City Council - workshop

Go ahead and get started. I just want to let everyone know that on July 4th, this building got hit by lightnings and it took all of our microphones and what have you out. So we are going to try to project ourselves, but you might want to move closer to be sure that you hear everything we say. We do have a piece of equipment that is going to pick up our voices for the live stream. So just so you know that. Okay. Okay. First thing we're going to do is approval of the June 2nd minutes. Do you have a motion in the second place? So moved. Second. I will abstain because I was not here. Okay. Thank you. All right. All in favor of approving the minutes from June 2nd, say aye. Aye. Opposed, nay. June 2nd. Yes. Thank you. We are now going to turn it over to our attorney to recommend a municipal court prosecuting attorney.

Yes, that's right. Thank you, Mayor. So the city attorney, their office appoints the prosecuting attorney for the municipal court. Um, pursuant to both the charter and the or code of ordinances. Um, and I have recommended to the cap and then it's approved by the council. So I have recommended one of my colleagues, uh, Malia fill a heat, uh, to serve in that position. Um, she has been working with me on city matters for, um, the last year she's been training for the prosecuting attorney position for the last several months. Our current prosecuting attorney is going to spend more time with his family. His wife is about to have a baby. And so we're- As are you. As am I, but I'll still be. Okay. I'm not going anywhere. So I'm requesting that the council approve Malia as the next prosecuting attorney for the city of Kirkwood pursuant to the code of charters. Thank you. Yes. Yes. I like the fact that she went to St. Louis University Law School. Yes, she is from St. Louis County and has led care homes before.

Questions of anyone? Not being as familiar with our charter or ordinances, I would prefer to see us have more diversity amongst our legal team. And that would be my opinion. Obviously, if our charter says our city attorney selects and brings it to us, there's nothing I can do about this, but I would like to see more diversity. Not diversity as in that, diversity as in a different law firm, a different organization, a different perspective, a different point of view. That's the diversity I'm referring to.

Anybody else?

So just ask Jackie, Jackie, whether you need is this vote in here or is it legislation? You can vote in here. OK. Then we will need a motion and a second.

OK. Do we have a motion? Make a motion. I'll second that. OK, very good. Any more conversation? OK. All in favor say aye. Aye. Opposed, nay. Nay. Okay, we are now going to be doing a update on future water rates. And Chris, I think you're going to help with that.

Good evening. Does everybody hear me? Restart it. Oh.

I don't know if I can change that.

Well, it sounds better, actually.

Maybe I need to put it on this microphone.

right there. All right. Good evening. We're going to talk about the update And so the main reason for that was to get an updated list of primary water mains to do for the next five years. Um, so we did it also a risk assessment and, uh, throughout the current water system, that was a desktop, um, desktop review, uh, based on the number of water main breaks, uh, the age of the pipe, um, the, uh, and also the material of the pipe. So, um, we have this. Our system is cast iron. So cast iron is prone to leakage throughout the system, but we do not, we do have main breaks because of that, but that is not the only reason why we have main breaks. It can be due to soil conditions can cause main breaks and also the type of water main that is the master plan program where it has a list of water made projects for the next five years. And it also recommended a 1.5% replacement rate. It looked at several levels of replacement rate. Other levels was at 2.5%. Kirkwood size and what our citizens could take and what we think we can handle. The study concluded that a 1.5% replacement weight was the correct percentage going forward. So as you can see, highlighted here is the 1.5%, which represents 2.2 miles of water bank with a total of 148 miles in our total system. 80% of that or 111 miles is cast iron. I've got some figures here. So I want to go over how we base our replacement costs. So we have $450 per square foot. I'm sorry. these early projects um park woods and north northland southland those are on the lower end these projects are in relatively low trafficking areas uh compared with um and uh those are That has a factor in it as well, because every time we go and replace the main, we make a service transfer over to the main. To go over a little bit of what waterline sizes we have throughout the city, from the large amount of service lines and then larger water user that is broken down by meter size. So just to clarify, our rates do not differentiate between commercial, residential, however they are, we have the ability to do so, but the rates, the meter size. So you can see down here that they may have a two or three inch meter for a commercial or even up to six inch meter. And that's what they do that base price. So another thing It is a mandate that we have a program by the EPA and Missouri DNR to eliminate lead service clients. And they mandated by 2037 that these be all limited. So I have a listing of all the, we have a total of 10,258 service lines that serve Kirkwood We send out annual letters to residents to try to either invite us into their home to see if we can make an inspection. We also have an online map that shows, and you can get your phone out. So that was just some ancillary information that I wanted to put out. And now we'll talk about rates. And so as we said in the master plan, it's a one and a half percent main replacement. That's what we're striving for. And the financial, next slide. I know it's a busy slide, and if there's any questions we can clarify, but on the F-2027, which is your most left column there, that's our current fiscal year. As of April 1, 2026, there was a rate increase of 5%. That's already been completed. That's shown in our rate revenue. This is a first pass through to the council. We are open to different rates. If the council did wish to decrease that 8.5, we could spread that over two years. So it's not a large increase. So this is a, I'm gonna try to do a big picture. So we purchase all of our water from Mr. American and we distribute it. So we do not treat any water. We only distribute our water. So the big takeaway from this is to maintain a reserve of at least $2 million. And so we've built up enough units. maintaining that reserve of $2 million. I'm going to go back to this if there's any questions. This slide shows what a Kirkwood resident pays currently, which is in that first upper left corner, a total of $64.63. Based on what we know today, if we were under Missouri, The main thing that I want to say that on January, July 1st, 2026, Missouri Public Library posted a rate increase, an additional average $26 per month. That's a 30% increase to the Missouri Public Service Commission. You can see in FY28, They also passed a water infrastructure surcharge fee on March 1st of 2026. And so that did add sun on his body. A dollar and a half. $1.51. Sorry. The privacy fee is a fee that goes through Missouri DNR. And then the service line repair fund, that is if you have a broken line, say, by 100% of the costs. So every resident is charged a dollar on their bill.

