I'm sorry. What happened? What happened? So they grabbed the red and the blue. I just showed my share of the blue. I'm sure it's like so. I know what I hope in real life is going to be important. I'm going to appreciate this. I'm going to be an hour away from this. I'm going to be a flusher. I'm going to get you a seat. we're going to take a single piece of your flush and tap, and it's very relevant to me. I'm going to take a single one. I'm not going to take a single one. I'm not going to take a single one. rise for the Pledge of Allegiance. This meeting is hereby call to order. Please rise for the Pledge of Allegiance. I want to give my thanks to the public, town council members, and of course the staff for coming out this evening. Topic of tonight's special meeting is fiscal year 2026, financial advisor presentations and utility rate modeling. And let me start by introducing from Stantec, from over at the end of the table there. We have David Hyder and then from our financial We have David Rose and Kyle Oax. Actually not in that order. Excuse me. So if we're ready to begin let's dive into the utility rate presentation. All right thank you Mayor. Members of the council. Again, my name is Dave Heider, I'm with Stantek. And I'm going to take you through the utility rates modeling that we've conducted this year. The primary focus of the discussion will be on going through a number of different scenarios for both the water and the sewer fund based on discussions with staff and looking at some results this evening. So just in terms of the financial planning process that we use to look at the, both the utilities, there's really three key steps in that process. The first is to identify the revenue requirements. So we do have a financial model that I'll be talking about this evening that provides a 10-year projection of revenue requirements So that's essentially what is it cost to provide? Water and sewer service and that includes operating costs capital investments including existing debt service and any future capital projects that would need to be addressed That gives us a sense of a 10-year forecast of expenditures on the system. And then we compare that with a revenue forecast. So given where we are today with rates, anticipated demands and customer usage on the system, as well as any development within the town we've developed a forecast of the revenues. And then we can compare that revenues with the revenue requirements to determine whether we have sufficient revenues to meet those revenue requirements and also evaluate do we have adequate reserve balances as well as if we need to meet any debt service coverage requirements. So that's the overall process. In terms of some modeling assumptions that we've made this year, we are assuming that for each fund, we need to maintain an operating reserve target of nine months. So a minimum balance of nine months of reserves within each of the funds. That's essentially 75% of the 12-month target that we've talked about in the past. When we look at typical customer usage and show bills, we're essentially using 8,000 gallons per by-monthly period for a typical single-family customer. That's what most of your single-family customers use. In any scenarios where we're including meal stacks, we're assuming that meal stacks that grow at 2% per year throughout the forecast. In terms of usage on the system, the demands, the volumes of water that are used, we are assuming an ongoing decrease in volume sold. This past year you did see a pretty level demand on the system, but historically we have seen a declining use on the system here in Percival as well as throughout the country. So 1.5% through 2028 and then 1% after that. barring we're doing, we're assuming a 30-year loan with a 4.5% interest rate. And then finally, just to give you some perspective in terms of what a rate increase provides. If you do a 1% increase in water rates, you get about $26,000 additional revenue. If you do 1% increase in sewer rates, you get about $40,000 in additional revenue. So finally in terms of one of the key drivers for the financial plan is the capital improvement projects that need to be completed. And so these assumptions we've included as it pertains to the CIP is we are using the revised. What the hell are you guys doing? I just watched last night's meeting. You are the funding the police, the protect this town! How can you do that without all of you deciding on this and having people talk about it? Having a public talk about it? No! I am not going to stop talking! This is ridiculous. I came out of the emergency room and could be in the last night. So I didn't have a chance to talk to you guys about this. But this is insane. What do you say? Please continue. You are against it. So in terms of the capital improvement plans, so reinvestments in the water and sewer system, we are using a revised scenario, which essentially there was original budget of capital improvement plan. I know there are some revisions. And that essentially includes cash funding of capital projects in the near term as well as grant funding of near term projects The modeling does assume some borrowing you have some pretty significant capital improvements on the on the water side So we are assuming a borrowing of about 5 million in 2027 and then a borrowing of 23 million in 2029 Part of the borrowing in 2027 will be reimbursement of some cash that's're going to use to fund the Well number six F waterline and the short hills well projects So that cash will come back to the utility and essentially be reimbursed on the sewer side in total about five million dollars worth of borrowing You can see that the specific years again. We are some boundary investment. So essentially, you'll be replenishing the capital fund with a boundary investment of about $1.58 million for the screen replacement project. So with all that, we'll