 2014 when the CCN and Rates program transferred from TCEQ. Lisa is a Utility Administrator in the Division of Utility Outreach; which focuses on providing guidance, outreach, and assistance to retail public utilities and has over 30 years of experience in the water and sewer industry.

Mark Rogers – Elderville WSC

Mark Rogers began his journey in rural water in February of 2018. He was hired by Elderville WSC to be their Business Manager, with the opportunity to assume the General Manager role. He quickly became involved with TRWA and is a graduate of the TRWA Emerging Leaders Program.

Mary Alice Boehm-McKaughan – Texas Rural Water Association

Mary Alice Boehm-McKaughan joined TRWA as Assistant General Counsel in 2022. She earned a political science degree from Tufts University and a law degree from Southern Methodist University School of Law. Prior to TRWA, Mary Alice worked for the Law Office of Ramon Garcia prosecuting mass toxic tort cases; with Martin Drought & Torres practicing business, class action, oil/gas, and employment law; and the Eminent Domain Section of the Travis County Attorney’s Office. In addition, Mary Alice worked for TCEQ for 7 years and owned her own law firm for 12 years.

Matthew Munro – TCEQ

Matthew Munro is currently the Chemical Monitoring & Reporting Compliance Officer for TCEQ’s Drinking Water Quality Team, a position he began in 2021. He attended Texas A&M University where he earned a Bachelor’s Degree in Bioenvironmental Sciences in 2019. Following graduation, he joined the TCEQ in 2019 as a UTA Contractor for the Drinking Water Quality Team. In 2022, he began as the Project Manager for the PFAS sampling contract.

Mike Gershon – Lloyd Gosselink, P.C.

Mike Gershon is a partner at Lloyd Gosselink, P.C. where he serves on the firm’s Executive Committee and chairs its Water Practice Group. He is a water, utility, and environmental lawyer and works on a team of two dozen lawyers and six paralegals within the firm’s Water and Litigation Practice Groups. He assists clients as general counsel and with water planning and management, compliance, water rights, water quality and CCN/service area issues. Mike has been named in Best Lawyers in America in Water Law and as the Lawyer of Year in the Austin area in Water Law.

Nick Roederer – Rural Water Financing Agency

Nick Roederer has been in the public finance industry since 1998 and has worked for Raymond James since 2003, where he specializes in government-enhanced and secured financings through the USDA. He has been involved in the underwriting or placement of over $8 billion of debt for over 1,300 borrowers utilizing various USDA programs. Nick has served as public finance banker to the Rural Water Financing Agency, Kentucky Rural Water Finance Corporation, Minnesota Rural Water Finance Authority, Missouri Public Utilities Commission, Wisconsin Rural Water Construction Loan Program Commission, Florida Rural Utility Financing Commission, North Dakota Rural Water Finance Corporation and many others. He holds a Bachelor of Business Administration degree in Finance from the University of Louisville and is a Registered Municipal Securities Representative for Series 7 (General Securities Representative license), Series 53 (Municipal Securities Principal), Series 50 (Municipal Advisor Representative) and Series 63 (Uniform Securities license).

Texas Rural Water Association

2024 Rural WaterCon - Annual Conference Speaker Bios

Patrick Lackey – Trihydro Corporation

Patrick Lackey is presently employed as a Senior Engineer at Trihydro Corporation and has worked as a municipal consulting engineer for over forty years. He earned Bachelor of Science degrees from Texas A&M in Microbiology and Civil Engineering, plus a Master of Science degree in Civil Engineering from Texas A&M. Throughout college, Patrick worked in a water/wastewater treatment plant laboratory and eventually earned Double “A” Operator License Certification.

Rachel Webb – South Rains SUD

Rachel Webb has served as the General Manager at South Rains SUD in Emory since 2016. She started her water career in 2015 as office personnel and was quickly promoted. Rachel has numerous years of management experience prior to her tenure at South Rains SUD.

Ross Brookbank – Copeville SUD

Ross is currently the General Manager of the Copeville Special Utility District in Collin County. He has 17 years of experience in the water/wastewater industry, including several former roles at TRWA. Ross currently holds multiple licenses with the TCEQ and continues to expand his knowledge through training and collaboration. He’s a graduate of the Texas Water Leaders Program.

Sonya Stocklin – Texas Rural Water Association

Sonya Stocklin joined TRWA in January of 2022 as the Office Manager. In December of 2023, she was promoted to Membership & Outreach Manager. Previously, she worked in mid-level and upper management for small to mid-sized churches, as well as corporate offices for over 20 years

Terry Winn – STV, Inc.

Terry Winn is a Vice President of STV, Inc. and is licensed to practice engineering in three states. His practice in consulting engineering spans over 50 years. He is a Board-Certified Environmental Engineer and Diplomate Water Resources Engineer. Terry was designated a “Distinguished Engineer” by the Whitacre College of Engineering at Texas Tech University in 2012. He holds Bachelor of Science and Master of Science Degrees in Civil Engineering from Texas Tech University.

Will W. Allensworth – Allensworth

Will W. Allensworth is a Partner at Allensworth with 13 years of experience representing and advising clients in complex construction and water disputes. For over a decade he has represented rural water districts in matters concerning infrastructure development, design, and construction within their designated service areas. In addition, Will represents water supply corporations and special utility districts (and advises their general managers and Boards) in lawsuits to preserve their state law service territory via certificates of convenience and necessity, and their federal law territorial rights governed by the federal lending program outlined in 7 U.S.C. § 1926.

William White – Texas Rural Water Association

William White has been in the water business for over 31 years, starting as a meter reader and working his way up to managing the water system for a small city with 2,200 connections. He joined TRWA over 20 years ago as a Circuit Rider where he assists water systems by providing on-site technical assistance and training. William holds Class B Groundwater, CSI, and Wastewater Collection licenses.

Concurrent Sessions

Tuesday - March 26 | 2:45-3:45 p.m.

Sensible Cybersecurity*

Doug Short, Trinity River Authority of Texas

221A Room | Track 1: Management

Boil Water Notices* (No slides)

Garrett Heathman, TCEQ

221B Room | Track 2: Operations

Dealing with Growth & Developers Panel*

Moderator: Jason Knobloch, TRWA; Panelists: Dacy Cameron, Aqua WSC; Clovis Boatright, Garfield WSC, & Ross Brookbank, Copeville

SUD

221C Room | Track 3: High Growth

Fiduciary Responsibilities & Sound Financial Practices*

Dave Yanke, NewGen Strategies & Solutions, Inc.

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Tuesday - March 26 | 2:45-3:45 p.m.

Sensible Cybersecurity*

Doug Short, Trinity River Authority of Texas

221A Room | Track 1: Management

* This session is approved for CLE credit.

SENSIBLE CYBERSECURITY

AGENDA

INTRODUCTION

IT vs OT

THE THREAT LEGISLATION AND REGULATION UPDATE

WHAT CAN WE DO?

BOTTOM LINE RESOURCES QUESTIONS

Introduction

• Texas Cybersecurity Council

• TAWWA Cybersecurity & Resiliency Committee Chair

• WEAT Safety & Security Committee

• 100 Day Water Sector Action Plan

• Water & Wastewater Incident Response Guide Working Group

“Sensible Cybersecurity” –Implementing cybersecurity controls to a reasonable level which allows operations to run efficiently while protecting critical equipment, operations and data.

Information Technology

•Financial Systems

•HR Systems

•Communications

•Data Warehouse & Reporting

•Network Infrastructure

Operational Technology

•Process Control

•Process Visibility

•Reporting

•Data Collection

•Networking

Competing Interests

•Business Needs

•Confidentiality

•Accessibility

•Data

•External Communication

Security

•Operations Needs

•100% Reliability

•Ease of Use

•Resilience

•Redundance

THE THREAT

Internal Threats

•WellMeaning Employee

•Misconfigurations

•Modifications

•Phishing

•Disgruntled Employee

•Data Deletion

•Unauthorized Remote Access

•Disruption

•Reputational Damage

External Threats

•Criminal Enterprise

•Money Driven

•Theft of Data

•Ransomware

•Access & Techniques

•Advanced Persistent Threat

•Nation State Driven

•Unlimited Resources

•Intelligence Gathering

•Training

•Disruption

•Destruction

11

Trends

•Ransomware

•Industrial Orgs + 50%

•Ransomware as a Service

•70% Initiated from IT Network

•28% Increase in Groups

•Conflict-Driven Threats

•Russia-Ukraine

•Israel-Hamas

•China-Taiwan

•Hacktivists

•Pre-positioning (Volt Typhoon)

•More Experience

•Post-conflict?

LEGISLATION AND REGULATION UPDATE













“The

Cyber Incident Reporting for Critical Infrastructure Act

In the Rulemaking Process

Voluntary Sharing is Encouraged

Cyber Incident –72 Hours

Ransom Payment –24 Hours

10 KEY ELEMENTS TO SHARE

Incident date and time

Incident location

Type of observed activity

Detailed narrative of the event

Number of people or systems affected

Company/Organization name

Point of Contact details

Severity of event

Critical Infrastructure Sector if known

Anyone else you informed

cisa.gov Central@cisa.dhs.gov Linkedin.com/company/cisagov @CISAgov@cyber @uscert_govFacebook.com/CISA @cisagov

•Obj 1 –Prohibit the download and use of prohibited technologies on any state-issued device.

• Obj 2 –Prohibit employees and contractors from conducting state business on prohibited technologyenabled personal devices.

•Obj 3 –Identify sensitive locations, meetings and personnel within an agency that could be exposed to prohibited technology enabled devices.

• Obj 4 –Implement network-based restrictions to prevent the use of prohibited technologies-enabled personal device.

• Obj 5 –Coordinate the incorporation of any additional technology that poses a threat to the State’s sensitive information and critical infrastructure into this plan.

EXECUTIVE ACTION –PROHIBITED TECH Current Prohibited List

• Software/Applications/Developers

•Alipay

•ByteDanceLtd.

•CamScanner

•Kaspersky

•QQ Wallet

•SHAREit

•Tencent Holdings Ltd.

•TikTok

•VMate

•WeChat

•WeChat Pay

•WPS Office

•Any subsidiary or affiliate of an entity listed above.

• Hardware/Equipment/Manu facturers

•Dahua Technology Company

•HuaweiCompanyTechnologies

•Hangzhou Hikvision Digital Technology Company

•HyteraCorporationCommunications

•SZ DJI Technology Company

•ZTE Corporation

•Any subsidiary or affiliate of an entity listed above.

https://dir.texas.gov/information‐security/prohibited‐technologies

EPA Memorandum (2023)

•New interpretation of the Safe Drinking Water Act

•Immediately enforceable

•Applies to all Public Water Systems

•Requires evaluation of cybersecurity of OT

•States to enforce during the “Sanitary Survey”

EPA Cyber Assessment Checklist

•Based on the 2022 Cross-Sector Cybersecurity Performance Goals for Critical Infrastructure issued by CISA

•Presented as an option for states

•Intended to identify cybersecurity gaps or potential vulnerabilities in utility practices

PROPOSED REGULATORY STRUCTURE (FUTURE)

•Co-Regulatory Structure

•EPA Oversight

•Sector-led Water Risk and Resilience Organization

•Potential WRRO Responsibilities

•Define Minimum Cybersecurity Requirements

•Potential EPA Responsibilities

•Approve Requirements

•Potential Shared Responsibilities

•Compliance Audits

•Enforcement

WHAT CAN WE DO?

Incident Response

•IT vs OT Response Plans

•Impact Differences

•Personnel Differences

•Equipment Differences

•Tool Differences

•Vendor Differences

•Exercise Your Plan

Vulnerability Management

•Inventory is Key

•Crown Jewels

•Alerts / Advisories

•Patching

RESOURCES

ADDITIONAL RESOURCES

•American Water Works Association

https://www.awwa.org/Resources-Tools/Resource-Topics/RiskResilience/Cybersecurity-Guidance

•Texas AWWA Cybersecurity

https://www.tawwa.org/group/resiliency

•Water ISAC https://www.waterisac.org/

•USCERT https://us-cert.cisa.gov/

•ICSCERT https://us-cert.cisa.gov/ics

•FBI Infragardhttps://www.infragard.org/

•DHS Regional Cybersecurity Advisors

https://www.isao.org/resource-library/government-programs/dhscyber-security-advisors-csas/

•Texas ISAO https://dir.texas.gov/information-security/tx-isao

Concurrent Sessions

Tuesday - March 26 | 2:45-3:45 p.m.

Dealing with Growth & Developers Panel*

Moderator: Jason Knobloch, TRWA; Panelists: Dacy Cameron, Aqua WSC; Clovis Boatright, Garfield WSC, & Ross Brookbank, Copeville SUD

221C Room | Track 3: High Growth

* This session is approved for CLE credit.

DEALING WITH GROWTH & DEVELOPERS

PANELIST:

Dacy Cameron, Aqua WSC

Ross Brookbank, Copeville SUD

Clovis Boatright, Garfield WSC

MODERATOR:

JASON KNOBLOCH

WHAT ARE THE BIGGEST STRUGGLES YOU HAVE WITH GROWTH INYOUR SYSTEM?

WHAT HAVE YOU IMPLEMENTED AT YOUR UTILITY TO ADDRESS THESE NEW REQUESTS?

HOW HAVE YOU FINANCED THE GROWTH FOR YOUR SYSTEM ?

Concurrent Sessions

Tuesday - March 26 | 2:45-3:45 p.m.

Fiduciary Responsibilities & Sound Financial Practices*

Dave Yanke, NewGen Strategies & Solutions, Inc.

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.



Over 30 years of experience

Areas of Expertise:

Cost of Service and Rate Design

Financial Feasibility Analyses

Connection Fees / Impact Fees

Frequent speaker at conferences

• First presented at TRWA Annual Conference in 1994 –“How to Calculate Your Cost of Service”

• Most recently, RuralWaterCon2023 –“Funding Capital Improvement Plans –What Are Your Options?”

FINANCIAL POLICIES

You, as a water provider, are responsible for:

• Assisting in decision‐making (and continuity of governance).

• Ensuring integrity and sustainability of the utility system.

Well designed financial policies:

• Take a long‐term view

• Are reviewed and updated periodically

• Provide necessary financial resources

They also provide:

• Rate stability

• Risk management

• Lower cost of capital

• Justification of utility cost structure and rates when challenged by stakeholders

DAVE YANKE President

3

FINANCIAL POLICIES (CONT.)

• Establish financial policies which identify and prescribe key characteristics of financial health and sustainability.

• Common utility financial policies include:

Debt Service Coverage

• Measure of financial flexibility (e.g., 1.5x DSCR)

Reserves

• Measure of liquidity (e.g., 60 days working capital, additional as required by covenants)

Equity

• Measure of leverage (e.g., equity funding at least 20% of major capital projects)

Credit Rating (if appropriate)

• Overall measure of financial health

• Benchmark data is available (e.g., AWWA, credit rating agencies)

• Audit can confirm compliance

FINANCIAL POLICIES (CONT.)

• Examples of other financial policies:

Term of debt not to exceed useful life of asset.

Capitalized interest only during construction, not to exceed 2 years.

Ongoing routine preventive maintenance. Rates should be set to support the cost of O&M, cash capital outlays and debt service.

