City Council - workshop

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Good afternoon. I would like to call this agenda study or this budget study session to order July 7th, 2026. Angela, I guess I'll turn it over to you.

I didn't know if Enrico wanted to kick it off. You want to kick it off, Enrico? I can.

All right. So good afternoon, Mayor and Council. I want to start with, again, I appreciate collectively your patience with staff and I as we were working through the budget. While we've been dealing with very active and positive union negotiations to incorporating the sales tax into the budget, there's just a lot of moving pieces to this budget season. And I believe that we have something very positive to share with you all. And again, just for the purposes of this 4 o'clock meeting, that there is no binding action to be taken from the council. Typically, these are more informal conversations that we all can have. And we'll take any direction from you all. And with that, I will turn it over to Angela.

I didn't know what I needed to get. Okay. So probably the most important thing we discussed tonight is what we want our maximum mill levy to be. That will be an item on the agenda later tonight. So to kind of kick us off here, our evaluation for the 2027 budget increased 2.72%, so not as much as prior years. Presentations during the sales tax meeting showed that we would have a flat mill levy. The mill levy needed to increase the general fund balance to target balance over several years would need to be that flat mill levy unless we were to come up with some other action. So the presentation tonight does show a revenue neutral rate. So we'll see what that looks like. And then I'll also show you what it looks like to have a flat mill levy as well. So the difference between revenue neutral and a flat mill levy is 1.15 mills this year. So for a $100,000 home, that would be $1,323 a year. For a $100,000 home, that's $5,290. And for a million-dollar commercial, that would be $287.50. So that's what the difference between the two, revenue neutral and a flat mill, would be. And just stop me with any questions you have. as we go along. So if we have a revenue neutral budget, our ending projected general fund balance would be 1.81 million. So it shows you there we started at the beginning of 26 with 4.8 million, we project to be about 1.8 million at the end of the year. And then at the end of 2027, it would be the 1.5 shown. So just for purposes of showing what it would be like to split the difference of revenue neutral and a flat mill levy, that would bring us up to 1.8 million. And then a flat would be 2 million. Um, which would be a healthier general fund balance. We do realize it's going to take time to bring that balance up to where it needs to be. According to, uh, the governmental finance associations recommendations, it should be two months revenue or two months expenditures. And so that would be about 7.3 million is where we should be ideally. So we know we need to start increasing our general fund balance, the sales tax, is helping with that as we'll see as we go through the slides. But the additional mill levy would help us. So that is the most important thing that we probably decide on What we want to do tonight is whether we want to be revenue neutral or flat.

And Angela, if I can interject. Yeah. This is more for the benefit of any listeners, either now or in the future. When we say revenue neutral, that... does not mean that we're not presenting an unbalanced budget or a balanced budget, however you want to look at it. What revenue neutral means is that you don't collect a dollar more than you did from last year's budget. So if you exceed even just a dollar more, then you're no longer revenue neutral. And so the issue with the revenue neutral law is it doesn't account for the cost of goods and services going up or paying employees or anything like that. And so if you want to get to revenue neutral, there's a lot of things that every year you then have to cut. So part of trying to stabilize that was through the incorporation of a sales tax so we can keep the services that we're providing now going for the longer term. And that doesn't mean that we won't make adjustments here or there. But when we say revenue neutral, that doesn't mean that we're not trying to pursue a balanced budget. It's just it has everything to do with what you spent last year. And for whatever reason, they don't want to take into account just the cost of services going up like asphalt or anything like that. So I just wanted to make that point known for the benefit of the listener.

