Finance Committee - Regular Meeting

Thousand twenty six. At this time, I'll take a roll call. Alderman Thorpe? Present. Alderman O'Neill?

Present.

And I'm present as well. Is there a motion to approve the agenda as written? So

moved. Second.

All those in favor please say aye. Aye. Motion carries. Is there a motion to approve the minutes from the last meeting?

So moved. Second.

All those in favor please say aye. Aye. Motion carries. Alright. Let's put fifteen minutes on the clock. This is a little bit of a weird one for us. So if we won't hold you to it perfectly. But that's what we've been asking all of our other directors to do. And then I'll turn it over to you folks.

Question about time. I thought the enterprise fund studies went more than fifteen minutes. Does it? Maybe my calendar, I just hadn't looked at it in a while. I thought we were on till ten.

We have an hour. We've been asking for presentation to be a certain amount of time and then question time for questioning.

But also, I understand this one's a little different than all the other ones. So if that's not what you guys prepared for, I'm fine with that. Let's let the let's let the timer ding just so we have a sense of how long we're going, but I'm not gonna cut you off then. Sound good? How long were you planning on presenting for?

Probably five to seven minutes per fund.

Okay.

Which would be my guess is is how how fast David can go.

Cool. Well, yeah. Go ahead.

Alright. I'll get started. My name is Dave Heider. I'm with Stantec. I'm here today to talk about the enterprise funds. So we're gonna talk about the water and sewer fund, the storm water fund, and then the refuse fund. We'll take a similar approach as we go through each of the funds. And for those of you that have been through this in the past, it's a similar format. In terms of the approach that we use for each of the funds, we're developing a financial plan. We're looking out over a ten year projection period.

And what that allows us to do is forecast the revenue requirements of the system. So that's what it cost to provide water, sewer, storm water, or refuse service. That forecast takes the budget and then looks also back at historical spending. Forecast that budget over the ten year period based upon inflation factors for each line item. We're also including capital investments, those that have been made in the past in the form of debt service that you have to pay off as well as any future capital improvements.

That gives us a sense for the cost in the system. We then do a forecast of the revenues at the current rates and fees to see whether we have sufficient revenues to meet those expenses. Then we can evaluate whether how the the financial plan is working in terms of some key metrics looking are we able to meet those revenue requirements and are we maintaining adequate cash within the system. I'm gonna try to take this off. So that's the overall approach.

So as we look at the water and sewer fund, the starting point that we have is our fiscal year twenty seven water revenue requirements. So this is made up of the various components. We have operating maintenance expenses, the day to day operations of the system. You do have existing debt service, about 3,900,000 that have to be paid in debt service in 2027. You also cash fund some portion of your capital improvement plan, so that's revenues from the from the system.

And we also have a little bit of projected debt. Overall the budget based on the numbers we have increases by about 7% in fiscal year twenty seven. This is just that ten year forecast that I talked about so you can see the line item expenditures for operating expenses 6,890,000 in fiscal year twenty seven and then that grows to about 9,000,000 by 2036. You can see the various capital expenses. So we're keeping 1.47 of annual pay go.

You do have existing debt service that you have to pay off. We're also assuming that you're gonna bond fund some of the capital projects so that grows in terms of annual debt service. But the bottom line is about 5,610,000 in in capital for water. When we total that up, we're 12,500,000 in terms of revenue requirements or total expenses for water and that grows over time. And then to do that revenue efficiency, we can compare, okay, at your current water rates, how much revenue you're generating? You're at about 9.76. So clearly the current revenues are not in line with the expenses of the system. If we don't change rates, our revenues are gonna stay constant. Just what this looks like.

Can I ask you, how is our revenue going down there in future years? Is that inflation adjusted?

We are assuming some modest reduction in use that we've seen in terms of customers being more efficient with their use.

Thank you. Yep.

But this is just graphically the exact same information. You can see how the bars stack over time. Blue bars being your operating expenses, light blue being that cash funded capital. So the total of these would be the revenue requirements and if we keep our water rates constant, that's the red line. Obviously, your expenses are growing at a at a greater clip than your revenues would because we're keeping them constant.

So if that plays forward, you currently have a minimum or you currently have a cash balance within your operating fund. It's about 12,000,000 for water. We've talked about this in the past. If you do have those ongoing reductions or ongoing losses on the system, you would eat into that cash balance. We try to maintain a minimum balance of of six months of your operating expenses in this cash balance.

You would fall below that in '29 and by 2030 basically we run out of cash and that would continue to go negative going forward. We shift gears and look at the sewer fund before we talk about the potential increases. This is the revenue requirements for sewer system about 11,300,000, vast majority being your operating expenses. A big component of that is the the wastewater treatment treatment plan expenses that are contracted with the county. Those are increasing 5% in fiscal year twenty seven.

Overall budget goes up about 5% and you do have some new debt service about $280,000 from the 2025 public improvement bonds. As we play this forward, operating expenses, again, the 9,100,000, we inflate that going forward, be about 12,000,000 by the end of the projection period. You can see your capital expenses. There's a little bit that's cash funded capital, existing and then future debt. In total, again 11.37.

Your current sewer rates generate about 8,830,000 so we're seeing similar results on the sewer side in terms of revenues not keeping up with expenses. And then similarly oh, what happened to this graph? This is the graphical representation. Again, your revenues being the red line not keeping up with your expenses. Not sure why that graph is looking bad.

But ultimately going forward, this is what the result would look like in terms of the operating fund cash balance within the super fund. You also have about 12,000,000. You drop below in in 2029 that minimum. And then we would go negative cash balance by 2030. So what we're recommending in terms of the financial plan is that you continue to do some rate increases.

So water rate increases at 4.75% in 2027. And then we're recommending that you're likely gonna need to continue to increase rates at that 4.75% going forward. This is consistent with what we presented last year. Future increases beyond 2030 are gonna likely need to continue to happen. But one key takeaway is that essentially each year that we go through this process we ultimately do determine that it seems like things are being pushed out a year in terms of when the funds are gonna go go negative.

So this is the result with the increases. So we're showing that if things played out exactly as planned, by 2030 we would drop below that minimum and by 2031 we would run out of cash. And so if all expenses happen as planned, we do the 4.75%, they wouldn't be sufficient. But each year that we look at this, typically the spending doesn't occur at the level that's been anticipated. Capital isn't executed as quickly and therefore it gets pushed out another year.

At some point, if we see a more accelerated drop, we would recommend that you're gonna have to do higher rate increases. But this time, still recommending the 4.75 for both water and for sewer. Again, seeing by 2031 if everything played out as planned that we would have a negative cash balance. So combined, this is it looks like with water and sewer together as a combined enterprise fund. Again, 2031 is when we would go negative.

But again, every single year we tend to push that out one more year and the 4.75 appears to be appropriate. But it's something we want to closely monitor to make sure that you continue to execute at a level that would allow you to continue to do the 4.75. So what this looks like in terms of the actual rates, your rate structure, you have a fixed charge for water and for sewer that scale based upon your meter size. This is just applying that 4.75 across the board to both the fixed charges as well as the usage rates. So the usage rates are shown to the right.

For residential customers, you have what's called an inclining block rate. So the more water you use once you step into the higher tiers, the more that water cost per thousand gallons. So for zero to 7,000 it's currently $5 with this with the 4.75% increase. And then once you're over 7,000 for each thousand gallons it's $10. Non residential properties pay a flat unit rate per thousand gallons of nine forty four.

And then on the sewer side, everybody pays per thousand gallons six eighty eight. And again, these are after the 4.75% increases. What this looks like on a typical customer bill, typical customer using 12,000 gallons per quarter, you bill on a quarterly basis. You can see the current bill for somebody using that amount would be about a $190 per quarter. With that 4.75% increase, the bill would go up to a $199.

So about a $9.10 per quarter increase for your average customer. And then if you continue with those 4.7 five's, you can see where you'll be in future years getting up to about $218 per quarter in 2029. I just want to show you how you compare against some comparable and local utilities currently with the 109. Again, is a comparison at somebody single family using 12,000 gallons per quarter. Where you currently are in comparison, where you'd be in 2027 with the increases, and then where these other jurisdictions currently are.

It's important to note that this is a little bit of an apples to oranges comparison. We don't know yet what most of these jurisdictions are gonna do in 2027. I know the county is contemplating increases so likely theirs will go up as well and most other jurisdictions generally do increase rates on an annual basis. So again, a bit of an apples to oranges comparison, but you're still at the lower end even with the increase.

Pause there for questions.

Sure. Can you go back to slide five? Which one of these categories or maybe better way to put it is what's the breakdown in growth among these categories? If we're seeing 7% growth overall, it's because they're each growing at 7%, is one of them growing at 10% and one's only growing at 2%? Roughly, what's the breakdown in growth?

I think the just off the top of my head, I think the biggest growth is the fact that you do have, you know, as we look at overall budget, you do have additional debt coming on. So that is a component. But then the other component I think is is probably in the salaries component. We are seeing increases in chemicals and energy pretty substantial in recent years. But that might be one we have to get back to you in terms of a little bit more detail.

Yeah, if you could, would be great. Just between FY '26 and FY '27 for each one of those categories, what's the percent growth? And even I appreciate you getting into salaries if you can, that's great, but honestly I was just looking for those four things. Owner O'Neil, do you want

to ask questions? Anybody? Questions?

Yes, thank you very much. Is 31% debt service standard for water and sewer?

It really depends. Depending upon kind of the phase you're in, we see some utilities that are newer, they have less infrastructure that they've had to rehab and therefore they have lower debt. We've seen one time Washington Surbine Sanitary Commission had about 50% of their revenue requirements was debt service. Typically want to be in that 30 to 40% would be more common. But each utility is kind of going through a different life cycle in terms of if you're having to do major rehab or significant reinvestment in the system, you're likely going to have a higher component of of debt.

And this is historically high for Annapolis due to the construction of the new water plant in 2017, 2018.

So, Vogel, maybe this is for you. We're talking expenses, revenue to cover expenses. And you just addressed one of my questions is managing expenses. That's you, right? Right.

And the folks behind me. Right.

Right. Well, was going to say something negative, so it's you. It's me. So, I have a broad question which is probably a softball unless you want to dive into it, is my concern about increased expenses and management of that. And I guess the softball, the real question is from a managing expenses standpoint, are we managing expenses appropriately so that when we explain the rate increases that we're doing the best job we can to keep the rate down.

So I'll start with what is the goal of an asset management program for a utility or infrastructure? And the goal is desired level of service at lowest life cycle cost. It's not lowest cost because if we went lowest cost we might not be worried about inspecting fire hydrants, we might not be exercising valves, and we might slow down our line replacements. So defer those things or don't do them. You have a water main break, your valve doesn't work, so now you start expanding your circle of valves that you try to see if you can isolate that leak so you can repair it.

