[1. Call to Order of the Edmond City Council Meeting.]
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I HAD LIKE TO CALL THE EDMOND CITY COUNCIL WORKSHOP ON FISCAL YEAR 26 27 BUDGET, AND THE WATER AND WASTEWATER RATE STUDY TO ORDER.
[2. Presentation, Discussion, and Consideration of the Following Items Related to the Fiscal Year 2026-27 Budget: Presentation, Discussion, and Consideration of the General Fund Budget including: Current Status and Updates to Budget; and Updates to Fund Balance. Presentation, Discussion, and Consideration of Parks and Recreation Department Budgets (including Parks and Recreation, Cemetery, Festival Marketplace, Senior Center, Arcadia Lake, and KickingBird Golf).]
ITEM TWO ON THE AGENDA IS PRESENTATION, DISCUSSION, AND CONSIDERATION OF THE FOLLOWING ITEMS RELATED TO THE FISCAL YEAR 20 26, 27 BUDGET.WE'VE GOT A, A PRESENTATION DISCUSSION, CONSIDERATION OF THE GENERAL FUND BUDGET, INCLUDING CURRENT STATUS AND UPDATES TO BUDGET AND UPDATES TO FUND BALANCE AND B PRESENTATION, DISCUSSION AND CONSIDERATION OF PARKS AND RECREATION DEPARTMENT BUDGETS, INCLUDING PARKS AND RECREATION, CEMETERY, FESTIVAL, MARKETPLACE, SENIOR CENTER, ARCADIA LAKE, AND KICKING BIRD GOLF.
AND IT LOOKS LIKE MS. PANIS IS COMING FORWARD TO TALK.
UNFORTUNATELY, OUR SLIDES ARE NOT LOADED.
UM, SO CHRISTIE'S CHECKING RIGHT NOW.
YOU GUYS PROBABLY REMEMBER WHAT I HAVE TO SAY, HOWEVER, SO I CAN, I CAN CARRY ON.
I'LL GO AHEAD AND JUST START TALKING ABOUT IT.
UM, WE'LL, WE'LL GET IT LOADED HERE.
BUT BASICALLY THIS IS JUST A RECAP OF THE GENERAL FUND, WHAT WE TALKED ABOUT LAST TIME.
AND, UM, WE DID DO, WE MADE TWO OF THE ADJUSTMENTS, UH, IN THE OPTIONS THAT WE PRESENTED.
ONE OF THOSE WAS TO, UM, REDUCE THE INTERFUND TRANSFERS OUT OF THE GENERAL FUND TO THE FIELD SERVICES, UH, FUND FOR STREETS AND REPLACE THAT WITH THAT AMOUNT.
IT'S $2.6 MILLION COMING OUT OF THE 2017 CIP FUND.
SO WE DID THAT AND WE ALSO REDUCED THE INTER FUND TRANSFERS OUT OF THE GENERAL FUND FOR CLINK IN THE AMOUNT OF $495,000.
AND WHEN WE DID THOSE TWO THINGS, OUR UNASSIGNED GENERAL FUND BALANCE RIGHT NOW IS 8.82%.
AND, UH, THOSE, WE DIDN'T CHANGE ANY OTHER ASSUMPTIONS.
WE STILL HAVE A 0% SALES TAX GROWTH, 4% USE TAX GROWTH, AND 1% ON ALL OTHER REVENUE AS A GROWTH PERCENTAGE.
UM, AFTER ALL THE CHANGES, THERE HAVE BEEN A FEW MINOR OTHER CHANGES THAT HAVE HAPPENED IN BETWEEN THESE TWO, UM, WORKSHOPS.
BUT WITH EVERYTHING ALL IN INCLUSIVE AT THIS POINT, UH, PERSONAL EXPENSES ARE UP 3.2 PER TWO 2%.
MATERIALS AND SUPPLIES ARE DOWN 10.5%.
OTHER SERVICES AND CHARGES ARE DOWN 1.8900000000000001% AND CAPITAL OUTLAY IS DOWN 0.22% IN THE GENERAL FUND.
SO THAT, UM, AT THIS POINT NOW, IF YOU RECALL LAST TIME WE WERE, WE HAD, WE WERE KATHY BEFORE YOU YES, GO ON.
ON THE, THE PERSONAL SERVICES EXPENSES WE'RE SAYING IT'S UP 3.22%.
HOW DID WE GET TO THAT NUMBER? DID WE KEEP THE VACANT POSITIONS VACANT AT A STEP PLUS THE BENEFIT COST? HOW DID WE GET THERE? YES.
SO ALL STEPS THAT WOULD'VE COME NORMALLY ARE INCLUDED.
AND, UM, IT'S, IT'S TOTAL COMP.
SO IF THERE'S ANY PENSION, YOU KNOW, CONTRIBUTIONS OR ANYTHING LIKE THAT, IT'S, IT'S FULL COMP AND IT IS ALL BUDGETED POSITION.
SO EVEN THOUGH THEY'RE VACANT, SO THIS IS WORST CASE UP 3.22% ON OUR PERSONNEL.
UM, IT DOESN'T INCLUDE ANY, WELL, WE, WE HAVEN'T TALKED ABOUT ANY OTHER TYPES OF COMPENSATION, LIKE IF THERE'S, YOU KNOW, STIPENDS OR ANYTHING LIKE THAT.
SO THIS IS JUST REALLY ANYBODY THAT HAD A STEP COMING, IT WAS CALCULATED IN THERE AT THE FULL YEAR.
WE'RE GONNA HAVE MATT COME UP 'CAUSE I THINK HE CAN HELP US GET THAT RUNNING.
UM, AND, AND THE, JUST A COUPLE OTHER THINGS.
I'LL SAY THE TWO FUNDS THAT WE MOVED AWAY FROM THE GENERAL FUND FOR, AND ACTUALLY HAD THE TRANSFERS COME OUT OF, SO THE 2017 CAPITAL IMPROVEMENT FUND, AFTER WE MADE THAT ADJUSTMENT FOR 2.6 MILLION, IT'S STILL AT AROUND 10 MILLION IN THEIR FUND BALANCE.
AND THEN, UH, CITYLINK IS AROUND, UH, IT'S ABOUT BREAK EVEN NOW, BUT IT IS STILL POSITIVE AT 26,000.
WAS THAT CIP ITEM ON THE AGENDA FOR TOMORROW'S MEETING OR DISCUSSION AT THE CIP MEETING ON? OH, OKAY.
IS IT, WHAT DO YOU MEAN THE REDUCTION? THE WELL, THE REDUCTION IN THE, IN THE GENERAL FUND USING CIP VERSUS GENERAL FUND? I, I DON'T RECALL IF IT'S ON THE AGENDA.
WE, I MEAN, WE CAN ADD IT AS A DISCUSSION.
I I DON'T RECALL IF IT'S ON THE AGENDA.
CAN YOU REPEAT THAT QUESTION? I COULDN'T
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HEAR IT.UH, LAST MEETING I HAD ASKED THAT WE GET THE CIP BOARD TO WEIGH IN ON THE, JUST ON THE USAGE OF THE CIP RESERVES FOR THAT GENERAL FUND ROAD MONEY AND THE MEETING'S TOMORROW.
I WAS JUST CHECKING IF IT'S ON THE AGENDA, I'M GONNA LOOK REAL QUICK.
SO, UH, LET'S GET AGAIN, I APOLOGIZE, BUT, UM, THAT'S NOT, THAT'S NOT WORKING.
MATT, MATT
WELL, THIS WAS ACTUALLY WHAT I WAS TALKING ABOUT.
WE DID HAVE A USE OF FUND BALANCE AROUND 1.8 MILLION AND IT'S NOW ZERO, AND WE'RE ACTUALLY, UH, IN INCREASING OUR FUND BALANCE THERE WE GO BY 1.8.
OKAY, SO THOSE WERE THE TWO ADJUSTMENTS WE MADE.
AND AS YOU CAN SEE, EVERY 1% IT'S $875,000 APPROXIMATELY.
SO IF WE DO DECIDE TO DO SOMETHING ELSE, YOU'LL KIND OF HAVE A, A BENCHMARK OF, UH, WHAT EACH PERCENT WOULD BE.
SO I THINK WE'RE GONNA MOVE ON.
WE WILL MOVE ON TO PARK AND RICK WITH BRAD RAINEY.
GOOD AFTERNOON, MAYOR AND COUNCIL.
BRAD RAINEY, PARKS AND RECREATION DIRECTOR, SEE IF THIS WORKS.
I'M HERE TO TALK ABOUT OUR PARKS AND REC DEPARTMENT AND ITS BUDGET FOR THE UPCOMING FISCAL YEAR.
SO PARKS AND REC DEPARTMENT HAS A LOT OF DIFFERENT DIVISIONS AND DIVERSE OPERATIONS AND THINGS GOING ON IN IT.
UM, I'LL KIND OF TALK THROUGH EACH OF THESE.
THERE'S, THERE'S MORE TO IT, BUT OVERALL, WE BUDGETED FLAT AS, AS WE WERE, UM, INSTRUCTED TO DO.
WE DID THE SAME LAST YEAR, INCLUDING THE BUDGET CUT THAT WE DID BEFORE LAST SEPTEMBER.
UM, SO WITH, WITHIN ALL THESE DIVISIONS, THERE'S SOME THINGS THAT ARE UP AND SOME THINGS THAT ARE DOWN TO, TO MAKE A FLAT BUDGET, BUT SPECIFICALLY WITHIN THE THINGS THAT ARE FUNDED BY THE GENERAL FUND, WE, WE KEPT THINGS FLAT.
UM, PARTS AND REC DEPARTMENT IS FUNDED IN DIFFERENT WAYS.
IT RECEIVES SOME MONEY FROM THE GENERAL FUND.
THERE'S FEES CHARGED, THERE'S THE, UM, PARK TAX THAT WE'LL TALK ABOUT.
SO WE WILL, WE'LL WALK THROUGH ALL OF THAT.
UM, BEFORE WE JUMP INTO THE BUDGET, I JUST WANTED TO SHARE A FEW OF THESE, UH, GRAPHS WITH YOU.
ONE OF THE THINGS THAT WE DO IS WE SUBMIT ALL OF OUR INFORMATION.
SO A NUMBER OF PARKS, ACRES, OUR BUDGET, EVERYTHING, ALL THE STA STATISTICS WE CAN COME UP WITH.
WE PUT 'EM INTO A DATABASE, A NATIONAL DATABASE THROUGH THE NATIONAL RECREATION AND PARKS ASSOCIATION, AND THEY KIND OF BENCHMARK YOUR PERFORMANCE VERSUS OTHER AGENCIES AROUND THE COUNTRY.
SO THIS IS, UM, SOME OF THE RESULTS FROM IT THAT, AND, AND I THINK IT KIND OF TELLS A STORY.
SO IF YOU LOOK IN YOUR UPPER LEFT ACRES OF PARKLAND PER A THOUSAND POPULATION, UM, WHERE, WHERE THE DARK GREEN THERE, THAT'S A LOT TALLER THAN THE REST, WHICH IS KIND OF THE REST OF THE COUNTRY.
SO OUR, OUR ACRES PER CITIZEN IS KIND OF OFF THE CHARTS.
UM, WE, WE, IT MAKES EDMOND GREAT ALONG WITH A LOT OF OTHER THINGS.
WE HAVE A LOT OF ACRES OF PARK LAND.
AND WHAT'S REALLY GREAT IS THE SLIDE TO ITS RIGHT IS HOW MUCH ARE WE SPENDING TO OPERATE AND MAINTAIN THOSE ACRES.
IT'S MU IT'S MUCH, MUCH LOWER THAN, THAN THE REST OF THE, THE COUNTRY.
SO WE'RE OFFERING A LOT OF ACRES OF PARK LAND AND, AND IN A VERY EFFICIENT OPERATION AND, AND MAINTENANCE OF THOSE ACRES.
AND WE, WE ALL BENEFIT FROM THAT.
UM, OUR OPERATING EXPENDITURES PER HOW MUCH DO WE SPEND PER CITIZEN? THAT'S A LITTLE BIT CLOSER TO, TO THE AVERAGE, BUT REMEMBER WE'RE ALSO GETTING A, A LOT MORE THAN, THAN MOST RESIDENTS AROUND THE COUNTRY GET.
AND FINALLY, UM, HOW MUCH REVENUE IS A PERCENT OF OPERATING EXPENDITURES? SO HOW MUCH ARE WE RECOVERING? AND WE'RE MUCH HIGHER, UM, THAN, THAN THE REST OF THE COUNTRY THERE.
SO AS WE'RE BENCHMARKED AND, AND A LOT OF THIS, UM, IS THE SUCCESS AND POPULARITY OF KICKING BIRD IN ARCADIA LAKE, THAT, THAT, UH, MAKE THAT PERCENT OF OPERATING EXPENDITURES SO HIGH AND ALSO THE NUMBER OF ACRES THAT ARE, THAT ARE AVAILABLE AT
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THE LAKE.MOST CITIES DON'T HAVE THE RESOURCE THAT WE HAVE IN ARCADIA LAKE, SO WE'RE REALLY FORTUNATE.
UM, THERE'S ALWAYS MORE TO DO AND IMPROVEMENTS TO MAKE, BUT I THINK WE'RE ALL, THIS IS SOMETHING TO BE PROUD OF, UM, HERE.
SO BRIAN, BEFORE YOU MOVE ON, CAN YOU GO BACK TO THAT SLIDE? SURE.
CAN YOU EXPLAIN THAT POPULATION DENSITY PER SQUARE MILE 500 TO 1500.
IT'S IN ALL FOUR OF YOUR CHARTS.
YEAH, I'M TOTALLY LOST ON WHAT IT IS.
I I CAN, I I HONESTLY DON'T KNOW.
I'M MORE LOOKING AT THE ALL AGENCIES VERSUS YOUR AGENCY.
THIS IS, THIS IS A REPORT THAT THE NRPA PRODUCES, BUT I CAN GET AN ANSWER TO YOU ON THAT AND, AND DIVE INTO THAT.
SO, SO WE'LL, WE'LL START FIRST WITH, UM, FOR THE PURPOSE OF THE BUDGET, WHAT WE'RE CALLING THE PARKS AND REC DEPARTMENT.
SO THESE ARE MORE OF OUR GENERAL FUN DIVISIONS.
SO PARK MAINTENANCE, THAT'S THE LARGEST OF THIS TOTAL, UM, RECREATION, PELICAN BAY SPECIAL EVENTS, STREETSCAPE, SO THINK MEDIAS DOWNTOWN LANDSCAPING AND JUST ADMIN, SO O OFFICE STUFF.
UM, SO THIS, THIS IS JUST OUR OVERALL BUDGET HERE.
UM, LIKE, LIKE I SAID, WE KEPT IT FLAT.
IF, IF IT LOOK, IF YOU'RE LOOKING COMPARED TO PREVIOUS YEARS, THE ONE THING THAT CHANGED IS THE STREETSCAPE BUDGET.
UM, USED TO BE MANAGED UNDER A DIFFERENT DEPARTMENT.
I THINK IT WAS COMMUNITY QUALITY OR COMMUNITY IMAGE.
AND IT'S NOW UNDER THE PARKS AND REC DEPARTMENT BUDGET.
SO THAT COULD SHOW AN INCREASE OVER, OVER PREVIOUS YEARS, BUT IT'S JUST, JUST THE WAY WE'RE ADMINISTERING THE BUDGET.
UM, ANY QUESTIONS ON THIS SLIDE BEFORE I MOVE ON? SO, LIKE I SAID, UM, WE'RE, WE'RE NOT JUST FUNDED BY THE GENERAL FUND.
WE HAVE THE PARK TAX, UM, IT'S ONE EIGHTH OF A CENT.
IT'S A PERMANENT TAX APPROVED BY THE CITIZENS QUITE, QUITE A FEW YEARS AGO.
SO IT BRINGS IN ABOUT $3 MILLION A YEAR.
THAT'S THE REVENUE IN RIGHT THERE.
IT'S MOSTLY SALES TAX AND A FEW OTHER SMALLER THINGS.
UM, THE, THE BUDGET INCLUDES SOME PARK MAINTENANCE, MAINLY PARK, IT'S MAINLY MITCH PARK AND PARKS WEST OF BROADWAY.
IT ALSO INCLUDES, UM, THE COMPETITION POOL AT THE MITCH PARK, YMCA.
IT HELPS OPERATE AND FUND THAT.
AND, AND WE DO THAT TOGETHER WITH THE SCHOOL DISTRICT AND, UM, SEVERAL OTHER ATHLETIC FACILITIES WEST, WEST OF BROADWAY THAT THIS FUNDS.
UM, SO ABOUT $3 MILLION IN THAT WE'RE PROJECTING.
AND THEN ABOUT THE SAME THAT WE'RE PLANNING ON SPENDING THIS THIS YEAR, UM, IT DOES HAVE A FUND BALANCE THAT, UH, OF CURRENTLY ABOUT $3 MILLION.
AND, UM, SO WE ARE ABLE JUST TO GO OVER A LITTLE BIT OVER, WE'VE BEEN SPENDING THAT DOWN.
IT KIND OF WENT UP HIGH DURING, DURING COVID AND WE'VE BEEN SPENDING THAT MONEY ON, ON DIFFERENT PROJECTS.
SO, UM, THIS REALLY REPRESENTS AN EMPHASIS ON MAINTAINING THINGS ON, ON TAKING CARE OF WHAT WE HAVE.
AND THEN SOME CAPITAL OUTLAY FOR, UM, A, A GRANT THAT I'LL TALK ABOUT LATER, UH, IN, IN THE COUNCIL MEETING FOR AN IMPROVEMENT AT HAYFORD PARK.
OUR CEMETERY IS MOSTLY FUNDED BY THE GENERAL FUND.
UM, WE, WE DO COLLECT REVENUE AT THE CEMETERY FOR THE SERVICES.
IT'S, IT'S ABOUT 217,000 IN, IN REVENUE THAT'S GENERATED THERE.
BUT THE EXPENSES ARE, ARE FUNDED BY THE GENERAL FUND AT GRACE LAWN CEMETERY.
OUR FESTIVAL MARKETPLACE, THIS IS A SMALL BUDGET, BUT THIS IS MOSTLY FARMER'S MARKET OPERATIONS.
UM, THE PERSONNEL SERVICES IS THE BIGGEST THING.
UH, THERE'S, THERE'S TWO PEOPLE THAT, THAT RUN THAT PROGRAM.
THEY ALSO DO A LOT MORE THAN JUST RUN THE FARMER'S MARKET.
THEY'RE DOING ALL SORTS OF EVENTS, THEY'RE DOING MARKETING.
UM, FARMER'S MARKET DOES GENERATE REVENUE AND, AND BOOTH FEES FROM THE VENDORS.
IT ALSO IN, IN SALES IT DURING THE SUMMER SEASON ALONE IS ABOUT $1.6 MILLION, WHICH WE GET A DIRECT COLLECTION OUT OF THAT MONEY FOR, FOR SALES TAX.
AND THAT DOESN'T COUNT THE, UM, INDIRECT BENEFITS TO DOWNTOWN BUSINESSES AND OTHER BUSINESSES THAT, THAT IT GENERATES.
OUR SENIOR CENTER THAT'S LOCATED AT MITCH PARK IS MOSTLY FUNDED BY THE GENERAL FUND.
IT DOES RECEIVE SOME FUNDING FROM THE SENIOR CITIZENS FUND.
SO THAT'S, UH, DONATIONS ESSENTIALLY COLLECTED OVER TIME, UM, THAT, THAT GOES INTO A FUND EARMARKED FOR THAT.
BUT, UM, ANY, ANY QUESTIONS ABOUT THOSE? THAT'S MOST OF OUR GENERAL FUN THINGS.
SORRY, I'M, I'M FLYING THROUGH OUR, OUR, UH, OPERATIONS HERE AND I'LL JUST STOP AND SEE IF THERE'S ANY QUESTIONS YOU GOT.
UH, I, I WAS WAITING UNTIL THE STOPPING POINT.
I'M HAVING A LITTLE BIT OF A HARD TIME CONNECTING THE DOTS HERE.
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NOT TO PUT YOU ON THE SPOT, BUT LIKE ON, CAN YOU GO BACK TO SLIDE 12? SO ON THE GENERAL, ON THE GENERAL FUND LIST THAT KATHY SHOWED US, I GUESS IT'S SLIDE SIX, THERE'S A 4.4 MILLION PARKS AND RACK LINE SEPARATE FROM SENIOR CITIZENS SEPARATE FROM CEMETERY, BUT THEN THIS ONE'S A 4.5 MILLION.I'M JUST HAVING A HARD TIME FIGURING OUT WHICH NUMBERS MEAN WHAT HERE.
YEAH, I THINK, I THINK IT PROBABLY, I MEAN, WE'D HAVE TO SIT DOWN AND LOOK AT LIKE THOSE NUMBERS WE WORKED WITH FINANCE TO, TO VERIFY ALL OF OUR NUMBERS HERE.
LIKE I SAID, THAT PARKS AND REC IS SEVERAL DIVISIONS ROLLED UP TOGETHER THAT ARE LIKE SEPARATE BUDGETS THAT ARE, THAT ARE ADDED UP.
SO I THINK, I THINK WE NEED NEED TO TAKE A LOOK AT THAT AND GET YOU AN ANSWER.
I MEAN, THEY, THEY PROBABLY MATCH, IT'S PROBABLY APPLES AND ORANGES LOOKING AT THEM YEAH.
'CAUSE ONE'S A GENERAL FUND VIEW OF THINGS, RIGHT? MM-HMM
MAYBE YOU CAN HELP ME OFFLINE, CONNECT THE DOTS THERE, MATT.
UM, AND THEN I THINK YOU SAID IT, BUT JUST TO MAKE SURE ON LIKE SLIDE 14.
SO WE'RE, WE'RE INTENTIONALLY SPENDING SOME FUN BALANCE OF LIKE 86 K YEAH.
THIS YEAR TO MAKE THINGS BALANCE WITH THE PARK TAX.
AND, AND LIKELY, UM, LUCKILY WE WON'T SPEND A HUNDRED PERCENT OF, OF OUR FUNDS AND WE PROBABLY WON'T SPEND FUND BALANCE, BUT THERE IS A FUND BALANCE THERE TO HANDLE THAT.
AND THERE'S EVEN A FUND BALANCE.
UM, WE, WE'VE KEPT A LARGER FUND BALANCE BECAUSE WE DO OPERATE THE METRO PARK COMPETITION POOL.
IT'S, IT'S GETTING UP THERE IN YEARS.
IT'S HAD SOME ISSUES WE WE'RE TRYING TO, UM, SAVE FOR A RAINY DAY IF, IF MM-HMM
IF YOU WILL, FOR HOLDING SOME OF THAT.
BUT, BUT YES, IT DOES PROPOSE ON, ON THIS BUDGET SPENDING SOME OF THE FUND BALANCE.
I WILL POINT OUT TOO THAT INTERFUND TRANSFERS OUT.
SO, UM, WE'LL GET TO ARCADIA LAKE, I THINK IT'S THE NEXT SLIDE, BUT FUNDS ARE TRANSFERRED BETWEEN THE PARK TAX AND THE ARCADIA LAKE FUND TO KIND OF BALANCE OUT THE LAKE BECAUSE IT SPENDS MORE TO OPERATE IT THAN IT, THAN IT BRINGS IN.
SO THAT ENTER FUND TRANSFER OUT KIND OF ASSUMES THAT EVERYBODY SPENDS A HUNDRED PERCENT OF, OF THEIR BUDGET.
SO WE'RE, WE'RE BUDGETING FOR THAT.
BUT, UM, ANYWAYS, THAT ANSWER YOUR QUESTION THERE ON THE, ON THE FUND BALANCE, KIND OF MIGHT NEED TO GO
I NEED TO WORK WITH MATT OFFLINE JUST TO UNDERSTAND.
I DIDN'T HAVE TIME TO DO THAT BEFORE WE GOT HERE.
AND THEN ALL THESE USES CEMETERY FISCAL MARKETPLACE, THESE ARE JUST USES WITHIN GENERAL FUNDS, SO THERE'S NO REVENUE SHOWN HERE, BUT THERE IS SOME REVENUE COMING INTO THE GENERAL FUND IN SOME CASES YOU SAID? YES.
I MEAN IT'S A SMALL AMOUNT COMPARED TO THE OVERALL GENERAL FUND.
