City Council - Regular Meeting

Rob, I got your is it an email about the names of the videos there? I just I just remembered it today and I got those I got those fixed. We had the planning commission meeting labeled as the council meeting and

people would be confused. This conference will now be recorded. You can as long as you manager and you have the screen, it keeps the camera. All right, it is 7 o'clock.

We'll call the September 4th Dodto City Council meeting to order. Let's start with roll call, please. Lane here. Hana here. Daniels here. Patterson here. Macaran here. All the present. All right. Thank you. I would invite you all to please rise and join me in the pledge of allegiance. I pledge algiance 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.

All right. The first item on our agenda tonight is a proclamation for World Hunger Month. Whereas hunger and food insecurity remain critical issues in our nation affecting millions of individuals and families. And whereas the city of Dodto recognizes that food security is a fundamental aspect aspect of the health and well-being of our community. And whereas the challenges of hunger and food insecurity can impact ini individuals of all ages, backgrounds, and circumstances. And addressing these issues requires a collective effort from our entire community. And whereas Dodto is proud to support and partner with our community sponsored food bank which provides vital assistance to those in need ensuring that every resident has access to nut nutritious food. And whereas hunger action month is an opportunity to raise awareness encourage community engagement and strengthen efforts to combat hunger in Dodto. And now therefore, I, Rick Walker, mayor of the city of Dotto, Kansas, do hereby proclaim the month of se September 2025 as hunger action month in the city of Dodto. And I urge all residents, businesses, and organizations to take action, support our community food bank, and work together to ensure that no one in Dodto goes hungry. Thank you for bringing that proclamation forward. And you can see we have uh cans of food here at our place. So after the meeting, we'll distribute we we'll seed the food uh the the can the the barrel. Thank you. All right. Our next item tonight is our consent agenda. Tonight on the consent agenda, we have approve the minutes from the August 21st city council meeting. Approve pay ordinance number uh 1004. Approve contract with Royal Fence for

well 19 fencing. Approve funding requests for the Dodto Fall Arts Show. Approve change orders for the Sunflower Trail Sunflower Road Trail project. Approve change order for Riverfest Master Plan Project and accept easements and rideway for Countryside Estates final plat. Is there any item anyone would wish to move for discussion? Hearing none, would uh I would entertain a motion. I'll make a motion we approve the consent agenda. Second. All right, we have a motion and a second. Any discussion of the motion? Roll call, please. Lane, yes. Michael, yes. Daniels, yes. Patterson, yes.

McMorgan, yes. Mayor Walker on 1G, yes. Motion carries. All right. Thank you. Item two is call to public. Members of the public are welcome to use this time to comment about any matter relating to city business not listed on tonight's agenda. The comments that are discussed under call to public may or may not be acted on by the council

during this meeting. There is a 4-minute time limit. Does anyone wish to address the council under call to public? All right, I'm not seeing any takers, so we will move on. Item three is old business. We don't have any, so we'll go to item 4 A, consider ordinance 2663, creating a rural housing incentive district and approving a development agreement with Limestone Development Company LLC. Two items under this, a public hearing and the ordinance.

Yes, council. I provided a memo in the packet sort of addressing the development overall. Um but if you see the uh blue in the um photo there uh that is where the RHID is proposed to the the district will comprise what's in blue there. Um the request is for 60% of the added increment from the the new homes. um for the statutory 25 years. Um the RHIP we have capped at 8.2 million. So uh that simply means that that 60% of increment once it hits 8.2 million. Uh that's all the the RHID that that they can get. Um, also there are um provisions in the development agreement to um claw back some of the RHID if they don't proceed uh as they've promised. Um, and just as I set forth in the memo overall um the the public improvements that are required for this would be across the entire development. Um if you consider all of the incentives, um the the incentives to be received by the developer would cover about 47% of the cost for the public improvements and 53% would be on the developer. So that's something they would have to pay out of their own pocket. But the ordinance you have before you is simply forming the district and approving the

development plan um and approving the RHID as well as the development agreement for the RHE RHID part of the project. Um did include in the packet Jeff White's uh financial analysis. Um so that's there. Jeff White is in the audience as well as city bond council Kevin Wimpy. With that, I'll stand for questions. I guess would it make sense to go I mean through the presentation part since we have multiple parts and it's one development agreement to go through

the presentation for everything and then we'll do the hearings individually and then consider the ordinances individually. I think that makes the most sense. I think that would help me follow then we've not jump into sections of the development agreement we can I think Travis um developers representative has has a presentation he wants to give if

all right I would invite you to the podium we share your presentation regarding the development All right. I'm glad we're going this way because I kind of have it all lumped together, too. Uh there's clearly a lot of detail in these agreements and I want to thank Patrick, Jeff, Mike, um Kevin for their work on this. It's really complicated and it's kind of intermingles the whole project together. So, um, if I could get next slide, just I felt like it was important just to take a minute and kind of go back and say, what are we really trying to accomplish here? What does that really look like? So, obviously you're familiar with the site here at K10 in Kill Creek. And then, um, next slide, please. This is a a a representative of the type of housing we look to build here. This is from our a project that we have in Gardener called Prairie Trace. You can see the price points at the at the bottom of the screen of of those homes. They're a little smaller than, you know, the traditional Johnson County threecar garage. And we're we're doing that to hit price point. We we accomplished that by narrowing up the lot. We've had a lot of discussion in the zoning process about how we hit that. You'll remember that this was zoned R2 um not R1 to allow us to hit that narrower lot size and a a little bit lower price point. So, we can get sub4 um which unfortunately in today's market is what I I refer to as attainable. Um it it is hard to get much lower than that. Um these get a lot of questions about these types of homes, but they are on basement. I think a lot of questions about slabs, but these these ones in the picture with the pricing you're seeing is uh those are on basement. So um we're also looking to do first class mult multif family. This is uh and the same projects on the same site um in gardener. Uh this this particular project was a 450 unit project. Uh we'll we'll be looking at something smaller

than that but of similar finish level. Um it uh we're really proud of this one because we we use a little larger building footprint but we put an elevator in it. And in Gardener that's the you know it's the only apartments with elevators and we really were able to reach out to some of seniors who were looking for that type of housing but unable to find it in in their community and so pretty proud of that. Obviously, the demographics excuse a little bit younger as a whole, but uh being able to provide that to seniors is is is pretty great. And then finally, transit focused retail. Uh this is a busy intersection and it's been um a kind of a front door intersection for Dotto since they built it in 1978. And um you the one thing I get asked when we we you know, we took down this ground was like when are we going to get a sea store here? I want to get gas here. Um, we got a lot of church with a lot of folks from Dotto and they keep getting that question and I'm say we're working on it. We're working on it. Um, transit focused retail specifically, uh, gives the city an opportunity to capture sales tax from people that don't live here. And, um, I think that's a great way to in find funds to invest in your city. So, I want to talk also a little bit about the process and how we we got here and how this project has kind of changed along the way. Um this was our original plan that we took to planning commission uh in in 2024 and um you may recall that we had a almost three and a half hour meeting with a lot of people that were less than thrilled by this plan and um we were denied the planning at the planning commission for the retail and the multif family. Uh the the single family was recommended, but we got a lot of push back and and the projects that we're working on, this one specifically, kind of works in concert like an ecosystem that there's revenue generation off of each element of the project to make the thing go,

especially a project like this with significant site cost and a lot of off-site sanitary sewer. Um we went back to the drawing board and we met with the neighbors. We had a meeting at the senior center. We talked to folks on the phone. Um, we tried to get a feel for, you know, how we could find a balance where we could put together a project that pencled while the neighbors could support it. And so we we came up with this plan. We drafted a new plan. And as you can see, we wrapped the we wrapped the single family around the multif family to buffer it from the east. We added a buffer track to the east. Uh, we shrunk the multif family down. We actually shrunk the retail down, too. So this site that was the result of those meetings with the neighbors is 50 multif family units less. Um we went from um we went to 102 single family units and we lost two pad sites on the retail site. So it changes the calculus of what we're doing when we try to put it together. But I felt like it was important to to get the neighbors on board. Um and I mentioned a little bit how how difficult this site is to work with. And there's a reason it's been sitting quiet for since this intersection was built. Uh ne next slide, please. There's an 82 ft feet of grade change on this site, which is really significant. And we're going to run an east west collector uh in next slide across this site. So, we have to deal with that grade change um with with coververts and and fill materials and try to get that to be uh it's not going to be level, but it's going to be be workable. Next slide, please. We're going to add some uh turn lanes at Kill Creek and I think that's going to be really needed as we add a little traffic to that to that site. And I think not only will it help our site, but it'll be of benefit to uh the barn across the street when they're having weddings or

