City Commission - workshop

Yeah.

That's what Susan said.

Welcome to the City Commission Work Session, June 23rd, 2026. Would you call the roll, please?

Commissioner McCullough? Yes. Commissioner Fox? Yes, here. Commissioner Von Linnel? Yes. Mayor Adamczyk?

I see like the Muppets, you know.

Commissioner, we have four commissioners present. The quorum of three is met.

Thank you. Would you join me in the Pledge of Allegiance?

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Okay, we will start with our Visit Manhattan update. Danielle, do we need to have a motion to have public comment or we just?

No, we changed our policy that public comment is the standard at work sessions, so you would have to take a vote to not welcome public comment.

Okay, thank you. Marsha.

Okay, where did it disappear to? Thank you. Wonderful. Good evening, commissioners. Marsha Rosell, executive director of Visit Manhattan. Thank you for the opportunity to provide our second quarter update. Visit Manhattan's mission is simple. It's to expand the local economy by attracting visitors. Every marketing campaign, sales effort, partnership and event support activity is focused on bringing new outside dollars into the community and supporting local businesses, jobs and quality of life. We have the privilege and responsibility to market the entire city, not just a limited area or a single attraction, but all of it. By showcasing the full breadth of experiences, amenities and opportunities that Manhattan offers, we help create a stronger, more vibrant destination that benefits us all. During the second quarter, our communities had some amazing opportunities to draw visitors. These just represent three. The Flint Hills Festival was another successful event, as well as the Flint Hills Discovery Center opening Roar and Explored with dinosaurs for the summer. Picasso Art in Motion with the Museum of Art and Light has welcomed 1800 visitors for the month of May. Have you all been there? Have you seen it? It's amazing right here in Manhattan. and then SBS Ball Field at Seco Park, what a tremendous asset for Manhattan. We are actively working with the tournament directors to increase the number of out-of-town teams they draw to play here. Tourism continues to be a significant economic driver, supporting close to 3,000 jobs. These employment opportunities span a wide range of industries and skill levels. Our tourism industry generates $234 million in economic impact for Manhattan. These visitor expenditures circulate through our economy, supporting the businesses, wages, tax revenues, and community development efforts. The Transient Guest Fund, also known as the TGT Fund, remains healthy with an approximate $1 million collected year to date. These funds are critical for supporting destination marketing and projects to enhance the visitor experience. And this is a visual of where the TGT fund collections compare between hotels and short-term rentals over the previous two years. You've seen this graphic before at the first quarter presentation. Our work focuses on these six areas that strengthen and enhance the visitor experience. This focus area guides our time investment, partnerships, marketing efforts, and the destination development initiatives to ensure that we continue to attract visitors. I'd like to introduce and publicly thank our Visit Manhattan team, Jen Alley, our convention sales director, Logan Lin, our service coordinator, and our newest sports tourism director, Tyler Burrows. Through our efforts, we have secured 147 pieces of business year to date, which is above our pace for the previous two years. Each individual and group receives outstanding professional attention to offer an amazing experience to generate a repeat visitation. From April through June, Manhattan hosted 69 conferences and meetings that generated 9,800 room nights with an estimated economic impact of 6.5 million. Meetings and conventions continue to be our strongest sector because they bring visitors both peak and shoulder seasons. We have been told by planners that conferences that routinely happen here in Manhattan have higher attendance numbers than other locations in Kansas because Manhattan's such a great place to meet. Sports and special events continue to be an important economic driver. During the second quarter, 26 events generated approximately 1,700 room nights with an estimated economic impact of 1.3 million. In his first two months, Tyler has initiated several of the recommendations from the Huddle Up study, including forming a sports advisory board, and their first meeting is coming up on July 11th. One notable event was state baseball. The Kansas State High School Activities Association, also known as CASHA, has relocated state baseball and softball to KU and Wichita. But due to KU hosting an NCA regional, we stepped up to handle this year's state baseball for classes 1-2A, 3, and 4A. This event is now a three-day event, which had over 4,000 fans through the gates. And it's because of our history of hosting plus an amazing staff, good partners, and outstanding volunteers that we were able to get this done. We were also the only site to host all of the 12 games for the three days. Events like this showcase our community support, local businesses, and created opportunities for future visitations. As you probably are most aware, we are in the midst of World Cup. There has been numerous stories, both unrealistic visitor expectations, but also some feel-good examples of the welcomeness of the heartland. A local group of partners came together to create the Manhattan Tricks.

Yes, this is she, but we were actually in a commission meeting. So can you give me a call back tomorrow?

What? I know, but I didn't understand what you said.

I believe Mayor Adam Chak got a phone call, and she was telling them to call her back at a better time.

So a local group came together and created the Manhattan Trick. You can find information on our website of businesses hosting watch parties. This represents what the Manhattan Parks and Rec did. There was a soccer tournament on Friday night, June 12th. It had 80 people. Youth involved in that followed by the watch party. It was a it was a great evening And can I just say go team? Yes, USA and we'll invite you to Thursday night come again to Blue Earth Plaza at 830 where the next viewing is showing Marsha, is that one at Blue Earth Plaza?

It is. Mm-hmm.

Just so people know yes Blue Earth Plaza at 830 Marketing remains our most important tool for attracting visitors and Our marketing budget of $860,000 allows us to reach target audiences through various means, digital advertisement, content creation, public relations, social media, and partnership campaigns. We continue to strategically invest in these marketing dollars where we can generate measurable results. This includes print ads, digital ads, program and brochure distribution, convention sales marketing services, marketing research, swag items, signage, sports sales, hosting travel writers, creating and distributing the Manhattan Visitors Guide, our website, and our Simpleview database. It also includes sponsoring conferences, sports, and special events, of which we have a detailed spreadsheet to determine the ROI for potential sponsorship. Our focus reaches travelers who are likely to visit Manhattan and converts interest into overnight stays and visitor spending to benefit us all. Our marketing efforts generated more than 413,000 impressions in May alone. These impressions represent valuable exposure for Manhattan and helps build awareness, inspires travel decisions, and keeps our destination top of mind among prospective clients and visitors. We invite everyone to connect with Visit Manhattan through our website, social media channels, and e-newsletters. By amplifying the amenities, businesses, and events of our partners and sharing the stories and experiences that define them, we strengthen and elevate our destination brand. Thank you for your continued support of tourism. We appreciate the partnership with the city and look forward to continuing to work to attract visitors, strengthen the local economy, and enhance the quality of life for residents and guests alike.

Any questions for Marsha?

Marcia, back on the little bar graph with the book conferences. Yes. It showed 24, 25, 26. Correct. 26 being way down.

Partial year. Yes. We're only halfway through the year, but we're above the pace of where we. And all of these booked event businesses are for the future. And I think I've mentioned before that a lot of conferences are booking two to three years out. Sports is a lot more within the year. So yes, the reason that last bar is short is because it's only the 23rd of June. Okay.

