[1. Call to Order of the Edmond City Council Meeting.]
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I WOULD LIKE TO CALL OUR BUDGET WORKSHOP FOR FISCAL YEAR 25 26 TO DISCUSS WATER, WASTEWATER, ELECTRIC, AND SOLID WASTE TO ORDER.
[2. Presentation and Discussion of Fiscal Year 2025-26 Water and Wastewater Budgets.]
IS GONNA BE PRESENTATION AND DISCUSSION OF FISCAL YEAR 20 25, 26, WATER AND WASTEWATER BUDGETS.GOOD AFTERNOON, MAYOR AND COUNCIL AFTERNOON.
TALK ABOUT EVERYBODY'S FAVORITE SUBJECT TODAY, WATER WASTEWATER.
SO JUST A BRIEF OVERVIEW ON WHAT WATER RESOURCES DOES.
UM, WE'RE OVER WATER, THE WATER FUND AND WASTEWATER FUND.
UH, SO WATER PLANT BUDGET CONSISTS OF OPERATIONS, MAINTENANCE, LAB ADMINISTRATION, ENGINEERING, WATER WELLS, WATER, UH, TRANSFERS TO FIELD SERVICES FOR WATERLINE MAINTENANCE.
UH, WASTEWATER FUND IS THE, WE CALL IT THE WHARF.
IT'S THE WATER RESOURCE RECOVERY FACILITY.
UH, IT'S OPERATIONS, MAINTENANCE LABORATORY.
UM, SAME FUNCTIONS AS WASTEWATER, AND A LOT OF THOSE ARE COMBINED AND THEN TRANSFERRED TO FIELD SERVICES FOR WATER WASTEWATER.
UH, REAL QUICK ON THE REVENUE SOURCES.
SO WATER AND WASTEWATER RATES ARE THE SOLE FUNDING FOR WATER AND WASTEWATER, UM, RESERVES.
WE, UH, OR WATER AND WASTEWATER RESERVES.
SO, UH, WE HAVE TO HAVE A MINIMUM FOR OUR REVENUE BONDS.
AND THEN STATE REVOLVING FUND, UH, AND ALL OF OUR LOANS, UM, 90 DAYS OF EXPENSE ARE A MINIMUM.
AND THEN THE BALANCE IS USED FOR RATE STABILIZATION.
SO OUR POLICY AS OF LATE, HAS BEEN TO KEEP THE TWO AND 3% VARIETY OF INCREASES RATHER THAN HOLDING THEM OFF AND HAVING 10% OR 15% RATE INCREASES EVERY FIVE YEARS.
IT'S A LOT EASIER FOR A FAMILY TO ABSORB OVER TIME RATHER THAN A HIT ALL AT ONCE.
SO THAT, THAT'S THE PLAN MOVING FORWARD UNTIL I DIRECTED IT.
SO, UM, AS I SAID, REVENUE BONDS, UH, WE'VE DID SOME OF THOSE BACK IN 20 16, 20 17.
UM, SINCE THEN, THE STATE HAS CREATED A PROGRAM WHERE BASICALLY THEY ISSUE REVENUE BONDS ON OUR BEHALF.
IT'S A JUNIOR LIEN TO THE UTILITY, MUCH BETTER POSITION FOR US AS A CITY.
UM, SO WE UTILIZE THEIR PROGRAM WHEN NECESSARY.
AND THEN STATE REVOLVING FUND LOANS, UH, THEY'RE SUBSIDIZED INTEREST RATES THAT COME WITH A LOT OF STRINGS ATTACHED.
SO, UH, WE'LL USE, USE THOSE WHEN THEY MAKE SENSE AND WHEN THEY DON'T, WE WILL NOT.
UH, ALL OF OUR DEBT IS 30 YEAR TERMS TO ALLOW ANY GROWTH COMPONENT OF THE, UH, IMPROVEMENTS TO BE PAID FOR BY FUTURE CUSTOMERS SO THAT WE DON'T BURDEN OUR, UH, CURRENT CUSTOMERS WITH ALL THE COSTS NOW.
UH, AND THEN CASH FUNDING FOR REOCCURRING CAPITAL EXPENSES LIKE WATER AND SEWER LINE REPLACEMENTS, AND THEN LARGE EQUIPMENT REPLACEMENTS.
SO A SHOT OVERHEAD OF THE ONGOING WATER PLANT EXPANSION.
THE SECOND PHASE OF IT, UH, REVENUES FOR, UH, THIS YEAR, 48 MILLION VERSUS THE $41 MILLION BUDGETED.
WE'VE, AS YOU ALL KNOW, WE'VE BEEN IN ONGOING DROUGHT, UH, THAT IS THE PRIMARY, UH, CAUSE OF OUR INCREASED REVENUE.
SO IT'S GOOD FOR REVENUE, BUT, YOU KNOW, WE DON'T WANT TO STAY IN A DROUGHT EITHER.
SO, UM, WE'RE, WE'RE NOT GONNA START BUDGETING BASED ON DROUGHTS HAPPENING.
WE'RE GONNA LEVELIZE THAT OVER TIME.
UH, SO NEXT YEAR'S BUDGET IS PROPOSED AT $44 MILLION.
AND SO IT'S AN 8% DECREASE OVER THIS YEAR'S BUDGET, UH, FOR REVENUE.
BUT ALL THOSE THINGS LEVEL OUT OVER TIME.
SO, UH, NOVEMBER 1ST, 24, 25 AND 26, WE'VE GOT SCHEDULED 3% RATE INCREASES.
UH, WE'VE BUDGETED THIS COMING YEAR FOR A, UH, NEW RATE STUDY FOR THE, UH, WATER LAST PHASE OF THE WATER PLAN EXPANSION.
AND, UH, WITH, UH, TWO OF YOU THAT WILL BE HERE, WE WILL HAVE TO HAVE MORE DISCUSSIONS AS WE GET THE 90% COST ESTIMATE AND, UM, LOOK AT THE IMPACTS TO RATES AND JUST HAVE THAT WHOLE CONVERSATION.
WE, WE DON'T WANT ANY SURPRISES AND WE WANT TO HAVE THE PLAN IN PLACE BEFORE WE PUT THE PROJECT OUT TO BID.
AND, UH, YOU ALL BEING ON BOARD WITH THAT.
SO, UM, LIKE I SAID, LARGEST DRIVER FOR RATE INCREASES, UH, HAS AND WILL CONTINUE TO BE, UH, CAPITAL, UH, CAPITAL EXPENDITURES AND DEBT EXPENSE.
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ALLOWING FOR INCREMENTAL RATE INCREASES INSTEAD OF ONE, ONE TIME LARGE INCREASES.AND WE ALSO COLLECT CAPACITY FEES.
AND, AND THAT VARIES, UH, EACH YEAR BASED ON THE NUMBER OF BUILDING PERMITS.
SO NOT GONNA READ ALL THE EXPENSES TO YOU UNLESS YOU WANT ME TO.
UM, BUT, AND THIS IS IN THE AGENDA PACKET, UH, PERSONNEL COSTS.
SOME OF THE NOTABLE THINGS WERE MOVING, UH, OUR ENGINEERING POSITIONS THAT WERE IN ENGINEERING INTO WATER RESOURCES, DIRECT BUDGETING, UH, MAINLY THE, THE OPERATIONS OF THE UTILITY HAVE JUST BECOME MORE COMPLEX AND, UH, SIMILAR E ELECTRIC, WHO'S HAD THEIR ENGINEERS IN THE DEPARTMENT.
IT'S JUST SIMPLER AND MAKES MORE SENSE OVER TIME.
UH, COUPLE NOTABLE THINGS ON SUPPLIES AND SERVICES.
SO CHEMICAL COSTS, WE WERE SEEING REALLY LARGE INCREASES, 39% IN FISCAL YEAR 24, THAT'S ACTUALLY STABILIZED QUITE A BIT.
AND WE SHOULD COME IN UNDER WHAT WE HAD BUDGETED AND HAVE REDUCED THE BUDGET FOR NEXT YEAR BY ABOUT A HUNDRED THOUSAND.
UH, AND THEN OKLAHOMA CITY WATER, 17% INCREASE.
UM, AND THAT'S JUST FROM THE LAST FISCAL YEAR.
SO THEY WERE KIND ENOUGH TO DO A RATE STUDY AND THEN IMPLEMENT THOSE RATES.
AND, UM, THEY, THEY HAD 'EM SCHEDULED FOR JUNE OF EACH YEAR, AND THEN SUDDENLY IT CHANGED TO DECEMBER, AND THEN THEY INCREASED IT MORE THAN THEIR ORIGINAL INCREASE IS TIMES TWO, AND THEN DID IT TWICE IN A YEAR AND GOOD NIGHT.
SO, LONG STORY SHORT, THAT ENDS UP BEING 17% VERSUS THE 5% THAT WE THOUGHT WE WERE GETTING.
WHEN, WHEN ARE YOU GUESSTIMATING FOR INDEPENDENCE? SO ONCE, ONCE WE, ONCE WE KNOW WE'RE BIDDING THE WATER PLANT AND GET THAT BID OUT, I THINK THAT'S THE APPROPRIATE TIME TO HAVE A CONVERSATION BECAUSE, UM, THE PRICE OF THE NEXT PHASE OF THE WATER PLANT IS TREMENDOUS.
AND, UM, ONCE, ONCE WE UNDERTAKE THAT RATES ARE IN PLACE OR WHATEVER FUNDING MECHANISM WE'RE GONNA USE THAT, THAT'S WHEN I WOULD BE COMFORTABLE SAYING, HEY, WE KNOW WHAT THE DATE IS FOR THE WATER PLANT TO COME ONLINE.
THIS, THIS IS WHEN WE NEED TO DO IT.
OR, YOU KNOW, AS SOON AS POSSIBLE, WE DON'T WANT TO CUT IT OFF AND THEN END UP YEAH.
NEEDING THE WATER AND THEN NOT HAVE THE WATER PLANT.
UM, YOU KNOW, COMING ONLINE, I'LL JUST TELL YOU, IT WAS JUST A FEW WEEKS AGO, WE HAVE TO TAKE THE WATER PLANT COMPLETELY OFFLINE, UH, EACH MARCH, UM, MARCH OR APRIL.
SO IT'S GOTTA BE COMPLETELY OFFLINE SO THAT WE CAN CLEAN OUT LINES, DO MAINTENANCE, AND THAT'S FOR AT LEAST A WEEK.
AND THAT'S NOT GETTING BETTER.
IT'S, YOU KNOW, IT'S GETTING OLDER MM-HMM
AND, UH, SO IF WE DON'T HAVE A BACKUP SUPPLY, THEN WE CAN GET OURSELVES IN TROUBLE REALLY QUICK.
SO WE DON'T WANT TO DO ANYTHING THAT'S GONNA CAUSE NEGATIVE IMPACTS FOR OUR CUSTOMERS.
I'M JUST READY FOR THAT TO GO AWAY.
UH, YOU AND ME BOTH
UM, EXPENSES AND TRANSFERS FROM THE WATER FUND.
JUST A COUPLE NOTABLE EXPENSES.
UH, LOGAN COUNTY RURAL WATER DISTRICT ROYALTIES.
I SAID I WOULD PUT THIS IN HERE EVERY YEAR SINCE WE STARTED PAYING THEM.
UH, AS PART OF OUR SETTLEMENT AGREEMENT, WE HAVE BUDGETED CLOSE TO 300,000 I BELIEVE THIS, THIS FISCAL YEAR.
AND IT'S ACTUALLY ESTIMATED TO BE 211,000, SO QUITE A BIT LESS.
IT'S NOT, UH, AS IMPACTFUL AS WE THOUGHT IT WOULD BE.
AND, UH, WE INCREASE FOR NEXT YEAR AS GROWTH KEEPS HAPPENING.
BUT WE'LL KEEP REVISING THAT BUDGET NUMBER BACK.
AND THEN HOPEFULLY IN THE NEAR FUTURE WE'RE HAVING DISCUSSIONS WITH THEM AND CAN REDUCE THOSE FURTHER.
SO, UH, RIGHT OF WAY USE FEES, 3.8% OF OUR WATER SALES NUMBERS, UH, TRANSFERRED TO GENERAL FUND.
UM, I BELIEVE TWO THIRDS OF THAT'S POLICE AND FIRE.
THE REST IS GENERAL FUND, UM, ADMIN SUPPORT.
TWO AND A HALF MILLION, UH, PROPOSED FOR FISCAL YEAR 26.
AND THEN, UH, FOR THIS YEAR IS 2 MILLION.
UH, MOST OF THAT INCREASES FROM, UM, FUNDING THE GAP IN RESERVES SINCE WE'RE PAYING TWO YEARS AGO.
SO, UH, DEBT EXPENSE, UH, FOR FISCAL YEAR 26, 20 3 MILLION VERSUS 16 MILLION FOR THIS YEAR.
SO SEEING THAT DEBT LOAD GO UP AS WE TAKE THESE PROJECTS ON, AND, UM, IN THE FIVE YEAR BUDGET, WE DO HAVE THE PROPOSED DEBT FOR SOME VERSION OF THE WATER PLANT.
UM, IT'S NOT A REFINED NUMBER YET 'CAUSE WE'RE STILL WORKING ON THE
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COST.BUT THEN TRANSFERS TO FIELD SERVICES, WATER LINE MAINTENANCE, UM, KEITH CAN TALK ABOUT THAT ONE.
BUT, UH, BASICALLY, UH, WATERLINE REPAIRS, THE NUMBER ONE THING THAT WE HEAR ABOUT ON WATER IS LEAKS.
AND WE'RE PUTTING A LOT OF MONEY TOWARDS IT AND STILL TRYING TO CATCH UP.
BUT IT IS NOT UNIQUE TO EDMOND.
OKLAHOMA CITY'S GOT 800 PLUS, UH, LEAKS ONGOING AND MANY LARGER LEAKS.
SO IT, IT'S SOIL CONDITIONS, OLD WATER LINES.
UH, SOME OF OUR NEWER WATER LINES ARE FAILING AS FAST AS FASTER THAN THE OLD ONES.
UM, IT'S BECAUSE OF EITHER CORROSIVE SOILS.
UM, YOU KNOW, SOME OF THE PIPES THAT WERE PUT IN THAT WERE INEXPENSIVE PROBABLY SAVED SOMEBODY MONEY BACK IN THE SEVENTIES AND EIGHTIES.
BUT YOU KNOW WHAT, FOR WHATEVER THE REASON, UH, YOU KNOW, THERE'S JUST A LOT OF LEAKS OUT THERE.
SO WHAT IS THAT NUMBER NOW ISH? DO WE KNOW? NUMBER OF LAKES? ABOUT A HUNDRED.
THAT'S BETTER BECAUSE WE HAD THAT PERIOD WHERE WE WERE, SO WE'RE NOT HIRING, HUH? WE WERE OVER 200, WE WERE AT 200, 2 26 ISH OR SOMETHING AT THAT TIME.
SO WE WERE OVER 200 BACK TO ABOUT A HUNDRED.
AND HOPEFULLY WE'LL KEEP WHITTLING THAT NUMBER DOWN.
AND WE'RE USING CONTRACT HELP, OR WE WE'RE, WE HAVE 'EM SUSPENDED RIGHT NOW.
WE'RE CATCHING ALL INVOICES, BUT WE'RE USING THEM UP.
AND THEN WHEN IT GETS SUPER HOT AGAIN THIS SUMMER AND THE GROUND GETS HARD AND WE DIDN'T HAVE THE UPTICK IN THE WINTER LIKE WE EXPECTED, SO THAT WAS GOOD.
SO IT'S FAIRLY STABILIZED AND HOPEFULLY WE'LL GET CAUGHT UP AND DOWN TO ZERO.
SO, WELL, WELL, ZERO IS NOT A NUMBER.
I SHOULDN'T EVEN KNOW ABOUT THAT.
HOW ABOUT THAT? OH, THAT, THAT WOULD BE GREAT.
JUST OUTLINING 'EM AGAIN, DON'T WANT TO READ ALL THESE TO YOU.
UM, THEY'RE ALL ON OUR PROJECT WEBSITE, UM, THE CITY'S WEBSITE UNDER CURRENT ONGOING PROJECTS.
UM, SO $350 MILLION IN ONGOING PROJECTS.