events get out there. There's a little more traffic there, too. Um let me see. Uh next one slide, please. This site and you see the green dotted line here. To activate this site, we're going to have to put in about a mile of off-site sewer. And we've got a lot of easements and to get and we've got a lot of work to do to get through there. And uh I think when we look at this, it it that's the big hurdle for this site and it's what's been keeping it from developing for all these years. Um I'm going to I'm going to go next slide, please. Oh, sorry, one more. Sorry. There we go. Uh so this is the D city uh of Dodto sewer plan that uh has been published for a while and I I drew like a red line kind of circling the area that we're going to put in. So just to kind of show that it aligns with what was planned by the city uh for the sewer line. And I think it's worth noting that that light blue shading is area that could be activated through that sewer main. and and while there there could be some extensions off there to activate all of it, but but it would be able to gravity feed that shaded blue area and then when we leave it at the edge of K10, the gray area to the south, they can get to that bore the highway. They wouldn't need to get any offsite easements, etc. to to be able to continue that and and activate that side on the south side of the highway. Um, I think the uh it's important to realize that the this these improvements will add benefit to the city as a whole, specifically that that sewing area, but also the east west collector will will pull a little traffic off 89th Street. There was a lot of conversation about that during the planning process. We actually ran a traffic study through a third party and

it they they concurred that it would reduce traffic on 89th Street by having a secondary east west collector street between uh uh Corless or Waverly and and Kill Creek. So, uh I think there's an obvious question here tonight and why there are two deviations from the incentive matrix uh after the council made some alterations to the mat matrix per our request nearly a year ago. um specifically the RHID request and the second an additional 12 years on the C. The simplest answer is we worked with the neighbors to change our plan and find a balance that was workable and that drastically changed our project. As I mentioned, we're 50 fewer multif family units and two fewer retail pads. The cost of infrastructure has increased as we've chosen to reroute portions of the sanitary sewer to save neighbors trees at their request. We we met with neighbors, some of them in their front yards, in their driveways, and kind of they showed us the important trees that that were valuable to them, some big cotton woods and etc. So, we we massaged our routing and we added a little cost, but um working with them and maintaining the the character of their neighborhood was really important. um by doing an H RHID as opposed to an SBD as called in in the matrix, uh people who have a sewer line coming through their yard will be able to connect to the sewer line without a massive buyin. That's a big deal. Um there's multiple ways to calculate SBD connection fees, but but a very common one is by square footage. So someone with two and a half acres under the SBD concept would play pay nearly $30,000 to connect. And that's just not reasonable for most most people living on a 2acre parcel to the north of us. That was one of the big uh concerns as we talked to people more more so than giving the easement. They were worried

about the cost of connection and whether they would be forced to connect and into a benefit district that was extremely expensive. And so by rerouting our plan through the RHID instead of the SPD, uh we make it basically that cost is zero for those folks. And I I think that was a a welcome a welcome thing from from our neighbors. Um, as you know, the CD is an add-on sales tax for the area of the district, and that's that district is going to be on our property exclusively. Um, it doesn't generally impact city revenues. The manipulation of our plan has made this a really challenging thing for us. And I think doing so was the right thing to do for the community. Uh but it made our our our development really hard to pencil. And so when we got together with Patrick, we got together with Kevin and we talked through how we make it work and the levers we can pull the the C um seemed like the easiest lever to do. So um I have another slide here. So I there's my comparison of the two plans. I hadn't wanted to put that up, but next slide please. This is a list of of just a sampling of CIDs in the area. Um as you can see their links generally 22 years and that's a statutory limit that's really very common in this area. And so I wanted to put this in front of you to say, hey, what what we're asking it may be different from the matrix, but it but it's not atypical for the state of Kansas, for Johnson County, for for stuff in this area. And so that's a list. There's more than that. That's just a kind of a sampling that I put together today to show, hey, this is

this is realistic. To my knowledge, there's only one CI in in in Dodto right now, and it's a property tax COo, you know, put together with Panasonic, and I I'm not a student of that deal, but I I do know that that there is a CI in place is the only one I could find. And uh it is in place for 20 years. So, it's a similar concept to what that we're requesting for this project. So, in closing, I I want to thank the staff for really engaging with this project and working on a solution that strikes the balance of all the complex issues that surround this project. And and I'd be glad to stand for any questions you guys have at this time or or later.

Any questions for Travis? Yeah. What was your length you requested on your C? Say that again. Uh what was your Oh, yeah. 22 years. Sorry. So, the matrix says 10. We requested an an additional 12 which takes it to the statutory limit for the state of Kansas at 22. Anyone else? I did want to note the development agreement um that is before you provides that uh properties connecting the city would wave the connection fee.

So just wanted to note that on the sewer sewer. Yeah, that was something we requested on behalf of the of the people in the community that were asking us about that. what will it cost us to connect to the sewer if it comes through our yard? And we wanted to look them be able to look them in the phases say it won't cost you anything other than what it takes to run the pipe between your house and the and the line. All right. Thank you, Travis. So, uh, Patrick, did you we want to run through any additional presentation material on any of the other elements from our side? Uh, no, I pretty much covered everything in pretty pretty good depth there.

Yeah, I think um pretty much covered it. I did want to uh comment in my memo indicated that uh the request was consistent with um the matrix. Um but as has been pointed out um that in the matrix anywhere that CD is mentioned in the matrix it has to do with sales tax and it indicates 10 years. So, I don't know what level of thought was put into that, but I mean, Travis is correct. Most of the CIS you see are the statutory length, the 22 years. Um, but I did want to make that correction. Um, so appreciate that. Um, so if we don't have any questions now or any other presentation, we'll open the public hearing. Um um I we'll just we have to do individual public hearings each item. So we'll um

start um I will now officially open the public hearing for ordinance 2663 which is regarding the rural housing incentive district. So if anyone wishes to offer comment about um the ordinance to create the rural housing incentive district, please come to the podium, state your name and address and you'll have make your comments. The hearing is now officially open. Right. I'm not seeing any takers, so I'll close that public hearing. Um, the next hearing that we will have will be regarding the creation of the community improvement district. So, this would be Mayor, if you don't mind if we can go ahead and take up ordinance

each after each public hearing if we take up the ordinance. Okay. Sure. I think if that would be best. All right. Uh so then if any other discussion regarding this ordinance 2663 from the council which is to create the rural housing incentive district. Um or um ready for a motion to um real quick, have we heard from school district or county on their stance on their HID? Um no, there's been no I mean we know we we have had dialogue with them throughout early on but there's no indication that

been no indication that they would object. Of course this starts the clock the clock as it were. Yeah. Any other questions from council? Anyone uh inclined to make a motion? I'll make a motion we approve ordinance 2663 for the Limestone RHID. Second. All right, we have a motion and a second. Any discussion of the motion? So this lock in rates, this will create the rural housing incentive district. So that's all this this ordinance just creates that roll out

and improves the development agreement. But as far as 22 years, that's next. So that's not on this one. Any other questions? Roll call, please. Hm. Michael, yes. Daniels, yes. Lane, yes. Patterson, yes. Macaran, yes. Motion carries.

All right. So now we will do consider the um ordinance regarding the community improvement district and approving the development agreement relative to that item. Uh that's the 22-year 1.5% added sales tax. I will now open the public hearing. So anyone wishing to offer comment, please come forward and state your name and address. Hearing is officially open. I'm not seeing any takers, so I'm going to close the hearing. Uh any discussion from council regarding the community improvement district for 22 years on this project?