Quick question. Where's the tax that's paid back to Kirkwood? Don't they have, they're paying a tax back to Kirkwood on the Missouri American bill?

No.

from Ameren and Missouri American. Those bills have a tax that comes back to Kirkwood. That's what I'm asking. What is that? Because that's a part of Missouri Ameren's bill. Missouri American's bill has

The gross receipts tax is absolutely reactive.

Yes, it's some kind of, yes. You mean the bill from us purchasing the water? No, no, no, no, no, no, no, no, no. The residents who have Missouri American have a bill that includes all these things, that also includes a tax they pay to Missouri American that comes back to Kirkbrook.

Just like Cameron. Right, right. Spider.

Right, spider. How many Missouri American homes do we have? Right. Not too many, right?

All of Meacham. All of Meacham is serviced by Reserve American. And then there's only a few sprinkled throughout Perkwood, I would say, at best.

So are we collecting that fee?

Grocery seats tax, whatever, utility tax. There's something on there. I don't know what it's called.

It's like a 6% tax. Yes. Yes.

I'm just trying to account for that in all of these negotiations and spreadsheets to make sure, again, this is our fifth version of this, and I would like to have consistent information to look at. But that's part of a Missouri American bill.

It's part of a Missouri American bill. I don't know how that bill is. Do they pass on that 69%? or 6% to the customer.

So is that- If the customer pays that, then that goes back to the city. I think it's my understanding that you get that back because that's what they pay back in order to use the right-of-way within your cities to provide their services.

The question is, looking at this bill here, the one in the middle, for example, Is that 6% included in there somewhere, the base fee, the water consumption, the surcharge, the privacy fee, or the service? Is that 6% in there somewhere?

I don't think so. I didn't ask about that. I don't either.

that residents can see.

And part of that is to know what the revenue is. Again, that's going to flip to revenue for the city and to pull that out as city revenue that we're getting.

So are you suggesting maybe that the numbers you have, let's use the $56.74 is not correct. It should be $56.74 plus 6%.

That's what I'm trying to say. It's not for all customers, but there is a portion that it does. So, again, I don't know how to capture that revenue for the city that Missouri American customers are paying.

That's a separate issue.

But that is part of the bill. Can we find out?

Yeah.

Okay.

That's something we can pull up there and see how many of those apply.

Right. Okay. Thank you.

Well, it's only fair to make sure that we're comparing apples to apples. Right, right.

Okay, I wanted to clarify that this is for what, if you have a three-quarter inch meter, this represents 5,366 carpet residents. So this is, there's the next spreadsheet, And so the middle is just that 30%, if the PSC approves that 30%. The last bill there shown at the bottom of the page is based on historical approvals from the PSC that they can get between 10 and 12%. So that last series of numbers is based on the 10%, 10.8% increase. And they're only allowed to go to PSC every other year for ratings.

And Missouri Americans' replacement rate, I think we understand from the PSC that it's 0.8%.

yeah so that is uh it's very each each year however our dealings with and our um meetings with the psc they've averaged about 0.8 percent so the numbers you see here um there's no assurance or guarantee that the water is going to replace our mains the same rate as at 1.5 percent

I'll explain why our base fee is higher than Missouri American and why their water consumption is higher. So I think one of the things that stood out to me is the ratios are different. And then we have the infrastructure renewal fee that seems to be separated out. And how does that work, and where are we seeing that line item revenue? Like, is that broken out in your budget that we set that limit aside for a roofing structure?