FINANCIAL POLICIES (CONT.)

• Leverage is a double‐edged sword

Borrowing lowers near term costs. However,

Heavy borrowing minimizes flexibility.

When to use debt?

To levelizelarge capital outlays (i.e., water plants, transmission lines).

FINANCIAL POLICIES (CONT.)

• Reserves levelizefluctuations.

Normal seasonal variations

Unexpected spike in costs or emergency events

Self insurance

Fluctuating capital plan

• Reserves are an important source of capital and play an important risk management role.

• Reserves are an indicator of financial strength and liquidity.

STRATEGIC PLANNING

• How to Get to Where You Want to Be

• Might Address/Include:

Existing or Proposed Regulation

• Subsidence district or conservation district mandates

• PFAS

Repairs, Replacements and Expansions

• How to fund

Customer Growth

Affordability

Financial Sustainability

Communications with Stakeholders/Customers

CAPITAL PLANNING

1.Engineer to develop master plan with multi‐year capital improvement plan (CIP).

2.Evaluate possible funding sources, including grants, loans, and existing cash.

Are impact fees or equity buy‐in fees appropriate? TWDB, CoBank, private banks.

3.Develop financial plan to fund the CIP (and all other costs of the utility).

4.Evaluate rate impacts based on different scenarios of funding.

WATER SUPPLY CORPORATION “A”

• Issue:

$140M in debt

New water purchase agreement

• Response:

Capital recovery fee tripled (approximately $40M in capital recovery fee revenue)

Retail rate increases –past 2 years

Wholesale rate increases –past 2 years

• In

(FY 2024 –FY 2029)

SPECIAL UTILITY DISTRICT “B”

• Water CIP developed

• Impact fee or connection fee (3x) or Chapter 395

• 25,000 –30,000 connections over the next 30 years

• Funding

SPECIAL UTILITY DISTRICT “C”

• Water CIP developed $46M

• Impact fee ‐ per Local Government Code, Chapter 395

• Continued strong “urban” growth

• Funding of Capital Improvement Plan Impact fee Retail

POSSIBLE MISCONCEPTIONS

• Eliminating all debt is in the best long‐term interests of the utility and its customers (or, alternatively, we should use debt for everything).

• The Board’s job is to minimize rate increases (maintain the existing rates).

• Our utility cannot charge more than the neighboring utility.

Concurrent Sessions

Tuesday - March 26 | 4:00-5:00 p.m.

TCEQ/PUC Rule Updates*

Mary Alice McKaughan, TRWA

221A Room | Track 1: Management

Algal Blooms: Taste & Odor in Drinking Water

Patrick Lackey, Trihydro Corporation & Andrew McBride, Schertz-Seguin Local Government Corporation

221B Room | Track 2: Operations

Defending Against De-Certification: Your 1926(b)

Federal Loans & Protecting Your CCN* (No slides)

Will W. Allensworth & Karly A. Houchin, Allensworth

221C Room | Track 3: High Growth

Rules & Responsibilities of Board Members* (No slides)

Bruce Alexander, TRWA Board President, East Medina SUD

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Tuesday - March 26 | 4:00-5:00 p.m.

TCEQ/PUC Rule Updates*

Mary Alice Boehm-McKaughan, TRWA

221A Room | Track 1: Management

* This session is approved for CLE credit.

NEW WATER& WASTEWATER UTILITY RULES 2023-2024

TWDB, PUC & TCEQ

Mary Alice McKaughan, Assistant General Counsel

Texas Rural Water Association

NEW PUC & TCEQ RULES

Contents -New Rules

Public Utility Commission (PUC)

•Changes to Municipal STM Requirements 16 TAC Section 24.239. (effective 3/29/2023)

•New PUC Appellate Jurisdiction overwater and sewer rates set by a municipality in a newly acquired retail public utility-16 TAC Section 24.101. (effective 10/4/2023)

Texas Commission of Environmental Quality (TCEQ)

•New, more stringent, TCEQ requirements for Emergency Preparedness Plans (EPP)-30 TAC Chapter 290, §§290.38, 290.39, 290.41, 290.42, 290.43, 290.44, 290.45, 290.46, 290.47 / 30 TAC Chapter 291, §§291.160, 291.161, 291.162, / 30 TAC §291.163. (effective 12/21/2023) 3

NEW PUC RULES

Changes to Municipal Utility Purchase Requirements

NEW LAW:

HB 3717 (passed by the 87th Texas Legislature)

•Added TX Gov. Code 1502.055(d) which allows a City to sell its retail water or sewer utility without the sale first being approved by voters if the system has been served with a TCEQ notice of violation (NOV) and the City Council officially finds that the city is financially or technically unable to bring its system into compliance. 5

NEW RULE: Changes to 16 TAC Section 24.239 Sale, Transfer, Merger (STM)

•Effective 3/29/2023

•Clarifies that municipality, district or political subdivision compliance with this rule is discretionary instead of mandatory.

•Implements specific requirements for purchase of a municipality owned utility:

1.WSC, SSC or an IOU, an entity required to posses a CCN, applies to purchase a municipally owned utility, the utility must prove:

a)Sale was authorized by a majority vote of the qualified voters; or b)TCEQ has issued a NOV, or something similar, to the municipality owned utility and the city counsel officially found that the City is either financially or technically unable to resolve the “NOV.”

Expansion of PUC Appellate Authority over Municipal Utility Rates

NEWLAW:

SB 387&HB3689(passedbythe87th TexasLegislature)

•AmendedTWCSection13.043toexpandthePUCappellatejurisdictionoverrates chargedbyamunicipallyownedutility(“City”).

•Nowratepayersresidingoutsideamunicipality’scorporatelimitscanappealanincrease intheirrateswhenaCitytakesovertheprovisionofservicetoratepayerspreviously servedbyanotherretailpublicutility,inlimitedcircumstances.

•ThisdoesnotapplytoaCitythattakesovertheprovisionofservicetoratepayers previouslyservedbyanotherretailpublicutilityiftheCity:

1.Takesovertheserviceattherequestoftheratepayer(s);

2.TakesovertheservicethroughaSales,TransferMerger(STM)application;or

3.Isrequiredtotakeovertheservicebystatelaw,aTCEQorder,oraPUCOrder.

•Effective 10/4/2023

•Changes to the PUC rule echo the statutory changes to the TWC.

•16 TAC Section 24.101(c)(3); (c)(3)(D); and (i) was amended to allow rate payers residing outside city limits to appeal to the PUC the rates set by the city when it first takes over a newly acquired utility outside the city limits.

• This does not apply when the municipal owned utility takes over the new utility:

•At the request of the acquired utilities' rate payers;

•As the result of a STM Application; or

•Because it was required to by state law, a TCEQ order, or a PUC order.

•The rule does clarify that the PUC appellate review is limited to the appealed rate only.

•This new rule will usually apply when a City takes over a system through a single certification (decertification) action.

NEW TCEQ RULE

New, More Stringent, TCEQ Requirements For Emergency Preparedness Plans (EPP)

• Winter Storm Uri occurred during the 87Th Legislative Session in February of 2021.

NEW LAW:

SB 3 (passed by the 87th Texas Legislature)

• Required that certain water service providers ensure that emergency operations could continue during an extended power outage and required systems to create an emergency preparedness plan (EPP) that shows how theaffected utility would accomplish this.

•Required water service providers to maintain 20 pounds per square inch (psi) of pressure, or a water pressure approved by the executive director, during a power outage that lasts longer than 24 hours, as soon as it is safe and practicable, following a natural disaster.

•Systems were required to submit their EPP to the TCEQ for review and approval by March 1, 2022, and implement them by July 1, 2022, unless adjusted by TCEQ.

NEW RULE: Additional Requirements for EPP, Maintenance and Weatherization

•Effective 12/21/2023

•The TCEQ conducted an “after-action review” to evaluate how Uri impacted public water systems across the state. TCEQ’s review recommended further, more stringent, measurersto enhance the resiliency of critical public water system infrastructure.

• These new rule updates to the EPP requirements are a result of that TCEQ after action review.

• New TCEQ Requirements For Emergency Preparedness Plans (EPP)-30 TAC Chapter 290, §§290.38, 290.39, 290.41, 290.42, 290.43, 290.44, 290.45, 290.46, 290.47 / 30 TAC Chapter 291, §§291.160, 291.161, 291.162, / 30 TAC §291.163.

11

EPP Plans Required & Must Be Updated-290.45

•Clarifies that all affected utilities must have an emergency preparedness plan approved by the executive director and meet the requirements for emergency operations contained in §290.45(h)or §290.45(i). (see §290.45(e)(4))

•Clarifies that all affected utilities, defined in TWC §13.1394 and §13.1395, must implement an approved EPP. (§290.39(o)(4))

•An affected utility must review their EPP at least once every three years and submit a new or revised emergency preparedness plan to the executive director for approval within 90 days after certain conditions occur. (§290.45(a)(8))

•Clarifies that all public water systems that are affected utilities, as defined by TWC §13.1394 or §13.1395,, must maintain records related to their EPP for as long as the plan is applicable. (§290.46(f)(5))

12

TCEQ Additions/Definitions- §290.38

•Adds definition for “accredited laboratory” that clarifies the requirements for laboratories used to analyze drinking water samples including that laboratories must be accredited by the TCEQ, rather than just certified. Also amends §290.46(g) to clarify that an accredited laboratory mustanalyze samples used to determine compliance withmicrobial contaminants limits during disinfection of new or repaired facilities.

•Adds a definition for “adverse weather conditions”.Any significant temperature, wind velocity, accumulation of precipitation including drought, or other weather pattern that may trigger the issuance of a national weather service watch, advisory, or warning.

13

TCEQ Additions to Definitions- §290.38

•Amends the definition of “affected utility” to a retail public utility, exempt utility (CCN not Req,), or provider or conveyor of potable or raw water service that furnishes water service to more than one customer; or a retail public utility, exempt utility, or provider or conveyor of potable or raw water service that furnishes water service to more than one customer in a county with a population of: 3.3 million or more; or 550,000 or more adjacent to a county with a population of 3.3 million or more. (Houston and surrounding area)

•Amends the definition of “approved laboratory” to clarify that laboratory approval is required for determining compliance with treatment technique requirements in addition to maximum or minimum allowable constituent levels.

•Amends the definition of “emergency operations” to clarify that affected utilities must provide a minimum required water pressure of 20 psi (35 psi if approved by TCEQ ED) during an emergency weather condition.

Changes to Chapter 291 Definitions- §291.161

The new changes to Definitions:

•Amends the definition of "affected utility" by adding language to encompass the definitions of affected utility in TWC §13.1394 and §13.1395-all-including Houston & surrounding areas.

•Amends the definition of "emergency operations" to clarify the minimum water pressure that affected utilities must provide during emergency operations. This clarification is consistent with the requirements under TWC §13.1394, which is 20 pounds per square inch, or a pressure approved by the executive director, and TWC§13.1395, which is 35 pounds per square inch.

15

Options for EPP Compliance–§290.39

• Affected utilities must select one of the options listed in §§290.45(h)(1)(A) through 290.45(h)(1)(N) when operating as an affected utilityas defined in TWC §13.1394:

•Automatically starting auxiliary generators;

•Sharing of auxiliary generator capacity with one or more affected utilities, including through participation in a statewide mutual aid program;

•Negotiation of agreements, with other retail public utilities, exempt utilities, or providers, or conveyers of potable water or raw water service, if the agreements include coordination with the division of emergency management in the governor's office;

•Use of portable generators capable of serving multiple facilities equipped with quick-connect systems;

•Use of on-site electrical generation or electrical distribution generation facilities;

•Hardening of the electric transmission and electric distribution system against damage from natural disasters during an extended power outage;

• Maintenance of direct engine or right-angle drives;

•Designation of the water system as a critical load facility or redundant, isolated or dedicated electrical feeds;

• Water storage capabilities with sufficient storage to provide water to customers during an extended power outage;

• Water supplies can be delivered from outside the service area of the affected utility by opening an emergency interconnect or using a water hauler;

• Affected utility has ability to provide water through artesian flows;

•Affected utility has ability to open valves between pressure zones to provide redundant interconnectivity between pressure zones;

• Affected utility will implement emergency water demand rules to maintain emergency operations; or

•Any other alternative determined by the executive director to be acceptable.

16

Options for EPP Compliance-Houston, etc.§290.39

For Houston and surrounding areas have options listed in §§290.45(i)(1)(A) through 290.45(i)(1)(H):

•Maintenance of automatically starting auxiliary generators;

•Sharing of auxiliary generator capacity with one or more affected utilities;

•Negotiation of leasing and contracting agreements, including emergency mutual aid agreements with other retail public utilities, exempt utilities, or providers, or conveyors of potable or raw water service, if the agreements provide for coordination with the division of emergency management in the governor's office;

•Use of portable generators capable of serving multiple facilities equipped with quick-connect systems;

•Use of on-site electrical generation or electrical distributed generation facilities;

•Hardening of the electric transmission and electric distribution system against damage from natural disasters during an extended power outage;

•Maintenance of direct engine or right-angle drives; or

•Any other alternative determined by the executive director to be acceptable. 17

Emergency Operation of An Affected Utility

•Clarifies that this section is applicable to all “affected utilities.”

•Clarifies that this subsection does not apply to raw water services that are unnecessary or otherwise subject to interruption or curtailment during emergencies under a contract as stated in TWC §13.1395.

•Clarifies that affected utilities created after December 31, 2012, are required to have emergency preparedness plans approved and implemented prior to providing water to customers.

Changes to Plant Operations Manual- §290.42(l)

•Requires additional minimum content requirements for a plant operations manual so that operators will have the necessary information for the continuation of operations during an emergency.

• Plant Operations Manual must now also contain:

1)Critical Equipment Protection & Replacement Information: a description of planned protective measures for critical plant equipment during adverse weather conditions, replacement part information, information on manufacturer’s user manuals, vendor/technician information, and information on alternative sources of equipment outside the area.

2)Chemicals Information: Identification of all chemicals used for the treatment of drinking water, the entity's chemical vendor information, and information on alternative sources of chemicals outside the area.

3)Routine Operation & Repair Descriptions:information/description ofroutine activities, protocol,schedules, and documentation related to chemical pump feed rate verification, chemical dose adjustments, process control sampling, calibration and accuracy verifications; operations ofcritical plant equipment, to include plant start-up and shut-down under normal and emergencyconditions, while in manual and automated settings, as applicable, and the inclusion ofmanufacturer's specifications for maintaining and troubleshooting of critical plant equipment.

19

Changes to Plant Operation Manual II

• Plant Operations Manual continued:

4)Contingency Plans: Must includeinformation outlining a plan to assure continuity of operations if critical equipment fails, or key personnel are not available. This information could include arrangements for emergency plant coverage or mutual aid agreements with other utilities for equipment or personnel.

• Update Plant Operations Manual: Must be regularly reviewed and updated when a significant change occurs, (See §290.39(j)), including after emergency events that impact plant operation, but at least every three years.

New TCEQ EPP Weatherization Requirements§290.41-.46

Weatherization: Utility must be weatherized against adverse weather conditions including:

• all critical operation components necessary for the continued operations of the water system's facilities.;

• all critical equipment associated with a raw water source; and

• all critical treatment & distribution components associated with drinking water treatment, storage, and transmission facilities.