Is there any public comment to this presentation? Seeing none, I think we'll just receive the information and think about it. Okay. We'll move on to discuss our water and wastewater utility funds and rates.

all right good evening commissioners Randy DeWitt director of public utilities traditionally this update has been a little bit about providing an update where we're at in this current year plus forecasting some of our budget and rate increases or proposed rate increases for the for the next budget year glad to be here kind of kicking off this budget process for the city i feel like i should be waving a green flag or something So let's get through this. So I will show this slide about why we look at annual utility updates. These are basically the four guiding principles that we use in order to make sure that we're setting our rates appropriately. The four items, maintaining adequate cash reserves, ensuring there's enough budget funding for operations and maintenance for the following year. ensuring we have the ability to retire debt for completed and future utility projects, and also to accommodate community growth and or upcoming state and federal requirements. I thought I'd give you a little bit of history on rates here at the City of Manhattan and how we do some of our projecting. So in general, those three historical rate adjustments that I'm showing all correlate to cost of service studies. So in 2018, we implemented a pretty significant rate adjustment to accommodate for two very large infrastructure projects that are water and wastewater treatment plants. That was the first adjustment that we had made in over 17 years. Since then, we've been a little bit more proactive about adjusting rates each year. The next cost of services study happened shortly after that. We did a five-year rate flattening program between 2010 and 2015. Prior to that, we had a declining block structure where those that used more water paid a lower rate the more you used. And so now that's a flat rate system where everybody pays the same. And then in 2018, we implemented a cost to serve rate structure after the most recent cost of services study. Essentially that set up a rate structure where each specific component of the structure was designed to generate revenues to offset certain fixed variable and capacity costs. So that's the structures that we currently use. A little bit about how we project our consumption and our revenues. We do it a little differently for the upcoming year. So in 2027, we basically take a 10-year look back and do a trim mean where we reduce or we eliminate the top 25% and lower 25% consumption years and use that 10-year trim mean to look at what our consumption projections are and then apply all of our rates to that. We do assume a marginal growth rate after that of about 1%. And I'll show you a little bit of information on that why here in a little bit. But the goal we've always maintained since we've implemented these big cost of services study recommendations are frequent, low, manageable rate increases each year so we can avoid those big years. So just for... For informational purposes, generally our forecasts include a 3% rate increase every year. The one exception would be on the wastewater side. After 2030, our forecasts include a 1% rate increase every year. But of course, we look at these every year to determine what rates may be appropriate. A little bit of background on rates, again, graphically. kind of showing the customer impacts and I'm no economics major, but this gives us a little bit of history of our average monthly bill for residential customer versus inflation dating back to almost 19, well, 69. So we try to use this as just kind of a way to make sure that we're somewhat in check with CPI. Couple more information slides about our growth and how we grow This slide shows a little bit about new connections or new customers that we bring onto the system every year. The red represents Inside City, the light blue represents Blue Township, and the purple is the total between the two. As you can see, we have a general trend where for the past 10 years we have consistently had fewer and fewer new connections. And so that's why we don't project a substantial amount of growth when we're looking at consumption for the future and revenue increases.

Randy?

Yes, sir.

On the Blue Township, is that mostly properties along 24? That's not residential?

That's primarily residential. So under our agreement with them, they keep track of all the new connections, and they actually remit us a... fee based on whether it's residential commercial it's a set fee based on that interlocal agreement so we get a every quarter we get a an assessment of how many new connections they've had and this is just on the water side the sewer side is a they do the same thing so But there's many years where, you know, considering the overall number of customers we have, which on average we have about 16,500 bills that we send out a month, give or take. Pro-rationally, they obviously are growing at a pretty good rate compared to us recently.

Of that 16,000, how many are in there? Blue Township, roughly.

So we don't bill them individually. We bill the districts. So how many sewer bills they send out, I'm not 100% sure.

So does a hookup, a new connection, show us at all if it's a single family house or a 12 plex in Round 8?

I would say generally the way that we handle whole pie family we try to master meter that facility so we don't do individual meters anymore for if there's a 12 plex we don't typically do 12 meters that's not a very efficient way for us to to meter those facilities so i would say 99 of those are commercial or single family or or duplex in general it just kind of shows the trend going down since uh kind of the building boom of before 2015. The next slide really has a lot going on here, and I apologize, but it really indicates kind of how our revenues come in over the course of the year. So the blue bar charts show each individual month and the percentage of the revenue we make in that month compared to the entire year. The blue line represents a cumulative Revenue each month throughout the course of the year obviously with December being a hundred percent I show this to indicate that while we're here. It's June We would like to say that this update is going to be reflective of half of our year in reality our revenues in June really only account for about 45% or 40% of our annual revenues I say this because So much of how our end-of-year revenues are going to end up are going to be reflective of July, August, and September, as you can imagine. So hotter months means more sales and more revenue.

So I'll get a little bit more into this here in a little bit. So now just a little bit of a snapshot of where we're at year to date in 2026.

So starting with the beginning fund balance in 2026, we budgeted a $12 million beginning fund balance. Actual beginning fund balance was closer to $14 million. So that was good. We started the year in a good position. I've listed some of the reasons why we ended up there. $3 million in budget savings. approximately of that a majority of that was debt service that we didn't realize that we had planned for and it's not that those projects didn't get done they probably just got delayed or moved moved down or kicked the can i guess we're actually almost a half a million dollars short in revenues last year and a couple items where we realized more revenue than we were expecting investment income, some rents on our water towers where we lease space to telecom, and then a little extra revenue that we weren't expecting for connection fees. So those are mostly 2025 items that kind of led to why we had that additional cash starting the year for 2026. As far as sales and consumption for this year, this information is a little bit different than was in your packet. I had shown January through May. We have gotten our second, so our months are broken into three billing cycles.

We have just received our second of the three billing cycles, so I went ahead and updated this information for two-thirds of June.

Looking at metered consumption, year-to-date, we're about 4.9% higher than 2025 and about 8% higher than the five-year average. Those are all year-to-date numbers. As far as revenues, that correlates to roughly $6.3 million ahead of, sorry, let me skip that. Our 2026 budget was $15.2 million in revenues. Year to date, we're at 6.3. And so that's about 41% of our annual budget. We're 7.2% higher than the same time last year. And as I mentioned in the previous couple slides ago, where 41% of our budget is in budget revenues for the year, that's pretty much right on track where we think we should be for June. So at this time, we really don't see any reason to project that we're not going to make our revenue number of $15.2 million. But as I said, July, August, September really make or break that for us. So hot and dry means revenues will go up. what we've received in June continues throughout the rest of the summer, more than likely we're going to be quite a bit short. So I bring this up because obviously this is just an update. I'll provide some recommendations on what our rate increases are going to be. But in reality, we always come back towards the end of the year. We take another look at where our revenues are. And if we have to adjust that recommendation, we'll bring that to you at that time. Most of the time, we have the same recommendation in the fall as we do now. Looking ahead at some of the 2027 budget items, and really we have no significant operational expenses that we've proposed. A few divisions, even though we did provide for raises and COLA for all the employees, with the exception of I think our meter services budget, almost all of our operation and maintenance budgets are less than 2025 or very, very close. We have no new positions that we've requested for 2027. The general fund transfer increased to $2.1 million. That represents just under 12% of our overall expenses. Those are for in-kind services that the general fund provides to the utilities. Approximately $350,000 in new debt payments for projects, and we are maintaining about $13 million in cash reserves in the 2027 budget.