So I'll just infer the question.

Lots of questions. That's okay.

The first question, I'll try to do my best. But the first question, the variability and the base fee. So for a three-quarter-inch meter, we charge $9. They, it's a considerable difference. You can see it's eight, you know, eight, just over $8 more that permanent watered rather than Zirpain. And so on the next slide, if you have a one-inch meter, it jumps considerably for Reserve American. It goes up to $20.33. So on a one inch meter which has which would affect 1660 curb residents. They would now be paying. Yeah, $9 more up to $20.30 on that base. I can't really explain why why that difference is. I know prior to. for rate payers, and that basically, I believe, was around $17 or $18, and then they lowered it to $11. We'll do the volume.

It's a three-quarter meter moose, but far less than a one-inch one.

So that's probably a difference there. Why? Because Missouri-America has to produce more water.

Did I answer your first question? I think so. Okay. All right. So on the water consumption fee, so Missouri Rainbow Water does not break out their any type of infrastructure fee. They do have the water infrastructure surging fee that was added. So they're at $41 on the previous slide. They're at $41.48 and $43, actually $44, if you combine those. But the infrastructure renewal fee, that is so willing to try to account for it. several years ago in order to get to our 1.5%. And so our water consumption, so when we raised rates about two years ago, we left the base rate the same and we raised the water consumption and the infrastructure renewal fee. And so to try and get more funds for water. Does that answer your question too?

Yeah.

I reserve the right to ask if I can do it.

Yes, thanks for that.

I need the bunny ears.

Another term is sick. for the council tonight. So I am open to questions at this point.

Chris, historically, in the past, have we always been under Missouri American? Yes.

Yes.

And that is why we've always kept our infrastructure so that we could be a benefit, show the benefit to our residents.

You know, we should, you know, we're a local owned water system. However, you know, we've got this report, we've got, you know, a lot of data that is supporting that we need to invest more rather than, you know, putting it in an account and saving it. So the water is a very healthy department right now. You can see on my earlier slide, our cash balance is doing quite well. And so we're in a good position to start our rates and this 1.5%. And to get us to a point where we're reducing our water loss, replacing mains,

But in the past, we were transferring funds out of water to use for other projects, streets, etc. And that put us behind in the infrastructure upgrade. Am I saying that correctly? Did you say that it put us behind?

Yeah, so there was a transfer coming out of water. And you can look at it to say that we could have been putting that to replace four mains. But that goes to the roads that we patch and make holes in. So there's a benefit for transferring that money, because when we patch a water main after the water main repair, it's a 10 by 10 cut. So there is benefits in making that transfer, funding streets. I understand the situation.

And how closely do you work with our street department with regards to main replacements, any work that you've got to do that would affect streets?

Yeah, we work really closely. with streets and our engineering department to combine water and street projects together. one after the other. And so also we've taken most of our water repairs or street restoration out of contract and taken those to the street department. We're doing all of those in-house. We're doing those much more time efficient and less cost than an outside contractor. Mayor Mrakas, And that was as as about April one was very.

Mayor Mrakas, Fair. Mayor Mrakas, So just kind of continuing was there an amount we transferred from water department regularly. and then it started what it ended at uh so it ended at seven hundred ten thousand dollars per year and then water department transfers always went to streets and supporting street whether it was repairing or spider cracks or just redoing streets do you know if you always transferred to streets to my knowledge yes the best you know none of your money went to general funds That's correct. And the best of your knowledge, your money never went to KPAC or to help buy Morazic.

Yes.

All right. Thank you.

Sheila. So, Chris, do you know there's a line on the back, let's go back a slide, I think, on here. The COTS funding that you're showing, $2 million this year, $600,000 next year. Is that an anticipated another cops that we're looking at? Was that?

This is an existing cops that was from 2024.

That's part of the 2024 cops. OK, and so part of this projection is to not borrow any money at all.

Yes, we did write scenarios about borrowing other money and we.

but that was not landing because it was more expensive in the long run.

Yes. Okay. So yeah, there's that service you have to pay over a long period of time. And so, uh, current debt, we don't want to borrow anymore.

