January 24, 2023 Budget Work Session Minutes  HAMLET CITY COUNCIL BUDGET WORK SESSION COUNCIL CHAMBERS ROOM 201 MAIN: STREET, HAMLET, NC 28345 TUESDAY, JANUARY24, 2023 5:30PM MINUTES  Governing Body Present: Mayor Council Member Council Member Council Member Mayor Pro Tem Staff Present: City Manager City Clerk Others Present:  Bill Bayless Eddie Martin Abbie Covington Oscar Sellers Jesse McQueen Matthew Christian Gail Strickland  Governing Body Remote (not counted as present or voting on matters)  Int. Public Works Dir. Robert Brown  1. Call to Order  Mayor Bayless called the meeting to order at 5:30 pm. He announced Council Members McQueen  and Stuart were unable to attend. Mr. McQueen was joining by phone.  2. Agenda.  Council Member Covington motioned to adopt the Agenda. The second was offered by Council Member  Sellers. The vote was 3-0.  3. Minutes  Council Member Covington motioned to adopt the Minutes for the. January 10, 2023 Council Meeting. The  second was offered by Council Member Martin. The vote was 3-0.  4. Work Session Mid-Year Update  City Manager Matt Christian stated the purpose of the meeting was to give an update on the previous half of the year, to determine how to proceed through the end of the fiscal year and start the conversation for the upcoming budget process. He provided updates on the 3 budget goals that were previously established: people, equipment, and infrastructure. The City implemented a market-based pay plan for employees, reinstated the police trainee program, adopted an organizational chart for outlining roles and reporting responsibilities, purchased much needed equipment to provide better services and maintain the infrastructure, launched the online payment portal, the WWTP expansion plan is underway, submitted grants for water distribution and have an engineering survey underway for1 thet future needs oft the City  Lake Dam.  1    January 24, 2023 Budget Work Session Minutes  He reported the City! has approximately $1.1 million in ARPA funds and suggested Council prioritize projects to program the dollars and close out the project this year or next administratively. Mr. Christian discussed some of the issues the City faces are the uncertainty of the County funding and the many services the City provides toi the County that are funded by Hamlet only. The Manager listed 31 key points to discuss ini the City'si infrastructure. He advised the engineers have stopped on the WWTP expansion, waiting on comments from NCDEQ for plans that were submitted: 9 months ago. The second item of discussion is water meters andi the final is ITi infrastructure, making sure the City has a modern phone system and information sharing system to allow the employees to continue Mr. Christian asked Council to provide a better understanding and give direction on the items they want Mayor Bayless inquired on the City's-standing with the State regarding the City Lake Dam. The Manager responded nothing has changed. The City received al Notice of Structural Deficiency. The action step the City has taken is to get a survey to get a better understanding of whati is taking place below the surface to get cost estimates and engineering on the needed repairs. He has sent our State Legislatures requests for  working in the future. him and staff to focus on.  consideration in upcoming discretionary funds.  Water Meters  The Manager stated the discussion of an increase in water and wastewater rates was tabled last year. He said he could not recommend a rate increase if we don't know what is going on int the system. Whatis known is that the City! has 300,000 = 400,000 gallons of water daily thati is lost. Council Member Covington advised the City has the expense oft treating the water, but no revenue is received for it. Robert Brown confirmed that was correct. Mr. Christian reported the City did send out al Request for Qualifications and received: 1 response. The biggest question is what will it cost to do water meters, but we don't know until we consider the various options available. He suggested bringing the consultant back ini to discuss the options and determine they are qualified to help us. Council Member Covington responded the City should gett the one with the most efficiencies all through the process, not only reading the meters, especially with the short shelfI life of the meters. The Manager responded the life span ofa a water meter is 10-2 20 years; the City has 4200 meters and are replacing 120 each year which puts the City on a 35-year replacement schedule for a 15-year asset. Council Member McQueen voiced his concerns that the City buildings, water used by the Fire Department and the City sprinkler systems are not metered. He addedi it isai fallacy to say the City is loosing 300,000 gallons of water. He. suggested metering the City properties to get thet true number of gallons that are not being captured. Mr. McQueen stated he realized there were issues withi the meters, but he would not be in favor of the new meters until he knows the water consumption used by the City. The City Manager suggested the City meter all buildings with any project and agreed iti isaf fallacy to say the water is lost; iti is unaccounted for. He added the City! has to dor more than they are currently doing ift they are going to run an effective enterprise. They will have to buy some type of meters. Council Member Covington asked if they could agree to get the largest City owned consumers metered before the end of the year. Robert Brown responded a 2" meter costs approximately $1200.00 but some oft the buildings do not have a meter box. He also explained the 300,000- - 400,000 gallons daily average comes from the number of gallons the Water