City Commission - Regular Meeting

We'll call to order the Wednesday, July 22nd City Commission meeting on Water Department Budget Briefing Workshop and Agenda Review Workshop meeting to order. Can we get a roll call, please?

Commissioner Davis? Here. Commissioner Dollison, who's not yet present. Commissioner Birdsong?

Here.

Mayor Pro Tem Mercer. Here. And Mayor Yates.

Here. Thank you. So we have the budget briefing workshop now. The City of Winter Haven Fiscal Year 26-27 proposed budget presentation by City Manager Stowers.

Thank you, Mr. Mayor. I'm going to make my way to the well to present this on the podium. But I do just want to offer one correction. I see that the title of this meeting at the top reflects water department budget briefing. This is actually everything but the water department's budget that will be included in the numbers I present. However, the detail on that budget will not come forward until, I believe, the first workshop in May. We do that separately. But what is included in the budget briefing discussion under 3A is correct. So Mayor and Commissioners, it is a pleasure to present to you this evening our tentative proposed budget for fiscal year 27. I've had the opportunity to meet with the four of you plus Commissioner Dollison individually to provide some briefings and go into a little more detail on some of the items that are of particular interest to you and gave you a chance to ask questions, helped us further refine some of the things within the budget I want to start this evening with just a word of appreciation. First off, to our CFO, Chris Reeder, Mr. Alan Weeks, and Brandon Bousier of our finance department. So these three gentlemen have the pleasure of taking all of what departments bring forward uh guidance from the commission my own guidance that i provide to them and bring that into a land that is a budget that we can um that we can fund and that is uh consistent with revenues that we have and priorities and the like so to them a special thank you that's a lot of number crunching that has occurred also to katrina hill who has played a key role in putting together our presentation for this evening as well as the tentative budget that we provide out to the public. I also want to extend to my department directors that are here in the audience my appreciation to them They were given some pretty clear instructions on how to approach this year's budget and have done so. And I think they've been very responsible, very strategic, very future looking into what challenges and opportunities may exist out there and have structured their requests accordingly. And certainly last but by no means least, the five of you in providing direction to us in what you're looking for and what your priorities are for the coming year. uh... this budget uh... presentation this evening is going to be a very high level yet detailed overview the overall budget it's done in a format kind of communicates in clear terms what all the numbers say uh... in advance of me getting into the presentation one of the things i'd like for katrina to walk us through is you know, in full commitment to our transparency and our fiscal accountability, you know, we're required by statute to post information to our website. Our entire tentative budget for fiscal year 27 is available online. And that is not just for you, but that is for our citizens, citizens and interested parties. Um, You don't get a big, giant book anymore like we did in years past. Everything is available through our Open Go platform, which is embedded within our website. So I'm going to ask Katrina if you would to walk through that. Yep.

All right. So what you see on the screen is a homepage of our website, mywinterhaven.com. If you hover over the Apartments tab, scroll down and just click on financial services. That will load the finance page. And right here at the top, you have your proposed fiscal year 27 budget. Clicking on that link will take you right to the full budget. Takes you right to the table of contents page where you can find any of the different cost centers and funds. And you can also navigate at the top or translate into about 75 languages as needed.

So again, every cost center that we have, every fund is within this. So if you're having trouble sleeping at night and you want to see what we're doing within the Urban Forestry Fund, it is right there for your perusal. Okay?

We've been doing that for a few years now, right?