Okay. So what we're looking at is versus borrowing and getting ourselves more in debt, we would have to. burdens and raise more money some other way in order to pay for these infrastructure. If we didn't do a rate increase, we did no rate increase in the future. What pace do you anticipate you would be at? Did you run the scenarios? Like if you did no rate increase after the one we just did, sure. Do we know like, like over the next, because if I look at the debt service and when that starts to flow out, right. So that was kind of where I was like, oh, where do you pick up some extra money? Yeah.

Yeah. And you can see that in FY 31, our dent service falls off.

Right.

Considerably. I did a simply run scenario of no rate increases. We could definitely do that. My feeling is the percentage, if you're asking what the percentage of water mean, we could replace under that scenario. But it's basically a falling number over the next three years. you know, I could, it comes down to, you know, then I'm back down to 0.6 and 0.8 percent replacement.

Just asking some clarified questions to understand. The other thing with regards to this, just to make sure I understand, you mentioned that, you know, is it that I'm trying to understand the pipe size, right, and how that impacts things. So, like, can you, does that equate to the square foot of the house? Like, maybe Paul, you can explain this to me, because I'm like, I don't understand.

It's a fixture load. So, in St. Louis County, there's majority 65 PSI and in that range, correct?

Probably a little lower.

Okay. So what you do is when you do that, when you lower the pressure,

Anybody else?

Do you have any?

I have a bunch, so I'll try not to take up the next hour. So this is the fifth version in the last six months, correct? I've had four or five, so we seem to kind of keep tweaking it. Yeah, I would say that four of those were different.

That's why we had five different versions.

So to say this hasn't been easy and we keep tweaking it to try to make numbers work or sense or whatever. Trying to get accurate numbers. Yeah, right. Which tells me getting accurate numbers is probably difficult because some of it's concrete and some of it's projection. So you're never going to be perfectly accurate. So let me focus on your fiscal year, 27 numbers. You have your operational expenses as $5.8 million. The budget book has it as $13 million. What's the difference between what you're reflecting on this first page and what's in the budget book? What does that reflect?

You're only talking operation from the budget book.

I was on the revenue page. Operation, I think, was $12 million. If you take five out of capital, we still have about $7 million. But you've got here five. I would just say that it came in as operation. But the $12.6 is the total expenditures in our budget book. minus the 5.1 of capital gives us about a 7.1. I just want to know what else is left out of this 5.8 number. That would be my question. So that seems low, and then we start jumping up. So again, wanting to know what those operational expenditures are accounting for. The other thing is what... What is the loss in electric being covered by this fiscal year 27 budget? Where is that reflected? Because your ending balance has got some restrictions in that. And what is that total restricted ending balance? And again, knowing that we got 15 plus million over years that are going to have to be covered by some of the funds, what What is being restricted? I don't see that ending balance of $6 million as something that you have access to right now. I don't know. Darren, do you know that answer?

I don't know that answer.

Okay. So that's a question that I continue to have.

One question is the beginning balance you see there, $5.2 million, that's the amount of cash that's in the water department.

That's what you started with this year. Yeah. So I'm looking at your ending balance. I just want to, I'm going to the bottom of this. So what in that is going to be restricted or unrestricted is my question. Because there's, that it's not all unrestricted cash to be rolling over. Because then you show that same 6 million as your beginning balance of 28, which may not be your beginning balance of 28 if there's several million that's hovering above. the losses in electric. So I- Yes.

These numbers do not cover any covering losses in the water, in the electric.

In the electric. Okay. So those numbers are a little squishy for me.

Well, this is strictly just looking at the water department standalone. And that number you're looking for is going to change, could change in a year depending on what different councils decide to do. But if we're deciding... Don't knock holes in something he has already done.

First of all, it's a good question. Thank you. I'm just trying to get clarification so that we know, because eventually we may have the conversation about what's it going to take to continue, or do we explore a sale? So I want information that helps me make that decision, and I want... That's a different discussion.

We're just looking

Right. And you cannot compare water rates without comparing what our residents would be paying if we weren't managing the budget. If he's going to have costs on here of what Missouri American water costs, why can we not discuss what it would be? That's what we're discussing. We're comparing it to another entity.

We've got to be careful how far you go down that line because it's not on the agenda.

You have Missouri minimum water rates on the presentation given to us by staff. It is part of the discussion.

I'm asking about financial.

I was looking at the budget book compared to what he's got. He pulled the debt service out. The budget book under expense has the debt service and he's got a separate one for it. So yeah, it makes it harder to understand your 11... Yes. Because the $11,882,000 that's in the operating budget book here is divided out in your spreadsheet.

Yes. And the reason why that is is because we know exactly what that debt service is over the 10-year period. Those operational expenses, I have a 4% escalation factor in that, and that's what I'm projecting, and that's an asset for the cost of water. Is that what you're talking about? That's all operational expenses.