Plant treats and the amount sold. It also includes an estimate of 80,000 gallons daily for the City's consumption. He added there was no way the City could use 400,000 gallons of water daily. Mr. Christian stated the City can have a plan for metering, but ini the meantime we have to realize the meters are 30-4 40 years old and they are under  2    January 24, 2023 Budget Work Session Minutes  reading. He suggested a parallel plan ofr metering City! buildings and having a plan on replacing the meters. Mrs. Covington said, to make a decision about the cost oft the project, theyl have to know the efficiency it will achieve and the errori it, will correct. She suggested metering the City facilities to prove the loss of 300,000 gallons. The Manager's recommendation was to have the consultants come in, acknowledging they are working on the unmetered water consumption, and ona a parallel track talk about other options for replacing meters in the ground and the efficiencies, whether replacing meters as they sit and what the cost is and the cost of a fully automated system. The Mayor said they should put a moratorium on buying meters in the meantime. Mr. Brown advised the City is only buying meters as they are replaced. Council Member Sellers inquired how much money the loss of 300,000 gallons daily equals in money. Robert Brown answered 350,000 gallons per day at the base rate, is $700,000.00- $800,000.00: annually. Mr. Sellers responded, based on that information, the City cannot afford not to do something. Council discussed the process for billing contractors, water used by the fire department tankers and fire hydrants. Council Member Martin stated, at this point, the amount of unmetered water is all speculation. Some ifit isl legitimately used by the City. The Manager responded, until we have all new meters ini the ground, it will remain speculation. Mr. Christian inquired if Council wanted the consultants to come. It was consensus of Council to notl have the consultants come at this time and to have some of the City facilities metered. Council and Robert Brown discussed the billing and procedure for tankers getting water. Also discussed was thei fact that the 4200 water meters in the ground have not been calibrated and are under reading the water consumption. The meters at the Water Treatment Plant that measure the water that comes into the plant and thet treated water that goes out are calibrated annually. Mr. Christian asked for clarification that Council wanted to meter the unmetered facilities and asked where to go from there. Council Member Sellers said iti isa a tremendous loss and the City must do something. Council Member Covington stated in was important to understand the 80,000 gallons reported for City consumption is not included int the 300,000-4 400,000 gallons. She said the public would understand if Council could document the City is paying to treat watert thati is not being sold because the current meters are under reading. Council discussed: an issue with Therafirm's industrial meter. Council Member McQueen inquired ifCouncil would have an issue with him riding with Robert Browni to look at meters and asked ift the Fire Chief could provide water usage from the Fire Department. No one voiced any concern. Mr. McQueen stated he felt much oft the unaccounted water would be from human error in reading meters, theft, major fire events and leaks. He said it is all an estimate and there is no guarantee the revenue willi increase with an automated system. Mr. McQueen. suggested checking with other cities that have gone to the automated: system to determine if their gap of unaccounted water loss closed.  Garbage Rates  The City Manager reported the Garbage Service annual budget, noti including capital, is $459,000.00. The annual revenue is $335,000.00. This gives a deficit of $124,000.00, not including a new garbage truck the City needs to buy this year. This means the tax rate is subsidizing the garbage service. Hes said it was up to Council if they wanted to leave things as they are, but ift the existing rates continue, the taxpayersa are paying for the service. Council Member Covington asked if there wasa a reason the loss was escalating. The Manager answered the City now has more accurate accounting. Some employees were in the wrong department; the Work Chart addressed the issue of having employees in the correct department and what they are doing each day. Mrs. Covington asked ift the County landfill fees had increased. The Manager replied he did noti think they had increased. Mayor Bayless asked if the City paid to dump residential garbage at the landfill. Mr. Christian answered het thought the City only pays for building materials. Last year the City did increase the fee for the trailer use. Mrs. Covington asked for the current garbage fees for customers. The Manager gave the current feei for 1 can for residential and commercial as $10.00 per month with a surcharge for extra cans. The City currently bilis for 2543 residential base charges and 179 commercial base charges. The additional number of cans billed is 150. Council Member Covington  3    January 24, 2023 Budget Work Session Minutes  asked what wasi necessary to recoup the $124,000.00. Mr. Christian answered ani increase ini the base rate for residential from $10.00t to $15.00, commercial from $10.00 to $20.00, and the extra can from $4.00to $5.00, would generate $300,000.00. Mrs. Covington commented the City needed half that amount. Council Member McQueen asked Robert Brown if he could do an audit on the hours spent on non-trash related duties by the employees that work on thet trash truck. Mr. Brown answered he would work oni it. Council discussed the number of days garbage is collected. The Manager reported the budget includes the employeesthat drive the trash truck, ride on the back of the trash truck and a percentage of the Public Works Director's salary. To answer Council Member Covington's question of what was needed to make up the deficit, Mr. Christian answered ani increase between $3.00 and $4.001 for both the residential and commercial base charge. This is information for Council to consider for budgeting.  