For your area: Weatherization techniques may be chosen by the affected utility to protect critical equipmentagainst the types of adverse weather conditions experienced in their region of the state.

§291.163, Emergency Operation of an Affected Utility

Affected utility mustadopt and submit to the executive director for approval an EPP that demonstrates the utility can provide emergency operations and a timeline forimplementing the plan.

•The TCEQ Executive director will review the utility’s EPP to determine if the plan is acceptable and request additional information or recommend changes if the plan is not acceptable.

• The executive directormust make a request for information, or recommended changes, on or before the 90th day after the executive director receives the EPP.

•Liststhe 14 emergency operation options available to affected utilities as listed in TWC §13.1394(c)(1) through §13.1394(c)(14). (See §291.163(c), to include §291.163(c)(1) through §291.163(c)(14))

• Affected utilities may use the template included in Appendix G1 to create their EPP.

EPP Plan - §291.163

• Generators: Any generator used as part of an approved emergency preparedness plan must be inspected, operated, and maintained according to the manufacturer's specifications, per TWC §13.1394(h) and the requirements listed in §290.46(m)(8).

• New Affected utilities established after December 31, 2022, must have an emergency preparedness plan approved and implemented prior to providing water to customers.

Wholesale Emergency Operation-§291.163(d) & (e).

§291.163, Emergency Operation of an Affected Utility (defined in TWC §13.1394)

•Requires affected utilities that provide raw surface water to wholesale customers to include in their EPPhow they intend to provide raw water services to their wholesale customers during emergencies.

• This requirement does not apply to raw water services that are unnecessary or otherwise subject to interruption or curtailment during emergencies under a contract under TWC §13.1394(d).

23

Wholesale Water Provisions- §290.45

•Clarifiesthat if:

•a contract prohibits a water purchaser from securing water from sources other than the contracted wholesaler during emergency operations, the wholesaler is responsible for meeting applicable capacity requirements.

•emergency power is required it must be sufficient to meet the minimum pressure requirements.

•Requires all wholesale contracts executed or amended on or after January 1, 2025, tospecify if the wholesaler will supply water, pressure, or both water and pressure during emergency operations. This addition is meant for the wholesale entity to clarify whether it intends to provide both water and pressure to the purchasing entity or if the wholesale entity only intends to provide water under emergency operations. This addition is not intended to conflict with a wholesaler's "Force Majeure" clause.

•Requires that affected utilities that provide raw surface water to wholesale customers must include in their emergency preparedness plan how they intend to provide raw water services during emergencies, except during instances when raw water services are unnecessary or otherwise subject to interruption or curtailment during emergencies under a contract.

Changes to Pressure, Fuel, Power, & Maintenance Provisions- §290.45

• Pressure: Requires affected utilities to maintain aminimum emergency pressureof 20 psi ,or a pressure approved by the executive director .

• Fuel: Requires an affected utility maintainon-site, or make readily available during emergency operations, an amount of fuel necessary to operate any emergency power equipment and facilities during emergency operations for at least 48 hours (increased from 24).

• Power: Requires emergency power must be activated before the distribution pressure falls below 20 psi ,or a pressure approved by the executive director, or 35 psi.

• Maintenance: Requires maintenance of an emergency generator, which is part of an approved EPP, in accordance with Level 2 maintenance requirements in the current National Fire Protection Association (NFPA) 110 Standard and the manufacturer's recommendations if the affected utility serves 1,000 connections or greater, or manufacturer's specifications and as outlined in §290.46(m)(8) if the affected utility serves fewer than 1,000 connections.

Generator Maintenance Provisions- §290.46(m)(8)(B)

• Generator Maintenance & Testing:

•Requires inspection and maintenance of the generator fuel system prior to monthly generator start-up.

• Emergency generators must be maintained and tested monthly under at least 30% load based on manufacturer's name plate kilowatt (kW) rating for at least 30 minutes, or as recommended by the manufacturer, to ensure functionality during emergency situations.

• Water system is requiredto maintain an inventory ofspare parts, lubricants, and coolants for critical generator components.

• Records: An affected utility must maintain copies of operating, inspection, testing, and maintenance records for auxiliary power equipment and associated components required to be maintained or actions performed.

• Carbon monoxide monitor isrequired, and it must be equipped with an automatic alarms, can initiate generator shutdowns, and must be present and operational inside enclosed structures where generators are located. 27

New Required Monthly Inspections §290.45-.46

• Fuel Tank: Affected utilities must inspect the fuel tank for fuel levels, contamination, and condensation in the portion of the tank occupied by air; inspection of fuel lines and fittings for breaks, degradation, and replacement; inspection of fuel filters and water separators for clogging, sediment buildup, and replacement; inspection of the fuel transfer pumps, float switches and valves, where provided.

• Auxiliary power facilities must be inspected, maintained, tested, and operated in accordance withthe manufacturer's specifications and as outlined in §290.46(m)(8).

• Generator fuel system must be inspected and maintained the prior to monthly generator start-up.

• Fuel filters and water separators must be inspected for clogging, sediment buildup, and replacement.

• Fuel transfer pumps, float switches and valves where provided between holding tanks and the generator, must be inspected to verify that they are operating properly;, including fuel tank grounding rods, cathodic and generator lightning protection for damagethat may render the protection ineffective.

• Fuel pump must be inspected to verify that it is working properly when the generator is operating under load. 29 New

• Generator lubrication system must be inspected inspection and maintained prior to monthly generator start up.

• Generator Oil lines and oil reservoirs must be inspected of for adequate oil levels, leaks, breaks, degradation, and oil replacement, as well as the greasing of all bearing components and grease fittings.

• Generator coolant system must be inspected and maintained prior to monthly generator start up.

New Required Monthly Generator Inspections -II

§290.46(m)(8)(B)

• Generator block heater & coolant system must be inspected, includingthe coolant lines, and coolant reservoirs, for adequate coolant levels, leaks, breaks, and degradation. It also includes inspection of coolant filters for clogging, sediment buildup, and coolant filter replacement; and inspection of the radiator, fan system, belts, and air intake and filters for obstruction, cracks, breaks, and leaks.

• Generator exhaust manifold and muffler must be inspected to make sure that the fumes are directed away from enclosed areas when the generator is operating under load.

• Adds §290.46(m)(8)(B)(vii) to require inspection and maintenance of the generator's electrical system be conducted prior to monthly generator start up.

• Programmable Logic Controllers (PLC) and Uninterrupted Power Supplies (UPC) where applicable,must be inspected on a monthly basis to ensure that they are water-tight, not subject to floods, are properly ventilated, and that backup power supplies have adequate charge.

New Required Monthly Generator Inspections III

• Generator's switch gears must be inspected on a monthly basis to ensure they are water-tight and in good, working condition.

• Battery, chargers, wiring and cables must be inspected on a monthly basis for damage, corrosion, and connection continuity, verification that batteries are mounted and secured, that all contacts are tightened onto battery terminals, and inspection of each battery unit for electrolyte levels, adequate charge retention and appropriate discharge voltage.

• Generator engine, starters, and alternators must be inspected when the generator is operating under load to verify that they are operating properly.

31

32

Boil Water Notices (BWN)- §290.46(q)

•Clarifies when to issue a BWNand defines languagethat must be used when a special precaution, protective measure, or boil water notice is issuedor rescinded, as well as the timeframe and documentation required to be sent to the TCEQ executive director.

•Most of these requirements have not substantially changed-they have just been moved.

33

BWN Templates

•Removes boil water notice templates to allow executive director's staff to make warranted modifications to these templates;

Critical Equipment List

•Adds a table containing a non-exhaustive list of critical equipment, components and facilities that must be protected from adverse weather conditions to assist water operators with the identification of facilities and components that if lost or impacted by adverse weather would result in water system being unable to produce, treat, store, or distribute treated water to customers.

EPP Templates

•Adds an emergency preparedness plan template, under §290.47(g)(1), for use by affected utilities defined in TWC §13.1394.

•Amends the EPP template, under §290.47(g)(2), for use by those affected utilities defined in TWC §13.1395. 34

After the Emergency is Over –290.46(r)

•Clarifies that an affected utility must maintain a minimum of 20 psi or a pressure approved by the executive director, or 35 psi, respectively, throughout the distribution system as soon as safe and practicable during an extended power outage following the occurrence of a natural disaster.

After the Emergency is Over If it Doesn’t Work-Fix it. - §291.163(k)

•If anaffected utility,during emergency operations, cannot provide a minimum of 20 psi, or a water pressure approved by the commission, it must revise and submit their EEPwithin 180 days of restoration of power, and that based on a review of the plan, the executive director may require additional or alternative auxiliary emergency facilities.

Miscellaneous –290.43, .45 & .46

•Allow anaffected utility to adopt andenforce limitations on water use while providing emergency operations. (new §290.45(h)(4))

•Clarifies that public water systems that areaffected utilities must maintain records related to their emergency preparedness plan for as long as the plan is applicable. (§290.46(f)(5))

•During emergency operations,affected utilities with elevated storage must operate in accordance with their approvedemergency preparedness plan, which may or may not include using elevated storage. (new §290.45(h)(5))

Miscellaneous –290.43, .45 & .46

•Adds a setback distance of 150 feet between an elevated or ground storage tank and an on-site sewage facility (OSSF) spray field. This is consistent with the setback distance between a public water supply well and an OSSFspray field. This streamlines the approval process by eliminating the requirement for a system to submit an exception if they cannot meet the previous setback distance of 500 feet between a storage tank and OSSFspray field, while still protecting public health.

•Clarifies that only one pressure gauge is required when more than one pressure tank is connected by a common manifold.

37

38

Misc- §291.163

•Allows an affected utility to adopt and enforce limitations on water use while the utility is providing emergency operations.

•Information provided by an affected utility under this section is confidential and is not subject to disclosure under Texas Government Code, Chapter 552 as stated in TWC §13.1394(l).

EPP WAIVER –291.163

•Allows the TCEQ executive director to grant an affected utility a financial waiver to the requirement of submitting an emergency preparedness plan.

•The executive director will consider whether complying with the emergency preparedness plan requirements would cause a significant financial burden on the affected utilities customers.

•The proposed rule requires that the affected utility submit documentation to the executive director that must demonstrate the significant financial burden on customers before a waiver is granted. (§291.163(g))

39

40

NEW RULES ON THE HORIZON

On the Horizon

• Proposed PUC Authorized Acquisition Rate Rule

• AwaitedTCEQ RV Rule

• AwaitedTCEQ Immediate Notification Rule

• AwaitedTWDB Rules Regarding RWAF & The Distribution of the $1 Billion SB 28 Texas Water Fund.

Proposed PUC Authorized Acquisition Rate Rule

NEWLAW:

HB 1484(passedby87th TexasLegislature)

•CreatednewTexasWaterCodeSection13.3011entitled“INITIAL RATESFORCERTAIN WATER ORSEWERSYSTEMSAFTERPURCHASEORACQUISITION”whichallowsan acquiringwaterandsewerIOUtorequestthatthePUCallowtheIOUtochargethenewly purchasedsystem'scustomersinitialserviceratesthatare:

1)basedupontheacquiringutilities’currentrates,oranothersystem’srates,shownina tariffonfilewiththePUC;and

2)inforcefortheotherwaterorsewersystemonthedatetheapplicationdescribed bySection13.301(a)isfiled.

a)ThePUCmaynotrequireanIOUwhomakesarequestunderSubsection(a)to initiateanewrateproceedingtoestablishtheinitialratesforservicethe personwillprovidetothecustomersofthepurchasedoracquiredsystem.

43

•Allows a water and sewer utility (IOUs only) acquiring another water or sewer utility through a STM application, pursuant to TWC 13.301(a) & 16 TAC 24.239 (Sale, Transfer, Merger) , to apply to the PUC to apply an existing tariff to customers of the acquired utility (authorized acquisition rates) without initiating a new rate proceeding if the tariff is currently in force at a utility owned by the acquiring system and on file with the PUC.

• Acquiring utility must charge existing rates at the acquired utility until the PUC approves the “authorized acquisition rates”.

•Can use any step of a phase-in-rate if it is in the public interest, must proceed along similar schedule as original rate.

44

Proposed Authorized Acquisition Rate Application Requirements

•Financial projections for the first 5 years in which rates will be charged.

•5-year capital improvement plan for the acquired system.

•A Financial Assurance plan fin accordance with 16 TAC Section 24.11(c)(4).

•A rate schedule showing existing rates and requested authorized acquisition rates (AAR).

•A billing comparison showing the difference between usage of 5,000 and 10,000 gallons at existing and requested AAR.

•Any other information necessary to show the AAR request is in the public interest.

45

Proposed AAR Customer Notice Requirements

•In addition to the notice requirements for a STM Application, under PUC Rule 24.239; an acquiring utility must provide the following information to be distributed with a PUC staff drafted notice addendum after the AAR application is administratively complete:

1)A brief explanation of how an affected ratepayer can intervene;

2)How intervention differs from protesting a rate increase;

3)A rate schedule showing existing rates and the proposed AAR;

4)Billing comparison for usage of 5,000 and 10,000 gallons at existing rates and AAR.

Awaited RV Rule

NEW LAW:

SB 594 (passed by the 88th Texas Legislature) requires:

•TCEQ to count 8 RVs as 1 connection for capacity purposes, allows TCEQ to issue variances if actual usage is less.

•Retail public water and sewer utilities, including WSC’s,to only bill RV parks for water and sewer based on the RV park’sactual water usage with no additional per site surcharge.

RULE STATUS: As of 2/23/2024 TCEQ has requested a rule package number from the Texas Register and are awaiting its issuance. Once that is issued, we will be able to proceed and have more specificity on timeline.

Issues that may need to be addressed by the rule:

•What happens if the water or wastewater system has no access to the RV Park’s water usage information?

•Definition of a “surcharge.”

47

Awaited TCEQ Immediate Notification Law

NEW LAW:

HB 3810 (passed by the 88th Texas Legislature)

•Requires PWSs to notify the TCEQ immediately of an unplanned condition that has caused* a public water supply outage which may negatively impact the production, or delivery, of safe and adequate drinking water; or that has caused the system to issue a “do-not-use” advisory, “do-not-consume” advisory, or boil water notice.

• TCEQ advises water systems to call 833-419-0551 (toll free) or to use immediate notification form www.tceq.texas.gov/goto/pws-immediate-notificationwithin 15 minutes of an unplanned water supply outage or the issuance of a “do-not-use” advisory, “do-notconsume” advisory, or boil water notice.

• This bill would have required systems to notify the TCEQ immediately of any condition that “could cause” an outage, notice or advisory. TRWA was able to get this modified with a member ’s help.

TCEQ Immediate Notification Rule

NEW RULE ACTIONS: Last Fall the TCEQ solicited Pre-comments from stake holders on proposed changes to TCEQ 30 TAC 290.38 Definitions and 30 TAC 290.46(w), Security in September 2023, TRWA submitted comments including suggested definitions for:

•Boil water notice

•Do not consume advisory

•Do not use advisory

•Industrial water system

•Public water supply outage-as an event that prevents water service to more than 80% of the public water supply’s customers for more than 3 consecutive hours.