now jump into some of the scenarios. And hopefully, everybody can see this. And I'm going to go through more detail on this first slide just because each of these subsequent slides will look similar in terms of this is the financial modeling from the water system. So this is for the first scenario up at the top, we're again proposing a 10 year projection period here. So we're looking at fiscal year 26 through 2035. All the way up its app, we've got the water fixed rate plan and the sewer, I'm sorry, and the usage rate plan. And that's essentially the anticipated increases in rates under this particular plan. You can see below that the meals tax, and I'll try to see if I can use my pointer here. You got the meals tax under this scenario, we're not assuming any meals tax. We're also showing the typical single family customers by monthly bill, again using 8,000 gallons per by monthly period, what it would be under this particular plan, and then what it would be on a cost per day basis. And then down at the bottom, we've got some diagnostic graphics, the first one being the operating cache balance. And so this is where we want to try to maintain this line here which is 75% of the operating expenses. The blue bars are essentially where the cache balance is under this particular plan. You can see under this plan that essentially we would be depleting the cache balance within the water fund. In terms of the middle graphic here, we're showing revenues versus expenditures. So the black line is the cash in the system and the orange line is the cash out. And so whenever our cash out is above our cash in, so the orange is above the black, we're going to be depleting our cash balance. To the right, we have just the expenditures by type. So you can see the blue bar or the blue section here is our operating maintenance cost on the system. The red is the debt service that we have to pay. And then if we have any cash-funded capital that's showing up here is the light blue. And then finally down at the bottom, you just have your capital improvement plan. So all the way to the left, these are the annual anticipated amounts for the water system and capital investments. The middle graphic here just shows how those investments are funded. So you do have some ARPA funds for 2025 projects. You're using some cash to fund in 2026. And then the red shows the amount that you'd be essentially borrowing for capital projects. And then finally, the borrowing amount is over to the right when you'd actually be doing those borrowings. So again, in 27 and 29. So this plan is demonstrating what we talked about last year. So there was a 16% increase that was put in place. Water rates were increased 16% in 2025. We had talked about needing a 16% to 14% 12, 9, and then sevens and threes over the projection period. If we went with that plan, given the increases in the capital investments in the water system, we're showing we wouldn't be able to maintain that minimum balance of 75%. So again, this is the previously proposed rate plan. So now I'm going to flip forward to another plan which shows what we're doing now is we understand that in fiscal year 26 there will be no rate increase. That's the scenario we've assumed for the rest of these. So zero percent rate increase in 2026. We're assuming some meals tax dollars are transferred into the water fund 620,000 in fiscal year 26 and that those meals tax would stay in place for three years. Under this plan in order to maintain that cash balance of 75%. Oops. Sorry. We would need to do increases waiting until 28. You have to do about a 20% increase, a 25% increase in 29, 30, and then 25%. And all of this is really anticipating this significant borrowing and the funding of the capital. You can see again the amount that we'll be borrowing, the needs of the system ramp up has that new debt comes on, and that's the reason why we have that significant water rate increases in those future years. The next scenario I have assumes that the meals tax stays permanently or at least for the 10 year projection period. So again, what the rate increases would need to be. Obviously, because we'd have additional revenues on the system, we can do lesser rate increases. Keeping that mills tax in there and again, we're assuming that mills tax grows at 2% per year. So in 2028, you'd have to do about a 12% increase, a 20% increase in 29, and so on, so forth. And you can see what that turns into in terms of a typical customer bill. Another scenario we ran was alternative D. And this is a scenario where we're assuming continual meals tax, so meals tax for 10 years. We're also assuming that the western loud and rec center happens. And that by fiscal year 2028, they're in place. They're using about 20,000 gallons per day in 2028. And then an additional 1,000 gallons per day in fiscal year 29. We're also assuming that they would contribute $1.3 million worth of availability fees for the water system. That would allow you to reduce some of that borrowing, so that's how those funds are used. And so under this scenario, we would essentially be able to wait until fiscal year 29 to do rate increase, and that would be 15%. and then a 25, 27 and a 13, I mean subsequent years, but again we're trying to maintain that 75% balance within the operating fund. And then we did run one more scenario just to say, well what if we just move forward, meals tax is in place every single year, 2% growth in meals tax, what if we just do an inflationary increase every year? So 3% increases in water rates every single year. We would be able to maintain the cash balance until fiscal year 30, where we would drop below that 75% target, and then we would essentially be out of cash in fiscal year 31. And again just to drive home the point if we look at the middle graph here the real reason is because our cash out our expenditures on the system are