We've had the, in this format, so we've always put the budget online as a PDF, right? This last year, we were able to load in the budget in this format, even though we only created a portion of the budget from certain departments that we were like in that test version of OpenGov. This year, we put every department through OpenGov's uploading of information. So this will look very similar to what you would have seen in 2026. And then should this be approved and adopted by the city commission, It will then be just kind of relabeled as the final budget for 27. And I think, Katrina, if I'm not mistaken, we have to maintain, I think, the past five years of budgets by the statute so citizens can do comparisons and the like there. So with that, I will jump into our budget presentation. I want to apologize in advance to those that came out to give presentations tonight for items that are on the regular agenda. So my friends from Jones Edmonds and Morton Smith and other folks, they're going to be waiting a little while. I also just looked over my shoulder, and I do want to make a quick introduction if I can before I get started. Mr. Alex Price is with us this evening. Alex, if you would stand, please. Alex is the new... regional affairs director, I don't know if that's manager, position for Tampa Electric Company. This position, you probably remember through your dealings, was recently held by Nick Plott and then was temporarily filled for a short few months by Morgan Odom, I believe the name was, MJ, is that correct? And since her departure, Alex has now come into that role. He's left the CFDC and stepped into this capacity. We had a chance to meet with him today to talk emergency management and coordination on projects and the like. And we are extremely excited to have him in our fold. And working with us is our representative from TECO joining us in these types of things. So Alex, welcome aboard. Okay. So the budget for winter Haven is built around the strategic plan. Strategic plan was adopted by the commission in 2024 and is founded on these four, these six pillars. You know that we do surveying throughout the year, twice a year, each year that gives us a kind of a snapshot of the public sentiment in terms of satisfaction in each of these areas. It's interesting, and I'll be able to share more in the coming weeks, we're actually going through the budget and identifying all the costs that pertain to each of these strategic pillars. But coincidentally, one of the pillars that we perform lowest on in terms of overall satisfaction, when I say low, it's not a horrible score, it's in the high 70s, is infrastructure. And what you're going to see in this budget is a tremendous investment in infrastructure of strengthening predominantly our water and sewer systems. It is a conservative budget, but it does have a tremendous investment in infrastructure. And I will reiterate that throughout. And I'm going to try and share some analyses that I have done that complements the conservative approach staff took in building a budget predominantly as it pertains to the general fund where taxpayer ad valorem taxes go in as a revenue. A lot of the big expenses we have will exist within our proprietary or business-oriented operations that are funded through the fees and charges by those that use those services. Budget highlights, and I will start and close with this slide. Our budget as proposed for fiscal year 27 is $371,845,623. So throughout the presentation, I'm going to refer to that as just $372 million. Save me a little bit of breath and tongue tangling. In comparison to the fiscal year 26 budget, it is a difference of about $120 million, an increase of about $120 million, of which all of that plus more is tied directly to one-time capital investments, many of which will be for projects that serve the community for over 50 years yet to come. Water plants, wastewater plants are the two biggest within there. If we just looked at the general fund, the general fund for fiscal year 27 is crafted at about $85.5 million in comparison to $79.7 million the year prior. That's a difference of less than $6 million between the two years. And I think that that's important because, again, when you start talking about property taxes and affordability, that's where people's minds go. What are we doing within that general fund? We're not spending like drunken sailors in port for the weekend. These are reasonable and realistic increases in certain areas that it costs to maintain the level of services that we have. The budget is fully balanced, as it has to be, at the current millage rate of 6.5900 mils. Coincidentally, the rollback rate is calculated to achieve the same revenues is at 6.55. So it's a difference of four one-hundredths of a mil. That's probably the closest that we've ever been to the rollback rate. Certainly in the past several years, I think you'd have to go back to the Great Recession to be closer in terms of your actual millage to your rollback. Gross property values in Winter Haven increased by just under 5% at 4.97%. The total taxable values for property is approximately $5.61 billion. That is all your residential, commercial, industrial, agriculture, vacant lands throughout the community. If you take that 4.97%, kind of interesting this year, 2.83% is tied to new growth. So that is developments that have happened that got a CO in time for those properties to be added to the tax roll. That is some of the industrial stuff that comes online. That is some multifamily, some commercial, and certainly single-family residential. We do have other... projects in the mix as you know with the industrial park the chick-fil-a complex will come on at some point in the not too distant future there's also development of a 1.4 million square foot warehousing operation out there that is under construction now but will not come online in term to reflect in next year's budget property values of existing properties only increased by 2.14 percent I can't give you reasons for that. I don't know if that's tied because there's sufficient inventory or there's just less people moving in that has caused the cost of new housing or resales to come down, but that is reflective of that type of environmental influence. Ad valorem revenues that we take in based upon these property values increased this year by a total of $1.5 million. to give us a total ad valorem revenue projection of $32,753,796. By comparison, in recent years, the increase in ad valorem that we anticipated year over year was usually above three, maybe $3.5 million. So the fact that you only have a 4.97% increase in taxable values has a direct influence on what is your additional revenue coming in for ad valorem. It's a pretty flat system, to say the least, going forward this year. In the downtown CRA, we saw an increase of about 147, almost $148,000 in revenues to be realized there. And in Florence Villa, an additional approximately $109,000. Our budget does continue your investment into the Affordable Housing Trust Fund. We anticipate some requests for use of those dollars in the coming months and over the fiscal year. We do continue to put $250,000 into that account. We also continue to fund our STEP program that was put into play several years back that provides employees an adjustment through their pay grade on their anniversary date if they have achieved a satisfactory or greater rating on their annual performance review. And then I have incorporated and am recommending a 3% cost of living adjustment for our employees absent the collective bargaining units within police and fire. We're still at the negotiating table with them, so that remains to be seen where those land. But we have budgeted in a 3% for our workforce. The number of employees, 776 budgeted positions total. That's part-time and full-time. There are only six new positions recommended for next year despite growth within our community. Of those six positions, one is recommended to be filled at half year, meaning it wouldn't be approved until March, and that is entirely contingent upon property tax reform outcomes. The other five are within our proprietary accounts, so they are supported by the fees and charges of those business-like operations. the other thing i failed to mention in creating a budget for fiscal year twenty seven this is the first time for me uh... and probably for most city managers that you're building a budget for fiscal year twenty seven trying to figure out what your revenues might be in fiscal year twenty eight because the decisions we make for fiscal year twenty seven particularly as they pertain to recurring expenses personnel, operations, expansions of services, you make that decision today based upon what you have in terms of revenues, knowing that you might not have those revenues in the following year and for years thereafter, we had to be conservative in doing so. And so when we look at positions, when we look at cost of living, when we look at expansion of services, we throttled that way back not knowing if we were gonna be able to continue it past fiscal year 27. Millage rates throughout the county, we continue to acquire this information as our brothers and sisters and local government present their budgets. But you can see at present time, we are in the lower half of the property millage rates, number eight, in comparison to the 18 other taxing jurisdictions throughout Polk County. I don't anticipate changes in other cities or the county with respect to their millage rate. I think the uncertainty of Amendment 3 and property tax reform has got everybody pretty much in a holding pattern. But what I do find interesting, and because you have recently had discussions about the consideration of a fire service fee, that is, it's not an additional millage, but it is an additional revenue that some cities tap into. And if you think about that, if they didn't have those fire service fees, then their millage rates would likely be higher than what they are to support their fire operations. So those agencies that have fire service fees would include Bartow, which is presently number five on this list, Unincorporated Polk County has a fire service fee, and they are number nine. Haines City, number 12, has a fire service fee. Dundee has a fire service fee, and Lake Wales has a fire service fee. So if you think if they didn't have those, those millage rates would likely be significantly higher than what they are at present time. Looking at the budgets compared, so let me kind of walk through this. You can see at the top, Last year's budget or the current year's is about $252 million. Next year's about $372 million. The first thing that we do is we back out intra-fund transfers. So what that means is If there's a transfer from one fund into another, it's recorded as an expense going out. And then when that receiving fund spends those on a project or a service, it's recorded again as an expense. So we don't want to record things as a double expense, so we back those out, as you can see with those negative numbers there. So the total amount to be appropriated for next year, approximately $329 million. I mentioned we have a significant investment in capital projects next year. You can see $110 million alone within major projects in the utility operations, the downtown parking garage at $10.5 million, Efforts to establish new pickleball courts, a million and a half. Improvements at Sertoma Park specific to the football operations, a million and a half. A new roof to go onto the Florida Citrus Building or Normale Hall, half a million dollars. Ritz Theater, a new roof and new air conditioning, half a million dollars. Improvements and enhancements to three of our existing fire stations, a million and a half. I shared with you all that in December of 2025, we had the unfortunate situation where somebody totaled out one of our fire trucks by driving a car into it. We received some payment on that for insurance, but it didn't cover what the cost of a new fire truck is, so we have to find $720,000 to fulfill the rest of the cost to replace that fire truck that we weren't expecting to replace this year. We were hoping that we'd be able to fund that for the next few years and replace it according to our schedule, but it came due much sooner because of that accident. And then the other capital that's tied in specific to vehicle replacements, equipment, other miscellaneous infrastructure. When you back those out, the total amount of personnel operating in non-capital expenditures is $151,550,000. That is about $12.8 million across all funds more than it was last year, or about 9.3% on all funds, including your business operations. I think that taking it from that approach, you understand more so the investment that we're proposing within capital is what that caused for such a significant increase in budget is. If we look at all different funds that we have, the utility fund is by far the largest. And again, the vast majority of what is in that utility fund is the initial investment in infrastructure that's going to exist and serve the community for 50 years plus. This happens to be probably the first of three or four years in which we're making significant investments into water plants and wastewater treatment plants. The general fund follows that at $85 million. The next two largest funds are transportation and construction. Again, one-time expenses, non-recurring. This is capital that we've got to move forward. And then you can see the rest of the funds as they come down through there. I talked about the proprietary funds as being business operations. So we hear all the time, why doesn't government operate more like a business? Well, the reality is we do operate like a business. In fact, 215, almost 216 million or 58% of our budget is in business-like operations. Wastewater, stormwater, water, the golf course, The dark fiber operations, those are business operations. They don't rely upon taxpayer dollars. They instead generate fees that offset their expenses. The solid waste fund, you pay a solid waste fee to have your garbage collected. That is what pays for the staff and the equipment and the resources it needs to provide that service. Where we can operate as a business, we do so. The other ones fall within the general fund or special funds, construction funds, and internal service funds. But I think this is important, and it's a good talking point that when people say government should operate more like a business, 58% of what we do in local government is operated as a business. If you look at all of our expenses, capital is the biggest demand on our costs. So $177.5 million is going towards capital investments. That is investments in roads, in utility systems, in playgrounds, in equipment, a variety of different things. That is the bulk of where our expense lives for next year's budget. followed by personnel services at about 18.4% and operating at about 17, almost 18% of the budget. That's looking again, the entire picture. Everything from utilities to urban forestry and everything in between there. Looking at all the funds by classification, this just gives you the same information but a year-over-year comparison, and I draw your attention to the chart that you see. So the first bars within that are capital, and you can see what we did in capital last year versus what we're proposing to do in capital next year. It is night and day because we're at the point where those wastewater treatment plants that are 50 years old are coming due and have to be upgraded, enhanced, replaced, expanded to meet not only today's customers, but customers well into the future. You don't expand these every year. These are one-time major investments that you have to do. And the longer you put them off, the more expensive they become. Personnel, less than 5% change year over year. Operations, just over 8% year over year. That is attributed to the merit increases or the step plan that we do with the personnel side. It certainly isn't from adding a whole lot of new positions. In operations, we see the same operational expenses that others do. The price of gas, we use a ton of gas. We're running fire trucks, police cars, solid waste vehicles, utility service vehicles seven days a week. And when gas prices go above $4, because we're government, we don't get some special break on that. When electrical costs, electricity costs go up, we pay those. When water costs go up, we pay those. So we're seeing the same kind of inflationary costs as the general citizen or business owner is going to see. I will point out, in the support of other funds, you see about a 26% increase there. A big piece of that is transferring money to the... for the specifically for the parking garage that we had in one fund and we're putting all of our parking garage money into a single fund um chris i think we're putting it all within the construction fund if i'm not mistaken so there's some money in the transportation fund that transfers in there and that's what that represents you have a copy of this presentation so i'm not going to belabor this part too much but when we talk about support of other funds there's some detail there not only what the general fund provides out to libraries and cemeteries and the airport but also what solid waste and water and sewer provide back to the general fund When we talk about non-departmental expenses, that's our insurance, our internal service allocations for human resources, information technologies, engineering, facility maintenance, our pooled vehicle expenses. And when we talk about debt services, We have a few debt issuances within the utilities, either through bonds or through SRF loans, and then four that you can see there under general government. We are anticipating doing a bond issuance at some point in fiscal year 27 to help support those capital investments. And I'll say this now, the fees that were adopted by the city commission in August of 2024 contemplated a large borrowing to fund the capital improvement program and what the debt payments on that would be so you have already put into play the means to pay down debt service within your utilities and those dollars are coming in so that when that money is borrowed to do those projects the cost to pay it off is already accounted for. In fact, we're doing an update to those rates now to verify, yes, this is what it needs to be and in consideration of changes within state statute that change how we do rates. In the general fund, I'm going to spend a few minutes here because we talk about property tax reform. Your ad valorem tax revenues anticipated for fiscal year 27, 10,000 number I mentioned that go out to your grant and aid recipients as we discussed in late spring. Interestingly, of that 358,000, About $150,000 is less than that. But keep in mind, I'm also recommending that we continue to maintain our STEP program. So if an employee is performing at the levels that meet or exceed our expectations for that role, they are in a position to get an additional 2.5% increase, or if they're on a five-year increment, a 3.5% which puts it above this CPI when you factor in the COLA that's recommended. this is that step program in the blue banner in the middle of the table normally what we would be doing is if we adjusted if we had the step program at two and a half percent we would adjust our minimum uh... base rates for vacant positions by two and a quarter or maybe uh... two percent But my recommendation is that all positions increase by the 3% cost of living, including vacant positions, and we avoid compression because of the STEP program. So that's always been a concern of our workforce, that somebody that's been here a year is making the same thing as somebody that just came in. The STEP program allows us to avoid that. This is the minimum wage that is set by the state. So several years ago in 2020, they came forward or 2021 and wanted to advance the state's minimum wage by a dollar each year. That plan ends in 2026. I don't know what their plans are beyond that, but the state's objective was to get to $15 by September 30th of 2026. If the budget as I presented is approved, our starting pay would be at 17.30 that is for positions like our building service workers lifeguards recreation aids some of our lower level less technically oriented positions entry level to start i think sorry i think it's important to remember too that you know