• NEW RULE STATUS: As of 2/24/2024 TCEQ has requested a rule package number from the Texas Register and are awaiting its issuance. Once that is issued, we will be able to proceed and have more specificity on timeline.

49

The Distribution of the 1 Billion SB 28 Money

& New

TWDB Rules Regarding RWAF

NEW LAW:

SB 28 / SJR 75 & Proposition 6

•SB 28andSJR 75 created a dedicated Texas Water Fund, outside the general revenue fund, to secure new sources of drinking water and to replace aging water infrastructure throughout the state.

• TRWA worked hard, with other water stakeholders, to advocate for the passage of this legislation, which includes funding for rural systems as a priority item.

• SJR 75, a proposed constitutional amendment, Proposition 6 on the November ballot, was approvedby over 70% of Texasvoters andplaced$1 billion in theTexas Water Fund.

•TWDB plans to allocate up to $150 million from the Texas Water Fund to the Rural Water Assistance Fund (RWAF)-Depends upon applications. 50

Texas Water Fund Distribution Rules

NEW RULE ACTIONS:

The TWDB has solicited responses to a survey, due April 2024, from stake holders on proposed directions on how to spend the funds , TRWA is meeting with other stakeholders and the TWDB to work toward making sure there is money available through the Rural Water Assistance Fund.

Rural Water Assistance Fund RWAF-What is it?

•The RWAF program provides small, rural water utilities with low-cost, long-term financing for water and wastewater projects. Program funding is dependent upon legislative appropriations or available funds.

•Eligible borrowers are defined as "rural political subdivisions." They include:

•nonprofit water supply corporations, districts, municipalities serving a population of 10,000 or less; and

•counties in which no urban area has a population exceeding 50,000 (a more detailed definition will be provided in upcoming updated agency rules).

•Rural political subdivisions may partner with a federal agency, a state agency, or another rural political subdivision to apply for funding.

Concurrent Sessions

Tuesday - March 26 | 4:00-5:00 p.m.

Algal Blooms: Taste & Odor in Drinking Water

Patrick Lackey, Trihydro Corporation & Andrew McBride, Schertz-Seguin Local Government Corporation

221B Room | Track 2: Operations

ALGAL BLOOMS

TASTE AND ODOR IN DRINKING WATER

Texas Rural Water Association

2024 RuralWaterCon

PATRICK K A LACKEY, , PE Senior r Engineer

Trihydro o Corporation plackey@trihydro.com

ANDREW W MCBRIDE General l Manager

Schertz z Seguin n Local l Government t Corporation amcbride@seguintexas.gov

al ga

/’alg ’

noun

plural noun: algae

a simple, nonflowering, and typically aquatic plant of a large group that includes theseaweedsand many single-celled forms. Algae contain chlorophyll but lack truestems, roots, leaves, and vascular tissue.

RED RHODOPHYTES

Marine type

characterized by red color.

ALGAE TYPES

BROWN CHRYSOPHYTES

Marine type, characterized by yellow or brown color. Includes kelp, sargassums and related species.

GREEN CHLOROPHYTES

Aquatic type , capable of photosynthesis, without roots, stems or leaves.

BLUE GREEN CYANOBACTERIA

Similar to green algae, but lack cell nucleus, and are bacterial in nature, opposed to plant structure of algae, above.

Algae are responsible for approximately 70% of the earth’s photosynthesis of carbon dioxide to oxygen, for the atmosphere.

Algae has an important role in the petroleum, pharmaceutical, and food indus try.

Algae growth requires available nutrients (nitrogen, phosphorus, and calcium), clear water (high sunlight transmission), and calm flow patterns.

Green algae growth requires warm water, greater than 80 degrees Fahrenheit.

Green algae can produce Geosmin and 2-methylisoborneal(MIB), naturally organic compounds that produce an earthy-musty taste and odor.

Detection levels occur at 0.05 ng/L (ppt), human detection at 5-10 ppt. Mos t noticeable by customers in warm or hot water (coffee or tea).

Geosmin and MIB are non-toxic, but taste and odor are objectionable.

DRINKING WATER

TREATMENT

In addition to conventional surface water treatment of chemical coagulation, sedimentation, f iltration, and disinfection, additional treatment steps are necessary.

Enhanced oxidation by potassium permanganate, chlorine dioxide, or ozone are beneficial. Hydr ogen peroxide and ultraviolet radiation are also effective.

Adsorption with GAC (granular activated carbon) or PAC (powdered activated carbon) are ef fective in removal. These are generally seen as carbon addition, contact vessels, or filter caps.

Commer cial algaecide products (intended for potable water treatment) are available. Copper sulfate and non-chlorine, copper-based chemical addition, can modify Geosmin molecules to non putrid compounds.

ALGAE ISSUES & CUSTOMER EDUCATION

Customer education that taste and odor (T&O) problems attributed to algae are non-toxic.

Continued water testing confirms water meets all drinking water standards.

Refrigeration and/or fruit (orange, lemon, or lime) additions are helpful to improve taste. Household carbon filters are effective in removing T&O.

Until raw water quality improves by rainfall flushing, increased circulation or algae control, T&O will persist.

Recreational contact with algal waters while not prohibited is not encouraged. Physical reaction to contact is different with personal sensitivity, and algal types. Skin irritation or respiratory difficulties are the most common symptoms.

LABORATORY MONITORING

Algae identification and monitoring are not normal, required drinking water requirements. However increased monitoring is warranted in susceptible seasons.

Important tests may include:

Raw Water Temperature

Turbidity

Chlorophyl A

UV 254 (aromatic carbon ring detection)

Total Organic Carbon TOC

Historic source water flow patterns

Prior system taste and odor trends

Concurrent Sessions

Wednesday - March 27 | 9:30-10:30 a.m.

Women of Water (No Slides)

Facilitators: Lara Zent & Mary Alice McKaughan, TRWA; Panelists: Rachel Webb, South Rains SUD & Lauren Evans, East Medina SUD

220 Room | Track 1: Management

Water Distribution System Analysis Involving Elevated Storage*

Terry Winn & David Stanley, STV, Inc.

221B Room | Track 2: Operations

Antidegradation in TPDES Permitting* (No slides)

Jason Hill; Of-Counsel for Allensworth

221C Room | Track 3: High Growth

Best Practices for Compliance with the Texas Public Information Act* (No slides)

Mike Gershon & Kathryn Thiel, Lloyd Gosselink P.C.

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Wednesday - March 27 | 9:30-10:30 a.m.

Water Distribution System Analysis Involving Elevated Storage*

Terry Winn & David Stanley, STV, Inc.

221B Room | Track 2: Operations

* This session is approved for CLE credit.

Water Distribution Analysis

Involving Elevated Storage

TODAY’S TOPIC

Let’s Talk Elevated Storage:

What is it?

What does it do?

What are the advantages?

What about system analysis?

What is required for analysis?

What does analysis give us?

TRWA

Terry Winn, PEDavid Stanley, PE

Elevated Storage

Minimum of 80’ above the highest connection served

TCEQ requires for >2,500 connections

3 major types

Elevated Storage -3 Major Types

Elevated ground storage

Standpipe (cylindrical)

Elevated storage tank

•Multi-Leg

•Pedasphere

•Composite

•Others

COMPUTERIZED MODEL

Distribution Model Uses

System component sizing

Water quality

•Disinfectant decay

Transient pressure

•Surge analysis

HANDY INFORMATION

Digital mapping

Historical data •Metered Usage

CONSIDERATIONS

System Analysis

Line sizing

Supply capacity

Storage capacity

Service pumping capacity

Fire

TCEQ

MODELING

Steady state

•Meet minimum pressure o Peak demand o Fire flows

Extended period simulation (EPS)

•Storage, Pumping, Pipe capacity

•Operational control

CASE HISTORY -Special Utility District

Size –9,600 connections

Supply

•Wells, Surface water, Purchase

Pressure planes

•Six planes, Five elevated storage tanks

Information available

•GIS mapping

•Monthly and Daily usage for each pressure plane

•SCADA data -past four years

ANALYSIS

Develop Diurnal Demand Curve

Largest pressure plane has 1 elevated tank SCADA data

•Highest demand day

•Elevated tank level

•Metered supply

Calculated demand =

•Elevated tank volume change + Supply

EPS MODELING RESULTS con’t.

ELEVATED STORAGE CONCLUSIONS

Required for larger systems

Benefits are significant

Diurnal curve may be non-typical

Extended period simulation (EPS)

Insight into system capacity and operation

Accurate diurnal curve = Accurate results

Special Utility District needs more supply to GST No. 3!

Concurrent Sessions

Wednesday - March 27 | 11:00 a.m.-12:00 p.m.

Employee Engagement & Retention Panel* (No Slides)

Moderator: Sonya Stocklin, TRWA; Panelists: Kyle Eppler, Wickson Creek SUD; Carlos Febus, SS WSC; & Mark Rogers, Elderville WSC

221A Room | Track 1: Management

PFAS/Emerging Contaminants* (No Slides)

Matt Munro & Jennelle Crane, TCEQ

221B Room | Track 2: Operations

High Growth Roundtables* (No Slides)

Facilitators: Lara Zent, TRWA & Dacy Cameron, Aqua WSC

220 Room | Track 3: High Growth

Grant & Funding Opportunities Panel*

Moderator: Jason Knobloch, TRWA; Panelists: John DeLuca, CoBank; Nick Roederer, Rural Water Financing Agency; & Judy Langford, Langford Community Management Services

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Wednesday - March 27 | 11:00 a.m.-12:00 p.m.

Grant & Funding Opportunities Panel*

Moderator: Jason Knobloch, TRWA; Panelists: John DeLuca, CoBank; Nick Roederer, Rural Water Financing Agency; & Judy Langford, Langford Community Management Services

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

u INTERIM FINANCING u

CoBank can help rural water and wastewater systems with pre-development and construction funding prior to receipt of USDA RD long-term financing.

Low cost financing with a quick and simple process by an experienced industry lender

n Interest only payments – extends interest only period provided by RD

n Low variable rate pricing

n Borrower pays legal/ bond counsel costs

n Generally unsecured

n Short application and quick closing

Bridge loans for Interim RD Financing

n Finances pre-development costs needed to meet the Letter of Conditions, such as final project engineering and design, obtaining easements, or preliminary legal costs

n Single advance loan

n Up to 364 days to maturity

n Must have:

• RD Letter of Conditions

• Letter of Intent to Meet Conditions

• RD Obligation of Funds

n Requires CoBank Interim RD Financing

Interim RD loans

n Construction financing

n Multiple advance loan with monthly draws approved by RD

n Loan amount matches the RD Letter of Conditions loan amount (no funding for grant)

n Generally 36 months to maturity or construction period

n Must have RD Commitment to Lend letter to draw funds

Sustaining a rural community is hard work. Let CoBank handle the financing.

TEXAS RURAL WATER ASSOCIATION & RURAL WATER FINANCING AGENCY PROGRAM OVERVIEWS

Rural Water Financing Agency (www.ruralwaterfinance.com)

• The Rural Water Financing Agency (“Agency”) is a public agency designed to allow borrowers of the Agency to join together for the purposes of financing municipal projects on a pooled basis

• The Agency can lend to governmental entity borrowers in all 50 states

• The Agency has a nine-member Board of Directors and Gary Larimore serves as President and CEO of the Agency

• Please visit www.ruralwaterfinance.com for more information and to fill out an application

Interim Loan Program

• Provides construction financing to borrowers with a USDA Takeout

• Streamlined and efficient application and documentation

• Fixed rate for the term of construction (contact us below for current interest rates)

• All costs included in the loan rate

• All interest is capitalized until the end of construction

Finance Team History: 1,200+ loans for $3.7 billion

Flex Term Program

• AA- rated program offers borrowers access to tax-exempt markets at low rates

• No debt service reserve requirement

• Fixed rate terms from 1-30 years

• Variety of project types (construction, refinancing, cost-overruns, match funding, etc.)

• Funding can be provided in 90-120 days

Finance Team History: 300+ loans for $500 million

Contact Information

Mr. Jason Knobloch

Mr. Gary Larimore

Mr. Nick Roederer

Deputy Executive Director President & CEO Managing Director

Texas Rural Water Association Rural Water Financing Agency Raymond James

(512) 472-8591 x137 (270)535-5921

jason.knobloch@trwa.org

G.Larimore@krwa.org

(502)560-1274

Nick.Roederer@raymondjames.com

TRWA / USDA Rural Development Engineering Conference

Bankers Panel

Presented by: John DeLuca Vice President, Water Infrastructure

March 25, 2024

CoBank at a Glance

 Member of the Farm Credit System, a Government Sponsored Enterprise with approximately $340 billion in assets

 A broad-based cooperative financial services organization serving vital industries across rural America:

 Agribusiness

 Communications

 Energy

 Water

 $180+ billion in assets; ‘AA-’ rated by S&P and ‘A+’ by Fitch Ratings

 Ranked by Global Finance magazine as one of the 50 most creditworthy banks in the world; one of only three ‘safest banks’ in the United States

 Cooperatively owned and supporting approximately 11,000 customers nationwide

 Headquartered outside Denver, CO; regional offices and banking centers across the country

 Approximately 1,100 employees nationwide

 Largest commercial lender to rural water systems in the country!

 Over 25 years experience of financing water utilities

 History of lending along side of State and Federal Agencies

 Supporter of National Rural Water and state rural water associations

Financial Partner with the U.S. Water Industry 3

3

Types

 Interim Loan –Construction financing for USDA direct loan project

 Term Loan –Direct loan for financing system improvements

 USDA Guarantee Loans

 Refinance Loan –Graduation of USDA loan or other bank debt

 Line of Credit –Short-term financing

Interim / Construction Financing

 USDA obligated direct loan

 Variable rate pricing

 Term: up to 36 months for construction

 Unsecured

 No financial covenants or debt reserve

Benefits

 Preserves full 40-year tenor of RD direct loan

 Interest-only during construction

 Interest can be rolled into the USDA loan, subject to USDA approval

 Provides funding to help utility meet USDA’s letter of conditions

 Pays for a portion of engineering costs, right of ways, and other predevelopment costs that will be approved by USDA under the project

 Maximum Amount:10% of total project cost

 Term: Up to 364 days from closing

 Single advance at closing or draw funds

 Variable interest rate

 Must use CoBank as Interim lender

Term Financing

 Term Loan (up to 20 years)

 Funds specific or multiple projects

 Multiple draws during construction

 Principal repayment starts once construction is complete

 ConsiderUSDAGuaranteeProgram

 Benefits

 Interest-only during construction

 Repayment structured to match the life of the asset

 The shorter the repayment the lower the interest rate

 Interest rate can be fixed for the life of the loan

•Variable rate during construction

•Option to fix all or portions of the draws during construction

 Do not require engineering report or environmental report

 Closing in as little as 45 -60 days

7

USDA Guarantee Loans

 CoBank works closely with the State and National USDA staff throughout the guarantee process

 Terms up to 30 years at a fixed interest rate

 Multiple advance during construction

 Converts to amortizing term loan after construction

 Standard Minimum Covenants

Line of Credit

 One year term with annual renewal option

 Variable rate pricing

 Designed to move projects forward quickly and easily

 Revolving loan for financing of:

 Planning & Design

 Maintenance / Small Projects

 Inventory / Equipment Purchases

 Storm / Emergency Repairs

EquipmentLeasing

 Ease of Use

•Pre-approved lease lines allow for easy acquisition of equipment and vehicles

•Flexible terms and options

 Cash Impact

•Pay nothing down with 100% financing

•Spread out the cost of needed assets and maintain cash for emergencies

 Asset Management

•Helps maintain late-model fleet of equipment

• Create a planned replacement cycle while reducing repair costs

 Ownership & Obsolescence Risk

•Lessor bears residual value risk -customer can “give the equipment back” and get updated technology



 Service Trucks

 Construction Equipment

 Forklifts

 Water or Sewer Trucks

Generators

Aeration and Chlorination Components



Water Meters!

