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IT.[1. CALL SESSION TO ORDER]
CALL THE CITY COUNCIL WORK SESSION FOR THURSDAY, MAY 7TH, 2020 SIXTH.START WITH ROLL CALL COUNCILOR WARNER.
HERE WE HAVE ITEM THREE ONE, DISCUSSION
[3.1. Discussion and Possible Action Regarding Utility Impact Fee Fund and Utility Fund Financial Performance, Water CCN Growth, Revenue Trends, and Long-Term Utility Rate Sustainability Planning (Finance) ]
AND POSSIBLE ACTION REGARDING UTILITY IMPACT FEE FUND AND UTILITY FUND FINANCIAL PERFORMANCE WATER, CCN, GROWTH, REVENUE TRENDS, AND LONG-TERM UTILITY RATES.SUSTAINABILITY PLANNING ALMOST SOUNDS LIKE A CONDITION RIGHT THERE.
MAYOR COUNCIL, UM, ALBERTA BARRETT FOR THE RECORD.
SO TONIGHT WANNA TALK ABOUT, UM, THE UTILITY FUND AND IMPACT FEE FUND AND SOME OF ITS LONG TERM PROJECTIONS.
SO WE'RE GONNA HAVE TWO SCENARIOS THAT WE'RE GONNA PRESENT IN THIS, UM, PRESENTATION TO REVIEW, DISCUSS.
UM, IT'LL HAVE THE ASSUMPTIONS AND, UM, SCENARIO ONE WITH THE, UM, RATE IMPACT AND SCENARIO TWO WITH A RATE IMPACT.
SO THE FIRST, UH, ASSUMPTION IS THE IP PROJECTS THAT REQUIRE FUTURE DEBT.
SO CURRENTLY, UM, ANY PRINCIPAL PAYMENTS ON ON DEBT IS PAID THROUGH THE UTIL UH, UTILITY IMPACT FEE FUND.
AND INTEREST PAYMENTS ARE PAID FROM THE UTILITY FUND.
SO IN UH, 27 WE'RE PROJECTING TO, UM, BORROW 29.1 MILLION FOR THE CENTRAL WASTEWATER TREATMENT PLANT DIVERSION PHASE ONE IN 28, UH, 8.4 MILLION IN UH, WATER FOR COUNTY ROAD 1 32, WHICH IS FOR A 24 INCH AND A 30 INCH, UH, WATERLINE.
AND WHAT WE'VE ADDED IS ABOUT 50 MILLION FOR INFRASTRUCTURE FROM MANVILLE TO HU FOR WATER SUPPLY.
AND IN 29 2 PROJECTS, ONE FOR ABOUT 8.1 MILLION, UH, FOR THE US 79 WESTERN WATERLINE CROSSING AND THEN 26.2 MILLION FOR COTTONWOOD CREEK INTERCEPTOR PHASE ONE.
SO, UM, IN THIS PROJECTIONS WHAT WE'RE LOOKING AT IS THE YEARS 27 THROUGH 32 AND THESE ARE THE ISSUES THAT WE WOULD HAVE PROJECTS THAT WOULD REQUIRE DEBT OR BORROWING.
THE NEXT ONE, UM, ON THE ASSUMPTIONS IS ANY DEVELOPER PARTICIPATION REIMBURSEMENT AGREEMENTS THAT WE HAVE.
SO IN THAT SAME TIMEFRAME IN 27 WE HAVE UM, 1,000,008 85, 400 FOR THE MEADOWBROOK LINE, WHICH THE WASTEWATER PROJECT IN 28.
WE HAVE THE IRONWOOD WASTEWATER LINES AT, UM, A LITTLE OVER 2.5 MILLION.
UM, WE HAVE 1,000,002 OH NINE, 400 FOR STATE HIGHWAY ONE 30, A 15 AND 18 INCH WASTEWATER LINE.
AND THEN ANOTHER WASTEWATER PROJECT FOR THE KIRK TRACK LINE FOR A LITTLE OVER 2.2 MILLION.
UM, ALL THE DEVELOPER PARTICIPATION AGREEMENTS REIMBURSEMENTS ARE PAID FOR THE UTILITY IMPACT EVEN.
AND THESE ARE JUST WHAT WE OWE THEM FOR THE PORTION, RIGHT.
FOR AN OVERSIZING OR WHATEVER THAT PROJECT WAS.
AND THAT'S ALL THE ONES THAT WE HAD, UM, THAT I'M AWARE OF AT THIS POINT.
UM, AND THEN ON THE ASSUMPTIONS, WHEN WE LOOKED AT OUR UTILITY FUND OPERATING EXPENSES, UH, ONE OF THE BIGGEST CHANGES IS IN 27, WHICH IS PAYING FOR THE RECHARGE INCREASE FOR A FULL YEAR.
WE'RE IN THAT RIGHT NOW, BUT IT WAS ONLY A PARTIAL YEAR IN 27, WE'LL BUDGET FOR A FULL YEAR, WHICH WILL BE ABOUT ANOTHER 2.6 MILLION VERSUS WHAT WE'RE PAYING RIGHT NOW.
ALL THE OTHER OPERATING EXPENSES SUCH AS YOUR PERSONNEL, YOUR SUPPLIES, REPAIR AND MAINTENANCE, UM, WE HELP WITH JUST MODEST INCREASES.
UH, WE DID NOT INCLUDE ANY NEW FTES IN THAT PROJECTED TIMEFRAME FOR THIS SCENARIO.