Yeah, mayor. I'll c I'll comment on that one. Um you know, there was the error in the staff report that indicated that it was compliant. Um but it's not regarding the the term. Um probably you all know that I'm pretty emphatic about compliance with the policies that we've set out. We did adopt this after we were in the process of reviewing and updating our incentive policy. uh as this came up the first time, we identified that we needed to give more focus to the Kill Creek and K10 intersection and both in geography as well as the level of incentive. Um and we did and we got it closer to to what was interest what what the interest was at that point in time. So, you know, I feel like whatever it is, if we've adopted it, it's our rules. Um, we've had a number of applications be it Flint, um, Dustin Baker, Dave Anderson, Guyger, who have all complied with the terms of our our matrix. And really, that's what we say. This is our role in economic development. This is this is our contribution. It's up to the developer to figure out how the rest of it works. It's not our job to make the pro project pencil or financially work. This is the component that the city contributes. So, if we wanted to look at changing our incentive plan to um adjust the the C when we combine the TDD, the C into one um and extend it to a statutory limit, I think that's something we take up as a as an adoption or an amendment to our incentive plan, but I'm not inclined to go along with just over stepping stepping over our plan that we just adopted a year ago. And um so you know it was made intentionally. Um no issue with the project or anything like that. I'm just very um sensitive to the policy that we've established in our

incentive plan. We've got a very unique one in the way it's tied to our comprehensive plan, our strategic plan um and to further those goals. So I think we've got something that's very unique and if you want to change it, that's that's something we would take up. But I can't support um 22 years over 10. So I I guess the the only comment I would offer on that is that when we talked about the CI um I don't know that I really thought through whether or not 10 years was the statute I didn't I don't know that I fully considered whether or not we were going to the statutory limit or not. I know that with the abatements we you know the 10 years is in our head because we know that the constitutional abatements that's the limit and that kind of set the ceiling. So um from my perspective I don't know that I was really um mindful that 10 years on a on the special sales tax was was that we would have set it 12 years short of the statutory limit. um um perhaps a lack of foresight on my part when I was talking about the matrix, but um I don't know that I had that level of um thought in my head when we were when we were last talking about um the incentive matrix for relative to the C or sales tax transportation improvement district. Only a comment I would offer.

Can I ask a question then on that? Is it something where kind of like a special use permit where in 10 years the applicant can come back and a and then reapply for another 10 year or whatever the period is that is in our plan at that point in time or five years from now or whatever and ask for an extension. At which point we would have an understanding of whether the property actually developed, whether it was performing, um what kind of uses actually uh came along. Since we believe that this is going to be a third party developer, this is this is land that's going to be sold and be developed by somebody else. We don't know the timing, we don't know the actual uses, but can it be that after a period of time, another, you know, you can come back and say, I want to ask for a 10-year C that starts now, five years from now. I would uh welcome Kevin Wimpy to the podium

to address the address whether or not that can actually happen. Right. Okay.

Right. Well, good evening mayor, council members, Kevin Wimpy with Gilmore and Bell. We represent the city as your bond council. Um on the question on CD, the the process to initiate or or modify or amend a CD is the same under statute and it requires submitt of a petition of the property owner generally speaking uh to to commence consideration of of an amendment or initiation of a CI. And so under the concept you laid out, I think we'd need to have interaction with the property owner, you know, 10 years from now to seek that extension or modify the um you know, hypothetical 10ear C. I think that's the the legal side. The practical side today would be, you know, in the developers court of is is 10 years practical? Does that is that limiting on the project? What does that do to, you know, their financials? Is is, you know, the practical financial side of what we'd be considering today? Of course.

So I guess if I can ask follow up on that then. So it is it would be possible and it is allowable that that could happen say two, three, five years from now. Now the land transacts there's a specific use but now it so now the revenue needs to flow or whatever it could an application could be filed at that time to extend for whatever period of time is allowed in the incentive matrix at that point in time it is possible then you're saying it it is legally possible it would be just like we're doing tonight right you'd be taking up a similar action to amend what would then be an existing CI

okay But question, follow-up question on that. If it was done by the new property owner, the C would be to the new property owner as opposed to the person that put in the development and put in the infrastructure that was trying to recoup it in the first place or does the C transfer to the new owner? If they when if and when they buy the property, if we did 22 years tonight, somebody buys the property, is the CD still going to the developer that paid for the infrastructure or is it going to the new owner? See? See what I'm asking? Yes. Because Yeah. If we do 10 years tonight and then the new owner does it, then it may not be reimbursing who actually had the expenses necessary to get it done.

Right. So the uh the development agreements the vehicle to reimburse the cost to the you know the grata entity in front of us. Uh and so when property that's subject to a C or other incentive is assigned during the operation of the project at that time um it it'd be customary to have an assignment agreement where the new entity or the buyer would come in and sign on to take on the rights duties obligations of the of the seller of the project. And a lot of times at that point that's a negotiation between the buyer and seller of who has ongoing rights to incentive revenues. Could would that be a possibility to have that in the agreement that they had to ex apply for an extension or could they pretty much go we don't need to do that

and what we're dealing with tonight as far as the hypotheticals

to to stick with the hypothetical. Yeah, I I suppose a new buyer could turn down extending uh the the C. I I think the the bigger question tonight and I I don't want to look at Travis and put him on the spot is is is the project even achievable with with that limitation on the C term and I don't think we can answer that you know today. So it sounds like to implement what Kevin had suggested, we would change this CI to 10 years and then a new CI would be applied for in in 10 years or at some point before the 10 years runs out. So it' be basically two separate CDs. In essence,

it it would I don't know that it's more just lingo, but whether you're modifying the existing one to extend it or implementing a new one, I think the the effect is probably the same. Yeah. Yeah. It still becomes dependent upon the new property owner fulfilling that obligation if it's an obligation, right? Yeah. and whether or not the the project the current developer the project before us uh pencils out to even start the project right that that may not they may not have comfort to uh because it's such a change in condition may need to negotiate the other elements of the incentive package to

give them confidence to start the project although I would say it's not really our responsibility to close the gap right he's not the last financial cial mechanism to close the gap. There's lots of other ways it can be done via land sale price, rent rate, other financing uh opportunities, whatever it may be. We we brought our part to the table, but we don't we don't have to be responsible for closing the gap. Yeah.

So, Mike, on that front, how much and Travis, you may be have the numbers more. What difference did it make going from the sewer benefit district to our HID as far as impact on the penciling of the numbers to where this became necessary? Uh because I do know and I do appreciate Travis has worked with the neighbors far more than a lot of other people would have. Um from the time they came to the planning commission meeting and there were a lot of people to the two hours and 40 minutes I spent with the neighbors then had two hours with Travis and the neighbors. He has been working very diligently to address their concerns to the times that I've had with the residents on 91st Street and knowing the conversations he's had with them and meetings he's had with them to try and reroute it to address their concerns whether it be their trees or where it's going through their yard or their backyard or things like that. He's been very willing to do so. If and I guess part of my question here is if we went back to the 10 years and he said okay I'm going to go back to do the sewer benefit district which is in the matrix what difference impact does that make to where could he pencil it back to the sewer benefit district which impacts the neighbors far more negatively and uh versus the RH that's before us.

Yeah, I think I understand your question and I I don't think I can answer most of it. I probably leave it to Travis, but u would say uh the benefit um district, yeah, you're right, would involve the uh particip could have involved participation of the property owners along the way, but I think most of the the work is the work whether it's done whatever mechanism is done. I don't and aside from uh switching layouts to to accommodate neighbors, I think that's going to happen either way. I think the big uh the big difference is the layout and the zoning and the buffering between that whole kind of change in project plan. So I' I'd probably turn those questions over over to Travis if you don't mind.

I'm open for Travis.

Are you willing to ready to come speak to that Travis? Um there's a couple things I I wanted to correct something. As a as a developer, we're going to do padsite preparation for these sites. Um that is our intent. And so the word developer has a lot of different definitions and sometimes that's vertical and sometimes that's horizontal. So I want to be really clear that our intent is to move quickly to put the infrastructure, utilities, sanitary sewers, roads, etc. in place to get pad sites going. And I I I would like to state that we've got a great deal of interest in this site and it is our intent to move forward rather quickly on it. Um so a couple things uh as we look at this I we can't separate them out, right? the the the RHID has uh what I would call a fuse on it where we have to build uh that first phase of single uh single family within a specific period of time. And can can we go back to my uh just the layout? Is that possible? Just it'll help me explain. Perfect. So you can see in the yellow where that first entrance is off the collector road. So we essentially to to start that single family development, we have to build the collector road from Kill Creek on the left to that first entrance, which essentially puts the collector right down the middle of the retail portions. In doing that, we we're going to have to raise that site up and that it's because it's I look at it all the time, but you probably don't. It's a lot lower than Kill Creek is. So that site's got to come up. So a lot of the utility work and the the site preparation work for that retail has got to start when the

when phase one of the single family starts. Then after we start phase one of the single family, we have to continue to move through the the single family at a specific pace. It's about a phase every other year um at you know that's the at least by statement. So we start into this thing and we start going well we get to 50 lots north of the collector now we have to keep extending the collector out we have to get a secondary point of access and so in in theory we've this as soon as the RHID starts we've lit the fuse on the retail so we're making a commitment to the development as a whole to say hey we're going right and that's why we're running them together tonight so when we go we pull the sanitary sewer line all the way through the site north to south plus all the off-site sewer which conveniently goes serves that retail site. Um so there's a lot of initial expense that goes in right away and so we're evaluating that against cost, right? And the the the asurances that we're going to get cost back and there's still risk involved, right? If the fuse starts on the CD, if we start the CI and it takes us a while to generate sales tax revenue, we're burning those years and they go away, right? And so having that runway is extremely important to us as we put the risk together and say, "Okay, we got the RHID that starts the time on everything and it starts everything in motion. Everything starts moving. Now we've got the C. We've got to get it moving, too. It's forcing us to keep moving and keep going." And so when I look at that and I evaluate the risk, it we need that runway to get there and and I understand what Mr. Hanich is saying um that that it's not the city's place to fill the gap, but what we're trying to bring to the city is something that they want. I think it's I think it would