DOESN'T COVER, SO LIKE ON, UM, THIS SLIDE WHERE YOU HAVE, UH, WELL, WHERE YOU HAVE ALL THE DIFFERENT DIVISIONS LUMPED UNDER, UNDER PARKS AND REC, THERE'S ABOUT $80,000 GENERATED THERE BACK INTO THE GENERAL FUND.
AND THAT'S FOR THINGS LIKE PAVILION RENTALS AND SOME OF OUR SPORTS PARTNER AGREEMENTS.
SO SOME SMALLER THINGS THAT, UM, IN THE, IN THE BIGGER PICTURE, UM, ARE PRETTY SMALL COMPARED TO THE, SO OKAY.
AND WE'LL MOVE ON TO ARCADIA LAKE.
SO ALL THESE SLIDES ARE JUST KIND OF DOING OUR BEST TO SHOW MONEY AND MONEY OUT.
SO THIS IS THE ANTICIPATED REVENUE FOR THE UPCOMING FISCAL YEAR OF ABOUT $1.7 MILLION AND THEN SHOWING THE TRANS THE ANTICIPATED TRANSFER IN FROM THE PART TAX FUND.
AND THAT KIND OF ASSUMES, LIKE I SAID, THAT WE SPENT A HUNDRED PERCENT OF OUR BUDGET, WHICH WE USUALLY DON'T.
SO THAT'S KIND OF OUR TOTAL EXPENSE RIGHT THERE.
AND THEN THESE ARE OUR ANTICIPATED EXPENSES.
SO IF YOU LOOK, UM, TO TOTAL EXPENSES WHERE YOU HAVE PERSONAL SERVICES, MATERIALS AND SUPPLIES OF 1.8 MILLION, THAT'S KIND OF YOUR DIRECT OPERATING COST FOR THE LAKE.
AND THEN IF YOU GO BACK, MAYBE IT'S GONNA GO BACK, IT'S, IT'S REALLY CLOSE, LIKE THE REVENUE WE BRING IN VERSUS THE DIRECT COSTS ARE AROUND THE LAKE.
THEY'RE REALLY CLOSE TO BALANCING.
BUT THEN WE HAVE, UM, KIND OF THE ADMINISTRATIVE OVERHEAD, I GUESS I WOULD CALL IT FOR THE INTER FUND TRANSFERS OUT THAT, UM, THAT PUT US HIGHER IN EXPENSES THAN, THAN THE REVENUE THAT WE BRING IN.
BUT THAT'S BALANCED OUT BY THE PARK TAX HISTORICALLY, THAT HAD BEEN PREVIOUSLY DONE BY THE GENERAL FUND, UH, THAT, THAT KIND OF DIFFERENCE.
AND RECENTLY THAT'S, THAT'S BEEN MOVED TO COME OUT OF THE PARK TAX JUST WITH THE, WITH THE STRESS ON, ON THE GENERAL FUND THERE.
I THINK OUR LAST, SORRY, THIS IS LIKE, THERE WE GO.
UM, IS OUR, IS OUR GOLF GOLF COURSE AND, UM, BRIAN'S HERE, NICOLE'S ALSO HERE FROM THE LAKE IF YOU HAVE SPECIFIC, LIKE REALLY DETAILED QUESTIONS THAT YOU WANT TO GET INTO DEEPER IN SOME OF THESE THINGS.
BUT OVERALL, THIS IS THE PROJECTED REVENUE FOR
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THE, THE GOLF COURSE OPERATION.WE DON'T TRANSFER ANY MONEY IN TO HELP WITH THE GOLF COURSE.
IT SUSTAINS ITSELF AND IT DOESN'T INTEND TO USE ANY OF ITS FUN BALANCE AND ON EXPENSES.
UM, IT SHOWS ON, ON EXPENSES A SLIGHT PROFIT WITH ALSO IF YOU LOOK AT CAPITAL OUTLAY THAT THERE'LL BE SOME INVESTMENTS IN THE GOLF COURSE WITH, WITH SOME OF THE, UM, REVENUE THAT THEY'RE BRINGING IN.
SO IT'S SELF-SUSTAINING AND ALSO PAYING FOR SOME, UM, IMPROVEMENTS.
AND, AND ALONG THE WAY, THE FINAL SLIDE WE HAVE IS JUST KIND OF A WRAP UP OF, OF KIND OF OUR EXPENSES.
AND I'LL JUST POINT OUT A COUPLE THINGS KIND OF SHOWING, UM, OUT OF WHICH FUNDS, PARKS AND REC IS FUNDED OUT OF.
SO, UM, THE GENERAL FUND KIND OF LOOKS AT PARKS AND REC AND, AND ALL THE OTHER, UH, DIVISIONS ADDED UP IN THERE, THE SPECIAL REVENUE FUNDS.
SO THAT WAS THE SENIOR CITIZENS FUND I TALKED ABOUT.
UM, THE OTHER IS, IS $1.5 MILLION FOR THE HAY FOR TAX, HAY FOR SPECIAL TAX FUND.
SO THIS IS THE CHARLES LAND PRESERVE.
THIS, THESE FUNDS HAVE BEEN UNASSIGNED AND SO WE'RE ASSIGNING THEM TO BE ABLE TO SPEND IN ANTICIPATION THAT WE'LL BE ABLE TO START BUILDING IT THE NEXT FISCAL YEAR.
UM, I'M SURE YOU ALREADY KNOW WE'RE, WE'RE WAITING ON A GRANT FROM THE LAND WATER CONSERVATION FUND TO FINALIZE, TO BE ABLE TO HAVE A NOTICE TO PROCEED TO MOVE FORWARD WITH THAT.
UM, JUST SO YOU KNOW, AND TO EMPHASIZE THE IMPORTANCE OF THAT GRANT, THE COST ESTIMATE TO BUILD THAT PROJECT IS ABOUT $1.6 MILLION.
AS YOU CAN SEE, THERE'S ONE ABOUT 1.5 IN THE SPECIAL TAX FUND.
SO WE DO NEED IT TO COMPLETE THE PROJECT.
THE GRANT IS $800,000, WHICH HOPEFULLY IF THINGS COME IN LIKE THEY'RE PROJECTED WILL ALSO GIVE US MONEY TO, TO FUND MAINTENANCE OF IT OVER A NUMBER OF YEARS.
SO I'M EXCITED ABOUT THAT, THAT WE'RE, WE'RE BUILDING A PROJECT WITH A PLAN OF HOW WE'RE GONNA MAINTAIN IT TOO.
UM, ON, ON CAPITAL, UH, PROJECT FUNDS, THE PARK TAXES LISTED UNDER THAT, UM, 4.5 MILLION FROM THE CIP.
AND I JUST WANTED TO POINT OUT THAT THOSE ARE, UH, I THINK ALMOST ALL TRAIL PROJECT.
THERE'S A LITTLE BIT FOR SOME RESTROOMS AT THE LAKE, BUT THAT'S MOSTLY TRAIL PROJECTS THO THAT'S REALLY A COLLECTIVE EFFORT, UM, AMONGST CITY DEPARTMENTS OR PLANNING AND ENGINEERING AND, UM, ARE, ARE REALLY INSTRUMENTAL IN DRIVING THOSE PROJECTS.
AND THEN WE KIND OF TAKE 'EM OVER AT THE END AND, AND, AND MAINTAIN 'EM, UM, AND THEN YOUR LAKE AND GOLF AND, AND THAT'S WHERE WE COME UP WITH OUR TOTAL USES OF $21 MILLION.
SO, UM, HAPPY TO ANSWER ANY QUESTIONS IF THERE ARE ANY QUESTIONS.
I HAVE ONE, MR. MAYOR, ON THE, THE MAINTENANCE OF KICKING BIRD, WHERE IS THAT? IS THAT UNDER PERSONAL SERVICES? WHERE IS IT? YEAH, THERE.
SO THAT'S YOUR EXPENSES RIGHT THERE.
SO IT WOULD, IT WOULD BE ALL OF THOSE LINES COMBINED THAT WOULD GO INTO THE MAINTENANCE OF KICKING BIRDS.
SO THERE'S A COUPLE DIVISIONS WITHIN THEIR BUDGET.
UM, IT'S JUST ALL ROLLED UP FOR THE PURPOSE OF THIS PRESENTATION, I JUST WANNA MENTION, SORRY, MENTION ONE MORE COMMENT THAT THIS CAME UP IN FINANCE COMMITTEE.
SOME OF YOU PAY ATTENTION TO THAT, SOME OF YOU DON'T.
BUT THE, UM, ONE OF THE ACTIONS WE'RE WORKING IN FINANCE COMMITTEE IS A CAPITAL PLAN TO TRY TO IDENTIFY MAINTENANCE AND RECAPITALIZATION COSTS OF ALL OF OUR ASSETS IN THE CITY.
YOU HAVE A LOT OF 'EM, RIGHT? YOU AND BRIAN, UH, WITH THE GOLF COURSE.
SO TAYLOR BROUGHT UP A GOOD COMMENT THE OTHER DAY AND WITH, JUST IN THE CONTEXT OF A GOLF COURSE, WE'RE DEPRECIATING A CERTAIN AMOUNT RIGHT FROM THE TOTAL VALUE OF THE GOLF COURSE.
THAT'S ESSENTIALLY LIKE, MIGHT COULD VIEW IT AS A SAVINGS FOR THE NEXT BIG GOLF COURSE.
REDO WE MIGHT DO IN 20 YEARS, BUT THAT'S NOT REALLY BUILT INTO OUR BUDGET.
SO WE'RE JUST FOR EVERYBODY'S AWARENESS, WE'RE TRYING TO WORK THAT THROUGH THE FINANCE COMMITTEE AS A, A, A BROADER CAPITAL PLAN SO THAT WE'RE PLANNING THOSE THINGS THAT ARE COMING SPECIFICALLY, UM, THE GOLF COURSE, PARKS, TRAILS, UM, THINGS LIKE THAT.
SO THAT'S NOT REALLY IN HERE RIGHT NOW, THE WAY WE BUDGET THINGS.
SO, UM, OR MAYBE IT IS IN SPOTS BUT NOT FULLY.
SO JUST WANTED TO POINT THAT OUT, SOMETHING TO THEN WE'LL CONTINUE WORKING.
BRAD, UH, 4.5 MILLION FROM THE 2000 CIP FUND.
IS THAT TOTAL AMOUNT ALREADY BEEN THROUGH CIP BOARD? I DON'T, I DON'T THINK IT'S BEEN THROUGH CIP BOARD.
I THINK FINANCE PROVIDED THIS NUMBER.
IT MAY BE LOOKING AT KIND OF THEIR FIVE YEAR PLAN.
UM, BUT IT'S, BUT IT'S KIND OF PROJECTED, I GUESS FOR, FOR PURPOSES OF, OF THE BUDGET.
IF THERE AREN'T ANY OTHER QUESTIONS, I'LL ADVANCE THE SLIDES AND TURN THE TIME OVER TO THE NEXT PRESENTER MAYBE.
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I THINK THAT MEANS YOU'RE DONEUH, MAYOR, JUST REAL QUICK, JUST BASED ON THE QUESTION THAT YOU JUST ASKED ABOUT THE 4.5 MILLION, I JUST MADE A NOTE THAT WE CAN REPORT BACK ABOUT THE ACTUAL DOLLAR AMOUNT THAT'S BEEN THROUGH ONCE WE KNOW THAT NUMBER.
IS THAT A POINT YOU'D LIKE TO REVISIT AS PART OF THIS BUDGET? BECAUSE I I WOULD, I'M SORT OF ANTICIPATING WHAT WOULD BE YOUR NEXT ROUND OF, OF QUESTIONS.
YEAH, IT, IT, IT GOES TO TRYING TO UNDERSTAND THE DIFFERENCE BETWEEN OPERATING BUDGET AND CAPITAL BUDGET AND WHAT HAS BEEN APPROVED AT THE CIP LEVEL FROM THE BOARD COMING TO US.
UM, WHICH WE ALSO HAVE TO UNDERSTAND THERE'S DIFFERENT TERMINOLOGY WHEN WE SAY CIP WITHIN CITY GOVERNMENT.
UM, THERE'S THE CIP FUNDS AND THEN THERE'S PUBLIC WORKS.
SO I JUST WANNA MAKE SURE THAT WE, WE ARE TRACKING THAT AS WE CONTINUE TO IDENTIFY ISSUES TO WORK ON OVER THE NEXT 12 MONTHS.
SO JUST, SORRY, JUST AS ONE QUICK FOLLOW UP ITEM, WE WILL DETERMINE WHAT PERCENTAGE OF THAT 4.5, UM, HAS ALREADY BEEN THROUGH AND REPORT BACK.
AND THEY'RE REVIEWING, I DID SEE THEY'RE REVIEWING THE FIVE YEAR BUDGET TOMORROW AND WHICH WILL FEED INTO THIS.
SO I WAS, I IMAGINE THAT THAT'S BRAD'S TOTAL WAS THE SUM OF ALL THOSE THINGS.
THAT'S ALREADY IN THAT SPREADSHEET, THAT PLANNING SPREADSHEET IF I HAD TO GUESS.
[3. Presentation and Discussion of Water and Wastewater Rate Study Update.]
MOVE ON TO NUMBER THREE, PRESENTATION, DISCUSSION OF WATER AND WASTEWATER RATE STUDY.CHRIS, YOU'D LIKE TO GIVE US AN UPDATE? I BET.
GOOD AFTERNOON, MAYOR AND COUNCIL.
CHRIS KNIFING, DIRECTOR OF WATER RESOURCES, UM, HE'S GONNA GET US KICKED OFF FOR, I'M SURE IT'LL BE A REALLY SHORT DISCUSSION.
UM, SO GOT JASON GRAY WITH, WELL, DAN FINANCIAL, UM, HERE.
HE'S GONNA PRESENT ON THAT ACTUAL RATE STUDY THAT THEY PERFORMED FOR US AND HE CAN GET INTO TECHNICAL, UH, DETAILS THAT WE NEED TO GET INTO.
UM, COUNCILMAN WATERSON, YOU, YOU'D ASK FOR SOME MAJOR ASSUMPTIONS.
YEAH, I SAW THOSE IN THE BACKGROUND.
AND THEN WE HAD THE APPENDIX ATTACHED AS WELL FOR ALL THE DIFFERENT OPTIONS THAT YOU'RE GONNA SEE TODAY.
UM, PUBLIC WORKS COMMITTEE HAD, UM, ASKED FOR A DETAIL, THIS WAS JUST AFTER WE GOT EVERYTHING KIND OF WRAPPED UP FROM OUR PUBLIC WORKS COMMITTEE DISCUSSIONS, PUT ALL THE BACKUP INFORMATION.
I DIDN'T THINK WE WANTED TO GO THROUGH 150 SLIDES THIS AFTERNOON, SO, UH, WE ABBREVIATED SLIGHTLY.
UM, BUT JUST WANTED TO DO A REAL QUICK, UH, FOLLOW UP FROM LAST MEETING.
DID ANYBODY HAVE A, UH, QUESTION ON THE CAPITAL IMPROVEMENT PLAN, ANY OF THE PROJECTS OR ANYTHING THAT YOU WANT US TO FOLLOW UP ON AS WELL? IT WENT THROUGH THE CAPITAL IMPROVEMENTS.
I ASSUME NOT, OR I WOULD'VE HEARD SOMETHING, BUT, UM, IF IT COMES UP, WE'LL, WE'LL GO THROUGH WHATEVER YOU WOULD LIKE.
WASTEWATER BUILDING EXPANSION, YOU KNOW, MY THOUGHTS ON THAT ONE.
THAT'S THE ONLY ONE I I AM VERY WELL AWARE.
UM, SO I'LL JUST, I'LL GET US KICKED OFF FOR, UH, THE REST OF THE PRESENTATION.
UH, JUST GO BACK IN THE HISTORY OF THE, WHERE WE'RE AT NOW AND WHAT'S DRIVING THIS, UH, WATER WASTE WATER RATE STUDY.
UM, SO BACK IN THE LATE NINETIES, EARLY TWO THOUSANDS, EDMOND WAS LOOKING FOR WHERE ITS WATER SUPPLY WAS GONNA COME FROM AND, UM, BECAUSE WE WERE AT THE SAME CAPACITY WE WERE AT TODAY, AND THAT'S 26 YEARS AGO AT THIS POINT.
AND, UM, ULTIMATELY WE LANDED ON BUILDING A PIPELINE TO OKLAHOMA CITY AND, UM, PURCHASING OUR WATER FROM THEM ALL THROUGHOUT THE TWO THOUSANDS, THE TERMS KEPT CHANGING FROM OUR PURCHASE AGREEMENT GOT LESS AND LESS FAVORABLE.
AND WHEN WE NEEDED IN THE EARLY, UH, 20 11, 20 12 DURING THE BIG DROUGHT, UM, THEY WERE SIMPLY TELLING US, WE DON'T HAVE WATER.
YOU CAN GET IT FROM NINE O'CLOCK IN THE MORNING UNTIL 11, AND THEN YOU GOTTA SHUT IT BACK OFF.
AND THEN, YOU KNOW, SO ON AND ON WHEN WE NEEDED THE WATER, WE COULD NOT GET IT.
UM, PLANNING WAS ALREADY UNDERWAY BACK IN 2009 TO FIND OUR NEXT WATER SUPPLY AND, AND BE IN CONTROL.
AND THAT'S WHAT COUNCIL AND CITIZENS GROUP HAD SAID IS, WE WANT LOCAL CONTROL OVER OUR WATER SUPPLY AND OUR CONTROL IS OUR FUTURE.
AND THAT, THAT'S EVERY CITY IN AMERICA
[00:30:01]
RIGHT NOW, WHETHER YOU'RE LOOKING AT CORPUS CHRISTI WHERE, YOU KNOW, THEY'RE JUST FLAT GONNA BE OUTTA WATER IN A COUPLE MONTHS, UM, 'CAUSE THE RESERVOIRS ARE RUNNING DRY AND THIS, IT'S, IT'S HAPPENING ALL OVER, ALL OVER THE COUNTRY.SO NOT, NOT UNIQUE, WE'VE GOT WATER, WE JUST GOTTA BE ABLE TO GET OUTTA THE LAKE AND ACTUALLY PROCESS IT.
SO, UM, EDMOND IS UNIQUE IN THAT ASPECT IN THAT WE'VE GOT WATER READY.
UH, WE'RE ON THE, WE'RE ON THE END OF A 26 YEAR PLANNING HORIZON AT THIS POINT, AND 2013 WAS WHEN THIS PROJECT STARTED UNDERWAY.
SO BY NO MEANS DID WE COME IN, YOU KNOW, TWO YEARS AGO AND SAY, HEY, THIS WOULD BE A COOL PROJECT TO DO.
IT'S, IT'S REALLY SOMETHING THAT HAS TAKEN DECADES OF PLANNING IN MANY COUNCILS AND A WHOLE LOT OF HARD DISCUSSIONS.
BUT, UM, YOU KNOW, WE'RE, WE'RE AT THE POINT WHERE IT'S GETTING MORE AND MORE DIFFICULT THROUGH THE WINTER MONTHS JUST TO BE ABLE TO PROVIDE WATER TO OUR CUSTOMERS SO THAT WE CAN MAINTAIN A PLANT THAT WE'VE GOTTA TAKE FULLY OFFLINE JUST TO CLEAN AND PUT IT BACK IN SERVICE AND HOPEFULLY GET THROUGH THE SUMMER MONTHS.
SO NOT NO SCARE TACTICS, IT'S, IT'S JUST PURE FACTS.
AND, UH, THAT'S WHAT WE WANT TO PRESENT TODAY IS JUST WHERE WE'RE AT AND HOW WE'RE GONNA GET THIS, UH, CAPITAL IMPROVEMENT PLAN FOR THE WATER WASTEWATER SYSTEM.
NOT, NOT TO BE CONFUSED WITH THE CIP SALES TAX FUNDS.
SO, UM, I THINK WITH THAT I'LL TURN IT OVER TO JASON AND LET HIM GO THROUGH THE RIGHT STUDY.
MAYOR COUNCIL, MY NAME IS JASON GRAHAM.
I'M VICE PRESIDENT WITH WILLAN FINANCIAL SERVICES.
UH, WE'RE BASED IN PLANO, TEXAS.
UH, WE HAVE BEEN WORKING WITH YOU ON WATER AND WASTEWATER RATES NOW FOR A NUMBER OF YEARS.
UH, TODAY WE'VE GOT BACKGROUND ON THE RATE, MOST RECENT RATE STUDY THAT WE'VE COMPLETED, INCLUDING FOUR DIFFERENT OPTIONS FOR YOUR CONSIDERATION.
UH, WE HAVE MET WITH THE, UH, PUBLIC WORKS COMMITTEE, UM, A COUPLE OF WEEKS AGO.
THIS HAS BEEN DISCUSSED I KNOW, AT A NUMBER OF LEVELS.
UM, HOWEVER, AT ANY POINT WITH ANY QUESTIONS, UH, PLEASE FEEL FREE TO, UH, JUMP IN.
UM, I ALSO HAVE ALEX HOVI, UM, WHO PERFORMED MUCH OF THE ANALYSIS ON THIS, UM, HERE WITH ME TODAY.
UM, IF WE NEED TO GET INTO THE MODEL OF GOING THROUGH ANY PARTICULAR DETAIL, JUST BEFORE YOU START, JUST SO THE PUBLIC'S AWARE, WE'VE HAD MORE THAN ONE PUBLIC WORKS COMMITTEE MEETING.
YOU'D MENTIONED WE HAD ONE TWO WEEKS AGO.
THERE, THERE HAVE BEEN MULTIPLE PUBLIC MEETINGS, UM, IN, IN WHICH WE'VE, UH, DISCUSSED AND PRESENTED, COME UP WITH, UM, DIFFERENT ALTERNATIVES, UH, DIFFERENT SCENARIOS TO LOOK AT, UM, AND HAVE CONTINUED TO WORK THROUGH THIS AS A PROCESS.
SO, UM, OUR LAST COMPLETED RATE STUDY FOR YOU WAS IN 2022.
THE ACCOUNT GROWTH, UH, HAS BEEN NOMINALLY HIGHER THAN WE ANTICIPATED OR THAT WE, UM, ESTIMATED AS PART OF THAT RATE STUDY.
UM, HOWEVER, THE BILLING UNIT GROWTH HAS BEEN NOMINALLY LESS, AND SO WE'LL HAVE A CHART HERE LATER IN THE PRESENTATION, WHICH IS MATERIAL THAT ON AVERAGE, UH, YOUR PER ACCOUNT ON A PER ACCOUNT BASIS, UM, YOUR, YOUR CONSUMERS ARE USING LESS WATER SERVICES SLIGHTLY, BUT IT'S A TREND THAT'S NOTICEABLE AND IT'S MATERIAL, UH, PARTICULARLY FROM THE PERSPECTIVE OF WHEN YOU'RE CHARGING FOR A SERVICE AT THE VOLUME LEVEL.
UM, WE HAVE TO TAKE THAT INTO ACCOUNT.
AND SO THAT IS, THAT'S ONE OF THE DIFFERENCES.
AGAIN, YOU'VE HAD ALLY HIGHER ACCOUNT GROWTH, WHICH IS GOOD FROM A REVENUE PERSPECTIVE, BUT LOWER BILLING UNIT GROWTH, WHICH IS NEGATIVE FROM A REVENUE PERSPECTIVE.
UM, IN ADDITION, INCREASED COST OF THE, OF THE CIP PROJECTS, THE WATER AND SEWER CIP PROJECTS AND OPERATING EXPENSES REQUIRE AN, UH, AN UPDATE TO THE LONG-TERM PLAN.
UH, HERE WE'VE GOT A LOT OF NUMBERS ON THE SLIDE, A LOT OF NUMBERS IN THIS PRESENTATION.
AND AGAIN, I I I WANT TO GO AT THE PACE THAT YOU NEED, AND SO FEEL FREE TO JUMP IN WITH QUESTIONS AT ANY POINT.
UH, RIGHT NOW YOU'VE GOT A WATER RATE AND A WASTEWATER RATE STRUCTURE THAT I WOULD CHARACTERIZE AS BEING, UH, FAIRLY COMMON.
YOU HAVE A, A BASE CHARGE, WHICH CUSTOMERS PAY ON A MONTHLY BASIS BASED ON THE SIZE OF METER THAT THEY HAVE.
YOU CAN SEE THAT THE MOST COMMON RESIDENTIAL METER IS THE FIVE EIGHTS, UH, THREE QUARTER INCH METER.
UH, THAT CUSTOMER WOULD PAY $17 AND 88 CENTS.
THAT INCLUDES THE FIRST THOUSAND GALLONS, UH, WITHIN, UH, THAT 1788.