AND THEN CURRENTLY IN DESIGN, I DIDN'T TOTAL THOSE UP 'CAUSE IT'S A LOT.
UM, MOST OF THOSE ARE ALREADY FUNDED THROUGH, UH, AN EXISTING FAP LOAN.
WE'RE WAITING ON EITHER EASEMENTS OR, UH, FINISHING DESIGN OR PERMITTING AND ON THE WATER WELLS.
UM, AND THEN FIVE YEAR OUTLOOK, THE LEAD SERVICE LINE INVENTORY AND REPLACEMENTS.
WE'VE GOT 10 YEARS TO REPLACE ALL THOSE.
WE'RE GONNA HAVE A DESIGN CONTRACT OR CONSULTING CONTRACT TO HELP US WITH THE, THE AMOUNT OF EFFORT IT TAKES TO ACTUALLY GO OUT AND IDENTIFY ALL OF THESE LINES.
UH, YOU KNOW, YOU'RE HEARING ABOUT THE LEAKS.
AND THEN OUR, OUR PEOPLE JUST DO NOT HAVE TIME FOR ALL THESE THINGS.
SO WE'RE GONNA TRY AND GET SOME, UH, CONSULTING SERVICES ON BOARD TO HELP US WITH THIS.
SO DO YOU HAVE AN INCREASE IN PERSONNEL IN YOUR BUDGET? OH YES.
UM, SO ON THE WATER SIDE, ONE WATER WELL OPERATOR POSITION, UM, OH, I'M SORRY.
I WASN'T LOOKING, I WAS LOOKING AT YOU.
WELL, AND CLEARLY I WAS NOT LOOKING AT MY OWN PRESENTATION.
SO, UM, PROPOSING TO ADD ONE WATER WELL OPERATOR, IT'S, UH, MOSTLY BECAUSE DEQ IS GETTING MORE STRINGENT ON OUR CHLORINE REQUIREMENTS MM-HMM
AND WE'VE GOTTA RUN CREWS SEVEN DAYS A WEEK TO KEEP UP WITH IT.
SO AGAIN, NOT GETTING LESS AND WE'RE PAYING OVERTIME, BUT AT SOME POINT WE'RE JUST BURNING PEOPLE OUT.
YOU KNOW, HAVING 'EM WORK SEVEN DAYS A WEEK OR MR. LAUGHING, WHAT DID YOU SAY? IT'S MORE ON YOUR WHAT REQUIREMENTS? CHLORINE.
SO ON, ON THE WATER WELLS IN THE PAST WE DIDN'T HAVE TO CHLORINATE THE WELLS BECAUSE WE COULD, IT WAS A BLENDED SYSTEM.
WELL, LAST FOUR OR FIVE YEARS, THEY'RE GETTING MORE AND MORE STRINGENT AND, UH, WITH REQUIRING CHLORINE BECAUSE WE'RE SURFACE WATER AND WELL WATER MIX.
SO NOT TO BORE YOU WITH ALL THE REGULATORY DETAILS, BUT, UM, WE DON'T HAVE ANY VIOLATIONS AND, YOU KNOW, I LIKE THE ARM WRESTLING WITH THEM, SO WE'LL, WE'LL MAKE IT A SLOW PHASED IN APPROACH AND, AND DO IT THE RIGHT WAY.
BUT WE ALWAYS KNOW THAT WE'RE, WE'VE GOT GOOD SAFE WATER OUT IN THE SYSTEM, UM, THAT WE'RE CONFIDENT IN, SO.
UM, AND WE WERE JUST OUT AT THE WASTEWATER WATER RESOURCE RECOVERY FACILITY WHARF.
UM, I CAN'T SAY WHARF IN THE MEETINGS 'CAUSE NOBODY KNOWS WHAT IT IS, BUT, UH,
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WASTEWATER REVENUE, 27 AND A HALF MILLION IS WHAT WE'RE PROJECTED NOW THIS YEAR, UH, VERSUS 26 AND A HALF MILLION BUDGETED.SO WE'RE MAKING MORE, UM, ON INTEREST INCOME, INTEREST INVESTMENT INCOME, UH, PRIMARILY BECAUSE WE HAVEN'T PAID THE CONTRACTOR AT THE WASTEWATER PLANT BECAUSE THEY ARE VERY SLOW GETTING DONE.
SO, UM, WE'RE HOLDING THEIR MONEY.
UM, BUDGET REVENUES FOR NEXT YEAR.
SO SLIGHTLY UP, BUT DOWN FROM OUR PROJECTED, SO DON'T WANNA DO THE BACK AND FORTH ON THAT.
BUT, UM, JUST BUDGETING TWO POINT A HALF PERCENT ROUGHLY IN INCREASE.
UM, AND THEN WE'VE GOT 2% SCHEDULE RATE INCREASES THE NEXT, UH, THREE YEARS ON THE WASTEWATER SIDE.
UM, AND AGAIN, THE NEW RATE STUDY IS BUDGETED FOR NEXT FISCAL YEAR.
WE'LL DO WATER AND WASTEWATER TO LOOK AT THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM AND, UM, AND THEN HAVE THAT CONVERSATION WITH, UH, PUBLIC WORKS COMMITTEE AND CITY COUNCIL AND PUBLIC WORKS AUTHORITY.
UM, AND THEN CAPACITY FEES, OBVIOUSLY, UH, LESS ON THE WASTEWATER SIDE, BUT, UH, STILL GENERATE A DECENT AMOUNT OF REVENUE, UH, EXPENSES, PERSONNEL COSTS PRIMARILY, UM, INCREASE BECAUSE WE'RE MOVING POSITIONS FROM ENGINEERING TO, UH, WATER RESOURCES.
AND THEN ADDING, UH, PROPOSING TO HAVE ONE POSITION FOR GENERAL MAINTENANCE IS WE'RE TAKING MORE AND MORE FACILITIES ONLINE.
I'M SURE YOU ALL COULD SEE THAT WE USED TO HAVE THIS SIMPLE, EASY PLANT TO MAINTAIN.
AND SO TRYING TO DIVVY UP THE RESPONSIBILITIES.
WE, WE DON'T WANT TO PAY OUR INSTRUMENTATION TECHS TO GO SWEEP BUILDINGS.
UM, I MEAN, I, I LIKE DOING IT AS MUCH AS THE NEXT PERSON, BUT IT'S PROBABLY NOT THE BEST USE OF RESOURCES, SO, NO.
UM, I REALLY THOUGHT YOU'D HAVE TO HIRE MORE PERSONNEL THIS YEAR THAN JUST THAT.
WE'RE, WE'RE SLOWLY BUILDING INTO IT.
WE, WE DON'T WANT TO GET INTO A POSITION OF OVERSTAFFING, SO WE'LL KEEP TAKING THIS PHASED IN APPROACH OVER TIME.
UM, YOU KNOW, WE WE'RE LOOKING AT A FEW, FEW MORE POSITIONS NEXT YEAR, BUT WE WANNA SEE THE IMPACTS AND THEN HOW WE'RE TRACKING AND GET GOOD AT WHAT WE DO BEFORE WE JUST THROW PEOPLE AT THE PROBLEM.
AND THEN WHEN YOU GET EVERYTHING DONE, STAFFING IT ALL, ESPECIALLY AT THE WATER PLANT.
WE'RE GETTING A GOOD HANDLE ON THE WASTEWATER SIDE, AND THAT'S WHERE WE'LL NEED POSITIONS PROBABLY NEXT FISCAL YEAR.
BUT, UM, WE WANT TO GET OUR ARMS AROUND WHAT'S HAPPENING AND THE CONTRACTOR'S STILL ON SITE.
WE'RE RESPONSIBLE FOR A LOT, SO, AND HIRE PEOPLE WHO ARE EDUCATED TO WORK IN THAT AREA.
YEAH, THEY, THAT'S, UH, IT'S, IT'S, THAT'S WHY WE'RE STARTING WITH THE GENERAL MAINTENANCE.
SO WE CAN BRING PEOPLE IN, YOU KNOW, BASICALLY WITH HIGH SCHOOL EDUCATION TO MM-HMM
JUST GET THEIR FOOT IN THE DOOR AND HOPEFULLY THEY'RE INTERESTED AND THEN THEY CAN MOVE UP AND IN, IN THE DEPARTMENT AND, UH, GET THE PASSION THAT SOME OF US HAVE FOR WATER WASTEWATER.
SO DO YOU GUYS PROVIDE EDUCATION THINGS? YEAH, WE, WE PAY FOR THEIR, THEIR TRAINING LICENSES MM-HMM
SO WE JUST NEED A GOOD ATTITUDE AND SOME WORK ETHIC AND WE CAN TEACH 'EM THE REST.
THAT I'M NOT, I'M SAYING THAT, BUT THAT'S NOT TEACHABLE.
UM, SUPPLIES AND SERVICES, JUST COUPLE NOTABLE THINGS.
SO SLEDGE HAULING DECREASED, UH, $400,000 FROM THE PRIOR YEAR, UH, WHICH DID SAVE US SOME MONEY.
UH, I SAY IT DECREASED, BUT THEN OUR, UM, COST RIGHT NOW WE'RE TAKING IT ALL THE LANDFILL, UM, THAT COST ACTUALLY INCREASED ON US.
SO, UM, LOTS, LOTS OF REASONS FOR THAT, BUT NOT, NOT GETTING BETTER.
UM, CHEMICAL COST DECREASED 80,000 AND WE'RE SPENDING ROUGHLY HALF OF THAT ON ELECTRICITY INSTEAD OF CHEMICALS.
SO THERE IS GOOD OFFSETTING, UH, COST ON THAT AND IT'S WORKING OUT MUCH BETTER THAN EVEN WE THOUGHT IT WOULD.
UM, AND THEN DEBT ISSUANCE COSTS, OBVIOUSLY WE'RE NOT ISSUING ANY DEBT.
UH, WE'VE GOT ENOUGH TO FUND THE NEXT COUPLE PROJECTS.
SO, UM, IF WE DO ISSUE ANY DEBT, THEN THAT WOULD CHANGE.
BUT, UH, EXPENSES TRANSFERS FROM WASTEWATER FUND, AGAIN, NOTING THE RIGHT OF WAY.
USE FEES, UH, GOING TO GENERAL FUND, UM, AND ADMIN SUPPORT INCREASING ROUGHLY THE SAME AMOUNT DUE TO, UM, THE FUNDING, THE RESERVE BALANCE FOR THE ADMIN SUPPORT.
AND THEN DEBT EXPENSE RISING A LITTLE BIT.
AND THAT'S TAKING ON SOME OF THE LARGER LINE PROJECTS.
UM, AND THEN TRANSFERS TO FIELD SERVICES.
SO ONGOING PROJECTS WE'RE GETTING.
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I MEAN, WE CUT THE RIBBON ON THE WHARF AND THAT, THAT WAS GOOD.NOW, YOU KNOW, THEY'RE POURING SOME CONCRETE, LAYING SOME SOD HERE IN THE NEXT WEEK, SO IT'S JUST ALL THE FINISHING TOUCHES AND THAT'S THE HARD PART.
SO, UM, A COUPLE OTHER ONGOING PROJECTS AND THEN MANY PROJECTS IN DESIGN AND THEN OTHERS THAT WE'LL HAVE TO TALK ABOUT OVER THE NEXT YEAR.
UH, A COUPLE OPPORTUNITIES, CHALLENGES, SO, UM, STRATEGIC PLANNING, LEAD SERVICE LINE INVENTORY AND REPLACEMENT FOR THE WATER FUND.
THAT, THAT'S, IT'S GONNA BE POTENTIALLY SOME SERIOUS MONEY AND WE WILL HAVE THAT CONVERSATION THAT ONCE WE GET OUR HEADS WRAPPED AROUND IT.
BUT THERE'S ABOUT 3,600 CONNECTIONS OUT THERE THAT ARE GONNA HAVE TO BE REPLACED.
AND THAT'S THE LINES WITH THEM.
SO COULD BE, COULD BE QUITE A TASK.
UM, AND THEN MAINTAINING EXISTING AND NEW INFRASTRUCTURE.
SO WE DON'T WANT TO PUT THE NEW INFRASTRUCTURE IN, THEN IMMEDIATELY START LETTING IT GO.
SO WE'LL BE MINDFUL AND, AND, UH, BUDGET APPROPRIATELY AND, AND PROJECT AHEAD SO THAT WE TAKE CARE OF THESE NEW ASSETS AND KEEP THEM AS NEW.
BUT ALSO KEEPING IMPORTANCE ON OUR 10-YEAR-OLD AND 15-YEAR-OLD ASSETS TO KEEP EVERYTHING IN GOOD CONDITION.
WE WE'RE NOT GONNA LET ANYTHING FALL APART.
AND IF, IF THERE'S SOMETHING NOT GOING RIGHT, THEN WE WILL BRING IT TO COUNCIL.
SO, UM, OPPORTUNITIES FOR REVENUE GENERATION ARE DECREASED COST, UH, WHOLESALE WATER SALES ON THE WATER SIDE.
SO, UH, LOGAN COUNTY'S ACTUALLY STARTED BUYING SOME WATER FROM US.
THEY'VE FIGURED OUT THEY'VE GOTTA PUT A PUMP STATION TO ACTUALLY GET IT OUT OF OUR SYSTEM.
SO THEY'RE WORKING ON THAT, THEY'RE BUYING SOME.
AND THEN OKLAHOMA CITY AND ARCADIA ALSO BUY FROM US, UH, CHALLENGES, INCREASED TRANSFERS TO OTHER CITY OPERATIONS.
UM, I'LL LEAVE THAT ONE THERE.
AND THEN NEW REGULATIONS, UM, THE FOREVER CHEMICALS, PFAS, UM, I'M SURE EVERYBODY'S HEARD OF THAT.
THEY JUST HIT US WITH A REQUIREMENT LAST WEEK TO START MONITORING THAT IN 26.
WE'VE STARTED MONITORING FROM ANOTHER EPA RULE TWO YEARS AGO.
AND SO WITH OUR NEW ACTIVATED CARBON PROCESS AT THE WATER PLANT, UM, WE'LL GIVE IT A GOOD TEST AS SOON AS IT STARTS UP, PROBABLY EARLY 26, ABOUT THE TIME WE START TESTING.
SO WE DIDN'T FIND ANYTHING REALLY HIGH, BUT THERE'S POTENTIAL FOR COMPLIANCE ISSUES, SO, AND THEY SET THE LIMITS SO LOW THAT, UH, THE INSTRUMENTATION FOR TESTING CAN BARELY DO IT.
SO I DON'T KNOW FOR WHAT THAT'S WORTH.
AND THEN INFLATION PRIMARILY WITH THE CONSTRUCTION COSTS, AND I SHOULD HAVE THROWN TARIFFS IN THERE 'CAUSE I DON'T KNOW, DEPENDING ON THE DAY WHICH, WHAT IT'LL BE A CHALLENGE TO BID, UM, PROJECTS IN GENERAL.
SO, UM, AND THEN A LOT OF THE SAME THINGS APPLY ON THE WASTEWATER FUND.
UH, WHOLESALE WA WASTEWATER AGREEMENTS AND SERVICE AREA.
THINK, UH, LOGAN COUNTY'S APPROACHED US AGAIN AND, YOU KNOW, THE, THAT'LL BE CONVERSATIONS TO HAVE AND GET MORE PEOPLE IN THE ROOM, UM, TO HAVE THOSE CONVERSATIONS ON, YOU KNOW, HOW WE PROTECT EDMOND SALES TAX BASE.
AND, UM, SO YOU KNOW, MORE TO COME ON THAT.
AND THEN, UM, SAME THING WITH REGULATIONS, UH, THE PFAS, UH, WHATEVER NEW THING THAT THEY THROW ON OUR PERMIT THAT WE DON'T KNOW.
UM, YOU KNOW, ALL THOSE THINGS ARE COMING UP PRETTY SOON.
I KNOW I WAS HITTING MY TARGET.
ANY QUESTIONS? THANK YOU, COUNSEL.
ANY QUESTIONS RIGHT NOW? NO, JUST AN OPPORTUNITY TO SAY, YOU KNOW, EVERYTHING IS WITHIN THE PLANNED RATE INCREASES, RIGHT? YOU CAN'T SAY THAT FREQUENTLY ENOUGH, I DON'T THINK.