be remiss not to contemplate some of the alternatives like we're trying to hit a specific price point here with single family homes. Yes, we can raise the the lot prices potentially, but we've evaluated the market in such a manner that there's a specific absorption rate that we're calculating in based on our experience with this specific price point in an ex-urban community like Dotto. Um, we understand that single family absorption real well because we do it in multiple cities all over Johnson County. The multif family absorption, the same. There's a lot of risk going on right now because that multif family site again when we as we work through the single family we're going to bring the road through that as well and there's a there's a ton of multif family approvals and could potentially saturate the market. We're ready to move forward as soon as we can go. We're going to try and beat that beat those other approved things to the market. But all those things factor in when that timeline starts. And that's why we when we contemplated the RHID, the C, we put it all together, mixed it up, and we came up with a plan that works and starting to pull pieces of that apart. We'll take down the project as a whole. [Music]

Thank you, Travis. I think the other key thing is like that the C is capped, right? there's a dollar on this

um that if we if it's successful if the and the the retail is successful the sales tax generation comes it's not hopefully would be then less than the the full term right because it's going to hit the 3.2 2 million and and that will expire it before the the deadline uh of time. Um, but I think the only two other comments I would have is one uh kind of lining up with mayor and that when we had the discussion about the CI, it was less about the term length and statutory capability length of a CI and more of the uh transportation tax, the commercial tax, whether it was going to be 1% on both each of them or and a half percent combined. It was more discussion about the percentage and about whether it was combined with the other type of sales tax district that was available unless the statutory limit which brings me to my second point is we do have the matrix. We do follow the matrix, but our incentive policy fairly clearly outlines multiple times that we do have the discretion and capability to work within that and work within the statutory limits that are provided by the state as well. So, it's not completely unreasonable to look at a project that's taking multiple pieces and putting them together and have them align with the statutory side of things. Another question on kind of on the flow of this, the process of this is, you know, ordinarily when we get a incentive request, we vet it out at our finance committee or incentive committee, that kind of thing. Then it comes to council for a first reading, if you will, and

then we act on it the next time. I don't recall this coming to our committee. Um, so I'm not sure if the intent here was that we're considering the 2024 application as the first review of this, but I think we would have caught this had we had we discussed this at a committee meeting unless there was one I missed or no, something to that effect. So I don't I don't also don't feel I feel like there was a gap in the process here as well. Yeah. Well, there certainly um this is this has been a year now, right? Right. I mean this pro this has taken quite a bit longer and it's changed for all the reasons we changed considerably.

Yeah. For all the reasons we've heard. And I don't think that after it changed we came back say okay this is a new process now start over. We didn't do that. So you didn't hear uh uh the applicant come before you again here with the initial pres. We only had that one initial initial presentation. And at that point RHID wasn't even an alternative. Well it's RHID still isn't in our policy. It's still that's on our to-do list, right? We're doing those case by case. But I think even at that time, I don't even think we had adopted our HID as an alternative. We adopted that then we started doing it by location. So this is substantially different than than the first. Well, I mean that's that's

and I think we again I think we would have caught it. Staff reports in error. I think we would have caught it if we would had that discussion. So I and you know to the extent that if getting it started kind of lights the fuse and sort of like you know if we ask if somebody goes and builds a structure on a 10-year special use permit there's a huge risk that they may not get another special use permit but that's kind of the way it flows. I think if if we saw that this thing got traction, the finances are working out the way they would, that probably a governing body in, you know, two, three, five, 10 years from now, we go, "Yeah, let's do a fiveyear extension or what, whatever is needed to see this thing out." But, you know, that's another hypothetical.

Yeah.

But I don't think it would um, you know, I think that that's a viable option and stays within our plan. So I think from my perspective um and this is relative to all to the matrix I guess I would say if we had a the a policy that allowed CIDs and transfer TIDs that we would have them to the statutory limit. I I don't know that I was my I would have I think assumed that if we were saying these are acceptable here then they are acceptable per the you know statutes of the state of Kansas that we wouldn't have made a more restrictive condition. Uh I wouldn't have I don't think I mean because it was the concept of this is an an incentive we want to use in Dodto you know not and

um not a separate discussion that um yeah we want to use it but we don't want special taxes longer than 10 years right so I don't I don't think we had that discussion either so I I think I do get uh appreciate that we need to um look for these inconsistencies in our uh incentive matrix um that um you know where where the policies that we're setting we need to make sure that we all understand the full ramifications of those policies because I know we every time we come up with a new project we're pushing another part of it that uh touches something that we maybe

that hasn't been fully vetted yet. So, uh, I do believe that we need to relook at that and I would be supporting to extend the C to if we're going to do it then then, uh, I don't I don't know why it would make sense that we would want to limit ourselves in our in our matrix to something less than what we could do and that it would be our choice as we considered a project whether or not uh, we would go 10 years or we would go 22. you know, it would be a discussion relative to a specific project, not uh a general condition for all projects. Um I I think to be fair to to this project that um having spent that the time negotiating the agreement with uh the thought that a 22-year C was going to be possible um based on um uh you know discussions and direction and interactions with staff that um if we're if we're going to look at something other than that that we would want to table this and provide them an opportunity to look at their finances and and maybe they need to uh present a different package of incentives for approval. I don't I don't um I don't think it would be fair to try and um limit them to a 10-year on um you know a short discussion through the meeting um tonight that they there would be more time needed to uh adequately vet that on their side and um consider it. So

well and I would tend to agree with you. I think you know if we should change the policy I think the whole body needs to discuss that and the ramifications because that's also going to be an effect on our citizens. A lot of people will go to that retail and pay a 1.5% higher sales tax there. So I think that needs to be discussed with the whole body. I think whether you table this one particular part of the whole package or approve a tenure and then have the discussion, you know, which would which would make more sense, hold this part out for a month or whatever so we can talk about the other part and then act on it or go ahead and get 10 years. At least there's something that's known to the developer at that point. um then we can change it and then they can come back and say, "Well, let's amend it to go up to the 22 years it's been approved." But but I would agree with you in terms of either table it or my thing my my opinion is going to be to to only be agreeable to a tenure that fits in our plan tonight.

Right. I have a question. Sure. kind of new to this, but so that was indicated that Panasonic had the C that goes up to 20 years. Was the 10ear limit at that time? So, was there a 10-year limit and Panasonic got the the 20, if I'm asking that correctly? Yeah, matrix.

Yeah, that's I mean that's true. At the time, um, we did that there was this 10-year limit in in the matrix there. It's important to uh understand though, the reason we did the CI for Panasonic is solely so that Panasonic can pay the fire district $800,000 a year uh for the fire service while the other incentives are in place. And so that district had to go out 20 years so that they could pay for 20 years until the time that the the tip incentive rolled off. So kind of apples and oranges. And that's an that's a property tax. That's not a sales tax. So you can do C with different kinds of correct

tax me don't have it. It was more consistent with the tiff. Yeah. Yeah.

Yeah. So in the matrix any place there was reference to community improvement district it referenced sales tax. So, it was sort of and I think it's pretty obvious, but I think it's also worth pointing out that, you know, this sale added sales tax only applies on the property that Travis is developing. So, to be honest, I mean, as far as I mean, we went back and forth on many things on this development, but as far as the sales tax, um, you know, it's something his customers can decide to pay or not pay. you know, it's not. And so, you know, I guess in the grand scheme of things, didn't view it as I mean, if if it's too much, that's on on Travis and his development that, you know, those those retailers probably aren't going to do well if people decide, you know, that's just too much sales tax. It's not other than like the tax abatement or even the RHID, this is simply something that

uh Travis's customers will pay or not pay. tax foregone by the citizens of the city. It's a tax paid by those that choose to shop in that district.

