City Council - Regular Meeting

Okay. And uh Miller Campfield get paid out of the proceeds, but we don't have to pay them. They get paid out of that transaction. That's, you know, that's pretty standard. We got all kind of principal forgiveness.

Is that the same person who's been over for 50 years? Cancel. That's No, no, no. system that he doesn't know Robertson mayor they're our financial advisor and they have been our financial advisors for 50 years too cities cannot even function without a gracious financial advisor

Charles, you know, Don't

Good morning. Good afternoon. Yes, I had a long day. here. Yeah, that hail's been hailing all afternoon. Like little tiny

ice. And then the workshop will finalize.

Yeah. Yes.

I'm just You know, how many people They're not working.

They like the company. Exact. Standing single on the line. I said square.

Yes. When I notice a line item that is in red all the way across, does that indicate that something that's current? So this is how much Just a little hair. Yeah, I know.

Good. Yeah.

Nobody. Damon was and something doesn't have one of these. We got to make our own copies.

Extras. That's what we not That's what we are not extras. Wow.

We're extras.

Extras. I mean, actually multiple times does not mean there Are you good over there? Yes, I'm good. Thank you. Thank you, attorney. Somebody cares.

That's what he said. Oh my god. Not too long. I laid down a minute. I was up. All right. Uh, so, uh, and I don't know about, uh, Mr. Martin, but as long as one of them show up, we got to about 6:15. I don't know what time it is. 6:05.

This is just a workshop. I don't see why they got It's not like Does it just present a should be all right? What's that mean? What's that?

Since it's just a workshop, it's just a workshop. Yeah. If you want to receive information,

thank you so much You too.

Excuse me. Hello everybody. Good evening. It is 6:09. calling the lead to order. Um, not exact. Can you call the roll, please? Councilmani. Councilwoman Martin, did you anybody hear from her? Councilwoman Monica here. Council Pro Robinson.

Council President Thomas, he we got an email. He said he wasn't going to be here. Don't let us none of us come outside. Did she say what time? Give her give her five more minutes. move forward. She'll probably be here for the regular. Okay.

This is just a presentation. So, all right. So, um from the amended workshop items to be discussed, utility financial protection report presented by utility financial solutions LLC. Do we have them present? My name is

Good evening. Good evening.

Can they hear us? Mark, you online? Yeah. Just quick introduction. didn't have battery city. I just wanted you to know that. So, just a quick intro. Um, so UFS, we're required by the ACA to have a third party conduct rate analysis every year and so they did it last year. They were uh reviewed and approved by Eagle and this is this year's presentation of the rates. So, Mark is here to join us and he's going to take us through the report that he's prepared here.

Thank you so much. How are you Mark? I'm good. Hello everybody. I really appreciate the opportunity to be here to present this again. And I want to start uh well, first of all, last year we did uh a full-blown rate study. And what that means is we did a long-term financial projection and something called a cost of service study. And a cost of service study identifies how much it costs to provide service to each type of user. The our based on our recommendation, we recommended just to update the financial projection this year uh because the cost of service study typically doesn't get it uh updated each year. It's usually a three or four year process um before it gets done. Uh so what you're going to see is an update of the financial models that we did last year. I want to start uh just telling you a little bit about uh myself and utility financial solutions. Um Utility Financial Solutions started in 2001. Uh so we've been around about 25 years. Uh we do rate studies. That's our pretty much all we do. for electric water, wastewater, telecommunications, and gas utilities around the country. We've done work in 46 states. We teach financial planning courses for several different national organizations such as the American Public Power Association and the American Waterworks Association. And what I want to do in going through this, I I first want to talk about a lot of the positive changes that have happened in Highland Park over the course of the

last 12 months. And I'm going to go through that in my modeling. Um, also some future uh potential savings that we think may occur at least to a a degree. And so I'm going to go through that in my presentation. Um, let me go ahead and pull it up. Um, share. I got to send a request. Just one other thing as I go through the presentation. Um, I would prefer if anybody has questions as I go through to please ask me them at that time. Um, as far as anybody from staff or on the council, if that's okay.