Another way I explained that to a council member earlier is if your valuation went up the average of 2.72% and we kept revenue neutral, you wouldn't pay any more than you did the year prior. Obviously, it depends on what your valuation did, but if it's the average, you wouldn't pay any higher taxes. So in 2027, we talked about the alligator mouth here. and how we're trying to close that. This shows where our expenditures and revenues would almost meet if we did a revenue neutral mill levy. So we're close, not quite there. And this is where we had projected during the sales tax meetings we would be with a flat mill levy. So with flat, our revenues would exceed expenditures in 27 and going forward. So I just wanted to bring that back to light on where we were looking a year ago. So I wanted to talk about some of the overall budget impacts. Health insurance is going up 6.3%, which is really pretty good considering healthcare costs continue to increase. Our human resources director has done a wonderful job of working with our insurance companies to take advantage of programs like prescription drug programs that have kept our costs lower than average governmentals. Overall in the budget, you'll see a salary increase of 5.5%, but that is not going to be universal. What we're doing this year is we're trying to incorporate a compensation study. So this means that some people will get lower raises than that, but others will get bumped up to where market says that they should be. So this year we're doing a hard lift of trying to take advantage of the study that we've paid for and implement that compensation study. So that's why if you're looking through your packet when you take it home and read it over later, that you'll see that some departments may be less because maybe they're at market. And some may be higher because they have staff not at market. So I just wanted you to keep that in mind when you're comparing salaries. And then we also incorporated the 0.75% sales tax, which we'll go over later in the presentation as well. And so overall budget, we're looking at a reduced headcount of 0.5. If you adjust for the part-time positions we're eliminating with some of these new positions, then you're looking at decreasing to positions. or two headcount for the 27 budget. And I did on my slides up here in the lower right-hand corner put page numbers if you want to reference the pages that are in your packet. I know there's a lot of information there, so I think we'll just have to follow up later once you've had time to ingest all of that information. For finance, we reduced our headcount from one. Accounting coordinator, we reduced it by part-time by splitting a position with HR. a city attorney we're proposing to add an assistant city attorney and the community development we have already eliminated a permit technician due to software implementation alec is going to talk more about this later but the airport would be increasing staff by three for their fuel-based operations. And we'll talk more about how those positions are getting paid for when we talk about that as well. The police admin is adding a transport officer and reducing some part times for that. We've reduced the Horton forestry superintendent Engineering is reducing two headcount for inspectors. Planning is reducing a senior billionaire strategic growth. This is just kind of a reclassification that the economic position had been budgeted to be in-house and paid for by the city, but that's being paid for by the chamber. So it just switches that money from headcount to contractual services. And then in utilities, we've converted a project manager to full-time. Are there any questions about any of those employee changes? We do have staff here to answer any questions as well. So we just wanted to highlight the new requests in MRF and CIP this year. I feel like we did a pretty good job going all over over all of that last year. The MRF requests start on page 87. And really what's changed since what was proposed for 27 last year is that we're adding an asphalt distributor and an asphalt paver. And this is because we're going to start bringing some of those residential street repairs in-house and doing them. In-house will save us money long-term on the CIP. So the public works director feels we have the crew that's adequate to do it. We will see a little bit of a change in their operating budget in 27 because we proposed to buy asphalt in their operating budget because it's going to be used for, I don't want to really say practice, but learning how to pave on city parking lots. So you'll see those changes in the slides in the future as well. Did you want to jump in?

I was just going to share that, just to make sure the expectations for the community are understood. There's going to be baby steps with trying to do a lot of that work in-house. So I don't want that to just be assumed we'll be fixing the roads ourselves right away. But we'll start with trails and parking lots and things like that. And then once we kind of get the craft down is when the intention would be to start on residential streets. So while they are expensive, we should in the long term save money by being able to do it ourselves.

I got a question. Don't we have to have that big roller to the machine to do asphalt and put it on the streets? Don't we have to have that machine or not?

Like to compact everything? Is that what you're asking?

Yeah. Do we have the machinery to do the streets? Cecil, do we have the roller?

We actually have a big roller in place now. We have all the trucks we need. We will be purchasing a lay-down machine and the asphalt distributor that sprays the oil. But yeah, we already have most of the stuff we need except for those two really big ticket items. And that's what we're going to be getting and then training on for that first year. Okay.

While you're here, do we have to increase staff to operate this additional equipment, or do we already have people in-house?

The current staffing we have, we should be able to operate with what we're planning. If we really start pushing this forward into the future, The downside is this crew is going to take five to six people, and it's usually summertime work. So the asphalt crew that's currently working, we may be doing less pothole patching while this process is going on. But then if this really does take off in the future, we may look at more staffing. But currently, staffing levels we have will be adequate.

And will this equipment be able to do streets if we want to in the future?

I mean, I know you're taking baby steps, but... Yeah, so the equipment we're looking at purchasing would be able to go down small enough to be able to do, like, the hike and bike trails, or up big enough to be able to do a full lane of traffic at a time, which is what typically places do. So it'll be able to do up to a 13- or 15-foot lane in one path. So, yeah, we should be able to do both. And then the one thing we are going to continue to look at doing outsourcing would be like the heavy milling because the milling machines are really expensive and hard maintenance. And we looked into those, and we feel it would be cost savings to still maybe cost share that part out, but do the actual lay down in-house.

Okay.

Thank you. Do most cities our size have a machine and they're doing this on their own?

It's really hit or miss. The research I've done, there's some smaller cities that have it and there's some bigger cities that don't. We're kind of in that middle range where I know there are other cities in Kansas that have their own lay down machine. It all depends on how much asphalt streets they have. So for a city our size, it does make sense to get one and do it ourselves.

Great, and I'll get you the list of streets you can practice on.

And I'll say to Council Member Fast that, I mean, this is in keeping with our practice over the past few years of doing a lot of work in-house, whether that's in-house design for some projects to a lot of the stormwater facilities that we've installed. This is kind of pushing us more towards a lot of the things that we believe we're capable of doing ourselves. And so again, hopefully in the long term, we can save the city a lot of money.

Will there be a reconsideration or recalculation for some of our CIP projects that, like for instance, Jim P. Martinez Trail, the strategic plan was to convert it to concrete because it the calculation was that it was cheaper to do concrete with the contractor than to do asphalt with the contractor. Is our own asphalt cheaper than concrete?

Yeah, so Justin and I have kind of compared notes, and we feel that we would be able to do that work in-house cheaper in most applications. There are still going to be some locations where concrete's the better choice. Some of the ramps or under some of our trails go into railroad trestle bridges. The machine we have won't go underneath that. So there will still be some of it, but Justin and I have worked together on it, and it's It looks like everything we've found is going to be cheaper for us to do this in-house.

I like that. Thank you.

I believe we did reduce the budget for the Jim Martinez trail for next year as well. I can't recall the amount off the top of my head. So we do plan to see some savings there.