Well, yes, it's $22.16 per hour average living wage in Polk County. That's private employment numbers that's coming into that equation, right?

I believe so. I believe that is correct.

So in that, that also comes with privatized health insurance and in those employers. our employees receive a health insurance benefit. It's not free, they do pay for it, but it is less than what a privatized plan might be through a private employer. I wonder if you have ever looked at those numbers to see, okay, if you factor in that savings, where would we fall in rate of pay versus where the county sits? Does that make sense?

And we can certainly look at that. We didn't do a compensation study this year. We try and do that about every two years. Compensation studies are comparing one fruit salad to another fruit salad. They're so different because of those very factors. You know, when you look at everything from, you know, What's the health benefits? What are the other benefits you provide in case of police and fire? What are the shifts that they're working? How many hours? Do they have Kelly days? Do they not have Kelly days? There's so many different things that go into that that makes it very complicated. We're trying to find ways to gather all that data to make it easier to do the comparisons.

Yeah, and I'm not suggesting let's go do a compensation study. I'm just merely suggesting that, you know, if you – are paying two, $300 less than what a privatized plan through a private employer might be, that has to be factored into that 1730 and probably gets us a lot closer to being where that living wage is in Polk County.

I think it certainly brings it up, and we can do a little research on that, see if we're able to analyze that data if it's available. What we get is just the raw number. I don't know that we have access to the full data set, but we can certainly research that. I MENTIONED NEW POSITIONS. I'VE APPROVED FROM MY END TO INCLUDE IN THE BUDGET ONE POSITION IN OUR PUBLIC WORKS OPERATION IN THE STREETS UNIT FOR A TRAFFIC SIGN SPECIALIST. IT'S AN AREA WE REALLY ONLY HAVE ONE EMPLOYEE THAT DOES OUR TRAFFIC SIGNS. BUT THIS IS A MID-YEAR HIRE, SO IT'S ONLY HALF THE COST FOR FISCAL YEAR 27. in the authorization to move forward that should you all approve it on my end i will not authorize that until such time as i know what happens with amendment three because there's no point in adding a position if i can't keep it or fund it i'm going to tell you there were this isn't the only position that was asked for had positions in Most departments come forward, and I want to thank the department directors publicly because I went back to them and said, I can't do that. I can't give you those positions without knowing that I'm going to be able to maintain them well beyond. I think one of the most legitimate arguments I heard for new positions came from Chief Monroe for additional sergeants within the police department. i want to give him the additional sergeants but i can't do that if i don't know that i'm going to be able to fund them past that i will say that that is a priority for me going forward that you know as our community expands we we need to make sure that we can can meet the service needs but all the department directors as i spoke with them of what i can and cannot do we're very understanding and supportive of those decisions The other five positions I mentioned are within those business operations. So within the stormwater operations, we're adding, recommending the addition of a stormwater systems specialist. Senate Bill 180 as well as some of the NPDES regulatory changes require that we inspect more of our stormwater lines than we previously had to. I believe that's increasing from 10% to 20% inspection. That is difficult to do with the size of workforce that we have, so that can be funded out of the business operations of the stormwater fund. The other four are within utilities. Compliance manager, that's tied to regulatory compliance as well as grant compliance. I think Commissioner Mercer could probably give us a dissertation on the challenges of utility regulations and grant compliance. And when you don't have somebody that is specialized in that, it's extremely difficult. A business analyst, again, it's a business operation. Having a business analyst makes perfect sense to understand the long-term impacts of decisions that we're making in the water sewer operations and then two assistant superintendents in the water maintenance and lift station side i believe we are if we haven't exceeded 300 lift stations in our community we are right at it that is a significant growth over the past 10 years There's a couple reclassifications that are recommended. One is within the airport. That's actually a downgrading of a position that allows Troy Heidel, our airport director, to have a specific matrix of positions on each day that the airport is operating and staffed. And then within utilities, with all this capital project, it's important that we have Our utility construction project managers at a competitive rate with what the industry is calling for. So we're adjusting those three positions. And then the asset manager increasing that one as well due to some additional responsibilities. Again, these are not funded by taxpayer property tax dollars. These are things that are factored into our existing rate structure. i'll go quickly through this next section but this just gives a little further detail on the general fund in the various departments within it so you can see the total expenditures is a difference of about five point seven almost five point eight million dollars year-over-year uh... the capital that is shown within the budget the seven point three million again vehicle replacements that's Vance needs new police cars. We've put money aside for police cars, but the cost of those goes up beyond what we had budgeted for a plan for. So we have to fund that Delta that is, um, replacement of that fire truck at $720,000. Uh, the trailhead park improvements, improvements at Lake ship park, the Florida citrus building, a roof, the roof and HVAC at the Ritz theater and some structural improvements at the women's club. The individual departments, this just gives you, and you have a copy of this presentation so you can dive deeper into it. You have access to the budget via that online link. So if you really want to drill down into it, you can see how we crafted it, but you can see Most of these go down. A couple of them will go up, but city commission, where their dollars are, city clerk, we don't have an election this year, so the city clerk's budget pings up and down by about $50,000, $75,000 each year, every other year based upon elections and runoff elections. City attorney remains pretty flat despite the complexity of issues and the magnitude of issues that we deal with on the legal front. City Manager's Office, the only increase there, again, that's with the COLA and the STEP program. Public Affairs and Communications comes down because of some of the subscriptions to software programs that are now housed within the Information Technologies budget. Finance has an increase. About half of that increase is tied to some retiree costs that hadn't been accounted for in years past that they need to show within their budget to accurately reflect where those are planning division again that is mostly tied to their staff increases across all their members safe neighborhoods drops a little bit because of some retiring senior employee that was replaced by a less tenured employee so that cost comes down police increased by about one point two million dollars probably close to 100 sworn officers. And when you factor in the COLA and the STEP program, that's where you see that 881,000 in the operating is just the fuel and vehicles, the consumable costs there. Capital, in their capital, I'm sorry, also in that operating is maintenance on their radio system and increases in some of our costs for the sheriff's dispatch also play into that. And then in fire, the biggest jump in there is almost 2 million of their increases in capital. So improvements to the three fire stations, that's number one, number four, and number two. Fire stations have different repairs and maintenance that need to happen there. And then replacement of that fire engine that was totaled in the accident. Parks and Recreation. Again, they have the most services that are out there, most facilities. They have some capital increases tied to major playground replacement and splash pad repairs at Trailhead Park. Winter Haven Recreation Cultural Center being fully online drives some of their additional operating costs. And then in streets, a relatively low increase there, again, mostly tied within their capital. Your unassigned fund balance in the general fund. So this is the emergency, right? This is the rainy day fund. We have a hurricane, a pandemic, a financial crisis that occurs. What do you have in reserves to address that? city's commission's policy is that you have no less than 17 about three years ago you adopted additional policy that sets a target goal of 30 i think that's important particularly in light of not knowing what happens with Amendment 3, but also the challenges we face with FEMA. The mayor and I had a chance to meet with a representative from Senator Moody's office today, and the point that I drove home with that individual was that we have about $800,000 that we are still waiting on to come in from Hurricane Milton. that the FEMA process is slow and we have not had any incidents since Milton, knock on wood, I hope we don't any time in the future, but the ability to recover those costs I think is going to be more challenging. So right now we're forecasting that you'll be at about 33% at the end of the fiscal year 27 and that that will be a balance of about $2.5 million. A million five of that is recommended to be peeled off and put towards the Sertoma Park project. The policy has been that anything above 30%, I come back to you with a recommendation on where you can put that towards one-time capital, and that's where that would go. And we suggest not doing anything with the other roughly million dollars until we know what happens post-November elections and post-audit in the spring of 27. But you're sitting, I think, extremely well and healthy in terms of your fund balance. I think most cities in government operations would be envious of having sufficient fund balances of this magnitude. Major items within the general fund, again, police, replacement of a number of vehicles. I think I've hit on everything within fire. In parks and grounds, improvements at Trailhead Park, at Lake Ship Park where the boat ramp is, asphalt replacement. We continue to fund our two crews that we get from the Department of Corrections. Various park improvements, that's benches and miscellaneous playground enhancements, fencing, those types of things, portable light towers, replacement of a dock at Lake Hartridge Nature Park, and then those two roofs in the 1HVAC project. Also, within Parks Administration, some early design work in partnership with Polk County on the Lake Lulu wetland area. This is south of Lake Lulu, south of Chain of Lakes Park, the wooded area that runs along between the lake and the CSX Railroad there. We own a significant portion of property there, as does the county, and we would like to see that get activated. and create a connection all the way back to the Harmony development. And then complete street work on East Lake Howard Drive. I mentioned splash pad, amenity and upgrades at Trailhead Park, a partial HVAC replacement at the Senior Center, painting the exterior of the Women's Club and doing some window encasement replacement, and then finishing out the upgrades at Diamond Plex that are presently underway. In planning, we fund monies for various planning studies and grant applications that may come through that we need consulting service assistant with. And then consulting surveyor reviewer fees, we budget for that as well. In streets, finishing out the ADA transition plan, a signal timing analysis on 6th Street. They're getting a significant piece of equipment that will help them in the performance of their work in that skid steer. And the last two items, bridge repairs and emergency tree removal, those are things that can come up through the year, particularly following DOT inspections of our bridges. Those bridges we're responsible for, they do the inspections on, but if they find something that needs to be done, we need to be able to have the funds to do those repairs. The airport is getting a contribution from the general fund of about one point one seven million dollars for next year little less than the year prior their other revenues that at the airport are coming in through fuel sales grants and then the rents on hangars their projects that are significant in the year ahead the obstruction clearing that's at the end of our runways vegetation that gets too large that we have to address the remote control tower project It is happening. It is moving forward. There's a kickoff meeting in the next few days specific to that. The Commerce Park Phase 1, that is some horizontal improvements for parking and additional apron space to the west of the existing terminal. And then Taxi Lane T-Hanger Rehabs, we've talked about that. That has come before the commission to approve that project, the design work. They're updating the master plan. This will position us for future grants and growth and development at the airport. The generator project is underway. We're just waiting for that to come in. And then the airport beacon and the PAPI lights, that project is also underway. You can see at the bottom, the city's contribution towards those $8.4 million worth of projects is about $1.25 million. That's less than 15 cents on the dollar. It's 1,000 towards the station hardenings at Fire Station 1, 2, and 4, and then funding that will go towards Normale Hall and the Ritz Theater roof. For fiscal year 28, I have not made any recommendation on how to program that out because doing so in advance of what happens with property tax reform would be ill-advised. We have noted in there that it would be advisable to try and continue doing $2 million worth of transportation improvement program investments, but that number may even need to come down. Playground replacements may need to come down. But you can see as it stands right now, we're sitting on a savings or an available fund of about 2.3, almost $2.4 million that has not yet been programmed for fiscal year 28. I advise you just leave that be. Don't make any decisions on that until we know where that money is best used in light of what could happen in November. And then back to the beginning. Again, just to kind of recap, our budget next year, it does show a significant increase in overall budget compared to fiscal year 25 or 26. However, the vast increase is all within capital. Of the $120 million increase, $110 million of that is just within the utility fund for major investments that are funded and already established by the existing utility rates. The property millage rate remains the same as it has since 2022 at 6.59 mills. The fact that we have only grown in taxable value by 4.97% means that our ad valorem revenues only increased by about $1.5 million year over year. We do continue to support the Affordable Housing Trust Fund. That's, again, one of those things that if you had to make a decision long term, do you continue to do that? We do continue to care for our employees with our STEP program. as well as consideration of a 3% cost of living for those that are not within the collective bargaining agreements and until such time as we reach an agreement with them. And we maintain and sustain the level of service that we have today with 776 employees. So with that, Mayor, Commissioners, I'll gladly stand for any questions that you may have. I will tell you that this evening, well, for Monday evening, you have an agenda item that is to, this budget is built around the millage rate, as I mentioned, 6.59 mills. monday evening one of the actions you'll need to take that is on your budget is to establish a tentative millage rate we'll talk about that more during the the rest of the workshop and to set the date for your first hearing so that is that is the significance of you understanding the budget as we have crafted it again It is a balanced budget based upon revenues that are available. It is, I think, in terms of the general fund, a very conservative budget. And my appreciation to you all for the guidance and patience you've given to us in crafting this and to the staff that played a key role in bringing it to fruition. Thank you.