I will try to stay on target with asking agenda questions that I still have more. And if you want to object, if Jackie would like to object, let me know. I'll play legal law court reporter. You stay. Have fun. OK. So that, well, I won't go to that one because that will stir some conversation. Water Worth in 2023 did a water rate study that recommended that we have an unrestricted reserves, 75% of operational expenses, which depending on how you interpret that operational expense line could be upwards of potentially 5 million or more. They also recommended 3 million of reserves because our water mains were so old, we had to prepare for emergencies. So the 2 million of reserves that I think was calculated is way understated. Now we have water who are saying one thing, you have, you know, CMT saying, or REF TALIS say one thing. We have our citizen finance committee that has recommended, I believe it's 100%. So we have our own internal policies, but then we have consultant recommendations. And again, I just find that a target of a 2 million cash reserves given the age of our system is underestimated. I think that is a low ball. reserve to target.

So I don't expect that you will. How did you get to that, Chris? Can you tell us that?

So grant analysis is our latest consultant that we have a great analysis done and that Right.

And it's again, it's a consultant. We have our citizen finance committee. We've had policies that this previous councils have agreed to. We've, we've tried to get those updated. I, I feel more comfortable with our citizen finance group, but that's my own personal.

Are they, do they know water? Yes. Tell us a water.

Perhaps tell us is a. Perfectional and water rate studies throughout the country.

Well, in our CFC, I know Manny is quite extensively studied on this, and I actually put together a spreadsheet on CFC's report for the last several years, and five out of six years, they made a recommendation that we've not followed through on. So I have a lot of confidence in our own CFC that understands the perfect financial, so I am betting on them. Then let me ask, So again, I think that's under projected. The average cost calculations that you factored in on your second page of your presentation, were you doing the 398 as your average cost, which is a cost plus 10%? So your 450, where does that number come into your spreadsheet as your cost expenses on your water main replacement? And you and I, I've emailed you before just trying to see if you could give me the formula by which you use to get to your replacement numbers. And so this kind of ties to that. If you're using a 450,

times whatever do you have a formula that shows how you got to your numbers yeah so i'll explain it so 450 dollars is the per foot cost per mile it's 2.3 million dollars per mile to replace 1.5 percent of the system i need to replace 2.2 miles of water minimum 2.2 million

So two of the years she calculated were COVID years. Those appear to be pretty consistently low. Without, if you took those out, it really was a 430 average. If you add another 50, again, you know, it all depends on what numbers go into what formula, go into what, I mean, that can pick it up as high as 480. And what I'm, if you add that $50 you added in there. The other thing with this is so you've got a 10% cost adjustment there, and then you also do a compounding inflation on your expenses as well. So you've got additional compounding numbers in there, right? That's correct. Yes. And then just a couple of things. The half-cent sales taxes that was brought up, that years and years ago was put into place and voted on was four streets, sidewalks, and all of that. But over time, that's a capital improvement tax that's covering, was to cover streets and sidewalks, and now lots of fire equipment, other types of thing. It's all the capital. So we didn't always rely on transfers for streets, but that was part of the capital sales improvement tax. And your transfers don't go into a street capital project from the electric and water, did it? I mean, or did it just go in the pool? David might be able to answer that. Into the capital sales tax, and then you all moved it around to whatever needed to be covered.

The funds were not in a dedicated street fund for capital expenses.

They could go with capital expense.

But the portion increase in the street work that's been done over the last few years.

But it didn't go specifically into it. It was into the pool. And then you allocated based on what you needed for capital for each year. Correct. Okay. And then, let's see one other, and then I'll let somebody else talk. No, I had another.

We'll come back to you. Okay, great. Does anybody else have something at all?

So the first one is, what revenue do we get from water that we sell goes back into our general revenue that helps pay for everything at Kirkwood? Are we just maintaining what we have by the rates that we're charging? Where is the benefit other than we're maintaining our own water distributions? What does Kirkwood get?

In this scenario, there's no benefit. There's no revenue. There's no revenue.

We're just making... So there's zero dollars coming to Kirkwood for doing this. We're just maintaining so that we can say that we own our own water company.

At this point, however, future councils can say, I could reduce the investment into the water department. Sure. And put back that transfer back in the place.