Would it be beneficial? I know that some of our parking lots are, and maybe these are the ones you're going to practice on, but like the zoo parking lot and then the parks department parking lot that are in pretty rough shape. And I know those were, I don't know, within the next one or two years. Are those like to practice on? Yeah. Okay, cool. Yes. Thank you.

I wanted to point out here, too, that the total spend for the MRF is $4.6 million, and $3.6 of that will be coming from the general fund.

Another quick question. Yeah. The machine that mills it up before we lay it down, is that hard to get people to come and do that?

No.

Okay.

We do that every year with our charitable companies, as is. So there's a lot of local companies. I say local. Within the state, though.

Well, my wheels are turning and thinking, well, we might be able to react quicker or maybe even do more street paving if we if we're doing it ourselves and we can say that needs it. You know, when when we have to plan to contract all these people and the hitch and the get along would be getting the milling done. Again, I think all this discussion is because we're excited about the potential that we may have here.

So we do have a mill head. We actually have two mill heads in the house. Oh, okay. We can do some.

Oh, okay.

It's when we start doing the long stretches of millings and especially what we call an edge milling where the milling machine only does like two inches on the edge and goes up to zero. Our milling machine is a flat mill. It can do depth, but it can't do angles, the ones we currently have. So when we're doing those long stretches on residential streets, we would contract that. And we would have a game plan well ahead, a year ahead of what streets we were going to plan on doing. When we're doing the trail or parking lots or some other small stuff, we can do that in-house, and we can use this machinery for that and not have to wait.

Great.

Great. Thanks. Appreciate it.

I have a follow-up question, if you could stay up here for a second. As far as staffing goes, you mentioned that within a couple of years it may look like we would be hiring six people to replace those because now we're doing our own paving. Would the people who are doing the paving, you mentioned that they're going to have practice and they're going to have some hands-on training. Is there any type of certifications or professional certifications that they are required to receive?

No certifications, and we're not planning on replacing those six people. We're just thinking if we started doing this more, and we might actually need more if we get a need to need to be doing pothole patching and... this at the same time, then there may be that opportunity in the future to maybe add one or two more to the roster, not replacing those six or them moving on. We are looking into training as part of the purchase of the equipment. We've already talked to some of the companies, and they supply a full round of training. We've even talked to the county. They have a lay down machine and stuff, so we've talked to them about maybe coming out and shadowing them for a couple projects and see how they do it. really looking at all the aspects so we can get the best training we can. And then we want to use that first year or so to kind of fine-tune it on some lower traffic areas like parking lots before we go out and actually start hitting streets.

Okay. Thank you.

One more question. Yeah. How much money potentially do you think we can save annually by bringing this in-house?

So currently I think we're about a million and a half on residential chip seal.

Maybe not quite that far. Maybe just under a million.

Yeah. So you could take that completely out of what we're doing and just be the cost of the actual asphalt, which would be considerably lower. I don't have the exact number, but half or better, I would guess. And it's also a longer term because chip seal is a great product, but it is just an overlay product. It extends the life of the road where the process we're looking at is truly a new road at that point. So when we do these, we should get 20-plus years out of these new roads without having to come back and do that other maintenance that we do in the fall and the winter stuff. So it's an overall savings, not just that one time.

And I know you wouldn't have an exact. I just want to come to some sort of speculation of what you think it might be. Yeah.

Yeah, it's the long-term savings that we're really looking at, the stuff that's in between those cycles when we have to go back out and patch those places and stuff. But ultimately, we're going to eliminate what we're paying the labor to another company because we're already paying that labor in-house.

Okay, thank you.

Okay, if we move on to CIP and the CIP reserves. The total spend for 27 is budgeted at 37 million. I wanted to point out that of that funding, general fund bonds account for 3.3 million, where normally we would bond about 6 million. So using some of the sales tax money and trying to use more of that pay-go method, we're able to reduce the amount that we're bonding next year, which is a very good thing. To look at the projects that were added this year, we're adding just two small projects for Public Works, the HVAC units for Public Works, which is paid for out of reserves, and then HVAC controllers. Also, the Cary Park Reuse Project has been added, and you heard about that at a prior council meeting. The police had requested a parking lot security fence, But that was deferred until 28. For engineering, they have requested a few new programs. The downtown concrete alley maintenance, but we decided to defer that until 28. They're asking for money for a pavement marking refresh. As I think council has commented, that we should be updating our markings on our streets. but that has been deferred to 28 as well. Um, the residential street resurface, that's where we're going to see the savings for, um, doing that work in house. And so it will redo be reduced in 28 going forward. I'm not necessarily in 27 because we'll still be hiring that out. But going forward, that will be reduced. We are starting a warning siren reserve to help update those sirens. And then we're adding six in Keith for a $1.2 million project. But almost all of that is going to be paid by a grant that we recently received.

And I want to add for the bonding that not only are we able to pay more for cash, um, but we're also saving on interest by not taking out as much debt. And so for the longterm, we're saving the city additional money that way too. And I just wanted to point that out that it's not only the cost of the project, but the interest, um, yearly on that until the bonds are paid off.