Commissioners, any questions or comments? to discuss further at a later date.

Okay.

All right. I thank you, and we can move into the agenda review unless you need a five-minute recess beforehand.

I'm okay. Is everybody else good? Keep rolling. All right. Everybody's waited patiently long enough, so... Okay, so we will now move into the normal city commission meeting agenda. Would you like another roll call or are we still good?

We're still good because we've not dismissed from the first.

Okay, so we'll have our normal invocation and pledge. Then we'll have a proclamation for Florida Water Professionals Month. And we'll move into the consent agenda with one item. That's the smallest I've ever seen a consent agenda.

Mr. Labby, we'll give you an update on this.

Mayor, commissioners, this is an easement between the City of Winter Haven and Tampa Electric. This is for the remodel project right across the street here at Old Fire Station 1. They need to set a new transformer to handle the new electric load over at that building. There's a depiction there on your screen of the location of the easement required to place that new transformer.

For clarity, it's the small black box you see on the left side of the building. It's a little difficult to see.

It won't be in the middle of the driveway. That won't be a driveway anymore.

So we're just recommending to approve that.

Since we're on the topic of TCO, where are we with undergrounding those lines around Grove Roots?

I can get a project update. I know that they've been working on that project. There was a delay in that they had to get an easement from a private sector entity to set a new transformer down there as well, which I think that they are currently almost done with at this point.

Yeah, I think a lot of the power is underground. There's still some communication lines that are there, though, and that has to happen separately.

And then will the lights come down when all that happens at the same time, or are the lights coming down sooner?

Lights being the traffic signal? Yeah. So that will come down separate from this, from the team at work. But that is something that we are getting quotes for and working on how to make that happen.

As for the signal, the traffic signal masked on, do we have a quote compared to the standard issue?

from the lines as WC major mentioned.

Okay. If you'd like, Mr. Mayor, we could put Alex Price on the spot.

I mean, I wasn't gonna go there, but no, that's okay. I was just driving by there today and I was like, it's about time these get wrapped up, so. All right. Resolutions, R26-20, City Attorney.

Thank you, Mr. Mayor, Commission. This is a resolution we've talked about previously where we're rescheduling the meeting for September 14th to September 15th in order to accommodate the tentative hearing on the budget. We cannot conflict with the Board of County Commissioners or the school board. So we have to move our regular meeting from September 14th to September 15th. Requires four votes, by the way. So hopefully there'll be four of you here Monday.

I think we can handle that one. Okay, ordinance first readings, 026-16, city attorney.

I will defer to the city manager. Sorry. So we won't read the ordinances in full this evening. We'll do that on Monday. But we've gone through an evaluation and appraisal report via Eric's operations and planning. So I'll ask him to present this. This has gone to the planning commission at their most recent meeting.

Yes, sir. Mayor, commissioners, this is part of growth management legislation in the state of Florida. We are required to update our Winter Haven comprehensive plan in response to our evaluation and appraisal report. Normally, I would say that this is a much more significant item than what you will see this year. The only major requirements that we're changing in our comprehensive plan are that we now have to have a 20 year planning period for our comprehensive plan. So we made modifications to population projections and dates for goals and objectives within the comprehensive plan to accommodate that 20 year period. period unfortunately there's state law senate bill 180 that prohibits us from making major changes that could be seen more burdensome at this time so if and when senate bill 180 goes away we plan to make more significant changes to the comprehensive plan most specifically around all the one water efforts that we've endeavored over the recent years And so, yeah, we would recommend approval of ordinance O2616, which is the revision to the comprehensive plan.

and the next item goes right along with that and that is the adoption of the 2050 future land use map map series so that is another piece of the the ear process so those kind of go hand in hand yep and again there are no major changes we did reformat them but we're not changing land uses for any of any of the properties in the city one ahead

I was just looking at some of the subsets and everything on that and going through, looking at it.