Great. And that's what we did. That was somebody else's idea was that we were supposed to get a dividend back in the day for this. And now we're Rob Peter to pay Paul. So here we are. we're exposing all this liability to the city for a water department, and we don't have our own water. It would be totally different if we were back to when we had our water, and I'm not picking on you. I'm just out here just talking. We had our own water. We got our own water for free out of deep wells that were down in artesian, not artesian wells, they were coming out of an aquifer that was the ruby dew aquifer that's underneath us. Well, that made perfect sense to keep the water, but then previous council, 2005, said we weren't gonna build a new plant because they didn't wanna spend the millions of dollars, but they did spend the million dollars And we've spent many dollars, hundreds of thousands of dollars to do more interconnects throughout Kirkwood so that we would increase our flow and increase our pressure throughout Kirkwood. So my question is, why are we continuing When there's other than that, we can walk around and say we own our own water distribution department, not a water department, because we don't produce our own water. And in 2042, 2043, correct me if I'm wrong, we're going to go back and have to renegotiate with Missouri American Water to whatever rate they want to sell it to us wholesale. and retail. These are all retail numbers that you're showing here based on reselling at retail, just like Missouri Natural Water sells it at retail to their customers. I'm totally trying to wrap my head around the benefit here. We've had all these studies. I've watched them. I've looked at them. $90 million here to do a 10-year deal. I'm looking at the projection out here, the Sorry, I'm on my, over half of our customers are three quarter inch meter services that we have. We got 10,000 and some customers. So the numbers on one inch and larger are minuscule, well, not minuscule, but less than half. And so I'm trying to understand why we want to continue this liability down the road. is going to get cheaper. We've lost nine of our people that were our key people that knew where shutoffs were and stuff like that. So now we're contracting, subcontracting out work that we're having done. If we have a Watermageddon in the future, what are we going to do there? I'm just trying to wrap my head, and I'm one vote, and I understand that, but I'm just trying to wrap my head around What is the benefit other than we walk around town and say, hey, we own our own water department, water distribution.

Where is there a benefit? The 1.5% replacement.

Pardon me?

What about the 1.5% replacement?

And that's not a problem. I have no problem with that.

But isn't that an advantage for us?

Well, not if you sell it. If you sell it, then we take money that somebody would offer. And they've made commitments that they're going to do infrastructure already, one company that we've talked to indirectly. So we don't know where we're going until we actually ask the questions and get the information and bring it back to seven people up here and let us all make a decision on that. That's all I'm asking for. We know where we're at here. And again, back to Gina's point, we've looked at this. changed around, but it still doesn't come down to where is the benefit to the citizen of Kirkwood to not have that liability and what revenue. Well, a liability. Well, you have machinery that you're going to buy, which is in here that we won't have to buy. If there's a federal something that happens, we don't have to make that up anymore. We don't have to do the lead line service replacements. They'll take care of that. Somebody else who would take ownership of our water will be federally required to do all of that. And I understand there's money out there. You talked about there's money out there to do some of that. Yes. And I want that all on the table so everybody knows that there's nothing there. There's $2 million out there that they'll help us out with. Am I correct in that kind of that number?

Yeah.

We'll get $800,000.

$800,000. Okay. So we can take out a loan. 2% and we could, and I have no problem with that if that's what the citizens want to do is take on more debt when we're 100 plus million dollars in debt now i'm just trying. To look at this rationally and the reason that world yeah absolutely and i'm not making light of that interested in making sure.

But it's whatever's in the best interest of our citizens. Absolutely.

That's what they deserve. Absolutely. And that's not the debate I'm having with you. It's not even a debate. I just want to bring up the facts. I want to bring it back to everybody and let everybody here at Consul, that's why we got elected, make the hard choices. Bring it back to Consul. Let's sit and have Darren meet with somebody. What do you? And

Well, you've been meeting with them already, haven't you?

Well, we did here. We all did at City Hall here. He came here. And so, yes. And I'm fine with that. That's just one of the entities that are out there that maybe we could put an RFP out and say, hey, who's interested in buying our water?

Yeah, there's hedge funds that purchase our systems.

Sure. And we can look into all that. But Missouri-America Water is already here. Missouri-America Water completely surrounds us. Missouri-America Water is now selling us water.

They're very aggressive. There must be some dollars in here because they're very aggressive about wanting to buy our system.

I don't know that I would use the term aggressive. I would tell that they're trying to give us options. That the city sees the options that they're wanting to purchase.

Well, you've been talking to them. What are the options?

Well, that's something that we should talk about under contract, I believe, would have Darren meet with them. How about our former water committee restarted back up and we meet with them for the sale part of it. I know that was ugly thing to be brought up, but it was our previous council.

Keep your thoughts going, Paul. Okay. This discussion was for water rates going forward. And in fairness to Chris, I'm not sure if Chris needs to be part of why she should keep it, why she shouldn't keep it in the big picture. I think that's kind of more for this group here.