THAT WAS A GOOD STATEMENT THERE.
THAT'S IN THE PLAN RATE INCREASES THAT YOUR PLANNING IS WORKING OUT.
UH, DID LIKE THE PART OF THE PRESENTATION WHERE YOU TALKED ABOUT THE RESERVE AND THE RATE WHILE WE HAVE THE RESERVES AND THE, FROM THE RATE STABILIZATION TO PART OF IT'S THE STATE REQUIREMENT.
UM, THEN ALSO, UH, YOU MENTIONED ABOUT THE SLUDGE AND I THOUGHT AT ONE TIME WE WERE PUTTING SLUDGE ON FIELD AND THINGS OF THAT NATURE, BUT OTHER ENVIRONMENTAL THINGS HAVE COME UP TO SAY, NOW WE SEND A SLUDGE TO THE, UH, LANDFILL AND I'M GLAD THAT WE ARE ALSO STILL HAVING CONVERSATIONS ABOUT THE WHOLESALE WATER RATES.
UM, BECAUSE THAT'S OPPORTUNITY OUT THERE FOR US TO HELP STABILIZE OUR
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RATES HERE IN THE CITY.ALSO PROVIDE A SERVICE THAT DOESN'T HURT OR HARM THE CITY OF EDMOND OR, OR ITS ANY OF ITS WATER USERS.
BUT IT GIVES US AN OPPORTUNITY TO GENERATE REVENUE, UH, AND HELP STABLE, KEEP OUR RATES AT A CERTAIN LEVEL.
IF WE CAN ABLE TO SELL, UM, WATER TO OTHER COMMUNITIES BECAUSE WE HAVE BEEN CONTACTED BY OTHER COMMUNITIES.
THEY, THEY'RE BEING CONTACTED BECAUSE SOME BUSINESS ORGANIZATION WANTS TO COME TO THEM, BUT THEY DON'T HAVE WATER.
OR WHO'S THE CLOSEST ONE TO 'EM WHO'S GONNA HAVE WATER? OH WAIT, THANK YOU
AND SO THAT'S WHY TO, TO ME, IT'S, IT'S IMPORTANT THAT WE CONTINUE TO HAVE THESE CONVERSATIONS.
I UNDERSTAND, UM, UM, PEOPLE'S, UH, CONCEPTION OR MISCONCEPTION OF, OF WHAT REVENUES WE MIGHT LOSE FROM SALES TAX, BUT THERE'S A GIVE AND TAKE THERE, UH, IN EVERYONE'S IN ANALYSIS FOR US TO GO FORWARD AND FOR US TO COMPETE IN THIS REGION.
I THINK HIGHLIGHTING, YOU KNOW, THE INVESTMENT THAT'S BEING MADE EVENTUALLY, THEN WE'LL LOSE THE EXPENSE OF 1,000,005 OR MORE AS IT CONTINUES TO GO UP WHEN WE'RE INDEPENDENT, RIGHT? CORRECT.
UM, SO LOOKING AT THE LONG TERM AND PLANNING WAY AHEAD.
AND THAT OKLAHOMA CITY WATER COST IS JUST FOR RESERVING.
IT'S NOT BUYING, AND THAT'S ONLY A MILLION GALLONS AND WE'RE BUILDING AN ADDITIONAL 20 MILLION GALLONS A DAY OF CAPACITY.
SO, WELL, AND YOU SAID THEY INCREASED TWICE LAST YEAR AND DOUBLED THE PERCENTAGE.
E EVERY CITY'S GONNA FACE REALITY.
I'VE SAID IT FOR A LONG TIME NOW, IT'S COMING MORE TRUE.
AND YOU'LL SEE IT MORE AND MORE.
UM, WE, WE DON'T HAVE A CHOICE.
WE CAN EITHER FACE IT AND TAKE RIGHT.
TAKE CARE OF IT, BUT BE IN BIG TROUBLE.
BUT IT'S, YOU KNOW, IT'S NOT FAIR TO KEEP PASSING IT TO THE NEXT PERSON EITHER.
[3. Presentation and Discussion of Fiscal Year 2025-26 Edmond Electric Budget. ]
NEXT WE'LL HAVE THE PRESENTATION AND DISCUSSION OF FISCAL YEAR 20 25, 26, EDMOND ELECTRIC BUDGET.GOOD AFTERNOON, MAYOR AND COUNCIL, I'M HERE TO TALK ABOUT YOUR SECOND FAVORITE TOPIC, WHICH IS EDMOND ELECTRIC.
SO FIRST OF ALL WITH REVENUES, WE'RE EXPECTING $116 MILLION WORTH OF REVENUES THIS YEAR.
UM, WE EXPECT A LITTLE BIT MORE IN RESIDENTIAL, UH, RETAIL SALES AND COMMERCIAL SALES THIS YEAR.
AS FAR AS FAR AS DOLLAR AMOUNTS GO, I'LL TALK ABOUT THAT IN A LITTLE BIT.
UM, WE, UH, ONE OF THE THINGS THAT YOU, IF YOU LOOK AT OUR BOTTOM LINE BUDGET, YOU'LL SEE THAT, UH, IT ACTUALLY SHOWS UP AS A NEGATIVE VALUE, UM, UM, AS FAR AS OUR, UH, REVENUE VERSUS, UH, EXPENSES.
BUT THAT'S BECAUSE WE HAVE BOND PROCEEDS FROM THIS YEAR THAT WERE BOOKED IN 2025.
SO WHAT WE WILL ACTUALLY TRANSFER MONEY IN, WE EXPECT TO USE $8.2 MILLION THIS NEXT YEAR FOR DIFFERENT PROJECTS THAT WE HAVE COMING UP.
SO IF YOU ACTUALLY LOOK AT OUR, OUR, OUR PACKAGE IN THE, IN YOUR SPREADSHEET, IT PROBABLY SHOWS US UP AS A NEGATIVE, BUT WE'LL BE USING BOND PROCEEDS FOR SOME OF THOSE PROJECTS.
I'LL DISCUSS THOSE A LITTLE BIT MORE IN A MINUTE.
UM, OUR EXPENSE SIDE, UM, TYPICALLY PRETTY TYPICAL FROM WHAT WE SEE, THERE'S A SLIGHT INCREASE IN PERSONAL SERVICES.
OUR BIG ONE IS ALWAYS WHOLESALE POWER, AND IT'S ABOUT 52% OF OUR TOTAL BUDGET.
SO IT IS A BIG DRIVER FOR OUR OVERALL BUDGET.
UM, NATURAL GAS PRICES ARE A BIG DRIVER OF THAT WHOLESALE RATE AS WELL.
SO WE EXPECT TO HAVE EXPENSES OF 116.8 MILLION.
UH, AS I MENTIONED, RETAIL SALES REVENUE, WE EXPECT THAT TO BE ABOUT $3 MILLION HIGHER THAN WHAT WAS PREVIOUSLY PREDICTED LAST YEAR.
I ACTUALLY UNDER PREDICTED A LITTLE BIT OF LAST YEAR, AND WE'RE GETTING TO A POINT WHERE WE'RE SEEING, UM, FOR YEARS WE WERE VERY FLAT ON, ON OUR REVENUE.
UM, EVEN THOUGH WE WERE SEEING AN INCREASE IN ROOFTOPS BECAUSE OF EFFICIENCY STANDARDS ON APPLIANCES AND LIGHT BULBS, WE WEREN'T SEEING ANY REAL INCREASE IN RETAIL SALES.
WE'RE SEEING AN INCREASE, ENOUGH INCREASE IN ROOFTOPS NOW THAT WE'RE STARTING TO SEE MORE SALES COME COMING IN.
SO WE, WE EXPECT A LITTLE BIT HIGHER, UH, RETAIL SALES REVENUE THIS UPCOMING YEAR.
PERSONNEL WE'RE ADDING 163 OR $164,000.
IT'S A RECLASS IN TWO NEW POSITIONS I'LL TALK ABOUT IN A MINUTE.
UM, HAVEN'T REALLY HAD ANY SIGNIFICANT CHANGES IN OUR MATERIAL AND SUPPLIES AND OTHER SERVICES AND CHARGES BUDGETS FOR THIS UPCOMING FISCAL YEAR.
CAPITAL OUTLAY IS A BIG CHANGE, AND THAT IS BECAUSE OF THE BOND FUNDED PROJECTS THAT WE HAVE GOING ON.
UM, WE HAVE, UM, THAT $8.2 MILLION AND WE HAD SOME
[00:30:01]
DECREASES IN SOME OF OUR LINE ITEMS UNDER CAPITAL OUTLAY.AND THEN OUR DEBT SERVICE, OF COURSE, SINCE WE DID ISSUE THAT $22 MILLION, WE HAVE OUR FIRST DEBT SERVICE PAYMENTS THIS YEAR.
THAT'S $1.6 MILLION, WHICH HAS NOT SHOWN UP IN OUR MR. FISHER.
MATERIALS AND SUPPLIES, NO SIGNIFICANT CHANGE.
WHAT'S SIGNIFICANT TO YOU? I MEAN, W WHAT ARE YOU, SURELY THINGS HAVE GONE UP.
UM, I MEAN, WE, PART OF WHAT WE'RE SEEING IS OF COURSE WITH DEVELOPMENT, THERE'S NOT AS MUCH DEVELOPMENT.
SO OUR MATERIAL COSTS ARE HIGHER, BUT WE'RE NOT BUYING AS MUCH.
SO IT'S KIND OF EVEN ITSELF OUT.
UH, I DO NOT ANTICIPATE ANY CHANGES TO OUR BASE RATES IN THE NEXT FIVE YEARS.
UM, UH, I DO WANNA REMIND EVERYONE THAT OUR FUEL COST ADJUSTMENT, WE LOOK AT THAT EVERY MONTH, AND THAT'S TO RECOVER PART OF THE COST ASSOCIATED WITH OUR WHOLESALE POWER COSTS.
AND AS I MENTIONED, THOSE ARE DRIVEN PRIMARY PRIMARILY BY NATURAL GAS.
I LOOK AT THOSE EVERY MONTH, MAKE A RECOMMENDATION TO THE FINANCE DIRECTOR AND, AND THEY, THEY ULTIMATELY APPROVE THAT RATE.
WE'VE KEPT IT PRETTY STEADY FOR THE LAST, I THINK, 12 MONTHS IT'S BEEN, UH, 0.15 CENTS.
UM, AND SO WE'VE, WE'VE KEPT IT FLAT.
WE TRY NOT TO MOVE THAT AROUND TOO MUCH.
SO OUR GOALS FOR THE NEXT YEAR, WE WANT TO CONTINUE OUR FEEDER AND SUBSTATION IMPROVEMENT PROJECTS.
WE'VE BEEN DOING QUITE A FEW OF THOSE OVER THE LAST FIVE TO 10 YEARS.
UM, WE WANT TO CONTINUE TO STRENGTHEN OUR FEEDERS FOR RELIABILITY PURPOSES AND ADDITIONAL CAPACITY.
UM, WE'RE GONNA START SOME OF OUR BOND FUNDED PROJECTS, MOST NOTABLY ARE GARBER AND MITCH SUBSTATIONS.
GARBER IS AT POST IN, IN EDMUND ROAD.
UH, IT'S RIGHT NOW THE PRIMARY FEED FOR THE WATER TREATMENT PLANT.
OUR MITCH SUBSTATION IS IN MITCH PARK.
IT WAS VERY FULLY LOADED LAST YEAR.
WE'RE DOING SOME IMPROVEMENTS THERE THAT SHOULD BE IN PLACE BEFORE SUMMER THIS YEAR.
UM, TO HELP ALLEVIATE SOME OF THE LOAD OFF OF THAT MID SUBSTATION, WE'RE GONNA ADD A NEW SUBSTATION AT COFFEE CREEK.
THERE'S SOME PROPERTY NEXT TO THE COFFEE CREEK SUBDIVISION.
UM, AND THEN OUR DOWNTOWN AREA WITH THE INFIELD PROJECTS, WE WANT TO BEEF UP THE DOWNTOWN AREA.
WE'RE TALKING ABOUT TWO MAINLINE DISTRIBUTION FEEDERS THROUGH THERE TO SERVE AS BACKBONES FOR A LONG, LONG, LONG, LONG, LONG TERM PROJECT.
10 TO 15 YEARS TO TRY TO REMOVE AS MUCH OF THE BACK LOT ALLEY OVERHEAD AS WE CAN.
UM, AND THEN THE LAST THING WE'RE LOOKING AT, WE'VE MADE A LOT OF INVESTMENTS IN OUR SMART METERING SYSTEM AND OUR SCADA SYSTEM, OUR SUPERVISORY CONTROL AND DATA ACQUISITION, WHICH LOOKS AT OUR SUBSTATIONS, UM, MADE A LOT OF, UH, UH, INVESTMENTS IN THAT IN THE LAST FEW YEARS.
AND ONE OF THE THINGS WE WANT TO DO IS THERE'S A LOT OF DATA ASSOCIATED WITH THAT THAT WE CAN HELP IMPROVE OUR DISTRIBUTION SYSTEM WITH.
AND SO WE'RE LOOKING AT OVER THE NEXT 10 YEAR WINDOW TO START ADDING POSITIONS, ENGINEERING POSITIONS AND TECHNICIAN POSITIONS, AND START TAKING ADVANTAGE OF THAT DATA.
AND I USE AN EXAMPLE, AND I USED IT EARLIER IN ONE OF OUR ORIENTATION MEETINGS, WAS WITH OUR WHOLESALE POWER COSTS IS OUR BIGGEST COST FACTOR THAT WE DEAL WITH.
IF WE CAN REDUCE THAT CAPACITY AND ENERGY COMPONENT BY 2%, 2% OFF OF WHAT WE ALREADY BUY FROM OMPA, THAT'S ABOUT 1.2 TO $1.5 MILLION A YEAR IN SAVINGS.
AND THAT'S PART OF OUR GOAL IN THE NEXT FIVE YEARS, IS TO ACCOMPLISH THAT, WE WANNA REDUCE THAT WHOLESALE POWER BILL.
AND THAT GOES BACK TO THE RATE PAYERS.
'CAUSE THAT'S JUST A PASS THROUGH THROUGH TO THE RATE PAYERS.
SO THAT IS ONE OF OUR BIG GOALS IS TO PRODUCE THAT OVERALL ENERGY BILL.
SO SOME OF THE CHALLENGES, OF COURSE, YOU'RE GONNA HEAR THIS PROBABLY FROM EVERY DEPARTMENT RECRUITING AND RETAINING STAFF.
UH, ENGINEERS ARE HIGHLY PRICED RIGHT NOW AND WE HAVE BEEN OUT ON THE MARKET FOR AN ENGINEER FOR QUITE A WHILE.
I MENTIONED OUR WHOLESALE POWER PRICES ARE OUR BIGGEST DRIVER.
NATURAL GAS PRICES ARE THE BIGGEST IMPACT ON THAT.
IF WE SEE A SPIKE IN NATURAL GAS PRICES, WE WILL SEE A SPIKE IN WHOLESALE POWER PRICES.
'CAUSE IT'S ALL DIRECTLY TIED TO THE SOUTHWEST POWER POOL WHOLESALE MARKET.
UM, I HAVE BEEN WATCHING THE TARIFFS CLOSELY.
I HAVE BEEN YO-YOING WITH EVERYONE ELSE ON TARIFFS BECAUSE ONE OF MY CONCERNS IS IF THERE'S TARIFFS ON STEEL AND ALUMINUM AND OTHER METALS, IT WILL DIRECTLY IMPACT OUR MATERIAL COSTS FOR TRANSFORMERS, CONDUCTORS, THINGS LIKE THAT.
UM, THAT'S THE REASON I ASKED THAT QUESTION A MINUTE AGO.
UH, YOU SAID THERE'D BE A, THERE'S NOT A SIGNIFICANT INCREASE.
WILL TERRACE BE THERE? WHO THE HELL KNOWS? BUT I MEAN, IF THEY ARE, I I DON'T, I I, I DID NOT BUDGET TO TO ACCOUNT FOR THOSE BECAUSE WHEN WE WERE DOING THE BUDGET, THEY WERE NOT EVEN ON THE TABLE YET.
SO IT'S, IT'S A, IT'S A GAMBLE.