All right. Can everyone see my screen?

Yes. And I think you have the uh PowerPoint slides in front of you. My intention is not to go through um my intention is to go through the first eight slides and I can go through the remain other ones at a very in a very high level because those are basically updates from last year. But as I mentioned earlier um our primary purpose uh was to update the financial model. And what we do in looking at that is we look at we project out revenues and expenses and how they're going to change over the next five years. And we do that for each individual utility. So we do that for the water utility, the wastewater and the storm water utility. and also for your billing services. And we look at the financial health of each of the utilities individually. But then for purposes of the presentation for today, I've combined all of those services, all those utilities together so you can see them in a basically a combined fashion. And you're also going to see uh a rate plan. In other words, uh I'm not recommending that we need to adjust rates this year. So no rate increases are required this year. And I'll explain why in in a few slides. But um in the future years if other things that we think may happen don't happen we may have to adjust rates next year and the year after. So and you'll see that in our modeling also. Now whenever you do a financial projection um you always have to start off with

certain assumptions on how things are going to change moving forward. things like what the inflation rates going to be, what we feel Glee is going to, how they're going to change their water rates and their sewer rates and what the growth is going to be for Highland Park. We also look at what the um CIP is and what that is is construction, in other words, capital improvement programs. And Island Park has significant capital improvement programs that you can see it's $18 million followed by, you know, pretty much 14 million every year after that. And those are to be funded primarily from grants. Yeah, you see that uh uh about 2 million a year is projected to be financed through rates or cash reserves and the remainder is to be um financed through grants. Now, this is a very interesting slide and this is where I'm getting into the positives of what's occurred over the last year. Um over the course of the last few years, uh Metro and um the staff at Highland Park has been installing what's called master water and master sewer meters. And the reason for that is to get better information on that we can send to Gleewa so they can calculate our wholesale water and sewer charges more accurately. And this year with the with the wholesale sewer master meters, I believe they were installed and we got you know data for like six months of last year

um since I believe it was April or March or something last year and Glee has um accepted the data for those sewer charges. So, if you look, and I'm going to highlight these numbers, um, in 2026, we paid GLEA about $6.1 million in sewer charges and water charges. You see, most all of that is sewer. This year, uh, Gleewa increased sewer rates by 4.3% and water rates by 5.8. So, what that tells me is it without these master meters, our charges from Glee would have gone from 6.1 million to $6.4 million. But because of the installation of the wholesale meters, the the charges from Glee are actually going to decrease to 5.4 million. A savings of $967 million. And that savings is projected to occur every single year. All right. Now, when you factor in the rate increase, we're going to see a $692,000 reduction in the chargers because Gleewood did increase the rates in total by 4 and a.5%. But those meters have saved us almost a million dollars a year. Now, there's another thing which is even bigger than the meters that we're working on right now, and that's something called CSO facilities, which is combined sewer overflows. To give you a brief history of that, back

in the late 90s, um the wastewater treatment system uh for Detroit was during um heavy rains. it was uh taking on too much flow and it was uh washing it out basically to the to the river. And um so in order to prevent that uh they were required to install holding tanks or holding basins throughout the system so that when rainfalls occurred that they could temporarily hold that excess um water until the treatment plant would be able to treat it. So when the court was when that order came in the late 90s, the calculation was done based on population and um miles of sewer main within each of the communities, whether or not they were masked or metered. There were a lot of different factors that came into play in estimating how much of that those cso facility charges would be allocated to each community. And the city of Detroit took on about um I think it was 83% I believe of all the costs related to the CSO facilities. the remaining 17% was allocated between um all the other users in the system and High Highland Park was allocated 2.065% 065% of all the costs related to the CSO facilities