Utilities has some new projects, but I'll probably skip those right now because HDR is here and they can present on those projects after we're done with this PowerPoint. Zoo has added to their master plan the agricultural exhibits to the front gate project, and they just kind of swapped that out with the cabins in their request. Are there any questions about the CIP projects?

I would really like to see the pavement marking refresh project started in 27. I think that's something that it's more than aesthetics. I think there's a safety aspect to it that I hear from residents quite a bit. And driving around town, it's clear that there's an immediate need for that project. And I see that it's only funded for three years. Is that then that there's a pause because we're caught up and we don't have to do it for a couple of years? Or why is it only three years of funding?

I believe it's because that's when we'll be caught up. But I'll let Cecil correct me if I'm wrong.

It's actually because we're...

Just stay in the front row.

The actual plan is hopefully by that point we're caught up where we can be doing that in-house as well. We have some of the material to do that in-house now, but because of some choices that were made in the past and products that were used that didn't last as long as we hoped, we thought three years would buy us that time to get caught up and then we'd be able to maintain in-house and not have to. It would become just a line item for material versus having to contract it out.

Well, I agree with you. I mean, and it's an easy win. People notice that stuff when we're doing stuff like that, like lines on a street. But anyway, I had a question about security fence. Are we having a security problem at the police station? And I know it's 2028, but.

Yeah, it's just best practice in the world of law enforcement now. It's recommended that all law enforcement agencies have a security fence around their cars. We were proposing it for a number of reasons. We have a lot of foot traffic that comes through that parking lot. The officers will be out there loading and unloading their vehicles, doing reports, and it's supposed to be a safe area for them basically to get their job done. with loading and unloading their car, doing reports, transporting prisoners in and out of the building. So it's a level of security from that standpoint. Also, with us being a 24-7 organization, we have them at night, all throughout the night, 2, 3, 4 o'clock in the morning. That security fence was also going to help provide security for our dispatchers who come in and out at all hours of night. They currently have to park on 1st Street and then walk across 1st Street in the dark and approach the building and leave the building. so that was there to also provide that higher level of security for them as well also part of that project was to there's a little cut out of grass I'm not sure why it was there and existed but it was it would also increase our parking by four spots so we could get more dispatchers in there or other people to help keep the areas during the daytime and during the night time There's some different legalities as far as public property goes and whether people can access that or not. So it becomes challenging at some points to have people leave the parking lot without a clear fence protecting the parking lot. Wichita recently just had an incident with an officer-involved shooting due to the same situations, people walking through the parking lot. There's also been common occurrences of them coming up and harassing officers as they're coming in and out of the station to load up their cars and go out and service the people of the community. So that was just the reasons behind that.

Okay. I'm assuming our accreditation is asking for that as well.

Yeah, like I said, that is a nationwide what's considered best practice now, so we're just trying to stay ahead of that as well.

Great. Thanks.

Which parking lot is it? I'm confused. I thought we parked a lot over at... Like north of the maps building. So which parking lot would you be?

This would be on the west side of the law enforcement center. Okay. So you have the courthouse and then the law enforcement center. It's just that parking lot that's adjacent to it there.

Okay. How many parking stalls are there now?

I don't have the exact number on the top of my head.

Can you get all your vehicles in to that secure area then?

Yes, we would be able to. Okay. Yeah, and especially if we added those four additional parking spots, it would allow us to get all those first responder vehicles in there. And then plus, like I said, a handful of dispatch vehicles and detective vehicles. Okay.

I don't think it was up there, but would the bid come in at, do you know?

It was right at $92,000. We put up there $100,000, not knowing if this would go next year or the year after just for a cost of inflation, but it was right at $92,000, the entire project.

Any other additional questions? So as you go through the operating budget and look at their changes, downtown development added 18,000 to their contractual. Utility billing added to contractual because postage will be going up again on July, or sometime this month. So that would increase costs about $33,000. And then IT software costs are increasing about $160,000. This is due to adding LaserFISH form software, which several departments are using. IT'S ALSO MOVING GOV WELL, THE CODE ENFORCEMENT AND PLANNING SOFTWARE UNDER I.T. SO IT'S JUST A SHIFT OF WHERE THAT'S BEING PAID OUT OF. AND THEN THE CITY WORKS SOFTWARE AS WELL, WHICH IS NOW AN ANNUAL COST. SO THOSE ARE MOVED TO THE I.T. BUDGET. software we're going to allocate part of that to utilities in accordance with what percentage of that software they're using. Housing miscellany is contractual. We added a program to assist with home improvements for 50,000. Strategic growth is proposing to increase market hutch by 25,000, so the total funding would be 100,000 a year, which is what we were funding it at before we brought it in-house. And then for continuing the small-scale development program, I think they call it NEVO as well, proposing 40,000. and trying to apply for grants to help fund the rest of that program. And then in street commodities, you'll see an additional $200,000 for the asphalt paver. Do you have any questions about those items?

What was the first one again, the downtown development?

It's their miscellaneous contractual. It's giving them a little bit more room to do some of those programs now that we've brought that downtown contractual or we've hired a downtown development director.

I don't know if you mentioned this one earlier or not, but the Gulf Master Plan has $660,000 in 27 and then after that it's more level around 350. What's that increase?

That's because we deferred it last year. And so we're combining two years of that project.