Okay, 02618, city manager.

This one, we have a presentation for you this evening and I'm gonna ask our assistant director of Winter Haven Water to come to the podium and help introduce this. This pertains to industrial pretreatment. This is a matter, and I'm gonna kind of give you a thumbnail Reader's Digest version of it, and then Mark and our consultants have a presentation on what we're doing overall, but when you have certain industries within your community that produce wastewater that has certain parameters to it that exceed what your typical wastewater or residential wastewater discharges you're fluent are, you have to account for that. Either, well, in just about every case, you're doing some level of pretreatment at the source where it's generated to remove some of those, those contaminants before it enters our stream because it can have significant impacts on the integrity of our wastewater operations as well as the cost of those. So industrial pretreatment is the means by which you do that. We also have a fee structure for those customers that accounts for their flow as well as the concentrations within that. So this is an update to our code of ordinances that adjusts the fee structure as well as the fees for those customers. There are three such customers present day in the city of Winter Haven. There may have been more in the past, I don't recall, but these three have been, at least for the past several years, the only ones we've dealt with. Two of them go back many years. So Mark, with that, I'll turn it over to you and our team from Jones Edmonds.

Thank you, City Manager. Mayor and Commissioners, Team Michael has always presented very, very well. I don't really have too much more to add. When the industrial users or big commercial users exceed those limits, we monitor those through our pre-treatment fog team through composite samples. We do that on a weekly basis, and when those limits are exceeded, that's what we have to treat. We have to take advantage of that. um instead of here led by jim mccullen who prepared our study course

And Mayor and Commissioners, just as Jim's coming to the podium, this does result in adjustments to wastewater pretreatment fees. through the process of two readings of the ordinance and such, because we're amending the code. But if approved, this will result in modifications to the specific fees assigned to those current permittees under our industrial pretreatment program, as well as any others that could come to be in the future. So I just want to give you that as a caveat.

Good evening, Mr. Mayor, Commissioners. Oops, sorry. Good evening, Mr. Mayor, Commissioners. My name is Jim McClellan. I'm a chief engineer with Jones Engines, and I've been working with the city over the last year, year and a half, to evaluate the wastewater surcharge system and update it. And the surcharge system, as has been kind of alluded to, is basically just a component of your industrial pretreatment program. You have a well-established industrial pretreatment program. And so just to kind of give you a little bit of background on the industrial pretreatment program, what it is and why you have it. It dates back to 1997 when the Florida Department of Environmental Protection adopted its own industrial pretreatment program. And the purpose of the industrial pretreatment program is to protect your wastewater treatment plants. It's to prevent the discharge of things that could enter your sewer system and disrupt the operations of the treatment plant. or pass through and end up in the effluent from the plant and cause violations or could present a health or safety risk to both the plant operators as well as the public in general such as something like a flammable subject that was discharged into the sewer system that become a hazard to everybody so those are the general purposes of what this is and it's all aimed at trying to maintain the integrity, quality, and usability of the effluent from your wastewater treatment plants. So a little bit more detail about it. Who does it apply to? It applies to commercial and industrial users of a certain size. Basically, we're looking for what is deemed a significant industrial user. And a significant industrial user would be somebody who discharges more than 25,000 gallons per day of wastewater and or has a component in that waste stream that has the potential to impact the operations of the treatment plant. So those are what that basis is for. And the whole purpose of the surcharge program is to address the fact that not all wastewater is the same. It costs more to treat stronger wastewater that comes from industries. And the program is also intended to provide an incentive to the industries to reduce their levels that are coming from their facilities. So the application to the city of Winter Haven. As has been noted, there are currently three dischargers that are in the program now. Specifically, it's New Dairy, Florida Can, and Indian River Transport. Those are the three. And all of them discharge to wastewater treatment plant number three in the city. And essentially, each one of them is issued an industrial pretreatment permit from the city. And that permit is essentially buying capacity, if you will, in the treatment plant. And that is measured by the flow and the biochemical oxygen demand, which is essentially just a measure of how much oxygen it takes for the bugs at the treatment plant to degrade the organic material that's in the wastewater. The higher the BOD, the more oxygen that's required, the more energy and cost that are associated with it. The other is total suspended solids. kind of indicative of its name. It's the material that's suspended in the wastewater and those suspended solids are carrying the organic material that contributes to the BOD. So those are the components that are utilized to look at what the individual discharges are buying in terms of capacity. The surcharge program that the city has is currently a two-phased process that is implemented when the waste streams from the industries exceed the permitted capacities from their permits that are issued. There are two components, operational surcharges, which are related to essentially the operations of the treatment plant. So that's things like electricity, chemical cost, sludge disposal, and it also includes the cost of the actual operations of the industrial pretreatment program, the staff, the testing, all of that is tied into that. Secondly, the city has a capital recovery surcharge, This one's a little bit different. It basically dates back to the 1980s, and it was tied to when the city got grants for construction of wastewater treatment plants, and as part of the grants, they were required to establish a capital recovery surcharge. We'll talk about that a little bit more as we go on, but essentially, The surcharges are applied to the unreserved capacity at the treatment plant. You're trying to maintain that capacity. So the request that the city had for us was to evaluate the surcharge program, develop recommendations for updates to it, And more specifically, also consider adding additional surcharge pollutants as part of the system. Those include nitrogen, total nitrogen, total phosphorus, total dissolved solids, and fats, oil, and grease to establish surcharges associated with each of those. So the first thing we did was we looked at the operational surcharges for both BOD and TSS. It's kind of a misnomer for it to be labeled as a surcharge for flow because flow is simply charged at the commercial wastewater rate for any industry. As the commercial rate goes up, that flow charge goes up. The BOD, the current rate is .15 cents per pound of BOD. TSS was 3 cents per pound of BOD. Those were based upon old operational costs associated with the treatment plant. When we updated them looking at the operational costs for the plants in 2025, the adjusted numbers would be .82 cents per pound for BOD and .9 cents per pound for TSS. So basically this is a reflection of catching up to the actual cost associated with operations at the treatment plant. In looking at the other recommended parameters that the city asked us to take a look at, we also took a look at the total nitrogen, total phosphorus, fat soil and grease, and total dissolved solids. And these are the rates that were developed associated with taking the remainder of the operational cost that wasn't applied to BOD and TSS and applying it to these parameters. I will tell you that a number of communities in the state have total nitrogen, total phosphorus, and fat, oil, and grease surcharges. I don't believe there's any that have a TDS surcharge as yet. But the TDS surcharge is something to look at in terms of preserving the quality of the reclaimed water that is produced by the treatment plant. That reclaimed water, the city has wonderful plans to be able to utilize that water for wetland recharge, among other things that will allow it to continue. If the TDS is too high, you end up risking that. So the whole purpose of the TDS, surcharge is to try and maintain our reliance that the TDS and the effluent from the plant would be under 450 milligrams per liter. So what are the benefits? Basically, you're bringing things up to current cost. Again, it's been a while since those rates had been adjusted. And your operational cost, as we all know, everything costs more. Electricity costs more, chemicals cost more, it costs more to dispose of wastewater solids. It provides an incentive to reduce pollutants, Because, again, we're looking at maintaining the quality of that effluent coming from the treatment plant and protecting residents' costs. We want to make sure that the industries are paying their appropriate cost associated with the operations of the system and that it doesn't overtax the user rates for the residential customers. So back to the capital recovery surcharge. Again, they were originally established as part of a grant requirement from the 1980s. They've been updated over time to kind of tie them to the impact fees that are charged to new users. The best way I could put it is it's a temporary lease of capacity within the plant. and it's amortized over a 30-year period at 5.5%. And when you're applying this, you look at what's the charge for flow, what's the charge for BOD, what's the charge for TSS, and you take the largest of those three and you apply it as part of the surcharge on a monthly basis. I'll tell you that we looked and looked. We could not find any other communities in Florida that have a similar system at this point. And based upon that, our recommendation would be that you discontinue the capital recovery surcharge component of the surcharge systems. Looking at Winter Haven in comparison to communities throughout the state, your current and proposed surcharge rates are on par with your communities around you as well as throughout the state. So there's nothing dramatically different about yours. Other communities do have total nitrogen, total phosphorus, and fat soil in Greece. And again, the numbers that we came up with would be on par with what other communities are charging for those. Again, we did not find any other community that had a TDS. And additionally, we could not find any communities that had a capital recovery surcharge. So what's the impact to the industries? So what we have here is a summary of the current cost in 2024 for the three industries, which is the flow charges, the BOD charges, the TSS charges and the capital recovery component. I'll point out to you if you look and see that the capital recovery charges represent nearly two thirds of the overall cost associated with the charges that were applied to these industries. Specifically New Dairy faced a lot of that. So their total sewer bill in terms of surcharges and water usage was nearly a million dollars in 2004. Florida Cairns was about 96,000 and Indian River was about 20,000. Overall, the system had generated about $1.1 million in fees in 2024. In order to assess the impact of these on the new rates on these, we took the 2024 flows and loads from each of these industries and applied the new rates to them. And that's the proposed side of the chart here, which shows that at the bottom you can see that The total for New Dairy would be about a million dollars, not much different than what their total was actually in 2024. Florida Cans would go up based upon a TDS surcharge. And Indian Rivers goes up a couple of thousand dollars altogether. But in total, you end up with about $100,000 in additional charges if all of these surcharges were applied to the flows and loads of these facilities. Again, basically the additional surcharges for the new components would help offset the idea of eliminating the capital recovery component of the surcharge program. So again, our recommendations would be to implement updated operational surcharges for BOD and TSS. The flow charge automatically goes up with the commercial usage rate. We also would recommend that we collect additional data on total nitrogen, total phosphorus, fog, and TDS from the various industries in order to help refine the numbers. And finally, we would recommend discontinuing the capital recovery surcharge to align more with the processes that are more modern to today. With that, thank you, and I'd be happy to answer any questions.