Randy? Yes, sir. Could you give me an example of a general fund transfer, like a more specific one?

I would probably defer to management or RHNA. But in general, it is to pay for personnel that operate in the general fund that provide a service specific to the utilities. There's also fee in lieu of taxes and franchise fees. So there's a lot that goes into that. We have done what we call a cost allocation study in the past, which takes in a lot of data and checks that number to see if it's accurate. We haven't done one of those for a while. But generally, we program about a 3% to 4% increase every year in that general fund transfer. But finance really keeps track of that spreadsheet for us. So I don't know. Is there anything else, Rena, that really goes into that? Nothing else that I can think of.

No.

That's all. Thank you.

Quick clarification. Are there any questions about the general fund transfer? Commissioner Von Liddle.

Not right this second.

Perfect. Quick clarification. Mr. DeWitt said that we were doing raises and COLA. Just wanted to make sure, point of clarification, that we are only looking at a 3% adjustment for all city employees. We are not looking at performance or merit raises at this time in the recommended budget.

Thank you, Danielle. So as far as recommendations at this point, the forecast has a 3% increase. That would be staff's recommendation. Getting into a little bit more specifics about fund balances and what is projected versus what is recommended. 2027 beginning fund balance is about $14.6 million. I've listed the 2030 and the 2035 there, but a lot easier to show this graphically, so... This is our fund balance chart with those projected 3% rate increases. As you can see, as in 2025, our actuals and then the projected years for the next five years through 2030, we're looking really good. It's after 2030 that things start to decline where our fund balance levels are well below recommended. I will say that does concern me, but I know we've got time to fix that. That area there is really reflective of why we would go out to a consultant and do another cost and services study so that we can – make sure that we have somebody helping us look at all of our projected cip projects our expenses how we're projecting those over the next 10 5 to 10 years and have us help us look at maybe what other rate increases or just rate structure changes we need to make so um assume some of that reduction is due to debt service payment increases yeah i've got yeah i'll have a slide here in a second kind of shows you how the debt service goes up um Again, there's so much unknown about what we're gonna need to do. We have a lot of large infrastructure projects that are in the future to be determined, really based on growth that are sitting there in the out years. Again, we know more about whether or not we're gonna have to pull the trigger on those within the next five years. So I always like to show a potential rate increase that would keep us whole, like my own little five second cost of services analysis. And really just this shows if we were to do a 5% increase for the next five years, that's what it would take to get us where we probably would like to be in 10 years or give or take. not what we're recommendation recommending it's kind of just something i like to show what it would take to get us to where we're meeting that recommended fund balance just for informational purposes so randy on so you're on this chart you're putting in like a big capital spend at some point or so all of our project yeah all of our forecasts includes Our current budget and certain percentage increases in the out years for our commodities, contractual services, etc. We have known maintenance projects, so projects that are under $50,000 that we try to plug into the budget. We don't really look past more than five years or so with those. And then... Of course, our six-year CIP plus everything that's actually beyond that six-year CIP as well, we have those plugged into the forecast. So this includes all of that. That's why that recommended fund balance increases quite a bit just because we know we're going to have a lot of projects that are in the works that we're going to take on. I will also note that just philosophically that recommended fund balance does also include the general fund transfer. I don't know the specifics of why, but we kind of treat that like a debt. And so that recommended fund balance, that number is calculated based off of three months of operating expenses and one year debt service. And so that's what's telling us what that recommended fund balance should be. That's just a kind of a guiding principle.

Sorry, say that one more time.

Three months of operating expenses and one year of debt service.

All right, thank you.

So that's just kind of the general philosophy.

These graphs are nice and pretty, but it would be nice to have spreadsheets year by year by year by year of the line item revenues projected and those line item projects. and their associated debt service.

I've got them. I'm sure there are a bunch of them. I've been staring at them for the past month. They exist.

So we can see the impact of debt and all these big projects. All these projects come up throughout the year. You say they're being paid for by the water fund or the sewer fund or whatever, but we never see... The real impact.

Sure. I could I could talk about those. We'd be here till tomorrow, but we can definitely put something together for you.

Be nice.

Okay. Conversely, I always like to try to show the worst case scenario. So if we did not do any rate increases that that dark trend line kind of shows where we would be. I mentioned it all the time. The rates we set for 2027 don't have a significant impact on the next couple of years, but it's compounding. So When we make decisions on our rate increases or lack thereof for next year, it really has a major impact five, ten years out from now. It's a compounding impact, but that's why we take a look at these every year to make sure we're not putting ourselves in a bind down the road any more than we have to. So I always like to show that just for purposes. This is really just a chart that I think graphically shows our revenues versus expenses and how they fluctuate every year, but also gives you a good idea of really what our debt is out of all of our expenses. So I couldn't tell you the exact number, but generally we're, I would say around 35% of debt to income. So good piece of information. to share. And then the last thing I'd like to show are some customer impacts or some comparisons to our peer communities. This is the average monthly residential water bill compared to all the first class cities and some of the largest second class cities. Average residential Water bill is determined based off of seven units of water a month. A unit is 750 gallons, so just a little bit more than 5,000 gallons a month. That may not be the best metric now, but that was common to what was used for the past 10 to 15 years since I've been here. But it just goes to show that, you know, the city of Manhattan with the proposed rate increase compared to these peer cities, it kind of shows that we're not out of line. And in respect to our peer cities, we are relatively affordable. I will note that we don't know what those other cities are going to do for rate increases. It's almost guaranteed that they will raise rates. Some of these, they project their rate increases multiple years, so I've got that data, and it's reflective of what their 2027 bill would be, but a majority of these are reflective of their 2026 average monthly bill. So this is good information to have. It's definitely not something that we use to determine what our rates should be. And then the last one would just be a customer impact. And we like to focus on our largest categories, our residential low and residential average customers. Those are the customers who use two and seven units. So with a 3% rate increase, the average residential customer would see an increase of $1.23 a month or just under $15 a year if we implemented those recommended rate increases. That's all I have on the water. If you have any questions, I'm happy to answer them. If you want me to move on to wastewater, I can.

Just kind of a general question on rates and the rate for average customers versus large. Sure.

water districts supporting our rates to those water districts higher lower similar yes they have so blue township for example they pay a twelve point five percent surcharge I believe outside city customers they pay one and a half times I think most of our wholesale customers are generally twelve and a half to twenty five percent surcharge depending on what that agreement what that what the negotiated rate was during that agreement so those are even though there are bigger customers we're not giving them a bulk discount so it really is and it's important that we collect more money from them because Obviously they're getting a huge benefit from us and they're not paying our property taxes, et cetera. So it helps out with that a little bit. Okay, can I move on to wastewater now? All right. So a lot of the same information. just for the wastewater side. So again, 2026 beginning fund balance was 12 or budgeted was gonna be $12.5 million. The actual beginning fund balance was $16.5 million. I will note that when we budget a beginning fund balance, we are a little bit conservative. But again, we're about $4 million higher than we anticipated we would be, about $2.5 million in budget savings. As far as revenues, we matched the budget almost spot on. And then we had almost a half a million dollars in extra investment income. Those are the larger items. There's a lot of other small things that led to that increase. So that's where we started the year in pretty good shape. And it's going to have an impact on how we finish the year. So as far as consumption, wastewater is a lot easier to project. Most of our billing is based off of residential customers. They are billed based off of winter quarter average. Whatever their winter usage is, that's what we determine their base usage to be, and then we use that same consumption throughout the entire year. There's a lot less messiness that goes into trying to project wastewater sales and revenues. So for a year to date, we're at $7.1 million. That's 48% of our budgeted revenues. Again, that is with only two of the three June cycles. The third cycle is generally the smallest. We're about 4.6 higher than 2025 for the same time last year. Again, I don't see any reason that we would not meet or exceed our projected revenues. As far as 2027.