AS SOON AS THEY SURPASSED THAT THOUSAND GALLONS, THEN THEY BEGIN TO PAY A VOLUME CHARGE.
CURRENTLY YOU HAVE THREE DIFFERENT VOLUME TIERS, UH, THOUSAND TO 10,000 GALLONS, THAT'S $8 AND 86 CENTS.
THE NEXT TIER BEING 11,000 TO 20,000 GALLONS.
UM, THAT'S 10 24 AND THEN 20,000 AND ABOVE AT 1279.
[00:35:01]
AGAIN, FAIRLY COMMON TO HAVE THESE TIERED, UM, STRUCTURES.FROM A WATER RATE PERSPECTIVE, IT DOES ENCOURAGE CONSERVATION AND IT ENCOURAGES SOME KIND OF PRICE SIGNAL BETWEEN THE AMOUNTS OF WATER THAT'S ACTUALLY BEING USED.
YOU'LL SEE THERE YOU ALSO HAVE WHOLESALE RATES, UH, FOR BOTH PEAKING AND, UH, NOT PEAKING CUSTOMERS.
UM, AND THEN ALSO A RATE FOR PEAKING ONLY.
UM, WHEN WE LOOK AT THE WASTEWATER SIDE, UH, FAIRLY COMMON AS WELL.
YOU'VE GOT, AGAIN, A BASE CHARGE, UH, THAT'S CHARGED BY THE MONTH, UM, REGARDLESS OF HOW MUCH VOLUME IS USED.
AND THEN A A, A FLAT, UM, UH, VOLUME CHARGE.
UH, WHEN WE LOOK AT IT'S PER THOUSAND GALLONS, IT'S $5 AND 66 CENTS.
UM, YOU DO USE A, UM, UM, THE, THE, THE RESIDENTIAL AGAIN THERE AS YOU SEE IS, UH, DERIVED FROM WINTER QUARTER AVERAGE WATER CONSUMPTION.
UH, SO WE HAVE TO MAKE AN ASSUMPTION.
AND YOUR BILLING SYSTEM MAKES AN ASSUMPTION ABOUT HOW MUCH SEWER SERVICE IS USED, AND THEY USE IT ON A WINTER QUARTER AVERAGE BASIS.
BILL COMPARISONS, UM, AS OF NOVEMBER OF 2025, UH, YOU CAN SEE HERE YOU'RE ON THE RELATIVE HIGH END OF THE SCALE.
THE SAMPLE AVERAGE FOR THESE VARIOUS CITIES IS $107 AND 15 CENTS.
THIS IS FOR AN 8,000 GALLON WATER AND 5,000 GALLON WINTER QUARTER AVERAGE WASTEWATER BILL.
RIGHT NOW, YOUR CUSTOMER FOR THAT LEVEL OF SERVICE WOULD PAY $131 AND 75 CENTS.
AGAIN, WITH THE, UM, THE SAMPLE AVERAGE HERE BEING 1 0 7 15, UH, I WILL SAY THAT, YOU KNOW, AGAIN, THIS IS NOVEMBER, 2025 RATES.
UM, SOME OF THESE MAY HAVE GONE UP IN THE, IN THE INTERIM.
UM, HOWEVER YOU'RE IN, IN ANY SORT OF SCENARIO HERE, YOU'RE GONNA BE ON THE RELATIVELY HIGH END OF THIS SPECTRUM AND EXPLAIN TO THE PUBLIC AND TO THE COUNCIL WHY WE ARE AND WHY SOME ARE LOWER.
AND THE TROUBLES THEY HAVE WITH BEING LOWER.
THERE REALLY ARE NO APPLES TO APPLES COMPARISONS WHEN WE LOOK AT TOTAL WATER BILL.
UM, THERE ARE A LOT OF SYSTEMS THAT ARE QUITE FRANKLY BEHIND IN THEIR MAINTENANCE.
THEY HAVE NOT RECAPITALIZED, THEY HAVE NOT REINVESTED BACK INTO THEIR SYSTEM.
THEY'RE ABLE TO KEEP WATER RATES RELATIVELY LOW, UM, BUT THEY ARE NOT KEEPING UP WITH THE SYSTEM IN THE WAY THAT THEY REALLY OUGHT TO BE.
AND THEY'RE CERTAINLY NOT PLANNING FOR THE FUTURE IN THE WAY THAT EDMOND IS PLANNING FOR THE FUTURE.
IN THE CASE OF NORMAN, UH, A BIT OF AN OUTLIER HERE, IT ACTUALLY REQUIRES A VOTE AS A CITIZENRY TO, UM, INCREASE THEIR WATER AND THEIR WASTEWATER RATES.
WE DON'T, WE DON'T WORK IN NORMAN.
I, I CAN'T, UM, GIVE ANY KIND OF AN EDUCATED, UM, UH, OPINION ON, UH, THE, THE STATUS OF THEIR SYSTEM.
UH, BUT FUNDAMENTALLY THE, THE, UH, THE, THE COST OF PRODUCING OR PURCHASING WATER, UM, ACROSS THESE DIFFERENT REGIONS IS RELATIVELY STABLE.
UM, WHAT IT COSTS OKLAHOMA CITY OR NORMAN, OR EDMOND, UM, IS WITHIN A RANGE.
AND THAT RANGE IS RELATIVELY NARROW.
UH, SO WHEN IT COMES DOWN TO HOW THEY CHARGE THEIR CUSTOMERS, UM, IT REALLY COMES DOWN TO HOW MUCH ARE THEY REINVESTING BACK INTO THEIR SYSTEM.
THOSE THAT ARE REINVESTING SIGNIFICANTLY BACK INTO THE SYSTEM LOOKING FOR THE FORWARD TO THE FUTURE, GENERALLY SPEAKING, ARE ON THE HIGH END OF THIS KIND OF A COMPARISON.
THOSE THAT ARE NOT REINVESTING INTO THEIR SYSTEM, GENERALLY SPEAKING, ARE ON THE LOW END OF THIS KIND OF COMPARISON.
AND THERE ARE OTHER CASES AS WELL WHERE NOT JUST A SORT OF AN INDIRECT SUBSIDY, IF YOU WILL, BY NOT MAINTAINING THE SYSTEM.
UH, BUT THERE ARE SOME CASES IN WHICH THERE ARE ESSENTIALLY DIRECT SUBSIDIES THAT CAN COME IN A VARIETY OF DIFFERENT FORMS. IN SOME CITIES, YOU SEE A WHAT IS TYPICALLY CALLED A, A, AN INTERFUND TRANSFER OUT, UH, FROM THE UTILITY FUNDS TO PAY FOR THE SERVICES THAT THE GENERAL FUND OFFERS TO THOSE, UM, THOSE UTILITY FUNDS.
THINGS LIKE HUMAN RESOURCES, SERVICES, FINANCIAL SERVICES, THOSE KINDS OF THINGS.
UM, IN THE SYSTEMS THAT HAVE THE RELATIVELY LOW RATES, GENERALLY SPEAKING, THEY'RE NOT MAKING THAT TRANSFER BACK INTO THE GENERAL FUND.
AND SO THERE'S A LOT OF DIFFERENT REASONS WHY THAT CAN HAPPEN, WHY YOU CAN GET, YOU KNOW, THE DISCREPANCIES THAT YOU SEE ON, ON THIS CHART.
BUT I WILL SAY THAT GENERALLY SPEAKING ON A PER THOUSAND GALLON BASIS, THERE'S NOT A REMARKABLE DIFFERENCE BETWEEN WHAT EDMOND PAYS VERSUS WHAT NORMAN PAYS.
THE QUESTION IS HOW ARE THEY DISTRIBUTING THOSE COSTS AND HOW ARE THEY FUNDING THAT ON AN ANNUAL BASIS WITHIN THEIR FUNDS? I LIKE, I THINK I LIKE WHAT YOU SAID AT THE LAST PUBLIC WORKS, WHICH IS ALONG THOSE LINES, THERE'S ONLY ONE REASON SOMEBODY IS DRASTICALLY LOW WITH THEIR RATES SETTING IN MUNICIPALITIES, AND THAT'S BECAUSE THEY'RE NOT PUTTING BACK INTO, THERE'S, THERE'S A POINT, AND I, I DON'T WANT TO GET TOO AHEAD OF THE CART HERE, BUT WE, WE TALK ABOUT COST OF SERVICE AND IT'S BASED ON WATER
[00:40:01]
RESOURCES, FIVE YEAR BUDGET PROJECTIONS, AND IN ANY RATE SETTING, RATE MAKING METHODOLOGY.AND ONE OF THE THINGS THAT HURTS US, I THINK IS RECOGNIZING IT'S MORE ART THAN IT IS SCIENCE.
YOU HAD A STAT, I CAN'T REMEMBER IT EXACTLY, BUT LIKE EQUIPMENT AND MATERIALS ARE INFLATING AT A 60% RATE OVER A CERTAIN PERIOD OF TIME.
I MEAN, IT WAS PRETTY, IT WAS PRETTY SHOCKING.
I MEAN, I THINK WE RECOGNIZE THAT.
SO AS WE GO THROUGH THE RATE MAKING PART OF IT, WHEN YOU GET A CHANCE, SHOW US OR SHOW ME WHERE, IN MOST RATE MAKING WE HAVE A TREND FACTOR.
WE DEVELOP THINGS BECAUSE WE'RE LOOKING AT HISTORICALS, WE GOTTA BRING IT UP TO DATE, RIGHT? COST OF SERVICE IS BASED UPON NOW TO 2030.
SO SHOW ME HOW WE'RE CALCULATING THAT.
AND I KNOW IT'S HARD, UH, BECAUSE IT USUALLY OUTSTRIPS WHAT WE THINK CAN HAPPEN, BUT THAT'S A REALLY CRITICAL PART AS WE GO FORWARD.
NOT, NOT IN THE INITIAL, BECAUSE WE'LL BE ABLE TO, WE'LL, WE'LL KNOW AN EXACT AMOUNT FOR PLANT AND EQUIPMENT, BUT, BUT NOT IN IN THE O AND M PORTION OF IT.
THAT, AND THAT'S WHAT SEEMS TO GET AWAY FROM US.
I THINK AT LEAST, AND I WILL POINT THOSE OUT AS WE GO THROUGH THE SLIDES, UH, TO THE EXTENT THAT WE'VE GOT THAT LEVEL OF DETAIL IN THESE SLIDES, UM, THESE ARE GENERALLY SPEAKING A LITTLE BIT MORE ON THE SUMMARY LEVEL, BUT LET ME SPEAK TO THAT POINT.
UM, JUST AGAIN, SORT OF GENERALLY, UM, AS YOU POINT OUT, COUNCIL MEMBER, EVERY RATE STUDY AND EVERY RATE MAKING PROCESS IS A COMBINATION OF BOTH ART AND SCIENCE.
THERE ARE A NUMBER OF ASSUMPTIONS THAT THAT NEED TO BE USED NECESSARILY, UH, FOR THE WIDE VARIETY OF DIFFERENT ELEMENTS THAT BUILD INTO THE COST OF SERVICE.
UM, WE'VE PROVIDED WHAT WE FELT LIKE ARE THE, THE, THE MOST, UM, THE MOST SIGNIFICANT ASSUMPTIONS, UH, THAT GO INTO OUR MODEL.
UM, AND WE LOOK AT THIS FROM THE PERSPECTIVE OF, UH, IT IS INCUMBENT TO CONTINUALLY TAKE A LOOK AT THIS.
UM, GENERALLY SPEAKING FROM AN INFLATION PERSPECTIVE, THOSE THINGS THAT HAVE TRENDED TOWARDS INFLATION, WE HAVE ASSUMED THAT THOSE ARE GONNA CONTINUE AT RELATIVE INFLATION RATE.
THE LINE ITEMS THAT HAVE NOT TRENDED TOWARDS INFLATION, BUT IN MANY CASES TREND HIGHER THAN INFLATION.
UM, WE HAVE LOOKED AT THAT FROM THAT PERSPECTIVE AS WELL.
NOW, THERE'S OBVIOUSLY ALWAYS THE POSSIBILITY THAT THE TREND FROM THE PREVIOUS INCLUDED A, YOU KNOW, A SIGNIFICANT AMOUNT OF MAKEUP, IF YOU WILL.
AND TO THE EXTENT THAT THAT IS TRUE, AND THEN THAT GETS CARRIED FORWARD, THAT WILL REVEAL ITSELF THROUGH THE YEARS.
UM, AS YOU, AS YOU CONTINUALLY DO THESE KINDS OF RATE STUDIES, YOU LOOK AT THAT AND YOU LOOK AT THE TRENDS AND YOU, AND YOU COMPARE THE HISTORICAL TREND WITH A, WITH A, UH, AN ASSUMPTION FOR THE FUTURE.
UM, AND SO WE HAVE BROKEN IT DOWN ON A LINE ITEM BY LINE ITEM LEVEL.
UH, CERTAINLY HAPPY TO SHARE THAT OBVIOUSLY, UM, WITH THE COUNCIL, WITH THE COMMUNITY TO BE ABLE TO LOOK AND SEE, OKAY, WE CAN CALCULATE OUT EXACTLY WHAT IS THE PERCENTAGE ASSUMPTION IN EACH ONE OF THOSE.
UH, WE DO WANNA MAKE SURE THAT WE'RE BEING, UM, NOT TO SUGGEST THAT THE QUESTION PROMOTES ANYTHING OTHER THAN THIS, UH, WE, WE DO WANNA MAKE SURE THAT WE'RE BEING RELATIVELY CONSERVATIVE FROM AN EXPENDITURE STANDPOINT SO THAT WE CAN HAVE A RATE PLAN THAT, UM, WILL TO THE BEST OF OUR ABILITY MEET THE EXPENSES THAT COULD BE THERE.
UH, MOST OF WHICH WE THINK WILL BE THERE HOWEVER THEY ARE ASSUMPTIONS.
ALRIGHT, MOVING FORWARD WITH CUSTOMERS AND VOLUMES.
UM, AGAIN, SAME IDEA HERE THAT I JUST SPOKE ABOUT FROM A CUSTOMER AND VOLUME PERSPECTIVE.
BLUE IS WATER, GREEN IS WASTEWATER.
UM, YOU CAN SEE HERE THE TREND LINE HAS BEEN, UM, GENERALLY SPEAKING ABOUT 1.5%, UM, GROWTH IN BOTH OF THOSE, UM, CATEGORIES EACH YEAR.
WE HAVE CARRIED THAT THROUGH, UH, 550 NEW ACCOUNTS PER YEAR AS AN ASSUMPTION, UM, FOR BOTH WATER AND WASTEWATER.
AND AGAIN, THAT EQUATES OUT TO BE ABOUT FIVE 1.5% INCREASE OVER TIME FROM THE WATER CONSUMPTION STANDPOINT, THIS IS A LITTLE TRICKIER.
UM, GROWTH HAS A PRETTY GOOD, UH, VERY CLEAR, CONSISTENT TREAD TREND LINE.
YOU CAN SEE HERE THE WATER CONSUMPTION SIDE IS A LESS CONSISTENT TREND LINE WENT UP CONSISTENTLY BETWEEN 2020 AND 2023.
AND STARTING IN 24, IT WENT DOWN 25 BACK UP LAST 12 MONTHS THAT WE LOOKED AT WAS A LITTLE DOWN FROM 25.
UM, SO THIS IS, THIS IS AN ESTIMATE FOR SURE, UM, BUT WE'RE LOOKING AT 4.06 BILLION GALLONS, UH, FOR OUR TEST YEAR OF 2026.
AND THEN WE ESCALATE THAT IN EACH YEAR.
UH, FOR THE COURSE OF THE STUDY, YOU'LL NOTICE A FAIRLY SIGNIFICANT JUMP BETWEEN 27 AND 28, AND THAT IS DIRECTLY, UM, DUE TO THE LOGAN ONE PUMP STATION THAT'S EXPECTED TO COME ONLINE, UM,
[00:45:01]
IN THAT TIME PERIOD.AND SO THAT'S, THAT'S THE ONLY REASON WHY THAT, UM, YOU KNOW, DIFFERS FROM A, THE ROUGHLY 1.8% ON AN ANNUAL BASIS, UM, IS BECAUSE OF THAT ONE TIME JUMP BETWEEN 27 AND 28.
THIS IS THE CHART THAT, UH, THE TREND LINE ON A PER ACCOUNT BASIS THAT I TALKED ABOUT EARLIER.
AND AGAIN, ON AN ANNUAL BASIS, THIS GOES UP AND DOWN.
IT'S WEATHER RELATED OBVIOUSLY, BUT THE TREND THAT WE'VE SEEN SINCE 2000 AND AND NINE HERE IS YOU PEAKED FROM A RESIDENTIAL WATER CONSUMPTION AVERAGE USE OF 10,780 GALLONS IN 2012.
AND THAT HAS, WAS PRETTY STEADILY COME DOWN.
THE TROUGH WAS 2019 AT 6,852 GALLONS OF OUR TEST YEAR.
UM, IT'S BEEN TRENDING DOWN AT ABOUT 0.9% SINCE 2009.
THIS GETS OFFSET A LITTLE BIT BY YOUR GROWTH, BUT NOT ENTIRELY.
AND SO IT'S ONE OF THE ASPECTS THAT WE HAVE TO TAKE INTO ACCOUNT AS PART OF THE ASSUMPTIONS WITHIN THE, UH, WITHIN THE MODEL ITSELF.
NOW WE DON'T JUST CONTINUE ON DOWN AT 0.9%, ADD INFINITUM THERE, THERE WILL BE A POINT AT WHICH YOU GET TO A BASELINE LEVEL OF USE.
WE DON'T KNOW EXACTLY WHAT THAT IS.
UM, BUT AGAIN, WE'VE GOT BUILT INTO OUR MODEL A RECOGNITION THAT YOUR AVERAGE USE HAS DECREASED OVER TIME.
SO WHEN WE TALK ABOUT COST OF SERVICE BEFORE, BEFORE YOU GO ON, YES SIR, I'VE GOT A COUPLE OF QUESTIONS.
THE FIRST ONE IS BACK ON SLIDE 10, LET'S SEE IF I CAN GET BACK THERE.
THIS CLICKER IS A LITTLE FINICKY.
OKAY, WELL I DON'T NOW GO FORWARD HERE.
IT'S SLIDE 11 ON WHAT YOU'VE GOT.
UM, THIS IS SHOWING THE NUMBER OF WATER AND WASTEWATER ACCOUNTS, RIGHT? CORRECT.
HOW IS IT THAT WASTEWATER ACCOUNTS IS HIGHER THAN WATER ACCOUNTS? GREAT QUESTION.
UH, GENERALLY SPEAKING, THERE'S A COMBINATION OF THINGS THAT, THAT CAN TAKE PLACE HERE.
UM, YOU, YOU MAY HAVE SOME, UM, RESIDENTIAL WATER ACCOUNTS ON A SEPTIC SYSTEM THAT WOULDN'T HAVE A CONNECTION TO WASTEWATER MORE OFTEN.
THE CASE IS HOWEVER, WHERE YOU'VE GOT, UM, A, A NUMBER OF WATER USERS CONNECTED, UM, INTO A SINGLE METER, TAKE FOR INSTANCE, A A STRIP CENTER ESSENTIALLY.
UM, OFTENTIMES, UH, THOSE, UH, LANDLORDS ESSENTIALLY WILL HAVE EACH INDIVIDUAL TENANT PAY THEIR OWN WASTEWATER BILL, UM, BUT HAVE A MASTER METER FOR THE WATER SIDE.
IT'S, IT'S ALMOST WITHOUT FAIL THAT WE TEND TO SEE A, GENERALLY SPEAKING, A HIGHER NUMBER OF WASTEWATER ACCOUNTS VERSUS WATER ACCOUNTS.
AND AGAIN, IT'S, IT'S SLIGHT, BUT IT'S RIGHT COMMON.
UM, NOW GO A COUPLE OF SLIDES UP.
UM, AS YOU'RE PROJECTING OUT, I DIDN'T GO DIG INTO THE DATA THAT CHRIS HAD BACK THERE AND ALL THE APPENDICES, BUT, UM, CAN I ASSUME CORRECTLY THAT WHEN YOU LOOK AT FUTURE YEARS, WHEN WE'RE TALKING ABOUT THIS GOING OUT FROM HERE, THAT THE MODEL THAT YOU'RE USING IS PROJECTING SOME SET AMOUNT OF RESIDENTIAL GROWTH ON THE SYSTEM? YES.
JUST WANTED TO MAKE SURE THAT WE KNEW WHAT THAT WAS, UM, BECAUSE OBVIOUSLY THAT HAS, HAS A LOT TO DO WITH WHERE WE'RE HEADED AND, UM, YOU KNOW, ONE OF THE THINGS THAT WE'RE WELL AWARE OF IS THAT ISSUE BECAUSE THAT, THAT GROWTH, IF IT GETS OUT OF CONTROL THAT'S NOT BUILT INTO ANY OF THIS.
WE'RE NOT, WE'RE NOT PAYING FOR THAT TYPE OF GROWTH IN THE ANY, TO BE QUITE HONEST.
WE'RE NOT EVEN PAYING FOR THAT AMOUNT OF GROWTH WITH WHAT WE'RE DOING.
WE'VE GOTTA COME UP WITH A WAY TO FUND THAT ASIDE FROM WHAT WE'RE DUMPING ON ALL THE CURRENT RATE HOLDERS.
YES, THE ADDITIONAL ACCOUNTS HAVE OUR R TWOEDGED SWORD ESSENTIALLY.
UH, THEY DO BRING ADDITIONAL REVENUES OBVIOUSLY AND ADDITIONAL USE ASSUMING THAT YOU'VE GOT THE CAPACITY TO SERVE THEM.
UH, BUT IT ALSO DOES BRING ON ADDITIONAL COST.
AND SO THE, THE MODEL THAT WE HAVE DOES TAKE BOTH ENDS OF THAT INTO ACCOUNT.
WE ASSUME THE ADDITIONAL REVENUE THAT COMES ONLINE WITH 550 ACCOUNTS EACH YEAR, BUT WE'RE ALSO ASSUMING THE ADDITIONAL COST ASSOCIATED WITH IT.
ALRIGHT, SO, UM, THE TERM COST OF SERVICE IS BROUGHT UP EARLIER.
AND, AND FOR THOSE, UM, THAT HAVEN'T BEEN THROUGH THIS, UH, PERHAPS AS OFTEN, UM, COST OF SERVICE IS ESSENTIALLY WHAT
[00:50:01]
IT SOUNDS LIKE.IT'S WHAT IS THE COST THAT IS REQUIRED TO, UH, TO PROVIDE THE SERVICE TO THE COMMUNITY? UH, THE, THE COST OF SERVICE THAT, THAT WE HAVE BUILT INTO OUR MODEL WAS BASED ON THE WATER RESOURCES FIVE YEAR BUDGET PROJECTIONS FROM 26 TO 2030.
AGAIN, UM, WE'VE, WE'VE GOT THAT BUILT INTO THE MODEL, UM, AS PRESENTED TO US BEYOND 2030.
'CAUSE WE HAVE A 10 YEAR MODEL HERE.
UM, WE ARE ESCALATING ITEMS AGAIN AT A LINE ITEM LEVEL, BUT GENERALLY SPEAKING BETWEEN THREE AND 5%, UM, CERTAIN COSTS ESCALATE AT A FASTER PACE.
OTHERS ARE GENERALLY SPEAKING INFLATIONARY.
SOME ARE ATTACHED TO ACCOUNT GROWTH.
UM, AND AGAIN, WE JUST TAKE IT ON A LINE BY LINE BASIS, UM, WHICH IS INCLUDED IN THE APPENDIX.
UH, THE COST OF SERVICE IS INCREASING FASTER THAN WAS ORIGINALLY PRO PROJECTED IN OUR LAST RATE STUDY.
UM, AND THAT HAS A LARGE AMOUNT TO DO WITH THE AMOUNT OF CAPITAL PROJECTS THAT ARE ASSOCIATED.
UH, THE BIGGEST IMPACT ON THE COST OF SERVICE IS PRINCIPAL AND INTEREST ON NEW DEBT ISSUED TO FUND THOSE CIP PROJECTS.
WE'VE GOT TWO, UM, WE'VE GOT FOUR SCENARIOS FOR RATES, UM, BUT TWO DIFFERENT LOOKS AT THE CIP AND BECAUSE WE'RE NOBODY HAS CERTAINTY RIGHT NOW ON WHAT THE WASTEWATER OR THE WATER TREATMENT PLAN EXPANSION, I'M SORRY, WILL COST.