And now instead of 20 customers having a four hour outage, 800 customers have an eight hour outage. So you have this sort of trade off. And we have over the past three or four budget cycles added one or two positions or partial positions in order to do a better over job overall job at asset management. And on the services side the workers in the field we've also added some positions we've we've in sourced some functions that we used to contract valve exercising for instance. The goal there was was actually to be able to get better service at about the same price.

So here the I'm not too worried about expenses the things that we can control in terms of being efficient or effective. Because because those things are in the services side, the contract side, the cost of producing water particularly losing water. And we've seen I think we just met with MDE and I believe we've reduced our total water losses, which means water produced minus water build, the delta is losses. We've reduced that by something like 20% or 30% over the past five years. Now that was a bit of a peak because there was a series of breaks or a few very large breaks that we were able to go after identify.

Find those breaks and then minimize those losses but we have a really good proactive program for looking for leaks. That's reducing some of our energy costs or chemical costs and so on and so forth. So to speak to the earlier question that Alderman Huntley asked which is you know what's the growth here? I bet a good amount of money that the growth is going to be in debt service. We're just simply executing capital projects the way we plan to when we we first came out with our asset management plan in 2018.

Okay. Thank you.

If anybody Diane's not here, so I'm on my own.

Thank you. And that's great information about cutting water losses. Appreciate that. My final question for this

Hold on. Before you go into a different question, I think Mr. Johnson had something to jump in Yes.

Darren Johnson, senior budget analyst. I was just gonna say just with a quick glance, we're looking at capital projects was like a 700 k increase. Contracts was like 200 k and then debt service was like 200 k as well. So that's some of it just looking at a quick glance, not even going into deeper detail. Yeah.

And when you say capital projects, that would translate here to cash funded capital?

Yes. Okay. Yes. Thank you.

Paygo. Alderman Thorpe.

So last year I was struck when I saw that the graph with the when we run out of money. And this year to your point, the graph looks exactly the same. So the classic worry is we can pay a little bit every year or pay a lot as we get closer. What I hear you saying is take another year to look at it, see if we're still five years out. Which point four, point seven five is the right number?

Because what we don't want to do is go up to a 10% increase or something like that. So you too and as well as the folks at the table, did you consider going to 5% or 5.25% to push that out farther? We didn't for

exactly the reasons you said. Once, you know, we this is third or fourth one of these I've been to and it's the you know the red, we get into the red about three years from now. And and there are a couple of reasons Dave mentioned one of them which is we don't execute capital projects quite as quickly as we project. The other one is we always have a few positions that that are not filled. And so those you know that salary projection Here we have every position is filled is the assumption here But the reality is there's always two, three positions that are not filled.

And so that helps us financially as well. So my recommendation is steady as we go until that point becomes maybe two years from now or next year, then we start bumping things Because we have another lever we can always intentionally slow down capital spend as well. I

think we're just going to move on. Just want to I'm gonna try and keep an eye on our time. We have three funds to go, and we've got about an hour. So I'm just gonna say we'll we'll limit ourselves to we'll, do questions after each one like we just did, but We'll limit ourselves to no more than twenty minutes for the presentation of the fund and the questions. Just telling you guys. Go

ahead. Alright. Alright. We'll move on to storm water. So we just have storm water and then refuse. So two more funds. Using a similar format, this is a storm water revenue requirement. Total revenue requirement in 2027 is about 3,700,000. We have seen in your recent years just some observations in terms of spending. The CIP spending has accelerated, It's one, you know, we're watching closely.

And you're continuing to cash fund a portion of your capital projects, the retrofits and the MS4 compliance. We are incorporating 515,000 for the tree program and that is growing over time. By 2030 it's about $800,000. And then we also did have some debt that was issued in the 2025 public improvement bonds that that comes in. So that all makes up the the revenue requirements for storm water.

Breaking it down a little bit more just in terms of this was talked about last year as we bring in this the tree program, how much of a component that is of the operating expenses. So this is just a little bit more detail breakdown of the expenses. You can see the salaries and benefits, the tree program at the five fifteen. Total operating then at about 2,500,000 of which 500,000 is the tree program. So similar forecast, we take the operating expenses, we inflate those forward, operating at 2.51 going up to about 3.52 by 2036.

You can see the capital expenses, cash funded capital or the PAYGO about 700,000. We have your existing debt and the payoff of that existing debt and then some projected debt to fund capital projects. In total, the 3.71 in comparison to your current stormwater fees at the current rates bring in about $3,000,000. So we're seeing a similar result as to water and sewer. Revenues are a little bit less than expenses and that's obviously projected to stay the same as we forecast that forward.

This is what it looks like graphically. So you can see your operating expenses in the light blue growing over time, your cash funded capital growing, paying off that existing debt and then and then the future debt. And then the red line is your revenues with your existing storm water fees. Less cash within the operating fund for storm water currently at about 2,500,000. We're showing that by 2029 you'd be in the red exhaust all funds within the storm water fund.

So in order to address that, as I mentioned, you're continuing to execute a little bit more capital so it is putting more pressure on the fund. What we're recommending in fiscal year twenty seven is a 15% increase. That was what was recommended last year. Believe a 12% increase was actually adopted in the storm water fees. And then we're recommending 7% going forward through 2030.

One nuance, this applies to both water and sewer but has a more impactful on the storm water side is is that level of PAYGO versus bonding. We are assuming that about 30% of the capital is PAYGO funded. If you were to transition and spend a little bit more in bonding, that would put a little bit less pressure on the fund. So I'm showing here with the forecast, we're showing that by 2030 we would basically deplete the funds within the the storm water fund. One way to address this would obviously be higher rate increases but also if we determine that it'd be appropriate to spend a little bit more in debt, that would help to maintain that cash.

But it's one of the things we look at on an annual basis. But again, we see a similar result. There's a little bit less wiggle room on the storm water side given the cash balance. But again, we're seeing each year that it's pushed out of basically a year as as we go forward. To both water, sewer, storm water, and refuse, we do wanna monitor this closely.

We don't want the city to go to a new position where all of a sudden you have to do a really sizable increase. That's something we do monitor closely. This is the current storm water fee structure. So for residential properties, single family, multi family is just a per unit charge for storm water per quarter. So with that 15% increase for your single family home, it would go from $34 a quarter to to $39.

Multifamily go from 17 to 19. And then if you're non residential property, you're placed in tiers of impervious area. And so the more impervious area you have, you fall into one of these tiers and you can see what the storm water fees would be with that 15% increase. This is just a single family bill comparison for, storm water where you are currently, where you'd be with the 15%. Again, an apples to orange orange comparison because of the fact that these are current rates in these other jurisdictions and most folks do increase their storm water fees annually.

Now I wanna shift gears a little bit and just talk about the structure. So this is again how you currently charge single family. It's on a per ERU or equivalent residential unit basis everybody pays the same. But when we talk about the non residential, as I mentioned, you're currently in tiers. That is less common in terms of an approach that utilities use or cities use because there is a significant variation in terms of impervious area by non residential property type.

For example, if you have 200,000 square feet of impervious, you're falling into that tier four regardless. So there's a really wide range. And we've talked about this in the past in terms of potentially modifying this tier structure. So what we're recommending this year is that you transition to non residential properties be charged rather than based on tiers based upon their actual measure impervious area as multiples of ERUs or equivalent residential units. As a result of this approach you would see some non residential properties which see increases outside of just the 15% increase and some would actually see decreases.

So I have three examples here. The first example is a property with 12,000 I'm sorry, 21,000 square feet of impervious. They would currently fall into tier two.

If I could just interrupt you for one moment. Sure. What is IA up here? Build IA.

Impervious area. Sorry.

Okay. Thank you very Yep.

So effectively that property, property one, their build impervious area is currently about 10,000 square feet because they fall into the middle of that tier which is equivalent to about five ERUs. They're paying a $196 per quarter under the 2027 rates. If we actually take their measured impervious which was 21,000 square feet, we divide that by the ERU which is the equivalent residential unit, 2,100 square feet of impervious area, they're actually a measured 10 ERUs. So we take those 10 ERUs times the $39 per ERU which would mean that they should pay $397 per quarter. Another example, property two, they fall into that same tier, they've got 6,300 square feet of impervious.

So they're treated the same as somebody with 21,000 square feet but they actually only have three ERUs. We take that 6,300 divided by 2,100 turns into three ERUs, we multiply the three times the $39, they would pay a 119. And then you do have some properties in the city that are really large, a lot of impervious area. So somebody's got 210,000 square feet of impervious. They're currently placed into tier four.

That's 64 ERUs. They currently would pay under the new rates about $2,500 but they're actually representative of about a 100 ERUs. So we take the 210,000 divided by the 2,100, multiply that by the $39 per quarter per ERU and they should pay about $4,000. So you can see the misalignment that currently happens with the tiers. This this type of approach is very very common.

Most utilities, most cities that have storm water fees charge non residential properties in this manner. You effectively currently have a cap on your structure because somebody with a lot of impervious never pays more than that that tier four. So that would be a recommended change. We talked a little bit about this last year. I don't know why that's This is a graph that just shows the number of parcels.

Maybe during the questions I'm gonna switch to my computer, but how they would be impacted. There's a broad range of of properties in the city. Some would actually see bill reductions, some would see increases. There's essentially 11 that would see an over $2,000 increase. There's about seven that would see it between a 1,002 thousand dollars increase. There's eight that would see between $800 and a thousand dollars and you can see on down the line. In total, there's about 100 that would see a bill reduction. So there's a broad range of impacts.

I don't suppose you know what the percentages are for bill reduction and zero change without being able to see it?

I will come back to that. Okay. Thank So in terms of our recommendation, we are recommending for the '27 budget that you assume the current fee structure. But the city does recommend as part of the fee structure change that there be an alternative fee structure for nonresidential properties recommending that there be a six month grace period. So essentially, nonresidential properties wouldn't be billed under this structure until 01/01/2027.

And city staff is gonna provide an accompanying enhanced non residential storm water fee reduction program. So if you manage storm water on your property, you'd be able to reduce your bill. So essentially an incentive to to take action to make sure you're managing storm water on your property. Refuse and I'm gonna

pull this up. Great. Thank you. I'm gonna look at my questions, see if any are just clarifying. Yeah, just one to start off. How did we define multifamily for the purpose of this? And really what I'm trying to get at is obviously a big apartment building is multifamily. Obviously a detached single family home is not. But the middle is a townhouse multifamily, it's a duplex multifamily. Where do we draw the line on that for stormwater?

My understanding is that it's basically if you're a townhome or a duplex, would be a single family.

Okay.

Consider a single family. So it's truly multi unit.

Got it. Where you're sharing a hallway or something. Okay. Alright. Colleagues, you guys got questions on Alderwoman O'Neill?

And also I'll say I realized we do have a little bit more leeway on time because we budgeted a bunch of time.

I'm going to hold off on my questions because I'm still trying to. Would it be possible for you to share us? Certainly. Thank you.

Couldn't find it.

Oh, okay. It's already been shared with us.

Okay. Great.

I didn't see it. You.