I'm gonna yield to our resident expert up here.

Okay. What percentage of the industrial stream versus residential?

In terms of total flow? I think we're talking, let's see, it's less than 15% altogether currently. And I'm sorry, I'm estimating that.

I just, I was curious as to usually, it can usually go up to about 25%. And so I'm just wondering what, based on, as far as percentages of the flow. I'm kind of familiar with it. I am familiar with the charges because I used to calculate them a lot. I know the users, most of them. There's some new, but I'm certainly familiar with that. I have seen some of the damages that can happen to lift stations and that can happen involved in those close by to those facilities. And are we gonna have someone that is going to sample to verify and make sure that they are following these or they're conforming and everything?

That is part of the city's industrial pretreatment program, that the sampling is done by the city at the various industries on a weekly basis. the industries pay the cost for that sampling and analysis as part of their monthly bill. So yes, they will be monitored.

And Mayor Pro Tem, I believe that, I don't know if it's the requirement or if it's just the common practice of a lot of communities that that's done on a monthly basis. Our practice is to do that on a weekly basis. So they are sampling that so we know what those contaminants with those parameters are and can apply that accordingly to their IPP surcharges.

And the process utilizes the weekly data and averages it out as an average for the month.

Are we going to comply with our set goals on this? I mean, to make sure that we remain at that 15% or that we, because we have to have some available for new?

Correct. I mean, there are other industries. You have one significant one that's looking to come on board as well. So that would be part of an assessment of the Maximum allowable head works loading component in terms of the local limits calculations Where you would set aside reserve for a certain amount of that?

So yes, that would be part of the calculations Okay So again mayor commissioners just kind of to bring this home This is Recognizing the impact that industrial affluent has on on wastewater operations that in in in protecting residents your you know 40 000 residential accounts that are out there um from varying costs that are associated with industrial waste that comes in you know industrial waste water remember phrase that and ensuring that those entities that have the IPP permits that we're appropriately charging them for the impact that provides to it. It does result in an increase. The timing of this is that these fees would not take effect until after January 1st of 2027. That is our effort to give them advanced Awareness of those as they're preparing their operating budgets and the like for what lies ahead And certainly there are things that can be done Jim correct me if I'm wrong on the industrial users side to do further pretreatment on their behalf capital investment that they make on their filtrations and processes and the like at the point of the discharge to treat it to the highest possible level so they're not incurring surcharges on all those other things. The cleaner it comes to us, the cheaper it is for you at the end of the day in terms of our bill, but it may require a greater capital investment on their side.

Right, and the whole program, again, one of the goals of the program is to provide that incentive for the industries to self-treat. as much as possible.

I'm good.

We're gonna make you a wastewater expert before this is done.

Yeah, I'm scared to death. So there's gotta be a cost for these three entities that they're gonna have to spend on their equipment to get them

more up to par not necessarily so Jim can you go back to the slide that has the table So what they did, what the team did, Jones Edmonton team, in looking at this was taking the flows that we had in 2024 as they existed and applying the new rates to them. This is what those rates would be based upon those flows. Now, if the flow is higher, then the numbers are gonna be higher, obviously, but The only additional cost to them is the incentivizing them to do more treatment on their end before it gets to us. But this is based upon how they're processing their waste water today.

And is their cost, if they put that expense and that cost into it, is that cost less than what they would be charged here?

I can't tell you that. I think that's an operation. Is it better to do a greater level of pretreatment in my facility or incur the ongoing costs here? That's a business decision that each of those would have to make.

You want the water as clean as possible to get to you because it's a biological process, which means it's not going to remove anything. It won't take out metals. It won't take out anything like that that comes to you.

Yeah, I get that.

And they need to clean it up as clean as they can get it before they give it to us.

Yeah, so I get all that. I guess I'm just looking for the encouragement to do that. Because really there's not, I mean, yes, it's up a little bit from what they were paying in 2024.

There's not that much encouragement. Exactly.

That's kind of what I'm getting at. So I assume we've talked to these three entities and they know this is coming or...

Yes, they've been informed and they're aware that we're going through this process for the last year to evaluate this. And there's some, go back to some of these, like if you look at the Florida can, 22 years old, their technology's relatively new. But New Dairy's been around for a while. Their technology is new, so there might be an incentive for New Dairy to upgrade their system a little bit to bring their costs down in the long term.

In your discussions with them, did you get an indication on that was something that they would want to do, or they looked at it and said, eh, it's an extra 50 grand.

That was more of the trap.

That's kind of what I'm afraid of. So that's where I'm trying to get at. Is this what we're looking to institute now and it's kind of stuck? Or are we gonna reevaluate this year over year if they're not continuing to make the changes needed that we're gonna potentially adjust these fees higher to encourage them to do it?

Again, I think as part of our recommendations to the city was that at a minimum, like every five years, you would reevaluate these fees and update them to the current operational cost associated with the plan. I will tell you that we did look at the capital recovery component of the surcharge to say, what would it be if we updated that to the current cost? And it basically resulted in a 200% increase in that surcharge. Which means you could look at the capital recovery for New Dairy would be 1.2 million instead of 667.

So, yeah, so that's kind of what I'm trying to wrap my head around.

Understood. Commissioner Davis? Could there be any concerns if we were to try to make it a deterrent or even punitive that it would be arbitrary and probably not a good idea?

I don't believe so because the process is pretty well established. You're not reinventing the wheel, so to speak. The values are just simply numbers that are being updated to the actual cost that are currently incurred. That's what I'm asking.

If we were to go above the actual cost to try to be deterrent or even punitive, I'm concerned that that...

I think if you tried to do that, you would run into that problem.

Okay, thank you. That's my concern.

I think the way that they've structured this, and Jim and his team have done a tremendous amount of work on it, it's really how do we improve the system so that the costs we're incurring are being recovered, what they actually are, and being accounted or being paid for by the entities that are providing that industrial wastewater to it. Again, I think it's a business decision decision. of what am I paying, what are my flows going to be, what are my future projections going to be in assessing that versus what would my capital investment be to really reduce this down. I mean, the flow is gonna be the flow. I don't think the flow is gonna change. You gotta get rid of that wastewater one way or the other. It's how clean is the wastewater. So I'm either gonna pay the city to clean it, through the fees that I'm being charged here, or if I can do that more economically on my side before it enters the wastewater system, then that's to my benefit. But that's a decision that they're gonna have to make.

So do these numbers cover 100% of that cost?

It's 100% of the electrical, chemical, sludge disposal, and operations of the industrial pretreatment program itself.

But you run the risk of the city being in violation if they don't conform.

Correct.

Well, they're not conforming though, right?

They're probably meeting the levels right now, right?