UM, WE'VE MODELED THIS UNDER TWO DIFFERENT, UH, SCENARIOS.
UH, MIDPOINT SCENARIO OF A TOTAL CAPITAL IMPROVEMENT PLAN OF 648.5 MILLION OVER THE NEXT FIVE YEARS AND AN UPPER END AT SEVEN 16.6 MILLION.
YOU'LL SEE HERE IN FUTURE SLIDES.
THE ONLY DIFFERENCE BETWEEN THOSE TWO IS THE FINAL COST OF WHAT THE WATER TREAT WATER TREATMENT PLANT COMES IN AT THE MIDPOINT, AS YOU SEE IN THE FOOTNOTE HERE, IS AT 325 MILLION FOR THAT PROJECT.
UH, THE REALITY WILL BE WHATEVER IT IS WHEN YOU ACTUALLY GET THAT PROJECT, UM, UNDER BID AND, AND, UM, SET A PRICE ON IT.
UM, THIS GIVES, SO THIS GIVES A BIT OF A RANGE FOR THOSE TWO DIFFERENT SCENARIOS.
AGAIN, ON THE WATER, CIP THESE ARE THE SPECIFIC PROJECTS THE LION'S SHARE IN THAT, UM, THAT W2 P UH, OH ONE C PLANT EXPANSION AT 353 AND A HALF MILLION ON THE MIDPOINT OR 421.6 MILLION ON THE UPPER END.
ALL OF THE OTHER SA UH, ALL OF THE OTHER COST ASSUMPTIONS FOR THE OTHER PROJECTS ARE THE SAME BETWEEN ALL OF THESE SCENARIOS.
SO WHEN WE TALK ABOUT, UH, THE, THE MIDPOINT VERSUS UPPER END, THE ONLY THING THAT CHANGES IS THE WATER TREATMENT PLANT EXPANSION.
WASTEWATER, CIP IS IDENTICAL FOR ALL SCENARIOS.
UM, 172.9 UH, MILLION FOR THE VARIOUS PROJECTS THAT YOU SEE THERE.
UM, AGAIN, A VARIETY OF DIFFERENT PROJECTS.
THE LARGEST BEING THE EAST EDMOND WA UH, WASTEWATER CONVEYANCE SYSTEM AT 34.7 MILLION.
AND THEN WE'VE GOT A LINE ITEM THERE, 69.2, BUT THAT'S 20 DIFFERENT COLLECTION PROJECTS, TOTAL DEBT ISSUED, UM, OR, OR ENCUMBERED ESSENTIALLY, UH, UNDER THESE TWO DIFFERENT COST SCENARIOS, THE MIDPOINT AND THE UPPER END.
UM, UNFORTUNATELY BOTH OF THEM HAVE A FRONT LOADING OF THE COSTS, UH, FOR THE, UH, DEBT PRINCIPLE AND INTEREST.
UH, TOTAL NEW DEBT UNDER THE MIDPOINT AGAIN IS A 464.3 MILLION TOTAL NEW DEBT UNDER THE UPPER END OF 530 MILLION.
AND YOU CAN SEE THERE THE, THE SIGNIFICANT DIFFERENCE BEING HOW MUCH IS SOLD IN THE FIRST YEAR OF THE PLAN MIDPOINT IS 386.2 MILLION AND THE UPPER END BEING 500, UH, 454.3 MILLION.
THE REMAINING DEBT SOLD VARIES A LITTLE BIT YEAR BY YEAR BASED ON THE DIFFERENT SCENARIOS.
AND THAT'S BASED ON THE CASH FLOWS ESSENTIALLY THAT ARE AVAILABLE.
UH, NOT BECAUSE THE PROJECT COSTS HAVE CHANGED, BUT THE CASH FLOWS SIMPLY, WE HAVE ASSUMED THAT YOU WOULDN'T BE SPENDING THE DOLLARS IN DAY ONE, THAT YOU'RE EARNING SOME INTEREST ON THOSE, ON THOSE RETAINED DOLLARS THAT HAVE NOT YET BEEN SPENT.
AND SO, UM, IT, IT DOES HAVE A, YOU KNOW, SOME IMPACT ON, UH, THE OVERALL AMOUNT OF ISSUANCE THAT YOU'D HAVE OVER TIME.
SO, UH, FOUR, AGAIN, FOUR DIFFERENT RATE PLAN OPTIONS.
AND WHAT WE'RE LOOKING AT HERE ARE, UM, THREE THAT USE THE MIDPOINT SCENARIO FROM A COST PERSPECTIVE.
AND OPTION FOUR USES THE UPPER END FROM A COST PERSPECTIVE.
THESE ARE SIGNIFICANTLY DIFFERENT STRUCTURES OF WAYS OF GOING ABOUT TO COLLECT AT LEAST ONE, TWO, AND THREE ARE SIGNIFICANTLY DIFFERENT STRUCTURES OF WAYS TO GO ABOUT COLLECTING THE REVENUES YOU NEED TO PROVIDE THE SERVICE.
OPTION ONE, WE'RE WE'RE TERMING AS THE ONE-TIME MATERIAL BASE INCREASE.
AND WHAT THAT DOES IS IT ESSENTIALLY LOADS UP ALL OF THE ADDITIONAL COSTS INTO THE BASE CHARGE FOR BOTH RESIDENTIAL, NON-RESIDENTIAL, UH, BUT LOADS IT ALL INTO THE BASE CHARGE AND LEAVES THE VOLUME CHARGES CONSTANT OVER THE FIVE YEARS.
[00:55:01]
ALL OF THESE REQUIRE A DRAWDOWN FROM YOUR EXISTING RESERVES.THE FIRST TWO OPTIONS, OPTION ONE AND OPTION TWO REQUIRE ABOUT A $30 MILLION DRAWDOWN FROM YOUR EXISTING 72 70 $3 MILLION RESERVE OPTIONS.
THREE AND OPTIONS FOUR REQUIRE 51 TO $52 MILLION OF DRAW DOWN.
AND WE SHOWED THAT INTENTIONALLY IN ORDER TO BE ABLE TO GAIN SOME INSIGHT INTO WHAT THE DIFFERENT RATE PLANS WOULD BE REQUIRED, NOT ONLY UNDER THE DIFFERENT STRUCTURAL SCENARIOS OF OPTIONS 1, 2, 3, AND FOUR, BUT ALSO UNDER THE TWO DIFFERENT CIP SCENARIOS.
UM, AND THEN ALSO CONSIDERING WHAT THAT DOES TO YOUR OVERALL FUND BALANCE OVER TIME.
SO I THINK IT'S IMPORTANT TO MENTION TOO, THAT'S NOT THAT RESERVE FUND DRAW DOWN'S, NOT A SURPRISE.
THERE WAS INTENTIONAL BUILDUP OF RESERVES KNOWING THIS WAS COMING TO OFFSET SOME OF THE COST.
SO WE NEED TO DECIDE, YOU KNOW, WHAT WE WANNA DO AS A SORT OF A POLICY UP HERE.
BUT THAT WAS INTENTIONAL NOT A ANYBODY, CORRECT? CORRECT.
AND IS IS ONE OF THE REASONS WHY, UH, WHEN WE DO RE RATE PLANS, WE DO MULTI-YEAR RATE PLANS BECAUSE WE KNOW THAT, UM, COSTS ARE NOT, UH, STEADY.
UH, THEY GO UP AND DOWN CONSIDERABLY BASED ON CAPITAL PROJECTS, LARGELY SPEAKING.
UM, AND SO WHEN THERE IS AN OPPORTUNITY TO, UM, PUT SOME MONEY INTO RESERVES KNOWING THAT THERE'S GONNA BE A SIGNIFICANT EXPENSE COMING UP, WE OFTEN WILL HELP OUR, OUR COMMUNITIES DO THAT.
SO WE'VE BEEN SAVING UP FOR THIS WATER PLANT FOR A LITTLE BIT, RIGHT, EXACTLY.
OKAY, SO, UM, I'M SORRY, CAN YOU GO BACK ONE SLIDE? UM, SO THE, AGAIN, THE FOUR DIFFERENT OPTIONS, OPTION ONE BEING THAT ONE TIME MATERIAL BASE RATE INCREASE ALL OF THE INCREASE ASSOCIATED, WHICH IS THE BASE CHARGE.
OPTION TWO DOUBLES THE BASE CHARGE OVER TWO YEARS, BUT ALSO IMPACTS THE VOLUME CHARGES.
AND THEN OPTIONS THREE AND FOUR ARE WHAT I CAN, WHAT I WOULD CHARACTERIZE I GUESS AS THE MORE COMMON OR TYPICAL WHERE IT'S AN ACROSS THE BOARD INCREASE ON BOTH BASE CHARGE AND VOLUME CHARGES IN EACH YEAR OF THE PLAN.
AND SO AGAIN, THE ONLY DIFFERENCE BETWEEN THREE AND FOUR IS HOW MUCH CAPITAL IS BEING, UH, SPENT.
UM, OPTION THREE BEING THE MIDPOINT, OPTION FOUR BEING THE UPPER END.
UM, AND THEN THE DIFFERENCE ESSENTIALLY BETWEEN OPTIONS ONE AND TWO IS ARE YOU LOADING ALL OF THE COST INTO THE BASE CHARGE OR ARE YOU SPLITTING IT BETWEEN THE BASE CHARGE AND THE VOLUME CHARGES? SO AGAIN, THIS, THIS PLANNED DRAW DOWN OF EXISTING FUND BALANCE, YOU'RE AT JUST UNDER 72 MILLION TODAY AND WE WOULD EXPECT THAT TO GO DOWN.
AS YOU CAN SEE UNDER THE, THE, UM, THE BLUE AND GREEN OPTIONS ONE AND TWO.
UH, AGAIN, THESE ARE THE TWO THAT HAVE THE BIGGEST IMPACT ON THE BASE CHARGES, UH, BY ABOUT $30 MILLION, UH, DOWN TO 49, UM, UH, 49.8, UH, 49.3 MILLION.
AND THEN ALSO ON OPTIONS THREE AND FOUR DOWN TO 29 AND 28 BY 2030, I WILL SAY THAT OPTIONS TWO, THREE, AND FOUR ARE STABILIZED AS YOU CAN SEE, ESSENTIALLY, UH, BY THE END OF THIS FIVE YEAR PLAN OPTION ONE, BECAUSE THE ONLY INCREASE IN OPTION ONE IS IN YEAR ONE ON THE BASE CHARGE, UH, IT HAS A A BY YEAR SIX, YOU'RE GONNA HAVE TO DO SOMETHING ELSE IN ORDER TO STABILIZE THAT OUTFLOW FROM THE RESERVE FUND.
SO WE'VE MODELED IT OUT HERE OVER FIVE YEARS.
YOU CAN SEE THE TREND DOWN ON THE BLUE LINE AS OPTION ONE GOING FROM 71 TO 49 MILLION.
AND YOU RECOGNIZE THAT, UM, AGAIN, BY 2031, SOMETHING ELSE WOULD NEED TO BE DONE IN ORDER TO STABILIZE THAT.
SO JUST TO POINT OUT, 'CAUSE WE'VE BEEN IN FIVE HOURS OF THIS ALREADY, UH, ON THE PUBLIC WORKS COMMITTEE, TO ME, THE, UM, WE, WE NEED TO MAKE A POLICY DECISION ABOUT HOW MUCH RESERVES WE WANNA MAINTAIN TO COVER OPERATIONS.
I THINK OUR POLICY RIGHT NOW IS 120 DAYS.
IS THAT RIGHT? FOUR MONTHS? UH, 180 6 MONTHS FOR WATER.
UM, AND SO, UH, TO ME THE, THAT DECISION IS KIND OF AN INDEPENDENT VARIABLE FROM THE OTHER THINGS HERE.
SO IT'S ONE OF LIKE THREE DECISIONS THAT I'M, THAT I'M THINKING ABOUT.
IF YOU, IF YOU'RE BACK TO THAT TABLE, LIKE THE THREE COLUMNS ARE ALMOST THREE INDEPENDENT DECISIONS, RIGHT? IT'S LIKE NUMBER ONE, UM, WHAT WERE THE THREE COLUMNS? NUMBER ONE IS THE AMOUNT OF CAPITAL WE WANNA ASSUME, RIGHT? CORRECT.
NUMBER TWO IS HOW DO WE WANT, YEAH, THIS ONE, THE MIDDLE COLUMN IS HOW DO WE WANNA SPLIT BETWEEN BASE AND USAGE, CORRECT.
AND THEN NUMBER THREE IS, WHAT DO WE WANNA DO ABOUT THE RESERVE BALANCE? RIGHT? THAT'S RIGHT.
SO THOSE ARE KIND OF THREE, WE'LL GET INTO MORE DETAIL, BUT JUST TO, THIS IS HOW I'M THINKING ABOUT THIS.
THREE SORT OF DECISIONS THAT WE NEED TO MAKE THERE, AND THEN WE CAN MIX AND MATCH THOSE HOWEVER WE WANT, RIGHT? THIS IS FOUR SCENARIOS WITH A SORT OF PRESET MIX AND MATCH, RIGHT? BUT WE CAN, WE CAN DIAL THOSE THREE THINGS HOWEVER WE WANT TO,
[01:00:01]
WHATEVER OPTION, YOU KNOW, WE WANT TO GO WITH.SO THAT, THAT'S, THAT'S A GREAT POINT.
AND AGAIN, UM, RECOGNIZE WE'VE GOT A LOT OF DIFFERENT ALTERNATIVES ON THE TABLE HERE.
ONE OF THE REASONS IS BECAUSE THEY CAN BE MIXED AND MATCHED.
UH, THERE'S, THERE'S, THERE'S NO MAGIC TO A ONE TIME INCREASE IN THE BASE, OR WHETHER YOU STRETCH THAT OVER TWO YEARS OR THREE YEARS, OR HOW MUCH YOU LOAD INTO THE BASE VERSUS THE VOLUME.
THAT'S THE ART VERSUS THE SCIENCE COMPONENT OF IT.
AT THE END OF THE DAY, YOU NEED TO TARGET THE SAME AMOUNT OF MONEY AND REVENUE TO COVER THE COST OF SERVICE, WITH THE EXCEPTION IN THIS CASE OF WHAT'S THE BASELINE FUND BALANCE THAT YOU WANNA MAKE SURE THAT YOU MAINTAIN, RIGHT? UM, AND SO THAT IS, AND IT'S AN INDEPENDENT DECISION, RIGHT, OF THESE OTHERS.
UM, AND, AND AGAIN, WE CAN MODEL VARIOUS DIFFERENT SCENARIOS TO GET TO WHATEVER SET OF METRICS WE ARE TRYING TO HIT.
SO LONG AS OVER THE LONG RUN, IT STABILIZES THE FUND BALANCE AND COVERS THE COST OF SERVICE.
UH, SO YOUR CURRENT MINIMUM CHARGES, UM, AND AGAIN, THIS IS ONE OF THOSE WAYS THAT IT'S VERY DIFFICULT TO COMPARE, UM, DIFFERENT CITIES.
YOU'LL SEE HERE TWO, TWO DIFFERENT COLUMNS FOR EACH OF THE COMMUNITIES THAT WE, THAT WE TOOK A LOOK AT.
THE CURRENT MINIMUM CHARGE AND THEN THE NUMBER OF GALLONS IN THE BASE.
AND, AND THESE ARE BOTH SIGNIFICANT, UH, FROM EDMOND'S PERSPECTIVE.
UH, YOU CHARGE 1788 FOR YOUR TYPICAL RESIDENTIAL METER, UM, AND THEN ALSO INCLUDE A THOUSAND GALLONS IN THE BASE CHARGE.
UH, SO THE FIRST THOUSAND GALLONS OF USE IS INCLUDED IN THE 1788.
WHEN YOU LOOK AT TULSA FOR INSTANCE, UH, THEY HAVE A 7 36 BASE CHARGE FOR THE SAME METER SIZE, BUT THAT DOESN'T INCLUDE ANY GALLONS IN THE BASE.
AND SO THE FIRST GALLON, THEY START PAYING A VOLUME CHARGE FOR THE SAME IS TRUE FOR NICHOLS HILL AND MOORE AND STILLWATER, UH, AND NORMAN AT DIFFERENT BASE CHARGES, BUT THEY DON'T HAVE ANY GALLONS INCLUDED IN THE BASE.
YOU GET TO ENID AND THEY'VE GOT 2000 GALLONS INCLUDED IN THE BASE.
AND SO ANYTIME, MY, MY POINT BEING SIMPLY, ANYTIME YOU LOOK AT THESE KINDS OF COMPARISONS, YOU HAVE TO RECOGNIZE THAT SOME INCLUDE GALLONS, SOME DON'T INCLUDE GALLONS.
UM, THOSE THAT INCLUDE GALLONS INCLUDE DIFFERENT AMOUNTS OF GALLONS.
CHANGING THE BASE RATE DOES A COUPLE OF DIFFERENT THINGS.
UH, FIRST, AND, AND PROBABLY FOREMOST FROM A REVENUE PERSPECTIVE IS IT DOES STABILIZE REVENUES.
YOUR CUSTOMERS ARE PAYING THAT BASE CHARGE REGARDLESS OF HOW MUCH WATER IS USED, AND IT DOES ALLOW FOR SOME PROTECTION AGAINST THAT GENERALLY DECREASING TREND LINE.
IN THE AVERAGE AMOUNT OF WATER USED IN EVERY PARTICULAR HOUSEHOLD OR EVERY PARTICULAR BUSINESS WITHIN THE COMMUNITY.
UM, IT DOES TEND TO HAVE A GREATER IMPACT ON LOW VOLUME CUSTOMERS.
SO A, A SINGLE PERSON IN A HOUSEHOLD, UH, THAT DOESN'T DO A LOT OF OUTDOOR WATERING, THEY MIGHT USE TWO TO 3000 GALLONS IN A TYPICAL MONTH.
UM, WHEN ALL OF THE, OR WHEN, WHEN ANY OF THE DOLLARS ARE INCLUDED, UM, FOR A, YOU KNOW, INCREASE IN THE TOTAL BILL ARE INCLUDED IN THE BASE CHARGE FROM A PERCENTAGE PERSPECTIVE, IT WILL TEND TO HIT THOSE AT THE LOWER VOLUME USES AT THE HIGHEST LEVELS.
NOW, THAT DOESN'T MEAN THAT IT'S MORE DOLLARS.
THOSE THAT HAVE THE HIGHER BILLS WILL STILL PAY MORE DOLLARS AS A WHOLE, UM, AND IN AT LEASE OPTIONS TWO THROUGH FOUR, NOT UNDER OPTION ONE.
UH, SO JUST AGAIN, SOME DIFFERENT THINGS TO KIND OF KEEP IN MIND AS YOU LOOK AT THAT AND, AND RECOGNIZE THAT IN THESE COMPARISONS.
IT IS, AGAIN, IT'S JUST VERY DIFFICULT TO GET A TRUE APPLES TO APPLES.
SO, SORRY, ONE VOICEOVER ON THAT ONE TOO.
WE NEED TO ACKNOWLEDGE THAT THERE IS, IN OUR WATER SYSTEM, THERE IS A FIXED COMPONENT OF COST.
YES, IT'S INFRASTRUCTURE AND THEN THERE'S A VARIABLE COMPONENT OF COST, RIGHT? AND SO THERE IS A BASE RATE, THERE'S AN ALIGNMENT AND IDEAL ALIGNMENT, I THINK A BASE RATE TO FIXED INFRASTRUCTURE COST IN AN IDEAL WORLD.
SO THAT, SO THAT YOUR INFRASTRUCTURE'S COVERED REGARDLESS OF USAGE.
BUT THAT'S, THAT'S ANOTHER SORT OF KNOB TO DIAL IN RATE, RATE DESIGN I GUESS YOU WOULD CALL IT, IS HOW MUCH OF THAT DO WE WANNA COVER WITH BASE VERSUS JUST TYING IT TO USAGE? IF WE TIE TOO MUCH TO USAGE, THEN WE MAY OR MAY NOT COVER OUR RATE, OUR, OUR BASE COST, RIGHT? OUR FIXED COST.
FOR, FOR MANY YEARS IN RATE DESIGN THERE, THERE WAS, UM, SORT OF THIS IDEAL TARGET.
RARELY WAS IT HIT EXACTLY, BUT AN IDEAL TARGET OF YOU HAVE THE BASE, THE REVENUE FROM YOUR BASE CHARGES COVER YOUR FIXED COST AND THE REVENUE FROM YOUR VOLUME CHARGES COVER YOUR, YOUR VOLUMETRIC TYPE COSTS OR YOUR VARIABLE COSTS.
UM, GENERALLY SPEAKING, AS COMMUNITIES HAVE GONE TO THESE INVERTED BLOCK TIER SYSTEMS WHERE YOU PAY MORE FOR THE MORE YOU USE, UM, GENERALLY SPEAKING, THAT IS TO TRY AND ENCOURAGE CONSERVATION.
AND THAT GETS, MOVES A LITTLE BIT AWAY FROM THAT MODEL OF FIXED AND VARIABLE, UM, COST CENTERS AND REVENUE CENTERS.
AND SO, YOU KNOW, AGAIN, THERE'S NO ONE RIGHT
[01:05:01]
WAY TO DO IT, BUT IT SHOULD BE AN INTENTIONAL CHOICE OF THE COMMUNITY TO SAY HOW MUCH REVENUE STABILITY, HOW MUCH OF OUR FIXED COST DO WE WANT TO HAVE COVERED THROUGH THOSE BASE CHARGES VERSUS HOW MUCH DO WE WANNA RELY ON THE VOLUME CHARGES? THAT INCREASES RISK, BUT IT ALSO PROVIDES THE CUSTOMERS, UH, MORE FLEXIBILITY IN WHAT THEY'RE ACTUALLY PAYING OVER THE COURT.MORE, MORE CONTROL OVER WHAT THEY'RE PAYING FOR THE SERVICES AND AN INCENTIVE TO CONSERVE AND INCENTIVE TO CONSERVE.
SO IF WE WERE TO GO WITH OPTION ONE, IF WE WERE TO, IF WE WERE TO RAISE BASE CHARGES, WOULD IT GIVE US AN OPPORTUNITY TO POSSIBLE TO, TO LOWER CONSUMPTION CHARGES? AND THEN THAT WOULD FURTHER INCENTIVIZE PEOPLE WHO DO WANT TO CONSERVE, WHO DO WANT TO BE MINDFUL OF THEIR WATER USAGE, THEY WOULD HAVE.
SO NONE OF THESE ALTERNATIVES DO THAT.
UM, YOU WOULD HAVE TO INCREASE THE BASE CHARGES MORE THAN OPTION ONE OR TWO MM-HMM
IN ORDER TO HAVE ANY OFFSETTING EFFECT ON THE VOLUME RATES THEMSELVES.
AND SO IS THERE A WAY TO DO THAT? YES.
UM, THE QUESTION IS, HOW HIGH WOULD THAT BASE CHARGE NEED TO BE IN ORDER TO HAVE THE IMPACT THAT YOU'RE WANTING AT THE VOLUME LEVEL? AND SO THAT'S JUST SOME CONVERSATION THAT WE'D NEED TO HAVE AND SOME DIRECTION THAT WE'D NEED TO GET ABOUT HOW TO DESIGN.
AGAIN, AT THE END OF THE DAY, WE HAVE A TARGET NUMBER THAT WE'RE TRYING TO HIT.
AND SO THEN THE QUESTION, ONE OF THE INDEPENDENT QUESTIONS COMES IN AS HOW MUCH OF THAT DO YOU COLLECT THROUGH THE BASE CHARGES VERSUS HOW MUCH DO YOU COLLECT FOR THE, FROM THE VOLUME CHARGES? AND CONSIDER KEEPING IN CONSIDERATION HOW THAT IMPACTS DIFFERENT SY DIFFERENT DIFFERENT CUSTOMERS ACROSS THE SYSTEM BECAUSE IT WILL IMPACT DIFFERENT CUSTOMERS DIFFERENTLY, WHICH WE'LL SHOW HERE, UM, WITH SOME CHARTS IN JUST A MINUTE.
I WILL SAY THAT THE WASTEWATER RATE PLAN, UM, IS THE SAME PLAN ACROSS ALL FOUR OF OP, ALL FOUR OPTIONS.
SO WE'LL TALK A LOT ABOUT WATER, UH, A LOT ABOUT WATER COSTS, A LOT ABOUT WATER RATES.