And so instead of extending the project an additional year, we're doubling up this year. That is what's proposed.

Hey, Justin, I'm sure you can answer this question. What's that money going towards, I guess? The last phase.

The last phase. I know. Why are you asking?

Because I want to know what that last phase is.

Yeah, Paul can answer for us. It is the last phase holds 10, 11, 12. Okay. And it could be when we presented for the phase we just completed, there was an option to renumber and add a par 3 at hole number, being the new 15, I believe. So 10, 11, 12 would become 10 and 11. That would become two holes.

So that option was still available with this budget.

So we'll have to cross that bridge when we get there. But that is the last phase is to finish 10, 11, 12.

Okay. Thank you.

All right. The next few slides I have to go over are the utility slides. And we've worked with HDR to make sure that everything in the rate study is following where it should be. So the water fund balance estimated to be 2.3 million at the end of 27. using some of those reserves to pay cash for some projects, but typically we don't spend that full budget, so it probably won't actually get that low, but that way we have budget room in case we need it. Same thing with the sewer funds. Still working with HDR, and the ending fund balance at the end of 27 would be projected to be $3.1 million. Probably will end up higher, just like with water. The next thing I wanted to go over was the stormwater fund and this This is on page 51 It this shows all of the stormwater money going into the same fund that we had before But what we are going to propose to do is break the stormwater funds into two separate funds So we'll keep the money that we had collected from stormwater fees separate than the sales tax money I just haven't worked that out in the budget software yet, but that way we can keep them apart so we know what's restricted and can only be in stormwater and what could be shifted or could be used for the street repairs in coordination with the stormwater repairs so that we're not violating any restrictions with that.

And to add to that, one important thing that we're also going to do when we spend down the restricted monies for the stormwater, we do plan on replacing that with the unrestricted cash. For the sole reason that in the event that the sales tax doesn't get renewed 10 years from now, that over the course of the 10 years we've built up a reserve that we can then use to help go after stormwater. And so it's trying to set the city up 10 years from now that there's still money there for stormwater purposes. So that would be money that we would propose not to touch so that it can continue to also build interest at a pretty high rate. So I just wanted to throw that out there as well.

Any questions? Okay. I think Alex here, he's going to talk about the FBO and what that means for the airport.

All right. Well, we got a lot going on next year. So it makes it look like my budget has just ballooned. So I'm going to go over some of these items just to help describe why The airport budget looks the way it does. So with the CIP, we did scratch the Jet Center project for next year. We've bumped up our airport facility improvement reserve fund to about $106,000. Traditionally, it's usually about $65,000. And that's to address some maintenance issues, some roofing, some stuff that we need to do in the terminal to be ready to take on customers, and then some groundskeeping stuff as well. I'd like to start painting the hangers and go from pink to maybe a gray. Okay. Then to go with that, because we're asking more in our airport facility improvement reserve, we went ahead for the next five years, reduced our ask for the RPZ land acquisition reserve. Usually we would ask about $150,000 a year. We've reduced that to half, $75,000 a year. So that kind of covers the CIP jump for the airport, mainly due to the FBO. For our MRF, we had a pretty big jump in request for the ground support equipment. So this is stuff that... We kind of need to be able to operate our fixed space operation, and that includes GPU, tug, courtesy vehicles, which we're going to try to use or recycle city vehicles for that. And then tug implements like tow bars, a plane recovery system. So if an aircraft blows a tire, we'll be able to recover it, get it off the airfield without having too much delay. But all in all, that comes out to about $160,000. And then our budget, our operation budget, That jumped pretty good for the FBO aspect of it. So we'll have additional personnel. And that bump up is about $200,000. So what we've done to kind of help address that, we've cut summer help out, which is about $14,000, and then we've cut from our municipal contract, or not municipal contract, miscellaneous contract for some of our wildlife stuff. We'll be able to, with the added personnel, they're going to wear more than one hat. They're not just going to be pumping fuel. They'll be doing groundskeeping. They'll be doing facility maintenance. They'll be doing wildlife. Yeah. Sorry. Lost the word. So... In that aspect, we're kind of getting more bang for our buck because we're able to utilize them in more ways than just one. And then you'll see a $2 million for bulk sales. That's the aircraft fuel purchasing. Even though it's $2 million, we're going to be collecting revenue off of that. We're only going to be purchasing about 8,000 gallons at a time. It's not like we're immediately buying $2 million worth of fuel and putting it into the ground and hoping we sell it. We're going to purchase as we sell. with our revenue for the next year or a few, is to at least cover our additional personnel costs. If not, do a little bit better. We do flow roughly 240,000 a year, which is good for an airport our size. And from what I understand, that has been consistent over the past couple years. So that's kind of where we're at with the FBO operation. We're gonna be panning out what other operating costs are over the next couple years. And ultimately, we're gonna want to try to generate a little bit more revenue than just covering personnel. Any questions?

And I would add that at some point in the future, at a future council meeting, we will show with you potential redesigns for some of the airport facilities that currently exist. So kind of like the signage that we proposed, but we'll just kind of bundle it all together to share with you how we plan on improving the aesthetics of the airport.

I have a question about the RPZ fund. What does that fund currently sit at?

Oh, I do not know off the top of my head. I'm thinking it's a little less than $200,000 right now in there.