They are. I mean, if you look at if they are in compliance with their permit, There are no surcharges other than the cost associated with sampling for proving their compliance, if you will.

So what part are we missing that they're not paying for? That's what I'm trying to grasp at.

From an operational standpoint, you're not paying for... the staff at the plant, because that's a sunk cost associated with the operations of the plant. That's the main component that's not being covered.

So can we not try to incorporate that number into this? Like you wouldn't pay, they wouldn't pay the full-time person. Maybe they would, I don't know. Can you not incorporate that into it? I don't want taxpayer dollars to fund the cleanup for these three individuals. That's what I'm getting at.

But I think if you look at it from the standpoint of what are your residential user rates, your residential user rates are based upon the operation of the plant, based upon a certain strength of wastewater coming into the plant. So trying to charge a surcharge for industrial users associated with the operational staff, the extra strength of the wastewater doesn't result in additional staff members at the treatment plant.

Got to operate the plant regardless.

Correct. I understand you don't want to be punitive, but these are multi-million dollar corporations that we're dealing with that are pumping this water to us.

My recommendation in reviewing all this with Jim and his team and Mark and Gary and our wastewater operators is that you know, this is more in line, you know, the restructuring, the elimination of the capital recovery component, the addition of the TDS fog, total nitrogen, total phosphorus is that makes sense. And that is the appropriate structure. So getting us right sized in how our fees are charged and establishing our fees in concert with industry best practices and actual costs that we incur. I think we're made whole in this. I think the the incentivization of, you know, getting them to do more on their side really that comes down to good business practices and business decisions that they've gotta make. But regardless of whether or not they make those, we are made whole in our treatment of that. And we are positioned well that if we have future industrial strength contributors come on board, the system is in play to account for that.

Is there, sorry, one other question. Is there a cost to produce this? Certainly. Okay. So how much is that?

Do we know? As far as to update this? Yeah. I mean, basically, I think our fee for the study was like $45,000. Yeah.

I mean, I kind of don't want to look at this five years from now. I kind of want to look at it in two. Is this my thought? And we can have this discussion on Monday night, but... I just think that five years, none of us may be even up here. Speak for yourself. I said maybe. Who knows what's going to be here in five years? Five years seems like a long time.

I wouldn't get too gummed up on that. I think, Mayor, your point is well taken. that you all as the commission have the right to look at this as often as you want yeah um and so you know mr mcclellan has suggested what five years um but you certainly if the majority you want to look at it more frequently yeah that's certainly well within your purview i don't want to jump ahead but

Another item that's on your agenda, the next presentation is on improvements to wastewater treatment plant three that we are expanding, enhancing, modernizing that plant. that that can also result in operational savings on our side, yet your fees are in place. So I think that those kind of gotta go hand in hand.

Yeah, the taxpayers paying to modernize everything.

Well, the rate payer, not the taxpayer, the rate payer.

They're all taxpayers.

Well, not, I don't want to be argumentative, but those that are outside the city limits are not.

Mayor Pro Tems, do you have something else?

Yes. They have an individual permit, correct? Correct. OK. And if they exceed that permit, then is there something that, you know? Because what could happen is, especially the capacity issue, they can use up enough to take away a lot of the capacity of the system. from other users, so I'm just, as long as you can control and monitor their permits so that they don't go over or anything, or if they do, there's some penalty there.

The permits that are issued, if I may interject, is a separate thing than this. This is correlated to that to some degree, but yeah.

Right. Oh, those, okay.

That's good.

All right, I think we're good for tonight.

Thank you very much. Thank you, Jim. Thank you.

All right, so task order number three.

So I'm going to, Mark, bring you back up to this one. Let me get to it. Hang on. So this is, and this can get confusing. So we have... I haven't been confused in a while. There are... a number of different projects involving Wharton Smith that we are engaged in and a number of different delivery methods. I want to make it clear that what we're talking about this evening is specific to what we've dubbed the Water Resource Facility of Pollard Road. This is plant three. wastewater treatment plant three. And the task order that we've issued out to Wharton Smith, we call this a progressive design build. So they are both the engineers and designers of the project and they will be doing the construction work on it. It involves a number of different elements to include the decommissioning of plant two, and converting that to a booster type operation. It involves a connection from plant two to plant three. the modernization and upgrades to Plant 3 to a 12 MGD, initially a 12 MGD, and expandable in the future out to 24 MGD. So we've done a number of task orders with them, and with that I'll hand off to Mark and to our Wharton Smith folks to give us an update.

Good evening again, and like T. Michael said, about a year ago, March of last year, we entered into a progressive design agreement with Wharton Smith and their talented crew team to prepare us for the future and expansion of Wastewater Plant 3 to the water resource facility. The initial task order, we had task order one that was issued right after the agreement was executed, did a lot of the initial preliminary stuff, gave us a feasibility study, gave us concept plans to get us to the point to make decisions that brings us to today. Task order three, will start the hard design work. It will give us some pre-destruction packages. It gives us 60% plans, 90% plans in the upcoming permit process. We have the Wharton Smith team here with a lot of work. Anthony Baxley and Kimmy Horn, our design consultant with CARA, to tell us a little bit more about the project.

Thank you. My name is Anthony Baxley. I'm with Warden Smith. I'm the senior pre-construction manager. I've been involved in the project since the beginning. I already did a very great introduction, an overview of where we're at today. So as was said, we are looking at the expansion of Plant 3, specifically in this task order. And this is really the major design task of this project. There will be others associated with plant two as described, getting those flows to plant three, but this is to harden your existing facility, improve it, modernize the treatment of that facility and expand its capacity. I'm gonna turn it over to Kara with Kim Lee Horne. Kim Lee Horne is part of our team. They are the lead design engineer. Our team does consist of multiple firms, but they are the lead and Kara is the program manager overseeing all of these task orders from the design perspective.

Chair, before you take off, I just want to point out, in my budget presentation, I talked about major investments in your utility operations, proprietary business operations. This is one of those major investments to harden a facility that was constructed in the early 1970s and has been online for 50 years and reaching capacity. So hence, it's unfortunate we're having long presentations on an agenda review night, but I think it's important because all this stuff you can see does tie together. Thank you.

Yeah, thank you. As Anthony mentioned, my name is Kara Elliott with Kimley Horne. And as we've touched on already a little bit today, I wanted to start off with a quick program overview just to make sure that we all have some alignment with our ultimately our 50 year planning goals. So one of those initial goals is to consolidate the wastewater flows to the Pollard Road site, which will enable us to decommission wastewater treatment plant number two. Ultimately we will need to increase the capacity of the treatment plant at the Pollard Road site from seven and a half to initially 12 and then ultimately We're planning for a 24 MGD build out to support the growth of the city long term. We also have plans to ensure that we continue to produce reliable, high quality effluent water to ultimately align with the overall One Water vision. So as discussed, we've been well underway working on task order one and task order two Task order one focused on the program planning efforts and included some critical decision making. So we completed a condition assessment of both wastewater treatment plant number two and wastewater treatment plant number three, which helped inform the best way to continue to make use of this infrastructure while we expand the capacity at plant three and again, ultimately decommission plant two. This included a route alternatives analysis, looking at several different routes through the city to reroute and consolidate the wastewater flows. And we also had some initial design work to make some interim improvements to solve some of the more immediate issues with a filter improvement at treatment plant number three and a filter improvement at treatment plant two, as well as some associated electrical work. as part of the initial task one planning effort we completed a alternatives evaluation that considered several different treatment technologies and in partnership with the city and operations staff we narrowed down some of the preferred options and ultimately completed a net present worth evaluation looking at the capital costs and the long-term the 20-year operational costs associated with the selected alternative from that we paired the findings from that evaluation with the findings from our condition assessment to develop a phased plan that takes the most advantage of the existing infrastructure helping to defer some capital costs for the future while also making sure that we are set up to continue to provide reliable wastewater treatment service in the near term. So what you have on your screen here is an overview of the site plan that is defined in task order number three. The green boxes more to the right side of the screen that are outside of the existing treatment plant fence is all new infrastructure. That new infrastructure includes a new headworks, new biosolids processing tanks, and a membrane filtration system. We do plan to continue to use the existing biological process tanks with some improvements to the tankage and the mechanical equipment so that we can increase both the reliability and the capacity of the system. We have planned, as you can see on this graphic, for the ultimate 24 MGD build out. So we're making sure that we're leaving space not only for future tankage, but considering the constructability of that tankage as well in partnership with Wharton Smith. Zooming back out a little bit, this is a timeline overview. Here we are in 2026. We are well underway with task order one and have plans to get that wrapped up this year with the completion of the construction related to the interim improvements being completed next year. We have task order two well underway that focuses on the improvements at wastewater treatment plant number two. And today we're looking forward to getting going on the larger design and construction effort associated with the water resource facility at Pollard Road and the wastewater treatment plant number three improvements. So with that, thank you very much for your time and I would be happy to answer any questions.

