Council members said a foundation grant (referenced at $7 million) could fund dam studies and possibly raising dam height or dredging; members cautioned such work could require firm-water contracts and regulatory review, so they asked for engineering evaluations first.

Multiple residents urged the council to prioritize drinking water projects and questioned the city's sampling methodology after reports of brown water and continued infrastructure problems; staff noted planned water projects and a pending state grant application.

Councilors at a Llano City budget workshop pressed to prioritize water-quality capital work after staff presented revised cost estimates and funding options, including reserves, grants and an EDC contribution; staff will return with refined numbers before the August budget deadline.

During review of the draft FY2026–27 operating budget, a council member said the $3.18 monthly water charge approved in December 2025 (originally dedicated to an LCRA firm water contract) is still being billed despite negotiations with LCRA halting; the speaker said the fee raised the monthly minimum from $47.85 to $51.03 and urged transparency before any additional rate increases.

City staff presented a preliminary FY 2026–27 budget showing an initial net surplus and proposed next steps including departmental presentations, a possible utility-rates workshop, and attention to capital needs (JLK roof, Robinson Park restrooms) and insurance renewals.

A consultant recommended an initial 9% wastewater rate increase; staff asked council to continue the discussion through the FY27 budget process and noted the utility may be underrecovered by 2027–28 without adjustment.

Parks Project representatives and councilmembers discussed scope, sites and financing for a new Llano community pool; staff and volunteers recommended a needs assessment, community engagement and exploring LEDC sales-tax revenue bonds as a funding option.

Staff reviewed the city’s water planning history, including a 2023 dam inspection and WAM modeling, and council directed staff to contact suggested stakeholders and return a plan for a stakeholder group and a dredging RFQ.