But I want an open discussion about it, Mark. That's all. I'm okay with that.

And whether that can happen tonight or not, we can have it tonight if our legal counsel is okay.

What do you think? I just confirmed, Jackie, you make a good point that needs to go back on the water rate discussion. Am I correct? We need to go back to that direction because that's what we posted that.

All right. So then along those lines, then I think what to have a separate discussion. Yes. And I would propose that we would do that. I would defer to Jackie on this. In closed session, initially, it's going to be contract discussions. Not to say it's not going to be open at some point. Correct.

Could we not have a conversation about the thought process of it without it being a contract negotiation? Yes. Could we not just have it I mean, a contract means we have to have put out an order in the conversation and I still have some questions on the number.

So, if we're going to stick to the water discussion, I'd like to shut up real quick. So, Chris. Couple things these numbers are quite a bit different than what the water subcommittee got in March. Is that fair? I mean, these. WHAT IS THE, BECAUSE I'M LOOKING AT THE WATER SUBCOMMITTEE NUMBERS FROM MARCH, AND THE PROJECTED BEGINNING BALANCE FOR FISCAL YEAR 27 WAS 1.3 MILLION. I'M ASSUMING WE CARRIED OVER ALL THAT CASH THAT YOU'RE TALKING ABOUT FROM FISCAL YEAR 26 TO 5.8 MILLION. Yes. What's that infusion of cash that we all of a sudden have available to put into the system? And why wasn't it going in previous?

So that is, we didn't spend as much in the last quarter of 26. And then we've been accumulating rate fees to increase that.

So, okay. So council just raised rates 5%. So 30-ish percent over two years is what we looked at the last two. Okay. All right. So that's why we have more cash now suddenly available is because our residents are paying more for their water. Yes. On some of these... The Missouri Americans, they put out a proposal to raise their race in July. The PSC process, my understanding is an 11-month process. So those rates are not going into effect until mid-year next year if they got everything they want. My understanding of previous PSC, excuse me? They never do. Yes, they never get exactly what they're asking for, right? So that middle line to me, we can kind of throw out, because they're not going to get the 30% from the PSC. I'm assuming that's why you left in that third line, which is kind of the average of what they have over the last few years. Yeah, and I would just note that the Water Subcommittee, those rates, you know, it was an average of 10%. Now we're showing a 10.8% increase. On the primacy fee, I don't know if I'm saying that right, primacy, primacy, DNR, according to their website, for connections of the size of Missouri American water, that fee is $3.48 a year. Average that over 12 months, that's $0.29. And we have it now as $1.75. So to me, I have like... that fee wasn't that large in the March numbers. It's now really large in these numbers and I don't find that it's accurate. It's a dollar, you know, 50 almost off. So I'm having a little bit of trouble with some of these projections. The WSRA, I don't know if that's how you pronounce that, the Water Infrastructure Charge. I have, you know, I want to do more research on whether that number is actually the case. Have we ever met a 1.5 replacement? It may have not even been a goal of previous. It may not have even been a goal.

It's always been 1%. We've never replaced 1.5. My point is that's a substantial 1.2 in a previous year.

And I think in your numbers, you show the addition of two capital project managers going in potentially next year. Do you have any concerns about meeting that big of an increase in capital over the next 10 years that we're projecting?

could for it. It's all being contracted out.

You're dependent on the availability of external people being able to take the increase.

And we've seen in our bids, we've received multiple bids on water main projects. It's not unlikely I'll get five or six bids on a project. The

The lead service line numbers, the lead service line replacement numbers, $400,000 this year, $800,000 for the next one. You think that meets our goal by that 37 deadline? Isn't that what I heard you say? Yes, that's correct. And then how much are we getting in to help with that? How much do you expect to get in to help with that? Can you rephrase that? How much money? to help you pay for that type of replacement. So we're going through a process now to try to get DNR funds allocated to us, correct? Yes. So how much are we expecting to get over the next 10 years to help us pay? All right. And then, Chris, did you have any, I mean, I'm sure you're doing your best to come up with these rates of another company who's charging this, right? So you don't have access to what, you know.

They're publicly on the online website. And so I get them directly from their office.