So people getting off K10 between Lawrence and Kansas City are paying it. The residents would be paying it. It's on eBay that's using it, not just our residents. And I'm actually fine with the 22 years. That's a statutory limit of Kansas. The matrix is there. It is our guide. But again, the incentive policy multiple times and the actual policy and the ordinances of our policy give us that discretion to be able to modify it if we need to and if we need to take up and actually have a discussion of do we modify our matrix in the future based upon this discussion of it the mayor myself and others going well we didn't realize the statary limit was and we don't necessarily want to limit ourselves to that to modify the matrix because we need to go back and look at the matrix anyway because we don't have our HID in there So that would be this would be one thing that would be into that discussion at that point. But I'm fine moving forward with this as it's been negotiated through the city and with Travis and it's not a tax totally on our residents. Um that I'm fine actually moving forward. I would feel more comfortable with 10, not 22

and tonight let the thing go ahead and go and get started. That's the way I Well, mayor, maybe I'll go down your path then and make a motion to table ordinance 2664 until we've had a chance to readress the incentive matrix.

Does anyone wish to second? Uh, second. All right, we have a motion and a second to table ordinance 2664 until we have time to address the incentive matrix. Any discussion of the motion? Roll call, please. Lane, no. Hanichel, yes. Daniels, okay. Can we have clarification? Yeah. Danny, were you saying no to table or yes to table? Yes to pay. Okay. Okay. So, I will change that to yes. Thanks for that. I was good catch, Rob. Thank you. There was Yeah. Okay. So,

thanks for the clarification on that, Rob. Okay. So, I can we can we restart that just so Okay. All right. Lane, yes. Honey, yes. Daniels, no. Patterson, no. McMan? Yes. Motion carries. All right. Our next item is the public hearing and the resolution on declaring the city's intent to issue industrial revenue bonds and grant a property tax abatement for the limestone project. Consider resolution 2074.

Yes, council. This resolution um would give the city's intent to grant uh a tax abatement and also approve a pilot agreement. The pilot agreement, as you recall, that's what sets the level of abatement. The proposed level is 75% for a 10-year period.

Okay. Uh with that, I will now officially open the public hearing. Anyone wishing to offer comment, please come to the microphone. State your name and address. Zach Bradley, 8341 Laramie Street. Uh, I just wanted to say that for this particular hotel project, I uh I think it's a good idea because right now we have one option right in the city for lodging. Um, there's nothing wrong with the hotel we have, but it's not a middle or higher tier hotel. Um, and I think having an option that gives us a little maybe a higher price point, but a higher quality hotel is good for our city to attract people. And so, uh, I I don't think it would hurt us to have another hotel option here. And so, I just wanted to voice my opinion on that and say thank you for considering that. Hope you'll approve that portion.

All right. Thank you. Thank you, Brett. Or Zach. Anyone else? All right, I'm going to close the public hearing. Uh, resolution 2074. Any comments or questions from council regarding this item? I I do have one question. This would be more for the developer. Being that this was kind of a package of needing all pieces together, would they be preferring for us to table all of this to come back or to proceed piece by piece? Good question, Travis. Uh, any thoughts on that? Um,

I guess my thought would be to go ahead and approve it. We can't proceed without the CD functioning. So, we'll have to look at how we deal with that and how we deal with delays because we have the RHID approved, but we do not have the C approved. And I think we need to move rather quickly um to figure something out. But I I think, you know, they don't go in place until we get going. So, I think, you know, I am concerned of the messages that get is getting sent to the general public right now that we're not interested in retail and dodto. Um, I don't think that's true, but you know, as we table this stuff, it can it that message can get sent. So, by approving the rest of it, I think it sends a good message that, hey, we're we're moving forward. We're got to figure a couple more little pieces out and we'll get this figured out pretty quickly. So, I I I would encourage you to go ahead and approve them.

Thank you for that. I'll make a motion to approve resolution 2074 as present. I second. Second. All right, we have a motion and a second. Any discussion? Roll call, please. Mcmaran, yes. Patterson, yes. Daniels, yes. Honey, Michael, yes. Wayne, yes. Motion carries.

All right. Our next item is consider resolution 2075 declaring the city's intent to issue industrial revenue bonds and grant a property tax abatement for the multifamily project. Again, the first item is the public hearing. I will now officially open the public hearing. If you wish to offer comment, please come to the mic and state your name and address. I'm not seeing any tickers. I'm going to close the public hearing. And now we will take up resolution 2075. Any discussion from council on this item? Similarly, I will make a motion to approve resolution 2075 as presented by

second. All right, we have a motion and a second. Any discussion of the motion? Roll call, please. Daniels, yes. Carmichael, yes. Lane, yes. Patterson, yes. Macaran, yes. Motion carries.

All right. So we will have on our next agenda a discussion of the uh incentive matrix at least relative to maybe we can cover RHID and uh C uh limit uh easy enough to to adjust the matrix. Sure. Um and you know we we've kind of first one of these policy we've kind of implemented the initial format of a policy we have now in 2019 seems like about every year we've updated it. We usually look at the map um which we probably should do but for expediency we'll just stick with the matrix for this uh for the next next meeting

I think to be you know to be fair in 2019 when we were looking at this matrix different we didn't it was a much different landscape we didn't have a whole lot going on so do have one procedural question uh being that we've had the public hearing on it if we come back after either a different agreement with him on the I as far as percentages andor we've updated the matrix to comply with it. Do we need another public hearing or can it simply come back? Yeah.

Yeah. I'd let Kevin address that. But I while Kevin's coming up, I wondered um I mean Travis, consistent with what council member Hanichel, I wonder if would you consider, you know, some type of resolution by the council that they would favorably consider a renewal, you know, after you get 10 years tonight with the intent of the council. that you know in 10 year or somewhere along the way that you know an additional term on that would be favorably considered something. I mean I feel like that might be a way to you know be able to get this done but at the same time respect the policy issue that council member Hanamaka raised.

Can I ask questions?

Sure. Um it would there be some sort of like automatic trigger provision like say we get a certain you know right now the C at 10,000 square ft um that we we don't receive any reimbursements until we reach 10,000 ft of retail. Um, what if there was a another a trigger provision when we hit another threshold that it went from 10 to 22? Cuz I think that would accomplish I I believe and that I I'll look at Mr. Hanichle here and say, you know, I I think what he's what he's concerned about is we put a C down and we you know, we don't get any action like we don't get stuff moving. And I'm not particularly worried about that because we've had a great deal of interest in this site. So, but but how those buildings take place, what their sizes are, etc. There are, you know, there's still a lot of questions to be answered there. Um, so an automatic triggering provision might be something that I think we would be interested in because a we're confident in the site and and and b like if we're not getting it done, we get it. Like we'll sign up for that. I think and I'll sorry Kevin I interrupt but I think to do what you're suggesting we would need to do it for 22 years um what I think Mr. Honico is suggesting do it for 10 years and then outside of that or some maybe in the development agreement we indicate that you know at some point city council will favorably consider you know another CD for the remaining 12 years something along those lines. I mean

because even if in the next six weeks we you know a couple of council meetings from now we appro we adopt an update. I mean then it could be modified at that point in time too. Wouldn't you have to wait but at least you'd walk at least could walk out of the meeting feeling like we've got you've got 10 years. Now my question you said you ask can you ask questions? Answer is absolutely yes. I'll ask a question too. Would a would a provision that says something about would be favorably viewed? Is that binding a future council? No. Okay. It wouldn't be because that would be right. It would. Yes. It's just like the tax abate, you know, as we do for example with intervet, you know, we still do a public hearing. I think

as you mentioned, you know, we could do it in a few weeks. We have to do another public hearing which I think the the what's the it's quite a dis on the public hearing to get the notice and do we have to that's the first question. That was Rob the genesis of the question. If it was an amendment after we I mean now so you've gone through the procedure of notice public and and public hearing for the um consideration of a C sales tax 1.5% for 22 years uh to take that up again. You wouldn't need to repeat that. So you've opened and closed the public hearing and you could consider the ordinance at a future council meeting.

So we could do 10 years tonight. If we update our policy in two weeks, four weeks, six weeks, eight weeks from now, we could take it up and amend it to be the 22 years. Well, I want to answer precisely. You could do 22 years tonight. Your your policy doesn't bind you. It's it's obviously a guidepost, but not legally binding. Um, yeah, I think you could approve a C for a lesser term tonight. Um, and then later consider extending that uh procedurally. Um, again, I I think the more practical question is about whether that works. Now that we've tabled it, when we take it back up, do we have to open up another public hearing? Is that your question?