I'VE BEEN WATCHING 'EM CLOSELY.
I'VE BEEN TRYING TO FIGURE OUT WHERE EXACTLY EVERYTHING HAPPENS TO BE TODAY, BUT IT MAY CHANGE TOMORROW,
[00:35:02]
SO IT CAN'T HAVE AN IMPACT ON US.I WILL TALK THAT WE DO HAVE RESERVE BALANCES FOR THOSE TYPE OF THINGS.
WE KEEP A RESERVE FOR CONTINGENCY FOR EMERGENCIES AND THINGS LIKE THAT, THAT IF THERE ARE PRICE INCREASES THAT WE DID NOT ACCOUNT FOR, WE CAN DIP INTO RESERVES TO COVER THOSE COSTS.
UM, MATERIAL LEAD TIMES ARE STILL A CONCERN FOR US.
UM, WE'RE STILL SEEING A LOT OF OUR THREE PHASE P MOUNT TRANSFORMERS BEING ABOUT TWO YEARS OUT.
UM, WE'VE BEEN AGGRESSIVE IN ORDERING TO KEEP AHEAD OF DEVELOPMENT, BUT IT IS A CONCERN.
UM, AND I I, IT'S PROBABLY THE SAME THING EVERY DEPARTMENT HAS IS JUST MATERIALS.
LEAD TIMES HAVE NOT REALLY IMPROVED OVER THE LAST COUPLE OF YEARS AND IT'S GONNA BE A LONG-TERM CONCERN FOR US.
I TALKED ABOUT A NEW POSITION.
WE'RE TALKING ABOUT THE SUBSTATION TECHNICIAN IN THIS NEXT BUDGET YEAR.
A RECLASSIFICATION OF ONE OF OUR SUBSTATION LINEMEN.
UM, AND THEN FINALLY A NEW DISTRIBUTION DESIGN TECH TO HELP WITH SOME OF THE DESIGN WORK FOR NEW DEVELOPMENTS, UH, IN FIELD, THINGS LIKE THAT, THAT WILL TAKE SOME OF THE WORKLOAD OFF OF OUR ENGINEERS SO THEY CAN START WORKING ON SOME OF THE, USING SOME OF THE A MI AND SCADA DATA TO ACTUALLY IMPROVE OUR SYSTEM.
SO WITH THAT, DOES ANYONE HAVE ANY QUESTIONS? I DON'T HAVE MUCH OF A QUESTION THAT I'VE GOT A SUGGESTION FOR YOU.
EDMOND ELECTRIC DOES A WONDERFUL JOB AND OUR CITIZENS ARE WELL SERVED.
UH, YOU'VE GOTTA HAVE A BUDGET THAT YOU, THAT ALLOWS YOU TO DO YOUR WORK.
AND SO IF YOU SEE IN THE NEXT 30 DAYS, SOMETHING'S HAYWIRE ON THESE TARIFFS, COME BACK AND SEE US.
'CAUSE YOU GOTTA ADJUST YOUR BUDGET, I WOULD THINK.
AND I'VE BEEN TALKING TO KATHY ABOUT THAT.
SO IT'S, IT'S, WE'VE ALREADY BEEN HAVING THAT DISCUSSION INTERNALLY.
THIS IS JUST A TINY THING, BUT ON THE PAGE THREE OF THE CHART, IT SAYS PERSONAL SERVICES INSTEAD OF PERSONNEL.
SO I JUST DIDN'T WANT ANYONE TO BE THAT MIGHT CONFUSED.
MIGHT HAVE BEEN A TYPING ERROR.
NOT A, NOT VERY DON'T, I DON'T TREAT PEOPLE TO BE CONFUSED.
IS IT? WONDER WHAT PERSONAL SERVICES ARE? NO, THAT'S PERSONNEL.
THANK YOU ALL VERY MUCH MR. FISHER.
I JUST, I DON'T HAVE A QUESTION.
ALSO, APPRECIATE THE WORK YOU ALL DO, UH, FOR EVEN THE FORETHOUGHT OF, I JUST REMEMBER WHEN I SEE THE TREE TRIMMERS OUT THERE CUTTING TREES BACK FROM POWER LINES, UH, TO HELP PRE PREVENT A DISASTER OR HOPEFULLY PREVENT OR MITIGATE A DISASTER FROM HAPPENING DURING OUR, ONE OF OUR INCLEMENT WEATHER DAYS.
UM, APPRECIATE THE FLEXIBILITY I THIS COUNCIL AND, AND THE NEXT COUNCIL COMING UP AND STAFF GONNA HAVE TO BE FLEXIBLE BECAUSE WE DON'T KNOW HOW OUR COSTS ARE GONNA BE AFFECTED BY ANYTHING THAT COMES OUT OF OUTTA WASHINGTON RIGHT NOW.
SO, APPRECIATE YOU, WHAT YOU'RE DOING.
UH, UH, KEEP UP THE GOOD WORK.
NEXT WE'RE GONNA HAVE THE PRESENT
[4. Presentation and Discussion of Fiscal Year 2025-26 Solid Waste Budget. ]
AND DISCUSSION OF FISCAL YEAR 20 25, 20 26.MR. STEWART, BEFORE YOU GET STARTED, I WANNA SAY SOMETHING TO YOU IN PUBLIC
YOU DIDN'T ASK MR. MAYOR, MAY I SAY SOMETHING TO HIM? YES.
AND YOU RESPONDED TO ME LATE FOUR OR FIVE O'CLOCK ON A SATURDAY AFTERNOON.
AND I WANT YOU TO KNOW SHE'S APPRECIATIVE.
THAT IS ABSOLUTELY THE DEFINITION OF PUBLIC SERVICE.
WHAT YOU DID ON THAT SATURDAY AFTERNOON, YOU HELPED HER AND I'VE SPOKEN TO HER SINCE AND I'M ON BEHALF OF HER AND MYSELF.
I CAN'T BELIEVE THE MAYOR LET HIM DO IT.
WELL, THAT'S WHY I HAD TO TRY TO REIGN HIM BACK IN
SO I'M KEITH STEWART, DIRECTOR OF PUBLIC WORKS, AND I JUST HAVE A FEW COMMENTS BEFORE I TURN THE PRESENTATION OVER TO BOBBY TO TALK ABOUT SOLID WASTE BUDGET.
UM, YOU KNOW, OUR SOLID WASTE MISSION IS TO PROVIDE THE BEST
[00:40:01]
SERVICE WE POSSIBLY CAN AT THE LOWEST COST THAT WE POSSIBLY CAN.IN ORDER TO DO THAT, WE HAVE TO HAVE A UTILITY.
IN ORDER TO FULFILL THAT MISSION, WE HAVE TO HAVE A UTILITY THAT'S SUSTAINABLE, NOT IN THE SHORT TERM, NOT ONLY IN THE SHORT TERM, BUT IN THE LONG TERM.
AND SO, UM, WE ARE, WE'RE GONNA BE LOOKING AT SOME THINGS TODAY.
WE HAVE A, A RATE STUDY PRESENTATION THAT WE'RE GONNA BE GOING OVER WITH YOU, UH, AFTER BOBBY GETS DONE.
BUT IN ORDER TO KIND OF UNDERSTAND WHERE WE ARE TODAY, I WOULD LIKE TO TAKE YOU BACK A FEW YEARS.
ACTUALLY, BACK TO 2013, UM, OUR SOLID WASTE UTILITY WAS FACING SOME FINANCIAL AND OPERATIONAL CHALLENGES AT THAT TIME.
UM, IN FACT, THE FIVE YEAR BUDGET AT THAT TIME WAS SHOWING NEGATIVE, UH, DEFICIT SPENDING FOR THE WHOLE FIVE YEAR CYCLE OF THAT BUDGET YEAR.
UM, WE WERE LOOKING AT A TOTAL OF $4 MILLION BEING DEFICIT IN THE SOLID WASTE UTILITY OVER THAT FIVE YEAR PERIOD.
AND WE HAD, YOU KNOW, MAYBE ENOUGH IN RESERVES TO COVER ONE, ONE AND A HALF YEARS OF THAT.
SO WE WERE IN, WE WERE IN PRETTY DIRE STRAITS AT THAT TIME.
UH, THE LEADERSHIP AT THAT TIME REACHED OUT TO BOBBY, WHO WAS, WE HAD JUST HIRED HIM AS OUR VEHICLE MAINTENANCE SUPERINTENDENT, BUT HE HAD SOME EXPERIENCE FROM THE PRIVATE SECTOR THAT KIND OF LEND HIM TO LOOKING AT THESE TYPES OF PROBLEMS AND KIND OF HELPING US COME UP WITH SOME STRATEGIES TO GET THROUGH IT.
AND SO BOBBY STEPPED IN, UM, HE TOOK A LOOK AT THE UTILITY, HE MADE SOME CHANGES.
WE HAD A SLIGHT INCREASE IN THE RESIDENTIAL RATE, WHICH IS THE LAST TIME WE'VE EVER HAD AN INCREASE IN THE RESIDENTIAL RATE.
AND THAT WAS BACK IN 2013 ISH.
UM, WE MADE SOME, A LITTLE BIT MORE SUBSTANTIAL INCREASES IN THE COMMERCIAL RATES.
UM, WE INTRODUCED SOME ROUTE OPTIMIZATION PROGRAMMING, WHICH INCLUDED GPS ON ALL OF OUR ROUTE TRUCKS.
UM, WE DID AWAY WITH THE ROLL OFF, UM, PART OF OUR BUSINESS.
IT WAS, IT WAS, WE WERE OPERATING IT AT A LOSS.
AND SO, UH, IT DIDN'T MAKE SENSE TO CONTINUE TO DO THAT.
HE MADE SOME OTHER OPERATIONAL CHANGES AND WE TURNED THOSE DEFICITS INTO SURPLUSES.
IN FACT, OVER THE NEXT 10 YEARS, WE BUILT AN $11 BILLION RESERVE FUND BASED ON SOME OF THOSE THINGS THAT WERE PUT INTO PLACE BACK THERE.
SO I JUST WANTED TO COMMEND BOBBY FOR HIS EFFORTS AND WHAT HE'S DONE OVER THE YEARS TO HELP OUR SOLID WASTE UTILITY TO GET TO WHERE IT IS TODAY.
NOW BECAUSE OF, UM, YOU KNOW, THE COVID RELATED SUPPLY CHAIN THINGS AND ALL THE INFLATION THAT WE'VE DEALT WITH OVER THE LAST SEVERAL YEARS, THOSE EFFORTS TO MAXIMIZE OUR EFFICIENCIES ARE KIND OF COMING TO FRUITION.
AND WE'RE, YOU KNOW, WE'RE, WE'RE GETTING BACK TO A PLACE WHERE WE'RE SEEING DEFICITS AND BOBBY WILL TALK ABOUT THOSE IN HIS BUDGET PRESENTATION.
BUT, UM, WE'RE JUST, WE'RE, WE'RE TO A PLACE WHERE, YOU KNOW, WE, WE'VE SEEN A WEAK ECONOMY AND IT'S TAKEN AN EFFECT ON OUR, ON OUR SOLID WASTE UTILITY.
AND THAT'S THE REASON THAT WE DECIDED TO DO A RATE STUDY.
AND, AND WE HIRED A CONSULTANT.
AND BOBBY, I'LL TALK ABOUT THAT AND HE'LL INTRODUCE OUR RATES, OUR CONSULTANT WHEN HE'S FINISHED WITH OUR, UM, SOLID WASTE PRESENTATION.
SO UNLESS YOU HAVE ANY QUESTIONS FOR ME, I'LL TURN IT OVER.
HELLO, BOBBY MASTERSON, ASSISTANT DIRECTOR OF PUBLIC WORKS.
UH, I GOT TOLD TO KEEP IT VERY BRIEF, SO WE WILL, UM, IS THIS GONNA WORK? THERE WE GO.
SO FEW BRIEF SLIDES HERE, TALK ABOUT THE REVENUES.
UH, FIRST FROM OUR FIVE DIVISIONS.
UH, RESIDENTIAL REVENUES PROJECTED AT 6.5 MILLION.
COMMERCIAL AT 3.3, RECYCLE 2.3 MILLION.
PLEASE REMEMBER THAT THOSE FUNDS COME IN.
THEY GO TO PAY THE CONTRACTS TO PROVIDE THE SERVICE ROLL OFF 18, 18,000.
THAT'S THROUGH INTERNAL FUNDS ONLY.
WE DON'T OFFER IT TO OUTSIDE SOURCES.
THOSE ARE INTERNAL CITY DEPARTMENTS THAT WE'RE PERFORMING ROLL LAW FOR.
ADMINISTRATIVE REVENUE 355,000, SO A TOTAL OF 12.5 MILLION.
UM, SO BASICALLY IF YOU LOOK AT IT VERY QUICKLY, HOLD ON JUST A SECOND, BOB, YOU'RE TALKING FASTER THAN I CAN READ.
OKAY, WHERE WOULD YOU LIKE ME TO GO BACK TO? LET'S GO FROM THERE.
OKAY, SO REVENUES OR EXPENSES? NO, NO, WE'RE GOOD.
SO IF YOU LOOK AT THE TOTAL BETWEEN BOTH, WE'RE IN A $19,000 DEFICIT FOR THIS YEAR, FOR FY 26.
OUR CURRENT SOLID WASTE RESERVE BALANCE IS A LITTLE OVER 11 MILLION.
WE'VE SEEN SHARP INCREASES IN THE COST OF METAL AND DUMPSTERS.
UH, TRASH TRUCKS HAVE GONE UP ALMOST 38% A THREE YEAR WINDOW.
SO WHAT WE USED TO PAY $360,000
[00:45:01]
FOR FOR A TRUCK IS NOW WELL OVER FOUR 20.UH, DELIVERY TIMES ARE EXTENDED UP TO NINE MONTHS ON THOSE TRUCKS.
A LOT OF THE VEHICLES AND THE EQUIPMENT WE'RE GOING TO BUY HAVE A CLAUSE IN THE CONTRACT THAT IF THE METAL PRICES CHANGE, THE PRICE THAT WE PROJECTED WILL CHANGE.
UH, AND THAT IS THE ONLY WAY THEY'LL ACCEPT A CONTRACT TO BUY THE EQUIPMENT.
SO THE INFLATION IN THIS INDUSTRY IS OUTPACING INFLATION IN THE REST OF THE INDUSTRIES.
YOU'LL SEE THAT TODAY IN, IN THE SLIDESHOW FOLLOWING US.
UH, AND WE'RE FEELING THAT EFFECT.
UM, OUR BASE RATE HASN'T CHANGED.
LIKE KEITH DISCUSSED, THE CHANGES THAT WE'VE MADE HAVE BEEN FOR CONTRACTUAL OBLIGATIONS, THE HOUSEHOLD HAZARDOUS WASTE CONTRACTS TO MEET THOSE DEMANDS TO MEET THE REPUBLIC VIA REPUBLIC RECYCLING DEMANDS.
BUT NOW WE'RE AT A POINT WHERE IF WE DON'T CHANGE OUR BASE RATES, WE'RE GOING TO CONTINUE TO OPERATE IN A DEFICIT AND IT'S NOT GOING TO GET BETTER.
UM, ONE OF THE KEY THINGS TO REMEMBER IS WE RUN CYCLES ON REPLACEMENT OF MATERIALS.
WE WILL BE RUNNING RECYCLES, UH, THE CYCLE TO REPLACE A LOT OF THE COMMERCIAL DUMPSTERS IN THE NEXT TWO YEARS.
AND SO THOSE EXPENSES WILL BE HIGHER THAN NORMAL.
AND THOSE PRICES HAVE GONE UP ABOUT 23%, UH, SINCE LAST JANUARY.
SO WE PUT OUT OUR, EXCUSE ME, PUT OUT AN RFP, UH, TO LOOK AT A RATE STUDY AND, AND, UH, IN AUGUST OF 2024, WE HAD FOUR PROPOSALS THAT WERE SUBMITTED.
UH, RALPH TEIS FINANCIAL CONSULTANTS WAS SELECTED.
UH, AND WE HAVE TERRY HERE TODAY TO DO THAT PRESENTATION FOR US.
