Llano City council prioritizes water-quality projects amid budget squeeze

Speaker 3, a city staff member, told the council the hybrid health-insurance plan it asked staff to research "does not exist," and shifted immediately into budget priorities. The most urgent item on councilors' list was water quality: Speaker 6 said "the water quality is maybe the biggest item on here to tackle because we have people in the city that have brown water."

City staff said two projects from the capital improvement plan — the East Wallace and East Sandstone waterline replacements — were expanded to improve system looping. "Our initial projections from our engineer on both these projects were on the magnitude of 850,000," Speaker 3 said, noting staff and engineers recommend widening the original scope to gain greater system benefit.

Councilors debated how to pay. Staff reported the Council Restricted Fund (Fund 22) has a projected cash balance of about $700,000 and the General Fund year-end projection is roughly $667,000, before meeting the council's 25% reserve policy. Speaker 6 cautioned against relying on reserves as a long-term strategy: "If you have a strategy of using reserves, that's the bad strategy over the long term." He proposed validating the $800,000 figure and pursuing grants where possible.

Members discussed interim steps such as reintroducing hydrant-flushing and prioritizing which water segments to replace first if funding falls short. Speaker 7 urged a systematic hydrant-flushing program as a partial mitigation; Speaker 3 agreed it can help but cautioned that undersized, dead-end or deteriorated lines would not be solved by flushing alone.

Council also discussed leveraging a proposed $100,000 EDC allocation for infrastructure. Staff said the EDC funds are intended for infill and that any repurposing would require an EDC-approved project that meets the board's intent. Speaker 3 said staff is preparing grant applications and will present the Texas Water Development Board application items on the next Monday agenda.

Next steps: staff will return to council with validated engineer estimates, clearer grant prospects and refined budget scenarios ahead of the workshop the council scheduled for late July and the budget target at the second meeting in August.