that was established in the late 90s and it was never changed and never updated even though the court order appears to have the ability for Glee now to change those numbers when we calculated it based on last year's flow from the master meters and of Of course, this is can change each year, but in that in one single year, we feel that Highland Park shouldn't be allocated the 2%. But should be allocated something closer to 4%. So, right now in the water charges for 2027, Highland Park is going is projected to pay about $1.8 million. And we feel that number should be about 339,000 or about $1.5 million less than what's currently being charged. Now, because of the um discussions that we've had with Gleewa, what Met uh Metro's had with Gleewa, they their intention is to form a committee to try to determine how these CSO facilities should be allocated between the different users. And um what we're fairly certain of is the the end of that process there will be a reduction. Uh the amount of that reduction is something of course that we don't know but we feel that there will be some reduction in that in the future. And I hope I'm not overstepping my boundaries by saying my bounds by saying that. But right now it is something that in my opinion is very much incorrect.

So I want to just stop here for a moment because this is a very a lot of numbers on this slide and I and it's very very important and I want to make sure that um everyone understands what this is saying. Mark, I'd like to make a statement. It's Kathy Square. Um, thank you uh for addressing the CSO issue. The city has submitted to the One Water Partnership, a two-year progress report reflecting the information that you're conveying today. We sent it in October uh of last year. Uh we were tired of waiting and so we sent a letter to the Gleewood board and Glee has and the one water partnership has since convened the committee of uh the uh suburban communities including Highland Park. We had the first meeting uh two weeks ago and we have a meeting this Thursday where we will be uh having another presentation uh because we believe that based on the meters uh which state law says you have to follow if they are in the ground and they are in the ground there's no phasing in of meters. soon as you put the meters in the ground, you have to start dealing with those meters. And we believe, like you believe, and thank you for supporting the city um because we believe at a minimum that we have uh a $1.5 million decrease. Now, that's probably for the current budget, but our request was for Well, I'm sorry that

your presentation is for next year's budget. This is for next rates which Cleveland has already adopted but our request is for the current year. So that 1.5 million for next year is one number but we have a higher number for the current year that we're in. And so we have the full expectation that we will get a reduction for the current year and for the uh the future year. So I wanted to say that those meetings are in full force. Uh we do have a presentation. You you got the two-year report. The council received that report and uh we have done a pro a PowerPoint presentation because now we have suburban communities there and quite frankly they're interested in rate reductions as well because 25 years has been it's been a long time since the numbers have been looked at for not only Highland Park but for the other communities. So, we've been getting some pretty good feedback from them because they're they have population changes, they have density changes, they have storm water changes. So, I think this is going to be a a success. So, thank you for your support.

Yeah, thank you. Um yeah, this is significant. I mean um the we are we they did give us this year because of the master meters. Of course this is more quantifiable that $967,000 reduction. Um but that one a half million that's the big one. That is the big one. And you know we're hoping that that will that we'll be able to get that resolved um in the very near future. So

we appreciate that reduction. We do we are not turning our nose up at any reduction. Uh we believe that you know as we move forward the meters will be more fine tuned and we will get more exact on water and sanitary. But at at this current time, the big money, millions of dollars is in the cso and and we feel that we have to deal with that because the whole future of the affordability and the ability for the city to run the department and and rebuild the infrastructure and to be able to support all of the necessary improvements lies in that million and a half,2 million dollars that we we that we're overpaying now.

So, thank you for that. Um, I if it's okay, let's Is there any other questions on this? I'm good. No, I'm good. Okay.

I'm going to move on then to the financial projection. Um this is the combined the financial projection for all four of the utilities well three of the utilities. Um and if you look at 2027 right here this is the projection without any rate adjustments. All right. And just to talk about the things that are look like debt coverage ratio with no rate adjustments were able to fund our debt appropriately. Um so that's not an issue. Now um now what is an issue and what I'm struggling with and and you'll see this in a later slide is based on UFS's recommendations at a minimum the those three utilities should have a cash reserve at a minimum $3.7 million. Um but there are several things that have occurred over the years. Obviously, you've been dealing with a lot of things like the csos that that you've been charged for gleewa and also the rate adjustments that were recommended last year were not implemented. Um, as a result of that, even with the rate reduction, um, we're only looking at a cash reserve of about a million dollars at the end of next year. So, but it it's better than it is now because right now it is almost zero. Um, so that means that we're taking a step in the right direction. However, moving forward, those cash reserves are projected to stay the same.