growing pretty substantially in that fiscal 29 to 30 time frame due to the significant capital projects we're looking at close to $28 million worth of capital projects for the water system So 3% under this scenario would not allow you to maintain a cash balance We ran one more scenario just to say well what if the Western Loudon Rec Center happens and we do that 3% again steady state Under this scenario, assuming it happens because of the additional revenues that they would provide, you'd be able to maintain that minimum cash balance until fiscal year 30. You drop below it in fiscal year 31. And then essentially, you'd be out of cash in the water fund by fiscal year 32. So I've got a summary on the next slide that just shows each of the water rate scenarios. So again, the previously proposed and what the water rate adjustments would be if we use three years meals tax when we would need to increase rates, if you are able to have recurring meals tax throughout the projection period, if the loud and rec center comes in, and then obviously the last three, we demonstrated that they wouldn't generate sufficient revenues to be able to maintain that balance, but if you just did 3% a year, it obviously would be a 3% across the board. So one item that we typically show is just to kind of provide a perspective and what is it cost? What's the unit cost of a thousand gallons of production of water? And so given the cost on the system, the current cost in fiscal year 26 is about $21.78 per thousand gallons for water. So if you generate that, that would cover your full revenue requirements in the system. That's made up of about $17 of that is operating cost. $4.34 is debt service, existing debt service payments, and then you have a little bit of minor capital. When a typical customer, residential customer uses 8,000 gallons on a bi-monthly period, they're essentially paying about 13, 20 per thousand gallons. And so clearly, we're not currently covering our cost for residential customer. If you're a high user, so if you're somebody that uses 24,000 gallons on a bi-monthly period. You'd be paying about 18, 83 per thousand gallons. So still below the cost of providing water service. So now I'm gonna turn the page and we're gonna talk about the sewer fund. Sewer fund is a little bit different in terms of there are some capital needs in the system, but a lot of the capital investments happen in the past. And now it's just really making sure we have sufficient revenues to cover the operating cost plus the existing debt on the system. And so I won't go through the excruciating detail of this slide again, but essentially it works the same way. rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of is a little bit better than we projected last year. and then being at inflationary levels or 5% each year going forward. The performance of the sewer fund is a little bit better than we projected last year. And so under this scenario, if we were to apply, you can see we'd be above that 75% target and actually above our 100% target by fiscal year 33. And so assuming you went with this plan, you'd be able to back off those increases in future years. Part of the reason is because obviously the cash in is greater than the cash out and therefore we're generating some balances on the system. You don't see that spike that we talked about on the water system. Things are pretty steady in terms of existing debt payments and operating maintenance costs. So going through the scenarios for scenario B, we essentially did the same analysis where we assume no rate increase in fiscal year 26. What if we have meals tax for three years? Meals tax of 1.14 million. It's going to be 26 and then growing it 2% per year. Again, trying to maintain that 75% balance in the operating fund. That would require 15% increase in fiscal year 27, followed by 15 and 28, 15 and 29, and then by fiscal year 31 we would essentially be at 3% rate increases. Next scenario is if we assume meals tax stays. Obviously, we have more revenue on the system. We're including meals tax for 10 years. Excuse me. We would need a 15% increase in 27, 10% in 28, and then we're at 2.5% going forward. And again, that would allow us to maintain that cash balance. We ran the same scenarios, assuming that the western loud and rec center has demands on the sewer system as well. Again, 20,000 gallons per day, 28, and then 1,000 gallons per day in fiscal year 29, contribution of 1.1 million in availability fees. Obviously, this is with recurring meal stacks. This is the best scenario. We would do a 10% increase in fiscal year 29, 27, sorry, and that inflationary increases each year after that. So just to reiterate, in terms of the sewer system, it is kind of getting the revenues up to meet the expenditures in the near term and then we really are looking at more inflationary increases going forward. If we were to do a 3% so scenario E here just to recurring meals tax over the 10 year period with a 3% inflationary increase in rates, you would not be able to meet that 75% target and essentially by 2035 you would be out of funds within the sewer fund. And then the final scenario is if we were to have the Western Loud and Rec Center come online, keep the meals tax in place and do 3% increases. This one you can see your staying below that 75% target but you're not ever running out of funds and it's fairly level so you're getting pretty close to being sustainable under that type of approach. So again, less pressure on the sewer side. All of those scenarios are summarized here. So starting at the top, we have the proposed last year, so increases more significant in the near term. with meals tax and no increase in fiscal year 26. What the increases would need to be with the recurring meals tax with Western loud and rec center coming in. And then ultimately just with a 3% obviously those are going to be 