UH, HOWEVER WE COULD PROBABLY LOOK AT THAT IN MAYBE YEAR 2030 OR 31.
BUT NO, NO NEW EMPLOYEES ARE INCLUDED IN THIS PROJECTION AND THE RECHARGE INCREASE IN 27, THAT'S THE ONLY INCREASE.
THERE WON'T BE ANY IN 28 BEYOND, UM, THERE WILL BE OUT LATER, LIKE IN YEAR POSSIBLY, UH, 2040 IF OH, WAY OUT THERE.
IF, IF THE, UH, WE JUST ENTERED INTO AGREEMENT.
JAMES CAN CORRECT ME IF I'M WRONG, BUT WE JUST ENTERED INTO, UM, A STUDY WITH MANVILLE.
UM, SO THE 50 MILLION THAT I SHOWED AS FAR POT POTENTIAL POTENTIAL BORROWING WOULD, UM, PUT THAT IN LINE IN PLACE TO WHERE WE COULD, UM, RECEIVE WATER AND WE WOULDN'T NECESSARILY NEED TO DO ANOTHER WATER PURCHASE AGREEMENT UNTIL OUT 40.
WE HAVE NO IDEA WHAT THE COST OF THAT'S GONNA BE UNTIL THE ENGINEERING STUDIES DONE.
SO WE NEEDED TO PUT A HOLDER FOR
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ACTUAL REALISTIC REJECTIONS.BUT THESE INCREASES, THAT'S INCREASED BASED ON THE CONTRACT WE'VE GOT WITH THEM LIKE THIS, THAT, THAT 2.6 MILLION RIGHT THERE, RIGHT? IT'S WITH WHAT WE ALREADY HAVE WITH RECHARGE.
CORRECT? IT'S FOR A FULL YEAR OF, IT'S BECAUSE WE HAVEN'T PAID A FULL YEAR YET.
SO IT'S NOT AN INCREASE, IT'S BECAUSE THIS WILL BE THE FIRST, IT'S A BUDGET INCREASE, BUT IT'S NOT LIKE OUR, OUR CHARGE BY THEM HAS GONE UP.
I THOUGHT CONTRACT, WE HAD SOME WEIRD CONTRACT OKAY'S, JUST A BUDGET INCREASE 'CAUSE WE HAVE TO PAY FOR THAT FULL YEAR.
SO LOOKING AT THE GROWTH RATE, UM, FOR WATER BASED ON HISTORICAL WITH THIS PAST YEAR, WE HAVE BEEN PROJECTING 5.4%.
WE'VE LOWERED THAT TO THREE PER, 3.3% YEAR OVER YEAR WASTEWATER.
UH, WE REDUCED, UM, THE GROWTH RATE FROM 5.4% TO 4.2% YEAR OVER YEAR.
AND AGAIN, THAT CORRELATES TO THE ACTUALS THAT WE HAD LAST YEAR.
UM, RIGHT NOW, AS OF OCTOBER 1ST, WE'RE PROJECTING THE UTILITY FUND TO HAVE A FUND BALANCE OF UM, A LITTLE OVER 16.1 MILLION AND THE IMPACT FEE FUND TO HAVE ABOUT 17.5 MILLION AS FAR AS THE BEGINNING FUND BALANCE.
SO SCENARIO ONE, UM, THE IMPACT DE FUND WOULD TRANSFER, UH, TO THE UTILITY FUND IN 27, 4 AND A HALF MILLION AND 28 5 MILLION.
AND THAT'S TO COVER OPERATIONAL COSTS BECAUSE REMEMBER IMPACT FEE FUND PAYS FOR PRINCIPAL PAYMENTS.
UM, WE COULD USE THE INTEREST PAYMENTS OR A PORTION OF THOSE TO, TO SEND OUT TO THE UTILITY FUND FOR, TO COVER OPERATIONAL COSTS.
IN THIS SCENARIO, ONE, THE IMPACT FEE FUND HAS A FUND BALANCE THAT BECOMES NEGATIVE IN 29.
THE UTILITY FUND WOULD THEN ALLOW OUR BE ABLE TO REIMBURSE IMPACT FEE FUND ABOUT 20.5 MILLION, UM, FROM THE YEARS 29 TO 32, BUT NOT UNTIL LATER, LIKE IN, IN THE LATER YEARS.
AND THEN THE UTILITY FUND WOULD BE ABLE TO TRANSFER ABOUT 8 MILLION TO CAPITAL IMPROVEMENT FUND FOR WATER OR WASTEWATER PROJECTS.
SO THAT YOU WOULDN'T NEED TO, WOULDN'T NEED TO BORROW FOR A FUTURE.
I MEAN YOU WOULD HAVE SOME MONEY TO USE FOR PROJECTS VERSUS BORROWING.
SO WHAT THAT DOES TO THE ESTIMATED RATE INCREASES, THIS IS TO KEEP THE UTILITY FUND BALANCED THEIR FUND BALANCE HIGH ENOUGH TO HAVE YOUR RESERVE REQUIREMENT OF 25%.
SO TO DO THAT IN 27, YOU WOULD HAVE NO RATE INCREASE IN 28, WE WOULD NEED TO HAVE A RATE INCREASE OF ABOUT 5% TO KEEP YOUR FUND BALANCE HIGH ENOUGH TO MEET YOUR RESERVE REQUIREMENT.