In looking at this, are you going to build capacity to 12 and then expand that capacity again at another later date? That's correct. And if you would go back a slide, it kind of looked like you had ribs. Do you have ribs on it? We do not. In the far right where it's vacant but it's above the greens, some of that, it kind of looked like ribs.

Those are oxidation basins. Okay. Yes.

So, Mayor and Commissioners, again, this is, in my opinion, and I think certainly in my career, past, present, and whatever it may be in the future for Winter Haven, the largest probably project we will undertake. The water resource facility, because it is a combination of what comes from plant two, an expansion and enhancement of plant three, and other elements within the Pollard Road area, regional storm ponds and the like, this is a several hundred thousand dollar project when it's all said and done, as we've communicated on multiple occasions. uh... this is this work the design work is significant this is a twenty seven point seven eight million dollar project to to do the design and get everything to that point of getting to a g m p that i would anticipate that's probably in the I'm going to spitball it here, and please correct me if the team thinks otherwise. It's probably in a 10% to 12% cost, maybe even a little bit under that of what the total construction cost of the projects will be. but it's a significant one, hence it being under new business. I don't take those investments lightly, but this is long-term, the wastewater treatment capacity for this community of present day 62,000, future upwards of 100,000 people. to get it to 12 mgd to handle the capacity of plant two and three as they exist today as well as additional growth and the expandability to that 24 mgd so

I want to be abundantly clear on that.

And again, these are costs that are when your rate study was done by Raftelis in 2024, they're looking at a capital investment program and anticipating what those costs are so that your rates are set to accommodate. And that's why we went up as much as we did in percentages on wastewater because we knew we were going to have such an investment there. The hope is and the expectation is when this project is complete, no less than 50 years hopefully 75 years before the city has to do further expansion or enhancement certainly these things they they endure wear and tear and they they will degrade just because of the volatility of wastewater overall but this is one of those decisions that we make under this administration and this commission that really has an impact for generations yet to come So just want to point that out.

Yeah, so no matter what, we're all gone by the time this needs to be replaced. Except for MJ. All right. I don't have any questions.

I told you you were going to get a degree in wastewater this evening.

Just what I always wanted. I've been to Gainesville enough. I know about wastewater.

Thank you to the Wharton Smith and Kimley Wharton team. Thank you, Mark. I may be the only person that appreciates that statement, but I do appreciate it. You probably are. The last item I do, and I want to just kind of preface this, that Mr. Murphy, I think, needs to give some direction on another matter for Monday. But the final item, 13B, is that item I mentioned during my budget presentation that on Monday evening, you have to set your tentative millage rate and your first meeting date. So we already have on there the resolution to change that meeting date to September 15th from the 14th. and our recommendation is that you set the tentative millage rate at the existing rate of 6.5900 mils. Once that is set, It cannot be increased without significant processes that you would have to go through. I don't anticipate any need that you're going to have to increase that. I think it's fair to say to set it at that. If for some reason the commission made a decision to lower it, you certainly can always do that. I would caution and just in light of not knowing what the future holds with your revenues in light of Amendment 3, but that's what the final item that you'll consider Monday evening. And those notices, Christopher, I believe they go out August 4th. We have to have everything on not only the general fund, but also on the CRAs have to be transmitted on the appropriate form so that those tax notices can be sent out.

Yes, we'll have to certify the DR-420 by August 4th.

That's all we got for tonight. Commissioners, anything else?

Mr. Mayor, Commissioner, may I make a comment? You, you all have a special meeting on Monday at five o'clock just before the regular meeting at six. And that is a special meeting to conduct a de novo hearing, which means a brand new hearing, um, to consider a, uh, application, uh, for a large scale drinking establishment that was denied by the planning commission, uh, after a duly noticed public hearing and pursuant to our land development code, it allows applicants, in this case, I believe it's Mr. Anaset, the opportunity to, if they feel aggrieved of the order at the planning commission level, to ask for you all as the city commission to consider this anew. That's de novo means, you know, it's a Latin phrase, and it's starting from the beginning. It is a quasi-judicial proceeding, which means you all, when you adopt zoning ordinances and other types of ordinances, but mostly zoning ordinances, you all sit as the judges in making a determination on someone's interests and rights as it relates to a specific piece of property. And in this case, it is Mr. Anisette's request to have a large scale drinking establishment on a specific piece of property within the city of Winter Haven. To that extent, and I've discussed this with you before, I would encourage you not to have any outside the meeting, what we refer to, again, a Latin term is ex parte communications. What does that mean? Well, if people try to, the applicant, for example, wants to talk to you, communicate with you prior to the hearing on Monday at five o'clock, I would suggest that you politely say that you would prefer not to speak about these matters until the hearing. Please come to the hearing and tell me what it is you want me to know. And the reason for that is we don't want you to become biased or have any of the due process rights of the applicant tainted by things that are said outside of the duly noticed public hearing. because the applicant, out of a fairness concept, should be given the opportunity to question or present information perhaps that would contravene or that would be supplementary to or would answer other concerns. So we wanna have a full and robust, fair, due hearing for this applicant. I believe that will happen. The staff has provided a report. You have been provided information in the agenda. And certainly I would come to the meeting with an open mind and the willingness to make a decision only after you've heard all of the information and facts that will be presented at the hearing. At that hearing, we will be swearing in anyone who wishes to provide information, testimony to you. This is not a court proceeding, or a judicial court proceeding, so we do not follow the strict rules of evidence. So it's a little more casual in that regard, or more informal. But there are some basic modicum of procedures that we have to adhere to, and that is what we are going to be doing on Monday. um i don't know we have noticed that meeting in the same manner as the planning commission meeting was noticed which meant that notices of the meeting were mailed to everyone i believe within 500 feet of the location of the of the property where the proposed large-scale drinking establishment application is cited. It was also advertised in the newspaper and I believe the property was posted. So that's a lot more notice than we normally give for your meetings. That's fine. That's again required by our code. And so anyone I would, folks that came to the planning commission meeting may come here. Mr. Mayor, I think as we have discussed, we will probably put in time limits on the applicant. And then of course we have the five minute time limit for the public that wish to speak. So those will all still apply, and it will be a proceeding that, and I'm not sure, have we had a de novo hearing in front of this commission before? I know we have with Commissioner Birdsong.

I think Commissioner Davis is probably the only one that hasn't been part of one.

Yeah, we've had it before. We had it in the Albertsons parking lot or something.

Yes, yes. I think we've had a couple. We've had a couple. So this will be similar to that to the extent that you're familiar with those proceedings. And I'm here to help you all, guide you as best you can. But it's ultimately your decision based on the information and evidence that you'll hear. Ultimately, there will be an order, a written order prepared that I'll take care of doing. We'll make sure that the proceeding is conducted in accordance with our code and to afford the applicant the due process that any applicant would be entitled to.

Thank you. I have two quick questions. One, you mentioned ex parte communications. Would that also, I assume, include any other interested parties, constituents, maybe people that live in that area trying to talk to us? We probably should not have those conversations either outside of this hearing. Correct.

Yes, sir, Commissioner Davis. And I also, to the extent you have had those, I would disclose them. prior to taking a vote or prior to the consideration to the applicant so they know, you know, Mr. and Mrs. Jones approached me and we talked about this or we said this, so that the applicant has an opportunity to rebut that information. But yes, that would be applicable to that as well. The only time that would not be applicable would be if you're talking with me, of course your lawyer, or with staff matter. I would ask that you disclose those at the public meeting prior to taking any vote.

Okay, then the second question, you will be able to answer questions during the hearing as far as what kind of standard we're applying, You mentioned we're quasi-judicial, so I may have some questions then as to what exactly our parameters are for making a decision at the time. Okay.

The standard, just so we're clear, will be that this would be reviewed, I believe, on a petition for writ of certiorari standard, which would, yeah, I'll be prepared to address the standard review.

Very good.

A lot of Latin terms. I've got to brush up. You've learned about wastewater.

Now you'll learn more about Latin.

But anyway, thank you. Could be. Yeah. Thank you. That's all I have. Good. That sounds good. Thank you. All right.