And again, I would just say I see two charges in there that I think are maybe a little bit off. The thing about the PSE process, and I don't know if people understand this, they're required to have local public hearings about their rate base. Once it gets to the PSE, the Office of Public Counsel intervenes in that case and when before the PSE makes their decision on what they're going to actually get to get to take in. When Kirkwood raises rates, we have a public hearing at this council and then two readings, one reading. So we, No, so it's just 1 book. My guess. My point is, you know. It's a heck of a lot easier to raise rates at this level than it is for an investor on utility. You know, I have a lot of. Again, these numbers, it's hard for me to digest because they have changed so much. It's when we're talking about future rates and we're talking about an entity included in here, I don't think we can talk. I don't think a council can make a decision without having all the options available to them and study all. And when we've raised rates on residents 50% over the last four to five years, I think our residents deserve for us to lay everything out there, talk about it all, and then make the best decision. And I hope that this council chooses to do that in the near future.

Just a comment on the raising rates, since you brought that up. In 2023, we raised some 15%, then 20%, then 27%, and 5%. That's a compounded rate increase of 84% in three years and one day. So again, those rates have... And as we're looking at what you project, it's a serious increase compounded over the next 13 years. Again, I think those things have to be... further fleshed out.

We'll be raising the facts. I guess Missouri American Water has been those prior years. So we've been on Missouri American those prior years. How much more have we been paying? I think the fact that what I take out of this is that I'm looking at just going forward, not looking backwards. And as you and Paul and everyone else have kind of said, what is the benefit of keeping this? And we can argue to make that We need the information. That's correct. And so to me, this is what I think Chris did a good job. And I asked Justin to get with Chris on the numbers because

fair to chris i mean you know i don't want to set chris up for failing and um so again the 1.5 percent how much do we have in the pipeline for next fiscal year you know how much what replacement are we going to get done this year is what 0.8 percent or something 0.89 is what i have and then what do you have because again an email you and i've exchanged before it takes you 18 to 24 months from You know, designed to actually only nine months out of the year, probably workable in the field. So what's already in the pipeline now? What percentage of it may to be completed in fiscal year 28? Do you have any idea?

So then we are designing for one and a half percent starting in FY28. Has that come together? For design.

To put out in design, but that doesn't mean they'll be in the ground by fiscal year end 28.

That would be sometime in 28. I'm going to come to you with construction contracts that represent 1.5%. Okay.

They won't be completed projects in 28. Okay.

That also brings back, that's why we have so much care.

all right so your plan on going out to bid i think in august for some upcoming learning percent what do you know so in august i plan on going out for off for construction so for 0.89 which would be done prior to fiscal year end 27 which would be done by march 31 and 27 um so it'd at least be in construction by that point now we can do water main work year round okay so unless we got negative 20 temperatures but fiscal year 28 begins april 1 of 27. all right and from what you and gina were just discussing discussing in fiscal year 28 you don't think you think you have 1.5 done with 1.5 percent just a design and maybe out to bid

Okay, Sheila. I just want everybody to know they're not sitting on their hands right now.

Like we've got the pump station being, pump one station being replaced. That's correct.

We just finished

Two large main projects, one on Lockett, one on Blakey. And then we've got, you know, more projects. Monroe is coming up. Dory Ferry is also coming up. Those are two large projects that are currently in design, ready almost to be thrown out the door for bidding.

So it started to sound like nothing was happening right now. And I was like, no, there's things happening and there's things planned that And a lot of it goes to that pump station, right?

Oh, yeah, that's a big $2 million project.

$2 million project, so it's not like it's second.

Mayor, for me, the next step will be having a most likely work session where we can explore topics that we want more information from. Correct. Is that RFPs? Is that looking for bids that might be out there? Just even being able to explore the next step. If we talk about contracts, it occurs to me that we've obtained a contract, and I don't believe there is a current contract that's been offered to us. So that, for me, would be the next step, that we get to explore what next steps could be, and then go from there.

And I would add on just, again, that information. If the DNR loan is a part of the information that we need, I mean, those, even though it's a low interest, have to be secured, my understanding, either by revenue bond or GO bond. If we can have the specifics on that, revenue bond would be a rate backing. GO bond would be a property tax that all Kirkwood residents would vote on. So if DNR is a Is it all in the mix? We need to...

Yes, these numbers don't take into account any other, any loan through an R. Well, I just heard it kind of mentioned, so if that comes... That's an option going forward.

But if it is, we need to understand what we're talking about. It's not just another easy loan. It has... It has a vote of the residents. Well, a rate increase for a vote of all residents. A vote of all residents. It has to be approved by the board. We cannot just do a rate increase. A revenue bond could be rate increases. It could be by revenue. The GEO, it would be all residents, including the non-Kirkwood water. And we just need to know that if that is at all on the table.

It was on the table in the water committees. And it was forward. It was kind of still out there. And I know the

may have mentioned scheduling it in the future report session all right all right i think we're finished for now so uh we'll get started again with council meeting at seven o'clock right back here