IN 29 WE WOULD BE AT A 27% RATE INCREASE, WHICH DON'T LOOK AT ME THAT WAY, BUT
AND THAT'S BASED ON THE 50 MILLION HOLDER? YEAH.
THEN IN 30, 31 AND 32 THAT WE HAVE A 0% RATE INCREASE.
SO I KNOW THAT'S NOT ACCEPTABLE.
SO SCENARIO TWO, SO WHAT I'M STATING HERE IS IF THE ECONOMIC DEVELOPMENT CORPORATION COULD REIMBURSE THE, UM, FOR CORP THE EXPENSES RELATED TO THE MEGA SITE DEVELOPMENT IN 27, UH, YOU CAN SEE THERE THE REIMBURSEMENT, THE UTILITY FUND AND THE DEBT SERVICE FUND.
SO FOR THE UTILITY FUND, IT WOULD HAVE A LUMP SUM ONE TIME PAYMENT OF 4,511,300, WHICH IS EXPENSES THAT THE UTILITY FUND PAID FOR THE EAST WEST FUND ROAD BACK IN 24.
SO THAT WOULD BE A LUMP SUM ONE-TIME PAYMENT, THEN REOCCURRING OR ANNUAL REIMBURSEMENTS FOR DEBT ISSUANCES.
SO THAT WOULD BE PRINCIPAL AND INTEREST PAYMENTS RELATED TO THE MEGASITE WASTE, UH, WATERLINE AND THE MEGASITE WASTEWATER LINE FOR THE UTILITY FUND WOULD BE ABOUT A LITTLE OVER 1.8 MILLION.
SO IN 27 IT WOULD RECEIVE, UM, SIX 6,344,073 AND THEN THE DEBT SERVICE WOULD RECEIVE 715,000 PER PRINCIPAL INTEREST RELATED TO THE EAST WEST SPINE ROAD.
'CAUSE THAT WAS THE MONEY THAT WE BORROWED FOR THE 23 UM, GOS TO, TO MAKE THAT DEVELOPMENT THE DEBT SERVICE FUNDS ON THE GENERAL FUND SIDE.
SO THAT'S THE GENERAL FUNDS, RIGHT? IT'S THE INTEREST IN SINKING PORTION OF THAT PAGE THAT DOESN'T IMPACT UTILITY RATES.
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JAMES WAS ASKING IS LIKE WHAT IS THE IMPACT YEAR OVER YEAR? SO FOR THE UTILITY FUND, FOR THE PRINCIPAL AND INTEREST, IT WOULD BE ABOUT 2 MILLION EVERY YEAR OUT TO 32, WHICH WOULD HIT ABOUT TWO, ALMOST 2.2 MILLION.SO THAT'S WHAT EDC WOULD TRANSFER TO THE UTILITY FUND TO REIMBURSE FOR MEGASITE, UM, YEAR THAT WE'VE DONE YEAR EVERY YEAR.
THEN ON THE DEBT SERVICE FUND, AGAIN, WHICH IS RELATED TO THE
SO IN TOTAL THE EDC WOULD BE PAYING OUT ABOUT 2.7 MILLION, UP TO ABOUT 3 MILLION OVER THAT FIVE OR SIX.
THIS IS ALL THE COSTS ASSOCIATED WITH REALLY, THIS IS TAXPAYER MONEY THAT WAS USED FOR A DIFFERENT CORPORATION YEP.
UH, IF LET'S SAY THE EDC WAS A PRIVATE DEVELOPER, THIS WOULD'VE BEEN MONEY SPENT FOR THE PRIVATE DEVELOPER TO BUILD ROADS, WATER WASTE, WATER SPEND, THOSE FUNDS, AND THEN THE COST OF DOING.
SO IF WE WERE THEN TO TELL A DEVELOPER, NOW THAT YOU'RE SELLING LAND AND DOING DEALS, YOU NEED TO START PAYING BACK THE TAXPAYERS, THIS WOULD BE THE COST OF THAT.
IS THAT RIGHT? THAT'S CORRECT.
EXCEPT THE TOP PART IS THE RATE PAYERS AND THE BOTTOM PART IS THE TAX MOVES.
SOMETIMES THE SAME, SOMETIMES DIFFERENT.
JUST SAYING, BUT IT'S NOT ALL TAXES.
SO WITH THIS SCENARIO AND SCENARIO TWO, UM, WHAT THAT DOES, IT WOULD REDUCE THE, UH, TRANSFER FROM THE IMPACT FEE FUND TO THE UTILITY FUND BY ABOUT TWO AND A HALF MILLION DOLLARS OVER THE 27 TO 29 YEAR, UH, TIMEFRAME.
IT WOULD REDUCE THE UTILITY FUND REIMBURSEMENT, UM, FROM 29 THROUGH 32, UM, BY ABOUT 3 MILLION.
AND THAT WOULD STILL ALLOW THE UTILITY FUND TO TRANSFER ABOUT 3 MILLION TO CIP FOR CAPITAL IMPROVEMENT PROJECTS TO PREVENT OR TO HELP ALLEVIATE, UM, FUTURE BORROWING OR REDUCE.
SO WITH THIS SCENARIO, AGAIN, IT, IT REDUCES THE RATE INCREASE BY ONE YEAR AND REDUCES THE TOTAL INCREASE OVER THE NEXT SIX YEARS BY 12%.
SO THAT WOULD GIVE US AN ESTIMATED INCREASE.
AGAIN, TO KEEP A UTILITY FUND ABOVE THE RESERVE REQUIREMENT OF 25%, YOU WOULD HAVE NO RATE INCREASE IN 27 OR 28.