Randy, just to be clear, the months you look at in the winter to establish the rates are three months, like December, January?

December, January, February. Some cities use four, and they include March. So just generally, we assume that that's indicative of a customer's true interest domestic water use so it factors out summer irrigation you know everybody assumes water consumption goes up in those late spring and summer months so the commercial side of things their sewer billing is based on water usage year-round so that's the one one difference that we treat residential customers differently than residential customers so As far as expenditures, pretty similar story to the water side, other than the personnel increases, really no major operational increases. We do have a big slug of maintenance and CIP projects that we're proposing for 2027. Again, that $2.1 million general fund transfer, it's the same as the water, but on the wastewater side, that represents 13% of all of our expenditures. We're looking at approximately $1 million in new debt payments based on projects that we're either working on now or were completed within the last few years. And so that debt financing is starting to kick in. We're looking at approximately $13.6 million in cash reserves. So discussion on recommended rate increases. As I mentioned, our forecast is 3% at this point based on how we started the year. In my mind, I think this would be the first a good year to really look at doing no increases. So We're really in a good place financially in the wastewater fund. So there's no reason to to increase it So these are some of the some of the fund balance numbers based on that 0% increase so we're projecting the fund balance for 2027 the beginning fund balance to be sixteen point six million dollars and Again, the same things graphically. The green area shows the forecasted rate increase of 3%. The dashed line shows what it would be for 0%. Again, I have no concerns about the next five years, anything after 2030 or so. Again, that's where we would probably hire a consultant to make sure we do a cost of services study that is setting rates appropriately to help us maintain a fund balance that is close to recommended. Projecting things out to 2035 is good information, but that's not why we set our rates in 2027.

And so this would, we agreed to do the new wastewater project. Correct. And that debt service would probably run out, what, in 2042?

We did 15-year, we proposed to do 15-year debt service on those. Those will kick in about 2031, but simultaneously we actually are taking some debt off the books from the aforementioned large infrastructure projects we did starting in like that 28, 2010 range. Those were 20-year KDHE loans. So while we're getting ready to add a lot of debt, we also have a lot coming off the books about that same time. So that would be why you kind of start to see a downward trend in this. Same information as far as revenues versus expenditures. You can really see that debt story right there in that 2031 where the debt itself, it stays relatively flat, but that's indicative of the extra expenses we'll have at that time. A lot of the same comparisons here. This shows both the 0% rate increase and the 3% rate increase compared to other cities. It really doesn't make a huge bit of a difference. We're still well under the average. Again, I'd like to live right here in the middle. What this shows is we are relatively affordable, yet if we have something that comes in the works, an emergency, and we gotta adjust our rates, we do have a little bit of room to grow, and we're still at a reasonable rate. And again, customer impacts, obviously with a 0% rate increase, there is no impact. Our average residential customer would see a bill of about $48.73 a month. But just for informational purposes, that 3% rate increase would result in an average bill increase, a monthly bill increase of $1.55 per customer, or just $18.60 once per year for that average residential sewer customer. And then I also went ahead and threw together a municipal comparison for both of them combined. It really didn't show any different information. We are right there in the middle of the pack. which I would say, you know, under $100 a month, we're under the average, which is just a little bit under $100 a month. So, again, I got to reiterate, this is just for informational purposes. This really doesn't have any governing on how we look at setting our rates. So, with that said, that's a lot of information, and I appreciate the time. So, whatever questions you got.

Is there any public comment on this? Go ahead.

My name is Gary Olds. I live at 3308 Frontier Circle. Randy, thank you for a very informative presentation with regards to... water and sewer i i know i don't this isn't a model uh dialogues but i just i hope you you're you as commissioners are thinking about these questions uh you ask a question about a general fund transfer and what i heard as a response which i think i heard it right but i could have heard it wrong is that reena said part of that is a franchise fee which means that just like gas and electric The city is charging its customers a franchise fee for the water lines and the sewer lines that run in the right-of-way or thereabouts, as if they are a separate utility, which I guess you could say they are, even though it's part of the city. So it's a revenue source for the city's general fund. And it's not all probably a franchise fee. Part of it's probably a franchise fee, but I don't know what part. But it's interesting, because I never noticed that maybe you did. Maybe you've noticed on your bill the franchise fee, but I've never paid attention that closely to that. I mean, there's sales tax on it, but the franchise fee kind of struck me. I guess that's the way it is in all cities. And then, anecdotally... which is irrelevant to the presentation. I know Junction City is going to be lowering their water and sewer rates because they've done a study and said, eh, we're a little high. I couldn't tell you how high. It's kind of irrelevant because you've got to look at the broad spectrum of all cities, or approximately all cities. But very good presentation. I hope it was very informative for you. I think you've been through it before, Karen, but I appreciate you putting all that work and I don't want the spreadsheets, but you can give them to Commissioner Fox, and he can study them.

Thank you. Gary, make sure you sign in. I just have one question. So we've got $13 million in cash reserves in the water and another $13 in the sewer, right? Basically.

Give or take.

I've seen... information on some cities that have borrowed from their cash balances and utilities for other projects and then repaid those and of course that way the city doesn't when they do temporary notes and things like that they don't have to go into um paying interest and that kind of and the cost of temporary notes um it seems to me that's 26 million dollars in cash reserves that Obviously, we probably have it invested someplace and are making some kind of interest off of it. But are there any other kind of interesting things that we could be doing to help the bottom line and everything else?

This hasn't been done since I've been here in my 14th year. But when I was here, I know the previous director had utilized that for... some project. Jason may have more information on that. But it's been done in moderation, I believe.

Yeah, I'm not suggesting we go crazy with this, but it just seems to me sometimes the cost of temporary notes and the interest before we get to bonding is rather significant.

it is worth an analysis to see what you can earn on that money in the marketplace versus what you're borrowing it at. And it's a great point. We analyze it quite frequently, especially with the rates where they're at today, but we maintain our investment portfolio and we're pretty comfortable in that arena as well. So we'll give you an update on that. as we get through the budget, but our investment, I would say, is still at a point where we wouldn't necessarily just borrow from ourselves to save that money. To save that money?

