Minutes from the Finance! Review Committee meeting called JULY15F,2024, at 10 A.M.  MONDAY,ULY1,2024  FINANCE REVIEW COMMITTEE MEETING -1 10A.M.  Present:  Joey Ginn, Chairman Debbie Ashbrook Vickie Gainer, City Manager Kiki Roman, Director of] Finance Steve Novakoski  Apologies/Absent:AlMcCambry, Vice Chairman Chairman Joey Ginn called the meeting to order at 10 a.m. Item #2. Chairman's Report. The Chairman had nothing to report.  Item #1. Call to Order.  Item #3. Approval of Minutes dd 04/11/24. Motion by Ms. Ashbrook Second to the motion  To approve the minutes for April 11th, 2024, meeting.  Mr. Novakoski  Ms. Roman sought aj point of clarity on the query by Mr. Hall about the $5m library funds and asked ift that figure should actually be noted as $1.9m. The City Manager advised that at the time she had corrected him regarding the amount he queried and that the minutes should be amended accordingly. Amended Motion by Ms. Ashbrook To amend the minutes to read "Mr. Hall- the $5m that was. set aside for the library - is that being sidelined for now? The City. Manager corrected. Mr. Hall saying it is only $1.9mj for the library, andj yes, it is being sidelined, but the funds are still in the  City's account. " On Vote:  Second to the amended motion All in favor/none opposed  Mr. Novakoski  Motion Carries  Item #4. Discussion regarding the Water and Sewer rates increases per the 5-vear plan The City Manager explained the purpose of the agenda item, recommending the committee agree to Mr. Ginn reminded the committee oft the reason the 5-year plan was originally made last year. The Director of Finance explained that things have changed, and we have a more than $780k emergency repair for the Sewer plant. She has re-done the analysis, which she passed around. Mr. Novakoski - how did we fund the $780k emergency? Ms. Roman - from the sewer budget. The City Manager said some other projects were also put on hold so the emergency could be funded. Ms. Roman - ifv we are going to start the expansion in 2028, the best option at this stage is going to be The City Manager advised the state revolving fund rates are much different to market driven Attorney - advised that many oft those revolving credit loans are forgiven after about 10 years The City Manager advised that Mott McDonald will be assisting with setting up the bond Attorney - Mott McDonald does really well with DEP funding applications.  established in 2023. stick with the 5-year plan.  al bond, in the absence of obtaining a grant or other funding.  rates. Iti is very. inexpensive money.  ofrepayment. application.  Page 1    Minutes from the Finance. Review Committee meeting called JULYI 1ST, ,2024, at 10 A.M. The City Manager- - wel havej just paid off one bond and are paying down the others. We won't Mr. Ginn to what extent are we in the red with the Sewer and Water department? Ms. Roman is not currently concerned about the Water and Sanitation departments and will let them know when they Reduced debt by $20m since she came on board. Both oft the surtax bonds were paid in full in. January 2024, the 2017 Capital Improvement bond will be paid offi next week, itl has al balance of $3.2 million. The next bond we have toj pay is split three ways between water, sewer and general fund. This one is While Ms. Roman was pulling up the figures online Mr. Lightfoot continued discussing various issues Ms. Roman - Sewer has spent $3.5m this year so far, including the recent emergency spend. Revenue isc currently $3.9m. Base rate Increases from last year are bringing in about $150k additional revenue each month. Usage increase bringing in about $lm so fari this year. Wel have $3.5m in expenditure. As Mr. Lightfoot-this) year we: are still working on1 the HW390 utility relocates too, which is an unfunded mandate. Also expect a consent order from DEP to cover multiple other projects. SCADA is software to assist the department with tracking any potential issues in the sewer system. We have SCADA on the water plant and reuse plant, but nothing on the Sewer. Mr. Ginn - how much would it cost? Chris Mr. Novakoski -1 before looking at the rates, we could potentially have two different revenue streams, e.g. New construction should be charged the new and higher 5-year rate immediately and then iti isnot Ms. Nickell -1 itr may be complicated in the billing oft these, and different charge codes will need to be used. Mr. Novakoski explained how he saw the process working. The new construction rates would  borrow any: money until we. need to for this project.  do become a concern to her.  next in line to pay off but is al little more complicated because iti is split three ways.  Mr. Ginn - asked for the negative fund amount for sewer. and projects within the Sewer department.  oftoday, the Sewer department has $106k cash in hand.  S $550K  The City Manager explained the process of unfunded mandates from the state.  passing an increase onto them effectively.  actually stay consistent at 5 years because they will come in at the 5-year rate.  Ms. Nickell -i iti is likely possible.  Attorney - The city could not legally do it that way. Mr. Ginn - what are the impact fees used for? restrictive on what they can be used for. schedule updated it to $150. are paid and added as revenue.  