IN 29 YOU'D NEED ABOUT 5% AND YOUR 30, YOU NEED ABOUT 30, EXCUSE ME, ABOUT 15% AND THEN 31 32 0.
UM, AND THAT'S STILL WITH THE 50 MILLION PLACEHOLDER? YES, THAT IS CORRECT.
AND IF YOU TAKE THAT OUT, I'M SORRY, I WASN'T PAYING ATTENTION TO THE 50 MILLION PAY HOLDER IS FOR THAT WORKING TO GET THE EXTRA RECHARGED WATER CORRECT.
INTO THE MANVILLE SYSTEM CYCLING THROUGH.
AND IT, AND IT IS JUST THE HOLDER.
IT'S LIKE SHE READ MY MIND, SHE'S LIKE, ALBERTA'S LIKE, YEAH, I KNOW WHAT YOU GOTTA DO THEN.
ONLY TWO AND A HALF YEARS
SO HERE'S JUST A COMPARISON OF WHAT THE RATES WOULD LOOK LIKE.
AM I COMFORTABLE WITH, YOU KNOW, EVEN AT 15%, BUT NO, BUT YOU KNOW, THAT GIVES US THREE TO FOUR YEARS TO, YOU KNOW, THINGS WILL CHANGE AND HOPEFULLY SOMETHING COME ALONG TO WE'LL HAVE AN ALTERNATIVE TO WHERE WE WOULDN'T HAVE TO THAT TYPE OF RATE INCREASE.
BUT, BUT THESE SCENARIOS THAT, THAT'S THE OPTIONS THAT WE HAVE RIGHT NOW FOR YOU.
AND THAT'S WITH CURRENT GROWTH RATES, WHICH ARGUABLY ARE, WHICH I THINK OUR HOMES ARE 80% DOWN OR SOMETHING FROM WHAT THEY WERE JUST TWO OR THREE YEARS AGO.
SO YOU GUYS HAVE VERY MODEST GROWTH.
UM, WE HAD ORIGINALLY HAD IT AT 5.4%.
WE REDUCED IT ON THE WATER SIDE FROM 5.4 TO 3.3% RATE INCREASE, UH, GROWTH, GROWTH RATE, EXCUSE ME.
AND THEN, UM, ON THE WASTEWATER WE WENT FROM 5.4% DOWN TO UM, 4.3.
AND THE
AND A LOT OF THAT WAS FROM THIS, THE WATER STUDY OR THE UM, YEAH, THE WATER STUDY THAT WAS DONE IN I THINK 18.
BUT IT WAS PRETTY AGGRESSIVE GROWTH RATES IN THAT STUDY, WHICH, UM, YOU KNOW, BACK IN 21 AND 22 WE DID HAVE SOME HIGH GROWTH RATES, BUT UH, WE'RE NOT SEEING THOSE NOW.
I TELL EVERYBODY, NOT GET INTO DISAGREEMENT ON THE EXPANSION OF THE PLANT.
THE GOOD NEWS IS IT'S A LONG TIME BEFORE WE'RE GONNA NEED TO DO THAT AGAIN.
SO WE DID DO IT WATER UNDER THE BRIDGE.
THE GOOD NEWS IS WE DON'T HAVE IN 21, 22, WE WERE TALKING ABOUT ANOTHER EXPANSION HAPPENING IN LIKE FIVE TO 10 YEARS.
AND NOW WE'RE PROBABLY WELL FURTHER OUTSIDE OF THAT.
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SO WE DON'T HAVE TO WORRY ABOUT IMMEDIATELY FINISHING THE CONSTRUCTION, GOING BACK IN DESIGN AND DOING IT AGAIN.SO WELL, AND WE WERE ALSO SUPPOSED TO SPEND ANOTHER 50 OR $80 MILLION EXPANDING TO CENTRAL PLANT AND YOU KNOW, WE REDIRECTED STAFF TO, INSTEAD OF SENDING THAT ADDITIONAL FLOW TO THE CENTRAL PLANT TO DO A BYPASS AND TO GET THE FLOW DOWN TO THE PLANT THAT HAS CAPACITY WE'VE ALREADY PAID FOR.
SO THAT, THAT WILL BUY US A LOT MORE TIME AS WELL.
SO BEFORE WE HAVE TO HAVE ANOTHER ISSUE.
AND I HATE THE 50 MILLION COSTS, BUT THAT IS A LITTLE BIT OF A REDUNDANCY IN MY MIND TO WHERE SOMETHING FROM ONE POINT TO HERE HAS AN ISSUE.
YOU DO HAVE A POINT WHERE YOU'RE PUTTING WATER THROUGH A SYSTEM AND GETTING IT OUT TO WHERE WE'RE NOT RIGHT NOW, I FEEL LIKE WE'RE ALMOST COMPLETELY CUT OFF.
IF WE HAVE A WATER MAIN, LIKE A MAJOR WATER MAIN BRAIN, WE'RE JUST CORRECT, SCREWED, WE STILL GOTTA HAVE A PROBLEM.
WE COULD BE A STAGE FIVE AS OPPOSED TO NO WATER, UM, WITH THE MM-HMM
THE OTHER THING THAT, THAT THIS STRATEGY DOES FOR US ON THE RECHARGE, UM, WORKING WITH MANVILLE IS THAT IT IT PUSHES OUT OUR NEED TO, TO BUY ANOTHER WATER SOURCE, WHICH WILL THEN RESULT IN ANOTHER TAKE OR PAY SCENARIO, WHICH WILL THEN RESULT IN ANOTHER SEVEN TO $8 MILLION A YEAR OF INSTANT EXPENSE THAT JUST GOES INTO PERPETUITY.