UM, THE WASTEWATER RATE PLAN, AGAIN, BECAUSE WE DIDN'T HAVE AS MANY UNKNOWNS ASSOCIATED WITH IT.
UM, THE, THE CIP IS THE CIP, THERE'S NOT, UH, VARIOUS ALTERNATIVES OF COST ASSOCIATED WITH THE CIP.
UM, YOU CAN SEE HERE WHAT WE'VE DONE IS, UM, HAVE A WASTEWATER RATE PLAN THAT IS CONSTANT ACROSS ALL FOUR OPTIONS.
NOW, AGAIN, IT DOESN'T HAVE TO BE THAT WAY.
THAT'S THE WAY THAT WE'VE MODELED IT PRIMARILY TO TRY AND MAKE SURE THAT WE'RE FOCUSING ON THOSE THINGS THAT HAVE THE BIGGEST SWING RIGHT NOW, WHICH IS IN WATER.
UM, WASTEWATER CAN ALSO BE STRUCTURED TO HAVE ALL OF THE COSTS BUILT IN FROM THE BASE CHARGE AS OPPOSED TO VOLUME CHARGES.
UM, RIGHT NOW THE WASTEWATER PLAN ACROSS ALL FOUR OF THESE OPTIONS IS A, ESSENTIALLY A PERCENTAGE INCREASE ON BOTH BASE ON VOLUME CHARGES FOR A TYPICAL RESIDENTIAL.
THIS WASTEWATER PLAN WOULD BE IT.
UM, CURRENT IS 2359 FOR THE BASE CHARGE AND 5 66 PER THOUSAND GALLONS.
YOU COULD SEE THAT WOULD GO UP TO $25 FOR THE BASE CHARGE IN THE NEXT ITERATION AND $6 ON THE VOLUME CHARGE, 26, 56, 36, UM, IN, UH, YEAR TWO OF THE PLAN AND SO ON AND SO FORTH.
I DO WANT TO SAY ON THAT, UM, THERE'S A, THERE ARE A LOT OF DOLLARS ON THE CIP LINE ITEMS, SO JUST EVERYBODY KNOWS.
WE, I, I GIVE WELL THE ACTION AND ONE OF OUR PUBLIC WORKS COMMITTEE MEETING, UH, MEETINGS TO GIVE A LITTLE MORE DETAIL AND JUSTIFICATION FOR THE VARIOUS WASTEWATER PROJECTS.
AND SO, UH, THERE'S A LOT OF MONEY TIED UP IN THESE PROJECTS.
I THINK THERE'S, THERE'S GOOD JUSTIFICATION HERE.
YOU KNOW, THIS IS THE KIND OF THING WHERE YOU CAN PUNT IT DOWN THE ROAD A LITTLE BIT, BUT THEN WE'RE HAVING WASTEWATER PIPES BREAK AND, UM, WE DON'T HAVE CAPACITY IN CERTAIN AREAS OF OUR SYSTEM.
SO, UH, TO ME THERE WASN'T A LOT TO BE GAINED BY SHUFFLING AROUND THE WASTEWATER PART OF THIS.
AND THE OTHER ASPECT OF THAT IS, IS I TALKED ABOUT ON THAT WASTEWATER CIP CHART IS THAT, UM, CERTAINLY THERE ARE LARGER AND SMALLER PROJECTS, BUT THERE IS NO ONE, UM, YOU KNOW, VAST MAJORITY PROJECT LIKE THERE IS ON THE WATER SIDE.
MR. MAYOR, BEFORE WE GET INTO THE, UH, WATER, CAN WE TAKE A BREAK FOR 3 19, 3 20? I WOULD ENTERTAIN A MOTION TO TAKE A BREAK TILL THREE 20 PLEASE.
YEAH, I'VE GOT A MOTION TO SECOND CAST YOUR VOTE.
[01:10:01]
HOPEFULLY.WE ARE IN RECESS UNTIL THREE 20.
I WOULD ENTERTAIN A MOTION TO RECONVENE.
WE CAN'T CAST A VOTE IF YOU DON'T CLEAR IT.
MAYBE MR. MOORE, WOULD YOU LIKE TO TRY THIS ONE MORE TIME? THERE WE GO.
ALRIGHT, SO ONE OF THE ELEMENTS, UH, THAT WE'VE TAKEN A LOOK AT BASED ON THE FEEDBACK, UM, FROM THE COMMITTEE AND FROM THE STAFF IS TAKING A LOOK AT ADDING AN ADDITIONAL TIER INTO THE RESIDENTIAL, UM, RATE STRUCTURE.
RIGHT NOW YOU HAVE, UH, UH, ONE TO 10, 10 TO 2020 AND ABOVE WITH ALL OF THOSE BUILDING UP.
SO THE FIRST 10, FIRST 9,000 GALLONS, THE ONE TO 10,000, UM, ARE ALL AT THAT COST REGARDLESS OF HOW MANY TOTAL GALLONS ARE USED.
BETWEEN 10 AND 20 ARE ALL AT THAT PARTICULAR COST.
AND 20 AND ABOVE ARE ALL AT THE FINAL TIER COST.
UM, THE PROPOSED, UM, OR POTENTIAL I SHOULD SAY, UM, WATER TIER STRUCTURE WOULD ADD AN ADDITIONAL TIER ABOVE.
SO YOU'D STILL BE THE ONE TO 10, 10 TO 20, BUT THEN 20 TO 30 AND 30,000 AND ABOVE FROM THERE.
UM, FROM, BASED ON THE INFORMATION THAT WE HAVE, ABOUT 3% OF YOUR RESIDENTIAL CUSTOMERS USE MORE THAN 30,000 GALLONS PER MONTH.
UH, I I DON'T KNOW WHETHER ANY USE THEM USE MORE THAN 30,000 GALLONS IN EVERY MONTH OF THE YEAR.
UH, BUT AGAIN, ABOUT 3% OF THE BILLS, UH, HAVE USAGE OVER 30,000 GALLONS WITHIN A MONTH.
IF WE DID THAT AND ADDED THIS ADDITIONAL TIER, IT DOES A COUPLE OF DIFFERENT THINGS.
ONE, THE IDEA BEHIND IT IS TO TRY AND MAKE SURE THAT IT IS, UM, APPROPRIATELY COSTING THOSE THAT ARE USING A, A SIGNIFICANT AMOUNT OF WATER.
FROM A RESIDENTIAL PERSPECTIVE, AGAIN, YOUR AVERAGE RESIDENTIAL USES ABOUT 8,000 8,500.
SO THIS IS 30,000 GALLONS, IT'S WHAT IS THAT THREE X ESSENTIALLY MORE THAN THREE X OVER THE AVERAGE.
UM, THAT WOULD GENERATE SOMEWHERE BETWEEN TWO AND $300,000 A YEAR IN ADDITIONAL WATER REVENUES.
UH, OR IT WOULD ALLOW FOR IN THE FIRST YEAR OF ALL OF THESE DIFFERENT SCENARIOS, REDUCING WHAT WE'RE SHOWING YOU HERE BY 1%.
AND SO AGAIN, EITHER THE TWO TO $300,000 GETS ROLLED INTO, UM, THE AMOUNT THAT'S THEN NOT COMING OUT OF FUND BALANCE, UM, IN, IN EACH GIVEN YEAR, WHICH IS HOW WE'VE MODELED IT FOR THE PURPOSES OF DISCUSSION TODAY.
OR DECREASE IT IN THE FIRST YEAR OF THE PLAN, UH, BY 1% AND THEN KEEP THE SAME, UM, ADJUSTMENTS EACH YEAR AFTER THAT.
UM, WHICH AGAIN, WILL BE SLIGHTLY DIFFERENT TOTAL AMOUNTS BECAUSE YOU'RE STARTING OFF OF A SLIGHTLY SMALLER, UH, BASE.
SO I THINK THIS IS A SMART IDEA.
I THINK CREDIT TO AJ MAYBE FOR COMING UP WITH THE IDEA, BUT I THINK THIS MAKES A LOT OF SENSE.
SO YOU SAID YOU ASSUMED THE FIRST OPTION THERE IN THE BOTTOM BULLET FOR THE NUMBERS WE'RE LOOKING AT HERE? YES.
WE, WE ASSUMED THAT YOU'D ROLL THAT INTO REVENUES, NOT CHANGE THE RATE PLAN.
AND WHAT THAT WOULD MEAN IS THAT YOUR OVERALL REDUCTION IN FUND BALANCE WOULD BE LESS THAN IT WOULD OTHERWISE BE.
OH, I THINK I JUST TURNED IT OFF.
SO AGAIN, I'M GONNA SPEND A LITTLE BIT OF TIME ON EACH ONE OF THESE OPTIONS.
UM, IT ASSUMES A MIDPOINT FROM A CAPITAL IMPROVEMENT PLAN STANDPOINT AND IT'S A ONE-TIME MATERIAL BASE INCREASE.
UH, THE WATER, UM, BASE CHARGE, UH, FOR THE, FOR THE FIRST YEAR WOULD GO UP, UH, 25 92.
SO THE TOTAL BILL INCREASE WOULD BE 29.04, AGAIN, 25 92, AN INCREASE FOR THE WATER BASED CHARGE, NO INCREASE IN THE VOLUME CHARGE, AND THEN A DOLLAR 42 IN THE WASTEWATER BASED CHARGE AND A DOLLAR 70 IN THE WASTEWATER VOLUME CHARGE.
SO 29.04 TOTAL, UM, INCREASE IN THE MONTHLY BILL FOR, UM, UH, FOR, UH, THE AVERAGE CUSTOMER.
THE SECOND, THIRD, AND FOURTH YEARS OF THE PLAN.
[01:15:01]
THE INCREASES THERE OF $3 AND 30 CENTS, $3 AND 50 CENTS, AND 3 71 IN THE YELLOW ARE ONLY DUE TO THE WASTEWATER BASE AND VOLUME INCREASES IN THE OUT YEARS OF THIS PLAN.AGAIN, NO FURTHER ADJUSTMENTS TO EITHER BASE OR VOLUME IN THE WATER SIDE, BUT A, AN ADJUSTMENT OF 25 92 ON THE BASE CHARGE OVER YEAR 1788 TODAY, UM, IN YEAR ONE OF THE PLAN, UH, YOU CAN SEE HERE THAT THIS BRINGS THE DAYS OF FUND BALANCE DOWN TO ABOUT 170 DAYS, UH, GRADUALLY BRINGS DOWN FROM YOUR EXISTING 3, 3 40 AGAIN AS A PLAN DRAW DOWN, UH, TO TWO 50, TO 2 0 6, TO 180 8 AND TO ONE 70.
OBVIOUSLY THE PROJECTIONS OF WHAT THAT EXACT FUND BALANCE WILL BE FOUR OR FIVE YEARS OUT, UH, GETS FUZZIER WITH EACH YEAR.
UH, THESE ARE PROJECTIONS, THEY'RE ESTIMATES BASED ON THE ACTUAL COSTS, UM, AND THE ACTUAL VOLUMES, UH, AND, AND CUSTOMERS USED.
NOW, I WILL SAY THAT FOR THIS, UH, FOR THIS ADDITIONAL TIER PIECE, UM, WE HAVE ASSUMED THAT YOUR CUSTOMERS WOULD CONTINUE TO USE WATER IN THE SAME WAY THAT THEY HAVE EXISTED TO, THAT THEY HAVE CURRENTLY USED WATER.
UM, AND THAT THOSE THAT ARE USING OVER 30,000 GALLONS ARE STILL GONNA USE OVER 30,000 GALLONS, BUT THEY'RE GONNA PAY A HIGHER COST FOR IT.
ANYTIME YOU START CHANGING TIERS OR CHANGING STRUCTURE, UH, THERE'S A POSSIBILITY THAT YOUR CUSTOMERS WILL HAVE A REACTION TO THAT IN SOME WAY, SHAPE, OR FORM.
AND SO IT'S POSSIBLE THAT SOME OF THOSE THAT ARE NOW PAYING A HIGHER PRICE FOR OVER 30,000 GALLONS RECOGNIZE IT AND THEY START BACKING OFF OF THEIR USE.
TO SOME EXTENT THAT'S A POSITIVE FROM A CONSERVATION STANDPOINT, OBVIOUSLY, BUT IT'S A NEGATIVE FROM A REVENUE STANDPOINT.
AND SO JUST SOMETHING TO TAKE INTO CONSIDERATION.
ANYTIME YOU'RE TURNING THOSE DIALS ESSENTIALLY IN WAYS THAT FUNDAMENTALLY VARY FROM THE WAY THAT PEOPLE HAVE BEEN CHARGED IN THE PAST, IT CAN HAVE AN IMPACT.
THAT'S HARD TO, UH, PUT YOUR FINGER ON EXACTLY WHAT THAT'S GONNA BE.
WE DON'T THINK IT WOULD BE HUGE.
AGAIN, IT'S ONLY 3% OF YOUR USE IN THE FIRST PLACE, BUT AGAIN, IT DOES LOOK TO ALIGN THE COST WITH THOSE THAT ARE CAUSING THE COST.
AGAIN, A LOT OF NUMBERS ON THIS SLIDE, BUT THIS IS ESSENTIALLY THE ENTIRE RATE PLAN.
UM, YOUR CURRENT IN THE FIRST COLUMN THERE, I'LL FOCUS ON THE TOP LINE OF THAT.
THIS IS YOUR TYPICAL RESIDENTIAL 1788 FOR THE BASE CHARGE THAT WOULD GO UP TO 43 80.
THE VOLUME CHARGES WOULD STAY THE SAME WITH THE EXCEPTION OF HAVING THAT ADDITIONAL TIER OVER 30,000 GALLONS.
SO THE FIRST, YOU KNOW, ONE TO 10,000 GALLON TIER 8 86 THROUGHOUT THE ENTIRETY OF THE PLAN.
SECOND TIER 10 24 THROUGHOUT THE ENTIRETY OF THE PLAN, SO ON AND SO FORTH.
AGAIN, THIS IS ALL ON THE WATER SIDE.
YOU CAN SEE HERE, START TO GET AN IDEA ABOUT THE WAY THAT THESE TYPES OF INCREASES CAN AFFECT DIFFERENT CUSTOMERS DIFFERENTLY.
YOU DON'T HAVE A LOT OF SIX OR EIGHT INCH WATER METERS, LIKE MOST UTILITIES DON'T.
UH, BUT RECOGNIZE THAT, YOU KNOW, THEIR COSTS WOULD GO UP FROM TODAY.
A SIX INCH METER IS PAYING 17, UH, $1,787 AND 88 CENTS.
WANT TO HELP YOU THOUGH, KIND OF PUT THAT IN CONTEXT.
SOMEBODY ON A SIX INCH METER IS TYPICALLY GETTING A WATER BILL IN THE HUNDREDS OF THOUSANDS OF DOLLARS A MONTH.
AND SO AN INCREASE OF, YOU KNOW, $2,500 SIGNIFICANT.
HOWEVER, IN THE SCHEME OF THINGS, WHEN YOU LOOK AT THEIR OVERALL BILL, IT'S A RELATIVELY SMALL PORTION OF THEIR OVERALL BILL.
TYPICALLY LOOKING AT THE IMPACT ON MONTHLY CHARGES, AGAIN, WE RUN THIS OUT A VARIETY OF DIFFERENT, UM, LOOKS.
A 5,000 GALLON USER FOR BOTH WATER AND WASTEWATER IS THE FIRST SECTION THERE.
AND 8,000 GALLON USER FOR BOTH, FOR, FOR 8,000 GALLONS OF WATER AND 5,000 GALLON WINTER QUARTER AVERAGE WASTEWATER USER IS THE SECOND SECTION.
AND THEN A 10,000 GALLON USER ON BOTH WATER AND WASTEWATER IN THE THIRD SECTION.
AND THE BOTTOM IS A 20,000 GALLON COMMERCIAL USER WITH A TWO INCH METER.
YOU CAN SEE HERE WE'VE RUN THIS IN A WAY THAT IDENTIFIES BOTH THE DOLLAR COST INCREASE IN EACH YEAR AS WELL AS THE PERCENTAGE.
AND YOU CAN BEGIN AGAIN TO REALLY SEE CHANGING STRUCTURES HAS A DIFFERENT IMPACT ON DIFFERENT CUSTOMERS.
THE COMMERCIAL STANDARD MONTHLY BILL WOULD GO FROM 5 76 95 UP TO 8 49 22.
THAT'S A 47% INCREASE BECAUSE OF THAT BASE CHARGE INCREASE ON THE WATER, MOSTLY LOOKING AT A 5,000 GALLON USER, IT GOES UP 28 0 4, THAT'S A 27.6% INCREASE AT THE 10,000 GALLON RESIDENTIAL USER.
17.3, UM, UH, 17.3%, $30 AND 73 CENTS.
SO AGAIN, MORE DOLLARS THAN THE 5,000 GALLON USER, BUT A LOWER PERCENTAGE, MOST OF THAT INCREASE OF THE 30 73 IS BUILT INTO THE, THE INCREASE IN THE WATER BASE CHARGE.
[01:20:01]
THOSE REALLY COMES TO, UH, THE, THE, UH, WASTEWATER VOLUME CHARGE, THE 10,000 GALLON USER BUYING MORE VOLUME THAN THE 5,000 GALLON USER.ALRIGHT, WE'RE GONNA RUN THROUGH THOSE SAME SLIDES ESSENTIALLY FOR EACH OF THESE OPTIONS, UH, TO KIND OF KEEP IN MIND.
AND THEN WE'VE GOT A SUMMARY SLIDE AT THE END OF THIS THAT COMPARES ALL FOUR.
SO OPTION TWO DOUBLES THE EXISTING BASE CHARGE OVER THE COURSE OF TWO YEARS, UM, AND THEN CONTINUES TO MAKE SOME MINOR ADJUSTMENTS TO BASE CHARGE AFTER THAT FOR WATER.
SO THE INCREASE IN THE BASE WATER BASE CHARGE IN YEAR ONE WOULD BE $7 AND 33 CENTS.
THIS IS FOR A, AGAIN, FOR A RESIDENTIAL, UM, UH, FIVE EIGHTHS INCH METER.
IT WOULD INCREASE BY 10 34 IN THE SECOND YEAR OF THE PLAN.
AND THEN 2 49 THIRD YEAR AND 76 CENTS IN THE THIRD YEAR OF THE PLAN.
THE WATER VOLUME, BASED ON HOW MUCH THEY'RE USING IN THIS 5,000 GALLON, EIGHT, 8,000 GALLON WATER, I'M SORRY, UM, SCENARIO WOULD GO UP BY 4 34 IN THE FIRST YEAR FOR 64 IN THE SECOND YEAR, 4 97 IN THE THIRD YEAR, AND THEN A DOLLAR 52 BY THE FOURTH YEAR.
YOU CAN SEE HERE THIS GETS DOWN TO PRETTY CLOSE TO THE SAME TOTAL DAYS OF FUND BALANCE.
UH, 1 72, 1 67, AND 1 68 BEING THE LAST THREE YEARS.
YOU CAN SEE THERE THAT BY THE END OF THIS PLAN, YOUR DAYS OF FUND BALANCE IS STABILIZED.
YOU'RE NOW GENERATING ENOUGH REVENUE THROUGH THE SYSTEM IN ORDER TO PAY ALL OF THE COSTS, AND WE WOULD EXPECT IT TO BE ABLE TO REMAIN STABILIZED WITH MODERATE ADJUSTMENTS THEREAFTER.
ALL RIGHT, THE ACTUAL, UM, UH, CHARGES FOR OPTION TWO, AGAIN, YOUR BASE CHARGE FOR YOUR RESIDENTIAL WOULD GO UP FROM 1788 TO 25, 21 IN THE FIRST YEAR, AND THEN TO 35 54 IN THE SECOND YEAR, 38 0 3 THE THIRD YEAR, AND 38 79 IN THE FOURTH YEAR.
YOU CAN SEE AGAIN THERE, WE HAVE MADE ADJUSTMENTS TO THE VOLUME CHARGES, 8 86 IN THE FIRST YEAR TO 9 48 FOR THE FIRST TIER.
AND YOU CAN SEE THE OTHER NUMBERS ON THE CHART THERE, HOW THAT INCREASES OVER TIME AS WELL.
THE IMPACT ON THE MONTHLY CHARGE FOR A RELATIVELY LOW USE OF 5,000 GALLONS, BOTH WATER AND WASTEWATER SERVICE, THEY GO FROM 1 0 5 18 UP BY, UP, UP BY $12 AND 92 CENTS.
AND YOU CAN SEE HERE THE PERCENTAGE INCREASES ARE MUCH MORE, UM, STABLE, UH, FOR THE RESIDENTIAL USERS OF, UH, RANGE BETWEEN 12.3 AND 10, UH, BECAUSE WE'RE AFFECTING BOTH THE BASE AND THE VOLUME IN A MORE HEAVILY ON THE BASE SIDE, BUT WE'RE ALSO AFFECTING THE VOLUME.
SO THOSE THAT USE MORE WILL END UP ALSO, UH, PAYING, YOU KNOW, AGAIN, UH, MORE IN DOLLARS THAN THE RELATIVELY MODEST DIFFERENCE IN THE FIRST, UH, OPTION.
A COMMERCIAL USER WOULD GO UP BY $98 AND 11 CENTS.
UH, THIS IS, AGAIN, FOR A 20,000 GALLON USER WITH A TWO INCH METER, THAT'S A 17% INCREASE.
AND AGAIN, YOU CAN SEE BY THE END OF THIS PLAN YOU'RE DOWN TO THREE TO 3.4%, 3.7%, DEPENDING UPON THE USE TYPE.
UM, AS THAT FUND BALANCE BECOMES STABILIZED, AND WE'VE GOT A RATE STRUCTURE THAT'S ACCURATELY REFLECTING THE FULL COST OF OPERATING THE SYSTEM AT THAT POINT, AND THE VAST MAJORITY OF THE NEW DEBT ONLINE BY THAT POINT AS WELL.
OPTION THREE, MIDPOINT UNIFORM, WHICH ESSENTIALLY IS THAT WE ARE, UM, LOOKING AT THE PERCENTAGE INCREASES IN THE BASE AND THE VOLUME SIMILARLY, AND WE'RE NOT LOADING A SIGNIFICANT PORTION OF THE INCREASE INTO THE BASE AS OPPOSED TO THE VOLUME.
YOU CAN SEE HERE THIS PLAN, AGAIN, OPTIONS THREE AND FOUR, DRAW DOWN MORE OF THE FUND BALANCE.
THIS IS ONE OF THOSE TWEAKS THAT YOU CAN MAKE AS WE GO ALONG ONE OF THE SEPARATE DECISION POINTS.
BUT THIS PLAN GETS DOWN TO 95, UH, DAYS OF FUND BALANCE FOR OPTION THREE.
AGAIN, IT BECOMES STABILIZED AFTER THIS, UM, AND IT STAYS ABOVE 90 THROUGH ALL 10 YEARS OF OUR, OF OUR PLAN.
WHEN YOU LOOK AT THIS, THE BASE CHARGE GOES FROM 1788 TO 2038 IN THE FIRST YEAR, 23, 24 IN THE SECOND 26, 49 IN THE THIRD, AND 30 20 IN THE FOURTH YEAR OF THE PLAN.
THE VOLUME CHARGES ALSO GO UP AT, UH, ESSENTIALLY THE SAME PACE, 8 86, 9 48, 10 14, 10 85 FOR THE FIRST TIER.
AND AGAIN, I WON'T, I WON'T BELABOR THE POINT BY READING OFF ALL THE NUMBERS ON THE CHART.
THE IMPACT ON BILLS 7.7% IN YEAR ONE FOR MOST OF THE, YOU KNOW, THAT'S ON THE, THE 5,000 GALLON USER, 7.6% ON THE 8,000
[01:25:01]
GALLON USER, AND 7.3% ON THE 10,000 GALLON USER.AND THEN ON THE COMMERCIAL USER, IT'S 8.6%.
AND THIS IS COMBINED BOTH WATER AND WASTEWATER WITH THE INCREASES FOR YOUR TYPICAL BILL OF THE 8,005,000 COMBINATION BEING AROUND, YOU KNOW, 9 96 FOR THE FIRST YEAR, 10 80 FOR THE SECOND 1172 AND 1273.
YOU'LL NOTE THAT THE INCREASES IN THE OUT YEARS ON OPTION THREE CONTINUE TO BE AT SEVEN 8%, UM, AS OPPOSED TO DROPPING DOWN TO THREE OR 4%, LARGELY BECAUSE THE FUND BALANCE DRAW DOWN AS WELL AS THE FACT THAT YOU'VE GOT SMALLER INCREASES IN THE FIRST COUPLE OF YEARS.