So this may either be a simple question or a long question. So we'll try to keep the simple answer. The tree program appears to be 20% of this expense. What does the tree program include?

The the person who runs the tree program isn't here, but my understanding is it's planting trees.

I think it's also some of, taking them down. Right? Maintaining them? Don't we like, we've got a tree on Prince George Street that Brian's taking down. Miss Buckland, you wanna answer it rather than me pontificate?

I'll do my best but I think that when planning and zoning is here that's a good question for them or as a follow-up question. Yeah, so the urban forester Brian works at meeting the city's goal for a tree canopy. So it is planting trees, working on various strategies to incentivize tree planting outside of public areas which is the place where the only place where we can directly plant trees. And then all of that maintenance. There's an overlay of that work with planning and zoning and critical areas and he does a bunch of plan reviews, as part of the permitting process to make sure

that the

elements of development plans that speak to tree cover and some of those other zoning overlays that they're responsive to those. So he ends up being part of the plan review process for a number of different things as well as sort of the direct service part of planting and maintaining trees.

Okay so those expenses that are together with that revenue belong to planning and zoning? All of them? The tree program?

Yeah, that work sits inside planning and zoning.

Different

subject. If we are to go to this different rate structure, are you taking into account, maybe this is director Vogel, working with the PIO and making sure that there is a very strong communication program as to the new way to do things, the possible delay, etc?

Absolutely and I'd ask Anne and Mike to come up. They can speak to this very well. But in short, need to first get council approval, We're here today as kind of the first formal step. The fee schedule will be presented in a couple of weeks once that gets adopted. And where we have we have this implementation date of January just very unusual usually the fees are set for the year and that's the year. But because of this right we need we need our approval and then we need six months to message everything and set up the billing systems and so on and so forth that's really the you know why that six month delay is necessary.

Okay. Thank you. That's good as

long

as and I assumed you were but worth saying.

And I'll just say we've had a hearing about this at environmental matters. You not to say you can't ask questions now, if you want to go back and get real detail about it.

Okay. And then to confirm, delaying the rate increase on the nonresidential side is baked into the numbers for the projection in the years forward. Is that correct?

It is. So we're assuming the rates go up in this July and then essentially there's that rate structure change that would happen January 1. It's a little bit uncertain in terms of the additional rev if you if you didn't offer any additional fee reductions or credits, you'd actually get a little bit more revenue out of this change in structure. But we don't know necessarily how much people are gonna apply and what reduction they would would see in terms of their bills as a result of that. So we're assuming it's revenue neutral from that that point forward. So that is factored into the analysis, guess is the short answer.

Okay, thank you. Thanks Mr. Chairman.

Oh I'm sorry, Mr. Johnson.

No, just chiming in, I'm Darren Johnson, senior budget analyst. The tree program has been under budget. Haven't been nowhere near close to what their their budget is.

And they're not spending more

not work. Spending this much.

Yeah. Good to know. Interesting.

And and, you know, just speaking from, you know, the the peanut gallery, it always seemed to me that it was gonna be challenging to ramp up that program because we have pretty much saturated the land that we own and working with property owners as we found when we try to do sidewalks or bike paths and things like that, that's just a fairly lengthy process. So it does not surprise me that that spending is that they're just a little bit under their plan.

That's why we're taking down a tree on Prince George Street. To fix the sidewalk, we're getting the sidewalk fixed.

Would make sense to look at that trend and factor that into the rate increase? I. E. Reduce the rate increase?

That's, I think that's a bit of a tricky question. Because the fund balance is so low, I'm just going to leave that one alone.

So what I hear you saying is be careful to do that but maybe look at it in the future if we're not

Yes, I think if revenue, once we hit a point where we're kind of cash neutral, Yes, potentially.

What's the goal of our stormwater program? We had this you said it so beautifully about the last fund. You said lowest possible life cycle cost and level of service residents expect. With this, what is the service that we are trying to provide? Is it some kind of amorphous clean creeks? Is it a very quantifiable this much less pollutant? Is it just plain meet our MS4 goals? What is that goal?

Combination. So from the resident level of service standpoint We want to make sure that the storm drains that we have actually convey storm water. So they need to be maintained And so that's just a basic utility maintenance thing There are also projects that. To And And we're be do fund to do some of that as well. And then you get into the water quality thing.

So yes MS4 compliance we have a legal target we need to meet and that is and so there are projects there that is a reduced pollution goal. And then there are other sort of goals which is to preserve our streams. So the you know you decrease stormwater runoff and you decrease erosion as well. So this is very much a combination of those things which yes, amorphous would not be inaccurate.

Yeah. Well, appreciate you bringing up also the just not have standing water in places and not have people's yard sled because that was not something I mentioned. Yeah. I just I would love it if we can get to a better way of knowing if we're meeting our goal on this program. I it's so intuitive in a way on the water program to me, and it's not very clear to me on the stormwater program. Do we have am I missing? Do we have performance metrics specific to the stormwater program? Maybe that's a miss buckling question.

I would have I would have to look, but but again, please come up.

I mean, I do see under general fund we have just number of MS four permit requirements, so that's probably somewhat related.

That that's, Mike Rossberg, Storm Guard program manager, public works. That is a topic of discussion that we've been looking at internally, and a lot of it is related to what, Burr was talking about. And MS four is kind of, like you said, a very not intuitive goal, but that is a that does cover a lot of the goals that we talk about as far as our state requirements. But also there's that whole we have to just maintain our existing infrastructure as far as just conveyance goes and everything else, which and, even stormwater requirements at the state level is a growing requirement as far as what we are experiencing in our next permit cycle. So it's it is a very but it's we should still re you know, analyze our goals and make them, you know, more clear and and because more clear to what we are are doing, you know, with the funds for sure.

Yeah. I just I I mean, environmentalism is something that I care a lot about. I that's why said on the environmental matters committee. But at the same time, I think it's like anything else, we the way to do it well is to be really data driven. So I won't pontificate too much more.

Would it be helpful that we we do an annual report on our MS four compliance? That is that something we provide you?

It's online. Put our annual report online every year. Okay.

I'll take a look through that. That sounds like some excellent.

And then we can do we want to make that a little bit more digestible to the non expert in that field, right?

I'll read it before bed. Okay. So you started to talk at one point about we could shift our revenue a little bit more towards bond funding. A little do a little less capital project funding from PayGo, do a little more bond funding. Why if if we are currently projecting a 15% rate increase this year and then smaller rate increases in the future, that seems like the perfect scenario for doing exactly what you suggested. So why is that not the

recommendation? I guess from my perspective, it's as we because of the ramp up in the spending on capital, it's a little bit more aggressive than we've seen in the other funds. So if we get to a point where the city is executing capital at a much greater pace, it may be a point in time where we would want to transition to use a little bit more debt so that we could mitigate those rate increases would be kind of the argument. The whole argument between cash and debt is it's a long lived asset and therefore it doesn't make sense, know, in some instances it makes sense to to pay for that asset over a longer period of time. So it's just one of those toggles I guess as we because of the fact that you're not sitting on 12,000,000 within this fund, it's it's a smaller amount.

There's just less room for error in that perspective. So I brought it up as a something to continue to evaluate going forward. Ideally, if things keep getting pushed out, I think our plan of the 15% and then the sevens in cash funding is ideal because that's more sustainable long term. But to the extent that we would need to complete more capital in a more aggressive rate, that would be an option.

Could we come up with a projection in which we raise the rates by 10%, 12% this year, and then also raise them by a higher so by a lower rate this year, but by a higher rate in out years because we are doing more bond funding now and less pay go capital funding now. So it's something we could put on the table for us to consider.

Yeah. We could certainly run run that type of scenario.

Yeah. And if if you do it and tell me because of your low fund balance, this is a really bad idea, I want to know that. But I just it seems like something seems like this is a perfect opportunity to smooth out our rate increases.

Yeah, we can certainly run that scenario.

Looks like maybe you have someone to say Director Vogel.

Again, just thinking about about trees, just like how does that play into this?

Sure. Yeah. Okay. Let's keep moving then.

Just to your earlier question that about 23% of the nonresidential properties would see a bill reduction, about 29% would see no change, and then the remainder would see a modest increase or a more sizable increase depending upon their impervious area.

Yep. That's the the political talking point I'm getting out of that is more than half see no or no change or decrease. That's great. Thank you.

Alright. So we'll move on to the refuse fund. Just a little bit of background in terms of the refuse fund. We'll talk about it extensively today but the city does contract out the majority of the services provided within the refuse fund. So really as a result of that, the refuse fund expenditures are largely outside the control of the city. We've seen increases in fiscal year twenty seven due to the result of the expiration of your seven year contract. So you had to go out to bid last year. You now have a new contract that begins for fiscal year twenty seven. That's reflected in the in the numbers that we're looking at today. And then that does that collection contract does include monthly fuel adjustments and annual increases tied to to CPI.

So that's really the the key driver for the refuse fund. The revenue requirements in total, you can see it's about 4,500,000. Vast majority of that is your operating expenses. You have a little bit of existing debt, but 83% are of that 4,500,000 is the contract services. Just to give you some perspective, the O and M expenses because of the contract have increased substantially over the last three years going from twenty twenty four actuals to the budget is about a 30% increase that's largely driven by those contract services.

And there's a little bit of a reduction in '27 of 250,000 for environmental services given the new new contract and the curb recycling program for 2027. So similar forecast just taking the operating expenses, inflating them based upon CPI and and other known factors to give us a forecast that hopefully represents what the contract services are gonna be. Going forward, again, have a little bit of existing debt, not much. Total refuse expenses, 4,500,000. Revenues with your current refuse fees are about 4,000,000 so there is a little bit of a gap, not as substantial as in the other funds.

What this looks like graphically, again most of your expenses are operating at 4,500,000 and then you can see if we just keep the refuse fees flat, we would have a growing gap within the fund. As a result, you've got about 2,000,000 currently in your operating fund for the refuse fund that would go negative by 2029 if you don't adjust the refuse fees and then it would go further negative in future years. So revenues don't currently keep up with the expenditures largely based upon the the program. We are recommending an increase in fiscal year twenty seven of 7.5%. And then we think 5% increases given the level of the contract services and how that's gonna change over time would be would be necessary to keep the the program sustainable.

And so this fund has operated closer to actual expenses unlike the other funds we've talked about in terms of, you know, there's not the capital, the contract is what it is, so the annual expenses have come in very close to what's been budgeted. With the increases that we're talking about, the seven and a half percent and then the 5%, we would maintain that minimum balance. We would get close to it in 2030. This just assumes we continue with the 5% increases going forward. You'd obviously be building up some fund balance in future years.

The city evaluates this on an annual basis. So if you're if you're building up those fund balances, you potentially wouldn't need to do the the increase. But again, at some point in the future, you will have to go out to to bid for the contract again and there may be a jump up in expenses in in future years. That's currently not reflected. Just in terms of where you compare, current annual fee for storm water for single family resident, not storm water for refuse, is $431.