3%. In terms of the unit cost per thousand gallons for sewer, that's $33.40 and fiscal year 26. You can see in terms of the components of that, the operating costs are about $17. You do have a fairly significant amount of existing debt. So almost half of it is existing debt service of $14. And then a little bit of minor capital at $1.61. So again, total gross cost, $33.40, with some miscellaneous revenues on the system, your net cost of sewer is about $30. And your typical residential customer, if they're using 8,000 gallons per bi-monthly period, is paying about $24 using 8,000 gallons per bi-monthly period is paying about 24 dollars per thousand gallons. So the last section of the presentation I have is just to talk a little bit about your water rate structure. There's been some questions in terms of how it impacts various customer classes. And so the first slide up here just demonstrates the current water rate structure for usage. You have what's called an inclining block rate structure. So you have four tiers, the more water that you use, you're stepped through these tiers. So just to give an example, if you're a residential customer and you use 8,000 gallons, 7,000 gallons would be charged at the first tier. And then once you jump into tier two, 1,000 gallons of your 8,000 would be charged at that second tier. Obviously, if you use more than that, you'd be stepped into the third and fourth tier. Non-single family customers are charged similarly, but it is scaled based upon their meter size. And this is consistent with the potential demand that they can place on the system, as well as the fact that they pay a much higher fixed charge. So if you're a three inch meter, you pay a substantially higher monthly, sorry, by monthly fixed charge than somebody that's a five eight inch meter, and that's essentially equivalent to the amount of demand that they can place on the system. So we looked at fiscal year 24, and we looked at how much water is sold at each of these tiers for each of the customer classes. So you can see for single family, they all fall into those tiers. The majority of the usage does fall into the first tier. So 92 million gallons falls into the first tier. 27 million falls into the second tier, and then a little bit falls into tier three and four. But not a substantial amount. In terms of non-single family, you can see the distribution there of the volumes. But what's more telling is just looking at it at a percentage basis. So of the percentage of volume that falls in each of these tiers, 74% of all residential volume falls into tier one, 22% falls into tier two, and then you have 3% and 1% fall into tier three and four. This is not the case with non-single family. They do fall into those higher tiers. About on average about 53% falls into the first tier and then about 25% falling into the second tier. And then you can see a distribution of about 10% on the third and fourth tier. So one of the bottom line takeaways here is that your non-single family customers do fall into the higher tiers, which cost more in terms of the unit rates for those amounts of water. And the final takeaway is just to look at the revenue that's generated. So this is the revenue that's generated from each of the tiers, given how much volume falls into those tiers, which then allows us to calculate essentially an effective unit rate. So the effective unit rate for water sold to single family customers is about $10.36. And then you can see the effective unit rate for non-single family customers, which is higher. And this is because they're falling into those higher tiers. So effective unit rate anywhere from 1343 for 2 inch to 1199 for 3 quarter inch. But ultimately do want to demonstrate that they do pay a higher amount given the fact they're falling into the higher tiers. There's been some concern in the past in terms of potentially non-single family not paying as much as single family. So with that, I would be happy to turn it back to the council and answer any questions. Council member Rainer. All right, I have three questions. First two is for Kyle and Deb and Davenport. I am currently looking in front of me at a Meals Tax memo. You both sent in 2023 saying that we should not mix funds and move Meals Tax to our utility fund and mix funds. It would hurt our credit ratings earlier this year, the vice mayor said you told them differently. Can you please clarify this? Councilwoman David Rose here. So first off, we think that the best way to run the utility enterprise fund is for recurring revenues to meet recurring expenditures. And that is usually user fees and connection fees if there are any. That said, if you're going to use some meals tax and it's going to be doing that in lieu of having it be self-supporting, we don't see that as ideal. However, if you are going to do that, we are okay with that so long as the general fund from where those dollars are coming from is going to be itself self-sustaining and is going to have ample recurring revenues meeting occurring expenses. that time that you're referring to, it did not appear to us that if you took monies from the Meals tax and put it to the utility tax, utility fund, excuse me, there would be ample recurring dollars in the way the general fund was set up at that time to make the general fund again, sustainably self-supporting. So hopefully that clarifies what we were saying. Okay, so I mean I'm reading, say it's going to hurt our credit ratings and you've seen the general fund has to be self-staining and two years ago you said it wasn't going to. So as you see it today, you think our credit rating will be fine. Now that they're cutting services. So what I'm saying is that as you are doing this budget this year, what we want to see is that the general fund, recurring revenues, whatever they are, whatever the combination is, meets recurring expenditures