Minutes from the Finance Review Committee meeting called JANUARY 30TH, 2025, at 8.30 A.M. THURSDAY,JANUARY 30, 2025 FINANCE REVIEW COMMITTEE MEETING - 8.30 A.M. Present: Joey Ginn, Chairman Steve Novakoski Greg Frith Debbie Ashbrook Vickie Gainer, City Manager Kiki Roman, Director of Finance Amy Myers, City Attorney Apologies/Absent:Al McCambry, Vice Chairman Item #1. Call to Order. Chairman Joey Ginn called the meeting to order at 8.30 a.m. Item #2. Chairman's Report. The Chairman had nothing to report. Item #3. Approval of Minutes dd 08/24/24 & 11/19/24. Motion by Mr. Novakoski To approve the minutes for 08/24/24 & 11/19/24 meetings. Second to the motion Ms. Ashbrook On Vote: All in favor / none opposed Motion Carries Item #4. Discussion regarding Water & Utilities Rates. The Director ofFinance explained and gave an overview ofthe report regarding Water & Sewer Rates. Ms. Roman recommends same change for the water department as last year. Recommend a new solution for the sewer department due to recent emergency repairs that affected her projections. Using 3.4% inflation rate. Zero dollars for emergencies. Discussion ensued. Ms. Roman - used SRF funding model including first year only of possible sewer expansion debt repayments from 2029. The city manager explained that the commission paused the sewer expansion with a view to the city meeting with the county to do a feasibility study to link in with their new sewer plant. The city is now holding a second meeting with the county about this study. Mr. Novakoski asked for figures. Ms. Gainer explained the funding options discussed with Rep. Griffin who has spoken with Bob Majke, and we have put in an application for $1m for this and we are working with our lobbyist Missy and are waiting for the House and the Senate to review our application. Alternatively, the county has also agreed to put together a partnership with us where we contribute to their expansion. Mr. Frith - are we. joining the county? Page 1 Minutes from the Finance Review Committee meeting called JANUARY 30TH, > 2025, at 8.30 A.M. Mr. Lightfoot = the county would be the wholesale treatment provider, and we would pay the county a fee each month, just like we do with our water. This fee would be passed on to the residents via their rates. Mr. Lightfoot instead of $50m to expand spread over only our users/residents, it is likely to cost $75m spread out between the county and city users/residents. We will know more once the study is complete. Ms. Ashbrook - sO you anticipate it being less? Mr. Lightfoot - Yes. Ms. Ashbrook - what time frame? Mr. Lightfoot - Anticipate about 9 months before we can bring feasibility study information back to the commission. Ms. Roman -ifa any of our information changes then her methodology will change, and she will rework the numbers. Discussion ensued. Mr. Ginn = when was the last time you increased garbage pickup? Ms. Nickell - 2016. Ms. Ashbrook = can you borrow from one fund for the other? Ms. Roman - we have been doing that, but we should not be doing that. Discussion ensued, and Ms. Roman re-explained the chart for base rates comparisons with other cities. Ms. Roman - These increases break even over 5 years and do include capital projects but not emergencies. Mr. Novakoski - perhaps we need to combine the departments, SO it all falls under the same umbrella? Mr. Lightfoot -it may be an auditing requirement to keep them separate. Attorney Amy Myers - Don't think you can but would recommend you do not for transparency purposes. Mr. Novakoski this isn't a fair comparison because the stormwater assessment is not being included for comparison. Mr. Ginn - because in past years we did not increase the rates we are now playing catch up. Mr. Lightfoot - keep in mind the other cities do not have a sewer plant. Ms. Ashbrook - if we don't do this, then is Mr. Novakoski suggesting we go back and cut things out ofthe budget? More discussion ensued. City Manager two funding sources (surtax and impact fees) that haven't been looked at for this. $6m in sewer in impact fees currently. Impact fees can only be used for new infrastructure projects. Mr. Novakoski = agrees in theory with the idea of partnering with the county. Ms. Roman - recommendation is only required the next time we meet in 3 months. Ifyou have any questions, you have time to ask them. Mr. Ginn going back to not having made increases for a 2-3-year period, this is why these increases are SO big compared to how low they could have been. Doesn't really feel there is any choice but to increase the fees appropriately. Mr. Frith = is in favor of moving the sewer plant off the bay and going