[5. Presentation and Discussion of the Solid Waste Rates Study by Thierry Boveri with Raftelis Financial Consultants, Inc. ]
OF COUNCIL.HOW ARE Y'ALL DOING THIS AFTERNOON? CAN YOU HEAR ME? ALRIGHT, UH, FOR THE RECORD, MY NAME IS TERRY BORE.
I'M WITH RALPH TALLIS, AND I'M HERE TODAY TO PROVIDE A PRESENTATION ON THE SOLID WASTE RATE STUDY THAT, UH, WE RECENTLY PERFORMED.
UM, I THINK KEITH AND BOBBY DID A GREAT JOB OPENING THIS UP AND I MIGHT BE ABLE TO RUN THROUGH A FEW OF THESE SLIDES A LITTLE BIT QUICKER AS A RESULT OF THAT.
YEAH, THANK YOU FOR LETTING ME KNOW.
OKAY, SO I HAVE ABOUT A 25 SLIDE PRESENTATION AND IT'S BROKEN UP INTO THESE, UM, YOU KNOW, CATEGORIES.
WE'RE GONNA TALK A LITTLE BIT ABOUT THE SCOPE OF SERVICES, UH, OPERATIONS OVERVIEW JUST FOR, UH, EVERYONE'S KNOWLEDGE, UH, MEMBERS OF PUBLIC FOLLOWING ALONG POTENTIALLY, UH, THE MODEL, THE APPROACH OF THE DEVELOPMENT OF THIS STUDY, AS WELL AS OUR KEY FINDINGS, UH, SUB BENCHMARKING SURVEY RESULTS IN SOME, UH, SCENARIO ANALYSIS THAT WE'VE DONE IN NEXT STEPS.
SO WE PERFORMED A FINANCIAL DUE DILIGENCE.
UH, PRIOR TO STARTING THIS, UH, TO THE EVALUATION WORKING WITH STAFF, WE WERE PROVIDED A SIGNIFICANT AMOUNT OF DATA ABOUT, UH, AGREEMENTS, OPERATIONS, HISTORICAL FINANCIALS.
AND WE USE THAT INFORMATION TO DEVELOP A 10 YEAR, UH, FORWARD LOOKING FINANCIAL MODEL.
UM, IT AIDED US IN DETERMINING COST OF SERVICE FOR THE VARIOUS OPERATIONS.
AND TODAY WE'RE TALKING A LITTLE BIT MORE HIGH LEVEL ABOUT REVENUE SUFFICIENCY FOR THE ENTIRE, UH, SOLID WASTE ENTERPRISE FUND.
UH, OPERATIONS ARE PRIMARILY FOR RESIDENTIAL SERVICE AND, UH, COMMERCIAL COLLECTION.
UH, BUT AS YOU KNOW, UM, UH, MENTIONED, UH, WE'VE, YOU KNOW, PULLED BACK A LITTLE BIT ON SOME OF THOSE ROUTES.
AND YOU CAN SEE HERE WE HAVE A ONE, UH, TIME A WEEK, UH, GARBAGE COLLECTION, UH, UNLIMITED, UH, BULKY COLLECTION, WHICH IS A RELATIVE IN THE BENCHMARK, A VERY HIGH LEVEL OF SERVICE.
AND EVERY OTHER WEEK, UH, RECYCLING THAT'S CONTRACTED OUT TO REPUBLIC.
ALONG WITH, UH, TRANSFER STATION OPERATIONS ON A CONTRACT BASIS, UH, WE HAVE A ROUGHLY, UH, 53,750 RESIDENTIAL ACCOUNTS, UH, 1580 COMMERCIAL ACCOUNTS.
AND, UM, WE PROCESS AROUND 68,500 TONS ALTOGETHER.
UM, WITH MOST OF THAT BEING MSW GARBAGE AS IT'S KNOWN TO PROVIDE THAT SERVICE.
WE HAVE AROUND 10, UH, TRUCKS, UH, AUTOMATIC SIDE LOADERS, UH, RUNNING 50 ROUTES A WEEK WITH 15 EMPLOYEES, FOUR COMMERCIAL TRUCKS, 22 ROUTES WITH FIVE EMPLOYEES.
AND THE VEHICLES ARE LEASED FROM CENTRAL FLEET.
UH, SO MOST OF THE EQUIPMENT CAPITAL COSTS, UH, COME OR PAID BACK THROUGH THE OPERATING EXPENSES BUDGET.
THE GENERAL APPROACH AND METHODOLOGY FOR THIS STUDY WAS TO ENSURE THAT THE REVENUES THAT WE GENERATE ON THE ONE HAND, UH, FULLY RECOVER THE COST OF SERVICE, PRIMARILY INCLUDING OUR OPERATING COSTS, ENSURING OUR, UH, CENTRAL SERVICE TRANSFERS, UH, BACK TO THE GENERAL FUND FOR FLEET, OUR LEASE PAYMENTS, AND ALSO DEPOSITS TO RESERVES FOR, UM, UH, FISCAL SUSTAINABILITY.
AND WE'LL TALK A LITTLE BIT MORE ABOUT EACH ONE OF THOSE ELEMENTS IN THE COMING SLIDES.
SO THIS IS A REPRESENTATION OF A DASHBOARD FROM THE MODELS THAT WE USE,
[00:50:01]
COMMONLY WORKING WITH STAFF TO RUN DIFFERENT SCENARIOS.SO IT JUST GIVES YOU, UM, UH, SOME EXAMPLE OF, UM, YOU KNOW, THE EXCEL BASED TOOL THAT WE ACTUALLY USE IN THE PROCESS.
UM, I'M NOT GONNA SPEND TOO MUCH TIME HERE, BUT THIS JUST TALKS A LITTLE BIT ABOUT OUR PHILOSOPHY AND APPROACH TO DEVELOPING THE MODEL.
UH, WE TRY TO MAKE IT DYNAMIC SO WE CAN EVALUATE DIFFERENT OPTIONS, UH, SPEND ALL THE TIME YOU WANT, DON'T RUSH THROUGH THIS.
THIS IS, TAKE ALL THE TIME YOU NEED.
UH, SO IF, IF, IF YOU'D LIKE TO, I CAN JUST SAY THAT, YOU KNOW, WHEN WE DEVELOP THE FINANCIAL MODEL, WE WORK WITH STAFF TO ACCUMULATE A LOT OF DATA ON THE OPERATIONS AND WE TRY TO BUILD IT IN A DYNAMIC MANNER SUCH THAT AS WE CHANGE CERTAIN PARAMETERS OF OPERATIONS, WE CAN ASSESS WHAT THE EFFECTS TO COST ARE GONNA BE.
SO IF WE CHANGE THE NUMBER OF ROUTES, IF WE CHANGE THE NUMBER OF HOURS A DAY, UH, FOR COLLECTION OPERATIONS, OR WE LOOK AT CHANGES IN CONTRACTS OR, UH, EXPECTATIONS OVER TIME, LIKE I THINK BOBBY HAD MENTIONED, UH, THE PRETTY SIGNIFICANT COST INCREASE TO VEHICLES THAT WE'VE SEEN OVER THE LAST SEVERAL YEARS.
UM, THAT'S GONNA HAVE AN EFFECT WHEN, UH, WE GO OUT TO BUY NEW TRUCKS, THAT'S GONNA TRANSLATE INTO A HIGHER LEASE PAYMENT, UH, FROM THE ENTERPRISE FUND THAT'S GONNA NEED TO BE PAID.
AND SO WE'VE MADE ASSUMPTIONS TO REFLECT THOSE KNOWN CONDITIONS, UH, WITHIN THE FINANCIAL PROJECTIONS.
UM, I THINK EVERYBODY KNOWS THAT INFLATION HAS BEEN HIGH.
WE'VE ALL FELT IT AT A PERSONAL LEVEL.
I THINK THAT THE CHART ON THE LEFT SHOWS WHAT INFLATION HAS DONE SINCE 2015.
UM, THAT WAS, UH, I THINK NEAR ABOUT THE LAST TIME THE FEES WERE INCREASED MORE MATERIALLY.
I THINK IN 24 WE HAD AN INCREASE TO THE RECYCLING RATE TO, TO REFLECT THE INCREASES IN THE RECYCLING CONTRACT COSTS.
UM, BUT I THINK THE KEY POINT HERE IS IF YOU LOOK AT THE CHART ON THE LEFT, THAT'S A CUMULATIVE CHANGE IN THE CONSUMER PRICE INDEX SINCE 2015.
AND, UM, THERE IS A BLUE LINE THAT'S OVER TOP OF THAT GREEN LINE.
THE GREEN LINE BEING THE CPI, THAT BLUE LINE IS THE SUB-COMPONENT TO THE CONSUMER PRICE INDEX.
SO CONSUMER PRICE INDEX HAS A BASKET OF GOODS, LOOKS AT INFLATION, A VARIETY OF DIFFERENT THINGS FOR A TYPICAL HOUSEHOLD.
UH, ONE OF THOSE THINGS IS HOUSING COSTS.
IF YOU GO DOWN DEEPER IN THERE, YOU'LL FIND A SUB COMPONENT CALLED GARBAGE AND TRASH INDEX.
IT'S, UH, PAIRED WITH UTILITIES AND BASICALLY WE CAN SEE THAT THAT'S BEEN ACTUALLY HIGHER THAN OVERALL CPI.
IT'S JUST TO KIND OF POINT OUT THAT IN THE SOLID WASTE INDUSTRY, WE'VE SEEN GENERALLY HIGHER INFLATION THAN JUST WHAT THE TYPICAL CONSUMER MAY HAVE SEEN, UH, FROM INFLATION OVER THE YEARS.
AND IF WE WERE TO APPLY, UH, INDEXING TO THE RATE BACK FROM 2015, UH, JUST AS A NOVELTY, WE CAN SEE WHERE THAT FEE WOULD BE TODAY RELATIVE TO, UH, THE FEE AS IT STANDS TODAY.
UH, AND YOU CAN SEE THAT IT'S SUBSTANTIALLY HIGHER AND COULD BE ONE OF THE INDICATORS BEHIND, YOU KNOW, SOME OF WHAT, UH, WAS MENTIONED TODAY WITH THE BUDGET, WITH THE DEFICIENCY AND THE CONCERN OVER THAT GOING FORWARD.
SO PROBABLY THE, THE ABILITY TO MAINTAIN THOSE RATES IS, UH, REFLECTIVE A LITTLE BIT OF THE EFFICIENCY GAINS THAT WERE IMPLEMENTED, UH, THAT THE CITY WAS ABLE TO IMPLEMENT OVER THE LAST SEVERAL YEARS.
UH, BUT COST PRESSURES ARE THERE AND BASED ON OUR FINDINGS, WE, WE SEE A NEED TO RECOMMEND SOME INCREASES TO THE RATES, WHICH I'LL TOUCH ON MORE DETAIL IN THE NEXT FEW SLIDES.
UH, JUST TO KIND OF BASELINE IT, UH, WE START WITH OUR CUSTOMER STATISTICS AND SAY, DRIVE, UH, THE COST OF OUR OPERATIONS, HOW MANY CUSTOMERS WE HAVE TO COLLECT, AND HOW MUCH WASTE GENERATION WE, WE NEED TO PROCESS AND, AND PAY FOR.
AND WE'VE ASSUMED ABOUT A GROWTH RATE OF A LITTLE BIT LESS THAN 1% PER YEAR.
OUR OPERATING EXPENSES, UH, WERE BASED ON THE FY 25 OPERATING BUDGET.
WE EXAMINED FOUR YEARS OF HISTORICAL DATA.
UH, WE WORKED WITH STAFF TO ASSESS REASONABLE ASSUMPTIONS RELATED TO, UH, COST ESCALATIONS ON AVERAGE FOR THE COMPOSITE OF ALL THE COSTS WE'RE ABOUT THREE AND A HALF PERCENT GROWTH PER YEAR IN THE FORECAST.
UM, THAT'S, THAT'S PRETTY CONSERVATIVE, UH, RELATIVE TO OTHER INDICES, UM, THAT ARE, UH, OUT THERE.
AND WE THINK THAT IT'S A REASONABLE ASSUMPTION FOR PURPOSES OF THIS EVALUATION.
IT ALSO INCORPORATES SOME OF THE GROWTH THAT WE TALKED ABOUT BEFORE, UH, WITHIN THAT THREE AND A HALF PERCENT.
ALRIGHT, SO I THINK BOBBY HIT IT WHEN HE TALKED ABOUT THE BUDGET BEING ALMOST, UH, A LITTLE BIT OF A DEFICIT.
WHAT THAT, UH, TELLS US IS THAT OUR REVENUES ARE JUST THERE TO BARELY COVER OUR OPERATING COSTS.
SO IF WE WANT TO SET ASIDE FOR ANY OTHER PURPOSE OF THE SYSTEM, ANOTHER EXPENDITURE, WE REALLY DON'T HAVE REVENUES, UH, NECESSARY TO COVER THAT.
AND ONE OF THE THINGS, UM, THAT WE WERE CHARGED TO DO AS PART OF THIS EVALUATION, PROVIDE RECOMMENDATIONS FOR, UH, RESERVE BALANCES.
AND, UM, AS MENTIONED, THE RESERVE BALANCES ARE, ARE PRETTY HEALTHY, BUT WE TRY TO LOOK AT IT FROM THE PERSPECTIVE, UM, YOU
[00:55:01]
KNOW, WHAT THE SPECIFIC NEEDS MAY BE.AND THE GOVERNMENT FINANCE OFFICERS ASSOCIATION PROVIDES SOME GUIDANCE THERE IN TERMS OF MINIMUM, UH, RESERVE REQUIREMENTS.
UM, ONE OF THE THINGS THAT THEY SORT OF PRESCRIBE IS THAT, YOU KNOW, YOU WANT TO TRY TO IDENTIFY REAL PURPOSE, UH, FOR THE RESERVES.
UM, AND SO WHAT WE DID IS WE STARTED WITH OUR OPERATING RESERVES AND WE SAID, WELL, YOU KNOW, 90 TO 120 DAYS WE WANT TO BE CONSERVATIVE.
WE STARTED WITH 120 DAYS OF OPERATING EXPENSES.
WHAT THAT MEANS IS IF WE TAKE OUR OPERATING EXPENSES AND WE DIVIDE THAT ANNUALLY AND DIVIDE THAT BY 365 DAYS, UH, WE'RE TRYING TO TARGET 120 DAYS OF THAT ANNUAL OPERATING COST.
IN ADDITION TO THAT, WE WERE LOOKING AT, OKAY, WELL HOW DO WE COVER OUR EQUIPMENT AND VEHICLES? SO WE SAID, WELL, IT'S ALL THROUGH THE FLEET LEASE MOST OF OUR CAPITAL.
SO WE SHOULD PROBABLY JUST HOLD ON TO ABOUT ONE YEAR'S WORTH OF LEASE PAYMENTS TO KIND OF COVER THAT.
IF THERE'S AN UNEXPECTED INCREASE, LIKE WHAT WE'VE SEEN OVER THE LAST SEVERAL YEARS AND WE BAKED INTO HIGHER INFL INFLATION INTO THOSE OPERATING COSTS GOING FORWARD, I THINK ABOUT 8% PER YEAR IN THOSE FLEET PAYMENTS, UH, GOING UP OVER TIME.
SO WE HAVE A PRETTY HEALTHY ASSUMPTION THERE, UH, BASED ON DISCUSSIONS WITH STAFF.
UH, BUT WE THINK THAT MAINTAINING SOME RESERVE TO ACCOUNT FOR THE CAPITAL NEEDS OF THE SYSTEM MAY BE GOOD.
AND I THINK BOBBY MENTIONED TOO THE NEED FOR PURCHASING OTHER TYPES OF, UM, CONTAINERS AS THOSE EQUIPMENT CYCLES HAPPEN.
UH, SO THERE'S GONNA BE INCREASED NEEDS IN THOSE EXPENDITURES OVER THE NEXT FEW YEARS.
THE LAST ITEM, AND PROBABLY THE BIGGEST ONE THAT WE IDENTIFIED WAS, UH, TARGETED RESERVE FOR STORM DEBRIS.
UM, THIS IS A RESERVE TARGET THAT, YOU KNOW, I THINK MORE AND MORE FOLKS HAVE BEEN INTERESTED IN, UH, RECENTLY COMPLETED A STUDY WITH THE, UH, CITY OF OKLAHOMA CITY AND WE'VE IMPLEMENTED A RESERVE FOR THEM FOR THE STORM DEBRIS.