in the general fund. If that includes meal stacks, what have you? If it includes no meal stacks, from our perspective to maximize your chances for the long run to keep your excellent credit ratings in the general fund, which is what you have two AAA ratings can't get any higher. And that is because you have several factors going into that. Number one, historically, you've had balance budgets. You've also had ample, fun balance reserves. the extent that you use those fun balance reserves as a if you want to call it replacement for recurring revenues that's not a best practice. Can you do that for a single year and be fine? Probably. Well that means that the rating agencies will immediately downgrade you. I don't think so. But what they do want to see is what is the plan for multiple years? Is there something sustainable or is this a one-year trek that you're doing? Now, having said that, I've been doing this now for almost 45 years. I've seen it. I've been involved with this county since the early 80s. There've been good years, been bad years. There are years you may have to use fun balance to balance the budget, but there is a bigger plan. There's a longer term plan. So it's not a black and white, And again, what we don't want to see is the idea that you take Rob Peter to pay Paul. That doesn't get us anywhere in the long run. It would hurt the overall town's financial stand. Great, thank you very much. My next question is actually for Director of Engineering, Andrea. So we have some scenarios in here that include the Western Rec Center which is not real right now. We don't even have real numbers on it but say we do talk to the county and they are interested in connecting with us with water and so do we even have the water to supply to them? In order to... In order... No, no. So we have just preliminary started to live this because up until a week or two ago, they said they were going to be providing their own water. So we have not done any modeling yet on the water. They, what we do know is they are offering three small wells for a total of 25 gallons per day. I'm sorry, 25,000 gallons per day. So that's total for the three wells? Yes, total for three wells of five gallons per day and two 10 gallons per day. Those are small wells. So they have given us usage amounts of an average daily use of 10,000 gallons. I should probably 10,000 gallons per day and with a max usage of 40,000 gallons per day. So if those numbers are correct, then additional water will have to come out of the town's system. And do we have that? Not narrowly, no. And what is the cost to even have that infrastructure be put in like? If so If like basically we would need to find an additional well to help provide the water and build that ground water treatment facility That is in the CIP for FY 27 I think in FY 28 Okay, so So really having these scenarios in here is to me quite inappropriate because we don't even have even basic numbers really to put in To what our revenue would be we don't have the water display right now. We have infrastructure. We'd have to build it Truly just something we shouldn't even be looking at right now Thank you Also if we do bring something like bring something like this online, and I asked Jason this a couple of minutes ago, and I know it's difficult to quantify, but we are very close, and you said it's more residential to have to go to a 24-hour service, the wastewater plant because of service levels. Could this possibly tip us over into needing more personnel? The personnel question, I probably can't answer that right now, but the volume that it looks like it would be projected to bring to the wastewater plant. I do not think it would put us, I'm pretty positive wouldn't put us in a 24 hour, for a 16 hour operation. It would. It wouldn't. It wouldn't. OK. But can I add one thing to Wells? Wow, while I'm here. The well depths for these wells that the county has, one is 600 feet. And I believe the other one is 680 feet. They range between 680 feet. That would be the deepest wells that we would bring into our system. With that volume of the one well depth, the 680 feet, it's five gallons per minute. So they went deeper, they didn't get much of a volume. The other well, TW 5 is 600 and they got 10 there and then TW6, they got gallons per minute was 10. So they, if we were to entertain bringing this type of these wells into the system, they would be by far the deepest wells that we have. And I don't know if that comes into play for maintenance. It does on our hands. And I didn't know if that was in the modeling. Yeah, the only pretty high level in terms of the modeling. We did assume that increase in volume that you'd see a proportional increase in your operational cost. So we are factoring in some increase, but it's not above and beyond what the current well operating maintenance costs are. It's just proportional to the volumes. So if it's 20,000 gallons per day, we did a proportional to your total annual volumes. So we did factor in some increase in operating costs, but it may not be sufficient. Council member Wright. I'll have a question about the wells. What's the least productive well we currently have on Councillor Daye, whatever it is? I can, I probably turned over to Andrea, but hopefully she'll agree with me. It's probably one of the wells that we have offline right now, and that's the Mountain View Well that we got from the county several years ago. And I believe it's a yield of 25. So that would be these are by far. They does. So our average wells are producing triple digits or in double digits. And most likely, I mean, that's what I'm looking for. Yes, you have some wells that produce well over 100, around 100,000. So practically these wells would wouldn't really provide anything to us 25 gallons I mean they're weak wells. Yeah Additionally, I want to just add is so this would be three wells in