forward with the county partnership. Page 2 Minutes from the Finance Review Committee meeting called JANUARY 30TH, 2025, at 8.30 A.M. Mr. Novakoski - have you thought about privatization oft the sewer plant? Mr. Lightfoot - the rates would go up much more significantly. Mr. Lightfoot relayed the history of other cities who had gone that route, and it had not worked out well for the city. Those much higher costs are passed on to the residents via their rates anyway. Motion by Ms. Ashbrook To recommend to the commission to go with the recommendation. Second to the motion Mr. Ginn The Chair opened the floor for further comments. Mr. Novakoski - Feels the recommended increase is too much. On Vote: 3: in favor / 1 opposed Motion Carries Item #5. Discussion regarding! Stormwater Assessment Scenarios. The City Manager showed the excerpt of the video from the commission meeting that covered the Stantec Stormwater presentation. Mr. Novakoski - Spoke about a scenario ofthose on a fixed income who bought their large properties 30years ago and have been in this city for those 30years. This does not mean they have the ability to pay more than someone who lives in a town home. He also will be paying far more in taxes to begin with. None of these scenarios take these types of cases into account. He feels multiple tiers do not work. Ms. Gainer stated that the commission had directed the city manager to work with Stantec on a study to look at additional options and tier structures, especially to spread it out more proportionately. None oft these assessments throughout the year have funded any capital programs, only operational cost and maintenance. Any capital projects the city has completed have been funded through grants and impact fees. Ms. Ashbrook - The ERU is looking at the square footage of the house, not the impervious like the previous study. EBU (previous) versus ERU (this study). Mr. Novakoski - these older houses are still larger and older and owned by people who are retired and on fixed incomes. Ms. Ashbrook - how would you do it without tiers then? Ms. Gainer - Studies must be done legally and fairly. We can't just pick and choose parts of any study. Stantec was given instructions per commission of what they would like to see in the stormwater study. Mr. Novakoski - feels the assessed value of a home is a much better indicator SO maybe the tiers should be based off assessed value. Mr. Lightfoot - we did have another methodology about two years ago based on improvement value, however, the improvement value of some of the commercial properties were much less than the residential. Mr. Novakoski = would like to find a way to look at it on the human side and not just a number cruncher. Ms. Gainer - We did look at the improved value methodology. But with this methodology we had residential homes fees that were much larger than many commercial properties. The recommended methodology would be a one-time increase and would not need increases into the future and could get capital projects done Page 3 Minutes from the Finance Review Committee meeting called JANUARY 30TH, 9 2025, at 8.30 A.M. Ms. Ashbrook = what is the commission wanting from this committee today. Ms. Gainer - this isj just to inform the committee and to keep you updated. The Commission has made no decision at this point. Ms. Roman = should there be any changes then Stantec need the decision before June 2025. Ms. Ashbrook currently we do impervious property, SO if anyone makes changes it will be included? Mr. Lightfoot yes, provided they pull the correct permits when they make the changes. More discussion ensued. Ms. Roman - Stormwater fund is in a negative $132k as of today and it will only get worse over the year, and we have received $1.4m in the bank in assessment fees SO far. Mr. Novakoski - he has seen where they are potentially going to allow people to pay their taxes in advance for a discount. Ms. Ashbrook - SO the difference between the 50% and 70% is the application ofthe surtax ifyou use the 50% scenario. So, is 50% Scenario preferred? The City Manager said yes, and the commission seemed to lean in that direction as well. But we will just have to wait and see. Item #6. Committee member comments. No comments. Item #7. Public comments. There were no public in attendance. Item #8. Discussion about next meeting date and time. The date for the next meeting is set tentatively for March 18th at 8.30am, subject to change if required. Item #9. Adiournment. The meeting adjourned at 10.03 am APPROVED THIS VgHDAY OF WAARCH 2025. 14i Joey Ginn, Chairman ATTEST: Tlrlu Vickie Gainer, City Manager prepared by Cicelia Rushing Page 4