You can see that and that's due to inflation and that's b primarily due to inflation and increases in gleewood cost because those additional reductions are not in this projection. Okay. Um you can also see that moving forward you're going to have a difficult time making your debt service payments because your debt coverage ratio falls below one. So, uh, if everything stays the same, that tells me we're going to have to do something with rates next year without some form rate relief from GLEA.

Now, this Oh, go ahead, Mark. Before you move on, I have a a statement. How are you dealing with government land in the city that's not paying its bills? Right now, we have the state land bank and the the county land bank went up to Lancing and passed the law so they don't have to pay for their their storm water on their property. Yes, we're talking hundreds of pars.

The problem that we have isn't an imaginary problem. The problem we have is a real problem because we have these hundreds of parcels that are not paying the city pays the storm water for its property. Um, we also have a very large user, specifically the Model T factory, which is a 83 acre parcel.

They don't want to pay their bill. We're tied up in the court of appeals just sitting up there now because they they don't want to pay and the city is appealing that decision. It's just sitting there. So, we've got significant properties in the city that are either government owned that private ownership is causing this issue that you just raised about how much money we we don't have on hand, right?

How a rate analyst factors that and figures that out. One thing I do know is state law prohibits people from paying others bills. So I don't in your education or what you you know your 25 years experience but something needs to be done. I don't know if it's legislation, but there's no way that those dead beats that bill should be passed on to the other users of the system. So when we talk about raising rates going forward, I hope it's not taking dead beats bills and putting them on to the users of the system. So, I don't know where that is or if anybody's even thought of that or if it's factoring into any kind of rape making in America or beyond, but it needs to be dealt with because that's exactly what happened to the suburban communities when Gleewood claimed they were paying Highland Parks bill, that fantasy bill for nonpay. That's against state law. Now, they didn't complain about it at the time because, you know, they're afraid to complain to Glee, but they this is an issue and I see this as a big issue in rate. So, I just want to put that out there. Want you to hear that from me because I cannot support putting government non-paying users bill on the bills of the rateayers in Time Park. It's not gonna it's not sustainable.

Yeah, it's uh you bring up some very very good points. Some of which are theoretical um which I'll talk I'll touch on and some of them are practical like in the case of the unpaid stormwater bill. um you know the unpaid stormwater bill from a rate analyst perspective um the way a rate person does that is they look at historically how much are uh basically bad debts is what it's called and we bring that as an expense in your situation because um that's a very large user you're referring to that is a a lot of money. Um and um you know, we just hope that the court decides the correct way on that, you know. Um you know, I did do some work on the storm water fees and um a couple years ago and it'd be interesting to see how all of that comes out. Now, there's another thing that you mentioned which is totally correct. you in Michigan, you you cannot have um a feebased organization such as a utility, water, waste, water, and storm water subsidizing property taxes or subsidizing a general fund. Um, and Michigan doesn't have a specific law on this, although it's it's nationwide. It's a standard. It's called there has to be appropriate what's called nexus and appropriate proportionality when it comes to setting rates. And what that means is nexus means that you

benefit from it. Proportionality means that you pay the proportionate share of what of your benefit. And that's a standard ratemaking methodology. So whether you are a um you're not a taxable entity, this is a fee and it's not a tax. So this is again I'm talking just theoretically they should pay it because it's a fee. It's not a tax. But the the state is the state. I can't, you know, but I I I I don't disagree with you. It violates ratemaking principles. So,

one of the things that you could do in the report is, you know, though that law that they pass does allow for them to enter into contracts with entities and so maybe there needs to be a a page of recommendations. We can definitely add that in our report. Yeah, because we we we stayed silent on anything because we're not we're not a law firm. So, I have to be careful how I address those. You can just put it as a note that you know

because that gives the city a document to send up to the state or to send up to the plan banks, send down to the county or send because, you know, we're just a little city. Yeah. And you know, we we have to go in and you know, and and we have to go up somewhere 150 times before they hear us. Yeah. And so if we have a a document to wave around, maybe that will add some oomph. Yeah, we could.