one treatment facility One of our other well facilities is four wells, so a similar type of thing that is treating four wells and we're getting over 200,000 gallons per day out of that facility. So you'd be paying operational maintenance costs similar for one that produces four or five times more. So I want to ask questions. So, what did we get the FY28 anticipated opening date for the vaccine? What did that date come from? If I may, that date come. So we are in deep discussions with the county and that date was provided to us about a week ago, 2028. That would be open and operational by FY2028. The goal is for them to have the rec center by 2028 operational. Which is July 27. Correct. I don't know if it's July. It's fiscal year. So, do you now have 27? I believe the date was annual calendar year, 2028. And I can confirm that. I'm just saying that's different from what the report is because reports based on an army of July of 27 start fiscal year. Let me confirm that I thought it was calendar year FY28, not FY28 but calendar year 28. So I guess then happen to work with the county and build structures, or oversee some of those structures for the county, and back then they were never on time. And you know, the facility is big, obviously, as a huge potential of not being on time either, especially if there's a water and issue, so from a modeling perspective, it's this thing's two years behind. I mean, potentially if it's the talking calendar you know we're talking fiscal year it could be substantially behind based on reports. Does being all the numbers move or does it affect even more the time between now and when it actually does open? Yeah, we could certainly run that scenario, but it would move, you know, essentially, once they're on, we're getting the revenues from the availability fees, which is reducing the borrowing to some degree, and then also that recurring revenue of them being user so that being pushed out we would need to just essentially move the rate increases forward slightly under that scenario. Andrea, you mentioned that their average daily use is between 10,000 and 40,000 and I know you said all of this is preliminary, but do you know on what they're basing that usage right now? I don't have that report in front of me, but they, so the town has not done water modeling yet for this facility. Loudoun County only requested us to do sanitary sewer modeling and when they gave us that request, they gave us those numbers 20,000 for daily average and 40,000 for max use. So, and then we had stopped all investigations and looking into it because they said they were gonna provide all private facilities, meaning provide their own water and their own sewer, septic and wells. And just recently, the last week or two, they had mentioned they wanted to connect to public again. So we were just preparing to meet with them again and to do actual modeling for the water system because we haven't even done that at all, just for the sanitary sewer. So there's cloud more and then there's Dallas South. I'm not sure what the different amenities are for each of those, but they're fairly large and they could be in comparison to the. They use those numbers to provide us with those numbers. Okay, that's what I was saying. And then you mentioned to find an additional well, is that only because of the Western Mountain Rec Center or are we looking to do that anyway? You said we would need to find an additional well. Right. The wells that we have, you know, kind of have spoken for, and even if we currently do not have them within our distribution system today, that is for in- in- in- town boundary usage, meaning for what is here today and for possible in fill and for max use. So to include anybody else into the system, whether it's an annexation or another property outside town boundaries, we would need to find an additional source. Thank you. Do we have any kind of assessment of the potential for the additional wells that are out there on the Aberdeen property? Obviously for in-town use, should it grow or should we encounter drought conditions? I'm not quite sure of your question but I can tell you this is the town did receive a $580,000 grant funding for PFAS. One of those options, one of those requirements in that scope of work is for finding an alternate water source. And so we are gearing up right now to do additional exploration out at that, you know, out at Aberdeen to try to find another well. Okay, thank you. Town manager, have there been any discussions with Loudoun County around the issue of whether they might have differential metering based on some of their needs? So for example, would They have they discussed a alternate rate structure for outdoor watering needs, which obviously do not include sewer, or has it been just a straight assumption that however much they're using water, that would be what we're metering for sewer, because there's so such thing as a sewer meter. Good question. So the data that he provided was just regularly, but we have committed to sitting down with them in a workshop to determine exactly what the number would be and what we could be to support them. Alternatively, from what we are seeing they would need to have a higher capacity wells to make this possible. This being the western loud and wreck center. So to the degree that they can partner with us to explore additional wells those will be also brought up in our negotiations and conversations with them. All right, I'll turn to Dalin Port now. How do the rating agencies see keeping our reserves at in the water and wasteware at 75% of total costs that is for debt service and for operating costs versus 100%. Mayor I would say this systems like yours having something at that 75% is a solid number 100% is preferable but again recognizing the relative challenges you have as long as we can sustainably keep it at that roughly 75 percent