AND SO WE HAVE TO DRAW THAT OUT OVER THE COURSE OF THE ENTIRE PLAN AS OPPOSED TO FRONT LOADING IT, UM, LIKE THE OTHER TWO OPTIONS DID.
AND THEN FINALLY, THE UPPER END, AGAIN, THE DIFFERENCE BETWEEN THREE AND FOUR SIMPLY IS HOW MUCH DOES THE WATER TREATMENT PLANT COME IN AT, UM, WITH THREE BEING THE MIDPOINT AND FOUR BEING THE UPPER END.
AND YOU CAN SEE HERE THE INCREASES ON THE BASE CHARGE, UH, FOR THE SAME 8,000 GALLON 5,000 GALLON WASTEWATER USER.
3 22 IN THE FIRST YEAR, 3 84, 48, 5 29, AGAIN, GETS DOWN TO, UH, YOU KNOW, 95 DAYS OF FUND BALANCE RELATIVELY MODERATED AT THAT POINT, UM, WITH A, YOU KNOW, DRAW DOWN TO THE FUND BALANCE IN THE LAST YEAR OF $146,000.
LOOKING AT THE RATE PLAN ITSELF, AGAIN, SAME IDEA HERE.
THIS IS SIMPLY GENERATING MORE REVENUE THAN OPTION THREE BECAUSE THE ASSUMED COST OF THE CAPITAL PRO CAPITAL IMPROVEMENT PROJECTS ARE HIGHER, THE PERCENTAGE IN DOLLAR INCREASES RATHER THAN SEVEN TO $8 TEND TO BE NINE, 10, $11.
UM, AND THE PERCENTAGES AS WELL, 9.4% FOR THE, UH, 5,000 GALLON USER.
NINE AND A HALF PERCENT FOR THE 8,000 GALLON USER, 9% FOR THE 10 AND 10.8% FOR THE 20,000 GALLON COMMERCIAL USER.
OPTION FOUR, YOU'LL ALSO SEE THAT, UM, WE'VE CONTINUED THE RATE PLAN INCREASES BEING IN THAT NINE TO 10, UM, 11% RANGE, UH, IMPACT ON THE BILLS, BOTH WATER AND WASTEWATER ALL FOUR YEARS OF THE PLAN.
AGAIN, IT'S MORE STABILIZED OVER THE COURSE OF THE PLAN, LITTLE LESS, UM, FRONT LOADED, BUT IT DOES REQUIRE MORE OF A DRAW DOWN OF THE FUND BALANCE IN ORDER TO DO THAT.
THEN WHEN WE STACK ALL FOUR OF THESE UP AGAINST ONE ANOTHER, AGAIN, THIS IS FOR THAT SAME 8,000, WHICH IS AGAIN, YOUR, YOUR AVERAGE RESIDENTIAL CUSTOMER, 8,000 GALLONS OF WATER, 5,000 GALLONS OF WASTEWATER TODAY, 1 31 75, UM, OPTION ONE AND SORT OF THE TEAL OPTION TWO IN THE GREEN THREE AND FOUR IN THE GOLD.
AND, AND, UM, I'M NOT SURE WHAT DARK BLUE, I GUESS, UH, FOR OPTION FOUR, AND YOU CAN SEE THE DIFFERENCES THERE.
OPTION ONE IS A HIGHER IMPACT IN YEAR ONE, BUT THEN IT'S THE LOWEST IMPACT BY YEAR FOUR OF THE PLANT.
UM, OPTION FOUR IS ACTUALLY, OPTION THREE IS THE LOWEST IMPACT IN YEAR ONE.
UM, AND IT'S AT THE LIKE THIRD HIGHEST OR SECOND LOWEST IN, UH, BY 2030 AND VARIES BY YEAR.
SO AGAIN, A LOT OF DIFFERENT DIALS THAT CAN BE TURNED HERE.
WHERE DO YOU WANT YOUR FUND BALANCE TO BE? NUMBER OF DAYS GENERALLY SPEAKING.
UM, HOW DO YOU WANNA LOAD THIS ON FIXED VERSUS VARIABLE COSTS THAT YOU HAVE AND HOW DO YOU WANNA MATCH THAT UP OR ALIGN THAT WITH THE MONTHLY COST OR THE BASE CHARGE VERSUS THE VOLUME CHARGE FOR YOUR CUSTOMERS.
AND THEN ALSO WHAT ARE THE CAPITAL PROJECTS COME IN AT, UM, WHICH IS LESS OF A DECISION AND MORE OF A REACTION, BUT, UM, THERE'S PERHAPS SOME DECISIONS TO MAKE THERE AS WELL.
WITH THAT, I THINK, CHRIS, YOU GOT A COUPLE OF WRAP UPS, I THINK, UNLESS YOU HAD ANYTHING ELSE FOR JASON.
CAN YOU HEAR ME OKAY? I WON'T LEAVE THE DISCLAIMER UP THERE FOR YOU TO READ, BUT, UM, SO AFTER HEARING ALL THAT, A LOT OF OPTIONS TO CONSIDER, UM, GENERALLY WHEN WE TALKED WITH PUBLIC WORKS COMMITTEE, UM, COUNCILMAN WATERSON AND MOORE, UM, OPTIONS TWO AND THREE WERE MORE HEAVILY DEBATED.
UM, AND I'D SAY OPTION TWO WAS PROBABLY THE MOST DISCUSSED, BUT I'M NOT GONNA PUT WORDS IN ANYBODY'S MOUTH, UM, MA MAINLY BECAUSE OF THE MORE FIXED REVENUE AND THE, THE VARIATION.
[01:30:01]
ON AND SOMETHING THAT'S VERY IMPORTANT FOR EVERYBODY ON THE COMMITTEE AND, UM, THAT IS THE IMPACT TO OUR LOW INCOME HOUSEHOLDS AND WHAT ARE WE GONNA DO AND HOW ARE WE GONNA HELP THEM.UM, SO WE LOOKED AT CURRENT PROGRAMS THAT ARE ALREADY OUT THERE AND HOW WE COULD BETTER ASSIST THEM.
UH, EDMOND ELECTRIC ACTUALLY HAS THE, UH, LIHEAP, IT'S LOW INCOME ENERGY HOUSEHOLD ASSISTANCE PROGRAM.
I THINK I'M SAYING THAT RIGHT.
UM, IT PROVIDES A $10 42 CENTS CREDIT FOR THE CUSTOMER WHEN THEY'RE QUALIFIED.
THAT'S DONE THROUGH THE STATE.
THAT'S IF THEY'RE UTILIZING ASSISTANCE, THEY'VE GOT, THEY MEET THAT THRESHOLD AND THEY QUALIFY CONSISTENTLY.
UH, THAT WAS TWO TO 300 HOUSEHOLDS ROUGHLY.
UM, NOT ALL OF THEM ARE WATER, SO THERE'S SOME VARIATION, BUT, UH, THE RECOMMENDATION FROM A STAFF STANDPOINT WOULD BE TO MATCH THAT FOR, UH, WATER AND WASTEWATER AND KIND OF TAG ONTO AN EXISTING SYSTEM RATHER THAN, UH, COME UP WITH A WHOLE OTHER PROGRAM.
AND IF, IF THERE ARE ISSUES, STRUCTURAL ISSUES WITH THIS, THEN WE'RE, WE'RE GONNA HAVE TO EVALUATE IT AND SEE HOW IT AFFECTS EVERYBODY.
IT, IT IS NOT SOMETHING THAT NEEDS TO BE STATIC, BUT SOMETHING THAT WE EVALUATE, MAKE SURE THAT WE'RE TAKING CARE OF VULNERABLE HOUSEHOLDS.
WE'VE HEARD THAT VERY LOUD AND CLEAR FROM ALL OF YOU UP HERE.
UM, IT'S TALKING, TALKING TO ANYBODY THAT, THAT'S WHO WE WORRY ABOUT.
AND YOU'VE BEEN HEARD LOUD AND CLEAR.
I JUST WANNA MAKE SURE IF THAT'S BEING NOTICED HERE.
AND THEN ALSO THE HOPE CENTER, HOPE CENTER DOES DO, UM, OKAY.
UM, THAT WOULD ALSO, THAT WOULD ALSO INCLUDE QUALIFYING SENIORS.
UM, WELL, NOT, NOT JUST BECAUSE OF A SENIOR, BUT IF THEY ARE MEETING THAT THRESHOLD REQUIREMENT.
UM, WE PROVIDE FUNDING, UH, TO HOPE CENTER TO HELP, UH, HOUSEHOLDS THAT ARE IN NEED.
IT'S NOT AN ONGOING BILL ASSISTANCE, BUT IF THEY'VE HIT A HARD MONTH OR TWO AND, AND THEY, THEY WORK WITH THOSE CUSTOMERS AT E BEEN SPECIFICALLY, UH, CHRISTIE ACTUALLY PROVIDES SOME NUMBERS, AND I DON'T HAVE THEM IN FRONT OF ME, BUT, UM, IT IS EFFECTIVE.
AND THEN ALSO 2 1 1 SERVICES, UM, CUSTOMER SERVICE WILL ACTUALLY REFER THEM.
AND THAT'S A COMMUNITY RESOURCE WITH, UM, CHURCHES AND, UM, UNITED WAY.
IT'S A LOT OF COLLECTIVE EFFORTS.
SO THE COMMUNITY HELPING, UH, WHEN PEOPLE HAVE HARD TIMES.
UM, CURRENTLY WE FUND A 170,000 SPLIT BETWEEN WATER AND ELECTRIC FUND.
THE RECOMMENDATION WOULD BE TO FUND THE ASSISTANCE PROGRAM AND SPLIT IT BETWEEN ALL THE UTILITIES AND THEN, UM, AT WHATEVER FUNDING AMOUNT IS NEEDED.
UM, AND THAT WILL BE SOMETHING THAT COUNCIL SETS THAT NUMBER.
UM, YOU KNOW, OBVIOUSLY WE WANNA MAKE SURE WE'RE MAKING GOOD USE OF FUNDS, BUT ALSO THAT IT'S ACCOUNTED FOR IN OUR RATES.
UM, AND THEN REEVALUATE ANNUALLY WITH THE HOPE CENTER OR WHOEVER THE PARTNER AGENCY IS ON THAT TO MAKE SURE THAT NEEDS ARE BEING MET AND PEOPLE AREN'T FALLING ON HARD TIMES AND MAKING REALLY BAD DECISIONS OUT OF SOMETHING SO CRITICAL LIKE WATER.
SO, UM, YES, SIR, I WAS JUST GONNA ASK THE CITY MANAGER IF WE MIGHT BE ABLE TO ALLOCATE MORE TOWARDS SOME RATE ASSISTANCE DEPENDING ON WHERE WE ARE.
DON'T OVEREXPLAIN IT TO ME, BUT THAT'S GOOD ENOUGH.
WELL,
UM, NO, HE HAS LOTS OF WORDS, BUT WELL THEN JOIN ME THE NEXT TIME I MEET WITH HIM.
HE'S NOT YOU ONE, IT'S VERY, MAKE SURE WE CAN UNDERSTAND IT, BARRY.
NO, MAY, CAN I JUST SLIGHTLY THEN, UH, ELABORATE THAT, UH, OBVIOUSLY DEPENDING UPON, UH, WHATEVER OPTION THE COUNCIL MIGHT CHOOSE THAT MIGHT INFLUENCE YOUR DECISION MAKING ABOUT WHAT YOU'D WANT TO, UH, UH, DIVERT MORE FUNDING TO THAN LESS.
BUT THE SHORT ANSWER IS YES, IT'S PERFECTLY WITHIN THE, THE COUNCIL'S PREROGATIVE AND WE UNDERSTAND IT TO BE A PRIORITY TO FIND WAYS TO, TO FUND SOME KIND OF A PROGRAM THAT WOULD OFFSET ANY IMPACTS.
IT'S A LOT, LOT OF VARIATION, JUST LIKE THE RATES.
[01:35:01]
I DON'T, WE'LL STAY HERE.I I WILL GO AHEAD AND JUMP IN THAT I, OF COURSE, I HAVE CONCERN FOR ANYONE WHO MIGHT STRUGGLE FOR SOMETHING AS ESSENTIAL AS WATER.
IT'S LIKE, LIKE YOU SAID, BUT I ALSO, YOU KNOW, I'VE HEARD FROM PEOPLE WHO, IT'S NOT NECESSARILY A MATTER OF CHOOSING GROCERIES OR WATER, BUT I, I HEAR CONCERNS ABOUT OUR WATER RATES AND, UM, I THINK AN AVERAGE CITIZEN MAY NOT UNDERSTAND LIKE THE, THE INFRASTRUCTURE NEEDS WE HAVE, THE WAY THAT THE COUNCILS BEFORE US HAVE PLANNED FOR THE FUTURE.
AND I, I AGREE WITH THAT DECISION.
IT'S ESSENTIAL WATER IS A RESOURCE AND, UM, BUT I DO, I, I KIND OF BROUGHT IT UP EARLIER, BUT I UNDERSTAND THAT WHEN, UM, WHEN WE HAVE A LOT OF RAIN THAT IMPACTS HOW PEOPLE USE WATER.
UM, SO WHEN WE'RE LOOKING AT A CONSUMPTION BASED MODEL AS OPPOSED TO A SUBSCRIPTION BASED MODEL, THERE'S MORE VOLATILITY WHEN WE'RE RELYING ON CONSUMPTION BECAUSE THAT FLUCTUATES A LOT.
UM, SO I JUST, I DO WONDER WHAT IT MIGHT LOOK LIKE TO LOOK AT A SUBSCRIPTION BASED MODEL AND IF IT, IF AT SOME POINT WE COULD, UM, IF WE'RE USING RESERVES AND WE COULD EVENTUALLY MAYBE LOWER WATER RATES AS A WHOLE.
CAN I JUMP IN THERE? I, I THINK, UH, I OFFER THE SAME ANSWER I OFFERED COUNCILMAN MOORE A SECOND AGO.
YES, I BELIEVE YOU CAN DO THAT.
UH, AND AGAIN, I'LL ELABORATE BY SAYING I LIKE THE WAY THE GENTLEMAN PUT IT A FEW MINUTES AGO.
THERE ARE A LOT OF DIALS THAT YOU CAN TURN HERE, BUT I THINK YOU'RE RIGHT WHEN YOU POINT OUT THAT THIS CONTEMPLATES A BIT OF A, A SHIFT IN THE MODEL FOR HOW THE CITY WOULD GENERATE WATER REVENUE, AND I THINK IT'D BE, UH, POSSIBLE TO CONSIDER A RANGE OF SCENARIOS.
AND WE GAVE YOU FOUR OPTIONS, BUT THERE ARE PROBABLY 104 OPTIONS THAT WE COULD HAVE GONE THROUGH.
BUT IF YOU WOULD CONSIDER A, A SCENARIO WHERE, UM, WE WOULD TO COUNCILMAN WATERSTONE'S POINT COME UP WITH SOME POLICY, SOME COUNCIL POLICY GUIDANCE FOR WHAT THAT FUND BALANCE NEEDS TO LOOK LIKE IN THE WATER FUND, AND PROBABLY EVEN ALLOW FOR, UH, SOME VARIATION IN THAT POLICY DURING A PERIOD OF RAPID CAPITAL OR RAPID CAPITAL EXPANSION, UH, AS OPPOSED TO JUST, UH, UH, A MAINTENANCE PERIOD.
SO IF WE LOOK AT THAT IMPACT ON FUND BALANCE, AND IF THE COUNCIL WERE OF A MIND THAT YOU WERE INTERESTED IN THAT AND CHANGING THAT MODEL A LITTLE BIT, THEN WE PROBABLY COULD LOOK AT WAYS TO EVEN REDUCE SOME OF THOSE CONSUMPTION BASED TIERS.
THAT WOULD BE UNUSUAL, BUT IT WOULD BE AN OPTION THAT WOULD BE AVAILABLE TO YOU.
AND THEN I THINK, UM, THERE MIGHT BE EVEN ANOTHER, AN OPPORTUNITY TO LOOK CLOSER AT, UH, THOSE CONSUMPTION BASED TIERS AND THEN ASK IT AND ANSWER THE QUESTION BASICALLY AT, AND I'M NOT BEING CRITICAL, BUT WHEN I SAY THIS, BUT IS, IS 10,000 GALLONS THE, THE RIGHT, THE RIGHT CAP TO EACH ONE OF THOSE TIERS? MAY MAYBE THERE'S A CHANCE TO LOOK AT WHAT THE AVERAGE EDMOND, UH, HOUSEHOLD USES AND THEN BASE A TIER, YOU KNOW, OFF OF THAT.
BUT I THINK THE SHORT ANSWER IS IN AS MUCH AS THE COUNCIL MIGHT BE WILLING TO CHANGE THE MODEL, THEN YES, THERE ARE ABSOLUTELY SOME OPPORTUNITIES FOR US TO LOOK AT LOWERING RATES, UNDERSTANDING THAT'S GONNA HAVE AN IMPACT ON, UH, PROBABLY AN IMPACT ON FUND BALANCE AT THE END, BUT THAT MIGHT BE A, AN OKAY POLICY DETERMINATION YOU MAKE DURING A PERIOD OF CAPITAL EXPANSION AS OPPOSED TO, UH, WHEN WE'RE NOT BUILDING A, A LOT OF WATER INFRASTRUCTURE.
SO I THINK THOSE ARE AVAILABLE TO YOU.
UH, I'LL SAY THAT, YOU KNOW, WE'VE BUDGETED IN ALL FIVE YEARS OF THE CURRENT BUDGET FOR REEVALUATION OF THE RATES, AND IT'S SOMETHING THAT WE NEED TO TAKE A LOOK AT, NOT JUST THIS YEAR, BUT IT'S EVERY YEAR, AND MAKE SURE THAT WE'RE TRENDING IN THE RIGHT DIRECTION THEN TOWARDS COUNCIL'S POLICY.
AND I THINK US HELPING YOU UNDERSTAND AND YOU HELPING US UNDERSTAND WHAT, YOU KNOW, AS LONG AS WE'RE ON THE SAME PAGE, WE CAN GET THAT DIALED IN AT, AT, AT THE END OF THIS, WE NEED TO COLLECT X REVENUE TO MEET OUR DEBT COVERAGE REQUIREMENTS.
THAT'S WHERE WE'RE TRYING TO GET TO.
SO, YOU KNOW, WE'VE GOTTA HAVE CERTAIN AMOUNT OF CUSTOMERS WITH A CERTAIN AMOUNT OF REVENUE AND YOU KNOW, WHERE, WHERE THAT COMES FROM IF IT'S A HEAVY COMMERCIAL GROWTH OR, AND INDUSTRIAL, WHICH WOULD BE HIGHLY UNLIKELY.
UM, THERE'S, THERE'S A LOT OF WAYS TO GET THERE WHOLESALE, YOU KNOW, BUT WHATEVER IT IS, IT'S, IT'S WHERE WE'RE GETTING THE FUNDS FROM AND SINCE WE'RE SO, UH, HEAVILY RELIANT ON RESIDENTIAL, IT'S,
[01:40:02]
WE HAVE TO BE CAREFUL ABOUT, UM, I GUESS CHEAP WATER.UM, THAT'S WHAT'S HELPED KEEP OUR WATER SYSTEM SUSTAINED TO THIS POINT BECAUSE PEOPLE HAVE BECOME VERY SENSITIVE TO THE, THE, UH, PRICE POINT.
AND I'VE HEARD ABOUT IT FOR A LONG TIME.
UM, BUT IT'S ABSOLUTELY WORKED AS INTENDED BECAUSE WE WOULDN'T HAVE MADE IT ANOTHER 25 YEARS ON THE SAME PLANT THAT WE WERE OUTTA CAPACITY ON IF WE DID NOT START MAKING THOSE STRUCTURAL CHANGES A QUARTER OF A CENTURY AGO THAT WE'RE STILL ON THE SAME PLANT.
SO WE'VE MADE IT A LONG WAYS ON THIS 40-YEAR-OLD CAR.
UM, COUNCILMAN WATERSON AND I LIKE TO TALK ABOUT CARS, BUT IT'S, UM, YOU KNOW, WE'VE GOTTEN A LONG WAY.
I, I THINK THAT IT'S ABSOLUTELY SOMETHING THAT WE DO NEED TO LOOK AT, BUT US FINDING SOME POLICY POINTS THAT GET US THERE AND LEAD US DOWN THAT DIRECTION AND NOT BEING THIS ANALYSIS PARALYSIS.
WELL, AND I LIKE, I LIKE IT BECAUSE I, I THINK WE CAN DO SOME THINGS LIKE YOU SUGGESTED COUNCILMAN MOORE, BUT I THINK IT MEANS WE WANNA LOOK AT HARD GETTING SOME OF THAT MORE FIXED COSTS UPFRONT, IS THE WAY I SEE IT, BECAUSE THAT GIVES US A LITTLE MORE FLEXIBILITY.
I MEAN, I, I'M NOW CONVINCED, 'CAUSE YOU TOLD ME YOU'RE TOTALLY ON TOP OF ALL THE ART PART OF IT.
NO, YOU'RE ON TOP OF IT BECAUSE WE KNOW WE'RE GONNA BE A LITTLE BIT WRONG, BUT IF WE'RE LOOKING AT IT EVERY YEAR, THAT'S OKAY.
AND SO THEN IT'S NOT AS BIG AN EXPOSURE OF BEING OFF.
AND I THINK, I THINK IF WE, WE CAPTURE THAT AND, AND WHERE WE START TO, TO REBUILD THE FUND OR HURT IT LESS MAYBE IS A BETTER WAY TO GO BY GETTING MORE UPFRONT, THEN IT ALLOWS US TO HAVE OTHER OPTIONS LIKE MAGGIE, YOU AND BARRY ARE SUGGESTING AND AS WE GO FORWARD.
BUT, BUT IF WE PLAY THAT OUT TRYING TO TOO FAR TOO EQUAL, I, I THINK THAT'S MORE OF A RISK IN MY OPINION.
IT'S SOMETHING THAT WE'LL NEED TO KEEP EVALUATING FOR SURE.
UH, JUST A LITTLE SENSITIVITY ANALYSIS ON THE, AND UH, SOMETHING WE DISCUSSED AT PUBLIC WORKS COMMITTEE WAS WHAT DOES THIS LOOK LIKE? AND, YOU KNOW, WAS IT, UM, YOU KNOW, IF IF WE CUT A PROJECT OUT OF THE CAPITAL IMPROVEMENT PLAN, THE BY AND LARGE THE WATER PLANT PROJECT IS, IS THE DRIVER, UM, THE SIGNIFICANT DRIVER.
AND, AND THAT'S WHAT THIS IS SAYING.
GOT THE SUMMARY HERE AND JUST SO THAT WE HAD IT IN FRONT OF US HERE AT THE END, BUT THEN I WANT TO GO TO THE PROPOSED NEXT STEPS.
UM, SO ANY FOLLOW UP ITEMS FROM COUNSEL NOW THAT WE WANNA ADDRESS, UM, POTENTIALLY RECEIVE YOUR RECOMMENDATION, UM, ON WHAT YOU WOULD LIKE TO, LIKE US TO COME BACK WITH, UM, OR NOT.
AND THEN, UM, COUPLE OF OPTIONS PROPOSED MEETING IN APRIL FOR, FOR RATES, DEPENDING ON WHAT COUNCIL WANTS TO DO.
AND THEN HISTORICALLY WE'VE DONE THIS IN NOVEMBER, BUT WE'RE PROPOSING TO ALIGN IT WITH THE FISCAL YEAR, UH, BASED ON, UH, WHERE THIS IS TRENDING SO THAT WE DON'T, WE DON'T START EVEN FURTHER BEHIND, UH, WITH THE UPCOMING, UH, BIDDING OF THE WATER PLANT.
SO THAT'S A LOT OF DIFFERENT STEPS AND PROBABLY OUT OF ORDER, BUT THEY'RE ALL THERE.
UM, SO I'LL SIT DOWN AND LET YOU ALL DISCUSS UNLESS YOU HAVE QUESTIONS.
AND I, I THINK THERE'S MORE, UH, I THINK DIRECTIONS, SOME THINGS WE'D LIKE TO SEE.
I UNDERSTAND THAT THERE'S ALWAYS GONNA BE THESE NUANCES IN HOW WE COMPARE OURSELVES TO OTHER CITIES, BUT WHETHER WE LIKE IT OR NOT, THAT'S WHAT THE CITIZENS DO.