AND THAT'S THE, THAT IS WHAT HAS, HAS SHOCKED THE RATES WAY MORE THAN I WOULD SAY, WAY MORE THAN, UM, THE CAPITAL PROJECTS THAT WE'VE BEEN DOING IS BECAUSE WE HAD TO, WE HAD TO INCREASE OUR SPENDING BY $7 MILLION THIS YEAR OR COMING UP A YEAR, HOWEVER YOU WANNA LOOK AT IT.
WE HAD TO RAISE RATES IN ORDER TO BE ABLE TO ACCOMMODATE THAT $7 MILLION ADDITIONAL EXPENSE.
HOW FAR OUT DO YOU THINK OUR, OUR WATER SOURCE WE NEED TO START LOOKING? IT, IT, IT'S VERY, I KNOW IT'S, IT'S VERY WIDE ON NUMBERS THAT I WOULD GIVE YOU, BUT I, I'LL SAY IT THIS WAY, UH, AND I DID SAY IT THIS WAY EARLIER.
UH, OUR CURRENT POPULATION IS SOMEWHERE IN BETWEEN 40 AND 50,000.
AND IN THE HOTTEST SUMMER WHEN IT'S NOT RAINING, WE WERE USING 3.1 TO 3.2 MILLION GALLONS PER DAY OR SOMETHING LIKE THAT OF WATER.
IF WE NOW HAVE BOUGHT 4 MILLION GALLONS OF WATER MORE, AND IF WE CAN GET THAT TOO THAT WE CAN'T PUMP HERE HERE, RIGHT.
AND WE DON'T LOSE THE 800 OR WHATEVER, HOWEVER YOU WANNA LOOK AT IT, WE BASICALLY HAVE FOUR MORE.
SO WE BASICALLY ARE DOUBLING OUR WATER SUPPLY, WHICH IN THEORY MEANS THAT WE WOULD BE ABLE TO HIT POPULATION 98 TO 110,000.
UNLESS YOU HAVE SOME BIG INDUSTRIAL USERS COME IN, WHICH WE WOULD AGREE THAT WE WANT TO HAVE, YOU KNOW, SERVE NOT THAT WE WOULD BE COMPELLED TO SERVE 'CAUSE WE WEREN'T, YOU KNOW, WANTING THEM, IT WAS WORTH $250 BILLION AND WE PAY FOR ITSELF.
IF YOU'RE GONNA DO THAT, YOU'RE LIKE, YEAH, SURE, GO AHEAD.
BUT OTHERWISE, YOU KNOW, YOU DON'T, YOU DON'T NECESSARILY HAVE TO.
SO, SO I'M SAYING, YOU KNOW, YOU'RE PROBABLY, EVEN THOUGH THE PROJECTIONS AND ALL THAT OTHER SORT OF STUFF SAY, OH WELL YOU'RE OUTTA WATER AND BOB MORE YEARS, I DON'T THINK THAT THAT'S ACTUALLY ACCURATE.
I THINK IT'S MORE LIKE A 12 TO 15 YEAR WINDOW.
YOU DO HAVE TO HAVE MORE WATER AVAILABLE THAN WHAT YOU ACTUALLY SELL.
AND YOU HAVE TO HAVE MORE STORAGE AVAILABLE DEPENDING ON YOUR POPULATION.
SO I THINK OUR EXPENSES ARE GONNA GO INTO ELEVATED TANKS, GROUND STORAGE TANKS AND THAT SORT OF STUFF RATHER THAN AN ADDITIONAL SUPPLY.
AND THEN ARGUABLY WE STILL HAVE THE, UM, THE AFFLUENT TO LOOK AT POTENTIALLY DPR AND THEN IF WE DO THAT, IT, IT, BY THAT TIME THE PLANT'S PROBABLY DISCHARGING, UH, SOMEWHERE IN THE NEIGHBORHOOD, ANOTHER 4 MILLION GALLONS PER DAY.
SO IF YOU BUILT A WATER TREATMENT PLANT, YOU COULD EFFECTIVELY HAVE ANOTHER 4 MILLION GALLONS PER DAY.
YEAH, WELL, WELL LOOK, ALL ALL JOKING ASIDE, UM, WE'RE GETTING TO THE POINT WHERE THAT THE, THE, UM, THE DELTA FOR ERROR, THE VARIANCE IS, IS VERY TIGHT.
SO I KNOW LAST YEAR DURING BUDGET I PROPOSED TO HIRE A DEMOGRAPHER TO DO THE PROJECTIONS FOR OUR GROWTH AND TO USE SCIENCE AND COUNCIL SAID NO.
WELL, I'M DOING IT ANYWAY, SO Y'ALL CAN TAKE THAT UP WITH ME LATER, BUT I'M GONNA GO GET THE DEMOGRAPHER TO TELL US.
SO WE QUIT GUESSING BASED OFF OF WHAT WE'RE SEEING IN THE PAST AND WE ACTUALLY START USING PROJECTIONS AND SCIENCE AND CLOSINGS NUMBER DEMO AND YES.