Rural

John DeLuca

Vice President, Water Infrastructure.

W: (303) 694-5958 | C: (917) 838-7376

Jdeluca@cobank.com

CoBank, ACB |6340 S.

|Greenwood Village, CO 80111

Concurrent Sessions

Wednesday - March 27 | 1:30 p.m.-2:30 p.m.

Workforce Development Through Apprenticeship & High School Programs

Jacquelyn Knobloch, TRWA

221A Room | Track 1: Management

Operations Roundtables* (No Slides)

Facilitators: Larry Bell, TRWA & Ross Brookbank, Copeville SUD

220 Room | Track 2: Operations

Anticipatory Reach: Leveraging the Broad Potential of Artificial Intelligence While Mitigating the Risks*

Emily Westridge Black, Abdul Althebaity, & K. Mallory Brennan; Shearman & Sterling LLP

221C Room | Track 3: High Growth

Open Meetings Act*

Mary Alice Boehm-McKaughan, TRWA

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Wednesday - March 27 | 1:30 p.m.-2:30 p.m.

Workforce Development Through Apprenticeship & High School Programs

Jacquelyn Knobloch, TRWA

221A Room | Track 1: Management

The landscape of the water industry is rapidly changing.

Utilities everywhere are having trouble finding dependable and trained operators.

• Young people aren’t entering the profession

• Lack of industry awareness

Over the next decade, the water sector is expected to lose between 30 and 50 percent of the workforce to retirement.

• Years of industry knowledge will also be lost.

• Will further strain the water industry as the pressure to provide clean water grows.

© Texas Rural Water Association

Buzzword:

WORKFORCE DEVELOPMENT

Definition:

Workforce development is a people ‐ first approach toupskillingworkers for long‐ term success. The aim of workforce development is to foster prosperity for individuals, communities,andbusinesses.

Why is WORKFORCE

DEVELOPMENT crucial for

today’s workplace?

When organizations overlook thepeoplebuilding their business, they risk losing talent that can grow and mold with the company. Workforce development prioritizeshumandevelopment and boosts morale, retention, and productivity.

‐Maggie Wooll, betterup.com

What does Workforce Development look like internally?

• Development Opportunities

• Succession Planning

• Active Board of Directors

• Asset Management

• Community Involvement

Food for thought…

• What are the impacts on the community when someone retires?

• If you are retiring, do you feel safe leaving the system in someone else’s hands?

• Do you know trade skills that will be lost if not passed on?

What does WORKFORCE DEVELOPMENT look like externally, outside of the system?

• High School Programs

• Apprenticeship Program

• College Partnerships

4‐H Water Ambassador Program

• Four‐year program for high school students.

• Program educates youth about water resources in Texas.

• Ambassadors engage in various education and service activities throughout the year.

• Program provided a platform for youth to connect with water industry professionals and educators.

• 2023 State Legislation included provisional licensing for students under 18, allowing them to acquire their ‘D’ License

• Water Operator training designed for high school implementation

• Hybrid based course on a semester length curriculum that provides video education and includes a high school teacher proctor

• Expected to launch in 2024

• 4‐week training for Class D Water Operator license for high school students

• Collaboration initiative between local schools and employers

• Hosted on school campuses

•

The NRWA Solution to Workforce Development:

NRWA Nationwide Apprenticeship Stats

• 36 Registered Programs

• 624 Active Apprentices Nationwide

• 528 Participating Employers

• 215 Completed Apprentices

• 42 Female Apprentices

• 39 Veteran Apprentices

Texas Apprenticeship Program Stats

• 11 Active Apprentices

• 17 Approved Employers

• 50+ Applicants

• Cohorts start every January and July

Terms of Apprenticeship

• 4,000 hours OJT (On‐the‐Job Training)

• 288 hours RTI (Related Technical Instruction)

• Pass 3 Texas licensing certification exams: Class D, Class C, and CSI

• Typically, 2 years to complete the program

• Probationary period: first 1,000 hours OJT. Either party can terminate the apprenticeship agreement without cause.

• Wage progression: progressively increase the schedule of wages based on the acquisition of skills and related instruction.

• Previous credit: may receive credit for previous work experience in terms of OJT already earned and/or credit for RTI already completed.

SLIDE

Putting it all together…

“If you want something new, you have to stop doing something old” Peter Drucker

Concurrent Sessions

Wednesday - March 27 | 1:30 p.m.-2:30 p.m.

Anticipatory Reach: Leveraging the Broad Potential of Artificial Intelligence While Mitigating the Risks* Emily Westridge Black, Abdul Althebaity, & K. Mallory Brennan; Shearman & Sterling LLP

221C Room | Track 3: High Growth

* This session is approved for CLE credit.

How Do We Define Artificial Intelligence?

According

to the dictionary: Artificial

intelligence is the capability of a machine to imitate intelligent human behavior.1

According

to IBM: Artificial intelligence leverages

computers and machines to mimic the problem-solving and decision-making capabilities of the human mind.2

Subfields of AI

Machine Learning

•Leverages data and algorithms to make predictions, identify patterns or optimize decisions based on the data

•Example: checkers master beaten by computer that “learned” by playing prior games

Neural Networks

•Comprised of node layers, with each node containing (i) input layer, (ii) one or more hidden layers (or perceptrons), that process data in a binary way and (iii) output layer. Data is passed from one layer to the next when a threshold is activated

•Example: hand-writing recognition

Deep Learning

•A neural network that consists of three or more layers, which can ingest unstructured and raw data while automatically determining the features that distinguish the categories of data

•Example: automated driving (detection of stop signs, traffic lights and other vehicles)

Subfields of AI (cont’d)

Natural Language Processing

•Uses algorithms and models to process text or spoken words and to interpret intent and sentiment

•Example: email spam filters, spell check, chatbots

Generative AI

•Creates new content (e.g., text, images, sounds, or animation) by dissecting data, identifying structures and understanding patterns; when given a prompt, the technology produces new content based on the data inputs

•Example: image, audio or code generators (e.g., Midjourney, Dall-E, Copilot)

Large Language Model

•A deep learning algorithm, typically with at least one billion or more parameters (or variables in a model), that generates human-like text and natural language

•Example: ChatGPT

Relevant AI Applications

Applications in Legal Settings

Electronic Discovery / Predictive Coding

Contract Management / Due Diligence Review

Litigation Analysis / Predictive Analysis

Legal Research / Writing Memoranda

•Classify documents as relevant, irrelevant or key after extrapolating data gathered from a sample of documents classified by the attorney

•Find key information that govern performance or important events in contracts, such as termination dates or deadlines for notice of renewal

•Review voluminous numbers of documents to identify and summarize material content of interest

•Predict litigation outcomes by analyzing case law, dockets, and jury verdicts

•Evaluate public sentiment around particular issues based on review of discourse

•Use natural language queries—rather than simple Boolean queries—to return more meaningful and more insightful results

•Draft legal memoranda in response to legal questions

9

Applications in Utilities Sector

Predictive Maintenance

Advanced Cybersecurity

Water Usage Simulations

•Analyzing large amounts of data to detect potential equipment failure or maintenance needs

•Detecting actual attacks accurately, creating fewer false-positive results

•Prioritizing responses based on the level of risk

•Simulating various scenarios while considering different conditions including population growth, climate change, and policy changes

•Ensuring adequate supply and managing peak demand

•Providing personalized recommendations and answering questions quickly, even during emergencies

11 12

Applications

Monitor Water Quality

•Using AI-powered sensors to monitor water quality parameters (e.g., pH levels, contaminants)

•Sending automated alerts to ensure fast response to potential issues

Operational Efficiency

•Optimizing equipment to minimize energy consumption while maintaining adequate water pressure and supply

•Monitoring, analyzing, and summarizing water quality regulations

•Generating reports required by regulatory agencies

Key AI Risks

• In July 2023, SEC Chairman Gary Gensler gave public remarks identifying five key risks of AI in the securities industry

o Financial stability –overuse of AI, which may incorporate inaccurate information or hallucinations, can create herding behavior

o Data privacy and intellectual property considerations –includes concerns over PII, copyrighted materials, and NPMI.

 May also implicate privilege considerations

o Bias –AI may have trained on information that includes historical biases or latent features that are proxies for protected characteristics

 NYC recently adopted a law requiring companies to conduct an independent bias audit and publish the results before using AI and algorithm-based technologies to evaluate NYC job candidates and employees

o Deception on the market

o Conflicts of interest

Key AI Risks – Conflicts of Interest

• In July 2023, the SEC proposed a sweeping new conflicts of interest rule to address the use of AI by RIAs and broker-dealers

o Applies to “covered technologies” (“CT”), which are analytical, technological or computational functions, algorithms, correlation matrices, or similar processes that optimize for, predict, guide, forecast, or direct investment-related behaviors

 Expressly includes AI, but the scope is much broader. (Peirce and Uyadasay it will “encompass nearly everything.”)

o Requires RIAs and BDs to:

 Evaluate whether use of CT in investor interactions may create a conflict of interest

 Test whether there are conflicts of interest

 Determine whether any conflict of interest results in the firm’s (or its associated person’s) interest being placed above investors’ interests

 “Promptly” eliminate or neutralize any such conflicts of interest

o Requires written policies and procedures and introduces new record-keeping requirements

o What about the black box?

AI and the Securities Angle

Consider the following scenario:

•AI becomes disruptive to some businesses and industries.

•These companies lose money because AI disrupts their business.

•As a result, the stocks of these companies drop.

•Question: could these companies be sued for securities fraud because the companies failed to sufficiently warn the stockholders about the impact of AI?

AI and the Securities Angle: An Early Case Study

• Shares of Chegg Inc. lost nearly half of their value after warning that ChatGPTis cutting the growth of its homework-help services.1

• The company’s forecasts of revenue and profit also fell short of analysts’ estimates.

• The CEO of Chegg told investors that ChatGPT has an impact on the company’s new customer growth rate. 1

• Law firms have announced investigations of Chegg for potential securities law violations. 2,3

1.https://apnews.com/article/chegg-stock-shares-chatgpt-ai-a877423bd4a8f67b1494363fc81cf52a

2.https://www.globenewswire.com/news-release/2023/05/03/2660474/0/en/CHGG-Alert-Monsey-Law-Firm-of-Wohl-Fruchter-LLP-Investigating-Chegg-Inc-for-PotentialSecurities-Law-Violations.html

3.https://www.abc27.com/business/press-releases/globenewswire/8830562/investigation-alert-kessler-topaz-meltzer-check-llp-is-investigating-securities-fraud-claims-onbehalf-of-chegg-inc-nyse-chgg-investors/

17

Potential plaintiffs may argue that companies are obligated to disclose the impact of AI on their businesses under Item 303 of Reg S-K

Does Item 303 create a duty of disclosure that is actionable under Section 10(b) and Rule 10b-5?

•Second Circuit –yes

•Third, Ninth, and Eleventh Circuits –no

This term, the Supreme Court has granted cert in MacquarieInfrastructureCorporationv.Moab Partners,L.P. to address the question.

AI and the Securities Angle: AI-Washing

• In December 2023, SEC Chairman Gary Gensler cautioned public companies against exaggerating or misstating how they are using AI in their businesses

o Companies are tempted to throw around the term “AI” even if the company have not incorporated true AI processes or functions

o Claims about AI capabilities, like other statements public companies make, are subject to the federal securities laws

AI mentions on earnings calls have skyrocketed.1

• First AI-related securities suit was filed in February asserting that a software company engaged in AI-washing2

o Company’s stock price dropped more than 30% after a financial research firm published a report saying its promised artificial intelligence technology is “smoke and mirrors”

o Complaint alleges that the Company made misrepresentations regarding the extent to which the company’s products and services actually employ AI technology

1.https://markets.businessinsider.com/news/stocks/ai-stocks-sp500-4q-tech-earnings-artificial-intelligence-goldman-sachs-2024-2

2.https://www.dandodiary.com/2024/02/articles/securities-litigation/first-ai-related-securities-suitfiled/#:~:text=The%20lawsuit%20that%20the%20New,of%20this%20kind%20of%20lawsuit.

AI and the Securities Angle: Watch this Space 18

17

AI and Antitrust Considerations

• Section 1 of the Sherman Act prohibits agreements “in restraint of trade or commerce”

• Prohibited conduct under Section 1 includes collusion, price fixing, and customer/market allocation amongst competitors

Artificial Intelligence and algorithms are developing into an area of major interest to antitrust enforcers

Antitrust enforcement agencies are actively looking into computer algorithms and AI-facilitated competitor coordination

Antitrust risks are highest when competitors fix prices or exchange information in a way that facilitates price coordination

Many companies already use sophisticated computer algorithms to analyze and calculate pricing or production

• Information sharing can be used to infer existence of an “agreement” and/or such acts may be deemed a violation 19

AI and Antitrust Considerations:

Benchmarking

• Generally accepted practice across industries

• Companies compare performance with peers to improve operations

• Often done through trade associations or third-party organizations

• Traditionally structured around DOJ “safety zones”:

• Anonymized submissions

• Aggregated summaries

• Historical data (at least three months old)

• Third-party intermediary

DOJ Eliminated Safety Zones Last Year

• The DOJ claimed companies use benchmarking to coordinate prices and engage in other anticompetitive activities

• Even without explicit communications

Even when following the old safety zone rules

• AI and Algorithms Can Enable Anticompetitive Use of Benchmarking Information By:

• De-anonymizing data

• Unpacking patterns in price movements from historical data

• Facilitating price coordination (predictive algorithms)

“The safety zones were written at a time when information was shared in manila envelopes and through fax machines. Today, data is shared, analyzed, and used in ways that would be unrecognizable decades ago. We must account for these changes as we consider how best to enforce the antitrust laws.”