Yeah. So is the Bond Council in charge of our investment portfolio, or who does that?

we work with commerce bank and yeah we have a variety of options we tend to not necessarily rely on bond council but more on the available cash that we need to have around versus what we can place in those investments we look at three months six months sometimes 12. we don't let that money go out for very long just to protect ourselves but there's a variety of options

Any other questions on water?

There was one other thing hopefully I can mention.

Are you open to stormwater too?

No, no. I forgot to mention. We are trying to program in 27 and beyond a similar to like a VRF program that we had before for utilities. We have some funds in our 27 budget set aside to help establish that so we can do a vehicle equipment reserve fund as well. So I didn't get that put in there in time. So that was it.

OK, I've got it. Randy, could you just elaborate a little bit more on franchise fees, how they work with wastewater?

I would have to defer. Mr. Olds said it correctly. It's a fee in lieu of franchise fees, so we don't necessarily pay franchise fees, but we pay it over in a general fund, I believe. So, I mean, I'm not an expert on that, but city manager's office deals with those with the private utilities much more often than I do.

Jason or Danielle, do you want to expand on that?

Rena, you can correct me if I'm wrong here, but I do believe with all the energy and all the gas that we use, we owe the companies a franchise fee. We pay it out of the general fund, and then we move money from the utility that's obviously using the power and using the gas to reimburse the general fund. Rena, is that accurate?

Yes, that's correct.

Okay. So it's really not a franchise fee on water and sewer. We obviously collect revenue through water and sewer fees, but we are charged a franchise fee for all the electricity and gas that we use as an organization, just like you would be in your home.

Thank you.

Stormwater.

Good evening, Mayor, Commissioners, Brian Johnson. Anticipated fee structure through 2030. Look at our downtown east and west projects. Some other future CIPs. Comparables to our other cities, our peer cities. Talk a little bit about the levy surcharge and the fee-in-lieu also. And then also the newest piece in the stormwater fund is the fee-in-lieu of treatment, the PCBMP. So quick for financials. As Randy was saying, about 10 years ago, we did a cost of services study. And that services study told us that we didn't have equivalency between residential and commercial. Commercial is getting about a 40% break on their stormwater fees. So we set out on a five-year plan to get those equivalent, get those equal to each other. We have achieved that now. So you pay based on your square footage of impervious on your property. So your total bill then is based on the runoff for commercials. Residential pays that one ERU rate. Stormwater fund expenses and revenue revenues about 5.8 million expected to be this year balance of 26 anticipated to be around 5 million a million of that is actually in the levy surcharge or the levy transfer total we've got about Two and a half to three million dollars In that levy fee to date, we implemented that in 2019 as a way to pay off the levy. The goal of that is to generate the same amount of revenue as what the payment for the levy would be. And then when that levy bond goes off, then that payment would also go off. Capital expenses, so our CIP debt's about 4.5 million this year. Operating expenses about 1.9, and that's equipment, materials, fleet, IT, that's everything. We have about 17 FTEs in that fund. 19 are budgeted for next year. So our anticipated fee structure out through 2030, our base fee is 950 per equivalent unit per month. The surcharge is 275 per equivalent unit per month, and again, The intent of the surcharge is to pay just that levy cost. So whatever that bond payment is going to turn out to be for the levy, that's what that surcharge will cover.

This was the cost to raise the levy?

Correct, that whole project.

One or two feet?

Yeah, and the project is done. It came in on budget, no big major changes. What we're working through now with the Corps is we did a lot of stuff internally in-house, and we get what's called credits for those. and we're working through those credits or reductions in that total cost. So there's quite a few things that we did internally that we're going to get credit for. We're working through the core right now trying to figure out what those credits are that'll be deducted from that total bill. So this is our fee structure out to 2030. Again, about 50 cents a year is what we anticipate the cost of a Diet Coke can. So that would be our request per month. Yeah, Diet Coke isn't 50 cents. I know it's about 75 now, if that's what your question is. No, no.

Okay. Do we still have costs coming in for the levy? Because we haven't really dealt with the railroad costs.

We do have the railroad that we're still working with, trying to get a permit for. That has been, those funding dollars have been allocated by Congress. The last commission did agree with that allocation, and Congress moved forward and has funded it. We don't have a permit yet from the railroad, but we are working with them.

Do we have to pay 10% of that like we did on the rest of the levy? Pardon me? Congress gave us 90%. Yeah, correct.

It's a 65-35 split like before, correct.

Okay.

Yep. That's what the overall cost would be. That's correct. We are having some difficulties with the railroad. I know you'll find that hard to believe, but we are working through it. The Corps themselves actually has 60 to 70 projects across the country that they're struggling with Union Pacific with. So we're kind of in a big batch with a lot of other communities that are having the same issues. We'll give you an update later this fall if we haven't got that permit and kind of what our recommendations would be. The cost of that project we don't believe is going to inflate. It's just a matter of what we have to do to get the permit, how many hoops we have to jump through. Okay?

So is it just the railroad bureaucracy, or do they have a hang-up on it?

Well, I mean, the railroad is, you know, their main goal is to ship stuff cross-country, and they want to be disturbed as least as possible.

Okay.

So they are asking for a lot of things that we don't necessarily agree with, and we're having those conversations with them. We're in a pretty good spot with them, but there's still some negotiation that's still going on. As far as the project itself goes, we do have the project narrowed down, and the railroad agrees with the project. It's just a matter of getting the permit and signing the permit.

Okay, thank you.

So to our downtown east and west watershed, I think I showed you this a couple of times. This is our master plan for the downtown system. As you all know, CIP 4, lots of flooding in that area, lots of flooding around Campus Creek, Aggieville, CIP 6 and 10. lots of flooding in those areas, Bluemont. So this is our master plan, developed in about 2016, 2017. We have done projects one through three. Project four, we will soon be signing an agreement with KDOT on. And project five and six, we have done a concept study on. We probably will be coming back to you before the end of the year for project five and six to do a little bit more study of the watershed, see if maybe there's some spots we can get some detention in because what the master plan study is saying is there is a whole lot of water coming down South Manhattan. And we're trying to downsize some of that infrastructure because it's incredibly expensive. So again, number four, 2030 KDOT project. We'll be signing a city-state agreement here, hopefully before the end of the year. But this project would drain that area around 3rd and Kearney, around Sonic, the roundabout, that whole area. Again, if you go, and I'm sure you want to read the master plan, so it's online if you want to read through that 700-page document. The goal of the whole master plan is to take water off of the Tuttle Creek Boulevard ditch and carry it to the north to get it out casement and haze. The ditch is capacity constrained. It's full. In about a two-inch rain, it'll fill it. So anything after that is either going to flood or we're going to carry it around to the north side and get through casement and haze through a gate well there that was done with the levee. That's the executive summary. So again, 2030, we'll be working with KDOT. They're going to be rebuilding Tuttle Creek Boulevard, I believe from the mall entrance all the way to casement. They will tear it all the way down to the base, add utilities, crossings, all sorts of stuff. During that time, we can then install our storm sewer. Very advantageous for us to partner with KDOT on it. It's going to be a significant savings, not only in cost, but also design costs because we can partner with KDOT, as well as impacts to the public. Rebuilding Tuttle Creek Boulevard is not going to be easy. It's going to be a difficult project. There's going to be a lot of traffic, a lot of detours and stuff. So being able to combine with them is very advantageous to us. So this is our future kind of out years as we look out into the future. TCB North Channel, that's actually under construction now. Our Kearney Third Street outfall, that's at CIP4. That is 2030 is our anticipation now with KDOT. Then lower Kearney then would extend that crossing up Kearney to get eventually to North Manhattan. We have that penciled in in 2031. Casement Road. So we've done a 30% design on Casement Road. We would like to widen that to three lanes between Allen and Brookmont. There's about $2.2 million in storm sewer in that project. There's about a $5 million delta for the roadway. So if we could get funding for that somehow, we do have some stormwater dollars that we can attach to that to help bring that overall cost down. We'd like to go to a three-lane section like it is north of Brookmont and then add a trail on the west side of Casement there between Allen and Brookmont to get that trail system completed to there. As you know, Casement Road is two lanes now. It's open ditch. We have quite a few accidents along there. A lot of people going down in the ditch and getting hurt, so... That's a project from our standpoint we'd really like to get back into. We've penciled it in for 2030. We have moved it a couple times just because we don't have a funding source for it. Again, that South Manhattan, number five and number six is South Manhattan and then 14th Street. The South Manhattan piece, we actually might break into two phases because the outfall of that into Wildcat Creek and by the South Manhattan Bridge, crossing the UP tracks, crossing Fort Riley Boulevard, lots of permitting in there. So we might actually break that project out into an A and a B and get started on the permitting process, maybe within the next six to 12 months. And then last but not least is the Upper Kearney piece, which would then connect us into Aggieville, North Manhattan, Bluemont, Anderson, that whole area there to intercept that stormwater that overflows from Campus Creek.