Whether we take it up again after tableabling it or whether we did 10 tonight, came back 22 under either either scenario would have we did 10 tonight. I would believe we would have we would be starting over with a new ordinance. So, we would have a hearing and the whole process to repeat. I mean we would have completed the one process right I mean and it would be a new ordinance that would be extending the next 10 years would be

so to play out the hypothetical I I I think if you would approve 10 years tonight I think it would be likely you could adopt an amending ordinance without repeating the procedure uh because you've already taken up the procedure I'd want to take a harder look at that I'm not sure I've encountered that question before there's a chance you might have to repeat from the beginning. And the question comes, is it just easier to take up the matrix and then take it is probably the matrix and then see where we are and then we can solve it all at the next meeting or do we get or two, right?

All right. So, I just think we would need it. Kevin, just a clarification. So, what you're saying is it'd be fine to table the ordinance, which approves the development agreement and essentially the the 22-year CI table that let's say in two weeks take that ordinance back up and do the exact same thing. 22 years. Yes. Okay. Yeah. Okay. So, all we're really asking is do we need to open a public hearing again if we come off of having it tabled? That's all we're asking at this point.

Answer is no. We had couple We had a couple scenario. That's one we're down to now. I'd like to speak.

Sure. One of the things the C ordinance does is it um deals with some of the easement provisions that we that we need to get moving on easement acquisition for that sanitary sewer. So that's the next logical step in our project, right? We've got to get the easements acquired. And you know, we've obviously had a lot of conversations with the neighbors and they're going, "Well, what you know, can I see the ement? Can we do it's like just we'll get there. we got to get through specifically this process and I told them tonight was the night you know weeks ago um if you if we have an understanding that like we don't want to start putting sewer in the ground until we have a better grasp on the financial viability of a project which we're looking at you know when we've done our math we're basing it on a 22year CI and if that's a possibility going forward I think we we move forward in good faith and and if we pass the tenure tonight and don't have to reopen a public hearing, that would be preferable to us only because we can get started on ease of acquisition. Um, I don't know if that changes things, but we would be back trying to amend that to the to the 22 or another sort of provision to try and get that thing to square back up. Okay. Sorry,

we're kind of going around and around on this. I would be agreeable to a tenure, but mayor, how do you want to handle the process now? So then I guess the question I guess um if we do have to do a hearing, we approve the tenure tonight and we have to do another hearing process to that. What's what's the gap required between that? Is there an issue timing wise? Does it put us out? I think it's it doesn't it's not but at that point you've got something to you've got something to start with for 10 years right I think we don't have so it could be a year and it's not an issue right

so that's you know that would seem to me to be the best way to get get the thing off the ground is you know you've got 10 years of runway out in front of you and all we need is you know two three months even Okay, we would probably not want to wait a year. We we My thought process is easement acquisition is is is going to be critical path, right?

It's critical path and we're going to deal with that probably for the next three months. Um easement acquisition. Um so 3 months, yes, a year. Uh we'd probably like to put it, you know, get it handled sooner rather than later. So thank you for that. Um so I guess with that in mind, uh any thought on a amend a motion on an amended?

Is it as simple as the only amendment is the duration to from 22 to 10 years or is there other language tied around that or is there other calculations or tabulations or is it just simply We'd need to amend ordinance uh it's 2664, right? Can you out of 165 pages? Can you Okay, we're all trying to Yeah,

I I'd say we just approve ordinance 2664 with the understanding that the CD is to be capped at 10 years and to authorize our legal staff to make the necessary modifications to the agreement to make that so. That'll work. Okay. Well, since I started this, I'll make a motion to approve um ordinance 2664 approving the CI modifying the duration from 22 years to 10 years and incorporating that through the ordinance as appropriate. Have a second. Second. All right, we have a motion and a second. Any discussion of the motion?

Roll call, please. Lane, yes. Hannah Michael, yes. Patterson, yes. Mcmiran, yes. Daniels, yes. Motion carries. We made it. That was all right. Item E. I've been trying to get to item E for about a half hour. Thank you, uh, Travis, Kevin, Jeff for your participation tonight. Item E, consider agreement with Mcinani Construction for the 2025 mill and overlay program.

Mayor Council, thank you. Um, so we took bids on August 21st. We received four bids. U high of a little over 589,000 and then a low bid of 52163. Um, the bids were really good. In estimate was a little over 900. Um, my estimate was a little less than that. Um, so we got some really good bids. looking at bid prices last year, asphalt prices came down substantially, uh, which helped this. Um, this year we have a million dollars budget in the overlay program. We're using in the record, we're using about 129,000, uh, to partner with EverG to overlay about 3,000 ft of 95th Street between Lexington and uh, Sunflower. City crews have already overlaid the other half of that. And um so there's about 250 300,000 uh available funding to uh add some additional streets. We're working with that uh to get identify those streets and then get with Mackini to uh get prices for those. Once we do that, we would come back in with the

taking random suggestions. 89th Street would that is one of them. We're looking at to be completely done with that area out there. So that is one of the streets. Um, so yeah, so the recommendation tonight is to approve the contract with the Machinian amount of 5216 $683,000. Any questions for Joe on the mill and overlay or the overlay, the street maintenance cont, let's just call it that overlay program. No mill. I'll make a motion we approve the bid and contract with Mcin Construction in the amount of $521,683 and authorize the city administrator. And I will second that.

All right, we have a motion and a second. Any discussion of the motion? Roll call, please. Macaran, yes. Patterson, yes. Daniels, yes. Michael, yes. Lane, yes. Motion carries. All right. Item F, consider agreement with Kansas Heavy Construction for the Waverly Road Trail project.

Thank you again. So, yeah, we took bids. We've received nine bids for this project. So, this is Waverly from 95th uh south to the city limits um running along the uh the west side of Waverly. Uh we got really good bids. Uh we had a high bid of 467,000 and change and a low bid of $269,40.90 from Kansas Heavy uh Construction. They're a good contractor. Um I think we had looked at amending the budget to about $400,000. That was kind of what the engineers estimate was going to be. Um so we have currently $250,000 in there. So easy enough to be able to to cover that. Um we'll work on we've got contract do a so we'll issue notice to proceed for this project tomorrow. Uh so they can get started and uh complete before uh year end. So, it' be the recommendation to approve the low bid with Kansas Heavy Construction in the amount of $269,440.90. Um, and actually the the the contract documents the mayor will sign.

I got it. Questions from council. Motion. I will make a motion to approve the bid and contract with Kansas Heavy Construction in the amount of $269,440.90 for the construction of a Waverly trail and to authorize the city administrator to execute the contract. Second. All right, we have a motion and a second. Any discussion of the motion? Roll call, please. Daniels, yes. Hon, yes. Lane, yes. Macaran, yes. Patterson, yes. Motion carries. All right. Keep bidding stuff. Man, bidding environment seems to be good right now, huh?

Item G, consider water rights agreement with Sunflower Redevelopment LLC.

Yes, council. We've uh discussed uh water rights um easements, wells, um for quite some time. Um the agreement that you have before you formalizes uh those assets being transferred to the city. Um the agreement does provide that the city will reserve capacity for uh sunflower redevelopment and their projects at Astro 3.5 MGD. Uh so that will as they bring projects in that that amount will be depleted by uh water that's needed for those projects. The agreement does exclude the Panasonic plant. Um not the option property but the Panasonic facility itself since we already planned for that. Um Bob Johnson with Pulsonelli is here um that staff recommends approval of the agreement.

Okay. Questions from staff or council? Did that include the water lines and stuff up to the plant or are those excluded still?

I'll let Mike speak to they are they are reserving an easement exclusive easement over the 54 inch line. So, there's a there's a 54 inch diameter uh raw water line that took water from the surface of the Kansas River to the surface water plant. Sunflowers reserving ownership of that and an easement for that. There's also an 18-in sanitary sewer line that runs from the Astri Enterprise Park down to the Can River. They're also reserving that for themselves as well. Uh we're getting the two 16inch raw water mains that we've been operating since 2000 or before since 98 probably and all 12 well locations along with the rest of water right 38. So in terms of value of assets it's really at waterite that that that well and the and this the raw water manes um are significant value of asset. Um Patrick did a good job in the memo of articulating succinctly this 20 year sag 25 year saga of the water rights situation and our our uh you know the relationship with SRL there and ultimately uh coming to fruition the request that was granted by uh by the U United States government for transfer of the water treatment plant itself. So, we've been working on that since 1998, and this really kind of puts a bow on the last pieces of that. Uh, it incorporates the MA pre-development agreement provisions of that. So, really kind of puts a uh puts finality to all that all that effort over the years. So, I know that wasn't really your question, Rob, but yeah. So the the assets essentially the two 16inch raw water manes the easement that that is the utility corridor the sunflower road corridor um all 12 wells the lines that go to the 12 wells the water rights