Yeah, we did issue the draft report, but we'll definitely modify it. I I will take it back and I I'll do some modifications to it and I include that. Um, you know, I will say this, you know, um, there is a certain I feel like this is just my personal opinion is I see Highland Park because I've been working with Highland Park in various issues for probably the last six, seven years and I really feel like Highland Park is starting to turn the corner and is headed on the way up and I'll get into some of those changes, especially my focus is utilities. of course um and I'll get into some of that in an upcoming slide. So, um, based upon if if again everything staying the same with especially with Glewa, we're recommending that moving forward, even though we're not recommending adjustments this year, but potentially we're going to need adjustments in upcoming years of 4% in total on the utilities. And the reason for that is if you look at the minimum cash reserves over here

over here um you can see just because of normal inflationary uh effects the minimum cash goes from a 4.7 million to 5.3. Now these increases are needed uh would be needed to to restore your cash reserves.

You know we can't go from where we are today to the minimum. It would be it would be too much of a burden on the existing rateayers. So it's something that we try to stage in and do over time and it becomes a bit of a balance. You're trying to balance the financial stability of the utility with the rate impacts on the customers. Now, what I'm hoping and moving forward is that these 4%s could be mitigated provided, you know, if certain things happen with Glewa. And I'm going to cover that. I think it's on the next slide. But if this occurs, it would be about a $6 to7 increase on an average residential customer in Highland Park each year. So go ahead.

Highland Park has always paid and paid and paid and paid and paid. It has never paid. So the fact that a 4% increase would be required, you know, every year, if we could get our $2 million savings, WE WE DON'T MIND PAYING 4% INCREASE. If our bill went down to where it was supposed to be, then of course you're going to have a some small percentage of increase all the time. But you know fact is now we're paying $2 million too much.

So the pro where we object is the 4% on the on the overpayment that we're making now. So I I don't think that people expect never to have a inflationary increase but they need to be paying the accurate bill. So, um I think it's fully understandable that there would be some, you know, increase of some sort. We would have planned on increasing its rates by 7% this year until the public went down and demanded that they ratchet that down. So, I don't think the that interest is really an issue if we if we can get overpayment down.

Yeah. So,

no, that's that's what I know. Um, Metro and your attorneys are working very very hard on trying to make sure that happens for Highland Park. And, um, I I the next slide actually tells you or gives you an indication what these potential changes could be and mean to for the rapeers in um, Highland Park. I wanted to run uh sensitivities on two things. One is obviously I'm looking at a potential $1.5 million reduction in cso, but what if we don't get that? What if we only get $500,000 or what if we get only a million dollar reduction? Well, what that translates into, and of course this is assuming that the system does not grow, a half a million dollar reduction would be a 5% overall reduction on rate pairs. A million dollar redu reduction would be 11% reduction in rates or the pressure on rates and 1.6 million would be a 17% reduction. Now, one of the things from my understanding is you're trying to implement programs and different things that will help your community grow. And because with water and wastewater, your infrastructure for the most part is size large enough that you can handle additional customers. So whatever they pay is what's called additional contribution margin that goes to help keep the rates lower for everybody else. All right? So if let's say that we got a

half a million dollar reduction in cso and we grew at a rate of 1%. That would reduce rate pressure by 9%. You can see how growth has a huge impact. on rates because of the fixed component of the utilities. So if you had a 5% growth rate, that's a 24% reduction in rates combined with a half million dollar reduction in C and the CSO charges. Theoretically, if the reduction was at its max and we grew at a rate of 5% a year, that would be a 35% reduction in rates. Now obviously these are optimistic especially when you get into the bottom numbers you know but it's not unrealistic that you fall within this range moving forward somewhere in that range because you you know through some reduction in cso and combined with some growth that you could see the rate pressure and eventually the rates themselves start to come down. The the issue with Highland Park right now is because your rates have been so high because of the gleewood charges, it's been very difficult to appropriately fund the repair and replacement on the infrastructure within Highland Park and to keep the cash reserves at levels that they should be. And so there's some makeup in a sense. We have to kind of um restore certain financial uh metrics, put them in better condition before it can actually lower rates. Now,