Could I just ask, we talked about the K-State drainage thing.

Yes.

Shouldn't that be in there somewhere?

well we don't have projects identified all we have right now is a master plan that we're going to put together okay if that master plan does indicate that some detention would help us we'd come back with a master plan for projects okay so we're just it's just out there yeah yeah you'll be seeing a scope and fee from us uh to get started on that master plan probably in august or september as we work through those uh costs and those fees associated with that plan

You don't think you should maybe have a placeholder for that?

We had it in last year's CIP. We got a placeholder in last year's CIP. I didn't put it in this one because the cost is about $200,000. It's not a major. Yeah, these are big ones.

Okay, yeah. Thank you.

So I want to just preface this graph here by saying the revenue on this, the purple line there, it does show our surcharge and our fee in lieu and our PCB and BEE fees. So that purple line, again, we've tried to save up some money to buy down that. levy debt at some point, that purple line is going to come down pretty substantially at some point as we buy down that debt. So while this graph looks really good, I just want to remind the Commission that that revenue, that beginning fund balance, does include dollars that are already allocated. So levy dollars allocated, fee-in-lieu dollars allocated, PCB and BEE dollars allocated. So that graph will come down as you allocate those dollars out. Here's our comparable cities for 2026. Like Randy said, all of these cities are looking at increases, but this is as we stand today as compared to our peer cities. Hutch, Wichita, Lawrence, Overland Park, Topeka and Lenexa, you can see we're kind of right in the middle there. And I always, I think, well, I used to have a little tidbit down here. It didn't get, it must have got cropped off, but Wichita and Overland Park, I'm sorry, Wichita and and Hutch also dedicate property tax to their stormwater fund, Wichita is two mills, Hutch is a mill. So while they are lower than us, by the time you include your property taxes in there, they're probably actually quite a bit higher than us. So there's the rest of the cities, obviously Topeka, Lenexa, Manhattan. And again, as you go down the table here on the left side, 50% of our businesses pay less than $50 a month.

What is an ERU?

Equivalent residential unit. So every 3,600 square feet of impervious area is one equivalent unit. Then as you keep going down, 75% of our businesses pay less than 100. The top 10%, so you're talking about... 15 businesses total would pay more than $5,500 a month. Top 2% would be maybe three or four businesses. And then the Walmarts of the world are that top 1%. There's maybe three of them in the city that are paying more than $1,500 a month. And I'm sure we can all name them. You can think of big parking lots. So the levy surcharge, again, the goal of the levy surcharge when we created it in 2019 was to raise revenue to pay for that bond payment on the levy. To date, we saved almost $3 million. I just looked at it this afternoon. It's about 2.5 or about 2.8 for a down payment. So again, that'll bring that purple line down when we put that money towards that down payment. we did increase to 2070 275 and this year we don't anticipate another rate increase for 2027 we would like to wait and see where we're at with the levy and where we think our final costs are going to be before we would come back with you to you with a final recommendation so that levy debt is not permanent debt at this point correct you're correct it's not permanent debt temporary debt yep Yeah, we actually got real lucky. When we issued that permanent debt in 2020, 2021, we got like $20 million at a 0.4, 0.5%. So we got a really good rate on that. So our fee-in-lieu, this is only for the downtown watershed. About six projects total have utilized it. There's about four or five in the queue also. We are proposing no increase for this in 2026, so we would stay with the current $3.08 per square foot. There's about $300,000 or $400,000 in that line item also. That allows you to buy out of doing detention if you're in the downtown east and west watershed and then we take those dollars and those dollars will be allocated towards cip number four so we'll buy down that debt with these with these dollars Fee and lower treatment, so this is the new program we came to the Commission with last fall. This allows us to take treatment dollars and treatment duties away from developments in the city and then we take those dollars and working through K-State and local agriculture we go out to the county and into the Blue and Kansas River watersheds and we do erosion control steam or stream bank stabilization, all sorts of stuff to help the waterways in and around the city to stay clean. We just implemented this last fall and I think that there's about four or five projects already signed up for this. Obviously it's a lot easier, a lot cheaper to go out into the county and do implementation of stream water or stream bed restoration than it is to do it in the city. It's just a lot more complicated in the city. So other policies, projects we have in the works. We are talking with some property owners in Wildcat Creek Watershed for doing some detention or expanding some fee-in-lieu into that watershed.

Are we talking, is the county involved in those talks?

We talk with the county, not formally. We haven't done a presentation to their board, but we do talk to staff once a month. We meet with staff once a month and we talk through things that we're working on together. Campus Creek Watershed, obviously we were before you last week to talk about that a little bit. And then also the UP Railroad Stop Gap that we're still working through. Those are items kind of on the front burner for this year. Yes, Commissioner.

Oh, okay Well now you have questions this has nothing to do with budget and I'm thinking of the creeks in the city and Large trees that have fallen into those creeks as a result of those storms. Yep any kind of assistance to property owners with large trees that are now in the creeks?

So typically the answer is no, because when those were platted, those were platted as part of their private lot. There are spots that that's not true, that there are spots that there is some help that we can offer. It also depends on what is in danger should we have a flood. We do have infrastructure along our creeks and rivers that could be damaged. And if they could be damaged, then that's something also that we'd take a look at. If you are a property owner that has that scenario, I'd suggest you call our stormwater department. They'd be happy to come out and look at your backyard and look into those regulations and see if there's something that's possible.

Thank you.

Yep.