Ms. Roman strongly recommended that they do not increase the impact fees because they are highly City Manager - when was the last time we increased the sewer deposit? Ms. Nickell - this year's fee Ms. Nickell -t the $50: service fee for new-builds isj potentially ai fee that can bei increased substantially. Ms. Nickell = we disconnect water every two weeks for non-payment. And those reconnection fees Ms. Roman - what about the $3 credit card fee we charge, are people complaining? Ms. Nickell- -no, Mr. Novakoski - how many customers are auto-billed? Ms. Nickell said about 4300.  City Manager - SO do we. keep thei initial service fee? Ms. Nickell -yes.  people are still just using their credit cards.  Mr. Novakoski - sending out paper copies is expensive, isn'tit?  Ms. Nickell -1 the paperless billing is nearly ready tol be used. She is currently working with Munis to figure out a way toi make it work. Likely to save $65k per year from no longer having to use. Arista for  paper billing. She hasn't had many people take up paperless billing option.  Page 2    Minutes from thel Finance Review Committee meeting called JULYI 1ST, 2024, at 10 A.M. Mr. Novakoski - how many people do we have email addresses for? Ms. Nickell said a few and the Ms. Nickell - isl hoping tol have a soft advertising oft the paperless billing on social media soon. Mr. Novakoski- - explained most of the people he has spoken tol have no idea how much they pay and Ms. Nickell - when paperless billing eventually goes live the intention is to send out emails and text  list is growing.  are on their auto bills. messages.  Ms. Roman - handed them two new models to review and discuss. Mr. Ginn what are you factoring into your expenses to get to this?  The committee reviewed the models.  Ms. Roman - option 1 includes the $782k emergency pond expenditure, a 4% inflation rate, but not any other future emergencies. Option 2 also includes $4m for debt service in fiscal year 2029 for the Mr. Novakoski - the real inflation number is much higher than 4%. He would prefer to use 5% Mr. Ginn - what does the 4% equate to roughly in revenue? Ms. Roman about $300k in revenue Mr. Lightfoot - Panama City got a $150m State Revolving Fund load with a 25% principle Mr. Ginn - where do you think we will be with Sewer at the end of the fiscal year? Ms. Roman - we are about half the way through the fiscal 2025 budget process. She will be bringing it to commission in. July and September. Pushing out the decision on these rates now will push out the timeline for Ms. Roman will calculate the requested numbers and Chris will get the remaining project figures by the end oft this week. The Committee will reconvene to consider these numbers and calculations. The City Manager reminded them that to increase any utilities we: need to notify the residents through Attorney -i ifyou want utility rates increases it should ideally be before the end of August, SO when they go. into September budget hearings it will be settled already. Ms. Roman would like to discuss Ms. Roman - 4% inflationary rate for 2025, and projecting less inflationary for the 2026 year. The City Manager advised that the commission already passed the five-year plan that needed a new Ms. Roman said using the numbers from last year we will be short $966k over a: five-year period from Stantec's original proposal because of pervious deviations from their recommendation. Ms. Roman also has concerns about the expenditure assumptions because Stantec's proposal assumed a 2.5%  plant expansion.. inflation.  Mr. Novakoski - sO these models are just for sewer. Ms. Roman - Yes.  just on the sewer side.  Ms. Roman - brought up the potential future sewer project bond. forgiveness. He feels Lynn Haven would qualify for something similar.  passing the: new budget.  onel billing cycle - which is usually about 30 days.  any utility rate increases at the August 27th commission meeting. Ms. Ashbrook - why $9.32 in 2025, and then sO much lower in 2026? Ms. Roman asked what they wanted to do with stormwater. resolution every year. The attorney concurred.  inflationary rate.  Attorney - said he thinks they knew we would be short and accepted that. Ms. Roman handed out aj proposed new schedule she had worked out.  Mr. Ginn - how do you cover the deficit?  Page 3    Minutes from thel Finance! Review Committee meeting called JULY: 1ST, 2024, at 10. A.M. Mr. Lightfoot- we can reevaluate our HMGP master plan at the end ofthe 5: years to offset any deficit Mr. Lightfoot mentioned the new developments that are now happening and will eventually be Mr. Lightfoot - mentioned how he has been using impact fees on the new projects instead of the  from this plan.  generating assessment fees to add to the revenue. revenue from the stormwater assessment funds. Item #5. Committee member comments. Item #6. Public commentary.  None. None.  Item #7. Discussion about next meeting date and time.  Date for the next meeting confirmed for July 10th at 8.30am 2024 (teams meeting).  Item #8. Adjournment. The: meeting adjourned at 11:19 am  APPROVED THIS_ loth DAYOF suly  2024.  Jgéy Ginn, Chairngan  ATTÉST:  Vickie Gainer, City Manager prepared by Cicelia Rushing  a  Page 4