one of the positive things is, you know, the state is funding through grants a lot of the water infrastructure replacements within Highland Park. and you know, but you still have the wastewater that you're going to have to do. And you know, so those kind of things are going to need to be caught up. And of course, that's not a next year project. That's over the next 20 years. You know, these are things that we need to start getting Highland Park prepared for. And that's why I'm saying even though the rate might go down 20%. Um, theoretically, because we have to restore its financial stability, we we wouldn't be able to lower rates the full 20%. Does that make sense?

Yeah. The part that you're missing though is that because the rates have been so out of whack, that has styi development. Correct.

Yeah. not come into a city with an enormous ginormous unreasonable water, sewer, and cso charge on their property. They're coming in at a disadvantage. Developers are supposed to buy cheap and take cheap land and turn it into prosperous taxpaying land. They can't come in cheap land that has an out of whack size bill on it. So that's part of you know stick that into your theory on how you know the growth and the percentage of the reduction is going to going to uh shift and

park's position is we are going for the maximum reduction. We are not going to set for the little, you know, incremental reduction because we don't owe it. Yeah.

So there there's no circumstance that we're going to accept a little small cso reduction when we know we when Glee is metering it. They're metering the CS. Everything is metered now. So, thank you for this. But the fact is that the growth is directly tied into the overcharging. Yeah, that's a good point.

That out is so obvious. The city's in this in the shape it's in because the bills the properties the bills are too high. No one no one can develop that.

Yeah. No, I I it's definitely a huge component of where a company or a person locates. Absolutely. The um you know this is a little bit easier of a presentation this year than last year. um mainly because we did get a little bit of rate relief from Glewa. Um you know hopefully we'll get more but since we're not recommending any changes I do need to make you aware of certain things and as a result of these changes I want to just bring your attention to a few of these additional slides. The first one is this is the water summary. All right, we separated each of the utilities and this is the water projection without any rate adjustments and you can see that the water utility is not doing bad. You know, it's actually doing pretty good. Um, it's holding its own. You know, ideally the upper boundary that we don't want to exceed is this optimal operating income. And we're pretty much right in the middle. We're positive and our cash reserves aren't quite what they should be, but they're heading in the right direction. Now, when we go to wastewater, wastewater, this is not the storm water. This is wastewater. wastewater is a bit of a problem child because um right now of course we've allocated all of these based on the income and cash flows over several years but the cash balances theoretically in wastewater is is negative. It's being subsidized by

water. Um and the operating income is actually at losses and projected those losses are projected to increase even further and again this is without any additional rate changes. So now the last one storm water mark let me just stop you back on the on the uh waste water.

Okay. uh you mentioned that we need you know improvements at so tonight we're happy to announce that the state has saw fit to give us a $3 million um long very low cost loan over a long period of time to make improvements to the sewer system. So they have we you know we told them basically that the settlement included all these grants for water but the sewers are shot too. So

Damon Damon wanted to chime in on on some of the work that it's on the council's agenda tonight to approve uh it's this bond for three million to do some very needed uh sewer improvements. Damon. So, uh I mean I can project like that microphone.

My fourth grade teacher always made us projects. So this is um you know for the past decade we've been getting uh water grants and for the first time this year u we're in a position to receive the $3 million loan low interest over several years to do sewer repairs. And why that's super important is part of this wet weather in our combined sewer system is coming from dry weather infiltration. Which basically means we've got a old over a 100redyear system. We've got some offset joints that are below ground and it's allowing groundwater to get into our pipes and we're being charged for that. So, this $3 million is going to allow us to line and fix several of those areas to keep that out, which means um the volume in our pipes will reduce even more. So, in addition to the Cso calculations or uh numbers that Mark's sharing, us being able to get this $3 million loan will allow us to line some of our sewers and keep this clean water out. So, if our volume goes down, that's additional savings. that's not even being shown here because our bill now that we're metered is based on the volume that's in our pipes. So less water, less charges.