Okay. And we haven't used any of it in...

No. So the RPZ, the properties in the RPZ are upwards of $300,000 at this point. You've got one house since I've been here. Yeah, yeah. And we're not catching any current heat from the FAA right now. However, if we ever got fully caught up on everything at the airport and we were seeking an economic development grant from the FAA, they're going to look at that and say, hey, you need to fix this first. So that's kind of what's going on there.

So with, you said 75 for this year, is it that we get to a certain level because we know that the market value of the next property that we anticipate would come open within that area, within that zone. And then we get to back off a bit more for a while, or is it 75, and then we're going to stay at 75?

So what I understand, that reserve fund was kind of easy pickings for cuts in years past. I think it's better to ask for less at $75,000 than rather just have it completely cut each year and start building that reserve consistently so that we can actually address it. Having that sporadic funding there, it just really is not helpful.

And This is a different question. The repainting, the hangers, is that for aesthetics or is that just for, or is that like for waterproofing?

It's twofold. One, aesthetics. So in years past, I don't know why it was a trend to paint hangers beige, but they fade to pink. But also we're at a point where that paint's failing and these are metal hangers. So without consistently painted, they can start to rust out. Anyone else? All right, thank you.

The next slide here goes over the three-quarter cent sales tax budget. So the estimated income for that for 27 would be just the 8.9 million. It's probably a conservative number. And then of that, we're proposing to use 1.35 million to fund street operations, 2.75 million to fund parks operations in the general fund. 2.16 to go the stormwater fund, which is what that fund would normally collect. And then in your packet, you'll see projects funded by sales tax, and that's what this is. So we've put $2 million towards capital improvement projects to fund them with cash instead of bonding. So that's what helped lower our bonding in 27. Is there any discussion about that proposed usage?

How much do we anticipate taking in in the first calendar year? That would be about the 8.9.

That's probably a conservative estimate, but I'd rather be a little bit more conservative than promised streets, an extra half million that we don't collect. To kind of conclude and wrap up this and where we're going in the future, Enrico and I and Cody Smith and others from IT, we've all been working on policy updates. So we have a draft purchasing policy that proposes tightening up some of the purchasing policy language. It would establish procedures for if a non-budgeted expense over $25,000 was to be proposed and what that looks like, who has to approve that, and it also defines what's non-budgeted. It establishes a capital improvement committee. So this would be a committee that reviews capital projects every year, and then if any of those non-budget expenditures were over a certain dollar amount and a capital improvement project, it would go to that committee as well. It also incorporates the PAYGO system and that language. It also would incorporate required quarterly or regular reporting from finance and would involve some information from department heads as well. It would have quarterly reports on spending trends by vendor, by type, those kind of criteria, and then it would also report change orders above certain amounts to city council as well. So we're just proposing to tighten up procedures to help us regain some of that general fund balance. It contains language that if we're not at our fund balance, here's what we should be doing to look at how to control expenses.

And two things. One, for the... for the city manager's authority to kind of sign off on any payments, regardless of whether it was budgeted or unbudgeted. For the unbudgeted specifically, I would still report back to you all what I did. So there is still accountability on me and on staff as to what money was actually spent on. So it is important to maintain some flexibility in case something breaks that I can make that purchase. But I would still be reporting back to you all on what exactly I had spent money on. I do believe that's important whether that's me in this chair or someone else that the council and the public at large should be aware of that. And the second point here on the purchasing policy, when I was trying to envision like a set of crutches and on one crutch was the sales tax and trying to stabilize and fix our budget. And then the second crutch was how we use the money. And so in this case, it was the policy. And so I believe that with the sales tax and the updates that we've made to the purchasing policy, that we've established a set of crutches that can at least help us with our budget going forward. For the CIP committee, Some of the intention behind the CIP committee is to, like what we talked about, at least informally, on spreading out all of the projects that we do. So there's not just big projects in one year that overwhelms the budget and overwhelms staffing. But it's how do we spread that out over time to ease everyone's concerns, and so there's not too much friendly competition going on with departments trying to one-up each other. So the CIP committee, the composition of that would just be made up of some department heads and other key staff to help vet those. That does not mean that as a council you can't change anything once it's presented to you all. But just knowing that it's been fairly scrutinized up to the point that it gets to you. So I am very excited about trying to roll this out. We're all going to be learning at the same time. But I do feel very optimistic about the financials of the city going forward.

So the next policy we looked at is the city council budget policy. So we will be bringing that back to you in the future because it is a city council policy. So we're going to outline what happens if we have a fund balance deficit that's below what we are recommended to have. So it establishes that the city manager must present a written plan to correct the deficit to city council. My suggestion would be the length of the recovery time depends on the reason and the deficit level. Like we have certain criteria and whether we have to recoup that in three years, five years, 10 years. And then it will establish procedures based on that deficit level. So once we hit this deficit level, what are we going to do to correct that? And it'll better define one-time revenues and limit their use to non-recurring expenses. So this, if you get a one-time revenue that isn't designated for something specific, it's good to have a policy that allows that to just be captured and increased into your general fund balance instead of spending it. And so the deficit plan we're going to look at proposing is to align the restoration of the general fund balance with the sales tax over 10 years. So every year we would set aside about $570,000 each year for 10 years to get us back to where we need to be. So with that, are there any questions before I turn it over to HDR?