With that 7.5% increase, it'd go to $463. So you're kind of in the middle of the pack. Sound like a broken record, but most utilities do adjust their refuse fees on an annual basis. I know Anne Arundel County is considering it, so theirs is likely gonna go up. So you'll probably like most likely continue to be in the middle.

And then just to bring it all together, we can talk about refuse, but this is just the total residential quarterly bill with the three funds that we've talked about today. So water and sewer bill using 12,000 gallons, that's going up $9 a quarter. Storm water bill going up $5 a quarter, and then the refuse going up $8 So in total, we're looking at about a $22 increase per quarter for a typical residential customer with the recommended increases. That I'd be happy to take any questions.

Alright. That was fast on that one. Detract one is always the simplest. Ownerwoman O'Neil, you have questions?

I have questions, but they're more towards BRRRR than Stanchak. In regards to the trash contract, as you know, the biggest complaint that residents have is that they don't feel that they get bang for their buck in trash collection. Constantly, you know, leaving trash at the you know, if I've got three bags in my can and my can's lid doesn't fit, my trash is left on the curb. In the new contract, was any of that discussed?

I'm gonna put a fine point on this and say that as I walked out my front door this morning, I had to pick up some trash from my trash can that had gotten left in the street. So appreciate you asking the question.

So what right. The city the city made a decision, ten, fifteen years ago to to go from city employees doing trash collection to contract. And, we do have a contract structure that I think is biased towards low cost. And it allows the contractor a lot of leeway in terms of going fast. And the way they pay their employees is to move fast.

So structure no major structural changes from the old contract to the new that I'm not aware of. And Tracy is here so Tracy please come on up. Feel free to add your perspective here. I do feel like the going into a new contract where that contractor has a long performance period ahead of them, where we have a lot of incentives and just primary and a lot of disincentives. So we have the ability to financially punish them if we're not seeing the service that we like.

They're also bringing a lot of technology to play here, cameras on the trucks so everything is going to be able to you know visually confirm or dispute these customer complaints. So I'm cautiously optimistic that we will see an uptick in sort of the level of customer service. But at the same time we had this contractor before and it didn't go particularly well then. So I'm just kind of eyes wide open on I don't know exactly how this is going to go. But they because of so much, they got penalized a lot, and BG did, when they were with us the first time.

They said we lost a lot of money on this contract, they were doing the kickoff. Are you guys going be so hard on us this time? And we're like yeah, do better.

And what's the length of the contract?

What's the base period? Four years?

For the new one, new one is ten years.

But there's a number of there's some options at the end, right?

It's it's Tracy, I think you need to pull your mic over.

Yes. Sorry,

I'm Tracy Brown, the public works analyst. It is actually a ten year contract. It's actually two years, every two years we can renew up to ten years. But it's an actual seven year contract with additional years at the end. So it's a total of 10. Total ten year contract.

I believe what's the base period? Like we are committed to I think seven years?

Seven years.

Seven years. And then with options beyond that. Correct.

So can you what are the standards? So this is really helpful about speed is incentivized. That makes sense.

Sort of.

So when when somebody says garbage was dropped in the street or my trash cans were left in the middle of the street, what is the standard that the contract requires and that we should be telling residents to make a complaint or to accept it. That's what's in the contract.

Where they pick up the containers, where they're supposed to place the containers. So to the to the best, the closest they can without. If they're not doing that, please bring it to our attention.

How about garbage in the street?

They're supposed to be cleaning up. They have the capability of cleaning up as soon as drops. They have a broom. They have shovels. They should be collecting it as they get it. If it's happening, please bring it to our attention so we can address the issue.

And bring it to attention how?

They can put it in through request report a problem is the biggest thing cause then it goes directly to the supervisor and the supervisor will go out take a look and say okay yep this is an issue kind of thing and then they will send back the contractor to go back and clean it up.

Okay. Thank you. Great answer.

I I and then in terms of trash in the street what I do see sometimes is recycled bins that don't have a lid, maybe recycling will blow out, a recycled bin will fall over. That is not the responsibility of the contractor. Our

recycling bin has a lid, but I hear you.

You have to remember on, like, a windy day, things are gonna blow, that kind of stuff. So Yeah. They do the best they can. Yeah.

No. And and it's a hard job. Like, no doubt about it. Right? I don't think we any of us wanna stand up here and and say, boy, we're we're very upset with all of these guys. Like, we know they're individually doing a hard job. It's a question of the contract structure and how we can incentivize them to make sure they're doing they're balancing those two things appropriately, cost, speed, level of service, all those.

I have to put a finer point exactly on what you just said.

Hold on. On. Was Audrowoman O'Neill did have the floor. Let's go back to her. I

still had questions.

Okay. Thank you.

Do want can we finish this? You finished with? So just

a clarification on who is picking up which trash. I know city streets, neighborhoods, Harbor House, is that private trash? It's not city trash.

Private.

Private. Clay Street is city but Uberie Court is private. Is that correct?

Parts of Clay Street are single family, you know they front the street, provide the trash collection. Parts of the homes on Clay Street are actually part of the public housing and serviced by their provider.

And do you happen to know if that's the same trash day?

I I don't know their schedule.

So that might be part of our problem on when people are saying that trash was left because if it's not the same trash day. Because you're supposed to take your trash can in within certain number of hours after it's been but if they have a different trash day for part of the street it's a it's a long street, Four blocks long. Okay. And then, but we don't do anything with any of the private companies. One of the complaints I keep hearing is that there are some companies that are picking up trash at 05:30, 06:00AM.

They're not supposed to start until six. They have a per they do get a permit from us. That's our role with private collection.

Thank you. Now

Yeah.

Just to put the finer point on exactly what you're saying is we should never have an expectation that the wind blowing garbage out of a can is the responsibility of the trash collection people. So I appreciate you pointing that out. So if I could ask you to go to Slide 41, realizing we're talking significantly less money than other areas, I'm concerned about rate increases that caused the minimum balance to go up as a plan. When when I look at Slide 43 and we obviously wanna keep that bottom right number lowest as possible while maintaining the caliber of service that the director is talking about. Is there a way to to plan the rates that that causes us to be more stable on on slide 41 or more flat even if it's a penny or two or three?

Yeah.

So if you look at specifically around slide 41, we're we're showing that in 2027, we're actually gonna be using some fund balance so that we're going from '26, you know, about, I don't know, 1,800,000. It's going down to about 1.6. And then we're continuing that downward trajectory in terms of the actual balance, that's the gray bars, to 2030 where we're at a at a low point. And so our recommendation would be to do the increases that we've projected. But in, you know, 2030, if we are seeing that the expenses are leveling off, you wouldn't have to continue to increase rates so that it would stay at that lower level.

But unlike the other funds, we are seeing, you know, when you budget a 4,500,000 in expenses in the Refuse Fund, you're spending those. And so we think it's gonna follow this trajectory very closely. So if you wanted to drop down to that line, you you could, but it would mean that you'd have to do some bigger increases in the future.

I think maybe the model simply shows a consistent rate increase across all of those future years from from 30 to 36. There would be nothing present that would prohibit us from changing the model to where the gray bar more or less has the same slope as the red line. Lower increases from 31 on. Exactly your point. We we would not do this. In in reality, we would not what you see there is not what we would do.

Yeah. So for purposes of planning, I would not wanna say from 31 to 36, we're gonna increase it. So I hear you, director Vogel, saying it makes sense to keep it that way through '31.

'33 At that point in time, the rate increases would we would want to exactly match the expenses for the next year. If expenses go up by 1.7%, the rate increase would be 1.7%.

Yeah. So for a planning figure, realizing we're talking AI years, realizing it's not gonna change slide '43, But I guess what I'd like to do at this point is our planning figure make that flat.

We could certainly

run that. We could amend that slide just so that we're saying that, hey. We are gonna raise it, but we're looking at a lower rate of increase in the future. To your point, director, we may have we will definitely have to adjust it.

Right.

Okay. Thank you. That's all my questions.

Thanks. Going back to the new trash contract, are there any other changes in that contract that the public should know about?

I'll let you go first Tracy. Okay. There's one.

Oh yes. My apologies. Here are you.

May get the name of the road incorrect but I think it's called Shipright Harbor back here off of Revel. And you have what is essentially a long driveway, it's privately owned, and there may be five homes on that street or driveway. When we used to collect trash, as city employees we would go down and people would would walk from the trash can they would drag the bins 70 yards back up to the street and then dump them and then return and return the bins. When we shifted over to contracted service that those we believe there's less than 10 properties throughout the city that are in that situation. Those those properties were not explicitly called out in the contract and the contractor was not required to do that.

For about ten or twelve years this just kept happening. And resident and these handful of residents continue to get their service until. Our current contract or realized that hey we don't actually have to do that we're not getting paid for that and so we're going to stop. And us being kind of twelve months out from having a new contract we felt it wasn't necessarily worth it to go through a negotiation and try to compel them to do it and all these things. We said we'll just roll that into the new contract. So we've added this, know it's not a significant expense, but we did explicitly call out less than a dozen residents as we said you are going to walk down that driveway and you're going to pick up that person's trash.

And so well, well, thank you for telling me about that. Ah, okay. Yes. So in that case, just to make sure I'm understanding, the truck doesn't go down. The people Right.

No. The people have to walk down, wheel the wheel the bins to the to the street where the park where the truck is parked. Because we don't want the trucks going down these very narrow. They're not they're not actually streets. They're in some places cases gravel. Oh, If you try to get a part of the We would cause damage we tried to do it and those have been issues in the past. Got it.

Thank you. Can we go back to slide 36? I almost stopped you in the middle but I didn't think it was that important. I don't understand this third bullet. Could you just try and explain it to me again?

Okay. So, we have an old landfill that closed in '19 I'll say the early nineties. Environmental compliance costs associated with that closed landfill have continued through this year. That's wells, drilling wells, monitoring wells, we have a landfill gas program, and so on and so forth. We have fulfilled, we have told MDE we have fulfilled the requirements of our consent agreement, it's not a consent order, courts were never involved.

We voluntarily ended into agreement to continue testing to make sure that there was no harm to human health or the environment through what's been going on there. We believe we've satisfied all of those requirements of the consent agreement and we're stopping. So we're no longer going to sample those wells worry about the vegetation clearance so that we can sample all of those costs. So there are a number of costs at the laboratory costs and so forth that are that are just ending and so $250,000 worth of environmental compliance is stopping. We will continue to of course the landfill gas until until all that gas is depleted.

We wouldn't want to stop that because then pressure would build and then contaminants could move someplace where we don't want them to go. So we want to keep that that gas pressure low.

That's great. No, I'm glad you explained it to me. Congratulations on getting that done. I just have a couple little ones. The debt on this same slide, we have you know, it's not a lot, but what is that from? Is it just a is it a legacy from when we had our own program? Or is it something is there some reason we're still borrowing?

I know there's no future borrowing. I'd have to I don't recall what that exactly is for. Is that the maintenance facility or some component of?