AND, UM, YOU KNOW, SO WHAT WE DID THERE, AND SIMILAR TO WHAT WE APPROACHED HERE WAS WE LOOKED AT THE 2019 STORM.
SINCE THAT THE ICE STORM, UH, PRODUCED SOME PRETTY SIGNIFICANT COSTS, ABOUT $10 MILLION IN COST MM-HMM
IF A STORM LIKE THAT WERE TO OCCUR AGAIN, THAT WOULD BASICALLY WIPE OUT THE FUND BALANCE.
SO WHAT WE'VE TRIED TO DO IN THE FINANCIAL PLAN IS TARGET BUILDING UP A RESERVE TO AT LEAST ONE YEAR, YOU KNOW, ONCE IN A EVENT LIKE THAT, OVER OUR FORECAST PERIOD, IF WE COMBINE ALL OF THESE RESERVE TARGETS, IT PROVIDES SORT OF A BENCHMARK TARGET FOR OUR FUND BALANCES.
AND WE'RE ABOUT $11 MILLION TODAY.
AND YOU CAN SEE THE TARGET IN 25 BEING CLOSER TO ABOUT 16, $17 MILLION.
SO A LITTLE BIT BELOW THESE TARGETS.
I WOULD SAY THESE ARE PRETTY CONSERVATIVE TARGETS.
UM, AND I THINK THAT YOU'RE, YOU KNOW, THE, THE DESIRE TO WANT TO BUILD THIS UP IS MORE OF A REPRESENTATION OF YOUR RISK TOLERANCE AND EVERY COMMUNITY'S RISK TOLERANCE IS GONNA BE UNIQUE AND DIFFERENT.
SO I WOULD ENCOURAGE EVERYONE TO THINK ABOUT WHAT EVERYONE'S COLLECTIVE RISK TOLERANCE IS RELATED ALL THIS.
AND, UM, WE CAN WORK TO DEVELOP A FINANCIAL PLAN TO ACHIEVE THESE IF, UH, WE SO CHOOSE.
UM, BUT, YOU KNOW, THESE ARE OUR RECOMMENDATIONS THAT WE'VE INCLUDED IN THE STUDY WORKING WITH STAFF AND PRESENTING TO YOU ALL HERE TODAY.
I HAVE A QUESTION ON THAT, SIR.
ON THE RISK TOLERANCE, UH, DID YOU ALL ALSO, IN YOUR EVALUATION, DID YOU TAKE INTO AN ACCOUNT WHEN WE DID HAVE, UH, OUR LAST SIGNIFICANT ICE STORM HERE MM-HMM
AND WE HAD, WE USED RESERVE BALANCES TO REMOVE THE, UH, DEBRIS AND WE, WE, ON THE BASIS THAT ALSO THAT WE WERE GONNA RECEIVE X PERCENT OF MONEY FEMA FUNDING MONEY BACK FROM FEMA.
AND WE DIDN'T, IT, IT, THERE WAS A PROCESS THAT WE HAD TO GO THROUGH BEFORE WE RECEIVED THE MONEY BACK AND IT WAS ONLY, IT WAS NOT A HUNDRED PERCENT BACK, IT WAS ONLY 80 SOMETHING PERCENT OR SOMETHING LIKE THAT.
IS THAT PART OF YOUR EVALUATION IN, IN LOOKING AT THE RISK TOLERANCE, THAT IF YOU, WE DO HAVE ANOTHER, UH, MAJOR EVENT THAT WE HAVE TO REMOVE THAT WITH THE RESERVES, IT'S ONLY GOING TO BE FOR SO MUCH THAT WE'RE GOING GET BACK AND IT'S GONNA AFFECT THE BUDGET IF, IF WHATEVER ORGANIZATION'S IN PLACE TO, TO HELP US IF, IF THERE IS ONE OR NOT, UM, IN THE FUTURE.
UH, IS THAT, IS THAT BEING TAKEN INTO ACCOUNT NOW? YEAH, LET ME, LET ME DESCRIBE QUICKLY HOW WE ACCOUNTED FOR THAT.
I WOULD SAY THAT WE HAVE A CONSERVATIVE ASSUMPTION HERE BECAUSE WE'RE BUILDING UP THE FUNDS CLOSE TO WHAT THAT COST WAS OF THAT TOTAL STORM, NOT TAKING TO CONSIDERATION ANY FEMUR REIMBURSEMENTS.
THE REASON WHY THAT'S IMPORTANT IS BECAUSE THERE'S GONNA BE SOME PERIOD OF TIME BEFORE YOU RECEIVE THE REIMBURSEMENT IF YOU ARE GONNA GET THE REV REIMBURSEMENT.
SO THERE'S SOME QUESTIONS AROUND NEXT TIME AROUND OR MAYBE THE TIME AFTER THAT.
WHAT KIND OF REIMBURSEMENTS MAY WE, MAY WE SEE, UH, FROM FEMA? I THINK THAT, UM, YOU KNOW, THE BEST
[01:00:01]
INSURANCE IS PROBABLY SELF-INSURANCE.UH, I HEARD BUFFET SAY THAT ONCE.
UM, I DON'T KNOW IF THAT'S NECESSARILY TRUE, BUT POINT IS, IS THAT WHAT WE WANT TO DO IS BUILD UP THE RESERVES, UM, SUCH THAT WE CAN COVER ONE STORM EVENT AND THEN IF FEMA DOES REIMBURSE IT, WE DON'T NEED TO RAISE RATES AS DRASTICALLY TO REPLENISH THOSE FUNDS IS THE POINT.
YOU, YOU KNOW, AND, AND THE OTHER KEY FACTOR ABOUT THIS PLAN AND, AND THESE TARGETS IS THAT THIS WILL PUT LESS PRESSURE ON THE GENERAL FUND SHOULD THIS WERE TO HAPPEN.
BECAUSE IF WE DIDN'T HAVE ENOUGH MONEY IN THE FUNDS, THEN IT FALL BACK TO THE GENERAL FUND, AND THAT COULD BE A PROBLEM, YOU KNOW, FINANCIALLY.
SO, UH, I THINK THOSE WERE SOME OF THE THINGS THAT WE DISCUSSED INTERNALLY WHEN WE WERE DEVELOPING THE PLAN.
UM, SO WHEN WE GO BACK TO OUR CASHFLOW PROJECTIONS, WE TALKED ABOUT OUR OPERATING EXPENSES BEING BASED ON THE 25 BUDGET.
WE ESCALATED THAT AT 3.5%, UH, PER YEAR.
AND THEN IF WE LAYER ON TOP OF THAT, THE, UH, TARGETED RESERVE TO KIND OF BUILD US, UH, TO THOSE FUNDS OVER TIME, YOU CAN SEE HOW MUCH MORE OUR EXPENDITURES, UM, YOU KNOW, REVENUE REQUIREMENTS, I SHOULD REALLY SHOULD CALL 'EM BECAUSE IT'S NOT NECESSARILY AN EXPENDITURE TODAY, BUT A DEPOSIT TO RESERVES FOR A FUTURE POTENTIAL EXPENDITURE.
UM, YOU CAN SEE HOW MUCH HIGHER THEY ARE, UH, TO TARGET.
AND THE GREEN LINE REPRESENTS WHERE OUR REVENUES ARE AT TODAY, BASICALLY, AND THE DIFFERENTIAL BETWEEN THE BARS AND THE REVENUE REPRESENTS OUR DEFICIENCY OR OUR FUNDING GAP IN EFFECT.
AND WITH INFLATION AND RISING COST TO OPERATIONS, I THINK, AS BOBBY MENTIONED, WE'RE GONNA HAVE A QUICKLY, UH, INCREASING DEFICIENCY.
SO, UM, GIVEN THAT WE LOOKED AT THREE DIFFERENT SCENARIOS AND WE COULD POTENTIALLY ENTERTAIN MORE, AND I KNOW THAT, UH, SOME OF THESE NUMBERS FOR MEMBERS IN THE AUDIENCE MIGHT NOT BE ABLE TO SEE THIS VERY WELL.
HOPEFULLY YOU ALL CAN SEE IT PRETTY WELL, UH, ON THE SCREEN.
BUT I'LL START WITH, UM, THE CHART AND THE NUMBERS ON THE LEFT HAND SIDE OF THE SCREEN, AND THEN I'LL MOVE TO THE RIGHT HAND SIDE.
SO ON THE LEFT HAND SIDE IS THE, UH, MONTHLY, UH, FEE THAT RESIDENTS WOULD PAY INCLUSIVE OF THE RECYCLING CHARGE.
AND YOU CAN SEE IF, IF WE DO NOTHING, WHAT THOSE BILL IMPACTS ARE, WHAT THE BILLS ARE OVER TIME.
AND THEN THE THREE LINES THAT ARE SHOWN REPRESENT THREE DIFFERENT SCENARIOS.
OPTION ONE, WHERE WE HAVE THE STEEPEST INCREASE REPRESENTS A FRONT LOADED OPTION.
SO THIS IS WHERE WE TRY TO RAISE OUR RATES IMMEDIATELY IN YEAR ONE TO RECOVER ALL OF THOSE FUNNIER REQUIREMENTS.
UH, OPTION NUMBER TWO, UH, WHICH IS THE LIGHTER GREEN AND, AND SORT OF THE MIDDLE OF THE ROAD OPTION BETWEEN THE THREE LINES.
YOU CAN SEE THAT WE GET THERE OVER ABOUT A TWO OR THREE YEAR, EXCUSE ME, A THREE YEAR SPREAD.
IT'S A LITTLE BIT MORE FRONT LOADED.
UM, THE TABLE AT THE BOTTOM UNDERNEATH THE GRAPH SHOWS YOU WHAT THE MONTHLY CHANGE IN THE BILL WOULD BE TO CUSTOMERS, UM, FOLLOWING THESE DIFFERENT OPTIONS.
AND THEN THE LAST ONE IS, IS SORT OF A FIVE YEAR, UH, PHASE OF THE PLAN.
WHAT YOU'LL NOTICE ON THE RIGHT HAND SIDE IS OUR PROJECTED RESERVE BALANCES, UH, IF WE, UH, TAKE NO ACTION OVER TIME, UM, THAT'S WHAT REPRESENTATIVE OF THE BAR.
AND THEN THE LINES ARE, IF WE IMPLEMENT ANY OF THE THREE OPTIONS, HOW CASH BALANCES, UH, WOULD FARE, AS WELL AS THE YELLOW LINE BEING THAT RESERVED TARGET THAT WE WERE TALKING ABOUT IN THE PRIOR SLIDES.
SO YOU CAN SEE UNDER THE FRONT LOADED OPTION, WE'D BE ABLE TO, UH, FULLY FUND THE RESERVE TARGETS, UH, BY SOMEWHERE, UH, IN FISCAL YEAR 27, UH, EXCUSE ME, SOMEWHERE IN FISCAL YEAR 28 AT THE OUTSET OF FISCAL YEAR 28.
UH, THE SECOND OPTION THAT WOULD OCCUR, YOU KNOW, TWO YEARS LATER ROUGHLY.
AND THEN THE, UH, THIRD OPTION WITH THE FIVE YEAR PHASE WOULD HAPPEN, YOU KNOW, RIGHT AT THE END OF THE FIVE YEAR PERIOD.
SO THE IDEA ABOUT THESE THREE DIFFERENT OPTIONS, AGAIN, KIND OF GET BACK TO YOUR RISK TOLERANCE IN TERMS OF HOW QUICKLY, YOU KNOW, WE WANT TO BUILD, UH, THOSE RESERVES.
UH, FOR THE PURPOSES THAT WE DESCRIBED, THIS IS A COMPARISON OF OTHER MUNICIPALITIES WITHIN THE REGION, AND IT SHOWS THE DARK, UM, UH, GREEN LINE AND WE WANTED TO JUST CALL OUT THAT, OR THE DARK GREEN BAR REPRESENTS EDMOND, AND THE BASE RATE IS SHOWN ALL THE WAY ON THE LEFT.
SO THAT'S EXCLUSIVE OF THE RECYCLING.
THE NEXT GREEN BAR SHOWS WHAT THE TOTAL FEE IS WITH THE RECYCLING CHARGES.
UM, WE'VE DONE SOME OF THAT JUST BECAUSE NOT EVERYONE ON THIS, UH, COMPARISON MAY HAVE THE, UH, RECYCLING, UH, COSTS IN THERE.
AND I JUST WANT TO PULL UP A, A TABLE REALLY QUICKLY SO I CAN SPEAK TO IT IF I COULD FIND IT AS
[01:05:01]
IT RELATES TO THE COMPARISON.SO MORE NEWCASTLE AND YUKON, UM, ARE ALL CELL SERVICE FOR RECYCLING.
SO THEY DON'T ACTUALLY OFFER CURBSIDE RECYCLING SERVICES WHEN YOU'RE COMPARING TO THE BENCHMARKING.
UM, SO THAT'S WHY WE ADDED IN THAT BAR, JUST SO YOU CAN KIND OF COMPARE TO THOSE THAT MAY NOT OFFER RECYCLING HOW THE CITY COMPARES, WHICH COMPARES VERY FAVORABLY.
THEN WHEN WE LOOK TO SOME OF THE OTHER FOLKS THAT DO PROVIDE RECYCLING, UM, AND, UM, MANY OF, MOST OF THEM PROVIDE IT ON AN EVERY OTHER WEEK BASIS, LIKE THE CITY HERE.
UH, THE ONLY ONES THAT PROVIDE IT ON, ON A ONCE A WEEK BASIS ARE MUSTANG STILLWATER IN TULSA BASED ON OUR SURVEY, UM, WHICH HAVE A HIGHER COST AS WELL.
AND THEN YOU'LL NOTICE TOO, IF WE GO WITH OPTION THREE, TWO, OR ONE WHERE THAT SEATS US RELATIVE TO EVERYONE ELSE IN THE COMPARISON.
BUT, YOU KNOW, ONE THING WE DO KNOW IS THAT THIS IS A STATIC COMPARISON, SO OTHER FOLKS ARE LIKELY GOING TO NEED TO RAISE RATES AS WELL BECAUSE OF THE PRESSURES THAT WE'VE SEEN IN THE INDUSTRY, THE COST TO PURCHASE VEHICLES.
UM, YOU KNOW, THE, THE ONE BRIGHT SPOT WAS TALKING ABOUT IT WITH BOBBY IS THAT FUEL COSTS SEEM TO BE COMING DOWN A LITTLE BIT, WHICH IS A POSITIVE.
UM, SO HOPEFULLY WE COULD SEE SOME MORE DEFLATIONARY PRESSURES IN OTHER AREAS IN THE ENERGY SECTOR MAYBE.
UM, BUT, YOU KNOW, TARIFFS, THINGS LIKE THAT, UH, COULD HAVE A PRETTY SIGNIFICANT IMPACT ON FURTHER RAISING THE PRICE OF VEHICLES, UH, POTENTIALLY.
SO, UM, THIS DEMONSTRATES THAT UNDER OPTIONS TWO AND THREE, WE STAY MUCH, UH, YOU KNOW, BASICALLY IN LINE WITH MANY OF THE OTHER COMPARABLES, UM, ON THIS, UH, SURVEY.
UM, THE LAST THING I'LL, I'LL JUST KIND OF MENTION AS IT RELATES TO LEVEL OF SERVICE, AND I MENTIONED KIND OF AT THE OUTSET OF THE PRESENTATION IS THE VERY HIGH LEVEL OF SERVICE BEING PROVIDED TO RESIDENTS FOR THE BULKY SERVICE, THE ON-CALL SERVICE, UH, BASICALLY UNLIMITED KIND OF ON-CALL SERVICE FOR BULKY.
UM, AND I BELIEVE THAT THE ONLY OTHER COMPARABLES THAT HAVE THAT ARE STILL WATER IN TULSA IN THIS COMPARISON.
SO, UM, MOST OTHER FOLKS HAVE A MORE LIMITED, UH, BULKY, UH, AT THE CURB COLLECTION TYPE SERVICE, UH, WHICH IS A GENERALLY A LOWER COST TO OPERATE THAN WHAT IT WOULD BE HERE.