IT WAS SLIDE 22, IF YOU CAN RUN BACK UP TO IT.
AND WE HAD A WHOLE LOT OF CONVERSATION ABOUT ALL THE NUANCES AND THE DIFFERENCES AND YET IF I'M JOE CITIZEN AND I'M LOOKING AT THIS AND I'VE GOT ANY KIND OF MATH SKILLS AT ALL, I'M GONNA LOOK AT IT AND SAY, WELL, WHY CAN'T I COMPARE THIS ON 6,000 GALLONS WORTH OF USAGE? BECAUSE SOMETIMES A THOUSAND IS IN THE BASE, SOMETIMES 1500, SOMETIMES 2000.
SO WHAT IS THE, THE MINIMUM, THE BASE CHARGE PLUS THE
[01:45:01]
COST OF 6,000 GALLONS? THEN WE CAN TALK ABOUT THE REAL DIFFERENCES HERE, WHICH IS NORMAN, WHICH IS HEAVILY UNDER, UH, SUBSIDIZING THE COST OF WATER, WHATEVER THE OTHER ONES ARE AS WELL, BECAUSE THAT'S WHAT, THAT'S WHAT PEOPLE LOOK AT.THEY WANNA KNOW, WELL, YOU KNOW, GEE, WE'RE NOW MORE THAN ENID, WE'RE ALMOST AS AS BAD AS MIDWEST CITY, EXCEPT THAT MIDWEST CITY, TO BE QUITE HONEST, INCLUDES 2000 GALLONS.
WHEN YOU GET A NUMBER THAT PEOPLE CAN LOOK AT, YOU CAN TALK ABOUT IT.
IT'S KIND OF LIKE IF YOU JUST STRIP OUT THIS BASE CHARGE AND YOU IGNORE THE COST OF THE WATER, THAT OPTION ONE LOOKS HORRIBLE.
AND YET WHEN YOU LOOK AT THE NEXT FOUR YEARS WHAT IT COSTS, YOU'RE TALKING ABOUT A DIFFERENCE ROUGHLY OF $662 PER, YOU KNOW, WHEN YOU ROLL IT ALL UP FOR THE FOUR YEAR NUMBER 6 62 VERSUS 6 62 VERSUS 6 33 VERSUS 6 65, THERE'S NOT A LOT OF DIFFERENCE THERE WHEN YOU DIVIDE ALL THAT OUT.
BUT IF WE DON'T GET THE NUMBERS AND TALK ABOUT IT IN A WAY THAT MAKES SENSE, SOME OF THESE OPTIONS JUST LOOK A WHOLE LOT WORSE THAN THEY MIGHT BE.
AND I DON'T LIKE OPTION ONE AT ALL.
I DON'T THINK ANYBODY DOES TO BE QUITE HONEST, BECAUSE IT SURPRISES THE WORLD AND SAYS, OKAY, HERE'S YOUR NEW WATER BILL AND OH, BY THE WAY, THE BASE JUST MORE THAN DOUBLED.
RIGHT? BUT IN THE LONG RUN, WHEN YOU LOOK AT THE NEXT FOUR FISCAL YEARS, DOES IT REALLY MAKE A LOT OF DIFFERENCE? I WANNA BE ABLE TO TALK ABOUT WHAT THAT DIFFERENCE IS TO THE AVERAGE CITIZEN WHO'S SAYING, WHAT'S REALLY THE IMPACT ON MY BILL AND HOW DOES THAT COMPARE? BECAUSE I MEAN, I THINK ALL OF US HAVE HEARD OKLAHOMA CITY IS GETTING READY TO BUILD A NEW PIPELINE FROM SOUTHEAST OKLAHOMA TO OKLAHOMA CITY TO GET MORE WATER.
AND YOU DON'T THINK THAT'S NOT GONNA INCREASE THEIR RATES, WHICH OH, BY THE WAY, WILL INCREASE OUR RATES IF WE HAVE TO BUY FROM THEM.
I THINK WE ALL GET THAT, RIGHT? IF WE HAVE TO KEEP BUYING FROM OKLAHOMA CITY, WE'RE GONNA BE IN TROUBLE BECAUSE IT'S GONNA GET EVEN WORSE.
THIS IS THE RIGHT DIRECTION TO GO.
WHETHER IT'S OPTION TWO OR THREE, WHICH I THINK WAS THE, THE TWO OPTIONS THAT WERE DISCUSSED MAINLY AT, AT THE PUBLIC WORKS MEETING, THEY WERE ALL FOUR DISCUSSED, THEY WERE ALL FOUR DISCUSSED, RIGHT? BUT TWO, I THINK TWO AND THREE HAD A LITTLE MORE WEIGHT IN THE CONVERSATION FROM, FROM, FROM WHAT I'VE HEARD.
BUT WE KNOW THAT IF WE WERE TO SAY TODAY, OKAY, LET'S STOP THIS AND LET'S JUST LIVE ON WHAT WE GOT AND BUY FROM OKLAHOMA CITY, OUR RATES ARE GONNA BE WORSE THAN ANY OF THESE OPTIONS WITHIN A FEW YEARS.
I THINK WE MISSED AN OPPORTUNITY HOWEVER MANY YEARS AGO TO BITE THE BULLET FOR THE WHOLE THING AT ONCE.
WE'VE SAID THAT TILL WE'RE TIRED OF HEARING IT.
BUT SO I MEAN, I THINK THIS IS, LET'S GET NUMBERS THAT WE CAN SHOW A COMMON THEME AND THEN EXPLAIN THE DIFFERENCES FROM, BECAUSE I THINK THAT'S POWERFUL.
SO I'D LIKE TO SEE WHEN, WHEN YOU COME BACK TO US TAKE THIS SLIDE AND GIVE US A 6,000 GALLON COST.
SO THAT WE CAN SEE IT TO BUILD AN APPLES TO APPLES.
BECAUSE THEN WHEN YOU LOOK AT IT, YOU'RE GOING, OKAY, HERE'S WHERE WE REALLY ARE.
HERE'S THE DIFFERENCE, AND NOW LET'S GET INTO THE DISCUSSION OF WHERE WE WANT TO GO.
AND I THINK A LOT OF THAT THEN COMES BACK TO WHERE, UH, PRESTON WAS TALKING ABOUT, GEE, WHERE DO WE WANT THE FUND BALANCE TO LAND? HOW MANY, HOW MANY OPERATING DAYS? AND THAT, I THINK IS A BIG DISCUSSION THAT WE'RE GONNA HAVE TO HAVE.
AND THAT, UM, ON SLIDE NINE HERE, THAT THAT'S WHAT WE'RE TRYING TO SHOW IS THAT THE APPLES TO APPLES ON THE YEAH, EXCEPT YOU DIDN'T SHOW IT AT THE, THE MINIMUM COMMON NUMBER THERE.
THE MINIMUM COMMON NUMBER WAS 6,000 GALLONS.
OR IS IT EIGHT VERSUS EIGHT, YOU SAID EIGHT 8,000 GALLONS OF WATER.
WE'RE LOOKING AT THE, WHERE MOST PEOPLE LAND ON A WATER BILL.
I UNDERSTAND, BUT THAT'S NOT THE CONVERSATION THAT THE PUBLIC HAS.
THE PUBLIC WANTS TO TALK ABOUT THE MINIMUM.
THEY WANNA TALK ABOUT THAT CHARGE, THAT MINIMUM CHARGE, AND THEY WANT, AND HOW DO YOU COMPARE THAT MINIMUM CHARGE? BECAUSE UNFORTUNATELY, WHETHER WE LIKE IT OR NOT, THAT'S WHAT WE KEEP PUTTING OUT THERE.
SO JUST I THINK I CAN TRANSLATE, YOU'RE LOOKING FOR, UH, AVERAGE MINUS, UH, WHAT I WOULD CALL AN ALLOTMENT.
[01:50:01]
AVERAGE MINUS THE, THE FREE GALLONS IS THAT'S HOW YOU GOT, THAT'S HOW YOU GOT THE SIX.WELL, YEAH, THAT'S HOW YOU GET TO 6,000.
BECAUSE YOU GOT 1,015 HUNDRED.
I WAS JUST MAKING SURE WE UNDERSTOOD.
SO YOU TAKE THE, YOU TAKE THE MINIMUM CHARGE PLUS WHATEVER IT TAKES TO GET YOU 6,000 GALLONS.
AND THAT'S LITERALLY THE, THE LEAST COMPARISON YOU COULD MAKE.
AND THAT'S A DIFFERENCE FROM TALKING ABOUT THE AVERAGE OF WHAT WE USE.
SO, UM, I, I THINK I'M UNDERSTANDING, BUT I WANNA MAKE SURE THAT PHONE PLEASE, I'M SORRY, UH, THAT I THINK I'M UNDERSTANDING, BUT I WANNA MAKE SURE THAT I UNDERSTAND.
WE CAN OBVIOUSLY RUN AN EIGHT, A 6,000 GALLON GALLON COMPARISON FOR ALL OF THESE COMMUNITIES.
IT'S GONNA LOOK SIMILAR TO THE 8,000 GALLON, BUT NOT, NOT THE SAME.
WE CAN ALSO RUN, I MEAN THE, THE BARE MINIMUM IS JUST THE BASE CHARGE, RIGHT? OR THE ONLY WAY TO HAVE TRUE APPLES TO APPLES IN THIS CHART WOULD BE BASE CHARGE PLUS 2000 GALLONS FOR EVERYBODY.
AND WHAT DOES THAT LOOK LIKE? 'CAUSE THERE ARE A NUMBER OF PEOPLE THAT GET BILLS FOR 2000 GALLONS AND SURE.
BUT IN, IN SLIDE 22, INCLUDED IN THE BASE, YOU HAVE NOTHING.
YOU HAVE A THOUSAND GALLONS, YOU HAVE 1500 GALLONS.
YOU HAVE 2000 GALLONS, RIGHT? WHAT'S THE EASIEST WAY TO GET TO QUOTE AN APPLES TO APPLES COMPARISON TO WHAT YOU PAY IS AT 6,000 GALLONS? UH, WE CAN, WE CAN SHOW THAT, WHAT THAT WOULD BE FOR 2000 ACTUALLY FIF THE 1500, THEY WOULD'VE A CHARGE FOR THE NEXT 500 GALLONS.
WE CAN SHOW WHAT THAT WOULD BE ON A 2000 GALLON BILL.
WE CAN SHOW IT ON A FOUR OR A SIX AS WELL.
BUT WE CAN SHOW THAT FOR A, WELL, FOR FOR TWO.
I'M JUST LOOKING AT THE SIMPLE MATH SURE.
THAT SAYS HERE'S RIGHT THREE EXTRA FOUR X GALLONS.
HERE'S WHERE IT LANDS WHEN EVERYTHING IS SIZED UP TO THE SAME POINT.
YEAH, WE CAN DO THAT BECAUSE I THINK IT, YOU MISS IF YOU START TRYING TO SPLIT AND GET EVERYTHING TO 2000 GALLONS, I THINK YOU MISSED SOME OF THE SUBTLETIES IN WHAT THE BASE CHARGE ITSELF IS.
TO ME, THAT'S JUST AN EASY WAY THEN TO HAVE A REALLY STRONG CONVERSATION WITH THE PUBLIC ABOUT HERE'S WHERE WE REALLY LAND.
BECAUSE THEN WE TAKE ALL THE OTHER ARGUMENTS WE'RE GONNA GET INTO RIGHT.
WHEN WE START SLICING AND DICING THE MINIMUM CHARGE.
I MEAN, I THINK THAT'S A, A GOOD PLACE FOR US TO BE BECAUSE THEN IT IT, IT GETS US TO WHERE WE CAN TALK ABOUT ALL OF THE DECISIONS WE'VE GOTTA MAKE.
AND JUST TO BE CLEAR, THE, THE PUBLIC WORKS COMMITTEE SPENT SIX, SEVEN HOURS TALKING ABOUT THIS.
WE REVIEWED WHAT WE WERE GIVEN.
I WANT TO COMPLIMENT CINDY HOLMAN.
UH, SHE'S VERY WISE AND WAS HELPFUL ON THE COMMITTEE.
UH, SHE'S GOT MORE EXPERIENCE THAN MOST IN TERMS OF RATES, UH, AFFORDABILITY, CAPITAL IMPROVEMENTS.
UH, IT MIGHT BE HELPFUL TO HAVE ONE MORE PUBLIC WORKS COMMITTEE AFTER THIS WORK PRODUCT'S PUT TOGETHER.
WE CAN TALK ABOUT IT THERE AND THEN COME BACK HERE.
WE'D HAVE CHRIS, WE'D HAVE TO HURRY AND GET THAT DONE.
THERE'S, THERE'S NO EASY WAY TO ADDRESS WATER.
THERE'S NOT, UH, YOU WANNA BE ABLE TO DRINK IT, COOK WITH IT, LET YOUR DOG DRINK IT, AND WE'VE GOTTA PAY FOR IT.
IT'S EXPENSIVE, BUT NOT HAVING, IT'S MORE EXPENSIVE AND NOT A ADDRESSING THE CAPITAL IMPROVEMENT NEEDS WOULD BECOME CATASTROPHICALLY EXPENSIVE IF WE DIDN'T ADDRESS IT.
NOW, UH, SO I UNDERSTAND THE MAYOR'S POINT TRYING TO FIND THAT MAGIC NUMBER TO WHERE WE CAN TALK ABOUT IT IN A CERTAIN WAY.
AND I LOOK FORWARD TO SEEING THAT PRODUCT.
BUT WHEN THE PUBLIC WORKS COMMITTEE MET OVER THOSE HOURS ON TWO DIFFERENT OCCASIONS, OPTION ONE WAS AN IMMEDIATE NON-STARTER.
NOW MAYBE IT'S COMING BACK TO LIFE, I DON'T KNOW.
BUT ITEM TWO OR OPTION TWO SEEMED TO GARNER THE MOST DISCUSSION AND SUPPORT.
WE THOUGHT IT WAS PROPER TO SEND ALL FOUR TO THE COUNCIL FOR THEM TO REVIEW AND TALK ABOUT.
AND NOW WE'VE COME UP WITH WHERE WE WANT TO GO IN TERMS OF ONE MORE BITE OF THE APPLE ON THE, THE USAGE.
UH, SO IF WE CAN, I THINK IT WOULD BE HELPFUL TO GO BACK TO PUBLIC WORKS, HAVE ONE MORE DISCUSSION, HAVE THE PUBLIC'S WELCOME TO ATTEND,
[01:55:01]
UH, AND TALK ABOUT THESE THINGS AND THEN COME BACK HERE, IF THAT MAKES ANY SENSE.SOME THOUGHTS, JUST GENERAL THOUGHTS.
I THINK, YOU KNOW, WE'RE TWO THIRDS DONE WITH THIS PROJECT.
I DON'T SEE A WAY WE, YOU KNOW, JUST LIKE ZOOMING OUT ON THE WHOLE THING.
I'M TRYING TO EXPLAIN THIS TO MY FRIENDS, TO MY WIFE.
WHY DO WE HAVE TO DO THIS? AND WE'RE TWO THIRDS OF THE WAY DONE, PROBABLY, MAYBE A LITTLE LESS, BUT WE'RE WELL DOWN THE PATH OF, UH, OF A LIKE REVOLUTIONARY, YOU KNOW, REBUILD OF OUR WATER SYSTEM TO SERVE THE FUTURE, TO FIX OLD CRUMBLING STUFF.
SO THERE'S NOT AN OFF RAMP TO ME AT THIS POINT.
SO THEN WE, AND THEN THE THOUGHT, MY THOUGHT WAS, WELL, CAN WE REDUCE OUR COSTS? DO WE PHASE IT? DO WE STRETCH IT? PART OF THE REASON WE'RE IN THIS SITUATION IS 'CAUSE WE PHASED IT AND STRETCHED IT IN 2019.
NOW IN THIS THIRD PHASE, PROBABLY NOT SMART TO DO THAT.
AGAIN, WE CAN MAYBE TREMOR, DEFER SOME THINGS AROUND THE EDGE.
BUT THAT LAST SLIDE, THE SENSITIVITY SLIDE, UM, YOU KNOW, MILLIONS OF DOLLARS VERSUS THE, THE IMPACT TO THE RATES WAS PRETTY TELLING TO ME.
BASICALLY JUST SAYING LIKE, WE CAN TRIM SOME THINGS HERE AND THERE, BUT IT'S NOT GONNA MAKE A BIG DIFFERENCE TO THE NUMBERS, TO THE AVERAGE PERSON'S WATER BILL NUMBER.
AND SO, UM, ANYWAY, THAT WAS INTERESTING TO ME.
SO I THINK WE'RE IN THE POSITION WHERE WE JUST, WE NEED TO PICK THE BEST OPTION GIVEN THE CURRENT ASSUMPTIONS THAT WE HAVE.
THERE ARE SOME, CHRIS MENTIONED AT THE BEGINNING, THERE ARE SOME KEY ASSUMPTIONS BEHIND ALL OF THIS MODELING THAT ARE PRETTY IMPORTANT AND HAVE PRETTY COULD, COULD SWING THE NUMBERS FAIRLY BIG, RIGHT? INTEREST RATES ON THE, ON THE LOANS IS ONE THAT COULD CHANGE THE NUMBERS QUITE A BIT.
UP OR DOWN WHERE THE BIDS COME IN.
UM, YOU KNOW WHAT THE RESERVE NUMBER IS, WHAT YOU KNOW.
SO ANYWAY, THERE'S LIKE FIVE OR SIX KEY ASSUMPTIONS HERE THAT ARE IN THE APPENDIX, IN THE PACKET, IF ANYBODY WANTS TO LOOK AT 'EM, THAT COULD SWING THE NUMBERS.
SO I DO THINK IT'S PRUDENT TO REVISIT THE RATES IN A YEAR OR TWO AND TO CONTINUE ON THAT FREQUENCY OF DOING THAT BECAUSE WE CAN MAKE A DECISION TODAY BASED ON A CERTAIN SET OF ASSUMPTIONS.
AND THAT COULD ALL BE DIFFERENT IN A YEAR, IN SIX MONTHS.
SO I THINK WE HAVE TO COME BACK AT THIS AND, UM, YOU KNOW, UPDATE OUR VIEW OF THINGS.
I THINK IT'S IMPORTANT THAT WE, UM, IMPLEMENT THE HIGHER TIER.
I THINK THAT BRINGS IN ADDITIONAL REVENUE AND IT'S, I THINK IT'S A, A FAIR THING TO ADD FOR PEOPLE WHO ARE JUST USING A TON OF WATER.
I THINK ON THE LOW END WE DO NEED TO LOOK INTO LIHEAP AND THOSE OPTIONS THAT CHRIS MENTIONED.
I DEFINITELY THINK WE HAVE TO DO THAT TO HELP PEOPLE WHO MIGHT BE STRUGGLING BECAUSE OF THE RATE INCREASES.
SO KIND OF, YOU KNOW, SIGNALS ON BOTH ENDS, RIGHT? THAT WE, ANYWAY, I THINK THOSE THINGS ARE BOTH IMPORTANT.
UM, RESERVES ARE THE BIG QUESTION I THINK THAT WE NEED TO ANSWER OR PROVIDE SOME GUIDANCE ON HERE.
UM, AGAIN, BACK TO BACK TO THIS CHART WE'RE LOOKING AT HERE, THE DIFFERENCE.
SO SIX MONTHS OF RESERVES TO COVER OPERATIONS IS ABOUT 50 MILLION, RIGHT FROM THE CHART WE LOOKED AT THE CHARTS, WE LOOKED AT.
IF WE CUT THAT DOWN TOO FAR, IT'S A MATTER OF TENS OF MILLIONS.
BUT WHEN IT COMES TO WATER OPERATIONS, I THINK WE GOTTA BE CAREFUL ABOUT THAT AND NOT GO TOO LOW.
AND LIKE I SAID EARLIER, THE IMPACT TO THE RATES IS KIND OF MINUSCULE, UM, TO GO TO DROP IT MORE.
SO ALL THAT TO SAY, I, I WOULD RECOMMEND WE STAY AROUND SIX MONTHS OF RESERVES, WHICH IS ABOUT 50 MILLION ON ANY OF THESE SCENARIOS.
LIKE THE MAYOR SAID OPTION TWO AND THREE WERE THE ONES THAT WE FOCUSED ON THE MOST IN PUBLIC WORKS.
UM, PROBABLY OPTION TWO SLIGHTLY IN THE LEAD.
BUT I THINK IF WE GO BACK AND LOOK AT IT AGAIN, I THINK WE NEED TO LOOK AT OPTION THREE AND WE CAN TALK ABOUT THE, THE RESERVE ASSUMPTION.
BUT I THINK WE NEED TO USE THE SAME RESERVE ASSUMPTION FOR OPTIONS TWO AND THREE WHEN WE LOOK AT THIS.
IF WE LOOK AT IT AGAIN, IT'S LIKE RERUN OPTION THREE WITH 50 MILLION.
'CAUSE THAT'S REALLY THE APPLES TO APPLES TO ME.
LIKE I DON'T THINK WE WANT TO LOOK AT THOSE WITH DIFFERENT RESERVE ASSUMPTIONS.
I THINK WE SHOULD LOOK AT THEM EQUALLY.
AND WHAT THAT MEANS IS THAT THE OPTION THREE RATE INCREASE, THE STEP UP PER YEAR WILL BE HIGHER, RIGHT? BECAUSE THAT ONE ASSUMED MORE RATE, MORE RESERVE USAGE.
SO THAT'S WHAT I, I THINK WE NEED TO LOOK INTO DO THAT.
BUT I WOULD RECOMMEND THAT WE, AND MAYBE WE DON'T DECIDE IT TODAY, BUT THAT WE AS A COUNCIL SAY, HEY, WE WANT OUR TARGET OF RESERVES TO BE X MONTHS AND MAYBE LIKE, UH, LIKE AJ WAS SAYING, MAYBE IN YEARS OF HEAVY CAPITAL OUTLAY, WE'RE COMFORTABLE DROPPING THAT A LITTLE BIT LOWER TO, YOU KNOW, FOUR MONTHS OR SOMETHING.
BUT I THINK THAT'S A DECISION THAT WE NEED TO MAKE THAT MATERIALLY AFFECTS WHAT WE DO HERE.
SO THAT'S PRETTY IMPORTANT TO ME.
AGAIN, I WOULD RECOMMEND SIX MONTHS.
UM, AND THEN ON BETWEEN OPTIONS, LIKE I AGREE WITH WHAT COUNCILMAN MOORE SAID.
I THINK OPTION ONE WAS KIND OF DEAD OUT OF THE GATE, BUT IT DOES, IT DOES HELP TO KIND OF FRAME OPTIONS TWO, THREE, AND FOUR A LITTLE BIT, RIGHT? 'CAUSE YOU CAN KIND OF SEE IF YOU TURN THE KNOB ALL THE WAY, THIS, THIS WAY WITH BASE RATES, THAT'S OPTION ONE.
[02:00:01]
CAPITAL COST ALL THE WAY UP, THAT'S OPTION FOUR, TWO AND THREE ARE KIND OF IN THE MIDDLE.AND THEN BETWEEN TWO AND THREE, TO ME IT'S JUST A MATTER OF DO WE WANT THE NEXT COUPLE YEARS TO BE HIGHER OR DO WE WANNA SPREAD THAT OUT OVER FOUR OR FIVE YEARS? THAT'S REALLY THE ONLY THING.
THE ONLY QUESTION BETWEEN OPTIONS TWO AND THREE, ASSUMING THAT THE RESERVE NUMBERS ARE HELD, THE ASSUMPTIONS HELD THE SAME, UM, I DON'T THINK WE SHOULD GO WITH OPTION FOUR RIGHT NOW.
I THINK WHAT THAT DOES TO, IN MY VIEW, IS IT, IT INFORMS THE AMOUNT OF EXPOSURE OR RISK WE HAVE.
WE WON'T HAVE BIDS IN HAND FOR ANOTHER 3, 4, 3, 4 MONTHS, SOMETHING LIKE THAT ON WHAT IT'S GONNA COST.
BUT I DON'T THINK WE WANT TO ASSUME WORST CASE, UM, I THINK WE WANNA ASSUME THE MIDPOINT FOR NOW.
IF WE REVISIT RATES IN A YEAR OR TWO AND WE FIND THAT OUR CAPITAL NUMBER'S GONE UP, THEN WE HAVE THE CHOICE OF, WELL, WE CAN ADJUST OUR RATES A LITTLE BIT OR WE CAN DEFER OUT SOME PROJECTS, YOU KNOW, THAT WE HAVE SOME OPTIONS THAT WE CAN LOOK AT IN A, IN A YEAR OR TWO IF IT ENDS UP BEING A LITTLE BIT HIGHER THAN WE'RE PLANNING HERE.