What I'm trying to get at here is are we ultimately going to get to a place where we don't have any debt in the refuse?

Yes, we have no plans to do other capital projects. If I had to guess this is something we did at the landfill. Perhaps installing the landfill gas system would be a major capital expense that we might have wanted to borrow for.

Gotcha. And then last, and I promise this is not trying to stump you guys, but I'm not trying to ask you without sounding that way. You mentioned on one of the slides that we're using CPI to project out future increases. Why CPI rather than producer purchasing index? What basket of goods are we looking at here? Is that are you genuinely just using like the same CPI that I would use to adjust for my retirement income? Or is this something specific to what we would expect to be buying?

Yeah. It's it's specific to the contract. So the contract has specific CPI measurement, fuel indexes and things of that sort. So that's what we're using.

Perfect. Thank you very much. I should have known you were already on top of

it.

That's all my questions. Do we have anything else from either of my colleagues? No? Alright. Well, we've got you. Do you guys mind if I go back and ask you a quick question about storm water then? Oh, actually, no. I'm sorry. Did have one last question on trash. Tracy, I'm sorry. This really is kind of for You know, we had a bunch of folks go to Sweden. They come back raving about their trash system. We see in other parts of The US even where they're trying to do new things with trash. If you just wanted to really revolutionize how we deal with trash in the city, what would that look like?

I'll start with one thing that I think we could do. And this came as a suggestion through our climate action plan, which is maybe try to keep food waste out of our solid waste collection and disposal. That's a large cost, that's heavy, and then it ends up in landfill and then produces gas and you know all these. So I think that's something that's actually practical and something that a very small municipality like us could could could take on with the support of the public. Means you know it's a lot of work for the public.

If we if we provide you a food waste bin then you have to use that and we you know there's a lot of pieces that go along with it. But I think it's I think that's doable. Some of the other things you see you know in Sweden or Denmark or someplace like that where they. They have incinerators and they make sure that only things that are appropriate for the cinerators are in the supply chain at all that nothing there that shouldn't be in that incinerator ends up being produced or sold in that country. Those are very much I would think regional or national level initiatives that would would be beyond something we could tackle but that you know the one thing that has struck me is like.

Yeah I think if we if we weighed. Our residents containers. And and you got just like the storm water program if you had a financial incentive. To use less and storm water we we are trying to incentivize these non residential customers to add storm water treatment on their properties that's really the goal of all of that is you you have you you save money if you treat your storm water. Same thing if we did the same thing in solid waste, we we could probably reduce our our environmental impact there. But it's not none of those things are easy, but other other people have done it, so it's doable.

Does our new trash contract, is that also inclusive of yard waste?

Yes.

Yeah, it is. So what I'm trying to think about is it seems natural to me that what you're talking about could be kind of lumped in with yard waste. But if we're wanting to set this up and we just signed a new seven year contract for yard waste, I'd hate to set up two parallel systems when really people should put their yard waste and their food waste together. Do you think that's a major barrier to enacting what you just talked about? Is there some way we could kind of get out of the yard waste side of things?

I I don't know yard waste very well. I I know we collect it. It goes somewhere. Tracy knows better than I do.

Right now where we take our yard waste, they don't take food waste with it. Right. So that would be we would have to intel where we take and we're upping the composting that we're having at Truxtun Park now. We're going to be looking into a different company kind of thing, maybe bringing in more containers, trying to vamp that up more. The residence right now,

if take your composting materials to the compost site, you're doing that out of your social conscience, let's say. Right. Not because it saves you money or you're being required to.

My compost service cost me money, actually. They're to give me some nice, compost at the end of it. I still haven't seen it. But what I'm what I'm trying to get at here is, say, six months from now, the environmental matters committee wants to have a hearing about how will we set up a compost program. Is it a totally moot point because we just have signed a seven year contract for yard waste?

No. I don't think so. I think we can continue to promote voluntary use of accomplished program and that's got its benefits. We want to take that to the extreme then we restructure kind of our fees and our contract would have to go along with that and all that. So we more or less paid our customers to compost.

Thank you.

We have to remember things always changing. Our where we take our yard waste, they will start including new things that we can recycle in our yard waste. So as things change, we put it out there so that some things can increase on that purpose.

Yeah. Well, maybe we'll have you to an environmental matters committee meeting at one point, Tracy. We brainstorm on that. Thank

you.

I do wanna go back to storm water briefly. And actually it's tied right into what you were talking about. We're with this new non residential structure, which is wonderful with me. I love it. The point is that we're charging everybody the same rate per ERU, but we're now charging people who have more ERUs more. Could we choose to not charge people the same per ERU? Could we create a progressive rate structure where if you have 100 ERUs, you're paying more per ERU than if you only have five.

If you're a church, you can't help the land you own or the size of your parking lot right now. And so making it like we have on the water side, well you're punished because you have 30 ERUs. You're already gonna see a really big change under this. And so you're gonna be very interested in how can I get some storm water treatment to bring that bill down? So in in those cases I'm not sure.

It's it's not it's not like I can really control that in in terms of how much property I own. But for new development, but then the new developments in a different boat because you're already required.

Right. You're already in

the. Yeah. So that that's not sounding like something we should do.

Okay. I think I get what you're saying. And maybe and I'm seeing this rotor nod her head in the back. So maybe we put a put a pin in that. We do this. We see what impacts it has. If we still feel like there are a bunch of places that have tons of impervious acres and aren't mitigating.

And they're not doing anything. Then, yeah, then we then we then we look at that.

Yeah. For sure. So, maybe I'll make a follow-up. Miss Jackson, can we just ask the city attorney to make sure that's legal? There's not any reason why we wouldn't be legally allowed to do it. That's all I've got. Colleagues, anything else on the enterprise funds?

No. This has been great.

Yeah. I feel like we're

Oh, yeah. We're five minutes ahead, so let's take our twenty minute break, and we'll resume it to well, it's your your thing, but I'm proposing that maybe we we reconvene at 10:15 and and and you guys get out a little early.

That sounds great to me. Yeah. Uh-huh. Alright. It's our motion to recess for twenty minutes and return at 11:50. So let him move. Sorry.

Second.

As per the naval officer's recommendation.

10:15 is the motion. Second. All those in favor, please say aye. Aye. Motion carries.

We're in recess. You good to stick with the fifteen minutes for this?

Absolutely. Like like done in fifteen minutes or me done getting through the slides in fifteen minutes?

Through the slides.

Oh yeah. Five probably.

Okay. I just figured we might have a bunch of questions. Alright. We are back. It is 10:16 a. M. On April 28 and director Vogel the floor is yours.

Good morning. Vogel director of public works. I'll let the folks who are with me introduce themselves. Tracy?

Tracy Brown, public works analyst.

Betsy McCann, bureau chief of engineering and construction.

Alright, accomplishments. First one you're already well aware of, city docs progressing very well and then getting through that grant was a significant challenge. A lot of environmental and historic preservation hoops to jump through there. We've talked at length in the previous presentation about the storm water fee adjustment, great job there by the storm water team to get that ready to go. And then lastly, lot of other things I could have chosen as the third bullet, but traffic safety studies for some of our major corridors has been something we've been trying to get after for two or three years.

Think that that capital project went into the budget at least two if not three budget cycles ago and it's finally underway. So very excited about that. Moving on to performance measures, I'll just hit a couple of highlights or just things to point out here for the most part. Not a lot to see here but the number of potholes repaired that has been changed in the the performance measures that you the council passed a couple of months ago to something that we think will be a little bit more meaningful because to me it is high good is high bad I don't know. And so now we're going to go to sort of a response time which we know will be able to unable it, we would not be able to achieve a very quick response time to a pothole report as soon as the winter ends, So if you have a long freeze, a lot of snow, then you're going to have a lot of potholes and it would take the crews some time to catch up.

And so we wouldn't be able to respond quickly to all the potholes requests that come in immediately. But over you know after that things settle down hit steady state. So we we have a proposal or an objective for potholes of about 80% of the pothole requests that come in get responded to I think within a week is is what I proposed there. Skipping down to the bottom of this page the something we're not still hitting which is our hydrant testing. We really want to touch every hydrant every year and we're still kind of on a two year cycle and that's really just a matter of making sure that the people don't get reallocated to some other task who are responsible for this and that they are doing the work quickly and efficiently.

So there's just some supervision there. I see no resourcing challenges, nothing for the City Council to help with to get us up to that 1,200 number. Next slide. Okay another one here, linear feet of storm drains maintained as a percentage of sewer mains under asset management. Reason I've got proposed up there as NA is this is just another one that doesn't make sense I didn't.

I think I looked through these I try to find one or two that I want to change every year. This one I probably should have changed last year but I'm going to propose we change it next year. It's just meaningless. Storm drains, we are maintenance program involves cleaning out the inlets, not the actual pipes themselves. When it comes to being proactive on a storm drain system is really about inspections which is a which is a different metric.

And then the last thing here is the third one down there percent of CIP project milestones. This is the first year we've reported on this. It's brand new performance measurement. And we kind of think we'll end up at 70% not 80% and I think next year we'll do significantly better as the staff is a little bit more used to the projection and what it is we're actually measuring. Next.

Next please. No enhancements. No non personnel enhancements. And it's not because we're adding positions, it's just a mechanical thing, right? We propose the budget at all positions are filled, all positions were are never filled, so that's why the past salaries are lower than you might expect.

I'm sure that's the same with every department that comes here. Next slide. Revenue or only revenue comes from our enterprise funds and we've covered that already this morning. Next. And then here's a number that gets a little bit funny because we're commingling enterprise funds and general funds for our general fund expenses.

And so but just as I guess what percentage it would be enterprise versus what percentage is general fund, we go 73%. So the only really from a change standpoint with respect to the budget is that engineering construction contract services is going down a little bit from where we've been historically. A caveat that I'll point out here is that oftentimes what's in contract services is a budget amendment that a particular council member may propose to have a study performed. Be that the main street reversal study, traffic circles, road diet on Bay Ridge, just to name a few. So sometimes these things are places where council members say, hey, I've got something I really want the engineering department to do, I'll add $50,000 into the budget.

So that's you know it's kind of where we sit right now is a reduction there. And that at that 135 we would not necessarily if that were to stay the number, would be we would not necessarily have a lot of agility in terms of I can just, something comes across my desk that that has an emergent requirement, we

would

end up having to do a funds transfer most likely. And so that's just an extra extra step. It means you know rather than being in touch something that I entirely control, I'm working with finance and the city manager to do things that might come up during the year. And then the the last little bullet there is not large numbers but phones and software budget has been moved out of our budget, moved to ITS. Again you've probably seen that from other departments. I'm pretty sure I made the fifteen minutes.

That's all. Or one of the most complex departments. You you managed to really We

were already here for an hour for the

Yeah. That's true. Yeah. You're gonna make me even be short on questions. But, I'll let alder Roman O'Neill start with questions.