UH, SO THE FINAL FEW SLIDES IS JUST TO TALK A LITTLE BIT ABOUT SOME SENSITIVITY THAT WE'VE EVALUATED AS IT RELATES TO THE, UH, CONTRACT OPERATIONS FOR THE TRANSFER STATION.
UM, THE TRANSFER STATION IS PRIVATELY OWNED AND OPERATED.
UH, THE CITY HAS ENTERED INTO AN AGREEMENT WITH ETS, THE OWNER OPERATOR OF THE TRANSFER STATION, UM, ORIGINALLY BACK IN 2007.
UH, THAT AGREEMENT WAS, UM, YOU KNOW, UH, RE UH, UH, RESTATED IN, UH, 2017.
AND, UH, CURRENTLY WE'RE IN THE FIRST RENEWAL OF A MULTI-YEAR RENEWAL AGREEMENT.
EACH RENEWAL IS ABOUT A FIVE YEAR TERM.
UM, THE ORIGINAL TERM OF THE AGREEMENT, UH, WAS ABOUT 10 YEARS FROM UH, 2000, UH, SEVEN TO 2017.
AND THEN, UH, THAT RESTATED AGREEMENT EXTENDED THAT AGREEMENT ABOUT FIVE YEARS, AND NOW WE'RE INTO THE FIRST RENEWAL TERM OF THAT CONTRACT.
UH, BASED ON DISCUSSIONS WITH STAFF, WE LOOKED AT, UH, TWO ALTERNATIVES.
UM, THE, UM, ASSUMPTIONS, I THINK AS IT RELATES TO THE, UH, PAYOUT THAT WOULD BE REQUIRED UNDER THE AGREEMENT, AND IT'S INTENDED, YOU KNOW, PRESUMABLY TO MAKE THE CONTRACTOR WHOLE FOR THE TRANSFER STATION CAPITAL INVESTMENT.
UM, BUT IT'S CLOSE TO ABOUT AN $8 MILLION PAYMENT DEPENDING WHAT RENEWAL TERM IT WOULD OCCUR IN, UM, THAT A PAYMENT, UM, I THINK MIGHT BE A LITTLE BIT LOWER IN THE FIRST RENEWAL TERM THAN WHAT'S SHOWN THERE.
BUT, UM, NEVERTHELESS, IT'D BE A PRETTY SUBSTANTIAL PAYMENT THAT WOULD BE REQUIRED, UM, IF WE WERE TO, UH, NOT ENTER INTO ANOTHER RENEWAL, UH, FOR THE AGREEMENT, WE LOOKED AT WHAT THE COST WOULD BE IF WE WERE TO GO DIRECTLY TO THE LANDFILL, AND THEN WE TRIED TO ESTIMATE MAYBE WHAT THAT COST WOULD BE IF, UM, YOU KNOW, THE CITY WERE TO TRY TO TAKE OVER OPERATIONS OF THE TRANSFER STATION.
UM, ONE OF THE THINGS DISCUSSING WITH STAFF IS THAT, YOU KNOW, AND I, AND I THINK THE AGREEMENT HAS CHANGED A LITTLE BIT, UH, TO PROVIDE SOME ALLOWANCES THERE, YOU KNOW, FOR EXAMPLE, WITH DIVERSION ON RECYCLING.
BUT, UH, THERE'S STILL SOME LIMITATIONS OPERATIONALLY IF, YOU KNOW, THE CITY WOULD WANT TO DO MORE WITH, UM, DIVERSION, UH, RECYCLING, COMPOSTING, THINGS LIKE THAT.
AND I WOULD DEFER TO BOBBY TO SPEAK MORE ABOUT THE SPECIFICS OF THOSE, UM, LIMITATIONS.
BUT, UM, EFFECTIVELY, YOU KNOW, WE'VE SUMMARIZED, YOU KNOW, MAYBE ON THE LOW END AROUND, YOU KNOW, $500,000
[01:10:01]
OR SO IN SAVINGS PER YEAR, UH, DIRECT TO LANDFILL TO 917,000, AND I'VE GOT SOME CALCULATIONS TO STEP YOU THROUGH HOW WE ARRIVED AT THESE.AND, YOU KNOW, CERTAINLY WELCOME SCRUTINY OVER THE METHODOLOGY AND THE CALCULATIONS.
UM, THE SECOND ALTERNATIVE, AS I MENTIONED, IS TO LOOK AT THE, UH, TRANSFER STATION ACQUIRING IT, UM, WHICH WOULD ALSO REQUIRE THE, THE, THE PAYMENT OUT.
SO, UM, THE IDEA HERE IS WHEN WE LOOK AT THIS, UM, YOU KNOW, THIS WOULD KIND OF DEPLETE A, A BIG CHUNK OF RESERVES, AND HOW QUICKLY COULD YOU BUILD THAT RESERVE BACK UP FROM THE COST SAVINGS? AND THAT'S KIND OF HOW WE LOOK AT OUR PAYBACK PERIOD, YOU KNOW, AT $900,000 PER YEAR IF THAT PAYMENT, I THINK IS A LITTLE BIT LOWER THAN WHAT IT IS, YOU KNOW, WE'RE, WE'RE LOOKING AT, UM, YOU KNOW, MAYBE ABOUT EIGHT YEARS OR SO, NINE YEARS OR SO FOR A PAYBACK PERIOD ON, UH, THE COST SAVINGS.
BUT THE CONTRACT WILL CONTINUE.
AND IF THERE IS NO RENEWAL, UH, I THINK IT CONTINUES FOR PRETTY SIGNIFICANT.
I THINK THERE ARE THREE MORE RENEWALS, UH, SO ANOTHER 15 YEARS OR SO ON TOP OF THE CURRENT TERM.
AND, UM, YOU KNOW, UH, THERE'S GONNA BE A PAYMENT, UH, NO MATTER WHAT.
SO IT'S SORT OF A DECISION AS TO, YOU KNOW, WHETHER YOU WANT TO, UH, EXPLORE THESE OPTIONS IN MORE DETAIL.
UM, HERE'S OUR BREAKDOWN OF OUR CALCULATION.
WE, WE TRY TO LOOK AT, YOU KNOW, THOSE ROUTES EVERY, EVERY YEAR, ALL THOSE TRUCKS.
AND, UM, YOU KNOW, MAYBE ON AVERAGE THE TRUCKS OVER THE COURSE OF THE YEAR ARE RUNNING, UM, YOU KNOW, ABOUT 1.7 TIMES PER DAY, NOT ALWAYS TWO TIMES PER DAY EVERY DAY, BUT ON AVERAGE OVER THE COURSE OF THE YEAR, MAYBE A LITTLE BIT LESS.
AND SO WE ESTIMATE AROUND, UH, FOR THE, FOR THE RESIDENTS, ABOUT 4,400, UH, A LITTLE LESS THAN 4,400 TRIPS PER YEAR.
AND THEN ON THE COMMERCIAL SIDE, ABOUT 2200, WE ESTIMATED THE COST PER TRIP AT 156, LITTLE, ABOUT $157 FOR RESIDENTIAL, AND ABOUT 147 FOR COMMERCIAL.
THE MAJOR DIFFERENTIAL THERE IS THE COST OF VEHICLES FOR LESS EXPENSIVE FOR COMMERCIAL THAN AUTOMATIC SIDE LOADERS.
AND SO THAT REFLECTS LOWER DEPRECIATION COST BASICALLY IN THAT FEE.
WE'VE GOT MORE DETAILED, UH, BREAKDOWN OF THE, UH, COST PER TRIP, BUT WE LOOKED AT LABOR COSTS, WE LOOKED AT, UH, TIME ON THE ROAD.
UM, ONE OF THE THINGS THAT WE DIDN'T FACTOR IN ON THIS SIDE, MAYBE TWO THINGS THAT WE DIDN'T REALLY, UH, FACTOR IN ON THIS SIDE, IS, UM, THE POTENTIAL COST SAVINGS, UH, THAT THE DEPARTMENT WOULD SAVE FROM NOT HAVING TO RUN THE TRUCKS ON THE HIGHWAY EMPTY TO MAINTAIN, UM, PROPER FUNCTIONING OF THE AIR POLLUTION CONTROL SYSTEMS ON THE VEHICLES.
YOU GOTTA GET THEM UP TO SPEED AS I'M UNDER MADE TO UNDERSTAND.
AND SO THEY HAVE TO RUN THEM, YOU KNOW, UH, DURING THE DAY.
WE, THERE'S ALSO, UH, UM, ABOUT MAYBE $24,000 A YEAR IN REVENUE THAT WE GET FROM AN OFFSET PAYMENT FROM THE, FROM ETS, UH, FOR ABOUT 15% OF THE COMMERCIAL TONS AND, AND OTHER WASTE THAT ARE COMING THROUGH THE FACILITY.
UH, THAT WASN'T REALLY, UH, FACTORED INTO, UH, THE COST COMPARISON.
UM, I'M NOT SURE IF THEY NECESSARILY LIKE OFFSET ONE ANOTHER, BUT, YOU KNOW, ORDER OF MAGNITUDE NUMBERS.
WE THINK THAT WE'VE GOT A, A PRETTY REASONABLE, UH, ANALYSIS HERE.
AND, AND THIS REPRESENTS THE LOW END, UH, COST SAVINGS THAT WE'VE IDENTIFIED UNDER, UM, THESE ASSUMPTIONS, UH, SINCE IT, YOU KNOW, ASSUMES THAT MAYBE WE'RE NOT RUNNING THE TRUCKS AT A HIGHER, UH, TONNAGE.
UM, AND THAT COSTS, UH, ABOUT 43, UH, DOLLARS, UH, YOU KNOW, 47 CENTS A TON, UH, TO JUST TAKE IT DIRECTLY.
IF WE LOOK AT THE HIGHER END COST SAVINGS, THIS IS JUST MORE OF A SIMPLE, YOU KNOW, UH, PER TRIP.
IF WE TAKE THAT, UM, HAULING COST AT $156 AND WE ASSUME MAX OF 15 TONS, YOU KNOW, THE COST PER TON IS AROUND $10 AND 46 CENTS.
AND THEN WE ASSUME DISPOSAL COSTS AT THE LANDFILL AT 2020 $7 AND 30 CENTS, YOU CAN SEE THE TOTAL COST PER TON, UM, TO GO DIRECTLY TO THE LANDFILL, ASSUMING, YOU KNOW, MAXIMUM EFFICIENCY OF, OF, OF THE OPERATION, YOU COULD ARGUE.
AND THAT WOULD BE AROUND, YOU KNOW, $917,000 IN SAVINGS ROUGHLY, UH, BASED ON THESE CALCULATIONS.
UH, THE, THE LAST, UH, ONE WE LOOKED AT IS IF WE, YOU KNOW, WERE TO EVALUATE A CITY OPERATION OF THE TRANSFER STATION, AND, UM, THERE, UH, WE ESTIMATED A COST OF ABOUT $16 PER TON, UH, FOR THE FACILITY.
UM, IT'S DIFFICULT TO KNOW WHAT IT'S REALLY GONNA COST, UH, FOR, FOR THE CITY AND FOR STAFF TO, TO REALLY OPERATE IT.
SO THAT NUMBER NEEDS TO PROBABLY BE STUDIED MORE.
UM, BUT, UH, I BELIEVE CURRENTLY WASTE MANAGEMENT CONTRACTS OUT WITH ET S TO OPERATE IT.
[01:15:01]
KNOW, PRESUMING THAT THE CITY MIGHT BE ABLE TO ENTER INTO, UM, TERMS THAT MIGHT BE FAVORABLE OR COMPARABLE, WE DON'T NECESSARILY KNOW IF IT'D BE EXACTLY COMPARABLE TO THIS RATE.BUT, UM, YOU KNOW, THAT'S SOMETHING THAT TO POTENTIALLY EXPLORE FURTHER IF THIS WAS A SERIOUS CONSIDERATION, AND THEN WE USE THE SAME DISPOSAL RATE TO GET TO THE FEE.
AND, YOU KNOW, THAT WOULD BE ABOUT A SIMILAR TYPE OF SAVINGS TO THE LOW END OF THE ALTERNATIVE ONE THAT WE LOOKED AT.
CAN I ASK YOU SOMETHING REALLY QUICK BEFORE WE GO ON? YES.
WHEN YOU CONSIDERED ALL OF THE SAVINGS HERE, THERE'S, UM, THREE THINGS THAT I DIDN'T SEE ON HERE, WHICH MAYBE YOU PUT SOMEWHERE ELSE AND THEY'RE JUST NOT IN HERE.
UM, ONE OF 'EM IS, AND WE'VE TALKED ABOUT THIS BEFORE, SO THIS IS NOTHING NEW.
UM, THE WEAR AND TEAR ON THE TRUCKS THAT WE'D HAVE GOING TO THE LANDFILL VERSUS JUST GOING TO THE TRANSFER STATION.
UM, WHAT KIND OF COST AND MAINTENANCE FOR THAT? AND I'M SORRY, AND I KNOW WE'VE TALKED ABOUT THIS BEFORE, BUT I, I JUST, I DON'T, I DON'T HAVE THOSE NUMBERS IN MY HEAD.
UM, WHAT THE COST OF THE INCREASE IN INSURANCE AND LIABILITY FOR US TO TAKE THOSE TRUCKS THAT DISTANCE, AND I DON'T KNOW IF THEY MENTIONED SOMETHING ABOUT HAVING TO TAKE 'EM ON THE HIGHWAY OR I, AGAIN, I'M, I'M DRAWING FROM MY GRAY MATTER HERE.
AND THEN ANOTHER THING, UM, WAS THE TIME FOR TRAVEL THAT THOSE VEHICLES WILL BE TAKEN TO DUMP AT THE LANDFILL VERSUS BEING, UM, PICKING UP THE, UM, THE WASTE.
SO WOULD THAT, WOULD THERE BE AN ADDITIONAL COST FOR MORE TRUCKS OR MORE DRIVERS? THOSE WERE THE THREE QUESTIONS.
AND I KNOW WE'VE TALKED ABOUT ALL THIS BEFORE, BUT, UM, I JUST DIDN'T KNOW IF YOU FACTORED IN THOSE THINGS YEAH.
I CAN, I DIDN'T SEE THAT ON HERE.
I, I THINK I CAN ADDRESS YOUR QUESTIONS.
UM, ON, ON, ON THE MATTER OF THE, THE FIRST ITEM, THE WEAR AND TEAR ON THE TRUCKS, UH, THE LIMITATION TO OUR ASSUMPTION WAS TIED TO DEPRECIATION ON THE VEHICLE.
SO WE LOOKED AT A MAINTENANCE COST PER MILE, AND SO INCREMENTALLY WE FACTORED IN, UH, THAT COST ON, UM, A PER TRIP BASIS, AND THAT WAS THE $150.
SO THAT COVERED THE INCREMENTAL AMOUNT OF LABOR, UH, THE ADDITIONAL MAINTENANCE COST PER MILE, $150 PER TRIP.
UH, ROUGHLY, I MEAN, IT WAS A LITTLE BIT HIGHER.
UM, I CAN GO BACK, UH, A HUNDRED, $157 NORMALLY ON RESIDENTIAL AND ABOUT A HUNDRED FORTY SEVEN, FIFTY SIX, AND WE CAN PROVIDE THE BACKUP DETAIL TO THOSE CALCULATIONS TO DEMONSTRATE IT, BUT IT DID INCLUDE ALLOWANCES FOR, UH, ADDITIONAL MAINTENANCE.
SO I, I BELIEVE THAT IT WOULD GENERALLY COVER THAT.
UH, ITEM INSURANCE AND LIABILITY, WE HADN'T REALLY ASSUMED IT A DI A DIRECT INCREASE TO THAT.
UM, SO THAT'S SOMETHING THAT WE CAN TALK WITH STAFF ABOUT AND MORE, UH, CAREFULLY EXAMINE.
UM, BUT IT WASN'T SOMETHING THAT, UH, THAT WE THOUGHT WOULD BE AN INCREASE NECESSARILY.
UM, HOWEVER, AGAIN, THAT'S SOMETHING WE COULD LOOK AT MORE CLOSELY.
AND THEN, UH, THE ADDITIONAL TIME FOR TRAVEL, YOU KNOW, WE DID, UH, MODEL THE ROUTES AT A HIGHER LEVEL.