associated with the 12 wells um and uh the easements themselves down the water. In addition, um we're we're getting a transfer of ownership of the water tower site property and uh additional property that we need around the water treatment facility to facilitate essentially the the improvements that we're near and nearing completion now. So water treatment plant site's getting bigger and we're we're getting um the water tower site as well. So, and Mike, is it on the 54 in um raw water line and the sewer, if I'm remembering correct, that was always considered. Yeah. Throughout all we've always said

never had any claim those going to let them keep those. Yeah, we've never That goes back to the initial claim with the Department of the Interior um for the water pump. We never claimed that or the surface water treatment plant. So, it's not something they weren't pertinent to the operation of the water plant that we were taking ownership of. Um, well, I just like to congratulate everybody on their endurance, persistence. Uh, two good words. I know. Was anybody who was here? Who was here in 1998? Patrick, were you No, I was here 2000. Gerald Cooper was Who made the 1998 application? That person is not Steve Prudin. Yeah. Mayor

then. Yeah. Bob, were you working on it in 1998? It sure was. He was in grade school. No, it's a great milestone. Nice. It's uh happy that we are finally to this point and u if there are any questions uh entertain a motion to approve the agreement. I'll make a motion that we approve the agreement with the for the water rights agreement with SRL. Second. All right, we have a motion and a second. Any discussion? Roll call, please. Hon, yes. Lane, yes. Daniels, yes. Patterson, yes. Macaran,

yes. Motion carries. All right, Bob, we didn't intentionally put that at the very promise. Thank you, Mike. It's all you budget presentation item H.

Uh yes, council, it is all me. So um as as we said with previous and I think probably since the middle of the summer, our our budget calendar has targeted uh September as having a final form of budget to present and walk through, work through and walk through. And then um the actual public hearing date is set for our next council meeting which would be the 19th. Um, and that'll give us time to uh notify both counties uh what our what our budget will be for 2026 in time for the deadline of uh October 1st. So, um you know, we've we've had background discussions on a lot of it. In the in the packet, what I've provided is pretty much the full uh version of our of our budget booklet, several hundred pages talking about policy directives, showing the five-year projections, talking about individual expenditures, um showing each line item for each uh for each uh departmental budget. Um and of course, we generally define separate the property tax funded funds. So that's general debt service and law. Those kind of are set separate from our revenue uh supported funds which are the water, sewer and the refues. And then there we also separate everything else which involves all the the smaller kind of singleuse funds um that that we have for um you know for for various reasons. Um the biggest among those being the capital improvement fund. Uh we've really had those discussions about all of these and so I wasn't going to do a page turner on the don't worry. Um, I did present uh pro produce a little PowerPoint presentation here that hits the highlights just reminders maybe um and kind of for the purposes of the of of the public if they're watching online.

Brandon, start the timer when Mike starts.

Starting a fourm minute timer. Yes, mayor. I'll keep it quick. I do I do think it's worth hitting hitting some highlights because you know in a lot of ways this budget um you know our budget process the last two or three years has been pretty tricky with what's going on and the uh economic development with Panasonic and now the data center project and other things that are that are happening and um but this much like the past two you know we're faced with um water and sewer treatment plants that are almost about to come online you know the the water plant has and the sewer plant will in 1.6. So there's some unknowns about that. Uh we're going to be seeing increased uh water and sewer service demands mostly from Panasonic, but that's going to kind of change the nature of those two budgets. Um then also we're dealing with um property tax franchise fee revenues um and other kind of revenue streams that could look uh uh pretty pretty rosy if we allow them. But we're we're still those are things that are yet to come. Um and so we're we're still remaining uh pretty uh conservative on on a lot of those projects. So we're kind of left in this sort of middle zone where we know there's a lot of stuff to prepare for and when services kind of uh the need for services are going to increase and resources are going to increase. So we want to be set up well within 2026 to address all those needs and uh hit the ground running with some of these bigger projects as uh the revenue streams come forward. So, uh, in terms of budget highlights, so the you'll remember for the 25 budget, we were able to reduce the mil city mill levy by about a third. Uh, that was a big jump. Can't do that again this year. Uh, but we are reducing it by 083 mills, which is about six a little over 6%. Um, and you'll remember with the revenue neutral rate calculations, it includes the increase assessed valuation from from Panasonic. uh it includes that revenue that we're

going to that we're going to take from them, although it gets diverted to the tiff fund and can't be used for general purposes. So, our RNR rate is really artificially low this year,

somewhere around 6 and a half mills. Uh we're not going to be able to we're not going to be able to do that. Uh but what we did do is we took a look at the averaged increase in assessed valuation for the average residential property in Dotto and we saw that that went up about six a little over 6%. So we took the middle levy down by that same percentage to come up with our own RNR, the Dotto specific RNR rate. Essentially the concept being that the average home uh homeowner citizen in Dotto won't see an increase in actual dollars uh from their tax bill from the city next year. So uh the mill levy therefore goes from a total of 13.77 last year or this year uh down to 12.94. So that's the story on the mill mil mill rate. Uh franchise fee revenue projections have been uh reflect uh adjusted downward slightly to pro uh reflect a slightly more conservative approach. um mostly based on the um the schedule of of completion of the Panasonic facility and the um commissioning of production lines at that facility. Uh it's delayed a little bit from what we'd expected uh this time last year. So we've taken the franchise revenues and taken them down a little bit. Uh sales tax collections uh continue to be strong. Uh we continue to project those conservatively. I'll have a little bit more on that in the next slide or two. Um, we'll be able to again in 26 uh transfer a significant um general fund from uh revenue from the general fund to the capital improvement fund. There's a million dollar transfer in the budget for next year. Uh that's that's on the heels of a $2 million transfer this year. So, we'll be able to program improvements with that. Maintaining an annual road maintenance

program of a million dollars. Joe just talked about million dollars. we got this year. Uh same for next year. This budget includes additional support for the chamber and EDC, an additional $100,000 for 2026. There are seven new uh staff positions in this budget. Um in the general fund, there's city clerk, custodian, plans examiner, events coordinator. There's two water plant operators and a sewer plant operator. Uh and that again is in anticipation of the higher service demand. Uh, as far as the CIP goes, uh, we know that, um, I I at least had a, um, a goal of getting through the complete CIP overhaul and time to incorporate it completely into this budget. That's not happening. We still have some work to do there, uh, with with determining um, you know, establishing projects. We've got community surveys going out. There's still work to do there. So, uh, but we do have a placeholder in the CIP budget that I'll show you here in just a minute. But um in total for for this 26 budget um there's 27.5 million in capital improvements 17 million of that are what would be wrapping up the Panasonic funded project.

We still expect to have some money we have to pay to finish up the water plant, finish up the sewer plant,

finish up the water tower, those projects. So about 17 million there. Um this year with Brandon's help, we incorporated this idea of specifically identifying budget enhancements. Um we're calling them these are new programs or new positions uh that we didn't have in the previous year. The enhancement includes the new uh FTE the seven new FTE positions and several other things. So there's about $417,000 in those budget enhancement that will impact the general fund. And the last bullet point we talked about the water and sewer budget inclusive of increased demands and commission the new treatment plants. Uh the assessed valuation picture is a little strange. Um you know we see from 2017 on up through 2425 uh steady increase in assessed valuations. Um you know this hits everybody's uh notice on their individual property. But then you see in 2026 this wacky bar that's six way up there. Well, that's all Panasonic. Um, about 20 204 million of that yellow bar is the of total assessed valuation is Panasonic. So, what we've done in our in our budgeting, we know we're going to collect that revenue, but we know it just gets dumped over into the into the TIFF fund and will eventually be repaid eventually it will be repaid uh to Panasonic uh to reimburse them for capital expenditures. So, it's part of that tiff. So the effective mill the effective assessed valuation uh is about 148 million. So that's down from 174 uh that we looked at last year. But last year was a little of an anomaly because it also included a portion of the Panasonic. And remember we we took those and we budgeted them as expenses in the general fund. So we had these weird transfers going on. This year I decided not to do that. Rather we're going to

collect it. it'll go into a separate fund. It won't hit the general fund. So, that's why the yellow bar is so high, but the red bar is uh low there. Uh we talked a little bit about sales tax uh and other other kind of uh well, this is just sales tax. Uh you can see on the chart here kind of the steady trend line of steady increases. You know, that's four to five three to three to three to six% throughout the years. Steady trend line increase there. Um, you see, you know, this big great big bump here in 2024 when Panasonic, you know, was building things. Uh, the 25 projections. Uh, we're still currently projecting a little bit less, but we we may wind up the end of the year. This is still a very conservative projection on 25, but then our budget is back down here essentially where the trend line would be. And that I I believe is a is a sufficiently conservative approach to the sales tax. This is a pretty big part of our budget. Um, you know, three $3.2 million of a of a general fund budget. So, it's pretty important not to get this wrong in the wrong kind of way. Um, it's okay if we get it wrong low, but if we get it wrong high, we're going to be in trouble. So, that's why we've always been pretty pretty conservative with this. Um, and we we've talked about that before. Uh, this chart's kind of messy. Um but this plots uh retail sales activity in Dodto from 22 through through so far in 25. Uh and you see these and it it also shows workers at Panasonic which is kind of unrelated