Great. Thank you. I have a couple of questions, and they're more less, I guess, budget and more just operations. Street sweeper. I know that's one of your performance measures. And we've talked in the past. Is there any possibility of some type of schedule to the residents? And I don't want I don't mean to say every Tuesday it's going to be this. But it would be helpful. The thing that I hear over and over again is, oh, I wish they were new.

I would have made sure my cars were off the street. Is there an opportunity for us to say, this ward is the first week of the quarter or whatever? Is there any chance of having some type of schedule?

There's a chance. Right now we we are fairly rudimentary in terms of how we how we manage this and so it's it's very difficult to predict how much we're going to get done in it in any given time. We are in conjunction with exploring ways to be more efficient and effective in snow removal, very close to to entering into an agreement with a software company that can can have routes, plan routes, and once we get that visibility and better control on what we're doing, I think there will be an opportunity to forecast better. Just because because we are small we have only a couple of pieces of equipment, we have two operators. Then you throw weather in into the mix that it's just very difficult to know exactly.

Yeah we can do we can hit every eight weeks on this particular schedule. You could expect the first week of the of every other. Let's say for instance the first week of an even numbered month your neighborhood's gonna get swept. We're not there. But it's possible that we could get a little bit more next week, know, a lemort could go out or some the possibilities are there, it's just nothing I can promise in the very near future.

I would just also like to add that the major caveat with anything like that is parking restrictions and the appetite for that. I've looked into it as part of the storm water program because the MS you can get credit through the MS4 permit for street sweeping and it's just difficult with trying to present parking restrictions associated with street Right?

Think the auto woman's question is if folks knew that their street was going to be swept, they would voluntarily park elsewhere or in their in their driveways or something.

Right. Exactly. Feel

like even if they knew, there are some folks in my ward who would not be very happy about it. But it's worth considering.

I mean, now, your street, they go around your car.

You go around your car.

Because you don't know how you have no idea when they're coming. If I knew that the first week of the, you know, even numbered months there was a possibility of that, I would make sure that the midshipmen who park in my street that we move their cars, that we you know, because they're sitting there longer. It just there's some opportunities for people to have the ability to actually have their areas swept.

So let's say in a hypothetical future world, and I don't want to spend a ton of time because we probably have other know forums where we could address this in-depth. But in a hypothetical future world where there's an exact route that the sweepers take, you would be then, if we could share that information and they would say, oh I always know that when they go to this street, I'm the next day. Yeah. Then let then the residents could kinda keep an eye on our website and they would see the maps and they would see the routes and they could they could kind of self do what you're saying because they would know.

Right. I would like to see it as a goal eventually and it sounds like perhaps the snow removal app or software, I guess, could also benefit street sweeping in some

Exactly. And that was that was something that Tracy said, hey this would be not only is this gonna help us with snow, maybe it can help us with with this street.

That would great. That would that would help a lot of people that have that question.

Great.

My second question is we talked briefly about places like Clay Street, West Washington which are city streets that could use maintenance, weeds from sidewalks, things like that more so than other areas that maybe don't have as many renters on them. We talked a little bit about it and can we make a plan so that at least at the beginning of the season those areas are looked at by maintenance, street maintenance staff?

The answer is yes we could. I think it's a matter of policy whether we should. So I think that is something maybe another committee or the council in a working session, maybe it's a working session topic. Is the appetite of city leadership to say this neighborhood will do what is your responsibility as residents is to make your neighborhood look pretty. Or if you want to, you don't have to.

But if you want your neighborhood to look pretty, you've got to do it. But other neighborhoods, we're going go ahead and take care of that for you. That feels to me like a policy decision. And I'm not opposed to it because we've already done it downtown. We already gave up on Flea, Cornhill, Maryland, East and we just said that there's just because of the Airbnb's or whatever it is people don't take care of their neighborhoods or the shops don't have weed eaters, they don't take care of their neighborhoods the way we do in the more residential owner occupied homes.

So I just gave up on that one. Got tired looking at weeds downtown and we're spending like $10,000 a year to make downtown a pleasure. It's been very well received. But I had a heart I had a lot of heartburn. I wrestled with that $10,000 for a while before I just said we're gonna do it. So there's an opportunity to do it. It's just a matter of I would like some direction from either mayor or council or whatever on on where you stop. That's that's my that's my problem is you say this street and this street but but what about this other street? I don't know.

If I ask for specific streets and was able to find $10,000 that could happen on those streets?

Yes. Yes. Again just try to keep in mind how do you limit something to this and how do you take a fairness sort of approach to it. And if you're if you're comfortable with it, you'll you'll hear no objections from me. I'm just pointing out that as as decision makers, as policy makers, that's that's a little where these things get tricky.

We used to have a crew that did it about ten, twelve years ago, I'm told. And once every other week, they were there cleaning up, making sure that the sidewalks were free of weeds, and it came out of a budget at some point in time, so it stopped.

Probably along the same time we got rid of the trash. Public works services used to have a lot more people than we do now. I think services were 60 at one point in time and now they're 25.

Okay, thank you. Those were my two questions for now.

Auditor Thorpe, you're up. Thank you, Mr. Chairman.

Director Vogel, I have to start by saying thank you. The amount of work that public works does that people don't see is amazing. And across the board, the amount of effort that's going in is great. So thank you. Let me first talk about snow.

And I think it just might be a yes no question, but you talked after an extensive after action effort about technology and other equipment. We talked about authorities, but but from a budget perspective does this budget include everything that you think it should include in order to prepare us for snow removal next winter?

It does not. It does not. The one piece we just have to kind of tackle this one piece at a time, one piece that we went after first was the software. We want to be able to give a turn by turn directions, we want to be able to know in real time where our drivers are, And the snow pass system that we have now while helpful in terms of communicating to the public maybe where a plow has been is not really of an effective operational tool. So we've done our market research we've interviewed with various firms or companies.

And found the product we want. And we know that we can afford that out of our budget, we'll have to do a funds transfer to be able to pay for that using FY '26 funds. How we pay for that next year is still an open question. It would seem to be under the approach that is being taken in this budget by the administration is that that would be an ITS cost. But again there's always a place if you're looking to come up with $20,000 or so or $25,000 that should be something we should be able to manage.

You keep in mind, we built the budget in December and January. And so things just sort of lag like this. But we always have these ways of being flexible in the year of execution. So while the budget doesn't have that $20,000 in it, we're going to find the money to do some setup costs, the upfront cost might be 40,000 or $50,000 the recurring tail to that is less. And then equipment side, that's just tough to do without a fleet manager.

And so we're kind of used to having a fleet manager Danny Horwath, where he would walk us through, okay, what are your needs for fleet and what's affordable and he would present that. We're just kind of in a little bit of a transition period right now. So fleet management will be something that will be a big focus effort I think in the next budget in the '28 budget.

The reason you don't have a fleet manager right now is because of essential services or it's just

because Somebody retired.

Oh okay.

Yeah.

Thank you.

The was quoted is I heard him say, we have two jobs on the city council. Remove the snow and pick up the trash. Sounds like you're working the trash. So it sounds to me like this city council should put an amendment in the budget and lock in $25,000 for that software.

Fair.

Thank you. The next question is I'd like to pile on the street sweeper conversation but maybe rather than go to a solution to take some advice I've received and focus on the problem. I believe we should make a transition in Annapolis and I represent esports so I'll specifically talk about Esport and clean our streets better and our sidewalks. But let me talk specifically about streets. I would like to work with you and Aldwoman O'Neil to explore what the what the best way is to clean our streets.

In Eastport, our problem is cars because the street sweeper, it's an obstacle course and so it's exceptionally inefficient the street sweeper to operate and arguably the street doesn't look a whole lot better as they weave in and out. And so I would like to put some priority and if I would ask for your advice after this meeting if we need to to put resources into it but to to clean our streets because what happens in Eastport is the leaves, the junk, the cars, they never move. The it the the well, first of all, the normal storm water washing doesn't clean it as much as effectively. And when it does, all that stuff goes right into the creek. So I'd rather pick it up in a in a street sweeper or something.

So is that the best way forward is is is to sit down with you and older woman O'Neil and whoever the right people are and look at the plan? Or to turn it over to you and ask for a plan?

Turn it over to me. Think that's something we could target. We're in 2026 now for some time. Like sometime in 2027 we pilot maybe not all of 8 but a subset of Ward 8 where we go to, I was just in Boston a couple weeks ago and there's a sign that tells you on this day of this week, or maybe it's this day every week, do not park here. You will be towed. And that's I think the only answer. It's got to be signed right there on the street so we have to have a plan, we have to be able to communicate that plan and then execute on it. It's doable.

I would very much like to explore that. I I am willing to take the hit on loss of parking for a period of time to do that. Again, think it's communication. So I look forward to that. Thank you. And and by the way, also, I think if we need to capital investment or leases or whatever for additional machinery, I think we're very open to that discussion.

Can I jump in with one little question on that? Is the limiting factor right now the machinery or the people for the street sweeping?

More people is my observation. We've got a few pieces and I think some work better than others But people certainly in the wintertime is a different story, right? Because the sweet trooper doesn't just sweep it and also cleans with water. If the ground is cold we don't really want to do that for the fear of icing and things like that.

Thank you. Next subject, sidewalks. I feel like I'm partnering with one of my colleagues on each one of these topics. But thank you for the level of effort that you're going to in sidewalks. And quite frankly Alderman Huntley's question about street sweepers is where I am on sidewalks. What is your limiting factor on doing more sidewalk work? Is it

By sidewalk work you mean large scale repairs, not responding to a resident resident complaint.

Correct.

Limiting factor, yep, both budget in the capital and then the people to manage that budget. Betsy's completed interviews for another engineering position. If we were to be fully staffed in the engineering department, that would not be as much of a limiting factor. It would just simply be the budget. But I think we're spending all of the sidewalk repair capital budget as it as it is.

Okay. So what I hear is you got a a people challenge now but you're you've already got the slot. You're filling it. Work that. See how that goes and no? What I heard

is the thing is now the staffing and the budget are in sync. Yeah. If you were to raise the budget and I didn't have, I mean I weren't fully staffed, we wouldn't be able to spend the money you added in the budget.

Right. So that's exactly where I

was going. They both have to go up together, we're funded on the people side, we're good there, additional money in the capital project we'd be able to use. So our constraint today is both because we have a short people, not a lot of money in the sidewalk budget, people's thing was solved in last year's budget, now we're hiring the position, Right. And the budget would need to increase to do more sidewalk repairs.

To put a finer point on it, when you fill the you have a double problem in people. You've got an empty billet and then you got a cap on or not a cap but you only have two people to do that. So my point is, we were and to confirm what you said if we were to raise the capital money for sidewalks, your two people that are working it would need to be beefed up.

As long as we're fully staffed, right, and people leave, as long as we're fully staffed, we could spend more money. Okay, perfect. We're in the budget, we have enough, but we have a vacant position right now.