LIKE WE DIDN'T DO A COLLECTION ROUTING STUDY OR ANYTHING, BUT WE LOOKED AT THE NUMBER OF HOMES THAT WE COULD COVER, UH, YOU KNOW, WITH, WITH THE EXISTING, UH, SERVICE.
AND, UM, YOU KNOW, WE DON'T THINK THAT IT'S GONNA RESULT IN A NEED TO INCREASE, UM, OR HIRE ANOTHER TRUCK OR, OR STAFF TO BE ABLE TO DO THIS.
AND I BELIEVE, UH, IN, IN PRIOR TIMES, THAT WAS SOMETHING THAT, UM, YOU KNOW, UH, THE CITY USED TO DO, UH, WAS GO DIRECTLY TO THE LANDFILL.
NOW, I DON'T KNOW HOW THE COLLECTION OPERATIONS LOOKED AT THAT TIME VERSUS IT IS TODAY, BUT BASED ON YEAH, THE CITY'S QUITE A BIT BIGGER NOW, SO, YES.
AND I MEAN, AS YOU GET LARGER, YOU KNOW, IT MAY MAKE MORE SENSE.
UM, I THINK THAT, YOU KNOW, THERE'S POTENTIALLY, YOU KNOW, OTHER TYPES OF FACTORS THAT YOUR AUTO WAS GONNA PRECISELY GET IN THE EVALUATION, BUT I THINK OUR FINDINGS ARE GENERALLY REASONABLE FOR A HIGH LEVEL ANALYSIS.
UM, SO HOPEFULLY THAT ANSWERS YOUR QUESTIONS.
YEAH, I THINK THE LIABILITY EXPOSURE WAS AN ISSUE WHEN WE TALKED ABOUT IT BEFORE, AND IT DOESN'T REALLY SOUND LIKE THAT'S NECESSARILY, I MEAN, SO I THINK THAT WOULD INVOLVE, YOU KNOW, OUR, OUR RISK MANAGEMENT TEAM ATTORNEYS, THOSE KINDS OF THINGS AS WELL.
UM, YOU KNOW, BUT FOR THIS KIND OF A, THIS IS, YEAH, SOMETHING THAT WOULD BE A SIGNIFICANT OUTLAY, UM, WE NEED TO BE MORE CERTAIN, I THINK ABOUT THESE COST SAVINGS AND I'M WONDERING DOES IT INCLUDE PROJECTED INFLATION FOR EQUIPMENT MAINTENANCE, ALL THOSE SORTS OF THINGS TOO.
AND IT MAY, IT'S JUST, I THINK,
[01:20:01]
YOU KNOW, WE NEED, WE NEED MORE SUPPORT AND DATA OR THE NEXT COUNCIL WILL, I THINK, AND THEN TIME TO EVALUATE.WHEN WE LOOKED AT THIS BEFORE, IT WAS A REALLY TIGHT TIMEFRAME IN WHICH WE WERE DOING EVALUATION.
IT JUST DOESN'T FEEL LIKE MAYBE SOME OF THOSE CONCERNS HAVE NECESSARILY BEEN INCLUDED IN THIS ANALYSIS.
I'VE BEEN FLIPPING THROUGH AND I THOUGHT, WELL, MAYBE THEY'RE ALREADY FACTORED IN, SO THAT'S WHY WE'RE, YEAH, WE NEED TO SEE THE BACKUP FOR WHERE THESE, YOU KNOW, ADDITIONAL HAULING COSTS AND STUFF, WHAT ALL IS BEING CONSIDERED AND AT WHAT DETAIL LEVEL OR THE NEXT COUNCIL.
YEAH, WE CAN, WE WE'RE GONNA BE ISSUING A REPORT AND WE WANTED AN OPPORTUNITY TO PRESENT GOOD AND GET SOME FEEDBACK.
AND I THINK THAT THE REPORT, WE'RE GONNA BE ABLE TO DETAIL THESE CALCULATIONS.
BUT, YOU KNOW, I, I DO THINK THAT WE'RE COVERING THE KEY ELEMENTS OF THE COST TO GO, UH, FARTHER, UM, YOU KNOW, THAN, THAN WHAT IT IS TODAY.
UM, I MEAN, IT'S JUST INTERESTING TO IMAGINE THAT WE'RE NOT GONNA NEED MORE EQUIPMENT IF WE'RE HAULING THE TRASH TO, BUT YEAH, I MEAN, IT'D BE REALLY INTERESTING AND, AND OBVIOUSLY IF WE CAN SAVE A LOT OF MONEY, THAT'S TERRIFIC.
UM, WELL, YOU, YOU'D PROBABLY, AND I DEFER TO BOBBY, BUT I THINK YOU'D PROBABLY REDO YOUR ROUTING, YOU KNOW, IF YOU'RE GONNA CHANGE YOUR OPERATIONS, THEN YOU MIGHT BE ABLE TO, YOU KNOW, I ASSUME THAT WE CAN ACCOMPLISH IT WITHOUT A CHANGE IN THE, UH, STAFF.
SO WE WANT TO, YOU KNOW MM-HMM
WE'RE PROBABLY GONNA SEE EACH OTHER A FEW TIMES HERE IN THE FUTURE.
UH, DID YOU INITIATE OR HAVE ANY DISCUSSIONS WITH THE CURRENT, UH, OPERATORS OF THE EDMOND TRANSFER STATION? NO, SIR.
YOU'LL DO THAT WHEN YOU COME BACK? UH, IF, IF THE CITY SO CHOOSES US TO DO THAT, WE, WE CAN, WE WILL.
IT WASN'T SOMETHING THAT WAS DISCUSSED WITH US PRIOR TO THIS PRESENTATION.
I, I JUST WANT TO JUST KIND OF WANTED TO POINT OUT, THERE WERE 2.2 PARTS TO THIS STUDY.
ONE IS KIND OF THE, UM, THE THING YOU NEED TO BE REALLY THINKING ABOUT RIGHT NOW, WHICH IS THE CHANGES TO THE RATES TO, UH, GET OUR RESERVES WHERE THEY NEED TO BE.
UH, THE TRANSFER, UH, STATION, WHETHER TO CONSIDER THE NEXT STEPS WITH THAT.
UH, THIS WAS JUST TO LAY KIND OF THE GROUNDWORK FOR THAT DISCUSSION THAT'S GOING TO BE ONGOING FOR THE NEXT YEAR, YEAR AND A HALF.
SO THERE'S STILL A LOT OF WORK THAT PROBABLY NEEDS IN DISCUSSIONS THAT NEED TO HAPPEN THERE,
SO IS IT ANTICIPATED THAT WE HAVE SOME DISCUSSION ABOUT THE OPTION ONE, OPTION TWO, OPTION THREE, OR IS THIS LAYING THE GROUNDWORK AND THEN THE FUTURE COUNCIL, THREE OF THE FIVE OF US AREN'T GONNA BE HERE AS OF MAY 5TH, AND SO THAT'S WHY WE'RE KIND OF TRYING TO ASK THE RIGHT QUESTIONS TO SET IT, BUT ULTIMATELY, UM, THOSE TWO DOWN THERE WILL BE HERE, BUT THE OTHER ONES WILL NOT
SO, UM, SO YEAH, I DON'T KNOW IF WHAT'S NEEDED OR EXPECTED FROM THAT PERSPECTIVE.
AND, AND, BUT YOU MAY NOT BE FINISHED WITH YOUR PRESENTATION EITHER.
WELL, AND I BET HE LOST HIS PLACE TOO.
SO IS, RANDY WAS SAYING THAT THESE ARE OPTIONS TO CONSIDER SURE.
FOR THE FUTURE, THE CONTRACT DOESN'T RENEW TILL 2027 MM-HMM
WITH THE, WITH TRANSFER STATIONS.
SO THOSE DISCUSSIONS WILL START NEXT YEAR AND WE'LL BE TALKING ABOUT THOSE, BUT WE NEEDED THEM TO INCLUDE EVERYTHING THAT IS A COST TO OUR SOLID WASTE F UTILITY IN THESE RATE STUDIES, UM, TO, TO FIGURE YOUR BUDGET, YOU WOULD HAVE ALL THE INFORMATION TO MAKE THOSE DECISIONS.
AND, AND WHICH COUNCIL ULTIMATELY MAKES THE DECISIONS ON THE RATES? YOU KNOW, WE DON'T, WE DON'T KNOW YET MM-HMM
UH, SO ANYWAY, YOU KNOW, THAT THAT'S WAS JUST PART OF THE, OF THAT CALCULATING OF THOSE COSTS BECAUSE THAT, THAT THAT'S A COST TO US.
AGAIN, WHEN WE WERE THERE BEFORE, A LOT OF THE DATA WAS PRESENTED REALLY CLOSE TO WHEN A DECISION HAD TO BE MADE.
AND SO I REALLY GLAD THAT WE'RE STARTING THESE DISCUSSIONS AGAIN.
I KIND OF THOUGHT, OH, NO, BUT I THOUGHT WE MIGHT, WE BE DOING THIS TODAY.
SO, BUT I MEAN, NOT, BUT NOT PUT IT OFF UNTIL 2026.
THEN WE HAVE TO MAKE A DECISION.
THAT'S WHY LAYING IT NOW AND THEN WE'RE GIVING FEEDBACK OF THINGS THAT WE THINK WOULD BE IMPORTANT TO HAVE MORE DETAIL ON SO THAT THE NEXT COUNCIL CAN MAKE A, CAN MAKE A EDUCATED,
[01:25:01]
EDUCATED, JUST HAVE THOSE NUMBERS FOR COMPARISON.THANK YOU FOR YOUR PRESENTATION.
IT WAS REALLY VERY, I INTERRUPTED YOU.
UM, YEAH, I MEAN, I THINK THAT, UM, I'LL, I'LL JUST MAKE A FINAL COMMENT ABOUT THE TRANSFER STATION.
I, I THINK THAT THE WAY THAT WE DID THE CALCULATION WAS TO ASSESS WHAT THE INCREMENTAL COST IS TO GO THE ADDITIONAL DISTANCE FROM THE TRANSFER STATION, UH, TO THE LANDFILL.
AND SO WHEN WE DID THAT MEASUREMENT, WE DID IT FROM THAT POINT.
WE DIDN'T, WE DIDN'T DO A ROUTING STUDY.
I MEAN, POTENTIALLY YOU COULD FIND MORE SAVINGS IF LIKE FOLKS COULD GO MORE DIRECTLY TO THE LANDFILL INSTEAD OF HAVING TO ROUTE BACK TO THE TRANSFER STATION, THEN LEAVE.
ADDITIONALLY, IF, IF THERE WAS A NEED FOR ADDITIONAL STAFFING, I THINK BECAUSE WE ACCOUNTED FOR THOSE LABOR COSTS AND THAT TRIP FEE, I THINK THAT, YOU KNOW, WE'RE FACTORING IN ADDITIONAL LABOR COSTS MM-HMM
SO I, I THINK, I THINK THAT, UH, WHEN WE PROVIDE MORE DETAIL THAT MIGHT DO A BETTER JOB OF PROVIDING THE DETAIL NECESSARY TO BETTER ASSESS IT AND ALL THOSE NUMBERS THAT YOU GUYS HAVE ALREADY.
AND THEN, UM, AS FAR AS NEXT STEPS GO, UM, YOU KNOW, PRESENT THE FORMAL FY 26 FEE RECOMMENDATIONS.
UM, AND I THINK THAT SHOULD HAVE SAID THE 26 BUDGET.
UM, AND THEN WE'RE GONNA PROVIDE A FORMAL REPORT THAT'S GONNA SUMMARIZE OUR ANALYSIS.
SO, UM, BUT THAT OPTION IS SOMETHING THAT ON THE RATE INCREASES TO MAKE SURE WE KEEP UP WITH INFLATION AND KEEP OUR RESERVES WHERE THEY NEED TO BE.
THAT'S A PRETTY IMMEDIATE DECISION CONCERN.
I JUST WANTED TO SAY I APPRECIATE THE CONVERSATION, THE DISCUSSION, LOOKING AT THINGS, UH, TO THE, WE HAVE TO BE FLEXIBLE AS WE GO FORWARD.
UH, I, I LOOK AT IT, UM, YES, THE RATE STUDY, HOW ARE WE GOING TO ACCOMMODATE OUR NEEDS AS WE GO INTO THE FUTURE WHEN WE'RE LOOKING AT INFLATION, METAL COSTS AND, YOU KNOW, WHAT IS THE CITY'S RISK TOLERANCE OF PROVIDING SERVICE IN THE FUTURE? MM-HMM
UH, NOT ANYONE ELSE'S RISK TOLERANCE.
WHAT IS THE CITY'S? AND THEN I LOVE THE DISCUSSION ON THE TRANSFER STATION.
THAT'S SOMETHING ELSE YOU JUST THROW ON THE WALL.
THERE'S TWO DIFFERENT BUSINESS MODELS HERE.
YOU HAVE A PRIVATE INDUSTRY OVER HERE ENTITY THAT'S SAYING THAT THIS IS THE WAY WE DO IT, THIS IS WHY WE THINK, BUT THEN WE HAVE THE CITY OVER HERE.
THIS IS THE WAY WE DO IT, IS WHY WE DO THINK A LOT OF TIMES THOSE TWO BUSINESS MODELS ARE NOT THE SAME.
AND SO ONE OF THE THINGS I WOULD, UM, HOPE THAT THE STAFF AND AND COUNCIL WILL ALSO LOOK AT IS LOOK AT, UH, ALL THE TENTACLES THAT THE CITY'S BUSINESS MODEL, HOW IT TOUCHES EVERYTHING THAT'S GONNA TOUCH COMPARED TO POSSIBLY THE, THE OTHER ENTITY THAT OWNS THE TRANSFER STATION.
AND SO, UM, I'M NOT QUITE FOLLOWING YOU.
THERE'S TWO DIFFERENT BUSINESS MODELS HERE.
WE GOT THAT PART, BUT THE TENTACLES, WE, THE WAY WE DO THINGS HERE IN THE CITY, WE TOUCH, EACH DEPARTMENT TOUCHES A LOT OF DIFFERENT THINGS.
AND THAT'S WHEN THEY LOOK, YOU KNOW, WHEN WE TALK ABOUT OUR REPORTS THAT WE GET, WE, THEY GET ALL, WE GET ALL THESE REPORTS BECAUSE IT HELPS THEM LOOK AT VARIOUS OPTIONS THAT'S GONNA BE DIFFERENT FROM THE, THE, THE CURRENT, THE OWNERS OF WHO, WHOEVER WE'RE TALKING TO.
AND SO WHEN WE COME UP HERE AND HAVE THESE, JUST THOSE, THESE DISCUSSIONS, UH, THAT NEEDS TO BE BROUGHT OUT HOW THE CITY LOOKS AT THINGS.
SO THE COUNCIL FULLY UNDERSTANDS THAT BECAUSE IT, IT IS GONNA BE DIFFERENT FROM THE PRIVATE INDUSTRY THAT WE'RE TALKING TO.
UM, I'LL BE LOOKING FROM THE SIDELINES ON THAT ONE.
WELL, I GUESS THE OTHER THING IS JUST ALL THE FACT THAT WE HAVE NOT HAD TO HAVE A RATE INCREASE MM-HMM
UM, BECAUSE OF, I THINK, UM, YOU KNOW, A WORK THAT, THAT A LOT OF FOLKS HAVE DONE, UM, IS, IS REALLY, REALLY IMPRESSIVE.
WELL AND GOT, GOT OUT OF THAT MAJOR DEFICIT.
BOBBY, WITH INFLATION THAT WE'VE ALREADY SEEN THAT WE, BUT RUBBER'S MEETING THE ROAD, IT, BUT IF SOMETHING DOESN'T CHANGE, WE'RE GONNA GO RIGHT BACK INTO IT.
WELL THAT IS EVERYTHING THAT WE'RE SUPPOSED TO COVER TODAY.
WE HAD FOUR VERY INFORMATIVE PRESENTATIONS ON, UH, WATER WASTE, WATER AND ELECTRIC SOLID WASTE, AND THE LAKE STUDIES.
ANY OTHER QUESTIONS? THOMAS FROM COUNSEL, WOULD YOU LIKE TO ADJOURN? YES, SIR.
[01:30:03]
SO MOVED.