AI and Antitrust Considerations: Watch this Space

• InRe:RealPage,Inc.,RentalSoftwareAntitrustLitigation(No.II)1

• Class action against RealPage (a software company) and dozens of landlords

• RealPage offers an AI tool that makes recommendations for rental prices

• The tool analyzes non-public, commercially sensitive data supplied by the landlords

• Plaintiffs claim RealPage’s tool helps landlords raise rent and keep prices above market rates in violation of U.S. antitrust law

• District of Columbia’s Attorney General also sued RealPage and the city's largest landlords, asserting similar claims2

1.https://www.reuters.com/legal/litigation/realpage-must-face-renters-price-fixing-lawsuit-over-multifamily-housing-2023-12-29/

2.https://www.reuters.com/legal/litigation/dc-sues-tech-company-realpage-landlords-over-rental-prices-2023-11-01/

DOJ’s Principal Deputy Assistant Attorney General of the Antitrust Division, Doha Mekk, February 2023

AI Best Practices

Best Practices to Manage AI Risks

• Understand how AI is presently being used and opportunities for future implementation

o Likely that employees are already using AI

o Be attuned to how third-party contracts permit the use of company information

o Explore how AI is currently used in the industry and think critically about potential new applications

• Diligence AI tools under consideration

o Standardized processes for identifying, vetting and approving AI technology can ensure orderly implementation

o Carefully consider potential conflicts of interest, inherent biases, and concerns regarding the accuracy of AI outputs

• Develop training programs and best practices protocols for use

o Provide recommendations for use of specific tools and guardrails to protect against attendant risks (e.g., cybersecurity, privilege waiver, hallucination, and biases)

Best Practices to Manage AI Risks (cont’d)

• Implement and enforce AI-specific policies and procedures

o Evaluate existing policies (including regarding privacy, cybersecurity, conflicts of interest, and books and records) and how they may apply to the use of AI

o Consider implementing AI-specific policies to ensure consistency in use and disclosure across applications

o The SEC’s proposed rule outlines key policies to consider, including how to evaluate AI for conflicts of interest, how to determine whether there is a conflict, and how to eliminate or neutralize it

• Monitor, evaluate and respond to changes in quickly evolving regulatory landscape

o The regulatory landscape is evolving both domestically and internationally, with a patchwork of potentially applicable requirements developing at the city, state and federal levels

Best Practices to Manage AI Risks (cont’d)

• Adjust Public Disclosures

o Evaluate whether securities disclosures accurately reflect the potential impact of AI on the business

o Ensure that the company’s disclosures adequately warn stockholders about the possible risks created by the impact of AI

o Since July 2023, more than 125 companies have identified a variety of AI-related risks on their Forms 10-K (including poor implementation or use of AI, competitors gaining advantages through AI, evolving regulatory regimes, and reputational harm)

• Consider an AI Task Force

o Given the wide range of potential applications of AI in the business, establishing an AI Task Force to lead in the implementation of AI can ensure awareness across potential applications and business areas and enhance intelligence advances in the use of AI

Ethical Obligations for Attorneys

Duty of Competence

Attorneys must be up to speed on changes in the law and the practice of law, including awareness of the risk and benefits of technology used in practice.

•ABA Rule 1.1, Cmt. 8: “A lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology . . . .”

Duty of Competence (cont’d)

Need to know about the various AI tools and determine if the use of AI would be beneficial to the client

Should have a basic understanding of the AI programs that are utilized

Refrain from automatically accepting the results of AI programs as true

Since the technology is new and developing, we need to verify that it is producing accurate and reliable results

Duty to Communicate

Attorneys must discuss with their clients the decision to use AI in providing legal services.

o ABA Rule 1.4: “A lawyer shall . . . reasonably consult with the client about the means by which the client's objectives are to be accomplished . . . .”

• Need to obtain informed consent from the client before using AI

• Should explain the risks and limitations associated with using the AI tool

Legal Fees

Attorneys are not allowed to charge an unreasonable fee, and fees must take into account the amount of time, labor and skill required to perform the service.

•ABA Rule 1.5: “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include . . . the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly . . . .”

•Since the technology is rapidly developing, lawyers might have to use AI to lower costs for their clients

Duty of Confidentiality

Attorneys owe their clients a general duty of confidentiality and have an obligation to prevent the unauthorized disclosure of or access to client information.

•ABA Rule 1.6: “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

•Need to ensure client confidential information is secured

•Understand the confidentiality safeguards in place when using third-party AI

Duty to Supervise

Attorneys have an ethical obligation to supervise lawyers and nonlawyers who are assisting lawyers in the provision of legal services to ensure that their conduct complies with the Rules of Professional Conduct.

• In 2012, the ABA adopted an amendment to Model Rule 5.3 that changed the title of Rule 5.3 from “Responsibilities Regarding Nonlawyer Assistants” to “Responsibilities Regarding Nonlawyer Assistance.”

• Need to supervise the work of the AI utilized in providing the legal services

• Should understand the technology well enough to ensure compliance with the lawyer’s ethical duties

Emily Westridge

Emily Westridge Black is a partner in the firm’s Litigation practice. Her practice focuses on the representation of companiesand high-profile individuals in class actions, internal investigations, product liability litigation, global compliance and anticorruption matters, cybersecurity matters, and other complex commercial litigation.

Emily has secured major victories for clients, including walk-away, voluntary dismissals in a price-gouging class action againsta prominent grocer and a breach of fiduciary duty suit against a hedge fund and its principals. She recently obtained an early, favorable settlement of a Telephone Consumer Protection Act class action, as well as multi-million dollar judgments for a specialty retailer in two suits related toa security compromise of its payment card network. She has also been active in various investigations related to fraud and corruption, product safety concerns and executive malfeasance. Most recently, Emily has led investigations into alleged FCPA and UK Bribery Act violations by employees and agents of publicly traded transportation, manufacturing and software companies. She also represented an oil and gas servicescompany in connection with a criminal investigation of alleged FCPA violations.

She has been recognized by Chambers USAfor general commercial litigation, with clients noting that Emily is “aconsummateleaderinlitigation matters” who is “extremelygoodatbuildingcoalitions withoutcedingground.” Others praise her as “justwildlyintelligent” and “agreatwriter” with “keeninsight,” who “canquicklygraspthelegalimplications ofanissuebutmoreimportantlycanquicklygraspthepracticalimplications thoselegalissueshaveforourbusiness.” As a result, Emily “deliverspracticaladvicethatalmostalwaysgeneratescostsavings.” Clients also describe her as “sharp,” and “knowledgeableandthoroughinheranalysis,” “absolutelyphenomenalwithexpertwitnesses,” and note that “her work ethic is unbelievable.” Emily has also been recognized by TheLegal500in 2023 for her work in Financial Services Litigation and Securities Litigation and was named “Attorney of the Year” by the TexasLawyer in 2019.

Emily is dedicated to serving the community. Since 2010, she has been involved in humanitarian asylum work, and has helped twelve individuals from countries including Cameroon, Ghana, Guatemala, El Salvador and Honduras win asylum, including a case that secured a precedent-setting opinion on constitutional due process rights of asylum-seekers.

Prior to joining private practice, Emily served as a law clerk for the Honorable W. Osmond Smith III in the Superior Court ofNorth Carolina.

Emily is a member of the ShearmanWomen Council, a member of the firm’s Women Partners Committee, and a member of the firm’s D&I Leadership Committee.

Relevant Experience:

Emily Westridge Black

Emily

Emily Westridge Black

Emily Westridge Black

WhiteCollarDefense&Investigations

Professional

Emily Westridge Black

Emily Westridge Black (Cont.) Partner, Litigation OF NOTE (CONT.)

Emily Westridge Black

Emily

K.Mallory Brennan

K.

K.Mallory Brennan

Concurrent Sessions

Wednesday - March 27 | 1:30 p.m.-2:30 p.m.

Open Meetings Act*

Mary Alice Boehm-McKaughan, TRWA

221D Room |Track 4: Board of Directors

* This session is approved for CLE credit.

The Texas Open Meetings Act

* This presentation satisfies the training requirement of Texas Government Code Sec. 551.005*

MARY ALICE MCKAUGHAN ASSISTANT GENERAL COUNSEL

Outline Background

Applicability

Who is subject to the Act?

What is a “quorum?”

What constitutes a “meeting?”

Notice Requirements

Recordkeeping

Procedures and Requirements for Open/Closed Meetings (Executive Sessions)

Penalties

Background & Purpose of the OMA

Adopted in 1967 to make government decision-making accessible to the public. Substantially revised in 1973, and codified as Government Code Chapter 551 in 1993.

“Citizens are entitled…not only to know what government decides, but to observe how and why every decision is reached.” Acker v. Tex. Water Comm’n, 790 S.W.2d 299 (1990)

General Rules:

Decisions entrusted to governmental bodies must be made by the body as a whole at a properly called meeting.

A governmental body’s meetings must be open to the public, unless a statute expressly permits an executive session.

A Note about COVID-19

In March 2020, Governor Abbott relaxed many requirements of the Open Meetings Act to accommodate virtual meetings in response to COVID-19.

The governor’s order EXPIRED on September 1, 2021, meaning all COVID-19 exceptions are no longer in effect. All meetings must fully comply with the Open Meetings Act just as they did pre-pandemic.

Applicability

Who is subject to the Act?

What is a “quorum?”

What constitutes a “meeting?”

Who is subject to the OMA?

“Governmental Bodies,” as defined by Government Code Sec. 551.001

Boards, Commissions, Departments, Committees, and Agencies

County Commissioners’ Courts

Municipal Governing Bodies

Political Subdivisions (ex: Districts)

School Boards

Water Supply Corporations that provide water/wastewater service and are exempt from ad valorem taxation under Sec. 11.30, Tax Code.

What is a

Quorum?

General Rule: A quorum consists of majority of members of the entity’s governing body. Meetings of less than a quorum are NOT subject to the Act. Can happen anywhere a majority gathers.

You cannot evade the act by:

Meeting over the phone from different locations

Conducting serial meetings of less than a quorum to discuss official business (“walking quorums”).

Communicating by text/email (Public Information Under Ch. 552, Gov. Code).

Committees & Subcommittees

Committees and Subcommittees consisting of fewer members than are needed for a quorum are ok, but be careful:

If the subcommittee has authority to supervise and control public business, the subcommittee itself might be its own “governmental body” subject to the act.

Subcommittee can make recommendations, but the entire committee cannot serve as a “rubber stamp” for their decisions.

What is a “Meeting” under the OMA?

Definition #1

A meeting occurs when:

A quorum of a governmental body gathers;

The public business that the governmental body has authority to supervise or oversee is discussed; AND

A member of the governmental body participates in the discussion.

Examples: Formal meeting, attendance at another entity’s meeting, using the restroom, eating lunch, email, conference calls

**Develop a habit of asking yourself, “is this a meeting?”

**Circumvention: the Act may apply even when a quorum is not present.

What is a “Meeting” under the OMA?

Definition #2

If the gathering is called by the governmental body, or the governmental body is responsible for the gathering, a meeting occurs when:

A quorum of a governmental body gathers;

The public business that the governmental body has authority to supervise or oversee is discussed; AND

The members receive information from, give information to, ask questions of, or receive questions from any third person.

Examples: Attendance at a city’s board or committee meeting, “staff briefings,” facility tours

**Develop a habit of asking yourself, “is this a meeting?”

**Circumvention: the Act may apply even when a quorum is not present.

What about social functions?

The Act does not apply if a quorum of the board convenes at a:

IF:

A Social Function; A Regional, State, or National Workshop (like this conference); or A candidate forum.

No action is taken on public business; and Any discussion of public business is incidental to the event.

Is this a Meeting?

Five-Member Board of Directors

Quorum = 3 Members

WSC Public Business

Is this a Meeting?

WSC Board Meeting

• Is there a quorum?

• Is there deliberation between board members?

• Are they discussing public business under the WSC’s control?

WSC Public Business

WSC Members

WSC Public Business

Is this a Meeting?

WSC Board Meeting

• Is there a quorum?

• Is there deliberation between a board member and another person?

• Are they discussing public business under the WSC’s control?

WSC Public Business

WSC Members

Is this a Meeting?

Staff Briefing Meeting

• Gathering conducted by the governing body or is the governing body responsible for the gathering?

• Is a quorum present?

• Are board members receiving information from a third party?

• Is the information concerning public business in the control of the board?

To: Board President, Board Members

From: General Manager

Subject: Staff Briefing Meeting

You will have your staff briefing meeting in the system offices an hour before our scheduled open meeting on Tuesday.

Is this a Meeting?

Church Social Hall: Christmas Party

• Is there a quorum?

• Is there deliberation between board members or between board members and another person?

• Is public business being discussed that is in the control of the board?

Is this a Meeting?

Board President’s Office

• Gathering conducted by the governing body or is the governing body responsible for the gathering?

• Is a quorum present?

• Are governing board members receiving information from a third party?

• Is the information concerning public business in the board’s control?

Email

To: Board President, Board Members

From: Office Manager

Subject: Meeting in Board President’s Office

WSC Public Business

You will have a meeting in the Board President’s office tomorrow to get information form the general manager on the latest development projects.

Is this a Meeting for the WSC?

Neighboring City Council Meeting

• Is there a quorum of the WSC Board?

• Is there deliberation by a WSC Board Member and another person?

• Is there discussion of public business under the WSC Board’s control?

City/WSC Public Business

ol?

City/WSC Public Business

Members of the Public, Including WSC Board Members

Notice Requirements

Districts Must Post Notice & Agenda on Their Website

87(R) HB3440 amended 551.056(b) to:

1. Require specified governmental bodies or economic development corporations to post a meeting agenda concurrently with the meeting notice on the entity’s website.

2. It also added “a district or authority created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution” as one of the specified governmental bodies subject to the provision.

All of the specified governmental bodies, regardless of population, must post both a meeting notice and a meeting agenda on their internet website. HB 3440 took effect on September 1, 2023.

Content of Notice

The Act requires written notice of the date, hour, place, and subject of each meeting –BOTH open meetings and executive sessions.

Specificity: The notice must be sufficient to appraise the general public of the subject matter to be discussed. This is a fact-based standard.

Vague references to “personnel” or “new business/old business” are generally insufficient

“Public forum” or “public comment” is sufficient to notify the public that you will be allowing them to speak.

Rule of Thumb: The more important the issue is to the public, the more specific the notice should be.

Remember: actions taken in violation of the notice requirements are voidable.

Location of Notice

For Systems Serving in More than Four Counties:

Post physical notice at a place convenient to the public in the administrative office of the system;

Provide notice to the Secretary of State; AND

Do one of the following:

Provide notice to the county clerk of the county in which the administrative office of the system is located, OR

Post the notice on the system’s website.

Location of Notice-WSC

For

Systems Serving in Fewer than Four Counties:

Post physical notice at a place convenient to the public in the administrative office of the system; AND

Do one of the following:

Provide notice to the county clerk of each county in which the system is located, OR

Post the notice on the system’s website.

Notice Question #1

Your meeting is tonight, and you just realized your notice didn’t include an item the board intended to discuss. What can you do?

Answer

Either postpone the item for the next meeting or move your meeting date.

72 hours’ notice is required for every item you intend to discuss, unless it qualifies as an emergency.

Notice Question #2

The agenda states that the WSC’s board meeting will be held on Thursday, June 27. However, June 27 is actually a Sunday and the date was supposed to be June 24.

Can you change the date to June 24 without posting a corrected notice for 72 hours?

Answer

No.

The Open Meetings Act is literally construed and it contains no provisions for typos or mistakes in the posted notice.

Emergencies

A meeting may be held after only one hour’s notice if: There is an imminent threat to public health and safety; or In a reasonably unforeseeable situation.

Emergency notices must describe the nature of the emergency.

“We forgot to post an item” is NOT an emergency.