Gotcha. A general question that sounds easy but I'd like you to make it as hard as you can. If we were to give you another 5%, how would you spend it? In other words, what would you not in this budget that you wanted when you cut 5%?

We didn't really cut. The only thing we did go down on was the engineering construction contractual services. That was, we didn't I don't think we took a full 5% that was a fairly small amount. Kind of as I said as I went through the slides, it's not that we wouldn't be able to do everything we needed to do, it would just be there's some extra administrative steps involved from, you know, if you have an engineering construction contractual services budget that's got plenty of money in it, a new requirement comes along, you just take care of it. In the future we'll have to move money probably out of salaries into that budget and then spend it.

I don't see that as being a big concern. In the larger, bigger question of what would you do with an extra you know let's say a million dollars a year, I'd have to actually specifically think about that. Okay.

Thank you. And thanks again for what you do.

Thank you. Chairman.

I'm going to also ask about sidewalks. I don't want to shock you. But actually I'm going start with roads, which is to say I think the question that the city manager has proffered before about roads and sewers and a lot of different things public works does is, are we keeping up? And looking at your performance benchmarks, which, by the way, what you did with getting rid of that number of potholes performance benchmark, like, take that bottle and give it to all the other department directors because that is the mindset that we need on these performance metrics. The number of potholes repaired is not a good performance metric, and so huge kudos on that.

What I'm trying to get at, is I think we are keeping up. But I think we also have a big backlog. And tell me if I'm wrong, but my understanding is we do have a backlog on some of these. We're now we're completing repairs for things like streets and and sewers at the rate that they degrade. But given that past administrations didn't do that, it seems like we're not necessarily gonna catch up. We're keeping up but we're not catching up is my sense. Does that feel accurate to you all?

I'll just give you a first crack at that. I have my opinions. I'll let Betsy go first.

And if we're not keeping up or we are catching up, let me know.

I don't think we're keeping up. I don't yeah. I think our infrastructure is is aging, and we haven't been able to keep up for many years. I think we do what we can with the staff and the resources that we have, and we ensure safety and mitigate as much risk as we possibly can. But I I think we're getting better in terms of our asset management program and really keeping an eye towards, you know, the type of work, when we do it, and how we do it, and as we be as we are getting more improvement in that area to help advise the work that we do do.

But yeah I think we could use more resources absolutely to really fully catch up.

Well that's right. Are things getting objectively demonstrably worse in, you know, let's take infrastructure right, roads, road condition, sewer condition, water main condition. I can't say that they are. I really feel like we're keeping up or very close to just sort of treading water. That's just my opinion.

And it's a little bit hard, it's kind of like hey we had a cold winter or a hot summer, the climate is changing. I don't know, there's noise. Some years you have a lot of water main breaks, other years you have less. You have to evaluate those trends over a long period of time to really see an underlying signal. So it's a little bit of a subjective opinion. But I think we're keeping up. What would it take catch up if we wanted an improved level of service? Yeah, it's going to take more people, more money in each of these areas.

Miss Buckland? Vicki Buckland, acting city manager. I'll jump in about a couple of things which these guys might cringe at but I'll watch their faces to see. I think there are a couple of things that for me stand out when we're talking about this particular space. One is that in a perfect world we would have very regular condition assessments that we could keep an eye on as far as are we keeping up, right?

Because as indicated, depending upon the weather in any given year and other factors, one year may be harder on our infrastructure than another. And a regular set of condition assessments would help us keep track of that and both prioritize and then give us that sense of you know how are we doing on here's what we expect for a normal distribution of condition assessments if we were keeping up. I think that it's not reasonable for us to assume that we're going to have anything approaching real time condition assessments all the time. Right? Those are gonna be snapshots in time.

But I think that those and public works does do them and I think helps set the agenda for what the priorities are and acts as a little bit of a reality check once those come in in terms of how are we doing. So I think having from a performance perspective, having those conversations a little bit in tandem might for you guys to kind of have a better sense of what they know more intrinsically because they're used to seeing that stuff. And the other thing is that you know the city's been around a while. Have we have not as we've grown over time the build out of infrastructure has not been linear. Right?

We've had periods where there's been stronger growth and all that and so we budget as though this was essentially an even number year after year, but it's not really. Right? There's it's clumpy. The the growth of the city was clumpy and therefore the the refresh of the infrastructure ends up being a little bit

And to make things even more fun, water is a great example. We have plenty of water pipes that were built in 1870, 1880, 1900, 1910, in fantastic condition. They're going to probably give us another twenty or fifty years. We have a lot of water pipes that were built between 1920 and 1950. You know, the quality of materials that were used during that period were not as good.

Those are the ones that are failing. So it's not just the you know the linear growth of the city it's the construction means and methods of a particular period or an era and and those are those are places where we where we have So it's a complicated decision in how you assess condition. Roads is one where we can assess condition pretty well we have a periodic four year assessment and and I can look at that it's hard to aggregate that data but the way I analyze it is how many zeros and twos are out there. And are those zeros and twos on kind of a road that's got 10 houses on it and low traffic, okay that's we can live with that. But if it's kind of a main sort of connector road and we got lots of zeros and twos on connector roads, that's that's a problem.

So that is a little bit more where you can objectively assess and we have those records over enough period of time that you kind of see whether we're getting better or worse.

And DPW has invested in some other technologies with the cameras and things like that to see better into some of the not the surface level infrastructure but the buried infrastructure as well.

Which is why these these metrics here that are inspected are really really important. Liner feet of sewer mains inspected. That's we got we got to keep up on that because that's that's running a camera. And then we get to see what's the condition of that sewer line is and if if we can, if it's in bad shape, we'd line it which is much quicker and less disruptive than having to dig a giant trench and replace that.

Yeah so as far as you know, I still think the underlying question is the right question, are we keeping up? It's just that getting at that answer is in a perfect world we'd have all of this information at our fingertips but that's not the world we live in. And so we we use these proxies to try to to get a better feel. I didn't see you guys cringe through any of that so I'm super happy.

So the proxies are, you know, water main breaks or something but those are highly variable. Sure problems are a little bit more consistent and of course they depend on resident behavior a little bit but the condition of our pipes is important there too. So when we have sewer overflows, sewage coming out of a manhole, that is something a trend we can we can readily see. And the sewer backups into people's basements and things like that, which are a little bit less visible to the public but that's another indicator of how we're doing on our on our overall like on a long term capital maintenance but also how we're doing on the operating side of of maintaining those lines on a day to day basis.

What what I think from all of this is that you guys have put a lot of thought into it and you have something of a plan. You have the ability to let us know whether we are just keeping up, we're not keeping up, or we're keeping up and catching up. At some point, I would love to have more visibility on that, but I from what we're hearing today, I can trust that, like, you guys are working on that. And the last thing I'll say on that topic is just, you said real time. We're not gonna get real time. I actually was just reading the other day about how Waymo's are giving cities real time road condition data, which is really cool to think about that every time they hit a pothole, they're letting that San Francisco Department of Public Works know, which is fascinating.

There's some really interesting technology coming out.

AI stuff coming out. Like, I'm I'm sure you get a bunch of solicitations. I occasionally get cold calls as well that of of new stuff that's out there. So, yeah, there is interesting stuff coming down the pike.

Yeah. Then you can imagine just even like aerial photography of it. Okay. To transition, I wanna talk a bit about salaries and benefits. My big top line concern here is that on you know, as you were talking about earlier, there's almost always you underspend in salaries and benefits. Everybody kinda does. But engineering construction budget salaries and benefits is a good 20 ish percent above what was budgeted from what I'm looking at. What caused that this year?

Mapping of salaries was inaccurate.

Mapping? How do

you mean? That's maybe not the word that these folks use, but a given position maybe supposed to be charged to water and sewer, but got charged against general. So you would have been looking probably at the general fund. So it appropriate charges from the position that was budgeted one way, but charged a different way. Something we control in the department.

Got it. So it should, if everything were reflected accurately, you would be within your

But well under. When you see the final numbers, it will be well under. Gotcha. Finance is correcting that.

Mr. Palakar or Mr. Johnson you guys want to weigh out on this? Sure. Yeah. So the E and C budget summary, the FY twenty six projected number is significantly higher than the FY twenty six budget. And I'm just trying to understand why that is.

Darren Johnson, senior budget analyst. So yes, what director Byr was stating in regards to the mapping. So when new positions are created in the system, they're added as just e n c or d p w. And it automatically gets routed to e n c. So what happens is some of the positions need to be split. Let's say e n c or they need to be fifty fifty water sewer. So that's what we're doing as far as like the workforce plan now. So what you see in proposed for '27, that should be reflective of the adjustments that were made. Got it. So we should be good to not go over the budget based upon what the mapping is is happening.

So when we submit these new mappings, it should balance out. And if we need to, you know, move the charges to the correct division, we can do that as well. Okay.

That makes total sense. I appreciate it. This is just a note, not a question. But to mister Palakol, I think DPW is one of the areas where we should look at what their regular vacancy savings are and have a line item for that. I mean, we're talking yesterday on the phone that can't necessarily know an HR where they have eight people, but DPW with six thirty in the general fund, six sixty in the general fund, there should be a clear enough trend that we could put that in.

And so for, I'm thinking for DPW, for maybe planning and zoning, maybe ADOT, but certainly police and fire, that's something that we should have reflected in the budget.

Noted. Yeah. Thank you.

Thanks. I'm gonna talk a little bit about snow also and apologies if it makes you twitch. But I'm not I'm not here

to You're retraumatizing me, by the way. Just to be just to be clear.

I'm not here to complain about the the results, but I do wanna look at the money. Our snow budget is we're we're way over budget, which makes sense because we had way more of a snowstorm than we would expect. But what I don't understand is why did nobody ever come to us about that? Why like, how can we be $600,000 over budget on a $170,000 budget and it doesn't require any kind of fund transfer or supplemental appropriation or anything like that? And this is, that's probably less to you throwing

Not me. Yeah.

Aaron Johnson, senior budget analyst. So we will be coming to you. It happens. We do it fourth quarter transfer. The reason we're doing it as a fourth quarter transfer because invoices were still coming in. We still have processed invoice within invoices within, like, the last month or so. So we wanted to make sure we had everything finalized before we came to you guys to make the transfer. So we will be coming to the committee with a transfer. It's just we wanted to wait until everything's settled.

Yeah. And is there some kind of requirement in code about, essentially, like, far outside of the budget the mayor can go on something, the city manager can go on something before needing council approval? Yeah.

Yeah. Limit is $25,000 and can't move between funds. So anything that's a movement between funds outright has to come to counsel and I can't do supplementals. So if it hasn't initially been appropriated, I can't do that on my own. So you guys see anything that's that's new money, or money that's moving between funds but inside a fund up to $25,000, city manager can can approve.

And is there a timeline by which that has to by which something that's above that, above that $25,000 threshold has to come to us?