OKAY, SO I'M, I'M FOR OPTION TWO OR THREE, I'M FOR A SIX MONTH RESERVE POLICY, ADDING THE TOP TIER, ADDING HELP FOR THE LOWER END.
YEAH, THAT'S KINDA WHERE I'M AT WITH IT RIGHT NOW.
MR. GRAY, HOW LONG WOULD IT TAKE YOU TO PUT THAT PROGRAM TOGETHER THAT THE MAYOR TALKED ABOUT THOSE NUMBERS A DAY OR TWO.
SO WE CAN, MR ING, IF YOU'LL GET WITH THE CITY CLERK AND WHOEVER YOU GOTTA GET WITH TO GET THAT PUBLIC WORKS MEETING ON THE BOOKS AND WE'LL GO OVER THAT AND THEN COME BACK HERE WITH THAT.
YOU IS, IS THAT GENERALLY THE SECOND WEDNESDAY PUBLIC WORKS COMMITTEE OR IS THE THIRD? I DON'T KNOW, I JUST WAIT FOR THE EMAIL TO TELL ME WHERE
SO APRIL 8TH THEN WOULD BE THE DAY.
THE ONE OF THE PIECE THAT MAY BE HELPFUL BASED ON MR. WATERS'S, UH, COMMENTARY, THERE IS OPTIONS TWO AND THREE HAVE THE DIFFERENT AMOUNTS OF DRAWDOWN OF THE FUND BALANCE.
IS THERE, IS THERE A CLEAR DIRECTION FROM THE COUNCIL AT THIS POINT ON SETTLING IN ON ONE OR THE OTHER OF THOSE? AND AN ALTERNATIVE, IF THERE'S NOT, IS WE COULD RUN BOTH OF THOSE OPTIONS WITH THE DIFFERENT DRAWDOWN ASSUMPTIONS, RIGHT? SO A TWO A AND TWO B AND A THREE A AND A THREE B BASED ON THE DIFFERENT DRAWDOWN AMOUNTS.
I DON'T KNOW WHAT THAT NUMBER IS EXACTLY, BUT I KNOW I'M NOT WILLING TO RISK NOT HAVING SUFFICIENT RESERVES TO DO WHAT WE GOTTA DO.
AT THE, AT THE RISK OF, UM, I DON'T KNOW, TEARING IT ALL UP HERE, BUT, UM, SO WELL DON'T DO THAT.
I, I'M, I'M NOT, I I DON'T WANT TO, YOU KNOW, GET THE SHARPIE OUT OR ANYTHING, BUT, UM, THERE'S A LOT OF VARIABLES IN WHAT'S GONNA HAPPEN IN THE NEXT FEW MONTHS AND YEAR.
AND SO THAT, THAT'S WHY I RECOMMEND US LOOKING AT THIS AND THEN BRINGING BACK, AS PART OF THE BUDGET NEXT YEAR, LET'S, LET'S EVALUATE WHERE WE'RE AT NEXT YEAR.
ALL THESE OPTIONS ARE GONNA TREND US IN THE RIGHT DIRECTION.
LET, LET'S LOOK AT THE LONG TERM AND LET'S LOOK AT IT ANNUALLY AND MAKE SURE THAT IT'S PERFORMING THE WAY THAT WE NEED IT INSTEAD OF GETTING HUNG UP ON FIVE YEARS DOWN THE ROAD.
WHAT'S GONNA HAPPEN WHEN THERE'S SO MANY VARIABLES? WE, WE COULD HAVE A DRY SUMMER AND THAT MAKES EVERYTHING REALLY GOOD FOR REVENUE AND THERE'S NO PROBLEMS. WELL, IT COULD BE A WET SUMMER AND THEN WE HAVE A TOUGHER CONVERSATION.
IT, THIS IS MORE OF A TREND THAN IT IS A ONE TIME.
SO AS LONG AS WE'RE NOT TRENDING NEXT YEAR INTO, YOU KNOW, THAT 90 DAY OR 120 DAY 180, IT'S MORE ABOUT HOW WE'RE TRENDING AND THAT'S WHY WE WANT TO GET LOOKING AT THE FIVE YEAR.
BUT I DON'T WANT TO, I DON'T WANT TO GET YOU ALL HUNG UP ON WHAT WE LOOK IN FIVE YEARS, BECAUSE I PROMISE YOU IS IT WON'T BE RIGHT BECAUSE WE DIDN'T PREDICT THE WEATHER CORRECTLY.
AND CAN I, CAN I SEE IF I CAN CLARIFY HERE, I THINK CHRIS WAS ABOUT TO RIP IT UP FOR A SECOND.
NO, IF, IF I HEARD WHAT COUNCILMAN WATERSON SAID, UH, A MINUTE AGO, WE WANT TO LOOK AT TWO AND THREE AND IN PREPARATION FOR THAT NEXT MEETING OPTIONS TWO AND THREE AND IN PREPARATION FOR THAT NEXT PUBLIC WORKS COMMITTEE MEETING, WE WANT, WE WANNA RUN THAT, THAT SORT OF AVERAGE USER ANALYSIS.
IF I CAN MAKE UP THAT TERM THAT THE MAYOR WAS DESCRIBING AND THEN COUNCILMAN WATERSON YOUR PROPOSAL, IF I CALL IT THAT, WAS THAT WE JUST ESTABLISHED FOR RIGHT NOW KIND OF A WORKING POLICY THAT WE NEVER WANT TO GO BELOW 180 DAY FUND BALANCE.
AND SO THEN I THINK WHAT YOU SAID IS THAT YOU WANT TO SEE THE
[02:05:01]
IMPACT ON OPTION THREE SPECIFICALLY WHAT, WHAT IT DOES IN ORDER FOR US TO DRAW DOWN JUST ENOUGH OR NO MORE THAN GETTING TO THAT 180 DAY AMOUNT.YEAH, I'M, I'M INTERESTED IN THE OTHER COUNCIL MEMBER'S THOUGHTS ON THAT RESERVE POLICY, BUT YEAH, THAT IS WHAT I SAID.
AND I GUESS TO YOUR POINT, CHRIS, THE, THE ONLY THING I WOULD SAY IS WE ARE GOING TO LOCK IN A DEBT NUMBER SOON FOR THE C FOR PHASE ONE C.
I MEAN, THERE'S A LOT OF OTHER VARIABLES AND THINGS AROUND THAT EDGES, BUT THAT, THAT BIG PIECE WILL BE LOCKED SOON.
SO, UM, ANYWAY, NO, COMPLETELY.
AND I THINK GOING FORWARD, WE'LL JUST MAKE SURE THAT, I MEAN A RATE STUDY, YOU DON'T EVEN WANNA DO IT EVERY SO OFTEN, BUT IT'S NOT LIKE YOU SET IT AND FORGET IT.
WE NEED TO BE CONSTANTLY LOOKING AT THIS AS WE'RE REPORTING BACK IN FUTURE YEARS TO THE COUNCIL ABOUT PROGRESS TOWARD FULL IMPLEMENTATION OF THE PLAN, CONSTRUCTION PROGRESS, ET CETERA, ET CETERA.
WE'LL KNOW OUR BIG COSTS, WE'LL KNOW THOSE KINDS OF THINGS SO WE'LL, WE'LL BE ABLE TO FIX SOME OF THOSE THINGS.
BUT TO CHRIS'S POINT, IT'S A DYNAMIC NOT STATIC WORLD THAT WE LIVE IN.
AND SO THERE'LL BE OPPORTUNITIES, IN FACT, IF NOT A NEED FOR US TO LOOK AT THIS EVERY SO OFTEN, BUT NOT NECESSARILY THE, THE, THE PRESUMPTION THAT WE WOULD CHANGE ANYTHING, BUT IT NEEDS TO BE MONITORED AND SO THAT WE DON'T HAVE TO WAIT 20 YEARS OR SO AND THEN SAY, OH MY GOSH, WE, YOU KNOW, 20 YEARS AGO WE SHOULD HAVE DONE SOMETHING DIFFERENT.
SO THIS IS, THIS WILL NEVER BE SOMETHING THAT WE JUST WALK AWAY FROM.
WE'RE ALL SAYING THE SAME THING.
WE NEED REASONABLE, AFFORDABLE RATES TO COMPLETE THE PROJECT, TO CONTINUE TO HAVE CLEAN DRINKING WATER AND WE NEED TO COME UP WITH A NUMBER TO DO THAT AND WE CAN ACCOMPLISH THAT APRIL 8TH AND THEN COME BACK HERE AND GET SOMETHING GOING.
CHRIS, I'D, I'D LIKE TO SEE TOO, I MEAN WE'RE, WE'RE, WE'VE BEEN LOOKING AT THIS.
I, I MEAN I KNOW THERE'S SOME INFORMATION IN HERE, BUT WE'VE BEEN LOOKING AT IT THROUGH A RESIDENTIAL LENS.
CAN WE LOOK AT IT NEXT TIME JUST A LITTLE BIT MORE THE COMMERCIAL LENS AND IN TERMS OF CAPACITY, UM, YOU KNOW, IN, IN THIS RATE MAKING DEAL, AS WE ALL WILL HAVE, IF YOU HAVE CUSTOMERS THAT BUY ON ON RATE, IF YOU CAN'T GET TO RATE ADEQUACY IN A GIVEN TIME, THEY START TO THINK YOU CAN'T FIGURE IT OUT.
AND I KNOW, I KNOW LIKE EVEN NUMBER ONE, I, I WAS TOTALLY AGAINST IT, BUT THE MORE I LOOK AT PAGE OR SLIDE 41, AND I'M NOT SAYING WE GO THERE, BUT IT'S A TOUGH BANDAID RIP OFF, BUT AFTER THAT YOUR CUSTOMER BEGINS TO SEE SOME, OH, MAYBE YOU DO HAVE IT FIGURED OUT AS OPPOSED TO NUMBER FOUR, WHICH I HATE BECAUSE THAT TELLS ME YOU NEVER GOT IT FIGURED OUT.
AND, AND SO I, I, I THINK WE GOTTA TAKE THOSE THINGS INTO CONSIDERATION.
AND YOU KNOW, SOMEBODY MENTIONED, I THINK ONE DAY I, MAYBE WE SHOULD LOOK AT IF WE'RE GONNA DO ALL THIS ON A FIVE YEAR AVERAGE AND THINGS, LOOK AT YOUR WEATHER, LOOK AT WITH THE USAGE.
I MEAN, WE'VE HAD SOME WET, ARE WE GOING INTO DRY? AND THEREFORE MAYBE YOUR, YOUR REVENUES DO GO, GO UP.
I, I DON'T KNOW IF YOU WANT TO PREDICT A LOT OF THINGS, PREDICT THE WEATHER TOO, CHRIS.
I WOULDN'T BE WORKING HERE IF I HAD THAT RIGHT.
DO YOU FEEL LIKE, IS THERE AN UNDERSTANDING OF WHAT HAS BEEN DIRECTED
SO IT, IT, IT FEELS LIKE WE ARE KIND OF COALESCING OR THERE'S MORE INTEREST IN OPTIONS TWO AND THREE, LOOKING AT OPTIONS TWO AND THREE.
SOME OF THE BASELINE, UH, ANALYSIS WILL PERFORM IN ADVANCE OF THAT APRIL 8TH PUBLIC WORKS MEETING IS LOOK AT WHAT I'LL CALL THE, THE MAYOR'S STANDARD FOR AVERAGE USAGE, THAT THAT OR THAT 6,000 GALLON AND THEN ALSO THEN LOOKING AT THE IMPACT ON, UH, THE RATE OPTIONS, MAKING SURE WE, UH, MAINTAIN 180 DAY RESERVE.
AND THEN THE OTHER THINGS WE'VE TALKED ABOUT, LIKE A PROGRAM FOR LOW INCOME SENIORS, WE CAN DO THOSE THINGS INDEPENDENT OF WHATEVER, UH, RATE DECISION YOU MAKE, ALL THOSE THINGS.
WE'LL WE WILL, WE'LL WORK ON AND, AND WE'LL DO, UM, AND THEN GIVE THE COUNCIL AGAIN STILL SOME, SOME KIND OF A RANGE OF OPTIONS, BUT
[02:10:01]
I DO THINK WE UNDERSTAND THE, UM, THE DIRECTION FOR THAT PUBLIC FOR THAT APRIL 8TH PUBLIC WORKS COMMITTEE MEETING.AND THEN, UH, APRIL 13TH DISCUSSION.
I WOULD HAVE ONE THING TO ADD ON TOP OF THAT.
I THINK WE OUGHT TO CON, I MEAN IT SEEMS OPTION ONE IS SOMETHING THAT COUNCILMAN FRAME WANTS TO LOOK AT A LITTLE BIT MORE, INCLUDE THAT IN THE APRIL 8TH.
AND I THINK I KIND OF ALLUDED TO THAT EARLIER, THAT RATE USAGE IS VOLATILE, SO I WOULD AGREE WITH THAT, THAT IF YOU COULD PUT ONE, TWO, AND THREE TOGETHER AND THEN
MR. MAYOR, MAY I GET ONE PIECE OF CLARIFICATION? YES, SIR.
ON THE COMMERCIAL, UH, MR FRAME ON, ON THE COMMERCIAL ANALYSIS, UM, I JUST WANNA MAKE SURE THAT WE'RE HITTING THE TARGET THAT YOU'RE LOOKING FOR THERE.
I UNDERSTAND WE HAVE COMPARED MOSTLY RESIDENTIAL, IF WE TOOK SAY A A SORT OF A A A RELATIVELY LOW END COMMERCIAL, RELATIVELY TYPICAL COMMERCIAL AND RELATIVELY HIGH END COMMERCIAL, RAN THROUGH THESE SAME CABINET ANALYSIS.
IS THAT ESSENTIALLY WHAT YOU'RE LOOKING FOR? YES.
UM, I'LL ADD THAT THERE IS A, THE RAIN BARREL DISTRIBUTION EVENT IS ON SATURDAY, APRIL 11TH FOR THOSE LOOKING FOR CONSERVATION RELIEF.
I MEAN, I'M BEING SILLY, BUT ALSO LIKE I THINK THERE ARE CITIZENS OUT THERE WHO ARE LOOKING FOR WAYS TO OFFSET THEIR WATER BILL COST AND BE GOOD TO THE EARTH.
I WANTED TO ADD ONE MORE THING.
WE, WE DIDN'T TALK ABOUT IT HERE AND IT'S REALLY A DISCUSSION FOR ANOTHER DAY, BUT ONE OF OUR STRATEGIC, UH, PLANNING THINGS TO LOOK INTO THIS YEAR WAS IMPACT FEES.
AND SO WE DIDN'T REALLY TALK ABOUT THAT HERE.
I DON'T WANT TO TALK ABOUT THAT RIGHT NOW, BUT, YOU KNOW, THERE'S A, THERE'S AN ELEMENT OF THAT THAT COULD BE RELEVANT TO THE, ALL THE MATH HERE AT SOME POINT IF WE GO DOWN THAT PATH.
UM, SO JUST WANTED TO MENTION THAT 'CAUSE PEOPLE HAVE MENTIONED THAT TO ME, THIS IDEA OF SHARING COST, UH, WITH DEVELOPMENT.
AND THEN ALSO, UM, JUST MAYBE TO WRAP IT UP FROM MY COMMENTS, I DID SAY THESE ARE BAD OPTIONS THAT WAS IN THE NEWS RECENTLY,
BUT I DO REALLY APPRECIATE YOU GUYS LOOKING INTO THIS AND DOING THE DILIGENCE ON THOSE OPTIONS.
OF COURSE, WHAT I MEANT BY THAT IS THEY'RE NOT PLEASANT, BUT, UM, I KNOW A LOT OF WORK WENT INTO THIS AND GOING THROUGH ALL THE DETAILS ON THE MODELING THIS GUY TOO.
SO THANK YOU GUYS FOR DOING THAT AND BRINGING US ACTIONABLE AND DECISIONAL DATA HERE, EVEN IF IT'S NOT FULLY PLEASANT.
SO WHEN MIGHT WE, THERE'S A APRIL 8TH PUBLIC WORKS MEETING, IS THAT WHAT I HEARD? AND THEN WE MAY SEE THIS BACK ON OUR AGENDA.
THE NEXT COUNCIL MEETING OR WHAT ARE WE THINKING? I'M, I'M TRYING TO REMEMBER, I DON'T THINK WE HAD AN APRIL 13TH OR DID WE HAVE AN APRIL 13TH BUDGET WORKSHOP? I WOULD SAY WE'D, UH, LOOSELY DEPENDING UPON HOW IT GOES ON, ON APRIL 8TH, WE WOULD TRY AND ADD SOME DISCUSSION ABOUT THIS, UH, FOR THE 13TH.
YEAH, DID WE HAVE A WORKSHOP THAT NIGHT OR THAT THAT DAY.
OKAY, SO WE WOULD PLAN FOR AN APRIL 13TH, UM, DISCUSSION.
OKAY, SO PUBLIC WORKS COMMITTEE ON THE EIGHTH AND THEN THAT SAME PRESENTATION DISCUSSION ON THE THIRD.
YEAH, I THINK, I MEAN THE SETTING ASIDE FOR THE MOMENT, WHATEVER CHANGES, UH, THE COMMITTEE MIGHT, UH, SUGGEST OR WANT.
[4. Presentation and Discussion of Remaining Timeline of Budget Process for the Fiscal Year 2026-27 Budget.]
ITEM NUMBER FOUR ON THE AGENDA NOW, WHICH IS PRESENTATION, DISCUSSION AND REMAINING TIMELINE OF BUDGET PROCESS FOR THE FISCAL YEAR 20 26, 27 BUDGET, WHICH I GUESS THAT JUST TIED RIGHT INTO IT, DIDN'T IT?SO YES, MARCH 30TH WE HAVE A CONSULTANT COMING, UH, SCHEDULED TO COME HERE.
SO MARCH 23RD TODAY, MARCH 30TH.
UM, A CONSULTANT TO TALK ABOUT OUR FUND STRUCTURE AND HOW WE CAN, UH, CONSOLIDATE FUNDS AND MOVE TOWARD WHAT A MORE LUM SIMPLIFIED PRESENTATION OF FINANCIALS COULD BE.
WE HAD ALSO TENTATIVELY THOUGHT ABOUT, UM, HAVING AN HR DISCUSSION THEN JUST POSITIONS THAT TYPE OF THING.
NORMALLY WE HAVE THAT, BUT IF IT WOULD BE UP TO THE COUNCIL'S DECISION, IF YOU'D LIKE TO DO THAT.
DON'T HAVE ANYTHING ELSE RIGHT NOW ON THAT PARTICULAR WORKSHOP DATE.
AND THEN APRIL 13TH, WE REALLY DIDN'T HAVE A LOT PLANNED.
HOWEVER, WE HAVE NOW PENCILED IN WATER FOLLOW UP ON APRIL 13TH.
APRIL 20TH IS STILL A AVAILABLE, HADN'T REALLY PLANNED TO HAVE A WORKSHOP THEN, BUT IT IS AVAILABLE
[02:15:01]
SO THAT WE CAN HIT OUR MAY 4TH DEADLINE TO PUBLISH FOR THE, UH, BUDGET HEARING.WHAT IF WE WERE TO SUGGEST AN APRIL 20TH WORKSHOP THAT WOULD BE INTENDED TO BE AT THAT POINT A LITTLE MORE OF A SUMMARY BASED ON EVERYTHING THAT'S BEEN PRESENTED? DON'T NECESSARILY THINK WE NEED TO START AT TWO, ALTHOUGH WE CERTAINLY CAN MAYBE DON'T NEED THREE HOURS FOR IT, BUT, UM, YOU WANT TO PLAN FOR SOME KIND OF A, OF A BUDGET SUMMARY, UM, WORKSHOP ON THE 20TH.
IS EVERYONE STARING AT THEIR PHONES TRYING TO FIGURE OUT THEIR DATES?
I I, I WAS HOPING FOR NEXT WEEK AND MAYBE THE 20TH TO START AT THREE RATHER THAN TWO, JUST FOR OTHER JOB REASONS, BUT OTHERWISE, I, I MEAN I THINK WE KEEP IT ON AS A HOLD UNTIL WE KNOW WE DON'T NEED EVERYTHING.
WOULD IT BE OKAY TO START NEXT WEEK AT THREE INSTEAD OF TWO? I I ACTUALLY THINK THAT'S FINE.
YEAH, WE, THERE'S NO COUNCIL MEETING, RIGHT? I THINK THAT WORKS.
OKAY, SO THREE O'CLOCK ON THE 30TH AND TENTATIVELY.
UH, THREE O'CLOCK ON THE 13TH AND LET'S JUST ASSUME THREE O'CLOCK ON THE, ON APRIL 20TH AS WELL.
SO ARE THEN THEY GOING UNTIL FIVE, MAYBE FOUR 30, MAYBE FOUR.
DEPENDS ON THE NUMBER OF TOPICS, I THINK DEPENDS ON HOW DIFFICULT THIS SUMMARY IS.
WELL I THINK YOU JUST IMPACTED IT.
I, THE OTHER ONE I WANTED, I MEAN, I THOUGHT WE HAD AN ACTION LAST TIME TO RE REVISIT POLICE AND FIRE.
IS THAT ON THE AGENDA SOMEWHERE SPECIFICALLY? SO I WANT TO TAKE THE OVERALL DIRECTION FROM YOU.
I MEAN IF, IF WHEN I SUGGESTED WE EVENTUALLY REVISIT POLICE AND FIRE WASN'T AS MUCH ABOUT FISCAL YEAR 26, 27 AS MUCH AS IT IS THE LONGER TERM PICTURE, BUT WE CAN DO WHATEVER, WHATEVER THE COUNCIL WANTS.
I THINK WE NEED TO, UH, I DON'T KNOW.
I'LL RESERVE JUDGMENT, BUT WE NEED TO LOOK AT SOMETHING THAT DOESN'T SHOW NEGATIVE.
WELL, JUST HOW ABOUT TO THAT POINT THEN? UM, BECAUSE I THINK IT'S IMPORTANT.
HOW ABOUT WE ADD ON THE 13TH, WE PLAN FOR, UH, SUMMARY WITH A TIME DEDICATED TO WATER, WHICH WOULDN'T INCLUDE AS LONG, OBVIOUSLY AN INTRODUCTORY KIND OF A PRESENTATION LIKE WE HAD TODAY.
SO WE WOULD DO SUMMARY WATER AND POLICE AND FIRE.
WHAT DO WE HAVE FOR NEXT WEEK?
OKAY, I'M GETTING, I'M GETTING CONFUSED HERE.
WHAT
SO AT THIS POINT IT'D BE THREE O'CLOCK FOR THE 30TH, THREE O'CLOCK FOR THE 13TH AND THREE O'CLOCK FOR APRIL 20TH.
BECAUSE IT SAYS WORKSHOPS HELD TWO TO FOUR.
WHAT IF WE SHIFT IT TO THREE? IT'D BE THREE TO ABOUT FOUR 30, SO, OKAY.
EVERYONE GOOD WITH THAT? I'M SORT OF GOOD WITH THAT, BUT I CAN, IF I'M IN THE MINORITY THEN I CAN BE GOOD.
I CAN PREFER TO, I MEAN I CAN DO TOO.
WHAT WORKS FOR YOU? TWO? TWO'S PRETTY TOUGH.
AND I KNOW THERE ARE DAY JOBS.
I WORK ONE, TWO, BUT I ALSO HAVE CHILDREN.
JUST SO WE'RE CLEAR, STAFF IS SPLIT THE DIFFERENCE.
BARRY, CHANGE, CHANGE YOUR NOTE TO YOURSELF.
ARE THESE MEETINGS ALREADY ALL NOTICED? NO.
[02:20:01]
30.OKAY, I THINK WE'RE FINALLY IN AGREEMENT.
FOUR 30 PROBABLY IF WE PUT IT IN THERE, I THINK WE CAN GET THROUGH FASTER THAN THAT, ESPECIALLY IF WE DON'T HAVE TO DECIDE ON DATE AND TIME OF ANYTHING.
WOULD YOU LIKE TO MAKE A MOTION? I WOULD, MR. MAYOR, I'D MOVE TO AJOUR IN THIS WORKSHOP.
SECOND, I HAVE A MOTION TO SECOND CAST YOUR VOTE AND WE'RE ADJOURNED.