Rule of Thumb: If you knew about it or had reason to know about it at the time you posted the notice, it’s not “reasonably unforeseeable.”

Recordkeeping

Minutes & Recordings

Governmental bodies must prepare and keep minutes of meetings OR make a recording of each open meeting.

“Recording” means any tangible medium on which audio or a combination of audio and visual information is recorded, including tape, wire, disk, film, electronic storage drive, or other medium now existing or later developed.

Minutes must:

State the subject of each deliberation; and

Indicate each vote, order, decision, or other action taken.

A brief summary will suffice; a verbatim transcript is not required.

How long must you keep minutes or recordings?

Answer: FOREVER

Minutes/Recordings are public records and must be made available pursuant to a request

Records Retention Schedule –recommended though not required for WSCs; required for districts. Visit www.tsl.state.tx.us for more info.

Procedures & Requirements

A meeting may not be convened unless a quorum is present in the meeting room (even when holding a meeting using videoconference).

The Americans with Disabilities Act requires a meeting to be held in a room that is physically accessible to those with disabilities.

The public has a right to record the meeting by audio/video.

The board may adopt reasonable rules to maintain order in a meeting, including those relating to the location of recording equipment.

Procedure Question

Does the public have the right to speak during an open meeting?

Public Comment

Answer: YES. This is a relatively new right, added by the legislature in the 2019 session.

Governmental bodies may impose reasonable rules on the number, frequency, and length of presentations. It should not discriminate against certain speakers or types of speakers. Public must be allowed to speak before or during the board’s consideration of each agenda item (TRWA recommends one public comment period before all agenda items to improve meeting flow)

Public Comment

Board may only comment on items on the agenda. If member of the public brings up a topic not on the agenda, board may only recite a statement of fact or policy regarding that topic; can place on future agenda for further discussion. TRWA has a model public comment policy: https://www.trwa.org/page/LegalPoliciesFormsResources (look under “Legal Policies”)

Boards should adopt a public comment policy; otherwise, no limits on public participation

Procedures & Requirements –Executive Sessions

Requirements for Executive Session

A governmental body may hold a closed meeting only when a statute expressly authorizes it to do so.

To hold an executive session, the governmental body must: Have a quorum; Properly convene at an open meeting;

Announce at an open meeting that a closed meeting will be held;

Identify in the open meeting the section of the law that allows the closed meeting; and

Maintain a certified agenda (minutes) or recording of the closed meeting.

What is a “Certified Agenda?”

Just a special term for “Minutes of a Closed Meeting”

Even if staff takes minutes of open meetings, a board member (generally the secretary-treasurer) should write the certified agenda to the same specifications as regular meeting minutes: Must state the subject of each deliberation.

Must record any further action taken.

Can be a brief summary –a verbatim transcript is not required.

“Certified Agenda” Requirements

Must announce start and end time and date (whether written or recorded)

Keep for 2 years unless an action involving meeting is brought within that period.

NOTABLE DIFFERENCES FROM OPEN MEETING MINUTES: Certified agendas are for current board members’ eyes only and should only be disclosed subject to a court order. Not disclosable under PIA.

Executive Session May Only be Called for One of Six Reasons

1.Private Consultation with Legal Counsel to Receive Legal Advice. (Texas Gov. Code §551.071)

2.Real Property-Confidential deliberations regarding the purchase, exchange, lease, or value of real property. (Texas Gov. Code §551.072)

3.Personnel Matters-Confidential deliberations regarding a complaint against, the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer or employee. (Texas Gov. Code §551.074)

5.Economic Development Negotiations. (Texas Gov. Code §551.087)

4. Security-Discussions regarding deployment, implementation, of security personnel or devices; or a security audit. (Texas Gov. Code §551.076)

6.IT Security-Security assessments or deployments relating to information resources technology; network security information as described by Section 2059.055(b); or the deployment, implementation, of security personnel, critical infrastructure, or security devices. (Texas Gov. Code §551.089)

Common Executive Sessions

Deliberations Regarding Real Property

To deliberate the purchase, exchange, lease, or value of real property if doing so in an open meeting would have a detrimental effect during negotiations with a third party.

Personnel Matters

To deliberate the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of an officer or employee

To hear a complaint or charge against the officer or employee

Consultations with Attorney

To deliberate pending/contemplated litigation, settlement offers, etc.

General discussion of policy matters is not allowed in executive session just because your attorney is present.

Who may Attend a Closed Meeting?

Only board members have a right to attend a closed meeting.

However, the board my invite others if necessary to the matter under consideration (i.e. GM in a personnel issue).

Board may not admit a person whose presence is against the interests of the corporation that the closed meeting is designed to protect (i.e. opposing party when conferring with counsel).

Closed Session Question

Does an employee have a right to attend a closed meeting if the board is discussing the employee in that meeting?

Closed Session Question

Answer: No

BUT the employee may request that the deliberation be done in open session.

Penalties

Violations –Civil Penalties

An action taken in violation of the Act is voidable

Voidable actions may be redone at a later meeting, but that action is not given retroactive effect.

Civil actions

An interested person may bring a civil lawsuit to force compliance, enjoin officials from acting, or to void actions taken in an illegal meeting.

Individuals cannot assert claims for monetary damages for violations of the Act.

Violations –Criminal Penalties

Participating in a closed meeting with knowledge that a certified agenda or tape recording is not being made –Class C Misdemeanor.

Knowingly Disclosing a certified agenda or tape recording to a member of the public –Class B Misdemeanor.

Knowingly conspiring to circumvent the Act, or holding a closed meeting without authorization are each punishable by a fine of $100 -$500 and confinement in county jail for 1-6 months.

Resources

Texas Attorney General’s Open Meetings Act Handbook: Public Information Act Handbook 2024 (texasattorneygeneral.gov)

Texas Attorney General (877-673-6839)

TRWA Legal Resources Page: Legal Policies, Forms, and Resources -Texas Rural Water Association (trwa.org)

TRWA Legal Department

Maryalice.mckaughan@trwa.org

(512) 472-8591

Concurrent Sessions

Wednesday - March 27 | 3:00 p.m. - 4:00 p.m.

Technology as the Carrot for Recruiting the New Workforce

Chris Sosnowski, Waterly

221A Room | Track 1: Management

Master Meter Accounts & RV Parks Panel* (No slides)

Moderator: Mary Alice Boehm-McKaughan, TRWA; Speakers: Joel

Klumpp, TCEQ; Lisa Fuentes, PUC, & Celia Eaves, PUC

221B Room | Track 2: Operations

Navigating Easements, Right-of-Ways & Expansion*

Jordan A. Miller, Baker Moran Doggett Ma & Dobbs LLP

221C Room | Track 3: High Growth

Board Roundtables (No Slides)

Facilitators: William White, TRWA & Bruce Alexander, East Medina SUD

220 Room |Track 4: Board of Directors

* This session is approved for CLE credit.

Concurrent Sessions

Wednesday - March 27 | 3:00 p.m. - 4:00 p.m.

Technology as the Carrot for Recruiting the New Workforce

Chris Sosnowski, Waterly 221A Room | Track 1: Management

Chris’s Background

• 25 Years in technology, SCADA, and Cyber Consulting & Integration

• Authored / Co-Authored over 50+ government technology plans that cover over 5 million people

• Volunteer Educator for water and wastewater for 20+ years

• Gear Head / Water & IT Nerd

• Waterly is my “heart project” to serve rural water.

I speak English, SCADA, Water, IT and Cybersecurity

Helping water & wastewater systems of all sizes implement an easy-to-use, standardized data management solution in days, not months, more affordably than any other solution on the market.

WE TAKE THIS MADNESS

AND GET UTILITIES TO THIS

SCADA

IIOT Partners Waterly’s

IN ABOUT A COUPLE OF WEEKS

5 Full-time Gen X

5 Full-time and 1 Part-time Millennial

2 Part-time Gen Z

2 Part-time Baby Boomers

About this Presentation

• It will be about

• How people and technology work together in rural

• What to do about generational differences

• How to Leave a Legacy

• How to pick good tech for Rural

This Presentation will NOT be About

• Human Resources Rules

• AI or ML

• Digital Twins

• Predictive Analytics

• Distribution, Collection System, or Treatment Modeling Technology

• IIoT gadgets

Today’s Hypothesis

“Tech can be helpful to recruit & retire well”

The Carrot: Utilities that smartly embrace technology…

1. Experience a better candidate pool

2. Ramp up new hires quicker

3. Allow retiring employees leave a legacy

1. Experience a better candidate pool

Millennials and Gen Z candidates

• Have no memory of life without Internet

• Would struggle to live without using their phone every 30 minutes

• Will use their phone anyhow

• Are used to immediate answers to questions (lack patience)

• Are (more) attracted to things in life with purpose (like water) than Gen X, Boomers, and Greatest Gen.

• Expect that you, their boss, care about being efficient (a positive of their impatience  they like to get things done efficiently)

Tech Tips for Millennials and Gen Z candidates

• Consider using social media (yes, public works) & keep it real

• Check your Google Rating and respond to negative comments

• Talk about your purpose…not just the job

• List tech that your department embraces

• Tell them you value technology and efficiency

2. Ramp New Hires Up Quicker

Ramp up new hires quicker

• They would rather look something up on their phone than ask you a question

• Simple Cloud apps enable new staff to “study” your system when they want to learn, not just when you are not there.

• Information is good for storing in computers. Wisdom is not.

• Your systems have patterns. You know them. You should graph them.

3. Unlocking a Legacy

Retirement is better when you leave a legacy

Help Retiring Staff to Leave a Legacy

• Senior Operators are great at “storing” wisdom

• Rural Water should ideally utilize a Mentor---Mentee Model

• Cross-generational communication is difficult enough

• Technology is a great tool to store information

We need information + wisdom to be transferred

Embrace tech to make new employees’ jobs easier

…because if the job is not enough fun, they’ll quit

BEFORE you retire, make sure trainees:

• Know where (most) everything is

• Know what (most) “normal” days looks like (water quality, operations)

• Know what to do without you on day-to-day stuff

• Know what to do when (most) non-normal things happen

Picking the Right Rural Tech (to recruit andget value from)

“Water tech should make our jobs easier and more reliable.”

Chris Sosnowski, CEO Waterly

The Cloud

Wise Cloud Tech Choices for Rural

Choose Right

• Engage younger staff to find & choose tech

• Find apps designed for Rural

• Ask Good Questions

• What % of your business serves communities my size

• What happens if (when) I don’t have Internet?

• Can I try tech support before I sign?

• How do I get a copy of all my data?

• How long does it normally take for an operator to learn the ways of your cloud wizardry?

Concurrent Sessions

Wednesday - March 27 | 3:00 p.m. - 4:00 p.m.

Navigating Easements, Right-of-Ways & Expansion* Jordan A. Miller, Baker Moran Doggett Ma & Dobbs LLP

221C Room | Track 3: High Growth

* This session is approved for CLE credit.

Baker Moran Doggett Ma & Dobbs LLP

• Eminent Domain

• Real Property Litigation

• General Civil Litigation

• Real Estate Transactions

• Corporate Transactions

• Appellate Law

Disclaimer

• The views, thoughts, and opinions expressed in this presentation belong solely to the author, and not necessarily to the author’s law firm or any organization, committee, or other group of which the author is a member.

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Basics

• Line Location

• Know where your lines are!

• Survey data

• Internal engineering records

• Property Records

• Why?

• Encroachments

• Relocations

• Efficient Operation & Maintenance

Basics

• Recordkeeping

• Get EVERY easement in writing

• A contract for the conveyance of real property must comply with the statute of frauds to be enforceable.

979 S.W.2d 831, 834.

• To comply with the statute of frauds, a contract must be in writing and signed by the person to be charged with the agreement.

TEX. BUS. & COM. CODE § 26.01(a); 48 S.W.3d 865, 875.

Basics

• Recordkeeping

• RECORD every easement

• Conveyance is void as to creditor or subsequent purchaser for value unless recorded. Tex. Prop. Code § 13.001(a).

• Unrecorded instrument only binding on party to instrument, party’s heirs, and subsequent purchase without value or with notice of instrument. § 13.001(b).

• Properly recorded instrument is notice to all persons of existence of instrument. § 13.002.

Basics

• Recordkeeping

• Good practices will avoid future issues

• Prevent claims of trespass

• Avoid suits to establish easement interest

• Written, recorded agreement ALWAYS better than relying on prescriptive easement (adverse possession), implied easement appurtenant (continuous use is reasonably necessary), and easement by estoppel (relied on inducement)

Acquisition

• Identifying Interestholders

• Every possible person with a claim to the property –owners, lienholders, lessees/tenants, easement-holders, etc.

• Owners

• Party owning fee simple title to property with authority to grant easement rights

• Lienholders

• Commonly overlooked interest-holder.

• If they foreclose on security interest that pre-dates your easement, your easement is wiped out.

• Depending on nature of interest, strongly consider subordinating lien to your easement with a Subordination Agreement or Partial Release of Lien.

Acquisition

• Identifying Interestholders

• Lessees/Tenants

• May have a possessory interest that needs to be addressed.

• Best to handle before papering up deal and paying compensation to owner.

• Easement-Holders

• Confirm at the outset that your encroaching facilities will not interfere with other existing infrastructure, and work out Joint Use Agreement, Encroachment Agreement, Letter of No Objection, etc.

• A suit for injunctive relief from an easement holder could significantly delay construction and increase costs unnecessarily.

Acquisition

• Access for Surveys

• Necessary to determine route, prepare easement description, etc.

• Relief sought is not grant of right to enter property, but order directing landowner not to interfere with that preexisting right –aka the status quo.

• Tex. Water Code §49.221.

• 11 S.W.3d 509, 514

• Property Description

• Generally, a land description in a writing is sufficient if it furnishes within itself, or by reference to some other existing writing, means, or data by which the particular land to be conveyed may be identified with reasonable certainty. 948 S.W.2d 328.

• A description that falls short of this requirements is void under the statute of frauds. 732 S.W.2d 390.

Acquisition

• Negotiations

• Engage in good faith negotiations with landowner, compromise where possible, but leave yourself enough time to condemn if necessary (approx. 75-90 days from initial offer to possession)

• Property

• Permanent Pipeline Easement

• Temporary Construction Easement

• Access Easement

• Exclusive Surface Site Easement

• Etc.