No, there's not a timeline in code. The timeline ends up being more driven by practicality. In my experience and you guys may have a different perspective but the city keeps Munis fairly locked down in terms of your ability to overspend individual lines so the city has a pretty high incentive to bring things in reasonably timely manner for some things, for most things frankly. I don't know if you've a different answer.

Darren Johnson, senior budget analyst. So the reason we like to wait is because we rather try to cover it in house. So we try to wait till we get closer to the fourth quarter so we could take a look at salary savings or we could take a look at areas who haven't spent funding that was allocated for certain things and we pull from those pots versus coming to you guys and say, hey, we want to use contingency. So if we don't need to use contingency, we rather pull the funding that we have that was allocated. If we have vacant positions, we know we're going to have some salary savings. So we rather pull from the funding internally versus coming to you guys and moving funding from different pots. So that's why we wait until fourth quarter.

Yeah. I appreciate all that. I just I have a little bit of a concern that we could have a situation where Yeah. We're gonna find some way to pay for snow removal. We all agree snow removal is a great thing. Like, we needed it. But in a different circumstance, having a $170,000 budgeted and the administration spending $800,000 could be a real problem for something else that we wouldn't necessarily want to wait three, four months to have the council say, no, you can't do that. So I don't know. That's not a question. Just a complaint.

There is a disaster fund or kind of a rainy day fund set up almost for this reason.

It's contingency. Yeah. Yeah. For It's contingency. Yeah.

Yeah.

You look like you have something to say on this. Do you wanna you wanna Can you wait

till till I talk or do you wanna stay on the same subject?

This is Same subject on snow. Yeah. Yeah. So are you talking about snow?

Yeah.

Okay. Go.

So I think it's really important that the director of public works in the city had the authorities to spend the money in what state of emergency or whatever it was. We wouldn't want to cause a delay. But I do share, I think, the sentiment here that we should have a process that makes that automatic that's different than the director of public works deciding he wants to spend $500,000 on something different that is not an emergency. So this is what we talked about in the after action is is does the director of public works have the and the mayor have and the city manager have the authorities to spend to commit resources in times of crisis. And it seems to me that there should be a difference between times of crisis when money has to be spent without coming to the city council and normal times when this when the director of public works halfway through the year says, I I we didn't budget for this, but we need to do this.

It's not an emergency. I wanna come to the finance committee and the and the city council to move money. And so I don't know if that's a problem that gets solved today, but but it seems to me like we should look at legislation that that that doesn't question that that literally gives the director of public works, the city manager, and the mayor the authorities in times of crisis to spend money that's different than in routine times.

But but speaking of the routine times, and just from from my perspective, I can't do that. I can't. I have no mechanism to overspend any account. I think up to $25,000, city manager can approve that. That's such a That's your control. That's the authority you've given the city manager is he or she can approve up to $25,000 via funds transfer and inform counsel afterwards or whatever. So I'm already pretty constrained. I can't do it. Right? I I have what's in my budget and to spend a penny over, I I don't have the ability to do that.

But you did it during the snowstorm, I hope.

Different. Right.

But that that's my question.

But I think because for instance in snow, we just told contractors go out and do stuff and send us a bill. We didn't actually have to follow the normal process of I'm gonna write you a purchase order for $50,000 as soon as that purchase order hits the system, that money is gone. And if I don't have $50,000 in that account, can't write that purchase order. The system won't let me. So unless we're using these emergency authorities to authorize work that we haven't even written a purchase order for, that I don't have that ability.

And and that's my my question is, has the city council given you the financial tools in order that nobody second guesses you up to a threshold that you call the contractors and said go to work. You called a couple dump trucks. You you did this.

Right. We ordered salt, it it's it's fine. Right. And then and then we reconciled the accounting later. Right.

So

That's the only example that I can think of where that's that where that is allowed. Hurricanes. Sure. Tornadoes, natural disasters. I don't know what the policy is that that allowed me to do that. We just did it because it's what we always do.

We need to look into that.

Yeah. I I actually just made a note. I've got a running list of things to have hearings on when we have a new finance director and, we're done with the budget. But what I think I'm hearing from you is if you have emergency procurement authorities, you essentially have emergency spending authorities. Right.

And that that explains it to me. But, yeah, we do do need a bigger discussion on that. But thank you for indulging me in this this far. Still on snow, we're I totally understand, again, we should not be budgeting as much for FY '27 as we spent in FY '26. But why are we budgeting less in FY '27 than we budgeted for in FY '26?

Across contractual services and supplies for sale. Or as always, feel free to tell me if I'm wrong and I'm looking at the wrong numbers.

I'm asking Darren for help on

this one. Can you repeat the question, please?

Sure. I'll I'll try to repeat it. Year over year budget 2020 for snow, 2026 to 2027, contractual services and supplies is their decrease. One reason could be, and I know this to be true, some brine equipment, right?

That was Capital Outlay.

Capital Outlay.

Yeah. So we we we bought brine tanks, brine trucks, that kind of thing.

So, okay. On the supplies and other, I I just dug into a little bit and it actually looks like it's because we are not you're you're not getting allocated for fuel oil anymore. So, I guess that's going through central services now. Yeah, Vicky's nodding her head. And then, yeah, it looks like we're decreasing contract services. So, any

explanation, mister Johnson? Darren Johnson. As Bert stated, there was 46,000 that was capital outlay. That was for the large brine tanks. It was for something else that had to do with brine. But that was 46,010 thousand that was moved to ITS. So that's like 56,000 right there.

Got it. So that the 10,000 going to ITS, that's what I was trying to search out. Okay. That answers my question, I think. Yeah. Cool. Makes perfect sense. Can you tell me any more about this $125,000 we have gone for traffic engineering and traffic studies? Do we already know where that's going to? This is under engineering constructions contract services. It's listed for us as traffic engineering support studies and improvements. I mean, I guess that's Jeff's authority.

It's that may be just a note that's in the budget documents that's not quite accurate. That's all contractual services for the engineering department. Any consultants we need to use that isn't associated with a capital project falls under that. So yes it tends to be what we typically are more interested in is traffic safety. That's what it would tend to use that money for.

I'm thinking like that stop sign we were dealing with on College Ave and St. John. So we had to pay somebody to do a traffic study like that's the kind of thing that it popped up and you'd have to

If we were going to pay somebody to do the engineering work for that, which we didn't, we we did that in house, We could use that money. But the way we actually installed that work was we used the traffic safety improvements capital project. Our other choice there is the service like the streets operating budget, which we we would have been another choice, but that's a very limited budget and it's always spent.

Yes. I'll save a conversation for that for Thursday. The streets the general streets or no. You're saying operating, not capital.

Correct. So, so, straight rate, we have people that are out, we repair streets using our operating budget, using our crews, and they can repair streets or maybe even they might have a very small contractual services amount in streets. We would we usually go through that. So when it comes to traffic safety things, I typically go and use the traffic safety capital project.

So you were just saying Street's budget is very small. When I look at this, I see $4,300,000 of Street's operating budget. That doesn't seem right to me. Is what's going on there maybe that what the heck could be going on there? Street's budget summary is listed for us at $4.3000000 dollars in operating budget.

That can't Lot lot of salaries, obviously.

Yeah. Yeah. But we're not really spending $3,000,000 a year on salaries for streets, are we? I mean, if we are, that's I'm kind of impressed but yes?

Doesn't sound like a particularly strange number to me. Think of that group as being 25, 30 people, average salary 100,000, if you, you know, salaries and benefits, sure. Yeah, you if you. But you know, if I get an opinion, that sounds about right.

Yeah, if you look up in the staffing summary, the streets team has about what Burr said in terms of there's 14 equipment operator ones, three equipment operator twos, two equipment threes, and then six public works maintenance worker ones, and then an assortment of other folks and some temporary laborers as well.

Got it. Okay. I don't mean to belabor this point. I I think I just got thrown off when you said it was a small budget and

It's like the things that are kinda not fixed costs. It's pretty small. It's got relatively.

Mister Johnson, you have something to add?

Darren Johnson, senior budget analyst. No. I was just about to say projected foot streets is like 2,900,000 projected for '26. And if we look at actuals for '25 is around 28. 2,800,000. So Thank you.

I have a couple questions about the water fund. You mind if I ask those now? Water? Water fund.

Yeah. Sure.

Any particular reason why we're switching some people from water supply and treatment facility over to water distribution? Looks like we're switching a public works maintenance worker into there and a utility mechanic into there.

Interesting. I'll defer to finance. Maybe Tracy seems like she knows. We're not decreasing the staff at the plant,

I I'm can tell you just curious why we're moving. On our spreadsheet it looks like we're moving from one part of it to another part.

Tracy Brown, Public Works Analysts, they were actually put into the wrong last budget. They were put placed into the wrong budget. They were placed in water plant they should have been placed in water distribution so we are correcting it part of the correction we did with the

One of last years was enhancements was a couple of folks to work in water distribution but I guess when the budget actually got finalized, they went to the wrong place. Correct. Thank you very much.

A couple other just little ones. The water plant operation system update, what is that? Seems like a good thing, but what is it?

It's software. It's the software that runs our industrial controls.

And so we're not we're getting a whole new software for that?

It's at the end of its life. Like, kinda some twenty year old program that's no longer supported by any way. Doesn't run on, you know, Windows 10, that kind of thing.

Yeah. I'm not looking for things to get rid of. I will actually disagree with Pip Moyer over here and quote the late the not late. Jeez. The former alderman from Ward 8 who would tell me that the two most important things we do are clean water in and dirty water out. So that's, you know, trash and what do you say? Trash and snow? Pretty important also. Last thing, just gonna ask you about is the vertical assessment management project for our sewage pump stations. What is oh, am I sorry? I was just curious what that is, but if it if you don't know off the top of your head, you could definitely get back to me.

I don't even know, to be honest.

If you want details, I'll probably have to get back to you, but it's, an assessment of our pump stations to, figure out what needs to be fixed, replaced, and inventoried to, address those things.

Oh, just are they are they working at the same kind of thing we're I talking

think it must be just another little piece of the asset management program. A pump station is a tank, it kind of stores you know our wastewater and then the pumps pump it to the next place on its way to the treatment plant.

It's kind of what Vicki stated, it's the condition assessment. It's assessing the conditions of each pumping station. Right. The

last thing I have for you is just a congratulations. One of the things that stood out to me in your accomplishments was consolidating fire hydrant data sets. And that's like super not sexy, and I'm sure nobody in the public is even going to be listening to me talk about this much less know that it happened. But that is the kind of thing that I'm sure makes us all more efficient, and I'm really happy when I see stuff like that where we're using technology to better manage our public infrastructure. So, thank you. Any last any questions from either my colleagues? We got a little more time? We're good? Alright. Well, we could wrap up a little bit early.

I thought we were gonna spend a bunch of extra time on DPW, but no. We don't we don't have anything. We can't do this fund transfer. Kailin, let me know. It's not she didn't put it on the agenda. So I think we're ready for a motion to adjourn.

So moved. Second.

All those in favor, please say aye. Aye. Meeting adjourned.