The deficit plan seems like something that is a good safeguard to have in place so that if we do get questions about why is our fund in its current state, then at least we can say we have these policies in place and this is how they work and this we're setting aside.

Then we have a written plan. I think that'll be especially helpful when we go to do our bond ratings. that we can show you here is our written plan. We are working on this. So, yes, I think it's something that will be very useful. Thank you.

Thank you, Angela.

I'm not sure how to share my screen. F5. F5. Thank you. All right. Hey, guys. So I'm Alex Beck. I'm with HGR. I've had the opportunity to work closely with David and Evan and Aaron over these past 18 months or so almost on a lot of different projects that we're going to talk through today for water and wastewater. So I want to give a little bit of background to you with some of the planning of how the five and tenure came up, and how these projects were prioritized and level loaded across years. And then really speak to specific a couple projects that are maybe new ones that were flashed up in front that Angela shared, and then some of the highlights before we just turn to discussion. But feel free to interrupt me at any time with any question you have. So some of the background, as many of you may be familiar with the wastewater treatment plant, we did the rapid facility plant, both the wastewater treatment plant and the water treatment center, in addition to a site visit for those with about a team of 10 or 12 back in April of 2025. We also completed a desktop analysis and reviewed a lot of the data behind all the work over history and water main breaks and a lot of that information that is being tracked by city staff And then from there, we did a bunch of site visits at specific areas like the wells and the lift stations to initially inform the rate study that was approved in October of 2025. there were a lot of different projects prioritized in that time of where do we start with some of this effort. That populated that one year CIP, that would have been this year's budget, and now in this year two and beyond, looking at lots of different projects. So really the five and 10, so looking out not just this year but in the out years, it's really focused on the facilities, needs and dependability around the system and regulatory drivers that KDHE is either enforcing now on your existing permit or will be coming in near term or in future permits. And then we wanted to incorporate community input. At the water treatment center there was the open house April 1st and the number one response from the community was to maintain safe and reliable service. So that's what these projects are focused on is doing that. So the skinny on here I just want to point out is that the one year, so this year's current budget really focused on those emergency projects and some of the projects within this budget, some are in that emergency but more are in that poor bucket than emergency. So a couple of the projects that Angela mentioned to specifically speak to, the booster pump station relocation. So this was a project to relocate a booster pump station that's in town. And this was from an EPA report that was this year, spring 2026. They were aware of it in their report. So it's critical to make sure that the tanks that are not operating correctly are then able to be both rehabbed and relocated and then rehabilitated. The sewer dynamic model, utility staff does have a water side, so drinking water side model that is in great shape and there's analysis being done on that right now to support some of the pressure zones within the city. There is not a sewer model currently and it's a best practice for any utility to have a sewer model for capacity and a better understanding of the system and then support an I&I program or removal of of areas of town that really get kind of pressure on them during storms or deteriorating parts of the system.

What year would the sewer model be completed?

The sewer model could be probably 2027. If it's a proposed 2027 or 2028, I need to look back, but I believe it's 2027.

One thing that I am looking forward to at some point in the future, we're going to start smoke testing. For those that may not know, smoke testing is a very effective way at figuring out where there are leaks in the sewer system, whether that's through manholes or the actual sewer mains themselves. It's a good way for us to be able to detect those, and then we can start budgeting for replacements or any other refurbishments as they come up. So at some point in the future, we will start smoke testing. So people may get smoke in their homes because of this. That is a fairly common occurrence, but it can help detect even issues in people's private properties as well. Dave, would you happen to know when we're going to start doing smoke testing?

Not yet. That's part of what we're going to find out with this. I know we're not starting that yet.

Yeah.

Any other questions about these two?

Okay. Then a couple other projects I really wanted to highlight are these ones on the right. So the water main replacement is a programmatic. So this is an annual cost to support the water main distribution system. It's a best practice across the country to replace approximately 2% of your system annually. So over time, you're then kind of keeping up with the deterioration and concerns you may have with distribution system. so the this this is set at about 3.4 and is with inflation is increasing year to year so it's a big number but a very critical number to maintain reliable service across the community the water treatment center backup generator is currently not reliable so the water treatment center the generator there would be able to be replaced and then during times that there's outages and the water treatment center would be able to operate their generator and maintain consistent electrical power at the plant. Fire life and safety improvements, probably goes without saying the importance of those. With city staff, these were items that were identified during the facility assessment, specifically around a lot of chemical storage. So there's improvements there that will Improve safety around the water treatment center and then the Kerry Park project I know you guys had an update on that recently so you're familiar with that But there is opportunity for state funding to support a portion of that fun. That's outlined in the budget right now That was the last one I have any questions for me I Last comment I'll have is just we've talked about in the past the integrated plan and the involvement that utilities departments had. We've engaged KDHE on that effort and in the fall and near the end of the year anticipate an update to you all so that you're really well informed with what's been going on and how the state and the regulators have been engaged so that we can tie some of these projects and some of this planning effort to the wastewater treatment plant and water treatment center permits of the future. So that's coming in several months, but it's moving along.