Andrew? Any questions? Okay, is there any public comment on this issue? Seeing none, do we want to give any kind of direction on any of these things? I think it's great if we can hold the line on the fees. I do think maybe it's wiser to go up one or 2% and then not have to come back the next year and go up 6%. That's just, you know, kind of ease into these things. We just, the cost of inflation, we don't really know what the cost of inflation is, but I think in May it was 4.2% nationwide. So it's just my thought.

I just, I agree, and I think staff's doing it, but we just needed each of these funds as its own entity and has its own needs, and what may be good for stormwater may not be good for water, so just kind of each one individually.

Okay. Jason, you're here with Evergy and Kansas Gas Franchise Agreements.

I am. So 20 years ago, we entered into franchise agreements with what was Westar at the time, now it's Evergy and Kansas Gas Service. Each of these have a 20 year life. One expires right at the end of this year, one expires in the first, quarter first third of 2027 the current rate structure in both of these agreements is 4% and what the city traditionally has done with these revenues obviously there's right away to maintain Brian who was just up here obviously is the department head over streets and traffic and engineering We are constantly in engagement, communication, and work with Kansas Gas Service and Evergy. With their infrastructure in our right-of-way, we are constantly talking with them about moving it, talking with them about burying it, and talking with them about just maintaining the right-of-way altogether. So those conversations and their presence within our right-of-way, per state law, allow us to have franchise agreements. The rate is really a matter of where the state caps you and what we're comfortable with locally. We've been at 4% for 20 years. When you pay your bill, you may pay attention to your bill close enough, you'll see a franchise fee. It comes back to the city. That revenue, again, back into the general fund helps offset costs associated with maintaining that right-of-way. I wanted to give you a breakdown of just the 4% rate today with Kansas Gas and Evergy, $3.8 million. We do carve off a half million of that, and it goes to the City University Fund. It leaves us $3.3 million to operate at in the 2025-2026 timeframe. We wanted to bring forward the options of going up to 6%, but also including the 5% as an option. As you can see at the bottom, a 1% increase can generate a pretty substantial amount of money, almost a million dollars, 945K. 2%, 1.89 million. We bring these to light this evening because as we prepare for the general fund and as we prepare for conversations about debt, This is a revenue stream we obviously haven't adjusted for quite some time. We have engaged with both Evergy and Kansas Gas recently in Aggieville, in K-State, North Campus, and even downtown. And these are areas where we have made substantial investments to bury overhead lines, to move them to allow our roads to expand, and create a safer environment. for not only the folks working on those things, but when storms roll through Manhattan, wind blows, those lines are below grade, they're not swaying in the wind and hitting trees and possibly falling on structures. And when it ice storms in the winter or snows, there again, they're below grade. All our new subdivisions, And Brian may remember the year we required this to go below grade, but within the last 25, 30 years, yeah, we've forced them. In a new subdivision, you don't see overhead power lines. In 2007 or 8, with the ice storm, we know a lot of our neighborhoods were dealing with a lot of issues. We're trying to minimize those. These are the types of revenues I would just say could go back into possibly helping debt service and offset some of those costs that we currently have mill levies dedicated towards. If we brought some of these revenues into the general fund, we could look at moving some mills out of the general fund into the bond and interest to help address some of that debt we had talked about on April 28th with you all. As we prepare the budgets for 2027, looking for guidance and feedback this evening, is this an area you wanna look at for potential revenues? Five and 6% we see in a lot of first-class cities. in Kansas. I think a lot of first-class cities are like us. They're progressive. They're growing. They're impacting the right-of-way. In relationships with energy and Kansas gas, there's costs associated with that. So they go back to this. The state caps it at 6% or at 4%. Is there an appetite to look at this as a source of revenue? I did want to provide...

I think 5% of of 500,000 is gonna be 520,000.

It's a 1% increase.

Oh, I see, I see.

Yep, yep. Okay. So yeah, just to give you that perspective.

Yeah, I see.

Yep. On a customer, and these are, google generated i did not i could get the kansas gas energy data i wanted to focus on residential but based on what i was reading and what i found online i do think we are are currently right around that 85 on gas and right around 140 on average there are clearly bills below this but there are bills above it from the residential perspective So from the 4% are current, this customer is paying about $8.16 on a monthly basis. If we go to 5%, they would pay that $10.20, that $2.04 increase. If we go to 6%, it would raise it by that $4.08, or it would go to $12.00. Wanted to give you a feel for that. You've seen a lot of our utility rates going up and having a $1 to $2 impact. This is obviously in that realm as well on a monthly basis. I would also point out the revenue that we do pay into Kansas Gas and Evergy as franchise payers obviously comes right back to the city. And that's why we handle it in the general fund. Just for your awareness, the revenue that they generate off us, they do give that back. They collect it, just like we're another customer. I wanted to point that out. We didn't quite get into that earlier, but even though we do pay franchise fees, they come back to the city.

But Jason, on the current 3.3 million, does any of that go towards debt service?

Not currently. We keep it in the general fund. It's part of that $38, $39 million revenue stream that we operate on.

So we do have significant debt service increases staring us in the face. Can we ensure that if we raise it to 6%, that $2 million a year... goes towards the debt service.

Yeah, and I mentioned in the memo, right now we're about 12 mils in the general fund supporting the operations of the city. Yeah, if you got 1.8 million a mill right now, we'll have next presentation. It'll show you the mill's worth about $800,000 now. It was about 748 last year. It's about 798 this year. So we've got a $50,000 increase. So $800,000 per mill. you get a little over 2 mils, almost 2.4 there with that 1.8 million. And you would see that corresponding decrease in the general fund and increase in the bond and interest, which would shift property taxes to your debt.

But if our debt service is going up to 3 million a year, then that's going to offset.

It would.

But at least it's not going to raise...

It would property tax and we pointed that out in the memo to we've traditionally had five to six mills supporting debt in Manhattan, and this goes all the way back to 2000. You know, in 2023, 2024, we started tweaking mills, moving mills into the general fund out of the bond and interest 0.66 currently in the bond and interest fund of the mill levy support. We'd like to grow that back to five and six. Revenue streams are one way to do it. Looking at costs and what you would possibly reduce could be another. This is an option we wanted to get in front of you. If there's an appetite for this when we come forward, we can show the offsetting mill levy in the general fund. If this is a revenue stream you'd like to see us increase.

and Jason about spending some of this money on energy efficiency you know if we can find some ways and we've done an energy audit of the city find some ways to cut some of our costs in the long run over a period of time that would come back to you know and if we can front load some of those things not just solar but just a number of things we do I think it's very important to not just worry about the level of the property tax always, but rather see what we can do with our dollars to make the whole thing run much more efficiently. And I think that will cut costs in the future.

this is this is one element of a potential revenue stream uh... there are other avenues uh... we could explore uh... initiatives we know we've had interests and we've had companies come in pro bono just really look at our systems look at our facilities and be like this is what we would estimate you invest in this lighting you invest in these upgrades you could see A return on that investment, three, five, seven years.

But if we front load it, we'd see it immediately.