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BASICALLY TO, TO GET VERY TIGHT PROJECTIONS ON WHAT WE THINK OUR GROWTH IS GOING TO BE, YOU KNOW, NEXT YEAR OR THE YEAR AFTER AND SO ON.I THINK BEFORE IT WAS AN FT NO, IT WAS ALWAYS A CONSULTANT, BUT THAT'S OKAY.
WELL I THINK, UH, I THINK THE MAN, THE UH, SOMETHING DIDN'T BRING UP, I THINK IF I REMEMBER RIGHT, THIS $50 MILLION THING TO IMPORT IN ORDER TO GET WATER TO MANVILLE IN ORDER FOR MANVILLE TO THEN SUPPLY THE HU CROSS IT WITH WATER, IF I REMEMBER RIGHT.
NO, THIS WHAT IT IS THE GATEWAY.
I MEAN IT'S, IT IS THE 2 MILLION GALLONS THAT THAT WE HAVE THAT WE CAN'T GET HERE.
THAT WE WOULD HAVE TO BUILD A PARALLEL PIPELINE TO GET HERE.
THAT MANVILLE ALREADY IS IN THE SAME WELL FIELD AND IS ALREADY TAKING WATER THROUGH THEIR SYSTEM AND ALREADY DELIVERING WATER TO US.
I MEAN THAT ALLOWS US TO GET WATER.
'CAUSE WE TOLD THOSE GUYS WE CAN GIVE YOU TEMPORARY WATER, BUT YOU GOTTA GET YOUR OWN.
BUT THIS HELPS US GET WATER TO THEM WHILE MANVILLE COMES UP WITH THEIR OWN SUPPLY IN SO MANY YEARS.
FOR GATEWAY, FOR GATEWAY, UH, GATEWAY SHOULD BENEFIT IN DIRECTLY FROM US DOING THIS PROJECT.
BUT THE 2 MILLION GALLONS IS FOR US AND THE 800,000 THAT MANVILLE HAS BEEN PROVIDING US, THEY ARE NOW OPEN TO EXTENDING THAT CONTRACT AGAIN, WHICH MEANS THAT 800,000 WON'T GO AWAY AND WON'T BE AVAILABLE TO GO TO GATEWAY.
IT, IT'LL, IT'LL STILL BE ON OUR BOOKS, BUT RIGHT NOW OUR BOOKS ARE PROJECTING THAT 800,000 FALLING OFF IN 2030 OR 2032.
SO INDIRECTLY IT HELPS THAT YES, THERE'S MANDO STILL HAS TO GET THEIR OWN WATER SUPPLY TO EVENTUALLY GET TO THAT.
AND THEY DO BECAUSE THEY BOUGHT WATER FROM RECHARGE TOO, WHICH IS WHY WE'RE ABLE TO HAVE THIS CONVERSATION.
'CAUSE THEY'RE, THEY'RE WELL FILLED AND OUR WELL FILLED ARE EFFECTIVELY LIKE NEIGHBORS.
SO IT SHOULDN'T BE TOO MUCH TO RE-PIPE, YOU KNOW, OUR, SOME OF OUR WELLS THE OTHER WAY.
AND THEN THE BULK OF THAT, THAT MONEY THAT WE'RE, THAT WE'RE SAYING IS JUST LIKE A, A HOLDER IS BECAUSE THE, THE LINES THAT GO THROUGH MANVILLE TO US ARE NOT SIZED APPROPRIATELY TO BE ABLE TO MOVE THAT VOLUME OF WATER.
SO WE WOULD HAVE TO BE UPSIZING LIKE 12 INCH LINES, THE 24 INCH LINES AND THAT SORT OF STUFF.
AND THOSE IMPROVEMENTS INSIDE OF MANVILLE THEY'RE GONNA REQUIRE FOR US TO PAY FOR JUST LIKE WE WOULD REQUIRE ANOTHER UTILITY TO PAY FOR IT IF WE ARE UPGRADING IT FOR THEIR BENEFIT.
SO THAT'S WHAT I'M EXPECTING IS TO BE ABLE TO PAY FOR THE UPGRADES AND THEN TO BE ABLE TO HAVE THAT 2 MILLION GALLONS OF WATER DELIVERED, UM, DOWN ON THE SOUTHEAST PART OF TOWN INSTEAD OF THE, INSTEAD OF THE FRAME SWITCH.
SO ANOTHER FUNDING SOURCE COULD BE THE TOUR.
THOSE IMPROVEMENTS WERE IN THE TOUR AREA.
SO WHETHER THE TOUR PAYS IT BACK OR THE EDC, I DON'T SEE HOW, I DON'T SEE A SCENARIO WHERE THE MONEY WOULD COME BACK AS LONG AS WE CAN BUDGET FOR IT.
THAT COULD EVEN BE AN OPTION INSTEAD OF IN YEAR 29 AND 30 IS LOOKING AT THE TERMS REIMBURSED INSTEAD OF RAISING RATES.
MONEY CAME IN IN 2027, THAT COULD MAKE THE FOUR, THE FIVE GO TO FOUR AND THEN 15 GO TO 14 IF IT GETS IT EARLY.
WHEREAS DOES IT MATTER IF THE MONEY COMES EARLY? IT'S JUST SITTING IN A BANK? NOT SURE I FOLLOW WHAT YOU'RE ASKING.
LIKE IF YOU, IF YOU PLUG $10 MILLION INTO UTILITY FUND TODAY MM-HMM
DOES THAT AFFECT FUTURE RATE INCREASES? YES.
SO TS HAS THE MONEY NOW INSTEAD OF JUST SITTING IN THE BANK OVER THERE.