I have a question for Angela. On page 66, these numbers, is this showing the 31 million for the wastewater treatment plant, is that showing that expense spread over 27 through 31?

yes okay yeah these are yeah that's the five-year outlook so that's how much each department would be requesting or receive over that five-year plan I think it's

clear by looking at page 66 where it shows the wastewater treatment plant is 14.38% of the five-year CIP. I think that's clear that we're making this a priority because that's a huge expense and that doesn't even include sanitary sewer maintenance, remediation, stormwater, some of the other items that were kind of captured in Alex's presentation. So I hope people see this and take heart that we're investing in the infrastructure that we need to. It feels like the little things, the much smaller expenses get nitpicked. to death in the public eye and critiqued really hard. And then when we have a much larger expense like this, which is super necessary, people are much less likely to even think of it as it's just taken for granted, I would say. So people don't think of it as such a major expense for the city.

Alex, one question for you. Do you know when you'd be able to present to council on the cost-benefit analysis of either replacing the wastewater treatment facility or kind of the Band-Aid approach that we're taking?

Yep. So we're looking at probably about, I would say, three and a half, four months from now, presenting that to you. And that is going to be a discussion, several workshops with city staff to determine what is best with the wastewater treatment plant in the long term. So a lot of these items are to buy time before what is the next steps out at that facility. So that update would be, I'd say, three to four months. Thank you. Four months, probably the latest.

Yeah. And I do think it would be important for the community to tune into that one. So specifically, one of the things that we've been trying to scrutinize ourselves, say if we invest $20 million into the wastewater treatment facility, it's going to need more than that. How long would the $20 million buy us? Does that get us another seven years before we need to replace the plant? Because at that point, are we just burning money? And so should we be looking at just replacing the entire facility? And so that's the work that HDR has really been helping us scrutinize. So hopefully, yeah, it sounds like in the next few months, we'll have a better answer for you all. But I just wanted to be open about that.

And so when we get that more formal presentation and we have a better idea, I think it was captured on one of the other slides, fix, replace, or run it to the ground. I would imagine that our five and 10 year CIPs are going to shift dramatically once we understand what those expenses are.

I would not anticipate your five year CIP to shift dramatically because in order to, let's just say you need to do a large investment of a wastewater treatment plant. That type of project takes years and years and years and years, and your five-year CIP now that is already in the packet, right, that you just pointed out, is buying you that time. So if you need to make that decision, it could dramatically impact your tenure beyond CIP, but I would say five years and under is pretty safe with the existing plan that's in place.

Okay, so our five-year CIP would cover the kind of the maintenance to get us through if, let's say, worst-case scenario, I would say it's full replacement. And let's say that's the knock-on-wood recommendation come December. Ten years out from now, right? Right. So the CIP is essentially what we have in place right now is going to buy us the time until – We're operational with the new plant, which would take 10 years to plan and build.

For the next five years, correct. Yes, and I think that that's what's getting finalized is what does that five years now look like? What does that 10 years now look like? Or is it worth doing a phased approach and maybe expanding, doing another five years so then it's more of a 10- to 15-year plan before you need to go down a wastewater treatment plan? So very common approach to phased approach on certain treatment processes to extend the life and still meet the regulatory requirements that the state requires.

I think the next councils have some really tough decisions to make.

Yeah, expensive ones.

Yeah.

And hopefully, council, that the work that staff is putting into this, whether it's through policy or how we forecast our needs, that there is a lot of confidence in staff and from the community in what we're trying to accomplish, that we're being as fiscally responsible as we can. And everything that we're doing is at least trying to give a 10-year forecasting of what the payoff looks like. And so hopefully there is a lot more confidence in their local government in what we're trying to do.

Thank you.

So I didn't have a slide in here for next steps, but I think the next step should probably be, I mean, we'll take a vote on whether we do the resolution to exceed revenue neutral at our meeting tonight, and then I think we need to give you time to digest all this and then probably schedule another follow-up meeting.

I have a question about timing. When is our... Assuming that we vote to exceed revenue neutral during this evening's meeting, then does that mean that our next meetings, which would be the second meeting of July and the first meeting of August are really heavy? Like we're going to have budget sessions on both of those. And then our final budget would be done that first week, first meeting of August.

So if we exceed revenue neutral, I've, I don't remember the date. It's in my paperwork. It's on that resolution. Our revenue neutral rate hearing would be the first meeting in September. It has to be between October 20th and September 20th. So I believe I proposed that first meeting in September. So we would have until then to continue fine-tuning our budget if needed. It depends on what you review after, like in this packet, and how many changes you want to make to that. would probably determine how many meetings and the length of the meetings going forward. But that would be the timeline if we vote to exceed. If not, our budget would need to be adopted by August 20th, I believe.

So if we are not exceeding revenue neutral or if we don't vote to exceed revenue neutral. then we would have to finalize the budget by August 20th, which would be our second meeting in August.

I would have to look at a calendar.

We used to have calendars up here, and they went missing. Okay. Thank you. Okay. Thank you.

Do you have anything else? Nothing from me.

Okay.

Thank you, Angela. Thank you, Enrico, and all the staff for going through and putting this together for us. I know it's a lot of work, and we do appreciate everything you've done with this. So I think that's all we have for this session.

Thank you.

Thank you.