we're comfortable with that let me just give a perspective however I've been working with loud and water since 1983 At that time, we set policies, and we've amended those policies. Loud and water is the one of the, if not the highest rated water authority equal in the country. They have between 200 and 300 percent. That's their range. So they are very, very strong. We don't need to be in that mode, but again, just to give you a sense of when you're looking at the absolute strongest, sustainable, it's not atypical to have a solid one, to even one and a half to two years, cushion as it relates to dollars. But we again, we are comfortable all things being equal that having something in that. the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of the rate of They're not prescriptive. They don't say, be this or be that. But numbers in that range are considered solid. Okay, thank you. Is the number that's considered solid in any way related to the size of the system? Well, again, you know as well as I do how much larger loud and water is, okay? My color. And still, for years, we've been in that two year to three year level. So I would say not necessarily. However, I would then say that on a modest size system like yours, we really do not want to go below three quarters of a per, you know, three quarters of a year. What ideally, would I like to see a little bit more? Yes. But again, when you're a system of yours, that will be adequate, I would say. It should be adequate. And let me say this, and you know it's well enough. If the rating agencies tell us that that's a weakness, we'll pass that along to the manager and he'll pass that along to counsel that's viewed as a weakness. So we would certainly do that. Okay. And there was an earlier question about draws on the general fund reserves. And you spoke of not wanting to consistently make draws against the reserves. How does that factor in against our 30% policy limit? So again, you've done a very good job of growing the general fund revenues and having it sustainable and so you have excess dollars. You're considerably above your, we'll call it your floor, if you would, of the unassigned fund balance. Having draws, though, on that, in and of itself, is not a cause for concern if it's used primarily for one-time purposes such as capital. It is a problem if it is used for what would effectively be recurring expenses. So I want to clarify that and make that clear. And that is something that the rating agencies are very clear about. They want to know that if we are, which we are, above those levels, and you've done that and built that up, if you're going to use that, for as I said earlier, for a one-time year that for something you need to, or to fill the budget for a year or so, as you evolve to a longer term plan, I don't see that as fatal by any means. But they will want to know, okay, if you're going to use that to take care of some recurring, as you evolve, let's say, to a longer term sustainable plan that we see, and I've seen that over the years, but not to rely on that to say, okay, we're going to go just for example, you've not said this, but to say, well, we can use excess dollars for the next, let's say, picking a number here, not suggesting three years. And then in year four, we've run out of those dollars. Now we've got to do something because we really have a structural imbalance and had one. That's where local governments get in trouble when they kick the can and that's something that we can only we can do. I'm not elected, of course, nobody elected me. They wouldn't. I just try to bring that up as something for y'all to consider. Very good. Thank you. Council member Rayner. I understand if you can't answer this because it happened less than 24 hours ago. Does it concern you at all that last night the majority voted to move 100% of our meals tax over to the utility fund and then reduce our utility fees by 9 and 11% with no sustainable path after that. Does that concern you at all? So I did hear about that earlier today. If that is indeed the situation, then I have two points to make. Number one is that if 100% of that meal's tax is going to the utility fund, the question is what is going to backfill that meal's tax loss if you would to make sure the general fund is sustainable? So that's the first question. I don't pretend to know that answer. You folks, I would take it. Know that answer if that's what you're gonna do. Number two, if you are going to reduce the utility rates, again, David Heider here, our colleague is not in our firm, but we've known David, I've known David for years. Again, if you're going to be going to be a candidate for the COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 I thought it was around 3.5 million, but I could be wrong. If that is the kind of number that allows for a reduction in those rates for a given year and again allows with those dollars coming in to be sustainable and to take care of your needed capital then fine. But if it doesn't, then that doesn't make much sense to me as a fiscal sustainability. So I would defer to David and ask if I don't know if he's run the, again we haven't even talked today, but if that's the case then maybe you have to run those and see if indeed that new source of revenue versus a drop in some of the rates still allows things to be done. The only thing I would point out is again for the citizens and I think you folks know us, we're not here to tell you what projects you should do, should not do, when to do them. All we can do is to take the information provided from the city manager or the town manager, I should say, and say, these are when you have to do capital projects. And we try to show you the most affordable way to do them. That's basically what we tried to do. We don't advocate for any of these things so hopefully that's a little bit of an answer for the council. Council