YOU JUST TRANSFERRED OVER, YOU COULD KNOCK A FIVE TO A FOUR TO A THREE.
IT HAD TWO OR THREE YEARS TO, BECAUSE UH, THE, THE RATE INCREASES ARE A RE ARE A RESULT OF THE ACTUAL OPERATING STUFF.
SO THAT'S THE PEOPLE AND THE EQUIPMENT AND ALL THAT PLUS THE ACTUAL COST OF DELIVERING THE WATER.
SO THAT'S US BUYING THE WATER OR US TREATING THE WASTEWATER LIKE THE ACTUAL COST FOR THAT PLUS DEBT SERVICE FOR ALL THE CAPITAL PROJECTS.
SO KIND OF JUST LIKE THE GENERAL FUND, BUT IT'S, IT'S THE, THE, UH, M AND O IS THE OPERATING PART OF THE UTILITY FUND AND THE DEBT SERVICE IS EFFECTIVELY THE IMPACT FEE PORTION OF THE UTILITY FUND.
SO RIGHT NOW THE IMPACT FEES ARE STILL COMING IN AND THEY'RE STILL HEALTHY, BUT THEY'RE TRANSFERRING OVER AT A PRETTY BIG CLIP IN ORDER TO MAKE THE DEBT SERVICE PAYMENTS.
SO ANY LUMP SUMS OR OR OTHER INJECTIONS OF CASH THAT HAPPENED EARLY ON THAT, THAT KEEPS THOSE IMPACT FEES FROM DIPPING DOWN BEFORE THEY START TO BUILD BACK UP AGAIN.
YOU KNOW, IT JUST, IT GIVES YOU MORE OF A BUFFER AND THEN YOU DON'T HAVE TO INCREASE RATES IN ORDER TO PROVIDE THAT BUFFER.
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GOOD.IT ONLY TOOK ME, YOU KNOW, 22 YEARS BUT SCENARIO TO WELL REALLY THERE'S ONLY ONE SCENARIO.
BECAUSE THERE'S NO WAY GONNA, WELL WE, WE'LL SEE TO FIND A WAY TO GET THE 50 MILLION.
I KNOW IT'S JUST A WE'LL HAVE AT THIS POINT UNTIL THE STUDY'S DONE.
GET THE STUDY, GET THE HARD INFORMATION, THEN WE NEED TO WORK WITH MANVILLE 'CAUSE IT WOULD BENEFIT THEM TO TAKE AN AGING PIPE AND ALSO REPLACE IT TO 24, WHATEVER THE NUMBERS ARE.
AND SO THERE'S GOTTA BE A BENEFIT TO WHERE AND, AND IT PUSHES US OUT TO 29 SO WE HAVE AN EXTRA YEAR AND GET DUCK IN THE ROAD.
AND THEN THE TERMS HAD MORE TIME MATURE BECAUSE I KNOW MANVILLE WAS LOOKING, THEY WERE REACHING, I THINK I TOLD YOU THIS, THEY WERE REACHING OUT TO EXISTING RATE PAYERS AND ASKING THEM FOR AN ADDITIONAL CAPITAL LIKE IMPACT FEE TO MAINTAIN WHAT THEY CURRENTLY HAD GOING BECAUSE THEY GOT TO A POINT.
SO SPECIAL ASSESSMENT, WE WOULD SOMEWHAT BE BAILING PART OF THEIR SYSTEM OUT I WOULD SAY DEPENDING ON HOW OLD SOME OF THOSE LINES ARE.
AND SO, UH, THERE'S PROBABLY WAYS TO NEGOTIATE AS THEY GET CAUGHT UP THAT PAY US BACK ALSO.
SOME OF IT, WELL I THINK WHAT THEY ARE LOOKING AT IN, IN MY UNDERSTANDING IS, IS LIKE, SAY THEY HAVE A 12 INCH LINE AND IT NEEDS TO GO TO AN 18 IN ORDER TO, TO ADDRESS WHAT YOU'RE TALKING ABOUT.
BUT NOW WE GO IN IN AND ADD ANOTHER TWO MGD AND NOW THE 18 NEEDS TO GO TO A 24.
SO WE'RE NOT PAYING FOR THE 12 TO GO GO TO A 24.
WE'RE PAYING FOR AN 18 TO GO TO A 24 AND THEY'RE STILL CONTRIBUTING THEIR OWN CAPITAL FOR OH WE JUST PAYING FOR THE ANCHOR.
WELL THAT'S WHAT I BELIEVE, BUT YOU KNOW, DEVIL'S IN THE DETAILS SO SURE.
UNTIL IT ALL SHOWS UP, I DON'T KNOW FOR SURE.
THEY KNOW THAT FROM ONE AGREEMENT
UH, SO YOU GUYS NEED A VOTE FROM US OR, OR LIKE A ONE OR A TWO OR, WELL, BASICALLY IF Y'ALL SAY SCENARIO TWO, BASICALLY YOU ARE GIVEN DIRECTION TO, OR YOU'RE GIVING A RECOMMENDATION TO THE EDC TO, TO CONSIDER TRANSFERRING OR BUDGETING TO TRANSFER TO COVER THE UTILITY FUND EXPENSES.
IF THAT'S THE DIRECTION, THEN I'LL JUST LET CHANEY KNOWS THAT SHE CAN BRING IT BACK TO THE EDC BOARD FOR APPROVAL SO THAT WE CAN THEN MAKE THAT HAPPEN IN THE GENERAL OR THE UTILITY FUND IN GENERAL OR DEBT SERVICE.