That sounds great. I do want to mention one more thing that's in the storm water. um you know with the changes and the reductions that have occurred in wastewater uh in the sewer charges from Glewa what's happened with storm water is we're starting to get to the point that whoops the storm water charges should come down but the wastewater charges should go up in a sense an offset and if I could make one thing for council to consider it would be to increase the wastewater use that revenue to lower the storm water slightly but that would be something

what's that would be that

if I could if if if I could make one recommendation to council from this analysis it would be to increase the wastewater charges. And whatever we increase those by, that additional revenue would go to reduce the storm water charges to put it back in line. Because right now because of this rate reduction um we're slightly exceeding um our upper boundary in in storm water because my calculated upper boundary is about a4 million dollars of operating income but we're at about a half a million dollars. You can see it's coming down in the future. But my point being in in looking at this is that the storm water utility is the one that's financially stable if you're to separate them. And it's the wastewater utility that needs some help. And so if we were to like increase wastewater by 4%, use that 4% to lower the storm water to put it back in line, that would be the optimal and ideal thing to do right now. In other words, there wouldn't be any overall increase in revenues for the utility. But in doing that, some customers may see a bit of an increase and others a bit of a decrease, but it's to try to get things more in balance.

Hey Mark, real quick, um, with if Kathy had mentioned that the the state land bank and the county land bank, we currently are carrying that debt. If those charges were out, would you feel the same way about the wastewater? Meaning if that debt was removed.

Yeah. Would you would you feel the same way? You mean if we if we um got that revenue or we lose that revenue? We got that revenue. I'd feel even strong more strongly about it because then the storm water would then get even uh more financially healthy that we could use that to uh we'd have to increase wastewater in a sense. Um, and we would decrease storm water by both the increased revenue from wastewater and the increased revenue from the land bank paying for the storm water usage.

Okay. All right.

Yeah. Because this one I'm afraid can cause the city some problems moving forward. And that's the reason why I'm I'm mentioning this now is um when I see us exceeding that especially um you know we in the past we haven't exceeded that optimal operating income so I wasn't excessively concerned but this year based on our projections we are going to exceed it and that tells me we should take about $200,000 out of the storm water and increase wastewater by $200,000 and lower storm water by 200,000. So, it's something to, you know, if you give us the direction, we can have it ready for your next council meeting. Well, you know, um, overall, you know, I want to make sure that all the utilities in combination are healthy, but I do want to make sure that we're fair, which with each individual utility. Does that make sense?

We're going to have to wrap up. Okay. No, I'm curious um about the um the interest for the loan, the $3 million loan. How low of an interest is that going to be? Oh, that's okay.

Okay. And then uh um and then um um my my next question was going to be, you know, historically we have raise things to cover other things. You know, the problem for raising things that I have a problem with with this uh with regards to the um the the raising of the um the the sewage to cover the storm water to get it under control. Right. So, so the problem with that for me is historically when we've raised something and we've been promised that it's only going to be here for a short time, it has a tendency to stick around permanently and I don't like that.

That's just a comment I wanted to make. But it's a good comment because, you know, I think that city has gotten to the point now where it understands all components. Yeah. And it's a very valid point and that's why we are having these meetings and having these committee meetings and maybe it's a point where we have to convenient a task force of residents, legislators and council people to attend these meetings. I'm trying to let them work out kind of, you know, organically with the engineers. But we may have to get to the point where we're, you know, going in there with TV torches.

And uh so you're right though, we we've been sold bill goods over the past and it's now time for us to to start. We got the meters now. That's right. And that was the and we want to live up to that. started the state in Cleveland and the city entered into a deal that once the meters went in, we were going to have a reset. That's right. So, we're pushing ahead with that. Exactly. Once I see how that fans out, I'll be a little bit better. The workshop is ended at 7:02. Anybody need a five minute recess break or anything? Yeah. 5 minutes. 7:02.