member right? So just got a lot of information that the county's website shows the western rec centered FY29, not 28. And then if you throw some delays on there, looking at some of the modeling, obviously, potentially it puts us with no cash, you know, instead of 30, sorry, but it move from 31 to 30, or even sooner depends on correct theoretically. All right. Question for staff as far as when it comes to availability of water. I'm assuming that, I don't understand. The type of business tends to be our largest water user in town right now? Is it restaurants or is it? And let's take schools out of the equation. Let's take the schools out of the equation. Yeah. You don't have to be exactly what would just would it be. I would say probably the car washes up there and then probably then your, your restaurant, not your restaurants, but can you say apartment complexes? Yeah, apartment complexes and that type of car carry and then your grocery stores on down the line. Okay. Yeah. The, you know, so if we would have a redevelopment of let's just say 21st Street, our seven new restaurants opened up in town. Took over businesses that are currently very low users. Took up space that is a very low water usage. And he got converted to some like a restaurant and stuff. I mean, how close are we to not even being able to provide water for what we have? I mean, is it that close so we could take on 50, 20, 30, more residents with that ever problem? And I'm not looking for exact numbers. And I don't want to put you guys on the spot. I'm just trying to get a better idea of exactly what our buffer is. When we do our water modeling, they have, we have some of those placeholders in the model so that we know that we can serve those places. And they, and our planning department, uses tells us what type of new business can be, can move into an area for redevelopment. And that's looked at with that model. Good. I'm assuming it wouldn't, but when buildings get upgraded and have to put in fire suppression systems, theoretically that's not a big use. It's not a use at all until it activates. Is that a water modeling issue? Is that taking any concern into what availability? I don't think that's availability. It just does it whether they have their appropriate fire flow. So for example I know the model say West End Main Street that's an area that could redevelop because there's you know a lot of property there with just a couple of businesses. That area is within our model with possible usage numbers that correlates with the zoning. Okay, thank you. I have, I don't know if this will help answers some of the projected average demands. This is overall, our daily for 2024, this we ran the Jacob's Water Dem demand project projections against our actual data that we have in house. The 2024 projected average daily demand was 653,653 950,000 gallons per day. That was projected the actual was 599,599,497,000 per day. And I can send this email out to the team if that's all right to the council. The max demand was a million 46 projected in 2024 and the actual max demand was 7, almost 799,000. So So I don't know if that helps, but I can get it. Vice mayor. Mr. Heider, obviously a lot of new data will be provided to you for input. What is generally speaking the turnaround on utility rate modeling? I know there's a lot of work that went into this. How intensive. Yeah, we would just need to make sure we have given the changes that were discussed last evening. We can generally do it in a day we want to make sure we have quality control and make sure the assumptions are all validated and incorrect. But yeah, it doesn't take us long to turn it around. Thank you. So staff first would have to make the adjustments that we talked about last night. There's other adjustments I think that could impact some numbers and we've already started working on them, but it'll take us several days to work through those numbers. All right, thank you. All right, are there any further questions on the utility rate modeling? I'll take that as a no. Based on tonight's presentation, are there any markups that anyone would like to suggest to the current proposed plan? As I mentioned last night, you have still for this year's zero utility rate increases and you're moving everything over but I still believe that we should at least with inflation have what it would look like if we just add 3% and sort of zero just to refill our savings account like and move with inflationary pressures because we need to refill our CIP account. So I would like to see what it would still look like if we raised because I know you're decreasing it but I would like to see what it would like like it's a zero or negative but 3% because I still think we need to fill up our savings account for capital projects. Yeah, we did. I mean, I think your point. Council Member is. Yeah, we did. I mean, I think your point, Councilmember, is we do have some scenarios where we ran only at 3%. But we were under the impression that that would be run indefinitely. So 3% instead of any. Yeah. Under our assumptions that you can't maintain a 75% balance with just a 3%, you'd have to do 3% and then some higher increases in the future. And I will, you know, we have an out of the opportunity to run what happens if we reduce rates in 26, but in my mind, unless we can reduce costs somehow or we eliminate capital projects or we find revenue somewhere else I don't see how you'd reduce rates now and not have to have higher rates in the future would be just my logical First take on it. Okay, that's essentially that's what member desires have modeled? Very good. very good. Well thank you very much everyone. I greatly appreciate your insight and all your answers to our questions. And at this time, I would ask if there's a motion to adjourn. I'll make the motion to adjourn. I'll second it. All in favor? Any opposed? Thank you.