THE EDC WILL HAVE A PROBLEM WITH THAT.
THREE OF 'EM HERE, HERE, THERE'S THREE OF THEM I WOULD SAY.
I WOULD SAY THAT POINT NEEDS TO LOOK STRONGLY.
I DON'T KNOW WHO'S ON THAT ONE BUT, OR WHICH NUMBER THAT IS.
BUT THEY NEED TO LOOK STRONGLY AT THINK IT'S TURS THREE, WELL RS THREE IS THE MEGA SIGN.
WHAT DO YOU, WHAT WAS THE FUN BALANCE YOU WERE THINKING FOR THE TURS? LIKE HOW MUCH MONEY'S GONNA BE IN THERE? UM, I, I DON'T KNOW.
IT WASN'T A WHOLE LOT THIS LAST YEAR.
AND THIS YEAR WE TOOK, UM, WHAT LITTLE BIT THAT IT WAS GETTING TO.
IT WAS SENT ABOUT 200,000 TO DEBT SERVICE FUND.
SO IT, IT WAS, IT WAS VERY SMALL LAST YEAR, SO I DON'T KNOW.
UM, BUT I'LL NEED TO, I'M JUST SAYING I WOULDN'T EXPECT IT TO BE LIKE A BIG NUMBER.
IT MAYBE LIKE 400 OR SOMETHING THAT'LL TAKE NOW BUT YOU'RE TALKING 2029.
IT SHOULD BE 5 MILLION AND RIGHT NOW'S WHAT I'M SAYING FOR FUTURE WE, WE COULD MAYBE ELIMINATE THAT 5% AND YOU KNOW, MAYBE SIGNIFICANTLY REDUCE THE 15% AND THAT'S THE GOAL.
BECAUSE THE THIRD PERCENT COULD GO AHEAD AND START.
THOSE PEOPLE COULD BUDGET AND GO, OKAY, WE ALL AGREE THAT OR WHOEVER THEY ARE, THEY ALL AGREE NOW TO FUND A LOT OF THAT AND REIMBURSEMENT.
AND THEN, UH, THE EDC COULD THEN INSTEAD EDC PAYING BACK THE SPINE ROAD EDC COULD TAKE THAT MONEY AND SOME OTHER CAPITAL PROJECT CITY THAT'S ON THE BOOKS.
INSTEAD OF US BORROWING 3 MILLION FOR THAT OR 4 MILLION EDC COULD THEN BUILD OUT WATERLINE.
UM, TO WHERE ESSENTIALLY GOTTA MOVE EVERYBODY'S CHECKBOOK AROUND.
BUT I HAVE NO DOUBT THERE'S ENOUGH MONEY, UM, THAT'LL BE MADE IN THREE YEARS UNLESS THE DATA CENTER INDUSTRY COLLAPSES.
BUT I SAY I HAVEN'T MET A TECH GUY YET THAT, THAT THE PUBLIC MAY NOT KNOW THIS YET, BUT THERE ARE THREE BUILDINGS COMING.
MAYOR, I'D LIKE A DIRECTION ON WHAT YOU'D LIKE FOR ME TO DO.
YOU GUYS WANNA, DO YOU WANNA ASK YOU MORE QUESTIONS OR WE WANNA NO.
MAKE A MOTION FOR SCENARIO TWO SECOND
[00:30:01]
MORRIS ON SCENARIO TWO I ARE YOU GUYS OKAY.ADDING IN THE FIRST PEOPLE I SAY? YEAH.
ANY MORE DISCUSSION? ALL IN FAVOR SAY AYE.
A ALL OPPOSED SAY NA PASSES REQUIRES YOUR ROLL CALL VOTES.
SEE I'M TRYING TO MOVE THIS OUT ALL.
SHE'S THAT'S WHAT SHE'S, THAT'S WHAT WE NEED HER FOR.
ANYTHING ELSE YOU WANNA TALK ABOUT? THANKS FOR PUTTING THIS TOGETHER.
I THINK THAT THIS WOULD BE THE MOST HELPFUL THING WHEN WE GO INTO BUDGETS, ALL THESE DIFFERENT BOARDS, EVERYTHING MEET WHERE WE COULD START ALIGNING EVERYTHING TOGETHER FOR THE, I THINK I WOULD CALL FROM MY PERSPECTIVE, THE ONE MISSION, WHICH IS TO PROVIDE THE BEST AND HIGHEST LEVEL OF THIRD TO MOST LOSS.
TO ADDRESS THE COST OF LIVING WITH OUR RESOLUTIONS OF LIVING TAX INCREASES, LIVING WATER INCREASES TO DO THAT.
THAT'S DOING ALL THE WORK THAT WE ASKED THEM TO DO.
NOW IT'S THE JOB OF THE BOARDS AND THE CORPORATIONS TO ALL GET ON BOARD.
I GUESS QUESTION, I MAY HAVE MISSED IT, BUT IS THIS PRESENTATION AVAILABLE TO NOW? OKAY.
HOW ABOUT THAT? I KNOW THAT WAS AMAZING.
YEAH, THE COUNCIL FOLDER AND TEAMS IS THE ONE, WHATEVER THEY CALL IT, OR SHAREPOINT, HOWEVER YOU WANNA LOOK AT IT.
I, WELL ADJOURN AT 6:32 PM ALRIGHT.