Senior Center Services  Council Member Covington inquired if the Hamlet Senior Center received any reimbursement from the County. The Manager answered the City does receive some nominal contributions from the County; the Hamlet Senior Center's annual budget is $174,000.00. Mrs. Covington asked why our Senior Center is different from the other centers; all others are funded by the County with County employees. They have nutritionists, social workers, psychologists, and directors. Mr. Christian stated that goes in the category of services provided to County residents funded by the City of Hamlet. He added he would welcomea conversation to discuss the matter. Council Member Covington was told by an employee with the Council on Aging that all centers, with the exception of Hamlet, were funded by the County and Hamlet is the largest area ofr need in the County. Mrs. Covington stated it was fair to ask the County to dot for the Hamlet Senior Center what they are doing for all the other centers: Council Member Martin agreed but said the City had to. be ready with an alternative if the County does not agree to funding Hamlet. Mayor Bayless reported the Hamlet Senior Center gets funding directly from the Lumber River COG. The Manager confirmed they receive: $10,000.00. Mr. Christian responded he could have a conversation with County Manager Bryan Land to discuss a partnership, but he would have to know the outcome ift the County says no. Council Member Covington said first the City needs to know the funding that is goingi into the Rockingham Senior Center. She added there are al lot ofs services available to other centers that are not available to Hamlet. The Manager reported the County gives a monthly payment for $3544.00 for recreation. The City has not received the money that was promised by the County Commissioners when the budget was adopted. Since that time, they! have implemented a grant program, which he read about int the newspaper; he has not been contacted by anyone about it. Mr. Christian said, moving forward, there is uncertainty of support from the County. Council will have to make decisions based on what is known and what is besti for Hamlet, and make the tough decisions, if needed. Mrs. Covington stated it was appropriate to send al letter to the County asking when the City can anticipate receiving the funds that were promised. The Manager answered the biggest uncertainty for the City is financial stability and the County's commitment and partnership are unclear. Council Member Covington added Dr. Watkins should  be asked about his grant program. Consultant for Fire Fees and Rescue Squad  The Manager advised Council that he and the Fire Chief are meeting with a consultant to discussa a rate study. The City has a unique fee structure in our fire service, where we have the fee per structure. We also have the issue oft the Rescue Squad in what they are contributing to us versus the services we are providing, comparing that to what they are getting from FirstHealth. They! have initial meetings this week to get theiri insight as a 3r party professional opinion. The goal is to determine ift the rates the City is receiving or charging are where they need to be, based on the services provided. He will keep Council  informed.  4    January 24, 2023 Budget Work Session Minutes  Mr. Christian stated another thing to keepi in mind is if they should go to the County to increase the fire tax; last time they doubled it. Council Member Covington stated that was on the recommendation of the County Manager. The Manager said before, going back to them, we need to have goodi information to back the need for another increase in rates. Mrs. Covington suggested looking at what ai fire tax district would do. The Manager agreed and said Commissioner Smart had mentioned it. Council Member Covington suggested doing comparisons of tax rates and tax districts fori industrial users. Mayor Bayless stated when the Hamlet Fire Department goes outside of the Cityl limits, the Cityi is paying fort the employees, fire trucks, wear and tear on the vehicles and water; the taxpayers are spending al lot of moneyono out-of-town fires. Mr. Christian answered that type ofi information is needed to make good decisions. Mrs. Covington commented the Cityi is not trying to make a profit, only trying to break even. The City Manager stated this year willl be much leaner with the uncertainty of the budget. Thel last 2 years Council was aggressive with purchases to make up for some ofthe backl log. He said they will do as much as possible. Council Member Covington commented, ifappropriate, they could meet with the County to Mayor Bayless inquired ift the $1.1 million ARPA money would be spent in the next 6 months or next year. Mr. Christian responded that was up to Council. They have budgeted fora a few things that have not been purchased yet, but $1.1 million is a good figure of how much willl be available after the purchases are  show the City'sneeds.  made. It has to be spent by 2027. 5. Motion to Adjourn meeting. The vote was 3-0. Respectfully submitted, dergbnk Gail M. Strickland, City Clerk  At 6:57 pm, Council Members Covington and Sellers provided the motion and second to adjourn the  HAML oN SAN : ORTICS  5