Acquisition

• Negotiations

• Terms

• Construction and Restoration

• Operation, Maintenance, Repair, Relocation, Removal

• Ingress & Egress

• Damages

• Indemnity & Insurance

• Assignment

• Abandonment

• Compensation

• Payment for Easement Areas

• Remainder Damages, if any

• Crop Damages

• Business Interruptions & Lost Profits

• Circuity of Travel

• Construction Inconvenience

Eminent Domain

• If Negotiations Fail -Condemn

• Make a bona fide offer (Tex. Prop. Code §21.0113)

• File a condemnation petition (§ 21.012)

• Obtain possession through the administrative process (§21.014, et seq.),

• Obtain a judgment for the rights condemned either on the amount awarded by the special commissioners (if no timely objections) or on judgment of the trial court after a jury verdict

Texas Eminent Domain Timeline

1 Day 0 or soonerCondemnor must provide bill of rights to landowner [21.0112(a)]

2 Day 0 or sooner Condemnor must give property owner all appraisals affecting owner’s property made in last 10 years (if any) [21.0111(a)]

Before or at same time as condemnor first represents it has eminent domain authority

At the time an offer to purchase or lease the property is made

3 Day 0 Condemnor must make written initial offer [21.0113(b)(1)] None

4 Day 23 or soonerCondemnor must send bill of rights to last-known address on tax roll [21.0112(a)]

Not later than 7th day before final offer

5 Day 29 or soonerCondemnor must obtain written appraisal by certified appraiser [21.0113(b)(4), (5) & (6)]Must have before making final offer

6 Day 30 or later Condemnor must make final written offer, accompanied by written appraisal, deed or easement, and bill of rights (unless furnished earlier) [21.0113(b)(2), (3) & (6)]

7 Day 44 or laterOwner’s deadline to accept final offer [21.0113(b)(7)]

8 Day 45 or laterCondemnor may file petition [21.012(a)]

On or after 30th day after condemnor makes written initial offer

14 days after final offer is made

After making bona fide offer (which means all the steps above) and being unable to agree

9 Day 45 or laterCondemnor must send copy of petition by certified mail to property owner [21.012(c)]Concurrently with filing

10 Day 45, but not later than Day 75 Commissioners appointed [21.014(a)]

11 Day 45, but not later than Day 85

Each party may strike one commissioner [21.014(a)]

12 Day 45 or laterNotice served on property owner of commissioners’ hearing [21.016(b)]

13 Day 75 or laterCommissioners Hearing [21.015(a)]

14 Day 75 or next working day File Award of Special Commissioners [21.048]

15 Day 75 or next working day Clerk sends notice of decision by certified or registered U.S. mail, return receipt requested [21.049]

16 Day 75 or laterDeposit amount awarded by special commissioners [21.021(a)]

17 Monday after 20 days from date Award served File objections, if any, to special commissioners’ award [21.018(a)]

Within 30 days of filing of petition

Later of 10 calendar days after appointment or 20 days after filing of petition

Not later than the 20th day before the hearing

Not earlier than the 20th day after the special commissioners were appointed. We add 10 days to account for typical strike period

On the day the decision is made, or the next working day

On the day the decision is made, or the next working day

None, but cannot take possession before

On or before the first Monday following the 20th day after the day the commissioners file their findings with the court

Eminent Domain

• Bona Fide Offer (Tex. Prop. Code §21.0113)

• (b)(1) –written initial offer with A. Texas Landowner’s Bill of Rights (“LBOR”)

B. Bold & larger print statement re remainder damages

C. Instrument of conveyance

D. Name & number of rep

• (b)(2)-(6) –written final offer made 30 days after IOL, with appraisal, instrument of conveyance, and LBOR, in an amount at least as much as appraisal, and allow 14 days for response

Eminent Domain

• Resolution Finding Public Need & Authorizing ED

• Governing body must make determination of public use and necessity by some affirmative action.

384 S.W.3d 766.

• Condemnation Petition (Tex. Prop. Code §21.012)

• (b)(1) –describe condemned property

• (b)(2) –state public use

• (b)(3) –state name of property owner

• (b)(4) –state unable to agree

• (b)(5) –state that LBOR was provided

• (b)(6) –state bona fide offer made

Eminent Domain

• Special Commissioners (Tex. Prop. Code §21.014)

• Three disinterested real property owners who reside in the county, and two similarly qualified alternates

• Shall swear to assess damages fairly, impartially, and according to the law

• Special Commissioners’ hearing

• Only issue is compensation, not right to take, routing, or any other issue

• Landowner is not required to attend, and in many cases does not

• Tex. Prop. Code §21.042 –shall assess damages according to evidence at hearing after estimating extent of injury and benefit peculiar to owner that related to ownership, use, or enjoyment of subject property.

Eminent Domain

• Adequate Compensation

• Section 17 of Article I of the Texas Constitution: “No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made . . . .”

• Measured by the fair market value of the land at the time of taking. 88 S.W.3d 623, 627.

• “Fair market value” means the price which the property would bring when it is offered for sale by one who desires to sell, but is not obligated to sell, and is bought by one who desires to buy, but is under no necessity of buying it, taking into account all of the uses to which it is reasonably and legally adaptable and for which it either is or in all reasonable probability will become available within the reasonable future. 837 S.W.2d 73, 77.

Eminent Domain

• Adequate Compensation

• After determining the fair market value of the land taken, diminution in value to the remainder of the land must be determined. 88 S.W.3d 623, 627.

• Difference between: (a) the market value of the landowner’s remaining property before the taking, and (b) the market value of the remainder after the taking, assuming the pipeline and easements were in place immediately after the date of taking and giving consideration to the uses to which the condemned part is to be subjected. 843 S.W.2d 448, 456.

Eminent Domain

• Adequate Compensation

• HIGHEST AND BEST USE

• REMAINDER DAMAGES

• Other Considerations

• Project Influence Rule. 487 S.W.3d 137, 142.

• Value to the Taker. 386 S.W.3d 256.

• Inadmissible Sales (i.e., w/ condemning authorities, not arms-length). 453 S.W.2d 461, 465.

• Community Damages. 146 S.W.3d 637, 647.

• Lost Business Profits. 722 S.W.2d 698, 698-99.

• Construction Inconveniences. 867 S.W.2d 769, 777.

• Impairment of Access. 704 S.W.2d 11, 13.

• Pipeline Corridors. 650 S.W.3d 483.

Relocating Facilities

• Reimbursement

• Texas authority is clear that an easement is an interest in land for which the owner is entitled to compensation as much so as if the land to which the easement is appurtenant were taken. 591 S.W.2d 798, 800; 282 S.W.3d 59, 62.

• “a utility forced to relocate from a public rightof-way must do so at its own expense.” 464 U.S. 30, 34; 160 Tex. 348

• “if a utility company acquires an easement over private land and is later asked to move its lines from the easement to accommodate road construction once the private land is annexed into a city, the city must reimburse the utility for its relocation costs under article I, section 17 of the Texas Constitution.” 263 S.W.3d 48, 67 .

Relocating Facilities

• Texas Transportation Code §203.092 -

(a) A utility shall make a relocation of a utility facility at the expense of this state if relocation of the utility facility is required by improvement of:

1) a highway in this state established by appropriate authority as part of the National System of Interstate and Defense Highways and the relocation is eligible for federal participation;

2) any segment of the state highway system and the utility has a compensable property interest in the land occupied by the facility to be relocated; or

3) a segment of the state highway system that was designated by the commission as a turnpike project or toll project before September 1, 2005.

Inverse Condemnation

• Not being rightfully reimbursed?

• Suit for inverse condemnation

• Definition: A cause of action brought by a landowner against a governmental entity to recover the value of property that has been, in fact, taken, even though the governmental agency did not formally exercise the power of eminent domain or initiate condemnation proceedings. 381 S.W.3d 468, 476.

• Elements: 354 S.W.3d 384, 390–91

1. a property owner must establish that

2. the government intentionally performed certain acts

3. that resulted in a taking, damaging or destroying of property

4. for a public use

5. without the property-owner’s consent.

Inverse Condemnation

• Remedies:

• Only remedy is monetary compensation. 354 S.W.3d 384, 390–92.

• A prevailing property owner does not regain use of property lost to inverse condemnation or win possession of it. Id. at 391.

• Attorneys’ fees are not recoverable in an inverse condemnation proceeding. 195 S.W.3d 238, 249.

• Statute of Limitations:

• Physical taking -10-year. Tex. Civ. Prac. & Rem. Code §16.026(a) (adverse possession); 466 S.W.3d 269, 279.

• Accrues when property taken.

• Damaged –2-year. Tex. Civ. Prac. & Rem. Code §16.003(a) (trespass or damage to land); 176 S.W.3d 680, 684.

• Accrues when damage occurs.

Paramount Public Purpose

• The paramount public purpose doctrine provides that a court must balance competing uses for a particular public property to determine which use best serves the public necessity.

• If the property sought to be condemned is already devoted to a public use, the property cannot be condemned if the practical effect would be to destroy the property's existing use, unless the condemning entity can show that its intended use is of “paramount importance to the public,” and it “cannot be practically accomplished in any other way.” 258 S.W.3d 613, 617.

Immunity from Condemnation?

• Hidalgo Co. Water Improvement

Dist. No. 3 v. Hidalgo Co. Irrigation

Dist. No. 1,669 S.W.3d 178 (Tex. 2023)

• Governmental immunity does not apply to eminent domain proceedings and a governmental entity is not immune from a condemnation suit brought by another entity with the power of eminent domain.

• The paramount-public-importance doctrine has long provided an adequate framework for balancing a condemnor’s legislatively granted condemnation authority with the condemnee’s ability to serve its own public purpose

Encroachments

• Ideally your easement agreements require written consent, or at least notice, before encroaching on easement.

• 811 –know where your lines are so you can accurately mark them

• Consider formalizing procedure

• Written guidelines publicly available

• Application process and fee

• Issuance of written permit/LONO/etc.

Encroachments

Encroachments

• Legal Options

• Injunctive Relief

• Ask Court to enjoin further encroachment and order removal of encroacher’s facilities

• Breach of Contract

• Make sure easement provision prohibits crossing easement without consent and/or interfering with District’s use/enjoyment of rights

• Entitled to monetary damages and attorney’s fees.

• Declaratory Relief

• Ask Court to determine rights of parties to agreement.

• Entitled to attorney’s fees.

Fiber Optic Line Requests

• Fiber companies, like many other encroachers, often ask for forgiveness, not permission.

• Private easements give you more control than installing in the public ROW subject to franchise agreements.

• Notice

• Written Consent

• Ability to Oversee/Inspect

• Diligently inspect ROW.

Abdicating Authority

• Malcomson Road Utility Dist. V. Newsom, 171 S.W.3d 257 (Tex. App.— Houston [1st Dist.] 2005, pet. denied)

• One way landowner can negate any reasonable basis for district’s determination that public necessity justified condemning property is to show that district had completely abdicated its responsibilities in determining whether, what, or how much land to condemn; in other words, landowner could show that district had declined to exercise discretion that the law required it to exercise. V.T.C.A., Water Code §49.222(a).

Pre-Funding Agreements

• Malcomson Road Utility Dist.

• Prefunding agreements are common and legal.

• Condemnation agreements signed by utility district and private developers, requiring developers to front all costs of district's condemnation of property for retention pond and drainage ditch expansion and providing that district would not have to reimburse the developers if the condemnation proceedings were unsuccessful for any reason, raised an inference that the district had abdicated its discretion to determine whether and how much to condemn, for purposes of determining whether district's determination of public necessity for the condemnation was arbitrary and capricious.

Hostile Takeover

• City of Blue Mound v. Southwest Water Co., 449 S.W.3d 678 (Tex. App.—Fort Worth 2014, no pet.)

• City was not authorized to condemn privately-owned water and wastewater utility system, which served city residents, as going concern, since general condemnation statutes did not grant eminent domain authority to city to condemn entire utility system; statutes authorized taking of property, statutes did not provide mechanism or method for compensating utility owner for value of going concern taken

General Session

Thursday - March 28 | 9:30-11:00 a.m.

Third General Session

Jason Vreeland of Trihydro and Gabe Cantu of Green Valley SUD

Learn how to confront the challenges rural water systems face in keeping their systems dynamic to protect against drought, high growth, and many other problems.

225 Room

Formed in 1963 -primarily agricultural customers

High growth changed from rural to suburban water supply

Currently serves over 17,000 water connections

 Trihydro and GVSUD working together since 2004

GREEN VALLEY SPECIAL UTILITY DISTRICT

CENTRAL TEXAS DROUGHT CONDITIONS

 Edwards Aquifer remains at Stage 2 after rising from Stage 3 earlier in 2023.35% reduction for stage 3.

 Canyon Lake is at Stage 2 conditions and is approximately 60% full. GBRA calls for a voluntary 10% reduction in water use.

 GVSUD averages a growth rate based on meters set of 5.8% for the past five years.

 The City of New Braunfels and Cibolo have experienced high growth rates for the past five years, with a substantial amount occurring in the ETJs.

AREA GROWTH RATES



 New Braunfels ETJ

GREEN VALLEY SPECIAL UTILITY DISTRICT

 New Braunfels ETJ experiencing rapid growth

 5,000 homes in construction or planned for area

 NBU and GVSUD CCN adjusted to better serve

 Older part of system

 Originally provided water from NBU during construction

 Groundwater provided from Green Valley Road EST

 Bypassed GST and directly filled EST

9

1

SERVE NEW GROWTH

The New Braunfels ETJ is experiencing rapid growth.Much of this growth is in the 830 pressure plane, with the rest in 897 pressure plane.

897 PRESSURE PLANE GOALS

2

PROVIDE REDUNDANT FEEDS

Much of this infrastructure is aging, so the need for multiple feeds and options to isolate lines becomes increasingly necessary.

3

ACCESS MULTIPLE WATER SOURCES

This area was traditionally served by water from the Edwards Aquifer. Restrictions have increased the need to diversify with water sources that are less restrictive.

4

FACILITATE CCN ADJUSTMENTS

The existing CCN boundary was not based on property lines, and growth has altered the most feasible way to serve the area.

NBU and GVSUD have worked together to adjust the CCN boundary.

PROPOSED 897 PRESSURE PLANE OPERATION

 Reverse the direction of existing infrastructure to bring surface water to GST

 Keep an option for supplying EST with groundwater

 Install spool pieces and valving to easily transfer infrastructure in CCN adjustment

 Initial system construction of wells, transmission line, BPS, and ESTs

 Serves portions of the Cibolo and Schertz area

 High growth in the ETJ

 Source of water was restricted to groundwater

 BPS that fills EST was vulnerable to low water availability during breaks and maintenance

2

PROVIDE NEW SOURCE TO PRESSURE PLANE

Additionally, growth in the Schertz area necessitatesusing as much as possible north of I35.This source was also inadequate to serve Cibolo in the future.

3

ESTABLISH NEW TAKE POINT

The current take point from the wholesale provider wasn’t adequately sized and was reduced in pressure. A new connection was needed prior to the reduction in pressure.

4

THE

Rapid expansion of the system required diversifying funding sources. GVSUD received a loan from the USDA, Rural Development to fund this project.

1008 PRESSURE PLANE CONSTRUCTION AND OPERATION

DROUGHT PROOFING THE SYSTEM

DIVERSIFY WATER SOURCES

SYSTEM MUST BE DYNAMIC

Setting up the system to adjust based on weather, maintenance, restrictions, or failures will ensure consistent service.

Reduce disruptions due to restrictions, system specific issues, or natural disasters.

USE EXISTING INFRASTRUCTURE

Repurposing existing infrastructure where possible can reduce unnecessary capital construction costs.

PROACTIVE MAINTENANCE PLAN

 Identify and track problem areas

 Reduce water loss

 Maintain a Master Plan and Capital Improvements Plan

 Fund the program

QUESTIONS

JASON VREELAND, PE Senior Engineer Trihydro Corporation jvreeland@trihydro.com

GABRIEL CANTU, CWP Manager, Development & Construction Green Valley Special Utility District gcantu@gvsud.org