Yeah, and there's some low-hanging fruit out there, Commissioner, no doubt. It's a topic that we need to have a lot more conversation about and see if that's where we want to go. Some of those are, you know, it's a one-time cost. It's not an ongoing. You make the investment, you get the return over time. Revenues like this would give you that flexibility to prioritize those on an annual basis. This is revenue that just keeps coming in year after year. It's not a one time shot of revenue. As I mentioned at that last slide, do we want franchise fees to be part of that bond and interest debt discussion. If it is, we can integrate that and bring that back to you all. If it's something you're not interested in, we'll move on to other alternatives. But wanted to bring that to your attention. Again, reiterate, a lot of first class cities are in that five to 6% range. The state of Kansas caps it. You can't go beyond six. And we do engage a lot in our right of way with these two entities. Happy to answer any questions.

Susan, do you have anything you'd like to add? She still is?

She may have had to step up.

Is there any public comment on this item? More discussion from commissioners?

So I've just, like you said, we've spent millions of dollars burying power lines. And a lot of those have been financed with debt. And so I see this as a great opportunity to utilize these fees specifically to pay that debt so that we don't have to put it on the property taxpayers.

Yeah, and I would just reiterate, Commissioner, we can reduce that mill levy support in the general fund by creating these revenues, and we can move that mill levy support over to the bond and interest. It effectively does what you said. We're just going to move revenue streams around to get that mill levy support back to the bond and interest.

I do concur. I'm sorry I had trouble unmuting my computer. But yes I agree with Larry's comment. It it does seem like a way to build that fund and to be able to address debt particularly since we have been working so closely on so many projects lately in our right ways. Rights of ways. Thanks. Okay, thank you.

I was going to ask, so as far as like burying power lines, are we close to being done with that?

We are. We started on North Manhattan, hopped over to college. We've completed all of Kimball on that northern side of campus. In Aggieville, we have two of the four alleys buried. We have looked downtown at their alleys multiple times. It just creates such a safer environment for not only power outage possibilities, but the tenants. We upgraded a lot of services in Aggieville as well, put those businesses and those structures in a much better position to operate in the future, and we'd like to continue to look at those options and opportunities downtown as well.

I'd like to, but if we're in a big... budget constraint. This is one of the things that I would consider not doing.

I say that more as a five to ten year approach, Commissioner. As we get back downtown and we start looking at implementing plans and redevelopment opportunities, it would be another opportunity for us to look at that.

I think that we do have to invest sometimes and the other night we talked about trees in Aggieville and I just read something that said adequate tree coverage can lower the temperature on the sidewalk by 10 degrees. So I mean that's pretty significant if you're gonna want people to wander around in Aggieville and have a beer here and shop there. If it's 80 instead of 90, they might be encouraged to do that. So sometimes we kind of nickel and dime things instead of looking at the big picture. Okay, let's go on to an assessed valuation overview. You could do that one too.

Well, I think we're gonna have Ben Hart, our representative from Baker Tilly. He's been helping us a lot financially, come up and talk to you all about our valuation.

Burst the bubble a little bit giving you where our valuation grew to a little bit, but we'll let Ben Thank you for having me come back I must not have done too bad a job first time so we received the assessed value for June 15th from the county the total value went up uh, between, uh, 25 and 26. Uh, it went up, uh, what you see on the slide there, 798,000 is the mill levy. Uh, it went up by 7.7, 6% increase. Uh, at this point, what we're going to do in revenue neutral, understand revenue neutral is. really holding revenues the same as it was last year to this year. And when I say revenues, the property tax, and that's what's called revenue neutral. In order to keep that the same level, the levy drops according to the county treasurer. And by state law, the county needs to tell us what that levy is. So what's up on your screen, 54.506 is the levy rate. It would drop to 51.056 to generate the same property tax dollar for the 2027 budget. Obviously, tonight we're not asking you to discuss any of it. We're just wanting to make sure you guys understand what was distributed and how much was distributed according to the county office. The budget, when we present the budget next week, it'll take into account the levies, and we'll go through that in detail, the levies for each one of the funds and what that history looked like. And I believe just over 6% of that increase was residential, is that right? Is what we received today by email. So any questions you guys might have with this process or this valuation?

Just one question. So in the county clerk's report here of the assessed valuation, the total, it says $798,600. Right. But on the back, it shows 2025 pending BODA orders for tax exemption requests for $4.45 million. And the statement, It says listed above are pending exemptions filed state board of tax appeals in your taxing district. In previous years we have removed this value from your budget information sheet. However, the state has advised us not to remove this value. So please consider this information with working on your budget. So how should we consider it? Should we reduce the valuation by that 4.4 million?

Right, it's a working number, right? What we would do from a conservative standpoint is to reduce it because if it does come through Then it's going to affect the levy, right? Wait, we used to do that back when I was at the unified government We do that that levy then comes out a different number because the timing of that boda order is If it goes down, then obviously the levy would come up because the assessed value came down.

But we ought to set that straight right up front, is which number do we use, the 798 or the 794?

I think that's yet to be determined between the minds in the room.

I think if you look at the companies listed there, there's some that always argue and Not paying them can last year after year after year.

We're one of them. The city of Manhattan is one of them. We've been through quite a few properties with the appraiser's office recently and I think they've So are these just appeals of lower valuations? We've had both rec centers. We've had both parking garages. We've had multiple properties. I mean, we've had a lot of properties. They wanted us to go back through the process, get through BODA. Some of them had leases associated with them, so that triggered... uh that mechanism i will tell you out in pott county the joint maintenance facility was on for a bit and we got it off so it does it does fluctuate the valuation it's probably more of an issue in pott county yeah you mentioned it it's you know 794 000 versus 798 000 not a huge difference but in pottawatomie county it it can be a big difference so i would just offer that if you prefer we use 794 i don't think that's going to be a really big issue where it's going to sift out um i mean you guys have had more experience in that than right yeah

I would just note, commissioners, the difference that we're really talking about as far as the 54 mills that the city levies is $324,000. So really, whether we use 794 or 798, we will certainly be able to work that into our $43 million. Thank you.

Is there any public comment on this issue? Seeing none and hearing nothing from my fellow commissioners, I would entertain a motion to adjourn.

before oh sorry sorry usually you look at me and you ask me if I have anything no okay I just wanted a quick reminder commissioners thank you again for your time this evening I also have a bet with Aaron that this meeting would go past 730 at least so I need to drag it out a little bit longer no I'm kidding just a reminder that we are going over the city managers recommended budget tomorrow next meeting which will be 730 that's a special meeting that we have on the calendar I will be taking into assumptions that we discussed this evening. So we will have no change in the wastewater, sorry, no change in the wastewater rate, a 3% increase in the water rate, 6% increase in stormwater rates for 50 cents per acre. a 2% increase in franchise fees we other growth estimate that we'll be looking at is that one and a half percent growth in the sales tax revenue and then we will be looking at a mill levy of 794 to seven hundred and ninety eight thousand dollars will be those assumptions going into your City managers recommend a budget on June 30th next week Yep, so that'll be 6 p.m Same, same, in this room.

Yeah, that's fine, yeah. Okay, now. Thank you. All in favor, aye. Aye.