related. This is the reason the sales tax is so high. But uh these are retail sales activity. But you can see down here in 23 24 where on a monthly basis the retail sales activity was bouncing you know was under $10 million per year. Uh and then uh the the 25 and so far 26 numbers it's up here closer to 20. It's doubling you know it basically doubled. Uh and so that's the reason we get this peak here you know and that's just in the city uh actual sales tax collection. So just thought I'd just throw that in there. Uh there's a much better um depiction of this increase on one of those boards back there on the wall. Whitney did it much more nicely than I could. Um the other discussion we had on the revenue side this year was franchise fees and how we we just wanted to tweak those down just a little bit just because of the ramp up at at Panasonic and we we know they're not quite using all the power they thought they were going to. Uh so this this trend line is is a very substantial part of the budget in the outy years. You know look at 2031 it's up over three $3 million. Uh we still fully expect that to occur. Uh but for the first few years we've kind of adjusted this number downward to remain conservative. This this chart here is in um it's in the budget document. We just kind of show how uh here's what the franchise fees were before the the facility started construction were we're expecting. Uh you know 25 it's 2.2 million last year in our projections in in 25 um we showed about 1.3 million. Looks like we're probably only going to collect about 500,000 of that. Uh so anyway we we we've diminished those a bit. Um, this is a look at the historic mill levy. Uh, I won't, you know, belabor this, but you can see that, you know, between 2018 and and and now, we've been

able to reduce that that mill levy. The biggest the biggest dip was last year by by a third there, but still on this downward trend that we hope uh can continue. So, general fund revenue picture looks like this. And of course, uh everything up to 24 is actual revenues that we collected. 25 is a projection of what we think we're going to collect this year. Uh think we're still being sufficiently um sufficiently conservative with our projections there. And then 26 this is what we're this is what's in the budget. Um so again another conservative approach and you know we typically and if we were in a normal situation we might try to match these trend lines a little better but I just you know with with where we're at now I think it's very important uh I know this is a little busy here but this is just kind of a restatement of the budget enhancements um that we talked about. So the total and this is all these are all general fund uh budget enhancements. Um, uh, we talked there's new new positions, increase money for sidewalks, Dotto days, increase funding for Dotto Days, uh, more street ceiling, uh, funding, city clerk position, grant writing and lobbyist position, additional support for the chamber, another position in the building inspection department, a position in oop, sorry, position in the uh, communications department, uh, street p uh, street signs, pavement, and asset management, some other smaller stuff. Total total of these budget enhancements just over half a million dollars. But we do have offsetting uh reductions in some expenses in the general fund. So impacted general funds just a little over 400 well it's about $417,000. So wrapping all that with the uh projections, the five-year projections

and um the budget for 26, this is what our five-year projection trend line looks like. Uh so this yellow line is is what we where we expect to the end end of the year in terms of general fund balance just over 8.3 million. If the budget works exactly and every number is perfect for next year, that's going to decrease to six million, just a little over six million. uh you know see we only have 9 million in revenues and 12 million in expenditures. Uh there's some other transfers in there as well. So uh the goal always is uh in mind that this this fund balance should be about 30% of our operating expenses. And so what I've done in this orange line is I've kind of plotted that. So, what you you can kind of take uh the the blue line, which is the year- end fund balance, and subtract that orange mount and see that there's still about $800,000 in there uh that we could consider allocating to specific resources. And this is the conversation we've had within the CIP about, you know, how much addition, you know, we transferred 200 two million last year, another million this year. we could probably based on these projections transfer another 800,000 to do even more CIP or uh additional um additional projects or things as we as we go through the year. So you've seen this before as well uh quickly through the law enforcement fund. Um it's just kind of a revenue in expense out. Uh there's not a lot of reason to keep 30% in the law enforcement fund because we don't have really unexpected expenditures there. Uh but revenues is just under a million, expenditures just over a million. And this is what that trend line looks like uh going out through 2031. Debt service is the same way. Um level mill levy for the debt service not really reason to keep a reserve in there. So our revenues for 2026

uh two million and expenditures about uh 2.5 million. uh on the water fund. Uh we did talk about you know the commissioning of the new plant uh and the and the added positions there. Uh those positions are contingent on uh increased revenues from sales largely to Panasonic. So we work some of those projections uh into this analysis. the out years of this, they get a little strange because, you know, we're we're planning on going from selling about a million gallons of water a day to selling about uh two and a half billion gallons of water a day once Panasonic is fully up and operational. And so, you know, that's more than double the revenue, more than double the chemical expenses and all this. Plus, we're operating a new water plant, which we hope is to be more efficient, right? Um in terms of power use and maybe chemical use. So it's a it's a little um a little different. So this this red trend line here is the 30% uh fund balance. So that's what that red line is. You can see that we we stay above it in 2526 and and there's reason to believe we might uh increase it there in in the out years. No rate increase projected for the water fund for 2026. Um the sewer fund much the same. you know, we're going to double the sewer treatment um revenues, double the amount of water we have to treat. Uh but you see the fund balance increasing steadily, but the percentage of fund balance not necessarily increasing and that's because of that uh increased uh usage there in revenues. There is a 2 oops 2.5% rate increase budgeted uh for 2026. um really hoping to be able to get both the water fund and the sewer fund uh through 26 without any you know any adjustment. Our sewer rate I mean we we we should probably have a uh I could I

could have more inepth discussion about this. Our sewer rates are very low. Water rates are commensurate with others around maybe even on the high side.

Sewer rates are very low compared to surrounding of our size. Um they're commen they're they're they're about the same as Johnson County uh wastewater but for a city of our size they're pretty low. Um at any rate the uh 2 and a half% budget or uh rate increase is budgeted. We'll uh monitor revenues and expenses throughout the year and determine sometime around the first of the year if we need to enact this or not. Um yeah that was it. That was it for the summary. So this is I know you can't read this, but this was the budget hearing notice for uh for the next uh meeting on the 18th. So we'll have a revenue neutral rate exceeding a revenue neutral rate hearing and the budget hearing kind of a dual dual purpose there and we'll be submitting that budget to uh both counties by October 1st. And mayor, that was what I had for you this evening.

Any questions for Mike on the budget presentation? Thank you, Mike. Thank you for your patience. Item five is executive session. We don't have one. So, Mike, anything for us under advisory reports? Uh, no, sir. Nothing tonight. Thank Patrick. Nothing for me. Thanks, Joe.

Brandon, the only thing I have is uh at your seat, you you have those no soliciting signs. Saw um a large increase. I don't know. was because Edgar was taking over the program this year, we got a lot more complaints about soliciting this year. Um, and so one of the suggestions we got from the public was to offer up these stickers. Um, so we're going to roll those out next week. Um, do not have to have one of those stickers. You can get your own if you want. Any no soliciting um sign is uh is qual would qualify under our city ordinance. We're going to roll those out to our to the residents um over the next couple weeks. Just kind of listening with that. That's about it. All right. Thank you. Council comments. Kevin, you want to start tonight?

Got nothing. Rhonda, I will be um gone on October 2nd. Okay. And not be here. Rob, um on that note, I will be remote September 18th and we'll have to cut off probably about 8:30, 8:45 if we have a long meeting. Hopefully, we'll get

I was going to say hopefully, but I'll be over at a church in maybe with my son's fourth fourth son's eagle order review, which is after he turned 18 because he barely got the paperwork done less than 72 hours before his 18th birthday. Um, the other comment I have, uh, we've had a lot of questions and things, all of us, about the data center and things like that. And, um, I made all the motions to, uh, approve the data center development agreement and stuff because I do believe it's good for our community. But in listening to people and talking with people, there are some things that we haven't done right. And a lot of us ran on transparency. We've talked about transparency and a lot of what happens is our community feels like things been have been dropped on them. And when we look at the data center, how it came to us and what we did and like I said, I back what we did, but how we did it is where I come back and go, okay, two things about it. Number one, it was mentioned by Kevin tonight and we actually required Dave Anderson to do it the night of that meeting. And in our incentive policy, it's typical that we ask the developer to